It's Time for Our Annual Report Card

The wild ride in 2020... How have your investments fared?... It's time for our annual Report Card... We're doing things a bit different this year... How our editors minimized – and even capitalized on – the volatility... The first set of grades...

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What a heck of a ride...

Since I (Brett Aitken) last published the annual review of our newsletters' performance...

The market plunged into the fastest bear market in history, with the benchmark S&P 500 Index collapsing 34% in about 30 days. It then took a rocket ride straight up... not only surpassing its old highs by September, but also finishing 2020 up 68% from the depths of March's bear market. After all the ups and downs combined, the market returned roughly 18% for the year.

Meanwhile, the COVID-19 pandemic has taken the lives of nearly 500,000 Americans and completely upended the economy...

The U.S. lost millions of jobs last year. At one point, the official unemployment rate soared to almost 15%. The U.S. economy – as measured by gross domestic product – contracted more than 30% in the second quarter. It then rebounded by a similar margin in the third quarter, reaching almost 2019 levels by the end of 2020. The unemployment rate has also dropped back to less than 7%.

We've witnessed some industries decimated by pandemic-driven shutdowns... and others completely reinvented by the need to work remotely. We've seen biotechnology companies developing multiple COVID-19 vaccines in roughly a year – a near-miraculous time frame.

Don't forget... We also just lived through the most contentious presidential election that most of us can remember – and its turbulent aftershocks.

And if that weren't enough, just last week, an army of day traders – communicating through a message board on Reddit – pooled their resources to manipulate the prices of a bunch of garbage stocks and blow up the multibillion-dollar portfolios of several hedge funds.

So... through all of that... how have all of your investments fared?

It's a very timely tradition...

Subscribers who have been with us for a while know that at the beginning of each year, we take some time to analyze the performance of our editors and their respective services...

Since 2006, we've shared our investment results across each publication. And as part of that analysis, we give each publication a grade ranging from "A++" through "F."

Many of our counterparts inside the financial-publishing industry (and others outside of it, for that matter) think that kind of transparency is a mistake. Some of these folks believe we're outright mad for opening our books like this. Almost everyone asks why on Earth we do it... Why put ourselves in a position to reveal our shortcomings for all to see?

So let me explain...

First, we have no interest in selling any product that produces lousy results. We only succeed if you, our subscribers, are happy with our work... and renew your subscription for another year or become a lifetime subscriber.

You have a right to know how all of our ideas have fared... If we can't be honest with you about something as fundamental as our performance, why should you trust your hard-earned dollars to our recommendations?

Second, offering total transparency of our results gives us an advantage... It allows us to attract the best analysts who are serious about research and analysis, achieving real investment results – and publishing those results.

On our editorial team, we have former hedge-fund managers, Wall Street traders, doctors, scientists, an editor with a Ph.D., certified public accountants, chartered market technicians, a lawyer, chartered financial analysts, an actuary, and an econometrician, among others.

These talented individuals are extremely competitive. And as I've said many times before... they could work for anyone, anywhere in the world. But they choose to work for us... in part because they want to see how they measure up against the best.

Finally, our annual Report Card keeps us honest in another way. Longtime subscribers know that we don't hesitate to get rid of products when strategies no longer suit certain market conditions... or if they consistently produce poor results and don't live up to our high standards.

Taking a moment each year to reflect on our performance forces us to evaluate what has worked and what hasn't... It forces us to refine our thinking about markets and investing.

That is especially true after 2020...

We've just gone through the most volatile market since the financial crisis in 2008 and 2009. But it has also been just plain... strange.

Stocks have soared as the economy has foundered. Some industries have never been more profitable than they are right now... while others may never recover.

Looking back at our results underscores the value of a few of the key strategies that we've urged our subscribers to follow over the years... We'll come back to these ideas as we detail the individual newsletters and trading services – both today and next week.

But for now, keep in mind how our editors have used different risk-management strategies to minimize – and even take advantage of – the volatility we experienced last March...

The most dramatic example is our unique approach in Stansberry's Big Trade... This service is designed to offer hedging ideas for a small portion of your overall portfolio.

Over just a few weeks in March and April, Big Trade editor Bill McGilton closed a series of triple-digit winners – including a 228% gain on cruise line Royal Caribbean (RCL), a 152% gain on carmaker Ford Motor (F), and a 140% gain on financial giant Ally Financial (ALLY).

Putting just a small amount of money in those ideas could have saved your portfolio.

Then, as the panic hit extreme levels, Bill pivoted... and sold puts on some of the highest-quality stocks on the planet. At the time, these stocks – like beverage titan Coca-Cola (KO), social media pioneer Facebook (FB), and chocolate maker Hershey (HSY) – were selling at historically low valuations. Bill was selling puts while the market was offering ridiculously high premiums... and the underlying share prices were at historical lows. And he placed bets in the market that stacked the odds of success heavily in the favor of his subscribers.

Within a few months, Bill closed out each of the seven positions he opened under this retooled strategy for a 100% win rate and a nearly 50% average gain. Adapt... and thrive.

Likewise, many of the editors in our traditional publications employed trailing stops that minimized their losses during those nerve-wracking days. Financial discipline is critical for your success as an investor – even more so in a crisis. Cutting losses short allows you to fight another day. It raises cash and allows you to buy back in at lower prices... or when the turbulence has passed.

