Tycoon Research Weekly Market Advisory - Vol 1, Iss 8

Tycoon Research Weekly Advisory

December 23, 2004: Volume I, Issue VIII

Happy Holidays to You and Yours! Enjoy Your Day Off TOmorrow...
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IN THIS WEEK'S ISSUE:
1. WATCHIN THE WHEELS GO ROUND AND ROUND: Buyers of Treasury inflation-protected securities (TIPS) appear to be worrying moreabout inflation.

How rising prices can affect you both as an investor and a consumer.

--By Tycoon Research

2. ANOTHER BRICK IN THE WALL: Shareholders of both Merck and Pfizer have much bigger problems than just selling bad drugs.

And as always, all of the problems start at the top.

-- By the Tycoon Editorial Staff (that means more than 1 person)

**STOCKS MENTIONED THIS WEEK: Merck (SYM: MRK), Pfizer (SYM: PFE),Johnson & Johnson (SYM: JNJ), Hershey (SYM: HSY), Gilette (SYM: G)

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1. WATCHIN THE WHEELS GO ROUND AND ROUND: Buyers of Treasury inflation-protected securities (TIPS) appear to be worrying moreabout inflation.

How rising prices can affect you both as an investor and a consumer.

--By Tycoon Research

OK, NOW IT'S PERSONAL.

No, it wasn't the news that Producer Price Index (PPI) shot upan unexpected .5 percent in November.

I could've slept through that one.

Nor was it the news that prices of personal care products rose1.6 percent during the past three months.

Heck, what do I know about personal care products anyway?

Other than Gilette (SYM: G) razors, none of that other stuff ever did anything to make MY mug look more presentable.

And it certainly wasn't the news about the year-to-date increase in energy prices.

At this stage of the game I don't even bother asking the gas station attendant to take me out to dinner before they give itto me.

No, the news that pissed me off the most concerned a certain chocolate manufacturer located in Hershey, Pennsylvania.

The same chocolate manufacturer responsible for the tormenting binge/purge obsession I've carried with me since thedays of youth.

The very same chocolate manufacturer who Jack Lalane gets onhis knees and thanks every night before he goes to bed.

Yes, ladies and gentlemen, if you're still in denial, the name of the company in question is Hershey Foods (SYM: HSY)

What made it so personal for me was their announcement last week that they were raising prices by close to 6 percent.

6 percent!

That means that for every dollar I spend on chocolate I justgot slapped with a additional "tax" of 6 cents.

And for those vaguely familiar with the size of my waistline, that's a fair sized tax! Now do you know why it's so personal?

As a matter of fact, as soon as I hung up the phone with my tailor(who was kind enough to share the "good" news with me), I began todig through my economic notes.

Guess what I found out?

I found out that Hershey had every right to do what they did.

Why?

Because the Producer Price Index (PPI) has risen a whopping 5 percent during the past 12 months.

5 percent's a big number.

A 5 percent rise in producer prices means that it costs companieslike Hershey more money to make chocolate.

Think about that for a moment.

If you sell $100 worth of chocolate each day and it cost you $80 to do it, if you don't raise prices, your profit is going to automatically decline by $4 next year (5 percent of $80).

That means that your $20 in net profit turns into $16 before theyear even starts.

That's not good.

And if your profit declines by 20 percent then it's safe toassume that your stock is sure to follow.

That's why Hershey raised prices.

As a matter of fact, Hershey has such a powerful (read: addicting) product that they're able to raise prices above the rate of inflation.

They raised prices by almost 6 percent (5.8 percent to be exact).

That means that Hershey is getting to have its cake..., er, chocolateand eat it too.

You know why?

Using the example from above, Hershey is now sellingchocolate for $106 instead of $100 per day.

But the cost to make the chocolate has risen by only $4.

Therefore, Hershey, in all it's Willy Wonka glory, is actually pocketing an extra $2 per day.

When you sell billions of dollars of chocolate each year thatadds up.

But most companies don't have that luxury.

Think about it.

Some companies that you own sell $100 in products per day don't have pricing power at all.

They have to absorb the cost all by their lonesome.

Thus, their profits are bound to decline along with their stocks.

But you know what's even worse?

A company that is in an industry where prices are actually DECLINING.

So, instead of making $100 per day next year, they'll only sell theirproducts for $98 per day.

In addition, their costs have gone from $80 to $84.

What happens then?

They watch their profit decline from from $20 to $14.

You could guess what happens to their stocks as well.

For those of you reading this who haven't yet signed up for the Tycoon Report, this is your chance.

Why?

