2013 Report Card Part II: Trading Services...

Stansberry & Associates Hall of Fame
(Top 10 all-time, highest-returning closed positions across all S&A portfolios)

Madness has hit this area of the collectibles market...

Editor's note: Many Digest readers recognize Van Simmons' name. The co-founder of Professional Coin Grading Service is one of our go-to sources for information on the coin and collectibles markets.

Van recently returned from Las Vegas, where he attended the world's largest gun show. He shares his thoughts below...

Last week, I (Van Simmons) went to the gun show in Las Vegas, which is the largest annual antique firearms show in the world... It has been around for about 50 years. And people come from all over the world just to buy the finest firearms. It's not unusual to see a shotgun sell for $200,000 or $300,000.

I've always been a collector of old Colts, Winchesters, and World War I and World War II firearms. I saw things like a Winchester Model 61, which is a little pump rifle in .22 magnum, which they only made for a couple of years, 1961 to 1964. [They] used to be $250 to $300. I say "used to be." That would have been 25 or 30 years ago. I saw one sell there at $4,850. And expensive guns – like Winchester 1886 lever action .45-70 rifles – in brand-new condition, never fired. But I saw an 1886 that cost $7,000 or $8,000 15 years ago sell for $35,000.

What has happened to that market is the same thing that has happened to the high-end part of the coin and art markets... People with a lot of money can walk into a room like that and say, "You know, I'd like to dump $10 million or $20 million." They're buying serious items... It has gotten to the point where there are four or five buyers for every good product that comes along.

It used to be the biggest money had always been in the old double-barrel shotguns, like the English brands Purdey, Holland & Holland, and even some Brownings. But a Browning Olympian, which is a bolt-action rifle, used to cost $2,500 to $3,000. Now, it's $12,000 to $15,000 for the larger calibers.

– Van Simmons

Madness has hit this area of the collectibles market...

Collectibles expert Van Simmons just returned from the world's largest gun show in Las Vegas... He shares his observations from the show in today's Digest Premium.

To continue reading, scroll down or click here.

Stansberry & Associates Top 10 Open Recommendations
(Top 10 highest-returning open positions across all S&A portfolios)

As of 01/23/2014

Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any S&A publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.

Madness has hit this area of the collectibles market...

Collectibles expert Van Simmons just returned from the world's largest gun show in Las Vegas... He shares his observations from the show in today's Digest Premium.

To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.

Our 2013 Report Card, Part II: Trading Services...

Last week, I (Porter) explained a few reasons why other financial publishers don't spend much (or any) time reviewing the performance of their publications. If you haven't yet, I'd urge you to read it carefully.

Beyond giving you a window into the benefits and challenges of our own products, our annual Report Card review also helps you become a more knowledgeable consumer of all financial publications. I also hope it helps you see why many of your natural inclinations will lead you to the wrong newsletters... at precisely the wrong time.

Of course, we realize... there is no such thing as teaching. There is only learning. We're merely doing our best to provide you with the tools we'd want if our roles were reversed.

Last week's Report Card focused on our monthly investment newsletters... Today, we look at our trading services. With these publications, all the issues we discussed last week are magnified.

Many of the trading services you'll find on the market are produced by people who know little about how successful traders actually make a living. And in an overwhelming majority of the cases, these products are sold to people who have no ability whatsoever to trade successfully – and never will. Trading services, almost without exception, are devices where the greed of fools is fed the blathering delusions of idiots.

And people can't seem to get enough of them...

If you want proof that most people will believe anything they read... then you should review the trading services of our competitors. For example... for many years, the quality and integrity of the newsletter industry's trading services was best displayed by one competitor's "hot" options letter.

In this case, a "guru" editor told subscribers to "forget everything they may have heard about stock options." According to various studies, something like 90% of all speculative "naked" options like the kind this delusional guru was recommending to readers expire worthless. So you can understand why the guru wanted you to forget the obvious.

And apparently, many people did: Subscribers by the thousands paid huge annual sums to get the hot new option every Sunday evening. It was like watching lambs paying to be sheared.

What the advertisements about this service didn't mention was that the delusional guru only told his followers what and when to buy. He never bothered to tell anyone when to sell. You might have noticed that knowing when to sell is particularly important to any investor (or trader) who actually wants to make a profit.

