Bull Season
Santa came early... What a rally like this usually means... Dr. David 'Doc' Eifrig's 188-trade winning streak... Join him for the next winners... A global power dust-up... Another in-depth interview with our founder... Dinner in Zimbabwe...
The powerful year-end rally continues...
The major U.S. indexes moved higher again today, as has been the story for the past two months. Following a brief one-hour breather that left stocks in the red yesterday, the benchmark S&P 500 Index closed today up – and just about 1% from a new all-time high.
The Dow Jones Industrial Average is already there... and the tech-heavy Nasdaq Composite Index and small-cap Russell 2000 Index are up about 20% apiece since their lows in late October. They led the way again today.
The prevailing market narratives, bullish momentum, and technical trends in stocks – and bond prices, due to falling yields and growing expectations of lower interest rates in 2024 – remain sturdy.
So, happy holidays... And we haven't even gotten to the "Santa Claus rally" part of the calendar yet. This is the typically lower-volume yet optimistic period after Christmas and the start of the new year.
Whether this tendency stems from the season of joy, vacations by Wall Streeters, or another reason, it's a real phenomenon. Since 1950, the S&P 500 has gone up nearly 80% of the time, and by an average of 1.5%, in the days after Christmas and the first two of the next year.
This type of recent action has historically portended more gains...
As our colleague Brett Eversole wrote in a "Review of Market Extremes" issue of True Wealth Systems yesterday...
After bottoming in late October, stocks have rallied 16.1%. That's the highest seven-week return since coming off the pandemic lows in 2020. Check it out...
Most folks would look at this rally and assume the market has overheated... and that a slowdown will surely come next.
But history disagrees.
To see it, I examined every seven-week rally of 14% or more since 1950. We've only seen 33 other similar setups over that time. And stocks kept soaring in almost every instance. Take a look...
As Brett showed, similar setups led to 7.1% gains in three months, 11% gains in six months, and 19.3% gains over the following year. In each case, that's multiples better than the buy-and-hold return for stocks. As he continued...
What's more, stocks were higher 91% of the time a year after these extremes. And the market was up by 20%-plus 55% of the time.
In other words, don't be stunned if this year's incredible year-end rally continues into early 2024.
Moving on to Doc Eifrig's ever-increasing win streak...
Longtime readers may recall our updates last year on the ever-growing length of Stansberry Research partner Dr. David "Doc" Eifrig's "playoff beard" as he approached a new personal record of 140 consecutive winning trades in his Retirement Trader service.
He set this record last fall.
Here we are a little more than a year later, and I (Corey McLaughlin) am pleased to report the streak is still going... now at 188 consecutive wins. The run stretches back more than three years, which makes for a remarkable feat considering the ups and downs and volatility in the markets.
Doc's strategy in Retirement Trader – an options strategy that he says is his all-time favorite – has been successful through everything...
In the bull market of 2021, it returned an average annualized gain of 19%. In the brutal sell-off of 2022, this strategy returned 20%... and during the roller coaster of 2023, Doc's trades returned nearly 22% average annualized gains. And this is not a new revelation.
This is a strategy Doc learned 30 years ago as a trader at Goldman Sachs...
He has posted a 94% win rate using it for subscribers since 2010 and, as he'll tell you, with less risk than simply owning shares of stocks outright. This is options trading, but done right – in contrast with the folks who simply buy call options on stocks, looking to bank massive gains on the off chance everything goes perfectly.
First off, congrats to Doc and his research team on this win streak. It's truly remarkable.
Second, I can say that if you are interested in learning more about how he has pulled off this feat – and are interested in joining him for the next however many wins, if you don't already receive Retirement Trader – there's not a better time than right now.
Doc doesn't see this streak stopping anytime soon. And, in a short 10-minute video just released, he explains some more detail about his strategy... and how you can get started with it today... with the most generous offer he's made for his service in its 13-year history.
Click here to watch and learn more now. And stay tuned...
You'll be hearing more from Doc here in our Masters Series this weekend and in a few essays next week. He'll explain why "options" doesn't have to be a scary word and how trading them smartly can boost your portfolio returns consistently in any market conditions.
This month in the South China Sea...
Meanwhile, in his latest issue of Stansberry Venture Technology, editor Dave Lashmet began with a report on a recent major dust-up between the Chinese and U.S. militaries in the South China Sea that didn't make nearly enough headlines as it probably should have...
