Saturday, June 20, 2009
Last year, the highest-paid fund manager in the world was John Paulson. He earned $3 billion by shorting subprime mortgages. But today, he's buying.
"We've been adding pretty steadily to our long distressed positions," Sandra Lee, a senior vice president at Paulson & Co, told a Hong Kong audience recently. "Where we shorted the lower-quality subprime securitizations, we're now going long the better-quality jumbo, prime securitizations."
This marks Paulson's third bet on real estate. He previously bought a chunk of CB Richard Ellis and started a real estate fund.
Paulson is also buying the debt of banks and other financial institutions, particularly companies that received government bailouts... "That's often space distressed managers traditionally tend to overlook. We've been amassing quite a bit of assets in this area," Lee said.
Once Paulson finishes establishing his real estate positions, his $28 billion fund will be at least 20% concentrated in gold and real estate. Like us, he's expecting a big increase in inflation.
I just finished writing my newsletter, Porter Stansberry's Investment Advisory. I've figured out the perfect way to make money from inflation. Although I can't give away the new recommendation, I can tell you this company's earnings are perfectly correlated to the amount of money in circulation, globally.
As long as the money supply continues to increase, this firm will make more money. And right now, its earnings are growing 30% annually. The other inflation-related picks I've made since last December are now up more than 40% on average. There's a lot more to come. Click here for more details.
We wrote it, did you hoard it?
But the commercial [about seeds] got me thinking about two things... First, I need to throw a couple of packets of seeds into my family's "emergency preparedness" box. Of course, I'll need to go down to the garage and dig the box out from behind a couple of file cabinets, 12 boxes of Christmas ornaments, and a dusty assortment of antique exercise equipment... More important, though, is I realized "survivalism" is now mainstream. – Jeff Clark in the April 30, 2009, Growth Stock Wire
This week, the Washington Post ran a story about the huge surge in demand for seeds... D. Landreth Seed Co., one of the oldest surviving corporations in America, said its seed sales are up 75% from last year. Wal-Mart's seed sales are up 30% over last year. In particular, people are buying staples like beans, lettuce, and potatoes.
When "extreme" ideas like hoarding seeds for disaster insurance hit the mainstream, it's safe to assume the trend is overextended. Some of the large, publicly traded agricultural stocks like Mosaic (MOS) and Monsanto (MON) are up around 30% this year... That's not a big enough rally for a short sale, especially in today's market, but it's worth keeping an eye on them.
The government hates competition, and apparently it's tired of not making any money with the current gold mania... The U.S. Mint is touting a new 2009 Double Eagle Saint-Gaudens.
The original 1907 Double Eagle was designed by artist Augustus Saint-Gaudens. He put an image of Liberty on the front and a soaring eagle on the back. The new coin, available June 24, is a reissue of the original and sells for $1,289 – a 37% premium to gold's current spot price.
S&A Oil Report editor Matt Badiali discovered what could be the most profitable gold investment of the year... And it's right in our backyard. Two mining companies are currently working to develop one of the largest gold deposits in the world. One is a giant, multinational mining company, and the other is a tiny junior miner.
Despite the obvious size difference, both companies will eventually own half of the new mine... And by buying the junior miner today, we can buy its half of the gold deposit for $13.60 an ounce, almost 99% less than today's spot price.
This little company has the biggest upside potential in gold today. Two other giant mining companies already bought shares in it... at a 30% premium. That means some of the smartest guys in this industry believe shares are worth at least 30% more than current prices. Once this company actually starts producing gold, the returns could be astronomical. To learn more about the S&A Oil Report, and access Matt's latest report, click here...
Date Range:6/11/2009 to 6/18/2009
Date Range:6/11/2009 to 6/18/2009