Is The U.S. Becoming An Emerging Market?

At Porter & Co. we are determined to be your best source of investing, economic, and financial insight, and your first choice for information about what to do with your money… in the entire world, bar none.

This is Porter & Co.’s Sunday Investment Chronicles. Every week, the Porter & Co. research team pores over thousands (and thousands) of articles, reports, social media posts, analyses, regulatory filings, and anything else we can get our hands (and eyes) on to understand what’s happening in the world of investing and finance – and to uncover the most original, compelling, and double-head-fake ideas…

… and we curate the best of those here. We do it all the old fashioned way: Hours of reading and brainpower (no AI curation here). We read everything – for you.

In Case You Missed It… What We Published Last Week

In Monday’s Daily Journal, on a day when gold was reaching yet another new high, Porter said that being able to predict the price of gold is one of the most valuable secrets in the world.

For centuries, the world’s most powerful bankers (the Medicis, the Rothschilds, the Warburgs, the Morgans, etc.) could accurately predict future asset prices, such as real estate and commodities, currency exchange rates, and, most importantly, gold, giving them immense power.

Porter explained that Kurt Richebacher, one of the last living original Austrian school economists, taught him the secrets behind the algorithms that predict the price of gold. Knowing this is why Porter has been so bullish on the precious metal this year. He said:

I doubt there were any money managers in the U.S. who would have put 25% of their client accounts into gold and Bitcoin a year ago, like I did with my recommended allocations in Porter’s Permanent Portfolio. But I was even more aggressive with my personal account. Levered 2x, I put about half of my equity into gold – via shares of Franco-Nevada (FNV) – and Bitcoin.”

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Wednesday’s and Friday’s Journals were turned over to coverage of the Porter & Co. Annual Conference, which took place during the week at Porter’s farm just outside Baltimore. You can read about it here and here.

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Porter’s presentation on Wednesday of the Annual Conference fueled this week’s Big Secret On Wall Street… 

Porter’s goal with Porter’s Permanent Portfolio, he told attendees, was to improve on the returns of Harry Browne’s Permanent Portfolio without increasing the volatility of the overall portfolio – to create a superior Sharpe Ratio, which measures how much return is achieved per unit of risk. 

And he succeeded. 

Since October 2024, Porter’s Permanent Portfolio has returned 24.8% versus a return of 16.3% for Harry’s original Permanent Portfolio. And, by the way, it beat the S&P 500’s 17% return over this period.

Now, after a year, it was time to update and re-allocate it. The new version includes an annual rebalancing of all four portions of the portfolio to 25%, allowing new investors an ideal entry point. However, it also includes additional changes to the allocations – which you can read about in Thursday’s Big Secret issue.

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Ross Hendricks delivered to Trading Club members an extended issue… recommending shares of a digital forensics company that provides tools and platforms for law enforcement, government, and business clients to legally access, analyze, and manage digital evidence from mobile and other devices.

It’s a two-part trade that involves buying calls and selling puts. 

But the story got way more interesting than the trade… as Ross delved into insider activity at the company that hints at a potential sale of the company to a larger competitor, plus investing in an international stock as a way of getting access to upside on this company. 

For Partners and Trading Club members who missed it when it came out this week, you can read about it here. 

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And Marty Fridson’s Distressed Investing issue hit readers’ inboxes just as he was wrapping up his conference presentation on Thursday. He said that a deep knowledge of bankruptcy law is essential in distressed-debt analysis. He concluded:

As distressed-debt analysts, we have to keep tabs on these developments. Typically, our most likely case is that the bond issuer will manage (if only by the skin of its teeth) to make all the required interest payments and repay the principal at maturity. But we also have to estimate how well investors’ principal is protected in the less likely case of a default. Those calculations can be greatly affected by legislators or jurists changing the rules in the middle of the game.”

The Best Things We Read Last Week

Out of the hundreds of sources of investment, finance, and economics news and insight we regularly review – our Bloomberg terminal, hedge-fund letters, annual reports, the financial news media, Securities and Exchange Commission (“SEC”) filings, investment newsletters, newspapers, X (Twitter) threads, conferences, podcasts, and more – here’s what we’ve read that we think you might find interesting.