Episodes

Intro:                           Broadcasting from the Investor Hour Studios and all around the world, you're listening to the Stansberry Investor Hour.

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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 Matt McCall. He's one of my favorite investors and he has recently joined us at Stansberry Research. In the mailbag today, really good questions around the complex topic of when to sell. And the mailbag is a conversation, so talk to me. Call our listener feedback line, 800-381-2357, and hear your voice on the show. For my opening rant this week, the trade of the last decade was to buy disruptive technology. I'll tell you what I think the next trade of the next decade is going to be. That and more right now on the Stansberry Investor Hour.

The trade of the decade. Well, it's a convenient-sounding phrase. I don't know if I'm talking about five years, 10 years, 15, but I'm comfortable calling it the trade of the next decade. Trade of the last decade was to buy disruptive technologies. You know, you could've bought almost anything, I mean, if you'd bought Tesla a decade ago, wow, you'd be up huge. And even the big companies, Amazon, Google, Facebook, you know, they've disrupted media, they've disrupted brick-and-mortar commerce – it's been an amazing decade for disruptive technologies, and for investors in them.

For the next decade, I think it's going to be different. I think the trade of the next decade, I'll just call it real assets. But I think there's really two parts to it, and I've talked about both parts, but let's just put them both together and call it the trade of the decade. And the two parts are: commodities versus stocks are cheaper than they've ever been versus stocks, going back at least 30 to 40 years. And I've seen charts that are longer, but my data is 30 years actually. And also, value stocks versus growth stocks, you know, and a lot of those growth stocks are the disruptive technology stocks. And everybody – that's one of the problems is that everybody knows that growth is great, and everybody knows disruptive technology is great, and it's reflected in the valuations.

So, value stocks, things like, you know, mining companies and manufacturers, and even banks and other things, the value stocks are cheaper, relative to growth stocks, than any time going back at least 30 years. And again, I've seen longer charts, but my date is 30 years. I'm pulling it out of Bloomberg. And that's good enough, because, you know, we get these times to buy value events every decade or so, right? It was time to buy value at the peak of the dot-com boom in 1999, 2000, right? And, so, value did great and it sort of peaked all those, you know, homebuilders are another value type sector, all the homebuilders and banks and mining stocks and things just got absolutely obliterated in the financial crisis.

Then, you know, mining kind of came back, but then got obliterated a couple years later. [Laughs]And so then, for the last decade, it's been, you know, a decade of growth and disruptive technology. So those value names and commodity-oriented names, I think that's going to be the trade of the decade. And right now, as far as I can tell, the thing I'm most excited about that I've recently put my own money into was silver. The silver stocks are just down, down, down, they've just really fallen apart, and gold stocks, too, right? And those are slightly different than the strict commodity play, you know, useful things like copper and iron ore and, you know, other things like food and other commodities.

Because they have a monetary component. Silver is a useful industrial metal with a monetary component, and gold is useful for jewelry. And most of the gold that we use is used for jewelry, but it also has a huge kind of you could call it speculative, but for me it's a long-term wealth-preservation monetary component. I am not a speculator in gold. I am a long-term preserver-of-wealth buyer of gold. But when the gold stocks get cheap, when they fall apart and they're, you know, performing really poorly, that's when I want to buy them. Because as a previous guest, and a good friend of mine for the past two decades or two-and-a-half decades or so, Rick Rule, often says – and we had Rick on the program not too long ago. He says when it comes to gold stocks or silver or commodities in general, you are either a contrarian or you're a victim, right?

The victims in the commodity trade, they only come in after it's performed exceedingly well. But the contrarians come in after the stocks have performed poorly. And that's what you have to do: You have to bite that bullet and buy when they're down. And we're in a funny place right now, because silver and gold look really attractive from a contrarian standpoint, but if you look at, like, the Goldman Sachs Commodity Index, it's up 40% this year. [Laughs] I mean, commodities have screamed, OK? So, it doesn't feel real contrarian right now.

Oil is up pretty dramatically this year, too, so, it's not looking like a big, you know, contrarian trade right now. So maybe there will be better entry points for the trade of the decade in some of these commodities, but I think you can certainly start. And I think the same trend that affects those nonmonetary commodities will affect gold and silver. And I just think that these things run in cycles, cycles happen, and it's just a part of – again, it's a part of human nature, all of this stuff that we talk about investing, right? You know, we talk about when to sell and how people tend to sell at the wrong time: human nature, right? People get excited about something everyone else is excited about, you hit the wrong moment to buy: human nature.

So, also in human nature is the simple fact that, eventually, we find out we went too far. And I think people will find out they went too far with this disruptive technology thing, as an investment. You know, as a technological trend, the trends keep going, right? The Internet didn't stop. It just got better and better after the dot-com crash. But the equities sure got murdered, and I think that something like that is going to happen again. So I think the thing to buy ahead of that are the commodity-oriented names, right now the silver and gold names, and, you know, maybe look for some good oil names here and there, if you can find'em.

And that's it, the trade of the decade: real assets. You heard it here, probably not first [laughs], but you heard it here. Now it's time for my quote of the week, and this comes from Hyatt Brown of the insurance brokerage firm Brown & Brown which we recommended in the Extreme Value newsletter. My old friend, Chris Mayer, loves this company, he's bought it for his clients. It's a great business, it's one of the all-time great businesses, low capex, it's just people in offices with telephones and computers. But there'll always be a need for it, because they mostly sell insurance to businesses, and it tends to be a more intensive, information-intensive specific kind of coverage that requires a lot of interaction with a knowledgeable agent. So, I think it'll be around for a long time, I think it'll earn higher returns on capital for a long time, and I think it'll earn consistent margins and gush free cash flow for a long time, and Brown & Brown will be one of the best ones.

So, Hyatt Brown was giving a talk recently, and he said this quote, which I think is just brilliant. He said, "In the morning in Africa, a cheetah awakes knowing it will have to run faster than the slowest gazelle, or it will starve. In the morning in Africa, a gazelle awakes knowing it will have to run faster than the fastest cheetah, or it will die. In the morning when you get up, whether you are a cheetah or a gazelle, you better wake up running. It sounds harsh, but it ain't. It's like any athletic team: You get up and you do it and you do it and you do it. And if you do it well, you will last." That's Hyatt Brown of Brown & Brown.

