I remember election night in 2024 so clearly. After 4 years of Biden&rsquo;s tyranny, censorship, dementia, and bad policy, Republicans and Independents turned out in force to vote for Trump.
I was watching Tucker Carlson&rsquo;s livestream from Mar-a-Lago, and as it became clear that Trump was going to win, he and Elon Musk were ecstatic. It was contagious. I was ecstatic too.
The Biden admin had trampled all over the Constitution, working with big tech to crush dissent online.
Anyone questioning the official Covid narrative was banned across Facebook, Twitter (pre-Elon), Youtube, and more.
President Trump himself was banned from social media as his first term ended. This wave of censorship, directed by the government, was a blatant violation of the First Amendment.
Free speech was legitimately dying.
This is a big part of what powered Trump&rsquo;s landslide victory. And to his credit, these censorship policies were quickly reversed.
But Trump&rsquo;s second term hasn&rsquo;t gone the way some of us hoped.
<h2 class="centered subhead" style="text-align: center;">The Changing Face of MAGA</h2>
By now, most people have accepted that starting a war with Iran was the key factor in the midterm massacre (even JD Vance, as we&rsquo;ll discuss shortly).
The war caused a portion of Trump&rsquo;s base, and many of his key influencers, to abandon ship. The Daily Caller created a graphic which sums up the shift.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2a3vrA3Zn1uFLbnZXbSlku/c3d9d950381c979d97a7022c139a9247/dr-img1-11-05-26.jpg" alt="image 1" />
Trump&rsquo;s anti-war supporters felt betrayed. I certainly did. He swapped us out for neocons. And seemed happy about it.
It was exactly what he had campaigned against.
<h2 class="centered subhead" style="text-align: center;">JD Vance&rsquo;s Post-Mortem</h2>
Yesterday, JD Vance wrote a <a href="https://x.com/JDVance/status/2118004988433641835">long post on X</a> (Twitter). In it, he discussed what went wrong in detail.
And he didn&rsquo;t pull punches. I encourage everyone to read the whole post, but here&rsquo;s the important part:
<blockquote>
Another pollster&mdash;one of the smartest people I know in politics, told me yesterday we&rsquo;d lose the generic ballot by 13 points. I felt negative going into Tuesday, but even I was shocked by this. In his polling, he saw that a lot of Trump 2024 voters were angry and planning to vote for Democrats. He asked those voters who had abandoned us what would cause them to come back on our team. The top four answers, accounting for nearly all of the responses were:
1) End the war
2) Focus on cost of living/inflation
3) Put America First
4) Change our relationship to Israel
Our voters showed up. And the above four reasons are why many of them voted for Democrats.
</blockquote>
Better late than never. But can the GOP regain its lost supporters by 2028? It&rsquo;s going to take serious changes.
<h2 class="centered subhead" style="text-align: center;">Losing the Dissident Vote</h2>
By starting a war with Iran, Trump lost the right-wing dissident vote.
He then dismissed inflation and affordability concerns. It was worth it, he told us.
As millions of people couldn&rsquo;t find a decent job, or pay their rent, his administration repeatedly <a href="https://dailyreckoning.com/post/the-gops-affordability-problem">dismissed</a> their concerns.
Iran, inflation, and how Trump handled it is why Republicans lost so horribly. Pretty simple. The sooner Republicans fully accept this, the better.
The silver lining here is that neocons and neolibs have completely blown their credibility. Politicians are beginning to realize that listening to their advice on foreign policy is electoral suicide.
Will the GOP recover and make the necessary changes? I hope so. Paying even higher taxes, watching DEI take back over, censorship, and endless immigration sounds absolutely terrible.
If Democrats win the presidency in 2028, it&rsquo;s going to be a very tough road. The damage they will do will echo for decades.
Sure, the left is sure to muck things up terribly again. That will help the GOP in the next presidential election.
But that will only go so far. The GOP needs to get its own house in order, quickly. Pay attention to right-wing dissidents and Independents. Ignore the neocons completely, on every issue. That&rsquo;s the lesson.

dr-hero-img-11-05-26

mobile masthead DR

Hard-hitting economic news and market commentary. Each issue features biting market coverage, expert commentary, and in-depth analysis… along with a warm dose of humor and some skepticism.

Daily Reckoning

Revenge of the Dissidents

Somehow, Apple has regained its crown.
With a market cap of $4.84 trillion, it is once again the largest company in the world.
But frankly, this stock looks a bit mushy. Under its shiny silver skin, there are worms tunnelling.
In its latest quarterly report, Apple posted 12% YoY revenue growth. Not bad, not great. But it&rsquo;s only forecasting 7-10% growth over the next year. Growth is decelerating.
The valuation is where I get completely lost. Today AAPL trades at 37x earnings (P/E). And it&rsquo;s valued at a shocking 10.3x revenue (price-to-sales).
The only time in its history Apple had a higher price-to-sales ratio was on its IPO day in 1980. Back then, when the company was worth $1 billion, it traded at 13x sales. But revenue was growing 145%! 10x higher than today.
Meanwhile the dividend yield is now a tiny 0.32%. The company spends most of its cash flow on share buybacks, which helps keep the price inflated.
This is an extremely rich valuation. If I buy a stock priced like that, I expect big growth going forward. At this point, Apple isn&rsquo;t going to deliver that.
I built the table below to show just how crazy things have gotten. During Apple&rsquo;s rapid iPhone growth phase, the company was far cheaper than today.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/Sl9DUjTGeNBY2ZEs1VHSI/66c2a3aabbdd21956a658863cfcc1254/dr-img1-11-03-26.jpg" alt="image 1" />
So in 2011, when Apple was growing revenue at 66% a year, it traded at 14.5x earnings. Back then, the stock traded at 3.5x revenue.
In 2011, the company was growing 4.4x faster. Yet it was far cheaper.
Here&rsquo;s a longer-term view of Apple&rsquo;s price-to-sales ratio.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6NexKivYpYjin6K2bR7U7V/bf2fcb39c27ddfd288eb8d0c395a3d62/dr-img2-11-03-26.jpg" alt="image 2" />
Source: <a href="https://www.macrotrends.net/stocks/charts/AAPL/apple/price-sales">Macrotrends</a>
As you can see, before Covid, Apple always traded at a fairly reasonable valuation (under 5x revenue). But ever since, the old valuation rules have been thrown out the window.
With only 12% annual revenue growth, and little innovation, why are people paying such a premium to own this company?
<h2 class="centered subhead" style="text-align: center;">Tech: The New Safe Haven?</h2>
It seems to me that investors are treating big tech as the new safe haven. These stocks have done so well for so long, that many people have come to view them as the safest asset in the world.
Take a look at the chart below, shared by WisdomTree&rsquo;s Jeff Weniger a few months back:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2pYUfuPY3S2jH44bCV3ere/492b00600bc4ffae8713114562c1fbd7/dr-img3-11-03-26.jpg" alt="image 3" />
So 51% of the S&amp;P 500 trades at more than a 10x price-to-sales ratio. This is not normal, or healthy.
A 10x sales multiple is extreme. When you buy a mature stock at a valuation like this, be prepared for disappointment unless everything goes perfectly.
<h2 class="centered subhead" style="text-align: center;">&ldquo;What Were You Thinking?&rdquo;</h2>
Sun Microsystems was one of the hottest hardware stocks during the dotcom boom. From its 1986 IPO to the peak in 2000, it soared 257x.
It was a beautiful growth story. But eventually investors got overly excited and bid the shares up to silly prices.
After the dotcom bubble burst in 2000, Sun shares collapsed 96%.
In an interview with Business Week, Sun&rsquo;s CEO Scott McNealy admonished shareholders for buying the stock at such a ridiculous price. It&rsquo;s one of the most fascinating pieces of the entire dotcom bubble saga.
And it really spells out exactly what it means when you buy a stock at 10x revenue:
<blockquote>
At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders.
That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees.
That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&amp;D for the next 10 years, I can maintain the current revenue run rate.
Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don&rsquo;t need any transparency. You don&rsquo;t need any footnotes. What were you thinking?
</blockquote>
So. Here we are, with over half of the S&amp;P 500 trading at more than 10x revenue.
Human nature hasn&rsquo;t changed since the dotcom boom. It just took a while to forget the lessons we learned from that crash.
This is how the cycle works. Breakthrough, boom, bubble, bust. Rinse, forget, repeat.
Investors are still ruled by the same animalistic spirits. We are impulsive, emotional, and vulnerable to FOMO.
Every so often, we have to re-learn the bubble lesson. It&rsquo;s simply part of the game.

