Meanwhile, the currency markets are as are the most liquid, recession-proof market out there. And we’ve heard that one group of FX investors, led my master FX trader Bill Jenkins, has been making big wins lately. We’re talking gains of 42% in five days, 70% in four days, and 100% in one day.

Bill has been making these gains using currency options. They ensure strict minimum risk and require very little starting capital.

Right now, Bill is sending his FX profit-plays to a select group of test readers. He’ll tell you what the best play is and you decide whether to execute that play for maximum profits. Bill has agreed to allow Notes readers can join them risk-free. Follow  this link to  learn more.

It is the battle of the tightwads these days. Yesterday it was McDonald’s (NYSE:MCD) and its value-menu offerings grabbing the attention of investors. Today it is Kroger (NYSE:KR) and its private-label product lineup.

There is a saying in the grocery industry. “Shoppers need to buy groceries, but they do not need to buy groceries from you.”

In an economic downturn like this one, the line could not ring more true. With groceries stores of all sizes and styles popping up seemingly on every suburban street corner, consumers have more choices than ever.

The grocers that have managed to keep their product offerings and prices in line with consumer demands are doing well. The companies that have not been so dynamic are failing.

Fortunately for its investors, Kroger has used its private labels to offer cost-conscious shoppers some high-quality alternatives at lower prices.

During the recent boom cycle, some consumers were embarrassed to be caught in the checkout line with a cart full of generic brands. But in today’s recession, penny pinching and coupon clipping is a new fad. Fortunately for guys like me, it’s hip to be square.

Ramen Noodles: the ultimate recession-proof product

During its latest fiscal quarter, Kroger reported a net income of $349 million or $0.53 per share on revenues of $17.26 billion. Profits were up 8% over last year’s figure of $322 million. That is fantastic growth during one of the worst quarters in the nation’s recent economic history.

Read the full article here:  Investment strategy: Value brands strike again

This Small-Cap Biotech Just Hit its Stride

One of the most recession-proof industries is health care. No matter what happens to the economy people will always need medical attention – and new developments will always be in the works.

On Thursday, a small-cap pharmaceutical company, Pozen, Inc. (Nasdaq: POZN), soared after the Food and Drug Administration agreed to allow testing of two of its experimental drugs.

The stock is up over 50% in a week. Yesterday (Thursday), it was one of the top-five percentage gainers on the Nasdaq.

Pozen Inc. - Helping Those With Chronic Pain

Pozen is a drugmaker that creates new medicines to help patients with diseases that cause chronic pain. Its goal is to improve these patients’ quality of life by providing them with therapies that are more effective, safer and convenient.

The go-ahead by the FDA is huge for the company. Obviously, the success of its business is highly dependent on the marketplace value of its ideas and the related patents obtained.

But Pozen’s ability to obtain from the required regulatory agencies approval to sell the developed products, and its ability to find strong commercial partners to successfully commercialize the products, cannot be understated.

Pozen paired with AstraZeneca in August 2006 in order to license the product(s) and to collaborate in the remaining development and commercialization. Upon reaching certain goals, AstraZeneca has promised to pay them $345 million, what is being referred to as “milestone payments.”

Pozen’s PN 400 – Treating Types of Arthritis

One of its drugs, PN 400, will be used to treat various types of arthritis. The second, PA32540, is intended to give the same cardiovascular benefits as aspirin. Both are designed to help patients without developing ulcers that come from current drugs used.

These developments bode well for Pozen, which plans to file for regulatory approval of the two drugs – allowing it to then market and sell the products to those who would benefit.

There is a clear need in the drug market for a medicine that can relieve inflammation and help to manage pain – Pozen can fill that void. Given the roughly 20 to 30 million people who suffer from osteoarthritis, not to mention the millions of others with chronic pain, this product is likely to have mass appeal.

And according to Bill Hodges, Pozen’s Chief Financial Officer, “The acceptance of the filing would fetch us a milestone payment of $10 million.” That’s money in the bank for Pozen.

Pozen is pulling back a little this morning, and it’ll probably come down a little more in the coming days. Once the euphoria of FDA approval wears off, and the emotion gets driven out of the buying, serious investors can start looking at purchasing this stock before it makes its next big gains. And with the pipeline this company has, that could be considerable.

Source: Pozen Inc. (Nasdaq: POZN): Stock of the Day

“Broad should be a lot poorer this year. Worth $7 billion last fall, the insurance and housing maven saw his 46.6 million shares of AIG – received a decade ago when he sold his SunAmerica to the insurance giant for $18 billion – drop 70% between last summer and August 29, the day we priced the Forbes 400 (they’ve fallen much further since). That decline erased $2 billion from his personal balance sheet. But Broad’s net worth fell only $300 million. One reason: the soaring value of his 2,000-piece art collection. Comprising mostly contemporary pieces by artists like Jeff Koons, his collection was recently appraised at $1.9 billion, up 72% in a year.”

The article goes on to detail how several members of the Forbes 400 have hedged their fortunes during these volatile times by buying and selling and investing in art.

Of course, you don’t have to invest millions, or even tens of thousands, to buy contemporary art.  It is readily available, often at a fairly reasonable cost, at your local gallery or art festival.

The Secret to Investing In Art

The secret to investing in art, however, is buying right.  Most of us, myself included, are not experts at buying contemporary pieces of art below fair market value.

That’s why I often recommend that both novices and experienced art buyers use Mike Kuschmann, President of Fine Arts Limited.

Headquartered in Winter Park, FL, Fine Arts doesn’t have a gallery of artwork to sell.  In fact, it doesn’t have a gallery at all.

