|Home||About Us||Resources||Archive||Free Reports||Market Window|
Tuesday, July 7, 2015
"What's your top idea right now, Steve? What are you doing with your own money?"
The answer is simple: U.S. real estate.
Right now, I have a greater percentage of my net worth invested in the U.S. residential property market than in any other asset class – by far. (I'm not even including my home when I say this.)
The opportunity is irresistible. And more importantly, it's a perfect example of how I make money.
Let me explain...
For more than 20 years, I've built my reputation by finding obscure investment ideas anywhere on the planet – hopefully before anyone else.
I'm not purposely trying to find weird ideas... I'm just looking for the best ideas.
And right now, the best idea is in my backyard – Florida real estate.
You might be surprised to hear that I had never invested in U.S. real estate before the recent real estate bust... I'd always thought U.S. real estate was too expensive.
Then came the biggest real estate crash since the Great Depression... House prices in some cities fell by more than half – including here in Florida. And raw land prices (land that would someday become a neighborhood), fell much further (particularly around here).
At the bottom of the crisis, for the first time in my life, I swooped in and started to buy U.S. properties as an investment...
The first major property I bought was a few hundred acres of land in Florida... I bought this land from a bank for 93% less than it was under contract for just three years before.
When I bought it, the real estate market was DEAD. Nobody was buying a home, so nobody needed to build a home. And if nobody needed to build a home, then nobody needed this land.
Fast forward three years to today... The situation is the exact opposite. We have plenty of home buyers – but no homes. Whether people are renting or buying, they need a place to live.
It's simple... no supply and a ton of demand is a recipe for higher prices. The time is right to make money in U.S. homes.
Last month, I signed a contract with a developer to put a few hundred homes on the land I bought three years ago. I've never been a developer before. And I probably won't be a few years from now (this type of deal is risky, and it ultimately ties up your land and money for many years).
But now is an incredible moment in the housing industry. You don't have to become a developer, but you need to get on board.
Tomorrow, I'll show you exactly why this opportunity is so good... And why I continue to put my own money to work in U.S. real estate right now.
If real estate is one of Steve's top ideas right now, why is he sharing it? Because it's in our best interests to share our best ideas with you. Steve says this principle has turned into "far more dollars for us in the long run than if we'd simply kept our best ideas for ourselves." Learn more right here.
One of the most common questions asked of the investment-advisory business is: If you're so smart about the financial markets, why are you writing a newsletter? Stansberry Research Editor in Chief Brian Hunt offers some insight on this question in this classic interview.
THE BEAR MARKET IN IRON ORE CONTINUES
Today's chart is an update on the ugly bear market in iron ore...
Regular readers know we keep a close eye on the natural resource sector, which is capable of huge booms and busts. If you get into the booms early and avoid the busts, you can make big money in natural resources. And right now, iron ore is in "bust" mode...
Slowing global demand has hurt the important industrial metal, which is used to make steel. Iron ore was the worst-performing major commodity last year, and that downtrend is showing no signs of reversal. Prices are down more than 70% over the last four years... from more than $180 per pound in 2011 to around $50 today.
Worse yet, two of iron ore's biggest producers – BHP Billiton (BBL) and Rio Tinto (RIO) – are expanding production to "make it up on volume" and force smaller, less competitive mines to close. These giants are producing at a loss because it's either too expensive to close a mine, or they think they can outlast their struggling peers and have plenty of supply available for when the cycle picks up again.
As you can see in the chart below, the cycle hasn't started to pick up yet... Shares of both companies are down 25%-plus over the past year... and just struck new 52-week lows this week. Continue to stay away from these two companies until the big trend changes direction.