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Obama’s Third Term — Stansberry’s “Secret Plan to Retain Power Through 2020″

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OK, I’ll cut right to the core point: The US economy is going to boom so aggressively over the next few years that whoever will be president is going to get re-elected, even if it means amending the constitution to ensure we get to keep Obama in office.

So that’s the premise — the pitch is from Porter Stansberry for his Stansberry’s Investment Advisory newsletter, and he knows better than almost anyone that bold, brash and controversial statements and headlines are what gets attention … and you can’t sell newsletters without getting attention. So yes, some of you are going to be apoplectic over the pitch that Obama will get re-elected again and again, in FDR-ish fashion, and others would feel the same way about the version of this ad that he ran that suggested Romney will also be re-elected next time around if he happens to win today. There are plenty of places for you to discuss your political differences — I don’t particularly want to hear them, so feel free to move on elsewhere with those.

But the main point is not that one or another politician will be re-elected, or even that President Obama will be so beloved that he’ll attain almost king-like status and remain in power like an American Putin. The real point of Stansberry’s pitch is that we’ll want whoever is in power over the next few years to remain there, because they’re going to be really good years.

Why will they be really good? Well, on that front this is really just a third or fourth iteration of the pitch he’s made several times in recent months: Cheap American energy is going to be a huge game-changer.

Which means, of course, that he’s talking about horizontal drilling, hydraulic fracturing, and the boom in US oil and natural gas production that has come (and will continue to come) as a result. And that will bring with it a revival of US manufacturing thanks to the low-cost energy that helped build the US during the second half of the twentieth century. Some of that’s already happening, of course, thanks to the rising costs in China, but the big idea is that we’re going to see dramatic benefits from the fact that energy is now once again cheaper in the US than in much of the rest of the world — and it’s because of rising (and sometimes trapped) production, not because of price controls or weak demand.

That price differential is very clear with natural gas, which is often touted as the “fuel of the future” because of its relative abundance and cleaner-burning profile (compared to oil or coal), but it’s also there for oil. Natural gas is still not that widely shipped, so gas remains far cheaper in Oklahoma than in import-thirsty Korea, for example, but oil is widely shipped and the resurgence of US and Canadian production means that mid-continent resources (as from the Bakken) are cut off enough from overseas shipping that they’re substantially cheaper — that’s the effective differential between the WTI price and the Brent price (they’re not that physically different, but West Texas Intermediate is the oil you buy in Cushing, Oklahoma and it’s the US benchmark for pipeline-connected domestic oil — Brent Crude is the benchmark for North Sea oil but is the benchmark for almost any oil that’s loaded on a tanker — we still import a lot of Brent, particularly in the Northeast, but if you can buy WTI in Oklahoma from a Texas or Bakken field instead it’ll cost you about $20 a barrel less, roughly a 20% discount).

And yes, of course, Porter himself doesn’t endorse Obama — he’s a pretty intense libertarian and doesn’t much like most politicians, but he especially dislikes Obama … here’s a bit from the ad:

“He’s nothing but a charlatan.

“Even so… I know Obama will become the greatest president in U.S. history. Much like Kennedy, this has something to do with his charisma – which I find revolting, but others clearly love. However, that’s not the real reason…

“No, a simple secret lies behind Obama’s soaring power, which is still far from its peak.

“Even as I write these words, an enormous economic force is building. It is a force that rivals the scope of every single American boom in our history – from the 1880s steel and railroad boom, to the 1920s automobile boom, to the baby boom of the 1960s and the computer boom of the ’80s and ’90s…

“The force now behind Obama is more powerful than all of these events – combined.

“This force will carry Obama back to the presidency in 2012. And yet again in 2016. It’s this force that will carry him into the history books…

“This new economic force will change everything about the way our country’s economy works. It will also reshape the world’s monetary… flows… for at least the next 50 years.”

And yes, to remind you, their ads take the safe route in assuming Obama is reelected, since that will get more 50-70 year old white guys mad and make them pay attention, but in other ads they also say that for this purpose it doesn’t matter if Obama or Romney wins, their predicted “big change” will mean that the next president has “unlimited power.”

We get a bit of a history lesson as Porter builds his argument:

“… whatever your politics, just consider this: Teddy Roosevelt was elected as a conservative Republican. His own party stood against his progressive ideas. Nevertheless, powered by a huge oil discovery – Spindletop – and a booming economy, the people of the United States began to demand their government do more and more things. Our sudden wealth and prosperity changed the political mood in the country. We were now rich enough to do more… to help more people. And the government, thanks to its oil riches, could now take on big business and win.

“It’s hard to believe how popular these views became… and how they transformed Teddy Roosevelt’s presidency. He became almost a mythical figure… the most popular sitting president the U.S. had ever seen. He was, in a way, more like a European dictator than a U.S. statesman. This power would eventually lead him to run for a third term – something that had never been done before – in 1912….

“… where did this power come from? Why did Americans suddenly embrace a massively more powerful government, led by a charismatic demagogue?

“The answer is, of course, oil.

“The oil Spindletop produced changed the entire world – forever. The massive increases in production dramatically lowered prices for oil around the world, enriching the lives of millions of consumers. Americans who backed Spindletop became some of the richest people in the world. Gulf Oil, Texaco, Amoco, and Humble Oil all trace their origins back to Spindletop.”

And then from Teddy on to Franklin …

“Although many historians credit the New Deal FDR implemented for accelerating the recovery from the Great Depression… that’s looking at history through the lens backwards. What really happened is clear: The East Texas field created a tremendous amount of wealth. In the short term, lower oil prices caused a wave of economic disruption. But in the long term, it provided FDR with an immense amount of power… allowing him to launch one socialist scheme after another… to the overwhelming applause of the electorate….

“Whether you like it or not… presidents who can garner the most economic power end up achieving the most political power. And… at least for the last 150 years… the root of modern economic power comes from the world’s oilfields.

