One of the most important memos you'll read from Porter...

 In today's Digest... one of the most important memos you'll ever read about our business.

It's from our founder, Porter Stansberry... and it covers several essential ideas about newsletter publishing. It's incredibly important that you know about these ideas... not just as a Stansberry & Associates subscriber... but as a consumer of ANY financial service or product. Don't miss it in today's mailbag...

 In his latest Retirement Trader, published on Friday, Dr. David Eifrig explained why he's still bullish on the U.S. economy. And he updated us on his incredible streak of consecutive positions he's closed for a profit...

This week, we've broken through to new highs in the Dow Jones Industrial Average. (The DJIA is an index of 30 stocks thought to represent the U.S. economy.) That means investors who simply buy and hold investments that track "the Dow" are back where they were five years ago. That's not a great return for the risk... but it does confirm that the worry and fear were a bit overdone.

In Retirement Trader, we've continued to sell options and take advantage of spikes in the VIX to improve the probability of booking winners. And yet as we've said repeatedly... we don't need pops in volatility to make money.

To date, Doc has closed 108 consecutive positions for a gain...

And he took advantage of recent spikes in the Volatility Index (the VIX) to book even larger gains… The VIX measures the prices people are willing to pay for options that protect the value of their stock holdings. That's why we call it the "fear gauge." The higher the VIX goes, the more nervous investors are feeling and the more people will pay to insure their stocks.

So a pop in volatility means you can get more in premium for selling options.

 This week, Doc is looking to close four put sales. All four could expire worthless, bringing his streak to 112.

In the meantime, Doc is happy to continue trading this bull market. He wrote…

 Australia just became Japan's No. 1 gas supplier...

Japan is the world's largest importer of liquefied natural gas (LNG). According to the national Australian newspaper, Japan's imports rose 11.2% in 2012 with 87.3 million tons for the year. Japan is a longtime buyer of Australian LNG, absorbing around 70% of the country's exports. The Australian Ministry of Finance figures show Australia captured 18.2% of Japan's 2012 imports, with 15.9 million tons. That beats the top worldwide exporter, Qatar, which sold 15.6 million tons to Japan. Malaysia came in third, selling 14.6 million tons to Japan.

It's important to note… the article also reported Australia's LNG was cheaper than the fuel from competing nations. Australia's average LNG price was $15.96 per million British thermal units (mmBtu)… while Qatar sold Japan its gas at $17.42 per mmBtu.

Now think about this... natural gas sells for around $3.50 per mmBtu in the United States. This is a huge opportunity for the domestic energy industry. As we pointed out in the Digest on February 21, Japan is looking for cheaper gas (as is Europe). Utilities there say they could liquefy U.S. gas and transport it to Japan for around 30% less than what they pay today.

Longtime readers are familiar with the abundance of natural gas in the United States. We've covered it many times, and Porter has been writing about it for years. The U.S. is flooded with reserves. The problem is, we don't have facilities in place (or government approval) to export it... yet.

So far... only one company has an export license – Cheniere Energy (LNG), a Stansberry's Investment Advisory portfolio position. And it's building export facilities right now. The company has five export terminals under construction. It expects the first to be operational in 2015 – the Sabine Pass facility on the border between Texas and Louisiana. Porter recommended Cheniere in July 2012, and readers who followed his recommendation are up more than 50% so far.

 Several real estate-related stocks hit 52-week highs today... including homebuilders KB Home and Brookfield Residential. So did residential furnishing and fixtures company Leggett & Platt (a $5 billion company).

Last week in the Digest, we discussed lumber's outperformance over the past year... Lumber returned 46% over the past 12 months, besting stocks, grains, and energy. As housing demand picks up in the U.S., lumber prices will rise. And the trend is up.

In addition to the timber REITs hitting new highs, Lumber Liquidators, a giant manufacturer of hardwood flooring, hit a 52-week high today.

