Putin jolts the market... Microsoft up big on software announcement... Chicago Bridge & Iron announces $6 billion LNG deal... Rockefeller and 'picks and shovels'... The next phase of the energy boom... Wal-Mart to start selling used video games... Where to buy gold and silver...
Stock markets are up on the latest from Vladimir Putin...
Putin signed a treaty today to annex Crimea – making it part of Russia less than two days after Ukrainians voted by nearly 97% to join their eastern neighbor.
Putin also said he wouldn't seize any other Ukraine regions. Still, his moves are in direct defiance of the West, ignoring sanctions from the U.S. and European Union. The U.S., through our vicious mouthpiece, Vice President Joe Biden, has threatened further sanctions against Russia for its actions. We're sure these, too, will be ignored.
Russian markets surged more than 3% on the news... The Dow Jones and S&P 500 are both up around a half a percent. Remember, markets hate uncertainty. Sensing a resolution to the Crimean conflict buoyed the market.
However, it's bearish for gold, a "safe haven" asset in times of political instability. The precious metal is down more than 1% to $1,356 an ounce.
Software behemoth Microsoft (MSFT) jumped more than 4% today on news the company will release its Office software for Apple's iPad next week. It's a huge move for the $320 billion company.
Apple was up slightly on the announcement.
Stansberry's Investment Advisory recommendation Chicago Bridge & Iron (CBI) jumped 5% today on news that the energy infrastructure company's joint venture with Japan's engineering giant Chiyoda won a $6 billion contract to construct a liquefied natural gas (LNG) export facility in Louisiana for the company Cameron LNG, which just won U.S. Energy Department authorization to ship out domestically produced LNG. The facility is planned to handle 13.5 million metric tons a year of LNG.
CBI builds the infrastructure the energy business needs to operate... It's a classic "picks and shovels" play to profit from the energy renaissance underway in the U.S. right now.
In the November 2013 Stansberry's Investment Advisory, Porter and his research team told subscribers the story of Seneca Oil, which in 1859 became the first company to drill for oil in the U.S. In 1865, after the Civil War ended, thousands of veterans headed to Pennsylvania to make a fortune in the oil business.
Oil prices and land prices boomed and busted over the next 15 years. But all the while, John D. Rockefeller was minting cash... Instead of speculating by buying property and drilling for oil, he provided drillers with the equipment and services they needed – refining, transportation, infrastructure, and exporting.
It wasn't until 1880, after a huge bust in land prices, that he directed his company, Standard Oil, to "buy all we can get." By 1881, Standard Oil controlled 25% of the nation's oil production.
Meanwhile, Seneca went bust...
From that issue:
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Porter's subscribers are up more than 130% on the CBI recommendation. They're also up 44% and 43% on energy-transportation companies ONEOK and Energy Transfer Equity, respectively.
Now, Porter and company are turning their focus to another facet of the energy boom – deepwater drillers...
As you can see from this chart of an unnamed offshore drilling company, shares of these firms have been crushed recently...
These companies are cheap for several reasons...
First, there's no reason to pay rates as high as $500,000 a day to drill in deep water when the shale boom means oil and gas is readily available onshore. Also, BP's 2010 Deepwater Horizon accident in the Gulf of Mexico crushed the drilling industry.
Then, there's the cyclicality of commodity businesses... When oil prices are high, people drill more. Day rates for rigs soar and the drilling-services companies order more rigs. Production soars. Then, oil prices come back down and we're left with overcapacity.
Porter has been covering the domestic energy boom since 2010... He nailed the fracking trend. Now, he thinks the focus is moving offshore. From the February issue:
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The Investment Advisory team has already recommended two companies drilling in the Gulf... One is a capital-efficient company controlled by one of the greatest investing dynasties in America. The other is a "lottery ticket"... This company buys old and abandoned wells in the Gulf of Mexico, applies current technology and methods, and hopes to produce...
If this company gets a couple breaks, it could be a "10-bagger" (meaning you could make 10 times your money), according to Porter's team.
Also, in the most recent issue, Porter recommends shorting one of his favorite whipping boys. To learn more about subscribing to Stansberry's Investment Advisory (without watching a long video), click here… And if you decide it isn't for you within the first four months, we'll give you a full refund.
While Microsoft and CBI are soaring, video-game retailer GameStop fell about 3.6% on news the world's largest retailer, Wal-Mart, was moving in on its turf...