“So… how will Obama grab enough political power to re-write the U.S. Constitution and run for yet another term? Simple: I believe he’ll launch social spending program after social spending program. He will oversee the largest expansion of the welfare state in the history of our country. He’ll launch new federal departments (something he’s already done… but will expand). He’ll enrich thousands of his backers… and impoverish his enemies… all a scale never seen before in American history.

“How will all of this be possible? Oil. More oil than has ever been found before….”

So there you have the basic logic — cheap oil allowed Teddy Roosevelt to build a progressive government, and Porter says, in not so many words, that the huge Texas oil fields that started production in the decades following Spindletop enabled FDR to spend his way out of the Depression with dozens of big government spending programs, making him a beloved figure with unprecedented presidential power, and he thinks the same will happent to Obama.

We’re going to drop the presidential and political stuff right there. You don’t care who I vote for, and I don’t care who you vote for, the point is that someone’s supposedly going to start rolling in money thanks to this next oil boom, and, dangit, I want it to be me. So what should I do to prepare to profit? That’s where Stansberry heads with this idea, of course — he may enjoy trying to be a political firebrand and want to build the libertarian movement, but peddling investment ideas and research is his raison d’etre.

Here’s some more from the ad:

“THE NEW REALITY OF OIL AND POLITICS IN AMERICA

“Far from being energy dependent, America is already a net energy exporter again.

“It’s true. For the first time since the 1940s, the U.S. is exporting more refined petrochemical products than we’re importing oil.

“That’s mainly because we’re now able to produce natural gas so cheaply that the entire global chemical industry is re-locating here. For example, Bloomberg recently reported that Dow Chemical Co., the second-largest chemical manufacturer in the world, ‘spent a decade moving chemical production to the Middle East and Asia. Now it’s leading the biggest expansion ever seen back home in the U.S. as shale gas revives the industry’s economics.’

Yes, thanks to the Marcellus and the Fayetteville shales and the like, we’re producing lots and lots more natural gas and prices have been sticky at very low prices … and thanks to the Bakken and the Eagle Ford and the like, oil production has also been rising in recent years for the first time in a long time (though the US has been one of the top few oil producers in the world every year for more than a century — it’s just that we’ve consumed more than we’ve produced for a few decades).

And Porter thinks that the glut that has crushed natural gas prices as a result of the shale finds is going to repeat itself with oil, and that gas will recover somewhat.

“Low prices will lead to vast new markets for our oil and gas all over the world. It will create hundreds of billions in profits, annually, for American oil and gas firms. It will lead to huge capital gains for investors. It will cause massive new investments in infrastructure – like pipelines and refineries …

“We have a road map for the coming changes to the oil market. All of these things have already happened with natural gas.

“The natural gas drilling boom began about 10 years before the oil boom. Prices for natural gas, as you know, collapsed in 2008. They haven’t really bounced back yet.

“Most people think the collapse in natural gas prices will last forever. They’re wrong. Natural gas is being sold at prices that defy all logic based on history and its relationship to other forms of energy. Historically, natural gas has sold for about 1/10th the price of oil. In the U.S. today, it’s trading for over 1/20th the price. This huge price discrepancy will resolve itself soon. When it does, billions of dollars will be made….

“Two things are happening, which will cause prices for energy to equalize.

“First, traders will find ways to export U.S. natural gas, moving supplies into foreign countries where the price is higher. And secondly, domestic consumers of energy will shift from using expensive sources (like diesel and coal) to vastly cheaper sources, like natural gas.”

So Porter argues that natural gas prices will recover soon, because of increased use and because so many gas wells were shut in and exploration halted with lower prices … and added in to that are the things we hear about quite often, like the planned export of liquefied natural gas in a few years, and the conversion of much of our trucking fleet to natural gas engines. So that gives you some idea of the stocks he might be teasing in a few moments, once we work our way through some more of the “presentation.”

Finally, then, after a few more pages of rabble-rousing about President Obama, we get to the part where we get to become rich … so what are we supposed to do with our money to benefit from this new oil boom?

“FOUR WAYS OF MAKING A KILLING IN THIS BOOM – WITHOUT TAKING BIG RISKS

“There’s a very stupid way to invest in the oil and natural gas boom.

“This is probably how your neighbors and friends will do it. They will hear about a big new oilfield (maybe like the secret one we’ll tell you about below), and they’ll buy shares of the company that’s exploring it.

“Think about how this worked out for shareholders of Chesapeake during the natural gas boom. Remember, the natural gas boom is like our playbook for what’s about to happen with oil. What you can see is, even though Chesapeake came from nothing to be the second-largest producer of natural gas in the U.S. (behind ExxonMobil), its share price got killed when the price of natural gas fell in 2012 and the company’s finances were revealed to be weak.”

So that’s reasonable enough — betting on oil discoveries or small producers is dangerous enough anyway, but if you think that oil prices will fall with big new booms in production, there will probably be some Chesapeake’s over on the oil side of the market as well. Stansberry’s first pitch is for infrastructure:

“First, the very best way, I believe, to make a fortune in the ongoing energy boom is to invest in the infrastructure that must be built to move U.S. energy into global markets. This might sound boring at first. But believe me, some of the biggest gains in the history of the oil business came from the men who were smart enough to own the infrastructure required to get the oil and the gas to market.”

So what’s the infrastructure for this? LNG shipping …

“To ship natural gas around the world, it has to be converted into a liquid form, something called liquefied natural gas, or “LNG.” Once converted into a liquid, natural gas can be shipped via tanker, much like oil. But… the big difference is LNG requires specialized, very expensive tanker ships. And it requires huge import and export terminals.

“Building out these new ships and these new terminals will take at least a decade. And during that time, investors in the right assets will build huge fortunes…. Like the investors who are smart enough to buy LNG tankers today. The world’s shipyards currently have more than 140 LNG vessels on order…

Luckily for regular, individual investors, a well-run company already owns one of the largest fleets of these highly specialized, expensive ships. It owns 27 ships, in fact, some of the largest in the world. It’s engaged constantly in deals to acquire more ships, and it has dozens more on order. I’m certain this stock is going to soar over the next few years. And here’s the best part: The company boasts a current yield of 7.1%.”

