The Real Story Behind New Highs Will Surprise You

 
"Markets around the world are hitting record highs, Steve… I'm worried they can't possibly go any higher."
 
I've been hearing this for years. And I get it.
 
Stocks have been going up for years. And we're near new highs around the globe right now…
 
U.S. stocks just hit a record high last week. U.K. stocks hit new highs within the last month… German stocks too. Japanese stocks haven't hit a record high, but they hit a 17-month high recently (which is still impressive).
 
It's not just these markets… All around the world, stocks are soaring.
 
As soon as any market hits a new high, investors get worried… They think it can't go higher.
 
But this is dead wrong, as I'll show you today. These new highs are great to see in the short term – though potentially problematic in the long term.
 
Let me explain…
 
From an emotional perspective, I understand why people worry about new highs. But I also know what the math looks like…
 
The numbers tell a very different truth than you might expect.
 
I looked at the major world stock markets going back to the 1960s. (That's half a century of data for each country.)
 
Specifically, I wanted to find out what happened to stock markets after they hit new 12-month highs.
 
The table below shows what happened to the markets one year after they hit new 12-month highs, versus new 12-month lows.
 
One-Year Returns After Extreme
Country
After 12-Month High
After 12-Month Low
All Periods
Japan
19.3%
2.7%
7.6%
U.K.
6.4%
-1.8%
5.2%
Germany
9.1%
7.3%
7.1%
U.S.
8.8%
2.6%
6.8%
Source: MSCI
The conclusion is simple: Stocks perform fantastically a year after hitting a new 12-month high. And they perform terribly in the year after a 12-month low.
 
In short, markets perform well after new highs, and poorly after new lows.
 
Last week, many markets hit new 12-month highs. This is actually a good sign looking one year ahead – not a bad one.
 
But how long will it last?
 
If you think markets have to fall back to Earth eventually, you're right.
 
The market does fall… at some point. It just doesn't happen as quickly as most people expect.
 
We've already looked at what happens one year after a market hits a new high or low. Now let's take a look at what happens in the long run…
 
Here's a table of the annualized returns of stocks five years after a new 12-month high or low.
 
Five-Year Returns After Extreme
Country
After 12-Month High
After 12-Month Low
All Periods
Germany
4.0%
13.9%
7.3%
U.K.
3.4%
9.4%
6.3%
Japan
8.2%
6.7%
6.6%
U.S.
6.3%
8.1%
7.2%
Source: MSCI
After stocks hit a 12-month high, they tend to underperform their typical returns for the next five years. (Japan seems to be an exception to the rule.)
 
The opposite is true as well… After stocks hit a 12-month low, they outperform their typical returns for the next five years.
 
So what can we take away from these two tables?
 
1.   In the short run (one year or less), markets really do keep going up after hitting new highs.
   
2.   In the long run (around five years), markets do "fall back to Earth" after hitting new highs.
Said another way:
 
1.  The trend works in the short run.
    
2.  Mean reversion works in the long run.
Most people don't want to hear this… They seem predisposed to only believe in one of those two things.
 
But it is true across nearly all asset classes.
 
So, here's what we can take away from this today: Based on history, stocks around the globe should continue higher in the next year. And in the next five years, they should underperform.
 
This also fits with my basic thesis: "Melt Up, then Melt Down."
 
I believe stocks can move much higher over the next 12 to 18 months… before finally falling lower as the extremes revert back to normal.
 
For now, that means we want to stay long stocks.
 
Good investing,
 
Steve
 

Source: DailyWealth

The Companies to Own for the Coming 'Supercycle'

The Weekend Edition is pulled from the daily Stansberry Digest. The Digest comes free with a subscription to any of our premium products.
 
 Today, I (Flavious) want to talk about what I expect in the near term with oil prices…
 
These days, just about everything you hear about oil is negative. And while I'm incredibly bullish over the long term, I believe we could first see more trouble across the sector…
 
Continued drilling and rising U.S. production will keep a lid on prices. At today's prices below $50 per barrel, all but the very best companies are still losing money… And many still carry a heck of lot of debt.
 
I think we'll see another wave of bankruptcies before the bear market finally ends… These high-cost, high-debt firms will lead the way.
 
But it's not all "doom and gloom." These troubles will finally set the stage for a real recovery… And this one will be led by the good ol' USA.
 
 Here's the thing: I think oil prices are a lock to soar over the next several years…
 
I expect we'll see a $500 price tag on a barrel of oil before the next boom is over… And early investors in the right American companies will get filthy rich as they do.
 
The reason is simple… Oil demand is going to absolutely soar.
 
Today, the U.S. remains the world's largest consumer of oil. We use nearly 20 million barrels of oil per day. This is nearly double the next largest consumer, and more than four times as much as any other nation on the planet. This shouldn't be a surprise to anyone…
 
But as I showed you earlier this week, the second- and third-largest consumers are no longer "developed" nations as they were for most of the past century…
 
Those titles now go to China and India. These two countries account for most of the demand growth we've seen in the last decade or so. And it's just a tiny fraction of what we could see in the next 20 years.
 
As I mentioned, the ongoing industrial revolution in China will lead to much higher demand for oil from the mobilization of the country's nearly 1.4 billion people. And India has even more room for growth… Its 1.3 billion people use just one-third of the oil used in China.
 
 So what kind of growth are we talking about?
 
As I said Wednesday, even if demand in China and India rises just five barrels of oil per person per year – about one-quarter of what we use today in the U.S. – global consumption would rise by nearly 10 billion barrels per year.
 
That's an increase of nearly 30% over today's levels… and that's a conservative estimate over the next 10 to 20 years. Even with rising shale oil production, this kind of demand growth will dwarf global supply… and send prices soaring.
 
This surging demand will create a boom unlike any we've seen in decades – or maybe ever… Porter and I agree that we could see oil at $500 per barrel or more before it's all said and done.
 
I also expect that for the first time in our lifetimes, the U.S. – rather than OPEC – will become the world's most important oil producer.
 
 Why? Because no one else is as perfectly positioned to meet the demand for more oil…
 
If you've been a Stansberry Research reader for long, you know that new technologies like horizontal drilling and hydraulic fracturing ("fracking") have transformed the oil business.
 
They have not only unlocked a whole lot of oil that wasn't available before… but they've also made getting that oil out of the ground cheaper and less risky than ever before.
 
For generations, oil was drilled one way. We drilled straight down into the ground. But these "conventional" vertical wells are a crapshoot. Only one out of 10 wells drilled this way produces enough oil to make a profit.
 
