Dear Investor,

In what will go down as one of the worst years on record for stocks, bonds, and real estate, gold shined brighter than ever -- trading around +25% higher in 2008 than the previous year.

For the first time in history, gold spot prices leapt ahead of future prices -- a remarkable event known as "backwardation". This is a reflection of the growing groundswell in demand for physical gold and is widely interpreted as a prelude to a stronger upward move.

But before you invest in gold coins, gold bullion, gold stocks, or gold jewelry, I urge you to keep reading. In the letter below, you'll learn several surprising truths about gold that can accelerate your profits.

The Shocking 10-Year Trend: Gold Clobbered The S&P 500

Why gold? In the past decade alone, gold prices have more than tripled while stocks have gone nowhere. 

 

Oil correlates to the price of gold nearly 90% of the time. When the U.S. dollar weakens, the price of oil (and gold) rises. Track the price of crude oil and watch your gold investments be "on the money" every 9 out of 10 times.

There's no doubt that investors flock to gold as a safe haven hedge during times of political and economic distress. And up until recently, the economic backdrop was about as bad as it could get.

Furthermore, with government printing presses running overtime, a weaker dollar and runaway inflation could be on the horizon. Today is a great time to invest in gold.

Growing Demand, Shrinking Supply

Aside from these near-term catalysts, there are reasons to be bullish longer-term as well. First, the world's 400 commercial mines  produce  2,500 tons of the metal per year, yet the world uses over 3,500 tons. And while production has steadily shrunk since 2001, demand continues to grow (there are even signs that many central banks are looking to increase their gold reserves).

This is one catalyst that should drive gold higher. How much higher is anybody's guess. But we're still well below the last peak on an inflation-adjusted basis and inflation hasn't even begun to kick in yet, so it wouldn't surprise me to see $1,500 per ounce within the next couple years.

In this raging bull market, some gold experts think it could surpass$2,300 an ounce  before it's over. That's not a far-fetched possibility. Keep in mind, even with spot prices near $1,000 an ounce, gold is still sitting at just half the level reached during the last boom in the early 1980s -- when it spiked to $2,186 in today's dollars. Back then, people couldn't sell their jewelry and other gold fast enough. This time around, it's just the opposite -- buying is so brisk that widespread retail shortages have been reported.

Gold demand comes from jewelry demand, investment demand, and industrial demand. The latter contains several little-known "utility" values that can help safeguard your portfolio through all types of market conditions. Industrial needs for gold, such as its use in prostate cancer medical procedures, should remain strong even in a weak economy.

If anything, the trend is only accelerating. In fact, the World Gold Council estimates that retail investment demand for gold in Europe jumped +607%, from 9.1 tons in the second quarter of 2008 to nearly 65 tons in the second quarter of this year. And China, the world's fastest-growing economy -- who has kept their gold stash a secret since 2003 -- recently tipped off the IMF that they've been on a five-year gold-buying spree, upping their reserves by whopping +76%.

"Hidden Gold Cycles": India is the world's largest gold consumer. And like clockwork, worldwide demand for gold jewelry is the strongest in the fourth quarter of every year. That's in large part because of holidays like Deepavali -- a five day Indian religious ceremony spread out between mid-October and mid-November. Deepavali and other year-end holidays that involve jewelry gift-giving, such as Christmas, contribute to this "hidden gold cycle."

A Better Way To Buy Gold: On Sale

But if you're looking to make money with rising gold prices, why not go right to the source?
 

1) How much gold is the company sitting on?
2) Is its reserve base shrinking or growing?
3) Where are the mines located?
4) What are its extraction costs?
5) Is its production hedged or unhedged?

I recently put scores of gold miners through this five-step selection process.  The results surprised even me: only one of them passed all five hurdles.
 

The Best Way To Profit From Gold
 

Here’s how my favorite gold mining company, based in Vancouver, passed all five tests...

Next, consider where a firm's mines and exploration projects are located. Those in remote parts of the world often carry geopolitical risk and stifling labor costs. Fortunately, nearly three-fourths of this firm's reserves are in stable North and Central American countries -- not in Africa or other remote places.

Extraction cost is the most important of the five criteria. Every gold producer gets the same price for its gold. So the ones you want to buy are those that can dig it up cheapest. This is where my pick leads the pack. In fact, the company moves gold from the ground to the market for a total cash cost of just $305 per ounce. Its major competitors pay closer to $500 per ounce. So it rakes in an extra $200 or so for every ounce it sells -- and it will sell over 2.3 million ounces this year.

Finally, some companies choose to hedge their bets by pre-selling future production at today’s prices. While that can protect against falling prices, it puts a damper on profits when gold is rising. The firm I found is unhedged, which means the company will gain the maximum benefit from stronger bullion -- the inevitable future of gold as inflation skyrockets worldwide.

