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Marin Katusa
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Marin Katusa, who works with Casey Research (http://www.caseyresearch.com/), is an accomplished investment analyst who specializes in the junior resource sector. He left a successful teaching career to pursue analyzing and investing in junior resource companies. In addition, he is a member of... More
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  • Unconventional Investing For Unconventional Times

    What is Casey's Club?

    Let me first share the evolution of Casey Research and why I think if you're a serious speculator, you need to be part of Casey's Club.

    A little over a decade ago, I was a Casey subscriber. At the time, there was only the International Speculator, and the firm was made up of only Doug Casey and David Galland.

    But as I got to know the power players in the industry, I learned that the savvy speculators made their millions investing via private placements (PPs) and clip and collect warrants.

    Out of the gates, investors in PPs have an advantage over investors who buy in the open market. First off, you pay no buying commission to your broker when you buy via a private placement. More important, by buying into a PP, the investor gets exposure to warrants.

    A warrant is essentially the right to buy a stock for a predetermined period of time at a fixed cost.

    In the Casey Energy Confidential, we recommend both buying in the open market and private placements.

    In an energy market where investors are getting slaughtered, we made money in 2014. How? Warrants. And we don't even include the warrants in our portfolio performance until the warrant position is sold and gains are realized.

    In 2014, I sent out 59 alerts to Casey Energy Confidential subscribers.

    Let's use an example of a stock we made great money on in 2014.

    On October 29, 2013, I sent out an alert for subscribers to buy Blackbird Energy (BBI.V) in the open market under C$0.06 or in the private placement.

    The PP units were priced at C$0.09 with a full, five-year transferable warrant priced at C$0.15.

    Here's a video with the president of Blackbird Energy, Garth Braun, for everyone to see not only the current success the company has achieved, but how Casey Research was the first firm to initiate coverage on Blackbird Energy.

    In the summer of 2014, Garth boarded a bus with other industry experts, including Frank Holmes, Stephen Quin, Marcel de Groot, Nolan Watson, Amir Adnani, Paul Matysek, and many others, along with many Casey's Club members, for a day trip that I organized to two operating mines in British Columbia.

    During this trip, I put together a booklet of every company and president who joined me on the bus trip that day.

    The Casey's Club members who joined the trip literally got to sit beside and watch the best in the business talk about their companies, their goals and challenges, and most important, got to know the key players in the industry.

    I put together that trip not because it's my job, but because I love this business, and it was a fun way to spend a Saturday in the summer.

    Now, the only oil and gas executive I invited on this specific trip was Garth Braun, and as with all the executives, I called up Garth and asked him to give his pitch to everyone on the bus.

    I stated while on that bus that I believe Garth's company, Blackbird Energy, would at least double, and everyone should consider investing in it. I clearly explained that we took a big chunk of the late-2013 financing, and our subscribers made over 300% gains in a choppy market, including the warrants.

    Garth's stock went up over 100% shortly after that bus trip, and the only people on the bus who had heard of the company were the Casey's Club members who read the Casey Energy Confidential alert in late 2013, and the subsequent updates.

    I think BBI will go higher, for all the reasons you will see on the video link above.

    Our Casey Energy Confidential subscribers made a good score on an early-stage oil company in a market where energy stocks have suffered.

    When you join Casey's Club, you get access to all of my favorite PPs that Doug and I are writing checks for at the same price as not only us, but other industry experts. This is how retail investors, stock brokers, and fund managers can get exposure to what I'm doing in the resource sector.

    Some may look at what Casey's Club costs and think it's pricey. I see it as completely the opposite. I would have paid many times the price a decade ago to have access to what Rick Rule, Doug Casey, and other industry experts are doing with their own money.

    It didn't exist then, so I started including the best available private placements in addition to the other services the alerts provide. The first newsletter in the world to recommend participating in PPs in the junior resource sector was mine, which I started in 2007.

    If you're a serious speculator, I believe you owe it to yourself to try out Casey's Club and see what I'm doing. The markets are awful, but it's your choice if you want to make the markets work to your advantage and get exposure to full five-year warrants like the Blackbird example above.

