Once Again, Doc Was Exactly Right

Why Doc Eifrig still isn't getting too worried yet... 'The economic boom has continued'... Checking in on 'muni' bonds... Once again, Doc was exactly right... A special note from The Atlas 400...

Earlier this week, we noted a big 'first' for our colleague Dr. David 'Doc' Eifrig...

For the first time in his decadelong career in the newsletter business, Doc recently recommended a short trade to his Advanced Options subscribers.

But we also noted that this recommendation should be no cause for alarm. As we wrote...

[Doc's] first-ever short recommendation was due to an important near-term concern... He believes the market is due for a sharp pullback.

Doc went on to note that the benchmark S&P 500 Index is up more than 10% so far this year. At that rate, the market would return nearly 75% for the year. This is nearly double the largest annual gain for the S&P 500 in history... a 45% gain in 1933, coming off the lows of the Great Depression.

This is not likely to happen... which means the market's pace must slow. And when the market pulls back, Doc wants his subscribers to profit from the move.

In other words, like us, Doc believes stocks are likely to take a 'breather' soon...

However, he still isn't personally worried about a recession or a stock market crash at this time. He shared his latest "big picture" thoughts with his Retirement Trader subscribers last Friday. From that issue...

Longtime subscribers know I'm an advocate of scouring the real world for information. I call it my "Cabbie Index." When I'm in a new area, I like to ask cab drivers how things are going. They always know where the construction is happening... who's getting laid off... and how the business at local spots seems to be. (Though I suppose I might have to rename it the "Uber Index.")

If you keep your eyes open, you can spot new products, growing businesses, and abrupt shifts in the economy before anyone else.

On a recent trip, Doc noticed something unusual...

The Delta Air Lines (DAL) flight he was on was nearly empty for the first time in years.

In the issue, Doc said he counted fewer than a dozen people on the full-size plane. The sight alarmed him so much that he took a picture and sent it to his research staff along with a simple note, "First empty flight in five years. Badness coming?"

Again, as Doc noted, this was a stark change from his experience over the past several years...

Business has been booming for airlines. Doc said it has been years since he's enjoyed a flight with some room to stretch out. Instead, the flights have consistently been full...

Everywhere he goes – vacation destinations like Las Vegas and San Francisco, working cities like Baltimore and Buffalo, or even little outposts like Bozeman, Montana – planes have been packed to the brim with folks going on vacation or to their next business meeting.

Regular readers know Doc has been on the lookout for exactly this kind of change for several months...

Last fall, he noted that the economy looked "as good as it gets"... and when things can't get any better, they can only get worse. So naturally, this change concerned him... It suggested that a downturn could finally be underway.

However, while Doc thinks real-world observations like these are incredibly valuable, he also believes they need confirmation.

The reality is any number of "quirks" could have led to that one empty flight, without indicating anything significant about the economy. And fortunately, further research quickly assuaged those fears. More from Doc...

By the time I landed, my research staff had the data in my inbox. Delta's load factor – the average number of full seats – was 84.2% for the prior month. That's a high level. We found out later that for January – the month of my flight – the load factor did dip to 79%. But that was the same as the previous January... mid-January just happens to be a slow time for flights...

You can get a leg up simply by figuring out what is happening in the present. We take our personal experiences, anecdotes, and nuggets of information from experts and businessmen. Then we combine them with economic stats and data to determine if they reflect a wider reality...

The data suggest my empty flight was an anomaly. Subsequent flights I've been on have all been full, showing that the economic boom has continued.

Speaking of Doc's 'big calls'...

Longtime readers may recall he hasn't just been one of the most consistently bullish analysts on stocks over the past decade. Doc has also been one of the most outspoken bulls on municipal bonds as well...

As you may know, "munis" pay safe, stable (and often tax-free) income, and historically, they rarely default. As a result, they have traditionally been considered one of the least "exciting" areas of the market.

But that all changed following the financial crisis. Suddenly, many folks – even several well-known and highly respected investors – began to predict a massive wave of municipal defaults, and carnage for conservative muni investors.

But Doc disagreed... In fact, he said those predictions were flat-out wrong.

He first recommended munis to his Retirement Millionaire subscribers in October 2008, during the heart of the financial crisis. And he re-recommended muni bonds many times over the next several years, when fearful investors caused the sector to sell off and push yields higher.

Of course, we know now that Doc was exactly right...

There was no muni crisis... and anyone who took his advice back then has earned years of consistent income and big capital gains in a safe, "boring" investment.

Unfortunately, over the past few years, more and more investors began to move back into these bonds in search of income. That has pushed yields too low for Doc to safely recommend new investments in munis for much of this time.

