Two of our good friends and colleagues (Tom Dyson and Brian Hunt) just told us about a Chinese small stock that's getting ready to take off...
What's so fascinating isn't so much that this stock has a track record of periodically shooting up by as much as 320-times in value...
What's really interesting (to us at least)...is how Tom and Brian have been finding small top stocks 2010 like this one.
Typically, I stay behind-the-scenes...
But this idea is too good - and too important on a personal level - not to share it with you myself.
My name is Brian Hunt.
I'm the Editor in Chief of Stansberry & Associates Investment Research.
Late last year, my colleague, Tom Dyson, and I discovered a new and unconventional way to generate unusually high returns in this extremely volatile market.
(So far, we've had an 83% success rate.)
We expect that this radical technique will continue to perform at this level for approximately the next 12-18 months.
Then, like all great investment strategies, the time will pass.
That is why, on June 16th, we will begin publishing our insights for the general public.
I'm writing you today because from now until then, we're offering loyal readers first crack at membership � at a substantially reduced price, which we will never offer again.
Because our new research involves many of the smallest and most illiquid securities on the stock exchange...
We're limiting charter membership to what will most likely be a small group of folks.
But I'm getting ahead of myself...
Let me show you what's going on, why we're so excited at S&A Research... and what's in it for you...
As I mentioned, about 9 months ago, my colleague, Tom Dyson, and I discovered a radically new way to make money in the stock market...
We call it "BLUE SHEETING."
In more than 12 years of active trading, I've never seen anything quite like it.
When this strategy works, it's not uncommon for you to see returns of 1,000-3,000% (or more):
Phoenix Companies (PNX) shot up 1,000% in 2 months.
Diedrich Coffee (DDRX) jumped 6,533% in less than 2 months.
Sealy Corp (ZZ) rose 927% in 65 days.
So far, our "BLUE SHEETING" strategy has worked 83% of the time.
I'll show you the full details of our preliminary testing a bit later...
But first...
While most analysts look at things like earnings statements, balance sheets, insider buying and cash flow statements...
Tom and I examine a completely different set of data:
It's called a BLUE SHEET.
Several decades ago � before the Internet came along � secretaries at financial clearing firms would type these data-sets onto pale blue forms.
Hence the name, "Blue Sheets."
This is not a Form 4, Form 13, or any other financial document you might be familiar with. And it has nothing at all to do with "insider buying" or the government either.
So what's so important about BLUE SHEETS?
The best way to show you is through an example...
Recently, shares of a tiny paper company called Boise Inc. (BZ) shot up 936% in just under 2 months.
Most investors didn't have the slightest clue this was coming...
After all, Boise Inc. manufactures newsprint � the large rolls of paper used by the Washington Post, the Seattle Examiner, and other newspaper publishers.
Now is not a good time to be doing anything related to the newspaper business.
Just last month, Boise Inc. announced it was shutting down half its news-printing capacity at one plant.
That's pretty much the only news of any kind to come from this tiny company in several months.
So you can probably see why many people who follow the markets were surprised to see shares of Boise Inc. take off like a surface-to-air missile.
While this stock blindsided most investors... you could have seen it getting ready to move.
You could have seen this rise far enough in advance to have made a tremendous amount of money...
Here, take a look:
On March 10th, we were able to access certain figures in the company's Blue Sheet "stock buyer" data, indicating a very big upward move was on the way.
Boise's stock began to rise on March 12th.
Had you invested $5,000 then... you'd be sitting on $48,000 today.
What in the world would cause a tiny paper stock in Boise, Idaho to rise 936% in two months?
You see, in the short term, top stocks for 2010 rise and fall for a variety of reasons... many of which you and I can never know.
Perhaps corporate insiders are buying or selling... Maybe a pension fund just took a position. Maybe Jim Cramer moved a stock simply by saying the word "buy."
Who knows? And really, who cares?
The only thing Tom and I care about... the only thing worth knowing... is whether a certain stock is going to rise � and when.
That's where BLUE SHEETS come in...
These data have let us know � with an unusually high degree of probability (83%) � when a stock was going to rise... and when it was going to fall...
Stock stories can be inflated. Earnings figures can be fudged. And, unfortunately, balance sheets get warped all the time.
