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The Ultimate Portfolio to Protect Yourself from the “End of America” Scenario

March 18, 2011 by  

The Ultimate Portfolio to Protect Yourself from the “End of America” Scenario

Now that my colleague Porter Stansberry has made national news with his dire "End of America" video, I’m hearing a major question over and over…

To paraphrase a hundred emails, the question goes:

If you guys are right about the "End of America" prediction and a currency crisis, why on Earth would you recommend investing in U.S.-based stocks?

Just in case you’re not familiar with the "End of America" scenario, know that it isn’t off in the future. It’s right here, right now.

What you read and see every day is what the End of America looks like. It’s not a Mel Gibson post-apocalypse movie…

It looks more like this: The Fed keeps interest rates at 0 percent, prints $1.5 trillion in one year, and then decides to become the biggest holder of Treasuries. A scam-oriented financial system penalizes savers and rewards the biggest risk-taking speculators. Home prices plummet. The government takes over the car manufacturing, home mortgage, financial services and health care industries. The dollar is worth 35 percent less than nine years before.

Unemployment is 17 percent, but the government reports it as 9 percent. Inflation is causing food prices to spike, but the Fed reports inflation is under control. Moving money around in any amount is risky. Leaving the country and reentering it is risky. Huge protests take place (like in Wisconsin) when politicians propose spending cuts. The protesters can’t stand the thought of not riding on the taxpayers’ gravy train.

The End of America isn’t "out there." It’s right here, right now. The question isn’t what will you do if it gets here, it’s what are you doing now that it’s here?

For most folks, the thought of owning U.S. stocks in this sort of environment doesn’t make sense. For me, it does… But you have to own the right stocks. And the right stocks are a group of companies I call "World Dominators."

World Dominators are big companies that are No. 1 in their industries. They dominate their markets, obliterate competition, gush cash, pay rising dividends year after year, and—since they probably aren’t going to rise 300 percent in a week—are generally underappreciated by the average investor.

World Dominators ought to be the core of your stock portfolio, the anchor that performs for you over the long term, providing safe, steady returns (mostly via relentless dividend growth) and providing you with an income that will beat inflation better over a lifetime of investing than all the gold stocks in the world. They are the ultimate "armor plated" wealth-preserving vehicle for the "End of America."

World Dominators are so hard to compete with they sometimes get sued for it, like when the Justice Department sued Microsoft and the European Union sued Intel.

Of course, it didn’t matter to either company. Microsoft still has 90 percent of the personal computer operating system market. It’s got $40 billion in cash and securities and less than $12 billion in debt. It still has 80 percent gross profit margins. Intel lost its $1.25 billion lawsuit. The result: It is one of the financially strongest companies on the planet, stronger than most U.S. banks. It has $21 billion in cash and less than $3 billion in debt, and it makes 44 times its interest expense in pretax profits. It has 50 percent-plus gross profit margins.

World Dominators are so good at what they do, regulatory bodies often try to prevent them from putting other, higher-cost providers out of business, like when Walmart was denied a license to start a bank. All the big Wall Street bankers knew it would put them out of business by not charging super-high fees.

When World Dominators get cheap enough to buy, they are the only "sure thing" in the stock market. We bought Intel in April 2009. Less than two years later, we’re up 50 percent. Likewise, my 12% Letter readers are up 76 percent in just over two years with cigarette giant Altria, which they bought in November 2008 (26 percent of that gain is from dividends alone). Payroll dominator Automatic Data Processing is up 51 percent since we bought in October 2008.

World Dominators are not frauds. They’re not financially weak. They’re not losing money. Their businesses aren’t shrinking. They might have laid a few people off and had lower sales in 2008 or 2009… But for the most part, the crisis left them untouched compared with almost every other business in the world.

You want to know what the greatest investor in history owns? His name is Warren Buffett and he owns World Dominators. His company, Berkshire Hathaway, is Coke’s biggest shareholder. He also owns Procter & Gamble, Johnson & Johnson, Walmart, UPS and ExxonMobil. Warren Buffett buys World Dominators because he knows they’ll continue to beat the competition for many years to come.

If you’re concerned about defending your wealth from the End of America, absolutely own some gold, silver, energy and agricultural assets. But keep a good chunk of your portfolio in World Dominators.

Bought at the right price they are the greatest stock investment idea ever. They offer safety. They offer large and growing income streams. They offer huge profit potential. And right now, many of them are as cheap as you’ll ever see. It is truly a once in a lifetime opportunity to get started.

