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Weekend Edition

Rumor is, we're cancelling this service
Saturday, September 11, 2010

From our readers...
"Extreme Value... One of S&A Alliance's best publications written by one of its very best investment minds. Cancel it and I should be requesting a refund on my S&A Alliance 'life-time' membership."
"Extreme Value picks are the core of my investment portfolio. Please do not cancel this service."
"I'd just like to add my 2 cents worth to the debate over EV. I am surprised that EV has one of the smallest subscriber bases, given his excellent track record. I am an Alliance member, so probably don't count in his individual base, but his recommendations are the cornerstone of my portfolio – and, I suspect, of a significant number of other Alliance members. Keep up the good work, Dan!"
Ferris comment: I'm humbled by the praise that's come in about Extreme Value. It's my privilege to write Extreme Value to such a fiercely loyal group.
I hope it doesn't seem crass to use such a solemn, humbling moment to plug Extreme Value, but I really do believe I've found a great new opportunity this month. Subscribers know I don't often say that. I haven't recommended a new stock since May. I've only recommended five new stocks in the last 12 months.
This month's new pick is one of those small resource companies that can go up several hundred percent, like my colleague Matt Badiali's ATAC pick (more on that below). It's much safer than most little mining companies, though.
In fact, this little, out-of-the-way business combines the upside potential of a stock with the safety of secured loan contracts, and adds the benefit of a growing stream of income... a highly unusual combination; one you pounce on when you find it. The new issue of Extreme Value just came out this week. Click here to sign up. (We're running a big discount right now... but only through midnight, Monday.)
And whether or not you sign up for Extreme Value, thanks for being a reader.
Big news on the mining front this week... Goldcorp, one of the largest miners in the world, announced a takeover of Andean Resources for $3.42 billion (shares jumped more than 40%). Goldcorp won a bidding war against S&A Resource Report pick Eldorado Gold.
Why would one of the world's largest and most sophisticated gold miners pay so much money for a small mining firm? Because Andean is currently operating in resource-rich southern Argentina. Andean's Cerro Negro project has "indicated resources" of 2.54 million ounces of gold and 23.6 million ounces of silver. I asked Matt Badiali for his opinion on the takeover. He responded:
This is important because Andean has no "reserves." It doesn't even have the highest-quality "measured" resources. This buyout will puzzle some people, but it's about quality assets. The big mining companies are looking for large deposits with good grades. That's the attribute being rewarded in the market today. We're seeing it among the juniors, too.
You can make huge money in junior miners. ATAC Resources, which Matt recommended to Phase 1 subscribers in the November 2009 issue, is now up more than 560%. Two other companies Matt recommended in that report, Rainy River and AuEx Ventures, have returned triple-digits for subscribers. The average gain is 279% in less than a year.
Our editor in chief, Brian Hunt, passed along a note about silver this week...
The interesting thing about silver is the metal is starting to trade a lot like "real money" in the past month. Since much of silver is consumed in industry, it often trades like an industrial metal... like copper or zinc. Investors and traders usually buy and sell it based on their expectations of global economic growth. Most people don't know this, but silver traded almost in lockstep with both oil and the S&P 500 this year.
In the past few months however, silver has soared, while the stock market and oil have languished. The S&P is barely up in the past two months, while silver has climbed 9% to reach its highest level since March 2008. Gold is near an all-time (non-inflation adjusted) high. What's going on here?
Our guess is silver has again become chiefly viewed as a "hard money" safe haven, like gold. Despite the lull of bad news regarding U.S. deficits and a euro meltdown, these problems are still gurgling under the surface of the markets... and seasoned investors are accumulating more gold and more silver in anticipation of a potential crisis.
Matt recently recommended his favorite silver company in his S&A Resource Report. This is one of the few precious metal stocks that hasn't soared in recent months, but it's on the verge of a major breakout. It's the best way you can gain exposure to silver today. Click here to learn more about the Resource Report.
Sean Goldsmith

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This Week's Winners
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JDS Uniphase JDSU +12.0%
Adobe ADBE +11.7%
Oracle ORCL +8.2%

Countries Symbol Change
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Date Range:9/2/2010 to 9/9/2010
This Week's Losers
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Visa V -7.2%
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Mastercard MA -6.2%

Countries Symbol Change
Spain EWP -0.7%
Austria EWO -0.3%
South Africa EZA -0.3%

Sectors Symbol Change
Gold Mining GDX -1.7%
Airlines FAA -1.7%
Infrastructure PKB -1.2%

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Date Range:9/2/2010 to 9/9/2010