Dumb Money

A financial story so good it's now a movie... We've come a long way... Sour sentiment, yet stocks are up... A 'less bad' market... Two extremes point to big returns... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] A financial story so good it's now a movie... We've come a long way... Sour sentiment, yet stocks are up... A 'less bad' market... Two extremes point to big returns... --------------------------------------------------------------- There's already a movie... It's a tale of market insanity that folks will be recounting for generations... And when it unfolded a couple of years ago, I (Corey McLaughlin) had coverage from the get-go here in the Digest. The story had the twists of a drama and the colorful characters of a comedy film. And sure enough, Hollywood has wasted no time putting the events on the silver screen. This story comes from early 2021, the days when we were still encouraged to stay at home and got some seriously dirty looks if we weren't wearing a mask in public. It was also a time of maximum greed in the stock market... when the share prices of many popular names of the pandemic bubble peaked... (and when the Federal Reserve should have started raising interest rates to head off what became 40-year-high inflation). I remember writing at the time that the "[market was as drunk as Tom Brady]( comparing the stock market's eye-popping valuation with the Super Bowl-winning quarterback who stumbled through the Tampa Bay Buccaneers' celebratory parade. But nothing illustrated the environment back then better than the saga of GameStop (GME)... In a nutshell, enough cooped-up amateur traders high on stimulus money took aim at Wall Street hedge funds that were heavily "short" stocks of struggling businesses like video-game retailer GameStop... former digital-handheld-device giant BlackBerry... and others. They gathered like a mob online, using no-fee trading platforms, and pushed up the prices of these beaten-down companies by double digits every day until the institutions cried uncle because of massive losses... and exchanges like Robinhood halted trading of these specific shares. You could make this stuff up, but you don't need to... As we wrote in [the January 26, 2021 Digest]( the first day we mentioned GameStop... These stocks, and a handful of others, have experienced triple-digit gains in a short span for seemingly no reason. (BlackBerry even put out a statement yesterday saying as much.) No reason, that is, except for what's happening on the "WallStreetBets" section of Reddit's website... This story involves a lot of angles that speak to Wall Street and Main Street euphoria and angst – and some entertainment value, too, for the wiser among us who know not to get directly involved. But the long and short of it is this... WallStreetBets kicked off an online frenzy urging people to buy call options on certain left-for-dead stocks and "take it" to those folks on Wall Street who are short those stocks... And it caught on big time. The result has been a few crowd-driven "short squeezes" that will be talked about for a long time in investing circles... The author Ben Mezrich, who is speaking at our annual Stansberry Research Conference & Alliance Meeting in October in Las Vegas, turned the GameStop saga into a nonfiction book. That book has become a movie, which comes out nationwide tomorrow... It's called Dumb Money – raising the question of who was the dumb money and who was the smart money in the David-and-Goliath situation – and [the trailer]( looks pretty good. (Note: There's some foul language right off the bat.) You might notice recognizable actors like Seth Rogen, Pete Davidson, Nick Offerman, and America Ferrera... Ben previously wrote The Accidental Billionaires, another book that was turned into a movie... this one about Facebook and called The Social Network. From what I can tell, Dumb Money appears to be presented in a similar way... If anyone goes to see it, don't hesitate to send in a review. Note, neither Stansberry Research nor I get any royalties for mentioning the movie or linking to the trailer, and certainly not from any movie-ticket sales. (Wish I did, though!) I will, however, point you in the direction of hearing more from Ben at our conference in October. He is one of the presenters, and we look forward to hearing from him. If you can't make it in person to Las Vegas this year, you can catch Ben and all the speakers via our online livestream. You can watch the presentations from our editors, analysts, and invited guests from the comfort of your own couch or office. [Click here for more details on our lineup and livestream package](. In any case, the market has come a long way since early 2021... Many tech stocks peaked right then and there... My colleague Dan Ferris called the top of Cathie Wood's ARK funds [nearly to the day that February](... The broader market continued to move a bit higher over the year, but breadth was weakening, as [we pointed out in July 2021](. That's an important early indicator that the market was not as strong as it might have appeared. Then, more and more stocks started heading south late in the year... That trend continued into the bear market of 2022 and certainly through last October. Now, in the second half of 2023, we've got a movie about the frenzied days with big-time stars already produced. Now, GameStop didn't completely crash. Its stock is down about 75% since its insane 2021 high, but shares are still worth more than three times what they were before their abrupt moonshot, and the company has actually shown signs of a possible turnaround. (Contrast that with fellow meme stocks like retailer Bed Bath & Beyond, which went bankrupt earlier