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TheACTUALSTUFF

Winning Investments for the Little Guy

J A M E S S K I N N E RM A R K V I C T O R H A N S E N

R O I C E K R U E G E R

© 2007, James Skinner, Mark Victor Hansen, and Roice Krueger, All rights reserved. 1

Ideas That Can Change Your Life™ in Wealth

The Actual Stuff Winning Investments for the Little Guy

James Skinner, Mark Victor Hansen, and Roice Krueger

No matter how small your investment resources

may be, this book shows you how to level the

playing field and make money right along with the

big players in the market!

___________________________________________



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The Authors: JAMES SKINNER is the founder of two global financial

groups that manage billions of dollars of assets. He is

also recognized as one of the world’s foremost business

thinkers and appears regularly on Japanese television.

MARK VICTOR HANSEN is the co-creator of the Chicken

Soup for the Soul empire and is the best-selling nonfiction

author of all time. His goal is to make the planet work

for all humanity!

ROICE KRUEGER co-founded Franklin Covey, the

world’s largest training company, and has supervised

consulting projects for 80 percent of the Fortune 500.

NOTE: Ideas That Can Change Your Life™ is a

collaboration of three of the world’s most amazing

authors, speakers, and thinkers. The first person “I” may

refer to any of the authors.



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A Rabbit in the Jungle

As I go around the world, I have a lot of people come

up to me and say, “I only have $300, how do I start

investing?” Or, “I only have $2000, how do I start

investing?” Or, “I only have $20,000, how do I start

investing?”

It is a very difficult and challenging question because

the small investor in the financial world is often times

viewed as a rabbit in the jungle.

I want you to get this image squarely in your mind, a

rabbit in the jungle.

There are many lions, tigers, leopards, hyenas, and

other financial professionals who hunt rabbits. I wish

this wasn’t the case but it is. However, the best people

in the financial industry are not rabbit hunters. They just

don’t have anything to do with rabbits to begin with.

Does that make sense?



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You see a rabbit is not a big enough meal for them.

On the other hand for a jackal, rabbits make pretty good

eating.

I remember the first time I went to South Africa and

I saw a jack rabbit, standing about two feet tall, out on

the savannah. It was the most remarkable animal I had

ever seen. I started thinking about what it must be like

as a rabbit waking up in the morning on the savannah.

Not a pleasant thought.

I then understood where the sad rabbit’s eyes came

from. It is a difficult environment to work in.

For the people who are highly skilled in managing

money for others, you’re just not a very attractive meal.

So it is a challenge, because many of the

opportunities that are available to the ultra-wealthy

cannot even legally be sold to you.

A sophisticated investor in most jurisdictions is

somebody with over a million dollars in net equity. That



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is the case in most jurisdictions, but can very a little

from place to place.

Most of the best investments can only be sold to

sophisticated investors.

The interesting thing about this entire framework is

that it is set up to protect the small investor. However, it

has the opposite effect, making it impossible for the

small investor to buy many investments that would

benefit them.

We can whine all we want, but it doesn’t change the

reality or the fact that those investments are not

available to the small investor.

There are many people out there who will try and

take your small investor money and then charge you

extremely high commissions to make a profit off of you.

In the end you are still left with the question, what

do I actually do? How many have, at some point in their

life up to this point, or currently, had this dilemma?



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You’ve been a small fish in a big pond and you don’t

know where to get started. So we have decided that it

would be to your biggest advantage to prescribe what

you do, because what we have been describing is actually

your situation. I think most of us, at one time or

another, have been there.

Equal Playing Field

If you are a rabbit in the jungle, what you need is an

equal playing field.

However, keep in mind there are many playing fields

that are not equal.

For example, is the private equity playing field equal

for all players? Not a chance.

The best deals in the private equity field you have

most likely never even seen, or have never been told

about them.

Why?



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Because they have been completely over subscribed,

and completed by that person’s inner network before

they ever had a chance to go anywhere else.