Because we own companies that can raise prices above the rate of inflation.

Companies that have pricing power.

Companies that have strong brand names.

Stocks that have outperformed the market in uncertain times.

And the best part is, that we're still giving you a no obligation free 30-day trial to see for yourself.

But that's not all.

If you act now, you'll get access to our December Issue,which will name the stocks we think have the best chance ofraising prices above the inflation rate in 2005.

Remember, you are what you read.

Visit here now to learn more about this offer:

http://www.tycoonresearch.com/login_visitors.asp?Source=111

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2. ANOTHER BRICK IN THE WALL: Shareholders of both Merck and Pfizer have much bigger problems than just selling bad drugs.

And as always, all of the problems start at the top.

-- By the Tycoon Editorial Staff (that means more than 1 person)

YOU MAY NEED TO SIT DOWN FOR THIS ONE.

It seems that the bigwigs at both Merck (NYSE: MRK) and Pfizer (NYSE: PFE) have been discussing ways to get past the PR nightmareof selling painkillers that cause heart attacks to sick people.

My own sources (read: fake people) tell me that in one meeting, theMr. Magoo-like Chairman and CEO of Merck Raymond Gilmartin,proposed offering a free bottle of PEPCID for anybody who purchased 100 shares of his stock.

That's right...Pepcid.

The heartburn medicine.

Ladies and Gentlemen, I think it's about time for an intervention.

Not the kind of intervention where we sit down with a DRUG USER and tell him he/she needs help.

The kind where we sit down the DRUG DEALER and tell them that THEY NEED HELP.

Yeah, this is a new one for me too folks.

Here's why an intervention is needed:

The problems that pure-play drug companies in BigPharma are facingright now have their roots in mismanagement dating back closeto ten years.

Now, don't get me wrong.

I'm not saying that they're stocks haven't performed well during thelate 90's.

Far from it.

What I am saying is that their stocks have performed too well.

So well in fact that while the bigwigs were fantasizing about thenew toasters they recieve from depositing their stock-option checksat the bank, the forgot the most important rule to selling drugs -

MAKING NEW DRUGS!

Here's a sobering statistic for you:

In 1996 the FDA approved 53 new drugs.

In 2003 that number dropped to 21.

During the same time, annual R & D spending for bigpharma nearlydoubled to $33 Billion per year.

$33 Billion dollars.

That means that in 1996 the drug companies spent, on average, $320 Million to introduce a new drug from start to finish.

In 2003 that number ballooned to $1.5 Billion per drug.

Now I admit, I am not a drug-stock analyst.

Not by a long shot.

As a matter of fact, and let me make this very plain - I don'tthink I've ever even owned a drug stock.

And while I do fancy myself somewhat of a business analyst (at least that's what I say to meet women), I've never quite been able to get my mind around the science of making the kind of products drug companies make.

Sure, I've taken an occasional antibiotic when sick.

Heck, a friend even got me to take a Vicodin at a summer partyat the Hamptons many years ago (he was my last intervention).

But ever since I read a statistic some years ago that said over90 percent of all drugs never make it past the FDA, I've neverbeen comfortable with the odds.

This is not to say that they haven't made investors a lot ofmoney - I personally know one or two people who are a sliveraway from the Forbes 400 list - but it's never been my bag.

But I do understand how to invest.

And the first rule of investing is to make more money than you spend.

That rule applies to you whether you're an investor spending IRAmoney or My-Favorite-GilMARTIAN running Merck.

At that, ladies and gentlemen, means that the problem, as always, starts at the top.

But the problem hasn't been universal.

Companies like Johnson and Johnson (SYM: JNJ), probably seeing that timewas needed for the science to catch up to the investment, continuedto diversify into consumer health products and medical devices.

But much of the rest of them have been in denial.

If that wasn't the case, then why haven't shareholders of these companies held these CEO's accountable for research inefficiency?

(Michael Eisner could only wish for breaks like that.)

It's because of the money.

Yes, that's it.

Shareholders have made so much money in the past several years that theyforgot they needed to take a long hard look at the product pipeline.

But it's not just investors who drank too much of the fruit punchat this party.

It's the leadership.

And they're the ones that should have been pulling away the bowl instead of spiking it.

But that didn't happen.

Far from it.

And while I'm sure most bigpharma stocks are relatively cheap tradingnow at a soft 15 P/E, I would tread carefully.

Just because their stocks may have limited downside doesn't mean thatthey have upside.

Ultimately, the only thing that makes a stock rise are earnings or the prospect of earnings to come.

And without products in the pipeline many investors may be leftjust pipe-dreaming.