This means that one good well has to make enough money to cover the cost for all 10. That's an expensive and risky way to do business… But for years, that's all we had.
 
But these new technologies have completely flipped the equation… Today, as many as nine out of 10 "unconventional" horizontal wells are productive.
 
We can spend a heck of a lot less money and produce more oil per well. And as I like to say, more oil plus less cost equals more profit.
 
 Who will reap the biggest rewards from the coming boom?
 
Naturally, it's going to be the companies with the most experience and expertise using these new technologies. And it just so happens they're located right here in the U.S.
 
Fact is, our exploration and production companies are the best in the world at both finding and producing new sources of oil.
 
They're the ones who created and developed these new technologies in the first place… And they're years ahead of the rest of the world at putting them to use. Because of this, they'll be the first to react when demand rises and prices start to move higher.
 
Of course, the companies that will benefit the most will be those that also own the best deposits in areas like the Bakken Shale in North Dakota, the Eagle Ford Shale in South Texas, and – best of all – the Permian Basin in West Texas and southeastern New Mexico.
 
Despite the big drop in prices, America's best oil companies are already doing well… But they're going to make an absolute killing when prices finally start to rise.
 
I'm going to do everything I can to make sure Stansberry Research readers are along for the ride.
 
 Earlier this week, we talked about a lot of these details during a free webinar…
 
And if you were there, you know we also officially introduced our brand-new resource advisory: Commodity Supercycles. If you weren't able to join us, it's not too late to get the details for yourself – including everything you need to know to profit from the next oil boom – with a charter subscription to Commodity Supercycles.
 
Unlike many of our high-end services, Commodity Supercycles is designed to be accessible – and affordable – for virtually any investor. Better yet, as a charter subscriber, you can lock in the biggest discount we'll likely ever offer on this service.
 
The regular price of Commodity Supercycles will be $199 per year going forward. That's just $0.55 a day. But if you sign up today, we'll knock more than 25% off the normal cost… and throw in a second year for FREE. That's two full years for less than $0.25 a day.
 
We know of no other service anywhere that offers the potential for truly life-changing gains of up to 1,000% or more at such a low price. Click here to see for yourself.
 
Good investing,
 
Flavious Smith
 
Editor's note: On Wednesday night, Flavious and Porter sat down to explain why they believe we're approaching the next "supercycle" in the oil and gas sector. As a 40-year veteran of the industry, Flavious says he has never seen an opportunity like this. Right now, you can gain access to all his research for the next two years at a steep discount. Learn more here.
 

Source: DailyWealth

Are You an Amateur or a Pro?

 
Did you panic? Were you afraid?
 
Last month, on Wednesday, May 17, stocks got beaten up. After starting the week at new highs (around 2,400 on the S&P 500 Index), stocks fell nearly 2% – their worst one-day fall this year.
 
Anytime investors are reminded that stocks can go down as well as up in value, our mailbag "lights up." Subscribers suddenly want to have constant contact with us. They need reassurance.
 
Friends… If last month's market action bothered you in any way, there's a huge problem with your portfolio.
 
Think honestly. When you first saw how the market was going to open (way down) that day, what was your first reaction? Or, if you didn't see the open, what happened that night when you first saw the news? Or during the day when stocks just kept going down, lower and lower?
 
Be honest with yourself. If you felt even a twinge of fear, you've got a big problem. Let me explain why…
 
May 17 saw about three weeks' worth of market gains wiped out, temporarily. It was a tiny, 2% move lower. It wasn't a bump in the road. It was barely a ripple on the calmest lake the equity markets have ever seen.
 
Since 2015, stocks have been ripping higher, propelled by "rocket fuel" – central banks, sovereign wealth funds, corporate buybacks, and value-ignoring index-fund investors. There's hardly been a down day in nearly two years. This incredible rally has created record levels of investor complacency – aka, investor stupidity.
 
It has also, almost surely, lulled many of our subscribers into portfolio-allocation decisions that are far too aggressive.
 
It's like this… On the golf course, virtually every amateur player overestimates how far he can hit the golf ball, usually by 20% or more.
 
Why? Because our best-ever shot becomes our expected outcome.
 
As we're sitting there on the tee box, we're thinking, "I crushed the ball the last time I played this hole. I'm sure I can do it again." Instead of making a conservative swing on the ball – a swing we can hit well nine out of 10 times – we end up taking the big cut… the move that almost never works.
 
Pro golfers don't make this mistake. They study the distance of every club in the bag, based on their most repeatable swing. They know their distances down to the precise yard. And they don't try to make swings they can't repeat virtually every single time.
 
Amateur investors make the same kind of mistake as amateur golfers.
 
They vastly overestimate the expected outcome of their investments. Think about this the next time you buy a stock. Write down what you're expecting to make (annualized) from the investment. Now go and look at what your actual annualized returns have been from similar investments.
 
The odds are you're overestimating your expected returns by at least 100% – meaning, you're expecting to make twice as much as history suggests you will.
 
You're probably doing the same thing right now in your portfolio: you're holding positions because you're sure they're going to soar.
 
Meanwhile, it's unlikely stocks will produce the sort of returns you're expecting…
 
With stocks trading at near-record valuations, with GDP growth below 3%, with consumer debt crashing, with extremely low interest rates, and with weak and declining commodity prices, it's unlikely stocks will produce double-digit annualized returns in the time frame you're planning for. Very unlikely. Virtually impossible.
 
But every time you buy a stock, I'm sure you expect to make more than 20% over the next year. Or maybe even in the next quarter.
 
That's because, like an amateur golfer, you're thinking of that great "shot" you hit back in 2015 – that stock you bought two years ago that's soared with the market.
 
But that's not what's going to happen this time.
 
Last month's one-day fall was a warning from the stock market "volcano."
 
It was just a minor rumble. A tiny taste of what will happen when we get hit with another bear market and the major indexes fall more than 20%.
 
If you were worried last month, you'll be crushed – wiped out – by a bear market.
 
I know… you say you will follow your trailing stops. Or, you say you will just hold on "no matter what." But almost everyone who sets out to be a "buy and hold" investor ends up becoming a "buy and fold" investor. Just as you overestimate your expected returns, you're also overestimating your risk tolerance.
 
If you'd asked investors back in 2009 about their risk tolerance, they all would have said "none." They would have told you, "I'm tired of stocks. I only want safe investments. Just give me something that's safe."
 
