You Want to Be Part of This Trend

The cybersecurity boom continues... 'You want to be part of this trend'... A new record in the 'death of retail'... Prepare for more bankruptcies... The latest 'Golden Triangle' opportunity may surprise you... In the mailbag: feedback on our first-ever 'beta test'...

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In late 2016, DailyWealth Trader editor Ben Morris called the growth of the "cybersecurity" sector one of the surest and most important trends in the modern world. As he explained in the November 22, 2016 issue...

In February, hackers stole information for an estimated 80 million clients of Anthem (ANTM), the second-largest U.S. health insurer. The information included names, dates of birth, Social Security numbers, phone numbers, e-mail addresses, and employment information. The attackers got away with everything...

Hackers also struck social networking website Myspace this year. Security researchers believe more than 360 million accounts were compromised... which likely makes it one of the biggest hacks ever.

If you run a business, you're well aware of these threats. And you're likely trying to make sure your business isn't the next victim...

Ben cited a security spending report from research firm International Data Corporation that predicted that governments and businesses were projected to spend $102 billion on cybersecurity by 2020 – an increase of nearly 40% from 2016.

Ben wasn't alone...

As he explained, several of the world's best investors clearly agreed. More from the issue...

Paul Singer, George Soros, and other top investors have taken big stakes in cybersecurity stocks...

Singer holds a spectacular long-term investment track record. He founded his hedge fund, Elliott Management, in 1977. And from that year through 2012, he averaged 14% annual returns with only two down years (out of 35). That was enough to turn $10,000 invested with him in in 1977 into $981,000.

Now, Singer manages $12 billion in investor funds... And at the end of last quarter, he had 7.5% of his fund's assets allocated to three cybersecurity companies. Just yesterday, one of his holdings, Symantec (SYMC), offered to buy another of his holdings, LifeLock (LOCK) for $2.3 billion.

Billionaire trading legend George Soros' Quantum Fund delivered a 3,365% return over 11 years. That's 38% a year. Soros now holds a total of 3% of his $3 billion hedge fund's assets in five cybersecurity companies.

As Ben noted, many of the world's top investors – including David Tepper and Paul Tudor Jones – have positions in cybersecurity stocks, too.

He recommended a simple "one click" way to invest alongside these gurus: the First Trust Nasdaq Cybersecurity Fund (CIBR)...

CIBR holds a basket of 33 companies that build and sell cybersecurity tools... Most of the cybersecurity companies held by the gurus above are also part of CIBR...

The trend toward more cybersecurity spending is firmly in place. Businesses are already spending billions. And just yesterday, president-elect Donald Trump released a brief video sharing his initial plans as president. Near the top of his list was "a comprehensive plan to protect America's vital infrastructure from cyberattacks and all other form of attacks."

The companies in cybersecurity fund CIBR will benefit. Join some of the world's best investors in profiting from the trend.

But Ben didn't stop there...

He practically begged his subscribers to get on board this big trend not one, but two more times since his original recommendation in late 2016. As he wrote most recently in the February 22 issue of DailyWealth Trader earlier this year (emphasis added)...

The S&P 500 still trades more than 5% below its January 26 all-time high. And of the 11 major stock market sectors, the best performer – information technology – is still 3% below its recent all-time high. But cybersecurity stocks recovered extremely quickly. [They] hit a new all-time high last Friday.

After the worst sell-off in years, investors rushed back into cybersecurity stocks. They're still nervous about most other sectors... But they are willing to pay more for [for these stocks] today than they were before the correction. This is valuable information. The new highs tell us that cybersecurity stocks are one of the most attractive groups of stocks in U.S. markets today.

You want to be part of this trend. If you're not profiting already, get on board.

DailyWealth Trader subscribers who took Ben's advice have done incredibly well so far...

They're up as much as 32% through yesterday's close. But if you're not among them, Ben says it's still not too late to profit from this trend. In fact, as he explained in his latest update published yesterday morning, the potential upside is greater than ever...

On Tuesday, U.S. and U.K. government officials issued a joint warning about a new threat... Since 2015, Russian government-sponsored hackers have been stealing data through Internet devices like routers and switches. To do this, they installed software that gives them access to passwords, intellectual property, and other sensitive information. Officials still don't know the scope of the attack. But it likely affects millions of devices around the world.

You may be growing desensitized to news like this. It's only the latest in an ongoing string of cyberattacks. But for those affected, it's extremely serious. And folks are spending more and more to protect themselves and their customers.

As Ben explained, cybersecurity stocks traded sideways for a few months after their initial recommendations. But by mid-2017, they quietly started an uptrend. As of yesterday's close, CIBR was up almost 8% this month alone. And earlier this week, it touched an all-time high...

Ben continues to believe this trend will run for years...

And he says this week's new highs show cybersecurity stocks are still among the most attractive in the market today...

We don't see this trend stopping...

Companies and governments are way behind the curve with cybersecurity. And they know it. The latest news is more proof. They need to increase cybersecurity spending... And that means more money will flow into CIBR's holdings.

We'll say it again... If you're not profiting in cybersecurity stocks already, get on board.

Speaking of big trends, the troubles for 'brick and mortar' retailers continue...

In a report last week, ratings agency Moody's said nine major retailers had defaulted on their debts in the first three months of the year. This is the most in the first quarter of any year in history... and it compares to a full-year record of 13 major defaults in 2017.

Meanwhile, a recent report from Moody's competitor S&P Global Ratings suggests the record-breaking pace will continue. As S&P analyst Robert Schulz explained...

We believe defaults in 2018 could match or exceed last year's record level...

