The secret to a vast family fortune...

The secret to a vast family fortune... Dinner with the Rothschilds... The most important secret Porter learned... Apple's data breach...
 

 It's one of the greatest family fortunes in history. It's also one of the most secretive...

 

Even today, hundreds of years after this family started in business, it maintains an aura of mystery... Many people believe it still maintains the most powerful cabal in the world, controlling the purse strings of global central banks. The truth is, nobody outside the family really knows the scope of its wealth and influence... Its business success is matched only by the privacy and secrecy it has achieved.

 

 Leave it to Bill Bonner to crack the mystery...

 

"What's the secret?" Bill asked. He figured he would never get the chance to ask a table full of Rothschilds the question again.

 

We're not surprised Bill was invited to a Rothschild wedding... He's a man of massive wealth and charm. And frankly, these types of things happen to him often. You see, Bill knows the secrets to success in life. It's the way he looks at the world and approaches everything from family to business.

 

It has helped him to become one of the largest financial publishers in the world... acquire French chateaus... accumulate huge land ownership in Argentina and Nicaragua... and mingle with the world's elite. But it doesn't faze Bill. He still drives an old Ford pickup truck.

 

We'll explain the secret later. But first, back to dinner with the Rothschilds... How did the great banking family of the world – with its roots tracing back to the 1700s – maintain its wealth and influence over generations?

 

 The responses to Bill's questions were as follows...

 

"They married well," was one reply.   "First, they married each other. I guess the Jewish community was small at the time. And families were very tight. Cousins married each other. That way, they kept the brains and the money in the family. But even later, they were careful about whom they let into the group."   "They stuck with good industries," was another hypothesis. "The British branch of the family stayed in finance. That was always a good business in London. And it got better as London became the center of international capital.   "Whenever the Russians, or the Arabs, or the Austrians, or the French, for that matter, ran into trouble in their own countries, they went to London. They're still doing it. That's why there are so many Russians and so many French people there now. But don't get me started on the French..."

 

 You can read the full recount of Bill's encounter for free right here. But more importantly, you, too, can learn Bill's secret... a secret Porter says has given him "the single biggest advantage" in his business, investing, and life. Bill has made this secret available to everyone in his new book, Hormegeddon.

 

 This isn't a single tip or "life hack" that will suddenly make your life better... It's much bigger than that. Essentially, it's a secret about how the world really works, as opposed to the way it's described in newspapers, magazines, and on television.

 

It's the key to becoming a better investor, a better businessperson, and a better parent or friend. It's a way of viewing the world that hardly anyone understands... But those who grasp this idea are far more successful than their peers. You can apply this secret to everything in your life.

 

Porter, for instance, has personally amassed a small fortune, having built one of the largest independent financial research companies in the world. He has dozens of peers who also worked closely with Bill in their early days... all of whom are millionaires.

 

 Again, Bill outlines his secret in his new book Hormegeddon... It's not available for sale anywhere yet. But we've arranged for you to get an advanced hardcover copy. (When the book does go to Amazon, it will be in paperback only.) We're not giving this book away for free.

 

But we have arranged for you to receive your advanced copy of Hormegeddon and gain early access to a project Porter and Bill have been working on for the past six months...

 

For as long as I've known Porter – nearly a decade now – he has been trying to convince Bill to write his own monthly newsletter. It would be without rival... Where else could you get the insights, experiences, and secrets from a man with that wealth and intellect?

 

And Bill finally agreed...

 

 The result is The Bonner Letter. We've already started publishing this letter in "beta" mode... And now, we want to give you the opportunity to be one of the first to sign up.

 

If you purchase a copy of Bill's new book, we'll give you a free year of The Bonner Letter (and much more). But we're only making this offer until midnight tonight. Click here for the full details.

 

 Data breaches and falling blue chips abound...

 

Technology consumer-products giant Apple has been on a tear this year... The stock closed at a split-adjusted all-time high of $103.30 per share yesterday. Apple is up more than 25% this year. Then came the naked celebrity photos...

 

This week, nude photos of celebrities like Kate Upton, Jennifer Lawrence, and Kirsten Dunst hit the web. Someone allegedly hacked their accounts on Apple's iCloud – the company's cloud-based storage system.

 

In a carefully worded statement, Apple denied accountability for the leaked photos...

 

After more than 40 hours of investigation, we have discovered that certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the Internet. To protect against this type of attack, we advise all users to always use a strong password and enable two-step verification.

 

 Still, it's an untimely black eye for the company, which is holding an event next Tuesday to reportedly announce its brand-new iPhone 6 and "smartwatch."

 

The stock faced further pressure today following a report from Andy Hargreaves, an analyst for investment bank Pacific Crest Securities... "We recommend taking profits in Apple," he said in the report. "Unless next week's event details massive incremental profit opportunities, we are likely to downgrade Apple's rating." The firm currently has an "outperform" rating and $100 price target for Apple.

 

 Shares fell as much as 4.5% today, dropping below $100 for the first time in two weeks.

 

We'll repeat the words of Extreme Value editor Dan Ferris (who holds Apple in his model portfolio). At the time of the Target security breach, he wrote...

