"Right now is the greatest moment to be an investor in my nearly two decades in this industry," Steve Sjuggerud wrote in the most recent issue of True Wealth.
That's because of what he called the "Bernanke Asset Bubble."
Steve has been writing about the Bernanke Asset Bubble since August 2010. In short, he predicted Federal Reserve Chairman Ben Bernanke's easy-money policies would boost all asset classes. And if you put your money into the market back then, you've made a fortune...
As you can see in the chart below… the stock market is up since Steve's call. So is real estate up? Agriculture and farmland are up as well...
Since Steve originally wrote about the Bernanke Asset Bubble, the Fed chairman has gotten even more aggressive with his money printing... Bernanke will add $1 trillion to the Fed's balance sheet this year – bringing the total debt to $4 trillion. And the Fed won't raise interest rates "as long as inflation isn't forecast to rise more than 2.5% in the future and as long as unemployment remains above 6.5%," according to the Fed's statement last December.
Steve believes the stock market could rise 95% from current prices in the next three years... And that would only put stocks at fair value. He sees three reasons stocks are set to soar today. From the March issue of his True Wealth newsletter…
1) U.S. stocks are the best value they've ever been during my investing lifetime. The upside potential in U.S. stocks over the next three years could be the biggest in my near-20-year career. And all stocks have to do is return to their average.
2) Zero-percent interest rates are here to stay. Low interest rates are the real "rocket fuel" to this boom. The good news is there's no chance the government will raise interest rates over the next two years. Meanwhile, we have perfect "Goldilocks" conditions for investing... not too hot, not too cold – JUST RIGHT. THIS is the investing sweet spot... This is where the biggest gains happen over the longest stretches.
3) Lastly, today's zero-percent rates will force Mom and Pop America to "migrate" into the U.S. stock market... pushing the stock boom into "bubble" territory, possibly in 2015.
In short, stocks remain cheap. And the low yields available in bonds will force investors, en masse, into stocks. This trend is just now beginning... But Steve believes it will reach epic proportions.
To sign up for True Wealth and see exactly how Steve recommends playing this trend, click here... You can read True Wealth at zero risk. We offer a 100% money-back guarantee on the product, no questions asked.
For the first time since 1973, the U.S. will become a net exporter of liquefied petroleum gases (LPG).
LPG is primarily a mix of natural gas liquids propane and butane. It results as a byproduct of the extraction of oil or gas resources and from the oil-refining process. LPG is mostly used for heating, cooking, and fueling vehicles.
Now, Bloomberg reports that U.S. daily LPG exports hit a record 194,000 barrels for January through November last year. It imported 169,700 barrels, making the U.S. a net exporter for the first time in 40 years.
German transportation lender DVB Bank SE says seaborne LPG trade totaled 100.6 million tons last year – up 16% from 2010. Shipbroker Braemar Seascope expects the U.S. to export more than 5 million tons this year... up from 3.7 million tons for 2012 and then hitting more than 7 million tons next year. "After that, it's anybody's guess," Nick Wright, a shipbroker at Braemars, told Bloomberg. He said some are predicting as much as 20 million tons by 2020.
"We are seeing a game-changer because of this era of shale gas," added Stephen Wilson, director of Braemar's gas department...
In his December issue, Porter told readers of his Investment Advisory about the "New Politics of Energy." He explained to readers the difficulties the U.S. faces in exporting its newfound abundance in oil and gas. He detailed how the export boom would develop. And he gave readers a great insight into his favorite way to play it…
Out of all of these opportunities... the best one might be propane. There are no significant political or technological hurdles, as propane is much easier to transport than natural gas. The only problem is that the current export facilities are overloaded. That's a problem we know how to solve.
... as we explained, the core barrier to explosive growth is export capacity. So the owner of the port has the most pricing power. Is there a company that specializes in NGL export facilities? Does it have a presence in the most prodigious shale plays? Does it own big enough fractionation centers and the necessary storage domes?
Two companies fit the bill, Porter explained. He went on to recommend one… Out of respect to Porter's paying subscribers, we can't name the company here. But we can tell you his thesis is playing out as expected… Readers who followed Porter's recommendation are up 30% already in just two months.
New 52-week highs (as of 2/15/13): Berkshire Hathaway (BRK), ProShares Ultra Health Care Fund (RXL), Sequoia Fund (SEQUX), Targa Resources (TRGP), Pepsico (PEP), Abbott Laboratories (ABT), Johnson & Johnson (JNJ), Ericsson (ERIC), Chicago Bridge & Iron (CBI), American Financial Group (AFG), Chubb (CB), Travelers (TRV), Blackstone Group (BX), Kohlberg Kravis Roberts (KKR), Union Pacific (UNP), Activision Blizzard (ATVI), and Teekay LNG Partners (TGP).
