Amid headlines dominated by the eleventh-hour accusation threatening Brett Kavanaugh’s confirmation to the highest Court in America – check out Porter’s take on the real crime being committed – the Stansberry Investor Hour crew also has its eye on three of the most white-hot profit frontiers of this decade, brought to their attentions courtesy of this week’s guest Matt McCall, editor of Early Stage Investor.
It feels like a week where all of the usual suspects are in the news for dicey reasons. From Elon Musk’s chances of being arrested within the next year as the investigation over his claims to have secured funding for taking Tesla private heats up, to Amazon’s fate at the hands of the BEZOS Act, Porter identifies the real winners – and victims – you’re not seeing in the headlines.
Buck breaks down the political implications of the $200 billion tariff broadside directed at China, and why President Trump is playing a game that gets more dangerous with every round that neither player refuses to blink.
Porter agrees – and mentions how trade war vulnerabilities, combined with storm clouds looming in the corporate bond market, are a great recipe for “true catastrophe.”
Founder and President, Penn Financial Group
Matt McCall is the president of Penn Financial Group (PFG), an investment advisory firm offering personalized portfolio management. He is also the editor of several newsletters including The ETF Bulletin, which publishes two real-time portfolios based on PFG's proprietary top-down approach to investing.
Announcer: Broadcasting from Baltimore, Maryland and New York City, you're listening to The Stansberry Investor Hour.
Tune in 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: What’s up, everybody? Welcome to a fantastic episode of The Stansberry Investor Hour. My voice is a little scratchy—sorry, I've got a cold. I'm Buck Sexton, co-host of Rising on Hill.tv and a nationally syndicated radio guy.
We have the one and only, the founder of Stansberry Research, our fearless leader, Mr. Porter Stansberry. What’s up, sir?
Porter Stansberry: Don’t bring the whole, “I got sniffles” into this. Come on—you're a pro!
Buck Sexton: Yeah. I know.
Porter Stansberry: You gotta work through it.
Buck Sexton: I should’ve just taken it like a champ, I agree.
Porter Stansberry: Let’s go. Let’s make this the best show we've ever had. Let’s start out with this—over/under. What are the odds that, within the next 12 months, Elon Musk is arrested?
Buck Sexton: Wow.
Porter Stansberry: I'm not saying—I'm not saying convicted, not saying he’s gonna win or lose, but arrested within the next 12 months. Criminal probe has begun.
Buck Sexton: Is that so? I saw him smokin’ a joint on a podcast. That became famous.
Porter Stansberry: Criminal probe relating to his claim that Tesla had—what was the word he used?
Buck Sexton: Secured funding.
Porter Stansberry: Secured funding.
Buck Sexton: But the—
Porter Stansberry: The funding is secured, he said.
Buck Sexton: - but the rumor was that the SEC was going to investigate—which it should.
Porter Stansberry: And that’s criminal.
Buck Sexton: But now, the DoJ is going to jump on top and they're going to do a dual investigation.
Porter Stansberry: Criminal investigation. And, you know, what’s nice about that is, our model portfolio was among the victims of this swindle. Because apparently, the funding wasn’t secured, and the stock didn’t go to $420.00 a share, it went straight down to—I think it’s now around 280. Hmm.
Buck Sexton: 282, last time I checked, yeah.
Porter Stansberry: So, here’s a better question—should we put someone in jail for a statement on Twitter?
Buck Sexton: That he can’t retract, that’s out there for—and not only that, but he taunted people who said he didn't have funding, so.
Porter Stansberry: I would say—and this is just my opinion, but I would say that when I read something on Twitter, my normal bias is that it might be true, right? But I don’t—I would never make an investment decision, long or short, based on something that someone said, apparently off the cuff, on Twitter.
Buck Sexton: I can tell you, Porter, there are a lot of these crypto Twitter accounts out there that are talking—like, Mr. Cryptocurrency and all this stuff, and some of them have big followings. That is probably not—it’s probably not wise to get your cryptocurrency advice from an anonymous Twitter account that could be some dude in Estonia.
Porter Stansberry: Well, how about this? I don't think it’s wise for you to link a cryptocurrency—by the way, who was the person that invented cryptocurrency?
Buck Sexton: A Japanese name.
Country Club Guy: It’s not a person.
Porter Stansberry: Nakashima or whoever his name is?
Buck Sexton: Yeah.
Country Club Guy: They don’t even know if it’s one person. It could be a group of people.
Porter Stansberry: No one knows who that is. So, I would say, it’s not really wise to put your stock of savings into a digital scheme where you don’t even know who the founder of it was, much less how the software works.
Country Club Guy: Satoshi Nakamoto.
Porter Stansberry: Yes—old Satoshi, right? Someone who doesn’t actually exist. So, let’s just say that people’s willingness to do things that are foolish based on what they've read on Twitter is at an all-time high. And I don't really think that we should turn that into a criminal matter. That’s just my belief. My belief is that, when you hear something, it might be true, and that the financial markets are where that truth will play out. But you've gotta do your own research to make sure it is true.
Country Club Guy: But the problem with that—it’s the CEO of the company.
Porter Stansberry: It is the CEO of the company—
Country Club Guy: It’s not some—
Porter Stansberry: - but how do you know his Twitter account wasn’t hacked? I mean, let’s just start there. Even if you do know it really is him, okay—well, that’s a pretty big claim.
Country Club Guy: He would've sent that apology, “Please don’t open anything further until I get my Twitter account”—
Porter Stansberry: What does that mean, “funding is secure”? We don’t really know. He’s not saying—if he came out on Twitter and said, “The Saudi investment fund has agreed to purchase half of the company at $420,000,000,000.00 valuation,” that’s a lot different than saying, “Thinking about taking Tesla private. Funding secure.”
Country Club Guy: Which may have had the same result, right?
Porter Stansberry: Right.
Country Club Guy: Mm-hmm.
Porter Stansberry: My only point is that—
Buck Sexton: What statute could he have violated, Porter?
Porter Stansberry: Oh, securities fraud, 10b-5. He made a statement of fact, a material statement of fact, as an officer of the company that was false. I mean, that’s securities fraud. He’s lying about his security in a way that is designed to enrich himself. There’s no question about any of that. It’s definitely securities fraud.