this year, and cinema chain AMC Entertainment, which keeps issuing tons of new shares while its stock price is down 98%.) In general, since early 2021, sentiment has soured about stocks (and bonds, which had their worst year in 2022 since before the Civil War). Inflation skyrocketed, interest rates followed higher, dozens of banks nearly failed in one big swoop earlier this year, and more and more folks are rightfully concerned about the consequences that may still be coming for the U.S. and global economy. I'm one of them. Maybe the stock market hysteria part of the pandemic-stimulus era is behind us, but the fallout from it all definitely isn't. The reckoning is ongoing on Main Street, where "real" incomes – accounting for inflation – haven't kept up with GDP since early 2022. But we also can't ignore the trends for stocks lately... Investing is our game here... And as we are always reminded, the stock market doesn't necessarily care what we think. That's why we decided to follow our "bottom is (probably) in" indicators instead, to take our emotions out of the equation as much as possible. And broadly speaking, over the past 11 months, prices have appeared to reflect a "less bad" environment since inflation increases showed signs of peaking last October. This is an important sentiment shift that Stansberry Research co-founder Steve Sjuggerud has for years said to watch for and keep in mind. When it seems like nothing else makes sense about the economy doing one thing and the stock market doing another, "less bad" behavior is a powerful indicator. As I wrote [in the November 2, 2022 Digest]( when it seemed everyone was still down on stocks... Headline inflation has come down a little so far, and unemployment is still near record lows. News has been getting "less bad" lately... which, as our colleague Dr. Steve Sjuggerud has long said, is what you see when forward-looking stock markets turn around. This thought has again been on our mind lately as Steve's protégé, True Wealth lead analyst Brett Eversole, has been sharing his bullish take on the markets lately. (We've talked about Brett and fellow Stansberry Research senior analyst Matt McCall's new presentation the past two days, sharing their contrarian optimistic take. [You can watch a free replay of it here if you've missed it]( As the major U.S. indexes have trended higher, on balance, for the past 11 months, the more it seems the "bad" news of the world that we all know today was reflected in the market sell-off of 2022. That's not to say more unexpected developments or new "bad news" can't send prices lower in the future. That can happen, and likely will if a recession is ahead, for example. But while I don't doubt there are more shoes to drop in the economy, the worst of relatively recent stock market sentiment appears to be in the past. In Brett's view, we're in a new bull market... that could soar much higher. He keeps seeing indicators of it... In the most recent edition of ["Review of Market Extremes" in True Wealth Systems]( Brett showed a pair of examples of why he thinks the nearly yearlong uptrend in stocks will keep going... Brett always comes to the table with great historical context. The recent sell-off in early and mid-August? That's actually a good sign for stocks, he says, based on the rare other instances (nine since 1928) where stocks rallied close to 20% from January through July... Stocks usually fell in August after that kind of rally. In fact, it happened in six of those nine instances. The Wall of Worry would tell us that this month's losses indicate more pain to come... that the good times were too much and more losses are likely. But that couldn't be further from the truth... Stocks were higher a year later 100% of the time after similar extremes. And the typical return was darn impressive. Take a look... After similar extremes to what we've just seen, stocks have gained an average of 5.2% in three months, 12% in six months, and 16.7% over the next year – again, in nine instances in almost 100 years. As Brett continued... That's nearly triple what stocks typically return in the following year. And again, this setup has a perfect track record. However, investors who are focused on problems won't want to see this. They'll view the weak month as the start of something much worse. We know better, though... Stocks might be currently climbing the Wall of Worry. But history shows that could lead to double-digit gains over the next year. And that's reason enough to stay long right now. But that's not the only reason Brett shared. The other is investor sentiment. He updated True Wealth Systems subscribers on another indicator he likes to follow – the National Association of Active Investment Managers ("NAAIM") Exposure Index – that gauges professional investment managers' sentiment. But he's not tracking this indicator as a leading piece of information to follow this so-called "smart money." As Brett explained... Like most sentiment gauges, it's a useful contrarian indicator. This indicator showed that the pros were getting darn bullish in late July. The index hit a multiyear high that month. But it has collapsed since. Take a look... What makes this decline extreme was the pace and severity of the drop. As Brett said... Specifically, this index plummeted by a massive 66% in just four weeks. That's one of the largest four-week declines we've seen over the last 15 years. Heck, we've only seen six extremes of this size or greater over that period. The good news is that this kind of rapid decline in sentiment is a great opportunity to buy... not just for a few months, but for a few years. Here's what happened after similar extremes since 2008... The last decade and