Rogue Investing Report Issue 16

Hello Rogue Investors,

I wanted to wait until I had something good to tell you before I sent another newsletter. After all, why should I waste your time? Instead of sending boring newsletters every two days like most authors do, I would rather wait to give you something really worthwhile.

Actually, I have two great things to tell you.

First, as I expected, the stock market is performing very well. Remember in my April newsletter I predicted that the bear market was over and a new bull market was beginning? Many of the stocks I recommended over the past year are up at least 50 percent, and some have already doubled in value. Generic stocks still look very cheap to me. They look so good that I am profiling them in the feature article below. In my opinion, some of these stocks have the chance to go up by a factor of 10 or more over the next five years.

Second, as many of you already know, I have been researching tax lien certificate and tax deed investing. I profiled this largely unknown real estate investing method in July, but it is even better than I thought. In August I went to a tax lien certificate auction in Missouri and witnessed some of the most incredible real estate deals I have ever seen -- and I have been an avid real estate investor for over 10 years. Here is a summary of the actual real estate deals that took place during the auction I attended in Platte County, Missouri, on August 25, 2003:

**** 80 acres of commercial land with a commercial building on it sold for $7,000 dollars. ****

**** 20 acres of prime acreage sold for $8,000 dollars. ****

**** 1.7 acres sold for $393. ****

**** Multiple building lots sold for $350 dollars; in fact, there were so many building lots available that some did not even sell. ****

These are actual sale prices...I am not joking!

I am so impressed with the great bargains at these sales that I am now going to attend at least one tax lien certificate or tax deed sale per month. The next sale I am going to is a tax deed sale in Arkansas in September 2003.

If you have not gone to a tax lien sale or tax deed sale in your area, I urge you to think about attending one. At these sales, you can buy real estate for 75 to 90 percent below market value, and the recent tax lien certificate auction I attended proves it. Here are links for more information about tax lien sales/tax deed
sales:

http://www.rogueinvestor.com/government_tax_sales_book.html

http://www.tax-lien-certificates.com.

Happy Investing.

Bryan Rundell

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ROGUE INVESTING REPORT
Take control of your financial future!
Issue #16: September 17, 2003
Publisher: Mind Like Water, Inc.
http://www.rogueinvestor.com
newsletter@rogueinvestor.com

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Table of Contents
1. Feature Article: Generic Drug Companies, Possibly the Single Best Stock Investment for the Next 10 to 20 Years
2. Stock of the Month: Lannet Corporation (LCI)
3. Tip of the Month
4. Real Estate Investing: Tax Lien Certificates/Tax Deeds, The Next Real Estate Investing Trend

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Feature Article: Generic Drug Companies, Possibly the Single Best Stock Investment for the Next 10 to 20 Years
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In past issues of the Rogue Investing Report, I have talked about generic drug companies because the future for these companies looked very promising. I can safely say that since I first wrote about this industry in April 2002, things have only gotten better.

Over the next five years, some of the largest blockbuster drugs will come off patent. These drugs are currently generating billions of dollars in profits that will soon be handed to generic drug companies that did not have to spend hardly any money researching or testing the drug. Also, the risk is much less for a drug that has already been proven to work.

I have been following these stocks over the past several past months, and they have had some of the best earnings reports of any companies I watch. All across the United States, Europe and many of the other developed companies, the population is starting to age. All these people will eventually spend approximately 30 percent of their annual income on health care, adding up to trillions of dollars every year. Governments are already bracing for the huge expense to support the health care needs of this baby boom generation. One of their biggest problems is the cost of prescription drugs. Generic drug companies are one of their allies in the fight to control drug costs. Here is an article that proves the point:

http://news.moneycentral.msn.com/ticker/article.asp?Feed=RTR&Date=20030909&ID=2853122&
Symbol=US:MYL.

In 1983, many tech stocks were beginning a steady climb that would eventually lead them to market valuations of 100 billion dollars or greater. From 1983 to 2000, many tech stocks went up by 100 or 1000 fold. The same thing will happen in the health care industry. One of the best health care markets will be generic drug stocks.

If you do not want to invest in individual companies, I suggest buying a good, health care mutual fund like Vanguard Health Care. It is inevitable; the demographic trends of the aging baby boom generation will drive huge amounts of money towards health care companies. I may be a little early, but I would rather be early than too late. Health care will be the single greatest stock investing trend over the next 20 years.

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Stock of the Month: Lannet Corporation (LCI)
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Lannet Corporation is a little generic drug company that looks interesting. First, they are making a lot of money for a small company. Second, their earnings are growing very rapidly. Third, they have a much higher profit margin than their competitors. Fourth, as I described above, they are in what could be one of the best industries over the next 10 to 20 years.

Lannet Corporation also does something that I really like. They make generic drugs for other companies. This gives them some stability, even if their drug pipeline is erratic, as they still make money by making drugs for other companies. Wall Street is only valuing the entire company for about 350 million dollars. Compare this to other drug companies that are selling for billions of dollars and over the next 10 years, and this company could easily go up by a factor of 10. Remember, smaller companies like this have more risk, so do not invest money in this company that you cannot afford to lose.

LCI quote:
http://moneycentral.msn.com/scripts/webquote.dll?ipage=qd&Symbol=LCI.

LCI fundamentals:
http://moneycentral.msn.com/investor/invsub/results/hilite.asp?Symbol=LCI.

Overall, a small company that appears to have a very bright future.

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Tip of the Month
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Great investing is often nothing more than patience and the recognition of large demographic trends.

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Real Estate Investing: Tax Lien Certificates/Tax Deeds, The Next Real Estate Investing Trend
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After conducting over nine months of detailed research, I am convinced that like generic drugs, tax lien certificates and tax deeds will be one of the huge investment trends in real estate investing over the next 10 to 20 years. Until the Internet, tax lien investing was a backwoods investing method that was limited to local county experts and banks. In fact, banks and lawyers have purposely kept this lucrative real estate investing secret to themselves.

Can you blame them for hiding a great investment?

You buy certificates of deposit (CDs) at your local bank and they pay you 4 or 5 percent per year. Meanwhile, they go and out and invest your money in tax lien certificates for 18 to 36 percent per year.

Don't believe me?

Many of the tax lien certificate sales near large cities are loaded with bankers who buy hundreds of tax lien certificates at a time. When I was researching tax sales and tax sales information, it took a great deal of effort to find information on all the states and counties that have sales. I do not think
this is a coincidence. Some people do not want everyone to know how lucrative tax sales can be.

Based on my research, all states and counties have at least some type of tax sale. After a lot of hard effort, I was able to find out many of the sales procedures unique to each state and county.

My recommendation is this: Attend a tax lien or tax deed auction in your area and find a bargain for yourself. Here is a list of upcoming tax lien/tax deed auctions:

September:

-- Wisconsin
-- Arkansas (this state has sales throughout the year)
-- Pennsylvania

October:

-- Oklahoma
-- South Carolina
-- West Virginia
-- Colorado

November:

-- Illinois
-- West Virginia
-- Colorado

December:

-- North Dakota
-- South Dakota
-- South Carolina
-- North Carolina.

For more information regarding tax sales in your area, visit the following links:

http://www.rogueinvestor.com/government_tax_sales_book.html

http://www.tax-lien-certificates.com.

If you have an investing question, email me at roguereport@rogueinvestor.com.

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Disclaimer: There are no guarantees in investing. I make no assurances regarding the investment information presented in the Rogue Investing Report.

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