So this first pick of his is Teekay LNG Partners (TGP), which does indeed have a yield of about 7% and interests in a big fleet of 27 LNG shipping tankers. You can see Teekay’s arguments for “why to invest” here if you’re curious — basically, their positioning is as a long-term charter firm that has stable and predictable cash flows … if LNG tanker rates triple in two years, they’re not going to benefit that much because their vessels are largely committed already, but they will keep paying out that 7% (and probably growing) dividend. I can’t argue much against TGP, they’re the big player and they’re fairly conservative and well run as far as I can tell, and that’s a good dividend … I’ve tended to prefer the more aggressive growers like Golar LNG (GLNG) and the new GasLog (GLOG), but that’s probably just because I like a little excitement sometimes, those will both be substantially more volatile than TGP and neither has as high a yield.

TGP is a MLP, so you’ll get the K-1 partnership filing stuff that some people hate, but that might also mean that you get some tax deferral depending on how their payments are structured (income versus return of capital). Their distribution doesn’t look like it’s covered by income, but that’s the case with most MLPs and many shipping companies, it’s largely because depreciation of their extremely expensive assets eats up much of the operating income but, in reality, consumes far less of their cash flow because pipelines and tankers have much longer economic lives than their depreciation rates would imply. I’m not an accountant, that’s just my big picture view — the same goes for companies I’ve owned in the past, including Seadrill (SDRL) and Golar, but I haven’t studied TGP’s numbers specifically.

Some other ideas from Porter? Or, as he puts it:

“I believe this shipping stock is one of the only ‘sure things’ you can invest in today and make a bona fide fortune. What are the other sure things?”

Let it never be said that we dislike “Sure things.” So yes, Porter, what are they?

“… we need LNG export terminals in the U.S.

“These terminals aren’t easy to build. They’re gigantic operations. The terminals must cool huge quantities of natural gas to minus 259 degrees Fahrenheit. Only at these incredibly cold temperatures does natural gas turn into liquid form.

“Guess how many LNG export terminals are operating right now in the U.S.? None.

“That’s right. There aren’t any. None. And of the eight terminals currently being constructed… only one has the necessary license from the U.S. government to export LNG. So… just imagine… there’s an incredible glut of energy in America… and a huge demand for energy all around the world… but right now there’s only one ‘toll bridge’ that’s operating between these two markets. And it’s slated to begin operation in 2015, during Obama’s second term.

“While there’s some competition (not much) for LNG tankers, there’s no competition currently for the LNG export terminal owner. No one else has a license. That makes it, probably, the single best company to own in the entire world’s energy complex today….

“… the one company that has a license to export LNG will reap a fortune. Investors should buy the stock.”

Part of this is certainly political, since Porter’s argument is that the granting of licenses will continue to be a political patronage decision, so who knows when or whether anyone else will get a permit to export natural gas in the coming years — building of LNG import facilities was a political football because of NIMBY concerns, and converting those facilities and therefore increasing tanker traffic (import traffic is understandably very low right now) would probably raise similar concerns … and, of course, if natural gas prices spike legislators will scream bloody murder to avoid having winter heating bills climb for their constituents by exporting more nat gas. I have no idea what the upshot will be, but the second LNG export facility to start operating (there’s a tiny one in Alaska that ships to Japan, they just restarted this Summer) will almost certainly be the one Porter is teasing, which is owned by Cheniere Energy (LNG).

Cheniere Energy is indeed building out a LNG export facility (a liquefaction plant) out of their existing Sabine Pass import facility (a gasification plant) — all of this is in partnership with their captive MLP, Cheniere Partners (CQP), which also owns the service pipeline that is now used to distribute gas from the import facility but will be used to move gas down to the liquefaction trains for their export facility.

All of this is going to be incredibly expensive and the first phase doesn’t go into operation for about three years, so Cheniere should have an interesting ride during that time — they have to raise billions of dollars, and I presume that they’ll do so largely through the MLP, but if they’re right about what will be the long-term price differential at the time when the export facility is in operation they’ll still do quite well. The key question, I expect, is where there will still be a $10 price differential between seaborne LNG and domestic US natural gas in 2015 and 2020. I have absolutely no idea, but my suspicion is that this differential will narrow considerably during the coming decade — partly because of this one export facility, but also for other reasons (more domestic consumption, more international discoveries and production). Unlike TGP or the shippers, my impression is that Cheniere is a long-term story stock without much of a real operating business at the moment, so like all story stocks I would expect very significant volatility since there won’t be strong cash flows or anything like that to buttress the shares until they start to get close to operations at their export facility. There are certainly other LNG liquefaction facilities that are in the planning stages, so I expect the market to continue to evolve — heck, if Golar is successful with their current developments they might even have floating liquefaction capacity coming online in 2015, too (though that, of course, would produce a lot less than a dedicated terminal).

So if you think Porter’s right about his pitch both that LNG export will be major, and that Obama (or Romney, or the regulators) will be slow to grant largesse on other exporters, then Cheniere might indeed have a nice sustainable profit train hitting their books in 2015. There are enough moving parts to make me a bit nervous about that, and I’m more interested in the LNG shippers right now even though they’ll probably hit an equilibrium and possible oversupply next year as we wait for more liquefaction capacity to be built up to use this growing LNG tanker fleet, but I could just be too cautious.

Next?

“there’s one more stock you ought to consider that’s in the same line of work…

“The build-out, around the world, of the infrastructure required to enable LNG distribution of natural gas will take a decade or more. All of those ships I mentioned they’re building – the 140 new LNG tanker ships – they will all require import-export terminals, pipelines, storage tanks, etc. The U.S. is the world’s largest market (today) for natural gas precisely because it has the best natural gas infrastructure. Our approach to energy will be copied, around the world.

