Within Ten Years It Will Make You Roaring Rich or Painfully Poor. Your Choice. Choose Right, and the Coming Economic Collapse Will Not Hurt You at All.
Commentary by
Stephen Leeb, PhD
Chairman, TCI Enterprises
Sr. Editor, The Complete Investor
It’s too late to escape.
The inflation now upon us is not the old-fashioned, cyclical annoyance you remember so well. It’s a new fact of life. It’s being caused by:
A. The final runout of oil
B. The debt-laden, out-of-control house of cards that is our economy today
C. Our indescribably myopic government, and
D. The massive export of our money to China and other countries.
The Fed cannot do anything about any of these problems. 95% of U.S. stocks will be break-even investments at best. In the end, inflation devours bull markets. Always. You knew that.
You also knew that actual inflation is nearing 6%—if you ignore the government’s massaging of the numbers.
Yet even the official government numbers are the highest since 1991. What you probably didn’t know is that this unavoidable inflation is going to get worse. It will eventually cripple the U.S. securities market so thoroughly that 95% of all our stocks and bonds will fail to bring you a profit (after inflation). 
I’m not predicting a sudden, one-day crash. What you’ll see is a gradual decline—followed by a steep decline when inflation reaches the 12%-15% level. The decline could be triggered by the high-flying real estate balloon. The two longest pins seeking that balloon are rising interest rates and massive debt. If the balloon bursts, home prices will fall, and consumer spending will dry up faster than the paint on your “House for Sale” sign. Or the decline could be triggered by a hiccup in the oil supply. Right now, the pumps are going flat out, yet the world keeps shouting for more and more. The next storm or terror strike could create panic in the oil markets. Even without any supply problems, problems, cold weather could cause a surge in oil demand. In the past, such surges were regular events. But now with our high debt, one medium surge could shatter the status quo. And you may recall that oil prices have been a factor in every recession since 1973.
In addition, our money keeps flowing overseas in a growing torrent—now nearing $700 billion a year. How long can that continue? For as long as the Federal Reserve keeps cranking out funny money. Eventually, of course, the money will become a bit too funny. At that point, the Asians and Europeans will suddenly stop sending us their trading profits in return for our T-bonds. When the dollar does its swan dive, the light on our national pinball machine will come on: GAME OVER.
What’s worse than an all-out depression? Inflation. By a mile.
As a smart investor, you can handle a depression. But inflation could devastate you. Proof: Look at the 1930s vs. the 1970s. For the decade of the 1930s, the total real returns were: | | Stocks (S&P 500): +21.9%
Cash: +29.3%
Bonds: +94.9%
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For the inflationary decade of the 1970s, the total real returns were:
| | | Stocks (S&P 500): -14.0%
Cash: -10.5%
Bonds: -17.5%
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Kind of shocking, isn’t it?
|
Yes, a depression hurts a nation more than inflation— because the pain hits more people. But you’re not a nation, you’re an investor. And it’s your tail that’s going to get caught in the wringer as inflation continues. Ah, but here’s the big difference between you and Joe Lunchbucket or Bob Briefcase: If a depression were to hit, there wouldn’t be much Joe or Bob could do about it; if they were lucky, they’d get low-paying jobs and ride it out. You, however, are another story. You can just switch your money into those few investments that profit from inflation. Yes, there are such investments. And I’ll be happy to point them out for you. Keep reading. But first, I have to tell you that …
The next ten years will be worse than the 1970s.
Remember the days of “guns and butter”? Well, they’re back. Lyndon Johnson’s no-win war in Vietnam cost well over $200 billion. Yet that was nothing compared to the $9 trillion we’ve paid for his disastrous War on Poverty—so far. Today, we have a war in Iraq that has cost us $251 billion so far. And we’re also facing those new Medicare prescription expenses of $850 billion over the next ten years. That all adds up. However, the situation today is even worse than that. Four more reasons: 1. Private debt has jumped from modest to huge: $11 trillion. 2. Public debt is hopelessly out of sight. In addition to the recognized, formal U.S. debt of more than $8 trillion, there is a far worse debt: the long range “unfunded overhang” totalling $72 trillion in future obligations for Social Security and Medicare/Medicaid. No one in any party has a clue about how to pay off such a sum. Yes, the next generation of politicians could crank up the printing presses to supersonic speed, but that would quickly make U.S. dollars worth less than Monopoly money. 3. Oil. The two crises of the ’70s were just political events. (There was actually plenty of oil.) But today, oil prices are high because there are genuine supply problems . . . and new oil discoveries have been bleak to nonexistent. During the ’90s, new finds brought only 7 billion barrels a year, while world demand grew by 20 billion more barrels. Each year. For that reason, oil cannot go down for long. It will continue to zig-zag upward till the end of time. We’re rapidly running out of the stuff. And during that span, it will continue to drive inflation (albeit less strongly after alternative fuels start to kick in). 4. Fear has taken over the bond markets. Evidence: In the past year, the Fed has raised short-term rates nearly threefold. Yet longer-term rates did not respond. This disparity is unprecedented in U.S. history. It reveals an economy that looks strong but is quite fragile. | |  What’s going on here? What’s spooking the bond markets? Simply this: Big investors have not scooped up these higher yielding, short-term notes. Instead, they have flocked to longer-term paper to protect themselves against a vicious economic down-spiral.
Those low, longer-term rates prop up house values nicely, yes, but they perpetuate a mountain of long-term mortgage debt. This fans inflation, of course.
THE BOTTOM LINE: If this bizarre divorce between short and long term interest rates persists, we will be wired into an inflationary spiral.
Then if, God forbid, home prices fall sharply, it will be a Category 5 perfect storm that will make the recent tech crash look like a rain shower.
