r u n n i n g h e a d e r 1

The Oxford Club

Alexander Green Chief Investment Strategist

Matthew Carr Emerging Trends Strategist

Andrew Snyder Editor-in-Chief

Amanda Heckman Editorial Operations Director

Alex Moschina Editorial Director

Rachel Gearhart Managing Editor

Anne Mathews Managing Copy Editor

Allison Brickell Copy Editor

Alison Kassimir Art Director

Chelsea Centineo Graphic Designer

James Boxley Cooke Honorary Chairman

Julia Guth CEO & Executive Director

Laura Cadden Executive Director of Publishing Services

Ryan Fitzwater Director of Research

Chris Matthai Senior Research Analyst

Steven King Event Director

Nathan Hurd Director of VIP Trading Services

Dear Member,

It’s been said that one good speculation is worth a lifetime of prudent investing.

Early investors in Netflix, Apple, Amazon and Tesla – to name just a few – watched their holdings increase fiftyfold or more while the market simply plugged along.

Clearly, it would take something truly exceptional for a company to make that kind of move in the years ahead.

But imagine a company that engineers living cells, turning them into microscopic factories that create new industrial products, safer and cheaper foods, and novel therapies to treat deadly diseases.

Imagine, moreover, that the company is majority-owned by one of the country’s richest individuals, a man with decades of experience turning biotech startups into multibillion-dollar paydays.

Imagine further that one of the nation’s top equity managers calls the company “the stock of the decade” and likens it to investing in Apple in the 1990s.

These things are all true. Yet they are only some of the reasons we’re adding Intrexon (NYSE: XON) to our Ten-Baggers of Tomorrow Portfolio.

The Right Place at the Right TimeRemember the big hit that Dr. John had back in the 1970s? The New Orleans legend sang that he was “in the right place, but it must have been the wrong time.”

Investors can occasionally have that feeling themselves. They buy a great company only to sell it too late... or too early.

We’ve all had that experience from time to time. And sometimes when a stock gets away from us, we never have a chance to buy it back at a better price.

Other times we do. And that’s the case today with Intrexon.

We added this leader in synthetic biology to our Oxford Trading Portfolio a little over a

ALEXANDER GREEN

WITH ALEXANDER GR REENWITH ALEXANDER GREEN

GREAT PROFITS IN THE COMPANY OF GOOD FRIENDS | FEBRUARY 1, 2017, VOLUME 30, NO. 2

Is This Company “The Next Apple”?One of the Nation’s Top Fund Managers Thinks So... and So Do I

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year ago. At the time, I said the company had lots of fabulous products in development that would produce a diverse and powerful revenue stream.

I also warned that the cutting-edge company was not yet profitable and was likely to be more volatile than most of our holdings.

That proved only too true. Without earnings to steady its climb, the stock moved in fits and starts, and we stopped out within just a few weeks.

Months later, I introduced our Ten-Baggers of Tomorrow Portfolio, a select group of smaller, highly innovative young companies with the potential to rise tenfold or more.

These stocks will experience wider swings than most of our recommendations. (For that reason, we don’t use a trailing stop here.) And with this greater volatility comes the potential for higher returns.

That is certainly the case with Intrexon.

A Robust PipelineIntrexon is a leader in synthetic biology, a new branch of science that combines biology, biophys-ics, genetics and engineering to redesign existing biological systems and even creates new biologi-cal components that do not currently exist in the natural world.

It is a discipline that aims to make biology as easy and predictable as engineering. And Intrexon is the publicly traded leader in the sector.

The company owns armies of biological robots, as well as proprietary genetic and genomic technolo-gies that allow it to engineer living things in pre-dictable ways.

Intrexon generates sales three ways: by licensing its portfolio of biology tools and collecting col-laboration payments, by providing research and development services, and by selling bioengi-neered products.

The company’s goal is to recoup its research and development (R&D) expenses from partners – instead of shouldering this risk itself – and collect revenue or royalties on those products that make it to market.

Intrexon’s primary focus is healthcare applications. While the product development cycle is long here, a new blockbuster drug or therapy can reel in billions in annual sales for a decade or more.

One of its most exciting developments is a joint venture with University of Texas MD Anderson Cancer Center and Ziopharm. The partnership will develop novel therapeutics that have shown promising results – even curing several patients of cancer in early clinical trials.

The company makes R&D deals with various partners – large and small – to create biotech products in healthcare, energy, food, environmen-tal services and even consumer goods.

These partnerships allow Intrexon to stay focused on developing a robust pipeline full of new oppor-tunities rather than spending time and money on more mundane business activities like finding dis-tributors and sales representatives.

