This Billionaire’s Secret Could
Double Your Income Overnight
Lock in growing 7.5% dividends and
15% gains in 2016 with this
Two decades ago, Howard wasn’t satisfied with average returns. That’s why he decided to leave his cushy, high-six-figure job to start his own firm – and execute a new investment approach he had been refining for years.
It wasn’t a no-brainer decision by any means. He toiled in the trenches as an equity analyst on Wall Street, rose through the ranks of a major global firm to become Director of Research, then VP and senior portfolio manager for convertible & high-yield securities. Finally, after decades of paying his dues, he achieved the coveted Chief Investment Officer role.
All Howard had to do was stay in the position and he and his family would never have to worry about money again. But he just knew he could make millions more if he made the leap and implemented his “calculated contrarian approach.”
Howard was wrong there. He didn’t make millions… he made billions.
Fast forward to today, nearly 20 years later. His firm has since averaged 19.9% annualized gains. This former rising star is regarded as one of the shrewdest minds on Wall Street… yet few outside of the investor-class know his name.
Over the next few minutes, I’m going to tell you more about Howard and exactly how his secret could double your dividend income almost immediately. But first, a bit about myself…
My name is Brett Owens and I’m an unabashed dividend investor. Ever since my days at Cornell and all through my years as a startup founder in Silicon Valley, I’ve hunted down safe, stable, meaningful yields.
For the last 10 years, I’ve been investing my startup profits using the very same approach as this guru-of-gurus. It’s helped me find 6%, 7%, even 8%+ dividends with plenty of double-digit gains along the way.
This billionaire’s secret doesn’t involve options trading. And there are no obscure tax issues to deal with. It’s simply a methodology for buying and holding the right stocks at the right time, to maximize your income and minimize your downside risk. In fact, most dividend investors could increase their income by 50% or even 100% with just a few simple trades… if they only knew how.
But before I go into further detail, it’s important you understand something…
I’m Worried About Your Future
Nearly every one of the independent investors I talk to are so desperate for income these days that they’re piling into practically any large stated dividend they find.
On the surface this may seem like a sound approach with the markets at elevated valuation levels – to buy companies that are paying out real cash to their shareholders. But my research shows this is one of the most dangerous strategies to employ.
The yield on the S&P 500 is just 2.1% today and less than 40 of the 500 firms pay more than 4%.
And many of the companies that do pay 4% or better today will soon find themselves in a bind, if they haven’t already. Tried and true models are becoming obsolete faster than ever, and fundamental analysis is merely a starting point. Investors must look beyond the obvious numbers to determine what’s driving them.
Former dividend darling Kinder Morgan (KMI) recently reminded investors why they must understand exactly what’s funding the payout they love receiving every quarter.
KMI investors who didn’t see the dividend cut coming were flying blissfully blind. More sophisticated investors saw the business issues a mile away – and sold the stock down 61% in the six months prior to the actual payout decrease announcement…
Smart Investors Sniffed Out KMI’s Dividend Cut 6 Months in Advance
ConocoPhillips (COP) also dropped 46% in the year leading up to its dividend cut on February 4th. Again, the wiser money sniffed out the trouble well in advance. Conoco’s yield nearly doubled from 4.3% to 8.3% “the wrong way” – via a stock price that was chopped in half.
Conoco’s Yield Trap Hooked “First-Level” Income Investors
These big losses haven’t been confined to the oil patch, either. Last August I warned my subscribers about specialty retailer Destination Maternity (DEST). It had lost money in two of the previous three quarters, but stubbornly insisted on maintaining its $0.20 quarterly dividend (which was a high 8% at the time).
DEST bragged that it was seeing 3% annual growth in online sales. But in reality, that was terrible news – the industry was growing much faster, which meant DEST was not only losing money, but also market share!
Over the next 8+ months, DEST lost 40%… until management finally suspended its dividend indefinitely on March 30.
DEST’s Dividend Denial Didn’t Fool Everyone
Are there dividend disasters like KMI, COP or DEST hiding in your portfolio? I come across more of them every day, many of which are well-known companies that have done investors reasonably well for years, but whose circumstances have recently changed.
