One of the most powerful 'buy' indicators in the world...

One of the most powerful 'buy' indicators in the world... Tepper: 'We are done'... Zell and Marks: Time to worry... We agree, but... What to avoid... Where to earn big income today...
 

 In today's Digest... one of the most powerful "buy" indicators in the world.

 

If you use this simple indicator for the rest of your career, you're almost guaranteed to improve your investing performance. It works with stocks, bonds, commodities, real estate, and options.

 

If I were forced to only use this one single indicator, I have no doubt that I'd regularly buy the best investments in the world... at the right times.

 

I'd love to be able to publish this indicator on a free website for our readers, but unfortunately, it's information I'm not allowed to publicize in great detail. This is information the financial publishing industry doesn't want you to know...

 

 As one of the world's largest independent financial publishers, we have an outstanding indicator on how well an investment will perform over the coming years.

 

That indicator is… YOU.

 

 When YOU – the broad sweep of subscribers – don't like an investment idea, it's almost guaranteed to work out well. It's simply the way the world works. Most people flee from the best investment ideas. Most people flee from unpopular, bargain investments.

 

Our work reaches hundreds of thousands of readers around the world. And due to the nature of our business, we know what's on your mind. We receive daily feedback from subscribers. Our excellent, well-trained customer service department fields calls all day. And our feedback e-mail (feedback@stansberryresearch.com) fills constantly…

 

But we have an even more powerful tool to know exactly what is on your mind. Something you probably don't even realize you're doing.

 

 We can see and measure which of our e-mails you're opening, which ideas get "clicks," and most important, what products you're buying.

 

 Today, the consensus among you – the S&A family – is clear. You can't stand the idea of owning businesses whose headquarters are located outside of the United States. The idea is repulsive to almost everyone.

 

 Right now, the financial publishing industry is finding it relatively easy to sell research on Bitcoin, gold, gold stocks, and ways to invest outside the stock market.

 

Meanwhile, we've been telling readers over and over about incredible investment opportunities in emerging markets and European stocks. We're seeing many opportunities to safely make 20%-plus annual returns in international stocks. We're seeing safe, stable businesses with large (4%-plus) dividend yields.

 

And most subscribers couldn't care less.

 

They won't click on these articles.

 

They won't open our e-mails.

 

We'd be better off trying to sell snow blowers in South Beach.

 

 Regardless, we press on. We're committed to Porter's principle to give you the information we'd want if our roles were reversed. And we wouldn't want you to cater to our preconceived biases… We'd demand to know your best ideas, wherever you find them.

 

And so, we've described a way to collect an almost 5% dividend buying a basket of the world's best companies (at a price-to-earnings ratio of 14, compared with the S&P 500's P/E of 20)... We told you about municipal-bond funds, which pay a tax-equivalent yield of nearly 10% today (and you can buy these funds below the face value of their holdings)... We urged you to buy blue-chip stocks after major selloffs...

 

 For months, we've told you European Central Bank (ECB) President Mario Draghi is going to do everything in his power to inflate the European economy and destroy the euro. We updated you on that situation yesterday... Draghi cut interest rates and said he'll likely initiate further quantitative easing. As expected, European stocks rose and the euro plunged.

 

But here's the thing...

 

 We know when we can't sell an idea we believe in – an idea we're confident will make our readers safe gains and large income – it's often a great time to buy.

 

As we often preach in the Digest, it pays to be a contrarian. Or as billionaire investor Warren Buffett has famously said, "Be fearful when others are greedy, and greedy when others are fearful." Whatever phrase you choose, it pays to bet against the crowd.

 

And right now, the crowd is getting nervous.

 

 We can't blame them... The world's central bankers are hell-bent on creating inflation and eventually they'll succeed. People are losing jobs. Economic growth is sluggish. The rich are getting richer... The poor are getting poorer. It's a bleak scene.

 

And that doesn't even address the geopolitical risks (some of which we discussed yesterday)... Russia is invading Ukraine, airplanes are going missing, ISIS is beheading journalists on video.

 

And some of the world's smartest investors are stoking the fear...

