Apple May buy Beats for 3.2 Billion (Unconfirmed)


By David Docekal, The Hypercapitalist


The notion that Apple may be branching out even more by buying a third party brand has brought back memories of Apple of the 90s. Without Steve Jobs, Apple in the 90’s was making all kinds of products: Printers, scanners, digital cameras, tablets/PDAs (Remember the Newton?) and licensing out their Mac software to third-party PC manufacturers.

And what happened?

They almost went bankrupt.

Why? because rather than focus no innovation in their core business, they spread themselves too thin and diluted their brand. In 1997, Steve Jobs put a stop to that. Granted they branched out slightly with the iPod, iPad and Iphone but those were tightly researched, innovated and filled voids in the marketplace. Does apple need to have a headphone business? no.

What they need to do is create a TV and soon. Smart TVs are the next wave. Apple is in prime position now to do with a TV that the iPhone did back in 2007.

There have been rumors for years but no actual product. A TV running iOS needs to be out there and fast. Make 2014 the year of the TV. Allow networks to create apps for their content. Let local TV stations create apps for their content as well.

The future is knocking on the TV industries door. Apple needs to be the one to answer.

Read More on CNN:

A $15 Minimum Wage Would Be Nice but….. (Opinion)

By David Docekal, Editor The Hypercapitalist



There has been much talk about raising the minimum wage to levels significantly higher than they are. But I always say: If you ask me what a bank teller looks like when there is a $15.00 minimum wage, Id be happy to show you a picture of an ATM machine. That’s where its headed. I would fight for more pay but it would mean fighting for my own financial demise. It’s simple business logic. McDonalds is not going to pay someone $15 an hour as a cashier when they already have automated technology that could be easily deployed to their locations. In the long run it’s more cost effective. You can clamor for a higher minimum wage but the reality is, that’s not how the economy works. You’ll be fighting the wrong cause.

Financial predictions to track in 2014 (CBS News)

Financial predictions to track in 2014

By Larry Swedroe

Every year, I like to keep track of predictions people make for the upcoming year, the “sure things” for the year. It seems like no one in the financial media holds others accountable, which is a shame since the evidence shows that there are no good forecasters. So I will. Today, we’ll look at the common predictions I’ve been hearing for 2014.

Our first sure thing is that with the Fed announcing its plan to end quantitative easing, interest rates will rise. Thus, investors should limit bond holdings to the shortest maturities.

Our second sure thing follows from the first. With the Fed tightening, emerging markets equities will perform poorly.

The third sure thing is that with the CAPE at 26.17 as we entered the year, about 60 percent above its long term average, stocks should be avoided.

The fourth sure thing is that with all the fiscal and monetary stimulus that continues to be injected into the economy, we’ll see a sharp rise in inflation (Note: This is guru Peter Schiff’s favorite subject).

The fifth sure thing follows from the fourth. The rising inflation will lead to a falling dollar. The dollar index closed 2013 at 80.29

And the sixth sure thing follows from the fourth and fifth: Gold will reverse the sharp fall it experienced in 2014. Gold closed 2013 at $1204.50.

The seventh sure thing is that the municipal bond market will be hit by both interest rate increases and default problems, keeping investors away.

The eighth sure thing is that the economic recovery will continue its tepid path, with the Philadelphia Federal Reserve’s Survey of Professional Forecasters predicting GDP growth of 2.6 percent.

The ninth sure thing is that after defying the gurus in 2013, the volatility of the market will rise. The VIX ended 2013 at 13.43.

Our tenth and final sure thing is that active management will beat passive in net returns. Seventy-five percent of advisors believed that, as stated in InvestmentNews, January 6-10, 2014.

That’s our list. We’ll report back to you at the end of each quarter. We’ll check in quarterly to see how things actually turn out. 

© 2014 CBS Interactive Inc.. All Rights Reserved.

Fast food CEO: How govt regulation is driving us abroad (CNBC)

In China, customers don’t order french fries—they’re shu tiao. In Turkey, they’re called patates and in Russia, you would ask for kartofel’ Fri.

Andy Puzder, the CEO of CKE Restaurants, the parent company of Hardee’s and Carl’s Jr., should know. His company is expanding rapidly abroad due to higher potential outside the U.S., which is hampered by what he sees as too much government regulation.

“It’s difficult to open in the U.S., but we love the U.S. and continue to fight the good fight to open restaurants and create jobs,” Puzder said. “It’s just that the government is making it hard for us to build those restaurants.”