I’ll bet the “next DEST” is shaky telecom Frontier Communications (FTR). Its gaudy 7.6% yield is hooking the rubes. But long-term debt has ballooned 74% over the last year, and its payout ratio is also heading in the wrong direction (81% of free cash flow, up from 67%).
In a desperate attempt for growth, the firm is spending $10.5 billion – roughly twice its current market cap – for internet, phone and TV assets from Verizon (VZ) in Florida, Texas and California.
The deal will triple Frontier’s size, but history isn’t on its side. When Frontier took over accounts from AT&T (T) in Connecticut, it triggered a rash of service troubles that had complaint lines at consumer-protection agencies and state regulators ringing off the hook. This troubled telco last cut its dividend in 2011 – its dividend is living on borrowed time again.
Dividend disasters like these have forced many income investors to move to the sidelines and to accept the paltry returns of traditional safe havens. Others, in a typical sign of an over-enthusiastic equity market, are rushing to stocks they would normally shun in search of much needed income.
They’re looking at the usual statistics such as trailing yield, stated yield and other “simple” data points, but failing to dive deeper into the real business behind the numbers. They’re buying issues with serious skeletons in their respective closets.
When these skeletons appear, they’re sending share prices down 40% or more – which, again, completely defeats the point of buying for income in the first place.
This isn’t an either/or choice. There is safe, meaningful yield out there, with potential appreciation to boot, but it requires a different way of thinking about the market.
It requires what’s known as “Second-Level Thinking.”
Howard’s Billion-Dollar Secret:
Back to the intrepid billionaire I mentioned earlier. His name is Howard Marks and he’s probably the richest and smartest money manager that most individual investors have never heard of.
The firm he and his colleagues started back in 1995 is Oaktree Capital Group – which today has a cool $100 billion under management.
And his four decades of investment experience have earned him a regular spot on Forbes’ World Billionaires list for several years running.
Though you may not know him, Marks is well known among investment insiders – not only for his giant returns, but also for his prescient writing. He publishes regular commentary in his Oaktree Memos – which are read religiously by many of the greatest investors in the world.
What I find fascinating about Marks, however, is outlined in an obscure chapter of his excellent book The Most Important Thing: Uncommon Sense for the Thoughtful Investor. It’s a work that won acclaim from legends such as Joel Greenblatt, Jeremy Grantham, Seth Klarman, and even Warren Buffett himself.
Marks identifies the typical value investor’s first-level thinking: If you analyze a stock and it looks cheap, you should buy it.
And the typical dividend seeker’s first-level thinking: If you’re looking for yield, and you find a stock paying 5%, you should likewise buy it for income.
The problem, he says, is that everyone is already doing this in one form or another. Growth, value, dividends – all investors look at the same data.
Marks introduces what he calls “second-level thinking” with a few examples:
On buying good companies…
- First-level thinking says, ‘It’s a good company let’s buy the stock.’
- Second-level thinking says, ‘It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overpriced; let’s sell.’
On market forecasts…
- First-level thinking says, ‘The outlook calls for low growth and rising inflation. Let’s dump our stocks.’
- Second-level thinking says, ‘The outlook stinks, but everyone else is selling in panic. Buy!’
On earnings projections…
- First-level thinking says, ‘I think the company’s earnings will fall; sell.’
- Second-level thinking says, ‘I think the company’s earnings will fall less than people expect, and the pleasant surprise will lift the stock; buy.’
According to Marks, when investors accept higher risk in hopes of higher return, their entire thinking is flawed. He explains: “If riskier investments could be counted on to return more – they wouldn’t be riskier!”
Instead, he believes “investments that appear riskier have to appear to offer higher returns, or nobody will make (invest in) them. But that doesn’t mean it has to come true.”
In fact, Marks explains, there are always a range of outcomes that are much different than those first-level investors envision, or merely “hope” will happen. And the riskier the investment, the wider the range of possible outcomes – good ones, and bad ones.
In his September 2014 investor memo, Marks wrote:
“The probability of loss is no more measurable than the probability of rain. It can be modeled, and it can be estimated (and by the experts pretty well), but it cannot be known.”
Marks has been very successful following the second-level strategy but, because of the billions of dollars he’s expected to deploy, his investing options are often limited. In fact, individual investors have the entire investment universe open to them – which means they can focus on small plays in niche sectors that are unfairly beaten down and overlooked by first-level thinkers for even bigger gains.