We started looking at where the small investor could

get a fair shake. The first thing I want you to remember

is that there are not a lot of level playing fields. It

doesn’t mean, however, that there are not any. There is

hope, if you very carefully choose playing fields when

you are a rabbit in the jungle.

Your goal is to avoid any attacks by your predators.

You want to have a chance at winning the game. Not

only would you like to have a chance, but you would like

to have a really good chance of winning the game. As a

small rabbit in the jungle, the amount of money that you

have to invest needs to get you a pretty good return if it

is going to really mean anything in terms of changing

your life.

In order to help you with your win we are going to

give you the keys that you need to successfully invest at

any level.



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Buy the Underlying Assets

The key distinction, or the most level playing field, for

the small investor is to buy the underlying assets.

You don’t have to know what it means right now.

The underlying assets equal actual “Stuff.”

Let me explain to you what I mean by that.

If you look at the financial world today and the

millions, billions, and trillions of dollars that are being

invested, the fact of the matter is, that there is not

enough places to put all the money that we have.

We have more money than we have actual stuff.

Interesting thought, right?

You might have some actual stuff down here at the

bottom, so what could that be? That could be stocks,

for example, or it could be some bonds. And what else



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could that translate into? That could be some

commodities, or real estate.

Actual stuff!

The stock is the ownership of the actual company.

The bonds are the money that the company actually

owes to someone, or the government actually owes to

someone. So that creates actual debt that somebody has

a responsibility to pay back. The commodities are actual

things.

Now there are all kinds of commodities. You can

buy things like pork bellies, which leads into a great

story I cannot resist sharing.

My mother was a secretary for 50 years. She had a

book on how to get through to the chief executive of

another company that someone had given to her for

Christmas. One day while I was flipping through it,

there was this really great idea. It suggested you call up

the other person’s secretary and you say, “I am from the

commodities exchange, and we have 1000 pounds of



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pork bellies for delivery. We are here in front of his

house and we would like to know where to put them.”

This was an automatic guarantee to get the boss on the

phone instantly. Unfortunately I don’t remember the

title of the book.

Other commodities are silver, gold, platinum, or any

kind of precious metals, which are used in industry for

various purposes. It could be cotton, coffee beans, corn,

wheat, anything at all that will spark someone’s interests.

Again, we are referring to actual stuff.

Real estate, when you come down to it, is the

ground between four posts that mark out where a

certain amount of land is.

My first job was a surveyor on a land surveying crew

where we actually had to put the posts in the ground.

Wherever we put the posts, or stakes as we called them,

determined how big the piece of land was. There is a

really fun story about this same topic in the U.S. which

involved the law.



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There was a piece of property, and the deed for the

property stated it was all the land in between four stakes.

Along came a landslide and the entire piece of property

slid down into the national forest. The national forest

sought an eviction notice to get this guy to move his

house out of the national forest. He pulled out the deed

that stated his land was anywhere between the four

stakes and the relative position of the four stakes hadn’t

moved; his house was still between the post!

Real estate refers to the ground and it is usually stays

put.

We like to think wherever the four corners are going

all the way down to the center of the earth and also

overhead—although there are certain rights you don’t

have so that airplanes can fly over you, for example.

This is actually a very important concept, so people

can’t buy the two properties next to you and then build

above you. It is very important that you own the space



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up there. If somebody has all of a sudden built over

your house, you have no sunlight.

Now the financial community, because there’s not

enough places (actual stuff) to put all our money into,

has become very good at putting wrappers around

these things.

For example instead of buying stocks, we can wrap

those stocks into various kinds of funds.

Or we can write options and other complicated

derivatives that have their value tied to the price of the

stocks, but which are more volatile and unlike the stocks

themselves have deadlines on them at which time they

can expire worthless.

You can have a unit trust, leveraged by a bank,

wrapped around a fund, wrapped around a derivative…

At the end of the spectrum, we have what we call

toxic waste, meaning that if you invest your money in

this stuff, you are never getting your money back.



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So the closer you are to the actual stuff, the more

level the playing field is. I am going to make it as simple

as possible.

