You Need to Hear This

Something has to give... Wall Street hasn't priced in a recession... Narrowing the view... The value of cheap stocks... Think about bonds... You need to hear this... Don't miss Greg Diamond's call for 2023... Sign up for Greg's free event... Editor's note: Dan Ferris will be back in his regular Friday Digest slot next week. […] [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] Something has to give... Wall Street hasn't priced in a recession... Narrowing the view... The value of cheap stocks... Think about bonds... You need to hear this... Don't miss Greg Diamond's call for 2023... [Sign up for Greg's free event](... --------------------------------------------------------------- Editor's note: Dan Ferris will be back in his regular Friday Digest slot next week. Today, we have more of our usual fare, including thoughts from Dr. David "Doc" Eifrig and news about Ten Stock Trader editor Greg Diamond's latest market call... --------------------------------------------------------------- Something has to give... The other day, our Stansberry's Credit Opportunities editor Mike DiBiase shared with you what might be one of the most important charts in the world today... I (Corey McLaughlin) know not everyone reads every word of every Digest every day. So in case you missed it, here's the chart again... What you're looking at is earnings per share of companies in the S&P 500 Index over the past several decades... and Wall Street analysts' current expectations for future earnings through 2024. The shaded areas indicate recessions... including the one Mike expects to hit us soon. As Mike laid out on Wednesday, he sees corporate profits falling sharply this year for the first time since 2008 (not counting 2020, the year of the pandemic) because of "persistent inflation, higher interest rates, and a contracting economy." But analysts haven't priced that into their expectations for stocks... Wall Street is currently forecasting corporate earnings will grow 7% this year and another 9% in 2024... Over the past five recessions (the gray areas on the chart), corporate earnings fell by an average of around 25%. You can see that Wall Street's profit estimates for the next few years (the red line) are highly optimistic, considering we're headed for another recession. The bottom line: If a recession is ahead, Wall Street analyst expectations for the coming year appear far too rosy. Alternatively, these analysts – who are often late to the reality show of life – are right that we won't face too much of a recession. That was the message from Dr. David 'Doc' Eifrig yesterday... In Doc's [regular monthly update]( for his Income Intelligence subscribers, he covered this same dynamic. Over the next few months, he said, everyone will focus on stocks' fundamentals' – and that means their earnings... The story is this... The market is now expecting higher interest rates and a recession. But earnings estimates for the next year don't seem to reflect that. Each week, FactSet puts out a comprehensive collection of earnings projections. According to the most recent report, if you add up all the earnings estimates for the firms in the S&P 500 Index, earnings are expected to climb an average of 4.9% this year... That number has come down from mid-2022 estimates for around 13% growth – but that's still not much of a recession to me... So either the recession isn't coming, or earnings are going to disappoint. Of course, we're still talking very broadly about the earnings expectations of the S&P 500... That's useful, but it can only take you so far when making investment decisions beyond simply trading the U.S. benchmark index. Narrowing the view... Not all companies will perform or fail in the same way. Generally speaking, Wall Street analyst expectations appear to be too high if a recession is in the cards at any point over the next two years. But there could be big winners and big losers that don't fit neatly into a mainstream narrative of the "market" being overvalued or undervalued. We've touched on this point frequently over the past few months by pointing out that certain sectors, and individual stocks within those sectors, could outperform or underperform in a volatile market ahead. This is always the case, really. But we're talking about it within the context of changes to the macro environment and Federal Reserve monetary-policy era. It's a marked change from the long bull run and low-interest-rate era that stock prices enjoyed for the past decade-plus. One solution... With a potential recession yet to be "priced in" to the market, for now the solution in Doc's income-focused strategy is to find stocks that Wall Street expects little from. As Doc told subscribers... Now remember, stocks are priced on expectations. You want stocks with high earnings growth, but also with expectations that are low and easy to beat. Most of the stocks in Doc's Income Intelligence portfolio already have a low bar for earnings growth in 2023. Four are showing projections above the S&P 500 average, but most are below and some are even projected for an earnings decline in the year ahead. This is actually a good thing for these stocks. As Doc pointed out, numbers like these can scare growth investors away. Of one portfolio holding in particular, he said, "That's why we can hold shares for only 6.6 times earnings – and also get paid a 3% dividend