Wednesday Aug 23, 2006

The fine art of investing

Taipan Group's Dynamic Market Alert

-- The fine art of investing
-- This NYSE-listed company operates the largest railroad in the Pearl River Delta…

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The CEO of This $4.75 Natural Beverage Company Is Very Excited...

He believes that after 15 years of hard work, his company will be an “overnight” success, just like competitor Hansen Natural Corporation -- a stock that has returned 34,000% over the past 10 years.

The CEO of this $4.75 stock believes that his company is about to follow in Hansen’s footsteps. And it has the ball rolling on a multimillion-dollar deal to get shelf space at Whole Foods (WFMI)... The announcement is expected on September 26.
Click here for your free report!

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The fine art of investing

by J. Christoph Amberger

My kids have a saying: With eBay and Amazon.com, every day can be Christmas -- Daddy’s Christmas. If you’re a compulsive collector, you know what I mean.

On Monday, I again added to my ever-growing collection of historical fencing and dueling paraphernalia. After some dramatic last-minute upping of antes on the German eBay site, I walked away with an Austrian oil painting ascribed vaguely to “an 18th-century provincial successor to Karl Aigen.”

It’s a beaut, I tell you: A rural scene with a little cottage, from which a man with a rifle bursts to break up an ambush of a half-dozen peaceful travelers who, sword-in-hand and rucksack-on-back, defend themselves against sword-wielding assassins. One of the men has already met his Maker, and is being relieved of his coat by an assailant.

No one except a complete idiot would want to hang this painting in his living room.

That idiot will be me.

Just imagine the look of happy surprise that the best wife of ‘em all will exhibit at yet another piece of her husband’s good eye for fine art. I can’t wait until the package arrives in the mail...

-- According to a recent article in the Wall Street Journal, I’m in great company. If you trust the editors, buying art as an investment is what the cool kids are doing right now.

And why not? With sideways price curves in stocks, oil and gold, who wouldn’t want to pay 10% commission to the broker who sells them a numbered Dali print, or the bipolar paint smudges left on canvas by a yet undiscovered but up-and-coming 30-year-old Starbucks barista living in a Greenwich Village efficiency? He also smokes, and thus has a lower life expectancy from the get go. Just wait until his alcoholism knocks out his liver, and you’re in for a shot at a breakaway investment.

The last time people went out to sell art as investments was around 1995. I remember a then high-profile newsletter editor advising his readers to invest in art as a tax write-off. The recipe was mind-bogglingly simple: Buy a piece of art, have it appraised at a higher value than you bought it at, then donate it to a museum or art gallery and write off the donation on your taxes.

Inquisitive minds want to know. Accordingly, I was on the phone with the IRS before I had finished reading the article. The IRS information officer almost fainted laughing at the very idea. As I dug deeper into the matter, I found out two things: Finding a reputable tax advisor who would let you get away with this kind of shenanigans might actually be easier than finding a museum to accept your kitsch as a donation.

(I noticed that the particular editor who made the recommendation -- who shall remained unnamed -- is now writing the weekly educational e-letter of a dear competitor...)

In my book, buying art for investment purposes still is a sucker’s game. It enjoys cyclical popularity, however. I consider it a surefire sign of too many gullible fools having too much cash on their hands... and a happy byproduct of an imminent stock market boom.

-- Some of the biggest and most thoroughly publicized IPOs in the last couple of years were Made in China. This is part of China’s ongoing strategy of diversifying internationally. But it was also due to the fact that Chinese companies were kept from going public on mainland Chinese markets: A nationwide stock reform had suspended IPOs on mainland market for nearly one year from the first half of 2005.

That artificial hiatus has now come to an end. Chinese companies trading in Shanghai and other markets are now again able to raise capital on the Chinese equity markets. And both institutional and private investors can’t wait to get their hands on a piece of the action.

For international investors, this is creating a great short-term opportunity for IPO-style short-term gains on long-term growth stocks.

