The Latest Proof of the 'Transportation 2.0' Megatrend

What happens in Vegas doesn't stay in Vegas... A timely deal between Hertz Global and Tesla... Matt McCall's '20X' (and counting) call... The latest proof of the 'Transportation 2.0' megatrend... New $999 bonus for Matt's subscribers… Mohammed El-Erian's new inflation variant... Hitting the home stretch at this year's conference...

We're writing to you live from 'Sin City' this week...

And fortunately, at least in this case, what happens in Vegas doesn't need to stay in Vegas...

As we mentioned in yesterday's Digest, dozens of folks from our company have traveled across the country for our annual Stansberry Conference. After "going virtual" in 2020 due to COVID-19 travel restrictions, we've set up shop at the luxurious Encore at Wynn Las Vegas resort this year.

We highlighted presentations from Empire Financial Research founder Whitney Tilson and Ariel Investments Chief Investment Officer Rupal Bhansali yesterday. They both spoke during the morning session.

Meanwhile, another Monday morning presentation proved to be timely... We're talking about part of what our newest senior analyst Matt McCall shared with the crowd gathered in the main Encore Ballroom.

Shortly before Matt took the stage in Vegas, a key deal was announced in the transportation space...

In short, rental-car company Hertz Global (HTZZ) is going electric...

In its first move toward electrifying its fleet of rental vehicles, the company said on Monday that it had placed an order for 100,000 electric vehicles (EVs) from industry pioneer Tesla (TSLA).

Both stocks jumped double-digit percentages with the news... And Tesla's roughly 13% gain pushed it past $1 trillion in market cap for the first time ever.

This order marked the single largest purchase ever for EVs. It represents an estimated $4.2 billion in revenue for the car maker – and is equivalent to one-tenth of what Tesla currently produces in a single year.

As part of the agreement, Tesla will make and supply Model 3 sedans that Hertz will make available for rent in the U.S. and Europe in the fourth quarter of 2022. Drivers will have access to Tesla's current charging infrastructure, and Hertz also has plans to build out its own network of chargers – which is another huge trend in the future of transportation.

The deal speaks incredible volumes about Tesla's position in the growing market. In fact, Hertz CEO Paul Stone went as far as to say...

Tesla is the only manufacturer that can produce EVs at scale.

That would mean General Motors (GM) can't do it... Ford Motor (F) can't do it... Toyota Motor (TM) can't do it. You get the point.

In the end, no matter how you feel about the company, this puts Tesla in a very favorable position for the future of transportation and what will inevitably be a multitrillion-dollar shift in the industry.

In the past, we've been critical about Tesla at Stansberry Research...

Frankly, even today, not all of our editors like the company.

That's OK, though... Remember, at Stansberry Research, our editors and analysts are allowed to have their own thoughts and opinions. They just better come armed with the facts to back them up.

And when it comes to Tesla, Matt has brought the facts for years... He has proven to be spot-on with his bullish stance amid plenty of critics – both here at Stansberry Research and in the outside world.

At the 2019 Stansberry Conference, Matt went against the crowd and spoke highly of Tesla's potential. Not all were in agreement. In fact, some other panelists went as far as predicting bankruptcy for the company.

So it was only fitting that the Hertz-Tesla news broke as Matt took the stage on Monday morning...

Here's the kicker... Tesla's stock is now up roughly 20 times since his bullish comments two years ago.

The Tesla-Hertz deal provided a perfect transition into Matt's presentation on 'Transportation 2.0' this year...

As Matt mentioned in his launch issue of The McCall Report and in last Saturday's Masters Series, this is one of the dozens of "megatrends" that he sees coming in the next decade. He's calling it the "Roaring 2020s."

According to Bloomberg, EVs represent a $7 trillion opportunity during the Roaring 2020s. That's a remarkable number.

As the leader in the space, Tesla should do well. But during his presentation on Monday, Matt went much further... He shared the names of more than a dozen companies that could potentially shine from this Transportation 2.0 megatrend as well.

In fact, we thought Matt's conference presentation was so important that we're "unlocking" access as an added bonus for all of Matt's MegaTrend Investor subscribers. This access is usually reserved solely for conference attendees... But if you've subscribed to his new publication, you'll receive full access to his conference presentation as soon as we have the final video to upload.

Out of fairness to his subscribers and conference attendees, we can't go into too much detail here. But as we mentioned, during his presentation yesterday, Matt highlighted about two dozen totally new ideas for your watch list... as well as an incredible overview of the megatrends that he's focused on for his subscribers.

