“Three More Googles” Georges Yared

Apparently today is Georges Yared day here at StockGumshoe.com … a few months ago I’ve barely heard of him, and here we are inundated with two different email campaigns from him. Must be adding piles of GameChangers subscribers right and left, I suppose … more power to him. This particular service of his just launched back in March, if I’m not mistaken, so I suppose that’s why we’re seeing so much of him.

Last night I looked at the stock Yared is teasing as the “next Visa” these days — it’s one that will be familiar to most of you, so click here if you want to go catch up before we get started on these “next Googles.”

Back with us? Fabulous. Moving on.

Yared tells us that there are three more “Game Changing” stocks out there that have rapid growth and are changing the way business is done. And he gives us some scant clues about the three. The full details, I imagine, will be readily disclosed to you if you’d like to pony up for a subscription to his service.

I wonder if there’s one consultant out there who comes up with all these names? GameChangers, ChangeWave, Rule Breakers, Quantum Confidential, Green Chip, HotSheet, Money Map, Orbus, Red Zone, Wavestrength. Man, you can just feel the excitement from those, huh?

I don’t have a point there, I just like all the names. Not as good as Stock Gumshoe, of course, but we can’t all be perfect.

So, the three Googles.

Number one:

“*** THE FIRST is the company that’s totally changing the rules on the fastest-growing cancer in the U.S.-skin cancer. I guess if you are over 50, or a woman, you know the risks of melanoma. You know you should get these suspicious pigments on your hand biopsied. And you know that surviving this is all about early detection. So here’s a device-it looks like your TV remote-that is simply held over a lesion and scans it. No biopsy. No blood. And total accuracy, instantly. Right in your doctor’s office. Dermatologists are screaming, of course, but their tests are only 28% accurate, so they’re out of the game here.”

Well, dang it all if that ain’t the next Visa, too! This is MELA again — that “next Visa” that I talked about last time I wrote to you. If a stock were both the next Visa and the next Google, would you want to rush to buy it? Would you guess that a company could be a “next Google” and a “next Visa” and use the “razor and blade” business model, all at the same time? Or is that using too many tools from the copywriter’s toolbox?

It’s OK, you don’t have to answer right now. We’ll move on, MELA has been talked to death.

“*** SECOND is the Wall Street broker that has changed the game for millions of citizens across the globe, making billions available to only ordinary people, not to politicians. The company is absurdly cheap in the wake of the credit crunch-and it’s ready to deliver a massive earnings explosion, too, and that alone is going to double the stock price!”

Huh? OK, this is not going to cut it for the Gumshoe. You have to give me some clues, people!

I have no idea what this one is — from the description, it could be almost any brokerage firm or investment bank. My best guess, since this is a growth-happy guy we’re talking about here in Georges Yared, is that he’s probably talking about Goldman Sachs (GS).

Oh, you’ve already heard of it, huh? Sorry! Goldman is indeed incredibly cheap on earnings, but it almost always has been. I’m still quite nervous about all the big investment banks, there’s too much that I don’t understand about them …

GS releases earnings in mid-June. I have no idea what he means by “making billions available to only ordinary people” — feel free to throw in a guess if you want.

One other possibility is that this could possibly be one of the retail brokers, of which the two that I’d guess would most closely fit his criteria would be Interactive Brokers (IBKR) or TD Ameritrade (AMTD), both of which are inexpensive and projected to grow nicely in the coming years, and both of which have at least some international exposure. I can’t imagine he’s picking Etrade here, that seems a bit too daring.

Personally, I’d be much more inclined to invest in an asset manager, which I’m almost certain will be a good growth business, but I’m clearly just guessing here … so we’ll move on.

“*** AND THIRD, the bank CEO who took a leaf out of old man John Pierpoint Morgan’s playbook in the 1907 Bank Panic. This genius is now ready to emerge from this current crisis as the Iron Man of U.S. Finance! Warren Buffett is the only other investor who could have pulled this off.”

Again, not a terribly specific clue in terms of the company — but this appears to be yet another push forward in the development of a cult of personality for Jamie Dimon, CEO of JP Morgan Chase. He is a bank CEO, he happens to have that connection to JP Morgan (the person, as well as the bank). And he did play a big role in the current crisis, thanks to his Federal Reserve-funded bailout of Bear Stearns. Or fire sale, depending on which side of that issue you come down on.

And it was said by many that Berkshire Hathaway was the only other major financial institution with the cash and reputation to buy Bear Stearns and assume their liabilities. Warren Buffett, you might remember, was involved with the rescue of Salomon Brothers — a rescue that some believe “saved” the financial system from a collapse, much as the purchase of Bear Stearns reportedly did. Buffett, by the way, actually ran Salomon brothers for almost a year before selling the firm to Sandy Weill, who wrapped it into Travelers Group and later into Citigroup. The division for a while was called Salomon Smith Barney, but I don’t think the name even exists anymore. I don’t know if buying Salomon Brothers was an important impetus for Citigroup, though Citi’s later foundering is always out there as a cautionary tale for large banks about how easy it is to overexpand and lose track of what you’re doing, especially when nasty outside factors come to call.

Regardless, Jamie Dimon is almost universally touted as the capo di tutti capi of US banking right now — the only guy who steered a large US bank through this crisis (so far) without making things much worse along the way, and a man who enforces much stricter risk controls than some of his competitors (remember that they are a big bank, not just a brokerage firm, so their numbers and risk control policies should be dramatically different from Merrill Lynch and Goldman Sachs).

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I have nothing bad to say about him, and JP Morgan Chase has a decent yield, and by all accounts they’re in good financial shape. They might even have a real head start when things turn around for the titans of Wall Street because of all the good people and business they inherited from Bear Stearns, and they trade at what would have been a cheap valuation a couple years ago (PE of 11 no longer looks dirt cheap for a big bank, unfortunately, but it’s hard to call it unreasonable given JPMs position).

I don’t know that I’d call JP Morgan Chase or Jamie Dimon a “GameChanger” … but if you have to own a bank (I don’t feel that need, personally), they certainly are less hairy than many of the others, and they make me a little less fearful. There’s a ringing endorsement, eh?

full disclosure: I do own shares of Berkshire Hathaway, but not of any other firm or investment mentioned above.


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