Today, you hear exactly the opposite. At conferences, I'm constantly seeing subscribers telling people, "I'm an accredited investor. I can handle the risks."
 
But they can't. Not really. Almost no one can.
 
Here's the best way to think about the risks you're taking…
 
If you're 100% invested (long stocks) it's only a matter of time before you suffer a 50% drawdown – at a minimum. Warren Buffett, the world's best long-only investor, has seen the value of his equity holdings drop by 50% three times in his career. And it has happened twice since 1999.
 
You probably aren't as good of an investor as Buffett. It's likely that your results won't be as good as his have been… which means that if you are a long-only investor, you will (not might) suffer more than a 50% decline in the value of your equity portfolio.
 
If you're using trailing stops, you can greatly limit this volatility.
 
And that's why I endorse TradeStops so strongly. (To be fair, I'm also a part owner of the company. But I invested in it because I share in Richard Smith's mission… To give individual investors the best possible tools to help them become more successful investors.)
 
In fact, if you merely use a trailing stop loss and reasonable position sizes, I can almost guarantee that your investment results will become dramatically better.
 
And there's another, even better way to limit the volatility of your portfolio.
 
Consider "hedging" your portfolio by adding small positions in investments that are designed to go up when the stock market goes down – like short sells and gold stocks. You should also consider a big allocation to short-term corporate bonds and mortgages. Or if you don't understand these kinds of investments, then simply hold cash.
 
In our Portfolio Solutions newsletters, The Total Portfolio is a diversified and hedged portfolio…
 
At the time, on May 17, we had about 25% of the portfolio in corporate bonds. Some of this allocation (10%) was directly in carefully selected high-yield bonds. But the majority of this allocation to fixed income was via high-quality insurance stocks, which are really just big piles of bonds (plus underwriting profits).
 
This is the kind of firm foundation we want in our portfolio. And to further reduce volatility, we had another 20% of the portfolio long super-safe mortgages and cash-like, very-short-term loans to investment-grade corporations.
 
Thus, about 45% of our portfolio was in fixed income and cash. It was like driving with a parachute tied to our car. It probably limited our top speed… But it kept us from crashing in the corners. That doesn't mean we can't still produce very good results, though. In our most recent issue of The Total Portfolio, we reported about a 21% annualized rate of return.
 
But the real magic in what we're doing comes from the two things that you probably won't do. Ever.
 
When stocks fell that day, we had 10% of the portfolio allocated to short-sell positions and gold stocks. This strategy doesn't reduce volatility, as these positions are enormously volatile. But they're also negatively correlated. So, when stocks go down (like they did on May 17), this part of the portfolio goes straight up.
 
That day, the S&P 500 dropped 1.8%. Our Total Portfolio was down, too… But only by 1.3%.
 
That probably doesn't seem like a big difference to you. But proportionally, it's a huge difference. Our portfolio's decline was more than a quarter less than the S&P 500's. What if the market's move down had been 10 times worse, like a correction or even a real bear market?…
 
I'm certain you'd feel a lot better looking at a 13% portfolio decline than an 18% portfolio decline. And if you can get this reduction in risk without a corresponding decline in performance, why wouldn't you hedge your portfolio?
 
Again, if you looked carefully at our Total Portfolio last month, you'd have found a very conservative allocation mix, with almost 50% of the portfolio in very stable investments like mortgages, corporate bonds, or short-term credit facilities, and with an additional 10% of the portfolio completely hedged (short positions, gold stocks). This allocation allowed us to reduce our downside by almost 30% on the market's worst day of the year so far.
 
If you were nervous on May 17… change your allocation immediately. Act like a pro. Go for the "shot" you know you can hit. Stick with an allocation that lets you sleep at night and that fills you with confidence on bad days in the market.
 
Good investing,
 
Porter Stansberry
 
Editor's note: TradeStops features a great set of tools to help you manage your asset allocation, track your trailing stops, and more. It's by far the easiest way to protect your portfolio from market volatility. But even more important, TradeStops can now help you collect thousands of dollars in unclaimed profits – on every stock you own… Click here to learn more.

Source: DailyWealth

When This Happens… It's Time to Get Out

 
Last month, my True Wealth readers closed what I called the "Bacon Cheeseburger Trade" for a 26% gain in just six months.
 
We bought for a specific reason, as I'll show today. And because of that, we stuck to our discipline. We followed the most important rule in finance and investing…
 
That is, when the facts changed, we changed our minds.
 
That's an important lesson. So let me share the details with you…
 
The "Bacon Cheeseburger Trade" was a simple bet.
 
We were betting on higher prices for the components of a bacon cheeseburger… cattle and hogs. Here's what the story looked like seven months ago…
 
Hog prices were down 69% from their peak in 2014. And cattle prices were down 41% from their highs. It was the biggest fall in cattle prices ever, with data going back more than 50 years.
 
Fear was high in the cattle and hog markets. And if you're a longtime reader, you know that's just what we want to see.
 
When I recommended the trade, I said I didn't pretend to know anything about the cattle or hog markets. Hogs and cattle were cheap and hated… That was about all I needed to know.
 
But the story changed… So I changed my mind.
 
Cattle prices soared. A blizzard squeezed production by killing cattle throughout the Midwest, causing a supply shortage.
 
Cattle prices moved higher… And sentiment went from negative to positive.
 
To gauge sentiment in a given asset class, we look at the Commitment of Traders ("COT") report, a measure of what futures traders are betting on. Sentiment for cattle prices hit its highest level since 2014… and its second-highest level in a quarter century. Take a look:
 
The only other time futures traders were even close to today's bullish extreme was in 2014. And what happened back then wasn't pretty…
 
Cattle prices peaked shortly after that… and entered a multiyear bear market. The commodity fell more than 40% from its 2014 highs to its 2016 low.
 
That was a dramatic fall. And after earning healthy profits, we were looking at the potential for a similar decline.
 
My original plan was to sell half of our position once we were up 25% and then sell the other half when it was up 50%. But the facts changed – so we changed our plan.
 
Sure, prices could have gone higher in the short term. But with extreme optimism, our upside was limited… And our downside risk was large.
 
The reason we bought was gone… We were sitting on healthy profits… And the risks in our trade had ballooned.
 
In other words, the facts changed, so we changed our minds.
 
You should always know why you're making a trade. And if you find that your reason no longer exists… it's time to get out.
 
This is the most important rule of finance and investing. Make sure you're following it in your own portfolio.
 
