Bitcoin is back! But for how long?

Have you seen the price of Bitcoin lately? Since hitting its low in April, Bitcoin is up 80%. As Bitcoin’s popularity continues to grow, more and more companies are accepting Bitcoin as a form of currency. Companies including eBay, Paypal,, Tesla, and as of six days ago, the world’s largest satellite-TV provider, Dish Network are accepting Bitcoin. As more companies and countries recognize Bitcoin as an official form of currency, it may be likely that we will see Bitcoin’s popularity, and value, continue to increase.


Disclosure: Invest at Bitcoin at your own risk. Bitcoin’s price has been volatile and may continue to be volatile due to potential government regulations and other challenges. As quickly as Bitcoin goes up, it can (and has) gone down. Back in February 2014, Bitcoin crashed 80% in seconds. 

Posted in Now

Home Depot and its surprising rebound

By Michael Santoli | Michael Santoli – Fri, May 31, 2013 1:24 PM EDT


Home Depot Inc. (HD) shares have blasted higher by 120% over the past two years, making it by far the best-performing member of the Dow Jones Industrial Average, which itself is up 25% over that span.

The Atlanta-based home-improvement chain embodies every theme that is now animating the current run by major U.S. stock indexes to fresh all-time highs.

First, Home Depot is a huge beneficiary of America’s housing rebound – which is viewed worldwide as the key source of economic growth over the next couple of years. The S&P Case-Shiller home-price index covering 20 big cities rose more than 10% in the past year, and the number of existing homes sold has climbed for 22 straight months.

A crucial investable growth theme

With growth in erstwhile boom countries China and Brazil far weaker and Europe stuck in a grinding recession, the U.S. housing-led recovery is considered the crucial investable growth theme on the planet. Two investment strategists at New York firms last week reported independently that, in visits to clients in Hong Kong and Indonesia, investor questions centered on the turnover of houses in Phoenix and Miami.

The latest Bank of American Merrill Lynch survey of global fund managers found the highest percentage betting heavily on U.S. real estate-related stocks since 2007. Given Home Depot’s hefty $117 billion market value – dwarfing that of all American homebuilding and lumber stocks combined – it is among the few bellwethers large and well-known enough for foreign investors to own as a housing play.

Home Depot also illustrates another dominant theme of this market cycle: It has managed to convert slow consumer-spending trends and middling revenue gains into hefty profit growth, by controlling costs tightly and employing some popular financial engineering among big companies today.

Last year the number of transactions with Home Depot shoppers was only 4.5% above 2010 levels. Net sales grew 3.5% in 2011 and 6.2% in 2012, lifting total net profits 5.5% and 6.1%, respectively. Yet through the magic of stock buybacks, the modest profit progress translated into per-share earnings gains above 20% in each of the past two years.

A vast number of big companies are using plentiful cash on hand and the cheap debt produced by rock-bottom interest rates to buy piles of their own shares, in order to goose per-share reported profits and give remaining shareholders a bigger proportional slice of the company.

A major driver

This sort of financial engineering has been a major driver of the market’s climb in recent years, making profits look better despite slow overall growth, and cashing out shareholders who can then recycle the money in other stocks.

Home Depot has been among the most aggressive, repurchasing a total of $10 billion worth of stock in the past three years, reducing its outstanding share count by some 10% in the process. This kind of balance-sheet management makes good sense when a company’s stock is undervalued and other high-return projects are unavailable.

Yet Home Depot is an expensive stock by most any measure, at 20-times the average of the next two years’ forecast per-share earnings, versus less than 15-times for the broad Standard & Poor’s 500 index. Home Depot’s stock-price-to-sales ratio, a common gauge used for retailers, is over 1.5, among the highest in an industry where the likes of Costco Wholesale Corp. (COST), Target Corp. (TGT) and Home Depot rival Lowe’s Cos. (LOW) have ratios below 1.

[See related: Retail Reports: The 3 Things to Watch for in Costco’s Earnings]

One reason Home Depot is pricey, of course, is that its management has done an excellent job of improving store-level performance and taking market share from the likes of Lowe’s, which is struggling – all while maintaining strict financial discipline. When stocks become as popular as Home Depot has, it is never entirely accidental or undeserved.

