The Pros Have Misread the Market

On this week's Stansberry Investor Hour, Dan and Corey welcome Joel Litman back to the show. Joel is the founder and chief investment officer of our corporate affiliate Altimetry, where his team uses their Uniform Accounting system to look beyond the as-reported numbers in financial reports to see how companies are really performing.   Joel kicks things off by discussing the resilience of the U.S. stock market, which has takenmany professional investors by surprise. He states that historically, tariffs have not been a tax on consumers, with exporters absorbing 50% to 60% of costs to maintain their market share. Joel also argues that the U.S. dollar continues to be strong and that despite recession woes, corporate credit shows the economy is persistent. (0:00)   Next, Joel urges folks not to give in to the "fear of getting in" (the counterpart to the "fear of missing out"). Because investors are seeing new highs, they think they've missed out on buying in, but Joel says that's a mistake. Joel also shares his thoughts on the usage of AI and how many concerns over it replacing the entire workforce are unwarranted. Additionally, he says that the investment advice it provides is often incorrect and that is should be used as a supplement to research instead. (26:36)   Finally, Joel reflects along with Dan and Corey on Nobel Prize-winning economist Eugene Fama and the scope of his knowledge. Joel also provides a brief explanation of what he and his team look for at Altimetry. And he provides a glimpse of some of his latest research.(45:41)

On this week's Stansberry Investor Hour, Dan and Corey welcome Chris Irons to the show. Chris started writing about finance back in 2013 under the moniker Quoth the Raven and was a speaker at the 2019 Stansberry Conference. Chris kicks things off by addressing tariffs and shares how nominal prices will continue to rise regardless of what we do. He says the cycle of crashes and money-printing has continued to accelerate and create bigger distortions and drops. And he discusses passive bids that pile into the S&P 500 Index and cause valuations to become stretched. He warns against overexposure to the fund due to potential drawdowns in any of the "Magnificent Seven" that could take the index down with them. (0:00) Next, Chris states that the market has gone "all in" on options instead of equities, creating a state of leveraged gambling. And he predicts that things have changed so much that despite the beliefs that there will continue to be government bailouts or other solutions, this cannot continue. Something will break eventually. However, it's not all doom and gloom. Chris says you just have to find where there's good value. (24:06) Finally, Chris shares advice on how to hedge any large market crashes based on his own strategies. He also cautions against buying into assets in blind hope of reaching a bottom. If a company is burning money without generating any cash, there won't be a bottom to bounce off of. (42:19)

On this week's Stansberry Investor Hour, Dan welcomes Joe Boskovich to the show. Joe is the founder of Old West Investment Management, an investment firm focused on finding high-quality companies with deep value.   Joe kicks things off by sharing his background in company management. He states that he uses his past experience to evaluate how the companies he considers investing in are being run. Examining the steps management takes and how they behave will reflect their long-term goals with the company and if the correct actions are being taken to help the company succeed. And Joe says one of the easiest ways to gain insight is by seeing how they're being paid. (0:00)   Next, John compares the differences between deep-value companies and distressed companies, showing how one that might appear to be "junk" might have potential if it's run well. And while folks love the big tech companies, most don't think about the metals that are needed in the products that they manufacture, which are where the bigger opportunities lie. (20:41)   Finally, Joe and Dan talk about company scale and how companies should handle expanding locations. And Joe mentions how stock picking has become "a lost art" due to investors putting their money into indexes and exchange-traded funds. He shares several companies in the homebuilding sector that have caught his attention. And he warns about selling your stocks too soon. Joe views his investing as a "partnership" with the companies that he wants to own in the long run. (41:05)

On this week's Stansberry Investor Hour, Dan welcomes value investor Tobias Carlisle back to the show. Tobias is the founder and portfolio manager of Acquirers Funds, a deep-value investment firm. He's also an author and host of the Acquirers Podcast. Tobias kicks things off by discussing the "happy hunting ground" in small-cap stocks, the market narrowing in the S&P 500 Index, and the massive amounts of capital flowing into AI. He also compares the AI mania today with the dot-com boom of the late '90s, questions how AI is making money, and notes that the bottom 490 stocks in the S&P 500 have been in a "little recession" since 2022. He says this gives value investors an opportunity right now to get great names for cheap before the inevitable rebound. After that, Tobias comments on passive investing, what could be in store for the top 10 large caps, and why fears of AI destroying the jobs market are overblown. (0:00) Next, Tobias talks about his company's two funds: the Acquirers Fund (ZIG) and Acquirers Small and Micro Deep Value Fund (DEEP). He explains what he looks for when picking stocks and how he determines valuations. He also name-drops many stocks and industries that he thinks have fantastic potential over the next decade. (21:01) Finally, Tobias discusses the significance of hedge-fund shorts of the small-cap Russell 2000 Index peaking recently, plus the extreme concentration of the top 10 stocks. He notes that Nvidia now accounts for 8% of the S&P 500's market cap – the highest in history. Tobias says that valuations will eventually come back down to Earth and that not all of the Mag Seven will be top performers in the future. Citing Tesla as the weakest in the group, he points out that Chinese electric vehicles beat Tesla cars in terms of price, design, and charging times. Tobias then closes things out with a conversation about an "echo boom" of 2021, cryptocurrencies being back in favor, and the unprecedented outperformance of large caps. (37:31)

