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September 2017

My Last Issue

Last Call! After nearly four decades of meeting monthly publishing deadlines, it’s time for me to shift gears. I am stepping away from writing IR to spend full time researching global investing strategies, compounding, and dividend-paying stocks on behalf of our management clients at Richard C. Young & Co., Ltd.

Eagle Financial Publications will become the new publisher of Intelligence Report as of September 1. You’ll find further details regarding this transition in the enclosed letter. 

Don’t despair. I am not abandoning my thousands of subscribers, many of whom have been with me since what feels like the Reagan era. As always, you’ll be able to get my early-morning posts on richardcyoung.com and youngresearch.com.

Best Investment Newsletter of All Time

In October 1993, at the peak of the investment newsletter industry, Money magazine authored a Money Newsline feature headlined "Big Investment Newsletters Worth the Money."

Money analyzed the five biggest circulation investment newsletters, rating each from A to C-. Money rated Richard C. Young's Intelligence Report #1, the only letter to receive an "A" rating. That was 24 years ago.

As noted earlier, after over three decades of writing Richard C. Young's Intelligence Report, I have just finished editing my final issue.

Through the years, I've never wavered on my view of what has been the #1 investment newsletter of all time. And no, I am not including Richard C. Young's Intelligence Report in my review. That's because Intelligence Report is only the second-best strategy report I have personally edited. Back in the 1970s and 1980s, when I was in the institutional research and trading business, I was the publisher and editor of Young's World Money Forecast (YWMF)through Young Research & Publishing Inc. YWMF was on a whole different level, covering the international economic and monetary system, currencies, gold, and stock market momentum. My primary trend tool was my highly regarded, proprietary, and accurate Market Tension Index (MTI).

Here are the three investment letters I subscribed to and read religiously through the decades: 1) Bank Credit Analyst; 2) Dow Theory Letters; 3) HSL (Chevalier Harry D. Schultz, KHC).

Where to Find Me

I remain head of strategy for my family-run investment company, Richard C. Young & Co., Ltd., and the chairman of Young Research (youngresearch.com and richardcyoung.com).

Richard C. Young & Co., Ltd. has been named to Barron’s prestigious top investment managers list for five consecutive years. Our firm’s inclusion is especially significant due to the bubble nature of the financial markets. We are one of a handful of top advisors who do not benefit in a bubble environment. We make no attempt to time the markets or compare against benchmarks. Rather, we stay balanced at all times with a mix of short-duration fixed income and high-barrier-to-entry, dividend-paying, blue-chip stocks. 

Typically, our clients are conservative, retired (or soon to be) investors seeking conservation of principal and a steady flow of cash. We do not deviate from our core strategy by chasing hot segments of the market, and we do not invest in stocks that pay no dividends. As a result, bubble markets will almost always find us out of phase. Our clients prefer to avoid the casinos. Instead, they sleep well at night by relying on our time-proven, prudent strategy of balance, quality, and cash flow.

A $500,000 Minimum for Professional Management

For those of you looking for my unique brand of portfolio guidance and investment strategy insights on the global investment landscape, younginvestments.com is the place to find it. My investment management firm offers professionally managed portfolios for investors with $500,000 or more to invest. We focus on dividends and interest. We craft balanced portfolios with companies that pay dividends and have a record of making regular annual dividend increases. We own many of the names on our Master List (Intelligence Report Retirement Compounders). And yes, we invest beyond the United States. Year-to-date, Young Research’s international stocks are up an average of 20%.

Crisis at Vanguard

Increasingly challenging to investors is finding a globally diversified dividend growth portfolio. For example, one of the few dividend-based funds in the world that I have advised for purchase, Vanguard Dividend Growth Fund (VDIGX), is now closed. Individual investors are faced with a "Crisis at Vanguard." No, it is not the end of the world, but it is a punishing blow for loyal Vanguard investors.

I have been anticipating this "Crisis at Vanguard" for a long time. Unfortunately, this is likely to become a broadening industry crisis. The big dividend-based mutual funds that I find suitable for investors are facing the risk of closing to new investors. Here's the problem: many of the acceptable funds for conservative, retirement-oriented investors have grown too big.