Good investing,
 

Steve

 
P.S. We booked a 26% gain on the "Bacon Cheeseburger Trade" in only six months. And now, we've found a nearly identical trade setting up in the markets. I can't share the details with you right now… But I've written all about this idea in my next True Wealth issue, coming out tomorrow. If you'd like to know the details, you can learn more about subscribing to True Wealth by clicking here.

Source: DailyWealth

Two Emerging World Powers Will Change the Oil Industry Forever

Editor's note: The headwinds facing oil prices are clear. Even Steve recommended betting against oil for the short term back in March. But our in-house resource guru, Flavious Smith, believes oil prices won't stay down for long.
 
In today's essay, he explains why two of the world's largest countries will send demand – and prices – soaring to unimaginable heights in the years to come…
 
Don't be fooled…
 
When things look bad, it's hard to imagine anything changing.
 
Oil prices have been crushed. But the world is about to experience a huge shift. It's already starting. And I believe it's going to turn things around for the oil industry – in a big way…
 
 
Japan uses a lot of oil, too. And again, given our high standards of living, that shouldn't come as a surprise.
 
But zoom out and you realize that the total population of both countries is only around 450 million people – around 6% of the world's population.
 
Meanwhile, China has a population of nearly 1.4 billion. It uses 4 billion barrels of oil per year – about 11 million barrels per day.
 
In other words, the U.S. – with a population about one-fifth the size of China – consumes almost two times more oil.
 
But here's the kicker…
 
China is in the middle of another industrial revolution. Poverty is decreasing, and the middle class is growing. The standard of living is on the rise. The Chinese are driving cars and scooters, watching TV, using a lot of electricity, and making a lot of stuff.
 
By next year, China is set to overtake the U.S. as the world's largest importer of crude oil.
 
The following graphic shows how much oil consumption grew from 2005 through 2014 in many countries around the world…
 
China's economy has grown 900% since 1999. Over that period, it has grown to be the world's second-largest economy at more than $10 trillion.
 
Instead of bicycles crowding the streets, the Chinese are driving cars and scooters. Vehicle sales have exploded, and demand for oil has nearly tripled in the last 20 years alone. And as you can see from the following chart, it's still growing…
 
Note the increase in gasoline demand since 2005. This is an early indicator of more demand to come from the mobilization of China's nearly 1.4 billion people.
 
But if this looks promising, you ain't seen nothing yet…
 
For as big of a catalyst as China will be for oil prices, India has even more potential to move the needle.
 
There are around 1.3 billion people in India… around three times the combined population of the U.S. and Japan. India uses 1.5 billion barrels of oil per year, or about 4.1 million barrels per day.
 
That's just a fraction of the oil used in China. But India is expected to add another 241 million "people of working age" by 2030. And you can bet that most of them will be driving cars, watching TV, and making stuff. Soon, India will pass China to become the world's highest-populated country.
 
Because of that, India is expected to be the fastest-growing consumer of crude oil in the world through 2040, adding 6 million barrels a day of demand (versus 4.8 million barrels a day for China)…
 
Three main catalysts will drive oil demand higher in India…
 
1.  
A rise in per capita oil consumption reflected in the rising motorization of the Indian economy.
 
2.  
A massive program of expected road construction amounting to 30 kilometers per day.
 
3.  
A push toward increasing the share of manufacturing in GDP. India's GDP is growing so rapidly that consulting firm PricewaterhouseCoopers predicts it will overtake that of the U.S. by 2040.
 
China and India's combined population is 2.7 billion people. What happens when 2.7 billion people begin to use oil at the rate of the U.S. and Japan?
 
See where this is going?
 
Today, the U.S. and Japan use about 19 barrels of oil per person per year. Even if China and India consume just five barrels of oil per person per year by 2030, that amounts to more than 13 billion barrels of oil… increasing world demand by more than 9 billion barrels per year.
 
The pullback in oil prices since 2014 has beaten down most exploration and production companies – the ones that drill the wells and produce the oil and gas. But with demand in China and India set to explode, oil prices may never be this low again.
 
Good investing,
 
Flavious Smith
 
Editor's note: Tonight, Flavious – a legend in the oil business – is joining Porter Stansberry in a free live event. They'll explain why dozens and dozens of oil companies are headed for bankruptcy… and why that will lead to the biggest explosion in oil prices we've ever seen. Most important, they'll reveal exactly how to profit from it. Tune in at 8 p.m. Eastern time, TONIGHT only. Save your seat right here.

Source: DailyWealth

Despite the Headwinds, Oil Prices Are Heading Much, Much Higher

Editor's note: Today, we're sharing an essay from a new addition to the Stansberry team, longtime oil-industry titan Flavious Smith. Some of you may have seen this piece in our latest weekend edition of the Stansberry Digest. However, this prediction is so momentous that we felt it deserved a wider audience.
 
You see, despite the glut of supply keeping oil prices down, Flavious is bullish. Here's why he expects oil to soar spectacularly over the long term…
 
"Boy, you can't score a touchdown if you're not in the game."
 
My grandfather must have told me that a hundred times growing up. It was good advice for the gridiron. But as a kid, I never imagined it would apply to my career in the oil business.
 
But it turns out grandpa's advice was useful beyond my playing days. As resource investors, we must always be looking for value. We can't wait for good things to happen… because by then, the big opportunities will be gone.
 
Oil prices will move higher soon. And that's why you want to be in the game now…
 
Today, you turn on the TV and hear nothing but bad news in the oil industry. Oil prices are down and going lower. Reports estimate that the U.S. has lost 200,000 oil and gas jobs since mid-2014.
 
There is some hope. Investment bank Goldman Sachs says half of those jobs might return by 2018. But I'm not sure where you'll find the talent. Most of those folks have left to work construction or at the local car lot.
 
As prices fell to as low as $27 a barrel last year, revenues dropped, and debt crushed many companies. A wave of bankruptcies swept across the industry.
 
According to bankruptcy-law firm Haynes and Boone, 114 exploration and production ("E&P") companies declared bankruptcy from January 2015 through last December. The combined debt for these companies totaled more than $74.2 billion. Over the same period, 110 oilfield-services companies went belly up… with total debt of more than $18.8 billion.
 
That's 224 bankruptcies and $93 billion in debt.
 
But we're just getting started… We'll see another massive wave of bankruptcies before the oil and gas sector emerges from this ongoing bear market. The continued drilling and near-record production will keep driving oil prices lower. The companies with higher costs and big debt loads will become the next victims.
 
