USA Today 'quotes' Stansberry… Everyone's going to be a speculator… Doug Casey's trip to the Middle East… The 'Golden Age of Gas' is nigh… Curzio's favorite natural gas picks…
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That headline on the front of USA Today was waiting on the floor outside my hotel room this morning…
We're still at our Editors Conference at Pennsylvania's Nemacolin Woodlands Resort. It's our annual meeting where all the editors (and a few valued friends) share their best ideas.
Many of today's speakers noted the USA Today headline. As you probably know, we've been talking (and talking…) about the U.S. debt problems as part of Porter's End of America thesis… Now, the most popular newspaper in the country has picked up on the theme.
While we remain as convinced as ever that dollar is a doomed currency… The headline gave us pause. As our friend Rick Rule says… it's hard to be contrarian when you're popular.
"Everyone has to be a speculator."
Our friend Doug Casey made his fortune as a speculator. And he told everyone about his favorite speculations today.
So what makes speculations possible? According to Doug, good speculations take advantage of "politically caused distortions." Take buying gold at $35 an ounce in 1971 when the U.S. dollar was still on the gold standard. It was an ideal speculation – Doug called it "the classic speculation in our lifetime."
A good speculation is always a low-risk speculation. And when you bought gold at $35 an ounce, your downside was zero.
If we lived in a truly free society, we'd have many more productive investments instead of pure speculation… because politics wouldn't constantly create distortions. But we're living in a time when the government has its fingers in everything. Doug said the U.S. used to be the world's financial center. Now, only 10% of all publicly traded equities list in the United States. Companies list abroad because the U.S. is too expensive and dangerous.
In these times, everyone will be forced to be a speculator… just to survive.
Government meddling makes it impossible to do anything smart with your money other than speculations. Saving is foolish, Doug said, because if you're squirreling away dollars, you're hoarding a soon-to-be-worthless asset. And investing – which he defines as allocating capital into businesses that will grow the capital – is extremely hard when government is warping the market's normal functions.
Speculating… taking advantage of these politically caused distortions… is the only way.
So what should you look for? Doug's traveling through the Middle East to look for speculations. He's visiting Israel, which he believes could become a major exporter of hydrocarbons. Then he's going to Cairo, where a friend of his has raised $40 million to buy rent-controlled apartments for around $27 per square foot.
Doug's friend made a fortune doing the same thing in the midst of a crisis in New York City in the 1970s. He thinks he can renovate these Egyptian apartments and sell them for 10 times his investment.
Of course, not many folks have the interest or ability to follow Doug's lead in the Middle East. So where else can you find bargains? One asset Doug believes is cheap is also one of our favorites – natural gas…
The International Energy Agency (IEA) said the abundance of cheap natural gas, China's booming demand, and the political consequences from the Fukushima nuclear disaster has created the "golden age of gas." The IEA said global consumption of natural gas could rise by more than 50% over the next 25 years. And it will account for more than a quarter of global energy demand by 2035, up from 21% now.
Frank Curzio talked about the natural gas "megatrend" in his Penny Stock Specialist advisory for months. At our conference, Frank said the coming natural gas boom is why every major oil company is spending billions of dollars buying up natural gas assets in some of the biggest shale areas in the U.S. For example, Marathon Oil spent $3.5 billion to buy a stake in Texas' Eagle Ford shale assets.
After months of research and talking to his best contacts in the industry (some with over 30 years of experience), Frank has compiled a list of several small-cap companies that will soar during the natural gas boom. Some are natural gas producers that own property right next to where big oil is buying… Others are "picks and shovels plays" that are printing money right now due to the explosion in demand for their drilling specialties. Frank has seven companies in total. To learn more about the natural gas boom, and receive Frank's special report, click here…
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Good investing,
Sean Goldsmith and Dan Ferris
Farmington, Pennsylvania
June 7, 2011