The Bottom Line on the Trade War Truce

Good news from the G-20?... The bottom line on the trade war truce... Whitney Tilson's big winner... In the mailbag: Your thoughts on 'the most important Digest Porter has ever written'...

Break out the champagne...

The on-again, off-again trade war is apparently "off" once more, following this weekend's Group of 20 ("G-20") summit in Osaka, Japan. As the Wall Street Journal reported on Saturday morning...

President Trump and Chinese President Xi Jinping agreed to a cease-fire on trade that will remove some curbs on Huawei Technologies Co. buying high-tech equipment from the U.S., for the moment lifting one cloud over the global economy.

Under the cease-fire, the U.S. agreed to put off additional tariffs on Chinese goods indefinitely. In response, China will start buying large amounts of American farm products, Mr. Trump said.

Of course, we'll understand if you're not ready to celebrate just yet...

After all, the move appears to be little more than a temporary truce to allow the U.S. and China to restart trade talks for the third time.

The two previous rounds haven't exactly gone well. And while U.S. President Donald Trump claimed the two countries are now "right back on track" to reach a trade deal soon, the Chinese government isn't so optimistic. As news service Reuters reported that evening...

China and the United States will face a long road before they can reach a deal to end their bitter trade war, with more fights ahead likely, Chinese state media said after the two countries' presidents held ice-breaking talks in Japan...

"Even though Washington agreed to postpone levying additional tariffs on Chinese goods to make way for negotiations, and Trump even hinted at putting off decisions on Huawei until the end of negotiations, things are still very much up in the air," [the China Daily] it said in an editorial late Saturday.

"Agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level."

In short, for all the fanfare, it appears little actual progress has been made so far...

While the U.S. will refrain from enacting new tariffs on Chinese imports for now, the existing tariffs will continue to weigh on the economy. Meanwhile, the two countries reportedly remain as far apart on an actual deal as they did in May, when talks last broke down.

We agree with Steve Sjuggerud: An amicable trade resolution is in everyone's best interest. But we're not holding our breath just yet.

Switching gears, last week brought some great news for our friend Whitney Tilson...

As regular Digest readers know, Stansberry Research helped Whitney launch his brand-new investment research firm back in April.

And as of last Thursday, subscribers to his flagship Empire Investment Report are already well on their way to their first big win...

Whitney recommended real-estate holding company Howard Hughes (HHC) back in May...

His thesis was simple: Howard Hughes owns a diverse, one-of-a-kind collection of world-class properties. According to his detailed "sum of the parts" analysis, these properties were worth at least $6.3 billion – or $145 per share – using conservative estimates. And yet – in part, because of this unique collection of assets – the market was valuing shares at less than $110.

He believed this situation was unlikely to last long. One way or another, the market would begin to realize the company's intrinsic value. And when it did, shares would soar.

But even he didn't predict it would begin this quickly...

On Thursday, HHC surged more than 35% on news that the company had hired investment-banking firm Centerview Partners to explore "strategic alternatives," including a sale or partial sale of the company.

In short, like Whitney, it appears the company's management believes the market is significantly undervaluing the company's assets. And it's now exploring steps to change that.

Whitney shared his thoughts on the news in his free Empire Financial Daily e-letter on Thursday...

The stock was briefly halted at $120 and has since traded north of $126, which is still well below my conservative estimate of its intrinsic value of $145, which I detailed in my report.

Howard Hughes has always been something of an orphan stock for two reasons: One, because of its hugely diverse collection of assets. And two, the fact that it's a real estate company, yet is structured as a C-corp, not a real estate investment trust ("REIT"). In addition, it can't be valued using traditional metrics like current funds from operations ("FFO"), as it's still developing many of its properties, or on its dividend yield (it doesn't pay one).

Thus, its true value wasn't reflected in its share price. Today's news is obviously rectifying that, at least in part. I think that a transaction – a sale of some assets or the entire company – is likely later this year, and I continue to recommend the stock.

Unfortunately, as of today, shares are now trading above Whitney's maximum 'buy' price...

But he has identified two other dramatically undervalued stocks with similar upside potential. In fact, he expects both could double or more in the next year or two.

