Money Matters : Self-made millionaire: Don't put money in your 401(k)

Source: Grant Cardone

Grant Cardone

After graduating from college, Grant Cardone was broke and swimming in $40,000 of student debt, he writes in his new book, "Be Obsessed Or Be Average."

By 30, he'd made his first million. Since then, the 58-year-old has built five companies and a multi-million dollar fortune.

The self-made millionaire refuses to play by anyone else's rules, particularly when it comes to saving money.

"I would never, ever invest money in a 401(k)," Cardone tells CNBC. "Why would I go to work, have my employer give me another $6,000 a year, and then take that money and send it off to Wall Street, where I can't even touch it for 30 years? I wouldn't do that."

The popular retirement plans are "traps that prevent people from ever having enough," Cardone writes on his website. "The 401(k) is merely where you kiss your money away for 40 years hoping it grows up."
Rather than focusing on saving, focus on earning — you can't save your way to
millionaire status, he says.

"Wall Street is telling you to invest little bits, early. They don't believe in your ability to earn money," Cardone tells CNBC. "People need to show the ability to produce more revenue — not invest it — first. People get rich because they produce revenue, not because they make little investments over time."

And don't just focus on earning — focus on earning big, says Cardone. "Keep stacking that paper until you have a hundred grand in the bank. I know this is very unrealistic for a lot of people, but the reason it's unrealistic is because you've been conditioned to think small."

Grant is promoting saving the money you earn, but counter to most advice, he says to put the money in a good old-fashioned savings account — where your money is accessible at a moment's notice — until you have at least $100,000. Then, you can start investing.

"Put your saved money into secured, sacred (untouchable) accounts," he writes on Entrepreneur. "Never use these accounts for anything, not even an emergency. ... To this day, at least twice a year, I am broke because I always invest my surpluses into ventures I cannot access."

It's important to note that the median retirement savings for all families in the U.S. is just $5,000, and the median for families with some savings is $60,000, according to the Economic Policy Institute (EPI). And many families have zero saved. Employer-sponsored retirement plans are meant to help address this and are a good option for many people. But of course, to Grant's point, they won't help you get rich quickly or invest in opportunities today.

He's not the only self-made millionaire to encourage this kind of thinking. After studying wealthy people for more than 25 years, self-made millionaire Steve Siebold found that rich people set their expectations high and aren't afraid to think big.

After all, as he writes in "How Rich People Think," "No one would ever strike it rich and live their dreams without huge expectations."

By Kathleen Elkins

Source : http://www.cnbc.com/2016/10/26/self-made-millionaire-dont-put-money-in-your-401k.html

13 famous logos with hidden messages

Get ready to have your mind blown.

Things aren't always what they seem at first glance, and these logos prove it. Check out these 13 famous logos that you may not have realized actually have a hidden double meaning.

1. FedEx

Source: FedEx

The shipping company's logo is probably one of the best-known in the world of "hidden image" logos. For those who are unaware, take a look between the "E" and the "X," where the negative space forms an arrow. In an interview with Fast Company, the logo's designer, Lindon Leader, said, "The arrow could connote forward direction, speed and precision, and if it remained hidden, there might be an element of surprise, that aha moment." The design has won over 40 awards and was ranked as one of the eight best logos in the last 35 years by Rolling Stonemagazine. 

2. Wendy's

Source: Wendy's

Famously founded by Dave Thomas, the Wendy's brand identity highlights a personal and "home-cooked" feeling. Take a closer look at Wendy's collar and you might just see the word "mom." Wendy's, named after Thomas' daughter, now has more than 6,500 restaurants worldwide. "This is something you may not notice consciously for years, but unconsciously it will leave an imprint on your brain and you will associate it with the brand," stocklogos.com wrote. 

