Will we have more sunny Sky?

Suntech Power Holdings Co., Ltd. (STP) is a leading solar energy company in the world as measured by both production output and capacity of solar cells and modules and one of the top-ranked companies in the building-integrated photovoltaic (BIPV)

The stock is trading at a discount because some how the American investors are obsessed with oil. However, the future of the oil is limited. For most commodities, when the supply drops, the price raise. It is true too for oil in a short term. For long term, one must look at the entire energy spectrum. Oil is mostly used as energy. The other energy resources exist thus the oil will actually become less valuable when it gets scares.

The FatCat has recommended a solar energy company in the US whose market is mostly in Europe. Suntech Power Holdings Co., Ltd. (STP) is Asia oriented. Its production and market is mostly in Japan and China.

Bottom line: FatCat adds Suntech Power Holdings Co., Ltd. (STP) to her portfolio.

Are you my sunshine?

FatCat loves the energy sector. Everything needs energy. Unless you are a tree, you have to get your energy somewhere. The problem with investing in energy sector is the volatility link to politics of foreign countries. Is the oil price going up or going down? A couple of years ago, oil price were less than $30/barel and everybody was complaining how expensive it is. Now it is over 50, the same people are saying oil price is low! FatCat smells fish in the oil! Stay away from Oil! What are the other options for energy? The sun, wind and nuclear are the obvious choices.

Solar energy is now considered a mature product. The benefit of solar power is that it fits very well into American individualism. Put solar energy on the roof and stop relying on foreign oil. Now that is patriotism!

Specifically, why Evergreen Solar (ESLR)?

1. viable product already in the market that out performs the industry
2. Still trading at a good discount
3. Excellent R&D and next generation product that will sustain growth
4. The best of all: FatCat likes the new management.

Bottom line: FatCat buys Evergreen Solar (ESLR)

Theragenics (TGX)

The speculation of small Health sector stocks is always fun. You never know what is going to happen next. The FatCat does not give health sector any special treatment. When she looks at a company as a potential target; FatCat asks:

1. Is this an affordable needed Product on the market? Product is on the Market. Compare to radiation and surgery, seed implant is less expensive and lower risk of incontinence and impotence.
2. Positive feedback from the physicians, insurance companies and patients? Product is covered by medicare and major insurance providers. It seems to be well liked by patients but FatCat has not talked to enough physicians to get there opinion.
3. Does the company have a positive cash flow?
   
   With all three questions answers “YES”, FatCat takes closer look at the company, its management, employees, R&D, and distribution channels. It is kind of simple.
   
   Bottom line: FatCat bought TGX.

Is Marvel the New Disney?

Marvel Entertainment, Inc. (MVL) has so many characters FatCat have lost track. Recent years, even a non-comic fan, FatCat cannot escape from knowing so many trivial about Spider-Man, X-Men, Hulk, Blade, Daredevil, the Punisher, the Fantastic Four, and more. Even her catnip comes packaged in X-men varieties.

Entertainment business is not like other. The customer’s taste can change in a whim. Marvel seems to have captured a generation with its superhero in action figures, toys, comics and movies. This is more significant because the teens actually have true purchasing power.

FatCat thinks Marvel will out perform S&P because:

1. Strong presence of characters in Movies, many with sequels. With the shortage of creativity in Hollywood, adapt an existing super hero means lower risk. Thus the success of Spiderman and X-men.
2. More focused, more influncial group of characters--Imagine Disney as "mouse anf friends" without boring news on "ABC".
3. No obvious competition. At least right now. And the balance sheets look good.

Conclusion: FatCat would like to buy all Marvel that is available.

Is This Apple (AAPL) Going To Rot?

Apple (AAPL) has been the BMW for the couch potato geeks. Maybe you run with your ipod but most of Apple’s money come from those who never left the house, or chair. There is a long list of great things about Apple (AAPL). However, has all the great things part of the price already?