Great quote. I love it. "In the morning when you get up, whether you are a cheetah or a gazelle, you better wake up running." OK, let's talk to my friend, Matt McCall. Let's do it right now.

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I've been following Matt McCall for years. I don't know how many years, but it's not for any of the reasons that you might think. Matt takes a much, much different approach to stock investing than I do, and his track record will absolutely blow you away. He's found more than 40 1,000% winners in his 20-year career. He even recommended bitcoin in 2014. It went up 100 times after that. On October 20, Matt is going to give us his newest big-market prediction, and he's going to tell us the name of a tiny little company that he says could go down in history as Stansberry's most successful stock market recommendation ever. That's a bold claim. With most people, I wouldn't care, I'd ignore it, but with Matt, you pay attention.

And you can bet I will be there. I will be tuned in and writing down the name of that stock, and I want to see what he has to say about it. And best of all, Matt's going to share all this information with you 100% free, you don't have to pay anything. For all the details and if you want to sign up for the big event when Matt reveals this stock, just go to www.mattbroadcast.com. Again, that's www.mattbroadcast.com.

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All right, it's time for our interview today. Today's guest is Matt McCall. Matt was a stockbroker at Charles Schwab, one of the world's largest brokerage firms. He's the founder of Penn Financial Group, an asset-management firm for high-net-worth individuals, the author of two books on investing, The Swing Trader's Bible: Strategies to Profit from Market Volatility and The Next Great Bull Market: How to Pick Winning Stocks and Sectors in the New Global Economy, which was a top-selling investment book for more than two years. He's been featured in the Wall Street Journal and countless other financial websites, and has appeared over 1,000 times as a featured financial expert on Fox News, Fox Business, Bloomberg, CNBC, and CNN. But most importantly, I am pleased to welcome Matt as the newest editor here at Stansberry Research. So welcome to the fold, Matt – you're one of us, now.

Matt McCall:              Thank you so much, Dan, yeah, thank you so much – great to be back on.

Dan Ferris:                 Yeah, so, I think I've done, like, five appearances, all of them on Fox Business, and it was, like, the biggest pain in the neck in the world, it ate up half my day, it was ridiculous. You did it 1,000 times? Are you a glutton? [Laughs]

Matt McCall:              They were paying me, so I didn't do it for free. [Laughter] I was being paid. And I lived about three blocks from the studio, yeah, I lived about three blocks from the studio, so it made it very convenient on the way home. The subway actually stopped in the basement of Fox, the next stop was next to my house, so, it made it easy. And I got to tell you, I got burnt out, though, and that's why, you know, I kind of changed what I was doing with the newsletter world, because – little more freedom to talk about really what I want to talk about versus the, you know, narrative that the big media's pushing.

Dan Ferris:                 You know, were you sort of encouraged or kind of led down the path of the narrative, in your 1,000 appearances?

Matt McCall:              Yeah, you know, at first, it was just, like, a guest for, like, a three-minute spot here and there, and they'd call and say, "Hey, Matt, are you this?" "Are you bullish on this?" "Hey, Matt, do you think Obama's going to ruin the economy?" And of course, you know, back then I wanted to get on camera, so I said, "Sure, Obama's the worst thing ever, he's going to ruin the economy," because I knew they'd put me on. [Laughter] So, yeah, there was definitely times where they would steer you, or they'd ask me for my thought on a topic, let's say, whether it be political, economic, stock market, I'd give my talk and they, "OK, thanks, we'll get to you next time," you know, they were looking for me to give one answer.

As I got further along in my career when I was cohosting a daily show, we were definitely pushed, you know, to speak a certain narrative, and that's one of the reasons I left. My contract was up, I was working on just day-to-day contract, and it got to the point where I just wasn't comfortable anymore going on national television speaking certain ways. And, you know, at the end of the day, all you have is your name, and if your name gets ruined, which it could happen pretty quickly in this world. So I decided it was time for me to move on to greener pastures.

Dan Ferris:                 Yeah, I hear you, I hear you loud and clear. Over the years, I feel like I've made a similar kind of a transition, because after a while, you think what you think and that's all there is to it. I mean, is not independent thinking like one of the most important things about being a greater investor? Like, where is that idea in all this narrative pushing?

Matt McCall:              You know, that's a great point, and, you know, I bash the media a lot, and sometimes, you know, I don't like to be negative all the time and say all the negative things about the media. But the problem is, Dan, it's pretty tough for me to come up with some positive things. You know, I have a lot of great friends who still work at Fox and other places and they don't like to hear me say it, but, you know, these are people that, you know, I go over to see their children, these are good, good friends. But at the same time, when it comes to investing, they're not looking out for the retail investor, the little guy, if you will, out there. Because No. 1, there's only certain stocks they can talk about, a certain size, and it's going to be the same stuff, Apples, the Amazons of the world, you know, the big names.

The other thing is, they don't vet these quote-unquote experts that they put on. They just let them come on because they may look good on TV, they may sound good, they may have a good title, they may know the PR firm, whatever it might be. You know, there's no real reason as to why somebody goes on TV more than somebody else. And then, at the end of the day, a lot of the guys, not to bash CNBC, have never managed money in their life, they have no skin in the game, there's no ramifications if they come up with bad ideas. Then they tell you, "Hey, I'm a long-term investor, Dan, you know, these are long-term ideas." Four days later, the market's down 1% and they're telling you to sell the same stock they recommended three days ago. So, you know, at home, you can't sit there and expect that that person is looking out for your best interests.

And finally, the networks – everything's about money. The networks, how they make money? Advertising. How do they get more advertising dollars? More eyeballs. So it has to be sensationalized. They can't go on, Dan, and say, "Hey, market's down 0.5% today. Not much going on. Tune in tomorrow." It has to be, "My god, the world's ending, the market's down 0.5%," and they're only going to put on quote-unquote experts that will tell you the world's ending, because that's going to get clicks and eyeballs. So, you know, I feel bad for the people at home that truly look up to the people on TV and take their advice. And again, I'm not going to name names, but we all know who we're referring to at CNBC, that flip-flops more than any politician I know. [Laughter]

Dan Ferris:                 Yeah, that's right, we do. You know, I think we've kind of beat that horse to death. We all know the media is not a trustworthy source of financial advice, the mainstream financial-type media. But remind us again, like, I know – you've been on the show before and some of our listeners are familiar with you. But let's do the Matt McCall refresher. If we were sitting at a bar and I said, "Well, Matt, what kind of investor are you?" What would you tell me?