Intrexon is actively pursuing hundreds of commer-cial ideas. Its broad diversification means that one or two product failures will not derail the compa-ny’s mission, since there will still be plenty of other opportunities in development.

Serious Money to Be MadeAll living things are controlled by the same simple set of chemicals that comprise DNA. By devel-oping tools to engineer living things, Intrexon can create living organisms with more precision than ever before. This is creating everything from better-breeding cattle to superior industrial micro-organisms to better cancer drugs.

This is not just about gee-whiz science. It’s also about making serious money.

In addition to forming high-profile partnerships with corporate giants such as Johnson & Johnson and Sanofi, Intrexon takes ownership stakes in smaller partners or buys them outright.

This gives it more control over future product sales than royalties alone would.

Like any company, however, Intrexon has not been without some difficulties.

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For starters, its products – including mosquito-control tools and fast-growing salmon – have run into regulatory setbacks. Fortunately, the new Trump administration has promised to reduce much of the bureaucratic red tape that slows down product innovation and commercialization.

Most of its products have yet to receive regulatory approval. That can make for uneven sales growth. (Revenue declined 8.2% in the most recent quarter.) But regulatory approval, higher sales and profitabil-ity are closer today than they were a year ago.

Intrexon will not be profitable in 2017. However, analysts’ consensus is that revenue will rise 26% to $249.5 million in the year ahead. And that estimate is too conservative. As more products come to market, I estimate sales will hit nearly $300 million.

And the company is still innovating...

For example, each year, approximately 16% of world food production is lost to crop damage from insects. As a result, farmers spend more than $18 billion on insecticides annually. Unfortunately, bugs quickly develop increased resistance to manmade chemicals.

So Intrexon is developing an eco-friendly way of deterring pests – by changing the genetics of the crops themselves. Two of its proprietary technolo-gies allow farmers to precisely target single pest species, resulting in healthier crops, bigger harvests and a healthier planet.

A Potential Grand SlamI’m not the only one who sees enormous potential here. Bill Miller, the investment legend and former manager of the Legg Mason Value Trust, calls Intrexon “the best stock of the decade” and likens it to buying Apple in the 1990s.

He owns more than 10% of the outstanding shares.

I agree with his upside assessment. However, I believe Intrexon is more like Amazon in the ‘90s than Apple.

At first blush, it might seem that there is little to quibble about. Both stocks have soared more than a hundredfold since then.

But Apple has been profitable for decades. Amazon only just turned the corner after dozens of quarters of red ink. It focused on building brand awareness and market share over making immediate profits.

When the eventual earnings come to Intrexon, they too will be substantial. And that means the stock has plenty of room to run.

Intrexon’s largest shareholder is Randal “R.J.” Kirk, a billionaire biotech investor and member of the Forbes 400.

Kirk has a long string of successes in the industry. In 2007, he sold New River Pharmaceuticals to Shire for $2.6 billion. Four years later, he sold his drug company Clinical Data to Forest Laboratories for $1.2 billion.

But his latest and largest pharmaceutical success story is Intrexon. The company was founded in 1998, but Kirk came on board a decade later and took it public in 2013.

In December, Kirk purchased 34,606 shares at $28.90, an investment of just over $1 million.

This was hardly his first purchase. Kirk has bought 3,256,999 shares since 2013 in nine transactions. (Today he owns more than 60% of the synthetic biology upstart, accounting for roughly half of his multibillion-dollar net worth.)

Kirk recently said that Intrexon “made good progress across multiple dimensions” in 2016 and called it an “excellent year of accomplishment.”

Those achievements have not been reflected in the share price. While the S&P 500 rose 12% last year, Intrexon fell 19%. (The sell-off accelerated in December as tax-loss selling trampled shares.)

As a result, this fantastically innovative company – with superb business prospects in several different industries – sells at a greatly reduced valuation.

Yes, like our other Ten-Baggers, this will be a volatile stock. But it is also a potential grand slam for early investors.

Action to Take: Buy Intrexon Corp. (NYSE: XON) at market. When the company meets our sell criteria, we will notify you with a Safety Switch Alert. n

This Unique January Holiday Could Hand You 50% Gains

m a r k e t - b e a t i n g t r e n d s 4

On New Year’s Day, I headed to my pantry armed with a trash bag.

Like so many Americans on that day, I decided enough was enough.

Belgian chocolate-covered Oreos... Trash! Dark chocolate-covered pretzels... Trash! Cheetos... Doritos... Trash! The glorious and universal Whitman’s

Sampler... Trash!

Now, that’s not how my pantry is normally stocked. I admittedly have a sweet tooth... but nothing to that degree.

That’s just the accumulation from the holidays. And it doesn’t include the cheesecakes and pies I either gave away or tossed out in the first trash pickup after Christmas.

