MinKL Invest: 04/12/11

Tuesday, 12 April 2011

Gold and Silver Will Correct Further says Phil Streible

Phil Streible, senior market strategist at Lind-Waldock, says that $1,500 gold and $45 silver are still possibilities but that both metals will correct further
gold silver ratio start to rise again on that has been. Sorry about that severely bad it -- down you know that while the 34 range power -- culture that thirty day we should be dead. Debt spread chart and -- it yeah. On golden copper prices and very far away from both major moving averages and if it is moving average gold on -- in no way I would even worse that -- at 34 dollars so I think the default all quite quickly.

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Gold and Silver Will Correct Further says Phil Streible

The American Dream Film Part 1 HD

Silver Prices Surge as Gold Falls

http://www.thestreet.com

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

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The Greatest Unknown Investment
Story on Wall Street

A million acres for 250 bucks an acre...
That includes a tax-free way to grow $10,000 into over $600 million

By Dr. Steve Sjuggerud

September 2010

"Well... I don't remember ever losin' money, if we did," Roy Thomas told me on the phone this week from his office in Dallas.

Roy Thomas humbly presides over what may be the greatest unknown story on Wall Street...
It's a story of over 110 consecutive years of positive earnings – with no conceivable end to that record.
For the last 53 years, Roy's business has paid a cash dividend. In that time, it's neverreduced that dividend.
How has the business fared in the current Great Recession? No worries...
While most companies have had to freeze, cut, or halt their dividends in recent years, in today's story, the dividend has increased in each of the last seven years. In 2007 and 2008, the company brought in record earnings across its 120-plus-year existence.
This company's dividend is only a small part of the incredible investment story... For us as investors, it gets much better, as I'll explain today.
Your first questions might be, "Why haven't I heard of Roy Thomas before?" or "Why haven't I heard this story before?"
The short answer is: because nobody on Wall Street has anything to gain from this investment. You see, no brokerage firms will ever get investment banking business from this company, because it doesn't need any money. It is completely under the radar.
In this day and age, this is exactly what you and I need in our investments...
Look, in a zero percent interest world, you face the severe risk of not having enough income to live on. The "ordinary" investments out there won't work for you anymore. Cash in the bank, CDs, they're not going to cut it – not even close.
Meanwhile, that cash will have to face the ravages of inflation at some point. Printing money is the easiest way for our government to get out from under its debts – only, it's at the expense of your savings.
You need to supplement your cash income with unique investment ideas... ideas that you might not have considered in the past. You need ideas that have built-in protection from these risks, ideas that are safe, with hidden income and plenty of downside-risk protection.
We need to find ideas that other investors (or high-powered computers on Wall Street) haven't and won't ever stumble upon. These days, desperate investors are taking on way too much risk to earn just a hair more in income. Don't do that!
We have to work hard to find new ways to protect and grow our money. You can't be afraid of doing something unconventional – as long as you understand it. The "conventional" investments won't cut it now.
Fortunately, this month, we have such an investment. It really is a simple story and a simple business. By charter, the business won't change. And it could make you a lot of money, safely.
As I'll show, with some reasonable assumptions, $10,000 could turn into over $600 million – safely. Sounds absolutely impossible, right? Well, read on...
Let me start from the beginning, so you can best understand what we're getting into...

Death of a Railroad...
Birth of a Fantastic Investment

In the late 1800s, the Texas & Pacific Railroad went bankrupt.
In short, the railroad's debtholders ended up getting the railroad's land.
But what were a bunch of bondholders going to do with 3.5 million acres of land in Texas in the late 1800s? Hard to believe, but oil hadn't yet been discovered in Texas...
Who wants 3.5 million acres of Southwestern desert in 1888? How would they get rid of it?
The bondholders came up with a plan to liquidate the land in an orderly fashion: They put the land into a trust – they called it the Texas Pacific Land Trust (NYSE: TPL). The Trust has one official mission: to sell off the land over time, as offers come. The Texas Pacific Land Trust started trading on the New York Stock Exchange in 1888.
Roy Thomas is following that 1888 charter today... as have the Trustees before him through the 19th and 20th centuries.
Texas Pacific started selling its land right away after listing on the NYSE... Texas Pacific was down to about 3 million acres at the turn of the century (I'm talking 1900). Land sales continued briskly, and the Trust was down to 2 million acres by 1921.
Land sales have since slowed... a very good thing for you and me, as I'll explain. As of 1980, the total stood at 1.3 million acres. It was 1.01 million acres in 2003. And it's around 960,000 acres today.


