Porter's big prediction goes mainstream...

 We held our annual S&A Spring Editors Conference last month at West Virginia's Greenbrier Resort. The Greenbrier is a lovely place. It's iconic. And I (Porter) would describe it as faded glamour, or slightly decrepit opulence. The color patterns – the sheets, drapes, and carpets – are outrageous. They're pink and green. It's straight out of the 1960s.

Some people would be disappointed in that because they want everything to look like a new Four Seasons. A lot of people think that just because they're spending a lot of money, everything should be brand new. I don't have that bias. I actually prefer a place with a little bit of character.

 The Greenbrier is a beautiful resort. It's well-maintained. The staff is well-trained. And the highlight for me was the food and drink. It has great wines. It has fantastic food, and it's all cooked in a traditional way...

For example, when you order scrambled eggs in the morning, they come with a little bit of crème fraîche in them. So they're really rich and delicious. Everything is prepared that way. They don't skimp on the butter. It's a great pleasure to be in that kind of environment, where everything is very decadent.

 As for the conference itself... I realized that the room was uniformly bullish. That always scares me. Nobody gave a presentation based on the possibility of a major financial crisis. And I think the possibility of a major global financial crisis continues to grow.

Everybody's bullish, and yet we have equity prices at all-time highs. In most cases, we have interest rates near all-time lows. And the world's monetary standards are being manipulated to an unprecedented degree. That's a combination for a big train wreck.

 Now... we've written in the Digest – and I agree – that the inflationary policies embraced by central banks around the world could continue to push asset prices higher from here. But it can't go on forever. And the higher prices get (and the longer interest rates are stuck near zero percent)... the more cautious we should get.

You don't have any margin of safety in bonds or stocks. And you've got all the different banks in the world walking a tight rope where they're guaranteed to fall. You just can't know exactly when or how.

 That's why two weeks ago, I urged Digest Premium subscribers to start building liquidity. I recommended paring down on riskier positions and holding the capital in cash – which I described as 50% 90-day Treasury bills and 50% gold.

Yes, I know this seems like a highly conservative strategy. But as I'll explain tomorrow, following this plan, you should prosper even as the market rises.

– Porter Stansberry with Sean Goldsmith

 What I heard at the S&A Editors Conference that scared me...

After listening to the presentations given last month at Stansberry & Associates' Spring Editors Conference, Porter discovered a trend he says scared him.

In today's Digest Premium, he explains what he heard... and what you should do to protect your investments.

To continue reading, scroll down or click here.

 What I heard at the S&A Editors Conference that scared me...

After listening to the presentations given last month at Stansberry & Associates' Spring Editors Conference, Porter discovered a trend he says scared him.

In today's Digest Premium, he explains what he heard... and what you should do to protect your investments.

To subscribe to Digest Premium and access today's analysis, click here.

Porter's big prediction goes mainstream... Frank 'on the ground' in Vancouver... Big Tech is hitting new highs... A brand-new World Dominator stock in Extreme Value...

 A prediction we made several years ago is now going mainstream...

This week, the Financial Times covered a report by respected commodities analyst Ed Morse. In a report just sent to his clients, Morse noted the North American shale gas revolution "virtually guarantees" the end of crude oil's monopoly as the preferred transport fuel.

This idea is old hat for regular S&A readers. Over the past four years, Porter has written more about the shale oil and gas production boom than anyone in our industry.

We've sent analysts to many different shale plays. We've interviewed the world's top oil explorers. We've interviewed global energy experts.

And our colleague Frank Curzio has made the idea of natural gas as a transportation fuel a cornerstone of his Small Stock Specialist research... guiding readers to massive gains in the best natural gas ideas. Frank has written extensively about the adoption of natural gas in large truck fleets... like those used by discount retailer Wal-Mart and U.S. garbage-hauling giant Waste Management.

Morse agrees with our thesis: That more and more truck fleets, bus fleets, and even railroads will convert to burning our abundant gas supplies for fuel. The Financial Times reports...

