Baltimore — (TFN): You don’t believe all the hype do you? As we close out another year and another decade, the pundits are busy rehashing the action of the past ten years.

The political types are discussing the rise and fall of the Bush administration, a couple of wars and the nation’s first black president. The Hollywood folks are talking about the end of the sitcom, the death of an icon and the phenomenon that is American Idol.

And, of course, the financial types are talking about the decade that never happened. You know, the fact that at the start of the decade, the Dow was actually worth more than it is today.

Sure, if you happened to be the poor sap that bought the Dow on January 1, 2000 and held it until today, you’d be down about 9.5%. But I’m willing to bet that is not you.

As a contrarian investor, you are more likely to be holding a pile of gold. In that case, you are sitting on gains of about 300% over the past decade.

But again, I don’t think that is you, at least not entirely. If you are anything like me, you are sitting back, wondering if the next decade is going to be as good as the last.

Think about it. We had high interest rates, record low rates, a housing bubble, a tech bubble, record high oil prices, ultra-low natural gas prices, a couple of wars and the biggest government bailout you could ever imagine.

If you can’t make money in that kind of environment, you flat-out aren’t trying. Even if you racked up 300% gains from gold, you could have and should have done better.

The only thing the last decade proved was buy-and-hold investing is dead. But that’s why we have exchanges, so you can buy and sell assets when the mood strikes.

If you were a true contrarian investor – bought when nobody else was buying and sold when nobody else was selling – you probably just locked in monstrous gains on gold, you are rolling in cash at the moment and are looking for the just the right opportunity to hop back in.

If so, the next year and the next decade are going to treat you very, very well. If you think the last ten years was full of upside downs, wait until you see what’s in store.

Government healthcare, more bailouts, more regulations, more taxes, more government control, more investing options, more interest rate movement, more bubbles, more international exposure… the list goes on and on.

Yeah, we may be back to where we started, but it took one hell of a journey to get us here.

Take my word for it; the next ten years will be the decade for contrarians. Gold will soar. The dollar will fall and interest rates will rise. Better yet, the exact opposite will happen during calculated, short-term blips.

That means we have the kind of market active forward-thinking traders yearn for.

Now is the time to make your move. If you have been sitting on the fence, waiting for the right time, take the end of the year to approach a new starting line and join one of our three services, TFN Strategic Trader, Hot Stock Confidential or Penny Stock Confidential.

All three perfectly play the contrarian viewpoint, and better yet, as a member, you’ll never have to worry about saying, “where’d the last year go?”

You’re at the start of the best decade of your life.

*** As contrarian investors, we like hard assets, the more down and out, the better. Right now, there is no better tangible good, with a worse reputation than good ‘ole American coal. Politicians hate the stuff, factories love it and investors have yet another shot to get rich off of it.

In 2006, I was a bit of a coal industry junkie. I read books on the stuff, wrote countless articles about my research, even went on the radio, TV and the seminar circuit talking about the nation’s dirtiest fuel source.

In today’s world of “green energy” and global warming scares, coal is a nasty four-letter word. But with a couple centuries worth of the stuff buried underground, we all know that’s going to change. Come the next political campaign or environmental hype, coal will launch back into the foreground.

You know it. I know it. And the folks at Bucyrus (NYSE:BUCY) know it. That is why the heavy equipment maker is placing a $1.3 billion coal-industry bet this week.

In a move that tells Caterpillar (NYSE:CAT) and Joy Global (NYSE:JOYG) that they had better pay attention, Wisconsin-based Bucyrus is cutting a check to Terex (NYSE:TEX) in exchange for the company’s mining business.

Again, this is the kind of far-sighted, buy-when-nobody-else-will move that pays incredible dividends in upcoming years. It’s the kind of stuff contrarians dream about.

Just when the coal industry could look no worse, the sector’s biggest names move their bishops in an ever-lasting game of chess.

Today’s move is beneficial for both sides of the bargain. Terex gets a cash infusion that allows it to concentrate on its core business and Bucyrus gets a hunk of assets that allow it to up the ante versus the industry’s behemoths like Cat and Joy Global.

Here’s what you can expect out of the coal industry over the next year: more consolidation, greatly increased share price, strong demand growth, and, most importantly, better representation amongst the nation’s politicians.

Now’s the time to make your move.

*** I wish I had better news for the gold bugs. It has been dang near a month now since I said to sell the stuff and prices have gone ever since. Don’t blame me. I’m merely the messenger.

