Danny the Goof

'Danny the goof'... If you want to know the truth, just invert everything... Never, ever sell completely out of the market... Don't make this mistake... The true meaning of a 'prediction' for investors... Exactly why I repeat myself so much... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] 'Danny the goof'... If you want to know the truth, just invert everything... Never, ever sell completely out of the market... Don't make this mistake... The true meaning of a 'prediction' for investors... Exactly why I repeat myself so much... --------------------------------------------------------------- Apparently, I (Dan Ferris) am not a very good communicator... I've always thought that I state my views clearly. And a team of very smart people look at all my published reports and Digests before they go out to our subscribers. So if something isn't clear, they fix it (or make me fix it). That's a big reason why we've developed a reputation here at Stansberry Research as a valuable source of financial insights. And more importantly, we're recognized as a company that communicates those insights without bogging you down with Wall Street jargon. Maybe I've been wrong all this time... You see, last weekend, a subscriber wrote in and showed me that it's not only possible to misunderstand me... but to get everything I've said backward. Here's what he wrote... I have Steve Sjuggerud's services for the past 5 years. Not one time was Danny Boy Ferris ever bullish in the 5 years I have been a subscriber. You have this erroneous thinking at the publication that all investors are mindless herds and need to be shepherded by your experts like Dan. If I listened to Dan Ferris for the past 5 years, I would be losing money instead of being far ahead of the game in 2022, and still with lots of cash on hand. No, I never expect Dan to be bullish ever, especially at the stock market bottom. Isn't the name of the game, buy low, sell high. But for Dan it's always sell stocks and short the market. Perhaps I'm being a little sensitive. But I think this guy is kind of being a jerk. He even titled his e-mail, "Danny the goof." That nickname makes me chuckle. I might start signing my Digests that way. My only real problem with this e-mail is that it's so false that I had to do a double take. At first, I didn't think the subscriber could possibly be referring to me – even though he used my name five times (six if you count the e-mail's subject line). Then, I figured we could use this as a teaching moment... After all, if he has read my writings for five years and still got things this wrong, I'm afraid that maybe other readers have done so, too. So let's set the record straight right now... If you want to know the truth, just invert everything in the e-mail. The subscriber said I've never been bullish in the past five years... Not. One. Time. And yet, I was bullish from April 2020 through early December 2020. That was just after the darkest days of the COVID-19 pandemic. The headline of the April issue of Extreme Value bore an unmistakably bullish title... And if that wasn't clear enough, the first two sentences clarified my view further... Yes, this is really Dan Ferris. And yes, I'm that bullish. I could reprint the whole first page of that newsletter, but I won't waste your time. It would show you that we were prepared to hold through further volatility... that we weren't "calling a bottom"... and that we were simply turning bullish because the market had lopped off six years of valuation increases in one month and had started coughing up great bargains. That's what value investors do. If something you want falls in price, you buy more. It's as simple as that. Of course, as I said, I turned bearish again in December 2020... That was just one to three months before bubbles in various types of garbage stocks started collapsing. And almost two years later, I'm still bearish on the overall stock market today. You could argue that I was early again by flipping back to bearish in December 2020. But given that several equity bubbles peaked in 2021 and have totally fallen apart this year, I wouldn't say I was early at all. Rather I would say that... I nailed one of the biggest calls anybody in our business has ever made. Feel free to write in and quibble about that. But I'll probably crow about it for the rest of my life. And frankly, I bet a lot of folks have saved money by listening to me over that span. Someday, of course, I'll turn bullish on stocks again. It's silly to suggest otherwise. And yet, that's exactly what the subscriber basically did... The subscriber also reasoned that 'it's always sell stocks and short the market' for me... And he said that he "would be losing money instead of being far ahead of the game" if he had followed my advice. The truth is, once again, the opposite... Sure, in Extreme Value, my research partner Mike Barrett and I have recommended a