February 2012

Inside ...
Page 9

Materials, Energy & Ags

Three New Recos!
Page 12

The Speculator
Yes, Stay Short Stocks,
Silver, And The Euro With
Your Inverse ETFs!
Page 12

... formerly Silver & Gold Report since 1979

Issue #94

Effective immediately

Real Wealth Report

Unplugged and Turbocharged!

No, I havent drank too much coffee or Red Bull.

The simple truth is that the next three years are going
to be unlike any other period seen in the financial
markets, ever ...
So Im now preparing my familys investments and
naturally yours as well for 2012 and beyond.

Income Investments
Continue To Hold FAX.

This also means its time to make important changes

to Real Wealth Report because, very simply put, the time to prepare is
here NOW.

Page 13

I dont say any of this lightly. Its not my intent to frighten you. Quite
the contrary, Im deadly serious that ...

Real Wealth Mailbag

Welcome to the new
Real Wealth Mailbag
a new section devoted
to your questions!
Page 15

Your Positions
At A Glance

A) The next three years will make every crisis of the past few
decades look like a Sunday afternoon walk in the park. Every one
of them, from the soaring inflation of the 1970s and the 1998 Asian
financial meltdown to the tech wreck of 2000 and even the real
estate crash of 2007 will pale in comparison to the turmoil the world
will go through over the next few years.
B) Investors who prepare now will make more money than they
ever dreamed of in the next three years. Thats provided they truly
do prepare now. And an important part of that process is beginning to
think dynamically and unconventionally, questioning everything they
thought they knew about economics, markets, and investing.
Make no mistake about it: As I warned my publisher Martin Weiss
as far back as 1998 and repeatedly since then starting with the
year 2012, the world as we know it will cease to exist ... the global
monetary system will come unglued ... a sovereign debt crisis will
envelope the globe and all conventional economic and financial logic
will be turned virtually on its head.
We are in the beginning stages of that phase now.

This year, as I noted in recent issues, is what I call a panic year a year which will find the
markets violently twisting and turning as they too prepare for the historic changes that lay ahead.
Mind you, none of this is based, even in part, on Nostradamus or Mayan soothsaying. Its simply
based on the fact that history has proven, over and over again, that every 50 to 60 years
1. The worlds monetary system goes through dramatic turmoil that can include massive changes
to the worlds reserve currency, currently the U.S. dollar.
2. Many sovereign governments usually the most fiscally irresponsible often fail, and when
they do, they take no prisoners, heaving tens of trillions of dollars of losses on unsuspecting investors.
While in the end ...
3. Out of the ashes emerges a new global monetary system new rules of the game new markets
new ways of investing ... and only a few who are left standing with any wealth.
All of this demands that drastic actions be taken now to get ready for the future so that youre
one of the few who are left standing with vast wealth.
So let me begin by telling you that in no uncertain terms I will be there for you every step of
the way.
Moreover, this months issue will help lay the foundation for the future via several changes Im
making to Real Wealth Report unplugging it and turbocharging it to give you everything you need
to protect and grow your wealth going forward.
Ill get to the changes in a few minutes. First, I want to give you my latest analysis and thoughts
on the market action over the last month.
That wont take long, because from a big picture point of view, nothing has changed. The past months
action in virtually all markets was nothing but a lot of background noise and disruptions with no
meaningful trend changes or accelerations.
Yes, gold and silver pressed higher than I expected. So did the broader stock markets. Meanwhile,
the U.S. dollar slipped during the past month, and the euro managed to appreciate, despite the ongoing
European sovereign debt crisis.
Nevertheless, I repeat, there were no meaningful trend changes ...
Gold remains in a wide, sloppy trading range and is overbought not yet ready to break out into
its next major leg up and instead, remains vulnerable to another steep drop. This is true regardless
of what developments transpire in Europe, the United Sates, or the situation in Iran for that matter.
Look, gold hasnt even broken above its late 2011 highs. Its volume of trading is declining, and all
of my short- and intermediate-term indicators remain bearish.
Theres even evidence cropping up that gold demand is falling as well. Indian demand declined as
much as 11% in the last two quarters of 2011, while demand in other Southeast Asian countries has
also fallen; in Thailand, Malaysia and Indonesia.
Yes, Chinese gold demand is rising from both consumers and Beijings official buying. But it has
been rising all along and Chinese demand for gold did not prevent the yellow metal from plummeting
recently from $1,935 to the low $1,500 level.
www.WeissResearchIssues.com

