What the Best Trader You've Never Heard of Is Buying Now
By Dr. Steve Sjuggerud
January 30, 2009
I've never seen a track record like my friend Jeff Clark's.
He's had 45 trades double in the last 45 months – that's a double a month!
The latest issue of Jeff's newsletter, the S&A Short Report, just came out. In it, Jeff is buying something everyone else has left for dead... commodities. He expects a big rally.
His timing looks good... Bonds (which typically bottom first) bottomed in October. Stocks (which generally bottom halfway through a recession) bottomed in November. And now commodity prices (after falling 60% peak-to-trough in 2008) bottomed in December.
Over the past year, Jeff's timing has been better than mine... and anyone else I know. He called the top in oil last summer, the bottom in gold last fall, and the beginning of this whole bear in early 2008. So this time, if anyone's timing is right, it's likely to be Jeff.
Jeff and I met about five years ago. We hit it off instantly... We discovered we had each come to the exact same conclusion about how to make money in the markets.
Jeff looks for trades that are low-risk, unpopular, and ready to explode at any moment.
At the heart of it, those are the same three things we're looking for in DailyWealth: 1) cheap 2) hated, and 3) just starting an uptrend. And that is exactly what we have in commodities now.
Everyone expects the world to end – and everyone expects commodity prices to fall. So commodities are a "hated" investment. But realize, commodity prices should be at their lowest at the bottom of an economic cycle.
It's difficult to call it a true uptrend now. But we've seen three successive "higher lows." It is what the start of an uptrend looks like...
You haven't missed a thing yet. This trade is just getting going.
Thanks to the recession and everyone on Wall Street getting out of commodities, they're supercheap now. They're hated. And the inklings of an uptrend are in place. Even better, the best trader I know is finally buying.
It's probably time to nibble at commodities... You can limit your downside risk to the December lows. On the upside, Jeff's found a trade with the potential for a 200% gain.
The best trader I know is buying commodities, expecting "a big rally." We should join him.
Good investing,
Steve
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.
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THIS COULD BE THE WORLD'S BEST COMPOUNDING MACHINE
Just under three years ago, our colleague Dan Ferris issued one of the best pieces of stock research we've ever read. It came in the July 2006 issue of his Extreme Value advisory.
In that issue, Dan all but shouted at the top of his lungs to buy shares in the world's best oil company, ExxonMobil (XOM). He used words like "biggest," "best," and "safest" to describe its legendary treatment of shareholders and assets. For instance, XOM has raised its dividend every single year since 1983. A low oil price don't bother it either. XOM returned 12% on its capital in 1999... when oil prices were below $30 a barrel. You can read an excerpt of his issue here.
As you can see from today's chart, Dan's advice was dead on. XOM has returned 26% since the write-up. The past year or so in XOM shares is just incredible.
While oil and fuel suffered giant price collapses... while the credit markets froze solid... and while stocks of all kinds were clobbered, XOM shares have held steady. Almost no stock, commodity, bond, or currency can say that these days. The great compounding machine marches on...
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Remember how many times last summer Fed Chairman Ben Bernanke and former Treasury Secretary Hank Paulson lied to the American people, swearing Fannie and Freddie were "well capitalized"?
They said so in front of Congress in July – at least a dozen times. And they kept saying it, right up until the moment they nationalized both firms, completely wiping out shareholders. [This week], Fannie asked the Treasury for another $16 billion to cover losses on mortgages. And Freddie needs another $35 billion.
Mark my words: By the time this whole thing is over, taxpayers will have spent more than $500 billion bailing out Fannie and Freddie. And this fraud, which makes Madoff look like a piker, will never be investigated because the trail would lead directly to Congress.
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– Porter Stansberry
S&A Digest |
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A hedge fund has begun offering investors the chance to have their investment denominated in gold, as worries grow over governments debasing their currencies by printing money.
Osmium Capital Management, a $178m hedge fund manager based in Bermuda, is launching a new share class allowing investors to hold shares measured as troy ounces of the fund, rather than US dollars, sterling or euros.
The move follows a surge in investor demand for small gold bars and coins held by individuals and gold-backed exchange-traded funds that are holding a record amount of bullion.
This week London spot gold prices hit a 3½-month high above $900 an ounce and set all-time highs in sterling and euro terms as investors rushed into the metal.
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