This may turn out to be the most important report we have ever written, for reasons outlined below that we believe have real merit and tremendous upside potential. For more than 30 years our record has been exemplary and some believe has been second to none in the accuracy and consistency of our calls on Wall St. Some may be surprised as to how MODAR achieves such stunning results almost daily now. Simply put it is the rigid application of years of experience and discipline in our never-ending pursuit of excellence and perfection.
Ben Bernanke Day Boosts Wall St
If as in the movie "Wall St" - The famous quotation: "Blue Horseshoe loves Anacott Steel" was taken to mean Blue Horseshoe as a whisper code name for "Wall Street" - Perhaps the secret that lies behind this stealth bull market on Walls St, could well be that Blue Horseshoe is starting to love Fed Chairman Ben Bernanke, or is at least beginning to embrace him as a Fed Chairman like never before... Friday Sep 1 was even nominated "Ben Bernanke Day" in his own home town and Wall Street came to the party, putting on an impressive enough pre-Labor Day rally that culminated in the S&P 100 registering new near 5 year highs yet again, indicating the state of the "upper-belly" of the US Economy as represented by the OEX index is strong. And, not that far behind the behemoths of US industry as represented by the Dow Jones Industrial Average are again just a stone''s throw from setting all time record highs. And so what does this really mean? It means that the market''s expectations for the future of the US Economy is waxing optimistic, at least for now... And, even though we threw a little cold water on things at the beginning of Friday based upon some of MODAR''s "AMR" "Advanced Market Reconnaissance" or its "ultra-sensitive" "CITC" Canary In The Coalmine "MVI" Market Vane Indicators: Early signs of stock reversals are already starting to appear, especially in the Nasdaq, as evidenced by a relatively weaker close in this index late Friday along with some international indices that may have peaked, at least in the short term. The acid test next week will be how the Asian and European Bourses perform Monday ahead of Tuesday''s return.
An Economic Dream Team in the Making
Wall Street is all about confidence in the economy and the system at large, and it comes as no surprise that just as Wall Street expressed tremendous confidence in former Treasury Secretary Robert Rubin back in the gogo Nineties during whose tenure the market soared to new all time record highs virtually continuously: More or less, ever since New Treasury Secretary and former Wall St legend Hank Paulson was sworn in, after a few steps and a stumble, markets have been rising around the World in unison. Add to that perhaps a most dynamic new SEC Chairman plus a very capable White House Economic Unit and we have the makings for an economic dream team without precedent. The important point being, this team has the ability to not only steer the US toward Manifest Destiny, but it can deal with problems as well.
New Highs Deserve Respect and Recognition
Notice we mentioned under the leadership of Treasury Secretary Rubin, markets were setting new all time record highs every day, cannot be underestimated for what it means in terms of importance to the economy, investors and investment markets. It is the ultimate barometer of the health of the US Economy and Investment markets not only here, but also a trickledown effect tends to boost confidence Worldwide.
And that''s been happening quite markedly over the past few weeks wherein numerous markets have been following the US''s lead in a Worldwide recovery from their in some cases significant corrections experienced earlier this year and in spite of interest rate hikes, World growth continues at a near record pace with perhaps just enough rollback from overheating, wherein reasonable growth can continue ahead.
In other words, with the revised upward strength in the US economy, we could carry just enough momentum to avoid the hard landing that many expect and as we''ve said before, Ben Bernanke may have engineered the most successful mid-decade slowdown in all of US history.
A New Bull Market Powered By Technological Innovation
If our theory is correct and over the next six months or so, a new bull market of monumental proportions were to unfold, then in all likelihood US markets will resume setting new all time record highs in the years ahead just as easily and relentlessly as they did 50 or 100 years ago.
Since we''re in very similar economic phases in relation to those times past, our destiny for sure should see us get our fair share of records.