Two months ago, I attended the Oil & Gas Investment Symposium in New York. More than 70% of the companies presenting had debt levels that exceeded their market caps. Things won't end well for these companies.
 
Today, oil trades around $45 a barrel. But as long as oil stays below $50 a barrel, almost every oil play in the U.S. is uneconomic. Low oil prices are killing entire economies. The cost of getting a barrel of oil out of the ground in Russia is about $70. In Iran, it's in the mid-$60s. In the North Sea around Western Europe, it's $55.
 
With a few exceptions, the Saudis – whose production costs sit around $25 per barrel – are in the catbird seat.
 
Meanwhile, global oil production is about 98.5 million barrels per day, while demand is about 97 million barrels.
 
And yet… despite all of these headwinds, I'm bullish on oil prices. You see, in the next few years, oil demand is going to absolutely skyrocket.
 
Today, the U.S. is the largest consumer of oil on the planet. We use about 7.2 billion barrels per year, or nearly 20 million barrels per day…
 
Meanwhile, our friends in Japan use nearly 5 million barrels of oil per day, or around 1.8 billion barrels per year…
 
Both countries have a high standard of living and industrialized economies. We make a lot of "stuff," we drive a lot of cars, we watch a lot of TV, and we use a lot of air conditioning. So it's no surprise that we use a lot of oil.
 
But as I'll explain in tomorrow's essay, this is a drop in the bucket compared with the demand we'll see going forward. Some of the world's emerging powers have the potential to kick this demand into high gear. Stay tuned…
 
Good investing,
 
Flavious Smith
 
Editor's note: Flavious is a legend in the oil business. Tomorrow night, he and Porter Stansberry will lay out the script for the next 10 years of oil prices… including why a wave of bankruptcies in the industry will lead to a "supercycle" in oil prices unlike anything we've ever seen. And they'll explain exactly how to position yourself for life-changing gains. Reserve your spot for this free event right here.

Source: DailyWealth

Why You Need to Move Money OUT of the U.S. Today

 
The "Melt Up" is in full force in the U.S.
 
Stocks are having another great year, with the S&P 500 up 9% so far in 2017. But I hope you're not solely invested here at home.
 
You see, another part of the world is actually crushing the U.S. right now. It's up 19% since the start of the year. And the long-term upside is dramatically better than the U.S. market.
 
Let me explain…
 
If you've read my work on recent months, then today's message won't surprise you.
 
The biggest and best investment opportunity in the world today isn't in the U.S. – it's in emerging markets.
 
I explained why two months ago. Here's the simple story…
 
From 2010 to 2016, the U.S. market soared. The S&P 500 increased by triple digits. It was an amazing time to be invested in the U.S.
 
What happened to emerging market stocks over the same period?
 
Emerging market stocks actually lost money.
 
It's a crazy thing to imagine happening… a massive block of the global stock market losing money over a six-year period. But it happened. And it set up a fantastic buying opportunity.
 
You see, one of the oldest rules of finance is something called "mean reversion."
 
The idea of mean reversion is that, yes, crazy things can happen – but no, they can't happen forever. The tech bubble in the late 1990s is a perfect example…
 
Internet stocks soared throughout the 1990s. The crescendo happened in early 2000 when companies like Microsoft (MSFT), Cisco (CSCO), and Qualcomm (QCOM) hit true bubble valuations… All three traded for more than 25 times sales.
 
What happened next? Mean reversion…
 
Tech stocks crashed. And plenty of them never recovered. It took Microsoft and Qualcomm well over a decade to come back up to their dot.com-peak share prices. Cisco still hasn't done it.
 
The point is that crazy things can happen in the markets… But mean reversion says they can't last forever.
 
And mean reversion tells us we want to invest in emerging markets right now.
 
From 2010 to 2016, U.S. stocks dramatically outperformed emerging markets. They increased triple digits, while emerging markets lost money.
 
The only other time we've seen emerging markets underperform the U.S. like this was the late 1990s. What happened then? Mean reversion took over… And emerging markets went on to soar 400% in just a few short years.
 
That's the kind of upside we have when mean reversion kicks in… And I believe it's starting now.
 
Remember, U.S. stocks are having another banner year, up 9% so far. But emerging markets have more than doubled that return. They're up 19% this year.
 
History tells us this is just the start. It tells us that emerging markets will likely continue to outperform… for years to come. And triple-digit gains are likely from here.
 
So, while I hope you're invested in the U.S. and profiting from the Melt Up, please don't fully invest in U.S. stocks.
 
Some of the biggest winners over the next few years likely won't be here at home… They'll be in emerging markets. Don't miss it.
 
Good investing,
 
Steve
 
P.S. Emerging markets are driving another major investment story on the horizon. It has to do with the resource market… And it's a message I promise you haven't heard. But more important, it could have a dramatic impact on your wealth in the years to come. My colleague Flavious Smith is sharing the details during a free presentation this Wednesday. You can learn more right here.

Source: DailyWealth

We Have Officially Entered the 'Escher Economy'

The Weekend Edition is pulled from the daily Stansberry Digest. The Digest comes free with a subscription to any of our premium products.
 
 Today, I (Porter) am going to introduce a new financial term…
 
I've been thinking about this a while… it's a term that describes the modern economy's fondness for central banks, paper money, huge debts, and financial bubbles. I call it the "Escher Economy."
 
I hope you'll read carefully. Remember… there's no such thing as teaching, only learning.
 
 About five years ago, investors around the world began piling into Japanese stocks…
 
It was a surprising move.
 
Japanese stocks have been a virtual graveyard for capital since the late 1980s. That's when Japan's big real estate and investment bubble collapsed. The Japanese "Dow" – the Nikkei 225 Index – briefly soared from around 10,000 to more than 40,000… and then collapsed.
 
Over the next 20 years, every rally in Japan was followed by yet another, bigger decline.
 
By 2009, the Japanese stock market was still down more than 60% from its peak…
 
 What was it that spurred global investor interest in Japan?
 
Did Japan's economy suddenly come back to life?
 
No. Japan has consistently had the worst economy among the G20 countries. Economic growth hasn't been above 2% since 2012.
 
Was there some breakthrough in solving Japan's big demographic problems?
 
No. Japan's population is declining. Japan is expected to lose more than 20% of its population by 2050 – something that hasn't happened across an entire country since the Black Death of the mid-1300s. It's unlikely that this unprecedented demographic collapse will prove bullish for Japanese asset values.
 
So… why were investors suddenly interested in Japan?
 
