Sell This 'Stock' Immediately

Sell this 'stock' immediately... 'Big changes' could be coming for the U.S. economy... Druckenmiller turns bullish... Dalio sees a 'major reversal'... This signal appears before every 100% move in the market...

One of the most dangerous trading vehicles in history is about to disappear...

In recent years, leveraged exchange-traded securities have become a popular way to bet on short-term moves in various assets.

We won't debate the merits of these securities today. Like most leveraged investments, they can be profitable when used appropriately... and incredibly dangerous in the wrong hands.

But many folks don't realize there are additional risks in one type of these securities known as exchange-traded notes ("ETNs").

Both ETNs and the more common exchange-traded funds ("ETFs") are designed to track an underlying asset – such as an index of stocks or a particular commodity – and trade freely like stocks. But the similarities end there...

In simple terms, an ETF is a vehicle that owns the underlying asset. By contrast, ETNs don't hold any assets at all. Instead, they're a type of debt... a "promise" to pay... from the bank that issues the note. This means ETNs are subject to credit risk that ETFs are not.

But that's not the only important difference...

If an ETF is shut down and delisted, the fund is typically liquidated and investors are paid out in cash. But when an ETN is delisted, that's not necessarily the case. The issuer has no responsibility to liquidate until the note's maturity date... which can be years down the road.

Why do we bring this up?

Because ETN delistings have become more common as regulators pressure banks to reduce risk. According to fund-research firm Morningstar, nearly one-third of all ETNs have been closed in the last 10 years. And tomorrow, one of the biggest ETNs in history will join them...

On Thursday, Credit Suisse will suspend trading in its $1.1 billion triple-leveraged VelocityShares 3x Long Crude Oil ETN (UWTI), as well as its smaller bearish sister, the VelocityShares 3x Inverse Crude Oil ETN (DWTI).

News service Reuters reports investors have wisely been rushing for the exits. They pulled nearly $675 million from UWTI in the last two weeks of November alone. But folks who don't sell by tomorrow could be in trouble... These notes don't officially expire until February 2032. In other words, folks who don't get out before shares are delisted may not get their money back for up to 15 years.

This isn't just conjecture. It has happened before...

According to Reuters, Credit Suisse delisted three ETNs in March 2009 – the Elements MLCX Gold Index ETN (GOE), the Elements MLCX Livestock Index ETN (LSO), and the Elements MLCX Precious Metals Plus Index ETN (PMY) – but didn't liquidate them until February 15, 2013. Investors who owned these vehicles didn't get their money back for nearly four years.

If you happen to own shares of UWTI or DWTI, run – don't walk – to sell them now.

Several of the world's most respected investors believe big changes are coming...

They think Donald Trump's victory last month could mark a significant turning point for the U.S. economy and the markets.

Shortly after the election, legendary hedge-fund manager Stanley Druckenmiller (who famously earned 30% average annual returns over his career without a single losing year) told financial-news network CNBC he was suddenly bullish on the economy for the first time in years. As he said at the time...

I'm very hopeful and optimistic on what it means... The fears of protectionism, while valid, are greatly oversized relative to the benefits to the other parts of the economy [from deregulation and tax reform].

This economy is so over-regulated and people are just drowning in red tape, that the removal of that, and I'm expecting serious tax reform, cuts to the corporate tax rate... So I'm quite, quite optimistic on the economy...

I have a large bet on economic growth... I'm short bonds globally... I'm short U.S. bonds [due to stronger future growth]. I like the sectors of the equity market that respond to growth [like] value and materials, not things like staples or traditional growth stocks... I really like the [U.S.] dollar, particularly against the euro.

Ray Dalio – founder of Bridgewater Associates, the world's largest hedge fund – echoed this sentiment later last month...

While he was more tempered, he too believes Trump's presidency could set off a "major reversal" that could last for years. As he wrote in a post on social-networking site LinkedIn...

[W]e believe that we will have a profound president-led ideological shift that is of a magnitude, and in more ways than one, analogous to Ronald Reagan's shift to the right... Donald Trump is moving forcefully to policies that put the stimulation of traditional domestic manufacturing above all else, that are far more pro-business, that are much more protectionist, etc...

There is a good chance that we are at one of those major reversals that last a decade (like the 1970-71 shift from the 1960s period of non-inflationary growth to the 1970s decade of stagflation, or the 1980s shift to disinflationary strong growth)...

Our very preliminary assessment is that on the economic front, the developments are broadly positive – the straws in the wind suggest that many of the people under consideration have a sufficient understanding of how the economic machine works to run reasonable calculations on the implications of their shifts so that they probably won't recklessly and stupidly drive the economy into a ditch.

On Tuesday, Steve Schwarzman – chairman and CEO of private-equity firm Blackstone Group (BX) – went even further...

Speaking at a Goldman Sachs investors conference, Schwarzman – who was tapped to lead Trump's economic advisory forum – said the new administration could unleash the most significant economic changes he has ever seen. From his speech...

The changes as a result [of the election] are going to be very substantial in many areas, but particularly in the business community and the financial area. You're going to have a very substantial reversal in regulations of all types.

If you look at the architecture of the financial world, it's going to change very substantially. I anticipate with a pretty high level of confidence that this stuff is going to happen. And this is as big a change happening all at once... I've been in finance for, I don't know, 45 years? This will be the biggest. When you have changes like this that are so profound, it's going to drive higher GDP. It's going to make the U.S. a more friendly place for foreign capital. And it's going to have significantly accelerated growth, not just for financial institutions but for the country as a whole.