dr-hero-img-11-03-26

A Mushy, Wormy AAPL

Thursday will go down in history as a turning point in the AI story.
The biggest crypto hack in history took place.
Binance, the massive crypto exchange, was robbed for $6.3 billion. Fortunately, Binance is one of the most profitable companies in the world. So they&rsquo;ll be able to cover the damage from their own pockets.
But the implications are stunning. Elon Musk summed it up cleanly on <a href="https://x.com/elonmusk/status/2115935053347786773">X</a>:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/48ZvSSSgOkNR3FFxW49pFn/3289a409445a60546d2d69b58fc7c867/dr-img1-11-02-26.jpg" alt="image 1" />
The &ldquo;zeroday&rdquo; Elon refers to is a zero-day vulnerability. These are undiscovered bugs in computer systems which can be exploited.
Zero-days used to be a rare commodity. Hackers would sell them for crypto on the dark web. Intelligence agencies would stockpile them, and deploy only when needed.
A zero-day was once a precious thing. It can often only be used once. After the exploit is discovered, it gets fixed.
But today almost anyone can discover a zero-day using AI.
This trend isn&rsquo;t going away anytime soon. The shocks will ripple around the world over coming months and years.
You&rsquo;ve heard about &ldquo;vibe-coding&rdquo;, the ability for anyone to create software. Get ready for &ldquo;vibe-hacking&rdquo;.
<h2 class="centered subhead" style="text-align: center;">The No-Guardrails Loophole</h2>
Modern AI models are hacking geniuses. In an hour, a swarm of agents can accomplish what previously would have taken months for the world&rsquo;s best hackers.
Because of this, every big AI company builds its models to refuse illegal actions, including hacking. These guardrails work pretty well.
If you tell a normal AI agent to hack a website, it will refuse. &ldquo;Sorry, I can&rsquo;t help you with that&rdquo;. It might even trigger a manual review. If you look suspicious, the company can refer the matter to law enforcement.
But there&rsquo;s a loophole. By now you&rsquo;ve probably heard about &ldquo;open-source&rdquo; AI models. These are agentic AIs that anyone can download, modify, and use on their own private servers.
Open-source models start out with guardrails. The same &ldquo;sorry, I can&rsquo;t help with that&rdquo; rules are baked-in.
But devious minds have figured out how to remove those guardrails. In essence, they perform &ldquo;brain surgery&rdquo; on the AI, and remove its moral compass.
So today you can download an open-source model, like DeepSeek&rsquo;s 4.1 Flash, with absolutely no guardrails. This is&hellip; a disturbing development.
It&rsquo;s truly a hacker&rsquo;s dream. A model nearly as powerful as the best American ones, with absolutely no rules. Tell it to hack a company, and it will try its best. And probably succeed.
These models are known as &ldquo;abliterated&rdquo; AIs. And you&rsquo;ll be hearing about them a lot going forward. There&rsquo;s a 99% chance they were used in the recent high-profile hacks.
<h2 class="centered subhead" style="text-align: center;">Law and Order</h2>
Around the world, hackers are toasting their good fortune. A powerful new toolkit has been handed to them on a silver platter.
Abliterated open-source models are the main course. A feast for bad actors. I call them rogue agents.
And once things get bad enough, governments will step in. It will be all-hands on deck to stop the cyber-pandemic.
Soon, I believe digital IDs will be required to use AI agents. A whole new security framework will need to be constructed. Eventually, you may need to use a digital ID to access the internet at all. Everything you do online will be tied to your real identity.
Governments may even attempt to ban open-source models. Possessing abliterated versions of them certainly will certainly be outlawed. But enforcement will be the tricky part. It will require invasive digital surveillance.
So there will be a price. We will pay with our privacy and liberty. And if the cybersecurity situation gets as bad as I expect, most people will gladly pay it.
The age of a free, open, and anonymous internet will end. Sadly, I don&rsquo;t see any way of getting around it.
But to get to that stage, first we&rsquo;re going to have to go through some trials and tribulations. The hacks will continue until things hit a breaking point. Then global governments will step in, and everything will change.
Later this week, we&rsquo;ll discuss simple measures we can take to protect ourselves. Because for now, it&rsquo;s still the wild-wild west out there.

dr-hero-img-11-02-26

Rogue Agents

By now you all know about Nvidia CEO and founder Jensen Huang&rsquo;s situation.
This is the biggest story in the world, so we won&rsquo;t rehash it. Instead let&rsquo;s explore the why now.
Back in May of this year, a short seller reported much of the same story in a widely-read report.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1deKq90U9InsuzAo0w6e3q/94309bc506daac5efe67ecfab128fa55/dr-img-11-10-26.jpg" alt="image 1" />
<a href="https://x.com/CulperResearch/status/2054623784452120917">Source: X</a>
They nailed most of the story back then. The relationship with Alice Huang, smuggling GPUs to China, etc.
And few mainstream outlets picked it up.
So why is this suddenly breaking news right now?
To explore it properly, we first need to cover some key aspects of Jensen&rsquo;s relationship with China.
<h2 class="centered subhead" style="text-align: center;">One Chipmaker to Rule Them All</h2>
When an AI company builds a model, they do it on a specific piece of hardware. Nvidia GPUs are the most popular worldwide.
Nvidia has constructed a powerful software system around their world-leading hardware. This is a big part of their moat against competitors.
Builders become experts in the entire Nvidia ecosystem.
Nvidia has become the industry standard. And Jensen doesn&rsquo;t want anything to interrupt that. Ever. It&rsquo;s the most profitable product in history.
Nvidia&rsquo;s greatest fear has always been China building their own competing system. Because we&rsquo;ve seen what happens when China runs this playbook.
Chinese hardware giant Huawei was one of the first companies to begin building 5G telecom equipment at scale. They rolled it out throughout China first, then began exporting it to the world. Today Huawei is now the largest 5G network equipment provider in the world, by far.
Huawei is doing the same thing with AI hardware. As Jensen said in June of 2025:
<blockquote>
&ldquo;Once [China] has built that entire complete [AI] stack, they&rsquo;ll export it as quickly as you could imagine.&rdquo;
</blockquote>
China&rsquo;s AI hardware, mostly made by Huawei, is still not as good or efficient as Nvidia. But they&rsquo;re cheaper, and improving rapidly. They are set to become an extreme threat to American chip dominance.
Nobody else in the world builds at the scale China does. So now that they&rsquo;ve entered the AI hardware race, Jensen is concerned. He should be.
For many years, China was happy to buy American equipment. But when Biden cut China off from Nvidia GPUs in August of 2022, they started a Manhattan-Project-scale effort to accelerate their own chip ecosystem.
And they&rsquo;ve made a disturbing amount of progress.
<h2 class="centered subhead" style="text-align: center;">Discrediting Jensen</h2>
Fundamentally, I believe Jensen was right. The American economy would have been better off if we never stopped selling GPUs to China. Sure, a bunch of Nvidia GPUs were smuggled into China, but millions more would have been sold without the ban.
The world&rsquo;s AI developers would have stayed loyal to Nvidia. It&rsquo;s a great system, and it works. We forced them to focus on their own.
Without the Nvidia export restrictions, China wouldn&rsquo;t have had such a strong incentive to build their own. Now they&rsquo;re building their own advanced chips, which work well, and will be selling them to the entire world within a few years.
The goal was to cripple China&rsquo;s AI progress. It didn&rsquo;t work.
As a result, Nvidia and the entire American AI sector is about to get a lot more competition.
Huawei and other Chinese companies have tens of thousands of their top hardware engineers working nonstop on this. Huawei is a particularly strong up-and-coming competitor. They have global scale, and compete directly with:
<ul>
<li>Nvidia</li>
<li>Cisco</li>
<li>Apple</li>
<li>Dell</li>
<li>Tesla</li>
</ul>
And the disturbing part is, their products are really good. Huawei is a dangerous company to American interests. And all our efforts to kill them have failed. They just keep getting stronger and leaner from the hardship.
The current plan, hatched by the Biden admin, is failing miserably.
<h2 class="centered subhead" style="text-align: center;">Spycraft?</h2>
Was the woman Jensen cheated with a spy? I&rsquo;m skeptical. He&rsquo;s too smart for that, and even if she was, he&rsquo;d never reveal secret info to a potential competitor.
The only source on the claim she was &ldquo;passing information to Beijing&rdquo; is the New York Times, citing unnamed U.S. officials.
I think she was probably just a middleman, out to make money. Her company, Megaspeed, bought Nvidia GPUs supposedly for use outside China, and made them available to Chinese companies.
Black markets are highly profitable, after all.
Everybody knew GPUs were being smuggled into China, or bought by Chinese companies and operated overseas.
But officials looked the other way, because it was great for Nvidia and the broader U.S. stock market.
At one point, the tiny island of Singapore accounted for 22% of Nvidia sales. Nobody believed a country of 6 million people was buying 22% of global GPUs. That would be completely ridiculous.
Lots of us noticed this fact, and next quarter, guess what? Singapore was no longer listed as a separate line item on Nvidia reports. So the data disappeared.
The smuggling was still happening, of course.
<h2 class="centered subhead" style="text-align: center;">The Real Purpose</h2>
Jensen was the biggest advocate for selling U.S. chips to China. He can no longer do that.
They&rsquo;ll accuse him of being a Chinese plant, a spy, contaminated by exposure.
So it looks like somebody wanted to stop Jensen&rsquo;s advocacy for tech trade with China. And they probably have, for now at least.
The question is: What&rsquo;s the plan? China is building their own AI hardware, and it&rsquo;s pretty darn good. Roughly equivalent to Nvidia&rsquo;s H200, which was released 3 years ago. That&rsquo;s still a very capable piece of AI hardware. And China has none of the electricity shortage concerns we do.
So once Huawei and other Chinese players scale up&hellip; It&rsquo;s going to be ugly. They will drive hardware prices into the dirt (like they have with steel, cars, solar panels, and much more).
All because we thought we could cut off China, and cripple their AI efforts. Mission status: failure.
Yes, China is a threat to our AI companies. But attempting to stop them from buying our products has backfired spectacularly. And it will only get worse if we do it again.
Unfortunately, I think the Jensen cheating/spy scandal is an attempt to further restrict exports to adversaries.
It will be bad for American AI companies. Especially Nvidia, which may eventually lose 10% or 20% of its sales. As a result of these policies, NVDA has gained a massive, powerful competitor in Huawei.
In China, a new AI hardware ecosystem is being born. Mostly thanks to short-sighted American trade policies which backfired.