3. Baskin-Robbins

Source: Baskin Robbins

Baskin-Robbins, owned by Dunkin' Brands, is the world's largest chain of ice cream specialty shops, best known for its 31 flavors. The company's pink and blue logo depicts a large "BR" that doubles as the number "31." Carol Austin, VP of marketing for Baskin-Robbins, told CNBC that the logo is "meant to convey the fun and energy of the Baskin-Robbins brand" as well as the iconic 31. "The 31 stands for our belief that our guests should have the opportunity to explore a fun, new ice cream flavor every day of the month," Austin explained. The logo was introduced in 2005 as part of an entire brand refresh.

4. LG

Source: LG

At first glance, the dark pink logo for LG Electronics looks like a winking face. But if you look a little closer, you'll see the face's "nose" is an "L" and the outline of the "face" is a "G." Some fans have even noted a similarity between LG's logo and a modified Pacman.

5. Tostitos

Source: Tostitos

The logo for tortilla chips and dips manufacturer Tostitos, owned byPepsiCo, is a prime example of "once you've seen it, you can't un-see it." Initially, the logo appears to be the Tostitos name in front of a vibrantly colored background. However, the two "T's" of this logo make up people, as they dip a tortilla chip into the bowl of salsa on top of the letter 'I'. 

It's time to buy biotech—here's why: Trader

Traders have hammered biotech stocks, with the IBB, the iShares ETF that tracks the sector, losing 5 percent in the last two sessions. But rather than run from the selling, one trader who relies heavily on the charts is diving in. According to Andrew Keene of Keene on the Market, the IBB had found "support" at its current levels. Looking at both a weekly and a daily chart of the biotech index, Keene noted that the IBB has responded particularly well when it has touched its 50-day moving average. "We saw buyers back in April," said Keene, referring to the 50-day average, which comes into play at around $348. "And we saw buyers in February and December," when the index also touched that key technical level. Keene also said that the IBB hasn't touched its 100-day moving average since last October. With the IBB above both its 50- and hundred-day moving average at $350, Keene's plan is simple. "Buy the pullbacks—any pullbacks whatsoever," said Keene. "This stock, on the daily chart and on the weekly chart, it lines up for buy opportunity." Of course, with the IBB up 14 percent, and 55 percent over the past year, shares of the volatile IBB are not cheap. So Keene is instead looking to the options market as a way to make a cheaper play. But rather than buy options, Keene is looking to take advantage of inflated prices for puts, so he is selling what is called a "bull put spread." In this structure, Keene is looking to sell a put just below where the IBB is trading and then buy an even lower strike put to protect himself in case the IBB tanks. In exchange for selling the puts, Keene is pocketing $350, but in order for him to keep all that money, he needs the IBB to stay above the strike of the put that he sold, or in this case, above $340. With the money collected, Keene says he has found a way to make a high probability bet on a fast moving sector. "I make money if the stock is flat, goes higher, or it can sell off about another $12 and I can still be profitable. Maxwell Meyers Source: http://www.cnbc.com

Analysts' Actions Stocks Ugrade & Down Grade -- Amazon, Capital One, Juniper, Microsoft, Omnicare and More

NEW YORK (TheStreet) -- RATINGS CHANGES

Aerie Pharmaceuticals (AERI) was downgraded at Cantor Fitzgerald to hold from buy. Twelve-month price target is $12. On April 23, Aerie management reported disappointing efficacy results from the first Phase III trial for Rhopressa, the company's lead glaucoma candidate, Cantor Fitzgerald said.

Amazon.com (AMZN - Get Report) was upgraded at J.P. Morgan to overweight from neutral. Twelve-month price target is $535. Analysts are upgrading on accelerating growth, improving profitability and Amazon Web Services valuation, J.P. Morgan said.

Must Read: Warren Buffett's 7 Secrets to Dividend Investing Revealed

AT&T (T) was upgraded to buy at TheStreet Ratings. You can view the full analysis from the report here: T Ratings Report.

BB&T (BBT) was downgraded at Compass Point to neutral from buy. Twelve-month price target is $39. Company is lacking growth and facing net interest margin pressure, Compass Point said.

