Friday, August 28, 2009

They're Betting Millions on $10 Natty Gas

Natural gas may be plunging to seven-year lows, but one fund is betting heavy that the commodity will rebound by more than 200% over the next six months. And we're looking to profit right along with them.

But there's a catch. . . You must be patient and bet smart.

Right now, gas demand is so weak and supply is so great that some believe we could run out of storage capacity before the winter heating season even starts. That alone would require gas companies to cut back on flow from wells or shut down production, which would push prices back up.

Plus, the glut could eventually and easily turn into a deficit ― which would happen more quickly if and when the economy begins to recover. Any recovery would quickly eat through inventories, simultaneously catapulting natural gas prices.

And there's even hope that a cold winter will spur strong demand.

And while it may not set the stage for an immediate rise to $10, we could easily see $7 to $8, as we head into the winter months.

It's part of the reason why one fund spent millions buying up January and February 2010 call options. . . and why we're safely and cautiously following their lead.

But like we said, patience is required.

We could still see further price deterioration, as companies with high debt and interest payments fail to cut production. In Q2 2009, for example, companies like Chesapeake Energy (CHK) used higher production efforts to beat Street earnings expectations.

Even the Gas Companies are Bullish

When you review as many company earnings reports and forecast estimates as we do, you pick up on the sentiment of the business community, which is bullish in the case of natural gas.

Here's what EOG Resources (EOG) had to say, for example:

"Our view of the North American gas and oil markets is consistent with our previous earnings call, except that we've become more bullish regarding 2010 and 2011 gas prices. . . we expect the gas market to turn sometime early in 2010 almost regardless of what happens to LNG imports."

Even Obama Could be a Nat Gas Boon

The Obama Administration will see some type of environmental legislation aimed against carbon and its role in the theory of global warming. So over the next few months, we'd expect to see either a "Cap and Trade" or carbon tax (the price of which can eventually be passed to the consumer), which some in the industrial world are pushing for.

And for natural gas, either is attractive. . . since it's much cleaner than both oil and coal. So if we see a carbon tax passed this year, natural gas would immediately become even more competitive and expensive than it is now.

While the current situation requires patience, it's a value investor's dream come true.

Some companies will make a killing from the collapse in natural gas prices. . . others will just fade away into oblivion. But you only need to buy into the bigger-named stronger companies, like Chesapeake and Petroquest (PQ), to take advantage of the eventual recovery.

Just like a value investor, identify the beaten-down bargains and hold on until the rest of the market catches up to your way of thinking. . . which they'll eventually do in time. If you thought $4 natural gas was a bargain, $3 or slightly below is an absolute steal.

Our near-term forecast pegs natural gas at $5. . . but remember, you must be patient and bet smart in this market. Natural gas will not recover overnight. . . but it will pay off.

Tuesday, August 25, 2009

This "Unknown" Factor Will Help You Profit From Solar Stocks

This past Friday, while the market was barreling north, thanks to the obligatory positive remarks made by Ben Bernanke (who didn't see that one coming?), an analyst from Jefferies & Co. issued downgrades on a number of solar stocks.

Needless to say, the sheep followed, and most solar stocks ended the day in the red.

While there are certainly issues still plaguing the solar market, one reason given for these downgrades is a bit questionable. That reason being, "end markets are not ready to support the levels of volume production being planned for 2010."

Essentially, in an effort to counter lower average selling prices, many solar companies are dependent upon heavy volume. But to assume that end markets are not ready to support levels of future volume production is not a safe assumption to make. At least not with so much stimulus money and muscle backing increased solar integration in both China and the United States.

Granted, since much of this solar support has either just started or is set to start shortly, it's difficult to quantify. The fact is technically, the effect of this government support is still an "unknown."

Sure, we can predict how it'll affect the market. . .  But when you make a prediction, isn't that really like making a guess? And when it comes to making investment decisions, who wants to just guess when you have current, objective data right in front of your face?

Yes, $117 million of the stimulus has been set aside for solar. But most of that money hasn't even started to funnel through the system yet. So, do we disregard that funding, although we know it's a lock ― but just hasn't traveled from point A to point B yet?

Or do we figure into the equation the result of this funding, before it actually gets to where it needs to go? Moreover, do we figure into the equation the tax credit extensions that take us through 2016, or an increased demand coming as a result of lower pricing?

Based on how this market has unfolded over the past five years, this can actually be a tough call to make.

What If?

We've never been comfortable with completely disregarding the "what ifs." After all, the "what ifs" are what made most Green Chip investors get into the renewable energy market to begin with.

What if oil prices climb above $60 a barrel?

Done!

What if climate change becomes a launching pad for the integration of renewable energy?

Done!

What if we deplete all of our fossil fuel resources?

Between now and 2025, it is likely we will see the peak of every single one of our finite fuel resources.

The point is, when it comes to renewable energy, you can't always disregard those "what ifs" and expect to make any money.

Especially when you throw China's energy mess into the mix.

What if China. . .

Let's look at the numbers.

According to the State Grid Corp. of China (the largest electric power transmission and distribution company in the world):

  • China's power demand is expected to more than double from 3.4 trillion kilowatt-hours in 2008 to approximately 7.7 trillion kilowatt-hours in 2020.

  • Installed power generating capacity is expected to increase from 793 gigawatts in 2008 to 1,600 gigawatts in 2020.

  • Installed capacity of clean energy will account for about 35% of the total installed capacity in 2020. Today, it represents about 10 percent if you include nuclear, about 8 percent if you exclude nuclear.

So how is China going to facilitate a 25% growth in clean energy capacity?

Well, some of this will come from China's new solar initiatives. These include:

  • The Ministry of Finance and Ministry of Science and Technology's Golden Sun solar subsidy

  • National Development and Reform Committee's (NDRC) feed-in tariff

  • Ministry of Finance and Ministry of Science and Technology's Building Integrated Photovoltaics subsidy

About a month ago, guidance was given on the Golden Sun subsidy. It will be capped at 640 MW, which works out to 20 MW per Chinese province.

Separate from that is the NDRC's feed-in tariff. And while the specifics aren't due out until Q4, it's expected the tariff will cover 1.5 GW of solar installations through 2011.

Then there's the 20RMB-per-watt subsidy for building integrated photovoltaics, which is expected to cover 500 MW through 2011.

In total, these subsidies will cover 2.6 GW of new solar through 2011.

This kind of stuff is not irrelevant, and in our opinion, should not be disregarded when analyzing the ability of end markets to support levels of volume production planned for 2010.

The fact is pricing will continue to fall, production will continue to increase (instigated by government support and continued through increased consumer demand, as a result of decreasing prices), and the long-term sustainability of the solar industry will be validated through technological innovations and the holy grail of grid parity ― which many believe is only about six to seven years away.