TTF-issue-111026-1

Nvidia’s Worst Fear is Here

Intel (INTC) is down 31% today as I write this. Brutal.
Not even during the dotcom bust did Intel have a 1-day fall like this.
And to be clear, the stock is still up 60% over the past year. Impressive. But from its June peak, INTC is now down 55%.
Unfortunately, these types of selloffs can indicate there&rsquo;s more downside ahead. Yes, AI stocks might bounce on Monday. But most of them will still be richly priced, and fragile.
We must recognize this could be the beginning of a real crash.
Valuations, as measured by CAPE ratio, are near the peaks of the 2000 dotcom mania. Debt is soaring. Interest rates are rising. And we&rsquo;re starting to hit fundamental limits on data center expansion.
<h2 class="centered subhead" style="text-align: center;">Changing Fundamentals</h2>
The AI boom has been amazing for U.S. tech. Intel was late to join the party, but has done incredibly well over the past 18 months.
The boom has driven strong demand for its data center CPUs.
But AI is driving up prices for computer parts, especially memory. This is spiking hardware costs. So people and businesses are buying fewer PCs and tightening their belts. This is one of the key reasons Intel fell so hard today. They also issued miserable forward guidance.
These types of booms have all sorts of complex effects on the economy. It&rsquo;s very hard to model them all, because as we can see, nearly every Wall Street analyst missed what was happening at Intel.
Bad news: it&rsquo;s not just Intel.
<h2 class="centered subhead" style="text-align: center;">Broader Problems</h2>
The whole AI trade looks shaky. First of all, it&rsquo;s all fueled by unprecedented piles of debt.
And interest rates are rising. That creates an obvious problem for hot AI stocks. They need to raise more debt to complete their projects, but yields are becoming problematic. Coreweave, a leading &ldquo;neocloud&rdquo; which rents GPUs, has seen the yield on some of its debt rise from 9% to 15%. We <a href="https://dailyreckoning.com/post/a-wrench-in-the-data-center-machine">warned</a> about data center stocks back on September 24th.
If interest rates stay elevated, this alone could spoil the party.
Additionally, there are serious questions about whether we have enough electricity to power more data centers. What will happen to GPU sales as we literally run out of juice? Natural gas turbines are backordered 3-5 years. Industrial-scale transformers are in the same boat.
You can see how this sector is more fragile than it appears. Higher interest rates, energy costs, cheap Chinese models, grid fragility, hacking, etc. It&rsquo;s a potential black swan parade.
Despite the selloff, most AI stocks remain priced for flawless execution going forward. Anything less will be punished by markets.
<h2 class="centered subhead" style="text-align: center;">All Fall Down</h2>
We&rsquo;re in crash mode today. Most sectors are down.
Whether it&rsquo;s related to AI or not, it&rsquo;s getting hammered. This is typical in any major selloff.
Gold and silver miners are certainly taking a hit.
We&rsquo;ve seen this movie before. After the dotcom bust began in 2000, the vast majority of the market sold off. Including miners.
<h2 class="centered subhead" style="text-align: center;">From March 10, 2000 to November 14, 2000:</h2>
<ul>
<li>The Nasdaq fell 38%</li>
<li>The HUI Gold Miner index fell 45%</li>
</ul>
Yes, gold miners actually fell MORE than tech stocks in the initial fallout. But from Nov 2000 to Dec 2003, the sector went on an epic run.
Gold stocks rose 614% over those 3 years. An incredible return. And the precious metal bull market lasted up until 2011.
Meanwhile, the post-2000 Nasdaq wouldn&rsquo;t regain its highs for another 16 years.
The &ldquo;good&rdquo; news is that today, the largest gold miner ETF (GDX) is already down 35% from the highs.
Gold, silver, and miners might have a bit further to fall, but I&rsquo;m holding onto my portfolio allocation (about 15% now). If silver gets down to the $45 level, I&rsquo;m a buyer at those levels. $35 and I&rsquo;m beep-beep-beep backing up the truck.
After the smoke clears, and the big print begins, it&rsquo;ll be off to the races for precious metals once again.

dr-hero-img-10-30-26

Crash Mode

Last night my wife asked about our emergency supplies. Well this is new, I thought.
Then I noticed she was browsing Amazon for dehydrated food.
My eyebrows almost hit the ceiling. This is very unusual behavior for her.
I assured her we were in good shape. But it got me thinking about what triggered the concern.
Over the past few weeks, dozens of governments have told citizens to prepare emergency supplies. That was the trigger apparently.
My wife&rsquo;s not the only one. There&rsquo;s a bit of doomsday-prepper fever breaking out lately.
Authorities warn of risks including: AI cyber-attacks, a Russian invasion, climate change, and industrial sabotage.
Most European countries have put out scary warnings recently. It&rsquo;s clearly a coordinated campaign.
The big question is &ndash; are they actually concerned about their citizens&rsquo; welfare? Or do they have a more sinister agenda?
I suspect the latter, but we&rsquo;re not going to answer that question today. We will, however, keep a close eye on the situation and see what we can learn.
Regardless of what governments say, it makes perfect sense to prepare emergency supplies.
And it can be done relatively cheaply. I view it as an insurance policy. One where the policy pays out in life during worst-case scenarios.
Here&rsquo;s how I go about it.
<h2 class="centered subhead" style="text-align: center;">Food and Fat</h2>
The #1 item for any emergency food stash should be white rice. Not brown rice or jasmine rice. White rice. Stored properly, it can last 25 years. What you want to do is store it in mylar bags, and add in oxygen absorbing packets.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4BmNBHVpdYx1AFu8Bc5kLU/2401660bd674e834dc326d46b4e228fc/dr-img1-10-28-26.jpg" alt="image 1" />
Mylar bags + oxygen absorbers
Or you can buy 25lb buckets of white rice, already in mylar bags with oxygen absorbers from emergency prep companies. Just make sure you buy from a reputable company with good reviews.
One note here. If this prepping trend continues, white rice will become hard to find. This is normal and happens during every big scare. Just wait for it to come back in stock once people settle down.
Dry beans are also a good option, and stored properly they can last 20 years.
But man cannot live on carbs alone. You&rsquo;ll absolutely need some fat in there too. I prefer coconut oil (only virgin unrefined &ndash; the natural antioxidants extend shelf-life). Stored correctly, it can last 3-5 years.
And in my house, we use a lot of coconut oil so I store a few gallons in the basement, and rotate stock. Coconut also happens to produce the healthiest plant-based oil. Yes, it&rsquo;s food. But in a pinch it can be used as toothpaste, mouthwash, moisturizer, and more.
Having some canned protein on hand makes sense too. Cans of tuna can last 5 years or longer if stored properly. Only buy protein you&rsquo;re willing to eat and rotate stock of. Tuna casserole every once in a while isn&rsquo;t so bad.
Dehydrated meals and MREs are also good options, but they aren&rsquo;t cheap. Adjust to your budget as appropriate.
If something gets a year from expiration, and we can&rsquo;t eat it, we donate it to a food bank.
<h2 class="centered subhead" style="text-align: center;">Pure Water</h2>
Water is a big one. There are a number of scenarios which could limit access to clean water.
The most important prep here is having a high-quality water filter. That means a 5 stage reverse osmosis (RO) system that goes under the sink.
RO removes 99%+ of impurities from water. Fluoride, heavy metals, chlorine, radioactive bits, forever chemicals, pesticides, microplastics, etc. Nasty stuff.
<img src="https://images.ctfassets.net/vha3zb1lo47k/431Xpf8OgXwoDFWwJpUKZI/ea30143f5d027a9e69348d2765de3ad4/dr-img2-10-28-26.jpg" alt="image 2" />
The Apec RO filtration system we have - find it at Home Depot, Amazon, etc
A good RO system runs about $200. It&rsquo;s the best investment a household can make, in my opinion. For that price you&rsquo;ll get 50 gallons a day of pure filtered water.
Filters only need to be changed every 2-5 years (different schedules for different types). I always keep a few extra sets of filters around. A filter &ldquo;refill&rdquo; kit costs anywhere from $42 to $75, depending on the brand.
An RO water filter system provides immense ROI, even if nothing bad happens. There&rsquo;s all sorts of crud in our water already.
If you&rsquo;re still drinking and cooking with city water or questionable well water, consider getting an RO system. It&rsquo;s a game-changer. And if the stuff ever does hit the fan, you&rsquo;ll be extra glad to have it.
One last thing on water. Keep some iodine around. It can purify bacteria-contaminated water, and is a key nutrient. Millions of Americans are already iodine-deficient. May as well buy a bottle. I like J. Crow&rsquo;s Lugol&rsquo;s Solution, and take a few drops every month with water.
<h2 class="centered subhead" style="text-align: center;">Don&rsquo;t Forget Guns</h2>
Firearms are a key part of any disaster prep kit. At the very least, every household should own a 12-gauge shotgun. Or two. Or three.
With a shotgun, you can bag a deer if necessary. And if someone breaks into your house, the sound of a pump-action slide chambering a shell is usually enough to send any thief scurrying. If not, well&hellip; There's nothing quite so convincing as buckshot at close range.
You can get a decent pump-action 12-gauge for under $300. Mossberg makes quality shotguns for reasonable prices.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/62vpLUDNdEGunAG3Bflnq7/f2fa81100134b7f32333937e1d04f43f/dr-img3-10-28-26.jpg" alt="image 3" />
Mossberg Maverick 88 12-gauge shotgun ($200-$300)
A shotgun should be the bare minimum for a real emergency kit. But if all you can swing is a .22 plinker, that&rsquo;s certainly better than nothing.
Of course, owning handguns and long/assault rifles too is ideal.
As a bonus, well-maintained firearms hold their value well over time. I consider them to be an inflation-hedge with additional benefits (self defense + a fun hobby).
The way I look at it is, if you ever truly need a gun, you&rsquo;re really going to need it. So buy a few.
Firearms are a key aspect of any emergency prep kit. Needless to say, keep them locked up away from kids, etc.
And be sure to get out to the shooting range and practice. My favorite is sporting clays. It&rsquo;s golf with shotguns.
<h2 class="centered subhead" style="text-align: center;">Nothing Will Happen (Probably)</h2>
My goal with today&rsquo;s letter isn&rsquo;t to scare anyone.
In fact, I&rsquo;m skeptical about all these sudden warnings from governments. Why now?
Maybe these governments know something is coming. Maybe they don&rsquo;t, and are just trying to scare us for some secret agenda.
Either way, I&rsquo;m still going to pay the doomsday insurance premium. It really doesn&rsquo;t cost much. Compared to health insurance, for example, it&rsquo;s the world&rsquo;s greatest bargain.
You end up eating most of the food you store anyway, your water gets cleaner, and you have the tools to defend your house.
Nothing wrong with that.

