Eric Wade's Must-Read Advice on the Crypto Dip

Meeting Marc Chaikin... Long ago, he was well ahead of his time... Get a free look at what Wall Street uses... Eric Wade's must-read advice on the crypto dip... Volatility is part of 'crossing the chasm'...

'At my age, I'm doing this to help people'...

I (Corey McLaughlin) had the privilege of speaking with Wall Street legend Marc Chaikin for more than an hour the other day... and that was the parting idea he left with me.

Not that he needed to say it so plainly... And before our chat, I already knew he was an accomplished businessman who presumably didn't need to be working anymore.

Back in the 1980s, way before "analytics" was a cool buzzword, Marc created a number of proprietary stock indicators... Before long, Wall Street's biggest firms started using them. And they're still found on the Bloomberg Terminal today.

Maybe the most popular is the industry-standard "Chaikin Money Flow." This indicator can show what the "smart money" – or major institutions – are buying and selling at any given moment... and what it means for the stock price over the next few months.

But plenty of Marc's other inventions are widely used by professional investors as well.

There's a lot more to Marc's story. But for now, we'll just say that he was able to "retire" in 1999 to his summer house in Connecticut... And as he told us last week, in the beginning, he was happy playing tennis, living with his wife, and watching his wealth grow.

But after about a decade, the financial crisis compelled him to reenter the markets in a full-time capacity. I won't spoil the whole story, but it involves a bad money manager mishandling his wife's 401(k) account.

Marc knew there had to be a better way for his wife – and a lot of other folks – to invest...

Not long after, he voluntarily ended his retirement... In 2011, Marc started his own company, Chaikin Analytics – a pioneering Philadelphia-based research firm – and began sharing what he knew from decades on Wall Street to help everyday investors on Main Street.

He's still at it today, which is how we ended up connecting last week.

You see, I'm pleased to report that Chaikin Analytics recently became a new corporate affiliate of Stansberry Research... much like our friend Whitney Tilson's Empire Financial Research. And as Marc told us during our recent conversation...

If we can get the message out, I really think we're going to do a lot of good for Stansberry subscribers.

If that sounds similar to our ethos here at Stansberry Research of sharing the information "we would want if our roles were reversed" – if not exactly in line with it – we agree.

So here's the thing...

In tomorrow's Digest, Marc is going to write to you directly...

He'll give you the entire story of why the financial crisis brought him out of a decadelong retirement... He'll also share more about his work in the Digest through early next week.

And in between this four-part series from Marc, I'll pass along as much as I can from our conversation in this weekend's Masters Series. We'll publish a two-part Q&A session.

Why are we talking about all of this right now?

Chaikin Analytics' relationship as our newest corporate affiliate means two things in the short term...

One, we get to access Marc's wealth of wisdom and will have the ability to share it with you, our subscribers. And two, as we said, Marc will speak in detail in the days ahead about the exciting opportunity that he has put together to help kick off our affiliation.

To get things going, Marc is hosting a special free event on Tuesday, May 25, at 8 p.m. Eastern time. And to everyone who signs up to attend the event, Marc is offering a real value – free access to one of his most valuable indicators, the so-called "Power Gauge."

I can't tell you how exciting of an opportunity this is... I've taken a spin through Marc's products myself and have already found many uses for them in my personal portfolio.

This is the kind of high-level tool that most everyday investors simply can't access. It's a remarkably accurate, sophisticated stock-rating model culled from more than 200 factors and a culmination of Marc's Wall Street experience.

And yet, it's extremely easy to use... We won't get into all the details today. But essentially, you just need to plug in any stock ticker and the Power Gauge system will do the rest.

Long ago, Marc was well ahead of his time...

Not far from the New York City borough of Brooklyn where Marc grew up, he started on Wall Street as a stockbroker in 1966.

While "stock stories" are what attracted Marc to the investment business, he quickly discovered that the numbers are what made good and bad trade results.

And he simply had a knack of what he describes as "pattern recognition." As Marc explained, this was a telling part of the interview process at Wall Street firm Shearson, Hammill – where he was hired 55 years ago...

