The best investment idea we’ve ever had
Crux note: It’s rare enough for Porter Stansberry and Steve Sjuggerud to bet on the same investment idea, let alone the specific timing of when you should get ahead of a major market trend… But that’s exactly what’s happening right now with commodities…
Porter’s not mincing words, either… He’s calling this the best investment idea they’ve ever had.
Based on the history of this market, they forecast the potential for hundreds-of-percent gains in the years to come. In fact, they’re so confident in this setup, they’re making an offer unlike anything before – a one-time chance to access all of Stansberry Research’s commodities research for a reduced price.
So if you’re curious about making money in the commodities market, click here.
And continue reading below for more from Porter in his special Digest essay (shared with Crux readers early)…
From Porter Stansberry:
It was the ultimate investment setup…
It was the best, most certain investment opportunity I (Porter) had ever seen in my entire career.
And it was days away from booming…
Three years ago, I wrote in these pages that investors had the rarest of all opportunities in the markets. This wasn’t a chance at massive gains… It was a lock. There simply wasn’t any doubt. A huge move higher in one of the world’s largest markets was inevitable and imminent.
I even wrote something I had never written before (and haven’t written since): “I’m 100% certain.”
In today’s Friday Digest, I want to take you back to the summer of 2015…
I want you to remember the absolute destruction we had seen in gold stocks. And I want to show you what happened next.
Because bull markets follow bear-market bottoms. What has happened over the last three years is merely a prelude for what’s coming next across the commodity markets.
On July 17, 2015, the Wall Street Journal‘s Jason Zweig wrote a column that was exceptionally disparaging about gold…
The headline read: “Let’s Be Honest About Gold: It’s a Pet Rock.”
Yes, Zweig helpfully pointed out that $3 billion had been withdrawn from funds investing in the metal over the past year. He knew the price of gold was down 40% from its most recent peak in June 2011.
But upon studying the thousands of years during which gold has retained all of its purchasing power while every single fiat, paper currency has been felled by profligate government spending and runaway inflation… Zweig ironically proclaimed that gold “isn’t a panacea for inflation” and that owning gold is an irrational “act of faith.”
Having insulted the metal, he went further and publicly questioned the sanity of anyone who owned it. “Gold bugs often resemble the subjects of a laboratory experiment on the psychology of cognitive dissonance.”
Like a squirrel watching a bank robbery, Zweig saw exactly what had happened in the market for gold… and understood nothing.
What did we see? The very best investment opportunity of our lives…
And so on July 24, 2015 – a week after Zweig’s squirrel impersonation – we wrote a Friday Digest explaining why gold stocks were “100% certain” to soar in the near term and would far outperform stocks.
By the following August, junior gold miners – as measured by the VanEck Vectors Junior Gold Miners Fund (GDXJ) – rose 166%, from around $18 a share to almost $50. “Major” gold-mining firms – represented by the VanEck Vectors Gold Miners Fund (GDX) – rose from less than $14 a share to almost $31, a return of 124%.
How did we know? Why were we so sure?
We knew because, along with our friend and colleague, Meb Faber, we had studied hundreds of years of market history. We knew that markets that have fallen by 80% – and for more than three years in a row – always soar.
Just like stocks don’t go up forever, they don’t go down forever, either. Sooner or later, financial markets form a bottom. Sooner or later, the correction or bear market creates such value that it attracts new buyers. And sometimes, for no apparent reason at all, stocks will suddenly shoot higher.
We went on to describe Meb’s research into the situation. He looked at both whole countries and asset classes, looking for obvious or tradable patterns. Specifically, we wrote…
Meb studied five major stock markets from 1903 until 2007.
He wanted to know what stock prices did on average in these markets after falling for three consecutive years. He discovered that in major stock markets, share prices didn’t often fall three years in a row. Three consecutive years of lower prices almost never happened – those instances occurred less than 3% of the time.
But when markets fell three years in a row, the following bull market was extremely powerful.
The average return in stocks during the fourth year was more than 30%. That’s a significant result, something that wouldn’t happen by chance. This big move higher is caused by reversion to the mean, not chance.
Meb found similar numbers when he turned his attention to specific asset classes…
After three years in a row of declining equity prices, the average return in the fourth year was 34%, almost three times higher than the average return of all the years in the study. Again, statistical analysis tells us these are meaningful results, not just chance… Buying markets and asset classes that are down three years in a row is a rare and valuable speculation.
But… can we make the results even better?
Meb also believed that mean reversion would lead to even more powerful rebounds in prices where the value destruction had been the greatest. He studied countries with stock markets that declined by 80% or more. On average, these countries saw their indexes rebound by nearly 120% in the three years that followed.
Meb found the same kind of powerful rebounds in different industry groups, too. He studied U.S. industry groups going back to the 1920s. When a U.S. industry group fell by 80% or more from a peak, the average return three years later was more than 170%.
This research is all based on reversion to the mean…
Trees don’t grow to the sky. And gold doesn’t go to zero. That’s how we knew that gold (and gold stocks) wouldn’t keep falling. We knew that after falling for three years in a row… and with most mining stocks down 80% or more… it was only a matter of time before a huge rally lifted these shares.
It was, as we predicted, “a lock.”
Let’s say our roles were reversed…
Let’s say you knew for certain that gold stocks were going to rally by 100% or more in the next 12 months. What would you do?
Here’s what we did.
First, I negotiated a deal to buy a controlling interest in the world’s leading gold-sector research firm, Casey Research.
