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Paul Tracy: Good Day, and welcome to this Emergency
Video Summit. My name is Paul Tracy, and I'm the co-founder
and Chief Investment Strategist here at StreetAuthority.
As you already know by now, the U.S. government has
committed $12.8 trillion of your hard-earned money to bail
out our struggling economy. To put that number into
perspective, consider this...
That figure represents more than we spent on World War
I, World War II, the New Deal, the S&L bailout, the Iraq War
and the Marshall Plan combined. It should come as no
surprise then that this is the single biggest financial
story of our lifetimes, and it's all over the news day-in
and day-out.
But if you're anything like me, you're probably fed up
with this media frenzy. And if you are, then I don't blame
you a bit.
The problem is that if you flip through the financial
channels or if you read your local paper, you'll see plenty
of debate about the size or scale of the government stimulus
package, but almost NONE of the news you'll find is designed
to help YOU as an investor profit from everything that's
going on.
You see... when the U.S. government spends trillions of
dollars, it creates more than just a healthy topic for
debate -- it creates countless opportunities to invest in
high-quality companies that are going to be on the receiving
end of all of that spending. That's especially true for
companies that operate in markets President Obama has
targeted for massive spending... including alternative
energy, infrastructure, and healthcare, just to name a few.
Stocks in these markets are likely to skyrocket
as the government opens its wallet and pours billions into
green power projects, new roads and bridges, plug-in
electric vehicles, healthcare initiatives, and countless
other projects.
And that brings us to the reason we're here today...
During the past few months our staff has answered
literally thousands of emails and phone calls from readers
just like you. And during that time, the vast majority of
those questions have centered around ONE single topic -- how
to profit from the U.S. government spending spree. The
response we've gotten has been overwhelming.
We've listened to your comments and suggestions, and
we've responded by giving you what you asked for -- a team
of researchers focused 100% on government-driven investing
opportunities.
In this shell-shocked economy, you need an edge that
puts the odds squarely on your side. The best way to do that
today... indeed the only way... is to limit your investments
to those that are virtually guaranteed to succeed thanks to
the daunting power of the federal government.
In this emergency summit, we're going to show you
exactly how to profit from the government spending spree.
We'll review seven specific sectors that are going to
receive the biggest cash injection from Obama and Congress.
And throughout this briefing, we'll also provide the names
and ticker symbols some of our favorite government-oriented
investments right now.
Taking the lead on this research project is
StreetAuthority's senior investment analyst, Andy
Obermueller. Andy's background and track record are ideal
for this project. He's spent nearly a decade doing political
and investment research for several major newspapers. And
thanks to his in-depth knowledge of complex
government-related topics, his input has been sought after
by congressional and presidential candidates, speechwriters
and campaign staffers.
But what's impressed me most about Andy is how he's
translated his knowledge of how the government works
directly into profitable investing ideas -- ideas that have
already made our subscribers a lot of money.
For example, last year Andy created a complex financial
model based on data from the Federal Deposit Insurance
Corporation -- commonly known as the FDIC. Using this data,
he identified two banks that were financially sound and were
destined to rally back from their recent lows. One of them
was National City, which was bought out last year at a
significant premium. In the process, Andy pocketed a +125%
gain. Another was Wells Fargo, which Andy recommended when
the stock was trading in the single digits. The stock has
since rallied back up to $25 per share, helping our readers
capture a +200% gain in just a few short months.
When we saw the profits Andy was locking in on his
government-related picks, he soon became our lead analyst on
this topic. And for the past few months Andy has been
working with our research team on a special project here at
StreetAuthority.
Andy's spent countless hours pouring through the latest
government data... and what he's discovered is absolutely
shocking. His newest government-related investment ideas are
so compelling that we've decided to hold this Emergency
Video Summit to get you up to speed.
Andy, thanks for joining us today. If you can, let's
talk first about the size of the opportunity here...
Andy Obermueller: What we're talking about is the
biggest financial story ever. If you look just at the funds
allocated by the stimulus package on a list, you'll notice
that a word is missing. That word is million. These programs
start at a billion dollars and go up from there. The line
items for infrastructure, alternative energy and health care
are in the scores of billions. $30 billion for the power
grid. $19 billion for digital medical records. $18 billion
for water projects, $8 billion for railroads, $30 billion
for roads. I think people are starting to become immune to
these big numbers, but they are going to have a real impact
on people's portfolios.
