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Weekend Edition

An outlandish guarantee from S&A
Saturday, April 21, 2012

 So far, the "Bernanke Asset Bubble" is proving stronger than the stock market bears.
 
In Monday's edition of DailyWealth, our colleague Steve Sjuggerud updated readers on the Bernanke Asset Bubble. Put simply, the Bernanke Asset Bubble is what Steve expects will be the result of the Federal Reserve's ultra-stimulative monetary policy. Here's how Steve describes the situation...  
 
Ben Bernanke is the chairman of the Federal Reserve. He has a dual mandate... His goals are to deliver 1) price stability (no inflation) and 2) full employment.  
 
In addition to these two goals, Ben Bernanke is known as a "student" of the Great Depression. The main lesson he learned from the Depression is that you shouldn't raise interest rates too quickly, because you might not be out of the woods yet.
 
Given his mandate and his study of the Great Depression, Ben Bernanke will keep interest rates artificially low for longer than anyone can imagine. And that, in turn, will create an asset bubble... in just about everything.
 
As long as unemployment remains high... and as long as inflation is subdued... the Fed will continue to "juice" the economy. The "juicing" won't stop once the economy appears to be back on its feet, either... Bernanke's worries about the Great Depression will keep him from raising interest rates until it's too late... which will inflate the Bernanke Asset Bubble to its greatest heights.
 
 Bernanke's monetary stimulation is helping stock market bulls resist the correction that began on April 3. After hitting a high of 1,419 on April 2, the benchmark S&P 500 stock index fell to a closing low of 1,358 on April 10.
 
Since then, the market has rallied higher... and confounded the skeptics. Economically sensitive stocks like Home Depot (home spending), Wyndham Worldwide (hotel spending), Dick's Sporting Goods (recreational spending), Gap (clothing spending), and Taubman Centers (shopping mall spending) have helped lead the rally.
 
As we noted in this week's Growth Stock Wire, Dan Ferris' relentless dividend-paying "World Dominating Dividend Growers" are also pushing to new 52-week highs. As we often say... owning these Dominators isn't sexy. Most of them are in "boring" businesses, like soda, beer, cigarettes, and basic retail. But investing in them works and works and works. Buy a World Dominating Dividend Grower at the right price, and you set yourself up for a lifetime of safe compounding with the world's best businesses.
 
 "Build your wealth – that is key. Most investment newsletter publishers think their job is to pick stocks. I know from being in this business for thirty-five years that stock selection cannot make you rich." 
 
The quote above is from our friend and colleague Mark Ford. It's from a letter he sent to every reader of his newsletter, The Palm Beach Letter. While it may sound like common sense, readers should realize this is a controversial thing to say in the investment newsletter business...  
 
As many readers know, Mark is one of Porter Stansberry's mentors. Over the last 35 years, he has built a reputation as one of the country's foremost experts on wealth-building. But unlike most "experts" in this field, Mark actually walks the walk. He's a serial entrepreneur and New York Times best-selling author who has built dozens of businesses... and a huge personal fortune.
 
Mark now spends his time with family, mentoring entrepreneurs, and managing his investments. He also shares his unconventional wealth ideas with people in books and financial newsletters. One of his newest projects is The Palm Beach Letter... which he started with longtime Stansberry & Associates analyst Tom Dyson.
 
 For our money, nobody in America delivers no-B.S. financial advice as well as Mark Ford. When Stansberry & Associates looks into starting new projects or side businesses, we go straight to Mark for advice. So we were happy to take a stake in his latest endeavor. And that's why we're not surprised by his controversial statement... that "stock selection cannot make you rich." 
 
As we've detailed many times, building a solid foundation of basic financial knowledge is the ultimate way readers become rich... not scoring on a "hot tip" or a big options trade.
 
That's why at Stansberry & Associates we've gone to great lengths to share our best "timeless" ideas... like proper asset allocation... how to identify a great business... intelligent position sizing... how to buy discounted corporate bonds... and how to sell put options.
 
Ideas like proper asset allocation are FAR more important to your long-term success than trying to find the next "hot" gold stock... the "next Apple"... or the next miracle-cure drug stock. But here's the thing: The majority of investors have no idea that this is the case.
 
Also keep in mind that most people have no desire to learn. It's too much work. This is why most newsletter publishers only write about stock selection. That's what the typical customer wants to read about. That's what the typical customer "believes" will make him rich... so that's what he gets. He never gets what he really needs... which is a solid education on timeless wealth principles and tools.
 
 I know what you're thinking... that this all sounds like basic common sense. Many readers know stock selection is simply one part of a bigger picture. Many readers know they can make a fortune outside of regular stocks (with ideas like buying discounted corporate bonds and selling put options).
 
But trust me... most investors do not know any of this.
 
That's why it's much more popular (and thus, more profitable) for publishers to constantly write about ideas like "the next Apple"... or "the next Berkshire Hathaway." 
 
 Mark and his colleagues at The Palm Beach Letter agree with our take... that while great stock selection is important, it's far more important to know how to save... how to spend... how to compound your wealth over decades... and how to intelligently spread your assets to ensure a safe, rich retirement. These aren't the most popular ideas to broadcast to the world, but they are the most useful.
 