After all, this is the 21st Century and we are experiencing by far the most dynamic economic conditions ever, combined with a generational and transformational change of awe-inspiring technological implications, that is absolutely without precedent and makes anything previous tend to pale in comparison. Just as the Model T was the next big thing during the Industrial Revolution of a Century ago, having been unable to radically alter the basic automotive power-plant that has endured for 100 years until now, slowly but surely, the powerplants of the future are beginning to burst forth in the form of Hydrogen Fuel Cells and awesomely efficient new battery and electric powered vehicles. This is a landmark development that''ll usher in profound change in the future. And, just as war inspires technological breakthroughs, this new energy crisis has given the phrase: ''Necessity is the mother of invention'' a whole new meaning because there is no energy after the world runs out.
Companies Currently Attracting Attention
Perhaps the most perfect example of late is how Hewlett-Packard Co has brilliantly consolidated its acquisitions and re-invigorated itself thru an innovative campaign of leveraging its visibility and awareness for its highly appealing and almost-must-have product lines, by jointly promoting thru many mass-market retail chains featuring HP''s more competitively priced products than ever, catching Dell a little flat-footed.
We have already highlighted the transformational change at GM in detail and it is interesting how GM was able to actually report a 3.9% increase in sales with hardly any advertising this year compared to last year''s giveaways that basically led it into financial difficulties versus DaimlerChrysler''s aggressive Dr Z ad campaign of the past few months, that thus far has failed to deliver for them and Ford''s dismal 11.6% drop that tends to highlight the problems of that company also... But, we are not writing off Ford by long shot in fact we''re impressed by the recent out-of-the-box thinking and revolutionary innovation by Ford in the unveiling of their two latest concept vehicles: The F 250 Triflex can run on Hydrogen, Ethanol or Gasoline and the incredibly appealing Reflex Advanced Diesel Hybrid that can achieve 65 Miles per Gallon...
Ford F-250 Super Chief
Defining characteristics: Chiseled-billet styling; glass roof; V-10 engine capable of running on hydrogen, E85 ethanol or gasoline
The diesel-electric hybrid Ford Reflex concept combines performance and economy, delivering 65 mpg and showcases exposed low-voltage circuitry on the roof glass and rear hatch. The vehicle''s low-voltage circuitry is exposed beneath the glass roof and rear hatch, giving a clever nod to accessible technology as a fashion statement. The roof also features self-powered solar fans that cool the car when parked.
Other companies that tend to attract attention usually do so because of unexpectedly strong market performances just as in the case of GM which recently became the leading Dow Component company of the year, maybe for the first time in this new generation, with recent gains of up to 50% plus and as we''ve mentioned before, Investment Intelligence called the lows on GM at under 20 with at the time stunning predictions of a $40 stock price by year''s end. Can GM do it? Time will tell but Carlos Ghosn certainly believes GM is severely undervalued.
It''s all about the M - MODAR that is...
In just the same way as GM has garnered attention for its unexpectedly strong performance, companies that are registering new all time record highs tend to do the same and MODAR has been hard at work committing massive amounts of buying recommendations across a spectrum of exciting companies and unfolding situations that have not been on its Radar for a long time, but have caught the attention of MODAR of late... To name a few, we recently recommended taking massive positions in: Oracle ORCL, Rambus RMBS, Motorola MOT, MasterCard MA, Microsoft MSFT, GM, Ford F, IBM, Intel INTC, M-Systems Inc FLSH, Juniper Networks JNPR and yes, even Cisco Systems CSCO. But some of the stocks that have really surprised by their performance, have been issues like American Eagle Outfitters AEOS, which has been soaring to new all time highs and MODAR has been all over this stock for weeks now and reaping huge gains in the process. So you might ask, how did MODAR uncover this gem? That is proprietary, but ordinarily the performance of AEOS might be a bit perplexing because the economy is supposed to be slowing and consumers aren''t spending, so how come AEOS is soaring higher almost each and every new day? Simply put, they are doing better than their competition and they have hit the sweet spot of their own endeavors.
