The Fossil Fuel War Lords: Lies, Distortions & Dirty Tricks

Anyone who thinks a peaceful transition from fossil fuels to distributed renewable energy is possible should think again.

In fact the recent actions of the fossil fuel industry have the unmistakable flavor of war.

Its lords have clearly decided that they stand to lose far more in their existing businesses than they might gain from leading the clean energy revolution, at least in the short term. And in today's business world, the short term is all that counts.

A comprehensive study on what's really happening out there would fill a book. For this short column, I offer just a few current highlights.

The War for Renewables in California

I'll begin right here at home, by updating the continuing drama around the Marin Energy Authority (MEA) I previewed in "The Renewable Power Rebellion."

First, a bit of background...

After California deregulated its electricity markets in 1997, a flood of new competitors to the stock investor-owned utilities (IOUs) entered the market. Individual consumers could choose among several power providers, some of whom offered 100% renewable energy. But the power crisis of 2000-2001 — precipitated by the despicable Enron and its comrades — ended that consumer choice and forced them back into the arms of the IOUs.

In 2002, a different sort of consumer choice was enacted through AB 117, which allowed municipalities to form new entities called Community Choice Aggregations (CCAs). CCAs can buy power from other providers on behalf of the customers within their jurisdictions. Customers who do not want to join the CCAs may opt out.

CCAs effectively offer a new way that consumers can choose more renewable power than their utility can (or will) offer.

This year, MEA emerged as the first CCA in California, offering 20% renewable power — as compared with PG&E's 15% — right out of the gate, with a consumer option to buy 100% renewable power for a modest 6% price premium.

But the monopoly IOU, PG&E, is prosecuting an aggressive campaign to stop it in its tracks. I have begun an investigation into PG&E's actions and as the Robert Hunter lyric goes, "If I told you all that went down, it would burn off both your ears."

Underhanded, dirty tricks are their norm, not the exception. Yet they are widely regarded (thanks to ample spending on public relations campaigns) as one of the greenest, most progressive utilities in the country.

PG&E originally lent its qualified support to CCAs when the legislation came out, but then adopted a neutral stance when the California Public Utilities Commission (CPUC) began its proceedings on the matter. Beyond the words, however, PG&E's actions demonstrate that it clearly considers municipalization of power procurement a threat to its business.

Under a Byzantine arrangement of subsidiaries and relationships with other entities, the utility PG&E has devised various ways to work around the rules that pretended to protect the consumer after deregulation. For just one example, it now procures much of its power through swap agreements and opaque contracts with third parties so that the CPUC can no longer really examine their details. I've been told that I couldn't find how much profit they make on generation if I wanted to, because nobody has all the information.

What is clear is that PG&E owns an effective monopoly on providing natural gas — both to customers directly, and to the gas-burning generators of its electricity. Their profit margin on the power itself is kept minimal under the law, but that's allegedly about one-tenth of the profit they make on transmission of the gas through its pipelines, and the transmission of power over its network.

That appears to be the real reason that PG&E has fought the MEA. If the latter were to succeed in fostering widespread deployment of distributed rooftop solar generation, it would cut PG&E's revenues from both power transmission and natural gas supplied to centralized power plants. And if MEA were a stunning success, as Ohio's CCA has been, it could lead to a proliferation of CCAs across the state.

After PG&E's distortions and outright lies intended to whip up fear and confusion about MEA — under the guise of the "Common Sense Coalition" it funded — failed to stop it, the utility committed up to $35 million to put Proposition 16 on the ballot in June.

It is the sole architect and sponsor of the initiative, which would embed in the state constitution a new requirement for "two-thirds of the voters in the territory being served and two-thirds of the voters in the territory to be served" to approve before any local government could proceed with power procurement, effectively closing the door on any further CCAs and preventing MEA from expanding its service area.

In typical fashion, PG&E has disguised the true objectives of Prop 16 under a high-minded appeal to protect the voters' right to choose.

Got that? A utility company is willing to spend $35 million in an altruistic effort to protect your rights as a voter! It's an inversion of the truth that would make Orwell blush.

David vs. Goliath

Because municipalities are forbidden by law from such activism, the MEA can only defend itself through a small independent activist group funded by private donations. I don't know the exact numbers, but it looks like the funding balance is roughly $35 million vs. $100,000, at best.

Here are the facts:

• PG&E has failed to meet the state 20% renewable portfolio standard (RPS) target for 2010, and it is in no way prepared to meet the proposed 33% by 2020 standard.
• It has failed to produce the efficiency gains that $450 million a year in state funding should have achieved, and has apparently used the money as a political slush fund while hiding where their alleged efficiency gains came from.
• It has successfully lobbied to limit renewable generation by its customers under net metering to a small fraction (from 0.5% initially to 5% now) of peak demand loads, when it makes no sense from a public interest standpoint for there to be a cap at all.
• And it continues to parlay a few million dollars here and there in handouts for efficiency improvements in exchange for political favors, while vigorously lobbying for billions of dollars in new transmission lines, new natural gas power plants, and new nuclear plants... all while misrepresenting those projects as being much cleaner, and greener, than they actually are.

For example, when the CPUC asked PG&E and Southern California Edison to sign a pledge affirming their claim that a proposed multi-billion dollar new transmission line stretching from just below the Mexican border to San Diego would be used only to import renewable power, the utilities declined. Their true intent was to use the line to import power from new natural gas-fired plants in Mexico.

Indeed, PG&E is now one of the top lobbyists for nuclear power on Capitol Hill, seeking billions of dollars in loan guarantees for new nuclear plants, even as it tries to choke off the deployment of rooftop solar power.  

The utility's chutzpah is breathtaking, particularly considering that they have just received the largest rate hike in history, and have another $5 billion in rate hikes now pending before the CPUC. And that's on top of the roughly $20 billion they received for the bankruptcy bailout in the wake of the Enron debacle, which we're all still paying off on our monthly bills.

For its part, the CPUC fiddles around the edges of the utilities' proposals in an attempt to create the illusion of guarding the public interest, while its president Michael Peevey (the former Vice President of Southern California Edison) rubber stamps them.

The conflict of interest is painfully clear. A mass transition to distributed renewable power is the best hope for the future of local communities, but PG&E has nothing to gain from it and everything to lose.

They will stand to profit handsomely from building billions of dollars' worth of new gas- and nuke-based power infrastructure, but will lose when customers generate their own power and cut waste through higher efficiency.

Even in California, with its abundant sunshine and its high electricity prices, the push for renewables is a David vs. Goliath scenario... and CCAs are the stone.

The War for Solar in Hawaii

In a remarkably similar tale, a report from Hawaii last month detailed how the Hawaiian Electric Company (HECO) proposed a total ban on rooftop solar systems connected to their grid. The move was in response to the unveiling of an aggressive new feed-in tariff (FIT) program adopted by the state PUC.

HECO had originally supported the FIT, and committed to a broad agenda that would obtain 70% of the state's power from clean energy by 2030. But when the program became real, it backpedaled with the usual whining and hand-wringing about maintaining grid stability, proposing instead that it form a working group to study (read: delay) the issue further.

As my readers know, I believe that FITs are the most effective, tried-and-true policy approach around for encouraging distributed renewable power, and I have hailed Hawaii's FIT as a promising step toward a national FIT model.

If the U.S. had any sense or vision at all, it would make Hawaii a proving ground for distributed renewable power. Being isolated, it is utterly dependent on imported fossil fuels, which provide 96% of its energy. Consequently, it pays the highest electricity rates in the nation.

Hawaii also has abundant sunshine and enormous marine energy potential. With the impetus of the FIT, it could show the rest of the country exactly how much of America's fossil fuel habit could be cured through renewables.

At this point, I don't know exactly what's behind HECO's ban... but it doesn't take much imagination to guess. Scratch a hoary utility, and you'll quickly find its fossil fuel bedfellows.

The War On Greenhouse Gases

Another fight is now unfolding in California, as the so-called "California Jobs Initiative" — an entity backed by oil and gas companies — has raised nearly $1 million to put an initiative on the state ballot for November that would suspend the state's new emissions law, AB 32.

According to SolveClimate blogger Leslie Berliant, the group has issued a stream of factually incorrect fearmongering claims about the jobs that will be lost in the state as AB 32 is enforced, while funding studies that cast doubt on the number of green jobs that would be created under it.

If the initiative passed, it would stop the state's planned cap-and-trade program until California has four consecutive quarters of unemployment below 5.5%... something that has only happened twice (in 2000 and 2006) and seems highly unlikely to happen again any time soon, if ever.

