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Weekend EditionThe Best of The S&A DigestSaturday, October 3, 2009  Our resident biotech expert, Dr. George Huang, closed another huge trade this week. In nine months, his FDA Report subscribers just about doubled their money on QLT, a small biotech that specializes in eye care. Back in December, when readers got in, QLT was trading about 20% below cash on the balance sheet. And that's not counting over $100 million in royalties the company brings in every year.George didn't have too long to wait for the market to come to the same conclusion he did. After seeing QLT's results in the second quarter, investors finally realized what a bargain the stock was. It soared over 30% in August alone. His readers closed out the trade on Monday for an 87% total return...
And that's not at all unusual for FDA Report picks. Since George launched his advisory, readers have closed 17 trades with an average return of 40% and an average holding period of less than four months. His hit rate is more than 70%: unheard of in the biotech sector.
Most recently, he found a dominant medical-device firm trading at absurdly low valuations. The stock should climb at least 60% in the next few months. To learn more about the FDA Report – and a class of "disappearing stocks" George is tracking right now – click here.
This week, I watched Fed Chairman Ben Bernanke testify before Congress. "I do not support too big to fail," said Bernanke – the great maestro of last year's bailouts, the very man who enabled "too big to fail." Only in Washington.Watching these guys is like watching a puppy chasing his tail. He thinks he's going to catch it. And he has no idea why you're laughing at him.
The "quote of the day" comes from the Wall Street Journal..."The DIF [Deposit Insurance Fund] balance going negative doesn't mean we've run out of money," FDIC Chairman Sheila Bair told reporters Tuesday.
Yes, the head of the organization in charge of protecting our nation's bank deposits doesn't think having a negative balance is "running out of money."
Last week, the president and chief operating officer of a little-known technology company increased his holdings of company stock by 550%. The reason? Shares of his company are about to explode. This small company (less than $240 million market cap) focuses on one of the fastest-growing businesses in the world today – digital video. And it already has two of the best customers in the world: Comcast and Verizon. Its business is only just getting ready to boom...Inside Strategist editor Braden Copeland expects these shares to double in a year, and says they could "easily" return 300% from here. To sign up for Inside Strategist, and access Braden's latest pick, click here...
You've got to hand it to Wall Street... Those boys are great at inventing new ways to make money. Michael Milken did it with junk bonds. Lewis Ranieri did it with securitized mortgages (bundling together pools of mortgages, selling them to investors, and collecting fees along every step of the transaction). We all know how that worked out.Now, banks are trying to take all the crappy real estate securities on their books and repackage them to get a higher rating... and consequently hold less cash against those assets. The deals are known as "re-remic," which stands for resecuritization of real-estate mortgage investment conduits. The result is the same – banks are holding the same assets as before, just with higher ratings – but bankers, lawyers, and ratings agencies earn fees throughout the process. And we've learned you can't trust a triple-A rating from Moody's or Standard & Poor's in the first place, making re-remicing even more ridiculous...
Jim Rogers told CNBC inflation is already much worse than the government is reporting... "There's no question the U.S. is vulnerable to hyperinflation down the road or certainly the inflation we saw in the 1970s. I would expect that to come back in the foreseeable future, certainly in the next few years," he said."The true inflation rate in America? It's certainly at least 6% or 7%. The U.S. government lies about it, as you know. Everybody who shops knows that prices are up, everybody except the U.S. government, and I wish we knew where they shopped so we can shop there too and get good prices."
Rogers said the Fed's money printing is destroying the dollar and he is "extremely worried" about the long-term prospects of the currency. He recommends buying Asia, but said he isn't currently buying anything due to the recent rally.
Regards,
S&A Research
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Date Range:9/28/2009 to 10/3/2009
Date Range:9/28/2009 to 10/3/2009
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