You CAN Safely Earn Double-Digit Annual Income Streams

Steve's note: For the next few days, I'm handing DailyWealth over to my friend and colleague Dave Eifrig. On Wednesday, Dave is hosting a free training event to show viewers how to collect thousands of dollars per month in extra income. Today, he explains why this strategy may be simpler than you think…
 
If you're like most investors, you've been led to believe that it's impossible to earn large amounts of investment income without taking big risks.
 
This idea – which you'll hear from many financial advisors and brokers – is simply wrong.
 
It is possible to earn double-digit annual yields on your money – safely – by selling options.
 
So why doesn't everyone use this strategy to earn consistent income streams? Below, you'll find the five common objections I've heard from readers or that I've found on the Internet… and my responses to them.
 
REASON NO. 1: Option-selling strategies like covered calls are too risky. You'll earn 5% in premiums, but if the stock falls 25%, you're still down big!
 
This objection is 100% valid. The way most people approach covered calls is risky. (If you're unfamiliar with covered calls, I encourage you to read this essay.) These folks buy risky stocks because risky, volatile stocks typically offer larger cash premiums than safe, stable blue chips. But most people end up losing on risky covered-call positions because their stocks fall in value.
 
A risky mining stock or fad retailer can fall 20% in one day. That's why we avoid them… It's too much risk in our retirement accounts.
 
By sticking with dominant, stable stocks like Coca-Cola (KO), Intel (INTC), and Johnson & Johnson (JNJ), you can enjoy a tremendous layer of safety. These stocks generate big cash flows, pay steady dividends, and have strong balance sheets and great brands. You'd be happy to own these stocks for many, many years.
 
Reaching for extra premium in risky, volatile names is a loser's game. Leave the risky names for the "gamblers."
 
REASON NO. 2: Selling options is too costly. It generates too many brokerage fees.
 
Selling options does generate more brokerage commissions than conventional stock ownership. But if you sell covered calls about six times a year on any given position, it's not a big problem.
 
For example, if you have a $25,000 portfolio, you might perform 20-30 covered-call transactions per year. This many transactions would cost about $200-$300 with an average low-cost online broker. The income you generate by using an intelligent covered-call strategy more than makes up for the increased brokerage fees.
 
If you have a small portfolio (like $1,000-$2,000), excessive brokerage fees are a danger. Your account is also too small to buy 100 shares of most blue-chip stocks (which is necessary for trading options – 100 shares covers one option contract). If you have a small amount of capital, you'll need to accumulate more to make selling covered calls a viable plan for you.
 
REASON NO. 3: Selling options is too much work.
 
I always laugh at this one. Why? Because most good things in life require work!
 
If you're not willing to learn something new and do just a little bit more work to generate much higher returns, then investing your money on your own is probably not for you. You're better off giving your money to a broker or a mutual-fund manager.
 
To achieve great results in any walk of life, you have to do some work (often a great deal of it). To get a high-paying job, you have to learn a useful skill. To start a great business, you have to learn how to provide customers with useful services or products. In order to achieve better results in anything, you have to learn… And you have to do extra work.
 
This work – of selling a few options each quarter and monitoring your portfolio – will take about 30 minutes a month. It is well worth spending that extra time to generate safe, double-digit yields on a nest egg.
 
REASON NO. 4: Selling covered calls is too hard to understand.
 
I know the world of stocks and stock options can be intimidating. But I learned this stuff just out of high school years ago. The finer points, I learned at Goldman Sachs and on Wall Street. If I could get started selling options at 17, anyone can learn it.
 
By selling a covered call, you are doing two simple things:
 
1.  You are buying a valuable asset (in this case, a stock).
   
2.  You are selling someone the right, but not the obligation, to buy that asset from you. You collect instant cash for doing this.
 
That's it. Don't worry if the smaller details sound confusing at first. Learning how to do most things requires some work… and multiple reads of how-to guides.

 
Once you get the hang of things, selling options is as easy as managing a checkbook. The only math involved is on the fourth-grade level.
 
REASON NO. 5: I can't trade options in my IRA.
 
This is not true. You can sell covered calls in an IRA. You just need to contact your broker and tell him you want to be approved for selling covered calls in your IRA.
 
If you've ever had any of these five misconceptions about selling options, I hope you'll reconsider them today…
 
It's natural when starting something new to feel nervous and a little unsure of what you're doing… I urge you to push through those feelings. Stansberry Research subscriber K.C., a registered nurse, did. And here's what she told us…
 
I just started option trading last Jan. (2012) and it wasn't until May (2012) that I had enough nerve to sell any puts… and wouldn't you just know it, I sold 3 puts last May and ALL 3 got "put" to me. But I did NOT panic, I sold covered calls on all 3 of them at least twice and 2 of the stocks eventually got "called" and I made over $10,000 in capital gains! I totally understand that Doc's trades are STILL WINNERS even when you end up buying the stock… you're just not done making money yet. I feel much more confident making trades that Doc suggests over my own!
 
In short, if you're willing to take a little time to learn something new and you follow a strategy of only selling options on dominant, stable stocks, you CAN safely earn annual double-digit income streams in the market.

 
Here's to our health, wealth, and a great retirement,
 
Dr. David Eifrig
 
Editor's note: If you'd like to learn more about Dave's options-trading strategy, he is broadcasting a free, online training event on Wednesday. You'll get an insider's look into how selling covered calls can help you safely collect thousands in extra income, every single month. Click here to reserve your spot.

