Our Vegas Checklist

In a few days, we'll be in Las Vegas... My Stansberry Research conference checklist... Livestream Pass sales close tomorrow... The traditional drugstore is dying... More stimulus is coming... Gold hits a new high...

---

Our annual Stansberry Research conference is just a few days away...

And I (Corey McLaughlin) am as excited as ever.

I've been fortunate to attend our biggest event of the year in person for several years in a row, and by the end, I've typically found myself with a mix of feelings – energized given all the great insight absorbed, and tired given the duties writing about it each day.

There are certainly worse situations to be in, though. Las Vegas (this year at the Aria Resort & Casino)... three days of insightful investing talk... seeing colleagues from around the world gather in person... meeting fascinating invited guests... sign me up.

This year's conference starts on Monday and concludes with our Alliance Day on Wednesday. If you're going to be there and see me, stop me and say hello. I look forward to chatting with you and love talking with subscribers and hearing your stories.

I will send a few on-the-ground reports here next week. But if you're interested in taking in our conference and won't be in Vegas (in-person tickets are sold out), your best bet is to purchase a Livestream Pass.

It gives you live access to presentations and the ability to access video replays, summaries and presentation materials to review afterward, and other special features. You can find more information here, including pricing details and more about our speaker lineup.

If you're interested, though, do it soon (or now). Livestream Pass sales close tomorrow.

Here are six specific things (among many more) that I'm looking forward to...

We'll have a lot of great things going on at our conference this year from our guests and editors (including exclusive picks and insights). But if I manage to hit all the events on this checklist, I'll be pleased...

1. Our founder Porter Stansberry's sit-down interview with acclaimed author Michael Lewis. Two prolific storytellers will take the stage for the first time together on Monday morning. Given their financial acumen, we'll be taking a lot of notes. I expect to hear some discussion about Lewis' classic book, Liar's Poker, about real life in the bond market, and his more recent book, Going Infinite, about disgraced FTX founder Sam Bankman-Fried.

2. Rick Perry's thoughts on the future of energy. The former Texas governor and secretary of energy under Donald Trump takes the stage on Wednesday for a talk about a "new American energy era." There's plenty to talk about with oil and gas alone. But among my thoughts: What does he think about nuclear? (Dan Ferris and I are also scheduled to interview Rick for an episode of Stansberry Investor Hour while in Vegas, so I will definitely ask him, too.)

3. "Bull, Bear, or B.S." One of my favorite listens each year: A panel of our editors will share whether they're bullish or bearish about certain financial trends or headlines, or whether they're nonsense you should ignore. The debate has a quick pace, but it's meaty.

4. Dave Lashmet on the brain. I've been told that the title of Stansberry Venture Technology editor Dave Lashmet's presentation this year is "This Is Your Brain, One Year Later." I'm intrigued.

5. Howard Lindzon on the "degenerate economy." There's no better place to talk about "speculation as entertainment" and "investing as a sport," as Howard describes it, than Las Vegas. I briefly worked with Howard, the co-founder of StockTwits among other things, several years ago and have followed his work ever since. He writes a great daily blog with accessible, timely insights on tech and other topics.

6. Wine and guitar grooves. For those that don't know, as a younger man, Extreme Value and The Ferris Report editor and my Stansberry Investor Hour co-host Dan Ferris became a classically trained guitarist. He'll play on Tuesday night on our main stage at the Aria, after a wine-tasting event hosted by Retirement Millionaire editor and winery owner Dr. David "Doc" Eifrig.

Those are just a few preview notes...

I didn't even mention that former OpenAI exec Zack Kass will be on hand talking about artificial intelligence, and former Oakland A's general manager Billy Beane – one of the main characters in Michael Lewis' book, Moneyball – will also be giving a talk.

As I said, we'll have some reports on our conference next week here, but there's no way I can get to everything. Nor can I share it all out of fairness to paying attendees. Short of being there in person, your best bet to experience the conference is via our livestream before we close off sales tomorrow.

