The Biggest Risk in Gold Today...
Pawn shops, guns, and gold... A new bull market is here... The biggest risk in gold today... Porter's big announcement... P.J. O'Rourke: Two things every American should know about politics...
As regular readers know, we share a list of the new 52-week highs among Stansberry Research recommendations near the end of every Digest. A quick glance at today's list caused us to look twice...
We see tobacco giant Altria (MO), firearm manufacturer Sturm, Ruger (RGR), and two gold stocks – Reservoir Minerals (RMC.V) and Seabridge Gold (SA) – all hit fresh 52-week highs on Friday. Of course, these are only the highs among open Stansberry Research recommendations...
Outside of our publishing universe, we also see Cash America (CSH) – one of America's biggest pawn shop and payday loan companies – just hit a new all-time high last week... Super-discount retailers like Dollar General (DG) and Dollar Tree (DLTR) are sitting near all-time highs... And even gold hit a new 52-week high on Friday.
That same day, the latest official data from the U.S. Bureau of Labor Statistics ("BLS") showed the economy added 242,000 jobs last month. The BLS also said unemployment remained at an eight-year low of just 4.9%, and the "labor force participation rate" – the percentage of Americans over 16 years old who are either working or looking for work – rose for the third straight month.
Many in the financial media pointed to the report as proof that the U.S. economy is doing just fine, and that worries about a slowdown are foolish.
Maybe they're right... Maybe the economy will keep growing, and the long bull market in stocks will resume.
But we can't help but wonder... If everything is "just fine," why are pawn shops, guns, and gold booming... while most U.S. stocks – as represented by the broad Wilshire 5000 Total Market Index – are down nearly 10% over the last year?
And more important... what happens if they're wrong?
Speaking of gold, we note that the precious metal has now officially returned to bull market territory – defined as a rally of 20% or more from a low.
As we mentioned last week, gold is due for a "breather" after moving virtually straight up since December. But several Stansberry Research analysts believe the rally in gold is just getting started.
As our colleague Ben Morris told his DailyWealth Trader subscribers on Friday, the biggest risk in gold today isn't what you probably think it is...
The price of gold is up 21% since the middle of December... from $1,051 an ounce to $1,272. That's its biggest rally since it peaked in 2011... And historically, such big rallies are almost always followed by corrections – periods when prices fall. That's why conventional wisdom says, "If you missed the rally, buy on a pullback."
"Buy on a pullback" is good advice for lots of people. If you own some gold and have a little money in gold stocks, you'll likely be able to add to your positions soon, at better prices than today's. That's what I plan to do personally. And that's what I plan to recommend in DailyWealth Trader (DWT).
But the biggest risk you face with gold today isn't buying just before a sharp correction. It's the possibility that we don't get a correction, and that you don't own enough... or worse, any at all.
As Ben noted, gold fell from approximately $1,900 an ounce in 2011 to below $1,100 last December. In other words, the big correction many folks have been waiting for is already here. More from Ben...
If you don't have at least 5%-10% of your wealth in precious metals – and you're not buying because you're waiting for a correction – take another look at the chart above...
This IS the correction. It's time to buy gold. While you're at it, buy silver, too. It's cheap relative to gold... Buy some now... and hopefully you'll get a chance to buy more at better prices.
Gold will pull back at some point. But there's no guarantee it will pull back soon... And there's no guarantee that when it does, it will come back down to today's levels or lower. This could be the best day to buy gold for the next 20 years.
Finally, if you missed Porter's Friday Digest, you missed what several subscribers are already calling one of his best essays in years.
You also missed his big announcement about our Bear Market Survival Program...
In short, we've been blown away by the response to this program. These weekly educational modules have been so incredibly popular and well-received by subscribers, Porter has decided to continue the series.
Folks who joined our original seven-part Bear Market Survival Program learned the proper way to raise cash... the best ways to hold gold... how to short stocks... how to take advantage of distressed opportunities in stocks and bonds... and much more. Most important, they also learned exactly how to put all these strategies together to build a complete "bulletproof" bear-market portfolio.
This new seven-part series – which we're calling our "Bear Market Trading Program" – will also teach strategies that are ideal for turbulent markets. But this new series will focus primarily on short-term opportunities.
As Porter explained on Friday, there are lots of different (and little-known) ways to trade the market for safe, short-term profits and income. This program is a little more advanced than the first series, and builds on that education to teach you, step-by-step, exactly how to trade a volatile bear market for big, short-term profits. As he wrote...
Wouldn't you love to be able to say with total confidence, and without a trace of arrogance, that you simply don't care anymore what the market does? That you know – come hell or high water – that your portfolio is going to make 15% to 30% this year?
The first module in the Bear Market Trading Program will be published this Friday, March 11.
Again, this series is more advanced... so we will be charging a bit more than last time. For most subscribers, the Bear Market Trading Program will cost $49 per week.
But if you joined our first Bear Market series, you won't pay that rate. If you simply choose to stay on board and continue your education with us, you'll continue to receive your original $29-per-week rate.