Source: DailyWealth

Want to Boost Your Market Returns? Then Read This

The Weekend Edition is pulled from the daily Stansberry Digest. The Digest comes free with a subscription to any of our premium products.
 
 I have something important that I need to share…
 
Today, I'm going to share details of the strategy I learned 25 years ago at Goldman Sachs. It's the strategy I've used my entire career – decades long, now – to earn safe, steady income for myself and my readers.
 
But I know without a doubt that the bulk of you won't read past the next sentence… It's simply the way the world works.
 
That's because this entire essay will focus on options.
 
If you have a well-allocated portfolio and you're happy with your investment returns, learning how to use options may not be a priority for you. That's OK. I get it – I do.
 
But… you'll miss out on an easy investing lesson.
 
Other folks will want to read on. Because if you'd like to earn higher returns in the years ahead, options will help you do that. More important, options will actually help you reduce the risks of investing in the stock market.
 
In fact, I'm confident that options are the only strategy that regular investors can use to both reduce risk and boost returns by making a small change to the way they trade and invest.
 
If you don't like letting your wealth rise and fall with the whims of the market, I hope you'll pay close attention… because I can help you do much better and avoid the frustrations.
 
I'm going to share the three reasons investing in options can be safer and more profitable than the market as a whole… especially over the next five to 10 years.
 
 I learned the world of derivatives when I was recruited by Goldman Sachs out of business school…
 
At that time, it was the most exciting place to be on Wall Street. The market for derivatives (a more wide-ranging term that includes options) had been around for a while, but it was just then maturing into a monster.
 
We'd march into the offices of CEOs and CFOs and show them how they could reduce their risk while still earning great returns. And we were paid crazy amounts of money to do it.
 
I thought we were playing the short game. Surely, once people found out how easy options were, the jig would be up. Our options techniques were too easy to keep secret. Soon, everyone would know about them.
 
 Twenty-five years later and that never happened…
 
People still don't take the time to learn how to build wealth with options. Big corporations still go to Goldman and JPMorgan and pay millions to have someone else put these strategies to work.
 
And the way the markets look today, I think options will serve you richly in the years ahead. Because returns may be especially hard to come by.
 
 Overall, I'm a market optimist…
 
Staying invested in stocks over the long haul is the best way to build wealth.
 
From 1950 to the end of 2016, stocks have returned 7.7% per year, according to data from Nobel Prize winner Robert Shiller. So when folks plan their financial future, that's roughly the return they expect to get over the next 10 or 20 years.
 
But I've always been skeptical that even 60-plus years of data are enough to really understand the markets.
 
And between the economy, technology, and politics, things are drastically different than they were in the past. What do stock market returns from the 1950s tell us about returns today? Or in the 2020s?
 
Again, I'm a bull. But the conventional wisdom that stocks will return 7% or 8% a year has big flaws.
 
 For one, that average doesn't hold up over the very long term or over every period…
 
Take a wider look from 1871 to 2016, and stocks return just 4% a year (again, using Shiller's data). And we've seen long stretches where stocks have returned nothing…
 
From 1929 to 1954, stocks returned nothing. From 1973 to 1985, stocks returned nothing. From 2000 to 2013, stocks returned – you guessed it – nothing.
 
If you started saving for retirement in 1973 to retire in 1985, you were out of luck. Sorry, you were just born in the wrong decade for getting wealthy.
 
What if one day we look back and say the same thing about the coming decade?
 
 What's more, folks certainly think stocks are expensive today…
 
The cyclically adjusted price-to-earnings ratio (or "CAPE" ratio) measures the valuation of stocks with a long-term view that spans the business cycle. It doesn't help predict the market in the short term, but does give a good idea of what may happen in the long term.
 
Today, it says stocks are expensive…
 
 
Depending on how you measure, historically, buying at a CAPE ratio of 28 means you can expect returns as low as 1.9% a year for the next five years.
 
Meanwhile, interest rates are rising off historic lows. That could spell the end of the 30-year bull market in bonds.
 
And we haven't even talked about the inevitable market pullbacks and corrections along the way… or the potential for bigger crashes.
 
In total, it's entirely possible that any investment assets just won't deliver returns to anyone for years.
 
Except for options, that is…
 
 When used correctly, options reduce the risk of holding stocks…
 
That's right. Most folks think of options as a type of leverage or a way to make wild bets. But we love to use them to do the exact opposite.
 
Essentially, I see options as this sort of mathematical guarantee. And you can learn to understand why with just the most basic understanding of options.
 
 Our strategy is simple…
 
We own a stock and we sell an option contract against it. When we sell that contract, we receive cash up front. (There's more to it, but that's all you need to know to understand how options reduce risk.)
 
For example, if we buy a stock for $20 and sell a $1 option against it, we've collected $1. The stock is still trading at $20, but our "cost basis" is now $19.
 
Of course, the risk when you hold a stock is always the same. In theory, any stock can go to zero, but let's assume you're using a stop loss and you'll sell if it falls to $15.
 
Without the option, you hold a $20 stock that cost you $20… and you can lose up to $5 per share if it falls to $15. With the option, you still own a $20 stock, but it only cost you $19. You only have $4 at risk if it falls to $15. In this example, by taking the extra $1 in as income, you just cut your risk by 20%.
 
Earning option income lowers your cost basis, making it less risky than holding the exact same stock
 
There is no other way to reduce your downside in the market like my simple options strategy – one where you get paid up front.
 
