The 2014 Report Card, Part II...

The 2014 Report Card, Part II... How did our trading services perform?... Reader feedback: Porter's oil bets...

Today, we'll complete the 2014 installment of our annual Report Card by focusing on our trading services... If you missed yesterday's Digest, where we rated our monthly newsletters, you can read it here.

Here's how our trading services stacked up...

Retirement Trader: A+

What can we say about Retirement Trader that we haven't said already? Retirement Trader is simply the best trading advisory in the industry today.

Doc has received an "A" grade or higher every year since Retirement Trader first came into existence in 2010. His conservative use of options has allowed subscribers to increase their returns while lowering their risk. It has led to the greatest performance we've ever seen in the business. Retirement Trader currently sports a 93% win rate.

Plus, Doc's tireless focus on education has helped thousands of subscribers learn the valuable skill of selling options. Doc has produced educational videos and reports that walk readers through every step of the options-selling process, from opening an options account to actually selling options. He also literally wrote the book on selling options with Stansberry Research Editor in Chief Brian Hunt. High Income Retirement is one of the most valuable trading books in existence.

Doc's conservative approach to collecting large amounts of income and building an extensive educational archive makes Retirement Trader one of the most popular products we publish. If you don't already receive Retirement Trader and you're interested in acquiring the extremely valuable skill of selling options, consider a trial subscription. Take six months to go through the materials and make a handful of trades. Once you learn this approach, you may never go back to conventionally buying stocks. Click here to get started.

True Wealth Systems: B+

True Wealth Systems is Dr. Steve Sjuggerud's advanced trading product that resulted from around $1 million invested in computing power and data feeds. It allows individual investors to access advanced strategies they would normally never hear about. Most of the trades in True Wealth Systems are executed with easy-to-buy exchange-traded funds that often use leverage to amplify returns.

Since we launched True Wealth Systems in 2012, its performance has been extraordinary. Steve has guided subscribers to the biggest trends in the world, and they've ridden them with leverage. For example, in early 2012, based on a number of fundamental and technical factors, Steve's system recommended going long health care stocks. But it didn't recommend a conventional health care stock. It was such a high-conviction trade that Steve recommended subscribers buy a "double long" fund – one designed to return twice that of an index. The recommended double-long health care fund is up more than 300%.

Looking at the past few years, Steve and his research analyst Brett Eversole have obviously designed a robust, computerized way to trade the markets. Their program gives you clear entry and exit points for every trade. This ensures human emotion is removed from the equation.

Over the past three years, True Wealth Systems gave investors diversification over all types of assets – foreign stocks, commodities, bank warrants, biotech, and financial stocks. And those recommendations produced an incredible 35% annualized return using this approach (partly achieved by Steve and Brett's techniques for keeping the losses small). But since the winning percentage was a bit low (43.8%), we're giving the letter a "B+."

We're extremely proud of what Steve and Brett have accomplished with True Wealth Systems. They've created a way for individual investors to get access to sophisticated trading techniques and systems... for a reasonable price. Steve and Brett are able to test thousands of different strategies and recommend the most useful ones to their subscribers.

Stansberry Alpha: B+

Stansberry Alpha takes advantage of an anomaly in the market to produce triple-digit returns with less risk than simply buying the underlying stock. And we only use this strategy for high-quality companies.

Still, the strategy performs best with high volatility... And we haven't had sustained periods of high volatility in the past three years. So a 70% win rate and a 9% annualized return on capital at risk is an excellent outcome considering the headwinds.

Also, several of the companies we traded in Alpha were oil and gas firms, so the selloff in oil shocked our portfolio. We took triple-digit losses on margin on Energy XXI and Chesapeake Energy.

But we had more triple-digit winners (seven) than losing positions (three). So the strategy proved successful in a less-than-ideal environment. We're giving Stansberry Alpha a "B+."

DailyWealth Trader: B

DailyWealth Trader provides customers with benefits that go far beyond normal trading services. Every DailyWealth Trader subscriber gets access to a large archive of valuable educational materials. And the service answers subscriber questions every day. It sends out a weekly e-mail devoted to helping readers become better investors and traders. It teaches readers common-sense fundamental and technical-analysis principles.

All this makes up a "holistic" approach to learning key trading and investing concepts... and then applying those concepts in real time. We've received a huge amount of positive feedback from readers on this approach. And there's no doubt the skill-building aspect of this service is even more valuable than the day-to-day recommendations.

