The Pig Farmer's Almanac

The story of Samuel Benner... An Ohio pig farmer's posthumous winning predictions... The power of cycles... How to put them into action... Greg Diamond's urgent message for this week... More Diamond's Edge...

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This farmer made prophecies...

About a year ago, I (Corey McLaughlin) saw a chart that made me chuckle... It was during one of our video presentations and was shared by our colleague and Ten Stock Trader editor Greg Diamond...

Here was Greg, a former Wall Street hedge-fund trader and expert technical analyst, sharing his market prediction for 2023 with our readers... and he was talking about a pig farmer? Who lived 150 years ago?

It might sound ridiculous until you understand the basis of the man's research and why Greg was sharing it. Here's the chart, which the Ohio farmer, Samuel Benner, published in 1875...

As I wrote last January, Benner was doing well financially back in the late 1800s, but he lost everything in an 1873 market panic and a hog-cholera epidemic. The experience left him struggling to make sense of how it happened.

What he discovered...

Without getting too far into the details, as he sought to understand why commodity prices rose and fell at certain times, Benner made a remarkable discovery that would go on to make him rich.

It also made multimillionaires out of the handful of people who studied his work in the years afterward, through bull and bear markets. As Greg explained...

In short, he discovered the power of cycles... and how these cycles affect prices.

It was 10 years after the Civil War, yet Benner felt confident enough in what he found to put together a timeline predicting market movement out to 2059. He shared his work in a book titled Benner's Prophecies of Future Ups and Downs in Prices. As he wrote in the preface...

It should be the highest aim of the farmer, manufacturer, and trader, in a business point of view, to penetrate the future, and calculate what years he can realize the best prices for his products.

He came to discover a 27-year cycle in "pig iron" – smelted iron ore – prices... and 11-year cycles in corn and cotton. And it's uncanny how often this old Ohio pig farmer has been right, even posthumously, beyond commodities he fixated on...

Look closely at what Benner published in the chart above...

1965 was the year of a big market peak before it plummeted 73%. 1999 was what Greg describes as a "cash panic" in which people paid any price for dot-com stocks. And we know what we've experienced the last few years, with a market bottom occurring in late 2022.

Just as fascinating, Benner shared instructions for managing emotions over the long run... pinpointing precise years "in which panics have occurred and will again"...

He shared 16 years that he predicted would be periods of "hard times, low prices" when it would, counterintuitively, be a good time to buy stocks and quality "corner lots"... And he picked out "good times, high prices" periods that would follow, which would mark good times to "unload" and make profits (again, perhaps counterintuitively to amateur investors).

Save this card and watch it closely, he said. Benner died in 1913 and is still doing better than a lot of living market prognosticators.

Why it matters...

The point here is not to suggest you follow Samuel Benner's findings about market peaks and bottoms to a T when making investment decisions, though his lessons about when to buy and sell are timeless.

You might prefer to root portfolio management in deep fundamental analysis, letting shares of high-quality companies compound your wealth in good times and bad. And that's fine and recommended, too.

But there is something to be said about the usefulness of identifying cycles of history and human behavior... Booms and busts. Euphoria and panic. Even generational cycles. The past can inform expectations for the future.

And there's even more to be said if, as a more short-term oriented trader like Greg, you can put that information into action. Then you can grow wealth and protect your portfolio from the kind of panics that inevitably rattle the markets. Greg has proved that he can.

Turning theory into practice...

Greg uses a unique brand of technical analysis honed over two decades as a pro trader, which accounts for cycles many traders ignore to their detriment. Based on this analysis, Greg warned his Ten Stock Trader subscribers (warnings that we shared with Digest readers) of broad market sell-offs before they happened in 2020 and 2022.

For years, Greg has helped his subscribers limit losses (we've seen plenty of reader feedback to this point) and also make money on dozens of trades in all kinds of markets, bear and bull, and in between. How? Well, I can tell you it's not just based on one old Ohio pig farmer's chart.

As Greg explained just today in a brand-new installment of our new Diamond's Edge series (available to Digest readers exclusively today at the bottom of today's edition)...

If something happened in the past, can we measure it statistically? Can we take two pieces of criteria, or three, or four, and when those happened in the past, do they happen in the future?

And then, after "running the numbers," how can you position your portfolio or make a trade that weighs the upside potential history might suggest versus the downside risk that is also possible? It's not easy to do, but this is key to long-term trading success.

As you might have just read in our publisher Brett Aitken's latest annual Report Card of our publications and editors about Greg, who received an A+ for the five-year performance of Ten Stock Trader...

If you've been following his work for any period, you will know that Greg has been on a tear for a few years now. He crushed the market in 2022 with a staggering 23% average gain while his benchmark tanked more than 25%.

His track record showed a modest 3.2% average gain for 2023 – about flat with the benchmark at 22.4% annualized. But if you caught one of his hot streaks... you should have booked huge gains.

Brett mentioned a pair of long winning stretches Greg put together last year...

Over a single month-and-a-half stretch starting in mid-April, Greg put on 11 trades. He booked gains on every one of them. And five of the 11 were triple-digit winners, including a 197% gain on a Tesla (TSLA) call option. The average gain on these 11 trades was 88%.

