Building Wealth Doc's note: I like to learn from the best... and there's no better newsletter in finance than Grant's Interest Rate Observer.
In today's issue, we're sharing a recent essay from Stansberry Research founder and my good friend Porter Stansberry. After following Jim Grant for years, Porter's finally gotten a seat at the table. He'll be attending Grant's annual conference, sharing insights, and interviewing the legendary investor in person... and he wants to share it with you. Here's how...
More than 20 years ago, when I (Porter) first began writing about finance, everyone I met or talked to who was anyone important asked me the same question... Whether it was dinner with Jim Rogers in New Orleans or meeting Bill Bonner for the first time, I kept hearing about another writer – Jim Grant – and his newsletter, Grant's Interest Rate Observer.
Over my entire career in finance, this simple question – "Do you read Jim Grant?" – has defined whether you were an investing pro or a complete novice. Knowing about Jim and reading his newsletter was kind of like a secret handshake on Wall Street.
If you were "in," then you were a value investor. You were contrarian. You understood gold. And you were deeply skeptical of Wall Street's big institutions. But most of all, you were extremely smart and successful. You had to be to even know about this newsletter (and to afford it).
See, Jim doesn't advertise. And he has a small number of subscribers. His newsletter comes out twice a month. Everything about Jim and his business is old-fashioned.
But the world's best investors – old and young – all read his newsletter. Paul Volcker, for example, the legendary Federal Reserve chairman who beat inflation in the early 1980s, is a longtime reader. The young Peter Thiel, of PayPal and Facebook fame, spoke at the spring 2014 Grant's conference.
Every newsletter writer and publisher in the world claims that everyone who matters in global finance is a friend, contact, or at least a subscriber...
But in Jim's case, it's true. How powerful is this newsletter?
Grant's Interest Rate Observer is the only newsletter specifically mentioned inThe Big Short.
That's Michael Lewis' book (and movie) that detailed how some investors made billions of dollars by shorting mortgage bonds and mortgage bankers during the financial crisis.
Jim introduced most of these investors to the core trade of The Big Short, which was shorting an index of subprime mortgage bonds. Investors who really know that trade – who really know how billions were made during that crisis – know that Jim and his newsletter played a huge role in getting investors into it.
In our reader feedback mailbag at the bottom of every Stansberry Digest – our daily e-letter detailing current events in the markets and the economy – we refer to our readers as being "paid-up subscribers." The catchphrase comes from Grant's Interest Rate Observer. It's a tongue-in-cheek reference that Jim makes to acknowledge that his subscribers are usually far wealthier and more powerful than the author of the newsletter.
We adopted the convention as an homage to Jim... and to signal to the more sophisticated members of our audience that we also were fans of Grant's in a subtle, secret-handshake kind of way.
That's the backstory...
My job as chairman of Stansberry Research is to make sure I do my best to give you the information I'd want if our roles were reversed. If that's true, then why haven't I told you about Jim's newsletter before? Well, I have.
From time to time, I'll reference Jim's work and credit him for ideas that we share.
But honestly, for most of you, reading Jim's newsletter wouldn't be easy. His writing style is idiosyncratic. It's not designed to be welcoming to new subscribers or easy for nonprofessional investors to read.
For example, Jim never says "buy XYZ stock up to such-and-such a price." He knows his audience doesn't need his specific advice. Investors buy Grant's Interest Rate Observer because no one publishes better ideas more consistently or has access to more elite investors than Jim does. Like I said... it's like being part of a secret club.
One part of being in that club is simply irreplaceable. This is something I couldn't give to you any other way. It's something that only Jim Grant could do.
Next month, I'll attend the most exclusive investment-group meeting in the world...
This meeting happens twice a year in New York at one of the world's most expensive hotels. I try to attend both meetings every year. As I'll describe in detail, I'll be sitting face to face with the world's most important, most powerful, and wealthiest investors.
But trust me... my point isn't to name-drop.
I'm writing today to teach you a much more important lesson. It has nothing to do with wealth, fame, or reputation. It isn't really even about track records, either. Something far more important is at stake. It's something you will never learn any other way.
