Why Gold Will Outperform Bitcoin in 2018

Why Gold Will Outperform Bitcoin in 2018

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Here are the hosts of your show, Buck Sexton and Porter Stansberry. Buck Sexton: Welcome everybody to the Stansberry
Investor Hour. First show of 2018. I am Buck Sexton, nationally syndicated radio host,
and with me our fearless leader, Mr. Porter Stansberry. Happy 2018, Porter. Porter Stansberry: Yeah. Happy new year, everybody.
Great to see ya. You guys look good. We’re here also with Country Club Guy. Don’t forget
him. He’s in the corner. Country Club Guy: Hey, folks. I’m here. Porter Stansberry: We just got back – I
took Country Club down to Two Suns. My boat in the Bahamas. We were in beautiful Chub
Cay. Did a lot of spear fishing this trip. I got a new personal best. Down about 40 feet.
Speared a nice trophy hog fish. I’m pretty excited about that. Got back a couple days
ago, getting back into the flow at work. And, Buck, you were just saying that you’re into
this new thing called Ripple. Buck Sexton: Oh, well, I want to get into
it actually. I have a Coinbase user now. I’ve decided to take the plunge and become somebody
who’s trying to pick the best cryptocurrency investment since we learned about all that
here. But Ripple isn’t on Coinbase, which is the app. The app that people use to buy
Ethereum, bitcoin, Bitcoin Cash, all that stuff. And Ripple is hopefully going to get
on that app soon, which I think will be a much easier way to buy, which means the price
might spike. Who knows? But anyway, Ripple is the next thing they are saying. That’s
the next really cool. That’s what the cool kids are buying these days. Porter Stansberry: Oh, OK. Buck Sexton: That’s what I’m told. Porter Stansberry: All right. Buck Sexton: My anarchist hacker friends. Porter Stansberry: Well, before I say anything
about crypto I just have to preference my statements with I think it’s a very important
evolution of capitalism. The idea of blockchain and distributed registries. And I think it’s
going to change the way people think about owning things. And I’m certain it’s going
to reform finance. Tremendously. Banks. Brokerage. Stock exchanges. They’re all going to be
completely disintermediated by this technology. So it’s very important. But I also, as excited as I am about the technology
and its uses and established businesses and things like property ownership and management
registry, I’m incredibly skeptical about the initial applications of basically, in
my opinion, it’s just as a poker chip. I like the purple chip. You like the red chip.
Oop. The green chip’s up today. It’s complete insanity. And I’m very skeptical that the
people who own 97% of the current tokens will be glad that they do. I think they’re going
to – I think folly is usually punished. And I expect that is what will happen. Now, having said that, Ripple could be the
one that ends up being not pets.com but instead priceline.com, using the Internet website
metaphor. But before you go further with your Ripple and your – Buck Sexton: Coinbase. Porter Stansberry: Coinbase and your Ethereum
and your wallets and your Bitaflex or whatever the next one’s going to be, I just want
you to realize that over the last three years the central bank of Switzerland has printed
almost a trillion dollars in new money and bought assets around the world. Doing so they
made a profit last year that was larger than any private corporation in the world, including
Apple. Buck Sexton: Hmm. Porter Stansberry: They have roughly 250 billion
dollars in U.S. equities, which they have acquired over the last three years. And they
acquired all these assets by printing new Swiss francs and using them to buy foreign
assets. Mostly European bonds, but also U.S. equities. Buck Sexton: Do they have a list of the holdings? Porter Stansberry: I just want to be clear,
they’re buying according to – yeah. I mean they own Facebook, and Apple, and all
this stuff, but it’s all done with they’re buying indexes. So they’re buying – most
indexes are market-cap weighted, which means they’re buying the most of the most expensive
stocks. What could possibly go wrong? That’s just one of the central banks – and it’s
actually the smallest. The Japanese have done the same thing. The Europeans have done the
same thing. The U.S. has done the same thing. Now the U.S. hasn’t bought equities, but,
you know, let’s not quibble over some facts. The point is, it’s not a coincidence that
during a period of time when an enormous almost unthinkable amount of new money is being created
out of thin are and being used to purchase financial assets, of all stripes, to the point
where even junk bonds have no yield, it is not a coincidence that at the exact same moment
people have bid up the value of a purple poker chip to $19,000. Something that has no – it
pays no coupon. Has no interest. Conveys no ownership. It is not a coincidence, my friends.
And if you have made a ton of money with bitcoin, you are luckier than me. But you’re not
smarter. And all folly will eventually be taxed. Buck Sexton: Now I’m kinda sad. I was all
excited about my Coinbase. It goes up. It goes down. Country Club Guy: The smile on your face is
gone. Buck Sexton: Yeah. I know, exactly. I think
I was up like 20% in Ethereum a few days ago. So that was fun. But. And then it goes down
20% the next day. Did any of you take a look at the book that got so much attention? I
think while you guys were out in the Bahamas fishing, about the Trump – Porter Stansberry: Fire and Fury. Buck Sexton: That’s right. Porter Stansberry: That’s right up your
alley. Buck Sexton: I’m about three or four chapters
in. Porter Stansberry: Now hold on. You’re telling
me that Donald Trump is a little crazy? Is that the point of the book? Buck Sexton: It’s – there’s a lot of
falsehood in there. There’s a lot of stuff that is not legit. He’s already said, if
it rings true, it is true. Which is probably the best definition of the media’s propensity
for fake news I’ve ever heard. Porter Stansberry: But hold on. You’re saying
that Steve Bannon isn’t a really reliable source? Buck Sexton: Well, if Steve Bannon is your
primary source, which I think is the case for the book, you’re going to have some
pretty wild stuff. It makes for great reading, but I think a lot if it is quasi, if not entirely
fictional. Porter Stansberry: I can’t tell you the
degree to which I have completely lost any interest whatsoever in American politics.
Zero interest whatsoever. I don’t care. The FBI is all a bunch of lying thugs. Hillary
Clinton is a freaking crook. Donald Trump is a maniac. I don’t have any interest in
any of it. I just want him to stay away from me. The only thing that’s happened that’s
good is that they cut my taxes, supposedly. Then, of course, I got a memo from my accountant
that said, yeah, no, there’s this thing called the alternative minimum tax and now
you hit that so you didn’t really gain anything. There’s a shocker. Everyone’s excited
about a bunch of nothing. Buck Sexton: What about the bonuses that they’re
giving out to all these different companies though? Porter Stansberry: Oh, yeah. A thousand dollars. Buck Sexton: Thousand dollar bonuses. Porter Stansberry: Yeah. Buck Sexton: Yeah? Hey. America is great again
now. You get a thousand-dollar bonus. Porter Stansberry: Thousands dollars. Yeah.
Wahoo. Buck Sexton: Isn’t the statistic something
like half the country would have trouble meeting a $500 emergency expense or something. So. Porter Stansberry: Yeah. Federal Reserve study.
It’s actually a $400 emergency. And it’s like 60% of the country. Buck Sexton: Yeah. So, you know for a lot
of the country, big P – Porter Stansberry: That’s a lot of – Buck Sexton: That’s money. Well, it’s
money. It helps. Porter Stansberry: Thousand dollars. Buck Sexton: Although when they pay their
Obamacare premiums, which that hasn’t gone away, the thousand dollars isn’t going to
go very far. Porter Stansberry: Well, Buck, what’s something
useful we can talk about? What about predictions for 2018? I’ve got a couple. Buck Sexton: Everything I read says that 2018
is going to be a really good year for the U.S. economy. Do you disagree? Porter Stansberry: Hmm. Buck Sexton: I haven’t seen anything, other
than the people who are just like, the sky is falling, all the time. Everybody else is
saying, yeah, 2018, the market somehow is still going to go higher. Things are still
going to go really well. There’s this notion that there are two Trump presidencies actually.