Click the map above for a more detailed version, courtesy Texas Pacific Land Trust

If land sales have slowed, how is the Trust making big money? And what is it doing with that money? The answer to that second question in particular is what makes this opportunity irresistible to us...

Ridiculous Stealth Income:
The Unique "Trust" Structure

By charter, the Trust has to return ALL of the money it takes in (after expenses) to shareholders.
The way it returns money to you is really neat, and important. Before I explain that, let me show you how the Trust makes money.
The Trust takes in a LOT of money for basically doing nothing...
Its biggest source of cash is its perpetual oil and gas royalties from oil drilling on its West Texas lands. In short, decades ago, Texaco (among others) bought the oil rights to the Trust's lands. These companies left the Trust with a small – but perpetual – royalty on the oil taken out of the ground on the Trust's lands.
This oil royalty costs the Trust no money... It just cashes oil checks year after year. With high oil prices in 2008, the Trust cashed $13.7 million in oil and gas royalty checks. In the down year of 2009, it cashed $8.7 million in oil and gas checks.
This year has started nicely...
In the first six months alone, the Trust has already cashed $5.65 million worth of oil and gas royalty checks. In addition, in the first half of this year, it sold 1,694 acres of land for $1.9 million – an average price of $1,115 per acre.
All said and done, total sales for the Trust for the first six months of the year were $10.7 million. (The additional money comes from leasing its land for grazing and earning interest on lands it sold but holds the mortgage on.)
The Trust's profit margins are huge... Remember, this money comes in the door with very little cost to the Trust. As you might imagine, taxes are by far the biggest "cost." Profit before taxes for the first six months of 2010 was over $9 million... and taxes knocked the net income down to $6 million. Still, not a bad six months, for doing nothing.
Over the last decade, the Trust has averaged an annual net profit of about $8 million dollars a year. Remember, by charter, the Texas Pacific Land Trust must give that money back to you, in either dividends or stock buybacks.
In the last decade, the trust has bought back an average of 300,000 shares a year. At the current share price ($27), that would cost them $8.1 million this year.
These buybacks are the most important part of this story...
When the Trust buys back stock, it "retires" it. The benefit to you and me is just incredible...

The Key to the Whole Story:
Turn $10,000 into $600 million... by doing absolutely nothing

It's all thanks to the buyback
If you buy $10,000 of Texas Pacific Land Trust today and do nothing, that investment could theoretically turn into over $600 million. Here's how...
The Trust has roughly a million acres of land, and 10 million shares outstanding. It's been using the income from its oil and gas royalties to buy back (and retire) shares at a rate of 300,000 or more per year.
The logical end of that, of course, is in 30 years, the Trust will be down to one share that owns all the land and is worth over $600 million. Don't sell... and you'll have that one share.

Year	Land Value	Shares Out- standing	Price per Share	Acres You Control	$10,000 Invested Becomes
2010	$250,000,000	10,000,000	$25	40	$10,000
2011	$257,500,000	9,666,667	$27	41	$10,655
2012	$265,225,000	9,333,333	$28	43	$11,367
2013	$273,181,750	9,000,000	$30	44	$12,141
2014	$281,377,203	8,666,667	$32	46	$12,987
2015	$289,818,519	8,333,333	$35	48	$13,911
2020	$335,979,095	6,666,667	$50	60	$20,159
2025	$389,491,854	5,000,000	$78	80	$31,159
2030	$451,527,809	3,333,333	$135	120	$54,183
2035	$523,444,482	1,666,667	$314	240	$125,627
2040	$606,815,618	1	$606,815,618	1,000,000	$606,815,618

There's no funny math here... I'm not "assuming" the price per share goes up. The share price goes up on its own because of simple math... There are fewer and fewer shares holding the company's million acres of land.
The assumptions I do make are pretty reasonable: a starting land value of $250 per acre, 10 million shares outstanding and 1 million acres (in reality, it's a little less in both cases, but the ratio is about the same), a buyback of 333,333 shares a year, and a starting share price of $25. (This way, the math is easy... Your $10,000 investment gets you 400 shares, and you control 40 acres.)
The only "liberty" I took was a 3% inflation rate – increasing the value of the land at 3% a year. It might not go up that fast, but the starting value of $250 per acre might be low, so it should still work out.
Of course, I don't expect that, in 30 years, we'll see just one share of Texas Pacific on the NYSE, trading for $600 million a share. Instead, I expect Texas Pacific will do what it's done for its entire existence and keep splitting its stock.
This doesn't harm you at all. The math above still holds true.
If you never sell, your $10,000 investment should reasonably follow the path in the table above. Simply set it and forget it. This is one for the grandkids!