If you hated watching your stocks drop in 2001 or 2008 (I know I did), options make those times much less painful.
 
 While the best investors obsess over risk, we know that most investors tend to focus on returns…
 
Options can satisfy that desire as well…
 
Simply put, options provide the same – or better – returns, with less risk.
 
Everybody wants better returns. Options deliver them when markets are down or anemic. At times when markets rise quickly, my favorite options strategy can lag on total returns – but still provide better risk-adjusted returns.
 
 We can prove this unequivocally…
 
Like I said, the basic idea of my options strategy isn't a secret. I learned it on Wall Street more than two decades ago. As such, finance guys and academics have studied it in all sorts of ways. I even hired a guy whose specialty is econometrics.
 
My research team and I spent weeks putting together research to find the most promising opportunities. That strategy has rewarded our readers handsomely.
 
But you can make a "For Dummies" version of the strategy. You don't have to think about the economy, or the businesses behind the stocks you own, or the value they possess.
 
You just take the "market return" and use a few simple rules to set up the options strategy. This isolates the pure returns that the options themselves generate.
 
From 1988 through 2016, the options strategy has returned 9% a year, while the S&P 500 (with dividends reinvested) has returned 10%. Most of that extra percentage point comes from the fast gains in the last year.
 
Meanwhile, the standard deviation on the options strategy was 12%. The same number for the market is 17%. In other words, this strategy requires roughly one-third less risk.
 
Put another way, when the tech bubble burst in 2002, stocks fell 22%. This options-strategy portfolio fell only 7%.
 
During the financial crisis of 2008, stocks fell 37%… the options strategy just 28%. Again, a 25% reduction in volatility and angst.
 
In short, this strategy performs better in down or flat markets, and it performs just about as well when the market rises. It can protect you during the scary times, while providing good returns during all others.
 
Again, these quoted returns assume no thought, no research, no insight. These are just the returns that a pure, dumb, options-trading robot could create out of thin air. I call this "income from nowhere"…
 
In the meantime, it's important to realize we can do much better than this "For Dummies" version. In fact, our options trades regularly target gains greater than 20% per year. And it's far simpler than you might expect.
 
 Unfortunately, most investors won't take the time to figure this stuff out…
 
I can't think of a bigger missed opportunity.
 
Investors don't want to learn about options because it requires learning some new terms and using some basic math. Busy folks just aren't willing to sit down and learn something new.
 
To me, that's a boring and poor way to live.
 
But more important, what if I told you that you can learn the basics of options in an afternoon? Then you can make a trade or two and you'll completely understand this simple strategy.
 
Considering that these few hours of work will earn you tens of thousands of dollars over the years to come, it has to be the highest "hourly rate" you can make.
 
Others learn the basics but still get overwhelmed. For example, log into your broker's platform and open an "option chain" that displays all the available options on a stock. You'll suddenly see hundreds of choices.
 
But once you've learned our strategy, you can narrow that down to only a few potential choices, and you can decide which one works best for your personal strategy in less than two minutes.
 
Most "traders" jump into options and do it wrong, lose money, and never try it again. Don't be like them.
 
 My strategy fixes every one of those problems…
 
It's simple, quick, and has an extraordinarily high win rate. (For the record, since we launched Retirement Trader in 2010, we've earned and published the profits on 329 of 350 positions, a win rate of 94%.)
 
If you need to keep earning returns to secure your financial future, this strategy is for you.
 
If you prefer less risk and smaller drawdowns, this strategy is for you.
 
And if you like higher returns – and who doesn't? – this strategy is for you.
 
 Options can improve your financial future with little fuss…
 
I've been helping thousands of readers do just that for more than six years… And now, I'd like to share the method with you.
 
I'm preparing an educational webinar to clear up any lingering questions you might have… On Wednesday, March 22 at 1 p.m. Eastern time, I'll walk you through a real trade you can make in your own account to collect "income from nowhere" immediately. I'll also show you exactly how much income you could be collecting on some of your favorite stocks.
 
It's going to be a lot of fun for me (I love teaching)… and profitable for anyone who takes the initiative to join in.
 
Just click here to reserve your spot, and submit up to 10 of the stocks you're most interested in collecting income on today.
 
Here's to our health, wealth, and a great retirement,
 
Dr. David Eifrig
 
Editor's note: During his time at Goldman Sachs, "Doc" mastered a safe, simple strategy that could change your life… and transform your retirement. And on Wednesday, he's hosting an educational webinar where he'll walk you through a real trade and show viewers how to get started with this "income from nowhere" strategy today. Reserve your spot right here.

Source: DailyWealth

The Simple Formula for Making 100 Times Your Money

 
"It's really not a good idea to sell anything," Bill said.
 
Bill Bonner and I were in Nicaragua for the fifth annual Bonner & Partners Family Office meeting at Rancho Santana. After the conference was over, we went to dinner "off campus" for a change of pace.
 
In pitch darkness, we drove on unlit dirt roads, dodging the occasional cow. We came upon a little town where some kind of festival was going on, nosing the car past a parting sea of people.
 
Then we made a wrong turn and had to double back… nose the truck past the crowd again… but we eventually found our spot. It looked like a shack with some tables and chairs and lights haphazardly set out near the beach.
 
Bill and I settled in at a table by the water and ordered up a couple of Tonas, the Nicaraguan beer of choice.
 
