What Is Dan Ferris’ 10-Stock Inflation Protection Portfolio?

Today I’m looking into a presentation on the Stansberry Research website featuring host Daniela Cambone and investment guru Dan Ferris dubbed “The Next Great Crash Has Likely Already Begun.”

The presentation centered around Dan Ferris’ thesis that the market could be about to crash due to speculative “mania” and how inflation poses a significant risk to investors.

The solution, according to the presentation, is Dan Ferris’ 10-Stock Inflation Protection Portfolio, a list of ten stocks he believes can help you protect your wealth, beat inflation, and see “massive potential gains in the next cycle.”

Dan Ferris also discussed his “No. 1 recommendation of all-time,” a gold royalty company he refers to as “the Best Gold Business on Earth.”

However, the only way to access the “inflation protection” portfolio and Dan Ferris’ number one stock pick is to join his Extreme Value advisory service for $1,495. So, I decided to look into the presentation to find out what stocks he’s teasing.

And in this review, I’ll break down everything I learned about Dan Ferris’ market crash prediction, portfolio, and stock picks. I’ll also share my thoughts on the Extreme Value service to help you determine if it’s worth signing up for.

Overview of Dan Ferris’ “Next Great Crash” Thesis

Dan Ferris’ recent “Next Great Crash” presentation is all about how he believes the market is overvalued and how this could lead to devastating losses.

“The real story is that my heart is breaking because I believe a lot of people are going to lose nearly everything they’ve saved in the next few years.

People are going to be wiped out.

People are going to have to live with a crappy, stressful retirement… not be able to take care of themselves and their spouses… not be able to give their kids and grandkids the things they dreamed they would.”

Why’s he so bearish?

Dan Ferris shares two main reasons why he’s so concerned. The first has to do with a potential market crash, and the second has to do with inflation.

Regarding the first part, Ferris states that the attitude in the markets right now is one of “mania” where people’s attitude is that it’s impossible to lose.

During the presentation, he talked about meme stocks like AMC, the speculation in NFTs, cryptocurrencies, and how some stocks are trading at hundreds or even thousands of times earnings. And he summed it up by (more or less) saying we’re in a bubble.

According to Dan Ferris, the moment we’re in now is similar to 1929, 2000, and 2008 and what he’s seeing suggests that “stocks are way too expensive.”

However, Ferris believes this crash could be worse than those because many more small retail traders are now in the market. He suggests that retail will “buy the dip” on small corrections but “freak out and sell everything” at a certain point, causing an even worse market crash than we’d otherwise see.

“At 5% down it’s buy the dip. 10%, maybe even 15%, they’re gonna be saying buy the dip. But at a certain point they’re going to freak out and sell everything.

And that sends the market down and even more when people panic sell. It creates a huge snowball effect.

That happens in every crash. But small retail traders are a much bigger part of the market now, so it’s going to be WORSE.”

So, that’s his first concern, a potential market crash. However, Dan Ferris also discussed a second issue in the presentation – inflation.

He points out that inflation is here and believes it “isn’t transitory.” Instead, he suggests that we could see rising gas, home, food, and vehicle prices in the next decade.

And he sums it up by saying that this is why he’s recommending certain assets because these could help protect against both scenarios – a market crash and rising inflation.

“How are gas prices in your neighborhood? Home prices? Food? Cars? I know just about everything I buy is more expensive. This isn’t transitory, this is what the next decade looks like when the money supply is up five-fold since the beginning of 2020”

[…]

“And that’s why I’m begging you to get some money into the assets I’m recommending. Now. Without delay. It’s crash protection… it’s inflation protection… and it’s set up to soar over the next decade. I believe it’s the trade of the decade, without question.”

What’s he recommending?

Dan Ferris reveals several of his recommended investments during the presentation and shares some clues about what’s inside his “10-Stock Inflation Protection Portfolio.”

Let’s start with the picks he gives away for free. In short, Dan Ferris’ first recommendation is to “hold some gold bullion or gold through an ETF that’s backed by physical metal.”