Meanwhile, the guru's marketing manager decided that since there was no specific selling advice, the highest price the option reached would work just fine for its track record. Thus, this guy would claim (honestly, we might add) that anyone following his advice "had the opportunity" to make gains like 300% on specific options. After all, he did in fact recommend the option contract – the records show it clearly. And the records also show that the options contract did, in fact, go up in price (at least temporarily, while his followers were piling in, driving up the spread). So his readers did, technically, have the opportunity to make such gains.

Do I need to mention that almost none of the subscribers actually did?

At Stansberry & Associates Investment Research, we viewed such shenanigans with disgust. We even argued with the publisher in question, pointing out that all of the short-term profits generated by such marketing were sure to lead to trouble – not to mention the loss of every potential long-term subscriber who'd been suckered by the pitch.

Alas, such highly profitable publications are like catnip to most publishers. And as hard as it may be to believe, that "guru" is still in business. The product remains one of the most profitable in the entire industry.

Thus... allow me to give you a general warning... Most trading services that primarily seek out large returns and like to brag about their number of triple-digit winners will often end up costing you all of the money you keep in your trading account.

On the other hand, Wall Street's proprietary-trading desks make money nearly every day the market is open. The traders at Goldman, for example, are routinely profitable hundreds of days in a row. Clearly, they're making a lot of money.

You won't be surprised that the kind of trading they do is the exact opposite of the kind of trading being pushed by our delusional guru and by nearly all the trading services offered by the newsletter industry.

We, of course, set our business goals up differently than other publishers. We wanted to offer our readers the same advice and the same strategies the pros use successfully. We have no interest – no matter the potential financial rewards – of engaging thousands of suckers in a mass delusion.

Believe it or not... we care deeply about the outcomes of our advice. We want to help our subscribers achieve real, repeatable, and highly profitable outcomes. To achieve these goals, we actively sought out and recruited one of Goldman's former traders – Dr. David Eifrig.

As you can see in the chart below, Doc's trades in Retirement Trader have been profitable 97% of the time over the last two years.

At one point, Doc closed out 136 profitable positions in a row. Such safe, short-term (average duration of 84 days) strategies produce lots of "singles" – Doc's average gain per trade is a little less than 10%. But by using safe amounts of leverage, the annualized return on Doc's portfolio was 40%.

I hope you'll notice the incredibly low volatility of Doc's portfolio. The results are amazingly uniform – just steady singles, one after the other – almost no risk, almost no volatility. There's nothing to get excited about... just making huge annual profits one safe trade at a time.

In my view, this is the only kind of trading that's likely to lead to positive results for subscribers over time. Thus, when I'm evaluating our trading services, I'm basing my evaluation on Doc's ideal trading. We want to see short durations, a high winning percentage, great annualized results, and low volatility. These are the kind of trades that lend themselves to margin trading. And just as in real estate, it's the leverage – using borrowed capital – that really creates the profit for traders.

All the other stuff is just nonsense.

So without further rigmarole, here's how we did over the past two years with our trading services:

The publications have been ranked in the chart according to annualized results. The clear goal of trading is to produce as many quick profits as possible, which allows trading accounts to grow quickly through compounding.

True Wealth Systems: A

Judged purely on the outcome, Steve Sjuggerud and Brett Eversole were the winners over the past two years.

As you may know, True Wealth Systems is an advisory service Steve and Brett launched based on sophisticated, computational models. Steve, along with a PhD in mathematics and several analysts, spent years and nearly $1 million building custom analysis software, a back-testing program, and a charting program. And he has constructed safe, successful trading systems using these incredible tools. The result is a high-end trading service based on decades of Steve's financial knowledge.

The computers follow virtually every market in the world and alert Steve and Brett when a tradable "setup" is triggered. These signals reflect strategies that Steve has traded personally over many years as a broker, mutual-fund manager, hedge-fund manager, and newsletter editor. The computers have back-tested these strategies rigorously, and Steve recommends action when the statistics back up his instinct.

Two things about this approach will always make it a lot different than Doc's super-safe trading.

First, the computers only care about total return. They don't care about winning percentage or volatility. They don't care about duration. They're simply designed to find situations where, on average, the results are likely to be extraordinary. (Steve can give you the historic odds on all of the trades before you enter them.) Steve's results show plainly the old trading adage is true: You can make a lot of money being right about half the time.