Home Depot has also, to a lesser degree, sent cash back to investors through dividend payments, which rose by 11% last year over 2010 levels. As with the market in general, for most of the rally a central argument for owning stocks has been their dividend yields, which have broadly been those of Treasury bonds. Yet this case is now weaker, with the rally compressing the dividend yield and the bond-market selloff lifting Treasury rates.

This week the S&P 500 yield, near 2%, fell below the 2.15% yield on the 10-year Treasury for the first time in quite a while. Home Depot’s yield is right in line with the index at 2%.

This doesn’t automatically thwart the upward trend in the market, or in Home Depot. But it removes one important verse of the bulls’ favorite song.

Combined with valuations that are no longer cheap, with much credit for a multi-year housing recovery already priced into stocks, both Home Depot and the market as a whole have less margin for error should any cracks appear in the economic picture.

Perhaps this is why Home Depot is listed by Goldman Sachs (GS) market analysts as among the top 10 “very important short positions for hedge funds,” which have placed relatively heavy bets against the stock – likely because of its stretched valuation, or as a hedge against the multitude of other current investments that hinge on the pace of the housing boom, cheap credit and consumer stamina.

Posted in WIN

Valentine’s Day: a $18.6 billion holiday

Teddy bears, chocolates, jewelry, and flowers – who would have guessed that these items would make up the majority of an $18.6 billion Valentine’s Day holiday? Valentine’s Day, whose origins are shrouded in mystery, is one of the most lucrative holidays in the year for retailers with more than $4 billion being spent on jewelry alone. Men will be responsible for approximately $12 billion of this, as they average twice as much as women shopping for this holiday.

“It’s a holiday with a lot of cash. It’s a lot of sales,” says Ron Friedman, who leads Marcum Consulting’s retail business. “Although, it’s pretty short-lived. The flowers die, the candy gets eaten up, and the lingerie gets destroyed in a couple minutes.”

Check out the infographics below to learn about consumer spending for Valentine’s Day including more details on how, where, and from whom money was spent for the holiday of love.

Valentine's Day, chocolate, flowers, jewelry, business

Credit: David Lada and Bob Mansfield, Forbes Staff; Sources: U.S. Census Bureau, IBIS and

candy, Flowers, Holidays, jewelry, Love, valentine's day, Money

Sources: SmartMoney | About Flowers | Greeting Card | NRF | Information provided by:


Posted in Now

Thinking of starting a business? You may want to consider this:

Starting and growing a business can be very daunting. The financial investment and commitment required will likely leave most up to their necks in debt, and it doesn’t help that about 30% of businesses fail in the first year and over 70% will fail by their tenth year. Before rushing to invest significant time and money into a business, you may find it prudent to consider the following:

Create a business plan.
An important step to evaluating the legitimacy of your idea, you should put together a business plan. It doesn’t have to be 50 pages long, but it should be more than an idea expressed on a napkin. A basic business plan should summarize the business you would like to start, and include an overview of the functions and strategies vital for your business to succeed. The overview should include how you plan on operating your business, and how you plan on making money (i.e. what are your revenue streams). Also, what is your marketing and sales strategy, and can you provide a projected financial statement for the first five years? This information is will help you and potential investors understand the fundamentals of your business.

Determine the market size.
Whether you are selling toothbrushes or starting a social network, you need to understand how large the market is that your product can appeal to. How much money does your market generate each year? Is your market projected to growth or shrink in the next five years? This information, coupled with the information found in the section discussing your competition below, will help you quantity the potential value of your business.

Know who your competitors are.
Before entering any market, you should know who your competitors are. Learn about their business and operating models, and what they charge for their products. What does the market share between competitors look like? If you discover that one competitor is weaker than the others, you could target their customers first. Understanding your competitors will help you position your product within the market to compete against established companies.

Differentiate yourself in the market.
Is your product or service unique? It should be. What makes you unique in comparison to your competitors? If it’s not your product or service, does your support or convenience differentiate you? If your business is too similar to those of your competitors, you could end up engaged in a price war, which will likely not end well for a new business.

Why now? Understand trends.
Is this the right time for you to launch your business? Your product or idea may be great, but is the market ready for what you are trying to sell? One of the best ways to figure this out is to talk to potential customers. Ask as many people as you can to educate yourself as to the needs or desires of your target consumer and how your product or service will help satiate those needs or desires. If your business targets a particular industry such as the restaurant industry, visit restaurants in your area and ask them about your idea. Be careful though, you will want to safeguard your idea before sharing it with the public. If your idea is patentable, you can protect it by submitting a patent application to your country’s patent office.