So, this is very important. It's very important. And it's not just about some stocks for financial companies, although that would be a nice thing. It's much bigger and more impactful over a much longer period of time.

Of course, the reality is no one really knows what a Trump presidency will look like...

It's still too early to tell.

But it's always worth following what the world's smartest and most successful investors are thinking. And a small but growing number think the next several years could look far different from the last.

We'll be following this story closely...

Finally, a quick reminder before we sign off...

By now, you've likely seen us mention this remarkable research from our colleague Steve Sjuggerud.

If you've missed it so far, Steve has spent the past several years – and nearly $1.5 million – perfecting an investment strategy unlike anything most folks have every tried before.

It's all based on a market-timing signal – what Steve has dubbed the "Nordic Cross" – that appears before every big up move of 100% or more in the markets. Every single one.

Using this signal has allowed Steve to beat the overall market by nearly 50% over the past five years.

We know it sounds too good to be true. But don't take our word for it. You can read all the details from Steve himself.

But if you'd like to learn more about Steve's "Nordic Cross" signal – and how you can try this strategy for yourself absolutely risk-free – you must act soon. This opportunity closes at midnight Eastern time tomorrow.

Click here for all the details. (This does not lead to a video presentation.)

New 52-week highs (as of 12/6/16): American Financial (AFG), Alliance Holdings GP (AHGP), Axis Capital (AXS), Bank of Montreal (BMO), Berkshire Hathaway (BRK-B), CME Group (CME), WisdomTree SmallCap Dividend Fund (DES), iShares Select Dividend Fund (DVY), BlackRock Floating Rate Income Strategies Fund (FRA), iShares Core S&P Small-Cap Fund (IJR), Lindsay (LNN), PowerShares S&P 500 BuyWrite Portfolio Fund (PBP), PowerShares High Yield Equity Dividend Achievers Fund (PEY), iShares MSCI Global Metals & Mining Producers Fund (PICK), VanEck Vectors Russia Fund (RSX), Spirit Airlines (SAVE), and W.R. Berkley (WRB).

A busy day in the mailbag: Another Stansberry Alliance recommendation... a subscriber accuses us of lying... a brand-new OneBlade owner writes in... and a reader shares a new product idea. Send your notes to feedback@stansberryresearch.com. Praise or vitriol, we read it all.

"I would like to second the opinion of the person suggesting an Alliance membership. In the two years since becoming an Alliance member, I have stocks that have doubled and tripled in value! Never before did I see this in my stock picks. Add to that, successful bond and gold picks that I would never have known about, trailing stops, position sizing, options, and a broader picture of the economy are just a few things that I have learned. All of this information from one group of publications is just incredible and as things change, as they always do, another approach or a completely new newsletter is formed (or even eliminated).

"I have never seen, heard or expect to see anything as valuable as an Alliance membership. Yes, I hesitated due to the cost but since then, new newsletters have been created, and I expected excuses to charge an extra fee, but it never happened. These were immediately included for Alliance members. I can't imagine a better deal anywhere else. Porter, though a bit strident and quite opinionated, is an amazing guy who truly appreciates his Alliance subscribers (and all subscribers), sticks to his promises and doesn't try to squeeze every last penny from his Alliance members as other newsletters most certainly would. An Alliance membership is the best thing I ever did, and it has more than paid for itself." – Paid-up Stansberry Alliance member Bruce H.

"Porter sure has an itch regarding Tesla. Now he is even trying to imply he won on three short bets in today's email blast. I'll bet he lost on all three and can't admit it since he does not say outright that he won, made $XXXX.00, etc. What's the truth, and will you publish the truth about those 3 short bets he called on Tesla?" – Paid-up subscriber Larry Olson

Brill comment: Larry, perhaps you should actually read what we wrote before you lob accusations... As we clearly noted yesterday, we were referencing the November 21 Digest... where Porter addressed the results of his Tesla shorts (as well as his First Solar and Salesforce shorts) in detail. Again, you can read "the truth" right here.

"I recently purchased a OneBlade razor. I have to admit as I contemplated paying so much for a razor, I questioned if I was in my right mind. Well this morning I used this razor for the first time. I kept thinking to myself as I slid the razor over my face, 'Am I really shaving?' No pulling, tugging or irritation at all. No clogging of the razor with shorn hair. It was amazingly smooth! I felt my face when finished and it was smooth as a baby's butt. I remember as a kid going to my grandparents' house and watching grandpa go through the morning ritual, lathering up with the old fashioned brush and cutting away with the single bladed razor thinking that looks cool. Well I like the adage that states 'new isn't necessarily improved.' The multi blade plastic devices we as men are offered today don't hold a candle to the OneBlade. Thanks for making an amazing product. Definitely worth the money." – Paid-up subscriber Steven MacLennan

"I can buy investment advice, expensive trips to exotic destinations with self-absorbed people, and now a new razor with accessories. Do you have some high-quality Christmas tree lights for sale? Or maybe mail order beef tenderloins? Thank you in advance." – Paid-up subscriber Bradley Stone

Porter comment: No, no Trump steaks. Not yet. But it's not a bad idea...

Regards,

Justin Brill
Baltimore, Maryland
December 7, 2016