How high can AEOS go? Nobody knows. Could it go from its current $40 to $50 or even $100 down the road. Again who knows, but what MODAR knows is that as long as it continues to perform as strongly as it has been, MODAR wants to be fully invested and long for as long as this issue goes higher. And that is the kind of vision that forces MODAR to buy in anticipation of surprising upside, just as it also did in the case of M-Systems just a few weeks ago, when FLSH displayed one of the most dynamically bullish setups we have seen in decades.
It has been this kind of commitment and performance that has made MODAR unofficially the 1 advisory service in existence over the past 18 months with an affiliate of MODAR having been independently rated 3 times over the past year as 1 out of 1200 contenders Worldwide.
A Tale of Two Companies Plus One
In the case of a few issues that may be familiar with some readers of Investment Intelligence wherein, some may even be already heavily invested and having reaped enormous gains are still adding more to their positions, we believe the days are numbered before this as well as some of our other most favored issues, begin to take on AEOS like behavior... In other words we believe some of these issues are destined to set new all time record highs and soon. As we have said numerous times within these pages, one can never ever underestimate how high a stock price can go, especially when companies have momentum or mojo. Actually, companies can literally amaze, once they get in the groove and really start delivering. They can take on a persona of near invincibility. Almost nothing can stop them when that happens... It is one of the wonders of this World and when you are fortunate enough to be involved and catch one of these mega-performers, the impact can not only be life-changing it can alter your outlook on life dramatically and sometimes even the richest can add hugely to their net worth.
The common denominator of all of our most favored issues is that success doesn''t come easily and the journey has been hard. But just as President John F Kennedy in one of the most remembered proclamations of our time when he stated: We did not choose to go to the moon because it was going to be easy, we choose to do these things because they are hard. But in that forbearance of our endeavors, when the reward finally comes it can be so much sweeter to savor because of hardship along the way contrasting results can be much more fulfilling.
Just a few days ago, in conversation with the CEO of an emerging company, he was in the process of informing me that there might soon be a landmark day in his company, because after years of hard work and determination he felt that things were about to get interesting. He also emphasized the high quality shareholders and known names as founding investors in his company he would soon be able to deliver for.
A short time later, in watching his company''s stock price, we noticed it was really starting to act firm to strong coming out of a lackluster if unappealing display of price history, other than it appeared to be a consolidation within a relatively tight range and it had recently made new lifetime lows in price. That sort of thing, in technical terms and in general, is not usually a very encouraging sign, but it did have the appearance of forming what looked to be like a very strong emerging bottoming reversal and looked attractive enough, for us to take a shot.
The next day, we noticed abnormally strong action in this issue and decided to jump in and recommend it, and to our absolute amazement it suddenly started moving up very strongly indeed blasting through some old highs and suddenly to new records right up to a 225% gain for the day. The lesson in this story is: Carpe Diem - Be ready to seize the day every day as MODAR has to. Never leave any stone unturned, expect the unexpected and "Never say Never", but what really resonated with us was how similar our favored issues looked and sounded just like the passion and history of hard work and dedication can suddenly manifest itself in a company''s stock price without any warning...
And that is why we feel that something dramatic could occur with our own coveted situations at any time based on unfolding fundamentals:
Two Issues With Outstanding 12 Month Upside
Two of these issues have in common more than a decade of history of hard work and dogged determination to succeed and it now looks as if the culmination of all of this effort could be manifested in a similar way to our above example in the following way. Our prime candidate has a share price around one dollar with recent highs near two and all time highs near three. Our other candidate has 3 year highs around $0.23 cents and for reasons we analyze include severe undervaluedness, we earnestly believe that within a very short period of time, our 1 contender will surpass recent highs around $2 and could soon set new all time record highs past $3 soon after. Our 2nd choice could very quickly move to $0.45 ~ $0.50 cents initially and in due time perhaps trade up to $1 plus and eventually to a potential $2 or $3. But such a move as this, might only be the beginning of much larger sustained moves as both of these companies have products and assets that are global in scope and nature with huge potential Worldwide demand down the road. The important detail to understand is when the $2 level is exceeded in the case of Candidate 1, it will actually constitute a buy signal and once the $3 level is exceeded, not only will that become a double or multiple buy signal, something unique will happen to that company, just as happened to AEOS just a few weeks ago, when it too registered new all time record highs: Every single shareholder in that company since inception over a decade ago will be making money and when that happens the pressure to sell at a loss disappears and moreover, many existing shareholders will want to buy a lot more or even double or triple their positions, Why? Because logically, they would immediately understand that the company has not only delivered on their expectations, but potentially will keep on delivering to a point that like AEOS at this time knows no bounds and the courage and discipline required to make additional investments will likely be rewarded just as they have been in the case of AEOS now for many weeks.
