A disaster from eight years ago... These questions will soon have answers... What you can bet on: debt, inflation, and yourself... Remember the long term... Stansberry Investor Hour: Wunderkind Edwin Dorsey...
 And now we wait...
The first election polls in the U.S. will close at 6 p.m. Eastern time tonight (in parts of Kentucky and Indiana), right around when we publish this issue. So anything I (Corey McLaughlin) write about the election may soon prove untimely. That brings us to a good point... If you want to make bets hinging on the outcome of the presidential and congressional races, just know what you're getting into: a lot of speculation and the whims of emotional reactions. The prolific financial blogger Nick Maggiulli reshared one of his articles today about disgraced FTX founder Sam Bankman-Fried and one of the things he did before getting into trouble running the cryptocurrency exchange. As Nick wrote... My favorite story about Sam Bankman-Fried involves his time at Jane Street Capital where he built a system to get the 2016 U.S. Presidential election results before any mainstream media outlets. Bankman-Fried and a team of analysts, each of whom worked on a specific state, were able to obtain the state-level results of the 2016 election sometimes minutes before CNN (and others) announced them publicly. However, despite learning of a pending Trump victory before anyone else, Jane Street still managed to lose money on their trade because they bet against U.S. markets. Though their short position seemed like the right choice initially, as the night went on and the market digested Trump's victory, a U.S. rally ensued. Michael Lewis recalls the turn of events inside Jane Street in Going Infinite: "What had been a three-hundred-million-dollar profit for Jane Street was now a three-hundred-million-dollar loss. It went from single most profitable to single worst trade in Jane Street history." The lesson, according to Nick is: "Don't trade securities on election news. Even when you know the outcome, predicting the market's reaction to it is near impossible." I concur. Our Dr. David "Doc" Eifrig shared a similar take on this Bankman-Fried story in an issue of his Retirement Millionaire newsletter earlier this year. Bankman-Fried was a "proud liberal… a big donor to left-wing candidates and causes. He saw a Trump presidency as a disaster," Doc wrote. But the market didn't see it that way. Stocks rallied after it became clear Trump was the winner, crushing Jane Street's short bet on about $1.25 billion worth of stocks… and stocks continued to rally strongly in the months that followed. As Doc wrote, Bankman-Fried and his colleagues made a huge mistake by allowing their personal views to cloud their decisions on the entire market, and ironically, this failure eventually led Bankman-Fried to leave Jane Street, start FTX, and evaporate another $8 billion... While the Jane Street traders spent their mathematical minds on prediction, they let ideology get in the way. They didn't stop to consider other possible outcomes... like the markets welcoming the certainty of an election result or treating Trump as a business-friendly candidate. They had a hyper-rational election-prediction machine paired with an ideological view that Trump would tank the markets. And the ideology killed them... In short, your ideology is about what you think should happen. But markets don't care about should. Markets run on what is and what will be. So whether Kamala Harris or Donald Trump will win the White House is one question. Another is whether the outcome will send the markets higher or lower. We'll find out both answers soon enough. As we await an outcome (for potentially the next few days), we again would rather think about the things that won't change after the election, things worth betting on in the long term... U.S. debt will keep rising... U.S. government debt – which totals more than $35 trillion – has been rising by about $200 billion per month over the past year. That's $200 billion per month. Neither Harris nor Trump has any reasonable plan to slow this pace down... In fact, they have ideas on making it worse. As we wrote last month, Trump's tax plans could cost as much as $6 trillion over the next decade, according to the Tax Foundation think tank. Harris' economic proposals could cost $3.5 trillion over the same time frame, says the Committee for a Responsible Federal Budget. Both candidates know how to spend money. This election cycle has been the most expensive of all time – for political ads, at least. According to data firm AdImpact, the Harris and Trump campaigns spent nearly $11 billion in ads since the start of 2024, with $2.2 billion in the past two weeks alone. Inflation isn't going anywhere... Meanwhile, don't fall into the trap of believing that high(er) inflation is gone for the foreseeable future. We're already seeing early signs of the pace of price increases in the U.S. reaccelerating... As we reported last week, while the mainstream headlines about the government's latest "official" inflation claim the pace is in line with the Federal Reserve's supposed 2% annual goal, that's simply not the case. These stories were referring to the headline personal consumption