Addison Wiggin – May 26, 2011
- Introducing a new word — "nutraceutical"… How one of them could "flatten the aging curve" and mint new millionaires
- Latest Middle East country to blow up just like Egypt… but unlike Egypt, could double the oil price
- Scary chart: U.S. Treasuries rally… but the cost of insuring against default rallies even harder.
- Bursting the higher-ed bubble: $2.4 million in seed money for new entrepreneurs who drop out
"He wasn't lying, I figured," Patrick Cox said of a scientist he met recently who claimed he'd discovered an inexpensive means to slow down the aging process.
"He was just wrong."
There are many frontiers on the investment landscape. Some, like those we've been perusing in Southeast Asia, are geographical. Some are of the mind: ideas and innovations that will shape the way we live work and play in the very near future.
There is no better analyst vetting investment ideas in this space than Patrick Cox. When you stack his work up against the myriad of pretenders who write science-based investment newsletters, Patrick's Rolodex, experience and track record are unparalleled.
We're honored to have him on our team.
But when he started trying to convince us that one stock in his portfolio was going to render all the others obsolete… well, you might say, it gave us pause. Let's begin.
If you were to plot the aging process on a chart, it might look something like this…
In other words, the markers of aging progress slowly in your 20s… and accelerate as you get older. What this scientist was telling Patrick was that it was possible to take that steep end of the curve and flatten it significantly.
Patrick was skeptical, especially because the scientist wasn't even talking up a drug, but rather, a "nutraceutical."
"Nutraceuticals," Patrick explains, "are foods or food-derived products that are meant to provide health benefits. They may function exactly like substances that are considered drugs legally, but they are not categorized as drugs."
Thus, they generally fall outside the FDA's purview. "Nutraceuticals are not subject to testing requirements and regulations. They are much easier to bring to market."
Some nutraceuticals have been a bust — like the recent craze over resveratrol, the compound found in red grapes. There was little hard science to back up the crazy claims. "Fads arrive and legions of seekers arise to praise some fresh nutraceutical's wondrous effects." This, of course, only heightened Patrick's skepticism.
"It took me weeks to overcome my initial skepticism regarding this technology" — and many hours of recorded interviews with researchers and an on-site visit to one of the world's top biotech research labs.
The difference: This nutraceutical can overcome the inflammation that researchers now believe triggers most diseases of aging — cancer, heart disease, you name it. It's "a product that actually does what other supplements only wished they could do.
"I believe that most people who take it will see significantly improved quality and length of life as a result." And early investors will leave a legacy of wealth for their children, grandchildren and beyond.
Patrick is dead serious when he starts talking like this. In September 1990, Cisco shares sold for a split-adjusted 8 cents. In March 2000, they were $77. That's a 96,000% gain in a little under 10 years. That's the kind of potential he's talking about.
And with an inexpensive treatment that can forestall most of the diseases of aging? It's little wonder Patrick believes this could be "the last stock you ever need." We invite you to examine the evidence for yourself. Fair warning: This presentation will remain online only through this coming Monday.
The U.S. State Department is telling its diplomats, their families and embassy staff to leave Yemen.
"An amazing 46% of the Yemeni population is under 16 years old," we wrote over a year ago, anticipating events might come to this. "45% of the population lives in poverty. Social mobility is a rarity. Barley half the population can read. Only 3% of the land is arable, and most of the nation suffers a constant shortage of potable water.
"Oil, which accounts for 75% of government revenue, will likely run dry by 2020," we continued. "In other words, the country has less than 10 years to completely reinvent its economy."
Sure enough, Yemen is coming unglued.
Months of protests are climaxing this week with three days of fighting between tribesmen and government troops, leaving 72 dead. For the government, the end may be near: The tribesmen have seized both the Interior Ministry and the headquarters of the State Media Agency.
The White House, caught flat-footed again, is telling another longtime U.S. ally it's time to go. But President Ali Abdullah Saleh refuses to step down.
The U.S. government stands behind an autocratic regime until it's obvious the regime has run out of staying power. The problem is that unlike Egypt, Yemen is torn by the Shia-Sunni divide that's spawned inter-Islamic wars for 1,354 years.
Now the biggest war of all may be looming; Yemen is one of the three flash points in Byron King's "New War" scenario that could double the price of oil instantly. Best to take protective measures for your portfolio while you still can.
First-time unemployment claims jumped to 424,000 last week; the Street was expecting a drop to 404,000.
The true picture is likely even worse; in line with recent practice, the Bureau of Labor Statistics revised the previous week's figure higher.
This week, the statisticians didn't even bother trying to explain away the increase; previous excuses like bad weather or supply shortages in the auto industry from the Japan earthquake were nowhere to be found in the current report.