Best Buy (BBY - Get Report) was downgraded to neutral from overweight at J.P. Morgan. Twelve-month price target is $40. Analysts believe a slow start to the year for sales is likely to raise uncertainty on lapping stronger sales in the back half (that were driven by the TV inflection, significance of the new iPhone, and mass adoption of wearables), and this is likely to keep a lid on the stock's valuation until there is greater clarity given that the company's fourth quarter is 57% of earnings, J.P. Morgan said.

Capital One (COF - Get Report) was downgraded at FBR Capital Markets to market perform from outperform. Twelve-month price target is $87. Company is facing higher costs and slower consumer and commercial loan growth, FBR Capital Markets said.

EMC (EMC) was downgraded to hold at TheStreet Ratings. You can view the full analysis from the report here: EMC Ratings Report.

Juniper (JNPR - Get Report) was upgraded at RBC Capital to outperform from sector perform. Twelve-month price target is $29. Sales appear to have stabilized and there are early signs of higher telecom spending, RBC Capital said.

Mattel (MAT) was upgraded at Goldman Sachs to buy. Twelve-month price target is $37. New management is making the right strategic changes, Goldman Sachs said.

Manitowoc (MTW) was downgraded at RBC Capital to sector perform from outperform. Twelve-month price target is $20. Company is facing challenges in its food service and crane businesses, RBC Capital said.

Microsoft (MSFT - Get Report) was upgraded at Nomura to buy from neutral. Unchanged $50 price target. Microsoft will begin to show low single-digit revenue growth on an organic constant currency basis in calendar 2016, with about 10% EPS growth from the leverage of share repurchases and a 2.9% dividend yield, at a reasonable valuation of 12.4 times tax-effected EV/uFCF on Nomura's 2016 estimates, Nomura said.

Omnicare (OCR) was downgraded at RBC Capital to sector perform from outperform. Valuation call, based on an $82 price target.

Quintiles (Q) was upgraded at Jefferies to buy from hold. Twelve-month price target is $79. Q is coming off a year of solid top-line growth but even stronger bookings growth, Jefferies said.

Must Read: 11 Safe High-Yield Dividend Stocks for Times of Volatility and Uncertainty

By TheStreet Staff 

Source:http://www.thestreet.com/story/13125174/1/analysts-actions--amazon-capital-one-juniper-microsoft-omnicare-and-more.html

VC Investing in Bitcoin Rises to the Fastest Pace Yet

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The amount of money venture capitalists areinvesting in Bitcoincontinues to accelerate, demonstrating their faith in the digital currency's potential.

In the first quarter of 2015, venture capitalists poured $229 million intoBitcoin startups. That was more than double the $144 million invested inBitcoin in Q4 2014.

And it's equal to two-thirds of the $349 million of venture capital invested in Bitcoin in all of 2014.

It puts VC investing in Bitcoin on track to raise $916 million this year. That's more than 2.5 times the 2014 total.

The rate of Bitcoin investment also mirrors very closely the progress of Internet-based startups back in the mid-1990s.

What's most remarkable about the accelerating pace of VC investing in Bitcoin companies is that it has occurred despite a series of setbacks for the cryptocurrency.

Negative News Can't Slow Down Investing in Bitcoin

Remember, it was in February of 2014 that the Mt. Gox Bitcoin exchange collapsed, losing 750,000 customer Bitcoins worth about $350 million at the time.

Other issues that have plagued Bitcoin include:

• Unfavorable treatment by several governments, particularly China and Russia.
• Scandals involving several top members of the Bitcoin Foundation, the entity created to maintain the Bitcoin software and promoting the cryptocurrency.
• The persistence of websites that use Bitcoin as a tool for selling illegal drugs.
• The plunge in the price of Bitcoin from $940 in January of 2014 to $177 in January of 2015.

Yet none of that has deterred the venture capitalists.

They recognize the power of a monetary mechanism that can transfer money almost instantly and at a very low cost between any two parties anywhere in the world. The VC crowd also recognizes the power of the Bitcoin blockchain, the technology that underpins the digital currency.

