"Some of the biggest pirates never stepped foot on a pirate ship." - Dr. Jay Wolff Follow us on Twitter Like us on Facebook Friday, January 9, 2015 | Issue #147 The Bizarre Surprise in Earnings Reports... Emerging Trends Strategist Matthew Carr found a powerful secret hidden inside company earnings reports. In fact, he used it to set a 25-year Oxford Club record with a 1,888% gain in four months. People have begged Matthew not to reveal this secret, but he's agreed to do so for a very short time right here. Pirate Investing By Sean Brodrick I am sailing the Caribbean aboard the Crystal Serenity. We are in waters that birthed the legends of pirates... adventure... and gold. And one of those stories involves a queen... and a precious metals investment that reaped a 4,700% return. I learned this bit of trivia from a lecture by historian Dr. Jay Wolff aboard the Crystal Serenity. "Our concept of pirates is based on children's stories," Dr. Wolff said. "Eye patches and gold earrings, and lots of saying 'Arrr!' But some of the biggest pirates never stepped foot on a pirate ship." You know who was involved in piracy up to her ruffed collar? Queen Elizabeth I of England. Yep, good Queen Bess. This was back in the days (the 1500s) when a flood of wealth from the New World - gold and silver - was rapidly making Spain the wealthiest country on Earth. The other European powers would do anything to stop Spain's ascendance. What Queen Bess did was issue "letters of marque" - basically a pirating license. Privateers who took these licenses promised not to raid English ships. Otherwise, they had a license to steal. One of the privateers who took a letter of marque was a man named Jack Hawkins. His first raid on Spanish treasure was wildly successful. He came back with so much gold and silver that Queen Elizabeth netted a 60% return on her investment. So, she gave Hawkins more, bigger ships. He decided that waiting for Spanish treasure ships to sail by was a mug's game. Instead, he would raid a Spanish town. Unfortunately, a Spanish fleet was waiting for him. And their vengeful cannons cut his ships to pieces. One ship fled the massacre. It was captained by Hawkins' nephew - a man named Francis Drake. He was everything Queen Elizabeth looked for in a pirate - courageous, ruthless and oh so handsome. So the queen footed the bill for Drake to sail back to raid the Spanish again. Drake came up with a new plan: The Spanish navy patrolled the Caribbean. But their treasure ships carried gold and silver in the Pacific without navy escorts because there weren't any pirates there. Drake decided to change that. In 1577, Drake took a small fleet through the Straits of Magellan at the far end of Argentina. One ship had to turn back, then another, and a third was sunk by savage weather. Finally, Drake and one ship, Pelican, made it to the Pacific, and to the Spanish towns where treasure ships sailed. His target was a ship colloquially known as the Cacafuego - literally, s*%tfire! It was called that because it bristled with so many guns, no one dared to take it on. No one except Drake. In 1579, Drake caught up with the Cacafuego. And he captured it without losing a man. Why? Because the Cacafuego had offloaded all its guns so it could carry more gold. Drake loaded all the gold and silver onto his ship, and then set sail for England the long way - across the Pacific, the Indian Ocean and around Africa. Finally, he arrived in England. And when he arrived, he showed up with so much gold and silver that Queen Elizabeth reaped a 4,700% return on her investment. The queen was so happy with Drake that in 1581 she knighted the handsome pirate. A few years later, he was one of the admirals who turned back the Spanish Armada. What do we learn from this story? Here are three things... Gold and silver never go out of style. The metals were worth killing for in the 1500s. They haven't gone out of style today. Gold is a medium of exchange, a store of value and catastrophe insurance when the tide turns against you. Do your research. Jack Hawkins thought he was smart attacking a Spanish harbor town, but didn't count on the Spanish fleet. Drake learned from that mistake and attacked the Spanish where it had no navy - and reaped a mountain of treasure for his trouble. The bigger the risk, the bigger the reward. The queen's 4,700% return didn't come without risk. But the reward was worth it. Dr. Wolff pegs the golden age of piracy as ending in 1701, when Captain Kidd was hanged. But gold still offers tantalizing rewards - especially at recent beaten-down levels. You just need the guts - pirate-worthy guts - to take the risk. All the best, Sean Brodrick for Free Market Café Add This to Your Portfolio Now 64% gross margins. Ten years of record profits. Never-decreased dividend payments. Best of all, the company I'm talking about is set to take over three huge markets that could add mountains of cash to its bottom line. This stock will not be available at its current price for long, as you can see here. Discuss on FMC Share on Facebook Share on Twitter You are receiving this email because you subscribed to Free Market Café. To unsubscribe from Free Market Café or to manage your account, click here. 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