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Louis James' background in physics, economics, and technical writing prepared him well for his role as senior editor of the International Speculator and Casey Investment Alert. Like Doug Casey, Louis constantly travels the world, visiting highly prospective geological targets, grilling... More
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  • Too Good To Be True? Legally Avoid Paying Income Tax

    When you hear about strategies that claim to legally allow US citizens to avoid having to pay income tax, the first thing that probably comes to mind is that it's some sort of cockamamie scheme.

    The US government is no slouch when it comes to shaking down its citizens for every penny. It would be foolish in the extreme to think you could slip one past them.

    There really was no sure way to legally escape the suffocating grip of the US government besides death and renouncing your US citizenship… until recently.

    A new option has emerged that allows Americans to significantly reduce or eliminate income tax altogether. At first it sounds impossible, but as Casey Research's Chief Metals and Mining Strategist Louis James has found out for himself, this is 100% real and legitimate.

    And for many Americans, including individuals operating on a modest scale, it could really be game-changing.

    This video is a recent presentation Louis gave on this jaw-dropping opportunity.

    If you are at all interested in keeping more money in your pocket, you won't want to miss it.

    Puerto Rico's Stunning New Tax Advantages is the authoritative guide on the Puerto Rico option. It's been reviewed by dozens of professional sources in Puerto Rico and the mainland US, including top law firms and accountants. It's an A-Z guide with information you won't find anywhere else. If you're considering taking advantage of these incentives, get started with this guide. It will save you a lot of time and money in the process. Click here to learn more.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jun 12 6:57 PM | Link | Comment!
  • Discovery Of The Decade, On Sale

    Sell in May and go away?

    Precious metals tend to exhibit a seasonal pattern to their price trends, with summer weakness that leads to strength in the fall. Add to this the fact that mineral exploration in the Northern Hemisphere, especially in Canada, enters a sort of hibernation during winter months and then reawakens in the spring. With winter drill programs already announced, we typically see less news flow starting about now until well into the summer.

    These variables combine to exacerbate the "sell in May and go away" conventional wisdom regarding the broader stock markets, as many brokers and promoters in our sector take their holidays during these relatively quiet months. Sometimes, even with stable or rising metals prices, shares in great companies can drop over the weeks and months just ahead, simply due to the lack of Push. Here at Casey Research, we call this Shopping Season, and it seems to have arrived early this year.

    It is never safe, however, for metals speculators to head for the Bahamas and ignore the market for months; there's always the possibility of a sudden black-swan event that kicks precious metals into a higher gear earlier than expected.

    Further, individual companies can and do buck the trends all the time. That's especially so if they're working on a discovery that could deliver game-changing results at any time, working in a country where water doesn't freeze in January, or working underground, where seasons are irrelevant.

    And I'd like to introduce you to one of those companies today.

    But What If Prices Go Lower?

    http://static.cdn-seekingalpha.com/uploads/2014/5/14/saupload_Ferrari458.pngImagine that you were offered a brand-new Ferrari 458 Italia at a 75% discount during an economic downturn.

    Even those not into high-maintenance cars would have to think about it-it could potentially be a very profitable trade.

    Now suppose you bought the car, garaged it, cared for it, waited for the car market to turn around-and then the market got even worse for a while, and you saw the same car offered for 50% less than you paid for it.

    While you might regret that you didn't time the bottom right, would you conclude that the Ferrari was worthless?

    I think you can see where I'm going here. Unless desperately short on cash for some extremely urgent need, nobody would sell our hypothetical Ferrari at a great loss; they'd simply wait out the downturn, no matter how long or painful. Whatever else might change, the Ferrari remains a Ferrari.

    Just as, whatever else happens in the economy, an ounce of gold remains an ounce of gold. And yet, when it comes to the best-of-the-best gold stocks in the junior mining sector, investors seem increasingly willing to make the mistake of dumping valuable companies, simply because they are on sale. The error here is confusing price and value-and recognizing such errors before the market does is the essence of successful speculation.

    Sales are for buying. A solid company with a deeply undervalued asset and all the cash needed to correct that mis-valuation is exactly the sort of bargain we like to buy during Shopping Season. That's the kind of opportunity I have for your consideration today.

    Regardless, and whether or not you buy the stock I recommend below, I hope you'll read the case and watch the story as it evolves, to see if I'm right about the company.