    You may think you're a contrarian, but to succeed you need to take action, and I'm offering you a chance to get in on the deals that I am doing, at the same price.

    It's your portfolio, so do yourself a favor and try it out.

    Tags: investing, energy
    Feb 10 12:38 PM | Link | Comment!
  • Was This American Hero Actually A Soviet Spy?

    Fact: He was rich, controversial, and his father was a communist.

    Fact: He also built one of America's leading oil companies.

    Moreover, he was a major shareholder and director of a company whose main product-an orange box of baking soda-was a staple in every American fridge, and whose name mirrored his own.

    The man I'm referring to is Armand Hammer. He had no immediate connection to the company, Arm & Hammer; it was in fact created 30 years before one of America's greatest oil tycoons was even born. But Armand was as un-American as could be.

    Though he later claimed he'd been christened after a character in an Alexandre Dumas novel, Armand Hammer was actually named for the hammer-and-sickle symbol of the USSR and the Socialist Labor Party of America, in which his father had a leadership role.

    Armand Hammer sought to buy the company only because he was so often asked if he owned it. He's quoted as saying: "I offered to buy it so I could say yes. But the owners didn't want to sell."

    Booze, Drugs, and Wheat

    Armand Hammer was born in New York in 1898 to Ukrainian-Jewish parents who emigrated from Odessa (then still a part of the Russian Empire) in 1875. They settled in the Bronx to run drugstores and a general medical practice.

    Armand attended Columbia University Medical School and graduated in 1918 with the intent of helping out with the family business, Good Drug Co. His first foray into a business of his own was a highly profitable one: producing and selling an alcoholic solution of ginger, which was extremely popular during the Prohibition era due to its ability to act as a highball ingredient. By his graduation in 1921, the booze business had made Armand a millionaire several times over, and he would revisit it again several decades later, with the same success.

    After he graduated school, Armand traveled to the Soviet Union. The actual intent of his trip is still debated. He claimed he only went to Russia to recoup a debt for drugs that he shipped, but he stayed for a decade after he realized the kind of money that could be made by selling wheat to famine victims.

    Over that time, he supplied the Soviet Union with more than 1 million tons of grain, which was enough to earn him several in-person meetings with Lenin himself. The Soviet leader personally persuaded the young Armand to stay in Russia so that the country could benefit from his business acumen.

    Armand was able to establish many ventures. A concession obtained from the Bolsheviks to manufacture pencils was one of his most successful, as the Russians weren't able to duplicate the quality and economics of his operations.

    He also earned the exclusive rights to represent some of the largest companies in America, including US Rubber, Allis-Chalmers, and Ford.

    Russian Jewels and Middle Eastern Oil

    Armand lived in a Moscow mansion for 10 years before Stalin came to power and kicked out all foreigners. He used the time to greatly expand his business network, and he even married Russian Baroness Olga von Root. That gave him entrée into the elite White Russian community-and access to some of the country's greatest treasures.

    He returned to the United States with a lot more money, but also with the Romanov crown jewels, which he'd obtained through his growing connections with the cream of Russian society. The gems proved to be invaluable, as he sold them off to raise capital for his post-Prohibition ventures (from art to whiskey to counterfeit Fabergé eggs). Some of the jewels went to Egyptian King Farouk, a good friend to whom he eventually became a financial advisor.

    This proved to be a key relationship, because King Farouk funded the secretive and influential Muslim Brotherhood with state funds. The Muslim Brotherhood is a powerful organization that elevated Khomeini in Iran and Kaddafi in Libya. Years later, Armand's link to Farouk helped him greatly in obtaining Libyan oil assets, one of the main drivers of his oil empire.

    Occidental Petroleum and the Gore Family

    Yes, that Gore family. First it was Al Gore Sr., and then later Al Gore Jr., the latter of whom claimed to invent the Internet and is now saving the world from Global Warming-what a guy!

    Armand retired in 1956, ostensibly to take a much-needed break from traveling and working, but that didn't last long. Less than a year later, he was approached by an old acquaintance to drill two oil wells in Bakersfield, California. The wells were situated in acreage adjacent to the struggling Occidental Petroleum Corp. Both wells hit oil and despite having no experience in the industry, Armand quickly bought shares in the neighboring Occidental, becoming its CEO and eventually chairman of the board.