There were a whole series of tests. One of them, you had to compare two pages in the phone book and they said there was going to be one number different on the right-hand page than the left-hand page.

After the tests were over, the psychologist called and said, "You scored higher on this comparison test than anybody we've ever seen. How did you do it?" I said, "I don't know."

I'm a numbers guy. I can see patterns that nobody else can see in numbers.

Eventually, Marc started collecting data and creating indicators that would be used by major Wall Street investment firms and traders all over the world to create stock grades, among other things.

I can't emphasize enough how valuable Marc's creations are...

This is stuff that firms led by multibillionaires like Paul Tudor Jones, Steve Cohen, and George Soros used themselves. Marc charged his former hedge-fund clients $5,000 per month for access to his research.

In short, Marc was doing Moneyball-type pioneering on Wall Street decades before Michael Lewis' book about the data revolution in baseball came out, and opened people's eyes to what could be done across many industries with numbers-driven methods.

Stay tuned for Marc's essays over the next several days, as well as our Masters Series Q&A this weekend. And in the meantime, be sure to reserve your spot for Marc's free event right here. The action will begin promptly at 8 p.m. Eastern time on Tuesday, May 25.

For any serious investor, it will be well worth the time.

Plus, don't forget, you will get access to his Power Gauge system ahead of the event... That way, you can see exactly how it works as he's talking about it on Tuesday night.

Switching gears a bit, we need to talk about cryptos again...

We promised yesterday that we would talk more about bitcoin's recent sell-off.

Well, it continued today... The price of the world's most popular crypto has dropped another 10% since we published yesterday's Digest... And Ethereum, the No. 2 crypto, is down more than 20% in the same time frame.

What in the world is going on?

Well, first, you know that we warned that the price of bitcoin may have topped in the short term in late April. DailyWealth Trader editors Ben Morris and Drew McConnell nailed that call.

Second, if you've followed along with us for any length of time, you know that we've come to expect volatility spikes in bitcoin – and across the entire cryptocurrency universe, for that matter... for whatever reasons (Elon Musk tweets, China's proposed crypto "ban," etc.).

Such is life with an emerging asset or technology... As it starts to go mainstream, you have to deal with more "mainstream problems." As Crypto Capital editor Eric Wade wrote in a special alert to subscribers today...

We think this is an overreaction. Longtime crypto investors know that China has repeatedly threatened to ban cryptos. But as we've said before, we believe the markets will win out.

If a ban does pass, we'll begin to see something we've long expected: crypto propelling some economies forward and trapping others in the past. No matter what a single country does, innovation is one of those things that's hard to put back in the bottle.

In short, I'm not worried about this morning's sell-off. I've been warning about coming volatility for a while. So I'd recommend using this sell-off as a buying opportunity.

With any investment, times like these can be tough to endure. But smart investors know staying disciplined is critical... as is knowing why you own any asset in the first place... and also allocating your portfolio to align with your risk tolerance.

That's part of the reason we've suggested that folks not put any money into cryptos that you wouldn't be comfortable losing completely. Because even if you tell yourself you're in it for the long term, big short-term sell-offs are bound to happen along the way...

And during these times, it's easy to get caught up in natural emotions and sell at exactly the wrong time. Perhaps you're unsure whether to keep holding an investment for the long term or not. This is one of those trying times, according to Eric.

Eric sent his latest monthly issue to Crypto Capital subscribers yesterday, and in part, it covered the recent sharp sell-off. Eric acknowledged that it's hard not to look at cryptos today and "worry that the market's getting frothy." From the issue...

Recent media coverage of non-fungible tokens (NFTs), Dogecoin's price surge, and Elon Musk's tweets have only added to the overexuberance – and chaos – in the crypto market.

However, we believe this is just cryptos "crossing the chasm" [as Eric shared in the February 14 Digest] from early adopters to the early majority. We got more evidence of this recently...

A survey from the New York Digital Investment Group estimated that 46 million Americans own bitcoin. That's about 17% of the country's total population.