 

 Yesterday, following the ECB announcement, hedge-fund billionaire David Tepper told Bloomberg, "It's the beginning of the end of the bond market rally. We are done."

 

Earlier this week in an interview with financial network CNBC, real estate billionaire Sam Zell expressed concern for the economy...

 

"The stock market is at an all-time, but economic activity is not at an all-time," Zell said. "People have no place else to put their money, and the stock market is getting more than its share. It's very likely that something has to give here."

 

He added...

 

I don't remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people's thinking. If there's a change in confidence or some international event that changes the dynamics, people could in effect take a different position with reference to the market.

 

 But even Zell admitted he may be early. "If you're wrong on when [the market tops], that's a problem," he said. "You've got to tiptoe... and find the right balance."

 

He said holding cash isn't a bad thing today. We agree.

 

 In his latest memo, another billionaire investor, Howard Marks of Oaktree Capital Management, said it's time to pay more attention to risk... And it's difficult to find the appropriate risk premium necessary to put money to work today.

 

Mind you, Marks is obsessed with risk... He's predominantly a distressed-debt manager. So accepting and properly managing risk is how Marks delivers outstanding returns. And yields are at all-time lows.

 

Marks is an incredible investor and a great writer. His memos are a must-read for any serious investor. You can read his latest memo here.

 

 We last wrote about him in the April 10 Digest... And he was advising the same thing – that investors proceed with caution.

 

The S&P 500 is up 9% since then. Yields on the 10-year Treasury have fallen from 2.63% to below 2.42% today.

 

I'm not poking fun at Marks. He was just as right in April as he is today... You should be worried about risk. But that doesn't mean you shouldn't take advantage of market opportunities as they arise. We all know markets can run higher – and fall further – than anyone expects.

 

 In general, we don't disagree with what these men are saying today. They're brilliant. They influence markets. And they've made fortunes for themselves and investors.

 

Everything they say above is correct... You should be worried. There are lots of risks in the market today. Holding cash is important.

 

But we believe the market still has upside... And, when buying the right assets, you can enjoy large and safe gains while protecting your downside.

 

 Also, keep in mind, these guys are playing with hundreds of billions of dollars. Based on size alone, they're not as nimble as the individual investor. And large funds are often buying exotic and illiquid securities, which quickly become death traps as markets tumble.

 

We're not recommending you be reckless with your savings. To the contrary, we urge caution today. That's why we've been pushing safe and conservative ideas – assets that won't get crushed when things turn and will pay you generous income while you wait.

 

And we certainly recommend you avoid the egregious overvaluations in today's market...

 

 Avoid junk bonds... Interest rates on debt for the riskiest companies are around 4%. That's not enough premium to make up for the risks of default and rising interest rates.

 

 Avoid buying restaurants that are expected to sell shares to the public at a $1 billion valuation... Like New York-based burger chain Shake Shack, which could be valued at $1 billion after its initial public offering. The company earned $20 million last year.

 

 In short, there are lots of obvious pitfalls today. Don't get caught up in them. Focus on the quality opportunities.

 

 We've written loads on what a top in the market "looks like." There's euphoria. People are buying their third and fourth homes (not struggling to find a reasonable rental property). Hot stock tips abound.

 

That's not the case today. So we know you're worried. And if I were worried… I'd want to know where I could park cash, earn income, and sleep well at night.

 

And we still believe the basket of foreign stocks Dr. David "Doc" Eifrig recommended in the July issue of his Income Intelligence service is the place.

 

We're in the last innings of the bull market in the U.S. But in other spots around the world – like Europe – the market has much more upside.

 

Ask yourself, would you rather buy a U.S. blue chip for around 20 times earnings yielding maybe 3%... or its European counterpart for around 14 times earnings and yielding nearly 5%?

 

The answer for us is clear.

 

 Doc explained why American investors should push beyond their natural skepticism of buying foreign stocks…

 

The U.S. is and will continue to be the dominant economy and financial market in the world for the foreseeable future. Because of that, U.S. stocks and bonds make up the vast majority of American income investors' portfolios. Studies even show that U.S. investors hold about 70% of their assets in the U.S.   But the U.S. makes up only 46% of the world's economy. By that measure, most U.S. investors are heavily "overweight" to U.S. stocks. Most investors are overweight their own country or region. As we discussed last month, this theory is called "home-country bias" and is considered a basic behavioral error in investing.   If anything, U.S. investors would be better off being significantly underweight U.S. stocks. Considering that your income and personal wellbeing are tied to the health of the U.S. economy, by owning too many U.S. stocks, you're unknowingly leveraging up your exposure.

