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Print | Close Window Subject: Buying Stocks Just Got a Lot Riskier From: "The Growth Stock Wire" <customerservice@stansberryresearch.com> Date: Thu, Dec 01, 2011 6:14 am To: JERRYT@easyasgold.com
By Jeff Clark
Thursday, December 1, 2011
The "Santa Claus rally" started on Monday. Now, just four days later, the S&P 500 is up 7%. What a difference a few days makes. Last Friday, Wall Street's mood was "bah humbug." Today, it's all candy canes and dancing sugar plums. "The Santa Claus rally is here!" exclaim all the TV talking heads who, just last week, doubted if the chubby, bearded guy in the red suit even existed… ----------Advertisement---------"How I retired 2 decades early" For the first time in his career, Jeff Clark has decided to publicly reveal how he generated millions of dollars… All by using a Gold 'key' he's developed – which doesn't involve stocks… bonds… or any other conventional investment. To learn more, click here. --------------------------------We knew Santa was real, and we started getting ready for his arrival last week. But now, as we glance around the room, we notice the plate of cookies is empty, except for some crumbs. The milk is half gone, and there are a few droplets sliding down the outside of the glass. Over by the fireplace, we catch a quick peek of a big, black boot just before it disappears up the chimney. It was a nice visit – short, but enough to boost stocks by 7%. And there's still room for a little more action to the upside. But we're starting to see the signs that Santa is on his way out. For example, take a look at this chart of the Volatility Index (the "VIX") plotted against its Bollinger Bands…
Beer giant Anheuser-Busch InBev breaks out to a three-month high… up 19% in two months. Cigarette makers extend rally… Altria and Philip Morris both climbed 2% yesterday to new 52-week highs. Sharp bounce for Exxon… Giant oil producer is up 7%-plus from last week. Credit card giant Visa hits a new 52-week high… up 30% in 2011.
Symbol
Price Change
52-Wk
S&P 500
1195.19
+0.22%
+0.63%
Oil (USO)
38.55
+1.85%
+4.81%
Gold (GLD)
166.88
+0.15% +24.99%
Silver (SLV)
31.03
-0.77% +16.87%
U.S. Dollar
78.98
-0.30%
-1.73%
Euro
1.33
+0.17%
+1.60%
Volatility (^VIX)
30.64
-4.64% +42.31%
Gold Stocks (^HUI)
546.36
+0.94%
10-Year Yield
2.00
+0.69%
+2.04% -29.08%
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Symbol
Price Change
52-Wk
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USA (SPY)
120.05
+0.28% +2.75%
S. Korea (EWY)
52.97
+1.88%
-0.56%
S. Africa (EZA)
59.47
-1.59%
-9.36%
Canada (EWC)
26.14
+1.55%
-9.67%
Japan (EWJ)
9.13
+0.44% -10.15%
Singapore (EWS)
11.20
-0.09% -12.81%
Taiwan (EWT)
11.89
-0.25% -13.85%
Lat.America (ILF)
41.55
+0.05% -17.47%
Israel (ISL)
13.20
-2.37% -17.48%
China (FXI)
34.29
-0.92% -20.17%
Russia (TRF)
15.14
+0.53% -26.08%
India (IFN)
21.29
-1.44% -31.02%
Bollinger Bands measure the most probable trading range for a stock or an index. When the VIX bumps into one of the Bollinger Bands, it indicates an extreme move and a condition that is ripe for a reversal in the other direction.