This company has just about everything going for it. As inflationary fears and currency devaluation heat up, gold prices should only go higher from here. By squeezing more profits from every ounce sold, no other company can leverage rising prices like this one. 

Since 2004, revenues have soared 13-fold, jumping from less than $200 million to nearly $2.5 billion. Management plans to boost annual production from 2.3 million to 3.5 million ounces within the next five years. That +50% surge is unrivaled in the industry.

With a largely fixed cost structure, any uptick in gold prices will drop straight to the bottom line. Plus, it also has the only net positive cash balance in the industry, with over $260 million in cash on the books and zero debt.

Right now, the company is calling all the right shots, including the decision to hedge its fuel costs at prices below $50 per barrel to protect against rising oil prices. 

I absolutely think this firm is the best way for investors to profit from gold.

I'll tell you how to get the name of this stock in a second... and if you don't already own it you should consider scooping up some shares today.

I mentioned before that some industry experts are calling for gold to reach $2,300 an ounce or more. If they’re right, buyers of gold bullion at $1,000 an ounce would earn a return of +130%.

That's nice, but how would you like to make +188% -- nearly triple your money – even if gold doesn't rise another cent? And if it hits $2,300 -- like the scenario above -- you could pull in +599%.

Here's how...

While gold bullion is on a tear, another way to own gold has not kept up. It's lagging far behind for no fundamental reason -- a remarkable pricing quirk that won't last long.

You see, traditionally this type of gold investment sells at a lofty premium to gold bullion. But right now it's on sale at a 67% discount -- giving you a once-in-a-lifetime chance to own gold for just $329 an ounce.

If you take a gold mining stock's total market capitalization and divide it by how many ounces of gold it has in the ground, you can see just how big a discount to gold prices some of these gold miners represent. One lets you own gold for just $240 an ounce!

Normally gold mining stocks track the commodity price. But that hasn't been the case this time around. The Philadelphia Gold & Silver Index of mining stocks tumbled -28% last year, even as gold climbed to $872 from $695 the year before.

Gold stocks recently hit a 20-year low relative to gold bullion. Market distortions like this never last. When gold stocks snap back in line with bullion, stock owners are going to make a lot of money in a hurry.

I'll give you all the details on how to profit from this phenomenon in our latest research report.

You'll find the name and ticker symbol of my favorite “gold-at-a-discount” play -- along with "Gold Miner #2" and "Gold Miner #3" -- in A Golden Opportunity to Own Gold at $329 an Ounce.

Claim a free copy of this report here with a $39.50 no-risk trial to my Market Advisor newsletter.  

Please don’t delay long because gold stocks move fast when the right catalyst hits. I recently doubled my money in less than six months this way. I bought the Maket Vectors Gold Miners ETF (GDX) last November at $19.60 and sold it May at $44.16 for a +125.3% gain.

GDX is a great example of the extraordinary profits you can reap when the right catalyst hits a stock.

What catalysts are moving gold stocks? Take your pick -- growing demand, shrinking supply, new industrial uses, a billion newly prosperous people around the world who want jewelry... you have plenty of catalysts out there. 

But let’s not forget about the strongest catalyst of all: about a trillion dollars rolling off the Treasury Department’s printing press backed by nothing but an IOU. It’s a lack of confidence in the dollar and our ballooning budget deficits that are spiking the price of gold.

Catalyst Investing -- Because A Great Company Isn't Enough

The secret to making money in stocks isn't just finding a great company. General Electric is a great company that hasn't gone anywhere in years. Ditto for Microsoft, Pfizer and Intel.

The secret is finding great companies that are poised to benefit from a future catalyst.

In chemistry, catalysts are agents that speed reactions between substances. It works the same way in investing. A stock catalyst is something that creates a dramatic impact on a company's fortunes... and triggers a sudden rush into its stock.

When the right catalyst hits a stock, the Wall Street sales machine kicks into gear and investors flock to it in droves, furiously driving up the price-- just like we’re seeing in gold today.

$4.50 to $82 in 6 Weeks

The right catalyst can trigger a 10-bagger in a hurry. I've seen it happen...

In 1999, cell phone stocks were all the rage, and Qualcomm was the darling of them all. Qualcomm was the leader in CDMA (Code Division Multiple Access) -- a bandwidth-sharing technology that was about to become the industry standard. Virtually every telecom around the globe was slated to migrate to CDMA.

InterDigital, on the other hand, was a tiny patent holder in the wireless arena, largely ignored by investors. For the better part of 1999, InterDigital's stock meandered in a narrow $4.50-$5.50 range. That changed on November 17, 1999.