yield." The next "earnings season" begins on January 16. We will see what happens soon enough. And as Doc said to Income Intelligence subscribers... Either way, holding quality stocks with low, beatable expectations will help us maintain our capital if we do stumble into an earnings recession. Another opportunity... Let me circle back to Mike, where we started today's essay... As he shared on Wednesday, the next credit crisis inevitably will arrive in some form in a recession. When it does, today's market expectations point to a potential giant opportunity in distressed corporate bonds. Many everyday investors overlook this investment vehicle. But Mike likes to say that a strategy involving corporate bonds can be even "safer than stocks." That's because these bonds offer the opportunity for a fixed return over a set period of time. This is an opportunity to consider that avoids stocks completely. Make sure to read Wednesday's Digest for more detail, as well as Mike's full analysis on the U.S. economy and why it's set up for trouble in 2023. You can do that [here](. And, last but not least, here's one more idea... You should hear our Greg Diamond's outlook for 2023... We're already seeing what, in technical-analysis terms, market people call "divergences" in the markets today. That means certain sectors, stocks, or indicators are going one way... while others that might have typically traded or moved in tandem are going in a different direction. Being able to recognize these divergences is crucial in a volatile market... First off, these relationships can tell you about the character of the market itself. Are things choppy? Or are we in a strong bull run where everything is going up... or the opposite and everything is going down? Being able to see these trends, which Greg does using technical analysis, can lead you to potential moneymaking opportunities and also protect you from major losses. If you're interested in short-term trading, or simply protecting your long-term portfolio from major losses or boosting returns, you ought to hear what our Ten Stock Trader editor Greg Diamond is saying now... He has a proven record for consistently finding the winners and losers... and turning them into short-term gains. This time last year – on January 13, 2022 – Greg was predicting a market top and crash ahead in 2022... and that's certainly what we saw begin the day after Greg's warning. We've heard from many subscribers over the past year giving Greg glowing compliments. Take John B., who shared... Greg, I believe that you have saved me several million dollars over the last several corrections and bear market, easily saving me more than the other Stansberry analysts have made for me. Because of you, I believe that my 401(k) has been saved. We've also heard from happy subscribers this year enjoying tremendous gains – despite a 20% cutdown of the S&P 500 in 2022. They've come to count on Greg's analysis and strategy, which allows for bullish or bearish trades... even at the same time. Greg is a technical analyst by trade... He doesn't necessarily care about the fundamentals of a business like many conventional stock analysts do. He knows them... Greg's a Wall Street veteran, and I've heard Doc say before that he believes Greg could probably successfully run any investment strategy. But the strategy that Greg prefers and trusts is focused mainly on two things: price and time... A lot of people think technical analysis is hocus-pocus. It's really a type of market analysis that weighs the odds of what could happen... but stops short of saying what will happen. The numbers speak for themselves. Throughout last year, you could have doubled your money six different times following Greg's recommendations. Next week, on Thursday, January 12, Greg is airing his next market outlook. As he says... In short, I predict we're on the verge of a massive turning point... It contains both a generational moneymaking opportunity and a nasty threat if you don't understand how this thing will unfold. On Thursday, Greg will walk through his entire prediction for 2023... If you're sitting in cash, he says it's time to get back into the market – but you must do it in a very particular way that he'll share during his special event next week. Greg will also share a trade recommendation just for tuning in to this free event. He did this last year, too – and the recommendation went 60% higher in just one week. In sum, it might be a confusing time in the markets – again, Wall Street hasn't yet "priced in" a recession – but there are moves you can make today. As we also talked about today, you might buy stocks that already have low expectations... or consider alternative investments like corporate bonds. And listening to Greg's newest message should certainly be on your list of things to do over the next week. Even if you aren't interested in acting on his short-term trading recommendations, just taking in his market outlook will also be valuable in 2023. [Click here to sign up for Greg's free event now](. Has the Fed Lost Its Mind? In the newest episode of Making Money With Matt McCall, Matt takes a look at the minutes from the Federal Reserve's December meeting... And he's now officially concerned for the group of know-it-alls... [Click here]( to listen to this episode of Matt's podcast right now. And to catch all of the podcasts and videos from