February 2012

And as Ive said all along, the European debt crisis is more bullish for the dollar than it is for gold.
That will continue to weigh heavily on gold prices until the sovereign debt crisis hits the U.S government
and the U.S. dollar with full force.
My line in the sand for gold also remains the same as before: For gold to bust out to the upside in
any meaningful manner, we would need to see it manage a daily closing above $1,835 basis cash,
or spot gold price, and on a Friday closing basis above $1,809.
Short of both of those signals, gold is not ready to break out to the upside. Instead, the bias for
gold will be toward filling air pockets on the downside. As I pen this issue, that turn back to the
downside appears to be very close.
All of my recommendations in gold remain in place. Long-term investors should hold all recommended
core gold positions, hedged with purchases of the recommended inverse gold ETF, ProShares UltraShort
Gold ETF (GLL). See below for more details.
Silver too remains well below critical resistance and is far more likely to stage a surprising plunge
than a sustainable rally and break out to the upside.
In silver, we would need to see a spot daily close above $35.79 followed by a close above $37.79
on a Friday closing basis to turn silvers intermediate-term trend back to bullish.
Short of those signals, silver remains in a position to plummet yet again.
And plummet again it will. Remember last years August to October decline when silver plunged
more than $18 an ounce, or 40%? Its about to happen again. And Im afraid that if you dont heed
my warnings, silver could easily take you to the cleaners.
I recommend investors refrain from purchasing any silver positions at this time, and instead, for
those willing to speculate, hold the ProShares UltraShort Silver ETF (ZSL). See The Speculator column
on page 12 for more details.
The dollar is still in a short- to intermediate-term uptrend, largely against the euro. Yes, the dollar
weakened this past month as the euro showed what I believe will turn out to be one of its last gasps
for air before submerging.
We should soon see a renewed rally in the dollar, one that will further depress gold, silver and other
commodity prices, in the short term.
Do bear in mind, however, that nothing has changed in the long term for the dollar. After the expected
rally in the dollar is finished, it will resume its long-term bear market.
Speculators should continue to hold the recommended position in the ProShares UltraShort Euro
(EUO). See The Speculator column on page 12 for more details.
The Dow Industrials have indeed pressed the upper extremes of intermediate-term resistance at
the 12,800 level but here too all of my work suggests a sharp, sudden decline is in the offing, and
Dow 9,100 is not yet off the table.
For the Dow Industrials to truly break out to the upside, we would need to see it put in a weekly
close above 12,879 followed by a monthly close above 13,179.

www.WeissResearchIssues.com

February 2012

I dont believe thats in the offing just yet, though I will say that the Dows recent strength is exhibiting
what Ive been forecasting all along that at some point in the not-too-distant future, we will see
a new bull market in the Dow and S&P 500 stocks ...
One that will take those indices to startling new highs on the back of a plunging dollar and a flight
of capital away from the perceived safety and soundness of any investment associated with governments
around the world.
Especially those that are going broke, like Europe and the United States.
In the meantime, speculators should hold the recommended position in the ProShares UltraPro Short
S&P 500 (SPXU). See The Speculator column on page 12 for more details.
I know its tough holding positions when the market is going against you. But I have every reason
to believe my forecasts will pan out. So stay unemotional and stick with those positions.
Now, and importantly, its time to prepare for the next three years of tumultuous markets markets
that will make or break you by reviewing ...

The Changes Im Making To

Real Wealth Report
The changes Im making to Real Wealth Report are driven by three primary motives
First and foremost, and as already noted, they are being made to prepare you for the unique times
that lay ahead. The next three years will see
The U.S. dollar lose its status as the worlds reserve currency.
Commodities enter the third and final phase of their bull markets, with shocking moves to unheard
of highs such as gold to $5,000 or more in the offing.
China increase its dominance over the rest of the world, the U.S included.
Surprising, even shocking moves in the broader stock markets, catapulting them higher even as
underlying economies in the West plummet further.
And more, much more!
Second, to keep Real Wealth Report and its members ahead of the crowd as a leading, cuttingedge publication in the industry with forward-thinking forecasts and recommendations.
Since its inception in 2004, Real Wealth Report has never been a conventional investment newsletter
or been anything but the best of the best.
So the changes Im making now are designed with those twin goals in mind.
Plus, importantly ...
Third, the changes are of course also being made with an eye toward constantly improving the
Real Wealth member experience.
This means not only in the performance of its recommendations where I always do my darn
best to protect and grow your wealth but also by giving you much more analysis, including ...
More flash alerts. The times ahead will warrant it.
www.WeissResearchIssues.com

