Episodes

Announcer:                 Broadcasting from the Investor Hour Studios and all around the world, you're listening to the Stansberry Investor Hour. Tune in each Thursday on iTunes, Google Play, and everywhere you find podcasts for the latest episodes of the Stansberry Investor Hour. Sign up for the free show archive at investorhour.com. Here's your host, Dan Ferris.

Dan Ferris:                 Hello and welcome to the Stansberry Investor Hour. I'm your host, Dan Ferris. I'm also the editor of Extreme Value published by Stansberry Research. Today, we'll talk with Doctor Gad Saad. I've been looking forward to this one for some time now. Gad is one of my very tippy-top favorite people to follow on Twitter. He's a business school professor who has bravely taken massive career risk to fight political correctness. I can't wait for you to meet this guy. This week in the mail bag, listener Gary K sets me straight on closed-end funds with a very thoughtful e-mail plus questions about currencies, Ray Dalio's all-weather portfolio, and more.

In my opening rant this week, I'll give you the first 20-% of the October issue of Extreme Value free of charge It comes out October the 9th, and I'm just going to give you a little taste of it because I think it's a really cool subject that you'll enjoy. That and more right now on the Stansberry Investor Hour. Okay. Let's talk about the price of prosperity. That's the topic in Extreme Value this month. And I'm not going to give you the advice... I mean, I'm going to give you the first 20%. The other 80% is a lot of detailed analysis and advice for Extreme Value readers. They pay a lot of money. But I thought it would be nice to just give you a little peek under the hood here.

And we're going to talk about the price of prosperity. Mature, prosperous nations are like rich, old men. Right? When they're young and they're hungry for success and they're poor, they have like not much to lose and everything to prove. And so, you know, they work their hearts out, and they take risks, and they manage their way to a fortune. Then when they get old and rich, they behave the total opposite way. Right? They no longer have anything to prove. They've got everything to lose because they've got a ton of money now. And they tend to avoid risk-taking. You know? Think of like maybe – Ebenezer Scrooge might be a decent archetype here.

So he starts out ambitious and kind of a fairly carefree young man. Maybe a little less carefree than his peers, but still. You know, nothing like what he turned into later on. Then he winds up, you know, rich and lonely and old and bitter. You know the story. At least before Jacob Marley and the three spirits show up, right? Well, I did an interview earlier this week as part of the Stansberry Virtual Conference with an economist and author of several books named Todd Buchholz.

And Todd's a pretty cool guy. He was like a Director of Economic Policy for George H. W. Bush. He worked for the Tiger hedge fund. He's one of the co-producers of The Jersey Boys­ – insanely successful Broadway musical. Pretty cool guy. And his book is called The Price of Prosperity, and it's about how prosperous nations fail and how to renew them. And the thing is, companies are that way too, aren't they? Companies can get big and bloated. Todd talks about the role of creeping bureaucracy, you know, as one of the things that causes prosperous nations to fail.

And so, companies are the same way. They get big and bloated and bureaucratic, and they stop growing, and all the incentives change, and nobody's hungry anymore. And before you know it, you know, a market leader can go away. Right? Companies like Kodak and Xerox and Polaroid and IBM and others. And so, I've been talking about a similar phenomenon since about 2017. Right? I pointed this out more than one at all of my Stansberry Conference presentations and once or twice in the newsletter, maybe once or twice in the Stansberry Digest – which I contribute most weeks. [Laughs] Not this week or last week but most weeks. I'll be back next week in the Digest.

And I've commented how, for example, like the five largest-cap stocks back in March of 2000 were General Electric, Sysco, Exxon Mobil, Pfizer, and Microsoft. So they're like the rich, prosperous, mac-daddy, no-brainer, blue-chip, guaranteed-to-work stocks. Right? And they were all the largest – you know, they were the five largest market caps in March 2000. And here we are like 20 years later, and Microsoft has gone on to hit new highs but the other four have yet to break even with their dot-com highs. Right? Sysco, Exxon Mobil. Pfizer... GE is a pale shadow of its former self. Exxon Mobile is struggling. I mean, it's just a typical phenomenon.

And there's a guy who I've talked about before – Rob Arnett from Research Affiliates – and he's researched this stuff. And he researched what they call top dogs. Right? The top dogs are like the biggest market-cap companies at any given time. So what he found out basically is that top dogs are not great investments. They tend to not perform really well. Basically, he did a presentation – if you go to the Researchaffiliates.com website, you'll find a presentation called, "Are valuations now irrelevant?" And one of the things he reported... he said, "Since 1980, typically only two of the top 10 companies remain among the largest companies 10 years later." Right?

So to me, that sounds like an 80-% chance of not being in that group a decade later. Right? He also found the largest stocks in the market are often expensive and have historically underperformed after reaching the top 10. You know? So long term, like, being among the top market-cap companies... it makes people think they're no-brainer, perfect investments. And it's – you should think the opposite. You should be suspicious of holding them for the next 10 years. Because they're bound to underperform because the problem is – and this is a typical observation by Howard Marks who I quote often – you know, the problem is..., "Who doesn’t know this?" Right?

Who doesn’t know that – take your pick – Amazon, Apple, Facebook, Google... who doesn't know these are great businesses? Who doesn't think they're among the best businesses that have ever existed? I do. I agree. I agree. They're among the best businesses. They are some of the – if not the – very best cash-gushing, market-dominating, competitor-destroying businesses that have ever existed. And any analyst could look at them and say, "Oh, man. There's so much here to love." Right? "And there's so much here to make you think that these things are going to do incredibly well for another 10 or 20 years." Right? So it's easy to think that.

And this goes back to a topic that we've addressed before: second-level thinking. First-level thinking is, "Greatest business in the world, everybody knows it. I want to buy the stock." And to a certain extent, that can obviously work for a while. Right? That can work for a while. I've said that people who think these businesses can't perform really poorly don't have enough imagination. But not having an imagination has been a pretty god strategy for three or four or five or 10 years. Right? [Laughs] So yeah. For a while, you know, it makes a good trade. And they have been wonderful businesses. They've grown beautifully. I mean, it's just been wonderful.