 The boom in North American natural gas production will have huge ripple effects across the world...

Because of lower energy costs, we're already seeing U.S. manufacturing become more competitive with the rest of the world. We're seeing a massive buildout of natural gas infrastructure. (One of our top recommendations on this idea – Chicago Bridge & Iron – is up 75%.)

Demand for pipeline and storage-tank usage is soaring. Other countries are desperate to acquire the expertise and systems that shale gas drilling requires. This will produce a big tailwind for service companies like Schlumberger and Halliburton.

 For a great "boots on the ground" piece of research on another place this boom will produce big gains for investors, make sure to check out the latest issue of Frank's Small Stock Specialist. He recently traveled to Vancouver to research his latest recommendation.

While many investors know Vancouver as one of the global capitals of resource finance, it's also a capital of one important industry tied to the natural gas boom. That's because it's home to one of the most important small-cap companies you've never heard of. Frank knows this company inside and out... and his latest issue shows it.

It wouldn't be fair to readers of Frank's service to name the stock. But we can say that Frank believes this company and its proprietary technology will dominate its area of the natural gas boom. The entire issue is an excellent overview of this industry... and a great piece of research.

You can check out Frank's work with a trial subscription to the Small Stock Specialist. We're confident you'll love the issue and Frank's latest idea. But if you decide it's not for you within the first four months, we'll return 100% of the subscription price. You have nothing to lose and a huge amount of knowledge to gain. Learn how to get started with a subscription – which will give you access to Frank's May issue of Small Stock Specialist – right here.

 Big Tech stocks are hitting new highs lately. Internet networking giant Cisco and software giant Microsoft hit 52-week highs yesterday. Chipmaker Intel didn't hit a new high, but it soared 3.5% after introducing its new computer chip, codenamed Haswell. The chip promises huge gains in power efficiency, so your laptop battery ought to last much longer with the new technology.

Big Tech is one of the cheapest areas in a market that's otherwise not offering many compelling values today. I (Dan Ferris) have had a tough time finding new, safe, cheap stocks lately. This year, I've made just one new recommendation in Extreme Value. It's a big, well-financed tech company that dominates its industry. (Readers are up 6% since February.)

And I expect to add another well-financed tech giant and World Dominator to our Extreme Value portfolio in this month's issue, due out on Friday after market close.

I've been recommending safe, cheap World Dominator stocks since late 2006. This month's recommendation is by far the cheapest World Dominator I've ever seen. It's absurdly priced. It's growing by double digits and is priced like a company going out of business. The market isn't this wrong this often... so you have to take advantage when it is.

Most World Dominator businesses are the No. 1 company in the industry they created. All World Dominators gush free cash flow, way more than they know what to do with. Most have fat balance sheets, loaded with excess cash. And all of them return capital to shareholders through dividends and/or share repurchases. This company fits the bill.

All the World Dominator stocks have performed well over the last few years. Four have produced triple-digit returns in just a few years. This new one we've found is easily worth double its current share price right now.

 But not every No. 1 company in its industry is a World Dominator. For instance, online video game maker Zynga makes three of the top five most popular games played on Facebook. But it can't eke out a profit. And now, it's cutting heads... firing 500 people, about 18% of its workforce.

Here's what I said about Zynga in the April issue of Extreme Value...

People are addicted to Zynga's games, but it's still unable to turn into a cash-gushing business. Since April, Zynga shares are down about 16%. And today, the only social media company I'd ever consider recommending would be Facebook, if it ever trades for less than 66 times free cash flow...

 New 52-week highs (as of 6/3/13): Cisco (CSCO), Fission Uranium (FCU.V), Chart Industries (GTLS), Integrated Device Technology (IDTI), Ligand Pharmaceuticals (LGND), and Microsoft (MSFT).

 In today's mailbag, one reader discusses why he believes the country is engaging in bogus economic development. Send your e-mails to feedback@stansberryresearch.com.

