Investor Snatches Up 650 Foreclosed Homes For $4.8 Million - Business Insider

 And the Rich just keep getting richer without a 
'normal' amount of risk because they can reject a winning bid on inspection if the properties they bid on are not up to scratch......
 


A yacht-dealing millionaire ticked off hundreds of Detroit homebuyers when he swept an auction of 650 tax foreclosed properties last week. 
 
Bill McMachen told Fox News 2 this is his first foray into the real estate business. He plunked down $4.8 million for the lot of homes, which averages out to just over $7,000 apiece. As far as his future plans,  he says he's shooting to make back $2 million by flipping some homes and donating others to needy families. 
Like the some 300 consumers (and other, less well-heeled investors, to be sure) who were elbowed out by McMachen's bid, potential homeowners are quickly finding themselves fighting losing battles against money-slinging investors. 
"If we knew it was going to happen like this, we wouldn't even have spent any time," an anonymous investor who was beat out by McMachen's bid told Fox. "They could've made more money, I mean triple the money they made."

"They" is Macomb County, which sold the lot to McMachen for only the price of the taxes that were owed on each property (in some cases as little as $50).  As municipal governments struggle to fill their coffers, some have been more eager than ever to sell off tax foreclosed homes––no matter who's buying.

If you're in the market for a new home these days, chances are you'll encounter some stiff competition along the way. Your best line of defense? If you can't beat 'em, join 'em.

That means doing every bit as much homework as real estate investors before snatching properties out from under your competitors' feet.

"The savvy investor knows the areas in which he wants to buy, he knows what size and type of properties he’s after, and he knows what he’s willing to spend. So, when he sees a listing that meets his criteria — he’s able to pounce," writes  Zillow real estate expert Leonard Baron. "If the offer is accepted, Mr. Early Bird can go see the property; if he doesn’t like it, he can back out of the deal, generally at no cost (be sure to read your contract!)." 


Here's how Baron suggests making your bid stand out in the crowd of house flippers and Donald Trump wannabes:

• Include a letter that pleads your case. 
• If it’s a traditional sale, ask to make your offer in person to the seller. 
• Some listings require a lender pre-qualification letter and proof of funds. Whether they’re requested or not, you should always include those with your offer (a pre-approval letter from a lender would be even better).

Read more: http://www.businessinsider.com/bill-mcmachen-snatches-up-650-foreclosed-homes-for-48-million-2012-8#ixzz22uzZ4O00

Bill McMachen Snatches Up 650 Foreclosed Homes For $4.8 Million - Business Insider






Bill McMachen Snatches Up 650 Foreclosed Homes For $4.8 Million - Business Insider

Facebook's stock plunge highlights fears about growth – USATODAY.com

It just gets worse on the stock price for FB investors....



 















Facebook's stock plunge highlights fears about growth – USATODAY.com

Facebook shares, 44% below IPO, continue to fall – USATODAY.com

The shares are now almost 45% below the $38 a share IPO price when it started trading May 18.

While the company's results last week roughly matched Wall Street expectations, investors had hoped to see more progress in terms of user growth and in how the company is capitalizing on the rapid rise of mobile usage. Investors wanted Facebook (FB) to "show confidence they could grow the company, and they didn't," says Francis Gaskins of IPODesktop.com

The worst may be yet to come. On Aug. 16, 91 days after the IPO, insiders, such as company officers, directors and employees, can sell 268 million shares of stock. Between 91 and 181 days after the IPO, insiders can sell an additional 137 million shares. Given the stock's plunge so far, investors are braced for an avalanche of available shares from insider sales, putting more downward pressure on the stock price.

It's a stunning reversal of fortune in a short period of time. Facebook is now the second-worst performer of all IPOs in the U.S. so far this year, says IPOScoop.com. Around the time of the IPO, individual and institutional investors alike were clamoring for shares of the multibillion-dollar IPO. Facebook shares' precipitous 43% price drop is slightly better than the 51% decline by Renewable Energy Group, which went public in January.

