Why I'm Giving Away My Latest Recommendation for Free

Some things are too important not to share... Why I'm giving away my latest recommendation for free... It all begins in a familiar spot... The truth about the relationship between stocks and bonds... One of the worst market crashes in history... An established hurdle for your portfolio... The return of real investing... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] Some things are too important not to share... Why I'm giving away my latest recommendation for free... It all begins in a familiar spot... The truth about the relationship between stocks and bonds... One of the worst market crashes in history... An established hurdle for your portfolio... The return of real investing... --------------------------------------------------------------- If you're old enough, I bet you remember [an old Mercedes-Benz commercial from 1991](... An actor playing an executive with a mild German accent is answering a reporter's questions. He tells the reporter that the company crash tests about 100 cars per year. The mock interview is interspersed with crash-test scenes. At one point, the executive says, "You can never learn enough." He discusses how Mercedes-Benz patented the "energy-absorbing car body" and continues to develop it. The reporter replies that Mercedes-Benz never enforced the patent. And he notes that other car companies started using it. Then, he asks, "So Mercedes gave away a basic safety advance for free?" That's when the fake executive delivers the most important line of the commercial... "There are some things in life that are too important not to share." You don't often hear of a big business ignoring its own valuable patent when it could make millions of dollars enforcing it. And I suppose you could dismiss it as a mere marketing ploy. But you can't deny the obvious benefit to the world... Mercedes-Benz didn't charge others a fee to license the potentially life-saving technology. The technology became more widely used. And that made everyone safer behind the wheel. In today's Digest, I (Dan Ferris) would like to do the same thing... Well, sort of. I can't do anything to make us all safer drivers. But I will try to make us all safer investors. I'm giving away the current issue of The Ferris Report for free. I think it's too important not to share with everyone reading today's Digest. I'll reveal the one investment you all should buy right now. And I'll include a link to the full report. The short version is simple... The stock market is becoming a more dangerous place right now. And to protect your wealth, I believe you should own U.S. Treasury bills – or "T-bills," as they're often called. T-bills will pay you a 5% annualized yield. They'll keep your money safe as the markets (potentially) melt down. And they'll give you an objective benchmark against which to measure other opportunities. In addition to those points, I spent a fair amount of ink in the current issue of The Ferris Report detailing why you should invest in T-bills today. It worries me that the bond market is currently in a steep decline. And yet, the stock market doesn't seem to care much. I'm worried enough about everything and believe the potential for a market crash is high enough that it just didn't feel right to confine my work only to paying subscribers. Like Mercedes-Benz, I want everyone to get my warning and what I believe you should do today. Again, I'll share a link to the full report. But if just keep reading this Digest, you'll get some of the most important details. The fact that you'll reread some of those points in the report is exactly what I want. Then, you can carefully consider why it's all so crucial to know. I'll start my argument in a familiar spot... Simply put, the stock market is too expensive... Regular Digest readers probably get tired of me making this point so much. But it's true... The ratio of stock prices in the S&P 500 Index to their cyclically adjusted earnings (the "CAPE" ratio) is still in mega-bubble territory. In fact, at 28.9, it's near where it stood at the peak of the 1929 mega-bubble. The price-to-sales ratio of the S&P 500 has fallen from its late 2021 all-time high of 3.2. But it's still at around 2.4 today. That's just above where it was at the peak of the dot-com boom in early 2000 – again, mega-bubble territory. And it's not just me... Forensic accounting expert Joel Litman is the founder of our corporate affiliate Altimetry. In [a recent Stansberry Investor Hour interview]( Joel told Digest editor Corey McLaughlin and me that he's more worried about the stock market today than any other time since 2008. Based on his research and estimates of corporate earnings after considering accounting irregularities, Joel also concluded that the stock market is extremely overvalued. (If you want to learn more about Joel's findings, I encourage you to [watch his FREE presentation]( I get it, though... 