You haven't heard anything about this yet because I wasn't allowed to tell you... until today. And I have to tell you, upfront, this isn't one of our April Fools' Day gags. It's the real story of a huge gold deposit, the battle for control of the corporation that owns it... and the very high likelihood that a stock now trading for less than $2 will soon be worth $20 or $30.
I'd understand if you didn't believe a word of it. And I personally would have ignored the story altogether if I'd heard about it from anyone other than Steve Sjuggerud. Steve isn't normally a gold bug. He doesn't follow the junior mining sector with any particular focus. And he is well aware that most junior mining stocks fail – either because of the vagaries of a new mine or because of the questionable ethics of the promoters. Steve's edge in this market isn't what he knows – it's who he knows...
Out of everyone on my staff, Steve is the most widely recognized and respected analyst. He's met most of the major financial figures in the world and has gotten meetings with people I thought wouldn't bother to cross the street to meet us – people like the world's largest stamp dealer (Stanley Gibbons) and the largest land owner in Argentina (Eduardo Elsztain) and the world's largest money manager (Bill Gross). One of the best connections Steve has ever made, though, is with a very wealthy and secretive investor... whose name I'm not at liberty to reveal (yet). And don't bother trying to figure it out – you've never heard of him before, trust me. This man has a particular interest in gold mines and an incredible track record of unlocking their value for shareholders. But he always works behind the scenes. Steve has learned the details of his latest effort... it's a truly rare and potentially valuable situation.
Steve has done this kind of thing before – with Seabridge Gold. Seabridge owned a huge gold deposit, but it was a poorly financed firm, without the resources or the experience to develop the mine. In situations like this, a big investor with deep pockets and the right connections in the mining world can literally take a $1 stock and turn it into a $10, $20, or even $30 stock in only a few months. That's what happened with Seabridge. The stock went from $2.10 where Steve first recommended it to almost $30. The same thing – almost exactly the same situation – is happening again, with another stock whose shares still trade for less than $2.
I know it sounds too good to be true. And if you don't know Steve Sjuggerud, you might not believe it. But Steve has built a career out of gaining the trust and respect of business leaders around the world. That's how he gets access to this kind of information. I also know Steve wouldn't put his name anywhere near a penny gold stock unless it had real potential and a high likelihood of paying off. So I'm pleased to be able to offer you a chance to learn more about this tiny company, the reasons why Steve is prepared to endorse it, and why it will almost certainly be another "10 bagger" for our subscribers.
How can we be so sure about this opportunity? Well, over the course of our research, we found 15 similar gold speculations stretching back over the past 10 years. Every single one of the 15 stocks we researched shot up at least 200% within just a few months. Some have gone on to make astounding gains of 2,000% or more. The smallest gain one of these penny stocks has produced: 270%. The biggest: more than 10,500%. I think it's likely Steve's new junior mining stock will be the best-performing stock we recommend this year. Unfortunately, very few of our subscribers will ever see this research. Let me explain why...
As you know, when we recommend a stock, especially small stocks with lots of potential, the price of the stock almost always moves up. Sometimes way up. That's because folks who own the stock know they can afford to push prices higher since our subscribers will be trying to buy shares. With Steve's latest gold mine, very few shares are trading. It's a tiny company. And most people want to keep their stock, given the financial interests that have moved into play.
Right now, less than $1 million worth of this stock trades each day. To build a position at a good price will take patience. And it will require discretion. If the name of this stock were to leak out or be discovered by the public at large, it would become impossible to buy at any reasonable price. The opportunity would be lost. So we've treated this information like a state secret. We're not revealing any details that could allow someone to learn the name of this stock without subscribing to our most exclusive (and smallest-circulation letter), Phase 1 Investor.
To ensure the information didn't leak out, we've only published our report in Phase 1. The annual price tag of Phase 1 – $5,000 – ensures all of the investors in this group are experienced enough to handle trading a small stock and smart enough to keep their mouths shut about what they're buying. Next, we invited our S&A Alliance members to join Phase 1 and receive this information. Again, these are wealthy, experienced investors who know how to handle information like this. Even so, because of the tiny size of the company, we were forced to limit the number of people who could join Phase 1 over any particular period of time. After each offer, we have to wait and see how the market reacts. We have to make sure the stock remains below our buy-up-to price – otherwise our customers would feel cheated.