Good investing,

Dan Ferris
Editor, The 12% Letter

PS: For more insight and actionable investment advice on protecting your wealth in a difficult market, please click here.

Dan Ferris

is the editor of The 12% Letter, an income-focused research advisory which looks for the market's best dividend-growth stocks. He is also the editor of Extreme Value, a monthly investment advisory which focuses on the safest stocks in the market: great businesses trading at steep discounts. As a result of his work in Extreme Value and The 12% Letter, Dan has been featured several times in Barron's, the Value Investing Letter, and numerous financial radio programs around the country.

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  • bob wire

    After I lose my home and provisions, you might consider me just another wolf in the forest. I think it would be wise to prepare for me. What gold and silver might do for you, I’m not completely sure.

    • Thamera

      I have wondered the same thing. You can’t eat it. You can’t burn it. I’m certainly not as prepared for an emergency as I would like to be but I hope that they efforts I have been making in the past decade will help and I do have a garden :/ What I worry most about are my children. I try to teach them to be strong both physically and mentally, and self-sufficient. I am very grateful for a step-father that taught us survivor skills since I was 8 years old. I just hope I never have to rely on those skills. I much prefer my warm house and modern conveniences :)

    • Warrior

      And just last week I was watching a congressional budget hearing where the subject was inflation and testimony was given about how inflation was almost non-existent right now. Well the repub members weren’t buying the testimony but a demo member brought up the fact that flat screen TV prices are coming down. Well hot damn, that gave the idea that I should get working on my idea to make a flat screen that I can drive to work and then eat it for lunch! One small problem I’m stumped by is… how to get back home? Anyone?

      • James

        Warrior, About 90 years ago, gold was $20/oz., in 1980 it was $800/oz., and, now, it’s $1400/oz. That’s inflation. When I was a kid, bread was 10 cents a loaf, now it’s $2.50-3.00 per loaf. Gasoline was 9 cents per gallon, now it’s $3.50/gal. Ben Bernanke just recently said he would strive to keep inflation at 2%, but flooding the economy with borrowed unearned dollars will keep the rate much higher. In my opinion, the dollar is being deliberately inflated out of existence. It’s the world’s reserve currency and the fed will stick them with worthless paper.

      • Cawmun Cents

        That ones easy Warrior.Jump on a gubment mule(Democrat)and ride em’ till you get close to home.After all,he’ll be using op’s money to get where he needs to go.

      • http://Illinois'17th Old Henry

        Warrior:

        Put wheels on your windmill, which of course, is powered by your solar panel….

    • James

      Bob W., Gold and silver aren’t investments, they simply keep pace with inflation. As the dollar depreciates they increase in price and in times of crisis usually keep ahead of it. Silver, now, is around $35/oz., back around Thanksgiving it was $27/oz. If you had, then, placed $27 in your mattress, it would, now, be worth only 77% percent of that. Gold and silver are storehouses of value, they go up in price, like all commodities, as the dollar loses it value. If too many people buy gold, I’m sure Obama will outlaw possession of it. For that reason I would recommend silver.

      • Al Sieber

        You got that right James, I’ve been mining gold and other metals for over 35 years, gold and silver is just a hedge against inflation.

      • http://www.theworldprepared.com TEEMGO

        Learn how to invest in silver at http://www.silver1up.com/rainmaker

    • Sprock

      I suggest you Google Porter Stansberry, and after your eyes stop bleeding from all the indictments and fraud investigation stories, you find a REAL business expert that doesn’t spend all his giving depostitions. Other than that keep stockpiling weapon, bullets, “food Insurance” (that’s priceless, and Gold.

    • Sidewinder

      Although there is much truth in what Porter Stansberry says…I would not rely on that shock jock for reliable information.
      He is selling something…so buyer beware.
      He also cherry picks his facts, and shows “facts” that are taken out of context.

      There is lots of other information concerning the US dollar crisis and our fate as “owners” of the global reserve currency.

      I too believe the dollar is currently terminal,
      but I would look to other sources…not Stansberry.

      • Al Sieber

        Sidewinder, I agree with you, I read about that on another site somewhere 2 months ago, or a e-mail. you can “Goggle” his name and find out more.