But everybody knows it. And the second-level thinking would be, "Well, since absolutely everybody thinks this, what am I going to think? Am I going to jump on that and just ride the train and be content to hold these and not think about them for a decade?" I don't think so. I think the second-level thinking is, "Get set." I mean, they performed extremely well since the March bottom – the COVID bottom. And they've performed extremely well just in the past few years and have done extremely well long-term – right – since they went public. So, you know, they've done great short-term. They've done great long-term. They've done great in a crisis. Great, great, great, great, great. Nobody doesn't love them.

So you have to assume that at some point – I mean, Apple's earnings have gone nowhere. And the stock has doubled. You know? Over the past little like year or more. And, I mean, that can't go on forever. Right? It can't go on forever. And you say, "Well, when's forever, Dan? When is that?" Hey, look. You know me. I don't make predictions. This is not a prediction. It's just an observation about the interplay between investor psychology and valuation and longer-term returns. Like decade, you know...five, 10, longer-term returns.

So be careful. And like I say, I've been wrong about this. I've been kind of, you know, pounding this table on this, "Oh, be careful. These things can cut you in half before you know it." Because everybody loves them, and then everybody will hate them when they stop performing. And I've been wrong. But you know what? They're more expensive than they've ever been. Like, the top companies in the S&P 500 are a bigger chunk of it than they've ever been. And new money comes in, and more new money goes into them than ever before because of that.

So when the scene changes enough and they start underperforming, if the business result hiccup and they underperform, the market can react just... it can brutalize you. So just be careful. Right? No prediction. Just an observation. And I really do think it's a valid one. I think that's enough of that for now. You get the point. Let's talk with Gad Saad. Man, I cannot tell you how thrilled I am to have this guy on the program. Let's talk with him right now. [Music plays and stops] You know how I'm always saying that I don't want this show to be too political? Because after all, it's a finance show. And some politics is appropriate, but it can get too much really quick. Right?

Well, maybe you're interested in politics. Maybe you're interested in American and global economics and politics. If so, you're probably going to be pretty excited to know that Trish Regan – the famous finance and political journalist – is now part of the Stansberry team. And Trish Regan has a brand-new podcast. It's called Trish Regan's American Consequences. You can find it anywhere that you listen to podcasts: iTunes, Google Play – anyway. Or you can just go straight to americanconsequencespodcast.com. And she's already had some huge names on the show like billionaire businessman John Catsimatidis and former U.S. Senate candidate Tom Del Beccaro.

So check it out. Trish Regan's American Consequences. It's available anywhere you listen to podcasts. Or just go to americanconsequencespodcast.com. Today's guest is Dr. Gad Saad. Dr. Gad Saad is a professor of marketing at Concordia University in Montreal, Canada and former holder of the Concordia University Research Chair in Evolutionary Behavioral Sciences and Darwinian Consumption from 2008 to 2018. He has held visiting associate professorships at Cornell University, Dartmouth College, and the University of California Irvine. Professor Saad has pioneered the use of evolutionary psychology in marketing and consumer behavior.

His works include the book, The Consuming Instinct: What Juicy burgers, Ferraris, pornography and Gift Giving Reveal About Human Nature and the Evolutionary Bases about Consumption and Evolutionary Psychology in the Businesses, along with 75-plus scientific papers – many on the intersection of revolutionary psychology and a broad range of disciplines including consumer behavior, marketing, advertising, psychology, medicine and economics. His Psychology Today Blog Homoconsumericas – if I said that right – has garnered 6.4 million total Views, and his YouTube channel, "The Sad Truth" – which I love, has garnered 19.7 million total ciews.

He recently started a podcast titled, The Sad Truth with Dr. Saad available on all leading podcast platforms. Dr. Saad is also a leading public intellectual who often writes and speaks about idea pathogens that are destroying logic, science, reason and common sense. His fourth book, The Parasitic Mind: How Infectious Ideas are Killing Common Sense, was released just this week on October 6th, 2020. My copy arrived last night around 7:00 o'clock. Got it right in front of me. Dr. Saad, welcome to the program. Thank you for being here.

Dr. Gad Saad:            Thank you so much for having me.

Dan Ferris:                 So I love your – I love your Twitter feed, too, I have to tell you. It is dripping with sarcasm. And I noticed in your book that you addressed that. You said, "Just about the only way to deal with some of this nonsense was through sarcasm." When did you arrive at this?

Dr. Gad Saad:            So, you know, as someone who is in the business of studying how to persuade people, how to build arguments, how to market products, services, ideas, I'm aware you have to use different types of strategies when trying to persuade people. So sometimes, I could put on my professorial hat and drown you with evidence. But at other times, I use what I call the power of satire and sarcasm, because I argue that it is akin to the surgeon's scalpel cutting through warm butter. Right?

It gets to the heart of the lunacy with a few ironic or satirical comments. And so, it is one of many tools that I use. But as I've argued in the book, some of our greatest thinkers have been also some of our greatest satirists. This is why dictators will usually try to get rid of the intellectuals and the satirists first because they're not afraid of guys with big brains – big muscles. They're afraid of guys with sharp tongues and big brains.

Dan Ferris:                 As well they ought to be. I didn't get a chance... I just got my copy of the book literally just last night. So I really haven't had a chance to read it. But I have been looking through it. And I noticed – if you don't mind, I'm just going to dip in here and there. I noticed that you address some things that we've talked about on this podcast. One of them being this tendency in modern thinking to frame everything as a dichotomy, as an either/or proposition. And life just doesn’t work that way, does it?

Dr. Gad Saad:            Right. And I actually coined a term for this type of mindset. I call it epistemological dichotomania. Right? It's a form of, you know, mindset hysteria where everything is viewed with the binary lens. So it's emotion-based thinking or rational-based thinking. It's nature versus nurture and so on. And the reality in many cases, as you correctly said, life is much more complicated. So if we take, for example, nature versus nurture much of who we are is really an inextricable mix of both factors. It's not nature or nurture. Everything is nature. Even nurture occurs in its forms because of nature.

So there, I was trying to argue as a lead-in to the chapter on thinking versus feeling, it's not that humans are thinking animals or humans are, you know, feeling animals. It's that, depending on the situation, we should either activate our effective system or our reasoning system. So for example. If I'm walking down an alley and I see four young men loitering around and my heart starts pounding and I start getting afraid, well in this case the effective mechanism of fear – elicitation of fear – makes perfect adoptive sense. On the other hand, if I'm trying to choose a Presidential candidate, maybe I shouldn't be letting my effective system kick in. Maybe I should be, you know, using my cognitive system to make the proper decision. So that's how I laid the intro to that particular chapter.