In our bond-trading service Stansberry's Credit Opportunities, editor Mike DiBiase and Bill, his right-hand man, also took advantage of the volatility by recommending nine safe-to-own bonds that the market had temporarily mispriced. They closed seven of the nine new positions within a little more than three months for an average gain of 16.6% – or 65% annualized.

And finally, we pounded the table to buy the highest-quality stocks... within days of the market bottom in March.

We launched Stansberry's Forever Portfolio at that time. It has grown to about 20 stocks since then. And now, 11 months later, every stock in the portfolio is showing double-digit gains. That's right... a 100% win rate. And four of these stocks are up at least 75% – including Alphabet (GOOGL), which is up 86%.

When you look through our results, you'll see many of the largest returns come from some of the market's biggest names – like software juggernaut Microsoft (MSFT), Warren Buffett's holding company Berkshire Hathaway (BRK-B), Facebook, and Hershey. That's the power of investing in "capital efficient" stocks – companies that consistently grow their revenues without having to continuously reinvest large amounts of capital... and knowing when to buy them.

Identifying great companies is only one part of the investing equation... The price you pay for them determines your results.

One other thing stands out...

Everything we do at Stansberry Research involves realistic expectations and timelines.

Sure, we hit a few double-, triple-, even quadruple-digit winners in any single year. (And I'm thrilled to say that, as you'll see in this year's Report Card, we had several big winners in 2020.) But serious investors know that investing is a marathon – not a sprint...

Anyone scanning the web looking for the next "hot tip" that will make them rich by next Tuesday is setting themselves up for failure. The serious investor knows that's unrealistic.

In reality, we're much better off sticking to a piece of timeless advice from Buffett...

The legendary investor often says his favorite timeline for investing is "forever." And while we may not agree with everything Buffett preaches, when it comes to investing in high-quality, capital-efficient businesses to own for the long haul... our thinking aligns perfectly.

It's gratifying to see the ideas that are core to our recommendations play out exactly as we envisioned... And we hope you've used them to profit in your personal investing.

But we also know that many people struggle with weaving together the various concepts we write about into a unified portfolio... how to manage a finite amount of capital that leverages all of these ideas. So to help those investors who feel this way...

Four years ago, we launched our Stansberry Portfolio Solutions products...

We intended these products to show our subscribers what we believe is the best way to use our work. And as we'll show you in this year's Report Card, our Director of Research Austin Root – who manages these portfolios – has done a masterful job fulfilling that mission...

I want to take a closer look at how the Portfolio Solutions products have synthesized our best ideas... and more importantly, how you can best leverage the volume of material we produce. That's why this year, I've made the decision to shake things up a little bit with our annual review.

We're doing things a little differently in this year's Report Card...

Rather than begin with our traditional monthly stock-picking publications, I want to start this year's review by showing you the best way to use, value, and judge our work. This is the single-best strategy we can provide if you're serious about managing your own portfolio.

Investing is a complex and time-consuming endeavor. It's extremely difficult to do successfully and consistently for long periods. Even most hedge-fund managers struggle.

That's right... Many of the folks who dedicate their entire lives to this profession still fail.

Doing it part time with limited access to research and resources compared to the professional investor – like most retail investors do – only adds to the challenge.

Not to mention, it's emotionally difficult to find long-term success. Human nature is such that most investors will do the worst possible thing at precisely the worst possible time.

Finally, finding great investment ideas is one thing... But two other pieces of the puzzle are much more important to your success – risk management and asset allocation.

We provide deep research and great investment recommendations. And we aim to educate our subscribers with everything we publish... just as we've done for the past 21 years.

In 2006, Porter started reviewing our results and personally writing the annual Report Card. After more than a decade, he passed the baton to me in 2017.

Porter always vowed to give you, our subscribers, the information we would want if our roles were reversed. And since taking over as the publisher, I've aimed to do the same.

As you know, our traditional publications provide a list of recommendations – usually monthly – compiled into what we call a "model portfolio." But it's difficult to compare those model portfolios to an index like the S&P 500, a mutual fund, or a hedge fund.

For starters, we don't manage money or do any trading on your behalf. Also, our traditional publications' model portfolios are never fully invested with a "start date" like a fund... We're adding positions all the time. And we don't weight the individual positions like a fund does.

And because we make so many recommendations across our business every year, we receive tons of comments and questions... Folks want to know which stocks they should buy at any given moment, or whether they should buy more (or less) of one stock over another.

That's where our Portfolio Solutions products come in...

The idea is simple...

We look across all of our publications that correspond to a specific portfolio (more on that below) and select the best recommendations for you to follow all in one place. Our team of analysts has already researched these stocks and recommended them in our various newsletters.

Using a hypothetical portfolio size of $100,000, we show our subscribers exactly how much to allocate to each position – down to the exact number of shares. And we provide a calculator so you can easily adjust the allocations, depending on your portfolio's size.

We launched this service in 2017 with a series of three core portfolios, structured to align with investor strategies of capital appreciation... income generation... and a hedged, "all weather" portfolio. We designed them in a way that would take all our research, find the best recommendations, and make the right allocations. The three core portfolios are...

• Capital – The core tenet of this portfolio is capital appreciation. It's our most aggressive portfolio. To assemble this portfolio, we take ideas from Stansberry's Investment Advisory, True Wealth, Retirement Millionaire, Stansberry Innovations Report, Commodity Supercycles, Extreme Value, Stansberry Gold & Silver Investor, and DailyWealth Trader. This portfolio normally holds about 20 total positions.