FatCat believes it is very unlikely, although not completely impossible. Apple will not maintain its current growing momentum. That is not to say you should drop apple as if it is rotten to the core. FatCat point out if you intent to beat the market, you must own stock that is certain to beat the market not the stocks that might beat the market.

Technology stocks can be an emotional decision. Let's face it, most of us who own apple computer or apple stock like the cool feeling of technology. However, numbers do not lie.

Drop the apple (AAPL) is a painful decision but the correct decision.

Best Thing About Vanguard Global Equity (VHGEX )

There is a simple way to categorize the cats in investment philosophy. The cats that believe it is possible to beat market average and such fund can be found. The other type does not believe it is possible to beat the market. The cats that do not believe it is possible to beat the market can still do pretty well with index funds but they never get fat.

FatCat loves to beat the market and has great fun doing it too. Before got into diy mutual fund building, she picks the mutual funds for her investment. The one fund she loves most is Vanguard Global Equity (VHGEX ).

1. It has consistently beaten the market in last 3, 5 10 and more years. FatCat thinks it is likely this baby will continue to grow.
2. It has morning star 5-star rating anyway you look.
3. It is Forbes Best Buy, over and over again.
4. It is no load fund and comes with Vanguard low expense ratio.

The best of all character is the long list of fund managers it has. FatCat know very well that the only way to predict the future performance base on past is to have consistent fund management. When a mutual fund changes fund manager, it is going to change. Some will change for better. The benefit of long list of fund manager is to ensure the consistency of the fund. So When Peter Lynch 2nd retires, or hit by a taxi, the fund will remain the same.
FatCat loves Vanguard Global Equity (VHGEX ).

Walmart Slips away from FatCat's portfolio

FatCat has great respect towards Wal-Mart (WMT). It is without doubt, capitalism at its finest. The company is very efficiently managed. The inventory is always moving. The cash flow is good. The cost on wage is reduced to absolute minimum. It market its self as lowest price and make the profit on the good cash turnover.

However, time has changed. If you compare the stock performance of Wal-mart (WMT) against Costco (COST), BJ (BJ) and Target (TGT) you will notice that Wal-mart (WMT) has been slipping away for at least a year.

The problem? Hubris management thinks they can get away with anything and placed their own ego at top of the priority list.

1. Business plan: Wal-Mart try to promote itself in "fashion" is only the result the management realize the success of Target (TGT). The real problem is Wal-Mart's rapid expansion into China and Europe without proper market research.
2. Employee relations: Wal-Mart's ongoing trouble with union and never ending law suit and countless scandal in the employee relations area is an other giant hairball in FatCat's stomach. The cost of legal battle is only the tip of iceberg how much of poor employee relations has eaten away shareholder's profit. The raising minimu wage and walmart's new gimmick of flexible employee scheduling will undoubtedly make things worse.
3. Customer Satisfaction: if you shop atWal-Mart (WMT) and Target (TGT) and take a look at face of the customers, you will see the customers at Target (TGT) is a lot happier. You can see the same by compare SAM's club against BJ (BJ) and Costco (COST) on the whole sale stores.
   

The conclusion, FatCat drops Wal-Mart from her portfolio.

Start A Real Estate Investment Trust (REIT)

The investment strategy of FatCat is to buy stocks and mutual funds and wait for them to go up. After buying and praying thousands of human decision, FatCat decided it is time to take her own money into her own paws.

It is no accident FatCat starts her first mutual fund with REIT. Like average Americans, FatCat started her investment with a small savings account then a small house which she allows her human companion live there rent free. FatCat also owns mutual fund from her 401(k) and stocks from Employee Stock purchasing program. REIT is simply a combination of investment of real estate and mutual fund.

REIT usually has an average earning of 10%. A good fund appreciates about 8% every year. On the other hand, FatCat' house equity more than doubled in last 5 years and the earning if calculate as the difference between would be rent and actual mortgage payment is more than 15%. That is before tax! So what is the point of invest in REIT when you get more earning and capital appreciation do-it-yourself?

