OTCQB versus S&P 500

A funny happened in the last couple of weeks – the global weaknesses in the economies around the world have shone through.  China, the powerhouse economy growing at over seven percent (7%) a year (see the World Bank’s numbers at 7.7% in 2013, 7.8% in 2012 and so on on their website) has stumbled.  Our own Federal Reserve doesn’t know if it will raise the rate it lends to banks.  Europe is in the midst of a crisis of immigration and other issues. To steal a line from Ghostbusters

…real wrath of God type stuff.
…, dogs and cast living together… mass hysteria…

SO what does this mean for us, the micro-cap investors who believe in the little guy and who work in and around entrepreneurs who aren’t part of the S&P 500 index?

A little notoriety

An article in the New York Business Journal entitled “Early – stag companies fair better on the OTCQB than S&P 500 during these turbulent days” is an interesting view of what is happening right now.  Of course, OTC Markets loves the exposure and they have shared this article with many of us who follow them (I would recommend joining their mailing list).  In essence, the OTCQB hasn’t seen the decline that the S&P has (take a look at the OTCQB index on the OTC Markets’ website).  The OTCQB index has only declined by 3.31% in the two week period ending August 28th, 2015 versus the S&P 500 dropping by 5.46%. Why?

First, why are the S&P 500 companies highly sought after by investors?  Because they are big enough to ride out ups and downs.  They are big enough to have robust operations.

Secondly, why are all the globe’s markets down?  China is a harbinger of the global economy being a slump / recession that is deeper than we expected.  Our economy really hasn’t rebounded that much from the 2007 debacle.  Now the rest of the world sees that.

Lastly, the OTCQB is a “venture” marketplace.  The risk is already figured into the stock price since investing in these stocks are smaller and don’t have the resources that the S&P companies do.  But therein is where they fair better in down markets – we’re placing a bet that these guys will graduate to the S&P 500 someday.  That risk isn’t greater because the world’s markets are basket cases.  In fact, that means that innovation and risk takers will be rewarded to an even greater extent.

My conclusions

2015 through 2020 will probably be sideways markets – giving up as much as they give.  Including some up and coming stocks in your portfolio is how I’m mitigating the risk that my portfolio does absolutely no growing during that time.  Of course, I am focused on bonds for current income, but that is pitiful right now.  All in all, it’s a good time to ensure that your business operations yield lots of cash and worry about where you’re going to put it all.  Happy hunting…

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Posted by on September 8, 2015 in Business, Public markets


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Going public costs, more than you would think…

Going public always costs more than one would think, even someone who is involved in the industry and has taken many companies public over their careers.  Recently we put together a cost estimate for one of our clients based upon a go public project last year.  We normally say going public costs $250,000 and an on going annual cost of $250,000 for the clients we normally provide services for.  What emerged was a cost of approximately $200,000 without any internal costs (which we normally include in the costs as well as recruiting costs for board members, executives, investor relations professionals, stock transfer agents, CPA’s, auditors, and others).

We provide the approximately breakdown here for reference only – please do not take these as non-volatile nor fixed in any way.  Please do not use these outside of for discussion purposes only!

This “Go Public” cost estimate document is copyrighted in 2015 by Rhodes Holdings LLC, all rights reserved.


Posted by on September 1, 2015 in BLOG


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Your business plan on steroids

As you can imagine, our organization sees a lot of business plans – good and bad ones.  The ones that stand out to me are the ones that concisely state their business model and do so in a simple format.  I am not talking about the formats that look like they paid a huge sum on graphics designers, I’m talking about the ones where they know the key performance indicators of their business, they’ve planned their progression and they show the goals associated with that progression.

The article “18 Ways to Make Your Financial Model Stand Out to Investors” by David Teten seems like he is of the same thought process that I am.

Also, while you’re reading articles, I found this article “How to do guarantees right. And how we grew a business by 49% by adding a guarantee.” by the Conversion Rate Experts website.  This is something that one of Rhodes Holdings LLC’s sister companies, Online Sales Juggernaut, is dealing with right now.


Lately, Rhodes Holdings LLC is doing a great deal of funding, but not public companies – private companies.  We have a sister website, Key To Funding, that is making great progress in bringing in new clients.  We have done a number of fundings in the past three months – equipment leasing, factoring (including spot factoring), acquisition financing, and other formats.  We’re very excited about our progress.


Posted by on August 13, 2015 in Business, Entrepenuers


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OTCQB Snapshot

Go to for more information straight from the source of this infographic.


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The only 10 slides you need in a pitch

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Posted by on July 1, 2015 in BLOG


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Politics explained

The other morning, my children asked me a question that launched me into a discussion of the political parties.  Although I felt that the discussion that ensued was balanced and fair as well as put both conservatives and liberals in their respective doghouses, I am sure that those on the opposite side of the isle would say that I was a conservative Republican wonk at best and a twit at worst.

Here is the jest of my conversation with my three inquisitive, budding historians and political scientists…


Instead of going through the long drawn out definitions, I will use some that an 11 year old will understand, which do not necessarily jive with what political parties in the U.S. would allow –

Liberals believe that we as a people should help our fellow man.  Conservatives believe that we need to help our fellow man.

Liberals care about people to the exclusion of all else.  Conservatives believe that we should help people within the confines of our ability.

Liberals ignore the Status Quo (also known as “the way things are“).  Conservatives believe that past and historical lessons can show us how to handle current issues.

Liberals have a heart.  Conservatives are heartless – they let their brains dictate how they help their fellow man.