• Income – This product includes access to everything you get with The Capital Portfolio, plus Income Intelligence and Stansberry's Credit Opportunities. This portfolio holds a mix of dividend-paying stocks, high-yield bonds, and hybrid stock-bond securities. We aim to provide investors with low-risk ideas that will help them to earn both income and capital gains. It normally holds around 30 positions.

• Total – This portfolio takes everything from The Capital Portfolio and The Income Portfolio, as well as seven of our elite research services to offer investors an all-weather approach. We include a few noncorrelated hedged and short positions to protect on the downside. You can usually find up to 40 positions in this portfolio.

Like other investment funds, our Portfolio Solutions products are fully allocated portfolios. And while we don't actually handle any of your money, they're managed in the same way as a fund. To make sure we put this project in the proper hands, we hired a world-class portfolio manager to run them... Austin Root.

Austin earned an MBA from the Stanford Graduate School of Business before starting his career at investment-banking giant Blackstone (BX). And he has worked with three of the most successful hedge-fund managers of our time – Steve Cohen of SAC Capital Advisors, George Soros of Soros Fund Management, and Julian Robertson of Tiger Management.

In short, Austin invested and managed portfolios for more than 20 years before coming to Stansberry Research. Now, our subscribers are benefiting from his wealth of experience.

I'm thrilled to say that the results of our Portfolio Solutions products have been outstanding...

If you've taken our advice since inception and allocated exactly how we've recommended, you're enjoying incredible gains for all three of our core Portfolio Solutions products.

In the first part of the 2020 Report Card today, we'll cover The Capital Portfolio and the eight traditional publications from which Austin and the rest of the Investment Committee pull their recommendations. Next week, we'll get into The Income Portfolio, The Total Portfolio, and all of their related publications (essentially, everything we don't cover today).

For this year's Report Card, we're using a five-year period for our traditional publications. But because the Portfolio Solutions products are less than five years old, we will use their results since inception in 2017. And as I said, we're thrilled with the results so far...

The Capital Portfolio has produced a 104.5% return since inception... That crushes the S&P 500 Index, which returned 76.1% over the same period.

That is an impressive feat in anyone's language. And it's even more remarkable when you consider the nearly 20% sell-off in late 2018... and the 34% collapse in stocks last March, when the COVID-19 pandemic first reached our shores and sent the U.S. into gridlock.

Yes, I know the market has rebounded strongly from its March lows. But few investors had the required nerve to step in and buy when the market plummeted with such speed and severity.

Austin did, though...

Yes, the panic-fueled sell-off triggered several stop losses in The Capital Portfolio. But more importantly, as Austin was raising cash from the triggered stops, he was also building a "shopping list" of stocks to add to the portfolio as they fell to once-in-a-decade valuations.

For example, Austin added Annaly Capital (NLY) – which we call a "virtual bank" – to The Capital Portfolio in early April as volatility soared and its share price tanked. He got in a little above the low (around $4.25 per share), recommending that subscribers add a 5% position.

The stock paid a hefty double-digit yield at the time... And we certainly love the dividend. But as we go to press with this year's Report Card, it's the capital appreciation that has resulted in subscribers enjoying a more than 110% return in less than a year.

I can't give away any more names here today... It wouldn't be fair to paying subscribers. But in The Capital Portfolio, Austin also took advantage of the strong trend in tech stocks with a gain of more than 430% in an emerging-markets gaming and e-commerce firm... and another return of nearly 260% in the fast-growing Software as a Service (SaaS) sector of the tech industry. And he positioned the portfolio to maximize the opportunities arising from the "Melt Up" thesis that True Wealth editor Steve Sjuggerud has pounded the table about in recent years.

This is the type of benefit you receive by having a professional portfolio manager of Austin's caliber navigating the markets, picking the right stocks, and making the right allocations.

And that's true for almost any time frame...

If you followed Austin's advice in The Capital Portfolio throughout 2020, you would've made roughly 41% last year alone.

That's more than two times better than you would've fared by simply investing in the S&P 500, which was only up about 18% over the same span.

Most people are happy if a single stock that they own goes up by 41% in a single year... let alone the entire portfolio. These are truly impressive results. And as our publisher, I would happily put this performance up against any hedge fund in the world.

So with that said... The Capital Portfolio earns an "A+" for the 2020 Report Card.

I'm excited to share these results with you... But more important, I hope you can see why I believe this is the single best way to use our work. Based on the feedback I've seen from subscribers, our Portfolio Solutions products have changed their whole outlook on investing – and their results – for the better.

If you subscribe to more than one of our traditional publications, the amount of information can be overwhelming. That's why our Portfolio Solutions products are so valuable...

These products help you see all of our ideas with clarity when deciding on which stocks you should buy from each of our publications... and how much of each stock you should buy.

It really is a simple "paint by numbers" system.

With these products, you can manage your entire portfolio in less than an hour per month if you want... Just read Austin's updates and place the relevant orders with your broker.

And of course, if you want to read all the research that corresponds to all the positions, you have access to that, too... You can read as much or as little as you want, whenever you want. It really doesn't get any easier – or cheaper – for this type of top-notch service.

One more thing...