Despite store closures amid the turmoil, the US remains significantly oversaturated with retail stores. Some retailers have made progress toward better aligning their physical footprint to the new reality of physical versus virtual sales, but there is still excess capacity...

With almost 20% of ratings in the "CCC" category, we have a strong expectation for continued defaults over the next 12 months. The pace of liquidation might also pick up this year, as most retailers that defaulted in 2016 and 2017 reorganized.

The report also singled out 20 retailers at especially high risk of default this year. The list included several familiar names like Sears Holdings (SHLD), Neiman Marcus, J. Crew, PetSmart, David's Bridal, Guitar Center, and Payless, among others.

Two of these companies – teen jewelry retailer Claire's and grocery chain Bi-Lo – have already defaulted since the report was published last month.

This shouldn't come as a surprise to regular Digest readers...

We've been warning about this trend – which we've called the "death of retail" – for years. Porter summed up our bearish stance last year in the August 18 Digest...

My top, most certain trend is the death of retail. I have no doubt that within 10 years, more than half of the retail space in America will no longer exist. And that's probably too conservative an estimate. The destruction is retail is likely to be far worse and occur far faster, like a 75% decline within five years.

My family doesn't shop in stores anymore at all... We buy everything – groceries, clothes, cars, toys, tools, services – absolutely everything online. I won't go into stores anymore. Not even for a pack of gum. Wegmans will bring me gum along with all my groceries within hours, and the workers stack them all neatly for me in my garage. They even put the food and drinks into my fridge for me.

The rest of the country is right behind me, walking away from the mall... Nevertheless, most people don't understand just how big of a change this will be for the U.S. economy.

Consider a few important facts... Between 1970 and 2015, the number of malls in the U.S. grew twice as fast as the population. As a result, America has a truly absurd amount of retail space per capital – about six times more than anywhere else in the world (except Canada, where thanks to Sears Holdings (SHLD), retail was grossly overbuilt, too).

America has more than 7.5 billion square feet of shopping center space. That's about 23 square feet of mall space per person. On a per-capita basis, that's 10 times more than Germany.

So you may be surprised to learn that he and his team recently recommended shares of one of these retailers...

And a mall-based retailer, at that.

But don't worry, they haven't lost their minds. You see, this company is the latest "Golden Triangle" opportunity their bond market research has uncovered.

These are relatively rare situations where the stock and bond markets disagree about a company's prospects... and as regular Digest readers know, the bond market is almost always proven right.

Stansberry's Credit Opportunities editor Mike DiBiase shared the details on this opportunity in the April issue, published just yesterday...

Make no mistake, this "retail apocalypse" will only intensify from here... More malls will be forced into extinction as Sears, JC Penney, Macy's, and other major retailers continue to close locations. And we'll see dozens more bankruptcies in the coming years as retailers struggle to afford the massive amounts of debt that they've taken on.

But we shouldn't just step aside and wait for the death of retail as we know it. Instead, we want to do what any savvy investor would do... find the best ways to make money.

As Mike explained, not every retailer will go bankrupt as this trend continues. Some won't merely survive, they'll even thrive in the years ahead. And they've discovered one mall-based retailer that is likely to do just that.

It owns one of the best-known brands in a growing industry. Unlike many retailers, it maintains a rock-solid balance sheet with little debt.

Due to some missteps under previous management, its stock is down more than 70% over the past couple years. But Mike believes the company's new management team has righted the ship. And as we mentioned, the bond market does, too. More from the issue...

With a new CEO, the company just unveiled a three-year transformation plan to return to its former glory. And it also made another critical decision that didn't even register with most investors. Because of that, it's time to strike with this investment before they figure it out.

Best of all, the bond market agrees with us... Like us, it isn't concerned at all about the company's future. That gives us another attractive "Golden Triangle" opportunity today.

Of course, it wouldn't be fair to Stansberry's Credit Opportunities subscribers to share all the details here today. But you can get instant access to this recommendation – along all of our Golden Triangle and distressed-bond research – with a subscription to Stansberry's Credit Opportunities. Click here to learn more.

In today's mailbag, several "beta testers" share their thoughts on our new Ten Stock Trader service. What do you think? Let us know at feedback@stansberryresearch.com.New 52-week highs (as of 4/18/18): First Trust Nasdaq Cybersecurity Fund (CIBR), Genco Shipping & Trading (GNK), Intel (INTC), iShares U.S. Aerospace and Defense Fund (ITA), KraneShares E China Commercial Paper Fund (KCNY), Pioneer Natural Resources (PXD), United States Commodity Index Fund (USCI), and Verisign (VRSN).

"I am very impressed with the comments I am reading from Greg Diamond! I am looking forward to his teaching and training! Thanks for allowing me to be a part of this exciting adventure!" – Paid-up subscriber Mack C.

"I've relied on Stansberry Research for only the first two of the three legs of investment strategy, namely: 1) Market Prognosis, 2) Fundamentals, and 3) Technical Analysis (TA). Now Porter has finally come of age and recognizes the VALUE of TA. CONGRATULATIONS and about time! While TA clearly can't replace the other two legs, it however compliments them rather nicely." – Paid-up subscriber Herman V.

"Finally, finally, Stansberry has a veteran technical trader in house. As a 35 year + veteran trader, I could not do without it. The key: it provides a trading strategy AND risk management in one gulp. Here's to your success." – Paid-up subscriber Joseph C.

"All I can say about this is that it's very exciting. Stansberry is amazing! Thank you!" – Paid-up Stansberry Alliance member Jeffrey V.

Regards,

Justin Brill
Baltimore, Maryland
April 19, 2018