Any wrapper that we put on top of the actual stuff,

you are going to have to pay someone for wrapping it.

If I put your stuff in to a fund, then the fund

manager is going to want a piece of your profit. He is

going to want to live well most likely in New York,

London, or Tokyo. These aren’t cheap places to live. He

is going to want to live it up which means he will want

to have a flashy car and a flashy suit with half a dozen

flashy watches, while attending all the hot spots in the

city.

This will, again, be accomplished by using the

commission that he charges you for managing your

money. And if you are a small rabbit, they are going to

charge you a really chunky commission, and guess what,

that is really going to affect performance at the end of

the day.



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So may I point out again, the closer that you are to

the actual stuff, the more level the playing field.

You can open a stock trading account and you can

buy the stocks at the same price that these guys do.

When you buy a publicly traded stock and Warren

Buffet buys a publicly traded stock, who ends up paying

more? Warren Buffet! As soon as word gets out that

Warren Buffet is buying certain stock everybody else

starts buying it causing the price to go up. Mr. Buffet

has to buy a lot of stock for it to matter to him. So he

too drives the price up.

Believe it or not but you can actually buy it cheaper

than he can!

Is that a cool idea?

A hedge fund manager, who is a big player with a

couple billion dollars under management, walks up and

starts buying stock, and everybody is looking across the

trading floor saying. “Dang! I wonder what he knows?”



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There are playing fields where the rabbit actually has

a little bit of an advantage. Your couple of thousand

dollars won’t move the market one way or another.

This means you have a very level playing field.

When you go to buy a treasury bond or a Japanese

government bonds (JGBs), or you go to buy some Euro

Bonds, what price do you get? The one single price!

When you go to buy commodities, you can purchase

at the current quoted price.

When you buy real estate you also have a fairly level

playing field. There is a seller who wants to sell some

property at a certain price. In most jurisdictions if you

actually offer the price that they are asking, they have to

accept.

Did you know that in the US if you try and choose

your buyers you go to jail because you can get sued for

discrimination?



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This could lead to the loss of your real estate

broker’s license, and they could put your real estate

broker in jail along with the seller. In the meantime you

end up owning the house!

So if they have an asking price and you match that

offer price, it is a contract. Or alternatively you can

negotiate a lower price and better terms than the original

offer.

Most likely you are not going to get as good of an

interest rate as the big guys because they have a better

credit rating. That is why I say you have a pretty level

playing field. There will be a little bit of a difference in

the interest rate that you have to pay the bank in order

to borrow the money.

So where do you want to be if you are a small

player?



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You want to be as close to the actual stuff as you

can be, because that is where the playing field for the

average guy is the most level.

Use Your Broker Ragged

You need to run your broker ragged. My broker is going

to close my account and fire me as soon as he hears this.

He is your information bag carrier. Whenever you want

information you go to your broker.

I can ask my broker to give me a list of all of the

companies that are currently selling LCD screens, and

have them ranked in the order from the highest

percentage of sales down to the lowest.

I think LCD screens are taking off and I might be

interested in investing in a company that sells LCD

screens. If it is a very big company and only 1% of their

total revenue is from selling LCD screens I may not be

quick to invest. I’m most likely looking for a company

with a big percentage of their sales in LCD’s because I

want to see the stock move.



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Do you want to have to look around for that kind of

stuff all day long?

No!

So take advantage of having your own broker. Make

your broker your one stop shop for information. They

will do all sorts of stuff for you, even if you are a pretty

small fish.

Don’t ask me why they do it because I don’t know

the answer. I just know that they will do a lot for you. It

is really cool to know. Plus, they have wonderful tools

for accessing that information, tools that you would

have a difficult time to getting your hands on. They can

do things quickly and efficiently for both small and large

investors.

What Moves Price?

When you buy the actual stuff, there are going to be

things that affect the price. You want the price to either

go up or down. It doesn’t really matter which one you

want, we will talk about that in a moment.



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You mainly want to know if the price is going to

move before you do any buying or selling. You also

need to be aware of what causes the price to move.