Think about the Dow -- that's the nation's top 30
companies. There isn't a company there that would thumb its
nose at a billion dollars in business. But the stimulus
spending alone would give $1.5 billion not just to the Dow
but to every member of the Fortune 500. For some of those
companies, that'd be a 30% pop in revenue. This is a
tremendous amount of money. For 500 companies. And that's
just the stimulus package, not the multi-trillion 2010
federal budget before congress.
If there's one thing to remember, to write down, it's
this: Every time a public dollar is spent, a private-sector
profit is realized. The bailout is in the tens of trillions.
That means, conservatively, hundreds of billions in profits.
And the bailout was hardly the first time what happened
on Capitol Hill or in the West Wing had an effect on the
floor of the stock exchange. In the mid-1990s, the
government started to modernize its technology. Oracle and
Dell were the main suppliers. Those lucrative government
contracts kick-started strong growth at both companies.
Investors who got on board Oracle back then earned 1,200%.
Dell did even better. A $10,000 chunk of Dell stock had shot
up to $800 grand by the end of the decade.
PT: And you think this was purely because of
government action?
AO: The government was the tipping point. Both
companies were good, but the government contracts took them
to great.
Another story I like is Amgen. It made a killing when
the government gave biotech a boost in the 1980s. It was a
government scientist, working in partnership with Amgen, who
discovered what became Amgen's first blockbuster drug.
If you'd bought a thousand shares of Amgen back in the
1980s, that stake would be worth $3.6 million today. The
list of stories like this is pretty much endless -- as you
can imagine from a country that was initially founded by a
for-profit corporation.
And the profits investors can earn don't necessarily
have to come from big government contracts. Regulation,
legislation, court cases -- they all can and do propel
certain companies' stock prices.
The problem is that the government is literally too big
for individual investors to keep track of. Obama's latest
budget proposal is 20,000 pages long, for heaven's sake!
That's a lot of paper to keep track of, and it's nearly
impossible for investors to keep up with all of it by
themselves. That's what my research team and I are here for.
PT: You mentioned that changes in government
regulation can make stocks soar. I know at StreetAuthority
we've had success in this area.
AO: In 2002 -- seven years ago -- we saw how
Moody's benefits from government regulation on who can enter
the credit ratings market. It's basically a
government-protected racket that Moody's shares with
Standard & Poor's. Five years after we recommended buying
Moody's, its shares were up +185%.
PT: And Warren Buffett must have seen this potential
too, because he is a huge owner of Moody's.
AO: Buffett owns more than a fifth of the
company. He likes what he always calls sustainable
competitive advantages, and if Uncle Sam is limiting your
competitors, that's a pretty good guarantee your business is
going to do well. In fact, it's the best guarantee out
there.
PT: We've covered a lot of government-related
investing ideas over the past few years -- and a lot of
these ideas have come from our satellite office down here in
Austin, Texas -- not just our headquarters in Washington
D.C. Can you fill us in on a few of those?
AO: There's an old song here in Texas: I was
country, when country wasn't cool. So you might say we were
talking about the government before talking about the
government was cool. In June 2004, we picked five defense
stocks we thought would do well under Bush. They did.
The next year we determined which companies would do well
from expanded Homeland Security spending. The three stocks
we identified were up an average of +47.4% a year later. To
put that in context, our picks did ten times as well as the
S&P 500.
PT: How about some more recent picks?
AO: In October, we recommended United
Healthcare. It's been a huge winner, up +34%. Meanwhile, the
broader market has gone nowhere.
And one thing I ought to make clear -- we don't care
about politics, we care about profits. We're on both sides
of the aisle. We made money with Bush and we've made money
with Obama. Since President Obama has been in the White
House, our top Obama-related picks have delivered gains of
up to +33%. And since the stimulus bill was signed in
February, all nine of the infrastructure picks we
highlighted have moved higher... with the top gainers
soaring 32 and 42 percent.
PT: Do you expect gains like these to keep happening
as the government continues to spend money?
AO: It's been going on for the past 230-some
years. The government just gets bigger, especially these
days. The biggest financial story of our lifetimes is
playing out before us at this very moment. Right now.
You can tell the effect just by listening to the way
people talk -- where did the word trillion come from all of
the sudden? Astronomers don't even use the word trillion
very much. But now we're hearing it on the news all the time
these days. TRILLION IS THE NEW BILLION. Washington alone
has already spent, lent, or committed $13 trillion to pump
up the economy. If you don't grab your piece of the pie,
someone else is going to eat it.