I was going to – I might be writing about this for American Consequences. There’s
the Trump presidency that’s Twitter fights and crazy Bannonite screeds and all that stuff.
And Trump saying things that people go, oh, my gosh. And then there’s what’s actually
happening. What the administration’s doing. The policies, the deregulation. Porter Stansberry: Yeah. Those are very powerful. Buck Sexton: And that stuff is good. Porter Stansberry: The tax cuts are very powerful
too. As is the ongoing massive inflation by the central banks. So yeah, it looks like
the economy is going to be very strong this year. And all of the indicators, particularly
the Dow Transports, suggest that you’re going to see economic growth for the year
in excess of 3%. Maybe in excess of 5%. And that hasn’t happened in eons. That hasn’t
happened since before Obama came to office. So I was going to give you my predictions
for the year – Buck Sexton: Yeah, I want. Let’s – yeah,
what are they? Porter Stansberry: First of all, my economic
prediction is that gold will outperform bitcoin this year. Because I think we’re going to
see a return to commodity inflation. That as that economic growth ramps up you can – it’s
a lot easier to print money than it is to increase the production of gold and oil and
natural gas and things like that. So you’re going to see that growth and demand, particularly
for factory orders. It’s going to spill over into much higher commodity prices. So
my two big bets for this year actually are the price of natural gas, which has been in
the doldrums for a very long time and is a key input to industrial production. So the
price of natural gas is going to go way, way higher. Over $10 an MCF. Nobody expects this
to happen. And my other prediction is that commodities
in general are going to continue their stealth bull market. They’ve been in a bull market
since 2016. No one’s noticed. The price of Freeport-McMoRan, for example, has gone
from $5 to 20. Nobody’s noticed. Glencore, major commodity trading firm has outperformed
Facebook last two years. Nobody’s noticed. That trend is going to break into the mainstream
and you’re going to see a rotation from technology into commodities. So when I say
commodities, I mean the complex broadly. So natural gas in particular and then the
entire commodity complex as a whole is going to do very well this year. And bitcoin will
be out – bitcoin will come in second place to gold. So those are my predictions. We’ll
see how I do. Buck Sexton: What do you think about the – and
this is from a novice investor, namely, me, gold stocks versus owning actual physical
gold? Like gold mining stocks. Porter Stansberry: They’re two totally different
things. So gold stocks are – it’s equity in a business. So you have to judge each business.
And you primarily judge those businesses by the quality of their assets. So what does
it cost them to product gold with those assets and how many reserves do they have in place
with those assets? And even more importantly, what’s the track record like of the management
team for acquiring assets? Do they tend to buy things when they’re cheap or do they
have a bad habit of buying things when they’re dear? Ninety percent of gold companies, maybe even
more than 90%of gold companies are run by complete morons. These guys are not the sharpest
tools in the drawers. And they have a very tough business. They are selling their assets.
That’s not necessarily making them any wealthier. If you think about that for a second, you’ve
got an asset over here that’s valued at 100. You sell it for 100. You haven’t done
anything. And think about how much capital you had to invest to get that asset of 100.
So gold mining is a very tough business. My number one rule for people who have never
owned a gold stock or don’t know anything about investing in gold companies is don’t.
Just don’t do it. There’s a lot of easier and better ways to make a living than trying
to be a gold-stock investor. Buck Sexton: So what should somebody do if
they agree with you that gold will outperform bitcoin? Buy gold? Like buy gold coins? Porter Stansberry: They should buy gold. Buy
gold coins. Yeah. I just got done buying a bunch for myself personally. I call my – my
favorite coin dealer is a guy named Van Simmons. I call Van Simmons up and I say, “Hey, what’s
the best value right now in coins?” And he’ll either put me into rare coins or he’ll put
into semi-rare coins. Seminomadic. Sometimes he’ll just put me into bullion if he thinks
that the premium on the rare coins is too high. I just buy coins. If you don’t want
to deal with buying physical coins, no problem. You’ve got GLD. You’ve got lots of ETF
alternatives. And if you’re going to buy a gold stock, make sure that you guy Franco-Nevada
first. Franco-Nevada is by far the best, well-run gold company. And the way they do it is the
only way that makes sense. They don’t own the gold mines, they own royalty rights to
the mine’s assets. So they’re just a tax on the industry. And that’s the way to be
a gold miner. Not by actually trying to own a mountain and get the ore out and separate
the gold. That’s a terrible business. Now having said all that, those are the two
things that I would recommend most people do is number one, own some physical gold,
and number two, if you’re going to buy a gold stock, and like I said, you don’t have
to, make sure you own Franco-Nevada first. But the fun thing about gold stocks and the
real reason why you should own this is cause sometimes they go crazy. Sometimes they’re
the new version of Ripple. They’re the new version of Ether. So with cryptocurrency what
you’re seeing is a lot of the speculative demand that would have gone into junior gold
stocks previously and the previous speculative cycles, are now going into crypto because
that’s what’s new and hot and interesting to people. And they’re basically worth the
same thing. Nothing. All right. So most of these junior miners are worth absolutely
nothing and most of these cryptos are worth absolutely nothing. But what you’re doing
is you’re trying to chase where the speculation will be next. And so the junior miners haven’t
really had a big run in a while. The last big run we saw from junior miners was in mid-2016
at the start of the stealth commodity bull market. I don’t know that they’re going
to get hot again. Because of all the speculation that’s gone into crypto. I’m not saying
that they won’t. I just it’s not – this is not like previous cycles. So if you’re
looking for that opportunity to make five times your money or ten times your money,
you’re not going to find it at Franco-Nevada. You’re not going to find it in gold bullion.
But you might find it in the right junior miner. The one I like the best is called NovaGold.
It owns a really high-quality asset. And with the right kind of gold price and the right
administration in place it could be developed. And more importantly, it could be sold to
a major at a price that’s four or five times more than the current share price. So it’s
one of those brass ring bets. And, of course, if it doesn’t get developed it’s worth
nothing. So there you – I mean I wouldn’t have much in that, just like I wouldn’t
have much in Ripple. But I expect Franco-Nevada will do well this year. It’ll return 15%
or 20% to equity owners, which is a fantastic return. People forget that’s actually really
good money. And I think you’ll see other major commodity businesses do very well. You could see huge returns though in the domestic
energy space. Huge returns. Natural gas producers could go up big time. A company like Chesapeake,
which is right now on the verge of bankruptcy could go up four or five times if the price
of natural gas were to go to $10. So there’s all kinds of ways of making good returns this
year with faster economic growth. Buck Sexton: Can that happen for natural gas
and for gold even if the rest of the economy is doing well in your estimation? So meaning,
you know usually people think of gold – gold goes up when everything else is crappy. Can
that happen even if you – we have big growth and – Porter Stansberry: Well, to tell you the truth,
real reason why gold does well when the economy does crappy is because gold is fundamentally
related to the real rate of interest in the country. And I don’t want to bore you to
death with economics, but think about this. Between 2004 and mid 2008 gold went crazy.