“And… this will require building vast amounts of new energy facilities.

“One company specializes in LNG infrastructure. It’s the world’s leading LNG builder. It makes the terminals. It makes the pipelines. It makes the storage tanks. You won’t be surprised to learn that this stock has already doubled in the last two years. But this is only the beginning. The rise in the stock so far doesn’t even match the backlog of its business.

“This is my second ‘sure thing’ way to invest in America’s energy boom. It’s always safer to buy the companies that make the infrastructure than it is to buy the oil producers themselves. Or as we say around the office, someone has to make the barrels for all that oil.”

Well, if he had hinted at the leading supplier of LNG equipment, I’d have to guess that his pick was Chart Industries (GTLS), which his analyst Frank Curzio had picked as one of his “Eagle Diesel” plays earlier this year … but since he said it’s the leading LNG builder, with terminals and pipelines, I’d say he must be teasing Chicago Bridge and Iron (CBI). That one’s a bit of a guess, given the lack of specific clues, but I can’t think of a second candidate who comes close as a publicly traded US stock.

And CBI has gotten relatively inexpensive again over the last few months, after perhaps too much attention drove the shares up early in the year — they trade at a forward PE ratio of 11 and analysts think they’ll grow at a good 15-20% per year going forward, so that equation works out quite well for investors. If the growth happens. I’ve personally been hoping that this one gets cheaper still — it’s certainly much easier to buy than is Chart Industries, but with big contracting companies there’s always the hope that they’ll have a lousy contract or a big cost overrun that lets you buy the stock when it’s depressed. CBI remains on my “one to watch” list but I’ve never owned it.

So that’s what Porter’s pitching these days as his plays for the second and third terms of the Obama presidency … what do you think? No, not about whether Obama’s arrogant, I don’t care what you think about that — what do you think about the new energy boom, and the potential for huge profits from the LNG export infrastructure buildout? Let us know with a comment below.

Disclosure: I personally own shares of both Seadrill and Golar LNG, which are mentioned above. I have a small position in speculative call options on TGP. I don’t own any other stock mentioned and will not trade in any of those stocks covered above for at least three days.

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89 Responses to Obama’s Third Term — Stansberry’s “Secret Plan to Retain Power Through 2020″

  1. Very Good, well done
    At least he makes us all think , hopefully on the energy side he is correct for the future of the USA
    All correct and it is Chicago Bridge and Iron (CBI )

    • Uranium and the coming need for it, IS the sleeping giant. Here are the players:
      CCJ (The Big Daddy or the Exxon of the sector). These junior minors are also great plays:
      USU, DNN and URRE. Note, these are ALL long term investment plays. But to those that
      build a portfolio of these stocks over time- when the damand for Uranium finally comes-
      and it is coming- CHA-CHING!

  2. Your timing was perfect on this one and your resoning sound. You did however fail do delve into Stansberry’s discussion on uranium and your thoughts there.

  3. As for TGB, you didn’t mention TK, the parent of TGB.
    One may want to research that as well as TGB.

    I came across this promo last week and was able to identify the first two but not the last one. I have been doing some research into them and decided for now I’ll pass, but I’m a chicken. I think there is some merit to both TK or TGB as well as LNG and CQP, but the real payoff for them may be a year or two from now. But by then some other players may pop up, so I’ll stand aside on these.
    Very good write up.

  4. What makes Stansburry think that Obama won’t ban fracking? He will cater to his Eco Nazis. More importantly, his intention is to bankrupt the country. When the dollar crashes he will then give away our resources to all those poor foreigners that he thinks we ripped off, and do it for pennies on the dollar. It’s all about revenge and redistribution for him

    • You sure hit that nail on the head, No fracking, and continue to give away the precious parts of the country. Control impedes progress.

      • John,, Fact – He is a Socialist and wants to redistribute America’s wealth. Maybe you should take a minute and define what redistribute wealth means to an Obama supporter. Please do and also bridge the gap between redistributing wealth and the American Dream of building individual wealth and being successful in business.

    • Dear Earl: Really, Obama wants to bankrupt the Country? Maybe we should again start to check his birth certificate to satisfy you and that Icon of egoism, Donald Trump. Thinking something rediculous is one thing but to actually put it in writing is astonishing.

      • He doesn’t really want to but he will. He just has no other policy but his failing socialist control agenda. The “Eco Nazis” are no worry as they typically have no money, but Obama will try to reward his supporters in the energy industry (If he still has some) by unleashing contracts and leases toward them. To bad for Haliburton, but hopefully they are big enough to weather the storm and still be able to move forward

        • Obama cutting drilling leases on government land now makes sense. His excuse was because they weren’t drilling. When I heard him say that my response was “So? What is the advantage to America for you to be holding the leases instead of private citizens that can actually drill when prices/conditions/research makes drilling profitable?”

          He wants to either hand them out to his buddies (for a guy that thinks there are a lot of problems with Capitalism, he sure does like Crony Capitalism) or do like Porter says, to shake down (a la Jessie Jackson) the businesses. Bush and now Obama, Crony Capitalism is now official government policy. Bush with oil friends, Algore’s attempted Chicago Carbon Exchange scam, Obama’s billions to Green cronies, are just the beginning of a lucrative new investment field, Friends of the Prez (FOP) or Friends of the VP (FOVP). Perhaps a new ETF could be started for investors. I believe it would pay good profits from now on.

          • @Larry,
            I can see both sides of this argument. Yeah it doesn’t really accomplish anything to have the leases held by the govt.
            On the other hand, having them revert to the govt allows the leases to be repriced at a fair valuation for the American people. Too much of the resource wealth of the nation is tied up in 75 to 100 year leases where private industry acquired rights when assets were considered to be of very little worth and then have continued to hold them at a tiny fraction of FMV based on some valuation performed in 1923 with the option to renew for ANOTHER 75 or 100 year term at the end of the lease.