This is the future, my friends. And those who disregard solar because of random downgrades and herd mentality will miss out on one of the greatest investment opportunities of the 21st century.

To a new way of life, and a new generation of wealth. .

Monday, August 24, 2009

Don't Wait for Wall Street to Hand You an Opportunity - Make Your Own

You've heard of initial public offerings — IPOs.

The talking heads on CNBC love to play them up.

Trouble is, people who buy them get skinned alive. Historically, their first-year performance is worse than the broad stock market.

And thanks to the credit crisis, IPOs are few and far between anyway.

But I know another special class of stock you can put in your portfolio today… and 99% of investors have never heard of them.

In fact, they fly so far under the mainstream's radar, I call them "covert public offerings" — "CPO's."

I recommended a "CPO" to my inner circle at the beginning of 2009. We got out of half of it for 59% gains in a month… and 132% in four months.

It takes just a handful of wealthy smart-money types to create a "CPO." They do it whenever they get frustrated with the slim pickings on Wall Street.

But don't get the wrong idea. They don't have a monopoly on "CPOs."

You can buy them too.

Best of all, you don't need any sort of special trading account.

You don't need to mess with any paperwork.

You can get into "CPOs" in an existing brokerage account.

If you can buy McDonald's or Microsoft, you can buy a "CPO." Just minutes from now…

If You Can Buy Blue Chips, You Can Make These Plays for Up to 402% Gains

On January 9th there were no good buys on Wall Street.

So I told my readers to do the same thing the world's smartest investors do.

I showed them how to create their own good buy… using a "CPO."

Just 31 days later, I recommended selling half the position… for gains of 59%.

By May, I recommended unloading the rest… for gains of 132%. That's a double in less than four months!

Think about that. Grabbing 59% gains in a month… in a market you've never heard about until today… and doing it with your existing brokerage account.

It really IS that easy…

And I have five other plays in mind — just like it — right now.

Imagine picking up an easy triple… a gain of 206% or more… on a play linked to a market where demand rarely falls.

Another could deliver 402% gains on China's insatiable demand for the world's most precious commodity.

And yet another gives you access to the investing savvy of a wealthy European who's been compared to one of the world's greatest investors. I figure it's good for at least a 54% gain.

And again… this is as easy as stepping off a curb. You can get a piece of the action on all of these as easily as buying a share of Home Depot or Procter & Gamble.

All you need is your current brokerage account or IRA. A few clicks of a mouse, and you have a piece of the action in your portfolio.

Sound intriguing?

I'm just getting started.

Over the next five minutes, I'll clue you in to two other markets you never knew about. And every one of them you can tap into as easily as the S&P 500.

But first, let me tell you a little more about this "under the radar" market where my readers pulled in 59% in 31 days… and 132% in less than four months.

When Wall Street Offers No Good Opportunities, Here's How to Make Your Own

It's this simple: when Wall Street presents no good buying opportunities, the world's smartest investors make their own.

Really. These guys look around on the NYSE, the AMEX, the Nasdaq, and they see NOTHING worth putting their money into.

So here's what they do instead.

A bunch of them spot a good opportunity in a quality company that's NOT traded on one of those exchanges. Something with the potential for big gains… often very quick.

So they get together and approach a broker to make it happen. Then the broker creates a "CPO" — a "covert public offering."

Thing is, the smart-money types make the "CPOs" happen. But again… they're available to you, too.

And despite their "covert" nature, they're just as easy to buy as a blue chip.

In fact, some of these companies are blue chips.

But I bet nine out of ten U.S. investors have never heard of them.

Forbes and Fortune rarely say anything about them. They don't show up on Internet stock screeners. Conventional Wall Street analysts don't give them the time of day.

Result? Ordinary investors miss out on the quick gains of 59% and 132%. For now, let me address another question you might have…

Why Can't You Find These 59% and 132% Gainers on the Regular Exchanges?

By now, you're probably wondering something.

If these stocks are so good — some even blue chips — why can't I find them on the major exchanges?

Well, avoiding the major exchanges gives these blue chips a couple of huge advantages.

First, they don't have to follow the exchanges' rules.

That means they don't have to prepare financial statements following U.S. accounting standards. (Instead they use international standards, which are just as good.)

And here's another thing, probably more important.

They don't have to follow the rules of the Securities and Exchange Commission.

That means they don't have to follow the Sarbanes-Oxley Act.

Maybe you've heard of that one. Congress passed it after the Enron debacle. It was supposed to keep companies' accounting on the up and up.

But for too many companies, it just imposed big-time paperwork hassles. More than a few firms don't want to deal with — including these "CPOs" I've talked about.

But don't get the wrong idea.

I'm not talking about fly-by-night companies here. As I said, some of them are blue chips.

Let Me Take the Wraps Off Five "Covert Public Offerings" — RISK-FREE

So, you're wondering, what gives? How can these blue chips thumb their noses at the U.S. exchanges and the U.S. government?

Simple… We're talking about blue chips based in other countries.

Top-notch companies. They just happen to have a home address somewhere other than the USA.

So they're already governed by the rules of the stock exchanges in their home countries. And government regulations, too.

They simply don't want the hassle of dealing with U.S. rules and regulations on top of that.

That's where these "covert public offerings" come in. Smart big-money investors who want a piece of these companies create a "CPO" so they can invest in them easily.

But they don't make a big deal about it. That's why I call it "covert."

Still, you benefit… because once they create a "CPO," you can buy a piece of these outstanding companies as easily as buying McDonald's or Wal-Mart.

Oh, I should mention one other advantage of these unique investment opportunities.

These Plays Can Also Get You Out of the U.S. Dollar.

In fact, they give you exposure to some of the world's soundest currencies.

Like the Norwegian krone — the strongest currency in the world so far in 2009.

Or the Singapore dollar — which investment legend Jim Rogers calls the world's best currency.

That should make you feel pretty good at a time when the U.S. dollar's in deep trouble.

In fact, the dollar's tumbled big-time in recent weeks… and it's teetering on the edge of an even bigger fall. That means there's no better time than now to jump in to these plays.

Put it all together, and we're talking about some of the best assets in the world. And until today, you've probably never heard of them… simply because they don't trade on the NYSE or the other big U.S. exchanges.

Why would you want to miss out on these world-class assets… at dirt-cheap prices… with huge upside potential?

You don't have to.

You can learn about five "CPOs" primed for big gains in a special report I've prepared just for you. It's called How to Collect 402% Gains With "Covert Public Offerings."

Every one of them has the same potential as the play I told you about at the beginning of this letter — 59% in a month, 132% in four months.

Right now, let me tell you about the immense potential of these plays…

The World's Largest Nitrogen Producer — At 66% OFF

"What?" you're saying. "Nitrogen? This is a little too far-out for me."

Stick with me for a second. Nitrogen is the key ingredient in fertilizer.

