There's a Killer on the Loose

The biggest prediction of my career... 800 years of catastrophe is not an accident... The most epic bull market in history is just warming up... There's a killer on the loose... Are you prepared for calamity? [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] The biggest prediction of my career... 800 years of catastrophe is not an accident... The most epic bull market in history is just warming up... There's a killer on the loose... Are you prepared for calamity? --------------------------------------------------------------- You might not believe what you're about to read... I just made the biggest prediction of my 20-plus-year career at Stansberry Research. On Wednesday night, I told an online audience of tens of thousands of folks, many of whom have never heard of me or Stansberry Research, why I believe there's a lot more downside in stocks from here... and that it'll be followed by a 20-year sideways market in which the S&P 500 Index doesn't make a new high. Regular Digest readers know I've been bearish on the stock market for more than a year. I've warned about the likelihood of a multiyear sideways market. That's not the part they won't believe. However, regular readers have heard me say, "Prepare, don't predict." I also have said that making predictions is a fool's errand. And yet, on Wednesday night, my webinar co-host Amy Gamper and I must have used the word prediction 100 times to describe my viewpoint. So what gives? Have I done a 180 and gone into the predictions business? What about all that talk about predictions being a fool's errand? Was I pulling your leg? The explanation is simple. We humans can't help but think about the future... It's impossible to avoid such thoughts. I doubt you can be a functioning human being without thinking about the future and trying to make some guess about how it might look. The process of valuing a business, which I've spent most of my career studying, is based on guesses about the future. I'll go even further... It is impossible to value any asset without making assumptions about the future. So when I say "Prepare, don't predict," I'm referring to the moment when you put your hard-earned capital at risk. My mantra is about not betting 100% of your capital on any (especially macro) prediction or forecast. A longer way of saying my three-word mantra might be, "Never bet your whole portfolio on any single prediction or forecast. You don't know the future and neither does anybody else. A good investor must prepare his portfolio for a wide variety of outcomes." If you saw my presentation Wednesday night, this might be an unsatisfying explanation so far. Two things about that. First, the truth is often unsatisfying... For example, it's as unsatisfying as it is true that nobody wants to be told it's easy to get rich slowly. All you have to do is commit to the discipline of saving and investing for several decades. Second, there's more to it than what I've explained so far. Investors need to learn to think about the future the way historians do. They need to learn about the past and think about whether the future might resemble it. The future won't repeat the past, but as the saying goes, it'll rhyme. That's what I did Wednesday night. I expressed my belief that history is about to rhyme with specific episodes in the past, and those episodes were some of the most difficult times investors have lived through over the past century or more. It shouldn't matter if I called it a prediction or a historical rhyme (which you have to admit is an unwieldy term). Like I showed you Wednesday night, past mega-bubbles all started out like the current one started, and every one of them ended with a steep bear market followed by a sideways market. I simply find it far too difficult to believe that this mega-bubble will turn out differently. You've probably heard it said that "this time is different" are the four most dangerous words in finance. I couldn't agree more. That phrase is the title of a famous financial book by Carmen Reinhart and Kenneth Rogoff. The book covers eight centuries of financial crises in 66 rich and poor countries across five continents. Something that keeps happening over and over again for 800 years is not a coincidence... It's human nature in action... and proof that groups of human beings in markets behave certain ways under certain conditions... For example, what's the difference between people getting caught up in the frenzy to pay any price for tulip bulbs in Holland in 1637 and the frenzy to pay any price to buy non-fungible tokens ("NFTs") in 2021? Tulips and NFTs sure are different. One is essentially a giant flower seed and the other is a digital widget. But the human behavior in both episodes looks pretty much identical to me. People saw the price of something increasing and lost all relationship with what they knew – if anything – about its value. They behaved desperately, trying to make a fortune overnight. Many of them eventually lost everything and lived to regret such a vain effort. Before every speculative frenzy fell into a crisis, some expert said, "this