Data by YCharts

The fallout from Facebook's dismal performance isn't confined to the billions of dollars erased from CEO Mark Zuckerberg's personal fortune. Analysts attributed at least part of Tuesday's sell-off to the announcement of Facebook-related losses by a large Swiss bank. UBS on Tuesday reported a disappointing 58% decline in quarterly profits, in part, to a 349 million franc loss ($357 million U.S.) from its handling of Facebook stock at the IPO launch. The bank says it lost money due to technical problems handling orders of Facebook stock for clients.

"Facebook doesn't have any friends on Wall Street or Silicon Valley," Gaskins says. "That's a problem. Their brand has been damaged a lot."

 Source:
Facebook shares, 44% below IPO, continue to fall – USATODAY.com

 LINK:  http://www.usatoday.com/money/story/2012-07-31/Facebook-stock-hits-new-low/56620852/1?csp=hf

EconoMonitor : EconoMonitor » LIBOR Scandal Explained

 




EconoMonitor : EconoMonitor » LIBOR Scandal Explained

Boom and Bust Quotes - QFINANCE

• "The greatest tragedy would be to accept the refrain that no one could have seen this coming, and thus nothing could have been done. If we accept this notion, it will happen again."
  Financial Crisis Inquiry Commission (2009–2011), US government-appointed commission
  On the financial crisis of 2008–09
  Source: “The Financial Crisis Inquiry Report” (January 2011)
• "If Greece is equivalent to Bear Sterns, which was rescued by the US authorities, which country is equivalent to Lehman Brothers, which wasn’t?"
  Hamish McRae, British journalist
  Source: Independent (London) (April 30, 2010)
• "Wall Street is not being made a scapegoat for this crisis: they really did this."
  Michael Lewis (1960–), US writer and former financial trader
  Source: Interview, Independent (London) (April 23, 2010)
• "My daughter asked me when she came home from school, “What’s the financial crisis?” and I said, it’s something that happens every five to seven years."
  Jamie Dimon (1956–), US CEO of JPMorgan Chase
  Source: Speaking to the Financial Crisis Inquiry Commission (January 13, 2010)
• "We’ve just had a financial crisis that bankers believed was impossible, whose economic damage has been incalculable. In response we must think the unthinkable."
  Stephen Foley, British journalist
  Source: Independent (London) (January 2, 2010)
• "The only surprise about the economic crisis of 2008 was that it came as a surprise to so many."
  Joseph Stiglitz (1943–), US economist
  Source: Freefall: America, Free Markets and the Sinking of the World Economy (2010)
• "Our long, unaffordable global lunch is coming to an end and a headachey afternoon in the office beckons. We’ve spent the last 10 years downing extra digestifs to delay the arrival of the bill. But here it is, without so much as an accompanying mint, and it’s massive. The trick now is to persuade the third world to pay an equal share even though they only had a soup."
  David Mitchell (1974–), British comedian and writer
  Source: Observer (London) (December 13, 2009)
• "Everyone is saying that we’re on a tightrope, and we certainly are in mid-air over a gorge. But where is the rope?"
  Anonymous
  On the state of the British economy.
  Source: Anonymous Tory MP quoted in the Independent (London) (December 7, 2009)
• "When the crash came, the free market had no answers, no self-correcting mechanisms and no solutions."
  Ivon Fallon, British journalist and author
  Source: Independent (London) (November 27, 2009)
• "The lesson, surely, is that the recurring nature and the frequency of such follies, and their mutation into hitherto undreamt of forms, suggest that they are in fact an inherent cost of capitalism, or even human nature … The delusion now would be to believe that any system of regulation could prevent such crises and busts happening again."
  Sean O'Grady, British economics journalist
  Source: Independent (London) (November 20, 2009)
• "The commercial storm leaves its path strewn with ruin. When it is over there is calm, but a dull, heavy calm."
  Alfred Marshall (1842–1924), British economist
  Source: Quoted in the Economist (London) (October 1, 2009)
• "We will have more crises and none of them will look like this because no two crises have anything in common except human nature."
  Alan Greenspan (1926–), US economist, former chairman of Federal Reserve
  Source: Interview on BBC TV (September 8, 2009)
• "It is a bit like trying to cure a cancer patient, while also training him for next year's marathon."
  Bruce Anderson, British journalist
  On attempts to lead the economy out of recession while also cutting government spending.
  Source: Independent (London) (August 10, 2009)
• "By rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely."
  Paul R. Krugman (1953–), US economist
  Source: New York Times (July 16, 2009)