We talked about a lot of different things – wealth, money, building businesses, real estate…
 
During our talk, Bill mentioned that it's not a good idea to sell anything. Well, not anything. He was talking about good assets.
 
I agreed. There are taxes when you sell. And fees. And then you have to decide what to do with the money, which you may very well lose in the next investment.
 
Good assets tend to hold their value and even grow more valuable over time. It's a lesson I learned all over again when I researched for my book, 100-Baggers: Stocks that Return 100-to-1 and How to Find Them. (In fact, on my list of essential principles, it's No. 10: "You Should Be a Reluctant Seller.")
 
One great example of a good asset to hold for the long term is Monster Beverage (MNST), the famous maker of energy drinks and other beverages…
 
Monster enjoyed high profit margins and returns on its capital, two marks of a great business.
 
It became a 100-bagger in 10 years – a remarkable feat that required a 50% annual growth rate. But it fell more than 25% at least 10 times during that run. In three separate months, it lost more than 40% of its value.
 
Yet if you focused on the business – and not the stock price – you would never have sold. And if you put $10,000 in that stock, you would have $1 million at the end of 10 years.
 
The most stunning gains come when people just leave their stocks alone… And then they wake up shocked by how much they're worth.
 
If you don't need the money, it's probably best to let your investments ride. Do less, and make more. There are many inspiring examples.
 
In 100-Baggers, I tell the story of Ronald Read, who was the subject of a Wall Street Journal piece in 2015, "Route to an $8 Million Portfolio Started With Frugal Living."
 
Ronald Read was a janitor at JC Penney "after a long stint at a service station that was owned in part by his brother." So how did he make his money?
 
He had 95 stocks when he died. Many of these he held for decades. He owned Procter & Gamble (PG), JPMorgan (JPM), J.M. Smucker (SJM), Johnson & Johnson (JNJ), and other blue chips. Not every stock he owned was a winner. But the profits from the winners overwhelmed the losers.
 
It's a simple formula. Timeless.
 
I've got a lot of stories like this, some of them from readers. Here's one:
 
I remember as a kid my dad used to grumble about my grandmother because she would complain that she couldn't see well and she had cataracts. He would say, 'well she doesn't seem to have any trouble reading the newsprint in the WSJ when she is checking her Esso stock.' [Esso is a brand of ExxonMobil]. That would have been around 1971 and somehow that is still in the recesses of my mind.
 
Just consider as a young kid if I had just started accumulating ExxonMobil back then. It would not have taken a genius or much of a stock picker gene. Just buy the largest oil stock in the world that had been around for a hundred years… Just put your blinders on and keep accumulating over a lifetime. No stress, no white knuckles since it has a very conservative balance sheet, no high wire act. So where [sic] would $1 back in 1971 in Esso be worth today? By my calculations $418 plus one would have been collecting a juicy dividend all those years.

Bill is right. It doesn't pay to sell. Buy the best assets – ones with durable cash flows and potential for growth – and sit.
 
Sincerely,
 
Chris Mayer
 
Editor's note: This Thursday, Chris is hosting a free online event where he'll reveal the most urgent and compelling investment situation he has seen since 2014. It's one of the easiest, safest ways to make money in stocks… But you may have as little as 24 hours to get in on this deal. Register here.

Source: DailyWealth

What's Next for Stocks After 12 Straight Up Days

 
U.S. stocks ended February with one of the rarest streaks we've ever seen…
 
The Dow Jones Industrial Average moved higher for 12 consecutive trading days.
 
That has only happened two other times since 1950… And the last time was 30 years ago.
 
This kind of streak spooks most investors…
 
"What goes up, must come down," they think… So after 12 days of rising stocks, people assume we are due for down days.
 
But is that true? Is there any basis to that thought?
 
Let's find out…
 
The Dow's recent hot streak was impressive… and nearly unprecedented. It has only happened twice in the past 67 years. The most recent occurrence was in 1987, and the other was in 1970.
 
What's interesting to me is what happens after these kinds of streaks…
 
Stocks tend to continue higher for around six months… and then they move lower.
 
This happened in both 1987 and 1970. Stocks rose 15%-plus in five to seven months and then fell… eventually going negative in both cases.
 
The problem, of course, is that we only have two examples. It's hard to draw conclusions from something that has only happened twice.
 
To solve that problem, I looked at every instance where the Dow rose for 10 straight days. That has happened 20 times since 1950.
 
Even with more instances, the result is the same… Stocks tend to outperform for around six months… and then underperform.
 
The table below shows the full results…
 
Dow Returns
6 Months
Later
1 Year
Later
After 10 straight up days
8.9%
3.1%
All periods
3.5%
7.2%
Again, the pattern here is consistent…
 
After a 10-day winning streak, stocks massively outperform their typical return in six months. But then they move lower… ending the year with returns well below a "typical" year.
 
This pattern actually reinforces the core theme that I've written about recently…
 
We're in the late stages of a great bull market. But the biggest gains tend to happen in this final stageAnd that means stocks can still move much higher before the bad times arrive.
 
I call this theme "The Melt Up."
 
This rare string of "up" days is one indication the peak could happen as soon as six months from now. I believe it will be further out – 12 to 18 months. But the story is still in place…
 
Even after a consecutive run higher, stocks could outperform going forward… and then underperform in the long run.
 