Right at the bottom of the gold sector and after a horrendous three-year collapse in gold stocks, we invested heavily in buying information and hiring analysts with an expertise in gold stocks. We spent millions and millions of dollars. And then, using the resources of this new research team, we published something unlike anything we had ever offered before. It was called “Porter’s 10-for-10.“
The idea was simple…
Watching the bottom fall out of the market for gold stocks, we knew that they had to rally… and soon. We took the 10 best ideas from Casey Research and wrote a report for our subscribers. Our recommendation was to sell 10% of your stock portfolio and use those funds to buy a 1% position in 10 different gold-mining stocks.
Rather than use trailing stops, by keeping your position sizes small and diversifying across 10 different companies, you’d have a portfolio you could keep for the long term – 10 years.
We didn’t have to wait long for great results: Within a year, one of our recommendations was up 425%. Another was up 265%. A third was up 166%. Overall, the entire portfolio (which included some conservative gold-royalty firms) more than doubled, up around 133% in a little more than a year. The U.S. stock market was up about 7% in the same period.
This report was free to our Alliance members. And for anyone else who wanted a copy, all we asked was that you take a trial subscription to Casey Research.
Less than 1% of you took us up on this offer. Probably far less than 1% took this advice. I’m pretty sure nobody followed our advice. You see, at extreme points in the markets – at the very bottom in particular – most investors simply won’t take the correction action. They are frozen. No matter how compelling the facts are, few people can get past their emotions.
So… writing things like I wrote in July 2015 is probably just “tilting at windmills.” But I don’t have to reach everyone. This work is still worth doing, even if I can only help a handful of our subscribers.
Just be one of them.
You see, the big bull market that started in gold in July 2015 is far, far from over…
In fact, gold stocks have pulled back a good bit. They’re down about 40% from their peak in the summer of 2016. The initial big bull rush is over. But a longer, much bigger bull move is underway… and few investors have noticed.
That’s why, next Friday, we’re publishing an updated version of ‘Porter’s 10-for-10.’
We’re replacing one of the gold-royalty stocks (where the management has made some decisions we don’t like) and we’re adding a new junior miner to replace the one that blew up.
No, I don’t expect we’ll see 100%-plus returns in the next 12 months again. But I’m confident this portfolio of 10 gold-mining stocks will beat the S&P 500 over the next year… three years… and five years. It might even save your portfolio if, as I expect, we see a major stock-market correction in the near term.
With the Dow slipping below its 200-day moving average and the bond market near “inversion,” plenty of signs suggest a bear market is likely to develop soon. And that’s typically when gold stocks do their best.
But gold is far from the only opportunity…
Almost no one has noticed yet that commodities in general have made a big move higher. Eventually, gold won’t be the only commodity to enjoy a huge rally. Sooner or later, the same kind of move we’ve seen in gold will happen in every major commodity sector. Wherever you look in the commodities complex, you will find blown-out sectors that mirror what we saw in gold back in 2015.
Across the board, commodities are down about 80% from their peak.
Just look at these charts…
Commodities as a whole have gotten clobbered over the past 10 years…
What’s going to happen next is the biggest commodity rally of all time…
I can’t tell you exactly when it will start. But I’m 100% certain that over the next 12 to 36 months, commodities and commodity stocks will experience huge gains that dwarf the returns of the stock market.
Please… don’t miss this opportunity.
Once again, I’m going to do my best to make sure that these opportunities materialize for you. Not only am I updating my “10-for-10” report about the 10 best gold stocks to buy, I’m creating an entirely new way for you to get ALL of our best research on this ongoing commodity bull market.
We’re calling this offer the ‘Stansberry Commodity Alliance’…
If you will join us in this effort, you’ll get ALL of our commodity research. That’s everything we publish today that’s focused on commodities: “Porter’s 10-for-10,” Commodity Supercycles, Stansberry Gold & Silver Investor, and True Wealth Opportunities: Commodities.
You’ll also get anything we develop in the future that’s focused on commodities. So as we continue to build our commodities research team, you’ll get all of our new products. Everything.
Currently, we’ve developing a new weekly commodity report that will keep you updated on every commodity recommendation we’ve made and other developments across the commodity complex. We’re also developing a unified commodity portfolio for our Stansberry Portfolio Solutions product. You’ll get both of these new services for free.
That’s more than $10,000 in research products that we currently publish…
And several thousand dollars in additional products that we’re developing today.
How much will it cost you? Just $5,000.
And here’s the best part… No matter how much additional research we develop and add to this subscription, you’ll never have to pay more for it.
You’ll be in already, with nothing more to pay. We’re so confident that commodities will rally that we won’t even charge a maintenance fee on our Commodity Alliance subscription until after gold has doubled from here. So… until we’re right… we won’t charge you another penny, no matter how many additional research products we develop.
To get all of the details, please click below to review the details of this new offer and place your order. (By the way, if you recently purchased True Wealth Opportunities: Commodities, don’t worry. Just call us and we will give you 100% credit toward this new Commodity Alliance offer.)
Why are we doing all of this?
We want you to make a killing on the coming bull market in commodities.
This is going to happen.
Three years from now, I’m going to write another Digest just like this one.
Please, for Pete’s sake, don’t let your emotions freeze you. Make the obvious decision: Invest in what has been blown out. Do so with great research and our help. Make good, smart choices. Manage your risk. Do these things the way we show you and you’ll read that Digest three years from now and be able to tell yourself, “I did it right.”
By the way…
A year after Jason Zweig’s first “pet rock” column, he wrote about gold again. Did he mention how much money had been made in gold stocks? Nope. He did note that gold prices were up 20%? Did he think that made his advice wrong?
No, of course not.
He titled his follow-up column, “Gold: It’s Still a Pet Rock.” The mainstream press is a long way from recognizing the opportunity in commodities. There’s still a lot more upside to come.