Gold Hasn't Done This in Years

Gold hasn't done this in years... A huge sign of a bottom in commodities... 'They're throwing in the towel'... Your chance to join Steve in China this spring... In the mailbag: Porter explains his weight loss...

If you're like most folks, you probably take it for granted...

Gold and the U.S. dollar trade "inversely."

That is... when the U.S. dollar goes up, gold prices go down. And when the dollar goes down, gold prices go up.

Most of the time, this statement is true. But as our colleagues Ben Morris and Drew McConnell reminded their DailyWealth Trader readers last week, it isn't always the case...

As they explained in the February 11 issue of DailyWealth Trader, movements in the dollar do have a big influence on gold prices. But they're not the only influence...

Sentiment toward the global economy, geopolitical stability, the stock market, and paper currencies in general all carry weight. When worries grow, folks often turn to precious metals.

Depending on the culture and the individual, precious metals may be the first safe-haven asset people turn to... Or they may be the safe haven of last resort. Either way, gold fulfills this role around the world.

The thing is, the dollar also serves as a safe-haven asset... If you're worried about the stock market, you may hold extra cash in dollars. Outside the U.S., when folks are worried about their domestic currencies, they may also move money into U.S. dollars.

Gold and the U.S. dollar overlap in their roles as safe-haven assets. So when investors flee risk, the two can – and sometimes do – move together. And that's just one example... With nearly infinite market forces, other scenarios exist when gold and the dollar will move together.

This isn't just rhetoric...

As they showed, we've seen two major periods over the past couple of decades where both gold and the dollar moved in tandem...

In the chart below, you can see two stretches when both gold and the dollar rose. In 2005, the dollar rose 13% and gold rose 18%. Then from late April 2008 to early June 2010, the dollar soared 24% at the same time gold jumped 35%.

Note that they didn't rise in the same way. But in each highlighted period, both gold and the dollar climbed significantly...

The first period was right smack in the middle of gold's bull market. And the second period was during the worst months of the financial crisis, and the start of the recovery.

Although it doesn't happen often, the dollar and gold can rise together.

Why do we bring this up?

Because it's exactly what has been happening over the past few months. Since the stock market peaked in September, both the dollar and gold are up. More from the issue...

Notice that in the short term – over the course of a few days or weeks – the dollar and gold do move opposite one another. Yet they're both trending higher. Gold, especially, is in the start of a nice uptrend.

The idea behind today's issue is simple. The dollar is climbing. And lots of folks think that's bad for gold. It is a headwind, for sure. But sometimes, market forces overwhelm even powerful headwinds.

Over the past four months, gold has climbed higher in spite of a rising dollar. We see that as evidence that something big may be bubbling beneath the surface... something that could be extremely bullish for gold. We suggest you pay attention.

Now, it's still early, of course...

But gold has continued higher since they penned those words last week. And it just broke out to a fresh 10-month high of more than $1,340 an ounce this morning...

Gold is now up more than 10% since we noted several signs of a major bottom last August... And it is quickly closing in on new multiyear highs.

But this isn't the only notable development in the resource sector today...

Regular Digest readers know that like gold, commodities as a whole have also become incredibly cheap and hated.

And just this month, we saw a huge sign that here, too, a major bottom could be near. As Steve Sjuggerud explained in the latest issue of True Wealth Opportunities: Commodities, published last Thursday...

Commodity prices have lost two-thirds of their value since their 2008 peak. So the pencil pushers at Goldman Sachs have decided that there's no money to be made in the commodities business. They're throwing in the towel.

Yes – the venerable investment bank Goldman Sachs is giving up on commodities.

The Wall Street Journal broke the story on February 5. And the explanation from Goldman on closing its commodity businesses was beautifully simple...

The business uses too much capital for too little profit.

Why is this noteworthy?

Because it's exactly the type of "capitulation" we've seen at major market bottoms in the past. More from Steve...