      • James

        Sidwinder, Porter Stansberry is selling something, he’s selling advice on how one should invest their money to survive the coming crisis. I subscribe to his 12% newsletter which advises to invest in divident elite stocks that pay ever-increasing dividends. It’s a very conservative safe investment that keeps pace with inflation.

  • http://mine d:-)

    I was reading stansberry’s report, he was suggesting buying farmland, that was his big secret, farmland. How tha hell am I going to buy a bunch of farmland, when I can barely pay for my home… These guys put out all this info, but not how to do it, or where to buy it from. Most of the info is way above the average joe’s head. I am canceling my subscription to them.

    • s c

      D, you need to understand that not all food grows on trees. Much of it is grown in soil. If you have farm land, you have a chance to grow some of your own food.
      When America’s stuff hits the fan, forget going to a grocery store. Forget the miserable, freedom-hating bastards you probably helped elect. If you live in a population center, forget ‘neighbors helping neighbors.’
      No one can tell you everything you need to know. Some things you’ll have to figure out on your own.
      If you can say to yourself “I don’t need Uncle Scam for anything,” you might survive.

  • http://MSN.com John S

    George Soros talks about “the creation of a New World Order”, he discusses the need for a “managed decline” of the U.S. dollar and he talks at length of the global need for a true world currency. Soros is trying to accomplish lines up with the goals of the international banking elite, but what they don’t like is that Soros won’t stop publicly talking about a global currency and a “New World Order”.

    Also, Soros does not seem to understand that both sides of the political spectrum in the United States are deeply influenced by the international banking elite. Sadly, the truth is that the same handful of elitist organizations has dominated the cabinets of every single president that we have had since World War II. No matter what president we elect, it is always the exact same organizations that always dominate their cabinets.

    Soros has also been a tremendous backer of Barack Obama, although lately Soros seems a bit disenchanted with him. Barack Obama promised to bring CHANGE to America. What few people understand is what that change will look like. A couple years ago, the government gave over a TRILLION dollars to corrupt bankers in the bailout! Protecting Wall Street, while Main Streets were dying! The Federal Reserve is unconstitutional.

    American people do not want any part of a new “global currency”. American people do not want any part of a “New World Order”. American workers must now directly compete for jobs with those making slave labor wages in China and India. Just go into just about any store across the United States and start picking up products to see where they were made.

    A global economy is bad for America and a global government would be really catastrophic for America. Has the NEW WORLD ORDER or the Global GOVERNMENT begun?

    • http://MSN.com Robert Carter

      Please don’t worry. The New World order want a supreme, god-like power over others, clearly it would have a short life. But none of this takeover by the New World Order would succeed so easily. Remember, the new world order will collapse someday. Powerful humans come and go. They were spooky, but they didn’t last.

      • http://MSN.com RonaldL

        I believe so…

    • BigBadJohn

      Everyone talks about the NWO and it being brought on by Soros. Just what do you think the NWO will actually look like? A place where the haves have more and everyone else is as poor as endentured slaves? If that is what you think the world is headed for, you need to take the blinders off.

      The last decade represented the greatest transfer of wealth to richest 1%. When the bailouts started, the Democrats wanted to stop the big bonuses that were being paid to companies that accepted bailout money – the REPUBLICANS stopped that.

      When the Sh– hits the fan, people with money, will make even more.
      Just look at the great depression, if you were rich, you got even richer. These people are not the same ones who push for social welfare programs for masses, they are the greedy banker and businessmen who walked away with 5 trillion while Bush was president and they want the rest now.

      • Bruce D.

        I do not think you know much about the Great Depression. There were many rich people that were jumping off buildings to their death. The few that became wealthier use their money to have more control over government. The biggest fear of a new world order is that government will assume more and more power over the individual. Because liberals want government to confiscate wealth they encourage more government power with the thought that they will benefit from it. They are big on group rights and group compliance and lack the basic human integrity to value individual freedom that a big government will take away.