And it went crazy because interest rates were relatively low and economic growth is relatively
high. So the real natural rate of interest should be the rate of economic growth plus
the rate of inflation. So what’s the rate of inflation now in our economy? Buck Sexton: Very, very low. They say it’s
like – Porter Stansberry: Very low. Buck Sexton: – less than 1%, right? Porter Stansberry: Well, it’s actually it’s
been creeping up. So let’s say it’s 2%. Just to use a number. I’m not trying to
argue with you about it. By the way, please don’t call in and say all the statistics
are false and blah, blah, blah, blah, blah. I know that inflation generally is poorly
measured and I know that your cost of living has gone up more than 2%. I get that. But
we’re just talking about ballpark numbers here. Not trying to re – Buck Sexton: For the purposes of conversation. Porter Stansberry: Right. We’re not trying
to rebuild the wheel. So for the purpose of conversation it’s likely that this year
U.S. consumer CPI will be something around 2%. OK. So right now the ten year yield – where
is the ten year paper at Country Club Guy? Like 2.4%? Country Club Guy: You don’t need me to confirm
your numbers. You got a big melon on ya. Porter Stansberry: OK. So let’s say it’s
about 2.4%. OK. So if you look at inflation plus economic growth of 2% and inflation at
2% , that’s 4%, right. And you’ve got ten-year yield at two. So you’ve got negative
real interest rates. And as you know, we’ve had this condition for a long time. Ever since
’08 we’ve had negative real interest rates. But we haven’t had much growth or much inflation
it’s been, both have been very subdued. So growth plus inflation has really never
been above 2.5% ever since 2008. So we’ve had negative interest rates but they’ve
been very, very small. Now what happens if you get economic growth
in the United States this year of 5%? And you get inflation of two. Now you’re talking
about economic growth plus inflation of 7%. And you’ve got the ten-year yield at 2.4.
Now you’ve got very significant amounts of negative interest rates. In that environment
gold will go bananas. Because like bitcoin, gold is a reliable currency that cannot be
inflated. And of course, gold has a lot more tradition than bitcoin does. And, oh, by the
way, it’s tangible. So if your computer power goes out you’ve still got your gold. Buck Sexton: The EMP attack from North Korea
could eliminate all of our bitcoin. Which would be sad. Porter Stansberry: Lots of things could eliminate
all your bitcoin. Buck Sexton: Some of these exchanges have
done, by the way, which is pretty scary when you think about it. It’d be like a bank
that all of a sudden is like, oh, the bank’s not there anymore. Porter Stansberry: Yeah. So what I’m trying
to tell ya is gold can do well when the economy is strong or gold can do well when the economy
is weak. But what really matters is whether or not interest rates, real interest rates
are there or whether they’re negative. And that’s what completely drives the price
of gold. So that’s why I suspect if, if these tax cuts and this deregulation works,
as I think it will, and if, as I think it will, the economy grows much stronger than
people expect, you’re going to see a big uptick in commodity prices and in inflation,
inflationary pressure and the resulting spikes and gold, oil, copper, that kinda stuff. There is, of course, one risk to the forecast.
And that is very hard to predict but if there is any kind of an exogenous shock that was
related to the credit cycle, you could see that whole production fall apart very, very
quickly. So we need to avoid a big banking crisis relating to auto loans, student loans.
You know those are big weaknesses that are out there that are still hiding. And they
haven’t really raised their heads yet. And maybe they won’t in 2018. But that’s – eventually,
eventually this cycle is going to lead to a recession and it’ll happen because higher
interest rates will lead to much higher default rates and eventually that credit cycle will
turn. But it probably won’t happen in 2018 or probably won’t happen until 2019. All right. Well, listen, Buck, I can blabber
on about economic forecasts all day, but the good news is it does look like our economy’s
going to be stronger this year. And I think that should make it possible for investors
to do pretty well in 2018. But speaking of doing well, why don’t we bring in our guest
for this week, Garrett Gunderson. He’s the head of this thing called the Wealth Factory. [Music] Buck Sexton: Garrett Gunderson is founder
and chief wealth architect of the Wealth Factory whose mission is to manufacture economic independence
for one million people. He’s also The New York Times bestselling author of Killing Sacred
Cows: Overcoming the Financial Myths that are Destroying Prosperity and What Would the
Rockefellers Do?: How the Wealthy Get and Stay that Way and How You Can Too. Garrett
has personally helped countless business owners create efficient wealth strategies that fit
their unique strengths. The Wealth Factory is a comprehensive personal-finance-education
and implementation program for entrepreneurs, health care professionals and small-business
owners. Garrett helps clients manage their personal finances by providing an integrated
team approach similar to those provided by boutique family-service firms for high-net-worth
individuals. Garrett was also a featured guest speaker at the 2017 Stansberry conference
in Las Vegas where he spoke in front of over 700 Stansberry readers. Please welcome to
the Stansberry Investor Hour, Garrett Gunderson. Porter Stansberry: Garrett, you have an unusual
mission at the Wealth Factory. You are striving to provide economic independence for one million
people. How do you track that goal? Garrett Gunderson: Yeah. By the way, we’re
a ways off on that damn thing. But the way that we’re tracking it is, we’re consistently
surveying the people that have opted in to our weekly publications, our video series,
and the easiest way we track is when people work with us either in our hybrid program,
which has some one on one, or our completely one-on-one program where we’re getting people
economically independent. Some are between there and seven years in that. So I’ve got
to find a way to reach more of the masses cause it’s a little bit slow, but I’ve
started a license to other financial people and just in the last year we tripled the number
of people that we got to economic independence over the year before. So I feel like there’s
a shot even though it’s a hell of a shot that we’re working towards. Porter Stansberry: You know it compounds over
time. And what I have found is teaching economic literacy is the very best thing you can do
for people. And it’s also a great business because, you know we have probably, I don’t
know, something around 100,000 alliance members now. And these are folks who stay with us
year after year. You know you came to the Alliance Conference. You met a lot of these
people. Garrett Gunderson: Yes. Porter Stansberry: And there’s a lot of
loyalty when they’ve learned something valuable for us that’s actually improved their lives.
I’m sure you have the same thing with your clients. It’s a great business to be in.
Tell me about – you’ve written a couple of books. And I gotta tell ya, I’m a newsletter
writer and I write, you know – I probably publish something on the order of 25- to 50,000
words a week. So I do a lot of writing. But writing books is a lot tougher than writing
short-form things like I do. What’s your process? And by the way, folks, I want to
let you know he has two great books that I really do recommend – Killing Sacred Cows:
Overcoming the Financial Myths that are Destroying Prosperity. And then the second one, which
is my favorite is, What Would the Rockefellers Do?: How the Wealthy Get and Stay that Way
and How You Can Too. So what’s your process, Garrett? How do
you get those books done? I could never find a way to do that. Garrett Gunderson: OK. So it evolved. With
Killing Sacred Cows, candidly I didn’t consider myself a writer. I considered myself a speaker.
So I had this student named Stephen Palmer had been to so many of our things, and I had
spent two years and only gotten 72 pages done of that book because I just – I struggle
with just blank paper. And so I approached him and I said, what would it look like for
you to support me in writing this? Maybe hire you as a ghostwriter. He said, I’d love
to. So I would speak it, he would write it. And
we wrote the first version of it in self-published format. And then a publisher picked us up
and they said, hey, you wrote this book to one type of reader. Someone that’s more
methodical and it just seems kind of harsh. Like you just dive into things without enough
context. So would you be willing to kinda rewrite it to appeal to four types of readers?
And that’s where I actually started to – I just sat down and I could write because there
were already words on the paper and just rearrange and then add some additional things. Now when I wrote, What Would the Rockefellers
Do?, what I would do is I would come up with the concept, get on a webinar, flesh the concept
out, open up to Q&A to see where it was landing, what people understood, what they didn’t
understand. Then I would write new outlines. Then I would take in with my co-author. Talk
through the concepts, transcribe it. And then I would actually just rewrite it. So I wrote
What Would the Rockefellers Do? a lot more, even though we hired this guy Michael Levin
from Business Ghost to massage it and to get some of the concepts out even further. But
you’ll notice between the two, What Would the Rockefellers Do?, my co-author of Killing
Sacred Cows said, “I love that book, it’s just not as well written.” Yeah, it’s not.
It’s just written how I would talk a lot more. Where Killing Sacred Cows he’s a little
bit more elaborate about things. So my process has evolved quite a bit from
the first book. And I have a book coming out March 2018. We got six or I’m sorry, 35,000
books in bookstores out the gate called 5 Day Weekend. So I’m stoked about that. And
that one was a collaborative process that once again was a ton of rewriting. Porter Stansberry: So hearing you describe
that intricate process it’s now very clear to me why I am not a very good book writer.