• "Companies that weren't much more than pot-fueled ideas scrawled on napkins by up-too-late bong smokers were taken public via IPOs, hyped in the media, and sold to the public for mega-millions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows, and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement."
  Matt Taibbi (1970–), US journalist
  On the dot.com bubble of 1999–2000.
  Source: Rolling Stone (New York) (July 2009)
• "When this crisis began, crucial decisions about what would happen to some of the world's biggest companies—companies employing tens of thousands of people and holding trillions of dollars in assets—took place in emergency meetings in the middle of the night. We should not be forced to choose between allowing a company to fall into a rapid and chaotic dissolution or to support the company with taxpayer money. That is unacceptable."
  Barack Obama (1961–), US president
  Source: Speech introducing proposed regulatory reforms for the financial sector (June 17, 2009)
• "The panic appears to be over. Now is the time to get worried."
  William Keegan (1938–), British author and journalist
  On the recession of 2008–09.
  Source: Observer (London) (June 14, 2009)
• "Give a small number of people the power to enrich themselves beyond everyone's wildest dreams, a philosophical rationale to explain all the damage they're causing, and they will not stop until they've run the world economy off a cliff."
  Philipp Meyer (1975?–), US novelist and former financial trader
  Source: Independent (London) (April 27, 2009)
• "In a boom, envy; in a bust, anger."
  Dominic Lawson (1956–), British journalist
  Source: Independent (London) (April 7, 2009)
• "Gordon Brown promised to abolish boom and bust. He has kept half his promise."
  William Hague (1961–), British politician
  Source: Speech quoted in the Independent (London) (April 6, 2009)
• "The uncomfortable truth is that we all enjoyed the party far too much to query where all the booze was coming from. Now we seem intent on lynching the barman for letting us get drunk and attacking the Government for letting us get a hangover."
  Sean O'Grady, British economics journalist
  Referring to the financial crisis of 2008–09.
  Source: Independent (London) (April 2, 2009)
• "My nightmare scenario is that the government saves Citibank once again, as well as the other banks, and business resumes as usual. Then, the next time the system breaks, it breaks much, much bigger."
  Nassim Nicholas Taleb (1960–), Lebanese-born US academic and writer, former derivatives trader
  Source: Interview, Washington Post (March 15, 2009)
• "We are chronicling something unprecedented: the billionaire bust."
  Steve Forbes (1947–), US publishing executive
  On Forbes magazine's revelation that the number of billionaires in the world had fallen by 30% over the previous 12 months.
  Source: Quoted in the Sunday Independent (Dublin) (March 15, 2009)
• "You know, in every movie I’ve seen about the end of the world, civilization collapses because of something wicked cool happening—an asteroid hits, nuclear war, a supervirus, an ape revolution, whatever. If civilization collapses over credit default swaps I am going to be pissed."
  Dan McEnroe, US writer and blogger
  Referring to the role of complex derivatives in the financial crisis of 2008–09.
  Source: A Blog Named Sue blog (March 5, 2009)
• "An army of experts assured us on a daily basis that this boom couldn't possibly crash like previous booms because this boom was still going on whereas all previous booms had ended."
  Mark Steel (1960–), British comedian and author
  Source: Independent (London) (February 11, 2009)
• "The reality is that this is becoming the most serious global recession for … over 100 years."
  Ed Balls (1967–), British politician
  Source: Speech given to a Labour conference in Yorkshire (February 9, 2009)
• "We were on our own for years and we went too far, too fast, in too little time … We're just like kids whose parents went away for the weekend and we trashed the whole house."
  Hallgrimur Helgason (1959–), Icelandic novelist and journalist
  On the implosion of Iceland's financial services industry.
  Source: Quoted in the Guardian (London) (January 26, 2009)
• "This recession is not a failure of market economics. It is a reassertion of market economics after a decade in which we paid ourselves more than we were producing, and funded it precariously and temporarily by complicated credit instruments that it took a while for the market to rumble … The collapse of confidence is not irrational; it's the correction to a long run of irrational confidence."
  Matthew Parris (1949–), British journalist and former politician
  Source: The Times (London) (January 24, 2009)
• "Currently the prime minister is the equivalent of a doctor who is asked to save the same person's life several times. Originally the relatives are grateful but then start to wonder why his services are required so often."