In other words, you'll get the advanced Bear Market Trading Program for the exact same price you've already been paying... a savings of 40% for the full course. (And of course, as always, Stansberry Alliance members will receive this new program for free.)
If you'd like to take advantage of this special offer, we simply need to hear from you before Friday. Click here for the details.
Reminder... there are just 19 days left to claim your FREE OneBlade razor. Get the details here.
New 52-week highs (as of 3/4/16): Altria (MO), Sturm, Ruger (RGR), Reservoir Minerals (RMC.V), and Seabridge Gold (SA).
The mailbag is overflowing today. Several readers share their thoughts on our Bear Market Survival Program, and many, many more respond to Porter's request for feedback from the Friday Digest. Please, keep them coming: feedback@stansberryresearch.com. We read them all.
"Porter... Your 2016 Bear Market Survival Program is in my opinion one of the very best research, planning, and action programs prepared by Stansberry Research. Having been a lifetime member for the past 10 years (+/-) was one of the smartest moves that I implemented after selling my business. Facing the many new challenges that have come along since Y2K has been a lot easier to understand and has been easier to plan for. [Having] Porter at the controls in these turbulent seas and issuing life jackets as we travel along is much appreciated. My thanks and congratulations to a 20 Star organization... Four 5s are hard to beat." – Paid-up subscriber TJ Reeves
"First, thanks so much for your latest module of the [Bear Market Survival Program]. It's a perfect wrap-up to an excellent series of articles that I believe will pay huge dividends in the months ahead... As you mentioned in this Module 7, the gold stocks you recommended in a previous module are doing incredibly well. Looking forward to more gains from those. Thanks so much for the work you and your staff do." – Paid-up subscriber Van C.
"Porter, I have learned so much over the years. But in the last few weeks I have been feeling very confident using the knowledge and skills that I have acquired. But I have to say that the Bear Market Survival Program has given me the kind of insight that I needed to not give changes in the market any thought other than doing the things that have constantly worked for me. I am looking forward to the next series. What I have learned from the current program has given me the wisdom to move into bonds and options. I even made my first short trade. The best thing is that you can't get this kind of education in college or really any other place. All that I have learned has even made me able to take advanced webinars from my brokerage firm and actually understand what they were talking about. Thanks to all of you." – Paid-up subscriber Jeff S.
"Hi Porter, Now that you and your peers have spoiled us, why not continue with the [Bear Market training] modules! Have a great weekend and thanks as I've followed your advice and done nicely in the past four weeks." – Paid-up subscriber Michael G.
"One of your best Friday Digests since I've been reading you, Porter. To you... [and] to your Mom... Thanks for your honest approach and generosity, and the graduate-school-level education you and your great team serve up every day with gratitude." – Paid-up subscriber Chris K.
"Porter, Thanks for all info, I might say it's great. I'm on the lower scale of the income bracket so invest little but I read your Digest to know what's going on in the world and I must say it works. I have invested in some gold and gold stocks just in case the SHTF and at the rate this country and world is going I'm sure it will. Keep us all informed like always and keep up the good work." – Paid-up subscriber Randy
"Porter, please don't stop doing what you do. You'd be surprised how many people's lives you have affected. I've been trying to read all your work and I can honestly say I have never met anyone with your values in life. We do appreciate all you do. I'm learning little by little. I'm not as smart as the average guy, but I'm trying. Thank you for all you do." – Paid-up subscriber Ruben G.
"Porter, Thank you very much for the work you and your associates do at Stansberry Research. I have worked on Wall Street for 30+ years, but have learned more about the right way to invest from you in the last two years than through all my years on Wall Street. I had never shorted a stock (often not allowed by firm rules) nor purchased a publicly traded bond before using your services. It is like fighting with one hand tied behind your back. I agree with you completely on how you are repositioning your business and look forward to a long and profitable relationship with you." – Paid-up subscriber John B.
"Mr. Porter, I honestly can't wait to hear from you every Friday in the Friday Digest! It is my 30 to 45 minute 'home study' & my weekend does not start until it's completed. Thank you very much!" – Paid-up subscriber Pierre
"I treasure Porter's clear-eyed Digest expositions for the intellectual pleasure they provide. To me they are lectures of the highest order. Now that our family has grown its own wealth, in both current generations, it is truly his intellect and sheer dedication that I value, far above any other financial service, of whatever kind. Yes, we have benefitted financially from his insights but now, for us at least, that is almost beside the point. He speaks truth in a world of willful misdirection and oversimplification." – Paid-up subscriber Jerry P.
"Porter, I enjoy all of your work... period! The Digest is just one of the many valuable products you and your team provide. Please continue writing the Digest, and keep up the great work! Also, please pass along my kudos to the entire Stansberry Team. You and your team have definitely changed the way I invest and look at the world... Seriously!
"Last fall I finally became an Alliance member and haven't regretted it since. I have been with your firm since the early 2000's, but couldn't quite make the leap to the Alliance membership until recently. It was definitely a big decision for me to make that commitment, but I'm so happy I was able to finally do it. I'm on track to have it pay for itself in the very near future.