"Merrill Lynch got OUT of the commodities business in 1998 because they weren't making any money," investing legend Jim Rogers told me over dinner in New Orleans many years ago...

Then, with a twinkle in his eye, he winked and said, "That's the same year I launched my commodity index fund."

The pencil pushers at Merrill had done the math – they knew that the main commodity index had lost half its value between 1980 and 1998 – and they threw in the towel.

What happened next? The Rogers International Commodity Index soared from a starting value of 1,000 in 1998 to a peak near 6,000 a decade later.

Jim Rogers might be the world's most successful investor... In the decade of the 1970s, he delivered a 4,000%-plus return to investors in his hedge fund. Then he retired. (Legend!)

In fact, as Steve noted, that story led him to a similar opportunity in a completely different market a few years later...

In 2002, when Merrill Lynch decided it was no longer making money in its junk bond department, it let go of Martin Fridson and his team – the best "junk bond" team on the planet.

That was a sign of the bottom in junk bonds. I immediately recommended buying a junk bond fund in True Wealth. We made a fantastic return in a relatively short period of time.

Again, Steve believes the same kind of setup is happening in commodities today...

And it has made him even more certain that a major bull market is dead ahead...

This landmark decision tells us exactly what the market sentiment is toward commodities today. It's terrible. It would have to be for Goldman to close down its commodity business. And that tells me that our opportunity is huge...

The perception is that commodities are dead... that there's no way to make money in the businesses... that the next boom might not ever come, so it would be better to move on.

As I'm sure you realize, this is great news for us. It means we're on the edge of a turning point... This is darn near the best signal we can get that a commodity boom is about to begin.

In short, Steve says this is the single best opportunity in commodities in at least 50 years.

If you don't yet have any exposure to these markets, consider adding some today. And if you'd like more guidance on how to do so, you can learn more about a subscription to True Wealth Opportunities: Commodities right here.

One last note before we sign off today...

Regular readers know Steve has also been incredibly bullish on China.

Despite the recent "trade war" turmoil, that remains the case today... And in a few months, he'll be showing a small group of Stansberry Research subscribers exactly why he remains so bullish – live and in person – at the 2019 Stansberry Spring Summit in China.

This will be the third year Steve is hosting a major event in China, and the reason is simple: He believes there's no better way to understand the country's dramatic transformation than seeing it for yourself.

The seven-day trip this May will feature an exclusive two-day conference and plenty of sightseeing. But if you're interested, we must hear from you soon. There are a limited number of spaces, and they're sure to sell out quickly. Click here for all the details.

New 52-week highs (as of 2/18/19): Polymetal (LSE: POLY). U.S. markets were closed for Presidents' Day.

A busy weekend in the mailbag. More feedback on last week's "Bull vs. Bear" summit... and several readers weigh in on Porter's Friday Digest return. As always, send your notes to feedback@stansberryresearch.com.

"'Did the Bull vs. Bear Summit change your opinion on the market?' No, my opinion is still the same – cautiously optimistic. No worries, I have Stansberry Research for guidance and TradeStops to tell me when to exit." – Paid-up subscriber Frank K.

"Hi Porter, I am so glad to hear you are doing well! From some of the pictures you have posted of yourself over the years I had been concerned about your well being. I have Googled your name a few times over the past few months to glean what might have happened to you.

"I have been a subscriber and avid reader of your work. For over a decade I have looked forward to your Friday newsletter. I was a 'long armer' and had a blast listening to your black label shows but the drinking and lifestyle concerned me that you would crash and burn. It seemed fun but was not sustainable as you found out.

"I have been a subscriber for over a decade. I am an initial subscriber to Credit Opportunities and took your advice to heart about bonds. I now have 1/3 of my portfolio in bonds and using TradeStops I am moving more to bonds as I get stopped out of my stocks.

"I look forward to a long, profitable and yes fun relationship over the coming years and decades. I plan to become an Alliance member as soon as I turn 59 1/2 (I am 56 1/2 now) so I can tap into my retirement funds to prepare for a relaxed retirement.

