The Weekend Edition is pulled from the daily Stansberry Digest.
Let's start with a simple question...
If I told you all you needed to do to make more than 30% this year with a guaranteed investment was simply turn on your computer once a week, would you do it?
Pretend for a moment that the investment is 100% real...
Assume it was backed by about $200 million in capital and that the deal had been thoroughly vetted by an experienced CPA and auditor, as well as a top-notch corporate attorney.
Assume that I'd looked at it personally and was willing to put my name on it. Assume that the deal was backed by one of the world's largest, most successful, and oldest private-equity firms.
That all happened, by the way...
So would you turn on your computer once a week to make a completely safe, 30% return? Is the answer even a "maybe"?
If so, please keep reading. Although I'm sure it's hard to believe, you can do this...
You can earn investment returns that exceed Warren Buffett's – that is, more than 20% a year – with publicly available companies that file with the U.S. Securities and Exchange Commission ("SEC"). Although most investors know almost nothing about these investments, they're completely real.
In fact, there are more of these kinds of investments outstanding than stocks – way more.
These investments can feature extremely high levels of current income (annual yield). We target around 10% annually. And our recommendations in this asset class have a proven win rate of 85%. We've produced an average annualized total return (winners and losers) of more than 20%.
Do you currently produce a profit with 85% of your equity investments? Do you currently earn a yield on your portfolio that can exceed 10% a year? Do you currently earn more than 20% a year on your entire portfolio every year?
If you've answered "yes" to all of those questions, stop reading our newsletters. You don't need to change a thing. Call me and tell me how you do it.
But if you've answered "no" to any of those questions, then I know a better way for you to invest – no matter how old you are, no matter how young you are, and no matter what your investment goals are.
You see, these investments are liquid. You can sell them whenever you want, if you need to. They're widely held by the world's wealthiest and most sophisticated investors – including all of New York's most elite hedge funds and private-equity groups. These investments also offer a series of legal protections that give investors far more rights than equity investors.
And by the way, this asset class dwarfs the stock market. It's about twice as big.
There's only one reason most people don't invest in this asset class...
Wall Street does everything it can to make sure you won't.
Think about that...
What's on CNBC all day? Information about buying stocks – common equity. What does your discount broker make simple and cheap for you to trade? Common equity. What is all of the hype about in the financial world? Which stocks to buy.
Meanwhile, this asset class is twice as big, has far better legal protections, offers far more current income, and frequently produces higher total returns.
And yet, most people have never heard of it.
Why would Wall Street want you to focus on stocks and almost never mention this other, clearly better, way to invest? Gee, I wonder.
Here's a hint: It's in this other asset class that Wall Street makes nearly all of its money.
Does that make you angry? Don't take it personally. That's human nature. You'd do the same thing if you were in their shoes. After all, if you owned a beautiful orchard, who would get your best apples? Your family or the discount grocery store chain?
So what do the "best apples" look like in Wall Street's orchard?
Over the last three and a half years (since the last bottom in the stock market in the winter of 2015 and 2016), the stock market has been on a tear – up more than 15% annually.
We relaunched our coverage of this asset class at the same time...
Since then, we've completed 20 investments in this asset class. Just to be clear, what I mean is we've recommended making these investments, and they've traded below our recommended "buy up to" prices. And then we've recommended selling those investments and have seen them trade above our recommended sell price.
We're fully independent at Stansberry Research. We don't buy or sell anything we write about.
But we've seen market action that proves our advice could have been followed and our subscribers could have achieved these actual results. Based on that market evidence, we know that 85% of these recommendations were profitable. The 20 investments produced annualized results of about 21%, with a big portion of those returns coming in the form of current yields.
That's one of the things that makes these investments so much better than stocks and perfect for retired investors (or anyone else who likes having more money).
If you have any experience with investing, you'll recognize that these results are mind-boggling...
You'll think they can't be genuine. There's got to be a catch. A big catch.
Like maybe we got incredibly lucky... Maybe these results were unique to that market cycle and won't be repeated ever again... Or maybe this asset class is simply incredibly risky.
So what's the catch?
Nothing about these investments is especially risky...
They're definitely not as risky as buying shares in the exact same companies. Nothing about our results is particularly extraordinary, either.
We have good analysts who know what they're doing. But spotting great opportunities in this asset class is far more objective – and therefore, in some ways, easier – than figuring out good opportunities in the stock market.
Yes, we did start investing at a good time. But knowing when to invest in this market is breathtakingly easy – far, far easier than trying to time the stock market.
And even though not as many good opportunities are out there right now, it doesn't mean we can't find any attractive investments... Earlier this year, we closed a recommendation we made less than a year before that for gains of more than 30%.
But there's got to be a catch, right?
Yes, there is. But as Shakespeare would have explained, the fault, dear subscriber, is not in the markets, but in ourselves.
On April 10, we sent out an e-mail notice to our subscribers... Once again, it was great news about a recommended investment in this asset class.
We'd invested alongside one of the best private-equity firms in the world – Apollo Global Management. We'd invested in a global restaurant business through a publicly traded security of an SEC-filing corporation – whose securities are almost unknown to the public at large.
If you went looking for the stock ticker, you would have never found it. To invest, you needed to know the "CUSIP" code.
Why didn't Apollo make it easier for investors to own this security?
Well, as our analyst Mike DiBiase explained last year, our minimum annual return would be about 15%...
And by the way, those returns were guaranteed by law and backed by almost $100 million worth of cash earnings. Those returns included an annual cash yield of almost 10%.