The holiday season is brutal on us. Over-indulgence is the norm. From Halloween to New Year’s, we gorge ourselves.

Halloween is a holiday dedicated to consuming criminally large amounts of candy. And it’s now the No. 1 pizza-consuming day of the year, edging past the gluttony fest that’s Super Bowl Sunday.

Thanksgiving is a holiday dedicated to overeating. To stuffing our faces with as much as we can. The night before Thanksgiving is also one of the top pizza-consuming days of the year.

Christmas is about more overeating. Both candy and enormous meals.

Then there’s New Year’s, a night dedicated to drinking criminally large amounts of alcohol. And eating... once again... pizza.

The top five pizza-consuming days are Halloween, Super Bowl Sunday, New Year’s Eve, the night before Thanksgiving and New Year’s Day. Many of the top beer and liquor drinking days are the same.

And that’s why I always recommend pizza and beer companies during the last quarter or so of the year. That’s when they make all their money.

But there’s a little-known event that takes place shortly after New Year’s...

January 5 is its own unique holiday. It’s the day that sees the least amount of pizza consumption and the least amount of beer drinking.

It’s the day we stop overindulging (at least until the Super Bowl). And we start to institute big changes... changes that can be more lucrative for investors than pizza and beer.

A New Year! A New You!It’s a new year. That means it’s time to shed the skin of the “Old You.”

It’s time to transform yourself into the “You” you want to be for the year ahead. That often means a healthier, slimmer, more fit you.

And you must get to work right away, because “swimsuit season” is looming on the horizon.

This creates a boom time for companies that cater to that need. You see the commercials on televi-sion... Oprah is a spokesperson (and major share-holder) for Weight Watchers (NYSE: WTW)... Marie Osmond is the current spokesperson for Nutrisystem (Nasdaq: NTRI).

To see how much of an impact New Year’s resolu-tions have on these companies, just check out the quarterly revenue chart for Nutrisystem on the next page.

Analysts are looking for Nutrisystem to report $179.54 million in the first quarter of 2017.

That’s a 10.8% increase over its revenue in the first quarter of 2016. More importantly, it represents a 79% jump from what the company is expected to

Matthew Carr, Emerging Trends Strategist, The Oxford Club

MATTHEW CARR

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report in the fourth quarter of 2016.

I’ve explained how the gluttony of our holidays rules the final quarter of the year. So you shouldn’t be surprised to see from Nutrisystem’s revenue chart that the fourth quarter is its slowest of the year.

But that big spike in the first quarter is the result of what the company refers to as the start of “diet season.” It stretches through Nutrisystem’s second quarter before business starts slowing down again... right as kids are heading back to school and the holiday splurge comes back around.

It’s no coincidence that some of the worst months for shares are December, January and February... from Thanksgiving to the Super Bowl.

In February, Nutrisystem releases fourth quarter earnings and gives guidance for the first quarter.

Shares sink on this report but recover in March. In May, when first quarter results are released, the company crushes expectations. Shares really soar.

For two years straight, we have played this trend in my trading service Prime System Trader. Both times we have seen 50%-plus gains.

The new year is full of new opportunities. And for investors, there are several that revolve around what we might call “resolution stocks.”

This first quarter of the year we see a spike in plastic surgery, dental work and a lot of other cosmetic procedures, not just in diet plan subscrip-tions. And they’re all related to making ourselves feel better.

We close out the year feeling fat and bloated. So we look to trim down and shed all those unwanted pounds before summer.

At the same time, we can make certain our port-folios are fat with profits by the time swimsuit season rolls around. We just need to invest in the booming business of New Year’s resolutions. n

Note: As Matthew mentioned, he’s taken advantage of New Year’s resolutions multiple times to help his Prime System Trader subscribers profit handsomely. If you’d like to learn more about the latest trends he’s following – and profiting from – click here.

Nutrisystem Average Monthly Gain

10%8%6%4%2%0%-2%-4%-6%-8%

Jan Mar May Jul Sept Nov DecFeb Apr Jun Aug Oct

“IN 25 YEARS, I HAVE NEVER SEEN INSIDERS BUYING LIKE THIS”In only 6 1/2 hours... the CFO, COO and vice president of one company spent $237,000 purchasing their company’s stock.

Another stock launched 95%... in only seven days of insiders buying.

Now insiders are moving billions into another unusual corner of the market.

This could be the single most profitable trade you will ever make. Click here for details.

