In This Episode
Porter’s back in the studio with Buck as they dig deeper into the James Damore Google memo with a unique insight that underlines what most people are missing about workplace diversity. Buck gives his ex-CIA perspective on the nuclear weapon tantrum throwing between North Korea and Donald Trump. Porter reveals the one stock you can play to profit from the death of the traditional retail sector…and it’s not what you think. An interview with Agora Publishing founder and best-selling author Bill Bonner brings to light the two greatest things that Porter ever learned about growing and building any business.
Announcer: Broadcasting from Baltimore, Maryland, and New York City, you're listening to the Stansberry Investor Hour.
Tune each Thursday on iTunes for the latest episode of the Stansberry Investor Hour. Sign up for the free show archive at investorhour.com. Here are the hosts of your show, Buck Sexton and Porter Stansberry.
Buck Sexton: Welcome, everybody, to another episode of the Stansberry Investor Hour. I'm nationally syndicated radio host, Buck Sexton. And, of course, CEO of Stansberry Research, Porter Stansberry back with us now.
Porter Stansberry: Hi. Glad to be here. Had a fantastic week fishing last week in the White Marlin Open. We made it back to the weigh station. So we caught one of the top ten tunas that was caught during the tournament. Unfortunately, once again, we didn't win any money.
Buck Sexton: How big was the winning …
Porter Stansberry: The winning tuna was 68 pounds, and mine was 51 and a half pounds. But getting to the weigh station is actually … at a tournament this size … is a pretty good accomplishment. My crew now, we've now been to the weigh station five times in three tournaments. So that's a pretty good track record. And we'll get there eventually. What's interesting is the tuna that I caught two weeks ago would have been the winner. I caught about a 100-pound tuna, practicing for the tournament. If I had just caught that tuna a week later, we would have won a million dollars. But we didn't.
Buck Sexton: A million dollars for catching a fish.
Porter Stansberry: For a fish.
Buck Sexton: Pretty fantastic if you could pull that one off.
Porter Stansberry: Yeah. It's amazing. Here's the good news. I caught a 100 pounder, a 50 pounder, and we caught a 40 pounder. And none of them won me any money, but I do have a lot of tuna in my fridge.
Buck Sexton: Nice. I actually love tuna, so maybe I'll come down. Sashimi.
Porter Stansberry: Yeah. Country Club Guy, if you want some Sashimi, come over.
Country Club Guy: It's all gone already. I had tuna tacos last night, and Sashimi before the meal.
Porter Stansberry: Yeah. Come get some more. I've got about 40 pounds in my fridge right now.
Country Club Guy: Buck, come on down. I'm gonna need some help.
Buck Sexton: I'm gonna make it happen.
Porter Stansberry: So Buck, listen. The people here didn't come to talk about fishing or the tuna in my freezer. They want to talk about what's moving the markets, how to be better investors, and then right now, they want your help, Mr. National Security Specialist. What the heck? Is North Korea bombing us or not?
Buck Sexton: Nah, they backed off, which, of course, the Trump people are gonna be viewing as a victory of Trump's bombast, or his straight talk, depending on how you want to frame that one. North Korea is an intractable problem. It's amazing to hear so many people going on TV who haven't even done a very basic level of research. And they're trying to influence the conversation at a national level as to what should be done there. This idea that if we just turn up the pressure a little bit, the Kim Jong Un regime, and the Kim crime family that runs that country would somehow decide to just, to comply is crazy. It's never gonna happen, because they view nuclear force as the apex of what is a hyper militaristic country, and they recognize that the moment … in their point of view, Porter, they look at Iraq, they look at Iran, and they look at themselves. And they're like, "Well, Iraq already got taken out. Iran knows that they better get to nukes fast or else they'll get taken out. We're learning form the mistakes of other regimes." So we're gonna continue to have to look at this problem and deal with it. I will say that Guam had a huge bump in Google searches, by the way, which is in part so people could find out where is Guam? And I think a lot of folks realized, "Guam is a US territory," which is fun. And also, there may be a … Trump said something about a surge in tourism. Guam, as it turns out … I don't know. Are you a diver? Because it turns out Guam is actually quite beautiful and has some great reefs.
Porter Stansberry: I am free diver. I've done plenty of scuba diving earlier in my life. But I don't really like breathing the compressed oxygen. It's very dry, and it irritates your esophagus, and I just don't like it. I'd rather just hold my breath. And I've been training with these guys to get better and better at it. I'm about two and a half minutes now. The guy that I train with, he's over five minutes in free diving breath hold.
Buck Sexton: What keeps me from diving is also complicated. It's sharks.
Porter Stansberry: [Laughs] Well… I have a spear in my hand, so they stay away from me. But it really is a beautiful thing. I can get down to the 50, 60 foot range no problem. And it's really quiet and peaceful, and you don't have a tank on you, and … it's my latest passion and hobby. And it's good to eat, too. Spear fish, have a great time. No tank. Nothing in the way. But it's pretty physically intense. You gotta really work on your mind to not breath for two minutes.
Buck Sexton: Yeah. Well, the good news is, Porter, that you came back, and the nuclear standoff with Kim Jong Un for now has ended. Guam is no longer officially
Porter Stansberry: The North Korea thing is pretty amazing. What I can't quite figure out about it … maybe you can answer the question. You've studied psychopathic, totalitarian leadership regimes more than I have, probably. What is he getting out of this? I know he has to have the nukes because he's afraid of getting pounded by the Americans, again. I get that. But, you don't have to … you can have the nukes, but you don't have to deliberately antagonize the American regime, do you? What's the point of that? You'd think that …
Buck Sexton: Oh, he gets so much.
Porter Stansberry: But wouldn't you think that …
Buck Sexton: He gets so much out of it, Porter.
Porter Stansberry: What's the life expectancy of dictators that thumb their nose at the U.S. military? It's not very good.
Buck Sexton: Well, I think it depends on who you ask.