In addition to the educational material, subscribers also achieved solid returns with DailyWealth Trader over the past three years. It achieved a 65.9% win rate and annualized returns of 12.9% on margin.

Some trading highlights for the DailyWealth Trader team...

They went long Treasurys (betting yields would fall) with leverage last April and made more than 40%. They also gave timely warnings on the collapse of oil and platinum, saving subscribers from large losses in those sectors.

And in 2014, they achieved an astounding 92% win rate on their options positions. We're giving DailyWealth Trader a "B" grade.

Stansberry Short Report: D

It was another tough year for Jeff Clark and the Stansberry Short Report.

Jeff achieved a 50% win rate over the time period... But the losers overcame the winners, resulting in negative returns. One of the biggest reasons for poor performance was bad timing on precious-metals trades.

In response to the poor performance, we've worked with Jeff to incorporate more conservative trading vehicles into the Stansberry Short Report. We're confident that we can greatly improve the Stansberry Short Report's results by using conservative vehicles like stock purchases, exchange-traded funds, and covered calls. We began this conservative tilt late last year. Since then, the returns have been encouraging, with a 25% average return on trades he initiated in the fourth quarter. We plan to build on these early successes and produce a great 2015.

We would also be crazy not to factor in one huge benefit of the Stansberry Short Report. It's a benefit you won't see reflected in the track record numbers. We're talking about Jeff's Direct Line. This is where Jeff posts real-time market updates and extremely short-term trades (called "scalp" trading) ideas. It's one of the most popular features on our website. Many of our subscribers love Jeff's instant market updates.

Since the Direct Line focuses on very short-term ideas (that often require intraday action), we can't record an official track record. But regular Direct Line readers will tell you it's an extremely valuable feature that helps them make money. Based on the feedback and Twitter comments we receive from readers, we know they would give the Direct Line an "A."

New 52-week highs (as of 1/22/15): Automatic Data Processing (ADP), Anheuser-Busch InBev (BUD), CDK Global (CDK), Global X China Financials Fund (CHIX), Cisco (CSCO), CVS Health (CVS), iShares China Large-Cap Fund (FXI), Hershey (HSY), Nuveen Quality Preferred Income Fund 2 (JPS), Altria (MO), ProShares Ultra Health Care Fund (RXL), Travelers (TRV), UIL Holdings (UIL), United Technologies Corporation (UTX), and ProShares Ultra FTSE China Fund (XPP).

In today's mailbag, a subscriber asks Porter about his $40 oil prediction. Send your questions, comments, and concerns to feedback@stansberryresearch.com.

"Porter, what ever happened to that bet you had on $40/barrel oil a couple of years ago? Is it still on?" – Paid- up subscriber Bob Divilio

Porter comment: I've made several bets on the price of oil with well-known energy bulls. I've won most of them. I lost one wager, to Marin Katusa of Casey Research, because I was foolish enough to agree to a 12-month time frame back in the spring of 2012. As everyone should know who has followed my work for any length of time, most of the things I believe are going to happen eventually do... but usually I'm two or three years early. That certainly was the case here, too.

My favorite bet, by the way, was a wager I made with Chris Martenson, the progenitor of PeakOil.com, which is now called PeakProsperity.com. The bet was whether or not the U.S. would exceed its previous all-time high oil production rates. Chris – hanging on to the nonsense he had been publishing for years – insisted that Peak Oil had arrived and therefore it would be impossible for America to set new production records. As you probably know, America is now producing more crude oil than ever before, exceeding its previous all-time high of 9 million barrels per day.

How did that happen? How did America double its production of crude oil in the nine years from 2005 to 2014? The way it always has before: High prices led to massive amounts of investments. Global capital spending in the oil patch went from $200 billion annually to $2 trillion annually. Technology improved. Knowledge improved. And guess what? They found huge new rivers and oceans of oil. What happened next is what always happens next: Prices collapsed.

Markets work. Nonsense theories about the end of the world don't. In my view, Chris Martenson ought to call his business PeakStupidity.com. How anyone with the mental power to tie shoelaces could believe any of his neo-Malthusian views is a mystery to me.

Regards,

Porter Stansberry

Baltimore, Maryland

January 23, 2015