AS WE START A NEW DAY ON WALL STREET …. MAY THE INVESTMENT GOD’S BE WITH YOU ………          NEWS FLASH … ……………..   NEWS OF INTEREST:    Gross domestic product (GDP) has risen smartly since 2000, but the share of GDP going to wages and salaries has plummeted from 51.5% in 1970 to its current 42.5%, and is in a 47-year downtrend ……….  In an interesting twist, the Treasury could get $355 billion in cash from thin air without increasing the debt simply by revaluing U.S. gold to a market price. (U.S. gold is currently officially valued at $42.22 per ounce on the Treasury’s books versus a market price of $1,285 per ounce.) Once the Treasury revalues the gold, the Treasury can issue new “gold certificates” to the Fed and demand newly printed money in the Treasury’s account under the Gold Reserve Act of 1934.   Since this money comes from gold revaluation, it does not increase the national debt and no debt ceiling legislation is required……   According to Coin Schedule,  Initial Coin Offerings (ICO’s) have raised $1.25 billion this year, which has now outpaced all global Angel & Seed stage Internet VC funding………….   Soda consumption in the United States fell to a 31-year low in 2016, according to statistics at Beverage-Digest, and the decline can mainly be attributed to waning demand among health-conscious consumers, what a difference 31 years makes. But in an interesting twist, Coca-Cola’s stock price is sitting at an all time record!  …….  Personal savings rates are falling sharply… According to newly revised government data, Bloomberg reports that American households scaled back their pace of savings to the lowest level in nine years at the end of 2016 as the growth of their wages and salaries slowed and Obama care health related expenses climbed dramatically ……..Credit Suisse is out with a report saying “one of the major features of the U.S. equity market since the low in 2009 is that the U.S. corporate sector has bought 18% of the overall market cap, while institutions have sold 7% of the market cap! What this means is that there has been only one buyer of stock: the companies themselves, who have engaged in the greatest debt-funded buyback spree in history  …………..  Has SILVER production peaked! 2016 was the first year in more than a decade that saw SILVER production decrease year over year. Add to that SILVER has also been trading at a physical deficit to demand for the last 4 years and 5 of the last 6 years and is expected to continue at a deficit again in 2017…. Even more interesting – 70% of SILVER is produced as a byproduct of Copper mining and Lead/Zinc mining operations meaning that there is real scarcity once demand picks up…. recently released a report showing that the top 5 states in the U S contributed to 40% of the total U S GDP. The leading state was California at $2.11 trillion or 13% of total U S GDP, second was Texas at $1.46 trillion or 9.5% of GDP and third was New York at $1.28 trillion or 8.4%. Ranked number 4 and 5 were Florida at $769 billion or 4.8% and Illinois at $680 billion or 6.3% …….         NEWS OF INTEREST: The U.S. marriage rate has dropped from 8.2 per 1,000 in year 2000 – to its lowest rate ever at 6.8 per 1,000 based on most resent statistics ……..      NEWS OF INTEREST: The Buffett Indicator which measures corporate equities as a percent of GDP shows that the stock markets are now at their second highest valuation point in history – 127.17% of GDP.  The record stands at 153.62% of  GDP,  and was reached at the top of the market back in 2000.   Stocks are now over 2 standard deviations above the mean of approximately 74% of GDP ……….       Census         News:    The U.S. Census Bureau Homeownership Data.  It Confirmed That The Homeownership Rate Continued To Fall To A New Multi Year Low, Coming In At 63.5%, Which Is Just Off The Lowest Reading Since The First Quarter Of 1967.   The All Time Record Home-ownership Low Stands Just Below That At 62.9%, And Was reached 50 Years Ago In 1965 At 62.95%   ……….               NEWS OF INTEREST:    Meet BRAEBURN CAPITAL, The Worlds Largest “Hedge Fund”, Managing $203 Billion …….. Braeburn Capital is the worlds largest hedge fund, and is more than $30 billion larger then what was previously thought to be the largest hedge fund in the world, that being Ray Dallio’s Bridgewater. But the question of the day is – has anybody ever heard of Braeburn Capital? Hint …… Braeburn’s headquartered in Reno Nevada, and it’s mother company is a Cupertino-based company that got its start in a garage many years ago. Still wondering, well here’s a second hint….The company is named after a fruit of which the old saying goes, one _ _ _ _ _ a day is said to keep the doctor away! Got it …. Yes, If you guessed Apple you’re right. Apple is the owner of Braeburn Capital of Reno Nevada and Braeburn’s job is to manage all of Apples cash. And as you can tell by now, Apple has a big stash of cash to invest!                     NEWS OF INTEREST: A recently Released USA TODAY/ PEW RESEARCH Poll Shows That 75% Of Americans See Politicians As Corrupt; 2-to-1 Now Distrust The Police ……….       New Flash ……. Bloomberg:  The CEOs of 350 Standard & Poor’s 500 companies made 331 times more than their employees in 2012, up from a ratio of 46-to-1 in 1983 …. Technology News Flash ….. Did You Know That BlackBerry Has Recently Released The Worlds Most Private Super Secure Tablet, Using IBM Confidential Data Software and in Collaboration with Samsung …. Question: Is The BlackBerry SecuTablet Uncrackable? The German Government Thinks So, And Have Already Placed Their Order!           News Of Interest …. Former SEC Director John Ramsay Admits: The Markets Are Rigged, SEC Director of Trading & Markets, John Ramsay tells Bloomberg he ”had red tape over his mouth,” but now he is ”uncorked.” He says the current markets of today are built to favor insiders and that the system is broken! Ramsay goes on to say, “The current market ecosystem is not sustainable, and significant changes are coming one way or another,” ………. .DATELINE 2015:        The Census Bureau Announced That Home-Ownership Continues On A Downward Slide And Is Now Back To 1994 Ownership Levels Of 64%. Accordingly, 2014 Was The Largest Decline In Home-Ownership Rates Ever!            DATELINE NEWS …… Bond Guru JEFF GUNDLACH of DOUBLE LINE CAPITAL said today that he thinks ALL of the job creation since 2007 has been oil fracking related. As proof, he says that if you extract the data from Texas and North Dakota, you will see no growth in what remains. GUNDLACH thinks this may present a real problem for the Fed and the economy!       DATELINE NEWS: DEBT …… Total Credit Market Debt has grow at an exponential clip of 8% per annum over the last 6 decades. Chris Martinson says we are now in the servicing of our debt ”business” which enriches no one. Even worse, nobody knows how to fix it!         DATELINE NEWS OF INTEREST…… Charity Group Oxfam Research said in a report published recently, that the share of world wealth owned by the top 1% has increased from 44% in 2009 to 48% in 2014 and is expected to reach 50% next year, while the least well-off 80% currently own just 5.5% of world wealth! The scale of global inequity is simply staggering! It is the widest wealth gap ever seen in world history.       DATELINE NEWS: California is set to become the 7th largest economy in the world by surpassing Russia, Italy and very soon Brazil. Interestingly Brazil’s population is five times larger then California’s! California leads the United States in agriculture, technology and manufacturing revenue and has more S&P 500 companies headquartered there than any other state! But there is room for improvement as California has the highest poverty rate in the nation at close to 25%.         DATELINE 2015….. Records are made to be broken, but not this one … The S&P 500 did not drop more than two consecutive days during the entire year of 2014, this is a new all-time record, and one that will probably never again be broken ……