February 2012

So from now on you can expect flash alerts any time I see an important change in the markets ...
any time there is what I deem an important change or development in an open recommended position
and any time there are new recommendations to be made and waiting for the next months issue
simply wont cut it.
Sometimes the flash alerts will be very brief with just my take on the action and sometimes
they will be longer with full detailed analysis of whats happening and any steps you need to take.
You will also receive
Special reports when a novel situation presents itself outside of the normal Real Wealth publication
schedule.
Somewhat similar to flash alerts in the sense that they will be time-sensitive, these special reports
will cover events and market developments that I feel you must know more about either to avoid
the pitfalls the media isnt telling you about or to capitalize on appropriately.
Each month, you will also now find
The addition of a monthly Mailbag. Starting with this months issue, I will now have a section
where I answer the questions that are foremost on subscribers minds.
And importantly, you will also now have ...
Greater access to me, via my Real Wealth Report Quarterly Webcasts.
Each quarter I will present to you, live via the web, my latest analysis and thoughts on the markets, on global politics, and the Real Wealth recommendations. Plus, you will have a chance to present
your questions to me, and get them answered.
Theres nothing you need do. Youll receive an invitation to the webcast when the time comes. Just
look for it in your inbox. The events are free to members-only.
Indeed, all of the changes are included in your current membership. Im simply unplugging Real
Wealth Report and turbocharging it to give you everything you need to protect and grow your wealth
in the years ahead.
There are also other changes starting with this issue. Some columns are merely being renamed.
Ill summarize the changes now, including the reasons behind them ...
First, the Core Gold Section will be renamed Basic Survival Strategies. The reason is simple:
Gold is only one investment class you will need to protect and grow your money in the years ahead.
You will need investments in other precious metals, including silver, platinum and palladium.
And you will need other essential investments to protect the dwindling value of the dollar as well,
such as Treasury Inflation-Protected Securities, or TIPS, when theres idle cash that needs to be protected.
Or investments in key currencies to also insulate and protect your idle cash from the falling value
of the U.S. dollar. These investments will take many different forms, from buying, for instance, foreign
currency CDs, to buying currency ETFs and more. Or recommendations like the current holding,
the Market Vectors Renminbi/USD ETN (CNY).

www.WeissResearchIssues.com

February 2012

They will not be speculative recommendations. They will be designed to help you protect your
dollars that are not directly invested in any of the other recommendations I make, or for the idle
cash that you have that is vulnerable to the weakening U.S. dollar.
The simple truth is that there is simply no way anyone can navigate what lies ahead by investing
exclusively in, with, or via U.S. dollars. Or even gold for that matter. Not when the global monetary
system will be going through historic changes.
In short, the new Basic Survival Strategies section is exactly what it says: The necessary wealth
protection I feel everyone must have going forward.
Like the previous Core Gold section, it will be covered every month as part of the main article for
that issue, and its current holdings and actionable items will be found in the table on the back page
of every issue.
Second, the Real Income column will be renamed Income Investments. Though most of
the recommendations will continue to be in higher-yielding resource stocks, theres much more that
can be done to generate income going forward ...
Including higher-paying foreign bonds, dividend-paying corporate bonds in undervalued companies,
and special income situations that are now beginning to crop up in the markets.
So in essence, this column is being expanded to help you invest in all kinds of top-quality income
investments.
Third, the Natural Resources Riches column will be renamed Materials, Energy & Agriculture
Investments. Two primary reasons for the change: First, the name Natural Resources Riches was
too broad and generic.
Second, there are too many opportunities cropping up in material-based companies and producers
all over the world to ignore them. Companies that produce materials from natural resources that are
staples of modern life in construction, in infrastructure development, and even in technology.
So whether its an investment in a company building roads in Mongolia, or a technology-based
energy company thats a large consumer of rare earth metals for the manufacture of solar films or
wind turbines, you will find those opportunities in this new section.
Ditto for the energy sector. Its not enough to simply confine it to a few recommendations here and
there. So going forward, there will be many different strategies and investments recommended in
the energy sector, from oil and gas to alternative energy and more and they will all be covered in
this section.
Likewise for food and agriculture. As you well know from following Real Wealth Report over the
years, food is going to become a major issue in the years ahead. Already weve seen surprising price
increases in the cost of many staples, from corn and wheat to sugar and soybeans.
The thing is, soaring prices in the agriculture and food sectors are just beginning.
In the next few years you are going to see shocking price increases of as much as 300% in the
prices of various food items as the dollars reserve status dwindles as the worlds now 7 billion
strong population needs more and more food and as China begins to gobble up more and more
agricultural resources around the globe.
www.WeissResearchIssues.com