Click here for more details and pricing information, and get a Livestream Pass today.

Moving on, the traditional drugstore is dying...

Earnings season is continuing, and as usual, we're learning some things about what's really going on with the economy.

For example, in its quarterly report earlier this week, Walgreens Boots Alliance (WBA) announced that it's planning to close 1,200 of its pharmacy locations over the next three years. That's about 13% of the company's retail footprint, as at the end of last year, Walgreens had about 8,700 drugstores across the U.S.

And even more closures could be on the way...

Walgreens also said that a quarter of its current stores (about 2,200) are running at a loss. Assuming that all the stores in the latest round of closures are among the money losers, that still leaves another 1,000 struggling locations.

Last month, I wrote about my recent experience in a local Rite Aid. Between understaffed stores and increased "inventory shrink" (code for theft), the experience at larger retail drugstores has changed drastically, as consumer spending habits have changed as well.

Many people can get the convenience that these drugstores offer elsewhere, through leading retailers like Amazon, Walmart, or other companies' direct-to-consumer platforms. That's hitting all the conventional drugstore chains across the industry.

I discussed now-bankrupt Rite Aid last month. But Rite Aid had its own problems – like a huge debt load and years of negative cash flows.

Walgreens' story is a little different...

Walgreens has generated positive free cash flow ("FCF") in every year since at least 2010. And its debt load has come down to about $33 billion after peaking at $40 billion in 2020. So, on the surface, it's not facing the same immediate danger as Rite Aid.

But that doesn't mean Walgreens is in great shape...

The company's cash flows have been in decline since peaking at $6.9 billion in 2018. And it has run at an FCF deficit over the past 12 months. Walgreens also ran at a loss in 2023, and it just reported an $8.6 billion loss for the 2024 fiscal year.

Those are hardly the hallmarks of a thriving business. So, it makes sense why management is pushing to make changes.

Investors have already punished Walgreens... Its shares have been locked in a steady downtrend since peaking in 2015. Since then, Walgreens' stock has plummeted 90%, and recently hit its lowest level since 1997. Take a look...

That's not too dissimilar to Rite Aid's own share action. As I wrote last month...

Shares of the bankrupt company now trade for less than a penny under the ticker RADCQ, down from Rite Aid's all-time high of $1,000 per share in January 1999...

On the news of the store-closure plans, Walgreens shares popped by about 16% on Tuesday and traded 6% higher on Wednesday. Only time will tell if Walgreens' cost cutting turns the company around, because the conventional drugstore model isn't working.

Either way, this round of store closures means that more folks across America will soon need to find a new pharmacy.

More Chinese stimulus is coming...

Let's follow up on our discussion last week about the stimulus the Chinese central bank has delivered... and Chinese stocks' reaction to that... and the expectation for additional fiscal stimulus still to come.

Well, the plans for the latter appear to be moving along...

Last weekend, China's Ministry of Finance ("MoF") held a press conference and essentially promised that more "help" was on the way in various forms, though it didn't formally roll out any specific plans.

Some analysts called the press conference "disappointing" because it didn't bring with it an announcement of direct payments to consumers (man, we are spoiled). But the overall message from Chinese decision-makers sure sounded "stimulative" to me...

As it did to KraneShares Chief Investment Officer Brendan Ahern, who we featured in a two-part interview here last week. He wrote a comprehensive recap of the Chinese finance ministry's weekend press conference here, saying in part...

Yes, the MoF did not say domestic consumers will get payments, but focusing on that disregards what was otherwise a very positive press conference. Western media headlines were only focused on domestic consumption, which misses a multitude of positives, including buying unsold apartments for affordable housing, addressing local government finances, and their "hidden debts," and capitalizing on banks' balance sheet.

Then, today, China's housing minister announced the country will speed up bank lending and expand it by about $562 billion through its "whitelist" initiative for unfinished real estate developments in cities by the end of the year.

