I’m deeply worried.
One of the best crisis indicators around — the gold market — is exploding higher … up $15 in two days … indicating something in the financial markets is coming unglued.
Odds are the source of the crisis is the disaster in the energy markets — perhaps some large hedge funds that sold short oil are about to go under, with tens of billions in losses.
Another possibility is the huge bath banks and insurance companies are taking due to the massive destruction of property.
I’m not quite sure what it is, but I’ll tell you this: As unfortunate as Katrina is, I think we’re just beginning to see the consequences of her damage. Something bad is brewing out there, and gold doesn’t like it one bit.
That’s why I’m writing to you this morning.
The Best Defense Is a Good Offense
It’s time to make absolutely sure your money is SAFE.
First and foremost, keep the bulk of your assets in a liquid money market fund that owns strictly the highest quality instruments, such as short-term Treasury securities. Steer clear of long-term bonds.
Second, if you have any stocks that are vulnerable in this environment, get rid of them soon after this Labor Day weekend. In my view, that includes virtually every stock market sector except gold, energy and other natural resource companies.
There may be other exceptions, and certainly not every stock is created equal. But personally, I’d be out of blue chips, tech stocks, transportation companies, you name it. They’ve gone nowhere. And now they’re starting to sink.
Third, the natural resource stocks I’ve been recommending in my Real Wealth Report are doing great. Stick with them.
Fourth, for money you can afford to risk, consider what I’m recommending to subscribers of my Energy Options Alert. In less than five weeks my recommendations have surged 44% … 48% … 52% … 128% and 161%. Not every trade can be a winner. But their open positions are also up — by as much as 72.7%.
Why The Energy Crisis is Far Worse
Than The Authorities Care to Admit
The authorities know how prone the public is to panic.
They know that the gas tank of every single car and truck on the road in America
today is, on average, half empty or less.
Plus, they know that if Americans flock to gas stations to top off those tanks, it would suck up every drop of available supplies in the nation.
Even before Hurricane Katrina, we’ve already seen glimpses of gasoline panics in recent months — Martin even described them to you in detail in his e-mail of August 22. And this week, we are seeing a LOT MORE evidence of this same phenomenon.
So you can understand why energy authorities are under strict instructions to say nothing that might fuel a nationwide gas buying panic.
But that should not prevent YOU from getting the objective facts you need to make rational decisions about your investments:
Fact #1. Hurricane Katrina has damaged many more rigs and platforms in the Gulf than last year’s Ivan. It is easily the single greatest natural disaster to strike the energy sector in history.
Fact #2. It couldn’t have come at a worse time. The world is running out of oil and demand is off the charts.
Fact #3. The extent of the damage to the oil and gas infrastructure in the Gulf is still largely unknown, and we won’t have substantive information for several more weeks. This uncertainty, in itself, is a major part of the problem, making it difficult to plan reconstruction efforts.
Fact #4. Some industry experts estimate that as much as 65% of the Gulf’s production could be off line for two to three years. And that assumes no more storms.
Fact #5. The convulsive impacts on the economy and the financial markets are many, and you have just seen the first wave.
Fact #6 …
Energy Services Companies
Are About to Reap Their Biggest
Earnings Windfalls Ever
In the Gulf, multi-billion dollar rigs and platforms destroyed by Katrina will need to be replaced. Others, seriously damaged but recoverable, will need multi-million-dollar repairs.
New oil and gas wells need to be drilled. Old wells need to be rebored. Massive amounts of debris have to be removed. Shattered pipelines at the bottom of the Gulf, the most difficult challenge of all, will take months to restore.
And in many cases, merely rebuilding the previous structures may not suffice. New, time-consuming risk-assessment studies will be needed before a lot of the work can even begin.
Companies specialized in this field will see a surge in their volume of business.
For instance, one of the companies I just recommended to subscribers to my Energy
Options Alert is a producer of welded tubular steel products and line pipe for oil and natural gas wells.
Despite everything that’s happened in recent days, this company is still dirt cheap, trading at just 8.3 times earnings compared to an industry average of about 30.8 times. Sales are already soaring, and I expect its earnings to follow suit.
Five hundred shares would cost you about $16,240 if you bought them outright. But the options I recommended cost only $1,100 (plus your broker commissions) and represent the same 500 shares. That’s nearly 15-to-1 leverage.
If I’m right on where the share price is headed, the call options would spin off a gain of 354%, or $3,900.
Another energy services firm is getting ready to be one of the NEXT stocks to blast off. Just this week, its share price jumped over 5% in a single day — another sneak preview of what I think lies ahead.
Based on this company’s dominant position in nearly all facets of energy engineering services, I expect to see its share price leap when the multi-million dollar contracts start pouring in from oil producers.
In this case, five hundred shares would cost you about $30,775 if you were to buy the shares outright. If I’m right on where the share price is heading, you’d stand to make about $6,650.
But why shell out nearly $31,000 when you can effectively control the same 500 shares for a modest investment of just $1,350 using call options?
