The most consistently successful income strategy of the next decade...
The most consistently successful income strategy of the next decade... Imitators will follow, but you heard it here first... The greatest technological trend of our age...
In today's Digest... a unique income strategy you've never considered... one that should pay out reliable 12%-plus yields for at least the next decade.
That's not a typo. And it's not a wild marketing pitch.
What we'll cover today is going to be the most consistently successful income strategy in the stock market over the coming decade.
I hope I have your attention. Because this strategy – which not one in 10,000 individual investors is using right now – will put the single biggest technological trend of our time to work for you, every single day.
You won't read about this idea in the mainstream press. No broker is talking about it.
Imitators will follow... but you heard it here first.
This strategy basically allows you to collect a royalty almost every time someone makes a phone call, searches the Internet, reads an e-mail, sends a text message, uses Google Maps, buys a song on Apple's iTunes digital media store, or watches a video on the website YouTube.
You know the use of "smart" phones, "smart cars," and computers has exploded in the past 10 years. It's growing every day. Today, we'll cover a "slam dunk" way to generate personal wealth from it.
Don't worry if you're not a computer expert. This doesn't require any computer or gadget expertise.
What's this trend? And how do you collect these "royalties"?
We'll get to the income in a moment...
But first, let's talk about the "Internet of Things."
By now, you've likely heard of – or used yourself – new technological innovations like self-driving cars, refrigerators that order groceries, homes that know to turn off the lights, and health-monitoring devices that send vital signs right to your doctor.
This is stuff of sci-fi movies just a decade ago.
Now, for many people, it's just everyday life.
Nearly everything we use – our cars, our phones, our appliances, our homes – is becoming interconnected.
Our old, "dumb" phones and cars have been replaced by "smart" ones.
You can talk to them. They can talk to you. They can talk to each other.
For example, right now, you could search for good, local restaurants by speaking into your phone. You might program your home's security system with your iPad. You might adjust your home's thermostat from controls in your car. Your wristband might be transmitting your heart rate to an "app" on your phone.
These are all examples of what people are calling the "Internet of Things." Everyday devices are being plugged into the Internet. It works hand in glove with the explosion of smartphones and portable tablet computers.
Everything is getting connected.
It is the biggest, most important technological trend of our time.
This trend is creating incredible demand for telecommunications bandwidth. It demands faster Wi-Fi connections... faster home cable speeds... more Internet "hotspots." It's creating more demand for the devices that use them.
In a recent report, research firm Gartner noted that global smartphone sales increased 42% from 2012 to 2013. For the first time, smartphone sales outnumbered "regular phone" sales.
The sales numbers are even more impressive in developing markets. Gartner notes that smartphone sales in India increased 166.8% from the fourth quarter of 2012 to the fourth quarter of 2013. Smartphone sales in China increased 86% in 2013.
Gartner estimates that the number of non-PC, tablet, and smartphone "Internet of Things" connected units will grow to 26 billion in 2020. It's a nearly 30-fold increase than the number in 2009.
Networking giant Cisco notes that 43% of U.S. homes have four or more online devices. It expects the amount of bandwidth consumption per home to grow to four times the current amount by 2015. Cisco expects global Internet traffic to increase threefold over the next five years.
Again, the growth in demand from developing markets is even more impressive. Research firm TeleGeography expects broadband demand in Africa to grow an average of 51% per year until 2019.
This trend is also creating incredible demand for data storage. All the pictures, movies, television shows, and songs you buy must be digitally stored. The information generated by our cars, homes, and appliances must be stored. The data companies collect on their customers must be stored. It must be sifted, filtered, and analyzed.
This is part of the "Big Data" trend you've likely heard of... which is also called "storing things on the cloud."
Research firm IDC says global revenue from public cloud services totaled more than $21.5 billion in 2010 and will reach $72.9 billion by 2015.
Like any big technological innovation, the Internet of Things will create lots of millionaires and billionaires. It will produce huge stock-market winners.
The strategy we're about to cover will allow the "average guy" to get his share of these profits. It will allow investors to reliably produce double-digit income streams on their stock portfolios. And as we noted earlier, it requires no expertise with iPads, computers, or smartphones.
This strategy is centered on a group of stocks we've labeled "Digital Utilities."
Readers of Dr. David Eifrig's ("Doc," as we call him around the office) services are very familiar with this idea. He and I (Brian Hunt) coined this term years ago.