 Japan decided to go "John Law" with its central bank…
 
John Law was the Scottish rogue and murderer who convinced France's King Louis XV to allow him to set up one of the world's first central banks, the Banque Générale, in 1716.
 
The bank brought paper money to France and allowed the king to finance his soaring debts. Having saved the king's bacon, Law convinced the king to give him a monopoly on trade with the new world – in Louisiana.
 
The combination of virtually limitless paper money and the hottest initial public offering in history saw Law pay off the entire French government's debt just by issuing another 300,000 shares of the Mississippi Company. The share price, which went public at 75 livres, eventually rose to 15,000 before the peak.
 
It was this bubble… the forerunner to every modern financial bubble… that saw the creation of the word "millionaire."
 
 Investors were "all ears"…
 
Naturally, Japan captured investors' attentions when it announced in 2012 that it would vastly increase the asset purchases of its central bank…
 
The bank wouldn't just buy Japanese government bonds… It would also buy equities. Lots of them: $30 billion or so per year. In an attempt to make sure these purchases weren't politicized, the bank explained it wouldn't buy stock directly (it wouldn't pick stocks). It would only buy via exchange-traded funds that allocate capital according to the structure of various preexisting indexes.
 
As you'd imagine, this policy has produced a boom. And it has attracted a lot of "hot money" from around the world.
 
Look at Fast Retailing (9983.T), for example. If you've ever seen a pro golfer wearing a brand you can't pronounce (UNIQLO), you've seen the company's products. Golfer Adam Scott, for example, is sponsored by UNIQLO, among other major athletes.
 
You can think of Fast Retailing as something like the "Japanese Under Armour," a fast-growing sports-apparel business. But unlike Under Armour, which has just 29 stores, Fast Retailing continues to invest heavily in actual physical locations. It has opened more than 1,000 stores since 2012 and now operates more than 3,000 locations throughout Asia. That's almost twice as many locations as Target has in the U.S.
 
Since hitting a low in 2011 below 10,000 yen, the stock price has gone virtually straight up, to more than 60,000 yen at its recent peak.
 
This soaring share price has helped the company gain access to billions in additional new capital. In 2016, Fast Retailing took on $2.4 billion in debt (moving its debt to equity leverage ratio from four times to 47 times) and the company's CEO has announced plans to spend another $11 billion on a huge global expansion, moving into the U.S. and European markets.
 
 What's Fast Retailing's secret?
 
Is it the mystery of embroidered shirt patches nobody can pronounce? Is there something particularly unique about its Vietnamese-made shirts?
 
No, of course not. What's special about Fast Retailing, at least in the eyes of global investors, is its nominal share price. I'm not talking about the value of its total market capitalization, the sum total value of its shares. I mean the share price itself. Compared with its peers, Fast Retailing has a huge nominal share price, around 37,000 yen.
 
Why should nominal share price matter?
 
 You might have noticed the sudden popularity of huge share prices…
 
E-commerce giant Amazon (AMZN) and tech behemoth Alphabet (GOOGL) recently both saw their share price racing to $1,000. (Amazon won.) But they aren't the only companies that have deliberately let their nominal share prices soar.
 
A host of companies have super-expensive nominal share prices today, like travel company Priceline ($1,892), homebuilder NVR ($2,396), ag firm Seaboard ($4,158), auto-parts store AutoZone ($599), and robotics-surgery company Intuitive Surgical ($930).
 
Huge nominal share prices haven't always been popular. You might remember during the dot-com boom of the late 1990s, investors would pile into companies that were announcing a stock "split." That's when a company increases the number of shares outstanding, sometimes by 100%, by simply exchanging one of your shares for two new ones.
 
A share split doesn't change anything about the business. It doesn't make the company more valuable in any way. The nominal share price just falls in half as the company's shares outstanding double. But back then, investors believed that simply making the stock more affordable would lead more investors to buy it, which would push the total value of the stock higher.
 
 So what explains the new investor passion for large share prices?
 
Today, most people are investing through exchange-traded funds ("ETFs"). Most ETFs are structured according to various indexes. And several of the most popular indexes are "price-weighted," meaning that the capital is allocated according to nominal share price.
 
Investors aren't buying these stocks because the business is undervalued… or because they pay a good dividend… or because they're growing fast. They're buying simply because the nominal share price (which conveys zero information about the relative attractiveness of the investment) is a large number and thus is more likely to attract subsequent capital.
 
Said another way, the "greater fool" is more likely to buy a big nominal share price stock over any other stock.
 
Thus, the same kinds of management teams that used to split their stock to gain the attention of investors are now not splitting their shares for the exact same reason. And in Japan, that kind of investment rationale has been taken to an extreme. In Japan, the central bank is the "greater fool."
 
Japan's central bank – the Bank of Japan ("BoJ") – has been buying around 3 trillion yen ($30 billion) worth of stocks via ETFs each year, radically warping the equity market. The BoJ focused its buying on ETFs that were structured according to the Nikkei 225, which, like the Dow Jones Industrial Average, is a price-weighted index.
 
Again… in a price-weighted index, the larger the nominal share price, the larger the allocation in the index. Fast Retailing, with its huge share price, makes up about 8% of the Nikkei, a huge position relative to the total size of its company.
 
For comparison, consider that Fast Retailing makes up only 0.3% of the larger TOPIX Index, where allocations are made according to firms' total market values, not merely the nominal price of their shares. It didn't take long for investors to figure out how to take advantage of the policy.
 
 CLSA – one of Asia's biggest brokerage firms – recommended clients sell shares of Toyota, one of Japan's best global companies in 2016…
 
It replaced Toyota in its recommended portfolio with… you guessed it, Fast Retailing, purely because of its huge weighting in the Nikkei 225.
 
The broker also recommended Softbank (9984.T) for the same reason. It wasn't an endorsement of the company's reckless acquisition strategy, which involves a tremendous amount of leverage and a $100 billion "sidecar" fund that will surely cause all kinds of conflicts of interest. (Softbank is truly one of the scariest companies in the world… but that's a topic for another time.) It was an endorsement of its nominal share price. You see, after Fast Retailing, Softbank is the second-highest-weighted stock in the Nikkei.
 
Sure enough, Softbank's shares have soared, thanks to the BoJ's investment scheme. Softbank's stock was "dead money" from the tech collapse until 2012. But once the BoJ ramped up its equity purchases, Softbank's stock has more than quadrupled, moving from around 2,000 yen to more than 9,000 yen…
 
 Buying Japanese stocks between 2012 and 2016 (as they doubled) was virtually risk-free…
 
That is, thanks to the size of the BoJ's investment campaign. As Jesper Koll, who runs WisdomTree Japan, explained to the Financial Times, "There was no other equity market in the world that covered this sort of fundamental downside protection."
 
