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How to Rent a Fortune

With a 37% gain in The Blackstone Group LP (NYSE: BX) since late July, we’ve done really well with our targeted investment in real estate.

And with very quick gains of 9% in Brazilian-food processor BRF SA (NYSE ADR: BRFS), 5.2% in South American agricultural play Adecoagro SA (NYSE: AGRO) and 1.6% in high-tech agribusiness player  Neogen Corp. (NasdaqGS: NEOG), we’re doing well with our plays on (pockets of) accelerating U.S. inflation.

Today we’re going to combine the two concepts and employ a very simple formula we believe will add to your profits…

  • Featured Story

    What's Spooking Investors in the Stock Market Today

    The stock market today is down more than 200 points as China fears trigger a global sell off.

    In mid-morning trading, the Dow dived 205.75, 1.39%, to 14,593.65. The S&P 500 slumped 25.78, 1.62%, to 1,566.65. The Nasdaq slid 50.78, 1.51%, to 3,306.47. The Dow and S&P are now off some 5% and 6% respectively from their all-time highs reached earlier this year.

    Asian markets were clobbered Monday and European markets melted on increasing fears of a liquidity crunch in China. Major Euro indexes, off roughly 10% from their April highs, are officially in bear territory.

    Today's moves continue the rollercoaster ride U.S. equities were on last week, with the Dow shedding 560 points, or 3.66%, over Wednesday and Thursday.

    The blue-chip benchmark finished at 14,799.40, down 1.8% for the week, its worst week since April 19. The S&P 500 fared worse, slumping 2.1% last week to end at 1,592.43. The Nasdaq ended at 3,357.25, for a weekly loss of 1.9%.

    The VIX, or the CBOE Volatility Index, soared 10.2% last week, ending at 19. Wall Street's "fear gauge" has risen four of the past five weeks, ever since Fed Chief Ben Bernanke's first mumblings about a probable winding down of stimulus.

    Monday morning, the VIX jumped 2.14, or 11.23%, to 21.04, its highest level of the year.

    Markets were goosed Friday after The Wall Street Journal's Fed watcher Jon Hilsenrath wrote that investors may be misreading optimistic messages sent by the Fed Chairman Ben Bernanke as hawkish.

    Also, Goldman Sachs (NYSE: GS) analysts said their top recommendation for 2013 is still to buy stocks and sell bonds.

    "We continue to expect the index [S&P] will close the year at 1,750, a rise of approximately 10% from today's top level. However, median historical drawdown episodes suggest at some point during the next six-months that the S&P may decline to mid-1,500s before resounding to our year-end target," Goldman's analysts wrote.

    Further giving stocks a lift was a bullish statement to CNBC from renowned hedge fund manager David Tepper, founder of Appaloosa Management: "All the concerns in the markets is because the Fed sees the economy stronger in the future. In fact, their forecast shows that they will wait until a lower unemployment rate (closer to 6% than 6.5) to raise interest rates. So they are a bit easier on the front...I obviously thought they should start to taper. [But] the bottom line when the dust settles [is that the] only one place to be [is] stocks."

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  • about stock markets

  • Is the Soaring Stock Market Hiding a Darker Truth? In my role as executive editor, I subscribe to dozens of newsletters, wire services, trade journals and news-bulletins. They roll into my e-mail box each day like an eight-hour-long avalanche.

    Usually, I just open the ones that happen to catch my eye. One was this recent headline from a MarketWatch.com bulletin that said, "Dow closes at highest level since December 2007."

    My first thought was that the bulletin should have said: "Dow closes at highest level since December 2007 - despite faltering economy, stubborn unemployment, accelerating inflation and the highest level of uncertainty we've seen in decades."

    I guess they couldn't fit all that into the subject line box.

    My second thought was that Martin Hutchinson was right - again.

    You see, for the last couple of years the administration in Washington and the so-called experts on Wall Street have repeatedly told us that inflation isn't a problem. They continue to insist that the bailout plans and easy-credit policies that were used to end the financial crisis have yet to ignite the rise in prices that you and I refer to as "inflation."

    However, in the Aug. 21 Private Briefing, Martin completely dismissed this Pollyanna point of view. There is inflation, he said. In fact, it's staring us right in the face - as a soaring stock market.

    According to Martin, the "Real Dow" should be much lower.

    Another Stock Market Bubble

    With so much economic uncertainty - read that to mean, so much "risk" - there's no way stocks should be zooming like this, Martin said. The fact that they are is proof of a cheap-money-fueled "asset bubble" - a form of inflation, he explained.

    The Permanent Wealth Investor editor also predicted that U.S. stock prices would continue their advance - especially if the U.S. Federal Reserve appeared willing to add additional stimulus.

    And as the MarketWatch.com bulletin illustrated, that's precisely what happened.

    Here's the thing: Now that "QE Forever" has arrived, this inflationary surge is about to get much, much worse.

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  • Investment Safety Strategies: Eight Ways to Survive a Stock Market Crash After a barrage of bad news -- a disappointing move by the U.S. Federal Reserve and a couple of really bad days for the world's key stock markets last week -- it would be understandable if you wanted to dump all your investments, stick the cash in a duffel bag, and move to the hills.

    As an investor, that would be the biggest mistake you could make, says Money Morning Chief Investment Strategist Keith Fitz-Gerald.

    Although Fitz-Gerald is anticipating the whipsaw volatility to continue - and believes U.S. stocks are in for a particularly tough stretch - he's telling investors to stay invested if they can, stick with a solid game plan, and look for opportunities as they develop.

    In fact, there are eight "mini-strategies" that investors can take that will let them navigate this near-term volatility, survive even a deep market downturn, and remain in the hunt for wealth-building, long-term investment profits.

    "The key is remaining flexible and focused," notes Fitz-Gerald. "R emember, even the strongest trees bend in the wind."

    A Hint of What's to Come

    U.S. stocks started to skid in earnest Wednesday afternoon, after U.S. Federal Reserve policymakers announced an "Operation Twist" economic-stimulus strategy. The strategy wasn't well-received by investors, and the central bank may have exacerbated investor angst on a worldwide scale by stating that it was worried about global growth.

    On Wednesday and Thursday the Dow Jones Industrial Average lost 675 points, to 10,733.83, a 5.91% drop. The Standard & Poor's 500 index fell 72.43 points, to 1,129.56, a 6.03% drop.

    Last week's skid was just the latest episode in an erratic market that has seen the Dow zig-zag to a 16.21% loss from its peak of 12,810.54 on April 29. The sell-off spilled over into markets in Asia and Europe, and Fitz-Gerald says the pain is far from over.

    He believes that key U.S. stock indices will re-test their lows of March 2009. If you've blotted those details out as a bad dream, we're talking about a stock-market bottom of 6,547.05 for the Dow and 676.53 for the S&P 500.

    That put the Dow 7,617 points below its all-time high of 14,164 reached in October 2007 - a 53.78% drop. And the S&P's 56.8% decline knocked the index down 889 points from 1,565.15.

    The Safety Strategies to Embrace Now

    Worries about a decline of that magnitude could make the market sidelines seem like alluring real estate. Instead of cashing out, though, Fitz-Gerald says investors should follow these eight guidelines, while keeping an eye on their long-term investment goals.

    Investors should:

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