Wrapping Up Our Annual Conference
This year's Stansberry Research conference is in the books... 'Leftovers' from three days in Vegas... What gold's all-time high really means... Bets on a future many can't imagine... Bucket thinking... Handicapping wars and the U.S. election...
Just like that, it's over...
Another annual Stansberry Research conference is in the books. We're headed back east after a jam-packed three days at the Aria Resort & Casino in Las Vegas... full of financial insight and investment ideas from our team and special invited guests.
As we travel back home today, I (Corey McLaughlin) want to share a few brief "leftovers" from the previous three days in Vegas. (You can also check out more in our live reports from the conference this week here, here, and here.)
What gold's all-time high really means...
We found ourselves nodding along to pretty much every word Rich Checkan, the president and chief operating officer of Asset Strategies International, was saying about the bullish case for gold during his presentation on Monday.
Central banks are buying gold... Retail investors in Asia are buying gold (and at a premium). A bull market for the precious metal is just getting started, he said, even as it trades near an all-time high above $2,700...
Why? "It's not gold getting more expensive," Rich said. "It's the dollar weakening."
Rich shared a chart that showed gold's price tracking the U.S. money supply (which we recently wrote is headed higher once again). And regarding fiscal and monetary policies that continue to devalue the U.S. dollar, he said...
I don't see any way on Earth that this ends. We are just now getting going with gold... Find a way to buy some. Today is better than tomorrow.
Rich had a captive audience. Later that same day, he held a breakout session for attendees and was still fielding questions nearly an hour past his allotted time.
Overheard on Alliance Day...
Some of the picks that our editors and a few friends shared yesterday during the exclusive Alliance Day put my jaw on the proverbial floor. I can't mention them specifically here, but just to give you a taste...
During a panel featuring "capital efficient" stock picks, Stansberry Venture Technology editor Dave Lashmet presented on a business he says has developed an innovative cancer treatment that could be worth $30 billion to the company in five years.
In a session on "growth" stocks, Marc Chaikin – the founder of our corporate affiliate Chaikin Analytics – couldn't make it to Vegas due to an illness but joined the room remotely... and we're glad he did.
Marc made a compelling case for a self-driving-vehicle company that he said has "moonshot" potential. It has a bullish Power Guage rating despite not being profitable yet, a rare but potentially major bullish signal, he said.
Coming a day after former OpenAI executive and researcher Zack Kass told the crowd that he thinks autonomous vehicles ("AVs") will dominate our roadways one day, this pick certainly got my attention...
I've probably been skeptical about the prospect of widespread AV adoption as much as anybody. But when smart people coming from vastly different perspectives point to the same story being an opportunity, it's a signal worth thinking about.
Think in buckets...
Rob Spivey, the director of research of our corporate affiliate Altimetry, asked attendees two important questions... They reminded us of the Permanent Portfolio concept (with a few twists) that our founder Porter Stansberry discussed on Monday morning.
Rob asked: Have you sat down with your financial adviser and gone over your personal balance sheet? And have you built a realistic allocation model for the future?
As he went on to explain, putting your money in the right places is much more important than finding the next big winner. He added that one-size-fits-all allocation models like the "60/40" portfolio (60% stocks/40% bonds) are like "stealing money from your future self."
As an example, he showed returns from a 100%-stock portfolio and a 50% stock/50% bond portfolio over a roughly 100-year period. In total, the 100%-stock portfolio returned more than 17,000%. But this portfolio also saw big drawdowns of as much as 40%.
Allocating half the portfolio to bonds would seem like the easiest way to get rid of some of that volatility. But that's not the case, as Rob showed. The 50/50 portfolio still suffered 23% drawdowns. And it took the total return down to only about 6,000%.
So bonds don't always do a great job of reducing risk, but they do eat away at total returns. And stocks, while more volatile, show that the risk is worth the reward if investors can withstand the pullbacks.
Now, Rob didn't go out and recommend folks pile all their assets into U.S. equities. For that, Rob and Altimetry founder Joel Litman have built out a model to help their subscribers properly allocate to stocks and other asset classes, depending on their goals and time horizon...
The Altimetry Timetable Investor newsletter, which is free for all Altimetry subscribers, includes a seven-step process that tells you exactly what to do with money you'd need in four buckets: zero to two years, two to five, five to 10, and more than 10 years.
