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Ferris’ “If I had to Put ALL My Money in One Stock” Pitch

What's Extreme Value's editor pitching as "My No. 1 Stock Pick of All Time?"

By Travis Johnson, Stock Gumshoe, February 24, 2021

This is not a new idea, and in fact we’ve looked at it pretty recently as it’s been pitched by other pundits, too… but Dan Ferris is out with a new promo for his Extreme Value newsletter that re-touts the idea he’s often touted as his #1 favorite investment for a few years now, and the tide of questions from Gumshoe readers is rising, so we’ll at least get those “what is it” questions answered for you today.

The lead is compelling, as always…

“Stansberry’s most secretive analyst comes forward – says he believes ONE stock could beat everything he’s recommended in 20 years… and has the chance to soar 1,000%, beginning immediately.”

And Ferris notes that this is indeed an older idea, and that he’s boldly releasing his “rare interview footage” from 2019…

“I’ve never – ever – felt so strongly about getting one single idea out to the public.

“Then 2020 came along. Everything changed. The video got put on the back burner.

“And for nearly two years now, this rare interview footage has essentially sat in a vault.

“Until today.

“I practically demanded that my publisher finally release the tape, right now.”

So that’s a fun narrative to put behind this promo, but we should note that Stansberry has ginned up subscribers for Extreme Value using pretty much this same teaser ad all along, we’ve seen it resurface every few months since he first released a precursor of this ad in February of 2018.

Doesn’t make it a bad idea, of course, Ferris is a value-focused guy, and like all such investors he tends to be patient and stubborn. Sometimes it takes years for your investment thesis to play out.

And he loads up the expectations for this one now…

“this new recommendation could be better than anything I’ve shared in my career.

“I stake my reputation on it.

“It’s my No. 1 recommendation.

“Not just for 2021, mind you…

“It’s the No. 1 stock recommendation in my 20-year career.

“Hands down.”

And it’s not a short-term play, though, of course, he does say that “upside could arrive very quickly” — a teaser ad has to have some urgency in it, of course, otherwise you’re not going to pull out your credit card (they’re selling Extreme Value right now for $1,500 for the first two years, no refunds). More from Ferris…

“My best suggestion is that you buy this stock and essentially forget about it.

“Because to me, this is the ‘holy grail’…

“I believe this has 1,000% long-term potential – in a low-risk, low-volatility stock that could soar in a ‘Melt Up’… and potentially do even better when stocks inevitably break down.

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“I consider this stock a ‘one-and-done’ way to make sure you don’t miss out on the upside of gold or cryptos over the coming years.”

So what is this stock that’s teased as a gold royalty play, you ask? Yes, of course we know what it is, we’ve covered the earlier versions of this ad several times… but one more bit of tantalizing for you first…

“It’s a ‘hidden’ opportunity. The market doesn’t yet realize this is a royalty business – which is the only reason it’s possible to buy it so cheaply today.

“I seriously doubt that situation will last.

“It’s the kind of thing you’re lucky to see once or twice in a lifetime….

“I call it ‘the Best Gold Business on Earth.’

“And I believe buying it today could be a lot like getting in on the world’s best royalty companies at the very beginning of their astronomical runs.

“But in this case, it’s not a conventional royalty collector…

“It’s even better than that.

“And it’s not a miner… explorer… producer… or any other type of business you’ve likely heard of, either.

“Those kinds of businesses are extremely risky. Even in a raging gold bull market they go bankrupt all the time, for many different reasons.”

So what’s being teased here? This is once again, of course, the Canadian asset manager Sprott (SII), which is primarily focused on managing investor funds that are exposed to precious metals and other natural resources. Their biggest businesses are ETFs and mutual funds, primarily those that own physical precious metals but also a few that focus on owning miners, and what Ferris refers to as a “royalty” is the management fees they earn from those funds (and from their other asset management work, including hedge funds/partnerships that invest in junior resource companies).

And I covered Sprott again just a few weeks ago, when Eric Fry was touting the stock, so you can check out that article if you want to dig into the details, including a bunch of charts I pulled up to track assets under management, but this is a little excerpt:

The last time I wrote about Sprott was back when it was applying for that NYSE listing last Summer and Ferris pitched it again. So what’s the best way to think about this one?

I think of Sprott as essentially a levered play on gold (and to a lesser extent, silver). That means it’s primarily in competition with other levered plays on precious metals, primarily the mining stocks and royalty companies. It’s not as operationally risk as those firms, since the majority of their assets under management are in ETFs that primarily just hold physical metals… but nor is it as levered on the upside unless they’re able to attract a lot of new dollars into their ETFs when prices rise. Which maybe they can, but that isn’t at all a certainty.

