The middle innings of 'one of the longest bull markets in history'...

A new record for the U.S. oil market...

"Fracking" for shale oil has changed the U.S. energy landscape.

In today's Digest Premium, Matt Badiali, editor of the S&A Resource Report, shares a recent milestone for U.S. oil that is super-bullish for the U.S. economy...

To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.

The middle innings of 'one of the longest bull markets in history'... New highs for biotech and health care... Hershey's capital efficiency... Tesla's new high... Two billionaires are bullish on housing... Stoning an adulterer in Central Park... Sjug's crystal ball...

 "This could be only the middle innings of what could be one of the longest bull markets in history."

JPMorgan chief U.S. equity strategist Tom Lee was bullish on CNBC this morning. "There is a lot of firepower to fuel this rally. There is a lot of cash on the sidelines. Consumers have delivered," he said.

 Lee said a "three-week buyers strike" ended last Thursday... Now we have long investors and hedge funds coming back into the market. He also said yesterday's statement from Federal Reserve Chair Janet Yellen showed we'd have continuity, which comforted the markets.

 And right now, there's no denying that the trend is up...

Biotech stocks hit a new all-time high yesterday. Biotech is one of the great "boom and bust" sectors. When these stocks enter a bull market, they soar. (They can also bust just as spectacularly.) And right now, they're booming...

Remember... biotech stocks returned 66% last year – more than double the S&P 500's gain.

 Steve originally recommended the iShares Nasdaq Biotech Fund (IBB) in January 2012. True Wealth readers are already up 124% on the trade. But based on history, he thinks biotech has more room to run. You can read his thoughts here.

 Health care stocks also hit a new high yesterday. Steve recommended the ProShares Ultra Health Care Fund (RXL) in the April 2011 True Wealth. Shares were cheap and hated... And we were in the midst of the "Bernanke Asset Bubble" – the stock-price swoon following former Fed Chairman Ben Bernanke's quantitative easing.

True Wealth readers are up 231% on RXL.

 Even chocolate is making new highs...

In December 2007, Porter recommended readers buy chocolate maker Hershey in what he called the "best 'no risk' opportunity ever." He believed it would be one of the best-performing stocks he would ever recommend in his career...

Porter's research on Hershey was some of his earliest work on "capital efficiency." Capital efficiency is Porter's way of judging how efficiently a company produces cash. He looks for companies that generate large amounts of cash without requiring large reinvestments in the business. The best of these companies use that cash to reward shareholders through share buybacks and dividends. 

As a side note, the Stansberry's Investment Advisory research team keeps a running list of the market's most capital-efficient companies as part of their supplementary Stansberry Data service (which is available only for S&A Alliance members and Porter's lifetime subscribers). To make the list, a company needs to return at least 36% of its gross profits to shareholders, post returns greater than 10% on its assets, and trade for less than 10-11 times earnings before interest, taxes, depreciation, and amortization.

 This is how Hershey stacked up (from Porter's December 2007 issue)...

 Since the original recommendation, Hershey has raised its dividend every year... from $0.30 per quarter to $0.49 per quarter – a 63% increase. Porter's subscribers are up 177% on the recommendation.

 As the saying goes, "a rising tide lifts all boats." And there are plenty of stocks trading at new highs today that we believe don't deserve to be there.

Take electric-car manufacturer Tesla, for example...

We've written plenty about Tesla's problems. (For a good review, read the November 7 Digest.) In short, the company is losing cash... its cars catch on fire... and it's catching heat from auto dealerships around the country.

 Still, we never officially shorted the company. We like to short three types of companies: "frauds," obsolete firms, and companies with unsustainable debt loads. Tesla didn't technically fit into any of those categories... And as regular readers know, we don't short stocks based on a company's valuation... Because as we've seen with Tesla, absurd valuations can always become more absurd...

 We've also noted the recent strength in homebuilders. The iShares U.S. Home Construction Fund (ITB) holds a basket of homebuilder stocks. It was the only sector to hit a multi-month high last Friday. For more on homebuilder strength and rising home prices across the country, click here.

Low interest rates and lots of cash on the sidelines are bullish news for home prices... And two of the smartest hedge-fund managers in the game both recently took large positions in the housing sector. Howard Marks, a legend who runs Oaktree Capital, recently disclosed a 17.9% stake – or 5.4 million shares – in door manufacturer Masonite.

And Leon Cooperman's Omega Advisors disclosed a 6% stake in New Residential Investment – more than 15.2 million shares. Omega increased its position by more than 9.5 million shares from the third quarter of 2013. The company is a real estate investment trust (REIT) focused on residential properties. An affiliate of hedge-fund giant Fortress Investment Group manages it.

 You can read why Steve is still bullish on real estate – and why he says you should buy more – in the January 17 DailyWealth.

 Episode 3 of The James Altucher Show is now available on iTunes.

James interviews bestselling author A.J. Jacobs. Jacobs shares tips on how to improve your business, become healthier, and live better. He personally betters himself through experimentation, which he documents and turns into books.