Understand your customer base.
Who are you going to sell to? Understanding the demographics of your customers helps to identify their values, spending habits, and consumer behavior. This knowledge will help you measure the sales potential of your idea and allow you to formulate a plan to market your product.

Sales skills are vital.
Can you successfully convey to a potential consumer why they should buy your product in 60 seconds? How about 30 seconds? In order to accomplish this, you need to understand your product very well and have excellent communication skills to convince consumers why they should buy your product.

Having great sales skills is more than just dealing with consumers. Arguably one of the toughest aspects of starting and growing a business is managing negotiations and closing deals. If you are building a product, how confident are in negotiating the best price for your materials or manufacturing so that your costs will be reduced? If there is an outstanding contract waiting to be signed by a vendor or potential customer, what skills do you have to persuade them to sign sooner?

You are only as good as your team.
During an interview at the Yale Graduate Writing Center, CEO and Founder of SumZero, Divya Narendra, said, “[I]t’s much better to own a small piece of a big pie than a big piece of nothing.” When building your team, this is an important message to convey. Many companies start with a small team of two or three people and each of these people can be equally important as the other in executing the business strategy. Especially if you are trying to raise money later on, your team members may endure as much scrutiny as your business plan. Initially, you may want to source the brightest and smartest people you can find, and afterward, you can bring young stars on board and help them develop into their potential. Watch Divya discuss business proposals here.

Are you ready to make the leap?
One of the greatest advantages of being an entrepreneur is that you are your own boss and can set your own hours. You just have to decide which 14 hours out of each day you would like to spend working and building your business. That’s right, 14 hours. As the founder of Guitar Hero, Charles Huang, discussed, sales of Guitar Hero were barely able to pay employee salaries for the first two years. However, in those two years they built partnerships in the market and developed their brand. Those were the toughest two years in Guitar Hero’s history, which subsequently ended up grossing over $5 billion in sales and was purchased by Activision. Watch his interview here.

Starting and running a business is a serious commitment, and it may take upwards of two or three years before it starts paying back. If you have any additional questions about starting a business, contact us using the form here.

[VIDEO] Charles Huang, founder of Guitar Hero telling his story

Charles Huang and his brother started Red Octane in 1999, and in 2005 created Guitar Hero which became one of the most successful video games of all time, grossing over $5 billion and selling over 90 million units worldwide.

In this hour-long interview, Charles discusses how he started, the challenges he faced starting and growing Red Octane, and includes many details about managing a company that are rarely aired or printed.

This is an amazing interview that any entrepreneur must watch. Thank you Startup Grind for putting this together!

[VIDEO] Divya Narendra, CEO and Founder of SumZero discussing business plans

Divya Narendra, the CEO and founder of SumZero spent his time after college working for a hedge fund firm. But he couldn’t shake entrepreneurial bug that started when he cofounded The Harvard Connection, which then turned into Facebook, during his undergraduate days at Harvard.

In this video, Divya is meant to discuss business proposals at Yale Graduate Writing Center, but in addition elaborates on many vital elements of starting a business. This hour-long interview is well worth for anyone thinking of starting their own company. If you are interested in learning more about starting a business, consider this.

The 400 richest people in America

Warren Buffett, US taxpayer, Fortune 400, tax rateIn 2007, the 400th richest person in America made $138 million while in 1992, the 400th richest person made $24 million. What do most of these people do? According to the IRS, which released 2009 data from the 400 richest individual income tax returns, about 50% of the 400 richest people in America made their income from capital gains (stocks, property, and profit from the increase in value of their investments). Less than 10% made their wealth from traditional wages.


Interestingly, the tax rate on capital gains had been decreasing over the last two years. In 1990, the capital gains tax rate was 28 percent, 20 percent in the latter half of the 1990s. and 15 percent under George W. Bush. This is one of the reasons why the average income of the “Fortune 400” grew by 650% between 1992 and 2007 while the average salary did not double. Also, this group of top earners is paying taxes today at just over a third of the tax rate they paid in 1955.

Conclusion: If you know what you are doing, investment in capital gains can be extremely rewarding. Check out how to make money in the stock market!


US taxpayer, Fortune 400, tax rate, Average income US taxpayer, Fortune 400, tax rate


Read more:

For Top 400 U.S. Taxpayers, a Near-Record Year

Taxes Paid by the Highest Paid Americans


From where did the dollar sign ($) originate?