This didn’t surprise me because gold is often touted as an inflation hedge or a hedge against market chaos in general.

Of course, just because something has worked well in certain market conditions doesn’t mean it’ll continue to do so. But Dan Ferris seems to be very bullish on gold overall, and he makes a specific recommendation on which gold-backed ETF to consider.

“The ticker symbol is P-H-Y-S, as in “physical” and it’s a much higher-quality way to own gold in my opinion.”

So, Dan Ferris’ second pick is the Sprott Physical Gold Trust ETF (ticker: PHYS).

According to the Sprott company website, PHYS is backed by physical gold bullion that’s fully allocated. Meaning the gold it stores in the Royal Canadian Mint (for example), which backs its ETF, is more or less “set aside” for Sprott. The site also says that the ETF is redeemable for physical gold on a monthly basis, subject to minimum redemption amounts.

Lastly, aside from gold and the gold ETF, Dan Ferris suggests owning hard assets like land, timber, “physical mines,” and commodity producers.

However, those are just the investment ideas he shares for free.

Dan Ferris has also put together a portfolio of 10 stocks that he believes could thrive even if we don’t see a market crash or inflation. And he points out that his strategy doesn’t need a market crash to work and that inflation could “juice” his strategy.

“My point is: Even if you had magic powers and could guarantee me that there’d be no market crash in the next five years, this is still what I’d recommend you do today anyway.

It doesn’t depend on a market crash to work, although it will protect you better than anything else I know of if it does.

Same for inflation. Inflation is going to juice this strategy.

But even if somehow, magically, inflation stays reasonable – I’d still recommend the exact same ideas today.”

From what I can gather, Dan Ferris suggests that his top 10 picks could thrive regardless of what happens in the market because most of his “inflation protection” portfolio picks are commodities-related. And according to Dan Ferris, commodities are “ridiculously” cheap relative to stocks right now and the cheapest they’ve been in roughly 20 years.

“But as a market, commodities are ridiculously, stupidly CHEAP.”

[…]

“Commodities are the cheapest they’ve been relative to stocks since the lows of the dot-com bubble. Not the housing crisis… the dot-com bubble.”

So, what are Dan Ferris’ 10 stock picks?

Read on.

What’s In the 10-Stock Inflation Protection Portfolio?

The 10-Stock Inflation Protection Portfolio is a commodities-focussed portfolio consisting of 10 stocks Dan Ferris believes can help investors protect against downside risk, beat inflation, and see massive potential gains in the market.

“The 10-Stock Inflation Protection Portfolio. It’s a completely done-for-you approach to protecting your downside… beating inflation… and seeing massive potential gains in the next cycle that you can buy right now, today. And I think everyone should.”

As mentioned earlier, Dan Ferris doesn’t disclose what’s inside the “10-Stock Inflation Protection Portfolio” during the presentation. Instead, he shares some general clues about his picks and encourages you to join Extreme Value for $1,495 to get the details.

So let’s take a look at the clues he shares about his picks to see if we can figure out what stocks he’s teasing, starting with his “No. 1 Pick.”

“The Best Gold Business on Earth” (Dan Ferris’ No.1 Stock Pick)

The first stock in Dan Ferris’ 10-Stock Inflation Protection Portfolio is a gold royalty company that he refers to as “The Best Gold Business on Earth.” He also refers to it as the “single best stock” he’s ever found in more than 20 years in the markets.

Here’s a summary of what he says about this company:

“… I’ve said over and over in public that I consider it the single best stock I’ve EVER found in more than 20 years in the markets, researching thousands of stocks. I call it the best gold business on earth, and I’m sure that’s what it is.

It’s my highest-conviction idea, ever.

Honestly if you just got into this one stock – and forgot everything else I talk about today – I think you’d be 100x better off.”