The War for Wind

Meanwhile, Danish journalists confirmed this week that the Institute for Energy Research (IER), an American think tank with close ties to the coal and oil industries, had commissioned and paid for a report released last year by a Danish think tank that made numerous false and disparaging claims about Denmark's wind industry.

The study concluded that coal is cheaper than wind, conveniently ignoring the true costs of coal while assiduously counting all the costs of wind, and then some.

According to a post at Desmogblog, IER's CEO Robert Bradley was formerly the Director of Public Relations Policy at Enron, where he wrote speeches for "Kenny Boy" Lay. IER's connections extend to notorious fossil fuel companies and front groups including Koch Industries, the Competitive Enterprise Institute, TASSC, the Cato Institute, and the Heritage Foundation; yet they shamelessly accuse the Obama administration of being too cozy with wind energy lobbyists.

Pick a Side

It's becoming abundantly clear that if communities want to have a resilient, secure, local renewable supply, they're going to have to fight for it — and fight hard.

The businesses that control the power sector now are not going to just give up their grip on it, nor are they going to lead the transition to renewables. They're going to oppose it at every turn with delay tactics, dirty tricks, outright lies, and anything else that will give them an edge.

And they have far deeper ties to policymakers — and far deeper pockets with which to wage the war — than anybody in the renewables business does. By a wide, wide margin.

What's good for them is not good for communities, and vice versa. There will be no bridging of that gap. Nor would it be rational to expect stock investor-owned companies to act against their own self-interests for the benefit of the public.

The residents of Marin County are already being asked to choose a side in the war for the future of energy. Soon the rest of the country will be asked too. Do you have the will to form a stone like MEA? And if you do, will you have the will to throw it?

I say: ¡Viva la Revolución!

I'll close with a few more lines from the song I quoted above:

Since it cost a lot to win
and even more to lose
You and me bound to spend some time
wondering what to choose

Goes to show you don't ever know
Watch each card you play
and play it slow
Wait until your deal come around
Don't you let that deal go down.

— Robert Hunter, "Deal"

Vancouver's Olympic Energy Hangover Begins April 1

Gold medals last forever, but Olympic cheer won't withstand an energy upheaval in British Columbia.

The Canadian province and its largest city Vancouver just hosted what many are calling the greenest Olympiad ever. With its reputation as a clean, coastal metropolis where quality of life is high, few observers or visitors seemed surprised that Vancouver set up online energy monitoring, made extra efforts in energy efficiency, and even aimed for carbon neutrality throughout this winter's Olympic fortnight.

Yet this week — just a few days after Canada's gold medal wins in men's and women's hockey over their neighbors to the south — Canadians and British Columbia residents in particular must confront per-capita energy consumption that beats the USA's average.

In 2006 (the last year for which data are available), Canadians used 8,262 kilograms of oil equivalent (kgoe) per person, compared to 7,768 kgoe for each U.S. resident.

As economic conditions fluctuate — 2006 was a boom year — intake numbers will move up and down as well. Nevertheless, provincial utility BC Hydro is preparing for a future with a clear upward trend in energy appetite and rising costs for Vancouver residents.

15% in Rate Increases Loom for BC Hydro Customers

As February turned into March, BC government heads in the capital Victoria looked up every once in a while to watch their national heroes go for gold, but their attention was focused mainly on the provincial budget.

Everyone knows that the Olympics are seen by host cities and countries as a spending target unto themselves. Historically, the public spaces, transportation upgrades, and economic activity are an easy sell (not to mention every sports-minded person in the world knowing your city's name).

Across Canada, Montreal's Stade Olympique still stands, though the last race of the Montreal Olympiad was run almost 34 years ago. In Beijing, on the other hand, the famed "Bird's Nest" where the 2008 Opening Ceremonies were held is set for demolition — the Chinese evidently aren't interested in keeping urban mementos that hold 90,000 people.

Despite the desire to bask in Vancouver's afterglow, Finance Minister Colin Hansen announced on March 2 that he wants to pump up infrastructure spending in 2010 and 2011 while cutting funding in the out years to balance the budget. Where governments can rely on taxpayers to make such spending surges happen, BC Hydro is turning to ratepayers for the influx of funds.

BC Hydro customers are looking at 15% in rate increases over the next two years and up to 33% by 2013, with a 9.26% increase taking effect as soon as April 1. That adds up to about $7 extra on everyone's monthly bill — not enough to break the bank for most — but as incremental changes go, it's a sizable one that brings questions.

Namely: "What are we getting for the money?"

Instead of a winter sports wonderland, BC Hydro is upgrading hydroelectric facilities that are a generation old. The newest site slated for capacity expansion is the Revelstoke Dam, built way back in 1984.

The utility has already started bringing school-bus sized transformers to the generating station site, the local Revelstoke Times Review reports, and the goal is to bring new turbines online by October. Eventually, the Revelstoke buildout will add 500 MW to the nearly 2000 MW already up and running, and 40,000 additional residential customers are expected to be served by the upgrade during peak usage hours. In total, BC Hydro (whose full name BC Hydro and Power Authority, indicating a reach beyond just dam-based energy) serves 94% of the province's population centers.

Of those 1.8 million or so customers, nearly all are expected to ramp up consumption in the coming decades.

Gold for BC Hydro? Not So Fast

On its website, BC Hydro awards itself a "gold medal" for its consistent supply of power to the Vancouver Olympics. "By flawlessly powering the games," they say, "we feel we've won a gold medal, too."

Operating 30 hydroelectric plants plus a few natural gas ones, BC Hydro did avoid outages that could have left Bob Costas in the dark. Nevertheless, its upgrade plans don't seem to include any significant changes that will accommodate significant demand increases.

"The demand for energy could grow by as much as 40 percent over the next 20 years as the economy recovers, so we have to be ready for that," BC Hydro spokeswoman Susan Danard said in Thursday's edition of Canada's Globe and Mail national newspaper.

Canadian national net energy consumption grew from 309 billion kilowatt-hours in 1980 to 529 billion kWh in 2006 — a 71% jump. If the 40% in 20 years reckoning is correct, British Columbia electricity residents may be upping their wattage at a slower rate than the country as a whole. However, much of BC Hydro's current price pressure is due to declining non-residential consumption.

Third-quarter net income at the utility was down 50% in 2009 from 2008, as the provincial forestry best stock market weakened and mills used less power. When the timber companies perk up, the power supply rope will tighten even more. The $7/month surcharge may seem like a small bump to avoid power shortages in the jewel of the Canadian Pacific.

If British Columbia is going to continue as a model for energy efficiency, it needs to diversify. The Canadian Wind Energy Association says that as of late last year, every Canadian province has wind energy capacity. Nationally, about a million homes can run off wind-generated power that totals 3359 MW. That represents a tenfold increase over the past six years!

By advancing beyond dam expansions, BC could help make another order of magnitude increase in Canadian clean power achievable.

Jeff Siegel is in Arizona today, but he's told me to let you know that a full report on British Columbia's top green power developer is coming your way very soon.

The $21 Billion Hot Potato

Heads up: The deep-discount Charter Enrollment period for our Million-Dollar Rapid Growth Portfolio ends tomorrow, and I don't think the timing to start jumping on the opportunities could be better.

Indeed, with global investors attacking any sovereign government that's running massive deficits or stuck with a pile of bad debts ...

And with Uncle Sam obviously the world's greatest debtor, beggar and fiat money printer ...

Some folks at the Treasury Department now fear the United States could be the next victim.

So they're scrambling to get rid of at least SOME of the junk they piled up during the great bailout frenzy of 2009.

Case in point:

The government officials running Fannie Mae and Freddie Mac have decided to force big banks to take back $21 billion in bad mortgages.

If they can get some of these sick assets off the government's books, they figure, they can say they did SOMETHING before global investors start attacking.

So they're using various loan provisions to force giant institutions like Bank of America, JPMorgan Chase, Wells Fargo and Citigroup to buy some of them back.

But these bad loans are a hot
potato that no one wants!

Fannie and Freddie certainly don't want them. Just since 2007, they've already lost $202 billion on loans like these, a figure that dwarfs the $21 billion in loans they're trying to pawn off to the banks.

Meanwhile, the banks wish they could stuff every one of these bad loans into lead boots and toss them into the East River.

The loans are already in default. The homes used as collateral are now worth far less than the outstanding balances on the loans. And, inevitably, the banks that get stuck with them are going to take huge hits to their bottom line. To whit ...

• JPMorgan recently said that it loses about 50 cents on the dollar for every bad loan it has to buy back.
  
  
• Bank of America's mortgage division lost $3.84 billion last year, thanks largely to these buy-backs. Plus, the volume of buybacks is increasing so dramatically, it has to set aside $1.9 billion and hire new employees to process these buy-backs.
  