handful of short positions over the past five years. But we've also made more than 50 long recommendations since 2017. And more importantly, if my subscribers have followed along... they've been making a lot of money. Our recommendations over that span include big winners like a 187% gain on bitcoin, a roughly 150% return and counting on TFI International (TFII), and a double on Sprott (SII). Plus, our May 2022 recommendation is up 34%, clearly bucking the overall trend in stocks. Not only that, but I've repeatedly said in Extreme Value and here in the Digest that... You should never, ever sell out of the market and keep all your money in cash. Anyway, now you know why I always repeat myself. No matter how many times I try to help folks, someone still doesn't listen. And despite that, I feel like it's my duty to make sure as many folks as possible know how to prepare. That's why I did it again on Tuesday. I was the final speaker on the second day of our annual Stansberry Conference at the Encore Boston Harbor resort and hotel. I started by saying... 'Let me see a show of hands'... Then, I asked who regularly reads Extreme Value... who regularly reads the Friday Digest... and finally, who regularly listens to the weekly [Stansberry Investor Hour podcast]( (which, by the way, is now co-hosted by Digest editor Corey McLaughlin). Many hands went up all three times. So I thanked everyone for reading my work and listening to the podcast. (I know it's a cliché, but it was a truly humbling moment. I'm grateful for all our subscribers and listeners. You allow me to get up every day and do what I'm excited about and enjoy.) Next, I said, "So... you read Extreme Value every month, the Digest every Friday, and you listen to the podcast every Monday..." I took a long pause, smiled impishly, and said... 'Well, then you know what I'm going to say'... The crowd laughed. Almost all of them have read and listened to my bearish views for two years. They know where I stand. And yet, I painted the picture in broad brush strokes one more time... That's because, as we saw at the outset today, someone in the crowd always gets it all backward. There's always one person who doesn't understand that I'm just trying to help. I've painted the same picture many times now. And as time passes, it becomes clearer... It appears that the greatest financial mega-bubble in all recorded history has formed a massive top. It has taken somewhere between 22 and 29 months (so far) to get there. I've never put it quite this way before, but the top happened in two big pieces – bonds and stocks. Bonds peaked in 2020. And so far, stocks have peaked in 2021 and 2022. Two events define the bond market top... First, on March 9, 2020, during the chaos of COVID-19 and the Federal Reserve's massive reduction in interest rates, the 10-year U.S. Treasury note's yield sunk to its all-time low. It yielded as little as 0.398% during the day. And it closed at 0.499%. The second event that defined the bond market top was on December 11, 2020, when the amount of negative-yielding sovereign debt in the world (mostly Japanese and European) reached its all-time high of nearly $18.4 trillion. It's down to about $1.7 trillion today. These extremes represent 5,000-year lows in bond yields. And since yields and prices are inverses, it also means 5,000-year highs in bond prices. That's the current situation with bonds. Now, let's look at stocks... Stocks started topping in the first quarter of 2021... By that March, equity market bubbles in clean energy, cannabis, special purpose acquisition companies, and unprofitable technology companies had all topped out. [As we've discussed many times in the Digest]( Cathie Wood's ARK Innovation Fund (ARKK) best represents the latter bubble. The exchange-traded fund hit its all-time high of $156.58 per share on February 12, 2021 – [the day after I first warned you about it]( in the Digest. The topping party picked up in the fall of 2021... Bitcoin hit its all-time high of roughly $69,000 in October 2021. Small-cap stocks topped out on November 8, when the Russell 2000 Index peaked. And then, the tech-heavy Nasdaq Composite Index peaked at a little more than 16,000 on November 19. [You may recall our November 19, 2021 Digest](. In it, I encouraged you to... Invest accordingly. Reduce your speculative bets. Make sure you have plenty of cash ready to go when the bust happens. And consider shorting vulnerable stocks if you're comfortable. This is a dangerous time for investors. Be careful. And don't say I didn't warn you. I think that qualifies me to take credit for calling the top in the Nasdaq to the day. (Again, keyboard cowboys, your quibbles about that will likely be ignored. But feel free to write in.) Then, the S&P 500 Index hit its all-time high on January 3, 2022. Perhaps fittingly, it was the first trading day of this crazy year in the markets. The top of the biggest financial