    • Cawmun Cents

      While I agree with the sentiments you communicated John S,I have reservations about coining the phrase “American people”.It seems increasingly apparent that we have or are quickly losing our identity.Much is made out of”Identity Theft”in the public arena,but what is never talked about is that the theories of many people cause divisions leading to easy conquerablity.The truth be told,the “American people”as you call them are victims of identity theft.Instead of personal financial peril,we have all been subjected to it on a massive scale.There are entities afoot that would see us continually at each others throats,rather than grouped together with a unified purpose.By keeping us mentally tuned to a particular agenda,whether it is personal or humanitarian in nature,we can be easily subjugated when devisive subjuects are being discussed.What may become necessary is for us all to drop our petty differences with those we disagree with,and unite in to a solid group,with the intention of preserving our interests.Now that would be what the”American people”would do.We should take back the identity that has been stolen from us as a nation.Agree in principle to swear allegiance to one another so that this great nation shall not perish from this earth,(as has been stated before).E Pluribus Unum,(out of many…one),should not be the motto of the Federal Reserve,but a rallying cry for us all.Only then can we with the help of almighty God, preserve our”American people’s”way and standard of living.

    • http://Illinois'17th Old Henry

      JOhn S:

      New World Order. Think old man Bush. That was his mantra. Then we had Billy-boy and China-Gate which the media sluffed over while he sold us out to the Chicoms.

    • meteorlady

      I was thinking as Obama committed to the no fly zone over Libya that we are there. The UN asked and Obama ran to step up and spend more of our money. No country, or the UN, has the right to start a war in a sovereign country involved in a civil war.

      As for inflation – anyone that goes to the grocery store of buys gas knows that it’s well on it’s way and it’s not steady at 2%.

  • soldier

    By giving to world dominators, you also give to genocidal causes. Bill Gates, afterall, dreams of a planet with 500 million living in Mega Cities where the elites can froilick anywhere, rape anyone, enslave anyone, and otherwise do what they want, while we are left in the mega cities. See Alex Jones End Game.

    Many people think Alex is crazy. More and more everyday, he seems to be more and more right. There is indeed a conspiracy of the elites against the serfs.

    But hey, go back to picking on unions who take advantage of the situation – not saying they are innocent -. You might want to pick on the people at the very top who decimate millions, steal trillions, and live better than God Himself.

    • http://MSN.com Elena

      Africa, China, India should decrease their population dramatically; these countries have major social and economic hurdles to overcome to provide their populations with the much needed resources.

      Overpopulated world will put stress on the available resources. This stress will affect the quality of life by decreasing the availability of clean water and food which in turn deteriorates living conditions, leading to epidemics and pandemics.

      • soldier

        So, assumming you agree with keeping a world at 500 million people, what method(s) are ok with you to achieve that result? Neutron bombs? Fertiliity vaccines? Forced abortions if you have more than one child?

        • Cawmun Cents

          Soldier,if what you were reffering to was the eventual amount of population on the earth,then your assumptions would be well-founded.However the 500 million which you refer to infers that they are the elite which use most(the lions share)of the resources.One group of such a nature needs a base for slave labor.Hence the phrase,”workers of the world unite”.At first glance it seems to be a phrase which unites hard working union members.But further detective work shows that it is a call to the slave force which will serve the elites.Despite what Trumpka tells the masses,there is a hidden agenda behind the socialist theorem.It is simply put to force servitude upon the unwary,by seeming to provide extra benefits for the working class..And the masses being fed candy-coated fecal matter,are now rising to the only magnificence they will ever achieve. The semi-overthrow of supposed tyrants,which will necessitate installing well conceived(heeled)democratic socialists into positions of power.Then the transformation which is spoke of in lore will be complete.Then the 500 million will have their stranglehold on the resources,and overlord the common man.

      • Richard Pawley

        Clean water is something that Two Billion people have to worry about now, and it is becoming a problem for the whole planet, as it is in this country. Florida gets 90% of it’s water from shrinking aquifers and so, I believe, does Kansas. Experts say Lake Mead could dry up sometime in the 2020′s. Beijing, China has to go below 3,000 feet to get water and our water tables are dropping in various places because we have been using the water for crops. Whatever your plans for the future, consider water availability in the equation. Even the non-perishable foods that some are buying depend on water to bring them to an edible stage. These are interesting times we live in and they are going to get a whole lot more interesting.

        • meteorlady

          I believe that you are correct. Water is going to be the commodity that everyone needs and wants. T. Boone Pickens is buying up land that has water under it. He’s sitting on top of a lot of it right now. He has even has some of his land declared a water district so that he can drill and suck water from under land that does not belong to him.

      • http://MSN.com John S

        Frank Fenner, a professor at the Australian National University, who eradicated small pox. Now the 95-year-old, Fenner is preoccupied with human extinction.
        “Homo sapiens will become extinct, perhaps within 100 years. A lot of other animals will, too. It’s an irreversible situation. Mitigation would slow things down a bit, but there are too many people here already,” he says.