Each year, Texas Pacific Land Trust is buying back and "retiring" roughly 300,000 shares. Less than 10 million shares exist. So at the current rate, it's buying back and retiring roughly 3% of its shares a year. Said another way, the amount of acres you own is increasing by 3% per year.
I consider that 3% increase per year as our tax-free "stealth" dividend. You'd have to earn nearly 5% interest in a taxable account to have 3% after tax... So this 3% tax-free stealth dividend is more valuable than you might imagine.
At this rate (300,000 or more shares retired per year), the Texas Pacific Land Trust will have bought back and retired all of its shares in about 30 years. The box above shows the incredible story.
So here's what I see...

Adding Up All the Pieces:
What We'll Get for Our Money

I expect the Trust's cash dividend will increase in March (for the eighth year in a row) by one penny – to $0.21 per share. That's just under a 1% dividend yield based on the current share price... and it beats what you're earning on your cash in the bank.
Next, I expect the Trust will buy back much more than 300,000 shares over the next 12 months, since the net income from the first six months of this year was so high. That's a 3%-plus "stealth" dividend tax free to you... a 3%-plus increase in your acres of ownership... and a 3% increase in your percentage of the payout from next year's oil and gas royalties.
I expect the Trust will continue to earn oil and gas royalties indefinitely. Its other sources of money are safe, too – grazing leases, land sales, and more.
What's it all worth today? The Trust has two main pieces... oil rights and land.
Let's do a little back-of-the-napkin math...
The oil and gas royalties totaled $5.65 million for the first six months of this year. Stretch that royalty out to 12 months... that'd be about $11 million in oil and gas royalties this year. At eight times cash flow, those royalties would be worth $88 million today. (It's rough, but it's in the ballpark.)
Next up is the land... What's it worth?
We're talking nearly a million acres of West Texas desert. I looked up all the land sales the Trust has made starting in 2000. The Trust has sold 120,000 acres in the last 10 years at over $50 million total – which works out to over $417 per acre.
A guesstimate of $300 per acre seems safe if the historical pattern continues. (The pattern is low-valued land selling in the $200-per-acre range, with the occasional higher-valued "pop.")
CEO Roy Thomas doesn't offer up much of a sales pitch. "The Trust's land holdings near metropolitan areas are limited," he told me on the phone... twice. But that's good news for existing shareholders. They don't want the story to get out. They actually want the share price to stay cheap, so the buybacks can buy a whole lot more shares.
Adding it all up... roughly $300 million for the land, roughly $88 million for the oil and gas royalties, and a bit of other stuff... We're approaching a $400 million value. With roughly 10 million shares outstanding, I think the Trust is conservatively worth $40 a share.
If you bump the land value up to $400 per acre (the price received for land over the last 10 years), the Trust is worth about $50 a share. That may be optimistic. But shares are trading at about half that... around $27... as I write. (And that's down by half from their 2007 highs.)
This allows us to buy in at 1980 prices. In late 1980, the Trust sold for $30 a share. Since the Trust is in Texas and earns oil royalties, its shares track the price of oil somewhat. If oil spikes, or if inflation spikes, causing the price of oil to rise, the value of the stock will go up.

