Steve Must Be Out of His Mind

Steve must be out of his mind... The frenzy is here... You don't need to precisely nail the timing... We all want a little more from the 'Melt Up'... Uncle Sam is at it again... Basic economics are unavoidable... Mailbag: 'Put people to work again'...

Maybe you're not ready to believe it...

In fact, it's possible you'd rather think that our colleague Steve Sjuggerud has lost his mind. That might be easier than admitting the "Melt Up" is nearing its end... as he said in yesterday's Digest.

But I (Vic Lederman) know firsthand that data is driving Steve's decision-making. And based on the data, we can clearly see that the frenzy is here...

A recent survey found that 28% of surveyed American adults bought into the so-called "meme stocks" in January.

Think about that... According to this poll, nearly one in every three American adults is actively participating in the stock market. And they're unabashedly trading with the crowd.

This alone should give you pause. But it gets crazier... Of those buyers, 43% said in the survey that they had just opened their first brokerage account that month, too.

Just yesterday, Steve said... "Markets peak when there is nobody left to buy. That is all you need to know."

And with so many new buyers in the market today, how many could really be left to buy?

Steve doesn't think many. So he has made a big prediction... The Melt Up will end in 2021.

Now, this is exactly the opposite of what everyone wants to hear...

I get that... I really do.

The markets have just come roaring back from the COVID-19 crash. It feels like there's no limit to the heights that stocks can reach. And despite the tech-heavy Nasdaq Composite Index entering into a correction early last week, folks are still so bullish that it's scary...

Everybody is trading stocks these days. I've seen so many trading gurus on social media that I've lost track of them. And their flashy advertisements ooze with new money excitement.

In this environment, I simply can't give any amount of evidence that will convince everyone. But here's the truth...

The Melt Up is nearing its end. And sadly, most folks are going to follow the peak right back down to the bottom.

Fortunately, my True Wealth Real Estate readers and I don't have to worry about a market 'Melt Down'...

That's because the real estate market changes the rules a little. Here's what I mean...

At True Wealth Real Estate, we focus on a variety of deals – from modern warehousing to industrial warehousing to cutting-edge, mixed-use developments all the way to student housing. We've even looked at some plain, old apartment complexes and remodels.

Plain and simple, the real estate market features all kinds of subsets. But in the end, the deals we're looking at all share one thing in common...

Time.

Student housing projects are the perfect example of this idea...

Take the project right next to Clemson University in South Carolina that I detailed back in October. It was right as the country climbed into what would be its third peak in COVID-19 cases.

But investors willing to look just a little bit into the future managed to get in on an incredible opportunity... The project is set to nearly double participants' money in three years. That translates to a staggering internal rate of return (IRR) of 22.5%. (Remember, as Steve noted yesterday, IRR is sort of like the annualized return of a real estate deal.)

And this project is under great leadership, too... It's being managed by Brent Little and Trevor Tollett, the executive partners of its sponsor FRP. These two men have more than $2 billion of real estate success behind them.

The evidence we have right now says the COVID-19 worries will be put to bed in three years. So why worry about them right now when you put money to work in a brilliantly organized project?

Maybe you think Steve is calling the end of the Melt Up too early... But surely, you don't think he has called it three years too early, right?

Remember, that's the timeline to double investors' money in this project at Clemson. And investors that understand this are lining up for years' worth of double-digit returns.

I've even covered one deal designed to return 15% a year for the next decade to investors... Meanwhile, the benchmark S&P 500 Index returns an average of roughly 7% annually throughout history, depending on how you slice it.

So in other words, that means True Wealth Real Estate subscribers got access to a project designed to double the market's annual return over an entire decade.

And that real estate deal came with a near-zero tax bill, too. (I'll explain exactly how that worked in tomorrow's Digest.)

Simply put, True Wealth Real Estate is crafted to take advantage of today's changing macro environment...

The deals we find take time to play out. And that's the difference in perspective that this publication brings to the table for investors right now...

Sure, you might want to hold out hope that the Melt Up will last a little bit longer. I get that. And Steve gets that, too.

We're all in on making sure that you squeeze every last drop out of the Melt Up. But that doesn't mean you should be gambling away your retirement on meme stocks...

It's time to lock in some gains. And make sure you're growing your wealth beyond the Melt Up – long into the future.

And Melt Down or not, you're going to need to protect yourself from Uncle Sam...

Don't get me wrong... I'm not here to tell you today that the government is coming for your retirement. Or that you'll soon be forced to buy "Green New Deal" bonds with your savings.

You never truly can account for the lengths that "Big Government" will go to chip away at what you've earned.

But fear of tomorrow's calamity aside, there is a very real threat to your wealth at play right now. It's easiest to see what I mean on the following chart...

This is the seasonally adjusted "M2" money supply. As regular Digest readers know, it's how the Federal Reserve measures the amount of money sloshing around in the system.

