What Porter Is Doing With $1 Million Today

Porter returns on Thursday... What Porter is doing with $1 million today... History of bear market rebounds... The bottom could be lower... What happens during recessions... Things get worse before they get better...

We know many subscribers have been wondering...

What does Porter think of all this?

Over the past few weeks, we've seen the e-mails from folks asking – and in some cases demanding – to hear our founder Porter Stansberry's take on what has been happening with the markets...

Where is Porter? Is he healthy? You guys still do WONDERFUL work, but I think everyone would desperately love Porter's take on the market, especially during such a crazy time. – Paid-up subscriber Billy F.

Where's Porter been, and is he OK? I would think he'd be doing victory laps now. Hope he is well. – Paid-up subscriber Arthur Z.

When was the last time anyone heard from Porter? Will he be coming out of his bunker in the backwoods? 😉 – Paid-up subscriber Jim B.

We can't blame anyone for being curious. I (Corey McLaughlin) am... And a lot of others around our (now virtual) office are, too.

So to this point, we have great news for those who have asked what he's doing today...

This Thursday, Porter will reveal his thoughts on today's market in a brand-new webinar...

For new Digest readers who don't know, Porter started Stansberry Research 20 years ago on a "borrowed laptop," as he likes to say, in a rundown Baltimore neighborhood.

Today, when the "social distancing" measures aren't in place, we operate out of a five-story space with fine art in the lobby. And each of us owe at least part of our employment – especially these days – to him.

As longtime subscribers know, in recent months, Porter has taken a step back from day-to-day operations...

But these are unprecedented times. And he has seen your requests, so he's obliging...

At 3 p.m. Eastern time on Thursday afternoon, Porter will sit down with our Director of Research Austin Root for a can't-miss event.

We can't confirm too many of the details yet, but we can tell you a few things...

Porter plans to talk about what he sees right now as we endure the coronavirus crisis and the resulting economic fallout... what the Federal Reserve is doing... and the once-in-a-generation opportunity he sees from the 30%-plus drop in the major U.S. stock indexes.

He'll also share what he's doing with $1 million of his own money right now... and why he recommends subscribers do something similar to grow and preserve their wealth. This approach represents the epitome of everything Porter has worked on for two decades.

Click here to sign up for free to make sure you don't miss it. (And Stansberry Alliance members, stay tuned to your inbox for all of this information before it hits the public.)

What goes down, usually goes up... big... eventually...

In last Tuesday's Digest, we showed you the history of U.S. bear and bull markets... including how long they tend to last (1.3 years, on average, for a bear market) and how much they tend to lose or gain (an average 38% loss for a bear market).

Another key point in this "bigger picture" context is something our friend Whitney Tilson over at our corporate affiliate Empire Financial Research shared last week. As he wrote in last Tuesday's edition of his free Empire Financial Daily e-letter...

Michael Batnick, Director of Research at Ritholtz Wealth Management, posted some interesting data on the average S&P 500 returns over different time periods based on how far the index is from its high:

In short, based on this data, the further the major U.S. indexes fall from their most recent high... the bigger the rebound in the long term – and even over the next year. As we write, after dropping nearly 3% again today, the S&P 500 is down about 34% from its mid-February high.

(On a related note... like Porter, Whitney is holding his own urgent briefing about what he's seeing in the markets. Whitney's event will take place tomorrow night at 8 p.m. Eastern time. It's also free to watch. Sign up right here.)

In the short term, though, stay cautious. The bottom could be lower...

The only "normal" thing today is Congress' usual nonsense in Washington... even as a horrendous crisis is attacking millions of Americans' health, bank accounts, and daily lives.

The market tends to bake what it knows about the future into prices today... But if you read or watch the news (and for your own mental health, maybe do that just once or twice a day), companies and policymakers aren't even certain about what they'll be uncertain about in the coming days and weeks.

We can't imagine many money managers thought to consider the questions, "How long will we have to use construction masks in hospitals?" or "Where can people get a test?" Nor did they need to ever account for one in three Americans being ordered to stay home.

On a conference call with a few of our Stansberry Research colleagues today, Stansberry NewsWire editor C. Scott Garliss likened the situation – with all the fiscal stimulus out of the Fed and ensuing unknowns – to the financial crisis. Scott worked on Wall Street back then...

All these Fed moves, these are things that bridge the economy through to the other side. [But in the financial crisis], these all took time.

There is so much stuff being fired at the marketplace right now. Nobody can fully digest what is going on. It takes time to digest and get through it and see how some of it is going to play out.