But what I'm saying is that, normally, securities laws apply to anything that’s sort of like an official company statement, and the SEC did rule that Twitter is an official company outlet. I get all that. I'm not saying that that’s not the way the laws are today, and I'm not saying he shouldn’t be convicted under those laws. I agree with all of that.
What I'm saying is, I think that it’s ridiculous that Twitter is an official company outlet, or that you have a company spokesman—even if it’s the CEO—that is unvetted. By the way, I think it’s ridiculous that President Trump does the same stuff.
If you—there are way more shareholders than the CEO. I think he only owns about 16 percent of Tesla. For him to be speaking for the company without board approval, without even a vetting process from the corporate hierarchy is just reckless and not the way that company should be steered.
Stansberry Research is a private company. I don’t get up and say something to our shareholders without board approval. I don’t communicate directly to our shareholders without board approval. And we're a small, tiny, private company. There’s a huge gulf of difference between a private communication like the kind you would put on Twitter and an official company statement.
So, the very first thing that the corporate lawyers would've said is, “Okay, Elon, it’s nice that you had discussions with the Saudi fund, but there is no signed letter of intent. Therefore, funding is not secured. Funding is under discussion.” That’s a whole different matter.
And so, even though Elon Musk, I don’t believe—I don’t believe—had the intention to lie. Why? Well, because, it makes no sense. Why on Earth would you go lie on Twitter where you're for sure gonna be found out? It wasn’t like he was in the back room whispering to some stock investors, “Uh, hey, guys, I'm gonna make you rich—don’t tell anybody.” He clearly—he clearly, in his mind, thought he was telling the truth, but he got it wrong. And now he’s gonna potentially pay a very serious price.
But I say we stop all this nonsense, we stop all this litigation, and we stop this finger tapping reaction stuff—buy, buy, buy; sell, sell, sell—by saying, “Look, whatever is on Twitter might be true. Period.” It might be true. It might not be true. Don’t make investment decisions based on it. If you think it’s true, then call the company and get the official statement from the company, or have the company say something officially to Bloomberg or Reuters or PR Newswire or somebody that’s an official statement, not just what the CEO or the President of the United States says in a tweet.
Okay, let’s move on. How about this, speaking of tweets? How does the battle with China end? We've got 200,000,000,000 in new China import tariffs—by the way, not to take effect until after the November elections.
Country Club Guy: And excludes a certain company and industries. You know, Apple. Their iPhones and their watches—“Hey, you know, not just yet.”
Porter Stansberry: Uh huh.
Country Club Guy: Mm-hmm. So, how does that work? Lobbying?
Porter Stansberry: It’s ridiculous. So, what do you say, Buck? How is this all gonna end? Do you think China’s not gonna retaliate?
Buck Sexton: Well, Trump is thinking that China’s gonna blink. And I would say that there have been some other—there have been some countries that are not China, notably Canada—that has softened its initial tone, saying that they were gonna come back at us. But China is a different animal, a different beast.
I think that this is gonna get ugly, Porter, and I think that, in the end, maybe Trump is right, but he’s rollin’ the dice in a big way, and we don’t know what we're dealing with here in terms of the long term implications. The fact that it doesn’t take effect until after the election is probably a good thing if you want the Republicans to stay in power, but it is gonna be rough for 2020 if we have huge pain to pay for this one.
Porter Stansberry: Anyways, this whole trade war boiling over next year, at the same time, you've got a trillion dollars in corporate debt coming due? It’s a very scary coincidence in my mind, and I'm not trying to get people to hit the button and sell, I'm just saying, if you were painting a picture of the worst possible outcome, you’d have a trade war draining liquidity from the U.S. Treasury market at exactly the same time you have a collapse of the junk bond market.
Buck Sexton: Yeah, Porter?
Porter Stansberry: That is a recipe for true catastrophe.
Buck Sexton: Earlier this week, I had on a guy, I think he’s the—I don’t wanna say the president, but he’s a senior officer for, like, the American Federation of Credit Unions, right? He’s one of these credit union guys, and he made a point that I thought you would've found very interesting or would echo what you've said, which is, “If people understood how deep in the hole a lot of these companies are and what the corporate debt is actually—what it actually looks like, they would be much more panicked about the long term financial future for this country.”
Porter Stansberry: Certainly, I agree, and I try to raise those warnings, but nobody listens to me, I'm just a newsletter hack from Baltimore.
How about Amazon? Does anybody think it’s possible that maybe there are people out there with access to huge databases of information on all of us who somehow leak a flash drive into their company computer and take some data every now and again and then sell it on the black market? Anybody think that ever happens?
Country Club Guy: Well, just like Facebook, I think it already happens. I'm accepting it.
Porter Stansberry: It happens all the time. So, apparently, there are people who’ve been accepting bribes to delegate—sorry, to delegate—to delete negative reviews, and also to take products that have been banned from Amazon and put them back on the store in exchange for payments of up to $2,000.00. You got problems with customer service at Amazon? Two grand solves all problems.
Buck Sexton: Yeah, who’s taking 80?
Porter Stansberry: Nobody.
Buck Sexton: Gee, that’s probably—that’s not enough money.
Porter Stansberry: So, apparently—and again, I had to go onto certain places on the Internet to find this, but employees were offering internal data and other classified information via the Internet to independent merchants, helping them to boost sales. It seems like that’s something they should do officially.
Country Club Guy: I thought so, too, to make a lot of money.
Porter Stansberry: So, it just seems like Amazon’s got a problem with dirty employees.
Country Club Guy: But they're not getting paid.
Buck Sexton: By the way, what do you say, Porter, what do you say to people who are saying that Amazon—I just wanna hear the Porter answer, I think I know what it might be—Amazon exploits its workers, it’s a sweatshop, it’s terrible, you know, he’s worth so much money, why doesn’t he pay people more? Why don’t we have a $20.00 minimum wage for all Amazon employees? What’s your—because, you know, this is, they're considering legislation. They're calling it, I think, the Bezos Tax or something where, if you don’t pay your workers enough that they don’t qualify for federal aid—essentially, welfare—you have to make up, as a company, the shortfall. This is a real thing that’s being considered in the Congress, I don't think it'll get anywhere, but you've got people talking about the Bezos Tax.