On this week's Stansberry Investor Hour, Dan and Corey welcome J.C. Parets to the show. J.C. is a Chartered Market Technician and editor of the Everybody's Wrong newsletter. He's also the founder of All Star Charts – a research platform for both professional and retail investors which tracks U.S. and international stocks, interest rates, commodities, and foreign exchange markets.  J.C. kicks things off by discussing the difference between market technicians and "chartists," the fact that valuations and fundamentals no longer drive stock prices, and the "big bullies" that trickle down to the individual stock level and move markets. He delves into the topic of positioning and finding parts of the market where folks are too bullish or too bearish. For example, J.C. points out that small caps are currently vulnerable for a squeeze. After that, he gives listeners the "cheat code" for analyzing the market, including what to look for, how to cut through the "noise machine" of financial media, how to spot changes in trends, and how to distinguish reality from narrative. (0:35) Next, J.C. walks through a hypothetical trade in the small-cap Russell 2000 Index to demonstrate his thought process and how exactly he finds opportunities. He highlights relative strength, waiting for a change in trend, weighing risk versus reward, not taking profits too early, and his unique position-sizing strategy. J.C. also emphasizes the importance of continually asking yourself how you could be wrong once you've formulated a thesis. As he says, if you can't answer the question and don't know how the market could prove your thesis wrong, "It's not an investment. It's a religion [based on belief alone]." This leads J.C. to talk about overcoming human emotion, having a plan before entering a trade, and taking advantage of all the emotional investors who don't have a plan. (19:48) Finally, J.C. throws out a few areas of the market he likes today and is following closely for opportunities, explains how he decides the right time to enter and add to a trade, and gives listeners solid advice for risk management. "If you're in a trade that's losing, you're going to be distracted, and you're going to miss the giant elephant that's walking right past you," J.C. quips. And he closes the show out with a conversation about investing discipline, including not entering risky trades even if you know they'll go up. (37:21)

On this week's Stansberry Investor Hour, Dan and Corey welcome Eugene Fama to the show. Eugene is a Nobel Prize-winning economist and widely recognized as the "father of modern finance." Eugene kicks things off by talking a bit about his efficient-market hypothesis, whether he believes it's still relevant in today's economy, and how passive investing plays a role in all this. He also discusses what it's like winning a Nobel Prize, the impact of his five-factor model on investing and the rise of factor-based funds, rationality versus irrationality, and the importance of luck in markets. (0:34) Next, Eugene argues against a New York Times article claiming that a PhD in economics won't bring affluence or prestige anymore, laments the lack of new breakthroughs in financial theory/modeling, and comments on the modern competitive environment in economics that didn't exist 60 years ago. Things then take a more personal turn, and Eugene talks about his how he discovered his love of economics and what he wanted to focus his research on. (16:28) Finally, Eugene shares what it was like in Chicago back when the city was the epicenter of financial research, including his experience working with some other notable economists. After that, he gives his opinion on market bubbles. Speaking about the dot-com era, he says that the total value created from the industry is a big part of international wealth today, so it can't be considered a mistake. And he closes things out with a conversation about uncertainty in making predictions. (30:34)

On this week's Stansberry Investor Hour, Dan and Corey welcome Dr. David "Doc" Eifrig back to the show. Doc is the new permanent CEO of Stansberry Research's parent company MarketWise, as well as the editor of five newsletters at Stansberry and a member of the Investment Committee for Stansberry Portfolio Solutions.  Doc kicks off the show by asking Dan about his recent river cruise vacation on the Mississippi River and sharing stories about his own trip to Lisbon, Portugal a few weeks ago. This leads to a conversation about Doc and Dan's first meeting in 2007 and how Dan was a "diligence check" for Doc joining Stansberry in the first place. Doc also talks about his permanent appointment as MarketWise CEO after almost a year holding the interim role. (0:46) Next, Doc discusses the financial-newsletter industry and what sets Stansberry apart in this era where anyone can self-publish content – including free content and AI-generated content. "I want us to be known as a trusted source," he notes. As Doc emphasizes, Stansberry is good at finding talented analysts who work hard, know their stuff, and can meet deadlines. He also looks back on the company since its "disaster" going public, previous leadership that didn't respect the company's history, and what has mattered most to him since becoming CEO. (23:57) Finally, Doc explains that caring about what you're doing and the experience you want to give is the most important thing in business. He gives shout-outs to several folks at MarketWise who are doing just this, from Stansberry's Executive Editor Carli Flippen overseeing everything that gets published, to the marketing team and copywriters who care about the customers more than making a sale. (45:32)