"Lastly, I've been using your OneBlade razor since the first of the year. All I can say is 'WOW'! It's quite simply an amazing shave. Keep doing what you're doing, and Thank You!" – Paid-up subscriber David S.
Regards,
Justin Brill
Baltimore, Maryland
March 7, 2016
Lessons in Politics: It's Not the Chefs, It's the Food
By P.J. O'Rourke
I've been covering politics for 46 years, ever since I began writing for one of those smudgy, goofy, hippie "underground newspapers" in 1970. (Coincidentally, that newspaper's office-turned-crash-pad was in Baltimore, off St. Paul Street, just 12 blocks north of the present-day Stansberry Research headquarters.)
My politics have changed a lot over 46 years, but politics itself hasn't.
What's really wrong is not just a matter of things that are amiss in this particular strange and perplexing political cycle. Political problems are permanent problems.
Covering politics has taught me a few things... although, as Porter always says, "There's no such thing as teaching, there's only learning."
Lesson No. 1: Why the Best People Don't Run for Political Office
There's a book that gives a wise and insightful description of a typical politician's personality. The authors of the book, however, had no idea they were describing a politician. They thought they were describing a mental illness.
The book is the fourth edition of the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders.
The description appears on page 717, under the heading "Diagnostic Criteria for Narcissistic Personality Disorder"...
A pervasive pattern of grandiosity (in fantasy or behavior), need for admiration... beginning by early adulthood... as indicated by five (or more) of the following:
(1) has grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements).
This constitutes the very essence of a candidate's decision to run for office plus the outline for his or her campaign speech.
(2) is preoccupied with fantasies of unlimited success, power, brilliance...
Here are the details of that campaign speech...
(3) believes that he or she is "special" and unique and can only be understood by, or should associate with, other special or high-status people (or institutions).
The special or high-status institutions are the House, Senate, or (for starters) the local zoning commission. The special or high-status people are known as "campaign donors."
(4) requires excessive admiration.
But will settle for yard signs.
(5) has a sense of entitlement, i.e., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations.
Air Force One, executive orders, having Pebble Beach cleared so the chief executive can play golf alone.
(6) is interpersonally exploitative, i.e., takes advantage of others to achieve his or her ends.
Forcing Joe Biden out of the running, luring Chris Christie into an endorsement.
(7) lacks empathy: is unwilling to recognize or identify with the feelings and needs of other.
This diagnostic criterion might not seem to fit because every politician is always telling us how much sympathy, understanding, and fellowship he or she has with us and how deeply he or she is moved by our hopes, our dreams, and our fears. ("I feel your pain.") It's called lying.
(8) is often envious of others or believes others are envious of him or her.
As in a GOP candidate debate – Marco Rubio envies Donald Trump for having real poll numbers, while Trump envies Rubio for having real hair.
(9) shows arrogant, haughty behaviors or attitudes.
Did someone mention Donald Trump?
Lesson No. 2: Why the People Who Are Elected to Office Do Such a Bad Job
As neurotic as the aspirants for political office are, the real problem isn't politicians – the real problem is politics.
Politicians are chefs – some good, some bad. Politics is boiled skunk. The problem isn't the cook, the problem is the food.
Let me restate that: The problem isn't the cook, the problem is the cookbook. Politics is the idea that all of society's ills can be cured politically. This is like a cookbook where the recipe for everything is to fry it. The fruit cocktail is fried. The soup is fried. The salad is fried. So are the ice cream and cake. And your chardonnay is rolled in breadcrumbs and dunked in the deep-fat fryer.
That's no way to cook up public policy.
But politicians have another problem. They are unable to tell us the truth about the menu described above.
Politicians lie to us. But it's not like they have a choice. Think what it would sound like on the campaign stump if a politician told the truth, even an itty-bitty bit of the truth: "No, I can't fix public education. The problem isn't funding, overcrowding, teachers unions, or the lack of computer equipment in the classrooms. The problem is your damn kids!"
I'm not seeing an election victory in that politician's future.
My job is to make fun of politics. But after 46 years of making fun of politics, I've realized that I'm enjoying myself about as much as a grizzly bear getting a bikini wax. I hate politics.
And I don't just hate bad politics, I hate all politics.
Imagine if our clothes were selected by the majority of shoppers, which would be teenage girls. Dick Cheney would have spent two terms as vice president with his midriff exposed.
Imagine deciding what's for dinner by family secret ballot. I have three kids and three dogs in my family. We'd be eating Oreos and rotten meat.
Politics stink. Think about how we use the word politics. Are "office politics" ever a good thing? When somebody "plays politics" to get a promotion, does he or she deserve it? When we call a co-worker "a real politician," is that a compliment?
Nonetheless, we're continually tempted to give more power to politicians. Power of any kind is dangerous. Political power, with its legal monopoly on deadly force, is particularly dangerous.
Politics is a Rottweiler ready to be unleashed on your problems. And you've stuffed that rotten meat down your pants.
Regards,
P.J. O'Rourke