This sector is getting crushed, and we called it...

Why 'all natural' can still be harmful for you...

Editor's note: In today's Digest Premium, we're passing along some interesting information from the November issue of Dr. David Eifrig's Retirement Millionaire.

 "All natural"... "Doctor approved"... "Clinically tested"...

The makers of herbal dietary supplements love to slap these descriptions on their bottles to reassure you that their products are safe and healthy... But don't be lured by these meaningless deceits... These supplements aren't always safe. And they usually don't benefit your health.

The supplement industry in the U.S. is huge. It's worth more than $27 billion. Not surprising, considering more than 50% of Americans use supplements.

But if you take some of these supplements, you might be surprised to learn that no one is making sure these products are safe for humans... let alone whether they do what they claim.

Companies can claim a product is safe and healthy. But there's no oversight to verify these claims.

 Don't get me wrong... Regular readers know I (Doc) am not a fan of Big Brother government-type regulations. But I do believe in giving people the information they need to make informed decisions. The FDA should gather the studies on these supplements and require more research that's not sponsored by the supplement companies.

The FDA does monitor complaints concerning supplements. The FDA has MedWatch – an adverse event reporting program. If there are concerns about a supplement or an ingredient in a supplement, the FDA will issue a warning... and maybe do some of its own research.

But researching a supplement after it has already damaged people's health is too late. Unfortunately, this has been the case for decades.

 In 1994, Congress passed the Dietary Supplement Health and Education Act (DSHEA). The act says, "The manufacturer of a dietary supplement or dietary ingredient is responsible for assuring that the product is safe before it is marketed." This means the FDA doesn't verify claims made on labels or check the safety of a product. So you're unlikely to see a supplement that's FDA-approved. The FDA only investigates possible problems with a supplement in the event of consumer complaints.

The government does limit what manufacturers can put on a label. The makers can't claim a supplement cures or treats a disease. For example, you may find – as we did – a vitamin K supplement claiming to be "good for bone-building process," but it can't claim to "prevent osteoporosis."

"All natural" is a claim I find particularly harmful because people regularly associate it with being healthy and safe. But plenty of things in nature will kill you: the flowering plant foxglove, certain mushrooms (like the destroying angel variety), and ricin (derived from castor beans).

 I'm not trying to warn people completely off supplements. This time of year, you'll find me regularly taking vitamin C to ward off colds. And I occasionally take a multivitamin. But you should educate yourself about the real risks before blindly popping pills.

– Dr. David Eifrig Jr., MD, MBA

Editor's note: In tomorrow's Digest Premium, we'll share Doc's list of 12 dangerous supplement ingredients you should always avoid from the November issue of Retirement Millionaire.

In that issue, Doc shares several other health tips. And he recommends his favorite way to play the health care boom today... Doc doesn't think we'll see this company trading at today's levels for long. If you'd like to try a four-month, risk-free trial subscription to Retirement Millionaire, click here to learn more.

 While the rest of the market has been in a massive uptrend – the benchmark S&P 500 stock index has been hitting all-time highs almost every day – one sector has quietly taken a beating...

And if you've been reading DailyWealth Trader, you've profited from the decline.

  In the August 7 edition of DailyWealth Trader, co-editors Brian Hunt and Amber Lee Mason called for a decline in oil prices.

There was simply too much bullish money, they argued...

Many of the oil traders use trend-following computer systems to trade the market. And when those oil traders all move to one side of the trade, they usually get tipped overboard.

Since early June, crude oil has enjoyed a large short-term rally. Prices moved from $94 per barrel to $108 per barrel (a fast, 15% move). This rally has drawn in a massive amount of speculative trading capital. There is now an all-time record of speculative long-side trades in the market. In other words, the speculators have moved to the same side of the boat.

We believe this massive speculative reading marks the end of the current crude oil rally. The market is ready to punish the speculators. We're not predicting a price collapse to $60, but a decline down to $95 is a chip-shot from here.

 Today, crude oil is trading for $94.70 a barrel. Correctly predicting the direction and an accurate price target for a trade is a rare thing (with plenty of luck involved). Still, the DailyWealth Trader team deserves kudos... Crude is down more than 10% since their call...

 Shares of steelmaker U.S. Steel jumped as much as 6% today after investment bank Goldman Sachs upgraded the steel sector (and several steel stocks, U.S. Steel included).

Goldman upgraded the sector from "cautious" to "neutral," as it sees a "sustainable recovery" over the coming years. The bank said risks of an oversupply in the sector "appear to be largely priced in." It also says its forecast for lower iron-ore prices will help steel producers. And Goldman believes continued growth in the auto and energy sectors will help boost demand.

The bank also upgraded U.S. Steel and AK Steel from "sell" to "buy." That's a major upgrade... Normally, a bank would move the stock to from "sell" to "neutral" first. Goldman also upgraded Steel Dynamics from "neutral" to "buy."

All three stocks moved significantly higher following the upgrades.

 Regular Digest readers know Brian and Amber were bullish on U.S. Steel in DailyWealth Trader. (We explained why in the October 30 Digest.)

Steel, like all commodities, is a highly cyclical business. And the sector had been crushed. U.S. Steel, the largest steel company in the nation, was down 73% from its 2011 high.