In our experience, BLUE SHEET data is the only information we can truly rely on to provide an objective reading...
Here, let me show you what I mean...
Many investors � even fellow newsletter editors � think they can beat the market by following the right financial news stories...
Find a big stock story before everyone else does, and you get rich. Find out the negative news stories before the market prices that information in... and you get to keep your money.
That's how it works... Right?
That's what most investors and analysts believe.
They think that by looking at a company's debt, cash, EBITDA, and price-to-book ratio... that they'll find a stock worthy of buying...
How many times have you bought an "undervalued" stock, only to wait...
And wait...
While the stock keeps falling in value...
The truth is, I don't give a damn what a stock is "worth." Like most investors I really care only about whether the stock is going to go up or down after I buy it.
That's what makes our approach quite different.
Tom and I don't play the waiting game. If a stock doesn't have the potential to move fast and far, we just won't recommend it. And we never EVER pick a stock on the basis of news... or earnings... or "valuation," or anything like that.
Quite the opposite...
I'm sure you've heard how the U.S. automotive industry has been getting hammered recently...
General Motors � America's biggest automaker � just laid-off 60,000 workers. They plan to close 1,100 dealerships... And the Federal Government just saved them from total bankruptcy.
Chrysler just filed its Chapter 11 bankruptcy papers. And Ford is fighting to turn things around.
Simply put, things look really bad for the U.S. Auto industry.
Yet � in the past two months � shares of tiny automotive suppliers have been soaring:
| | Tenneco Inc (TEN) has risen up 901%. |
| | ArvinMeritor (ARM) has risen 811%. |
| | TRW Automotive Holdings (TRW) has risen 597%. |
Why has this been happening?
Why have these tiny auto suppliers been multiplying in value... while every piece of conventional evidence suggests they should be falling?
Well, it's probably a combination of factors... but no one can explain it with any certainty...
But there's the thing...
IT DOESN'T REALLY MATTER.
You see, these moves were laid out and described to the day... if you knew how to decipher the appropriate Blue Sheet data.
And all you had to do to see large returns from these tiny top stocks for 2010 was to have the capability to find and interpret the right Blue Sheet data.
And you could have known about it � far enough in advance to make a lot of money...
Had you taken an early $5,000 stake in Tenneco alone, you could have made as much as $45,000.
Sounds nice...
But is it really that easy?
For you, it could be...
But as you probably guessed, these BLUE SHEETS don't just spit out ticker symbols and buy dates for anyone who knows about them. Tom and I had to devise a strategy for accessing and interpreting these things...
Here's how the whole thing works...
Tom and I discovered that we could use BLUE SHEET data to determine � with high probability � which top stocks investors would be buying tomorrow... and which top stocks they would be selling... several weeks before the moves actually happened.
Why is this important?
Because, in the short term, that's the ONLY thing that determines whether a stock will rise or fall in value.
It doesn't matter if a stock is "cheap." It doesn't matter if the insiders are buying. It doesn't matter if earnings are up or if they're down.
If people want a stock, it goes up.
If investors don't want a stock, it goes down.
It's that simple.
Remember Boise Inc. � the paper company I told you about earlier?
It shot up in value because thousands of new investors wanted shares.
Like I said before, no one knew exactly WHY all of these people suddenly wanted shares of an obscure paper company with ailing operations.
But you could have spotted the sudden flare-up in demand and capitalized on it.
Same thing with the auto-suppliers I mentioned.
Tenneco, ArvinMeritor, TRW Auto Holdings... they all shot up because an influx of new investors wanted shares.
Again, no one knows why investors do the things they do... but Blue Sheet data have let us know with extremely high probability what U.S. investors were going to do... right before they did it.
The point is, using Blue Sheet data, it is legal and extremely profitable for us to spot these flare-ups in demand � and you can capitalize on them, in a very rational and dispassionate way...
So what are "BLUE SHEETS" exactly?
Let me explain...
If you've never heard of Blue Sheets before, I'm not at all surprised...
To most people, the amount of raw data they contain is simply overwhelming...
You see, every time you buy or sell a stock anywhere in the United States... your information goes to what's called a clearing firm.