5. The Chindians are eating our lunch. |
You knew that. “Job outsourcing” to India has received a lot of ink. You probably also knew that our balance of payments deficit has gradually exported our money to China. (So far, they are nicely sending it back to us—in exchange for U.S. bonds. That could come to a halt.) But perhaps you haven’t had time to sit down and put 2 + 2 together. If so, then here’s the fact you may have missed: The massive export of our money and jobs to China and India means that 90% of all the investment profits in the world will be coming from Chindia—for the next 20 years. And therein lies the solution to all the problems I’ve just presented to you. While inflation will make it tougher and tougher for you to earn a profit in the U.S., it will simultaneously get easier and easier for you to find profitable stocks—by investing in Chindia. The phrase “shooting fish in a barrel” comes to mind. See the next article for details. 
Let Me Make This Easy for You
By Dr. Stephen Leeb
Sr. Editor, The Complete Investor
This will be simple. Repeat one word over and over as you contemplate your portfolio: Chindia. That’s it. For the next 20 years, it will be the source of 90% of your profits—and the world’s. The wizards of Wall Street are missing the biggest shift of our time: the gigantic and inevitable explosion of growth in China and India. Chindia. The big investment houses cannot shake off their outdated mental picture of the world, a world where the U.S. is the center of everything: capital, brains, and growth. Sorry, but that picture must be trimmed, starting now. Over the next generation—20 to 25 years—the U.S. will indeed remain the world center for brains, but the world center of capital accumulation and growth has already moved to Asia. Always follow the money. Move your portfolio wherever it goes. And right now, it’s moving to Chindia.
20% Annual Profits for the Next 20 Years? And 90% of It Coming from Chindia? Where Do We Get That?
Here is the meat of this bulletin, carved into five easy chunks for you: 1. Before 2010, China and India together will be bigger than the U.S. By 2009, at present rates of growth, our economy will be #2. Look at the oft-ignored blue bars in the graph below: The Asian appetite for cell phones, TVs, computers, and other modern goods is growing much faster than economists realize. Soon they will far outproduce us. That’s vast. Yet it’s only a minor part of the picture. The larger reality is that . . . 2. Chindia’s currencies are inevitably going to move against the dollar—by at least four or five times. Look at the graph again. The U.S. buck is no longer a real measure of value. The graph shows that since 1989, the dollar value of Chindia’s goods and services has climbed from 12% of the U.S. to 17% of the U.S. No big deal. But the true unit value, the numbers of computers, TVs, and so forth, has rocketed from 43% to 83%—a very big deal. The difference between the two trends shows a massive distortion in the value of the almighty dollar. You probably don’t think of China as being the good guys. But their economic policies make those Commie bosses look like our guardian angels. Fairly soon, though, the charade must end. The floating yuan will eat up much of the dollar. After that happens, you won’t want to have your nest egg pegged to the dollar or Western equities. As dollars plummet against the yuan and the lowly rupee, we, the world’s only military superpower will turn into a monetary satellite orbiting around the new economic star, Chindia.
3. Chang and Patel are catching up with the Joneses. Go ahead, try to tell a hardworking Chindian that he can’t have a TV. Or a cell phone. You’ll have better luck standing in front of a freight train. Sure, Chindia has masses of oppressed and uneducated farmers and laborers. Perhaps always will. But from Bombay to Beijing, hundreds of millions of eager Asians are working their keisters off to get a computer— and a bigger house to put it in. MY TAKE: These hundreds of millions will soon surpass the world average. They are stampeding uphill, following the familiar track of Scots, Jews, Armenians, Dutch, and other downtrodden ethnic groups who snapped back like a rubber band and became highly prosperous. But even if the Chindians do no better than reaching equality with the rest of the world, they will soon be buying four times as many cell phones as we now have in the U.S. In fact, a mere 5% increase in anything there (cars, energy consumption, whatever) equals in size a 40% leap in America, simply because Chindia has eight times as many people. Right now, they have only one-third as many cell phones per capita—and one-ninth as many computers. So they have lots of room to play catch-up. Even scarier: If they just reach the world average in energy consumption, they will be burning up an additional amount of energy nearly equal to the entire energy burn of America today! And again, the signs all say they’ll do better than that—within about 20 years. (See my following article on the looming oil catastrophe.) Scarier still, if you add energy onto all other goods, Chindia will create, in our generation, 2.7 “new Americas” in their leap to parity with the world. Now do you see why you need to have your money earning its keep in Chindia instead of rotting away in Detroit and Seattle? 4. Multiply 400%-500% unit growth times 400%-500% monetary growth, and you have yearly profits of over 20% . . . for the next 20 years. If you like to read tables, this one below will give you a shot of adrenaline. The shocker is the bottom line. It means, roughly, that Chindia will be the main event—almost the only show on the planet besides energy—for perhaps the rest of your life.
For the next 20 to 25 years, 92% of the world’s economic growth will flow from Chindia. That includes soft drinks, cars, cell phones, energy (oil, nuclear, natural gas), you name it. As a patriotic American, you may be annoyed to hear that we are within five years of becoming #2 … and that the U.S. will soon comprise less than 8% of the world action. Understood. But my most honest advice about that annoyance would be, Get over it. 5. Nothing is going to stop this Chindia megaboom. Apart from a new black plague, giant meteor, or massive jihad attack, everything I’ve written above is going to come to pass. I am not guessing in the slightest. First, India is still so far down that they hardly have anywhere to go but up; worldwide recessions mean little in that enclave of human struggle to stay a notch above survival. Second, there won’t be any big recession to knock down China. Why? Because—no joke—they simply won’t allow it. They have to keep economic growth above 7%; otherwise, unemployment could threaten their highly insecure government. (Think TianAnMen Square times 100.) Even in the midst of their current smileyface campaign to look good for the 2008 Olympics, they launched in October, 2005, a new round of vicious persecution of Chinese Christians— because, believe it or not, they are afraid that some lowly Christian might convert members of the Party! That sort of paranoia is your guarantee that your dollars are safe in a brutally stable China.