That sounds like a giant pain in the ass. And I know it is. Tell me, it’s apparent
to me, and I want to get into the topics behind these books, it’s apparent to me what the
first two books were about. But what’s a 5 Day Weekend about? That sounds like something
I would really be interested in reading. Garrett Gunderson: Well, I feel like we’ve
been trained, taught and educated on the industrial age. Where people worked in assembly lines.
And you worked five grueling days and then you took two days off. And most people just
had a budgetary mindset. Scrimp, save, sacrifice. No one was in the information age or taught
to be an investor. They just handed their money over for 30 years and relied on retirement
plans to get them there. And we’ve watched that that’s been a completely failed financial
experiment. 5 Day Weekend is build your financial infrastructure
in a couple of ways. Number one, find ways to keep more of the dollars you make. That’s
the first part of the book. So are you overpaying taxes? Most people are. Are you overpaying
on interest? A ton of people are. Are you overpaying on nonperforming investment fees?
Definitely for a lot of people that are just passive investors. And then insurance costs.
A lot of duplicate coverages and costs. Then the second thing is, one of the best
things you could do for your finances is make more money. So we actually emphasize ways
for them to make more money and the idea of being more entrepreneurial even if they’re
an employee. And then the third section is very aligned with Stansberry which is to learn
to grow your money. Become a better investor. Because when I was at Stansberry at the Alliance,
there were people that when they talked about when they started with you to what they have
now, it was astronomical returns. And I love those conversations. Because they chose to
take responsibility, get educated and not just hand their money over to product peddling
so-called financial planners that are more commission-based retirement planners. And then the fourth piece is grow yourself.
Which is really getting people to think about investing back into theirself. I’m from
a coal-mining town. When you work really hard and you have a bad investment or financial
philosophy, you still end up bankrupt or at best middle class. So the book is meant a
little bit more for the masses maybe than What Would the Rockefellers Do? or Killing
Sacred Cows. But it’s create a financial structure where you have recurring revenue
to cover all your expenses. And then every dollar you earn actively from there can be
reinvested to grow or to take five days to choose to be more productive and creative
if you want to write books or, you know travel a little bit so you’re not just in the grind
all the time. Porter Stansberry: I think about the thing
that you’re talking about, coming from a coal-mining town, how hard you work has very
little impact on whether or not you become wealthy. I think whether you become wealthy
mostly, and I know you’ve written a lot about this and I want to get to it, but it
mostly, of course, is about the decisions you make in terms of are you always earning
more than you’re spending and how are you investing it. That’s obviously the first
step in the ladder, in the rung of the ladder. But I think about my own career. I love journalism.
I love writing. I love storytelling. Even in high school I published an underground
newspaper. Garrett Gunderson: Love it. Porter Stansberry: In college, I was a ghostwriter.
I hired myself out to students with lower morals and wrote papers for them. And then,
of course, I kept doing that as a professional. What’s interesting is, imagine if I had
gotten a premier job to go work at a great local regional newspaper like, I’m from
Orlando. Imagine if I’d gotten to be a lead business writer at The Orlando Sentinel. Where
would I be today? I could have done just as much great work and it wouldn’t have made
any difference. I would be out of a job and I’d be broke because the newspaper model
was broken. In my lifetime. Garrett Gunderson: Totally. Porter Stansberry: Meanwhile, of course, I
didn’t do that for lots of different reasons. I ended up in a space that has boomed. You
know people looking for online independent investment research has grown tremendously.
And Stansberry Research has been a part of that success. Again, it really has nothing to do with how
hard I was working to serve my clients. It was more about that I was in the right business
at the right time while it was growing. And I think if people were really honest with
themselves and they looked at how they spend their time, especially if they are a salaried
employee, really? Is your company really likely to grow by three or fourfold in the next five
or six years? Then how are you likely to become wealthy? The answer is you’re probably working
in the wrong space for the wrong company. But of course, as you know, it’s very hard
to get people to change. When you coach people how do you get over those internal emotional
hurdles? Garrett Gunderson: I think that it helps that
I tell a little bit my background and story cause my great grandfather left San Giovani,
Italy in 1913. And interestingly he left because there was a massive tax. And there was mob
tax cause it wasn’t far from Sicily. And they were kinda – he had a little fishing
business and when his wife got pregnant he’s like, “I don’t know if I’m going to be
able to make ends meet.” So he comes over to America. Ironically the same year the U.S.
Revenue Act comes up. So now the income tax is born and he gets taxed here. But at a much
lower level back in those days. My family. When I went to graduate from college, I got
offers from Anderson, which no longer exists thanks to, you know Enron and bad practices.
Merrill Lynch. We don’t hear about them anymore. Strong Investments. They were the
number two investment company when I was graduating. They’re gone now. And my family saw that
was the risk-free scenario because they thought about my great grandfather and all sacrifice
that he had and they had built this Depression-era mentality. So I talk about this bold decision of being
able to – I became an entrepreneur even though I was scared to do it. I didn’t have
a precedent with my family to do it. So we lead with that. But then the second thing
is all the evidence points to the contrary of those old antiquated beliefs. That if you
get a good job and work hard that you’re going to be OK in the future. The only – and
91% of people worth $5 million or more own a business. So I think the biggest thing is
that because we’re a support network for them that’s helpful. Cause now they can
socialize and see other people that are having similar thoughts, where most of their family
has the opposite thoughts of feeling like safety and security is who you work for rather
than investing in yourself. And so I feel like it’s not just the conversations we
have, it’s the culture and the indoctrination when we’re bringing them to our workshops
and the people that they’re talking to. So it’s a myriad of things. But the most important
thing is they’ve got to recognize that scarcity, fear based decisions always destroy wealth
unless they get lucky. And there’s not many that get lucky in that. So why not gamble
on yourself? Porter Stansberry: I don’t think it’s really
that much of a gamble. Especially in today’s economy. You know, Garrett, that sounded very
much like one of the sacred cows that you’ve written about. What are a couple of the other
of the big ideas in that first book of yours that you’d most want to share with our listeners? Garrett Gunderson: Yeah that is, you know
that first one, the infinite pie is one of the biggest culprits of destroying wealth,
because people don’t realize exchange creates wealth. And even if there’s a finite amount
of money, there’s an infinite number of times it can exchange hands. And the more
it exchanges hands the more wealthy we become as a society. So it’s not a zero-sum game
and it’s not, you know, a win/lose type of situation. It’s actually we advance because
when you’re writing the newsletters you’re writing and people get that information, there’s
a lot of people getting the information, but there’s still more wealth because of it.
Not that one person has it and no one else can have it. So that’s the one we’ve kind
of covered. The next ones are that high risk equals high
return. That’s a myth. Because if risk equals return – Porter Stansberry: Oh, that’s – I mean
that’s my mantra. Garrett Gunderson: Yeah. Porter Stansberry: It drives me crazy. How
much risk my subscribers are willing to take. And it’s absolutely the wrong way to go. Garrett Gunderson: Yeah. I loved the TradeStops
that you had at the Alliance event. Like I thought that was brilliant. I loved that everyone
that went to that event lowered their risk because now they have more knowledge. They
become a better investor. Risk isn’t in the investment, it’s in the investor. If
people learn their investor DNA and like narrow it in and focus and really develop that. I
look at risk coming from further chains of value. Meaning the more links or chains away
you are from understanding the outcome of an investment, the more risk you take. The
more risk you take, the higher the chance of loss. So by being better informed, by becoming
a better investor, that’s the key. Cause if there were truly one magic product we’d
all own it. You wouldn’t need to know anything. You and I would be kind of out of a job of
what we’re doing now and we’d have to do something different. But the fact of the
matter is, it’s really about the investor. So this “high risk equals high return” – I
think it was a bunch of drunk-ass people on Wall Street saying, “How are we going to sell
this pile of crap investment? I got it. Let’s tell them ‘high risk equals high return,'”
and somehow that permeated enough minds. But I think it’s more of a middle-class mindset.
