One Step Ahead

[Bo14172]

Weekend thoughts...

And a rainy weekend at that. I love being on the water whether it be on a boat, waverunner or slalom ski. So far mother nature hasn't let me or my 2 kiddos (teen and pre-teen) take a trip to the lake or rivers hardly at all this year..grrr.
Here's hoping for sunny Sunday. : )

Anyway I just want to comment a bit on the London investment company (LIC) and UCAD, then take the discussion from there.

I'll preface again by saying that even though I comment on UCAD and the LIC, right now there is only an indirect effect on CMKX.
Our value is driven by the valuation and activity of CMKX itself.

The LIC seems to be putting itself in alignment with the business model of a US company many are familiar with, that being Berkshire Hathaway. Now...rest easy...I am not saying the LIC is in anyway an equivalent of BH, or investing with the same goals in mind. Buffet goes for the safest of the safe in his view and nothing else..lol He holds a stock for LIFE. Mr. Buffet and BH is in a class all it's own and I have studied and respected his way of doing business for a long time. In a nutshell BH has 2 classifications of stock the public can invest in. BH in itself is a company made up investments and subsidiaries, with Mr. Buffet having varied levels of control in each. Here is the list of 40 companies Mr. Buffet has invested in, or aquired controlling interest. It is these companies which are the basis of valuation for BH stock.

http://www.psarasratio.com/buffett.asp

OK, with that said, the LIC is planning on hitting the ground running with a business model with some of the same characteristics of BH. Of course, they are not influencial enough to assume operational control of companies such as BH does. Nor do they invest in companies with fundemetals that BH seeks. They invest in emerging US companies.

Why would they do this? What are 2 of the keys the see?

IMHO, they see potential for each company to make an impact. They see legitimacy in each company. Buffet has many nuggets of wisdom he uses in his investment decisions. Here is one:

- "Intrinsic value: present value of future cash that can be taken out of the business." -

So the first key is that the LIC invests in companies that show legitimacy and REAL potential. Microsoft, EBAY, Walmart and BHP were all emerging companies at one point. No, Mr. Buffet wouldn't have considered them, but those who did, made a hell of a lot of money. The same emerging opportunities exist TODAY.

The second key the LIC has to see and draw conclusions is the naked short selling and fair trading issues resolving favorably in the near future. I described in a previous post that "there is an elephant in the living room." Many legitimate companies have gotten squashed by such detrimental manipulation for years. The groundswell of investors has been witness to this far too long now. The LIC sees the writing on the wall, and through an exclusive such as Dateline, lawsuits and punitive action will likley follow. Most important would be the elimination of such trading practices at the time following such a story.

Fair trading would allow emerging companies the sustained pps growth they need without resorting to dilution to fund their operations. This in turn builds shareholder confidence, and opens up other financing opportunities.

In a nutshell, the second key I mention is something I believe they considered, and feel the climate is NOW very favorable for change!

UCAD happens to be one of those companies with a bright future.
What if UCAD had all of the claims owned by CMKX? Imagine the share price movement of UCAD, and the windfall for CMKX shareholders for the cash received for their shares. Imagine such a deal in a climate with no naked short selling or illegal trading practices?

Yes, my last paragraph was thinking out of the box. Wet weekends will do that to a guy. : )

Be well, Bo