In short, we're only allowing 100 people to sign up at a time. That's the limit we believe is feasible given our buy-up-to price on the stock. Of course, we can't guarantee what the price will be, but we're not going to market our report after the stock surpasses our maximum buy price. And once it exceeds that price – that's it. We won't offer the report for sale at any price.
After giving our report to the subscribers of Phase 1 and offering it to our top lifetime subscribers, we're now able to offer the report to any subscriber who is interested. The company's shares are currently still trading for less than $2. Our buy-up-to price is $3. So you can still get into this situation at an attractive price – assuming you can afford to join Phase 1. If you're interested in learning more, please click here. A few spots are still available, and the opportunity is still ripe – but probably not for long.
Yesterday, GM announced it will force 1,000 to 1,200 dealerships to close. It's asking another 400 dealerships to voluntarily close shop. In total, GM will shutter 42% of its entire dealership network (nearly 2,000 dealerships) by 2010. The move will cost nearly 90,000 jobs (in addition to t
he 21,000 hourly job cuts announced Monday) and $35 billion in revenue annually. But that's nothing compared to Chrysler's potential losses...
Two days before its Thursday restructuring deadline, Chrysler struck a deal with the United Auto Workers (UAW), its largest creditors, and Fiat that brings it closer to securing another $6 billion in government aid. Chrysler gave UAW a 55% equity stake in the company to fund workers' pensions and convinced its four largest creditors to accept a $2 billion payment for $6.9 billion in debt. It's also nearing a deal with Fiat to bring the Italian carmaker's smaller, more efficient engines to the States. If the deal closes, Fiat will eventually receive a 35% equity stake in Chrysler.
But the auto giant hasn't completely avoided liquidation. It still needs to convince its remaining 46 secured creditors to accept the terms of the deal. The creditors won't take a big haircut because Chrysler's physical assets secure their loans – and the creditors would likely do better in liquidation. If Chrysler does not finalize the deal with Fiat, the government said it would not provide bankruptcy financing, which would force the carmaker to liquidate, shuttering its 3,300 dealerships that employ 140,000.
We wrote it, did you buy it?
If you don't own Verizon, you shouldn't be allowed to call yourself an investor. I believe Verizon has one of the most valuable assets in the United States, a $40 billion fiber to the home network that will dominate the flow of data in this country for at least the next 50 years. The stock has held up well, despite the huge losses in stocks. And it has paid a very safe and steady dividend (it is now yielding 6%). If, for some reason, you never got around to buying Verizon, you should do so immediately. And if you've owned it for years, it's time to double the size of your position. – Porter Stansberry's Investment Advisory, April 2009
On Monday, longtime PSIA pick Verizon (VZ) announced a blockbuster first quarter... widening its lead as the nation's premier communications company. The company increased cash flows by 19% to $6.4 billion and nearly doubled free cash flow to $2.7 billion. Earnings jumped 5% to $3.2 billion. Verizon increased total customers by 29% (partially due to its acquisition of Alltel) to 86.6 million. And it added nearly 300,000 subscribers to both its FiOS TV and Internet services... It accomplished all of this while reducing its capital expenditures by $513 million to $3.7 billion for the quarter.
Extrapolating the first-quarter numbers through the rest of the year, we're able to buy this powerhouse company for 3.5 times cash flow and less than seven times earnings. Meanwhile, Verizon is also holding talks with Apple to potentially bring the iPhone to its network... or it plans to develop a competitor with Microsoft.
New highs: none.
In the mailbag... more unhappy customers. We print nearly all of the angry letters we receive. You don't have to "dare us." Why? Because we stand behind our ideas. When we're wrong, we admit it. And when we disagree with our customers, we think it's important to stand up for our ideas – even if that costs us business. After all, we're not politicians. We're analysts. We can't change the facts we discover, even when the facts are upsetting to many. Send us your rants: feedback@stansberryresearch.com.
"Why are you bashing BOFA [Bank of America]? They have plenty of assets to sell off for capital purposes. They still have a $30bil stake in Chinese construction bank. They can also sell first republic bank. What's the problem? The feds say they need to come up with another $5 bil in capital to remain stable. They seem solid to me. You people sound like those idiots over on CNBC. I am beginning to see why BOFA thinks they made a mistake taking tarp funds. The feds want to control them because BOFA is stable and profitable. Who side you on anyways?" – Paid-up subscriber Joe Cowboy
Porter comment: We have this crazy, old-fashioned idea that shareholders actually own public corporations – not management teams and certainly not the government. We believe the owners of a business have the right to decide whether or not to go forward with important changes to the capital structure – like mergers and acquisitions. It is, after all, their property. So when Bank of America's management team decided to buy Merrill Lynch despite Merrill's enormous $15 billion fourth-quarter loss and its decision to accelerate billions worth of employee bonuses, we think Bank of America's rightful owners should have been appraised of these significant developments before shareholder vote.