We're giving all Portfolio Solutions subscribers free access to the Stansberry Investor Terminal. Within the Terminal, you can manage your own portfolios... check out charts, fundamentals, news, and market data... and get access to our corresponding research for the stocks in the publications to which you subscribe. You can also set your own alerts and use dozens of other features.

Now, if you're already subscribed to one of our Portfolio Solutions products... that's great. But if not and you'd like to join Austin for 2021, you'll have to act fast...

We're publishing our rebalanced 2021 portfolios this evening. And we're encouraging all subscribers to act before the opening bell on Monday. Austin is gunning to beat the market yet again...

And to help new subscribers get started with Portfolio Solutions, Austin and Stansberry NewsWire editor C. Scott Garliss will host a special "onboarding" call next week... They'll walk everyone who subscribes through how to use our research and answer some of the most frequently asked questions.

It's a fantastic offer... We'll only make it once all year. And it's only good until midnight on Monday, so please don't delay if you're interested. Get all the details right here.

With all that said, it's time to get to the part you've all been waiting for... the grades.

We'll start today with the publications from which we draw our ideas for The Capital Portfolio. And next week, we'll continue the Report Card with the rest of our publications...

True Wealth: B-

In True Wealth, editor Steve Sjuggerud's investment mantra is simple... He looks for ideas that are cheap, hated, and in the start of an uptrend.

And few investors get the big picture right better than Steve...

If you've been with us for a while, you know that he called a top in the 2000 dot-com bubble... called the bottom of the stock market drought in 2002... recommended buying gold in 2001 when nobody else would go near it... and turned bullish in early 2009 when almost everyone else believed the world would continue to implode.

Since the inception of this publication back in 2001, Steve has produced a 55.4% win rate... He has generated average returns of 17.7% and annualized gains of 14.3%. Those returns easily beat the S&P 500 (14.4% and 11.6%, respectively) over the past two decades.

Most hedge-fund managers would kill for those kind of returns.

In 2010, Steve was convinced that then-Federal Reserve Chairman Ben Bernanke would do everything in his power to reignite the economy, including housing and stock prices. He called it the "Bernanke Asset Bubble." And as we saw in the following years... he was right.

Then, in 2015, Steve went on stage at our annual Alliance Conference and said... "Welcome to the 'Melt Up.'" A lot of people thought stocks were already expensive at the time. But Steve argued – correctly, again – that there were several more innings left in this bull run.

Now, I know, I know... The skeptics will say, "What about the crash last year?"

It's true... The crash in early 2020, thanks mostly to the COVID-19 pandemic, sent the S&P 500 plunging by more than 30%. And many of the positions in our editors' portfolios – including Steve's – suffered losses as panic filled the markets.

But here's an interesting tidbit about Steve's stocks in True Wealth...

From the start of February 2020 – just before the crisis – through the end of March, Steve closed 14 positions... And 10 of them were losers. That's a lot of pain in a short period.

Steve's biggest winner in that span was a roughly 40% gain in the ProShares Ultra Technology Fund (ROM), which he had recommended a year earlier. The biggest loser he booked during that period was a 26% loss on Argentine farmland and property firm Cresud (CRESY), which he had recommended in November 2019. And closing so many losing positions certainly put a dent in his win rate.

But the important thing is... The average for all of Steve's closed positions during this stretch was just negative 2.4%. Now, I know, the total drawdown of the portfolio from top to bottom would be more. But closing out 14 positions at just a 2.4% average loss is a great result given the dramatic, 30%-plus sell-off in the broad market.

Nobody can predict something like COVID-19. Nobody. Every investor I know suffered losses – at least temporarily, on paper – as en masse selling hit extremes a year ago.

What matters, though, is knowing how to manage a crisis...

True to form, Steve rode out the storm. He honored his stops by cutting his losers quickly... waited for the uptrend to kick back in... then hopped back in when he knew it was safe.

In June, Steve declared that the Melt Up was back on... And without giving away the farm, I can tell you that by the end of last year, he was sitting on huge double-digit gains in tech stocks, biotech stocks, housing, and Chinese health care, among others. Plus, he recently identified a contrarian play in the energy sector that he believes offers tremendous upside.

If you tuned into our "2021 preview event" last week, you know that Steve said we are now seeing the "animal spirits" he expected as we enter the final innings of the Melt Up.

While he recognizes that we're closer to the end than the beginning of this Melt Up, he also points out that markets can run a lot further and last a lot longer than anyone expects. As a result, there are still plenty more gains ahead... We'll likely see some corrections along the way, but you must participate if you want to experience some truly once-in-a-lifetime gains.

For the five-year period of this year's Report Card, Steve compiled a 53% win rate. And he generated a 12.4% average return – slightly less than the 12.7% for the S&P 500 over the same holding periods.

At a glance, most folks would rate that as a "C" performance. But as always, context matters...

His model portfolio currently includes 17 open positions, with 15 of them showing gains. That's an 88% win rate with his open recommendations... And the two losers are practically flat, trading ever so slightly below his entry price.

And remember, less than a year ago, he closed 14 positions. Five of his open winners were just added in the past six months... yet they're already showing double-digit gains.

That's an important piece of information to understand... I expect we'll see these returns grow significantly from here as the rest of the Melt Up plays out.

As a result, Steve gets a "B-" for True Wealth in this year's Report Card.