As you know, fertilizer makes modern farming possible. Nitrogen is one of those things that stand between the world's people and mass starvation. It's big business.

And it's bound to get bigger as more people in developing countries join the middle class.

It just happens that the world's biggest nitrogen producer trades on the Oslo stock exchange. You'd never find it unless you knew where to look.

And this stock's an easy triple from here — a gain of 206%.

Management has made some super-smart acquisitions to get where they are.

They bought a competitor in Brazil to become a major player in one of the world's fastest-growing emerging markets.

They bought a competitor in Europe to get access to a prime phosphate mine.

They bought a competitor in Canada for access to ammonia (which contains 82% nitrogen).

And yet, with all that buying, this company's in a prime position to profit — big.

New ammonia projects are being shelved left and right. The financial crisis means no credit for its competitors. And yet, the recession hasn't stopped global demand for grain.

Best of all worlds for this company. If you were to bust up the company into its different operating units and sell them as stock, you'd be looking at a combined market cap of  $25 billion.

You're looking at an easy triple from here.

Again, it trades in Oslo. No way is your broker going to know anything about this.

But you can buy it as easily as any U.S.-issued share… because some smart investors have turned this into a "covert public offering."

You can buy the "CPO" of this company as easily as shares of Dell or General Mills.

And because Norway's currency is looking super-strong compared to the dollar… with even more strength going forward… now's the perfect time to get in.

I'll show you how in a special report I'd like to send you, absolutely risk-free. It's called How to Collect 402% Gains With "Covert Public Offerings."

Once you read it, you'll be seconds away from putting this great company in your portfolio, if you choose.

Or how about this opportunity?

China's Record-Setting Water Firm… for Only $2 Per Share

I'm looking at a $1 billion company that's doing gangbuster business with water filtration in China, the parched Middle East, and drought-stricken northern Africa.

More to the point, this is a company that did record business in 2008, and it's on track to do the same in 2009. Revenues are steady and net profit is up.

In this economy, how many companies can you say that about?

It's a real "bootstrap" kind of story, too — founded 20 years ago by a woman who raised the start-up money by selling her condo and her car.

She still owns 30% of the company. So she has a powerful incentive to treat her shareholders as well as she treats herself.

Oh, here's a nice bonus. This stock gives you exposure to the Singapore dollar.  Investing legend Jim Rogers calls it the world's best currency.

It trades in Singapore. Once again, no access on the big U.S. exchanges.

But you can still buy this stock — for just $1.50 a share — as easily as hitting a few buttons and picking up shares of Home Depot.

I figure the stock's an easy double from here. But that's just the short-term outlook.

Longer term, I'm looking at $5 or $6 a share. At today's prices, that's a gain of 302%.

And now's the perfect time to move on this. Water rates in the company's home market of China are well below the world average. They're about to spike upward… delivering a big boost to the firm's bottom line.

I can't wait to share the name of this company with you. It's in the special report called
How to Collect 402% Gains With "Covert Public Offerings."

In just a few minutes, I'll tell you how to get your hands on a copy.

Then you'll be on your way to holding some of the world's best assets you'd never heard of until today.

But right now, let me share with you another one of these great CPO stories…

Own the "Swiss Berkshire" for as Much as 35% OFF

Chances are you know all about holding companies… the fantastic gains they deliver… and the historic performance of the most famous one of all.

Problem is, once they become really big, they can no longer invest in the sort of small up-and-coming companies that delivered all those great historic gains.

Which brings me to an opportunity that's like turning the clock back. You can get it right now for 35% off.

It's run by a guy Forbes calls the "Belgian Buffett." He lives modestly near his boyhood home, but shies away from the spotlight. Which just means he has more time to make great deals for himself and his shareholders.

His holding company has a hand in five great European firms. Everything from oil to power generation to cement to garbage disposal… even wine.

If you add up this company's stake in all its different businesses, you get a figure at least 35% higher than the firm's market cap.

That's like getting all these great businesses at a 35% discount.

Eventually the market will catch on… and the share price will catch up.

That's on top of the value of the businesses themselves going up.

And it's also on top of any currency gains you get from this play. See, the stock trades in Switzerland. So you get all the upside of the Swiss franc.

All of these factors are about to start playing out within weeks… maybe even days.

And until then, you collect a nice 4.5% dividend.

You can own shares just as easily as an American blue chip — even though it doesn't trade on the American exchanges.

Let me tell you about this company — along with the fertilizer firm, the Chinese water play, and two other great opportunities — in my report How to Collect 402% Gains With "Covert Public Offerings."

What are the other two opportunities I'm talking about?

Let's jump right in…

One of the World's Lowest-Cost Iron Producers… With a Prime Customer Already Lined Up

Late in 2009, one of the world's newest — and biggest — iron ore mines is coming on line.

We're talking a billion tons. Producing eight million tons a year to start, ramping up to 16 million… and continuing for another 30 years.

By itself, that's no big deal.

But consider this…

  • The mine is in Canada — little chance of a government confiscating the property

  • It's located near existing rail lines for transport and hydroelectric plants for power

  • That means its costs will be among the lowest in the industry

  • A Chinese company has already signed up to buy 60% of production at market prices

The company that owns this mine is already generating $400 million in cash flow.  Compare that to a market cap of just $600 million… and you can see how dirt-cheap this stock is.

Better yet, you get exposure to yet another strong currency — the Canadian dollar.

This pick is already up 54% since I recommended it barely a month ago. 

But it's not too late to get in. Better act soon, though… once production is underway in just a few weeks, the pundits on CNBC will finally wake up and take notice.

They've never heard of this company, but now you have… and even though it doesn't trade on a U.S. exchange, you can buy it as easily as Kraft Foods or AT&T.

I'll show you how in How to Collect 402% Gains With "Covert Public Offerings."

You'll also get the skinny on another Canadian gem I think is set to quadruple…

A Potential Quadruple — Even if Natural Gas Prices Stay At Historic Lows

The company I'm thinking of is a natural gas producer that can be had for about $2 a share.

Except it's worth easily double that.

I'm looking at a report it filed with the Canadian government detailing how much gas it's sitting on.

There's so much there, it's worth double the company's market cap… and this is with natural gas prices at historic lows.

That's a $2 stock that turns into $4… just the stuff that's proven.

Then there's the additional property where geologists have made some ballpark estimates.

Now we're talking about a potential $6 stock. A triple.

But there's still more acreage the company owns that's yet to be explored.

If that plays out, we're talking at least $8 a share… and maybe as much as $11.

And that's if natural gas prices go nowhere. I don't think they will. Too many people in Eastern Canada and New England want access to what this company has. Natural gas prices sit at historic lows. That can't go on. And hurricane season is here too.

Point is, this potential to quadruple your money could start playing out just days from now.

