Nick’s Note: Regular readers know we’re bullish on the market. As we told you on Friday, both the economy and consumer demand is strong. But at over nine years and counting, some people may think the bull is getting long in the tooth…

Today, we turn to longtime PBRG friend Dr. Steve Sjuggerud, PhD. Steve’s one of the smartest, most accomplished investors we’ve ever met. And in the essay below, he explains why this bull market still has gas left in the tank…

By Steve Sjuggerud, editor, Daily Wealth

Can you beat the odds in Vegas? According to former MIT math professor Edward O. Thorp, the answer is yes—and he actually figured out how…

He literally wrote the book on it—Beat the Dealer—in the 1960s. It became a New York Times bestseller. The book explains how to reliably win the game of blackjack.

“I certainly wasn’t motivated by the hope of making big money,” Thorp said in his excellent autobiography, A Man for All Markets.

“What drew me was the chance of doing something people thought wasn’t possible, to be a bit prankish—the fun of just pulling it off.”

So how do you beat the house in blackjack?

At the beginning of a game, you can’t. You have no advantage.

However, once you get close to the end of the deck, it’s a completely different story…

As you approach the end of a deck of cards, your chances of winning can increase. You can change your strategy toward the end of some games to improve your odds of winning.

Here’s what’s going on…

The game of blackjack is also called “twenty-one.” That’s because your goal is to get as close as possible to 21 points—without going over that amount. You do this by collecting cards with different point values.

Thorp discovered that if a large number of “face” cards haven’t yet been played in the deck, then your odds of winning change.

The face cards in blackjack are Jacks, Queens, and Kings. They are all worth 10 points. (Therefore, 10s also count as face cards.)

Normally, if you have a total of 16 points in your hand, you would ask the dealer for another card. However, if a large number of face cards have not yet been played, then toward the end of the game, you are better off not asking for another card.

Meanwhile, the dealer will always take another card when he has 16 points (and your buddies probably will, too).

Thorp figured out that the odds of winning slightly tilt in your favor toward the end of the game. And that’s when you need to increase your bets the most.

I tell you this because we have a similar situation in the financial markets today…

In normal times, you can’t beat the market. You have no advantage.

But something extraordinary often happens late in the game. As you approach the end of the deck, your chances of winning can increase.

Likewise, as you approach the end of a great bull market in any asset, a cycle of higher and higher prices can get underway.

Whether it’s the housing market a dozen years ago, the dot-com boom nearly 20 years ago, or, to a lesser extent, bitcoin in late 2017… the situation changes late in the game. Something changes in investors, and they push prices higher in a way that doesn’t normally happen. A self-fulfilling boom kicks in.

Since 2009, stock prices have been going up. It’s one of the greatest stock market booms in history. But we still haven’t reached that moment—the moment where the game changes.

However, when it comes to this bull market, we’re approaching the end of the deck. We have counted cards along the way. And now, it’s time… The game is changing.

I call this final phase the “Melt Up.” And it means that big gains in a relatively short period of time are possible.

So where will the biggest gains happen?

They typically happen in the highest-volatility stocks. That usually means tech stocks, biotech stocks, and the more-volatile foreign markets.

These are what have been beaten up in the recent market decline. But they’re also where we’ll see the biggest gains when the “Melt Up” comes roaring back.

Today, we’re near the end of the game for this bull market. That gives us an advantage. We have a chance to earn big gains in a short period of time as a result.

Don’t miss it.

Good investing,

Steve Sjuggerud
Editor, Daily Wealth

P.S. On Wednesday, October 24, I will sit down in front of a live studio audience to discuss exactly what you should be doing with your money during this final stage of the “Melt Up”… and how to protect yourself from the eventual “Melt Down.”

During the event, you’ll also hear from some of the biggest names in finance, including legendary investors Jim Rogers, Whitney Tilson, and David Tice—plus loads of other celebrity guests.

You’ll even get one of my favorite “Melt Up” recommendations, which could soar 1,000% in the months ahead, absolutely free—just for tuning in… Click here to save your seat.

IN CASE YOU MISSED IT…

Any day now, China will open the largest factory in world history. Its sole purpose is producing one specific device—the same device that’s set to power the 21st century.

It requires an enormous amount of raw materials—as much as 1,073x the world’s current stockpile—every single year.