Investment Timing For The Gold & Commodities Boom

2006-05-16T12:02:00.000+01:00

If you think it’s too late to profit wildly from gold’s rip-snorting bull market, think again.

First, when gold and gold shares suffer a normal, temporary correction — as they did yesterday — it opens up a convenient window for you to jump in.

Second, after this minor pause, I see gold making a beeline for $740 ... then challenging its all-time high of $825 ... and next heading toward $2,100.

Third, with the way gold is moving, you don’t even need a huge move in the yellow metal to profit wildly. In fact, all you need right now is a minor 15% rise to go for a whopping 348% gain.

2006-05-15T22:18:00.000+01:00

How to Profit From Rising Rates

Here are some of the many ways to take advantage of rising interest rates:

1. Short-term Treasuries. For your keep-safe funds, just earn the higher yields as they become available by sticking with short-term Treasury bills or a T-bill only money fund.

2. Inverse bond funds. These mutual funds are designed to go up in value when interest rates rise and bond prices fall. You can buy funds that target 10-year Treasuries or 30-year bonds. Example: Rydex Juno (RYJUX).

3. Contra-dollar funds. These are mutual funds designed to go up in value when the dollar falls. Most own short-term foreign money markets or bonds, plus other investments such as gold mines.

4. Gold investments. The surge in gold ... the rise in interest rates ... and the decline in the dollar all go hand in hand. So your gold investments should continue to shine in this environment. And with options on gold investments, you can multiply your typical profit potential by three, five, even ten times.

5. Options on interest rates. These give you more leverage than you’ve ever seen or probably every will see. For just $500, you can still buy options that give you the potential to control $1,000,000. That’s effectively 2,000-to-1 leverage with strictly limited risk.

2006-05-15T21:56:00.000+01:00

No one’s paying enough attention to interest rates.

But be aware: They could rise faster and further than most people think. And when they do you could turn a tiny nest-egg into a not-so-small fortune.

2006-05-15T21:48:00.000+01:00

Many people don’t quite get why falling bond prices always mean rising interest rates.

And it's really simple: It's the way bonds are built.

A $10,000 Treasury bond is guaranteed to be worth $10,000 when it comes due. So if you can buy it at a discount — for, say, $9,000 — that’s like earning another $1,000 in interest.

The cheaper the bond the more you can make and the higher the effective interest rate.

2006-05-09T17:15:00.000+01:00

When the president of Iran sent a personal "letter" to President Bush yesterday,

oil prices sold off a bit.

Traders wondered if it might be a breakthrough in the nuclear crisis. The Web was glowing with hope. It seems the whole world stopped momentarily.

But as it turns out, the letter is merely a rambling 18-page tirade about Iran's relationship with the West, the establishment of Israel and the failure of Western democracy. The nuclear standoff is barely mentioned.

Hopes of a breakthrough are dashed.

Right on cue, oil prices have held firmly above critical support levels this morning and now look like they're ready to take off again. So I'm now making some minor final adjustments in my next set of recommendations and putting them out this afternoon.

No guarantees. But these are LEAPS (long-term options) on select oil and gas companies that could spin off up to $69,239 in gains before commissions.

Iran's stalling tactic gives you a few extra hours to get in. But if you're interested, you have only a very short window to act: You'll have to call in before 2 pm
Eastern Time today (Tuesday, May 9).

2006-05-07T23:25:00.000+01:00

Energy markets are ready to start flying again.

I’ve gotten the mini correction I was waiting for. It looks like it’s over. So now I’m going to move!

In less than 48 hours, I’m getting ready to pull the trigger on a brand new set of high-powered recommendations.

Here are the parameters as I see them:

1. If I’m right about where I think my oil share picks are going over the next 18 months, I figure you could be looking at $69,239 in gains (before broker commissions) on a very modest investment.

2. What if I’m totally wrong? With our limitation of the downside you can never lose a penny more than your investment, plus any commission you pay your broker.

3. You have a full year and a half for this opportunity to play itself out. Given the way these markets are jumping, I don’t think you’ll need that much time. But it’s good to have anyhow.

4. Best of the best: I’ve picked out what I believe are the number one performers in the highest-performing industry. The companies have a solid, long-term track record of strong advances.

5. Great timing: We’ve seen a sharp rally, then some profit-taking. So the timing couldn’t be better. Do what the pros do, and use this opportunity to buy cheap!