Since the origin of the dollar is well documented and understood, one might expect the origin of the dollar sign would also be known. However, this is far from the case and over time, only more theories have been hypothesized. Unfortunately, each theory raises as much speculation as theories about UFOs or BigFoot.

 From “U.S.”

A popular theory referred to by the character Owen Kellogg in Ayn Rand’s “Atlas Shrugged” is that the dollar sign started off as a monogram of ‘US’, used on money bags issed by the United States Mint. Placing the U and the S on top of one another and removing the bottom curve of the U creates the historical double stroke dollar sign.

Origin of the US dollar sign, US currency

Superimposing the ‘U’ over the ‘S’ is a third theory.

The Spanish Peso

One of the more widely accepted theories is that the sign owes its origin to the Spanish peso. The peso was the first globally accepted currency and legal tender in the US until 1857. The abbreviation for peso was in the form of a large “P”, and the plural included a small “s” above it and to its right. In theory, this was simplified by retaining the upward stroke of the “P” and superimposing the “S” over it.

Origin of the US dollar sign, US currency, Spanish peso

The symbol for the spanish peso is one theory.

If the peso abbreviation is correct, then why is the dollar sign sometimes written with two vertical strokes? The accepted explanation has to do the use of the “Pillars of Hercules” which were engraved on one side of the Spanish peso. The pillars engraved on one side of the coin with the phrase Non Plus ultra meaning “nothing further beyond” (indicating all the land in the world had been discovered) written in a scroll that wrapped around the pillars. But when Christopher Columbus came to America, the engraving was changed to Plus Ultra meaning “further beyond”. Over time, instead of writing out peso or dollar, Americans created a symbol was made from the design on the coins that eventually turned into the dollar sign.

Origin of the US dollar sign, US currency, Spanish Peso

The design found on the spanish peso is another.


From The Word “Dollar” and the Dollar Sign $

The Portuguese Cifrão Theory

Even though Arabic numbers are used all over the world today, there are still differences in the way in which numbers are represented in different countries. In the English-speaking world a period is used to separate integral numbers from decimal fractions whereas in continental Europe the comma is used instead of the decimal point and either a period or a space is used for thousands and other groups of three digits. In the past the Spanish used a symbol called the calderon to separate the thousands, and the Portuguese used one called the cifrão. As the cifrão was also used to separate numeral expressions of different denominations and it consisted of the letter s with two vertical lines it has been suggested that it gave rise to the dollar symbol. (Über die Herkunft des Dollarzeichens, Christian Weyers, Zeitschrift für Semiotik, vol 13, no. 3-4, 1992).

The Hand Counted Paper Theory

The management of Em Letterpress, a firm based in New Bedford, Massachusetts, pointed out in May 2008 that the dollar sign is used in marking hand counted sheets of paper, e.g. 7$ would indicate seven sheets. Em Letterpress suggested that the most likely reason for that would be that a hastily scrawled ‘S’ would too closely resemble a numeral 5, so ‘SH’ was used, abbreviated over time to an imposed SH, and then the H’s crossbar eliminated resulting in the $ symbol but with a double vertical stroke. Paper money being counted in sheets could have used same symbol.

The Slavery Theory

There have been claims that the dollar symbol, $, is derived from the words for “slave” and “nail” in Spanish (or in Latin, according to one version of this theory that posits an earlier date for the invention of the symbol). The shackles worn by slaves could be locked by a nail which was passed through the rings or loops at the ends of the shackle and bent while it was still hot and malleable. The Spanish for slave is esclavo and for “nail” isclavo. Therefore the “S” with a nail, $, or S-clavo = esclavo or slave.

Slaves constituted a store of wealth and as a result the abbreviation for slaves that slave-owners used in their account books came to represent money.

This seems like the kind of explanation that would be popular with conspiracy theorists. It does not seem to be very popular in printed sources, at least not in English language ones, but I (Roy Davies) have seen it on the Internet and was also told it by someone who said he had heard it from a Latin-American economist and an American history professor.


There are still a handful of theories as to the origin of the dollar sign, but no conclusive evidence that confirms one theory over the other. Although the mystery continues, check out more theories about the origin of the dollar sign here:

The Word “Dollar” and the Dollar Sign $

Dollar Sign



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