I'm writing today's Digest from the Amtrak Acela train... And I'm surfing the Internet. Yes, 10 years later than everyone else, Amtrak installed wireless on its trains. And it's bragging about its "accomplishment" all over its website and train stations. That's government innovation for you.
You may not know this, but Amtrak (aka the National Railroad Passenger Corporation) is a government corporation, just like the post office. And just like the U.S. Postal Service, Amtrak is perfectly hedged... It loses money in every market. Revenues for 2007, 2008, and 2009 were $2.1 billion, $2.4 billion, and $2.35 billion, respectively. That's barely enough to cover payroll. The company's net loss for each of those years was around $1.2 billion. And that's in addition to the billion-dollar-plus government subsidies. Meanwhile, the company is experiencing record traffic. In 2009, the company carried 27.2 million passengers – the second-highest in company history (28.7 million passengers rode in 2008).
But no worries... Amtrak is designed to lose money. From the 2008 annual statement:
The Company has a history of recurring operating losses and is dependent on subsidies from the Federal Government to operate the national passenger rail system and maintain the underlying infrastructure.
Is the government trying to stop this cash hemorrhage? Of course not. In January 2010, OBAMA! granted $8 billion for 31 states to expand and develop inter-city and high-speed rails (60% of which will be used by Amtrak). Instead, we'll magnify the losses.
I'm riding the train to New York for The Atlas 400's annual meeting. We're hosting our members and their guests at The Plaza Hotel on 5th Avenue. I'm meeting Porter, Doug Casey, Van Simmons, and a few dozen other members I can't mention. They've come from all over the world – Japan, Netherlands, Hong Kong, Panama, Hungary, etc... It will be a weekend of fine food and drink, which will unfortunately be interrupted by official club business.
Everything kicks off tomorrow night with cocktails and dinner at Per Se – the New York effort from Thomas Keller (famous for his Napa Valley restaurant French Laundry). And we've rented out the Plaza's Oak Room – a renowned "power meeting" venue – for our dinner on Saturday. If you'd like to learn more about The Atlas 400, click here.
Kudos to Jeff Clark. In the midst of a volatile energy market (thanks to BP's devastating spill), he managed to make Short Report readers a 70% gain in two days:
Oil got the "dead cat bounce" we were looking for last week. The price of West Texas Crude rallied from about $68 per barrel to $74 per barrel before turning down again on Friday.
Shares of United States Oil Fund (NYSE: USO) jumped from $32 to just over $34... enough of a bounce to double the price of our USO June 33 calls (USO100619C00033000). We took partial profits on Thursday and stopped out of the balance of the trade Friday, for a combined profit of 70% in just two days. – Jeff Clark, June 2, 2010, S&A Short Report
Thanks to oil's continued volatility, Jeff sees a similar trade setting up right now. And like last time, he expects readers to make huge profits in a few days (he expects a double this time around). New subscribers still have time to make this trade (the profits could more than pay for your subscription). To learn more about Short Report and access Jeff's latest oil trade, click here...
New highs: St. Mary Land (SM), Akamai (AKAM), DirecTV (DTV).
One subscriber tells us about his experience paying his neighbors taxes... Has anyone else tried this idea? Let us know here: feedback@stansberryresearch.com.
"I cannot begin to tell you how this increasingly 'gimme' deadbeat society of ours is pissing me off. My wife and I have done without many of the trappings of contemporary American life for going on 40 years of marriage, so that we could live a debt-free, bills-paid, savings-in-the-bank life. And now, we find ourselves surrounded by people who lived large and free, on borrowed money, that they now not only refuse to pay back, but are placing the blame for their shameful behavior on 'evil lenders.' Never mind that these same lenders trusted them to honor their legal commitments. And these deadbeats are being helped in this by Congress, and the White House.
"And how are they going to 'save us from ourselves'? By taking more away from those of us who played by the rules, and lived within our means. Why? Because we're the ones who've still got something to take. Believe me when I tell you we are taking the necessary steps to protect ourselves, and what's ours. And we are taking guidance in this, in part, from Stansberry and Associates. Keep up the good work." – Paid-up subscriber Raoul Simon
"Well, I took Steve up on his suggestion to earn 18% by paying my neighbors taxes, or so I thought. I went to the County Sheriff's Sale on June 1st where a piece of vacant property came up for bid. Bidding started real slow finally got to a total of $850.00 and sold. This happened to be a 1 acre commercial lot adjacent to an industrial and warehousing district in a major city. The county has this appraised at $199,000.00. This was sold to satisfy a judgment of $2,000.00. Never go to an auction without any money!" – Paid-up subscriber Jim Dunn
Goldsmith comment: "Paying your neighbor's taxes," as Steve puts it, can be one of the safest and most profitable investments you can make... Investors can make huge profits on these tax sales. Next time bring some cash. If you'd like to learn more about the investment strategy Jim mentions above, click here...
Regards,
Sean Goldsmith
New York, New York
June 3, 2010