The golden era... A top in burritos... What the Ninth Inning looks like... Bullish sign for uranium... How to get wealthy... A generous offer from Porter's mentor...
"The private-equity world is in its golden era right now," KKR & Co. co-founder Henry Kravis once said at a private-equity conference in Canada. "Stars are aligned, there is plenty of capital on one side, and you have a very receptive community of companies."
Mr. Kravis could say the same thing today... As we've noted in the Digest, private-equity firms are thriving thanks to cheap financing, willing lenders, and rising asset prices.
But Kravis didn't just make his "golden era" statement. It came in May 2007... And it marked an almost exact peak of the market. At the same time, Blackstone Group, the world's largest private-equity firm, was going public (another sign of the top).
KKR wasn't publicly traded in 2007, so take a look at shares of Blackstone to see how they performed after Kravis' boasting...
Whenever cocksure executives make absurd statements about their businesses' future prospects – typically following a meteoric rise in stock price – it's usually a sign things are getting frothy.
And today, we're seeing that toppy indicator in the "fast casual" dining arena... in particular, at the burrito chain Chipotle Mexican Grill (CMG).
In an interview with Belus Capital Advisors' Brian Sozzi yesterday, Chipotle co-CEO Monty Moran said his company and others like it will replace traditional fast-food chains like McDonald's.
"The predominant goal [for traditional fast food chains] is the cheapening of the raw ingredients, the automation of the work such that anyone could do it... so that they turn over their employees without any care for them, where it's a game of value meals and cheapening the food experience," Moran said. "That is traditional fast food, and we think that's going away," he said. "We, and others like us, will replace that."
It shows hubris to think his burrito chain (while it does boast a $21 billion market cap and $3 billion in annual revenue) will replace McDonald's and other traditional fast-food restaurants.
McDonald's is a $93 billion giant... It's the largest restaurant in the world based on number of locations. And it has a powerful and globally recognized brand.
And yes, with the markets at all-time highs, folks are willing to spend $10 or $12 on a Chipotle lunch... But when this market turns, McDonald's inexpensive options will prove more and more attractive.
We wrote more about McDonald's and the rise of the fast-casual restaurant in Tuesday's Digest.
Mind you, we're not saying the stock market top is in...
In today's DailyWealth, Steve Sjuggerud wrote a great essay about what stock market tops feel like... and tells a story from when he started out as a broker selling Hong Kong stocks. You can read the full essay here.
But in short, Steve concluded:
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We're bullish on uranium, the commodity used to produce nuclear power. It may be the most hated commodity in the world. And in the highly cyclical natural resource sector, you have to buy when things are gloomy.
And things couldn't get much worse for uranium. (We'll share Rick Rule's thoughts on this in a bit.) But we should at least see a short-term price spike after Cameco, the world's largest uranium producer, announced it was closing two uranium mines...
Cameco announced it was stopping production at its McArthur River mine and Key Lake mill operations in Canada in response to receiving a strike notice. About 535 unionized employees could lose their jobs.
McArthur River is the world's largest uranium mine and accounts for about 10% of global supply. Cameco doesn't expect the shutdowns to disrupt its deliveries to customers, as there's a current oversupply of uranium.
The spot price for uranium is currently $31 a pound.
In the July 11 Digest Premium, natural resource expert Rick Rule explained why prices for uranium have to rise...
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If you joined us at our Los Angeles conference last weekend, you saw surfing legend Laird Hamilton talk about his passion and past exploits with Steve Sjuggerud and Porter. You also saw an incredible video of Laird surfing the famed chopu wave in Fiji.
Porter wanted to share this short video of Laird surfing in Malibu from a couple days ago... He "shoots the pier" twice.
Check it out here.
Also, we've just opened up our "Early Bird" offer for our Nashville conference on October 18. Tickets are only $250... And when they sell out, we're raising the price.
In Nashville, you'll hear from former Congressman and presidential candidate Ron Paul. Currency expert Jim Rickards, author of The Death of Money, is also speaking... as are Porter, Extreme Value editor Dan Ferris, and many other excellent minds. If you'd like to reserve your spot in Nashville, please e-mail us at events@stansberryresearch.com.