By owning land and oil rights... and having 3% of shares retired every year… we're significantly protected from the risks of government inflation. With the buyback here, it's like owning a hard asset (like gold) – that "grows" (paying us a tax-free yield). Now that's hard to find!
Remember, the only way you're going to get out-of-the-ordinary returns is to consider out-of-the-ordinary ideas – like this one. You'll beat your cash in the bank, with the cash dividend the Trust pays in March. You're buying land (for only $250 an acre), which insulates you from a falling dollar. And you'll collect oil royalties, which go up as the price of oil goes up.
I can't promise the moon here. I don't expect the share price to soar. But this is a strange case where I'd rather it didn't soar. The cheaper the stock price, the more shares the Trust can buy back with its oil royalties... which benefits us greatly.
I asked CEO Roy Thomas about the wonderful compounding machine – the buyback. Once again, he was careful with his words. He told me (twice): "Yes, what you are saying is correct. We are buying back shares at a greater rate than we are selling land."
So while a $10,000 investment might not turn into $600 million (because the company is selling land, too), the basic math is really working for you here. Texas Pacific Land Trust is a secret compounding machine.
Buy shares of Texas Pacific Land Trust (NYSE: TPL). Try not to pay more than $30 per share.
The shares are pretty thinly traded. I expect the stock will spike on this recommendation. Please keep this in mind. There's no need to chase the stock.We're in a recession, stocks are in a downtrend. This story is more than 120 years old, and it hasn't changed.
The story is out there, but nobody on Wall Street is chasing it. You don't need to chase it either... Think about what you'd be chasing... West Texas desert! No, what we want is the compounding machine.
The secret compounding machine of Texas Pacific Land Trust is probably the greatest untold investment story on Wall Street today – when, more than ever, we need super-safe ideas to grow our wealth outside of the reach of the tax man.
Buy the Texas Pacific Land Trust. Don't chase it. Try not to pay more than $30 for it. Try to buy it over the course of a few weeks, or even months.
TPL is too thinly traded to use a typical trailing stop. Also it's not a company, it's a land trust – it isn't going out of business. There is no business risk. Instead, we'll use a "time" stop. That way, if I'm wrong, we only gave up opportunity cost. For the time stop, I will remove Texas Pacific Land Trust from my recommended list in five years.
Sell half once you've made a total return of 100% (then we're riding on the house's money)

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Aren't you tired of "experts" warning about U.S. debts and the dollar?

Friday, April 8, 2011
Aren't you tired of "experts" warning about U.S. debts and the dollar?
I've heard the warnings of many of these "experts" for literally decades. But fortunately, I never bought into the fearmongering.
Instead, I stuck with what I do best: finding great investment opportunities for my readers. It's worked out darn well – and my readers have even made money multiple times by betting on a RISE in the dollar when the fearmongering got too great.
But times just changed, and the implications are serious...
To this point in my near-two-decade career in the investment business, I haven't worried much about the debt. It's primarily because in my research, I've found there is no way to get the timing right on when these problems will come home to roost.
The sky might fall someday, but predicting which day is tough.
I found that, for decades, the "action" in the financial markets didn't add up with predictions from the "experts"...
Every time the sky would fall in the financial markets, investors would BUY the U.S. dollar, and they'd BUY U.S. government debt. Far from teetering on the brink, the U.S. was the safe haven for decades.
But for the first time I can remember, investors did NOT flee to dollars or U.S. government bonds after a crisis. I'm talking about the Japanese disaster...
Nobody has talked about it. But today, the dollar is lower – and U.S. government bond prices are lower (interest rates are higher) – than they were before the disaster.
In short, for the first time, investors didn't flee to the safety of the dollar. You can argue that Japan's disaster didn't devastate Main Street USA, so we shouldn't have expected investors to run to the dollar anyway.
But I think this drop is significant...
This is the first time I've seen that the U.S. dollar and U.S. government bonds are no longer the world's "safe haven" investment.
While the U.S. dollar and U.S. government bonds are down, commodity prices (like gold, silver, and oil) are up. And stock prices are up.
The U.S. government has made no secret that it's cut interest rates to zero and it's "printing money" to prop up the economy. That has fueled bull markets in stocks and commodities.
As an investor, I expect the existing trend to continue from our government... which is bad for the dollar and U.S. bonds.
I can't know the day of reckoning when it comes to the debt and the dollar, but it is closer than ever. Until the day of reckoning arrives, theBernanke Asset Bubble is in full effect in the financial markets.
So as strange as it may sound, you want to stay invested in stocks and commodities until you can't stand it anymore. Just have an exit strategy of some kind – like trailing stops – in place.
Steve
Now that people are no longer running to the U.S. dollar to hedge against global disasters, we're left with one question: Are gold and silver the new safe havens for Big Money? Find out more here: Did You Notice This Change in the U.S. Dollar?
The U.S. dollar index is right around the lowest levels it's ever been since we went off the gold standard in the early 1970s. And now, the manager of the world's biggest bond fund is selling all his Treasurys. See what's in store for us here: "I Am Confident This Country Will Default on Its Debt."
STOCKS... COMMODITIES... AND NOW GOLD!
The loud message from the market this week: "Get me stocks... get me commodities... get me gold... get me anything but dollars."
Over the past year, we've highlighted how stocks and commodities are exhibiting tremendous "correlation"... which is a fancy way of saying the two asset classes are moving in lockstep together as investors rush to get out of depreciating paper currency.
Well, you can lump gold into this idea as well. Below is a chart that plots the performance of gold (black line) alongside the performance of stocks (blue line) since last August. As you can see, gold and stocks are moving higher in a similar fashion... and sport similar gains.
Unlike many investors, we don't consider gold a traditional commodity like copper, corn, or crude oil. We consider gold "money," and that's it. But as we've shown you with stocks vs. commodities – and now with stocks vs. gold – folks are plowing wealth into all three ideas... for now.
Remember... trends never go up and up without interruption. If folks fall out of love with the "everything up and up" phenomenon, a huge wave of selling could hit everything at the same time.
By Jeff Clark