But that finally changed last October. As Doc explained in that month's issue of his Income Intelligence advisory...

We consider muni bonds to be as close to risk-free as it gets. But over the past few years, their yields haven't been high enough to justify a spot in our portfolio. That's changing.

The price of muni bonds are falling. As a result, yields are creeping back up near their highest level in the past two years...

Even better, muni-bond interest payments are exempt from federal income taxes. And if you buy bonds from your own state, they are likely exempt from state taxes, too.

This means a 4.3% yield in tax-exempt bonds is equivalent to a yield around 5.7%-6.4% on a normal bond, depending on your tax bracket. Earning 6.4% on a nearly risk-free asset is a no-brainer.

It turns out Doc's timing was impeccable once again...

Investors have again been rushing back into munis over the past several months. As the Wall Street Journal reported last week...

Municipal bonds are enjoying their strongest start to a year since at least 2006, defying expectations that President Trump's sweeping tax overhaul would depress demand in the market.

Investors poured more than $15 billion into municipal-bond funds in the first eight weeks of the year, the most over that period in at least 13 years, according to net inflows tracked by research firm Municipal Market Analytics. Demand stayed strong through the end of February, Investment Company Institute data show.

Income Intelligence subscribers are already up 13% on Doc's favorite muni investment – the Invesco Value Municipal Income Trust (IIM) – in less than five months. Better yet, they're continuing to collect a rich, tax-free yield of more than 5% today. Kudos to Doc for another great call.

If you aren't yet an Income Intelligence subscriber, we should also note that Doc remains bullish despite the recent rally. While munis are more expensive than when he originally recommended them in October, he still thinks they're a good buy today.

For the rest of today's Digest, we're turning things over to our friend Gray Zurbruegg, president of The Atlas 400. Here's Gray...

The helicopter dropped the metal crate on the beach just feet from us.

The pilot connected the aircraft, via the dangling hook and chain, about 100 yards offshore and had just delivered a crate full of Tasman Sea lobster.

Participants handpicked their selections from the massive crate. We piled back into the helicopters. And 15 minutes later... we were dining on grilled lamb-pops and lobster at the camp our guides set up for lunch.

And that was the least exciting part of the trip...

The best part of the trip was spending time with other members on The Atlas 400's recent trip to New Zealand.

Participants included one of the world's smartest individuals (literally)... a former executive chairman of one of America's major defense contractors... the founder of the country's largest entertainment payroll company... an owner of a working ranch and numerous small businesses... and a lawyer, leading the mergers and acquisitions for a billion-dollar family office.

But I (Gray) would hang out with these folks anywhere. It doesn't have to be on the last major landmass settled by humans. The people matter more than anything.

Although, over the last 10 years, we've found the best way to build new relationships is through travel. Travel gets you out of your routine. It gives you the time to get to know new friends. And nothing creates a bond between people like a shared adventure.

That's why we started The Atlas 400...

And ever since we started meeting and traveling the world together, our best experiences, our best memories, and our best new friendships have happened through The Atlas 400.

Our idea hasn't just inspired a few people... it's taken off and become something even bigger than any of us ever expected it would become.

What started as a small, private club – just a few close friends and colleagues – has evolved into more than 100 members in 14 countries.

But we're very selective about who we let in...

We refuse to dilute membership quality for the sake of growth. We're not kidding when we tell folks we grow "one by one."

This club is for successful people. The initiation fee to join is substantial ($30,000) and our excursions aren't cheap.

There's no minimum net worth, just the requisite success.

So how does it work?

The Atlas 400 sponsors amazing adventures around the world several times per year.

As I mentioned, we've just returned from New Zealand. The trip began on the southernmost point of the North Island, at the Wharekauhau Lodge.

The Wharekauhau is my favorite lodge in the world. The staff, accommodations, and setting are unbeatable.

Each guest enjoyed a cottage of their own... think coastal white décor, cool ocean breezes, and a bathroom large enough to live in.

Over the course of our visit, guests enjoyed horseback riding on the beach, four-wheeling along rivers and grasslands, and surfcasting from the shoreline.

Our next stop was just a quick charter flight away...

From Wharekauhau's private airstrip, we headed further south... spending the next four days in Queenstown.

We arranged a helicopter trip to Milford Sound – the Eighth Wonder of the World – and Fiordland. Along the way, we stopped for a picnic lunch (veal and lobster) atop glaciers and a bit of trekking.

When we weren't flying around, our days were filled with exploring the exotic forests and ridgelines. And when we say "exotic," we mean it.