mega-bubble of all time was in – at least, as it stands so far. You know what happened next... In 2022, U.S. stocks endured their worst first half of a year since 1970. At the same time, the U.S. Treasury market had its worst six months since 1788. Mortgage rates have more than doubled. Inflation hit 40-year highs. The double-barrel hit to financial assets and the housing market generated Americans' biggest-ever quarterly decline in household net worth in the second quarter of this year. And don't forget... The Fed is raising interest rates at an unprecedented pace. The central bank remains steadfast in its effort to bring the year-over-year changes in the monthly Consumer Price Index from the current level of around 8% back down to its target level of 2%. Meanwhile, everyone from talking heads, fund managers, and Wall Street status-quo keepers has tried "calling the bottom" along the way. And yet, none of them were bearish enough on stocks or bonds. Now, let's get to the question everybody always asks after I tell them all that... What happens next? The only credible answer to that question is... "I don't know." Instead, I encourage you to ask a different question. You should ask something like, "How can I use history as a guide here?" Like I told the crowd in Boston (and have said in the Digest many times)... Don't make the mistake of thinking this bear market is an average one. If I'm right and we've just watched the biggest financial mega-bubble of all time form a massive top, then what follows will not be a run-of-the-mill bear market... It will more likely be a horrendous bear market that takes the S&P 500 and other big stock indexes down 70% or more. Even worse... an up-and-down, ratcheting-sideways market will then follow that. And it might not make a new high for 10, 15, 25... or even 30 years. Don't just take my word on that. Learn from history... It happened after mega-bubbles topped out in U.S. stocks in 1929 and 2000 (after which the Nasdaq went sideways for 15 years). And it happened in Japan in 1989. The Japanese stock market still hasn't made a new high after going sideways for the past 33 years. You, me, and every investor who fears this type of calamity wants to know... What the heck can we do about it? I've urged you many times to "[prepare, don't predict]( I've also said many times that it's foolish to try to make market predictions. And yet, I've essentially predicted the bear market that began in 2021 and finished topping out this past January. (Or perhaps it's still ongoing as far as anyone can tell.) I tried to explain this apparent contradiction last week. But I found a much easier way to do that a couple of days ago. And I wanted to share it with you today... You see, most times, a prediction is something you say about the future. Then, you wait to see if it comes true. The whole thing is often just an intellectual game. And for the most part, it doesn't affect your life in a big way at all. But as an investor, it's much different... A prediction isn't what you say. A prediction is what you do with real money. In my case, a prediction is what I research and recommend our subscribers do with their real money. And I've consistently recommended that you take the same four actions... - Hold the stocks of great businesses. - Sell unprofitable, cash-burning tech stocks and other trashy speculations. - Hold plenty of cash. - Hold gold and silver. These four investments form the core of a truly diversified portfolio. But again, as we learned with the one subscriber's e-mail at the start of today's Digest, I can't say this stuff enough. So now, let's remember why we do these things... First, let's talk about the stocks of great businesses... We keep holding stocks partially because nobody knows the true timing of market tops and bottoms until they're far enough in the past for us to see them clearly. But mainly, we do it because we can't afford to not be invested in the endless process of real wealth creation... Every day, through every kind of economic environment we can name, armies of people wake up and make the world a little wealthier than it was the day before. Over the long term, that process can make us a lot of money as investors. Constantly participating in that process is essential if you hope to build long-term wealth. It's the easiest way to get rich in the U.S. – and maybe the entire world. Again, that's why I say you should... never, ever sell all your stocks and go to 100% cash. You should sell garbage stocks because they're only fun and profitable during bull markets... In bear markets, they get absolutely crushed. And many of them go out of business. They don't earn cash. They burn it. The only way these types of companies can survive is by raising cash through new equity and debt issuance. And when their stock falls 70% or 80% – as many already have – it becomes impossible to do that. So many of the burning matches