expenditures ("PCE") price index report for September. That did measure 2.1%. However, the Fed prefers "core" PCE – which strips out volatile food and energy prices – to gauge underlying inflation. Core PCE rose by 0.3% in September, which puts it closer to a 4% annual pace than 2%. We saw a similar inflation "bump" earlier this year... And the continued rise in the pace of inflation caused the Fed to delay interest-rate cuts until the second half of this year. So we could see a premature pause or slowing down of rate cuts. I suspect this is what the bond market has been "pricing in" over the past few months... and why we've seen things like mortgage rates rise in the face of interest-rate cuts. High(er) inflation isn't dead. That being said, we don't expect the Fed to change its rate-cutting plans in a meaningful way when it meets tomorrow and Thursday. The central bankers seem intent on fulfilling their earlier promise of at least some more cuts through the end of the year. Bet on yourself... On highly charged days like today, I'm reminded of just how important it is to take your financial situation into your own hands. No one, not a president or anyone in Congress or the Fed, will look out for you like you. Own shares of high-quality businesses and inflation hedges (which includes stocks)... and keep cash on hand for when the inevitable next "crisis" arrives, both for protection and to take advantage of buying opportunities when "everybody else" is panicking. And, please, remember the long term – no matter what happens tonight... As our Stansberry's Investment Advisory lead editor Whitney Tilson wrote in his free daily newsletter today... Don't let your politics affect your investing. Longtime readers might remember the chart below that I shared last year... It shows how a $1,000 investment in the S&P 500 would have done over the prior 70 years had it been invested only when a Republican versus a Democrat was president – versus being fully invested the entire time. As you can see, it is deadly to your long-term returns if you allow partisan political viewpoints to drive your investment decision making:  Since 1953, if you only invested when a Republican was president, a $1,000 stake in the U.S. benchmark index would have turned into $27,400 over the next 70 years. That's a 2,640% gain. If you only invested when a Democrat was president, your gain would have been 5,110%. But if you stayed invested in U.S. stocks during the entire 70-year span, no matter who was in the White House, that initial $1,000 investment would have turned into $1.43 million, a nearly 143,000% return. As for today... The markets essentially reversed the price action we saw yesterday. The benchmark S&P 500 Index rose by 1.3% and bounced off its 50-day moving average ("50-DMA") – a technical measure of a short-term trend – as did the Nasdaq Composite and Russell 2000 indexes. The Dow Jones Industrial Average was up 1.1% and reclaimed its 50-DMA. Long-term bond yields were little changed... Oil prices were up, Brent crude above $75 per barrel... Gold moved up a hair to around $2,740 per ounce... And bitcoin is up almost 4% in the past 24 hours to around $70,000. | | | | In this week's Stansberry Investor Hour, Dan and I are joined by Edwin Dorsey, the wunderkind editor of The Bear Cave newsletter, where he writes deep, investigative analyses of public companies...  Click here to watch the interview now... To hear the full audio version of this week's Stansberry Investor Hour, visit InvestorHour.com or find the show wherever you listen to your podcasts. | | | | | New 52-week highs (as of 11/4/24): Alpha Architect 1-3 Month Box Fund (BOXX), Compass (COMP), Electronic Arts (EA), Gilead Sciences (GILD), Hologic (HOLX), Illumina (ILMN), London Stock Exchange Group (LNSTY), Masimo (MASI), Packaging Corporation of America (PKG), Sprouts Farmers Market (SFM), Texas Pacific Land (TPL), Twilio (TWLO), Visa (V), and Viper Energy (VNOM). In today's mailbag, a follow-up to a note in yesterday's mail... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Can you please elaborate on the hundreds of billions of fraud referenced with the $3T [of pandemic] stimulus?" – Subscriber S.J. Corey McLaughlin comment: Sure. The mix of fraud and massive government mismanagement with the creation and distribution of pandemic stimulus funds has been one of the most underreported stories of the past several years, in my view. Let's cover the mismanagement part first because it sets up the fraud story. We first wrote about this in the middle of 2020... Back in April – in a rush to get the Congress-approved "stimulus" package out the door – the IRS sent out 1.1 million checks to dead people... totaling $1.4 billion. It took about six weeks for any decision-maker to put a stop to what was happening, once word started getting out. The Government Accountability Office ("GAO"), a watchdog group that first reported the size and scope of the errors, said last month... The mixup happened because the Treasury Department and its Bureau of the Fiscal Service – which distributed the payments – do not have full access to the death records maintained by the Social Security Administration and used by the IRS. Stimulus payments were also