This chart starts at 2008 to give you a bit of context. And as you might expect, it's mostly a constant ramp up from left to right. That's because the government is always adding more money to the system. (Any gold bug can tell you all about this trend.)

That said, it should be pretty darn obvious that something really dramatic happened recently. Look at the far-right side of the chart... The money supply roared in 2020.

You can also see clearly that this didn't happen during the 2008 recovery. The government spent a lot of money then, too... but nothing like we're seeing today.

Uncle Sam has the country on an intravenous cash drip. And that wild jump in money sloshing around the system is still growing.

We're now on Round 3 of the 2020 and 2021 bouts of government stimulus. The Fed is buying debt like it's going out of fashion. And it doesn't appear that any end is in sight.

Like it or not, we can't avoid the basic economics of what's happening...

Inflation isn't just a boogeyman. It's the unavoidable economic reality of our actions.

The money supply has grown tremendously. Wages are being raised legislatively and by natural market forces. And the Fed has slammed interest rates as low as possible.

Everything about this episode is geared toward inflation. President Joe Biden's administration is looking to heat up the economy. And so is the Fed.

Climbing wages and a faster-moving job market will feel like a win for consumers. But that perceived victory comes with a cost...

We're already starting to see the effects of it. Home prices are on the rise. And in most of the world, food prices are rising, too.

Don't expect this trend to end anytime soon...

The Fed has changed its inflation target math to allow the economy to run hotter than ever before. And despite a bit of bond market turbulence, Fed Chairman Jerome Powell has reiterated the central bank's commitment to keeping its foot on this economic gas pedal.

That makes holding cash incredibly risky today. Each dollar added to the money supply dilutes the worth of the dollars in circulation.

Even worse, the market is winding up for a full-blown retail frenzy. And a lot of the evidence we have says we're already there.

So what should you do with your wealth if not cash or stocks?

This is the perfect long-term setup for real estate...

You might not be personally ready to call the end of the Melt Up. That's understandable.

I know I want to get every last bit out of this bull market that I can. But don't let misplaced greed cloud your vision for the long term...

Steve has an incredible track record when it comes to calling big macro moves like this. And like it or not, when we stop to examine the evidence... it's clear he's on the right track again.

Fortunately, we have a tool designed to take advantage of these market conditions. Real estate investments can exploit today's artificially depressed rates. And the inflationary pressure we're seeing is only going to juice returns on hard assets in the years ahead.

Now is not the time to step aside. Rather, it's the time to acknowledge the changing environment and turn our sails into the wind.

In tomorrow's Digest, I'll detail a few of the specific opportunities we've covered in True Wealth Real Estate. And I'll discuss the tremendous wealth-growing power available to sophisticated investors.

But if you've already decided that growing your wealth outside of the Melt Up is for you...

And if you already want to lock in years of market-beating returns...

You can cut to the front of the line right now.

You see, Steve and I reached out to our sales team to craft a special offer to join True Wealth Real Estate immediately... This is the first promotion we've run on this highly exclusive product since our launch last June. And because the publication targets sophisticated investors, we've set up a group of folks who can explain the product in detail.

We've put all the specifics together in one place right here. But even better, you don't need to sit through a long sales pitch or read 10,000 words to hear why it's great for you...

If you're interested, you can simply call 800-758-7648 during regular business hours (weekdays from 9 a.m. to 5 p.m. Eastern time). Our team will be glad to answer any questions you have about how to get in on future True Wealth Real Estate opportunities.

New 52-week highs (as of 3/17/21): American Financial (AFG), Liberty Braves Group (BATRA), Siren Nasdaq NexGen Economy Fund (BLCN), Blackstone Mortgage Trust (BXMT), Corteva (CTVA), Dropbox (DBX), Dow (DOW), Formula One Group (FWONA), Intel (INTC), iShares U.S. Home Construction Fund (ITB), Lennar (LEN), LGI Homes (LGIH), Liberty SiriusXM Group (LSXMA), MakeMyTrip (MMYT), Annaly Capital (NLY), Oshkosh (OSK), Invesco S&P 500 BuyWrite Fund (PBP), PowerFleet (PWFL), ProShares Ultra S&P 500 Fund (SSO), Seagate Technology (STX), Texas Pacific Land Trust (TPL), Travelers (TRV), Vanguard S&P 500 Fund (VOO), and Vanguard Short-Term Inflation-Protected Securities Index Fund (VTIP).

In today's mailbag, thoughts on Steve's Wednesday Digest about real estate... and more feedback on the American Rescue Plan and how to really save the economy. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. As a reminder... we can't provide individual investment advice, but we do read every note.

"No one can stop the ship 'America' from sinking. The best you can do is to have your own lifeboat. A real lifeboat is way beyond the reach of all but a small group of wealthy Americans. The rest of us will have no choice but to go down with the ship. In my opinion, Stansberry's mission should be to mitigate the pain. I think Steve is following this mission by helping people profit from the Melt Up and by warning people how to avoid devastation in the Melt Down." – Paid-up subscriber Antonio S.