become nothing but ashes. It was fun while it lasted. But now, it's over... Get out of garbage speculations. They're not coming back. In addition to always holding plenty of cash, you should hold some gold and silver... Gold should be the larger holding of the two precious metals. It has a 5,000-year history of preserving wealth over various time frames, many of which are well within the span of a single lifetime. This year provides a great example of that... Yes, gold is down roughly 10% since the start of the year. But it has been an extraordinarily difficult year for most investments. So a 10% loss is pretty flat compared to everything else. The thing is... I expect gold to perform well in terms of the U.S. dollar over the next decade. Gold's history as a wealth preserver will become more valuable as the Fed overreacts to each new crisis with too much tightening... then too much easing. It has done that consistently for the past few decades. And I don't think that will change anytime soon. A bear market's job is to bring investors back to reality... If we don't learn what assets and businesses are worth, we'll eventually come to regret it. Perhaps worst of all... not appreciating what things are worth can ruin your retirement if you encounter a big bear market late enough in your investing career. Value investing generated big returns in the Japanese sideways market. And I expect this investing style will do the same thing in the U.S. sideways market that will likely begin within the next two to three years and last a decade or more. We've hit on yet another reason why I keep repeating myself... Most of our subscribers are older folks like me. (I'm almost 61 years old.) They can't afford another dot-com bust or financial crisis. They need to preserve the value of the wealth they have right now... and they want to continue growing it into their retirement years. Fortunately, I can help with both of those things... If you haven't checked out my latest warning about the markets, I encourage you to take some time to do that this weekend. We don't need to be victims in this sideways market. To get you started, just for tuning in, you'll learn the names of two well-known stocks I think you need to sell immediately. These are two of the most popular and widely held stocks in America right now. So there's a really good chance you own at least one of them. Again, this warning is free for all Digest readers. But don't delay... One valuable bonus that could help you make even more money will go away after Monday. [Get started right here](. --------------------------------------------------------------- Recommended Links: ['The End of Investing as You Know It']( The man who predicted the Lehman Brothers bankruptcy, "bitcoin crash," top of the Nasdaq, and historic inflation in 2022 is issuing his newest major warning. He says DO NOT be fooled by any recent rallies and that you need to prepare immediately for [what's coming next](. --------------------------------------------------------------- [Huge Recession Loophole (See These Charts)]( Amid today's market turmoil, THIS is one of the biggest and most bullish opportunities today: a red-hot sector with almost unlimited pricing power and a history of outperforming in recessions. It's also the sector where Dr. David Eifrig spent half his professional life, meaning he's extremely qualified to spot world-class opportunities today. [Take a look at the evidence here](. --------------------------------------------------------------- New 52-week highs (as of 10/27/22): AutoZone (AZO), Booz Allen Hamilton (BAH), Comfort Systems USA (FIX), Freehold Royalties (FRU.TO), General Dynamics (GD), Huntington Ingalls Industries (HII), Hershey (HSY), Humana (HUM), Lockheed Martin (LMT), Northrop Grumman (NOC), O'Reilly Automotive (ORLY), Rollins (ROL), iShares 0-3 Month Treasury Bond Fund (SGOV), Texas Pacific Land (TPL), and ExxonMobil (XOM). In today's mailbag, we're sharing feedback on [yesterday's Digest]( about what to make of different opinions from our editors and analysts – like Ten Stock Trader editor Greg Diamond's recent "bottom" call and my belief that this market has more downside ahead. What's on your mind? As always, you can e-mail us at feedback@stansberryresearch.com. "I think markets 'may' retest their Oct 13th 3,500 bottom, perhaps penetrating support down to 3,300 to 3,000, although 2,700 would not be unusual in an Economic Earnings Recession on top of a Formal Recession. I do not enjoy contradicting people far smarter than me, but I have not seen capitulation yet... "BTW, watch core inflation... One, rent inflation will continue to bleed into overall inflation for two years. Two, core inflation is understated by 2% to 4%, and headline is understated by twice that much, and the Fed knows that a very large segment of Main Street knows it too. "Fed rates will have to pass core rates and hold 6 to 12 months to do their