I recently saw that Georgia Tech was offering a graduate degree in computer science for $6,600... And you can get the degree online.
There's going to be a lot more competition in the for-profit space. But my bet is that public, not-for-profit schools simply will not have the wherewithal to beat out the for-profit firms. They don't have the marketing know-how or the desire to design a curriculum that is attractive and responsive to the market's demands.
This is a minority view, but... I think government efforts to measure the value of these degrees will turn out to be a tremendous advantage for for-profit educators. Georgia Tech might have a great reputation in certain engineering circles. But I would wager that if you took that course, you would find it less useful in the job market than you expected.
It's worrisome for the for-profit sector that students can get an "elite" public education online. That is a significant risk. But remember... only a small number of people who are using for-profit education services could get accepted into that Georgia Tech program... So I think not-for-profit universities' online programs are a bigger risk to other public education institutions. In other words, why go to Georgia Tech when you can go to Georgia Tech online?
But what about everybody who is just interested in vocational training? What about all the people who just want a certificate that says they have passed a nursing curriculum... know how to design web pages... or can clean your teeth? What about the folks who are just interested in training that leads directly to employment? That's what I believe the online education space is best at. And public universities won't be able to compete effectively with them for that kind of business.
Ben Bernanke saw his shadow yesterday...
The market expected him to start tapering the Federal Reserve's $85 billion in monthly bond purchases. But the Fed chairman announced yesterday he would continue easing...
We're not surprised. A central banker's job is to print money. He causes inflation... He blows up bubbles.
When those bubbles pop, they print more money... It's a vicious cycle.
It's like Groundhog Day... Bernanke takes the podium. He's scared by what's happening in the economy, so he prints more money and scurries home. Only instead of a longer winter... we'll see already artificially high asset prices march higher.
Bernanke also wanted to stress that easing could continue longer than the markets expect...
"There is no fixed calendar schedule. I really have to emphasize that," he announced. "If the data confirm our basic outlook, if we gain more confidence in that outlook ... then we could move later this year."
For now, we'll enjoy more of the Bernanke Asset Bubble. Bernanke's latest action certainly supports Steve Sjuggerud's thesis that the biggest gains are yet to come...
But the question remains, what happens when the Fed tries to sell the bonds it's been buying? We know it can and will buy unlimited amounts of bonds. One thing is certain: When the Fed actually does start tapering, we'll see massive volatility in the market. And we'll see interest rates spike much, much higher. Remember, just the hint of tapering nearly doubled the yield on the 10-year Treasury notes.
We hope you enjoyed all the green (positive) numbers in your brokerage accounts yesterday...
The S&P 500 opened today at an all-time high – now trading near 1,730. The yield on the 10-year Treasury fell 15 basis points (0.15%) to 2.7%. The dollar got crushed. (The euro is at $1.355 today, the highest level versus the dollar since February.)
But the biggest move happened in the gold markets...
With Bernanke promising to print still more money, one would expect the value of "real money" – gold – to soar... And in fact, the precious metal jumped from $1,300 an ounce yesterday to $1,361 today.
Anyone following Jeff Clark's advice made a fortune.
As we outlined in yesterday's Digest, Jeff has been long gold stocks... He was, in part, speculating on the Federal Reserve's announcement – guessing we'd see a gold-stock rally following Bernanke's speech.
And he nailed it...
When people worry about the strength of the dollar, they buy gold. And Bernanke's announcement clearly terrified some people.
Gold jumped nearly 5%. But gold stocks ripped even higher...
The Market Vectors Gold Miners Fund (GDX), a basket of mining stocks, jumped more than 10% yesterday.
Jeff recommended his S&A Short Report readers buy calls on GDX on Tuesday. As of yesterday's close... after just one day... the position was up 128%. The option's price pulled back some this morning. Jeff recommended closing the position, and subscribers following his recommendation made 100% (at least) on the trade.
A classic stock market story is playing out with video-game maker Take-Two Interactive...