Symbol
Price Change
The blue arrows point to the few times this year when the VIX dropped down toward its lower Bollinger Band. Each of the previous three occasions marked an important short-term top for the stock market. Stocks fell 7% after the peak in April, 16% after the July top, and 10% following the peak in October. Today, the Volatility Index is once again pressing down on its lower Bollinger Band. This is a warning sign for anyone getting too excited about the prospects of a Santa Claus rally. Santa has already been here. If you weren't ready for him last week, it's too late. Don't start looking for him today. There's still a little more room left for the stock market rally to continue… But the risk is much higher now than it was just a few days ago. If you bought on Monday, you have a tidy profit… and it makes sense to take some of it off the table here. If you missed the move, be patient. You'll get another chance to buy when the VIX reverses toward the upper Bollinger Band again. Who knows? The way this market is flopping back and forth, we just might get two visits from Santa this year. Best regards and good trading,
52-Wk
Utilities (XLU)
34.22
+1.09% +15.87%
Big Pharma (PPH)
67.54
+0.57% +11.87%
Health Care (IYH)
67.31
+0.45%
Retail (PMR)
20.51
-0.44%
+7.45%
Consumer Svcs (IYC)
68.53
+0.32%
+5.36%
Big Tech (QQQQ)
54.38
-0.62%
+3.90%
+8.19%
Real Estate (IYR)
52.71
-0.28%
+0.95%
Industrials (IYJ)
60.34
+0.05%
+0.48%
Defense (PPA)
17.33
-0.12%
-1.82%
Internet (HHH)
70.34
-1.62%
-2.62%
Software (PSJ)
23.22
-0.73%
-2.68%
Transportation (IYT)
84.19
+0.41%
-3.59%
Telecom (IYZ)
20.28
+1.10%
-5.17%
Insurance (PIC)
14.38
+0.21%
-5.43%
Media (PBS)
12.28
+0.16%
-5.50%
Construction (PKB)
10.97
+0.73%
-6.02%
Biotech (PBE)
18.77
-0.64%
-7.63%
Water (PHO)
16.20
+0.12%
-8.38%
Oil Service (OIH)
117.53
+0.30%
-8.74%
Basic Mat (IYM)
62.97
+0.19%
-9.36%
Financials (IYF)
45.44
-0.61% -12.83%
Semis (PSI)
13.09
+0.38% -14.85%
Nanotech (PXN)
5.95
0.00% -39.62%
Alt. Energy (PBW)
5.18
-1.33% -46.53%
Jeff Clark Further Reading:
Mexico's Next Costly Energy Debacle By Matt Badiali Wednesday, November 30, 2011
"It's a schizophrenic stock market," Jeff writes. "The trend shifts from bullish to bearish to bullish and then back to bearish – all within just a few days." Jeff has been calling the volatile market's moves to a tee. See his original predictions here and here.
Mexico is looking north… and it likes what it sees.
If you're looking for somewhere to put your money now, try resource guru Matt Badiali's "no-brainer" gold trade… this play is cheap right now, with limited downside.
Everyone else seems to think it's just an oversold bounce… But it's so much more than that…
A Year-End Rally In Stocks Starts Now By Jeff Clark Tuesday, November 29, 2011
A Serious Warning to Amateur Investors
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By Larsen Kusick Monday, November 28, 2011
You can make money as an investor in growth stocks… but this popular method is almost always a horrible way to go about it.
Wednesday, November 30, 2011
What the coming gold mania could do to your gold stocks "Caution: the following may cause excitement, drooling, or the temptation to go all in…" Wednesday, November 30, 2011
Trader alert: Where stocks and gold could be headed next "We are now entering what will be one of the toughest markets to make money in…" Wednesday, November 30, 2011
Global, U.S. funded "bailout" sends stocks soaring again this morning "This means that the situation is far, far more dire than the talking heads have said…" Home | About Us | Resources | Archive | Free Reports | Privacy Policy To unsubscribe from The Growth Stock Wire and any associated external offers, click here. Copyright 2011 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202 LEGAL DISCLAIMER: This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. Stansberry & Associates Investment Research expressly forbids its writers from having a financial interest in any security they recommend to our subscribers. And all Stansberry & Associates Investment Research (and affiliated companies) employees and agents must wait 24 hours after an initial trade recommendation is published on the Internet, or 72 hours after a direct mail publication is sent, before acting on that recommendation. You're receiving this email at JERRYT@easyasgold.com. If you have any questions about your subscription, or would like to change your email settings, please contact Stansberry & Associates at (888) 261-2693 Monday – Friday between 9:00 AM and 5:00 PM Eastern Time. Or if calling internationally, please call 410-895-7964. Stansberry & Associates Investment Research, 1217 St Paul St., Baltimore, MD 21202, USA. If you wish to contact us, please do not reply to this message but instead go to info@stansberrycustomerservice.com. Replies to this message will not be read or responded to. The law prohibits us from giving individual and personal investment advice. We are unable to respond to emails and phone calls requesting that type of information.
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Print | Close Window Subject: Why Everyone Is Wrong About the American Oil Boom From: "DailyWealth" <customerservice@stansberryresearch.com> Date: Thu, Dec 01, 2011 5:48 am To: JERRYT@easyasgold.com
By Porter Stansberry
Thursday, December 1, 2011
This year, an army of financial analysts has come forward to estimate how big the coming boom in U.S. oil production will be. As you surely know by now, new technologies have allowed us to access massive, previously undiscovered shale fields… fields that will allow us to produce an incredible amount of energy.