    Pretium Resources (PVG, US$7.24, PVG.TO, C$7.92, US$785.4 million market cap)

    The Pretium story is simple: a group of serially successful geologists have made an extraordinarily large and spectacularly high-grade discovery in an area called Valley of the Kings, which is part of the company's flagship Brucejack gold project in mining-friendly Canada.

    We're not talking about grams of gold per tonne (g/t) here, or even ounces, but kilos of gold per tonne in many drill intersections. And we're not talking about a small, rich "sweet spot," but a monster gold system with more than 6.6 million ounces of gold in Proven & Probable mining reserves, averaging 13.6 g/t gold, within 13.6 million ounces of gold in all resource categories, averaging 20.5 g/t gold.

    There are 1.7 million more ounces at the project's West Zone. Both zones are wide open for expansion-and are adjacent to 35 million ounces of bulk-grade gold in Pretium's Snowfield gold project (which itself is adjacent to Seabridge Gold's 63.9-million-ounce bulk-grade KSM deposit).

    To give you an idea how rare a bird this is, a recent report shows 26 gold deposits larger than one million ounces-just 26 in the entire world-that have more than 10 grams of gold per tonne of ore.

    There are only 11 such deposits above 15 g/t, which the Valley of the Kings zone beats, if you consider its 8.7 million ounces of Measured & Indicated gold averaging 17.6 g/t. To count publicly reported gold deposits that are both larger and higher grade than Pretium's Valley of the Kings, you only need one finger.

    That's right: just one.

    Pretium's Valley of the Kings is the richest gold discovery in the last 10 years, and one of the richest in recorded history.

    But that's just the beginning. A deposit this rich will pay for many faults and still make for a highly profitable mine, but there are many questions to answer before one can say so. Is there a lot of mercury, arsenic, or other toxic elements in the mix? Is there a national park or endangered species living on top of the deposit? Is the local government likely to steal the mine if one builds it?

    I don't have space in this column to deliver an entire "Casey 8 Ps" analysis of the company, but the questions above have been thoroughly addressed in the company's June 2013 feasibility study. That study is being updated in view of the company's late 2013 bulk sample, which produced almost 50% more gold than the company's estimates predicted.

    Pretium also discovered more gold veins when it went underground for the bulk sample, and is incorporating those and other new discoveries into its mine plan.

    Nevertheless, and despite what is a somewhat aggressive-at the moment-gold price assumption of $1,350 per ounce, the study yields some terrific results, including:

    • After tax net present value (NPV-5% discount) of $1.8 billion
    • After tax internal rate (NYSE:IRR) of return of 35.7%
    • Project finance payback in 2.2 years
    • Mine life of 22 years, at an annual rate of 425,700 oz. per year
    • All-in sustaining cost of $508 per oz.

    Critical point: even at an unrealistically low $800 gold price, the project still makes money (IRR of 13.7%).

    In short, this project has all the signs of a world-class, high-margin gold mine in the making, at a rate of production large enough to make Pretium of interest as an acquisition target for any of the world's major gold producers.

    That's particularly important today, because one of those major producers, Goldcorp (GG, G.TO), just lost out in a bidding war over Canada's Osisko Mining (OSK.TO). Goldcorp has shown its appetite for acquiring large, world-class assets while prices are down, and it has a good $3 billion in working capital to pursue them.

    It's hard to imagine a more attractive takeover target than Pretium-and if that happens, these shares could easily jump 20% to 30% in a day.

    That's no exaggeration; just look at Osisko's stock chart, and you'll see that it jumped more than 20% when Goldcorp made its offer last January and is close to doubling since then.

    But the beauty of the situation is that Pretium doesn't need to get bought out in order to hand us a major win; the company is fully funded for this year's work advancing the project, and even has a little cash flow coming from a small amount of (very high-grade) mining allowed under its exploration permit. Given the exceptionally high rate of return on investment the Brucejack project boasts, we think the company will be able to obtain bank and other financing to build the mine and become a highly profitable mid-tier gold mining company.

    Investors who buy now win either way, which is why this company is one of those listed in our special report, 7 Must-Own Mining Stocks for 2014, which you get free if you try a risk-free subscription to the International Speculator today.

    You can read all the details about Pretium in that report, but there's one more thing I should tell you, in case you decide not to subscribe; there's a reason besides gold's correction that these shares are selling for less than half of what they were a couple years ago.

