Tag Archives: Carmel Valley

Rio Olympics & Ballast Point Brewing

The Economy: The economy continues on its path of slow expansion with regional pockets of weakness and strength. If you live in Detroit things are grim. Likewise for California’s Central Valley. If you live in San Diego, well, you’re living in Paradise and the Livin’ is Easy. San Diego’s economy rests on the 3-legs of military spending, tourism and hi-tech/med-tech. Add craft beer to that trifecta with Ballast Point Brewing having recently been sold in a billion dollar deal. Entrepreneurs and their young families are flocking to the county as the allure of sun, surf, schools and simoleons resonates across the rest of the country.

Food for Thought: Economic news has been brushed aside by the 3-Ring Circus known as the 2016 Presidential Election. Who woulda thunk it. The preeminent military and economic power in the history of the planet boogying like a banana republic on steroids. Plato’s Cave would tell us that this is the end of the world as savages leap and yelp around the bonfire. But as the rest of the world looks on in stunned disbelief, we Americans know that this is simply the best and most original entertainment that we’ve seen in decades. Thank the gods for the station-break provided by the Rio Olympics.

Stem Cell Therapy: A Journey, Part 1

Stem Cell Therapy: A Journey, #1

Stem Cell Therapy is also called Regenerative Medicine. It’s a branch of molecular biology which deals with the “process of replacing, engineering or regenerating human cells to restore or establish normal function.” The objective is to engineer damaged tissues and organs by stimulating the body’s own repair mechanisms to heal previously irreparable tissues or organs.

The mechanism of regeneration is not yet fully understood. Most doctors will tell you, “We really don’t fully understand what is happening here …” But like early vaccinations, which weren’t fully understood either, the positive results are encouraging. Some of the long-term results are evident in the rarefied world of horse racing where stem cell therapy has been used for years.

Stem Cell Therapy uses three biological factors to work. 1) Your own stem cells. 2) Nutrients to encourage cell growth and 3) A molecular lattice or scaffold that the Stem Cells can attach to and grow.

Let’s look at each of these three biological factors:

1) Stem Cells or Mesenchymal Stem Cells are now also known as Multipotent Stromal Cells (MSCs). They can morph, into a variety of cell types, including bone cells, cartilage cells and muscle. Stem cells are divided into “adult” and “embryonic.” Adult stem cells are used in stem cell therapy. Embryonic stem cells are still the focus of ethical issues and are not part of this discussion. The two most common areas where stem cells are taken from your body are from bone marrow or body fat. Early stem cell therapy emphasized bone marrow over body fat as a source for bone and cartilage treatment. Most therapies have moved away from this distinction and now use body fat, also known as “Adipose-Tissue-Derived Stem Cells” or (ADSCs). ADSCs are usually taken from the back or “love handles” in a minor liposuction procedure at the beginning of your same-day treatment. Body fat one of the richest sources of stem cells. There are more than 500 times more stem cells in 1 gram of fat than in 1 gram of bone marrow. Body fat stem cells are actively being researched in clinical trials for treatment of a variety of diseases.

2) Nutrients to Encourage Cell Growth is a platelet-rich plasma (PRP). PRP contains multiple growth factors including transforming growth factor (TGF), insulin-like growth factor (IGF), fibroblast growth factor (FGF), and platelet-derived growth factor (PDGF). Data shows that PRP has a positive effect on the stimulation of bones, blood vessel and cartilage formation. Think of it as nutrient bath that encourages stem cell growth and development in the affected areas of your body. Stem Cells need to food to grow as they develop in the body. Chow Time!

3) A molecular frame, lattice or scaffold that the Stem Cells can attach to and grow. Think Chia Pet. Those seeds need to have something to hang onto while they grow. Same with Stem Cells; they’ve got to have a structure to grow on. Hyaluronic Acid (HA) is a molecule with functions found in many tissues, including cartilage. HA is currently used as the molecular scaffold system. The scoffold typically serves for at least one of the following purposes: To allow cell attachment and migration; To deliver and retain cells and biochemical factors; To enable diffusion of vital cell nutrients and expressed products; To exert certain mechanical and biological influences to modify the behaviour of the cell phase. Using injected HA-binding provides the ability to interact with your body’s local HA which should foster new 3-dimensional cell tissue production. Calcium chloride is used as a PRP-activating agent.

My Stem Cell Treatment on December 18, 2015,consisted of 3 injections, one right after the other in the same spot, during my 2-hour procedure: 1) Stem cells. 2) Platelet-rich plasma (PRP) RPR Growth Factor. 3) Hyaluronic Acid (HA) as a Scaffold.

Cognitive Biases by Mark Dow

1. We overestimate our abilities, our uniqueness, and our objectivity, even more so when under emotional strain. We have all seen the studies: 90% of people say they are above average drivers. Rarely do people think those around them work harder or better than they do. And so on…

2. We systematically understate the role of ‘random’. We crave order, and we are willing to torture the facts to get there. But sometime things just happen, and sometimes problems don’t have solutions. No fundamental cause, no guilty party, no concrete answers. Moreover, on the up side, when random does break our way it’s appropriated as skill. The investment world is shockingly bad at separating outcome and process—yes, even those who drone on and on to prospects about their processes.

