Smart Money Investing

Written By Brian Hicks

Posted May 13, 2008

“A lot of people don’t know this, but Ian Cooper and I developed an insanely simple, but highly effect trading technique in 2001,” said Brian Hicks on February 13, 2008. “We called it the ‘Billionaire Boys Club.'”

This ‘smart money investing‘ system was simple enough… buy and hold the same stocks that the billionaires were buying in the open market. It worked brilliantly.

We followed Sumner Redstone religiously in 2002 and 2003, as he bought millions of shares of Midway Games and WMS Industries in the open market.

And it turned out to be one of the best trades we made all year.

Midway games (MWY) quadrupled in price in 2003, flying from $3 to more than $12.


Midway Chart

WMS Industries (WMS) went from $12 to $21 inside of six months.


WMS Chart

And we did it again in 2008 with T. Boone Pickens.

Trading alongside billionaires – the ultimate in “Smart Money Investing” – is easy.

That company was Interoil (IOC:AMEX).

And we were spot on…  

After holding IOC for only two months, the underlying stock is up $7.23 from our entry price, and our June 2008 20 call options are up 91% in Pure Energy Trader.


IOC Chart


It made sense not to bet against Pickens. He’s not one to throw around investment dollars at just any company. A man of his intelligence and stature is sure to have done plenty of research, and is sure to be well in the know before investing in any company.

It’s why we followed his lead into Interoil after he increased his holdings in the beaten down oil play with explosive opportunities in Papua New Guinea.

Yep, thanks to Pickens, IOC became the smart money buying opportunity of a lifetime for Pure Energy Trader.

And it paid off just as we planned.

After months of waiting, our Canadian company with operations in Papua New Guinea announced a gas and gas liquids discovery in the Antelope structure in its Elk-4 well.

Says a recent press release:

“The Elk-4 well has successfully penetrated the Antelope structure, a new discovery which will significantly augment the gas found at the Elk-1 discovery well. Drilling operations experienced a gas kick and a flow of gas and gas liquids to surface which was circulated and flared. The well is now being prepared to drill deeper under pressure followed by comprehensive evaluation.

‘This well confirms the presence of hydrocarbons in the Antelope structure,” said Mr. Phil Mulacek, CEO and Chairman of InterOil. “We are very excited about this early result and we look forward to drilling ahead to establish the commerciality of this discovery.'”

And there’s still further upside for IOC.

But as with most billionaires, diversification is key to profit making.

“When I go into these markets, I expect to make money on them. I don’t expect to lose,” says Pickens.

With plans to spend some $10 billion to build the world’s biggest wind farm, the billionaire has gone green.

Yep, this June, Pickens’ Mesa Power will start buying land and ordering 2,700 wind turbines that could generate 4,000 megawatts of electricity (enough to power a million homes). They’ll be built on over 200,000 acres of Texas panhandle.

And it’s a smart move, as we deal with $122+ oil.

“Oil fields have a declining curve – you find one, it peaks and starts downhill, you’ve got to find another one to replace it. It drives you crazy! With wind, there’s no decline. “You need a giant plan for America,” he says. “Not the pissant 83 megawatt [windfarm] deals being stamped all over the country. There needs to be a huge plan from someone with leadership. It’s going to take years to do, but it has to start now.”

Fortunately, the editors of SC Trading Pit are familiar with the potential as well…

Says Brian Hicks:

“We simply cannot ignore about the wind energy market is its growth during 2007. Last year, a record-breaking 20,000 megawatts (MW) of wind power were installed around the world. That means that wind energy supplied approximately 94,000 MW of energy. In other words, that’s a growth of around $36 billion.

Let’s put this smart money investing play into perspective…

Between 2005 and 2007, both Germany and Spain’s wind power capacity experienced impressive growth (about 21% and 51%, respectively). Now look back at the U.S. growth.
Our capacity catapulted nearly 84%!

Don’t think for a second that wind energy is about slow down…

Since 2000, wind power production has increased fivefold. Remember that during that period, oil prices have grown nearly the amount. Now that a peak oil is starting to get under the global spotlight, we can expect to see a massive interest in renewables like wind energy.

I’ve personally read reports from the U.S. Department of Energy stating that wind energy supplied in just three U.S. states could potentially power the entire nation!

Think about it for a minute.

We’re talking about a source of energy that is a renewable, clean, has a low operating cost and has technology that’s been around for over century (the first power producing windmill was created back in 1887).

But it isn’t just the past growth that we’re impressed with. Over the next two years, the Global Wind Energy Council (GWEC) predicts that the world’s installed wind power capacity will practically double to 149.5 GW. If you notice, the installed capacity in 2007 was 94,000 MW-which was higher than originally forecasted!”

While there are publicly traded wind energy stocks out there, Brian recommended a $2 wind stock on February 21, 2008 that has since rallied to $3 in SC Trading Pit with near-term $5 potential.

Lesson learned… Anyone who says you can’t make money following billionaires isn’t making the money we’re rolling in.

Good Investing,

Ian L. Cooper







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