"Thank you for the update and am thrilled you are doing well!" – Paid-up subscriber Dennis B.

"Porter – great to hear that you've got things turned in a better direction... I had a vague sense recently that you were AWOL (nothing gets by me) but assumed that the excellent team you guys have built was allowing you some cruise time. Farm, boat, trips, rich food and drinks, all the things that we feel mean success are great fun but can bring us down. A close friend observed when we were 50 (35 years ago!) that we say we own this and that and this other thing, and one day wake up to the fact that they all own us. Keeping up with and maintaining the lot of them wears one out.

"It's been fun, vicariously, reading about your discovery of each new fruit of the success which you've enjoyed. But having been there and done that, relatively speaking, many years ago, you can't imagine how pleased I am to read that in characteristic fashion you've now met your problems head on and are managing them. Know that your work and creativity has enriched so many of our lives both financially and educationally. Time now to spend a little (lot?) more time tending the source. Faithfully yours since the Pirate Investor days." – Paid-up subscriber Pat F.

"Porter, thank goodness you are ok! It was great to read about what you have been doing for your own health. I have to admit, I have been worried about you for a long time as I saw your evolution in pictures over the years.

"Seriously – your Digest today was the best thing I have read in months. I am so happy for you and your family. Congratulations. You have done what many including me would like to be able to do at some point in our lives before it's too late. I can't tell you how happy I am to know that you are ok.

"Nice work! I look forward to hearing about all the exciting changes and research that will be coming out of your company over the coming weeks." – Paid-up subscriber Elizabeth J.

"I wanted to commend and encourage you to keep up the good work. As a physician I found myself putting my patients ahead of everything including myself and family (something I am told people with our personalities do). After changing my life I found that I was actually better able to serve my patients and I have no doubt that the 'New Porter' will do the same for the subscriber base. Remember NOTHING TASTES AS GOOD AS THE WAY YOU NOW FEEL. Thanks for all you do." – Paid-up subscriber Austin H.

"Hi Porter, I was very glad to hear from you and that you are OK. I assumed you were working on a project. I think you mentioned at one point going public and I'm sure something like that would take a lot of time.

"Anyway, I appreciate you sharing a bit of the story. I too am in pretty bad shape but nothing serious has manifested itself yet. I don't have your resources but could possibly take several weeks in May-June to do what you've done and focus on getting on a better path. I hope at some point you'll share more of what you've found to be most effective on your journey.

"Happy to read that you are much better and glad to have you back. Looking forward to the new projects too. Thank you." – Paid-up Stansberry Alliance member Mark L.

"Porter, you look GREAT and what a lovely family. I am a retired RN and this year at Las Vegas I knew you were ill. As soon as you 'disappeared' I started praying for you. As an Alliance member, reading all your great contributors (one could tell they were all working their behinds off) I had to think about you daily. Glad you are on the right health path now and really looking forward to all the new things coming from you and your crew!" – Paid-up Stansberry Alliance member Kathy M.

"I love you guys and all you do for us. I have never written in before but feel compelled to because of Porter's Friday letter filling us in on what has been going on in his life. I will tell you that the decision to become an Alliance member was not an easy one. It was a lot of money to me then and still today. I struggled between maybe being a Flex member and trying to save that money from an Alliance membership. But after thinking on it long and hard, praying about it, going back and forth, then trying to figure out what I needed to give up to afford the cost of the Alliance membership, I took the plunge. And even after a few weeks of joining, I still went back and forth wondering if I made the right call.

"I can tell you a few years later that it was one of the best decisions of my life. Forgot whether I have made money or lost money (for the record I have more than paid for the Alliance membership) but the biggest value is all the learning I have received from you and your team. Not only am I much more knowledgeable investor but I am more knowledgeable overall on many different topics due to what you and your team send out.