Matt McCall:              You know, I – this changes, because a lot – I used to say growth investor, but that kind of pushes people off, because that's not necessarily true. I'll take it from a different angle, Dan. I'm somewhat of an amateur futurist, so I like to look ahead five, 10, 15 years out, and use a top-down approach to investing. You know, a lot of Wall Street's bottoms-up. They'll look at the specifics and fundamentals of a company, and not care as much about what sector or what trend it's in. You know, an example is, OK, you know, there's a great retailer, a brick-and-mortar retailer. The problem is, do you see a lot of growth in brick-and-mortar retail, or would you rather be in e-commerce? You know, I'm going to lean towards e-commerce, and I think the odds of picking an e-commerce company that does well are much higher than a brick-and-mortar.

And don't get me wrong, we've owned some brick-and-mortars along the time, and I think there's a lot of great ones out there. The odds just aren't as good. So, I'm going to look into the future and at anything that I believe can give back above-average growth and that is on the cusp of innovation. So I'll call myself an innovation investor, where I'm looking for disruptors, sectors that will change the world, and sectors and trends, megatrends let's call them, that regardless of the government, regardless of any pandemics, will continue to grow. A very easy example is the transportation industry: Regardless of what happens between now and the end of what I call the "Roaring 2020s," we are going to see more electric vehicles on the road.

I mean, whether you love it, you hate it, or you're indifferent, I don't think there's anything that you and I, Dan, could do to change that fact: There's going to be more electric vehicles on the road. So, from my standpoint, I will then look at, "OK, what are the investment implications of that?" You know, very simply you think, "Oh, what about Tesla, Volkswagen's leading the way, a few others." Then I – that's kind of the easy top, but I like to take more of a what you call picks-and-shovels approach to it, "OK, what about the battery makers? Because the batteries need to get better, for EVs to really continue to grow. What about all the sensors? What about all the software? What about all the chassis that now have to be switched over to electric vehicles?"

There's so many other plays along the way that I think will be huge winners, and that's my investing approach. So I'll look for these megatrends, whether it be the transportation, whether it be genomics, whether it be quantum computing, cloud computing, etc., you know, all the big trends that are going on right now.

Dan Ferris:                 Are you a Tesla bull, Matt?

Matt McCall:              I am a Tesla bull, and I have been for a very long time, a very, very long time. You know, the reason I became a Tesla bull, Dan, is not because of Tesla itself – and this was – I'm trying to think the first time I recommended it, I think it was in '09, and it was because of Elon Musk. You know, it was one of those times where, you know, back in high school I used to skip school all the time and go to the Philadelphia park and bet on the ponies. Never won, but there was this old guy there who always won. And he pulled us aside, one day, and he says, "Listen, guys, you got to bet on the jockey." You know, there was these – I can't remember the guy's name, but he always was there every day – I think his last name is Prada – always winning, always winning, didn't matter about the horse, he bet on the jockey.

And Elon Musk was a bet on the jockey. You know, I believe in him, I think he's – don't get me wrong, he could be going back to Mars because he's from there. He's a bit goofy, to say the least. But I also think he's a visionary, and I think he'll go down, you know, in history as a great visionary. So my bet for Tesla was on him. And I recently put out a report, maybe about a year ago, you know, I think Tesla is a $3 to $4 trillion company by the end of the decade. And a lot of that has to do with not the cars as much, but the battery storage. I think there's such huge upside for energy storage and battery storage, and I see them making, you know, headways when it comes to that.

Dan Ferris:                 Interesting. A bet on the jockey. He's a controversial jockey [laughter], to say the least.

Matt McCall:              [Crosstalk]

Dan Ferris:                 I mean, you know, not just as a person. I mean, as a person he's really impressive, he's got all these big projects going and he seems to pull them out of his back pocket, you know? So, he's clearly an impressive guy. But I mean as a CEO, as the CEO of a public company, he's a controversial figure, to say the least. I mean, I suppose the most famous example, at this point, was, you know, the funding-secured tweet. That is not something you would ever – like, I never thought I would see that from the CEO of a company, saying, "Funding secured," when, meh, you know, anything but secured. So, but that – he doesn't – that doesn't bother you, though. The visionary comes with the crazy stuff, right?

Matt McCall:              It does. Yeah, it doesn't bother me as much, I mean, I – I don't want to say I'm anti-SEC. I think the SEC concentrates on the wrong people, a lot of times. I agree with you, though, I think the perfect situation would be bring somebody else in as the CEO, you know, a little crazy like him but not to that extent, and make a new role: the CVO, chief visionary officer. And let him still be, obviously, a huge part of it, largest shareholder, most likely, and let him be the visionary. But when it comes down to day-to-day operations and tweets, no, do not tweet about Tesla or anything else, you know, cut him off there. So I agree with that.

Dan Ferris:                 Yeah, all right, I don't want to get hung up on Tesla, either. OK, so megatrends. Is there one of them, right now, that just screams at you as, like, "You can't not be invested here"? You know, what's the – is there one that's just, you know, crying out that's obvious to you?

Matt McCall:              Well, I'll mention two, because I'm not going to go into transportation again, but transportation is one for me, where, electric vehicles, autonomous vehicles, people thought I was crazy three years ago, pitching flying cars, but, you know, they call them eVTOLs now. I sat in one at CES, two years ago I guess it is now, it was made by Hyundai. I think it was a Hyundai and Uber. I sat in one made by Bell Labs. They're amazing. And they're going to be here, because the thing is, when it comes to infrastructure on the road for AVs, you look at that sky, it's pretty wide open. And I was sitting in a building in New York, not too long ago, I looked out and I was telling people, I said, "Very soon, we're going to see flying cars stopping on all the tops of these buildings, and that's how you're going to get around." You know, really, they're kind of like drones, flying drones, but – so to me, I think transportation's probably the one no-brainer out there.

