The Weekend Edition is pulled from the daily Stansberry Digest.

We're all pretty excited around here about Stansberry Research's 20th anniversary...

The time has flown by...

As our founder, Porter Stansberry, noted in yesterday's DailyWealth, he started the company in 1999. I joined roughly a year later – in September 2000.

I've been at Stansberry longer than anyone but Porter. (Stansberry Venture Technology editor Dave Lashmet was hired before me, but he took a break from Stansberry for several years before coming back to the company.)

It seems like yesterday that Porter and I were sharing an apartment in Baltimore's Bolton Hill neighborhood. It humored both of us to see the drug dealers and hookers congregating outside.

After reading Hit Makers by author Derek Thompson, it's easy to sum up my entire experience at Stansberry...

In the book, Thompson tells the story of how Impressionism – the 19th century art movement – began with seven painters' works exhibited at the Musée du Luxembourg in Paris in 1897 (Monet, Manet, Degas, Renoir, Cézanne, Pissarro, and Sisley).

Other artists painted in a similar style, some clearly as talented as the famous seven. But none of those folks became as famous as the seven artists at the Paris museum.

If you were an impressionist artist in 1897, you wanted your paintings hung in that first Musée du Luxembourg exhibition. And in my mind, if you were a newsletter editor at any time over the past two decades, you wanted Stansberry Research as your publisher.

I have no illusions that I'd have been anywhere near this successful under any other publisher...

It's also highly unlikely I could wake up every day and focus solely on where we stand in the current cycle... and more important, what I believe you should do about it as investors.

I remember an early experience that nearly caused me to quit the industry forever...

While working for another newsletter publisher in Baltimore, I had decided not to issue a new investment recommendation one month. I simply didn't find a stock that I felt was compelling enough to tell my subscribers to buy. I put the draft of the newsletter on my publisher's desk, expecting his usual edits and ideas back on my desk the next morning.

Minutes later, my publisher stood in front of me with a scowl. He asked, "Where's the new pick? You MUST have a new pick every month."

At that moment, I learned how the business really worked at the time... It was run by publishers, marketers, and copywriters who specialized in making promises they knew couldn't be kept. They never seemed to care much about the content they were selling.

Folks like me were considered "editorial" employees... and largely viewed as an afterthought. I refused to make a new pick, and somehow didn't get fired. But I was discouraged by the episode, and thought maybe I was making a mistake with my life.

Fortunately, not too long after that, Porter hired me...

Porter saw the same problems in the financial-publishing industry that I did.

But being much smarter and more entrepreneurial than I was, he went about fixing them with boundless energy and focus. I interpreted Porter's basic attitude as, "By all means, you should get excited about what you're selling. But why can't we also treat our subscribers with some respect, by providing high-quality research?"

Before Porter, copywriters and marketing experts drove the financial-newsletter industry. But thanks to his hard work, the business is now driven by real research and the ideas and insights of the people doing that research.

I doubt it'll ever go back to the other way again, thank goodness.

Stansberry is the biggest and – in my totally biased opinion, of course – the best in this business today. And it's not by accident, either.

I know this is self-serving, and I'm simply asking you to trust me... but I can honestly say Porter's success comes as no surprise. Even though he's 11 years younger than I am, I always knew – from the first time I spoke to him – that he understood business better than anyone else... especially better than our immediate superiors back then.

Most people just don't understand the markets and business the way Porter does.

If they do get it, they tend not to be as great at expressing themselves through spoken or written word as he is. Most folks let the headlines and other people's opinions influence them too much. Porter does all the work and makes up his own mind... and tends to hire folks who do that, too. That ethos has trickled into every nook and cranny at Stansberry.

In addition to letting me ride his coattails to my own modest success in this game, Porter also aided my intellectual development on financial matters in those early days...

For example, back in the 1990s, Porter studied top technology futurist George Gilder's work. I liked Gilder, too, but Porter also turned me onto another important thinker back then, someone who made a bigger impression on me in our early days in this business...

I'm talking about economist Julian Simon...

If you recognize Simon's name, it's likely because he solved the problem of airline overbooking.

Airlines don't like planes with empty seats. They want to sell out every flight. But to do that, they wind up selling more tickets than available seats on the plane. It created headaches... until Simon suggested offering passengers an incentive to take a later flight.

If you've ever been sitting in an airport waiting area and heard an airline representative announce they're giving away "$300 in air travel" or a similar incentive to anyone willing to give up their seat and take a later flight, you know what I'm talking about.

That was Simon's idea. He came up with it in the late 1970s... And it's still in use today.

Porter told me about Simon's magnum opus, a book titled The Ultimate Resource 2...

It knocked my socks off...

You see, when Porter and I met, I was writing a (now defunct) newsletter that mostly focused on mining and other natural resource stocks. The price of natural resources rise as they become more scarce, and fall as they become more abundant.

Most folks believe they're becoming more scarce all the time...

But Porter, having studied economics in college, knew that was hogwash... In general, the supply of raw materials constantly increases, contrary to what most people believe.

Most folks just can't wrap their heads around the fact that technology can dramatically increase supply of all kinds of natural resources... keeping inflation-adjusted prices low over the long term. I didn't know it, either... until Porter explained it to me.