Nutrisystem Quarterly Revenue

■ Estimates$180

$160

$140

$120

$100

$80

$60Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16

Millions

Source: Nutrisystem Quarterly Revenue

Our Gone Fishin’ Portfolio Has Another Good Year

Alexander Green, Chief Investment Strategist, The Oxford Club

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When I unveiled our Gone Fishin’ Portfolio in early 2003, I called it a simple but sophisticated long-term investment system – based on a Nobel Prize-winning strategy – that would allow you to successfully manage your money yourself in 20 minutes a year or less.

That promise has been fulfilled.

Over the last 14 years, the portfolio – based on Harry Markowitz’s groundbreaking discovery that a portfolio of non-correlated assets can deliver higher-than-average returns with below-average risk – has outperformed the S&P 500.

The only things required are that you set it up – with Vanguard or your broker – and then take 20 minutes a year (at most) to rebalance it.

The system worked well in 2016, even though it was a year for the books.

The Dow kicked things off by turning in its worst five-day start to a year ever, plunging 1,000 points in the first week of trading. But by mid-March it was back in positive territory, and within a few months it was hitting new records. It finished the year near an all-time high.

Bonds also took investors on a wild ride. After the surprise Brexit vote, the yield on Treasurys hit an

all-time low of 1.366%. But in the second half of the year, interest rates went into reverse and yields climbed more than a full percentage point.

The greenback defied the dollar bears by continu-ing its nearly six-year run, hitting a 14-year high against a basket of major currencies and a 31-year high against the British pound.

However, the big takeaway was that 2016 was yet another year when diversifying outside of U.S. stocks added little value. (Our domestic market has generated double-digit gains in five of the last seven years.)

High-grade and high-yield bonds, Treasury infla-tion-protected securities (TIPS), real estate invest-ment trusts, and European, Latin American and Asian equities all underperformed the 12% total return of the S&P 500.

Yet our Gone Fishin’ Portfolio still managed to have a good year. Its total return was 11%.

True, this was a point less than the S&P 500. But we take far less risk here than being fully invested in equities.

Thirty percent of the portfolio is in fixed-income investments, spread equally among TIPS, junk bonds and short-term, investment-grade corporates.

We also have 5% in REITs, which underperformed the S&P 500 with a return of 8.3% in 2016.

And the strong dollar muted our return on foreign equities.

So how did the Gone Fishin’ Portfolio remain competitive last year? For starters, U.S. small caps did better than U.S. large caps.

We have 15% of the portfolio in the Vanguard Small Cap Index Fund (NAESX). The fund returned 18.2% last year.

2003 2005 2007 2009 2011 2013 2017

Value

2015

Gone Fishin’ Portfolio vs. S&P 500

$340K

$300K

$260K

$220K

$180K

$140K

$100K

$310,822

$331,708

■ Gone Fishin’ Portfolio ■ S&P 500

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We also use the more broadly diversified, multicap Vanguard Total Stock Market Index Fund (VTSMX). The small cap and midcap exposure gave a small performance boost. The fund returned 12.5% for 2016.

Plus, we have 5% in the Vanguard Precious Metals and Mining Fund (VGPMX). Over the last few years, owning gold and silver stocks has been like dragging an anchor. But 2016 showed why it pays to diversify. The fund returned 50.6%.

The goal of the Gone Fishin’ Portfolio is to conserve your assets, build your wealth and reach your long-term financial goals by generating infla-tion-beating returns with modest risk.

When I first unveiled the strategy 14 years ago, the idea of creating a portfolio of low-cost, tax-efficient index funds was fairly novel.

It is much less so now.

Investors poured hundreds of billions of dollars into Vanguard in 2016. That flow represents a growing trend away from active fund managers and toward so-called passive strategies that mimic indexes for a fraction of the cost of the typical mutual fund.

According to Morningstar, investors pay just $0.18 for every hundred dollars they invest with Vanguard, compared with $1.23 for the average actively managed fund and $0.77 for the average index fund.

Other mutual fund families are four to seven times as expensive as Vanguard. That’s one reason it now has more than $3.5 trillion in assets under man-agement, the most of any mutual fund group.

Exchange-traded funds (ETFs) are also growing in popularity. U.S.-listed ETFs now hold more than $2 trillion in assets, and investors are adding hundreds of billions in net new invest-ments each year.

Fund fees keep dropping, too. BlackRock, the sponsor of iShares, Charles Schwab and Fidelity all cut the fees on their funds and ETFs last year. The expense ratio of some ETFs is now approach-ing zero.

You can construct the Gone Fishin’ Portfolio using either Vanguard funds or ETFs. (Vanguard itself is a major sponsor of ETFs.) It’s the specific asset allocation – not the name on the fund – that is important.

The portfolio is made up of 10 low-cost index funds that represent 10 different asset classes. For 364 days of the year, we leave them alone (and “go fishin’”). Then once a year – it doesn’t matter which day although we use the last trading day each year for simplicity’s sake – we rebalance the portfolio.

