Today I’m looking into a stock teaser “interview” between economist Mark Skousen and host Roger Michalski, which centers around Skousen’s so-called “Biden Disaster Plan.”
What’s it all about?
As you might expect, given the title of the presentation, the whole thing is very political in nature and talks a lot about the policies of the Biden administration.
But since this blog isn’t about politics, I’m going to avoid focussing on that side of things and stick to uncovering the companies Skousen is teased.
So, what are his picks?
In short, Skousen says that there are “three distinct stages” to the “disaster” he sees unfolding. And each “stage” corresponds with a company he’s recommending, which he claims could give investors the chance to 10X their money over the next few years.
“Right now, I see some signs that are very troubling for investors. President Biden is creating an unprecedented disaster.
“It’s coming in three distinct stages, which we’ll get into.”
“The fact is… There are some investments that are going to do very, very well as the Biden Disaster unfolds.
“Investors will have the chance to 10X their money on these investments over the next few years.”– Mark Skousen (source: https://markskousen.com/offer/fs-biden-disaster-plan-2/?step=1)
Mark Skousen didn’t reveal the names of the companies in the presentation. Instead, he reveals each pick in three separate research reports that come with a subscription to his service, Forecasts & Strategies, which costs $49.95 (or more) per year.
However, the good news is that Skousen shared numerous clues about his three stock picks in the presentation, and I think I know what each one is.
So with that said, let’s dig into each pick.
Pick 1: “America’s #1 Energy Stock”
According to Mark Skousen, the “first stage” of the “Biden Disaster Plan” has to do with America’s energy independence. And he specifically focused on oil and gas.
In short, Skousen states that America has gone from a “huge surplus in oil” to a “massive deficit” since January 2021 and that this is “leading us toward a major economic pullback that could crush certain stocks.”
However, he also said that there will be “one truly big winner” out of all of this, a company that he believes will see record revenue growth quarter after quarter.
“But there also will be one truly big winner out of this energy crisis.
“It’s a company that is going to rake in record revenue quarter after quarter.”
What else did he say about this company?
For one thing, Skousen said that it’s an American energy company.
Second, he dropped some clues about its revenue and dividend yield:
“Revenue increased 50% last year… A total jump of $13 billion.
“And the yield this company pays out is enormous… almost 10% per year.
“And they have increased their dividend every single year since the company IPO’d in 1998.”
Third, he shared numerous clues about its operations:
“The company operates pipelines, processing plants, storage operations, import/export terminals, and more all across America.
“They run over 50,000 miles of natural gas, crude oil, and other pipelines from oil rich regions in Texas and Louisiana to states as far reaching as Wyoming, Wisconsin, and New York.
“The company maintains 260 million barrels of refined oil storage. And 14 billion cubic feet of natural gas storage.”
And finally, Skousen highlighted a “new acquisition” the company has made:
“They made a new acquisition that gives them direct access to ‘one of the most economic and prolific drilling regions in the United States.’
“They now have the rights to 1,750 new miles of pipeline… over 1 billion cubic feet of natural gas processing per days…”
What company is he teasing?
I believe Skousen’s first pick is Enterprise Products Partners L.P. (EPD), a Texas-based provider of midstream energy services to producers and consumers of natural gas, crude oil, and petrochemicals (among other products).
What initially tipped me off about this pick was the “50,000 miles” of pipeline clue Skousen shared because that was the same clue a different “guru” dropped in another presentation I looked into recently, which turned out to be Enterprise Products Partners.
Not to mention, Skousen has teased this company before in a presentation I looked into centered on inflation. Or, more accurately, Roger Michalski teased this company when discussing Skousen’s “1 inflation-busting pick.”
In any case, after looking into the clues Mark Skousen shared (above), my suspicion that his pick was EPD was confirmed.
Here’s an overview of why I say that:
- Aside from the clues about what the company does, Enterprise Products Partners increased its 2020 to 2021 revenue by roughly $13 billion, matching what Skousen said.
- The company also pays an annual dividend of over 7% as of writing (August 2022) and has increased its dividend since 1998, the same year it IPO’d.
- What Skousen said about the company’s pipelines and storage capacity (more or less) lines up with what is stated on the Enterprise Products Partners website.
- Finally, as for what Skousen said about the company’s “new acquisition,” that appears to relate to Enterprise Products Partners’ acquisition of Navitas.
