Illuminati Investments

We analyze stocks based on your inquiries and if we believe a stock has great potential, and we introduce small start-up companies, and other entrepreneurial ventures. In addition, we discuss ways to improve businesses, social media, and new technology in the business world.

Sunday

Barbarians at the Gate: The leveraged buyout (LBO) of RJR Nabisco

Barbarians at the Gate: F. Ross Johnson, the CEO of RJR Nabisco decides that the time is ripe to take over his own company and enlists American Express. This kicks off a tide of other firms swarming in to tender offers. The outline of the film follows the actual takeover of the RJR Nabisco empire in a tongue in cheek way.




What Does Leveraged Buyout - LBO Mean?
The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital.

Investopedia Says
Investopedia explains Leveraged Buyout - LBO
In an LBO, there is usually a ratio of 90% debt to 10% equity. Because of this high debt/equity ratio, the bonds usually are not investment grade and are referred to as junk bonds. Leveraged buyouts have had a notorious history, especially in the 1980s when several prominent buyouts led to the eventual bankruptcy of the acquired companies. This was mainly due to the fact that the leverage ratio was nearly 100% and the interest payments were so large that the company's operating cash flows were unable to meet the obligation.


Too Big to FAIL - Blast from the past

"Too big to fail" is a colloquial term in regulation and public policy that refers to businesses dealing with market complications related to moral hazard, macroeconomics, economic specialization, and monetary theory.

According to this theory, certain financial institutions are so large and so interconnected that their failure will be disastrous to an economy. Proponents of this theory believe that these institutions should become recipients of beneficial financial and economic policies from government central banks to keep them alive.

Monday

Stealth Marketing

THE JONESES

An awesome marketing movie. The Joneses work for LifeImage Enterprises, a stealth marketing company.







So, the Best Animated Business TV Show is…



South Park Season 13 Episode 3,Margaritaville

Simply a better version of Wall Street 2

Sunday

Goldman Sachs Global Rage Fund

Dear Investor:
Up until now, Goldman Sachs (
$GS) has been silent on the subject of the protest movement known as Occupy Wall Street. That does not mean, however, that it has not been very much on our minds. As thousands have gathered in Lower Manhattan, passionately expressing their deep discontent with the status quo, we have taken note of these protests. And we have asked ourselves this question:

How can we make money off them?

The answer is the newly launched Goldman Sachs Global Rage Fund, whose investment objective is to monetize the Occupy Wall Street protests as they spread around the world. At Goldman, we recognize that the capitalist system as we know it is circling the drain – but there’s plenty of money to be made on the way down. The Rage Fund will seek out opportunities to invest in products that are poised to benefit from the spreading protests, from police batons and barricades to stun guns and forehead bandages. Furthermore, as clashes between police and protesters turn ever more violent, we are making significant bets on companies that manufacture replacements for broken windows and overturned cars, as well as the raw materials necessary for the construction and incineration of effigies.

It would be tempting, at a time like this, to say “Let them eat cake.” But at Goldman, we are actively seeking to corner the market in cake futures. We project that through our aggressive market manipulation, the price of a piece of cake will quadruple by the end of 2011.

Please contact your Goldman representative for a full prospectus. As the world descends into a Darwinian free-for-all, the Goldman Sachs Rage Fund is a great way to tell the protesters, “Occupy this.” We haven’t felt so good about something we’ve sold since our souls.

Sincerely,
Lloyd Blankfein

Chairman, Goldman Sachs




Friday

Freakonomics

Which is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? Why do drug dealers still live with their moms? How much do parents really matter? How did the legalization of abortion affect the rate of violent crime? Published in 2005, Freakonomics became an instant worldwide cultural phenomenon, and spent more than two years in hardcover on the N.Y. Times best-seller list. It has sold more than 4 million copies and has been translated into 35 languages.

Haven't read it yet? Don't worry. Here's the documentary.




Interested in business movies? If yes, click here; if no click here, if indifferent, click here

Tuesday

Binary Options Trading

Binary options trading is an exciting way people with limited capital have been able to make money in the stock market.

A binary option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. Thus, the options are binary in nature because there are only two possible outcomes. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and Fixed Return Options (FROs) (on the American Stock Exchange). Binary options are usually European-style options.

For example, a purchase is made of a binary cash-or-nothing call option on XYZ Corp's stock struck at $100 with a binary payoff of $1000. Then, if at the future maturity date, the stock is trading at or above $100, $1000 is received. If its stock is trading below $100, nothing is received.

For a Binary Options Trading Tutorial, click here.