Hey there, my name is Eric Fry. Welcome to Smart Money. I’m glad to have you here. If you haven’t already, be sure to read your promised special report. You can always find it in our Research Reports archive. Once you’ve done that, I invite you to visit our website here and learn more about us. And don’t forget to “whitelist” our email to ensure you never miss a letter from us. It’s important that you ensure Google or your email provider doesn’t send our letters to the junk folder. To prevent this from ever happening, simply create a filter for our emails by following the “Settings” and “Filters” navigation. Check the “Never Send to Spam” box and you’re set. This is my free eletter, where I’ll be coming to you about four times every week. You can always find a complete archive of recent and past articles here. And if you’d like to learn about me and the other services I run – including Fry’s Investment Report and The Speculator – go here. Now that we’ve got that business out of the way, let’s talk some about what to expect from Smart Money. Wall Street has sold investors on the idea that they should start with “micro” analysis, the idea that they should make investment decisions by comparing things like price-to-earnings ratios, income statements, or other company details. But I do the opposite. I start with the “macro” analysis. I look for big-picture trends that drive huge, multiyear moves in entire market sectors. I’m talking about trends that can spin off dozens of triple- and even quadruple-digit gains in just a few years. Catching just one of these trends at the right time can help anyone rack up enough “generational” wealth to support themselves in retirement… and even enough to leave riches behind. When investors use the global macro strategy, they identify investment opportunities from a broad, global, top-down perspective rather than by examining stocks individually (a micro, bottom-up perspective). For instance… - The price trend of crude oil could prompt us to buy stock in an Australian transport company…
- Weather patterns in the American Midwest could make us want to short a Russian fertilizer producer…
- Or changes in the Chinese economy could have us running out to pick up a Brazilian iron ore stock.
Compelling opportunities can emerge in any major financial market... and even some minor ones. Throughout history, the greatest global macro traders have made billions of dollars by trading any asset... in any country... in any direction. - During the 2007-’09 financial crisis, John Paulson made nearly $4 billion using credit default swaps to bet against the U.S. subprime mortgage market.
- In 2009, David Tepper believed the worst of the financial crisis was over for the U.S. banks. So, he took a big position in bank stocks and made more than $5 billion as banks recovered.
- In 1992, George Soros and Stanley Druckenmiller made more than $1 billion by betting against the British pound.
- In 1991, Louis Bacon made a one-year return of 86% by anticipating the effects of the U.S. invasion of Iraq. He went long oil and made more money in one year than most people make in a lifetime.
- In 1987, Paul Tudor Jones earned $100 million by anticipating the Black Monday stock market crash and making bearish bets.
- And in 2000, Sir John Templeton bet on the dot-com bubble bursting and made $80 million. As overpriced tech stocks began plunging, he made a fortune.
I think there’s room for more names on that list. Maybe yours. And you won't have to get there by day trading in and out of stocks. That's not our strategy at Smart Money. Here’s what is… Where You Make the Real Money In each issue of Smart Money, my team and I will help you learn about global macro analysis and highlight stocks we think are worth taking a further look at. And with that knowledge, you’ll soon be pinpointing huge trends as they take off. I’m talking about the kinds of trends that can generate huge, multiyear moves in stock prices. That’s where you make the real money. I’m not exaggerating when I say that if you spot one of these big trends early, take a sizable position, and ride the wave, you can make life-changing returns. You only need to catch one big wave to make a large amount of money. Let me share a real-life example… In 2000, while most investors were wild for Silicon Valley's tech stocks, an incredible development unfolded on the other side of the world. China was entering the early stages of the biggest infrastructure build-out in history. The country began constructing highways, ports, bridges, factories, and power plants on a scale never before seen in history. Of course, all that activity required stunning quantities of natural resources. To fuel its building binge, China consumed massive amounts of copper, iron ore, oil, natural gas, coal, zinc, and tin. This construction boom created one of the biggest, longest commodity bull markets in history. During this bull market: - The share price of oil producer Suncor Energy Inc. (SU) gained more than 1,300%.
- Copper miner Freeport-McMoRan Inc. (FCX) soared more than 2,000%.
- Norilsk Nickel Mining & Metallurgical Co. (NILSY) climbed more than 3,500%.
- And the stock of Brazilian iron ore producer Vale SA (VALE) rocketed nearly 10,000%!
