This week Alan Abelson, in his Barron's, Up & Down Wall Street (subscription required) commentary on the upcoming IPO by the Blackstone Group there was much to be cynical about. In reviewing the lengthy 200+ page prospectus he chortled at the 30 pages listing all the risks of investing.

The most amazing of disclosures was this: "Our general partner and it's affiliates have limited fiduciary duties to us and our common unit-holders, which may permit them to favor their own interests to the detriment of us and our common unit-holders" Can they state it any clearer than that - this is all about our opportunity, not about yours!

Last Sunday I called readers attention to this in less blatant terms when I posted: Sunday Funnies: Blackstone looking for more green and raised many questions as to why they need to do a public offering now? While Mr. Abelson and I are cynical about this IPO, we are no more cynical than the managers of the Blackstone Group who are taking advantage of a what might be a frothy market place.

Mr. Abelson, who I find provides one of the richer reads each week has been very worried about the frothy market for over a year now and each week marvels at the overall strength of the market with very bearish undertones and outright bemusement awaiting it's collapse. On this perspective I cannot agree. Abelson is wrong - he will be right someday - but not today, and there are many reasons.

• The mountains of cash in corporate coffers is higher than it has ever been since I have been investing over the last few decades.
• Many largely capitalized companies have been building shareholder value for the last five years and their stock prices have been relatively stagnant. There is no froth in General Electric (NYSE: GE), Johnson and Johnson (NYSE: JNJ) or Microsoft Corp. (NASDAQ: MSFT) and furthermore even Google (NASDAQ: GOOG) which may be over priced, is a much greater bargain this year than last, while it's earnings have started to catch up to it's prolific stock price.
• There are numerous companies in the market at fire-sale prices and all you have to do is look at my Chasing Value or Serious Money columns to find them.
• Demand and opportunity in China, India, Russia, Brazil, and eastern Europe has never been higher and if it slowed to half the current level of GDP growth would be double that of the U.S.
• Interest rates have been raised significantly over the last few years and are still at historic lows worldwide providing liquidity for investment and expansion.
• The market did not shoot up over the last four years as it did leading up to the bursting of the bubble that preceded it and if the market weakens it will do so slowly not with a burst. We might get to a point where we see a droopy market but not a collapse of equities.

If you want to see a real frothy market take a look at campaign fund raising / financing / spending, and the like. Among the presidential hopefuls, Democrats Clinton, and Obama have exceeded the $25 million mark and Republicans Giuliani, McCain and Romney are all expected to reach about $20 million. Since there will be only one winner unlike the stock market, look for more collapsed dreams here than anywhere else. The real winner will be the advertisers and the media that will be relieving them of the funds. Perhaps that should have been another positive for the market - I should have singled out the media companies that are licking their collagen inflated lips.

Disclosure: I own shares of JNJ.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

The Dow (DJIA) moved up nicely, hitting all time highs in the past month. It has been rising consistently from its July low, closing yesterday at 12,471.32 and during the day reaching an all-time high of 12,491.91. For the past couple of weeks it has been moving up and down trading in a 250 point range, about 2%.

Is the Dow just taking a breath before the "January effect" takes place moving it still higher? Is there truly a January effect? Is the current movement just our combined tax planning adjustments? The Holidays affecting volume? A distraction? There are those who say the Dow is pausing just to shrink back to some technical level of resistance. I don't buy this technical analysis (crap) either. The Dow will move with earnings reports, interest rates and employment levels and not benchmarks. For now all three are humming along.

Google Inc. (NASDAQ:GOOG) reached an all time high on November 22, 2006 of $513 and has since pulled back to close yesterday at $468.63 with a trailing P/E of 60. It is still over priced in my book. James Cramer of CNBC and TheStreet.com has said it will be at $750 in twelve months (11 now) and quipped that he would like to say it will go to $850 but that might trigger an SEC investigation. I say HOGWASH! GOOG is just as likely to be where I theorized during the summer, closer to $440 than $850. If you listen to Cramer's hype, Google will be bigger than Microsoft Corp. (NASDAQ:MSFT), General Electric Co. (NYSE:GE), Wal-Mart Stores Inc. (NYSE:WMT), or even ExxonMobil (NYSE:XOM) in the foreseeable future.