So I feel like the same thing happens and they transfer and translate that because they
saw someone on the cover of a magazine that invested in a startup, but that person probably
knew the people involved or was involved in that industry or, you know they’re a better
investor in there. So everybody else goes, oh, I need to go invest in that. And they
know nothing about it. Then they get wiped out. Because the 999 people it didn’t work
out for didn’t get on the cover of the magazine and it created a false hope or a false kind
of philosophy. Porter Stansberry: And what about the Rockefeller
ideas? You know one of the things I try to teach people again and again with our materials
is you can’t – you’re not going to do very well in the market if you go into the
market needing the money. You do very well in the market if you will be patient and have
patient capital. And the legendary Richard Russel wrote a great essay 50 years ago about
the differences between rich investors and poor investors. And that’s probably the
hardest thing I do from an education standpoint is teaching people, look you’re way better
off in a stock like McDonald’s or Hershey where you can make a consistent 10% to 14%
a year. Which is an incredible return. With almost no volatility. So you’re not going
to get scared out of your position. You’re not going to sell your stock in a panic. And
if you invest into that kind of return wisely over 20 years, you’re going to end up very,
very, very well off. But of course everyone says, “No, I want to
buy bitcoin. I want to make 21 times my money in 12 months.” And it’s true that every
now and again there will be a blue moon and that happens. But you can’t plan for that
– you can’t depend on that. And it’s very unlikely to happen if you need it to. So what
would you say the keys of your Rockefeller strategies are? How do the wealthy get and
stays that way? Garrett Gunderson: Well, I feel like there’s
three family dynamics that they’ve really tapped into. And the first one is exactly
what you talked about. See, what the wealthy have is a family office. So family office
concept of having true due diligence: They have, you know, investment advisors that aren’t
just selling them some product or stock but actually analyzing what’s going on. They
have fiduciaries and they have accounting professionals and they have this entire financial
team that’s there to help preserve, protect, and perpetuate the wealth and really keep
all the financial predators out. And all of the greed gland at bay when all the sudden
there’s something like right now, when everybody’s getting overly fired up about bitcoin – yet
if they would have listened a long time ago to some of the things you’ve been writing
about they would have been in at a much better time. So like that family office helps protect
us from ourselves because the higher the emotion around investing the lower the financial IQ.
And that family office is truly a protective measure where everybody works together and
where there’s gains that are gotten simply because there’s good tax strategy and that
immediately adds money to their pocket. Or they protect the downside. Or they get them
– you know like that’s the first family piece for the Rockefellers. The second family is that they created a family
constitution. So the family constitution is more dynamic than just having the money distributed
at certain ages when the kids hit a certain level. And now it says, “OK, here’s our
distilled philosophies and our core values and how we want this trust run,” not in legalese
and in attorneys but like the family wrote that. That’s the most important book. And then the third family is retreats. Like
spending time and actually getting to know and helping to cultivate the abilities, the
skills, and teaching the lessons and talking about money to the families. But you’re
right, they didn’t become that way because they got lucky buying a stock or a once in
a lifetime crypto thing early on. They did it because they had a good team and they were
good investors. So – but a lot of these other people, like the Vanderbilts who had
amazing amounts of money, more than the U.S. Treasury at one time, well, the problem there
is they didn’t have a family office. They weren’t concerned with family retreats.
They weren’t concerned with a family constitution. And the kids just inherited money and went
and bought mansions and blew it and it was all gone. You know. They didn’t even think
about investing after Cornelius died. Porter Stansberry: It is amazing how much
wealth the Vanderbilts squandered. That’s a great – Garrett Gunderson: That is one of the greatest
feats in the world I think – Porter Stansberry: Yeah. It is. Garrett Gunderson: – squander that much money. Porter Stansberry: Yeah. There was a – I
read a great book recently about the same idea. Clark County, Nevada, you know where
Las Vegas is, Clark was a person. And he bought that county to be a coal and refueling station
for his locomotives that were taking copper from his mines in Idaho and Montana all the
way down to the port in LA for shipping around the world. And Clark at one time was the wealthiest
man in the United States. He built the largest and most expensive home in New York City in
the early 1900s and it had an entire room made of gold. Garrett Gunderson: Damn. Porter Stansberry: And his wealth was, of
course, squandered as well by his daughter who lived until – I think she died in 2011.
And the book is called Empty Mansions. And it’s the story of how she wasted all of
his money buying houses that she never even saw. Garrett Gunderson: Wow. Porter Stansberry: So people with wealth do
crazy things, especially when they provide too much wealth for their children and they
don’t allow their children the challenge of making their own way in the world. Which
is a whole topic we can do another podcast on. Garrett Gunderson: Totally. Porter Stansberry: But, listen, I want to
wrap this up with just a quick summary point. If you were a listener and you’re, let’s
say, in your early 20s, maybe in your early 30s and you really don’t have any savings
to speak of yet, but you’re getting serious about wanting to become wealthy, what are
the first, the very first one, two and three things that you should do to get on the path
to economic and financial independence? Garrett Gunderson: So when I was 19 years
old I had saved up money from my first business but I didn’t have a lot of it. And I took
some of that money and I put some money on a credit card and I invested in a program
– it’s called Lifetime Economics Acceleration Program. It was actually very heavy on the
insurance side. But they talked about economics. And I met a financial guy there that was renowned
and I just said, “Hey, I’m going to be 20 next year. What’s the advice you would give
me?” He said, “Look, when you meet people that are really intelligent and you see that
they’ve succeeded and they tell you about ways to invest that you’ll be learning and
not just allocating, but actually help you become a better investor – whether that’s
a software, whether that’s a newsletter, whether that’s a study club, whether that’s
an event, he said, do it. It’s going to pay dividends for the rest of your life.” And so that was transformative for me. So
rather than just, you know, buying toys and buying all the stuff that everybody else my
age, I just started to invest that way. And that really changed the trajectory of my life
because I found out that I could write a check and get to many relationships that I thought
were unreachable because I read their book. The second thing is when I would read someone’s
book, I would actually reach out to them. Because I’m the – now that I’ve written
a few books I find myself this way. When people give me a good synopsis of my book and talk
about the lessons that they learned and I could tell they truly read it, I pretty much
carved time out for them wherever they live or whoever they are. And so I actually really
believe that they should reach out to high quality relationships. Especially if they’re
young. Cause I find people that are older and have had a high level of success are willing
to kinda pay it forward and contribute back to really young people. And not necessarily
charge huge amounts of money. And so whether you have the resources or not, you can be
more resourceful and offer services or true value or find ways to contribute. And don’t
think about getting access to these individual’s money. Think about getting access to these
individual’s insights. Their brain. Their lessons. Cause I’ve found the most expensive
lessons are the ones I learned myself rather than learning from someone else. And those
are the most expensive tuitions that confiscated massive amounts of money and even created
stress. So that would be the next piece. And then the third piece would be get truly
serious about learning about money. Because no skill set will overcome a lack of understanding
around money and finance. You watch these really famous people that are really amazing
at what they do that have had, you know tens of millions slip through their hands, maybe
even hundreds of millions, because they never master their money. That’s a game that we
can’t avoid if you’re going to live in society and utilize and exchange money. So
that’s for the really kinda people just starting out. That would be my advice. You
invest in yourself. You do it always. School isn’t a substitute, it’s just a piece
of it. You really need to continue to have a lifelong learning kind of concept. You spend
time with the highest quality people. Look to contribute to them. And build up what I
would call relationship capital. But be willing to ask for support and know exactly what it
is you’re looking for. And then that third piece is definitely invest
in learning about the money world. Like when I met people that have been working with you
guys for a long time, I just – I see the result. I mean why? They learned about money.
