July 12, 2018 A publication from Stansberry Research

Editor's note: The Stansberry Research customer service team is now observing summer hours. During July and August, you can reach the Customer Service Center from Monday through Thursday, 9 a.m. through 5 p.m. Eastern time. Normal hours will resume in September.


One Reason This Precious Metal Is About to Soar

By Brett Eversole


2018 hasn't been kind to precious metals...

Gold's down 4%... Silver has fallen 6%... And platinum is down a full 10%.

It's been ugly. And we don't want to bet on any of these metals until momentum reverses (or we could have a front-row seat to even further losses). But big losses sometimes set the stage for future gains.

In the case of one of these metals, we could see huge gains when prices reverse. The reason is simple...

A certain group of investors hates this precious metal today. Sentiment is more negative than it's ever been. And that means the potential upside could be massive when this situation turns around.

Let me explain...


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Want to make money in the markets?

Then buy what others can't stand. Buy what folks absolutely hate the idea of owning.

Think gold in 2003... or U.S. stocks in 2009... or Chinese stocks in 2016.

If you can consistently buy what others are afraid of buying, you'll probably make a lot of money.

That's the situation we have in platinum right now... Futures traders have hit record bearishness on platinum based on the Commitment of Traders (COT) report.

The COT report gives us real-time insights into what futures traders are doing with their money. We can see if they're bullish, bearish, or somewhere in between. And when futures traders all agree, the opposite tends to occur. So it creates a strong contrarian signal.

Right now, futures traders are more bearish on platinum than they've ever been. Take a look...

This low reading means futures traders are betting on lower platinum prices. And it's no surprise that's what they're doing right now... Betting against platinum has been the right move in recent years.

The metal is down around 40% over the past five years. And it recently hit new multiyear lows.

Can the downtrend continue? It sure can – in the short term. But the COT report shows us that more folks are bearish today than ever before. And that means a rally is likely sometime soon.

This rally could begin in three weeks or three months. We can't know exactly when it'll start. But it will happen. With futures bets this bearish, there simply aren't many more folks out there to push prices lower. The rubber band is stretched... and it's just a matter of waiting for it to snap back.

More important, we'll almost certainly see huge gains when that happens. The last time sentiment was close to this negative was in late 2008... just before a major platinum rally. Prices more than doubled in less than three years.

We can't know for sure if prices will double from here. And we can't know exactly when the uptrend will begin.

We do know that futures traders hate platinum now more than ever. And that means we'll likely see big gains once the reversal takes hold.

Good investing,

Brett Eversole

Further Reading

Hated assets can be great investment opportunities. Recently, Dr. David Eifrig explained why you should "buy when there's blood in the streets" – and shared where he's seeing potential today. Learn more here: Watch These Hated Stocks for a Buying Opportunity.

Steve and his team like to bet on what investors hate. Yet that's just one piece of the simple setup they look for in a buying opportunity. Read more about this strategy – and how it relates to the broad market – right here: How to 'Call' the Markets Correctly.

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Market Notes

A 'ONE-TWO PUNCH' FOR BIG PROFITS

Today, we're revisiting a company that knows what you crave...

Longtime readers know we often highlight companies that sell addictive products. These businesses tend to enjoy steady sales and profits as their customers come back for more. Coffee and fast food are some of the most popular treats. Today, we're looking at a company that does both...

We're talking about Dunkin' Brands (DNKN), the holding company that runs fast-food chain Dunkin' Donuts. Its Dunkin' Donuts restaurants serve coffee, donuts, and other breakfast dishes to more than 3 million customers every day. That's a lot of people willing to indulge in a sweet tooth... And the company's bottom line shows it. In the first quarter of 2018, net income reached $50.2 million, up 13% from the same period last year. And adjusted earnings beat analyst expectations.

As you can see in the chart below, shares are soaring. They're up more than 30% over the past year and recently hit a fresh all-time high. As long as folks stop for coffee and donuts in the morning, this stock should continue higher...

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