The War Hedge Worth Thinking About Today

Our keynote speaker at the next Stansberry Conference... He has reinvented himself... Other speakers and more to come... More trouble for PacWest... The second war brewing... Hedge like Warren Buffett...

We have a controversial decision to report...

Stansberry Research just announced the keynote speaker we chose for our 21st annual Stansberry Conference... We'll return to our usual location in Las Vegas this October after last year's Boston conference. And we'll be hearing from... Lance Armstrong.

Yes, the Lance Armstrong: the former winner of seven straight Tour de France cycling races and cancer survivor who was later stripped of his titles after finally admitting (in an interview with Oprah Winfrey) to using performance-enhancing drugs.

This guy certainly has a story to tell...

In our era of "cancel culture" – which has only intensified over the past decade since Armstrong's admission – I'm curious to hear what he has to say and what his life has been like since becoming a lightning-rod figure and largely shunned.

There's no doubt Armstrong made mistakes. He cheated in competition to win a world-renowned sporting event. He spoiled his reputation, despite having raised more than half a billion dollars for cancer research and made yellow LiveStrong Foundation bracelets a brand.

If you're disgusted by the idea of hearing from Lance Armstrong, I (Corey McLaughlin) understand, but I'm keeping an open mind. I expect his talk at our conference to be interesting, entertaining, and enlightening, which is the point.

Also, Armstrong can talk about more than his famous rise and fall in the bicycling world...

Recently, he began hosting two popular podcasts: "TheMove" (about cycling) and "The Forward" (about all kinds of things). And he's now an investor, too... as a partner in Next Ventures, a venture-capital firm investing in early-stage health and wellness companies with at least 15 businesses in its portfolio.

Lance will be far from the only speaker at the conference...

Our team has already lined up an impressive group of presenters that will grow and expand as we get closer to the event, which will take place October 16 and 17 at the Encore at Wynn Las Vegas. Other speakers already committed to the conference include...

• Danielle DiMartino Booth, a former Federal Reserve advisor and author of Fed Up: An Insider's Take on Why the Federal Reserve Is Bad for America. (She's a fun follow on Twitter, too.)

• Josh Brown, the CEO of Ritholtz Wealth Management, operator of "The Reformed Broker" website, and a visible market commentator and podcast host. In fact, he hosted the podcast with Tony Dwyer we cited earlier this week.

• Ben Mezrich, the bestselling author of Bringing Down the House: The Inside Story of Six M.I.T Students Who Took Vegas for Millions. (How appropriate, given the setting for the conference.) You might also know the 2008 movie version of this book, called 21 and featuring Kevin Spacey as the students' professor.

• And Morgan Housel, one of my favorite market thinkers, a partner at The Collaborative Fund, and author of The Psychology of Money, which has sold more than 3 million copies and has been translated into 53 languages.

Of course, our team of Stansberry Research editors and analysts will also be there, sharing exclusive insights and ideas you won't hear anywhere else, in addition to friends, colleagues, and other invited guests from around the world of finance.

Tickets aren't on sale yet, but to stay updated on all the details about our Vegas conference, be sure to enter your e-mail address on this page. We'll keep you updated on added speakers, venue information, when ticket sales open up, and more...

Moving on to the markets today...

The bank crisis still isn't over yet...

Shares of regional bank PacWest (PACW) had rallied over the past several trading days. But they crashed more than 20% today after the bank reported today that its deposits fell 9.5% last week while its stock price had been cratering.

As we reported last week, this part of the "crisis" had been more about PacWest and other regional bank's stock prices, not necessarily its deposits on hand like was the case with Silicon Valley Bank back in March.

But the market action around PacWest, and its announcement that it was exploring "all options to maximize shareholder value," appears to have unnerved many customers. As we've shared lately, the Federal Deposit Insurance Corporation ("FDIC") guarantees the first $250,000 of most folks' deposits... But folks above that limit appear to be scrambling to take out their money in case the bank fails.

The better news, the bank said, is that it now has $15 billion of available liquidity compared with $5.2 billion in uninsured deposits. So this might not develop into a full-blown bank failure, but it's not out of the question either.

On it goes...

The second war brewing...

I hope to cover this story a little bit more next week, but for now I just want to alert existing Stansberry Venture Technology subscribers to a fresh buy recommendation from editor Dave Lashmet. It's tied to China's potential invasion of Taiwan... or, at the very least, the fears about this possibility.

You may have seen the news recently that Warren Buffett's Berkshire Hathaway (BRK-B) sold 85% of a $5 billion stake in Taiwan Semiconductor Manufacturing (TSM) that it had bought just a few months ago.