Where to live?

There is always complains about the federal income tax. For starters, there is always too much tax. Unfortunately, unless you decide to move to an other country, there is not much you can do about it.

State and local tax, on the other hand, is a quite different matter.

The biggest portion of state and local tax consists of income tax, property tax and sales tax.

There are seven states have no personal income tax at all: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

There are two states tax dividend and interest income only: New Hampshire and Tennessee

If you do not have the fortune to live in one of the nine states, then consider the combination of sales, property and income tax:

The lowest property tax are from: Arkansas, New Jersey, Alabama, Connecticut, Kentucky. It is obvious that Arkansas, Alabama and Kentucky are the lowest in property tax is because no one wants to live there. New Jersey and Connecticut have attractive property taxes. They are obviously alternative to NYC apartments. One thing be aware is that the property cost is very high in these states and a smaller percentage is still a lots of money.
Fatcat would like to point out New Jersey gas stations are full service only. It is good for the lazy cats but can be annoying for independent cats.

What about Sales tax? Shop on online does not mean no sales tax. States require you report your sales tax if it is not collected by the on line retailer. Most sates have about 5% to 7% sales tax. There are five states do not have sales tax: Alaska, Delaware, New Hampshire, Oregon and Montana. No it is not a typo! Alaska and New Hampshire are the only two states tax neither income or sales. Alaska has further advantage over New Hampshire by not taxing dividend or savings interest. Of course, the disadvantage of Alaska is lack of sunlight in the winter, which is sort of made up by excessive sunlight in the summer. But that is off the topic.

Rage of Minimum Wage

The FatCat is opposing the increasing federal minimum wage to $7/hr. This is outrages. The acceptable minimum wage according to FatCat is $12-$15/hr. Which translates into the yearly income of $20-$30k. This will allow the people on the minimum wage afford to buy a house from FatCat or rent it after she foreclose on them. $7/hr! Can someone tell me how much are you willing to loan to someone making 14k/yr to buy a house?

Assume impossiblly low interest rate of 8% apr and 30 year fixed:

1. Minimum wage $7/hr---> Maximum mortgage $50k
2. Minimum wage $12/hr---> Maximum mortgage $90k
3. Minimum wage $15/hr---> Maximum mortgage $120k

You should realize the minimum wagers are more likely have 10% APR than 8%. Besides, the above calculation does not include the cost of PMI, tax, insurance and allowed 1/3 of income goes to mortgage payment.

FatCat does not apologize that she wants to make more money by selling houses to the minimum wage earner then foreclose on them. She also hates the fact all fees and lawyer costs are fixed regardless the value of the house. Therefore, it is simply more efficient to foreclose on a 120k house than 50k house.

FatCat says: raise the minimum wage to at least $12/hr or we will fire Nancy the pussy!

Happy National Debt Month

1. After we have finished recovering from international hang-over day, we wake up to the reality of National Debt Month. Is it a superstition or statistics that January has the largest bankruptcy during the year? Is it true that January also has the largest foreclosure LP? It is also rumored that January has the highest number of divorce proceedings initiated....... What is wrong with this month? Maybe it should be shorten to 28 days, well, OK, 30 days for starters?
   
   January can be a tough month for many people but not for the FatCat. The FatCat is out and about making money as FatCat's always done.
   
   1. Research of LP can be found on the court clerk's web site. Most of them are free to search but paid services are usually more specific.
   2. The property information can be found at the collector's office. Maybe on line also.
   3. While you are on line, do not forget about find the phone number of the owner so you can call them to make an appointment.
   4. Buy the house and put a for sell by owner sign on the lawn or just have FatCat's cute cat the realtor handle it.
   5. Count the money
   6. repeat from Step 1 above
   
   Now, that is only one of the many secrets how FatCat get fatter all the time. Come back tomorrow, she might tell you why the riches don't pay taxes. FatCat has never paid a penny to IRS since she was born.