It released the latest version of its flagship Grand Theft Auto video game franchise on Tuesday. The fifth edition got great reviews before the release... And folks expect this game to be a huge financial success (generating about $1 billion in sales).
The investing herd saw this news and bought Take-Two shares... expecting to share in the profits.
But the stock is down $2 a share over the past few weeks, from $19 to $17.
The right time to buy Take-Two was in mid-2012... when everyone hated the stock and it traded for $8 a share. Long product delays and extended stretches between new "blockbuster" releases caused revenues to fall and led many investors to write off Take-Two as a big screw-up.
Since then, anticipation of the new Grand Theft Auto has pushed shares up more than 100%. And now that the huge blockbuster is here, the stock slides. A classic example of why you have to get in far before the rosy news comes out.
Grand Theft Auto V cost more than $260 million to develop, according to financial news network CNBC... That makes it the most expensive game in history and puts it in line with some Hollywood blockbuster movies.
The first set of numbers are rolling in... and they're incredible...
The game sold $800 million on its first day. That puts it on pace to blow away the biggest video-game launch. Military game Call of Duty: Black Ops 2 sold $1 billion in its first 15 days.
In last Wednesday's Digest, Porter told you about The Atlas 400... a private-wealth club he founded over four years ago with a group of his closest friends – Bill Bonner, Doug Casey, Rick Rule, etc.
Whenever we write about Atlas 400, our feedback inbox always fills with complaints and conspiracy theories... accusations that it's some kind of multilevel scheme.
We didn't start this club to make our readers angry. We simply started this club because we recognize how important relationships are in achieving your goals... As Porter wrote on Wednesday:
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Despite our best efforts to explain the ideas behind our club (which simply come down to hosting top-notch events around the world that will bring together like-minded, successful people), we still received our normal hate mail...
However, this time, we also received several notes saying you enjoy our stories from the club. You enjoy hearing what we're up to and who is traveling with us... even if you don't have the means to join our group. It was even an inspiration for some – saying they hope to join once they reach a better position in life. We're publishing a couple (below) in today's mailbag.
Porter and I (Sean Goldsmith) are off to Tuscany with the Atlas 400 next month... 18 of us are going in total.
We're visiting some of the great makers of the region's Brunello wines, driving Ferraris through the countryside, picking fresh saffron, and even hunting white truffles. (It's done with dogs nowadays, not pigs).
I look forward to updating you on our adventures when we return.
In the meantime, I'll tell you a bit about the trip the club just enjoyed to Scotland...
It's the home to Scotch whisky – obviously, just called "whisky" in Scotland. It has some of the best hunting and fishing in the world. I'm not a golfer, but the guys on the trip said the courses were the best they've ever played.
And I love the people... I likened Scots to Southerners – down-to-earth and polite, and generally much more accepting than their English counterparts.
Plus, if you like haggis, Scotland is your place. If you've never had haggis – the national dish consisting of sheep innards – try it. It's a pudding/stew texture... You mix it with "neeps and tatties" – turnips and potatoes.
And if you have the opportunity, have a Scot present your haggis while reading the Robert Burns poem, Address to a Haggis. And don't let the dagger scare you...
But the most important thing I learned in Scotland is how to drink scotch.
In the States, we're taught to enjoy scotch... To swirl it, sniff it, and sip it – like fine wine.
It's a different game in Scotland. The whisky goes down in a gulp. Though we were blessed with gorgeous weather, it's often dark and drizzly. A belt of whisky helps you brave the elements.
And if you're in the mood to savor your "dram"... you first take a sniff and small taste. Then, you add water. Our whisky expert recommended a one-to-one ratio. I prefer less water. It changes the flavor and the nose, opening everything up. And it makes the whisky go down a little smoother.
The host for our whisky tasting – one of the country's top experts (seriously) – was hesitant to share his "favorite" whisky. He didn't want to skew our tastes, he said. In reality, he was playing politician.