            Allowing the lease to remain vacant until it’s commercially viable will ensure that when those leases are written at least the American public can expect to get something close to FMV for the asset in question. Basically I’d rather have the leases vacant than exploited for 10,000% private sector profit.

  5. “The key question, I expect, is where there will still be a $10 price differential between seaborne LNG and domestic US natural gas in 2015 and 2020. I have absolutely no idea, but my suspicion is that this differential will narrow considerably during the coming decade…”

    That is the major question, especially with the US late to the game, with numbers of LNG export companies already operational, from Indonesia, Australia, Russia, Qatar, Trinidad, and many more hurrying to get into the game (Canada). Like the US natural gas boom, the field will probably be vastly over-built, with the danger of translating a US gas glut into a world gas glut. Cheap energy could create another global industrial revolution, but it may not be all that good for natural gas and LNG investors.

    • Your paragraph begins == “So this first pick of his is Teekay LNG Partners (TGP), which does indeed have a yield of about 7% and interests in a big fleet of 27 LNG shipping tankers. You can see Teekay’s arguments for “why to invest” here if you’re curious…”
      For the “You cans see,,,,here…” DO YOU HAVE A URL for this?

    • Buy ALL the WPRT you can, and CLNE, CHK, LNG and GLOG! These are the POWER stocks of the next 10 years! What I would give, to be 21 and have time on my side to stock pile the companies. Regarding West Port; Fed-Ed, and UPS are already changing
      over their engines to Natural Gas. The savings to these companies will be hundreds of
      millions of dollars! The money to the smart investers that bought the stocks is “Cha-Ching.” I just bought more of West Port today!

      • Those keep coming back as ideas, to be sure — with WPRT, I rode it for a while in the beginning (2008ish), and ever since then they’ve been promising that they’re on the verge of profitability, so you can usually get it cheap when they have their quarterly disappointment. Story still excellent, potential still very good, rising numbers of engines built, but they can’t seem to get it together to turn that into big revenue or any kind of positive earnings. I still do wish that it would have been possible to buy just their incredibly successful Cummins Westport joint venture on its own years ago, that’s my favorite part of their business.

        Would love to see thousands of big rigs running on LNG or CNG in the coming years, and it seems like it should happen, but the journey between “should” and “does” is a long one and not necessarily a consistently profitable one for all the players.

        • I have been watching omnitek for several months now and that is a story that shows much promise but still no profitability. They just announced a loss that is lower than previous years and keep making deals with entities on a trial basis but nothing so far that will get the engine going.[pun intended]. Meanwhile the stock has fallen to its lowest level since I have been watching.

  6. Funny… I just watched that Porter pitch a few hours ago as I was watching WPRT tanking again. I was curious as to where he was leading too. It was kind of scary to hear that Obama was going to become king. I have wondered myself about if Obama won, could he some how win a 3rd term or more, I always look down to Venezuela and Chavez and wonder could that happen here. All he needs is that 51% for which he has a perpetual 47% already. Scary..

    Anyway, I created a paper portfolio of Porter NatGas plays last May consisting of 9 stocks (CBI, CHK, CLNE, GLNG, GTLS, HEK, LNG, TGP and WPRT). So far, that portfoli is down 2%. However up, CBI, CHK, and GLNG are up 11%, 15% and 21%. Unfortunately, i happen to own WPRT.

    • Do Americans know their own history. I understand that it was FDR who implemented the two term limit. In order to go back to 3 terms there would have to be a constitutional amendment. I fail to see how the Republicans would agree to that if meant Obama was running for a 3rd term. Politics in the States have gotten so ridiculous that people are making up stories out of nothing and then others are worried that they are fact. If you think the U.S. under Obama is the same as Venezuela under Chavez perhaps you should go down to Venezuela for a few months and try to run a newspaper or lead an opposition movement. We’re rolling in oil sands in Canada and the one party that most strongly supports their development (the Conservatives) are hardly looking at a millenium of ruling the country.

      • Thank-you for a reality-check, Lorne. It seems to me that spin-talk was viewed as fact by far too many….putting them into a bubble containing an alternate reality. With the election past, perhaps some reflection is in order. Facts do matter. And those spouting the same old spin-talk sound ever more removed from reality, therefore crazier and crazier.

      • If you are in Canadian Oil Sands (bitumen) you need to get out. Short it if you can. Cheap oil is going to drive them under.

      • The third-term presidency theory stems from the supposition that there are at least three supreme court justices that will need replacements during the president’s term. If he can replace conservative justices with his more liberal supporters he could then petition for the repeal(?) of the 22nd amendment. Many pieces would have to fall into place perfectly for success of said effort.

      • Do Americans know their own history? Some do, including the fact that the 22nd Amendment was passed by the 80th Congress in 1947. During the Truman administration. This Congress was the body that Truman railed against as the so-called “do-nothing Congress.” The legislation was fully ratified and became the 22nd Amendment in 1951.

        Now the year 1947 would have been FDR’s fourth term in office, as he was elected to it in 1944. However, his death in 1945 made Truman president.

        Overturning the 22nd Amendment requires passing a 28th, or higher numbered Amendment, if there are other issues up for amendment status. This involves a 2/3 majority vote of both the House and the Senate and ratification votes of 37 state legislatures.

        This is the only possible way Obama could get a 3rd term. It cannot be done by five Supreme Court justices. Consider the time scale involved in getting it done to match Stansberry’s thesis. Does one really think that getting that many politicians on board an issue that quickly is actually possible? No one is really going to buy into the idea that a sudden catastrophe, or an economic boom is sufficient to making it happen.

  7. As you are quoting Stansberry, you should use his spelling for the president’s name. He spells it OBAMA! What Stansberry wrote about stocks does not depend on OBAMA! continuing in office. He’s just using a “caught your eye!” tactic.

    • I have been moving out of coal and into CPN. Its more cost efficient and cleaner. It is
      the power plant (stock play) of the future regarding utilities. And the cost right now
      is cheap.

