America: The Biggest Loser...

The Rolls Royce of the gun market...

Fine art, coins, watches, and wine are some of the wealthy's favorite ways to diversify outside the U.S. dollar.

But collectible guns are another great way to protect your cash. In today's Digest Premium, collectibles expert Van Simmons offers some of his favorite high-end guns...

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America: The Biggest Loser... Wynn Resorts is skyrocketing... Gold hits a high on Chinese demand... More troubles for Bitcoin... Activision shares soar... Icahn gives up on Apple...

 When people are worried about inflation and lose faith in fiat currency, they gamble more. After all, why would you just let your cash sit and erode its value?

We gave an example of this last month, citing the growing gambling numbers in Macau – the Chinese gambling hub.

Gambling revenue in Macau hit a record $45 billion in 2013 – up 19% from the year before. As we wrote in the January 2 Digest...

The semiautonomous region of China overtook Las Vegas as the world's largest gambling center in 2002... And analysts expect Vegas' 2013 revenues will only be one-seventh of those in Macau. Some analysts say Macau's gambling revenue could top $100 billion in the next five years.

 For some added value on Macau, you can read the November 25 DailyWealth, which True Wealth Systems analyst Brett Eversole filed from the ground there.

 We call gambling "entertainment for the statistically illiterate"... And it appears that America is the most statistically illiterate of them all...

Gamblers worldwide lost a record $440 billion in 2013. Australians lost the most money per person. But Americans lost a combined $119 billion gambling last year – more than any other nation – and more money than China ($76 billion) and Japan ($31 billion), the second- and third-place finishers, lost combined. (You can see the full list here.)

 Of course, the more money Americans lose, the better it is for casino operators.

Shares of casino giant Wynn Resorts (WYNN) hit a 52-week high today. Wynn operates in both the U.S. and Macau. As you can see from the chart below, the gaming sector has skyrocketed in the past year:

 Gold hit a two-week high today – up nearly 1% to around $1,275 an ounce – on big demand from China.

The Market Vectors Gold Miners Fund (GDX), which holds a basket of major gold producers, is up nearly 3.5%. The Market Vectors Junior Gold Miners Fund (GDXJ), which holds a basket of small-cap gold producers, is up nearly 5%.

 Demand from China jumped 41% to a record 1,176.4 metric tons last year, the China Gold Association announced today.

 Bitcoin – another way to diversify out of the U.S. dollar – had a rough day...

The virtual currency had a "flash crash" today... A block of 6,000 Bitcoins sent the price to from more than $600 all the way down to $102 – an 80%-plus drop in seconds before quickly recovering to $645 an ounce.

 Leading up to the flash crash, Bitcoin was crushed last week after MtGox, the largest Bitcoin exchange in the world, halted withdrawals.

And authorities in Russia, the second-largest Bitcoin market, are cracking down on digital currencies...

Russian authorities are working to prevent "illegal acts in the sphere of money circulation in Russia and prevent the violation of property rights of citizens and legal persons associated with the use of 'cryptocurrencies,'" according to a statement from the general prosecutor's office.

It added: "Anonymous payment systems and cryptocurrencies that have gained considerable circulation, including the most famous of them, Bitcoin, are money substitutes and cannot be used by individuals and legal persons."

 Good news for Stansberry's Investment Advisory subscribers: portfolio holding Activision Blizzard soared 15% on Friday after reporting solid earnings, hitting its highest share price since the 1980s.

The video-game company announced adjusted revenue of $2.3 billion in the fourth quarter, down from $2.6 billion a year ago... Still, revenue beat expectations of $2.2 billion. And earnings were $0.79 a share, beating analyst estimates of $0.73 per share.

Activision's Call of Duty and World of Warcraft franchises paved the way... The newest Call of Duty game, released in November, was the top-selling video game in the fourth quarter.

Porter's subscribers are up 55% since October 2011.

 In the January 28 Digest, we told you the 8% selloff in Apple shares following disappointing earnings was overdone...

Billionaire activist investor Carl Icahn was buying more shares... And we thought you should do the same.

 In the January 29 Digest, we shared some of Dan Ferris' thoughts on Apple, which he holds in his Extreme Value portfolio...

 We said the stock may have been bottoming out at $500 a share. As of midday trading today, Apple is up 2% to around $530 a share.

Today, Icahn announced he was ending his push to get Apple to repurchase $50 billion in stock. He lauded the company for the recent announcement that it purchased $14 billion of stock in the past two weeks following its earnings announcement.

Icahn, who owns around $4 billion of Apple stock, said via social-networking site Twitter that Apple should trade around $1,245 per share. He applied Google's 19 times forward earnings multiple to Apple to get the price... He added "Ridiculous. Keep buying Tim [Cook, the company's CEO]! You still have $145 billion cash."