Porter Stansberry: Well, let me say at the outset, I think that punishing anybody for success is ridiculous. Jeff Bezos has built the most impressive business in America, one of the greatest businesses in the history of capitalism and he’s improved all of our lives. The fact that we can get any kind of consumer product we want delivered to our house tomorrow for less than we can buy it at a store is incredible, and we should be grateful. Why you’d wanna punish that guy by making him pay a tax that nobody else pays, I don’t get. I don't think that you should ever public policy to punish the people who have succeeded.
On the flip side, I also don’t believe that companies shouldn’t pay very good wages to their employees. And I don't know the realities of the business that Bezos runs. It’s possible that he’s paying above market rates for all of his people. I just don’t know the business that well.
So, if he’s got—you know, 20,000 people working in warehouses and the going rate for that kind of labor is $15.00 an hour, then that’s what he should pay. Or maybe a little bit more, because he wants to have lower turnover, he wants people to be happy, so pay $17.00 and give ‘em a bonus. And I bet you he already does all that. Like I said, I don't know for a fact, I don't know one way or the other, but if you try to force a company to pay much more than the prevailing wage, all you're going to do is cause wage inflation and price inflation. So, those people are gonna get more and then those increases are gonna filter through Amazon prices, and suddenly, the price of everything is gonna be higher. So, the real impact of those increases to wages is zero. So, you're just playing a silly game, and you're pushing them into higher tax brackets and everything else.
The one thing I would say, though, that’s in favor of paying higher wages—and by the way, you guys should know that the minimum wage at Stansberry Research is in excess of $50,000.00, and with bonuses and things like that, there are very few people here who don’t make at least 10 percent more than that, at least 55 or 60.
Country Club Guy: Sixty is probably a good low number.
Porter Stansberry: Yeah. And I think the average salary here is probably something around 100 grand. But we—these employees work in a very sophisticated, high knowledge environment. You've gotta pay smart people to do hard brain work, and the market for those people is at that wage that I just said. These aren’t factory workers, these aren’t warehouse employees. By the way—nothing wrong with those jobs. I appreciate everyone who comes to work and does a hard job. But the market is pricing different people at different prices and companies should pay that price, not the price of federal government mandates.
Because, as soon as the federal government mandates that, all it’s gonna do is cause inflation throughout the economy. There’s not gonna be any actual increase in productivity, there will not be any actual increase in wealth, so you're just running in circles.
Now, one last thing, which is—I like the idea of saying to people, “If you've got, if you have an employee that qualifies for federal assistance, you have to pay the federal assistance bill.” And here’s why I like that policy. I like that policy, because that will immediately result in the termination of every single person who is on welfare. There’ll be no way any company will ever hire anyone who is on welfare or has the potential to go on welfare. And that way, everyone will have to get the [Beep] off of welfare, because then they're gonna be stuck on welfare forever. And I don't think anybody should have welfare. I don't think my tax dollars should go to help anybody permanently. I think it’s a bunch of bull [Beep].
So, if you make it clear and you pass some kind of stupid law like that, you're gonna make it absolutely clear to all the idiots in the world that you cannot print prosperity. You cannot live at the expense of your neighbors. And so, the unintended consequences of that law would be catastrophic—so, I'm all in favor of it.
Country Club Guy: You've got my vote. Are you running for office? It sounded like it.
Porter Stansberry: I'm not cut out for government service.
Buck Sexton: Porter, I do have an important question for you this week as well. Because, by the time people hear this—at least, I will know if this is the case or not—right when I'm done with Mr. Stansberry here, folks, I might be heading over to talk to the President of the United States for a little bit. Porter, if I can sneak in one Stansberry approved question, what would it be?
Porter Stansberry: Ooh, that’s a good one. Let me come back to you at the end of the show about that. Let’s tease Porter’s question for the President.
And then, we've got one last topic I wanna get out there and I want your opinion on this Buck, and I wanna talk about it from the way that pissed the most people off before we get to our interview—and who are we having on the show today? Have we gone over that with the listeners?
Buck Sexton: Matt McCall, my old buddy. Matt’s great. I didn't realize you guys knew Matt. I've known Matt for years from the media circuit.
Porter Stansberry: Matt is one of our leading editors at Investor Place Media, which is another financial research business that I've recently invested in, so we'll see what Matt’s all about in a minute.
But first, he’s the question I wanna ask you, Buck. If you heard that there was a new YouTube video out, and it featured some disparaging comments about yours truly, here, and you found out that some girl that went to my high school—Winter Park High School, by the way; go, Wildcats—back in the early 1990s, late 1980s alleges that I was at a party at a beach house in New Smyrna Beach, which I did frequent many house parties at New Smyrna Beach, and that allegedly, I was drinking alcohol underage. Which I—
Country Club Guy: You'll testify under oath that you did.
Porter Stansberry: - if I was being honest, I would have to say that there was much drinking going on at New Smyrna Beach in the late ‘80s and early ‘90s. And this fine young woman, who’s now in her mid 40s, alleges that I jumped on top of her and assaulted her and put my hand over her mouth and nose so that she could not breathe, and this happened—what would that be now, 30 plus years ago?
Buck Sexton: Probably with 27—
Porter Stansberry: About 30.
Buck Sexton: - 27, 28 years ago, yeah.
Porter Stansberry: Almost 30 years ago.
Buck Sexton: Mm-hmm.
Porter Stansberry: And that she remembers it clear as day, but she’s never, ever mentioned it to anyone ever before. She didn't mention it to any of her friends the night of the event, she didn't mention it to her parents when she got home, she didn't mention it to any police authority, she didn't mention it to the school guidance counselor or the police officer who’s in the school every day. She never mentioned it to any of my friends. She didn't go up to them and say, “What are you guys doing? Porter’s out of control! He’s assaulted me!” She didn't mention it to any of her coaches, she didn't mention it to any of her clergy, she didn't mention it to her best friend.
She mentioned it to no one, ever, until somebody that she really didn't like—perhaps me, some day—ran for President. Don’t worry, I'm never gonna run for President. And then she comes out of the woodwork and puts this thing on YouTube.
The question I have for you, Buck—as a member of the media, don’t you have any obligation whatsoever to say, “This, while it may be true, has zero credibility and is not gonna qualify for inclusion on our show or any major show or any newspaper, because it cannot possibly be verified”?
