Like Landing a Plane in the Hudson River
The miracle on the Hudson... Building and maintaining a portfolio is similar... Don't miss the details on our biggest breakthrough in 25 years... A status-quo day... Eyes on the Federal Reserve later this week...
It was a miracle on the Hudson...
You probably remember the story of Captain Chesley "Sully" Sullenberger, the pilot who landed a U.S. Airways jet in New York's Hudson River after the plane flew into a flock of birds that knocked out power to both engines.
So many things could have gone wrong. Sullenberger needed to make multiple split-second decisions that resulted in all 155 people aboard surviving... and the plane floating in the Hudson... making the pilot a world-recognized hero.
Our Stansberry Investment Advisory lead editor Whitney Tilson had a friend on the plane...
In the brand-new free video presentation we debuted last week, Whitney talked about his friend's experience as it related to the new investing tool we at Stansberry Research have developed. As Whitney said...
For every decision you make, there are dozens of potential outcomes, right?
For example, the pilot could have tried turning the aircraft around and flying back to LaGuardia Airport. Or he could have tried shooting over Manhattan and landing in New Jersey. Or he could have maintained his current flight course and tried to troubleshoot the engines...
He landed the plane in the Hudson River without a single fatality. His plan worked.
But afterward, the National Transportation Safety Board wanted to know if he'd made the correct decision. So they put a test pilot in a computer flight simulator and had the pilot run through every possible scenario – with a few seconds baked in for human hesitation.
Can you guess what happened? The computer ran through every possible decision... every choice the pilot could have made. And the plane crashed with a huge loss of lives – every single time. It turned out that landing in the river was the only successful outcome.
Building and maintaining an investment portfolio can feel the same way...
There are so many possibilities... How do you know what stocks or assets to own? And how much of each? And, take it a step further... how do you do it while maximizing returns and minimizing the risk of losses?
Well, in arguably our biggest breakthrough in the 25-year history of our company, our team has developed a system that we believe offers an elegant solution... And as Whitney explains, it's going to be especially critical to have on your side for 2024.
It can create and simulate the future outcome of 1,000 different portfolios – 161 trillion combinations of stocks – based on the factors that Stansberry Research editors and analysts know drive the biggest movements for thousands of stocks.
This tool distills all of that information, provides a number grade for nearly 5,000 stocks, and then suggests how to position the best stocks alongside each other in a portfolio designed to boost returns while limiting losses.
Click here for all the details right now in this free presentation with Whitney... You'll get a full explanation, plus a pair of free recommendations just for tuning in. This is something that has been years in the making at Stansberry Research, and we're excited to unveil it.
(And one note for Stansberry Alliance members, you are more than welcome to watch... but know you also have access to this exciting new tool right here.)
Moving on to the short-term market action...
The major U.S. indexes were all up today, with the small-cap Russell 2000 leading the way. The 10-year Treasury yields hung around just above 4%. It was a status-quo day without much volatility.
Middle East tensions are in the spotlight again after an Iranian-backed militia attacked U.S. military personnel in Jordan with a drone strike, killing three and injuring several dozen...
Oil prices, which tend to be volatile amid any Middle East conflict, interestingly were little changed.
Still, global shipping costs have already been on the rise the past few months stemming from the disruptions in the Red Sea... also linked to Iran, in this case via the Houthi militant group that Iran supports in Yemen.
As Whitney wrote in his free daily newsletter today, sharing a chart from Charles Schwab Chief Investment Strategist Liz Ann Sonders...
It will be interesting to see what happens to global shipping costs in light of yesterday's deadly drone attack in Jordan that killed three U.S. soldiers and wounded many more, which will lead to a U.S. retaliatory strike. The odds of a broader conflict in the Middle East have risen significantly...
What's up this week...
The big economic event of the week is the Federal Reserve's two-day policy meeting. The meeting begins tomorrow, with its announcement and press conference to follow on Wednesday.
As is usually the case, the potential market-moving items are less about what will happen – the Fed will likely keep its benchmark lending rate right where it is – and more about the color Fed Chair Jerome Powell will give about plans moving ahead...
A lot of investors are wondering if or when the central bank will cut interest rates... But on the heels of "sticky" inflation numbers and GDP growth of 3.3% for the fourth quarter of 2023, fed-funds-futures traders have been pushing back ever so slightly their expectations for cuts until the middle of the year.
As our Ten Stock Trader editor Greg Diamond wrote in his Weekly Market Outlook today, in which he outlined an interesting technical "divergence" between stocks (going up) and bond prices (going down over the past month or so)...
Right now, the consensus among investors is that inflation has peaked. Most believe the Fed will keep rates steady, if not begin cutting rates starting this year. We'll see what the central bank says this week.
But what if the crowd has this bet wrong?
What if inflation remains "sticky," meaning we see higher-than-expected readings that fail to confirm the consensus that interest rates will fall well below the 2% level (one of the Fed's goals)?
All in all, we're still in "Fed pause" mode until further notice, which historically has been bullish for stocks. But we'll pay close attention to the Fed's messaging this week to what the central bank signals about monetary policy.
New 52-week highs (as of 1/26/24): Autodesk (ADSK), Amazon (AMZN), American Express (AXP), AutoZone (AZO), Booz Allen Hamilton (BAH), Berkshire Hathaway (BRK-B), Dell Technologies (DELL), Alphabet (GOOGL), W.W. Grainger (GWW), Oaktree Specialty Lending (OCSL), Phillips 66 (PSX), Spotify Technology (SPOT), ProShares Ultra Financials (UYG), and Waste Management (WM).
In today's mailbag, feedback on Dan Ferris' latest Friday essay and Whitney Tilson's Sunday Masters Series essay... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Thank you Dan Ferris for exposing all this 'EV nonsense' we have been suffering through all these years. Makes me proud to open my garage doors and still only see my 2002 and 2014 GMC 1500 Sierra's parked and ready to go!" – Subscriber Harold S.
"Whitney Tilson's article 'Use These Three Big Keys...' sent in The Stansberry Digest on 1/28/2023 is insightful and thought-provoking. I'm going to print it out and study it from time to time. There are several things mentioned that can be discussed in depth such as the conservative approach of taking profits on stocks at various stages as the price increases. Investors can study the fundamentals of a particular stock in depth but still miss an upcoming significant permanent downturn due to unforeseen events beyond the control of the management of a company." – Subscriber Michael U.
All the best,
Corey McLaughlin
Baltimore, Maryland
January 29, 2024