  
• Wells Fargo had to repurchase $1.3 billion in these loans in 2009 — THREE TIMES the 2008 amount — and also had to pay nearly $1 billion in costs as part of the repurchases.
  
  
• Citigroup has had to increase its repurchase reserves six fold this year alone!

And this effort to get bad loans of the books is just ONE example of the spreading fear among Washington officials.

Look. They saw how global investors dumped Greek bonds a few weeks ago. And they saw it happen AGAIN this week as investors attacked Britain. They know we could be next.

What they DON'T realize is that shuffling a few billion around is tantamount to moving deck chairs on the Titanic.

It's too late to prevent an all-out attack on the U.S. dollar and U.S. bonds. And when it hits, you can expect a series of dramatic changes not only in the U.S. bond market, but in every asset class.

This is why our new Million-Dollar Rapid Growth Portfolio aims to profit from major moves — up or down — in all major asset classes, including bonds, top stocks for 2011, gold, energy and other resources, plus currencies.

And it's why we designed it to give you a simple, scientific way to profit no matter what Washington and Wall Street throw at you next!

But when the Deep-Discount Charter Enrollment Period
for our Million-Dollar Rapid Growth Portfolio ends
TOMORROW, it will be closed forever.

That gives you just ONE more day to lock in yearly savings of $1,003 on your one-year membership or to save $3,103 on your two-year membership.

As you weigh your decision, please consider this ...

1. The profits you earn with this portfolio could be substantial: All investment involves risk, and losses are always possible. But since 1971, the time-honored, scientific, cyclical research upon which this portfolio is based has anticipated almost every major directional shift in top stocks for 2011, gold, bonds, commodities and currencies.

And based on our analysis of the Foundation's materials published long before each major market turn, we calculate that, when applied to a diversified portfolio, their research could have helped you ...

• Beat the S&P 500 FOUR TO ONE ...
  
  
• Enjoy 18 CONSECUTIVE winning years since 1992 ...
  
  
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• And turn $10,000 into more than $258,000 ... $100,000 into nearly $2.6 million ... or $1 million into more than $25.8 million ...

And it could have produced these returns — multiplying your money more than 25 times over — in every imaginable investing environment — even as investors who trusted Washington and Wall Street lost their shirts!

2. We're putting our money where our mouths are: All THREE individuals directly involved in this portfolio — myself (Publisher), Monty Agarwal (Editor), and Richard Mogey (Research Director for the Foundation of the Study of Cycles) — are so confident in this approach, we are investing more than one million dollars of our own money in this portfolio. (You can invest any amount you wish, of course.)

3. You can beat us to the punch on every trade: The Weiss Million-Dollar Rapid Growth Portfolio gives you the opportunity to invest your money the way we invest ours, with one major exception: You can buy or sell up to 48 hours sooner because you get two full days' notice before we buy or sell anything!

4. Total transparency: On our members-only website, you will see EVERYTHING that happens in our million-dollar account — every trade, every confirmation, every statement will be an open book to you.

5. Easy-to-follow trading instructions: In each Trading Alert you'll receive, Monty Agarwal will ...

• Name the asset classes the Foundation's signals have identified as having the richest profit potential right now ...
  
  
• Reveal what percentage of our capital he'll invest in each asset class ...
  
  
• Name the individual vehicles — the top stocks and ETFs in 2011— he's recommending in each asset class ...
  
  
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• Provide complete, plain-English instructions on how to place the trade online or on the telephone with your broker.

6. This is your LAST CHANCE to join at the deep-discount Charter rate: Once this Charter Enrollment Period closes TOMORROW, it will NEVER re-open. If you decide to purchase a regular membership on Tuesday — or any time thereafter — it will cost you substantially more.

7. By joining as a Charter member now, you lock in these savings FOR LIFE: You can save $1,003 on future renewals of your one-year membership EVERY YEAR or save $3,103 on future renewals of your two-year membership every 24 months ... FOREVER.

That means after your first 24 months with a two-year membership, you'll save $6,206 on renewals every four years ... save $9,309 on renewals every six years ... and save $15,515 on renewals in ten years!

8. Your membership will make you money in the next 90 days or it costs you NOTHING: You don't even have to make your final decision today. You can lock in your savings by joining now ... follow the million dollars we invest with any amount you wish — small or large — for the next 90 days ... then decide if our Million-Dollar Rapid Growth Portfolio is right for you in June. You must be thrilled with the results or you can cancel for a full refund.

But remember: Our Charter Enrollment Period — your opportunity to reap tremendous savings — CLOSES TOMORROW!

To lock in your savings immediately, click this link.

Or, for all the details on this remarkable "Rapid Growth Portfolio" approach, click here read my full report.

And if you have any questions at any time, please call our Customer Care team toll-free at 1-800-453-9670.

It's important that you to act quickly — NO LATER THAN TOMMORROW, Monday, March 8! The ONLY way to grab a Charter membership and to save $1,003 on one year and $3,103 on two years is to activate your membership immediately.

Don't Believe Everything Your Uncle Sam Tells You

Two weeks ago, I started to discuss where investors got their information from.

The reason I started this series of articles was to help the individual investor better understand where information they use comes from, and to show how that information cannot always to be taken at face value. If you recall, there were a couple of different venues I discussed. 

Wall Street was the first of the venues I mentioned. Today, I'll tackle the US Government.

I do not believe that the US Government is as blatantly conniving in their skewing of data as is Wall Street. Nonetheless, they are equally guilty of bending the news to fit their agenda and to hell with the truth.


How Do We Zero In on The Facts?

As self directed investors taking care of our own money, we must be able to not only read the information we are given, but to read into the information we have been given.

The fact is that most information is skewed to the specific agenda of the source putting it out, in order to advance the source's own self interest. So, we need to filter this tainted information to find the real information that can actually be useful to us.

While there are tons of examples of the government bending the news to suit them best, let us take a look at an example that appears pretty heavily in today's stock market in 2011: The all important jobs numbers -- specifically, the unemployment report.

The first thing we must look at is how the unemployment number is calculated. The two critical concepts are 1) how we calculate how many people are considered to be employed and 2) how we calculate the size of the workforce.


Why Worry About How The Number is Calculated?

The reason we need to pay close attention is because part of the government's bending of the news is in how the number is calculated.

In just the last two months we have witnessed this economy shed nearly 100,000 jobs, yet the actual unemployment rate went down!

How is that possible? If we lose more jobs, how can the percentage go down or stay unchanged? We have seen the rate above 10% earlier in the year and haven't created a single job since, yet the rate is lower ... but how?


Let's Calculate the Workforce "Government-Style"

Well, in order to make the percentage go down, we would need to take unemployed people out of the workforce.

So, the workforce is defined as those people who are currently employed or people who the government determines are actively seeking employment. The way the government decides this is by stating that anyone who is unemployed for a year or more is considered to be not actively seeking employment, thus that person is pulled out of the workforce number.

So, suddenly, an unemployed person is taken out of the calculation. These people drop off the workforce and, for all intents and purposes, are no longer considered unemployed.  In this way, as more people lose their jobs, they are offset by unemployed people falling off the back-end of the workforce, holding the unemployment rate stable or possibly even lowering the number.

Now, I understand what the government is doing here.

I truly believe that if the person is unemployed for a specific amount of time in an ordinary economic situation, then that person is probably not looking to hard for a job and should be pulled out of the workforce.

But, in a time like this, with a recession that is being compared to the Great Depression, a person could very easily be aggressively looking for a job and not find it. In this scenario, this specific time period that a person remains unemployed must be extended, and that unemployed person should remain part of the unemployment calculation.

The funny part here is that government obviously agrees with me that this recession has brought about a difficult job market.  They've even gone so far as to extend unemployment benefits from 26 weeks to encompass up to about 76 weeks.  

Yet the unemployed person still falls out of the workforce after a year. Funny how the government extends the benefits but does not extend the length of life on the workforce! Sure seems to favor the unemployment number staying low!

So, the government can bend the unemployment rate by tweaking either number in the calculation, or both.

But there is even more to it ... the revisions!

Now, government can put forth a number that you want to hear or, more precisely, that the best stock market wants to hear, and then revise it the next month. So, at any time, the government can make the number what they need it to be to make the market go up and then put forth the bad part in a revision the next month.

This is a pretty good trick, isn't it?

The agenda of the government in this situation is not to give the individual investor, taxpayer or consumer the truth. The government's agenda is to give people hope, to give people an optimistic view or at least the perception of an optimistic view.

They want consumers to think that things are always getting better.

The government won't try to convince you that things are great when they are not, but they will spin it to positive any chance they get.

And if that means playing with some numbers and putting an overly optimistic spin on them, then so shall it be!

Remember: Don't believe everything you read ... especially economic news coming from Uncle Sam! 

