A Bullish Signal for Porter's Favorite Sector

Your chance to experience the world's best investment research, absolutely risk-free... A bullish signal for Porter's favorite sector... Double-digit gains are likely... Steve's favorite 'New China' investment is back in the news...

'You never cease to amaze me'...

Wow...

We expected a big response to Porter's Friday Digest announcement, but even we were surprised. As you'll see in the mailbag below, the feedback has been overwhelmingly positive so far. And for good reason...

Longtime Digest readers know Porter writes the Friday Digest with one thought in mind: To give you, the reader, the information we would want to know if our roles were reversed. But last week, he took this to the extreme...

In short, for the first (and likely last) time, we're able to offer every Stansberry Research subscriber the chance to experience the world's best financial newsletter – Grant's Interest Rate Observer – and attend the world's most exclusive investment conference, absolutely risk-free. As Porter explained...

I hope you can tell how important this is to me personally. Out of everything I've learned over 20 years in the financial markets, Jim's newsletter has been the single most valuable resource I've ever discovered. I personally read every issue the minute it hits my desk, and I never miss an issue. I've wanted to help introduce you to this incredible resource for more than 10 years, but could never convince Jim to help me make it happen. Now, finally, I have...

If you missed it, drop everything and catch up right here.

A bullish signal for Porter's favorite sector...

Longtime readers also know that Porter believes insurance – particularly property and casualty ("P&C") insurance – is the world's best business.

Earlier this month, we noted that while many insurance stocks – including the best-of-breed P&C stocks in the Stansberry's Investment Advisory portfolio – had sold off following the recent hurricanes, Porter and his team remained bullish.

But they are not alone...

In last week's True Wealth Systems Review of Market Extremes, Steve Sjuggerud and senior analyst Brett Eversole explained why they're bullish on the P&C sector today, too. From the update...

Markets overreact... It's a not-so-fun fact about investing... Stocks often soar further than is reasonable on good news, and they fall further than imaginable when news is bad.

The good news is that these overreactions often lead to major opportunities. And that's exactly what's happening right now in a specific area of the U.S. market...

Last month, Hurricane Harvey flooded Houston. And [last] week, Hurricane Irma devastated many parts of Florida (including where we call home). The real impacts to the citizens of Texas and Florida are the obvious tragedies of these storms.

But the hurricanes will have huge economic impacts as well. These days, a major storm can easily cost tens of billions of dollars. Who pays the bill?

Much of the losses fall onto property and casualty (P&C) insurers. And the sector has absolutely tanked in the wake of these storms, which we can see in the PowerShares KBW Property & Casualty Insurance Fund (KBWP). Take a look...

As you can see, the sector has already begun to rebound from its double-digit decline...

But Steve's research suggests we're only getting started. More from the update...

You see, P&C insurers hit a major oversold extreme based on their relative strength index ("RSI").

The RSI measures an investment's recent gains and losses. It signals when something is either overbought or oversold... which means a reversal is likely.

Last week, the P&C insurance sector hit an RSI of 22. That's an extreme oversold level... And it means big gains are likely.

The table below shows what similar extremes have led to going back to 1989. Take a look...

As Steve and Brett noted, it's not unusual for P&C insurers to plunge after a major storm. But history suggests it is often a terrific time to buy...

Similar extreme RSI levels have led to 9% gains in three months, 12% gains in six months, and 17% gains over the following year.

The sector is already beginning to recover. It's up around 8% in recent days. But history says that's just the beginning.

These storms are devastating for our communities. But the financial markets are overreacting, based on history. We could see a sustained rally good for double-digit gains over the next year.

Another week, another 'New China' revelation...

Regular readers know Steve believes Chinese technology firm Tencent Holdings (TCEHY) will eventually surpass tech giant Apple (AAPL) to become the world's largest and most dominant company.

It's already well on its way... The company has grown from the 169th-largest publicly traded company just eight years ago to the eighth-largest today. But we wouldn't be surprised to see it reach that milestone even more quickly than Steve expects...

Hardly a week goes by without word of another blockbuster deal or partnership involving the "New China" leader. In just the past month, we've seen the firm force Apple to accept its WePay mobile payment system in its app store, and strike an exclusive deal to bring National Football League games to China, among others.

Last week brought another. As news network NPR reported on Tuesday...

Among the deals being signed that shape the way the world experiences culture, a new partnership will exert a great influence on the flow of content from the world's three remaining major record labels to an enormous and growing marketplace...

Last night, China's two largest tech companies, Tencent and Alibaba, announced a deal centered around the world's largest catalogs of music. Tencent, which runs three of the country's most-popular music apps (QQ Music, Kugou and Kuwo) as well as the massively popular WeChat, will license the catalogs of Universal Music Group, Sony Music, and Warner Music Group to Alibaba, the online retail giant founded by Jack Ma.

