A new president... Problems aren't over in Ukraine... European stocks hit a six-year high... The 'Draghi Asset Bubble' rages on... Gold hits 3.5-month low... 'How to avoid becoming a nation of renters'... A big surprise from Porter...
Ukraine elected a new president over the weekend... But the country's troubles are far from over.
We begin today's Digest with an update from S&A Global Contrarian editor Kim Iskyan...
"As expected, Petro Poroshenko won the presidential seat in Ukraine. There was little doubt he was going to win... the only question was whether he'd get an absolute majority of votes to prevent a runoff with the second-place candidate.
"Parts of eastern Ukraine that declared self-rule in a recent referendum were unable to vote, in part due to security. So the president-elect has a mandate, but it's a weaker one than he would have had if parts of the country weren't under the control of rebel forces."
Meanwhile, Kim says, Russia has softened its stance, and seems to be trying to de-escalate tensions over Ukraine...
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Russia's main objective in Ukraine is to prevent it from joining the European Union and NATO. As long as there's conflict in Ukraine – and doubts that the country will remain territorially intact – the country's government will be too distracted to move...
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Today, news broke that Ukraine had killed "dozens" of pro-Russian rebels, according to Interior Minister Arsen Avakov. In total, Ukrainian soldiers killed 40 and injured 31 more.
"The anti-terrorist operation is in an active phase now," First Deputy Prime Minister Vitaliy Yarema told reporters today. "We'll continue this operation until there are no terrorists on Ukraine's territory."
So Putin may be using "de-escalation" rhetoric for now... But after this news, we doubt it will continue.
Despite the conflict between Ukraine and Russia, European stocks have risen for the fifth day in a row, hitting a six-year high. And True Wealth editor Steve Sjuggerud is betting they'll go even higher.
European Central Bank President Mario Draghi is meeting in Portugal today and tomorrow to decide the next steps in European monetary policy.
Draghi has already said he will ease in June... And he continued along those lines today...
"We are aware of the risks of a too-prolonged low-inflation period," Draghi said.
Draghi is particularly concerned about how difficult it is for small- and medium-sized businesses (which are responsible for 80% of European employment) to obtain loans.
In short, more easing is coming. And Steve thinks we're about to see more of the "Draghi Asset Bubble" – the resulting price inflation from further monetary stimulus in Europe – just as we saw with former Fed Chairman Ben Bernanke in the U.S.
From the latest issue of True Wealth...
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As Steve explained – and we've written about extensively over the past few years – Bernanke put unprecedented economic stimulus measures in place in the U.S. He cut interest rates to near-zero percent and bought billions and billions of dollars' worth of government bonds, causing prices of all assets (including stocks) to soar higher. Steve nicknamed this the "Bernanke Asset Bubble"...
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Steve believes we're in the seventh inning of the rally in the U.S. stock market... But he says European markets are in earlier innings.
Steve made his True Wealth subscribers a fortune during the Bernanke Asset Bubble... They're up 84% in homebuilder stocks, 241% in health care stocks, 97% in technology stocks, and 146% in private-equity firm Blackstone Group.
And Steve says we have the same setup in Europe today that we did in the U.S. a few years ago. As he wrote in his most recent issue...
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In addition to being a great investment opportunity, you should consider owning some European stocks as a way to balance your portfolio exposure.
As our friend and investment manager Meb Faber explained in his book Global Value, most people invest far too much money in their home market. This is a theory called the "home-country bias."
According to asset-management giant Vanguard, U.S. investors have about 70% of their stock market funds in U.S. stocks. But as Meb explained, U.S. stocks make up 49% of the global market cap for stocks. And the U.S. is only responsible for 19% of the world's gross domestic product (GDP ). That's why it's important to hold a portfolio more in balance with the U.S. global footprint.
Plus, the U.S. is one of the most expensive stock markets in the world today. You can read more about the idea in the May 15 DailyWealth.
Gold hit a 3.5-month low today, falling nearly 2% to $1,267 an ounce on no news of note.
Last week, Richard Kovacevich, former
Kovacevich first blamed the Dodd-Frank Act – which placed heavy regulations on the financial industry – saying the litigation risk "says we should not make any loan that a borrower can't repay." Kovacevich told CNBC , "I haven't figured out how to do that yet."
He also said the government needs to ease the standards on banks for buying back bad mortgages from Fannie Mae and Freddie Mac. "We have to make those two changes if you want to get this economy going, because of housing," he said.