Whether you explore the product more or not, "thinking in buckets" when it comes to portfolio management is another idea we heard multiple times during the conference that's worth thinking about more.
Geopolitics are also front of mind, of course...
Marko Papic, a geopolitical analyst at BCA Research who spoke on Monday, also sat for an "exit interview" with us after his talk... sharing some additional takes on how he thinks the wars in Ukraine and the Middle East may end. On the Russia-Ukraine conflict, he said...
I think the war is going to end by the end of 2025. It's not going to end in a peace deal. It's just going to end in a ceasefire. The two sides are going to agree to disagree. The Russians are not going to withdraw from territories. The Ukrainians are not going to accept Russian control.
Many wars ended this way. South Korea and North Korea don't recognize each other... Serbia and Kosovo don't recognize each other...
The Middle East is more complicated, Papic said, but he had some predictions...
I think we overstate the ability for Israel and Iran to have a war against one another... There's going to be a lot of missiles going one way or another and they're going to exhaust their supply. Let's not forget that Israel and Iran are not China and the U.S.
My bigger concern is after the election, the U.S. has to look at the uranium enrichment activity by Iran, and that's something to watch. Because once the U.S. gets involved, the U.S. can have a war against Iran and can seriously degrade its ability to supply the world with oil for the next six months, no matter who wins the election. There's a crisis coming between the U.S. and Iran.
As for how the U.S. presidential election may go...
Papic said he doesn't think Kamala Harris has "enough cushion that I think you need against [Donald Trump]. You need a lead," he said, referring to how Trump's standing in polls improved in the final week of the 2016 and 2020 campaigns and might again.
That said, though, if Harris were to win, it would unlikely upset the status quo for the markets, according to Marko. That's because investors will take a Harris presidency as a continuation of the Biden administration. Plus, with Democrats unlikely to carry Congress, only her policies with bipartisan support could make it into law.
Meanwhile, Marko said a Trump win (and more of the same type of policies as his first term) could shake things up because the economic context is different from 2016. Namely...
Inflation is higher this time, changing the game...
Papic said...
In 2016, Trump brought growth and inflation. He did pro-cyclical stimulus, and stocks loved it because we needed growth. In 2016 and '17, we were in a disinflationary context. In 2024, nobody is long stocks because of growth and inflation. Everyone's long stocks because of "soft landing" and inflation coming down.
In 2024, I don't think we need growth. If Trump gets elected, we can see the 10-year yield go much higher and I think stocks would react negatively to it... I worry that bonds would not act as a hedge against equities.
We've seen that one before. Need I remind you about 2022? It was the worst year for the conventional 60/40 stock-bond portfolio in about 100 years and the worst year for bonds since the pen-and-quill days. It's something worth thinking about...
Exit interviews...
Stay tuned for more of these "exit interviews" with our speakers on our Stansberry Research YouTube page and social media channels over the next few weeks... Event emcee Amy Gamper recorded a few, as did Dan Ferris and I.
Yesterday, I got to sit down with former Texas Governor Rick Perry, who had more to say about nuclear energy, his experience working in Trump's cabinet, and more.
We also spoke with StockTwits co-founder and Social Leverage founder Howard Lindzon about the "degenerate economy," seed investing, and more.
And Chaikin Analytics Chief Market Strategist Pete Carmasino added his take on the election and what may or may not matter about it to the markets.
Pete said we're already seeing volatility tied to the election... Indeed, this week, the major U.S. stock indexes are down, and longer-term bond yields have kept rising. The 10-year Treasury is now above 4.2%.
We've had a busy but productive and thought-provoking time here in Vegas. Stay tuned for Dan's take tomorrow, and we'll return to more of our regular Digest fare next week.
New 52-week highs (as of 10/23/24): Agnico Eagle Mines (AEM), Alpha Architect 1-3 Month Box Fund (BOXX), Franco-Nevada (FNV), Kinross Gold (KGC), Medtronic (MDT), Sprouts Farmers Market (SFM), Skeena Resources (SKE), and the short position in SolarEdge Technologies (SEDG).
With a quiet mailbag today, let me just say thanks to the readers who I personally met out here in Vegas. It was great to see you and hear your stories about your businesses and careers, your investing experiences, and your impressions of the conference... As always, send your comments and questions to feedback@stansberryresearch.com.
All the best,
Corey McLaughlin with Nick Koziol
Las Vegas, Nevada
October 24, 2024