Dan Ferris:                 I see. And one of the – part of this trend of idea pathogens, if I understand some of your arguments correctly – is that we've emphasized this effective system. We've emphasized emotion to the degree that even in academic settings where the pursuit of reason and truth is supposed to prevail, we're now worried much more about hurting people's feelings as though you pay, you know, $100,000 worth of tuition to not have your feelings hurt. Correct?

Dr. Gad Saad:            Exactly. So I do a quick analysis of the models of universities. And I didn't find a single model where they're talking about the pursuit of emotional health and protection of hurt feelings. Right? It's always truth, veritas and so on and so forth. Now, that doesn’t mean that it's not important to be nice to people, to be kind to people, to not be unnecessarily impolite and mean-spirited to people.

But in the same way, when I go to play a soccer match, I'm not trying to eat a hamburger. Right? Different pursuits have different objectives. When you attend a university, it is not for the coddling of your feelings. It's for the growth of your intellectual landscape. And so, once you pit these two systems against one another, only bad things can come of it. And so, I actually use an argument from operations research. So operations research is the field that tries to maximize and minimize objectives.

So for example. There's a classic example in operations research called The Traveling Salesman Problem, which basically goes something like this. Suppose a traveling salesman has to visit five cities and starts in city A, and he's going to... he has to visit each city and then return back to A, never going to one city more than twice. How should he go about his trajectory to minimize gas costs, let's say? Right? Well, there is an algorithmic approach by which you can optimize that decision. And so, many decisions in nature or in business, in economics, are very much structured as optimization problems.

So when we now take this framework to university, what is the objective function that we're trying to maximize? Is it the pursuit of knowledge? Is it the growth of my intellectual experience? Or is it the minimization of hurt feelings? You can't really have both. I even did a – I even looked at the mission statement of the university that Christine Blasey Ford or whatever her name was – the one who came out against Kavanaugh... that he maybe had raped her somewhere, somehow 36 years ago, but she couldn't remember any details. I looked at her university. They actually placed many of the social justice warrior causes ahead of the pursuit of truth. That's grotesque, and it needs to end.

Dan Ferris:                 So I can't help – I know you address this in the book. But I just can't help asking you [laughs], now that I have you here, how in the world have you survived as an academic for two-and-a-half decades when it seems like almost everything you say goes against what I perceive as the attitude of the overwhelming majority of academics? How are you still there?

Dr. Gad Saad:            It's my disarming smile and unmitigated charm that gets me by.

Dan Ferris:                 I see.

Dr. Gad Saad:            Yeah. No. In all seriousness, I think it's a combination of things. You are exactly right that I can't think of anyone in academia who has come remotely as close as I have in tackling as many of the sacred cows. Right? There are many people who became known for tackling, you know, one or two main issues. But there is nothing that I won't go after if I perceive it to be an attack and a murder of truth. Why am I able to survive? Well, I think first because I always modulate my language in such a way either because I use satire and sarcasm or because I drown you in evidence that it's very, very difficult to pin me.

It's very difficult to come after me because if you come after me, you better come prepared. Because if not, I'm coming after you 10 times harder. Right? And so, I think most people recognize that and say, "Well, you know what? We might disassociate ourselves from him. But it would be too caustic to go after him." So that's one possibility. A second one – which I'm not proud that that possibility exists because it speaks to identity politics – I think the fact that I have my unique, you know, personal history protects me against a lot of the social justice warriors. Because being an Arabic Jew... right?

So a quote, "Jew of color," being a war refugee puts me very quickly on top of the victimology poker hierarchy. Right? I am the gold medal in oppression Olympics. So if you come after me and you try to cash in those chips, I'm going to drown you. No black person in the United States has gone through what I've gone through in Lebanon. So if you're going to come to me with your victimology, you better come correct, as we say. Because I'm going to smash you. Right?

So I think for all sorts of factors, it's luckily – knock on wood – I've been able to survive. But I should mention it's not as though I haven't had a cost to bear. Professionally, most of my colleagues try to disassociate themselves from me even though they write me privately saying how much they admire me. But they'll never do it publicly because, you know, "Bruh, I don't want to be associated with some of your ideas." What is it that you're afraid of? You're afraid that I support freedom of speech? You're afraid that I support women's rights in the Middle East? What is it that's causing such cowardice?" Right?

So I also suffer in the sense that I've received endless death threats through the years. So in 2017 – which was probably the worst time for death threats for me – I had to come into the university and check in with security, and they would walk me to my class and then lock the door so that if a student left and they wanted to come back in, I had to unlock the door. So when I would go to lecture a class, I would be so stressed out that when – then my wife would come pick me up, and I would sort of scurry out of the campus. I would get into the car, let out a big sigh and say, "You know, I survived another week. And the university even asked me, and they came with me to the Montreal police where we filed a report with all of the documentation of the death threats.

So a lot of people will write to me and say, "Yeah. But professor. You can speak because you have tenure." That is frankly an insulting argument to make because it makes it seem as though having tenure protects me from all of the ways by which I've suffered a rather stressful life. Tenure doesn’t protect me from the death threats that I've received. Right? Tenure didn't protect me from all of the other prestigious professorships that I would've had had I not had such a reverence to all of the BS. So, you know, I just go about speaking the truth and then let the chips fall where they may.

Dan Ferris:                 A couple of things. First of all, you remind me of Nassim Taleb who says, "When you see fraud, say fraud." And he's ruthless also with his opponents. And it makes me wonder. Is this a Lebanese thing in the culture there, or is that just a coincidence?

Dr. Gad Saad:            Right. No. It's a good question because, as you may or may not know – and some of your viewers may or may not know – Nassim and I are very good friends. And I think if I can speak for him, although he said it publicly, one of the things that he admires most about me is precisely that I am absolutely relentless in my engagement. Right? And of course, I respect that in him. Now, of course, sometimes he may take it a bit too far in his personal attacks.

But what we do share is exactly an allergy to bullshit, if I may say. Now, is it due to being Lebanese? Well, I mean, there certainly is a stereotype of sort of the Middle Eastern person who doesn't take too much BS. But I frankly think it's a lot more the unique combination of genes that makes me who I am and the same for Nassim. Because I can certainly think of some Lebanese folks who are very cowardly. Right? So I don't think it's the water in Lebanon. I think it's more the genes running through Nassim and I that make us combative against those intellectual terrorists who try to destroy reason.