job. Otherwise, the next Fed fix will be 15% rates." – Stansberry Alliance member Bill B. "I believe Dan before Greg. We will see the market go down... One year cap loss, for Meta is $588 billion, Microsoft $693 billion, Alphabet $698 billion. [Only] hope is Apple and Netflix. "It's time to look for value. Stocks with dividends, cash flow and earnings... Only way to invest." – Paid-up subscriber Herm S. "Greg Diamond says the bottom is in. Dan Ferris says we have a lot further to go, 75%! For what it's worth (probably not much), I think they are both right, just different time frames. "Greg is right over the next year or maybe two. Dan is right over the next one or two decades. It's been almost 100 years since the market as a whole lost 75% of its value, though the Nasdaq lost that much in 2000 to 2003. "As much as it goes against apparent logic today, I think we have one more all-time high before the bottom really falls out. Then Dan can have his day, though it will feel just as unlikely as calling for another high does today. "That's why I doubt the real high is in, sentiment never got anywhere close to what I remember of the year 2000, in the Nasdaq stocks for sure." – Stansberry Alliance member John T. "Kudos to all at Stansberry (especially Corey & team) for running the gauntlet of millions of disparate investors' expectations and being true to their beliefs and analysis. I am (and surely Porter is) proud of you! To be true to yourself, your beliefs, and your mission is the epitome of bravery, courage and conviction. "I asked last summer for guidance on Stansberry's analysis of current inflation/CPI expectations related to past history and Corey (et. Al.) provided the BEST analysis I've read on probable interest rate projected progression. The interest rate progression analysis provided was/is worth its weight in gold. "Your analysis provides a map to the projected inflation trend, which leads to projected equity valuations and therefore equity trends. (Caveat – All this is based on the belief/presumption that Markets are forward looking entities.) "From the data, February to April 2023 is max rate increase (which I believe is also probably true) therefore the aggregate bottom of this bear cycle is in! (likely October 13 for equities & October 21 for debt/interest). "This bottom is NOT incongruent with Dan (et. Al.) belief of a sideways decade of returns, but actually reinforces that belief... 0% interest rates seem to be history for this 2020 decade except for Japan, therefore 2% to 4% three-month T-bill is boundary for rest of decade. Limited equity upside and limit downside. THE CHURN begins!!! "Kudos to Stansberry. I hope your ethos (informed opinions) will catch on. We are better together regardless of our differences than we are apart! If WE are informed!" – Paid-up subscriber David H. "All this nonstop talk about inflation and what the Federal Reserve will or will not do with rates... and the solution is so simple it's comical. Step one is to throw the bums at the Federal Reserve out on the street, disband the whole entity and let the free markets decide where interest rates should or should not be. Step two is to stop deficit spending and keep balanced books. Start paying off the National Debt and don't allow it to grow a penny more. "I'm only kidding of course, we all know the corrupt politicians in D.C. will never allow either of these events to occur... at this point it's just a shell game anyway... they have far too much debt to EVER get inflation under control, raising rates will just make it worse, as then they will have to print more money just to service that debt. "Welcome to the Weimar Republic everyone!" – Stansberry Alliance member David R. Good investing, Danny "The Goof" Ferris Eagle Point, Oregon October 28, 2022 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst ADP Automatic Data 10/09/08 831.1% Extreme Value Ferris MSFT Microsoft 11/11/10 808.5% Retirement Millionaire Doc MSFT Microsoft 02/10/12 692.7% Stansberry's Investment Advisory Porter HSY Hershey 12/07/07 559.0% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 540.4% Stansberry Innovations Report Wade AFG American Financial 10/12/12 431.9% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 414.0% Retirement Millionaire Doc WRB W.R. Berkley 03/16/12 400.5% Stansberry's Investment Advisory Porter TPL Texas Pacific Land 11/05/20 351.6% Stansberry's Investment Advisory Gula ALS-T Altius Minerals 02/16/09 303.8% 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/Gula 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 1,256.8% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,140.3% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,090.2% Crypto Capital Wade MATIC/USD Polygon 02/25/21 865.0% Crypto Capital Wade TONE/USD TE-FOOD 12/17/19 527.5% 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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