Dont forget: you are what you read.

-- The Tycoon Editorial Staff (that means more than 1 person)
------------------------------------------------------------------Want to Learn Good Alternatives to Investing in BigPharma?
Visit us here and get access to the Tycoon Report RISK FREE:
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Tycoon Research Weekly Market Advisory - Vol 1, Iss 7

Tycoon Research Weekly Advisory

December 17, 2004: Volume I, Issue VII
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IN THIS WEEK'S ISSUE:

1. WATCHIN THE WHEELS GO ROUND AND ROUND: In the face of rising
interest rates already inflated American home prices are likely
to fall.

How it may be possible to hedge your home's paper profit without
ever renting a moving van.
--By www.Tycoonresearch.com

2. ANOTHER BRICK IN THE WALL: As part of it's stategic overhaul,
Blockbuster Video (SYM: BBI) has finally decided to eliminate the
late fees it's been charging it's customers.

Should Investors Make it a Blockbuster Night?
-- By www.tycoonresearch.com

**STOCKS MENTIONED THIS WEEK: Blockbuster (SYM: BBI), Netflix
(NFLX), Comcast (SYM: CMCSK), Viacom (SYM: VIA), Amazon (SYM: AMZN)
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1. WATCHIN THE WHEELS GO ROUND AND ROUND: In the face of rising
interest rates, already inflated American home prices are likely
to fall.

How you can possibly protect your home's paper profit without
ever renting a movine van.
--By www.tycoonresearch.com

YOU AND I HAPPEN TO SHARE A MUTUAL FRIEND.

No it's not Bob Jones.

Nor is it Karen Smith.

It's that person we both know who bought that second home ten years
ago for $250,000.

You know the one.

That self-proclaimed real-estate "mogul" who turned his
$250,000 into $1.1 million in a quick ten years.

The same one who now offers real estate advice at dinner parties to
other friends or ours who never ask for it.

Yea, that guy.

Well, for those among us tinted green with 2nd home real-estate
envy (I comfort myself with his stock-market envy), I have a
secret to share with you:

I might know a way for us simple folk to lock in the profit in
our primary home without even selling them.

That's right!

No listings, no moving vans, no real estate agent's.

Want to hear more?

Ok, Let me explain:

The people at the Chigaco Mercentile Exchange have reached an
agreement with Yale economist Robert J. Schiller's firm Macro
Securities to list Housing Options.

Yes, the same Robert J. Schiller who wrote a book boldly predicted
the demise of the stock market in APRIL 2001, EXACTLY ONE MONTH
BEFORE IT STARTED.

The same Robert J. Schiller whose been quietly mentioned as a
possible FED governer.

Yes, Mr. Schiller is back.

But this time it's not stock prices he's thinks are overvalued,
it's home prices.

And this time he doesn't want the publishing, he wants the trading.

You see, Robert J. Schiller has created a derivative instrument,
similar to an option index fund, that will track home prices
in "certain" (read: overvalued) markets (New York, Chicago, L.A.
etc).

So, if you live in New York and you think home prices
are going to drop, you could buy an option akin to a stock "put"
option and make money when they indeed go down.

Or, if you happen to be like my real-estate mogul friend (whom we
affectionately call "The Ronald") you could buy a derivative akin
to a stock "call" option and profit if home prices rise.

Margin trader meet Mortgage trader.

Peaceful homeowner meet Constant Anxiety.

Suprised that nobody thought of this before?

I was too, until I found out that HedgeStreet.com has a similar
product available now, although I hear that it isn't sensitive
enough to track price movements "properly."

Nope, for the real action we need to wait for Robert J. Schiller's
stuff to hit the streets which is expected in 2005.

But how do you know if either product is right for you?

Well, that is a bit more difficult to figure out, but I'll try to
give you your two cents worth.

Here's a short-hand method I use:

Home prices in many major metropolitan areas have risen an average
of 10.8 percent annually for the past 50 years.

That's right - your parents who paid $30,000 for that house in 1960
weren't just savvy real estate investors.

Nope, they had the patience to wait 34 years for that 10.8 percent
per year to compund before they pulled out their cool million.

Now for those of us who paid $300,000 ten years ago for a home:

At 10.8 percent per year your home should be worth appx. $835,000.

But home prices have risen a stunning 15.9 percent per year in some
areas, making many of our homes worth closer to $1.3 million.

So, with a little simple math, we see that many of us are sitting
on homes that are selling for $465,000 more than their historic
worth.

$465,000 in additional profit - nothing to sneeze at.