It's an extra $999 value... And along with all the other bonuses attached to his current MegaTrend Investor offer, this is the best deal we ever expect to make for his charter subscribers.

Of course, Transportation 2.0 is just one of several incredible megatrends that Matt believes will develop over the course of the Roaring 2020s. What happens throughout the next decade could alter the course of your financial future. And it all starts now.

With that in mind, we encourage you to watch Matt's full launch presentation for MegaTrend Investor in front of a live studio audience...

You'll learn all about these megatrends – as well as the details about our special offer to become a charter member. Watch it for free right here. And just for tuning in, you'll get the name and ticker symbol of a little-known company that he believes has "100x" upside potential in the coming years.

The Tesla-Hertz deal wasn't the only topic in the headlines being discussed at the Stansberry Conference. In the first presentation this morning, prominent economist Mohammed El-Erian talked about something else on everyone's minds – inflation.

In short, El-Erian told conference attendees that inflation isn't going away anytime soon...

We've written a lot lately about how the Federal Reserve wants you to believe that the ongoing bout of inflation – running at 5.4% – is "transitory"... that is, temporary.

But that's looking like an increasingly tenuous assertion... That's partially to the nature of inflation has changed, as El-Erian explained to the audience this morning. He spoke via a video from London, with Grant Williams, a frequent conference guest.

As El-Erian – the former CEO and co-chief investment officer at investment-management firm PIMCO and current adviser to global financial-services provider Allianz – noted...

We've transitioned from a world of inadequate demand to a world where the supply side is a problem.

Often, inflation stems from a surge in demand. That has certainly been one piece of the puzzle in the post-COVID-19 economy – for example, retail sales in September jumped by an incredible 13.9% compared with the same month last year.

But this time around, while catch-up demand is fueling inflation, there is also huge pressure from the supply side of things. As we reported in the Digest last month, the challenge is that the global supply chain has too many weak links. It's a double whammy that's compounding rising inflation.

Supply-chain problems, El-Erian thinks, aren't going away for "a couple of years." That's a lot longer than what Fed Chair Jerome Powell suggested last week, when he said that supply-chain issues are "likely to last longer than previously expected, likely well into next year."

In other words... unless you define "transitory" as "for the next two years at least," it's time to get used to current (if not higher) levels of inflation.

El-Erian also cautioned that because of the different nature of inflation this time, the probability of a "policy mistake" is greater than in years past. Because of persistently high inflation, central banks around the world – and the U.S. Fed in particular – will be forced to tighten monetary policy, by raising interest rates and by reducing its asset purchases.

But getting the timing right on that kind of major-policy shift is always difficult, even in the best of times. If the central bank raises interest rates too soon, it risks putting a damper on economic growth... and if it does it too late – which El-Erian suggested is an increasing risk now – inflation will be more difficult to bring under control.

Given the high valuations of so many assets... have markets lost touch with reality?

Markets have behaved rationally in "pushing the everything rally as high as can be," El-Erian explained, because of the many trillions of dollars that the Fed has pumped into the global economy. More from El-Erian...

If I tell you that whatever asset you buy, the next buyer after you is going to legitimize your purchase by pushing the price higher, and also provide the liquidity in case you change your mind... if I tell you that buyer has an infinite balance sheet, a willingness to use it, and is non-commercial [that is, doesn't require a return on its investment] – and will buy at any price – you would front run that buyer, all day long."

By "front run" he means buying or selling an asset based on knowledge of a future transaction... It's often illegal, but not in this case.

So the "everything rally" isn't driven by investors with no sense of value... Rather, El-Erian thinks, it's the knowledge that there's a "greater fool" – in this case, the Fed and the endless liquidity that it has pumped into markets – out there to buy at a higher price.

El-Erian also shared the investment books he likes to read...

What I have found really helpful is reading books on behavioral science, and how we tend to frame things in a particular way, and how we can have blind spots that evolve.

More specifically, it's helpful to focus on "active inertia." That is when we recognize that we should be doing something different, but we end up doing the same old thing anyway.

To illustrate this concept, El-Erian employed an amusing example of the stereotypical-American tourist in Paris, who needs directions and goes up to a French person and speaks in English...

The French person either doesn't understand English, or doesn't want to understand English and just shrugs. The most likely response of the tourist is to say exactly the same thing in English... but louder.

The "active" part here is, I have to change something... but the "inertia" part of the equation here is saying the same thing – with, of course, the same inadequate results.

