Making Big Bucks...

Thom Calandra: Making the big bucks

Vator.tv formula is easy, silly: Follow the ideas

By Thom Calandra

TIBURON, Calif. -- There are only seven people in the world of airline queues and hotel lobbies who will listen to a truly new idea, maybe eight on a good day.

I like to look at "the market," the market for new ideas, as one for innovation and not for CUSIP-branded paper that deadlines at 4 p.m. Eastern. That market, the one for stories, takes place each day in the stock market, and right now, the floors of the various exchanges around the world are distorted as all heck. I mean, if you are an investor into small companies with big ideas, you are getting trashed, down 30 percent, 40 percent in the past six weeks alone.

The market of stories, AKA the stock market, is going through an almost invisible belt-tightening, and it is practically squeezing the life out of anyone, like myself, who believes in tiny companies with heady plans but small balance sheets. For those looking to double or triple the value of their holdings in a year or less, today, tomorrow, the next day are the best windows I’ve seen in many years for diving in, if you believe in the ‘ideas’ that mark a potentially great small company.

So yes, I’m back, putting on the hat of investment guru after my fall from, what, fall from space/fall from face, but I’m not dispensing specific tips in this piece. (Let me consult my attorney on that one! As you probably know, I settled my legal case with the SEC almost four years ago and paid a pretty dime, too.) Instead, here is what is compelling about what is going on today in "the market," the market for innovation. Most of these insights come from keeping in touch with Vator.tv, a gathering place for smart cookies, and a privately held company in which we, as in ‘the family and I,’ own a small stake:

-- News Corp. will squander its most valuable part of Dow Jones, its online properties, in particular MarketWatch.com, unless it turns its financial broadcast properties into one seamless, entirely interactive and online media experience for investors.

-- Citizen journalism, community journalism, whatever you want to call it, is a crock, sorry folks. Is it better than what 90 percent of the established media report to us as news? Sure, some of it is. But most of the new media reporting, like the old media reporting, is old news. Refried beans. Fishwrap. You’re better off reading the obits once a week than you are reading what the big papers and networks, and the Internet, tell us are NEWS.

-- The prices of gold, platinum and copper, among other commodities, will double in the next year, and double again within three years.

-- Avian flu will become a pandemic at some point in the next 18 months. I'm sorry about that, but there it is. In some parts of the world, bird flu will become easily communicable among humans.

-- Very little has changed since the peak of the Melt UP, a phrase I used often in my old days of dispensing investment ideas. We are still melting UP in some areas, most notably petroleum prices, lumber, metals and personally, my landscaping and teeth-cleaning fees.

-- Investors still cannot reach their stock brokers on the phone. Most Americans do not know how to buy a pure commodity. Or a bond. Most Euopeans and Asians do. Most Americans are still still paying too much in fees to undeserving financial managers.

-- Most of us have no idea when a stock is too expensive and when it is too cheap. Avian flu developers and pandemic-related life science companies are dirt cheap right now.

-- There is no such thing as smart money. There is only long-term money and short-term money. Find the folks who are willing to back an investment for five years, or more, and you'll find the closest thing to smart money.

-- Penny stocks -- as in developing companies that trade for $50 million of market capitalzation and less -- are the most likely way to earn enough to pay state and federal taxes, book a return worthy of a venture capitalist, fund your next generation's inheritance and retire to Tahiti. Also the most risky way. Just do your homework, which is something very few American investors, like their children in school I guess, want to do each evening.

-- Angel investing will create and destroy trillions of dollars of wealth in the next several years, rewarding those who do their homework and punishing those that do not. For example, Web 2.0 is a scam. There is no Web 2.0 or 3.0. It is all seat of the pants. The lap toppers creating successful next-generation technology and media companies are the same people who spawned Internet companies in the mid-1990s. They are flying by the seat of their pants, mashing up ideas that traditionally did not and might still not go together. Maybe one in four of the new breed will make money, and perhaps one in 10 will dominate their market segment.

-- Right now, I own three 'angel' investments, me and my family that is. We own tiny stakes in music and video mash-up FlipTrack.com, in angel networking channel Vator.TV and in Robert M. Friedland's nickel, platinum and gold mining interests in Africa. They are privately held. The good news is they are not liquid, so we are stuck, and the price is fixed, so no up and down in the old portfolio. The bad news is that they are not liquid.

-- Falling interest rates very well could spark another real estate boom in cities around the world, but not until the commercial real estate market gets whacked. Way too many inflated office and warehouse properties are still out there, financed by 'iffy' boutique lenders.

-- Consumers want the best products at the cheapest prices, and workers want the best wages for the least work. Except if the worker lives in China or someplace like China. That is why China is winning. Guatemala looks pretty good from here.