What moves the price of the stocks, however, is not

necessarily the same thing that moves the price of real

estate. They are related in certain ways, but they are not

the same.

Stocks

The thing that moves the price of stocks is news. I have

never seen that in a book, which astounds me. I think

we are actually going to be the first group of people to

write that down. I repeat, the thing that moves the price

of stocks is news.

You’ve got all these people stuck in front of the

terminal looking for news. And as soon as the news

comes out, the price of the stock moves. This then gets

factored into the market. For example, you wake up one

morning and there is an earthquake in Tokyo, and

Tokyo is wiped out. What is going to happen to the



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price of stocks in Tokyo? They are going down

extremely fast.

For example think about the recent news in

regarding the “melt down” in the sub prime market. The

sub prime market is made up of mortgages that have

been given to people with poor credit ratings. What

would happen if they all stopped paying their loans on

their houses? Their homes would be foreclosed, leaving

a whole bunch of houses on the market.

Who is going to get hit by this? The banks are

because they are not going to get paid their money back.

The property developers and construction companies

will also take the blow. If construction companies are

getting hurt, who else is getting hurt? What about raw

material suppliers? So while everyone else is dumping

the banks, and dumping the construction companies,

you are dumping the raw material suppliers.

You can get yourself ahead of the curve by getting

yourself two steps ahead of the news.



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Is that a cool idea?

You need to always be two steps ahead of the news.

I am going to put this in big, bold letters:

Ask yourself: What is the consequence of the

news? What is the consequence of the

consequence?

If there was an earthquake in Kobe, what stocks are

going to get killed? First of all, anybody that has their

head office in Kobe is going to be hit hard, immediately.

On the other hand, construction companies will benefit.

So what are you buying? You are looking for any

cement suppliers that don’t have their head office in the

Kobe area, but that have good access to distribute there!

You are two steps ahead of the news.

The great thing about stocks is you can know things

about stocks that the big boys don’t know. They work

late nights in offices in remote locations. That means



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there’s stuff that they don’t know, or haven’t noticed

yet.

Most of you have regular jobs working in regular

companies. Do any of you have a competitor that is

kicking your butt? Buy that stuff! If you were working at

Apple and you didn’t buy Microsoft you need your head

examined. You should have been the first to notice!

These are things you need to start noticing.

If you start to see a lot of people around you buying

Macs you might want to go, “Hmmm, something to

think about.” What’s happened to the market share

there? Why are people doing that?

Housewives often make great stock pickers because

they go down to the supermarket and they see what

people are buying. When you were a housewife and you

saw people lining up at that carrousel where they were

selling L’eggs stockings, back in the 70’s, you should

have bought the hell out of that thing.



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Peter Lynch went into companies, met the

executives, and then watched what his kids bought and

bought that stock.

It can be as simple as that.

Bonds

Let’s go to bonds. Bonds move in price based on

interest rates. So no we are going to get a little bit

complicated. It is time to expand your brain.

A $100 bond means that the company or bank that

issued the bond owes you how much? $100.

If this is a 5-year bond, for each year they are going

to pay you $5 of interest.

Every year they are going to give you 5% of the

money they borrowed, or $5 per year.

If the interest rate goes up and is now 6%, what

happens to the price of your bond?



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It drops, because if somebody was going to buy your

bond, they could buy a new bond for $100 and they

would get $6 a year.

Since your bond isn’t worth as much as this one

anymore, the price drops.

It is actually not very complicated.

Instead of buying your bond, they buy a new one,

unless you give them a discount.

You hear all this stuff about discounting now you

know what it means.

If the interest rates go up, the price of the bonds go

down.

Now if the interest rate goes down, from 6% to 4%,

what happens to the price of your bond? It goes up,

because now if they buy a new bond it is not worth as

much as yours.



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The price of the bond you bought will go up and

down based on interest rates. Now there is one other

thing that can affect the price—it is called default risk.

Default risk is the perceived risk in the market place

that the people who issued the bond will not pay back.

