Live From Vegas: A Potential Eight-Bagger Revealed
Highlights from the first day of the Stansberry Conference... A potential eight-bagger in the making... Sjug discusses one of his favorite gold stocks... Catch up on what you missed...
'It's my favorite event of the year'...
That's how our colleague Steve Sjuggerud described the Stansberry Conference in a recent edition of our free DailyWealth e-letter. And for good reason... The annual event – which kicked off this morning at the Aria Resort & Casino in Las Vegas – is one that we at Stansberry Research plan and look forward to all year long.
In past years, the conference has been jam-packed with two days full of actionable investment ideas, fascinating presentations, and world-class entertainment.
And to nobody's surprise, this year is no different...
In the first morning session alone, attendees heard valuable investing insights from a who's who of Wall Street veterans – including Stansberry Asset Management CEO Erez Kalir and Empire Financial Research founder Whitney Tilson and his newest analyst, Enrique Abeyta.
During Whitney's time on stage, he shared a stock idea with multibagger upside potential...
Regular readers of Whitney's daily e-letter, Empire Financial Daily, won't be surprised to hear that he remains super-bullish on mortgage giant Fannie Mae (FNMA).
But before we go any further, a bit of background...
Whitney recommended Fannie to his Empire Investment Report subscribers in early September, just before the Trump administration released a plan that he felt would be a huge tailwind for shareholders. He explained the story in detail in the September 6 edition of Empire Financial Daily...
Eleven years ago today, with mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC) teetering on the edge of bankruptcy amidst the collapse of the housing market, the federal government put them into conservatorship. The government-sponsored entities ("GSEs") that underpin the debt of the U.S. housing market have remained wards of the state ever since.
The GSEs eventually recovered and are now thriving, together earning more than $20 billion in annual profits. The government has been taking all of it since 2012 via a "net worth sweep," a blatantly illegal act still being challenged in court to this day. In total, the government has collected more than $300 billion, far more than the $191 billion it lent to the GSEs – plus it still owns warrants for 79.9% of their shares outstanding.
The Trump administration has made it clear since its first days that it wishes to recapitalize and release the GSEs from conservatorship. To that end, yesterday after the close it released its plan to recapitalize and release from conservatorship the two.
At the time, Whitney noted that he liked the Trump administration's initial plan – though he admitted it lacked specificity and said that "the devil will be in the details." He continued...
Not only does the government own 79.9% of the equity, but it also wants the GSEs to be able to raise a lot of capital so that taxpayers will never have to bail them out again. Both factors give the government a strong incentive to act in a way that leads to a higher share price.
I continue to believe that the securities of the two GSEs represent incredibly intriguing mispriced options...
On stage this morning in Vegas, Whitney explained the bullish case in more detail.
He likened the situation to the single best investment of his career, when he bought more than 1 million shares of General Growth Properties before the mall operator filed for bankruptcy in early 2009. That position returned more than 17 times his money in less than a year.
As of Friday's close, Empire Investment Report subscribers are already up 11% on Fannie in a little more than a month. But according to Whitney, the gains are just getting started... As Whitney told the crowd at our Stansberry Conference in Vegas, he believes Fannie could still be an eight-bagger from today's levels.
Of course, we'll also hear from many of Stansberry's top analysts during the event...
This morning, True Wealth editor Steve Sjuggerud took the stage.
Longtime Digest readers know that Sjug's recommendation of small-cap gold stock Seabridge Gold (SA) has sat atop the Stansberry Research Hall of Fame for the past decade. Readers who followed his advice back in July 2005 ended up booking 995% gains a little more than four years later.
The man behind Seabridge – Albert Friedberg – is a brilliant investor with a long track record of huge returns in gold stocks. And now, Steve believes he has found Friedberg's next big opportunity... You see, Friedberg owns a big stake in the tiny gold company Steve shared with the audience today.
In fact, Steve is so excited about the opportunity that he flew out to Nevada early to see the company's mine for himself. After being blown away with what he saw, Steve was excited to share the details with conference attendees...
