Dinner at '21' Club... The Atlas 400... Join us in Napa... Curzio's "Eagle Diesel" thesis is catching fire... GM/Chrysler commit to natural gas...
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I had dinner at one of my favorite restaurants in New York City, '21' Club, last night. I was meeting two applicants to our private social club, The Atlas 400. Before getting into the dinner, a bit on the restaurant's history...
To earn money for tuition, cousins Jack Kriendler and Charlie Berns opened a speakeasy in 1922 called The Red Head in the Greenwich Village. Their speakeasy moved twice... Then, Columbia University, the owners of their third property, paid them $11,000 to vacate. With that money, Jack and Charlie settled on a townhouse on West 52nd St... '21' Club's current location. With the help of their patrons, the cousins removed the wrought-iron gate outside their previous speakeasy and installed it at 21 West 52nd St. The speakeasy opened for business on New Year's Eve 1929.
This restaurant is one of the most famous in the city... It's been featured in films like Wall Street. The world's elite dine there regularly (famous and important patrons started hanging toys and memorabilia from the ceiling. The CEO of British Airways started the tradition, when he wanted to impress clients with a model airplane. Now there's not an empty spot on the ceiling.). And '21' has a secret wine cellar, which was built to hide thousands of cases of liquor during prohibition.
Last night, I was dining with a top New York City government official and a former Wall Street executive who now runs his own fund. Aaron, the maître-d', gave us the best seat in the house. It has a view of the entire dining room. This particular night, the view included a dozen beautiful women sitting at the table next to us. When the staff started gathering for photos with these girls, I asked who they were... Turns out, we were enjoying a meal with the cheerleading squad for the NFL's Carolina Panthers.
While I can't promise dinner with another NFL cheerleading squad, I can guarantee Atlas will provide you with some of the greatest experiences of your life and a host of incredible new friends.
If you're not familiar, Porter and I started Atlas three years ago. We wanted to gather the best and brightest we knew – and many we didn't – and host extraordinary events around the world. We understand the importance of personal connections in our lives... And we believed the best way to make these strong bonds was to take people away from the office and daily activities and put them in a fishing boat in Panama, or in the middle of the Kalahari Desert, or in a race car...
We're fast approaching two events with Atlas... And we'd love for you to join us. The first week of September, we're headed to Napa Valley. But this isn't Napa Valley how you'd normally experience it... We've arranged for the former winemaker at Screaming Eagle (California's most famous wine) to host us at his friend's restaurant for our welcome dinner – he's providing the wine. He's also arranged a lunch for us at a little-known winery he's involved with.
Thomas Keller, one of America's most celebrated chefs, is hosting us at The French Laundry for dinner. And Harlan, arguably the best winery in Napa, arranged for a private tasting. Harlan hosted our group last year as well, the first time it's allowed an outside group into the Founder's Room for a tasting. And last year's winemaker of the year, Cathy Corison, is hosting us for lunch and a tasting at her underground wine cellar, where we will sample 10 separate vintages of her Cabernet.
And what more can we write about our excursions to Germany? It was the club's inaugural event... and our most popular. We have enjoyed private track days at Porsche and BMW (as guests of the CEOs). We dined on Munich's finest cuisine. And we danced and celebrated under the tents at Oktoberfest. Every member who's attended this event (this year will be our third time) says it's one of the greatest experiences of his or her life...
We have a limited availability for both events. If you've been considering applying to the club, you can do so here... We'd enjoy meeting you in either Napa or Germany. Also, we're nearing the 100-member mark. At that point, we will be increasing the initiation fee – which is currently $25,000 – by 50%.
Finally, watch your inboxes... We've spent the last few months working on something special for The Atlas 400. It will be finished this month. I look forward to showing it to you when it's ready.
The Wall Street Journal just published yet another story about natural gas being used as an alternative fuel to gasoline... Small Stock Specialist editor Frank Curzio has been covering the natural-gas-as-fuel thesis all year. And now, the mainstream media are picking up on the trend. Last week, we noted an earlier WSJ article...
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Transportation accounts for 70% of the oil consumed in the United States. And transportation creates 30% of our greenhouse gases – the current boogeyman of the "climate control" crowd. Natural gas would free up oil for other uses, and it would reduce emissions... So there will be a lot of political support for this shift... |
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And right now, thanks to massive shale-gas reserves, the U.S. has an abundance of gas. "This abundance of natural gas is something we weren't expecting as a country, but it's here now. And it's a gift we should take advantage of," said Steven Mueller, CEO of natural-gas producer Southwestern Energy. "There's huge savings here and a way to help the environment." |
Already, automakers GM and Chrysler Group have committed to building natural gas-powered pickup trucks. And earlier this year the manufacturing conglomerate 3M and natural gas producer Chesapeake Energy announced a partnership to develop cost-efficient natural gas fuel tanks. Now, ferryboat operators in the U.S. and Canada are considering switching to natural gas...