Porter Stansberry: What happened to Noriega? What happened to Gaddafi? What happened to Saddam? We murder all these guys. Sorry. Not murder. What's it … non-judicial killings. [Laughs]
Buck Sexton: We have democracy promotion around the globe as a foreign policy. But for every Noriega or Saddam you show me, I can also show you a Fidel Castro, or a Theocracy in Iran. So, it depends. We're not getting rid of Putin anytime soon. But you ask what the North Koreans get out of it, and why Kim Jong Un takes the positions that he does. They have been engaged in this behavior, which is effectively nuclear weapon tantrum throwing, meaning that they act out, and the international community gets very nervous and very jumpy. And then we come together. We say, "Okay, okay, look. We all want to avoid war, right? So let's talk about this." And then we give them food aid. We take pressure off the Chinese, which is 80, 90 percent of their external trade, to continue trade with them. So, their bad behavior has been rewarded for a few decades now, really stretching back to the Clinton administration and Madeleine Albright's overture as Secretary of State. And, right now, as they see it, they keep getting what they want out of this. And, by the way, their missile programs keep getting better, their nuclear miniaturization is more and more of a threat, and so they're winning on this side. They think that … oh, and by the way, their whole ideology … and North Korean ideology is a discussion maybe for another podcast another day. There's a book called The Cleanest Race that I've been recommending to people, about just how fascistic totalitarian and deeply, deeply racist North Korea is. We don't usually think of it in those term, but it really is. It is a hyper militaristic, hyper racial state. They think, Porter, they're gonna reunify the Korean peninsula through force. That is the ultimate goal of the state. It's actually its reason for being. So, once you start thinking about it in those terms, it gets pretty scary. But that's my North Korea rip for this week. No nuclear war, though, is the good news.
Porter Stansberry: One of the things I do like about Korea is you have this fantastic juxtaposition between what can happen in a free society, where you have capitalism, and what the ultimate end game is for any state-led country. The state succeeds at causing war and poverty. North Korea has both. And then the south has become, from one of the poorest countries in the world in the 1950s, to 50 years later, one of the probably … what? … top 20 economies in the world, maybe top 10? Seoul is one of the largest, most prosperous cities in the world. And this happens anywhere in the world people have the rule of law, the right to private property and capitalism. It's just … I love how clear that is. There's a line. And it's exactly the same people. Same genetic makeup. This isn't about racism or anything like that. It's just a matter of culture. It's a matter of capitalism. It's a matter of freedom. And it's a wonderful thing. And where's the north gonna go? The people in the north, about what, every ten years they have a huge famine and everyone has to send them food. When are they gonna wake up and go, "Hmm. Maybe there's a better way."
China woke up in the 1990s and took off. And so, it could happen in North Korea, too, but I don't think it's gonna happen because we throw them out. I think it's gonna have to happen because of the people there decide that they want something different.
Buck Sexton: In all the academic studies of totalitarianism … and I actually have some on my shelf over here, if you're ever curious for some beach reading … the most, the biggest threat, the highest percentage threat to a totalitarian or authoritarian regime is over the last 100 years or so, people in the inner circle of the tyrant. That's actually how you're most likely to go. External invasion is about 25 percent, and people around you is more like 30 to 35 percent. So, it's much more likely that someone …
Porter Stansberry: Yeah. You have to have somebody in the regime who wants to have their country succeed, instead of continuing to live in a cave in the dark ages.
Buck Sexton: Yeah.
Porter Stansberry: But listen. Let's talk about the dark ages in America.
Buck Sexton: Oh my.
Porter Stansberry: Why in the hell did it take three days for President Trump to say, "Boy, racism is really terrible, and we shouldn't have it in America?"
Buck Sexton: I don't have a good answer, other than I think that Trump has gotten used to not doing what the media wants him to do. But other than that, if you actually look at the full statement in its totality, he said, "We condemn in the strongest terms," the problem wasn't that he didn't condemn racism. It was that he said, "on many sides," which the moment you're talking about neo-Nazis, people walking around with swastikas yelling, "sieg heil," and "white power," or … they were yelling other stuff, too. I forget what all the different slogans were … and you don't just focus in on that, people are gonna jump all over you and say, "Why are you creating an equivalency here?" The problem is, there are protesters that were there, counter protesters, and there were antifa elements there, as well. Antifa elements were also violent. They were hitting people with bats. They were punching people, doing stuff like that. But it was only one side that actually killed people and tried to kill a whole bunch of people, and that's the neo-Nazis and the white supremacists. And so, Trump made an error of … a fallacy of equivalency, which is a fancy way of saying he messed up, which is why he had to do it all over again. As to why he messed up, I don't know, Porter, your guess is as good as mine.
Porter Stansberry: This is a layup. There is not going to be an easier decision that any President is ever asked to make. "Hey. There was a big fight between a bunch of neo-Nazis and a bunch of liberals. And the neo-Nazis killed a bunch of people, or tried to kill a bunch of people, and did kill someone. You gotta come out and say, 'I abhor violence in America. Yes, everyone has the right to free speech. But as a country, we reject completely any kind of hate message, any kind of racism, any kind of that nonsense.'" Let's face it, these folks who continue to believe in this culture of violence and hate, they are 150 years behind the curve. These are real Neanderthals. You can't stand with them or anywhere near them without getting tarnished completely. And this is an easy, quick decision that he shouldn't have had to think about.
Buck Sexton: Yeah.
Porter Stansberry: Yeah.
Buck Sexton: So, look, there's a reason he did it. How many times have you seen Trump come out and take a second bite of the apple, take a second swing at the piñata on something like this? This the first time I've ever seen it. So clearly, they know that they didn't hit it.
Porter Stansberry: I really can't ever recall seeing a President do something more bone-headed than this. Blaming both sides. If he wanted to say something about, "Look. I abhor the violence. And in America we do believe in racial equality. Absolutely we do." His second statement was very clear about all that. He could have also said, "We also believe in free speech. And if you're gonna have the first amendment, then sometimes you have to be tolerant of hearing messages that you abhor. Otherwise, we wouldn't have to protect that speech, right? If everyone agreed, then there would be no problem. No one would be persecuted for their speech."