        When the population increases to 8 or 9 billion, Frank Fenner imagines people will fight over food and clean water. We are over consuming our resources as if there were no tomorrow, or future generations.

      • AMJ

        Are you willing to put yourself, your family and your friends on that chopping block. People are important. People are the resource. If you want to facilitate change for those countries, change their governments. Only in a corrupt government do people suffer. When government is for the people, they prosper.

        • http://MSN.com James Barnes

          So can we export an America-style democracy? First, I disagree with your premise of change their governments in those countries. America can’t export democracy to different countries. We can’t invade those countries by sending them our view of democracy it will hurt those countries and destroy the American economy.

        • http://MSN.com Frank Cheryl

          People are resources but people can’t live without clean water and food. People have survived without food for weeks or even months, but go without water for even just one day and the survivor will be in desperate straight indeed. Water has been and still is the world’s most powerful resource.

    • BigBadJohn

      you get it. Unions grew too big and powerfull, but without them there never would have been a middle class, only haves and have nots.

      That is what the greedy rich would like to see a world where few own and control everything and the poor. They have the money to put any spin on any situation and keep people at each others throats instead of paying attention to who is really out to get you.
      As long as the masses think in black and white – my party good – your party bad – those invisible, behind the scene, elitist can play both side like puppets.

    • Al Sieber

      Soldier,I’ve seen “End Game” and he talks about the “Georgia Guide Stones” where they want the population down to 500 million. thanks for bringing that up.

  • Rooney

    Open questions..

    If the government owns trillions of our dept, who do we pay the interest on those trillions to?

    When the Fed “prints” money, they apparently buy bonds. Who is the interest paid to and why are we paying anything to have our own money printed?

    • Patriot

      We owe our debt to the Banking elite, the Federal Reserve is a private bank owned by the Banking cartel of Europe and the US, we owe our debt to these elitists. Once hyperinflation hits, we will not be able to pay this debt back and all goods will be too expensive to buy, what then? It is coming faster then we all know!

  • home boy

    because they want to be greedy right to the end.

  • Rooney

    Again, why to we essentially pay the fed to print our money?

    • James

      Rooney, Good question. No new money can come into existence unless it’s borrowed from the federal reserve banks. The federal reserve then authorizes the U.S. Treasury to print up (or mostly by adding numbers to the treasury’s bank account), only about 2-3% is actually printed or coined. At present, the national government borrows $0.42 for every dollar it spends. This flooding of the economy with borrowed, unearned money is inflation, on a gigantic scale. And all of this borrowed money adds to the national debt and must be repaid, with interest. It’s the greatest scam ever devised by man.

      • Alex Cole

        Read Modern Money Mechanics, published by the Chicago FED as a primer for new hires. Money is created in a fractional reserve system every time a debt is incurred- any debt, anywhere. Sign a credit card agreement with a $5000 limit when the reserve rate is 10% and you create $45000 brand new dollars out of thin air. I will agree it is aggregated by the Fed. And the interest on that is ultimately paid back to the Fed- a network of privately held banks.

        • Alex Cole

          Absolutely the best scam ever created-

  • Will duRANT IV

    RE: Now that my colleague Porter Stansberry has made national news with his dire “End of America” video, I’m hearing a major question over and over…

    Does this mean that lots of people actually sat through that teleprompter-like “video” read by an emotionless, expressionless drone? I bet Stansberry is making a fortune in US paper dollars selling HIS OWN paper. Wow! What a businessman!

    —–

    WILL duRANT IV reminds you that it’s time to Restore America’s National Territory, Tongue, Traditions & Testosterone.

  • Alex Cole

    All governments are corrupt. Most are oligarchies. No dictator can rule without ‘help’. The people who provide that help get rich. The rest are ultimately serfs. The only purpose of allowing a middle class to develop is so they can concentrate wealth so that its easier for the oligarchs to steal it every 75-100 years or so. Throughout history. Getting more effective each time.Technology has helped. After all, why pay 10,000 humans a decent livable wage, when technology (or overseas sourcing ie slavery) can cut costs by turning those 10,000 jobs into 200- and the other 9,800 be damned.

  • jopa

    Big Bad John:There has never been a more true statement made on this site.If only everyone would read it and think about it for a while.Thank you.

  • Thamera

    Jopa: We agree on that

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