Dan Ferris:                 Yeah. I mean, I'm not surprised. People are people wherever you go. And few of them are willing to do what you do. [Laughs] I mean, it's just for almost obvious reasons. But the other thing I wanted to ask you about was... I mean, death threats. Wow. Was there a particular issue that came up that just was too much for somebody, and they said, "I'm going to kill this guy over it?"

Dr. Gad Saad:            So the death threats come from various groups. Sometimes it might be because I criticize Islam. But in that particular context in the 2017 episode, a lot of the death threats came... I'm not sure, you know, what triggered each of the persons who were writing death threats against me. But from what I seem to recall, there was sort of a cluster of folks who were very upset that this journalist from Canada had been de-platformed at an event that Jordan Peterson and I were going to speak at. So let me step back and give you the background. So Jordan and I were supposed to speak at an event at Ryerson University at Ontario, in Toronto. And the title of the event was, "The Stifling of Free Speech on University Campuses." And guess what happened to that event? It got shut down on the university campus.

So apparently, irony was lost on the intellectual terrorist. So the organizer of the event, a very courageous woman who was footing the bill for all the stuff, decided, "Okay. We will regroup and hold this event at an even bigger venue a few months later." And so, the original event was supposed to happen, I think, in August 2017. It ended up taking place in November 2017 at a much bigger venue. You should have seen the amount of police presence and bodyguards that we had just to do the event; which makes you think, "Why are two Canadian professors who are speaking about the importance of freedom of speech requiring so much protection?"

I mean, it's insane. But in any case, the journalist who was going to also be one of the panelists at the event – because she had been associated with some right-wing folks and so on and so forth, the organizer of the event decided to not invite her for the rescheduling of the event. Because she thought that she was too toxic. Ultimately, she's the one who was footing the bill for the event, and she had to pay a lot of security and so on. And so, she asked our opinion. We gave her our pros and cons.

But, you know, we were just panelists. It wasn't up to us to decide. Well, of course, all these ultra-right-winger Jew-haters and so on decided to say, "Oh, it's the diabolical Jew who's behind this." And so, they got angry at me because it must be...I mean, sure, the diabolical Jew is saying that he had nothing to do with the decision. But that's how Jews are. They're shifty. And so we're going to go" – and so, a lot of the death threats were, "We're going to put you in the oven last. We're going to boil you this way. We're going to kill you that way," and so on. And so, I kind of amalgamated all those death threats and stepped to my university and then to the Montreal police, and that was it.

Dan Ferris:                 Wow. And you have – you're a family man. You have a wife and a daughter. I mean, I can't imagine...it has to affect your daily life.

Dr. Gad Saad:            Sorry. Yeah. I have more than one kid. It's actually – it does affect my daily life. It has... you know, so I'll give you a good sort of anecdote to give you a sense of how it affects my life. And it goes back to the point we were talking earlier about; the fact that one has tenure or not is only one small part of the bigger puzzle. As you might imagine, when I – I mean, a lot of people on the street everywhere come up to me and so on. And luckily, knock on wood, I've only had fans so far. No one nasty's come up to me and so on. And, you know, it'll happen many times in a given day, and it's always wonderful, and it's always great. Well, one time I was walking out of my house with my wife. The kids were already at school.

And a gentleman passes by. And he says, "Excuse me. This is right outside my house. So I’m in the driveway of my house. He goes, "Excuse me." And usually, I know what comes next. I say, "Yes?" He goes, "Are you Gad Saad?" I said, sort of hesitantly, "Yes." He goes, "Oh. Do you mind if I come and shake your hands? Your hand?" I said, "Okay. Sure." So he comes and shakes my hand. Well, the rest of the day I was in a complete panic. Now you might say, "Why?" Well, because now I knew that there was someone who knew where I lived. Now, he may be a fan, but maybe tomorrow he decides he's no longer a fan.

So the mere fact that someone now knew where I lived was a great problem to me – not so much for me but precisely for what you said. Because I have kids. I have a wife. And so, many times when people come up and they want to take a selfie, or they... so on, I always say, "Please don't take photos of my children or my wife. And if you follow me on social media, you'll notice that I never put photos of them or very, very rarely do you see them in the background or something," precisely because there are a lot of deranged folks out there. So it's a problem. It's a lot of stress.

Dan Ferris:                 Wow. I had no idea. I'd like to move onto a particular thought here. I notice in the preface of the book you address the fact – and I've noticed this on the Twitter feed too. You are just particularly focused on the particular brand of nonsense which is issued from the political Left, much more so than anything issues from the political Right. and you address that in the book, and you make it clear that those are the ideas that you think are the big threat. And it makes perfect sense. You say it would be akin to asking a gynecologic oncologist who specializes in cervical cancer why he maintains a strict focus on women. So that makes sense to me. But, Gad, I personally have this idea that Right and Left...I kind of think they at times are equally kind of crazy. And I feel like the real problem is a kind of what I call top-downness. You know?

We have all of this rather academic – and academics wind up disproportionately in government, I feel – view of life where they can just come up with an idea out of nowhere that is not tested by experience, not falsifiable as you discuss in the book – and foist it upon all the rest of us, usually by seizing power through government. Or, you know, by seizing power in academia, frankly. And I feel like that top-downness...it's just an insidious fact of modern life. And so, that's why I personally, when people talk about the Right or the Left... I understand your point. But to me, the whole thing – I'm suspicious of either one. It's like they're saying, "I belong to this side or that side." It's that dichotomy thing we talked about earlier. Does that make sense?

Dr. Gad Saad:            Yeah. So let me – a couple of things to unpack there. it is absolutely the case that you don't have to be a member of one political tribe to be parasitized by these idea pathogens and to fall prey to bad ideas. And so, let me give you a specific example. When it comes to the rejection of evolution, typically we associate that more with the Right. So you can think of the sort of the stereotype of the Republican Senator from the South who thinks that Darwinian Theory is an atheist hoax. Right?

But by the same token, while the Right might reject evolution or some members of the Right might reject evolution – it is folks on the Left who reject evolutionary psychology. So the application of evolution to the study of the human mind, the rejection of that endeavor is largely due to Leftist imbeciles. Okay? So it is absolutely true that anyone can be parasitized by these bad ideas. This is why I think, if I may be so bold as to say, my book is important.