That means you redeem a portion of the funds that have appreciated the most and add the proceeds to the funds that have lagged the most. This brings the original asset allocation back into alignment to start each new year. The discipline forces you to sell high and buy low, adding to your long-term returns while reducing risk.

The real-world philosophy that underpins both this portfolio and our entire Oxford investment system is this:

1. It is not possible to consistently predict the economy or the stock market. (That is why economic forecasting and market timing are not part of this strategy or any of my trading services.)

2. Asset allocation is your single most important investment decision, responsible for 90% of your portfolio’s long-term return. (The balance is due to security selection, expenses and taxes.)

3. Over periods of a decade or more, more than 95% of all active fund managers fail to match the returns of their benchmarks. That is why we use index funds.

4. All asset classes have periods of outperformance and underperformance. The smart investor takes advantage of this by owning a wide variety of assets and rebalancing annually.

5. All else being equal, the lower your costs, the higher your net returns. You should use the lowest-cost vehicles available: ETFs and Vanguard mutual funds.

6. You can further enhance your net returns by tax-managing your portfolio. Hold your

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The Oxford Portfolioby Alexander Green

REVIEW

Our Oxford Trading Portfolio continues to out-perform. As I write, every position is profitable, with gains as high as 230%.

As the market has climbed, however, so have valu-ations. The S&P 500 – which has traded at an average of 16 times earnings over the last 75 years – is now selling for 21 times earnings.

That may seem rich, but if earnings move sharply higher in the months ahead – as I expect – investors will look back on these valuations as reasonable.

Recognize too that not all stocks are terribly expen-sive. Take Rio Tinto (NYSE: RIO), for example.

Based in London, Rio Tinto is one of the world’s leading global mining and metals firms. Employing over 55,000 people across more than 40 countries, it operates open pit and underground mines, mills, refineries, smelters, and power stations, including a significant hydropower portfolio.

Rio also owns and operates much of the infra-structure – railways, ships and ports – that takes its products to major customers.

The firm supplies minerals that are indispensable to fueling economic development and maintaining our modern standard of living.

What Rio unlocks from the earth is inside the buildings you live and work in, the planes you fly on, the bridges you drive over, and the computers and smartphones that keep you connected.

Construction, communications, transportation, recreation, healthcare and renewable energy – among many other industries – all rely on what Rio Tinto supplies.

In recent months, the company has benefited from rising copper, zinc, tin and coal prices. But nearly 70% of Rio’s earnings are generated from iron ore. And here we have seen particularly dramatic change.

The price of iron ore crossed $80 a metric ton in December. That means it was up 85% from the previous year.

The rally has been attributed to growing infra-structure growth in China. And while that is true, it’s not the whole story.

The stock market rally we’ve seen since the election has been fueled by investors’ conviction that President Trump will simplify the tax code, slash the world’s highest corporate tax rate and remove burdensome business regulations to help reignite the economy.

A stronger economy would boost the construc-tion industry. That would increase the demand for steel. And iron ore is the key ingredient.

Let’s also recall that Trump has promised to spend $1 trillion to upgrade the nation’s highways, ports, bridges, tunnels and airports. That would require still more steel... and hence more iron ore.

So the improved prospects for commercial metals clearly justify the price move in Rio Tinto. Rio is hard at work pursuing production growth, too.

Last May, it committed to a $5.3 billion expan-sion of a Mongolian copper mine. Nearly 80% of the project’s minerals lie deep underground. The planned mine will have 125 miles of underground tunnels and be three times as deep as the Empire State Building is tall.

It will soon be the world’s third-largest copper mine and could eventually account for up to a third of the Mongolian economy. That should help boost Rio’s already ample 3.7% dividend here.

History shows that in a mature bull market, it pays to favor value stocks over growth stocks, large caps over small caps, dividend payers over nondiv-idend payers, and inexpensive international firms over expensive domestic ones.

Rio Tinto meets all these criteria – and belongs in your portfolio.

Further to RunI also like the prospects for PVH Corp. (NYSE: PVH).PVH is one of the world’s largest apparel

companies, selling its well-known brands through retail stores, discount outlets, wholesale channels and websites in more than 40 countries.

Its brands include Geoffrey Beene, Kenneth Cole New York, Sean John, Izod, Arrow, Warner’s, Olga, Van Heusen and Speedo.

However, the company was transformed through its acquisitions of Calvin Klein in 2003, Tommy Hilfiger in 2010 and Warnaco – which controls Calvin Klein’s two largest apparel categories, jeans and underwear – in 2013.

Annual sales now exceed $8 billion. And the Calvin Klein and Tommy Hilfiger brands represent more than three-quarters of the business.