Four outstanding shale-stock values from Kurt Wulff… The oil and gas expert shares four of his favorite "dirt-cheap" picks… Click here to get immediate access.
But what you don't know is all those analysts will almost surely be proven wrong. The amount of new oil that will be produced can't even yet be imagined. Trust me on this… every projection you've seen this year – and those that will be made over the next 12-24 months – about the amount of future oil production will end up being woefully, laughably conservative. ----------Advertisement---------Why Someone's Goof Could Save You a Bundle On the Most Popular Gold Coins in Our History Over the years, some people thought the $10 or $20 gold piece their uncle left them would look even better if they cleaned it. By doing so, the numismatic value of the coin was destroyed. We have a supply of such coins and are offering them to you for a fraction of their usual premium. For a limited time, you can buy them for close to their gold content. Learn how to buy these cleaned coins by going here. --------------------------------My bet is U.S. production at least triples over the next 10 years... which will create an enormous amount of wealth for investors. How do I know? Because that's what always happens with oil discoveries. Somewhere out there an elephant is hiding in the shale. Who knows who will find it… but if we drill enough holes out there, someone will. Consider this… Last month, Anadarko announced it had discovered what it believes will be a 1 billion-2 billion-barrel resource in the Niobrara shale that sits under the Wattenberg field in northeast Colorado. That's the largest new discovery in the U.S. in more than 40 years. Anadarko drilled 11 horizontal wells to make this discovery. Next year, it will drill 160 more.
Wednesday, November 23, 2011
Ron Paul killed in last night's presidential debate Watch a short clip of highlights here… Monday, November 28, 2011
The U.S. Senate is set to vote on one of the most frightening bills in history this week "Something sinister is taking place in Congress… And it should scare the hell out of you…" Wednesday, November 23, 2011
Forget Iran… "Damning" evidence suggests the West is about to attack another Mid-East country U.S. Embassy has instructed citizens to leave "immediately"… Monday, November 28, 2011
Jim Rogers: One country's stocks are a huge bargain right now China isn't the only Asian nation he's bullish on… Tuesday, November 29, 2011
This has become the No. 1 new driver behind the gold bull market Has nothing to do with investor demand or jewelry sales…
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And in the future, it will drill 1,200-2,700 horizontal wells in the Wattenberg field. My bet is, the resource estimate continues to get bigger. Now, consider this. The Wattenberg field has been in production since 1901. Yes, that's correct. It's not a typo. The field has already produced 4 trillion cubic feet of natural gas and hosts 14,000 wells. In 2007, it produced 11 million barrels of oil. The geology of Wattenberg is well understood. This was an old field – something that had been picked over by every major oil company in the U.S. for decades. The accepted wisdom said nothing new was to be found there… until Anadarko found another 1 billion barrels of oil… or maybe 2 billion. New drilling technologies – such as hydraulic fracturing (fracking) and horizontal drilling – won't merely allow the discovery of many large, new oil fields, they will also completely reshape the production curves of existing fields. That's a big part of the equation that most people haven't figured out yet. New technologies won't just bring new fields into production, they will revive our existing fields. Many older fields may even surpass their previous total production. Of course, no one knows exactly how much more oil and gas will be discovered. Looking at what his firm has found so far, Anadarko's CEO says total American production will double in 25 years. "The resource is there, and the technology is there." And according to Greg Armstrong, chairman and CEO of the Plains All American Pipeline company, a $16 billion partnership with a 16,000-mile network of onshore pipelines… It's hard to forecast at this point, because you don't know which of the many projects that have been announced are actually going to get done… You're talking about probably an aggregate – no matter whose story you believe – of at least 1 million barrels a day of new, very light product. And it's going to change the dynamics in an industry that's been gearing up for heavy or sour product.
Program that Could Save Your Retirement? In a move that is shaking the very foundations of conventional retirement wisdom, the undisputed "King of Retail" is offering a program that, for many retirees, could actually replace Social Security, 401(k)s, IRAs, pension plans, and the like. Click here to learn more.
How the "Big Money" Could Push Silver 54% Higher in 2012 By Matt Badiali Wednesday, November 30, 2011
With sentiment so negative toward silver, it's a great time to take a position in this long-term bull market. It's Now Time to Buy Shares of this "Master of the Universe" By Dr. Steve Sjuggerud Tuesday, November 29, 2011
It felt like the move happened on cue… like we got our timing just right… like we were on our way to seeing another triple-digit profit. The Best Stock Investing Strategy Since 1965 By Dr. Steve Sjuggerud Monday, November 28, 2011
Goldman Sachs came out with its forecast this week, too. It now says America will be the world's largest crude oil producer by 2017 – surpassing even Saudi Arabia.