How Can You Cash in on All This?
I hope I’ve made it plain that your future prosperity rests upon having a stake in Chindia. If you want to be on the first tee by one o’clock every day without touching your principal, the bulk of your portfolio should have a Chindia connection. Learn to play the Chindia card—over and over and over. But play it smart, don’t just throw your money in an easterly direction and hope the wind blows it into the right baskets. I would like to send you a copy of my brief special report, Eastward to Eden. It tells you specifically which stocks to buy in order to start cashing in immediately on this Eden-like garden of investment bliss. I won’t name all of those stocks here, but I will warn you of a large pitfall should you decide to “wing it” and buy Chindia stocks on your own: Many amateur investors are assuming that peppy little lowcap companies are the perfect match for Chindia’s fast-growth pace. Very wrong. Why? Because Chindia is so huge that only bigcap firms have the financial power to break into it. Eastward to Eden will tell you exactly which big-cap stocks are booming in Chindia now … and will likely continue to climb 10%-15% a year for the next two decades. Get your free copy today when you subscribe today.
The Absolutely Guaranteed, Locked-In,
Vanishing Commodity
By Stephen Leeb, Ph.D.
One investment is guaranteed to rise long term—for the rest of your life. It’s a vanishing commodity so important that every nation’s economy hinges on it. Buy it intelligently, and you will make millions.  In the next one to four years, half the earth’s oil will be gone. And IF we were to keep sucking it up at the present rate, every drop would vanish by about 2029.
It won’t happen quite that way, of course. Long before 2029, the quality of crude oil will go from fair to terrible, the extraction costs will become crippling, and you will be paying $12 to $15 a gallon at the gas pump. Life will revolve around oil— or the lack of it. The government will be forced to spend horrendous amounts on frantic research to find ways to replace oil—with wind, coal, solar, ethanol, tidal, geothermal, and the ultimate energy source, hydrogen. Please keep in mind: I’m an optimist. I truly believe we will have breakthroughs in energy and move into a post-oil era of peace and plenty. But I’m also a realist. So I have to tell you that we’ve started thirty years too late on our search for energy alternatives, and we’re facing about 20 years of very upsetting shortages during this transition time.
$200 a Barrel Oil: It will make you rich, or it will make you poor. Oil production will begin to decline worldwide by 2009 or before. Permanently. As investors figure out what’s happening, they will panic. (Surprise, surprise.) Prices will take off again. By 2010, oil will cost $200 a barrel. Oil at $70 a barrel will sound like a dream from long ago. Your lifestyle will begin to adjust to the new reality of a world with less and less oil. (Think mopeds, moving closer to work, wearing two sweaters in winter, etc.) Without these adjustments, we could soon be facing a threat to capitalism itself. The runout date of 2029 assumes just a nice, solid growth in the world economy, about 4% a year, nothing more. So this is not a radical projection, not scare tactics. If it begins to sound like a doomsday fantasy to you, let me give you some numbers: Right now, the world uses up 86 million barrels of oil a day. The Department of Energy says that will reach 95 million by 2010. And by 2023, demand will reach 120 million. But that’s demand, not production. And what about production? Hang onto your aorta. A reputable Wall Street firm (UBS) estimates that production will inch up from today’s 86 million barrels a day to just 120 million within a decade and then stop growing. Forever! Friend, there is an awesome gap between 86 and 120. Where will those extra millions of barrels come from … day after day?  Because the world oil pool is drying up, most OPEC countries have been unable to increase their production in recent years. Even Saudi Arabia has been trying without success to raise production for 20 years.
There are no more huge untapped pools waiting to be discovered. In fact, many of the officially listed pools don’t even exist. Owing to Near-East politics and OPEC rules, world oil reserves have been insanely exaggerated to comical levels. In actual fact, we’re now sometimes having to drill down as much as four miles to find any oil! You can’t say, “Well, if there is a global shortage, I guess all those poor Chinese and Indians will have to suffer.” No, we’ll suffer right along with them. Their money is as good as ours. In fact, by 2020 or 2025, China expects to be importing twice as much oil as the U.S.— to feed the 170 million new cars they’ll be putting on the road by then. And just in the last year, China used 15% more oil than the year before! (Yes, this should worry you if you’re not solidly invested in Chindia.) We can’t solve the demand problem by slowing down global growth. Americans are in a very bad position to do that sort of trick. A few decades ago, Paul Volcker pulled it off in the U.S. in order to cool inflation. But back then, we had a nice savings rate cushion. Today we have the opposite, a horrendous debt burden, so we have to keep the economy moving. Any attempt to cool things down would kick us into a vicious depression by denying corporations the cash flow they need. You can’t shrug this off with, “Oh, I heard all this stuff back in the oil crises of the ’70s.” Those crises were political. The world actually had the production capacity to meet 130% of our needs in those days. Now it’s about 102%, and that 2% “excess capacity” is hardly enough to get us through a cold winter. Conservation won’t do it. We’ve already gone to smaller cars, double-pane windows, solar panel tax writeoffs, etc. Further conservation will come ever harder.
By 2010, oil will hit $200 a barrel, pushing inflation well into double digits.