And it’s just people that don’t learn about it, they usually live pretty tough lives
eventually. It catches up to them. Porter Stansberry: It sure does. Well, Garrett,
listen, appreciate having you and urge everybody to check out the Wealth Factory. And also,
if you want, I would recommend both the books, Killing Scared Cows and What Would the Rockefellers
Do? Thanks again, Garrett. Look forward to seeing you soon. Garrett Gunderson: Thanks. I really appreciate
it. [Music] Buck Sexton: All right. Interesting stuff
there from Mr. Gunderson. We haven’t had a chance to look at the mailbag for a little
bit. Porter and Country Club Guy were down in the Caribbean doing the whole fishing thing.
I was in the Caribbean doing the lie on the beach and – by the way, after a few Pina
coladas you realize you really don’t want to drink these things that are just – it’s
too much sugar. Porter Stansberry: Oh, they’re – Buck Sexton: It’s gross. Yeah. I mean you’re
on vacation. There’s this peer pressure. But I had a couple – Country Club Guy: It’s going to be the same
thing as a pain killer. How many did we have down there? Porter Stansberry: Too many. Country Club Guy: Yes. Buck Sexton: Yeah. Porter Stansberry: Pain killer. Country Club Guy: At one point Porter asked
the bartender just to pour the rum in it and just keep going – Porter Stansberry: Right. Well that’s my
thing. You just make it – then we went to the boat and we’re making them ourselves.
We bought three bottles of rum. There wasn’t much left. Buck Sexton: But after a while it was like
I just want – I’ll drink tequila on the rocks. I don’t want any more – I don’t
want umbrellas and fruit and – Porter Stansberry: A little tequila. A little
lime. Buck Sexton: Yeah. Exactly. That’s all I
want. Porter Stansberry: Maybe some salt. That’s
all. Buck Sexton: Because your body after a couple
days of drinking like, you know this – I had a – I’m not going to lie to you. I
had a grasshopper just because I was like, what is that going to taste like. It literally
tastes like somebody poured a tiny bit of vodka in melted mint chocolate chip ice cream.
Have you ever had a grasshopper? Country Club Guy: I can’t – Porter Stansberry: Is that a drink? Buck Sexton: Yeah. [Cross Talk] It’s like green. It’s like crème de menthe. Porter Stansberry: Yeah. Buck Sexton: I’m losing man points very
quickly here. Porter Stansberry: I didn’t know that Buck
was a teenage girl. Buck Sexton: Molly wanted to try it. All right. Porter Stansberry: Well, Captain Steve had
a white Russian one day. Country Club Guy: It was one of those guys,
you know lay day we have the drinks and there’s, you know the weather – Porter Stansberry: The wind was blowing 40
knots. We couldn’t go anywhere. Country Club Guy: Pain killer, pain killer,
beer, beer, beer, look over and this burly captain, white Russian. Porter Stansberry: Yeah. It was pretty funny. Buck Sexton: I think if it’s a warm enough
climate you get kind of a pass on the slightly more – Porter Stansberry: Nah. Buck Sexton: – sorority sister drinks. No? Porter Stansberry: No. Buck Sexton: OK. Porter Stansberry: I’m like, “Do you want
an umbrella for that, captain?” So you went to Jamaica, didn’t you? Buck Sexton: Aruba. Porter Stansberry: Sorry. You went to Aruba.
Aruba. Buck Sexton: Aruba. Yeah. Porter Stansberry: And I was commenting before
break that that was an odd choice for someone like me who’s genetically engineered for
an Irish peat bog. And you don’t even look like you’ve been outside in weeks. Buck Sexton: Oh, I was under an umbrella the
entire time. Porter Stansberry: But you must have also
slathered up. Buck Sexton: Oh, yeah, 50. Fifty-plus everywhere.
I don’t mess around. I actually had one day where for some reason I had like my knee
area exposed. I swear, for a total of 15 minutes. I was walking in pain for two days. Like I
just can’t handle the sun. Porter Stansberry: Why go to Aruba then? Buck Sexton: Because it’s 85 degrees. The
beach is beautiful and perfect. I can get out there and swim a little bit and stuff.
But I just lie down and read. It’s warm. You can get a nice breeze. Aruba’s very
developed though I’ll say. I know you guys are used to – Porter Stansberry: You gotta try Rancho Santana. Buck Sexton: It sounds amazing. Porter Stansberry: Our place in Nicaragua.
It’s a little more adventurous. Buck Sexton: Yeah. Next time around. Country Club Guy: He has the invite. We have
an event coming up in February and Buck’s scheduling of his radio is not allowing him
to come down. Porter Stansberry: That’s a problem in retail.
Can’t get away. Buck Sexton: It is tough. Especially when
you’re the host and anyone else is the host then all of a sudden you’re not there for
your job. It makes me sad. Mailbag. Porter Stansberry: Mailbag. Buck Sexton: Mailbag. Thanks again to everyone
for writing in to the mailbag these past few weeks. We got folks like Gary, Samuel B.,
Jay Pepper. Brian N. T.K. and Katherine M., just to name a few. I had an ex-girlfriend
with those initials. Little scary. We took a break from the mailbag over the holidays. Porter Stansberry: Oh, speaking of ex-girlfriends.
Sorry, I gotta back up. Buck Sexton: Uh oh. Porter Stansberry: Didn’t you get a call
from the president’s daughter recently, Buck? Buck Sexton: That may have happened. She was
just a friend. I can’t pretend that she was an ex-girlfriend. Porter Stansberry: That’s pretty cool – you
get a call from the White House. Buck Sexton: They were at Camp David for the
weekend and I went on Fox, and I was laying the smackdown on some FBI stuff, what we had
talked about earlier in the show. And I got a call. Ivanka has my number. She called and
she just said, “My dad saw you and thought you were great,” and she wanted to say hi
and Merry Christmas. It was very nice. Porter Stansberry: That’s very nice. Buck Sexton: Yeah. So I’m pro-Ivanka and pro-Jared.
Despite what Bannon may or may not have said. Porter Stansberry: And did you get a chance
to talk to Arianna over the holidays? Buck Sexton: [Imitating Arianna Huffington’s
voice]. No, ’cause she was building – well, sending people paid very little to build houses
for other people with also very little, but doing lots of selfies. She missed it so much.
She said, “Porter, are you stretching? Are you staying gluten-free and paleo? You look
like you’ve been drinking rum every day, Porter. Every day.” Porter Stansberry: [Laughs]. Buck Sexton: “Makes me sad.” Porter Stansberry: Well, I did for a couple
days, Arianna. But I’m back on the straight and narrow now. Buck Sexton: We gotta get her on the podcast,
by the way. Porter Stansberry: [Laughs]. Buck Sexton: We should at least like actually
get the real Arianna to come join us. [Imitating Arianna Huffington’s voice]. Brutish mansplaining. Porter Stansberry: Oh, man. That was fantastic.
Totally unscripted. The whole thing about building houses [laughing] with people with
very little, for other people with very little [laughing]. That’s classic [laughs]. I’m totally
losing it [laughs]. So she wasn’t down in Aruba. Buck Sexton: No. I didn’t see her down there. Porter Stansberry: She was in Haiti or something. Buck Sexton: Yeah. Somewhere else. She sent
her staff to go hire some staff and do something for her. So she was – Porter Stansberry: She was out there saving
the world. Buck Sexton: Yeah. Virtual signaling via others.