"I am a few months short of 79. I never made big money until the last 10 to 15 years – again not high-end. I have been in the market since the early 70s. I have owned investment real estate since the early 80s. I still work part-time from home and generate a six-figure income. Between the income from the real estate, Social Security, and a small pension and income from my business I have never touched one dime of my portfolio and I have no debt but a small mortgage on my personal home. Balance – keep busy and productive – is the key." – Paid-up subscriber Frank Z.

"It's troubling that the rescue plan includes both direct payments AND increased unemployment benefits. IF you lost your job you would receive the increased unemployment benefit, so why do you need the direct payment? If you didn't lose your job then why do you need either? It's frustrating that the rhetoric used to support this bill included lifting children from poverty. But what happens to those children when the one-time payment is gone?" – Paid-up subscriber Jon G.

"I have worked for the same company for the last 22 years. We can't find people who want to come to work in our factories. Many folks have decided they can do as well or better financially by staying home on unemployment and government handouts. This bill is a ruinous proposition. The joy and pride of accomplishment is lost when sitting on the couch watching 'Harry & Meghan' whining about their difficult lives. What a mixed-up world and interesting times we live in. Clearly our government believes we are incapable of greatness." – Paid-up subscriber Dennis B.

"Appears to be a horrible waste of money, which we don't have. I live in a Southern state in an area of relatively low income. Jobs are available, above minimum wage, for anyone who can pass a drug screen test. Every plant in town and area is advertising for workers and have been for months. Some folks prefer to live from government social programs. This act will further perpetuate this. Most of this appears to be waste!" – Paid-up subscriber John S.

"Giving people free money to pay their bills only treats the symptoms of their dilemma. The cause of their dilemma is people need jobs to earn a decent living to pay their bills. If the private sector can't create enough jobs, then the government needs to create jobs so people can earn a living instead of giving away more free money.

"Resurrect the old WPA [Works Progress Administration] and CCC [Civilian Conservation Corps in the Great Depression]. Put people to work again instead of just giving away free money and let people EARN it." – Paid-up subscriber Brad R.

"I say get rid of all Income Tax both personal and corporate. Get rid of the Federal Reserve Corp. Unleash the economy. Fund the federal government by the Treasury creating the money like the Fed does now. Limit federal spending to say 10-15% of the GDP. If resulting inflation results in the rest of the world moving away from the U.S. $ as the global currency, that means the govt. is spending too much. This way not only U.S. citizens pay the secret tax of inflation but everyone in the world that uses our currency will help pay the inflation tax. Again, if people around the globe move away from U.S. currency, the government is spending too much." – Paid-up subscriber Mick G.

"The last Administration had some good ideas and some really bad ideas!

"Getting hospitals to publish their negotiated procedure payments with Insurance companies was a good idea. Just look at the crazy wide differences in prices across providers and across the country. How can a knee replacement cost vary by 5 to 10 times from area to area or across providers in an area?

"Rolling back EPA mileage for vehicle manufacturers did not do much. Most automakers are rushing into EV and hybrid vehicles because that is where the market is headed. EV vehicles have way fewer parts and you do not have to get EPA approval for the engine! Electric generating companies are switching from coal to natural gas because natural gas generation is more efficient and the fuel cost less than diesel or coal. Economics and profitability will decline the coal industry to just making steel.

"I am rich and do not get any of the funds. Cutting my tax helped me a lot more than the hour wage worker even without COVID. While many of your readers and Republicans say this latest COVID relief bill has pork, I also know a lot of lower income people among my family and friends that can really use the money. They are not starving, but their kids need new clothes and they are just scraping by. The businesses that employ them are almost broke and the last relief funds kept them going.

"I expect that many of your subscribers are more like me than my sister who lives on Social Security and the $3,000 a month I send her. Her relief check went into her savings so she can weather the next unexpected disaster she might encounter. We can easily afford to pay a bit more in taxes to help our Country get past this 'perfect storm.'" – Paid-up subscriber Peter F.

"Hello, I am a Registered Dental Hygienist by trade and have only been out of work five weeks, last April, due to the governor of my state of Colorado shutting me down. I do not need this money that I may possibly receive. I do not think it is the bill that will 'Rescue' us. I did not listen to the readers of the bill for long on [TV], but felt that those people in Congress knew they were voting for much more money to go to other questionable places, just like the last one.

"I fear what will happen when all of this baseless money turns to just worthless paper. I am not very knowledgeable about economics but do know we can't keep doing this. As a 65-year-old working grandmother, I think more about what my grandchildren and the America they will inherit. Scary." – Paid-up subscriber Catherine G.

Good investing,

Vic Lederman Jacksonville, Florida March 18, 2021

P.S. If you haven't seen it yet, I also strongly encourage you to check out Steve's latest Melt Down warning. It doesn't matter if you've never bought a single one of his Melt Up recommendations... If you have any money invested in stocks today, this is a must-see presentation.