Windmill farms will sprout like spring corn all across the land. The U.S. government and the American press will finally admit that we must begin spending hundreds of billions— perhaps a trillion—dollars in a crash program of energy research, focusing on the wave of the future, hydrogen fuel. |  |
The Best of Times, the Worst of Times It’s going to be a golden future—if we can reach it alive and solvent. But as you can see, you can bet your life we’ll face a ton of change and turmoil no matter what we do. I’m confident that the powers that be will eventually wake up and starting pouring tens of billions into energy research, especially hydrogen. But they can’t do it fast enough. (They should have begun by 1970.) Knowing governments, they’ll drag their feet awhile longer, which will prolong the painful transition to a sustainable energy system. The resulting squeezes and panics in the markets can bring you the greatest profits of your life by far. While most investors get blindsided and perhaps drowned by wave after wave of distortions, you will be surfing on them. I have strong hopes that you will be able to multiply your money thirtyfold, sixtyfold, even a hundredfold—while your golf buddies may fight bankruptcy. It will truly be the best of times and the worst of times. 
The Wall Street Wonder
By Stephen Perkins
Publisher, TCI Enterprises
We are introducing something new to the planet: a package of investor services that gives you more benefits than you’ve ever seen before, and at far less cost. But on this page I want to summarize for you the track record of the distinguished financial mind who has made it all possible. Dr. Stephen Leeb has been rated for the last two-year period as one of the top 3 market timers by the major U.S. rating service, Timer Digest. These services have also given him other awards covering periods of five years, which puts him in a different league from advisors who shine in the #1 slot for one year at most. The awards include performance in both bull and bear markets. He was editor of Personal Finance for over 13 years; in the last eight of those, Personal Finance rose to become one of the largest newsletters in the financial world, ranking from third to first in circulation.
At the Top of the Pile in Good Times and Bad Every decent investment advisor makes nice profits in fat years. During most of the ’90s, you could throw a dart at the stock pages and make 20% a year. Yet Dr. Leeb was ahead of the herd even in those days. But I know you’ll be especially interested to hear exactly where he was during the Grand Blowoff from March 31, 1999 (when we began tracking), until today. In that time, he has had a track record that would turn Warren Buffett chartreuse with envy: up 98.6%, compared to Buffett’s 54.1%. This has kept him safely in the top echelon of all growth stock analysts. By the way, in that same period the S&P 500 has been up only 24.7%. Put another way: He beat Buffett’s Berkshire Hathaway by 44.6%, and he trounced the general market by 73.8%. During some bad times. Does that sound like we might be worth $72 of your money? Dr. Speed For 28 years, Dr. Stephen Leeb has been calling the major swings and trends in the markets ahead of time, giving investors advance notice of danger and opportunity. Even if you track a dozen financial authorities, you will eventually find yourself checking out Leeb’s forecasts to ascertain what the future really holds. His talent for mental gymnastics first showed up at the University of Illinois, where he still holds the record for academic speed, having earned an M.S. in math, an M.A. in psychology, and a Ph.D. in psychology in three years (after switching majors from economics). Over the years, his advice has been frequently quoted in The Wall Street Journal, Investor’s Business Daily, USA Today, Forbes, and Business Week. He has appeared on the CNN, CNBC, and Fox News television networks, Louis Rukeyser’s Wall Street Week, Business Insiders, and PBS’s Nightly Business Report, plus Bloomberg radio and TV. Also Dr. Leeb authored in 1999, with his wife Donna, the widely-acclaimed investment book, Defying the Market. In 2004 they wrote The Oil Factor (Time Warner).
Life Is More Than Making Money Let Us Do the Heavy Lifting for You
By Stephen Leeb
Sr. Editor, The Complete Investor
When dollars, taxes, and economic data start to absorb most of your attention, you’ve lost your bearings. You’ve surrendered the “good life” for a stack of monthly statements! That’s why I’m proud to offer you our unique and complete wealth management service. It will help you break free and enjoy life—for peanuts.
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 BENEFIT #1: The Most Accurate Newsletter on the Street Back in 1979 I worked for eleven months on a very complex formula that was like the Holy Grail of investing: predicting the stock market. I almost fell over when it actually worked. One evening, I set the parameters for January 1, 1978, and punched the final button on the mainframe computer. It blinked and clicked for 28 minutes, then coughed up the results. It had predicted every twist and turn of the market for all of 1978! Then I set it up for January 1, 1977, and it forecast 1977 perfectly. It was the same for 1976, 1975 … and all the way back to the 1960s! I was ecstatic. It had called 28 consecutive turns— flawlessly, with no exceptions. I had solved the great Roller Coaster Riddle of yo-yo markets. From Obscurity to Fame Armed with this formula, I entered the investment news - letter field and began winning various awards, like “Timer of the Year,” beating out everyone else in the country—while making some really huge profits for my growing army of readers of Personal Finance—for 13 very good years. If you had been with me, you would have had the same unfair advantage over other investors. And you’d have made lots of money in the great bull run of the ’90s. Since then I have parted company with Personal Finance (amicably) and launched my own advisory, The Complete Investor. As part of this move, I recalibrated my formula for the chaos of today and named it the Short Term Key. To my surprise, it works better than ever. It’s a whole symphony of indicators, and it requires millions calculations. It now predicts the direction of the markets going forward four weeks—no simple feat!