dr-hero-img-10-28-26

Soccer Moms are Doomsday Prepping

The election in Brazil didn&rsquo;t go the way we hoped.
Lula, an 80-year old socialist, won the presidential runoff. This will be his fourth term as the country&rsquo;s leader.
Prediction markets had given the right-wing candidate, Flavio Bolsonaro, an 81% chance last week.
Back on October 5th, when it looked like Bolsonaro would win, our favorite Brazilian ETF (EWZ) <a href="https://dailyreckoning.com/post/mbga-make-brazil-great-again">shot up 13%</a> in a day.
But now, with a socialist in power for the next four years, we have to decide whether Brazil is still worthy of investment.
<h2 class="centered subhead" style="text-align: center;">Stocks + Currency Crash</h2>
Brazilian stocks fell across the board today. The largest Brazil ETF (EWZ) is down a whopping 21% as of 1:00 pm ET.
Our beloved Petrobras (PBR, PBR.A), which has done so well for us this year, fell 15% on the day.
The Brazilian currency, the real, fell about 12%. That&rsquo;s a big part of the reason why Brazilian stocks got hit so hard today. When you own stocks in a foreign country, and that country&rsquo;s currency fluctuates, it magnifies the move (up and down).
However, I&rsquo;m not giving up on Brazil. EWZ is still +43% (with dividends reinvested) from our original February 2025 <a href="https://dailyreckoning.com/post/brazilian-stocks-offer-8-yields-at-8x-earnings">writeup.</a>
Petrobras is still +102% (with dividends reinvested) from our first May 12th <a href="https://dailyreckoning.com/post/trading-the-trade-disruptions">writeup.</a>
In South America, politics clearly play a big role in stock market returns. But this selloff looks overdone.
<h2 class="centered subhead" style="text-align: center;">Socialist Fears vs. Capitalist Hopes</h2>
Investors had hoped that a conservative president would rein in Brazil&rsquo;s deficit spending, de-regulate, and make the country a magnet for foreign capital.
Well, there goes that plan. But all is not lost. I plan to continue to hold EWZ and other Brazilian investments, reinvest my dividends, and sit tight.
I have no plans to sell Petrobras. It remains one of the largest positions in my portfolio. If that changes, I&rsquo;ll let you know.
Here&rsquo;s why I&rsquo;m not too worried about Lula. He&rsquo;s been running the country for the past 4 years and it hasn&rsquo;t imploded. Yes, Bolsonaro would have been better for investors.
But Lula should be fine. When he returned to the presidency in January of 2023, he did make significant changes at Petrobras (PBR).
His government steered Petrobras to spending more on new oil production, and less on dividends. Previously, Petrobras paid out about 60% of free cash flow to investors as a dividend. Under Lula, they paid out about 45%.
The changes weren&rsquo;t all bad though. Partially as a result of all the new investment, the company&rsquo;s oil production has soared. Since Lula&rsquo;s return to office in 2023, Petrobras oil production has jumped 27%, the best among all major producers. The company has invested heavily in Brazil&rsquo;s rich pre-salt offshore oil fields, and it&rsquo;s paying off.
So even though Brazil&rsquo;s socialist president tinkered with Petrobras, the company is pumping more oil than ever, and still remains a cash flow machine. Their average all-in cost to produce a barrel of oil is around $35.
The real risk investors fear is a darker sort of government intervention. If oil stays high, Brazil could force the company to sell fuel at a loss domestically.
The Brazilian government ran this playbook from 2011-2014. It crushed confidence in Petrobras and Brazilian stocks, because investors feared it could happen again.
However, I think Brazil learned its lesson from that episode. They fooled around with the country&rsquo;s most popular company, and the stock market didn&rsquo;t recover for more than a decade. I don&rsquo;t think they&rsquo;ll make that mistake again.
Even after today&rsquo;s sell-off, Brazil&rsquo;s stock market is one of the world&rsquo;s best performing over the past 2 years. I don&rsquo;t think Lula is dumb enough to ruin the country&rsquo;s resurgent economy.
But we do have to acknowledge it as a risk. And hey, there&rsquo;s political risk everywhere today. Even here in the U.S.
<h2 class="centered subhead" style="text-align: center;">Common Themes</h2>
French economist Frederic Bastiat famously wrote, &ldquo;The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.&rdquo;
Bastiat wrote those words in 1848, but they remain highly relevant. This is essentially what happened in Brazil. Lula promised voters more benefits, and he won.
As we approach midterm elections, America faces its own challenges. An increasingly-socialist Democratic party threatens to sweep Congress.
If Dems do sweep, I don&rsquo;t think the S&amp;P 500 will crash 21% in a day like we saw in Brazil. But we should see a steep sell-off.
And it would be the beginning of more socialist America. Higher taxes, wealth redistribution, more censorship, more regulation, endless immigration, Green New Scam 3.0. They could even expand the Supreme Court and fill it with neoliberals. I outlined the risks in <a href="https://dailyreckoning.com/post/president-aocs-first-term">President AOC&rsquo;s First Term.</a>
The U.S. is no longer immune from the political chaos that was once only found in emerging markets. We could have a mini-Brazil situation ourselves soon.
So yes, I&rsquo;m holding onto my Brazilian stocks. This is a long-term thing for me. When you buy quality companies at 9x earnings and fat yields, good things tend to happen in the long run.
I&rsquo;m sticking to the original plan. Hold and reinvest dividends for ~5 more years, wait for the big re-rating, and sell when valuations get high.
Of course, if anything changes, you&rsquo;ll be the first to know.

dr-hero-img-10-26-26

Black Monday in Brazil

Growing up, my generation was taught simple rules for success.
Get good grades in school. Go to college, pick a sensible major. Have fun, meet your spouse, graduate.
Do that, young man, and you&rsquo;ll be on course for a happy upper-middle class life.
It even worked for some of us.
But that world is dying.
<h2 class="centered subhead" style="text-align: center;">AI, Outsourcing, and Mass Immigration</h2>
These are the 3 horsemen of the white-collar apocalypse.
Together, they have combined to create a gnarly situation.
Let&rsquo;s start with AI, which is rapidly disrupting knowledge work. Intelligence has become a commodity. By using the best AI models, anyone can access the equivalent of a genius-level PhD researcher, in any field.
The importance of this cannot be overstated.
The vast majority of white-collar work is on its way to becoming automated. Either learn to master the tools, or be replaced by someone who does. Those are the new white-collar rules.
<h2 class="centered subhead" style="text-align: center;">Immigration + Outsourcing</h2>
Meanwhile, about 430,000 immigrants come into the U.S. every year on professional visas, seeking out high-paying desk jobs. They&rsquo;re willing to work 60+ hours a week for 35% less money. Unscrupulous American companies are taking full advantage of the situation.
These foreign workers are competing for the same jobs as college grads. This is their path to a green card. Many have fake diplomas and falsified work histories. Once they get into hiring roles at a company, they mostly onboard people from their own countries (kickback schemes are common).
They send 30% of their pay back home, meaning it&rsquo;s useless for the U.S. economy. They vote 75% Democrat. And they&rsquo;re coming after high-paying U.S. jobs. Why are we doing this again?
It will continue until Americans stand up and tell the government no more. No self-respecting nation allows such volumes of immigration. India certainly doesn&rsquo;t.
Thousands more companies are outsourcing their IT, customer support, and coding to other nations. Nevermind that the results are bad. They&rsquo;re saving money (while destroying their brands and customer experience).
AI catches most of the blame, but immigration and outsourcing are making the white-collar world a cutthroat place.
<h2 class="centered subhead" style="text-align: center;">2 New Paths to Success</h2>
We&rsquo;ve entered a new world. Yet most people are still relying on the dusty old college playbook.
Forget about that world. It&rsquo;s gone. Today there are two primary paths to a good career.
The first is going the blue-collar route.
My 17-year old son chose this path. He&rsquo;s working as an electrical apprentice. Technically, he is still a high school senior. But every day, he gets up at 5:30 am and drives to the job site. He runs conduit, digs ditches, and drills holes in concrete. He&rsquo;s also taking two community college courses online, and has electrical class once a week.
He&rsquo;s earning $26 an hour, getting education credits, and learning a valuable trade. In 3.5 more years, he&rsquo;ll be a journeyman electrician at the age of 21. This is a powerful alternative to college.
Here&rsquo;s the shocking part. Among 322 seniors at his high school, he is the only one doing an apprenticeship.
These programs are available across the country. But most people are still betting on a white-collar future for their kids. In this environment, that&rsquo;s a risky bet.
<h2 class="centered subhead" style="text-align: center;">The Entrepreneurial Route</h2>
In the Paradigm Press app this week, our friend Matt Badiali told a fascinating story about a young entrepreneur who used AI to build his business. It makes my point powerfully:
<blockquote>
Yesterday I met a very impressive young man. He was probably in his late 20&rsquo;s. He came to give me an estimate for gutters at my home. He had an impressive app on his iPad that integrated everything for him. He just measured things and plugged in the numbers.
When we sat down to discuss his estimate, I mentioned how cool the app was. His response:
&ldquo;Yeah, I made it myself.&rdquo; I was impressed. This was a polished estimate builder. It was intuitive to use. And the layout was easy to understand.
&ldquo;I did it with Claude. It&rsquo;s 1500 lines of code&hellip;but I&rsquo;m not a coder. It was all &lsquo;vibe coded&rsquo;. I just gave the AI all my old estimates in a folder. Then I asked it to build the app.&rdquo;
I&rsquo;m no AI fanboy. This was the first instance that I came across where I was legitimately impressed. He pays $20 per month for this service. He still has some bugs with it. He fixed one while I watched. He wanted a number pad instead of a box he had to write in. Five minutes later, he had what he wanted.
I&rsquo;m blown away&hellip;and here&rsquo;s why.
The app does a couple things for his business. First, it assures that his guys know exactly what they need, where to go, and what the job scope is. If you worked in a trade, you know how important that is. Nothing&rsquo;s worse than having to run to Home Depot or Gutters R Us to pick up something you forgot at the shop.
But even more important, it allows him to grow the company. Pricing jobs is the most important part of the business. If you mispriced the job, you either don&rsquo;t get it for coming in too high or lose money because you didn&rsquo;t underbid it.
That&rsquo;s why it&rsquo;s so difficult for owners to hire that position. The bidder can make or break the company. But this app that he built is bullet proof. It literally just needs a couple of measurements to populate the entire bid.
In this case, Claude will enable him to grow his gutter business. He&rsquo;ll be able to outcompete his competitors. All he must do now is focus on the execution at the jobsite. Selling the jobs is not a slam dunk.
I hired him for my gutters. And I&rsquo;m going to keep an eye on his progress.
</blockquote>
Amazing. This young man Matt B met is the future. Before AI, it would have cost at least $50,000 to build that app. There&rsquo;s no way a one-man shop could have afforded it.
But this kid built a functional app to run his business. And it cost him $20 a month.
AI has made it so &ldquo;idea guys&rdquo; can become builders. Just tell the AI your idea, and it builds it. And the results are shockingly good if you use the right model (Anthropic&rsquo;s Opus 5.5 is currently tops).
Modern AI agents can put out disturbingly good software and apps, quickly. It does require some work still. Setup, verification, testing, and monitoring. But compared to the pre-AI era? It&rsquo;s 99% cheaper to build software.
Anyone with motivation can learn to build with AI. This is a powerful tool for entrepreneurs.
So the entrepreneurial path is actually becoming more viable. But you need motivation and a good idea.
So. Blue-collar, or business owner. These are becoming the most viable paths to success.
Sure, some college grads will find their perfect role and succeed. But over the coming years, the majority of those roles will go to people who excel at using AI agents.
So kids who do choose to pursue the white-collar path today need to be laser-focused on agentic AI. Master it. Because it&rsquo;s here.
Let&rsquo;s address one thing before we close. Optimists tell us that AI will create more jobs than it destroys.
Maybe that will be true. In 15 years, once the economy has had time to adjust.
Until then, we&rsquo;re going to be in transition mode. And transitions of this scale are never easy.