 Wells Fargo's stock hit a four-year high today. As the largest mortgage lender in the U.S., the California-based bank serves as a proxy for the housing market. It's also the largest bank in the country (by market cap), so it's rallying along with the overall financial sector.

We've been bullish on financial stocks for a while because the government has given banks and other financial institutions a free pass to make huge profits. Banks are able to borrow money for nothing and invest in higher-yielding assets (in most cases, government-guaranteed mortgage paper).

 The long list of new highs comes courtesy of the Federal Reserve's easy-money policies – or what Steve Sjuggerud has termed the "Bernanke Asset Bubble." The Fed is forcing down interest rates, pushing investors into stocks and other riskier assets. Steve expects the market to hit absurd heights before this bubble bursts. (We're still years away from the top, he says.)

In his latest issue of True Wealth, Steve said this phenomenon could cause the market to soar 95% in the next three years.

 To see how Steve is playing this extraordinary rise in equity prices, you can sign up for his True Wealth newsletter here... And you can do so risk-free. If you decide the letter isn't for you within the first four months, we'll refund 100% of your money, no questions asked.

 And finally, we'd like your feedback on something please...

As you many of you know well… in November 2010, we first began airing a video presentation called the "End of America." In this presentation, Porter described America's financial problems in great detail and explained how this will ultimately lead to the U.S. dollar no longer being the world's reserve currency.

As Porter explained, this would make it much harder for our government to borrow and print money… with catastrophic consequences for our nation. We still believe and support this thesis. As students of history, we know that when governments treat money as the Feds have been treating the dollar, it always ends badly.

Since we first aired this video, it has become one of the most frequently watched financial presentations in the past 25 years, with well more than 20 million viewers.

 Today, we are hoping to get some feedback from folks who have watched Porter's video. (If you aren't sure whether you've seen this video, you can watch a version here.)

If you watched the End of America, we'd like to hear from you regarding a few things. One, did it change the way you think about our government and our nation's future? Did it open your eyes to the big problems we now face? And finally, did it spur you to take steps to protect yourself and your family? We hope so, and we'd like to hear what you have done.

You can send your feedback to EOAfeedback@stansberryresearch.com. Please put the word "VIDEO" in the subject line. 

 New 52-week highs (as of 3/8/13): ProShares Ultra Biotech Fund (BIB), Berkshire Hathaway (BRK), WisdomTree Japan Hedged Equity Fund (DXJ), Fidelity Select Medical Equipment & Systems Fund (FSMEX), iShares Insurance Fund (IAK), iShares Biotech Fund (IBB), iShares Home Construction Fund (ITB), Allianz Equity & Convertible Fund (NIE), PowerShares Buyback Achievers Fund (PKW), ProShares Ultra Health Care Fund (RXL), Sequoia Fund (SEQUX), ProShares Ultra S&P 500 Fund (SSO), W.R. Berkley (WRB), Anheuser-Busch InBev (BUD), Pepsico (PEP), Johnson & Johnson (JNJ), Automatic Data Processing (ADP), Cisco (CSCO), 3M (MMM), Chicago Bridge & Iron (CBI), American Financial Group (AFG), Travelers (TRV), Alleghany (Y), Blackstone Group (BX), Kohlberg Kravis Roberts (KKR), Enterprise Products Partners (EPD), Cheniere Energy (LNG), Chevron (CVX), Wells Fargo (WFC), and Sysco (SYY).

 In today's mailbag, Porter takes on a subscriber who's complaining we're unethical for not delivering what we promised. What follows is an important piece from Porter explaining our business... and how it is that we aren't out to defraud our clients. We welcome your feedback on the topic at feedback@stansberryresearch.com.

 "Read some of Casey's book. Agreed with his views on global warming. Didn't totally agree on his views of NASA.

"Still looking to get those 'five words' I need to say to get the silver coins from the banks?

"I'm going to have to cancel out all of my subscriptions with Stansberry if I don't get what I pay for, it's not ethical for a company to not deliver what they promise." – Paid-up subscriber Jim

Porter comment: I'm genuinely curious about something...