Starting next week, Wal-Mart will allow customers to trade in used video games at 3,100 of its stores for gift cards of up to $35. Customers can then use those gift cards for anything Wal-Mart sells, in stores and online.
Although retailers like Best Buy and Target accept used video games, GameStop is a leader in the market... Trade-ins were responsible for nearly one-quarter of the company's $2.1 billion in sales and more than 44% of gross profit for the quarter ended November 2.
GameStop's CEO Paul Raines said his company has benefited from competition in the past... "We win those market-share battles because we've been at it a long time," he told the Wall Street Journal.
Raines said processing trade-ins is complex and requires proper training to make sure employees value games properly and manage inventory.
Wal-Mart says its program differentiates itself because "our customers can buy groceries, socks, or a bike, which isn't the case at other retailers," Wal-Mart's chief merchant Duncan Mac Naughton told the Journal.
And Wal-Mart will sell refurbished games for less than competitors...
This isn't the first time Wal-Mart has dominated a new business category...
As Extreme Value editor Dan Ferris told me in an e-mail:
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We wish GameStop the best of luck in this battle...
New 52-week highs (as of 3/17/2014): Activision Blizzard (ATVI), C&J Energy Services (CJES), Diebold (DBD), EMC (EMC), Enterprise Products Partners (EPD), KLA-Tencor (KLAC), Range Resources (RRC), ProShares Ultra Utilities Fund (UPW), and Vocus (VOCS).
In today's mailbag, one of our readers' most frequent questions... Ask us anything at feedback@stansberryresearch.com.
"I have some money that I would like to buy some silver or gold. I get your Digest and I just can't figure out who I should buy this from. Some of this money in in stock and another is in a 401K. This is about 18,000.00 but I want to use a very reputable company. I don't know how to do this myself. I would appreciate any answers from you." – Paid-up subscriber Candy Butler
Goldsmith comment: It's important to deal with reputable folks in the precious-metals business... We always recommend our clients use Van Simmons of David Hall Rare Coins (800-759-7575) and the guys at Asset Strategies International (800-831-0007). We receive no compensation for recommending these companies... But they've always treated our readers well.
Regards,
Sean Goldsmith
New York, New York
March 18, 2014
Why government greed is good news for some deepwater drillers…
In today's Digest Premium, Porter explains why global governments' greed and corruption is creating a new investment opportunity in the oil industry.
To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.
Why government greed is good news for some deepwater drillers…
Editor's note: As we said in today's Digest… nobody has written more about the investing opportunities created by the new American oil boom than Porter and his Investment Advisory team.
And in the last few months, they've turned their attention to a new developing facet of the boom – drilling in the Gulf of Mexico.
Today's Digest Premium is from the March 2014 issue of Stansberry's Investment Advisory, in which Porter describes what's driving new exploration in the Gulf waters.
Three years after we first predicted boom profits for those who invested in the U.S.'s liquefied natural gas (LNG) energy boom... four European countries actually petitioned Congress to allow the U.S. to export more of its LNG oversupply. That would reduce European dependence on Russian gas.
Some of you may be tired of hearing about the U.S. energy boom. We've featured opportunities in energy repeatedly over the past 18 months. But the trend is real. We've told you the stories. We've shown you the charts. And now... Europe is begging the U.S. for our energy.
Our portfolio is chock-full of companies that should profit from this trend. In 2011, we first recommended capitalizing on the shale trend and new drilling technology. We stuck with this theme through 2012. Starting in 2013, we began to focus on the one form of energy that is legal to export – natural gas liquids (NGLs) – and recommended companies like Targa Resources Corp. (NYSE: TRGP), up 106%; ONEOK (NYSE: OKE), up 41%; and Energy Transfer Equity (NYSE: ETE), up 41%.
As we explained in detail in the December 2012 and April 2013 issues, certain hydrocarbons – like most NGLs and certain "processed" oil products – are allowed to leave the U.S., while crude oil and natural gas are effectively banned from exporting.
In July 2014, oil major BP will begin exploiting a new energy export loophole – "splitters." As energy economist Judith Dwarkin explains, splitters are refineries that "lightly ruffle the hydrocarbons (so) they are considered processed and aren't subject to the (export) ban."
As tensions heat up in Russia, we think you'll see more "creative" ways to harvest U.S. hydrocarbons and sell them for higher prices abroad. This year, we've turned our sights to the one part of the U.S. energy boom that we don't feel the market fully appreciates – offshore drilling in the Gulf of Mexico.