I believe we have what we want… we have our "cheap, hated, and in an uptrend" setup in place.
All this is no surprise to my regular readers. In April 2010, I wrote several things that, at the time, I knew no one would believe…
How to Retire With No Savings
The Eagle Ford would become the most important U.S. oil discovery in 40 years. Wells already drilled would produce at least 40,000 barrels of oil per day within 24 months. The Eagle Ford would yield more than $2 billion in oil and gas by 2013, and its production would increase steadily for at least 20 years. I can't say for certain whether or not production will increase steadily for the next 20 years. But I'd be willing to place a very large bet on it. Meanwhile, the two stocks I recommended to my paid readers – Petrohawk and SM Energy – have both done extremely well. In both situations, the eventual outcome was almost exactly as I expected. Our long-term call was right on (even though we were stopped out in the summer of 2010 because of the extreme market volatility).
By Dr. Steve Sjuggerud Sunday, November 27, 2011
I admire him for following his passion. He took what must have seemed like an enormous risk five years ago. Time to Hit the Reset Button on Life By Dr. Steve Sjuggerud Saturday, November 26, 2011
Taking a huge loss on your home doesn't sound like fun. Finding a job far away in a non-bubble industry is a tough decision to make as well. But my friend is doing the right thing, and he has the right attitude.
Quite simply… after the Internet and the associated
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technologies… this is the biggest investment opportunity of my lifetime. What's happening here is bigger than just one or two oil companies having some success. It's even bigger than the Eagle Ford play. We are in the midst of a massive, global discovery and expansion phase for oil and gas. And in tomorrow's essay, I'm going to show you what two things in particular make this phase so powerful… and what all this means for you as an investor. Good investing, Porter Further Reading: The New American Oil Boom Starts Now For investors looking for exposure to the upside of shale oil, resource expert Matt Badiali offers one of his favorite names. The Largest U.S. Oil Discovery Since Prudhoe Bay "Investors who get in the right companies today could double their money within three years as production ramps up." The Biggest U.S. Energy Shift of the Millennium. This shift "will mean billions of dollars in profits spreading through the energy sector." Larsen Kusick shares his favorite companies to profit from this trend.
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DAILYWEALTH READERS PROFIT FROM ANOTHER "BASICS" RALLY If there's one point we hope we've driven home this year, it's how well "owning the basics" works in a tough market… or any market. Regular DailyWealth readers have read about our "basics" idea dozens of times. The idea is, for long-term investors – especially folks who want exposure to the growing economies of Asia, Africa, and Latin America – boring, basic, dividend-paying companies are the way to go. These companies sell things like soda, cigarettes, beer, and Band-Aids. It's in the "basics" business that you can find companies with powerful brand names producing huge and predictable cash flows. After all, no new gadget is going to make having a beer after work obsolete. Just after the August panic, we highlighted how many of our favorite "basic" stocks sailed through the crisis with minimal share price damage. They simply kept selling their products every day and kept paying rising dividends. And just this week, several have staged major upside breakouts. For an example of this price strength, we note McDonald's… a stock our colleague Tom Dyson pegged as an ultimate "recession-proof" company years ago. McDonald's isn't inventing the next smartphone or social network. It simply sells burgers and pays dividends. And as you can see, this strategy is working. McDonald's just hit a fresh 52-week high.
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Home | About Us | Resources | Archive | Free Reports | Privacy Policy To unsubscribe from DailyWealth and any associated external offers, click here. Copyright 2011 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202 LEGAL DISCLAIMER: This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. Stansberry & Associates Investment Research expressly forbids its writers from having a financial interest in any security they recommend to our subscribers. And all Stansberry & Associates Investment Research (and affiliated companies) employees and agents must wait 24 hours after an initial trade recommendation is published on the Internet, or 72 hours after a direct mail publication is sent, before acting on that recommendation. You're receiving this email at JERRYT@easyasgold.com. If you have any questions about your subscription, or would like to change your email settings, please contact Stansberry & Associates at (888) 261-2693 Monday â&#x20AC;&#x201C; Friday between 9:00 AM and 5:00 PM Eastern Time. Or if calling internationally, please call 410-895-7964. Stansberry & Associates Investment Research, 1217 St Paul St., Baltimore, MD 21202, USA. If you wish to contact us, please do not reply to this message but instead go to info@stansberrycustomerservice.com. Replies to this message will not be read or responded to. The law prohibits us from giving individual and personal investment advice. We are unable to respond to emails and phone calls requesting that type of information.
