How to Play the Next Oil Boom

In This Issue: How to Play the Next Oil Boom A Search for Yield Will the Aussie's Slide Deepen? A Healthy 5.4% Dividend Canada's oil business is booming – thanks to insatiable Asian demand. Oil and gas flows constantly to Asia through pipelines and tankers. And a massive new 54,900-square-mile oil field – called Athabasca – in Alberta, Canada, has opened up, promising 300 billion barrels of oil. Jobseekers are flocking to Alberta. If every graduating high school kid in British Columbia went to work there, it wouldn't come close to satisfying demand. Construction there is booming. One company is way ahead of the rest – up 404% since the oil rush was on. Way more growth lies ahead. In the meantime, we enjoy a hefty 5.4% dividend. Details here. How to Play the Next Oil Boom 9/15/2014 By Chad Fraser Looking for the next oil boom? We know exactly where you'll find it (hint: it's not the North Dakota Bakken). Here are a few clues: It's cold, dark and wind-swept... ... yet it's a magnet for job-seekers---the country's top relocation destination. New housing can't go up fast enough to keep up with surging demand. Home prices and rents surpass those in the nation's largest cities---in one locale, average rents have jumped from $400 a month to $1,200 in just one year. Restaurants, gas stations, shopping centers and dozens of other services struggle to serve the burgeoning population---and the minimum wage is a whopping $6 an hour more than in other parts of the country. Here's something else that will surprise you: it's nearly 40 times bigger than the Bakken in proven oil reserves. You read that right. While the Bakken possesses an impressive 7.4 billion barrels of proven reserves, this massive 54,900-square-mile oilfield (larger than 24 U.S. states!) boasts a jaw-dropping 300 billion barrels. We're not going to beat around the bush here. We're talking about Western Canada's Athabasca oil region. Here's something else every investor should know about the Athabasca's explosive potential... Unlike the Bakken, where the future of oil and gas production is often held hostage by domestic politics, the Athabasca is in a friendly country that's committed to becoming a global energy superpower, supplying whoever has the money to buy. China, for one, has plenty of money to buy all the Canadian oil it needs---15 million barrels a day by 2020. They're all but begging to buy it. And India---which will need 5 million barrels a day by 2020---and other emerging markets have their wallets open, too. But here's the clincher: The region just cleared a huge hurdle when the Canadian government approved the Northern Gateway pipeline, which will carry Athabasca oil to Kitimat, B.C., on the Pacific coast. From there, tankers will ferry the crude to Asian ports. These are just a few of the reasons why we call this "the boom that won't go bust"---and why we want to tell you about 6 stocks ideally positioned for a huge profit windfall. The biggest surprise? Not one of them is an oil stock. At the end of this article, we'll tell you how you can uncover these 6 top secret picksabsolutely free. But first, let us give you a bird's-eye view of this once-in-a-lifetime opportunity, so you can see for yourself why we're so convinced that it can make you rich---if you act now. Canada's Runaway Oil Boom by the Numbers So just how bright is this region's future? The Bank of Montreal (BMO) recently published a report on just one western province---Alberta---that made headlines all across Canada. There's no doubt about it---Canadians are Alberta-bound. Every other Canadian province now reports a net outflow of people leaving for Alberta, an incredible demographic statistic. To put that in perspective, imagine 49 of 50 U.S. states reporting that more of their residents were leaving to move to frozen North Dakota than were moving in. Hard to picture, isn't it? It's not happening in the U.S. But that's what's happening in Canada right now. Last year, over 100,000 people moved home and hearth to Alberta---certainly not for warm, sunny weather. Like the great U.S. migration of the 19th century, Canadians are heading west for work, opportunity and a better life. Alberta's population is exploding---and the province's GDP growth is on the uptick. It's forecast to hit 4.2% this year, a healthy 1.2% above the national percentage. (By comparison, U.S. GDP was a meager 1.9% last