'Melt Up' or Meltdown… What Happens Next?
Last call for tonight's big event… 'Melt Up' or meltdown… What happens next?... Sjug is no 'one-trick pony'… This classic 'bad to less bad' trade is soaring…
'Melt Up' or meltdown... What happens next?
That's the question Steve Sjuggerud intends to answer tonight...
Of course, regular Digest readers know Steve believes this historic bull market is nearing its end. But he's also convinced we'll see an explosive final rally – what he's calling the "Melt Up" – that pushes some stocks to unbelievable new highs.
And tonight, he says he's going to prove it to you, live on the air.
He's also going to share the details on his brand-new "Melt Up Millionaire" project. Steve says folks who follow this strategy could double their money or better in the next 12 months... And he's so sure of it, he's offering a unique guarantee unlike any we've ever offered before.
Even if you're not interested in speculating on the Melt Up, we urge you to attend. You're sure to learn a few things. No one has "called" this bull market better than Steve, so his market forecast alone is likely to save you a lot of stress – and money – as the bull market winds down.
Click here to reserve your spot now.
We've spent a lot of time discussing Steve's big stock market calls of late...
And for good reason... He's been on an absolute tear.
Across his three publications – True Wealth, True Wealth Systems, and True Wealth China Opportunities – readers are currently up double digits or better on most of his broad-market recommendations in the U.S., Europe, China, and Japan, among others.
But make no mistake... he has continued to find big contrarian opportunities for his subscribers across the investment world.
For example, in early 2016, Steve alerted subscribers to a huge opportunity in an area of the market most investors had left for dead: the resource sector. At the time, most commodities were in a brutal bear market. Prices had plunged for nearly five straight years, and most resource stocks had lost 75% of their value or more.
But where many others saw only risk, Steve saw a huge opportunity. As he wrote in the March 2016 issue of True Wealth...
A major sector in the world has fallen more than 75% in less than five years.
This is the biggest, most beaten-down sector on Earth today. And it's one we've discussed before in True Wealth.
I'm talking about the global mining sector... specifically, the major base-metals miners such as Freeport-McMoRan and BHP Billiton.
You know the story... Commodity prices have fallen dramatically, and so have profits for these businesses. Now they're scrambling... selling assets at the bottom of the market. Take a look:
As Steve explained, the long bear market had pushed prices back to 2003 levels... And it was setting up one of Steve's classic "bad to less bad" opportunities. More from the issue...
The biggest gains in investing are made when things go from "bad" to "less bad." It can happen very quickly. Importantly, things don't have to get "great" or even "good." They just have to get a bit better... or "less bad."
The upside here is extraordinary... History tells us everything we need to know...
Mining stocks (as measured by the DataStream Global Mining Index) soared roughly 800% from late 2001 to 2008.
We saw massive gains after the financial crisis in 2008 as well. Commodities boomed, and these companies soared nearly 300% from their 2008 bottom to their 2011 peak.
The great news here is that we could be on the verge of a new uptrend. Hard-hit Freeport-McMoRan is already up 60% since its bottom – last month! BHP and Rio Tinto are also bouncing off their January bottoms. Take a look...
Of course, Steve prefers to wait for a confirmed uptrend before opening a bad-to-less-bad trade...
And while a few stocks mining stocks were moving higher, he wanted to see a broad move higher before calling a bottom.
He didn't have to wait long... The next month, the uptrend was confirmed, and he told readers it was time to buy. As he wrote in the April 2016 issue of True Wealth...
The chart below shows the iShares MSCI Global Metals & Mining Producers Fund (PICK). As you can see, we now have a legitimate uptrend. Take a look...
The entire ETF is up 42% since its January bottom. Again, this does not mean we've missed the uptrend. The price is still down – a lot. This strong start is a good sign... It could be the start of the next major "up cycle" in global mining companies.
Steve's timing was nearly perfect...
Commodities prices have been moving higher ever since. And as the Wall Street Journal reported on Tuesday, the global mining business is suddenly booming again...
The world's biggest miners are on a tear. Fueled by a sharp rise in commodities prices, companies like BHP Billiton, Glencore, and Rio Tinto are flush with cash again, boosting dividends, cutting debt and shelling out cash for expansion projects. Just a couple of years ago, they were scrambling to survive in the midst of a historic downturn...
An important sign of these companies' renewed health is their falling debt load. As of June, BHP, Rio Tinto, Anglo and Glencore collectively held net debt of about $44 billion, down about 50% from the end of 2014, according to a review of their earnings reports.