the Stansberry Research team, be sure to [visit our Stansberry Investor platform]( anytime. --------------------------------------------------------------- Recommended Links: # [January 12 Will Change Everything]( The man who predicted the 2022 crash a day before it began now predicts the market will soon see a massive move in 2023. It could be a turning point for millions of Americans. But if you know what's coming, you could double your money 10 different times – without buying a single stock – as he has shown before in similar conditions. [Click here to learn more](. --------------------------------------------------------------- # [The No. 1 Gold Play for 2023]( Some of the richest men in the world are jumping into gold right now... because evidence suggests we could see MUCH HIGHER prices in the coming weeks. But if you're not taking advantage of a little-known way to invest for around $5 today, you're missing out. [Click here for full details](. --------------------------------------------------------------- New 52-week highs (as of 1/5/23): None. A busy mailbag today with feedback on [yesterday's Digest]( about the Southwest Airlines debacle over the holidays and more thoughts on [Mike DiBiase's Wednesday Digest](... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Corey McLaughlin's article about Southwest Airlines' meltdown over the holidays was excellent. The only beef I have with Corey is his insinuation that some people will never fly Southwest again. People have demonstrated over and over their memories are very short. "I'm guessing Southwest will offer very low fares soon and many who said they'd never fly Southwest again will be right back on a Southwest flight very soon. There's nothing like a deal to make people forget." – Paid-up subscriber Jim V. "Interesting article about Southwest. As a regular customer, I can understand the frustrations. We were stuck in Tucson Friday Dec 23rd for 3 1/2 hours as our inbound flight from Denver kept on getting delayed and, per the article you mentioned, it seems that Denver was the epicenter of the problems exploding at Southwest. "We did finally arrive back in Los Angeles – late but good to get back. Did Southwest damage its reputation? Yes. But will I still fly Southwest? Yes! For the reason you suggested. Even here in Los Angeles, it's the airline that has the most options to the most airports. Plus, their two bags free policy saves us minimum $100 per round-trip for the two of us and we usually take a case of wine, so it's more like $200 per roundtrip. We use the Southwest credit card for additional mileage, nice to get a $10K 'bonus' for paying our property taxes via credit card. "Other airlines recover from other disasters, crashes included. I think the hit to Southwest may be close to the $1 billion mark by the time they pay out the miles and the additional reimbursements, but I think 90% of their customers will figure 'it can't happen again' and continue to patronize an airline that – for the most part – does seem to value its customers more than any other airline I've flown." – Paid-up subscriber George R. "Stop squawking and whining about Southwest. If consumers got screwed then they should not fly Southwest again. Punish them by withholding your money. This is still almost a capitalistic economy in America... you have choices. Use your consumer power." – Paid-up subscriber John W. "Mike, What a breath of fresh air from all the 'buy, buy, buy, the next boom is just over the horizon' crowd. Unfortunately, you will probably go down as this year's Cassandra, doomed to be not believed for telling the truth. None of that crowd ever addresses the debt bomb, when it will reach critical mass, and what will happen when it goes off." – Paid-up subscriber Robert B. "Most commentary focuses on interest rates and short term lending. IMHO, federal government overspending is the primary source of inflation. Loans require repayment while deficits apparently do not. Higher interest rates are a poor tool to fix Congress' failures." – Paid-up subscriber Jim P. All the best, Corey McLaughlin Baltimore, Maryland January 6, 2023 --------------------------------------------------------------- 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 10/09/08 830.8% Extreme Value Ferris MSFT Microsoft 11/11/10 794.5% Retirement Millionaire Doc MSFT Microsoft 02/10/12 680.5% Stansberry's Investment Advisory Porter WRB W.R. Berkley 03/16/12 633.8% Stansberry's Investment Advisory Porter HSY Hershey 12/07/07 533.5% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 461.5% Stansberry Innovations Report Wade BRK.B Berkshire Hathaway 04/01/09 454.8% Retirement Millionaire Doc AFG American Financial 10/12/12 442.3% Stansberry's Investment Advisory Porter ALS-T Altius Minerals 02/16/09 316.6% Extreme Value Ferris FSMEX Fidelity Sel Med 09/03/08 305.1% 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 4 Stansberry's Investment Advisory Porter 3 Retirement Millionaire Doc 2 Extreme Value Ferris 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 1,112.2% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,052.3% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,036.3% Crypto Capital Wade MATIC/USD Polygon 02/25/21 833.4% Crypto Capital Wade TONE/USD TE-FOOD 12/17/19 370.7% 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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