Super-size my McProfits please

Last night I was watching television and I saw a commercial that really made me think.  It was Dan Hesse, CEO of Sprint and in this commercial, he announced that Sprint has a brand new plan and unlike their big competitors, Sprint is offering unlimited data, calling and texting for $69.

Now, why I said this made me think is not because of Sprint's deal per se, I'm more interest to see how the rest of the cell titans will react. 

When it comes down to brass tacks, my experience tells me that Sprint's cell coverage is a bit sparse.   Truth is, Verzion and AT&T are pretty much the 2 big players when it comes service and in rural areas Verizion takes it every time.

So will Verizon and AT&T make a move like Sprint?  Will they cater to the recession-hit people of this country that until now are paying way too much money for cell service?

With the iPhone and blackberries pretty much dominating the market with AT&T and VZ, will customers start to jump ship? 

I don't think so. 

Will VZ or AT&T drop their prices in lieu of Sprint's new bundle?  I think not.

When it comes to quality, it's a supply and demand thing.  People demand good service and fast service for that matter and that demand I don't think necessarily that means Sprint.

IPO Market Set For Big Pickup This Week (Tim Fields)

Are you an IPO investor?  If not, you should be seriously considering it this week...

For the past 3 months, the IPO market has been anything but fast paced.  It had been molasses in February with not too many eye openers coming to light.  However, things are set to change.

This week, I'm watching 2 IPOs that have the potential to run because of a common bond; earnings.

The first is a dry bulk shipping start up.  They look to be a very promising company, being underwritten by some power – Morgan Stanley.  The company plans to raise $245 million by offering 16,300,000 shares at a price range of $14 to $16.

The next is the Texas Instruments spin off I wrote to you about last week.

The company is the world's leading supplier of sensors and controls across a broad range of markets and applications.

The company plans to raise $600 million by offering 31.6 million shares at $18-$20, and at the midpoint of the proposed range, it will command a market value of $3.4 billion.

The company booked $1.1 billion in sales for 2009, down 20% (from $1.4 billion) from the previous year. However, it stands to benefit from the improving environment and reported $338 million in sales for the fourth quarter of 2009, up 26% from the year ago period (from $268 million).

This company is entering at a very good time and I believe is should command the IPO market when it does debut.  It's a bit early for me to start throwing possible profits from this IPO, but I can tell you, it should be a solid performer.

Stay tuned for more information on these potential big winners, as I'll update you throughout the week.

Members of The 123 Advisor – look for an Investor Alert on these two companies in the coming days.

Want to learn more about The 123 Advisor and these two IPOs – follow this link.

Super-Size My McProfits Please (Eric Dickson)

What's not to love? I'd venture to say that almost any place you visit in the world, you'll see their golden arches. And it's not wonder that internationally, as well as domestically, McDonalds (MCD) is growing.

Today, MCD reported that sales at restaurants open at least one year grew by 4.8%, fueled by strong international demand. This is encouraging short-terms news for the company, as back-to-back increased sales months are a welcome sight for investors who saw declining sales in November and December.

Overall, the company saw an 11.2% increase in February sales (this included their franchising restaurants as well).

What makes this company so great?

In my opinion – everything.

The dollar menu was trend setting. Improved menu options are attracting new customers.  Their franchising operations are top notch. Internationally they're popular. And from investors stand point; well they just provide great value…

At $2.20/share, their dividend is very attractive and you can expect for it to grow bigger in the next 18 months (as it historically has). As far as price appreciation, in the last 5 years the best stock to buy has returned over 90%. These two factors alone make the case for a great long-term investment.

I've been recommending this best stock to buy for 3 years now. And I'll recommend it for another 30. Strong dividend growth, coupled with price appreciation and a globally coveted brand, this is one best stock I'd put in my nest egg.

Interested in $11/Share Gains? (Eric Dickson)

Forget for a second that this is a genetic diagnostic company with a unique product in high demand from global hospitals, doctors and patients…

Why?

A recent FDA clearance has investor's giddy about the effects it will have on the share price. How far will this position rise? Tough to tell, but with current demand beginning (and we emphasis 'beginning') to surge because of this news, it's not out of the question for this position to go as high as $17 a share from their current price of less than $6.

Market Breadth Medium-Term Bullish

There is a lot more to the best stock market than just the popular averages everybody is talking about. You see, when the averages move you can't tell how many top stocks for 2011 participated, so you don't know how broad that move was.

That's why you have to dig a bit deeper to get a real picture of the health of a market trend ...

Fortunately there are some technical tools proven to help uncover what is beneath the surface of the major indices, to measure what technical analysts call "market breadth."

And one of the best known tools is the advance-decline (A/D) line ...

The A/D line is a measure of how many top stocks for 2011 are taking part in a rally or sell-off, telling you how broad the move is.

To calculate this important indicator you simply subtract the number of declining top stocks to buy from the number of advancing stocks. Then add the result to the previous day's total.

A/D line = (# of advancing stocks − # of declining stocks)
+ yesterday's A/D line value

This will give you an ongoing, daily indicator. And if you incorporate the daily volume numbers into the calculation, you'll arrive at the advance-decline volume line.

Advance-Decline Line Is a Very Helpful
Predictor of Stock Market Trouble

As a rule, healthy cyclical bull markets are accompanied by rising advance-decline lines. In other words, as long as the index and the advance-decline line are climbing to new cyclical highs, the market's breadth is healthy. And an abrupt end of the bull market is highly unlikely.

If however the best stock market index is rising to a new high while the advance-decline line stays below its former high, a negative divergence has taken place. This divergence is a warning sign that the cyclical bull market is in jeopardy, and a bear market is in the offing.

The chart below shows an important example of this relationship ...

In October 2007 the NYSE Composite and most other broad-based stock market indexes rose to new cyclical highs — that is, higher than in July. But the advance-decline line clearly stayed below its July high!

Source: www.decisionpoint.com

This negative divergence was a surefire warning sign that the cyclical bull market was coming to an end. Why most Wall Street analysts — even technical oriented analysts — didn't follow this signal is another story. Fact is, the signal was there for everybody to see.

Advance-Decline Line Sends
Medium-Term Bullish Message

Now compare the current status of the advance-decline line with the one of October 2007. As you can see in the above chart, it reached new cyclical highs during the past several days.

In doing so it is showing a healthy stock market breadth. And most importantly it is signaling a continuation of the medium-term uptrend that started in March 2009.

Of course I'm fully aware of the major fundamental problems the world economy is facing. And I fully expect a second act in the ongoing mortgage debt drama, accompanied and aggravated by sovereign debt problems. I also know that the stock market's valuation is very high, thus assuring a disappointing long-term performance. And yes ... I expect another recession rather soon, probably a very severe one.

But here and now the advance-decline line is telling us loud and unmistakably: Not yet. This best stock market in 2011 has still more room to go.

Top Stocks For 2011

Seventeen years ago, my brother David had a revelation.

It landed the two of us on the cover of Fortune. It earned us a fair amount of money... and factored into our decision to launch The Motley Fool in 1993.

In 1995, its predictive power was confirmed in the parking lot of an unknown technology company that had developed a revolutionary new computer drive...

A little-known group of "linked-in" investors paid close attention and were handsomely rewarded -- turning every $10,000 invested into $80,000 in just 24 months.

In 1999, it left a Russian national hero so disgraced he threw a public fit and threatened to sue IBM, one of America's most revered corporations...

And in March 2000, it led the exasperated CEO of a cash-hemorrhaging mining company directly to the richest and most profitable gold strike in the world.

Are you intrigued? I was.

My brother was spellbound. He set out at once to outline everything he would need to harness this powerful signal and put it to use helping individual investors build their own personal wealth.

It was a daunting task. There were times I secretly feared he'd never get his project off the ground. Then in March 2005, we caught a break...

A $2 million Innovation Grant allowed David to assemble a "Dream Team" of financial experts and scientists that led to this letter I'm writing you today...

• One is a NASA scientist with a PhD in computational neuroscience.
• Another is a talented investor with a documented track record of helping individual investors beat the market.
• A third was among the first and most successful hedge fund managers in modern finance history.

With their hard work and guidance, and the help of literally dozens of Motley Fool developers and analysts, plus the collective intelligence of tens of thousands of hardworking investors like you...

Our "pipe dream" is a groundbreaking reality!

Now there's evidence it can help investors like us build our wealth faster and with less volatility than you might think possible -- no matter what the market throws our way in 2011.

I know that sounds fantastic, but I'll explain everything.

Including what my brother and I discovered 17 years ago and how it can help you make more money than you are making right now, MINUS the gut-wrenching volatility you've been told to accept as unavoidable.