Clearing firms act as middlemen between the stock market and your broker.
These firms receive every conceivable detail on every security you buy and sell, the number of shares you purchase, the ticker symbol... along with a bunch of additional information you probably wouldn't like to know.
Once the market closes, each clearing firm is required by Federal regulators to send the details on every market transaction to the EBS System. The EBS System is basically a vast Federal Government information warehouse for the U.S. stock market.
It's short for "Electronic Blue Sheets" System. Financial insiders just call them "BLUE SHEETS."
Every trade... no matter if it's Jane Smith, the small time market player in Santa Fe, New Mexico... or Steve Cohen, the big shot hedge fund manager in Manhattan...
They all get logged in the EBS System.
What does the Electronic Blue Sheet system tell us about what investors are likely to be buying tomorrow?
That brings me to Dr.S...
More than 3.9 billion stock market transactions take place on the U.S. stock market each day.
So, as you can probably imagine, at the end of every trading day, the EBS System contains a mind-boggling amount of information. Simply too much for one person � or any team of people � to sift through.
That's why last year Tom and I reached out to a gentleman whom we'll refer to as Dr. S.
"Dr. S" is a computer programmer with a PhD in applied mathematics..
When he's not helping us out, he does contracting work for 2 of the 20 largest Fortune 500 companies in America.
What does Dr. S. help us out with?
Processing the billions of data bytes embedded in the BLUE SHEETS.
Once a day, he searches through the BLUE SHEET info � over 3.9 billion stock transactions from all across the world � and filters it through a powerful computer program he personally created.
THIS PROGRAM IS AVAILABLE TO NO ONE ELSE IN THE WORLD.
It compares and examines that data over the previous 60 trading sessions.
And while a lot of this information is useful and interesting for historical comparisons...
We really only care about one set of numbers, which he analyzes from the daily Blue Sheet reports...
That is: WHAT INVESTORS WILL LIKELY BE BUYING TOMORROW... AND WHAT THEY WILL LIKELY BE SELLING.
Because remember...
The more investors who buy a stock, the higher its share price climbs...
That's the ONLY thing that ultimately moves a stock's share price.
And if you can find out which top stocks investors will be piling into the most... you can make a killing in the stock market.
I know, this might be hard to visualize. After all, it is counter-intuitive to how 99% of the population invests...
So here, take a look...
If you knew investors were about to pour millions of dollars into a certain stock...
Then you could invest before they did... and make a lot of money by riding that stock all the way up...
That's the idea behind our BLUE SHEETING strategy...
Incredibly, this allows you (in many cases) to find out where investors are likely to put their money, even before they know themselves...
Crazy, I know...
But just consider what happened recently to a tiny wireless telecomm company called FiberTower Corporation (FTWR)...
On March 2nd, BLUE SHEET data indicated that investors would likely pile into a tiny stock called FiberTower Corporation (FTWR)...
Why?
Again, who knows... and who cares!
Let the TV show pundits, blogs, and newspapers try to explain why top stocks of 2010 go up. Frankly, I really don't care. It doesn't really matter.
All I want to do is know which stocks are going up... BEFORE they make their move.
What matters in the case of FiberTower Corporation is that on March 5th � roughly three days after we received the full details on the Blue Sheets � investors started loading up on shares...
In just a few short days, the usual number of FiberTower investors nearly tripled...
And by May 11, the stock � as a direct result of all the new demand � had jumped by 757%.
Had you known how to follow the right numbers on the BLUE SHEETS, you could have gotten a 72-hour head-start on the crowd... and turned a $5,000 stake into $37,850.
How is this possible?
How can you know which top stocks other investors are likely to pile into, even before they do?
Here's the short (and perhaps unpleasant) answer:
When it comes to investing, people are extremely predictable...
In psychology, this theory is known as "social proof." In short, it says that when lots of people start doing something ― wearing a particular type of shoe, going to a particular movie, or listening to a certain song ― it must be the right thing to do.
Well, in the investment world, it works much the same way...
When more people get interested in a particular stock, the higher the price will go.
What's incredible is that we've been able to consistently use Blue Sheet data to find out exactly which top stocks of 2010 have been generating the most investor interest... and which stocks would make the biggest moves.