Buck Sexton: Yeah. There was a Supreme Court case about Skokie, Illinois, and Nazis marching. This has been long established, that the worst people get to speak, too.
Porter Stansberry: That's right. Exactly. And I think that, as an American, you can say that without having any kind of backlash. You can say, "Look. It's very important as a country that we have compassion, and that we have tolerance, even if we abhor the message, because the only way you're gonna change those people is by letting them vent their evil spew and go home. And then finally they're gonna realize that the way you're behaving is a heck of lot better than what they're getting out of life, and they or their kids are gonna come around. If you hit them with baseball bats, and try and … and don't let them protest when you're taking down their statues, well now they've got a good reason to hate you. And now they can teach their kids, "See, look. We're oppressed. Those people are oppressing us. They won't let us. They won't let us speak." So all you're doing is promulgating the problem if you show up in Charlottesville and you protest their speech and you throw things at them or hit them with baseball bats or whatever. Just let them have their [day] … just ignore them.
Buck Sexton: Yeah. And now, by the way, some universities have been canceling this guy, Richard Spenser, who … The media is inflating this guy's profile, and making it seem like he's got a lot more supporters than he does. He's the most well known white nationalist in the country. He's outspoken about it. He's a white nationalist. He is almost, I think, most famous for getting punched in the face during a live, on-camera interview by one of these antifa, which are these anti … they call themselves anti fascists, but they think that they should wear all black, engage in street battles, and shut down speech. But Spencer has events that he plans across the country. And some of them are being shut down, now, in state universities, publicly funded spaces. And now you're gonna get into what you're talking about, which is people are gonna say, "Hold on a second. Why can't we hear the message?" It's much better for the message to be out there and people to say, "These guys are jerks, they're clowns, they're imbeciles," and ignore them than to say, "Oh, no. This is too … the message is too hot for you to hear. It's too potent for the people to be exposed to this." That becomes the mentality with some folks, which is dangerous, because then, all of a sudden, they can draw more recruits to the banner. And I think you may see some of that.
By the way, you also have a lot of statues that … it was all over the Robert E. Lee statue, and in Charlottesville, there have been some statues pulled down in the last 24 hours. Even without, Porter, getting into the specifics of which statues they're pulling down and which ones they don't, let me just throw a few things out there. The Washington Monument. What are we gonna do about that? [Laughter] Yale University. Yale University. Elihu Yale, not well known, was a slave … he was a slave trader.
Porter Stansberry: Right. Slave trader. Yeah.
Buck Sexton: The guy that Yale University is named …
Porter Stansberry: Well, we gotta tear down Yale, then.
Buck Sexton: Oh, but see, isn't it so interesting that with the Redskins, it's they better change their name. I think they even bleep Redskins on some TV channels now, like that's a profane word. So you've got a sports team. They're supposed to change their name, and people say, "Well that's … it's brand infringement." This went, actually, to federal court. You have federal court saying they won't offer copyright protection for the Redskins logo. Meanwhile, okay, we're gonna play this game. Yale University's value is, in fact, the name. It's just a university like a lot of other universities. The value is the name brand recognition. It's a multi, multi, multi-billion dollar corporation, really. They don't think of themselves that way, but that's what it is when you look at the endowment. They're not gonna change that name. Named for a slave trader, everybody.
Porter Stansberry: Here's what I can't figure out. This is just me. Who gives a fuck what statue is up anywhere? There's nobody in the United States who's worshiping racist political leaders. Right? There's is no giant political organization that has rallies four times a year, and we're carrying swastikas and marching up and down. This is … America is the most racial diverse, tolerant country in the world. There is very little … zero race-based violence in this country. There aren't any lynchings. Everyone goes to school together peacefully. Are there isolated incidents? Are there times where racial tensions are inflated? Sure, of course. But generally what happens is the poor black people in this country kill, murder, and burn their own neighborhoods. It's not white-on-black crime that's a problem in Baltimore. It's black-on-black crime.
Here's what I'm gonna say. Instead of worrying about the damn statue, fix your neighborhoods. Stop shooting each other. The problem in the black community is not that there's a slave trader named Yale 200, 300 years ago. The problem in the black community in Baltimore … and I'm speaking for where I live. I can't speak for the rest of the country … is not that there's a statue of Robert E. Lee in one of the squares in the city. If you asked 100 people in Baltimore who that statue is of on top of the horse, not one of them would know who he is. They would not … I can't even tell you which statue is Robert E. Lee, and which statue is Stonewall Jackson, and which statue is Andrew Jackson. I got no idea. No one cares. This is not an important issue. This is a media created issue, and it's not doing or solving anything in our country. It's a gigantic waste of time. And the funny thing is …
Buck Sexton: Yeah. I just don't know what the outer limits are, as well of, where do you draw the lines?
Porter Stansberry: The funny thing is, our president is so stupid, he couldn't even answer that question right. "Hey, Mr. President. There's a bunch of neo-Nazis, and they ran over some poor girl." "Oh, well there was violence on both sides." What a moron.
All right. Let's go on. We've been doing a lot of mansplaining for awhile, Buck. And I'm sure the ladies listening, they're tired of us mansplaining. They feel man-spreaded out of the picture. There's all kinds of problems between men and women in this country. But the Google engineer … I forget the man's name. I know it's on our sheet here, somewhere.
Buck Sexton: James Damore.
Porter Stansberry: James Damore. He wrote about a ten-page memo that talked about diversity, and the role of men and women in the workplace. And I thought it was the best written, most thoughtful explanation about what role private enterprise has in fostering positive and successful relationships, professionally, between men and women. And it was really, really well written. And what I loved about it so much was he explained that there are natural differences between men and women, which apparently a lot of people have forgotten. There are these traits. They're not in every man, they're not in every woman, obviously. There are some people who can't decide whether they're men or women. There are clear differences between individuals. But in general, when you're talking about hiring 10,000, 20,000, 30,000 people, there are going to be traits. And those traits are going to be statically important.