I've spent the last 15 years of my life reading about the best ideas on how to live a wealthy (and healthy) life. I've read hundreds of books and newsletters on wealth-building. I've got classics like The Richest Man in Babylon, Think and Grow Rich, How to Win Friends and Influence People, One Up on Wall Street, Investment Biker, and Market Wizards in my brain and on my bookshelf. I've read, met, and/or worked with just about every investment guru in the world... So I feel qualified to judge the ideas Mark and his team are sharing with subscribers of The Palm Beach Letter. And I can say they are of the highest quality in the world.
 
Most people who know Mark think of him as a multimillionaire business guru... But he's actually a born teacher. And his ideas... like those in his "Secret of The Golden Buckets" piece... his classic "Letter to a 47-Year Old"... and his unusual take on retirement are a revelation to most people. These ideas have helped thousands of people achieve financial freedom. I'm glad someone is out there doing it.
 
They don't teach common sense wealth-building concepts in school. Most people go their whole lives not knowing basic concepts like compounding and intelligent portfolio diversification. Thus, they always struggle with money... and complain about rich people.
 
It's only after someone understands Mark's concepts – and ones we share – that a stock selection newsletter can be truly useful. It's only after you know about things like how to identify a great business (knowing about capital efficiency is a big help here)... and intelligent position sizing (read my interview on this subject here)... that you can safely take advantage of ideas from analysts like Dan Ferris and Steve Sjuggerud.
 
 That's the reason The Palm Beach Letter has quickly become one of the most useful investment research advisories in the world. Yes... Tom and his colleague Paul Mampilly, former manager of a $5 billion hedge fund and 22-year Wall Street veteran, are world-class in finding safe, dividend-paying stocks that should form the foundation of any retirement portfolio. And yes, from time to time, they recommend stocks that could potentially double an investment position with little risk. But readers also receive a huge amount of classic educational material from Mark... material that can transform a person's financial situation in a short time.
 
To make sure you take full advantage of this opportunity, we're willing to make an outlandish guarantee to readers. It's one that will strike many of our fellow publishers as crazy. Right now, you can try out The Palm Beach Letter, risk-free, for three years. If you decide it's not for you, The Palm Beach Letter will refund your purchase price... and Stansberry & Associates will send you an additional $50 check. You can ask for this check three months after your purchase.
 
Again... If you decide The Palm Beach Letter is not for you, you can get 100% of your money back... and Stansberry & Associates will send you an additional $50 check. You'll simply have to call our customer service team... And after we've verified that you've canceled with The Palm Beach Letter, we'll send you your money. (This additional-$50 offer only applies to one subscription per household. If we detect any sign of foul play, we reserve the right to void our $50 additional check offer.) We're that confident that you'll benefit from Mark and Tom's work. You have nothing to lose by reading through Mark's educational materials... and a lifetime of knowledge to gain.
 
If you decide to start a three-year, risk-free trial, make sure to read the February issue. It's one of the best newsletter issues I've read in the past few years. It contains an interesting investment idea... one with extremely low downside (almost zero, in Tom and Paul's estimation)... and 50% upside. In the issue, you'll see how Apple could create one of the biggest trades of 2012. It's exactly the kind of position an educated, risk-averse trader is drawn to. You can sign up for a three-year trial subscription here. (Note: This link does not go to a long video.) 
 
Regards, 
 
Brian Hunt




This Week's Winners
S&P 500 Symbol Change
Gilead Sciences GILD +14.3%
EBay EBAY +11.4%
F5 Networks FFIV +7.9%

Countries Symbol Change
Israel ISL +1.8%
United Kingdom EWU +1.1%
China FXI +0.9%

Sectors Symbol Change
Airlines FAA +2.6%
Real Estate IYR +0.9%
Utilities XLU +0.7%

S&P 500 Symbol Change
Gilead Sciences GILD +14.3%
Ebay EBAY +11.4%
F5 Networks FFIV +7.9%
Countries Symbol Change
Israel ISL +1.8%
United Kingdom EWU +1.1%
China FXI +0.9%

Sectors Symbol Change
Airlines FAA +2.6%
Real Estate IYR +0.9%
Utilities XLU +0.7%

Commodities Change
Cocoa +6.9%
Palladium +2.5%
Lean Hogs +1.9%

Date Range:4/12/2012 to 4/19/2012
This Week's Losers
S&P 500 Symbol Change
Genworth Financial GNW -23.1%
Chesapeake Energy CHK -12.9%
Sprint Nextel S -12.7%

Countries Symbol Change
Spain EWP -7.2%
Italy EWI -4.6%
Chile CH -4.0%

Sectors Symbol Change
Gold Mining GDX -3.2%
Clean Energy PBW -2.9%
Oil Services PXJ -2.8%

S&P 500 Symbol Change
Genworth Financial GNW -23.1%
Chesapeake Energy CHK -12.9%
Sprint Nextel S -12.7%
Countries Symbol Change
Spain EWP -7.2%
Italy EWI -4.6%
Chile CH -4.0%

Sectors Symbol Change
Gold Mining GDX -3.2%
Clean Energy PBW -2.9%
Oil Services PXJ -2.8%

Commodities Change
Sugar -7.7%
RBOB Gas -6.7%
Coffee -3.9%

Date Range:4/12/2012 to 4/19/2012
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