The Next Boom Could Be Starting Now
Taking a break from the 'Melt Up'... Signs of life in commodities... The next boom could be starting now... Sjug nails another call...
We've spent a lot of time talking about stocks and the 'Melt Up' lately...
And for good reason: As our colleague Steve Sjuggerud has explained many times, the largest gains of a bull market often come at the very end. More important, history suggests most stocks are likely to be "dead money" for years or even decades once the "Melt Down" begins.
Folks who turn bearish too soon could miss out on the last great chance to make money in stocks in a generation.
Of course, that doesn't mean there won't be other opportunities for contrarian investors. And elsewhere in the market, we're already seeing signs that a new bull market could be starting.
This 'left for dead' asset class is quietly moving higher again...
Since bottoming in late June, the Bloomberg Commodity Index – which tracks nearly two dozen commodities across energy, grains, precious metals, industrial metals, and more – is up nearly 11%.
But the index, considered the benchmark for the global commodities market, has picked up steam lately, with about half of those gains coming over just the last three weeks alone.
This rally should come as no surprise to regular Digest readers...
As we pointed out in the June 7 Digest – just weeks before this index bottomed – the relationship between stocks and commodities had reached an historic extreme...
As we noted at the time, commodities had only been this cheap relative to stocks two other times in the last 50 years. And in both cases, commodities dramatically outperformed stocks over the next several years.
The first was just before President Nixon took the U.S. dollar off the gold standard in the early 1970s. As you may recall, inflation skyrocketed, and commodity prices surged to absurd new highs over the next several years.
The second was just before the last "Melt Up" in stocks during the dot-com boom. What many folks don't realize is that many commodities actually bottomed more than a year before the stock market finally peaked. And again, they trounced the stock market over the next several years.
Longtime Digest readers know that commodities are notoriously cyclical...
They go through massive booms and busts. As we often say, catch one of these big cycles at the wrong time, and you'll lose a fortune. Catch one early, and you may never have to work again.
The recent broad-based rally in commodity prices suggests that we may be in the early stages of another multiyear boom.
'Sjug' agrees...
In fact, he has been calling for this for nearly two years. Back in March 2016, Steve told his True Wealth subscribers to buy the "Masters of the Universe" in commodities.
In that issue, Steve noted that a classic "bad to less bad" opportunity could be taking shape. At the time, the entire global mining sector was starting to move higher. And major miners Rio Tinto (RIO) and BHP Billiton (BHP) were leading the way. As Steve put it (emphasis added)...
When the stock prices of the global mining giants get going, triple-digit gains aren't just possible... they're normal.
This could be the beginning of the next "up cycle" in global mining stocks – which have been good for hundreds-of-percent gains in the past...
This is a fantastic "bad to less bad" opportunity. We don't need to see good news from the Masters of the Universe. They've been in terrible shape for years. And everyone knows it.
All we need to see is a slight shift in sentiment... for things to go from bad to less bad. And I think we have that, based on the recent price action.
His favorite "one click" way to benefit from the trend was the iShares MSCI Global Metals & Mining Producers Fund (PICK). Rio Tinto and BHP Billiton are among its top holdings, along with other Masters of the Universe like Freeport-McMoRan (FCX), whose massive Grasberg mine is one of the world's largest copper mines.
You can likely guess what's happened since...
Just as Steve predicted, PICK has continued its uptrend. As you can see from the following chart, these companies have quietly moved higher as things have gone from bad to less bad in the sector...
True Wealth subscribers who followed Steve's advice are sitting on gains of 90% so far. But like us, he believes the upcycle in commodities is likely just getting started... and that mining stocks have plenty of room to run from here.
We know you're probably sick of hearing us brag about Steve's track record by now...
But it's hard to ignore: 18 of the 23 open recommendations in the True Wealth portfolio are in positive territory today... 14 are up double digits... and the average gain is 28.8%, as of yesterday's close.
Frankly, we should be charging thousands of dollars per year for access to Steve's True Wealth recommendations. Instead, he insists on keeping the price low to help everyday individual investors grow their wealth safely.
Learn more about a risk-free trial subscription to True Wealth today right here.
One last note before we sign off for the week...
If you missed last night's special event with TradeStops founder Dr. Richard Smith, you aren't out of luck.
Richard has prepared a short presentation summarizing the remarkable research he shared with attendees last night... including how you could make three to four times more money – while taking less risk – in the same Stansberry Research recommendations you already own. It sounds too good to be true, but Richard has the data to prove it.
Click here to watch Richard's presentation – or read a full-text transcript, if preferred – and see for yourself.
New 52-week highs (as of 1/4/18): AMETEK (AME), Amazon (AMZN), American Express (AXP), iShares MSCI BRIC Fund (BKF), Berkshire Hathaway (BRK-B), Morgan Stanley China A Share Fund (CAF), Central Fund of Canada (CEF), Global X China Financials Fund (CHIX), First Trust Nasdaq Cybersecurity Fund (CIBR), WisdomTree Emerging Markets High Dividend Fund (DEM), WisdomTree Japan Hedged Equity Fund (DXJ), WisdomTree Japan Hedged SmallCap Equity Fund (DXJS), Emerging Markets Internet & Ecommerce Fund (EMQQ), iShares MSCI Italy Capped Fund (EWI), iShares MSCI Japan Fund (EWJ), iShares MSCI Singapore Capped Fund (EWS), Barclays ETN+ FI Enhanced Europe 50 Fund (FEEU), First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS), iShares China Large-Cap Fund (FXI), Corning (GLW), Alphabet (GOOGL), ETFMG Prime Mobile Payments Fund (IPAY), iShares U.S. Aerospace and Defense Fund (ITA), iShares Transportation Average Fund (IYT), JPMorgan Chase (JPM), VanEck Vectors Coal Fund (KOL), KraneShares CSI China Internet Fund (KWEB), Lockheed Martin (LMT), iShares MSCI China Index Fund (MCHI), Microsoft (MSFT), Nutrien (NTR), Overstock (OSTK), Adams Natural Resources Fund (PEO), ProShares Ultra Technology Fund (ROM), ProShares Ultra Health Care Fund (RXL), Sandstorm Gold (SAND), VanEck Vectors Steel Fund (SLX), iShares MSCI India Small-Cap Fund (SMIN), ProShares Ultra S&P 500 Fund (SSO), Steel Dynamics (STLD), VF Corporation (VFC), ProShares Ultra FTSE China 50 Fund (XPP), and Direxion Daily FTSE China Bull 3X Fund (YINN).
