Stansberry Investor Hour

In this week's Stansberry Investor Hour, Dan welcomes Paul Podolsky back to the show. Paul is the founder of investment management firm Kate Capital. Paul believes that while the world is complex in how it functions, it can still be understood, and he reflects that in his investing and writing. Paul kicks things off by explaining why bond yields are rising. He says there's an increased amount of borrowing caused by the U.S. government and the AI build-out. Normally, the U.S. government would run a budget deficit during a crisis. But amid the ongoing Middle East conflict, the economy is healthy and the spending is coming from the government creating supply. Additionally, AI companies are in a "cage fight" vying for supremacy, and they're spending heavily to beat out the competition. Paul believes that folks should understand how the bond market operates because it does impact their daily lives. (0:00) Next, Paul discusses the two sectors responsible for the majority of earnings in the S&P 500 Index: AI and oil. The conflict in the Middle East has driven the price of oil higher, resulting in the drilling companies profiting from obtaining more of it. And the bonds and debt that the AI companies are issuing will be reflected in the earnings of companies that they are servicing (i.e., a Meta Platforms bond creating earnings for Dell Technologies). Paul says that debt creates supply and the goal for the companies that take on debt is to illustrate what the future will look like. But they have to be careful that they get it right, especially when there's a lot of competition. Paul says investors need to be cautious in picking the right company and avoid taking a "basket approach" mentality. (21:07) Finally, Paul shares how he finds new investing opportunities. He looks at data for various countries and uses AI to synthesize the information. He then looks at all the moving parts of each country (real yield, price to earnings, bond earnings) to make sense of the data. That helps him avoid risky areas and find attractive sectors. But unlike most stock investors who see it as a chance to buy more shares, Paul tries to avoid massive drawdowns. And he'll also get out of a trade if he can't understand why its price is moving (down OR up). (38:14)

In this week's Stansberry Investor Hour, Dan welcomes Ben Hunt back to the show. Ben founded Epsilon Theory, a newsletter with more than 100,000 readers that examines markets through the lens of narrative. He's also the president and co-founder of Perscient, an AI research firm and software company. Ben kicks things off by explaining why interest rates have been going up and why the rise might not be as much of a short-term event as folks believe. He says that while the war in the Middle East has contributed to the short term, there is such a surge of borrowing coming from the Big Tech companies that the government sees this as a chance to make money from it. And unlike the conflict that has no definite end date and could conclude relatively soon, the hyperscalers will be borrowing for a greater period of time. Ben says that those companies are the new "too big to fail," so they will do whatever it takes to protect themselves from a loss, including obtaining a government backstop on their debt. But he wants there to be a limit to how much the businesses can gain in the event of continued rapid success. (0:00) Next, Ben shares why there could be concerns for annuity reinsurers. While the insurance industry can handle rising interest rates, if they increase too much, too quickly, that jeopardizes wealth managers who advise their clients to put their money in annuities. And with insurers using Treasurys as a hedge, if rates also have an impact on the Treasurys, they'll be devastated. And then, Ben wonders with all of the data-center build-out spending whether there will be room for three competitors at the top. (21:17) Finally, Ben provides his thoughts on AI. He believes that AI is becoming so integrated into our way of life that it has changed our way of thinking. Additionally, because it has surpassed being used for labor and has reached the point where it can "think" as well as humans, occupations like mathematicians may no longer be needed, and those who pursue such fields do so as a hobby. But while AI can provide us with rapid answers and is used in writing, Ben believes that as long as the need for conversation exists, humans will always be at the center of creating – and that cannot be replaced. (37:45)