No one's writing about this company in Fortune or at Marketwatch. But you can get it — right now — at just $2… and you can buy it just as easily as clicking a few links on the website of your existing brokerage account.

You can buy this one just as easily as the Canadian iron ore play… the Swiss Berkshire… the Asian water play… and the big-time nitrogen producer.

You haven't heard of any of these "CPOs" until now. And I'll reveal all of them in How to Collect 402% Gains With "Covert Public Offerings."

Let me recap something important here. Because these stocks don't trade on the big exchanges… computer screens won't pick them up.

You won't see mainstream columnists writing about these stocks in Money or BusinessWeek… because they just don't know about these opportunities.

And you can forget about your broker catching onto them.

There's no incentive for him to recommend these names, even if he knew about them.  It takes serious research to uncover these ideas.

But that's what I'm all about…

Let Me Send You 18 "Special Situation" Opportunities… RISK-FREE

"CPOs" fall under a category of investment opportunity known as a Special Situation.

A Special Situation is not your usual run-of-the-mill stock idea that everybody and their mom already knows about.

Look, you don't need to plunk down a lot of dough so some guy can tell you what a great deal Wal-Mart is right now.

If that's the kind of stuff you're interested in, you can stop reading right here and go back to trolling the Dow Jones Industrial Average for investment ideas… you and about 300 million other Americans.

No, this is about finding ideas that aren't on the front pages. Not yet, anyway.

Thing is, "CPOs" are just one Special Situation sector I have my eye on right now.

Read on, and I'll reveal five Special Situation sectors… 18 opportunities in all, including the ones I've already told you about… and when I'm done, you can put your newfound knowledge to work right away.

Because, as I said, you can buy these stocks as easily as you can buy McDonald's or Coca-Cola. A few clicks of the mouse, you're home free.

You just learned some things about Special Situation sector #1. Now let me open your eyes to another Special Situation sector.

Here you can be your own venture capitalist — from the comfort of the chair you're sitting in right now.

Special Situation #2:Be Your Own Venture Capitalist… and Turn Every $1 Invested Into $50

"Venture capitalist."

Sounds exotic, doesn't it?

Think of venture capital and you might think of the megabucks people who fund cutting-edge tech and biotech research. They're betting they'll make even bigger megabucks when the research turns into something customers will pay money for.

Not the sort of thing within the reach of someone like you, right?

Well, I have a little twist on venture capitalism that's totally accessible to you. Just as accessible as a "covert public offering", in fact.

And like "CPOs," you can buy these just as easily as one of Disney or DuPont.

Become the sort of venture capitalist I'm talking about, and you can have a steady combination of capital gains, income… or both! Play it right, and you can even turn every $1 invested into $50.

The kind of venture capitalist companies I'm thinking about work in the natural resources field.

Except they don't really do any "work" at all.

They put up the money for geologists, engineers, drillers, and miners to do the real work.

And when they pull oil or gold or copper out of the ground, they collect a cut of the profits.

It's a brilliant way to make money in the resource sector. No equipment expenses, no vast payroll to meet. Just sit back and collect a healthy cut of the profits. Royalties.

That's exactly the strategy a company called Franco-Nevada used earlier this decade. It put up the money for some gold miners in the western U.S.

Brilliant strategy. It popped from a few bucks a share to $180. Early investors made 50 times their money.

I've been keeping my eye out for the next generation of Franco-Nevadas. And I've spotted three opportunities.

Make At Least Ten Times Your Money Feeding China's Insatiable Appetite for Steel

Chances are you don't think much about nickel.

Sure, it's the main metal in an American five-cent coin.

But it's also an essential ingredient in stainless steel. Without nickel, moisture corrodes steel. And heat warps it.

No nickel, no jet engines. Or food-processing equipment. Or hundreds of other uses.

China needs nickel to keep growing. Lots of it. And one "venture capital" firm is supplying the cash to pull nickel from the ground in northern Canada. Lots of nickel.

More than half of this company's worth sits in this one mine. And it's not just nickel being mined there. Copper and cobalt, too.

There's only upside from here. Nickel prices are coming off historic lows. The last major nickel mines anywhere in the world came on line in 2007.

But the story gets even better.

Because another third of this company's worth comes from a gold mine in South America.

And it's sitting on more than 80 other properties. Many of those aren't producing anything at all… not yet, anyway.

But when they do, look out.

How much can this one "venture capital" play make for you?

Let's look at just the nickel. 

For every $1 the price of nickel goes up, this company will make another $2.4 million.

If nickel goes from the current $7.50 a pound to, say, $12.50… we're looking at an immediate double.

That's before you factor in the gold.

Or all of the other projects just coming online (ten just in 2009)… or still in the planning stages.

Hang onto this long enough, and you're looking at a classic ten-bagger.

In fact, I think you can buy and hold this single stock for ten years and ride it all the way from under $3.50 to over $60. That's more than 17 times your money.

But you need to get in now.  Nickel prices are just coming off historic lows. And with clear signs of economic recovery in China and other developing countries, it could rocket up faster than anyone expects.

I can't wait to tell you all about this company. I bring you all the details in another special report. This one's called Be Your Own Venture Capitalist: Royalty Plays for 2010 and Beyond.

I'm making it available as part of a package deal along with How to Collect 402% Gains With "Covert Public Offerings."

But hold on. I'm just getting started. Because there's more than just one of these stellar "venture capital" opportunities. In fact, you can think of this the same way as "covert public offerings" — a whole new market you'd never even heard of before today!

How a 19th Century Railroad Gone Bust Can Deliver You 105% Today

How'd you like to own a piece of prime real estate that's home to a steady stream of oil and gas revenue?

You can — and just as easily as clicking on a brokerage account's website and buying shares of Target.

Right now, you can buy into a land trust that owns a patch of property in Texas.

I'm talking a big patch. As big as the state of Rhode Island.

The land was left over from a bankrupt railroad venture in the 1880s.

For 130 years now, investors have bought in… and now's the best time to start hauling in big money.

That's because this trust is steadily growing its royalty stream from all that oil and gas.


Look how this company doubled its royalty revenues in four years!

At $70-a-barrel oil, that alone makes the company worth $20 a share.

That doesn't include the value of the land itself, some of which it sells from time to time.  Or the grazing rights. Or the easements and other special deals.

Or the upside of a rising oil price. That's why it's important to get in on this play now… to capture as much gains as possible from a return to rising energy costs.

And then there's management's buyback program. Any new money that comes into the trust is used to buy back shares. That means fewer shares in circulation… so the shares you hold onto grow in value.

No wonder I see such a bargain at just $33 a share.

And I'll tell you all about it in the special report, Be Your Own Venture Capitalist: Royalty Plays for 2010 and Beyond.

In a few moments I'll tell you how you can get your own copy, in addition to How to Collect 402% Gains With "Covert Public Offerings" — available in tandem under a special offer.