In addition to verifying Bitcoin transactions, the blockchain can store data. That means the blockchain can be used to confirm ownership of property such as housing or autos, as well as for such applications as voting, trademarks, proof of authorship, and more.

The first quarter also revealed another trend. And now venture capitalists are concentrating on the most promising Bitcoin startups.

For example, Coinbase, a Bitcoin wallet and payment company, picked up an additional $75 million of funding in January. Coinbase has now raised a total of $106 million.

And another intriguing company set a record for investing in Bitcoin last month. It raised $116 million in a single round.

Some of the biggest names in venture capital are backing this secretive Bitcoin startup – take a look…

Will This Bitcoin Startup Trigger Mass Adoption?

Called 21 Inc., this San Francisco-based company has kept its exact plans mostly under wraps. But it has attracted some very impressive investors.

Not surprisingly, Andreessen Horowitz tops the list. Andreessen Horowitz is a leader in VC investing in Bitcoin.

But the list also includes RRE Ventures, which has invested in such companies as Bitly, SailThru, Kik, Buzzfeed, Payfone, and Chain. Other big VC names include Chinese private equity firm Yuan Capital and Qualcomm Inc.'s (Nasdaq: QCOM) venture capital unit.

Several tech CEOs and founders also joined the round, such as PayPal co-founders Peter Thiel and Max Levchin, Dropbox Inc. CEO Drew Houston, Expedia Inc. (Nasdaq: EXPE) CEO Dara Khosrowshahi, and Zynga Inc. (Nasdaq: ZNGA) cofounder Mark Pincus.

The cofounders of 21 Inc., Matthew Pauker and Balaji S. Srinivasan, have dropped a few tantalizing hints.

Why SoftBank Could Be Worth $71 A Share On The Day Of The Alibaba IPO

           

Summary

• SoftBank's investment in Sprint is proving to be successful as Sprint is up over 11% post-earnings, which were reported on April 29, 2014.
• I believe SoftBank's core business and equity interests sans Alibaba is projected to be valued at $68 billion.
• My sum-of-the-parts analysis shows a pre-Alibaba-IPO price of $55/share and a post-Alibaba-IPO price of $71/share.
• SoftBank is targeted to report operating income of around 1 trillion yen for the quarter ended March 31, 2014, in addition to the upcoming IPO filing of Alibaba.

SoftBank (OTCPK:SFTBY) is a highly successful Japanese company that is traded on the Nikkei stock exchange. The company offers an American Depositary Receipt (ADR) available for trading on the U.S. markets. An ADR is a negotiable security that represents securities of a non-U.S. company that trades in the U.S. financial markets. These are denominated and for all intents and purposes can be treated like any other stock traded in the U.S. The price of an ADR generally tracks the price of the foreign security in its home market, barring occasional news released during U.S. trading hours.

SoftBank is one of the largest shareholders of Alibaba, the world's leading online marketplace company that has taken advantage of China's booming economy. Recently, Alibaba has indicated that it is about to file its F-1 papers to start the IPO process in the U.S. stock market. This IPO is projected to raise a record $20 billion for the company and increase the stock prices of the two largest shareholders: SoftBank, which owns 36.7% of Alibaba, and Yahoo, (YHOO) which owns 24%.

SoftBank's Major Investments and Core Business Other Than Alibaba Can Be Valued Around $68 Billion

Unlike Yahoo's struggling core business, SoftBank has a thriving, profitable core and owns additional equity interest in Sprint (S), Yahoo Japan (OTCPK:YAHOY), and RenRen (RENN). Sprint released its latest earnings report on April 29, 2014, showing a lower-than-expected loss in profits and increased revenues; this propelled the stock 11% higher to close at $8.27, which values the company at around $33 billion. SoftBank currently owns 80% of Sprint. In addition, SoftBank's CEO Masayoshi Son has indicated that he would like to merge Sprint and T-Mobile (TMUS) in order to compete with the current U.S. telecom duopoly of AT&T (T) and Verizon (VZ).