I have much to tell you, and I think you'll find it a compelling read. To help you decide whether it's worth investing a few minutes of your time, let's address the elephant in the room:

Of course, I mean "What's in it for you?"

So what is in it for you? I'll explain...

By now, you may have heard. Two years ago, I transferred $1 million in Motley Fool funds to a private account, promising to pay it back in full -- and then some.

My pledge was to methodically grow that $1 million at 15% per year into $1 billion over the next 50 years -- an ambitious goal to be sure, but one I still very much intend to achieve.

At the time, I also offered Motley Fool members the opportunity to "take part in something historic and have a little fun, too." Plus, as I recall saying at the time, "Nothing short of a realistic shot at life-changing wealth"...

I hope you took me up on my offer to follow along with me as I build and manage my million-dollar common top stocks portfolio for 2011. I eagerly look forward to an exciting and worthwhile adventure. Yet, here's the thing...

My brother David thinks he can help you do even better!

Especially, he points out, in a market as unpredictable and volatile as this one. And to prove it, David has agreed to put REAL MONEY where his mouth is -- also to the tune of $1 million in The Motley Fool's cold, hard cash.

Now, with the help of one of the best investors and educators we've ever met, he is building his own real-money investment portfolio -- although with one very important twist...

David's million-dollar, real-money portfolio is not only invested in common top stocks for 2011 -– it is an actively managed "LONG/SHORT" investment portfolio made up of a full arsenal of investment vehicles.

On October 7 2008, David invited a small group of Motley Fool members to follow along in real time. The response was overwhelming. We stopped enrolling members and started building a waiting list.

On October 26, 2009, Barron's dedicated an entire column to this little group's success -- in a feature called "Giving Your Portfolio More Options." I'll show you some interesting excerpts from Barron's just ahead.

Meanwhile, here are a few comments from investors like you who took David Gardner up on his previous offer...

• "I was losing money. Since I joined, I have been able to have a positive return. This in itself has paid for the service." -- O. Rivera, Dover, NJ
• "With your help, I have stopped the bleeding and reversed the flow. With options added in with stock purchases, I have made close to 30% since I signed up." -- Barry M., Buford, GA
• "This really is a first-class service, and I am having a great time learning and implementing the strategies. Well worth the price of entry in my book." -- Mike H., Redmond, WA

As for the folks we placed on the waiting list, they have been waiting for seven months and are reading this invitation along with you right now. So, please do hear me out. I think you'll see why I say this is unlike anything you've ever been offered by The Motley Fool.

For one thing, it's the first time The Motley Fool has offered a membership service that helps you PROTECT your capital and smooth out your returns. At the same time, it exposes you to more sophisticated investments and strategies -- with the realistic goal of earning you...

Positive REAL returns in up, down, and even flat markets!

It's also the first Motley Fool service that, in addition to showing you step-by-step how to build your own LONG/SHORT stock and options portfolio, also provides you with...

• Specific industry and sector insights
• Timely macroeconomic market commentary
• Detailed qualitative analysis of broad market trends
• Unlimited, deeper-dive access to the world's most exhaustive stock-rating database
• Extensive bottom-up company and community intelligence data and research capabilities

Hence the name of this unusual new project, Motley Fool PRO -- which I'll explain in more detail in the next few pages.

This letter is your invitation to join my brother David Gardner, and his talented co-advisor you're about to meet -- and take part in what we all expect to be an exciting and profitable adventure.

In fact, as you read these words, the Motley Fool PRO team is putting that million dollars to work in a real-money, actively managed portfolio they intend to multiply in value many, many times over.

And true to form, the portfolio is already up 24% -- despite a hefty 40% cash balance and having launched into a market some have called "the worst in history." And get this…

Of the 28 positions opened and closed in the Motley Fool PRO portfolio -- 26 were closed at a profit. That's a stunning 93% win rate.

Plus, 19 positions closed for 100% gains or more!

While of the 21 current stock and ETF positions, a full 18 are in the black (including gains of 85%, 86%, 91%) while only 3 are down, slightly.

But don't worry, the portfolio is not nearly fully invested. In fact, David and his team have more than $400,000 in cash ready to invest.

In other words, you haven't missed the boat. Far from it. Not only do I believe that the open portfolio positions are just getting started… after all, David and Jeff keep adding money to them… I KNOW there are plenty more where they came from, as you're about to discover.

To see why I'm so confident, let's address the first reason why NOW is the time for you to start putting the Motley Fool PRO investments and strategies to work preserving and protecting your capital.

Are you consistently making money in up, down... even flat and roller-coaster markets?

As a Motley Fool member, you're aware of the fortunes that await patient, long-term buy-and-hold investors.

But you can also agree these are remarkable times.

Increasingly, Motley Fool members are taking an interest in the advantages offered by more sophisticated investing, trading, and hedging strategies.

That's understandable. Especially given the treacherous, unforgiving market we've just come through and have every reason to believe we will experience again...

One that puts us at the mercy of powerful sector rotations, constantly changing leadership, and devastating blowups.

PUT and CALL options, for example, can juice our gains in up and down markets, generate excess regular income, and reduce overall volatility.

In addition to options, you've also expressed an interest in profiting from and learning more about...

• Exchange-traded funds (ETFs), both long and short
• Individual short positions
• Market-neutral long/short paired trades
• Income-generating energy limited partnerships
• Real Estate Investment Trusts (REITs)

It shouldn't surprise you to hear that my brother David and I wholeheartedly share your interest!

In fact, you may recall that David's original real-money Rule Breaker portfolio was a long/short portfolio -- earning FULLY DOCUMENTED returns in excess of 20% per year over a decade that included one of the worst bear markets in history.

Yet, as rewarding as those returns were for investors who profited following this innovative strategy from 1994 to 2003, I'm convinced there has NEVER been a market better suited to these diverse strategies than RIGHT NOW...

• Put and call options are uniquely suited to help judicious, opportunistic investors like us take advantage of market volatility and whipsawing stock prices like we're bound to experience again.
• Short positions, when handled wisely, can be used to hedge against excessive volatility, capture short-term downward momentum, and boost our absolute portfolio returns in long-term downtrends.
• Exchange-traded funds (ETFs) offer unique advantages -- allowing us to exploit sector and geographic trends, capitalize on pockets of investor exuberance and fear, and profit from short-term sector and "cap-range" mispricings, either to the upside or downside.

And because we can profit when prices move up or down or even nowhere, all three can provide us the performance, income, and PEACE OF MIND we need to protect our gains and keep making money when top stocks for 2011 "go nowhere fast" like they have the past 10 years.

This is the first reason my brother, David Gardner, is so confident he can do even better with his million-dollar investment -- no matter what the market throws our way...

"When you're a member of Motley Fool PRO, you have a deeper toolbox!"

In the remainder of this letter, I'll show you how a dedicated team of experts intends to use this expanded toolbox to grow a million dollars of Motley Fool money into a massive fortune -- and how you can follow along in real time.

I'll also introduce you to the expert portfolio manager I personally recruited to manage the portfolio. You may know him already -- he has an extraordinary track record of earning market-thumping returns in all types of markets.

But first, let's address the second reason why NOW may be the time for you to start putting these more flexible strategies to work preserving and protecting your capital.

You have a secret weapon on your side!

Of course, I mean the "discovery" my brother, David, and I stumbled upon 17 years ago and have been using to build our own wealth -- by thrashing the pros on Wall Street -- ever since.

As a Motley Fool newsletter subscriber, you already have some idea what it is.

But to grasp the magnitude of what David unabashedly calls "the most exciting development in my lifetime as an investor" -- we must step back in time to 1995.

That's when a group of Fools started sniffing around Iomega, a little-known technology company with a patented new computer storage device.

The "Zip drive" held 70 times more than a floppy disk, but everybody knew that. The money was made when enterprising Fools began staking out the company's Utah factory, reporting back that the parking lots were full on weekends.

This "non-correlated" piece of intelligence -- about a little-known technology company overlooked on Wall Street -- was the final, most valuable piece to the investment puzzle.

It confirmed that the company was pulling out the stops to meet demand for its new product. In short, it was the "all clear" signal David Gardner and his readers needed to hear.

David bought the 2011 best stock for his real-money Rule Breaker portfolio in 1995. Two years later he sold, netting investors who followed his lead a cool 700% profit.

And, amazingly, David and his fellow "Rule Breakers" owed their profits to one "extra" bit of information handed to them by an informed community of so-called amateur analysts and researchers.

For David and his fellow Rule Breakers (and the editors of Fortune), the takeaway was unambiguous...

The revolution was on!

The "parking lot" story landed my brother and me on the cover of Fortune. But the best illustration of the powerful secret I'm writing to share with you today came three years later.