year.) The employment rate is the highest in Canada, and employment growth is by far the highest in the country. As you'd expect, the unemployment rate, at just 4.3%, is Canada's lowest. To quote the BMO report: "The overflow from the oil boom has supported other areas, such as construction, trade, professional services and hospitality---moving to Alberta doesn't just mean working on a rig." The economic outlook fairly screams real estate and construction bonanza ahead! Look at it this way. You've seen what's happened in the Bakken, where workers in towns like Williston and Dickinson can easily earn $15 an hour dishing up fast food at Taco Bell, $18 an hour at McDonald's, $25 an hour waiting on tables or $80,000 a year driving a truck. Now imagine what will happen when this same kind of boom shifts into high gear in Western Canada's Athabasca oil region, which is 40 times bigger than the Bakken in terms of proven reserves. That leads us straight to the 6 companies we see as ideally positioned to surge as Alberta's real estate and construction boom approaches warp speed. Tap Into These 6 Northern Powerhouses Now David Dittman, chief investment strategist at our Canadian Edge advisory, has painstakingly researched all 6 of these Canadian marvels and has put everything you need to know into a just-released special report. It's called "Six Stocks Set to Explode From the Hidden Energy Boom 40 Times Bigger Than the Bakken." Best of all, you can get your hands on it absolutely free just for taking Canadian Edge on a no-obligation trial run. Make no mistake: Canada is "all in" on selling its oil and gas to the world. And when its massive reserves start gushing onto global markets, the result will be an unprecedented wave of investment in the country. This "hidden energy boom" is one of the most predictable---and least talked-about---windfalls we'll see in our lifetimes. But the time to act is now---before the wave of Canadians and foreign workers heading west turns into a tsunami. That's why we're writing you with this urgent alert today. Don't be left behind. Click here to get your copy of this new report immediately! Editor's Note: I've read David's latest report, and I can tell you that the picks it contains are some of his best yet. Together, they offer a superb way to profit from Canada's energy bonanza without directly investing in oil stocks. We can't wait to get this unique report---straight from David's desktop---into your hands as soon as possible. I hope you'll accept our special invitation and... Go here to get your copy right away. The New #1 Energy Producer Imagine investing in the birth of a new economic superpower. It would be like investing in Japan in 1946 after the war ended. Japan catapulted into the #2 economy in the world, and savvy investors made out like bandits. Well, now you're in luck. A new superpower is about to emerge to claim the #1 spot as the world's major global energy source, with 1.7 trillion barrels of oil. It's 40 times bigger than Bakken. Sadly, it's not the U.S., but it's very close. I have 6 stocks that deserve your attention if you're hoping to pile up profits in the next decade. Worth a look? Click here. A Search for Yield 9/12/2014 By Philip Springer US Treasury issues maturing in 10 years carry a yield of just 2.5%. Shorter-term issues pay much less. So do the government bonds of other developed nations. High-yield corporate bonds and those from emerging markets pay somewhat more, but their income also is depressed by historical standards. This situation adds to the luster of vehicles that pay a relatively good yield now, such as 2.5% or more, and that offer good potential for future payout increases. Here are some names to consider and research: three lists of common stocks and one of energy master limited partnerships (MLPs). #1: Dividend Aristocrats. These are the stocks in the Standard & Poor's 500 whose annual dividends have risen for 25 or more consecutive years, and that currently pay 2.5% or more. The stocks are ranked by yield. AT&T (NYSE: T), 5.3% HCP Inc. (NYSE: HCP), 5.1% Consolidated Edison (NYSE: ED), 4.4% Cincinnati Financial (NYSE: CINF), 3.7% Chevron (NYSE: CVX), 3.5% Leggett & Platt (NYSE: LEG), 3.5% McDonald's (NYSE: MCD), 3.5% Target (NYSE: TGT), 3.3% Clorox (NYSE: CLX), 3.3% Kimberly-Clark (NYSE: KMB), 3.1% Procter & Gamble (NYSE: PG), 3.1% Sysco (NYSE: SYY), 3.0% ExxonMobil (NYSE: XOM), 2.9% AbbVie (NYSE: ABBV), 2.9% Coca-Cola (NYSE: NYSE: KO), 2.9% PepsiCo (NYSE: PEP), 2.9% Johnson & Johnson (NYSE: JNJ), 2.7% Emerson Electric (NYSE: EMR), 2.7% Nucor (NYSE: NUE), 2.7% Bemis (NYSE: BMS), 2.7% Genuine Parts (NYSE: GPC), 2.6% Wal-Mart Stores (NYSE: WMT), 2.5% Aflac (NYSE: AFL), 2.5% #2: Dogs of the Dow. Here are the 10 highest-yield stocks in the Dow Jones Industrial Average, in order of yield. AT&T (NYSE: T), 5.3% Verizon Communications (NYSE: VZ), 4.4% Pfizer (NYSE: PFE), 3.5% McDonald's (NYSE: MCD), 3.5% Chevron (NYSE: CVX), 3.4% General Electric (NYSE: GE), 3.4% Procter & Gamble (NYSE: PG), 3.1% Cisco Systems (NSDQ: CSCO), 3.0% Merck & Co. (NYSE: MRK), 2.9% Coca-Cola (NYSE: KO), 2.9% #3: Nasdaq 100 yield leaders. This list, which features many technology companies, is of stocks that pay 2.5% or more, ranked by yield. Vodafone Group (NSDQ: VOD), 7.0% Mattel (NSDQ: MAT), 4.4% Staples (NSDQ: SPLS), 3.9% Maxim Integrated Products (NSDQ: MXIM), 3.7% Kraft Foods Group (NSDQ: KRFT), 3.6% Paychex (NSDQ: PAYX), 3.6% Garmin Ltd. (NSDQ: GRMN), 3.6% CA Inc. (NSDQ: CA), 3.5% Cisco Systems (NSDQ: CSCO), 3.0% Analog Devices (NSDQ: ADI), 3.0% Seagate Technology (NSDQ: STX), 2.8% Wynn Resorts (NSDQ: WYNN), 2.7% Xilinx (NSDQ: XLNX), 2.7% Texas Instruments (NSDQ: TXN), 2.5% KLA Tencor (NSDQ: KLAC). 2.6% Intel (NSDQ: INTC), 2.6% #4: Master limited partnerships. Here are the 10 biggest MLPs in midstream energy (transport and storage) that carry yields of 5% or more. Again, they're listed in order of yield. Enterprise Products Partners (NYSE: EPD), 7.1% Energy Transfer Partners (NYSE: ETP), 6.7% Williams Partners (NYSE: WPZ), 6.7% El Paso Pipeline Partners (NYSE: EPB), 6.5% Kinder Morgan Energy Partners (NYSE: KMP), 6.0% Regency Energy Partners (NYSE: RGP), 6.0% Enbridge Energy Partners (NYSE: EEP), 6.0% DCP Midstream Partners (NYSE: DCP), 5.5% ONEOK Partners (NYSE: OKS), 5.3% Cheniere Energy Partners (NYSE: CQP), 5.2% This article originally appeared in the Mind Over Markets column. Never miss an issue. Sign up to receive Mind Over Markets by email. Don't Buy a Single Oil Stock in This New Energy Boom The Athabasca oil sands in Alberta, Canada, is the new location for the next energy boom. It holds nearly 4,000% more oil than the fabulous Bakken site in North Dakota. Due to the Bakken Boom, North Dakota now has the fastest-growing economy in the U.S., offering good-paying jobs. Western Canada is about to become North America's new boomtown. Job-seekers are flocking to the region. Demand for housing, shops, schools, hotels, roads, and more is soaring. I have 6 non-energy companies to satisfy demand. Growth is up triple digits – 404%, 139%, 285% – with plenty of room to grow. The time to get in is now. Details here. Will the Aussie's Slide Deepen? 9/11/2014 By Ari Charney The Australian dollar has enjoyed an incredible run over the past 13 years. Since its bottom at USD0.4856 in early 2001, it's risen as high as USD1.10 in mid-2011. But this week, the aussie has suffered what amounts to a plunge in the world of currencies, dropping from last week's close of USD0.9378 to USD0.907 (at time of writing), its lowest level in six months. Even the surge in job creation, which we'll discuss in greater detail in the forthcoming issue of Australian Edge, was not enough to overcome negative sentiment from the weakness in the prices of key commodities, such as iron ore and coal. And given the strong correlation over the past year between Australia's exchange rate and US Federal Reserve policy, it's worth considering where the aussie might be headed next. After all, the conclusion of the third round of the Fed's so-called quantitative easing, colloquially known as QE3, is imminent, and many economists expect the US central bank will raise short-term rates by the middle of next year. Investors who were early to Australia's resource boom were fortunate enough to experience the tailwind of a rising currency, which further enhanced both their gains as well as the income they received from their dividends. But more recently, the aussie's resilience has posed challenges for the country's exporters and the economy as a whole. Now that mining investment has peaked, the Reserve Bank of Australia (RBA) is hoping its monetary policy will help the non-resource sectors find sufficient growth to drive the economy. To that end, the central bank has been on a rate-cutting