The most consistently successful income strategy of the next decade...
The most consistently successful income strategy of the next decade... Imitators will follow, but you heard it here first... The greatest technological trend of our age... P.J.'s trip across the Pakistan/India border...
Editor's note: Every year, we run a special series of Digests over the holidays... It gives readers an opportunity to revisit some of the best work we've published throughout the year. And it gives the Digest team a few days to spend with our friends and family.
This year, we're featuring several of the most popular essays we published in 2015. Each essay covers an important idea or strategy we shared this year... and each received a huge response from readers.
If you're a new subscriber, many of these ideas may be new to you... but they're worth a review even if you've been with us for years.
Today's essay explains one of the most powerful income strategies in the world...
Also, be sure to read to the bottom for the latest essay from contributing editor P.J. O'Rourke.
In today's Digest... a unique income strategy you've never considered... one that should pay out reliable 12%-plus yields for at least the next decade.
That's not a typo. And it's not a wild marketing pitch.
What we'll cover today is going to be the most consistently successful income strategy in the stock market over the coming decade.
I hope I have your attention. Because this strategy – which not one in 10,000 individual investors is using right now – will put the single biggest technological trend of our time to work for you, every single day.
You won't read about this idea in the mainstream press. No broker is talking about it.
Imitators will follow... but you heard it here first.
This strategy basically allows you to collect a royalty almost every time someone makes a phone call, searches the Internet, reads an e-mail, sends a text message, uses Google Maps, buys a song on Apple's iTunes digital media store, or watches a video on the website YouTube.
You know the use of "smartphones," "smart cars," and computers has exploded in the past 10 years. It's growing every day. Today, we'll cover a "slam dunk" way to generate personal wealth from it.
Don't worry if you're not a computer expert. This doesn't require any computer or gadget expertise.
What's this trend? And how do you collect these "royalties"?
We'll get to the income in a moment...
But first, let's talk about the "Internet of Things."
By now, you've likely heard of – or used yourself – new technological innovations like self-driving cars, refrigerators that order groceries, homes that know to turn off the lights, and health-monitoring devices that send vital signs right to your doctor.
This is the stuff of sci-fi movies just a decade ago.
Now, for many people, it's just everyday life.
Nearly everything we use – our cars, our phones, our appliances, our homes – is becoming interconnected.
Our old, "dumb" phones and cars have been replaced by "smart" ones.
You can talk to them. They can talk to you. They can talk to each other.
For example, right now, you could search for good, local restaurants by speaking into your phone. You might program your home's security system with your iPad. You might adjust your home's thermostat from controls in your car. Your wristband might be transmitting your heart rate to an "app" on your phone.
These are all examples of what people are calling the "Internet of Things." Everyday devices are being plugged into the Internet. It works hand in glove with the explosion of smartphones and portable tablet computers.
Everything is getting connected.
It is the biggest, most important technological trend of our time.
This trend is creating incredible demand for telecommunications bandwidth. It demands faster Wi-Fi connections... faster home cable speeds... more Internet "hotspots." It's creating more demand for the devices that use them.
In a recent report, research firm Gartner noted that global smartphone sales increased 42% from 2012 to 2013. For the first time, smartphone sales outnumbered "regular phone" sales.
The sales numbers are even more impressive in developing markets. Gartner notes that smartphone sales in India increased 166.8% from the fourth quarter of 2012 to the fourth quarter of 2013. Smartphone sales in China increased 86% in 2013.
Gartner estimates that the number of non-PC, tablet, and smartphone "Internet of Things" connected units will grow to 26 billion in 2020. That would be a nearly 30-fold increase from 2009.
Networking giant Cisco notes that 43% of U.S. homes have four or more online devices. It expects the amount of bandwidth consumption per home to grow to four times the current amount by 2015. Cisco expects global Internet traffic to increase threefold over the next five years.