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07 Apr 2011 07:18

Silver Is Getting Too Popular... Right?
By Jeff Clark of Casey Research, editor, BIG GOLD Thursday, April 7, 2011
It's no secret that the silver market is red hot.
As I write, silver American Eagles and Canadian Maple Leafs are sold out at their respective mints. Buying in India has gone through the roof, especially noteworthy among a people with a strong historical preference for gold. Demand in China continues unabated. Silver stocks have screamed upward.
So, as an investor looking to maximize my profit, I have a natural question: Is the silver trade getting too crowded, meaning we're near the top? Have the masses finally joined the party such that we should consider exiting? After all, it's not a profit until you take it, and you definitely want to sell near the top.
There are several ways to measure how crowded the silver market might be. I prefer to look strictly at the big picture and not get caught up in the weeds. This means I'm looking for signs of market exhaustion or the masses rushing in. Nothing says "peak" more than an investment everyone is buying.
So how crowded are silver investments right now? Let's first look at the ETFs.
At $35 silver, all exchange-traded funds backed by the metal amount to $20.7 billion. You can see how this compares to some popular stocks.
All silver ETFs combined are less than a quarter of the market cap of McDonald's. They're about 10% of GE, a company that still hasn't recovered from the '08 meltdown. ExxonMobil is more than 20 times bigger. And this isn't even apples-to-apples, as I'm comparing the entire silver ETF market to a few individual stocks.
This is even more interesting when you consider it's the ETFs where most of the public – especially those who are new to the market – first invest in silver. So while the metal has doubled in the past seven months, total investment in the funds is still far beneath many popular blue-chip stocks.
Okay, maybe all this money is instead going into silver mining stocks. How does the market cap of the silver industry compare to other industries?
While you fetch your magnifying glass, I'll tell you that the market cap of the silver industry is $73.1 billion. It barely registers when compared to a number of other industries I picked mostly at random.
The dying newspaper industry is over 26 times bigger. Drug manufacturers are 213 times larger. Heck, even the gold market is 19 times greater. And here's the fun one: The market cap of the entire silver industry, with all its record-setting prices and stock-screaming highs, represents just one-third of one percent of the oil and gas industry.
To be fair, there are a number of sectors that are smaller than silver. Radio broadcasters ($43.2 billion), video stores ($10.9 billion), and sporting goods stores ($2.5 billion) have puny market caps, too. But then again, who's buying DVDs or baseball mitts to protect their wealth from a coming inflation?
Silver hardly resembles the picture of an investment that is too crowded.
I'm not saying one should rush to buy silver right now. After all, it has doubled in seven months. Unless this is the beginning of the mania, prudence would certainly be called for at this juncture. The price will always ebb and flow in a bull market, and an ebb is overdue.
The question, of course, is from what price level it occurs. What if a correction doesn't ensue until, say, a month from now, and the price falls back to... where it is now? I remember some articles in January that insisted silver would fall to as low as $22, and, well, they're still waiting and have in the meantime missed out on some huge gains. For silver to fall back to $22 now would require a 40% drop; not impossible, but I wouldn't hold my breath.
Fixating on market timing takes your focus off the ultimate goal. In my opinion, instead of worrying about what will happen next week or even next month, focus on how many ounces you have, and then buy at regular intervals until you reach your desired allocation. This has the added benefit of smoothing out your cost basis. And don't forget to buy more as your assets and income increase.
This is a market where you'll want to be well ahead of the pack. Someday in the not-too-distant future, average investors will be tripping over themselves to join in. That will make the market caps of silver investments look more like some of the others in the charts above.
Jeff Clark
Casey Research
Editor's note: Casey Research's Jeff Clark is the editor of BIG GOLD, a monthly advisory on gold, silver, and large-cap precious metals stocks. He just released his annual Silver Buying Guide, which covers everything you need to profit from silver, whether novice or veteran. To learn more, click here.
"People ask me which currency to hold their gold or silver in." Chris Weber says. But "this is not the right question." Here, Chris shares a radical way to view your gold and silver holdings
"In short," Sean Goldsmith tells us, "the world is out of silver." Well, almost. More and more investors are realizing the value of silver as a currency. And supply is shrinking. Read more here: The Most Compelling Argument for Owning Silver I've Ever Heard.
THE BIGGEST NEWS IN THE MARKET THIS WEEK
The biggest news in the market this week: Gold has broken "out of the box."
Longtime readers know we've been steady and unrelenting bulls on the ultimate "anti-paper" form of money, gold, for over eight years (since even before we published our "$500 Gold is a Bargain" essay in 2005).
We don't do complicated analysis on gold. We don't need to. We know gold is rising because people and their elected representatives have racked up massive government obligations that can't possibly be paid back with sound, honest money. The only way out of these obligations is to pay them back with debased paper currency. The winner in the whole wretched system is "real money," gold.
Late last year, gold confirmed our thesis again with a big move from $1,200 per ounce to $1,400. It then "took a breather" and traded in a sideways pattern for five months. Some traders refer to a pattern like this as a "box." As you can see from today's chart, gold just broke out of its box to hit an all-time high. The trend of sound, honest money rising against IOUs issued by bankrupt governments continues...