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Print | Close Window Subject: The S&A Digest From: "Stansberry & Associates" <customerservice@stansberryresearch.com> Date: Thu, Dec 01, 2011 4:28 pm To: JERRYT@easyasgold.com
December 01, 2011 Poor Coke… The U.S. dollar ruled in November… Genius world… John Q. Citizen buys in a frenzy… Praying to go broke… Best bet: World Dominating Dividend Growers… Claim your free gold… China's knees buckling… It must be boring to work for Coca-Cola. Its core franchise is so good, it's virtually impossible to change it without alienating your customers. For the holidays this year, Coke rolled out a new white can. The can was part of Coke's campaign to save polar bear habitats. I saw the white cans at the grocery store a week or so ago. It took me a minute to realize the can had regular Coke in it. I thought it might be a new flavor or a new diet version. Well, I'm not the only one who was confused. Some folks thought it was Diet Coke and didn't realize it was regular Coke until they drank it. Coke says it's going back to the red can, the one we all know and love. It's not as bad as when they rolled out New Coke back in 1985 and lost a huge chunk of market share. But it's another example of how deeply cemented in our psyches that red can and its sugary, artificially colored contents really are. Coke isn't just the world's biggest beverage brand. It's also the most widely recognized brand of any kind in the world. No wonder Warren Buffett loves this company so much. It's not a product. It's a religion. L. Ron Hubbard said, "If you really want to get rich, don't start a company. Start a religion." Coke is a religion. And if the company makes any changes to its caramel-colored sugar water or its packaging, the customers revolt. And looky here… shares of the Church of Coca-Cola are trading for a little more than 12 times earnings (cheap!) and yielding a little less than 3%, with a dividend that grows every year like clockwork. Not bad… Coke is a real product. If you change it, customers freak out. The U.S. dollar is created out of thin air. It can be stretched out of all recognizable shape, and everyone acts like it hasn't changed at all. (And they're right. It was garbage at its inception, and it's garbage now.) Bloomberg reports that in the month of November, the dollar index return beat stocks, bonds, commodities… just about everything. Investors were frightened by the European debt crisis and sold those other assets. And when they needed financial
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refreshment after wearying losses, they imbibed… yes… U.S. dollars. When folks get scared and sell, they still get back dollars. I can't believe this'll last forever, persistent as it still may be… Gosh, weren't we all smart yesterday? Couldn't you just feel the IQs soaring all around the world? All the numbers in our accounts were green when we logged in. Everything went up. What a beautiful day! We're geniuses! The S&P 500 was up 4.3%. The Dow Jones Industrials were up more than any day since March 2009. Wonderful as it all was, for the life of me, I can't imagine the mindset of those buying in a frenzy yesterday. I'm inclined to agree with Ron Paul, the Texas congressman who's running for president. "Fiat money caused this European crisis and the financial crisis before it," Paul said in a statement posted on his website. "More fiat money is not the cure." I'm not sure how anyone could come to any other conclusion… which makes yesterday's rally a head-scratcher. When governments start printing, shouldn't we all sell? Government interventions never fail to fail. But the pervasive belief in their efficacy is no mystery. It's simply human nature. The French economist Frederic Bastiat said government is the great fiction by which everyone attempts to live at the expense of everyone else. Most folks are happy to take their share of newly printed dollars. So when central banks print money, at the obvious behest of governments, to bail out big businesses and foreign governments… the markets go euphoric, with every Ameritrade accountholder buying like there's no tomorrow, hoping to cash out soon with a big win. We'll find out sooner or later that all the big Wall Street banks were buying like crazy yesterday, too. That's to be expected. They owe their existence to fiat currency. They're like fiat currency priests, paying homage to Pope Bernanke, spreading the unintelligible Latin word to the benighted masses, who might lose the faith if they heard it in their own tongue. Or maybe I credit the masses too much. Maybe they're faithful followers, levered to the hilt, just like the big banks. Maybe they don't merely love low interest rates and quantitative easing. Maybe an easy-money policy is their only chance of feeling rich. That's a sad commentary, isn't it? That so many people are praying for more money to be printed, so they can have a free ride? It's like praying to go broke so you can get a relative to bail you out. Or perhaps it's more like having gone broke and badgering your relatives until they cough up a bailout for you… which you proceed to spend on iPads and iPhones. So… what do you do with your money at a time like this? I am convinced more than ever that you should put the bulk of your equity portfolio into the stocks I refer to in my 12% Letter advisory as World Dominating Dividend Growers (WDDGs). They're World Dominating because each one is the No. 1 company in its industry. Wal-Mart is the World Dominating retailer. Coca-Cola is the World Dominating beverage company. Microsoft is the No. 1 PC software firm. And I call them "Dividend Growers" because they raise their dividends every year,