Because it actually demonstrates that the vaccination against these bad ideas is something that everybody should engage in – not just Left or Right. But as you correctly said at the start of your question, it is absolutely...it is incontrovertible that the idea pathogens that I discussed in the book are all of them stemming from Leftist professors. Number one, because much of academia is governed by Leftist professors. Depending on the discipline that you're in, you could have literally 100% of the professors in the discipline being Democrat and not Republicans. That's not a healthy thing. But I would argue that the types of nonsense that the Right and Left espouse – the attacks on truth – are not equivalent in how poisonous they are.

Let me explain why. The Right might reject a particular theory, whereas that we know is true. A scientific theory. Say, you know, we reject evolution because... whatever, our Christian beliefs. But on the other hand, the Left has completely rejected the possibility that truth even exists. So one of the idea pathogens that I discuss in the book – the grand-daddy of all idea pathogens – is false modernism. False modernism is the, quote, "Philosophical movement," that argues that there are no objective truths. Right? Everything is shackled by subjectivity. Everything is shackled by your personal biases. There is no such thing as a truth.

Well, as you might imagine that's very disconcerting to a scientist because we do wake up every morning thinking that there are truths to be uncovered. We do use the scientific method thinking that we're going to make some contribution to some greater truth. Now, of course, truth can change. Right? What was truth in science 300 years ago may need updating. That's why we talk about provisional truths in science. But the epistemological attack on truth – the fact that Left or some Leftists negate even the possibility that truth exists – that strikes me as profoundly more nefarious as an idea pathogen than anything coming from the Right. Do you follow what I'm saying?

Dan Ferris:                 Yeah. When you discuss epistemology in that way, it reminds me of things that I and Rand used to write about that same topic.

Dr. Gad Saad:            Right. And let me just add to the point about the epistemology of truth. The scientific method is the only game in town. The scientific method is exactly what frees us from the shackles of our personal identities. There is no Lebanese/Jewish way of knowing. There is no indigenous way of knowing. There is no fat person way of knowing. There is no transgender way of knowing. All of those identities are left at the door when you enter the arena of the scientific method. That's what makes epistemology of the scientific method so great and so liberating.

So when you have someone, for example, in Quebec – so the Quebec minister... I discussed this in The Parasitic Mind. I think it was the Quebec minister of the environment or something. They were having a conversation about, you know, doing environmental studies before you do something. And he said, "Well, what do you mean? Isn't the scientific method the only way by which we're going to adjudicate these decisions?" And he was considered a vile – I mean, you couldn't tell that he wasn't Hitler because he was arguing that, "We shouldn't be going to indigenous way of knowing. There's only the scientific method." Now, let me explain. If the indigenous people have been living in a particular land for 10,000 years, then of course they have fauna-specific and flora-specific knowledge because they have lived in that land.

So we can go to the indigenous folks and say, "Since you have lived in this ecosystem, please teach us about the fauna and flora of the land." But the process by which we uncover truths within that ecosystem is the scientific method. There is no booga-booga. There is no ancestral praying to the ancient gods as an alternative to the scientific method. So once you start allowing for multiple ways of knowing, you're an intellectual terrorist, and all this nonsense is coming from Leftist imbecilic professors. If only I was a bit more direct in my language. I feel like I'm too shy. You know?

Dan Ferris:                 [laughs] You are. You are. But what do you really mean, Gad? Come on.

Dr. Gad Saad:            Yeah. Exactly. Exactly. I need to be a bit less...I know. I know. I need to find a way to come out of my shell and be a bit less cryptic. I'm working on it. I'm working.

Dan Ferris:                 Okay. It's a process. Right. Yeah.

Dr. Gad Saad:            It's a process. Exactly.

Dan Ferris:                 One of the points that I noticed that you make in the book is – in your final chapter – is a call to action. And you really believe that there...oddly enough, you believe that the world needs more people like you. [Laughs] And I wouldn’t disagree with that. But, you know, I'm not a – let's just take me or, you know, anybody. But we'll pick on me. Like, I'm not a – I'm not a professor of evolutionary science. And what on Earth do I know? Who's going to listen to me talk about reason and truth?

Dr. Gad Saad:            Right. I got you. That's a concern that I often receive from people. Right? They write to me, "Hey, professor. I really want to get engaged. But, you know" – like you said – "I'm not some fancy professor. I don’t have a large audience." And I tell them, "Look. It's trench warfare. Right? It's house-to-house. It's trench-to-trench. Some of us have big platforms. Great. We use that. But you don't have to have a big platform to contribute to the battle of ideas. Your professor says something that is insane, challenge them politely.

Someone says something on Facebook that you disagree with, engage them politely. You hear something happening at the pub that you think you might weigh-in on? Don't refrain from doing so. And usually, there's a couple of reasons why people refrain from doing so. "Well, if I weigh-in, I might lose their friendship." Well, guess what? If their friendship is not sufficiently anti-fragile – to use my friend's Nassim Taleb's point...if our friendship is not sufficiently anti-fragile that it could withstand the stressors of us disagreeing about some important point, then you know what? Don't let the door hit your ass on the way out.

I don't need friends like that. I prefer to have two really good friends that I can have deep, meaningful conversation with than a bunch of, you know, cowardly, castrated morons who are going to be completely triggered because I say something that is contrary to them." Right? So in other words, any of the concerns that people propose to justify why they don't speak is ultimately – and I'm sorry to say – a measure of their cowardice. So people write to me and say, "Professor. You know, nobody can go after you because you're too big at this point. Nobody's going to risk coming after you." But in my case, I'm going to lose my job, my girlfriend's going to leave me" – whatever. All kinds of reasons.

And then, I tell them, "Hey. The guys who were 18 years old who landed on Normandy beaches knowing that they had an unbelievably high chance of being squashed like little mosquitoes by the German machine guns... did they seek safe guarantee before they did it? You and I are talking today on this podcast because those guys said, 'Yeah. Sign me up. I'll go and land on Normandy.'" And usually, that kind of wakes them out of their cowardly stupor because it then contextualizes their fears.