Secondly, I said earlier that you make your money in trading by using leverage (margin). But as I'm sure the sharp-eyed among you noticed, we did not publish an annualized return on margin for True Wealth Systems. That's because the leverage Steve and Brett employ comes within the securities they are trading. For example, they use leveraged exchange-traded funds (ETFs). With these securities, the fund manager has already provided the leverage necessary to amplify the gains. And that's great for the average individual investor. For institutions, it's easy to trade on a leveraged basis in the futures markets and achieve essentially the same results (or better).

For investors with the emotional reserve and patience necessary to withstand small losses, there's simply no doubt that True Wealth Systems is proving to be our best trading advisory. I also want to compliment Steve and Brett on the usefulness of their service. Making 33 recommendations over two years provides a nearly perfect balance for our readers between giving them enough action (providing enough trades to put a meaningful amount of capital to work), while not overwhelming them with too many trades to follow.

I withheld an "A+" here for only one reason. A winning percentage of only 52% is going to be nerve-racking for subscribers. It's likely that sooner or later, a reader following this service is going to experience a substantial drawdown, where the value of his trading portfolio drops meaningfully.

I understand this is how the system works. The computers have been fine-tuned. If we were to reduce the number of small losses, we would also greatly reduce the number of trades and, therefore, the number of big winners. So even though I understand why such losses are part of the system, I know that experience is tough on people – especially folks who aren't familiar with the nature of purely empirical trading.

Stansberry Alpha: A+

Steve will, no doubt, give me a lot of grief about giving the trading service that I run with Brett Aitken a better grade than True Wealth Systems, despite having a much lower annualized return.

After all, didn't I say that with trading, all that really matters is the annualized figure?

Yes, I did. But there's a wrinkle here that you've got to understand to see why the performance of Stansberry Alpha was extraordinary.

Stansberry Alpha takes advantage of an anomaly that you find in the options markets. For some reason, people are willing to pay more for put options (contracts that make a profit when stocks go down) than they are for call options (contracts that go up in value when stocks go up). It's simply a bias of human nature: People will spend more on insurance to protect what they have than they will on a speculation to earn what they don't have yet.

We simply look for particularly wide spreads between put and call options on the stocks we already like for fundamental reasons. The anomaly provides us with a safer way to buy the stocks we like... and allows us to make a lot more than we would by just buying the stock outright. Yes, you read that correctly: We take less risk and have the potential to make bigger returns using this strategy.

One simple example might help you understand how this works.

We were bullish on the shares of the engineering firm Chicago Bridge and Iron (CBI) because the company is building out liquefied natural gas (LNG) infrastructure around the world. We're convinced the U.S. will soon produce a lot more natural gas, gas that will need to be exported all around the world. So the next decade should see a boom for CBI.

A few months after we recommended the stock, the company announced it was buying a competitor – Shaw, another global engineering firm. This would greatly increase CBI's backlog and get it into lots of new markets around the world. We studied the deal. We liked the price. And we expected the market would send the shares higher. But...

The opposite happened. Traders sold CBI down about 10% on the news. For us, this was a major bullish opportunity. We wanted to be exposed to the upside in this stock... and we were willing to use margin.

So in November 2012, we sold a put with a $35 strike price. This contract required us to buy shares of CBI at $35 in January 2014 if the stock was trading for less than that on the open market. We were simply making a promise to other investors that no matter what happened with the Shaw deal (or in the market), we stood ready to pay $35 a share for 100 shares of CBI. That promise is called a put option. And it would expire in January 2014.

We got paid $470 – upfront – in exchange for that promise. That's $4.70 per share. Remember that each put option represents a contract for 100 shares.

Our total potential obligation on this trade was $3,500 – that's 100 shares of CBI at $35. Your broker will require you to keep at least 20% of this obligation in cash on hand. So using 20% margin, you would have to put up $700, or $7 per share.

Now... assuming we were right about the likelihood of CBI shares moving higher... when January 2014 came around and CBI's shares were above $35, that put option would expire worthless (as almost all of them do). You'd get to keep the entire $470.

On the margin of $700, you'd make $470 if CBI simply didn't decline by more than another 10% or so. That's a 67% return on margin.

And to make the trade potentially a lot better, we recommended that subscribers also buy a call option at a higher strike price. As you'd expect, the call options cost less than the put option – that's the "Alpha" anomaly we're always looking to trade.