As our friend, commodities expert Rick Rule, likes to say about the inherent cyclicality in his business – "the cure for low prices is low prices."

Brian and Amber noticed the situation in steel stocks was going from "bad to less bad." They twice recommended readers buy shares of U.S. Steel. Following the Goldman upgrade, readers are sitting on 36% and 45% gains.

 Brian and Amber are always monitoring the markets for great trades resulting from extreme sentiment and big-picture trends. And they update their readers on their findings daily.

To help readers understand some of the strategies the best traders in the world use, the DailyWealth Trader team produced a series of three-minute-long trading videos.

If you're active in the markets, you need to understand these concepts. You can watch all of the "Three-Minute Trading Expert" videos in 15 minutes. And they're completely free.

You can see the videos here, here, here, and here.

 In the October 29 Digest, we cited research from JPMorgan showing the amount of money currently working in today's economy...

As we wrote:

 With interest rates at record lows, all that money is looking for a good home. And asset prices across the board are rising: Stocks and bonds are at record highs, real estate prices are soaring, and we're seeing record prices for collectibles (like fine wine, art, and cars).

In short, it's difficult to find high-upside opportunities in the market (at least, ones that aren't purely driven by more manipulation of our money supply).

 That's why investors are buying into initial public offerings (IPOs) at the fastest pace since the financial crisis.

According to the Wall Street Journal, October was the busiest month for U.S.-listed IPOs since 2007... 33 companies raised more than $12 billion.

And we'll see a dozen more IPOs this week, including the expected $1.6 billion stock sale from social-media website Twitter.

In total this year, 190 U.S.-listed IPOs have raised $49.2 billion (besting the $45 billion raised by the 132 deals in the same period last year).

 But what's more interesting than the amount of money these companies are raising is how the stocks are performing on their first day of trading...

Container Store Group (TCS), a retailer specializing in organizational equipment, doubled on its first day of trading last Friday. It's the sixth company this year to double in its first day of trading. And it's a retailer that sells storage containers and home goods – hardly a firm with game-changing potential.

According to data-tracking firm Dealogic, just eight IPOs have doubled on their first day of trading over the previous 12 years.

This type of activity happens at market tops, not bottoms. We're not calling for a crash... But we believe the Federal Reserve will continue to inflate the prices of all assets for some time. This is your reminder to be cautious. Remember... what we're seeing today isn't real growth. It's asset price inflation thanks to an expanding money supply and near-zero-percent interest rates.

For now, we're happy to ride this inflationary boom... and mind our trailing stops.

 New 52-week highs (as of 11/1/13): BP (BP), CVS Caremark (CVS), 3M (MMM), Penn Virginia (PVA), and Walgreens (WAG).

 In case you missed it, the "Chairman of GM" wrote another update following the company's latest earnings release. You can read it here. We field reactions to the letter in today's mailbag. As always, send your thoughts to feedback@stansberryresearch.com.

 "Dear Chairman, I agree with everything you said about your company. One of the things that I don't understand is why you are running the company the same way it was run by all of the previous senior managers.

"Back in the 80's I could never understand why anyone would make any kind of investment in GM. It kept borrowing money in the billions and not showing profits that merited the expense of bond holders or shareholders. You gave away cars in the 90's to show that you were a viable business. Not to mention buying out the only person that could have made GM a company to be proud of. But Roger paid him over 700 million dollars to get lost.

"And here we are today in the very same situation in the 00's. I have only one question for you sir. Why on earth would Wall Street piss away billions more dollars on a company that has been a total disaster for 30 years. If I saw this 30 years ago it just proves one thing to me Wall Street is making a bundle throwing good money after bad or else they wouldn't do it. Thanks for attempting to answer my questions...

"Porter I have so enjoyed your GM writings. Between the real GM management and the Feds they are completely clueless. Just a shame that the taxpayers have had to suffer with this albatross." – Paid-up subscriber Jeff Spranger

 "I certainly hope Porter has a 24/7 personal bodyguard. The Union Dons don't like his kind of attitude and this could put them over the top and, whatever happens, he won't get much sympathy from our wonderful leaders in Washington. I wish Porter and his staff well. I hope he continues to speak out about conditions in this country as he sees them. We need another Patrick Henry. The bell is toiling. It toils for all of us." – Paid-up subscriber A. Rutherford

Porter comment: Plenty of guns. Plenty of ammo. Plenty of lawyers. It's all I can do.

Regards,

Sean Goldsmith
Miami Beach, Florida
November 4, 2013

Why 'all natural' can still be harmful for you...

In today's Digest Premium, we excerpt a bit from Dr. David Eifrig's Retirement Millionaire.

"Doc" explains why many supplements claiming to be "all natural" or "doctor approved" are worthless at best (and lethal at worst)...

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

This sector is getting crushed, and we called it... Big day for steel stocks... Goldman turns bullish on the sector... How to become a better trader... The IPO craze returns... Reactions to the 'Chairman'...

Stansberry & Associates Hall of Fame
(Top 10 all-time, highest-returning closed positions across all S&A portfolios)

Why 'all natural' can still be harmful for you...

In today's Digest Premium, we excerpt a bit from Dr. David Eifrig's Retirement Millionaire.

"Doc" explains why many supplements claiming to be "all natural" or "doctor approved" are worthless at best (and lethal at worst)...

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 11/01/2013

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.