You know, another one is going to be blockchain and cryptocurrencies, I think that's a no-brainer, as well. When it comes to blockchain, I think – let's look at those two different ways. Blockchain – I just spoke, this week, Dan, to a group of financial advisers. So not guys like you and I that kind of think outside the box, but financial advisers, and my topic was cryptocurrencies. Can you imagine me trying to talk cryptocurrencies with this group? I was, like, I love speaking in public – I was scared to get in front of this group. But, at the time, they had a breakout session and you could choose if you wanted to go to marketing, investing, or cryptos. My table was fuller than anything else, like, 90% of people. Because it's interesting, if it's told the right way.

And you start with blockchain. You know, blockchain has been around for many, many years, you know. IBM has been working with blockchain for a long, long time, you know, it's basically a digital ledger. And an easy way to put it, that I try to explain to people is it eliminates the middleman. And the middleman has been fleecing human beings for thousands of years and we need to get rid of that. And that will – any technology, Dan, that allows things to be faster, cheaper, and more efficient, that's something, in my book, I can't ignore. And that's the blockchain. And then that leads onto cryptos and stuff, but let's – the blockchain, to me, is something that will change every industry in the next one to 30 years.

Dan Ferris:                 Yeah, and that elimination of the middleman, I mean, is there any industry where that is more desperately needed than the financial industry.

Matt McCall:              Oh, I know, I know. Just imagine decentralized, you know, DeFi, decentralized finance, where you don't have to deal with – ah, my goodness. I had to call – this is a quick funny story. I sold Penn Financial Group, my money management firm, on October 1, and shifting some things in my life around. And I had to close out a corporate account, and there were some stocks in it and I didn't have access to it anymore. So I had to call my broker and I said, "Hey, you know, I've had a relationship with you guys for 18 years. Could you just sell these and, you know, ACH some money over?" He goes, "Absolutely, sir, but it's going to cost you $25 per trade."

I said, "Who pays to trade anymore?" he goes, "Well, it's broker-assisted," I'm, like, "I have no access," he goes – I said, I'm doing the math, I'm, like, "That's $1,000," I said, "Are you out of your mind?" I didn't pay it, obviously. I argued for about an hour to get through it, but that just shows the middleman. There's no reason that should cost anything, because it costs them nothing to hit the button, you know, it's just –

Dan Ferris:                 Yeah.

Matt McCall:              Yeah, so, I agree that the industry that we're in really needs to be upended.

Dan Ferris:                 Well, even, OK, so, you know, that's a sort of very specific application and I totally agree with it. But what did I – I did something, recently, that drove me crazy. Oh, I think I made a, like, a card payment, you know, on – you know, I just pay off my credit card randomly, because I don't actually borrow money on it, I just, you know, I stack up miles, right? So I just pay it off randomly here and there, I don't think about the day of the week. I paid it off Friday, because I had bought something Thursday or whatever. It didn't clear until Tuesday, I guess because of the holiday. I mean, that's insane. We're just talking about – I mean, I think I spent a couple thousand bucks on something or – and I was, like, "What?"

You know, a couple, like, $2,000 or $3,000 and it didn't close for, like, really, four days? That is totally unacceptable. And the blockchain is, like, [snaps] that's gone. Settlement on the blockchain is – it's a done deal. That one thing could create – I mean, the massive wealth creation of just solving settlement is probably incalculable.

Matt McCall:              Oh, yeah, I mean, I don't have the number in front of me, but the amount of money that travels across borders just every day, you know, money going – and how much it costs, and how inefficient it is, that's going to be done in seconds, for pennies on the dollar, at that.

Dan Ferris:                 Yeah, money home to Mexico, you know, people going to, like, you know, Western Union – no –

Matt McCall:              Like, Western Union, right? Yeah, yeah.

Dan Ferris:                 Yeah, that's ridiculous. It's gone. It's 2021 and people are standing in line at Western Union. And I understand that they're not wealthy individuals, but that's not the point. The point is, it's so damn cheap to move bits, and all money is electronic anyway, so the whole thing is just silly.

Matt McCall:              Exactly. You know, and the example you gave, you know, they're, like, "Well, you know, it was a banking holiday, it wasn't a business day." Computers don't take business days. They're still running. [Laughs] It's amazing.

Dan Ferris:                 Yup, yeah.

Matt McCall:              Yeah, so, you know, with the blockchain, you know, we could sit here for literally hours, if not days, about how many, you know, applications it could be used in. And that's what excites me, when I see something that has such a what we call a TAM, total addressable market, it's just so big when it comes to the blockchain. And, you know, Ark Investing, I don't know if you follow them at all, Cathie Wood, they have a great research arm. And they did a paper, about two years ago, on just basically disruptive technology, and they showed the economic impact of some really big things, going back to the late 1800s, or, late 18th century, from the steam engine to electricity to automobiles, you name it. And all of the stuff they're talking about now, and they've kind of put it into five categories, I believe it's blockchain, energy storage, DNA sequencing, robotics, and artificial intelligence, if you look at a chart, it's, like, a little blip, little blip from electricity, from steam engine, and then these five.

And it just, it's parabolic how much economic impact that this convergence that will take place, and again, I call it the Roaring 2020s, the convergence that will take place. And then how much effect that will have on companies and the equity market. So as an investor, for me, I'm a long-term investor, if I'm buying something now, I'm looking out, you know, five to 10 years, and I'm willing to let stocks go up and down along the way. And I realize they all won't work out, so I'll take a basket approach and buy several in a sector. But I couldn't be more excited. And it's not like I'm looking through rose-colored glasses. I truly believe in the innovation that we're seeing.

And unfortunately, too many people are scared of the future, not just the markets but scared of the future in general. Most studies, they show that if they ask people what worries them or what concerns them, just a very simple question, it's usually their children, which is the future, their health, which is the future, or simply "the future." And it's amazing that we get so concerned about the future, instead of looking and saying, "Wow, how amazing can things be in the future," instead of looking negatively on it.

Dan Ferris:                 Right, so, when I think of the kind of investor you are, Matt, I just think to myself, "long term" is the first thing that comes to mind. Because you, maybe even more than anybody I know – I have to think about that, because I know a lot of people from doing this show – you know, certainly in the top four or five of the more than 100 or 150, however crazy many people we've interviewed, you got to be in the top five of truly long-term, looking past all the dips and blips and bear markets, even, as a guy who just focuses. And I have to say, that is – it's highly unusual and it accounts for many of the excellent calls you've made over the years. I know you've had a lot of, like, not just triple-digit baggers but, like, four-digit, you know, 1,000% or more baggers. And let's face it, Matt, the only way you get that, it's time, you know?

