A Three-Decade First

A little more on Nvidia... An 'AI factories' love story... The Japanese stock market hits a new all-time high after 34 years... AI has something to do with it... Favorable conditions and cultural differences... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] A little more on Nvidia... An 'AI factories' love story... The Japanese stock market hits a new all-time high after 34 years... AI has something to do with it... Favorable conditions and cultural differences... --------------------------------------------------------------- The story of the day... Yesterday, I (Corey McLaughlin) [wrote]( about chipmaker and AI darling Nvidia's (NVDA) quarterly earnings report. Nvidia projected $24 billion in revenue for the current quarter, about $2 billion above consensus Wall Street expectations. The company also beat revenue for the fourth quarter by about $2 billion. Wall Street and the financial media immediately labeled the results as "remarkable" and "a blowout." You'll hear more about Nvidia from my colleague Dan Ferris tomorrow. I'm sure it'll be an informative and entertaining read, as usual. But I do want to follow up on Nvidia briefly today... As we said yesterday, the market's reaction to the numbers could serve as a referendum on the buzz around artificial-intelligence ("AI") technology, which has been a catalyst for the broad market's move higher. Using Nvidia's 16% jump today as evidence, it seems investors and traders continue to be jazzed about AI. And it's not just investors in love with AI... When I listened to Nvidia's CEO Jensen Huang speak on a conference call with Wall Street analysts last night, several analysts offered hearty congrats on what they felt was a "stunning" performance and "really strong results." Huang took advantage of the moment, saying Nvidia is creating a "whole new industry"... and he spoke glowingly about its "AI factories" (data centers). Nvidia's chief financial officer, Colette Kress, purposely name-dropped Meta Platforms (META) as a happy client of Nvidia's chips and AI technology that "improved advertiser performance" and helped a "significant acceleration in its revenue." Many chip- and AI-related stocks caught a tailwind today... Chipmakers Advanced Micro Devices (AMD), Broadcom (AVGO), and Micron Technology (MU) were up 11%, 6%, and 5%, respectively... Computer networking company Arista (ANET) was up 6%... and the tech sector of the S&P 500 finished more than 3% higher. The positive sentiment and movement in heavily weighted NVDA shares helped push the benchmark S&P 500 Index more than 2% higher today and the tech-heavy Nasdaq Composite Index up nearly 3%. Yesterday, we said we'd be watching the market over the next few days to gauge where it might head next, and that remains true. Among other things, the age-old signal of bond prices falling while stock prices are rising, which [we wrote about last week]( is too big to ignore. So while it's all love for Nvidia right now, I'd caution against chasing it and other popular tech stocks higher. As Ten Stock Trader editor Greg Diamond [wrote to subscribers today]( technical indicators suggest a pullback could be ahead in the sector... The strength in chipmaker Nvidia (NVDA) is there, but we're not seeing it in other major technology stocks... Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), and Amazon (AMZN) are not making new highs with the indexes. There's simply too much price divergence and technical divergence (not to mention the time factors) to chase this strength. Greg actually recommended a bearish trade on Nvidia's strength today, and he told subscribers he's eyeing more of these types of trades if the indexes keep rallying. Ten Stock Trader readers and Alliance members can find Greg's latest updates [here](. A three-decade first... Nvidia's earnings results also helped push up Japanese semiconductor stocks and the Nikkei 225 Index – which is essentially Japan's S&P 500 Index. So now, we can write something that no one has been able to in three decades... The Nikkei 225 Index hit a new all-time high today above 39,000, 34 years after its previous "bubble" peak on December 29, 1989. As global news service Reuters reported... The 34 years it has taken to regain its footing is a record, too, for a major market and is a decade longer than Wall Street took to recoup losses from the 1929 crash and Great Depression. "For us traders, this marks the arrival of a new era," said Tsutomu Yamada, senior market analyst at Au Kabucom Securities in Tokyo. "It feels like the stock market is telling us that we've finally escaped from deflation and a new world has opened up." There's a lesson here... Historic boom and speculative-bubble years in the late 1980s, when real estate prices and everything else soared, gave way to a market collapse when