As I often say, there is no teaching, only learning. You'll have to read carefully and keep an open mind.
What I'm offering today is by far the most extreme example you'll ever find of me doing everything I can – literally everything I can – to give you the information I'd want if our roles were reversed.
In this case, it's information nobody else wants you to have. That's what makes this offer unique.
As I said, I'll attend a small, private meeting in New York next month...
Alan Greenspan will be among the most important and well-known attendees. I'm sure you recognize his name. He is a former chairman of the Federal Reserve. During his tenure, he oversaw a huge boom in Wall Street's average leverage. These changes played a major role in causing the financial crisis of 2008.
I'm looking forward to meeting with Alan again, as I previously had a chance to sit down with him a few years ago in New Orleans. Back then, he was gravely concerned about the risk of a major looming inflation and the potential for a catastrophic collapse in the value of the dollar. I expect him to update this view.
I'll also speak with Paul Singer. I wouldn't be surprised if you haven't heard of him before...
Back in 1977, Paul set up a small, $1.3 million investment fund with money from his friends and family. His idea was similar to that of Carl Icahn's – find companies in trouble, buy their stock, and help improve their results. Since those early days, Paul has had just two down years... and he has produced average annual returns of around 13.5%.
For new investors who have only seen the boom times of the last few years, that might not sound like much. But earning those kinds of solid double-digit returns (with almost no down years) will produce a huge fortune over a 40-year span. Thus, Paul is worth several billion dollars personally. His firm – Elliott Management – currently has another $33 billion under management.
But even more important, Elliott Management is among the world's best distressed-debt investment firms. Paul keeps a substantial portion of the company's assets in corporate bonds – an area of the market that longtime Stansberry Research subscribers know is far less risky than stocks. As a result, his firm hasn't merely outperformed the benchmark S&P 500 Index by a huge margin, it did so with only one-third of the volatility. Said another way, even with one hand tied behind his back (with a lot of money in cash and bonds), Paul has beaten practically every other investor in the world over the last 40 years.
I'm a firm believer in hedging your investments in the stock market...
Anyone who has been with us for any amount of time knows my stance. And it's especially true for retired investors who can't afford another wipeout in the markets.
Like me, Paul believes that day of reckoning is close at hand. As he wrote in a letter to investors a few years ago...
Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth... When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.
It's rare to meet a major money manager who will speak so plainly about the kinds of issues that concern all of us. That's one of the main reasons I'm going to attend this meeting.
Another reason is Jim Chanos...
No other financial analyst in the world has ferreted out bigger or more important problems for investors than Chanos. He made his name by shorting and warning about telecom giant WorldCom. Next came his bet against energy firm Enron, which made him even more renowned.
His latest short, troubled drug firm Valeant Pharmaceuticals (VRX), wiped out dozens of major hedge funds, including a slew of famous value investors. I'm sure most people who had the opportunity to sit down with Chanos would ask him for his next big trade. And although I do expect to speak with him about his new ideas, I'll be listening closely for something else...
Like Chanos, I've had some success spotting troubled companies by looking for firms that are using new accounting conventions to aggressively inflate their earnings. There's never only one cockroach in the kitchen. As soon as one company has pushed through a new accounting rule, dozens of companies begin to abuse it. (See our research on wireless-telecom operators for a recent example.)
So at this meeting, the most important thing I'll be listening for (and asking about) is Chanos' take on any new accounting rules. No other investors will have this information... or know how to use it.
Another world-class short-seller will be there, too...
You probably don't recognize Marc Cohodes' name, but his most recent big success involved shorting major Canadian mortgage bank Home Capital. The stock fell 60% in one day this spring, about six months after Cohodes revealed its fraudulent practices at last year's meeting. Eventually, the stock fell more than 80% (from $32 to about $6).
But like Chanos, I'm interested in far more than Marc's latest solid short-sell idea. The housing bubble in Canada is a serious problem that's only beginning to develop. I'm interested to hear what he thinks about it today, and I know nobody has done more high-quality research on the subject.
I don't have time to mention everyone I'm likely to speak with or hear from while I'm at this meeting...
When I say that everyone who matters in finance will be there, I'm not exaggerating.