There's little doubt these huge moves will continue. Last year, the BoJ announced it would double its purchases of shares, spending at least 6 trillion yen ($60 billion) on stocks.
 
John Law would be impressed.
 
But remember… About a year after the Mississippi Company went public, food prices began to soar. To stop the runaway inflation, Law had to raise interest rates.
 
That pricked the bubble in Mississippi's stock. Within a few weeks, the whole scheme collapsed. Food prices soared another 60%, the king outlawed gold, and shares of the Mississippi Company collapsed.
 
 You can't print prosperity…
 
So I hope you will keep a careful eye on the markets, and especially on the outlook for inflation. It's coming. But in the meantime, the decision to use the awesome power of a central bank to invest in the stock market won't only hurt investors and "stock jockeys."
 
Our capital markets are supposed to be "efficient." That is, modern financial theory explains that by allowing capital to be allocated by the inputs of millions of investors, vast amounts of disparate information can be processed and capital can be allocated where it's needed most, so it can be used most efficiently.
 
But allocating capital according to nominal share price? And putting the most amount of capital into the stocks with the highest nominal share prices? That's not likely to be efficient at all. It seems utterly ridiculous, in fact. My bet is we'll see huge unintended consequences for allocating trillions in capital in such nonsensical ways. As proof, just watch Softbank.
 
 In 2013, riding the wave of the BoJ's investing spree, Softbank bought $21 billion worth of Sprint (S)…
 
Softbank's investment was for 72% of America's fourth-best wireless-telecom company. Immediately after the purchase, shares began to decline and eventually fell in half. During that time, Sprint has seen its network investment costs explode higher (reaching more than $9 billion last year) and has had to borrow more than $30 billion to remain competitive.
 
Meanwhile, a price war has broken out with the leading wireless-service vendor, Verizon (VZ), which has knocked off Sprint's flat-rate pricing model.
 
During the 2015/2016 correction in corporate bonds, Sprint's most recently issued debt fell to $0.75 on the dollar, indicating that most investors don't believe the company is likely to repay these obligations in full.
 
Dennis Saputo, a senior credit analyst at Moody's Investors Service, told the Wall Street Journal that Sprint hasn't made a profit since 2006 and will probably run out of money before mid-2018.
 
Likewise, our internal credit team has identified Sprint as one of the biggest credit risks in the U.S. capital markets, which is why the company is on our Stansberry's Big Trade Dirty Thirty list of the U.S. companies most likely to default on their debts.
 
If that happens, Softbank will likely lose all its $21 billion.
 
And what about Fast Retailing? Will building new retail locations all around the world – as Fast Retailing intends to do – prove to be a wise use of capital? I doubt it.
 
 Here's the bigger question…
 
What will happen around the world as more countries try to emulate Japan? Switzerland, long-known for its currency rectitude, is going to find out…
 
In 2014, Switzerland's central bank began buying equities, too. But its domestic economy is so small that it decided to invest globally.
 
Today, the Swiss central bank owns more than $60 billion worth of U.S. stocks, including a huge $1.7 billion position in iPhone maker Apple (AAPL) and $800 million in social-media titan Facebook (FB). The Swiss central bank continues to expand its balance sheet at almost $100 billion a year. Its total balance sheet has now grown to around $700 billion – almost $90,000 in securities per Swiss citizen. And it's growing every year… just by printing more Swiss francs.
 
Does that make any sense?
 
 In M.C. Escher's most famous paintings, the viewer can't figure out which way is up…
 
In his painting "Relativity," a maze of stairs interconnects, each with a different gravity orientation. The paths wind and intertwine. There is no "up" or "down"…
 
When central banks around the world begin to spend trillions on financial assets, the same thing happens to the world's financial markets. When stocks themselves become the basis of our global financial system… when stocks are the money we use… there's no way to exit the risks of the equity markets.
 
There's no up. There's no down. There's no limit to the resulting possible inflation. And there's no way to predict when the value of the currency will collapse. When money has no firm value, it's impossible to know what something's actually worth… or if an investment makes sense… or is safe.
 
 Today, as stocks rise by huge amounts all over the world, investors are cheering these moves…
 
But they will rue them tomorrow. After all, when these investments eventually sour… when inflation forces central banks to stop the inflation and to increase interest rates… how will investors find safety? When the Swiss franc is backed by shares of Facebook… and the Japanese yen is backed by Fast Retailing… and the U.S. dollar is backed by mortgages… what firmament will investors seek in a crisis?
 
Official currencies? They, too, will be tied to the success (or failure) of Apple's new iPhone… or of Softbank's latest gamble. Like an Escher maze, the next crisis may have no conventional way out. There may be no way to get to level ground.
 
 My bet is that investors will eventually seek out hard commodities…
 
Like gold, and oil, and perhaps even new forms of money that aren't tied to the financial markets, like Bitcoin. But whatever happens next, just remember… the soaring stock prices you're seeing aren't real.
 
They're just stairs – in a giant financial Escher painting.
 
 Speaking of oil…
 
At Stansberry Research, we've been consistently warning about the likelihood of big increases to oil and gas production and falling energy prices since 2006. (Yes, that long.)
 
We consistently debunked the "Peak Oil" story and explained that huge new investments in domestic oil production would lead to big new supplies – and lower future prices. In 2010, we were among the first people anywhere to write about the Eagle Ford and predict that shale would lead to a new all-time high in U.S. oil production.
 
Well… guess what? All of those things happened. And now, for the first time in more than a decade, we're beginning to get bullish about oil prices. No, we don't think they're going to bounce back tomorrow. Instead, we believe we're entering into a five- to 10-year period where oil will form a major bottom… before moving much, much higher.
 
Our long-term prediction is that oil will trade for more than $500 per barrel.
 
That probably sounds nuts to you. But people thought I was nuts when I told a Casey Research audience that oil would definitely fall to less than $40 a barrel back in 2012 (when oil traded for more than $100).
 
And now, with major publications talking about "Peak Oil demand" and suggesting the "oil era" is over… well… once again we're taking the other side of that bet. Demand for oil is going to soar – 10 times or more – over the next 20 years. That growth in demand, along with tremendous gains in production, will set the stage for a huge wealth boom in America. American producers and exporters will supply the world's energy tomorrow.
 