 "Dear Porter, in all the 'End of America' discussion and in particular complaints about the social overhang that could swamp the economy, such as Obamacare and state pension commitments, I am not hearing a squeak about another ripoff of public funds.

"There is a silent and constant draining off of public funds at all levels from municipal to Federal that is having a huge impact and no one is writing about it. Massive and often ongoing subsidies and tax breaks are being demanded and all too often simply given to support so called economic development of various enterprises from supermarkets to sport stores and golf courses. The effects on the local economy are all too often catastrophic as a multitude of small businesses collapse and full time jobs lost to part-time casual employment.

"The problem with this form of so called economic 'development' is that is has absolutely nothing to do with a free enterprise economic system. This is socialism by pretend entrepreneurs disguised as capitalist activity and it eats out the guts of an economy. The U.S. has indulged in an orgy of such bogus economic 'development' for decades mostly unnoticed or unaccounted for publicly. This sort of activity is as cancerous and dangerous to a society as reckless social support to unproductive populations with generous unemployment payments and senseless training programs.

"No one can be expected to refuse a free handout and hard nosed business people will take a government gift as easily as any other. Stupid politicians will always do incompetent things and corrupt politicians are a normal social hazard. A society that makes no effort to control and guard against the damage of such forces and activities deserves the financial diseases and chaos such neglect creates.

"But economic commentators, the eyes of society need to expose all the economic mal-practices that act like cancers to eat value out of human activity. The something like 100-120 million dollar subsidies and tax breaks every Wal-Mart store opening costs government funds and the damage to the local economy in a society are a good example of a disease that has become common and eaten a huge hole into economic progress is the US over the last 30+ years.

"Yes America and Americans have lost track of what their political/social and economic model is meant to be and how it was meant to work. But the freeloaders eating at the economic table are not just those on unearned generous pensions, endless unemployment and other benefits from the state. A society hooked on a medical drug and high tech treatment culture is pouring untold billions into some private coffers while the health of the population declines and this is ultimately unsustainable but not simply the result of Obamacare or any other social medicine program.

"The whole sad story has to be told and an attempt made to attend all the economic ills eating the life out of a country and its people. Not just the bits that appeal to us most or provide the best sound bites." – Paid-up subscriber Peter Tomkinson

 "I attended a wedding this week and was invited outside with the groom and others in the wedding to enjoy some friendly cigars. Somehow we got on the subject of investing. My background is not anywhere close to investing and I am only 27 years old, so my experience is definitely lacking. However, the gentlemen that I had the conversation with is around the same age. I read the Digest every day and I also read The 12% Letter and Retirement Millionaire (which are EXCELLENT publications).

"There have been write ups regarding Tesla motors in the past, and that is the company that was brought up. In short, it was me vs the group of guys. They were defending Tesla and praising the company for paying back the DoE loan. I defended my position with battery life and cost. I was very surprised that this many of the guys knew about this company and the Digest always talks about the masses flocking to a certain stock. Seeing these guys argue a point for this obsolete car that is clearly not in the price range of most Americans, appears to me that Tesla is very popular with the masses, which is not a great sign for the company or stock price.

"I told them about a company (Westport) that makes natural gas motors and the different contracts they already have in place. I offered a friendly bet as to which company 5 years from now would still be in business, and I had no takers." – Paid-up subscriber Chris W.

 "Check the high number of empty high-rise buildings in China's large cities. China built on speculation. There's no need for more steel with so many buildings sitting empty." – Paid-up subscriber J.V.T.

Ferris comment: I hear you. Your comment makes a lot of sense. But Hebei, the biggest steel company in China, is running around the world, buying up big supplies of iron ore. I doubt it would do that if it didn't need it... But with China, you never really know what's going on.

Regards,

Brian Hunt and Dan Ferris 
Delray Beach, Florida and Medford, Oregon 
June 4, 2013

 What I heard at the S&A Editors Conference that scared me...