Unless we understand our own behavior, El-Erian said, we'll make the same investment mistakes... and those mistakes can rapidly multiply. As he explained,

It's so difficult to override our human tendencies... but if you want to be a successful investor, you have to step outside of yourself.

After the chat between El-Erian and Williams, the strong momentum of the second day continued...

Dr. Steve Sjuggerud and Brett Eversole from our True Wealth team and WallStreetBets founder Jaime Rogozinski wowed the crowd in the first morning session. (We hope to share more details about these presentations in tomorrow's Digest.)

In the final session before lunch, the crowd also heard from Joel Litman, the founder of our corporate affiliate Altimetry... John Doody, the editor of our Gold Stock Analyst newsletter... and Miles Everson, the CEO of workforce-solutions provider MBO Partners.

We're now hitting the home stretch at this year's conference... As we go to press, our colleague Thomas Carroll, Cannabis Capitalist editor ‒ a longtime analyst in the health care sector ‒ is on stage talking about four things that will save your money... and life.

We have one more session of three speakers tonight... And then, we'll conclude things here in Las Vegas tomorrow with our annual lifetime-members-only Stansberry Alliance meeting.

If you're interested, you can still claim access to our online "All Access Pass." Even after the conference ends, you'll have 60 days to review everything with our online archive. Get all the details right here.

New 52-week highs (as of 10/25/2021): Analog Devices (ADI), Automatic Data Processing (ADP), Asana (ASAN), Bath & Body Works (BBWI), CBRE Group (CBRE), Costco Wholesale (COST), Cintas (CTAS), Freehold Royalties (FRU.TO), Formula One Group (FWONA), Home Depot (HD), ICICI Bank (IBN), Intuit (INTU), SPDR S&P Regional Banking Fund (KRE), Markel (MKL), Martin Marietta Materials (MLM), Cloudflare (NET), Northrop Grumman (NOC), New Residential Investment (NRZ), Invesco S&P 500 BuyWrite Fund (PBP), Ryder System (R), VanEck Vectors Russia Fund (RSX), Rayonier (RYN), ProShares Ultra S&P 500 Fund (SSO), ProShares Ultra Financials Fund (UYG), Vanguard S&P 500 Fund (VOO), and SPDR S&P Oil & Gas Exploration & Production Fund (XOP).

Today's mailbag includes more feedback from subscribers about our colleague Dan Ferris' Friday Digest on former President Donald Trump – including a response from Dan about his "knock" on the Catholic faith. Send us your thoughts, comments, and observations on the markets at feedback@stansbrerryresearch.com.

"Dan, I always enjoy hearing your thoughts on financial matters. I enjoyed reading your discussion of President Trump's new venture.

"I recognize that you try to remove all emotion from your investing decisions, but some people may not be as disciplined. Many Americans are extremely frustrated with the state of this country, and view this new company and product (assuming it is launched) as a possible improvement.

"So the rise in the SPAC stock price is not a reflection of irrationality, but of hope for a better future. Just my two cents." – Stansberry Alliance member Mike T.

"Dan, I value very much your work at Stansberry and you financial analysis.

"But, as a Catholic, I feel the [section on Catholicism] from your last article is derisive and disrespectful, a pointless offense to all Catholic believers.

"A real fall of style from you. Pity!" – Paid-up subscriber Claudio N.

"Wow, is your God the almighty dollar? Your judgment of the sacred need not be part of the Digest, especially when you appear to knock the faith of your Catholic readers. It was so disgusting that after being an Alliance member from its beginning, I don't think much of Stansberry Research no matter how great you think you are." – Paid-up subscriber Joseph U.

Dan Ferris comment: If my God is the almighty dollar, I sure have a funny way of showing it. I've left millions – maybe even tens of millions – of dollars on the table by not prioritizing newsletter sales over the past 20 years.

I was raised Catholic... I went to Catholic schools for 12 years, an experience for which I'll always be grateful to my parents for insisting upon. I don't criticize the Catholic Church like so many people do today.

I used the words "sacred mystery" in last Friday's Digest with zero sarcasm or irony. Given the heavy sarcasm elsewhere in that Digest – and in general when I write – I can understand how my intention might've been misconstrued.

But rest assured... I did not mean to "knock the faith" at all.

"Since you ignored the biggest market story of the day yesterday, can't wait to see how you'll badmouth and 'mansplain' Tesla today... LOL." – Paid-up subscriber Peter C.

Dean Jones Jr. comment: Peter, today's Digest is for you. We hope you enjoy.

Good investing,

Kim Iskyan and Dean Jones Jr. Las Vegas, Nevada October 26, 2021