The New York listing could certainly help in the long run, particularly if we see an extended bull market for gold and silver — Toronto is the center of natural resources investing, and Sprott is a much stronger brand name north of the border, but there’s so much money sloshing around on the NYSE that almost any decent company that gets listed in the US and can get “discovered” with any kind of story that appeals to investors (and “leverage to gold or silver” counts as a story) can certainly get a lift from being included in that much larger market — especially if they’re a fairly unique story.

Sprott is the only real “pure play” asset manager in precious metals, so there’s certainly some chance the stock could take off if people are excited about gold — I imagine there’s a limit to that, but I don’t know what the limit is.

The optimistic case is that a NY listing lets Sprott also raise more capital at a higher valuation, and invest more heavily in the business to acquire more assets, and that creates a flywheel of returns because of the inherent efficiencies of scale that an asset management company enjoys as it grows (the same team can manage $500 million or $5 billion without a big difference in costs, especially if it’s mostly just in bullion). That’s certainly possible, though I don’t know what their plans are — if gold is on a strong rise for a few years that would provide a nice tailwind, and if gold falls again it’s possible that they’ll be able to acquire more assets, like the Tocqueville mutual fund they bought a couple years ago, at relatively appealing prices.

And in the short term, if silver really takes off because of this newfound Reddit-linked enthusiasm or for whatever other reason, the hope is that they’ll be able to boost their assets under management further as they can argue that buying their ETFs is more efficient than buying coins (which are temporarily at a stiff premium and in relatively short supply).

The pessimistic case is that they’re competing against much larger organizations for investor and institutional funds, and they might lose that competition. Particularly in the ETF world, they have had trouble attracting new funds to their mining ETFs or their precious metals ETFs, despite the “twist” they put on the metals ETFs (that they are redeemable for gold for some large investors, which lets them argue that they are not “paper gold” like the much larger ETFs). I don’t know if that’s just a brand and marketing edge that the bigger ETF managers have, or if folks are rationally choosing the lower-fee ETFs over Sprott’s offerings.

And in case you’re curious about how the stock is doing now, here’s the chart for Sprott (in blue) measured against some other gold-related leaders — the Gold Miners ETF (GDX, orange), royalties standard-bearer Franco-Nevada (FNV, red) and gold itself (SPDR Gold Shares GLD, in green).

SII Total Return Level Chart

SII Total Return Level data by YCharts

The leverage is still there to both bull and bear moves in gold, for sure… whether it compounds into something greater in the future as Ferris predicts, or gets beaten or disrupted by other asset managers, I don’t know. I don’t currently own Sprott, but will reiterate that it’s not a crazy idea… I don’t consider it to be dramatically more special than other leveraged gold (and silver) investments, but Ferris clearly does, and maybe he’ll be right. And it does pay a decent dividend while you want to see how it goes (about 3% right now), though the story could also change a bit this week because they’ll report their 2020 annual results on Friday morning.

And yes, I should note, they do also have a little crypto exposure, which Ferris has also touted over the years as a hidden asset. That’s primarily through their effort to “tokenize” gold through several venture-level investments… my expectation is that those won’t go anywhere, a crypto version of gold doesn’t seem to be something the world is clamoring for just yet, but one never knows — they haven’t spent all that much on those Digital Gold strategies to this point, so it’s true that it remains a “potential upside, low downside” part of the business.

So as always it’s your money, your call — if you’ve got thoughts on Sprott, feel free to toss ’em on the pile with a comment below.

P.S. We haven’t heard much from Extreme Value subscribers in recent years, so if you’ve ever subscribed to Extreme Value please click here to share your experience with your fellow investors. Thanks!

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robb321
February 24, 2021 12:14 pm

Hi Travis, I’m new to the site but really enjoying reading all your hard work, Thanks

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Clyde Adams III
Clyde Adams III
February 24, 2021 12:59 pm

Your last 2 daily update emails have had the wrong link.

oldjohn
oldjohn
February 24, 2021 1:11 pm

After several years of trying to play Sprott I now avoid it. Stopped out at least 3 times and only one with a small profit. I’ve found that you usually get the rec when it’s about 50% into a climb that’s followed by a few months of growth and then followed by a plunge. Just look at the chart above and you’ll see what I mean. IMO not a good long term hold. If you’re good at getting in and out without using stops more power to you, but not for me any more.

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Lahalsa
Lahalsa
February 25, 2021 7:10 am
Reply to  oldjohn

I could not have said this better myself! I’m out of SII too and not looking to get back in.

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SamWiebaux
March 3, 2021 5:42 pm
Reply to  Lahalsa

I made a few hundred on SII, but NOWHERE NEAR ENOUGH to pay the $1000 GRAND TIP to the WORST STICK ADVISOR! So I LOST SEVERAL HUNDRED on the deal!

Damn Dan!