There is good news. The downturn won’t last long. It’ll be just enough to get the speculators and the hyperbolic masses off the wagon and then prices will turn north once again.

As soon as the magical metal bars are selling for less than $1050 an ounce, put in your buy orders once again. My take is we’ll see $985 by mid-January, but just in case China makes more waves between here and there, $1050 is a good entry point.

When the stuff is selling for $1250 in April and $1,500 this time next year, the cushion won’t matter so much.

Baltimore — (TFN): We all have a friend like him. For me it’s a guy named Greg. He has some great ideas and his entrepreneurial spirit runs deep, but for some reason, his plans never seem to make it to fruition. Somewhere from the drawing board to the production line, he runs into a debilitating snag.

Most of the time, it’s money.

He’s got great ideas but nary a penny to his name. That’s why I told him to ring up old Uncle Sam… collect. Washington’s handing out all sorts of dollars these days. He might as well put his hand under the waterfall.

According to the Wall Street Journal, the Department of Energy is handing out some $40 billion just to the so-called “clean energy” sector. Greg needs to paint a tree on his latest invention, call it organic and break into 21st century politics, er, business.

From here on out, it’s not what you know, it’s who you know. With Obama acting as economic maestro-in-chief, it’s a whole new world for us business folks.

Which brings me to a sore subject. You see, I recently told Hot Stock Confidential members to buy shares of a tiny little up-and-comer named Raser Technologies (NYSE:RZ).

Now, before I go any further, I don’t want to hear any complaining that I only talk about my winning plays in Notes, because this one was a loser. A big fat flop. Right now, we’re down 45%. It was one, if not the worst recommendations I made this year.

But I’m not selling. Even though I got plenty of heat from internal and external “forces,” I am still not ready to suck it in and lock in the loss.

I’m not holding out because the company’s got a breakthrough product or is about to get bought out. I’m holding on because Uncle Sam is ready to cut Raser a big ole’ check.

When I initially recommended the company in late August, headlines were abuzz with “green” spending. But then, just as suddenly as it started, it stopped. Congress switched gears to healthcare and Raser shareholders were left in the dust.

But Washington never stays in one place too long. It makes for an easy target. So once again, the clean energy industry is heating up. The article in today’s Journal proves it.

With Stimulus 2.0 ready to be released and the DOE spending like an eighteen-year-old who just unlocked his trust fund, this is a fantastic time for Raser and its geothermal electricity production.

After all, just last week it announced it was applying for a Treasury Department grant that could put $33 million into the company’s coffer.

For a firm with a market value of just $90 million, $30 million can do great things.

This play may not have followed a traditional route and is certainly a move that would make any financial advisor soil his suit, but in today’s financial environment, when the government acts as the lender of choice, traditional rules are out the window.

While fundamental investments still have long-term merits, for us short-term traders and especially us contrarians, some of the best investment opportunities can be uncovered by following the White House press pool.

*** Speaking of money, how about Exxon’s big deal today? For us contrarians, the $31 billion, all-stock deal proves the world’s largest oil producer believes its stock is overpriced and ready to fall.

If you’ve read my work for any length of time, you likely know that I am a big fan of signaling theory. According to the common-sense notion, Exxon’s unwillingness to use any of its massive pile of cash is a sign that company executives feel a $69 share of the company is worth less than $69 in cash.

It is no wonder we are watching shares drop by more than 4.7% today. In the long run, today’s news will boost Exxon’s performance. But in the short term, investors have an awful lot to think about.

By far, the biggest news surrounding this story is not what it will do for Exxon or XTO shareholders, but what it will do to the natural gas market.

It’s exciting stuff, especially for those of us that just racked up triple-digit gains thanks to the industry’s recent meanderings. I’m talking to you TFN Strategic Trader members.

Here’s what I wrote for the TFN site today:

“You don’t become one of the world’s largest and most profitable companies by making dumb moves. Exxon Mobil (NYSE:XOM) proves it once again.

“The Street is buzzing today thanks to news that Exxon is printing some $31 billion worth of new shares in order to purchase XTO Energy (NYSE:XTO), one of the nation’s natural gas producing giants. It’s a major deal that has hearts skipping across a variety of sectors.

“Of course, nobody is as excited as XTO shareholders. They woke up to news of a buyout worth a 17% premium to Friday’s closing price.

“Shares of the oil and gas producer slipped by double-digit proportions over the past few months as natural gas prices slide. But now that demand is rising and gas prices are following suit, Exxon officials saw it was time to make their move. With XTO prices reaching short-term lows, Exxon made its move.

