This article was first published in late February, and was lightly updated in April, the last time the ad ran heavily — and now the ad is circulating again in mid-August, so I’ve made some slight updates again. What follows is mostly unchanged from 2/28. The price of the stock is also again close to where it was in February, right around C$3.00.
Dan Ferris is out with a new teaser pick, and I haven’t seen one from him for quite some time… so let’s check it out. The emails introducing this ad are definitely over the top… this is probably what’s really getting the attention of readers:
“If I had to pick one stock to put every penny of my life savings into… this would be it.
“I’d bet my cash… my retirement savings… all of it… all on this single company.
“If that sounds like promotional bluster to you, you clearly don’t know me. And you’ll miss out on this opportunity completely.
“Because the fact is, I’ve been in this business for nearly 20 years… recommending hundreds of stocks… and this is only the second time I’ve ever felt anywhere near this kind of conviction.”
And more recently:
“Today, I’m sharing the #1 stock recommendation of my career.
“A royalty stock.
“Collecting royalties is one of the most lucrative businesses on earth.
“It’s the definition of what Porter Stansberry calls ‘capital efficiency’—where the profits can scale up big time… but the fixed costs are practically zero.”
The question I got from a bunch of readers when this ad first circulated in mid-February was, “is this Altius again?” And that’s understandable, since Altius Minerals (ALS.TO, ATUSF) has been teased off and on by Ferris for years — but this one appears to be something a bit different.
This caught my eye early on in the ad:
“It’s a royalty business that’s much smaller than Royal Gold, Wheaton Precious Metals or any other firm you’ve ever heard of. Yet, based on my research, its potential market is 6 times bigger, because in addition to gold and silver – it collects royalties on dozens of other resources too.
“There are only a handful of companies on Earth that do anything like this, which is one reason why readers who followed my initial recommendation are up over 100%… even during a bear market in precious metals… and have started collecting a nice annual dividend as well.
“But that’s not the opportunity I’m sharing today.
“The fact is, what I’m about to show you is even better…”
OK, so that’s a reference to Altius… and a confirmation that his new recommendation is different and, he thinks, “something better.” Altius Minerals has been one of my larger holdings for a long time now, and remains my biggest single exposure to commodities, and I did first learn about it because of a Dan Ferris teaser pitch way back in 2009… so I’m intrigued enough to research further. What’s this new idea?
Well, he hints at it a bit during the course of the ad for his Extreme Value newsletter (“on sale” for $1,000, no refunds), so we’ll check out the hints he drops and see what the Thinkolator can find. Here’s what really got Gumshoe readers excited:
“World’s No. 1 Stock When Gold Booms
“In short, the No. 1 stock recommendation of my life is a company that makes millions of dollars every single day from gold, silver, and other precious natural resources.
“I call it ‘the Best Gold Business on Earth.’
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just click here...“As I’ll explain, it’s like getting in on the world’s best royalty companies at the very beginning of their astronomical runs.”
And then we get some clues…
“… it’s not a conventional royalty collector… ”
” it’s not a miner… explorer… producer… or any other type of business you’ve likely heard of, either.”
And hints at some serious safety…
“This is an opportunity where you could triple your money – or more – if nothing goes right.
“You could put on a blindfold before you buy it and then forget you own it for 10 years – never once checking in on the gold market. I’m nearly certain you’d be a lot richer at the end.
“That’s why this is ‘my’ kind of stock… and not some high-risk speculation for gold diehards.”
I love royalties, the notion of collecting cash in perpetuity without doing any more work really appeals to my inner lazy bum… so what kind of royalty is Ferris teasing here?
“This other kind of royalty is different.
“It’s a payout on gold that’s already been mined.
“Tons and tons of gold. And not just once. Or once per year. But permanently… every month… forever….
“If you’ve ever owned some of the most popular gold (or silver) investments in the world… odds are you’ve paid this type of royalty, without even knowing it….
