Put Marc Faber, publisher of the Gloom, Boom & Doom Report, in the inflation camp. He says the government's money printing will cause stocks to outperform cash and bonds – an obvious statement for anyone with a basic understanding of inflation. But he goes further and, in classic Faber fashion, says the $12 trillion the government has already lent or committed will have "dire consequences" in the long term. The government "will print like never before," which will reduce foreign investments in the U.S. and destroy the dollar, he predicts. Faber recommends buying pharmaceutical stocks, like Johnson & Johnson, to profit from an aging population, and oil stocks, which he says are inexpensive.
Speaking of oil stocks... In my newsletter, PSIA, we started out this year buying the drillers and selling calls against them – netting us gains of more than 30%, safely.
Now, we're buying drillers outright. In fact, my latest recommendation was a driller – trading for about 30% of book value. I think it will be my biggest winner through next year. We're already up almost 60% since the beginning of the month, but the stock is still well beneath my "buy up to" price. It could easily double from here. And I'm not the only one who sees the upside potential. The largest shareholder in this energy company, one of the world's richest men, just disclosed he bought an additional 4.2 million shares, bringing his stake to 19.9%. To gain access to my latest recommendation, click here...
The SPDR S&P Homebuilders (XHB) exchange-traded fund has soared 93% off its March lows on expectations of inflation increasing property values nationwide...
But the rally may be overdone, according to the CEO of one of the nation's largest homebuilders. Robert Toll of Toll Brothers dumped 198,000 shares of his company's stock on September 17 for $4.4 million and exercised options and sold an additional 1.5 million shares for $33 million on the same day. His brother, Bruce Toll, dumped 152,000 shares on September 17 for $3.3 million. Toll Brothers' stock is up nearly 30% over the past six months – much less than the 76% gain for KB Home and the 98% gain for Lennar – but apparently the Tolls think even that move is too much.
And speaking of insider activity, the latest Inside Strategist features an interview with one of the world's foremost gold analysts and insiders, John Doody. In the interview, due out tonight after market close, John discloses two of his favorite gold stocks right now. Inside Strategist subscribers are up as much as 40% on the last gold stocks John passed along. If you believe the government is printing this nation down the toilet, you won't want to miss this interview. Click here to sign up...
Short Digest today... I'm off to a meeting in New York with a rival publishing company, and Goldsmith is leaving for Munich today – to attend the inaugural Atlas 400 event. We're booked solid for the racing leg of the trip, (on BMW and Porsche's private tracks), but have a couple extra tickets to our beer tent in Munich, so if you'll be in the area, get in touch (sean@theatlas400.com).
If you're missing the Germany event, no worries... We're sending out details on our next event, a trip to Argentina for the grand opening of Doug Casey's new development, La Estancia de Cafayate, when we return. As we said, we're arranging for a private jet to shuttle members from Miami directly to Cafayate. We'll enjoy fine local wines, traditional Argentine grilling, or "asado," hiking, horseback riding... it's the perfect chance to relax and enjoy the beautiful setting – and spend time with Doug, Rick Rule, Bill Bonner, and several other founding members of The Atlas 400. We've got room for approximately 18 people on this trip, and the spots are almost gone. The dates are October 29-November 2. If you'd like to join us, let Goldsmith know (sean@theatlas400.com).
New highs: Morgan Stanley Emerging Markets (EDD), PowerShares Insured National Muni Bond (PZA), Hatteras (HTS), Cresud (CRESY), Annaly (NLY), Visa (V), Korea Electric Power (KEP), Fairfax Financial (FFH).
In the mailbag, all hail Sjuggerud, whose recently closed-out Seabridge Gold recommendation is now No. 1 in the Stansberry & Associates Hall of Fame. What other recommendations of ours have made you a fortune? We'd like to know: feedback@stansberryresearch.com.
"You seem to have neglected to move Dr. Sjuggerud's pick of Seabridge onto the S&A Hall of Fame list when it was removed from the Top 10 Open list. I do believe Seabridge is slated for the No. 1 spot in the Hall of Fame. Thank you Dr. Sjuggerud!" – Paid-up subscriber Ken McGaha
Porter comment: We didn't want to give Sjug the crown, but alas... we have no choice. Now, where can I find a stock to beat him?
"Just writing to say THANK YOU Steve for your great Seabridge research. I bought 3,000 shares on 7/11/2005 for $3.25. I sold some all the way up, the first on 12/2005 when I sold 1000 shares for $10.26, reducing my risk on the trade to 0. I sold another 200 shares 10/11/2007 for 33.63, 700 shares on 7/2/2009 for $27.62 and finally closed out the trade today with the final 1000 shares for $29.65. All told $68,614 on a $9,760 investment. Surfs up!" – Paid-up subscriber Andy S.
"Hi Porter... I have always aspired to be independently wealthy and not have to work for a boss [so] I have made the decision to move on from my dead end job and immigrate. Yes – I am off to Panama. I wanted to thank you and your team for giving me and my wife the confidence to move on with our lives, despite what is going on around us in the markets.
"I learnt financial techniques that I did not learn at college and I have a new world view that is far better to receive opportunities over the next decade. Your Put Strategy has help me beat the market this year without huge risk and the covered calls strategy has generated sufficient income to support our various projects... I am confident in buying bonds – never thought I would. My gold and energy positions from Matt Badiali are doing well, and I thoroughly enjoy Dan Ferris's writings on value stocks...
"Confidence is a gift no one can take away, not even the IRS. I wish all your subscribers well over the next few years – the road will be bumpy but we will survive... not with any help from the government! I really enjoy your writing and I hope that you have great success in the future." – Paid up subscriber Chris H
Regards,
Porter Stansberry and Sean Goldsmith
Baltimore, Maryland
September 23, 2009