3. People will find a way to believe what they are incented to believe. As the saying goes, “The most dangerous place to stand is in between someone and what they want to believe”. In my experience, it’s hard to overestimate the power of this statement. Starting with the conclusion and reverse-engineering the supporting arguments is central to the human condition and, surprisingly, serves and important role in our evolution.

4. When presented with points 1, 2, and 3, almost everyone recognizes their validity, but believes at some level that he/she is exempt. The typical reaction is “Yeah, for sure, of course that’s how [other] people act”. It is always easier to see others’ mistakes than one’s own. And this is one of the reasons we have a very hard time changing our cognitive biases. All of us.

La Jolla Shores Bull Market

The Economy: The U.S. economy appeared to be motoring along in slow gear until last Friday. Then the abysmal jobs report was released and it cast uncertainty into the equation. Immediately, the odds of a Fed hike in June went to zero as investors recalibrated their tactics. Then on Monday of this week Fed Chair Yellen warned against putting too much emphasis on one report. She indicated that rate hikes were still in the cards for 2016. Yep … like a snow ball’s chance … . The bottom line is this: The Fed doesn’t believe that the U.S. economy is strong enough to allow for normalization of interest rates. We are stuck at the zero bound which is causing havoc for savers, banks and insurance companies. But the Fed lacks the confidence in the economy to end financial repression. How this plays out is anyone’s guess. The Battle of The Analysts is in full swing with some insisting that the end of the world is nigh. Others are equally vocal in calling for an end to cash so that governments can more accurately monitor the economy. The NSA must be salivating over the prospect of knowing where every nickel you spend is going. We’ve never been fond of Central Banks, run by academics, trying to impose economic theory on the real world. For a beautiful example of Central Banker Mindset, see Paxton Whitehead as economics Professor Philip Barbay, in Rodney Dangerfield’s 1986 comedy “Back to School.” He truly gets no respect.

Food for Thought: Global growth rates continue to be cut. This is occurring while global stock markets rebound from their first quarter swoon. Is this divergence evidence of The Greater Fool Theory or is it The Dawning of the Age of Aquarius? Your choice. We remain strapped to the rocket but have both hands on the ejection lever. The principals here at Higgins Capital have lived through several market crashes. The crashes follow the same script: Months of warnings culminate in a tipping point that seems to catch everyone by surprise. Far too many investors go from rompin’ stompin’ bulls to deer in the headlights unable to process the environment until they’re down 40%. Do not let this happen to you. Have an exit strategy. Know what you own and why you own it. Have real or mental stops on your portfolio. Trust your own personal experience over that of experts. Are things in your personal economic life or the economic life of your organization going so well as to justify new highs in a 7-year old bull market? Why do we continue to hear about new and more economic stimulus? Beware of Central Bankers bearing gifts.

Helicopter Money

The Economy:  Economic data released this week confirmed a growing U.S. economy: Pending home sales up; Personal income up; Consumer spending up; Home prices up; Consumer confidence up; ADP Employment report in line. But the headlines belonged to Fed Chair Yellen and her speech on Tuesday. Yellen assured markets that the Fed would go slowly on any future rate hikes … if in fact they occur in 2016 at all. The expanding U.S. economy is no longer reason to hike rates. Yellen cited global uncertainty and potential fallout from recent events as justifying a slower path of rate increases. She made it clear that the Fed still has room for additional stimulus but that it can hike if the economy grows faster than expected. Global financial markets were ecstatic over the prospect of continued easy money.

Food for Thought: In the 1970s we had “stagflation.” The economy was stagnating with little growth but inflation was a problem. Eventually inflation rocketed and it was the Volcker Fed that whipped inflation with 21% money markets and a 15% 30-year U.S. Treasury. Now we have a Fed beholden to zero interest rates (ZIRP), considering negative interest rates (NIRP) and thinking about helicopter money. Our concern is that the Fed induced financial engineering, which has driven stocks higher, will end with the gravy train going off a cliff. The first 10% correction in 4-years was met with panic by global central bankers intent on continuing to inflate asset bubbles. In this investing environment, know what you own and why you own it.

Super Mario Draghi Rules

The Economy: Super Mario Draghi continues his legacy of Shock and Aw Shucks. We haven’t seen this kind of Italian Brass since Caesar crossed the Rubicon. Today Mario announced an aggressive expansion of ECB stimulus. Interest rates were cut further into deeper negative territory. Quantitative Easing was expanded by 30% from 60 Billion/month to 80 Billion/month. But the biggest change was adding corporate bonds to assets that the ECB can purchase. Global financial markets were not impressed. Moving into private sector debt is a Rubicon. What next? … Central Bank ownership of stocks, then real estate? Perhaps the ECB’s solution to slow growth is for the Central Bank to own all member assets and means of production. Nice way to come back to Marxism. Stalin and Mao must be gloating. Break out the Hammer and Sickle and fire up The Internationale.