We spend almost all of our time at Stansberry Research bringing you the best investment ideas we find across the globe... But as we've said numerous times, it's very hard to get rich simply by investing in stocks. Investing in stocks is actually a way to protect and slowly build your wealth over years.
But before you get started in the stock market, you have to understand certain principles...
You have to understand asset allocation, position sizing, and trailing stops. More important, you have to learn how to save money. (After all, you can't make money in the market if you don't have any cash to start.)
You have to learn how to increase your income at your job, generate alternative income streams, and intelligently spread your assets across a variety of categories. These aren't the most popular ideas to broadcast to the world, but they are the most useful.
And we are fortunate to have partnered with an expert in these things... someone who has amassed an eight-figure fortune following these common-sense guides to building wealth. He also happens to be a New York Times bestselling author and Porter's mentor in business.
I'm talking about Mark Ford from our corporate affiliate The Palm Beach Letter. Mark is an entrepreneur, author, and coach... He has taught thousands of people how to get wealthy... And he has personally mentored dozens of super-successful businesspeople.
S&A Editor in Chief Brian Hunt, one of the most well-read people on our staff, had this to say about Mark and his teachings (if you know Hunt, you know his praise is hard-earned):
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Mark believes anyone can become rich if they follow some simple rules... Specifically, Mark says anyone who follows his instructions can add seven figures to his personal net worth in seven years or less – without touching stocks. And you can get started with as little as several hundred dollars.
Plus, Mark has outlined dozens of ways you can start supplementing your existing income.
They don't teach common sense wealth-building concepts in school. Most people go their whole lives not knowing basic concepts, like compounding and intelligent portfolio diversification. Thus, they always struggle with money... and complain about rich people.
It's only after someone understands Mark's concepts – and ones we share in the Digest – that a stock-selection newsletter can be truly useful.
If you'd like to learn more about Mark and his wealth-building techniques, you're in luck...
Over the past two weeks, Mark has shared a large amount of proprietary content from his Wealth Builders Club with S&A subscribers. And during that time, Mark also extended a generous offer to S&A subscribers to join his Wealth Builders Club... It's a way to try the club with zero risk. And he's giving you a valuable bonus as part of the deal.
Already, nearly a thousand of your fellow subscribers have taken Mark up on his offer. But if you're interested, you must act quickly... Mark's offer is only good until midnight tonight.
You can learn more here...
New 52-week highs (as of 8/27/14): Apple (AAPL), Brookfield Asset Management (BAM), Bank of Montreal (BAM), ProShares Ultra MSCI Emerging Markets Fund (EET), Enterprise Products Partners (EPD), Energy Transfer Equity (ETE), KLA-Tencor (KLAC), ONEOK (OKE), PowerShares S&P 500 BuyWrite Fund (PBP), PowerShares QQQ Fund (QQQ), ProShares Ultra Health Care Fund (RXL), ProShares Ultra 20+ Year Treasury Fund (UBT), and W.R. Berkley (WRB).
In today's mailbag, a subscriber shares an indicator that he believes is similar to Jeff Clark's "Mother Indicator." Send your comments to feedback@stansberryresearch.com.
"I think I potentially have a great indicator for you.
"I convinced a friend of mine and his wife to buy physical silver and storage it for safe keeping around 4 years ago. He just sent me an e-mail not three days back saying 'Hello my friend! Today my wife and I were thinking of you sipping wine on our terrace. Because today we sold our silver! hahaha. It was fun to try but it's not for me, man. Regards from Panama!'
"On top of that my own family, who I also convinced to buy metals some four years ago, are starting to question whether they should sell their physical gold and silver. I am literally twisting their arms and giving long speeches in order for them to stay put.
"Looks like to me that everybody is throwing in the towel? As you all famously say, when there's no one left to sell, there's only one way for prices to go." – Paid-up subscriber Daniel Werner.
Regards,
Sean Goldsmith
August 28, 2014
Jim Cramer: The qualities of a good CEO...
In his newest book, CNBC host Jim Cramer named the 21 best CEOs of publicly traded U.S. companies.
In today's Digest Premium, Cramer reveals some of their names... and the traits that separate them from the pack...
To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.
Jim Cramer: The qualities of a good CEO...