Among the luminaries I've spotted: JPMorgan Chase (JPM) CEO Jamie Dimon, Tiger Management co-founder Julian Robertson, Taconic Capital co-founder Frank Brosens, Vanguard founder John Bogle, Pershing Square Capital founder Bill Ackman, Duquesne Capital founder Stanley Druckenmiller, Greenlight Capital co-founder David Einhorn, billionaire real estate investor Sam Zell, and, as I mentioned earlier, Thiel and Volcker.
Jim Grant invites his subscribers (and only his subscribers) to this meeting. The entire "in the know" investment crowd comes from around the world to be there for it. I attend for some obvious reasons – to find good investment ideas and themes. But that's not the real reason.
Something else happens at these meetings that's incredibly important...
Almost every year, one (or more) of these top finance minds will speak about a big investment he's making where his assumptions are clearly and obviouslywrong.
Like when Ackman was pushing his turnaround at struggling mall retailer JC Penney (JCP)... Or when he first explained his short of multilevel-marketing firm Herbalife (HLF). Another good example was Einhorn's ill-fated big bet in buying shares of automaker General Motors (GM).
I attend Jim's meetings because they're the most exclusive events I'm invited to every year. I also attend because these guys are often very, very wrong. I've learned more from watching their mistakes (and avoiding them) than anything else I get from the conference.
How do I know when the speakers are wrong? It's easy. At lunch, during breaks, and at the cocktail parties and dinners that follow, I get to talk about the ideas that were presented with a few hundred of the world's best investors. They punch holes through the presentations that are a mile wide. And I learn a ton.
I'd love to share this experience with you. If I could personally take you to the conference next month, I'd sit next to you and explain the jargon and the ideas in the presentations that you're not familiar with. I'd introduce you to the folks at my table at lunch. During the breaks, I'd pull aside friends like Jim Rogers and talk about the ideas we've heard so far. You'd walk away with a level of understanding that you've never, ever had before. It's not what you learned in school. It's how the world really works.
I'd also introduce you to Jim Grant...
For many, many years, Jim wouldn't return my calls. He thought our newsletter advertisements were gaudy and "shouted" far too much. Like many intellectuals, he had no interest in fame. He was reluctant to even be mentioned in my newsletter.
However, over many years, I kept sharing our best work with him... and kept explaining my sincere interest in helping our subscribers become better investors.
After nearly 20 years of demonstrating this sincere goodwill, Jim recently became a subscriber to our newsletters at Stansberry Research. He has been reading... and he has been impressed with some of our ideas.
He even invited me to have lunch with him last December at the uber-private Racquet and Tennis Club on Park Avenue (the "R&T," for those of you in the know). Last week, Jim took me and a mutual friend out to dinner in Manhattan. We had a wonderful time together, and I pitched Jim on an unusual idea...
Jim, I wish my subscribers could join me at your conference. I know they would need some mentoring to fully understand some of the more advanced presentations... but I'd like to guide them through it.
Jim listened patiently and then objected, as always, to the idea of introducing the broad public to his newsletter or his private meetings. "There's no room for the public," he said. "They won't understand the complex presentations. We're not stock touts," he protested.
I thought about Jim's objections. And I thought I could overcome them...
So here's the deal we've made...
First, no one is welcome to join me at the conference who isn't a Grant'ssubscriber. That's non-negotiable. Like me, Jim puts his subscribers first. If you're not a subscriber, he's not interested in allowing you access to the meeting. I agree with that – subscribers have to come first.
Second, there really isn't enough room for everyone to attend. The Plaza Hotel, where the meeting is being held, can only accommodate a few hundred people. And the seats are going fast (for $2,150).
And obviously, I can't physically sit next to each of my subscribers and show them around in person. I could maybe handle three or four people, but after that I'd look like some poor tour guide at Disney World. We'd disrupt the entire meeting.
So we came up with a solution: Jim's staff does a great job of broadcasting the event to subscribers over the Internet. He charges $1,750 for subscribers to see each of the presentations and the question-and-answer sessions that follow.
I want to provide you access to the October 10 meeting, in the same way, for free.