"Thank you for your commitment to us. Thank you for being honest people. Thank you for sharing details on your life with us like you just did, losing your dog a year or so ago, and other details. Thank you for treating us like friends and family. And thank you for sharing with us the things you would want to know if our roles were reversed. But most of all thank you for being you. Love you and your whole team. Thanks for making all of us better." – Paid-up Stansberry Alliance member Mike B.

"It was so good to hear from Porter again. I had no idea he was sick. I assumed he was working on some major project behind the scenes. I am so glad he has survived and is back.

"I met Porter at the Kiawah Island Alliance meeting. I don't remember the year. Maybe 2006. I can't tell you the depth of learning that I have received over the years. I can tell you that I had truly no knowledge of finances or the finance industry prior to subscribing to Stansberry Research.

"My first subscription was to True Wealth. Then about a year later I took the plunge to become an Alliance member. I have never looked back and have never been sorry. I had never traded an option and had never shorted a stock. Today I trade options on a daily basis. Virtually all of it from the research provided by Stansberry.

"Porter has been true to his word. Every year he adds new content. There is never an increase in price. My Alliance membership was, bar none, the best financial investment I ever made in my life.

"I love Porter's style. I love the fact that he puts family first. I love his motto of 'giving us the information he would want' paraphrased. I appreciate the analysts he brings to us. You can see they have the same high standards that Porter has personally. Keep up the good work. Fight the good fight. Keep us informed!" – Paid-up Stansberry Alliance member Dave H.

Porter comment: Over the weekend I read dozens and dozens of kind and thoughtful replies to my Friday Digest. I also heard from many old friends, some of whom hadn't been in touch for several years. They'd seen my Digest and reached out to congratulate me and to tell me how they were hoping I'd make these kinds of changes in my life.

Reading your notes and hearing from old friends reminded me in a powerful way how much joy I've experienced serving all of you for so many years. Thank you for your support, for your prayers, and for your love.

Several subscribers asked specifically for information on how I lost so much weight.

I'm happy to share what worked for me, but I want to caution everyone that I'm certainly not a doctor and what has worked for me may not be possible or even healthy for you.

One thing, though, I'm fairly certain about... making changes to your body isn't nearly as easy as it seems.

There's a great book called The Happiness Hypothesis that I'd urge everyone to read. It was written by a clinical psychologist who taught at the University of Virginia for many years.

It's an analysis of several different religious traditions and how things like prayer, meditation, and the Buddhist practice of "non-attachment" impact the mind. It explains a lot about why little things, like a good relationship with our spouse, make us happy, while "big things" like money and status don't.

If you're a religious person, I think you'll enjoy this respectful look at things that all religions share in regard to helping to foster happiness. And if you're not a religious person, I think you'll learn a lot about why spiritual practices are so important to lasting happiness. Just as importantly, you'll learn a huge secret about why it's so hard to change your body's habits.

The book's author, Jonathan Haidt, explains that your body is like an elephant – huge, powerful, well-meaning, and always hungry – while your mind is like the elephant's rider. The rider can't simply demand that the elephant do what he wants – not all the time, and not for long. The elephant has to be trained. He has to be coaxed. He has to learn what is actually in his best interest. And even then, he has to be carefully coached and constantly rewarded.

As I learned more and more about my own psychology I realized I'd failed with previous attempts to change my behavior because I hadn't taken the time to train my "elephant." It's not something you can do only with will power. It takes practice – a lot of practice.

So... how do you convince your elephant (your body) to adopt a new lifestyle, instead of constantly fighting it to avoid returning to bad habits?

First, I had to learn how to calm down and slow down enough to make thoughtful decisions.

For me, that meant learning how to meditate – to sit quietly enough to focus only on my breathing, not on any other thoughts. I'd never been able to meditate before and I didn't think I could. A big breakthrough for me was using headphones and meditation apps on my phone (Calm, Insight Timer) to get started. Later, my wife gave me a device (Muse) that measures my brainwaves and provides auditory feedback to help guide my meditations.

I've been meditating twice each day for about 20 minutes. This transformed my ability to think clearly and to "see" my behaviors and emotions in a new way.