The idea is a play on the income-producing power of traditional utility stocks... like power, natural gas, and water providers.
Because it doesn't make sense to have a dozen different water or electricity providers, states and municipalities grant monopoly status to traditional utilities. In return, utilities accept regulations that limit their ability to raise prices. Essentially, states and towns assure themselves reliable power in exchange for guaranteeing the companies' profits.
Utilities' unique business position has historically made them terrific income investments. Their dividend payments were so secure that advisors almost always included them in retirees' portfolios.
As "Doc" writes, developments in computers, networks, and cellular phones have created a new kind of utility...
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To give you an example of this idea, Doc asks readers to consider two of his favorite Digital Utilities: Intel and Microsoft.
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Intel and Microsoft aren't the only "utility-like" cash-generating tech dominators...
EMC Corp. is the world's largest data-storage provider. When companies need to store data (video files, audio files, documents, e-mails), EMC is the "go to" provider. Most companies don't have the resources or the expertise to deal with the immense amount of data they need to store. EMC does. It is the "dominator" of data storage.
Last year, EMC generated $23 billion in sales. That's up more than $5 billion from 2010. As you can guess, the demand for data storage can only go one way in the coming years. The "Internet of Things" will see to that.
Like Intel and Microsoft, EMC uses its dominant position to generate lots of cash and direct it to shareholders.
Cisco is another elite "Digital Utility." It's the dominant provider of "Internet plumbing" gear. Last year, Cisco generated $48 billion in sales... up $8 billion from 2010.
Cisco also pays one of the market's most reliable 3%-plus dividends. It's another company that is a sure beneficiary of the "Internet of Things."
We could go on... but you get the idea. It's not complicated. As we buy more smartphones and more tablets... as we watch more streaming videos... as we connect more things to the Internet, businesses that support the infrastructure will enjoy a giant "tailwind" for a long, long time.
There are around a dozen or so large technology businesses that dominate their industries. Their entrenched positions, massive research & development budgets, and vast resources have created big "moats" around their business.
Now that smartphones and the "Internet of Things" are creating an explosion of demand for their services, their near-monopoly-like profits will only grow... and shareholders stand to make great money in "Digital Utilities."
Regular Digital Utility shareholders should do well over the coming years.
But to generate truly large amounts of income – which should amount to 12%-plus annual yields – investors need to acquire a certain skillset.
It's a skillset we've helped thousands of regular folks learn... to the great benefit of their investment accounts. We've received an incredible amount of thankful feedback for our work in this area. It's an idea we want every single S&A subscriber to understand. We want our parents to understand it. We want our children to understand it. It has led to the greatest performance in investment newsletter history.
Knowing about this idea – and using it – will provide you with a HUGE advantage over regular investors.
To generate the largest amount of investment income from the "Internet of Things" and Digital Utilities, you must harness the income-producing power of selling stock options.
You've probably heard our plea before. But it's such a useful skill that we'll make the plea again. It's the strategy behind our most successful service, Doc Eifrig's Retirement Trader. Doc has used options-selling strategies to produce an incredible track record: He has closed 174 out of 176 positions for a profit.
We've discussed Doc's strategy and track record many times in the Digest. What we haven't done much is highlight how Doc has structured 68 winning positions around Digital Utility stocks like Intel, Microsoft, and EMC. Every single one has been a winner. And the average gain for those positions was 9.6% (usually with holding periods of just a few months).
Doc has mastered the art of analyzing Digital Utility stocks, determining when their shares represent great values, and applying his income-producing strategy. He's a master of timing these positions for maximum income and maximum safety.
The incredible returns being generated in Retirement Trader show that my claim at the start of today's Digest is no prediction. It's happening right now. And the giant "Internet of Things" trend will ensure this strategy pays like a broken slot machine for many, many years.
If you're a Retirement Trader subscriber, congratulations. You've taken steps to broaden your investor "toolbox." You've acquired an extremely valuable skill. Look to make more money from the "Internet of Things" in the coming years.
If you haven't learned these techniques, we urge you to begin soon. To ensure as many people as possible start learning, we've made it as easy as possible for you to take the first step...
We've published a book that explains how to use this technique step-by-step. And on page 87, it also lists the 25 ideal businesses for this technique. That means you can eliminate at least 90% of the publicly traded stocks from your investment radar.