You probably heard what happened instead: The government leaned on Ken Lewis to keep quiet about Merrill's losses. And he caved. Then in a move of utter cowardice, Ken Lewis tried to blame the affair on Merrill's former CEO. We hope shareholders sue the government for tortuous interference with the contract. They'll win. We hope Ken Lewis goes to jail for securities law violations – for which he is clearly guilty. We hope Bank of America's rightful owners will one day have their property returned to them. So I guess you could say we're on the side of property owners and against the endless number of leeches who try to con, steal, and muscle in on them.
"Get off your soapbox, Porter. GM's bondholders don't have to accept the government's getting 50% and they only 10% of the reorganized company. They could, if they wished, force GM into involuntary bankruptcy if they were not paid in full – no matter what GM, its employees or even 'OBAMA!' might propose. This situation is no different from that of a corporate raider (sometimes known as a 'vulture capitalist') making a tender offer for stock at 50% of its real value. If the shareholders, having the same information about the company's financials as the raider, accept the offer, the raider gets a bargain and the shareholders lose part of their property. That's capitalism, baby!" – Paid-up subscriber Steve Sloca
Porter comment: GM's board of directors has a fiduciary responsibility to the bondholders. Taking $15 billion worth of government money in an effort to avoid liquidation and giving the government a senior claim was probably illegal and certainly did not live up to its obligations. Whatever happens next, the government's efforts to strong arm GM to protect the union is politics, pure and simple. It's certainly not capitalism. And we're about to find out if the old saw about GM and America is true. If socialism is good for Amerika, it's good for GM. If you think GM cars were bad before, just wait until you see what happens next with the government and union running the company...
" I don't know where you should buy [a farm], but I know where you should NOT. Central California. California IS the nation's breadbasket, and the 5th l
argest economy in the world due in part to Ag, however it is not going so well out here. I don't know if you caught all of us marching for water last week, but we did. The San Joaquin Valley in California would be a desert except for the intricate canal system built to divert snow melt from the Sierra Nevada mountains into irrigation water for farmland. Land is still pretty expensive here (usually when residential is slumping, ag land is booming), but if things don't change (which I doubt they will until it's too late) we will run out of water. You see, the snow melt is now being used to keep fish alive instead of irrigate crops. Most farmers have been relegated to drilling very deep water wells. Too bad it's like a lake down there under ground and when we suck it all up, it won't come back. Add to the fact that we've had below average rainfall for the past three years and it's not hard to figure out where we're headed.
"I'm a 4th generation orange grower and I'm seriously looking at getting out. I don't want my land to be dry and worthless, when I decide to sell, and I don't think it will be long before that happens. Our water is being stolen from us by the Endangered Species Act which is diverting water away from Ag land in the Sacramento Delta. We're protecting a minnow called the Delta Smelt from extinction. Many other factors contribute to the lower numbers of this species in the last 20 years, however, telling agriculture they can't use water in the Sac delta is the easiest thing to do to make the Environmental Defense Council think they are doing something to save the world. Farmers keep capitulating and the Enviros keep nabbing more water. It won't be long now. It is possible that people will wake up when the towns' pumps start to dry up, but by then, the farmers will be long gone." – Paid-up subscriber Richard Walker
"Maybe you should do an article for your 'men readers' on DIVORCE! I was a successful investor for many years and was nearing retirement counting on a pension, property, stocks, bonds, and no debt. After a 32-year marriage, my wife filed for divorce and I lost big time, including 1/2 of my retirement. The divorce hurt me so badly, mentally, that I had to take an early retirement. My current financial situation is worse now than it has been in many a year. 32 years of HARD work for nothing! And to boot, I was not the one seeing someone else. It wasn't the recession, the stock market, or the potential collapse of the dollar that did me in. It was DIVORCE! You should warn your 'men readers' that no matter how stable they think their marriage is, it CAN happen; and when it does, the man will lose!" – Paid-up subscriber John
Porter comment: You know what they say about owning things that fly, float, or fornicate: They're cheaper to rent.
Regards,
Porter Stansberry
Baltimore, Maryland
April 29, 2009