 

But he acknowledges that monitoring all the world's stock markets for the best values is a "tall task" for individual investors… let alone assessing which countries' markets will perform best in the future.

 

That's why Doc recommended a fund that holds a basket of international stocks. In his July issue, he described the top 10 holdings, which included several telecommunications firms as well as energy, retail, and industrial stocks. And the fund is currently yielding 5% a year.

 

As you can imagine, we can't reveal the name of the fund here out of respect to Income Intelligence subscribers. If you'd like to learn more about subscribing to Income Intelligence and gaining access to all of Doc's issues (including his July recommendation), click here...

 

 And if nobody's interested, we'll tell you how to buy gold and Bitcoin next week.

 

 Also, I hope you'll join us in New Orleans next month for the New Orleans Investment Conference... Porter Stansberry is speaking on a panel with former Treasury Secretary Alan Greenspan... Gloom Boom & Doom editor Marc Faber is also joining in the festivities.

 

Plus, you'll hear from Doug Casey, Rick Rule, Frank Holmes, Marin Katusa... and many other top minds in the investing and natural resource space.

 

To reserve your spot, click here...

 

 

 New 52-week highs (as of 9/04/14): Alcoa (AA), WisdomTree Japan Hedged Equity Fund (DXJ), ProShares Ultra Short Euro Fund (EUO), Greenlight Capital Re (GLRE), Steel Dynamics (STLD), Sysco (SYY), Union Pacific (UNP), and ProShares Ultra FTSE China 25 Fund (XPP).

 

 In today's mailbag, subscribers chime in on dollar stores. Send your thoughts to feedback@stansberryresearch.com.

 

 "With 3 kids and wife, I'm warming up to the idea of purchasing consumer products from these yucky stores. Heck, I wish my wife would come around to the idea. They do sell the same brands for less in most cases." – Paid-up subscriber Jason R.

 

 "The same brands are sold for less, but look at the packaging. Name-brand toilet paper is sold, but smaller rolls. Name-brand detergents are also sold, lower price? Again smaller containers." – Paid-up subscriber Susan Wolfgang

 

 "Yep. Do 100% of grocery shopping at a Walmart grocery. I have compared priced with the Albertsons across the street and Walmart saves me a steady 25% for the last year. Also buying a few things at a Dollar store. Why not? Same brands." - Paid-up subscriber Bert Robinson

 

 "I have enjoyed reading about the 'disappearing middle class' and the relationship surrounding businesses such as rental furniture stores(rent to own) and Dollar General attempting to acquire Family Dollar. I have noticed the increase in business at DG as there is a store across the street from my veterinary hospital, where we purchase most of our supplies. I purchased stock in DG on your recommendation and have sold puts on DG also profitably.

 

"I like to save on supplies when I can, so I shop at DG almost weekly because the receipt they give entitles the purchaser to $5 off the following Saturday, as long as you purchase $25 total in products. I plan to purchase the exact amount ($25), so that amounts to a 20% discount on all cleaning products, paper towels, kleenex, etc. that we use on a regular basis. There is no limit to how many receipts you can save, so many times I redeem 3 receipts at a time, always saving 20% off already low priced good quality products. I don't even have to drive to Wal-Mart, just right across the street!

 

"I have been a Flex Alliance member for the last 18 months and can't say enough about the good advice I have received from Stansberry. Not only have I learned important lessons about investing (including selling puts), I am profiting while enjoying the challenge of managing investments that will used for my family's future and my retirement. I am looking forward to attending one of your conferences in the not too distant future. I send best wishes for continued success to Porter and all the editors that write for Stansberry, thanking you for the valuable advice and insights that I have found nowhere else in the investment community." – Paid-up subscriber Brad Huttenhoff

 

Regards,

 

Sean Goldsmith

Baltimore, Maryland

September 5, 2014

 

Eric Sprott: Why gold stocks could soar 300% from here...

