In a week where markets hit new all-time highs, Dan gets to the question everyone asks with each new record. “You all know where I’m gonna come down on this.” With this high-water mark, it’s a good time to reflect on the principles of investing, from risk management, to value, to growth. Dan gets into the weeds on the literature of investor behavior – and the findings by DALBAR on individual investing performance, which while never changing year after year, are always shocking.

Dan’s long kept a close eye on mining companies for the big returns a select few of them can offer. Not for nothing is the little-known miner he’s publicly staked his reputation on up 132% and counting, for example. In fact, the top-performing Stansberry recommendation in our firm’s history, Seabridge Gold, returned 995% at one point. But the sector is fraught with risk. Between precious metal price fluctuations, geopolitical instability, and environmental challenges, there’s a lot that can go wrong.

We’ve covered mental models in previous episodes – the unique patterns of thought that open up opportunities – and reveal pitfalls – that the vast majority of more conventional minds don’t see, or even understand. Dan gets into a new mental model in this week’s episode, describing second-level thinking. “This one is very important for investors – it’s no coincidence that the first chapter of Howard Marx’s book is all about second-level thinking.”

What if we were in the midst of a gold rally, and no one was talking about it? Now that gold is up 7-8% over the last few months, Dan sheds light on why the uptick is so unreported, going largely unmentioned by mainstream media like The Wall Street Journal and Financial Times. Dan thinks the answer lies in the aftermath of the Federal Reserve’s latest meeting, and the dovish interpretation that prevailed. Clearly, the Fed is now thinking about supporting asset prices, now that their stated objectives of reaching full employment have already been met. Of course, that has some inevitable consequences. “If you screw with the market this long, the market says, “Uncle, Uncle!” And you gotta have some gold.”

In a week defined by Facebook’s announcement of its cryptocurrency Libra – which, with the company’s 2.5 billion users, may be the most powerful endorsement of cryptocurrencies to date – as well as sideshows like the deletion of Elon Musk’s always-dangerous Twitter handle, there’s a lot for Dan Ferris to unpack. Then there are the serious warning signs – including the aftermath of the Fed’s decision announced this week to hold off on raising interest rates. Dan reads the tea leaves to reveal what the Fed thinks chances of recession looming really are.

In this week’s episode, Extreme Value Editor Dan Ferris shares the two key concepts investors need to master to value a business, and why the most famous metric is, to him, totally meaningless. We also chat about Beyond Meat’s spectacular rise, and possible fall… and discuss a fear-mongering article from Bloomberg about the “fear gauge.” Fielder Capital Group CEO Frank Byrd stops by to share his fascinating story of major investing success, inspired by Warren Buffett.

Dan has long warned about the dangerous odds of short-term trading – yet in recognition of the fact that so many readers are still determined to do it, he offers some essential principles to anyone engaging in short-term trading – if they must. The important, No. 1 principle is counter-intuitive, and we expect some of you to argue – but hear Dan out about how the most important thing is not how much you make, or even if you make any money at all. And amid all the risk management tips out there, there’s one Dan reveals as the very best he’s ever heard – “the one that separates the heroes from the zeroes.”

Dan leads off with a shorter Rant segment this week, about how hard it is to do short-term trading because of all the big traders with billions of dollars that you’re competing against in the market. He says it’s as hard as trying to open an online retailer to compete against  Investors can profit from actively investing their own money, but they need to be more long-term oriented.  Dan also shares the “Coffee Can” story written by Robert Kirby back in 1984.  It’s all about how an investor followed his adviser’s buy recommendations, but not his sell advice… and wound up making a huge amount more money as a result of holding good companies for the long term.  In our What’s New segment this week, game software provider Zynga is selling its San Francisco headquarters and making $600 million—a ton more money than it’s made on its real business. Then Dan runs through a few “macro” bits in the news, suggesting that volatility is likely to increase over the next three years. Dan shares some personal research he did on the VIX, which he believes indicates that, the farther the VIX gets below 15, the more it resembles a “coiling spring,” set to soar. 

Dan opens up this week with an essential mental model all investors must master.  It’s a simple way to figure out where you’re most likely to succeed, in the stock market and in life.  Great financial minds like Warren Buffett, Andrew Carnegie and Ben Horowitz of Andreesen Horowitz have used this idea to achieve stunning success and enormous wealth.  In What’s New this week, you’ll see why the recently IPO’d Chinese company, Luckin Coffee, might not give Starbucks as much trouble as investors think.  We’ll also contemplate the recently reported “deaths” of both inflation and value investing.  We’ll finish up with a look at Whitney Tilson’s Tesla prediction… which is looking pretty good these days!

You’ve probably heard Warren Buffett say, “Be greedy when others are fearful and fearful when others are greedy.”  You probably never stepped back and realized that’s a model of how emotions affect the stock market.  In this week’s opening “Rant” segment, Dan shares with you his model of the basic emotional makeup of the stock market. It’s different than the Buffett model. Dan pulls evidence in from some interesting sources he’s been looking at recently, from physicist/quant investor Emanuel Derman and mathematician/author Steven Strogatz.