Editor's note: We're continuing our special Digest holiday series today with one of Dr. Steve Sjuggerud's biggest ideas from 2019...

Regular readers know all about Steve's "Melt Up" thesis – how he expects the U.S. stock market to roar much higher before the good times end. But Steve isn't just focused on the U.S...

You see, a few months ago, he recognized a tremendous opportunity unfolding in London property. And as you'll see in this essay – adapted from the October issue of his True Wealth advisory – Steve believes the best way to profit is through your brokerage account...

A High-Yield, Low-Risk Way to Make 50%-Plus in Three Years With London Property

By Steve Sjuggerud, editor, True Wealth

"What's been the best investment of your life?" I asked legendary investor Peter Churchouse years ago, when we first met in Tokyo.

"London rental property," he told me, over breakfast.

He then shared how his best property investment worked out...

"Right now, I'm earning 25% more than I paid for it – every year – in rent. And since I bought it with just 10% down, it's worth literally a few hundred times my initial deposit."

If you don't know, Peter Churchouse is about as international a person (and investor) as anyone you will ever meet...

He was the Head of Asia Research for Morgan Stanley in the 1990s – the heyday of international investing. He's a New Zealander by birth. He's lived in Africa (and even helped develop a city plan in Nigeria). He's lived in Europe. And today, he calls Hong Kong home.

I know for a fact that he owns properties all over the world...

I'm certain of properties he has in Asia, Europe, and Oceania (Australia/New Zealand). He also knows the country of South Africa well, and he travels out west in the U.S. every year. So it's not impossible to imagine that he owns property on every continent – except Antarctica, of course.

So what does Peter Churchouse like today?

That breakfast I mentioned was at least 15 years ago... So we can't go back into the past and buy what he bought then.

It just so happens that about a year ago, I visited him in Hong Kong. And while out sailing on his yacht – as seen in my New Money documentary – I asked him what he's doing these days with his money. (I wouldn't ask most friends about their money, but Peter and I like to talk about these things.)

When I asked what he was up to next, he said, "I'm flying to London, closing on a few properties."

"Buying or selling?" I asked.

"Buying, of course," he replied.

"Why London?" I asked.

"High yields... and low risk. What more do you need to know?" he said.

He continued...

"London is the safe haven. It's the global hub of finance. It's not just rich Brits and hedge-fund managers buying property, though. Rich Russians and Chinese are buying in London. People want to get cash out of their countries, and into something real. And they don't want to invest that money in the U.S. They buy in London. And I don't see that slowing down."

"But isn't London expensive?" I asked. "You already made a few hundred times your money there."

"The yields are still there. Again, high yields and low risk today, Steve... What more do you need to know?"

He's right. High yields and low risk are extremely hard to come by in our zero-percent-interest world.

Many of my readers have written in, asking me where they can find high yields and low risk to fund their retirements. The short answer is that it's extremely hard to find both high yields and low risk... But they are actually both available in British land right now.

Since that talk with Peter, I have been waiting for more than a year for an attractive entry point for us. Now, it's finally here.

You don't get many attractive entry points into London property. But as I'll show you today, we have one of those rare attractive moments – right now.

Even better – in a fantastic turn of events for us – buying into British land through the stock market is far cheaper today than it is to fly to London and buy the properties yourself.

When you add up the potential rewards from the yield, the price appreciation, and a potential gain in the currency value, we are looking at the potential for a safe total return of 50% or more in three years.

Let me explain...

How to Buy a Portfolio of London Trophy Properties – at a Roughly 30% Discount

What's the best way to buy British land?

Buy British Land – the stock. No kidding.

British Land (OTC: BTLCY) owns a lot of property – about $11 billion worth. (That $11 billion is its "net asset value" after subtracting debt, to be specific. It owns $15 billion-plus in property, but it has about $4 billion in net debt.)

It's a great portfolio, too... made up of the kind of London trophy properties that will ensure huge payouts for us.

We'll talk more about those properties later in the issue. For now, just know the rent is high... so high, in fact, that the stock is paying a dividend in excess of 5% a year – which is amazing in our zero-percent world. And that dividend is expected to keep rising for years to come, along with rents.

So if you buy shares of British Land today, you will pocket a return of more than 15% in dividends over the course of three years.

Again, that's likely a minimum of 15% – on dividends alone. That's a great deal by itself. But the story gets much better...

Looking at the stock, the company's net asset value ("NAV") works out to a NAV per share of $11.31.

Get this, though... As I write, the stock is trading for about $8.15 per share – a ridiculous discount.

Specifically, as I write, British Land's stock is trading for a discount of roughly 30% to the value of the company. Take a look...

NAV is also a rough measure of liquidation value for a company. So, to put it another way – if you liquidated British Land tomorrow at its NAV, you would make a return of more than 35% on the sale.

Or if shares of British Land simply rise from their current price (about $8.15) to their liquidation value ($11.31)... then you would make a return of more than 35% on your stock.

So we're looking at a definite 15% or more from dividends... Plus, we could make a capital gain of more than 35% if shares simply rise to the company's NAV.

