Porter's 'once-in-a-lifetime experience'... A rare photo of your editors... Bonds more popular than stocks for the first time in 12 years... Equity outflows continue... Gold stocks rally... Major money with World Dominators...
"Atlas 400 has opened all kinds of doors for me (and I hope for you too). But I must say... this is a door I never imagined would be offered." – Porter Stansberry in a letter to Atlas 400 members
Porter and I attended the Masters Golf Tournament in Augusta, Georgia last week with members of The Atlas 400, the private wealth club Porter founded.
As you may know... the Masters – hosted annually by the Augusta National Golf Club – is among the most prestigious golf events in the world.
Legendary golfer Bobby Jones and New York investment banker Clifford Roberts founded the club in 1932. In 1934, the course hosted the inaugural Augusta National Invitation Tournament (now known as the Masters). Today, the Masters is one of the four major golf tournaments on the U.S. Professional Golf Association's tour... and arguably the most important one.
Masters' badges (as tickets are called) may be the hardest ticket in sports to get... About 35,000 people attend every year. But unlike most sporting events... Augusta National does not make tickets available for purchase to the public. Instead, it maintains a list of ticketholders and allocates a number of badges to each person on the list. So the only way to get in is to buy one from an existing ticketholder who chooses to resell his. So you can imagine the markup is steep... To attend Wednesday's practice session, tickets with a face value of $50 were going for $1,000... and that's just to watch practice.
Of course, "scalping" tickets is against the law. It's a violation of Georgia state law to resell a ticket at more than face value. So a lot of the market for tickets involves wink-and-nod agreements. For instance, often you can rent a home for the week that comes with a couple tickets...
I'm from Augusta, so I used my local contacts to arrange an "insider's" trip to the tournament. We had the best private chef in the area, a private home for our use in a wonderful neighborhood, and Masters tickets all week. Other than myself, it was everyone's first time at the tournament.
Porter's tough to please, so when he sent the above note (part of a longer letter) to club members, I knew I'd done my job.
If you're not familiar with The Atlas 400, it's a private, not-for-profit club Porter and I created to leverage our global network of contacts – and the networks of our friends. Our personal relationships have done more for our wealth and success than any other single factor. Nothing will enhance your life more than being a part of a successful group of people who are sincerely interested in your well-being.
How does Atlas 400 help cultivate these relationships? We handpick likeminded, successful people as our members. We're careful to only choose members who can add value to the club (via their knowledge, relationships, or business). Then, we host our members at world-class venues around the world.
We've found nothing builds real friendships faster than traveling the globe together – being taken out of your comfort zone and away from your smart phone. These experiences aren't available to just anyone... For example, we had the CEO of Porsche host us for a day of racing at the company's private test track in Leipzig, Germany. We also used our contacts at BMW to arrange a day of racing at the company's Aschheim testing facility – the most secretive BMW facility in the world. (We were the first outside group they hosted there.) We've also sat front row at the Super Bowl and rented out the best fishing lodge in the world in the Panamanian jungle. We had a super-exclusive two-week safari throughout Africa. And as I said today, we had VIP access to the Masters.
Last Friday, Porter and I started our day at Augusta National in a private cabin on the golf course... Waitresses in white coats brought us hot breakfast and cocktails specially concocted for the tournament. While everyone else was suffering the cold outside, we warmed up on couches, watching replays from the previous day's play. Around noon, we left the cabin to walk the course. And while arranging access to a private cabin is accomplishment enough, I was trumped by a fellow Atlas member who was also visiting Augusta. As Porter told Atlas members in his letter...
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Well... today, thanks mostly to the efforts and connections of our own Sean Goldsmith (who is from Augusta), I followed 'Boom Boom' (as Fred Couples is called) around the course. We got to see him make those shots. We heard the crowd roar. And we roared with them. The day was, for me, a once in-a-lifetime experience. |
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I can only tell you that the TV doesn't capture even 10% of the beauty of this place. I hope you'll consider joining us the next time we put a trip here together. But that's not why I'm writing... |
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There's something else I'd like to share with you. |
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At the end of the day today, while we were walking past the Augusta National clubhouse, we ran into a fellow Atlas 400 member. He wasn't here with our Atlas group. He was standing "behind the ropes." Long story short, we were invited into the clubhouse this afternoon. I had a drink at the legendary grillroom bar, surrounded by the world's best golfers. Having a drink at Augusta National, during the Masters was... as my friend Cactus would say... "a hell of a deal." |
In the coming months, we will again be accepting applications to Atlas. If you're interested in learning more about the club, please contact our membership liaison, Karen Campbell (kcampbell@theatlas400.com). We're approaching 100 members in our group, at which point the membership fee increases. So I'd urge you to apply early.