Given that we offer a money-back guarantee on all our products... and given that we've been in business, operating from the same address since 1999... and that our partners, Agora Inc., have been in business, from the same address for well over 30 years... and given that Stansberry & Associates is now the largest independent financial research firm in the world...

Do you really think we are deliberately not providing you with what we've promised – the report on the "five magic words" to get silver from a bank?

Don't you think it's far more likely that:

1. The e-mail we sent you was inadvertently placed in a spam e-mail folder on your computer… or maybe was filtered from reaching you in some other way, perhaps by your Internet service provider? This happens all the time. Did you check the "spam" folder in your e-mail account?

Or maybe something even more common (and innocent) happened, such as...

2. Perhaps you didn't open the e-mail with the link to that particular special report? Lots of e-mail slips by users if they're away from their computers for a day or two.

Or...

3. Maybe you simply didn't recognize the title of the report with the content that you're seeking. The title is: "The Free Silver Loophole: How to Legally Remove Silver from the U.S. Banking System."

That report, by the way, is the first – the very first – listed on the Retirement Millionaire special report section of the Stansberry & Associates website. Subscribers can view it here.

I know it's been there and available to you throughout the entire period of your subscription. You could have simply gone to the website and read it any time you pleased.

But that's not really the point, is it?

Given all of the ways that information can be misplaced, misunderstood... or even forgotten about these days... Why is it that so many people IMMEDIATELY assume that we're at fault?

Even worse, they conclude we've done something intentional, something "unethical" or nefarious, to defraud them?

I truly don't understand why so many people IMMEDIATELY leap to this conclusion.

I mean... unlike just about everyone else involved in financial services… everything we do is completely transparent…

I. We sell independent financial information – most of it for a very low price (less than $100 per year). We don't allow our analysts to own the stocks they cover (independence). We don't provide any brokerage or investment services (independence). We don't accept any form of compensation for the editorial recommendations we provide (independence).

II. We deliver our products through a wide variety of channels. We print and mail. We send e-mail. And we post to our website, which is available to subscribers 24/7.

III. We offer refunds on all of our products. Our refund policy is so generous that we face a significant liability from subscribers who intentionally refund and defraud us. Many people also give us bad credit cards, write bad checks, etc. That's a cost of doing business we face, simply to make sure that our products are widely available and we can always part as friends with anyone who is genuinely unhappy with what he's bought. (Try asking for a refund from your broker. Let me know how that discussion goes.)

IV. We staff professional, college-educated, customer-service representatives on every working day. They work in our headquarters and have access to our executives and editorial team. They do an outstanding, world-class job. They can immediately handle any questions about your subscription. They will immediately process your refund, if you're not happy for any reason. The average wait time to speak to our reps is less than one minute. (Call on Wednesday or Thursday for the shortest possible wait time. Monday is our busiest day – most likely because I write the Digest personally on Fridays. That seems to trigger thousands of refund demands.)

V. We constantly publish the negative feedback we receive… so much that friends and supporters routinely ask why we "put up with" the complaints and give them such a public forum. (One exception… we don't usually run the letters that are so crazed we literally don't know what they're talking about – such as the dozens of letters we get every month bashing us for investments we've never recommended.)

VI. We publish thorough and accurate annual "Report Cards" that rate our analysts and our publications according to the results of their actual track records and the risks they took. (You can see the latest here and here.) Last year, I gave myself an "F." Find another financial publisher who is half as honest with his subscribers – anywhere.

So... please... those of you who constantly feel threatened by us or worry that you're being served by some kind of a shady business... Please, tell me, what more I can do as a business owner to convince our dear subscribers that we're trying our very best to serve them – and only them.

I believe we have, by far, the most affordable and the most transparent business model in all of the financial services industry.

And yet... no matter how frequently investment firms sell their retail clients down the river (Merrill Lynch should be known as "Investors Lynched")... no matter how many times you see investment firms calling their clients "muppets" and taking advantage of them... No matter how much money is stolen from investors through outrageous fees from banks, brokers, and hedge funds...