“That’s because the Best Gold Business on Earth collects a fat, steady royalty-type payment not on a mine… or an exploration project… but on a big chunk of the gold market itself.
“They essentially take a cut based on people’s desire to own gold.”
Well that’s intriguing… and it pretty well narrows things down to just a couple of businesses that could match those clues.
And it is, apparently, not terribly complicated… from the ad:
“This has nothing to do with gold futures… price setting… or any kind of reckless financial engineering.
“The Best Gold Business on Earth plays a role that’s not only 100% transparent and ethical… but an important part of a functioning gold market.”
So this is pitched as a “you can’t lose” investment… it doesn’t require gold to go up to make money, but “the upside in this stock pretty much explodes when gold gets going.” That’s pretty irresistible, right? So what is it?
Well, it’s apparently a company that’s growing and did a recent acquisition of some sort:
“The royalty-like core of this business just doubled in size.
“Not gradually, over years, but overnight – in a deal that’s going to make shareholders a ton of money.
“Keep in mind, profit margins on this segment of the business are around 80%.
“Yes, you heard that right. 80%. It’s the kind of money you can only make in ridiculously capital efficient businesses like royalties.”
What else? It pays a dividend…
“I haven’t even mentioned the fact that the Best Gold Business on Earth pays a roughly 4% annual dividend.”
And apparently it has four other businesses aside from this core “royalty” business… per Ferris:
“I haven’t told you that apart from the core, royalty-like business I’ve already told you about… this company also has at least five other resource market businesses – with tremendous upside – that you get thrown in practically for free.
“Every single one of them makes money. And every single one has big upside tied to the potential in gold and silver.”
And those businesses are apparently synergistic….
“when someone becomes a client of one segment of the Best Gold Business on Earth, they’re immediately exposed to all the other, smaller segments, allowing each client more opportunities to growth their wealth with gold and other precious metals… and therefore giving the overall company more opportunities to take a big cut.”
And one more bit of the hyperbole, just so we can look back in a few years and remember how strongly Ferris pitched this one:
“The Best Gold Business on Earth today is the best opportunity I’ve found in my entire career of picking stocks.
“Readers often ask me: ‘Dan, If you had to put everything into one stock, which would it be?’
“Most analysts will never tell you – either because they don’t know… or because they’re not willing to risk their reputation on the chance of being wrong.
“But for me, this is it – the one stock I’d bet everything on….
“The Hands-Down, No. 1 Pick of My Career.”
What other clues pop up in the ad? We’re told that the stock is currently trading close to Dan’s maximum buy price… and that it has a blockchain connection.
And that last bit is, of course, what got a few Gumshoe readers all twitchy when they sent in their questions… we’ve all seen ludicrous blockchain and bitcoin-related stocks go parabolic for no real reason. So what’s the blockchain connection here? More from the ad:
“… this company owns a substantial stake in a blockchain-based gold venture that could create a bigger gain for investors than everything else I’ve talked about today.
It’s a ‘lottery ticket’ that could pay out 100x. And by owning this stock, you get it essentially for free right now.”
OK, so leaving aside the fact that a 100X return for the jackpot winner would be the worst lottery ever, we get the metaphor — this is a “risk a little, maybe get lucky” part of the business.
So what is this crypto stuff? Here are the hints from Extreme Value…
“… the Best Gold Business on Earth has been working on this technology for two years– long before Bitcoin or blockchain became household words in 2017.
“And what they’ve created is the holy grail of cryptocurrencies:
“A fully redeemable, gold-backed crypto token.”
There are a shockingly large number of those in development, so this doesn’t give us our definitive answer, but it’s a good clue.
And he lays it on a bit thick:
“… this company owns a piece of the technology that will make gold into money again… which has been a dream of hard asset investors and critics of fiat currency since Nixon abandoned the gold standard nearly 50 years ago.”
Ferris notes that Bloomberg estimates the total gold trading activity to be $27 billion a day in the over the counter markets (meaning, people buying and selling gold back and forth), and that this company’s crypto initiative could make that far more efficient.