In today's mailbag: More on your 2017 results... confusion about a bitcoin "recommendation"... and a question from a new subscriber. What's on your mind? Let us know at feedback@stansberryresearch.com.
"If every year is like 2017, we all should dance in the streets. I followed Sjug for the most part, and as you know, the China ride has been a thing of joy. Bought some I Heart bonds on your recommendation, and after some scary times, they seem to be working as you prophesied. I will clear about 40% including interest... In short if you guys can keep being smart, I can continue to keep my wife happy.
"Porter, I cried when I read about your dog, I have a yellow and love him to death, I feel your pain. Get a new one fast, we have done it 5 times, it is the only way to lessen the sick feeling. See you at the Bellagio this fall." – Paid-up Stansberry Alliance member Lyle Ratner
"I'm a longtime very well satisfied subscriber. You've really me helped a lot. I know every once in a while, you ask how we've done with certain investments and with certain of your newsletters. I'll have to admit I probably haven't responded to those inquires.
"For the most part the reason is I've got so many things going on with your recommendations that I can't really respond with exact accuracy. I'm just going to say that you guys are the best group I've ever used for my investment choices. Maybe someday I'll take a closer look at your Total Portfolio product. Also TradeStops is helpful in tracking my investments. I've never really gotten to know TradeStops as thoroughly as I should. I'm not the greatest on the computer. I'm too busy wheeling and dealing and trying to keep up with recommendations.
"Porter I'm really sorry about the passing on of your dog. He's probably doing just fine where [he] is now. From your email he seemed to be a very calm people oriented dog. I saw his picture in your email. I volunteer for The Lighthouse for the blind, many [of] the service dogs for the blind are Labs they're smart, calm and very relaxed in around people.
"To tell you how good my investments have done, my wife and I were able to make a five-figure investment anonymous (via charitable trust) donation to Guide Dogs for the Blind. It was a great feeling doing so. A great organization and a win-win for dogs and people. To you and all of your writers please keep up the excellent work." – Paid-up subscriber B.M.
Brill comment: Thank you for the kind words. And yes... as an existing TradeStops subscriber, you owe it to yourself to take a look at all the incredible features Richard and his team have added over the past couple of years. TradeStops can do so much more for you than simply tracking your investments... It has really become a complete portfolio management system.
And to those of you who aren't yet TradeStops subscribers, we urge you to check out his brand-new presentation to see what you're missing. You can watch it (or read a transcript) right here.
"Hi, I have not emailed before but I have a question about one of your recommendations. [Bitcoin Investment Trust (GBTC)] is recommended as a way to invest in Bitcoin. I have read and confirmed with a Fidelity representative that the amount of bitcoin held in GBTC is much less than the total market value of GBTC. Obviously, this could become big a problem if liquidation was required. Do you have any insight on this situation? Maybe, if it is true you might, as I have, reconsider this investment recommendation." – Paid-up subscriber Keith Penney
Brill comment: Keith, we're not sure what recommendation you're referencing. We've never recommended buying GBTC. In fact, we've warned readers to stay away for exactly the reason you mention, among others.
Several bitcoin exchange-traded funds are reportedly in development now (though it's not known when – or if – regulators will approve them). But for now, there are no good ways to buy bitcoin or any other cryptocurrency through your brokerage account. If you want to speculate on these assets, your best bet is to buy them directly through an exchange.
"Hi there, I've been a member for a couple months in Stansberry's Investment Advisory, and more recently in True Wealth and Retirement Millionaire. I love all of the info and have put a lot of recommendations into motion.
"That being said, I'm a little confused as to which of the model portfolios I should follow. It seems they are all very different and I'm not sure if I'm supposed to follow one or do a mix of every model portfolio.
"The other question is how do I know when it is a good time to buy the stocks in the model portfolios? Only when there is a BUY noted? I am guessing I should not be buying any that are HOLDS until there is a BUY signal indicated? Any advice is appreciated. Thank you!" – Paid-up subscriber Eric M.
Brill comment: Welcome aboard, Eric. Regarding your first question, we're prohibited from providing individual investment advice, so we can't tell you exactly what to do. But all three of our flagship publications you currently receive have excellent long-term track records. So long as you follow our general advice about proper asset allocation, conservative position sizing, and trailing stop losses, you can't go wrong with any of them.
Some of our subscribers find the investment philosophy of one or more of our analysts resonates more strongly with them than others, and choose to follow their recommendations almost exclusively. Others pick and choose from across several – or in the case of our lifetime Stansberry Alliance members, all – of our publications. It's really up to you.
That said, if you'd like more guidance on setting up a balanced and well-diversified portfolio, we urge you to take a look at our Stansberry Portfolio Solutions product. We launched this new product last year to take all the guesswork out of this process, and make it simple, easy, and completely foolproof to invest like a professional.
If you're interested in learning more, stay tuned for more information. We'll be opening Stansberry Portfolio Solutions to new members later this month.
Regards,
Justin Brill
Baltimore, Maryland
January 5, 2018