“Now that a major non-conventional gas player is making headlines, investors have their eyes on all sorts of potential buyouts. It’s almost impossible to find a company in the energy industry not trading in higher territory today.

“Two stocks you will hear a lot about over the next couple of weeks are Chesapeake Energy (NYSE:CHK) and Range Resources (NYSE:RRC).

“So far today, Chesapeake is up by over 6%, with shares trading close to $25.50 each. The company, with major holdings in all of the popular shale regions, has been a long-term target of buyout rumors. Maybe this time the speculators will be right.

“But my money is on Range Resources. It is a major player in the Marcellus region that just happened to announce significant expansion in the area this morning. Coincidence? Doubt it. It looks more like advertising.

“Range is the right size for a buyout. With a current market value of $7 billion and another $3 billion or so in debt, a buyout could come with a price tag of just over a third of Exxon’s purchase. Whoever decides to grab the company (think Shell or BP) would automatically get more than 180 Mmcf of daily gas production out of the Marcellus region.

“Of course, this is a long-term play. With gas prices plunging to ultra-low territory in recent months, any company purchasing gas assets now has a long-term outlook. With non-conventional plays hotter than a barroom pistol, major producers like Exxon are flocking to the sector in hopes of finding larger profits than their current low-margin deepwater prospects.

“For all of you fans of deepwater drilling, that is bad news, even horrid.”

Read why here.

*** Hey, lookie there. Gold’s up today. With word that Congress is ready to budget yet another couple trillion bucks, the dollar’s a tad bit weaker today.

As I write, gold is up by $3.70 per ounce and the dollar’s down just $0.0019 against the euro. Doesn’t look like buyers of either asset have much conviction.

Today’s just a short-term turnaround in the recent trend. Expect more strength from the greenback and more weakness from the gold market. By the time we sing Auld Lang Syne in a couple of weeks, gold will be trading for $1050 per ounce. That’s when you should be a buyer again.

Baltimore — (TFN): Somebody get a bucket because I’m about to puke. I am having an impossible time trying to digest what I’m reading and hearing this week.

How could things have gotten this bad?

My sister is one of those liberal teacher types with an ideology that so many of us like to pick apart. It’s sort of a sport of mine, but she understands and takes it like any sister should take a sibling rivalry. She drops her kids off at my house with little to no notice.

With our divergent political beliefs, you should have no problem guessing my reaction when she recently told me she was applying for dual citizenship in France.

“I just want my kids to have the best opportunities available to them,” she said. I just about plopped my pants when she showed me the paperwork. Opportunities… in France? She’s got to be kidding me.

But it turns out, big sis may be getting wise in her old age. After the news I heard this week, I’m thinking about sneaking through her back window tonight and rifling through her drawers. I want to know the process.

France is starting to look like a libertarian’s dream.

What pushed me over the edge? It wasn’t mandatory healthcare. Or a global tax on Wall Street. Or a Nobel Prize. Or pay caps. Or Cash for Caulkers (but that was close).

It was the news that Congress is working on legislation that would force the NCAA to go to a playoff system.

Yes, just days after committing tens of thousands of young men to a savage war and in the midst of figuring out how to redistribute a vast percentage of the nation’s GDP, a House subcommittee took the time and the tax dollars to discuss the BCS bowl situation.

Normally a subject reserved for sports editors and afternoon talk show hosts, our leaders feel this is a vital move for the American people.

Darn I’m glad I’ve got such a visionary sister. She saw this coming months ago. I just hope there’s time to get out before they lock us all in.

*** I know, I know. Many of you are saying what in the world does this have to do with contrarian investing.

My answer… everything.

Just imagine this country’s future, economically and politically if we have a government that believes college football or even mandatory healthcare is any of its business. Do you think we’re ever going to see the Dow hit 14,000 ever again?

Not unless Obama makes it an order.

I know a lot of investors think gold is the answer, but it isn’t. Hopefully this week’s plunge helps illustrate the point. With just the stroke of a pen, Obama could pull a Roosevelt and suck it all back in. You remember Executive Order No. 6102, right?

The answer is international exposure. Just like my sister, your portfolio needs dual citizenship. If you’re sitting on nothing but domestic positions, you are sitting on a time bomb. Tick… Tick… Tick…

Fire your advisor then seek international diversification. My preference is anything Chinese, but Australia, with its rising interest rates, and even Brazil (it already beat Obama once) aren’t looking too bad.