dr-hero-img-10-24-26

Surviving the White Collar Apocalypse

Global Crossing. Remember that name?
It was a darling of the dotcom bubble.
Founded in March of 1997, fairly late, the company quickly became a star. It IPO&rsquo;d just 18 months later. That is unbelievably fast for a public offering.
Investors really wanted a piece of this one. And the vision was powerful. Bring fast internet to the world with a huge network of fiber-optic cable.
The investment pitch was tantalizing: we&rsquo;re building the telecom infrastructure of the future.
Investors viewed the company as a toll booth on the internet.
Global Crossing&rsquo;s fiber network soon spanned 27 countries and more than 200 cities. They were indeed connecting the world. Upgrading the people from dial-up to high-speed internet.
In 2001, Global Crossing raised another $1 billion and declared its network was &ldquo;fully funded&rdquo;.
Just 221 days later, the company declared bankruptcy.
The infrastructure Global Crossing built survived, and much is still in use today.
The company&rsquo;s founder, Gary Winnick, managed to sell $700 million worth of stock before the collapse.
Bagholders got $0.
<h2 class="centered subhead" style="text-align: center;">The Breakthrough That Broke Fiber</h2>
At the time Global Crossing was founded, each strand of fiber-optic cable could transmit about 2.5 gigabits of data per second (gps).
By 2000, a breakthrough called DWDM (dense wavelength-division multiplexing) made each cable able to transmit 100 gps.
A 40x increase in fiber throughput capacity. So even though the internet was still growing fast, they built way too much new telecom infrastructure. There was a glut of fiber.
The DWDM efficiency breakthrough played a big role in the dotcom bust.
Could something similar happen today? Of course.
And I believe there will be major breakthroughs which make AI far more efficient, and cheaper. Right now, around the world, there are probably 100,000 of the world&rsquo;s smartest engineers working to hone efficiency and performance on hundreds of AI models.
With so much brain power focused on the problem, I don&rsquo;t think AI will stay as expensive as it is today for long. We&rsquo;re already beginning to see this with the newest Chinese open source AI models, which are perhaps 95% as good as the best American models, but cost 1/10th the price.
Depending on how it shakes out, such a breakthrough could cripple infrastructure companies much like DWDM did to the fiber plays.
And of course, there are also other factors to consider which could threaten the AI boom.
<h2 class="centered subhead" style="text-align: center;">Data Center Stocks Crack</h2>
AI stocks stumbled again today. Hardest hit were data center stocks.
Coreweave (CRWV) is down 9.84% around midday. IREN is down 8.8%. Nebius (NBIS) is down 7.8%. Oracle (ORCL) is down about 4%.
The same concerns we saw in the dotcom are returning to haunt investors.
Too much debt. Not enough revenue.
A week ago Jim Rickards warned readers about data center stocks in the <a href="https://d2z65klgtz99km.cloudfront.net/PPG-App/">Paradigm Press App</a> (available for Android and iPhone).
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5BPijuVx3FFZDBJ1lT8U7d/616025f6978cafb72c12481afe11c3d9/dr-img1-10-22-26.jpg" alt="image 1" />
Source: <a href="https://d2z65klgtz99km.cloudfront.net/PPG-App/">Paradigm Press App</a>
Coreweave is indeed the possible canary here. It&rsquo;s the most heavily-indebted and leveraged among the &ldquo;neocloud&rdquo; data center stocks. It essentially buys Nvidia GPUs and rents them out. This is a very popular business model right now, and one that&rsquo;s about to get a ton of new competition over the next year with new facilities going up nationwide.
And that last point Jim raised is important. Rising interest rates.
This is yet another similarity between the dotcom and AI booms. Between June 1999 and May of 2000, Greenspan&rsquo;s Fed raised interest rates 6 times, from 4.75% to 6.5%. He was trying to slow the bubble down, but it just collapsed.
Today we are once again facing rising interest rates and yields. And it could get ugly considering the sheer amount of debt being used to fuel this bubble.
<h2 class="centered subhead" style="text-align: center;">Leveraged to the Hilt</h2>
The AI boom is fueled by debt. Lots of it.
Morgan Stanley says in 2026 alone, companies have raised $466 billion in debt to power the AI buildout.
And there&rsquo;s at least $1.4 trillion in future spending commitments (for example: you build the data center and we&rsquo;ll guarantee a certain amount of rent for 5 years).
There&rsquo;s debt and leverage at every level of the sector. The hyperscalers (like Amazon), the neoclouds (like Coreweave), the landlords, etc.
When something goes wrong, debt amplifies that wrongness. The key risks I see are:
<ul>
<li>Interest rates keep rising</li>
<li>A major efficiency breakthrough lowers AI costs significantly</li>
<li>A flood of new data centers lowers prices and breaks the economics</li>
<li>Chinese open-source models continue to improve and gain market share</li>
</ul>
Of course, it&rsquo;s possible that we&rsquo;re a year or more away from the bubble popping. You never really know with these things. Stocks can often climb the wall of worry longer than a rational person would expect.
But &ldquo;neoclouds&rdquo; and AI data center stocks sure do look risky here. With mountains of debt and locked-in future obligations, these puppies could implode unless everything goes perfectly.
With higher interest rates, not enough electricity, and rising inflation, it&rsquo;s going to be a bumpy road for debt-laden darlings.
Meanwhile, parallels to the dotcom era are becoming unavoidable. We&rsquo;ll continue to seek out investments which will survive and thrive during the bust and beyond.

