The Imminent Death of the Middle Class

Episode #336 | November 20, 2023

Episode #336 | November 20, 2023

The Imminent Death of the Middle Class

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey welcome Porter Stansberry back to the show. Porter founded Stansberry Research in 1999, and he recently returned as CEO and chairman of parent company MarketWise (MKTW). With more than 25 years of experience as a financial analyst and publisher to draw on, Porter shares his opinions on the current state of the markets and which areas of the economy look most attractive today.

But first, Dan and Corey talk about investors' unfounded hopes for falling interest rates and some Wall Street analysts predicting that the Federal Reserve will soon cut rates by 150 basis points. "I just don't see that happening," Corey says. Afterward, the conversation shifts to the bond market, the drop in demand for U.S. Treasurys, China "imploding minute by minute," and the biggest "turkeys" who have made the most absurd financial decisions this year. Plus, Dan explores investor psychology and how it has been warped by a decade-plus of low rates and the longest bull market in history...

People are so confident. They think they know how the market works. They think they know the game they're playing. They think they know which way the odds are skewed to the point where they're willing to engage in bets heavily skewed to the other side. That's bubble thinking... "I got this. I'm a genius."

Porter then joins the show and discusses why Ayn Rand's 1957 book Atlas Shrugged continues to be relevant today, General Motors' chances of going bankrupt again, and his "new, old" job as CEO of MarketWise. He explains his strategy for the company going forward...

You've got to make sure that the products are high quality – that they're serving the customers. You've got to get rid of the ones that aren't... If we get to the end of the year and we're sitting on $100 million in cash that we haven't put to work yet, why do that? Why not pay it out to the shareholders who can reinvest it as they see fit?... I'm very excited about where we're going.

Moving on to the broader economy, Porter shares an updated prediction of what he sees coming for the market. In mid-September, he was concerned we were on the cusp of another major financial crisis. But now he thinks the immediate danger may be past. As he puts it...

I'm not suggesting that the risk is gone. What I'm saying is that the markets are no longer acting as though that risk is going to be realized. And in that sense, generally in my career, the markets are usually right.

Porter also shares that most quality businesses out there trade for high valuations, but those with unrecognized quality still present fantastic buying opportunities today. Even companies that have recently made negative headlines can still have incredible underlying value...

Most investors are looking for something that's great when they really should be looking for something that's covered in warts. Because the way you can beat the market is by buying something that's beautiful underneath and that's currently covered in scabs. And then you fix the scabs and you beat the market.

Finally, Porter details what's happening in the bond market right now and why he believes it's worth investing in. And you won't want to miss his parting message, where he explains why it's a great time to be alive despite any global issues or societal problems. "Most investors make the mistake of not being optimistic enough," he says.