Given any fund's strategy mandate, managers are finding the field of suitable securities to be shrinking below a level with satisfactory investing options. The well is running dry for these fund managers.

My Strategy Ladder

Several years ago, I developed a strategy for Richard C. Young & Co., Ltd. that deals with that "dry well." It's a two-rung approach.

  1. Our accounts are not super-fund-sized. What does that mean? Our management company offers all our clients many securities options. Unlike many mutual funds, our management clients do not suffer from size constraints.
  2. Because of modest size, our company has the luxury of selecting from a field of securities where market capitalization levels are small enough that any big fund is excluded from the start. We stay under the big fund radar and feel no repercussions from big fund closings.

The mutual fund industry tide is moving out on many fronts. The era of the giant mutual funds looks to have peaked.  For the individual investor, the future lies in old-line, conservative family investment counseling firms that concentrate on individual securities selection and ongoing relationships with family-oriented associations.

Our websites are unlike anything else you will find on the Web. We are not what I call a "beggar website"—sites that hound the reader to distraction for constant donations or promos. 

Debbie and I fund our websites. We do not seek donations, accept any advertising, bombard readers with pop-ups, or make our roster of respondents available to others. Along with our son-in-law, E.J. Smith, and our staff at Young Research, we provide most of the content, with occasional guest contributions.

Debbie and I are independent of either the Republican or Democrat parties. Rather we think of ourselves as Paleoconservatives (i.e., Pat Buchanan, anti-Federalists John C. Calhoun and George Mason). We are benefactors of the Cato Institute and life NRA members (read more about the 2nd Amendment and your safety in my series The Armed American Family). We support the non-interventionist approach espoused by The American Conservative. We believe in a strict interpretation of America's Constitution from founding director of Cato's Center for Constitutional Studies Roger Pilon, and we would welcome a national discourse on the merits of proportional government as practiced in the Scandinavian countries, Switzerland (which we refer to as The Swiss Way), and Hong Kong, to name a few.

Our research is founded on inference-reading and anecdotal evidence obtained in over 20,000 miles a year on the road, including twice annual round trips from our home base in Key West to Newport, RI. Until last year, many of these miles were on our Harleys. Our roadwork also includes several lengthy stays in France each year. There we have witnessed firsthand the threat radical Islam can pose, as detailed in the Clash of Civilizations by Samuel Huntington. We are suspicious of an American foreign policy built on nation-building, as promoted by America's neo-conservative cheerleaders.

Debbie and I have been researching, writing, and editing together for over four decades with the goal of helping to make our country a model for the concepts of our Founders—Thomas Jefferson, Sam Adams, Patrick Henry, John Randolph, John Hancock, John Dickinson, Richard Henry Lee, and John Taylor of Caroline.

Topping the List

I want you to look first to the Wellington-managed Vanguard funds that I have included in this month’s special What’s Up & What’s Down. My nearly five decades of tenure with Wellington makes most others in our industry look like rank beginners.

If you are retired, or soon to be, Vanguard Wellington (VWELX) and Wellesley (VWINX) should top your list for research. I featured Vanguard Wellington Fund in the May issue, and Wellesley last month.

The Profound Power of Compounding and Counterbalancing

My Wellesley chart below highlights the profound power of compounding and counterbalancing. You will want to keep a copy of this on your refrigerator. The chart compares the performance of the Vanguard Wellesley fund to one of the most overhyped funds of the late 1990s and early 2000s, the Legg Mason Value Trust (run by Bill Miller). The 2008 stock market bust took a lasting emotional and financial toll on many retirees. There’s a breaking point for every investor. For investors who had too much in the stock market in late 2008 and early 2009, the breaking point came. Many sold at or near the bottom and still have never fully recovered. It appears that many of those who got out then are now back at it, investing in stocks and hoping to recover what they lost. Investors who went into 2008 with a balanced portfolio were spared the emotional and financial rollercoaster and, as always, have lived to fight another day.