-- The torpedoed U.S. dollar is a very good thing. It means the world's fiscal systems are working as they were designed to. The dollar, by the way, will keep falling as long as oil keeps rising. T. Boone, he was right.

-- Most Americans have no idea the Canadian dollar is worth more than the U.S. dollar for the first time in half a century or so. Most Canadians do. The next time I see a CD that says U.S. price $19.99 and Canada price $22.99, I am going to fling it like a Frisbee back into the Starbucks it came from.

-- The media, not just the financial media but all media, are not doing their primary job, the one we all learned in J-school: report news, as in new stuff, new ideas, new events, new people. It's a crime really that most of the media, even new media, report old news and views. The pack mirrors what the human race is all about: very few of us are cool enough, smart enough, brave enough, to be out in front, leading the parade.

-- Jeff Skilling and others do not deserve the sentences they got for white collar crime. The sentences are twice and three times as harsh as any sensible federal guideline for incarceration should be. Tell me the country that locks up its smartest wealth producers for the rest of their lives and I will show you either a dictatorship or a very stupid country.

-- Most CEOs are not crooks. But nearly all CEOs are the greediest human beings at their company. CFOs, too. That's why they get all the stock options, isn't it? In most cases, these executives deserve what they earn, including the headaches and the hemorrhoids.

-- Nearly all people will steal or break the rules when given the chance. All of us want to fly as close to the sun as we possibly can. Some of us get too close.

-- O.J. Simpson 's Las Vegas case should have been thrown out of court. (By the by, never ever use the modal “should have,” lest you be branded a heathen, a hypo-crit, a Luddite and a fool.)

-- Michelle Pfeiffer will be nominated for a best supporting actress Oscar for her part as an evil radio station manager in the new "Hairspray." Dang, the whole movie she be nominated for Oscars.

-- The 2008 Summer Olympics in Beijing will be a modern miracle, and the games will coincide with another leg up in the China miracle. If any nation or individual tries to mar the event, China will start WW III.

-- Nearly all professional investors talk their own book and are not the best sources of information about a company. Ditto for CEOs, and CFOs. And most but not all venture capitalists. One of the few honorable and reliable barometers of value in the market today is the private equity profession. They have to get it right. Another are hedge funds, but only those that do not talk about their investments and truly understand the leaders in their specialty investment areas, understand them well enough to have home telephone numbers and personal e-mail addresses. Everyone else, with the possible exception of one or two very perceptive newsletter writers, is full of beeswax.

-- In the four years I have gone missing (writing my novel Pablo By Numbers and developing ThomCalandra.com), very little has changed in the market for innovation. Vator.TV is one of those changes for the good: an airport queue for folks looking for other folks with new ideas. Follow the ideas and you’ll make the big bucks.

-- I do not believe in quantitative tools or stock charts for measuring potential stock market success, regardless of what that talented actor Mr. Josh Brolin says about market probability. Still, at the present time, who knows, maybe I could use a quant revision? I/we own several stocks that are quickly becoming vanishing acts and soon will marquee at the circus, with the clowns, that's how invisible and laughable they are looking. So what do I know?

-- Finally, there are more hidden gems in the stock market and in the market for innovation today than in the fattest pipe of kimberlite a geologist can find in South America. There are hundreds and hundreds of life science and technology companies, for instance, that are selling for pennies that should be selling for quarters. A handful of energy companies as well. Find out who the buyers are today, and talk to them. I'm one of them, and so far I am dead-in-the-water WRONG. I am a buyer of avian flu, of energy management companies and of cancer diagnostic and stroke treatment developers. They are all dirt cheap. They are all doing good deeds for their industries and their social circles, with the exception of making money. I paid more for their shares than they are selling for now. I do not mind a single bit. In fact, I welcome the destruction of wealth in these "names." It means I can buy more at cheaper prices.

So doc, this is supposed to make me feel better? Jimi said, Angel came down from heaven yesterday/Stayed here just long enough to rescue me. Harpo said, Honk honk.

-- Thom Calandra in Tiburon

About the Author

Thom Calandra was a co-founder and a columnist and broadcaster at CBS MarketWatch. now Dow Jones MarketWatch. He resigned in 2004 after failing to disclose the selling of stocks he was recommending in his investment newsletter, The Calandra Report. Thom settled his case with the commission one year later. Thom and his family live in Marin County, California, near Richardson Bay. Thom can be reached easily at thom.calandra@gmail.com and at ThomCalandra.com. He presently is an investor in Bambi Francisco’s Vator.tv, a video venue for innovators and their angel backers.