In this week's Stansberry Investor Hour, Dan welcomes Rob Spivey back to the show. Rob is the director of research at our corporate affiliate Altimetry. He and his team utilize their proprietary Uniform Accounting strategy to dig through the as-reported numbers in company reports to find their true value. Rob kicks things off by providing a deep dive into Altimetry's Defense Gold Rush webinar. In short, the Association of the United States Army ("AUSA") is hosting its annual confab in October. And it's not just the U.S. Army meeting up with the defense companies – other countries from around the world also attend with the goal of striking a deal with some of our nation's weapons manufacturers. So this is the best place to learn where the contracts are being made and where the money is flowing. But Rob says that it's not the big businesses you should be paying attention to, but the smaller ones. (0:00) Next, Rob explains why microcaps are some of the best businesses that provide growth opportunities. The majority of stocks in the S&P 500 and S&P 100 indexes were once microcaps, and if you can find a company that has the same potential and value, your investment could soar. But Rob understands why folks are cautious of microcaps – there are some bad apples out there. That's why he and Altimetry Chief Investment Officer Joel Litman created a "Do Not Buy" list of stocks that investors should avoid unless they make tremendous improvements. And Rob says that we haven't seen such a great opportunity in defense stocks since the 1980s. (19:25) Finally, Rob discusses the U.S. government's $40 trillion debt and why it's not as bad as people believe. The U.S.'s revenue is able to offset its debt, so it can afford to take on that amount. Additionally, Rob says that every American should want the government to run a reasonable deficit every year. That creates value for us as citizens by growing our economy. And Rob says that folks are mistaken for selling off the hyperscalers just because they've become net debtors. (34:03)

In this week's Stansberry Investor Hour, Dan welcomes Bryan Beach back to the show. Bryan is the senior analyst for Whitney Tilson's Ultimate Upside and a senior analyst on Stansberry's Investment Advisory. Bryan kicks things off by discussing what's new in the Whitney Tilson's Ultimate Upside newsletter (previously Venture Value). Both Bryan and Whitney have teamed up to develop a new system built upon the proprietary Stansberry Score that further helps subscribers find overlooked, high-value stocks that have room to grow. The three newest recommendations that their new system discovered are already performing well. And Bryan warns of the belief that a stock is cheaply valued when it returns so little. (0:00) Next, Bryan shares how peer groups aren't as easy to identify as many folks believe, especially in technology or consulting companies. While a business might offer a product that competes with another company, its other services might not be related at all. And with small caps, it's even harder to find a true peer due to differing business practices. So Bryan and Whitney look at historical valuations to compare them instead. Bryan then shares how his views on the utilization of technology, such as the Stansberry Score, in investing have changed after finding one company he wouldn't have considered without it. (23:29) Finally, Bryan mentions how Whitney's connections help provide an edge in learning more about a company and to gain wisdom that has been built up over decades of experience. One lesson that Bryan learned is that you don't need to be completely rigid in your philosophies. Near the beginning of the Russia-Ukraine conflict, he thought it might be best to recommend energy stocks in Venture Value to hedge against that , despite the fact that they weren't value stocks. And Bryan expanded upon Whitney's idea for the Ultimate Upside. (38:41)

In this week's Stansberry Investor Hour, Dan welcomes Jason Shapiro back to the show. Jason is the founder of Crowded Market Report and a seasoned futures trader with a proven approach built on exploiting crowd behavior. He has more than 10,000 subscribers on his Substack. Jason kicks things off by detailing three signals he focuses on when he wants to make a contrarian play against what the market's doing. He executes this strategy by looking for extremes in a bearish position and waits for the market to start heading in the opposite direction before making a short-term trade. But Jason emphasizes that being a contrarian isn't just about betting against the market. To be successful, you have to understand market tone, which is the sentiment that confirms your thesis is correct, and a position has reached its lowest point before it starts improving. But he only makes trades if he likes the potential risk to reward. (0:00) Next, Jason explains the difference in focus between professional traders and novice traders. The professionals like to focus on risk to mitigate losses, while the novices focus on maximizing profits that they might not even make. And even if they are successful a few times, over the long term, they're going to lose most of the time. And that's why Jason says that you need to know why you're trading. If you know that, you become more disciplined in making trades. Jason then describes how Crowded Market Report has encouraged him to become a better trader. (19:11) Finally, Jason shares the story of the time he spent living with monks, which gave him some perspective on life. It didn't fully resonate with him at the time, but over the years, he has learned to emphasize happiness over money, and that has given him personal satisfaction in life. He then explains why he decided to run Crowded Market Report by himself and expresses the freedom that brings. He ends things by giving listeners a dire warning about believing that they can outsmart the market. (38:46)