The four-week rolling average is now 7.3% higher than it was a month ago; that bodes ill for the next monthly unemployment numbers, due a week from tomorrow.
Nor is any cheer to be found in the Commerce Department's latest guess at first-quarter GDP. It's up an annualized 1.8% from the previous quarter— identical to the first estimate that came out a month ago.
Consumer spending was revised down; business investment and inventories were revised up. Those are two trends that can't continue in parallel forever.
Traders can barely stifle their yawns as the day gets going; whether it's stocks or commodities, market action looks about as exciting as the American Idol finale.
The only thing noteworthy is a drop in the dollar index to 75.4. But that's not translating to a spike in Treasury rates; indeed, the yield on a 10-year note is down to 3.1% — another new low for 2011. You'd think no one was worried at all about the possibility of a U.S. debt crisis. Except…
While we've been worried about U.S. debt forever, warning signs of a real debt crisis — the likes of which the world has never known — are starting to flash.
The price of insuring against a potential U.S. default is spiking. Big-time. The one-year cost of insuring U.S. Treasuries is now over 0.37% — or 37 basis points.
And judging by the movement in British CDSs, this appears to be a U.S.-only phenomenon…
Looked at another way, bond traders figure sovereign debt from Slovenia and Indonesia are better bets over the next 12 months.
Meanwhile, volume on U.S. CDS last week was double the pace a year ago. Traders are definitely on edge — whether it's because of the debt-ceiling debate or the simple realization that Uncle Sam has made far more promises than he has resources to pay.
Yes, it could be much worse. One-year swaps on Greek debt run around 2000 basis points, or 20%. But this situation bears watching.
We're pleased to see not everyone has given up on entrepreneurship in America. Certainly not PayPal founder Peter Thiel — who just forked over $2.4 million in seed money to 24 young people to take their best ideas out of their heads and into the marketplace.
They have to fulfill one condition, however — to drop out of college and pursue their ideas full-time.
Thiel came to the conclusion some time ago that higher education was overrated, and a senior graduating with an average $24,000 in debt does not have a leg up in the marketplace. Indeed, he calls higher ed a "bubble."
"A true bubble is when something is overvalued and intensely believed," he told an interviewer when he started accepting applicants. "Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It's like telling the world there's no Santa Claus."
Thiel's winners will explore everything from space mining to life extension. We got a chuckle when we saw that four Yale students are among the winners… which was proudly announced in the Yale Daily News.
"That is humoring thought," a reader writes of Laos' aspirations to become "the new Switzerland."
"I've invested assets in Switzerland, in part because of its respect for personal property. I also am a small business owner in Vientiane, Laos, and understand well the lack of property rights in this country, and the utter disarray of the rule of law.
"For example, you mentioned that foreign companies can lease land for 90-plus years, but this law was 'passed,' but never given final approval ('stamped'), so it therefore has no legal bearing. Interpretation is that yes, you can buy, but it can be taken away if a powerful local wants it.
"I have received my business license, after 14 months and many bribes. During that time, the business must have a rental contract for 'place of business,' and the authorities like to see operations before signing the license — try to make sense of that!
"I will say that Leopard's claim of a young and transforming population, though somewhat less than ambitious in comparison to Vietnam, is spot on.
"I heard of Leopard's visit, and wish I had tagged on knowing now you all were here. Would have enjoyed a Beerlao with you — which, by the way, has a 98% market share.
Sok dee due!"
The 5: Another time. Kingdom beer in neighboring Cambodia, we found, has a bit more zip to it.
"In English slang," writes a reader seeking to correct us, "one 'diddles' the tax man or a customer in what is colloquially used to describe a fraud.
"Regarding waiting no longer before signing up for the Vancouver conference one would use the term 'dithering,' which is harmless inertia, rather than dishonesty.
"I'm from the north of England originally, but have spent many years of my life in California and often been amused by the differences in the way the two cultures use an ostensibly similar language. Wasn't it Shaw who described the U.K. and the U.S. as ''two nations divided by a common language''?
"By the way, ever heard of a Wigan pheasant? Try asking your readers if they know. I've no idea of the expression's origin, but it may prompt some lighthearted debate to distract us from the relentless discussion of the end of the world as we know it."
The 5: Never heard of a Wigan pheasant… we're almost afraid to ask what it is. But here goes… anyone?
Cheers,
Addison Wiggin
The 5 Min. Forecast
P.S. In a world of "quantitative easing," where nearly every asset class has seen a huge run-up in the last two years… this one sector remains beaten to a pulp.
But Chris Mayer doesn't think that'll last much longer. In fact, a few early players have already made millions… and it's not too late for you to score big gains from an opportunity Chris calls "gold vapor."