Put those two reports together and we're talking eight picks in two Special Situation sectors you'd never heard of until you started reading this letter.

There are "CPOs" — "covert public offerings" — giving you access to some of the world's best assets in an underground market. And there are royalty opportunities — giving you a crack at "personal" venture capital plays.

And there are still more Special Situation sectors you can use to jump-start your portfolio.

Here's another you can take advantage of. It's like buying stock options. Only you don't have to set up an options trading account. And these options never expire.

Special Situation #3:Stock "Options" That Never Expire

Chances are you already know a little about options trading, even if you've never done it.

So you know that an option is a leveraged bet on the direction you think a certain investment will go. A call option, for example, can deliver gains in the hundreds of percent on a small move up in the price of a stock, or a commodity, or a currency.

But if you don't know what you're getting into, you could lose your entire investment.  That's because every option has an expiration date.

It could be a few weeks out, or a few months. But if the move you're betting on doesn't materialize by that time, the option "expires worthless"… and you're wiped out.

What if you could buy an option that never expires?

Imagine buying a "call option" on gold or oil or other commodities… and you could just wait indefinitely for the price to rise. Gold rises from $950 to $1200 — a 26% rise — and you make 300%, 400%, 500% or more on the "option."

You can… and just as easily as buying shares of Johnson & Johnson or Intel. No special account to set up, nothing complicated.

All you need is the right stock in the right sector… and you can leverage your gains on gold or oil or other resources — just like options, but without ever sweating an expiration date. 

And like a stock option, you can load up on some of these for under $10 a share.

Interested? Great! Let's get started…

"Options" on the "Energy Metal" — Good for Gains of 166%

The most intriguing "non-expiring option play" I have in mind isn't on gold or oil or anything you've probably heard of.

It's on a metal called molybdenum.

Yeah, it's a tongue-twister. Don't worry if you can't pronounce it. Even folks in the know call it moly — like the name "Molly."

Without moly, modern skyscrapers would collapse and cars would crumple even in low-speed collisions.

That's because steel reinforced with moly is much stronger than ordinary steel.

Combined with other metals, moly makes your car lighter and more fuel efficient… while actually strengthening the body.

But it's in the production of energy that moly really earns its keep. The uses are almost endless…

  • Reinforcing oil and gas pipelines
  • Refining oil into gasoline, diesel, and jet fuel
  • Pipes in nuclear power plants

No wonder some people call it the "energy metal."

Here's the thing. Most of the time, moly is mined as a byproduct of some other metal — usually copper.

So it's tough to unearth a moly "pure play." But I've found one with immense triple-digit potential.

Let me lay out a few of its advantages…

  • Two mines, one in the United States, one in Canada. All told, it's sitting on 445 million pounds of moly

  • One mine in Canada soon to come on line

  • A "roaster" in the United States. What refineries are to oil, roasters are to moly. This company is one of the few with its own roasting capacity. So it can get its metal to market quickly.

In the spring of 2009, shares of this company jumped 50% in a month. That's because signs of economic life are showing up in the developing world… which means demand for the "energy metal" is just about to take off.

So it's not too late to get in. Not yet anyway. 

Let me share the name of this company in yet another special report I'd like to send your way. This one's called "Options" That Never Expire: Resource Riches for 2010 and Beyond. It's available in a special combo pack with the other two reports I mentioned earlier.

You'll also learn the name of two other "option plays" you can hold onto for as long as it takes to get your big payoff… and they're just as easy to buy as a Dow 30 stock.

If Gold Hits $1,000, This Gold "Option" Can Deliver You 157%

Earlier I told you how the sort of "options" I'm talking about could deliver triple-digit gains on just a 26% gain in the gold price.

Now I'm going to go one better.

Here's an option on gold that's set to deliver you 157% gains if gold tops $1,000 an ounce. (It's $962 right now.)

And you're still good for a 71% gain even if the price of gold doesn't budge.

Impossible?

I have my eye on a little gold miner operating in Brazil that plans to grow its production very, very quickly. I mean, veteran gold experts have never seen anything like this.

For every one ounce of gold it's mining today, it could be pulling six ounces out of the ground by 2014. Take a look…

Even veteran mining experts say this company will grow its production at an unprecedented rate

But longer term, there's way more than 157% potential here.

See, as the mines ramp up production, costs will come down. That's even more money in your pocket. We're looking at making potentially six times your money.

And remember, this is if the gold price goes nowhere. If it starts shooting up, we're looking at ten times your money… easy!

This "option" never expires… and you can buy it as easily as General Electric.

And the time to act is now. One of the company's biggest projects is set to expand in just a few weeks.

I explain it all in the special report "Options" That Never Expire: Resource Riches for 2010 and Beyond. 

Don't forget that report also has the details on that moly "option" too.

And there's one more play I've put in there that's just as lucrative.

An "Option" on Natural Gas Set to Triple

Natural gas prices are the lowest they've been in years.

Now you could go onto the futures market and make a bet that they're about to reverse.

That's if you have a futures account and you don't mind the prospect of losing more than your initial investment.

Or you can take out this "option" play on natural gas with the potential to triple.

I'm talking about a company with huge acreage in the Barnett Shale region that lies beneath Dallas-Fort Worth.

Plus more than 100 sites it's exploring on the Gulf Coast… a new discovery in the North Sea… and a smattering of other properties around the continental U.S.

So what, you say. What makes it a great buy?

Here's what makes it a great buy: the Barnett Shale properties alone are worth the company's share price. Everything else you get free.

So even if natural gas prices stay in the doldrums, new discoveries coming online will be new sources of revenue.

And if natural gas prices come off their historic lows… and I think they will, probably within a couple of months … we're looking at an easy triple.

So now's the time to pounce.

Let me tell you about this opportunity — and the other two I just described — in the special report "Options" That Never Expire: Resource Riches for 2010 and Beyond.

I'll show you how you can get a copy absolutely risk-free in just a few moments.

Don't forget, you'll also get the special reports How to Collect 402% Gains With "Covert Public Offerings"… and Be Your Own Venture Capitalist: Royalty Plays for 2010 and Beyond.

I also have two other reports I'd like to send your way, as soon as I get your say-so.

But first, I should introduce myself…

"CPOs"… "Personal Venture Capital Plays"…"Options" That Never Expire…I Live for Discovering These Special Situations

My name is Chris Mayer.

Chances are you already know me through my monthly investment advisory letter Capital & Crisis. Or my appearances on CNBC. Or my book, Invest Like a Dealmaker.

So you already know what I'm all about… finding quality companies at cheap prices.

You know I like companies where management owns a good chunk of the shares. That makes their interests the same as your interests.

You know I like companies that are easy to understand. Financial sleight-of-hand never impressed me, and I steered my readers clear from those companies.

