The Big Short's Eisman Is Bearish Today
We're 'live' from Las Vegas... Highlights from day one of the 2016 Stansberry Conference... More on Porter's 'Big Trade'... The Big Short's Eisman is bearish today... The four biggest mistakes you could be making now... Steve Sjuggerud's 'backdoor' China opportunity... How to get immediate access to the best ideas from Vegas...
The 2016 Stansberry Conference kicked off yesterday morning with one of Porter's craziest opening sketches yet.
You really have to see it to believe it... But we can tell you it involved a cameo by Steve Sjuggerud, a watering can, and a certain presidential candidate who once hosted a popular reality TV show.
Then it was down to business...
In his leadoff presentation, Porter shared his latest thoughts on the mounting problems in the bond markets. As regular Digest readers know, for the first time in history, a significant portion of sovereign and corporate debt carries a negative yield... meaning that investors are paying for the "privilege" of loaning their money to indebted governments and businesses alike.
Porter reminded folks that the coming default cycle – what he has called "the greatest legal transfer of wealth in history" – will create incredible opportunities for those who are willing to step outside their comfort zones and invest in distressed bonds. He also noted that even though these troubles haven't yet begun in earnest, Stansberry's Credit Opportunities subscribers are already doing very well...
He and his team have recommended eight bonds since they launched the service last November. These bonds are showing average annualized returns of 46% so far, compared with the 5% gains in the stock market over the same period.
Porter then revealed the brand-new "Big Trade" strategy he and his team have been working for the past four months...
As he discussed in the September 9 Digest, there are two ways to profit from credit-market troubles.
You can search for the "needles in the haystack" – those distressed bonds that are mispriced relative to their chance of default – which is exactly what Stansberry's Credit Opportunities is designed to do.
But you can also profit from the short side, and for some folks, this may make more sense. As he explained in that Digest...
What about regular investors? What about folks without the capital or the sophistication or the patience to deal in the bond market, where getting a position filled can take months and dozens of phone calls? And... why only trade this mania from the long side? Why bother with finding the needles in the haystack? Why not simply do what Templeton did and sell short the bonds you know will fail?
That's a great question. And I've spent a year thinking about the right and safe way to make gains that are big enough to cover the risks involved. The answer isn't trying to short individual bonds. Or even bond exchange-traded funds. The right way is a wholly different kind of strategy.
Yesterday, conference attendees were the first to hear all about this new strategy, including several potential trade opportunities.
Of course, it wouldn't be fair to attendees to share all the details here, but we can tell you this strategy will be targeting over-leveraged companies with low margins, huge capital requirements, high debt levels, and weak credit. We can also tell you Porter believes the returns from this strategy could be absolutely incredible. As Porter put it from the stage...
Many big-name companies have poor credit ratings now. One big downgrade could set the whole thing off like a wildfire. You can position yourself now for huge potential gains... as much as 29 times your money. It will be like shooting fish in a barrel...
Again, Porter will be writing more about this strategy in Friday's Digest. In the meantime, interested readers can get all the details immediately by watching the high-resolution replay of Porter's presentation via our Stansberry Conference online streaming all-access pass right here.
One of the most highly anticipated presentations of the day came from financial analyst Steve Eisman, who was the subject of the bestselling novel and Oscar-winning film, The Big Short.
Eisman – whose character was played in the movie by Steve Carell – talked about how he identified the opportunity in betting against subprime mortgages, a story you're no doubt familiar with by now.
But what stood out to us was that Eisman's current market outlook sounded awfully similar to what we've been discussing here in the Digest. In particular, he highlighted concerns of a slowdown in the global economy, potential consequences of the recent "Brexit" vote, and growing troubles in the European banking system.
Eisman concluded his presentation with a question-and-answer session, where Porter took the chance to ask Eisman if the growth in the high-yield bond market was a bubble. Eisman quickly retorted, "The whole fixed-income market is a bubble."
Steve Eisman presents at the 2016 Stansberry Conference.