There’s one particular stock that trades on the NYSE that is set to receive a huge boost after it goes public on the Shanghai stock exchange -- and that could be any day now. Once this undervalued stalwart begins trading in Shanghai, there is a very high probability that the buying frenzy in China will drive up the shares currently trading on the NYSE.

The company’s ADR shares could surge 10%, 15%, 25% or higher from its IPO “pop” in Shanghai, handsomely rewarding American investors who buy in now.

The Shanghai exchange is seeing record-breaking volume. Overnight, China has become the world’s second-largest IPO market after raising over $24 billion in 2005. With a strong start in 2006, IPOs are expected to rake in a record $30 billion this year.

The IPO frenzy is attributed to China’s 400 million newly minted middle-class citizens who covet a piece of the world’s fastest-growing economy. They gobble up IPOs faster than companies can issue them.

This NYSE-listed company operates the largest railroad in the Pearl River Delta… and is widely considered the most modern railroad in the country.  It’s a distinction that adds tangible value to the stock -- and to the upcoming Shanghai IPO.

The company’s $1.2 billion IPO in Shanghai will distribute “A” shares reserved to mainlanders and well-connected foreign institutional investors.

The proceeds will be go toward ambitious expansion plans to cope with China’s vast rail requirements -- including a bullet train that will cut travel time from Beijing to Guangzhou from 23 hours to just 10 hours.

I am 100% certain that when the stock starts trading in Shanghai, you will see a “halo” effect in New York that will kick up the shares almost immediately. 

That’s why I picked this company as Taipan’s No. 1 New Recommendation in our September 2006 issue. Taipan members received their detailed instructions earlier this week. But even at current levels, I think the stock is worth every penny of its price based just on growth projections... not counting the IPO halo “ump” we could see in the next couple of weeks.

I think this is a stock you need to consider either as part of your strategic portfolio... and as a vehicle for short-term price surges. That’s why I’ve priced a special report on this company at only $4.95. With the Shanghai IPO just around the corner, I wanted to remove every conceivable obstacle for you to cash in on this exceptional opportunity.

Taipan quantities of this report are limited, and at $4.95 they will go very fast.

So click here to get your Taipan Group Special Report.

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Earnings Announcements for Thursday, August 25, 2006

Ansoft Corporation, Bon-Ton Stores, Gerber Scientific, Hormel Foods Corporation, McDATA Corporation, Patterson Dental, and Williams-Sonoma are releasing earnings.

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Unlock Dates for September 2006

9/4/06 – Alexza Pharmaceuticals is unlocking 5.5 million shares.
9/5/06 – Eagle Test Systems is unlocking 6.5 million shares.
9/11/06 – TransDigm Group Inc is unlocking 10.9 million shares.
9/20/06 – Clayton Holdings Inc is unlocking 7.5 million shares.
9/20/06 – Tim Hortons Inc is unlocking 29 million shares. 
9/27/06 – Himax Technologies is unlocking 52 million shares.

Keep an eye on Tim Hortons Inc. and Himax Technologies for significant sell-offs.  You may want to short shares or buy puts on these two positions.

Brought to you by Extreme Volatility Speculator.

Upgrades and Downgrades

Applied Signal downgraded by CE Unterburg Towbin from Buy to Market Perform.

Campbell Soup downgraded by Prudential from Neutral to Underweight.

Dress Barn downgraded by Merriman Curhan Ford from Buy to Neutral.

Monster Worldwide downgraded by Wachovia from Outperform to Market Perform.

Mills Corporation upgraded by Banc of America from Sell to Neutral.

SeaChange upgraded by Ferris Baker Watts from Neutral to Buy.

Brought to you by GRESSOR.com
 

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TAIPAN TIDINGS

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Quote of the Day

“The Republicans seem to have run out of ideas, while the opposition isn’t offering any alternatives. So the slogan for Election 2006 is...’Vote Democrat: They have different no ideas.’”

- Scott Stantis, “Prickly City,” August 18, 2006

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