The Retirement Conference details are set
Before we get into the meat of today's Digest, I have a housekeeping issue to discuss... We've been working with a top New York-based firm to develop an exclusive estate-planning tool for our readers (after all, few taxes devour wealth as quickly as the estate tax). We've previously discussed this program here.
In short, using this program won't just help you avoid paying taxes on your retirement accounts... Depending on your age, this strategy could actually turn a $1 million retirement account into $2.5 million. People often accuse us of overstating these numbers. But it's no typo. You go from the government taking more than 50% of your retirement account to earning an extra $1.5 million.
We are hosting a conference next February in Miami to tell our readers about this strategy and allow them to speak directly with the creators. The cost of the conference is $1,000 (refundable if you decide to use the estate product).
If you've already expressed interest in attending the conference, you will receive the full details of the event tomorrow along with your invitation to join us. We have a limited number of spots available, and we're giving you first crack. If open spots remain after that, we will extend an invitation to other Digest readers. We're looking forward to seeing you in Miami next year.
Kudos to Jeff Clark for nailing the short-term rally in interest rates. Last month, Jeff told S&A Short Report readers Treasurys were going to fall (interest rates were going to rise). We ran the below Growth Stock Wire excerpt already this week, but it's spot on, so we're running it again...
You must bet on rising long-term interest rates. There is no easier trade in the market today. I've written about it here and here. If that's not enough, consider this my "pounding the fist on the table" moment. Interest rates are going higher. Every time rates dip down – even a little bit – is an opportunity to earn some extra spare cash.
Here's my point... Interest rates are going higher. We will not see 30-year bond yields at 3.5% again for a long, long time. So every time interest rates dip down and bond prices rise – even just a little bit – it gives traders an opportunity to enter positions and profit off the trend.
Bet on rising interest rates. It's the best wager for the next few years. – Jeff Clark, Growth Stock Wire, December 2
TBT rallied 2% today, pushing Jeff's recommended options to $4.15. Jeff locked in gains today, booking a 113% profit for Short Report readers in less than one month. His next trade could be even more profitable...
Yesterday, Jeff said the extreme bullish sentiment prompted him to add to his short book. So he's shorting the "most vulnerable" sector in the market. The bullish percent index, which measures the overbought or oversold condition of an index, for this sector is currently at 95 (80 is considered bullish; 100 is the max). Jeff says, "it's almost mathematically impossible" for things to get more bullish.
Jeff saw the same setup in this sector in January and April. Both times, the sector plunged in a matter of weeks. When the BPI was at 95 in April, the underlying index fell nearly 17% in one month. If you owned puts on the index, you would have made a fortune.
Don't miss out on this no-brainer trade again. You can sign up for Short Report here...
John Hussman is another well-respected investor who's adding to the short side. Hussman recently released a great report explaining why he's going short:
In recent weeks, the U.S. stock market has been characterized by an overvalued, overbought, overbullish, rising-yields syndrome that has historically been hostile to stocks. Last week, the situation became much more pointed. Past instances have been associated with such uniformly negative outcomes that the current situation has to be accompanied by the word "warning."
Hussman used five conditions to prove the "overvalued, overbought, overbullish, rising-yields syndrome":
1) S&P 500 more than 8% above its 52-week (exponential) average.
2) S&P 500 more than 50% above its four-year low.
3) Shiller price-to-earnings ration greater than 18.
4) 10-year Treasury yield higher than six months earlier.
5) Advisory bullishness greater than 47%, with bearishness less than 27%
Hussman notes these five conditions have been hit nine times since 1972. The smallest drop following these conditions being met was 7% in four weeks in January of this year. The biggest drop started in July 2007. The market fell 57% in 21 months. You can read Hussman's full letter here.
We agree with Hussman... It's time to be cautious. In addition to his observations, the volatility index (VIX) is nearing its lows of the past three years (meaning investors are complacent).