Look. I grew up in Lebanon where at any second I didn't know if I was going to be executed, blown away, shot by a sniper, stopped at a road block and executed. That was my childhood reality until we escaped. So boo-hoo-hoo about you're going to lose a friend or your boss might be upset at you. We all have a cross to bear. And the question is, "Look. Don't be an unnecessary martyr, but don't also subcontract your voice to others." Don't say, "Don’t worry. Gad Saad has this on my behalf." If everybody were to speak out against these idea pathogens, we will win the battle of ideas very quickly. If everybody stays silent – you know, cow in their apathy – then we will lose this battle.

It's really as simple as that. That's why I tell people, "Activate your inner honey badger." The reason why I use the honey badger in my call to action is because, for any of your viewers who are unaware of this, a honey badger the size of a small dog is so ferocious that if six adult lions come after it, they retreat. How could that be possible? How could six lions retreat from a small-looking dog? Well, because it is extraordinarily fierce. And so, what I tell people is, "Be a honey badger when it comes to defending your principles." If your principles are rooted in clear, well-reasoned arguments, then become a honey badger. It's as simple as that.

Dan Ferris:                 And maybe, Gad, in the next edition of the book – which I'm sure is going to be wildly successful – maybe in the next edition I would just put a little section about handling death threats. [Laughs] Maybe just for the call to action.

Dr. Gad Saad:            That sounds like a good idea.

Dan Ferris:                 I probably shouldn't make light of that. I don't mean to. I know that you've suffered quite a bit with that. but I couldn’t help myself.

Dr. Gad Saad:            No, don’t worry about it. By the way. I should just mention. Just to kind of, you know, leave that story on a happy note it has been several years since I last received a death threat. So it's certainly been a lot less stressful recently. Although, I often joke – although I'm sort of somewhat not joking – the scariest folks in terms of those who have come after me is what I call the tofu brigade or the tofu Taliban. These are the folks who get unbelievably angry when I post a photo signaling my love for animals but then, on some other day, I post a photo where I'm not only eating celery and tofu.

And because of that, quote, "Moral inconsistency," I'm a Nazi, I'm a fraud, I'm Hitler, I'm an imbecile, you know, "We should put you in a cage to where we put" – and of course, I'm not making light of the fact that animal farming, the way that they treat animals, is grotesque. It is vile. But I also say that it is simply evolutionarily implausible to seek the objective of having all humans reject animal protein from their diet. So there is a way by which we could greatly increase our moral treatment of animals, and I truly do believe in an evolutionary sense that they are animal cousins. But we don't have to only eat celery and tofu. And so, I jokingly say that even scarier than the Islamists who come after me are the tofu brigade. But I'm almost not joking because they can be pretty nasty. Let me tell you.

Dan Ferris:                 Oh, yeah. Yeah. You're telling me. I remember stories – I mean, these are... similar to the folks who – they wanted to protect various species, and they go to the fashion runways and throw blood on people when they were wearing fur and all that kind of stuff. They're vicious.

Dr. Gad Saad:            Exactly.

Dan Ferris:                 Yeah.

Dr. Gad Saad:            And by the way. And that speaks to what we mentioned earlier, right? When you asked me about, "Why do I use satire?" And I said, "Look. There are different persuasion strategies that I take out of my tool box depending on the context." Well, one of the things that I've tried to argue with the vegans who were, you know, sane enough to kind of interact with me without being hysterical is that the reality is, I'm on your side.

I seek the same goal as you, which is to try to greatly reduce animal cruelty and animal suffering. Because we truly treat them as these commodified, non-sentient beings. It's grotesque. What I'm arguing to them is, your message is not well-structured. As someone who studies psychology of persuasion, you're not going to convince people the way that you're doing it. Modulate your message better and hopefully you can have greater success.

Dan Ferris:                 Yeah. That makes sense. I want to go back to something, though. We were talking about – we were talking about engaging your reason versus engaging your emotions. And I had a question about that. When you say, you know... it sounds like you're telling me, "It's my choice. I have to know. I have to know when it's appropriate to engage my reason, when it's appropriate to engage my emotions. And I have to manage the interaction between them as well." Does that mean, Gad, that when I get my feelings hurt it's kind of my fault?" Am I taking that too far?

Dr. Gad Saad:            Well, no. I mean, listen. If I say something to you that is hurtful to your ego, now – right – then the blame is on me. Right? I could've walked away from insulting you. And so, no. It's not always the case that just because someone has hurt your feelings you should internalize it as being due to you. But by the way. This speaks to a really important distinction that I talk about in the book, the difference between the antilogical ethics and consequentialist ethics. So deontological ethics would be an absolute truth. So for example. It is never correct to lie. That's an absolutist statement. It is a deontological statement.

A consequentialist statement would be, "Well, it depends when you should lie. If you lie to protect the feelings of someone because it wouldn’t have made sense to tell the truth and hurt their feelings, well then maybe the consequences are okay for me to lie." So if you – I say in the book that if your spouse says to you, "Do I look fat in those jeans," and you want to have a long, happy marriage maybe you lie and say, "No. You look beautiful, sweetie." Right? So it's not so much that the antilogical ethics is always right or consequentialist ethics is always right. It's that depending on the context will determine which ethical vent I should follow.

But here is the key: provisional. When it comes to matters of truth with a capital-T, then it should never be consequentialist. See, what the Leftists do is they say, "Look. We want to institute some social justice goal. And in the pursuit of that social justice goal, if we murder truth, well then that's just one of the consequences of the higher goal of pursuing justice." So for example. Transactivists will engage in insane rejection of reality because that rejection of reality allows them to pursue the laudable goal of protecting transgender people. Well, guess what? I am ultra-socially liberal, and I'm a strong supporter of trans rights.

But, no, I don't believe that boys too can menstruate. And, no, I don't want my children to be taught that sometimes boys menstruate, and sometimes girls menstruate. For example. I shouldn't have had to go in 2017 to testify in front of the Canadian Senate that, "No. No. Really, Senators. As an evolutionary psychologist, I can attest there is such a thing as male and female." That doesn't make sense at the 21st Century. So in other words, I can walk and chew gum at the same time. In the pursuit of social justice, I don’t have to murder truth.

Dan Ferris:                 Well said. Well said. Gad, we actually reached the end of our time, which I feel like we've just gotten started. There are so many other things that I wanted to talk about that I did manage to read in the book. But maybe we'll talk about them another time. And I wonder, Gad, if you could leave our listeners just with one thought today – besides buy the book. I’m going to tell them to do that. I will tell them to do that because what I've read so far, I love. If you could leave them with one thought today, what might that be?