2006-05-07T23:22:00.000+01:00

Two words of warning ...

Warning #1: The market is moving our way — and fast. So there’s no time to waste. I’m going to double-check the markets tomorrow. Then, I’m getting these recommendations out Tuesday morning. To participate, you must secure one of the remaining membership slots before then. That’s by midnight tomorrow, Monday, May 8.

Warning #2: Last I checked, we had only 87 memberships left. And that was two days ago.

2006-05-06T09:54:00.000+01:00

When energy markets are flying and investors are making money hand over fist,

you can’t count on getting another chance to jump in.

But now you have it ... because, the energy market started a mini-correction. My view:

- This is a big chance! It opens a window of opportunity for any late comers who want a crack at the same kind of profits earlier investors have already been making.
- It won’t last very long. It could be over in a matter of days — or less.
- It has done nothing to change the trend. The upward trend in energy is being driven by some of the most resilient supply-and-demand pressures in 100 years. One day in the market does nothing to change that.
- At around the current level, the market has firm support. Oil and oil stocks could recede a tad further. But if you’re looking to invest at a good entry price, I wouldn’t wait for that. The market could skyrocket suddenly and you’d wind up chasing it.

Meanwhile, select oil and gas companies are reporting record earnings, just like I told you they would. This morning, Shell announced profits were up 12% to just over six billion dollars for the 1st quarter of this year. That’s equivalent to $67 million per day … nearly $2.8 million per hour.

2006-05-05T15:18:00.000+01:00

A large portion of your net worth should be in money markets and cash equivalents now.

You could also own gold bullion, sitting on substantial profits. Heck, when we first recommended gold in one of the early issues, gold was around $350. Since then, it has nearly doubled!

You should also have core holdings in junior and senior gold miners with open gains of as much as 319%. The gold funds I’ve recommended are up as much as 82%.

You should own five different core natural resource stocks, representing interests from oil to steel. Of the five, one is down about 2% while the other four have gained as much as 58%.
For income, you should be holding two natural resource stocks that yield more than 9%.

2006-05-05T15:15:00.000+01:00

War With Iran Now Seems Inevitable?

Although it hasn’t been talked about much, Washington must be very concerned.

The new oil exchange, opening this month in Tehran, could compete with New York’s Mercantile Exchange and London’s International Petroleum Exchange. With one critical difference: The oil will be priced in euros, not U.S. dollars.

That means Europeans will no longer have to buy and hold U.S. dollars to secure payment for oil. They will be able to purchase oil with their own currency. It may allow the Chinese and Japanese to reduce their dependence on the dollar. And Russians have an inherent economic interest in adopting the euro because the bulk of their trade is with European countries.

Meanwhile, the Arab countries exporting oil need to diversify against the rising mountains of U.S. dollars they’re collecting.

The economic implications of a successful Iranian Oil Bourse are significant, and could create a shift in capital flows, sending the U.S. dollar into a deeper plunge. A rationale for Washington to seek to act sooner rather than later.

2006-05-05T15:08:00.000+01:00

... If Latin America’s vast resources are handicapped by the leftist movements occurring there, it’s one more macroeconomic force that will send natural resource prices higher, igniting yet another round of inflation in the years ahead.

Don’t take this lightly. At stake are ...

More than 6 million barrels a day of crude oil production. That’s 30% of the U.S. consumption needs of 20 million barrels a day of oil.

63 million tons of coal.

1.9 million tons of copper smelter production. 378 tonnes of gold. More than 258 million ounces of silver.

Clearly, the political move to the socialist left in Latin America has dire implications for the world’s supplies of natural resources, and consequently, global inflation.

2006-03-29T22:02:00.000+01:00

Don't fight the market - there is only one winner !

2005-11-17T10:38:00.000Z

Benefits of a Special Cycle in Commodities

Interesting posting from S. Broderick, I thought.

Right now, you’re in the early innings of Phase II of the commodities supercycle — a period of accelerated growth, accelerated price rises and grand slam profit opportunities.

Let me explain: Generally, commodities go through a standard cycle of (a) growing scarcity, (b) rising prices, (c) oversupply, and then (d) falling prices.

But once every fifty years or so, commodity prices explode out of the normal pattern, driven first by real demand, then by investment demand and finally by speculative demand.

In the last 150 years, that’s only happened three times. And now it looks like it’s happening again.

