A Needed Dose of Reality in a Sea of Pessimism

Episode #335 | November 13, 2023

Episode #335 | November 13, 2023

A Needed Dose of Reality in a Sea of Pessimism

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey are joined by Marc Chaikin. After 50 years of working on Wall Street, Marc founded our corporate affiliate – Chaikin Analytics – to guide everyday investors. His signature Power Gauge system rates more than 5,000 stocks on 20 fundamental and technical indicators in order to find the best investing opportunities.

Dan and Corey kick off the podcast by discussing a zany cast of characters, including Federal Reserve Chair Jerome Powell, WeWork co-founder and former CEO Adam Neumann, and convicted FTX founder Sam Bankman-Fried. With coworking-space company WeWork declaring bankruptcy last week, Corey notes that this could be a sign of more trouble coming in the commercial real estate sector. He also notes that Neumann, who stepped away from WeWork in 2019, left his mess for others to deal with...

It has a Sam Bankman-esque feel to this... "kicking cans down the road" sort of thing and hoping you get away with it.      

Next, Marc joins the conversation to explain why he created the Power Gauge for individual investors after the great financial crisis... how it can identify stocks that are likely to outperform the market over the next six to nine months... why it excels in timing investments... and how it can help prevent major portfolio losses by showing which stocks to avoid. He says...

No matter how good your fundamental research is or your quant model [is], if the market doesn't agree with you, guess who wins? The market always wins... You're investing in what I call "dead money." Where you really get serious outperformance is when the market agrees with the model. And that's where the timing element comes in.

Then, Marc explores 2023 being a difficult year for bearish investors, the likelihood of a recession, and how artificial intelligence ("AI") has led to unprecedented productivity enhancements. Dan quips that "software ate the world. Well, [now] AI is going to eat software." Marc mentions that cloud computing in particular will be crucial to large-scale AI adoption and further innovation...

That's where this whole convergence of technology, data, and machine learning comes in. I think it's going to unleash unbelievable advances in medicine, in data analytics for retail, and self-driving cars eventually. Because that's what you need to get this next generation of enhancements into the marketplace.

The conversation then shifts to the damage done by a decade of near-zero-percent interest rates, Marc's strategy for finding winning sectors and the best stocks within those sectors, and the general outlook for the market. Most notably, companies that took advantage of zero-percent interest rates to float short-term debt are now going to have to roll that debt, putting them in a very tough position. Marc poses an important question...

Is there a ticking time bomb – like the credit default swaps in 2008 – which is going to result in a big existential moment for the financial markets?

Finally, Marc shares his thoughts on today's market, including the "Magnificent Seven" stocks, the U.S. national debt, the real estate sector, and 10-year Treasury yields. He explains that he and many other leading investors are bullish on stocks, but the media prefers doom-and-gloom headlines for clicks. "They just don't want to put optimists on TV because it's not controversial," he says simply. But Marc explains how his Power Gauge system cuts through the clutter of mainstream media and information overload to provide the cold hard facts. "Think of the Power Gauge as a reality check."