February 2012

Prudent investments in agriculture can do two things for you. First, they can help hedge the rising
costs youll experience as you feed your own family. Second, they can give you potentially large
capital gains.
Fourth, a new Asia Section will be introduced. The reasons are obvious. To survive the coming
changes the world will be going through and profit from the rise of China there is simply no way
one can ignore investing in Asia.
This new Asia section will launch in the March issue. Thats when I see some new opportunities
cropping up in Asia, and well be ready to hop on them.
Investments will run the gamut from buying ADRs of Asian stocks on U.S. exchanges, to select
ETFs, and more with most having a natural resource, tangible asset angle to them.
Included will be special situations such as how to profit from Myanmars (Burma) vast natural resources
as the country begins to open up to the world.
I believe this is going to be a very exciting and rewarding investment area for Real Wealth members!
Fifth, the Resource Speculator column will be renamed The Speculator largely to make
it clear that its not confined to natural resources.
Plus, in the months ahead I will be adding new opportunities to this section, including select longterm option plays, or LEAPS.
To summarize all the changes, heres a handy guide:
Former Column/Section

New Name/Section

Where typically found

in newsletter

Debuting

Core Gold
Natural Resources Riches
Resource Speculator
Real Income

Basic Survival Strategies

Materials, Energy & Ags
The Speculator
Income Investments
Real Wealth Mailbag
Asia!

Main Article
Page 4
Page 6
Page 7
Page 11
-

This month
This month
This month
This month
This month
March 2012

Now, lets move on to your

Basic Survival Strategies (formerly the

Core Gold section)
Right now, the investments in this section consist of the following

Gold bullion, which is up as much as 343.14% since originally recommended.

SPDR Gold Shares ETF (GLD), up 292.39% since my initial recommendation.
And investments in the following gold funds:
Tocqueville Gold Fund (TGLDX), up 161.17% ... U.S. Global Investors World Precious Minerals
Fund (UNWPX), up 71.55% U.S. Global Investors Gold and Precious Metals Fund (USERX),
up 61.97% DWS Gold & Precious Metals Fund (SCGDX), which is closed to new investors,
up 142.12%.
Hold all of those positions.

www.WeissResearchIssues.com

February 2012

But make sure you are at least partially hedged with my recommended positions in the ProShares
UltraShort Gold ETF (GLL).
You should be long 100 shares of GLL per every $100,000 you have invested in gold from the
September issue at roughly $16.28, another 200 shares per every $100,000 you have invested in gold
from the October issue at roughly $18.27, and an additional 300 shares per every $100,000 you have
invested in gold from the December 19 Flash Alert at roughly $18.68.
Hold GLL. I will monitor a stop for you for the entire position.
If you are new to Real Wealth Report and have no gold holdings at this time, do not buy until I
give you the all clear signal. That will likely come by flash alert and will probably coincide with
my instructions for members who do own the above positions to close out the recommended hedges
in GLL.
For now, my view that gold is headed lower has not changed. So buying or adding to any gold
investments at this time is not the way to go.
Instead, look to buy additional gold and other precious metals when I see that a low is in place, or,
when I get confirming signals that the next leg up has truly started.
So far, that is not the case. Therefore, its far more prudent to remain cautious than try to anticipate
the next real breakout.
When I do get the signal to buy, whether on a pullback or a breakout, I will be looking to not only
add gold, but also silver, platinum and even palladium.
To the right in table form, are a few of the select mining
stocks that are on my radar screen for possible upcoming
buys but please do wait for my signals.

Recommended Currency Investments

Im maintaining my hold recommendation for the
Market Vectors Renminbi/USD ETN (CNY)
effectively a long position in Chinas currency, the yuan.

Company

Symbol

Silver Standard
Taseko
Exeter Resource
Great Basin
Vista Gold
Detour Gold

SSRI
TGB
XRA
GBG
VGZ
DRGDF

Market cap per ounce of

mineable gold/silver*
$122
$53
$13
$44
$33
$153

* Current market capitalization of the company divided by the

number of mineable ounces of gold and silver, defined as the
total proven reserves plus the estimated viable resources that
could become commercially mineable.