    Hammer was able to capitalize on his relationship with the Gore family, but not initially because of oil. It was actually at a cattle auction in the 1940s where he first met Al Gore Sr., a US representative from Tennessee who'd go on to become a senator.

    The two partnered to raise and sell cattle, and they prospered mightily at it. But this was just the beginning of a long and interesting relationship between Armand and the Gores. When zinc was discovered on some land the Gores owned, Occidental bought the acreage but eventually sold it back, retaining just the mineral rights in a transaction that wouldn't be accepted by shareholders today. In turn, Al Sr. sold the land to Al Jr., who would benefit from the yearly mineral royalties for years to come.

    This isn't the only example of Occidental buying the Gores' favor; the biggest payoff came in 1965. With Al Sr. arranging for Armand to obtain the necessary visas and his Egyptian connection providing an introduction to King Idris, Hammer traveled to Libya, where he was looking to obtain oil concessions.

    He wasn't given much of a shot. Tiny Occidental's resources were no match for the power of the Seven Sisters oil giants, which at the time ruled the industry.

    Against all odds, though, Hammer got the concessions through finely targeted bribery of Libyan officials and one final, brilliant move: he promised that Occidental would drill wells to bring water to the King's parched ancestral village.

    Deal done-and it proved a blockbuster. In 1967, Occidental poked one of its drills into a vast sea of oil. It was the first of the several elephant discoveries that would transform the company into an international oil power and Hammer into a major player on the world stage.

    Meanwhile in the political sphere, favors do get repaid. When Gore Sr. left the Senate after a failed reelection bid in 1970, he joined the board of Occidental and took a cushy $500,000 a year job as head of Island Creek Coal, a company subsidiary.

    Interesting how Al Gore Jr. kept that inconvenient truth out of his "doculiary," An Inconvenient Truth.

    Even after Hammer was gone, Occidental gave $50,000 to the 1996 Democratic campaign after a solicitation call from Albert Gore Jr, and another $100,000 after then-CEO Ray Irani spent a couple of nights in the Lincoln Bedroom at the White House.

    Hammer became close to Al Jr. over the years and in 1984, he helped him win the Tennessee Senate seat formerly held by his father. Armand allegedly promised Al Sr. that he could make his son the president of the United States. But the Bushes-another family with oil connections-got in the way on that one.

    But the old favors definitely came in handy when Occidental sought to obtain drilling rights in the Elk Hills of central California. The region was home to 100 sacred burial sites of the Kitanemuk Indians, not to mention inhabited by many animals on the endangered species list.

    In any other situation, this type of acreage would be untouchable. But even eight years after Hammer's death, Vice President Gore honored his debt to Occidental by recommending that Elk Hills be sold as part of his National Performance Review program. An environmental assessment was prepared in record time and in 1998, Occidental purchased 47,000 acres from the federal government for a cool $3.65 billion, tripling the company's reserves.

    Not all was smooth sailing, though. As far back as 1919, FBI Director J. Edgar Hoover had opened a file on Hammer, believing him to be a Soviet agent. He may not have been-at least not officially-but there's no question the Russians valued him greatly. Lenin himself issued orders to "make note of Armand Hammer and in every way help him on my behalf if he applies." He added an admonition to keep the relationship secret lest there be a "fatal effect" on Hammer. Armand in turn deemed Lenin "a very warm and human person."

    So what exactly did the American do for them? Researcher Edward Jay Epstein, in his book Dossier: The Secret History of Armand Hammer, argues that he was a financial errand boy for the Soviets, a conduit through which Moscow could finance espionage and subversion abroad. Hoover claimed to know that Hammer helped finance Communist International agents. The G-man delayed moving on his target for a long time, however, believing that it was better to keep him under surveillance. "It is often more profitable not to arrest a detected courier" when you might be unable to identify his replacement, Hoover maintained.

    In the 1960s, Hoover was finally prepared to go after Hammer but was dissuaded by-who else?-Senator Gore. The oily aspects of US politics.