And for a limited time, you can get instant access to both these recommendations – along with all of Whitney's Empire Investment Report research – for 40% off the normal price. Click here to get started now.

New 52-week highs (as of 6/28/19): BHP (BBL), Western Asset Emerging Markets Debt Fund (EMD), Hannon Armstrong Sustainable Infrastructure Capital (HASI), Ingersoll Rand (IR), Nuveen Preferred Securities Income Fund (JPS), Legg Mason (LM), Lockheed Martin (LMT), iShares iBoxx Investment Grade Corporate Bond Fund (LQD), McDonald's (MCD), NovaGold Resources (NG), Royal Gold (RGLD), and Stryker (SYK).

The mailbag is overflowing with comments and questions on Porter's latest Friday Digest missive. Stay tuned... We'll share and respond to as many as we can over the next several days. In the meantime, you can send yours to feedback@stansberryresearch.com.

"Bravo Porter! Yes, reading [Friday's] Digest took time, but the important things in life often do. Everyone should just suck it up and spend the time needed on this one! Grab some coffee or a drink, drop the excuses and create the time needed to read it.

"After over 2 years as a loyal subscriber and daily reader it is abundantly self-evident that you (Porter) and the vast majority of your team/company actually are all about education and providing the information that you would want if our roles were reversed. Just wanted to say thank you for showing passion in educating all of us on what the horizon holds and helping us navigate the pitfalls and gain knowledge to protect our families. You put a lot into that Digest and it's appreciated!

"One last thing that needs to be said... It bugs me when people comment that, 'They are just trying to sell you something.' So what? Anyone with a brain should know most of your information or events will come with a pitch because Stansberry Research is a BUSINESS.

"What people need to understand is you all have always been faithful to provide sound information and Golden knowledge before any pitches. Not to mention often actual picks that go along with the idea. The vast majority of what has made me a better investor is Stansberry Research. Your beginner's guide to investing was one of the most basic yet powerful little books on investing I have read. Easy to understand and ideas I never thought of before. A must read for newbies. Tune in folks! Ya just might learn something!" – Paid-up subscriber Erik F.

"Hi Porter, your latest Digest did not convince me to do anything differently. I'm already holding gold and silver, about 8% of my net worth. I also have Bitcoin and other cryptos at about 5% of my net worth. I bought my first Bitcoin at $1,100 in April of 2017. I have pulled my original investment in Bitcoin out of the market so now I am just playing with house money. I say you didn't convince me to do anything differently because you and the other writers in Stansberry Research, Palm Beach, Bonner and Partners, etc. have already convinced me. I'm with you all the way." – Paid-up "very satisfied" Stansberry Alliance member Charles M.

"[Friday's Digest] is why I remain a multiple publication subscriber. Thank you. Oh, re Gilder, I look forward to hearing him again at the Freedom Fest in July and reading his newest book. Wish you were there too. I have already signed up for his new letter." – Paid-up subscriber Robert B.

"Porter, this is my first time writing to you. I have been following most of your publications for some many years. I have made plenty of mistakes along the way. You, Steve, Doc, and Dan have provided many important lessons over the years. Some I learned quickly some I am still working with.

"The most important lesson has been to take my emotions out of my investing which was helped enormously by Dr. Smith's TradeStops. I have already been in gold and gold stocks thanks to Steve's Commodities recommendations as well as Dan's best idea he has ever had. I have thought crypto currencies were too complicated for me, but I will put some effort into a better understanding, thank you for the nudge.

"In closing let's not forget that true riches in life are the relationships we build with family and friends we love and those we meet in our everyday lives not how many gold coins we have." – Paid-up subscriber John C.

"Porter, it is not very often that I would take the time to respond to any publication, opinion piece, etc.! However, after reading this issue I felt compelled to share some feedback!

"First, I would argue that your point about, there is no teaching, only learning, fails my sniff test! You can call it what you want, but the financial education you and your entire staff has afforded me over the years has been invaluable! I would call that teaching! Thanks so much! Second, agree this is probably the most important issue ever (read it twice)! I found it to be extremely informative and timely!