Also, we're holding our annual meeting in New York this June... We host two gala dinners along with our club meeting (this year held at the Four Seasons). The club pays for this event for its members. No surprise, it's the largest event each year... And a great way to meet and mingle with your fellow members.
There are still a few spots open for our annual meeting. Again, for more information, please contact Karen Campbell. In the meantime, I'll leave you with a photo of Porter (right) and myself in front of the Masters leaderboard.
The 30-year bull market in bonds is over... We're just waiting for the market to wake up.
Right now, 10-year Treasury bonds yield 2.03% – which inflation is virtually guaranteed to eat. And Coca-Cola – whose stock pays a 2.9% dividend – just issued three-year bonds yielding 0.75%.
If you could make a couple percentage points more owning Coke's stock (2.9%) over its bonds (0.75%), why would you buy the latter? I don't know... Still, bonds are proving the more popular asset class today...
At Treasury auctions this year, investors have been buying U.S. government debt at a record pace... So far this year, investors have bid $3.19 for each dollar of the $538 billion in notes and bonds sold (the most since the government started releasing data in 1992).
In other words, there were more than three times as many offers to buy as Treasury could fill. At this pace, investors would finish the year ahead of the previous high of $3.04 in 2011.
In general, bond-focused mutual funds have attracted $62 billion this year and $837.4 billion total since 2008. Stock-focused funds have lost $1.6 billion this year and $396.8 billion since 2008.
And Grant's Interest Rate Observer reports... the 2012 Milliman Pension Funding Study, which tracks America's 100 largest defined benefit plans, shows pension funds currently favor fixed-income over equities for the first time in 12 years.
The study, compiled annually by the consulting and actuarial firm Milliman Inc., reports pension funds have 41.4% of their assets in bonds and 38.1% in equities. Five years ago, at the market peak, stocks made up 60.3% of pension fund portfolios, versus 29.3% for equities.
This may not be the exact bottom in the bond market, but the risks of holding bonds in general today are far too great. We're stepping aside.
On the other hand... We've long been calling for a rebound in gold stocks. While the market has raged, these stocks have fallen lower and lower. The world's largest gold mining companies (Barrick Gold, Newmont, and Goldcorp) hit new lows last week. Today, with the S&P 500 down a little more than 1%, gold stocks are rallying... The three giants are all up around 1% today. This price action – rallying while the market falls – is super-bullish for the sector. The gold-stock rally we've been waiting for could finally be here.
New 52-week highs (as of 4/6/12): None.
Are you questioning the power of World Dominator Dividend Growers? Please see today's mailbag for proof they work... And send your feedback to feedback@stansberryresearch.com.
"Why would I act on the words of a numbskull if I am compounding my dividends every year. Also, these selloffs create good buying opportunities here and there. I do believe in a year or two we will have a massive sell off related to the our monetary crisis. For which I hope I will have saved up enough liquid capital to strike when the iron is hot." – Paid-up subscriber Richard Moore
"I feel for you having to cover for Goldsmith (although like Porter when I die I want to come back as him). Therefore I will give you a sampling of the dividend stocks I have bought and their performance since I subscribed to your letters in late 2008.
"Altria – Dec 2008 bought 1000 @ 15.00; Mar 2009 bought 1000 @ 16.00; Jun 2009 bought 1500 @ 17.05
"Total invested: $56,588. Dividends during holding period $14,780. Unrealized long-term gain: $52,297. Yield on cost is 10.14% Total Return is 119%. Never tested much on the downside.
"Coca Cola – Mar 2009 bot 1000 @ net 40.40 (assigned on a put)
"Total invested $40,400. Dividends during holding period $5,585. Unrealized long-term gain: $33,060. Yield on cost is 5.05%. Total return is 95.65%. Biggest test on downside 2.5 points.
"McDonald's – Aug 2009 bought 1500 @ 55.80 (assigned on a put)
"Total invested: $83,700. Dividends during holding period $9,810. Unrealized long-term gain $63,550. Yield on cost is 5.01%. Total return is 87.64%. Biggest test on downside 2 points.
"Philip Morris--Oct 2008 bought 1500 @ 48.65; Nov 2008 bought 1000 @ 49.45; May 2010 bot 1200 @ 49.03
"Total invested: $181,281. Dividends during holding period $23,516. Unrealized long-term gain $149,832. Yield on cost is 6.29%. Total return is 95.6%. Biggest test on downside – dropped to $32.04 on March 2, 2009.
"I have followed the advice of Dan Ferris in holding these companies without a stop-loss. PM actually dropped to 28.68 in the May 2010 flash crash. I would have sold out either then or in March of 2009 if I had used a stop.
"I look forward to your Digests this week and to relentless compounding." – Paid-up subscriber Bob L.
Regards,
Sean Goldsmith
New York, New York
April 9, 2012