I remember the last time Porter got this excited about an idea…
We were in his office in late 2008… during the depths of the financial crisis.
I had just joined Stansberry Research in Baltimore. And volatility in the market was going crazy. Porter wanted my opinion on the markets, and possibly a new service he was considering launching.
The strategy that Porter and I discussed became the cornerstone for the Put Strategy Report, which was published from October 2008 to June 2010.
Porter and I spent hours analyzing numerous stock ideas for use in his new advisory. Due to the market’s incredible volatility, option premiums skyrocketed… And selling those premiums was a terrific opportunity for folks willing to try.
In the initial months, I was the option guru he regularly turned to for ideas on things like strike prices and expiration dates to use in his portfolio recommendations. We worked diligently to use puts as a way to purchase cheap stocks at even lower prices.
For example, in October 2008, we started discussing businesses that traded below book value. One interesting company to pop up during our screening was the company Annaly Capital Management (NLY).
It uniquely held liquid assets that were 100%-backed by the U.S. government. As a so-called “virtual bank,” the company could sell all its assets, pay off its debt, and have money left over to pay shareholders over and above the value of the stock.
In Annaly’s case, we had a stock worth $13. With volatility high – and premiums fat and rich – we decided to sell puts at a strike price of $10 for $1.50. This meant our cost in the stock would be $8.50 if we were in fact “put the stock” (when the owner of the put forces us to abide by our obligation to buy the stock at $10).
This was an obvious deal… to buy an asset for $8.50 at a 35% discount from its liquid book value of $13. Porter wrote back then: “As far as I can tell, this trade carries literally no risk at all.”
He was right.
The recommendations in the Put Strategy Report were absurdly profitable… 156% in Patterson-UTI Energy (PTEN), 147% in MGM Resorts (MGM), 125% in Take-Two Interactive (TTWO), 124% in Annaly Capital Management (NLY), and 112% in Rowan Companies (RDC).
As Porter wrote in his 2010 Report Card:
We sold 23 puts between the launch of the service and the end of 2009. We only lost money on two trades, for a win rate in excess of 90%. The average gain (based on 20% margin) was 54%. And we held these trades on average for less than 100 days, meaning we were making more than 150% annually on these trades.
In the depths of the worst financial crisis this side of the Great Depression… with volatility at super-elevated levels… Porter was essentially recommending selling expensive insurance on stocks that were worth far more than they were currently trading.
Fast forward eight years, and Porter is even more excited about his latest options strategy…
Today, with the market making new all-time highs… and volatility at new lows… Porter is recommending the yin of the yang to those put-selling trades… He’s recommending buying cheap insurance on stocks that have so much debt they are practically guaranteed to keel over when this credit-default cycle begins in earnest.
He’s calling it Stansberry’s Big Trade.
I’ll give you my take on Porter’s strategy tomorrow, but before I do…
Tonight, you must listen in when Porter explains it firsthand. The webinar is free.
I’ll admit that the timing of this trade is going to be tricky. The biggest advantage Porter has is that he’s going after the worst-of-the-worst companies… This strategy is like a lion on the savannah, hunting the weakest and slowest gazelle.
As a result, I expect the potential gains will be incredible. I will be very surprised if Porter doesn’t end up with at least one 1,000% Big Trade winner.
And if we have a major market crash, he will likely end up dominating the entire Stansberry Research Hall of Fame… the list of the 10 all-time highest-returning closed positions across all Stansberry portfolios. We list it at the end of every Stansberry Digest. (The current No. 1 pick goes to Steve Sjuggerud’s trade on Seabridge Gold – with a 995% return.)
If you don’t listen in tonight, you will miss the most valuable offer Porter will make this year. I have it on good authority that the discount offered only to webinar attendees will be the lowest price at which the Big Trade will ever be available.
Here’s to our health, wealth, and a great retirement,
Dr. David Eifrig and the Retirement Millionaire Daily Research Team
November 16, 2016