Next Meeting of the Scarlet Kings

Greetings to All,

The next meeting of the Scarlet Kings will be held on

Sunday, January 2nd, 2011 at 12:30PM.

Location: Chili's (4500 Belt Line Road, Addison, TX)

Please join us for a fruitful and lucrative discussion!

Very Sincerely,

VJ

Meeting Minutes

We had an insightful and philosophical meeting today at Romano’s Macaroni Grill! We had a total of 4 attendees: (from left to right) VJ Arjan, Kevin Day, Jeff Harrington, and Andrew Whatley.

As the year 2010 comes to a close and we sit and count our profits for this year like the last, we all remarked how we have grown not only financially, but personally as well.

Europe Back in Trouble Again

Ireland was recently fronted $89 billion from the United Kingdom to quell the fears of major defaulting of its debt portfolio. VJ Arjan remarked how during the Ireland bailout, the Spanish Prime Minister Jose Zapatero exclaimed that there was “absolutely no chance” that Spain would seek another bailout from the EU, which indicated to all of us that Spain will definitely need one. And if Spain will need additional bailout funds, Kevin Day indicated, then so will the other members of the PIIGS.

On another note, the U.K. is finally starting to initiate some austerity measures with the ascension of Conservative Party member David Cameron. Germany is doing this as well and encouraging the other members of the EU to do the same. Kevin feels that the U.S. will eventually adopt these types of measures also, as the American people are becoming less and less tolerant of additional deficit spending.

Jeff Harrington posed that one potential way creating this type of austerity measure would be to increase the gasoline tax from 15 cents per barrel to 30 cents. Given that crude oil prices are continuing their upward trend, this 15 cents could very rapidly add to our government’s coffers.

Wikileaks

Julian Assange, former Australian and current head of the WikiLeaks organization was the topic of debate. By releasing hundreds of thousands of documents revealing the inner workings of the U.S. and other world governments, is he doing his best to fulfill a needed civic duty or is he abusing the right to free speech by endangering armed forces and informants throughout the world?

We did not think that one would be justified in engaging in a completely unrestricted right to free speech. Kevin Day said, for instance, it is within one’s right to yell the word “Fire!” in a crowded theater but is morally reprehensible at best and even criminal at worst to do so. This wouldn’t be the case, however, if one expresses his or her right to speak freely and it does not affect anyone else directly. It is only when one exercises one’s right to free speech and this affects the livelihood of other individuals that there would be a problem.

Part of his motivation, we believe, may have been to reveal the politicking that occurs behind the scenes to the public at large. We found out, for instance, that Saudi Arabia has been secretly encouraging the U.S. to invade Iran and Lebanon to destroy the threats of the Ahmedinajad and Hezbollah regimes, respectively. We also know that North Korea curries virtually no backing from China who is anxious to get rid of a possible nuclear threat.

The January Effect and the Start of a New Decade

The January Effect may have already started. Mutual funds are anxious to ride the market up to higher heights so as to make their year-to-date performances look better and the retail sales since Black Friday look very promising.

It is also interesting to note that many financial crises culminate at the end of a decade (70's - surging commodity prices; 80's - savings and loan; 90's - dot-com boom; 2000's - residential real estate bubble). If history has been any guide, then perhaps there will be a decade of prosperity ahead of us at least until the end of that decade. :-)

Economic Rebuilding

Kevin Day, who was a founding member and used to be chair of Reno’s Economic Development Room, visited Reno for one of their periodic meetings. The situation is certainly dismal.

· 40% of the homes are in foreclosure

· Unemployment is at 15%

· The main thoroughfare in Reno, Virginia Street, basically looks like a ghost town. Casinos after casino are shuttered, and restaurants are open 2 to 3 days in a week.

Kevin explained that the situation in Las Vegas must be far worse given the heightened real estate speculation there.

But despite these incredible challenges, the forum discussed possible future ventures that would be heavily invested in alternative energy technologies like geo-thermal, solar, and wind energies.

The Market

Kevin Day made some predictions as always about the market for the coming months. He believes that in the short-term, there may be profit-taking for those who are trying to take advantage of the current long-term capital gains tax as there is a threat that this could be increased to an ordinary income tax in the future. But the overall market trend should still be upwards until the end of Q1.

Crude oil, precious metals, agricultural commodities and emerging markets should all continue to rise. Retailers and regional banks should also continue to rise as they have been battered badly during the recession.

Unemployment, however, will continue to take time to decrease. In fact, during last month’s FOMC meeting, Mr. Bernanke stated that it could take up to 6 years for unemployment to decline to normal levels.

The Scarlet Kings Muse

In truth, the above only comprised a small portion of the meeting. Jeff Harrington kicked it off by setting the tone for a very philosophical meeting. I will try to elicit some of the poignant questions that arose during that conversation, which may serve all of us well to remember.

Of the many things mental characteristics that we have learned to emulate is would be how successful and wealthy individuals think. As Zig Ziglar says, the reason why some people succeed and some fail is because of the thing between your ears, your mind.

But to repeat positive self-talk alone will not assure success in itself.

If one tries to remain upbeat although one is basically a negative person, the person will not change and fundamentally will remain a negative person. To draw an analogy, the positive thoughts could be similar to a banana peel. No matter how hard the peel tries to change the banana itself, it cannot do so.

What is required, we discussed, was an internal change of how one views oneself. (*Herein, we believe lies the secret of all achievement and success.) There is a perennial saying that has been repeated throughout many cultures all over the world over the centuries which can sum this up: “Know Thyself.” The reason why some of the most powerful movers and shakers of the world would have little use for positive thoughts is because their very self serves as the rock and foundation for their being. This requires complete honesty and an ability to accept oneself as he or she is.

Ask yourself, when I look at myself in the mirror, do I like and admire the person that I see? This is how the inner self is changed.

Asking this question can also mean that I see myself as a human being that has flaws and the ability to make mistakes: that I am not perfect, but that this is okay. Nobody is perfect and to make mistakes is a part of life and our very being. To embrace this aspect of ourselves then is a very important part of “Know Thyself.”

Those who have held themselves accountable to the lens of perfection could be uncomfortable about who they are and may be afraid to make mistakes. It may be prudent to remember a quote from Thomas Watson Jr. the president of IBM who made this company into the industrial titan it is today:

“It’s quite simple, really. Double your rate of failure. You’re thinking of failure as the enemy of success, but it isn’t at all.”

The next meeting will be on Sunday, January 3rd, 2011. For those who have not attended a meeting, but would like to attend, please email your wish to VJ Arjan at scarletkings@gmail.com