2012 is the year you will "GET PAID," Steve Sjuggerud says in his latest issue of True Wealth Systems. As Steve explains – and you've no doubt experienced – cash is hard to find today. Savings accounts pay nothing. Neither do CDs. And 10-year Treasurys pay less than 2%. Gold, one of our favorite safe-haven assets, has no yield.
It's almost impossible to generate decent income with any degree of safety. The suicidal among us could always throw cash at one-year Greek bonds yielding more than 380%.
Before I divulge where Steve says you'll "get paid" this year, let me tell you a bit about Steve's newest advisory, True Wealth Systems (TWS). TWS finds high-probability/high-profit trades across all sectors of the market, using quantitative models that we've spent hundreds of thousands of dollars developing. The service uses custom-built analysis software, a backtesting program, and a charting program. Simply put… it's an advanced trend-following system that Steve interprets and filters for his readers.
As of last month, Steve's system was showing few buy signals. While he says stocks are cheap, they lacked the uptrend we need before piling in… Well, the uptrend is here. We're seeing multi-month breakouts in the S&P 500, small banks, homebuilders, consumer stocks, health care stocks, and transportation stocks, to name a few. Now is the time to be long.
Or in the words of Mr. Partridge, aka "Old Turkey," (from Edwin Lefevre's classic trading book Reminiscences of a Stock Operator), "You know, it's a bull market!"…
The narrator in Reminiscences of a Stock Operator explains the lesson Partridge taught him through this simple phrase (you can find the full excerpt in this DailyWealth)…
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What old Mr. Partridge said did not mean much to me until I began to think about my own numerous failures to make as much money as I ought to when I was so right on the general market. The more I studied the more I realized how wise that old chap was. He had evidently suffered from the same defect in his young days and knew his own human weaknesses. He would not lay himself open to a temptation that experience had taught him was hard to resist and had always proved expensive to him, as it was to me. |
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I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, "Well, you know this is a bull market!" he really meant to tell them that the big money was not in the individual fluctuations but in the main movements – that is, not in reading the tape but in sizing up the entire market and its trend. |
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Steve's "get paid" sectors include some of the world's safest and highest-yielding dividend-paying stocks. And they're sure to soar if the rally keeps going (Steve believes it will). In fact, one of his favorite "get paid" sectors returned thousands of percent under similar circumstances in the past. To start getting paid, click here...
But a rising market lifts all stocks, even the garbage ones. Just look at the solar sector today – the best-performing sector in the market. Jinkosolar Holding is up 36%, Renesola is up 30%, Suntech Power is up 27%, Trina Solar is up 28%. And industry bellwether First Solar is up nearly 10%.
In a note to investors today, Deutsche Bank analyst Vishal Shah said robust demand in Germany, Italy, and the U.S. could benefit the solar sector. "Our checks indicate that inventory levels across the supply chain are now at record-low levels," Shah wrote, "and we believe record December month shipments (in Germany) is likely to create a sense of rush among installers" in the first half.
Shah also said demand in China and India could top expectations this year... And U.S. solar installers could buy panels from Chinese manufacturers before expected import duties hit.
Europe is too busy spending hundreds of billions of dollars to survive to worry about solar power. And even if demand in Asia increases, it doesn't change the fundamental flaw in the solar business model, which Porter explained in his January 2008 issue of Stansberry's Investment Advisory (when he first shorted First Solar)…
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What will actually happen is what always happens to very expensive stocks. Things go wrong. The price of oil and energy in general falls as the world slips into recession. Suddenly, the idea of paying for solar panels seems dumb, given the low cost of energy and budgetary constraints on governments around the world. The global-warming fad fades. People forget. And First Solar ends up like so many other promising tech startups – busted. Maybe I'm being too pessimistic. Maybe solar power will finally break into the mainstream. Even if that happens, it will be a very competitive business. It won't be easy for First Solar to grow its revenues this fast for long. The realities of manufacturing will manifest themselves. Growth will slow; margins will shrink. I'm happily willing to bet that First Solar won't earn $1 billion in net income in my lifetime. |
It seems the Chinese are worried about inflation… and their voracious gold consumption is proof. Our friends at the financial blog Zero Hedge noted today that mainland China's gold imports from Hong Kong jumped 20% from October and 483% year over year.
According to Hong Kong's Census and Statistics Department, China's gold imports from Hong Kong hit 102.525 tonnes.
"Signs that China is importing a lot of gold are bullish for the market, primarily because this metal can't leave the country – it is not permissible to export gold," UBS said of the statistics. "And there is little doubt that volumes have increased dramatically."
A Reuters article notes that part of this increased demand is due to the Lunar New Year, a heavy gold-buying time for China. But the larger trend comes from China's fear of inflation... a trend we see continuing.
While China is buying gold to protect against inflation, one of the most-respected traders on the street, Vic Sperandeo, is trading it this year. "Trader Vic," as Sperandeo is known, is a legendary Wall Street trader. He's written several excellent books including Trader Vic: Methods of a Wall Street Master and Trader Vic II: Principles of Professional Speculation. He's also been featured in Jack Schwager's excellent book on "supetraders," The New Market Wizards. Vic has indirectly "mentored" several of us at Stansberry Research with the ideas and insights in his books. When it comes to marrying fundamental and technical analysis, few people do it as well as Vic.
In a recent interview with CNBC, Vic said he's long gold for the first seven months of the year and long stocks for the last five months of the year. The trend in gold is higher "without a doubt," he says. The timing for Vic's trade centers around the presidential election. He believes gold is discounted up to the election. But if Obama leaves office – and Vic says the incumbent "can't win" – gold will drop and stocks will soar.
Vic also sees the euro falling to $1.20 in the short run (from $1.27 today). In the long run, he doesn't think the currency will survive.
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New 52-week highs (as of 1/10/12): Nuveen Premier Municipal Opportunity Fund (NIF), Pretium Resources (PVG.TO), Monsanto (MON).
No drunken models in today's mailbag, but still some praise. Send yours here... feedback@stansberryresearch.com.
"Thanks so much Mr. Stansberry for your December Issue. It HIT THE NAIL ON THE HEAD for me as far as articulating information with concrete examples of why we are in this mess. I always knew there were reasons why all the publicly funded monies for taxes failed to produce for the common good in these districts (Philly, Detroit, Houston, etc.) but in many instances had a hard time explaining to people, friends, and family. You explained it in a way that made it easier to understand. Thanks for explaining the big picture – 'The problem is rooted in the corrupt belief that you can live at the expense of your neighbor'...
"I always tried to give the 'big picture' to all my students through the years as an US Air Force Officer and pilot (whether student pilot or Officer Training School student) as this helped them remember what was important. I feel very strongly about these ideas as well and will be forwarding this issue to as many people as I know.
"Again, thanks so much and continued blessings as you speak the truth!" – Paid-up subscriber Ken Pearson
Regards,
Sean Goldsmith
New York, New York
January 11, 2012
GET PAID... Lessons from Old Turkey... China buying gold... Trader Vic speaks... Fannie CEO resigns...