For now, we're happy America is a nation of renters... As we noted above, Steve's subscribers are up nearly 150% on Blackstone Group, the nation's largest single-family landlord.
And another company in that space, Stansberry's Investment Advisory recommendation American Homes 4 Rent, hit a new high today. Porter's subscribers are up 16% since October.
New 52-week highs (as of 5/23/14): Apple ( In today's mailbag, one subscriber is sorry he's missing out on our event this Saturday in Dallas... Send your notes to feedback@stansberryresearch.com.
"Regarding the Stansberry Society event in Dallas in May, I just wanted you to know I was really looking forward to this event this year. I knew I was not going to be able to join the Stansberry Society this year, but hoped I would be able to attend one in person since I live in Ft. Worth. Unfortunately for me, it turned out Dallas was the 2nd event in the schedule, and I had another commitment for that weekend that could not be rescheduled.
I have a strong interest in these events, and appreciate all you do to let people participate that are not full Society members. With your attention to detail, you probably were curious why a Dallas area resident like myself would not have accepted your offers to attend the Dallas event, so I wanted to assure you I think these events are great, and I very much regret I will be unable to attend. I wish you the best success with the Dallas event. Thanks again for all your services." – Paid-up subscriber Malcom Niven
Goldsmith comment: We appreciate the kind words, Malcom. And we're sorry to hear you can't join us in Dallas for our natural resources event.
You can, however, still catch all the action live. We've arranged to have the entire event streamed live online. And if you sign up to view our Dallas event, we'll also give you online access to our events in Los Angeles and Nashville.
Also, Porter has secretly been planning something outrageous to kick off the Dallas event. Only a few people in our office know what Porter is planning... It's over the top, even for him. I can't share any details. But if you sign up, you'll see it on Saturday morning. You can learn more about our Stansberry Society event in Dallas by clicking here.
Regards,
Sean Goldsmith
May 27, 2014
The hardest time in history to find income...
In today's Digest Premium, Tom Dyson – publisher of our corporate affiliate the Palm Beach Letter – explains a little-known way to find dividend-paying stocks that yield up to 11% a year... And why most of the market doesn't know where to find these payouts.
To subscribe to Digest Premium and access today's analysis, click here.
The hardest time in history to find income...
I (Tom Dyson) believe right now is the most difficult time there has ever been to find income in the markets...
It's partly because a lot of Baby Boomers are retiring and need income. At the same time people need income so badly, there's an income famine going on. And with interest rates for bank accounts and certificates of deposit (CDs) near zero, it makes people even more desperate.
And to find income, lots of people are looking to the stock market. They're taking on more risk to get the money they need to live. Lots of these folks wouldn't even be investors, but they're dumping money into high-yielding stocks and junk bonds... Anything with a high yield today is seeing tons of money flowing into it. That's the state of the markets today.
But I'm not willing to be the greater fool in this dash for income. And I don't want my readers to get stuck playing that game, either.
The challenge today is how to find safe income when we're in an income bubble. It's kind of like "how do you buy cheap tech stocks in 1999?" It's a problem we've been pondering at the Palm Beach Letter. And we believe we've found a solution: Special dividends.
Special dividends are simply nonscheduled, one-time payouts from a company. It can be in addition to (or in lieu of) a regular dividend.
There is a group of companies today that pays special dividends on a regular basis. The payments are basically regular dividends... But they're classified as special dividends.
And that's why this is such an attractive opportunity...
These companies can be hard to identify. Their regularly occurring payouts are classified as special dividends, so they don't show up in all the stock screens and filters you use when you're looking for dividends.
Today, we hold six of these companies in our portfolio... And they're yielding anywhere between 5% and 11% a year. But nobody knows about it. Again, they're secret because the payments are classified as special dividends and not regular dividends. So they aren't calculated by services like Yahoo Finance when the report the company's "dividend yield."
In tomorrow's Digest Premium, I'll discuss why this situation exists... And why companies paying special dividends can actually be safer than those with regularly scheduled payouts.
– Tom Dyson
Editor's note: As Tom noted, he and his team at the Palm Beach Letter have done a lot of research into the opportunity represented by special-dividend-payers. To read more about their work and how to subscribe to their newsletter, click here.
The hardest time in history to find income...
In today's Digest Premium, Tom Dyson – publisher of our corporate affiliate thePalm Beach Letter – explains a little-known way to find dividend-paying stocks that yield up to 11% a year... And why most of the market doesn't know where to find these payouts.
To continue reading, scroll down or click here.