Again, the growth in demand from developing markets is even more impressive. Research firm TeleGeography expects broadband demand in Africa to grow an average of 51% per year until 2019.
This trend is also creating incredible demand for data storage. All the pictures, movies, television shows, and songs you buy must be digitally stored. The information generated by our cars, homes, and appliances must be stored. The data companies collect on their customers must be stored. It must be sifted, filtered, and analyzed.
This is part of the "Big Data" trend you've likely heard of... which is also called "storing things on the cloud."
Research firm IDC says global revenue from public cloud services totaled more than $21.5 billion in 2010 and will reach $72.9 billion by 2015.
Like any big technological innovation, the "Internet of Things" will create lots of millionaires and billionaires. It will produce huge stock market winners.
The strategy we're about to cover will allow the "average guy" to get his share of these profits. It will allow investors to reliably produce double-digit income streams on their stock portfolios. And as we noted earlier, it requires no expertise with iPads, computers, or smartphones.
This strategy is centered on a group of stocks we've labeled "Digital Utilities."
Readers of Dr. David Eifrig's ("Doc," as we call him around the office) services are very familiar with this idea. He and I (Brian Hunt) coined this term years ago.
The idea is a play on the income-producing power of traditional utility stocks... like power, natural gas, and water providers.
Because it doesn't make sense to have a dozen different water or electricity providers, states and municipalities grant monopoly status to traditional utilities. In return, utilities accept regulations that limit their ability to raise prices. Essentially, states and towns assure themselves reliable power in exchange for guaranteeing the companies' profits.
Utilities' unique business position has historically made them terrific income investments. Their dividend payments were so secure that advisors almost always included them in retirees' portfolios.
As "Doc" writes, developments in computers, networks, and cellular phones have created a new kind of utility...
The modern, digital world has given rise to a new kind of utility... one that will be a good friend to folks interested in generating big, safe income.
These new "digital" utilities, as I call them, supply the crucial services and infrastructure of telecommunication. I'm talking about the companies that provide wireless services, semiconductors, software, data storage, and broadband connections.
These companies aren't in super-growth mode anymore... so many investors write them off. But these companies hold dominant, monopoly-like positions in their industries... which allows them to produce steady cash flows... and pay steady dividends.
To give you an example of this idea, Doc asks readers to consider two of his favorite Digital Utilities: Intel and Microsoft.
Intel dominates the semiconductor industry. Microsoft dominates the software industry. Each time you hop on the computer, chances are good these companies will make a tiny bit of money.
But Intel and Microsoft are even better than traditional utilities. They sell their goods and services around the world, so local government regulators can't control them. Regulators can't limit their profits, prices, and return on capital the way they can with traditional utilities. This allows Digital Utilities to pay reliable and growing dividends in the 3%-4% range.
Intel and Microsoft aren't the only "utility-like" cash-generating tech dominators...
EMC is the world's largest data-storage provider. When companies need to store data (video files, audio files, documents, e-mails), EMC is the "go to" provider. Most companies don't have the resources or the expertise to deal with the immense amount of data they need to store. EMC does. It is the "dominator" of data storage.
In 2013, EMC generated $23 billion in sales. That's up more than $5 billion from 2010. As you can guess, the demand for data storage can only go one way in the coming years. The "Internet of Things" will see to that.
Like Intel and Microsoft, EMC uses its dominant position to generate lots of cash and direct it to shareholders.
Cisco is another elite "Digital Utility." It's the dominant provider of "Internet plumbing" gear. In 2013, Cisco generated $48 billion in sales... up $8 billion from 2010.
Cisco also pays one of the market's most reliable 3%-plus dividends. It's another company that is a sure beneficiary of the "Internet of Things."
We could go on... but you get the idea. It's not complicated. As we buy more smartphones and more tablets... as we watch more streaming videos... as we connect more things to the Internet, businesses that support the infrastructure will enjoy a giant "tailwind" for a long, long time.