Furthermore, I'll attend the meeting with several of my analysts. We'll pay the full cost to attend ($2,150 each). While we're sitting in the meeting, we'll take a lot of notes about each presentation. We'll send you these notes, in real time. We'll also document the "scuttlebutt" at the meeting about each of the investment ideas given. We'll tell you what we're hearing.
And following the meeting, we'll host our own Q&A webinar with Jim and our staff.
We'll make sure that all of your questions are answered. You'll leave the "meeting" with every bit of knowledge that I can glean.
What's the catch?
There isn't one.
I've known about the greatest secret on Wall Street – Grant's Interest Rate Observer – for more than 20 years. It's an expensive publication ($1,175 per year) that most people will find challenging to read. (I think it's the most beautifully written prose on finance available anywhere... but it's not really for novice investors.)
However, you will learn a ton by reading this publication – far more sophisticated things than you will learn anywhere else. I'm so dedicated to getting you access to this information that I'm going to attend Jim's conferencewith you and make sure you understand the opportunities that are being discussed. There's always at least one idea that's dead wrong, and we'll talk about that, too.
And again, to make sure everyone has every question answered, I'll host our own group's Q&A following the meeting to make sure you get everything you need from it. You just need to sign up for an e-mail-only subscription to Jim's newsletter.
All of this – access to the meeting (a $1,750 value), plus my staff's notes and comments (in real time), plus the Q&A after the meeting – will be FREE.
The only thing I can't negotiate on your behalf is the cost to subscribe...
Like I said, Jim is old-fashioned. He's charging a premium price for his work, which is a premium product. I admit that charging $1,175 per year for a newsletter is expensive.
But think of it this way: That's a little more than half as much as people attending the meeting will pay just to attend the meeting itself in person.
I've gotten you a red-carpet, VIP-level invitation to the most exclusive investment meeting in the world... for about half the regular price.
And remember, you'll get my real-time reporting from the event, including all of the scuttlebutt and my personal take on the presentations and the investment ideas.
Then, you'll have access to a private Q&A session with me, my staff, and the legend himself, Jim Grant.
Nobody else will have anything like this kind of access – all for about a little more than half of the regular price of the meeting.
And you'll get a year's worth of Grant's Interest Rate Observer, too.
This is unlike anything Jim has ever offered before...
And in all sincerity, he most likely will never do this again.
I've spent at least 10 years trying to build a relationship with Jim to bring you an offer like this... and this kind of advertising is completely foreign to him. He's worried it might harm the cache of his business or erode the special reputation he has on Wall Street.
Most of all, Jim genuinely doesn't want to disappoint anyone... or feel pressured to change the way he goes about his work. He's worried that "retail" investors won't understand or appreciate his newsletter, and he'll have to spend valuable time and resources dealing with refunds or cancellations.
That's why I've agreed to take all of the risk.
To get this deal done, I've agreed to shoulder the full burden of any refunds.
Attend the conference. See if I live up to my promise to make sure that you understand everything. Read the current issue of Grant's Interest Rate Observer. Read a few of the back issues. (I'll flag the most important ones for you.) Spend 30 days evaluating whether or not Grant's is everything I believe it to be – the most valuable newsletter about the financial markets published anywhere, by anyone.
If it's not everything I've claimed it would be... or if it's not right for you for any reason... simply call my office (not Jim's) and request a full credit toward a Stansberry Research product for every penny you've paid for Grant's.
Of course, this offer depends upon your good faith. But I'm willing to bet that when you see everything I've done to help you get access to this information and this experience, you'll treat me fairly in return.
One more thing...
I hope you can tell how important this is to me personally. Out of everything I've learned over 20 years in the financial markets, Jim's newsletter has been the single most valuable resource I've ever discovered. I personally read every issue the minute it hits my desk, and I never miss an issue. I've wanted to help introduce you to this incredible resource for more than 10 years, but could never convince Jim to help me make it happen. Now, finally, I have.
Please don't miss this no-risk opportunity to attend the world's most exclusive financial meeting and to get a year's worth of the world's most exclusive financial newsletter.
I'm willing to personally guarantee your satisfaction. You have nothing to lose. To take me up on this offer, click here.
Regards,
Porter Stansberry