Takeover Activity Can Highlight and Revalue Stocks Overnight
To prove our point even further, over recent days, MODAR has added numerous other strong performing stocks to its portfolio including the resource sector, because when a company like Goldcorp GG right out of the blue, makes a play for Glamis Gold GLG at a 30% premium, it tends to cause other Gold and resource stocks to move substantially higher in sympathy and even Silver stocks were not immune from this, which led MODAR to initiate positions in Silver Standard Resource SSRI, in somewhat of a rare departure from our normal MO re this.
And why? Because we actually consider SSRI overvalued and maybe even over-hyped, compared to its peers, but that did not stop us from going along for the ride. And Again why? Because we also happen to be exceedingly bullish on Silver long term and therefore utilizing the very same disciplines that have been the hallmark of MODAR''s success, we cannot discriminate in the case of SSRI, because even in spite of our skepticism, this stock at $26, under certain conditions, such as a $50 Silver price or 4 times current, could go to $100 a share.
Most Undervalued on the Horizon poised for Geometric Growth
Which brings us to the next part of this unfolding story, wherein our 1 Candidate under certain positive conditions such as just $25 Silver, could not only soar past $5 relatively quickly, but in due time, fundamentally could be worth $10, $20, $30 or even more and one day even it could in of itself become a $100 issue in a World where Silver might reach $100 per share and Gold $1000 and maybe even $2000 or more.
But the real delineator in this story is a stark and dramatic difference between the current valuations of SSRI and our 1 leading contender for exponential upside. We''ve already explained how this company has accretive momentum building, but what if, it were actually able to demonstrate proven in-ground reserves, that could potentially equate to hidden values approaching $3.3 Billion or $52 per share, with near- term production cashflows that with substantially higher Silver, could be as much as $1 per share or more. Then, such a preponderance of overwhelming positives would have to make this not just a standout against virtually all other ideas, but veritably make it beyond compelling.
An Unprecedented Challenge to Prove Exponential Upside Potential Exists...
But that''s not all... What if, we were to challenge three of the most accomplished investors of all time: Jim Rogers, George Soros and even Warren Buffett himself to look at SSRI, compare it side by side and asset for asset and taking into account such important considerations as economic viability and cost of production with our 1 contender, as well as the fact SSRI could be defined as still being at exploration stage and decide which company is actually worth more...? We already know the answer, because even a baby could figure it out. With only 107 Million so called proven and probable ounces of Silver, everything else doesn''t really count and frankly the production economics of this property are almost prohibitive compared to our choice contender, which up to 6 times more economic in terms of return on investment. So once again: Which company would you rather own? One that will be in production long before SSRI ever is and one that''ll be eminently more profitable. That''s why at a Billion Dollars per Brick, even a Baby could tell you 3 Bricks equals more than 2. Thus far SSRI does not measure up and is insanely overvalued compared to our contender, and that alone, might persuade Mr Soros to switch companies forthwith.
Conclusion - This Could be One Investment for the Ages
What can we conclude from this...? Our 1 contender at $1, is arguably worth closer to $26 today and likely worth a lot more in the future and as part of our ever-present discipline and planned diversification, we would take a position in contender 2 at $0.075 cents for posterity and the prospect of setting new century highs at $0.23 cents and potential longer term price objective range of somewhere between $1 - $3.
Trade Safe
From the Desk of Savant
<< My Home | TheMoneyBlogs Home