Time Is Running Out
Time is running out... Kudos to Doc Eifrig... More signs of a slowdown... Apple's surprising statement... Bad news from China...
By now, every Stansberry Research subscriber should know...
We believe the options-selling strategies Dr. David "Doc" Eifrig teaches in his Retirement Trader service are among the most valuable tools any investor can learn. They're particularly powerful during times of high volatility like we're experiencing today.
Whether you're interested in earning steady, double-digit annual income streams without taking big risks, or simply want to make more money – with less risk – from the stocks you already buy, you owe it to yourself to learn more.
This isn't just lip service... We personally use these strategies in our own accounts, and recommend them to friends and family.
We won't rehash these ideas again today. But if you've been on the fence about learning more, there's something you should know.
Time is running out. Your best opportunity to try Doc's Retirement Trader service ends tonight.
Until tonight, Doc is offering a LIFETIME subscription to Retirement Trader for just the normal cost of one year of his service. He'll even throw in a lifetime subscription to his excellent Retirement Millionaire letter at no cost.
If you've seriously considered learning these strategies for yourself, there has truly never been a better time to do so. We hope you'll take advantage of our 30-day risk-free guarantee and try Retirement Trader tonight.
But again, you must act now... This offer will be offline at midnight Eastern time. Claim your lifetime subscription by clicking here.
Speaking of Doc, two of his calls are paying off big for subscribers...
Longtime Digest readers know Doc has been one of the most outspoken bulls on municipal bonds over the past several years.
If you're not familiar, muni bonds are simply bonds issued by state and local governments to fund projects. And because you're loaning money to the government, the yield is usually tax-free.
Munis are usually considered one of the least exciting areas of the market. They pay safe, stable income and rarely default. But that changed following the financial crisis, when investors began to predict a massive wave of defaults.
Doc disagreed. He said those predictions were flat-out wrong. In fact, he first recommended them to his Retirement Millionaire subscribers in October 2008, during the heart of the financial crisis. Readers who took his advice then are up more than 100% in a safe, "boring" investment...
Doc has re-recommended muni bonds many times since, when fearful investors have caused the sector to sell off. He last updated Digest readers in late November, when he said that fears about a Federal Reserve interest rate hike were overblown, and that muni bonds had already "priced in" the move.
So far, Doc has been exactly right again. Munis have held up just fine.
Shares of one of his favorite muni-bond funds hit a new 52-week high earlier this month, and are closing in on another new high this week.
Another of Doc's recent recommendations is also doing well...
In November, Doc noticed that another "boring" investment was offering a generous and growing yield for income investors.
Public Storage (PSA) is a real estate investment trust ("REIT") that is one of the biggest and best-run operators of rental storage facilities.
Doc noted the company had low debt and low operating costs, and business has been booming. Even better, if you're concerned about the economy, history shows the business has weathered previous downturns particularly well.
That has certainly been the case so far this year. Shares have defied the broad market decline this month. As you can see at the bottom of today's Digest, PSA shares just closed at a new 52-week high yesterday. Doc's Income Intelligence subscribers are already up 10%, and continue to collect the stock's 3% annual yield.
Kudos to Doc on the great calls.
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Changing gears a bit, we have more evidence that the global economy could be slowing...
Regular readers know commodities have been crushed over the past few years. Those with industrial uses – like copper, aluminum, zinc, iron, and steel – have been hit especially hard, as consumption in China and other emerging markets has collapsed.
Today, we learned the situation is unlikely to improve anytime soon...
Research firm Macquarie noted this week that supplies of steel – one of the most widely used of these metals – still dwarf demand.
It's so bad, the firm says 250 million tons of steel production capacity will have to be taken off the market just for steelmakers to make a profit again. To put this in perspective, all of Western Europe produces just 170 million tons a year.
In other words, despite the devastation in steel already, you could shut down all the steel producers in Europe and prices still wouldn't be high enough for the remaining producers to make a profit.
Unless we see a dramatic rebound in the economies of China and other emerging markets, expect the prices for steel (and other industrial metals) to stay low for some time.
Unfortunately, the latest data suggest things are getting worse, not better, for the global economy.
Last night, consumer-electronics giant Apple (AAPL) reported its latest quarterly earnings...