That was the day Qualcomm filed a report with the SEC disclosing that it had licensed an essential CDMA patent from InterDigital. Investors soon realized InterDigital would get royalties on every cell phone built to the new industry standard.

Talk about catalysts! It triggered a +1,264% gain within six weeks, topping out at an intra-day high of $82 on December 30th.

Catalysts take the guesswork out of investing... Even before you buy, you know the odds are stacked heavily in your favor. No more speculation, no more seat-of-the-pants investing.

Does my Catalyst Rating System work 100% of the time? No. But I think you’ll like your winning percentage. Right now, 45 of the 50 stocks in my portfolios are up -- six of them by triple digits.

Any system with a proven win rate of 90% is good enough for me. I’m sticking with it.

The catalysts I look for come in all shapes and sizes. But here are the biggies:

   A surprise takeover announcement. The best recent example is Wrigley. We bought stock in the chewing gum giant in mid-2006, just as they were hitting a bottom.

We liked Wrigley's solid growth and steady overseas expansion, its well-known brand name and its stable, recession-proof products.

These factors alone made us solid gains in the stock, as the shares rose more than +50% by mid-2008. But then, a major new catalyst appeared. Candy conglomerate Mars made a takeover offer and our shares jumped +23% in a single day. If you went to bed with $10,000 of Wrigley stock, it was worth $12,300 when you woke up.

   A killer new product. For years, Apple was a marginal computer company with a tiny but loyal user base devoted to its easy-to-use software. But on October 23, 2001, Apple introduced a portable mass-storage device that could hold enormous amounts of data. Of course, we now know this device as the ubiquitous iPod.

This extreme catalyst has added tens of billions of dollars to Apple's market cap. More than 150 million iPods have now been sold, and after the product hit store shelves, Apple shares shot from about $9 to over $200 --  a catalyst-fueled gain of more than +2,000%.

   Improving business conditions. For years, Caterpillar stock plodded along as slowly as the familiar yellow tractors it builds. But when the bull market in commodities kicked off five years ago, CAT was in a whole new business. Caterpillar's lineup of machinery, including a $5 million dump truck -- a 22 foot tall and 48 foot long beast that can slog uphill with 400 tons on its back -- were essential to the mining and energy sectors. Soaring commodity prices triggered a rush for its products like never before.

This major new catalyst for Caterpillar pushed up its revenue by +100%, its profit by +220%, and its stock price by over +200% in five years. This proves that strong catalysts can move a large company -- Caterpillar is one of the 30 Dow Industrials -- as easily as they can a small one.

   Geopolitical shifts. For half a century, 80 miles of water and the bitter aftermath of a hard-fought war have separated Taiwan from mainland China. But for the first time Taiwan's ruling party now promises closer relations and economic ties with Beijing.

This opens a huge market for Taiwanese goods and services. Taiwan's exports to China have already surged nearly five-fold since 2002... but with trade barriers fully evaporating, you can expect that figure to explode. China's fast-growing economy spells rising disposable incomes for mainland consumers, and you can bet they'll spend some of that cash on the flat-panel TVs, computers and other electronics that Taiwan is churning out by the millions. I expect my two favorite plays on Taiwan's coming growth spurt to give us +20% to +25% annual returns for the next decade.

Once you learn how to recognize "profit catalysts", you'll see the stock market in a whole new way. You can sit back and watch your portfolio grow. Because investing in stocks with powerful "profit catalysts" is a "buy and hold" strategy that really works.    

Investors tend to collect huge gains after they invest in 5-star catalyst stocks:

The catalyst system works over and over to pick stocks that double or triple . Imagine if you had 7-8 of these blockbusters in your portfolio. That would boost your bankroll fast.

The StreetAuthority Catalyst Rating System gave 4- and 5-stars to the following companies. Anyone who bought when the signal flashed and sold after the stock prices soared captured huge returns:  

Almost Every 4 and 5-Star Catalyst Stock Becomes a Winner

Ranking stocks by catalysts is an uncanny predictor of appreciation. It almost never fails. 45 out of the 50 stocks in my current "portfolio" are up in price, and six of them are up by triple digits.

This is a better way of investing -- because it cuts risk, worry and stress.

"Profit catalyst" stocks move under their own power, often going up even when the market goes down. When "profit catalysts" kick in these stocks surge forward regardless of the economy and the stock market.

For example, from May 2003 to December 2008 -- which includes the worst market we've seen in decades -- our "profit catalyst" stocks outperformed the S&P 500 by a whopping +46.7 percentage points.

Right now our "Beat the S&P" Portfolio is UP +85.9% while the S&P 500 is only up +8.6%. Clobbering the S&P by 10 to 1 is even more impressive when you consider that 80% of highly paid fund managers can’t even match the index, let alone beat it.
 