While 53% of respondents said that they don't currently hold digital assets, more than half of these folks said they would consider adding cryptocurrencies to their portfolio in the future. So the percentage of Americans holding bitcoin will only grow from here.

Eric says to keep the long game in mind...

As more buyers enter the bitcoin market, there simply isn't enough supply (remember bitcoin's fixed supply and predetermined "mining" rate) to meet demand. So as new investors flood into cryptos, prices will eventually move higher.

Still, this is a good reminder that cryptos are extremely volatile...

As Eric shared with subscribers yesterday, the Crypto Volatility Index ("CVI") is the crypto market's analog to the CBOE Volatility Index ("VIX") – which regular Digest readers know we consider the stock market's "fear gauge."

Eric has actually showed his subscribers in recent months how to use the CVI to invest in volatility or to hedge existing positions against volatility, much like stock traders can do with the VIX.

(And again, in yesterday's issue, Eric showed subscribers how to set themselves up to "profit from crypto risks" with a handful of smaller cryptos that most folks have never heard of. Crypto Capital subscribers should check out their latest issue for more on that idea.)

But here in the Digest, we simply want to share what the CVI looks like today...

As you can see, the CVI has surged over the past month alongside the broader sell-off in cryptos... It recently hit its highest level since January. But it's still well below those levels right now, as well as the volatility around bitcoin's price drop in March 2020, too.

In short, Eric says it's natural to get caught up in a sell-off frenzy... much like it is to get caught up in the euphoria on the way up. He's still optimistic about the crypto market... but he says that folks should expect more volatility to come.

At the same time, there are opportunities to be had – if you know where to look...

In the midst of this broader crypto sell-off, one of Eric's recommendations has seen massive gains... It has risen roughly 65% in the past seven days, even with a 25% sell-off today.

Stephen Woolridge II, who recently joined our Crypto Capital team as an analyst, told us yesterday that this crypto is a "Layer 2" solution... It's creating long-term scalability, cheap fees, and instant transfers for the Ethereum network.

This is something that has become a more recognizable need as of late... with "gas" fees – essentially transaction fees on the bitcoin and Ethereum blockchains – rising dramatically as more people have started buying cryptos. As Stephen said...

Layer 2 solutions are like a sticky note on top of a crowded notepad. They make mainnet blockchains like Ethereum and bitcoin easier to navigate, while making fees cheaper and faster.

In fairness to Eric's paid subscribers, we can't name this crypto here. But the broader point is that this behavior illustrates another example of how his extensive research pays off... as the crypto world "crosses the chasm" into popular life.

Today, this position is up more than 1,000% overall since Eric recommended it back in February. In yesterday's Crypto Capital issue, he recommended subscribers take partial profits, but still hold the majority of their stake.

Again, existing subscribers can check out Eric's latest issue right here. And if you don't already subscribe but are eager to learn more about cryptos, click here to get started with a Crypto Capital subscription today.

You won't find a better place to learn everything you need to know about the crypto world.

New 52-week highs (as of 5/18/21): AbbVie (ABBV), CVS Health (CVS), Hershey (HSY), Annaly Capital (NLY), VanEck Vectors Russia Fund (RSX), and TFI International (TFII).

In today's mailbag, more thoughts on the cannabis industry, which our colleague Thomas Carroll wrote about in Monday's Digest. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"'Cannabis is not a drug. It's a plant.' How does that square with the opium poppy? Both are plants, and man extracts and manipulates the chemicals in both of them to produce drugs. Medical cannabis started as a rouse to legalize pot. Now they have found extracted chemicals/drugs can be beneficial. Still the end game is not to sooth sore muscles but to have a recreational pot. But this is also based on a lie. Legalized pot will never fully replace illegal pot. Why do you think tons of it crosses the border? At a licensed pot store, you can 'buy' in the parking lot for less money.

"This opinion has nothing to do with ethics. This is the realty of cannabis from a former every day for 30 years user. People who use will do so at anytime and anywhere. Not unlike other drugs. The ethical question is can we tolerate an intoxicated society?" – Paid-up subscriber Tim B.

All the best,

Corey McLaughlin
Baltimore, Maryland
May 19, 2021