A stronger U.S. dollar?...

Making up the news to sell your product...

Marketing guru Ryan Holiday has put the cliché that "any press is good press" to the test.

In today's Digest Premium, he discusses fabricating news stories to make headlines...

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

A stronger U.S. dollar?... Why emerging markets are in trouble... A painful reckoning for Amazon... The U.S. energy boom is changing the world's economy...

The "long term" came to pass pretty quickly...

About three weeks ago, I (Porter) reiterated my bearish stance on the stock market. I warned that investors in stocks like online retailer Amazon were in trouble. I said… "I doubt those investors are going to do well over the long term."

Not a single Wall Street analyst has a sell rating on Amazon. Apparently, they haven't thought much about the questions I asked three weeks ago…

"Do you think a private company that's valued at almost $200 billion can really increase in value by 50% in a single year? Do you think that any private business – which must face constant competitive pressures – is really worth 56 years of operating cash flows or 150 years of earnings? Amazon – the most dominant Internet retailer in the world by a huge margin – produces a return on equity of only 1.5%. And yet investors are paying 20 times book value (today) to own this stock..."

Avoiding a stock that's already worth $200 billion… trades at 20 times its book value… earns less than 2% annually on that equity… and is up more than 50% in the last year isn't an intelligence test. It's a sanity check.

I hope you realize how crazy stock prices have gotten in some sectors of the market. Last month, 20 different securities made our Black List – that's our tally of stocks with market caps of more than $10 billion that trade for more than 10 times sales. That's a level of "froth" we haven't seen since the stock market's greatest-ever bubble in 2000.

There's simply no doubt in my mind that stocks are going to head down this year. Let's take today's Digest to review why I believe stocks are heading into a bear market and update you on some new ideas I have about what will drive stocks lower.

First... please allow me to quote extensively from my June 2013 newsletter:

I didn't know then – and I still don't know – exactly how these massive financial imbalances will get resolved. But we're seeing a huge surprise...

Emerging markets boomed throughout the 1990s and the 2000s. The massive expansion of the U.S. current account deficit – the imbalance of trade and finance between America and the rest of the world – fueled these markets.

In short, we Americans flooded the world with money. It was all funded by debt, of course. Most of these outflows resulted from America's massive oil needs. The result was a global, inflationary boom. Emerging markets that exported petroleum, like Brazil and Indonesia, felt the boom most of all.

The financial markets are nothing if not ironic and paradoxical. The U.S. spent the last 20 years desperately trying to bankrupt itself and pushing trillions of dollars into the world economy. Then, rather than paying back any of this money, it began to print trillions more to finance $1 trillion annual deficits in the wake of the 2008-2009 global financial crisis.

Doing so was unbelievably risky. If our current account deficits continued growing, it would have led to a massive global run on the dollar. That was the heart of my End of Americathesis.

But lo and behold... a crisis of a completely different sort is emerging. Despite running massive fiscal deficits, America has begun to export colossal amounts of energy. We've moved from exporting less than 1 million barrels per day of various types of refined crude and gas products to shipping out nearly 4 million barrels per day. We're now exporting more energy on a net basis than we're importing. That hasn't been true since 1949.

That has had a profound impact on our current account deficit, which is racing back to zero...

This reduction in dollar outflows from the U.S. has hit emerging markets hard. It's reducing liquidity, especially in places like Russia, Brazil, and Indonesia that rely on petrodollars.

But it's a global phenomenon, too, as many of the world's sovereign debt markets are mostly denominated in U.S. dollars (like Turkey). When these bonds were being issued in the mid-2000s, no one could imagine a world where the U.S. wouldn't continue to be a source of global liquidity. No one could imagine that the U.S. would begin to be a net exporter of energy – the world's most important commodity.

The result of these financial stresses is impossible to guess. But... I'll repeat what I warned you about last June. The world's economy isn't in a "normal" state. It has been blown about by credit bubbles in almost every major world economy.

The prices of many kinds of securities (stocks, bonds, credit default swaps, commodity futures, etc.) have been warped in a way that makes them very susceptible to massive swings. Margin debt was, until recently, at an all-time high for U.S. stocks, for example. Despite these real risks, stock prices have rarely been higher in the U.S. That's a dangerous combination.

However, I still think some stocks can outperform over the long term… No surprise, they're tied to the massive oil-and-gas boom currently underway in the United States.

We've been covering the shale boom for years… I doubt any other research firm has produced so much quality information on the phenomenon (or started its coverage as early).

Because of that, we've already made huge profits for our readers in the sector…

In my Investment Advisory, subscribers are up 51% on liquefied natural gas (LNG) exporter Dominion Resources. We made 113% on energy infrastructure firm Chicago Bridge & Iron. We're up 91% on propane exporter Targa Resources Corp… There are plenty more big gains, but you get the picture.

