The Best Way to Profit From Trump's White House
Editor's note: Big changes are coming to the U.S. economy.
Are you prepared?
In today's Masters Series essay – excerpted from a brand-new Stansberry's Big Trade special report – Porter and his team of analysts explain how to maximize your gains as the "Deep State" manipulates the stock market to a degree we've never seen before...
The Best Way to Profit From Trump's White House
By Porter Stansberry and the Stansberry's Big Trade team
As we said when we launched Stansberry's Big Trade, this service is not about investing. It's about speculation.
To us, that has specific meaning... Speculating is an attempt to profit from temporary market extremes... especially those created by government attempts to manipulate markets and industries.
As we point out in our Big Trade Primer...
In every mania, speculators have identified how government actions have distorted the markets... and then positioned themselves to earn massive profits when, inevitably, market forces overwhelm the government's intervention.
This is exactly what a handful of speculators did 10 years ago... when decades of flawed government policies pushed U.S. home prices to absurd levels.
This week, we speculated on the proposed border tax. We speculated on the collapse of the losers from the potential new tax proposal... and bet on the winners at the same time.
We've developed a portfolio with a list of companies that will benefit from the changes we outlined at the meeting... along with a list of companies that these policies will hurt.
To do so, we're using long-dated put and call options.
Don't let the idea of trading options intimidate you. We detail how options work in our Big Trade Primer. The concept isn't hard to understand... As we explained in our report, put options work like this:
As you might know, many stock market investors use the options market to protect (insure) themselves from volatility. Put options give the holder the right, but not the obligation, to sell a specific stock at a predetermined price. That's called the "strike price." If you expect a stock's share price to go down, you buy puts. That lets you determine the lowest price you're willing to accept sell your shares.
Put options also have a set expiration date. That limits the window of time when you can exercise your right to sell.
You can use puts to insure the value of stocks you already own. Buying a put guarantees the price you can get for selling your shares, regardless of their price on the open market. But sophisticated investors can also use puts to speculate on stocks they don't own...
If you think a stock is likely to fall, you can buy a put option. If the stock price falls below the strike price, you can buy shares on the open market and immediately exercise your option to sell them for more than you paid. Or you can sell an option and close the position at any time prior to expiration. At Stansberry's Big Trade, we will be closing out positions and taking profits on our in-the-money positions before expiration dates so the options aren't exercised.
Call options are the opposite of puts. They allow investors to profit from buying stocks at a specific price by a specified time. If you think a stock is likely to rise, you can buy a call. If the share price rises above the strike price, you exercise your option to buy – or "call" – the stock at the strike price and immediately sell it for more in the open market. As with put options, we will be taking profits on our in-the-money positions before expiration dates so the options aren't exercised.
We'll be walking you through each trade step by step in Stansberry's Big Trade.
Remember, we aren't making safe bets on stocks that you can buy and hold forever. We're speculating. These aren't positions that you bet the farm on. They are risky. But the potential upside can be huge.
In our first recommendation, we speculated on a loser by betting on an end to NAFTA.
The U.S. imported $294 billion of goods from Mexico last year. And we imported another $278 billion from Canada. Combined, the two countries make up around 26% of total imports into the U.S.
Under NAFTA, companies can bring these goods in free of any taxes.
Naturally, that has encouraged huge volumes of cross-border traffic, as companies make goods where their costs are lowest and ship to markets where they can fetch the highest prices. And right now, one company has enjoyed huge benefits from bringing these goods across the border.
But under the Trump-Ryan tax reform... the border adjustment tax ("BAT") would change all that.
Under a BAT, companies would bring in fewer goods from these countries. Demand for this company's services could plummet.
Just as we explained what the losers from the BAT will look like, the winners will have the opposite traits – that is, they'll be exporters. So for our second recommendation, we bet on a company that stands to gain the most from exporting American energy.
We're bullish on U.S. oil production.
U.S. oil production has doubled since the lows of a little more than 4 million barrels per day in 2008.
Even after oil prices crashed from more than $100 a barrel in 2014 to around $50 a barrel today, production remains just 8% off the highs seen in 2014... And they're at levels not seen since the mid-1980s.
Natural gas has followed the same story. Last year, we produced more than 26 trillion cubic feet (tcf). A decade ago, we produced less than 20 tcf.
Plenty of oil and gas is sitting right beneath our feet.
Historically, Saudi Arabia has been the most dominant oil producer on the planet... which allowed the Saudis to control the price of oil. Moving forward, with the development of shale plays, the U.S. will become the leading producer. We expect that will be the case for the next 50 years.
We already export large amounts of natural gas liquids (think propane) and refined products (like jet fuel). And we just started exporting crude oil. We expect that trend to continue.
That's great news for the American economy... And it's great news for companies that have the necessary infrastructure in place to move all the oil and gas to where it needs to go.
Porter Stansberry and the Stansberry's Big Trade team
Editor's note: Porter and the Stansberry's Big Trade research team have identified a dozen companies set to thrive or collapse under President Trump's tax agenda. And investors who buy now could set themselves up for gains of 10 or even 20 times their money as this unfolds. Learn how to get started right away by clicking here.