time is different." But it never was. And it's never different this time. This is not just an old market adage. It's some of the most profound, time-honored, proven wisdom available to humanity. The Book of Ecclesiastes says, "There is no new thing under the sun." That doesn't mean you can't invent new ways to do everything from cooking your dinner to moving between two points on the globe. History tells us you can do those things. The Bible passage means something else. It means human nature never changes. Financial crises – including mega-bubbles, bear markets, and multidecade sideways markets – are as old as markets and will happen as long as human beings are the primary actors in markets. If Martians take over one day, maybe Martian nature will rule the stock market... Until that day, human nature rules. So yes, Amy and I used the word prediction 100 times Wednesday night, but I hope you can see that one word is never the whole story. I've told the whole story about the current mega-bubble here and in the pages of Extreme Value dozens of ways on dozens of occasions. The basic outline is likely familiar to regular Digest and Extreme Value readers by now, but I'll repeat it for convenience... The biggest mega-bubble in all of recorded history started peaking in March 2020, when the 10-year Treasury bond dipped to its all-time low yield of 0.499%. In December of that year, the amount of negative-yield debt in the world hit $18.4 trillion. That period, from March 2020 to December 2020, was the top of the biggest bubble of all time in any single asset: bonds. But it was just one part of the mega-bubble... The stock market started peaking in February 2021, when bubbles in unprofitable speculative tech stocks, special-purpose acquisition companies ("SPACs"), cannabis stocks, and clean-energy stocks all peaked. In November 2021, the Russell 2000 Small-Cap and Nasdaq Composite indices both peaked. And on January 3, 2022, the S&P 500 topped out. It took roughly two years for the biggest mega-bubble in all of recorded history to peak, but it has done so. We're still at the beginning of what I fear will be the most epic bear market in history. No mega-bubble has ever ended without a brutal bear market, followed by a decades-plus-long sideways market... For example... - A negative 89% bear market and a 25-year sideways market followed the September 1929 Dow Jones Industrial Average mega-bubble peak. - A negative 78% bear market and a 15-year sideways market followed the March 2000 Nasdaq mega-bubble peak. - A negative 76% bear market and a still ongoing 33-year sideways market has followed the December 1989 mega-bubble peak in the Japanese stock market. I consider repeating all this once again to be a valuable service. It's too hard to remember every day that part of what you need to prepare for is the worst thing that will ever happen to you as an investor. Human nature again. But keeping it in your awareness is more urgent than you may imagine. The mega-bubble + bear market + sideways-market phenomenon is like a convicted serial killer who has escaped from prison. Would that scare you? Of course! It would be a nightmare for anybody near that prison. Even if you lived thousands of miles away, you'd fear for those nearby. Well, bursting mega-bubbles are like serial killers on the loose. They've killed millions of folks' retirements before, and they'll do it again. And they're slashing away at them as you read this. Just look at stocks and bonds since January 1... It's the worst start to the year for stocks since 1970, and the worst U.S. Treasury bond performance since 1788. Inflation is at 40-year highs. Mortgage rates are above 7%. Inflation is above 8%. There's no way we'll get out of this with a "soft landing." We're going to experience a very hard landing, likely featuring stagflation, recession... and a sovereign debt crisis whose magnitude is difficult to fathom. So call it a prediction. Call it a forecast. Call it corned beef on rye if you like. I don't care what you call it... I've identified something which the market's actions – unpleasant as they've been – suggest will get a lot worse... and which most folks aren't prepared for at all. If you want to know where we are right now, check out economist/portfolio manager John Hussman's latest market comment titled, "Estimating Downside Market Risk," in which he quoted the classic 1932 finance book, The Dow Theory, by Robert Rhea: There are three principal phases of a bear market: the first represents the abandonment of the hopes upon which stocks were purchased at inflated prices; the second reflects selling due to decreased business and earnings, and the third is caused by distress selling of sound securities, regardless of their value, by those who must find a cash market for at least a portion of their assets. If you want to know where we are right now, just ask yourself... Does it seem like investors have abandoned the hopes upon which stocks were purchased at inflated prices? It seems to me like they can't wait for any reason to pour their money back in. They're still in denial and desperately trying