It requires access to a little-known and seldom-used set of data, a high-powered computer, and a very talented computer analyst to figure out what it all means...
But the results are well worth the effort.
For example...
On March 9, shares of a tiny insurer called Phoenix Companies (PNX) began to take off...
In less than 2 months, they rocketed from 21 cents a share to as much as $2.31.
A 1,000% rise...
We were able to see this move 5 days before the stock began to rise...
How?
The BLUE SHEETS indicated investors would likely be piling into the stock...
From April 21st to April 30th, Uranium Resources (URRE) jumped 219%.
We were able to see this move 96 hours in advance...
How?
The BLUE SHEETS indicated waves of new investors would likely be pouring into the stock...
Dr. S's data analysis has found dozens of these opportunities so far...
How have we known which ones to get into and when?
Let me explain...
I know this whole scenario probably seems a bit unusual...
But very little this year has fit the norm. In fact, that's what put us on the path to make this breakthrough in the first place...
Late last year, as the markets continued to plummet, Tom Dyson and I began taking a very close look at the smallest and most illiquid securities on the stock market...
I'm talking about companies like Boise Inc. � top stocks worth less than $200 million in the stock market...
Why would we look at the most volatile area of the stock market... at the very worst time in stock market history?
Because we knew the bloodbath would eventually end...
And when it did...
We wanted to make sure we could provide our subscribers with an effective strategy for what would inevitably follow...
You see, at the end of every major market downturn, small stocks move faster than any other investment in the world...
In 1975, as the markets turned around, small stocks averaged a 78.43% return.
In 2003, as the markets recovered from the tech-inspired bear market of 2001, small stocks outpaced all others by a nearly two-to-one margin.
Today, it's happening again...
Just in the last several months, small stocks have been making some incredible moves:
Ivanhoe Mines (IVN) has risen 361%.
Orion Marine Group (ORN) has risen 431%.
Cott Corp (COT), a soda pop maker, has risen 604%.>
Sealy Corp (ZZ), a bed maker, has jumped 927%.
Virgin Mobile USA (VM) has jumped 487%.
How long do these revitalization periods typically last?
The exact time depends of course on the severity of the preceding crash...
But typically anywhere from 3-7 years...
HOWEVER, the real thrust of the small stock explosion � the truly spectacular part � lasts only for a short while:
According to our calculations, small cap stocks will likely experience a rapid, hyperactive period of growth lasting anywhere from 18 to 24 months
This could last longer... or it could happen in less time.
Again, it's only an estimate.
Why do tiny top stocks 2010 rise faster and higher than everything else?
Two reasons...
After a big market downturn, businesses must adapt if they hope to survive and prosper...
Charles Darwin once said the fittest species are not the ones who are the smartest or strongest...
Rather, they're the ones MOST RESPONSIVE TO CHANGE.
It's the same in business...
The companies most capable of retrenching and adapting to the new credit situation and the new (and battered) economy are the smallest companies. They had the least to lose... and now they have the most to gain...
What's the second reason?
Basic mathematics...
Recently, shares of a business software company called Workstream (WSTM) rose 1,850% in just a few months.
For a much larger business software company such as Google to grow by the same amount...
It would have to become a $2.2 trillion dollar company (as valued on the stock market) � the largest publicly traded entity in the history of the world. It would have to consume the equivalent of ExxonMobil, Pfizer, Microsoft, Yahoo, and Chevron combined.. and even then it would still fall short.
But the point is this:
You have a limited period of time to grab as much cash as you possibly can from the stock market.
We're looking straight in the eye of a rare � and potentially very profitable � market anomaly... and now we have an effective strategy to capitalize on it.
That's exactly what we found with our Blue Sheeting breakthrough.
And with Dr. S's assistance, we've conceived, built, tested and fine-tuned a research advisory to help you capture these opportunities...
We're calling it Penny Trends.
On June 16, 2009, we're going public with our new strategy... and marketing this product to a broader audience.
So for the next few days, we're offering you first crack � the chance to get in before the official commercial launch of Penny Trends.
..For much less (55%) than what the general public will have to pay.
We will NEVER offer this price again...
Before I give you the details... and show you how to get started...