When Orange County officials bought some toxic

waste, because they thought they were sophisticated

investors, they discovered they were actually a rabbit it

the jungle. The toxic waste blew up, so they didn’t get

any of their money back. Orange County was basically

bankrupt.

So what happens to the price or the value of all the

bonds that Orange County has issued in the past? They

all went down, because you don’t know whether or not

you are going to get paid back.

If am thinking about buying a $100 bond from you

but I am not sure I am going to get my full $100 back, I

am going to require you to sell it to me at a discount.



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If you think interest rates are going to go up in the

future, what are you going to buy? You want bonds,

because if interest rates go up what happens to stocks?

They go down, because it is more difficult for

companies to borrow money for big projects.

Just remember if the interest rate goes up, the value

of the bond goes down and vise versa.

We are going to keep it very simple.

Commodities

Commodities prices fluctuate based on supply and

demand.

If a big, new source of gold is found what happens

to the price of gold? It goes down.

If a new use for gold is discovered that is beneficial

the price is going to go up.

The main thing you need to learn, when it comes to

commodities, is that most have very large players in the



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market who, for a very short amount of time, will drive

the price one way or another.

For example, who do you think controls the price of

cocoa? Nestle, Hershey’s and Meiji Seika in Japan. These

firms buy huge amounts of cocoa and if they decide that

the price is too high they will start dumping their own

supplies.

They decide that they can make more money selling

their cocoa then they can by selling their chocolate.

The whole economics department at my university

thought that they were smart, so they all invested in

cocoa. However, when all the manufacturers decided

that the price was too high, and dumped their reserves.

Everyone in the economics department went bankrupt

overnight.

After that my economics professor would say,

“Don’t talk about cocoa in this university, because

nobody wants to hear about it.”



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If the Russian government decides that they are

holding too much gold, they can dump enough into the

market to significantly change the price.

What about oil? Are there some players that can

have a major impact on this in a very short period of

time? The answer is clearly yes.

If the Saudi Arabian government decides that they

are going to pump more oil what happens to the price?

It will go down. What if they decide to cut production?

Or if there is a terrorist attack that takes out the Saudi

Arabian oil fields, what happens to the price of oil

instantly? It instantly goes UP!

You need to understand is that these prices are

affected by supply and demand, which is often affected

by large players in the market, or by particular events.

Whenever you get involved in commodities you

have what is called event risk. Event risk can be either

for you or against you.



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Has the war in Iraq driven up the price of oil?

Currently there is less stability in the region, which

affects everybody’s perceived sense of future supply.

It’s not all that complicated really. How much of

this stuff is going to be around in the future determines

how much is getting bought right now.

Real Estate

I want to switch gears for a minute to talk about what

drives the price of real estate.

The beautiful thing about real estate is that the cause

that drives the price of real estate is the single best-

known piece of data in the entire economic world. It is

100% available to you just like it is to any big player.

The thing that drives the price of real estate more

than anything else is called demographics.

Demographics, graph means measurement, demo

means population, thus demographics are measurements

that relate to the population.



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As a small rabbit in the jungle you want to know

your demographics.

For example, you can graph the population of your

country and community to show the number of people

of every age. How many 50 year olds? How many 49

year olds? And so forth.

Look at the graph: you see old people and young

people. You see the point where there are 20 year olds,

and another where there are 80 year olds.

If you look at the graph, you can immediately

predict what is going to happen to the population of

people entering university for the next 18 years.

For example, is this the time for you to start a

university in Japan? No!

The number of 18 year olds is going to decline every

year for the next 18 years!



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People who have not been born cannot buy your

product!

What do you think is going to happen to wedding

gowns for the next 20 years? Is this the business you

want to be in, yes or no?

It is very important that you know your

demographics.

What is going to happen to people retiring over the

next 20 years?

In Japan, for the next 20 years, there will be more

people reaching retirement age every single year!

If you are in business of selling products to people

who are just retiring, that is a good business to be in.

You are going to have more demand for at least the next

20 years.

How sure are you of the prediction?



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We know it with great certainty!

