August 9, 2021
Going against the herd is one of the hardest things to do as an investor. Folks want to be a part of the group… They want to jump on the bandwagon with everyone else.
But this often prevents you from getting in early – which is how life-changing gains can be achieved.
And this is how Dr. Steve Sjuggerud has built a very successful career and amassed such a reader following… using his complex data systems to find market trends before they go mainstream.
Steve joined Stansberry Research more than two decades ago. He has expert finance experience that runs the gamut from Global Mutual Fund VP to hedge-fund manager, with his sage advice landing him spots on Fox Business News, Bloomberg, and CNBC.
Most recently, Steve is known for coining the popular term the “Melt Up,” used to describe the final, euphoric blow-off top the stock market experiences before crashing. But long before that, his trend-spotting recommendations have been helping readers make significant gains.
Today, Steve shares some insight on how his contrarian way of using hard data to go against the investing grain can uncover big market trends.
Changing the Rules to Earn Triple-Digit Winners
Most people know the biblical “underdog” story of David and Goliath…
A small man named David takes on a giant… with nothing but a few stones and a slingshot. Yet somehow, against all odds, he manages to pull off a miracle and beat Goliath.
But what if I told you David was the clear favorite from the start?
Sure, Goliath was bigger and stronger. He had fancy armor and a massive sword. He was the undefeated champion of the Philistines – their greatest warrior.
When you compare their physical strength on paper, heck… David certainly looks like the underdog. But the traditional understanding of this story leaves out a major detail. And it’s one that changes the fight entirely…
This is the theme that journalist and bestselling author Malcolm Gladwell writes about in his book, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants.
The tale focuses on David’s win against the Philistines’ undefeated champ. But as Gladwell points out, it’s also a story of Goliath’s weaknesses.
He explains that Goliath likely had a condition called acromegaly. It happens when a person produces too much growth hormone and grows abnormally tall. But it can also lead to terrible eyesight, including double-vision and nearsightedness.
Gladwell even points out that the story itself suggests this…
“Come to me, that I may give your flesh to the birds of the heavens and the beasts of the field,” he shouts out, and in that request there is a hint of his vulnerability. I need you to come to me because I cannot locate you otherwise.
Goliath wants David to fight his way… up close and personal. That’s where the giant has the unquestionable advantage.
This truth makes David’s slingshot no longer an inferior weapon… but the perfect tool. It allows him to fight outside of Goliath’s reach. If he can remain a blur to the giant, he can easily take him out.
Suddenly, this isn’t an underdog story at all. It’s a tale of a man who changed the rules of the game. By playing his way, he stacked the odds in his favor… And he took out the Philistines’ champion with just one stone because of it.
This idea – stacking the odds in your favor – is crucial for investors to understand. By studying history, you can learn what works and what doesn’t. Then, you can make a simple decision to stick to what works… to only play when you’re likely to win.
It’s what our True Wealth Systems (TWS) computers do each month. They scan the globe, looking for “unfair advantages” for us. And this month, they’ve uncovered an important one.
Today, we have an opportunity to do what David did to Goliath… stack the odds in our favor. We can invest in a trend that no one else realizes is coming.
Folks are making a bet based on conventional wisdom. The general consensus tells us not to make this trade. And most folks wouldn’t even think to play it the way we will. But thanks to the TWS computers, we know better.
We have a chance to change the rules of the game. And we can make hundreds-of-percent gains in the process.
Let’s get started…
The worst thing you can do is to sit idly by and do nothing. Find out exactly what’s going on in America, why this grocery store billionaire is so concerned about this coming October, and four steps every American should take right now, right here.
The Crowd Is Betting the U.S. Dollar Will Tank
The economic response to COVID-19 can be summed up with a single word… stimulus.
The Federal Reserve has pumped $6 trillion in stimulus into the U.S. economy since the pandemic began.
The Fed also kept interest rates extremely low to encourage businesses to borrow cheap debt to survive.
It was an attempt to help the U.S. economy get through the COVID-19 pandemic. Ultimately, it gave a lifeline to struggling businesses while stimulating the economy.