While these resource stocks were busy producing their spectacular gains, a huge macro-opportunity in gold was just getting underway. Throughout the 1990s, gold was ignored by the investment public. It had been a “dead money” investment for almost two decades. But in 2001, I called gold my “trade of the decade.” Back then, tech stocks were crashing, and geopolitical tensions were heating up because of the 9/11 attacks. Global central banks responded to these dual traumas by printing more and more money. As a result, investors flocked to gold as a hedge against both volatility and currency debasement. From its 2001 low of around $250 an ounce, gold soared to nearly $2,000 an ounce by 2011, a gain of more than 600%. This big move produced incredible moves in gold stocks. During this epic bull market: - Top gold miners like Goldcorp Inc. (GG) and Compañía de Minas Buenaventura (BVN) advanced more than 1,500%.
- Gold royalty company Royal Gold Inc. (RGLD) soared more than 4,000%.
- And shares of big Mexican silver and gold miner Industrias Penoles SAB de CV (IPOAF) rocketed nearly 10,000%!
Results like that would be impressive anytime. But consider this: Smart investors were making these huge gains while U.S. stocks were losing ground. The gaping divergence between Freeport-McMoRan’s huge upswing and the S&P 500’s simultaneous downswing highlights the power of global macro investing… of Smart Money investing. A similar divergence is now setting itself up in the American Heartland – it’s the emergence of a global macro trend we’ll be covering often in Smart Money. Let’s take a peek… The Silicon Heartland The newest face of America is emerging from the “ghosts of industries past.” Throughout the so-called Rust Belt states of the Upper Midwest, vibrant new high-tech industries are emerging from the crumbling foundations of ancient ones. This epic transformation is not a fait accompli, but it is advancing rapidly. As the chart below shows, Rust Belt GDP has been trending lower for decades relative to the overall U.S. GDP.  But as new high-tech industries sprout from the old warehouses of the Upper Midwest, economic growth could reverse course and embark on a powerful, multiyear upswing. We’ve seen a version of this movie before in the Southeastern part of the U.S. In the 1990s, many high-tech, finance, and automotive industries started migrating to the Southeast. Although this migration started as a slow trickle, it eventually swelled into a flood of inbound investment. During the last three or four years in particular, the booming electric vehicle industry has been blanketing the Southeast with dozens of new EV and EV battery factories. As a result, 10-year GDP growth in the core EV hub states of Tennessee, Georgia, and South Carolina has been growing 20% faster than the overall U.S. economy.  Partly, the Rust Belt’s revitalization is taking place organically, due to basic economic considerations like the cost of land, labor, and transportation. However, the long, meddlesome arm of government is also playing a role. Let’s take a peek at a couple of representative case studies… The Tale of Two Companies About two years ago, Intel Corp. (INTC) announced it would be making the single largest private-sector investment in Ohio history. The semiconductor company pledged to spend $20 billion to build state-of-the-art foundries on a 1,000-acre site in Licking County, Ohio. To advance this project, Intel is not only leaning on its own balance sheet, but also is lobbying for funds from the $52-billion CHIPS and Science Act. The company hopes its massive investment in Ohio will help create what it calls a “Silicon Heartland” that will establish a new regional economic cluster for U.S. chipmaking and become an epicenter of leading-edge technology. As Al Thompson, Intel’s vice president of U.S.-Canada Government Affairs explains… Powered by the promises of the CHIPS Act, Intel is doubling down on research and development (R&D) that will fuel new, leading-edge chip manufacturing facilities to power today’s advanced technologies and tomorrow’s transformative innovations… In just one year, the CHIPS and Science Act sparked more than $200 billion in private investments for U.S. semiconductor production, and more than 50 new semiconductor ecosystem projects have been announced across the U.S. The second case study emerges from the state of Indiana. On July 20, 2022, a small, specialist semiconductor company named SkyWater Technology Inc. (SKYT) announced plans to build a semiconductor production and R&D facility in West Lafayette, Indiana, right next door to Purdue University. By co-locating the fab at Purdue, SkyWater expects to benefit from the pipeline of talent that will emerge from the university’s new semiconductor-focused degree programs. To finance its ambitious project, SkyWater applied for a $1.8 billion federal grant under the CHIPS Act. If the application is successful, SkyWater could receive those funds any day within the next two or three months. To better understand how this government money might splash down in this part of the new Silicon Heartland, let’s take a look at the twists and turns the SkyWater story has taken already… May 27, 2020: Indiana’s Republican Senator Todd Young and New York’s Democratic Senator Chuck Schumer unveiled their co-authored Endless Frontier Act. The bill was the precursor to the CHIPS Act. April 12, 2021: The White House hosted the Virtual CEO Summit on Semiconductor and Supply Chain Resilience. SkyWater CEO Tom Sonderman attended that “virtual” meeting, along with 18 other CEOs of semiconductor companies. At one point during the summit, President Joe Biden held one of SkyWater’s silicon wafers aloft and declared, “This is infrastructure.” 