So, based on all of that, I have no doubt that Skousen’s first pick (aka his “America’s #1 Energy Stock” pick) is Enterprise Products Partners L.P. (ticker: EPD).
What about his second pick?
Pick 2: “America’s #1 Small Business Investment”
According to Mark Skousen, the “second stage” of the “situation” he discussed in the presentation has to do with inflation and rising interest rates.
“The second stage of this situation is a deadly combination of runaway inflation and rising interest rates.”
In short, Skousen suggested in the presentation that, over the past couple of years, the combination of economic constraints and stimulus has led to “massive inflation.”
He also said that “runaway inflation” is now forcing the Fed to raise rates faster than expected, which, as he points out, isn’t good for many stocks.
“Runaway inflation is forcing the Fed to raise rates much faster than expected.
“And this is going to slam the brakes on business across the country and again hurt many stocks.”
What’s he recommending this time?
As it turns out, a venture capital investment firm that he says “has helped over 200 small American businesses grow.”
“… the second investment I’m recommending is a venture capital investment that, even during low-interest rate environments, has been one of the best places investors could put their money.
“This venture capital firm is quite unique.
“Rather than invest in big silicon valley tech companies… this venture capital firm focuses on REAL America.”
“This company has helped over 200 small American businesses grow.
“They invest in shooting ranges… power equipment manufacturers… drilling operations… agricultural firms… lumber yards… medical device companies… and much more.”
What else did he say about this company?
Firstly, Skousen said that the company’s stock has “gone virtually straight up” since Obama became president (in 2009).
“Whether during the Obama years… under Trump… or now Biden… it’s gone virtually straight up.
“$10,000 invested at the beginning of Obama’s administration would be worth $124,600 today.”
Second, he said that the company’s dividend is “almost five times bigger than the average S&P stock.” And since the average dividend yield of the S&P 500 is somewhere between 1.4-1.5%, the company’s dividend should be somewhere in the ballpark of 7%.
And finally, Skousen shared some details about the firm’s last three investments:
“They exited a software firm after seven years invested in it… and they reported making 7.1X their initial equity investment on it.
“Before that, they took profits on a tax services company they invested in back in late 2019.
“They profited 2.5X in just two years on that equity investment.
“And prior to that, the company closed out of an investment in a clinical research firm.
“That play made 15.2X on the equity investment over 10 years.”
So were’ basically looking for a VC firm that invests in small businesses, which is known as a Business Development Company (or BDC).
More specifically, we’re looking for a BDC that invests in the types of small businesses Skousen mentioned, with a stock that’s gone up since 2009, has a high dividend yield, and that has exited the above investments Skousen highlighted.
What could it be?
This pick appears to be Main Street Capital Corporation (MAIN).
Admittedly, this one had me stumped at first. But after sifting through dozens of public BDCs to narrow down my search, and coming across this stockgumshoe.com article that says Skousen has recommended this company before, I came to the conclusion that Main Street Capital is the closest match to Skousen’s clues.
In short, Main Street Capital is a Texas-based investment company that, according to its site, has “helped over 200 private companies” through its flexible private equity and debt capital solutions. So not only does the company do what Skousen talked about, it matches what he said about how the company has “helped over 200 small American businesses.”
As for how the other clues match…
- The company’s stock has gone up pretty consistently since 2009.
- This page on the company website confirms what Skousen said about the first two investments the company has exited (above). And this press release confirms the other “15.2X” investment exit he mentioned.
As for the part about turning $10k into $124k, that’s what initially threw me off with this pick because the stock hasn’t gone up that much since 2009. But when you factor in the dividend yield, which you could argue is “almost five times bigger than the average S&P stock,” and reinvesting those dividends, that might help explain how Skousen arrived at that figure. I haven’t done the math on that, but that is my best guess on explaining that clue.
Either way, Main Street Capital appears to be his second (“America’s #1 Small Business Investment”) recommendation.
Recommended: Go here to see my #1 rated stock advisory of 2022
Pick 3: “America’s #1 Chip Crisis Stock”
The “third stage” of the “disaster” Mark Skousen talked about in the presentation relates to shortages across “dozens of industries.”
“And this brings us to the third stage of the Biden Disaster.
“We are looking at prolonged shortages in dozens of industries that will severely impact the American economy going forward.”