If you thought that was a fluke, consider this: From August 28 through the end of the year, Greg placed another 20 trades... this time booking 19 winners for an incredible 95% win rate. The average gain across all 20 positions was 18%.

You can't do this, at least year after year making dozens of trades like Greg recommends in Ten Stock Trader, without having a strategy... trusting it to perform in various market environments... and knowing how to manage risk.

Not every trade will be a winner. History can be a good guide, but it might not predict the future in all ways. Greg had losses last year, too, but the winners far outweighed them.

Seeing the big picture...

Specifically last year, Greg said it was a time to "get out of cash" and buy stocks, which turned out to be prescient. The S&P 500 finished 24% higher. Yet he also warned it wouldn't be a straight shot higher, and 2023 wasn't.

Remember that banking crisis? And remember the big year-end rally that made 2023 numbers look much rosier than they were in October? As we wrote last January about Greg's outlook for 2023...

In short, this year could be the start of a "period to make money." However, Greg warns that more pain could be ahead before the greatest opportunities present themselves. It's not as simple as finding the right points on this chart. There's a strategy involved...

The same message is true today...

I'm sharing this brief historical note on Samuel Benner and the importance of cycles because, according to Greg's analysis, another important inflection point for the markets is just days away.

In fact, Greg says it will be the stock market's biggest turning point of the year.

He recently sat down on camera to get the message out, just like he did before the market sell-off in 2022 and the "period to make money" in 2023. As Greg says now...

In short: Just days from now, I predict today's bull market will begin a massive downside correction, which could take a lot of people by surprise... and cause you to make some very bad decisions with your money.

But the fact is, if you know what's coming, and you know what to do... it will be the absolute best opportunity in 2024 to make serious gains, faster than you can imagine...

Check out Greg's latest presentation for more details. He runs through his entire argument, shares more about his background and fascination with cycles, and even offers a free trade to take advantage of the next big market move he is anticipating. Don't miss it.

New 52-week highs (as of 2/9/24): Autodesk (ADSK), Applied Materials (AMAT), Amazon (AMZN), ASML (ASML), Broadcom (AVGO), American Express (AXP), Booz Allen Hamilton (BAH), Berkshire Hathaway (BRK-B), Brown & Brown (BRO), Ciena (CIEN), CyberArk Software (CYBR), iShares MSCI Emerging Markets ex China Fund (EMXC), Comfort Systems USA (FIX), Intercontinental Exchange (ICE), Jack Henry & Associates (JKHY), Eli Lilly (LLY), VanEck Morningstar Wide Moat Fund (MOAT), Microsoft (MSFT), Motorola Solutions (MSI), Neuberger Berman Next Generation Connectivity Fund (NBXG), Novo Nordisk (NVO), Palo Alto Networks (PANW), UiPath (PATH), Parker-Hannifin (PH), ProShares Ultra QQQ (QLD), Ferrari (RACE), Repligen (RGEN), Invesco S&P 500 Equal Weight Technology Fund (RSPT), SentinelOne (S), VanEck Semiconductor Fund (SMH), ProShares Ultra S&P 500 (SSO), Stellantis (STLA), TFI International (TFII), ProShares Ultra Semiconductors (USD), Vanguard S&P 500 Fund (VOO), and Advanced Drainage Systems (WMS).

In today's mailbag, feedback on Dan Ferris' latest Friday Digest... Do you have a comment or question? As always, send your notes to feedback@stansberryresearch.com.

"Hi Dan, Thanks for Friday's excellent reinforcement of risk assessment. I, for one, can always use the self-check. The Dunning-Kruger effect nicely explains the arrogance of the over-abundant 'experts' currently destroying our society. Arrogance and money make poor leaders though that seems to be what people like to follow, i.e. Hollywood and 'professional' sports.

"History fans can see this human fault crashing societies all the way back to the Greco-Roman era before the arrival of Christ. Thus, I believe the political arena made use of this form of arrogance prior to financial markets' participants.

"Thanks again for your continued focus on perpetual caution and humility." – Stansberry Alliance member Joel B.

"The article on 'folks are dumber than they think' is a stimulating and thought-provoking article... Thank you.

"I think we all fall into the Dunning-Kruger trap from time to time to some degree or other and I'm certainly no exception. Perhaps it's human nature. One of the tools you mention for managing that risk is position sizing. Patience is another tool that sometimes works. But, I'm glad I never invested in any of Cathie Wood's funds.

"Two of your quotes from Cathie Wood strike me the most: First, '... to focus solely on disruptive innovation' is not entirely wrong. The word 'solely' ignores position sizing and is the main problem. However, patience, in some cases, can result in some/many extraordinary gains on disruptive innovation stocks even after their prices are in the sewer.

"Second, her comment that 'I've never seen markets this dislocated,' is spot-on. She's not alone in ignoring the ramifications of political economics which is an error that most analysts and investors ignore. Porter Stansberry is a welcome exception to this ignorance..." – Subscriber Michael U.

All the best,

Corey McLaughlin
Baltimore, Maryland
February 12, 2024