the Bank of Japan raised interest rates to fight inflation. A mountain of property loans went bad... there was deflation... and a "lost decade" followed. So why new highs now? This isn't an overnight development... The Nikkei is up 17% this year after rising 28% in 2023. And remember, this move has been 34 years in the making. Dan explained a positive shift in the Japanese stock market in an issue of The Ferris Report last year when he recommended a basket of Japanese stocks, which are up about 12% since. Stansberry Alliance members and existing Ferris Report subscribers can read that issue [here](. But in short, in 2014, then-Prime Minister Shinzo Abe proposed shareholder-friendly policies that went into effect a year later. As Dan wrote, it looked like the Japanese stock market may have "finally entered an important new bull market phase," in part because... A new focus on shareholder friendliness, a manufacturing renaissance, and a slew of cash dividends and buybacks indicate that the era of stagnant prices we've seen since the country's mega-bubble peak in December 1989 is almost over. For decades, "outsider" shareholders – meaning foreign, institutional, and individual investors who are not insiders or... "cross shareholders" – had no power in Japan. "Cross shareholders" was a term given to alliances of Japanese companies who owned each other's shares, which limited capital efficiency. Dan explained that in general, since the post-World War II era... Though some U.S. investors had modest success in Japan, it was well known that Japanese companies were notoriously shareholder unfriendly. In fact, individual and foreign shareholders were considered such a nuisance that management teams came up with clever ways of avoiding responsibility to them entirely... Now, this anti-outsider mentality is shifting. This has pushed a rising number of foreign investors, most notably Warren Buffett, to put money to work in the country, which has the world's fourth-largest economy. As [we wrote last May]( Buffett's Berkshire Hathaway (BRK-B) sold its entire multibillion-dollar stake in Taiwan Semiconductor Manufacturing (TSM) last year. Buffett said it was a great business but, squarely in the crosshairs of U.S. tensions with China, a risk he didn't like. At the same time, Buffett was buying Japanese financial stocks. Favorable conditions... Investors have liked the conditions of the Japanese economy and stock market, despite Japan recently reporting a second straight quarter of negative GDP (a recession). Japan has also seen notable inflation just above 2% (welcome news for Japan). And, [as we wrote earlier this week]( the Bank of Japan – Japan's equivalent of the Federal Reserve – is weighing continued easy monetary policy in 2024 (i.e., negative interest rates and encouraging banks to lend). That's despite a weakening yen compared with the dollar over the past two years. Many analysts are expecting the Bank of Japan to raise lending rates as soon as April, but the central bank hasn't done it yet – and might not. As Dan explained last year, when Japanese "core" CPI was above 3% (it was 2.3% in December and 1.6% in January)... Still, it's unlikely that the Japanese central bank will significantly tighten monetary policy soon. Its economy has been too depressed for too long... Japan's culture is different from that of Western countries. Change tends to happen more slowly. As long as the [Bank of Japan] continues to expect lower inflation rates going forward, it will not tighten its monetary policy. That's good news for us because it means Japanese stocks should keep rising. We see especially lucrative times ahead in Japan's manufacturing sector... In the meantime, Japanese companies are making more profits than they have in a long time... Goldman Sachs recently reported that Japanese companies posted fourth-quarter earnings 45% higher than the same period a year earlier. The Japanese economy is also benefiting from Western tensions with China, diverting business from a Chinese economy that, [as we said earlier this week]( has been experiencing nearly two years of producer price deflation. So kudos to Dan on his Japanese recommendation, which is still a buy in the Ferris Report portfolio. (If you don't have access already, you can hear more directly from Dan [in this new presentation]( and get details about how to get started with a subscription.) --------------------------------------------------------------- Recommended Links: [Critical Election-Year Event Is Headed for U.S. Stocks]( Fifty-year Wall Street veteran Marc Chaikin has used his award-winning Power Gauge system to track every twist and turn of the market since the 2016 election year. Right now, he's warning that a dramatic market event has a shocking 90% chance of hitting U.S. stocks as soon as Super