'The market is too expensive' might not sound like a compelling reason to sound the alarm... After all, the market can always get more expensive. And when it comes down to it, valuation is a lousy timing mechanism. But there's more to it. The problem isn't merely that stocks are overvalued... The problem is that stocks are extremely expensive compared with bond yields today. In The Ferris Report, I talked about investor Bob Elliott of Unlimited Funds ([a Stansberry Investor Hour guest in May](. He implied in a recent post on X (formerly known as Twitter) that earnings need to grow by double digits to justify the market's current valuation... And bond yields continue to rise... The 10-year U.S. Treasury yield is widely regarded as the global benchmark. On September 20, the 10-year Treasury yield was 4.3%. That day is significant. It's when the Federal Reserve made its most recent decision on interest rates... The central bank announced it would keep rates unchanged at that meeting. And it said it would likely raise them one more time in the final three months of 2023. In his post-meeting press conference that day, Fed Chair Jerome Powell said that rates would likely remain higher for longer. That sent bond yields on another climb... The 10-year Treasury yield rose to as high as 4.8% earlier this week. That's a 16-year high. Higher interest rates mean lower bond prices. And they also mean lower prices for assets that are valued based on the global benchmark rate of interest – which includes stocks, bonds, real estate, and anything with a value based on the cash flows it's expected to generate during the life of the investment. If you want to quickly understand why higher rates put pressure on high asset valuations, just invert the price-to-earnings ratio of stocks to get an earnings yield. A CAPE ratio of 29 inverts to an earnings yield of 3.45% (1/29 = 0.0345). It would take a few years of double-digit earnings growth for stocks' earnings yield to match the yield on T-bills today. That's a big ask in any multiyear period – let alone our current mega-bubble. And it would take even more to get to the stock market's long-term average earnings yield of 6.25%. Remember, though, that yields and prices are inverses... So of course, the other way that stocks' earnings yield could go up is if stocks' prices fall. That's exactly what has happened since late July. Maybe the stock market got wind of what the Fed would do and what Powell would say nearly two months before it all went down... Maybe it just knew how these things typically go... Or maybe the market is less like a sentient being and more like an inanimate object that's simply responding to the force of gravity. You also need to know something else about stocks and bonds... Over the past few decades, investors grew accustomed to their bond holdings behaving well when their stock holdings weren't. In technical terms, stocks and bonds correlated negatively enough that you could effectively hedge your stock portfolio by buying bonds. This behavior probably seems normal to a lot of people. It has been going on for decades. And everyone has heard of the "60/40" portfolio strategy – which is based entirely on the tendency of stocks and bonds to do well at different times and not decline at the same time. Not so fast... Chris Cole of asset manager Artemis Capital Management published a report in October 2015 that included a section on the correlation between stocks and bonds from 1883 through that year. As he concluded... The truth about the historical relationship between stocks and bonds is scary. Between 1883 and 2015 stocks and bonds spent more time moving in tandem (30% of the time) than they spent moving opposite one another (11% of the time). It is only during the last two decades of falling rates, accommodative monetary policy, and globalization that we have seen an extraordinary period of anti-correlation emerge between stocks and bonds unmatched by any other regime in history. Not only are stocks and bonds positively correlated most of the time but also there is a precedent for multiyear periods whereby both have declined. After expounding on that idea, Cole then pondered what might spur stocks and bonds to decline together. Whether you realize it or not, you already know his answer. That's because you've lived with it for the past two years... Inflation. As Cole wrote... When inflation, as gauged by the consumer price index, is more volatile we tend to experience higher levels of stock and bond correlation as evidenced by data from 1883 to 2015. The early part of the 20th century, which experienced the most debilitating periods of stock and bond underperformance, was a period of wild fluctuations between inflation and deflation. The global bond market peaked in 2020. And now, bond prices have fallen for three straight years. Of course, as we all know, that's just another way of saying interest rates have been rising around the world for three years. That's unusual. But as Cole showed in his report, over the long term, it's not nearly as unusual as most folks who've only lived and invested for the past few decades believe it is. Today, I want to touch on one more point that I made in The Ferris Report (where I spelled it out in more detail)... The basic relationship between equity and debt is simple. Whether it's your house, your business, or the balance sheet of a public company, the formula is the same... Assets minus debt equals equity. In other words, equity is what you own after you meet all your obligations to creditors, tax authorities, and anybody else who has a claim on your assets. If it's your house, the bank has a claim in the amount of the mortgage. If it's your business, you need to pay your expenses, taxes, employees, and you need to reinvest in the business to maintain and grow it before you can pay