As I pointed out at the beginning of this write-up, though...

If you want to understand where to find the best opportunities around the world – and ride the trends for the long term – you won't find a better guide on the planet than Steve.

Retirement Millionaire: A+

The numbers say it all...

For more than a decade, Doc has proven that he's among not only the best stock-pickers in our firm... but among the best all around. Since 2009, when he launched Retirement Millionaire, Doc has consistently shown his subscribers how to earn safe, steady returns without taking huge risks.

With a 63% win rate, an average gain of 39.5%, and an average holding period of around 580 days over the five-year grading period... that's an annualized gain of almost 25%. That is about as stress-free as you'll find anywhere in the investing world – especially given that the period included some of the fastest and sharpest market declines in recent history.

In Retirement Millionaire, Doc has earned an "A-" or better in 10 of the 12 years we've published this newsletter. And this year is no exception...

During the March sell-off, Doc hit his recommended stop losses on just three positions for an average loss of roughly 28%. No one enjoys losses... But to be able to ride one of the most violent storms in stock market history with only three losers and hold his remaining positions is remarkable. It speaks to the high quality of his recommendations and his entry points in each position.

At the end of 2020, Doc held 33 open positions in the portfolio with 29 winners – an 88% win rate. His biggest winner was a whopping 779% gain on software giant Microsoft (MSFT)... which has gone up even more since the end of 2020. (It's at 850% today.) The one active loser was just 3%. And the average gains were an incredible 169%.

That performance earns Doc an "A+" for Retirement Millionaire this year.

Stansberry's Investment Advisory: B+

This is our company's flagship publication... We've been publishing it since 1999. So when we dish out the grades each year, this one normally attracts plenty of attention...

Back when Porter wrote the Report Card, everyone – including subscribers, analysts, and editors – wondered which grade he would give himself. And since I took over, everyone has wondered if I would play favorites because I also worked on this publication in the past.

If you look back at the historical grades, though, you will see that Porter served as his own biggest critic. He gave the Investment Advisory an "F" in 2012 and a "C-" in 2016. And frankly, I don't care much for favoritism either.

But this year, it deserves a good grade...

Over the five-year period for this year's Report Card, the Investment Advisory produced average gains of 17.5% over an average holding period of 335 days. That works out to 19% annualized, which easily beat the market's 16% annualized gain over similar time frames.

If you're passionate about following big macro trends from the top down, then analyzing stocks from the bottom up... the Investment Advisory fits the bill.

In this publication, our team of editors and analysts has covered some of the biggest trends over the past two-plus decades. They've tackled the renaissance and subsequent boom of U.S. oil and gas production... shared the "secret" of property and casualty (P&C) insurance stocks, which we call "the best business in the world"... identified the "Global Elite" and most capital-efficient companies on Earth... tracked the latest breakthroughs in medicine... and spotlighted the latest technology trends, like 5G, artificial intelligence ("AI"), and SaaS.

Plus, as longtime subscribers know, the Investment Advisory is a little different...

In this publication, our analysts also recommend shorting stocks when they identify the right opportunities. Our team looks for companies that are destined to fail because their products are obsolete... they have an impaired balance sheet (i.e., carry too much debt)... or the analysts detect fraudulent behavior. The last characteristic is a little tougher to prove, but the Investment Advisory team regularly finds victims that meet their other criteria. They generally hold one or two short positions at any given time.

While short positions can drag on the portfolio results in a raging bull market, it helps hedge the long side of the portfolio during a market correction or sell-off...

In late 2019, for example, the Investment Advisory team recommended shorting health care stock HCA Healthcare (HCA) when it traded around $124 per share. And when the panic-selling hit in March last year, the stock plummeted to less than $70 per share – a roughly 40% drop. As designed, this short position helped offset some of the pain suffered on the long positions at the time. When the market began its rebound, HCA shares also climbed... triggering the team's trailing stop. In the end, this short position resulted in a 23% gain.

On the long side, subscribers are enjoying some huge gains in names like software giant Microsoft, which is up more than 730% today... And chocolate maker Hershey (HSY) is currently showing more than 325% gains. Both of these positions have been in the model portfolio for many years – Microsoft since 2012 and Hershey since 2007.

The Investment Advisory team is also doing well with more recent additions...

E-signature software company DocuSign (DOCU) – a SaaS stock – is up nearly 260% in about 15 months. Bond-trading platform MarketAxess (MKTX) is up more than 220% since our analysts recommended buying shares in November 2017. And while I can't give away all their secrets today, another SaaS recommendation is up more than 115% since last March.

It's a robust and diversified portfolio. And it's showing great average and annualized returns compared with its benchmark... But I'd like to see a slightly higher win rate before awarding a higher grade. So the Investment Advisory earns a "B+" in this year's Report Card.

Stansberry Innovations Report: A+

Please note that Stansberry Innovations Report hasn't been around for the full five-year grading period... So we're using the publication's results since its inception in April 2018.

Since its launch, this publication has covered every big trend in technology that you can think of... This impressive list of sectors includes gene editing, robotics, AI, cybersecurity, 5G, video gaming, driverless cars, SaaS, military and space technology, cloud computing, digital payments, and blockchain and crypto technologies, among others.

Overall, I'm impressed with this publication's extensive coverage of the technology space.

As I mentioned in last year's Report Card – but worth highlighting again today – the incredible amount of brainpower invested in this publication is a big reason for its success...