"Just to let you know that I have been learning, I am happy to advise that I am positioned in gold, silver, and Bitcoin! I sleep well at night knowing that I am prepared better than most when the [crap] hits the fan! All thanks to you and your staff. Look forward to your coming issues and learning from professionals! Please keep up the outstanding work!" – Paid-up subscriber Harvey R.

"Hi Porter: I always appreciate your long missives explaining, with facts, what we (I) should be doing with my money. Fortunately for me, I have been buying Bitcoin and other 'cryptos' for years. I got into Bitcoin (BTC) first when 'Blockchain' was the only wallet available, and eBay was the only place I knew to buy it. I got two BTC for $100 each. I think it was in 2013. I've held and accumulated more along the way. This will be the basis for my retirement.

"Of course, I've been accumulating gold and silver, in the form of coin, both collector and bullion (Silver Eagles and Gold Buffalos) for many years before BTC. I've had about 20 junior gold miners for at least five years, waiting and waiting; but seeing and believing these will pay off in the near future. Now, with gold still relatively cheap, after reading [this] Digest I am going to purchase another five gold eagles, to add to my 'insurance policy.'

"Thanks for spending the time to update what's important in the financial world. It's obvious you are passionate about these issues and genuinely want to help a lot of people understand what is truly important to survive and prosper. I appreciate it." – Paid-up subscriber John L.

Bravo! I want to compliment Porter and the entire Stansberry team on the integrity with which you run your business. I am, frankly, astonished at how scrupulously Porter has honored his commitment to Alliance members by making all new products available to the Alliance membership. Other newsletter publishers are not so scrupulous. The Alliance membership is the single best investment I have made." – Paid-up Stansberry Alliance member Andy V.

"Porter, big UP's for bringing John Doody on board. Way back when his letter was the other subscription that I purchased along with the basic Stansberry Research one. Now I'm an Alliance member but I have missed John's analysis. He led me to many great metal stocks back in the last gold melt up starting in 2009. Congratulations on an excellent addition to the Stansberry team." – Paid-up Stansberry Alliance member Jim H.

"Can't tell you how happy I am to soon be able to access John Doody's service once again in my Flex subscription. Next to Steve 'Ouija Board' Sjuggerud, he is my favorite. Good work." – Paid-up subscriber Dean H.

"That's FANTASTIC NEWS!! My Alliance membership investment keeps yielding more and more benefits. Thanks Porter and company and welcome to John Doody!" – Paid-up Stansberry Alliance member Bryan B.

"Welcome to the dark side, Porter. I've been scratching my head with your take on BTC. It seemed to address all of your worst fears... Having read this, the grass looks greener, food tastes better, and the sun is brighter... Cheers to you and yours!" – Paid-up subscriber B.T.

" I am so pleased to see that we Alliance members will be receiving Mr. Doody's publications. I have subscribed to 'Gold Stock Analyst' for several years, since Porter first recommended John's work. I have found his work to be excellent and have financially benefited from his advice on several recommendations. And continue to do so now. I hope all Alliance members learn how important this development is for us. Thank you for looking out for us in such a great way. Stansberry is the GREATEST! Can hardly wait to see how it is integrated into your work." – Paid-up Stansberry Alliance member Harry G.

"Early this decade, Porter said 'higher interest rates were going to be the investment of this decade.' That was not a good call with only 6 months to go. Why did he make this call and what didn't he see that occurred? I do feel what he is saying now will be correct, but he made a bad call on interest rates that does cloud my view on what he says. Thank you." – Paid-up subscriber Mark W.

Porter comment: You're quite correct. The Treasury market didn't react at all like I expected. In about 2015, I started trying to figure out why. I discovered the empirical work of Dr. Lacy Hunt. He convinced me that, given enough debt, the markets invert.

"Thanks to Porter for the timely and lucid explanation of the next phases of the ongoing global financial crisis. I'm totally on board with his recommendations on gold and mining stocks but like many others I have major reservations about 'investing' in bitcoin or other crypto currencies.