Ironically, that puts you in a better position than Marks himself to employ second-level investing techniques. Let me show you a few recent second-level opportunities my Contrarian Income Report subscribers and I have tapped into.
Three Second-Level Stocks Paying
7.5% Dividends Set To Double
Three of my favorite buys right now were unfairly beaten down following the Fed’s December rate hike by first-level thinkers who failed to look beyond the headlines.
In reality, they are well supported by strong balance sheets, growing cash flows and a major catalyst that most investors (including Wall Street) have overlooked.
One company pays a 7% dividend and recently gained 14% in just one month.
Another pays a whopping 8.9% and is a recent spin-off from a well-respected parent. It too will shower early investors with double-digit gains as soon as it hits analysts’ radars.
The third, a 6.6% payer, has packed on an 11% gain in recent weeks, and has raised its dividend every single one of the last 14 quarters.
Yes, you read that right, three companies in our current portfolio with average yields of 7.5%. While regular investors get worked up about 2.5 – 3% yields these days, we’re clearing that every two quarters.
And these plays have plenty of upside ahead. More, to be frank, than most of the so-called Dividend Aristocrats. You see, these companies are cashing in on the biggest demographic shift in history.
There’s a bull market unfolding in healthcare for older Americans, and it will run for at least two or three decades. Consider:
- There are 77 million Baby Boomers who just started retiring.
- Roughly 10,000 of them will turn 65 every single day for the next 15 years.
- We are living longer than ever but require more care in the process.
- The 85+ population will triple over the next 30 years.
The Bull Market in the Aging of America Will Continue for Decades
The longer everyone lives, the more likely it is that they’ll need increasing assistance in tending to daily needs. About 70% of Americans who reach age 65 will need some form of long-term care and for an average of three years.
Why haven’t the money lords on Wall Street cashed in already? Because the consensus outlook on the sector – the perception Marks warned us about – is pessimistic. The first-level thinkers believe every stock of this type is going to get crushed by debt and rising interest rates.
But that inaccurate generalization couldn’t be further from the truth, which makes right now the perfect time to buy. First-level investors bailed on this entire sector because they’re concerned that the Fed will raise rates meaningfully. That’s not going to happen – at least not to the point where these safe 7.5% average yields aren’t attractive.
I’ve prepared a detailed report on these three plays called Endless Income: 3 Healthcare Picks for 30 Years of 10%+ Dividends. Inside you’ll find the ticker symbol, my buy-up-to price and in-depth backstory on each, including:
- The 6.6% payer that’s raising its dividend every single quarter…
- The spin off with an amazing 8.9% dividend expected to appreciate 10%+ in 2016…
- A rock-solid 7% payer with accelerating dividend growth rate.
You’ll understand the rationale behind where, why and how to profit; it’s everything you need to know about these companies before you invest a single penny.
I’ll show you how to get your copy of this report absolutely free in a moment, but first let’s take a look at a few more second-level dividends we’re raking in.
3 Monthly Payers With 8-11% Dividends
and 10% Upside in 2016
Many closed-end funds are now trading at double-digit discounts to their net asset values (NAVs) – the price their investments would fetch if they were liquidated today. Doubleline Capital founder and famed bond guru Jeffrey Gundlach recently told CNBC that buying a fund trading at a 15-20% discount is “sort of a no-brainer.”
Reason being, you’re getting $1 worth of assets for just 80 or 85 cents. That’s free money for us calm and collected second-level thinkers. All we need to do to collect 15 to 20 cents on the dollar is buy these issues on sale, wait for the discount to close, and collect fat monthly yields while we wait.
Of course there’s no guarantee that a cheap fund won’t get cheaper in the short term. But over time, the market will normalize and discounted funds will see their prices trend up towards their underlying NAVs. Fund managers can even force the appreciation by buying back their own shares.
I love watching these closed-end fund discounts because they’re clear contrarian indicators. The more first-level investors dislike a strategy at the moment, the greater the discount they demand. The irony is that these same first-level investors chase recent performance, which means they’re inclined to sell a loser at the moment it’s most likely to turn around.
