The Bad, the Ugly, and the Kooky

The fraud of the summer... The bad, the ugly, and the kooky... The bear market continues... Greg Diamond's bearish wins... Nvidia tumbles again... A new sustained 'government risk'?... Don't miss Marc Chaikin's new video... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] The fraud of the summer... The bad, the ugly, and the kooky... The bear market continues... Greg Diamond's bearish wins... Nvidia tumbles again... A new sustained 'government risk'?... Don't miss Marc Chaikin's new video... --------------------------------------------------------------- 'We'll look back on this summer's rally as a fraud'... I (Corey McLaughlin) can't put it any better than our colleague Chris Igou did in today's edition of DailyWealth Trader. As the calendar turned to September today, as he does on the first trading day of each month, [Chris shared his "sector checkup" with subscribers](. He began by declaring the past two months of stock market action a "fraud," and then continued... It was a bear market rally trying to pose as a new bull run. And if you missed the signs that gave it away, you were likely caught off guard. Importantly, there were key indicators that showed us the recent rally wasn't sustainable without another drawdown. We've seen U.S. sectors hit "resistance" levels and turn lower. There were several parts of the market that hit "overbought" territory. And these kinds of setups typically lead to a new downturn. Hindsight is 20/20, of course. But the point is simple. Chris analyzed the market based on a mix of technical and sentiment indicators, and what walked, talked, and smelled like a bear market "relief rally" was indeed one. As Chris looks back at the past month and three months, it's clear to him... With the sharp sell-off in stocks the past week or so, only the energy sector and (by a smidge) utilities had positive returns in August. Here's the chart he shared of the 11 major sectors of the S&P 500 Index... Nine out of 11 sectors having negative returns in a month doesn't scream "new bull market," of course. Then, looking over the past three months, only consumer discretionary stocks and utilities (again by a hair) returned positive numbers, which got Chris' attention. Consumer discretionary stocks – like Amazon (AMZN), Tesla (TSLA), and Home Depot (HD) – tend to be "risk on" names and rise when sentiment is positive about the economy... Meanwhile, utilities are what they sound like: boring "safe haven" companies that provide fundamental infrastructure, like electricity and natural gas, such as Duke Energy (DUK) or Exelon (EXC). Utilities have also historically fared better than most other sectors [in bear markets]( as well as in "stagflationary" periods when economic growth is slowing and inflation is high. That's the case again. Utilities are up about 7% since the start of the year, the best-returning sector outside of energy – which is up 44% since January. But, as Chris wrote, utilities and discretionary stocks both leading the stock market over any time period is a "kooky scenario"... That's what makes these top two performers an odd pairing. But when you dig a little bit deeper, you can see why this is the case today. Utilities hit new highs in August. So while the broad U.S. market remains well below its January 2022 high, utility stocks are doing better. They are performing like you'd expect relative to other sectors. Meanwhile, consumer discretionary stocks fell 36% from their November 2021 peak to their bottom in June. That was a much larger drawdown than U.S. stocks as a whole. They were one of the worst performers during that period. The July to August rally was simply a sharp relief rally because the big drawdown was overdone. But even after the jump higher, consumer discretionary stocks were still down 18% off their peak. In other words, consumer discretionary stocks led the way until mid-August – following a strong July – from lower lows compared with other sectors, and within a broader downtrend for U.S. stocks in general. And that fits with the description of a bear market rally. All in all, that 20% rally in the benchmark S&P 500 from the middle of June to the middle of August... fraud! With that run up and reversal, U.S. stocks are flat since Memorial Day. As Chris concluded... In short, U.S. sectors are starting to fall once again. The bear market is in full force. The story continued today... The S&P 500 was down for much of the day... and the tech-heavy Nasdaq Composite Index was down a bit more... before both indexes rallied in the final half-hour of trading to close slightly positive – for the first time in four days. In the spirit of sector comparison, utilities and another inflation-beater, health care stocks, led the gainers. Both were up around 1.5%. In other words, "defense" ruled the day. Conversely, the