The Best Investors Treat Trading Like Blackjack

Episode #355 | April 1, 2024

Episode #355 | April 1, 2024

The Best Investors Treat Trading Like Blackjack

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey are joined by George Gammon. George is a real estate expert, entrepreneur, and founder of investment-research publisher Rebel Capitalist Pro. He joins the podcast to discuss the relationship between investing and libertarianism, the biggest areas in which retail investors are making mistakes, and how you can set yourself up to get the best outcomes in trading.

Dan and Corey kick off the show by reviewing the most recent personal consumption expenditures ("PCE") number, what's happening with inflation, and the current state of the economy. Dan astutely points out that even if inflation is declining, "As long as it's a positive number, prices are still going up."

Next, George joins the conversation and explains how he became a self-described "macro addict" without any formal education in the world of finance or economics. Plus, he discusses why he considers himself a libertarian and why most investors and billionaires would fall into this category, even if they don't self-identify as such. He speculates...

I don't know that I've ever met an investor that wouldn't fall into the category of libertarian.

Further, George describes how his investment style is influenced by being a libertarian. By default, his view is that the government is always going to do the wrong thing, resulting in unintended, net-negative consequences. George also goes into detail on the similarities between value investing and trend following. He argues that successful value investors are always looking for a catalyst so that they can catch the trend at its very beginning stages, while stereotypical investors are happy to catch the middle portion of the trend...

At the end of the day, everyone is a trend follower.

Lastly, George explores the biggest differences between retail investors and professional investors. He details the strategy that the best hedge-fund managers use: starting with a macro view and then looking at the fundamentals and the narrative later. George emphasizes that these experts spend most of their time deciding how to position themselves and using asymmetry to stack the odds in their favor like in a game of blackjack...

Most retail investors, I would argue, spend 99% of their time trying to figure out what to buy or what not to buy. And they spend 1% of their time on the portfolio management, the money management, or the risk management. And from what I can tell, the pros do the exact opposite.