Investors move back into one bond sector... Junior miners are staging a rally... Private-equity execs make $2.5 billion... $1 trillion in cash for private equity...
One of our favorite income-producing assets is coming back into favor.
Dr. David "Doc" Eifrig has long espoused the benefits of buying municipal bonds – debt issued by state and local governments to build things like roads and playgrounds.
The sector experienced massive outflows, which left many muni-bond funds trading for large discounts to the total value of their assets. Many "munis" sported thick, double-digit yields. And Doc thought fears surrounding the sector were overblown. From the December issue of Income Intelligence...
First, investors are leaving munis because they fear that state and local governments are in trouble. But they aren't. While Detroit (in bankruptcy) and Puerto Rico (close to it) scare investors, the truth is that in general, states and cities are financially improving.
Across the country, tax receipts are growing while spending remains flat. Over the last year, state and local government combined revenues grew 3.5%, while expenditures only rose 1.3%. And 14 states outpaced their projected revenues.
Of course, state and local governments still have room for improvement... but we're moving farther away from default risks, not closer.
The second reason for muni-bond outflows is a fear of rising interest rates. Remember... if interest rates rise, fixed-income investments like bonds generally fall.
We think munis can handle a rise in interest rates just fine, especially if you have a portfolio (or closed-end fund) with a diversified mix of maturities.
In 2013, investors pulled a record $64 billion out of municipal bonds. But so far this year, they have reversed the trend...
Since January 2, investors have poured $925 million into muni-bond funds, according to research firm Lipper. We've seen inflows for six of the past seven weeks (reversing a record 33 consecutive weeks of outflows). The previous outflow record was 30 consecutive weeks in 2000... Munis went on to return 20% that year.
This year, munis are beating most other types of debt. One of Doc's favorite muni bonds – the Invesco Value Municipal Income Trust (IIM) – is up nearly 8%, compared with the S&P 500's 1.5% return in 2014.
In Income Intelligence, Doc covers a large universe of income-producing assets, including real estate investment trusts (REITs), stocks, corporate bonds, munis, master limited partnerships (MLPs), and more...
He developed a series of proprietary indicators for each asset class... These indicators tell Doc when it's time to purchase an asset.
For example, in the February issue, Doc still rates munis a "buy," but said that he thinks dividend-paying stocks offer a better deal today.
The stock he recommended – a company in the oil and gas industry – yields a thick 5.9% today. It also trades at a discount to its enterprise value (market cap plus debt minus cash), which means you could theoretically buy the whole company and sell off its assets for a huge 36% gain.
To access Doc's latest pick, and start producing regular income from a diversified portfolio, click here to learn about a 100% risk-free trial subscription to Income Intelligence.
Another sector staging a big rally this year: junior mining stocks.
In today's Growth Stock Wire, S&A Resource Report editor Matt Badiali discussed the boom currently underway in junior miners.
Regular Digest readers know gold stocks got hammered last year. The Market Vectors Gold Miners Fund (GDX) fell 54% in 2013. And the Market Vectors Junior Gold Miners Fund (GDXJ), which holds a basket of small-cap miners, fell nearly 61%.
Since bottoming in December, junior miners have rallied... Several have already doubled and tripled from their lows. As Matt wrote...
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Elsewhere in the market... We've written several times about private equity's outperformance in recent years. These firms are earning record profits... And their CEOs are taking home record paychecks.
In fact, the Wall Street Journal reported nine founders of the four large publicly traded U.S. private-equity firms took home more than $2.5 billion among them last year. Apollo Management founder Leon Black took top honors with a $546 million paycheck.
But the good times may not be over for private equity...
Private equity's capital available for investment (its "dry powder") rose 12% last year to a record $1 trillion, according to consulting firm Bain. However, high asset prices sent the number of buyouts down 11%.
After all, most private-equity firms have to spend this money... They have a set number of years they can sit idly before deploying that capital. Private-equity shops aim for an entire life cycle (raising capital, investing, and monetizing) of about 10 years.
And while private equity may be slowing down their deals today, we have a feeling they'll be back to it in no time.
New 52-week highs (as of 3/4/14): Becton-Dickinson (BDX), Brazil Resources (BRI.V), Blackstone Group (BX), Chicago Bridge & Iron (CBI), Cameco (CCJ), CF Industries (CF), Carrizo Oil & Gas (CRZO), Diebold (DBD), Dolby Laboratories (DLB), Denison Mines (DNN), Enterprise Products Partners (EPD), Energy Transfer Equity (ETE), Fission Uranium (FCU.V), Fidelity Select Medical Equipment & Systems Fund (FSMEX), Cambria Foreign Shareholder Yield Fund (FYLD), GigaMedia (GIGM), Corning (GLW), Eli Lilly (LLY), Lorillard (LO), PowerShares S&P 500 BuyWrite Fund (PBP), PowerShares Buyback Achievers Fund (PKW), Penn Virginia (PVA), ProShares Ultra Technology Fund (ROM), ProShares Ultra Health Care Fund (RXL), Super Energy Services (SPN), ProShares Ultra S&P 500 Fund (SSO), Constellation Brands (STZ), Skyworks Solutions (SWKS), Cambria Shareholder Yield Fund (SYLD), Targa Resources (TRGP), Union Pacific (UNP), United Technologies (UTX), and Walgreens (WAG).