If we are in the business of running retirement

homes in Japan, are you interested?

The answer should clearly be affirmative based on

our demographics.

Demographics drive real estate.

Real estate is only scarce or abundant in relation to

the population. Where I grew up in the state of Oregon

the price of our home was a little over $20,000, most

likely because there were only 2 million people in the

state at that time. But suddenly all the people in

California were selling their homes, and they all moved

up to Oregon where the real estate was cheap and the

air was clean.

When you see this population surge moving into the

state of Oregon, does a little rabbit in the jungle want to

do? Buy some real estate!



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Our house was most recently appraised for

$291,000. Now when $20,000 becomes $291,000 dollars

and you are an investor is that a good thing? At this

point that should be an easy answer.

How many of those do you need to do to in order

to become a billionaire? Do the math. When your

money goes from $20,000 to $290,000 how many times

is that? 15 times.

If you start with just $1,000 and get a 15 times

return, you only have to do that six times to become a

billionaire!

Now you want to focus on where the population is

growing and where the population is declining because

you don’t want to be the one holding the bag when

everybody moves out of that mining town.

Look at towns where there used to be 50,000 or

100,000 people and now there are none. What do you

think happened to the price of real estate? It went

dramatically down.



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So if real estate is driven by the demographics, then

you need to know where the surge is in population, what

age groups is it affecting, and what kind of real estate it

is that they are going to want to purchase.

The key for the little guy who is buying the actual

stuff is to keep things very simple.

Most of you are running other jobs, other

businesses, and you’ve got other things going on. You

can’t make it to complicated. You are not going to be a

professional trader running 365 days, 24 hours a day, 7

days a week, just trying to keep up with the guy at the

next desk.

Long and Short

I want you to understand another key concept, which is

long and short. These are words that you must know if

you are going to be a successful investor.

To better explain this concept I want you to turn off

your brains for a moment. Don’t think too much.



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If we have something that we are going to invest in

and we think the price is going up, what do you do right

now? Buy, right?

You don’t even need to think about that because it

is instinct.

When you think the price is going up you buy now.

And you sell later. Don’t make this complicated.

If you think the price is going down, what are you

going to do? Sell. Don’t think. You are going to

complicate the whole thing more than it needs to be.

If you think the price is going down, it doesn’t

matter if you own the stuff or not, you can still sell it.

Now, of course, you are probably all asking how you

sell something that you don’t even own? The answer is

you borrow it.



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This gives rise to an ancient poem on Wall Street. It

says, “He who sells what isn’t his own, must buy it back

or go to prison.”

You eventually have to buy it back.

If you think the price of stock is going to go up,

what do you do? Buy now and sell later.

If you think the price is going down, what do you

do? Sell now and later on you buy.

You just call up your broker and tell him you want

to sell a thousand shares of Singapore Telecom, and

they’ll do it for you. Or you tell him you want to buy

200 shares of Microsoft then they’ll do it for you then

sell it later. If you then say you want to sell 400 shares of

Microsoft but you only bought 200 shares it doesn’t

matter, they will sell them for you.

Buying shares in the hope that the price will rise is

called having a long position.



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Borrowing shares through your broker and selling

them in the hope that the price will fall so you can buy

them back for less than you sold them for in the first

place is called having a short position.

Can you do this with things other than stocks? Yes.

Can you do it to real estate? Yes. But how do you sell

real estate that you don’t own?

Well, there are publicly traded real estate investment

trusts, or REITs.

You call up your broker and tell him you are looking

at the demographics of this particular area and you think

all the people are moving out so you want to short a real

estate investment trust that is heavily invested in this

area.

Have them find you a real estate investment trust

that is buying real estate exclusively in this area that you

can short.



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When you are starting out, I want you to simulate

before you put your hard earned shekels into the game.

This means doing some paper trading, which is

pretending that you have made the trade and are keeping

track of it without putting any money on the table.

For example, you might say, “I think Microsoft is

going this way because of the news, so I am going to

pretend that I bought Microsoft at whatever the price

is.” You then look up the price and keep a record: “I

bought x shares of Microsoft and I paid x for it.” Play

the game for a while on paper until you get used to it.