dr-hero-img-10-22-26

The Ghosts of Bubbles Past

Last week, our friend Sean Ring called silver a &ldquo;busted flush&rdquo; on the <a href="https://d2z65klgtz99km.cloudfront.net/PPG-App/">Paradigm app&rsquo;s Daily Feed</a>:
<blockquote>
Silver is a busted flush. Now comfortably trading under $60, silver waits for today's inflation data. It's expected to be higher than August&rsquo;s numbers.
The market seems to be trading off the Fed&rsquo;s expected response, which, if anything, is to increase rates to fight inflation. That&rsquo;s putting pressure on silver and gold, but silver is suffering more.
If trading continues today the way it started, we will have a new daily downside target of $47. That matches is a long-term monthly downside target as well. Of course, that doesn&rsquo;t mean silver will hit the target. But that&rsquo;s the point it will move toward.
</blockquote>
For those who don&rsquo;t play poker, a busted flush isn&rsquo;t great.
A few readers have written in to ask what I think about Sean&rsquo;s take. So here&rsquo;s my reply.
Sean&rsquo;s been right. He sold his silver miners back around <a href="https://rudeawakening.info/posts/take-the-money-and-rotate">February 9th</a>, when silver was trading at $83 an ounce. It&rsquo;s $58 today.
He sold, I stayed long.
Throughout 2025, Sean and I were on the same page on silver (and miners). We were bullish.
But we have different time horizons. I plan to hold my silver for at least the next 10 years. I believe it&rsquo;s going to be a chaotic and inflationary period. And I don&rsquo;t want to have to worry about timing the market too much.
Plus, most of my precious metals investments are in taxable accounts, or storage facilities. So whenever I sell, I have to pay about 40% capital gains taxes on short-term positions, and 20% on long-term investments (over 1 year). Add in fees and commission on physical silver.
Tax efficiency is critical. If all your positions are in protected retirement accounts, that&rsquo;s great. But not all of us are in that boat.
In terms of miners, some of my positions are still up 3x from when I bought them in the spring of 2025. I&rsquo;ve taken about 25% profits, but am still holding the majority of my shares. I want to hold some of these juniors until they become senior miners or are acquired.
Even with today&rsquo;s oil prices, and the fall in silver prices, miners are printing money.
Everybody&rsquo;s situation is unique. I like to hold long-term. Sean is an excellent investor and trader, and his system works for him. He utilizes a lot of technical analysis, which isn&rsquo;t something I use much.
The point is: multiple approaches can work.
<h2 class="centered subhead" style="text-align: center;">Trading vs. Investing</h2>
I&rsquo;ve been clear to readers about what my personal plan is. Hold my silver and other precious metals investments for the next ~10 years. I believe owning PMs and other hard assets is going to be key for wealth preservation going forward.
Long-time readers know we wrote more than a <a href="https://dailyreckoning.com/silvers-3x-upside/">dozen</a> <a href="https://dailyreckoning.com/silver-the-closer-metal/">articles</a> about why silver was a strong buy in the <a href="https://dailyreckoning.com/bathwater-baby-and-silver-2/">$30s</a>.
And in January of this year, when we got up to the $90s, here&rsquo;s what I wrote in <a href="https://dailyreckoning.com/silver-faqs/">Silver FAQs</a>:
<blockquote>
Is it Too Late to Buy?
This is the toughest question.
Let&rsquo;s take a look at the 1-year silver chart.
</blockquote>
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/67mPVoIJBlrcO4oKJHznYk/002de1e48cf465757f7d0a6898f5a07a/dr-img1-10-20-26.jpg" alt="image 1" />
<blockquote>
What a doozy&hellip; Textbook parabolic move.
So lately, when people ask if it&rsquo;s too late to buy, my answer is probably (for the short-term). I realize that&rsquo;s not satisfying, but it&rsquo;s what I see.
Over the long term, you guys know there&rsquo;s no bigger silver bull than me. Silver is a unique metal, in that it is both industrial and monetary. And demand on both sides is absolutely booming.
But this move just seems like too much, too fast.
So it would be reckless to recommend readers/friends buy here. I suspect we&rsquo;ll get a better chance to buy silver sometime in the next 5 months.
</blockquote>
Silver went on to reach $121 an ounce briefly on January 29th.
<h2 class="centered subhead" style="text-align: center;">Longer-Term: We&rsquo;re Both Bullish</h2>
It&rsquo;s important to note that Sean doesn&rsquo;t think silver is a bad long-term investment. He&rsquo;s simply being patient and waiting to buy the dip on miners.
Here&rsquo;s another post Sean made on our app&rsquo;s <a href="https://d2z65klgtz99km.cloudfront.net/PPG-App/">Daily Feed</a> on October 2nd:
<blockquote>
As I wrote yesterday&lsquo;s Rude, my price target for silver is somewhere around $56. After a brief rally today, we&rsquo;ve crashed back down because the markets don&rsquo;t think Warsh is going to back down.
I think he&rsquo;s going to wind up hiking in either October or December and the market somewhere is going to break&hellip; as a result, the FOMC will start ferociously cutting in 2027.
We are getting very close to wanting to buy back into the silver miners. Again.
</blockquote>
So long-term, Sean&rsquo;s not bearish on silver or silver miners. He&rsquo;s simply trading the charts as he sees them. And it&rsquo;s been working, so good for him.
Personally, I take more of a long-term strategy. And both methods can work. It all depends on your preferences. Are you more of a trader, or a long-term investor? Are you investing in taxable accounts, or 401ks and IRAs (tax shelters)?
<h2 class="centered subhead" style="text-align: center;">Inflation Insurance</h2>
Jim Rickards&rsquo; target for silver is $200 an ounce. He says it could get there next year. I concur. But I don&rsquo;t really care if it takes until 2028, or even later.
Silver is a huge part of my inflation insurance package. And I expect inflation to remain problematic for many years to come. That will drive demand from investors, which was lacking for much of the past decade.
With silver, of course, we also need to consider industrial demand. Solar panels, electronics, weapons systems, medical applications. All are going strong. Solar panels are an especially bright spot.
The current energy crisis is driving countries around the world to install massive solar panel installations, and each panel contains 4 to 20 grams of silver.
Take a look at the size of China&rsquo;s largest solar project:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5lBi6bGCo8TcDdauWAQmg2/3d0f7610bcc83479fa1333e5803d0128/dr-img2-10-20-26.jpg" alt="image 2" />
Source: <a href="https://www.admiddleeast.com/story/worlds-biggest-solar-farm-goes-live-in-china-5gw-can-power-an-entire-country-for-a-year">Architecture and Design</a>
It took a mountain of silver to build that. And solar demand isn&rsquo;t slowing down anytime soon.
<h2 class="centered subhead" style="text-align: center;">Intermission</h2>
In summary, silver mania isn&rsquo;t over. This is the intermission. No investment goes straight up, nor should it.
But that doesn&rsquo;t mean we have to try to trade it. You can, certainly. But personally, my goal is to hold investments I believe in for many years. It&rsquo;s what works for me.
If timing the market works for you, that&rsquo;s fantastic. Just make sure you consider tax implications, and have the experience necessary to trade in and out. Or have someone to guide you, like the top-notch experts we have here at Paradigm.
If you&rsquo;ve been waiting to buy silver, now is a fine time. We might go a bit lower over the short-term, but my confidence over the next 2-5 years is extremely high.
Silver will hit $100 again, then $200, then $300, and beyond. And I&rsquo;ll be along for the ride.

dr-hero-img-10-20-26

The Great Silver Debate

Over the weekend, President Trump made his feelings about Ukraine&rsquo;s President Zelensky clear.
On Truth Social, POTUS wrote a lengthy post about Zelensky and the war. Needless to say, he is furious that Ukraine keeps striking Russian oil infrastructure. It&rsquo;s contributing to higher prices worldwide.
Before the war, Russia was the second-largest diesel exporter. But Ukrainian drones keep blowing up the country&rsquo;s refineries, tankers, and oil storage.
Here&rsquo;s an excerpt from Trump&rsquo;s Truth Social post:
<blockquote>
[Zelensky] could have made a better deal two years ago than he can now. His country is in shambles, a large portion of his land is lost, his oceans and seas are gone, and his male population is low, wounded, and/or dead.
</blockquote>
Harsh but true. Ukraine is running out of options. Weapons, food, energy, and money are all in short supply. Blackouts in Kiev are common. Zelensky&rsquo;s thug-squads roam the streets abducting scarce civilians to fill the trenches.
It is likely that 900,000 Ukrainian soldiers have been killed in action so far. Overall the population has fallen from 41 million pre-war to around 28 million today (mostly due to migration).
Zelensky just demanded another $155 billion from the EU, but European governments have problems of their own right now.
However, if Zelensky doesn&rsquo;t get the money, the country collapses and a new refugee crisis begins. Then Europe ends up paying for it anyway. They are stuck.
The war is not going well for Ukraine. Despite occasional successes, Russia intercepts more than 99% of Ukraine&rsquo;s long-range drones (provided by the EU). Up to 300 drones are launched for a single successful attack on Russian infrastructure. It&rsquo;s not sustainable.
It&rsquo;s going to be a cold and brutal winter in Ukraine. I hope the war ends soon for the sake of its people.
The only positive way to spin this is Trump&rsquo;s statements give me hope that we can finally repair our relationship with Russia.
<h2 class="centered subhead" style="text-align: center;">A Missed Opportunity</h2>
In 2000, Russia tried to join NATO.
A young Vladimir Putin pitched Bill Clinton on the idea, and apparently Slick Willie was initially open to it.
But once President Clinton talked with his &ldquo;advisors&rdquo; (bosses), the answer became clear. Nyet. No deal. Putin continued to pursue NATO for a while, but didn&rsquo;t get anywhere.
If Russia had joined NATO, the world would be a very different place today. For one thing, Putin&rsquo;s alliance with China would never have been necessary.
But America&rsquo;s deep state chose another path. And they drove Russia directly into the waiting arms of China.
<h2 class="centered subhead" style="text-align: center;">NATO&rsquo;s Expansion</h2>
When the Soviet Union collapsed in 1991, much of Eastern Europe was thrown into chaos.
Suddenly, 15 new independent countries were born.
America didn&rsquo;t waste time. Russia could not join NATO. It would be swallowed by it.
The map below shows the expansion of the NATO military alliance. Note how most countries joined in 1990 or later, as the USSR disintegrated.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4k5lY3i5osvxc5PDJY2eRU/24d3ce8dd7f1256917660de98b74393b/dr-img1-10-19-26.jpg" alt="image 1" />
Since this map was published, Finland and Sweden also joined NATO in 2023 and 2024.
NATO&rsquo;s goal was simple. Surround Russia, choke it off economically, break the country up into parts from within, and take it over.
In 1999, the great Pat Buchanan wrote:
<blockquote>
&ldquo;By moving NATO onto Russia&rsquo;s front porch, we have scheduled a twenty-first century confrontation. &hellip; America will face a hellish dilemma: risk confrontation with a nuclear-armed Russia determined to recreate its old sphere of influence, or renege on solemn commitments and see NATO collapse.
Offering NATO memberships to Estonia, Latvia, Lithuania, and, as some urge, Ukraine is rashness bordering on madness.&rdquo;
</blockquote>
Buchanan&rsquo;s prediction came true, of course. The man has an uncanny track record.
<h2 class="centered subhead" style="text-align: center;">The Failed Ukraine Project</h2>
Ukraine was to be the cherry on top of NATO&rsquo;s expansion. The country was to be NATO&rsquo;s front line of defense (and offense) against Russia.
To this end, Obama&rsquo;s State Department executed a <a href="https://www.bbc.com/news/world-europe-26079957">coup</a> in 2014. The Maidan Revolution, which installed a pro-Western government.
But the plan to expand NATO to Ukraine (and Georgia) has been active for a long time. In 2008, NATO officials stated it plainly at the Bucharest Summit:
<blockquote>
&ldquo;NATO welcomes Ukraine&rsquo;s and Georgia&rsquo;s Euro-Atlantic aspirations for membership in NATO. We agreed today that these countries will become members of NATO.&rdquo;
</blockquote>
This was the last straw for Putin. He simply could not allow Ukraine to join NATO, a country just 280 miles from Moscow. That&rsquo;d be like us letting China build missile silos in Mexico.
By the time Putin invaded, a NATO training center in Ukraine had already trained 45,000 Ukrainian soldiers to alliance specifications.
The war Pat Buchanan predicted happened. It has been a horrible tragedy. Ukraine has probably lost 900,000 soldiers killed in action. Russia has probably lost 190,000. These are my best estimates based on open source analysis. Neither side will confirm anything officially.
So&hellip; what now?
<h2 class="centered subhead" style="text-align: center;">A Russo-American Partnership?</h2>
Earlier this month, Trump signed an energy deal with Russia. Putin got sanction relief, and we (hopefully) will be getting 300,000 tons of diesel, to start.
Is this the beginning of a new chapter with Russia? I hope so. Throughout history, Russia has proven to be a good ally and a bad enemy.
The country wants a productive relationship with the U.S. And in those rare instances in history where we worked together, amazing things have been accomplished.
The International Space Station is Exhibit A. Neither country could have done it alone, but together we built something truly remarkable.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3FDfr5jsgjOJgyouCncKpl/60c5d42e38ea8f1f821d7a28f8a8d171/dr-img2-10-19-26.jpg" alt="image 2" />
The ISS. Source: NASA
But powerful forces have consistently spoiled any progress.
Is a breakthrough possible now? I think so. Russia has proven it is not going to be defeated militarily. We&rsquo;re not going to overthrow Putin, and if we did, someone not as nice would replace him. Reality is setting in.
Interestingly, a trade envoy for Putin, Kirill Dmitriev, posted the following message on X recently:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6p3aG5L6411NbkwMz7hsWu/a961728c5d05cdf84dad45c3c847971d/dr-img3-10-19-26.jpg" alt="image 3" />
Source: <a href="https://x.com/kadmitriev/status/2111210293921792284">X</a>
An image of an American Eagle and a Russian bear facing off against the UK and EU? Now that&rsquo;s provocative. The post got more than a million views, and 6,300 likes.
The screenshot shows an article by James Kunstler <a href="https://www.zerohedge.com/geopolitical/things-have-changed">on ZeroHedge</a>. It&rsquo;s an interesting piece about how Russia might make a better ally than the EU or UK.
The article hints that modern Russia is the new Europe. And that modern Europe is the new USSR:
<blockquote>
Europe is now tyrannized by the unelected EU commission, much as the old Soviet Union was tyrannized by its politburo. An Orwellian switcheroo has occurred.
</blockquote>
Kunstler also points out the mess the UK finds itself in:
<blockquote>
And outside the EU - which it voted to exit in 2016 - you have our so-called "mother country," Great Britain (the United Kingdom) committing suicide in the most extravagant way, turning over prime ministers like they were jacks in a game of whist, jailing their own people for impure thoughts, while allowing the wholesale rape of its womenfolk by foreign invaders.
</blockquote>
Wow&hellip; I don&rsquo;t agree with everything Kunstler says in his piece, but it&rsquo;s fascinating food for thought.
The idea of starting a new chapter with Russia is gaining traction. Because it makes all the sense in the world.