So I have a suggestion for the more enterprising homeowners among us:

If you won't leave your primary residence and believe it's overvalued,
buy one of Mr. Schillers "put"-type options (assuming it comes
out soon and meets our smell test).

This way you'll be betting that if/when home prices in your
neighborhood drop you'll make a $465,000 profit without ever having
to sell your house or move out!

But now you have a bigger problem....what to do with the money?

If you happen to think like my real-estate mogul friend, you may
ignore rising interest rates, the declining dollar and weak
housing starts to let it roll with real estate.

Of course history isn't on your side but what the heck?

Let's say that your money continues to compund at 15.9 percent
per year during the next 3 years.

That would turn your $465,000 into a cool $723,000.

Not bad for 3 years worth of work.

But alas, there is another option.

Let's say you happen to be like this humble author and believe
the following:

1) That Real-Estate is historically overvalued and with interest
rates rising is very likely headed a nasty fall.
AND
2) Stocks WERE overvaled and already had their nasty fall a couple
years ago.

If you believe that (and history suggests you should) than you
could take your $465,000 and invest it into stocks.

Now, if you happen to achieve OUR average rate of 38.7 percent
per year during the past 3 years (as opposed to the 15.9 percent
in real estate) than:

Instead of having $723,000 you'd have almost $1.3 million.

NOT BAD FOR 3 YEARS WORTH OF WORK, EH?

But the best part of all is that it doesn't cost you anything to
find out what stocks we like right now.

As a matter of fact, in addition to finding the right stocks,
you could read our new December issue to find out what stocks
you should avoid going into 2005.

And all you have to do is try the Tycoon Report free for 30 days.

Go ahead, make your parents in Florida proud.

Remember, you have nothing to lose.

Visit here now to learn more:
http://clicks.aweber.com/z/ct/?.VmegOoijHl5q3oJGo8w2w

--By www.tycoonresearch.com
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2. ANOTHER BRICK IN THE WALL: As part of it's stategic overhaul,
Blockbuster Video (SYM: BBI) has finally decided to eliminate the
late fees it's been charging it's customers.

Is it time yet for investors to make it a Blockbuster night?
-- By www.tycoonresearch.com

YOU'VE RENTED THAT MOVIE BEFORE.

The one where that possee of Zombies lumber across the football
field, slowly swaying from left to right.

Gargling, "Brains...brains...brains...", the zombies first suprise
the innocent couple making out under the bleachers.

Than they make their way to the shopping mall, where they're
confronted by an astute security guard who manages to get most
of the screaming customers into the mall before slamming the
glass doors shut.

As the attractive blond woman tends to that weird "bite mark"
on the security guards neck, the customers watch horifically
as the zombies repeatedly and methodically ram their heads
into the glass, trying to break it.

It must be hard to be among the Walking Dead - not quite dead,
not quite alive...mumbling thorugh life trying to satisfy some
undying thirst (No hidden meanings here you Freudians)

But investors don't need to watch a movie to be scared away by
the Walking Dead.

One must look no further than Blockbuster (NYSE: BBI) to find
Wall Street's version of the same.

Instead of "brains" though, Blockbuster wants "money" - your money.

As a consumer you may or may not have a problem giving it to them.

I know I won't.

I could care less that they announced that they were dropping
late fees this week.

Way too little, way too late.

They lost me permanently two years ago after killing
me on late fees for years that I know I didn't owe them.

You know how their drop box "system" works.

You drop a movie into the box Monday morning before you
rush to work - well before the 12 o'clock deadline.

Although the movie is in their system on-time, the pimply-faced
manager doesn't scan it into the system until 2 p.m.
(technically the "next-day").

Your loved one returns that Friday to rent another movie and is
hit with late fees because it wasn't in the box in-time.

She pays it withought thinking and just assumes
I'm losing my marbles.

(Believe me folks they've done research on this dynamic.
At one point I got so paranoid that every time I dropped
a movie into the box I could have sworn that I saw Sumner
Redstones hand pushing it back).

But that's a story for later.

Anyway, I moved to smaller and better things, such as
Netflix (NNM: NFLX).

20,000 movies. No late fees. As easy to use as Amazon (SYM:AMZN).

What do the paranoid rantings of an ex-Blockbuster junkie have to
do with whether or not you should buy Blockbuster stock?

Plenty.

After getting tossed to the curb by Viacom (SYM: VIA) earlier
this year, Blockbuster began major strategic overhaul.

While I wrote about this at length in our October issue of the
Tycoon Report as a case study, here's a summation:

1. Instead of just renting videos theyir going to convert their
stores into "stores-within-stores for video gamers and
DVD buyers, traders and resellers."