So you wouldn't, for example, you wouldn't want to say … I'm throwing out a hypothesis here, or a crazy example. You wouldn't want every single fire fighter in Baltimore to be a woman, because sometimes fire fighters have to do things that are really physically arduous, like carry 80, 60, 100 pounds of equipment up 20 flights of stairs. Women are gonna have a much harder time with that task on average than men, ergo, most of your firefighters are going to be men. And that's not a bad thing for society, that's a good thing for society, because sometimes we need the fucking fires to be put out.
Everything can't be this petri dish of a social experiment. Sometimes you have to bow to common sense. And if you have a privately run enterprise that's there to develop profits for the shareholders, the primary goal of that enterprise can't be a petri dish of social experiments, it's gotta be using the talent where you can find them with people. A woman wrote in, Buck, to my newsletter recently. And it was a crazy person. She had a 22-page CV, and she detailed all of her coursework she'd ever done, going back to junior high school. It was really crazy.
Buck Sexton: Wow.
Porter Stansberry: It was really nuts. But she was
We hire the best, smartest analysts we can find. And I don't care if they're men, women, or other, because our workplace is not a dating website, it's not a petri dish, it's not a social experiment, it's a publishing company, it's a research house, and we want people who can get the job done. And we don't care what they do in their private lives, we care what they do at the office. And I'm super passionate about that because I feel fucking annoyed when somebody tries to tell me how I should be running my company. My response is, "Why don't you start your own business and run it the way you want? I'm here to serve my customers and my partners, not here to satisfy the whims that you have. And I don't really give a damn what you think about what we do. If you don't like it, don't read it. How about that?" But, no. We have to tell everyone all the things that they should do with their property and their companies, which is nonsense.
But I wanted … the guy wrote a great letter. And I urge everyone to read it. It is such clear thinking. And there's two things I want to focus on. One is a footnote. It's on page six or seven of this document. It's footnote number seven. And I thought this was so incredibly insightful. This engineer writes, "Communism promised to be both morally and economically superior to capitalism. But every attempt, every attempt, became morally corrupt and an economic failure," aka North Korea. By the way, that's an editor's note. He didn't write North Korea, I'm saying it. He continues, "As it became clear that the working class of the liberal democracies wasn't going to overthrow their quote capitalist oppressors, the Marxist intellectuals transitioned from class warfare to gender and race politics." I would add another one. I think that this is where the whole global warming stuff comes in, because global warming gives us an excuse to tell everybody what to do with their property and how to use energy. He continues, "The core oppressor/oppressed dynamics remain. But now the oppressor is the white, straight, gender patriarchy." And I don't … there's a word here. I don't know what this means. He says, "Cis-gender patriarchy." I got no idea what that is.
Buck Sexton: Cis-gender. Yeah, that just means binary gender. It means male and female.
Porter Stansberry: Oh, apparently you went to an Ivy League college, 'cause …
Buck Sexton: It's a new progressive term.
Porter Stansberry: Oh, okay. I didn't … I'd never seen that. I didn't know … I thought maybe it was …
Buck Sexton: It's like mansplaining.
Porter Stansberry: It's mansplaining. Okay. Anyways, I thought that was so … such an insightful thing, because what this stuff all goes back to is power. It's who gets to decide who's going to have what, when, where, and how. And one last thing about it. So I loved that he was insightful about that. But the other thing I loved was that what this document does, which everyone has ignored, is it draws tremendous attention to the fact that Google, as a company, discriminates broadly against their own employees, and in ways that are clearly against the law. And he documents this in this document he wrote. Google is breaking the law. They are openly discriminating against their employees on the basis of both sex and race. There are programs that you can get into at Google to advance your career that are only open to minorities or women. Period. That's nuts. You can't do that.
And so, what did Google do? They fired this engineer. They fired this guy, and they tried to trash his reputation. And if you read this document, you will see this guy is not a sexist or a racist or a homophobe or any of that stuff. He's saying he wants Google to be more open and more diverse. And the fact that they all believe in this nonsense, ultra-left, discriminatory workplace rules and things, he says that's gonna harm our business. And he's exactly right. So what do they do? They fire him for speech, not for doing his job poorly, for something he wrote. It's incredible that the progressive left sees this company as doing the right thing. How can you fire someone for writing a memo. And, by the way, he's advocating a free and diverse workplace. It's just the craziest thing I've seen in a long time, and I think it's a great demonstration of how far off-course our country is going.
Buck Sexton: He triggered people, is the answer, by the way. Triggering is when someone feels emotionally attacked because of an idea they don't like. And now this has become, yet again, a way that whenever there's an idea, whether you're in the workplace, you're in college, anywhere there's an idea that people don't like, if they claim to be triggered, which is up to the individual and their emotional stability or lack thereof, then there has to be a reaction, because triggering is a form of … and as crazy as this is, this is actually the way the argument goes. To be triggered is to be assaulted, and to be assaulted is a form of violence. Therefore, ideas that are unpopular are tantamount or equivalent to a form of violence now, which also ties into
By the way, James Damore is a PhD in biology from Harvard. This is a guy who understands evolutionary biology literally as well as anybody that you're going to find within reason anywhere in the country. He was citing statistical evidence. He was citing peer reviewed journals. He knows the science behind women and men make different choices. And by the way, for those who are saying, "Well, women are just kept out by, as you noted there, the patriarchy or that there is an institutional hurdle there, these institutional blocks that prevent them from being able to succeed in Silicon Valley."
Somebody should also then explain why is it that in other high paying professions that require high levels of skills, veterinarians for example, pediatricians, women dramatically outnumber men across the country, not just in a single company or single place. Women make different choices, in the aggregate, from men. That's all. And this is just a truism. This is just reality. It's a fact. But to state that, as you say, at Google is to undermine this entire system they've put in place. And it's really all about practicing the arts of progressivism.
