More bad news out of Europe today... Unemployment among the European Union nations rose to 10.9% in March from 10.8% in February – the highest since the previous record in April 1997. Spain has the highest unemployment rate at 24.1%. And unemployment among Europe's youth hit 22% last month. Spain and Greece both have youth unemployment of more than 50%.
To make things worse, rumors abound today that credit-ratings agency Moody's is about to downgrade 17 Italian banks. Shares of UniCredit, our proxy for beleaguered European banks, fell more than 5%. Trading was halted to stem the bleeding.
We first started covering UniCredit in March 2010. (For the full story, you can read Porter's issue from that month here.) UniCredit is one of Italy's largest banks. It has already borrowed $300 billion from other European banks. And Italy's government already owes creditors more than 120% of GDP. If there's a run on the bank, the losses will be too big for Italy to handle without a huge international bailout. It's a disaster... And there's no easy way out.
In Retirement Millionaire, Doc Eifrig focuses on stocks that will perform well regardless of the larger economy... He likes companies that provide food (like McDonald's), fuel (like Chevron), and health care (like Johnson & Johnson). In June 2011, Doc recommended shares of CVS, a giant, U.S.-based pharmacy services chain. His reason for the recommendation was simple…
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More elderly people means more money spent on health care. Unless everyone starts following my recommendations for walking, yoga, meditation, and diet, these demographic patterns mean an explosion in the use of pharmaceutical drugs for the elderly. |
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Older people use three to four times the amount of prescription drugs as folks under 50. And more than 30 million people will gain Medicare coverage by 2014. This means an increasing number of written prescriptions. |
Today, shares of CVS hit an all-time high of more than $45 a share. The company announced first-quarter earnings of $776 million, compared with $713 million a year ago. Revenue increased 20% to $30.8 billion – an all-time record. The company cited increased customer traffic and improvements in its pharmacy-benefits management business. Retirement Millionaire readers are up 26% on the recommendation since last June.
Beyond his traditional stock picks, Doc's readers receive other benefits... For example, Doc explained the proper way to view gold and silver holdings (as crisis hedges, rather than cornerstones of your portfolio).
And in addition to his "common sense" approach to investing in stocks, gold, and fixed-income securities, Doc shares his vast medical knowledge in each issue... In his latest issue, he explained why popcorn is actually as healthy as fruits and vegetables, why you should regularly take aspirin, and how one phone call to your credit card company can make your vacations better. You can receive all of this top-quality information for less than the cost of some magazines.
Doc's advisory service is a perennial favorite among most of our serious, educated readers. Porter loves it too... He gave Retirement Millionaire an A+ in our latest annual Report Card. If you'd like to try one of the best values in the newsletter industry (which also happens to have one of the best track records in the industry), click here...
Yesterday, we discussed how commercial & industrial loans at banks are an important economic indicator. With that in mind, consider the latest rumors coming from China... Quoting an anonymous source, Reuters said Chinese bank lending may have dropped 30% in April from a month ago. The "unidentified banking sources" say China's banking system lent around 700 billion yuan ($111 billion) in April.
We've been following the slowdown in China for years. You can read our full thoughts in the March 26, 2012 Digest.
New 52-week highs (as of 5/1/12): PowerShares Buyback Achievers fund (PKW), W.R. Berkley (WRB), Coca-Cola (KO), Abbott Laboratories (ABT), Calpine (CPN), Intel (INTC), Altria Group (MO), Philip Morris International (PM), and Teekay LNG Partners (TGP).
We'd love to hear some "boots on the ground" stories from Europe about the high unemployment and banking crisis... Send your notes to us at feedback@stansberryresearch.com.
"I got a call yesterday from one of our banks yesterday. He wanted to take me to lunch! I figure this only happens when they want to make more loans. I probably should have reminded him that I am in Commercial Real Estate... " – Paid-up subscriber Edward P. Asher
"You often make references to World Dominator companies like Anheuser-Busch & UPS that are not mentioned in Dan Ferris's 12% Letter. If they are truly WDDGs, why aren't they included on Dan's list ?" – Paid-up subscriber Gary
Goldsmith comment: Dan maintains a portfolio of "World Dominators" in his Extreme Value portfolio. These are stalwart companies that are leaders in their field. In The 12% Letter, Dan recommends "World Dominating Dividend Growers" (or WDDGs). These companies share many of the same qualities as World Dominators – mainly that they're dominant in their sector... But they also pay healthy and increasing dividends. If you'd like access to Dan's World Dominator portfolio, you have to sign up for Extreme Value. You can learn more about a subscription here...
Regards,
Sean Goldsmith
Sea Island, Georgia
May 2, 2012
Where you find 50% unemployment... UniCredit plunges... Doc's latest winner... Bank lending in China drops... The difference between World Dominators and World Dominating Dividend Growers...