In this case, the January 2014 $45 call option was going for $3.40 per share. As a result, we got a net credit, from Day 1, in this trade of $1.30 per share, or $130 in total. That cash was equal to 18.5% of our margin requirement.

Remember... all we had to put up, in cash, against this potential future liability was 20% of the strike price, or $7 per share ($700).

As you probably know, we were right about CBI. The shares soared. When we closed this trade in early June 2013, the call option we bought was worth $15.30 per share, and we were able to buy back the put option for only $0.33 per share. Our net credit then on this trade was $14.97 per share, or almost $1,500. Against margin of $700, that led to a 232.4% return on margin.

These trades work out nearly every time (86% win rate) for two simple reasons that most people simply don't understand. First, by selling a put that's "out of the money," we have a significant margin of safety. We only have to buy the stock if it drops substantially. And if that happens, it's always going to be trading at a price that we're very happy to pay. This is much safer than simply paying the market price for the stock.

Second, because of the "Alpha" anomaly, we always start out on these trades in the black. Selling the put always generates more cash than we need to buy the call option, which allows us an immediate net credit. Just imagine if every time you bought a stock, you started out with an immediate 18% profit. If you did that, you'd end up with a lot fewer losing positions, wouldn't you?

These factors allow us to employ leverage safely. And it's this leverage that juices your returns. You could have done these exact same trades without using any of your broker's money to guarantee the put options. But if you did that, your annualized return would have "only" been 27%. (By the way, earning 27% doing trading that's demonstrably safer than simply buying stocks isn't anything to sneeze at. The next time you're going to buy a stock, ask yourself why you're not doing an Alpha trade instead. You won't come up with a good answer...)

In short... I believe that in the case of both Doc's trading and our trading in Stansberry Alpha, the very high win rate and the low-risk nature of the trades lends them to using leverage.

By the way... the high volatility percentage you see on Stansberry Alpha's results is misleading. Our measure of volatility is based on the standard deviation of the returns. But with so few trades – 15 – we don't have a large enough sample size to get a lower standard deviation. The better test in this case is to simply know the size of the largest loss (36%) on margin. That is a significant loss... but it's not a blow-up.

Because our returns are so consistent and relatively low-risk, I believe the more appropriate measure of success at Stansberry Alpha is the leveraged return. That figure (135%) plus our 86% winning percentage is world-class. Few traders could report better results over the past two years.

If you see Brett Aitken at the Alliance meeting this fall or at our upcoming Stansberry Society events, be sure and say thanks. He has done a phenomenal job on this product.

Retirement Trader: A+

We've already discussed Doc Eifrig's incredible results, but I did want to draw your attention to the incredibly low volatility of his returns. The next safest trading service we publish (DailyWealth Trader) had a volatility that was nearly twice Doc's portfolio.

This consistency gives our subscribers the confidence to employ leverage in this trading strategy. Again... it's the leverage that boosts your profits in trading. This and maintaining short durations are the keys professional traders use to consistently make big money.

Using margin, Doc's gains are more than 40% annually. No other investors outside of Wall Street can produce those kinds of gains with a 97% win rate. Compounding your trading portfolio at his kind of pace will make you extremely wealthy over a reasonable period of time.

Subscribers who are inundated by the kind of crazy marketing claims that so many of our delusional competitors make about their trading results have probably grown immune to the kind of claim I can honestly make about Doc's trading: If you want to get rich as a trader, follow all of Doc's trades. It's really that simple.

DailyWealth Trader: A-

This service is the brainchild of Editor in Chief Brian Hunt.

The idea was pretty simple. Hunt knows all of our analysts and evaluates their work on a daily basis. His ability to absorb all of our company's editorial output is unmatched – by anyone else on our staff and, I'd bet, by any of our subscribers. His recall is simply absurd... which often causes me a lot of grief.

My phone rings. It's Hunt. "Ah, Porter... How's that prediction about such-and-such working out for you?"

"What are you talking about, Hunt?" I ask. I then calmly explain that I don't remember saying such a thing. Meanwhile, my face is turning red. A sense of panic is rising in my throat. I know what's coming...

Hunt says, laconically, without a trace of irony: "Well, you should try reading the stuff you write. Four years ago, you said that..."

Then, he proceeds to remind me that I got some major trend completely backward. Luckily, of course, he helped position our readers in the opposite direction through his "Market Notes" section of our free e-letter DailyWealth.