  8. It seems the rest of the world has discovered Shale plays in their own backyards, and many could be in business by the time LNG export facilities are up and running here. CLNE, WPRT, and some of the pipelines seem to me to be the wave of the future today. About 18 months from now we will know whether LNG is a good prospect or not. I expect it will make money, just not too sure about the huge spreads lasting that long. Japan is planning to build a pipeline to Russia. Several of the old Soviet countries are negotiating to build pipelines to Europe. I have even heard plans for a pipeline across Myanmar/Burma. I can see a path for oil and gas to become plentiful and relatively inexpensive over the next ten years. Production costs should keep a bottom under things, but competition will keep a lid on them. On the upside the middle East will disappear from the world stage as the major player, and we, the USA, will be free from blackmail and extortion by big energy firms.

  9. Coal will put people to work even with the dirt ,short mid term coal plays will not go away, long term infrastructure and lng and ocean going logistics all have to come together will take more time but add to portfolio individually , should pan out well and as time rides the options will split to show a lot of winners then world political power picture will make a more violent prosperous picture, there will be terrorist on the sea’s wait for the movie and buy some Disney. Shipbuilders use welders and the backlog will grow with new and especially retrofit of older vessels that can still be tuned up, which brings the scrap into play with location which all lead to insurance on the water will need a new geico that can swim when the sharks are circling there will be great ship to shore needs in all sectors. I think even with the ENVIRONMENTAL WHALE CHASERS WILL NOT MATTER WHEN THEY HAVE LARGE JUST OFF SHORE STORAGE FACILITIES FOR AREA’S THAT ARE NOT TOURIST HAVENS BUT CLOSE ENOUGH TO NEED THE FUEL FOR POWER, WHO WILL BE THE LARGEST MLP OF THE SEA, THAT IS ALSO MOVE WORTHY WHEN WEATHER HUNTS THEM DOWN. DO NOT BE SURPRISED TO SEE UNDERWATER STORAGE DOMES SUCH AS SEEN ON LAND LIKE THE STRATEGIC PETROLEUM RESERVE. It is already happening in the military they can fuel there fighter jets in the air do not be surprised if they do not hi tech and unseen underwater fueling even with all the uranium buffers needed, what people can not see they do not complain it is long term national security already in the works, it is better than the satellites going around the earth . There will be a new safer way for fuel but there will always be tree huggers. The future is closer than what one would want it to be.

    • Cummings is the other BIG one. Buy they are very expensive! WPRT is the way to go. Buy on the pull backs. Its pretty darn good right now. The contracts that they have lined up are very impressive. Also buy all you can of CLNE (Clean Energy) which is building a massive Natural Gas (fueling system network) across the USA. CLNE is cheap right now.

  10. The number of vehicles that run on lng worldwide is in the millions. Why is WPRT the only conversion compamy mentioned? Who makes the others and why is that technology not being adopted here?

  11. My personal opinion is that Stansberry has been over-hyping these shale plays, both oil and gas. They are vastly more expensive to drill than conventioal fields, and most of them have horrible depletion rates. Another thing he totally avoids is EROEI ( energy returned on energy invested). For these reasons and others, I expect the price differential between U.S. and foreign gas to lessen over time. For those who would like to do some research, here are some places to start.
    http://www.tfmetalsreport.com/blog/4195/guest-post-another-special-report-srsrocco
    http://www.theoildrum.com/tag/shale_gas

  12. Well, since it seems that Obama has been re-elected, much of the foregoing discussion may very well be wishful thinking or poppycock. Obama has vowed to kill coal, first, and second, will probably direct the EPA to abolish or disallow fracking. It seems that anything that would help make America energy independent is cotrary to the desires of the tree huggers, et al. Uranium is verboten since Fukishima and it’s not clear where the infrastructure to efficiently move LNG or CNG even within the US will come from. As mentioned earlier, the apparent intent to redistribute the wealth the US has seized without the consent of the involved countries will leave us with wind, solar, and hydroelectric power generation (and maybe tidal?). Instead of massive new wealth from this marvelous new source of energy and productivity, we may be heading further into a downward spiral.

  13. All you conspiracy theorists with your laughable delusions about Obama, LNG/CNG is too big for any politician to ignore. And it is environment-friendly because it produces half the CO2 per unit of energy compared to gasoline. However, other countries will get into the gas export game, which will keep prices from rising significantly. So the only play that makes sense to me is CBI. They will benefit no matter who sells gas to whom for how much.

    • Is fracking considered eco-friendly ? It has been improved upon but still it is on the environmentalists list. None of us know what this administration will do or if in fact it is not a wise thing to do in the long run.

    • Yes, Porter was predicting the end of democracy as we know it … a total economic implosion. A far cry from the current position. His political bias is nonsense.

  14. Stansberry is a foul-mouthed racist. In a recent public podcast he made fun of people with foreign accents, blasted affirmative action and used the phrase :”f—king ni–ers.” at 11:16 in the audio at the link below. It is even in the transcript you can download!

    I urge you to download these before he “disappears” them, and then tweet this to everyone you know. He needs to be taken down.
    http://www.stansberryradio.com/Porter-Stansberry/Latest-Episodes/Episode/120/Why-Oil-Is-The-Next-Revolution#

    • Blah Blah Blah….Say what you want. Standsberry is SPOT ON! I will take his advice any day of the week. I have taken his advice and made money, hand over fist. Enough said.

  15. So far Porter would seem to be correct about the Presidency, so step one out of the way the questions becomes catching the cycle at the right time to profit. Buying now for a 2015 to 2020 growth spike in LNG is a little dicey, so much can happen within that projected time frame. My perspective is that the most immediate profit opportunity probably lies in the building of the expensive and complicated facilities needed worldwide to facilitate LNG import and export and I long ago identified Chicago Bridge % Iron as the most likely candidate to benefit. For people like myself with very limited capital my inclination is to buy LEAPS option on a down day in the markets to get the best price. Have not checked prices at time of writing but will probably put in a “stink bid” hoping to catch an intra-day low but advocate patience, slow days around the holidays might be a good time to catch a bargain.