Since the first of this month the position has jumped

as much as 2% a very healthy move up for a currency.
This also supports my view that the Chinese currency could appreciate dramatically this year especially
against the U.S. dollar.
If you dont own CNY, buy it now at the market. I will monitor a stop for the position.
Im also maintaining my hold recommendation for the PowerShares DB US Dollar Index Bullish
(UUP) position, with a protective sell stop good till cancelled at $19.81.
New Recommendation: For any idle cash that you have that is not invested in the markets and
that you do not need beyond six months of expenses, I recommend that you also add exposure to
the Australian and New Zealand dollars.
The Aussie dollar remains one of the strongest currencies on the planet, due to Australias vast natural
resources and its proximity to the largest country in the world with the most voracious appetite for
natural resources, China.
www.WeissResearchIssues.com

February 2012

Meanwhile, New Zealands economy is also one of the bright spots on the planet, a resource-based
economy that is also enjoying the benefits of trading with China and Southeast Asia.
You can add exposure to both currencies via EverBanks unique WorldCurrency CDs.
EverBanks 3-month Australian WorldCurrency CD currently yields about 2.75%, more than you
can get in a bank account or CD in the U.S.
Its New Zealand Dollar WorldCurrency CD offers a 3-month yield of 1.25%.
My recommendation: For idle cash that you have on hand, buy equal amounts of EverBanks 3month Australian and New Zealand WorldCurrency CDs. They are available at www.everbank.com.
One caveat: The minimum investment in an EverBank WorldCur-rency CD is $10,000. So if you
have to choose just one, go with the higher-yielding Aussie CD. For Real Wealths tracking purposes;
I will track both the CDs.
Invest as much idle cash as you can in these CDs. Again, just make sure that the cash you do invest
in them is above and beyond the six months of cash I recommend you keep on hand for daily needs,
and above and beyond cash that youll want to keep liquid for other investments.
Please be sure to review the rest of this months issue, especially the new recommendations Im
making in the other sections.

Materials, Energy and Ags

(Formerly Natural Resources Riches)

Three New Recos!

Materials: Though Im short-term bearish on most markets right now, including commodities,
I repeat my long-term view: Anyone who thinks the great bull market in natural resources is
past its prime needs to seriously reconsider their worldview.
For one thing, Asia holds nearly half the worlds population and the majority of them, by far, are
just entering new lifestyles emerging from previously heavily socialistic countries, or in the case
of China, outright communism.
That alone means more than 3 billion people are rapidly improving their lifestyles!
For another, its only been within the last decade that many of these 3 billion souls have been able
to actually OWN their own property, be it a small piece of land, apartment, or, even a house.
This single fact alone also means that demand for natural resources, including construction materials,
base metals, and more, will continue to explode higher for many years to come.
And for yet another reason, as you already know from my work the value of the worlds reserve
currency, the U.S. dollar, is going to soon start plummeting again and even be actively devalued by
the authorities in both Washington and Beijing.
Its part of what theyre calling the great rebalancing act which is nothing more than code
speak for a dollar devaluation to inflate away U.S. debts.
www.WeissResearchIssues.com

February 2012

Bottom line: Given the on-going boom occurring in most emerging markets in housing, commercial
properties, public transit, and more I believe its now time to get active again purchasing select
investments in materials, construction and resource-related companies.
However, keep in mind that for the short term, all markets are largely overbought and subject to a
pullback. So its not the time to get super aggressive, just yet. Instead, lets exercise caution and be
very select in the investments you purchase in this section.
There is one materials-related company that I feel everyone should target immediately: ITT Corp.
(ITT).
ITT is a world-class engineering company and manufacturer of pumps, systems and services that
move, control and treat water and other liquids. It is also active in the aerospace, automotive, rail
and industrial oil and gas sectors.
The company is diversified in more than 140 countries, including Asia and Latin America.
It has established research and development centers in India and China to meet the needs of
customers there.
Some highlights of what I like most about ITT right now ...
Its share price is trading at only 3.3 times the previous 12 months earnings, dirt cheap by
any measure!
Its trading at a price-to-book value ratio of a mere $0.46, meaning the companys share price
reflects less than half the companys book value.
The shares are trading at a cheap 0.19 times sales and just 2.25 times cash flow per share, another
undervaluation.
ITTs share price split 2-for-1 last October. Its well off its highs, but given the low valuations it
has now the stock split and more I think ITT is ripe for buying.
Currently trading at roughly $22, buy 100 shares of ITT Corp. (ITT) on the next pullback, at
$20 or better. If filled, use a good-till-cancelled protective sell stop at $15.97 to manage risk.
If I feel the buy instructions need to be changed, for whatever reason, and before the next issue of
Real Wealth is published, naturally, I will alert you via a flash alert.
Energy: If youve known me for any length of time, you know Im long-term bullish on oil, just
as I am on gold, precious metals and commodities.
The reason is simple: The worlds supply of crude oil cannot possibly meet demand. Demand is
going to be growing by leaps and bounds in the years ahead as emerging economies come fully online,
particularly China.
Over the next few years, I expect the price of crude oil to hit $200 a barrel. But it wont be just oil
prices that will go up. The price of wind energy, solar, hydro, and even natural gas will all eventually
move higher as well.
Right now, I wouldnt be surprised if oil trades lower. But given its resiliency and many other factors
Im following, I think its time for you to stick your toes back in the water in the energy sector with
a small, basic position in one of my favorite undervalued energy companies.
www.WeissResearchIssues.com

February 2012

10

My recommendation: A core position in Anadarko Petroleum (APC).