In short, the deal solidifies Tencent as China's de-facto distributor and licensor of the three largest catalogs of music in the world.

Now, you may be wondering something...

Why would all three major music labels agree to such a deal?

After all, in the U.S. and elsewhere, it is the labels themselves that broker these deals. Why would they hand these rights over to Tencent? More from the report...

Normally, this is not how things are done; these companies spend months, sometimes years, striking deals directly with services like Spotify and Apple Music.

This ceding of control is due to innumerable factors but one central reason: The Chinese government wants its successes in technology and entertainment to be homegrown...

In other words, as one of the few independent technology giants based in China, Tencent is ideally positioned to help Western companies do business in the New China economy.

Your last chance to own Tencent at a big discount...

Steve remains bullish on Tencent today. Despite the big gains this year, he believes shares are likely to rise hundreds of percent more from here over the next several years.

But if you don't yet have a position in Tencent, Steve has found an even better way to profit from this opportunity... It's a rare and unusual way to own shares at a discount to the price other investors are paying in the market today.

If you're interested, don't delay. Steve says it's merely a matter of time before Wall Street catches on and this opportunity disappears forever. Click here to learn more.

New 52-week highs (as of 9/15/17): AMETEK (AME), Allianz (AZSEY), Boeing (BA), iShares MSCI BRIC Fund (BKF), WisdomTree Emerging Markets High Dividend Fund (DEM), WisdomTree Japan Hedged Equity Fund (DXJ), WisdomTree Japan Hedged SmallCap Equity Fund (DXJS), Euronet Worldwide (EEFT), Emerging Markets Internet & Ecommerce Fund (EMQQ), First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS), CurrencyShares British Pound Sterling Fund (FXB), iShares U.S. Aerospace and Defense Fund (ITA), iShares MSCI China Index Fund (MCHI), Microsoft (MSFT), Nvidia (NVDA), ALPS Medical Breakthroughs Fund (SBIO), iShares MSCI India Small-Cap Fund (SMIN), ProShares Ultra S&P 500 Fund (SSO), Stanley Black & Decker (SWK), Guggenheim China Real Estate Fund (TAO), and Tencent (TCEHY).

In today's mailbag, several subscribers weigh in on Porter's "unusual gift." What's on your mind? Let us know at feedback@stansberryresearch.com.

"Porter, Well DONE!! I have been a reader of Grant's for many years and you have described him and his work well. Your readers should be impressed!! I am... Thanks." – Paid-up subscriber (and happy with both Stansberry and Grant's) John M.

"Porter, you never cease to amaze me. Over the years you have given me so much information, so much knowledge, so many successful opportunities. Consequently I have become a successful trader. But getting this kind of information is inspiring in so many ways. Thanks so much for sharing this with us." – Paid-up subscriber Jeff Spranger

"HELLO PORTER, Thank you, holy cow, I am beyond excited. I signed up. I won't be asking for a refund. I never miss a chance to watch a Jim Grant interview or read anything from him that gets published. Having you guide me through the conference then the [post-conference] call is going to be an amazing treat. I was originally going to write and thank you and Mr. Lashmet for the [recent] stock pick and the $12 one-day gain I nabbed, but this beats that gain. Thank you again, have a great weekend." – Paid-up subscriber Neil Silver

"Porter: When I first got into the asset management world in the early 1980s it was with a fixed income shop. Needless to say we gobbled up Jim's work and devoured every issue. I have read his work fairly frequently until my retirement from the institutional world in 2009. As a retired 'retail' guy, I just couldn't justify the subscription... Love and miss his work! Enjoy the conference." – Paid-up Stansberry Alliance member Mike O.

"What a wonderful opportunity to take advantage of the Jim Grant offer you put forth in your column on Sept. 15! While the technicalities of investing are most likely way over my head, I was flattered that you made the offer as you have to me and to your entire readership base.

"I found your offer very touching, not because of the specifics of the offer itself, but because of what I saw in your heart. While you have often stated I do my best to give you the information I'd want if our roles were reversed, the specifics of your offer spoke loud and clearly that indeed your heart and a part of your pursuit in life is to do exactly what you said. (Not that I doubted your statement, but this opportunity was another demonstration of your commitment to this core value of yours.)

"This is an extremely refreshing quality to see in leadership, especially in the financial arena, and I applaud you for this; it is an indelible mark of servant leadership. May this opportunity be a blessing to you and Stansberry Research." – Paid-up subscriber Dennis Merdian

"Stansberry team, what an amazing offer. I hope many of your subscribers take you up on that offer. I would love to except that for now, my portfolio size doesn't justify such an expense. Thanks to the great recommendations, my portfolio is growing and I should be able to justify such a deal in the next 2-3 years. Even though I will not be taking the offer today, it is great to know that you and your team continue to look for innovative ways to add value. Thank you." – Paid-up subscriber Mario M.

Regards,

Justin Brill
Baltimore, Maryland
September 18, 2017