Another good thing about closed-end funds is that their pool of shares is actually fixed. An open-end fund – commonly called a mutual fund – issues as many shares as investors want to buy. That’s great until investors decide they want out, and the manager must sell perfectly good positions for cheap to cash out fleeing shareholders. And you can only sell once a day, after market close.
Because closed-end funds trade like stocks all day long on an open exchange, investors sell their shares to someone else on the way out, which means managers don’t have to worry about a capital crunch.
Three of my favorite funds right now are paying dividends of 8%, 9%, even 11% to savvy investors while we wait for first-level thinkers to discover what they’re missing. When the masses come back in – as they inevitably will – share prices will return to the median 2% discount to NAV, handing second-level thinkers an additional 7-15% gain.
One of these funds focuses on utility companies & infrastructure projects like roads and bridges. It pays 8.2% and recently traded at a 14% discount to the value of the assets it holds – which doesn’t make much sense, because it owns stock and bonds in the top companies in the world.
Now everyone knows we simply cannot live without the essential services utilities provide, and if you’ve turned on the news or skimmed the headlines lately, you know that U.S. infrastructure is crumbling after decades of neglect and underinvestment.
In fact, the American Society of Civil Engineers estimates that $3.6 trillion will need to be invested by 2020 for upgrades. So, no matter what happens in the election, America will need to up its investment in infrastructure, and this fund is riding a bullish trend that will continue for decades.
Another fund I’m recommending invests in bonds in the Asia-Pacific region and trades at 88 cents on the dollar (a 12% discount to NAV) with a rock-solid 8.7% payout.
Most first-level investors fled this fund during the Chinese market rout in 2015 but failed to realize it had almost nothing to do with China. In fact, its top 10 holdings feature safe bonds issued by the national governments of Australia, India and Korea.
This fund has been around for almost three decades and management has seen – and profited during – its share of Asian market crises.
Finally, my third CEF is the brainchild of the “Bond God” himself, Jeffrey Gundlach and pays a whopping 11.3% yield.
This “stepchild” fund launched at an unlucky time – when investors were losing their minds over the possibility of higher interest rates. Thanks to initial rate-hike-paranoia, it actually trades at an 8% discount to NAV – even though it’s managed by one of the top teams in the bond universe, with the flexibility to invest in their best fixed income ideas.
I’ve prepared a special report on these three funds called Monthly Dividend Superstars: 8-11% Yields with 15% Upside, which I’d like you to have absolutely free.
Now, let me tell you exactly how to get your copy and…
Lock in 7.5% Yields and Double-Digit
Gains Right Now
To access your copy of these two reports absolutely free, Endless Income: 3 Healthcare Picks for 30 Years of 10%+ Dividends and the Monthly Dividend Superstars: 8-11% Yields with 15% Upside, I simply ask that you take a risk-free trial of my research service, The Contrarian Income Report.
I created The Contrarian Income Report to help self-directed investors discover under-appreciated income plays before Wall Street and the mainstream herd bid them up.
Every investment I recommend pays 6% or better, including four picks in our portfolio that each deliver over 8% dividends right now – and pay out monthly.
As I write this, my five favorite “best buys” are paying between 6% and 11% and our entire portfolio sports an average yield of 7.4%!
Meanwhile, the S&P 500 pays a meagre 2.1% on average, and the 10-year Treasury bond barely 2%. By following these recommendations, most investors could double – or even triple – their income overnight!
Safe Yields Are Only the Beginning
In addition to my three favorite healthcare plays averaging 7.5% yields, and the closed-end funds we talked about paying up to 11%, your risk-free trial includes a whole lot more…
- You’ll have immediate access to all of the picks in the members-only portfolio, including my exact buy & sell recommendations and buy-under prices.
- Get new income investing ideas on stocks I’ve been watching and analysis of major market events delivered straight to your inbox every single week.
- Never worry about missing out on breaking news on our portfolio stocks. I’ll have an eye on all of them 24/7 and will send a flash alert right away if there’s ever any change in our position.
- On the first Friday of each month you’ll receive my monthly research bulletin, including new portfolio additions, updates on existing positions and an overview of trends and events that may affect our holdings.