Look no further than the Vanguard Wellesley Fund for the cold, hard truth about 2008. The Dow dropped 34%, the S&P close to 40%, and some funds by more than 50%. Vanguard Wellesley, however, was down less than 10%. That’s how many won the war. The overhyped Legg Mason Value Trust fund fell 71% at its trough in 2009.

Wellington-Managed Vanguard GNMA

Wellington Management is also the portfolio manager of my long-favored Vanguard GNMA Fund (VFIIX). I’ve probably written more about Vanguard GNMA over the years than any other investment strategy report. I continue to advise Vanguard GNMA for you. You can find my firm’s latest views on Vanguard GNMA at youngresearch.com.

Here's E. J. Smith's latest post on Wellington Management at Young Research:

"Do you know who Michael F. Garrett is? There's no reason you should, but to me, the senior managing director at Wellington Management Company LLP in Boston might be one of the most important names in the fixed-income world today. He's the portfolio manager of the Vanguard GNMA Fund, managed by Wellington."

The Many Risks of Fixed Income Investing

"To be sure, there are several risks associated with any investment today in fixed income. If you have ever studied a prospectus, reading about the risks may leave you with the feeling of never wanting to leave your house again (stay close to your bathroom). The risks are spelled out for you, even with Vanguard GNMA. For example, yes, the credit risk is covered by the government. Here is what you are on the hook for: prepayment risk, income risk, extension risk, interest rate risk, manager risk, as well as a somewhat new risk I refer to as Fed risk—that is, the risk of not knowing what the Federal Reserve will do with all those bonds in its portfolio."

Back to Paris

Debbie and I are heading back to Paris mid-August, on our way to Russia, and then again in the fall. Paris is our home base for all our internationally focused research trips.

One of our favorite Paris trips was a two-week adventure to France and Switzerland, including a fabulous six-day food and wine gourmet tour with Paris insider David Lebovitz (davidlebovitz.com), acclaimed author and former Chez Panisse pastry wizard. Why David Lebovitz? If you are already one of the tens of thousands of gourmet food mavens who flood David’s site daily, you know the answer. And if you are fortunate enough to have your own personal copy of David’s The Sweet Life In Paris, you really know what I mean. David has lived in Paris for about 20 years and knows all the food folk who matter.

Paris is a magnificent city, our favorite in the world by a long shot. And the best way to see it is by foot, so be prepared to do some walking. But trains, subway, and buses, when not facing union strikes, run on time. Getting around the city on the subway or bus is easy, and traveling to Burgundy, Normandy, Provence, or Switzerland via TGV is a snap.  

Does America Need a Large Army?

The Wall Street Journal  and neocons and their sympathizers vote yes. Cato Institute scholar Chris Preble, former Cato scholar Ben Friedman, former Boston University professor Andrew J. Bacevich, and Dick Young vote no. Mr. Preble's The Power Problem  is America 's manifesto for safety and prosperity. I have written a series of articles in support of Chris 's  book, which you can read on richardcyoung.com. Important for you to read is the Pentagon strategy analysis.

Chris maintains that a smaller U.S. military, focused on defending our core national interests, cannot be defending other countries that should defend themselves. As Chris notes, the same principle applies to interventions seen as serving a higher humanitarian purpose.

In a policy analysis paper published by Cato, Budgetary Savings from Military Restraint, Chris Preble and Ben Friedman argue, "The United States does not need to spend $700 billion a year—nearly half of global military spending—to preserve its security. … By capitalizing on our geopolitical fortune, we can safely spend far less."

I agree with Chris that we cannot be in the business of defending other countries who should be defending themselves. America should capitalize on its geopolitical fortune: big oceans and safe borders. America possesses a portfolio of reliable options to a standing army if the goal is minimizing the temptation for aggression. By the way, a standing army is not supported by the Constitution.