Kuschmann is a “buyer’s broker.” That means he works for you, not the seller. If you visit a gallery, art festival or retail store and see a print, painting, sculpture or other piece you’d like to own, don’t pay retail. Mike will contact the seller on your behalf and negotiate a dealer’s price, saving you hundreds or perhaps thousands of dollars.

Mike has also saved his clients quite a bit in taxes, as well…

Investing in Art – Donating to IRS-Approved Charities

The 1995 Tax Act allows you to donate to any IRS-approved charity works of art at their fair market value, not at their cost basis. (Moreover, you can deduct the charitable gift’s fair market value on your return without being subject to the dreaded alternative minimum tax.)

As Mike explains, “I work closely with published artists and sometimes acquire limited edition prints or serigraphs at a substantial discount to the current market value. Clients of mine purchase them far below their published cost – often for just a few thousand dollars – and later donated them to a local hospital or university at their appraised value, allowing them to save thousands of dollars in federal taxes.”

The IRS requires you to hold these art investments for one year in order to donate them at their fair market value. And, of course, they’re beautiful. You may decide to just keep them.

However, most of his clients donate them to a local hospital or their old alma mater – and get a tax deduction for the charitable contribution. (Or Mike can handle the donation for you.)

For more information, feel free to contact Mike Kuschman at 800.229.4322 or 407.702.6638.  He’ll send you a complimentary brochure packet, detailing his services and the tax savings available.

Over the next few weeks, I’ll be highlighting several other year-end tips for reducing your federal tax liabilities.

At the rate Uncle Sam has been spending money lately, you can bank on taxes going up soon.

It pays to plan today to keep your taxes low tomorrow.

Source: Investing in Art: One Asset That Has Increased in Value Lately

If we go into a recession, who’s going to be buying the Porches, Cristal and caviar? Why isn’t anyone worried about the rich people? They live in the same economy we do and face all the same problems. I guess people just don’t seem to care about the $100,000 birthday party for a two-year-old that gets downgraded to a humdrum $90,000 party.

So how will the rich get by? During tough times, many people are hit hard. We often hear about industries and sectors that are “recession proof.” These are areas of the economy that cannot be negatively affected by a recession for a variety of reasons. Either they exist in an area where demand is constant, or their business model is such that a slower economy can do little to derail them.

But have you heard about recession proof people yet? These are the people that no matter how bad things get, they are able to maintain their current lifestyle for one simple reason: They can still afford it.

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If you’ve got enough money, a small percentage rise in inflation isn’t going to break your bank. And I’m not just talking about the upper-middle class family in the big house down the street. Even those people are thinking about home equity and capital gains taxes. I’m talking about the guys cruising around on 60-foot yachts, on their way to an island not found on maps, eating some rare and exquisite delicacy we haven’t heard of yet.

In short, I’m talking about real wealth. The kind of luxury and decadence once reserved for a king and his heirs.

Ultra-High-Wealth Individuals

During a recent Agora Financial editorial meeting in Baltimore, one editor talked about the buying habits of people called “ultra-high-wealth individuals” (UHWIs). These people are not just rich, but really rich. They embody the old maxim that “If you have to ask, you can’t afford it.”

UHWIs are a fast-growing cadre, and not just in the U.S. and Europe. There are rapidly increasing numbers of UHWIs in Russia, Asia, South America, Africa and, of course, the Middle East. And there are discernable investment ideas in this. UHWIs buy planes, trains, automobiles, fancy houses and all other sorts of bejeweled bling. UHWIs have enough money to not worry about energy prices. They do not know scarcity.

Because how can anything be scarce when you have seemingly unlimited means? Some people worry about gold prices as a hedge against a falling dollar. Others worry about gold prices because they are installing a new solid-gold bathtub in one of their several master bathrooms. And others aren’t worrying about the price at all.

If food prices go up 20% or 30%, it means nothing to people with money. But it means everything to those billion or so who earn about $1 per day. So UHWIs do not know scarcity.

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Still, do you remember this scene in Titanic? The rich guy offered a wad of cash to one of the ship’s crew for a seat in the lifeboat. The crewman smacked the wad away and said, “Your money’s no good anymore.” But our civilization could never get to that point, right?

“Different from You and Me”

In 1926, the great writer F. Scott Fitzgerald published one of his most famous stories, The Rich Boy. The narrator begins with words that have become very famous. “Let me tell you about the very rich,” says the narrator. “They are different from you and me.” Later on, Ernest Hemingway added his own spin to that comment by noting, “Yes, they have more money.”

The rich may or may not be all that different from you and me in some fundamental ways. But one thing is for sure. Many of these UHWIs are making their money via the recent increases in the prices of energy and natural resources. So rising costs for energy, and the increasing scarcity of resources, have consequences for some fortunate few.

Now that may be the main difference, and something for many investors to think about. While scarcity can certainly hurt your investment portfolio, and even alter your lifestyle, there is always opportunity lying within scarcity. Of course, nothing is free, and you need to know where to look, but as goods become scarce, opportunities and windows will begin to present themselves.

And while I can’t promise you a new life of helicopter rides and exotic vacation spots, I certainly can offer you some helpful insight and observations. You just need to keep your eyes open…

Until we meet again,
Byron W. King

P.S.: In case you’re wondering what kind of energy and resource plays these rich guys are seizing, I’ve got a few gems for you to consider. The readers of my resource letter, Energy and Scarcity Investor, have just gotten their first crack at these picks and have already seen dividends from their investment. Click here to see the upcoming plays I’m working on…