From what I can tell, the past few years were just Phase I of this commodities supercycle. And now, it looks like we’re starting Phase II, when many of the big homeruns will be hit.

The biggest slugger of them all: Canada — the country where cub-sized companies are finding giant-sized deposits of gold, uranium, coal, oil and more, greatly outperforming their Yankee competitors.

Indeed, Canadian small-caps have been running rings around the S&P 500.

Over the past three years, the S&P 500 is up 33%.

Meanwhile, the Toronto Exchange’s Venture Composite Index rocketed 116%, triple-outperforming the S&P — and more!

What’s driving this superlative outperformance? In addition to the extra leverage small caps naturally give you in a rising market, the Canadian small caps are also powered by the commodity boom.

Commodities account for 35% of Canada’s exports and an even larger share of the best-performing stocks in this index, a key factor helping it to zoom higher at over three times the pace of the S&P 500.

Canada’s strategic positioning to serve customers in the U.S., Asia and Europe ... top-notch transportation system ... deepwater ports ... modern technology … all work in its favor.

Canada’s relatively firm currency, stable government, and modern banking system also make a huge difference — both as an environment for running first-class business operations and as a magnet for prime-time investment capital.

The biggest source: The United States.

2005-11-14T20:18:00.000Z

We all know the right timing is crucial for successful investments.

The world changes quickly now and what worked yesterday, most likely doesn't work that well anymore today.

To keep our investment strategies highly successful we must adapt to major changes in the world's most powerful economies and trading floors.

We discuss the major economical and market driving forces here that influence our investment success, looking at investment strategies and how these strategies might apply to today's investment environment.

2005-11-14T19:50:00.000Z

The Right Timing For A Successful Investment Strategy

We have moved this investment discussion online and are today going to look at our favourite question ”Where is the market going?” from a different angle:

How much freedom has the FED still left to steer the market?

Let’s start with some US markets facts, courtesy of Weiss Research Inc.:

• US Interest Rates have been going up.

• The yield on 30-year Treasury bonds, less than 4.2% in July. Now it’s close to 4.8% and moving higher.

This Treasury-bond yield has an almost immediate and direct impact on mortgages, housing, autos and the rest of the economy.

• No wonder the 30-year fixed mortgage rate has jumped to 6.15% lately, a 14-month high.

On the whole borrowing costs are going up for almost everyone in the US.

Some people, may think rates move up and down based on the FED’s say-so but history has proven this theory wrong many times.

There are several reasons why the FED is especially powerless now to control interest rates today:

1. The discrepancy between the high degree of future inflation and low level of interest rates is probably far greater today than at any time in modern history.
2. It is not merely inflation that prompts lenders to charge more interest. Lenders charge more if your credit rating goes down. They charge more if there’s a bigger number of people suddenly asking for loans. And they’ll charge more if the banks are running low on available cash to loan out.

Right now there are more people and institutions holding bigger debts than at any time in history. This means they need to continually borrow more money to pay off the debts coming due every day.

Just in interest bearing debt, and just among U.S. borrowers, the total debt pyramid is now more than $38.1 trillion. These debts don’t include debts owned by foreigners and debts that don’t require interest payments.

The biggest and possibly shakiest – debtors right now are the millions of Americans who have taken out first and second mortgages on their homes. The total of mortgage debt is now $11.1 trillion or 2.5 times more than all U.S. Treasury debts.

This enormous amount of mortgage debt is especially dangerous today because so much of it is based on

- adjustable rates,
- bloated home values,
- low or zero down payments, and
- even undocumented, ‘believe-what-they-say’ income.

Also driving rates higher will be those US and foreign investors holding the trillions in U.S. Treasury notes and bonds. When rates go up, it sets off a chain reaction of events that might be beyond anyone’s control, including the FED.

In 40 years of tracking bonds and interest rates, there has never been a convergence of fundamental forces quite like this one: The worst trade deficit in history. The worst jump in the CPI in 25 years. The biggest accumulation of foreign debt ever.

Here are three strategies that are said to protect one’s investments in today’s circumstances:

1. Keeping almost all one’s cash short term.
2. Putting some money in a mutual fund designed to rise with long-term Treasury bond yields.
3. Options that can go up sharply when interest rates go up moderately (risk takers only here).

What do you think? Agree, not? Let us know, send your comment!