Of course, clothing retailers have not enjoyed the best of times recently. But a few key facts may help put things in perspective:

• Many shoppers have simply switched from brick-and-mortar stores to the internet.

• Annual garment sales – at more than $1.4 trillion – are still rising.

• The world population is growing by 75 million people a year.

• Discretionary income is increasing in the world’s emerging markets, home to 85% of the world’s population, of which 90% is under the age of 30.

• Industry research shows these newly affluent consumers are drawn to the cachet of global brands.

PVH understands this. Fifteen years ago, its sales came almost exclusively from North America. Today it owns significant businesses in Europe, Latin America and Asia. Emerging markets already represent more than 20% of its annual operating income. They will be a much larger part in the years ahead.

PVH recently reported quarterly results and – as in each of the last seven quarters – it handily beat expectations.

Yes, management offered lackluster guidance for the current quarter. But I’m not buying it.

The easiest way for a company to beat the con-sensus earnings estimate is by setting the bar low. Offer a conservative forecast, and then watch everyone applaud when profits come in ahead of expectations.

Yes, sales at PVH grew only 3.7% last quarter. But that’s almost entirely due to the dollar hitting a 14-year high. Exclude foreign exchange rates, and Tommy Hilfiger sales surpassed that rate and Calvin Klein sales nearly tripled that rate.

Chief Executive Emanuel Chirico also groused that the company’s U.S. stores in international tourist locations haven’t seen significant improvement.

But that too is a reflection of the upward move in the dollar – a strong greenback makes it more expensive for foreigners to visit and spend in the U.S. – and, besides, these stores are a small part of total sales. The vast majority of the company’s merchandise sells through department stores, through discount retailers and online.

So I remain optimistic. PVH should earn $6.85 a share this year and $7.40 in 2018.

With the company selling for less than 13 times prospective earnings, it remains attractively priced... and poised to move higher still.

Poised for Even Greater GainsI also remain bullish on PayPal (Nasdaq: PYPL).

Spun off from eBay (Nasdaq: EBAY) in 2015, PayPal is not a bank. But it offers many of the services that people associate with banks: money storage, remittance payments, credit and debit cards, and even small business loans.

It has 192 million active customer accounts and operates in over 200 markets around the world, allowing customers to pay (and get paid) in more than 100 different currencies.

PayPal holds more customer money than all but 20 U.S. banks: over $13 billion. Yet PayPal doesn’t have the regulatory headaches and costs of the banking industry.

PayPal is at the forefront of the digital payments revolution. The company allows consumers and

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businesses to securely transact with each other online and – using mobile devices – in stores.

Just as Apple didn’t need to become a wireless carrier to launch the iPhone, PayPal doesn’t need to be a financial institution to revolutionize banking.

Its free Venmo app, for example, allows users to transfer money without using a bank. It is perhaps the most visible example of something resembling a cashless society.

PayPal customers can easily access their money and safely move it. They can send money in the U.S. or abroad, make donations to a cause, and even pay over time with PayPal Credit, a reusable credit line without the plastic.

The firm is a huge beneficiary of the growing use of smartphones. In 2015, 28% of the 4.9 billion payments PayPal processed were made on a mobile device.

Anyone can establish an account with PayPal for free. To sign up, you simply enter your name, address, phone number and email address, and then link your favorite credit or debit cards.

When you make a transaction on one of the millions of websites that accept PayPal, you don’t have the hassle or risk of filling out your personal information.

Instead, you simply enter your username and password, and press a button to complete the transaction. The vendor receives payment but never gets your credit card information.

PayPal’s next-level encryption keeps transac-

tions fully secure from start to finish. It thwarts fraudulent transactions. And if there is a problem, PayPal will put a hold on your funds until the issue is resolved.

When an online vendor offers payment process-ing through PayPal, it provides instant credibility. You know you won’t have to turn over sensitive financial data – and the transaction will be quick and easy.

In the most recent quarter, earnings at PayPal rose 11.3% on an 18% increase in revenue.

But thanks to recently announced partnerships, those earnings should jump in the year ahead.

For instance, PayPal reported its first deal with a major bank, Citigroup (NYSE: C), to expand customers’ payment options using its platform. (It reached similar deals with Visa and MasterCard early last year.)

Despite its nearly 200 million existing accounts, PayPal can tap into Citi’s customer base to reach a significantly larger audience. PayPal CFO John Rainey says the deal will allow the company to add “hundreds of millions of customers.”

Expect PayPal to strike similar agreements in the weeks ahead with more banks and other credit card companies in overseas markets.

Online payment processing may seem like a pedestrian business. But as people increasingly connect and transact online, future growth here is virtually assured.

