A Major Change to Steve's Bullish Thesis
A major change to Steve's bullish thesis... The 'Melt Up' goes global... Your last chance to tune into tonight's can't-miss event... In the mailbag: P.J. O'Rourke responds to several readers...
Today, we're turning it over to Sjug...
This week, our colleague Steve Sjuggerud has been sharing the latest on his "Melt Up" thesis.
As regular Digest readers know, this is Steve's prediction that an explosive final inning of the long bull market will send stocks to unbelievable new heights.
Earlier this week, Steve explained why he believes the Melt Up has already begun... and why stocks could still soar dramatically higher before it ends.
Today, he'll tell you about a new twist to his prediction. Read on to see why he now believes one particular group of stocks could soar far more than any other in the months ahead...
A major shift in my 'Melt Up' thesis...
Yesterday, I (Steve) showed you the "Melt Up" is here in the U.S. And it's happening just like last time...
Remember, the tech-heavy Nasdaq Composite Index soared during the last Melt Up. And tech stocks are leading the way again.
Some of the biggest winners have been the so-called "FANG" stocks...
Jim Cramer of financial-news network CNBC first coined the term to describe the market's big winners of 2015...
The FANG stocks are Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Google parent company Alphabet (GOOGL) – a handful of the most exciting tech companies in the world.
The overall S&P 500 ended 2015 with a small 1% gain. FANG stocks ended the year up 83%, on average. And they're showing the same great performance so far in 2017...
The S&P 500 is having a great year – up almost 10% so far. But FANG stocks have more than tripled that return. They're up more than 30% on average in 2017...
This is another sign that the Melt Up is in full force in the U.S. But it's not just happening here at home.
Recently, there has been a major shift in my Melt Up thesis.
The Melt Up that's happening in the U.S. is crossing borders.
The Melt Up has officially gone global...
It turns out, the "big idea" in this Melt Up isn't limited to the U.S. FANG and technology stocks are leading the market higher in the U.S. And the same thig is happening overseas.
This is exactly what happened during the last Melt Up. The charts below show it better than I can write.
First, let's take a broad look. The chart below is the S&P 500 compared with the Nasdaq during the mid-to-late 1990s...
As you can see, these indexes tracked each other almost perfectly for most of the 1990s. Stocks in general rocketed higher, and the S&P 500 and Nasdaq moved in unison.
But that changed in mid-1998.
This, of course, is when the Melt Up began. The Nasdaq began to outperform... and ended up crushing the S&P 500's return over the next 18 months...
Now, the S&P 500 did fine. Investors in the overall market made money... But the big profits came in the tech-heavy Nasdaq. And I believe a similar breakaway is starting, right now, in a certain group of international stocks.
This is a group of exciting and high-growth companies. The kind we would expect to soar in a Melt Up.
These stocks have a history of tracking their overall market... just like the Nasdaq tracked the S&P 500 through most of the 1990s.
But recently, that has changed...
Over the last few months, this exciting group of stocks has dramatically outperformed. Take a look...
This is exactly what things looked like at the end of 1998. The Nasdaq began to outperform... And the eventual move was a 200%-plus gain in around 18 months.
We're seeing a similar setup right now, outside of the U.S. I believe this is the beginning of the "Global Melt Up."
This means if you're invested only in U.S. stocks right now, you'll do well... But you'll likely miss out on the biggest winners.
Tonight, during my Melt Up briefing, I'll explain the whole story. And I'll even tell you exactly how you can invest in this exciting group of stocks – absolutely free – just for showing up.
I hope you'll join me. Tune in by heading to MeltUpBriefing.com at 8 p.m. Eastern time.
New 52-week highs (as of 6/28/17): American Express (AXP), Allianz (AZSEY), Alibaba (BABA), CBRE Group (CBG), Quest Diagnostics (DGX), Fidelity Select Medical Equipment and Systems Fund (FSMEX), Global X MSCI Greece Fund (GREK), PureFunds ISE Mobile Payments Fund (IPAY), iShares U.S. Home Construction Fund (ITB), Nuveen Preferred Securities Income Fund (JPS), Monsanto (MON), Tencent (TCEHY), U.S. Concrete (USCR), Wabtec (WAB), and Weight Watchers (WTW).
In today's mailbag, feedback on P.J. O'Rourke's "farewell" column... and comments on "inept" central bankers. As always, send your notes to feedback@stansberryresearch.com. Good, bad, or ugly, we read them all.
"Hey P.J., I haven't been so moved by a departure since Calvin & Hobbes walked off into the sunset. Good Luck!" – Paid-up subscriber Ed
P.J. O'Rourke comment: A high compliment indeed! I, too, am still mourning Calvin and Hobbes... especially Hobbes, since I continue to have Calvin (me) around the house.