[…]

“Correct. It’s a royalty-like business. A royalty on a huge portion of the gold market itself. As long as people want to own gold, this business makes money. And when demand for gold skyrockets – which I have ZERO doubt is going to happen in this environment – well you can guess what happens – the potential for this company is off the charts.”

[…]

“Again I’m not talking about Royal Gold, Franco-Nevada, or anything you’ve likely heard of.”

[…]

“And by the way, I didn’t mention this earlier, but I think “the Best Gold Business on Earth” is something like a 12- or 14-bagger from current prices when gold takes off.”

There are a lot of gold royalty companies out there, and Dan Ferris doesn’t provide many tangible clues about his pick outside of this (other than ruling out some well-known royalty companies). So, I’m not sure what this one is.

However, I did stumble across a Stock Gumshoe article that suggests Dan Ferris’ pick could be Sprott (ticker: SII). This is the same company I mentioned earlier, but SII is the ticker for Sprott itself – not the gold ETF I mentioned earlier.

And according to this article on Sprott’s website, there’s a division of the company called Sprott Resource Streaming and Royalty dedicated to royalties and streaming.

This could help explain why Dan Ferris called it a “royalty-like” company; because the royalty aspect is only one part of what Sprott, a Canadian asset management company, does. It also offers bullion trusts (like the one mentioned earlier) and mining ETFs.

How do “gold royalties” work?

In short, a gold royalty company finances a gold mining operation upfront in return for a share of the future mining proceeds.

In other words, they bankroll miners in return for a cut of future profits.

It’s an interesting business model because the royalty company can profit as long as gold keeps coming out of the ground, without the cost or headaches associated with mining.

This is a similar investment idea that Bill Shaw, another Stansberry Research guru, teased in a presentation centered around “Battery Royalties.” But as I explain in this post, Bill was teasing a different company specializing in nickel and copper royalties.

In any case, Sprott could be the “The Best Gold Business on Earth” Dan Ferris talked about in the presentation and one of the stocks in his 10-stock portfolio.

But it’s just a guess. And if you want to find out for sure, you’d need to read Dan Ferris’ report, “The Hands-Down, No. 1 Pick of My Career,” which you receive with an Extreme Value subscription.

What about Dan Ferris’ other 9 picks?

Like the previous investment idea, Dan Ferris doesn’t reveal much about the other nine picks in his “inflation protection” portfolio, except for a few vague hints.

For example, one pick Dan Ferris mentioned is “a royalty on a metals market that’s way, way bigger than gold or any precious metal.” According to Ferris, the company has a royalty on iron, potash, and energy production.

Another pick Ferris mentioned is a “spinoff company that’s a play on renewables,” which he says has the same management as the previous company.

So, those are the hints related to at least three of Ferris’ picks (when you include “The Best Gold Business on Earth” pick we discussed earlier).

And Ferris says that a fourth stock he’s interested in is an insurance company.

He explains that he’s interested in this company because insurance is an evergreen business and that his pick is “like a royalty on the growth of hard assets.”

According to Ferris, while insurance is a financial product, it’s really about physical assets like real estate, cars, boats, factories. And he points out that when the value of these assets goes up, so do insurance premiums.

What other clues does he share about the portfolio?

The only other details Dan Ferris shared about his picks in the presentation is that four stocks in the portfolio are “plays on infrastructure.”

“There are actually four stocks in the portfolio that are plays on infrastructure. They have market leading competitive positions. They’re essential to housing, road construction, waterworks, Internet buildout – everything you’ve been hearing about in the news. And they own in many cases incredibly valuable facilities and equipment that’s not easy to make or replace… and significant real estate portfolios as well.

So, to sum it up, Dan Ferris’ 10-Stock Inflation Protection Portfolio includes a mix of gold and commodity-related royalty stocks, one focussed on renewables, an insurance company, and four of his picks are infrastructure-related stocks.

Also worth noting is that, aside from most of his picks being commodity-related, Dan Ferris states that a lot of his recommendations involve small-cap companies. And he doesn’t recommend going all-in on any one of his picks. Instead, he suggests putting “at least 10% or 20% of your investing dollars” into all 10 stocks.

