Weekend Edition
The Best of The S&A Digest
November 14, 2009
 On Wednesday morning, we got an interesting note from our natural resource expert, Matt Badiali...
At the Alliance Conference, I got to talking with a friend of mine – a retired petroleum engineer. This guy worked in South America for decades, so I brought up Brazil's offshore oil...
The country has enormous oil reserves. The most visible is Tupi, which has around 10 billion barrels of oil... And they keep finding more and more. In September, BG Group, a $59 billion London-listed oil producer, announced its Guara field has as much as 2 billion recoverable barrels of oil (worth about $160 billion at today's prices).
The thing is, my friend says oil will cost at least $60 per barrel to produce. No company has ever drilled that deep before.
So that makes Brazil's oil 30% pricier than the "roofing tar" in Canada's oil sands – previously the world's most expensive oil to produce.
It used to be you could stick a straw in the sand in the Middle East and suck oil out for $3 a barrel. That's just not true anymore. Oil prices are headed higher. If they dip, they won't stay low for long.
Matt has loaded up his Resource Report portfolio with some of the cheapest, easiest oil you can drill today, and the strategy is working. Three of his picks are up more than 90% since June. But his latest recommendation could be his biggest winner yet...
Earlier this month, he recommended a small Canadian oil-sands company run by one of the best management teams in the business... Shares of their previous company exploded from 50 cents to $20 – a 3,900% gain. Matt expects a similar outcome with this pick. To learn more about Matt's Resource Report, click here.
Our own Doc Eifrig also had a few run-ins with Alliance members...
At the annual S&A Alliance Conference on Kiawah Island, at least a dozen members asked me: "Would you take the swine vaccine or give it to your kids?"
My answer: No way. Last time we had a vaccine push like this in 1976, hundreds of people died from complications. Worse, the vaccine's preservative contains small amounts of mercury (a deadly toxin).
Truthfully, swine flu is not that common. The CDC stopped testing for swine flu in July 2009. Since halting testing, it still reported pandemic levels of swine flu from states and doctors, but this was all ONE BIG LIE. Several states' tests showed more than 80% of the originally alleged cases are NOT EVEN INFLUENZA (likely just a cold). Yet the government agencies continue to hype every sniffle and cold as swine flu. Worse, it says nearly everyone should get a vaccine. Absurd.
There are better ways to keep your immune system working properly: A little bit of exercise (try walking) plus getting the right amount of sleep every night.
Last month, Doc showed Retirement Millionaire readers the "easiest exercise you'll ever try." It lowers blood pressure and increases the levels of serotonin in the brain, the same chemical that wards off depression. To access this issue – and learn how to save as much as 80% on almost everything you buy – click here.
At a small dinner before the Alliance Conference, we were discussing The Greatest Trade Ever, a book about hedge-fund manager John Paulson's correct call of the mortgage meltdown... and the $15 billion he made trading it.
Paulson was early in predicting the subprime crisis, and he started by shorting subprime mortgages. Then he shorted alt-A. Then prime mortgages. Once that trade played out, he shorted financial institutions. Then he bought financial institutions after they had been left for dead.
Paulson made money on every leg of the trade, but his largest gain – and the final leg of the trade – is still panning out. Paulson currently manages more than $30 billion... And he holds 15% of his fund in gold (through investments in the GLD exchange-traded fund and mining stocks).
As we've said before, when the best and most respected investor on the Street is hoarding gold like a maniacal, antigovernment conspiracy theorist, it's time to take note. Paulson's gold position is so big (he's one of the biggest owners of GLD) and so public, he'd have a hard time unloading... He's in this trade for the long haul. You should be, too.
Regards,
S&A Research
Stansberry & Associates produces the daily S&A Digest, which comes free with a subscription to one of our premium products. To learn more about a risk-free trial subscription click here. |
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S&P 500 |
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Advanced Micro |
AMD |
+34.16% |
JDS Uniphase |
JDSU |
+27.02% |
Priceline |
PCLN |
+17.34% |
Countries |
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Australia |
EWA |
+4.97% |
India |
IIF |
+4.93% |
Chile |
CH |
+4.76% |
Sectors |
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Homebuilding |
ITB |
+3.98% |
Gold Mining |
GDX |
+3.68% |
Transportation |
IYT |
+3.60% |
Commodities |
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Corn |
- |
+3.97% |
Wheat |
- |
+3.76% |
Soybeans |
- |
+3.04% |
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S&P 500 |
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Sunoco |
SUN |
-12.53% |
Tesoro Petroleum |
TSO |
-10.54% |
MBIA |
MBI |
-8.33% |
Countries |
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Ireland |
IRL |
-2.53% |
Japan |
EWJ |
-1.96% |
Brazil |
EWZ |
-1.53% |
Sectors |
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Nanotech |
PXN |
-2.21% |
Clean Energy |
PBW |
-1.60% |
Nuclear |
NLR |
-0.99% |
Commodities |
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Nickel |
- |
-8.90% |
Coffee |
- |
-7.92% |
Natural Gas |
- |
-7.03% |
Source: Bloomberg, Yahoo, StockCharts, XLQ 11/5–11/12.
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