a half has been great for stock investors. The S&P 500 was up 9% a year over that time. But you're in for a better treat if you buy after this kind of sentiment collapse... So, you might be able to see why Brett is not just bullish on the long term, but also right away. Contrary to what the proverbial "Wall of Worry" might look like, he says it's actually a great time to buy stocks. If you want to hear more about why, and also how to access Brett's work in True Wealth Systems, there's no better place to do it than his latest presentation with Matt. You'll hear Brett's take in his own words and more about what he's telling subscribers right now... including the specific stocks he's recommending buying to take advantage of today's setup. [Watch here for free](. And Stansberry Alliance members... as always, you can find all of Brett's work with True Wealth Systems [right here](. His research also appears in several other publications that you can access on the Stansberry Research website. --------------------------------------------------------------- Recommended Links: ['Dump Your Cash NOW']( The clock is ticking on what may be the biggest financial event in 20 years, as one of the oldest technical indicators just started flashing. It's the same signal we saw coming out of the dot-com crash of the early 2000s... the great financial crisis... and even the COVID-19 crash. But if you want to take advantage, you must position yourself immediately. [Click here to see why](. --------------------------------------------------------------- [Top Five AI Stocks to Buy in 2023]( Investors are getting very rich in AI stocks right now. And according to 50-year Wall Street veteran Marc Chaikin, there are FIVE AI companies Wall Street is buying hand over fist that need to be on your radar immediately. [Click here for the names and tickers](. --------------------------------------------------------------- New 52-week highs (as of 9/13/23): Amazon (AMZN), Berkshire Hathaway (BRK-B), Cameco (CCJ), Vita Coco (COCO), Denison Mines (DNN), Comfort Systems USA (FIX), Sprott Physical Uranium Trust (U-U.TO), Global X Uranium Fund (URA), Sprott Uranium Miners Fund (URNM), United States Commodity Index Fund (USCI), Energy Fuels (UUUU), Verisk Analytics (VRSK), and Walmart (WMT). In today's mailbag, feedback on [yesterday's Digest]( which included highlights of Brett Eversole and Matt McCall's latest bullish message and a subscriber's thoughts about labor unions... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com and tell us what's on your mind. Hi, I can't imagine being overly bullish at this time and I think you should be more cautious. Could the sycophants drive things up to an insane level again, more insane than now? Sure. But higher interest rates along with the average American's poor understanding of money and economics, I would not bet it will last long. Sooner or later the pied piper needs to be paid. "How much longer before the feds have to raise taxes significantly? How much more can the average American run up their credit cards at current rates? How long can people run up home prices into the stratosphere before FOMO finally fades. It's truly a crazy time. I think we are closer to the end of the bull market than people realize. Anyway, my two cents." – Subscriber Greg T. "I'm beginning to wonder if the stock market will ever again reflect the true state of our economy. For the market to go up, we simply need people willing to buy shares. I think there are enough institutional buyers and wealthy retail buyers that could continue to push the market higher regardless of what the economy does." – Subscriber Greg G. "Why shouldn't workers share in the wealth they create? The wage rises they obtain are but a fraction of executive pay awards, with the bonuses and massive increases in remuneration that managers award themselves, at several multipliers way above workers' compensation. "Workers did not create the inflation, the banks did that, and so workers require compensation. Times of inflation are usually the only periods that incomes rise to any degree – along with the prices that companies take advantage of too." – Subscriber D.P. All the best, Corey McLaughlin Baltimore, Maryland September 14, 2023 --------------------------------------------------------------- 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 1,211.4% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,056.8% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 889.5% Extreme Value Ferris wstETH Wrapped Staked Ethereum 02/21/20 683.4% Stansberry Innovations Report Wade WRB W.R. Berkley 03/16/12 558.4% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 552.2% Retirement Millionaire Doc HSY Hershey 12/07/07 508.6% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 387.3% Stansberry's Investment Advisory Porter TTD The Trade Desk 10/17/19 343.9% Stansberry Innovations Report Engel ALS-T Altius Minerals 02/16/09 302.7% 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 4 Stansberry's Investment Advisory Porter 2 Extreme Value Ferris 2 Retirement Millionaire Doc 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 wstETH Wrapped Staked Ethereum 12/07/18 1,572.4% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,040.6% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,024.4% Crypto Capital Wade MATIC/USD Polygon 02/25/21 757.5% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 598.1% 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 Microsoft^ MSFT 12.74 years 1,185% Retirement Millionaire Doc 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 ^ 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}. 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