And you know I like companies sitting on lots of cash and little debt.

And without bragging too much, I think that strategy's turning out pretty well. Over the last five years, I've generated triple-digit gainers for readers of Capital & Crisis like…

  • 109% on Orient-Express Hotel
  • 121% on Compannia Paranarnse
  • 77% on Ameriprise
  • 145% on Imperial Sugar
  • 71% on Intrawest
  • 100% on Grupo Aeroportuario del Sureste
  • 232% on Agrium
  • 109% on Leucadia National
  • 114% on Brookfield Management
  • 115% on Northwest Pipe

So far in 2009, we've racked up gains like these…

  • 46% on a mid-tier gold miner
  • 66% on a maker of oil drilling rigs
  • 94% on a maker of pipeline parts
  • 63% on a key supplier to farmers

I like it when I can help make decent money for folks like you. So it's really gratifying when I get emails like these…

I've done very, very well
"I've been a satisfied subscriber since 2005 and thanks to you I've taken a 401(k) with a bunch of lame investment options and put it into a self managed fund and done very, very well with your recommendations."
— Mark R.
Calm advice in turbulent times
"Your calm and reasoned analysis during turbulent times has been worth the subscription price."
— Stuart T.
You can do no wrong!
"With all the sparkling gains in your picks, I think someone should nominate you for membership in the Genius of the Month Club.  It looks as though you can do no wrong."
— Mike P.
Terrific call!
"Ameriprise was a terrific call. Your track record is extraordinary."
— Marc C.
Timely… Right on… Well-Researched
"Your picks are not just timely and right on, they are well researched and thoughtfully presented."
— Lone V.
You keep it simple
"I just wish I had more funds for your latest recommendations. You keep it simple so everyone can understand what you are saying."
— Frank B.
First time I've renewed a subscription!
"I've had great success with your letter. It's real companies with real value and the results have been real. I think you're the first newsletter that I've actually renewed my subscription to!"
— Chris D.

Here's the thing. Doing research for Capital & Crisis, I often uncover really juicy opportunities with even bigger upside potential than I've described here. Like the "covert public offerings," the royalty opportunities, the "options" that never expire.

The problem is that often these shares are very thinly traded. 55,000 Capital & Crisis readers simply can't act on these recommendations.

If I put out these recommendations to 55,000 Capital & Crisis readers, the prices would surge and only the readers who acted the fastest could grab shares.

I came up with a solution about three years ago. I invited an "inner circle" of VIP readers to follow some of these little-known, under-the-radar plays.

My VIP Inner Circle Was Up 57% During the Carnage of 2008

And without bragging too much, I have to say the results for readers of my VIP research service Mayer's Special Situations have been pretty darn good.

Every month they learn about a new opportunity in "covert public offerings," "personal venture capital plays," "options" that never expire… and other markets you never knew about until today.

Just in 2008, we booked gains like…

  • 107% on Contango Oil and Gas (in just nine months)
  • 122% on Gorman-Rupp (in less than two years)
  • 194% on T3 Energy Services (in just over a year)
  • 177% on Titan International (in just over 15 months)
  • 112% on Vaalco Energy (in only eight months)
  • 112% on Kodiak Oil and Gas (in just three months!)

The VIPs' overall performance for the year… 14 positions closed, for average gains of 57%.

Compare that to the Dow, which lost 34%.

And this year?

Well as I told you earlier, we closed out gains of 59% and 132% on that gold miner (Fresnillo PLC)… along with 33% on Euroseas International (in just 21 days!)… 26% on PharmMerica… 67% on Kurita Water… and 68% on Ameron International (in eight months).

Meanwhile, we still have open plays up plenty big… like 21% on a Canadian agriculture play… and 45% on a small gold miner.

Oh, and I guess I should remind you that all five of those "covert public offerings" are up big… 24%, 39%, 42%, 54%, and 57%. And every one of them could be on the way to triple or quadruple-digit gains!

Now, be honest… how many of those companies I just named have you heard of?

No shame here in saying "none." That's my whole point. You can't make the big money without going off the beaten path.

I'm writing you because I think you're one of those people who's ready to take the plunge. 

That's why I want to send you the three special reports How to Collect 402% Gains With "Covert Public Offerings"… plus "Options" That Never Expire: Resource Riches for 2010 and Beyond… along with Be Your Own Venture Capitalist: Royalty Plays for 2010 and Beyond. That's a total of eleven Special Situation stock picks for you to review…

There's absolutely no risk to you when you let me send these reports. I'll prove it to you toward the end of this letter.

But before I do, I have two other special situations I want to tell you about.

Special Situation #4: Like Investing in $17-a-Barrel Oil

If I were to ask you what's the best sector to invest in for the next 30 years, what would you say?

Stumped? I don't blame you. 30 years is a pretty long time.

But legendary investors like Jim Rogers and Marc Faber already know.

"I think you should move back to Indiana and marry a farmer," says Rogers. In other words, the finance sector's days have come and gone. Agriculture's where it's at.

"There are times in history when the money lenders have been in charge, and we just came through one of those periods. But it wasn't always that way. Wall Street was a backwater in the '40s, '50s, '60s and '70s, and it will be again. Farmers are going to be the ones driving Lamborghinis, and the traders are going to have to learn to drive tractors."

Faber says investing in agriculture today would be like investing in oil in 2001… when it was just $17 a barrel.

Why? Well, world grain inventories are at 40-year lows. And this is at the very time that hundreds of millions of people in China and India are joining the middle class.

People eat better as they get wealthier. That means they eat more meat. More meat requires more grains to feed cattle and hogs. It takes ten pounds of grain to produce one pound of meat.

Agriculture's been a loser for decades now. But it's due for a big turnaround. And when that happens, look out. Check out the last time farmland was hot — in the 1970s.

Farm prices go in cycles. During the last boom, you could have nearly tripled your money while the stock market was cut in half. Don't miss out on the next boom!

Now… I understand if you don't want to follow Jim Rogers' advice exactly and take up farm life right now. You already have a successful career, or maybe you've retired from one.

But that doesn't mean you're shut out of ways to profit from the trend.

I want to send you a special report called Green Gold: Position Yourself for 30 Years of Explosive Growth.

How to Invest in Quality Farmland at an 86% Discount

Believe it or not, there are funds that invest directly in farmland. And I've found two I think are the absolute best.

They give you a chance to buy up prime farmland that's an absolute steal. I'm talking as much as 86% off similar-quality land in the American breadbasket.

It's right next door in Canada's "Prairie Provinces." Land that costs $2,700 in the United States fetches just $660 in Canada's grain belt. In one section, it's as cheap as $390.

A quirk in Canadian law kept a lid on prices for years. But now the law's been changed and the lid's coming off.