I finally got some information when I asked what he drinks for his everyday whisky... You may be surprised. It's not a "single malt" – whiskys made from barley from the same producer, which are generally considered the best quality. His go-to drink is Johnnie Walker Black.
I prefer scotches from the Islay region – noted for their peaty, smoky flavor. It smells like a campfire. But I've started drinking more Johnnie Walker Black. And it's a good, affordable everyday drink.
My favorite experience in Scotland was hunting grouse.
A grouse hunt is the most exclusive bird shoot in the world. Most birds nowadays are farmed and stocked. Grouse are wild.
I was told we would do "driven grouse." I figured that meant we'd have cars drive us to certain hunting locations. Not so...
The logistics for a grouse shoot are incredible. We had an envoy of Land Rovers to escort the 12 of us. In total, 70 people were taking care of our group.
Why the huge number?
When hunting grouse, the shooters jump down into a bunker with their "loader" – a person who loads your gun.
While you're getting set, approximately 40 other people form a human fence in the form of a square. These are the "beaters." Initially, the beaters "fence off" an area that's probably a square mile. Then, they slowly walk toward the shooters – and in from the sides – waving white flags.
They're driving the birds toward you...
For this reason, grouse hunting is also the most dangerous shoot you can go on. (To avoid firing on your hosts, you're instructed to stop firing at the sound of a horn.)
We covered several different hunting grounds during the day... and enjoyed homemade sloe gin between shoots to keep us warm.
The scenery was beautiful. We were staring out into giant, grassy hills... When you roam around the grounds, the ground cover feels like you're walking on a giant sponge.
Oh, and there are the guides in their hunting tweeds – I'm sure they were doing a great job of trash talking, though we couldn't understand half of what they said.
Here's a picture of your editor with one of our Atlas member liaisons.
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In short, if given the opportunity to visit Scotland, please do. I can't wait for my next visit. Unfortunately, I'm not sure when the club will return. We've got a full docket...
In addition to the Tuscany trip I mentioned, we're taking a big group to the Patagonia region of Chile and Argentina next February. Both trips are full. (Our events are booking quickly these days.)
But if you'd like to join us on an excursion, you have plenty of opportunities...
We've secured exclusive use of one of the country's greatest hunting lodges, Cabin Bluff in Georgia, from January 23 to 26, 2014.
We hosted our first event there last year, and it was a huge success... The staff is wonderful. The food is excellent. And because we have use of the entire 24,000-acre compound, we can do whatever we want... hunt quail and pigs, play golf, fish...
It's an ideal setting to meet and mingle with fellow club members.
We're also arranging a trip to the Bordeaux region next fall... A friend of mine has strong ties at the legendary Petrus wine estate and is helping to put together a totally "off limits" trip.
And always, we'll hold our annual meeting next May in New York City.
If you'd like to learn more of what Atlas is all about, you can apply here... Please note, the club is expensive to join ($25,000). And we only accept a small percentage of our applicants. Still, we'd love to hear from you.
New 52-week highs (as of 9/18/13): Automatic Data Processing (ADP), American Financial Group (AFG), ProShares Ultra Biotechnology Fund (BIB), Anheuser-Busch InBev (BUD), Blackstone Group (BX), Chicago Bridge & Iron (CBI), Chesapeake Energy (CHK), Dominion Resources (D), Emerson Electric (EMR), EnerSys (ENS), Ericsson (ERIC), iShares Germany Fund (EWG), Expeditors International (EXPD), SPDR Euro Stoxx 50 Fund (FEZ), Fluidigm (FLDM), Fidelity Select Medical Equipment & Systems Fund (FSMEX), iShares Biotechnology Fund (IBB), KLA-Tencor (KLAC), Longleaf Partners Fund (LLPFX), Laredo Petroleum (LPI), 3M (MMM), National Fuel Gas Co. (NFG), Oneok (OKE), Powershares Buyback Achievers Fund (PKW), Qlik Technologies (QLIK), ProShares Ultra Technology Fund (ROM), RPM International (RPM), ProShares Ultra Health Care Fund (RXL), Sequoia Fund (SEQUX), ProShares Ultra S&P 500 Fund (SSO), Steel Dynamics (STLD), Constellation Brands (STZ), Cambria Shareholder Yield (SYLD), Triangle Petroleum (TPLM), Targa Resources (TRGP), and Walgreens (WAG).