America's economic dominance can be useful for instant leverage. By example, would China wish to compromise its trade status with the U.S. to satisfy its interest in Taiwan? When considering the defense of America's shores, do Americans really believe that our army would come into play? How would any substantial invading army ever reach American soil? Take your globe for a spin to better comprehend the folly of a large-manpower invasion.

There is another way America could protect itself from foreign invaders. A way that doesn't rely on heavy expenditures of government money or standing armies. It all starts with a weak central government.

The Swiss Way

I have written in the past of the Swiss Confederation and its form of weak central government. The presidency is a ceremonial office and rotates. The office has no powers above the other six members of the Swiss Federal Council. The entire Federal Council is considered a collective head of state. Switzerland is a neutral country with a low crime rate and a powerful national defense system.

Instead of fielding a large standing army, Switzerland requires every man to undergo military training for a few days or weeks a year throughout most of his life. Each man is required to keep his assigned automatic rifle at home at the ready. The Swiss are powerful believers in individual liberty and freedom. They believe that there is no need for a higher legal authority to check people’s initiatives. In fact, federal court in Switzerland is not allowed to rule on any constitutional matter at the national level. The Swiss are all about keeping things at the cantonal level. Keeping it local is the key in Switzerland.

It Stopped the Nazis

The local approach worked for the Swiss in World War II. The Nazis never invaded Switzerland, as Stephen P. Halbrook explains in The Swiss and The Nazis. Switzerland had "a unique system in which every able-bodied man served in the army and was well trained in firearms … Every male on reaching the age of 19 was enrolled in the militia army and issued a military rifle to keep at home. The national sport was not skiing but shooting, and everyone, from teenagers to the elderly, was encouraged to participate. In Switzerland, not only was every able-bodied man enrolled in the militia army, even youngsters and old men were issued rifles."

In The Magic of Gun Control, Sheriff Richard Mack writes, "Hitler was unquestionably renowned for his devotion to gun registration and was an absolute gun control fanatic." Aaron S. Zelman (JPFO) writes, "If every Jewish and anti-Nazi family in Germany had owned a Mauser rifle and twenty rounds of ammo and the will to use it, Adolf Hitler would be a little-known foot note in the history of the Weimar Republic."

The Founders Knew the Value of an Armed Populace

America's Founders knew this well. Richard Henry Lee in 1778 wrote, "To preserve liberty it is essential that the whole body of the people always possess Arms." George Mason wrote, "To disarm the people is the best and most effectual way to enslave them." Thomas Jefferson wrote, "No free man shall ever be debarred the use of arms." Jefferson also wrote, "The strongest reason for the people to retain the right to keep and bear arms is, as the last resort, to protect themselves against tyranny in government."

Stephen Halbrook outlines the preparation of tiny Finland versus the Soviet Union in the 1939-40 Winter War. "The Finnish army, only half as numerous as Switzerland's, held out for almost three and a half months against overwhelming Soviet forces. Like the Swiss, they had few equals in marksmanship. Russian paratroopers were shot in the air, and those that were missed were shot when they hit the ground. In those few months, Finnish sharpshooters killed or wounded astonishing numbers of Russian troops. In one battle, three Finns died against 1,000 Russians."

As with the Finns, Halbrook notes, "Marksmanship was a national obsession for the Swiss. … How exactly tiny Switzerland stood down the Nazi monolith is a lesson worth remembering in the annals of history. Switzerland and the U.S. share a common heritage. Both have been from the beginning independent republics."

Issue text continues after Top 10 Common Stocks Countdown and historical tables.

1) Caterpillar (NYSE: CAT): There are over 3 million Caterpillar machines at work around the world today. CAT is the undisputed leader in high quality construction machines. Cat has a global footprint that puts its machines on every inhabited continent and in every ocean. With 172 dealers serving 190 countries, Caterpillar machines are onsite at the most remote mining and construction locations on the planet.

CAT is preparing for the future of heavy machines by building a fleet of automated trucks. There are already over 70 automated Cat 793F trucks on customer sites. The 793F is a 2,650-horsepower, 135-ton behemoth that can carry 250 tons of payload. Over the last three and a half years, CAT's automated trucks have hauled over 500 million tons without a single lost-time injury.

