Editor's note: To make big money in the junior resource sector, you've got to buy stocks before they're popular. Once the crowd starts buying, it's usually too late. That's why our natural resources specialist Matt Badiali developed a proprietary system to signal "buy zones" – the perfect time to buy a junior resource stock. He describes his system below...
To trade with the S&A Junior Resource Trader, you have to become familiar with "buy zones."
To get into big resource winners before the crowd does, we use a proprietary trading protocol that factors in the daily trading volume, price action, and momentum reading in a given stock. Only when a company meets our requirements do we recommend purchasing the stock.
Just like our list of elite junior resource companies, our exact "buy zone" protocol must be kept under lock and key.
Again, this is to make sure S&A Junior Resource Trader subscribers get the best entry price possible into our recommendations. We simply can't reveal our proprietary model or what companies we plan to use it on.
For example, on August 30, 2010, the system told us to buy Fortuna Silver Mines (FVI), a small silver miner. At that time, silver miners were doing well. Many investors would have hesitated to add another to their portfolios. That kind of thinking will keep you out of a market when you should be in.
If you purchased Fortuna on that day, you'd be sitting on a 60% gain today... less than three months later.
That's not the only story of short-term success.
The system told us that uranium explorer Mega Uranium (MGA) was in a "buy zone" on September 13, 2010. Few investors were thinking about uranium then, but if you bought, you're up 41% in two months.
The most important thing to keep in mind is, our protocol is designed to only buy companies that are about to enter into big uptrends... the kind that can turn $2,000 into $20,000 in less than a year. Our protocol alerts us to companies about to have a serious "tailwind" blowing in their favor.
I know we've thrown a lot of information your way this week in the Digest... But making a fortune with the S&A Junior Resource Trader boils down to three simple keys:
Buying the world's best junior resource explorers and producers.
When...
The "big trend" wind is at their back.
And...
When the market is starting to recognize the value of the company's management team and its prospects.
Tomorrow, in our final JRT-focused Digest, we'll discuss when to sell. Junior resource stocks are among the world's most volatile. Knowing when to hold a losing position or cut losses is tantamount. After all, the only way to get super-rich trading junior resource stocks is letting your winners achieve extraordinary gains.
I know this week's Digests are dedicated to the Junior Resource Trader, but this tidbit of news was too good not to publish...
The victim of Porter's vocal assault, OBAMA!'s "car czar" Steve Rattner, is in the headlines today... And it's not because of General Motors' initial public offering. New York Attorney General Andrew Cuomo filed two lawsuits today accusing Rattner of bribing folks to invest in his private-equity firm, Quadrangle.
Cuomo wants at least $26 million from Rattner and a lifetime ban from the securities industry. Separately, the SEC announced today that Rattner agreed to pay $6.2 million to settle similar charges. Rattner issued the following statement:
While settling with the SEC begins the process of putting this matter behind me, I will not be bullied simply because the Attorney General's office prefers political considerations instead of a reasoned assessment of the facts.
This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity – and I certainly did not violate the Martin Act. That's why I intend to clear my name by defending myself vigorously against this politically motivated lawsuit.
The suit alleges Rattner secured investments for Quadrangle by arranging for a firm to distribute a movie produced by David Loglisci, the New York retirement fund's chief investment officer, and his brothers. Rattner also allegedly contributed $50,000 to the reelection campaign for former New York Comptroller Alan Hevesi.
So far, Hevesi pleaded guilty to a corruption charge and agreed to cooperate in Cuomo's investigation. In total, seven people – including Hevesi and Loglisci – have pleaded guilty. Rattner hasn't, though he exercised his Fifth Amendment right not to answer questions under oath 68 times.
New high: Keyera Facilities Income Trust (KEY-UN.TO).
In today's mailbag, once again, someone accuses us of fraud. Send your recriminations to feedback@stansberryresearch.com.
"I have been a subscriber to Matt's S&A Resource Report for a few months now and have enjoyed, learned and profited from that association. Will the Resource Report still be published or will it be deleted (or maybe merged into) the new letter? While I also subscribe to, and enjoy, a couple of your other publications, Resource Report has been outstanding and I hope it continues. Keep up the good work with all your newsletters." – Paid-up subscriber Bob Brewster
Goldsmith comment: We will continue to publish the S&A Resource Report as normal.
"I recently signed up for [Resource Report], now there is a new one... so I have to sign up for both to get the complete story? You guys are looking suspiciously like hype artists selling more and more overlapping reports, all intended to 'upgrade' to some version of your Alliance packages. I'm liking this less and less... contemplating dropping all of them rather than signing up for more. What am I missing?" – Paid-up subscriber GHS
Goldsmith comment: Your subscription to the S&A Resource Report already gives you (and will continue to give you) the "complete story." If you'd like another story, subscribe to the S&A Junior Resource Trader. Matt's new service will focus on smaller, more illiquid, and more volatile stocks than Resource Report. It can only accommodate a small number of subscribers, which is why the advisory is separate from Matt's other efforts... and more expensive.
Matt's track record in the Resource Report sports numerous triple-digit winners, so I don't know how you could call us "hype artists." As always, you're welcome to a refund on anything you purchase from us... But before doing that, read the e-mail below...
"In response to the question from Rowland regarding subscription information related to the S&A Junior Resource Trader that Alliance members have already received our first issue, at NO CHARGE. It was a very interesting read. Just one more reason to maintain an Alliance membership, as if any more were really necessary. It is truly hard to believe you passed up a hanging curve like that! You must be slipping in your old age. If Mr. Badiali even comes close to duplicating the success of his current work with this new offering, I am not sure how you would even begin to assess a 'fair market value' for a subscription." – Paid-up subscriber Ken McGaha
Regards,
Matt Badiali and Sean Goldsmith
Zurich, Switzerland and Baltimore, Maryland
November 18, 2010