*** Earlier today, I told TFN readers about a Chinese car retailer that’s been making strong headway (i.e. triple-digit revenue growth) over the last year. If you’ve been reading anything from the group’s publisher, J. Christoph Amberger, you know the Asia car market is red hot.

Here’s a section of what I wrote:

“While the Chinese yuan is anything but free-floating against the dollar, a stronger American currency will certainly have an impact on any country exporting goods to the States.

“That’s just part of the reason why shares of AutoChina International (NASDAQ:AUTC) are up by over 15% today. The other major catalyst is the company’s latest fiscal results.

“The Chinese auto retailer is a relatively young company with a market value of $270 million and some 25 dealerships spread across the country. In case you’re not familiar with the Asian market, it’s red hot right now.

“The quarterly figures prove it. Over the last three months, the company recorded revenues of $242 million, a whopping 110% increase over this time last year. It turned the sales into a bottom line of $7 million, yet another triple-digit increase over last year’s figures.

“If you are frequent reader of TFN articles, AutoChina’s action is not new. We’ve been tracking and writing about this stock for months, as it share price quickly climbed from just $7 to over $30 and back to $24 today.

“From here, you can expect shares to top out near the $30 range once again in coming months if current macroeconomic trends (including the strengthening dollar) continue.”

You can read the original piece here.

*** Finally, political incompetency doesn’t stop in Washington. Oh no, state governments are just as useless. Isn’t that right, Arnold?

At home in Pennsylvania, we’ve got a gambling debate on our hands. Right now, slots and electronic forms of poker are perfectly legal, but bring that animated dealer to life and give him a good-paying job, and it’s illegal.

Of course, a political debate like this can’t go on without a little bit of leverage. Tied up with the gambling bill is funding for the state’s major colleges.

That’s right. While the local bozos determine what cut of gambling revenues will go to their campaign funds, tens of thousands of students are looking at higher tuition bills next month as schools like Penn State see their funding held as a political hostage.

In France, my sister’s kids won’t have to worry about tuition… it’s already included in the tax bill.

Baltimore — (TFN): There’s something about snow – we got two more inches last night – that makes me want to go fly fishing. It’s a great example of the contrarian streak that runs deep within.

If you’ve ever fished any of the Eastern seaboard’s popular trout streams, you know they are popular places almost any time of the year. But from April through September, you had better bring your helmet. It’s combat fishing in most sections.

But in December, January and February, when most fly anglers are cozied up to their vice, that’s when I hit the stream.

The fish are still there (where can they go?), but the fair-weather fishermen are long gone. If I could cast a mile, I could do it without laying my leader over the line of a single angler.

In the investing world, we don’t have seasons – it’d be far too easy to flip the calendar and see what’s on the way.

But we do have cycles. And if you know what you’re doing, they’re just as easy to decipher as any word-a-day calendar.

An easy way to grasp the notion of business cycles is to look at a business as nothing more than an idea. When the idea is new and fresh, the business is growing. When a competitor comes along and offers a better idea, the business will shrink.

The only way it will grow again is to come up with a better idea. It’s either that or go out of business.

This is exactly the situation in the nation’s media industry. For years, traditional outlets like newspapers, televisions and terrestrial radio had a one-way revenue stream… sell advertising.

But then came a better idea, the Internet.

Now that the “early adopter” stage is over and almost everybody is gathering their news online, traditional outlets need a fresh idea. Those that can’t find it are going to go out of business. Some already have.

But those that do find it are in for a really, really good time.

The trick is figuring out who’s got the best idea.

I’ll tell you flat out, I’m not sure anybody’s nailed the idea just yet. But they are closer than ever. This month’s deal between Comcast and NBC is huge.

No, it doesn’t prove that Comcast will be the industry leader. But it does prove it has the guts to follow its ideas. The only other person to do that lately is Rupert Murdoch and most folks tell him his idea is stupid.

As investors, especially as contrarian investors, we need to pay attention.

If investing legends like Graham and Buffett have taught us anything, it’s to buy when nobody else is buying.

It’s like fishing when nobody else is fishing. The investments are still there, you just don’t have to fight anybody to get them.

Like I said last week, I’m not sure how much longer investors are going to be skeptical of the nation’s media industry.

Just a couple of trading days after I wrote about McClatchy and its industry brethren, shares took off on news that advertising revenue declines are leveling off. That means there are more fishermen in our stream.

I said it last week and I’ll say it this week. 2010 will be the year for the media industry. Somebody is about to hit the big idea and it could make you rich.

*** Another day, another uptick for the dollar. Even though Geithner manipulated the markets some more this morning by extending TARP’s life, the action couldn’t keep the dollar under for long.