Earlier this month, China accused the USS Gabrielle Giffords of violating China's sovereign territory in the South China Sea. As Dave explained, U.S. officials immediately brushed off the accusation for valid reasons, but the incident should serve as a reminder about the hostilities in the region – and what it could mean for the global economy. As Dave wrote...
Here's why this matters to U.S., Canadian, European, or Japanese investors: World trade is at risk. A real military crisis in the region would jeopardize supplies of one of the most vital components of our modern economy – silicon computer chips.
The threat is real and growing... The good news is Western governments and businesses recognize the danger and are moving fast to reduce our dependence on computer chips coming from the region.
In the issue, Dave went on to highlight a key supplier in the chipmaking industry, detailed why he's recommending buying shares of the business, and also told subscribers why they should sell several other positions.
Existing Venture Technology subscribers can get all the details here.
Lastly today, another fascinating conversation with Porter...
A few weeks ago, serial entrepreneur Tommy Humphreys tweeted at our founder Porter Stansberry. The message led to a phone call... and an invitation... and an interview with Porter at his farm outside Baltimore...
(Note, this is different than the Stansberry Research readers-only interview we talked about the past two days with Porter and Doc. As we warned you, that video went offline this morning.)
In this separate interview, Tommy dove headfirst into the secrets of how Porter turned $36,000 into a multibillion-dollar financial-research empire with a genuine passion for helping individual investors... And Porter talked more about the trends he believes are worth focusing on right now...
It's a fascinating interview filled with discussion on a variety of topics, not only on our business's origin story but also things like the surprising answer to where Porter may have gotten his skepticism of government and authority... and other finance subjects.
Here's just one unexpected nugget touching on 'how things really work'...
At one point in the 90-minute discussion, Tommy told Porter a story of how he ended up visiting the former head of Zimbabwe's central bank – Gideon Gono, who was presiding over hyperinflation.
Over chicken wings and scotch at Gono's estate, Gono insisted that Tommy and another guest – financial-newsletter veteran Doug Casey – sit down with him to watch Porter's famous "End of America" documentary. Porter had heard the story, and here was his take...
I think that Gono was very well aware of the problems that inflation was causing in his society. According to Doug, he was dumbfounded that America would run [its] economy in essentially the same fashion.
What my documentary was about is that there are these very large social costs... negative externalities to the destruction of the monetary system. The most basic reason is in a free-market economy with sound money, wages naturally keep pace with productivity. And that has never occurred to a socialist or a union guy, but if you study economics, that link between productivity and wages is probably the first law of economics.
You can check out Tommy's whole interview with Porter – for free – on our YouTube page.
New 52-week highs (as of 12/20/23): Phillips 66 (PSX), Ryder System (R), Vanguard Short-Term Corporate Bond Fund (VCSH), and Vanguard Short-Term Inflation-Protected Securities Fund (VTIP).
A housekeeping note before we get to today's mail... Our offices will be closed tomorrow and Monday for the Christmas holiday... You will receive our Masters Series essays this weekend, then we'll pick things back up here on Tuesday with a guest essay from Stansberry Research partner Dr. David "Doc" Eifrig.
In today's mailbag, feedback on yesterday's Digest, which included a take on why real estate inflation might be "sticky"... Plus we have more banter about the origins of a famous quote and a thank-you note for Doc and his research team at Retirement Trader... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"The inflation in real estate is tied to owner's equivalent rent and is a lagging indicator. Many think rent growth has actually turned flat and/or negative.
"Now that being said from my view in the industry, inventory is very tight and sub-6% rates would send home prices climbing quickly again." – Subscriber Robert C.
"Ben Franklin said that line ['Neither a borrower nor a lender be'] several times over the course of his time... He may not have been the originator but he obviously put some heart into it as he repeated it several times and was quoted by media at the time who put it out there..." – Subscriber John M.
"Whoaaa! You mean to tell me that the quote 'Neither a lender nor a borrower be...' didn't come from a Gilligan's Island episode?" – Subscriber D.J.H.
Corey McLaughlin comment: Well, yes it did – "do not forget, stay out of debt" – but we have Shakespeare to thank for that appearance, too. Glad we got this all settled.
"A big thank you to Doc and Jeff at Retirement Trader for spending part of their weekend making sure I received access to a recently published special report that I couldn't download on my device. Customer service the way it should be!" – Subscriber Dennis B.
All the best,
Corey McLaughlin
Baltimore, Maryland
December 21, 2023