    It's quite the drama, actually; last October, one of Pretium's consulting engineering firms (a highly respected firm in its field) quit the job abruptly. On the way out, they basically said that the Brucejack resource estimate was bogus-that the deposit wasn't really there!

    That's pretty extreme, but even more extreme was the consultants saying that, based on their statistical analysis, the Valley of the Kings bulk sample then under way should be stopped, being a waste of time and money. Management and a second consulting firm that made the resource estimate calculations (also highly respected) said they wanted to see the proof in the pudding of the bulk sample.

    And a good thing, too, because their view was fully validated by the bulk sample; instead of the 4,000 ounces the bulk sample was originally estimated to produce, the sample actually yielded 5,865 ounces of gold-and that in a toll mill in Montana, not optimized for Brucejack ore.

    Of course, that took time to show, and before the company could prove its point, a ridiculous number of ambulance-chasers announced class-action lawsuits on behalf of shareholders, and the whole circus took this formerly $17.92 stock all the way down to $3.10.

    Now, I have known management at Pretium for many years, and was dead certain they were not faking their deposit, so I doubled down. (Yes, I personally own shares in the company; I bought them after recommending the stock to subscribers, and I am not allowed to sell them before giving subscribers a chance to do so first.) Many International Speculator subscribers were able to buy shares close to the $3 mark and have more than doubled their money on those investments since then. Because I was right: the bulk sample results vindicated management-and added a significant amount of cash to the till. The company is back in the race today.

    But it's not too late to build a position in this great company with the discovery of the decade in hand. Due to gold's continuing fluctuations, the shares are still selling for not much more than they were at IPO-before the company made its record-smashing Valley of the Kings discovery.

    Remember; a Ferrari is a Ferrari, value is value, and when you can buy a high-margin $1.8 billion asset for $785 million (or US$7.24 or C$7.92 per share), that's a bargain.

    To find out more about Pretium and our six other 7 Must-Own Mining Stocks for 2014, I encourage you to subscribe to the International Speculator today. Remember that you have three full months to check out our newsletter, and if you're not happy with it, cancel any time within those three months for a full refund.

    Or, if you decide to just buy or watch the stock to test us out, that's fine too; I sincerely hope you'll make a bunch of money, and come back for more.

    Tags: PVG, gold
    May 14 7:15 PM | Link | Comment!
  • Doug Casey's 9 Secrets For Successful Speculation

    When I started working for Doug Casey almost 10 years ago, I probably knew as much about investing as the average Joe, but I now know that I knew absolutely nothing then about successful speculation.

    Learning from the international speculator himself-and from his business partner, David Galland, to give credit where due-was like taking the proverbial drink from a fire hose. Fortunately, I was quite thirsty.

    You see, just before Doug and David hired me in 2004, I'd had something of an epiphany. As a writer, most of what I was doing at the time was grant-proposal writing, asking wealthy philanthropists to support causes I believed in. After some years of meeting wealthy people and asking them for money, it suddenly dawned on me that they were nothing like the mean, greedy stereotypes the average American envisions.

    It's quite embarrassing, but I have to admit that I was surprised how much I liked these "rich" people-not for what they could do for me, but for what they had done with their own lives. Most of them started with nothing and created financial empires. Even the ones who were born into wealthy families took what fortune gave them and turned it into much more. And though I'm sure the sample was biased, since I was meeting libertarian millionaires, these people accumulated wealth by creating real value that benefited those they did business with. My key observation was they were all very serious about money-not obsessed with it, but conscious of using it wisely and putting it to most efficient use. I greatly admired this; it's what I strive for myself now.

    But I'm getting ahead of myself. The reason for my embarrassment is that my surprise told me something about myself; I discovered that I'd had a bad attitude about money.

    This may seem like a philosophical digression, but it's an absolutely critical point. Without realizing that I'd adopted a cultural norm without conscious choice, I was like many others who believe that it is unseemly to care too much about money. I was working on saving the world, which was reward enough for me, and wanted only enough money to provide for my family.

    And at the same instant my surprise at liking my rich donors made me realize that-despite my decades of pro-market activism-I had been prejudiced against successful capitalists, I realized that people who thought the way I did never had very much money.

    It seems painfully obvious in hindsight. If thinking about money and exerting yourself to earn more of it makes you pinch your nose in disgust, how can you possibly be effective at doing so?