And the story keeps getting better from here. That's because we're not just getting an outstanding property company for a huge discount, as I'll explain shortly – we're also buying into London at the perfect time...

Two Factors That Could Send the British Pound Up Double Digits

As Americans, we don't think much about foreign currencies. We typically don't need to, because the things we buy are priced in U.S. dollars.

We tend to forget that things outside the U.S. are NOT priced in dollars.

A dozen years ago, the British pound was strong – worth about two U.S. dollars each. Today it's weak. A pound is now worth about $1.30.

That's a big decline. And it means it was a good thing we didn't have our money in England – either in property or in the bank. Gains we could have made on property prices would have been wiped out by the fall in the British pound.

Today, though, we think the British pound has bottomed. And it could add dramatically to our investment.

Right now is a fantastic time to bet on the pound. Two major factors should drive it higher from here...

First, after years of uncertainty surrounding the possible exit of the U.K. from the European Union, investors are getting out of the British pound in droves. And for good reason...

The long-term consequences of Brexit are unclear. It could be years before we see how things shake out. That uncertainty is creating a lot of fear for the British pound, which is down roughly 25% from where it was five years ago.

After a crash like that, it's no wonder that investors have fled.

Futures traders were recently all betting that the pound would keep falling. And that negative sentiment should be a major catalyst in the coming months. That's because this kind of sentiment tends to be a powerful contrarian indicator...

We can see it through the Commitment of Traders ("COT") report for the British pound. It's a weekly survey that tells us what futures traders are doing with their money. And when futures traders are all betting in one direction, the opposite is likely to occur.

That's what recently happened in the British pound. Traders were all betting that the pound would keep falling. It was the most hated it's been since 2017. Take a look...

When the chart is low, futures traders expect the pound to fall. Over more than two decades, we've only seen a handful of times where futures traders were as bearish as they were recently.

Importantly, these were all great times to bet on a rally in the pound...

We saw similar cases in 2010, 2011, 2013, and 2017. Each case led to a rally in the British pound. Take a look at the one-year returns following these rare instances...

These are big moves for a typically slow-moving currency. And all four cases led to a run-up in the pound.

This is great news for us. A double-digit rally in the pound would be a major boost for our investment. But this isn't the only reason to expect the pound to rise from here.

After falling roughly 25% over the past five years, the British pound is dirt-cheap – which means greater potential upside for us. One of my favorite ways to see this is with a simple idea... the cost of a Big Mac.

I know it sounds silly. But The Economist magazine has published its Big Mac indexes for years. These track the price of McDonald's Big Mac hamburgers in different countries.

By comparing the same exact product overseas, we can focus on the difference between the actual currencies. The cost of beef, buns, and cheese should be pretty darn similar in the U.S. and the U.K. So if there's a major difference in the price of a Big Mac, the currency is likely the cause. The technical term for this is "purchasing power parity."

We don't need to get into the weeds here. But the basic idea is that the same product trading in one country should be roughly the same price in another country. And when one currency gets more expensive or cheaper than another, the disparity should close over time.

A Big Mac in the U.K. is about $4 today. (Remember, we're comparing both countries in dollars here.) In the U.S., the same Big Mac costs $5.58. That means the pound is a good value compared to the dollar today.

It's not just a good value, though. The pound is the cheapest it's been compared with the U.S. dollar in more than two decades. Take a look...

By this measure, the pound spent most of the 2000s overvalued compared with the dollar. Now it's dramatically undervalued, thanks to the major fall we've seen in recent years.

Today, you can buy a Big Mac in the U.K. for just 73 cents on the dollar. It's 27% cheaper in the U.K. right now. No kidding! That hasn't always been the case, though.

In 2008, a Big Mac in the U.K. cost 28% more than in the U.S... And from 1999 through 2009, that kind of premium was normal.

Now the story has flipped. The pound is at the largest discount to the U.S. dollar in the history of the Big Mac Index.

Now, I'm not predicting this discount will go away overnight. But this major gap likely won't last long... And for it to go away, the pound needs to rise relative to the dollar. That's another massive tailwind for the local currency.

Again, we're putting our money to work outside the U.S. That's an indirect bet on the country's currency, too. And that means we need to think about the currency we're buying – the British pound.

Today, the pound is extremely hated and dirt-cheap... And that's exactly what I look for in an investment. It means that as things turn around, the currency aspect of this investment should give us a big boost.

We could easily make another 15% to 20% on this opportunity based on a major rally in the pound. Combine that with the other ways we can make money in British Land, and our profits could really ramp higher.

Still, we need to make sure we're buying a quality company. So let's take a look at the nuts and bolts of British Land's business...

What It Means to Own British Land

The name is pretty self-explanatory. British Land owns an absolutely massive amount of land... in Great Britain.

Specifically, the company operates nearly 24 million square feet. That's about 415 football fields' worth of space.

Still, the company's model isn't as simple as buy it, lease it, forget it. Instead, you should think of it as a "community development" company.

Now, I hear you. That sounds like some pretty lofty jargon. But hang in there.

