You might call it the “golden butterfly effect.” That, of course, is a reference to the famous example of how complex systems work, wherein a butterfly flapping its wings could set off a chain of events that eventually results in a major storm on the other side of the world. The point is that even small and seemingly unimportant events can end up having major consequences — such as what’s been going on in the gold market of late. #-ad_banner-#By now, the story on bullion is familiar to commodities investors. Gold prices have fallen rapidly and substantially over the past… Read More

You might call it the “golden butterfly effect.” That, of course, is a reference to the famous example of how complex systems work, wherein a butterfly flapping its wings could set off a chain of events that eventually results in a major storm on the other side of the world. The point is that even small and seemingly unimportant events can end up having major consequences — such as what’s been going on in the gold market of late. #-ad_banner-#By now, the story on bullion is familiar to commodities investors. Gold prices have fallen rapidly and substantially over the past year. Starting in April 2013, the price of gold began to fall. By May 2013, bullion had dipped below $1,200 — a 25% drop in a matter of weeks. What happened? What caused gold to see such a sudden and deep loss of value? Some speculate that the stabilization of global markets reduced demand for gold as a safe-haven investment. Others argue that there was collaborative manipulation of the gold price by the central banks of the world. But some recent data — from a relatively obscure part of the globe — have led me to a different conclusion, one… Read More

It has been more than three years since the Fukushima nuclear power plant was crippled by a tsunami, spewing radioactive material into the environment. Similar to the way in which nuclear radiation lingers for an extended time, the financial and political effects of the disaster continue to affect nuclear power generation across the world. #-ad_banner-#Shortly after the Fukushima disaster, the Japanese government made the decision to shut down its 50 remaining nuclear power plants, with Germany following suit and committing to accelerate its decommissioning of nuclear power generation. Even China got in on the act, demanding an accurate… Read More

It has been more than three years since the Fukushima nuclear power plant was crippled by a tsunami, spewing radioactive material into the environment. Similar to the way in which nuclear radiation lingers for an extended time, the financial and political effects of the disaster continue to affect nuclear power generation across the world. #-ad_banner-#Shortly after the Fukushima disaster, the Japanese government made the decision to shut down its 50 remaining nuclear power plants, with Germany following suit and committing to accelerate its decommissioning of nuclear power generation. Even China got in on the act, demanding an accurate account from Japan so it could apply the disaster’s lessons to its own nuclear power initiatives. With so much talk of reducing nuclear power generation, demand for uranium has been on the downswing. This has pressured profit margins for companies that produce uranium. But we may now be at the point where sentiment has reached its ultimate low. Prospects for uranium demand are starting to improve. China in particular should help drive demand for uranium as the country continues to build out its nuclear power program. In fact, there are several state-owned nuclear companies that are gearing up for initial… Read More

I took a trip last fall to northern British Columbia.  Flying from Vancouver, I first stopped in a small village with a population of just over 5,000. This village is one of the “big cities” for the region.  In the surrounding communities, you’ll hear weekenders talking about “going for a night” in this small town with the same excitement as they might discuss a trip to Vegas. Then I took a short fixed-wing flight to another rural community.  This tiny hamlet has an airstrip, a hotel and several cabins.  When the local pub didn’t get its food shipment one day,… Read More

I took a trip last fall to northern British Columbia.  Flying from Vancouver, I first stopped in a small village with a population of just over 5,000. This village is one of the “big cities” for the region.  In the surrounding communities, you’ll hear weekenders talking about “going for a night” in this small town with the same excitement as they might discuss a trip to Vegas. Then I took a short fixed-wing flight to another rural community.  This tiny hamlet has an airstrip, a hotel and several cabins.  When the local pub didn’t get its food shipment one day, I was nearly left without any dinner — there simply aren’t other facilities here. And yet places like these two small settlements are bustling with activity.  The short flight into the town cost more than my ticket up from Vancouver.  A night at the hotel proved more expensive than my last stay at the four-star Intercontinental in Bangkok. These two small communities are beginning to feel the ripple effects from the world’s first trillion-dollar boomtown. #-ad_banner-#That trip confirmed my suspicions that massive, natural gas-driven investments here are going to blow the local economy through the roof, and I shared the… Read More

Commodities have dramatically outperformed the broader market so far in 2014. The iPath DJ-UBS Commodity Index Total Return ETN (NYSE: DJP) has risen roughly 10% this year, while the S&P 500 is up just over 1%. But not all commodities have kept pace. Coal prices have suffered from the fracking boom, as natural gas inventories rose and prices fell. Market Vectors Coal ETF (NYSE: KOL) is down 9% in the past year. And coal producer Walter Energy (NYSE: WLT) has fared much worse, declining roughly 60% in the past 52… Read More