All right. Our first one in – and, by the way, if you want to write to us, [email protected]
This one from Gary D. “Greetings, guys. First off, thanks so much for all you do to provide
your loyal listeners and readers with your combined knowledge. I appreciate and respect
your passion for teaching us to prepare. Porter, I’ve been familiar with your name for many
years but only vaguely familiar with your message. It was the debt jubilee book which
I purchased and is changing my way of thinking. I’ve been subscribing to the podcast, and
what a treat. Thanks for that. And I will continue to subscribe. I will even seriously
consider subscriptions to some of your services, and I appreciate the free month in advisory. “I’m trying like hell to understand your concept
of capital efficiency. How do I read the available data on the performance of a company and determine
whether they are capital efficient? And why do you like Hershey, for instance? Their long-term
debt to equity is over 275% and total debt to equity is almost 370%. Seems to me this
indicates a huge exposure to a Jubilee-related catastrophe. But then again, maybe I am misunderstanding.
Thanks again for your exceptional work. I appreciate it more than I can say.” From Gary. [Crosstalk] Porter Stansberry: Very quick, simple answers
here. You measure a company’s capital efficiency by looking at what their total sales are and
then figuring out how much of that they’re able to pass on to shareholders in the form
of share buybacks or dividends. So you can usually find those numbers on any kind of
financial database. Shortly you’ll be able to have the number immediately, thanks to
the Stansberry Terminal that we’re building, available probably in the second quarter of
this year. And in regards to Hershey’s capital structure,
I’m afraid, my friend, you’ve got it a little bit backwards. So, Hershey borrows money under
long-term agreements at fixed rates. So that’s an almost permanent form of capital. You don’t
need to worry about Hershey’s long-term debt. They’re highly rated and they’re not going
to have trouble repaying any of those debts. So the Jubilee – what you need to worry
about is the companies who have lent money to people who can’t repay them, not the companies
who have borrowed money and are capital-efficient. Next? Buck Sexton: We got Brian. “Porter, I’m an
avid listener of the Investor Hour show and an Alliance subscriber. Several weeks ago
you had explained” – this is perfect for us – “how the gold stock, GLD, and gold
miner stocks will do when the inevitable stock market crash occurs like it did in 2008. Thank
you for your input on that. Now could you share with us what you think will happen to
bitcoin and cryptocurrency in general when the equities market, S&P 500, Nasdaq, etc.
starts heading south like you’ve been warning us for some time now? Would it first crash
as investors try to raise cash in a hurry, then start going up like gold does while the
general stock market tanks? Or would it just tank hand-in-hand with the stock market? This
will help many of us who are invested in cryptocurrency. We pay for the subscription so we can hear
what you think and what we need to hear, not what you think we want to hear. Keep up the
good work and best wishes,” from Brian. Porter Stansberry: Yeah. Well, I’ve never
been accused of ever [laughs] telling people what they want to hear. So that’s interesting.
Look, the crypto world is purely a function of the credit excess that we have experienced
over the last decade or so. I wish it was something more, but it’s not. It’s an enormous
speculation that’s been funded by this radical experiment we have with paper currency that
will eventually fall apart. And if I knew when, I would tell you. So, when the financial
markets finally crack, most likely because of a change in the credit cycle, I expect
the crypto will be destroyed. I mean, really utterly wiped out. The same way that all of
the speculative dot-com stocks were wiped out in 2001, 2002. Same thing. More than 90%
of them will fall by more than 90%. Most will not survive. That doesn’t mean that there isn’t a big future
for blockchain technology. There will be. But it’s going to be companies, well-established,
well-funded companies that use blockchain to provide services and earn profits. It’s
not going to be Ripple. Sorry. It’s just not. That’s my opinion. We’ll see if I’m right
or not in the future. But if I were you, I wouldn’t have any real capital invested in
cryptocurrency. And when I say real capital, you know what I mean. If you’re worth a million
dollars and you got $10,000 in cryptocurrency, fine. You’re gambling on college football.
Have fun. But if you’ve got $50,000 in the bank and you think you’re going to put $20,000
into cryptocurrency so you can retire in nine months, you’re going to get absolutely destroyed. Buck Sexton: All right. Porter Stansberry: One last thing about that.
If you look around at all the other measure of speculative excess, look around. Look at
the home prices in places like Palm Beach and New York City and California. Look at
the decline in the measures of volatility. So we saw five or six all-time lows set last
fall in volatility because there’s so much liquidity in the markets. They’re completely
swamped with liquidity. Look what’s going on with bitcoin craze and the 275 new cryptos
that’re now worth $200 billion, whatever. Look at the Swiss Bank making $55 billion
in one year simply by printing money and buying assets. There are lots and lots of warming
signs that there is an enormous amount of global speculative excess. Cryptos are just
a part of it. Buck Sexton: All right. We have T.K. up with
a question for me I think. “Buck, never read a Jack Reacher novel? Only seen the movie?
Jeez. I believe there are now 44 books in the Reacher series and you will love the character.
Porter, agreed. Reacher is a likeable fellow for us small-government types. My only problem
with Lee Child is that he allowed crazy Tom Cruise to play the part. As you know, the
centerpiece of Reacher’s character is his giant presence, 6’5″, 250 pounds, and ability
to street brawl with anybody. And for that part we get Tom Cruise? I didn’t even watch
the movie. Laughing in Hollywood, T.K.” I think Cruise is like 5’4″, right? Porter Stansberry: I don’t know how tall Tom
Cruise is, but I did like the Reacher character, and I was surprised that Tom Cruise was playing
it, ’cause it wasn’t a good physical fit. But that’s not why we’re laughing at Hollywood,
is it? Buck Sexton: No. Did you see the last night?
My favorite of the dumb – or rather this past weekend – the dumb slogans from the
Golden Globes, which I will admit I did not watch a single minute of; I have other things
to do. Porter Stansberry: I had to wash my hair.
I was busy. Buck Sexton: There you go. You gotta use conditioner.
Very important. Porter Stansberry: Country Club Guy doesn’t
have much hair. Country Club Guy: I save on shampoo. Buck Sexton: [Laughs]. So there was a shirt
that was making the rounds, and it was “Poverty Is Sexist.” And there’re some times when I
think something is dumb but I understand what they’re trying to say. That actually falls
in the category of: I’m not even sure what they’re trying to say with that dumb thing. Porter Stansberry: They were trying to say
that people with not very much should build houses for other people [laughing]. Buck Sexton: [Laughs]. [Imitating Arianna
Huffington’s voice]. It’s so clear that poverty is always about sexism. Yeah. Exactly. Porter Stansberry: Oh, that cracks me up,
man [laughing]. I’m not going to forget that one. That was a great line. Buck Sexton: Thank you. Porter Stansberry: So, for me, the thing I
found so shocking was: what was the phrase? “Time’s up”? Buck Sexton: What is that? I don’t know. Porter Stansberry: There was this – I think
that was from the Golden Globes. “Time’s Up.” In other words, that this male-dominated sexist
world that we struggle to live in is now in the past, that time’s up with men’s ability
to subjugate women. And I just really kinda wonder about that. Because I don’t know. I
grew up learning immediately that women were to be respected no matter what. That’s probably
the main lesson that my father taught me. And, Buck, you’ve been to my house. I don’t
know if you’ve met my wife. Country Club Guy’s been to my house. My wife runs our house.