Dr. Gad Saad:            So I would say that what made the West the anomalous, wonderful experiment that it was – and I am almost speaking in the past tense – is that it had a set of values, a set of approaches to adjudicating truth to glorifying individual dignity, to rejecting identity politics, to supporting freedom of speech. It had a set of, you know, values that served as a protective belt that rendered the West to be the truly anomalous and unique human...and the reason why I say anomalous is because throughout human history, the freedoms that are enshrined in the West – the enlightenment that is enshrined in the West – is not something that is a common feature in human history. It's truly an anomalous reality.

And as someone who comes from the Middle East, as someone who has escaped identity politics when taken to the extreme, who has escaped superstition, who has escaped vile hatred of the other – in this case, I was the other – it breaks my heart to see that we are now regressing. Ideas that we defeated through the scientific revolution and through the enlightenment are now the ideas that one of the two political parties in the US – and certainly in Canada – is the central feature of their platforms. And so, what I would ask people is, think carefully before you cast your votes. I'm not telling you how to vote.

But don't vote for a party because – by the way. You don't know how many people will say, "Well, I vote Liberal" – in Canada, that is – "because I'm a Liberal person." I mean, are you really that natural lobotomized? That's how you vote? Well, I'm not a conservative person. Therefore, I don't support the Conservative party. But most people are intellectually lazy. That's the type of, quote, "Thinking," that they use in arriving at decisions. So take your time. Get to know the positions. Arm yourself with knowledge and then hopefully make the right decisions to hopefully protect the West for your children and theirs.

Dan Ferris:                 Excellent. Thank you for that. And I really, truly mean this. I really hope you will come back and talk with us sometime again.

Dr. Gad Saad:            Thank you very much. It was a real pleasure talking to you.

Dan Ferris:                 Well, I have to tell you. That was really exciting and interesting for me because I do really think... I think Gad Saad, Nassim Taleb, and I've talked about Jordan Peterson, too. I think they're like three of the greatest intellectuals of our time. And in some ways, all of a piece. But they all have their own ideas. And I'm just [laughs] thrilled that I got one of these three guys on the program. And I hope you are, too. And I'm sure with all that talk about the Left and the Right that we're going to get plenty of e-mails. So, you know, let them fly. [email protected]. You know, tell us what's on your mind. Right? And investing or whatever is on your mind, I always say.

All right. Speaking of which, let's go check the mail bag right now. [Music plays and stops] Hey, guys. I want to tell you about a setup in the stock market that I think could grow huge wealth for you like for decades to come – maybe for the rest of your life. I've seen it happen three times since 1991. Every time it's been a huge opportunity that made people tons of money. And, you know, as you know I'm a value investor. Okay? So it's a value-type opportunity. And I found this one stock that I think it's really the best way to take advantage of it. It's a fantastic business. I bet you've never heard of it. It's a fairly big company, but I bet you never heard of it.

And I think it could make you literally as much as like 16 times your money if I'm right about this. And pretty close to that even if I'm not completely right. I made a whole video about it. And I shared the story about how I grew my own wealth using this exact same opportunity. And parts of the story are very personal and a bit embarrassing. And it made me a little uncomfortable to put it on video for the whole world to see, but it's there. And you can see it if you go to www.investorhourvalue.com. Once again, that's www.investorhourvalue.com. Check it out. [Music plays and stops]

All right. In the mail bag each week, you and I have an honest conversation about investing or whatever is on your mind. Just Send your questions, comments and politely-worded criticisms – please – to [email protected]. I read every word of every e-mail you send me, and I respond to as many as possible. This week, we got some good stuff. First one is from Jim M. Jim M. And he says "Dear Mr. Ferris. I continue to be amazed at the interesting and very informative guest that you interview. Keep up the good work. I also like your rants very much." Thank you, Jim.

He continues. "Recently, some Stansberry editors have suggested buying emerging markets ETF to diversify out of the U.S. dollar. One of my portfolios is hugely overweight in mining stocks. That includes many junior gold, silver mining companies. The majority, though – not all – are headquartered in Canada. In my U.S. brokerage, I hold these stocks either as ADR's or dual-listed on U.S. exchanges, or they are traded on over-the-counter markets. My question is, since all of these foreign-based companies held in my account are traded in U.S. dollars, does it qualify as diversification into a foreign currency? Would I be advised to reopen my old Canadian accounts and transfer them back to Canada? Sincerely yours, Jim M."

Okay. So I can't give you individual advice. But I took the question because here's what I've noticed. And I'm just going to leave it at this. Because like I said, I can't get into too much individual advice. What I've noticed is that they trade differently in different currencies. Right? People will take my advice and buy a Canadian-listed...or, Canadian-based company. But they'll buy it over-the-counter in the United States, and they'll say, "Hey. This thing doesn’t perform very well even though the Canadian thing, you know, performs kind of decently or whatever. And they'll notice that they perform differently. And they do perform, you know...the currency is a piece of that puzzle.

So the U.S.-listed share is going to be, you know – tend to be weaker when the dollar is stronger. The Canadian share is going to tend to be weaker on the Canadian dollar, and vice-versa. Right? In both cases. So I have noticed that, and I'm going to – Jim, I'm going to have to leave it there because I don't want to say too much that could be misconstrued as individual advice. That is what I have noticed as I've tracked Canadian-based companies listed in U.S., in the pages of Extreme Value. Thanks for the question. Very good question. April writes in – April's written in a couple times. Nice to hear from her again.

She says, "Have a question. What do you think about Ray Dalio's all-weather portfolio?" This is Ray Dalio of Bridgewater Associates – biggest hedge fund in the world. April continues. "The portfolio is allocated as 30% stocks, 15-% intermediate U.S. bonds, 40-% long-term U.S. bonds, 7.5% gold and 7.5-% commodities. Do you think this is too aggressive or conservative? Does this sound like something that would be a good allocation at this time? Sorry you may not be able to answer in detail, but does this sound like a reasonable allocation? Keep safe and well, April." I can answer because this is all about Ray Dalio. And whatever you do with it is whatever you do. So I will talk about what Ray Dalio is doing.

