Paulson still trolling for gold investors
Just last year, John Paulson, the hedge-fund manager who made billions shorting subprime mortgages and billions more going long banks, had to turn investors away as his returns on assets under management skyrocketed. Now, he's facing the opposite problem...
Paulson launched a gold fund on January 1 to profit from inflation. After months of investor meetings and even investing $250 million of his own fortune into the fund, he's only raised $90 million. This is partially because his flagship fund is already 10% invested in gold. And his current investors see no reason for additional exposure to metals. Still, the fact that investors aren't rushing into the fund is a bullish sign for gold. We've got more room to run.
Our Phase 1 researchers uncovered what could be the single-largest technology story of our time. The U.S. government, more than 100 major corporations, 10,000 small businesses, and (as I explain below) even China have already started using what we call "the $59 computer." And this little-known technology is on the verge of a mainstream breakout. MIT experts say it could be "the biggest revolution since the Internet." Early investors will make a fortune.
Gartner, a highly regarded technology research firm, expects the market for the $59 computer will reach $150.1 billion in 2013. That's 25% larger than the entire portable personal-computer market in the U.S. And what will be the major driver for this growth? China... Chinese officials are considering spending some of their $600 billion stimulus on rolling out the $59 computer into more than 100 Chinese cities.
Most mega-technology companies, like Dell and Hewlett-Packard, are already producing the $59 computer. And U.S. retailer Best Buy is rolling the product out in its stores. But you can't make huge returns investing in these big players. Instead, we've found a tiny company, only $300 million in market cap, that produces the key software running on the $59 computer. It owns 16 patents on its software and is already receiving contracts from major players like HP, Microsoft, Sony, etc. One major technology executive says this company's patents are "like a license to print money."
This investment isn't for everyone. It's a small and speculative stock. But if you're interested in a realistic chance of making more than 10 times your money on a single stock pick, we think this is your best chance of the year. For the full story on the $59 computer, click here...
New highs: none.
In the mailbag... One of the best letters we've ever gotten. Enjoy. And send your witty (or caustic) prose here: feedback@stansberryresearch.com.
"There is only one explanation for the cold and snow. This is your punishment for making fun of Al Bore and his theory of global warming. I can think of other people who have had to suffer through unusual cold weather lately so I stopped making fun of Al Bore. I did not even risk making jokes about the fact that the U.S. government said that the oceans have grown cooler every year for the last 10 years. By my best estimate there are over a million senoritas between me and the nearest snow shovel and I want to keep it that way so no more Al Bore jokes for me." – Paid-up subscriber David
"Ah! A chance to bump my gums to a captive audience??? Wonderful. Reminds me of the time they wanted a volunteer safety representative. Nobody put their hand up. So then they said: ‘And we pay an extra $100 a month.' So I put my hand up. The manager beamed at me. The fool. I said: ‘Let me get this straight: You give me a captive audience, and you PAY me $100 a month to stand up for 15 minutes every week and TALK??' He nodded, a trifle nervously. Being Irish, I took the job. Easiest $100 I ever made.
"So Porter amuses me. Smacks at everybody. Nice turn of caustic prose. I even agree with him. On a lot of things. Peak oil? Well, I fly with high-ranking petroleum engineers every day. Mostly, when asked, they kind of get this funny smile. Nah... they don't believe we're heading for a crisis. Like Porter, they mostly say it's a matter of the market. Time, money, incentives... it will sort itself out. A question I like to ask is this: Is there still plenty of oil ‘on the shelf' in the Gulf of Mexico? Most answer; ‘Oh yes... It's there. Just gotta go drill the right spot deep enough and smart enough.' How 'bout elsewhere in the world? ‘Oh yes... Just let the market deal with it... If the politicians stay out... It will work itself out...'
"Is the market overvalued? Is it about to turn? Is it time to get into more cash? Well, this simple fellow is 33% into cash and running very tight trailing stops. Don't care if I get stopped out.
"The Alliance. Would be nice. All costs money. IBD, Daily Graphs Online, Schwab Streetsmart Pro... all money, money. Maybe. One day. If you stun me with HERO or IOC.
"Will the market turn? I agree with Porter. Overvalued. Time to be happy to cash out. Tight trailing stops. Don't be greedy. The dollar up is just a flash in the pan. A momentary pulse on the long, slow road to paralysis and seizure. Porter is right.
"OBAAAAAMA??? What a silly, silly, shallow, Narcissistic, intellectual lightweight. Mullah Obama... Still, great fun when Porter rips in. Go, Porter, go.
"How 'bout some funny (acidic, wicked) Stansberry bumper stickers????
"Oh, how 'bout plugging a few free market books? I've reviewed some 13 books on Amazon.com. Maybe The End of Prosperity by Laffer and Moore. Look it up. I review/write under "Francis Meyrick" and mine is the 2nd review. The picture is me on a motorbike. Check it out, Plug it on the site, and suggest readers should give me a positive vote on my review. Heck, paid-up membership... I gotta have some perks, eh?
"Keep telling us which ‘industry groups' you think are up and coming. I like ideas to go and research. Okay, gotta go think about tomorrow's picks. Maybe PCP? Nah. DLM? Nah. Move towards cash??? Ah... that warm, moist, fuzzy feeling... Keep the cells turning... (Oops, I think I just murdered a few metaphors there...)" – Paid-up subscriber Francis Holmes
Porter comment: Great letter... Thanks for sending it in.
"Was that the Verizon 'can you hear me now' test guy next to Goldsmith at the Superbowl?" – Paid-up subscriber Pete
Porter comment: No... but he looks just like that guy, doesn't he? He's actually Craig Ballantyne, one of the world's top fitness gurus. Goldsmith and I are going to start on his program when we get back to Baltimore. You can check out his website here.
Regards,
Porter Stansberry and Sean Goldsmith
Miami Bach, Florida
February 10, 2010