Editor's note: In his newest book, CNBC host Jim Cramer named the 21 best CEOs of publicly traded U.S. companies... In today's Digest Premium – adapted from a recent episode of the James Altucher Show – Cramer reveals some of their names... and the traits that separate them from the pack...
We've always felt that a coach or manager in sports is really important. But we just kind of assume that it doesn't really matter who runs a company like clothing manufacturer VF Corp. You bet it does. Does it really matter who runs Boeing? It absolutely does.
In my newest book, Get Rich Carefully, I was looking for people who just say, "I don't care about the Federal Reserve. I don't care about Obama. I don't care what's going on. I am making you money with the team I have. And if that team isn't good enough, I'll find a new team. If I'm not good enough, I'll step down."
The CEOs I write about in my book – in a chapter called "The Bankable 21" about the 21 best CEOs – all have that level of conviction. I'm sending this book to CEOs and saying, "Do this. Just be like these guys. This is what they're doing for you. They're slaves to the shareholders."
In Get Rich Carefully, I give many qualities of a good CEO. Here are my top three...
First, never lose heart. I asked Boeing CEO James McNerney, "Were you ever worried about your money?" He said no. In other words, have conviction about what you do.
Second, treat your employees incredibly well. They are the ones who will be doing the heavy lifting for you.
The third thing that I like about Manny Chirico and Eric Wiseman, CEOs of clothing manufacturers PVH and VF Corp, respectively, is that these people have built these franchises or taken it to the next level... But they never stop thinking about how to make money for you. By the way, they don't ever say, "If I just keep my head down..." They care about the stock. They care about it passionately.
The CEOs who want to fix the balance sheet first – like former Ford Motor CEO Alan Mulally – before they do anything next, these guys want profitable growth for all. They want to make money for their employees and their shareholders. They all have that ethos. It's almost like they all got some memo that the rest of us didn't get.
Their conviction is that they feel like they need to make their stock price go higher by hard work and by outthinking people. For example, take fast-food chain Popeyes. I mean, who cares, right? Does it really matter what Popeyes does? It's fried chicken. But CEO Cheryl Bachelder comes into the company – which had been a horrendous company – and she just says, "Alright, here are the pillars of thought. Here's what we're going to do. Here's how we're going to make the company better. You, who works as a fry cook, you're going to own a store. And you're going to believe in the company."
Some of these people are fry cooks at Popeyes and now they own franchises and they're making $2 million. And that's what she's about: Empowering the workers, empowering the customers... and most importantly, getting that stock price up.
– Jim Cramer
Jim Cramer: The qualities of a good CEO...
In his newest book, CNBC host Jim Cramer named the 21 best CEOs of publicly traded U.S. companies.
In today's Digest Premium, Cramer reveals some of their names... and the traits that separate them from the pack...
To continue reading, scroll down or click here.
Stansberry & Associates Top 10 Open Recommendations
(Top 10 highest-returning open positions across all S&A portfolios)
As of 07/21/2014
| Stock | Symbol | Buy Date | Return | Publication | Editor |
| Prestige Brands | PBH | 05/13/09 | 411.6% | Extreme Value | Ferris |
| Enterprise | EPD | 10/15/08 | 316.2% | The 12% Letter | Dyson |
| Constellation Brands | STZ | 06/02/11 | 310.5% | Extreme Value | Ferris |
| Ultra Health Care | RXL | 03/17/11 | 268.2% | True Wealth | Sjuggerud |
| Ultra Health Care | RXL | 01/04/12 | 222.2% | True Wealth Sys | Sjuggerud |
| Altria | MO | 11/19/08 | 210.2% | The 12% Letter | Dyson |
| Targa Resources | TRGP | 12/13/12 | 187.6% | SIA | Stansberry |
| Blackstone Group | BX | 11/15/12 | 179.1% | True Wealth | Sjuggerud |
| McDonald's | MCD | 11/28/06 | 178.1% | The 12% Letter | Dyson |
| Automatic Data Proc | ADP | 10/09/08 | 158.2% | Extreme Value | Ferris |
Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any S&A publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals |
| 3 | Extreme Value | Ferris |
| 3 | The 12% Letter | Dyson |
| 2 | True Wealth | Sjuggerud |
| 1 | True Wealth Sys | Sjuggerud |
| 1 | SIA | Stansberry |