1. States

Two states confronting real austerity this AM are California and Illinois. California’s new / old Governor Brown will chop education significantly amongst several other areas. Illinois will vote on a huge income tax increase of 66% to 75% without much if any public discourse. It is being called a “midnight” tax hike. These efforts, which you can read in much more detail in the press are, of course, necessary. These states are broke and they cannot print money to save themselves. These programs are unlikely to be effective in rectifying multi-billion dollar budget shortfalls. Yet California, yesterday, ratified its own version of a very costly cap and trade legislation. This is certain, at least in the early days to cost the State significantly and increase the deficit pressures.

Written by Michael A. Berry, Ph.D. - [ Discovery Investing Web Site ]

Why You Need Discovery

This past Friday we opined, “TGIF.“ This day we look forward to the week with renewed anticipation that our discovery stocks will rebound. More than ever, given these uncertain political and economic times, you need to consider discovery opportunities. Last week, beginning on Tuesday, we saw significant decline in the price of almost all commodities. This occurred because the dollar became stronger. It had declined the previous week as Wall Street end of year performance-gaming took place and ended the 2010 performance chase.

Written by Michael A. Berry, Ph.D. - [ Discovery Investing Web Site ]

The MicroCap Investor advisory ended 2010 on a high note! We captured a 138% profit by selling one-half of our position in a company that's leading the charge, so to speak, in energy solutions for transportation.

Other top gains currently in our portfolio include +152% for a developer of a new class of cancer drugs, +110% for a supplier of advanced equipment for large-scale solar projects, +94% for a designer of 3G/4G wireless chips, and +80% for a stem cell developer, which was recommended less than five months ago.

And let's not forget the +67% in a company which has developed and is selling mobile services to multi-billion dollar markets worldwide in dire need of its cost-effective and efficient solutions. I believe this one has all the characteristics of rapidly becoming one of the great microcap winners of the decade.

Rocky Mountain (RKY TSXV)

THE MOST IMPORTANT METAL YOU’VE NEVER HEARD OF AND ONE NAME YOU NEED TO KNOW IN THIS SPACE

In the wake of recent Chinese announcements restricting export quotas on rare earth elements (REEs), one is tempted to think “here we go again.” While all these recent moves were predictable to anyone who follows the REE space closely, quite of bit of shareholder wealth has been created by numerous rare earth companies. We think there is more to come in the future based on the supply/demand fundamentals and geopolitics we’ve written about. This has caused us to think about other metals that are equally important for clean energy applications but that have not received the same amount of press.

Written by Michael A. Berry, Ph.D. - [ Discovery Investing Web Site ]