So… what does the Thinkolator tell us? We don’t get many other clues, and the clues we do have are a wee bit squishy… so what might push us over the edge in getting some certainty about an answer?
Well, he clarifies that this royalty is not collected from mines, but from investors. So that’s a good little confirmation of one of our suspicions…
“And this business isn’t a crazy speculation on finding gold in the middle of nowhere. It just keeps collecting its royalty on the gold market, from millions of investors all over the world… every month… forever.”
And he hints about one of the key people involved in this company:
“This business is run by from one of the most successful and wealthiest resource investors in American history… and I talk to him regularly.
“I can’t tell you his name, to protect his privacy.
“But even if you know next to nothing about gold… royalties… or the resource markets… there’s a chance you’d recognize him.
“I’ll call him ‘Mr. X.’ He’s run a series of investment partnerships in the private markets – the equivalent of small hedge funds focused exclusively on exploiting resource booms.
“One of those hedge funds would have compounded your wealth at 55% a year, after fees.”
And that will have to be enough… so we feed all that into the Mighty, Mighty Thinkolator, let it chew for a few minutes, and sit patiently. After a few moments, it spits out our answer: this must be the Canadian asset management firm Sprott, Inc. (SII in Toronto, SPOXF OTC in the US), and those “royalty-like” revenue streams are “fees on precious metals investments,” particularly ETFs.
Sprott for a while became a pretty diversified asset management company, offering up lots of mutual funds for Canadian customers, but of late it has been returning to its roots in the natural resources sector, selling off their “diversified” Canadian accounts and assets and refocusing on being both an ‘alternative’ asset manager and an investment banker/merchant bank for natural resources companies. Here’s how they describe themselves:
“Sprott is an alternative asset manager and a global leader in precious metal and real asset investments. Through its subsidiaries in Canada, the US and Asia, the Corporation is dedicated to providing investors with best-in-class investment strategies that include Exchange Listed Products, Alternative Asset Management and Private Resource Investments. The Corporation also operates Merchant Banking and Brokerage businesses in both Canada and the US. Sprott is based in Toronto with offices in New York, Carlsbad and Vancouver.”
And yes, Sprott does indeed run several precious metals ETFs, and they recently enlarged that exchange-traded precious metals portfolio pretty substantially when Sprott acquired the Central Fund of Canada, the longstanding closed-end fund that has been a way for investors to own gold and silver through an exchange-traded vehicle for decades — so that must be the “doubling of the royalty business” that Ferris hints at.
And it does boast the presence of both legendary resource investor Eric Sprott and Rick Rule, and I assume Rule is the “Mr. X” referred to by Ferris (those investment partnerships referred to were his Exploration Capital partnerships started over the years by his Global Resource Investments, which was bought by Sprott, bringing Rule in to run Sprott’s US asset management business, in 2011 — that Global Resource Investments business is why Sprott lists a major location in Carlsbad, CA, Rick Rule’s home base).
And yes, to cross our “t’s” on the clues, Sprott is indirectly involved in bringing blockchain to the gold markets — though they’re in an extremely crowded field with that one. Their investment is in Tradewind Markets, which is a well-funded and well-covered effort to use blockchain to increase liquidity and speed and trust in gold trading. I don’t think they were the first to think about using blockchain for gold trading and authentication, or “backing” a cryptocurrency with gold, and there are certainly a dozen or more relatively high profile cryptocurrencies today that are trying to do just that… but it has been around for close to two years now, and it seems to be taken pretty seriously.
What else matches? They do also pay a roughly 4% dividend, so that’s lovely.
Sprott has been coming out of the doldrums recently, perhaps partly because of this Central Fund of Canada deal. The stock hit new 3-year highs in the spring after a really weak three years, though the faltering gold price has brought it back down.