    Well, you can't. I'm convinced that while almost nobody intends to be poor, this is why so many people are. They may want the benefits of being rich, but they actually don't want to be rich and have a great mental aversion to thinking about money and acting in ways that will bring more of it into their lives.

    So, in May of 2004, I decided to get serious about money. I liked my rich friends and admired them all greatly, but I didn't see any of them as superhuman. There was no reason I could not have done what any of them had done, if I'd had the same willingness to do the work they did to achieve success.

    Lo and behold, it was two months later that Doug and David offered me a job at Casey Research. That's not magic, nor coincidence; if it hadn't been Casey, I would have found someone else to learn from. The important thing is that had the offer come two months sooner, being a champion of noble causes and not a money-grubbing financier, I would have turned it down.

    I'm still a champion of noble causes, but how things have changed since I enrolled in "Casey U" and got serious about learning how to put my money to work for me, instead of me having to always work for money!

    Instead of asking people for donations, I'm now the one writing checks (which I believe will get much larger in the not-too-distant future). I can tell you this is much more fun.

    How did I do it? I followed Doug's advice, speculated alongside him-and took profits with him. Without getting into the details, I can say I had some winning investments early on. I went long during the crash of 2008 and used the proceeds to buy property in 2010. I took profits on the property last year and bought the same stocks I was recommending in the International Speculator last fall, close to what now appears to have been another bottom.

    In the interim, I've gone from renting to being a homeowner. I've gone from being an investment virgin to being one of those expert investors you occasionally see on TV. I've gone from a significant negative net worth to a significant nest egg… which I am happily working on increasing.

    And I want to help all our readers do the same. Not because all we here at Casey Research care about is money, but because accumulating wealth creates value, as Doug teaches us.

    It's impossible, of course, to communicate all I've learned over my years with Doug in a simple article like this. I'm sure I'll write a book on it someday-perhaps after the current gold cycle passes its coming manic peak.

    Still, I can boil what I've learned from Doug down to a few "secrets" that can help you as they have me. I urge you to think of these as a study guide, if you will, not a complete set of instructions.

    As you read the list below, think about how you can learn more about each secret and adapt it to your own most effective use.

    Secret #1: Contrarianism takes courage.

    Everyone knows the essential investment formula: "Buy low, sell high," but it is so much easier said than done, it might as well be a secret formula.

    The way to really make it work is to invest in an asset or commodity that people want and need but that for reasons of market cyclicality or other temporary factors, no one else is buying. When the vast majority thinks something necessary is a bad investment, you want to be a buyer-that's what it means to be a contrarian.

    Obviously, if this were easy, everyone would do it, and there would be no such thing as a contrarian opportunity. But it is very hard for most people to think independently enough to risk hard-won cash in ways others think is mistaken or too dangerous. Hence, fortune favors the bold.

    Secret #2: Success takes discipline.

    It's not just a matter of courage, of course; you can bravely follow a path right off a cliff if you're not careful. So you have to have a game plan for risk mitigation. You have to expect market volatility and turn it to your advantage. And you'll need an exit strategy.

    The ways a successful speculator needs discipline are endless, but the most critical of all is to employ smart buying and selling tactics, so you don't get goaded into paying too much or spooked into selling for too little.

    Secret #3: Analysis over emotion.

    This may seem like an obvious corollary to the above, but it's a point well worth stressing on its own. To be a successful speculator does not require being an emotionless robot, but it does require abiding by reason at times when either fear or euphoria tempt us to veer from our game plans.

    When a substantial investment in a speculative pick tanks-for no company-specific reason-the sense of gut-wrenching fear is very real. Panic often causes investors to sell at the very time they should be backing up the truck for more.

    Similarly, when a stock is on a tear and friends are congratulating you on what a genius you are, the temptation to remain fully exposed-or even take on more risk in a play that is no longer undervalued-can be irresistible. But to ignore the numbers because of how you feel is extremely risky and leads to realizing unnecessary losses and letting terrific gains slip through your fingers.

    Secret #4: Trust your gut.

    Trusting a gut feeling sounds contradictory to the above, but it's really not. The point is not to put feelings over logic, but to listen to what your feelings tell you-particularly about company people you meet and their words in press releases.

    "People" is the first of Doug Casey's famous Eight Ps of Resource Stock Evaluation, and if a CEO comes across like a used-car salesman, that is telling you something. If a press release omits critical numbers or seems to be gilding the lily, that, too, tells you something.