yourself. If it's a big public company like Microsoft (MSFT), the same thing is true. The company needs to account for all the claims that are senior to the stockholders' claims – which is everybody. In other words, those other claims are always more secure than the stockholders' claims. Everybody else gets paid first. Stockholders get paid last. And if nothing is left over (which is what usually happens in bankruptcy), then the stockholders get nothing. I tend to think of the overall stock and bond markets the same way... Bonds are the safe part that gets paid before stocks. And stocks are the risky part that becomes a lot less valuable when the bond market falters. That's not good when you consider this Business Insider headline from yesterday... Here's the bottom line... The bond market is in a historically steep decline right now. Because of that, it doesn't make a lot of sense for a stock market already trading at mega-bubble valuations to rise. And yet... The Nasdaq Composite Index is up about 28% this year and the S&P 500 is up around 12%. You might expect me to urge you to sell everything and head for the hills with all the guns, gold, and groceries you can carry... Not even close. My core advice hasn't changed... Hold plenty of cash. Add some gold and silver into the mix. And buy great businesses trading at reasonable valuations, planning to hang on to them for the long term. But today, I believe you should do something else. With some of the cash – or perhaps with the proceeds of stocks you stop out of during the current downturn – I also think you should do what I recommended in The Ferris Report... Buy T-bills. Treasurys are the world's safest bonds. They're backed by the U.S. government. And T-bills are the shortest-term obligations. They're payable in a year or less. And the thing is, you don't need to do a lot of work to capitalize on my recommendation. You can take advantage of it with just a few clicks in your regular brokerage account... You see, in The Ferris Report, I recommended buying the SPDR Bloomberg 1-3 Month T-Bill Fund (BIL). As its name implies, this exchange-traded fund ("ETF") only holds T-bills that mature in three months or less. So the risk is even lower. BIL's current yield is around 5.1%. And the ETF has been very stable, with very low volatility. As I told The Ferris Report subscribers last week... Since the fund's inception on May 25, 2007, the closing share price has been as high as $92.48 and as low as $91.34 – a total fluctuation of about 1.2% over a 16-year period. That's despite a huge fluctuation in yields. During that period, three-month T-bill yields have been as low as 0.05% and as high as 5.35%. I'm excited about this recommendation for two reasons... First, it's a safe place to get a return during a time that's about to become rocky for reasons I've outlined today. And again, I discuss everything in greater detail in The Ferris Report issue that I'm giving away for free today. The other reason is more subtle. But it's the best news about investing I've been able to deliver since my colleague Mike Barrett and I turned bullish on stocks in April 2020. In short, T-bills yielding 5% or more can do wonders for your investing skills... It's an objective benchmark against which you can weigh all your potential investment alternatives. Holding a portfolio of T-bills yielding 5% establishes a basic hurdle that all future investments must exceed to justify putting your capital at greater risk. Maybe you already had that type of hurdle in mind when T-bills yielded less than 1%. If so, that's laudable. But with rates where they are today, there's no substitute for having a substantial allocation of your capital staring you in the face every day and daring you to make a riskier bet. I'll go even further... Having T-bills with a yield of 5% or more again – after not having them for almost two decades – is a seminal moment in our history. It marks the return of real investing. When the Fed kept short-term rates at or near zero for most of the period from 2008 to 2022, it distorted many investors' thinking. They got used to earning nothing on their savings. And earning zero on their savings was tiresome. So these investors ramped up their risk tolerance, leading many of them to dive into the riskier end of the stock market. It's no coincidence that the lowest interest rates in recorded history culminated in the biggest financial mega-bubble in history. Most people forgot what real investing is. Almost everybody turned into mere speculators. It happened because nobody had an objective benchmark that yielded 5% or more in their accounts. No established hurdle stared anyone straight in the face, reminding them that it wasn't necessary to take big risks to earn a decent return on their savings. When rates are at or near zero, anything goes. And as I've documented on many occasions in the Digest, that's why all kinds of crazy, speculative nonsense occurred in recent years. But that type of craziness always ends in tears. This time is no different... When there's no objective benchmark, we're all speculating – whether we realize and admit it or not. But now that interest rates are getting real again, we can be real investors again. That's a very, very good thing. Now, I've promised to give you the latest issue of The Ferris Report for free... [You can access the issue right here](. Please note