dr-hero-img-10-19-26

A New Chapter with Russia

While the war with Iran might be nearing a resolution, the war in Ukraine is heating up.
Whether this is the next stage in escalation, or the grand finale remains unclear. But lessons continue to emerge from this conflict, and world powers are beginning to act on them at scale.
Ukrainian long-range drones continue to hammer Russian energy and military sites. Targets up to 1,700 kilometers inside Russia are being hit.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3yx4YBpnAW4bdA1134DOXP/088bce5531abda0f6aac7dc6c36f9e06/dr-img-10-15-26-1.jpg" alt="image 1" />
A Ukrainian long-range drone. Source: <a href="https://www.ap.org/news-highlights/spotlights/2025/a-ukrainian-startup-develops-long-range-drones-and-missiles-to-take-the-battle-to-russia/%23defb8a6696-4">AP</a>
These strikes are causing serious economic damage to Russia, not to mention the environmental harm. Here&rsquo;s a screenshot of recent fires at Russia&rsquo;s Rosneft facility on the Black Sea after Ukrainian drone attacks.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/uJoQR3v7QYsk64dRUYDv1/08b7dfe9668b770ee728f0c4e29c40c8/dr-img-10-15-26-2.jpg" alt="image 2" width="510px" />
Source: <a href="https://x.com/runews/status/2046129975665770876">X</a>
Earlier this week, President Trump expressed his anger at Ukrainian President Zelensky, "It's time for Ukraine to get a NEW PRESIDENT!"
Ukraine&rsquo;s strikes are hammering Russia&rsquo;s fuel production, and causing shortages worldwide.
On the front lines, short-range drones are now Ukraine&rsquo;s primary weapon holding back Russian advances. Most of these are small drones with anti-tank RPG warheads attached.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/50hyzc7ZyxsSXXBSmgGL7w/e949dbbd6279a7e5ecde9fb08981fedf/dr-img-10-15-26-3.jpg" alt="image 3" />
Crude, but highly effective. There are also bomber drones which drop grenades, mortars, and improvised munitions. Interceptor drones roam the skies, looking to foil enemy attacks.
Both sides are using <a href="https://x.com/GrandpaRoy2/status/1994286890913325413">flamethrower drones</a>, which drip molten thermite to melt anti-drone netting and ignite enemy structures.
Meanwhile Russian long-range drones and missiles are increasingly hitting military sites in the capital, Kiev (Kyiv). And across the rest of the country. Glide bombs are devastating the front lines. And Russia is using at least as many short-range drones as Ukraine is.
It is estimated that up to 15,000 drones are being used in Ukraine per day. And that up to 90% of casualties are caused by these terrible little machines.
Traditional maneuver warfare is extremely difficult in these conditions. Advances crawl forward at a snail&rsquo;s pace.
Tanks and IFVs are increasingly irrelevant on the battlefield. Even artillery, the &ldquo;God of War&rdquo;, has become an afterthought.
In just a few short years, this new class of drones have changed warfare forever. The question is: are American defense contractors ready for this new world?
<h2 class="centered subhead" style="text-align: center;">Petraeus&rsquo; Warning</h2>
Former Army General and CIA Director David Petraeus is <a href="https://x.com/clashreport/status/2058992487553990804">out</a> with a new warning about drone warfare. I&rsquo;m not a fan of the man, but what he says here is true.
<blockquote>
&ldquo;We have not remotely learned all the lessons we should have from the war in Ukraine.
That is the future of war right now. Ukraine is using 10,000 drones a day.
Ninety percent of the casualties on the Russian side are caused by drones. Tanks can&rsquo;t manoeuvre anymore. They can&rsquo;t survive. Armored vehicles can&rsquo;t survive.
And by the way, there&rsquo;s more coming. Within a year or two, we&rsquo;re going to see unmanned systems that are not remotely piloted.
In the future, we&rsquo;re going to see autonomous systems &mdash; truly autonomous &mdash; that do not require a pilot to remotely operate them.
Then you face drone swarms. And that is something for which we really don&rsquo;t have a solution.&rdquo;
</blockquote>
<h2 class="centered subhead" style="text-align: center;">Weapons Giants Fall Behind</h2>
America&rsquo;s largest defense contractors, Lockheed Martin (LMT) and Northrop Grumman (NOC), have traditionally focused on gigantic programs. The F-35, naval ships, helicopters, cruise missiles, and big drones costing $30-90 million a piece.
These contractors have been forced to build their supply chains and manufacturing around getting support from specific political districts.
Elon Musk has been especially critical of U.S. defense firms, singling out manned fighter jets like the F-35 as &ldquo;obsolete in the age of drones.&rdquo;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6wMymcaLeJOCuYRJ5LkOGc/5f702ad2e80173c2f1c02a37457f5a44/dr-img-10-15-26-4.jpg" alt="image 4" />
Source: <a href="https://x.com/elonmusk/status/1861070432377737269">X</a>
I&rsquo;m not sure fighter jets are obsolete just yet. But tanks and other traditional weapons systems do seem to be moving in that direction.
The point is that making cheap disposable &ldquo;kamikaze&rdquo; drones at scale is outside the wheelhouse of big defense firms.
Now that the U.S. military wants low-cost attack drones, they are doing something unusual: going to smaller firms in search of innovation.
<h2 class="centered subhead" style="text-align: center;">New Drone Depots</h2>
The U.S. military is converting 6 Army depots into drone production facilities across the country. <a href="https://thedefensepost.com/2026/10/09/us-mcalester-plant-drone-munitions/">Defense Post</a>:
<blockquote>
The McAlester Army Ammunition Plant (MCAAP) in Oklahoma is adapting its munitions production to support modern drone warfare through a new partnership with Perennial Autonomy.
</blockquote>
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/25I1P7gcB76vPepbZALRbb/ba413af3068307dc0595c09a44d8a76a/dr-img-10-15-26-5.jpg" alt="image 5" />
They&rsquo;re partnering with various private companies to build drone manufacturing capabilities domestically. Beefing up our drone production base is key to modernizing the military.
Especially because the government&rsquo;s requirements call for doing it without any Chinese parts.
That in itself is a huge challenge, because today China makes about 85% of the world&rsquo;s commercial and personal drones. China&rsquo;s supply chains are already incredibly developed, and it will take time to build out our own. The vast majority of Ukrainian and Russian drones used are either Chinese, or built with Chinese motors, batteries, servos, and other parts.
<h2 class="centered subhead" style="text-align: center;">The Drone Dominance Program</h2>
It&rsquo;s been nearly 5 years since the war in Ukraine began, and the disruptive potential of drone warfare became clear.
The U.S. Department of War is now beginning to ramp up drone programs. In Iran we saw the debut of the LUCAS attack drone, based on Iran&rsquo;s Shahed-136.
Now the American military is looking to build 300,000 attack drones by 2028. That may sound like a lot, but it&rsquo;s 15 days of supply for Russia and Ukraine.
The Drone Dominance Program (DDP) is a fascinating development. The Department of War is tearing up the old playbook of 10-30 year development cycles and trying something fresh.
Dozens of companies were invited to participate in a series of trials. Various drones are tested for accuracy, speed, resistance to electronic warfare, and other objectives.
And the Department of War has an online leaderboard showing the top performers:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/25UBGwMcpfBFp2XRnN0IsL/64a59d33cd80cf3914aebc33f8d735e0/dr-img-10-15-26-6.jpg" alt="image 6" />
Source: <a href="https://drone-dominance.io/leaderboard.html">Drone Dominance official site</a>
Note the complete absence of any big defense contractors. The leading performer, Skycutter, is a small private U.K. company with plenty of frontline experience in Ukraine.
We are early in this new age of drone warfare. But it is set to shake up America&rsquo;s stale defense contracting business. New players are emerging.
The legacy defense giants have been slow to adapt to this reality. They remain focused on cash cow programs.
And for a while, that playbook will work. But the future of warfare looks like it will be dominated by unmanned systems. And the big, slow, expensive drones they make today are clearly not cut out for this new world.
American defense giants have coasted for decades on gold-plated billion-dollar contracts. They have failed to produce effective hypersonic missiles and affordable attack drones. Their reign won&rsquo;t last forever.
I&rsquo;ll be watching to see which companies emerge as leaders in this new tech. Many of them are private startups at this point, so aren&rsquo;t investable (yet).
But disruption is finally coming to the defense industry. It&rsquo;s about time.