In any case, those are just the stocks Dan Ferris is focused on as part of his inflation thesis. He also recommends other stocks to members of Extreme Value. So, let’s look at what this service is about and how it works.

What Is Extreme Value and How Does It Work?

Extreme Value is a Stansberry Research investment advisory service edited by Dan Ferris grounded in his strategy of “buying low-risk, cheap stocks.”

According to the Stansberry Research website, Dan Ferris “uses a classic value-investing philosophy to help you make some of the biggest, safest returns” in the stock market. And he does so by only investing in what he believes are the best value stocks.

The site also says Dan Ferris spends “hundreds of hours each month” going through balance sheets and SEC filings to find stocks trading at a potential discount.

So, it’s a value-investing service that caters to long-term investors.

The service began in 2002 and, while he doesn’t say how well it has done since inception, Dan Ferris claims to have recommended numerous winning stocks.

He also states that it saw an average annualized return of 78% in 2020:

“Keep in mind, the average annualized return from Extreme Value in 2020 was 78%. This return measures the results achieved by all of our recommendations in 2020, scaled to a one-year period.”

Of course, that doesn’t mean the service will help you make (or avoid losing) money. But it appears to have a solid track record. Also, most of the reviews I’ve read about Extreme Value are positive, so it looks like a legitimate, worthwhile service overall.

What do you get if you join?

The core feature of the Extreme Value service is the monthly newsletters. Each month, subscribers receive Dan Ferris’ latest investment ideas, insights, and market analysis.

You also get access to the model portfolio, which contains all of Dan Ferris’ current stock picks, the 10-Stock Inflation Protection Portfolio, and a bonus report titled, “The Hands-Down, No. 1 Pick of My Career,” which details his top gold royalty stock.

How much does it cost?

The service retails at $2,000 per year. However, if you sign up through the “Inflation Protection Portfolio” presentation, it costs $1,495 for two years. That’s a pretty steep discount, although the downside is it’s not possible to get a cash refund.

Check out my complete review of Extreme Value to learn more about the service and get my take on whether or not it’s worth joining.

Is Dan Ferris the Real Deal?

Dan Ferris is a real investment expert. He joined Stansberry Research a year after it launched in 2000 and started editing Extreme Value in 2002.

According to his Linkedin profile, Dan Ferris first started out researching mining stocks and commodity-producing companies in 1997 after being hired by Bill Bonner, founder of The Agora (one of the largest financial publishers in the world).

There’s no mention of what he did before that, but at the very least, Dan Ferris has around 25 years of experience in the finance space. And according to Daniela Cambone, he’s “behind 24 different winning recommendations of at least triple digits to date.”

Ferris has also appeared on shows like Fox Business News, The Street, and Money with Melissa Francis, and his work has been featured in Barron’s.

So, he does appear to be a genuine investment expert, especially when it comes to longer-term value-style investments. That doesn’t mean all his picks will work out or that his market crash/inflation thesis will play out. But based on my research, he is the real deal.

Bottom Line

Dan Ferris’ 10-Stock Inflation Protection Portfolio is a commodities-focussed portfolio consisting of 10 stock picks that Dan Ferris believes can help protect your downside in a market crash, beat inflation, and see massive potential gains.

We’ve discussed what one of his picks could be, but the only to find out for sure is to subscribe to Extreme Value for $1,495. In doing so, you get access to Dan Ferris’ 10-stock portfolio and all his current Extreme Value investment ideas.

At the end of the day, nobody knows if (or when) there will be a huge market crash. Nor do we know how high inflation will continue to run in the years ahead. And, of course, it’s even harder to predict which companies will be great investments.

So, there’s no guarantee you’ll make money following Dan Ferris’ picks. But I do believe it’s a legitimate service, and it could be worth checking out if you want to see what’s inside his Inflation Protection Portfolio and find out what other investment ideas he has.