An Unfailing Long-Term Indicator The ability to peer four weeks into the future did sort of put me in a class by myself. I can’t complain about that. But some investments require a longer view, so I started spending many days on the computer, looking for the other half of my Holy Grail. I thought the answer would have to be even more hideously complex than my Short Term Key. But I was incredibly wrong. My Long Term Key turned out to be the simplest indicator you could imagine. I found that a certain measure of the price of crude oil is the most perfect indicator of long term (12 months) stock prices ever seen. Just compare these results: A. If you had simply invested $1,000 in the S&P 500 in January, 1974, you would have made a $35,031 profit by the end of 2000. B. But if you had jumped out of the market during the five periods when oil prices were rising, you would have made $69,267. Quite a difference. Yes, you would have made almost twice the profit just by glancing once a month at the front page of The Complete Investor. Yet these profits are only a tiny blip compared to what’s coming. We at TCI feel that in the years ahead, the Long Term Key could compound your money many times over. This is not an exaggeration. Your profits could be greater than anything seen in our lifetime. You would have to go back to the California gold rush of 1849 to find investors reaping returns like those you will earn for the next ten years by keeping an eye on the Long Term Key.
No Perfection on Planet Earth
Would this Long Term Key ever have steered you wrong? Yes, once, during the four frenzied months of Operation Desert Shield prior to Desert Storm. You would have lost out on 11% in S&P profits. But what is that compared to the extra 3,500% profit it would have brought you overall? Now, if you’re a diehard buy-and-hold investor, you may not feel warmly about hearing me tell you, roughly every five years, that you should get out of the market until oil levels off again (which takes about five months on average). But this “time out” really shouldn’t bother you at all. After you step out of the stock market, you will enjoy the smug sorrow of telling your suffering friends, I told you so. While you’re collecting interest on T-bills, they’ll be taking a bath. Meanwhile, you’ll have the confidence of knowing that you’re waiting for a re-entry signal from an indicator that has been 99.98% perfect and on time. So relax a bit. I’m never going to tell you to sell everything you own, put it all into T-bills, and move to a bombproof shelter in the Yukon. That’s not my style. As a member of the Complete Investor Club, you’ll have the confidence of knowing that our mid-term and long-term decisions for your portfolio are smoothly run by a 99.98% perfect indicator. It’s your assurance of a future filled with rich profits.
 BENEFIT #2: Quick Announcements of Needed Changes You can’t live with your eyes on CNBC all day, watching for a downtick on one of your holdings. So let us do that for you. For FREE. Here’s how it works: In our monthly newsletter, The Complete Investor,we maintain five main portfolios. When you become a member of the Complete Investor Club, we put your choice of our portfolios into our computer Then whenever we drop any stock, bond , or fund in any of our five portfolios that you have chosen, we notify you by e-mail (or fax) WITHIN MINUTES. Electronically and automatically. High-end advisory services with this kind of speed usually cost you $1,000 to $5,000 a year. When you subscribe to The Complete Investor Package, the Instant Alerts are yours at no extra cost. Now, even if you’re a total technophobe and wouldn’t own a fax or computer if Santa gave you one with a big red bow around it, I expect that our newsletter alone will make you more money than 99% of the advisories out there. But remember: The reason big-name advisors can charge you up to $5,000 per year for their high-speed electronic intensive care is that they typically double the profits you would have made otherwise. And I anticipate that our Instant Alerts will do no less.
How Instant Alerts Work
They’re simple. <b>A. Sell Notices: Look at the enclosed reply sheet. Let’s say you check the box for the Growth portfolio. Thereafter, whenever we sell anything in that portfolio, you will receive in minutes an e-mail (or fax, your choice) stating what we did and why. Keep in mind, we don’t sell only losers; sometimes we sell holdings that have gone up too far or too fast, and are expected B. Orange Alerts: Let’s suppose you own stock in Microslop, which is part of a Complete Investor portfolio, and it has a rough day in the market, yet we elect to keep it. In that case, you would not receive an Instant Alert sell notice. But at the close of trading, if Microslop has fallen 5%, you will receive an explanation of why it fell—and why we are keeping it. Such Orange Alerts will not only help you feel better about your holdings, they may save you from a rash decision to sell Microslop based on a technical a quirk in pricing … or a temporary scare-dip that will soon reverse itself … or a supply or labor problem that should be resolved quickly. You may choose to get your alerts by fax—if you have a dedicated fax line that receives faxes automatically. But e-mail is more reliable.
Regular E-Mail Alerts
In addition to these occasional e-mail/fax alerts, you will get:  Our Monday evening review, a two-page-or-so summary of that week. (As we saw it!) Plus, on any day there is turmoil in the markets, we’ll send you a straight insider explanation. We’ll issue an end-of- day wrap-up by about 6:00 P.M. EST. We’re here to make you wealthy—while minimizing your suffering! If your server has a bad habit of losing e-mails, you can always go to our members-only website (www.completeinvestor.com), enter your password, and read all updates. As you can see, this goes beyond what you receive from ordinary financial services and newsletters. Our Instant Alerts give you all the speed you need … plus all the economy you could ask for … at no extra cost. Now you can stay well ahead of the pack painlessly. Instead of squinting at the newspaper to check the status of every single stock you own every day, you’ll just glance at your e-mail. Nothing could be simpler—or more profitable. It’s somewhat like having me living in your house … except I won’t be raiding your refrigerator all day.
BENEFIT #3: The TCI Question Center Have you ever wished you could just pick up the phone and get a quick answer to a technical question from some knowledgeable person? Have you ever wondered whether stock XYZ has too much of a debt load for you to buy it? Have you ever sat for hours, worrying about a certain stock you own? In my lifetime, I’ve discovered that the more you tell people, the more questions they have! No matter how much I squeeze into a speech or newsletter or load onto a website, they always have questions. And they’re often important! Unfortunately, big newsletters and magazines aren’t equipped to handle those questions. The staffing just isn’t there. So readers may flounder around, ask their friends or broker, or act on guesswork. Not so at TCI. We want to be your full service wealth managers. We want you to be able to move with confidence. So in a rather brave move for a young agency, we have set up the TCI Question Center, a call-in, write-in, e-mail in, fax-in service to provide timely answers to your information-gap problems. Now, when you’re faced with a question that neither your broker, brother, nor barber can answer from a wise and neutral perspective, you’ll be able to pick up the phone and call us. In your first monthly issue of The Complete Investor, you will find our unlisted Question Center phone number, fax number, and e-mail address.