Good investing,
 
Steve
 
Editor's note: Steve recently put his "Melt Up" idea into a simple presentation. In it, he explains exactly what's going on today… including how a new, mysterious buyer has entered the stock market, creating major financial waves. It's setting up the perfect conditions… and Steve believes stocks could soar in the coming months. You can watch the entire presentation free of charge right here.

Source: DailyWealth

Here's Why the Conventional Wisdom on Gold Is Right

 
In the world of investing, many ideas are so widely accepted that they go unquestioned. But conventional thinking is often wrong.
 
Here's one piece of conventional investing wisdom we often hear: In times of panic, gold is a safe haven. Gold in your portfolio can help insure against losses when the stock market falls.
 
As it turns out, this piece of conventional wisdom is correct. A recent study proved it…
 
Two researchers in Ireland recently wrote a paper entitled "Reassessing the Role of Precious Metals as Safe Havens – What Colour Is Your Haven and Why?" They concluded that relative to many other assets, in many countries, precious metals act as safe havens in turbulent markets.
 
This is because gold marches to the beat of its own drum… especially during times of stress…
 
The researchers confirmed that gold is uncorrelated with most other financial assets. When two assets have a positive correlation (approaching a value of 1), their prices tend to move in the same direction. When assets have a negative correlation (approaching negative 1), they tend to move in opposite directions. A correlation close to zero means two assets move independently.
 
As you can see in the chart below, gold's correlation with other assets is very low. That's exactly why gold works so well in a portfolio when markets are weak…
 
This paper confirms decades of academic research that gold and other precious metals are uncorrelated, both during normal times and during times of economic stress. Gold is a hedge – its price doesn't usually follow other assets during normal times. It is also a safe haven – during abnormal times, when the prices of other assets crash, precious metals prices tend to rise.
 
The researchers studied different kinds of economic and market events that cause precious metals to become safe havens. They identified three general types of market-stress indicators: financial market stress, political stress, and consumer sentiment.
 
They found that political and policy risk is "a positive and robust determinant across countries when precious metals are safe havens against stock and bond markets tail events."
 
In other words, precious metals tend to rise the most – offering the strongest safe-haven protection – during market distress triggered by government policy uncertainty.
 
To see the value that gold holds during economic earthquakes, consider the 2007-2008 global financial crisis…
 
From June 2007, when the crisis first broke, to the March 2009 bottom, many global stock markets went down more than 50%. And the S&P 500 dropped 55%.
 
However, during that period, the price of gold rose from about $670 to $938, for a gain of about 40%. You can see this from the chart below…
 
Why aren't, say, oil or wheat considered safe-haven assets?
 
The main reason is that physical gold has been used as a currency for thousands of years – whereas paper, or "fiat money," is a historically recent experiment. In 1971, the U.S. abandoned the gold standard – and was the last country to do so. Since then, all global currencies are backed by nothing more than faith in the government that prints the money.
 
Thus, when uncertainty about global economic policy rises and faith in government falls, gold – as the unofficial world currency – rises. Contrary to paper currencies, gold is a tangible asset which cannot be printed or destroyed. To quote another piece of (true) conventional wisdom, gold is a "currency of last resort."
 
Fear among investors is nearing all-time lows, according to the Volatility Index. This is in sharp contrast to rising uncertainty related to economic policy in the world.
 
Now is a good time to purchase some gold insurance for your portfolio.
 
Good investing,
 
Kim Iskyan
 
Editor's note: When trouble strikes the markets, owning gold can be the one thing that saves your wealth from outright disaster. Kim recently published a free special report that covers everything you need to know about the precious metal… including the three best ways to own gold today. Get the report right here.

Source: DailyWealth

Morgan – and Now Goldman – Are Finally in My China Trade

 
"Goldman Joins the China-Equity Bull Party After Missing Rally," a Bloomberg headline said yesterday…
 
The investing opportunity in Chinese stocks is massive today… It's so important, I launched a new product late last year called True Wealth China Opportunities to take advantage of it.
 
Morgan Stanley was a bit late to the party, publishing a 100-plus pager called "Why We Are Bullish on China" on February 13 of this year.
 
Now Goldman Sachs is the latest to get on board. Finally, the big financial firms see the opportunity we've been writing about for months.
 
And we have more upside ahead…
 
Property stocks and bank stocks are two of our "big four" themes for investing in China right now.
 
Now Goldman is catching on… As Bloomberg reported yesterday, "Chinese banks and property stocks are seen extending gains, with Goldman lifting them to overweight and market-weight respectively."
 
Meanwhile, our top-performing China-property recommendation in China Opportunities this year is up 37% year to date. (That's only 10 weeks!) And our WORST-performing China-property stock is up nearly 20% in the same time frame.
 
Chinese bank stocks are up year to date, too… You can see this in the performance of the Global X China Financials Fund (CHIX), which is up 13% year to date as I write.
 
Chinese property stocks and bank stocks have had a strong start to the year. But if you're not invested in China yet, you definitely haven't missed it!
 
NOBODY is invested in Chinese stocks – yet. Institutional investors are more "underweight" China today than they have been in many years. "Underweight" means they don't hold enough shares in China relative to their benchmark. They need to change that – and fast.
 
You need to get your money there first.
 
I am so excited about this, I'm taking a group of subscribers over to China in June…
 
Join me if you can – so you can see for yourself what the incredible opportunity is about. We will go as far north as Beijing and as far south as Hong Kong. You will get to know my best contacts in China. It is going to be fantastic. I can't wait!
 
