The Best Way to Save $2 Trillion

Johnson & Johnson gets a $1 billion deal... 'Too much, too late'... The best way to save $2 trillion... Long-term thinking is hard to do... Porter's guidance... A bullish Whitney Tilson... Take note of the 'Waffle House Index'...

For the greater good, we hope Johnson & Johnson (JNJ) finds a way...

We're talking about the news today that the medical-goods manufacturer has agreed with the U.S. government on a $1 billion deal to increase the production of Johnson & Johnson's "coronavirus vaccine candidate."

As Stansberry NewsWire analyst Daniel Smoot wrote this morning, citing a Reuters report...

Through the deal, JNJ said the vaccine could be ready for human trials by September. And by early 2021, the vaccine could be made available for emergency use.

Daniel also shared the following quote from Johnson & Johnson Chairman and CEO Alex Gorsky during his appearance on financial-news network CNBC this morning...

We have very good early indicators that not only can we depend on this to be a safe vaccine, but also one that will ultimately be effective based on all the early testing and modeling we've been doing.

This is a bit of a moonshot for J&J going forward, but it's one we feel is very, very important for us to be doing at this period in time.

The government will pay $421 million to Johnson & Johnson as part of the deal. And the company, which is not a major vaccine maker, said it plans to build a new production facility in the U.S.

Johnson & Johnson's share price finished the day up 8%, closing at $133.01 per share.

But forgive us for thinking, 'Too much, too late...'

Stansberry Venture Technology editor Dave Lashmet told us in an e-mail today...

We won't know if this vaccine works for a year... [It's] utterly untested. But dedicating manufacturing capability has to mean something.

This development is, of course, better than nothing. But if we're all still social-distancing a year from now... well, we don't want to think about it.

The problem is that 'we' – as in the world – often easily forget...

Two coronaviruses similar to COVID-19 – severe acute respiratory syndrome ("SARS") and Middle East respiratory syndrome ("MERS") – first appeared in 2002 and 2012, respectively...

And like COVID-19, these diseases were also attributed to sick animals... with their infections making the jump to humans.

For lack of a better phrase, "bat viruses" have been known for a while. They've been around long enough that there's a so-called "Bat Woman" scientist in China who was able to discover the origins of COVID-19 in roughly a week back in early January.

The publication Scientific American shared the "Bat Woman" story recently...

The genomic sequence of the virus – now officially called SARS-CoV-2 because it is related to the SARS pathogen – was 96 percent identical to that of a coronavirus the researchers had identified in horseshoe bats...

But vaccines still don't exist for SARS or MERS because, as Dave told us, development of them took five years and didn't advance because the diseases "burned out."

This reminds us, how often we forget... and move on to the "next thing" too soon.

People can – and will – debate how various leaders have handled responding and preparing for this novel coronavirus... and if those decisions made things better or worse. But everything starts at the source...

And how costly forgetting about that can be – as in more than 35,000 lives so far, $2 trillion in Federal Reserve stimulus (and possibly more printing to come), a bear market, and everyday life basically turning upside down.

For these reasons and more, we'd be happy if COVID-19 burns out, too...

But even if it does, the best and cheapest way to prevent "this" from happening again is for companies like Johnson & Johnson to work on potential treatments once the crisis... and $1 billion deals with the government... go away, too. We can't think of a better way to save $2 trillion.

As the old saying goes, "Proper prevention prevents poor performance." Or in a quote attributed to Hall of Fame basketball coach John Wooden, "The true test of a man's character is what he does when no one is watching."

In other words, the best thing to do is never get in this situation to begin with.

This is long-term thinking, of course, which is hard to do...

The same can be said about investing...

I (Corey McLaughlin) have recently heard about countless studies that conclude the pain of losses outweighs the pleasure we humans feel about the wins...

With this in mind, how painful it must be for a business owner to deal with the fact that his billings went from around $60 million to $3.5 million in just the last few weeks, as one our subscribers shares with us in today's mailbag.

At the same time, we received a note from a subscriber who ran his own 10-year "back test" on our founder Porter Stansberry's recent stock recommendations in our brand-new Stansberry's Forever Portfolio... and reported that most of the buys had triple-digit returns, including some as high as 600%-plus.

How's that for perspective?

This is exactly what Porter hoped to bring to readers with his list of 'GOATs'...

That's short for "The Greatest Stocks of All-Time," as he said during his free presentation last week.

We can't imagine the national-record fall into a bear market has been pleasant for many investors over the past few months...

But as Porter told viewers, if you can take a breath, pause, and consider the long term, the opportunities to invest now – particularly in high-quality, capital-efficient companies – haven't been this good since the wake of the financial crisis last decade... or even way back in the era of the Great Depression.

We've showed this a couple of ways over the past few weeks here and here.

Forget about timing "the bottom" to the exact day, hour, or minute. Again, if you're a long-term investor, it's critical to think "big" picture...

History shows that what goes down, will come up. And Porter sees extraordinarily cheap prices in the market for some of the best companies in the world. As he told viewers in his free presentation...

What you want to do is not just begin to buy stocks, but focus intently on buying stocks that you can comfortably hold forever.

Once the scope and duration of the virus's spread in the U.S. and prevention measures become clearer, Porter said the market will start to come back.