I noted, Porter, in American Consequences, the next episode, Google spent almost $250 million in the last three or so years on diversity efforts. And they haven't even moved the needle on diversifying. So it's all about the outward show of, "Look at how diverse we are. Look at how diverse we are." But they changed nothing internally. They maybe create a few people that they push forward who aren't … maybe they're qualified, but they're not the best candidate for the job. And then you create this perception of, "Well, is this just somebody who's a token? Is this somebody who's being elevated for these reasons?" And then that perception is supposedly the cause of the institutional hurdles to people from those backgrounds. It's just … it's a self-reinforcing cycle. It's like the self-licking ice cream cone.
Porter Stansberry: It's hard for me to believe that you could work at Google after this guy got fired, because you would have to know that your bosses are just assholes. There's nothing in this document that is inflammatory. There's nothing that is even mean-spirited. It's a very clear thinking, rational approach to diversity, real diversity in the workplace. And that he was fired for it is insane, just insane. And the person who fired him is their new, whatever, executive VP of diversity. I guarantee you she can't hold a candle to this guy intellectually.
Buck Sexton: I think one of the most interesting parts of the story is just that Google has an executive vice president of diversity.
Buck Sexton: And, by the way, this is a position that some people, you look at colleges, universities, they all have this now. In fact, not often referred to, Michelle Obama, when she was the wife of then, I believe, state senator Barack Obama, was paid almost $300,000 a year by a public hospital in Chicago to be a diversity officer.
Porter Stansberry: Oh, very important.
Buck Sexton: That's a great gig, by the way.
Porter Stansberry: Let's bring in my old friend and partner Bill Bonner, the founder of Agora, Inc., and ask him how diversity plays a role in all of his companies around the world.
Bill Bonner: Yeah. Hi, Porter.
Porter Stansberry: How are you?
Bill Bonner: I'm fine. How are you?
Porter Stansberry: I'm doing fine. Are you at the beautiful uzi-e?
Bill Bonner: I am.
Porter Stansberry: So Bill is calling us, Buck, from a lovely chateau. Bill will have to fill us in. It's on an old Roman road. It's been there a very long time. Outside a beautiful little town in the south of France called Mont Marian.
Bill Bonner: Yeah.
Porter Stansberry: Bill, did I get the pronunciation anywhere close?
Bill Bonner: It was close enough.
Porter Stansberry: Thanks. You're very kind. Bill, listen. Some of our listeners are new to us, and they may not know much about you or Agora. And rather than just reading your bio, I think it'd be a lot more interesting to hear, from your perspective, what's important about what you've done with your company and your career over the last 40 years?
Bill Bonner: Well, I think what we've done is we've tried to bring more seriousness and professionalism to what used to be a tiny, tiny little industry of people scattered all over the country, writing their own little newsletters. And these people were always, and always have been the voice of the alternative press. And what we've tried to do is to turn that alternative press into a much more important thing and reach many more people.
Porter Stansberry: And Bill, this is clearly a facetious question, but given the events at Google last week, I wonder if you would talk about how you manage diversity in your workplaces. Bill, I don't know how many dozen different small, or sometimes large businesses you own. There's a real estate operation, there's classic book publishing. There's magazines, there's newsletters. You own a lot of different enterprises in many different countries. How do you manage hiring men vs. women, hiring minorities vs. the majorities in these populations? How important is diversity to Agora's success?
Bill Bonner: Well diversity, I think, is important, but not intentional diversity. What you should always do, and what I hope we always do in our businesses is try to find the best person for the job. And the best person for the job, we don't know whether that person is black, white, red or whatever, and we don't care, and we never have cared. And I think not caring about it is the proper attitude towards diversity, and something that we've always practiced, anyway. But we're in a strange world, a world in which people expect … they expect everybody to tow the official party line. And I remember I was on a platform with people who were said to be libertarian business owners. But they, too, they felt the need to kowtow to the prevailing prejudices, and they hired, they wanted a diverse workforce, and they wanted to go good by their employees, and all these things, which I don't think businesses really should have any purpose doing.
Porter Stansberry: That's right. I do think there's an advantage to having a homogeneous culture. Let me be clear. I don't mean homogeneous people. I don't mean all men, all women, all white, all black, all people from Texas. There's different ways you can label everybody. But I think having a homogeneous culture is extremely important. And as a business owner myself, this is what I work at a lot, trying to teach all of our employees why integrity is so important, and as a financial publisher we have to act like we're a fiduciary. We have to put our customers first. We have to make sure that our facts are right, because people are going to be putting their savings at risk. And, as you know, Bill, we can't always be right, but we can deserve to be right.
Bill Bonner: That's right. Now business benefits from having an actual homogeneous workforce. It's not something you intend to do, but when we started hiring, we were hiring in Baltimore, and we were hiring Baltimore people who could read and write, and who were interested in investing, interested in reading and writing. And so not a big surprise that we ended up with people who came from the same schools, had the same background, shared the same ideas. We didn't intend it that way, but that's what happens. And if you go out and start a Chinese restaurant, you're not gonna pick up Italian Catholics as your cooks. They're gonna be Chinese. And that's real diversity.
Porter Stansberry: Whoa.
Bill Bonner: Diversity that is shaped spontaneously.
Porter Stansberry: Whoa. Bill, Bill. Hold on, Bill. That's a microaggression out there. I'm feeling …
Bill Bonner: I should have given a trigger warning.
Porter Stansberry: Yeah. [Laughs] That's right.
Buck Sexton: Trigger warning. He knows. That's amazing. This is Buck, Bill. Hey.
Porter Stansberry: The trigger warning. So Bill, listen. Tell me a little bit … I'm just curious, and I know our readers are too, and our listeners … about where you are right now, in terms of with Agora, and with your career. Obviously you're in France right now. How do you run Agora from a chateau in the south of France?
