This latest pitch coming through from the Wealth Daily folks, for Jimmy Mengel’s The Crow’s Nest advisory, has caught the attention of plenty of Gumshoe readers — it starts with a long spiel about tapping into the “secret” holdings of billionaires by using a SEC disclosure rule that these rich folks are all fighting tooth and nail, but then settles in to tease us about a few specific investments that they think will boom (and that they found, presumably, in the pages of these SEC disclosures).
The SEC data they talk about in the ad, by the way, are the 13F filings — generally these are due 45 days after the quarter end from all institutional investors and fund managers, which is why we know quite a bit about the holdings of Warren Buffett or Carl Icahn and most of the other celebrity investors and hedge fund managers, similar to the quarterly disclosures by mutual fundsd. They don’t have to disclose positions that aren’t traded in the US, and they can occasionally get permission to keep one of their investments secret for a bit longer (as Buffett does from time to time when he’s in the midst of trying to build a large position at quarter-end and doesn’t want to boost the price up, I think he last did that when he was buying IBM shares for Berkshire but my memory might be faulty), but other than the fact that this data comes with a time lag that is quite substantial for some investors it is genuinely valuable information.
Of course, everyone who wants it can get it for free from the SEC’s Edgar database so it’s not that valuable. It’s definitely interesting to see the changes in portfolios as big investors shuffle their deck chairs and buy or sell, but the most prominent ones are also widely reported on CNBC and in the investing pundit universe in general and there are a large number of websites and newsletters that track 13F filings to try to turn up exciting info. Surprising new additions or sales of existing positions can certainly move stocks on the day that these 13F filings come out, but that’s definitely the exception (and, of course, the portfolio that’s being disclosed is about six weeks old when these are released — so they could be impacting stocks that the original superstar investor doesn’t even own any more).
And many of these folks have truly massive, diversified portfolios of dozens or hundreds of stocks under their management so there’s plenty of room for smaller stocks or smaller transactions or less-well-known investors to fly under the radar to some degree.
Which seems to be the point of this teaser pitch — though of course, it has to be a “secret” or it wouldn’t be any fun! Here’s a bit of the spiel just to give you a taste:
“Why America’s rich elite will do anything to keep this document out of your hands…
“The story behind this little-known document might make you angry, especially if you’re tired of Wall Street’s rigged game.
“The good news is this document could have a huge impact on your wealth this year.
“The government has been publishing it since 1975 at a non-descript Federal office located at 100 F Street in Washington, D.C., just three miles from the White House.
“Even though it has been publishing it for the past 38 years, 99% of Americans don’t know it exists. And it’s not hard to see why…Are you getting our free Daily Update
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“America’s richest investors have done everything they can to keep it off-limits from regular folks like you and me.
“They won’t talk about it. They won’t even acknowledge it. Most of them won’t even tell their own family members this document exists.
“But even with all their attempts to keep this information underground, a small circle of ordinary investors like you and me has managed to access one of THE closest-held investing secrets in history — making their own fortunes in the process.”
And what’s up with the “secret metal” bit? Here’s how they put it in the ad:
“Elite Investor #1: “The Secret Metal that Could Add a Zero to Your Net Worth”
“As you know, from 2002 to 2011, gold went up 600%.
“If you missed that big bull market in gold, don’t worry…
“Now you have a second chance to catch a bull market in another metal. Only this bull market has the potential to be much bigger than the gold bull market.
“One of the wealthiest people in the financial world considers this to be one of the most incredible opportunities he has EVER seen.
“This super-investor turned some $15 million into roughly $460 million for his customers from 1998 to 2006. Now he’s massively investing in this metal.”
The Mighty, Mighty Thinkolator can tell you that this “super-investor” is Rick Rule, who used to run his own shop as a small investment banker and advisor in natural resources, with that incredible run into the mid-2000s, and merged his company with Sprott, the big Canadian asset manager, a few years ago.
And what’s that “secret metal” he’s apparently hot on now? Here’s a bit more:
“I’m not talking about gold, silver, platinum, or palladium; this is an opportunity I doubt anyone reading this has ever considered before.
“It’s completely separate from the U.S. economy, which means no matter what happens to America over the next few years, you could still make five times your money on this single investment.
“In the 1970s, when this metal entered a bull market, it went up tenfold.
“And that was not the only time this metal made a lot of people rich.
“There was another bull market more recently, from 2000 to 2007…
“in the last bull market, this same super-investor was heavily investing in the producers of this metal. He says a lot of people who followed him back them ‘added a zero to their net worth as a consequence of that market.'”
So what’s the deal? What’s the secret metal that Rick Rule made millions from in the last bull market, and that he’s hot on again now?
Well-timed, since our longtime reader Myron Martin shared a piece on uranium just a week or so ago — but you probably knew that already, and we’ve seen a consistently rising level of chatter about uranium from many of the newsletter pitchers and free pundits we follow. It’s a nice story because it has lots of global intrigue and also has a strong catalyst that’s likely to shake up the market in the coming year — so it’s a really hard market to figure out, and not just because it’s not really an “open” market like we have with most commodities (there are no uranium futures, you can’t take delivery and store it in your basement unless you want to create an army of radioactive zombies, etc.).
