|
I turned 50 last Friday. I had a great time Saturday night with friends and family. We drank some great wine (Lindstrom and Del Dotto cabernets) and had a fantastic meal, prepared by a guy I believe is the best chef for hundreds of miles around these parts. I'd never heard of Moroccan anchovies or hen-of-the-woods mushrooms, but they're both delicious. Over the weekend, I sat around and did little but play the guitar. It was a great 50th birthday celebration. I'm a really lucky guy.
It's hard to nail down the most important thing I've learned in 50 years of living, but one thing I learned in my first year of college comes to mind before all the others. Longtime subscribers will remember that I've told this story before, but I think it bears repeating...
When I first began studying music in college, I found the work of Baroque composer Johann Sebastian Bach tedious. It put me to sleep. Just drop the needle on the record player, and if Bach was on the turntable, I'd be out in five minutes. Needless to say, if I was going to be a music major, I had to get over this.
Then, one day, I noticed everybody loved Bach but me. Every teacher and student was ultra-passionate about Bach. You could hear students and teachers alike struggling to play his difficult music in the practice rooms. I remember Reynaldo Reyes, a virtuoso pianist, telling me Bach was hard to play... but he also said it was worth whatever you had to put into it. It was that rewarding.
So I decided to suspend my doubt and listened to little else but Bach. Within weeks, I was hooked. I was soon learning some of his works on the guitar (even though it took months to gain competence on a simple three-minute piece).
Now, instead of putting me to sleep, Bach's music energizes me. Sometimes, I play it at a low volume while I work. No other music helps me focus better. Most music distracts me while I read and write. Not Bach. It keeps me on task.
But that's not the real breakthrough... The real breakthrough for me was that I could teach myself to fall in love with something I deemed worth falling in love with, and use that newfound passion to gain some level of competence, or even mastery.
Bach once said of his great musical prowess, "Whoever is equally industrious will succeed... equally well." You may doubt that, but I don't. Bach worked constantly... similar to the way Steve Jobs worked... or the way Warren Buffett works. They fostered a love for their craft and kept at it in a focused manner. I think anyone can do this, if they'll only believe it long enough to keep working to gain competence and, eventually, mastery.
As a child, I never demonstrated any musical talent. I didn't have much of an ear at all. But I loved it and kept at it. Eventually, I got a college degree in music, played in music theatre orchestras, and even once played in an opera at the Kennedy Center under the direction of Placido Domingo.
Similarly, I knew little about investing back in the 1990s. I'd spent years playing music and doing theatre. I couldn't hold onto a dollar to save my life. But now, if I stopped working tomorrow, I'd never have to worry about money again because of what I've learned about investing. And I started out with investing the same way I started out with Bach... trying to stay awake!
Love is what's most important in life. Doing what you love, being where you love, and with whom you love. Developing a method for falling in love with any worthy pursuit has helped me lead a really fulfilling, wonderful life. That's one of the greatest secrets I learned in my first 50 years. I hope passing it along to you has some value for you.
Whenever we mention George Soros in the Digest, the mailbag lights up with nasty-grams. Most readers disagree with Soros' left-leaning politics. Regardless of his political beliefs, Soros is a master of the markets. He's amassed an 11-figure fortune (in the tens of billions). And he's one of the greatest investors in history.
In his latest op-ed for the Financial Times, Soros says it's time for the European Central Bank (ECB) to start monetizing. He joins a chorus of investors – all with European exposure – asking for a bailout.
|
The financial markets are testing the ECB and want to find out what it is allowed to do. |
|
The central bank must stop the bond run at all costs because it is endangering the stability of the single currency. The best way to do it in the near term is to impose a ceiling on the yield of sovereign bonds issued by governments that follow responsible fiscal policies and are not subject to adjustment programs. |
Soros proposes capping yields at 5%. Normally, central banks will only fix short-term interest rates. Soros says all sovereign debt should be guaranteed... exposing the ECB to potentially unlimited liabilities for decades.