Matt McCall:              Yes.

Dan Ferris:                 It takes time to compound at those rates. So how do you do it? How do you have such discipline to stay focused so religiously on the long term?

Matt McCall:              [Laughs] Twenty years in this business, finally I learned what I should be doing.

Dan Ferris:                 Yeah. [Laughter]

Matt McCall:              I feel like, you know, when I first started managing money, 18 years ago, you know, any time the market would be down, I'd be losing sleep, my ex-wife would – it didn't help our relationship, put it that way, ex-wife. You know, I took every up and down in the market personally. So first of all, you have to realize the market doesn't care about you, so it's not personal. And then, it just, for me, Dan, it was probably two things. One, looking at the charts and seeing that every big winner, whether it be a 5X, 10X, 100X winner, did not go straight up. Multiple bear markets along the way, multiple recessions along the way.

Look at Amazon, how many times that stock pulled back 25% or more. Several times, over its lifetime, but the only way to get those huge gains was to hold through that. You know, again, hindsight, OK, it looks pretty easy to hold onto Amazon, because a lot of them that fell 50% ended up going down 100%. But that, again, is why I take a basket approach and don't put all my eggs in one basket and diversify. The other thing is just to continue reading. The more that I read and see, you know, where the trends are going, and just kind of reiterating to myself that these trends are real, it's not something – I can't turn on the TV and, because Tesla has a bad quarter, think to myself, "Wow, maybe electric vehicles aren't the future."

Because a lot of people will think that, you know, just because they have a bad quarter. I've had to train my brain, because I feel like human beings, Americans in general, have gone the opposite direction, in the 45 years I've been on this earth. They've become more instant gratification and, "If it doesn't work out, I'm getting out and moving on to the next one." I mean, you talk to people all the time that, they call themselves investors, but in reality, they act like traders, because they can't handle a 5% pullback. Yeah, it's crazy. So, there's no easy way to say what I do, but that's – that's why with my subscribers I try to get that across, that patience, think big picture.

And, you know, you hate to brag about winners I've had in the past, but you kind of have to, just to show that, "Hey, I've done this before." Because otherwise, why would they take my word for it and just listen to me? Because there's many stockbrokers out there that say, "No, no, stay the course, stay the course." They really don't have a plan. That's just what they do.

Dan Ferris:                 Oh, right, yeah, the stockbrokers always say that, they have to say buy, because, you know, if you sell and run away, you're worthless to them. They got to keep you trading.

Matt McCall:              Yeah, exactly.

Dan Ferris:                 So, let's talk about the fact that, I mean, I think I was, like, the sixth employee of Stansberry Research. I guess you must be about the 206th, but the newest one.

Matt McCall:              [Laughs]

Dan Ferris:                 And, you know, what attracted you to us? I'm curious. I mean, you were managing money for high-net-worth individuals. That sounds like a cool life to me. Why give that up for this?

Matt McCall:              Yeah, you know, it's funny, because a lot of people have recognized I've made the move, and it's, you know, just being announced I'm going to Stansberry Research. And they all wondered, "Are you OK? What's wrong? Did something happen?" And I was, like, "No, this is actually – this is good, this is good news," you know?

Dan Ferris:                 [Laughs] That's funny.

Matt McCall:              You know, again, people see change as bad, like, "Why did it change? Like, it never should change." [Laughs] Like, don't get me wrong, I had a great life and I have a great life, because I get to wake up every morning and do what my passion is, and that is work in the stock market. But, you know what it came down to, Dan? You know, I'm mid-40s, with Penn Financial Group, my old financial management firm, it was growing very quickly, I was spending a lot of time on that, I was also publishing five different newsletters. So there's only so much time in a day, and I was getting a little bit burnt out. And I've always been the kind of guy, I love talking to clients, but I would rather sit behind a computer, read charts, look at stuff, and come up with that stock nobody ever heard of.

That, to me, is, like, more fun than anything. And with the newsletter business, it allows me to do that, and with Stansberry, to me, it's – I hate to use this analogy because I hate the Yankees, but it's kind of like going to the Yankees. You know, it's going to the crème de la crème, it's like going to the big leagues. And, you know, looking back on my career, you know, reading Stansberry back in the day when I had my own newsletter with a couple hundred subscribers, thinking to myself, "Boy, that's where I want to be one day." Same thing with Fox News, I used to watch those guys on the weekend, saying, "I want to be on Fox News weekend shows one day," and I got there.

So, this, to me, was a goal that I had in life for a very long time, and meeting you and other Stansberry people, throughout the years, at conferences and doing podcasts and in the office, I really fell in love with the way business was done there. And I made a lot of great friends and have a lot of respect for what Stansberry does. And it just happened to be a really good fit for everybody involved, and things fell into place at the right time, so, you know, I couldn't be happier to be here. Because the other thing is, I want to get my message out to as many people as possible, and Stansberry gives me that platform to get out there to as many people as possible. And I think, you know, outside of us at Stansberry, Dan, and a couple other people, it's very tough to find independent advice that there is really no axe to grind.

You know, for you and I selling newsletters, we don't make any – you know, our only way that, you know, what we do for our business: The better that we do for our subscribers, the more subscribers we'll get. It's not about churning and burning, it's not about pushing certain stocks, we obviously don't do that, we don't take money from companies. We're truly independent researchers that, we're only going to be around if we give good advice. And that's just a great business model to be in, in my mind, like, "Put it on me. Let me do my job and let me do my job, and let me actually build a business based off what I should be doing." You know, instead of, too many financial advisors, they just gather assets and performance doesn't matter. You know, for us, we're looking out, No. 1, for our subscribers.

Dan Ferris:                 Yeah, from day one, Porter started this at our kitchen table at the apartment in Bolton Hill, Baltimore, he was all about the relationship. Actually, he was about that even before, when he was working for the parent company, Agora. You know, he noticed something about the newsletter business, and he thought, "Well, it's OK to have a really aggressive promotional stance, because you want to crow about what you're doing, you want to be excited about it. And you're telling human beings about it. They're not machines, so you want to show them your passion. But why does the advice have to suck? Why can't we do real research?"

