NYC Cashflow

Members of NYC Cashflow remain bullish on gold & silver.
By Ed Patisso

As the price of gold & silver consistently reach historic highs, members of NYC Cashflow, a New York City entrepreneur club, continue to acquire these precious metals.

Keith Jones, a New York City Police officer, was introduced to the prospect of a major gold and silver rush when a retired New York City Sergeant gave him a video presentation years ago. After reading “Precious Metals for Dummies” and Mike Maloney’s “Guide to Investing in Gold & Silver”, Jones bought thousands of dollars worth of dated coins from American Silver Eagle, and watched his investment double. Jones, who constantly monitors spot prices on www.kitco.com, believes the price of gold will reach $2,500 an ounce within the next few years.

“I’ve seen a lot of officers lose value in their portfolios,” said Jones. “The value of their retirement nest-egg diminished.” He believes the strength of these metals is “based on the constant printing of the Federal Reserve Note.”

One member uses his individual retirement account to purchase silver bullion through the Gold Star Trust Company in Canyon, TX. Joe Richard, 50, a photographer from upstate New York started using his retirement account three years ago, after learning more about the failure of fiat currencies. Like Jones, he also read Mike Maloney’s book and took action. Richard used $15,000 from his IRA and pays a storage fee, but also maintains his own store of bullion and prefers not to disclose the amount.

"The way the government keeps printing money brings down the value of the dollar,” said Richard. “I don’t have a lot of faith in the dollar at all.”

One serial entrepreneur committed to capitalizing on this frenzy opened four stores in Nashville, TN dealing gold and silver. Troy Johns, 40, operated a hardwood floors installation business in Flint, MI for 11 years. As the housing market deflated, Johns’s business dwindled forcing him to try something different. His ex-wife, who Johns was married to at the time, worked for a jeweler so he decided to join them part time. With only $5,000 left in his bank account, Johns opened The We Buy Gold Store, in Nashville, TN with some partners after learning the trade. They grossed $960,000 their first year in business, and $2.6M year two. Now Johns is looking for partners that want to get into the business and believes he can make newcomers profitable within 60 days.

“I think it’s been a long time coming that gold catch up to inflation,” said Johns. “The national debt doubled at the strike of a pen.”

Another entrepreneur devotes his work not only preparing for hyperinflation, but also educating and helping Americans protect themselves for what he believes is hidden from the American public. Peter C. Bisulca, 39, Financial Advisor and author of “The Wealth Creation Revelation,” believes Americans are being fooled about inflation. He is especially concerned that efforts of entrepreneurs mean little when major events taking place within markets is determined by the decisions of just a few men at the Federal Reserve.

“The Fed’s PR campaign is about convincing the American people that inflation is not real,” said Bisulca. “Americans attitude is that ignorance is bliss.” In his book, the revelation that Bisulca wants people to have and to trust, is that “there is a tsunami wave of inflation coming and it is going to hit their assets.”

As policy makers discuss more economic stimulus by purchasing Treasury securities and expanding the Fed’s balance sheet, or what they refer to as ‘Quantitative Easing’, what does this really mean for the American public?

In an interview Friday with Tom Keen on Bloomberg Television, James Grant, author and editor of “Grant’s Interest Rate Observer” explained that ”Quantitative Easing is one of these Phd approved euphemisms. It doesn’t really convey the essential point. Money printing would be so much of a better step in the direction of intellectual hygiene.”

Essentially, the Fed is increasing the supply of currency in the economy. According to Maloney, the free market causes gold and silver to automatically revalue, to account for all the currency that was created since the last revaluation. In his book “Guide to Investing in Gold & Silver,” Maloney writes:

Despite the Fed’s contention that inflation remains historically low, the rise in gold indicates investors expect very high inflation rates. Of course, not everyone is on board with buying gold.

Warran Buffet, one of the worlds richest men, widely regarded as one of the most successful investors in the world advises not to buy gold, and instead to buy equities.

In a recent interview with Fortune Magazine, Buffet said, “"You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

With all the choices available for investors to put their money, it seems the basis for making an investment in gold now is a conviction that the worst is yet to come. 

