October 27, 2021
This… Is… A… Bubble!
Yesterday, I (Laura Greaver) sat in the back of a hotel ballroom listening as my colleague, Extreme Value editor Dan Ferris, led 300 or so audience members in a chant.
It was like he was leading a revival…
This. Is. A. Bubble!
Dan was one of the speakers who wrapped up the first day of Stansberry Research’s annual conference at the Encore at Wynn in Las Vegas. He spent a large chunk of his 30-minute talk laying out facts of the bubble environment we’re currently in…
The evidence is clear, he said, whether you look at the most-expensive-ever stock prices… most-expensive-ever housing prices… a record-breaking number of IPOs in 2021… and junk-rating companies being upgraded by the handful.
Smaller bubbles are already popping within the overall market: cannabis, meme stocks, and SPACs are all down from their elevated levels this time last year.
You may also recognize Dan as the host of the Investor Hour podcast. Dan’s been writing for Stansberry Research for nearly all of its 20-year history.
His performance at Day 1 of the conference once again illustrated why his mix of humor, bluntness, and deep commitment to value investing has made him a favorite among many of our longtime subscribers…
He touched on the ever-changing inflation narrative – first it was “transitory,” then “frustrating”… And, Dan described the final stage of inflation as “oh sh!t, gas is $8 a gallon!”
Now, Dan “doesn’t do predictions.”
He says you should maintain a diversified portfolio that prepares you for great long-term returns and wealth preservation… classic buy-and-hold investing. [You can learn more about Dan’s value-investing philosophy and his Extreme Value publication here.]
As Dan began describing some of the stock market winners and losers he expects to see when this bubble environment ends… something struck me that I want to share with you…
You see, as I listened to the speakers today, who all spoke about various investing and financial topics, I noticed they each hammered home the same main point.
Now, Stansberry prides itself on employing editors and analysts who have varying opinions and investing styles… some are bears, some are bulls… Our writers are encouraged to think and write how they want, providing they back it up with substantial evidence, of course.
So today, I found it fascinating that Dan, our founder Porter Stansberry, and even Stansberry’s newest stock-picking expert Matt McCall, all ended up emphasizing the same message… buy for the long term.
A new system shows which stocks could soon rise 100% thanks to a Connecticut couple’s catastrophic 401(k) loss.
Porter opened the three-day conference this morning with a riveting speech about capital-efficient companies. These are companies that produce large amounts of free cash flows in relation to the revenue they generate, have high returns on assets, consistently reward shareholders with dividends and stock repurchases, and grow their revenues year after year.
The great thing about buying cap-efficient stocks is they require very little from the investor…
Porter referenced famed investor Warren Buffett’s incredibly successful “sloth-like investing style,” in which one simply has to do nothing for the best returns – given it’s a solid, capital-efficient company.
Porter spoke about Buffett’s candy-store acquisition as an example of this… When Buffett bought See’s Candies in 1972, it had $30 million in annual sales and profit of $4.2 million. By 2014, See’s had annual sales of $400 million, and profits of more than $82 million.
A large part of See’s success is that it’s capital efficient and grows every year at a slow but consistent pace. At a recent shareholder meeting, Buffett spelled out just how much of a winner the candy-store purchase has been: “We put $25 million into it and it’s given us over $2 billion of pretax income.”
Porter then detailed his own candy-store winning story… In 2012, he recommended chocolate company Hershey (HSY) in Stansberry’s Investment Advisory, and it’s gone on to produce 535% gains (with dividends reinvested).
He emphasized that purchasing capital-efficient companies is truly a “path to wealth,” and suggested folks should “save their income, buy these stocks, and forget about them.”
(Stansberry’s Capital-Efficient Monitor gathers and details the top-ranking companies each month, and it’s included in a subscription to Stansberry’s Investment Advisory. You can find out how to get access by clicking here.)
The Best Is Yet to Come
Next was Matt McCall…
Matt is a passionate self-made entrepreneur, whose big-gains track record and penchant for teaching and helping investors just landed him a seat beside our other analysts here at Stansberry Research.
Matt says the next 10 years will be the best decade for investing ever… He’s a staunch believer in all things future technology, including cryptos and blockchain, next-generation health care, and “Transportation 2.0,” which groups together electric vehicles, autonomous vehicles, and flying cars (which Matt says are coming sooner than you’d think).
He claims that “technology and disruption will always win,” and that the diverging of these future technologies will produce an enormous amount of investing opportunities.
And don’t worry, Matt claims not even the “three Ps” can keep it from happening – pessimists, politicians, or pandemics.
Matt warned not to let the bombastic news and attention-grabbing headlines scare you. He’s got firsthand experience with the media’s sensationalism, having hundreds of finance TV appearances under his belt.
You can ignore all the fear – the S&P 500 Index has hit 50 new all-time highs this year.
Matt also preaches that as an investor, you have to ignore the short-term market noise and you must think long term… You can’t buy cryptos and then track the daily price fluctuations because you’ll make yourself crazy. On stage he said, “If I told you how much your house was worth every day, you’d lose your mind.”
Instead buy stock in good, solid companies and then forget about it… Matt details exactly how to do this with his new product, MegaTrend Investor. There’s an introductory, reduced-price charter offer right now on MegaTrend Investor, which you can learn about here.
The rest of the conference line-up looks spectacular as well, with more speakers like Paul DePodesta from the Moneyball book and movie, crypto expert Eric Wade, WallStreetBets founder Jamie Rogozinski, AMC publisher Trish Regan, Dr. Steve Sjuggerud, and more. I’m also really enjoying mingling and talking with all the subscribers here.
Of course, things aren’t all work when you hold your conference in Las Vegas… I’m looking forward to trying out some of the extravagant food and drink on offer here at the Encore at Wynn, once I put today’s daily letter to bed.
I know New York is known as the “city that never sleeps”…
But with the distant nightclub bass thumping in the early hours of the morning, still audible in my room on the 37th floor… and flashing neon lights lighting up the streets below my hotel window, which are still packed in the hours before sunrise… Vegas could give New York a run for its money.
Love us? Hate us? Let us know at [email protected].
Managing Editor, American Consequences
With Editorial Staff
October 27, 2021