By that time, The Motley Fool was a thriving community of smart investors. Online bookseller Amazon.com was an Internet highflier many on Wall Street called hopelessly overvalued.

"Jeff Bezos is a bozo!" "Online retail is a fad!" "Amazon is a joke!"

Those sentiments were shared by a few "big talkers" right here in The Motley Fool community.

That's when my brother David had a second revelation. It changed the way he would look at investing forever and culminated in this letter today...

"What if you and I could go ON RECORD with our investment predictions and insights -- much the way we do when we actually BUY a company's shares or SELL it short in our own accounts?"

And what if we could track everyone's "predictions" over time and systematically rank their performance -- the way we track your advisor's performance in your Motley Fool newsletter scorecard?

Over time, the EDGE we could gain from this information could mean the difference between earning ordinary returns and raking in a potential fortune!

After all, the next time we faced an important buy or sell investment decision, we would KNOW who had been RIGHT about Amazon...

Leading us to 2,749% gains in 19 months... And who was WRONG, dooming those who followed their lead and shorted the best stock to sure financial ruin.

Now, that would be a powerful tool indeed!

Yet, even with the incredible technology on the scene in 1999, harnessing this powerful, wealth-building signal seemed an impossible task. Today, I'm writing to tell you my brother, David, has done it.

There's PROOF that it works -- and I want you to PROFIT from it, too!

Until 11:59 p.m. tonight or until we reach our enrollment cap, whichever comes first -- we will invite a small number of investors to join as new members of Motley Fool PRO. You can tell from the name that this new service is a little different.

For starters, it's more active than what you might expect from The Motley Fool. Some of our more passive investors will find it a bit fast-paced and, well, aggressive for their liking.

Yes, Motley Fool PRO will invest in well-run companies in their prime earning years, BUT David's long/short portfolio will also make liberal use of put and call options, ETFs, REITs, and the occasional short or market-neutral position.

And while there is a strong educational component to the service, more-novice investors may find Motley Fool PRO a bit -- I hesitate to say it -- advanced.

Finally, while cost shouldn't be an issue, given the returns I expect Motley Fool PRO to deliver year after year, some will find the service too pricey an up-front investment, given the size of their portfolios and modest long-term goals. I'm comfortable with that.

In fact, it's for the best. The nature of the service and the specific investments you will be making force us to keep the membership manageable. Frankly, we'd like nothing more than to avoid having to turn people away.

There are, however, two important caveats to consider while reading on...

• Enrollment will be STRICTLY LIMITED -- and past enrollment windows show that demand will be high…
• We last opened Motley Fool PRO to a similar number of members in June 2009 -- then immediately closed the service for seven months.

So, you can see why I say that it's a good thing that Motley Fool PRO isn't suitable for everybody. But the fact that you're still reading tells me that this might be just the advantage you've been waiting for -- I'd hate for you to risk missing out.

Fortunately, you can sample the entire service without risk while you decide. And whatever your decision, once you've experienced the interactive Motley Fool PRO website, I think you'll see why my brother says he would be in PAIN if he had to invest without it!

And why we've been looking forward to the opportunity to offer you this service for 17 years -- since David first recognized the power in the vast knowledge of our community's smartest investors and started using it to thump the market in his own portfolio.

So why exactly did we wait nearly two decades to pull the trigger and offer you the chance to profit from Motley Fool PRO? It's simple, really...

You see, until fairly recently, David had been forced to apply this powerful proprietary information anecdotally, in ad hoc fashion. This gave him a leg up on most investors, but he knew there had to be a better, more scientific way. Motley Fool PRO is it!

So, let me tell you more about Motley Fool PRO...

You're probably aware that The Motley Fool has been collecting raw data -- capturing the knowledge and insights of thousands of talented individual investors -- and populating the most powerful database of its kind.

You may also be aware that we have been using this proprietary data to rank literally thousands of publicly traded companies as potential market-beating investments...

At the same time, "ranking" more than a HUNDRED THOUSAND investors on their demonstrated ability to accurately predict the future movements of top stocks for 2011. This is common knowledge.

In fact, you might recognize what I've just described as The Motley Fool CAPS platform. You might even be one of our tens of thousands of active participants -- or an all-important CAPS All-Star!

If so, you've escaped the dark age of investing to a world powered by the shared intelligence of investors who USE the products, KNOW the business, even WORK at the companies we're investing in.

You've done well indeed! There are, however, 3 recent developments you almost certainly are NOT aware of...

1. Over the past 36 months, The Motley Fool has enlisted a few remarkable brains -- including a NASA scientist who gave up his space career, and a legendary hedge fund pioneer -- to help fine-tune our algorithms, optimize the investor and company rankings, and exhaustively back test the raw data...
2. The results generated by our proprietary platform have been systematically reviewed and verified by respected members of the investment and academic community, including two Harvard professors who recently published their findings...
3. The outputs available to you on the CAPS online platform, while extremely useful, are but the TIP OF THE ICEBERG. The most valuable output -- including the predictive output that attracted a hedge fund pioneer -- is locked safely behind the scenes!

This is the powerful, predictive data our NASA scientist has unlocked for us -- and that you can start profiting from today. One look at this amazing chart will tell you why this is one opportunity you don't want to let slip by...

You can agree those results are stunning. Market-thumping results and positive REAL returns -- in one of the most volatile markets in memory! And those aren't "my" numbers.

That chart was created from research compiled over more than two years beginning May 1, 2007, by an independent team of Harvard professors whose report concludes that this signal "yields information that is strongly predictive of 2011 stock market returns for individual top stocks to buy."

And it gets better...

How harnessing this proprietary "signal" can propel you past 99.4% of investors!

Even after everything we've discussed, that promise may sound over the top. But let me show you why I believe it's actually quite reasonable...

That chart you just saw PROVES that The Motley Fool's proprietary signal provides valuable new information to investors -- allowing them to generate what professional investors call "alpha."

Simply, alpha is a measure of what a portfolio manager brings to the table -- i.e., his unique ability to help you beat the market on a risk-adjusted basis.

Put another way, alpha is the key to growing your wealth faster than your neighbors' and the driving force behind the $2 trillion hedge fund industry.

And there's proof we have found it!

THIS is the amazing breakthrough that was independently confirmed by two Harvard professors who went public with their validation on April 2009. And again by a NASA scientist and the hedge fund pioneer you'll hear about shortly.

Now you can see why David calls this "the most exciting development in my lifetime as an investor." After all, it leaves us with just two questions standing between us and the long-term wealth we want and deserve...

• First, can we use this valuable, alpha-generating "information" to make money in our own portfolios?
• And if so, how would we do it?

The answer to the second question is the subject of the remainder of this invitation. To answer the first, the NASA scientist I mentioned earlier designed a simple experiment.

It involved randomly generating 25,000 common best stock portfolios. He then compared the performance of these portfolios to his "optimized" portfolio made up exclusively of our top-rated, 5-star stocks to buy.

Amazingly, this optimized portfolio outperformed 24,850 of 25,000 portfolios -- a stunning 99.4% success rate!

Fantastic! So, if you ever wondered how a NASA scientist would use our proprietary community intelligence data to help you beat the market in theory, now you know. Read on to see how you can do it in practice!

A better, more profitable solution... Motley Fool PRO!

An obvious solution would have been to apply this proprietary community intelligence filter to the recommendations you receive each month from your Motley Fool newsletter advisor.

After all, we'd be adding extra "alpha" to some of the best stock pickers in the world. David and his team seriously considered this solution. And you can agree this would be a valuable service worth paying for.

In the end, we weren't satisfied. After all, in the scenario I just described, we would still be helping you build a long-only stock portfolio, which is suboptimal for three reasons.

First, it would mean setting Motley Fool PRO's "expanded toolbox" of options, ETFs, and short positions. This would hamper his efforts to provide you positive absolute returns in all markets.

Second, we would be tying the hands of Jeff Fischer, the gentleman I spent more than a year recruiting to help manage the real-money Motley Fool PRO portfolio. And it was worth every minute.

You see, not only has Jeff been associated with The Motley Fool for nearly as long as I have... Jeff helped David run our original Rule Breaker portfolio from 1996 to 2003...

He was a big part of why David's LONG/SHORT strategy helped investors earn more than 20% per year over a decade that included one of the worst bear markets in history!

(Sound familiar? You bet it does. But do you realize that if you earn 20% per year, your wealth DOUBLES every three and a half years? It's true.)

Moreover, Jeff spent the past five years fine-tuning his portfolio management skills -- mastering the use of the sophisticated securities you will be buying alongside us as a member of Motley Fool PRO.

Only 4 losers in 4 years -- Fantastic!