"I have enjoyed PJ since reading Eat the Rich years ago... hilarious! When working in London for a couple of years, I tried to describe the culture of the folks I worked with (engineers) to Yanks. The best way I could describe it was a comparison to the game 'Whack A Mole.' When a young person started sticking his/her head above ground and asking about (TV Tax, Congestion Charges, etc.) he/she got bopped. Eventually they stopped sticking their head up and created personal events that they could work out to gain self-esteem within their stratum. Really good folks with little/no desire to elevate their economic level via further education and once employed (because they might get bopped!).
"There is humor in tragedy. My rules of sanity are:
- Nothing is fair
- Nothing is easy
- Nothing is quick
- Nothing is humorless
"And usually events can fall into multiple categories. At the end of every day, I can categorize and file events into the appropriate categories and clear the registers. Let the new day bring on new events! Best Wishes to PJ and I look forward to more humor." – Paid-up subscriber H.P. Rumph
P.J. O'Rourke comment: Couldn't agree more! And leftism has its Whack-A-Mole aspects, too. Throw the lefties out the door of economics and they come in the window of environmentalism. Throw them out the window and they come down the chimney of global warming. Burn them out of the chimney and they crawl into the basement of identity politics.
"Nice, loved it sorry to see him go... I worked on the Volga Don canal for the International Atomic Energy Agency at the Volgodonsk Nuclear Plant, a few years back. It is near the Volga Don Canal. The canal was built in something like 1950. In talking with the other team members, some from former Soviet client states, I asked how the Soviet Union could have spared the manpower, resources and equipment to dig such a canal so soon after the war. The area had been devastated. Volgograd nearby, used to be called Stalingrad.
"An Austrian fellow explained it best. His uncle was among many who were picked up by the Soviets after the war. He was not a soldier or Nazi. They were put to work in labor camps building such things as the canal and generally were never heard from again. I believe it is approximately right that only about 5000 of the 105,000 German troops captured at Stalingrad were ever returned to Germany. I speculate that such soldiers were also put in work camps. Many of the brilliant engineering projects conducted by the Soviet miracle state were performed with slave camp labor from conquered nations. Just wanted to add some ruffage to your memories of the cruise on the Volga Don canal. Best regards." – Paid-up subscriber Randy Sullivan
P.J. O'Rourke comment: It's a good, but sad point you make, Randy. That old Marxist lady would have been a lot sharper if she had looked over the side of the boat and said, "And where do they get all the slave labor?" Of course, if she had been sharper, she wouldn't have been a Marxist.
"O'Rourke is so correct about this: The Democratic politicians who passed Obamacare and the Republicans who are trying to replace Obamacare are all telling us that we can increase the amount of medical treatment, increase the number of people who receive medical treatment, and decrease the total cost of medical treatment. These statements for various planned spanning go back as far as Reagan at least." – Paid-up subscriber James D. Smith, MD
P.J. O'Rourke comment: Dr. Smith, I'm going to you next time I feel sick. And I'm paying in cash!
"Please keep PJ's column, even if only 3 or 4 times a year. I know about the magazine. Still want the column. It is great. Thanks." – Paid-up Stansberry Flex member David Schneider
P.J. O'Rourke comment: Thanks, David... I'm sure hoping Porter will invite me to come play in his Digest now and then!
"Happy Trails PJ! We will cross paths again. I [also] wanted you all to know how I feel about Ben Bernanke, as he is profiled in my screen play: Wall Street, Money never seeks Revenge. Now Affluent Gecko seeks out who caused the greatest transfer of wealth from Main Street to Wall Street. Profiled is the truly inept Ben Bernanke, biggest Treasury Secretary crook in history Hank Paulson, his likely prison compadre Chris Cox, and all the truly hopeless Bush Administration officials. I even go into details about how Angelo Mozilo was the first to package tiny mortgage turds into CDO's and sell them on Wall Street. I know it was him; Countrywide [had] the biggest sub-prime market in this country. I played golf with one of his mortgage Brokers in '04. Everything he told me made me laugh hysterically. Obviously he was a mortgage broker who had never heard of Thomas Bayes and didn't even know what Bayes' Theorem is. It's the cornerstone of my Master's degree. If Oliver Stone produces this one, he'll get hit with about 150 lawsuits. But it's a great story and even Porter will like it." – Paid-up subscriber Craig R.
"When I heard Yellen say we'd not see another 2008 in our lifetimes, my thought immediately [was] that's the definition of 'irrational exuberance.' Just how irresponsible and out of touch can the Fed chairwoman get?" – Paid-up subscriber Bill Volz
Regards,
Justin Brill
Baltimore, Maryland
June 29, 2017