There are around a dozen or so large technology businesses that dominate their industries. Their entrenched positions, massive research and development budgets, and vast resources have created big "moats" around their businesses.
Now that smartphones and the "Internet of Things" are creating an explosion of demand for their services, their near-monopoly-like profits will only grow... and shareholders stand to make great money in Digital Utilities.
Regular Digital Utility shareholders should do well over the coming years.
But to generate truly large amounts of income – which should amount to 12%-plus annual yields – investors need to acquire a certain skillset.
It's a skillset we've helped thousands of regular folks learn... to the great benefit of their investment accounts. We've received an incredible amount of thankful feedback for our work in this area. It's an idea we want every single Stansberry Research subscriber to understand. We want our parents to understand it. We want our children to understand it. It has led to the greatest performance in investment newsletter history.
Knowing about this idea – and using it – will provide you with a HUGE advantage over regular investors.
To generate the largest amount of investment income from the "Internet of Things" and Digital Utilities, you must harness the income-producing power of selling stock options.
You've probably heard our plea before. But it's such a useful skill that we'll make the plea again. It's the strategy behind our most successful service, Doc Eifrig's Retirement Trader. Doc has used options-selling strategies to produce an incredible track record: He has closed 212 out of 214 positions for a profit. [Editor's note: As of December 2015, Doc has closed 248 out of 267 positions for a profit, good for a 92.8% win rate.]
We've discussed Doc's strategy and track record many times in the Digest. What we haven't done much is highlight how Doc has structured 89 winning positions around Digital Utility stocks like Intel, Microsoft, and EMC. Every single one has been a winner. And the average gain for those positions was 10.6% (usually with holding periods of just a few months).
Doc has mastered the art of analyzing Digital Utility stocks, determining when their shares represent great values, and applying his income-producing strategy. He's a master of timing these positions for maximum income and maximum safety.
The incredible returns being generated in Retirement Trader show that my claim at the start of today's Digest is no prediction. It's happening right now. And the giant "Internet of Things" trend will ensure this strategy pays like a broken slot machine for many, many years.
If you're a Retirement Trader subscriber, congratulations. You've taken steps to broaden your investor "toolbox." You've acquired an extremely valuable skill. Look to make more money from the "Internet of Things" in the coming years.
If you haven't learned these techniques, we urge you to begin soon. To ensure as many people as possible start learning, we've made it as easy as possible for you to take the first step...
We've published a book that explains how to use this technique step-by-step. And on page 87, it also lists the 25 ideal businesses for this technique. That means you can eliminate at least 90% of the publicly traded stocks from your investment radar.
Typically, we charge around $4,000 a year to teach people how to use this strategy. This high price ensures that we only attract folks who are serious about learning how to make money with options and are willing to get started immediately.
But because we are a business that survives on the quality of our ideas... we want as many people as possible to have the chance to benefit from this technique.
We want as many people as possible to learn the strategy Doc has used to produce a track record of 212 out of 214 winning closed trade recommendations in his research service.
We've been in business for more than a decade, and we have never seen anyone come close to generating this kind of track record. It is near perfect.
As Porter puts it:
"Subscribers who are inundated by the kind of crazy marketing claims that so many of our... competitors make about their trading results have probably grown immune to the kind of claim I can honestly make about Doc's trading: If you want to get rich as a trader, follow all of Doc's trades. It's really that simple."
As I mentioned, Doc typically charges $4,000 to teach people how to use this strategy.
But in our new book, High Income Retirement, he explains how this income technique works, step-by-step, and which companies are ideal to use this strategy on to safely generate extra income.
Now to be clear... Doc doesn't give out any specific buy recommendations in the book. He reserves that information for his Retirement Trader subscribers.
But in High Income Retirement, he covers everything you need to know without requiring you to subscribe to any expensive trading services.
To my knowledge, no other book on the market teaches you how to use these techniques and identifies which companies to use them on.