"I appreciate the pro bitcoin arguments made by smart guys like Porter, Doug Casey & others, and also wish I'd bought some in 2011, but the following cons still seem like very convincing reasons to steer clear of cryptos:

• fails Aristotle's 'intrinsic value' requirement of good money

• fails Mises' requirement that sound money not be subject to rapid appreciation or depreciation

• many highly respected investors (e.g. Buffett) have huge reservations or total disdain

• still subject to hacking, fraud & theft at least through the exchanges

• government likely to eventually find a way to control or outlaw it

"Block-chain technology clearly has value in a rapidly growing number of distributed ledger applications, but this has been grossly over-sold by crypto currency advocates as somehow supporting bubble-like valuations. Secure distributed databases (e.g. the internet domain name service) have been around for a long time.

"Finally: How can Porter believe 'it's growing more likely that bitcoin becomes a viable new global reserve currency,' when it represents such a huge threat to all governments? I think Porter's response would be of great interest to many readers. I did sign up for Gilder's presentation on July 2, so perhaps these concerns will be addressed there." – Paid-up subscriber Tom F.

Porter comment: Tom, I completely respect your skepticism. I shared your views for a long time – I made the exact same arguments in the exact same way!

Why? Because I didn't understand the software. It made no sense to me that computer code could be mined or that such a system could be devised to link rising computer productivity to the cost of producing the secure blocks.

The code, when you finally understand it, is a breakthrough of historic proportions. It is the equivalent in computer science to Einstein's theory of relativity in physics. It represents a critically important new way for humans and machines to communicate and cooperate. It is that important.

I am not a novice in regard to monetary theory or to the practical applications of such in real markets.

And I say, sincerely and respectfully, that your analysis is simply wrong, on each count. I would urge you to read Satoshi's white paper, to read Gilder's books, and to keep asking questions until you see the answers to the objections you raised. Those answers are out there.

I look forward to doing my best to explain my view. And again, I appreciate your skepticism as it helps me to refine my own thinking and communicate more effectively to others.

"I thought we were done with the idiotic phrase 'There's no such thing as teaching, there's only learning.' Silly me! You responded to my previous explanation of the priceless value of teaching with 'LOL,' so I'll try using language that even a pig-headed ignoramus can understand:

• BOTH teaching and learning occur every time somebody explains something to another person or shows them how to do something.

• The claim that "There's no such thing as teaching..." is an obvious lie. (You use the word 'teach' at least twice in [this] Digest!)

• Repeating this claim every time you write something makes you a liar.

• I do not associate with liars and I do not trust advice of any kind from them.

"I will be cancelling my subscription to the Investment Advisory on Monday morning. If I see this ignorant nonsense again, I will also cancel my subscription to the Innovations Report." – Paid-up subscriber Bill M.

Porter comment: LOL.

"Great Friday note! Quick question, please: How can we reconcile the urgency to act that you expressed in Friday's note with the following excerpt included in Tuesday's Stansberry Digest?

"'In fact, almost every gold momentum and sentiment indicator we follow has reached multiyear extremes that suggest at least a short-term correction is likely. So we'd recommend waiting for a pullback before making significant new purchases in the sector.'

"By the way, I very much appreciate you looking out for us! It's truly refreshing to see that someone cares. Many thanks." – Paid-up subscriber J.P.

Brill comment: Thanks for the question, J.P. The simple answer is that our Tuesday warning was short term in nature. After closing higher for six straight weeks, we believed gold was due for a "breather," and that patient investors would likely get an opportunity to buy at better prices in the days or weeks ahead.

That's exactly what has happened so far... In fact, gold peaked near $1,440 an ounce that same day. It has fallen a little more than 3% over the past four days. Gold stocks – as tracked by the VanEck Vectors Gold Miners Fund (GDX) – have declined more than 5% over the same period.

However, this message was meant for folks who have already established at least a partial position in gold and silver. If you don't yet own any precious metals, it's still a great time to start accumulating.

Again, if you're interested in the absolute best deal on all of our gold and silver research – including John Doody's excellent Gold Stock Analyst, as well as any and all new gold and silver research we publish in the future – you owe it to yourself to learn more about our brand-new Stansberry Gold Alliance.

While we were initially going to close this offer after 72 hours, we received a lot of questions and feedback about the service. So we've decided to keep it open for a limited time. Click here for all the details.

Regards,

Justin Brill
Baltimore, Maryland
July 1, 2019