Before I begin, I want you to know that I’m not going to bore you with any economic doublespeak about currencies. That would be like trying to tell a kindergarten class how an internal combustion engine works.
What I will tell you, in the most simplistic terms, is how you can profit from the lowest dollar in 15 years. Then I’ll connect the dots to a few of the companies we own that will be making money hand over fist.
That way you’ll see both our Blue Chip Growth strategy in action and how we apply this to all our investments.
So let me make it easy for you. A falling dollar does two things:
- Makes foreign imports more expensive
- Makes U.S. exports cheaper on the world market
The chain reaction not only increases sales of U.S. goods around the world but also creates more jobs for Americans. The end result increases the profits of U.S. multinationals.
And that’s just the half of it.
Because a cheaper dollar makes foreign products more expensive, Americans buy more American goods as well—creating even more U.S. jobs.
On a purely psychological level, it does even more than that: It creates greater investor and consumer confidence, as more Americans are working, more consumers are spending, and more American companies are profiting.
On top of that, a falling dollar has one potentially bigger benefit. It reduces the trade deficit, further strengthening the economy.
And while there are others who might take exception to my simple explanation, they’ll certainly agree on this: American exporters will make out like bandits.
And it’s all because American goods become much cheaper and the world buys more of them. That’s why if you can take an ownership position in just a few of the companies I’ll tell you about here, you’ll make out like a bandit, too.
How the Soaring Demand for Food and Ethanol Could Double Your Money
As the falling dollar makes American goods cheaper all over the world, the U.S. agricultural sector will take off.
How can this be? Because the American agricultural industry lies at the crossroads of three global trends: 1. the falling dollar, 2. rising food costs, and 3. rising oil prices.
As a result, the manufacturers of farm equipment as well as the producers of fertilizer and genetically engineered corn seeds will be take-to-the-bank winners. Our three top performers in this sector will make money hand over fist.
However, the biggest moneymakers of all will be the producers of improved seeds for growing crops. The reasons are quite obvious.
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To understand why demand for corn and corn products is rising exponentially and our #1 pick could double your money in 12 months, you need only consider these two simple factors:
While we eat fairly well here in the U.S., both China and India face food shortages brought on by population growth, water shortages and smaller harvests.
As a result, both countries have already turned to the U.S. markets for grain and livestock. However, that’s simply a short-term solution. In order for these countries to secure their food security, they must continue to develop their own agricultural industry.
This is why we at the Blue Chip Growth Letter believe that the biggest opportunity lies in genetically modified seeds. The reason is simple: Genetically modified seeds not only increase crop yields, but also increase nutritional value while reducing susceptibility to crop-killing pests.
Because growing your own food increases your country’s food security, demand is exploding.
Today, more than 8 million farmers in 17 million countries grow genetically engineered crops on 200 million acres—a 20% increase from a year ago.
However, this number is expected to double by 2010, driven by China’s expected approval to grow genetically engineered crops.
That’s just one reason why corn prices are exploding and why taking a small position in the world’s leading producer of genetically engineered seeds could easily double your money in the next 12 months.
The Second Big Reason Why Global Demand for Corn Seeds Is Exploding
In addition to demand from China and India pushing up corn prices, higher oil prices are driving up demand for corn products as well.
How can this be? Because you don’t drill a well to produce ethanol; you grow it! Many investors may not realize this, but ethanol is grain alcohol produced from corn.
If you’ve never heard of ethanol, it’s the grain alcohol that went into gasohol in the 1970s to help us get over the Arab oil embargo.
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Today, thanks to a number of technological breakthroughs, it’s now possible to run cars on ethanol. And doing so comes with two big benefits: (1) it produces fewer emissions and (2) it comes from right here in America’s heartland—not the Middle East.
With Americans fed up with Middle East oil politics driving up the cost of gasoline, experts estimate that you could easily see ethanol go from a fringe fuel to a significant energy solution over the next five years.
One government report I read believes that by the year 2030, ethanol will fuel 30% of America’s vehicles.
Already the government has mandated that gas producers replace MTBE with ethanol to reduce emissions and increase performance.
The result has put powerful upward pressure on corn prices as the twin forces of food and energy are squeezing prices higher.