Facing fare increases of 80% this year, on top of increases of 47% to 80% over the past nine years, B.C. (British Columbia) Ferry Services is considering switching its vessels to liquid natural gas (LNG). It's stealing a ploy from Norway, where ferries have operated on LNG for the past decade.
The company is planning to switch some ships to LNG starting in 2014 or 2015. It will cost $10 million-$30 million to make the switch. But B.C. Ferry could eventually save $28 million a year running its 38-vessel fleet on LNG – diesel costs increased 140% between 2004 to 2011, pushing the company's annual bill to $120 million.
"We consume 121 million liters of diesel a year so any savings we can get are huge," B.C. Ferry spokesperson Deborah Marshall told the WSJ. "We definitely believe in LNG as an alternative."
New York's Staten Island Ferry System – owner of the giant, orange ferries – recently received $3 million in grants to convert one vessel to LNG. The Staten Island Ferry transports 21 million people a year between Manhattan and Staten Island. And switching to LNG could cut fuel costs in half.
Frank's Eagle Diesel thesis centers around long-haul trucks and automobiles switching to natural gas. But ferries considering the switch underscores the value proposition behind our thesis. Frank's picks are soaring on the continued bullish news for natural gas as a transportation fuel... In total, he recommended six companies to take advantage of this megatrend. They're up an average of 16% in the past two months... And some are still in buy range.
As more and more news – like that from the ferry operators and GM – continues to come out... the stocks Frank has recommended will rise more. We think the U.S. natural-gas boom is the biggest investment trend of the decade. You won't want to miss out.
To sign up for Small Stock Specialist and access Frank's Eagle Diesel recommendations (without watching a long video), click here... You'll only pay $39 for one year. And if you decide you don't like it, let us know in the first four months and we'll refund your money, no questions asked.
New 52-week highs (as of 6/27/12): iShares Nasdaq Biotechnology Fund (IBB), Wal-Mart (WMT), and Altria Group (MO).
In today's mailbag... a priceless "boots on the ground" report from Detroit... and one subscriber asks about our favorite income-generating strategy. Send your e-mail to feedback@stansberryresearch.com.
"I have a helicopter in Detroit (and many other major cities). I was told by one of my pilots that an airplane skidded off the runway and through a fence and before EMS arrived on the scene the pilots were robbed." – Paid-up subscriber TM
"If I wanted to sell a put on a stock... Let's say I decide to sell the Sept 2012 $34 put. The current price for that put is approx $1. If someone buys that put from me, my account would receive approx. $100 correct? Since the current price of [the stock] is $34, would that stock automatically be put to me at the time of the transaction, or does the price have to drop less than $34 before being put to me? Is selling a Put the same as Shorting a stock?
"Porter, I may not be rich monetarily, but, due to the education that I received from you, Doc E., Dr. Steve, Dan Ferris, and former S&A [editor] Tom Dyson, I have my house paid off, 2 out of 3 kids college fully funded, no debt, and $175 a month extra income. Many thanks to you, and you teams, for all you have helped me to learn. I've never sold a put, so I'd like to make sure I have full understanding of what to expect the first time out." – Paid-up subscriber Dave Martin
Goldsmith comment: When someone buys an option, he buys the right, but not the obligation, to exercise it between now and expiration... Using your scenario... Say there's a put option with three months to expiration... When the stock trades below $34, there's no reason for the owner of the option (the person you sold to) to exercise it because the option would still have time value. After all, you just sold it to them for $1 so it has something close to that still left.
Let's say the stock drops to $33 a share. As the share price drops, the value of the put option increases. Now there's at least a $1 of in-the-money value PLUS the time value (around $1). Let's say it's now worth $2.
If the put owner exercises the option, he relinquishes that value in order to sell you shares at $34 that are worth $33. He would make $1. It would make more sense to simply sell the option, which would have $2 in value, making an extra dollar (which comes mainly from the time value).
From the perspective of the person who bought the put, the trade worked, but he gets more value by selling the put (with time value) rather than exercising it early.
By the way, the only time an option is automatically exercised is on the expiration date... when the exchange exercises any options that are in the money.
Regards,
Sean Goldsmith
New York, New York
June 28, 2012