Anadarko has more than 2.5 billion barrels or proven oil reserves. With a current market cap of
$43.4 billion, its oil reserves are valued at a mere $17.29 a barrel.
Anadarkos share price just broke to a new high. Trading at roughly $87, I expect the share price
of APC to move to over $100 sooner rather than later.
Buy 100 shares of Anadarko Petroleum (APC) at the market and consider it a long-term
investment. Place a protective sell stop good till cancelled at $74.91.
Ags: Weve already seen one round of food price inflation, starting roughly three years ago. Prices
of almost all food commodities have jumped wildly, from corn and soybeans to wheat and sugar.
Prices of cocoa, coffee, hogs and cattle have also soared as well. Many of the non-agricultural food
items are largely dependent upon agriculture prices, and the entire sector has been moving up.
Recently, however, weve seen a correction unfold in many food-related commodities. It wont
last long. Over the next several years food prices will march much higher, for a number of reasons.
Those reasons include population growth, the rising wealth in Asia and in the emerging markets
of Latin America, lack of improvements in production technology, ongoing weather problems throughout
the world, natural disasters, and more adverse forces that are robbing the world of important food
supplies precisely when needed most.
Another major force driving food prices higher will be the next stage of the dollar devaluation I
expect. When the dollar declines, food prices inflate higher.
More specifically, Im seeing pressure build up that will send corn, wheat, soybeans and sugar prices
substantially higher in the years ahead.
I recommend that all subscribers stake out a core position in one of my favorite food conglomerates,
Archer Daniels Midland (ADM).
ADM is a major player in the agricultural market. It procures, transports, stores, processes and
merchandises a wide array of products, from oilseeds, corn and barley, to peanuts and wheat. ADM
operates more than 230 processing plants and more than 330 sourcing facilities in more than 60 countries
on six continents.
The company is coming through a tough couple of quarters due to uncertainty in the global economy,
tight operating margins, and other factors, all of which have contributed to the companys share price
being down roughly 60% from its 2008 high.
However, my system has just given me a weekly buy signal on the shares, and I believe the worst
is past for ADM. Plus, share buybacks and increased dividend payouts tell me that management is
very positive on the companys outlook. So am I.
Buy 100 shares of Archer-Daniels-Midland Company (ADM) at the market, and place a protective
sell stop good till cancelled at $22.89.

www.WeissResearchIssues.com

February 2012

11

The Speculator
(formerly Resource Speculator)

Yes, Stay Short Stocks, Silver, And The Euro

With Your Inverse ETFs!
Yes, two of the three positions have indeed moved against you. But all of my indicators continue
to strongly suggest that ...
Silver is not yet ready to fully break out again, and that a sharp pullback is still in the wings
The Dow Jones Industrials and other broad market indexes remain vulnerable to at least one more
sharp pullback
The euros recent rally was largely nothing more than short-covering, which will soon abate and
lead to another sharp leg down in the euro, boosting that position even more.
Per previous recommendations, you should be short the S&P 500 via the leveraged inverse ETF
ProShares UltraPro Short S&P 500 (SPXU) short silver via ProShares UltraShort Silver
(ZSL) ... and short the euro via the leveraged ProShares UltraShort Euro (EUO).
Hold all positions and maintain protective sell stops good till cancelled at $8.97 for SPXU ...
$8.23 for ZSL ... $14.58 for EUO.
If you do not own any of the above positions, and you wish to invest in these speculative recommendations, feel free to buy them now, using the aforementioned good-till-cancelled protective sell stops.

Income Investments
(formerly Real Income)

Continue To Hold FAX.