This stock is a leveraged bet on rising gold prices. As Steve explained today, every $50 move in the price of gold will add more than $30 million to this company's net present value.
But unlike the rest of the sector, this company hasn't yet participated in the recent rally in precious metals. Better still, according to Steve, the stock currently trades for less than what Friedberg bought his stake for... giving investors a fantastic, lower-risk entry point today.
The action continued throughout the rest of the day...
Immediately after lunch, conference attendees heard from renowned comedian Dennis Miller. And this evening, they'll see presentations from Gold Stock Analyst editor John Doody, cryptocurrency expert Eric Wade, and Extreme Value editor Dan Ferris, to name a few.
You can look forward to learning about some of the highlights from the afternoon session in tomorrow's Digest.
And the second day of the conference promises to be just as full of valuable ideas...
Tomorrow, the lineup of speakers will include Professor Joel Litman, whose "Uniform Accounting" methodology helps reveal the "hidden" earnings of almost any publicly traded U.S. stock... famed short-seller Marc Cohodes, who Bloomberg once called "the scourge of Wall Street"... and Real Vision founder Grant Williams, who has quickly gained a reputation for being one of the smartest and funniest minds in finance.
And we'd be remiss not to mention the presentation we imagine Porter is most looking forward to... when Grant's Interest Rate Observer editor Jim Grant speaks to the crowd to kick off the afternoon session. (Regular Digest readers know Porter regards Jim as a personal mentor and one of the world's most eloquent financial writers.)
If you aren't here in Vegas with us, you're still in luck...
We've arranged a way for you to be "in the room" without ever having to leave your home or office.
For a limited time, you can still sign up to watch the livestream of the two-day event – which will give you access to all of the fantastic speeches and actionable investment ideas.
Even better, you'll be able to watch these videos as often as you'd like for the next month... And you'll pay a small fraction of what folks paid to join us in person. Plus, we're even throwing in a $399 gift just for signing up. Get the details here before it's too late.
New 52-week highs (as of 10/4/19): Celgene (CELG), Digital Realty Trust (DLR), New Oriental Education & Technology (EDU), iShares U.S. Home Construction Fund (ITB), Flutter Entertainment (PDYPY), PepsiCo (PEP), and Aqua America (WTR).
The feedback continues to roll in for Dan Ferris' recent Digests. (If you missed his latest essays, be sure to catch up here and here.) Meanwhile, are you enjoying the conference – either with us in Vegas or from the comfort of your own home? Let us know what you thought about Day 1 at feedback@stansberryresearch.com.
"Dan, you had me literally laughing out loud as I read your piece on WeWork [last week]. Thanks for brightening my day." – Paid-up subscriber Catherane K.
"That WeWork write-up is hilarious. Thanks. Looking forward to the WeBroke version, and wonder what the net present valuation and provisioning impacts will be, if they are not already occurring, on the landlords and property management firms you alluded to that made long-term leases with a unicorn...
"Negative interest rate bonds – If the bond issuer defaults, the accrued and unpaid interest will have a minus sign in front of it. The longer the collection process goes on, the smaller the claim of a bondholder becomes.
"That's nuts. It is a sign of too much credit chasing too little borrowing capacity with the suppliers of credit being unable or unwilling to reduce the supply flow. But how else could central bankers and their bank clients continue to levitate assets prices and promote jobs that would not otherwise be existing (as unwanted by buyers using actual savings capital) with funny money conjured from thin air?" – Paid-up subscriber Jim B.
"I want to thank Dan Ferris for writing some of the Digests... The bison story was great because I think it's easy for someone who lived through the last big market bust to understand. I also appreciate hearing the polar opposite of Steve's Melt Up thesis. At today's valuation, perhaps the 'Melt Up' has already happened, and mom and pop are not going to get excited this time around. Thanks." – Paid-up subscriber Tony S.
Regards,
Sam Latter
Las Vegas, Nevada
October 7, 2019