These options give you virtually the same profit potential, but at one-23rd what it would cost you if you were to buy the shares. That gives you the potential for as much as a 492% windfall.
A third company I’m eying is perfectly situated to reap large earnings windfalls from its underwater operations in the Gulf.
The shares have already surged over 18% in the last few days, but I think they have much more potential. I’m looking for a brief pull-back in the shares early next week. If I get it, it will open up a nice buying window.
In this company, 500 shares would cost about $24,850. But with options you get a position representing the same 500 shares for about 5 cents on the dollar, or about $1,175.
If the shares jump as I expect them to, you’d see a gain of up to 453%, or $5,325.
That Gives You The Opportunity to Control $71,865
of Oil Services Company Shares for Just $3,625
As you can see, buying the shares outright is very capital intensive. But with the options, you get the chance to control nearly the same $72,000 worth of shares for just $3,625. That’s an overall leverage of 19-to-1.
And with the purchase of options, even in the worst-case scenario, the most you can lose is the $3,625 plus your broker’s commissions. Not a penny more.
But on the profit side, if I’m right and these shares hit my targets, I figure that $3,625 could be worth as much as $19,500.
Energy Options Alert:
Designed to Feast on The Profits
Now Available in The Energy Sector
I am a fairly conservative speculator. I don’t like investing on margin, or speculating on situations that involve shelling out hefty amounts of capital — let alone investments that expose me to unlimited risk.
That’s why I like options. You can lose money. But you can buy the options with small grubstakes, and your risk of loss is ALWAYS strictly limited to the amount you invest.
So your keep-safe funds, which should be the bulk of your assets, are never affected, even in the worst-case scenario. Meanwhile your upside potential is virtually unlimited.
When you join Energy Options Alert …
First, you get the Energy Options Alert Trading Manual. The manual gives you the A-B-Cs on the various types of energy options and how they work: How they provide you with incredibly powerful leverage on the upside. How they limit your risk. How you can maximize profits … and much, much more.
Second, you get my special report — “TAKEOVER FRENZY†— which gives you all the ins and outs of how to identify a takeover candidate in the energy markets. Especially from China’s point of view, where a host of factors are critical to the country securing oil supplies for its future.
Third, whenever I see a hot opportunity with short-term leveraged profit potential and limited risk, I’ll rush you an email detailing exactly how you should trade it.
Sometimes the trades will be very short-term oriented, risking very small amounts of money to go after very large pay-offs. Other times the trades will be longer-term, aiming to ride the next major rise in oil prices. And in some special situations, I may opt to recommend the shares rather than the options.
Naturally, because these markets move so fast, the initial recommendations you receive will depend on when you come on board and what’s happening in the markets at that time.
Fourth, on each trading recommendation, I will tell you exactly what to buy, when to buy it, how much to buy, what to pay for it, and precisely what instructions to give your broker. Then, it’s up to you to pull the trigger, or not.
My goal: To make you money by making it easy for you to trade options.
Fifth, you’ll get follow-up instructions on when to roll over positions, take profits, add new positions, or get out of a position to cut a loss.
The reports aren’t fancy, but they’re very readable and easy to understand. Besides, the idea isn’t to win a beauty contest; it’s to make you money.
If you have questions, you’ll have a special email address where you can send us your questions and we can get back to you as fast as possible with answers.
The price of the service is $5,000. If you can’t afford the subscription fee without jeopardizing your liquidity, then this service isn’t for you. But if you have some speculative funds available, I believe the profit potential is many times the cost of the subscription.
2-for-1 Charter Memberships Selling Out This Weekend
Join Energy Options Alert now for one full year at the normal price of $5,000 … and take the second year free! That’s two full years for the price of one.
There are three limitations to this offer:
First, there are only a handful of Charter Memberships available with this 2-for-1 offer, and they will certainly be gone before the holiday is over. Once those are sold out, this offer will not be repeated.
Second, this is strictly for subscribers to our publications. It is not available to the general public.
Third, no other discounts are available with this offer.
Naturally, if you wish to cancel at any time in the first year, for whatever reason, you will receive a full, pro-rated refund on the balance of your subscription.
To take advantage of the profit potential in the energy markets and to get your first set of high-profit potential trades with the ability to turn $3,625 into as much as $19,500, the time to act is now.
Right now, the last remaining Charter Memberships are selling out. If they’re not all gone by tonight, I’m certain they’ll all be gone by the end of the Labor Day weekend.
You can reach us this weekend at 877-719-3477, between 9am and 5pm.
Yours truly,
Larry Edelson
Editor, Energy Options Alert
P.S. Warning: After the remaining Charter Membership slots are filled, the subscription rate reverts back to $5,000 annually. So don’t miss the chance.
About MONEY AND MARKETS
MONEY AND MARKETS (MAM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Larry Edelson, Tony Sagami and other contributors. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MAM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MAM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Contributors include Marie Albin, John Burke, Michael Burnick, Beth Cain, Amber Dakar, Scot Galvin, Michael Larson, Monica Lewman-Garcia, Julie Trudeau and others.
© 2005 by Weiss Research, Inc. All rights reserved.
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