As a result the price for corn—America’s #1 food crop—has jumped 98% in 2006 alone and with it the fortunes of our top corn producer.
You needn’t take my word. Keith Collins, chief economist of the U.S. Agriculture Department, puts it best: “The consequences of ethanol are the biggest thing going on in agriculture today. We are talking about a higher new benchmark for corn.”
When you consider that corn and corn by-products are used not only for making breakfast cereals but also for making soft drinks and baked goods as well as for fattening cattle, pigs, and chickens…
…you can begin to see with your own eyes why I believe my top pick will be the triple-crown winner of three mammoth trends: the falling dollar, rising food cost and rising oil cost.
That’s why if you take a small position in the world’s leader in production of genetically engineered seeds, you could easily double your money in the next two years.
That’s a big claim, I know, but the fact is that our top pick in this sector has already made readers 276% richer since February 2005 and is now on track to reap these gains with or without you.
Write This Name Down Now
Monsanto (MON) is by far the world’s largest leading producer of bioengineered crops. In fact, the company’s market share is so huge that experts estimate that Monsanto has developed 70% of the world’s insect- and herbicide-resistant crops.
Do you realize what this means?
That’s like having a 70% market share in the one commodity that every human being on Earth needs to survive—FOOD.
When you add the fact that demand for ethanol is putting powerful upward pressure on the price of corn, you can see why the company is about to hit the jackpot again as sales to China and India explode from the falling dollar.
In fact, as I just mentioned, if you had invested $20,000 in this company two years ago, you’d be sitting on $75,200 now. A $100,000 stake would now be worth $376,000.
And it’s all because the demand for genetically modified seeds has exploded by 20% over the past two years, and the company has a locked-in market share.
So it’s no surprise the company’s first quarter earnings were up 184%, citing continued strength in its corn business with higher-than-expected sales of corn seeds in the #1 ethanol-producing nation on Earth, Brazil.
For these reasons alone, I could see the company handing us a 50% gain in the second half of 2008.
However, when you take a closer look at the company’s global leadership and achievements over the past three years, even that estimate could be on the low side.
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And it’s all because Monsanto is not only at the heart of feeding a hungry planet…but also at ground zero for developing new corn-based alternative fuels like ethanol.
Why in four years, from 2003 through 2007, the company saw its sales jump nearly 40%, from $5 billion to $8 billion in 2007.
While 2007’s numbers won’t be in for some time, just look at a few of the company’s achievements to date:
- Granted approval by China for a handful of genetically enhanced soybeans and corn seeds
- Expanded grain deliveries to Brazil
- Increased cotton yield in India by 58% while reducing pesticide use by 50%
- Increased quarterly earnings forecast for 2007
- Increased its dividend by 18%
As a result, the stock is not only up 100% over the past 24 months, but is also perfectly positioned to hand you triple-digit returns in the months and years ahead.
As a shareholder, you’ll not only profit from every ear of corn, soybean, plant and vegetable that’s grown to feed two-thirds of the world’s population and power their cars…
…but also benefit from a company that’s 100% committed to increasing shareholder value.
In my book, Monsanto offers you a ground-floor opportunity to profit from the convergence of three unstoppable trends. Over the next three to five years, I expect Monsanto to grow 30% to 50% a year.
But don’t buy it yet. Be sure to check my updated buy price in this month’s issue. With the market continuing to bounce up and down as if attached to a giant bungee cord, my target price and a little patience could add an extra 20% to 30% to your profits. If you can buy it at today’s bargain price, you can book your world tour now and enjoy sky-high profits year after year.
Monsanto is just one of 20 trend-riding companies that I’m recommending for immediate purchase. Each one not only lies at the crossroads of a number of unstoppable trends but also is growing its earnings exponentially. As you’ll discover, these recommendations not only form the foundation of our investment strategy for 2008…but are also detailed in a special, privately circulated report I’ve written exclusively for my Blue Chip Growth readers—The 20 Best Stocks for 2008. And it’s yours free when you accept a no-risk trial subscription to Blue Chip Growth. For a sneak preview of these new wealth-builders, along with my proven method of investing that’s helped my subscribers beat the market by $3 to $1 for more than 10 years, click here now.