Tracked vehicles like CAT's bulldozers can spend up to 50 percent of their working time turning. CAT targets problems like that with advanced technologies. In the ‘80s, CAT developed a Differential Steering System that greatly reduced the time it takes to turn a tracked tractor. Today CAT is solving industry problems by employing the most advanced laser, GPS, solar and cellular technologies. Buy.

2) International Business Machines (NYSE: IBM): Over 90 years before Facebook, Tesla, and Uber, there was IBM, a groundbreaking technology company. Today IBM continues to push the limits of technological advancement with its Watson cognitive computing solution. Watson has exploded in popularity. As Recode's Arik Hesseldahl writes, "You're probably using IBM's Watson computer and don't know it." This is especially true if you've been to a doctor lately, as Watson has had its greatest reception in the medical industry. IBM is the go-to source for technology for the Fortune 1,000. IBM is working with companies like AT&T, Deloitte, Honeywell, Kimberly-Clark, Lockheed, and Cisco to build cognitive Internet of Things (IoT) solutions using Watson. Matching the vast data inputs generated by the IoT to the analytic capabilities of Watson will create a deeper understanding of each business. Buy.

3) McDonald's (NYSE: MCD): Harry Sonneborn, a former McDonald's CEO, once said, "We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they are the greatest producer of revenue from which our tenants can pay us our rent." McDonald's real estate portfolio is vast, and the company collects billions of dollars in rent from its franchisees every year. Buy.

4) Procter and Gamble (NYSE: PG): Former Procter and Gamble CEO Bob McDonald once said that "[advertising] promotions may win quarters, but innovation wins decades." Focused innovations are the building blocks of great brands. P&G currently owns 22 brands that generate over a billion dollars in revenue each year. Those billion dollar brands, including Charmin, Duracell, Gillette, and Tide, to name a few, are joined by dozens of other fast-growing smaller brands like Old Spice, Swiffer, and Febreze. Buy.

5) Microsoft (NASDAQ: MSFT): The Microsoft Office Suite of programs (Office), including Word, Excel, PowerPoint, and others, is found on almost every computer used for real work. Office has been a powerhouse performer for Microsoft. When misadventures like the Zune MP3 player let shareholders down, Office held steady. Now Microsoft is integrating Office into its next big endeavor, the cloud. Microsoft’s cloud systems, led by its Azure application platform, is one of the fastest growing parts of the company. The cloud is the future, and Microsoft is a leader. Buy.

6) Pfizer (NYSE: PFE): Americans are a heavily medicated people. The CDC reported in a 2015 study that 40% of Americans 65 years and over were on five or more prescription drugs. And about 65% were on three or more. Pfizer owns a premier portfolio of branded prescription and over the counter drugs and was ranked the top biopharmaceutical brand by InterbrandHealth for 2016. Pfizer’s premier brands include Zoloft, Viagra, Dimetapp, Centrum, Advil, and Zithromax. Buy.

7) United Technologies (NYSE: UTX): As the Pentagon begins a military buildup, including planned purchases of the new F-35 jet, United Technologies will be involved in every step. The company’s F135 engine is the power plant behind the stealth F-35 fighter. The F-35’s single F135 engine can push the fighter to 1,199 miles per hour, or Mach 1.6. Aside from military production, United Technologies also owns Otis, the world’s premier elevator company, and UTC Climate, Controls and Security, which builds Carrier-branded HVAC equipment and Kidde safety systems. Buy.

8) Johnson & Johnson (NYSE: JNJ): The researchers at Johnson & Johnson are fighting disease across the spectrum by producing a portfolio of prescription drug brands focused on the toughest diseases of our day. Alongside J&J’s portfolio of prescription drugs, it owns a medical devices segment that is the most comprehensive surgical technology and specialty solutions business in the world. J&J also owns the world’s largest range of consumer healthcare products, including brands such as Johnson’s Baby, Aveeno, Neutrogena, Band-Aid, Motrin, Tylenol, and Listerine. Buy.