By Ed Patisso

Owen Davis, 45, conceptualized and built three innovative technology companies that were later sold for profit, surviving, even thriving, through the most challenging environment for Internet startups, while most others failed.

Now he’s trying to help other technology entrepreneurs succeed.

As managing director of NYCSeed, a private-public initiative, Davis wants to fund and nurture technology entrepreneurs in New York City and move them from an idea to a marketable product.

"This is my only focus, getting innovative companies off the ground,” Davis says. “This is it, it was something I really wanted to do.”

As he sits in an armchair in the quietest area of the large, bright, open space at 160 Varick St., in SoHo, 20-somethings scurry about. The space, home to an incubator run by the Polytechnic Institute of New York University, has sizable windows, striking views and all the tools and support needed to launch a new venture.

NYCSeed is a private-public partnership of the Polytechnic Institute of New York University, the Industrial and Technology Assistance Corporation, the New York City Economic Development Corporation, the New York City Investment Fund and the New York State Foundation for Science Technology and Innovation.

Davis’s first foray into business was very different. After graduating from Brown University, he and a college roommate bootstrapped their way in an attempt to unify food delivery in New York City, so consumers could order all their food using the same phone number. “We just felt like there was no unified delivery in New York,” says Davis. “It didn’t go anywhere; it was a disaster.”

The next company was a success. Built in 1995, as the Internet was quickly becoming popular and Web sites were being built, the company was aimed at online advertising. Davis and a partner launched Thinking Media, a patented a system to measure user-side tracking, as opposed to server side. It was essentially a more accurate way to track users online. Davis’s system tracked a user to a particular Web browser, while earlier tracking systems could not account for lost connections, or other reasons why the user never made it to a particular Web browser.

Thinking Media became one of the early metrics for advertising companies and is still used today. It was sold five years later to a subsidiary of Nielsen, the ratings company, in a private deal whose price was never disclosed. “I think that portfolio and that patent has held up very nicely over the years,” says Davis.

A lot of what he was doing for Thinking Media, he wanted to transfer to mobile. This quickly led to Sonata, a mobile infrastructure company for ad serving and ad tracking. But Sonata was caught up in the dot.com bust. “It was a soft landing,” Davis says. “We did some asset sales.”

Then, in 2002, he launched Petal Computing, an early cloud computing effort – in which programs live on the Web, not on a desktop. The idea, he says, was to “take PCs, bring them together and make a cheap infrastructure so that you don’t have to call up Sun Microsystems and spend $500,000 on a server.”

He adds: “Entrepreneurs are creative, you need to be,” says Davis. I mean you could be a painter, which is no more creative than somebody who’s developing a software product.”

When the Polytechnic Institute came up with the idea of creating a startup fund, it called Davis. “Obviously part of the thing we liked was that Owen had his own track record,” says Bruce Niswander, who runs the incubator that houses NYCSeed. “Owen’s forte was that he had actually done it, successfully, a number of times vs. somebody who came out of a b school, worked for a VC then wanted to do this,” referring to venture capital.

A startup fund is an entirely different deal from a venture fund, says Niswander. The values are not only much smaller, but the early stages of development carry their own challenges. “Owen has got those skills and he’s got the desire to play in that marketplace, and that’s the strong suit we observed when we talked with him,” Niswander says.

Davis, who is from Brooklyn, put together an investment program that funded five companies with a small amount and took them through a boot camp for small business commercialization. “Owen wasn’t getting paid for it,” Niswander says. “He’s really done a great job pulling his weight with the university and the marketplace over and above just being an investment guy.”

Yoni Argaman, a corporate lawyer working on his M.B.A, is interning with Davis at NYCSeed. Argaman has had mentors and bosses in the past, but says Davis stands out. “Owen is exceptional in the way he makes sure to involve you in the process and maximizes your learning experience,” Argaman says.

Among the 13 companies it has invested in, NYCSeed has a couple of high flyers that can be found in the portfolio section of its Web site, http://www.nycseed.com/portfolio.html. Davis is eager to hear from more entrepreneurs and ready for more startups.

“I’m frustrated that there are not more startups coming out of universities,” Davis says. “I would really like to hear from entrepreneurs within universities that have done some real work on a company.”