  Steve Richards (1960–), British journalist
  On Gordon Brown's bank bailout plans.
  Source: Independent (London) (January 20, 2009)
• "The government increasingly resembles somebody who is trying to give the kiss of life to a corpse."
  Vince Cable (1943–), British politician
  On the British government's bank bailout plan.
  Source: Independent (London) (January 20, 2009)
• "There's a rumour going around that states cannot go bankrupt. This rumour is not true."
  Angela Merkel (1954–), German chancellor
  Source: Speech made in Frankfurt (January 2009)
• "That’s our mirror. Every dip, every crash, every bubble that’s burst, a testament to our brilliant stupidity. This one gave us the railroads. This one the internet. This one the slave trade. And if we hope to do anything about saving the environment, or getting to other worlds, we’ll need a bubble for that too. Everything I’ve ever done in my life worth anything has been done in a bubble: in a state of extreme hope and trust and stupidity."
  Lucy Prebble (1981–), British playwright
  Spoken by Jeffrey Skilling, CEO of Enron, as he points to a chart showing booms and bust in the US stock market
  Source: Enron (2009)
• "In that restaurant, crammed with self-satisfied know-nothings, we had gazed upon the amoral soul of the housing boom, the crux, the fulcrum, the place where so many dreams would begin, and where heartbreak and financial collapse would surely follow."
  Larry McDonald, US former trader at Lehman Brothers
  On a restaurant frequented by mortgage salesmen at the height of the subprime lending boom
  Source: A Colossal Failure of Common Sense: The Incredible Inside Story of the Collapse of Lehman Brothers (2009)
• "Once you’re in a bubble, it needs nerves of steel to stay out. Can you imagine the pressure? On any trader? Everyone around you is making money … and you’re the one who says I don’t believe in securitised credit arrangements?"
  Sir David Hare (1947–), British playwright
  Source: The Power of Yes (2009)
• "There’s a strange thing goes on inside a bubble. It’s hard to describe. People who are in it can’t see outside of it, don’t believe there is an outside."
  Lucy Prebble (1981–), British playwright
  Source: Enron (2009)
• "At present it is a bit like being in a country where a civil war is taking place. Away from the fighting, everything seems normal enough … Open-air cafes are full, shops are busy and the best restaurants have no spare tables. But in the combat zones, perhaps not very far away, life is hellish."
  Andreas Whittam Smith (1937–), British journalist
  On the deepening recession.
  Source: Independent (London) (December 5, 2008)
• "I and others were mistaken early on in saying that the subprime crisis would be contained."
  Ben Bernanke (1953–), US economist and chairman of the US Federal Reserve
  Source: “Anatomy of a Meltdown,” New Yorker (December 1, 2008)
• "I looked at the screens. I was staring into the abyss. The end. I felt this shooting pain in my head. I don't get headaches … I thought I was having an aneurysm."
  Danny Moses, US financial trader
  On the stock-market crash of September 18, 2008.
  Source: Quoted in Condé Nast Portfolio (New York) (December 2008)
• "When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly."
  Paul R. Krugman (1953–), US economist
  Source: New York Times (November 14, 2008)
• "We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures. Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief."
  Alan Greenspan (1926–), US economist, former chairman of Federal Reserve
  Source: Speaking before the House Committee on Oversight (October 23, 2008)
• "This thaw took a while to thaw, it's going to take a while to unthaw."
  George W. Bush (1946–), US former president
  Referring to frozen credit markets.
  Source: Speech given in Alexandria, Louisiana (October 20, 2008)
• "Consumer spending is now plunging at serious-recession rate … even if the rescue now in train succeeds in unfreezing credit markets, the real economy has immense downward momentum. In addition to financial rescues, we need major stimulus programs."
  Paul R. Krugman (1953–), US economist
  Source: “Train Headed Downhill,” New York Times blog (October 15, 2008)
• "Why did no one see it coming?"
  Elizabeth II (1926–), British Queen
  On the financial crash of 2008.
  Source: During a visit to the London School of Economics (October 2008)
• "When we're talking about a trillion dollars of taxpayer money, "trust me" just isn't good enough."
  John McCain (1936–), US senator and presidential candidate
  On the US Treasury secretary's Wall Street bailout plan.
  Source: Quoted in The Times (London) (September 25, 2008)
• "This sucker could go down."
  George W. Bush (1946–), US former president