"If small stocks are going to outperform all other investments, then why shouldn't I just pick a few on my own?"
Of course you could do that...
But keep in mind, the averages I showed you are based on the overall performance of several hundred small stocks.
If you have enough capital to invest in that many top stocks of 2010, then go ahead...
You probably don't need our research anyway...
What Tom and I are proposing here is a radical new way to potentially get very rich by making a series of small and calculated moves in the market over the next year or so...
We're not fund managers. We're not trying to beat any standard benchmarks...
Nor are we advocating you hold any of these securities longer than several months.
If any of the tiny stocks we recommend aren't meeting our unusually high standards for performance, then we'll recommend you let them go.
For instance, just last month, we recommended selling a tiny lumber company called BlueLinx... even though it had risen 11% in about a month...
Most analysts would be thrilled to see a stock rise 11% in a year, let alone one month...
So why did we suggest cutting it loose?
Because that's not fast enough for us...
Not even close.
Penny Trends is a trading research service. We will not suffer any slow-moving laggards in our portfolio...
Since we began testing our new strategy, we've made 12 recommendations.
As of May 20, 2009, ten have either been closed out as winners or have gone up in value.
That's an 83% winning percentage.
Plus, we made two trial recommendations when the markets were still crashing this past September.
One stock � Questcor Pharmaceuticals (QCOR) � was trading at $5.53/share. By December 8, 2008, shares had raced to $9.54/share.
That's a 73% return during the worst market collapse since 1987.
That same day � Sept. 10 � we recommended buying Emergent BioSolutions, Inc. (EBS).
3 months later, the DOW, S&P 500 and the NASDAQ had all fallen by 30% or more.
Shares of EBS had risen 57.4%.
To Tom and myself, this was validation that our BLUE SHEETING strategy truly worked.
If we could pick two of the only 2010 top stocks to rise during a severe market crash... we had high hopes for what our strategy could do when the penny stock market began to take off...
So, what can you expect in the months ahead? And how can you get started right away?
I'll explain everything in a minute. But first, I wanted to tell you about one more aspect of this situation.
I've already told you how BLUE SHEETS work... and about how we analyze them to find out what stocks investors will likely be buying...
I've also told you why we use them to track and capitalize on the smallest securities on the stock market...
But there's one more benefit to the BLUE SHEET situation, and it may be the best part of the whole thing...
When Tom and I receive a short list of BLUE SHEET prospects from Dr. S...
One of the things we look for are "clusters" of top stocks for 2010:
Groups of companies that operate in the same industry, sector, or niche...
The more unusual the better, too...
For instance, a couple of months ago, we received a short list from Dr. S.
On it were 4 coffee companies:
Starbucks (SBUX)
Green Mountain Coffee Roasters (GMCR)
Coffee Holding Company (JVA)
Diedrich Coffee (DDRX)
According to the BLUE SHEET data, U.S. investors had suddenly grown very interested in coffee (of all things)...
And they were about to start pouring money into the four coffee stocks listed above.
Why?
Again, who knows, who cares...
It didn't really matter.
What mattered is that investors from all over the world THOUGHT something VERY big was about to happen in the coffee market.
Remember, "social proof" is probably the strongest force in the entire financial market.
Something so big, that to them it didn't really matter which coffee stock they invested in...
They were going to act on it, one way or another...
And you could have known about their interest early enough to make a lot of money...
That's what the BLUE SHEETS data tells us: Not why people are prepared to invest. Rather, WHERE and WHEN.
In the days that followed, waves of new investors poured into coffee stocks...
As a direct result:
Starbucks jumped 34%.
Green Mountain Coffee Roasters climbed 95%.
Coffee Holding Company rose 517%.
And Diedrich Coffee � a tiny California Coffee manufacturer � rose a whopping 6,533%.
There was nothing especially appealing about the fundamentals of these top stocks for 2010.
But the more people who loaded up on shares of coffee companies... the higher their share prices jumped...
The higher their share prices jumped, the more attention coffee stocks got in the mainstream press...
The more attention coffee stocks received in the mainstream press... the more people wanted to buy shares...
And so on and so forth...
Eventually, so many people were loading into tiny stocks like Diedrich, that its share price had jumped 63-fold.