How much is it costing you? Nothing! That’s a good

thing.

So this is a game not only that you can win, but that

you can practice. Homework leads to good grades so

you want to do your homework to find out what is

happening to the price movers of whatever you are

thinking about buying.

Practice makes perfect!



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Keep an Investment Journal

Keep a journal and record every trade that you make.

You want to record when you made the trade and why

you made the trade.

You do this so that you remember everything even

when that trade is over. In other words, when you are

no longer in that short position, or in the long position,

you’ve either bought the stuff back, or sold the stuff

out.

Remember to write why you closed the position and

what you learned in the process.

It is very simple.

You want to learn from every transaction that you

ever engage in, and by doing so you will consistently

become a better investor over time. It is a very simple

habit.



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Most people don’t do it, but I would strongly

encourage you to do so.

Trade Less, Win More

I am going to really simplify all of this and bring it to a

close.

Trade less to win more.

One of the problems with trading a lot is every time

you trade your broker takes a commission. They love

people who trade every day. My friend Johnny made his

fortune by introducing people to securities companies

and getting them to be day traders. He gets back a

commission on every trade they ever make. He got so

many commissions that he was able to buy a hotel!

The commissions add up so you want to trade less.

I am a very honest investor as well as a pretty good

one, and I think Roice can vouch how many of my

recommendations over the years have been correct.



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I’m not often wrong when it comes to investing. It’s

amazing. And the reason is, I very seldom predict.

I make maybe one or two predictions a year.

Last year I predicted Apple would go up. Everyone I

knew was throwing away Windows. They had finally

become fed up with it. There were simple things like

taking too long to turn on. Apple computers, you see,

are much faster at this task. After that I saw a bunch of

people buying Apples and found it a bit interesting.

Then I logged onto the iTunes Store and within the first

hour I had spent $140. I knew I was not the only one

shopping there. My thought was that finally someone

created this program where people are able to download

music and actually pay for it, easily and efficiently.

It wasn’t rocket science. It was all so easy. They have

the program set up so that you never have to put in your

credit card number twice. Have any of you ever bought

music off of iTunes? You just click on the tune and it’s

yours. They’ve made it so easy to shop. You just log on

and buy, buy, buy!



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This improvement in technology, not to mention

popularity, is going to move the stock.

I called up Roice and said that Apple was going

somewhere. And the stock has doubled in six months.

Again, I don’t do this very often. I usually will spend a

year, maybe two, looking for something that is really

going somewhere. I told all my Singaporean friends to

buy their local real estate and anyone who was paying

attention has done pretty well with that one.

It’s really simple. It all goes back to the little rabbit

in the jungle.

I know a lot of people who work in the financial

industry and a lot of them live in Hong Kong. They all

started telling me they were moving to Singapore

because they could not stand the pollution anymore.

These are people with lots and lots of money. If they

are moving to Singapore then the high end of the

Singapore real estate is going to go up—because guess



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how much supply there will be? Not very much. And

guess what is going to happen to the demand? It’s going

up. I told them to go out and buy themselves some high

class bungalows, buy Ardmore Park, and all the high

class condos because guess what is going to be

happening? They are going up!

The demographics at the high end are taking off.

What has happened to the price of upper end real estate

in the past year? What percent increase are we talking

about: 40% in the last year!

The one last word of advice that I am going to give

you, the little guy, is never moan about the fish that got

away.

Never regret not making a trade.

Not making a trade means you still have your

money. That is always a good thing. There will always be

another wonderful investment opportunity out there

swimming around.



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Ever year there will be more and more wonderful

investment opportunities in the world, especially

because you now know how to go short.

Even if everything goes down you can make money.

You’ll find an investment opportunity in which you

are very confident, because you understand the price

movers and you are in tune with what is happening in

that field.

And that is how you win as a rabbit in the jungle.

With best wishes,

James Skinner, Mark Victor Hansen, Roice Krueger

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