A large majority of Peter Jackson's Lord of the Rings trilogy was filmed in the neighboring Dart River Valley. The valley is full of monstrous trees... vegetation so dense that it blocks the sun... and animal life that made us feel like we really were in "Middle-earth."

Keep in mind, though, these trips are merely the best way to facilitate the true meaning of The Atlas 400...

Our mission is to bring people together, to help them build relationships in pursuit of "the best of life." Travel does this by getting people out of their daily routines and into a shared adventure with like-minded people.

If you've considered applying or if I've piqued your interest, then I recommend you keep reading...

Because of our long relationship with Stansberry Research, we're offering subscribers an opportunity that's never occurred in The Atlas 400's decade of operation.

We're hosting a recruitment event at Channels Ranch from April 18-21, 2019.

Thanks to a current member of The Atlas 400, we've secured the long weekend at this private, one-of-a-kind fly-fishing property. The ranch is situated on the banks of the Madison River right outside of Ennis – just 50 minutes from Bozeman, Montana.

The location offers anglers unparalleled access to the country's best Blue Ribbon fly-fishing. A short walk out the front door has you casting in the famous "Channels" section of the Madison, fighting large, feisty trout on their private stretch of river.

In addition to wet casting, we've scheduled a float trip down a portion of the Madison River. It'll easily be the highlight of everyone's weekend.

While there is a membership fee to join The Atlas 400, this event is FREE...

All you'd have to do is get to Bozeman. The remainder is on us.

Attendance requires a commitment of time. We're looking for folks demonstrating an earnest desire to join our ranks. In order to attend, each candidate must apply for membership and go through the requisite interview prior to the event.

And please, only apply if you're seriously interested in joining.

We only have three spots available. The participation deadline is Monday, March 25.

So if you'd like to attend the retreat at Channels Ranch, act quickly.

Click here to begin our membership application. If you have questions about the weekend at Channels Ranch or membership in The Atlas 400, please reach out to me (Gray) directly at gzurbruegg@theatlas400.com or (410) 864-0878.

New 52-week highs (as of 3/13/19): Essex Property Trust (ESS), Ionis Pharmaceuticals (IONS), Nestlé (NSRGY), New York Times (NYT), Procter & Gamble (PG), and Vanguard Real Estate Fund (VNQ).

In today's mailbag: One longtime subscriber shares his tremendous success with Sjug's big housing call, while another has a bone to pick about yesterday's Digest. As always, send your comments, questions, and general concerns to feedback@stansberryresearch.com.

"I just wanted to let Steve, Porter, and their excellent investment team know about how we have benefitted from your beating the drum to 'buy housing' and real estate over the past several years.

"Although we were turned off by the thought of becoming a landlord (based on my wife's brother's experience with problem tenants), as the economy began to recover following the Great Recession, opportunities to purchase lots in the heart of our still-growing seacoast town in SC started popping up. In 2012, a local bank had a lot that they had foreclosed on, and a banker friend let us know about it. It was in a row of lots that had been selling for $165K each just 5 years earlier – but we could buy it for $18K!

"Talk about seeing money lying on the ground and going over to pick it up! We put down five grand, took out a loan and paid it off in a couple of years. Now those lots around ours are selling for $150K and up again as 'live-work' buildings are going up on some of them in what has become a very desirable 'walkable' area of town.

"Even better, in late 2014 we found another lot nearby that our local water & sewer authority owned but wasn't using. I inquired as to their plans for it, and they said that they were willing to sell it. They put it up for bid on their website with NO advertising, and we put in the ONLY bid – and got it for just $13,510! We just sold that lot for $150K last October for a capital gain of almost 1000% after purchase costs & 3 years of property taxes.

"Talk about a 'generational opportunity' to make great returns on an investment! Thanks for your ongoing solid advice and commitment to your readers." – Paid-up subscriber David G.

"Mike, not to get too picky; it was a Model T not A that Henry first produced. Otherwise great article about the (faux) GAAP that most companies profess to use. Regards." – Paid-up Stansberry Alliance member Craig L.

Mike Barrett comment: Craig, thanks for the kudos. Regarding your assertion that I incorrectly noted the model of Ford's first car, the company's own website sets the record straight (emphasis added)...

1903 – With 12 investors and 1,000 shares, the company had spent almost all of its $28,000 cash investment by the time it sold the first Ford Model A on July 23, 1903. But by October 1, 1903 Ford Motor Company had turned a profit of $37,000.

1908 – Ford introduces the Model T.

You're correct that Ford did start selling another car by the name "Model A" in the late 1920s. It commemorated the company's first car. Perhaps that's what you're thinking about.

Regards,

Justin Brill
Baltimore, Maryland
March 14, 2019