Buck Sexton: If it wasn’t a question of preventing a Supreme Court seat from possibly going away from the progressive left, then I think the answer would probably be yes. Porter, this is straight up, as you know, straight up politics.
I had a woman who was the leader of the Women’s March sit and say that, if Kavanaugh is confirmed, and I quote, millions of women will die. And she’s taken seriously, by the way, at CNN and these other places. So, that’s how out of their minds a lot of people are over this issue, so they will do and say anything.
By the way, to your analogy—it’s even worse than that, Porter. The accuser in this case, Professor Ford, does not know what month this occurred in. Can’t tell him the month. Knows the year, doesn’t know the month. So, was it January or was it June? Can’t tell you. And doesn’t know where it happened. How is it that you have a crystal clear memory that’s from 30 years ago—
Porter Stansberry: That’s absolutely ridiculous.
Buck Sexton: - and you don’t know where it happened?
Porter Stansberry: If I had been beaten up at one of these house parties—and by the way, there were several times people would've liked to have beat me up, but I made quick exits—there’s no way I wouldn’t remember what house it happened at. This is ridiculous!
Buck Sexton: It is. It is very—
Porter Stansberry: This was a formative experience of my life. This has changed my relationship with men, with my husband, I had to seek counseling over this. “When did it happen?” “Oh, I can’t remember.” “Where were you?” “Oh, I don't know.”
Buck Sexton: She knows exactly what happened in that room she claimed, she knows who was there, and even though both of those individuals don’t just deny that—I initially thought, Porter, that—because, you know, they said that one guy jumped on top of her, groped her, covered her mouth, and then she kinda got away. But she said the other guy jumped on top of them and, I mean, I assume he wasn’t trying to have some kind of—force some kind of a three-way, which I guess would be gang sexual assault. It sounds like they were roughhousing with her or something like that. That was my though—
Porter Stansberry: Oh, roughhousing—roughhousing? That’s just mansplaining.
Buck Sexton: Well, but no, but I thought maybe that would be the explanation, initially. But that’s not the explanation. Kavanaugh says she’s a fabricator, that this is a complete and utter fabrication. This would be like somebody saying, you know, “I had an affair with Porter Stansberry last night in Shanghai,” and you're like, “Well, I wasn’t in Shanghai last night,” that would seem to put an end to it. But she’s taken away time and place, which—Porter? Thirty five years passing, if you can’t get a time and place nailed down, it’s basically impossible to prove your innocence, because those are the only ways you could prove she’s a liar.
Porter Stansberry: No, I don't think anyone should have to prove their innocence. I think this is absolutely asinine, and I think that Kavanaugh should be able to sue this woman for libel and for whatever else. I mean, just—it’s just, and every media company who reports it, this is absolutely reckless, this is unconscionable that this man’s reputation is being allowed to be besmirched this way.
And finally, let me just say something else about this. I am so utterly sick of the mainstream media’s willingness to believe that good people who happen to have been from very well-to-do, sophisticated families, and went to expensive private schools—or in my case, went to a cheap-ass public college but joined an elite fraternity—completely, the willingness to believe that those people are all rapists just infuriates me.
Look at the UVA lawsuit or rape thing from, I don't remember when it was, three or four years ago.
Buck Sexton: Rolling Stone—the Rolling Stone piece, yeah.
Porter Stansberry: Remember when Rolling Stone magazine printed this totally unsubstantiated, totally made up, fabricated claim of a woman who said she was gang raped at a fraternity house. And back when I was in college in the mid ‘90s, this kind of thing would happen all the time at the University of Florida—so-and-so girl would get drunk and say that she was assaulted at a fraternity house. Well, when the truth ever got out, by then, it was a year later, the fraternity had been suspended, all of their reputations were besmirched, and it always turned out, nothing happened.
Why? Well, because I had, I don't know, 120 brothers in my fraternity at University of Florida. Were a couple of them creeps? Yeah, they were. A couple of them were real [Beep]. But guess what? If anyone ever saw one of those guys being a creep or being a [Beep], that guy would get his [Beep] whipped immediately. Why? Because we all have older and younger sisters. We all have girlfriends. We all had mothers. We don’t—it’s just complete [Beep] to believe that you could be in the company of a dozen guys at my fraternity house or anywhere in my high school and that a guy who was being, who was assaulting a woman would just be looked at as, “Oh, there goes Billy, just roughhousing.” Bull [Beep]! We would've [Beep] taken that guy and thrown him through a window. Immediately. And it infuriates me that the mainstream media just believes that men are all rapists.
I read today in the, on a report from somewhere in Australia. Some woman is claiming that having unsatisfying sex with your spouse is worse than rape.
Country Club Guy: Guilty!
Porter Stansberry: Because she was saying that, you know, rape is like getting hit by a bus, but it only happens once. And having an unsatisfying sex life with your spouse could go on for decades. And I'm thinking—really? We're now equivocating a violent sexual assault with, you know, a husband who unfortunately doesn’t satisfy his wife? Are you serious?
What is goin’ on? When is somebody gonna go, “Stop blaming it all on the men!”?
Country Club Guy: That’s a good question. Buck, you have a response?
Buck Sexton: I'm just lettin’ it hang out there with Porter, man. He’s on fire right now.
Country Club Guy: Oh, okay, okay. Alright.
Buck Sexton: No, Porter, you know, this is all—you know, I interviewed Alyssa Milano recently, who’s one of the big #metoo people, and there was a really telling exchange where she brought up this guy Aziz Ansari, who—
Country Club Guy: Comedian.
Buck Sexton: - yeah, he’s a comedian, he’s on Parks & Recreation the TV show, people listening practitioner don’t know him, some of them might. He’s an Indian—well, he’s born here, but his parents are Indian, so he’s American, but of Indian extraction.
Anyway, he had this thing where a girl had, like, a one night stand with him, and she wrote this, essentially, essay for a magazine about how gross it was, just meaning that it was gross. I mean, it was nothing—and people thought that that was somehow because he used his celebrity status to entice her to have sex. So, there was full consent, but because it was gross, that was considered #metoo. And I looked at her, and I'm like, “Why would that be?”