 

Resource billionaire Eric Sprott isn't someone most individual investors can call on the phone to chat with. But we recently landed an exclusive interview with the Sprott Inc. founder.

 

In today's Digest Premium – the final installment of our "gold week" series – he discusses the reasons gold could spike higher from here... offers his price target for gold... and explains what that means for the future of gold stocks...

 

To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.

Eric Sprott: Why gold stocks could soar 300% from here...
 

Editor's note: Resource billionaire Eric Sprott isn't someone most individual investors can call on the phone to chat with. But we recently landed an exclusive interview with the Sprott Inc. founder.

 

In today's Digest Premium – the final installment of our "gold week" series – he discusses the reasons gold could spike higher from here... offers his price target for gold... and explains what that means for the future of gold stocks...

 

 

 Precious metals are in a bit of a funk right now. Gold has been sitting around $1,300 per ounce. But there are always forces at work that seem to determine the price, which for the most part is the opposite of the commercial traders' expectations. Commercial traders were massively short both silver and gold, and they have been buying back those positions.

 

On a physical basis, the supply/demand fundamentals have always been in favor of higher prices – and ultimately, we will see prices rise dramatically. There are a lot of things going on geopolitically that might make people want to consider precious metals.

 

Whether it's fighting in India (which is a huge buyer of gold) and Pakistan... ongoing problems between China and Japan... Ukraine and Russia... Israel and Hamas... ISIS... There are so many things going on that could spark people to want to get more involved in gold. Plus, there's the current thinking that came out of the Federal Reserve's summit in Jackson Hole, Wyoming that the European Central Bank may ask governments to spend more money and print more money – another round of quantitative easing. That could stimulate a lot of demand.

 

There are also lots of ongoing investigations. German regulators are investigating the trading of gold and silver at their major banks. There are various lawsuits that have been filed about manipulation – which of course will take time to get through the courts, but nonetheless put it out there as a warning shot.

 

Most of what occurred in 2013 is inexplicable, when gold fell almost 15%, from around $1,575 to $1,350, in a few days. Some described them as "six sigma events," which happen something like every 5,000 years.

 

 As we look out over the next five years, we're likely to see a decline in gold production. I've always believed that there has been a shortfall of about 2,000 tons a year, which the Western central banks have surreptitiously supplied through leasing of gold.

 

I've hypothesized that there's probably not much gold left in the Western central banks. When the Germans ask for 20% of their gold back – about 300 tons, and the U.S. theoretically had more than 8,000 tons – at first, the U.S. said, "No, you can't have it." Then we said, "We'll give it back over seven years," which is a little more than 40 tons per year. But last year, Germany got back just five tons.

 

It seems odd that somebody else has their gold with you, they ask for it back, and they get almost nothing. It raises the specter that the gold isn't there because it has been leased out. So I'm still in the camp that believes that the outlook for the precious metals is stunning.

 

 Meanwhile, gold stocks have had a good little run. We're probably up something like 30% off the low, which typically indicates a bull market. We've seen dramatic increases in some stocks, which have gone up 300% or 400%. One of the common themes seems to be that if you can get your production in order, the market will reward you.

 

We're seeing a lot more action in these stocks. People are willing to participate in the gold and silver space, and I think it's because it's one of the only groups – if not the only group – that hasn't performed well over the last couple years. But they're doing a lot better. And if gold and silver ever get to my price targets, I suspect that we could see hundreds-of-percent gains in the group as gold approaches $2,000 an ounce. On a move like that, gold stocks would be up at least 300%. That's what I imagine should happen going forward.

 

– Eric Sprott

Eric Sprott: Why gold stocks could soar 300% from here...

 

Resource billionaire Eric Sprott isn't someone most individual investors can call on the phone to chat with. But we recently landed an exclusive interview with the Sprott Inc. founder.

 

In today's Digest Premium – the final installment of our "gold week" series – he discusses the reasons gold could spike higher from here... offers his price target for gold... and explains what that means for the future of gold stocks...

 

To continue reading, scroll down or click here.