PayPal remains attractive at current levels. n

Gone Fishin’ Portfolio... continued from Page 7

tax-inefficient assets – such as interest-paying bonds and dividend-paying real estate invest-ment trusts – in your tax-deferred retirement accounts. Hold your tax-efficient assets – like equity index funds – in non-retirement accounts. Doing this allows you to legally stiff-arm the IRS.

The Gone Fishin’ Portfolio is The Oxford Club’s most conservative strategy, allowing you to manage your serious money in a serious way.

With modest risk, low volatility and a high prob-ability of long-term success, the Gone Fishin’ Portfolio provides an excellent foundation for your investment program. n

p o r t f o l i o s , f e b r u a r y 2 0 1 7 11

THE OXFORD TRADING PORTFOLIO An active and diversified portfolio of the market’s most compelling opportunities.

COMPANY/SYMBOL REC. DATE REC. PRICE CURR. PRICE RATING TRAILING STOP TOTAL GAINS

American Water Works (NYSE: AWK) Apr-16 $68.59 $71.35 Buy $62.94 5.7%

Check Point Software Technologies Ltd. (Nasdaq: CHKP)

May-14 $66.96 $87.20 Buy $67.24 30.2%

Diageo PLC (NYSE: DEO) Mar-09 $49.80 $106.56 Buy $91.34 160.0%

HealthEquity (Nasdaq: HQY) Nov-16 $36.75 $42.96 Buy $33.49 16.9%

iShares MSCI Emerging Markets Fund (NYSE: EEM)

Nov-15 $35.94 $35.91 Buy $28.33 3.2%

Laboratory Corp. of America (NYSE: LH) Oct-15 $118.29 $130.73 Buy $105.74 10.5%

Match Group (Nasdaq: MTCH) Dec-16 $17.49 $18.15 Buy $14.11 3.8%

Owens & Minor Inc. (NYSE: OMI)† Nov-09 $28.65 $36.04 Buy $30.24 48.6%

PayPal (Nasdaq: PYPL) Jun-16 $39.06 $41.40 Buy $33.11 6.0%

Philip Morris Int’l (NYSE: PM)† Mar-09 $35.63 $91.31 Buy $76.05 230.3%

PVH Corp. (NYSE: PVH) Feb-16 $66.41 $92.26 Buy $85.47 39.1%

Rio Tinto PLC (NYSE: RIO) Mar-16 $26.84 $38.36 Buy $31.59 48.6%

Ryanair (Nasdaq: RYAAY) ADR Jun-15 $69.74 $83.28 Buy $65.73 21.8%

Target (NYSE: TGT) Mar-14 $56.62 $71.43 Buy $62.01 35.6%

TJX Companies (NYSE: TJX) May-12 $41.09 $76.10 Buy $61.93 93.4%

WisdomTree Japan Small Cap (NYSE: DFJ) Feb-10 $39.90 $63.83 Buy $47.93 75.8%

Note: We do not use our 25% trailing stop in this portfolio. Instead, a sell recommendation will be triggered if a company misses the quarterly consensus earnings estimate by 25% or more – or if we believe the company’s business prospects have changed for the worse in some fundamental way.

Note: If a “Buy” recommendation pulls back to within 5% of our protective stop, we routinely move it to a “Hold.” If the stock resumes its upward climb, we will move it back onto our “Buy” list.

THE TEN-BAGGERS OF TOMORROW PORTFOLIO A select group of more speculative stocks with the potential to rise tenfold... or more.

COMPANY/SYMBOL REC. DATE REC. PRICE CURR. PRICE RATING TOTAL GAINS

Accelerate Diagnostics (Nasdaq: AXDX) Sept-16 $22.33 $20.35 Buy -8.9%

Glaukos (NYSE: GKOS) Dec-16 $34.10 $38.35 Buy 12.5%

Intrexon Corp. (NYSE: XON) Feb-17 New New Buy New

Kite Pharma (Nasdaq: KITE) Oct-16 $55.10 $51.99 Buy -5.6%

Opko Health (Nasdaq: OPK) Aug-16 $9.89 $9.31 Buy -5.9%

Proofpoint (Nasdaq: PFPT) Oct-16 $74.56 $78.73 Buy 5.6%

12

Note: The All-Star managers make buy and sell decisions within these securities themselves. We do not use trailing stops here.

Note: The Gone Fishin’ strategy requires annual rebalancing and does not require the use of trailing stops. These prices do not reflect dividends.

† These stocks belong to the Escape Hatch Portfolio. To learn more and to view the portfolio (including the ETF equivalents of the Vanguard mutual funds), visit www.oxfordclub.com/escape-hatch.

^ Adjusted buy price based on averaging down on March 1, 2016, at $63.29.