    The more experience you accumulate in whatever sector you focus on, the more acute your intuitive "radar" becomes: listen to it. There's nothing more frustrating than to take a chance on a story that looked good on paper but that your gut was warning you about, and then the investment disappoints. Kicking yourself is bad for your knees.

    Secret #5: Assume Bulshytt.

    As a speculator, investor, or really anyone who buys anything, you have to assume that everyone in business has an angle. Their interests may coincide with your own, but you can't assume that.

    It's vital to keep in mind whom you are speaking with and what their interest might be. This applies to even the most honest people in mining, which is such a difficult business, no mine would ever get built if company CEOs put out a press release every time they ran into a problem.

    A mine, from exploration to production to reclamation, is a nonstop flow of problems that need solving. But your brokers want to make commissions, your conference organizers want excitement, your bullion dealers want volume, etc. And, yes, your newsletter writers want to eat as well; ask yourself who pays them and whether their interests are aligned with yours or the companies they cover.

    (Bulshytt is not a typo, but a reference to Neal Stephenson's brilliant novel, Anathem, which defines the term, briefly, as words, phrases, or even entire books or speeches that are misleading or empty of meaning.)

    Secret #6: The trend is your friend.

    No one can predict the future, but anyone who applies him- or herself diligently enough can identify trends in the world that will have predictable consequences and outcomes.

    If you identify a trend that is real-or that at least has an overwhelming amount of evidence in its favor-it can serve as both compass and chart, keeping you on course regardless of market chaos, irrational investors, and the ever-present flood of bulshytt.

    Knowing that you are betting on a trend that makes great sense and is backed by hard data also helps maintain your courage. Remember; prices may fluctuate, but price and value are not the same thing. If you are right about the trend, it will be your friend. Also, remember that it's easier to be right about the direction of a trend than its timing.

    Secret #7: Only speculate with money you can afford to lose.

    This is a logical corollary to the above. If you bet the farm or gamble away your children's college tuition on risky speculations-and only relatively risky investments have the potential to generate the extraordinary returns that justify speculating in the first place-it will be almost impossible to maintain your cool and discipline when you need it.

    As Doug likes to say; it's better to risk 10% of your capital shooting for 100% gains than to risk 100% of your capital shooting for 10% gains.

    Secret #8: Stack the odds in your favor.

    Given the risks inherent in speculating for extraordinary gains, you have to stack the odds in your favor. If you can't, don't play.

    There are several ways to do this, including betting on People with proven track records, buying when market corrections put companies on sale way below any objective valuation, and participating in private placements. The most critical may be to either conduct the due diligence most investors are too busy to be bothered with, or find someone you can trust to do it for you.

    Secret #9: You can't kiss all the girls.

    This is one of Doug's favorite sayings, and though seemingly obvious, it's one of the main pitfalls for unwary speculators.

    When you encounter a fantastic story or a stock going vertical and it feels like it's getting away from you, it can be very, very difficult to do all the things I mention above. I can tell you from firsthand experience, it's agonizing to identify a good bet, arrive too late, and see the ship sail off to great fortune-without you.

    But if you let that push you into paying too much for your speculative picks, you can wipe out your own gains, even if you're betting on the right trends.

    You can't kiss all the girls, and it only leads to trouble if you try. Fortunately, the universe of possible speculations is so vast, it simply doesn't matter if someone else beats you to any particular one; there will always be another to ask for the next dance. Bide your time, and make your move only when all of the above is on your side.

    Final Point

    These are the principles I live and breathe every day as a speculator. The devil, of course, is in the details, which is why I'm happy to be the editor of the Casey International Speculator, where I can cover the ins and outs of all of the above in depth.

    Right now, we're looking at an opportunity the likes of which we haven't seen in years: thanks to the downturn in gold-which now appears to have subsided-junior gold stocks are still drastically undervalued.

    My team and I recently identified a set of junior mining companies that we believe have what it takes to potentially become 10-baggers, generating 1,000%+ gains. If you don't yet subscribe, I encourage you to try the International Speculator risk-free today and get our detailed 10-Bagger List for 2014 that tells you exactly why we think these companies will be winners. Click here to learn more about the 10-Bagger List for 2014.

    Whatever you do, the above distillation of Doug's experience and wisdom should help you in your own quest.

    The article Doug Casey's 9 Secrets for Successful Speculation was originally published at caseyresearch.com.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: gold, speculate
    Mar 17 3:30 PM | Link | Comment!
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