9) 3M (NYSE: MMM): Management at 3M has put innovation front and center for employees by attaching bonuses to the amount of revenue generated by products introduced in the last four years. Each division is responsible for making sure this number doesn’t fall below 30%. The company’s successful consumer and commercial brands include Scotch, Post-It, Scotch Brite, Filtrete, Aqua-Pure and 3M itself. The recent drop in 3M share prices is a window of opportunity to buy.

10) Verizon (NYSE: VZ): The Internet of Things is coming. Between cars that drive themselves and houses that maximize their efficiency, devices that send data via the internet will soon be everywhere. Verizon’s LTE network, already the most reliable in the country, is the first to deploy services specifically for the Internet of Things. Verizon has created low-cost solutions for IoT devices, and has streamlined its certification process to allow more devices onto its network faster. Buy now.

My history with Wellington Management and the Vanguard group goes back decades. I started with Wellington over 40 years ago. Wellington was my favorite client in my institutional brokerage days.

The Wellington-managed Vanguard Wellington Fund (VWELX) was the nation’s first balanced fund. The fund was founded by Walter Morgan just before the greatest bust in stock market history. Today, Wellington Management is an institutional asset manager responsible for over $1 trillion in assets under management for over 2,000 clients in more than 65 countries. My special What’s up & What’s Down feature this month includes the three widely tracked Dow Jones Averages, Young Research’s Dynamic Maximizers and Retirement Compounders and all the Vanguard mutual funds that are majority managed by Wellington Management. 

What's Up & What's Down
Total Returns
2000 2001 2002 2003 2004 2005 2006 2007 2008
Dow Jones 30 Ind. (4.7) (5.4) (15.0) 28.3 5.3 1.7 19.0 8.9 (31.9)
Dow Jones 15 Ut. 51.1 (26.2) (23.4) 29.3 30.2 25.1 16.6 20.1 (27.8)
Dow Jones Transportation 0.4 (9.3) (11.5) 31.8 27.7 11.7 9.8 1.4 (21.4)
Dynamic Maximizers Mix 15.1 3.5 8.0 8.6 5.7 4.0 8.3 9.7 5.1
Young Research's RCs         19.8 9.0 22.0 7.1 (28.9)
Vanguard GNMA 11.2 7.9 9.7 2.5 4.1 3.3 4.3 7.0 7.2
VG LT Investment-Grade 11.8 9.6 13.2 6.3 8.9 5.1 2.9 3.8 2.3
Vanguard High-Yield (0.9) 2.9 1.7 17.2 8.5 2.8 8.2 2.0 (21.3)
Wellesley Income 16.2 7.4 4.6 9.7 7.6 3.5 11.2 5.7 (9.8)
Wellington 10.4 4.2 (6.9) 20.7 11.2 6.8 14.9 8.4 (22.3)
Vanguard Dividend Growth 18.8 (19.4) (23.2) 29.2 11.0 4.2 19.6 7.0 (25.6)
Vanguard Equity Income 13.5 (2.3) (15.7) 25.1 13.6 4.4 20.6 4.9 (31.0)
Vanguard Windsor 15.9 5.7 (22.3) 37.0 13.4 5.0 19.3 (3.3) (41.1)
Vanguard Energy 36.4 (2.5) (0.6) 33.8 36.6 44.6 19.7 37.0 (42.9)
Vanguard Health Care 60.6 (6.9) (11.4) 26.6 9.5 15.4 10.9 4.4 (18.5)