This business is located directly in the crosshairs of a potential military invasion by the Chinese. Buffett is concerned about the consequences that would face this company, its stock, and the semiconductor industry in general.

Taiwan likes to call its chipmaking plants a "silicon shield" that will protect against any invasion. But what if it doesn't last? Think about it: How many people really expected the Russian military to invade Ukraine, until it was almost imminent? That led to a lot of knock-on consequences in energy and the inflation story.

Well, sorry to say, but the Chinese government has been taking steps to bolster its military lately that sure sound concerning. As Dave wrote to his subscribers...

On May 1, China made changes to its military-service law. One of its big focuses is to draft more science and engineering students. The Chinese government wants soldiers who can take on satellites, drones, and cyber campaigns. Its military is also researching "intelligence warfare," focusing on artificial intelligence ("AI") and other technologies.

China is building out its army, too. It's making sure its land, sea, and air forces are complete. Potentially, that's an invasion force to occupy Taiwan.

While none of us wants war, it's coming...

Dave also detailed the reasons that China may be less eager to go to battle against Taiwan while war in Ukraine is still raging.

In the meantime, Chinese President Xi Jinping doesn't sound like he has been picking up President Joe Biden's phone calls since the whole spy balloon incident, as our Stansberry NewsWire's Kevin Sanford noted today in his daily market outlook.

Even if war in Taiwan likely won't happen tomorrow

It's already wise to hedge against a Chinese invasion today, like Buffett did...

Buffett had invested in Taiwan Semiconductor via American depositary receipts ("ADRs"). A bank bought these corresponding shares in Taiwan. But as Dave wrote, the Oracle of Omaha sold most of his position because...

The issue is, if there's no Taiwan – and, thus, no Taiwan Stock Exchange – the ADRs are worthless. You could wake up one morning and the shares have zeroed. It's the truest and swiftest expression of "risk is loss." And it would be a loss that no one could tolerate.

You may have also seen reports that Buffett is now more bullish on stocks in Japan, which figures to be the U.S.'s closest ally in the region should a full-blown conflict begin in the South China Sea and Taiwan. That may be one way to hedge against this war threat...

Dave – who has been ahead of this story for years warning of the threat of war in Taiwan and the impact on semiconductors – has another hedge, much closer to home... And it's a buying opportunity. He's calling it "The Great Taiwan War Hedge."

It's a business that is uniquely positioned to have a monopoly on various parts of the semiconductor industry should war break out in Southeast Asia. We don't want to see it, but it's becoming increasingly wise to think about the possibility.

Existing Venture Technology subscribers can find all the details here.

Soloway: Market Disaster Is Looming

"I actually have a very bearish outlook for the second half of this year," warns Gareth Soloway, president and chief financial officer of InTheMoneyStocks.com. He predicts a 20% correction in the S&P 500 Index and that inflation will linger around 3% for several years...

Click here to watch this episode of The Daniela Cambone Show right now. And to catch all of the videos and podcasts from the Stansberry Research team, be sure to visit our Stansberry Investor platform anytime.

New 52-week highs (as of 5/10/23): AutoZone (AZO), Copart (CPRT), Salesforce (CRM), Cintas (CTAS), Enstar (ESGR), iShares MSCI Mexico Fund (EWW), iShares U.S. Home Construction Fund (ITB), Eli Lilly (LLY), London Stock Exchange Group (LNSTY), Microsoft (MSFT), NeoGenomics (NEO), O'Reilly Automotive (ORLY), Flutter Entertainment (PDYPY), PulteGroup (PHM), Spotify Technology (SPOT), Vericel (VCEL), and Verisk Analytics (VRSK).

In today's mailbag, thoughts on yesterday's Digest, which included investor Stanley Druckenmiller's thoughts on government spending... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"These clowns can never be considered seriously until there is a balanced budget amendment. Last year's tax receipts are this year's spending limit. Duh!" – Paid-up subscriber Mike G.

"All of this talk about the national debt is interesting. The goobermint loses about $3.3 billion every day, and in order to start to bring that down, you would have to make $11.2 billion every day. I would advise that the Digest talk about this today. The amounts are likely greater than this.

"Let's say over the next 10 years, you wanted to do that... Then everybody making more than $500K/year would have to pay all of their money back to the government. For 10 years they would have to be as productive as they are currently, but more than 100% of their income would have to be paid to the government.

"Some of the money they would pay would even exceed their income. The rest of income producers would do that also proportionally. Lowest incomes would have to pay at least one-third back..." – Anonymous paid-up subscriber

All the best,

Corey McLaughlin
Baltimore, Maryland
May 11, 2023