Fast Answers for Fair Questions We can’t do everything. We can’t tell you what George Soros had for breakfast this morning. Or whether to refinance your house. And please, we can’t sit and listen to you whine in our ears about how unfair life is! This service is for concise, appropriate, answerable queries on our own listed stocks and funds, not general-education requests, queries on equities we don’t recommend, heavy research problems, or daily phone-therapy sessions that might divert needed income from your shrink. But we can and will give you the kind of information on our portfolio holdings that is readily available to a highly sophisticated, financial networking operation like us. We can save you from poking around on Google.com for two days in search of an answer to a two-minute question. We can certainly make life easier for you. I want to spoil you as no one has ever spoiled you before! I want you to rely on our experts for customized information, Instant Alerts, and peerless advice under all conditions. I want you to become the kind of investor who oozes confidence, knowing exactly how to do what you need to do at every point in your financial life. Enroll today for our one-year package of services. Or better yet, two years. Both packages have a generous, money-back guarantee.
 BENEFIT #4: An integrated set of portfolios that caters to your investing style, yet allows you to adjust to market conditions. You probably tilt toward a certain kind of portfolio, such as conservative or aggressive. We won’t try to change that. But we want to make it easy for you to broaden your investing style as your needs require—or as market changes dictate. If your situation changes over the years (hopefully improving), you’ll now find it easier to shift a bit, from one style of investing to one that’s a level or two different. That’s easy with our seamless pyramid. It has six levels that are clear, yet still allow you to easily move a bit upward or downward, as you wish: 1. At the bottom are Cash Equivalents, such as bank passbook accounts, Treasury bills, and that wad of cash and Krugerrands you buried in your back yard in ’87. Everyone should have a foundation of some cash equivalents, though the amount varies with your situation. You need a base of money, both for safety and to maintain your ability to seize new opportunities that pop up. Without cash, you can’t wiggle. “Cash” is not actually a separate portfolio, but most of our portfolios may have a cash component. 2. The next layer in this risk/reward pyramid is The Income Portfolio, which includes:
fixed income funds
utilities
bonds
convertible preferred stocks
ultra-conservative financial, energy, and limited partner ship stocks, plus REITs. Within this level, you may wish to emphasize ALL-INCOME or TOTAL RETURN. Despite our great success with growth stocks, we know you still need a foundation of anchor holdings for safety. 3. The next level is FundFolio. If you like the convenience and diversification of mutual funds, this is your cup of tea. Here again, it will allow you two alternatives: You may choose to play it down the middle by owning everything on the list. Or you may specialize in more CONSERVATIVE or GROWTH-TYPE mutual funds. 4. Next is our Fund Finds, commonly called What They’re Buying. This ingenious portfolio is basically CONSERVATIVE. What makes it a Complete Investor exclusive is that it contains the hidden favorite stocks of the top U.S. mutual fund managers. I’ve found a proprietary method of uncovering their “secret love” elections. You’ll be surprised when you see it! As a big plus, it will enable you to “raid” mutual funds that are closed to new purchases by cherry-picking their hottest stocks. (Remember, when an open-ended fund closes, it’s usually because it’s swamped in money.) 5. Just a bit above this on the Beta scale (higher risk & reward) is our Growth Portfolio. It includes a blend of big-cap and mid-cap stocks—all underpriced and all bound for glory! They’re the hottest stocks you would ever want your mother to own! If you like to keep all your holdings in one category, this is the highest level I would recommend. SAFETY FEATURE: To balance off the slightly higher risk level, this portfolio will, in downward times, emphasize more cash—and zero coupon bonds. 6. Finally, for your speculative money only, we offer The Fast Track. This is not a full, balanced portfolio, but an exciting list of beautifully aggressive stocks, any of which could double or triple your investment in a year’s time. Although they all have great stories and are deliciously tempting, I advise you to keep Junior’s college fund out of this box. Use it only for money you can live without. (Yet if your spouse won’t let you near the slot machines in Reno, The Fast Track is a far safer alternative!) In good times, it can make you wealthy in short order. In really bad times, it could shrink like a two-dollar shirt in the laundry. Use it wisely … or just to add spice to your life! NOTE: If and when we feel that markets are nearing a serious drop, The Fast Track will offer a selection of shorts to enable aggressive investors to protect and even multiply their money quickly.
Enjoy Our Vertically Movable Feast I don’t want you ever to become imprisoned in any particular one of my portfolio categories. I want to you be a complete investor, able to move with ease and skill into a different style of investing whenever… You mature in your ability to understand “higher,” more demanding types of investment properties. The markets change and begin to reward a different style of investing from what you’re used to. For instance, in a long boom, an income investor may want to get into some growth stocks. Your situation changes: You retire, you sell a business, you receive an inheritance, or you make enough profit through The Complete Investor to enable you to buy things you couldn’t afford before. A BIT OF HELP: When you look at the monthly listings for some of our portfolios, you’ll see that they’re not in alphabetical order. They’re ranked by type and by economic sensitivity. That is, the items at the top are the least sensitive to ups and downs in the U.S. economy. Those at the bottom are the riskiest. This manner of listing will aid you in transitioning gradually upward or downward, from one portfolio to the next. You will be able to see at a glance which securities are the most appropriate if you wish to nibble your way into an adjoining category painlessly—instead of just selling off everything you own and buying a whole new portfolio.