I hope nobody reading this was so desperate to obtain the new Sony (NYSE:SNE / ADR) PlayStation 3 (PS3) that they were camped out overnight at their local Best Buy (BBY:NYSE) or Wal-Mart Stores, Inc. (WMT:NYSE). I was driving home with my 13 year old son (the "Warcraft King") from an evening school activity when we noticed the phenomena. We both did a double-take... not the homeless -- no U2 concert coming to town -- it was not a parade route -- American Idol try-outs?... Then the light bulb came on: they were gamesters camping out in line waiting for Best Buy to open! They were waiting for the PS3.

They just have to have the new Sony PS3. Some are willing to pay 500% of the manufacturer's suggested retail price (msrp) on eBay. I guess if they can't get one immediately their life will come to an end, their children or grandchildren will hate them, the fellas will not come over to watch (and play PS3) football on Sunday, the mail won't get delivered and life as we know it will come to a complete standstill.

I guess I'm a mean dad; no Xbox, no PS3, no Gameboys, or Wii for my kids. When they finish their homework they can play computer games on the same PC that they they did their homework on. They play games from DVDs and on-line. I myself stick to chess, poker and fantasy basketball when time permits and I can un-glue the kids from one of the terminals. We have two Apple Computer, Inc. (NASDAQ:AAPL) notebooks and two PC's. Our house is making the switch from PCs to Macs so Apple should continue to gain market share next year if we are a micro indicator of what might be a macro shift.

Start screaming crazier and crazier edicts and pronouncements if you want to be a tyrant these days. If you have any doubts about this, read a few of the gems that have escaped from the lips of North Korean President Kim Jong Il, Iranian President Mahmoud Ahmadinejad or Venezuelan President Hugo Chavez. I emphasize their first names because they make everything so personal and we see and hear them so often that I feel like they must want to be friends in some perverse way.

Hugo has called President Bush the devil during a worthless diatribe to the United Nations, and Kim has threatened the United States, Japan, South Korea, and anyone else that questions his tyrannical, ego-maniacal nuclear ambitions. However, you will note he has not threatened China. This I point out as evidence that he may appear crazy, but he is not stupid!

Mahmoud, on the other hand, has threatened only a third of the world including, with no lack of emphasis, Israel. He has stated Iran has no compunctions about losing 250,000 of its own people in the process of a first strike. However, the fact that Israel has second strike capability and the figure could reach 25 million people has not made it into any of his speeches. The latter figure no doubt might test the limits of his list of willing martyrs.

While there is an outside chance that this is all bluster, I can assure you (having started this story while traveling in Jerusalem) that the Israelis are taking these comments very seriously and are not likely to sit around doing nothing forever. While the idea of Israel striking first would not be unprecedented, it would also raise the stakes in what would be the scariest of bad-boy games.

If Mahmoud backs the Israelis into a corner... well that might be the all time dumbest stunt ever and could be the opening scene for Jackass 3. My perception is that Mahmoud will continue to threaten with the intent of keeping his enemies and rivals off balance and unfortunately might guess wrong about the edge of sanity (never mind wisdom, we long ago passed that mark), where he appears to teeter back and forth.

Patience, patience, this story is about economics...

As a long-term shareholder I appreciated news of the breakout of Time Warner Cable.

Now, I'm sure some clicking on this post thought that maybe a typo had escaped the editors, but I did mean "muddle" in the title of this post and not "middle". Time Warner (NYSE:TWX) has been encouraged for some time by shareholders, Carl Icahn, analysts, and various prognosticators and their like to give the market place a clear picture of the company's assets, company's goals, and to unlock their hidden value. This is value that many viewed as mired in a muddle of slow-moving, misdirected pieces aggregated in a conglomerate, lead by a board that just did not get it or get with it.

The news that TWX is going to release Time Warner Cable, which flies under the banner TWC, from its corporate bondage was welcomed by Wall Street and I'm sure Mr. Icahn. In fact this plan may be one of the things shared with Carl Icahn months ago that pacified him and his investor group from "throwing things" in the meetings with Chairman Richard Parsons. This and dramatic changes at the AOL division which are still ongoing.

Continued clarity of purpose and strong leadership will continue to bring value to TWX in the coming years so I will be holding on for a while.