  Referring to the entire US financial system at an emergency cabinet meeting.
  Source: Quoted in the New York Times (September 25, 2008)
• "These are not normal circumstances. The market is not functioning properly."
  George W. Bush (1946–), US former president
  Source: Speech (September 24, 2008)
• "There are no atheists in foxholes and there are no libertarians in financial crises."
  Paul R. Krugman (1953–), US economist
  Source: Interview with Bill Maher on HBO TV (September 19, 2008)
• "Anyone who says we're in a recession, or heading into one—especially the worst one since the Great Depressionms—is making up his own private definition of "recession.""
  Donald Luskin (1954–), US investment guru
  This was the day before Lehman Brothers filed for bankruptcy, triggering a stock-market crash.
  Source: Washington Post (September 14, 2008)
• "Last year this was a financial crisis that we thought with a bit of luck would be over by Christmas."
  Charles Bean (1953–), British economist and deputy governor of the Bank of England
  Source: Quoted in the Guardian (London) (August 26, 2008)
• "What, pray, is all the fuss about? … If this is the worst crisis since the Great Depression then we must have all been living pretty cushy, gilded lives since the 1930s. If this is all it takes to destroy capitalism … then it is a wonder why the Soviet Union failed to do so during its seven decades of existence. For the past year has actually not been very bad at all—unless you are a banker, a bank shareholder or Gordon Brown; and few will shed tears for any of those."
  Bill Emmott (1956–), British economics journalist
  Source: Guardian (London) (August 12, 2008)
• "We can have confidence in the long-term foundation of our economy … I think the system basically is sound. I truly do."
  George W. Bush (1946–), US former president
  The US financial system plunged into crisis in September.
  Source: Speech (July 15, 2008)
• "I think this is a case where Freddie Mac and Fannie Mae are fundamentally sound. They're not in danger of going under … I think they are in good shape going forward."
  Barney Frank (1940–), US politician
  Fannie Mae and Freddie Mac were taken into government "conservatorship" in September 2008.
  Source: Remark (July 14, 2008)
• "It's quite possible that at some point we may get an odd quarter or two of negative growth, but recession is not the central projection at all."
  Mervyn King (1948–), British governor of the Bank of England
  Source: Speech (May 2008)
• "The fundamentals of America's economy are strong."
  John McCain (1936–), US senator and presidential candidate
  Source: Interview on Bloomberg TV (April 17, 2008)
• "A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!"
  Richard Band, US financial writer
  Source: Profitable Investing Letter (March 27, 2008)
• "The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War."
  Alan Greenspan (1926–), US economist, former chairman of Federal Reserve
  Source: Financial Times (London) (March 16, 2008)
• "The market is in the process of correcting itself."
  George W. Bush (1946–), US former president
  Source: Speech (March 14, 2008)
• "History records no case where the bubble gracefully deflated, accompanied by a slight hiss of escaping optimism. The speculative episode always ends with a loud explosion."
  Andreas Whittam Smith (1937–), British journalist
  Source: Independent (London) (January 28, 2008)
• "If the financial system has a defect, it is that it reflects and magnifies what we human beings are like … money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility."
  Niall Ferguson (1964–), British historian
  Source: The Ascent of Money (2008)
• "The recession debate is over. It's not gonna happen … The Bush boom is alive and well. It's finishing up its sixth splendid year with many more years to come."
  Lawrence Kudlow (1947–), US economist and right-wing commentator
  Source: Kudlow’s Money Politics blog (December 5, 2007)
• "The world economy [is] more stable than for a generation … Our hugely sophisticated financial markets match funds with ideas better than ever before."
  David Cameron (1966–), British prime minister
  The first signs of the global financial crisis were already becoming apparent.
  Source: Speech given at the London School of Economics (September 2007)
• "Over the ten years that I have had the privilege of addressing you as Chancellor, I have been able year by year to record how the City of London has risen by your efforts, ingenuity and creativity to become a new world leader … So I congratulate you, Lord Mayor and the City of London, on these remarkable achievements, an era that history will record as the beginning of a new golden age for the City of London."
  Gordon Brown (1951–), British former prime minister
  The first signs of the global financial crisis became apparent the following month.