Consider this: Obama's 2010 budget, in the form
currently before a Congress that is in the president's
pocket, calls for $400 million an hour in spending. The
federal government can't get a good night's sleep for less
than $3 billion.
PT: What investing opportunities have been created
from this huge 'rescue' plan -- and what sectors are likely
to benefit the most?
AO: Dozens of sectors will be affected. I've
filtered this list down seven sectors that stand out, but
this is by no means a full list, just a taste on a very long
banquet table.
The first sector I like is alternative energy -- that's
wind and solar. President Obama loves it. We're using more
of it, and the stimulus bill had a generous tax credit for
it. Solar, for example, is a new industry with a lot of
little players who are all trying to develop the next big
thing. The companies that make solar easy and affordable are
going to make a king's ransom -- seriously, they're going to
make Dell and Amgen look like losers.
In the wind power space, a few established industry
players are going to run the table. And this is a
high-stakes game -- those big wind turbines you see from the
highway cost a couple of million bucks apiece. Obama wants
20% of our energy to come from them. Right now, we're at
just over 1%. Utility customers are ordering turbines by the
dozen. The winners here will be Vestas (PINK: VWDRY), which
is based in Denmark, and General Electric (NYSE: GE), which
has the leading U.S. market share.
Then there is infrastructure. Our country's roads and
bridges have been neglected for decades. We're looking at a
$1.6 trillion repair bill in the next five years. We need
power lines and water mains. You know, we still move cargo
by barge, and a lot of critical river locks are unusable. A
national engineering group has given the U.S. infrastructure
a failing grade -- and it's going to cost us to fix the
things that most of us take for granted.
This is true in a lot of developed countries, too --
it's easy to ignore this stuff until something goes wrong.
On top of that, most developing countries can't build things
like roads and airports fast enough. The thing is, there are
only a few companies with the know-how and ability to build
an airport, a nuclear plant or an interstate highway system.
I'm investing in several of them.
The third sector is Healthcare. Healthcare makes up
something like 12% of our Gross Domestic Product.
If you look at the top U.S. companies by revenue -- and
I just grabbed these numbers from the new Fortune 500 list
-- four out of the biggest 25 companies are health-care
related. It's always been big business, and the stimulus is
adding to it. Of the $787 billion Obama is spending, more
than $140 billion will go toward health care.
PT: That's three big areas. What else?
AO: The fourth sector that stood out to me is
government-guaranteed mortgages. These things caused the
financial meltdown, and so most people think they're toxic.
That's not true, though. A relatively small percentage of
mortgages went belly up, and Uncle Sam stepped in to
guarantee a lot of them.
I like two obscure companies that buy mortgages. A
government-guaranteed-mortgage basically has Uncle Sam as a
cosigner, so there is no risk of the loan going bad. These
companies borrow at a low rate and lend at a high rate and
pocket the spread. It's a beautiful business plan -- I call
it the financial Mona Lisa -- and the best part is both of
these companies offer a double-digit dividend yield. My
favorite here is Capstead Mortgage (NYSE: CMO) --
with a current yield of 19.2%!
PT: Wow. And if this is just the start, I can see
now why you're so excited about these investing
opportunities. The fifth sector is quite unusual. Why don't
you tell us a bit about it?
AO: Not everything that's out there is stimulus
related. Get this, Paul. There are so many people in jail
that the government pays private prisons to take them in.
This is a $37 billion a year business. Our government, the
land of the free, imprisons more people than Russia under
communism or South Africa under apartheid. The federal
prison system is operating at something like 35% beyond the
capacity it was designed for. So there are companies that
are building prisons as fast as they can. States just don't
have the money to build prisons, and more and more they're
outsourcing the problem. And as a result, some of my
favorite prison operator stocks are soaring.
The sixth sector is a little-known part of the
automotive industry. And it's about to get a serious cash
injection with the help of Washington. The president's
future is one with green cars -- vehicles that have about
twice the fuel economy we have today. In fact, part of the
support the government is giving Chrysler in its bailout is
contingent on it producing a vehicle that gets 40 miles to
the gallon. You hear the term "carbon footprint" a lot these
days, which refers to the amount of greenhouse gas something
emits. Obama wants to seriously reduce cars' carbon
footprint -- he thinks this will create jobs, reduce
dependence on oil and help the environment.
