Episodes

On this week's Stansberry Investor Hour, Dan and Corey welcome their colleague Bryan Beach back to the show. Bryan is the editor of Stansberry Venture Value and a senior analyst on Stansberry's Investment Advisory.

Bryan kicks things off by discussing passive investing, the stock market's "relentless bid," and what could derail passive investing in the future. He points out that the total assets invested passively surpassed those invested actively last year. Not only is this an important fundamental change, but Bryan says that this alters the dynamic between investors and Mr. Market that legendary economist Ben Graham outlined 70-plus years ago. Then, using Microsoft as an example, Bryan analyzes whether it's realistic to expect the Magnificent Seven companies to return to lower multiples...

As Microsoft's earnings go up, obviously the price we should be willing to pay goes up, even if the multiple stays the same. If we set our stake in the ground saying we're willing to pay 10 times earnings from Microsoft or whatever it was in 2012, you've got to kind of ask yourself, "Is it ever going to get down to that again?" Because this is one of the seven stocks that has that relentless kind of bid.

Next, Bryan talks about all the headwinds Apple has faced in the past six months and why he believes the stock would be down much more than it is today if it weren't receiving so many passively invested dollars. He says the size of the relentless bid reached a critical mass during the pandemic, and now the S&P 500 Index will continue to grind higher indefinitely. The only thing that can offset this natural inertia is bad economic news (such as tariffs), and even that is temporary. As Bryan points out, many passive investors aren't aware of what they're doing, so it would take legal changes to fix the problem...

My dental hygienist [said] "I don't fool around with the stock market." I'm like, "You don't? Aren't you in your 401(k)?" She said, "Oh, I invest in a 401(k)."... She didn't even realize that was the stock market... So this idea [is wrong] that at some point, if the stock market goes down, people are going to panic and stop contributing to their 401(k). A lot of these people at the individual level... are not fearful or greedy. They don't really even know what they're buying.

Finally, Bryan explains that this relentless bid does not apply to every corner of the market. He says small caps and microcaps are still great places to find value. Plus, Bryan discusses the unique situation Tesla is in today, makes a bullish case for restaurant-operations company PAR Technology, and discusses what he got wrong with special purpose acquisition companies ("SPACs") back in 2022...

I was making fun of... TMC, the metals corp that makes robots to mine stuff off the ocean floor. No money, no revenue, no cash flows. So this is back in 2022... [Today, TMC] still doesn't have revenue... What do you think has happened with that since? Yeah, [it's up] 407%.