Incorporated in 2000, Oak Tree Asset Management Ltd. is owned and operated by John E. Schultz Jr.. Now that you’re here, why not spend a few minutes and learn a little bit about John…

John Schultz started his career on Wall Street in the summer of 1969 at the age of 16. His first opportunity was working for a broker named Henry Quigley and Henry’s newly formed brokerage in partnership with Richard Goforth. John’s first job with the brokerage was to drive Henry from the Newport Beach office to Hollywood every day for a TV show on LA’s financial TV station KWHY-TV. During the show, John would work in the news room breaking down news articles for the KWHY news anchors to use on the air. It was an exciting era and John met many important and influential people of the time, including Gene Morgan. Gene was made famous by his popular show called Charting The Market. Others of note included Gene Inger, one of the best and most intuitive market writer’s of our time, along with news anchor’s George Shart, and Terry Mayo, among many of others. Interestingly, John is still friends with Gene Inger all these years later. 

At the age of 20, John became the youngest stockbroker (at the time) in the State of California by passing the new “Series 7” broker exam. Shortly thereafter he was hired by his sponsor Cruttenden, Gust and Merhab, a brokerage firm in Newport Beach, Ca..

In 1974, Mr. Schultz went to work on the floor of the Pacific Stock Exchange, a majestic old building built in 1931 and located on Spring St, in downtown Los Angeles. His goal was to learn and understand everything about the stock market ‘specialist system’ and how it worked in creating ‘efficient trading markets’. It turned out to be a very exciting, successful and rewarding  experience. 