From 2005 to 2008, Jeff documented his real-money options trades in REAL TIME online for subscribers to his premium advisory service.

Under my direction, a team of analysts at The Motley Fool personally reviewed Jeff's results over the entire three-year period...

Of 40 options trades closed during that period, 36 were winners AND BEAT THE MARKET. You read that right -- that means only 4 losers over 4 years!

That's a remarkable 90% success rate.

All told, in 2008, Jeff closed out 14 positions in his real-money portfolio -- 12 for a profit!

Again, that's impressive (and, remember, David and Jeff are doing even better for their Motley Fool PRO members).

Jeff's work on David's original real-money Rule Breaker portfolio -- also documented in real time online for the world to see -- was instrumental in helping earn investors like you more than 20% per year for nearly a decade.

You can see why we were determined to get Jeff on the Motley Fool PRO team and why I'm so thrilled he agreed. You can also see why I say that running a long-only portfolio would be a waste of Jeff's talents.

And true to form, Jeff is off to a great start, hitting on 95% of his options trades -- including 19 options gains closed for profits of 100% or more. Still, I don't blame you for wondering...

Why did Jeff Fischer, a successful portfolio manager and educator, give up a lucrative job -- and unlimited personal freedom -- to help YOU make more money? The same reason a NASA scientist gave up his dream job to get this project off the ground!

"The predictive power will be something of a shock to the academic community."

Those are the exact words of a Harvard professor who caught wind of our new proprietary data set and trade signal. I have a hunch he's right.

But I know of one FORMER academic and legendary investor who WON'T be shocked.

Thirty years ago he ditched his tenured position and launched an institutional hedge fund. Not only was it the first of its kind, it made him something of a legend on Wall Street.

After making millions for himself and his clients, he personally interviewed the managers of more than 2,000 hedge funds... back testing their results... breaking down their methods... and assessing their performance.

Suffice it to say that in the high-stakes hedge fund world, nobody knows what works better. And this gentleman has been over our community intelligence platform from soup to nuts. His conclusions are unmistakable...

• When it comes to generating alpha and making money in the market, this stuff works!
• It's custom-made for use in a LONG/SHORT stock and derivative portfolio --precisely the type of portfolio I'm going to help you build at Motley Fool PRO.

Here's why: After studying the data for months, it was clear to this gentleman that many of our most valuable and compelling community intelligence signals have been on the SHORT SIDE.

The subprime lenders, for example. David's community intelligence model had the group on red alert almost from the outset. On February 8, 2007, an irrefutable analysis from one of our top contributors tipped the scale -- David publicly shorted the group.

On March 5, after months of slow bleeding, three of David's top short calls, New Century Financial, NovaStar Financial, and Accredited Home, blew up, earning investors who followed the signal anywhere from 30% to 70% in a single day!

We beat "the pros" to the punch on the homebuilders, too. Led by one of our most widely followed and outspoken All-Stars, FloridaBuilder, our outlook for the builders turned decidedly negative in February 2007.

Investors who followed this signal and got out of the builders avoided a great deal of pain. Those who shorted the S&P Homebuilders (AMEX: XHB) ETF earned 57% in just 11 months.

It was a similar story for the airlines, which also plunged after our community intelligence model turned negative on the group -- making fortunes for investors on the right side of the trade.

Of course, this is the third reason why providing you another LONG-ONLY stock portfolio simply would not do. We'd be missing out on some massive opportunities -- ON THE SHORT SIDE!

And as "right" as our optimized community intelligence model was on the subprime lenders, builders, and airlines on the SHORT side, we were just as dead on about energy, with an overwhelming positive consensus and BUY signal on the LONG side.

So, you can see why ETFs with their sector focus are ideal for Motley Fool PRO. And why using options to create a nimble LONG and SHORT portfolio... one that can be market agnostic when appropriate... for you to follow along with... was a no-brainer.

You can also see why my brother's decision to launch Motley Fool PRO now... to take advantage of this relentless, unforgiving market... was inevitable.

Motley Fool PRO -- as close to "hedge fund investing" as most of us "small fish" will ever get...

Of course, the SEC doesn't want most of us mixed up with hedge funds. Unless you're an institution with tens of millions or an "accredited" investor with $1 million in investable assets (or you make $200,000 a year bare minimum), you can pretty much forget it.

And that's a shame. After all, many of the most successful institutional investors in modern history attribute their outsized returns to the long/short strategies and hedges perfected in these funds.

Yet, once again only the fat cats benefit!

This is a double slap in the face for savvy individual investors like us. After all, while hedge funds have gotten a bad rap lately, when handled correctly, they can be wildly profitable. And it's precisely when investing in more sophisticated instruments that we MOST need to know...

• Exactly when to buy or sell
• How large a part of our portfolio to allocate to them, and
• When to close out our positions or let them expire

We also need the flexibility to take advantage of the opportunities the market hands us, even if that means closing a lot of trades one week or sitting back and waiting for another.

That's why when David and Jeff Fischer developed Motley Fool PRO, they opted out of the traditional investment newsletter format and borrowed a page from my own Million Dollar Portfolio playbook.

"For those new to PRO, this stuff really works. I've generated steady streams of income in the past few months as this market has gyrated up and down."
-- S. Busco, Simi Valley, CA

With Motley Fool PRO, there is no guesswork. And while David and Jeff aren't running an actual hedge fund, their real-money PRO portfolio approach may be the next best thing for you.

You simply watch and follow along as we build and manage our balanced REAL-MONEY, LONG/SHORT portfolio, drawing from our proprietary community intelligence model...

From across the entire universe of publicly traded securities

This is the third and final reason why I don't doubt David when he says he can leave 99.4% of investors in the dust. Not only will he and Jeff Fischer be investing in options and ETFs, both long and short -- they have access to proprietary ratings on more than 5,000 top stocks to buy and EVERY SINGLE SECTOR AND INDUSTRY.

By comparison, your current newsletter service offers you a few dozen picks per year, and that's great. Across all our services, you get access to dozens more. But even that's a drop in the bucket compared to the thousands of issues that trade on U.S. markets each day.

Even Wall Street, for all the billions it spends on research each year, covers but a fraction of these top stocks to buy for 2011. And guess what falls through the cracks?

Great small companies with strong balance sheets, for one. Solid businesses with little need for "innovative" investment banking services, for another.

And on the SHORT side: struggling, overvalued companies with poor fundamentals, questionable accounting practices, and hyper-inflated assets on their balance sheets!

To hear it from the hypsters on Wall Street, most of these turkeys are ALWAYS "buys." But now you'll know better!

All told, David's community intelligence platform has POSITIVE and NEGATIVE ratings on more than 5,000 top stocks to buy -- more than Value Line, more than S&P, more than Thomson Reuters -- more than any other stock-rating service on the planet.

With Motley Fool PRO, nothing is off limits!

So, now that you've heard a bit of the strategy, let me tell you a little more about the tangible, immediate benefits you can expect to receive as a member.

When you join David Gardner and Jeff Fischer at Motley Fool PRO today, you'll recognize many of the features our members love about The Motley Fool's Million Dollar Portfolio service. It's a fantastic model that's tough to beat.

Especially if, like me, your gut tells you there is immense untapped value in the wisdom of the Motley Fool community's smartest investors, but you aren't quite sure how to use it to make real money in your portfolio.

Problem solved. Let two of the best investors I've met do it for you!

Remember, I'm offering you COMPLETE ACCESS to every single move David Gardner and Jeff Fischer make as they use this proprietary information to manage a $1 million LONG/SHORT portfolio.

You can simply follow along with your own portfolio in just minutes a month!

And when they reallocate and rebalance their holdings to maximize your profits and lower your risk as market conditions dictate, they'll notify you AHEAD OF TIME... so that you can adjust your holdings FIRST.

To give you extra confidence, The Motley Fool eagerly agreed to invest $1 million of its own REAL MONEY.

With that kind of SKIN IN THE GAME, you know David and Jeff aren't taking unnecessary chances. You can rest assured that you're getting only the very best ideas from the Motley Fool PRO money management team.

More important, you won't have to struggle with deciding when to buy or sell short a stock, ETF, REIT, or option... when to add to an existing position... or even when to lock in your profits.

When you're a member of Motley Fool PRO, David Gardner and Jeff Fischer -- two of the best and most passionate investors I've met -- will show you exactly what to do and when. You really will be partners in a unified cause, building your wealth together.

Our step-by-step model portfolio is just for starters...

I've heard from a number of members who simply kick back, watch what David and Jeff are doing with their LONG/SHORT portfolio in real time, and simply follow along. That's fine.

This might mean committing maybe 30 minutes of your time per month -- TOPS. That benefit alone will be worth many times the cost of joining.

