Silver Stock Report
by Jason Hommel, May 23, 2006
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Some of the greatest financial newsletter writers, in my opinion, are listed below:
Harry Schultz http://www.hsletter.com/ $382/year
Richard Russell http://ww2.dowtheoryletters.com/ $250/year
Bill Murphy http://www.lemetropolecafe.com/joinrenew.cfm $199/year
Jim Dines https://www.jamesdinescompany.com/order_dinesletter.html $195/year
Doug Casey http://www.caseyresearch.com/ $149/year
David Morgan http://www.silver-investor.com/ $99/year
All of these men have written positive things about silver, and silver stocks. They all provide paying subscribers with regular market commentary. Richard Russell is a legend, is over age 80, and I’ve heard he has 12,000 paying subscribers (unverified). Harry Schultz was once listed in the Guinness Book of World Records as the highest paid financial advisor in the world (I’m not sure if he still is). Jim Dines is a featured speaker at the gold shows, and is also a legendary great investor. Doug Casey, another headline speaker, wrote a bestseller, “Crisis Investing” at the top of the 1980’s bull market in gold, and does the fundamental analysis on mining stocks. Bill Murphy, another headline speaker, is exposing the central bank manipulation of the gold market, and is really well informed about the gold market on a daily basis. I read him daily. David Morgan focuses on the silver market the most.
I respect all of those wise men.
But let me tell you what an overly skeptical fool I was just a few years ago, before about 2001. When I began investing, I thought such annual fees for investment newsletters must surely be rip-offs. After all, I foolishly reasoned, newspapers or financial magazines cost much less, and have a large staff of writers. I mistakenly thought, “How could these men get away with their fees; and who would pay it?”
Later, after having studied the silver and gold markets for a few years, and doing well, I figured I could afford to “waste” some money on a subscription, just to see if it really was worth it. Surprisingly, it paid off! I bought David Morgan’s letter, and I bought a stock advertised at his web-site, Sterling Mining (SRLM.PK), at around $.50/share. By the time it was at $1/share, I had $30,000 of it. The stock went up past $10/share, and so, I figure David helped me make nearly $300,000! Was the $100 subscription worth it? Of course!
I also bought Bill Murphy’s letter, and bought one of his stocks, Golden Star (GSS), and doubled my money in about 6 months. I probably made $50,000 on that one.
But it wasn’t just the stock tips that were so beneficial. I learned a lot about investing from Murphy and Morgan.
Now, for several years, I’ve written my free newsletter, where I compare silver stocks; their cost and the value, to showcase the best values out there. And, I have a paid service, the “Look at my portfolio”.
I must admit that my subscription service costs more than all these wise and experienced investors. If I’m such a champion of value, how did that happen? How could it happen? Am I a hypocrite? I know you’ll tell me if I am! I get letters! Let me examine myself, and please indulge me on this, after all:
2 Corinthians 13:5 “Examine yourselves, whether ye be in the faith; prove your own selves.”
So, let’s see if I’ve abandoned the faith or not.
I charge $39.95/month, which is about $480 year. My paid subscribers do not get much of a commentary, if any at all, just a monthly “look at my portfolio”. Even worse for them, I rarely make recommendations or give portfolio advice. Worse still, it’s not like I have a few people working for me — I have no research staff. Yes, zero employees. Yet I have about 840 paying subscribers. So, how do I get away with charging the most, and providing the least? I’ve been wondering that myself lately. Hmmm. Do I really provide the least, or do I give exactly what people want?
What am I doing?! I market part of the market to some of the people in the market! So I guess I’d better understand the free market, and apply free market principles. Here’s how I try to apply free market principles as I follow in the footsteps of the wise men listed above.
First of all, I give away the vast majority of my analysis for free. So much so, that many even wonder why they should subscribe in the first place! Some of my readers said I was nuts, that nobody gives their information away for free! But doing so creates a wider, and expanding readership base, more than if I charged for it. (This eliminates a trade barrier, and creates a more free and wider market.)
Second, I don’t believe in copyright, so my reports are free to circulate as widely as possible on the internet through re-posting by others. Further, the writings I produce, if widely shared, help not only me, but other people, too. (Again this eliminates a trade barrier, and creates a more free and larger market.)
Third, I get most of my stock tips from my readers, which are a larger, better skilled and harder working group than any I could afford to hire. And I’m less distracted by having to train employees. Also, would it be an effective use of my time to try to train one person, when I could be teaching the thousands on my list? (And so, I make use of the benefits of the free market.)
Fourth, I don’t charge annually, but I charge monthly, which makes it cheaper to try out my subscription. (This lowers a trade barrier.)
Fifth, I try to treat all men the same. Well, perhaps I have more loyalty to my readers than I do to the companies. This enables me to continually seek out the best deals, and frees me to sell companies that I have recommended in the past, to raise the cash to get into the best deals I come across today. The market is about buying, and selling, and I do both. (This is a lower trade barrier for companies to gain access to me and my readership base, and means my readers can buy better companies, and creates a more free market.)
Sixth, I don’t mind promoting small market cap stocks. I don’t mind “telling the market what to do” (preaching); however, I don’t like to say that I think my readers should buy the stocks up to a specific price. I believe that if I tell the truth about the fundamentals of the company, then the market of my readers will best decide what the stocks are worth. I believe that my readers are smarter, collectively, than I am. (The market is more efficient at deciding prices, not one man–that’s the main difference between capitalism’s market prices vs. communism’s fixed prices.)