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usually for decades on end. Procter & Gamble, the World Dominating consumer products company, has raised its dividend for 57 straight years. Johnson & Johnson, the health care giant, has raised its dividend 48 years in a row. And yes, all our WDDG picks have raised their dividends at inflation-beating rates over the last 10 years. One raised its dividend 20.7% this year alone. Another just raised its dividend by 25% a couple months ago. And we're not talking puny 1% current yields. We're talking plump 3% and 4% yieldsâ&#x20AC;Ś which will keep growing until one day, you're earning a double-digit yield over today's share price and are likely holding onto a big capital gain as well. WDDGs are insanely difficult to compete with. One of them has a 90% global market shareâ&#x20AC;Ś another controls 80% of its market. Some get the bulk of their revenues from a dozen or more products that are No. 1 or No. 2 in their global markets. Imagine trying to compete with that! Everywhere you try to sell your wares, you hear the equivalent of, "No thanks, I'm a Coke drinker and I'm never changing." Many WDDGs have balance sheets loaded with cash and little debt. They're the safest businesses in the world. They're a lot safer than the U.S. government's Treasury obligations. As the government continues printing money to bail out every big bank and failed government, Treasury coupons won't grow like WDDG dividends. They'll lose value, likely sticking you with a capital loss in the process. But WDDGs will continue raising their dividends at inflation-beating rates. You'll be fully taxed on Treasurys, and you'll generally pay the 15% tax rate on dividends. Which would you rather buy? A 10-year Treasury note yielding 3% and virtually guaranteed to pay you back in weaker dollars? Or Johnson & Johnson common stock yielding 3.6%, with the dividend growing by more than 11.5% over the last 10 years? The J&J shares are a no-brainer. Yesterday's massive central bank intervention into the global economy isn't really a surprise. We know governments have zero incentive to allow a default. They'll always paper over their problems with more funny money. That, believe it or not, will make the WDDGs look even better than they already do, compared to most stocks and bonds. Inflation will make it harder for corporations to make money on new investments. So they'll pay out more profits in dividends, having nothing better to do with their money. When the great equity bubble was at its peak more than decade ago, dividends went out of style. As stock market valuations have come down, they're becoming more and more important. After all, if you can't count on the market to rise, you have to make money somehow. So you go for dividends. The WDDGs gush huge cash flows more consistently than any other companies. They'll have a greater ability to grow their dividends faster than inflation over the next several years. And if you want to get a look at what you can expect from stocks over the next several years, just look at the 1970s. From 1974 through 1984, the Dow Jones Industrials Average traded at less than 10 times earnings on average. That's really cheap, as investors demanded higher returns to compensate them during those inflationary years following the total elimination of the gold standard for the U.S. dollar in August 1971. My list of World Dominating Dividend Growers is a principle feature of The 12% Letter. I sent my subscribers an update yesterday, featuring five WDDGs now in
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buying range. To access The 12% Letter and discover the full WDDG list for yourself, click here. We had a huge response to yesterday's request for feedback. But it's not too late for you to learn how to receive one of our favorite gold investments. To refresh, Porter has been buying a very rare and valuable type of gold… We think the value of this asset could increase 200% in the next couple years. We believe in this type of gold so much, we've spent close to $1 million acquiring it. And we're going to give it to subscribers for free. It's easy to sign up to find out how to receive this gold. You simply enter your e-mail address here. It's completely free and does not obligate you to purchase anything from us. We just want your feedback… As we explained yesterday, we're making some major changes at Stansberry & Associates… Changes that will make our services better for you. But before making these changes, we want your opinion. After answering a few questions, you will receive an e-mail on December 9 explaining how to claim your gold. Again, you can give us feedback here. If somehow WDDG stocks don't appeal to you (perish the thought!)… here's an unconventional idea… "This is the best time to get into the parking market," says John Roy, co-author of The Ultimate Parking Business Buyer's Guide. Not many people think of parking lots when they're considering commercial real estate investments… They rarely come onto the market. And when they do, they're usually expensive. But the rout in commercial real estate is driving prices down on these turnkey businesses. There are almost 250 million registered U.S. passenger vehicles, and they're parked 96% of the time. The U.S. parking industry generates $25 billion-$30 billion annually, according to the International Parking Institute. Buying a parking lot in the right location can get you a stable, growing stream of income over a long period of time. A $1 million lot will provide around $45,000 a year in revenue (a 4.5% return) with little upkeep. We saw this coming… A key Chinese manufacturing index fell in November, proving China is not immune to global financial crises. An index measuring activity in the manufacturing sector, released today by the China Federation of Logistics and Purchasing, fell to 49 last month from 50.4 the previous month. A reading below 50 means contraction. Another purchasing managers' index, from HSBC, fell to 47.7, from 51 last month. Also, Chinese home prices fell for a third month in November as developers cut prices to move inventory, according to SouFun Holdings, the country's biggest real estate website owner. Home prices fell 0.28% last month, following a 0.23% drop in October. And prices dropped in 57 of the 100 cities SouFun tracks, including in each of the 10 biggest cities.