We're the ones who get called "unethical" and constantly get e-mails like these... calling us crooks.

I truly don't understand why. Any thoughts?

Regards,

Sean Goldsmith and Porter Stansberry 
Miami Beach, Florida 
March 11, 2013

 Many readers misunderstood the point of my (Porter's) March 1 Digest, titled "Why You Shouldn't Buy Commodity Stocks"...

Despite the title of that Digest, I wasn't telling you to stop buying commodity stocks all together.

What I said was... "Unless you've spent years thinking about finance, there's a good chance many of [the most important concepts of commodity investing] won't occur to you until after you've learned the hard way. So here's a good common sense rule for investing in commodity businesses: Don't do it."

My point was, out of all the different industries out there, commodity businesses are some of the hardest to get right as an investor. So don't feel like you have to buy these stocks. You're under no obligation to swing at the curveballs. You can wait for the slow "change ups" that float right down the middle of the plate. Investing is a game where you don't strike out watching pitches. You can just keep watching...

 So I did not say, don't ever buy a commodity business. Don't ever invest in commodities. I said... unless you're experienced in finance, unless you really know what you're doing, avoid commodities... They're a very, very tough sector to get right.

 Why would you make a long-term investment in commodities, then, if it's so hard to get right? And why have you, Porter, recommended commodities if you think it's a sucker's bet?

If you know what you're doing… it's easy to make a lot of money in commodities. Look at our friend Rick Rule. The guy has made a fortune in commodities. The reason that's possible is… in addition to being a very tough business, commodities are also very, very cyclical.

So if you're going to invest in commodities, don't ask yourself if the company is well-run or if you're bullish on the commodity price. That's what most people do…

 What you really need to ask yourself is: Where are we in the commodity price cycle? For example, when it comes to gold, you can't tell me we're anywhere near the bottom of the commodity price cycle. Gold has gone up for 12 straight years. Does anyone with any common sense think that now must be a great time to buy gold? That you're buying at the bottom? No honest person could answer "yes."

 Think of owning gold as buying insurance... If you live in Florida, it's expensive to buy insurance when there's a hurricane forming in the Caribbean. Likewise with gold right now... a storm's brewing, and the global monetary system is fragile. It will likely collapse. That's why gold prices are high.

 But back to the commodity price cycle... I believe the best way to judge the commodity price cycle is to look at the industry's capital expenditures.

I've made this argument many times when it comes to oil and gas. Right now, the U.S. has a near-record number of drilling rigs operating. That's not the time to buy these stocks... When lots of drill rigs are operating, all the companies are producing oil and making money.

So when is the time to buy oil? You want to buy oil when nobody wants any of the rigs. In 1998, 75% of drill rigs were sitting idle. Nobody was making any money. And you could literally buy these companies for pennies on the dollar. That's when you take a big position in commodity stocks...

(And sometimes, you'll find other circumstances when speculating in specific commodity stocks can be very profitable. But we'll leave the differences between investing and speculating for another day.)

 I don't know what it is about human nature. But for some reason, human nature is not well-suited for contrarian investing. People just can't do it.

Right now, energy producers are giving away natural gas in the ground. They're literally giving it away. And yet when I talk about buying a stock like gas producer Devon Energy, people look at me like I've got three eyes. They say, "But the stock has gone down for the last five years. Why would you buy that company?"

Because it's a commodity producer... You want to buy commodities when they're giving them away. Not when you've got to pay a huge premium for it.

But that's not what happens. People end up buying oil and gas stocks when oil is at a new all-time high. People end up buying gold and silver stocks when they're at new highs. I don't understand it.

So because I know that most people are incapable of being successful as a contrarian investor in commodities, my No. 1 rule is: Just don't do it. Don't get involved in it. You're not going to succeed unless you are well-suited to this style of investing. And most people aren't.

– Porter Stansberry with Sean Goldsmith