In this week's Stansberry Investor Hour, Dan welcomes Harvey Sawikin to the show. Harvey is the co-founder and principal of Firebird Management, a fund that focuses on investing in emerging markets, primarily in Eastern Europe. Harvey kicks things off by stating that emerging market investors don't pay enough attention to politics compared with macroeconomics. He says that you can glean insight into how a country could develop if you understand its politics, especially in cases where there's new leadership. But it's still important to understand the macroeconomics, as those have been red flags for otherwise promising markets. And he shares why folks would want to invest in emerging markets despite strong growth in American companies. (0:00) Next, Harvey explains how emerging markets view the dollar. If a country exports commodities, it might not care about the strength of the dollar. Additionally, some exporting countries might prefer to have a slightly weaker currency to look more appealing compared with U.S. companies, so traders use the local currency to invest in these markets. Harvey then gives his background with investing in AI companies (with one that went from $8 a share to $240 a share) and his thoughts on the technology. (22:38) Finally, Harvey informs listeners that it's OK to be cautious during the AI frenzy. No one knows where the peak of the hype will be, but it might be beneficial to avoid throwing all your money at AI (especially AI companies where you can't even tell what their product is). Harvey believes that patience is the key to successfully navigating the markets, and when everyone is bullish, it's even more crucial. But at the end of the day, it's up to the individual investor – not someone pushing a stock or fund – to determine when they want to get into a position. (40:01)

In this week's Stansberry Investor Hour, Dan welcomes Rick Rule back to the show. Rick is the president and CEO of Rule Investment Media, which boasts more than 28,000 subscribers on Substack. With nearly 50 years of experience managing investments, primarily in the natural resources sector, Rick is an authority in the field. Rick kicks things off by providing his long-term view on oil and gas as commodities, as well as his view on oil and gas stocks. He says that while the price of oil could temporarily decline if the conflict in the Middle East reaches a permanent resolution, current prices could be a glimpse of what's in store within the next four years. And according to Rick, many oil and gas companies are "cannibalizing" themselves by directing money away from reinvesting in their businesses and into dividends and share buybacks, which will impact production in the long term. (0:00) Next, Rick shares his disdain for how government spending and interference have impacted both taxpayers and investors. He personally wrote an e-mail to President Donald Trump to inform him about one of the largest copper deposits in the world just sitting around. It sits on U.S. soil, but we have done nothing to begin production due to regulations. Rick then shares advice for listeners who want to invest during the oil shortage. (22:00) Finally, Rick explains why "stingy" dividends are beneficial to investors. He goes further and reveals why capital-intensive companies should reinvest in their projects and illustrates why one Brazilian company is set up to disappoint investors who bought shares due to absurdly high dividends. Rick then states that institutional investors have been wrong about oil and gas. Many activists have predicted that fossil fuels will no longer be desired and will soon die out. On the contrary, with the growing need for energy, demand will continue to endure. (37:20)

In this week's Stansberry Investor Hour, Dan welcomes George Noble to the show. George is the managing partner of Noble Capital Advisors. He's also the author of The Noble Update on Substack, which has more than 13,000 subscribers. George kicks things off by expressing his skepticism about Tesla. He says that despite the company branching out into different areas, the majority of its revenue comes from car sales and should therefore be treated as a car company. He also believes that investors are improperly valuating the stock, ignoring the fundamentals in favor of "charts" and "the narrative." And his sentiment extends further out into SpaceX. Due to the Nasdaq Composite Index altering the rules for listing stocks, George thinks that the company's upcoming IPO is not going as well as people might think if it couldn't meet the previous requirements for entry. (0:00) Next, George discusses semiconductor capital expenditures. He says that folks are too caught up in the current boom and aren't looking at whether a company has a price to earnings that warrants buying a company's stock. Then he shifts the conversation briefly to bonds, saying that the market is so focused on energy due to tension surrounding the Strait of Hormuz that it hasn't noticed that bond rates have gone up, which normally go down during war. And his concern with that is what happens when we face a deflation bust. Additionally, investors aren't even aware of how hyperscalers have been hurting their portfolios, thinking that they hold a diversified collection of stocks. (13:26) Finally, George shares how U.S. bonds are losing their worth due to the weakening dollar and warns that folks should "run, not walk" from their bonds. While bond coupons are enticing, the value of the money you receive is not worth it in the long term. George believes that the value of the dollar is currently pegged to U.S. expenses and payments, and just like when it was removed from the gold standard, he says that we need to cut it loose to end the continuing downward spiral. And he leaves listeners with a word of encouragement – and caution for newer investors. (27:41)