Meeting Minutes

We had a wonderful meeting today in the outdoors at The Saffron House! We had a total of 7 attendees: (from left to right) Tommy Schultz, Andrew Whatley, Earl Landry, VJ Arjan, and Kevin Day. We also had Jeff Harrington and Jack Gammon join us briefly later on.

Congratulations to Andrew Whatley!

After successfully passing the Bar examination on his second attempt, our own Scarlet King, Andrew Whatley, is now a full-blown lawyer! The Bar is an incredibly difficult test consisting of 5 three-hour sessions and we are all thrilled that he passed it.

Also, due to his generosity and dramatic increase in his income, we would like everyone who reads our blog to know that he will be paying for all meals for each attendee from here on out!

(Just kidding of course, but congratulations nonetheless.)

Mid-term elections

We discussed the landslide winnings for the Republican party which led to their majority in the House and a significant blow to the Democrats in the Senate. It will be interesting to see what happens in our political environment now given that President Obama will be forced to work with the Republicans as opposed to sidelining them.

Kevin Day, however, predicts that given that President Obama has a conviction to push his Socialist agenda, there will be very little that can or will be accomplished as bipartisanship will be even more divisive.

News around the world

There were several key events that took place:

Europe

France erupted recently when due to austerity measures President Sarkozy was forced to put through legislation that would increase the retirement age from 60 to 62. VJ Arjan was explaining how this clearly shows that the people of particularlyWestern Europe have embodied the entitlement mentality and that there will be some very hard lessons to learn in the future. Mr. Sarkozy has one of the lowest historical ratings for a French President at 26%. Kevin Day stipulated how this retirement age could be further pushed back to 65 also given the incredible budget deficits France is currently running.

At least, however, he is able to initiate some policies to comply with Mrs. Merkel’s “tax and axe” measures. Greece is getting enormous pressure from the European Union to do the same but is finding this task much more difficult. In fact, they are schedule to run deficits of at least 10 percent of GDP in 2010.

China and Australia

In a surprise move, both China and Australia’s Central Banks raised their benchmark interest rates. Although the consumer confidence in both countries are still very low, it is helpful to remember that the unemployment rates in these countries is relatively low, around 5-6% compared to 10% in the U.S. and upward of 15% in Europe.

Robo-foreclosures

Earl Landry and Andrew Whatley were discussing the future of the so-called robo-foreclosures. Due to the record number of foreclosures throughout the country, there have been several thousands of loans that may have been wrongfully foreclosed upon due to shoddy processes and mishandled paperwork. Andrew continued to explain that due to the volume, it is extremely difficult for managers to review each and every case and this has led to some expedited processing.

They do not see this turning into an avalanche of lawsuits, however, and feel that there are periodically newer and better processes being released to deal with these situations. Although for the moment, there will be issues, these are slowly but surely being resolved.

Precious Metals, Emerging Markets, and Agriculture

Kevin Day has been calling these three sectors for months now and finally all three have been exploding particularly silver for precious metals and sugar, corn, and wheat for agriculture. Kevin also feels confident that the market run should continue at least until the first quarter of next year. Below are some charts of these plays:

SGG - Sugar Futures ETF

HL - Silver Miner

VWO - Emerging Markets ETF

Potential Market Plays

Kevin Day was discussing some potential market plays that would be prudent to take advantage of currently:

• F (Ford)
• CHN (The China Fund)
• TWN (The Taiwan Fund)
• GDXJ (Junior Gold Miners)

’30-40-30’

Kevin Day suggests entering a position on a given stock by breaking the amount into 3 segments which he calls ’30-40-30’. One enters 30% of the total amount one wants to invest at one price, then 40%, and then the remaining 30%. In this way, one tries not to pick a bottom or top and instead gets an average.

The Future of India

As someone who has an inside view of the Indian culture and psyche, VJ Arjan explained what he sees are some of the potential opportunities and also some overwhelming stumbling blocks in its future.

The Indian people are some of the smartest, hardest working individuals on the planet. They are well-educated in the subjects of mathematics and science and have the ability to be workaholics.

However, the challenges far undermine the potential. Although they are a competitive people, the competition reaches the levels of pettiness such that even among siblings and friends there is competition to be better, to receive higher marks, or to make more money, etc. There are literally mass student suicides right around examination time and particularly in cities as families expect the best from their children and also to be able to represent the highest social status to others in their clique.

Unfortunately, there is still, even in the cities, evidence of caste discrimination. There is also the feeling of great pride and a belief in the superiority of the Indian race.

All these factors, which are rooted deeply within the Indian culture will become major challenges that will confront India as they decide to play a larger and more potent role on the world stage.

The next meeting will be on Sunday, December 5^th, 2010. For those who have not attended a meeting, but would like to attend, please email your wish to VJ Arjan at scarletkings@gmail.com