Wake the Hell Up

Dan Ferris didn't sugarcoat anything... Wake the hell up... Why stocks could crash and trade sideways for 20 years... Sell 'two of the market's most important assets' now... Liz Truss quits... The Stansberry Conference begins Monday...

Well, Dan certainly didn't hold back last night...

If you were among the tens of thousands of people who watched our friend, colleague, and Extreme Value editor Dan Ferris' brand-new presentation last night, you know what I (Corey McLaughlin) mean...

A lot of Dan's points stuck with us...

Like how the American stock market could be going the way of Japan – sideways – in the next 20 years, but only after falling by another 75% in the near future... And why the Federal Reserve is like a "dentist with a chainsaw."

This exchange between Dan and our event host, Amy Gamper, might have been the most thought-provoking part of the message. Dan said...

I want you to think about this hard for a minute. Take the value of your retirement portfolio... and cut it by 75%. And then... factor in ZERO growth – at all! – for the next 20 years.

Now, think of that number... the approximate dollar value of what your assets would look like... Now let me ask you: Could you retire – or stay retired – with that amount? Would that amount be enough to survive on? For 20 to 30 years?

Of course not. As Dan said, that's virtually impossible unless you're someone like Jeff Bezos or Elon Musk – and even they might cut back on some costs. Would you have enough to survive rising inflation? Or medical care in retirement? "I really don't know," Amy said. Dan replied...

Exactly my point... which is why this is THE most important message I've ever delivered before.

If you're not scared by now... you need to wake the hell up!

Things are bad right now. But I believe they're going to get even worse... This is already THE most difficult investing environment of your lifetime. Are you prepared for this to last another 20 years?

Dan made a compelling and, frankly, frightening case...

First, he shared stunning similarities between the environment in Japan in the 1980s and the U.S. today. He also showed historical data proving the final third of bear markets often produce the greatest declines of the downtrend.

Just like the final stage of a "Melt Up" can produce mind-boggling gains, the end of a "Melt Down" can wipe out all of your wealth...

Whether you agree with Dan or not, the sentiment to "wake the hell up" is one that can't be said enough. It was essentially what we were saying in yesterday's Digest – think for yourself, no one else can – but Dan did it more colorfully.

We should also note that even if Dan is only half or 25% right, it will still be bad news for millions of Americans. Even another 10% or 20% correction and a year or more of flat returns could be devastating...

Importantly, though, Dan also offered up a game plan to help navigate whatever comes next...

Last night, he introduced a plan to brace yourself and your investment portfolio for what he believes is coming, complete with a fully allocated done-for-you portfolio designed just for this moment...

Because even if stocks do go sideways for 20 years like they have in Japan, there will be winners and outsized gains to be had within the broad market. And there will be ways to protect your wealth from being completely eaten away by inflation or anything else.

As Dan spoke last night, I was reminded of something famed investor Stanley Druckenmiller said in a recent interview... Remember, he has purportedly never had a down year over four decades of investing his and other people's money.

Druckenmiller said the forces that have pushed stock prices higher since 1982 – "easy money" from central banks, low inflation, and globalization – in his view aren't only stopping... they're reversing and leading to higher interest rates, high inflation, and geopolitical and financial conflict.

And as a result, he said...

There's a high probability in my mind that the market at best is going to be kind of flat for 10 years, sort of like the 1966 to 1982 time period. The nice thing is there were companies that did very, very well in that environment back then.

Druckenmiller mentioned that this period was when companies like Apple and Home Depot were founded... and coal, energy, and chemicals companies made a lot of money. In other words, there was innovation. And real, tangible goods were highly valued too.

Dan has a similar take...

If you missed last night's event, we have good news...

You can catch a free replay or read a transcript of Dan's presentation here. We urge you to listen to what Dan had to say. Just for listening, you'll also hear the names of two super popular stocks that he says folks should sell immediately...

Dan explained that these two stocks are "two of the market's most important assets" because they make up a huge part of widely followed exchange-traded funds and conventional portfolios. Holding these two stocks would be a major risk in a market crash.

This is the kind of threat to everyday Americans' wealth that simply isn't being talked about today... and that most people don't even realize is a threat.

Click here to watch the presentation now... And tomorrow, Dan will have more on his message in his regular Friday essay, including a more detailed discussion on what the next few decades ahead in the market could look like.

As for today and recent market action...

After the monster reversal rally we saw late last week, the major U.S. indexes continue to trade around their June lows once again, and volatility remains high. Today, the S&P 500 and the other big indexes were down slightly.

In the meantime, the tone in the bond market hasn't changed at all and still points to nothing but a sour mood. Yields keep rising along the curve to levels not seen since before the 2008 financial crisis.