He doesn't want you to know

By Dan Ferris, editor, The 12% Letter Saturday, April 9, 2011

The 2008 credit crisis offers a tremendous lesson for folks interested in generating income from their investments.

You're not going to hear this from your broker. He doesn't want you to know.

But if you learn this lesson, you'll find it indispensible in the years to come...

The lesson is that chasing income through stock in highly leveraged companies – like most finance and real estate vehicles – can be a killer.

Many finance companies and real estate firms take on lots of debt to conduct business. They are such low profit margin businesses, they have to "lever up" in order to achieve good returns on capital. They can only exist with continuous debt financing. If this debt financing seizes up, as it did in 2008, it's like the oxygen leaving a room for these guys. If they don't have that constant financing, their share prices collapse. No amount of income will allow your portfolio to recover from a near-total loss.

There is an income investment where you never have to worry about that. Ever. These investments sailed through the crisis, paying... and raising... their dividends the whole way. If you're tired of getting killed by every ludicrous, leveraged sham Wall Street thinks up, this investment is where you want to be.

Before I get to that, though, let me back up and show you how poorly traditional income investments are set up to withstand trouble...

Thornburg Mortgage was a real estate investment trust (REIT). It was great company. It never lost a penny investing in mortgages since the day it started up in 1993. Thornburg returned an average of about 14% a year to investors, most of it in dividends, from 2000 to 2007.

Thornburg's stock carried a double-digit yield. But in 2008, Thornburg was hit with $600 million in "margin calls." Its mortgage assets were falling in value due to the ongoing mortgage crisis. Thornburg's lenders needed $600 million in additional cash – which it didn't have. It sold its high-quality mortgages for less than it paid so it could stay in business. Thornburg's problems worsened, and it eventually declared bankruptcy and ceased all operations.

Thornburg knew what it was doing. The business performed well for over a decade. Its only problem was that it carried $13 billion in debt. Shareholders saw the stock drop from $140 a share to less than $1.40.

You'll find similar stories with many master limited partnerships (MLPs), another popular income vehicle. At the beginning of 2009, for example, Atlas Pipeline yielded more than 30%. Ignorant income investors thought they were in hog heaven. But that year, it cut its dividend from $0.96 a share to $0.15. The share price fell more than 90%.

The problem was, it had over $1.5 billion in debt, more than three times its equity. Atlas' profit margins shrunk as natural gas prices fell... making it impossible to properly service its debt. The company almost went bankrupt.

I hope you see what I'm getting at here. Investors eager for high current yields often buy leveraged junk – junk dreamed up by Wall Street. When trouble hits, junk gets outed and the investors suffer.