Community development is just a way of saying that British Land thinks about the bigger picture. It wants its properties to fit in seamlessly with people's daily lives. And it's this long-term vision behind the company's projects that makes British Land so successful.

British Land's core strategy has three prongs:

• Grow ownership in its London campuses (made up of offices, shops, and restaurants)

• Grow its residential portfolio

• Shrink its single-use retail portfolio

Currently, traditional retail accounts for 45% of the company's portfolio. The goal is to shrink it down to 30%-35% over the next five years.

Its London campuses and plans for residential growth are where the magic is. And they're where you see this company's long-term community development vision come into practice.

Let's start with British Land's London campuses. The company operates three of these massive properties: Broadgate, Regent's Place, and Paddington Central.

Together, they cover more than 50 acres of central London. But these are more than just collections of buildings that the company owns.

They're mixed use. They have open spaces. They're easily accessible by mass transit. Take a look...

This is the Broadgate campus. British Land operates it as a 50-50 joint venture with Singapore's sovereign wealth fund, GIC. And it's the largest pedestrian-oriented neighborhood in Central London.

The campus, including verticals, covers a staggering 4.1 million square feet. It's massive.

Its occupancy rate is a cool 97%. Its lease length averages 5.5 years. And it pulls in $173 million in rent each year.

Hopefully you can see that this is something special. It's more than just an office park. It's a place where people want to be... in one of the busiest cities in the world.

This isn't just a one-off success, either. The high standard of British Land's London campuses is a central part of its strategy. Here's how the company explains it:

Our campuses are a unique competitive advantage for us; here we control not just the buildings but the spaces between them, allowing us to deliver environments that reflect the evolving needs of modern, London lifestyles. Today's businesses are focused on operating in buildings and locations which enable them to attract and retain the best talent.

Today, real estate is more than just owning a cold, dark building and slapping your name on it. The new model is building spaces where people actually want to spend their lives. And British Land gets that.

Its London campuses reflect this mindset. And even beyond the company's amazing discount, it's why I believe that British Land will experience long-term, continued success.

Now, let's take a quick look at its flagship project in development...

It's called Canada Water. The plan is for this site to be a new urban hub in London... complete with offices, retail, leisure and public spaces, and thousands of new homes.

Before we get to all that, though, just look at the map of the Canada Water "master plan." The boundaries for the project are in red...

You can see the scope of it all. It took British Land roughly five years to set up this massive area. And now, the 53-acre site is one of London's largest mixed-use projects for improving urban areas.

It's right in the heart of London. Specifically, it's about 35 minutes east of Big Ben, across the river Thames. The current annual rent for this area is $10 million.

Obviously, the value here is the future development. And having seen how Broadgate's development turned out, you know that British Land knows how to build big.

The first phases of the Canada Water project will be in blue shaded plots. By the end, the master plan will include...

• Roughly 3,000 homes

• Up to 320,000 square meters of office and workspace

• Up to 100,000 square meters of retail, leisure, and entertainment space

• 12 acres of open spaces

• 1,255 new trees

This project highlights the change that's underway in British Land's portfolio. The company wants more large, mixed-use development projects.

Right now, residential property makes up the smallest section of British Land's portfolio. But the upcoming Canada Water project will begin to change that... With the addition of those 3,000 homes, it's going to become a significant part of British Land's plans to grow its residential portfolio.

In short, British Land is building out massive communities where people want to live and work. And its latest is designed to be one of London's most modern mixed-use centers.

This is a recipe for long-term success. And it's just one more reason we want to own shares of this company today...

The Time to Act Is Now

This kind of opportunity doesn't come around often.

We have a high-quality company. It's executing a new and exciting strategy. And we have not one... not two... but three different ways to profit.

And we're not talking small profits, either. Our upside potential includes...

• 15%-20% on currency appreciation

• 15% in dividends over the next three years

• 35% if the company simply moves back to net asset value

These dividends come from rent. They're as good as guaranteed. We'll be getting 5% a year for every year we hold the company. No question about it.

And as I've explained today, the British pound is cheap and hated. It's nearly as hated as ever, based on the COT report... And it's as cheap as ever based on the Big Mac Index. We can reasonably expect a 15%-plus gain as those situations turn around.

Lastly, we're buying this company well below its true value. The current NAV of the business is $11.31 per share. But it currently trades for $8.15 a share. If shares simply move back to NAV, it would be a huge 35% gain.

When you add it all up, we have a real shot at 50%-plus profits over the next few years.

Remember, this is a relatively boring real estate company. It's not a hot tech business. But by putting our money to work at the perfect time, we have huge upside potential.

Buy shares of British Land (OTC: BTLCY) today. Plan to hold for two to three years as the NAV discount closes and the pound recovers. To protect your downside, hold the position with a 25% trailing stop.

Good investing,

Steve Sjuggerud

Editor's note: We're including a special offer as part of our 2019 Digest holiday series... Interested readers can get a significant discount off the normal cost of some of our most popular research. This week, you can try a 100% risk-free subscription to Steve's flagship True Wealth advisory for 75% off the typical annual cost. Click here to get started now.