Obama's problem is that none of the U.S. automakers
like small fuel efficient cars because they've never made
any money with them. So they're not going to move an inch
toward being green unless they're forced to -- or unless
there is a huge government incentive. And there is. Just
days ago the government reached a deal that will provide
$4500 to consumers to get them to trade in gas guzzlers for
more fuel efficient models. That's a big incentive that
people are going to jump on. It's also just one more reason
I think that Obama ultimately has to save GM.
Now, speaking of GM, one of the things that company has
done right -- one of the very few things -- is to develop a
car that has interested the president. That's the Chevy
Volt, which can run 40 miles on one charge and no gas. It's
the cutting edge U.S. technology.
But here's the thing. Even though the Volt is a good
start, it's not the best thing out there. And it's not the
best thing out there for one reason -- the battery.
The battery is the most expensive and most important
part of any green car.
The leading battery producer -- the same company that
makes the battery for your phone and iPod -- has cracked the
code. It's already producing batteries that are cheaper and
more energy efficient than anything else out there. And the
kicker is that the things aren't toxic. They're totally
recyclable. In fact the CEO of the company that makes this
battery literally drinks the battery fluid to show that its
harmless. He admits it doesn't taste very good. Now, that's
kind of a weird demonstration, but this company's products
line up with the president's vision and the inevitable
future of the hybrid automobile. This company will be the
first in line to supply batteries, and believe you me it's
going to make investors a fortune.
PT: While most people are gambling on the big 3,
you're looking beyond all that to the "New Detroit." I like
it. What about your final sector?
AO: The last area worth mentioning is ripped
from the headlines. The government response to swine flu
will inevitably open the door to billions in revenue,
particularly for two drug makers. This is one of those
stories that didn't turn into what the nation's news
directors were hoping for. I mean, the media went nuts.
Bureaucrats and health officials took the right steps and
adopted a measured tone and, miracle of miracles the thing
didn't wreak much havoc.
But the administration isn't going to just let it go --
they're going to stockpile flu vaccine in huge quantities,
and a couple of drug makers are going to see a nice earnings
pop because of it.
PT: So the bottom line for our subscribers is that
there's plenty of money to be made out there. But, it's not
easy to keep up with all of the government's latest actions,
is it?
AO: There's a lot of opportunity, and it's
immediate. Some of the companies that will begin to benefit
will ride the government train for years. Investors who act
stand to make the same sort of strong profits that Amgen or
Dell delivered.
And to reiterate -- I can't stress this enough -- Every
time a public dollar is spent, a private-sector profit is
realized. It seems simple, but the hitch for most investors
is keeping up with the government spending trail, plus all
of the regulations, legislation and court cases.
PT: Andy, thanks for the update. This went by too
quickly -- but I think we covered enough information to show
our viewers out there the tremendous investing opportunity
we're looking at today. I certainly hope we can do this
again sometime soon...
AO: I'd be happy to.
PT: Thanks Andy.
If you're wondering what your next step should be --
what you should do as investor to make sure that you don't
miss the boat on the biggest financial story of our
lifetimes -- then you need to read Andy's latest report,
"How to Profit from the $12.8 Trillion Government
Spending Spree."
His report goes into detail on several of the sectors
we discussed today, and it reveals several more specific
picks that you DIDN'T hear about in today's video summit.
For example, you'll get the names of two companies that
are profiting from massive government spending on
infrastructure. Since the stimulus package was signed into
law on February 17th, these two picks have moved up quickly.
One's a worldwide construction company that's already gained
+32% to date. The other makes critical copper, aluminum and
fiber optic cables... and shot up +41% in a matter of just
weeks. You'll get both of their names in Andy's latest
report.
But that's not all you'll get...
You'll also get the name of a firm that should see a
flood of new business as the Obama Administration rolls out
new environmental policies like the cap-and-trade system.
And you'll also get the name of the firm that's uniquely
positioned to capitalize on two of the world's most powerful
trends, wind power and water shortages. With the Feds
pouring billions into shoring up our capabilities in both
areas, this stock could skyrocket.
You're just seconds away from getting the names of
these winners and so much more -- for free! But the only
place you'll find these picks are in Andy's latest report,
"How to Profit from the $12.8 Trillion Government Spending
Spree."
And perhaps best of all, in this report, you'll learn
-- in no uncertain terms -- what we consider to be the
SINGLE BEST WAY to profit from government action today.
All you need to do is
click here to view this special report immediately.
So take that next step right now.
Thank you for joining us today... Now let's profit
together from the biggest financial story of our
lifetimes...
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