Crazy, I know...
But that's why we love finding "clusters" of top stocks for 2010...
Do you see how this works?
The more of the same kind of stock investors want, the better. Because when the herd piles into an entire sector, it pushes a stock's share price (and your investment) up higher than it would ordinarily move on its own.
We don't care about the big stocks like Starbucks and Green Mountain Coffee...
We care that investors want coffee stocks so bad... that they're willing to buy anything coffee-related...
Why?
Because that kind of insane demand will push tiny little stocks like Diedrich through the roof...
These "clusters" appear on our BLUE SHEET lists more often than you might think...
And in some pretty strange sectors too...
Recently, we've seen heavy "clustering" in everything from Internet top stocks 2010 and aerospace companies to home furnishing retailers...
For instance, a couple months ago, we saw a flurry of BLUE SHEET activity indicating strong interest in car rental companies...
Boom, boom, boom...
One blue sheet after another...
In companies like Hertz, Avis Budget, and Dollar Thrifty Automotive.
Why?
Again, who knows, who cares...
What mattered is that investors REALLY had a sudden and strong desire for car rental companies... and were about to pony up a lot of cash to satisfy it.
Hertz � the largest company of the cluster � jumped 385%.
The other two companies jumped even higher. Avis Budget jumped 1,097% in two months...
And Dollar Thrifty Automotive jumped 779%.
These companies are so tiny and excite-able...
You could breathe on your computer screen and they'd jump 200% or 300%...
If this kind of trading is too opportunistic for you, I understand.
And that's okay. As it turns out, we can only afford to take a small group of folks along for the ride...
Because our new Penny Trends research deals with highly illiquid, extremely sensitive equities, we're limiting enrollment to a very small group of readers...
Ultimately, many folks will be excluded.
So to keep things fair, here's what we're doing...
Right now, we are opening this service only to current readers. We will DEFINITELY open it up to the rest of the investment public as of June 16th... and may do so even sooner, depending on what happens in the markets, and the response from our subscriber base.
If there are any charter subscriptions to Penny Trends still available by June 16th...
Then we'll offer them to a broader audience, at the full price.
But we doubt we'll reach that point.
What's the price?
One full year of Penny Trends will cost $2,000.
If you respond to this offer right away, you can lock in a ridiculously low price of $900.
We will never offer this price again.
We'll ask everyone else to pay 122% more when we go public with our new strategy on June 16 (if there are still spots left).
Why are we making this offer?
Because we are confident this service can help improve your net worth. I truly believe you could make an absolute killing in the market from Tom and my trading recommendations for at least the next 12 months.
As an independent financial publisher, the success of our business depends on how satisfied you are with our research.
If you like our work and think our investing strategy is right for you, then you stick with us and S&A continues growing as a business.
Sign up today � claim your charter membership for the limited time we're offering it.
You'll have 90 DAYS to decide whether our research is right for you. If for whatever reason you want to cancel your subscription in the first ninety days, just let us know. We'll give you a full refund (minus a 10% refund fee).
You see, we want to avoid "tire-kickers" - the folks who sign up without any intention of paying. This costs us a small fortune in overhead expenses, especially when we offer special discounts ($1,100 off) like this one.
Here's what you'll receive as a Penny Trends charter subscriber:
Penny Trends Trading Primer: This special, members-only report represents your TRADING BIBLE. Read it right away, before you review anything else.
You'll learn the full details on this unique situation... including the secrets behind our BLUE SHEETING strategy.
You'll also learn a trading secret called "R-1." This is a very simple, but incredibly important rule we ask that you follow when EXITING our recommended positions.
You see, a big part of our investment strategy � and a great deal of your success � depends on your ability to remain disciplined and dispassionate. When we issue a buy recommendation, it's okay of course if you choose not to invest. But if you do, please do not drag your feet. These are fast moving issues. A day or two can make all the difference in the world. Likewise, when we email you to exit a play, it's important that you don't sit on it.
Penny Trends Trading Alerts: � Every Tuesday at 6 p.m, Tom and I will email you our play of the week, why we're recommending you make it, and every important detail you'll need to know. In these reports, you'll also receive a detailed summary of what you should do with any positions we're currently holding.
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