While I'm sure that most subscribers won't take our talk of a bottom in oil seriously, I do believe oil is going to be the best investment you can make over at least the next decade. But the trick to being successful is knowing which assets to buy… and when.
 
At Stansberry Research, we're building an entirely new team of experts, guys with decades of industry experience, to help our subscribers position themselves for extraordinary long-term results in the next oil boom.
 
Please join us Wednesday, June 14 for a free webinar where I'll introduce you to our newest analyst, Flavious Smith, and we'll discuss our long-term outlook for the world's most important commodity: oil. Reserve your seat here.
 
Regards,
 
Porter Stansberry
 
Editor's note: As Porter explained, he believes oil could ultimately go as high as $500 per barrel when all is said and done. And on Wednesday night, he and resource guru Flavious Smith are hosting a FREE live event where they will explain how to maximize your gains in this once-in-a-generation bull market. Reserve your spot right here.
 

Source: DailyWealth

Top Analyst Says China's Internet Boom Is Just Beginning

 
Chinese Internet stocks are soaring…
 
Tencent Holdings (TCEHY), China's leading tech company, is up 44% in 2017. JD.com (JD), China's Amazon, is up 64%. And social-media firm Momo (MOMO) is up 114%.
 
It has been a spectacular year. But according to China's leading Internet analyst, the move isn't over yet. In fact, her message at our True Wealth China Opportunities Conference in Beijing this week was the polar opposite.
 
Like us, she believes the future of Chinese Internet stocks is bright. Let me explain…
 
Fawne Jiang is a go-to resource when it comes to Chinese Internet and tech investing.
 
Jiang is the top-ranked China Internet analyst on Wall Street. She covers China consumer and Internet stocks at New York-based investment bank Benchmark.
 
Right now, she's bullish.
 
On Monday, Jiang explained to our crowd the three reasons why she's confident.
 
Her first point, population, is obvious. China is big.
 
Ten U.S. cities have populations of more than 1 million people. China has more than 100 cities that size. And the majority of them have Internet access.
 
China has around 720 million Internet users – more than two times the number of people living in the U.S.
 
These Internet users are busy. They play video games… communicate with coworkers… pay their bills… call their parents… and upload photos and videos online.
 
The average Chinese Internet user spends 26 hours per week online. But that doesn't tell the full story…
 
People born after 1990 spend 80 hours per week online (versus just eight hours a week for the same age range in the U.S., according to research firm Statista). This is a demographic boon for the Internet sector in China. It means future demand will remain incredibly high.
 
What you might not expect is the quality of the online products available in China. The technology the Chinese are creating and consuming isn't like the cheap Chinese-made toys your parents bought you when you were a kid.
 
They're the best in the world. And they're innovative…
 
Tencent's WeChat app has more features than anything available in the U.S.
 
Tencent itself is a comprehensive online ecosystem. Imagine if Facebook, YouTube, Zynga, Blogger, PayPal, and LinkedIn were all owned by the same company.
 
The last 20 years of Chinese history have seen incredible advancements in technology. The creation of companies like Tencent is a perfect example.
 
But Jiang is more excited for what the future holds… And she believes the next 20 years will prove even more unbelievable than the last 20.
 
In 2017, the Chinese Internet sector is booming… But the top analyst on Wall Street says we're getting started.
 
Good investing,
 
Brian Weepie
 
Editor's note: Steve's True Wealth China Opportunities readers are already benefiting from the quiet bull market in Chinese Internet stocks. But the gains are just getting started… And there's no better way to stay ahead of the trend. Learn more here.

Source: DailyWealth

A Scary Truth: China Is Now More Advanced Than the U.S.

 
Greetings from Beijing, China…
 
You probably won't want to hear what I have to say today. You won't want to believe me.
 
You might even be angry with me… or call me "un-American."
 
But I'm not being un-American (or pro-Chinese) today. I'm just calling it like I see it…
 
Beijing – the capital of Communist China – is more advanced than anywhere in the U.S.
 
Look, I wouldn't have believed it if I hadn't seen it myself…
 
It's painfully obvious, though – right when you leave the airport.
 
If you followed in my footsteps after landing in Beijing, here's what you would have experienced in the first hour alone…
 
After leaving Beijing's beautiful, futuristic, massive airport, you are instantly on high-speed Wi-Fi – in a taxi, on your way into the city.
 
The first thing you do inside the taxi is video-call your family – while going 70 miles an hour – to let them know you made it to China. You make this 70-mph video call for free… using the Chinese app WeChat.
 
You look up from your call and realize the highways have tons of "green" space – all perfectly manicured – with flowers in bloom, and it never ends. You think, "Who is doing all this work?"
 
You then notice the highways are in perfect condition… And they're full of luxury-brand cars – Audi, Mercedes, BMW, and more (plus some nice-looking Volkswagen models that you don't recognize). You think, "Where do all these rich people come from?"
 
You drop your bags with the bellman at the JW Marriott and head next door to get some real (not airplane!) food.
 
You walk past Tesla electric-car charging stations as you enter SKP Beijing – which turns out to be the highest-end shopping mall you've ever seen.
 
You pass Cartier, Gucci, Tiffany, and every other high-end store you can imagine on your way to the restaurants at the top. ("Who shops here?" you wonder.)
 
You walk straight into Din Tai Fung restaurant… and end up having one of the best meals of your life. (Apparently the New York Times ranked it one of the top 10 restaurants – in the world.)
 
Not a bad first hour in Beijing…
 
As I walked out past the Tesla charging stations, with the ultramodern mall in the background, one thought crossed my mind: "If I wanted to film a movie that's set in the future, I would come to China to do it."
 
I could share a bunch of fancy statistics about how far China has come. But heck, come see it for yourself. One hour in China, and you'll be convinced too. It doesn't take long at all to get an overwhelming sense that Beijing is more modern than any city in America.
 
I know it sounds crazy… The capital of Communist China is the last place you'd expect to see "the future." But that's what you get, right here, right now, in Beijing.
 
I'm certain that people are going to be angry at me for writing this today. I'm sure that people will call me un-American.
 
I realize that I'm not going to change their minds.
 
Hopefully, you are open-minded enough to listen to what I'm saying…
 
Beijing is more advanced than any place in America. If you don't believe me, then you haven't been here.
 
It is fascinating, and worth the trip. Get over here if you can. See it for yourself. Then – like me – you'll want to invest here. The upside could be significant…
 
Good investing,
 
Steve
 

Source: DailyWealth