Tuesday. [Here's how you can prepare](. --------------------------------------------------------------- ['This Is How I'd Invest $1 Million Today']( Legendary investor Whitney Tilson just posted a new portfolio of stock picks. He isn't buying the Magnificent Seven... or putting an equal amount of cash into each. Instead, he's using the Monte Carlo method to see which of 4,817 stocks could double your money. [Click here for the full details](. --------------------------------------------------------------- New 52-week highs (as of 2/21/24): ABB (ABBNY), Abbott Laboratories (ABT), Berkshire Hathaway (BRK-B), Brown & Brown (BRO), Diamondback Energy (FANG), Fidelity National Financial (FNF), JPMorgan Chase (JPM), Linde (LIN), Procter & Gamble (PG), Parker-Hannifin (PH), Ferrari (RACE), Sherwin-Williams (SHW), SPDR Portfolio S&P 500 Value Fund (SPYV), Viper Energy (VNOM), Waste Management (WM), and W.R. Berkley (WRB). In today's mailbag, thoughts on valuations in the market today, stemming from [Dan's latest Friday essay]( but also connected to [yesterday's edition about chipmaker Nvidia](... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "My creds are [in] geology and economics... and mineral economics from the Colorado School of Mines. I drilled for oil and gas for Pennzoil and then [went] to Wall Street as a metals and mining and energy analyst and portfolio manager. I was struggling with my stocks in 2000, when internet stocks soared and resource stocks continued to get crushed. Two things in 2000 caused me to recommend resource stocks. 1) In January, Mary Meaker (internet queen) of Morgan Stanley recommended buying a stock based on eyeball views. I could hear Graham and Dodd scream. 2) Julian Robertson (resource king) announced closing Tiger Asset Management due to poor performance. "In the spring of 2000, I ran a market capitalization analysis of all globally, publicly traded companies in the resource space excluding oil and gas stocks. The sum of the market capitalization of that group of stocks was, wait for it, less than that of Microsoft. I presented this information in the daily morning analyst meeting, after which you could hear a pin drop. Within weeks we began to buy resource stocks and energy stocks – overweighting most of the funds. "We are at the same place now. AI = Internet (2000) and resources (and energy) = resources (2000 – metals and mining ex. oil and gas). All of the resource and energy market capitalization is less than the Magnificent Seven. We lived without [those stocks] 35 years ago (at Colorado School of Mines, I took Fortran and Basic programming, both in their infancy), but we could not live without the 'the Old Economy stocks' 35 years ago, [and we can't] today, or 35 years from now. It's time for a massive mean reversion." – Subscriber Clay H. All the best, Corey McLaughlin Baltimore, Maryland February 22, 2024 --------------------------------------------------------------- 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 1,338.1% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,276.5% Stansberry's Investment Advisory Porter wstETH Wrapped Staked Ethereum 02/21/20 1,173.5% Stansberry Innovations Report Wade ADP Automatic Data Processing 10/09/08 914.1% Extreme Value Ferris WRB W.R. Berkley 03/16/12 761.2% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 625.6% Retirement Millionaire Doc HSY Hershey 12/07/07 472.5% Stansberry's Investment Advisory Porter BTC/USD Bitcoin 01/16/20 456.4% Stansberry Innovations Report Wade AFG American Financial 10/12/12 436.7% Stansberry's Investment Advisory Porter TT Trane Technologies 04/12/18 344.0% 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 Stansberry Innovations Report Wade 1 Extreme Value Ferris --------------------------------------------------------------- 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 2,291.8% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 1,270.7% Crypto Capital Wade ONE/USD Harmony 12/16/19 1,142.8% Crypto Capital Wade POLYX/USD Polymesh 05/19/20 1,051.9% Crypto Capital Wade MATIC/USD Polygon 02/25/21 875.4% 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}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. Or e-mail info@stansberryresearch.com. Please note: The law prohibits us from giving personalized financial advice. © 2024 Stansberry Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Stansberry Research, 1125 N Charles St, Baltimore, MD 21201 or [stansberryresearch.com](. Any brokers mentioned constitute a partial list of available brokers and is for your information only. Stansberry Research does not recommend or endorse any brokers, dealers, or investment advisors. Stansberry Research forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Stansberry Research (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.