The stimulus plan was more than four times the amount the Fed put out in response to the 2008 financial crisis. And that makes it the largest monetary stimulus in U.S. history.
All that money flowing into the system had another effect, though…
You see, when trillions of new dollars are introduced to the economy, it causes each individual dollar to be worth less than it was before.
We first wrote about the Fed’s stimulus efforts in June 2020. And looking back, you can see that the U.S. dollar has fallen hard over the past year…
The U.S. Dollar Index peaked around 103 in March 2020. It sits around 92 today.
Currencies tend to move slowly… So that’s a major decline. But while plenty of money is still floating around in the economy, a major shift has happened that could lead to something no one expects: a rally in the dollar.
This is how we can change the rules of the game… and give ourselves a chance to profit in the coming months as a reversal in the dollar takes off.
Normally, more dollars in the system means less value. That’s what we’ve experienced over the last year. But importantly, it has already happened.
Instead of realizing that, folks are now expecting that loss of value to continue indefinitely. And that consensus view creates our opportunity.
You see, when everyone is making the same directional bet in the markets, that trend is likely to reverse. This is the piece of information that gives us the edge. And it’s happening now in the U.S. dollar.
We can see this through the Commitment of Traders (“COT”) report. This is a weekly update on what futures traders are doing with their money.
When these speculators are all betting in the same direction, the opposite move is likely. Today, futures traders are all betting the dollar collapse will continue. Take a look…
This chart is simple… The lower the number is, the more bets were placed against the U.S. dollar. You can see that this indicator hit a decade-plus low earlier this year. And it’s still near extreme bearishness today.
Importantly, if we look at similar times when futures traders were this bearish, we can see that the U.S. dollar started to rally…
For example, the COT report showed extreme bearishness against the dollar at the end of 2017. The dollar bottomed below 89 a little more than a month later. It went on to rally for roughly two years after that. Check it out…
Late 2017 is just the most recent example, though. We also saw a similar setup play out in 2011.
Bets on a falling dollar hit a multiyear high in March 2011. With record bets against the dollar, there was almost no one left to buy.
Then, less than a month later, the currency bottomed around 73. It went on to rally all the way to 84 by July 2012. Take a look…
The speculators got this trade completely wrong. They were most bearish on the dollar at exactly the wrong time. And betting against them was the right call.
This is a theme that has shown up over and over again. When futures traders are all betting against the U.S. dollar, we want to make the opposite trade.
Today, we could be on the cusp of another rally like the ones I’ve shown above. Futures traders are extremely bearish on the dollar again… So we need to make the opposite bet today.
I realize that this might sound outrageous. The general consensus would be to bet against the dollar when there’s an oversupply of them. But given that everyone is thinking this way, we would likely lose money by following the crowd today.
Buying when everyone else is bearish changes the rules of the game… and puts the odds in our favor.
I’m not sure if you remember books, America, but it’s what people used to sink their faces into to avoid dealing with family and strangers. Our editor-in-chief, P.J. O’Rourke, has written a few in his time, and he’s re-releasing his bestselling Eat the Rich, complete with a new chapter to take on the absurdity of 2021 economics. And as an American Consequences subscriber, you can have access to the newly released edition for free! Claim Your Copy Now.
Editor’s Note: More than 6 million people saw Steve’s Melt Up message over the past few years. He recently shared with us a few of the e-mails he’s received from folks telling him how they’ve profited from his recommendations.
Like this one from Jim M., who said, “I have followed many of Steve’s recommendations, and my portfolio has increased over $400,000 in the last couple of years.” Or Gary O. who wrote he’s “mortgage-free thanks to Steve.”
Steve admits he left the traditional finance beat because he simply wanted to identify what really works in the investment world… and share this with people who want to do better than the markets, year after year.
Click here to find out more about Steve’s unique system that has helped so many investors find huge gains. Remember, sometimes it takes doing something against the grain to find that life-changing recommendation.
Love us? Hate us? Let us know at [email protected].
Managing Editor, American Consequences
With Editorial Staff
August 9, 2021