  Source: Speech given at the Mansion House, City of London, while Chancellor of the Exchequer (June 20, 2007)
• "It's a crisis if everybody calls it a crisis."
  Morgan Downey, US commodities trader
  Source: Remark (2007)
• "The final chapter of Greenspan's legacy has not been written. Maybe it will work out fine, but maybe not."
  Paul Kasriel, US financial analyst
  On Alan Greenspan's retirement as chairman of the US Federal Reserve.
  Source: Quoted on Bloomberg.com (January 26, 2006)
• "Unsustainable situations usually go on longer than most economists think possible. But they always end, and when they do, it's often painful."
  Paul R. Krugman (1953–), US economist
  Source: Address given in Bangkok (September 2005)
• "Real estate is still a great investment opportunity for households. Price appreciation will continue. It may not be at 20%. It may … even go down to 5%."
  David Lereah, US economist and former spokesman for the National Association of Realtors
  Between 2006 and 2008 US house prices fell faster than they fell during the Great Depression.
  Source: Interview on SmartMoney.com (August 12, 2005)
• "We are in the biggest real-estate boom we've ever seen. Something is going to happen to end this."
  Robert Shiller (1946–), US economist and author
  Between 2006 and 2008 US house prices fell faster than they fell during the Great Depression.
  Source: Remark (August 2005)
• "Global capital markets pose the same kinds of problems that jet planes do. They are faster, more comfortable, and they get you where you are going better. But the crashes are much more spectacular."
  Lawrence H. Summers (1954–), US economist and former president of Harvard University
  Source: Interview, Time (June 26, 2005)
• "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria."
  Sir John Templeton (1912–2008), American-born British investor and philanthropist
  Source: Quoted in Short-term Trading in the New Stock Market (Toni Turner, 2005)
• "The central problem of depression-prevention has been solved, for all practical purposes."
  Robert Lucas, Jr (1937–), US economist
  Source: Address to the American Economic Association (2003)
• "The four most expensive words in the English language are, "This time, it's different.""
  Sir John Templeton (1912–2008), American-born British investor and philanthropist
  Source: Quoted in The Four Pillars of Investing (William J. Bernstein, 2002)
• "If Wall Street crashes, does Main Street follow? Not necessarily."
  Ben Bernanke (1953–), US economist and chairman of the US Federal Reserve
  Source: Remark (September 2000)
• "Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball the giddy participants all plan to leave just seconds before midnight. There's a problem, though: they are dancing in a room in which the clocks have no hands."
  Warren Buffett (1930–), US entrepreneur and financier
  Source: Letter to shareholders (2000)
• "Property and stock market crashes … litter the history of capitalism. But at the same time there is no evidence that anyone has ever been successful in preventing such a crash."
  Lester Thurow (1938–), US economist, management theorist, and writer
  Source: “Barking Up the Wrong Tree,” www.lthurow.com (November 2, 1999)
• "A crash does not come knocking at the front door by appointment."
  Jim Slater (1929–), British business executive and author
  Source: Quoted in Treasury of Investment Wisdom (Bernice Cohen, 1999)
• "Blaming speculators as a response to financial crisis goes back at least to the Greeks. It's almost always the wrong response."
  Lawrence H. Summers (1954–), US economist and former president of Harvard University
  On the financial crisis in South-East Asia.
  Source: Remark (1997)
• "There is no evidence that the business cycle has been repealed."
  Alan Greenspan (1926–), US economist, former chairman of Federal Reserve
  Source: Wall Street Journal (1997)
• "In a market like this, every story is a positive one. Any news is good news. It's pretty much taken for granted now that the market is going to go up."
  Anonymous
  The market began to decline that day, plummeted nearly 1,000 points in October, and did not regain its August peak for nearly two years
  Source: Wall Street Journal (August 26, 1987)
• "In the next economic downturn there will be an outbreak of bitterness and contempt for the supercorporate chieftains who pay themselves millions. In every major economic downturn in US history the villains have been the heroes during the preceding boom."
  Peter F. Drucker (1909–2005), US management consultant and academic
  Source: Quoted in “Seeing Things As They Really Are,” Forbes (Robert Lenzner and Stephen S. Johnson, 1987)
• "A depression is a situation of self-fulfilling pessimism."
  Joan Robinson (1903–1983), British economist
•  Source: “The Short Period,” Economic Heresies (1970)