Journaling was also critical for me...

Each day, after meditating, I write down my intentions for the day. I think about the challenges I'll face. I rehearse in my mind how I will face them. In doing this, I'm making sure that the "elephant" knows what's expected of him during each day. That means, the "elephant" doesn't get to make any snap decisions or impulsive choices.

In the evenings, I reward my body by spending a lot of time caring for it. I meditate in a warm bath. I stretch. I put oil on my skin. I use a ball to massage sore muscles. I burn candles that my wife picks out, that smell great. I bought new flannel sheets (from L.L. Bean) that are super soft... to make my bed even more comfortable. And I write down everything I was grateful for that day – especially the little things, like soft sheets... everything that actually made me feel good that day.

I found that, virtually every day, I was most grateful for my wife and the little things about our farm and our family that I love. What was fascinating was realizing how little time I was spending focusing on these things – the things that bring me so much joy – versus how much time I have spent on all of the things that bring me stress and make me unhappy.

My journaling helped me coordinate the things I was actually grateful for each day with my intentions for the next day. Planning my daily intentions carefully helped me to enjoy, more and more, the little things in my life. I started feeling overwhelmingly grateful. And I didn't notice the things that I used to worry about constantly. That made it easier and easier to follow my new path, instead of harder and harder over time.

And... the biggest miracle of all for me: I could finally sleep. (For most of the last decade, I rarely slept more than two or three hours a night.) Meditation allowed me to think more clearly. Planning my days allowed me to discover the things that I truly enjoy. Enjoying my days allowed me to feel happy and grateful. And that let me sleep, soundly.

Without this foundation, I wouldn't have been able to maintain a healthy diet or exercise regime. With this foundation, I love to eat right and to exercise. And I mean, I love it. I can't stand it now when something knocks me out of my routine.

When it comes to the nuts and bolts of losing of weight, it's not hard to figure out. You've got to burn more calories than you're consuming. There's no way around it. It's just math.

I burn about 2,000 calories per day just breathing. In addition to that amount, I want to add exercise. For me, that's a 500-calorie workout at the gym with a trainer every morning at 7 a.m. and/or an hour or so of walking our dogs around the farm. (I use an Apple Watch to track my calorie burn and my sleep.) I limit my diet to 1,500 calories per day. When I want to make extra progress, I fast for one day each week.

I promise, if you're doing between 500 and 1,000 calories of exercise and only eating 1,500 calories worth of food, you're going to lose weight.

But, of course... it's not that easy, is it? Your "elephant" will constantly conspire to break out of your control. Your body wants the pleasure food offers, and that elephant will bolt as soon as you're not focused on holding him in check. So, how do you keep up this discipline for weeks and months... and even years?

My key to success was working on all three parts of myself – my mind, my body, and my spirit. I would have never been able to stick to my diet without meditation and journaling.

I had to discover new ways of feeling good without eating or drinking too much. To do so required a quiet mind and new routines designed to maximize my daily happiness, including taking the time to do exercise that I enjoy, like walking. And I couldn't have maintained my new exercise routine unless I'd taken care of my "elephant," with hot baths, stretching, massage, acupuncture, oil, and flannel sheets.

Changing only my diet wouldn't have worked for long. Not that I'm done yet. I'm still a work in progress. I broke under 230 pounds this week for the first time since my first son was born. I'm still losing about a pound per week.

In the gym, I'm up to seven pull-ups (goal is 12) and 50 burpees.

On the spiritual side, I've joined a men's Bible study and a new church. My wife and I recently began a major new effort in charity, dwarfing all of our previous gifts. And my new efforts at work are keenly focused on helping other people understand the problems and opportunities in our markets, where I believe I have something valuable to add.

My life has balance. And meaning.

And each day is a joy.

I'm not on a diet. I'm just living a good life.

Regards,

Justin Brill and Porter Stansberry
Baltimore, Maryland
February 19, 2019