Wikipedia has this definition of “Liberalism“:

Liberalism is a political philosophy or worldview founded on ideas of liberty and equality. The former principle is stressed in classical liberalism while the latter is more evident in social liberalism. Liberals espouse a wide array of views depending on their understanding of these principles, but generally they support ideas and programs such asfreedom of speech, freedom of the press, freedom of religion, free markets, civil rights, democratic societies, secular governments, and international cooperation

And this definition of “Conservatism“:

Conservatism as a political and social philosophy promotes retaining traditional social institutions in the context of the culture and civilization. Some conservatives seek to preserve things as they are, emphasizing stability and continuity, while others, called reactionaries, oppose modernism and seek a return to “the way things were”. The first established use of the term in a political context originated with François-René de Chateaubriand in 1818, during the period of Bourbon restoration that sought to roll back the policies of the French Revolution. The term, historically associated with right-wing politics, has since been used to describe a wide range of views. There is no single set of policies that are universally regarded as conservative, because the meaning of conservatism depends on what is considered traditional in a given place and time.

And this very interesting article on their contrasts from 2005 on Student News Daily.

An example

So here was my point with the kids, and I use my sister who I consider liberal and her friends consider conservative (thus illuminating the end of the conservative definition above in that no one definition of conservatism is shared), as my example.  I will use Obamacare as my example –

  1. True Liberals want everyone to have near universal access to healthcare.  Americans, who in general want to do good and help their fellow man, flock to the cause and elect someone with the slogan “Hope and Change” so that they can put this into action.
  2. Pseudo – Liberals who are interested in nothing else other than their own POWER co-op the liberal cause and enact the bill.  This enlarges their POWER.
  3. The American public elects True- and Pseudo- Liberals to CONGRESS.
  4. True Conservatives see the healthcare bill as unsustainable and that it will “break the bank” of the country.  They agitate for repeal of the bill and a return to modest changes to achieve the same aim.
  5. Pseudo – Conservatives who could care less about anything other than POWER accept the role of standards bearer for repeal of the bill.
  6. Obamacare shows some great aspects!  Liberals are overjoyed.  Conservatives secretly are optimistic that it will help but still voice opposition.  The Pseudo- versions of each are locked in ferocious battle, really over POWER.
  7. Obamacare costs spiral out of control (my viewpoint, a given), and overall the administration spends TRILLIONS of DOLLARS.  This debt is sold to, you guessed it, THE RICH.
  8. The public now feels like they were sold a bill of goods on the bill and elect more True- and Pseudo- Conservatives to CONGRESS who promise to repeal the bill.  They don’t have a good alternative though.
  9. Using the True- Conservatives’ battle cry of fiscal responsibility, the True- and Pseudo- Conservatives begin to dismantle the bill and cut taxes (the battle cry of Conservatives of all ilks since Reagan), which as you guessed it, causes the economy to swagger like a drunk man after a binge.
  10. Now, the POOR, who the True- Liberals wanted to help in the first place are hurt because of the Conservative approach to righting the ship.  Who reaps the early benefits of the changes put into the economy now – you guessed it, THE RICH.

And thus the cycle continues before the either of the changes could really take effect – either the original goal of near universal access to healthcare or doing that in a sustainable budgeted manner.

Who benefits?



So who are these Pseudo- guys?

As you can tell from my description above, I believe that there are large groups on both sides of the divide that really don’t care and would rather consolidate POWER than really focus on either agenda.  So who are these guys anyways?

Well, that is for each of you to choose.  I personally will not divulge my list of these Pseudo- Liberals and Conservatives, but i believe that most of us have a list.  I am sure there are some that most of us feel care nothing for us, THE ELECTORATE.

Mapping Liberals and Conservatives to our American political parties

Now this is the question – who is a Liberal and who is a Conservative?  In general, the following formula is assumed:

LIBERAL = Democrat


But that is a terribly out of date notion, at least I believe.  Many of my own views don’t fit into either party – wow, does that make me an INDEPENDENT?  Does that make me a LIBERTARIAN?  Tell me what you think, and next posting will delve into this notion.

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Posted by on May 22, 2015 in BLOG


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Arrayit Corporation Subsidiary Avant Diagnostics, Inc. Acquired by American Liberty Petroleum Corporation

Rhodes Holdings LLC:

ArrayIt Corporation is a majority shareholder of Avant Diagnostics, Inc., and thus will be a large shareholder of American Liberty Petroleum Corp.

Originally posted on American Liberty Petroleum Corp.:

SUNNYVALE, Calif., Dec. 31, 2014 (GLOBE NEWSWIRE) — Arrayit Corporation (OTCQB:ARYC) announces that its subsidiary Avant Diagnostics, Inc., a medical technology company developing cutting edge medical diagnostic tests, has been acquired by American Liberty Petroleum Corporation (OTCBB:OREO). The board of directors and a majority of shareholders of American Liberty Petroleum Corporation have authorized a number of corporate actions in order to complete the acquisition, including a reverse split, a name change, authorization of Preferred Stock, and filing the required SEC disclosure statements. Upon the effectiveness of these corporate actions, Gregg Linn, Avant’s CFO, will join the board of directors of the company as CEO and President.

In cooperation with Arrayit Corporation and DOCRO, Avant Diagnostics, Inc. is pursuing FDA approval of the market’s first large panel biomarker monitoring and screening test for ovarian cancer. OvaDx® is an advanced microarray-based test that measures the activation of the immune system in…

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Posted by on December 31, 2014 in BLOG


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