In my next issue (due out in a couple weeks), we're recommending another company poised to profit from the boom…

Next month, the U.S. government will open up the deep water off Florida's coast for drilling… It's auctioning the rights to drill a specific site. The oil majors are watering at the mouth to win this auction… The area holds an immense amount of oil… So much, estimates can't do the deposits justice.

We can't know which firm will win the auction or who will drill successful wells. But… we've found a company that supplies the infrastructure to these deep-water drillers.

Plus, this company is cheap… And the folks who control this company (one of the richest families in the world) is famous for treating shareholders well.

We're not releasing the story for another couple weeks, but to make sure you're the first to hear about this company…

You can sign up for a risk-free subscription to Stansberry's Investment Advisory… If you decide within the first four months of your subscription that the newsletter is not for you, call us for a 100% refund. To learn more about subscribing to my newsletter, click here.

New 52-week highs (as of 1/30/14): Denison Mines (DML.TO), Fluidigm (FLDM), National Fuel Gas (NFG), and Union Pacific (UNP).

In today's mailbag… one subscriber takes issue with our Report Card. And we hear from a happy listener to The James Altucher Show. Send your e-mail to feedback@stansberryresearch.com.

"I have a problem with the way you grade your analysts. I was stopped out (25% loss) on one of Doc' recommendations, one of his closed-end municipal bond funds. They were volatile, and I got in based on Doc's recommendation but at a bad time.

"All the time he was saying it was a strong buy. He doesn't have a 'buy up to price' [posted with his online portfolio] like some of the analysts. So if you get in higher than Doc's bought price, you can get stopped out and lose money. I cancelled his newsletter because of that. Be more specific with a buy-up-to price if you want to protect your subscribers." – Paid-up subscriber BY

Porter comment: You should go back and read the Report Card… 82% of Doc's recommendations in Retirement Millionaire were winners… And the average return was nearly 21%. How does that warrant any other grade?

"I listened to a James Altucher podcast from earlier this month, and he mentioned Vringo and their Google suit. I checked it out and purchased some VRNG at $4. The next day it opened over $5, and I closed with over 20% profits overnight. Thanks!" – Paid-up subscriber Pete Steitz

Porter comment: Vringo was a huge win for Frank Curzio and his Phase 1 Investor subscribers. And congratulations on finding a "backdoor" way in through Altucher's radio show.

If you haven't already signed up for James' podcast – The James Altucher Show – you can do so here on iTunes. It's the No. 1 podcast in the business category on iTunes.

Regards,

Making up the news to sell your product...

Editor's note: Today's Digest Premium is adapted from radio host James Altucher's conversation with Ryan Holiday. Holiday's book – Confessions of a Media Manipulator – was a New York Times bestseller. Today, Ryan is a marketing expert who has worked with dozens of famous clients, including entrepreneur Tim Ferriss and musician Curtis "50 Cent" Jackson. The following conversation is adapted from episode 86 of Stansberry Radio...

What I (Ryan Holiday) have realized is that the best way to be in the news is to make it up.

I study the history of news, and have an understanding of the economics of the news business. In my book – Confessions of a Media Manipulator – I talk about how you can do things that make the news.

A press conference is a news event. A launch party is a news event. Leaking something to the media is a news event.

It's sort of constructing this narrative. There's actually a media theorist, Daniel Boorstin, who calls it the "pseudo-event."

I have personally done some crazy things to get in the news. I have faked lawsuits. I tried to name a Planned Parenthood clinic after controversial author Tucker Max. He thought it would be hilarious if we tried to create the Tucker Max Planned Parenthood Clinic in Texas.

Somewhat anonymously, we got all the way up to a meeting with their CEO in Texas. They canceled at the last minute, and then that's when we leaked the details of the discussion to a blog. And it ended up doing millions of media impressions.

We didn't have to spend any money. It became this big discussion because Planned Parenthood's funding is being attacked from every angle in Texas... And then here's a controversial public figure who wants to give them money with some strings attached. That becomes a discussion about the author's work, his comedy, and the politics.

If you want to generate a discussion, there's probably not a more contentious issue than abortion. I dove right into that with my book Confessions of a Media Manipulator, and that book debuted at No. 2 on the New York Times bestseller list the week it came out.

I'm not saying you should lie to a reporter or hold their family hostage to get them to write about you. You're doing something that is newsworthy, that you know reporters will turn into news by writing about it.

By doing something newsworthy, you're giving the news a chance to talk about you, and a lot of my strategies are rooted in that.

– Ryan Holiday

Making up the news to sell your product...

Marketing guru Ryan Holiday has put the cliché that "any press is good press" to the test.

In today's Digest Premium, he discusses fabricating news stories to make headlines...

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 01/30/2014

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.

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