(Source: The Asahi Shimbun) Jun. 8, 2021: The Endless Frontier Act morphed into the U.S. Innovation and Competition Act of 2021. May 25, 2022: Indiana’s Republican Governor, Eric Holcomb, and the state’s Secretary of Commerce, Brad Chambers, unveiled plans to convert 10,000 acres of corn and soybean fields into the LEAP Innovation District. Taking a page from Field of Dreams, Holcomb and Chambers pursued a build-it-and-they-will come strategy. But the LEAP District and its related infrastructure is a significantly more ambitious project than building a baseball field for the ghost of Shoeless Joe Jackson. “We’ve never done anything at this scale,” Chambers explained. “It’s a multibillion-dollar commitment by the state to be ready for the transitions that are happening in our global economy.” Also, Eli Lilly & Co. (LLY) agreed to become the first major tenant by investing a whopping $3.7 billion to build new production facilities at the LEAP District. May 27, 2022: Purdue launched the nation’s first comprehensive Semiconductor Degrees Program. The university introduced a suite of innovative, interdisciplinary degrees and credentials in semiconductors and microelectronics, with the goal of preparing the next-generation semiconductor workforce. Many leaders of the semiconductor industry applauded the move enthusiastically. July 28, 2022: Congress passed the CHIPS Act. Aug 9, 2022: Biden signed the CHIPS Act into law. Intel CEO Pat Gelsinger and SkyWater’s Sonderman both attended the bill-signing ceremony at the White House, which suggests that both companies have a better-than-even chance of acquiring funding from the CHIPS Act. For perspective, roughly 500 companies have applied for funding from the CHIPs Act, but almost none of their CEOs attended the bill-signing ceremony. September 14, 2022: U.S. Secretary of State Antony J. Blinken, U.S. Secretary of Commerce Gina M. Raimondo, Indiana Governor Eric J. Holcomb, and U.S. Senator Todd Young visited Purdue to discuss the role of universities in CHIPS Act funding related to microelectronics research, manufacturing, and workforce development. August 10, 2023: “We will start to give out the money later this year,” Raimondo announced. “We’re pushing the team to go fast – but even more importantly, we want them to get it right.” The waiting game continues, but the path ahead seems clear. Government funding is about to pour into the heart of the heartland into companies like Intel and SkyWater. And I expect new waves of investment to continue reaching the Silicon Heartland. Therefore, I continue to recommend Intel shares as a great way to play the onshoring of semiconductor production in general, and the growth of the Silicon Heartland in particular. This is how global macro analysis works… and we’ll keep doing it here at Smart Money several times each week. Summing Up To be clear, I’m not saying global macro analysis will pinpoint the exact bottom or top of every big move. Instead, I highlight what’s possible when a big financial wave hits a specific financial market or industry sector. The world’s financial markets share fundamental connections to one another. As they interact, they produce a continuous stream of opportunities. A disciplined and informed Smart Money analysis has the power to identify these opportunities. And it will do so just as they are on the verge of producing millions for smart investors. I know you will make the right decision to move the needle in your financial life. And I’ll be your guide through it. You can get started by checking out the article archive and special research report archive at the Smart Money website. Everything you find there is absolutely free – and I’ll be delivering you more articles up to four times a week… and regular research reports… throughout the year. Look for your next article soon… and I’ll see you back here at Smart Money. Regards, Eric Fry
Editor, Smart Money P.S. Why are Warren Buffett, Jeff Bezos, Michael Bloomberg, "The Walmart Family," Bill Gates, and 48 members of Congress shifting their stocks in a frenzy? And why are they piling into ONE unique corner of the market... Keep in mind... This corner of the market is NOT artificial intelligence... Click here for the details. | 
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