There are many companies stuck in the muddle that should give some thought to this issue of clarity and give investors something they can understand while demonstrating they themselves (corporate executives) know what they are doing.

Other companies that I believe are stuck in the muddle include the following: Yahoo (YHOO); Sun Microsystems (SUNW) which is just plain stuck; General Electric (GE) which should at least tell us why they must continue to own NBC; Microsoft (MSFT) is less muddled lately and 2007 should be their opportunity to come clean; Citigroup (C) is going nowhere fast with lots of potential and nothing happening -- this is one that should definitely "speed up, slow down, or get the hell out of the way"; Ford (G) and General Motors (GM)... could they be more muddled up? Anybody want to add to the list of muddled companies? There are plenty.

Disclosure: In addition to owning TWX, I own Ford bonds bought at a discount to face value. I hold no other position long or short in any other stock mentioned.

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Business contends with illegal 'aliens,' immigrants in a Ghost Town?

Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.

In correspondence with Amey Stone, (one of our beloved editors) almost two years ago, during a very shaky market, I did some rare speculating.

I preface this article by acknowledging that such exercises are usually pointless and not something I engage in very often. My deep value investing style is focused on companies and not markets, facts and verifiable high probability theories. Often I am the contrarian as in Me and my Merck: Should I keep it? Sometimes I am the curmudgeon (hopefully lovable curmudgeon) and I have scoffed at analysts (Analyzing the Analysts - It's all a joke right?) and prognosticators whose primary business is skimming fees from the top of your investment stash.

Among what I thought at the time were my verifiable high probability theories was that oil money, real estate money and Chinese money (from our sad trade deficit) was going to recirculate back into the stock market. Oil prices were just starting to move up, real estate was booming, and the Chinese were piling up billions of dollars of our treasury notes. Furthermore I thought the Chinese would not just be satisfied moving some of their debt instruments (bonds) into equities (stocks) but actually start shopping for U.S. companies. This came to pass in their acquisition of IBM's Think Pad (R) division by Levano, and their failed attempt to acquire Unocal, and they are still on the look-out for other opportunities.

So in early 2005 I made the case to Amey that we were going to see the Dow hit 11,000 by the end of the year and that we would hit 12,000 by the end of this year. Well of course the Dow Jones Industrial Average did hit 11,000 as anticpated climbing from about 10,000 mid year in '05 and I believe it will soon reach 12,000, maybe even by the end of the year, which was on my list of "speculations".

It's only a question of time. It's only another 3% +/- in a year of mixed results.

By the way, Warren Buffett comments about the trade deficit in a story about our loss of integrity in Warren Buffett, America's greatest storyteller.

So having just about hit all my targets from my notes to Amey of two years ago I started thinking about where we go from here. I think we are in for more of the same and for the same reasons. Plus a few new insights, if I may be so bold.

Having addressed some controversial issues like eBay and the real estate market through a series of posts, one of BloggingStocks most avid (and astute) readers asked me to tackle another tough issue -- Immigration reform.

He directed me to the following September 15 2006 article, "Immigration Raid Makes a Ghost Town." The story points out :

"Last month, the federal government reported that Georgia had the fastest-growing illegal immigrant population in the country. The number more than doubled from an estimated 220,000 in 2000 to 470,000 last year. This year, state lawmakers passed some of the nation's toughest measures targeting illegal immigrants, and Republican Gov. Sonny Perdue last week vowed a statewide crackdown on document fraud."

The article is clearly slanted toward the plight of the people that were hauled away, creating the "ghost town," and is slanted against the government. In this case I may have been swayed by similar feelings, as was our reader. However, I am not one to appreciate the political polarization we create among ourselves and I do not feel this article is balanced in its reporting.

Even in the paragraph I have quoted I would not mention the political affiliation of the Governor. Some might say it is normal to do so, but I say it adds nothing to the story and only fuels the wrong fire. This story will take volumes and I do not know how much energy I have to cover it, but if you do not have your own soap box, I am more than happy to share mine. Perhaps we can thrash out what this all means.

One of the first things that I noted in the article was the use of the term illegal "immigrants" as opposed to illegal "aliens," which by itself is an indication of where one's sympathies may lie.

