This Is Likely the Final Year Before the 'Melt Down'

Why I keep talking about the 'Melt Up'... Expect a bumpy road in the months ahead... The investment pros are coming around... This is likely the final year before the 'Melt Down'... We're 26 hours away from this FREE event...

I'm starting to feel like a 'broken record'...

I (Steve Sjuggerud) have been talking about the Melt Up for years. I first gave a speech on the topic at our annual Stansberry Conference and Alliance Meeting way back in 2015.

It wasn't started back then, of course... But I saw the underlying pieces moving into place.

In my mind, an eventual Melt Up was a certainty. And as regular Digest readers know, I've done everything possible to tell the world about it since then...

There have been plenty of starts and stops of Melt Up behavior in recent years. And for the most part, stocks were on a one-way cruise higher as we headed into 2020.

It even looked like the final swing of the Melt Up was upon us at the start of the year. But then, as my analyst Vic Lederman explained in the Digest last Thursday, COVID-19 crashed the party...

Make no mistake, that bust was painful and record-breaking. However, the recovery since then has been just as impressive...

As I explained yesterday, it has brought retail investors into the market in a major way. That's the surest sign we have that the Melt Up is back... and that the clock is ticking on these good times.

It's not just retail investors, though...

The pros are starting to get more bullish, too, as I'll share today. And retail enthusiasm combined with the clout of Wall Street is what will send the market into a true Melt Up.

There's another piece to cover before we get to all those details, though. It's a question you might be asking right now, as I blabber on about how good things are today.

You might be wondering...

How can the Melt Up be here if we just saw a correction in stocks last month?

It's a worthy question.

After all, the Nasdaq Composite Index fell 10% in just three days in September.

You might wonder how I could call this a Melt Up with that kind of rapid market sell-off taking place so recently. But that type of thinking is backward...

Major volatility is a hallmark of a stock market Melt Up. And here's the thing... The recent correction is likely only one of many that we'll see in the coming months.

The Nasdaq soared 390% from mid-1996 to its peak in early 2000.

That's the era of the original Melt Up. And things heated up even more in the final inning... The Nasdaq jumped 109% in the last 12 months of that boom.

This shows us the kind of move that's possible today, now that the Melt Up is back on. It could mean life-changing gains in a matter of months.

But while big gains are likely, I want to be very clear about what you should expect investing in today's environment...

You see, investing during a Melt Up takes a ton of guts. It's often a bumpier road than the headline gains imply.

There will be times when the market puts your emotions to the test...

For example, the late-1990s Melt Up wasn't a one-way trip higher. Instead, it's proof that 10% corrections are common during Melt Ups.

We saw five pullbacks of roughly 10% in the Nasdaq during the final 18 months of that boom. The largest one led to a 13% decline before bouncing back. Take a look...

Thanks to hindsight, we know these corrections were just that... short-term falls before the next leg higher. So it's easy to brush them off as irrelevant today.

But I can assure you... It didn't feel like that in real time.

In the thick of corrections like that, doubt can start to set in... You can begin to question if the current correction is actually the next major bear market.

Maybe you had those thoughts in September as the Nasdaq sold off. It's totally normal, especially after the incredible bust we experienced at the start of the year. But you've got to be OK with that kind of thing to really benefit from what's going on today.

We just saw a correction in stocks... And I expect we'll see more in the months ahead. But this is the reality of a Melt Up... It isn't all smooth sailing for investors.

There is triple-digit upside potential as the mania unfolds... But it doesn't come without increased volatility.

Knowing that corrections are common will help you navigate the Melt Up. You'll know 'em when you see 'em... And you'll be less likely to jump ship during a correction and miss out on big gains.

Now, we covered the mass of retail buyers flooding into the market yesterday... And today, I want to cover what's going on with the investment pros. That's because we need both groups piling into stocks for a Melt Up to truly kick into gear.

And it turns out the investment pros are getting bullish once again...

To see it in action, we just need to look at last month's Bank of America Merrill Lynch Global Fund Managers Survey.

This monthly survey is required reading in our office. That's because it aggregates the thoughts of nearly 300 fund managers with a total of $782 billion in assets under management.

That's a lot of investment pros. And by looking at their overall thoughts, we get fantastic insights into the overall sentiment in the market.

The September report was eye-opening for a few reasons...

First, a majority of these folks believe we're out of a recession now. That's the first time since February that a current recession isn't the consensus view.

More importantly, 58% of folks believe we're in a new bull market. That's up from 46% in the previous month. And those who think this is a bear market rally continue to fall.

This change in sentiment is crucial for the Melt Up. We need retail investors to be excited, of course. And they are, as we discussed yesterday. But these folks don't move around the big money.

The investment pros carry the big cannons. So without them, it's tough for a real market mania to happen. As you can see, though, they're beginning to come around.

I expect this trend among investment pros will continue in the coming months...

That's just the way sentiment moves work. They're slow at first... Then they burst to extreme levels.

We've already seen that play out in the retail space. The average Joe wanted nothing to do with stocks in March or April. But as the gains began to pile up... and guys like Dave Portnoy began to get notoriety... things changed fast.

The same will be true with the investment pros. They'll be more cautious coming around. But they will... Their jobs depend on it.

Investment managers can't afford to underperform. Sitting on the sidelines and missing out on a major rally is how these guys get fired.

So like it or not, they're getting back into the market. And as the gains continue to pile up, they'll get more and more greedy.

This setup tells me that the Melt Up is here.