Porter Stansberry: Why didn't he write an essay about what a dumb [Beep] she is? That’s what I—because if I was him, that’s exactly what I’d do. One, because it would be funny, and two, because it would expose how ridiculous it is for her to kiss and tell, because if she’d kiss and tell, then somehow, she’s part of #metoo, but if he does it, well, then, you know, it just makes him—
Country Club Guy: He’s a monster.
Porter Stansberry: Right, but it'll just show the fact that she’s the one being a monster.
Buck Sexton: They're gonna do—
Porter Stansberry: I mean, who knows—who knows why she decided to have sex with him. Maybe she was attracted to him, and then maybe when he didn't want to be in a relationship with her, maybe then, she changed her mind.
Country Club Guy: I think that’s the story. She was starstruck, and then he’s, you know, “Hey, thanks, but it was a casual thing.”
Porter Stansberry: I think we're forgetting that hell hath no fury like a woman scorned. That’s what I think we're forgetting.
Buck Sexton: Monday, the Kavanaugh accuser is gonna be on Capitol Hill testifying. It’s gonna be the ugliest day in American politics since Trump won the election, I'll tell you that.
Porter Stansberry: I got a bet for you—I bet nobody throws rotten tomatoes at her as she’s walking into or out of Congress, and I think that they should. I think her behavior is absolutely reprehensible. Absolutely reprehensible.
Buck Sexton: I mean, I've gone on record and said—I mean, I wrote a piece about this for The Hill. I just said I don’t believe her. And it’s interesting that people, all we will ever have—
Porter Stansberry: I'm not saying I believe her or not. I'm saying that question should never be asked. I'm sorry, but you should not have the right to, 35 years later, accuse someone of a very serious crime when you can’t even remember what month it was or where it happened. I mean, that’s just so ridiculous! Forget the statute of limitations—which, of course, has long since passed, although if it was rape, maybe there wouldn’t be a statute of limitations.
Buck Sexton: It depends. Rape with force can sometimes have no statute of limitations, it depends on the case.
Porter Stansberry: But this is just ridiculous! And by the way, where are the adults in the room? Where is someone in Congress who stands up and goes, “This is absurd!” There’s not a single member of Congress who couldn’t have their reputation besmirched if this is gonna be our threshold for accountability and credibility. Are you kidding me? Some anonymous—this person might be crazy. We already know she was in psychiatric counseling with her husband. Maybe this is part of her delusion.
Country Club Guy: Hey, Buck, how does it get to go before Congress when her lawyer, and I quote, says it’s not her job to corroborate the story? How does it even get there?
Buck Sexton: Her lawyer—yeah, her lawyer doesn’t seem very smart. The initial allegation was given to her Congresswoman out in California, so she wrote a letter to her Congresswoman, I think she also called the Washington Post tip line, and then from there, it made it to Senator Feinstein’s office.
But this has all been planned, folks. I mean, the big is to pretend, “Oh, we don’t know where the leak came from. This isn’t political, this is just—it just happened that this came out at the very end, right when they're ready to vote,” like we're all a bunch of morons. It was leaked by somebody who was coordinating with other people that had access to the information to do maximum damage to Kavanaugh, and the Democrats are an absolute [Beep] disgrace, and that’s what this shows you.
Porter Stansberry: Hey, but listen. But don’t even try to tell me that if the roles were reversed that you wouldn’t have the fringe crazies in the Republican Party doing something exactly the same way.
Buck Sexton: No, they don’t do that. Porter, I can’t go there.
Porter Stansberry: Except for—but hold on, but hold on. Their bogus accusation wouldn’t be a sex crime, it would be that he was a member of the Communist Party or something crazy like that.
Buck Sexton: Nah, nah. Kagan got through, there were no protests, there was no nothing. Sotomayor got through—no protests, nothing. And those are lefties, by the way—hard core lefties now sitting on the Supreme Court, especially Sotomayor—and there was nothing. It’s—Porter, there’s a culture of protest and hysteria that exists on the political left that does not have a counterpart on the right.
Porter Stansberry: Alright. Well, let’s—unfortunately, let’s put the politics to bed, and I hope we never have to bring the back, but we will not be that lucky.
Buck Sexton: How am I gonna make money? Someone needs to tell me how to make money, Porter. Papa Buck needs a new pair of shoes.
Porter Stansberry: There will be just more madness ahead, and I'm really hopeful that some members of that Congressional body that are doing this investigation—I’d love for somebody to simply say, “I'm not gonna make any statement or any questions. I think this is a complete farce,” and just drop the mic, and have the entire Republican Party refuse to even participate in this farce.
Country Club Guy: Well, I believe we have Matt on the line, but Porter, maybe you can ask Matt about something dear to your heart, Coca-Cola and marijuana and maybe a future product.
Porter Stansberry: Yeah, I don't know if Matt will know anything about that or not.
Country Club Guy: I think he will.
Buck Sexton: I know about that.
Porter Stansberry: Oh!
Buck Sexton: I know about things.
Porter Stansberry: Alright.
Buck Sexton: Today, our guest is Matt McCall. Matt is the Founder and President of Penn Financial Group, an investment advisory firm serving individual and institutional clients. Matt is also 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.
Matt is known around Wall Street for his extensive technical analysis expertise and his insightful chart analysis that leads to precise buy and sell points in the best stocks and ETFs that passes extensive top-down screenings. His track record speaks for itself—across his multiple newsletters, more than 80 percent of his recommendations since 2015 have been profitable for his subscribers. Matt is the editor of two newsletters, “Matt McCall’s Investment Opportunities,” and “Matt McCall’s Early Stage Investor,” where he uses his next generation approach to investing with trends that have the potential to produce grand slam returns using his invest like a venture capitalist mindset.
Please welcome to The Stansberry Investor Hour Mr. Matt McCall.
Porter Stansberry: Matt McCall, are you there?
Matt McCall: I am here. How are you doing, gentlemen?
Porter Stansberry: I'm doing just fine. Matt, where are you calling from today?
Matt McCall: Nashville, Tennessee. I just got in this morning from—I got back from Italy.
Porter Stansberry: Oh, very nice. And Nashville is where you make your home?
Matt McCall: It is now, yes. I moved from New York City about a year ago.