Commodities have dramatically outperformed the broader market so far in 2014. The iPath DJ-UBS Commodity Index Total Return ETN (NYSE: DJP) has risen roughly 10% this year, while the S&P 500 is up just over 1%. But not all commodities have kept pace. Coal prices have suffered from the fracking boom, as natural gas inventories rose and prices fell. Market Vectors Coal ETF (NYSE: KOL) is down 9% in the past year. And coal producer Walter Energy (NYSE: WLT) has fared much worse, declining roughly 60% in the past 52 weeks. Yet, the death of coal has been greatly exaggerated, as it still accounts for the majority of electrical power generated in the United States. (My colleague Dave Goodboy recently took a look at the fuel’s near-term prospects.) And while coal as a commodity isn’t getting much love from investors at the moment, we can use an options strategy to generate an attractive level of income or buy shares of this beaten-down stock at a major discount. As you can see on the one-year chart, WLT has dropped from $20 a share to new lows near $7. Read More

Several years ago, when I was looking for exposure to rising oil prices, I spent quite a bit of time searching for bargains in the energy sector. After examining the various investment options available, I developed a game plan for the next couple of decades. #-ad_banner-#I call it my unconventional plan, because it involves investing in oil producers focused almost exclusively on unconventional (horizontal) production. The plan looks like this: 1.) Find unconventional producers that appear reasonably (or cheaply) valued based on current reserves and production. 2.) Focus on those that have the biggest land positions in… Read More

Several years ago, when I was looking for exposure to rising oil prices, I spent quite a bit of time searching for bargains in the energy sector. After examining the various investment options available, I developed a game plan for the next couple of decades. #-ad_banner-#I call it my unconventional plan, because it involves investing in oil producers focused almost exclusively on unconventional (horizontal) production. The plan looks like this: 1.) Find unconventional producers that appear reasonably (or cheaply) valued based on current reserves and production. 2.) Focus on those that have the biggest land positions in these horizontal oil plays relative to their enterprise value. 3.) Sit back and wait as the technology and techniques being used by these unconventional producers continue to evolve. Horizontal drilling with multi-stage fracturing is still in its infancy, and I expect future improvements on current techniques will allow for a lot more oil to be recovered than anyone expects. 4.) Enjoy the added benefit of rising oil prices making all of the oil that these companies sit on top of more valuable. Crescent Point Energy (NYSE: CPG) is the premier horizontal oil producer in… Read More

It’s an explosion of wealth that’s about to shake the very foundation of the North American energy landscape. Investors who know about it early on stand to make a killing, while those who don’t will be left wishing they had gotten in sooner — before the big gains were already made. I’ve been pounding the table about this for months… telling my subscribers about this little-known opportunity. It’s right on the cusp of a massive influx of investment that may be unparalleled globally. And recent events show that we’re getting close to the tipping point. I’m talking about the world’s… Read More

It’s an explosion of wealth that’s about to shake the very foundation of the North American energy landscape. Investors who know about it early on stand to make a killing, while those who don’t will be left wishing they had gotten in sooner — before the big gains were already made. I’ve been pounding the table about this for months… telling my subscribers about this little-known opportunity. It’s right on the cusp of a massive influx of investment that may be unparalleled globally. And recent events show that we’re getting close to the tipping point. I’m talking about the world’s first trillion dollar boomtown. #-ad_banner-#If you’re a regular reader of StreetAuthority Daily, you might remember that I’ve written about this boomtown before. In fact, I’ve been telling my Junior Resource Advisor readers about this since October 2013. I’m not telling everyone the name of this town right off the bat. I do this not to be coy, but rather because we’re still in the early stages. The mainstream press hasn’t gotten a hold of this story yet, and once word gets out, the game’s over. But the name of this town isn’t as important as the trends taking place and… Read More

The market seems to be in upheaval this year, yet the S&P is only down 1% year to date. So what’s going on? #-ad_banner-#Simply put, we’re seeing a rotation in the market — namely, from growth to value. In hindsight, this development was easy to predict. We’re in the latter stages of an economic cycle, which tends to be characterized by rising interest rates and inflation, combined with lower corporate profit margins. This spells bad news for momentum-based growth stocks, and we’ve seen the effects of that play out in the past couple weeks. In an effort to moderate investment… Read More