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cabaoke
Member
cabaoke
February 24, 2021 1:21 pm

There is another new player in the precious metal royalty game. Empress Royalty Corp EMPYF.
Doing my DD and so far not overly impressed. Always makes me nervous when they make it difficult to find the constituent components of their holdings. Love the Harvest ETF method. Just click holdings.

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outsider
March 2, 2021 11:37 pm
Reply to  cabaoke

solid call as usual cab….. check liacf, allif, reemf (mentioned elsewhere here)

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Carl M Welch
Member
Carl M Welch
February 24, 2021 1:25 pm

Gold itself is not GLD. The game right now appears to be JPM running up Bitcoin, selling at an intermediate high, then buying or trying to buy more physical gold. I think J.P. Morgan said “Gold is money, every thing else is credit.”

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Carl M Welch
Member
Carl M Welch
February 24, 2021 2:24 pm

Any thoughts about JPM manipulation?

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outsider
March 2, 2021 5:52 am
Reply to  Carl M Welch

manipulated plug today for the purpose of drumming up interest

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jts4545
Member
jts4545
March 1, 2021 12:34 am

I agree. IAU has dropped less in price compared with other gold ETFs and stocks. The SII is a “smaller player” compared with other offerings. Best not to put too much into any one gold security. Just enough to stabilize overall portfolio value. SPPP is a platinum and palladium ETF from Sprott that seem to be dropping less in value compared with gold securities. Almost as stable as silver. Worth looking into.

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timcoahran
Irregular
February 24, 2021 5:17 pm
Reply to  Carl M Welch

I like those Old-Timers’ quotes!

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SamWiebaux
March 3, 2021 5:44 pm
Reply to  Carl M Welch

PHYSICAL GOLD IS EASILY STOLEN!

Lost multiples of Buffaloes and Indians from THEFT FROM MY BANK SAFETY DEPOSIT BOX!

NOT SAFE AT ALL!

Corrupt Bank!

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SamWiebaux
February 24, 2021 2:43 pm

SO ONE ( 1 ) QUESTION, TRAVIS!

Am I ADVISED TO SELL THIS LONG TERM TURKEY NOW (finally broke EVEN) minus N/L cost?

Or should I DIE and donate the SPARSE REMAINS at some UNKNOWN TIME back to the future?

WAY OUT OF MY LEAGUE, here!

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gojohnj
Irregular
gojohnj
February 24, 2021 3:03 pm

Years ago he pitched another “If I had to put all my money in one stock.” It was Altius and I bought in for a little over $10 per share. It crashed but I hung on to it for all these years (much like Travis) and it has just recently risen above $10 ($12.58). Not sure I want to wait that long for another one. Thanks again Travis for you insight and analysis.

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SamWiebaux
February 24, 2021 3:13 pm
Reply to  gojohnj

I guess I needed to buy ONE MILLION SHARES(?) To BREAK EVEN ON THE “THOU!” and, of course, the FEW SHARES I COULD AFFORD AFTER MY STUPIDITY!

I BOUGHT THE IDIOTS DREAM (SII) SOBER….. so I can’t even FALL BACK ON THAT EXCUSE!

ConMan_FERRIS I CAN NOW, flounderingly refer to my IDIOCY!

HOPEFULLY “ONE ISN’T BORN EVERY MINUTE!”

RUSTED STEEL, in the form of an old GTO would have provided a more salient return!

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tbone0634
tbone0634
February 24, 2021 4:06 pm

Hi Travis
Speaking of ” Royalties “,are you still bullish on SAND? Seems to be at an attractive price now, and I heard that they were talking about a dividend.
Thanks
Terry

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SamWiebaux
February 24, 2021 4:15 pm
Reply to  tbone0634

May my SAND turn to DIAMONDS!

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PearlGreatPrice
February 24, 2021 6:56 pm
Reply to  tbone0634

SAND is undervalued right now, as is TORXF

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James
Guest
James
February 25, 2021 9:42 am

If I was going to buy a gold stock now, I think one of the better stocks is Kinross Gold. Metrics look much better than most other gold stocks.

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#Kinross Gold K.TO
dinjax
Member
dinjax
February 26, 2021 8:39 am
Reply to  James

KGC is a good choice with a low 6.2 p/e and an ASIC of $987/oz. BTG is another option (I own it), p/e is a little higher at 7.9, but it has a higher GM (53.5% vs. 39%) and pays a 3.5% div vs. 1.8%.
Neither stock has performed well over the last 6 months, but KCG is less bad.

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jayell
Member
jayell
February 24, 2021 5:13 pm

A great article, as always. Thank you! I’m not bullish on precious metals so I’m staying out of this one.

Last edited 3 years ago by jayell
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James
Guest
James
February 27, 2021 5:30 pm
Reply to  jayell

Your right.. be cheaper later.

nmtonyo
February 24, 2021 10:53 pm

Hi Travis, also new to the site this week, and thankful to have found it. You had already sleuthed several teases that were in my inboxes, including JR Butts and this one about Sprott. I considered the picks & shovels arguments, and bought some GLD and PALL instead.