He said, "All we have to do is do real research, and we've ratcheted the whole thing up." And he's proved, beyond a shadow of a doubt, that that was the thing to do, because the business is many, many times larger [laughter] than it was when he started in it. You know, he grew this huge thing that's worth, you know, 3 billion bucks, now – it went public, right? So, it sounds right to me what you're saying, you know, if you want to really have a great relationship and get your message across and just be passionate about what you love to do, I agree. And it's also, Matt, it's like hanging in the Louvre Museum. Forget the Yankees. We're hanging in the Louvre Museum. The line is out the door, every single day, for hours and hours and hours and hours, and you have to wait, you know, like, if you want to see the Mona Lisa, you're waiting for hours and hours.

And I'm just some, you know, lesser-known Romantic painter hanging on the wall somewhere, as you walk by on your way to the Mona Lisa. But I'm in the Louvre. And now you are, too. And many, many, you're right, many, many more people will see you hanging on that wall than anywhere else. And, you know, I couldn't be more thrilled to have you with us, because, like I said, that long-term perspective that you have, it's priceless. It's priceless.

Matt McCall:              By having a bigger platform and getting out to more people, you know – because that long term sounds easy. You know, we could speak in Vegas at a conference, and people say, "Yeah, yeah, I get that, Matt, I get that," until we have the first bear market, the first recession. Then they say, "Matt's an idiot. I can't believe I listen to this guy." [Laughs] So you have to have the newsletter and that connection with them and that trust that you've built with them through stories that we tell and through our advice, or not advice, through our ideas, and that builds that where, when we have a pullback, they believe in us. They're believing in what we're preaching and our strategies, and I think that's key for me getting out to more people. Because I can't go on TV and say it once, because they're never going to – they need to keep hearing it over and over and over.

Dan Ferris:                 Yeah, it's – well, it's an unnatural act. I mean, you know, there are no atheists in foxholes, there are no long-term investors in bear markets, you know, it's just – it's not natural. You just feel so bad – you feel kinda bad when you're down 10, 20%, and then when you're down 30, 40, 50, whatever, you throw in the towel. You take the big loss, because you don't want to lose anymore. And, you know, that's when people like you really shine, though, right? I mean, you're salivating for that moment.

Matt McCall:              I am. [Laughs] Well, on the way down, it's not all fun. I mean, you know, it's not all fun. But I do look at, you know, a normal – I mean, you have to be realistic: You're going to have corrections, 10% to 15%, probably once a year. You know, this year has been kind of strange, because we didn't have our 1% pullback until September, and that's pretty rare. And when we did pull back 5%, finally, from an all-time high in the S&P, people were freaking out. That's, again, where you have to, like, talk to people, say, "Listen, historically, we should've had, like, a 10% pullback by now. This is OK. This is healthy. Stocks don't go up every day." So, yeah, that's what we're here for, you know, to kind of hold their hand. I feel like, I tell people a lot of times, I'm a shrink half the time, just kind of talking you off the ledge. It's OK.

Dan Ferris:                 Yeah, and I'm purposely, like, you know, we could get really nitty-gritty, and by all means, if you have the name of a stock that you're really excited about, we want to hear it. Our listener wants to hear that more than anything. [Laughs] But I try to steer them towards stuff that I think is more important than all this psychological stuff, especially right at this moment, right? You know, we've got the 5% correction, like you're talking about, and people do freak out. You know, it's like they're in some kind of a car that can only drive on smooth road [laughs], and they hit one little bump, and they're afraid the whole thing's going to fall apart and, you know, leave them stranded or send them to the hospital or whatever.

But, I mean, so, for the listeners' sake, then, you know, is there any particular name or names that you're excited about now that you do want to share with us? And if not, it's cool, too.

Matt McCall:              Oh, absolutely. Yeah, the problem is, I'm like the guy who's got 70 kids. I love them all. You know, I was trying to pick one for a conference in Vegas that I'm sending over just this afternoon, and I'm, like, "Gosh, I have so many, you know, I don't know which one to pick." But one that I do like, that I haven't shared in any of my newsletters or anything before, I don't even own any of it or anything, it's a recently public company called Matterport, MTTR is its symbol, and it's about a $6 million company. And what they do is they make 3D videos of buildings and of real estate. So, if you ever go on Zillow or Redfin and you click on a property you like and it says it has 3D, and kind of, you know, basically, you go walking through it. It's amazing, you can walk all through it. That's a Matterport camera and software that does that.

So you're seeing that really big in real estate. Eventually, you're going to see that in a lot of buildings. So, for security purposes, you'll see these buildings all 3D outfitted. You know where everything is. You'll see it in retail. So if you go to Matterport's website, one of their examples they have, it's a soccer club over in England, and it's their store and their stadium. So you could basically walk through their store, like, see the hat you like, click on it, you could see how many sizes they have of each one, if it fits you, what it looks like, and basically, it's like you're there. Take it one step further, in the next couple years this will all be virtual-reality headsets that you'll be wearing and seeing, and all this 3D software, it's going to feel like you're right there.

So, this is a company, again, recently public, it's – if you look at it valuation-wise, you're going to say, "This is so overvalued." It doesn't meet any of the traditional metrics, to be honest with you, but it is a company that I think has, when you look at the TAM, the total addressable market, there's so many different industries that this can really disrupt. Starting with real estate and retail, in my opinion, and then just buildings going forward, for engineers and other types of people that work on buildings. So, to me, this is exciting. This is something that's going to be the norm in the future. And it's a bit of a software play with software companies to me, very scalable, which I like to see, which is really good.

The other one I'll tell you, because this is one I've been going back and forth on buying, but I don't own any of it. And it's kind of a – it's a consumer play, but it also has a bit of a software to it. And it's called Traeger, the symbol is COOK. So it's those high-end grills. You know, I don't have one. A buddy of mine in Nicaragua has one. So, you know, the app on your phone connects to your grill, so it tells you when it's perfectly cooked, you can check on it – it's absolutely amazing, this thing. And it just went public recently – it's been struggling. It hit a new 52-week low, just recently. But I like the valuation on it, it's actually about to turn profitable on an annual basis, it's got huge upside topline growth in sales.