- Day or night, you can always log into our password protected members-only website to access all of our resources, archives, special reports and the full portfolio.
- You won’t need to spend hours in front of a computer screen researching stocks. I’ll take care of all the work and send out new recommendations as they become worthy of your investment dollars, as well as keep you up to date on our existing holdings.
Now, the regular member price to join The Contrarian Income Report is $99 per year.
With everything that’s included I’m sure you’ll agree it’s well worth the cost.
Heck, a small position in any one of the companies you’ll discover in your free reports will easily cover that in just the first few months.
But it’s important that I earn your trust and you have the chance to see exactly how profitable this service can be.
So I’m going to take 60% off the regular price and welcome you to try out The Contrarian Income Report for just $39.
And to show you just how valuable this opportunity really is, I’ll include two more bonus reports just for giving it a shot…
Bonus #1 – The Dirty Dozen: 12 Dividend Stocks to Sell Now
I come across countless opportunities begging for your investment dollars every single day. Sadly, many of the juiciest dividends are ticking time bombs just waiting to go off.
This report reveals the 12 biggest potential disasters on my watchlist, including some of the most popular names on the street. Can you guess…
… which corporate services giant pays a dividend 3 times greater than earnings with borrowed money?
… the multinational manufacturer paying out nearly 90% of its earnings while EPS has been on a steady 27% decline since 2011?
… the toy company on a 3-year losing streak yet paying over 6% while its product line falls further and further out of favor?
Make sure you’re not holding any of these losers when they finally make the decision to cut payouts and share prices plummet!
Bonus #2 – Second-Level Investing: Your Guide to the Contrarian Money Machine
This report is my personal playbook for uncovering the very best income stocks.
Many super-investors agree that you’ll never beat the market by following the herd. They tout the virtues of contrarian thinking, but I’ve yet to hear any one of them specifically outline how they go about finding under-appreciated stocks with low valuations.
And that’s exactly what you’ll get with this step-by-step guide.
For the past decade I’ve been refining a system that identifies and selects the top contrarian candidates for investment. By following these steps, you’ll be able to find the types of stocks that Warren Buffett, George Soros, Howard Marks and many other greats only wish they could invest in.
Now, there’s just one more thing I’d like to include…
Our Ironclad 100% Money-Back Guarantee
I’m so confident you’ll enjoy (and profit from) this service that I’m going to give you 60 days to try The Contrarian Income Report absolutely risk-free.
Here’s how it works…
Start your membership right now.
Download your special reports and discover exactly how we’re raking in income that’s triple the S&P and Treasuries.
Then, read the latest issue and start tracking a few winners in the portfolio that catch your interest.
After that, sit back and enjoy the next couple of issues of The Contrarian Income Report, check out my weekly column and all of the other member benefits.
If, after nearly 2 months, you don’t feel the advice has more than covered your cost, or if it’s just not right for you, simply let me know and I’ll issue a full refund.
That’s 100% of your money back, no questions asked.
Plus you’re welcome to keep the special reports with my thanks for trying it out.
So, you get a 60% membership discount, four special reports, weekly email updates, alerts and a 100% money back guarantee…
I don’t see how you can lose here, so click the button below to get started right now.
In the coming months, many investors will still be on the sidelines, holding their breath for the next economic signal from Washington, fearful of what might happen in China & Europe, or still waiting on a commodities turnaround.
In the meantime, our second-level strategy – including the unstoppable healthcare income trio and our closed-end funds trading well below NAV – will shower shareholders with 7.5% average dividends and 15% gains over the next 12 months. And our other Contrarian Income Report portfolio plays will continue delivering additional 6%, 8%, even 11%+ yields to subscribers.
Are you ready to join us?
Yours in profits,
Chief Investment Strategist
The Contrarian Income Report
P.S. Since my recommendations are contrary to prevailing popular beliefs, they have a habit of rallying quickly as soon as the Wall Street crew realizes they are missing out. I encourage you to get started right now so that you can get into these plays at a good price.
P.P.S. Remember, your risk-free membership comes with the full details on our 7.5% healthcare plays set to double, and our 3 closed-end funds paying 8-11%. A small position in any one of these picks will easily cover a full year’s membership… most likely before your 60 day trial even ends!