Some of you, it seems, recognized how absurd yesterday's feedback about Microsoft was... Plus, we hear from some fans of the Atlas 400. All in all, a good mailbag day. Send your notes to feedback@stansberryresearch.com.
"Re John Cochran's whining. Where do I start? Apparently, John is not an investor but a gambler. He doesn't want a solid return over a long period. Noooo, only hot tips on longshot 10 baggers, please!
"And he doesn't understand why he is always getting fleeced by Mr. Market. He is clueless as to how the market works and apparently wants to stay that way. His remark about 'expensive' stocks shows that he should spend his valuable time in the pink sheets.
"Cochran will be much more engaged if he could spend more time at a casino getting 'free' drinks. He needs only the portfolio summary from you. Or better yet, just cut him loose. You are both wasting your time in this relationship. As for me, keep it coming. I want to keep learning. Just sayin'." – Paid-up subscriber Long Arm Ben
"Dear Mr. Cochran: I was fascinated by your comment in yesterday's S&A Digest. I have been an institutional equity sales and trading professional for over 30 years. During that time, I have seen and read a multitude of 'sell side' research. None of it can hold a candle to what you receive from Porter Stansberry and his team of professionals. Solid, well researched, actionable stock ideas that have a proven track record of success.
"Believe me, they have your best interest at heart. The ideas and principles of investing that they show you are those that have been time tested.
"Example: In 1980, 33 years ago, Mr. Stewart Horesji bought 40 shares of Berkshire Hathaway for $265.00 each. He continued to add to his holdings over the years and eventually ended up with 5,300 class A shares. You do the math. Check BRK.A stock price. How much is the value of his position today?
"Making money in the stock market is hard, patience-testing work. Success does not come easily or quickly. This is what Porter and his team are trying to impart on you. If you want the thrill of buying a penny stock and watching it go to $5.00 in a couple of weeks, then I would suggest you forget about investing in the stock market and go to Las Vegas instead. Lots of thrills there!" – Paid-up subscriber Steve Previs
"I have experienced some of the activities that the Atlas 400 Club is organizing. Your group is unique in that the added benefit is that you participate with 'likeminded' individuals who come together to share the activity and also, maybe more importantly, share investment ideas. No downside in my opinion.
"I am sure that the subscribers who denigrate the 'Club' look at it as a waste of time and money, however one cannot put a price on spending time with motivated, successful people who can advise and encourage participation in new endeavors. As a doctor I don't have as much latitude in the 'free time' department, so I enjoy your reports about the various events you organize. Once I retire maybe I will apply for membership." – Paid-up subscriber Dennis Pipher
"It is quite alarming to me that any of your subscribers have an issue (other than a bit of envy) with the Atlas 400. Perhaps it relates to society's current tendency to consider success and wealth as evil and self-serving. That is a very contradictory mindset for any subscriber in that they subscribe in order to enhance their wealth.
"I do want to congratulate you as well as your membership. You have set an example and reaffirmed the American dream. Moreover, you represent concern for those of us who are endeavoring to accomplish financial independence and I have never heard any hint of vanity or superiority from you.
"To the contrary, you seem committed to helping anyone in any financial state improve their capabilities. This is affirmed by the very nominal cost of your personal investment letter, Stansberry's Investment Advisory. To you readers, especially you critics, understand that Porter's social network benefits us as well." – Paid-up subscriber Stever J.
Regards,
Sean Goldsmith
Miami Beach, Florida
September 19, 2013