Porter Stansberry: Ah, very good. And Matt, can you give our listeners just sort of a basic introduction about what your newsletter, “Matt McCall’s Investment Opportunities” is all about? What are you looking for when you recommend stocks to your readers? What’s your classic setup? Maybe give us an example or two.
Matt McCall: Sure. You know, basically, you're gonna be looking for big picture themes, getting in early before, obviously, it’s on the cover of TIME magazine, The Wall Street Journal is talking about it. And there’s themes that are gonna change the way that an industry is done right now.
An example is transportation. Transportation is a seven plus trillion dollar industry that really hasn’t been changed since the combustion engine was put into a vehicle. It really hasn’t changed much at all. I believe, in the next 10 to 20 years, we're all gonna be sitting in electric cars, we're all gonna be sitting in self driving cars, and we need to look at that theme and how that’s gonna change the world. And along that way, we make money, whether it be all the sensors that need to go on the cars, whether it be the electricity in there, whether it be 5G and we need to connect all these cars.
So, I look for the big things such as that. Gene editing is another one. It will transform the way that we do health care in the future. It’s gonna be preventative and it’s gonna treat diseases in ways that have never been treated before.
So, I try to find the big themes and then the companies you've never heard of before they become mainstream and try to get in, but look for those big 20, 30, 50 baggers.
Porter Stansberry: Alright. Let me ask you about a couple of specific, emerging new industries. Marijuana is on the mind of a lot of our subscribers, and I'm sure the same thing is true for your readers as well. I was scanning the markets last week, and I noticed this little stock—you probably are more familiar than I am. I think it’s called Tilray. Have you ever heard of Tilray, Matt?
Matt McCall: Mm-hmm.
Porter Stansberry: And I noticed—
Matt McCall: I know it very well.
Porter Stansberry: - and I noticed the stock was jumping like 10, 12 dollars every day, just blowing up. And so, I went on my Stansberry terminal—I don't know if Matt has ever had the opportunity to use the Stansberry terminal, but Matt, we're building a competitor to Bloomberg, here, we've gotta give you a free trial so you can try it out and see if you like it. And anyways, I pulled up Tilray on the Stansberry terminal, and what I saw was, it was valued at $10,000,000,000.00, currently, and that it had sales last year of $20,000,000.00. And I wanna—you'll notice, that’s not a typo. What do you call a typo on a podcast? A speako? [Laughter] That there’s a whole lot of zeroes missing there on one side or the other. By the way, it’s up 23 percent today.
So, the question I have for you, Matt, is, if you get into these things early, how do you know you're not a part of just some crazy mania that is gonna get you wiped out?
Matt McCall: Yeah, I mean, that’s a great question, because there are, obviously, a lot of manias that have wiped out a lot of people. I mean, you have to take a step back and think about it just logically, Porter—is this something that you believe will be around in 5, 10, 50 years from now, or is this something that—you know, there’s a difference in my mind between a fad and a trend.
Back in the day, I used to look at a lot of retail, a lot of clothing because my ex-wife was in fashion. So, what I looked at back in the day was Heelys. I don't know if you remember—I don’t have any kids, but they had those little sneakers that had wheels in them. Every kid’s wheelin’ around—that stock went up hundreds and hundreds of percent. At the same time, I was looking at a company called True Religion that was making jeans.
I said, “Okay, well, that little wheel thing is not gonna be around. Any shoe company can make that.” I stayed away from it. The company is now bankrupt, I believe. True Religion ended up getting bought out at 50 times whatever it IPO’d at back in the day, and people are still wearing those ugly-ass jeans, but you know, it was a viable trend that actually stayed along.
When you look at marijuana, the valuations are astronomical. They're not gonna make sense. And if you do any type of value investing or fundamental investing, you're gonna say no to all of them. If you said no to Tilray a month and a half ago, you missed out on almost 600 percent profit.
To me, when I look at marijuana, it is gonna change the way that we do quote-unquote entertainment when we go out. People over abuse alcohol all the time. You know, I love a good glass of wine. I was just in Italy for three weeks, where they drink wine all day, every day. As soon as the sun came up, I was drinking wine until I couldn’t drink any more. And the way I felt in the morning wasn’t very good. Take a hit of marijuana? I feel great in the morning.
And you look at how big those industries are. Cigarette sales in the United States—77,000,000,000. Beer—110,000,000,000. Annual wine sales in the U.S.—60,000,000,000. They're predicting, this is telling, that by 2030, you'll have marijuana sales of 75,000,000,000. This is a real industry. If for some reason it becomes illegal everywhere—which is not gonna happen, the exact opposite is happening—then we stay away. This is not a fad, this is a trend. This is overtaking alcohol. This is gonna remove people from smoking cigarettes, and this is gonna be a way of life, going forward.
Porter Stansberry: Matt, do you think that people who buy Tilray at $10,000,000,000.00 are gonna have a successful investment?
Matt McCall: In the next year? No, no. And I'll tell you a story, because about three weeks ago—and I don’t play options, it’s not my thing. I did 20 years ago. I saw Tilray come up to like $80.00 a share—and it’s at 150 right now, just so you know—at $80.00 a share, I thought, “Boy, this thing is so overvalued, it’s coming back down to 30 or 40,” and I bought some puts on it. So, you can tell how well I did on that and why I stay away from options.
Porter Stansberry: [Laughter]
Matt McCall: But obviously, they're gonna be worthless in about four days, three days from now. I mean, it was ridiculous. You know, I thought it was overvalued at 80; it’s now up to 150. No, I don't think buying it here, Porter, but I also think there’s a lot of great opportunities out there, smaller companies that are overlooked, that sales are about as close as they are to Tilray’s, that are trading under a $1,000,000,000.00 valuation—that are still high, but there’s big potential.
So, no, I wouldn’t buy Tilray here today with your money. I would not do it. But I think there are opportunities in marijuana.
Porter Stansberry: Well, let me ask another question about marijuana. I'm the kind of investor, I actually don’t want a stock—this is, you're gonna think I'm completely nuts—but I don’t want a stock that goes up 600 percent. And the reason why I don’t want that stock is, I've learned a lot of hard lessons the hard ways. Stocks that go up 600 percent are exactly the same stocks that come down 90 percent. They always do. And, unfortunately, you can never just know for sure which express train you're on. [Laughter]
And when it comes to money, I don’t like to make lots of small bets, I like to make a few big bets and watch them very closely. So—this is just me, I'm just talking about me personally. I’d rather own McDonald’s than own—what’s the new burger chain?