Another notable presentation came from our longtime friend Meb Faber, Chief Investment Officer of Cambria Investment Management. If you're not familiar, Meb is a quantitative analyst, or "quant," and one of the smartest guys we know.
Meb made a strong case that we are now much closer to the end of this long bull market than to the beginning. He also shared the four biggest mistakes most investors are making today – including setting unrealistic expectations, having an extreme "home-country bias," paying too much in fees, and not having a "plan" – and he shared some simple steps folks can take today to avoid them.
Perhaps the most compelling presentation came from our colleague Dr. Steve Sjuggerud, who shared more details about his brand-new "fat pitch" investment opportunity...
Steve recently returned from a trip to China, and he is incredibly bullish on a handful of specific opportunities he discovered there. In fact, we haven't seen him this excited about a new investment opportunity in years.
If you attended last Wednesday's live event – or took advantage of our free replay and transcript– you know Steve shared the full name and ticker symbol of one of his favorite ways to profit from this situation live "on the air." Yesterday, Steve shared an even better way to own this company – a "backdoor" way to own these same shares at a 31% discount, right here in the U.S. – an idea he has not revealed anywhere else.
Steve reveals his latest "fat pitch" investment opportunity.
Of course, this is just a sample of the great presentations from the first day of the Stansberry Conference...
Attendees also heard from Stansberry Asset Management CEO and co-founder Erez Kalir, Asian investment guru Peter Churchouse, resource legend Rick Rule, Motion Picture Corporation of America CEO Brad Krevoy, Extreme Value editor Dan Ferris, and many more.
As we often mention, one of the biggest benefits of the Stansberry Conferences is getting to hear exclusive investment ideas like these before anyone else.
And while it's too late to attend this year's event in person, you're not out of luck...
You can still get immediate access to high-resolution replays of all of this year's great speakers, presentations, and ideas – including Porter's new "Big Trade" and Steve's "backdoor" China opportunity – with our online streaming all-access pass. Either one of these ideas alone could pay for your ticket to this event many times over.
Better yet, you can watch and re-watch these replays as often as you'd like for a full 30 days. Click here to sign up.
And again, if you're joining us in Vegas this week (or have been streaming live from home), we'd love to get your feedback. Send your thoughts and comments to feedback@stansberryresearch.com.
New 52-week highs (as of 9/19/16): CME Group (CME).
In today's mailbag, a longtime subscriber weighs in on last Wednesday's live event... and another shares his thoughts on the economy. Send your notes to feedback@stansberryresearch.com.
"Every time something like this comes out, and I follow the recommendations and allocations, I make money... Every time I hear genuine excitement in Porter's and Steve's voices [like I did last Wednesday night] and act on it, I make money. Every time it just does not feel right and I do something, regardless of how I feel, I make money. It might take a bit of time, a week, a month, a year, two years (the timing is usually longer than you think), I make money. Please keep up the good work. Keep providing the wisdom and insights.
"I follow putting cash aside for such opportunities, and allocated +15% to the recommendations. I am a lifetime member of TradeStops, I follow stop losses diligently, and will now rebuild my cash position by acting on my stop losses going forward. I also look for differing and opposing opinions, then make my own decisions and take full responsibility for them. Please keep these types of situations coming when they happen, and bringing them to my attention, I plan on retiring within the next 3-5 years. I need all the good help I can get. :):):)" – Paid-up subscriber Brent P.
"Good article today guys, I can definitely confirm that the economy is slowing. This week we have been exhibiting at a huge trade show that we do every other year in Chicago, the show is IMTS (International Manufacturing and Technology Show). Many of my distributors are telling me that their phones are dead, email is slow... major manufacturers in the area are slow... CAT is slow, John Deere is slow, the auto industry is slowing down... the only industry still on fire is the gun manufacturing industry... thanks Obama for your help on that one. Don't believe the FED's cooked up numbers, the economy is slowing and heading down." – Paid-up subscriber SAC
Regards,
Justin Brill
Las Vegas, Nevada
September 20, 2016
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