BENEFIT #5: Staff That Is Second to None If I could walk through the offices of the leading brokerages and hand-pick any big name stars for my staff, I would still take the editorial team I’ve got. Why? Because they have a habit of being right. They can talk eye to eye with any “authority” you’ve ever seen on television. Their judgment has not been distorted by a lifetime of work in a politically correct environment where certain stocks are pushed, the clients are sheep to be fleeced, the firm’s bottom line is the top consideration, and image is the key to success. I have worked with my team for years, and I’ve seen their work day after day, year after year. They’re the best! Let me introduce them to you briefly:  | | Stephen Leeb, Ph.D., Senior Editor. Widely noted author and media figure. Formerly, Editor of Personal Finance for over 13 years. |  | | Genia Turanova, Associate Editor. Ms. Turanova has both teaching and equity research experience. She holds an MBA in Finance and Investments from Baruch College, CUNY. |  | | David Sandell, Associate Editor. Mr. Sandell holds a degree in Psychology and Finance from Washington University in St. Louis and is a CFA Level III candidate. |  | | Stephen Perkins, Associate Editor. Mr. Perkins was Director of International Operations for a Swiss company and ran an international staff for over 24 years. |  | | Gregory Dorsey, Contributor Well-known financial journalist and stock analyst with 20 years of experience. He holds a degree in Economics and International Relations from the University of Delaware. |
Even The Wall Street Journal (bless their mahogany hearts) doesn’t have a financial editorial panel like this. Our team works like beavers on steroids to bring you news that’s so hot, it hasn’t even happened yet. Even though our first issue came out in September, 2003, we’ve already gotten two prime awards. The Newsletter & Electronic Publishers Foundation gave us their first place award for Editorial Excellence in 2004 and another award in 2005. Unheard of!
 BENEFIT #6: Strategy for Rising Profits in Falling Markets I refuse to ever let you sink with the S&P or die with the Dow. Though we at TCI feel strongly that world economic conditions will continue to force markets upward long term, we guarantee you that they’ll also fall from time to time—in major setbacks. We are absolutely ready for those setbacks. In my previous position as the editor of Personal Finance, I weathered the recent tech bust in good shape overall and beat the Russell Growth Index by 44% over 41/2 years. Now, my staff and I are ready to do it again if need be—even more strongly this time. Anytime big selloff is on the Street, we will inform you on the best course of action, in our opinion. Depending on how defensive you wish to be—or how eager for the downmarket profits. We will be making changes in our portfolios, or even recommend carefully selected short sales. Perhaps you’ve never used defensive market tools like these. I understand. That is why The Complete Investor will keep giving you an ongoing, street-level education in bear market strategies along with many other items for your arsenal. Early on, you will learn how to take the “other” side of an investment, not only to defend yourself from losses, but to make large gains from skidding prices. I’m sure I don’t need to remind you of how some financial giants of the past made their fortunes off the Crash of 1929. Frankly, I don’t foresee any such crash in the next ten years. Stomach-churning ups and downs, yes, but no crash. Yet if one happens, you’ll now be more than ready for it. We will not allow your nest egg to be nibbled to death in a downmarket glide. We will show you how a complete investor can thrive in bad times.
Chicken Little Notices Although I’ve won awards as “Market Timer of the Year” from the major rating services, The Complete Investor is not a market-timing letter. Further, I don’t foresee any reruns of the Y2K panic on the horizon. Some people, however, think that total selloffs are the most logical thing in the world whenever big drops look imminent. Perhaps only 5% of my readers share that attitude, but if you are among this minority, then here is my promise: If I ever see a clear and present danger of a major market collapse, I pledge to immediately send you an e-mail or fax and post a bulletin on our website stating that contrary to my expectations, the sky may indeed be falling. I will do everything within my power to shield you from heavy losses and give you time to “sell out” if you wish. TCI is all about giving you wide options.
BENEFIT #7: Lifetime Education in All-Weather Investing Ever envied Warren Buffett? Of course you have. Money pours from his fingers. He knows how the markets work, and he works the markets like Minnesota Fats used to work a pool table. I want to gradually turn you into another Buffett, a superinvestor who can do anything, handle any market conditions with confidence, and use every item in today’s investment toolbox. My staff and I can do it. You’ve just discovered the only investor service in the world that takes the education of its members as a prime responsibility. Our highest goal is to empower you to make substantial profits in any weather—with comfort and confidence. I want to give you a free, ongoing, PhD-level education in how the markets work so that you can see into the future and position yourself accordingly. To this end, we will give you timely “bonus articles” in the newsletter and various “evergreen articles” on the website. Over time, they will make you a much stronger and wealthier investor.
Picture Yourself as a Complete Investor Maybe today you’re comfortable only with mutual funds ... or bonds ... or income stocks. Anything else could give you heartburn. We understand. At the same time, we know that market conditions vary enormously, so the more flexible and versatile you are, the more able you are to cash in on the opportunities in each and every kind of market. Our aim is not to turn you into a gambler, but to give you the tools to profit in unlimited ways from any market. Toward that end, we will present to you an ongoing series of brief articles which will give you the confidence and savvy to invest the best way in any situation. You will kiss your limitations goodbye. You’ll become a complete investor. 