Bill Bonner: Well, I don't. I haven't run Agora [in a while] … In the first place, there really isn't a company known as Agora. It's a collection of companies all run by very different people all over the world. And this Agora, I give people advice, I try to pay attention to what's going on, I try to think of new ideas and so on. But the people who are actually running these Agora companies, they usually don't pay any attention to me. And they probably shouldn't, because I'm not that close to any given business. So, running it, nobody runs it. It really is a very good example of something that's a spontaneous order in itself. It's a self-organizing business that doesn't need somebody running it.
Porter Stansberry: That's one of the two greatest things you've ever taught me, Bill, was, the one thing was, you can't ever really tell anybody to do anything because all it's gonna end up doing is making them resent you, and they're not gonna do it anyways. And then, the second thing that you've taught me is, is very similar to the first, but it's a little bit different, which is fighting doesn't do any good. That there's an equal and opposite reaction to everything you do. So when you fight back, it's probably not gonna work. And I wonder, have you ever seen other companies try to follow our model? And when they do, what happens to them? 'Cause I've seen other people try it, it doesn't work for them. Why do you think it's worked so well for you?
Bill Bonner: Well, I think … and I have a very limited range of experience, only in my own company, only in publishing, and only in this kind of alternative publishing. So I can't really speak to the rest of the world. I have never told anybody what to do in the whole history of the company, which dates back some 35 years. But I can see how, in other businesses, maybe that won't work. In our businesses, the business where you need to have different ideas. We encourage different ideas. That's the whole purpose of our business is to provide to the world ideas that are different. And so we need to encourage the people in the business to come up with different ideas. So naturally we can't squelch the ideas that come up. We can't tell them, "No, this is what you've got to think." So top down business management does not work for us. I don't think it works for a lot of businesses, but again, I can't really speak to that.
Porter Stansberry: Well, what's new? What are you working on now? I know a couple months ago you sent me some of your wine, I think the first vintage you've made. So you have a new wine hobby. But what else is going on? What are you working towards now?
Bill Bonner: Well, I am writing a book. And the book is an attempt to bring together a lot of loose ends from things that I've done over the years. Pieces of what I've learned in business, and pieces what I've learned in life, and some things that I've just figured out from writing about economics and finance. So that's underway, and I am devoting a lot of time to that. The wine business is a very much a hobby, and which I devote almost no time to it. Takes care of itself. It's down in Argentina. It's a very quirky little business. We produce 10,000 bottles a year, and we sell them mostly to our own readers. It's not really a wine business at all. It's something entirely different.
But other than that, I'm always engaged in building projects. That's what I really like. And I think I've got a new one starting up in Argentina, because I found this property with an abandoned house, an old abandoned house that dates back 100 years or so. And it looks like it's gonna be a lot of fun to fix up.
Porter Stansberry: [Laughs] And are you gonna do the work yourself? Like Bill once built an underground house, because he was convinced that we've been doing it wrong all these centuries. [Laughter]
Buck Sexton: That sounds cool.
Bill Bonner: Yeah, I found out from that that no, actually people were doing it right all these centuries. But no, I'm not gonna do it all myself.
Buck Sexton: I think that's called a bunker, by the way, Porter.
Bill Bonner: I'll do some of it. Pieces I like.
Porter Stansberry: Yeah. It wasn't a bunker, Buck. It was an underground house in West River, Maryland, right Bill?
Bill Bonner: Yeah. I don't advertise that, but yes, it is. [Laughter]
Porter Stansberry: And another … There's lots of reasons why I really love and adore Bill Bonner, but one of my favorite traits about Bill is he loves to tilt at windmills. So the entire magazine industry is dying, from 2005 onwards. And Bill decides he's going to invest a lot of time and money to build a new financial magazine in London. And, Bill, I think you're just now wrapping all that up, aren't you?
Bill Bonner: Yes. We sold it about two weeks ago. Finally.
Porter Stansberry: [Laughs] And were you able to beat the trend, Bill?
Bill Bonner: No, I was not. [Laughter] That didn't work. But Porter, I would have been all right if I had stayed in London with that magazine. But when I got the magazine, got it going in London, at first we had some success. And so I decided that this was the wave of the future. And then I translated the whole project to France. So we started up a similar magazine in France, totally different. It was a new team, new everything. We bought an existing magazine and merged it in, and then everything started to go wrong. We ran afoul of the French employment system, which is very, very complicated, and tries to punish anybody who actually starts a business or hires anybody. And then the magazine industry itself was in decline. So it went bad. But it went bad in France first. And then in London we just never were able to make the sort of progress we expected.
Porter Stansberry: Well, I'm following your lead, Bill. We recently started a magazine here in the United States called American Consequences. And I think that you'll like the theme and the content. We're trying to follow the inevitable consequences of some of these new ideas that are very popular but perhaps misguided.
Bill Bonner: Well, Porter, when you told me about that, I warned you that it wouldn't work. [Laughter]
Porter Stansberry: I know. Somehow we've done
Bill Bonner: [Laughs] Yeah.
Porter Stansberry: Well, Bill, thanks so much for being on the show. I really appreciate it. I want to tell everybody that if they're not reading your daily e-letter, they're missing out on a treat. Bill is, by far, the greatest wit and the wisest writer in the financial press by a mile. He's also just a fantastic wordsmith. Every essay is a treat to read. How can they get that if they're not already receiving it, Bill? Do you know?
Bill Bonner: Well, just go look it up for Bill Bonner's Diary it's called. And it's … you can Google it. [Laughter]
Porter Stansberry: Just Google Bill Bonner's Diary, sign up, and start reading Bill. I promise you'll really enjoy it. Bill, I know it's your family …
Bill Bonner: Well, Porter, I want to thank you for such flattering remarks. I do try hard to make the diary interesting by bringing a lot of things to it. But I really appreciate your saying such kind things about it.