Will it be the best gold stock ever? I have no idea — they have been getting more focused on the natural resources business, aiming to be the Goldman Sachs of junior miners, so if that sector takes off again they should be quite levered to rising gold prices or rising “animal spirits” in the exploration business… and it’s true that as an investment banker and asset manager they are fee earners as opposed to mining and resources operators, so that cuts down on the downside risk much like royalty companies are lower-risk than mine builders.
What’s the story with the company if we ignore the Ferris prognostications? A quick spin through the financials tells us that Sprott does not have any long-term debt, so that also helps to limit downside risk, and their income statement has shown steady improvement over the past year or so… perhaps partly because of those asset sales as they’ve gotten rid of the diversified parts of the business.
They trade at about 2X book value, which is perhaps on the high side for an investment banking/asset management group, but not crazy high, particularly for a small company that you think might have growth potential (Sprott’s market cap is only about $600 million). It would take more time and not present a terribly clear picture to compare them to much larger companies like Blackrock (BLK) or Brookfield Asset Management (BAM) or to other “boutique” asset managers like Affiliated Managers Group (AMG) or the various small investment firms in the natural resources space.
And, well, that’s about all I can tell you on this sunny Monday morning — Ferris is very likely teasing Sprott, and my first pass through on their information indicates that it’s an interesting asset management company that is in the midst of some significant change. I wouldn’t put much hope in the blockchain-related investment or in the chance of making 20X returns on the stock anytime soon, but it’s at least a decent company that is becoming more focused on what it’s good at — and that is probably a good thing. If we get another natural resources bull market, or particularly some huge surges in gold and silver prices, then the stock could do extremely well in pretty short order like it did in 2010 and 2011 — if not, then Sprott’s stock chart will likely look a bit more muted.
In the most recent quarter their performance dropped a bit, mostly because of lower assets under management in the exchange traded products (which make up roughly 80% of the business) — particularly the Physical Trusts (their funds that are backed directly by gold or silver). That’s the primary driver of fees — if there’s more interest from investors in buying more shares of exchange-traded gold, then those funds get larger and the fees grow… if there’s less interest, the funds shrink and the fees are smaller.
They do other things, too, like lending to resource companies and running other investment funds and limited partnerships, but the exchange-traded fees are likely to be the big driver, and the steadiest part of the business, if you’re looking for future growth. The dividend is still roughly 4%, but as of the last quarter the dividend wasn’t covered by earnings — they do still have plenty of cash to cover that dividend if they wish to, but it would be more comfortable if they could pay the dividend out of after-tax earnings and still have a little cushion… which, like most of the rest of the business, probably depends more on gold and silver prices than anything else. And gold, as you’ve probably noticed, is having a bad summer — the price is down another 5% just since the end of the second quarter (silver, as is typical, is moving more sharply — down about 9% since the end of June).
So with that, dear friends, I’ll leave you to your own research and cogitation — do you see a rosy picture for Sprott as it collects fees on gold and silver ETFs and funds natural resources companies? Think it will surge higher, or remain in the doldrums for longer? Excited about that 4% dividend or their recent restructuring and increased focus on the ETF business? Let us know with a comment below.
Disclosure: I own shares of Altius Minerals. I am not invested in any of the other companies mentioned above, and will not trade in any covered stock for at least three days per Stock Gumshoe’s trading rules.
central fund of canada not centra
That Stansberry conglomerate has been propping up Sprott products for decades now. They’ve got to have a deal where Stansberry gets paid to pitch a different Sprott fund to all its subscribers every couple years or so. I’ve never seen it work out for the subscribers though.
Yes, my first thought was “oh no, not Sprott!” Lost money every time Stansberry trotted it out.
Dan Ferris should rename himself and be called : Charles Ponzi.
he had an insider service and it was terrible. there was a money back guarantee. i made no money with this service and never received a refund. he lied and cheated me.