Buck Sexton: In-N-Out?
Country Club Guy: Shake Shack?
Porter Stansberry: Yeah, Shake Shack. I’d rather own McDonald’s than own Shake Shack. Yeah, Shake Shack’s gone up a lot more the last five years, but I don't know for sure whether Shake Shack’s gonna be here in 10 years. I know McDonald’s will be, and I know they're gonna continue to grow at 8 to 10 percent a year, and I'm gonna get a lot of wealth out of that. So, I’d rather own a company like McDonald’s, you know?
And when it comes to vice, I’d rather own a company like Constellation Brands, because I understand—at least I think I understand how the distribution of beer and wine works, and I understand their competitive advantages. And I feel like Constellation Brands is more likely to make a ton of money on marijuana than Tilray is. I'm certainly gonna be more comfortable owning it.
Are there more conservative, more established businesses that you would put into that marijuana sphere? So, big existing businesses that could see a big increase in sales? And by the way, with home delivery, you know, McDonald’s might be one of the big winners from the pot craze, because—
Matt McCall: [Laughter]
Porter Stansberry: - from what I, from what friends told me, when you smoke dope, sometimes you get the cravings for junk food.
Matt McCall: I've heard that same rumor. [Laughter] But yeah, to go back to your question, Porter, there are bigger names that I like, and let’s call them ancillary plays that aren’t pure plays where they're actually growing the plant or actually selling the plant.
Constellation is a great example. You know, they own 38 percent of Canopy Growth, which is the largest publicly traded marijuana company in the world. So, that’s a great way to play. They own 38 percent, I’d say you're gonna get a lot of exposure to it, plus, you'll have the brands like Corona and Modelo, they own Mondavi wines. That’s a great play if you wanna have exposure to marijuana with a less aggressive play.
There’s also, you can look at companies such as Scotts Miracle-Gro, which helps with the growing of marijuana as more marijuana is grown around the world. You could look at some pharmaceuticals that will be using the CBD aspect of the plant, the non-psychedelic aspect of the plant, that will—has been proven, and I've seen it firsthand with people how it helps with seizures and anxiety and different issues like that.
You can look at Coca-Cola. There’s rumors that they're gonna come out and buy part of Aurora and they're gonna make CBD drinks, and that type of deal is gonna be done in the next couple days, in my opinion.
So, yeah, there’s a lot of big name plays where you can buy into and have exposure—secondary exposure to this market without going directly to Tilray or Canopy or any of the direct players.
Porter Stansberry: One more marijuana question for you and then we'll move on to something. How do you think—when you look down the path into the future, obviously, marijuana has become legal in most places in the U.S. or a lot of places in the U.S. It’s legal in Canada, it’s legal around the world.
How do you think that, as marijuana gets integrated into society and eventually becomes legal in the banking system and a lot of the other things that are holding it back right now—do you think it’s likely that a company like Philip Morris or one of the big tobacco players ends up rolling up all these little guys and becoming a dominant, branded provider?
Matt McCall: Oh, absolutely. I mean, it’s gonna be just like anything else. Look at the soft drinks, how that’s really rolled up. And any time a new soft drink hit the market, you had one of the big names come in and buy it up. You know, Kobe Bryant’s new sports drink just got bought up for a ton of money. You know, any time a little guy comes up, they get bought up.
So, you will see this. I mean, in my marijuana watch list I have here in my trading system, I have over 200 stocks. One hundred of them will not be around, I will guarantee that, maybe 150 will not be around in three or four years. You know, they're little. They're jokes, they're little players. A lot of them will be bought up by the big names.
But a company like Canopy, which Constellation owns 38 percent of, they've been buying up smaller companies and they will continue. And the key that’s often overlooked in marijuana is, you talked about Canada, which, on October 17th, you can actually buy it recreationally for the first time, and you look at the United States—this is a global play. When I was in Italy just last week, in Rome, they had these new cannabis shops that went up earlier this year. They're very low grade cannabis, so you can walk right in and buy it, you don’t need anything for it.
So, if you see the EU legalize marijuana—which it will, in my opinion, in the next four or five years—that’s a huge boom. You're seeing, Australia is supposed to be a huge market for it. So, there’s gonna be a lot of international plays, and the only way for companies to take advantage of that is to be a big name player, like you said.
I don't think Philip Morris is getting into it. I think that company’s in trouble. But I think you're gonna see some of the soft drink and some of the food companies really make big moves into the space.
Porter Stansberry: Very interesting. Beyond marijuana, I wanted to ask you just for your next best growth sector. Where is something—you mentioned transportation, so let me skip that one, too, but you've got marijuana, you've got transportation. What’s another huge growth sector that you're focused on?
Matt McCall: I'm gonna say health care, and within there more particularly, gene editing. You know, there’s three publicly traded companies that really use what’s called CRISPR-Cas9, it’s a way to edit genes in the future. That, to me, is gonna be a game changer, and we're putting out an issue, actually, tomorrow that’s a follow up on our gene editing issue, and we're looking at genetic testing companies. There’s a lot of companies that are small right now, but they are kind of the picks and shovels of the health care industry, and they will be needed for anything going forward.
When it comes to health care, we've always gone into the doctor. I was at my cardiologist’s a couple weeks ago, and he asked me about my family history. I mean, this guy was in there for an hour asking about my uncle. Who the hell cares what happened to my uncle? You know, talk about me.
Instead of looking past going forward, we're gonna be looking forward. Instead of looking at the past, we're gonna be looking forward in the future. And what’s gonna happen is, instead of—you know, looking at family history, that’s great, but look at my genes, what I'm made up of. Look at my genomes, the ones that are sequenced and tell me what I'm susceptible to. And that’s gonna change the way—we're gonna be such preventative patients going forward, it’s amazing. I'm a hypochondriac. I go to the doctor all the damn time. This is gonna save me so much time because I know what to look for. I mean, this is gonna be up in a trillion dollar industry.