Porter Stansberry: It really is, it's a treat to read. I never miss it. It's fantastic. And, Bill, the stuff, the wisdom that you write is the stuff that really, I can't replace anywhere else. Bill wrote a great essay about slaughtering a pig one year at his farm in France for, I think it was a Christmas, or it might have been Easter. I don't remember which. But he talked about how difficult it was to kill an animal, to slaughter it. And he talked about his young son's reaction to that, how he started out curious and excited about killing the pig, and then realized how difficult it is to kill an animal, and how painful it is to watch, and ends up hiding in a corner. And it's just the most brilliant essay I've ever seen. It was at the time we were about to get into the Iraq war, too, and it was a metaphor for, "Hey. This is gonna be a lot harder and a lot worse than people imagine." So again, everybody, please go sign up for Bill Bonner's Diary. It really is fantastic. And Bill, thank you for your time today. Please enjoy your family in France and say hello to everyone for me.
Bill Bonner: I will, Porter. Thank you.
Porter Stansberry: Okay. Bye-bye.
Bill Bonner: Goodbye.
Buck Sexton: Literally made my day when he said trigger warning, by the way.
Porter Stansberry: Yeah. He's great.
Buck Sexton: That was amazing.
Porter Stansberry: He is a really, really special man. Buck, I hope sometime you get to meet him in person. He's very wise, and he's very modest. And… you have to bring him out to get him to engage, because he just doesn't like to bother anybody else. But he's become a billionaire, and he's never told anyone what to do.
Buck Sexton: It sounds like he may have an extra bedroom in that chateau in France. So I might … put in a good word for me.
Porter Stansberry: I'm sure he'd love to have you. But he … it's an amazing thing, because I've watched, Buck, I've been partners with Bill now for almost 20 years. And I started working at one of his companies right out of college in 1996. So I've been around him for a very long time. And I have seen dozens and dozens and dozens of people take advantage of him, because he is so generous, and has such a mild demeanor. And all of those people end up destroying themselves in one way or another, and he never fights back. He just lets it happen. And it's been such an amazing education about how to be an effective leader. And it's just amazing that he believes so strongly in that idea of karma in the business world. "Okay, yeah. You kinda ripped me off there. I'm not gonna sue you over it, I'm not gonna get upset about it, I'm just gonna keep doing my own thing. Oh, wow. You just fell off a cliff." I've just seen it again and again and again. And it's been wonderful. It's been a great business education for me. And if you're not reading his diary, you're really missing out on a treat. It's spectacular stuff. Want to thank Bill once again for joining us. Again, read his digest … sorry, it's called a diary, Bill Bonner's Diary. If you don't, it's great stuff.
And before we go today, Buck, I wanted to touch on a topic that's near and dear to my heart, which is the death of retail. I think it's a great opportunity for investors because kind of like when digital photography came along, it didn't take a lot of insight to realize there wasn't much of a future for Eastman Kodak. But there was a lot of different ways you could trade that. You could short property in Rochester, for example. And with the death of retail, it's very clear that people under the age of 40 are not shopping at Sears, JC Penny, or Macy's. They're just not. They're buying clothes online. Buck, you're in this demographic. If you need a new shirt or a new blazer or a new pair of pants or new socks, where do you go?
Buck Sexton: Yeah. I go online. And, Porter, actually it's even more than that. I just moved. And I'm 35 years old. I'm here in New York City. 90 percent, I'd say, of the things that I have in my new space, my new apartment, 90 percent of them, I didn't just get online, I got on Amazon.
Porter Stansberry: From one store.
Buck Sexton: Yeah. From amazon.com, I got my lights, I got my pillows, I got … 90 percent of the stuff.
Porter Stansberry: Yeah. I know that every day my wife orders something from Amazon. And every time there's a delivery truck, my dogs go crazy. And I just, I'm like, "Really? Can't you just do it once a week? Can we get down from instead of having a delivery two times a day, can we just go once a week?"
Buck Sexton: And you're also seeing, by the way, some of the smaller clothing retailers like Bonobos which … I don't know if you [know] … people usually think of the pygmy chimpanzees that have a particular proclivity for certain procreative activities, bonobos, but it's also a clothing store. That was the most gentle way I could think of saying that, by the way.
Porter Stansberry: Nice job.
Buck Sexton: Bonobos are famous for a certain activity.
Porter Stansberry: It was nice of you to avoid triggering.
Buck Sexton: But it was bought by Wal-mart. And it's this boutique-y fashion company, started by some HBS guys, very big with people in my demographic on the coasts. Walmart now owns it. walmart.com.
Porter Stansberry: Walmart is … they're competitive. They're gonna try to keep up with Amazon. They just bought that jet.com. They bought another big … another online retailer. Paid way too much for it, but that's another story. But anyway, what I want to tell you is I think there's a great way to play the death of retail that's not obvious to everybody, and that is there's a mall REIT. So this is a company that owns a bunch of malls, hundreds of malls. And here's the interesting part. 91 percent of their malls have either JC Penny, Sears, or Macy's as an anchor tenant. And 40 percent of them have all three. So, this is a great opportunity for people who want to hedge their portfolio with a short position. And we've been shorting this particular stock, General Growth Properties, GGP. We've been shorting it successfully since last fall. And it's a great, slow-declining stock. It's not very volatile. And I think it's a great way to hedge your portfolio if you're afraid of the risk of a bear market.
It's a great stock to be short. It's probably not gonna make you a fortune, being short the stock, but it's a great … if your whole portfolio were to go down 10 percent one month, GGP would probably go down more, and that would help buffer your portfolio from that volatility. It's hard to imagine how GGP is going to come up with enough capital to rebuild all these malls, and to make them into something that they can lease, whether it's apartments, or mixed use industrial, or whatever. Eventually they're probably gonna all be warehouses for Amazon.
Buck Sexton: I've seen some articles as well that they're trying to find, I guess they'd call them experiential uses, or … meaning like theme parks, gyms, things where you have to be physically present, and space is needed. But, I don't … how many ways can you figure out … how many climbing walls can you put in Mall of America before you have enough climbing walls?