By mid 1975, John was back from the Pacific Stock Exchange and again working for Cruttenden, Gust and Merhab.  Shortly there after the firm became part of Hornblower, Weeks Hemphill, Noyes, at the time the seventh largest stock broker in the country and founded back in 1888.  After a number of mergers, Hornblower became Shearson, and  by 1982 John had moved on, enticed by an offer from Paine Webber.

Although working full time, John was still able to finish up college and graduated from California State University Long Beach, with a Bachelor of Science in Business Administration in 1977.  During his studies at Long Beach, John was awarded the Investment Genius Award in Fall 1974 by the School of Business. (this while also working full time on the floor of the Pacific Stock Exchange).

After Paine Webber, in 1985, John was asked by long time friend Walter Cruttenden to be a part of a new brokerage firm he was building, Cruttenden and Co..  The firm Cruttenden and Co. later became Cruttenden Roth and ultimately, Roth Capital in Newport Beach, California. Walter Cruttenden became most famous for and was the innovator of the Cruttenden Small Cap Growth Conference, now referred to as the Roth Capital Growth Conference. Walter and John still talk regularly. Of note, Walter Cruttenden and his son Jeff are the co founders of a new start up called Acorns, In recent conversations with Walter, he indicated that Acorns may reach a billion dollars under management by year end 2017. 

By 1986 John wanted to take advantage of statistical opportunities he saw in stock markets, real estate markets and other interesting risk propositions, and moved his full time efforts to CSG Spectra Inc., which he had personally formed in 1984. From 1986 to 2000 John and his computer programmer’s built computer algorithms on a variety of situations that involved risk probability outcomes. This proved to be an extremely profitable experience and still is to this day.

By 2000 Mr. Schultz could see the immediate opportunities presented in stock market day trading volatility and formed Oak Tree Asset Management Ltd. By 2006 John had during the previous 6 years traded well over a billion dollars in his various personal and managed entities and netted millions of dollars for himself.  Soon thereafter John could at this point see that markets and volatility were on an unsustainable pace and setting up for potential disaster, it was just a matter of time, and he made preparations to change gears from a short term trader to a research oriented analytic and longer term investor. Interestingly, much of John’s early directional research involved companies associated with a relatively new quasi government CIA controlled investment entity called IN-Q-Tel.

Fast forward to 2007- 2009, and we had a period of unimaginable excesses, and then devastation as the financial crisis hit the world head on. Out of this came a new bull market, but one different then any before. The new paradigm consists of low interest rates, huge corporate borrowing to finance dividends, and specific targeting of company buy backs solely to help earnings grow while revenues are stagnant or falling. Lacking in this paradigm is new capital spending needed to help fuel innovative corporate growth similar to what had so successfully pushed past bull markets of 1982 thru 2000. Yes, this time it’s different, and it really is. Currently the question most asked of John is  “when does this (government manipulated) directional buying stop”. The answer….he doesn’t know, nor does anybody. It will stop when governments lose control of things (again), and it will most likely involve something different then subprime loans which took us down back in 2007-2009, yes it will likely end in a disaster, but nobody knows when or what the trigger will be. Best guess is It will assuredly be caused by something involving record amounts of derivatives, and in an area that nobody gives much thought to. (A few possibilities might include China’s rapidly rising debt and economic slow down or currency devaluations around the world, war in the Middle East … or a natural disaster such as a super volcano eruption in Yellowstone National Park). Now we can add one more, a targeted electromagnetic pulse attack possibly from an adversary including North Korea or Iran. An EMP attack can be caused by the sun, by a nuclear EMP (NEMP) in the atmosphere, or a non-nuclear electromagnetic pulse (NNEMP).

John is now an independent investor, research analyst and a prolific master blogger. Research will be more important then ever going forward and it’s what he’s most proficient at.  John targets unique early stage genesis investment ideas in undervalued companies with forward growth in both sales and earnings while often selling at discounts to book value. It is where the intermediate to longer term future with Wall Street lies, and this is where the potential for big out sized returns reside. Being independent means John is owned by no one, and takes no money nor has any bias towards companies written up in his research reports, known as Oak Tree Asset Management’s  “Stock Review and Forecast” reports. 

We hope you enjoyed this historical date line from John Schultz’s past.

May the market Gods shower you with happiness and a profitable stock.


Oak Tree Asset Management Ltd.