that I can't give away my full model portfolio. Nor can I tell you how my other 20 active recommendations fit into our current macro environment in one way or another. I need to save something for my paying subscribers. But if you like what you see in this month's issue, I can offer you a remarkable 30-day, 100% risk-free trial to join us. Find this special invitation – along with a more extensive look at what I see coming for the markets (and other ways to protect yourself) – [right here](. The worst mega-bubble in all recorded history is still upon us. So it's more important than ever for you to know exactly what you need to do to protect your wealth from danger. In the end, I hope you'll heed my warning today and capitalize on this incredible opportunity in T-bills. I couldn't think of anything better to share with you in today's Digest. After all, there are some things in life that are too important not to share. --------------------------------------------------------------- Recommended Links: [This Strategy Has an 87% Win Rate – Here's How to Use It]( The same ironclad "law" of finance that predicted 2008 says the next three years could be dangerous and painful for stockholders. But there's a "backdoor" strategy that could show you high double-digit income and triple-digit gains right through this crisis. And now, a generational opportunity is beginning, where the upside could be extraordinary. [Full details here, in plain English](. --------------------------------------------------------------- # [TIME IS RUNNING OUT: Join the 2023 Stansberry Conference From Home!]( Get all the Vegas action, industry presentations, and stock favorites from our most popular event of the year – no travel required. [Claim your livestream pass right here](. --------------------------------------------------------------- New 52-week highs (as of 10/5/23): CBOE Global Markets (CBOE) and Construction Partners (ROAD). In today's mailbag, a subscriber adds another view to [the discussion about bond yields]( which we've talked about a lot of this week. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Mr. McLaughlin, With all due respect, I think the reason the long end of the yield curve is increasing is because nations around the world are selling [Treasurys]. So the reversion we're seeing is the result of more turmoil in the bond market and not less. Please note the value of bonds that China and others are dropping on the bond market. Also note the results of the BRICS meeting in August where they decided to conduct international trade in their own currencies and not the Federal Reserve Note. So these nations don't need the same reserves of the U.S. fiat currency. Thank you for your thoughts." – Subscriber Mike T. Corey McLaughlin comment: Thanks for the note, Mike. I think what you describe is playing a role in rising bond yields on the long end of the curve. But I'll counter that it's not the biggest driver... For example, China sold "only" about $30 billion of U.S. Treasurys through the first seven months of this year. Now, to be sure, China's percentage of total U.S. Treasury supply has declined from about 14% in 2011 to below 4% today. But the Chinese government still holds "only" about $400 billion less than it did from a peak of $1.3 trillion in 2013. In nominal terms, China hasn't sold dramatically. Meanwhile, the U.S. Department of the Treasury issued more than $100 billion in long-term bonds in just one week in August. And it said this summer that it planned to issue $1 trillion worth of Treasurys in the third quarter of 2023 alone. I know those timelines don't exactly overlap. But I think it shows the context of the scale and influence that the U.S. government issuing more debt – more than anything else – is likely having on the bond market. Everything contributes, though – like a lack of buyers. And I have no doubt the push by the so-called "BRICS" nations is playing a role and should be analyzed. We'll try to do that more in the Digest in the coming days and weeks. But what the U.S. does to itself – issuing more and more debt to fund spending (which now costs Uncle Sam even more at 16-year high-interest rates) – is having a bigger influence than what anyone else is doing. I guess you can say that about a lot of things. Good investing, Dan Ferris Eagle Point, Oregon October 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 MSFT Microsoft 11/11/10 1,180.1% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,002.5% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 874.9% Extreme Value Ferris wstETH Wrapped Staked Ethereum 02/21/20 604.3% Stansberry Innovations Report Wade WRB W.R. Berkley 03/16/12 574.2% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 511.8% Retirement Millionaire Doc HSY Hershey 12/07/07 473.6% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 390.2% Stansberry's Investment Advisory Porter TTD The Trade Desk 10/17/19 326.1% Stansberry Innovations Report Engel ALS-T Altius Minerals 02/16/09 298.9% 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 1,456.3% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,039.7% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,023.8% Crypto Capital Wade MATIC/USD Polygon 02/25/21 766.3% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 630.0% 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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