While we don't agree a central bank should ever intervene as Soros suggests, we know this will happen – in some form. And we know it's wildly bullish for precious metals.
On the topic of European sovereign yields, Spain is now paying more than Greece and Portugal (both viewed as weaker countries) for its three-month bills. In the most recent auction, the average yield on the three-month bill more than doubled to 5.11% from 2.292% one month earlier. That's the highest yield since the three-month bill was reintroduced in 2003. That's a huge loss of confidence. Imagine what would happen if the ECB wasn't already buying bonds...
S&A Short Report editor Jeff Clark made his boldest call to buy gold stocks yet... And that's impressive, considering his track record. As Jeff wrote today...
|
We made 140% in one week by shorting gold (through puts on GLD) after the parabolic run-up in August. And when the bullish percent index for the sector has flashed a "buy signal," we've made gains of 80% in two weeks on the Market Vectors Gold Miners Fund (GDX), 100% in three weeks on Gold Fields, 100% in three weeks on Seabridge, 70% in one month on Kinross Gold, and 55% in two weeks on Kinross Gold again. |
This track record is incredible, but Jeff thinks he's about to do much better...
|
While the gains were pretty good, and we've likely outperformed just about everyone else trading the gold sector this year, none of the trades realized their full potential. We have to buy gold stocks here. There's no argument. We just have to do it. |
Jeff lists three strong reasons to buy gold stocks here. And his favorite stock is one of the cheapest in the entire sector... Buying this stock at its current price is like buying gold for $0.16 on the dollar. It's fallen 30% in just the past two months. It's trading at its 52-week lows (horribly oversold in Jeff's opinion). And it's about to have a big bounce.
Jeff believes readers can make 455% on this trade. It's a bold call, but considering his past performance, it's a reality. To learn more about the S&A Short Report and his gold-trading techniques, click here...
As we mentioned yesterday, the inaugural episode of Stansberry Radio – Porter's interview with investment legend Jim Rogers – is now available. In the interview, Porter leads off with a very personal question you won't want to miss. He also discusses some of Jim's favorite investments today. You can listen to the interview immediately here and subscribe to all future episodes here.
|
New 52-week highs (as of 11/21/11): None.
In today's mailbag... kudos on our gold, iron, and steel... send your e-mails to feedback@stansberryresearch.com.
"I can 100% honestly say that I wouldn't own any physical gold and silver today without Porter beating that dead horse over and over. I'm not very wealthy, and it was hard to buy because it ties up your cash, but once I started thinking of bullion as any other IRA you can't touch, it made perfect sense. I will continue to buy on the dips for as long as I can, and if I never need to cash it in, my kids will have a nice nest egg." – Paid-up subscriber Les Wilmot
Ferris comment: You want some gold and silver because they're superior to fiat currencies, like the U.S. dollar or the euro. But precious metals are not investments. They're just monetary instruments. You hold them to preserve value, NOT to speculate on higher gold prices.
All novice investors should own shares of the world's best businesses, bought at dirt-cheap prices. Then you should reinvest the dividends. This will make you more money than holding gold coins will.
If you don't read The 12% Letter, you should. In it, I publish a list of World Dominating Dividend Grower stocks. These are the best businesses in the world... companies like Wal-Mart, ExxonMobil, and McDonald's. All novice investors should buy these companies before they buy anything else, including gold and silver... though I'd definitely recommend everyone holding plenty of those, too.
"Porter, you have nerves of Steel and balls of Iron, keep on firing as you see fit. I love it." – Paid-up subscriber Russ Baker
Regards,
Dan Ferris and Sean Goldsmith
Medford, Oregon and New York, New York
November 22, 2011
How to fall in love with investing (or anything else)... Soros: 'Print us out of this!'... Spain pays up (and up and up)... Jeff Clark: bullish on gold stocks... America's suicidal travel restrictions...