determined based on 2018 and 2019 tax returns, meaning Americans who died after filing those returns could have still been included. On top of all this, the IRS then had the gall to ask for the money back, even though the agency had no way of enforcing – or even giving any directions – to next of kin or anyone else to mail back a return... No wonder people realized they could take advantage of a deeply flawed system intended to benefit small businesses and unemployed workers – and they did. Here's an Associated Press story from 2023 about what happened next... Fraudsters used the Social Security numbers of dead people and federal prisoners to get unemployment checks. Cheaters collected those benefits in multiple states. And federal loan applicants weren't cross-checked against a Treasury Department database that would have raised red flags about sketchy borrowers. Criminals and gangs grabbed the money. But so did a U.S. soldier in Georgia, the pastors of a defunct church in Texas, a former state lawmaker in Missouri and a roofing contractor in Montana. All of it led to the greatest grift in U.S. history, with thieves plundering billions of dollars in federal COVID-19 relief aid intended to combat the worst pandemic in a century and to stabilize an economy in free fall. An Associated Press analysis found that fraudsters potentially stole more than $280 billion in COVID-19 relief funding; another $123 billion was wasted or misspent. Combined, the loss represents 10% of the $4.2 trillion the U.S. government has so far disbursed in COVID relief aid... "Here was this sort of endless pot of money that anyone could access," said Dan Fruchter, chief of the fraud and white-collar crime unit at the U.S. Attorney's office in the Eastern District of Washington. "Folks kind of fooled themselves into thinking that it was a socially acceptable thing to do, even though it wasn't legal." The U.S. government has charged more than 2,230 defendants with pandemic-related fraud crimes and is conducting thousands of investigations. The pilfering was wide but not always as deep as the eye-catching headlines about cases involving many millions of dollars. It all adds up, of course, and this story should be a stain on big government. But we haven't heard either presidential candidate talk or be asked about it. Remember that the next time the government promises to throw money at a crisis, because even recent history is forgotten. All the best, Corey McLaughlin
Baltimore, Maryland
November 5, 2024
Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios. Returns represent the total return from the initial recommendation. | Investment | Buy Date | Return | Publication | Analyst | MSFT
Microsoft | 11/11/10 | 1,352.7% | Retirement Millionaire | Doc | MSFT
Microsoft | 02/10/12 | 1,301.8% | Stansberry's Investment Advisory | Porter | ADP
Automatic Data Processing | 10/09/08 | 1,045.6% | Extreme Value | Ferris | BRK.B
Berkshire Hathaway | 04/01/09 | 684.2% | Retirement Millionaire | Doc | WRB
W.R. Berkley | 03/15/12 | 507.5% | Stansberry's Investment Advisory | Porter | TT
Trane Technologies | 04/12/18 | 501.4% | Retirement Millionaire | Doc | AFG
American Financial | 10/11/12 | 448.1% | Stansberry's Investment Advisory | Porter | HSY
Hershey | 12/07/07 | 446.0% | Stansberry's Investment Advisory | Porter | TTD
The Trade Desk | 10/17/19 | 425.6% | Stansberry Innovations Report | Engel | SFM
Sprouts Farmers Market | 04/08/21 | 407.3% | 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 | | 3 | Retirement Millionaire | Doc | | 2 | Extreme Value | Ferris | | 1 | Stansberry Innovations Report | Engel |
Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio | Investment | Buy Date | Return | Publication | Analyst | wstETH
Wrapped Staked Ethereum | 12/07/18 | 2,291.8% | Crypto Capital | Wade | BTC/USD
Bitcoin | 11/27/18 | 1,703.8% | Crypto Capital | Wade | ONE/USD
Harmony | 12/16/19 | 1,111.4% | Crypto Capital | Wade | POL/USD
Polygon | 02/25/21 | 696.2% | Crypto Capital | Wade | AGI/USD
Delysium AI | 01/16/24 | 290.2% | 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 | | Inovio Pharma.^ | INO | 1.01 years | 1,139% | Venture Tech. | Lashmet | | Seabridge Gold^ | SA | 4.20 years | 995% | Sjug Conf. | Sjuggerud | | Nvidia^* | NVDA | 4.12 years | 777% | Venture Tech. | Lashmet | | Intellia Therapeutics | NTLA | 1.95 years | 775% | Amer. Moonshots | Root | | Rite Aid 8.5% bond | | 4.97 years | 773% | True Income | Williams | | PNC Warrants | PNC-WS | 6.16 years | 706% | True Wealth Systems | Sjuggerud | | Maxar Technologies^ | MAXR | 1.90 years | 691% | Venture Tech. | Lashmet | | Silvergate Capital | SI | 1.95 years | 681% | 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%.
Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio | Investment | Symbol | Duration | Gain | Publication | Analyst | | Band Protocol | BAND/USD | 0.31 years | 1,169% | Crypto Capital | Wade | | Terra | LUNA/USD | 0.41 years | 1,166% | Crypto Capital | Wade | | Polymesh | POLYX/USD | 3.84 years | 1,157% | Crypto Capital | Wade | | Frontier | FRONT/USD | 0.09 years | 979% | Crypto Capital | Wade | | Binance Coin | BNB/USD | 1.78 years | 963% | Crypto Capital | Wade | | 
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