small-cap, growth-oriented Russell 2000 companies were down the most today, falling more than 1%... Fears – or the reality – of a "higher for longer" interest-rate environment are starting to settle in on Wall Street, sending stock prices lower... On that point, congrats to our Greg Diamond's Ten Stock Trader subscribers who today closed a trio of trades for big gains – in just a few days. A bearish bet on small caps and one on a larger tech name each returned subscribers 50% in just a few days... and a third bearish trade on a leading semiconductor stock returned 100% – again, in less than a week. Speaking of semiconductors... Last time we spoke about this sector, we noted that semiconductors' rally since June was cooling off – an indicator that stocks in general might follow. Semis have tended to be a leading indicator for tech names and stocks in general... Today, though, the story was completely different... more fundamental. Probably the biggest catalyst for Mr. Market today – and certainly for the semiconductor sector's move down – was surprise news about Nvidia (NVDA). The U.S. government ordered the chipmaker to stop exporting chips used for artificial-intelligence work to China. As Stansberry NewsWire editor C. Scott Garliss shared in [his market headlines update this morning]( global news service Reuters reported yesterday... The announcement signals a major escalation of the U.S. crackdown on China's technological capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured... The company said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with completion of developing the H100, the flagship chip it announced this year... Nvidia said U.S. officials told it the new rule "will address the risk that products may be used in, or diverted to, a 'military end use' or 'military end user' in China." Shares of Nvidia plunged roughly 8% today... and they were down as much as 10% before the company revealed in the afternoon that the U.S. government will still allow Nvidia to "develop" its H100 chip in China, just not sell it there. In any case, this decision has a direct impact on Nvidia's current and future business. Nvidia expects a $400 million loss in revenue from the export restrictions. As Stansberry Research analyst Brian Tycangco, based in Asia, shared on Twitter... And balance-sheet implications aside, this raises an entirely new set of questions about "government risk"... This isn't the first time something like this has happened, of course... with the U.S. government not wanting businesses to send products to certain countries. But geopolitical hot spots are already on fire in Eastern Europe and increasingly the South China Sea. Bans like these – from doing business in a market in the crosshairs of war – do have the potential to become a persistent risk that companies and investors must consider. The market's reaction was emblematic of this today. It was surprised... All things considered, these are tough conditions to navigate... Things have been difficult all year... and more economic "pain" – as Federal Reserve Chair Jerome Powell has put it – might still be to come. The picture of an "official" recession over the next year or two is coming into clearer focus. The fight against inflation could be long. We've been suggesting all year to keep plenty of cash on hand... and pointing folks in the direction of sectors and stocks that can help you survive this volatile time in the markets. The days of the "bull market genius" who couldn't lose picking a stock are gone. Making money and protecting it in a bear market requires a different, more selective approach. Today, if you're searching for some more actionable advice on what to do with your stock portfolio, I suggest you consider hearing out our friend Marc Chaikin... Marc, the founder of Chaikin Analytics, has been active in the markets for 50 years. And in his time working with some of Wall Street's top investors, he learned long ago that spotting sector trends – like Chris wrote about today – is the single best way to navigate the market. In fact, spotting what particular sectors are doing in relation to each other is one of Marc's secrets to success. As he shared in a presentation earlier this year, which [we shared in the March 31 Digest](... This is what you need to know. It might actually be the most important lesson I ever learned on Wall Street. Studies have shown that 50% of a stock's performance can be attributed to its industry. Fifty percent. That means choosing the right industry is literally half the battle when deciding what to buy... and what not to buy. This is one of those dirty secrets Wall Street doesn't want you to know... but which Marc is committed to sharing with everyday investors... ever since he saw what happened to people during the financial crisis. Earlier this year, using these insights gleaned over