Life Is Better When Not Relying on Uncle Sam
'This is how socialism works'... 'This is democracy at work'... We saw it coming... Life is better when not relying on Uncle Sam... Our Magic Stock Monitor... What do you think?...
We struggled with where to begin today's Digest...
But in the end, we landed on a familiar topic...
The federal government's endless attempts to "save" us all from ourselves.
After listening to the House of Representatives debate the idea of the now-passed $1.9 trillion COVID-19 relief/stimulus/whatever-you-want-to-call-it bill for about 30 minutes this afternoon, we were again reminded why so many Americans want change from our government...
One side said the bill is "the right thing to do at the right time." And in general, that side believes more direct payments and more additional unemployment benefits to the American people will boom the economy... and single-handedly lift children from poverty.
And while quoting former British Prime Minister Margaret Thatcher, the other side said, "The problem with socialism is you'll eventually run out of other people's money." That side lamented the excesses in the bill, the tax burden, and the one-party nature of the legislation.
So... which one is it?
In the short term, another round of stimulus is probably a boon for stocks and more fuel for the ongoing "Melt Up" in the months ahead... Yet it's also more kindling for inflation fears... And it's another sign of "kicking the debt can down the road" at grand scale, too.
Nobody today seems to care about the long run... But we'll surely see unintended consequences of the government's actions at some point in the future. Even folks enjoying the government support today will be caught up in these consequences in the years ahead.
A few observations...
We will get into the details of this bill when we're able to read closely through the final text. Because who knows, things like the "Free Tibet" legislation could pop up in this one, too...
(Indeed, if you believe what was said on the House floor today, there will be checks going to people in prison and tens of thousands of dollars to federal and state employees with children who have been working at home.)
But we do have a few things to say for certain today...
First, we've been dealing with COVID-19 for a year. Congress had months to work on this... and yet, nobody who I heard talking on the floor of the House today seemed to think these folks have come close to getting this bill right.
I (Corey McLaughlin) am not saying some people don't need help right now to pay their bills and support their businesses. But I know for a fact that other people who don't really need it will be getting $1,400 handouts from the government.
We've already seen comments on Twitter about what people will be spending their $1,400 on – everything from new clothes to a new bike to a Microsoft Xbox Series X and more. I even saw one person say that the stimulus check was going right back to the government to pay for taxes.
Even some folks in Congress let it slip that they agree on the point of overreaching. Yesterday, Rep. Tom Suozzi, a New York Democrat, said of the bill (coincidentally in a TV debate with Shark Tank judge Kevin O'Leary, who we wrote about in Monday's Digest)...
There's some waste in there, there's no question there's some waste in there.
Second, in their showy arguments today, both Democrat and Republican party leaders threw around wildly different labels for the same bill... from "COVID relief" and "rescue plan" to "payoff bill" and an "expansion of entitlements"... and nothing in between.
"This is democracy at work," one said. "This is how socialism works," said another.
Longtime Stansberry Research subscribers know we saw this day coming...
We've been urging folks to prepare for the fallout. And we do so again today...
Five years ago, we published an entire book, The Battle for America, about the coming progressive wave that we believed would hit the U.S. in earnest starting in 2020.
The book predicted many of the phenomena that have played out today – like the rising populism movement, our burgeoning national debt, calls for relief from debt-burdened millennials, and how many politicians would likely think this was the best way to address it.
COVID-19 only served as the unexpected catalyst for trends that have been years in the making and could fundamentally reshape the way of life in America. From the latest edition of the book, which we updated ahead of November's presidential election...
If [Joe] Biden becomes our next president – under heavy pressure from the left wing of the Democratic party – he will proudly proclaim his "social justice" roots and offer more handouts than every other president, combined. Frankly, this possibility scares us to death... and it should scare you, too.
We live in uncertain times. The global pandemic has turned policymaking on its head. The trillions of dollars in stimulus has created a new, incredibly powerful hidden force in our country that may entrench some in the most progressive ideologs in our politics in the White House.
But as we'll show you in this book, the steps the next administration will likely take in its first 100 days in office will push our nation into financial crisis, creating a nightmare for Baby Boomers and anyone else who has saved money.
If that sounds scary, it is...
But importantly, the book goes on to describe how all investors can weather this fundamental shift in our economy and protect and grow their portfolios.
We can't give away our entire 'survival' blueprint here in the Digest...
But we can tell you that understanding what's really going on in our economy is a place where you must start. The Battle for America lays out all the critical details.
Also, if we're sure of anything today after watching another round of D.C. nonsense, it's that you want to think for yourself. You must take control of your finances right now more than you ever thought necessary before...
Because nobody else is going to do it for you.
Back in April 2020, for example, after the first COVID-19 stimulus package passed and the government was sending checks to dead people, we wrote the following paragraph. And the same thing can be said again today...
Maybe the Fed and U.S. Treasury will team up and send you a $1,200 check... eventually. But isn't life better when you don't have to rely on that?
To do this, we suggest a few critical steps to take...
First, you want to own the stocks of great capital-efficient businesses. These are the kinds of stocks that we always talk about... ones that will make the most of debased dollars. They often sell addictive or essential products or services that will be in demand forever.