If you're a subscriber and you'd like more details on the trip, e-mail my colleague Dan Ostrowski at dostrowski@stansberryresearch.com. You can also contact him by phone at (410) 864-1783.
 
Chinese stocks are still cheap – even after the recent run-up. NOBODY is invested – yet. But big money is coming, as I've explained before.
 
Morgan Stanley and Goldman Sachs are just telling their customers now… But nobody is listening yet. There's still time for big gains…
 
Come join me in June, and get the full story firsthand!
 
I hope to see you there…
 
Good investing,
 
Steve
 

Source: DailyWealth

What a Big Mac Tells Us About World Currencies Today

 
The big opportunities in currencies happen at extremes…
 
That's the moment that you want to consider trading them.
 
I don't trade currencies that often. But when these extremes materialize, I get in.
 
We haven't seen many currency extremes lately. But we are about to…
 
The U.S. dollar has gained roughly 25% in three years against the world's major currencies.
 
Said another way, the world's major currencies have lost a heck of a lot of ground against the U.S. dollar – in just three years.
 
Finally, we are approaching extreme levels. We are reaching the point where we will look to get some money outside the U.S. dollar again.
 
But where are the extremes?
 
The United Kingdom and Mexico are the obvious choices. Let's look at the U.K. first…
 
The British pound has fallen from 1.70 (in 2014) to 1.20 versus the U.S. dollar since the people of Britain voted to leave the European Union.
 
The fall has been terrible… For the last 30 years, the British pound had always rallied whenever it dropped to around 1.40. But not this time. Take a look:
 
The pound is the cheapest it has been in 30 years, relative to the dollar.
 
And that's not just on the exchange rate. England is CHEAP right now…
 
Historically, a trip to merry old England was expensive for Americans – everything cost more than it did back home. But now the situation is the opposite.
 
This next chart shows a simple example… It's the cost of a McDonald's Big Mac in England versus the cost of one in the U.S. (I use this as a quick-and-dirty way to size up the relative values of currencies.)
 
From 1999 to 2007, a Big Mac in Britain was dramatically more expensive than one in the U.S. Now it's the opposite – to a record extreme.
 
In my investing lifetime, I've never been able to buy into Britain this cheap.
 
I'm not rating the British pound a "buy" yet, because the downtrend is still in place. But I am close.
 
The story in Mexico is similar…
 
The Mexico peso is the cheapest it has been in decades.
 
Thanks in part to Trump's rhetoric, the decline in the Mexican peso has accelerated. A Big Mac in Mexico is 56% cheaper than one in the U.S. That's the record-cheapest value for the Mexican peso in two decades' worth of data. Take a look:
 
I am not buying the British pound or the Mexican peso just yet…
 
If you're a longtime reader, you know why – I want to wait for the uptrend to confirm this idea before I get into it.
 
But I will get in. These are multi-decade lows. This is an exceptional moment.
 
We will take advantage of it… Just not yet.
 
Put the British pound and the Mexican peso on your radar. When the uptrend returns, consider buying British and Mexican investments.
 
Good investing,
 
Steve
 

Source: DailyWealth

Here's Why Oil Prices Are Plummeting Today

The Weekend Edition is pulled from the daily Stansberry Digest. The Digest comes free with a subscription to any of our premium products.
 
 Crude oil is breaking down…
 
Prices plunged more than 5% on Wednesday – the biggest one-day decline since February 2016. They fell another 2.5% Thursday to their lowest level since late November.
 
West Texas Intermediate ("WTI") crude – the U.S. benchmark for prices – fell to as low as $49 per barrel on Thursday. Brent crude – the international benchmark that tends to trade at a premium to WTI – fell to around $52.50.
 
Most notably, both WTI and Brent crude are now trading below their 100-day moving averages ("DMA") – a metric followed by many technical analysts – for the first time since OPEC's historic deal was announced last fall.
 
 The recent decline is being blamed on a flurry of news this week…
 
On Wednesday morning, the U.S. Energy Information Administration (EIA) reported U.S. oil stockpiles jumped for the ninth consecutive week to another new all-time record. Supplies rose another 8.2 million last week to 528.4 million barrels, the most in history.
 
The EIA also said U.S. oil production has moved back above 9 million barrels per day ("bpd") for the first time in nearly a year. It now expects the U.S. to produce an average of 9.2 million bpd for the full year.
 
And it predicts the U.S. will produce an incredible 10 million bpd by the end of next year, for an average of 9.7 million bpd in 2018. This would top the all-time record of 9.6 million bpd set nearly 50 years ago in 1970.
 
 Doubts are also growing about OPEC's commitment to cut production…
 
OPEC recently reported that it has reduced its output by about 70% of the 1.2 million bpd it promised. But this figure is misleading…
 
Saudi Arabia – OPEC's largest producer – and Kuwait have cut their production by far more than originally promised. Without this, OPEC's compliance would be far lower. As financial-news network CNBC reported this week…
 
Despite claims from participants that the existing agreement is functioning well, it actually has fundamental flaws if you peek behind the headlines, according to Eugen Weinberg, head of commodities research at Commerzbank. "Compliance within OPEC is less than 50% if you exclude Kuwait and Saudi Arabia, who cannot shoulder the whole burden over the long term," Weinberg told CNBC by phone on Thursday.
 