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China's first easing in three years was not in vain… After years of trying to cool prices, the country is giving in to inflation. End of America Watch Global gold holdings in exchange-traded funds (ETFs) totaled more than 70 million ounces (more than $120 billion worth) for the second day in a row today – a new all-time high. To put that in perspective, that's more gold bullion than is held by Switzerland, China, and India. Collectively, ETFs are the sixth-largest owner of gold in the world, behind France. Italy and Germany also own more gold ($157 billion and $218 billion worth)… at least, for now.
To see the End of America video that started it all, click here… Also, to read an exclusive interview with Porter Stansberry explaining how to protect yourself from the End of America, click here… To sign up to receive the latest information about our Project to Restore America, click here.
New 52-week highs (as of 11/30/11): Abbott Laboratories (ABT), McDonald's (MCD), Altria (MO), Philip Morris International (PM). Wow! Great stuff in the mailbag, with plenty of stories from IBM and the airline industry. We'd also really like to know what sorts of investments you're most interested in these days. Please write us at feedback@stansberryresearch.com. "I am an Alliance member who has worked for IBM for 17 years. I have always felt that IBM has very smart people at the top of the business. There is never any question that they look to maximize the stock price (of which they own a bunch). The company has long demonstrated a strategic plan for the future. They are moving to be a software and services company. This is demonstrated by the constant acquisitions of software companies and the willingness to trade hardware profit for services business. "IBM's technology investment has proven superior to its competitors (HP & Sun). The PWC acquisition helped elevate our position in many accounts, but we still struggle competing against Accenture at the top level of many companies. "The one thing I find discouraging is that (like many other public companies), there is such an overwhelming focus on current period results. Ten years ago, it was accepted that we pushed to get business in December that may otherwise occurred in the following year. Then we moved to having a quarterly focus. Today, people are measured by the month. It is not unusual to discount a product an additional 10% to get the business in November that was planning to occur in December. That mentality comes from the top and following it is not optional. The lives of anyone associated with sales are made pretty miserable at the end of the month/quarter /year. This includes all of the administrative support people who are working well past midnight on December 31 to make sure we record every possible dollar of business. This entire process has trained our customers to hold out until the last
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minute for a better deal. "IBM has been taking the necessary steps to get lean for the past 15 years. It appears they are now getting ready for lean times. So much of our business is tied to the big banks. It looks to be a challenging few years join forward. I just expect that we will be working late into the night on New Year's eve trying to get one of the banks to sign a deal." â&#x20AC;&#x201C; Paid-up subscriber Pete "My experience as an IBMer of 37 years (now 22 years retired) proved to me that I worked for the greatest company in America (maybe even the world) There are many reasons for IBM's success, such as investment in research, resulting in it being the leader in new patents for over two decades. "I feel that it's three core principles of customer satisfaction, employee morale, and reasonable return to shareholders have been a hallmark of this company. In recent years, the wording has been revised to more accurately the changing environment, but essentially the same principles. "Mr. Buffett is correct when he says he believes what he is told from IBM management. The company is most trustworthy. "As an aside, as an employee, I was allowed to purchase shares at 85% of the market price. Is that being fair to employees or what?" â&#x20AC;&#x201C; Paid-up subscriber Norman W. Paris "You asked for responses from people who had experiences working for companies like IBM or American Airlines. "In 1973, I was hired as a pilot for Eastern Airlines, who at the time was the number 2 airline in terms of passengers carried. I loved flying airplanes and the company treated its employees well. However, it was heavily indebted and burdened with uncompetitive labor contracts. The Unions were constantly fomenting unrest buy trying to convince workers that management was abusing them. "In the late 1980s, after unsuccessful attempts to revise labor contracts, the airline was sold to Texas Air, a company with a reputation for tough dealings with labor unions. The new owners told the unions that we will either fix it (meaning reduced labor costs) or tank it. The IAM (machinists union) announced a strike and ALPA (the pilots union) said that pilots would not cross the picket line. "At the union meetings, ALPA was quite open about their position that a substandard pay scale could not be allowed at a major airline like Eastern because it would threaten the industry standard wage scale. We were promised that if we fell on our swords and Eastern failed, that the union would make sure that the new owners of the airplanes and routes would hire us. This, of course, never happened and only a tiny percentage of Eastern pilots got jobs with other airlines. The bankruptcy was devastating to most Eastern pilots because not only had we lost our jobs, but our careers as well. This is because the industry operates on a seniority system and even if a pilot found employment with another airline, he would be forced to start at the bottom, regardless of experience or qualifications. An interesting side note is that a substantial minority of pilots thought that going on strike was stupid, but they knew that if they cross a picket line and become a 'scab' their life t hereafter will be miserable due to retribution from the union brotherhood.