And once that begins, Porter thinks the recovery could be quick and send the major U.S. indexes to new highs before the end of the year.

Be sure to check out the replay of Porter's free event right here if you missed it.

Our friend Whitney Tilson is on a similar page as Porter...

Whitney, the founder of our corporate affiliate Empire Financial Research, also recently put together a free presentation to share his thoughts on the market today.

And we can safely tell you... He's also a buyer today. As Whitney wrote this morning in his free Empire Financial Daily e-letter...

I'm not sure I see the end of this crisis with any clarity whatsoever. What I do think I see, though, is the beginning of the end...

My increased optimism about our country and the world has important investment implications. Over the past month, I've shifted my family's total net worth (excluding the value of our only non-liquid asset, our apartment) from 15% stocks to 63%... and took that to 67% this morning.

We'd say that's bullish... Click here to watch Whitney's latest free presentation.

As for a complete rebound, we still have a way to go, according to the 'Waffle House Index'...

When will everyday life truly return to what we used to know? We see the projections, but we can't know for sure.

But we do know a reliable, if not off-the-radar, indicator to look to for confirmation...

It's informally known as the "Waffle House Index" – and last week, it went "red." Anyone who has been in the South or works for the Federal Emergency Management Agency ("FEMA") might know what we're talking about...

FEMA actually uses Waffle House restaurants – and whether they're open, closed, or offering a limited menu – to gauge the severity of a disaster in local neighborhoods.

Usually this is done in relation to a hurricane or tornado recovery. But in today's world, the number of Waffle House's 24-hour restaurants that are closed indicates the stretch of the damage from the pandemic.

Former FEMA director Craig Fugate coined the term years ago. And as this 2011 article from trade publication EHS Today explained, the chain's stores have a reputation for being prepared for anything...

If a Waffle House store is open and offering a full menu, the index is green. If it is open but serving from a limited menu, it's yellow.

When the location has been forced to close, the index is red. Because Waffle House is well-prepared for disasters... it's rare for the index to hit red.

Last week, on its social media pages, Waffle House posted this update with the hashtag #WaffleHouseIndexRed...

When the Waffle House in your neighborhood is open again, we'll know the virus is likely under control.

New 52-week highs (as of 3/27/20): none.

"I am the CEO of a 300-person business in 3 states. We are in the construction business. I believe we are a great example of a small-medium size business in the United States and what is happening out there in only two weeks. It's just math.

"January and February we billed $60M & $55M, March $29M as we were put into shelter in place in our largest market, SF Bay Area on March 16. Our billings in Chicago and Seattle continued but Seattle is now closed down for shelter in place, while Chicago rolls on as our work is considered 'essential' there.

"Unfortunately, Chicago is 5% of our total revenue, Seattle 10% and the balance in the Bay Area. Thus April billings will be $3.5M, thanks to Chicago. Keep in mind our annual net income ranges from 2-3%, the rest goes to subcontractors and the cost to run the firm. On the most basic math, our business is a 10% gross/8% cost/2% net income enterprise.

"Let me say this again 'our billings went from $55M/$60M to $3.5M' in two weeks and when one views data from China, the one potentially reliable piece of data is when they get back to work after discovering the virus. China is now 60% back to full work. That's in 120 days, so using simple math, 50% takes 105 days, 210 days to full work 100% return.

"This is what we are facing as a company, as a country. And we can't assume Chicago stays open for business too much longer as numbers increase, so we will be at zero billings at some point soon.

"Now we believe the shelter in place for the SF Bay Area and Seattle will result in a 90+/- day event and back to work mid-June/early July.

"It's been two weeks! Look at the financial carnage already happening (I realize it has been longer for the airlines and travel) but my point, there's a lot of companies in the construction business, look out, 30 days moving to 60 days, moving to 90 days, what is in store for us? Massive layoffs and bankruptcies.

"The small to medium size business impact is far beyond the $350B set aside by Congress, that number is not even close. It's just math." – Paid-up subscriber David H.

"Great to hear back from Porter and congratulations on the new Forever Portfolio. I am an Alliance Member (from Spain) since 2013 and my top stock performers (so far) have been precisely those capital efficient companies such as Hershey (HSY) and Microsoft (MSFT), so I really hope to hear from Porter more often!" – Stansberry Alliance subscriber Francisco G.

"Porter, thank you. I was a big fan and subscriber of Lewis Rukeyser until he passed in '06. He was a great man. I spent 10 years looking for someone in finance like him. When Stansberry found me in 2014, my search ended.

"I spent a year following the recommendations on paper and was convinced. We had previously lost our life savings twice. We had just started to get back on a firm financial footing in 2015 when I had a series of health challenges. Months of hospital stays and many more months of convalescence.

"Thanks to your advice, however, we were able to withdraw 20-25% of our savings each year for five years and 40% this year and we still have 45% left. I expect to be back where we were by the end of the year. We couldn't have done it without you. Thanks to the Stansberry Team!" – Paid-up subscriber Larry H.

"Porter asks his subscribers to come up with a name for up-and-coming 'GOATS.' Baby GOATS are 'kids.' I'd go with that. If you do, I'll take the list for free as compensation!" – Paid-up subscriber Mike K.

All the best,

Corey McLaughlin
Baltimore, Maryland
March 30, 2020