    Armand's Legacy

    Whether or not Armand was a Soviet spy, a Socialist pawn laundering money, or a brilliant rogue mastermind worthy of a role as a James Bond villain, he was surely not the simple man of commerce often portrayed in the press. However, there is no denying his business acumen and his ability to build relationships and networks. He said it best when asked to describe his career: "I am first and foremost a catalyst; I bring people and situations together."

    Armand was already a millionaire many times over when he took a punt on Occidental for $100,000 as a tax shelter at the age of 59. By 1986, after almost 30 years at the helm, he turned the once-bankrupt company into the eighth-largest oil company in the United States, with revenues of almost $16 billion per year. While Armand was a magnate with his fingers in ventures high and low, energy emerged as his true love. Though he came to it late in life, he found it "more exciting, more interesting, more complex, riskier and more rewarding than any other business I had encountered."

    He died on December 10, 1990, at the age of 92 and was chairman of Occidental till that day. The company is still a major player in the international oil circuit but has definitely lost some of its luster since the passing of Armand Hammer.

    It's characters like this who make the impossible possible. Controversial and complex entrepreneurs who have built massive natural resource companies out of nothing. The oil patch is full of such colorful characters, and we know many of them. It might be a Lukas Lundin, going where no other man will go, in order to build up a deposit. Or Ross Beaty, whose life story could easily make him one of the heroes of Atlas Shrugged. These are the types of industry leaders who make the discoveries that bring outsized rewards to their shareholders. I don't have enough time today to cover them all, but I will in the coming months of the Casey Energy Report. Many of these resource barons are personal friends and business associates of mine, so you will get all the secret goods.

    Investing in resources is all about investing in the right people. I watch them very closely. I travel with them. I speak at their family and office events. But most important, I invest with the best in the business.

    If you want to know more, try out my Casey Energy Confidential alert service.

    This service is only for serious investors who are active resource speculators. It is not for everyone. It's expensive, but the best things usually are. Try it out. I know you will like it.

    Tags: oil, russia
    Feb 03 12:20 PM | Link | Comment!
  • 199 Days Of Hell

    Just after I signed the publishing agreement for my first book, The Colder War, I realized how much research I was going to end up doing, specifically in areas that I never thought would be so integral to my subject area: energy and mining. Along the way, I came across some fascinating events that were completely out of my area of expertise but gave me a better sense for the unintended consequences in an historical perspective of the events that led to where we are today.

    One epic event that really stood out for me, which I will discuss today, is the bloodiest battle of all time, to my knowledge. Over 2 million soldiers and civilians died in this one battle that lasted 199 days from start to finish. (If you know of one particular battle-not a war-that had more deaths, please email me at info@caseyresearch.com.)

    What was the catalyst for the bloodiest and most horrible battle of all time? Oil. Before I get into why it was, I want to present the events that led up to this epic battle.

    In 1939, Hitler and Stalin signed the German-Soviet Nonaggression Pact. Hitler focused on Western Europe and on defeating France by the mid-1940s, he became rattled by Soviet expansion in the East, which by this time included the occupation of the Baltic states (now Estonia, Latvia, and Lithuania) by the Soviets.

    The Day That Changed the World

    A critical, often forgotten event (especially by the French) occurred on June 22, 1940. That was the day the French surrendered to the Nazis and signed the armistice. Four days later, the Soviet Union made a decision that ended up becoming one of the critical turning points of WW II.

    Initially, the Soviets planned on annexing parts of Romania via full-scale invasion. Sound familiar? I'll touch on Crimea later in my missive, but for now, stick with me-this gets very interesting.

    However, the military masters of the Soviet Union recognized that with the fall of France, out went the French guarantee of security at Romania's borders.

    So rather than actually invading Romania, the Soviets sent an ultimatum to Romania: withdraw from our territories of interest-which were Northern Bukovina and Northern and Southern Bessarabia-and avoid military conflict with the Soviet Union. If not, the Red Army will invade.

    Germany via the 1939 German-Soviet Nonaggression Pact recognized the Soviet Union's interest in Bessarabia; thus Hitler became paranoid about the Soviet Union's expansion from the east to Central Europe. But more specifically, Hitler feared the proximity of the Russians to the Romanian oil fields, which the Nazis depended on.

