Are you feeling wealthier today?... Climbing a wall of worry... What happens when interest rates rise... A new high for Berkshire Hathaway... The downtrend in 3-D printing is here... Another crazy IPO... These gold stocks are outperforming by a wide margin...
Have you benefited from the five-year bull market in stocks? Most people say they haven't...
According to a Bloomberg poll taken last week, 77% of respondents said the bull market in stocks since March 2009 – which has sent the S&P 500 up 176% – has had a minimal effect on their wealth. Only 21% say the market's gains have made them feel more financially secure.
Overall, respondents to the survey are bearish. They feel the rally in stocks has passed them by. And only 30% of those polled expect the economy to improve over the next 12 months.
As financial publishers, this is bad news. But it's good news for investors like you.
Bull markets climb a "Wall of Worry." And people are worried. Consider this: According to the Federal Reserve, the poorest 75% of Americans generate only 0.5% of their income through capital gains, interest, and dividends. Meanwhile, the wealthiest 10% of Americans generate 11% of their income that way.
The masses aren't flooding into stocks yet. Despite the market hitting new highs, there's still a lot of fear out there. And remember... the current bull market is being artificially propped up by the government's loose monetary policy. Of course, it can go even higher from here, even if interest rates rise...
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The market was down slightly today. But Warren Buffett's holding company, Berkshire Hathaway, hit an all-time high.
Berkshire's share structure is unusual. The "A" shares trade for more than $187,500. The "B" shares – which represent 1/1,500 of a single "A" share – trade for around $125.
Buffett prefers to measure Berkshire's value with book value. In the most recent Extreme Value weekly update, Dan Ferris gave his calculation for Berkshire's intrinsic value...
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Of course, Dan's calculation doesn't represent his official buy-up-to price. Only Extreme Value subscribers have access to that information. And for Porter's breakdown of Buffett's latest letter to shareholders, be sure to read the March 7 Digest.
And while Dan's subscribers are enjoying their profits, we're wary when it comes to 3-D-printing stocks.
We first told you about the booming market in 3-D-printing companies back in January. In particular, we singled out 3D Systems (DDD)...
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The cover of the most recent issue of Barron's exclaimed, "Beware 3-D Printing!"
The gist of the article is as follows: These stocks have risen by as much as 370% over the past two years and are trading for astronomical valuations (in DDD's case, 84 times earnings).
Publicly traded 3-D-printing companies primarily make toys and other trinkets, which offer limited use. The large potential is through industrial use, which firms like GE already use to make parts for their jet engines.
Printing these objects at home takes a long time and is cumbersome. Some objects take a full day to dry and require braces during printing.
We also updated you on DDD in the February 5 Digest after shares had fallen nearly 30% from our first mention. Shares briefly recovered but are now down 35% since our initial bearish warning. It looks like the downtrend in DDD is here...
Here's another sign of the top...
King Digital Entertainment – the firm that makes the wildly popular Candy Crush Saga video game – is going public this month.
The company expects to price its initial public offering (IPO) of 22.2 million shares between $21 and $24 per share, valuing the firm at around $7.6 billion.
That price would value King around four times sales. Candy Crush is free to play, but users can buy in-game upgrades with real money. Last year, Candy Crush generated 78% of King's revenue... helping grow the company's revenues 11-fold to $1.9 billion.
Fellow mobile-game maker Zynga – the creator of the Farmville and Words with Friends franchises – is the closest comparison we can make to King's impending IPO.
Zynga went public in 2011 at six times sales. Its shares haven't performed well since...
We'll end today's Digest on a bright note... Gold hit a six-month high today. The precious metal rose more than 1.3% to nearly $1,370 an ounce on concerns about the situation in Ukraine and a slowdown in China.
Gold is up nearly 12% this year. But gold stocks, as measured by the Market Vectors Gold Miners Fund (GDX), are up nearly twice that. And there's one area of the gold market that's putting GDX's returns to shame...
Our friend John Doody, editor of the excellent Gold Stock Analyst, is one of the best analysts we know when it comes to gold stocks. He used to be an economics professor at a university. But then he discovered the secret to making a fortune in gold stocks... And he used this proprietary system to amass an eight-figure net worth, not including his Ferrari and yacht.
John uses his proprietary analytical methods to pick his "Top 10" gold stocks in the world. This year, his Top 10 is up more than 44% – almost double what you would have made simply holding shares of GDX.
And don't think John's performance this year is a fluke... His Top 10 regularly outperforms the regular gold-stock indexes. In fact, over the past 13 years, you could have made more than seven times your initial investment buying and holding the Top 10... Compare that with making four times your money owning gold bullion, or 45% in the S&P 500.
We think gold stocks are set to explode higher. If you want extra exposure to gold stocks today, you can't beat John's Top 10. You can learn more about his incredible story and his investing methods by clicking here.
New 52-week highs (as of 3/11/14): Berkshire Hathaway (BRK) and Diebold (DBD).
Has the bull market left you in its wake? Let us know how you've performed since 2009... feedback@stansberryresearch.com.
"I reprint one sentence from Mr. Hunt's article: 'If a government opened a lemonade stand, it would have a dozen employees and go broke in three months.' I laughed out loud. The only reason they would last three months rather than the one to two days that anyone else would last using twelve employees, is their ability to obtain financing from 'other' sources. And we all know who those 'other' sources are! Grab your wallets!" – Paid-up subscriber Jeff
Regards,
Sean Goldsmith
Miami Beach, Florida
March 12, 2014
The top-rated insurance company in the market today...
Regular Digest readers know that Porter believes insurance is the greatest business in the world.
In today's Digest Premium, he and his research team discuss the top insurance company in the market today...
To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.
The top-rated insurance company in the market today...