Porter Stansberry: I don't know. Maybe Chelsea Manning can visit their malls and take off her clothes and stir some … oh, am I triggering people? Is that bad? But did you see this? Chelsea Manning is now on the cover of Vogue magazine? So she goes from spilling state secrets and being in jail to being celebrated, I guess, by the leftest press?
Buck Sexton: Well, the left is saying that she is now a cover girl. That is, in fact, as clear as day. And I should note that this is part of an effort … and Porter, you're not … I could send you the links. There is an effort now among the progressive left media intelligentsia, if one can call it that, to convince straight males that if you are not attracted to a trans female … like Chelsea Manning, who's a male who has transitioned, if you believe such a thing is possible, to female … if you are not attracted to that female as a straight male, you have a problem. It is bigotry, and you need to learn to overcome that. I'm telling them that they're fighting against basic biology here, which the whole trans movement … I should note … is fighting against biology. And I knew a very wise, very wealthy guy here in New York who had a phrase he used to use all the time. Biology wins. And it's true. Biology wins.
Porter Stansberry: Well, I wish people the best who are confused about their sexuality. I think that'd be a very tough thing to go through, 'cause I love being a heterosexual man. I love my wife. I love our sex life. And I feel bad for people who don't have that security and that comfort in their lives. And I actually hope Chelsea the best. I hope she's comfortable now, and happy. I just don't have … I don't have any hangups about what you're doing in your bedroom. It doesn't bother me. But yeah, I think the odds of me wanting … I promise you, I will not Google that image. I don't want to know.
Buck Sexton: You can't unsee it. I'm warning you. I am
Porter Stansberry: Oh, God. Oh, it's awful. Oh.
Buck Sexton: I complained when Amy Schumer was on the cover of a magazine naked, too. So I'm equal opportunity here. I'm all about being honest when it comes to the aesthetics.
Porter Stansberry: I'm with you, Buck.
Buck Sexton: Hey, Porter. Before we let everybody go, we gotta get into last calls here… our mailbag for the week. We got a few listeners who have written in. Let's start with Bob. "Hi, Porter and Buck. I believe there's a great upside for investing in medical cannabis production. What are your thoughts?" Porter.
Porter Stansberry: You got me on that one, Buck. I just don't know a good answer to that question. I'm sure there are going to be some good investments as marijuana becomes a mainstream recreational drug. But, off the top of my head, I really don't … we don't have any of those picks right now in my portfolio. And frankly, that's the kind of thing you'd find in our real small-caps work. So look at our Venture products, and it's just not something that I'm up to speed on right now, so I don't want to comment.
Buck Sexton: I think that they are still not able to, at least, formally use the federal banking system with some of these, or at least there are some problems with that, because of … it's still illegal at the federal level. They haven't changed the Controlled Substances Act. So these are states that are turning a blind eye, and the feds letting it go. But I don't know how it works with banking. I'd have to look into that, too.
Porter Stansberry: There are a lot of fraudulent stock promotions out there right now, because there are tons of people who are excited about marijuana becoming more mainstream, and there are very gullible investors. So there are a lot of these fraudulent companies that are out there selling worthless stock. So, the one thing I would tell you is, please, dear God, don't read a tip sheet online and think you're gonna go buy the next Philip Morris of the pot world, because it's not gonna happen that way. You're far more likely to get ripped off than you are to make money. So, go to a reputable research firm like ours and look at our published products and you will find the answers to those questions. It's just not something I want to talk about on a podcast. I'm not comfortable giving stock tips on a podcast, and it's not … these are very risky stocks. That's all I'll say about it.
Buck Sexton: All right. We got Bobby in with our second email for the mailbag. "Porter, regarding buying long puts, if the price goes down since being recommended in Stansberry's Big Trade, does that mean that we should still make the trade? Does volatility make the price of the put go down or up?"
Porter Stansberry: Well, one of the reasons why the prices of the puts have gone down is because of time decay. So, as you know, those options all expire. And if they don't expire in the money, they expire worthless. So as the time decays, the prices are gonna go down. As far as whether or not they're still buys, you have to see the portfolio page of the newsletter in question to see our current best judgment.
Buck Sexton: All right. That's it for the mailbag for this week. If you have a question or if you want to let us know if we have delighted or inspired your day, let us know. Write to [email protected]. Remember, if we use your question on the show, we will send some Stansberry Research schwag. It is in fashion year-round. And you can get it not on amazon.com or walmart.com, which is exciting. You can get it from the folks at Stansberry.
And as a preview, next week Marty Fridson, the dean of high-yield debt, will join the show. Marty is one of our featured guest speakers at the upcoming 2017 Stansberry conference in Las Vegas this September. So we'll get a little preview of what he has to say.
Porter Stansberry: Buck, there's really nothing more exciting to talk about on a podcast than the bond market. So, tune in next week to see how we can possibly make that interesting.
Buck Sexton: Love us or hate us, just don't ignore us. Isn't that right, Porter?
Porter Stansberry: That's what we say. And also, folks, feel free to ask any question you want. But also, we want some feedback. Tell us how we're screwing up. There's nothing better than a really angry diatribe. So, if we've annoyed you, or you don't agree with our opinions, let us have it.
Buck Sexton: Oh, man. Now I'm scared. I wonder what they're gonna say. Let's see … That's the way it should be, though. Keep us honest. Please do go to investorhour.com for the downloads. You can also download on iTunes or wherever you listen, Google Play, Stitcher. You could find the podcast there. Leave us a review or a comment, please. This helps us grow the show and discover how we can best serve you. And also, those of you who are curious, you can listen to me for three hours Monday through Friday, six to nine Eastern on the iHeartRadio app. I do a political and national
Porter Stansberry: We'll see everybody next week.
Buck Sexton: Fantastic. Thank you, Porter. See everyone next week.
Announcer: Thank you for listening to the Stansberry Investor Hour. To access today's notes and receive notice of upcoming episodes go to investorhour.com and enter your email. Have a question for Porter and Buck, send them an email at [email protected]. If we use your question on air, we'll send you one of our studio mugs. This broadcast is provided 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.
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