2. Expand by making a major purchase, such as the proposed
(and likely) acquisition of Hollywood Video

3.And, as I mentioned before, they announced this week that
they were cutting back their late fees (which accounted for
$300 million of their $350 million in operating income
this year - do you need more proof of a conspiracy?)

All of these clever moves, while admirable, hide one simple fact.

That Blockbuster, no matter how hard it tries, still sells "Buggy
Whips" (video rentals).

And company's like Comcast (NNM: CMCSK), which was featured
in the September issue of the Tycoon Report, sell
"automobiles" (digital cable).

And when the automobile was introduced Buggy Whip companies didn't
last too long.

Sure, many of them tried to compete. Some began to sell bicycles,
others tried their hand at motorcycles.

In that context, it appears to me that what Blockbuster is trying
to do strategically, is akin to a Buggy Whip company trying to
create bicycles after Ford began selling cars.

Sure, it might work for a little while.

Heck, the stock may even "run" from single digits to low double
digits occasionally.

But, if you are like me, and you get the occasional call from that
hard working stockbroker who wants to take Blockbuster for
a spin with your money do what I do:

First - find an astute security guard and a gorgeous blond.

Second - begin to run as far and as fast as you can until
you get to the next shopping mall.

Third - lock the doors, buy some popcorn from Blockbuster,
and watch the Zombies pound their heads against the glass.

Remember, open minds mean larger wallets.
-- www.tycoonresearch.com

Want to Know Whether We Think Comcast (NNM: CMCSK) is sill
a good buy?

Visit us here and get access to the Tycoon Report free:
http://clicks.aweber.com/z/ct/?.VmegOoijHl5q3oJGo8w2w
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Tycoon Research Weekly Market Update

Tycoon Research Weekly Advisory
December 10, 2004: Volume I, Issue VI
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IN THIS WEEK'S ISSUE:

1. WATCHIN THE WHEELS GO ROUND AND ROUND: The decline of the dollarcan have some painful impacts on your portfolio in 2005.
What you can do now to protect yourself now. --By Tycoon Research

2. ANOTHER BRICK IN THE WALL: Two years after Carleton S. Fiorina,the CEO of Hewlett-Packard, staked her reputation on acquiringpersonal computer maker Compaq, shes now reversing herself and laying the groundwork for a spinoff.

Why Mrs. Fiorina should now be fired. -- By Tycoon Research

**STOCKS MENTIONED THIS WEEK: Intel (INTC), Gateway (GTW), Apple (AAPL), Hewlett-Packard (HWP), K-Swiss (KSWS),Timberland (TBL), Yankee Candle (YCC)
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1. WATCHIN THE WHEELS GO ROUND AND ROUND: The decline of the dollarcan have some painful impacts on your portfolio in 2005.

What you can do now to protect yourself now. --By Tycoon Research

DEAD IN THE WATER. THING OF THE PAST. NO LONGER RELEVANT.

You've heard the descriptions.

No, I'm not talking about Colin Powell.

Nor am I talking about John Snow (although it's worth noting thatAndy Card, the name mentioned as Snow's replacement, isn'tdreaming of a snow-white Christmas anymore).

I'm talking about the U.S. Dollar.

IT'S ALIVE.

Well Kind of - if you consider haveing a "pulse" being "alive."

Yes, the dollar is back. A rally in Peoria this week.

But many of you "regular" readers of this column know my thoughtson the dollar.

In short, if the dollar keeps declining at it's breakneck pace,that could have potentially painful effects on your portfolioin 2005.

Why?

Because the United States spends more money than she can afford.

And to spend that money we borrow from foreign governments.

The borrowing largely comes in the form of United StatesTreasury bonds that we issue each month.

During the past several years the largest buyers of our bonds (investors lending us money), have been the leading governments in Asia.

They’ve been lending us between $1.5 and $2 billion per day.

To date, the large (and rapidly growing) amount of external debt has not yet been much of a burden on our economy.

So far we’ve had no problem borrowing more money and interest rates haven’t been much of a burden to this point.

That’s likely to change though.

Foreign governments, believing that our imbalances are too large, are beginning to purchase less and less of our bonds.

Let me explain. When we issue bonds we borrow in our own currency.

Therefore, by letting the dollar drop, trillions of dollars are wiped off of the value of our lenders assets.

In other words, we owe the foreign governments that lent us the money trillions of dollars less than the amount we actually borrowed.

This amounts to the U.S. “defaulting” on its debt.

Not defaulting in the way you and I would default on our personal debt.

Defaulting in a way that only the most powerful government in the world could.