The thing is, the resource in the title of Simon's book isn't anything the mining industry digs out of the ground – or any other tangible product, for that matter. Simon viewed "human imagination coupled to the human spirit" as the ultimate resource. He said it would continue to make raw materials more abundant, causing prices to fall in real terms over the long run.

Simon put his money where his mouth was, too...

In the 1970s, environmental doomsayers predicted that we'd run out of various raw materials by the start of the 21st century. (A famous and subsequently discredited book called The Limits to Growth was published on this topic in 1972.)

But Simon knew better... He knew raw materials had become more abundant (and therefore cheaper) due to technological advances. He also believed the trend would continue, thanks to our relentless pursuit of progress.

In 1980, Simon made a 10-year bet with biologist and then-famous doomsayer Paul Ehrlich, author of the 1968 book, The Population Bomb.

The two men agreed on a list of representative raw materials. The bet was simple... If Ehrlich was right, prices would have to rise over the ensuing decade as the supply dried up. If Simon was right, the prices would fall as the supply increased through 1990.

Though the global population grew by 800 million from 1980 to 1990 – the largest single decade increase ever measured up to that time – the prices of all the raw materials fell... So Simon won the bet. (There's also a 2013 book about this specific situation called The Bet.)

Simon's protégé, writer and economist Stephen Moore, released a book in 2000 based on Simon's work called, It's Getting Better All The Time. The book detailed the dramatic improvements in the global standard of living that occurred throughout the 20th century.

In 2015, author Yuval Noah Harari published another book, Sapiens, that shows how our species' success stems from our ability to organize... and that we organize best and most around things that don't exist – laws, rules, nations, gods, religions, rights, and more.

Well, perhaps these things do exist, but their existence is intangible... just like the innovation and ideas Simon championed as the ultimate resource.

For investors, the implication of Simon's work and Harari's insight is powerful...

Businesses based on intangible assets employ less capital and earn higher returns than those based primarily on tangible assets.

For example, mining is a notoriously awful business. It requires huge amounts of upfront capital before you can earn a penny. The products – like gold and silver – require an army of union workers to extract and process... not to mention big, expensive machines. And because every gold mine produces the exact same thing, mining companies don't have any pricing power.

On the other hand, a software-based company like Facebook can literally be started in a dorm room, with no more upfront investment than a laptop and an ambitious student's spare time.

This is the idea of "capital efficiency" that Porter has written so much about. Longtime readers know chocolate maker Hershey (HSY) is one of his most prominent examples.

And of course, many folks know about investing legend Warren Buffett's famous transition...

Decades ago, Buffett went from buying companies with tangible assets at a discount – like his mentor, Ben Graham, did – to buying great businesses based on enduring intangible brands. The most famous example is his purchase of Coca-Cola (KO) shares in the late 1980s...

Nobody asks for caramel-colored sugar water. They ask for a Coke.

Attaching a desirable intangible to a tangible product is what most marketing is about. Coke is "always refreshing." American Express (AXP) credit cards are accepted everywhere. ("Don't leave home without it.")

Some businesses have yet to fully take advantage of the power of intangibles. Some can transition from putting large amounts of capital into tangible assets to putting less capital into intangibles, generating bigger returns than you'd ever expect...

In the October issue of my Extreme Value advisory, we found a company that's doing a "magic trick." It's turning a tangible asset into a much less capital-intensive intangible... and earning much higher cash flows and much higher returns on the smaller amount of capital its business now requires.

Imagine turning a regional water utility earning a 10% return on equity into Coca-Cola, which earns about 37% on equity today. The analogy sounds crazy, but that's simply a function of how underappreciated the power of turning tangibles into intangibles is.

If you've read Simon, Harari, or Porter's work on Hershey, you understand what I'm getting at... It all ties into the core of what helps us humans succeed at employing our hard-earned capital. What makes us human is our ability to create valuable intangibles in our lives.

It's one of the biggest lessons I've learned over the past 20 years. And as I explained earlier, I doubt I would have learned it so well if I were working anywhere else.

I hope it's like this for another 20 years... and that you're with us the whole time.

On that note, we're celebrating our 20th anniversary with you in mind...

We've spent the past few weeks putting together something special for our subscribers.

I recently flew to our headquarters in Baltimore to sit down with some of the other folks who have helped Stansberry Research grow over the past two decades.

DailyWealth's Steve Sjuggerud, who has known Porter since their days growing up in Florida, was there. Dave Lashmet and Retirement Millionaire editor Dr. David "Doc" Eifrig also joined us. So did Stansberry Portfolio Solutions portfolio manager Austin Root.

We gathered to share our favorite memories from the past two decades... and to discuss how subscribers like you have repeatedly told us about how our work impacts your lives. This rare "look behind the curtain" also came with two important announcements...

In short, these moves could forever change how you can use our research. To see what sets us apart from other publishers – and why close to 80,000 people like our work so much that they chose to receive it for life – I hope you'll take time to watch our message right now.

Good investing,

Dan Ferris

Editor's note: We've been on a crusade over the past two decades to level the playing field for individual investors. Now, it's time for us to celebrate you... Dan and other folks who helped build Stansberry Research recently sat down to share their fondest memories. And more important, they made two huge announcements about our future. Learn more here.