But there was one group of stocks that raised its dividends in 2008 and 2009: World Dominating Dividend Growers.

As DailyWealth readers know, World Dominators are big companies that are No. 1 in their industries. They dominate their markets, obliterate competition, gush cash, pay rising dividends year after year, and – since they don't yield double digits right this second – are generally underappreciated by the average income investor.

But in a crisis, your income investment couldn't be safer. Remember, these are the biggest, strongest companies in the world... and their fortress-like balance sheets allow them to march through tough times.

Take dominant software company Microsoft, for example. It carries very little debt, less than $10 billion versus a $219 billion market cap. And in the depths of the crisis, with companies like Thornburg struggling to borrow money, Microsoft had no trouble getting another $2 billion in short-term debt.

More important for income investors, on September 22, 2008 – with global financial markets in a panic – Microsoft raised its quarterly dividend 18%.

The same thing is true of other World Dominating Dividend Growers...

Wal-Mart – the world's biggest retailer – issued $1 billion of new debt in January 2009, at rates as low as 3%. And in March 2009, when the world looked like it was coming to an end, the company raised its dividend almost 15%.

Now... you might argue, World Dominating Dividend Growers' share prices fell along with others in 2008 and 2009. But unlike most other stocks, the World Dominators were never in any financial danger.

They just became better investments during the crisis. Investors were able to buy them more cheaply. (The amazing thing is they're STILL cheap relative to their earnings today.)

By far the best, safest stocks to buy today are World Dominating Dividend Growers. Yes, their share prices can drop, just like any other stock. You don't have control over that. But even if their share prices suffer, they'll still be safe, financially strong companies that raise their dividends year after year. They'll still be great businesses that will prosper for years to come.

Wall Street would rather you not invest in those companies. It wants you to buy the leveraged stuff so they can collect banking fees...

That leveraged stuff usually sounds new and exciting. But great investors avoid "new" and "exciting." They prefer "been around a long time, through everything" and "safe and steady cash flow." They prefer "sleep at night" income investing.

They prefer World Dominating Dividend Growers.

Dan Ferris

P.S. In the 12% Letter, we have four World Dominating Dividend Growers in our portfolio right now that are still in buy range. These stocks have less financial risk than any others. They generate more free cash flow than any other businesses. They pay consistently rising dividends. These should be the core of an income investor's portfolio, not the Wall Street shams. You can learn more on how to access this list immediately by clicking here.

For more on World Dominators, check out...

The Ultimate Stock Strategy for Today's Market

"The antidote to this sort of market is buying the world's best companies that pay out ever-increasing streams of income in the form of cash dividends."

This 6.5% Dividend Is One Sure Path to a Wealthy Retirement

"Buying today, when this stock is yielding nearly 6.5% (and growing!), is one of the best income bets in the market."

The Safest Stocks in the World

"Here's a list of more safe, blue-chip stocks that are all in a strong financial condition..."

CHART OF THE WEEK: THE DOLLAR GOES OFF INTO THE ABYSS

This week's chart is an update on the huge "dollar into the abyss" idea we ran in last week's edition. As you'll see, the news here is bad...

To recap, the U.S. dollar index registered a short-term peak around 81 in January. It then plunged toward its low of 75.63 from last November... only to stage a small rally and step back from this "abyss."

But as you can see below, the market has had enough of the corrupt, constipated "spend and borrow your way to prosperity" American attitude... and has sold the dollar off into the abyss. This week's trading action took the dollar below that old low... and down to the low 75 area.

This horrid trading action is why stocks, commodities, and gold are soaring against the dollar. And it's yet another reminder why our colleague Porter Stansberry says we're not "headed" for a currency crisis… we're "in one right now." Any reasonable person can look at this market action and agree.

MinKL Invest

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Tuesday, 12 April 2011

Gold and Silver Will Correct Further says Phil Streible

Gold and Silver Will Correct Further says Phil Streible

The American Dream Film Part 1 HD

Silver Prices Surge as Gold Falls

The Morning Call is brought to you by T3Live.com

Published by Stansberry & Associates Investment Research.

Aren't you tired of "experts" warning about U.S. debts and the dollar?

07 Apr 2011 07:18

Silver Is Getting Too Popular... Right?

He doesn't want you to know

Porter Stansberry Research - The End of America www.EndOfAmerica2011.com

WORLD