You Would Make 250% Gains... So Why Won't You Do It?
By Dr. Steve Sjuggerud
March 28, 2008

"THE BEST PLAY FOR THE REST OF THIS DECADE." That's what I called commodities more than four years ago in my True Wealth newsletter.

The headline to that issue was "The End of the 100-Year Bear Market." Commodities have soared in price since: Gold is up 150%, silver's up almost 200%, and oil's up about 250%. But when I wrote about it, nobody listened. Nobody wanted to hear it.

Today, I'd like to share with you the next great asset class... an asset that over the next five to 10 years has the potential to do the same thing commodities have done in the last few years.

Backing up for a moment... It is hard to put into words the sheer disdain that investors had for commodities just five years ago. Professional investors looked at the last 20 years of asset returns and laughed at me for even considering commodities in a "legitimate" portfolio. Mom and Pop America had no interest whatsoever.

Here's what I wrote over four years ago to my paid subscribers. I want you to read this because I feel the story is similar to what I'll share with you today:

I think commodities will turn out to be a fantastic place to invest for the rest of this decade. Returns in commodities should easily beat stocks and bonds for the next five years. It happened in the 1970s, as the table shows, and it'll happen again...

*Commodities Crush Stocks* *Annual % Gain, 1970-1980*
Asset	Annual Gain
Oil	34.7%
Gold	31.6%
U.S. coins	27.7%
Silver	23.7%
U.S. farmland	14.0%
Housing	10.0%
Inflation (CPI)	7.7%
Stock prices	3.6%

What I like about it even more is that nobody is interested in commodities... yet. Go to MSN's MoneyCentral, or Yahoo's Finance page, and try to get a quote on gold or oil, and you'll see what I mean. Nobody cares yet. Nobody has commodities as part of their portfolio asset allocation yet... and I love it!

People are ignoring this new asset class now – professional investors would snicker – but you could make a lot of money over five to 10 years. So what is this new asset? High-end collectibles and memorabilia. (Go ahead, scoff... giggle... get it out of the way... but keep reading!)

Last night I had dinner with Paul Fraser, founder of Fraser's Autographs. Paul has bought and sold more than 100,000 autographs in his career.

The "Fraser's 100 Autograph Index" actually appears on Bloomberg machines, which are on most Wall Street desks (not that any professional investors have bothered to look).

The Fraser's 100 index goes back to 1997. From the end of 1997 until yesterday, the S&P 500 stock index is up less than 40%. Yet the Fraser's 100 is up more than 250% from the end of 1997 until its most recent calculation (end of 2007). Some individual autographs are up more... Elvis and Napoleon are up 500%. Paul McCartney is up more than 1,000%.

Stock investors can scoff, snicker, and giggle about collectibles all they want. But investors in high-end collectibles have the last laugh... they've made fortunes.

And despite good gains recently, I think the big moves are still ahead of us...

Legendary American collector David Hall once told me a big secret about collectibles: He said, "The big moves come when price guides first appear for a collectible."

The reason, David explained, is before the price guide, you have to be an expert. You have to devote a ridiculous amount of time to becoming an expert... tracking the auctions, talking to dealers, and figuring out what is important. But once the price guide comes out, the playing field is leveled significantly.

The Sleeping Giant in the Commodities Market

No Bear Market or Credit Crunch Here

Fraser's Autographs has been around since 1978. It just released its first autograph price guide in the last few months. It's filled with thousands of autographs and their values, and published by Stanley Gibbons (which has been publishing stamp price guides for more than 100 years). I think it has to be an important moment in the autographs market.

But nobody cares. Nobody's paying attention... And just like commodities earlier in this decade, that's exactly where you'll find the next 250% gain.

Good investing,

Steve

P.S. For more information about investing in autographs, visit Fraser's site. And as I've written before, I also think stamps are a great way to invest in collectibles right now. Click here to read my latest essay about how to buy investment-grade stamps.

Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.

Sign up today to read more investment ideas from Steve Sjuggerud.

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EVERYONE LOVES TO HATE AIRLINES

Two days ago, American Airlines cancelled more than 300 flights so maintenance crews could perform an emergency inspection of the company's MD-80 aircraft. Delta cancelled another 133 flights to make the same inspection on its fleet.

The stock market hates airlines. The AMEX index of airline stocks is down 60% in the last two years as high oil prices have reduced profits. This week's mechanical problems gave investors another reason to dump airline stocks.

Here's the thing: Passenger numbers are strong. According to the International Air Transport Association, worldwide air travel is expected to rise from 760 million passengers in 2006 to 980 million in 2011 at an annual average growth rate of 5.1%. Meanwhile, airlines haven't invested in new capacity, so there's a shortage of seats.

Even so, I wouldn't invest in airlines long term. But they may make for an interesting trade...

DBA

– Tom Dyson

With grain prices soaring, farm income at record highs and the federal budget deficit widening, the subsidies and handouts given to American farmers would seem vulnerable to a serious pruning.

But it appears that farmers, at least so far, have succeeded in stopping the strongest effort in years to shrink the government safety net that doles out billions of dollars to them each year.

"At some point, you have to step back and ask, 'Does this make sense for the American taxpayer?'" says Rep. Ron Kind. The Democrat from Wisconsin sponsored a measure that would have slashed about $10 billion over five years in subsidies – and saw it get crushed on the House floor.

Grain prices are on a tear this year. On Wednesday, corn prices closed at $5.52 a bushel, up from about $2.20 in 2006, and near the all-time high of $5.70 set earlier this month. U.S. farm income, buoyed by demand for grain from rising middle classes around the globe and the biofuels industry, is projected to reach a record $92.3 billion this year. Still, farmers are expected to collect $13 billion in federal subsidies this year, according to the U.S. Agriculture Department, including payments for commodities, land conservation and emergency assistance.

– Wall Street Journal

Greenland locals hunt reindeer for food and use dog sleds to traverse the ice sheet. Soon they may be working on offshore rigs and counting their money.

Oil companies have begun looking for crude deposits off the west coast and Joern Skov Nielsen, deputy director of Greenland's Bureau of Minerals and Petroleum, said there may be more oil there than the entire past production of the North Sea. That's about 50 billion barrels, according to figures from Norway and the U.K., the region's biggest producers.

At $100 a barrel, that would be $5 trillion worth – a potential windfall for the autonomous Danish territory's 56,000 inhabitants that may start paying off in about 15 years.

– Bloomberg

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