The “shake up” to the nuclear fuel market is the end of the Megatons to Megawatts program that had Russia dismantling their nuclear warheads and selling the fuel to the US to be reprocessed for our power plants — Putin declined to extend that program into next year, so there will be more Russian fuel on the open market but also more demand from US power plants that will likely mean we need more mined supply from somewhere. Folks are still expanding the use of nuclear power for electricity generation and building new reactors, it’s just that they’re not doing much of that here in the US or in Western Europe or Japan, they’re doing it in China and, to a lesser degree, India. And even without new reactors, existing reactors are being kept alive longer and longer and need refueling.
The uranium market is certainly not super-predictable — uranium prices fell in the late 2000s financial crisis along with everything else, partly because the US was selling down some of its stockpile, then there was a boomlet into 2011 that started to wither just before the Fukushima disaster in Japan and then collapsed following that disaster … and despite the fact that absolutely everyone in the uranium business has been pretty focused on the end of “megatons to megawatts” for several years now, the price of uranium on the spot market (which is a small piece of the market, but as close as we get to real prices) has been falling pretty consistently over the past year.
Here’s a little more from the ad:
“This super-investor believes the stage is set for the next bull market… and he thinks it will be as big as the last one. That’s why he’s investing heavily in companies that produce this metal.
“In short, he thinks these stocks will, on average, quintuple in price in the next two to three years.
“Soon this will become one of the biggest topics in the investment world, as more and more people start hearing about it. I wouldn’t be surprised to see this story on the front pages of every major financial newspaper before the end of the year.”
Do we get any more clues about specific stocks they’re suggesting? Well, beyond the fact that they hint about Rick Rule and presumably they like the uranium stocks that he likes, we do get this:
“In this report, I also reveal the name of that company that rallied almost 18,000% in the last bull market. I wouldn’t be surprised to see this stock returning ten times your money in the coming bull market!”
Well, I don’t know for sure which one that was that rallied 18,000% — the huge winner I see mentioned most often from that last uranium bull is Paladin Energy (PDN in Canada or Australia, PALAY on the pink sheets), which went from a penny to ten dollars (it’s now back to 45 cents), but that’s not quite 18,000 percent, and a great many uranium stocks had spectacular runs and equally spectacular collapses in the past 10-15 years.
And though I don’t know that we’re going to end up seeing all the holdings associated with Rick Rule in SEC filings, he is part of Sprott now and Sprott reports its US holdings on 13Fs like other asset managers.
A quick scan of the 13F pulls up a relatively small position in Cameco (CCJ), the first pure play “Major” in uranium that would come to anyone’s mind, a larger position in Denison Mines (DNN), and no other uranium stocks. But I’m not sure whether he might have other assets that aren’t reported through Sprott and if they’re not holding these stocks in the US, they don’t have to report anyway — so they could easily be holding bunches of little Canadian or Australian uranium miners and not be disclosing them.
If you’re interested in specific stocks in the uranium field, you’re probably going to continue to hear about lots of them this winter — which will mean that lots of little stocks with no real hope of becoming producers get promoted as the attention on uranium grows (assuming, of course, that there isn’t another meltdown or financial crisis first). I’ve heard Rick Rule speak positively about Fission Uranium (FCU in Canada, FCUUF on the pink sheets) and Denison Mines (DNN) in the recent past, and they’re both in the highly appealing Athabasca area where most of the highest-grade uranium deposits (like Cameco’s) have been found. He has also suggested Uranium Participation Corp, which is as close as you get to a direct play on uranium prices (more on that in a moment).
I’ve also seen the recent pitches from other folks at Angel Publishing that appear to me to be teasing the tiny upstart Azincourt Uranium (AAZ in Canada, AZURF on the pink sheets), which is also near Patterson Lake up in the Athabasca area. If you’re looking just at uranium itself, then the easiest exposure is Uranium Participation Corp (U in Canada, URPTF on the pink sheets), which is managed by Denison and acts kind of like an exchange traded fund for uranium — it simply holds a portfolio of physical uranium in storage to profit from a rise in the price. And you can check out Myron’s article from a week or two ago for more ideas in the teensy weensy junior part of the market (the part that spooks me).
Do I own any of ’em? No, and I don’t have to file 13Fs either … but I expect uranium will have a good ten years. Doesn’t mean it couldn’t fall in half again, particularly if there’s another crisis, but I think we need nuclear power (preferably from newer, cleaner, safer plants — let’s keep shutting down the old, leaky ones) and eventually someone’s going to have to be willing to pay more for it or we’re going to stop looking for and mining more deposits. I’d personally probably stick with Cameco, Denison, Uranium Participation or the other relatively big companies — mining uranium is a big deal and it’s expensive, current producers are much more appealing to me than explorers.
So what do you think? Moved to follow Rick Rule into uranium? He’s been saying it’s a long-term no-brainer all year, but is also careful to say that even “no brainers” can take a far longer time than you think to play out. Have a favorite pick in the sector? Let us know with a comment below.
P.S. Yes, there were two other ideas teased in this pitch, too — more on those shortly.