I think time’s up on men being dominated and subjected to, I don’t know – Buck Sexton: The matriarchy, it would be. [Crosstalk] Porter Stansberry: Yes. I mean, I don’t know
what these people are talking about. My wife gets whatever she wants. Buck Sexton: There you go. Porter Stansberry: In the studio I see heads
bobbing. That’s true at your house, right? ‘Cause if my wife doesn’t get whatever she
wants, then guess what I don’t get? That simple. That’s the way it works. And I bet all of
our listeners are like, “Yeah, what the hell are these women talking about? I’m not the
boss in my own house. She is.” Buck Sexton: I knew a very successful entrepreneur
many years ago who was a tennis buddy of mine who was decades older than me. He was a wise
fellow. And he would just say – we would be talking about one story or another and
he would just say, “Biology wins again.” Porter Stansberry: Yeah. Buck Sexton: Biology’s a very powerful force,
everybody. It’s true. Porter Stansberry: Anyway, I love it that
these people who, for years and years and years have been trying to tell all of us – and
when I say “all of us,” I mean people who work hard, take care of their families, stay
married to the same woman, have conservative social values, put their kids and family first
all the time, us, the regular America, right? We’ve been looking at these crazy yahoos who
get divorced 37 times, who have drug problems and drinking problems and who – Mel Gibson
behavior [laughs]. Right? And they’ve been preaching to us that we should change all
of the way that we live. And when I say that I mean: we shouldn’t have our guns. We shouldn’t
have our religion. We should embrace gay marriage. And by the way, I have absolutely no problem
with whatever you do in your bedroom. I have no problem with gay marriage. But I do think
that it’s offensive to a lot of conservative people in America. And I don’t think it’s
something that people necessarily wanna see on their television sets. And I understand
that view. But it’s funny to see those people who’ve been preaching to us for decades about
how everything we do is backwards and uncivilized and not progressive – they’re the people
who were actually living in a world that was despicable and evil. And they’re the ones
who covered it up. And they’re the ones who suffered under it. Because you didn’t see
any of that kinda behavior in our companies. And it’s all in their world. And I think that once again – this is the
way life works: the guy who’s pointing the most about other people is really the guy
with the problem. And hopefully they can reform their industry. It’d be nice if they’d make
some entertainment that wasn’t focused on some ridiculous progressive morality lecture. Buck Sexton: It’s that or it’s cartoons or
superheroes. That’s it. Porter Stansberry: I’m tired of hearing about
it. Buck Sexton: That’s all it is these days. Porter Stansberry: I’m just sorta tired of
them. Buck Sexton: Yeah. Porter Stansberry: I hope Oprah does try to
run, ’cause I think she’s going to get smashed. Buck Sexton: Really? Porter Stansberry: Yeah. I think she is the
most absurdly self-righteous moronic person in all of public life. Do you remember when
she tried to shame that guy who wrote that wonderful fake memoir? A Million Little Pieces?
It’s a brilliant, brilliant book. It’s a book about addiction. But that’s not the point.
The point is: this author is brilliant. He made up an entirely new grammar. And it is
fantastic to read. I encourage everybody who loves English, who loves good writing to pick
up A Million Little Pieces by James Frey – F-R-E-Y. And apparently when James Frey sold the book
to the biggest publisher in New York, Random House, the woman who was the hot editor there
– I can’t remember her name, but she was very powerful and had developed lots of books
into movies, that kinda person. She said, “I can’t sell it because it’s fiction.” He
said, “Well, it’s loosely based on my life, but yeah, it’s embellished.” And she said,
“Well, go edit it. Just make it true.” He’s like, “Well, I can’t really do that. Because
now it’s a narrative. I can’t just change the story.” She’s like, “Well, we’ll just
say it’s true.” And so they published what was a fictional book as a memoir. And guess
what? Some people who were in the story came out and said, “Well, it didn’t really happen
that way.” And he had embellished parts of it. Embellished. So it wasn’t that he didn’t spend nine months
in rehab. It’s that he actually did get Novocain when they had to fix his face because he’d
fallen down a stairwell or something. It didn’t make any difference to the story. It was just
embellished for the purposes of fiction. Anyway, Oprah had him on her show because
his book was in her book club, and she helped make it a bestseller. And then she found out
that parts of it were false. So she had him come back on the show and she basically shamed
him for an hour. And he was like, “It’s just a story” [laughs]. And she’s like, “You lied
to the American people!” He’s like, “No, I didn’t. I wrote an embellished memoir like
everybody else in the world.” And her behavior about all of that was so self-righteous. Anyways, people who behave like she does – they
end up – there’s a hubris there, and she will end up destroying herself in some new
and unusual way. And I, for one, will be happy to see it. Buck Sexton: But we know that the Rock could
probably win, right? Porter Stansberry: Hm. Buck Sexton: Come on. Country Club Guy: He will in your household. Buck Sexton: There we go. Porter Stansberry: I’d vote for the Rock before
I’d vote for Oprah. Buck Sexton: I think I would too. The Rock’s
a very charismatic fellow. If you have a question for us – Porter Stansberry: She doesn’t work on Fox. Buck Sexton: You know the Beyoncé police? Porter Stansberry: Yeah. Buck Sexton: The Oprah police are like the
federal version of the Beyoncé police. Porter Stansberry: Let ’em come. Let ’em come
after me. Buck Sexton: Oh man. All right. Porter can
take care of himself. That’s true. Write to [email protected] If we use your
question on the show, we will send you some Stansberry Research swag. Love us or hate
us. This is supposed to be like an alley-oop thing here. Porter Stansberry: Can you imagine Oprah trying
to answer – [Crosstalk] Country Club Guy: Welcome to Porterville,
people. Porter Stansberry: Can you imagine Oprah trying
to answer any question at all about fiscal policy or defense policy? Any question at
all. Buck Sexton: I’ve actually never seen Oprah’s
show. So I don’t really know anything about her. Country Club Guy: She can’t even give away
free cars without realizing that everybody who receives one has to pay taxes on it. Porter Stansberry: That’s right. Buck Sexton: That’s it for the Investor Hour
this week. Porter Stansberry: All right, everybody. Buck Sexton: Love us or hate us, just don’t
ignore us. Please do enter your e-mail if you wanna get access to transcripts from the
show, all the show highlights, receive the Stansberry Investor Hour Weekly Update each
Thursday. Just go to InvestorHour.com. Next week we got Roger Lowenstein coming on the
Stansberry Investor Hour. Roger reported for the Wall Street Journal for more than a decade
and his work has appeared in Bloomberg, the New York Review of Books, Fortune, the New
York Times Magazine, and other publications. His books include Buffett, When Genius Failed,
Origins of the Crash, While America Aged, and The End of Wall Street. All right. We’re
rocking and rolling. We’ll see you next week. This is Buck and Porter signing off. Thank
you, Mr. Stansberry and everybody else. We’ll see you soon. [End of Audio]


  1. Fantastic, you guys! I think that this was probably the best podcast you ever did!! The interview was Gunderson was awesome (Porter, you ask great questions. I like the way you interview your guests!) and the insights were fantastic. I also loved the "repartee" which was not only entertainint, but instructive.

    yes, Yes, YESS! Get the real ariana on the show. It would be record setting! And so much fun!! Want it, love it, crave it! Thanks again, guys — you're fabulous!

  2. Ripple lmfao don't buy it, it's a Pre mined coin(80% of ripple is owned by the ripple company) plus it's super centralized and not censorship resistant plus 100% controlled by the ripple company

  3. My friends heard about ripple hitting coinbase weeks before most ppl knew anything. It has been chatter since October. Makes no difference in our decision to invest in scams or not, which this is in our opinion is. A lot of scams like bitconnect have made people millions and billions in cases but we still won't touch them.

  4. His "anarchist" friends told him about Ripple? Either they were trolling him or they are not true anarchists. Ripple is the banskter e-currency of choice right now. It is not a real decentralized cryptocurrency by any stretch of the imagination. What a joke you guys are… Seriously, educate yourselves.

  5. Starting to catch up on the podcasts. Should have listened to this one in January, Buck buying Ripple was the moment to sell.

  6. While gold has protected individuals in the past, the person who has it has a problem protecting it from thieves, including the government. Any gold fund wil use it in a fractional reserve basis. Gold stocks (shares) do move up with gold or silver. Their chief aim is give themselves money first. Some lie. I owned an Austrailian gold mining company, which supposedly
    had gold and sold it as futures. Sons of Gwalia could not deliver. They did not have gold to backup their futures sales. I lost 100%. My mistake was trusting management! In times of trouble, they will have rising stocks (while they are siphoning off
    gold for themselves). If times are bad enough, you want food and land where you can farm. Go to Amish land and invest with them for a share of crops.

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