Episodes

On this week's Stansberry Investor Hour, Dan and Corey welcome their colleague Mike DiBiase back to the show. Mike is the editor of Stansberry's Credit Opportunities and senior analyst for Stansberry's Investment Advisory.

Mike kicks off the episode by discussing the rampant fear in the stock market today. He notes that this fear is not yet reflected in the credit market, which is a "mistake," as credit investors should be more concerned. Mike then talks about the lack of good high-yield bonds out there, corporate bankruptcies being on the rise, the worrying number of zombie companies, the Starbucks recession indicator, consumer confidence hitting a 12-year low, and why he believes things are "not going to end well" for the economy. He says...

It's the case of haves and have-nots, right? The big companies in the S&P 500 make up the bulk of corporate profits in the U.S. They're doing great, right? But the rest of the companies aren't doing so well. And we're seeing the same thing on Main Street. I think the top 10% of earners in the U.S. make up something like 50% of all consumer spending... If you're in the other 90%, you're really struggling. And most folks are living paycheck to paycheck and just choking on debt.

Next, Mike examines the budget-deficit problem and the market's expectation that the government will always bail it out. He highlights the fact that the U.S. has been printing money at an above-average rate the past year and says he believes inflation will spike once more as a result. All of this is part of the "new world" that investors will need to learn to navigate, including permanently higher interest rates, bonds being a better choice than stocks, and an inevitable credit crisis...

Interest rates are going to have to go up again. And I think that's the moment of real fear. I think that's when we'll see the next credit crisis – when everyone realizes that what the [Federal Reserve] did didn't save anything. It just simply made the problem worse and delayed the inevitable. So I think that's where we're going to see the next credit crisis like we saw back in 2008.

Finally, Mike explains the economic difference between tariffs and inflation, how investors can "make a killing" from what's about to happen, and the many advantages corporate bonds have over stocks – such as it being easier to spot a bottom with bonds. He says he's waiting until credit spreads surpass 1,000 basis points, and then he will deploy his strategy of finding the best bonds out there with the lowest risk of defaulting...

When the credit crisis occurs, bonds go on sale. They actually get safer the cheaper they get. And you can make returns of 20% [to] 30% per year holding these safe instruments... You can make unbelievable returns – equity-like returns – with these bonds.