Typically, we charge around $3,000 a year to teach people how to use this strategy. This high price ensures that we only attract folks who are serious about learning how to make money with options and are willing to get started immediately.
But because we are a business that survives on the quality of our ideas... we want as many people as possible to have the chance to benefit from this technique.
We want as many people as possible to learn the strategy Doc has used to produce a track record of 174 out of 176 winning closed trade recommendations in his research service.
We've been in business for more than a decade, and we have never seen anyone come close to generating this kind of track record. It is near perfect.
As Porter puts it:
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As I mentioned, Doc typically charges $3,000 to teach people how to use this strategy.
But in our new book, High Income Retirement, he explains how this income technique works, step-by-step, and which companies are ideal to use this strategy on to safely generate extra income.
Now to be clear... Doc doesn't give out any specific buy recommendations in the book. He reserves that information for his Retirement Trader subscribers.
But in High Income Retirement, he covers everything you need to know without requiring you to subscribe to any expensive trading services.
To my knowledge, no other book on the market teaches you how to use these techniques and identifies which companies to use them on.
High Income Retirement costs just $29, including shipping. I'm confident that when you read about Doc's options strategies... and start using them to collect regular income for your retirement... you'll agree that the price is an absolute bargain.
Reader Charlie W. has been using Doc's technique to generate consistent income:
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Today, the details of this income technique can be yours for just $29.
But if, after reading High Income Retirement, you don't think it is worth every penny you've paid, you can send it back to us within the first 30 days for a full refund. You can learn more about this book – and why the ideas in it are so controversial – right here. (This does not go to a long video.)
New 52-week highs (as of 6/5/14): Alcoa (AA), Apple (AAPL), American Financial Group (AFG), American Homes 4 Rent (AMH), Calpine (CPN), Carrizo Oil & Gas (CRZO), CVS Caremark (CVS), Discover Financial Services (DFS), ProShares Ultra Oil & Gas Fund (DIG), Energy Transfer Equity (ETE), iShares MSCI Germany Fund (EWG), SPDR Euro Stoxx 50 Fund (FEZ), 1st United Bancorp (FUBC), Cambria Foreign Shareholder Yield Fund (FYLD), WisdomTree Europe Hedged Equity Fund (HEDJ), iShares Dow Jones U.S. Insurance Fund (IAK), SPDR International Health Care Fund (IRY), Johnson & Johnson (JNJ), Leggett & Platt (LEG), 3M (MMM), AllianzGI Equity & Convertible Income Fund (NIE), PowerShares S&P 500 BuyWrite Portfolio Fund (PBP), PowerShares Buyback Achievers Fund (PKW), PowerShares QQQ Trust (QQQ), ProShares Ultra Technology Fund (ROM), RPM International (RPM), Range Resources (RRC), Sabine Royalty Trust (SBR), Market Vectors India Small-Cap Fund (SCIF), Superior Energy Services (SPN), ProShares Ultra S&P 500 Fund (SSO), Cambria Shareholder Yield Fund (SYLD), Targa Resources (TRGP), Travelers (TRV), Union Pacific (UNP), Invesco High Income Trust Fund (VLT), Walgreens (WAG), W.R. Berkley (WRB), and Alleghany (Y).
In today's mailbag... a few podcast fans send their thoughts. If you haven't listened to any of our episodes, you can find them at the Stansberry Radio website. And as always, we encourage your e-mail to feedback@stansberryresearch.com.
"First of all, I want to tell you 'thank you.' I'm 32 years old and have been following your newsletters for the past 2 1/2 years... and listen to all your Podcasts. I find myself constantly angered by the idiots around me so thank you for being my oasis in a dry land.
"I have made a lot of money following S&A newsletters over the last few years, around $300,000. This is money I could never have dreamed of, since I grew up in a victim culture.
"Please know that there are those of us out here who really respect your honesty and who rely on you for our financial guidance. Please keep doing what you do for our sake and don't stop because there are idiots in the world. I almost killed myself because of the rampant idiocy, but now I know life is worth doing for those worthy of it.
"One last thing, tell 'Brabhsy' we're grateful for him too and love his ability to get Porter into a tirade. Haha!" – Paid-up subscriber Justin
"I've just started listening to your podcast, and just wanted to write to let you know how great I'm finding it.
"I'm a West Australian 24 year old Biochemist graduate working in oil analysis, with essentially no economics background. Despite this, I'm really enjoying listening to yourselves (and Frank in his podcast) ranting about today's social and economic issues.
