The Only Investment Idea Nobody Is Thinking About
How I've learned to think... Readers respond to my speculative advice... Nearly everything is a speculation today... Two paths to catastrophic losses... The only thing nobody's thinking about...
Editor's note: As we mentioned yesterday, we're about ready to debut our annual Stansberry Research Report Card, where we evaluate our editors' portfolio performance. We'll publish Part I tomorrow, so regular Friday essayist Dan Ferris is writing today's Digest. Enjoy...
I (Dan Ferris) still wonder about my No. 1 recommendation of all time...
In the January 2018 issue of my Extreme Value newsletter, I recommended a natural-resources-focused asset manager called Sprott (SII).
Right in the headline, I called it "My Brand-New, No. 1 Recommendation."
Back then, I thought it had the potential to rise 20-fold. And my conviction in this stock was unshakable.
I had known members of the management team for years. I understood the business well and thought it was a wonderful, cash-gushing, asset-light way to put gold, silver, and other commodities in your portfolio. It was clearly trading at a cyclically low and objectively very cheap valuation.
Subscribers who took my advice back then are up 584% as of yesterday's close (including dividends).
But I've never stopped thinking about how I might be wrong about Sprott.
This is just the way I've learned to think over the years...
Investments and recommendations are like new relationships. You have to keep assessing them over time.
I still see upside in Sprott (though it's above the buy-up-to price that I recommend in Extreme Value), and in gold in general. But as I always do, I'm watching for the end of today's bull market in gold...
Maybe gold's recent history contains a clue...
Gold's last bull run saw its price explode from $252 per ounce in August 1999 to $1,900 in September 2011 – a 652% move in about 12 years.
The current bull market started with the December 2015 bottom of about $1,051 per ounce. It's making new highs lately, trading north of $4,800 per ounce – a roughly 10-year, 360% bull run.
If the current market rhymes with the last one, it's long in the tooth but not done yet.
History never repeats precisely, but using the last bull run to gauge the current one would suggest gold peaking around $7,900 an ounce in December 2027. The 1970s gold bull was shorter, but the gains were much bigger.
In the table below, I include the details on gold's last two bull markets. I also include the current bull market (through Tuesday) and how it would look if it tracked with the 1999-to-2011 run. Take a look...
Now, I hope you don't think that I believe I have any idea how long the current gold bull will last. I absolutely don't. But that's my point.
It's OK to be worried about an asset's falling price. But because you don't know how long it will go up, you don't want your worries to keep you out of the market.
With gold, I could panic and sell... But I could miss the opportunity to turn five-bagger moves in gold stocks into 20-bagger moves near the peak.
I suspect the next couple years will be volatile either way. I've said before that ballistic price movements don't resolve by going sideways. They resolve by plummeting.
Gold declining 30% to 40% before resuming its uptrend would rhyme with similar moves during gold's last two bull runs. A 50% correction would seem quite normal to me.
I leave it to you to determine how much volatility you're willing to tolerate and what kind of risk control works best for you...
But even hanging around to that full 50% drawdown, if you're up more than 100%, you could still come out ahead if gold's run rhymes with previous episodes. And subscribers who followed my advice are up much more than that already.
I'm thinking about Sprott because of last week's recommendation to speculate on the AI boom...
In the January 16 Digest, I said that President Donald Trump is pushing trillions of dollars into U.S. stocks. It's an environment that will reward some extra risk-taking, at least when done intelligently.
Some regular readers noted that my speculative push goes against the bearishness they've heard from me over the years.
Gary D. e-mailed us and said:
Dear Mystery Speculative Investor -
Who are you, and what have you done with the real Dan Ferris?
Other folks were happy to hear me essentially giving them permission to speculate on AI-related stocks. Ken K. wrote:
WOW... just WOW!!!!!
What a warm, insightful and welcome post!
Thanks so much for being the man you are and also confirming my recent decision to renew. I have and continue to take your council to heart.
Thank you!!
But just as I've spent eight years trying to poke holes in my own Sprott recommendation... I've spent the past week wondering if I just "called the top" of the AI bull market.