It also made all commercial housing projects eligible for the initiative. As Stansberry Research analyst Brian Tycangco has been noting on social media platform X about the Chinese economy lately, "Solving the real estate problem solves A LOT."

Yesterday, shares of real estate developers in China surged. One, Ronshine China, more than doubled while others rose by double-digit percentages in a day. Today, Chinese stock indexes fell some – perhaps in a "buy the rumor, sell the news" reaction.

But all in all, Chinese authorities are pledging a stimulative position until further notice. Any further rally in Chinese stocks may include pullbacks, but they have big tailwinds behind them right now.

As our Brett Eversole recently wrote this week in DailyWealth about Chinese stocks, history suggests that a rally like we've seen over the past month – including 13 consecutive up days – suggests more gains over the ensuing year.

Elsewhere, too...

The European Central Bank ("ECB") today cut interest rates for the third time this year after Eurozone inflation fell to 1.7% in September, joining the economies of Germany and France with sub-2% inflation paces last month. ECB President Christine Lagarde suggested that Europe faced a bigger risk of slowing economic conditions than of runaway inflation, meaning that more rate cuts could be coming.

Here in the U.S., retail sales for September reportedly increased by 0.4% from August, above mainstream economists' expectations. That's while the market expects more rate cuts from the Federal Reserve as well.

The major U.S. indexes were mostly up, with the small-cap Russell 2000 Index down slightly.

Most significantly, the hard asset of gold hit another new all-time high, trading above $2,690 an ounce. Gold is now up roughly 30% year to date.

With a heavy dose of monetary-policy support in the financial stew today, investors aren't ready to bet that inflation is licked for good.

New 52-week highs (as of 10/16/24): Atmus Filtration Technologies (ATMU), American Express (AXP), Booz Allen Hamilton (BAH), Alpha Architect 1-3 Month Box Fund (BOXX), Brown & Brown (BRO), BWX Technologies (BWXT), Cameco (CCJ), CME Group (CME), Cisco Systems (CSCO), Cintas (CTAS), Fidelity National Financial (FNF), SPDR Gold Shares (GLD), Generac (GNRC), W.W. Grainger (GWW), Home Depot (HD), Houlihan Lokey (HLI), iShares Convertible Bond Fund (ICVT), iShares Core S&P Small-Cap Fund (IJR), iShares U.S. Aerospace & Defense Fund (ITA), Jack Henry (JKHY), Kellanova (K), Kinross Gold (KGC), Kinder Morgan (KMI), Linde (LIN), Lockheed Martin (LMT), Mueller Industries (MLI), VanEck Morningstar Wide Moat Fund (MOAT), Motorola Solutions (MSI), Newmont (NEM), Pembina Pipeline (PBA), Invesco High Yield Equity Dividend Achievers Fund (PEY), Sprott Physical Gold Trust (PHYS), Ryder System (R), Royal Gold (RGLD), Sprouts Farmers Market (SFM), Sherwin-Williams (SHW), SPDR S&P 600 Small Cap Value Fund (SLYV), Snap-on (SNA), S&P Global (SPGI), SPDR Portfolio S&P 500 Value Fund (SPYV), Cambria Shareholder Yield Fund (SYLD), Torex Gold Resources (TORXF) Toast (TOST), Travelers (TRV), ProShares Ultra Financials (UYG), and Utilities Select Sector SPDR Fund (XLU).

In today's mailbag, feedback on yesterday's edition, which included an analysis of Boeing's latest woes... As always, send your comments, questions, praise or rage to feedback@stansberryresearch.com.

"Remember the 'last one to leave Seattle, turn off the lights' billboard [in the early 1970s]? Amazing mismanagement [at Boeing]." – Subscriber Russ S.

All the best,

Corey McLaughlin with Nick Koziol
Baltimore, Maryland
October 17, 2024