Editor John Engel holds a master's degree in science from Johns Hopkins University. And he previously worked in the lab of a large, publicly traded pharmaceutical company. Dave Lashmet, editor of our Stansberry Venture Technology service, has also contributed with his research and recommendations. Regular readers will recognize Dave's name... He has been covering technology and biotech opportunities for the past couple of decades.

And more recently, Crypto Capital editor Eric Wade and analyst Fred Marion have joined the Innovations Report team... Since November 2019, they've spearheaded our coverage of the blockchain and crypto technologies every month in the publication's "Crypto Corner."

As many investors know, tech stocks can offer tremendous upside. But on the flip side, they can also suffer more than most when markets tank... And we certainly saw that last year.

The Innovations Report's model portfolio didn't escape the carnage. But it also didn't suffer as much as you might think...

During the market sell-off last March, John exited 12 positions – either when they hit his recommended stops or because he wanted to move on. Five were winners, including a 47% gain with graphics-card maker Nvidia (NVDA). The other seven lost money, but his disciplined approached worked well... The 12 closed positions averaged a loss of just 6.6%.

And if you've taken John's advice on everything, you've more than made up for that...

The model portfolio currently includes several triple-digit winners – like a 344% gain on a "Big Data" play... a 321% return on a leading company in gene therapy... and a 315% winner in space technology. The portfolio features 25 open stock positions... and just three are showing small, single-digit losses right now. The average gain is an impressive 83%.

John has put together a remarkable 66% win rate since we launched the Innovations Report. His annualized gains equal nearly 39%... Those returns easily beat the S&P 500 (roughly 9% annualized) over similar holding periods.

These are phenomenal results... John earns an "A+" for this year's Report Card.

One final highlight for the Innovations Report...

As I said, the Crypto Corner is relatively new for the publication. It's designed to provide educational insights on blockchain and crypto technologies.

And occasionally, Eric has made recommendations with a few core positions to show subscribers how they can get exposure to the sector in the easiest and safest way... He made the first recommendation in January 2020. A month later, he made his second recommendation... And it's showing a giant 504% gain in roughly one year so far. The average gain across the three Crypto Corner positions is a massive 279%.

That is extraordinary, given that it has all happened in just 12 months. And it shows why we encourage you to consider adding exposure to cryptos if you don't have any already. But remember, with cryptos, it's best to keep your position size small if you're just starting out.

Commodity Supercycles: F

We can't sugarcoat it... The past dozen years have been brutal for commodities investors.

Since July 2008, the benchmark Bloomberg Commodity Index has cratered by more than 65%. And commodities have traded at extreme lows compared to stocks for the past five years. Below is an updated chart that we've shared in the past three Report Cards...

We've seen glimmers of hope in tiny pockets across the commodities space over this period, which has given us hope that the lows were in... only to see the long-term decline continue.

That situation has weighed on Commodity Supercycles, as reflected in the model portfolio's results over the five-year grading period. The publication had an average loss of about 10% on its recommendations in that span (11.6% annualized loss). Meanwhile, the Bloomberg Commodity Index lost just 3.4% over similar periods. And the publication's win rate came in at a dismal 26%.

I won't hide from those results... or make any excuses. Despite the challenges we've faced within the commodities sector, we simply must do better for our subscribers.

The good news is, we've seen some evidence in the past year that the sentiment is starting to change. And we're confident that the cycle is finally turning. Let me explain...

As you know, here at Stansberry Research, we look for contrarian ways to play the markets. And while commodities are more cyclical than other sectors, their prices can't go down forever. After all, we use all sorts of commodities – soft and hard – in our everyday lives. Sooner or later, prices will begin to rise. And that's starting to happen right now...

Over the past couple of years, large banks like Goldman Sachs (GS) and Deutsche Bank (DB) have reduced their commodities trading teams. That's a tell-tale sign in our minds... When these big profit-hunting firms bow out of a space, you know you're near a bottom.

But then, during the panicked sell-off of everything last March, some of the professionals in commodities stepped in. As Steve Sjuggerud noted recently, in 2020, private commodity-trading powerhouse Trafigura recorded its most profitable year in its 27-year history.

The Bloomberg Commodity Index finished slightly down for the year... But importantly, it soared 34% from the March lows through the end of December. Trafigura clearly took advantage of the uptrend. And so did Commodity Supercycles editor Bill Shaw...

In 2020, Bill made 11 recommendations. While he quickly stopped out of a couple of them during the panic in March, five of these positions are currently showing double-digit gains. The best performer is a copper-related recommendation that's up 62% in six months.

And of course, COVID-19 has limited Bill's best asset for his subscribers...

When the world isn't locked down, Bill travels the world looking at mines, attending conferences, and meeting corporate executives. The stories he shares with his subscribers provide some of the best "boots on the ground" research you will find in the industry. And as regular readers know, Bill also pilots our Stansberry Gold & Silver Investor newsletter.

With a multiyear bear market in commodities to deal with and COVID-19 restrictions, Bill has taken one body blow after another during the past three years that he has led this publication. (During the five-year grading period for this year's Report Card, two other editors were in charge of Commodity Supercycles before Bill.) But Bill has identified several pockets over the past 12 months... and those initial results are encouraging.

Plus, we're optimistic that he'll be able to get back on the road again before long.