Furthermore, while production cuts might be underway on the part of some participants, export numbers have not softened, hence why market supply is still elevated. "The export numbers are at the same level as last December, which demonstrates that the oil production cut is having little effect on market levels," he added.
 

"The market is looking for a price recovery from here, but as there is still not enough of a cut to send supply into deficit, I think $50 per barrel is more likely to be a ceiling than a floor with prices potentially slipping down to $40 this year," opined the Commerzbank analyst.

Of course, non-OPEC members of the deal aren't living up to their promises either… They have achieved just 66% of their promised cuts to date. And Russia – the largest non-OPEC producer – recently admitted it has cut production by just 100,000 bpd, or just one-third of what it originally promised.
 
At the annual CERAWeek energy conference in Houston this week, these members reaffirmed their commitment to reach their promised cuts before the deal expires in May. But they would not commit to extending the agreement any further.
 
In other words, even if OPEC can somehow reach its promised cuts in the next few months, production is likely to rebound soon after.
 
And according to Pioneer Natural Resources (PXD) Chairman Scott Sheffield – who also spoke at CERAWeek on Tuesday – oil will fall back to $40 per barrel or less when it does.
 
 In the Digest, we've been warning of the rising risks in crude oil for weeks now…
 
While we didn't know exactly what would eventually set off the decline, we knew that sooner or later these problems would "matter." As we wrote in the February 7 Digest
 
This mix of speculative fervor, rising production, and weakening demand is a dangerous combination… It's a recipe for dramatic declines if the rally falters.
 
As always, there are no guarantees in the markets… These extremes could grow even more extreme before they reverse. But if you're still long the oil sector, be sure to keep a close eye on your stops.

 Steve Sjuggerud believes there's more downside ahead…
 
Earlier this month, he told his readers about the two main reasons to expect much lower oil prices. As he wrote in the March issue of True Wealth Systems…
 
It's going to get ugly for oil prices… The question isn't if this will happen… The question is when. The fall could be dramatic, as I'll explain. A 50% decline is entirely possible once things get going.
 
I know that might sound crazy. But I'm not overselling it. We could be on the verge of a major decline, based on history. Right now, all signs point to lower oil prices. There are two big ideas working against oil today…
 
1.   Sentiment is at extreme levels based on our favorite measure. Oil prices fell 75%-plus after similar extremes in recent years.
 

2.   Oil fundamentals point to lower prices. The supply-and-demand dynamic is working against oil right now.
These are scary points. Cheap and hated are two of the things I look for when investing in positions going up… So expensive (bad fundamentals) and loved (extreme positive sentiment) are good signs for a short position.

In other words, oil is expensive and loved – the exact opposite of what he looks for in a good long investment. But crude prices were still in an uptrend, so he didn't recommend shorting oil just yet.
 
This week, that changed… Steve says it's now time to short oil. As he wrote in a special True Wealth Systems update on Thursday…
 
Last week, we laid out the case for betting on lower oil prices… But oil hadn't broken down enough yet. We couldn't bet against the trend, so we told you to wait. Well, the trend in oil has broken down. And that means it's now time to bet against oil prices…
 
Nothing has changed since our issue last week… Both of these [reasons] are still true. What has changed is the trend. Last week, oil prices were still trending higher. But after a 5% fall [Wednesday], that's no longer the case. Take a look…
 
Oil fell by 5% [Wednesday] and is down around 3% [Thursday] morning, as I write. This is a clear breakdown in prices. And that means we want to place our bets against oil now.

 But Steve doesn't actually recommend shorting oil or oil stocks…
 
Instead, he has found an even better, "one click" way to profit from crude's decline… He expects True Wealth Systems subscribers could see quick 30%-40% gains as crude continues to fall. And history suggests triple-digit upside is possible before it ends.
 
You can get instant access to Steve's recommendation with a 100% risk-free subscription to True Wealth Systems. But we should warn you… if you've never tried this service, you may be surprised.
 
You see, True Wealth Systems is unlike any other service we publish. In fact, it's based on a strategy that runs counter to much of the advice you've learned from Porter and our other analysts over the years. But the results are undeniable…
 
Steve's True Wealth Systems approach has trounced the market by 50%, on average, on every trade it has made. And these aren't "cherry picked" results… These are Steve's actual audited results of every single True Wealth Systems recommendation across 90 trades over the last five years.
 
You can learn more about True Wealth Systems – including how you can try it for 30 days absolutely risk-free – right here. (This does not lead to a long video presentation.)
 
Regards,
 
Justin Brill
 

Editor's note: Imagine, every time you invest… you know going in that you could do 50% better, on average, than whatever the stock market returns. This proven "D-30X" approach shows you exactly when to buy – and sell – the most lucrative stocks and assets in order to secure the biggest potential gains. Get all the details right here.

 

Source: DailyWealth

How to Inherit 20 Years of Business Know-How in a Single Year

 
The big problem everyone has when starting a new business is ignorance.
 
New entrepreneurs don't know how the business should work – where to go for customers, how much to charge for the product, how many customers are needed for the business to become profitable, and so on…
 
The solution to ignorance is learning. And there are basically two ways to learn about a business: (1) by attending seminars, taking programs, and reading books – all of which provide generalized, secondhand knowledge about the industry – and (2) by interacting personally with people who are in business and getting firsthand advice from them.
 
I once had the pleasure of mentoring a young man many years ago. He had started a new division in a publishing company for which he worked. He was "full of energy," as he told me, but "knew almost nothing about how to start the business."
 