 

Security breaches aren't death sentences for great retail operations. They've happened before, they'll happen again, and they can be handled without affecting the business much...

 

 The advice served readers well... Target shares recovered from $55 to more than $60 today. For more on how fleeting most corporate blunders tend to be, read the July 29 Digest. We believe this, too, shall pass.

 

 

 New 52-week highs (as of 9/2/14): Apple (AAPL), American Financial Group (AFG), Activision Blizzard (ATVI), Bank of Montreal (BMO), Berkshire Hathaway (BRK), Consolidated Tomoka (CTO), CVS Caremark (CVS), Dollar General (DG), iShares U.S. Insurance Fund (IAK), KLA-Tencor (KLAC), Leggett & Platt (LEG), Lynden Energy (LVL.V), ONEOK (OKE), PowerShares Buyback Achievers Fund (PKW), PowerShares QQQ Fund (QQQ), ProShares Ultra Technology Fund (ROM), RPM International (RPM), Sysco (SYY), Union Pacific (UNP), and W.R. Berkley (WRB).

 

 An empty mailbag today. Have you read Bill's book, Hormegeddon, yet? Tell us what you thought about it at feedback@stansberryresearch.com.

 

Regards,

 

Sean Goldsmith

Baltimore, Maryland

September 3, 2014

 

John Doody: What I look for when recommending a gold stock...

 

We're continuing "gold week" with insight from John Doody, one of the best in the business when it comes to analyzing gold stocks. John is a former economics professor who discovered the secret to making a fortune in gold stocks.

 

In today's Digest Premium, he shares three of the key metrics he uses when valuing a gold stock...

 

To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.

John Doody: What I look for when recommending a gold stock...
 

Editor's note: We're continuing "gold week" with some insight from Gold Stock Analyst editor John Doody. John is one of the best in the business when it comes to analyzing gold stocks. He's a former economics professor who discovered the secret to making a fortune in precious metals. In today's Digest Premium, he shares three of the key metrics he uses when valuing a gold stock...

 

 

 One thing that separates a good gold stock from a bad one is history. What has the management team done in the past? What has its track record been in other job positions?

 

There aren't a lot of young managers in this business because it traditionally hasn't been a field that young people have gone into. Recently, there has been a change in that, because there has been more interest in gold with the price going up. But the people who are coming into the field as of late are not advanced enough to have any management role yet. They're still learning the ropes.

 

We like to see guys who have had prior success in doing other things in the mining business... Guys with upward progression in their career paths.

 

 We look at a lot of other factors when recommending a gold stock. We're number crunchers. We don't buy stories. We're not interested in exploration stocks or pie-in-the-sky potential, because most exploration stocks don't find anything and they go broke.

 

We're not smart enough to figure out who's going to find something and who isn't. And since we cover 60 gold stocks and 25 silver stocks, we like companies that stack up as undervalued.

 

 We've developed three metrics that we use to determine valuation.

 

One, we take the market cap of the company and divide it by its ounces of proven and probable reserves. That gives us an idea of what we're paying per ounce in the ground. The latest data show the average for an ounce of reserves in the ground sells for $167 an ounce.

 

In general, we like to pay as little as possible per ounce. But we're not interested in buying gold where there's a lot of political uncertainty. For example, years ago, we liked a Venezuelan company, but we weren't sure what was going to happen under then-President Hugo Chavez. We sold and made money, but we got out. And subsequently, the government nationalized that mine.

 

Second, we do the same thing with the company's production. We divide the current annual production by the market cap. The typical producer is around $3,400 an ounce. But there are producers above and below that. For the producers below that, we try to figure out if the ounces are undervalued for a reason, such as the politics of where they're located, or if Mr. Market is overlooking an opportunity.

 

The third factor we look at is operating cash flow. What does the mine actually make when it produces and sells an ounce? This is the mine's operating profit. It's the cash cost of producing an ounce... the labor and materials (such as steel, concrete, explosives, power, etc.).

 

In general, we like ounces that are profitable. The more profitable, the better. Sometimes you might want a mine that isn't very profitable yet... But because of something the company is doing – like changing to a different processing method or some new zone is coming online with higher grades – there are all kinds of subjective things you can add. It's not just number crunching... it's educated number crunching.

 

 We use those three metrics. Since we cover the whole industry, we can see who is overvalued and who is undervalued. We just added a company to our "Top 10" in the most recent issue of Gold Stock Analyst. It was undervalued, and it finally got the financing together to build the mine. Even after the financing package, it's still undervalued.

 

– John Doody

 

 

Editor's note: If you're interested in investing in gold stocks, John's Gold Stock Analyst newsletter is a no-brainer. And for a limited time, as a special deal for S&A subscribers, John is offering a 30-day trial... practically risk-free. To learn more about a subscription to Gold Stock Analyst – and how to access John's current Top 10 list of gold stocks – click here.

John Doody: What I look for when recommending a gold stock...

 

We're continuing "gold week" with insight from John Doody, one of the best in the business when it comes to analyzing gold stocks. John is a former economics professor who discovered the secret to making a fortune in gold stocks.

 

In today's Digest Premium, he shares three of the key metrics he uses when valuing a gold stock...

 

To continue reading, scroll down or click here.