Hunt stays positive. He always ends these calls with an "atta boy" remark. "You know, Porter... if you make enough predictions... you're sure to get something right eventually."

Working with co-editor Amber Lee Mason, DailyWealth Trader racked up an incredible record over the last two years. Brian and Amber produced annualized returns at nearly a double-digit rate. But again, it's how these returns were earned that matter.

First, these trades were profitable 66% of the time. Just as important, the results showed incredibly little volatility. This combination allows leverage to be employed safely. And using margin, this service racked up annualized returns of almost 30%.

Brian and Amber showed subscribers how to book dozens and dozens of "singles" and "doubles." Over the last two years, they made almost 40 different recommendations that earned double-digit returns or better, often in less than 60 days. They make these consistent and reliable short-term trades by staying in touch with every analyst on our staff and watching the portfolios for the most timely recommendations.

These guys are very, very good at what they do. I get more positive feedback about their trading than just about any other product we publish. Unfortunately... I'm a pretty tough grader. To get a solid "A" instead of an "A-," I'd like to see the win percentage up above 75%. I know that's a tall order for frequent (300 recommendations!) trading, but that's the standard being set by our other products.

Phase 1 Investor: C

Phase 1 isn't really a trading service.

Editor Frank Curzio is a small-cap specialist. He has spent his entire career looking for those rare "undiscovered" situations where a small company is in the very early stage of a massive growth cycle. And he had some really big winners over the last two years – like Fission Uranium (122%), Ligand Pharmaceuticals (102%), and Human Genome Sciences (73%).

Unfortunately, like a few of our analysts, he got killed in gold stocks, taking sizeable losses on stocks like Sandstorm Metals, Centamin, Gold Standard, and Gold Resource. (I'm pretty sure I told him about Gold Standard. Sorry, Frank. That one is on me.)

The total combined result isn't terrible – a little less than 10% annualized. But making money on only half of these recommendations makes the service too unreliable in the minds of our subscribers. Given this kind of volatility and only a 50% win rate, I'd like to see much higher average results – like Steve achieved in True Wealth Systems.

My advice to Frank is to focus on the kinds of small companies whose results and growth aren't so directly tied to things like commodity prices where no amount of analysis is really going to give us an advantage.

By the way... if you're looking for an "up-and-comer"... do a little digging around one of Frank's new recommendations – Vringo (VRNG). It's up 21% today as I'm writing this note. Great job, Frank!

This review is painful for me to write.

I greatly admire Jeff Clark. When I met him almost 10 years ago, he'd flown out from California to meet me at my office in Baltimore. He walked in, told me he wanted to come to work for us because he'd read one of our Report Cards, and said he couldn't believe there was a newsletter publisher out there with so much integrity.

He'd built his own brokerage firm in California over the previous 20 years and has done very well for himself. He was ready to "retire," but wanted a vehicle to stay in the game and continue to help serve his clients. He just needed a job that would better accommodate his family. (Jeff is totally dedicated to his two sons, both of whom are at an age where time with their dad is extremely important.)

We started talking about stocks... and wouldn't you know it... he had almost all of the same trading positions I had in my account. Most notably, we were both short Martha Stewart Living, which at the time was a Wall Street darling, trading for around 10 times sales. I hired Jeff on the spot.

And then I did something I thought I'd never do again: I went forward with a product that would cover (and recommend) trading naked options. Buying calls and puts without hedging is the most risky kind of trading you can do. Given the spreads in the market between buy prices and sell prices and given the time premium you have to pay for these contracts, it's very hard to make money consistently with naked options. I'd never met anyone before who could make money trading naked options.

But Jeff proved to me that he could... And for many years, he consistently racked up substantial gains for our subscribers, hundreds of whom sent us letters testifying to Jeff's special genius.

Jeff really excels in what's known as "reversals." The time to buy a naked option (and the only time you can get a good price on one) is when the market is panicking, when everyone wants to sell... say, gold stocks. That's when Jeff is able to step into the market and pick up a few options that nobody else wants. Over many years, I've seen him step in front of the equivalent of roaring trains... and nearly always get the timing just right, reaping huge profits for our subscribers again and again.