I can show you exactly how to take advantage in Green Gold: Position Yourself for 30 Years of Explosive Growth.

In that report, you'll also learn how to get in on prime farmland in Australia — just a short hop away from all those hungry Asians joining the middle class.

But if you want to stick to North American stocks and still hitch a ride on the agriculture boom… let me show you the perfect one.

How to Collect "Tolls" for North American Grain Shipments Overseas

The company I'm talking about doesn't own farmland. It doesn't produce seed. Nor does it make supplies like fertilizer.

It does something maybe even more lucrative.

It moves the grain that farmers produce to the markets where that grain's in highest demand.

It owns grain elevators across the Canadian breadbasket. It's developed a flawless assembly-line process of loading grain onto 112 rail cars at once.

Then it hauls the grain west to Vancouver for shipment to all those increasingly-wealthy Asians.

It's like owning a toll road for grain shipments. And you can collect a piece of those tolls, starting today.

I figure this company's an easy 50% gain from here… and that's if grain prices stay static. I don't think they will… because I think Asian demand will only grow. 

And this company has the capacity to handle as much grain as Canadian farmers can throw at it.

You'll find the name of this company in your special report Green Gold: Position Yourself for 30 Years of Explosive Growth — along with the other three more unconventional ways to profit from the generation-long boom in agriculture that's just getting underway.

And that's in addition to the other three special reports I've prepared for you… laying out eleven other special situation plays.

First though… I have three more special situation plays I want to reveal to you… locked into one sector I think has explosive potential…

Special Situation #5:  The Most Precious Commodity  of the 21st Century

The headlines are everywhere. But they seem to fall under the radar.

  • February 2009: Three years of below-average rainfall prompts California's governor Arnold Schwarzenegger to declare a water emergency. Water utilities are urged to slash their use by 20%. Los Angeles considers a plan to recycle sewer water into drinking water.
  • June 2009: India's driest June in nearly a century forces a 30% cut in water supply to Mumbai (population 14 million). In Bhopal, three people gathering water from a pipe beneath the dirt streets are hacked to death by angry neighbors who accuse them of stealing water. 
  • June 2009: Drought hits Iraq for the second straight year. Wheat and barley planting in the Euphrates River valley is down 95% from normal. Farmers flee to the cities to look for work. 

Nearly everywhere around the world, fresh water's becoming more scarce. 

Essential rivers are losing volume — the Yellow River in China, the Ganges in India, the Niger in Africa, the Colorado in the United States.

The United Nations says half the world will face water shortages by 2030.

If you know anything at all about me… you know that in crisis, I always look for opportunity.

There's a huge opportunity in water — and hardly anyone is keeping tabs on it.

Part of the reason is that the biggest players in water are big diversified companies like General Electric. Not a lot of "pure plays" out there.

But I've been tracking water pure plays for years… and the payoff's been great!

My inner circle has already bagged gains of 99% on a maker of irrigation systems… 121% on a pump maker… and 67% on a Japanese water treatment company (that also happens to be a covert public offering).

What do we have our eye on now?

  • This company's exclusive technology can deliver you 263% gains.  Agriculture is the biggest user of the world's fresh water supplies. Growing crops and keeping livestock hydrated uses up ¾ of the world's water. And the UN says it'll take 60% more water to feed the world's growing population by 2024. So any company that can use water more efficiently to irrigate crops is bound to make a lot of money. This company has a lock on the most efficient technology. It uses water up to 90% more efficiently than traditional irrigation methods.
  • Put three generations of water know-how to work making you 127%. If you want to move water from one place to another — across the house or across a continent — you need pumps to do it. This company is one of the few remaining independent pump makers, founded during the depths of the Great Depression. Its products helped pump water out of New Orleans after Hurricane Katrina. And they're being used to distribute water in both Afghanistan and Iraq. That's a lot of business from Uncle Sam… with more in the works thanks to the 2009 stimulus bill.
  • Warren Buffett just took a 6% stake in this company. It holds the commanding position in the market for water treatment. Water-borne illness kills two million people worldwide every year. So as the developing world gets wealthier, demand for water treatment is set to explode. This company cleans up water used by industry… and its customers include most of the companies in the S&P 500.

I'll reveal names and ticker symbols for all three of these plays your special report, Blue Gold: Three Blockbuster Plays Set to Burst Wide Open — as soon as you give me your authorization to send it your way.

Let me back up a bit. We're talking about 18 picks spread across five Special Situation sectors.

You can access all of it right now… as soon as you give me your say-so.

And there's one more thing I'd like to throw in, just to make the deal as irresistible as I can…

A Year's Worth of Regular Updates on These Stocks…  Plus 12 More Special Situations Picks… Absolutely RISK-FREE

Earlier I told you about the select group of VIP readers I gathered about three years ago. 

And I told you how together we've racked up gains of 112%… 177%… even 194%… on Special Situations picks just like the ones I've described in this letter.

Every month, these VIPs get a confidential advisory letter from me called Mayer's Special Situations. 

Each issue details a new special situations opportunity with triple-digit potential. 

Some of them are long-term plays that could take years to play out. Others are like Fresnillo, the stock where they had a chance to grab 59% gains in a month… and 132% in four months.

They might be a "CPO" — a "covert public offering." They might be one of those personal "venture capital" plays. They might be the kind of "option" that never expires.  Or they might be a Green Gold opportunity in agriculture… or a Blue Gold play on water.

And every one of them is loaded with opportunity.

I'd like to give you the chance to join this VIP inner circle for one year — absolutely RISK-FREE.

That's right… just for agreeing to check out Mayer's Special Situations, I'll GIVE you the package of five special reports I've prepared for you, risk-free.

That's 12 monthly picks in addition to the 18 opportunities you get in the special reports.

30 opportunities in all to double, triple, quadruple your money… or more.

Plus weekly e-mail updates on the status of the picks I lay out in the special reports.

I don't know of any other VIP stock advisory letter that offers you a value like this.

Grab Your 18 Picks RIGHT NOW and You'll Get a Year's Worth of Mayer's Special Situations — RISK-FREE

So, let's run down the comprehensive list of everything you get with a one-year membership in Mayer's Special Situations.