    By early August 1940, these territories that Romania withdrew from made up the Moldavian Soviet Socialist Republic, and they were quickly folded into the Soviet Union.

    By late 1940, Hitler made the decision that I believe was a critical turning point of WW II. Initially, Hitler planned on invading the Soviet Union in May 1941, but Yugoslavia and Greece got in his way, and his plans were delayed by five weeks until the Nazis defeated those armies in the Balkans.

    The Russian winter came early in 1941, but Hitler believed that the Nazi Germany army was much superior to the Red Army (and they were more superior at the time) and that the Soviets would be defeated before November 1941.

    The Nazis sent 3 million soldiers. Stalin met the Nazi offensive with over 5 million Soviet soldiers. I don't know of a larger invasion in the history of mankind.

    To put this battle in perspective, it's the equivalent of battle lines spanning from Florida to New York (over 1,100 miles). Also, over 90% of all Nazi casualties in WW II were due to their invasion of the Soviet Union.

    By late July 1941, the Nazis fought their way within 200 miles of Moscow; by this time, they had progressed over 400 miles into the Soviet Union in less than a month.

    Initially, the Germans made incredible progress. However, heavy rains in early July hampered their speed as the terrain became a mud bath, and by this point, Stalin ordered a scorched-earth policy, where the Soviet troops destroyed all infrastructure, burned all crops, and dismantled and evacuated all factories and equipment via rail to the east upon the Nazi advance.

    As winter set in, the progress of the Nazis came to a standstill. On December 7, 1941, Japan bombed Pearl Harbor and subsequently, the United States joined the Allies and entered WW II.

    Hitler was well aware that the biggest priority of the Americans upon entering WW II was to defeat the Nazis. He knew he had to bring a quick defeat to the Soviet Union and drastic measures had to be taken.

    Hitler believed that rather than attacking Moscow (the heavily fortified capital of the Soviet Union), Germany should go after the Soviet oil fields in the Caucasus. For Hitler, the victory would result in a triple positive for Germany:

    1. Cut off the flow of oil to the Soviet resistance;
    1. Divert the oil produced from the oil fields in Caucasus for the Nazi cause and for future battles against the Americans; and
    1. Cut off Soviet access to the breadbasket areas of Ukraine.

    To execute Hitler's plan, the Nazis would have to control a key industrial city, which happened to be named after Soviet leader Joseph Stalin: Stalingrad (today known as Volgograd).

    The Nazis invaded, and Stalin threw everything the Red Army had at this battle, even refusing to allow the civilian population to be evacuated. He believed the soldiers would fight to their death if civilians were in the city.

    He was right. Stalin's ruthless orders worked. The Red Army, including civilians who worked in factories made up of men and women of all ages, put up a ferocious resistance doing whatever possible. The Germans had superior weapons, training, and land and air support. To put things in perspective, the average Soviet soldier, upon arriving to Stalingrad, had less than one day's life expectancy.

    The battle eventually evolved into concrete guerilla warfare within the city ruins. The Nazis captured 90% of the city by September 1942 and by this time, they took over 3 million Soviet prisoners of war, most of which never returned alive.

    The Soviets' luck changed on November 19, 1942, when they decided to launch Operation Uranus, which many at the time within the Red Army believed would be their last chance to defeat the Nazis. With 90% of Stalingrad under Nazi command, the Soviet plan was to swing multiple army troops around the Nazis and surround them. It worked.

    Up to this point, Hitler publicly made announcements that the Germans would never leave Stalingrad. For most of the German soldiers, this proved to be true.

    Rather than having the German troops attempt a breakout (and going against Hitler's promise of Germany never leaving Stalingrad), they were ordered to fight, even though they were running low on ammunition and starvation had set in within the German camp.

    On January 31, 1943, German Field Marshal Friedrich Paulus surrendered to the Soviets.

    After the Nazi defeat in Stalingrad by the Soviets, it was only a matter of time before Germany lost the war. Hitler never got access to the oil fields, and over 2 million soldiers died.

    Déjà Vu and the Butterfly Effect

    Let's reflect back to the events that followed. Hitler became paranoid about the Soviet expansion after the signed 1939 German-Soviet Nonaggression Pact.