The 2-year Treasury yield traded above 4.6% today... the 10-year Treasury yield is offering 4.2%... and the 30-year bond has an identical yield. This is some serious trend-breaking stuff and the start of what could be a long era of higher rates...

And checking in on my "the bottom is (probably) in" indicators, they're still saying, "We're not there yet"...

Market breadth remains weak. Only 18% of S&P 500 stocks are trading above their 200-day moving average, a technical measure of the long-term trend. That's better than the 10% we saw in September, but still below the important threshold of 20%...

Taking a closer look at the yield curve, short-term yields have still been rising at a greater clip than longer-term yields, meaning the curve is still deeply inverted as it has been for nearly four straight months. The "10-2" spread is at negative 0.42.

In currencies, the U.S. Dollar Index ("DXY") has consolidated around its 112 level over the past two weeks, but it doesn't look like it has peaked. And even though earnings season is off and running, it hasn't dented market sentiment so far...

You could make a case for nibbling at certain stocks, but it's much harder to say that a broad bottom is in. But we're watching closely.

Our Ten Stock Trader editor Greg Diamond told his subscribers about a bottom – and a scenario involving the bottom – this week. You can read more about that here.

Prime minister's questions...

One quick note on a big piece of political news today... U.K. Prime Minister Liz Truss resigned after just six weeks on the job...

After adding on to the financial chaos in the British markets with a variety of policy recommendations (forcing the Bank of England to come to the rescue), Truss lost the support of her own party over the last few weeks.

The ruling Conservative Party is aiming to pick a successor by October 28, while opposition parties are pushing for a general election for a replacement instead. To top it off, former Prime Minister Boris Johnson, who just resigned three months ago, is reportedly considering running for his old job.

As you might expect, the quick regime change in the U.K. can be taken as another big signal of the state of our world right now. Volatile. Uncertain. Contentious. Fragile. Prone to inflation. That's one takeaway...

Another is slightly more light-hearted... If you have never watched a session of "Prime Minister's Questions," the frequent gathering of U.K. parliament in which members fire criticisms or questions at the sitting prime minister, I suggest you kill a few minutes doing so...

Truss' last appearance just yesterday will go down as a classic – albeit somewhat sad and entertaining – iteration, as these sessions usually are...

This time, Truss was asked at least a half dozen different ways why she had not resigned yet. The opposition leader, Keir Starmer of the Labour Party, delivered this stinger to the prime minister's face...

A book is being written about the prime minister's time in office. Apparently it's going to be out by Christmas. Is that the release date or the title?

Burn. "Out by Halloween" is now accurate.

In response to another question, Truss started saying, "I have been very clear..." That prompted gales of laughter so hard she stopped what she was saying and continued, "... that I am sorry and I have made mistakes."

Sometimes I think, "If only Congress had this." Then I remember, you know, the Revolutionary War. In any case, among other claims made in her defense, Truss said, "I am a fighter and not a quitter." Less than 24 hours later, she quit.

Don't feel too bad, though...

Ironically, given the U.K. pension crisis she inadvertently spurred on, Truss is now eligible to claim a £115,000 (around $129,000) annual "allowance" granted to former U.K. prime ministers in the name of carrying out public duties after their term.

Of course, the pension-like plan was put in place assuming the prime minister would last longer than 45 days in office... and people would actually want him or her to carry out public duties in retirement. Truss goes down as the shortest-serving U.K. prime minister ever.

Finally, today, an important note about our Stansberry Conference...

We're just a few days away from the 20th anniversary of our biggest event of the year, the Stansberry Conference. The three-day event begins Monday, and we're crossing Ts and dotting Is...

Our terrific office and event managers have lined up logistics and a packed schedule for everyone headed to Boston, and now we just need to pack our bags. If you'll be at the conference, I look forward to seeing you. Please don't hesitate to say hello...

In-person tickets sold out a few weeks ago, but if you won't be at the Encore Boston Harbor hotel and resort, remember, you can still be "in the room" via our livestream package and watch from wherever you want.

Click here for more information on how to grab a livestream ticket now.

You can catch all of the presentations from your favorite Stansberry Research analysts and our invited guests for $999, a price that could pay for itself based on the stock picks and other insights and information that will be shared over the three-day event.

I was looking at the schedule and I'm blown away by the amount and variety of speakers and topics we have lined up for attendees...

Among the speakers this year are New York University professor of marketing Scott Galloway, best-selling author and former Wall Street investment banker William Cohan, and Cambria Investment Management co-founder Meb Faber...

We've also got WallStreetBets founder Jaime Rogozinski, hedge-fund manager Hugh Hendry, Andrew Huszar – an ex-Fed official and self-described "confessing quantitative easer" – and a special presentation from Colonel Jonathan Shaffner...