Still, my optimism for the commodities sector does not change this publication's results over the past five years. For that reason, I've assigned an "F" to Commodity Supercycles.

Please keep in mind, though... I've shared some of these insights with you for context. And I hope you will keep in mind that we see a ton of opportunity in the commodities space.

It has been a battle for every commodity investor over the past decade. But it can be an exciting place to invest... If you can get involved at the beginning of the next major uptrend in this cyclical space – and if you can stomach the ride – the gains can be life-changing.

We plan to participate in the next supercycle... And we believe it's beginning right now.

Extreme Value: C

Right now, Apple's (AAPL) market cap is more than $2 trillion... It's the largest company in the world – at least by that measure.

Remarkably, it doesn't seem that long ago that we were talking about Apple becoming the first company with a trillion-dollar market cap. (It happened in 2018.) Think about that... It took the company 42 years to hit that milestone. But then, it took just two more years for it to cross $2 trillion in August 2020.

Apple's stock currently trades at 8 times sales and 37 times earnings.

These are extraordinary times, for sure. And there's no doubt that growth stocks like Apple have been clear winners in recent years... Growth stocks have outperformed value stocks over the past decade or more – and by a wide margin, too.

Meanwhile, in Extreme Value, editor Dan Ferris looks for a wide margin of safety before recommending stocks. You can think of it like trying to find a dollar bill that you can buy for 80 cents or less. That's challenging to do in an environment in which the largest company on the planet trades at 8 times sales.

Over the five-year reporting period, Dan made 50 recommendations... And 28 of them showed a profit (a 56% win rate). His average return came in at roughly 12%, with an average holding period of 397 days. That works out to an annualized gain of just more than 11%, which is slightly lower than the benchmark.

So Extreme Value earns a "C" for the 2020 Report Card.

Naturally, a raging decadelong bull market makes it tougher to find bargains. But last year's crash in stocks lit up the excitement in Dan...

I know how ironic it must sound that a crash gets us excited. But it's true... As contrarian investors, we see corrections and sell-offs as opportunities.

That's why you must have risk-management tools and proper allocations in place... to ensure that you won't get too hurt in a crash. And then, as you raise cash from any positions that trigger their stops, you can put that money into positions that will profit as the market turns higher.

That's why we always encourage subscribers to build a "watch list"... learn about their favorite companies... and determine how much they're prepared to pay for those stocks. Then, when times like March 2020 roll along... you're ready to strike.

Dan did exactly that as the market went into a tailspin last spring...

In mid-March, Dan placed his entire model portfolio on "hold" as the market plummeted and he assessed the situation. Although he did close a few positions... he didn't sell everything. He put things on hold to assess, recalibrate, and decide on his next course of action.

Then, just a couple of weeks later, Dan issued his first "buy" in the middle of the crisis. Out of respect to Extreme Value subscribers, I don't want to name the stock here... Just know that it's a leading distributor of some of the biggest brands in the world. Dan previously recommended this company years ago, so he knew it well... knew what it was worth... and knew that it was time to buy in early April. He's up nearly 60% on this position already.

He then reinstated the active buys over the rest of his model portfolio. Then, on April 14, Dan mailed out his monthly issue under the headline, "BUY. GREAT. BUSINESSES. NOW." The opening line tells you all you need to know about Dan's excitement at the time...

Yes, this is really Dan Ferris. And yes, I'm that bullish.

It was the most bullish I've seen Dan in years. He had been consistently bearish on the markets since May 2017. Now, after the crash, he was genuinely excited by the buying opportunities... And more important, he was eager to get the word out to his subscribers.

In 2020, Dan made 12 recommendations. At the end of 2020, 10 of them were showing gains. That's an 83% win rate for the recommendations he made last year alone.

His average gain on those positions was 37% – double the benchmark. And his average holding period of just 175 days so far gave him an annualized return of 78% – again thrashing the benchmark's 39% average annualized return over similar holding periods.

I'm thrilled that Dan took the opportunity to fill his portfolio up with some great names when the market sold off last year. And the results are showing... As I write, Dan has 25 open positions in his model portfolio – and 24 are winners. That's an incredible 96% win rate. And the one losing position is basically flat... It's down just 2% right now.

These are fantastic results. I look forward to seeing these gains grow... And I'm confident that they'll boost Dan's overall results for his subscribers in the coming years.

DailyWealth Trader: C

DailyWealth Trader co-editors Ben Morris and Drew McConnell do a fabulous job of providing daily insights for their subscribers...

I've said before that the education alone is worth the subscription fee. And I've recommended this publication to friends if they want to learn more about trading and the markets.

Of course, Ben and Drew also provide actionable trading ideas in this publication... normally one or two trades each week. They recommend positions in stocks and exchange-traded funds, as well as options trades to profit from current trends.

And recently, they've excelled with a trade on bitcoin...

In May and June 2020, Ben and Drew recommended taking a pair of half positions in the world's largest cryptocurrency. For the first recommendation, bitcoin was trading at around $8,900. And then, in June, its price had climbed to about $9,700.

Since then, the price of bitcoin has skyrocketed... It's at roughly $38,300 as we go to press.

So in early January, Ben and Drew recommended selling half of the overall position. They locked in an incredible 249% gain in roughly half of a year with that leg of the trade. Plus, they're still holding on to the rest for any future potential upside in the months to come.