According to Skousen, the “most disruptive of all” shortages is the global computer chip shortage. And there’s one company that he believes “is going to 10X” as a result of the global chip crisis. As for the clues he shared, Skousen said it’s a “semiconductor and transistor company” that “provides all things electronic.”
“It’s a semiconductor and transistor company that provides all things electronic.
“And I do mean everything.
“Transistors, switches and chips used in smartphone chargers, battery packs, notebooks, desktops, data centers, graphic cards, game boxes, mobile devices, flat-panel TVs and displays, AC adapters, power supplies, motor control, power tools, electric vehicles, solar inverters and industrial welding.”
He also dropped some hints about numerous well-known companies it supplies in the U.S., Asia, and Europe. And he shared some hints about its net income.
“Net income is up… get this… an astounding 660% over the last 12 months alone.
“It’s gone from $58 million in profits to $442 million!”
Finally, Skousen said that the stock trades at “four times earnings.”
Based on those hints, Skousen’s third pick appears to be Alpha and Omega Semiconductor Limited (AOSL), a global semiconductor company headquartered in California.
I haven’t researched every product Skousen mentioned above, but based on what I’ve seen, this company fits the “provides all things electronic” description he gave. And according to its website, the company has expertise in “all areas of power semiconductor technology and business operations.”
Furthermore, almost all of the companies Skousen said are customers of the company he’s teasing are listed in AOSL’s May 2022 investor presentation.
And lastly, the company reported a net income of around $58 million for the four quarters leading up to June 2021. And in the four quarters from Q1 2021 to Q4 2021, its net income was $442 million. So those clues match too.
Oh, and according to the company’s Yahoo Finance page, the stock has a PE (Price to Earnings) ratio of under four as of writing, which matches the final clue.
Should you invest in Skousen’s picks?
I’m not a stock picker, so I’ll leave that part for you to decide.
But there are numerous free articles online from different analysts covering these companies if you want to do more research. You could also check out the reports I mentioned earlier, which detail each of Skousen’s picks.
The only way to access those reports, however, is to sign up for a paid subscription to his service, Forecasts & Strategies. So let’s look at what that involves now.
What Is Forecasts & Strategies?
Forecasts & Strategies is an investment research service run by Dr. Mark Skousen, a Ph.D. economist who says he has spent over 40 years on Wall Street.
And this is the service you’d need to join if you want to access Skousen’s “Biden Disaster Plan,” which is essentially a package of three research reports that walk you through his recommendations on the companies he teased in the presentation.
The first report is called “America’s #1 Energy Stock,” which details his oil and gas pick. The second report is called “America’s #1 Small Business Investment,” which details the VC firm he teased. And the third report is called “America’s #1 Chip Crisis Stock,” which discusses the semiconductor company he’s recommending.
I’ve already mentioned what I think each of those picks is, but if you want to know for sure and get all the details about his recommendations, that’s where to find it.
How does the service work?
The way the service works is similar to most newsletters out there in that, as a subscriber, you receive monthly investment insights and recommendations.
However, what makes this service different is that Mark Skousen has decades of experience as an economist. And on top of sharing his ideas about “how to profit in any market,” Skousen discusses his take on the broad economy in each newsletter.
“In each issue, I like to start by talking about the broad economy—interest rates, inflation, growth, trade, taxes, government regulations, and geo-politics.
In my 40 years plus on Wall Street, I’ve seen it all – boom and bust, bull markets, bear markets, and crashes.
I’ve seen massive inflation… energy shocks… negative interest rates… financial meltdown… everything.
I take all of that experience and I share with my followers how to protect themselves and how to profit in any market.”
Aside from that, subscribers get weekly email updates, access to a members-only website, and other resources aimed at helping subscribers learn Skousen’s strategies.
How much does it cost?
The service costs either $49.95, $77, or $149, depending on which membership option you choose, but all three appear to come with the reports detailing his picks.
Mark Skousen’s “Biden Disaster Plan” presentation centers around three main problems he sees facing the economy: the energy crisis, inflation, and shortages.
For each “stage” of the “situation” he described in the presentation, Skousen teased a different company, which he believes could “10X” in the years ahead.
I can’t guarantee that the companies I’ve mentioned are his picks, but they seem to match what Skousen said pretty closely overall. And if you agree, at least now you don’t have to join the service for the sole purpose of finding out what each company is.
Thanks for reading.