To put this in perspective, if the U.S. dollar falls by 40 percent in value this would amount to the biggest “stealth default” in world history.

This is, withought question, the biggest problemfacing U.S. investors in 2005.

Why?

Because the U.S. MUST borrow money to operate.

But lenders are going to stop lending us money if thevalue of what we already owe them drops.

Ultimately (and this is beginning to happen now), they'llstart to demand higher interest rates.

That (and a host of other issues) could bring on inflationpressures.

Inflation is to an investor what quicksand is to a hiker.

*Inflation makes it more expensive for companies like Intel to build new plants.

*Inflation makes it harder for some companies to pass increases to their customers.

*That means profit declines, which means a declinein stock prices.

But inflation can also be a friend to certain companies.

COmpanies that have pricing power. Companies that have brand names.

We own companies like this.

As a matter of fact, in our December 15th issue of theTycoon Report, we tell you who they are.

If you don't have money in the market read no further - nothing we say concerns you.

But if you do have money in the market and you've readthe news about the dollars decline, thereare 3 reasons you need our December report:

****You'll recieve a birds-eye view of the economic dangersfacing the stock market in 2005.

***You'll recieve 5 investing rules that are essential for2005.

***You'll receive 6 stocks we believe will have the bestchance to weather the storm in 2005.

This is serious business if you have money in the market.

Serious enough for you to read the report.

Remember, it's free.

Visit here now to learn more:

http://www.tycoonresearch.com/login_visitors.asp?Source=111

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

2. ANOTHER BRICK IN THE WALL: Two years after Carleton S. Fiorina,the CEO of Hewlett-Packard, staked her reputation on acquiringpersonal computer maker Compaq, she's now reversing herself and laying the groundwork for a spinoff.

Why Mrs. Fiorina should now be fired.
-- By Tycoon Researcj

OPEN: LATE 2001

A male and a female are standing in a dark alley discussing business. Both are dressed in sophisticated business attire (for California) and both are speaking in hushed, but forceful tones.

Lady: I'm counting on your vote.

Man: Look, I know what I said…but on further reflection, I just, I just….I don’t know. The deal just doesn’t make sense.

Long Pause. Stony Silence.

The lady slowly takes a pack of cigarettes out of her purse and lights one. It’s too dark to see her face, but we know she’s serious.

Lady (taking a long drag): The deal makes all the sense in the world. Think about it - once we buy Compaq, we'll be able to compete directly against IBM for the lucrative services market.

Man: Yea, but you don’t need Compaq to do that. They have terrible margins -Dell's killing them. You could become a services business without them. Come on, Carly.

Carly (Stepping into the light): Stop your whining. You and your Wall Street friends are such f----n wimps sometimes.

Carly drops the cigarette on the flow and steps on it,slowly crushing it into the ground.

Carly: Listen closley - I'm not gonna repeat myself. Here’s how it’s going to work – the shares your firm are incharge of are going to vote for this merger.

Man: But--

Carly (cutting him off): But nothing. If you don't vote with me I'm going to come down on you like a f-----n hammer!

You’ll never see another penny of investment banking business from us again. As a matter of fact, I’ll make sure you never get another technology underwriting as long as you live.

Man (Sheepishly): Yea...ok...

FAST FORWARD TO PRESENT DAY:

Carly Fiorina now wants out. She's had enough. Game over.

Why the sudden turnaround?

Because she learned.

It took $24 Billion dollar's of shareholders' money, but she learned.

She learned that unless you're Dell the PC business in America is dead.

For every $1,000 you invest into making a PC, you're lucky toget $50 back.

That's if you're lucky.

If you're not lucky you become Gateway (NYSE: GTW). You learnhow to hawk flat screen TV's in between restructuring charges.

If you're kind of lucky you become Apple (NNM: AAPL). They learnedhow to sell digital walkmans. They'll become the Sony of America. Ipods, flat screens, operating systems and oh, yes computers.

But Carly Fiorina is not Steve Jobs. Not even close.

And don't forget IBM (NYSE: IBM).

In a weird way, IBM is what this story is about.

You heard the news.

IBM announced that they were exiting the PC business this week.

Exiting to China. Selling to the one country that could compete withDell on price.

You weren't the only person who heard the news though.

So did Carly.

Yes, the same Carly who fought to the death for Compaq.

The same Carly that fought the Packard family (or was it the Hewlitt family?) to the teeth in the press.

The same Carly that paid $24 Billion two years ago to enterthe PC business in the first place.

The same Carly who announced this week that HP was consideringgetting out.