His solution was simple: He would ask everybody he could how to do it.
 
"Talking with people, at least once a week, about what to do next kept me from wasting energy on ideas that wouldn't work," he said. "I absorbed 20 years' worth of publishing experience in one year. And I did it by constantly reaching out to my peers and my mentors about every important marketing and product decision. Their ideas didn't drown my vision, but helped enormously to refine my efforts and make them much more successful."
 
He was very clever in the way he took advantage of mentoring. And I'm sure that was a big factor in his success. (In less than seven years, he grew his division from nothing to more than $20 million in annual revenue. Today, it is a $100 million, highly profitable business.)
 
Here is what he did:
 
1He quelled inhibition.
He was not afraid to ask questions, even obvious questions. At his age, I was always afraid to ask questions because I didn't want to show my ignorance. Showing my ignorance was tantamount to admitting weakness. Since I imagined myself to be in a survival-of-the-fittest career, I pretended I had no weaknesses.
 
I didn't understand one thing at the time… And that was there were people in my business who wanted me to learn – who knew I was ignorant – and yet, they valued me anyway. At the top of that list was my boss, the guy who hired me and had a vested interest in my success. He was not only open to questions, he also welcomed them.
 
I was that person for this young man. I was thrilled to answer every question he asked and some he didn't ask but should have – and I always made sure I gave him a full and complete answer. His success was my success, too.
 
During his year as my protégé, we spent many hours together. At the end of our mentorship, I felt he had absorbed almost everything I knew about his type of business.
 
2He double-dipped… regularly.
I wasn't his only mentor. He had many. He asked questions to lots of other people who had different perspectives on the business, including colleagues that I introduced him to. (He would take their business cards and follow up with them later.)
 
3He asked up, down, and sideways.
Although his primary mentors were experienced businesspeople who had already done what he wanted to do, he had all sorts of temporary mentors, including competitors and even his own employees. Before he began a project, he sought opinions about it from anybody and everybody who might have something helpful to say.
 
4He conducted regular maintenance.
He realized that the proper and just reward for a person giving advice is getting thanks. And he was always good about thanking me and his other mentors… and maintaining a positive relationship. Most of the time, he sent a personal note, which was thanks enough. Sometimes, he sent personal gifts. (Bottles of wine and hand-rolled cigars were my good fortune.)
 
5He owned up.
He made his own decisions and took responsibility for them. He knew that the ultimate responsibility for the success of his business laid with him, so he always made it a point to review all the advice he had received and make a decision that was his own. Often, the decision was a combination of advice he had gotten and some unique twist that came from his own imagination.
 
After making a decision, he took full responsibility for it. If it worked, he gave credit to everyone who had helped him make it. If it failed, he accepted the loss as his.
 
If you follow these steps, you'll spend your energy doing what works for the experts. You'll acquire the kind of business know-how that it usually takes decades to discover. And most likely, you'll enjoy the same success as the man I once mentored – not just in business, but in anything else you pursue.
 
Regards,
 
Mark Ford
 
Editor's note: Now you can gain access to decades' worth of wealth-building wisdom, all in one place. Mark has helped dozens of his protégés become millionaires over the course of his career… And in the last few years, he has compiled all of his strategies and secrets for making money into a single mentorship program. To learn more, click here.

Source: DailyWealth

How to End up With a 434% Winner

 
We're up 434% on one trade in my True Wealth Systems newsletter…
 
How did we do it? How do you end up with a 434% winner?
 
The answer is simple. But it's hard to put into practice…
 
If you want to make 434%, you can't sell when you're up 5%, or 10%, or 25%, or 50%, or 100%.
 
The math is obvious… If you sell when you're up 20%, you'll never see a 400%-plus gain.
 
Have you ever had a 400% gain? Why not?
 
The most likely reason is that you sold too early… My friend, you can't do that! Selling early hurts – more than you can imagine…
 
What distinguishes a great track record from an ordinary one? It's typically one thing: a couple of big winners…
 
If your track record includes a lot of ordinary returns and a couple of big winners, then chances are you're doing well with your investments.
 
But if you have a lot of ordinary returns and NO big winners, then chances are you're underperforming the market.
 
You can't underestimate the power of big winners. You can't sell early.
 
You see, your investment doesn't know or care where it's been. It doesn't care if you're sitting on a profit… or a loss. It doesn't know or care that it's up 100% or more. Only you care. And an investment doesn't start falling just because it has gone up 100%.
 
You have to change your thinking on this. Let me show you how I think…
 
The headline to the December issue of True Wealth Systems read: "Up 289% – With Triple-Digit Upside Remaining."
 
Think about that: We were up 289% on one trade… and we didn't sell! On the contrary, we told readers to buy even more!
 
In that December lead story, I wrote, "In two years' time… If things go according to plan, we'll lock in a gain of roughly 700%."
 
Now – here in early March – we're up 434% on this trade!
 
The simple secret to making huge returns – and building an outperforming portfolio – is to NOT sell too early.
 
Change your thinking on this. Resist the urge to take the profit just because it's there. You will end up a far more successful investor than you can imagine…
 
Good investing,
 
Steve
 
Editor's note: Steve has put together a presentation explaining how to spot every big gain in the market's most lucrative stocks and assets. It's a proven approach to making huge returns, often 100%-plus… no matter what's happening in the overall economy. Learn how to capture the big winners and start outperforming the market right here.

Source: DailyWealth