Over the last three years, Hardee’s and Carl’s Jr. opened more restaurants internationally than in their own backyards—a first, he added. CKE now operates restaurants in 30 foreign countries.

(Read more: McDonald’s removes worker site after fast food flap)

On a percentage basis, the growth rate is striking. During this period, the company increased its restaurant count domestically by 2 percent. Meanwhile international locations jumped by 53 percent as CKE filled in “white space” or areas where it currently doesn’t have restaurants.

Easier to open in Siberia than California

“Under the current U.S. business climate, regulatory and tax restrictions tend to curb otherwise dynamic entrepreneurial energy,” Puzder said. “We’d love to see more growth in domestic markets. Unfortunately, it’s easier for our franchisees to open a restaurant in Siberia than in California.”

In the U.S., the company’s Hardee’s division is expanding in New York, New Jersey, Chicago and South Florida. Meanwhile, the Carl’s Jr. division is growing in Texas and the Seattle area.

(Read more: Recession’s over … so who forgot to tell diners?)

Puzder named Brazil, Russia, India, China and Europe as the places where he sees the greatest opportunities for growth.

“Other than Antarctica and the North Pole, I can’t think of any countries we’re not looking at,” he added.

Play Video
The end of auto tipping
CNBC’s Jane Wells reports the practice of automatically tipping larger parties is being phased out by many restaurants chains across the county due to new IRS rules.

Currently, the company has 36 locations in Russia, where it’s expanding “aggressively,” six in China through a joint venture and two in Brazil. He added that the number in Brazil could balloon to 500.

It’s “just hard to talk about the numbers in China,” he said. “You could have 1,000 (or) 2,000 there. It’s hard to estimate the potential in that country.”

CKE is currently in talks to open its first locations in Spain, Germany, Great Britain and Australia.

(Read more: Restaurants’ big bet to get you to spend more

It’s also “very close to a deal” in India, which Puzder said “would be an interesting country for us because they don’t eat burgers,” but would go for chicken sandwiches and veggie patties.

Challenges to U.S. expansion

Puzder named ethanol regulation, which has resulted in higher beef costs, a rising minimum wage and higher labor costs due to Obamacare as three obstacles that make doing business in the U.S. more difficult than in the past.

To help lessen the effect of these rising labor costs and to attract a tech-savvy generation, CKE is turning to technology and looking into options for mobile ordering as well as tablet ordering within its restaurants.

“I think it satisfies the needs of younger people. It also reduces your costs,” he said. “When they talk about raising the minimum wage or providing health care for employees over 30 hours, you’re really encouraging automation.”

—By CNBC’s Katie Little. Follow her on Twitter@KatieLittle

Snow Equals Opportunity!

By David Docekal, Editor The Hypercapitalist


The 162nd Rule of Acquisition states that even in the worst of times someone turns a profit. Nothing could be more true about the hardworking private contractors whose primary business is to plow snow. While we whine about our commute and having to shovel our own driveway, this difficult time has profit being earned hand over fist.

Snow storms highlight entrepreneurship at its best. From the larger companies with dozens of plow trucks to the kid on the corner armed with his (or her) trusty shovel to clear his neighbors driveway. This is the American dream! Where some see adversity, others see opportunity. This is the attitude that keeps this country strong.

The economy is aided by the money spent by those snow plow employees. The kid on the corner might in fact be saving up for a new bike or the latest gaming console.

So while it took me over 2 hours to get to work this morning, I look out the window and see white gold.

There’s gold in those snow mounds!

Manufacturing sector growth slows slightly in December (CNBC)

By Rick Santelli, CNBC

U.S. manufacturing grew at a slightly slower pace in December, but hiring hit a 2½-year high and the volume of new orders soared to a level last seen in early 2010, an industry report showed on Thursday.

The Institute for Supply Management (ISM) said its index of national factory activity stood at 57.0 last month. That was in line with economists’ forecasts but a touch below November’s 2½-year high of 57.3. Readings above 50 indicate expansion.

Even so, December’s result was the second-highest reading of the year. The goods-producing sector contracted in May but its growth accelerated over the second half of 2013.

And the forward-looking new orders index, at 64.2, checked in at its highest level since April 2010, suggesting momentum in the sector could quicken in 2014. It stood at 63.6 in November.

The employment index rose to 56.9, its best showing since June 2011, from 56.5 in November.

A separate report showed that construction spending grew at the fastest rate in five years in November.