to win back what they've lost. That never ends well. I've devoted myself to warning folks about what the market's action of the last couple years likely means for the next several years. I hope I'm wrong, but like I said, it seems foolish to believe that this time is different, since it never has been different in past mega-bubbles. Even if I'm 50% right, we're talking 50% of the worst calamity U.S. investors have faced since the Great Depression. Add to that the disturbing fact that most investors today have never really dealt with the combination of high inflation, rising interest rates, and a bear market. We haven't seen inflation this high for 40 years. A 50- or 60-year-old investor probably wasn't buying stocks back then. If they were, they were just getting started and got lucky to come in at the tail end of the brutal 1970s inflationary period. Investors are facing the worst calamity ever... and they're totally unprepared... Most investors today are more likely to deny what's happening and what it means than they are to study up on their market history and prepare their portfolios. It all sounds terrible, I know, but honestly, as I showed Extreme Value subscribers in the October issue (which just came out last Friday), it's not all bad news. There are strategies which are perfect for the type of market that's unfolding today, and which I believe will dominate the scene for at least a decade, maybe two. The specific recommendations we've made by using those strategies are for Extreme Value subscribers, but I shared as much as I could with the public for free in the presentation I gave Wednesday night. And the stocks we've found aren't just about preserving wealth, though that's a key consideration. We've also studied the kind of businesses that do well in bad times, and which we expect will do well under a variety of scenarios that could play out over the next several years, including high inflation, stagflation, recession, war, currency crises... and many others I can't fathom right now. We've created a "done for you" 10-stock portfolio that should help you survive and thrive during the difficult times ahead. I talk about that in the presentation, too. I can't give away Extreme Value stock recommendations, but the presentation – during which I share two stocks I think you ought to sell right away – is free of charge. They're two of the most popular stocks in the world right now, so you'll want to hear what they are and why I think you should sell them now. Just click here and check it out. It's not short... but please watch the whole thing. Do it so you can tell yourself you gave my warning a chance. If you disagree with my conclusions, no harm. Along the way, you'll learn some interesting market history during the presentation. So you'll still be glad you watched the whole thing. I hate to think of all the folks who'll be blindsided by what's coming. I hate to think I didn't do everything to convince everybody I could possibly convince to wake up and prepare. I hope you'll take a look at my presentation. To watch it, [click here](. The Waiting Is Over! Doc has done it! After sitting at 134 consecutive winning trades last month, two shy of his personal best record, Doc closed out six more winners in Retirement Trader this month to set a new mark of 140 straight wins. The record-breaking trade came via oil major Chevron (CVX), for a roughly 48% annualized gain... Doc's win streak started on May 15, 2020, so it has lasted 889 days. Along the way, as we've noted, he started growing a "playoff beard" that he promised not to shave until he set a new record. The beard has gotten really, really large (below is an up-to-date image). The question now is will he cut it? More seriously, the point is this... The S&P 500 is down about 20% year to date, yet Doc has closed out 40 winners this year alone. Obviously, Doc's Retirement Trader strategy is one that can work even in bear markets. [Click here]( to learn more about it today... and congrats to Doc and his subscribers. And stay tuned. We'll have more information soon on a special celebration we are putting together to mark the occasion of Doc's new record. --------------------------------------------------------------- Recommended Links: ['Stocks to Fall 75%... And That's NOT the Worst Part!']( He successfully predicted the fall of Lehman Brothers... the bitcoin crash... the top of the Nasdaq last November... and that inflation would wreak havoc on the economy this year all the way back in January. Now, Dan Ferris says the biggest mega-bubble in stock market history is about to burst... and you need to prepare immediately. [Click here for the full story](. --------------------------------------------------------------- [Buy These THREE Stocks Before Today's Closing Bell]( Yes, the markets have been volatile... but the massive prediction Dave Lashmet unveiled just days ago is a once-in-a-lifetime situation. He believes this is one of the last chances you'll have for a big win in 2022... no matter what the market does next... specifically in THREE stocks that could begin SOARING immediately after a major potential announcement on Sunday, October 23. [Get the full story before today's closing bell here](. --------------------------------------------------------------- New 52-week highs (as of 10/20/22): Black Stone Minerals (BSM), Humana (HUM), and Northrop Grumman (NOC). In today's mailbag, more feedback on Dan's presentation... and a question and answer about "the bottom is (probably) in" indicators... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "I found Dan's presentation to be extremely informative. He had plenty of data to back up the concerns he identified. But he also presented only one side of the story, making it sound more like the predictions he says he never makes (prepare, don't predict). I happen to do my own cycle studies, and significantly agree that we have plenty more down to go. So where do I disagree? "Everything presented assumed that stock prices were headed down, not in a straight line, but without a break, to an ultimate bottom. If the current inflation hangs on for a while, an indicator like P/S could improve, just because the S grows, due to inflation. It is also possible that, rather than occur within a year, there could be two low points; one in a year and another, one to three years later. The second low could easily bring P/S down to much more reasonable numbers. Those would be very undesirable conditions, but not the disaster he focused on. "And finally, the one issue that's always missing when projections are made. It is assumed that nothing is done to mitigate the circumstances (including taking actions that make the problem worse)... "As a bottom line, Dan is 100% correct to point out that we (mostly the Fed, but with help) have taken actions to make current financial conditions look a lot like the 1930s. This is not a pretty picture." – Paid-up subscriber Norm R. "Appreciated Dan's perspective on the market [Wednesday] night. It's an understatement to say the markets have already been brutal this year and it is a little frightening to think that even more pain is ahead. I have always chosen to make the investment decisions in my own account and completely changed my investment approach this year because of the bear market we have been in. "I'm sure not everyone will agree with my approach but I basically did what they say not to do and sold all but one blue-chip stock in June. I moved heavily to cash and I then chose to monitor and invest about 25% of this cash in bullish or bearish sector ETFs depending on market trend indicators that I watch... By having fewer positions, I can be more reactive to changes in the market. "This is certainly a hands on approach that I monitor daily, but it has been profitable and given Dan's perspective, I may need to use this strategy much longer than I thought." – Paid-up subscriber Kevin L. "Corey, Thank you for the excellent information that you publish in the Digest. I read the posts every day that I can, and make sure to catch up on any that I miss due to scheduling conflict. You have mentioned 'the bottom is (probably) in' indicators several times, and the readers responded with overwhelming positive feedback. Will, or are, those indicators available to Alliance subscribers? If so, where can we find them? Thanks again for everything you and the rest of the Stansberry Team do for your subscribers." – Stansberry Alliance member James E. Corey McLaughlin comment: James, thanks for the note. I'm replying here for the benefit of all... For now, I have been updating the indicators in the Digest roughly once a week over the past few weeks, and I'm aiming to put together a formal chart with them all in one place after our Stansberry Conference next week. But in your question, you bring up a good suggestion... I'll look to get these indicators housed on our website, too, so they are easier to find. Good investing, Dan Ferris Eagle Point, Oregon October 21, 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 11/11/10 843.4% Retirement Millionaire Doc ADP Automatic Data 10/09/08 813.1% Extreme Value Ferris MSFT Microsoft 02/10/12 723.2% Stansberry's Investment Advisory Porter HSY Hershey 12/07/07 535.1% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 471.1% Stansberry Innovations Report Wade AFG American Financial 10/12/12 409.0% Stansberry's Investment Advisory Porter WRB W.R. Berkley 03/16/12 394.9% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 385.0% Retirement Millionaire Doc TPL Texas Pacific Land 11/05/20 316.3% Stansberry's Investment Advisory Porter ALS-T Altius Minerals 02/16/09 276.4% Extreme Value Ferris 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 5 Stansberry's Investment Advisory Porter 2 Extreme Value Ferris 2 Retirement Millionaire Doc 1 Stansberry Innovations Report 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 1,129.8% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,124.8% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,091.2% Crypto Capital Wade MATIC/USD Polygon 02/25/21 839.4% Crypto Capital Wade TONE/USD TE-FOOD 12/17/19 410.7% 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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