On this week's Stansberry Investor Hour, Dan and Corey welcome Joe Milam to the show. Joe is the founder and CEO of AngelSpan, which provides investor relations for early-stage startups. He's also the founder of The Legacy Funds and managing member of the Texas Legacy Fund. Joe kicks things off by recounting his background in finance and the "Forrest Gump-like experiences" that got him to where he is today. He critiques the venture-capital ("VC") world, as it requires no training or certification to enter. Joe explains that his mission is to bring professional standards and practices to early-stage VC. And he shares a few anecdotes of unprofessionalism in the VC world that you'll never hear reported by the media, including investing for access to a private jet. (0:47) Next, Joe discusses the massive opportunity in bringing professional processes to VC, especially because entrepreneurship is growing, yet the financial infrastructure has not been modernized to accommodate for this growth. He also talks about lack of diversification being a problem, the history of angel investing since the Revolutionary War, the role hype plays in VC, why he believes we're at the top of the "hype cycle" for AI, and the unintended consequences of technological innovation. (19:19) Finally, Joe points out that an understanding of financial history is directly linked to proper risk assessment and management. He notes that many folks will ignore risk even if they're warned about it, due to a lack of discipline and their fear of missing out on the next hottest thing. As Joe explains, there's an expanding pool of innovation and places to put money, so both VC and individual investors need to manage risk. (45:48)

On this week's Stansberry Investor Hour, Dan and Corey are joined by Nick Maggiulli. Nick is the chief operating officer of Ritholtz Wealth Management and founder of the financial blog Of Dollars and Data. His new book, The Wealth Ladder, comes out next week.  Nick kicks off the show by discussing The Wealth Ladder, including the six different levels of wealth and why income is a more crucial factor to building wealth than behavior. He also talks about jobs that will be a safe haven once artificial intelligence ("AI") becomes more prevalent, the mistakes people make when buying income-producing assets, the importance of diversification, and why he prefers to invest in index funds. (0:40) Next, Nick goes in depth on the spending mistakes people make that prevent them from moving up to a higher wealth level. He touches on diversification again, using Elon Musk versus Bill Gates as an example. Plus, he covers the different strategies for different wealth levels, why it's important to still focus on the nonfinancial things in life, statistical data for whether money can buy happiness, and the significance of money being a quantifiable thing. (17:27) Finally, Nick discusses the things that financially successful people may be overlooking, why the strategy for success may vary on a case-by-case basis, and the different levels of spending freedom. He says that level two allows freedom in the grocery store, level three allows freedom at restaurants, and level four allows freedom for traveling. And he shares a handy formula for people to use when it comes to nonessential spending. (35:15)

On this week's Stansberry Investor Hour, Dan and Corey welcome Rupal Bhansali back to the show. Rupal is the founder, CEO, chief investment officer, and portfolio manager of investment adviser Double Duty Money Management. She's also the author of the book Non-Consensus Investing and a leading figure in value investing, with more than three decades of experience. Rupal kicks off the show by discussing her investment philosophy, how she defines "winning" in the stock market, the main misconception about contrarian investing, and why it's more important to not lose money in the market than to earn money. She warns investors that they can still lose money when investing in a high-quality company. As she says, the key to value investing is low downside. Rupal uses the auto industry as an example of a low-quality, cyclical industry, but highlights the hidden opportunity in tires, which are a consumer staple and not cyclical. (0:38) Next, Rupal talks about getting the best of both worlds with growth and value investing. She notes that this is very difficult to do today with U.S. stocks but that there are many untapped opportunities abroad – especially in Latin America. Rupal then delves into the world of diversification, including why having uncorrelated investment ideas in your portfolio is so crucial. This leads to a conversation about knowing when to buy more shares when one of your stocks is down versus cutting your losses and selling completely. Rupal outlines three core reasons to sell a stock, regardless of whether a stop loss was hit or not. (16:15) Finally, Rupal gives her opinion on buying companies like Costco Wholesale that have very high multiples but keep trading higher. She says the reward isn't worth the risk, since there are 49 non-Costcos for every Costco, and trying to find the one winner is very difficult. Rupal reiterates that it's all about cutting your losses early, accepting that you'll get things wrong, and learning from your mistakes. She also covers the wider macro environment relating to President Donald Trump's tariffs, clarifying that she's "macro aware" rather than "macro driven." (29:48)