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"In my case, being middle aged, I was not interested in starting over with another airline and it is unlikely that they would hire someone my age anyway, so I was forced to make a career change. I started my own business and thankfully it has prospered. I am far wealthier than if I had stayed with the airline. I also found that I was a better businessman than pilot and that I was much happier when I had direct control of my working life. "If there is a moral to this story it is that sometimes a catastrophic life changing event can be beneficial. Perhaps another lesson is that you should never believe that a union is looking out for your best interest. They are self-serving institutions that have seriously degraded our competitiveness resulting in the loss of a great many jobs and, in some cases, the loss of entire industries. "I have benefited from your sage investment advice and I particularly enjoy Porter's commentary." â&#x20AC;&#x201C; Paid-up subscriber Bob Searls Regards, Dan Ferris and Sean Goldsmith Medford, Oregon and New York, New York December 1, 2011
Stansberry & Associates Top 10 Open Recommendations (Top 10 highest-returning open positions across all S&A portfolios) As of 11/30/2011 Stock
Symbol
Buy Date
Total Return
Pub
Editor
Rite Aid 8.5%
767754BU7 2/6/2009
246.83%
True Income
Williams
Paramount Gold
PZG
4/14/2009
241.88%
Phase 1
Sjuggerud
Keyera Facilities
KEY-T
3/17/2008
164.32%
The 12% Letter
Dyson
Exelon
EXC
10/8/2002
158.69%
SIA
Stansberry
McDonald's
MCD
11/28/2006
154.36%
The 12% Letter
Dyson
EnCana
ECA
5/14/2004
147.86%
Extreme Value
Ferris
Enterprise Partners
EPD
10/15/2008
141.67%
The 12% Letter
Dyson
Junk Silver
Junk_Sil
7/3/2009
123.83%
Retirement Mill
Eifrig
SPDR Gold Trust
GLD
10/16/2008
114.57%
Retirement Mill
Eifrig
Altria Group
MO
11/19/2008
105.94%
The 12% Letter
Dyson
Top 10 Totals 4
The 12% Letter
Dyson
2
Retirement Mill
Eifrig
1
Phase 1
Sjuggerud
1
True Income
Williams
1
SIA
Stansberry
1
Extreme Value
Ferris
Stansberry & Associates Hall of Fame (Top 10 all-time, highest-returning closed positions across all S&A portfolios) Investment
Sym
Held
Gain
Pub
Editor
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Seabridge Gold
SA
4 years, 73 days
995%
Sjug Conf.
Sjuggerud
ATAC Resources
ATC
313 days
597%
Phase 1
Badiali
JDS Uniphase
JDSU
1 year, 266 days
592%
SIA
Stansberry
Silver Wheaton
SLW
1 year, 185 days
345%
Resource Rpt
Badiali
Jinshan Gold Mines
JIN
290 days
339%
Resource Rpt
Badiali
Medis Tech
MDTL
4 years, 110 days
333%
Diligence
Ferris
ID Biomedical
IDBE
5 years, 38 days
331%
Diligence
Lashmet
Northern Dynasty
NAK
1 year 343 days
322%
Resource Rpt
Badiali
Texas Instr.
TXN
270 days
301%
SIA
Stansberry
5 years, 242 days
273%
True Wealth
Sjuggerud
MS63 Saint-Gaudens
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