 New 52-week highs (as of 2/7/14): Activision Blizzard (ATVI), Penn Virginia (PVA), Targa Resources (TRGP), and Union Pacific (UNP).

 Always nice to have some kudos in the mailbag. Send your notes to feedback@stansberryresearch.com.

 "Bryan... good job [on your piece "How to Safely Double Your Returns Without Any Extra Effort"]. One of the greatest things about Stansberry is that the public is told like it is. Instead of making the markets just another gambling casino a great effort is made for people to understand that they can strike it rich by having some patience. I realize that it isn't exactly human nature. But as a subscriber for a few years now I appreciate hearing over and over that patience always pays off in the end." – Paid-up subscriber Jeff Spranger

 "Porter – I just listened back to back your Dec. and Jan. Black Label [radio] shows, and had to write in. I spent 18 years climbing the ladder at a global consumer goods company (brand management), and then started my own business. I know a thing or two about businesses and valuations. But I don't know everything, so I write to tell you how much I value Stansberry's Investment Advisory and the Black Label Radio Show.

"It starts with your overall business strategy, which is sound (and succinct – a rarity!). But a good strategy falls apart in the hands of the unwise, those who look for quick paydays and forgo strategic discipline. So far, you have been wonderfully consistent which makes reading/listening/following you worth my time. It helps, I suppose, that many times I recognize my own thinking (example – I often think about empty malls, and the forces of capital efficiency). But I'm not an analyst, and Finance isn't my industry, so your service helps overcome the inertia often related to being exposed to too much information. I have made some really good decisions (Chicago Bridge and Iron), and learned a lot (shouldn't have ignored the WTW stop, ugh).

"I have upgraded my subscription twice – first to Flex and now to Full Alliance. At some point in time my gut could be good enough to go it alone – but I doubt it. So don't quit (even if you are joking – it's not funny). And know for every complaining bozo out there you have at least one grateful student." – Paid-up subscriber Cathy Heiser

Regards,

Sean Goldsmith 
Miami Beach, Florida 
February 10, 2014

The Rolls Royce of the gun market...

Editor's note: High-end collectibles are a popular way for the wealthy to diversify out of the dollar... Fine art, coins, watches, and wine are some of the more common collectibles. But collectible guns are also a favorite of the wealthy. As regular Digest readers know, rare collectibles are a great place to park cash. Their prices remain relatively stable, as they are always in demand among the super-wealthy.

In today's Digest Premium, rare-coin and collectibles expert Van Simmons shares some of his favorite high-end guns...

 I (Van Simmons) think the "Rolls Royce" of the gun market is probably an old, engraved golden-laid Winchester or Colt.

You can find guns that were made for a special occasion in the mid- to late-1800s in brand-new condition. And you rarely see them. For one, very few were made. Most of them end up in museums.

 I also like guns that people used to fight for our freedom. There's strong demand for high-end shotguns, but it's from a different group.

People who collect shotguns usually don't collect Winchesters, Colts, or military guns, and vice versa. At the Vegas show, there was a room for antique guns and high-grade shotguns... It's almost like two different shows.

 Some of the most sought-after shotguns are British. You can buy antique guns from Holland & Holland and Purdey for less than a new one would cost you today. For example, I saw a Purdey 12-gauge shotgun with field chokes instead of skeet or trap. [Editor's note: A choke is a device that alters the pattern and range of the shotgun shot. A field choke is used in the field for longer ranges, as opposed to a skeet choke, which is meant for close-range target shooting.]

Field chokes are about the most desirable because they're the rarest. And this gun was engraved by Ken Hunt – probably one of the finest engravers Purdey ever had. I saw this gun up for auction a few years ago and a dealer bought it for $98,000. I saw the same gun at the show last month for $150,000 and the guy wouldn't budge on the price. But if you want to replace that gun, it would cost you more than $200,000 today.

 Carl Press was one of the 10 richest guys on Earth. He was a big shipping magnate out of Germany. He was a big Holland & Holland collector. He was in a Holland & Holland store and a salesperson was trying to talk him into buying a couple shotguns.

But Carl had to leave. He said, "No, I can't do it right now. Besides, my wife would kill me." The salesperson looked at him and said, "Well, Mr. Press, it would be easier to replace a wife than it would be to replace one of these shotguns."

– Van Simmons

Editor's note: You can read more from Van's trip to the Las Vegas Gun Show here and here.

The Rolls Royce of the gun market...

Fine art, coins, watches, and wine are some of the wealthy's favorite ways to diversify outside the U.S. dollar.

But collectible guns are another great way to protect your cash. In today's Digest Premium, collectibles expert Van Simmons offers some of his favorite high-end guns...

To continue reading, scroll down or click here.

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