One subscriber understands capital efficiency... Have you bought capital-efficient stocks? How have you done? Let us know at feedback@stansberryresearch.com.
"Why is everyone so happy about the potential LO merger/buyout with Reynolds? It will really suck. According to Porter's research, LO is a capital efficient business and should give us consistent, long term, above average returns. Yes, I'm up about 12% on it. But I don't want a short term gain. I want to hold it until I'm old and count on the 10% or 15% average annual returns for life. I'm gonna be screwed if this deal goes through. Sigh. But I'm not gonna unsubscribe. Guess I'll roll my profits into an Alliance Membership or a Two Suns charter." – Paid-up subscriber Matt Vestrand
Regards,
Sean Goldsmith
Miami Beach, Florida
March 5, 2014
Two of Doc Eifrig's top ways to improve your health in 2014...
Since 1997, Dr. David "Doc" Eifrig has created a list of easy ways to improve your health going into the New Year.
Every year, Doc reviews the most updated research, tests out new tips, finds people with real-world experience, and shares it with his Retirement Millionaire subscribers. Today, we share two of his favorite ways to improve your health...
To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.
Two of Doc Eifrig's top ways to improve your health in 2014...
Over the holidays, we shared three of Doc's top tips for living a happier and healthier life in 2014 in the Digest – movement, sleep, and meditation. You can read more here. Today, we're going to share two more of his top ways to improve your health...
A newcomer to Doc's list: eating green vegetables. It may sound like a no-brainer, but most Americans simply don't get enough vegetables in their diet. The Centers for Disease Control suggest folks eat three servings of greens per day. Dark leafy vegetables like spinach and kale contain high levels of Omega-3 fatty acids, vitamins C and B-12, folate, and iron. Green veggies also contain high levels of fiber, which help keep your bowel movements regular.
The Institute of Food Research, a leading food-research firm, has found that eating up to 400 grams (or two cups) of broccoli per day makes you less likely to develop prostate cancer. And a 2011 study published in the British Medical Journal found that just 10 grams of fiber per day lowered your risk of colorectal cancer by 10%.
That's why Doc tries to eat about three servings of greens a day, usually a salad during the day or as a side with dinner.
Another one of Doc's top health tips is to get a massage. Its benefits include reduced stress, fatigue, and anxiety. A 2007 study from the Flagstaff Medical Center in Arizona found that just 15 to 45 minutes of massage also led to reduced levels of pain in patients.
As Doc told his Retirement Millionaire subscribers earlier this year, there are different types of massages, including Swedish (which is great for relaxation and reenergizing yourself) and Thai yoga (where your instructor moves you into different yoga positions to stretch you during your massage).
Doc personally recommends as much as one massage a month, if you can afford it. And if it's too expensive, he suggests trading hand or foot rubs with your partner.
– Sean Goldsmith
Two of Doc Eifrig's top ways to improve your health in 2014...
Since 1997, Dr. David "Doc" Eifrig has created a list of easy ways to improve your health going into the New Year.
Every year, Doc reviews the most updated research, tests out new tips, finds people with real-world experience, and shares it with his Retirement Millionaire subscribers. Today, we share two of his favorite ways to improve your health...
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 03/04/2014
| Stock | Symbol | Buy Date | Return | Publication | Editor |
| Prestige Brands | PBH | 05/13/09 | 377.2% | Extreme Value | Ferris |
| Constellation Brands | STZ | 06/02/11 | 288.5% | Extreme Value | Ferris |
| Enterprise | EPD | 10/15/08 | 267.4% | The 12% Letter | Dyson |
| Ultra Health Care | RXL | 03/17/11 | 259.7% | True Wealth | Sjuggerud |
| Ultra Nasdaq Biotech | BIB | 12/05/12 | 256.2% | True Wealth Sys | Sjuggerud |
| Fluidigm | FLDM | 08/04/11 | 225.6% | Phase 1 | Curzio |
| Ultra Health Care | RXL | 01/04/12 | 214.3% | True Wealth Sys | Sjuggerud |
| Fission Uranium | FCU-V | 04/30/13 | 197.9% | Phase 1 | Curzio |
| Hershey | HSY | 12/06/07 | 186.2% | SIA | Stansberry |
| Altria | MO | 11/19/08 | 174.5% | 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 |
| 2 | The 12% Letter | Dyson |
| 1 | True Wealth | Sjuggerud |
| 2 | True Wealth Sys | Sjuggerud |
| 2 | 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 |