What's Up & What's Down
Total Returns
2009 2010 2011 2012 2013 2014 2015 2016 YTD
Dow Jones 30 Ind. 22.7 14.1 8.4 10.2 29.7 10.0 0.2 16.5 9.7
Dow Jones 15 Ut. 12.5 6.5 19.7 1.6 12.7 30.7 (3.1) 18.2 8.2
Dow Jones Trans. 18.6 26.7 0.0 7.5 41.4 25.1 (16.8) 22.3 7.7
Dynamic Maximizers 9.7 9.5 10.9 4.2 5.9 9.2 1.5 6.1 3.3
Young Research's RCs 30.0 15.6 10.0 9.9 21.2 7.1 (2.5) 15.1 6.9
Vanguard GNMA 5.3 7.0 7.7 2.3 (2.2) 6.7 1.3 1.8 1
Vanguard Long-term Invest Grade 30.0 15.6 10.0 9.9 21.2 7.1 (2.5) 15.1 6.9
VG High Div Yield 17.2 14.2 10.5 12.7 30.1 13.5 0.3 17.0 4.6
Wellesley Income 16.0 10.6 9.6 10.1 9.2 8.1 1.3 8.1 4.3
Wellington 22.2 10.9 3.9 12.6 19.7 9.8 0.1 11.0 6.2
VG Dividend Growth 21.7 11.4 9.4 10.4 31.5 11.8 2.7 7.5 9.6
VG Equity Income 17.2 14.2 10.5 12.7 30.1 13.5 0.3 17.0 4.6
VG Windsor 21.7 11.4 9.4 10.4 31.5 11.8 2.7 7.5 9.6
VG Energy 53.1 19.8 (12.4) 9.1 5.3 1.1 (23.9) 23.8 3.7
VG Health Care 16.0 10.6 9.6 10.1 9.2 8.1 1.3 8.1 4.3

America's Enemies Are Different Today

Today's enemies aren't riding in tank convoys or U-boats. They plant IEDs and drive semi-trucks into crowds. They fly planes into towers of innocent people. What exactly is the use of a massive standing army against such a threat?

Meanwhile, our leadership assists and collaborates with the funders of much of the anti-American violence in the world—the Saudis. Is it not the Saudis who fund global terrorists, working around the clock against U.S. interests? And what about those hate-spewing Madrasas? Do the Saudis not, on a worldwide basis, fund these anti-U.S. institutions?

Now, after decades of holding the world hostage with oil, the Saudis have mismanaged their finances so poorly that they have come to the international bond market, headgear in hand, like a Bedouin tribe of global panhandlers.

I've explained often that it would be in the best interests of Uncle Sam to cut all ties with the Middle East crowd. Much the same may be said of most of America's bilateral and multi-national alliances. Moreover, I would push full speed ahead in establishing our secure national energy base with a complete portfolio of renewable and fossil-fuel resources featuring zero imports of oil from the Middle East. No more American blood or treasure should be spent on the futile project of regime change.

In my daily search for fresh, provocative wisdom, I rely on a network of old-line, trusted resources. At the top of my list is The American Conservative, published by my friend and fellow long-time Cato Institute supporter Jon Basil Utley. I am always searching for hot-off-the-press insights released by The American Conservative's editors, founding editors, and friends. Here I am referring to Pat Buchanan, Taki Theodoracopulos, Scott McConnell, and TAC's super new editor, Robert Merry.

In a recent letter, The American Conservative's editors reminded supporters, "For the first time in many years, our principles—federalism, decentralized political power, fiscal responsibility, a foreign policy of prudence, respect for traditional liberties and communities—are waxing. A door has opened for traditional conservatives to do real damage to the reigning big government/interventionist consensus—the consensus that is always in favor of another war, more spending, taking away civil liberties, and ignoring the constitution."

My best wishes for good fortune to each of you. Thank you for being my subscriber through these many years. I hope you continue to follow and benefit from the advice I've consistently given you over the decades. Make it a good lifetime.

Warm regards,

Signature

My final P.S.: If you had invested $1,000 in Walmart (NYSE: WMT) in 1977, you’d have collected $259,000 in dividends over the ensuing years. And I am not even looking at capital appreciation. Attempting to figure out when the level of the stock market is too high or too low is a waste of time. Rather, invest in a diversified list of dividend-paying stocks from companies with a long record of increasing dividends. Hold and allow the miracle of compounding to work for you over an extended period. That’s pretty much all you will ever need to know about successful stock market investing.

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