And the breakdown in the euro versus the dollar (it fell to less than $1.33 today) will make Treasury bonds – cash – more attractive. In other words, risk will exit the market into Treasurys. In fact, it's already happening. According to today's Wall Street Journal, China increased its Treasury holdings to the highest point in nearly a year (it remains the largest foreign holder of U.S. government debt). Japan has also loaded up on Treasurys in recent months. Its holdings are also at a record. Among all foreign investors, net purchases of U.S. Treasury notes and bonds was $23.5 billion in October, compared with net sales of $78.91 billion in September.
New Highs: Almaden Minerals (AAU), WisdomTree Japan SmallCap Fund (DFJ), PowerShares Dynamic Biotech (PBE), Automatic Data Processing (ADP), Paramount Gold & Silver (PZG), Royal Gold (RGLD), BLADEX (BLX), ConocoPhillips (COP), Alexander & Baldwin (ALEX).
Yesterday, Porter appeared on the Alex Jones radio show to discuss the "End of America." Did you hear the call? What did you think? feedback@stansberryresearch.com. (Note: The link replays the entire show. Porter's appearance begins at the 2:00 mark, about halfway through.)
And if you haven't yet watched Porter's now infamous End of America video, you can do so here...
"As a Private Wealth Alliance subscriber I was excited to hear you on The Alex Jones Show yesterday. As a first time guest on his show I thought you hit the ball out of the park. I'm sure Alex was pleased with the interview and I expect he'll want you back soon.
"As you know, AJ has a unique following of concerned patriots that are very 'awake' to world events and how MSM serves as the 'propaganda ministry' for the establishment. Getting exposure on leading alternative media should be good for you and your business.
"From a dedicated PWA subscriber and an Info-Warrior, I applaud you for taking the time to be on AJ's broadcast." – Paid-up subscriber Jim
"I enjoyed listening to you on the Alex Jones show yesterday. Although I evidently have been a subscriber for some time, I delete your info before looking at it because of the necessity of paying for the next thing in order to get the information you dangle... PLUS you sell my info to every tom/dick & harry out there... IF you make so much money in the markets, etc. – WHY is it necessary to boondoogle your subscribers at every turn and subject us to every piece of spam and 'offer' out there. What is this called? A 'subscription' Business?
"I honestly thought that I was unsubscribed because when I did read your info it was like one big ad... so I couldn't believe that I paid for you to advertise and expose me to this rip-off stuff." – Paid-up subscriber Becky Mosely
Porter comment: If you're not happy with our products or our business model, I'm always happy to refund your money and part as friends.
To answer the questions you asked, I don't manage money, so I don't make "so much money" in the markets. In fact, I'm not allowed to buy the things I recommend to my subscribers. As a result, I've certainly surrendered the opportunity to make several great investments over the years.
Instead, I chose to make my living using my skills and connections to help investors around the world make better investment decisions. That's not altruism, of course. I'm in business. But I think my business model of being independent and charging relatively paltry sums for pretty sophisticated advice offers my customers real and tangible advantages.
That's why I never apologize for our marketing: That's how we stay in business. But if you don't want to receive our marketing, it's pretty simple to avoid: Cancel your newsletter and get a refund. Also, we don't sell or rent your e-mail address to anyone.
"I read your comment about Mayor Bing claiming 'There's no one left to kill in Detroit,' he may be right, but there are plenty of people left to kill in the suburbs.
"I've lived my whole life in the Detroit area and for the first time in my life I feel the need to buy a gun to protect my family and myself. If Porter is right about the financial crisis we are about to endure, Santa will be bringing me some protection this year.
"Also, I've recently joined the Private Wealth Alliance and it was the best $1400 I've ever spent. Converted my employer provided 401K into a Self Directed 401K and couldn't be happier. (By the way, the sales force touting the 401K never even mention the fact that self managing your own 401K is even an option) No surprise here...
"Keep up the great work speaking the truth about the clowns running our government, the day may come, possibly in the near future that the freedom of speech that we take for granted, will be taken away from us... By the way, I haven't been hitting the egg nog." – Paid-up subscriber Rich D.
Regards,
Porter Stansberry and Sean Goldsmith
Baltimore, Maryland
December 15, 2010