There’s things called monogenic diseases. There’s over 10,000 of them that they know about, and this is when there’s one gene of all the genes in our body that’s screwed up. And if we can go in and just fix that, it cures the disease—sickle cell disease, cystic fibrosis—I can go on and on. And if you can go in there and repair that one gene, you are cured. And the addressable market right now for a new diagnosis every year is $75,000,000,000.00. If we go back to the people that have the diseases now, it’s a $2,000,000,000,000.00 addressable market. This is a game changer to me.
Porter Stansberry: Yeah, and you know, what they may be even able to do is, they may be able to repair those genes even before a baby is born.
Matt McCall: Yep. I just wrote an entire section on that as soon as we got on the phone for about, a company that does, that’s the leader in the prenatal genetic testing.
Porter Stansberry: Yeah, it’s just an amazing, amazing revolution that’s coming. Well, Matt, thank you very much for being our guest today, I appreciate your time. And it’s really fun to talk to a guy who is as enthusiastic and as knowledgeable about stocks as anybody, and great investments, great information for your subscribers.
For folks who want to figure out more about what Matt McCall is doing for investors and want to learn more about the giant emerging market in cannabis, the new gene editing stuff and all the transportation stocks that he mentioned, you can go to a website. Now, those of you who are longtime podcast listeners are going to understand that we specialize in making URLs that are impossible to communicate across a podcast. We've done a really good job of that today.
So, to find “Matt McCall’s Investment Opportunities,” the special offer we have for you today, which is a big discount, is two years for only $199.00, you can go to www.IPMpodcastoffer.com. Now, where is there IPM in front of podcastoffer.com, we don’t know, because it’s “Matt McCall’s Investment Opportunities.” Why not McCall’sPodcastOffer.com? We don’t know. We do know it’s IPMpodcastoffer.com, that’s IPMpodcastoffer.com. By the way, there are two F’s in offer. IPMpodcastoffer.com.
Two years of “Matt McCall’s Investment Opportunities” for only $199.00. Thank you to the crack marketing staff here at the podcast. We would never be able to survive without you, and thanks again, Matt, for the time. I look forward to having you back on the show, and I really can’t wait to have you back on a couple months from now and just find out what’s happened with Tilray. Because watching that stock every day is like—is like watching somebody walking on the edge of a precipice. It’s only a matter of time until they fall!
Matt McCall: Yeah, that’s right. [Laughter] I know, I know. Thank you very much. Pleasure being on, Porter.
Porter Stansberry: Okay. See you later.
Matt McCall: Thanks. Bye.
Porter Stansberry: Buck, shall we get to the mail bag?
Buck Sexton: Let’s do it. We have, first up here—if you wanna be a part of it, by the way, [email protected], just send us an e-mail there. We have James, like my first name, writes, “Hello, Porter, and everyone.” I guess that means me and Country Club Guy. “Really enjoying all the great info on my subscription, especially credit opportunities. I found I have a hard habit to break, because every time I research a bond, I find myself wanting to go to the chart of it. Is there any website or place that charts the movement of a bond? Again, great work.” To Porter.
Porter Stansberry: Yes, there is. If you go to FINRAMorningstar.com or you just search and Google FINRA bond prices or FINRA Morningstar bond prices, you will find an interface that allows you to search the public reporting thing that FINRA organizes where everyone who trades a bond has to report what the trade was. So, you can see all the latest trades, and you can chart the prices of the bonds.
Buck Sexton: Alright. Now we have e-mail number two, from Matt—Matt V. “Porter, Buck, Country Club Guy—I can’t agree more with Porter and his opinions about the African-American community. Porter, you have testicles the size of church bells for airing your opinion so openly like that. I know what it means to be woke. Thank you for explaining, Buck. Now I can laugh at all the Internet memes. Good American card—what a great idea. Maybe I'll run with it and start issuing Good American cards. I'll send serial number 001 to Porter. Sorry, Buck—swamp creatures aren’t qualified.” Ouch!
Porter Stansberry: [Laughter]
Buck Sexton: “Penn got really whiny about the S-hole countries topic. What’s up with that? I don’t give one crap about hurting Indian or Bangladeshi refugees’ feelings. Thanks for standing your ground, Porter. Love the show, Private Wealth Alliance Stansberry ________ Woke Long Armor.”
Country Club Guy: Do you remember [Cross talk]?
Porter Stansberry: Signed nameless for his own protection. Yes, I can’t wait for all the things I have said about the poverty industry to be taken out of context and used against me.
Buck Sexton: Well, when you run for President, and I'm running your com shop, I'm gonna be like Atilla the Hun. We are gonna crush the opposition.
Porter Stansberry: [Laughter]
Buck Sexton: We're gonna drive them from their villages and hear the lamentations of their women.
Porter Stansberry: Take from them everything, give to them nothing.
Buck Sexton: Yeah, exactly. So, that’s the plan.
Country Club Guy: Well, before we end up, you—
Porter Stansberry: Country Club Guy?
Country Club Guy: - are gonna give Buck a question that you wanted to ask—
Buck Sexton: Assuming that the interview happens, which is always an iffy thing with the leader of the free world, and assuming I can get in a question—Porter, what would be your question for the President of the United States? From Porter to Donald’s ears?
Porter Stansberry: Oh, boy. There’s a lot of questions I know I could set him up that would be very hard for him to answer. Hmm. Let’s see. Hmm. I’d like to ask him if he thinks having American forces in so many countries overseas improves our safety or puts us more at risk.
Buck Sexton: Okay. I'm writing that down. I'm gonna try to get that to him.
Porter Stansberry: I think, Buck—you can Google it to know for sure, but I think we have troops stationed right now in 120 different countries around the world.
Buck Sexton: That sounds right. It’s about that.
Porter Stansberry: And I wanna know if he thinks that that strategy makes sense.
Buck Sexton: Alright. I will pass that to the leader of the free world. Porter, anything else on your mind before we close up shop?
Porter Stansberry: No, Buck. I think that that was a pretty good show, and I encourage our subscribers to check out Matt McCall’s work. I think it’s very good, especially if you're interested in those kind of big growth opportunities—two years, $199.00, IPMpodcastoffer.com.
Buck Sexton: Alright, good stuff. Thanks, everybody.
Porter Stansberry: Love us or hate us, just don’t ignore us, and we'll see you 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 e-mail. Have a question for Porter and Buck? Send them an e-mail 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.
[End of Audio]