And beyond that, I'm more confident than ever that the Melt Up could be over in the next 12 months or so...

That's the difference between today and what I've been talking about since 2015.

I've felt like – and probably sounded like – a broken record in recent years. It has been Melt Up this... and Melt Up that. But please...

Don't miss today's critical message because of Melt Up fatigue.

This is it, my friends. This is the final push. I'm sure of it. And if you sit on your hands and miss out, you likely won't get another chance for a long time.

It's why I'm hosting a Melt Up event tomorrow night, October 21, to go over all of the details. The event starts at 8 p.m. Eastern time. And as I said yesterday, legendary stock picker Matt McCall will be joining me...

Matt was one of the few folks I know who was bullish at the depths of the March crash. And overall, he has been spot on with his market predictions in recent years...

Matt's stock-picking prowess makes him the perfect person to discuss the Melt Up and ramifications with me during this special broadcast. And of course, I hope you'll join us, too...

The event is completely free – including a free recommendation from each of us. We only ask that you register ahead of time to attend. Click here to do that right now.

I look forward to seeing you there.

New 52-week highs (as of 10/19/20): BlackLine (BL), Calibre Mining (CXB.TO), and Maxar Technologies (MAXR).

In today's mailbag, more feedback on Dan Ferris' Friday Digest. Do you have a comment or question? As always, send your e-mails to feedback@stansberryresearch.com.

"Dan and the Stansberry team, My assaulted moral compass has been thrown to the gutter these last several years due to this exact topic. Dan, you have watered the seed of liberty in me with your writing. Thank you for saying what must be in the hearts of many of us. You have delivered what my soul has been searching for!! Thank you!" – Paid-up subscriber Bruce C.

"Kudos to Dan Ferris for taking the trouble to say all that he said.

"'I'm no longer comfortable with my silence...' – may we all feel the same way, and start speaking up for civilization." – Paid-up subscriber Pete K.

"I thought this made for a fascinating read despite the Dan's assertions that it's only the 'left' that is stifling free speech.

"Left or right it makes no difference as too many are siloed into a given mindset that cannot be changed. That they refuse to listen to others who may have a different opinion. That they're all too willing to label those who have a difference in opinions with a number of derogatory terms and they call that civilized. That they refuse to listen to logic, ignore reality, and source their facts from dubious sources to support their righteous cause. That their view is right [and] the rest of the world is wrong and should be ignored or worst, vilified. That comprise is weakness that has to be avoided at all cost. Etc.

"Should we rewrite history to please the few or perhaps look at history objectively and honestly and let the facts tell the story? Should we banish great historical figures because their lives and moral values differ from ours today or perhaps honor them for what they did and teach that they were a product of their times, which were different than the values we have today?

"In a simpler time broadcast journalist Walter Cronkite was labeled as being 'the most trusted man in America.' Today we trust no one, accept lies as truths as there are too many unfiltered sources of 'news' that for all the wrong reasons are accepted as trustworthy for the simple reason that the source supports my uninformed views of the world.

"In George Orwell's 1984 he states: 'Those who control the present, control the past and those who control the past, control the future.' I for one do not want to live in the world that has no true past because it's constantly being rewritten by those think that their values are the only correct ones for the future." – Paid-up subscriber Richard K.

Dan Ferris comment: Richard, I'm glad you enjoyed the essay. But I wanted to make one small clarification to your comment...

I did not assert – as you suggested – "that it's only the 'left' that is stifling free speech." You might be getting confused with what Dr. Gad Saad said during our interview. Right after that part of Friday's Digest, I clearly stated my view that "left" and "right" are essentially two sides of the same coin. As I wrote...

Before I go any further, let me be very clear... I'm not here to support or criticize the left or the right. Frankly, it's all the same to me. Neither side will ever get my loyalty until they make shrinking the government their No. 1 priority... And I'm not holding my breath.

But again, thank you for the note and detailed response. I do appreciate it.

"Hi, I am a new subscriber, just writing to thank you for today's post which made my jaw drop. It's deeply reassuring to discover that there is someplace where political intelligence is so deeply tied to financial savvy." – Paid-up subscriber Sam H.

"Ladies, gentlemen, your article could not be better timed considering the decapitating of a French history professor this weekend in Paris. A long standing reader of Stansberry Research. Take care and go on with your excellent reports." – Paid-up subscriber Hans S.

"Fantastic!! Every true American should read this and think about what is really happening in our country. Thank you, Dan!! Keep up the great work!!" – Paid-up subscriber Sam W.

"Bless you, Dan... just... bless you." – Paid-up subscriber Chuck N.

"Hey, Dan. Best Digest ever (and I've been reading them every day for almost 15 years!) Is there any way of getting a copy of it that I could post to Facebook? Hopefully, I won't have to water the tree of liberty as a result of posting it – but it's a tree worth watering, and I'm sure glad our Founding Fathers were willing to water it at the cost of their own lives and fortunes!" – Paid-up subscriber Tim S.

Corey McLaughlin comment: Hi Tim, thanks for the kind words... You're not the only one who asked if you could share Dan's powerful Friday Digest on social media.

Normally, you can find all of our past Digests on our public archive page seven days after we send them to subscribers... But this time, we've made a special exemption to the rule and "unlocked" Dan's essay right here.

We're glad you enjoyed it so much... Feel free to share it with anyone you'd like.

Good investing,

Steve Sjuggerud
Jacksonville, Florida
October 20, 2020