Prices as of 1/9/17 | Note: For the absolute latest updates on all of The Oxford Communiqué’s portfolios, visit our website at www.oxfordclub.com.

The Oxford Club, LLC provides its Members with unique opportunities to build and protect wealth globally under all market conditions. We believe the advice presented to Members in our published resources and at our seminars is the best and most useful to global investors today. The recommendations and analysis presented are for the exclusive use of Members. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not secure future results. Recommendations are subject to change at any time, so Members are encouraged to make regular use of our website, www.oxfordclub.com.

© 2017, The Oxford Club, LLC I 105 W. Monument St., Baltimore, MD 21201 I 800.992.0205

CEO & Executive DirectorChief Investment StrategistChief Income StrategistEmerging Trends StrategistEditor-in-Chief

Julia GuthAlexander GreenMarc LichtenfeldMatthew CarrAndrew Snyder

Editorial Ops. DirectorManaging Copy EditorEvent DirectorDirector of ResearchArt Director

Amanda HeckmanAnne MathewsSteven KingRyan FitzwaterAlison Kassimir

Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the membership agreement and any reproduction, copying or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of The Oxford Club, LLC. Information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. You and your family are entitled to review and act on any recommendations made in this document. The Oxford Club expressly forbids its writers from having a financial interest in any security they recommend to their readers. All Oxford Club employees and agents must wait 24 hours after an internet publication and 72 hours after a publication is mailed before taking action on an initial recommendation. The Oxford Club does not act as an investment advisor, or advocate the purchase or sale of any security investment. Investments recommended in this newsletter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Basic dues for subscribers to The Oxford Communiqué (USPS 008-575) are $149 a year. The issue is published monthly by The Oxford Club, LLC, 105 W. Monument Street, Baltimore, MD 21201. Non-U.S. dues are higher and vary from country to country. Periodicals’ Postage Paid at Baltimore, MD and additional mailing offices. POSTMASTER: Send address changes to The Oxford Communiqué, 105 W. Monument Street, Baltimore, MD 21201. For questions regarding the status of your mem-bership, call Member Services at 443.353.4056. Our website is: www.oxfordclub.com.

THE OXFORD ALL-STAR PORTFOLIO A diversified basket of funds and holding companies managed by some of the world’s top-performing money managers.

COMPANY/SYMBOL REC. DATE REC. PRICE CURR. PRICE RATING TRAILING STOP TOTAL GAINS

Berkshire Hathaway B Shares (NYSE: BRK-B) Jan-01 $44.58 $162.02 Buy None 263.4%

Equity Residential (NYSE: EQR) Jul-01 $28.05 $64.47 Buy None 266.7%

Icahn Enterprises L.P. (Nasdaq: IEP)^ Nov-13 $78.23 $61.56 Buy None 3.3%

Markel Corp. (NYSE: MKL)† Jul-15 $789.45 $901.00 Buy None 14.1%

Templeton Dragon Fund (NYSE: TDF) May-02 $9.20 $16.86 Buy None 381.3%

Templeton Emerg. Mkts. Fund (NYSE: EMF) Jan-02 $8.80 $12.47 Buy None 233.9%

THE GONE FISHIN ’ PORTFOLIO A simple but sophisticated long-term investment system based on a Nobel Prize-winning strategy.

COMPANY/SYMBOL REC. DATE REC. PRICE CURR. PRICE RATING ALLOCATION TOTAL GAINS

Vanguard Small Cap Index (NAESX) Apr-03 $15.12 $62.23 Buy 15% 354.8%

Vanguard Total Stock Mkt. Index (VTSMX) Apr-03 $19.59 $56.81 Buy 15% 233.6%

Vanguard Emerg. Mkts. Index (VEIEX) Apr-03 $7.26 $23.13 Buy 10% 308.1%

Vanguard Europ. Stock Index (VEURX) Apr-03 $14.89 $26.07 Buy 10% 160.8%

Vanguard High-Yield Corp. Fund (VWEHX) Apr-03 $6.02 $5.87 Buy 10% 89.0%

Vanguard Inflation-Protected Securities Fund (VIPSX)†

Apr-03 $12.09 $13.06 Buy 10% 60.1%

Vanguard Pacific Stock Index (VPACX) Apr-03 $5.56 $11.43 Buy 10% 165.9%

Vanguard Short-Term Investment (VFSTX)† Apr-03 $10.82 $10.65 Buy 10% 43.4%

Vanguard Prec. Metals & Mining (VGPMX)† Apr-03 $9.98 $10.13 Buy 5% 184.2%

Vanguard REIT Index (VGSIX) Apr-03 $12.08 $27.74 Buy 5% 232.2%