    Remind you of anything?

    We see NATO today supplying military troops and land and air force in the Baltics for similar fears about Russian expansion. NATO sees Crimea today as a reminder of the Baltics' situation in 1940.

    Ukraine is not in a civil war-let's make that very clear. A civil war is defined as two or more groups fighting for control of the government. What's going on in eastern Ukraine is not a civil war, but rather a war of secession; the two breakaway provinces don't want to go to Kiev. Furthermore, NATO will not stand for a secession.

    Putin is facing sanctions from the West and military force by NATO… not to mention that oil has dropped in half from over $100/bbl to under $50 a barrel in the last 12 months.

    Hitler's decision, based on actions that essentially involved a small territory (now known as Moldova) sandwiched between Romania and Ukraine, resulted in the bloodiest battle of all time.

    But behind the scenes there is always tension and momentum building and waiting for a catalyst to release the pressure that has built up. We have seen this many times in the past where an insignificant event on the global stage puts in motion events with shocking results. But there is always more behind the story than a "simple" catalyst or unconnected events.

    The Arab Spring eventually brought to the global front a built-up dissatisfaction of many youths and lower-income people of human rights violations, dictatorships, absolute monarchy, extreme poverty, and many other factors. The catalyst for the protests in Tunisia was the self-immolation of Mohamed Bouazizi in 2010.

    I recall a specific event I experienced in Kuwait in December 2010, where a Pakistani taxi driver shared with me his story of anger and contempt with the government of Kuwait. I asked him to be my driver for the week, mainly because he spoke English and had been in Kuwait for 10 years and knew his way around, but I also enjoyed his company.

    But I got much more than I expected. He took me around Kuwait, where I saw the good, the bad, and the ugly. Every city in the world has those areas you will never see advertised in the travel guidebooks.

    Kuwait-a "dry country," meaning you cannot buy alcohol-wasn't that difficult to find alcohol in if you really wanted it. Yet at what seemed to me to be every hour on the hour, I heard prayers blasting through the air. My taxi driver wasn't an extremist; he was Muslim-and no different than any Catholic, Jew, or atheist-working his cab 12-15 hours a day, wanting a better life for his family. He was a good guy, caught up in the momentum that was building, which led to the Arab Spring.

    The spread of the Arab Spring was muted by high oil prices. That is fact, though not a popular one.

    How did Saudi Arabia prevent protests in its kingdom? The House of Saud promised tens of billions of dollars in social programs.

    How will the oil-producing nations, such as members of OPEC, Russia, Canada, and Mexico, fare at $45 oil in 2015? How will the African petro-states function?

    How will the investors, who are exposed to billions of dollars of debt in the US energy sector (below is the payment schedule of all public companies' debt payments due over the next 11 years), going to fare if oil stays below $50 in 2015?

    History doesn't repeat, but human nature has a repeatable pattern. The growth for energy will only increase in the future, even with energy efficiency improvements.

    The fact is, the world will consume more oil in five years than it does today… even though I get many emails a day from uninformed individuals telling me why fossil fuels are awful (and yes, to the 100+ people who have emailed stating that Tesla cars will kill the need for oil-keep on dreaming. And by the way, your Tesla is on average powered over 50% by coal and natural gas-so you all are absolute hypocrites).

    The world still needs uranium to power its nuclear base-load power, such as the US, which is currently the world's largest consumer of uranium, using about 25% of the world's uranium. China won't be far behind, and it's catching up quickly.

    You Need to Be Brave When Everyone Is Fearful

    Investing isn't easy. If you want to do well in cyclical sectors, such as energy or mining, you must be able to buy when the sector is unloved and beaten down. Unfortunately, from a psychology standpoint, it's easier to buy when it feels good.