Given that Im expecting another pullback in the broader stock markets, my view remains
unchanged: This is not yet the time to go all out in income investments, especially dividendand royalty-paying stocks.
Yes, there are some good yields to be had right now in some of the best paying stocks out there.
But again, what good is a dividend or royalty yield of 5% or even 11% when stocks in general are
vulnerable to another sharp setback?
Id rather wait and have you buy on that pullback, when the risk of a capital loss is wrung out of
the market, and when yields are even better!
So for now, the only risk I suggest you take on in income-based investments is to hold the recommended
position in the Aberdeen Asia-Pacific Income Fund (FAX), recommended last July.
www.WeissResearchIssues.com

February 2012

12

Since the first of the year, FAX has staged a nice run, rising from $7.33 to its current price of $7.51.
Thats a nice 7-week gain of about 2.45%, and it comes on top of the shares annual yield equivalent
of roughly 5.5%.
On January 18, the fund announced that it will pay another monthly distribution of $0.035 per share
on February 17, 2012 to all shareholders of record as of January 31, 2012.
Hold FAX. I recommend reinvesting your dividends. If you dont own FAX, buy now at the market.

Real Wealth Mailbag!

Welcome to the new Real Wealth Mailbag
a new section devoted to your questions!
Naturally, I cannot answer questions related to personalized investment situations. But I can and
will answer any general questions you have about the markets, about Real Wealths recommended
positions, and more. So lets get right to this months most popular themes and questions ...
Q: Larry, youve been 100% wrong on the short-term direction of the precious metals. Why?
A: Sometimes Im right as rain, sometimes Im wrong. Thats the nature of the business. Overall,
however, I tend to be more right than wrong, and I have faith that I will be proven right again on the
metals, that another hard fall is in the wings.
Importantly, Im not one to tell people what they want to hear. Thats because a good portion of
my analysis and forecasting is contrarian in nature, especially in the short term.
I learned long ago, for instance, that when investors emotions are running high, that more often
than not they are being led to the slaughterhouse, that the current move that generated so much emotion
is probably a trap, and that the risk of joining the crowd, though not apparent at the time, is often a
leading indicator of a market turn.
At times like those, and when all my signals confirm it, I prefer to take the opposite side of the
market. Such is the case in gold and silver right now. I STRONGLY believe they are not yet ready
to break out into their next real leg up, and instead, a sharp downdraft lies ahead.
Ironically, when that downdraft hits I will probably turn all out bullish again.
Q: Has Europes sovereign debt crisis changed your outlook for the dollar?
A: Only in the very short term. The U.S. dollar has worse long-term fundamentals than the euro
namely over $145 trillion in unpayable debts and obligations, an amount 10 times larger than
Europes bad debts and unpayable promises.
Q: Whats your latest view on Asia, China in particular?
A: The pundits calling for a crash or collapse in China have it all wrong again. First, China has
engineered a soft landing. Second, the pundits dont understand the differences between the U.S.
and Chinas economies: China is a command economy and the Chinese people are very much
content being commanded.
www.WeissResearchIssues.com

February 2012

13

Yes, there is some social discontent in China. But there is also social discontent in the United States
and in Europe. Meanwhile, the ties that bind Chinese together are much stronger than they are in
the West.
Another huge factor is all the nonsense about the bad debt in China. To be sure, there is wasteful
lending that is going on. But unlike the West, when loans go bad in China, theyre cleaned up pretty
quickly because of one major reason: Its the government largely owing the government money.
In other words, its not the private sector requiring a bailout by the public sectors. In China, they
are largely one and the same.
This is especially true when the publics piggy bank is as big as Beijings is, with $3.2 trillion in
cash. Lets say, for instance, that theres one trillion of wasteful or bad loans outstanding in China.
Big deal. Beijing could clean it up over night with cash, and still have $2.2 trillion in the piggy bank.
Also keep in mind that most of the skeptics on China, or any part of Asia for that matter, are ivory
tower academics who have never even set foot in Asia. I live in Asia. And I can tell you with complete
confidence that China and Asia have decades of vibrant growth ahead of them!

Next Page >>

www.WeissResearchIssues.com

February 2012

14

Real Wealth Positions At A Glance

Company Name (Ticker)

Most
Initial
Current
# of
Quote as of Purchase Recent
Date Trade Date Shares
2/13/12

Avg. Cost
Basis Per
Share

Current
Value
($)

Gain/
Loss ($)

Total
Return
(%)