In other words, is my bullishness a contrarian indicator that's pointing to trouble?
I don't think so... And nor is it incompatible with my long-standing advice.
Here's what I've tried to emphasize for years...
Whenever you invest in something like a booming gold market or an AI speculation, the key point is to manage your risk...
The gold bull market or the AI boom could end next week or next decade. I have no idea. And neither does anybody else. It's a worthless exercise to pretend you do.
What's effective is to use risk controls like stop losses and appropriate position sizes.
Some younger folks might take on a "YOLO" mentality and decide that if they lose everything, they won't be mad about it. But that's only true of the most wild-eyed speculators (and, really, even they wouldn't be thrilled to lose everything). It's a novice gambler's mentality.
Successful gamblers know what successful market speculators know: how to control risk.
So you see, it's that sense of confident optimism after an epic bull run like we've seen in gold and other asset classes over the past couple years that always makes me question the status quo – including and especially my own beliefs and assumptions.
I believe in having strong convictions lightly held. That is, I like to invest in and recommend ideas I'm confident about, but I'm always ready to admit when I'm wrong, cut losses, and move on.
Managing risk is especially important when you're trying to capture big, speculative gains.
At a recent meeting that included many Stansberry Research colleagues plus folks from some of our corporate affiliates, I noticed a theme...
Roughly a dozen analysts spoke at our meeting. And several of them believe the market will rise for another one to three years, followed by a steep correction or a sideways market.
For much of the past three years, I said that same thing. I wrote many times of elevated market valuations and the potential for a steep bear market followed by a decade or more of sideways market action. I provided plenty of historical examples for all of it.
But when you predict something for three years that doesn't come to fruition, you have to admit that being way too early is indistinguishable from being wrong.
I also learned that understanding how the stock market has behaved over long periods of time in the past has some value... but not as much as you'd like. It's OK to believe it gives you one way to think about the general market action of the next decade or so. But it's mostly worthless for your current capital-allocation purposes.
You don't look at the market and say, "I think it'll go up for three years then sideways for 20, so I'm going to use enormous leverage and buy the S&P 500, then sell it in exactly three years and go short stocks until they bottom out." That's a great way to lose everything you have in a matter of months, if not weeks.
We don't know the timelines of future market moves, big or small. So when I publish a chart like the one of the last two gold bull markets and say, "If this bull rhymes," the important thing to think about isn't the percent gain or the end date.
It's the "if."
It's the reminder that we don't know the future, so the market could easily go higher than you ever dreamed for longer than you ever imagined – just as it could crash farther and faster. You never really know.
The only certainty you'll ever have as an investor is by deciding how you'll behave.
That said, another colleague at our recent meeting put things in much simpler terms, which makes the bullish case better than anything else I heard...
He simply noticed that all different types of stocks have been soaring, from nickel miners to solar-panel makers.
When you're getting on board with stocks going up after an epic bull run, you're speculating on further gains...
You can't say stocks are cheap by any reasonable measure. They aren't.
You can't say nobody knows about AI, precious metals, base metals, uranium... and perhaps a dozen other soaring sectors. Everybody knows about them.
You can't even say, "Trump will appoint a new Federal Reserve chair who will cut rates," because there's no guarantee long-term rates will follow the path of short-term rates.
These bets have all done extremely well over the past year or so. The impulse to speculate on their continued bull runs is perfectly rational. But you must acknowledge that you're speculating. That changes things, no matter what you're buying.
For example, even if you buy a stalwart stock like Costco Wholesale (COST) or some other wonderful business, you must acknowledge that at more than 50 times earnings, it's not priced for buying and holding. It's priced for something more like, "You'd better time this right or you'll lose money." So are most stocks today.
When you buy stocks because they've gone up, you have to be ready to sell them when they stop going up...
A bullish bet on price action means you must decide at what price you'll sell.
It's so simple, but it creates an enormous problem. Nobody knows when a stock has stopped rising until its peak price has passed, erasing some or perhaps much of your speculative gains.
This risk applies to every investor who is a human being. Overstaying a gain until it becomes a loss is outdone as a human foible only by hanging on to a loss until you're back at breakeven.