Editor's note: Today's Digest Premium is excerpted from this week's Stansberry Data weekly update, a supplemental publication to Stansberry's Investment Advisory. In it, Porter and his research team announced big changes to their "Insurance Value Monitor" and share the top name in the sector...
We've added 22 new companies to our screen of the top property and casualty (P&C) insurance companies. Second, we've shifted the proprietary ratings we use to evaluate these companies, placing a greater emphasis on underwriting discipline and float growth.
As you can see, the Bermuda contingent has really shaken things up... with one of the "new guys" ending American Financial Group's (AFG) five-quarter reign at the top spot. Axis Capital (AXS) is a Bermuda-based company specializing in energy, aerospace/aviation, and marine insurance and reinsurance policies.
First of all, Porter challenged the team to update the rankings to include Bermuda-based insurers. Insurers flock to Bermuda, thanks to favorable tax conditions... so adding Bermudian companies has significantly increased the number of companies we rank and track. We think all the extra effort will be worth it... and since most of these Bermuda-based companies trade on U.S. exchanges, it should be very easy for our readers to pick up new shares, should their performance warrant a recommendation.
Remember, most of these companies are incorporated in Bermuda simply for the tax breaks. They trade on major American stock exchanges, follow standard U.S. accounting practices, and have a large percentage (if not overwhelming majority) of their policies written in the U.S. (At least two do business – and are traded – primarily in the U.K.)
Secondly, while we can't disclose our actual formula for ranking companies... for the first time, we have tweaked the way we rank performance. As you know, we rank each company based on its Underwriting Discipline, Shareholder Treatment, Float Growth, Investments & Book Value Growth, and Gains on Investments. We call these our "Buffett metrics" because it mirrors the way legendary investor Warren Buffett evaluates insurance companies (and how he picked the P&C firms that made the foundation of his Berkshire Hathaway holding company).
Each category requires tabulating up to 15 "data points" to come up with a ranking.
AXS vaulted into the top spot based largely on an incredible shareholder yield. In the past two years, AXS has returned around $500 million per year to shareholders (one-third in dividends and two-thirds in share buybacks)... which equates to a 10% yield for this $5 billion company. AXS is ranked No. 2 in both the Float Growth and Investments/Book Value growth categories, and has a 10-year average combined ratio of 90. Best of all, AXS currently trades for a huge 71% discount to float + book value. AXS is definitely on our watch list while we continue to study its business.
– Porter Stansberry with Bryan Beach and Brett Aitken
Editor's note: In addition to insurance stocks, Stansberry Data also analyzes and ranks trophy-asset companies, capital-efficient companies, and oil and gas companies.
If you're a Stansberry's Investment Advisory subscriber and don't currently receive Stansberry Data, be on the lookout for an e-mail from us explaining how you can start to receive it.
The top-rated insurance company in the market today...
Regular Digest readers know that Porter believes insurance is the greatest business in the world.
In today's Digest Premium, he and his research team discuss the top insurance company in the market today...
To continue reading, scroll down or click here.
Stansberry & Associates Top 10 Open Recommendations
(Top 10 highest-returning open positions across all S&A portfolios)
As of 03/11/2014
| Stock | Symbol | Buy Date | Return | Publication | Editor |
| Prestige Brands | PBH | 05/13/09 | 366.3% | Extreme Value | Ferris |
| Constellation Brands | STZ | 06/02/11 | 288.6% | Extreme Value | Ferris |
| Enterprise | EPD | 10/15/08 | 266.2% | The 12% Letter | Dyson |
| Ultra Health Care | RXL | 03/17/11 | 250.7% | True Wealth | Sjuggerud |
| Ultra Nasdaq Biotech | BIB | 12/05/12 | 229.0% | True Wealth Sys | Sjuggerud |
| Fluidigm | FLDM | 08/04/11 | 224.0% | Phase 1 | Curzio |
| Ultra Health Care | RXL | 01/04/12 | 206.4% | True Wealth Sys | Sjuggerud |
| Hershey | HSY | 12/06/07 | 182.0% | SIA | Stansberry |
| McDonald's | MCD | 11/28/06 | 179.1% | The 12% Letter | Dyson |
| Altria | MO | 11/19/08 | 172.6% | The 12% Letter | Dyson |
Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any S&A publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals |
| 2 | Extreme Value | Ferris |
| 3 | The 12% Letter | Dyson |
| 1 | True Wealth | Sjuggerud |
| 2 | True Wealth Sys | Sjuggerud |
| 1 | Phase 1 | Curzio |
| 1 | SIA | Stansberry |
Stansberry & Associates Hall of Fame
(Top 10 all-time, highest-returning closed positions across all S&A portfolios)
| Investment | Sym | Holding Period | Gain | Publication | Editor |
| Seabridge Gold | SA | 4 years, 73 days | 995% | Sjug Conf. | Sjuggerud |
| Rite Aid 8.5% bond | 4 years, 356 days | 773% | True Income | Williams | |
| ATAC Resources | ATC | 313 days | 597% | Phase 1 | Badiali |
| JDS Uniphase | JDSU | 1 year, 266 days | 592% | SIA | Stansberry |
| Silver Wheaton | SLW | 1 year, 185 days | 345% | Resource Rpt | Badiali |
| Jinshan Gold Mines | JIN | 290 days | 339% | Resource Rpt | Badiali |
| Medis Tech | MDTL | 4 years, 110 days | 333% | Diligence | Ferris |
| ID Biomedical | IDBE | 5 years, 38 days | 331% | Diligence | Lashmet |
| Northern Dynasty | NAK | 1 year, 343 days | 322% | Resource Rpt | Badiali |
| Texas Instr. | TXN | 270 days | 301% | SIA | Stansberry |