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Javamanjerry
Member
Javamanjerry
February 25, 2021 1:04 am

I’ve had Sprott (SII) for at least 5 years and ditto with GLD. Sprott used to trade with a different cusip symbol. So far, I’m up 93% on Sprott not counting dividends and only about 10% on GLD. GLD pays no dividends, but Sprott has been paying 2 to 3 percent besides the share price increase, so nice capital gains and a pretty decent “savings” account to boot. I probably bought GLD at a bad time years ago. Royal Gold (RLG) is another metals royalty company to look into which I have and like. I tried to get into FNV (Franco Nevada) a few times but always at the wrong time it seems as it appeared too pricey. A little bit of timing (don’t buy high) and an awful lot of patience (give it time) seems to work well. I almost always check the Stock Gumshoe and do a search on a potential new buy or a worrisome current holding and greatly appreciate the wealth of information.

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Shaun
Irregular
February 25, 2021 5:52 am

This makes me feel nostalgic, one of the earlier stock Gumshoe articles that I can remember.
I did buy some when you did and just left it there. Surprisingly it has out performed both my royalty stocks (sandstorm and osisko). Still waiting patiently for the gold bull run though 🙂

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Peter Messmer
Member
Peter Messmer
February 25, 2021 2:00 pm

would not buy sandstorm because of considerable insider selling during last 3 month

charlie1030
Member
February 25, 2021 4:40 pm

I am happy that todays market is now closed. I haven’t had a bad day like this since last March. Anyway, I did make a small investment in SPROTT PHYSICAL GOLD AND SILVER TR (CEF) which has been up and down and still in a profit mode for me. One of my investment services recommended this one in lieu of SII last March as an anticipated better performer.

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Nancy Howitt-Battles
Member
February 25, 2021 5:02 pm

GOT some PHYS shares… Sprott‘s gold based stock! Very reasonably priced at the time last week!
Though not a slave to others’ evaluations; after buying a small amount, <50 shares, and watching it for a few days, I looked the ticker up on Barchart! That was a research check foolishly 3-5 days after purchase! Often look there, had never seen that result for anything (cheap sub-penny or a $45.00 a share price) I had ever seen from a quick look up before!

So!
Surprised by the red inked “88% sell” Barchart “free of price” section’s guidance under “Barchart opinion” It sold easily! Still know little!!
After purchase initially I had felt solid in my choice to get some asset tied to gold…Unsure about the entire thing!
Any others out there?
Marion

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debtfree
Member
debtfree
February 26, 2021 12:55 am

I use stockcharts. 50 and 200 moving averages
Bolinger bands
RSI
MONEY flow index
Slow stochastic
Right now will buy only if under 5 and 5
Will sell if over 70-99
If I like the stock and if the stock is up 10-20-100%, I may sell the number of shares to account for my cost. Then I will let the remaining shares ride. Even if the stock goes to zero I would not have lost any of my original purchase cost.

I will then buy more shares of this winning stock if the slow stochastic goes under 30-20-10. I then have to monitor this new money amount that I am investing.

My initial investment from each account is
1% some risk I see
2% standard
3% more conviction
4% most conviction

I use Louis navallier’s portfolio grader
Will buy A, B rated
Maybe C
Never D and F

I also use TD AMERITRADE stock screener to find low slow scholastics stocks.
I will look to buy based on Peter Lynch’s principles.
I like PE ratio under 15 up to 25
PEG ratio of 1.0 up to 1.5 or less

Awake in Maui

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dinjax
Member
dinjax
February 26, 2021 8:24 am

Thanks Travis for another great analysis.

For anyone thinking about investing in gold due to pending inflation, this article provides a different perspective:
https://tradesmithdaily.com/investing-strategies/inflation-alarmists-are-panicking-far-too-early/

Another popular approach is to track how much gold is required to buy all the stocks in the Dow. By that measure gold is way undervalued:
https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart

I’m betting the latter is true and am staying long gold and silver.

Travis, what’s your opinion?

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3317ponoka
February 26, 2021 12:16 pm

Thanks Travis …it’s nice to get informed that helps us weed out the hype!

coolsoupy
February 27, 2021 10:49 am

I like CEF (Sprott took over) because they actually have a real audit and hold the metal.

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jaytodd04
jaytodd04
February 28, 2021 12:48 am

Ferris has had a very poor track record. I’ve been involved with Stansberry for years. And Ferris has led me wrong for literally years on end. I strongly recommend ignoring such recommendations.

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cyberknight
cyberknight
March 6, 2021 4:19 am
Reply to  jaytodd04

Ditto jaytodd’s comment! Maybe eventually Ferris will be correct on a reco but so far not so much!

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