Last Monday night I had a meeting with a friend (JW) who has been developing a new company over the last six years and has reached the point where he needs angel investors to help get the company to the next level.

I am sharing this story for those Blogging Stocks readers who are interested to learn more about how angel investing works -- both from the perspective of the company seeking funding and the investor considering ponying up cash.

I have done some fundraising on a small scale in the private equity market and have been an "Angel" investor once before, and approached many times. My first adventure in this arena has been a total loss to date, and is a real long shot to make a comeback.

In the case of that product, a plastics additive, the experience and execution of management did not equal the quality of the product. The learning curve of key players in the organization took longer than it should have and they burned through capital faster than the product could be successfully introduced into the market place. They have backed up a few steps and I understand that they are experiencing some sales growth. But their future is still a big question mark.

JW's company has developed a line of packaged gourmet meals, focused on health food (he brought some impressive samples) that are already on some chain store shelves.

Microsoft Corporation (NASDAQ:MSFT) has many issues to contend with at the company's current size and complexity. Among them is the disparity of its growing line of products; the lower profit margins offered by hardware sales in comparison to its traditional high margin software sales; and the increased number of formidable competitors it faces in every direction it looks.

This is the continuation of Monday's story Micro'soft' vs Micro'hard' -- Break it up fellas! In the first article I touched upon the scale of Microsoft and their lack of agility. I concluded that even several tremendous successes (swallowing Apple (AAPL) whole was used to exemplify) would only have marginal affect on the share price in the aggregate.

This story is not about whether Microsoft makes worthy products, or is inventive, or can create the next big thing. This is about what Microsoft is, and what it should be as a company going forward. Does Microsoft want to get back to its high-growth days and generate the kind of excitement a Google, Inc. (NASDAQ:GOOG) or MySpace (recently acquired by Newscorp (NYSE:NWS)) does, or do they want to be a large conglomerate. Given the number of new products that are announced weekly, and all the unfinished business the company has started, it is apparent that the die has been cast for the latter; it is a conglomerate.

Conglomerate \Con*glom"er*ate\, n.

Webster's: That which is heaped together in a mass or compacted from various sources; a mass formed of fragments; collection; accumulation.

OR

Contrarian (noun), pronounced con.trar.i.an. : A person who takes a contrary position or attitude; specifically : an investor who buys shares of stock when most others are selling and sells when others are buying.

Turning things inside out, and upside down is basic to contrarian and value investing. In this article I will share my WOW Principal of investing.

WOW Principal origin: Observing how my wife manages our family I have been in awe. It's true: "a mother's work is never done." To express my amazement, I have exclaimed WOW often. MOM upside down spells WOW! There are many times that Mom's world is upside down, juggling three kids and an ever increasing number of commitments with spectacular efficiency. She is also an architect and my partner in our architecture practice. In my bio, I referred to my relationship with my wife as my best investment, and since we met many years ago, I have been collecting dividends.

So, it is with my wife in mind that the WOW Principal of investing came to be. It is a perfect fit with my investing style. Simply stated: If, after thorough analysis of an investment, you are not in awe of your findings (company data, news, trends and surprises) and you do cannot exclaim WOW! (double WOW is even better!), then it is not a worthy investment.

If however, the investment does reach WOW status, you are in business. I do not invest unless I think there is an amazing opportunity and any risk is understandable and acceptable. Good is not good enough, it must be a great opportunity, and the case must be very convincing.

When things are upside down or people's perspective is jaded, there may be a deep value opportunity and my interest is peaked. At the point of discovery is a moment that begins when I say "hmm," and stroke my beard. Then I spend time with my investigation and analysis. But I do not fork over any cash until I find the WOW factor(s). If you find yourself scratching your head and saying huh? instead of "Wow," move on!

An article in this week's BusinessWeek outlines Yahoo and MSN's plans to "launch their long-awaited Google counterattack." This month, Yahoo will unveil ad technology initiatives while MSN improve will go public with its first search-advertising network, dubbed adCenter.  While Google may be clearly trumping competitors in the online ad race, the article notes Yahoo appears to be following Google's approach by " investing its resources in the intricate science of matching ads to search queries and pages of online content. " And Microsoft's edge over Google may be that it simply knows its customer base: the company has info on more than 250 million users and will tap that data for its contextual ads.