My Five New "Profit Catalyst" Stocks that Could Double Your Money in Two Years

I have just completed a report detailing five 4- and 5-star "profit catalyst" stocks that offer explosive capital gains... with high yields... and minimal exposure to the ups and downs of the market.

I expect this concentrated mini-portfolio of powerful "profit catalyst" stocks to double your money in two years. I’ve seen it happen so many times before with stocks like these that I see no reason that history won’t repeat itself.

"Profit Catalyst Company" #1 is an electric utility in one of the world's fastest-growing economies. My Catalyst Rating System has given this stock a solid five stars, which means it has the potential to triple in the next 24 months. With a dominant market share, the rapid growth of commercial and residential users is driving its customer base upward at a steady clip. In recent quarters sales have grown +15%, and there's no end in sight.

"Profit Catalyst Company" #2 generates a gigantic amount of cash. They buy up oil tankers, and then rent them out to major operators. They currently own a fleet of 60 ships, all of which are leased out. Leases are medium to long-term, typically 10-15 years.

With its revenue locked in from long-term leases, its 9.5% dividend yield looks secure. The company has increased dividends eight times in four years, adding up to a total hike of +60% since it started trading in 2004.

"Profit Catalyst Company" #3 is a closed-end fund focusing on advanced international markets. When stocks crashed last November foreign markets were beaten up especially hard. This stock is still selling well below the value of the assets on its books. This market distortion is your opportunity to make extraordinary gains. Right now you can pick up this stock at a -24.5% discount off its 52 week high. I expect this stock to double in the next two years... and you collect a 13.5% dividend yield while you wait.

"Profit Catalyst Company" #4 is a Four-Star-Rated company that transports crude oil, natural gas, gasoline, and heating oil through its pipelines from coast to coast. It collects a fee for every cubic foot it pumps.

This company gets paid on volume, not price. Zigzagging energy prices don’t affect the fees it collects. Right now volume is surging and they're swimming in cash. In fact, they're adding more pipelines to keep up with demand. Because the company is exempt from corporate taxes it is legally-obligated to pay all available cash to stock holders. This outfit has paid cash distributions for 63 straight quarters since it started in 1992, increasing its payout by an amazing +12,575%.

Ordinary shareholders are receiving thousands of extra dollars a year as a result...   

"Profit Catalyst Company" #5 is a little-known company designed for one sole purpose -- to provide investors with a steady stream of rising income. During 2008, one of the worst years on record for dividends, this company raised its dividend by +19%. In fact, it has increased its dividend by +67% since November 2006. Because corporate executives are paid on the same basis as stockholders like you and me, they are highly motivated to increase cash payouts. Payouts should increase at least +10% a year for many years into the future. My Catalyst Rating System gives it 4 stars because of the high yield, dividend expansion, and rising stock price.

Get All the Details on These 5
Companies in the Next 5 Minutes

I'd like to send you all the details on the Five "Profit Catalyst" Stocks that Could Double Your Money in Two Years. And I want to do it soon, because these companies are ripe for the picking. They're overlooked, unrecognized, and underpriced. But that could change fast.
           
I won’t even charge you for the report. Instead, I’ll include it as a free bonus with a $39.50 trial subscription to Market Advisor.

StreetAuthority sells research reports like this one for $49. But why should you pay $49 for something when it comes free with something else costing just $39.50? It’s like getting paid to take the report! And at the end of the trial period, we send you back the $39.50 if you don’t choose to become a regular subscriber.

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Sincerely,



Lou Betancourt
Publisher
StreetAuthority.com
 

P.S. Barack Obama is pumping more than $60 billion of your money and mine into green energy. So let’s get our share back in stock profits! Back the right green energy company -- and you could cash in on as close to a guaranteed jackpot as you'll every find on Wall Street. Because whenever Washington decides to help a new industry get off the ground the investment profits explode...

When the government invested heavily in biotechnology in the 1980s, early investors in Amgen made +1,000%. In the 1990s, when the government spent billions to modernize its technology it picked Oracle and Dell as its main suppliers. Investors who got on board that train gained more than +1,000% in a few short years, turning $100,000 into $1,000,000.

Now it's happening again, with Barack Obama investing heavily in green energy. Federal law mandates that our use of renewable energy rise by a factor of 40 within the next decade. So plenty of green-energy stocks should do well. But a few of them could shoot up +4,000%.

We spent the past three months researching 20-30 stocks in this sector, and narrowing them down to the best three stocks in the green energy sector -- with extraordinary growth potential -- that you can buy while they're still dirt cheap.

We’ve written them up in a report called Slam-Dunk in Green Energy. You can download a free copy immediately when you sign up.