"The timing of PRO could not have been more perfect. Thanks to Motley Fool PRO, I'm 43 and actually having FUN investing during the scariest market of my lifetime. How do you explain that?"
-- G. Hicks, Wichita, KS

Now, here's why your Motley Fool PRO membership will be unlike anything you've ever experienced. In addition to full access to every move made in the Motley Fool PRO stock and options portfolio, you'll also get full, immediate access to...

• In-depth discussions of timely and conservative but lucrative options strategies, including buying and selling calls and puts, writing covered calls, broker requirements, taxes, and more
• The Motley Fool's proprietary "community intelligence" database, PLUS individual stock, industry, sector, and macroeconomic screens and company snapshots not available anywhere else
• A unique Motley Fool PRO investment rating on every investment in a universe of 5,000+ rated top stocks to buy

Personally, I think this is one of the truly great benefits of joining David and Jeff at Motley Fool PRO! It's a proprietary, easy-to-use, one-step stock-rating tool I call CAPShot.

Available only to Motley Fool PRO members, CAPShot instantly shows you how your companies stack up against four proprietary community intelligence benchmarks -- plus, eight more fundamental criteria handpicked for you by our Motley Fool PRO team.

With CAPShot, you get the total financial and investment picture -- summarized for you in one page!

As CEO of The Motley Fool, I foresee great interest in these CAPShot reports and fully expect The Motley Fool to provide them to professional and individual investors in the future -- for a price.

But as a charter member of Motley Fool PRO, you don't pay a cent.

Simply enter any company you want to know more about... and get as many CAPShots as you want, FREE! You can see why Motley Fool PRO is unlike anything you've ever seen from The Motley Fool. Or anybody else, for that matter!

You can also see why enrollment must be strictly capped...

The fact that you're still reading tells me you're giving Motley Fool PRO some serious thought. You need all the facts. So, before I tell you how to sign up, there are a few administrative details to remember...

1. Enrollment in Motley Fool PRO will be strictly limited -- on a first-come, first-served basis (so we ask that you please not forward this email to anyone).
2. We will be enrolling new members until 11:59 p.m. or until we reach our enrollment cap, whichever comes first... and will abruptly close the service and resume building a waiting list. There can be no exceptions.
3. Important: The last time we opened Motley Fool PRO to this same number of investors was in June 2009 -- the service has been closed ever since.

Of course, I would prefer that everybody could join. But remember, David and Jeff will be investing in a wide range of investment vehicles. Which could include lightly traded small-cap top stocks for 2011 and options.

Plus, you will be receiving trade alerts BEFORE the Motley Fool PRO team buys for its own portfolio.

This is the only way you can have the opportunity to get in first.

So I hope you can appreciate why we must keep the membership manageable, even if this means strictly limiting the number of members.

But can you really outperform my Million Dollar Portfolio?

As accomplished as they are, can David Gardner and Jeff Fischer hope to trump a best stock portfolio for 2011 that aspires to return an impressive 15% per year? That's an important question. Just take a look at what earning 15% per year would do for you...

• A 15% return turns a $50,000 portfolio into $406,850 in 15 years...
• A $500,000 portfolio grows to more than $1 million in just 5 years...
• And an $800,000 portfolio pulls in a $120,000 profit a year!

Can these guys really top that? Let's just say this isn't the first time my brother David has taken on a challenge like this.

In March 2002, we launched Motley Fool Stock Advisor together with the challenge to top each other's recommendations to our members.

Since then, the S&P 500 has returned a paltry 3%. My picks are up 41%. David's recommendations are up a stunning 67%!

And that's on average, including profits of 802% on Priceline.com, 1,185% on Quality Systems, and 1,388% on Marvel.

And how about David's returns at Motley Fool Rule Breakers? Including 304% gains on Vertex Pharmaceuticals, 397% on Baidu.com, and 555% on Intuitive Surgical.

Finally, there are the returns David and Jeff Fischer earned readers with their original real-money Rule Breaker portfolio -- 20% per year for a decade, essentially doubling our money every 3.6 years!

At that rate, the Motley Fool PRO portfolio will be worth more than $6 million in 10 years. If you choose to invest just $50,000 to follow along in your own portfolio, you'll have $300,000!

You can see the possibilities...

Especially given your expanded toolbox, an expert money management team, and the secret weapon we've discussed today! And why I'm pleased to send you this invitation today.

Just please don't risk missing out

Frankly, I have no way of knowing how many will respond to this invitation today or how quickly we will reach our enrollment cap. It may take the rest of the week. It may happen today.

I do know that I have heard over and over from Motley Fool members like you who want exposure to more sophisticated instruments and strategies... and more guidance on what to buy and when.

In addition to our waiting list, we have received emails from well in excess of 60,000 additional Fools expressing interest in joining just as soon as the enrollment period begins today. Remember, we can't accept 63,000 new members -- more like one in 20.

For those reasons alone, I foresee spaces being EXTREMELY LIMITED and filling up quickly. When you see the special offer I've worked out for you, I think you'll understand why.

Join today... and save $500!

As I mentioned, Motley Fool PRO costs a bit more than your current Motley Fool newsletter service. That's by design and necessity. And I think you'll agree it's worth every penny -- especially if you join through this invitation today.

When you respond today, I will personally give you a $500 voucher to use today. That's my gift to you for being a loyal and committed member of our community.

And to make your decision even easier, there's something else very dear to my heart that I'd also like you to have with my compliments.

"5 Steps to Finding the NEXT Great Business"

As we've discussed at length today, this truly is a historic market. But there are opportunities out there -- even after the financial meltdown and explosive rally off the bottom.

But the easy money has been made. From here, we have to be selective. And when it comes to our LONG positions, that means shunning the latest fads and dead-cat bounces, and focusing on the world's top businesses.

So how do we find them? I've spent nearly two decades trying to answer that question. Tearing into financial statements... surveying the competitive landscape... interviewing CEOs... and building up a vault of material along the way.

At long last, I think I have the answer. I spent the last three months of 2009 putting that answer down on tape -- and will spend the next few weeks tweaking and improving the final product.

I'd like you to see it just as soon as it's ready -- in a new online video seminar called, "5 Steps to Finding the NEXT Great Business."

Actually, it's much, much more. "5 Steps to Finding the NEXT Great Business" is a five-part multimedia learning experience, complete with my personal video briefings and a wide range of supplemental course materials.

Of course, how you use this new seminar is entirely up to you. You can watch it as entertainment... learn a little something and have some fun... or follow along closely, working through the course materials, honing your skills at identifying the world's next great business!

My new online video seminar is a $499 value itself. And I want you to be the first to have the brand-new edition with my compliments.

Yes, Tom Gardner's new online video seminar and your $500 voucher are my personal gifts to you...

Ok, let's talk price. Ordinarily one year of Motley Fool PRO costs $1,999. That's a considerable investment, but I think it's a fair deal -- considering everything you'll receive and the results I expect David and Jeff to deliver.

And, remember, you can knock $500 right off the top. When you respond to this private invitation, you pay just $1,499 for the full year. And save $500 and get my new online video seminar free! But you'll have to act quickly.

Remember, including our waiting list, we have advance interest from well in excess of 60,000 Fools and counting -- and will promptly close Motley Fool PRO to new members the moment we reach our threshold.

We will resume our waiting list in the event we can open the service again. But there is no guarantee you will ever see this price again.

So, please don't miss out. Motley Fool PRO promises to be a rich and rewarding experience and one that could make a big difference to you and your family for generations.

Of course, you don't risk a penny today

As you know, I'm not a "velvet rope"-type guy. There are few things in life I enjoy less than talking about limited enrollments and application deadlines.

But it's important to me that you understand that Motley Fool PRO is a little different than most Motley Fool services and that you're aware of the realities of the situation.

At the same time, I don't want you to feel rushed. I'd hate for you to jump into something you might think differently about later. Well, here's why that's not going to happen to you...

Simply say yes to this invitation right now. If later tonight you have second thoughts, we'll just fix it. You simply tell me to send your money back, and I'll give you a FULL REFUND -- NO QUESTIONS ASKED.

In fact, you can take a whole month to decide

You can ask for a full refund up until the very last day of your first month. And if you want to quit at any point after that, no worries. I'll gladly send you the full dollar value of the remainder of your membership term.

Of course, if you choose to pass up this unique opportunity today, I'll understand that, too. Motley Fool PRO is not for everybody. We've already been forced to raise the price once, and seats truly are at a premium.

I'll sleep well knowing that you're getting the full attention of your current newsletter advisor and all the benefits of your Motley Fool membership. You're in good hands there.

Still, it would be a shame to hear that you wanted to join and later discovered you've been placed on a waiting list.