High Income Retirement costs just $25.99. I'm confident that when you read about Doc's options strategies... and start using them to collect regular income for your retirement... you'll agree that the price is an absolute bargain.
Reader Charlie W. has been using Doc's technique to generate consistent income:
Seeing so much hoopla recently over Doc's strategy, I thought I'd weigh in with my own personal experience as well. I've been actively trading options for 15 years, and I've subscribed to numerous advisory newsletter services over that span. Despite having a strong background in finance, coupled with extensive trading experience, I've had difficulties with consistent performance. Even with the help of these "experts," I've continued to suffer roller-coaster results in my options trading.
Doc's strategy makes perfect sense. I've had much (consistent) success, all thanks to your indispensable education.
Today, the details of this income technique can be yours for just $25.99. Click here to claim your copy.
Regards,
Brian Hunt
Editor's note: In High Income Retirement, Doc Eifrig walks you step-by-step through the same strategy he used to compile his unprecedented track record of profitable trading recommendations. He also "debunks" the most common myths and misconceptions about options, and explains how anyone can use them safely and correctly.
Previously, this same information was available only to readers of his $4,000-per-year Retirement Trader service. But now, you can access it for just $25.99. There is no greater value in the industry today. You can learn more right here.
Lessons in Bureaucracy on the Pakistan-India Border
By P.J. O'Rourke
Where there's government, there's bureaucracy. And it turns out that's not always as bad as it sounds...
I got my lessons in government bureaucracy 18 years ago, crossing the Pakistan-India border on the road between Lahore and Amritsar.
In 1998, luxury SUV maker Land Rover introduced its Discovery II model. Bill Baker, head of Land Rover PR, was an old friend of mine. Bill took a pair of the new vehicles on a drive around the world – across Europe, the Middle East, and the Indian subcontinent... then by ship to Australia, crossing the Outback from Perth to Sydney... then by ship again to North America... and home, at last, to England.
It was probably one of the last times somebody could pull off a publicity stunt like that without getting blown up, beheaded, or blocked by climate-change protestors in Berkeley.
Bill invited me on the Islamabad-to-Calcutta leg – 1,700 miles along the "Grand Trunk Road." The Grand Trunk begins at the Khyber Pass and ends at the Bay of Bengal. The road was celebrated in Rudyard Kipling's Kim and dates back at least to the fourth century B.C. (especially in the matter of stoplights and lane markers).
I met the Land Rover convoy in Pakistan's capital, at a hotel that later became the target of an Islamic extremist terror attack.
There were eight of us – Bill, me, four other journalists, a Land Rover engineer, and our guide, a former British army officer.
Traffic was light driving southeast toward the Indian border. Tollbooth lines are short in a country with no money. Groups of squatting men flicking whisk brooms kept the turnpike clean. And the pavement was excellent – if you didn't mind a berm six inches lower than the asphalt so that if you swerved to miss one of the whisk broomers and put a wheel off the road, all the other wheels would go into the air.
Downtown Lahore was more crowded. We got stuck in a traffic jam of local buses, bullock carts, goatherds, and crippled beggars.
"Can you tell us where the border is?" we yelled at a policeman who was busy directing traffic by hitting it with a long stick. The policeman replied, in perfect English, "No."
It was 116 degrees Fahrenheit with 100% humidity in Lahore. Breathing was like drinking coffee through your nose. Our Discovery II had air conditioning, but once we had lowered the window to yell at the policeman, we couldn't raise it again because we caught part of a goatherd and most of a crippled beggar in the opening.
We had one of the early, bulky commercial GPS units. It claimed to show our position within three meters. But the streets of Lahore weren't three meters wide. One street was so narrow that I think we wound up inside someone's house. The GPS directed us to the border. Turn right at the sofa. Left at the kitchen sink.
Only one road connects Pakistan and India. And nothing was on it that day. All we saw was a company of Pakistani army rangers. They were in their pajamas – it was naptime.