Plus, we're looking forward to seeing and hearing from our friends at Chaikin Analytics, Altimetry, Empire Financial Research, and our Stansberry Research crew, flying in from all over the country.

And this list doesn't even cover it all.

In the Digest, I'll do my best to share highlights and a good sense of what's happening on the ground in Boston. Be sure to follow along here next week. But if you don't want to miss anything, consider buying a livestream ticket. You can find more information here.

What the Heck Did You Think Would Happen?

"None of the Fed's rate hikes have affected the consumer yet," says Kevin "Mr. Wonderful" O'Leary. And it's because of the excessive printing the central bank has been doing – now at a staggering $7 trillion dollars. If we see a slowdown in earnings, as O'Leary tells our editor-at-large Daniela Cambone, "it'll probably be in Q1 or Q2 next year"...

Click here to watch this episode of the Daniela Cambone Show right now. And to catch all of the videos and podcasts from the Stansberry Research team, be sure to visit our Stansberry Investor platform anytime.

New 52-week highs (as of 10/19/22): Black Stone Minerals (BSM), Huntington Ingalls Industries (HII), and Northrop Grumman (NOC).

In today's mailbag, feedback on yesterday's Digest and Dan's presentation last night. We received a few notes asking if there would be a replay or transcript available of Dan's event. As I mentioned above, the answer is yes...

You can watch a replay of the event or read the transcript here at your convenience. You'll also get the names of two super-popular stocks Dan says folks should sell immediately... Aside from that, as always, send your notes, comments, and questions to feedback@stansberryresearch.com.

"My takeaway of the past few months...

1. Pavlov was a genius.
2. Humans are no smarter than dogs

"Why? Intermittent reinforcement acts on the 'old brain', the limbic system, and bypasses the frontal lobe that we are so proud of." – Paid-up subscriber Robert S.

"Hello Stansberry Research, Following up on today's Digest written by Corey McLaughlin, I was reminded of why I do not fund IRAs or 401ks.

"I am a Certified Financial Planner. Personally, I do not invest in these government sponsored retirement products. But, I tread lightly amongst my client base when discussing these plans. I believe they are potential traps.

"It is quite simple. I do not trust a bankrupt government.

"First thing an investor in IRAs and 401ks and all other state sponsored savings plans needs to do is:

1. Look up the definition of trustee in the dictionary
2. Read your plan documents and figure out who is the trustee of that plan.

"If you are comfortable with that knowledge and understand who controls the plan and the assets within it, then continue on.

"If you do not trust the trustee, then forget the 'extra special tax advantaged savings,' and figure out another way to save for your future...

"I think it is worth your time and effort to at least know who has ultimate control of your money. All is good until it isn't." – Paid-up subscriber Ralph H.

"An excellent article as usual from Corey. In his article Corey made reference to Steve Sjuggerud's concept of the 'Melt Up.'

"Question: Can you please tell me when and if Steve has issued his 'Melt Down' warning yet? Thank you." – Paid-up subscriber Sandy A.

Corey McLaughlin comment: Sandy, thanks for the note and the question.

This is why I linked to June's issue of True Wealth yesterday. In it, Brett Eversole, the lead analyst for Steve's franchise of publications, most recently updated subscribers on the Melt Up and Melt Down concepts...

If you're a True Wealth subscriber or Stansberry Alliance member and missed that issue, you ought to check it out for the full update. I can only share excerpts here...

We've heard from a lot of readers in recent weeks. The question has been the same...

Is this the Melt Down?

First off, Melt Down or not, the plan we laid out in last month's issue is how we'll survive this bear market. (Please read that issue here if you haven't already.) And as of Monday, that's officially what we're in now...

But the question of a Melt Down remains...

Brett went into more detail about what exactly makes for a Melt Up or Melt Down and shared that certain speculative tech stocks had likely already melted down. But the same idea didn't apply to the entire market. He continued...

Either way, there's good news too. Whether the bottom is near or still a long way off, you don't need to stress. Because our plan doesn't change either way...

First, we protect ourselves. We have our stops in place and we stick with them. Preservation is priority No. 1. From there, our goal is to find the rare investments doing well in tough times.

True Wealth subscribers can find the full issue here. You should also know that Dan referenced Steve and his Melt Up thesis in last night's event... and Dan said what he's warning about could turn out to be a Melt Down.

"Dan Ferris, Thank you so much for Crash Warning... Great talk." – Paid-up subscriber James S.

"Gee, I've never seen an analyst in Stansberry [get] so bearish. Luckily we have options to trade for income. I think in this environment, [it's] all about cash flow. We must be prepared with liquidity and trade with discipline." – Paid-up subscriber Fredrik H.

All the best,

Corey McLaughlin
Baltimore, Maryland
October 20, 2022