cycle since late-2011. But it wasn't until the Fed announced in the middle of last year that it was planning to curtail its extraordinary stimulus that the aussie began to decline in earnest. The exchange rate fell as low as USD0.8682 by late January, but then much to the consternation of the RBA, whose governor has attempted to talk the currency lower on occasion, the aussie renewed its ascent. In fact, since the beginning of April, the Australian dollar has traded in a range between USD0.92 and USD0.95. In the central bank's latest policy announcement earlier this month, Governor Glenn Stevens said the aussie "remains above most estimates of its fundamental value, particularly given the declines in key commodity prices." The latter part of that statement points to what has been one of the primary sources of the aussie's strength, which is the perception that the currency is backed by hard assets courtesy of the country's resource riches. But the Australian dollar also gets a considerable boost from the fact that the RBA keeps short-term rates relatively high compared to its developed-world peers. For instance, even though the central bank's benchmark cash rate is at an all time low, at 2.5 percent it's still markedly higher than equivalent rates at many of its counterparts. The reason for this approach is because Australia tends to run persistent trade deficits, so higher rates help attract the inflow of foreign capital necessary to finance them. Indeed, the aussie is one of the currencies that figures prominently as the long component in the carry trades of numerous financial institutions and hedge funds around the world. Put simply, the carry trade involves shorting a low-yielding currency such as the euro and using the proceeds to invest in a higher-yielding currency such as the aussie. This trade can also pair debt denominated in each currency. Investors generate income from the spread between the interest rates of the two currencies, but can also speculate on whether the higher-yielding currency will appreciate, which can occur when other traders pile into the same bet. These entities can also try to magnify the income they receive from the spread by leveraging these trades five to 10 times over, turning a 2.5 percent interest rate differential into 25 percent, for example. The carry trade tends to work best during periods when volatility in exchange rates is low, which decreases the chance of the trade coming undone when currencies make unexpected moves. As Westpac Chief Economist Bill Evans recently observed, "With low volatility, traders believe that commodity currencies which are overvalued in a fundamental sense can maintain that overvaluation while markets remain calm." And he believes the end of QE3, which could happen as soon as next month, could be a source of volatility since that's what happened when the Fed wrapped its two earlier rounds of quantitative easing. Although currency markets soon settled down again after those two earlier episodes, that might have been because traders were expecting more stimulus. This time around, however, the Fed's next big policy move will likely be a hike in short-term rates. In other words, currency markets could remain unsettled for at least the next several months, if not longer. At the same time, while economists expect the aussie to decline over the next several years, the consensus forecast is not that much lower than where the currency trades presently. According to Bloomberg, the average projection is for the exchange rate to fall to USD0.88 next year and then trade around USD0.87 from 2016 through 2018. Although those levels are well off the aforementioned 2011 high, they're still high by historical standards and likely uncomfortably high by the RBA's standards. This article originally appeared in the Down Under Digest column. Never miss an issue. Sign up to receive Down Under Digest by email. 40 Times Bigger Than the Bakken There's a massive 54,900-square-mile oilfield boasting a jaw-dropping 300 billion barrels of proven oil reserves just north of the North Dakota Bakken. Here's another surprise – you can make a fortune there without buying a single oil stock. Curious? Go here. You are receiving this email at benjamart.ss.stock@blogger.com as part of your subscription to Investing Daily's Stocks To Watch, published by Investing Daily. 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