A Wall Street investment manager will usually charge you 1% for his complete array of services. Perhaps 11/2%. So if your portfolio is a million dollars, you’ll pay $10,000 or more. Every year. Fair enough, and perhaps well worth the money. But we think we can serve you far better. Our offer is …
Total Wealth Management for Only $72 a Year By Stephen Perkins
Publisher, TCI Enterprises You won’t beat that anywhere under the sun. You must admit, $72 is incredibly inexpensive. But the surprising fact is, you’ll get more for your $72 than for your $10,000.00+ …because Dr. Leeb’s long-term track record is better than just about anyone else’s. You would have to knock on a lot of polished cherrywood doors before you’d find someone with a published, tracked performance record ahead of his—even a little bit ahead! In fact, over the past 14 years, he has won a number of stock-picking awards by beating everyone else—occasionally by a wide margin. In addition, Dr. Leeb’s oftquoted advice is the centerpiece of a full array of investor services … The Complete Investor Club: A New Invention for These Perilous Times Our club has appeared on the stage of history just in time. The global turmoil has just begun to turn the world sideways. Instead of having a North and South Pole, we now have an East and West Pole! History, politics, and geology have pitted the East against the West in a massive final battle over the world’s remaining energy sources.  This battle will rage until new sources of energy come on line—and yet here in the West, this battle has barely become visible. While the Fed continues to play at controlling the U.S. money supply, the true Titans of money, the Asian central bankers, glare down at them with ever-decreasing patience. For about 15 years they have been pouring their goods into America in stupendous quantities … and reluctantly accumulating, in return, a vast storehouse of fading American dollars.
To maintain their stability, the Chinese doggedly kept their dollar (the renminbi, or “yuan”) tied to the U.S. dollar, even though everyone recognized that the yuan may be worth four or five times its current value. Then, in summer 2005, they began to let it float against the dollar—but only within a narrow range, 2.9%. (The Chinese like to move in small increments.) Soon, though, their central bankers will play their next card and let the yuan float completely. At that point . . . Grab Your Parachute As the yuan takes off for the moon, the dollar will fall accordingly. All those chickens (the trade deficit, the budget deficit, and our hard-wired debt) will come home to roost. Central bankers and traders in Japan, India, and the other Asian countries will immediately sail with the prevailing winds. Even the Saudis may follow along. Unfortunately for America, that would likely mean that all the Arab and OPEC countries would no longer allow their oil to be chained to the dollar. They would begin to sell oil for yuan or euros or (gasp!) Saudi riyals. In any case, the 90-year worldwide reign of the Almighty Dollar will be history. America’s stock and bond markets will remain predominant in size, but the tremendous built-in advantage of having oil tied to our native currency will be gone, perhaps forever. Within months, the U.S. will be the world’s #2 trading bloc. Investors with all their money tied to the USA will be caught with their pants down. But members of the Complete Investor Club are hitching their wagons to a rising star, Chindia, and they will be on the receiving end of the great pool of wealth that will tragically be lost by millions of Joe and Jane Investors. Even in the face of financial ruin, Joe and Jane will continue to define their problem as “climbing oil prices.” Wrong. This time, the problem is not oil prices bobbing up again. This time, the problem is oil disappearing altogether—or to be more accurate, becoming available only at prohibitive cost. Major paradigm shift. We’re shifting out of an oil economy. Wall Street types do not understand this. Their blindness can bring you great wealth. The Biggest Profits in Centuries From 1995 to 2000, we heard a lot about the new economy. That was silly. There was no new economy, just a massive tech bubble. This time it’s real. We are facing an economy unseen since 90 years ago, when your greatgrandpa unhitched his team of plow horses for the last time and sent them out to pasture with a whack on the rump. Today, the investing public will be getting a whack on the head as they are turned out to pasture, except the pasture is going to look a lot like the Gobi Desert. In winter. It’s bad news for them, good news for you. I don’t have to tell you that upheavals always produce profits for the lucky few who are positioned right. What I want to emphasize here in shouting type is that the worse the upheaval, the larger the profits; and this is going to be the biggest financial upheaval since the Black Plague swept through Europe.
When all this happens, will you be on the long end of the stick? Only if you’re aware of what’s coming: The price rise of fossil fuels, spearheaded by oil, will jack up inflation faster and faster. Interest rates are going to climb right along with it. From that point, everything will shift like when you give a kaleidoscope a quick spin: All those 5% adjustable rate mortgages will spike up, pushing payments 50% to 100% higher. Expect to see lots and lots of For Sale signs. Every time another For Sale sign goes up in your neighborhood, your house (likely the linchpin of your estate) will sink in value. The entire bond market will go Very Far South in a handbasket. Most everything in the stock market that is not nailed down will come loose and squirt off in all directions. As uncertainty returns in spades to the business community, layoffs will resume. Etc., etc., and also etc. Use your imagination. Am I stooping to scare tactics here? Well, maybe. If I shout Fire! in a burning building, am I using scare tactics?
So Little to Lose, So Much to Gain For the very near future, TCI is bullish. We think lots of money will be made short term, and our clients will be right in the thick of it, following our buy recommendations in a number of sectors. We urgently implore you to join the Complete Investor Club for the next 12 or 24 months and reap profits from this bustling market. But please keep in mind, there’s a fast fuse burning in the closet, a fuse attached to a very large financial bomb. Time to Upgrade Yourself This is a whole new phase of history, and you need to gear up for it. Over the next five years, millions of investors will mindlessly follow the Wall Street crowd off a cliff. Don’t get sucked down with them! By becoming a TCI clientmember, you're saving at least 1% a year of the value of your investment portfolio, compared to relying on a money manager or mutual fund manager. By favoring the Chindiabased and energy-related investments you’ll find in The Complete Investor, you could be worth many times what you are today—in just a few years. By watching our exclusive Master Key indicators, your whole portfolio will eventually grow to far more than it would have been. When you can see the shape of the future, the world is yours. Become a complete investor
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