  • How to Collect 402% Gains With "Covert Public Offerings." This special report is packed with five triple-digit opportunities in "CPOs" you just can't find on the major exchanges.
  • "Options" That Never Expire: Resource Riches for 2010 and Beyond. Here you get three natural resource picks with nearly unlimited upside… stocks you can hold for years to come.
  • Be Your Own Venture Capitalist: Royalty Plays for 2010 and Beyond. Here are three more long-term plays that benefit from royalty income — companies that collect big money from metals and energy while other companies take on all the risk.
  • Green Gold: Position Yourself for 30 Years of Explosive Growth. This special report gives you my best ideas for how to make money from the best opportunity in agriculture in more than a generation.
  • Blue Gold: Three Blockbuster Plays Set to Burst Wide Open.This special report lays out my three best picks for the sector where demand is certain to outstrip supply in the years to come.
  • Monthly issues of Mayer's Special Situations. Each month I'll bring you another great special situations pick with the same sort of mega-potential as everything you'll read about in your package of special reports.
  • Weekly Mayer's Special Situations updates. Every Monday I get you up to speed on any developments with the companies in your special reports and the monthly issues. I follow the quarterly SEC filings and conference calls so you don't have to.
  • Anytime access to the members-only Mayer's Special Situations website.  When you sign up, I'll email you a password that gives you access to the Mayer's Special Situations website. Here you can review previous issues as well as a comprehensive listing of all current recommendations. (Several more, beyond what you get in your special reports are still below their buy-up-to price. You get access to all of them as soon as you give me the word.)

This is an incredible array of recommendations for investing in markets and sectors you just won't read about cruising on MarketWatch or Yahoo! Finance.

In fact, people pay upwards of $5,000 a year to boutique specialty brokerages to get recommendations just like the ones you'll get in your special reports and in Mayer's Special Situations.

I don't think that's a very good deal. In fact, I think it stinks.

Because I work with Agora Financial, one of the most trusted names in the financial publishing field, I can make this sort of research far more accessible.

Many people pay $995 just for a year's subscription to Mayer's Special Situations.  Without the package of five special reports I've prepared just for you.

But as my way of saying "thanks" for just taking the time to read this letter, you get everything listed above for just $795.

That's a one-time price of $795 for access to 18 Special Situation picks across five markets and sectors that probably never crossed your radar until today.

And on top of your instant access to the 18 opportunities spelled out in the special reports, you get 12 more Special Situation picks during the next year. Plus weekly updates on your current recommendations.

I don't know of a better value anywhere when it comes to unearthing hidden, off-the-radar opportunities you'll never hear mentioned on CNBC.

Ready to get started?  I thought so!

I'm Taking On All the Risk… Your Satisfaction is 100% GUARANTEED

Just in case you're still not completely sold on this, I'd like to make you a guarantee that makes it risk-free for you.

Look at it this way: as soon as you give me your say-so and sign up, I'm going to be sending you five special reports packed with 18 potentially profitable opportunities.

That's a lot of value. But I realize it's also a lot of information to come your way all at once.

I want you to have as much time as possible to absorb it, think it over, and decide which recommendations you want to act on.

So I invite you to take a full 60 days to go over your special reports along with your first two issues of Mayer's Special Situations.

If at the end of those 60 days you decide — for whatever reason — that I haven't delivered the value I promise… you can call a toll-free number and I'll refund your subscription fee. Every last penny.

Keep the special reports and your issues. No hard feelings.

But if you're like most of my readers, I think you'll be more than satisfied.

A lot more than you'll be following the S&P 500.

Your chance at quick gains of 59% and 132%… and some long-term quadruples… are just a couple of clicks away.

How You Can Own a Quarter of the Internet... And Why You Don't Want to

Sometime over the next 16 months, one-quarter of the Internet will go on sale. But you shouldn't be suckered into this deal...

Before we get into the ins and outs of this sale, we need to clarify what it means to actually buy one-fourth of the Internet. Of course, you can't just own something as large and independent as the Internet. But you can buy a portion of its traffic.

We've been recently writing about international telecoms. If you bought up enough of these Internet Service Providers you could potentially own enough Internet traffic to constitute a quarter. But there will soon be another way you can invest in the traffic with just a single click.

About 50% of all Internet traffic is from file sharing - people sharing music, videos, games, and every other type of file you can think of. Regardless of how you feel about Internet piracy, 50% of all bandwidth on the net is made up of this type of activity.

Here's where the story really starts heating up...

The Pirate Bay: 2009 Has Already Been One Hectic Year

Half of all file-sharing traffic is hosted on a single website. That's a fourth of all Internet traffic in one place. That site is called The Pirate Bay.

TPB was launched in 2003, less than one and a half years after Napster - the pioneer in music file sharing - was forced to shut down because of court rulings.

TPB operates in Sweden, free from initial U.S. laws. But over the past several years, the European Union and many individual member-countries have cracked down on e-piracy.

In 2006, Swedish police raided TPB's headquarters, temporarily shutting down its server. April of this year was an even worse time for the organization. Founders Peter Sunde, Fredrik Neij, Gottfrid Svartholm and Carl Lundstrom were sent to prison for one year and slapped with a $3.6 million fine.

TPB's Next Giant Step Forward

With the founders in jail and facing serious fines, another Sweden- based company, Global Gaming Factory, announced plans to purchase TPB for $7.8 million. GGF intends to turn TPB into a legal, fee-based website. Users would have to pay a monthly fee to share files. This money would then be used to pay copyright fees for each file transfer.

This, again, might conjure up images of Napster, which was bought by Roxio Inc at bankruptcy auction. Roxio rebranded it as Napster 2.0, which began to offer legal, paid transfers. Best Buy acquired Napster last year for $121 million, but is struggling to see profits.

GGF's plans for TPB, however, aren't as small as Best Buy's were for Napster. GGF, almost immediately after announcing its plans to buy TPB, declared its intent to take the website public... on Nasdaq.

If all the legal and technical aspects of this deal work out as expected, TPB's intial public offering will take place sometime in 2010. This gives us less than 16 months to plan.

But before we start setting aside cash for this IPO, we need to take a serious look at what this deal will look like.

Why You Should Not Buy Pirate Bay... At Least With What We Know Now

It's safe to assume TPB's 25-plus million users aren't all going to start paying the monthly fees. Instead, we can expect more than 75% of these users to stop sharing files. Possibly as little as 10% of TPB's current user base will be left when GGF starts requiring fees.

This transition is expected to come very soon. On August 27, GGF is holding a press conference to go over the details of this reorganization, as well as its plans for the IPO.

GGF is also working on deals to turn TPB's enormous share of Internet traffic into a second revenue stream. By setting up deals with ISPs, GGF will trade promised bandwidth usage for cash.

ISPs are starting to sell bandwidth to customers instead of offering unlimited packages. This means that users that transfer a large amount of data packets will have to pay considerably more than those that just us the Internet to check their email.

With this transition from monthly subscriber to pay-as-you-go, ISPs will have an opportunity to make more money off bandwidth use. GGF promises that TPB will provide this.

However, we're not sold on this business model. Napster 2.0 has not been able to mount a significant attack on powerful rivals such as Apple's iTunes store. Even web giant Google has not been able to effectively monetize its $1.65 billion purchase of the world's most popular video sharing site, YouTube.

GGF's plan might seem enticing to some - don't buy into the hype. Music and movie pirates will go somewhere else for their illegal downloads. Avoid this IPO at all costs.