    Here is a list of rules of speculation I like to follow:

    1. Never put more than 10% of your speculative portfolio into any one stock. True success in speculation is only achieved with risk mitigation and letting your winners ride. While putting all your eggs in one basket theoretically can pay off in a big way, it rarely does so in reality. If your speculative portfolio is worth $50,000, don't put more than $5,000 into any one junior.
    1. If, for whatever reason, an investment causes you stress to the point that you cannot sleep or are overly distracted from your daily life, sell enough stock to alleviate the situation. Life is too short. Have fun. If your stress level becomes intolerable, you're either overinvested or speculating just isn't for you. That's okay; you've found out more about yourself. Speculation is a journey where the reward is money and the experience, but it's not for everyone. If your wife, husband, family, or partner is hating you because you lost the family's vacation money, look back to Rule 1.
    1. Know what you own and why you own it. The Casey Energy Report posts all relevant news about the companies in our portfolio every Monday and Thursday after market close.
    1. Use trailing stops and stop losses. For liquid stocks, they're important, in my opinion. We work to create for you a balanced portfolio of high-risk speculations along with mid-risk and lower-risk yield plays, and we lock in gains along the way.

      The current market is exciting but carries a significant level of volatility. We want to be able to capture the upside and hold on to it, which is best accomplished by locking in gains with trailing stops (we did this very well earlier in 2014). Then we can sit patiently on the sidelines and await a general correction that allows us to get back into our favorite stocks, which we are currently doing.

      There's a big difference between a trailing stop and stop loss. A stop loss limits losses. It's the price you set to sell your stock in case the trade goes south on you. A standard stop loss is a sell order that's automatically triggered if the security falls 20% (or whatever you put in for your stop-loss percentage) below your purchase price. For example, if you bought a stock for $10 and you put in a 20% stop loss, it would be $8, at which point you would lose $2. Unfortunately, stop losses (and trailing stops) don't work for illiquid juniors, so be careful. That's why Rule 3 above is so important.

      A trailing stop locks in your gains. Let's say you paid $10 for a stock, and it goes to $14. If you'd be happy to sell at $13 and pocket $3 per share in profit, then that's where you set your trailing stop, in case the price retreats to that level. Of course, if the stock continues to push higher, you can always move your stop along with it, to capture even more profit.

      Many of our trailing stops were hit in early to mid-2014, a good indicator that we've been right to be careful amid this market's volatility.

    1. Give your speculation some time to play out, as with trends like the European Energy Renaissance. Such speculations demand that the investor wait for the market to catch on to the potential. This one specific rule-be patient-is probably the most difficult of all to stick to. A speculator is his or her own worst enemy.
    1. Risk mitigation. Reduce your risk while preserving profit by using the Casey Free Ride formula when the opportunity arises. It's prudent speculation.

    Getting Your Casey Free Ride

    Number of shares to sell =

    Purchase price of stock

    x Number of shares bought

    Stock price when you want to sell

     

    1. Know that you'll make mistakes, and that will result in losing money on that trade. Not every trade will be a winner. But if one or two of the junior high-risk speculations work out, they will make the whole journey more than worthwhile. I'm speaking from personal experience.

    This is just a short list of many of the rules to speculation.

    With oil at $45 per barrel, could there be massive changes that many aren't expecting?

    Definitely.

    If you've been a subscriber of mine, you know how cautious I've been since early to mid-2014 on the price of oil.

    What's Next in the Energy Sector?

    In the past four months, I've personally invested more cash than I have in the last four years. Could I be wrong? You bet I could, but this is not my first downturn.

    I also believe in not owning too many positions, as I don't have many positions either personally nor in the Casey Energy Report. I follow a very disciplined approach, and my style isn't for everyone. I'll be the first to acknowledge that fact.

    If you're looking for a newsletter that recommends a stock every month on the month and has 50 stocks in its portfolio, I'm not your guy.

    But if you're looking for in-depth research, experience, and exposure to my vast network in the resource sector, then you may want to pay attention to what I'm doing.

    There's blood in the streets in the energy sector-and I love that!

    Now if you believe that to be successful in the resource sector one must be a contrarian to be rich, as I do, now is the time to become engaged.

    Come see what I am doing with my own money. You'll get access to every Casey Energy Report newsletter I've written in the last decade, and my current recommendations with specific price and timing guidance. It's all available right here.

    I can't make the trade for you, but I can help you help yourself. I'm making big bets-are you ready to step up and join me?

    Tags: oil
    Jan 30 2:18 PM | Link | Comment!
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