the decades, Marc laid out what he called the "rolling crash" that was underway. Certain stocks and sectors had already crashed 20% or more from their highs... and he warned of more of the same to come for those that hadn't yet fallen to new lows. The bad and the good... Over the past week, Marc has been warning of another leg down for the stock market... But he also has his eye on an approaching key point that could help folks erase all the losses their portfolio may have taken this year – and lead to tremendous gains before all is said and done. If you're looking for some guidance or help today to navigate this market, I can't think of a better person to listen to right now... [Click here]( to hear what Marc has to say in a new video he recorded recently from his home in Connecticut. You'll hear much more detail directly from him, including his thoughts on the market right now... and how and why he created a set of tools that allows the average Joe or Jane access to Wall Street's thinking. You could actually spend hours in one sitting using and perusing the tools Marc created... I have on occasion, and I've been delighted to have found bullish and bearish signals on stocks that I never would have seen myself. To learn more, [give his message a listen now](. Navigating Today's Economic Battlefield In this week's Stansberry Investor Hour, Dan welcomes investor and 20-year U.S. Army veteran Jeff Muhlenkamp to the show, and they learn they have a lot in common with each other when it comes to navigating the markets... [Click here]( to listen to this episode right now. And to catch all of the videos and podcasts from the Stansberry Research team, be sure to [visit our Stansberry Investor platform]( anytime. --------------------------------------------------------------- Recommended Links: [Severe Stock Warning: Act Now]( In the past 30 days, the chance for a recession increased from an estimated 15%... to 90%. The decline hit fast, just as Wall Street legend Marc Chaikin predicted. But Marc says the worst is yet to come... which is why he just stepped forward with his most urgent warning yet. The steps to take to protect yourself are simple, quick, and backed by 50 years of proof, [which you can find right here](. --------------------------------------------------------------- ['THIS WILL DEFINE MY LEGACY']( After four decades of preparation... Dr. David Eifrig stepped forward with the most important announcement of his life. If you've EVER followed his research – or simply don't want to miss what Doc calls "the biggest opportunity I've ever seen... in any market... any asset... anywhere" – you need to see what he revealed. [Full details here](. --------------------------------------------------------------- New 52-week highs (as of 8/31/22): SPDR Bloomberg 1-3 Month T-Bill Fund (BIL). In today's mailbag, we have a clarification on a response in yesterday's mail... an additional note on student-loan forgiveness... and one reader's opinion on a perhaps overlooked commodity (and a related recommendation from our team)... Do you have a comment or question? As always, send your notes to feedback@stansberryresearch.com. "Thanks for sharing my student loan suggestions in [yesterday's] Digest. There was however an error in your transcript should you chose to correct it. "In my examples: "'Political Science' funding was intended to be presented as a negative value: -20 to -50%. I base this on the historical record that this field of study has a near certainty of resulting in a negative, possibly tragic, effect on the economy and society." – Stansberry Alliance member K.P. "Strongly opposed to government bailout of student debt but if they insist on student loan forgiveness, let us insist that it be the LAST ten thousand that they owe." – Paid-up subscriber Laura W. "Corey, Thanks for being so honest and keeping our heads above water if we listen. Which I do. I love your Digests. Here is something most don't think about with the Fed blowing things up and so many in the round building spending our money and more than rate hikes can keep up with. "Uranium is making the move. EV's and charging stations are going to start popping up everywhere... Dodge, Ford, GM, VW, BMW, etc., even NASCAR is going to have a five race series in 2023 for the Electric Vehicles 1000 hp. "Germany is starting to come back to nuclear because of Russia and their antics and Japan is firing up more reactors. China is planning on at least 150 new nuclear plants. Terra Power is building a new more efficient as well as safer (Natrium) nuclear reactor in Wyoming. "Uranium is starting to go up and this commodity is well beating the S&P 500... It's a shame a lot [of] folks can't hear about some companies right now while the share prices are low. Please consider this approach before things skyrocket..." – Paid-up subscriber Jeff B. Corey