Porter Stansberry, a renowned investment researcher and financial commentator, has long been known for uncovering unconventional yet highly effective investment strategies. His latest insight revolves around an age-old but often overlooked financial model: the insurance industry.
Dubbed “God’s Investment,” under Big Secret on Wall Street, this model combines historical resilience, modern practicality, and profound wealth-building potential. In this review, we’ll explore the key aspects of Stansberry’s approach and why insurance investments might be Wall Street’s best-kept secret.
An Ancient Financial Secret with Modern Relevance
Insurance is not a new concept; its origins can be traced back to the ancient Babylonians and Romans, who developed systems to collectively safeguard against risks. However, its transformation into a sophisticated industry has made it one of the most stable and lucrative sectors in the modern economy.
Porter Stansberry emphasizes that this “ancient financial secret” has been consistently used to generate and protect wealth across centuries, whether for aristocratic families, religious institutions, or modern billionaires.
The insurance industry’s defining characteristic is its reliability. Unlike speculative investments, such as cryptocurrencies or meme stocks, insurance companies provide predictable cash flow by collecting premiums from policyholders regardless of economic conditions.
This stability, coupled with the reinvestment of premiums into growth opportunities, has made insurance a cornerstone of global wealth creation.
The Wealth-Building Engine: Float
At the heart of the insurance industry’s financial success lies the concept of “float.” Float refers to the pool of money collected from policyholders as premiums, which insurers hold and invest before claims are paid out. This creates a significant advantage: insurers receive funds upfront and can invest them for years—sometimes indefinitely—without paying interest.
For instance, Markel Corporation, often called a “baby Berkshire Hathaway,” has used its float to generate extraordinary returns for decades.
Similarly, Buffett often described the insurance business as a “money machine,” highlighting how National Indemnity, one of his first insurance acquisitions, provided him with billions of dollars to reinvest in companies like Apple and Coca-Cola.
Float isn’t just an interest-free loan; it’s a compounding engine. Insurers invest this capital in bonds, stocks, and other high-return assets, accelerating their wealth accumulation. This perpetual cycle of collecting premiums, investing float, and compounding profits explains why insurance has consistently outperformed other industries.
Historical Success Stories
Porter Stansberry illustrates the transformative power of insurance investments through several real-world examples.
One of the most famous is again Warren Buffett’s acquisition of National Indemnity in 1967. This single investment gave Berkshire Hathaway access to a vast pool of float, which Buffett reinvested into lucrative opportunities, propelling Berkshire into one of the world’s largest conglomerates.
Another example is Shelby Davis, who started with just $50,000 and focused exclusively on insurance firms.
Over five decades, his investments grew into a $900 million fortune, proving that disciplined, long-term investment in the insurance sector can yield extraordinary results.
Why Insurance Stands Out
Stansberry argues that insurance is unlike any other investment. Its unique characteristics set it apart:
- Stability and Predictability: Insurance companies generate consistent revenue because people and businesses always need coverage, regardless of economic conditions. The demand for insurance is often legally mandated, ensuring steady premiums even during recessions.
- Resilience in Economic Downturns: While stocks and speculative assets can lose significant value in volatile markets, insurance firms maintain stability due to their consistent cash flow and conservative investment strategies.
- Compounding Growth: The reinvestment of float allows for exponential wealth creation over time, far surpassing the returns of many traditional investments.
Challenges and Opportunities
Despite its proven potential, the insurance industry remains underinvested by the average person. According to Stansberry, this is due to several challenges, including the complexity of understanding insurance accounting and the need to trust management teams. Poor underwriting or fraudulent practices can quickly erode a company’s profitability, making careful selection crucial.
However, these challenges also create opportunities for informed investors. By identifying firms with strong underwriting discipline and sound management, investors can secure shares at discounted prices, unlocking significant upside potential.
The Perfect Time to Invest
Porter Stansberry argues that now is an ideal time to explore insurance investments. High interest rates are particularly advantageous for insurers as they increase returns on their investment portfolios.
Additionally, the sector’s inherent recession resistance makes it a safe haven during economic uncertainty. As speculative bubbles in areas like NFTs and cryptocurrencies deflate, insurance remains a reliable source of steady growth.
Smaller insurance companies, in particular, present compelling opportunities. Unlike industry giants such as Berkshire Hathaway, which face challenges scaling further, smaller insurers often deliver faster compounding and are frequently undervalued.
How to Start Investing in Insurance
Stansberry provides a clear roadmap for those looking to capitalize on this wealth-building model.