Nobody drove down the road, because nobody could. "Pakistani and Indian nationals are only allowed to cross the border by train," said my tourist guidebook. But complete lack of customs traffic had not prevented the establishment of fully staffed customs posts on both sides of the border.
The bureaucracy at Pakistani customs was simplicity itself. The customs officials were asleep, lying on the unused concrete baggage-inspection counter. The No. 1 man roused the No. 2 man, who explained the entire system of Pakistani tariff regulation and passport control by rubbing his thumb against his forefinger.
"Fifty dollars," said the No. 1 man. I opened my wallet, foolishly revealing two $50 bills. "One hundred dollars," he said.
Bureaucracy was different on the Indian side. They had an unused baggage-inspection counter plus an unused metal detector, an unused X-ray machine, and an unused pit with an unused ramp over it to inspect the undersides of vehicles that didn't use the border crossing.
Supposedly, we had government permission to do so. We were bringing the Land Rovers into India along with the GPS unit, our luggage, a satellite phone, several computers, a trailer filled with food, camping gear, and spare parts.
Our group included people of four different nationalities. The rules concerning entry of such persons and things into India filled a book big enough to contain the collected works of Stephen King.
The Indian customs agents were delighted. They had never had an opportunity to consult the whole book. They began a happy bureaucratic debate among themselves. Now and then, they would pause in their arguments with each other to argue with us. An agent would turn a page, point to a paragraph, and say, "You are doing what with these vehicles?"
"We're testing them," we'd reply.
"Oh no, you are not. That would require special licensing."
"We're transporting them," we'd say.
"Definitely not, that is a different permit."
Everything had to come out of the cars and trailer. Everything had to go through the metal detector, which wasn't plugged in. And everything had to go through the X-ray machine twice. The customs agents weren't watching the first time. They were too busy looking through the great big book.
All this took four hours, during which the seven agents on duty met each hint at bribery with the stare you'd get from an octogenarian Powerball winner if you suggested the 20-year payout option. The fellow who was recording, in longhand, everything inside our passports did take two cigarettes, but he wouldn't accept a pack.
None of the cases, trunks, or bags – unloaded and reloaded in the stifling heat – was opened, except for a wrench set. Perhaps there's one particular size of wrench that requires a special permit in India.
The satellite telephone did require a special permit, which we didn't have. The briefcase-sized satellite phone went unnoticed. (Engine compartments and undercarriages were inspected, but no one looked under the front seat.)
Our tire pressure had to be checked in case our tires were packed with drugs. The Indian government's tire gauge wasn't working. We offered our own. We were halfway through checking the tires when we realized no one was watching.
I went behind the customs shed to take a leak. I was urinating on thousands of dollars' worth of wild marijuana plants.
In 1998, the Indian economy was beginning to boom. Per-capita gross domestic product (GDP) grew 4.2%, nearly double the previous year's 2.2%. But India was still – obviously – overburdened with bureaucracy.
We can see something of what that bureaucracy cost India by comparing economic figures.
In 1998, the Chinese economy was already booming. Per-capita GDP grew 6.9%.
It has always surprised me that India's economy hasn't outperformed China's.
India is a democracy with rule of law (though maybe too much of it) and reasonable protection of property rights. China is a dictatorship where law and property rights are what the dictators say they are. But one thing dictators can do is cut through red tape.
However, that's only one lesson in bureaucracy. What about when there's no red tape? When government bureaucracy is replaced by corruption? That was Pakistan.
In 1998, Pakistan's per-capita GDP grew 1.1%. Government bureaucracy soaks up tax dollars, sucks time out of the business day, and smothers economic activity under blankets of rules and regulations. In general, it has earned its awful reputation. But...
Economic growth needs the rule of law and a respect for property rights. Pakistan's chaos bred corruption and outright theft that destroyed any semblance of a legitimate economy.
Regards,
P.J. O'Rourke
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