Stop Paying Too Much for Stocks

On this week's Stansberry Investor Hour, Dan and Corey welcome their colleague Mike
Barrett back to the show. Mike is editor of Select Value Opportunities and senior analyst of
Extreme Value. He joins the podcast to talk extensively about valuations, why you should
never pay too much for a stock, and the opportunities he sees in the market today.

Mike kicks off the episode by giving updates on his pecan plantation and his weekly Select
Value Opportunities newsletter. He explains that this service helps subscribers beat the
market while taking on less risk. The portfolio has returned about 14.5% since inception and
has outperformed its benchmark for nearly 80 straight weeks. Mike's secret to
outperformance is his system... It focuses on valuations and gives daily rankings of 100 well-
known stocks. That way, subscribers can enter positions at an ideal moment. Mike
emphasizes the importance of valuation and reminds listeners that it's a metric for future
performance. (1:34)

Next, Mike analyzes the differences between valuing stocks in public markets and his past
experience with valuing real estate in private markets. Plus, he talks more about momentum
being another important factor in picking stocks and how valuations have changed in recent
times. As Mike explains, the first year he started his service, only 5% of stocks were
overvalued. Now, in the past year, 30% are. This is "unprecedented" and a "warning sign"
that investors should be aware of. Still, Mike's system can help prevent huge losses. (19:28)

Finally, Mike gives his opinion on the overall market action and the broader economic
picture. He brings up market cycles, his belief that unemployment is about to be a big issue,
and factors that will lead gold and silver prices higher from here. He points out that there are
fewer higher-paying jobs available now and that most growth has been in lower-paying jobs.
This is skewing the jobs data. And he also discusses the importance of the housing sector
when it comes to inflation. (37:27)