Boom and Bust Quotes - QFINANCE


 LINK: http://www.qfinance.com/finance-and-business-quotes/boom-and-bust

Levered Free Cash Flow

Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: market cap, outstanding debt, and preferred shares. When companies have ratios of levered free cash flow/enterprise value in excess of 10%, it may indicate that the company as a whole is being undervalued.





 LINK:http://seekingalpha.com/article/768211-3-highly-shorted-basic-materials-stocks-undervalued-by-levered-free-cash-flows

3 Highly Shorted Basic Materials Stocks Undervalued By Levered Free Cash Flows - Seeking Alpha

Real Estate "Bubble" : as Characteristic of Markets

Reality cannot be ignored except at a price; and the longer the ignorance is persisted in, the higher and the more terrible becomes the price that must be paid.
-Aldous Huxley, English writer (1804 - 1963)

bubble

Definition

A description of rapidly rising equity prices, usually in a particular sector, that some investors feel is unfounded. The term is used because, like a bubble, the prices will reach a point at which they pop and collapse violently.

Read more: http://www.investorwords.com/595/bubble.html#ixzz22L7gVEF4

 

Definition

A stock market phenomenon which occurs when the stocks in a particular sector are inflated out of proportion to their intrinsic value in response to exaggeratedly high expectations of resale value. The bubble is said to burst when stock prices suddenly go into a decline which is then compounded by panic selling of shares. Also called speculative bubble, price bubble, economic bubble.