First, he recommends researching companies with strong underwriting records, measured by a combined ratio (expenses and claims as a percentage of premiums) below 100%. A low combined ratio indicates that the insurer is profitable in its core operations.
Next, investors should assess how these companies use their float. Firms that reinvest float into high-growth opportunities, such as stocks or acquisitions, tend to generate the highest returns.
Finally, Stansberry advises adopting a long-term perspective to allow compounding to work its magic. Historical data shows that disciplined, patient investors reap the most significant rewards in this sector.
To simplify the process, Stansberry’s exclusive service, The Big Secret on Wall Street, offers a comprehensive investment research package that delivers actionable insights, curated strategies, and exclusive benefits for its members.
The Big Secret on Wall Street: Exclusive Offerings by Porter Stansberry
With decades of experience in identifying lucrative market opportunities, Stansberry has crafted this flagship advisory service to empower investors with tools and knowledge to grow wealth consistently, even in volatile market conditions. Here’s a closer look at the offerings included in this exclusive membership.
Comprehensive Investment Insights
Members receive access to a series of detailed reports, each focusing on unique and high-potential investment opportunities:
- God’s Investment: A deep dive into the insurance industry, described as one of the world’s greatest wealth-building vehicles. It includes detailed analyses of top insurance companies, their tickers, and why they stand out.
- Intellectual Compounders: Explores seven companies that leverage licensing and royalties to achieve unparalleled capital efficiency. These businesses operate with minimal reinvestment and generate recurring income through intellectual property and software royalties.
- Property & Casualty (P&C) Insurance Valuation: Offers a watchlist of top insurance stocks, complete with valuation ranges and buy alerts, ensuring members build a robust portfolio of high-performing insurance companies.
Additional briefings provide insights into specific market sectors, such as technology integration in traditional industries, and introduce members to under-the-radar investment opportunities like “The 50% Compounder You’ve Never Heard Of.”
Exclusive Portfolio Access
One of the most compelling aspects of the membership is access to Porter’s full insurance portfolio, which boasts an average return of 75% as of December 2. This portfolio is meticulously curated to include the best companies in the property and casualty insurance sector, with detailed buy recommendations, updates, and risk evaluations.
The Big Secret on Wall Street Portfolio
This portfolio serves as the flagship of Stansberry’s advisory, offering a diverse array of investment strategies. Divided into seven distinct sections, it provides:
- Comprehensive buy-up-to ranges.
- Original research on each opportunity.
- Regular updates, including recommendations on when to buy more, hold, or sell.
Ongoing Research and Insights
Membership includes weekly updates from Porter and his team, keeping members informed about the most critical financial and economic developments. These updates provide actionable insights into market risks and opportunities, allowing members to stay ahead in their investment strategies.
The Big Secret on Wall Street Library
Members gain access to an extensive archive of past issues, reports, and exclusive content, including some of Porter’s most significant works, such as The Gods of Gas, The End of America, and The Goldman Sachs of White Trash. This library serves as a treasure trove of high-quality financial research.
Another standout feature is Porter’s Permanent Portfolio, designed to perform consistently under market conditions. This portfolio is tailored to withstand economic uncertainty while achieving steady growth, with detailed instructions on asset allocation and investment percentages.
Educational and Networking Opportunities
Traders have exclusive access to recordings from Porter’s annual conferences held at his Maryland farm, typically reserved for elite investors. These events feature high-value investment strategies and insider insights shared by Porter and guest analysts.
Additionally, the Porter & Co. Spotlight offers weekly insights from top financial analysts and thought leaders, complementing Porter’s strategies with fresh perspectives.
Unmatched Value and Guarantees
Members receive a 30% discount on their first year of membership, reducing the cost from $1,425 to $1,000. Credits can be applied toward this membership for those who have previously purchased Porter’s research.
Triple-Promise Guarantee
Porter Stansberry ensures a risk-free experience with a three-part guarantee:
- Members receive unparalleled insight and investment ideas.
- The advice provided aligns with what Porter himself would offer his closest loved ones.
- A dedicated team is available to assist with any queries.
Members can request a refund within the first 30 days, less a 10% cancellation fee if dissatisfied.
Conclusion: A Path to Lasting Wealth
Porter Stansberry’s research focuses on investments that compound wealth over decades, avoiding the speculative noise of the market. By combining the stability of the insurance sector with the efficiency of licensing-based businesses, members gain access to a proven strategy for financial independence. This opportunity is ideal for investors seeking consistent, low-risk returns, a long-term approach to wealth creation, and guidance from a seasoned team with a track record of success.