Food for Thought: This week marks the 7th anniversary of the Bull Market. Stocks celebrated by trading down and breaking a 5-week rally. We continue to recommend that investors take profits and raise cash. The selloff that marked the first 6-weeks of the year has been arrested. But as we look out over the environment, we find it difficult find the drivers of growth that would power financial markets to meaningful new highs. Selling positions and moving into a money market fund is particularly prudent with retirement plan assets or annuities. In many cases investors can cherry-pick positions to sell within the same mutual fund. This is called a “Versus Purchase” transaction (VSP). We’re into tax season, now is a good time to review and protect your retirement assets. Buy and hold has worked for the past 7-years. Nothing lasts forever.

Sell The Rip

The Economy: Contrary to the gloom and doom that has dominated the mainstream media recently, most economic indicators continue to show a U.S. economy that is expanding. Industrial Production rose more than expected. Capacity rose more than expected. Producer prices rose more than expected. But weakness was seen in housing starts. With the stock market in the tank and many portfolios bleeding, the Devil-May-Care exuberance of the past few years has left the zeitgeist. Mark Twain’s concern about the return of his capital instead of the return on his capital, is in full bloom. Yes Mabel, the stock market can go down despite the arcane mutterings of central bankers. While trillions in QE failed to validate the wealth effect, the global stock market selloff has gotten the full attention of the hoi polloi. The danger will always be that the media drumbeat of stock market doom will scare the U.S. consumer into hibernation, thereby creating an actual recession where one didn’t exit.

Food for Thought: The stock market rally of the past few days has been a welcome break from the kamikaze dive we’ve experienced since mid-December. This is the time for caution. We’ve urged you to have an exit strategy. Now is the time to implement that strategy. The recent strength in the stock market may be a bounce before we head lower. Selling into this rally and raising cash is the prudent move.

Oil Opportunities

The Economy: Fed Chair Yellen appeared before Congress this week. She put on her most patient Grandma Face for the Alfred E. Neuman grandstanding of her inquisitors. Yellen acknowledged that the economic environment had become more uncertain. She mentioned falling stock and commodity prices, tightening credit conditions and uncertainty over China as causes for concern.  She observed that weakness in the global economy had made life more challenging for U.S. businesses. In response to questioning she indicated that while an interest rate cut was not in the cards, 4 increases this year was still a possibility. When asked about a possible Fed move to negative interest rates, Yellen said that the Fed hadn’t determined the legality of such a move. In short, specific targets are out and Fed opacity is back in.

Food for Thought: Oil is presenting a rare opportunity. Timing is everything. There are a variety of ways to position for this. Stocks, bonds, mutual funds, exchange traded funds and notes, futures and options are examples of how to participate in the coming price rise. We believe that a pure oil play is the most effective way to capture value. Contact us if you have questions.

Protect Your 401k

The Economy: The Fed reports after their meeting tomorrow. We’re going to press without waiting for what will be a non-event. There will be no follow-through to liftoff. Whatever is announced will be more pablum in a global economy awash in oil, terrorism, illegal immigrants and the rants of the U.S. presidential election. The slowing global economy was confirmed by Goldman Sachs who put an unheard of “sell” recommendation on Caterpillar. CAT is a blue chip and core holding for many portfolios. The sell recommendation comes as Goldman evaluates the global slowdown and sees tough times ahead. The slowdown in China just got more interesting with the head of the Chinese Bureau of Statistics arrested for corruption. Think scapegoat. Somebody other than those responsible, has to answer for the fakery and quackery that passes for economic data out of the Celestial Kingdom. Don’t be surprised to see China revise their numbers downwards before drastically devaluing the Yuan. How this plays out in Peoria is anyone’s guess. While U.S. policy makers are resolutely positive about our economy, the folks we talk with are more hesitant and concerned. With the exception of those at the defense department trough, no one is saying, “We’re gonna have a great year and we are hiring like crazy to ramp up for it.”

Food for Thought: Stocks continue to entertain. … better than any roller coaster at 6-Flags … better than canyon carving on a hot sport bike. Most investors have held on through the turmoil. So far. We continue to advise that you have an exit strategy in these interesting times. Call it a “Rubber Band” stock market. One day’s extreme snaps back the next day … only repeat the extreme again. This has been going on for a month now. Will this volatility dampen out and end, or will it continue until things fall apart? If you believe that “the markets always come back,” ask yourself how long you’re willing to wait. 2-years? 5-years? 10-years? The stock market crashed in 1929 and didn’t make new highs until the 1950’s; 20+ years later. Or take a look at Cisco (CSCO). This Dot-Com darling is still down 70% from its high in March of 2000. Some folks have been waiting for 16-years for Cisco to “come back.” Don’t let fear and greed blind you to the need for a sound game plan. Your 401k is particularly susceptible to this mistake. 401k providers and administrators do not provide investment advice. You are on your own. Take a look at your 2015 year end statement and understand what you own. All account statements are notoriously confusing. If you need help, ask. Like your second grade teacher used to tell you, “There are no dumb questions.”