And to me, what I see when I look at this is...you said 30-% stocks, 15-% intermediary U.S. bonds, 40-% long-term bonds. That sounds like 85-% stocks and bonds to me, and then 15-% gold and commodities split evenly between the two. I mean, he's making an assumption here when he calls this all-weather. He's assuming that the bond part of the portfolio is going to protect you maybe when the stocks aren't doing so well. And, you know, historically-speaking if you go back farther than the last 20 year or so years – and Chris Cole at Artemis Capital has done this work, by the way – you notice that stocks and bonds actually... they correlate positively a lot of the time. When they correlate negatively, that means like when one goes up, the other goes down and vice-versa.

So, you know, the bonds protect you. They go up when the stocks go down. They protect you. So that's why you can call this all-weather. But I don't take it for granted that this is going to continue. And I don't take it for granted that stocks and bonds are going to correlate negatively I think they could easily correlate positively – especially during a time when I believe the Federal Reserve is... they're exercising their last resort, which is debasement of the currency to fix the, you know, financial ills that they perceive.

You know, I'm not crazy about that portfolio. I’m not crazy about that allocation. I'll leave it there. Good question. Aiken C writes in, and he says, "Dan. Love your Investor Hour podcast. They've been particularly insightful recently." Well, thank you, Aiken. "I also want to thank you for Extreme Value. There is a wealth of knowledge there. There is one recommendation that confuses me, however – Altius Minerals, which we had Brian Dalton, CEO and Co-Founder of Altius Minerals on the program a while ago."

And Aiken continues. He goes, "Great business model, et cetera, et cetera. There is reason to believe it is not firing on all cylinders; ten years of up and down price movement, going nowhere. My due diligence caught me by surprise when in an interview the CEO speculated taking Altius private. I sold immediately. But back on March 23 at the 10-year low thereabouts and since earned an 85-% return. I bested the 10-year average by 10 times over the last few months. I want to get back in. It's drifting lower again. I wanted to be a buy and hold, but I don't know. Do you still believe in Altius?" Again, Aiken, I can't give you advice here. But I want to address this idea that he speculated taking the company private. People talk about this stuff all the time. It doesn’t mean they're going to do it.

They've talked about taking the company private. He's talked in public about maybe listing it on a U.S. exchange. I mean, if you're going to take it private you don't bother going through the hassle of listing on a U.S. exchange. So I don't know where they are with that right now because it'll... I assume – one or the other of those things will be public information at some point. But, you know, to answer your question all I can tell you is that the stock is still in the Extreme Value model portfolio. It's still rated a buy. Good question. Thank you. I get a lot of questions like that about Altius.

Kristin M writes in. And thank you, Kristin, for a very long, thoughtful e-mail. I read every word of it, but I can't include every word of it in the podcast for time reasons. But I'll start where you said, "I felt the takeaway," and she's talking about the episode a couple episodes ago with Andy Furman – the options trader. And she said, "I felt the takeaway from the investment hour was leaning a little on the, 'Don’t touch options. They're too confusing and risky,' side. I also trade options around your recommendations and others within the Stansberry family." And then, she talks about some of the things she does.

And then, she says, "I apologize if this sounds like a kudos-to-doc letter" – meaning Doc Eifrig, because he makes a lot of really good options trades. "I have continued"– she continues. "I have continued to use your recommendations to trade options around with great success." Then she talks about some Extreme Value stocks where she's trading options and doing well. "P.S. I always enjoy your commentary at the beginning and end of the show. Getting fired up is a good thing. Keeps us alive and thinking about what we know and don't know with admiration and gratitude. Kristin M." Thank you very much, Kristin M. I appreciate it. I just want to address the Doc thing. Look. A kudos-to-doc letter is okay with me because Doc is brilliant. And he gives great advice.

So fire it up and write in about Doc all you want. We'll get him back on the program soon. I promise. Because we love talking to him. He's got a lot of good stuff to say. Finally, we get to Gary K. And I have to thank you, Gary, because you corrected me and quite rightly so. And you did it in a very thoughtful and thorough manner – which I appreciated – and you gave me a chance to brag about one of the things that I hope people love about the show; which is, when I'm wrong, I don't hide it. I come back and let you know. And so, one of the things I was wrong about, Gary says, is – he says, "I humbly submit that a better answer" – he's talking about when I discussed closed-end funds on the last podcast.

He says, "I humbly submit that a better answer after relating the anecdote would've been to say that, 'You are not familiar with closed-end funds,' and possibly refer the writer to Thomas Herzfeld's books as he was seemingly the Godfather of closed-end fund analysis. If you're curious," he says, "take a look at Blackrock's stable of closed-end funds. It's pretty amazing compared to the funds from, say, 20 years ago. I've been in the investment business and world since the early '80s and have been surprised about how much I had to learn, especially given that I had significant business experience with ETF's and open-end funds. Cheers, Gary K."

Spot-on, Gary. I should've just left it at the anecdote and left it at that. You're absolutely right. And you're right, too, because I was coming from a place of thinking that closed-end funds hadn't changed that much in 20 years. Because I thought, "Well, how much could they?" Right? But they have. In my defense, all I can say is I did emphasize that... to the listener who wrote in that there was no – I was wrong about the...you discussed the issue of discounts. I was wrong about why they traded premiums or discounts. That's a much more complex topic than I made it out to be. Much more. And as you pointed out, I was just plain wrong about it. But as I pointed out to the listener who wrote in, there's no general rule. You got to analyze each one from the bottom up. Which you kind of did some of that in your E-mail, which I really appreciated.

So thank you, Gary, for the opportunity and for writing in and being so thoughtful. And great E-mail. I love this kind of stuff. All right. That's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as I did. Do me a favor. Subscribe to the show in iTunes, Google Play or wherever you listen to podcasts. And while you're there, help us grow with a Rate and a Review. You can also Follow us on Facebook and Instagram. Our Handle is @InvestorHour. Also Follow us on Twitter where our Handle is @Investor_Hour. If you have a guest you want me to interview, drop me a note at [email protected]. Till next week. [Music plays] I'm Dan Ferris.

Announcer:                 Thank you for listening to this episode of the Stansberry Investor Hour. To access today's notes and receive notice of upcoming episodes, go to investorhour.com and enter your E-mail. Have a question for Dan? Send him an E-mail. [email protected]. This broadcast is for entertainment purposes only and should not be considered personalized investment advice. Trading stocks and all other financial instruments involves risk. You should not make any investment decision based solely on what you hear. Stansberry Investor Hour is produced by Stansberry Research and is copyrighted by the Stansberry Radio Network. [Music stops]

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