Read more: http://www.investorwords.com/15556/market_bubble.html#ixzz22L88JJOH

 

Famous Bubbles:

Dutch tulip bulb market bubble

Definition

An actual market bubble that took place in Holland during the 1600's when tulip bulbs were traded as commodities due to the high value placed on them by the elite. Extreme demand led to price acceleration that eventually led to a severe market crash which destroyed many fortunes.

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housing bubble

Definition

A considerable rise in the price of houses produced in part by the belief that the prices will keep increasing.

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It's Hard to Look Outside a Bubble When You are Stuck Inside It

by Tom Murcko

 

When you're inside a bubble, it's difficult to realize the bubble exists. In 1989 the Japanese stock market had a higher market cap than all the other stock markets in the world, combined. The Emperor's Palace in downtown Japan was assessed to be worth more than all the real estate in California. When times are great, it's most tempting, but most dangerous, to extrapolate forward and think the good times will last forever.

Read more: http://www.investorwords.com/tips/1159/its-hard-to-look-outside-a-bubble-when-you-are-stuck-inside-it.html#ixzz22L9tEBgN

Peter F. Drucker had seen it all before:

After the big stock market decline of October 1987, Drucker said he had expected it, "and not for economic reasons, but for aesthetic and moral reasons."

 "The last two years were just too disgusting a spectacle," Drucker said. "Pigs gorging themselves at the trough are always a disgusting spectacle, and you know it won't last long."
Drucker termed Wall Street brokers "a totally non-productive crowd which is out for a lot of easy money."

"When you reach the point where the traders make more money than investors, you know it's not going to last," he said.

"The average duration of a soap bubble is known. It's about 26 seconds," Drucker said. "Then the surface tension becomes too great and it begins to burst.

"For speculative crazes, it's about 18 months."

LINK: http://seattletimes.nwsource.com/html/businesstechnology/2002619202_webdrucker11.html 

About Peter Drucker:
Place of birth: Vienna.
Education: LL.D. in international law from Frankfurt University.
Famous quotes:

"Nothing is less productive than to make more efficient what should not be done at all."

"Because knowledge deteriorates rapidly unless it is used constantly, maintaining within an organization an activity that is used only intermittently guarantees incompetence."

What is compound interest? definition and meaning

  compound interest

Definition

Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. Compound interest differs from simple interest in that simple interest is calculated solely as a percentage of the principal sum.

The equation for compound interest is: P = C(1+ r/n)^nt

Where:
    P = future value
    C = initial deposit
    r = interest rate (expressed as a fraction: eg. 0.06 for 6%)
    n = # of times per year interest is compounded
    t = number of years invested

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What is compound interest? definition and meaning

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Term of the Day

operating income before depreciation and amortization

OIBDA. A financial measure similar to EBITDA, except that it uses Net Operating Income as opposed to net income. It is calculated by adding interest, taxes, depreciation and amortization (also known as ITDA) to the company's operating income. OIBDA is used by companies more frequently, although it is still a non-GAAP measure. Some companies prefer to use OIBDA because it doesn't consider non-operating income, and therefore tends to give a better indication of income from regular operations.





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Quotes

"It takes twenty years to build a reputation and five minutes to ruin it." -Warren Buffett


“Rule #1: Never Lose Money; Rule #2: Never forget Rule #1.” 
-Warren Buffett



"An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative." -Ben Graham



“Be fearful when others are greedy, and greedy when others are fearful.” -Warren Buffett


“The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.” -Warren Buffett



"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." - Charlie Munger



"Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world." - Charlie Munger



"We don't have to be smarter than the rest. We have to be more disciplined than the rest." -Warren Buffett



"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely." - Warren Buffett



“It was never my thinking that made the big money. It was always my sitting. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.” -Jesse Livermore



Either: "In the short run, the market is a voting machine, but in the long run it is a weighing machine." or "the market is not a weighing machine ... Rather should we say that the market is a voting machine ... product partly of reason and partly of emotion." - Ben Graham



“He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has.” -Epictetus