Scott also noted that when the latest employment numbers come out on Thursday, they're bound to show a huge loss.

This is what happens in recessions...

People lose jobs. And our colleague Dr. David "Doc" Eifrig detailed the case for why we're already effectively in a recession in his latest issue of Income Intelligence last Thursday.

Here's an excerpt...

The technical definition of a recession is two quarters of economic contraction. We say we are in an effective recession because the economy is contracting now – on its way to a full recession. In other words, the economy is receding...

Restaurants, and other small businesses that don't have access to working capital, will go bankrupt. I know of three that have already shuttered their doors forever in Buffalo, New York.

While people have gone out to stock up on supplies, that boost in demand will soon fade. Other businesses like malls, bars, and movie theaters have closed.

Even more stressful, those businesses have already started laying off workers... and hourly workers will likely net less pay.

Doc said the math is simple...

Say you planned on spending $1,000 on goods and services in the next month. But now you either want to keep your savings account a little stronger or you're just stuck in the house, so you've reduced your planned expenditures to $950.

Well, if everyone does that, you've got a recession. That's all it takes.

And we've got much more than that on our plate...

Federal Reserve Bank of St. Louis President James Bullard, a Fed senior official, said over the weekend that U.S. gross domestic product ("GDP") could plunge 50% in the second quarter.

Investment bank Goldman Sachs estimated a 24% decline. Its previous estimate was a 5% contraction.

We're not trying to be a hero and perfectly call a stock market bottom...

After all, in our opinion, you should take a receipt from anyone who promises to perfectly time such a thing. Plus, the starts and ends of recessionary periods haven't always lined up perfectly with stock market tops and bottoms over time.

But like we considered with our "barroom napkin math" when we said last month that the coronavirus crisis fallout could last until July... you can look at several indicators to guide you about when to more strongly consider buying in large quantities again...

Today, for example, fewer than 3% of the stocks trading on the New York Stock Exchange ("NYSE") are above their 200-day moving averages (200-DMAs). The 200-DMA is a good measure of whether stocks are in a long-term uptrend or downtrend.

For context, in late 2018 – the last time the major indexes dropped double-digits in short order – the number of NYSE stocks trading below their 200-DMA dropped to "only" 10%.

The last time the numbers were this low was during the financial crisis... And back then, the number of stocks trading above their 200-DMAs lingered below 10% for months, from October 2008 until the ultimate bottom in April 2009.

Throughout history, only when this number gets close to or above 15% is the market "safely" rebounding...

The point is, there's a decent chance that things will get worse from here before they get better...

U.S. Surgeon General Dr. Jerome Adams said the same thing on TV earlier today with respect to COVID-19. And remember, the coronavirus is what sparked this sell-off to begin with.

As we've said in the short term, we hope you've minded your stop losses. And if you're now sitting on a pile of cash, that's not the worst thing in the world. In fact, as our colleague Dan Ferris wrote in last Friday's Digest, cash looks pretty good right now.

But once-in-a-generation moneymaking opportunities lie ahead for educated, long-term investors who know where to look... in investments that can provide stability even in these unprecedented times.

That's why Porter decided to share with you on Thursday what he's doing with his own portfolio.

It's what he would want if our roles were reversed.

So again... we hope you'll tune in Thursday afternoon to hear from Porter. It won't cost you a penny to sign up. We only ask that you save your seat in advance right here.

New 52-week highs (as of 3/20/20): short position in Interpublic Group of Companies (IPG).

In today's mailbag, praise for Ten Stock Trader editor Greg Diamond... and trailing stop losses. What's on your mind? Tell us at feedback@stansberryresearch.com.

"Greg Diamond... thank you for the incredible insight into the markets. Your knowledge and insight open up a whole new perspective for me on what CAN happen.

"While I often shy away from the purely technical reports, this morning's report was right up my alley and the best." – Stansberry Alliance member Steve V.

"First time sending you a note but had to pass on my experience with trailing stops. Previously had let my advisor handle the day-to-day on my modest portfolio.

"Read your articles on trailing stops and in particular pricing trailing stops based on the underlying assets' historical volatility. Bought into it and signed up for TradeStops.

"Bottom line: Trailing stops are better than Ambien for getting a good night's sleep!!! I used to always worry about my portfolio. With the recommendations from TradeStops, I now manage my portfolio and do not worry over it."

"Thanks for a great service. Keep it up!!!" – Paid-up subscriber Steve P.

All the best,

Corey McLaughlin
Baltimore, Maryland
March 23, 2020