Reversing the deal.

Cutting her loses.

Why?

Carly know's IBM is right.

How couldn't she?

For every $1,000 she invests in PC's, she makes $25-50 back.

For every $1,000 she invests into printers, it's $200.

I know shlylocks in Brooklyn who wouldn't invest their moneyinto the PC business. They want the most for every buck.

But that's not what gets me.

What get's me is that nothing has changed in the PC business in the last two years.

As a matter of fact the PC business looks better than it has in some time.

What get's me is that all she needed to do was pick up a copyof the Tycoon Report and she would have learned one of the mostimportant rules to investing:

***Never invest into a company whose primary product only competeson price.

If she would have read the Tycoon Report she would have had a chance.

Instead of Compaq, she would have bought K-Swiss (NNM: KSWS) or Timberland (NYSE: TBL).

Both companies earn at least $200 for every $1000 they invest intotheir business.

Maybe she would have bought Yankee Candle (NYSE: YCC). For every$1,000 Yankee invests into it's business, it gets $490.00back.

That's $490 dollars versus $50 for Compaq.

Instead of being down on her Compaq investment, she'd be up 50 percent on KSWS and another 25 percent on TBL.

Instead of destroying shareholder value, she would have builtshareholder value.

Of course, HP wouldnt look like IBM.

They'd look much more like Berkshire Hathaway.

But so what?

You don't see their shareholders complaining do you?

Open minds mean larger wallets.

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Tycoon Research Weekly Market Advisory - Vol 1, Iss 5

TycoonResearch.com Weekly Advisory
December 3, 2004: Volume I, Issue 5
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IN THIS WEEK'S ISSUE:

1. WATCHIN THE WHEELS GO ROUND AND ROUND: Markdowns and shopperswere out early this season. What does that mean for retailers?

2. ANOTHER BRICK IN THE WALL: Is it too late to profit from thetakeover battle between Mylan Labs and King Pharamaceuticals?

3. SPECIAL REPORT - "WORLD'S TOP 20 THINNEST BOOKS": Finally, a reading list that won't expand your mind. --By The Tycoon Academic Staff

**STOCKS MENTIONED THIS WEEK: Gap Stores(NYSE: GPS),Sears(NYSE:S),COach (NYSE: COH), Wal-Mart (NYSE: WMT), Mylan Labs (NYSE: MYL),King Pharmaceuticals (NYSE: KG)

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1. WATCHIN THE WHEELS GO ROUND AND ROUND: Markdowns and shopperswere out early this season. What does that mean for retailers?

THEY CALL IT BLACK FRIDAY for good reason.

It is this particular Friday, the Friday that follows each and every Thanksgiving, that lets retailers know if they're income statements will indeed be black.

Black is good. Black means higher profits. Higher profits mean higher stock prices. Higher stock prices mean stock options that are, well, in the black.

And what a black Friday it was.

You saw the pictures. Shoppers braving the elements to bum-rushGap, Sears and H & M in search of the latest markdowns.

Hair flying. Elbows hitting. It reminded me of a mosh pit.

It seemed that the retailers - who've been worried about a weak holiday season all year - we're wise with the markdown strategy.

On Friday evening ShopperTrak, a national survey firm, said that sales for the day rose an estimated 10.8 percent over last year to appx. $8 billion.

Analysts & retailers proudly hit the talk show circuit Friday nite to declare that the 10 percent rise in spending was a combination of the modest "drop" in oil prices combined with the recent rise of the stock market.

Retailers began to secretly cross their fingers...dreams ofstock options dancing in their head.

All seemed good.

And than came Saturday. And Sunday.

It was as if all of the shoppers who partied on Friday suddenlyremembered that oil is 100 percent higher than it wasa year ago Black Friday.

And that prices at the pump haven't fallen.

And that the stock market hasn't really moved during the year.

And that their adjustable-rate mortgages were creeping up with interest rates.

So for the rest of the weekend they rested. The post shop hangover must have been severe.

First Binge. Than Purge. Some of you know what I mean.

By Monday the "smart money" was back on the talk show circuitquestioning the strength of the shopping season again.

It seems that their old research was wrong.

It's not discounts that people were running to. It's discountsthey were running from.

Wal-Mart is out. Coach is in.

Brand names galore. Fewer, but more expensive gifts.

At least for now.

And so we await the cycle to begin anew next weekend.

Too much drama for me.

Guess what I did this weekend? I slept.

I slept because Tycoon is knee-deep in companies with strong brand names.

Strong brand names mean people want their products.

Strong brand names mean pricing power. Pricing power means higher profits. Higher profits mean higher stock prices.