The market seems to be in upheaval this year, yet the S&P is only down 1% year to date. So what’s going on? #-ad_banner-#Simply put, we’re seeing a rotation in the market — namely, from growth to value. In hindsight, this development was easy to predict. We’re in the latter stages of an economic cycle, which tends to be characterized by rising interest rates and inflation, combined with lower corporate profit margins. This spells bad news for momentum-based growth stocks, and we’ve seen the effects of that play out in the past couple weeks. In an effort to moderate investment risk during cycles like this, investors tend to take a flight to safety, looking for stocks with value, represented by good cash positions, low debt, dividends, low price-earnings (P/E) ratios — and, of course, earnings growth. This raises the question: Where exactly should investors be looking right now for safe, value-based stocks? One of my favorite sectors right now is energy — specifically oilfield services. Oilfield service stocks are currently leading the pack in the energy space, spurred on by strong earnings growth and low valuations. Let’s take a look at three of my favorite leaders in this field… Baker… Read More

Every now and again, an opportunity comes along that turns unsuspecting, normal people into overnight millionaires. #-ad_banner-#Such as are the promises being made with the Cline Shale, located in the Permian Basin in West Texas. It has become one of the most talked-about and buzzworthy energy plays in the last century, let alone the past few years. Covering an area of over 1 million acres, the Cline Shale could be the largest North American oil play of all time, with the potential to pull 30 billion barrels of oil out of the ground.  For perspective, the… Read More

Every now and again, an opportunity comes along that turns unsuspecting, normal people into overnight millionaires. #-ad_banner-#Such as are the promises being made with the Cline Shale, located in the Permian Basin in West Texas. It has become one of the most talked-about and buzzworthy energy plays in the last century, let alone the past few years. Covering an area of over 1 million acres, the Cline Shale could be the largest North American oil play of all time, with the potential to pull 30 billion barrels of oil out of the ground.  For perspective, the Bakken Shale in North Dakota and Montana and the Eagle Ford in South Texas are estimated to contain 4.3 billion and 3 billion barrels of oil, respectively. The Cline is bigger than both combined — several times over. The proliferation of methods like fracking has made drilling for commodity reserves much more feasible in the past decade, and there is no shortage of exploration and production companies rushing to the area to stake their claim. I have had a unique geographical advantage in that I spent the past year and a half in West Texas, feeling firsthand where the Cline… Read More

From my apartment here in Medellin, Colombia, I can see the sign to a local gas station. The price of gasoline has climbed to $5.20 a gallon — but there’s another price listed just under that…  #-ad_banner-#For $2.68 per gallon equivalent.  That’s the price for natural gas, and people down here love it.  The boom in natural gas production in the United States pushed prices to historic lows, and many were predicting massive conversions of cars away from gasoline to natural gas. The transformation would have driven a huge shift in the auto industry, and one… Read More

From my apartment here in Medellin, Colombia, I can see the sign to a local gas station. The price of gasoline has climbed to $5.20 a gallon — but there’s another price listed just under that…  #-ad_banner-#For $2.68 per gallon equivalent.  That’s the price for natural gas, and people down here love it.  The boom in natural gas production in the United States pushed prices to historic lows, and many were predicting massive conversions of cars away from gasoline to natural gas. The transformation would have driven a huge shift in the auto industry, and one company has a virtual lock on natural gas engine technology. Sentiment jumped in this game-changer, and this company’s shares surged more than threefold over the two years to early 2012. It seems the market was ahead of the curve, and the conversion cycle has not come just yet. But that doesn’t mean it’s not coming — only that the game isn’t changing as quickly as investors had hoped. According to the Natural Gas Coalition, there are 130,000 natural gas vehicles (NGVs) in the United States and more than 2.5 million in the world. Considering there are roughly 143 million cars… Read More

In investing, it’s easy to get carried away with chasing the latest trends and the newest companies. I’ve found another (and often more lucrative) way to go about finding the next big stock investment.  #-ad_banner-#I call this method “the view from 50,000 feet.” In it, I mentally take a huge step backward and look at the economy as though I’ve never seen it before. This exercise enables me to see the big picture from the top down. My primary question: What themes have been consistent for more than a century? After the obvious — food, water, shelter —… Read More

In investing, it’s easy to get carried away with chasing the latest trends and the newest companies. I’ve found another (and often more lucrative) way to go about finding the next big stock investment.  #-ad_banner-#I call this method “the view from 50,000 feet.” In it, I mentally take a huge step backward and look at the economy as though I’ve never seen it before. This exercise enables me to see the big picture from the top down. My primary question: What themes have been consistent for more than a century? After the obvious — food, water, shelter — what other overriding theme has been at the forefront of economic growth? The answer is energy — electrical energy, to be exact. Without electricity, the modern world as we know it would not exist. More importantly, the use of electricity is becoming more prevalent as the world grows more technological. (I know this is very obvious, but it’s easy to overlook when it comes to investing.) Continuing to look down from 50,000 feet, I asked: What is the source of the electricity? Surely there must be great investment opportunities there.  A large part of the answer is coal. Coal generates… Read More