  16. 1) 2,795 billion tons CO2 are tied up in the know fossil fuel reserves.
    2) 565 billion tons CO2 can be released over the next 40 years and the global temperature increase will be less than 2 degrees C.
    3) releasing all of today’s known reserves will increase global temperature about 6 degrees C.
    These numbers can be found in the Carbon Tracker Initiative’s report Unburnable Carbon.
    So, if 80% of the world’s known fossil fuel reserves can’t be burned without defying the many of the world’s governments (they agreed that global temperatures must not increase more than 2 degrees C), what will happen to fossil fuel stocks? Is this a fossil fuel bubble?

  17. I’m curious about the small LNG plant that reopened this past summer in AK? Where is it and who is it? Enstar?

    • It’s the Kenai LNG facility, in Nikiski, AK, processing gas from fields in the Cook Inlet. Some folks are chattering about building big plants to process North Slope gas in the future, but that’s mega-billions and years away. Kenai is owned by ConocoPhillips (COP) and is small and old.

  18. Another major new technological development is floating LNG plants. These are basically very large ships, so large they dwarf the largest LNG carriers. They anchor over an offshore gas field and process natural gas to LNG, store it onboard, and load it on to LNG carriers. These will also compete globally. So the likelihood of keeping a $10 price differential between US domestic natural gas and exported gas to Japan, Korea, and China (where the price differential exists now) is low.

  19. Porter forgot about Lisa Jackson. If Obama keeps her on the job, there will not be any great fracking and off shore drilling boom. The EPA is committed to killing this boom before it gets too far out of the cradle. Green energy is the only thing they believe in.

    • It seems tome that green energy is what would be best for us all to invest in and to ask that the companies producing it share the profits with the people who invest in them. Tahnt is the purpose of the stock market , in my opinion.

      • Share the profits? What profits? The government has been picking winners and losers with our tax dollars. Solyndra went bankrupt, as did others. No doubt if we make coal and gasoline exhorbitantly expensive, then alternative energy would look better in comparison. If these green companies looked like they’d make money, venture capitalists would surely be gung ho to make those profits. Best thing to do is be tight with the people doling out the public funds and having the taxpayers guarantee those loans. I’m sure people who had GM bonds are ecstatic that government chose United Auto Workers’ interests ahead of the bondholders, some of whom may well have been widows and orphans. As for me, I’d never invest in GM or Chrysler nor buy their cars. Time for another bailout. Oh and I think it was GM parts supplier Delphi who lost their pensions in toto. since they weren’t smart enough to be part of the UAW thugocracy.

        • If you want to know thew truth about Delphi I suggest you goole Greg Palast and read his investigative reports and see who the REAL thugs are. Anyone else interested in what went on at the expense of Americans wokers

    • Pure nonsense that Obama would ban francking in the midst of a slow economic recovery while things are booming in North Dakota, Colorado, Utah, Oklahoma, Texas, West Virginia, Pennsylvania, and Ohio. These are all traditional mining states, and the Fed Government would not dare to intervene without risking losing the next election. Recall that one of the reasons that Obama won PA and OH was because of their rising economies. No politician would threaten these without raising the risk of losing the next election.

      • Obama didn’t seam to have a problem blocking the Keystone pipeline project and he was facing re-election. Now he has no more elections to worry about, unless you think he will angle for the third illegal term as suggested. Why would you think this massive mistake of a president wouldn’t try to ban fracking?

        • Even if the president angles for a third term do you think he’ll get it? I cant see both houses getting together for a two thirds majority if the item on the ticket was that the sky was still blue.

          And then getting it ratified by 38 states? Forget about it. The whole idea is just silly.

  20. I certainly hope so but – in my opinion – it is a lot further off than 2015. There is too much infrastructure to be built to make it feasible that quickly. And, maybe, the U.S. will finally get a National Energy Policy put together. But there may be asking too much of our politicians.

  21. My take on Mr Travis Johsons article is that he doesn’t care about my or your political views only in educating/informing us on potential investments …Kudos to Mr Johnson it was a well written and very informative article

  22. I am late getting in on this, but one thing that is hogwash.
    When I worked with CBI back in the 1960s an 70s, we were building LNG barges to move LNG from the west coast to Japan. I don’t recall the location of the terminals, but they were on the west coast.

  23. I’ll agree on the stocks sluethed and post my vote for CBI as the one with the least risk and biggest potential for gain. No one has mentioned their proposed purchase of Shaw Group for $46 share. Analysts have estimated EPS of CBI next year (after the deal) rising from $2.80 to $4.20 share. Even if the sale does not go through (Shaw shareholders have posted their disappointment on “white paper”) CBI should see a spike if the deal falls through. CBI share price has been pressured lately under the uncertainty.

  24. Thanks again for this one. Travis. I had the post election doldrums, so I bought Sturm Ruger and Smith & Wesson, (the trend is your friend as noted above ) and I really just wanted to buy something sexier like grapheme.
    I’m more inclined to closely watch the healthcare fallout (Obamacare) as a result of his re-election. I think it will save the boat loads of money he was after, and consequently give the energy industry a much needed break from the media. At the rate Obama is losing some of his top players, it’s too early to say if Stansberry has his game on and can read the tea leaves.

  25. I truely believe that Obama will seek to bring the United States down so that a one World Government can be established eventually. Agree or not this man thinks capitalism is evil.
    We ask for what is coming possibly the dollar crashing .Marshall Law ,Dictatorship.