"I'm trying to teach myself the basics of economics and general financial literacy including making the most of my money.
"The content in your podcasts really motivates me to make the most of everyday, and I'm considering heading back to university to change my career." – Paid-up subscriber Will Bawden
Regards,
Brian Hunt
Delray Beach, Florida
June 6, 2014
The most powerful motivator to make people act...
In today's Digest Premium, Stephen Dubner, co-author of the popular book Freakonomics, explains how people react to incentives... And what is most likely to cause people's actions.
To subscribe to Digest Premium and receive today's analysis, click here.
The most powerful motivator to make people act...
Editor's note: Podcast host James Altucher invited Stephen Dubner, one of the authors of the popular book Freakonomics, to be a guest on episode 20 of his James Altucher Show.
Today's Digest Premium is adapted from Dubner's answer to a question from James about how to create effective incentives for people…
It's really easy and popular to argue that moral incentives are paramount in modern society. In other words, there's a baseline assumption – or maybe a hope – that people will do the right thing or the pro-social thing because it is the right thing or the pro-social thing. I think in a perfect world a lot of us would like that to happen. The evidence suggests that just isn't so.
For example, the evidence suggests that if you ask [if someone should] conserve energy because it's good for the environment or… will leave the planet in better shape for their grandchildren... they'll say, "Yes. That's exactly why I would like to conserve energy."
If you ask them, "Would you like to conserve energy because it will save you money?" People might say, "Well, that would be OK, but the environment is more expensive."
Then, if you ask them, "Would you like to conserve energy because other people in your neighborhood are conserving energy?" They'll say, "I'm not a pack animal. That's not what makes me behave the way I behave. I behave the way I behave because of what I think is right and true and so on."
That's what people say when you ask them about behaviors. They claim that the moral or social incentives are the most powerful. In this case – with energy consumption – they say it's more powerful than financial, and certainly more powerful than a herd mentality incentive.
However… to generate some real data… some research was done by the wonderful psychologist Robert Cialdini and some colleagues in California. They did exactly this. They did a phone survey in California asking people what would lead them to use fans in summer more than air conditioning.
Again, they gave them the options of moral and social incentives versus financial and herd mentality. The overwhelming choice – the most popular – was moral incentive and social incentive. That's what's going to make us act or change our behavior. That's what economists call your "declared preferences" – what you say is true or how you say you'll behave or invest or vote or whatnot.
Then, you get into "revealed preferences." That's what people actually do...
In some cases in life, there isn't much of a gap between declared preferences and revealed preferences. Voting, for instance. Polling for voting on big elections has gotten much, much better over the years. Pollsters have figured out how to limit the gap between what people say they'll do and how they'll vote by asking better questions, getting better data, zeroing in on the right people to ask the questions of, and so on.
But there are some realms in life where the gap between declared and revealed preferences is huge. One of them, as Cialdini and his colleagues found, was energy consumption.
The researchers went into these neighborhoods and hung up signs on every house, but there were different versions of the signs. This was designed as an experiment. Some said, "Hey, homeowner, you should use fans in summer more because it's good for the environment and so many fewer tons of greenhouse gasses will be emitted if you do that."
Others said, "Hey, homeowner, you should use less energy because you'll save some money on your bill." Others said, "Hey, homeowner, you should use fans this summer because other people in your neighborhood are thinking about doing the same thing." The herd mentality.
It turns out that the only one of those suggested incentives that lowered energy consumption was the herd mentality one.
When it comes to actual action and revealed preferences, the one that worked, crazily enough, was the herd mentality. None of us would want to admit that we act as we do and that we make decisions as we do because "everybody else is doing it," but there's a lot of evidence in various realms of science that suggest that's actually true.
– James Dubner
Editor's note: If you enjoyed today's excerpt, you can listen to the full episode of James' interview with Stephen Dubner here.
Also, James recently recorded one of his most controversial shows... He debunked the long-held belief that children should go to college. It's a compelling argument. And he's giving away a free report, "James Altucher's 50 Alternatives to College," when you sign up for his show. You can do so here...
The most powerful motivator to make people act...
In today's Digest Premium, Stephen Dubner, co-author of the popular book Freakonomics, explains how people react to incentives... And what is most likely to cause people's actions.
To continue reading, scroll down or click here.