McLaughlin comment: Jeff, thanks for the kind words and glad you are enjoying the Digest and finding the analysis helpful... As far as uranium, you've touched on a trend (in nuclear power in particular) that more than a few folks at Stansberry Research are interested in, including senior analyst Matt McCall. Take [his latest issue of MegaTrend Investor newsletter]( as an example... In this issue, Matt updated folks on a company in his model portfolio that, in fact, helps produce uranium. Shares are up 15% over the past month (and haven't sold off in the past two weeks either). And they're up 30% since he recommended the name back in February. I think you'll find what Matt wrote in February when making the bullish case for this company aligns with your take, Jeff. He wrote that the market for nuclear energy will need to grow more than many might think if the world is to meet its "green energy" demands... Eliminating carbon emissions and moving to a 100% renewable energy world is a bold undertaking. It will likely take a long time to get even close. But the process could be moved along quicker if countries around the world would embrace an energy source that is often associated with fossil fuels... I'm talking about nuclear power. Matt noted the stigma around nuclear power, of course, stemming from events like the Three Mile Island accident in Pennsylvania in 1979... the Chernobyl disaster... and the Fukushima accident in Japan in 2011... But he countered that demand could ultimately trump the concerns... According to the Nuclear Energy Institute, nuclear energy accounts for 20% of electricity production and 55% of carbon-free electricity production in the United States. But that's just the start... The world won't come close to achieving its clean energy goals without more nuclear-power generation, which is why I believe we will see a renaissance in the coming years that will lead to a massive influx of demand. Matt then went on to share research on the particular company we mentioned earlier. We can't name the ticker here out of fairness to paid subscribers, but we can say it has been enjoying a tailwind of good news lately. From the August issue of MegaTrend Investor... During the second quarter, the firm inked three long-term uranium sales contracts with U.S. nuclear utilities. These contracts span from 2023 to 2030, so they should provide the company with a good backlog of work for the next few years. Today, this company's shares are still trading below Matt's recommended buy-up-to price, so you ought to check it out. Alliance members and existing MegaTrend Investor subscribers can find the latest update I mentioned [here](. This is a long way of saying your point is taken, especially in an environment where commodity prices could move much higher in the decade ahead. On that note, Matt also recently made six new recommendations on other "rare earth metals" companies... If you don't have access to Matt's work on this topic already and are interested, [click here to learn more]( in a recent presentation he recorded. You'll hear more detail about these fresh picks, plus how to get started with a subscription to MegaTrend Investor toward the end. All the best, Corey McLaughlin Baltimore, Maryland September 1, 2022 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 937.4% Retirement Millionaire Doc ADP Automatic Data 10/09/08 858.6% Extreme Value Ferris MSFT Microsoft 02/10/12 805.5% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 552.5% Stansberry Innovations Report Wade HSY Hershey 12/07/07 534.9% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 408.0% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 397.9% Retirement Millionaire Doc WRB W.R. Berkley 03/16/12 360.0% Stansberry's Investment Advisory Porter NTLA Intellia Therapeutics 12/19/19 296.2% Stansberry Innovations Report Engel FSMEX Fidelity Sel Med 09/03/08 292.2% Retirement Millionaire Doc Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 3 Retirement Millionaire Doc 1 Extreme Value Ferris 4 Stansberry's Investment Advisory Porter 2 Stansberry Innovations Report Engel/Wade --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst ETH/USD Ethereum 12/07/18 1,279.0% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,178.5% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,059.5% Crypto Capital Wade MATIC/USD Polygon 02/25/21 845.6% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 433.5% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Band Protocol crypto 0.32 years 1,169% Crypto Capital Wade Terra crypto 0.41 years 1,164% Crypto Capital Wade Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Frontier crypto 0.08 years 978% Crypto Capital Wade Binance Coin crypto 1.78 years 963% Crypto Capital Wade Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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