Higher stock prices mean, well, Tycoon subscribers who are, wellin the black for the year.

Yea, I slept pretty well last weekend.

Can you guess what I plan to do this weekend?

Enjoy,
--The TR Staff
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2. ANOTHER BRICK IN THE WALL: Is it too late to profit from thetakeover battle between Mylan Labs and King Pharamaceuticals?-- By Tycoon Staff

IT STARTED WITH A SIMPLE ENOUGH PROPOSITION.

Mylan Labs (NYSE:MYL), seeking to increase it's competitive position within the generic drug industry, makes a $16.49/share all-stock bid for King Pharmaceuticals (NYSE: KG).

The board of King, believing that the offer makes "strategicand financial" sense accepts the offer as fair.

Mylan Labs rejoices.

Enter financier Carl Icahn, the scrappy member of the Forbes 400 list and supposed influence for Oliver Stone's "Gordon Gekko" character in the movie "Wall Street."

Believing that Mylan was overpaying for King, he tries to thwartthe deal by purchasing a 9.8 percent stake in Mylan and offeringto buy Mylan for $20 per share.

Mylan Labs cries foul.

Enter financier Richard Perry. The famed money manager, who already owns 7 million shares of King, steps in and one-up's Icahn, purchasing 9.98 percent of Mylan.

It's clear that Perry supports the merger and wants to vote hisMylan stake in favor of the deal.
Talk about playing two endsagainst the middle.

While the clash of the ego-titans continues, I decided to see ifthere was any money in it for us.

Here's what I found:

King Pharma is currently trading at $12.42. That's $4 dollarsbelow the agreed upon merger price - a 32 percent discount.

Generally, when two companies agree to merge and there is littlereason to believe that the Justice Department won't disapprove,there would be a far smaller discount, say 5 - 10 percent, depending on if it's a cash or stock deal.

But this discount is large for two reasons:

1. Icahns purchase has thrown a monkey wrench into the deal,raising a chance that it won't happen.

2. Accounting Investigation: King Pharmaceuticals is being investigated by the SEC and may have to re-state several years of its "historical returns reserves."

Not a pleasant thing, but its more of an accounting issue thana cash flow issue.

The real danger is that Mylan, who was well aware of the SEC investigation before it offered to buy King, lowers the acquisition price if the result is bad.

Here's my bet:

**Icahn won't prevail in his quest to purchaseMylan or derail the merger. As a matter of fact, he soundsmuch less optimistic now that investors such as Perry are challenging his moves.

**The SEC investigation into King will not conclude with a "material" event that will dramatically impact the financials of the company.

**The deal will prob. take 12 months to close from today.

**There is a 75 percent chance this deal gets done.

**If the deal doesn't happen, King will fall down toit's pre merger price and year low of $10 per share.

By purchasing King today, I think youre likely to make20 percent on your money.

Not bad for a years work.

Open minds mean larger wallets,
-TR

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3. SPECIAL REPORT - "WORLD'S TOP 20 THINNEST BOOKS": Finally, a reading list that won't expand your mind. --By The Tycoon Academic Staff

WORLDS TOP 20 THINNEST BOOKS

20. FRENCH WAR HEROES - by Jacques Chirac

19. HOW I SERVED MY COUNTRY - by Jane Fonda

18. MY BEAUTY SECRETS - by Janet Reno

17. HOW TO BUILD YOUR OWN AIRPLANE - by John Denver

16. MY SUPER BOWL HIGHLIGHTS - by Dan Marino

15. THINGS I LOVE ABOUT BILL - by Hillary Clinton

14. MY LITTLE BOOK OF PERSONAL HYGIENE - by Osama Bin Laden

13. THINGS I CANNOT AFFORD - by Bill Gates

12. THINGS I WOULD NOT DO FOR MONEY - by Dennis Rodman

11. MY WILD YEARS - by Al Gore

10. AMELIA EARHART'S GUIDE TO THE PACIFIC

9. AMERICA'S MOST POPULAR LAWYERS

8. DETROIT: a Travel Guide

7. A COLLECTION of MOTIVATIONAL SPEECHES - by Dr. J. Kevorkian

6. ALL THE MEN I HAVE LOVED BEFORE - by Ellen de Generes

5. GUIDE TO DATING ETIQUETTE - by Mike Tyson

4. SPOTTED OWL RECIPES - by the EPA

3. THE AMISH PHONE DIRECTORY

2. MY PLAN TO FIND THE REAL KILLERS - by O. J. Simpson

1. MORALITY - by William Jefferson Clinton~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~