Neither idea ever works. They're both just rationalizations for a total lack of discipline, which is far more common than possession of the necessary iron fortitude.
Both situations consistently lead to catastrophic losses.
Read that last sentence again. Because if you want to know the investment idea nobody is talking about right now, it's preventing catastrophic loss.
We're all convinced more easy gains lie ahead. But we could be wrong. And we should be ready to preserve gains and cut losses if we are.
All of the 200-plus traders and investors we've interviewed on the Stansberry Investor Hour podcast will tell you that you must avoid catastrophic loss first and foremost.
I can't even count the number of times I've heard expert traders tell novices something like, "The most important thing is controlling risk so you don't blow up your account." Take them at their word, and make their advice the core of your speculative trading.
So rather than reiterate how great an idea it is to speculate in a frothy bull market...
I'm reminding you this week that the No. 1 skill of all the successful speculators I've ever met is not blowing themselves up.
They follow their convictions. They buy their gold or AI stocks when their research points them there. Then, when the market turns against them, they preserve gains and cut losses with ruthless efficiency.
Speculate, but be smart about it. Use iron discipline on position sizes and stop losses. Know where you'll sell even before you buy.
And after you buy, keep thinking about how you could be wrong.
P.S. Gary D., see that? It was really me the whole time!
New 52-week highs (as of 1/21/26): Altius Minerals (ALS.TO), ASML (ASML), Atmus Filtration Technologies (ATMU), Alpha Architect 1-3 Month Box Fund (BOXX), Brady (BRC), Donaldson (DCI), DXP Enterprises (DXPE), iShares MSCI Emerging Markets ex China Fund (EMXC), EnerSys (ENS), Ero Copper (ERO), iShares MSCI South Korea Fund (EWY), Cambria Emerging Shareholder Yield Fund (EYLD), FirstCash (FCFS), Freeport-McMoRan (FCX), Comfort Systems USA (FIX), Freehold Royalties (FRU.TO), Cambria Foreign Shareholder Yield Fund (FYLD), Gilead Sciences (GILD), SPDR Gold Shares (GLD), Illumina (ILMN), KraneShares MSCI Emerging Markets ex China Index Fund (KEMX), L3Harris Technologies (LHX), Lockheed Martin (LMT), Mueller Industries (MLI), Monster Beverage (MNST), Merck (MRK), Natural Resource Partners (NRP), Nucor (NUE), Realty Income (O), Ormat Technologies (ORA), Sprott Physical Gold Trust (PHYS), Invesco Oil & Gas Services Fund (PXJ), Royal Gold (RGLD), SandRidge Energy (SD), Sprott (SII), Snap-on (SNA), Thermo Fisher Scientific (TMO), Tenaris (TS), Uranium Energy (UEC), ProShares Ultra Gold (UGL), Vale (VALE), State Street Energy Select Sector SPDR Fund (XLE), ExxonMobil (XOM), and State Street SPDR S&P Semiconductor Fund (XSD).
In today's mailbag, more on President Trump's pursuit of and "deal" with Greenland, which we covered in yesterday's Digest and was discussed in yesterday's mail, too... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"President Trump doesn't want to 'own' Greenland. It's amazing that people don't understand the needs and goals. Greenland is the strategic location between the USA and Russia... The USA and the western world need Greenland's strategic location to be a 'shield' literally and figuratively.
"The USA is the only country in a position to protect Greenland, and European countries know it. In exchange for protection, the USA should receive Rare Earth Mineral Rights. These are critical in building the defense weaponry and Golden Dome, which will actually serve all USA 'friends.'
"There's always the back and forth quibbling so countries don't lose face. And the media is deaf, dumb and blind." – Subscriber B.T.
"Cry me a river, all the Stansberry reader drama in response to Trump's comments over Greenland. Don't y'all get it yet? Trump's negotiation style is to go big and ask for it all, then the other side panics and offers something less than that and that's what Trump wanted in the beginning. He's doing it over and over and many people are still too slow to get it. Art of the deal." – Subscriber Robert N.
Good investing,
Dan Ferris
Medford, Oregon
January 22, 2026