At the moment, there are some obstacles that may prevent this merger from occurring as there may be a potential harm to consumers with less choice in mobile carriers. However, Son is determined to push forward and is planning on issuing a bid using corporate bonds, convertible bonds, and loans in order to do so. A formal bid is expected at some point this summer either in June or July. Of course, there are hurdles with the Federal Communications Commission (FCC), but SoftBank is one of the few companies with the means and influence in order to move this potential merger along.

As promising as SoftBank's other developments are, I am confident that the windfall received from the mammoth Alibaba IPO will eclipse other developments in the core business and other equity interests. To understand what the share price will be on the day of the IPO, I have developed a sum of the parts analysis in order to determine the current value of Alibaba already priced into the stock. From this, a projected share price can be determined based on the expected opening day trading price of Alibaba. Since this is a Japanese company, it is mindful to note currency fluctuations between USD/JPY may impact the price of the SoftBank ADR.

Share price information obtained from the SoftBank website is presented below. The table breaks down all major investments, not including Alibaba or the core business.

Source: SoftBank corporate website.

As seen in the table, the major investments other than Alibaba or the core business are slightly over $40 billion. Based on a CNBC Fast Moneyappearance by Whale Rock Capital fund manager Alex Sacardote on Nov. 22, 2013, the estimate for SoftBank is $80 billion, including all businesses except the stake in Alibaba. Based on the information from the table above, the core business of SoftBank is valued at around $40 billion. The information from this CNBC video is based on Q3 2013 earnings, which were less robust than the Q4 2013 earnings. Therefore, it seems to reason that this estimate is on the more conservative side.

My Sum-of-the-Parts Analysis Shows Alibaba's Undervalued Price Into SoftBank Stock Value

Since SoftBank is a holding company, a 15% discount (from Goldman Sachs analyst Ikuo Matsuhashi) can be applied to the stock price, resulting in an overall market cap of $68 billion -- not including the Alibaba stake. As of April 30, 2014, the current market cap of SoftBank is $88.5 billion. This means that $20.5 billion ($88.5 billion to $68 billion) is the value of Alibaba priced into the stock. As SoftBank owns 36.7% of Alibaba, this calculates to a projected Alibaba valuation of $56 billion priced into the SoftBank stock, which is much smaller than the current analyst estimates (between $155 and $250 billion).

Incremental Valuation Analysis Projects SoftBank Pre-Alibaba IPO Price at $55/Share, Post-Alibaba IPO Price at $71/Share

From Goldman Sachs analyst Ikuo Matsuhashi the sum-of-the-parts model used determined that for every 10 trillion yen increase in Alibaba's valuation, there is a 180 yen increase in the share price of SoftBank. Again, this was done in December 2013, before the monstrous 66% revenue growth by Alibaba, reported by Yahoo in April 2014. Nevertheless, the old model will be used as it is more conservative.

I converted this from JPY into USD, and found that for every $9.8 billion added to Alibaba's valuation, $1.76 should be added to the share price of SoftBank. In the secondary market, it is believed that Alibaba is fairly valued around $155 billion, and is believed to be $245 billion on the opening trading day of the Alibaba IPO. Using this analysis, the additional value to SoftBank before the IPO is $99 billion and is $189 billion on the opening trading day.

Baidu: A Wide-Moat Business With 40% Upside Potential

|  44 comments |  About: BIDU, Includes: AMAP, GOOG, GOOGL, QIHU, QUNR, YOKU

Disclosure: I am long BIDU. (More...)

Summary

• Baidu will maintain its leading position in PC search and extend its leadership into the mobile search business.
• Mobile payments, map services, online video and app distribution will be key revenue and earnings growth drivers in coming years.
• Stock is trading at a 40% discount to fair value; ramping margins could be a long-term catalyst.