Around the world, offshore exploration can be full of unnecessary drama. Some countries make you hire inexperienced locals... or bribe government officials... or navigate through last-minute tax and regulation changes. Doing business in a predictable legal system, right next to the world's most extensive energy infrastructure, makes the Gulf especially attractive to oil companies.
Lifting costs are also relatively cheap in the Gulf... you're never more than 200 miles away from the U.S.'s massive refining and transportation infrastructure... and best of all, you don't have to bribe anybody to bid for the land. As Statoil head of North American exploration Jez Averty explains: "A barrel of discovered oil in the Gulf of Mexico is difficult to beat for value anywhere else (in the world)."
It's interesting to note that the two companies we just mentioned – the splitter-refining BP and the value-seeking Statoil – are based in the U.K. and Norway respectively... right by the North Sea. We believe the heavy fees levied by their home countries have driven these giant oil companies halfway 'round the world looking for oil.
Editor's note: If you invest in the energy sector or you're interested in learning the best ways to do so, join us in Dallas May 31 for our second Stansberry Society conference. The focus of the conference is energy and natural resources... And we've invited some of the biggest names in the business to attend – like billionaire oilman T. Boone Pickens. Texas wildcatter Cactus Schroeder, who sold his company to Statoil for $1 billion, will tell us what's going on in the shale. Porter will share his latest thoughts on our country's energy boom... And we've got several other surprises in store.
We're currently offering a small selection of "early bird" tickets to the conference for $299. But only a few are left. Once we sell out, the price goes up. To find out how to purchase tickets, click here.
Why government greed is good news for some deepwater drillers…
In today's Digest Premium, Porter explains why global governments' greed and corruption is creating a new investment opportunity in the oil industry.
To continue reading, scroll down or click here.
Stansberry & Associates Top 10 Open Recommendations
(Top 10 highest-returning open positions across all S&A portfolios)
As of 03/18/2014
| Stock | Symbol | Buy Date | Return | Publication | Editor |
| Prestige Brands | PBH | 05/13/09 | 356.3% | Extreme Value | Ferris |
| Constellation Brands | STZ | 06/02/11 | 285.4% | Extreme Value | Ferris |
| Enterprise | EPD | 10/15/08 | 272.3% | The 12% Letter | Dyson |
| Ultra Health Care | RXL | 03/17/11 | 243.3% | True Wealth | Sjuggerud |
| Fluidigm | FLDM | 08/04/11 | 227.0% | Phase 1 | Curzio |
| Ultra Nasdaq Biotech | BIB | 12/05/12 | 219.4% | True Wealth Sys | Sjuggerud |
| Ultra Health Care | RXL | 01/04/12 | 199.9% | True Wealth Sys | Sjuggerud |
| Hershey | HSY | 12/06/07 | 181.7% | SIA | Stansberry |
| McDonald's | MCD | 11/28/06 | 176.2% | The 12% Letter | Dyson |
| Altria | MO | 11/19/08 | 173.2% | The 12% Letter | Dyson |
Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any S&A publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals |
| 2 | Extreme Value | Ferris |
| 3 | The 12% Letter | Dyson |
| 1 | True Wealth | Sjuggerud |
| 1 | Phase 1 | Curzio |
| 2 | True Wealth Sys | Sjuggerud |
| 1 | SIA | Stansberry |
Stansberry & Associates Hall of Fame
(Top 10 all-time, highest-returning closed positions across all S&A portfolios)
| Investment | Sym | Holding Period | Gain | Publication | Editor |
| Seabridge Gold | SA | 4 years, 73 days | 995% | Sjug Conf. | Sjuggerud |
| Rite Aid 8.5% bond | 4 years, 356 days | 773% | True Income | Williams | |
| ATAC Resources | ATC | 313 days | 597% | Phase 1 | Badiali |
| JDS Uniphase | JDSU | 1 year, 266 days | 592% | SIA | Stansberry |
| Silver Wheaton | SLW | 1 year, 185 days | 345% | Resource Rpt | Badiali |
| Jinshan Gold Mines | JIN | 290 days | 339% | Resource Rpt | Badiali |
| Medis Tech | MDTL | 4 years, 110 days | 333% | Diligence | Ferris |
| ID Biomedical | IDBE | 5 years, 38 days | 331% | Diligence | Lashmet |
| Northern Dynasty | NAK | 1 year, 343 days | 322% | Resource Rpt | Badiali |
| Texas Instr. | TXN | 270 days | 301% | SIA | Stansberry |