And again, just a really cool niche business out there that, you know, we look at grilling now, there's always going to be the afficionados that use coal, right? That's not me. I need some gas or something. But you look 10 years from now, everybody's going to be cooking with their phone checking everything, telling you when it's done. Nobody's going to have to actually go out there and look. I mean, you'll have the afficionados, again, but – but a really interesting company, again, that I think's being overlooked in the market, because it's just not, you know, it's not as – you're not going to go on CNBC and hear about this grilling company.

You know, Weber, you know, the biggest one out there, they just went public, too, just a couple months ago, WEBR. And that one looks great, too. Both of those look really, really good. And these kind of go in line with a company that went public several years ago, Yeti. And, you know, I don't know if you have any of those Yetis – do you have any of those coolers at all, Dan, have you ever seen those?

Dan Ferris:                 I've seen them, I'm familiar. We had a previous guest who is quite bullish on the company.

Matt McCall:              So, I've never had it and I thought it was always the most overpriced "who the hell is paying that for" like, you know. So at the golf tournament a few weeks ago, I got one, with the MarketWise logo on it, and I loved it. I actually got two of them. I came home, like, "This is changing my life. This keeps everything warm or cold, it's beautiful looking" They're really – it's worth it. I get why there's this, like, cult around it. And Traeger has that similar following, this cult following behind it, and, you know, it comes down to branding. When you have brand loyalship like that, that's good for the stock.

Dan Ferris:                 Yeah, that's cool. It's cool to hear about that from two different guests. So, we've been talking for a while and it's almost time for my final question, but I do want to tell our listeners to head over to mattbroadcast.com, because Matt's going to do a presentation for us, and he is going to reveal the name of some tiny little stock – we can't do it now, but he thinks it'll be the best recommendation in the history of Stansberry. [Laughs] That is a bold call, and if it came from anybody else, I would be calling bullshit all day long.

Matt McCall:              [Laughs]

Dan Ferris:                 I would, I would. But it comes from you, and you've got, you know, many, many huge multi-baggers. Like I said, lots of quadruple-digit returns in your track record, so, you know, I'm paying attention here. So, by all means, everybody go to mattbroadcast.com if you want to learn about this, and just learn more about Matt and what he's about as an investor. That's mattbroadcast.com. But it's time for the final question, Matt. It's the same for every guest on the podcast, and it is simply: If you could leave our listener with one thought today – besides going to mattbroadcast.com [laughter] – what would it be?

Matt McCall:              I think, you know, it's a lot of stuff that we hammered today, Dan, and that's: think big-picture, think long-term. You know, most investors out there are retail investors, average investors, you're going to live much longer than you believe, in my opinion, too, so you're going to need your money to go, live longer for you. And you work so damn hard for your money, let that money work for you in the stock market. I mean, the stock market is the greatest wealth generator for the average American in the history of America, and it's not going to change any time soon. But again, think big-picture, don't go day to day. Because I had a guy tell me, on Wall Street, many, many years ago when I was young and I was down there, he said, "Matt, I could wake up everyday and give you 50 reasons not to buy stocks today, and it's been the same way since the beginning of the stock market. And it's going to be the same way for the rest of eternity, as long as the stock market's around."

So again, invest in good companies and think long term. And finally, when you invest in a company, it's not a ticker symbol, it's not a bunch of letters. You're investing in a company. If you think that company will be bigger in five to 10 years from now, that's probably going to be a great investment. It's a company, people that work at a company. It's not this little bunch of letters. You're actually an owner, believe it or not. So again, think big picture, think stock market, and, man, let that money work for you.

Dan Ferris:                 Oh, very well said. Thank you for that. That is – I almost wish, like, every guest would answer with that question. [Laughter] Yeah, it would be a boring show. But –

Matt McCall:              Yeah. [Laughs]

Dan Ferris:                 You know, so, everybody, go to mattbroadcast.com, and Matt, thanks for being here, man. It's always great to talk to you.

Matt McCall:              Oh, my pleasure.

Dan Ferris:                 I always enjoy it.

Matt McCall:              Yeah, great to be on the team with you. Thank you so much, Dan.

Dan Ferris:                 Yeah, we'll be inviting you back. Now that you're one of us, we'll be inviting you back often.

Matt McCall:              Alright, thanks. [Laughs]

Dan Ferris:                 Alright.

[Music playing]

I really loved talking with Matt, and for the reasons that I said, because he is long-term focused in a highly disciplined manner, and that's really hard. And it's really the best way to be about the stock market, and it's really hard. And I guess it makes sense, doesn't it, that the hardest thing to do is the best thing to do, you know, and not everybody gets it right. But it's there, he's right, the stock market is there, every day, and there's always a reason not to invest. A previous guest named Chris Mayer, a good friend of mine from way back in the newsletter business, he likes to say, "Right now is always the hardest time to invest." And it's true, there's always a reason not to do it, but over the long term, where else is the average person going to get those kind of returns? Just, it's really hard to think of anything.

So, loved talking with Matt, really glad that he's part of Stansberry Research now. I think, you know, Stansberry just, it attracts the best people, man. I'm so lucky and I'm so glad that Matt is one of us now. And once again, go to mattbroadcast.com. I can't say it enough. Especially if you've never heard of Matt before, and you really enjoyed the talk that he and I just had, go to mattbroadcast.com, and you will get more and more and more of the same. It'll be wonderful, I promise. Alright, that was great, really enjoyed it, hope you did. Let's do the mailbag.

[Music playing]

There's a new energy space that has the world's biggest billionaires, like Warren Buffett, Jeff Bezos, Bill Gates, just bailing out of conventional-oil investments. And they're bailing into a brand-new energy space, it's this brand-new place in the energy world that's expected to balloon, just to go up 1,000%, 10 times, in the coming years. And I'm not talking about green energy, OK? This is far bigger than green energy. In fact, it'll likely be the biggest tech story of the next decade. So, the market for this new energy technology is already projected to be twice as big as 5G, cryptos, quantum, Internet of Things, and artificial intelligence combined.