Seventh, I believe in the benefits of advertising. I pay to advertise my service. I freely advertise companies who cannot afford marketing fees — charging them nothing, which lowers a trade barrier for them. To market a product, is the same as advertising a product. Marketing is advertising. You advertise to a market. To understand markets, you have to understand advertising. This list of things you are reading right now, is me advertising my service. The market is a means whereby men are persuaded to act, rather than forced to act. I believe in the benefits of persuasion through reason. I like to be persuaded, taught, by men who teach me reasonable things. I treat men the way I would like to be treated.
Eighth, I believe in the benefits of specialization, and simplification. (Capitalism and the free market leads to the division of labor, and to increasing specialization, and job simplification.) I’m not a geologist. I’m not a miner. I’m not an MBA. I’m not an accountant. And I don’t think you have to be those things, to do what I do. I’m an analyst, a researcher, an investor, and writer. Or maybe I’m just a “thinker”. My job is to understand the market, to teach the market, and to market to the market. My job is highly specialized, but very simple. So, regarding stocks then: if I can’t understand it, and wrap my mind around it, then the market might not either.
Ninth. (I’m finally getting to the point of why I charge so much.) When I started charging for the “look at my portfolio”, I charged a market-priced price. I simply raised the price until subscriptions began to drop off just slightly. In theory, I should double the price again and again until just before the rate of new subscriptions is cut in half: that’s the highest price the market will bear to bring in the most money. But I charge less than that! And so, I’m still not charging as much as I probably could. A benefit for my subscribers of charging more money, (which is obviously good for me) is that fewer people would see the look at my portfolio, and thus, there would be less competition among those who are paying for the “stock tips” of the look at my portfolio! But enough people complain about the high price, and I charge so much as it is, and many people subscribe, unsubscribe, and re-subscribe again, to save on the cost, so I guess I have it about right. Since silver prices are way up, I’m actually getting less silver per signup than when silver was $6/oz., and I’m getting many more signups recently, so I may raise my price again soon. Maybe I should poll my paying subscribers?
Tenth, the market pays me for my service in three ways. Subscription fees are the least of my gains. Capital gains (in my tax free IRA) are the greatest compensation. Second, and much less, are finder’s fees that I earn on occasion. Third, and least of all, are the subscription fees. I have, so far, spent more on advertising than I take in from subscription fees. (See point seven, on the benefits of marketing the market to the market.) And, 1 Corinthians 9:7, says, “Who serves as a soldier at his own expense?” (And why is the soldier an apt comparison? By promoting silver, I’m making war on paper money!) And thus, I’m attempting to create an organically growing, market-driven educational tool (this free newsletter) that will grow just as surely as the dollar must die.
Eleventh, I don’t do this for money, and I don’t do it for ego. Although I do earn money, and it does make me feel really good to help so many people. I do it for God, to glorify Him, and I do it for you. I have enough money to retire. I don’t need to do any work at all. If I could do whatever I wanted, (and mostly I do), I would try my best to teach the most important and most beneficial of God’s truths that I know of, in the most effective way that I know of, to the most people that I can. And so, I try.
One of the ways to know if one is in the faith or not, is by one’s fruits. The type of fruit that you are looking for, and the type of fruit I produce is both general market advice and stock tips. They don’t all turn out well, of course, but I do fairly well for my readers. One of my readers said I helped his portfolio grow by a factor of 12 times, in the last few years. God said to be fruitful and multiply, and that’s certainly a multiple.
When I was analyzing Northgate, I challenged my readers to let me know of another gold mining stock with a larger market cap, with a lower P/E ratio. Nobody succeeded. And so, I knew I had a winner–and it did very well in short order, because I think the market realized that, too. Now, I did hear of another stock that might go up more, faster, but it was a much smaller market cap, and thus, a smaller opportunity.
Since this stock is so small, ($36 million market cap), it’s only fair to tell my paying subscribers about it first.
This company recently drilled a very high grade copper intercept (40% copper, worth about $3000/tonne) over a rather wide, mineable width, 27 feet, in one drill hole. In fact, I don’t recall anyone, not even the majors, ever hitting any such high grades over such long lengths ever, and I’ve looked over hundreds of mining companies by now.
In an era when resources are in high demand, high-grade ores are like well-ripened, low hanging fruit, planted by God, just waiting to be harvested. I think this is going to make a lot of people a lot of money, and this is why it’s important to not be covetous or jealous of their gain that they (and I) will get if you bid up this stock. In fact, I had to remind myself to not be covetous of the gains I’m helping to create for prior stockholders, as I bid up the stock over 25% over about two weeks as I was buying. Instead, I had to focus on my joy of being able to share in the gains. I’m not a copper expert, but sometimes opportunities this good just fall into your lap, just for showing up and paying attention.
So, if you want to know the name of this copper stock with 40% copper that I bought last month, you can subscribe to “look at my portfolio.”
I’ll use your subscription fee, to help tell even more people about silver, stocks, and the free market, and God will get the glory. God puts the minerals in the ground in the first place, and God is the one who sends blessings of prosperity upon all of mankind (good and bad); and, I believe, especially upon those people who embrace free market principles.
You can signup, or login to get the name if you are an existing subscriber, here:
Final Disclaimer: This email is going out to over 25,000 opt-in subscribers. I own this other copper stock that reports a 40% copper intercept, and no company has paid me to send out this report.