  26. “…possibly the dollar crashing .Marshall Law ,Dictatorship.”
    You had me there. What does the dollar crashing and dictatorshp have to do with “Marshall Law” Marshall aid was the post WWII aid to Europe between 1948 and 1953 that helped Europe recover) and then my feeble 73 year old brain made the connection to martial law.
    This feeble brain would argue that the enemies of capitalism are the extreme greedy who create a fertile ground for recession, depression, a dollar collapse, martial law, and dictatorship.
    And that Obama can only help save capitalism by putting strong regulations on the extreme greedy.
    Those that invest in people and industries that produce products that can be sold should be taxed at a far lower rate than those that invest in a computer program that buys and sells on small variations without regard for the product the company sells. In other words a variable transaction tax coupled to the number of transactions per day. 1 transaction per minute = 1% tax on both profit and loss.
    This is just one aspect of a philosophy that aims at directing money towards companies and away from extreme speculators.
    The factors that control a market are greed, fear, cooperation, and control. Today the dominating factor is fear. Before 2007 the dominating factor was greed. Without control greed and fear will alternate and cause greater and greater inefficiency in the marketplace. Better to control the extreme greedy so that growth is moderate. Then the fearful won’t have as much to fear. And “possibly the dollar crashing .Marshall Law ,Dictatorship” will not happen.
    Remember too that the current situation is also the result of spending borrowed money.

  27. I agree the correct assertion would be the institution of MARTIAL LAW….this is possible and perhaps inevitable in view of the arrogant propensities of our current “Elitist” President….but installing himself as “Third Term or more President” would initiate REVOLUTION and upheaval of the severest kind…not something Americans would enjoy
    or tolerate. Perhaps the latest ploy by the International Bankers recently hatched in
    Basil Switzerland mandating return to the “GOLD STANDARD” and abandonment of “FIAT Currencies” will effect such massive economic upheavals that Obama could
    use EMERGENCY Powers available to him to achieve additional time in office….not an unlikely attempt by a personality such as his. Time will tell….the old Chinese curse”May you live in Interesting Times” could be vested on us!!!!!

  28. Does anyone else wonder about the history here? Teddy was president in the first decade of the century. He tried again in 1912 for the Republican nomination and lost to Taft. Spindletop didn’t come until well after the War I. the Republicans in office then were Harding Coolidge, and Hover. I don’t think that it helped any of them. Besides, the state of Texas invented the railroad commision to regulate the price of oil by simply introducing production allowables. Louisiana followed suit for their coastal waters. Nonsense. A real libertarian would have a totally different take on this.

  29. Stansberry’s heavy handed exploitation of fear of SOCIALISM! and Obama hatred makes a very short story into a long one. It cannot disguise the shallowness of his economic analysis. I have no idea whether his special reports would be any better.

    • I agree with you Maurice, Stanberry attempts to exploit socialism, but it may be because his knowledge of socialism is as shallow as his knowledge of American history. To attempt to turn Obama into a Progressive Democrat is laughable. He is a conservative to moderate Democrat whom Progressive Democrats like very little.

      • Its a free country do what you want. His advice (Porter) S) is the ONLY financial advice I trust and I have done very well following it. For each his own- that is why we call it America!

  30. Several things to think of:
    @ Obama has regularly gone around the constitution & congress with Executive orders. Voila! Third term.
    @ He surrounds himself with flaming leftists and “whale chasers” but deep down his roots are old style Chicago politics a la Daley with big time graft. They can’t resist the money because that’s where their power comes from.
    @The Keystone pipeline was blocked specifically to benefit Warren Buffet who owns UNP railroad which currently ships most of the oil in tank cars from ND to the gulf.

    • Also I forgot to thank Travis for this interesting blog which provides a counter-point to all those newsletters advertised on money news and elsewhere. I was actually looking for Stanberry’s Newsletter after seeing his video on this subject. Luckily Duck Duck Go search engine came up with Travis Johnson’s site first!

  31. How will any of this new found wealth affect Social Security and Medicare? Will the increased tax revenue be put to shoring up these entitlements or will it be wasted on more of Obama’s “Solindra debacles?”

  32. I’m writing from my fallout shelter, wiping canned cat food from my lips, because Stansberry told me the US dollar would collapse last year. Is it safe to come out yet? Are the riots over? If Stansberry says we have more oil and natural gas and energy than the sun, it must be true. Count me in!

  33. I have yet to hear any comment on the very end of this Stansberry report which advises buying bonds instead of stocks. The recommendation was to invest in the assets themselves instead of buying the stock. Any thoughts??

  34. Hey, WAIT JUST A MINUTE, boys and girls. My wife is over joyed that I have found out that Mr Stansbury may have gone over the top a bit and we won’t have to move into a fallout shelter. Now that I have been on this blog for a few days I was hoping this would be my new source of accurate info. But alas, I am seriously bummed to see that someone thinks Spindletop came along AFTER WWI. PLEASE say it isn’t so.

    • You’re right, Spindletop came in 1901. My error. A quick check of Wikipedia indicates that it came in in 1901, had two peak years, and then coasted until 1917, when secondary discoveries really kicked it off again. I’drecalled the Railroad Commission evolution which stuck to regulating railroads and segregation until 1917 when it got into pipelines. But the real regulation of crude prices didn’t start until 37”. It set up allowables in order to protect production in the West Texas fields when several additional East Texas discoveries added to Spindletop.
      The Railroad Commission got the job (whose objective was to prop up a Texas product) in 1937 when there was some concern tha the Feds might. And there was a national view to keeping oil prices high (in order to support coal). Funny though,, when the Feds got into regulating gas, the effect was to suppress prices — thus collapsing the coal industry in the western US for a time

  35. Let us hope Mr Stansberry is never hired as a speechwriter or pastor. He has to be the most boring, long-winded come-on-artist I have ever heard. “Jeeze-Louise Porter, learn to sum up man!”

  36. Porter is even showing up on my facebook, what a jerk but he get’s a lot
    of milage with his Bull shit. Must be his love of attention he keeps blasting.
    One must stick to the old saying “if it sounds like BS and looks like BS and even
    smells like BS it must be BS.

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