In today's mailbag… one subscriber chimes in on our Digest Premium comparison of Apple and Intel… and another lobs a cherry bomb Dan's way. Send your comments to feedback@stansberryresearch.com.
"Your response to the investor who wondered about 12% Letter returns is totally wrong. Once again, you continue to add two completely different percentage numbers to reach a ridiculous conclusion. When you cite a percentage increase in the dividend, that number is not the same percentage increase in the return on investment.
"For instance, you say a WDDG has a dividend return of 3.6% of investment price (if the share price was $40, then the 3.6% dividend would be $1.44), then you say that the dividend is increased by 8.4%, which in our example would increase the annual dividend to $1.58. You then erroneously suggest that the return on investment has now become 11.97%. Nothing could be further from the truth.
"For the investor's return to rise to 12%, the dividend would have to be an unlikely $4.80 – that is 12% of $40. You are fooling your clients when you make these silly mathematical mistakes of adding together completely different percentage values. We clients understand that you are not going to be able to find safe investments that return 12%, we know that is virtually impossible without taking major risks. Don't insult our intelligence by claiming that you are indeed raising our returns to 12%." – Paid-up subscriber Cecil Rhodes
Ferris comment: I believe you're referring to the following sentence, from the most recent 12% Letter weekly update: "Using the recent dividend-growth rate as our projection, you get an expected return of about 11.97% for 2013." I could have been clearer... so let me clarify what I wrote.
That should have said, "Using the recent dividend-growth rate as our projection, you get an expected average total return of about 11.97% over the long term, for as long as that growth rate holds up."
The error isn't really that bad. There's as much reason to expect a stock to generate its average long-term rate of return in 2013 as any other year. But technically speaking, that's not how I want to represent the technique of adding the current yield to the dividend-growth rate.
Here's what Cecil doesn't understand about the numbers... Adding the current yield to the dividend-growth rate is a simple and widely used technique for estimating future LONG-TERM AVERAGE rates of TOTAL RETURN on dividend-paying growth stocks. If a stock has a current yield of 3.6% and the dividend grows at an average rate of 8.4% over the next several years, it's not unreasonable to expect to make roughly 12% in pretax TOTAL RETURN (dividends plus capital gains) ON AVERAGE OVER THE LONG TERM, for as long as that rate of dividend growth holds up.
Also… though I implied you could expect the long-term average total return projection to come true in 2013, I never said an 8.4% dividend growth would change a 3.6% current yield to a 12% yield in one year... I didn't make it clear that I was talking about total return, but I never said "current yield" or "next year's current yield."
So I stand by what I wrote, even though it didn't come out as clearly as I had intended.
"Salivated on your comparison of Intel/Apple because we're in sync and capital efficiency definition certainly fits. Like both companies, but sold much of AAPL in 2012 with parabolic move, growth ceiling on the horizon and of course tax considerations. Your tagging of AAPL as a consumer company with competitive challenges on the horizon is prescient.
"Continue to trade around on INTC selling puts and calls, while retaining core position and collecting great dividend for tech stock. Your belief the 'gorilla' will also become a major force in mobile soon, should never be discounted. Any investor who doubts Intel tenacity to be number one, should study what happened to AMD. Would not want to be long ARMH when the gorilla attacks. S&A has certainly enhanced my investment prowess and enjoyment.
"P.S. Just jumped on your Intel Alpha recommendation and look forward to another winning strategy." – Paid-up subscriber Dave Embry
Regards,
Sean Goldsmith
Delray Beach, Florida
February 19, 2013
I (Porter) am getting excited about emerging markets today. They tend to thrive during inflationary periods. They're cyclical, and they are mostly raw commodities makers. So when the world economy heats up, these markets tend to soar.
My favorite emerging-market indicator is Hong Kong. The Hong Kong stock market (the Hang Seng Index) peaked before the reunification with China in 1997. It reached a new high in early 2000 with the tech bubble. And it bubbled up again in 2006/2007. You had a top in the Hong Kong stock market around 30,000 in 2007.
More important, Hong Kong's monetary policy is tied to the United States'. So with the Fed intentionally increasing liquidity all around the world, a lot of money is going to be heading into Hong Kong... particularly Hong Kong real estate.
Last year, the U.S. was one of the best-performing stock markets in the world. This year, I think riskier markets like India, China, and Brazil will do a lot better than the U.S. They're cheaper, and they will be more influenced by monetary policies.