Again, the company reported record earnings. In fact, the $18.4 billion it earned last quarter was the most profitable quarter in corporate history. Apple's cash hoard has now grown to a record $216 billion.
The company also set a quarterly sales record of $75.9 billion. This included selling a record 74.8 million of its flagship iPhone, a rate of 34,000 per hour. Sales in China were up 14% to $18.4 billion, making up 24% of the company's total sales.
But it was the company's expectations for the current quarter that were concerning.
Apple expects sales of just $50 billion to $53 billion in the first quarter of this year, compared with $58 billion last year. This would mark the first year-over-year decline in sales since 2003. It also expects iPhone sales to fall for the first time in history.
In an unusually downbeat conference call, CEO Tim Cook told analysts and investors that his company was "seeing extreme conditions unlike anything we've experienced before, just about everywhere we look."
He noted markets like China, Brazil, Canada, Japan, and the eurozone were slowing. China in particular is a problem.
Late last summer, Cook publicly denied that the company was seeing a slowdown in China. But last night, he admitted that had changed...
Notwithstanding these record results, we began to see some signs of economic softness in Greater China earlier this month, most notably in Hong Kong.
He did note that outside of the "short-term volatility," the company remains "very confident" about the long-term potential of the China market.
In addition to economic weakness, he noted the company's global sales were also being hurt by strength in the dollar...
Two-thirds of Apple's revenue is now generated outside the United States so foreign currency fluctuations have a very meaningful impact on our results. One hundred dollars of Apple's non-U.S. dollar revenue translated to only $85 last quarter due to the weakening currencies in our international markets.
We'll take a closer look at what this news could mean for Apple shareholders in a later Digest. But seeing one of the world's greatest companies warn of "extreme conditions" around the globe is concerning.
It suggests the weakness in commodities and emerging markets could get even worse before it gets better. This would only increase the risks in the credit markets Porter has been warning about.
Regardless of your stance on the U.S. market, we believe every investor should take a few simple steps to protect their portfolio today. Again, this means holding plenty of cash (and gold), "hedging" your portfolio with a few short positions, and using volatility to your advantage.
New 52-week highs (as of 1/26/16): McDonald's (MCD) and Public Storage (PSA).
Several subscribers share their thoughts on legendary satirist – and new Stansberry Research contributing author – P.J. O'Rourke's latest piece on the 2016 election cycle. Send your comments and questions to feedback@stansberryresearch.com. Remember, we aren't allowed to give individual advice, but we read every e-mail.
"I thoroughly enjoyed P.J.'s description of Hillary's platform today. The only thing I think he may be wrong on is that saving $17,000 on his daughter's college tuition will probably cost him a LOT MORE than $17,000 in additional taxes!" – Paid-up subscriber Chuck S.
"Mr. O'Rourke, Your speech regarding Hillary is worth noting. In addition I'd like to offer a tidbit that the media seems to be missing. I spent some time this weekend with a man that has served in the Military under a Top Secret clearance. He mentioned that when Hillary is asked about sending emails out of her personal account, she keeps saying that none of her emails were marked 'Classified.' Of course not, that is not a classification that is used for emails at her level. They are either marked 'Top Secret' or 'Secret.' Why won't the news media ask her if they were marked as one of these two distinctions?" – Paid-up subscriber Rich Dunn
"I am a paid-up subscriber to whatever I've paid you for, and for several years now I've enjoyed your takes on the economy and the stock markets. I've even made some money from your recommendations. And I've made millions in the market since 1974, weathering motions and commotions of several sorts. So it irks me that you print the anti-Democratic juvenility of P.J. O'Rourke. Yes, he makes some good points. But you are neglecting to print stuff showing the insanity of the Republican hopefuls, and that's inexcusable.
"When O'Rourke starts to lace into them – all of them – then you can claim to be a really valuable financial news service. Otherwise, stick to the markets and drop PJ he's too arrogant and in-your-face. And what's worse, readers who respect your financial advice will absorb his silliness and accept it as worthy info. P.S. I've been both a Democrat and a Republican, and am now a Democrat because I think the Republican party has gone berserk." – Paid-up subscriber Robert W.
Brill comment: Patience, Robert... P.J. will be covering Republican front-runners, too. Look for his essay on Donald Trump soon.
Regards,
Justin Brill
Baltimore, Maryland
January 27, 2016
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