Back in 2010-11, the Stansberry Newsletter Peddling Machine was constantly predicting that the dollar was toast. Also I remember them saying Bank Of America was going back into the $40’s soon as rates fell (it was below $10 I think at the time). I was a subscriber to the Stansberry Letter. Well, the dollar still hasn’t crashed to zero and BAC has still not hit $40 7-8 years later. I still believe these people make the majority of their money selling overpriced newsletters that only a few are lucky enough to make money with. It is amazing how all these snake oil salesmen have a new stock or investment that’s going to make all who buy wildly rich. Every week there is something new to buy. Unless you already have a few hundred grand to play with, I think the old 80-20 result applies. 80% will lose and maybe 20% will win, just like in the real stock markets.
Sorry mate but the Stansberry letter for ca $ 200 is very good. I’m making good money with RL, GRUB, NYT since I subscribed.
Gotta agree, Fabian.
Yeah, the Stansberry Newsletter Peddling Machine. That really describes it. I subscribed to their ‘Flex Alliance’ many years back, so I can have any 5 of their newsletters for the flat fee I paid back then, and can change them at will. I get about 10 mailings per day, 80% go to trash right away, and I recognize their teasers by just looking at them despite their infinitely creative efforts to get me hooked in or up sell me to some ‘Big time Alliance’ or ‘Atlas Club’. When I mistakenly open a link, and it’s got that trademark blue bar across the top, it instantly is transferred to garbage. Once in a while they even send me a Fedex envelope, containing a black gold embossed envelope with ‘a special invitation’, and I don’t even open it, it goes into my ‘dark matter recycling bin’ right away. They basically drove me pretty nuts over the years. Two guys, one saying that we are in a ‘Melt Up’, the other one that the Crash is just around the corner, and depending on what happens you get a ‘told you so’, and that since years, and each with their convincing arguments. Some of their services are pretty good, like ‘Retirement Trader’, ‘Daily Wealth Trader’,’True Wealth China Opportunities’, where I had a few 100%ers plus, some are utter garbage. ‘Stansberry’s Big Trade’ lost me 100% on all the recommended puts, as in ‘Ford going to zero’.. Their worst advice ever was to urgently recommend on multiple occasions to get out of AMZN at around $ 328 (my exit), because ‘they did not have a real, valid business model, were not making profit etc.’ Well, back to you, Stansberry, with greetings from the richest man on Earth, Jeff Bezos, and AMZN at $ 1,530 !
I have found the most accurate and precise information at Market Club or INO.com or IBD [Investors Business Daily] it is only $52 a year! Only 1 buck a week for better information than any newsletter in America or Canada!
Porter Stansberry has made money for me. I regret the times I didn’t listen to him (buying Fannie and Freddie as an example.) I do think he’s completely wrong with the stocks he recommends in “American Jubilee” though. Except for Hershy’s. Umm, chocolate.
Hi @divaI
I almost bit on buying American Jubilee,
could you please share his stock recs (what Porter believes IS safe to invest in when market crashes),
why you disagree and
what you like about Hershy’s prospects? is it that when people get depressed they gravitate toward stuffing themselves with chocolate lol???
is there a Thinkolator on American Jubilee in the works Travis?
thanks very much!
Have concluded that all the “Boys of Baltimore”, Stansberry included, are a rather incestuous lot of con artists…. and they have cost me a lot of money over the years!
If everything is going to come to pass and GOLD reaches the dizzy heights forecast then buying Sprott could be a good investment.
I already have a gold royalty company and it is doing well.
Travis, you reviewed The Rick Rule Alliance by Money Map Press approx. late May 2017. I joined Rick Rule Alliance then, and invested small $1-2k in all 7 original recommendations, sold 3 and still hold 4; but I will not be renewing my RRA subscription – have to wait years for returns. RRA has recently been suggesting junior gold miners.
Sprott Inc. SPOXF OTC may be worthwhile in small $$ for now. I like the 4% dividends. Thank you Travis for your most excellent Thinkolator.
rule pitching juniors? and just a little while ago he said “avoid the penny dreadfuls”
yes, in last 5 weeks RRA’s Matt Warder recommending 3 junior gold miners, 2 junior uranium miners, and 2 energy comp’s. BTW, I have sold 3 more of the original 7 RRA recommendations, now holding only SAND. I definitely did not make back my $3,000 annual fee therefore again will not be renewing my RRA subscription. Learned my lesson, do not subscribe to expensive newsletters hype.