Now, why is that? Well, the innovation here in energy storage, it has the power to really bail out the power grid, which is in trouble these days. And it can solve huge problems that manufacturers are having with electric vehicles, too. So, if you want to learn, there's two steps that you can do to take advantage of this. This is, like, once-a-century energy shift, you know? And if you want to find out those two steps, go right now to www.newenergymessage.com. That's newenergymessage.com. Check it out.

[Music playing]

In the mailbag 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 as many e-mails as time allows, and I respond to as many as possible. Or call the listener feedback line: 800-381-2357. Tell us what's on your mind and hear your voice on the show. Kind of a light mailbag this week. Write in, [email protected]. Comments, criticisms, anything, I love to hear from you, I really do.

The first one, this week, is from Levi N. He says, "Hello, Dan, thanks, as always, for all you do. Just finished the podcast with Keith Kaplan. Throughout the podcast, you praised the use of using trailing stops. You also touched on when TradeStops reviewed Extreme Value's historical picks, and when they theoretically applied their VQ stocks to your recommendations, your returns significantly improved. You do recommend stops on some of your positions, but on others, you hold without a stop. Can you explain your rationale behind not using the stop? And do you think you'll change your approach or thinking for future recommendations, using stops when you previously wouldn't? Thanks. Levi N."

So, Levi, I'll answer the last question first. Who knows what I'll do in the future. I'm always learning, always changing, always growing. If I get better information, I can make a better decision, so "I don't know" is the answer to that. But, "Can you explain your rationale behind not using a stop?" Sure, I can. It's a matter of conviction, for me. I would really like to not use a stop on every stock, I really would, because I know that, over the long term, if I just hold for the long term and focus on really great businesses, you're going to get phenomenal returns in the stock market – phenomenal. These are companies, generally speaking, in Extreme Value, in the newsletter we're talking about that I write with Mike Barrett, we focus on companies that have good high returns on equity, right, and really good, solid balance sheets, and really great businesses, and really consistent margins, and really gushing-free cashflow.

So they have all these wonderful attributes and they tend to have really great competitive advantages in the marketplace that help push these metrics consistently. So, you know, you get these high-return-on-capital businesses, and you hold them for 10, 20, 30 years, and it's what Charlie Munger from Berkshire Hathaway would call a Lollapalooza. You just, you can't make those kind of returns [laughs] anywhere else. So, I know that that is the best way to do it. I also know that most of my readers are, you know, novice or intermediate investors, and when they're down 20 or 25 or 30% or so, they're going to start getting really, really, really nervous. And if we have a down 50 or 60%, or 70 or 80%, because I've had them before, in the scheme of things, I know that's not a problem, but I'm afraid they don't.

And I'm afraid that they will be selling at all the wrong times, and that they will not understand the true meaning of "long term." So what I'm doing is I'm managing expectations. And Porter Stansberry said almost the same thing in public, a few years ago, at our conference. He said, "You know, the best returns aren't from using trailing stops, but most people just can't –" We're not cyborgs, right? We're not machines. We're humans, and you have to manage that. And I think trailing stops is the best that most people can do, and I use them for stocks that I have less long-term kind of conviction about. And I don't use them on businesses like, I mean, Costco, Starbucks, do we need trailing stops on Costco and Starbucks? I don't think we do, and so, we don't put them on there.

Or Constellation Brands, are people going to stop drinking beer and wine [laughs] any time soon? I don't think so. They actually drank more of it in the pandemic, not less. There's a decision we made there. Also, when I tell people to hold gold and silver, and buy the Sprott Physical Gold Trust and Physical Silver Trust, that's a long-term thing. I don't think I'll ever tell anyone to sell them. I've said it before, I sold gold before and I regret it. I'll never do it again. And I'll always be a buyer of it, and a long-term holder, and I think you should, too. And I have 100% conviction about that, I don't need a trailing stop on it.

I hope that explains it for you, Levi. If not, write in again and we'll talk about it some more. It's a great question. It's a great question, it's a complex topic, obviously. You know, you can hear the kind of pushing and pulling and hemming and hawing, and I'm trying to manage expectations here, and help others manage their expectations and their own behavior. It's complicated, so, it makes a great question, and thank you for it.

So, our second and last question this week is from Lodewijk H. Thank you, once again. Lodewijk , you're the greatest listener, man. You write in one, two, three times a week. I love it. Keep it up, man. So one of your questions this week was about when to sell. We were talking about when to sell and you said, "Well, I think it depends. First of all, never take your gains for a certain position until the position is sold." In other words, I think what Lodewijk is saying, there, is, you know, if you have a 20% gain and you sell part of the position, don't be so convinced that you're always going to have a 20% gain in the rest of the position. [Laughs]

It's very wise, it's very simple and very wise advice. So Lodewijk continues: "What I think is, when you are up by 25%, it is time to take some profits. When it is about penny stocks, take profits when they're doubled. Then, simply don't look at it. Lodewijk H." [Laughs] That's good advice. We've heard similar from other folks who are really, really into penny stocks, you know, they talk about taking something off the table at a double. But the other one I'm more curious about, you know, when you're up by 25%, that seems like a really low threshold for profit taking. You must be a short-term trader. Maybe you can write in and tell us more about that.

When to sell is another complex topic. I maintain that nobody really knows when to sell, that's why most people need trade stops. It's not that trade stops is the best time to sell, although it does a very good job over the long term, it's that it's a consistent sell program that keeps you from selling out at the bottom and taking a catastrophic loss in a panic. Alright, good stuff, man, good stuff in the mailbag, love it.

That's another mailbag and that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as I did, and I really enjoyed it. We provide a transcript for every episode. Go to www.investorhour.com, click on the episode you want, scroll all the way down, click on the word "transcript," and enjoy. If you like this episode, send someone a link to the podcast and help us grow. Anybody you know who might enjoy the show, just tell them to check it out in their podcast app or at investorhour.com.

And do me a favor: subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts. And while you're there, help us grow with a rate and a review. On Facebook and Instagram, our handle is @investorhour. On Twitter, our handle is @investor_hour. If there's a guest you want me to interview, drop me a note at [email protected], or call the listener feedback line, 800-381-2357. Tell me what's on your mind and hear your voice on the show.

Till next week, I'm Dan Ferris. Thanks for listening.

Outro:                         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.

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