But over the past two years, I'm sorry to say that Jeff has been on a losing streak of epic proportions. In the S&A Short Report, where Jeff recommends naked options (among other trades), his win rate fell to almost 40% and his average return was negative. Given the frequent and short-term nature of these trades, that produced an annualized result of -50%. I believe that's one of the worst outcomes we've seen in one of our products, ever. It's certainly the worst result we've seen in a product we planned to continue publishing. (We had a few real doozies in the early years before we learned to spot a delusional editor in only a few seconds...)

Before we discuss the changes we're going to make with the S&A Short Report, I need to comment on Jeff's results in his other, more conservative trading advisory, Advanced Income.

In this publication, Jeff trades options far more conservatively, using strategies like covered calls and selling puts to generate income. The trouble with such strategies is that they limit your upside. The result is, you don't get any big winners to cover any mistakes you make. That means, only one or two blow-ups can wipe out all of the safe trading you've done.

So even though Jeff made money here in more than three out of four trades – with very low volatility – his average result was still negative. But... and this is a big "but"... if you would have used a margin account with this service and sold puts using leverage, your annualized return would have been very good, 22.9%. So for most subscribers, I'm confident that Jeff delivered reasonably good results in Advanced Income.

I've still got to give Jeff a "C" for this Report Card because big losses using a covered-call strategy are hard to recover from. And unfortunately, Jeff had a handful of "humdingers" here, including a 91% loss in Golden Minerals, a 61% loss in Gold Resources, and a 41% loss in Iamgold (which, henceforth will always be known in our offices as "Iampyrite").

It was the gold stocks that crushed Jeff's trading in the S&A Short Report (including a 100% loss in an Iampyrite call option). In fact, if we had merely restructured the service a few years ago... and maybe renamed it the "The Anything But Gold Report"... we would have had a brilliant two-year campaign.

But of course, you don't get to only count your winning trades or products. It has been a tough slog for our subscribers and the many people around the world who have been following and trading alongside Jeff Clark.

While I still have confidence in Jeff's trading, I have always worried about recommending naked options. I know it's a difficult way to make money trading. It's a lot like Vegas. The spreads and the time premiums make it very hard to make money over time. But... there are lots of big wins along the way. If you can get enough of these big wins, you can make money in these markets. Jeff has done that historically. Just not lately.

We plan to encourage Jeff to combine his two services. We want him to focus on the lower-risk trading that he has been doing year-after-year in Advanced Income. We want him to hedge a far higher percentage of his trades. But we also want to give him the option to take the big bet at moments in the market when things become extremely unbalanced.

I believe by reducing the scope of his more-risky trading and by mixing in more-hedged positions, we'd greatly reduce the volatility of his trading and greatly increase the profitability.

Oh... and... let's lay off the gold trades for a while, OK?

Conclusion: It's Not the Big Trades That Matter.

If you can learn one thing from our efforts in the trading world, it's that being a successful trader is about developing a low-risk system that can deliver reliable results.

Having a low-risk system... racking up the singles and the doubles... and avoiding big losses will allow you to use leverage safely and profitably. That's how Wall Street's best traders make their money. That's how Wall Street banks develop hundreds of days in a row of profitable trading. The winning combination is extremely safe strategies and moderate levels of leverage.

Most individual investors approach trading in exactly the wrong way – in exactly the opposite way as we recommend. They are gamblers. They want to risk a small amount of money – usually $1,000 or less – in an effort to "hit the jackpot" with an options trade or a small stock that goes up 700%. While these trades are out there, you cannot reliably predict where (or when) they will occur. In the meantime, almost all speculative options expire worthless.

If you've not been successful as a trader, I'd ask you to analyze your results.

What was your winning percentage? If you're not making money on least 50% of your trades, you're unlikely to succeed.

And what about the volatility of your results? If you're not making consistent profits, you're not going to be able to use leverage. Yes, some approaches – like Steve's True Wealth Systems – can overcome a lack of leverage. But if you look carefully, the leverage is inside the vehicles Steve is recommending.

If you've never made money trading, I urge you to please do yourself a favor and read Doc Eifrig's Retirement Trader for a year. Learn the strategies. Watch how Doc is just aiming to make 4%-6% per trade... but very, very safely... and in a small amount of time.

As I mentioned at the beginning... if you want to learn to make big money trading, why not learn from the guy who used to make money for Goldman Sachs doing essentially the same trades?