You are correct. It is Sprott that he is promoting in this letter.
Ferris said he had to sell the stock to be able to recommend it!
Thank you for that…as it will save me the $1000 newsletter fee. But are you a member of that newsletter, so you are 100% certain it is the correct stock? I would like to purchase the stock, but want to be certain that Sprott is the one Dan Ferris is saying is the best pick of his career. If you are a member, then you will know. I just want to know that it’s correct.
IT’S THE CORRECT STOCK.
Thank you for the quick response to this teaser!
I own a substantial amount of CEF bought over the past 5 years. Since Sprott bought them I ‘m still not sure how this changed the profile and security aspects of the original CEF. Does anyone have information as to how Sprott intends to run CEF going forward? The original CEF was stable and did not loan, encumber, or do any of the stupid stuff like GLD does; they just held gold & silver in a vault. Has that changed?
I believe that CEF under Sprott has made your stock redeemable in gold at the shareholders option.
Hi Peter, I also find myself under the Sprott umbrella due to a long term holding in CEF which I thought was deep value waiting for the Gold price to spike when the major correction finally arrives.
I don’t quite understand what your reply to exotichunter means. Could you clarify? Do my CEF shares turn into Sprott Inc shares or are the holdings simply absorbed into the Sprott Physical Gold and Silver Trust which my online broker still has the CEF ticker?
Thanks
I don’t know about any of you, but I bought one of sprott’s funds, Canadian Dynamic Growth ten years ago and it is now down 80%. I know – I should have sold a long time go, but it just goes to show you that these guys don’t know any more about the market than you or I. I would stay away from anything bearing the name.
Here’s the one sentence from Dan Ferris’s ad that truly baffles me: “We’re told that the stock is currently trading close to Dan’s maximum buy price.” How can it be trading close to his maximum buy price when he says that it has the potential to go up 100 times?
The short answer is that Ferris is a deep value guy. Even if he believes something csn become a multibagger, he will not buy it above his view of the right price. He is very patient and does not buy many stocks per year.
I have a Stansberry subscription and I have made good money on their recommendations. They send out WAY too many emails, but overall their recommendations are very strong and they back it up with research.
Join the discussiI have also had good luck wih them. Doc Eifrig, Steve Sjuggerud, and Stansberry all have good info and I am making money with them.
I agree with the above….but I took out the ‘Golden Triangle’ letter lately and am experiencing some real losers. Regret that decision so far and there is no refund.
I completely agree. Like the big short, it’s another case of what seems like a great idea but it’s especially untested and most importantly untimed. In other words, it may eventually work but who wants to wait years to recover from the drop it takes right after it’s recommended?
Sounds like another case of “make lots of predictions and some will inevitably come true”. Then they can point to those that actually gained.
Think I’ll hold off and wait for his No. 2 Pick.
Let’s not forget the Sprott run Speott Resources that had a touted farm operation in Canada plus other resource investments-was atrongly recommended by the same sources & has been an unmitigated disaster
Something like my Canadian Growth Fund!
Not for Sprott… Sprott still got its fees (Sprott Resources and several similar entireties were somewhat like listed hedge funds, at least when it comes to the management fees).
I sympathize with the sentiment, I’ve both lost and made money with Sprott-managed investments in the past… all asset managers have some bad performance, but they still collect their fee. Makes asset managers an appealing investment class as long as they can avoid tailspins where poor performance causes people to take money out of their funds in a hurry…. which in the case of a natural resources specialist could come at any time if there’s a crash in their sector (just as a boom can happen when there’s a huge bull run in their sector).
Gold and commodities have been falling with the Fed threat of raised interest rates.
Yes, in the short term they essentially mirror the moves in the dollar much of the time.