Baidu's (BIDU) core search engine business is expected to continue delivering solid revenue growth over the next several years, largely driven by China's rising Internet user base. Baidu recently entered the mobile segment by providing mobile payments, map services, online video and apps. These initiatives are not yet generating meaningful revenue, but I believe they will become long-term revenue growth drivers on the back of rising demand for mobile services.

Even with Baidu shares up more than 80% over the last 12 months, the stock is still trading at a substantial discount to its Internet peers. I believe this is unjustified given the company's robust growth, ramping margins and wide economic moat. Taking these factors into account, I believe Baidu is one of the best investment opportunities of 2014.

Business Overview

Baidu is the dominant Chinese search engine, with over 70% market share, and the second-largest search engine in the world behind Google (GOOG,GOOGL). The Baidu.com website is the most trafficked website in China, and the "Baidu" brand is ranked as the most valuable Internet brand in China. The company generates revenues primarily from pay-for-performance advertising ("P4P"). Its P4P platform helps connect millions of Internet search users to its more than 753,000 marketing customers who pay it a fee based on click-throughs for priority placement of their links in the search results. Baidu was founded in 2000, and listed on the Nasdaq in 2005.

Baidu Benefits From a Tremendous Network Effect

Baidu is the dominant Internet search engine in China, with over 70% search market share as of 1Q14. Some investors have been concerned that Baidu will eventually lose its market share advantage to competitors such as Qihoo 360 (QIHU) and Sogou (including Soso). Although rising competition is a risk one should consider, I still believe Baidu will remain the dominant Chinese search engine going forward, because the company benefits from a tremendous "network effect."

Figure 1: Baidu's Total Search Market Share (PC + Mobile)

Note: This market share estimate is an average based on various sources.

Source: M&E Research, Analysys International, iResearch, CNZZ and EnfoDesk

Baidu ended 2013 with more than 753,000 marketing customers, making it the largest Internet search engine in China by some distance. This customer base has grown at an impressive 41% per annum between 2003 and 2013, and will likely continue growing at double-digit rates for the foreseeable future. More customers have led to more information on Baidu's online platforms, and consequently, attract more search engine users. This creates a self-reinforcing network effect that is very difficult for its competitors to replicate, since it takes a fairly long time for other companies to achieve a user base of similar size. Moreover, millions of Internet users rely on Baidu's dominant online platform to connect with each other and share information and knowledge. It is highly unlikely for users to give up the massive network and information source by switching away from Baidu.

I believe the increasing Internet penetration in China will help widen Baidu's economic moat over time. First-time Internet users are more likely to choose Baidu as their preferred search engine, simply due to the fact that it is probably the one they are most familiar with. In my opinion, this gives Baidu an enormous competitive advantage. The Internet penetration rate in China has increased steadily from 6% in 2003 to just below 46% in 2013. However, this penetration rate is still low compared to developed countries. The Unites States, for example, has a penetration rate of nearly 80%. Over the long term, the growth in the number of Internet users in China will contribute toward the growth in the number of Baidu users. I believe this will further strengthen the company's network effect and widen its economic moat.

Figure 2: Internet Penetration Rate in China

Source: M&E Research and CNNIC

Mobile Business Will Be a Long-Term Growth Driver

The number of mobile Internet users in China has grown at 47% per annum between 2007 and 2013, and reached 500 million by the end of 2013. Still, considering China has a population of over 1.3 billion, this represents a mobile Internet penetration rate of only 37%. Although, with the continued rapid adoption of mobile devices in China, the number of mobile Internet users is likely to see further growth in coming years.

Figure 3: Mobile Internet Penetration Rate in China

Source: M&E Research and CNNIC

I believe Baidu is the strongest-positioned to benefit from the fast-growing mobile search market. According to the 2013 survey on "Internet User Search Behavior" by CNNIC, over 89% of mobile Internet users in China picked Baidu as their favorite mobile search engine, dwarfing its main competitors Qihoo 360 and Sogou (including Soso). This suggests that Baidu's mobile search will eventually achieve success similar to its PC search business.