 In one book, he set out to become the smartest man in the world. Among other things, he read the entire Encyclopedia Britannica (44 million words).

For another book, The Year of Living Biblically, Jacobs lived an entire year according to the Bible... He literally followed the hundreds of rules outlined in the Bible. And he discusses how he actually stoned an adulterer in New York City's Central Park.

If you haven't already, sign up for James' radio show for free on iTunes by clicking here.

 New 52-week highs (as of 2/11/14): Becton-Dickinson (BDX), ProShares Ultra Biotechnology Fund (BIB), Dominion Resources (D), Enterprise Products Partners (EPD), Hershey (HSY), iShares Biotechnology Fund (IBB), SPDR International Health Care Fund (IRY), ProShares Ultra Health Care Fund (RXL), Targa Resources (TRGP), Union Pacific (UNP), and Walgreens (WAG).

 Has Steve Sjuggerud's "crystal ball" worked for you recently? Let us know at feedback@stansberryresearch.com.

 "I am not sure if I am doing this right or wrong – but every time I have opened the S&A Short Report and have gone to purchase the options – they are already higher than what is listed in the report. And I have not been able to purchase them Am I getting this too late – or what is going on? Please advise how to use this correctly or I will have to ask for a refund on what I spent." – Paid-up subscriber Frances Terry Mixer

Goldsmith comment: We're sorry you're having problems getting into Jeff's picks, Frances. Every Tuesday at 10 a.m. Eastern time, Jeff sends the latest issue of the S&A Short Report to his subscribers. We post these issues (and any e-mail updates) to our website. But because options are often less liquid than stocks, sometimes his recommendations result in the option price quickly moving out of buy range. Jeff regularly tells readers that if the options jump out of buy range, give the trade a day or two to come back down again.

 "So in True Wealth Systems, Dr. Sjuggerud predicted that gold miners and emerging markets would be the last phase (innings 7, 8, and 9) of the Bernanke (now Yellen) Asset Bubble. The human crystal ball. How does he do it? Some pretty damn good data analysis and market experience (and perspective from other smart guys). I want to thank you, Porter for befriending Steve and years ago persuading him to join you in your nascent financial publishing enterprise. Yours is a friendship that has and will benefit your subscribers far above and beyond their membership fees. Thank you from the bottom of my bank account!" – Paid-up subscriber LAF

Regards,

Sean Goldsmith 
Miami Beach, Florida 
February 12, 2014

A new record for the U.S. oil market...

Editor's note: Today's Digest Premium features insight from S&A Resource Report editor Matt Badiali. He has taken notice of the U.S. oil boom, which has continued to blow through milestones lately...

 As you probably know, there is a massive surge in oil production in the U.S. right now. It's a recent phenomenon...

Prior to 2008, oil production in the U.S. was in decline. On the other hand, horizontal drilling and hydraulic-fracturing (or "fracking") techniques blew open natural gas production. Then a massive crash in natural gas prices pushed exploration companies to apply new drilling and exploration techniques to oil.

The success of that technology exceeded all expectations. We've seen this from the booming oil production in places like the Eagle Ford and Marcellus shales.

 U.S. oil production climbed 12% from 2008 to 2011, rising from 5 million barrels per day to 5.6 million barrels per day.

The latest data, from last November, showed that the U.S. produced an astonishing 7.8 million barrels of oil per day – a 39% increase over just the past two years. And it's the highest volume of oil production since 1988. We've reversed 25 years of declines in just four years of shale exploration.

 There is another milestone I'm even more impressed with: net oil imports.

Even with our newfound oil production, we still import crude oil. Our imports peaked in 2006 at around 14.7 million barrels per day. Since then, they have fallen 40%, to 8.8 million barrels per day in the last week of January.

Meanwhile, our exports soared. This is a confusing idea for most folks because exporting oil is illegal. But the industry is allowed to pass raw crude oil through a refinery, call it refined product, and export it that way. And the U.S. is exporting a ton of it.

 Let's look at net imports – or imports minus exports. Last month, the U.S. hit its lowest volume (4.6 million barrels per day) since the Energy Information Administration started keeping records in 1991.

 The shale revolution continues to produce massive amounts of oil. That's bullish for the U.S. economy. And because we're exporting so much refined product, it is bearish for European refiners... Fifteen of them have closed in the past five years.

– Matt Badiali

Editor's note: In October, Matt told his S&A Resource Report subscribers about three companies poised to benefit from this long-term trend. His picks are up an average of 35% in just four months.

And in his February issue, out last week, Matt recommended another high-upside oil stock that he believes could lead subscribers to 124% gains. You can gain access to this pick with a 100% risk-free subscription to the S&A Resource Report. Learn more about a subscription by clicking here. (You won't have to sit through a long promotional video.)

A new record for the U.S. oil market...

"Fracking" for shale oil has changed the U.S. energy landscape.

In today's Digest Premium, Matt Badiali, editor of the S&A Resource Report, shares a recent milestone for U.S. oil that is super-bullish for the U.S. economy...

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 02/11/2014

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.

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