Travis, are you still holding your SAND. I was ill a lot this past year and didn’t watch my portfolio. I’m down about 30%. Hurts when you are OLD.
Yes, I’ve bought more this year. Whether it works out depends on whether or not gold rises, but I do still want gold in my portfolio and I think Franco-Nevada and Sandstorm are the best way to get that gold exposure — FNV is safer but much more richly valued, SAND is riskier but cheaper and has more growth potential.
I gave up believing ANYTHING that Porter Stansberry says. In September/ October of 2001, he was touting ENRON as ” The only stock that you’ll ever need to buy”. It fell from about 90 bucks to zero within about two months !!!
I don’t think I’ve ever heard that accusation (that Stansberry picked Enron mid-collapse, right before the SEC opened an inquiry in late October, 2001). That was several years before the birth of Stock Gumshoe, though — do you have a copy of that recommendation or article?
About eight years ago, I purchased $5000 of Sprott’s PHYS (gold CEF) and $5000 of Sprott’s PSLV (silver CEF). The value of both funds promptly dropped and stayed low until very recently, when they began to regain value, PHYS more so than PSLV.
I have often regretted this purchase, but held on, hoping that they would at least return to their original value. During a complimentary portfolio review at Schwab, I was urged to cut my losses and sell, but I refused to do so. About a year ago, Rick Rule made a statement that “those who held on would do well.” While I certainly hope so, there is no way I would sink more money into another Sprott venture.
Amen, Janice!
Pretty much the same here except I went in twice as deep as you in PHYS & PSLV and then added in their general resource fund and junior gold miners fund just for good measure…OMG…I’m not sure how a guy with such a shining personal investment record can be off that far with “his” funds but all I can say is Ol’ Rick had better be right about holding on!
I own 10 shares each in PHYS (which follows physical gold) and SGDJ (which follows junior gold miners) but I use them only as “indicators” to hint at which direction those categories are heading. I have obviously never made real money on them but never lost much either since my investment in both is only a few hundred $$. I found that miner ETFs have never done much for me, probably because they invest in too many dogs along with the winners or maybe because my timing was wrong. Better to do a lot of DD and pick and choose PM stocks. Some are slow but steady and profitable growers. Except in a gold price boom these have to be evaluated strictly on fundamentals, same as any other stock. My best sources have been several good blogs on Seeking Alpha. By comparing their favorites you can get a handle on which ones get the most votes and you get detailed analyses as well.
But buying the whole Sprott enchilada (SPOXF) could be a lot more profitable than their individual ETFs because it is so diversified.
Some of the independent streamer/royalty ETFs also seem to do well in both up and down markets although when one makes a big doodoo it can suffer for a while, but eventually starts upward again because (except in a complete gold price bear) they inherently have low downside risk. Lately SAND has been steadily improving since they gave up their royalty and instead actually acquired a big chunk of a high-grade Turkish mine (Hot Maden), the other part of which is owned by some of Erdogan’s relatives (always helps when the dictator has his fingers in the pie, which often happens in other countries, but of course never here in the U.S.).
There are a lot of financial research hucksters out there, many of them stationed in Baltimore. Are they all conspiring to pick our pockets? Cryptocurrencies??? Really? they’ve all supplied us with “Experts” to maybe do just that. Cryptos with gold backing might make some sense as opposed to creating something out of thin air.
I’ve taken out subscriptions with a good many of those research firms over the years and have to say that the Stansberry people are the smartest I’ve found in all that time. I’ve doubled my money a number of times leaving stuff that didn’t make sense
or that I just didn’t understand go and only picking what appeared to be win/wins relying on their information. Sprott, with a 4% return and Rick Rule, seems to me to be a bit of a win/win situation, what with Stansberry’s positive recommendation. I now own it for the yield and possible long-tern returns. Ten years? Fine with me.