We analyzed the situation and judged that there was zero risk of default or bankruptcy here. That meant there was no way you could lose money in this deal or that these returns wouldn't be paid in full.
Does that sound like the kind of opportunity Apollo would be eager to share with others? Absolutely not.
Apollo had zero incentive to advertise this opportunity – and it said almost nothing about it to the public.
So who knew about this deal?
A small group of Wall Street's best investors. And they had zero incentive to tell you about it, either. Instead, they stuff deals like this into their hedge funds and their private-equity portfolios and charge outlandish fees for these kinds of investments – typically 2% to 3% a year in overhead and 20% to 25% of all profits.
The simple fact is, anyone who knew about this deal was far more likely to buy it for his own funds than to ever tell anyone else about it. Well, except us, of course.
And why on Earth would we tell folks about this deal? Good question. We could obviously make plenty of money investing in these ideas, but that's not the business we're in.
Instead, we exist to serve you.
It sounds crazy to most people, but it's what we enjoy doing. We also think we have a better business model than Wall Street.
How so?
Our business model doesn't depend on screwing people over. We think, over time, that's going to be a massive advantage. It certainly makes it easier to sleep at night.
Because Wall Street keeps these investments secret from most investors, they are less liquid than stocks. That makes buying them at the price you want a little more difficult.
You must have patience. You must be willing to wait for the price you want to pay.
There's a direct relationship between why these investments are less liquid than stocks – and thus more difficult to buy at a specific price – and why they are such great investments.
If opportunities like these were easy to find and trade, then the returns available would match the other most liquid and popular investments. You rarely find obviously mispriced stocks in the S&P 500.
I don't want to minimize the important differences...
These securities – publicly traded corporate bonds – are very different from stocks. These securities can be difficult to understand. They frequently have 500-page prospectuses, with language that's impossible to decipher unless you're an experienced lawyer.
They also typically have face value price tags of $1,000 per bond. Does that seem like a price that's designed to be friendly to retail investors?
And everything else about this market tries to keep individual investors away, too – like often having to call your broker to place a trade, like using extremely long and easy-to-confuse CUSIPs instead of letter-based symbols. You'll never – ever – see CNBC talk about these kinds of opportunities... especially not when they involve secretive private-equity firms.
But is that really a surprise? Why would Wall Street try to explain and sell you investments like these? They're great investments! Wall Street wants to sell you all the risk. They try to keep all the returns for themselves.
So... what's more important to you?
Would you rather have the most sophisticated information about investments where you have an incredible advantage and the opportunity to consistently make safe 20%-plus returns? Or would you rather have convenience and take the same risks and get the same returns as everyone else?
If you want to have returns that are better than other investors, you have to make investments that are different from other investors.
There's no shortcut. So what's it going to be, cupcake?
Most investors have no chance to invest intelligently in corporate bonds...
But if you have a team of analysts and lawyers, you can develop a huge advantage in this market. That's why we spend millions of dollars on our Stansberry's Credit Opportunities team and the data it analyzes each month. We analyze 40,000 separate corporate bonds each month. And we assign our own credit rating to between 4,000 and 6,000 individual debentures every month, too. We're always on the hunt for so-called "outliers" – bonds priced much lower than what we'd expect given the level of safety that they offer.
That's the only way to find the kind of deal I've described here...
You have to look through the entire haystack to find the needle.
Nobody else in the investment-newsletter world does it. To find anything like the kind of analysis we do in this market, you'd have to invest in an expensive hedge fund.
Deals like the kinds we recommend are rare. They're hard to find. And they're incredibly valuable. Finding them is hard work – individuals can't do this work... and neither can most investment firms.
But we can. And we do.
All you have to do is read a few pages each month. You have to be willing to call your broker in some cases. Some firms do allow you to buy these deals on your computer, some don't. It depends on your broker. And you have to be willing to turn on your computer once a week to check prices if you aren't able to buy the bonds immediately at the prices we recommend. (You really don't need to check prices every day in this market.) Believe it or not, we've even had a subscriber threaten to cancel his subscription because getting a price quote required turning on his computer.
But... if you're willing to lift a finger... these returns are available.
All you've got to do is try. Or alternatively, you could e-mail us to complain.
Up to you.
But only if you subscribe!
I've long argued that most individual investors should never buy stocks at all...
They should only buy corporate bonds.
Corporate bonds provide higher levels of income and can produce (as we've proven) total returns that are better than stocks, on average. More important, corporate bonds provide a way for investors to get a preferred return of capital and important legal protections, too. As a result, they're much less risky than buying stock in the same company.
You can see from our track record that what I'm saying is true.
So... why aren't you reading Stansberry's Credit Opportunities?
(Insert your litany of excuses here, none of which make any sense.)
Sure, it's easy to laugh at someone who is so lazy he won't even turn his computer on once a week in exchange for making more than 20% a year. But you're probably not reading Stansberry's Credit Opportunities, either. So who's the real fool?
Look, if you'd like to make huge returns in guaranteed safe investments that are backed by huge amounts of capital, we'd love for you to read our work.
But you have to turn on your computer. Sorry about that. And you have to subscribe. Oh, and by the way, right now, you can get all of this research for the lowest price we've ever offered. Click here to sign up for Stansberry's Credit Opportunities right now.
Horse, meet water.
Regards,
Porter Stansberry
Editor's note: After reading this essay, one longtime subscriber sent in "feedback" for just the second time in his life. His e-mail led us to do something we've never done in our 20-year history... We allowed him to share his story directly with his fellow subscribers.
He revealed how this strategy helped him retire at age 52. And more important, he got us to agree to something else we haven't ever done before. Watch his presentation right here.