dr-hero-img-10-15-26

The Future of American Drone Warfare

Yesterday we explored the archaic concept of long-term investing.
In a world where the average investor holds a stock for 3 minutes, I believe it&rsquo;s wise to be contrarian here.
Today, we&rsquo;re going to cover my favorite forever investments. Stocks I plan to hold for the next 10 years or longer.
Without further ado, let&rsquo;s get started.
<h2 class="centered subhead" style="text-align: center;">Oil &amp; Gas</h2>
At its peak back in 1980, the energy sector (oil and gas) made up a whopping 30% of the S&amp;P 500. Today it&rsquo;s about 3.5%.
I first <a href="https://dailyreckoning.com/billy-bob-vs-stop-oil-lunatics/">posted</a> the chart below back in June of 2025. Energy has since moved up to about 3.5%. Still a drop in a bucket.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6AvfPlAdQj2mGoreHvCkni/77b5fa4f27b9786aa6961b279a83e1fc/dr-img1-10-14-26.jpg" alt="image 1" />
Source: <a href="https://x.com/TaviCosta">Tavi Costa</a>
Meanwhile, the Magnificent 7 tech giants make up 35% of the S&amp;P 500. Out of a 500-stock index, just 7 of them make up 35%. And if you combine the top 41 AI companies, it moves up to 49% of the entire index. Talk about concentration risk&hellip;
The 3% stat got my attention. And as I dug in, I realized that the world hasn&rsquo;t invested nearly enough in oil production over recent decades. Large oil discoveries have plummeted by about 60% since the early 2010s, when shale was booming.
There&rsquo;s a widespread perception that oil is the past, and green energy is the future. This is bogus. Oil demand is still rising, and alternative sources are nowhere near ready to replace it.
Much of the world&rsquo;s easy oil has already been extracted. Additionally, the green new scam and other ESG mandates have caused many asset managers to quit oil and gas entirely. They call it divesting.
I call it an opportunity.
<h2 class="centered subhead" style="text-align: center;">Oil Picks</h2>
No surprise here. My favorite long-term oil stock remains Petrobras (PBR or PBR.A).
Brazil&rsquo;s Petrobras is the cheapest major oil company in the world, by far. And there is some political risk with the government owning a big chunk of the firm.
But I believe the juicy dividend yield and low price more than make up for the potential downsides. Besides, Brazil is experiencing a stock market boom and if they mess with PBR shareholders, that&rsquo;s going to end. Additionally, it looks like the country will soon have a conservative/capitalist president.
To be clear, I wouldn&rsquo;t aggressively buy Petrobras here. It has more than doubled since we first <a href="https://dailyreckoning.com/trading-the-trade-disruptions/">featured</a> it last year, and we&rsquo;ve been banging the drum on this stock for 18 months.
But if the wars in Iran and Ukraine end, and the price drops, that&rsquo;ll be an ideal time to pounce. Petrobras can profitably sell oil at $35/barrel. As a bonus, they&rsquo;re insulated from chaos in the Middle East. In fact, the company benefits from it. They also operate 11 oil refineries.
My plan with this one is simple. Reinvest the dividends and let it grow for decades.
If you&rsquo;re looking for a safer U.S. oil stock, ExxonMobil (XOM) is also solid. I own that one too.
And if you belong to any of Jim Rickards&rsquo; services, keep a close eye on their energy picks. Jim and Dan are on fire lately. These guys understand this sector like few analysts do.
<h2 class="centered subhead" style="text-align: center;">Emerging Markets (EM)</h2>
Long-suffering readers are rolling their eyes right now. Emerging markets, again?!
Yes. I enjoy buying growing companies at under 10x earnings, with 5% yields and <a href="https://dailyreckoning.com/buy-the-dip-in-vale/">irreplaceable</a> assets. And the only place you can reliably do that today is EM. The S&amp;P 500 yields a pitifully small 1% today. That&rsquo;s a giant red flag for me. Too expensive.
I&rsquo;ve talked enough about Brazil lately (<a href="https://dailyreckoning.com/viva-brasil-a-3x-in-the-making/">read this</a> if you need to get caught up). So I&rsquo;ll make the pitch quick. The iShares Brazil ETF (EWZ) is the simplest way to play it. I plan to hold my Brazil positions for years to come, and hopefully longer.
Caveat: if our Brazil picks pull off a 4x in 4 years, it may make sense to take some profits early. Still, I hope to hold some of my Brazilian positions essentially forever (namely PBR and VALE).
My other favorite EM &ldquo;forever investment&rdquo; is the Cambria Emerging Shareholder Yield ETF (EYLD). This is a unique &ldquo;shareholder yield&rdquo; ETF. It selects companies based on their total shareholder yield, which is a combination of dividends, buybacks, and debt paydowns.
The fund owns 108 companies from across the world, but they are concentrated in Asia. Vietnam, South Korea, Taiwan, and about 16% China. These are mostly industrial companies that don&rsquo;t even trade in the U.S. So it offers excellent diversification.
I&rsquo;ve owned this fund for more than 8 years. Even when EM wasn&rsquo;t doing well, it always generated a nice yield, which I reinvested in more shares. The dividend yield is around 4.3% currently, and the expense ratio is 0.6% per year.
I plan to buy more EYLD in my 401k throughout this year.
Those are my favorite forever investments today. If I add anything else to the list, you&rsquo;ll be the first to know.

dr-hero-img-10-14-26

My Favorite Forever Stocks

Most investors have horror stories from their early trading experiences. I certainly do.
My weapons of choice were trashy penny stocks and 10x leverage.
No, my investing career did not begin in a blaze of glory. But the truth is, almost nobody&rsquo;s journey does.
For better or worse, mistakes are how we learn.
<h2 class="centered subhead" style="text-align: center;">A Glimmer</h2>
Before my writing career, in the early 2000s, I ran a one-man marketing consultancy. My specialty was building Google advertising campaigns for small companies.
It was a nice little business. And I got to know Google&rsquo;s systems very well. They had a truly revolutionary product, and most people didn&rsquo;t realize it.
Google IPO&rsquo;d in 2004 at a split-adjusted price of $2.13 per share. I ended up buying in 2005 at around $5.25 per share.
As the years went on, I bought more Google on dips. I knew this company was going to be a monster, because I worked with their products every day. I fell in love with GOOG.
In the end, I held onto those Google shares for 15 years, selling (too early) in 2020. At one point Google was over 60% of my portfolio. But that was fine, because I knew the company inside and out.
This is what I mean by &ldquo;marrying&rdquo; a stock. You buy a company you understand deeply, and add to it on dips. This is the ideal stock market relationship.
Warren Buffett famously said his ideal holding period for an investment is &ldquo;forever&rdquo;, and the older I get, the more sense it makes.
<h2 class="centered subhead" style="text-align: center;">Lessons</h2>
After those first few years of &ldquo;investing&rdquo;, I had to stage an intervention with myself.
I looked at the results from my IRA (long-term) account and compared it to my trading account. The difference was stark.
One was growing steadily, and the other appeared to be some sort of black hole for money.
Truth is, I had no business trading back then. I was in my early 20s and didn&rsquo;t have the knowledge, patience, or skills required. This is the biggest mistake investors make, especially new ones. Frequent trading by amateurs almost always leads to account implosion.
For the next 7 years, I didn&rsquo;t trade at all. Only long-term investments. And it worked.
Eventually I started dabbling again with trading, but with caution and strategy this time. Here&rsquo;s how I maintain balance these days.
<h2 class="centered subhead" style="text-align: center;">A Smarter Path</h2>
In 1960, the average holding period of a stock investment was 8 years and 7 months. Today it&rsquo;s just 7 months. Almost nobody holds investments long-term these days.
This is one of those times where it pays to go against the grain.
I believe that the core of every portfolio should be long-term positions.
When you hold investments for long periods, it gives them time to compound without taxes constantly interrupting the gains. And it removes human emotion from the equation, which is a great thing in the investing world.
About 83% of my portfolio today is in long-term investments. The other 17% is cash, which I use to fund occasional trades. But an individual trade is never more than 1% of the total, and usually far less.
Regarding &ldquo;long-term&rdquo; investing, some of you are thinking &ldquo;I don&rsquo;t have that much time to wait&rdquo;. I understand. Inflation is problematic, the job market is terrible, and the future uncertain. A lot of people have catching up to do.
But don&rsquo;t go out and risk everything on half-baked ideas. If you&rsquo;re determined to trade, take advantage of the experts we have here at Paradigm Press.
We have world class traders here, and they&rsquo;ll make your trading journey far more enjoyable. Attempting to do it on your own is going to be tough sledding. The tuition to become a successful trader on your own is steep. Most people never make it.
But don&rsquo;t forget about the long haul part of your portfolio. Statistically, that&rsquo;s where most of the magic happens.
This week we&rsquo;ll discuss which stocks I consider to be marriage material today.

dr-hero-img-10-13-26

Settle Down and Marry a Nice Stock

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Articles by Adam Sharp