The dollar has broken into the $1.46 per euro range and gold has shed another 22 bucks an ounce.

Now, if I’m reading the charts right, the last time the dollar was at this level was in October. You know where gold was at the same time? $1,050 an ounce.

That’s right. If gold’s run was in fact due to the weakening dollar, it’s got a lot of gains to give up in the near future.

Could gold be trading with a triple-digit price tag soon? If the dollar manages to break the $1.45 per euro barrier it sure could, at least according to the charts. We’ve lost over three cents in the past week; what’s another penny?

Can’t say I didn’t warn you.

*** Finally, check out oil prices. Right now, it takes just $70.40 to buy a barrel of black gold. The price is down by nearly $2.25 thanks to that weak dollar.

If you’re an oil bull like TFN’s founder and Publisher, J. Christoph Amberger, it’s good news. It means you can grab shares cheaper and be prepared for the upcoming surge in demand.

In case you missed his prediction, Amberger is expected $150 oil in the not-so-distant future. As a man that didn’t get to his position by striking out, you may want to follow his advice.

Read his dire prediction here.

You see, most investors gobble the answers up, thinking, “If the Big Money is doing it, maybe I should, too.”

But I read the Big Money poll in exactly the opposite way… I know when the Big Money guys all believe the same thing, chances are great the trade is “full” already.

So if you read the Big Money poll right, it can actually be quite profitable. Let me explain…

In mid-March, Barron’s e-mailed the poll to money managers. About 120 replied, and the results came out over the weekend.

The most hated asset class (not surprisingly) was real estate investments. Only 8.1% of money managers considered themselves bullish on real estate. And the most loved class was Latin American stocks… Only 13.8% of money managers were bearish on Latin American stocks.

The “untrained” reader might take this to mean the right trade is to buy Latin stocks and sell real estate stocks.

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Funny, then, that real estate stocks are now the best-performing sector this year… Simon Property Group – the benchmark real estate stock – is up more than 20% year-to-date.

Meanwhile, the Latin American Discovery Fund, a collection of South American blue chips, is down for the year.

How can this be? The answer is simple…

When all the money managers are bearish, there’s no one left to sell that stock… With only 8.1% of money managers bullish on real estate stocks when the poll was taken in mid-March, there was nobody left to sell real estate stocks. With no one left to sell, they couldn’t go down any farther.

So here’s what happened: On March 14, Simon Property Group traded for around $86. Now – just six weeks later – it’s at $105.

On the other hand, the Latin American Discovery Fund peaked two days before March started, and it hasn’t done much since. It was everyone’s favorite in March… Why hasn’t it gone up? In short, there’s nobody left to buy – only 13.8% of money managers were bearish on Latin stocks when the Big Money poll was taken. Everyone who wanted to buy was already in.

Here’s the key: You have to wait for the extremes in sentiment. The old saying is, “The crowd is wrong at the extremes, and right in between.”

So let’s look at another example from the Big Money poll… One result was as lopsided as I’ve ever seen: Only 3.6% of investors are bullish on 10-year Treasury bonds. That means nearly all money managers believe long-term interest rates are headed higher.

With long-term interest rates currently below 4%, investors think rates can’t go any lower. After all, they haven’t seen them lower than that in their lifetimes.

But they’re ignoring history… Japan’s property bust started in 1990. Interest rates were “normal” then – around 6% to 7%. But as the property bust went on and on, long-term interest rates fell to 3% by 1995… and actually fell below 1% in 2003. Even today, they’re around 1.5%. Incredible!

All the talk is of inflation… and everyone expects interest rates to head higher. But don’t go betting the farm just yet. This trade is already full, and long-term interest rates could surprise you and head much lower. Already, interest rates on 10-year Treasuries have fallen from more than 5% in the summer of 2006 to below 4% now.

If you want to follow the crowd and do the “ordinary” thing, bet against real estate stocks and bet that interest rates will head higher. But by doing the ordinary thing, you’re destined for ordinary returns. If you want “extraordinary” returns, you must be willing to do something extraordinary.

One of my favorite hunting grounds for doing something extraordinary is Barron’s Big Money poll…

Good investing,

Steve

P.S. Talk about doing something extraordinary… In the latest issue of my letter, Sjuggerud Confidential, which came out earlier this month, I recommended a safe bank, with no exposure to U.S. real estate. We’re already up more than 20% – in less than four weeks! And I still think it’s a great buy. To learn more about this idea, click here.