Doug Casey’s “Fortunes in the New World”

by Travis Johnson, Stock Gumshoe | February 6, 2012 1:39 pm

"Exciting Speculations" and a "Gold Program You've Never Heard Of" teased by Casey Research

There’s been a big push on in recent days for subscriptions to some of Doug Casey[1]’s newsletters, with the ad that I’ve been most recently asked about being for a “combo deal” that gets you subscriptions to Casey International Speculator[2] and their flagship Casey Report[3] (for a “discount” price, naturally, though it renews at a higher price — $695 this year, $1,028 next year).

The pitch is a long one, as they so often are, and much of it is about Doug Casey[4] being a man of extraordinary ability to forecast the future — using his broad and deep connections around the world to make a fortune for himself by speculating in places where others fear (or are too lazy) to tread. Prescience is claimed for many of the big market moves of recent decades, as well as for other events like the 9/11 attacks, though mostly the vision Casey seems to have been given is of the multi-year trend kind of prescience (ie, “this is bound to happen as the debt crisis unfolds,” not “this stock will double in six weeks.”) His famous book, Crisis Investing[5], is credited with foreseeing the debt-caused depression that many argue we’re in now (or just exiting, or about to really enter — it all depends on your definition), but that book came out in 1978 or 1979, when we were in a very different kind of recession — I haven’t read the book, but I think he predicted that this “greater depression” would hit in the 1990s. He definitely has some interesting insights, and is, beyond just being libertarian like many investment newsletter guys, a pretty extreme and thoughtful anarchist far out of the mainstream on lots of big picture stuff, so I enjoy reading occasional articles and interviews with his views.

As to whether he’s going to make you rich with the ideas he shares in his newsletters … well, I’ll leave that to you to decide (you can see a few subscriber reviews of his International Speculator off to the right side of this page, and there are some reviews of The Casey Report from our readers here[6]).

But since the latest ad for his newsletters teased a few investment ideas, I thought I could at least try to ID these for you — you’re being sold a special report called “Fortunes in the New World,” which apparently includes some investing strategies and picks … and we get clues about a few of them. Here’s one:

“Recently, for example, Doug’s team traveled to one of the most obscure countries on earth… a former British colony notorious for holding large, elephant–sized gold[7] deposits, similar to those found in Africa[8]. The difference is, unlike most of Africa, this small country of 750,000 inhabitants is pro–mining, pro–business and their GDP per capita has risen by more than 50% since 2001. The current government has also lifted barrier on foreign activity and investment and this has helped the economy return to growth.

“The irony us, this country is probably one of the last places on earth investors think about when it comes to gold. Most people have never even heard of it, let alone know where it’s located. In fact, since the early 1990s when the government opened the country to foreign investment, no less than ten mining companies starting exploring the country. And not much has changed over the years. In fact, today there are around 20 companies exploring for gold there, most of which are small and medium–scale miners that few investors know about.

“However, during their recent expedition to this region Doug’s team found two very exciting speculations… One involves a company sitting on a world class discovery that has been outlined as having 6.9 million ounces of gold, as of September 2011. The other is developing an 8.4 million ounce gold–copper[9] project.

“In the past few decades, these are exactly the kinds of speculative gold plays that have helped Doug’s readers amass fortunes….”

We toss that into the ol’ Thinkolator, and we get a high probability of accuracy when we tell you that this country is Guyana, the former British colony on the Caribbean coast of South America, inbetween Suriname and Venezuela. And yes, I suppose that most Americans probably haven’t spared many thoughts for Guyana since the horrific mass suicide at Jonestown, though that’s largely because it’s very small and is mostly a poor, sugar[10]-exporting country. But yes, there is a fair amount of gold, and a bit of a flare-up in recent years of gold-related violence[11] as discoveries have been made across the country and new explorers have spread out to line up appealing prospects.

So which ones are being teased here? The likely answers are that the 6.9 millon ounces of gold (as of September 2011) is Guyana Goldfields and their Aurora Gold Project (roughly 5.7 million measured and indicated, another 1.2 million inferred), and the 8.4 million ounce one is the Toroparu Gold-Copper Project owned by Sandspring Resources.

I know nothing about either of these companies, and I try to always make quite clear my lack of ability to evaluate mining projects and companies — so I’ll just tell you that if you’re interested in researching these further here’s some more basic info:

Guyana Goldfields is at ticker GUY in Canada[12], GUYFF on the pink sheets. This is an established company and has substantial analyst coverage and a good-size market cap for a junior at over $600 million, they think they’ll have a “project decision” to go ahead with their first mine sometime very soon (this quarter) and could start production in just over two years, they appear to already have a mining license but I have no idea whether there are other hoops to jump through, and they are still drilling and defining/expanding the resource. Their latest presentation is here[13].

Sandspring Resources is at SSP in Canada, SSPXF on the pink sheets. They are much, much smaller (around $120 million market cap). Their latest update is a press release detailing their prospective production and their preliminary economic assessment[14] for the Toroparu project, which must have been anticipated because the stock didn’t move much on that news (and, in fact, has been gradually declining over the last year). They think they can be producing from an open pit mine in 2015, though from my quick glance they seem quite a ways behind Guyana Goldfields on the development timeline.

So there’s the basic spit-out of some Thinkolation … wiser minds than mine will have to tell you whether Sandspring Resources or Guyana Goldfields will be portfolio-makers for investors in the coming years, but we can at least tell you that these look like the “exciting speculations” teased by Doug’s team. If you’ve got an opinion to share on these guys, feel free to let it loose with a comment below.

P.S. We’re also teased about a “gold program” — here’s a quickie:

“The Gold Program I Guarantee You’ve Never Heard of…

“Unfortunately, most people simply can’t afford to pull tens of thousands of dollars out of their account and buy a few gold bullion bars. They just don’t have the savings for it.

“Doug and his team, however, have recently found a unique program that allows you to begin accumulating real gold and silver[15] with as little as just $100, and to store your gold and silver in secure vaults in Zurich, London, or New York. This way you don’t have to worry about theft, fire, or any of the other risk associated with self–storage.”

There are plenty of organizations that do this kind of gold storage and broking for you, but the big ones that seem easiest to use for small hoarders are BullionVault and GoldMoney[16] — I think Casey is more closely associated with GoldMoney, since I know he’s had interviews with James Turk, the founder, but if you’re talking specifically London, Zurich and NY for vault storage that’s actually a match for BullionVault (GoldMoney uses locations in London, Zurich and Hong Kong). Both do very similar things and have varying fees and commissions and spreads, but you basically wire money to an account with them and then use it to buy stored and allocated precious metals at lower premiums than you’d pay to buy coins[17] or bars and store them yourself.

I can’t vouch for either or promise that there isn’t some third “guaranteed to be obscure” option that Casey might be pitching — Peter Schiff[18] has also touted GoldMoney in the past and both have been around for a while and seem pretty clear and reasonable in their offerings (they don’t seem to be getting into the same kind of stuff that got e-gold into trouble[19], for example). I’ve tried experimental accounts at both and don’t have any money with either at the moment, it’s a fairly straightforward process and I don’t think they have even a $100 minimum (though most such firms require wired funds, which some banks charge a lot for, so smaller amounts might be silly). You can read plenty about them on their own sites, of course — you’ll be unsurprised to hear that both claim to be the best, lowest priced, and most secure … though of course, if western civilization crumbles this week and you have to come up with some gold to pay for your Netflix subscription (they’ll still be around, right?), Zurich is a bit of a drive and I don’t imagine they want you knocking on the door. They’re at goldmoney.com[20] and bullionvault.com, in case you couldn’t figure that out.

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