In closing, I'd just like to express my sincere gratitude to the many longtime subscribers who have been with us for well over a decade now. We've weathered bull markets, bubbles, bear markets, panics, frauds, and even the feds. We've seen lots of "A+" results and a few painful "F"s, too.

Whatever happened over the years, I knew that as long as I told the truth and tried my best, you guys would stick with me. And one way or another, we'd keep going. That's exactly what happened. Thanks for keeping your end of the bargain.

I hope you know... I have enjoyed these years immensely. With you guys, I've learned far more about the markets than I could have imagined was left to discover.

You've given me the greatest job in the world.

Thank you. Thank you. Thank you.

Thank you for allowing me to build this incredible business, with all of these amazing people.

A quick aside...

For the past eight months, I've been working on a partnership with one of the most original minds I know... From the moment I met this guy, I knew I wanted to work with him.

He has started dozens of businesses... He has made millions of dollars... lost it. Then made it back again. He has written best-selling books. He has been quoted in almost every mainstream financial media outlet. And most importantly, he has inspired hundreds of thousands of people to "jump off the treadmill" and start thinking for themselves.

You may have read this gentleman's book, Choose Yourself. It was one of the best books we read last year... So we contacted the author and asked if we could offer copies to our readers. Based on the loads of feedback we received, you thought his book was as innovative and inspiring as we did.

I'm talking about James Altucher.

Maybe you read Choose Yourself. Or maybe you heard him as a guest host on Stansberry Radio. Like I said, I've been working a long time to partner with him. But we've finally reached a deal...

Tonight, for the first time, you can listen to James' new radio show – The James Altucher Show.

As I said above, James is one of the best-connected people I've met... He knows celebrities, billionaires, authors, and politicians... He spends time with some of the most powerful and interesting people in the world. And on his new radio show, James is going to ask these people how they became successes, why they did it, and what they plan to do in the future.

If you've ever wanted to start your own business... or even just start collecting some passive income from one of your ideas... you need to listen to this show. We'll have some of the brightest minds in business telling you exactly how they became successful.

James' first guest is a guy named Tucker Max. He's a best-selling author. And he basically reinvented the book-publishing model... He cut out the mainstream publisher, planned his launch, and published his book on his own.

To date, Tucker has sold nearly 3 million copies. And he's not paying huge fees to Random House.

On the first episode of The James Altucher Show, Tucker explains exactly how he did it. (He actually describes a formula you can follow to emulate his success.)

You can listen to the show on the Stansberry Radio webpage (www.stansberryradio.com/)... Or you can subscribe through iTunes here... to ensure you never miss an episode. It's absolutely free.

And just for signing up, we're also giving you a special gift from James... It's called The Choose Yourself Stories. It's a collection of stories and experiences from James' life that helped make him the successful entrepreneur he is today.

After you have subscribed to The James Altucher Show podcast on iTunes, simply send James an e-mail at james@stansberryradio.com, with the subject line "Podcast Subscriber," and James will send you his book.

We hope you'll learn a thing or two about business... and be inspired to follow some of his advice.

New 52-week highs (as of 1/23/2014): Aware (AWRE), Gladstone Capital (GLAD), SPDR International Health Care Fund (IRY), Ligand Pharmaceuticals (LGND), Union Pacific (UNP), and Vanguard Natural Resources (VNR).

Another subscriber writes in with his own appraisal of us... Send yours to feedback@stansberryresearch.com.

"What a pleasure to see an honest report card! So many times, we see analysts bragging about their one tiny successful recommendation and burying their many unsuccessful ones. When I see how thoroughly and objectively you report on all your publications it just makes me angry that I didn't have someone like you advising me years ago. Again – congratulations on a valuable and honest report." – Paid-up subscriber Charles Reed

Regards,

Porter Stansberry

Cabin Bluff, Georgia

January 24, 2014

P.S. If you've mastered the art of compounding your trading account by watching Doc... or if you've made huge profits using the Alpha anomaly that we pioneered... or if Steve's computers have put a few hundred extra "large" in your pocket, why not enjoy your success the way I do, catching huge blue marlin and delicious grouper in the Bahamas?

If you've got big trading gains to celebrate, there isn't a better way I can imagine than spending a week on a fishing yacht in the Bahamas. Don't worry about buying your own boat and finding a reliable crew... just use mine: http://www.twosunscharters.com/.