It's a dramatic shift from two years ago, when the mining industry was reeling. Slowing Chinese growth had sent commodity prices sharply lower. Miners loaded up with debt and cut dividends as their share prices sank.
But a surprise rally in the past year in major commodities such as copper, iron ore and coal has been a windfall, bringing in much needed cash, breathing new life into the beleaguered industry and sparking a rally in mining stocks.
Folks who took Steve's advice are up more than 60% so far. But he believes further gains are likely... He still rates PICK a "buy" in the True Wealth portfolio today.
New 52-week highs (as of 8/22/17): Alibaba (BABA), iShares MSCI BRIC Fund (BKF), Berkshire Hathaway (BRK-B), First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS), iPath Bloomberg Copper Subindex Total Return Fund (JJC), KraneShares E Fund China Commercial Paper (KCNY), McDonald's (MCD), iShares MSCI China Index Fund (MCHI), and short position in Brinker International (EAT).
In today's mailbag, more great feedback – and one angry rant – on Porter's must-read Friday Digest. As always, send your comments, questions, and complaints to feedback@stansberryresearch.com. And if you'll be joining us for Steve's live "Melt Up Millionaire" briefing tonight at 8 p.m. Eastern, be sure to let us know what you think.
"Porter, thanks for keeping my conservative side alive and well. I'm all in with Steve but need your constant 'caution' and realistic longer view to keep my expectations and investments in check. Keep it up!" – Paid-up subscriber Mary G.
"Like many people, I say they are both correct, it's a matter of timing. I have been a subscriber to both for 4 years or so, and it's clear to me that Porter Stansberry is a visionary (and a great salesman, but that's not pertinent to this discussion). Like most visionaries, he can see the future state so clearly that he overestimates how quickly it will arrive. He may also underestimate the ability of powerful people with a vested interest in the status quo to perpetuate it longer than seems possible.
"Sjuggerud, on the other hand, is a numbers guy who sees the present clearly, and he knows economics/currencies well. He seems to form his thesis, confirm it with quantitative analysis and check it against history, then form his recommendations on a medium-term risk/reward basis. He also seems to be very mercenary in his investing approach (e.g. he doesn't care where the opportunities are, he will exploit them) while Porter seems emotionally invested in his thesis (e.g. angry about the SOBs screwing up our economy, but willing to make money off the inevitable decline).
"In summary, when investing for myself near term, I will follow Steve, investing for my children I will follow Porter. Love your newsletters, happy to be a subscriber." – Paid-up subscriber Steve Cosgrove
"You guys are great! I read about 7-8 advisories but you guys are head and shoulders above all others.
"I think the way you have this controversy over what the market will do is brilliant because that is exactly the way it is. It allows a thinking investor to position himself accordingly to his view on the probability of various outcomes. That's all one is really doing anyway. He makes his best decision and gets his results.
"I have to add that Eifrig and the rest of your team is great too. I love the idea of being told what we customers would want to hear and I'll be there as long as you retain that attitude. I subscribe to Eifrig, Porter, and Steve. It seems your efforts are a perfect example of what capitalism should be, guys working hard to provide the top service. Thanks." – Paid-up subscriber Al McInally
"Porter: Your Digest on Friday was an interesting read and question... who to follow you or Sjug? As an Alliance member for approximately the last one and a half years I have been following many of your different analysts and have positions based on their recommendations. I have also allocated capital to The Total Portfolio. So in effect I am following both you and Sjug. The question is, when Sjug says get out of the market, should his recommendation be used on all of your analysts' recommendations or just his? FYI my returns on The Total Portfolio are approx 11% to date, I have overweighted some of the short positions!" – Paid-up Stansberry Alliance member Steve A.
"Fellas, hard to decide who's advice to follow. So I follow both. And I also follow Meb Faber's advice. So my portfolio is spread into three batches – Porter and Sjug recommendations and Meb ETF's, with a 20% portion in cash.
"This portfolio has been steadily growing as a whole and fairly low overall volatility. Kind of boring, actually. It's been lagging the S&P on the way up... But that's OK because I suspect it'll dramatically lag the S&P on the way back down. Whenever that happens. I sleep well and can't wait for Porter to be right because then I'm gonna mop the place up." – Paid-up subscriber Matt Vestrand
"I's so sick to death of the market is going to crash and the market is going to 50,000 I'm not paying any attention to either one of you... No more money from me ever." – Paid-up (for now) subscriber Rick R.
Brill comment: Maybe F. Scott Fitzgerald was right after all...
Regards,
Justin Brill
Baltimore, Maryland
August 23, 2017