Over the past five years, Ben and Drew have made 384 trades in DailyWealth Trader... and 246 of them were winners. That's a great win rate (64%) – especially for so many trades.

But their annualized gain is just 7%, compared with the benchmark's annualized gain of 12% over similar holding periods. That's a lot of activity for a small return. And for that reason, DailyWealth Trader earns a "C" for this Report Card.

However, here's where context matters again...

In 2020 alone, Ben and Drew crushed their benchmark... They made 79 trades, with 57 of them turning into winners (72% win rate). The average gain was nearly 11% over a holding period of just 67 days... resulting in a 58% annualized gain. That's phenomenal when compared with the roughly 32% annualized return for the benchmark.

If I were just using one-year results for this Report Card, Ben and Drew would earn an "A."

Trading daily is a tough endeavor. Most amateurs think they can make more money if they trade more often. But as investing legend Benjamin Graham once said...

Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.

Ben and Drew do a wonderful job providing our subscribers with interesting ideas every day. But they also know that I personally believe that most people "over trade."

I would prefer to see less activity... only placing trades on their highest-conviction ideas. I am certain that small adjustment would improve their results over the long haul.

In the end, it's clear from their win rate that Ben and Drew know how to find winners. And 2020 was great for improved gains. I hope their good run continues into 2021.

Stansberry Gold & Silver Investor: B

This publication's "Hard Rock Portfolio" is doing exactly what we expected...

When we launched Stansberry Gold & Silver Investor back in 2016, we aimed to build a diversified portfolio that offered exposure to precious metals... with relatively low volatility.

We recommended that subscribers allocate 30% of their precious metals portfolio to large producers... another 20% to what we call "gold in the ground" and intermediate-size producers... and 15% to explorers and developers, which are typically small-cap stocks that are much more volatile in their share prices. And to protect against volatility, we recommended that folks allocate a large portion of the portfolio (35%) to gold bullion.

We've been bullish on the precious metals sector for several years, but we know that stocks in this space are prone to wild swings. So to ride the trend for the long haul, lowering volatility in our designed way allows our subscribers to take a holistic approach to investing in the sector... They can take part in the bull market while sleeping a little easier at night.

And best of all, it's working...

The average annual return of 16.4% and the total cumulative portfolio return of 50.2% are providing subscribers with a low-risk way to enjoy solid, steady profits with plenty of upside potential.

You see, we believe we'll continue to do well by holding gold bullion and the stocks of the large producers. And as gold and silver prices keep rising like we expect, the portfolio will get a little "juice" with larger gains from some of the smaller firms as they either ramp up production... get acquired by the larger firms at a premium... or a combination of both.

As I mentioned earlier in my write-up for Commodity Supercycles, editor Bill Shaw leads this publication. And he travels extensively (in normal times) to visit mines, talk with executives, and attend conferences to gather insights and explore potential opportunities.

Over the years, Bill has clocked thousands of miles around the globe. He has visited places such as Russia, Kazakhstan, Peru, and Chile. And he frequently visits Vancouver, Canada – which many folks refer to as "the mining capital of the world."

The Hard Rock Portfolio is doing well... It's outperforming its benchmark – the VanEck Vectors Gold Miners Fund (GDX) – in terms of both average and annualized average gains. But we would still like to see higher gains before assigning a higher grade...

So Stansberry Gold & Silver Investor earns a "B" for this year's Report Card.

And remember, as our loyal followers know, we believe the next leg of the precious metals bull market is just getting started... and that the upside potential is massive.

So we expect to see higher grades for this publication as gold and silver prices continue to rise in the years ahead. As we mentioned earlier, when a commodity cycle gets going, the gains can be life-changing... That's true for precious metals more than anything else.

New 52-week highs (as of 2/4/21): ARK Fintech Innovation Fund (ARKF), Autohome (ATHM), BlackLine (BL), Siren Nasdaq NexGen Economy Fund (BLCN), Berkshire Hathaway (BRK-B), CBRE Group (CBRE), Colony Capital (CLNY), Cresco Labs (CRLBF), Commvault Systems (CVLT), Eagle Materials (EXP), GrowGeneration (GRWG), Green Thumb Industries (GTBIF), Harvest Health & Recreation (HRVSF), ICICI Bank (IBN), Intuit (INTU), Renaissance IPO Fund (IPO), Jushi (JUSHF), KraneShares CSI China Internet Fund (KWEB), Lennar (LEN), MongoDB (MDB), ETFMG Alternative Harvest Fund (MJ), MSA Safety (MSA), MasTec (MTZ), NVR (NVR), OptimizeRx (OPRX), Oshkosh (OSK), ProShares Ultra Technology Fund (ROM), Sea Limited (SE), Silvergate Capital (SI), First Trust Cloud Computing Fund (SKYY), ProShares Ultra S&P 500 Fund (SSO), TFI International (TFII), United States Commodity Index Fund (USCI), Vanguard S&P 500 Fund (VOO), and Zendesk (ZEN).

That concludes Part I of our annual Report Card. We'll bring you Part II next week... But for now, we would love to hear what you think so far. Do you agree with the grades? Are you pleased with your subscriptions overall? Share your feedback on the Report Card – and the publications to which you subscribe – with us at feedback@stansberryresearch.com.

Until next week,

Brett Aitken Miami, Florida February 5, 2021