An Inside View of Our Closed-Door Meetings
Dear subscriber,
Every market professional knows how to make the market crash...
Just take a day off.
Whenever you step away from the office, the market is bound to have a big down day... and make you wish you were at the office.
Everyone I know in the business feels that they have just this luck.
Of course, it must be a trick of the mind... It can't be true for everyone. But it sure feels that way.
This week, Stansberry Research took a break from our usual business to gather our top experts in a hotel on the Washington, D.C. waterfront. We discussed our market outlook for the next several months... and the opportunities we see ahead.
We were rewarded with a 2% down day on Tuesday – the day before our meeting – and two more down days to follow.
But it justified the consensus of the room.
It's hard for our team to suffer from groupthink, as we take such varied approaches to investing. We have macro-focused investors, bottom-up value investors, short-term options traders, optimists, skeptics, and everything in between.
Even so, themes come together.
At our last meeting in April, it was clear that artificial intelligence ("AI") was the key factor driving markets.
It was all anyone wanted to talk about. And after a day of conversation, we were all confident that the trend still had room to run... and that the next investment opportunity was surging demand for electricity to power data centers.
We were right on both counts.
In our meeting this Wednesday, the focus had shifted. Surprisingly, little time was spent discussing tech or the upcoming presidential election.
Instead, the topics of the day were risk management, spotting recession signs, and finding safe, boring stocks to protect and build your wealth through whatever may come next.
We discussed the high returns in areas like construction materials, insurance, and mortgage bonds.
And we heard an outstanding thesis on why we'll see a true "stock pickers'" market over the next five years.
The point being, it's time to stop thinking that the only way to make big returns is through the hottest tech trend... and start looking at company fundamentals to find true intrinsic returns.
Our concerns about capital preservation don't mean that we think the market will crash immediately. But with the major indexes still hovering near all-time highs and valuations so stretched, it's time to start thinking about protection.
You can be bullish, but you should also be cautious...
Just this morning, we got the jobs report for August – and it came in a touch weak. The economy added 142,000 new jobs. That's less than the 160,000 forecast, but not terrible.
More concerning is the revision to June and July's numbers, which removed 86,000 jobs that were previously counted as additions.
We also got the Federal Reserve's Beige Book on Wednesday...
The Beige Book attempts to collect insights on economic conditions across each of the 12 Federal Reserve districts. And it characterizes those conditions based on qualitative information as opposed to quantitative data that may not accurately identify emerging trends.
August's edition showed that economic activity is flat or declining in nine of the 12 Fed districts. Notably, consumer spending had slowed in most districts, after having held steady in the previous period.
On the other hand, the number of mentions of "inflation" in the Beige Book has declined to a low for the year, with just 10. That's down from the nearly 20 mentions of "inflation" in July's Beige Book.
These reports are more cause for a bit of caution. But they also give the Fed fuel to announce a larger rate cut following its meeting on September 17, which would be bullish for stocks.
All told, caution is warranted, but not fear.
What Our Experts Are Reading and Sharing...
Intel (INTC) is in real trouble. According to Bloomberg, the chip giant is hemorrhaging cash, laying off employees, and considering holding off on expansion plans. The U.S. government was betting on Intel to revive American semiconductor manufacturing and planning on granting the company billions of dollars to do so... but only if Intel is able to meet key milestones, which looks less and less likely.
The upcoming presidential election may be a closer call than most folks think. Vice President Kamala Harris only leads the polls by 3 percentage points, on average. According to Vox, based on current state-by-state polls, it looks like the entire election could come down to Pennsylvania's 19 electoral-college votes.
Our own Dan Ferris just posted a great conversation with Brody Mullins, a former Wall Street Journal reporter who has an incredible collection of stories about how corporate lobbying has changed Washington. You can check out their chat on the Stansberry Investor Hour podcast on YouTube, Apple Podcasts, or Spotify.
Even better, we just booked Brody to speak in person at our Stansberry Research Conference & Alliance Meeting in Las Vegas next month. To learn more about the event – and secure an in-person ticket before it's too late – click here.
New Research in The Stansberry Investor Suite...
Whitney Tilson and our team at Stansberry's Investment Advisory are initiating, in my opinion, a perfect play.
In this month's report, they're swooping in to buy the stock of a "global elite" business at a valuation we haven't seen since the pandemic-led 2020 crash.
To put it plainly, this is a great company that has lost its way. It has the product, it has the advertising, and it has some of the most famous customers out there.
But management has made mistakes in other areas... including hiring an "outsider" CEO, turning its back on key retail partners, and organizational challenges that have stifled innovation.
This company is such a household name that I can't tell you anything more without giving away the entire story.
As a Stansberry Investor Suite subscriber, you can read the entire report here.
If you don't already subscribe to The Stansberry Investor Suite – and want to learn more about our new special package of research – click here.
Until next week,
Matt Weinschenk
Director of Research
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