It's amazing how often that's the answer to so many different investing dilemmas. And if you read our editors' and analysts' work regularly, as I'm fortunate to do as your Digest editor, you'll quickly start to understand why.
Additionally, as our colleague Dan Ferris likes to say, you want to "truly diversify" your portfolio and protect it from times of crisis or the fallout from previously unthinkable government spending.
This step includes owning things like precious metals or related stocks (learn more about Dan's top pick in this space right here), some bitcoin, and inflation-proof income streams.
And if you're heavy into stocks, you may also want to consider shorting certain companies to hedge your portfolio and make money if the market turns over. But even if you don't want to short stocks, you should at least know which companies to avoid.
For that, I can tell you that a great place to start for any investor – brand-new or with decades of experience – is by reading our flagship Stansberry's Investment Advisory newsletter.
Just yesterday, for instance, Mike DiBiase of our Investment Advisory team sent lifetime subscribers their latest "data update" – including our updated Magic Stock Monitor. Without getting into too many details today, the Magic Stock Monitor features tough criteria designed to identify good stocks to own for the long run, no matter what happens next.
As Mike writes in the introductory paragraphs about the Magic Stock Monitor...
We discovered this concept is possible because of the results of Stansberry's Investment Advisory portfolio holding Hershey.
We recommended Hershey at the height of the stock market in December 2007, right before the worst bear market of our lifetimes. Yet Hershey has gone on to outperform the S&P 500 since then with far less volatility.
We found that combining the very highest-quality businesses with extremely low volatility stocks produces market-beating results with about half the volatility of the stock market as a whole.
The trick, of course, is finding stocks that are able to do this. It's not easy for people to do on their own. Our team of editors and analysts specialize in finding which stocks are worthy of an investment and which ones you don't want to touch at all.
We urge any subscriber to check out what our Investment Advisory team has to say each month. We don't say it enough here in the Digest, but we're reminded of it on days like today. If you don't already subscribe, click here to learn how to get started.
Last but not least, what do you think?
Among other things, we bristled when representatives on the House floor today cited recent public polls supporting each of their cases.
It reminded us, again, that nobody ever asks us – "we the people" – for our opinion in these polls. And we can't imagine that we're the only ones who feel this way. So, we want to know...
What do you think of the "American Rescue Plan"?
Let us know with an e-mail to feedback@stansberryresearch.com. Let it all out... It can be as short or as long as you want to make it. It can be full of cheers or jeers.
We'll share your best responses in the days ahead.
Fiat Currency Is One Big Scam
Our colleague Daniela Cambone speaks with Parallax Digital founder Robert Breedlove about the concept of money. When we finally abandoned the gold standard in 1971, we entered a pure fiat money system. And as Breedlove explains, it's a complete scam...
Click here to watch this video right now. For more free video content, subscribe to our Stansberry Research YouTube channel... and don't forget to follow us on Facebook, Instagram, LinkedIn, and Twitter.
New 52-week highs (as of 3/9/21): Automatic Data Processing (ADP), Liberty Braves Group (BATRA), Brunswick (BC), Berkshire Hathaway (BRK-B), Colony Capital (CLNY), Comcast (CMCSA), Enstar (ESGR), Comfort Systems USA (FIX), LGI Homes (LGIH), Altria (MO), Texas Pacific Land Trust (TPL), U.S. Concrete (USCR), and Visa (V).
In today's mailbag, Crypto Capital editor Eric Wade answers a question stemming from Monday's Digest, which highlighted Shark Tank judge Kevin O'Leary's bitcoin reversal. Do you have a question or comment? Good or bad, praise or rage, send your notes to feedback@stansberryresearch.com.
"Thanks for the Mr. Wonderful interview video. I have a question for Eric Wade regarding what O'Leary said about 'knowing where the bitcoin comes from.' Is it really possible to know that?
"I've bought bitcoin many times and then used that bitcoin to buy other cryptos, and obviously millions have been doing the same. How would one know where each particular bitcoin has been, especially with so much trade being in fractions of one?
"I don't know the ins and outs of bitcoin mining – is each newly mined bitcoin one that has never been traded? With the limited number of bitcoins and miners mining all day, every day, that seems questionable to me." – Paid-up subscriber Gary S.
Eric Wade comment: What a rabbit hole this question leads to... Thoughts like this are part of what excites me the most about cryptocurrencies.
The fact is, it may be possible to track literally every single bitcoin back to its own birth – when it was created with a new block and rewarded to a miner.
But there are also wallets and other services out there trying to "muddy up" that tracking. So it takes a pretty sophisticated system to follow all the bits. And yes, it gets complicated by the fact that you can move just portions of one bitcoin...
Lastly, yes, miners are mining all day for a 6.25 NEW bitcoin block reward paid out every 10 minutes (plus the fees in the block from OLD bitcoin, but that's another long discussion). It works out to be about 900 new bitcoin per day. And then, in about three years, that reward will get cut in half.
All the best,
Corey McLaughlin
Baltimore, Maryland
March 10, 2021