Current
Reco

What to do if
you dont own it

BASIC SURVIVAL STRATEGIES

Gold Bullion (GOLDS)
$1,722.27
DWS Gold & Precious
$16.36
Metals Fund (SCGDX)
SPDR Gold Shares (GLD)
$167.51
Tocqueville Gold Fund
$77.32
(TGLDX)
$14.47
US Global Investors World
Precious Minerals Fund (UNWPX)
US Global Investors Gold and $13.66
Precious Metals Fund (USERX)
Market Vectors Renminbi/USD $41.15
ETN (CNY)
ProShares UltraShort Gold ETF $15.96
(GLL)
$22.03
PowerShares DB US Dollar
Index Bullish Fund (UUP)
EverBank 3 Month Australian 2.75%
Dollar WorldCurrency CD
EverBank 3 Month New Zealand
Dollar WorldCurrency CD
1.25%

05/25/04
05/25/04

05/25/04
05/25/04

12.71
106

$388.65
$10.14

$21,890.05
$1,734.16

$16,950.31
$659.32

343.14%
142.12%

Hold
Hold

04/18/05
09/16/08

04/18/05
09/16/08

100
55

$42.69
$30.65

$16,751.00
$4,252.60

$12,482.00
$2,566.85

292.39%
161.17%

Hold
Hold

09/16/08

09/16/08

141

$11.35

$2,040.27

$439.92

71.55%

Hold

09/16/08

09/16/08

177

$10.13

$2,417.82

$624.81

61.97%

Hold

12/20/10

12/20/10

100

$40.05

$4,115.01

$110.01

2.75%

Hold

09/19/11

12/20/11

20*

$17.74

$319.20

-$35.60

-10.03%

Hold

12/19/11

12/19/11

200

$22.57

$4,406.00

-$108.00

-2.39%

100

02/21/12

02/21/12

100

02/21/12

02/21/12

100

$10.43

10/31/11

10/31/11

100

$14.36

$1,043.00

-$393.00

-27.37%

$10.19

10/31/11

10/31/11

100

$11.57

$1,019.00

-$138.00

$19.47

10/24/11

12/19/11

400

$18.98

$7,788.00

$196.00

07/18/11

07/18/11

1318*

$7.59

$9,894.60

-$105.40

(Buy 100 shares

at market)
-

Hold;
(Buy 200 shares
stop $19.81 at market)
-

MATERIALS, ENERGY & AGS

ITT Corp (ITT)

$22.45

Anadarko Petroleum Corp $87.34

(APC)
Archer-Daniels-Midland Co $30.93
(ADM)

Buy100 shares at $20 or

better; stop $15.97
Buy100 shares at market;
stop $74.91
Buy 100 shares at market;
stop $22.89

THE SPECULATOR
ProShares UltraPro Short
S&P 500 ETF (SPXU)
ProShares UltraShort Silver
(ZSL)
ProShares UltraShort Euro
(EUO)

Hold;
stop $8.97
-11.93%
Hold;
stop $8.23
2.58%
Hold;
stop $14.58,

(Buy 100 shares at

market; stop $8.97)
(Buy 100 shares at
market; stop $8.23)
(Buy 400 shares at
market; stop $14.58)

INCOME INVESTMENTS
Aberdeen Asia-Pacific
Income Fund (FAX)

$7.51

Position Performance
$44,424.24
Initial Open Positions Cost1
Open Positions Value1
$77,670.71
Open Positions Total Return Since Inception1
74.84%
RWR
YTD Total Return2
Total Return Since Inception2

3.28%
13.32%

S&P500
6.09%
42.23%

2.33%

Hold

(Buy at market)

Open positions since initial purchase date. 2Open and closed positions year to date (YTD) and inception to date (ITD).
* For tracking purposes only.
Disclaimer: Real Wealth Report is strictly an informational publication and does not provide individual,
customized investment or trading advice to its subscribers. The money you allocate to speculative trading
should be strictly the money you can afford to risk. While every effort is made to simulate the actual experience
of subscribers, all performance figures must be considered hypothetical. References to examples of past
performance are not intended to provide a total picture of position results, and past results are no guarantee of
future performance. The table includes all open positions recommended in the monthly Real Wealth Report
newsletter or flash alerts. If your positions are larger or smaller, you should adjust the specific recommendations
accordingly. Entry and exit prices are based on the closing price of the security on the day after it is recommended.
Data Source: Bloomberg. Data date: 2/13/12.

Copyright 2012 by Weiss Research, Inc. 15430 Endeavour Drive, Jupiter, Florida 33478. Sales: 800-604-3649. Subscription rate: $189 for 12 monthly
issues. Single Issue Price: $15.75. Editor: Larry Edelson. Product Manager: Zachary Lehner. Contributors: Cathleen Siegel, Marty Sleva. POSTMASTER: Send address changes to Real Wealth Report, 15430 Endeavour Drive, Jupiter, Florida 33478.

www.WeissResearchIssues.com

February 2012

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