I like Rick Rule and have learned a ton about commodities and junior mining stock investing by following him and opening an account at his Global Resource brokerage. I also subscribe to Casey Research and Stansberry Research who are all connected and very friendly with the Sprott/Rick Rule organizations. I have learned the hard way to smell hype and stock promotion versus good investing advise.
I apply the investing rules that I learn from the people I follow like Rick Rule and Doug Casey, and then I pick the stocks that I like that fit the criteria. Rick typically gives himself at least a 3 year hold window on his investments, if not 5 plus years. He buys out of favor sectors and then has the patience to wait until the market loves them again, and by so doing has made himself millions and millions of dollars. It works if you have the capital, patience and are willing to stay informed about the sectors you are investing in, and the guts to buy when things look bleak, like buying the PM sector now.
As far as Stansberry goes, his flagship letter has some good ideas, Dan Ferris has had some great calls, but I think Steve Sjugerruud is the best analyst he has in terms of research, ideas, market timing, and cutting losses if things go sideways. Steve is legit. Nobody gets everything right, and Porter Stansberry admits that he sends out a lot of fluff and hype to sell his newsletters, but he also gives good investing advise if you have the patience to wade through the stream of marketing spam 🙂
I think buying Sprott Inc around these levels will turn out to be a solid investment with some great upside potential, but it will depend on the commodities bull market really taking off, so if you don’t believe in that or have the patience to wait for it to happen, and we are talking years here, then it may not be for you.
#RrckRule video > 5 stocks 5 years later shared by #HendrixNuzzlez, TY:
https://www.stockgumshoe.com/2017/09/microblog-gold-silver-copper-and-hard-assetsfall-2017/comment-page-9/#comment-4975776 #Best2ALL!
I’ve followed Stansberry newsletters for years (can’t stand their constant stream of teaser spam either) and had some success when I did my own due diligence first. Sjuggerud seems to have always had a good handle on market direction but his timing is often early (better than late). Eifrig is always an interesting read.
But I always snicker when Porter Stansberry still brags mightily about his call to sell General Growth Properties (sometime around 2008) because of impending bankruptcy. Being unaware of his hype I naively bought 100 shares of GGP at 61 cents (it had dropped from about $60) when I found out that Bill Ackman was scarfing it up at 46 cents. I kept accumulating GGP as Ackman & friends took it into chapter 11, bought up the bonds, and had the mortgages extended. The company was never in real danger of collapsing as they were making $2 billion/year profit but the fear was that lenders would foreclose on their malls because refinancing was impossible then and the feds were too busy bailing out GM and AIG. Then when GGP exited Ch.11 several years later the stock was back at $15, but the real icing on the cake was the Ackman-inspired 10% spinoff of all the Howard Hughes real estate holdings which were still carried at years-old valuations. I ended up with a chunk of virtually free HHC stock which just recently hit $140.
What’s so ridiculous is that Stansberry’s copywriters still tout his sell recommendation as one of his greatest triumphs. Makes me think nobody bothers to find out what happens to their recommendations long term.
I have held CEF for about 10 years and saw it as a much better alternative than GLD that leases out the gold (I have heard). When CEF became part of Sprott I was not really sure what had happened to my CEF shares – were they transferred with nothing changed or was there a change I was not aware of. In November 2017 as I was researching at Schwab, I came across SPOXF. It was less than CEF and paid a nice dividend. I purchased 1,100 shares on 11/19 for $1.71 per share. I finally called Sprott on Jan 30/18 an asked my question and got an answer – no change. I then told the representative that I owned the SPOXF and he was horrified and said where did you get that ticker symbol? SPOXF is a derivative! You don’t want to be in that! Not being a fan of derivatives, I sold it the next day at $2.39. In the two months that I held SPOXF it gained 68cents and paid a $26 dividend. Now I am wondering if I should have kept it.
someone help a poor hillbilly from ky,, what in the hell should I do, buy spoxf or not?? as far as stansberry the 2 stocks i own out of 20 that are up the most are 2 that they recommended,, npsny and tcehy,,