Episodes

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Dan Ferris:                 Hello and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report, both published by Stansberry Research.

Corey McLaughlin:    And I'm Corey McLaughlin, editor of the Stansberry Daily Digest. Today we talk with Louis Navellier, Chairman and Founder of Navellier and Associates, and an editor at our corporate affiliate, Investor Place.

Dan Ferris:                 And Louis is also one of the legends of our industry. He's one of the first people whose newsletters I ever read when I got into this game back in the late 1990s. And I can't wait for you to hear our conversation with him. He's a fun, smart, well-informed guy. So let's do it. Let's talk with Louis Navellier, let's do it right now.

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Corey McLaughlin:    With Trump returning to the White House, the S&P has broken 6,000 for the first time. But a former Trump adviser says a little-known stock could be the biggest winner of 2025. This small company is quietly driving a revolution and could be set to explode under a second Trump presidency. Find out the stock ticker and get a free report at www.bradmessage.com.

Dan Ferris:                 Louis Navellier, welcome to the show. Really happy to have you on.

Louis Navellier:          It's an honor to be here.

Dan Ferris:                 Yeah, I've been wanting to get you on for some time now. I'm glad we finally got around to it. You're one of the first people, when I got into this business a long time ago back in the late 1990s, you were one of the people that I used to read. And you're still here, man. You've been doing this − I was looking up, do I have it right? You've been publishing your advice since 1980. Is that right?

Louis Navellier:          Yeah. Yeah. I've been at it a long, long time. 40-plus years.

Dan Ferris:                 So I wonder if you could, this is your first time on the Stansberry Investor Hour. So just for our listeners sake, maybe you could give us a little bit of that backstory, because I know I'm curious… Did you start in finance right out of college?

Louis Navellier:          Not quite. I went to work for the Federal Home Loan Bank. I was essentially a bank analyst. The yield curve was inverted back then, so we had to merge a whole bunch of banks into each other. It was interesting. What we were really doing, we were trying to get the FSLIC or FTIC insurance. So we could never fix our cash flow or make them solve it.

But we could merge the big one into the little one and re-amortize our loans to kick the can down the road and defer the regulatory heat on them. So that's what we really did. And we manipulated the books, for lack of a better word. And well, I work for the regulators so I'm not embarrassed by that. But it did scar me for life, and that's why you hardly ever see a banking stock in any of my portfolios.

Dan Ferris:                 I see, yes. I tend to think of all banks –

Louis Navellier:          But when I was –

Dan Ferris:                 Go ahead.

Louis Navellier:          So you know, is before I took that job I was in the right place at the right time, in college. And some folks from Wells Fargo came over and used us students to do a lot of their programming for them on mainframes. And they were trying to build index products because they had passed a law called ERISA. And the way the lawyers were interpreting ERISA, they said, "Gee, if we could just match this benchmark to the S&P 500, we could absolve ourselves of all liability."

So my job was to build what we call tracking portfolios. Portfolios that mirror the market. There's a lot of quant there. You've got to have your beta to one and you've got to get your standard deviation really low and tight. You've got to have your sectors right. Anyway, I figured I needed 332 stocks to mirror the S&P. And I was a failure. I kept beating the market. [Laughter]

So I learned in college that I was lied to, that there are anomalies and inefficiencies in the market. I'm originally from Berkeley, California. And you know what they teach around Berkeley is that we really need to earn the same amount of money when we invest. Because if I try to out-earn you, I'm going to create social unrest. It's going to create lots of problems.

So I rejected that thought. And I didn't, so I just set out to document the anomalies and inefficiencies of the market. And that's what led me to publishing. And then we started with large caps − we started originally with small-cap stocks and spread to large-cap stocks by 1991. And then got pretty good at that. And the other comment I have is we published all our research now in the public domain, through InvestorPlace. So we're very proud of that.

Dan Ferris:                 All right. You know, you mentioned banks. And I tend to think of them, all financial companies, as black boxes to a great extent. Sounds like you looked inside the black box and did not like what you saw at all.

Louis Navellier:          I don't like the banks at all. I don't like the whole industry at all. You know, I can explain 2008 pretty easily. I wrote a white paper on it. But we essentially blamed the credit markets for destroying the stock market. Essentially Spitzer took out Hank Greenberg from AIG, and they couldn't find anybody to run AIG. By the time they got their third CEO, some auto-insurance guy, they had lowered the price of their credit default swaps really low. Then when the credit default swaps defaulted, it just created this cascade of selling.

And down here in the Palm Beach area, we had people bragging that well, I'm earning 13 to 16% a year, tax free. I don't need your advice. I wasn't soliciting my advice by the way, that's just how they like to talk around here. So I went to one of these presentations to see, how are these people earning 13 to 16% tax free? And Goldman and Citibank and a bunch of other big institutions were selling them leveraged-immunity products, where they would leverage immunities literally six to one or more. And they were A-rated immunities, and they were again earning 13 to 16% tax free.

But what happens when those credit default swaps broke, they had to unwind the leveraged immunities very quickly. And when Wall Street sees you coming, they drop the bid. So these people ended up losing 97% of their money on these leveraged-immunity products. The guy I'm most familiar with is a guy named Jack Lew. He ran alternative investments at Citibank. And I went to one of his presentations, and it was impressive. He was an impressive fellow. But he did lose 97% of people's money. And he did lose his job at Citibank because he lost $21.1 billion. But he subsequently got a new job. Do you know what his new job was?

Dan Ferris:                 No. I don't.

Louis Navellier:          Any guess?

Dan Ferris:                 Oh, it was –

Louis Navellier:          Treasury Secretary.

Dan Ferris:                 Treasury Secretary?

Louis Navellier:          Yeah.

Corey McLaughlin:    Oh wow. That was –

[Inaudible, crosstalk]

Louis Navellier:          This is a guy that can't sign his signature. He's got zeros. Used to scam senior citizens here in South Florida. And that's how you know the media's fake, OK? Because he's protected. And any time he goes on CNBC and stuff, I just cringe.

Dan Ferris:                 Wow.

Louis Navellier:          So you guys scarred me for life. Now, what everybody's wondering, you know, market's running. What's going to be the next black swan to take out the market? And I hate to tell you, it's going to be the private-credit markets. My oldest daughter works for Morgan Stanley. She just sells private credit. My son-in-law works for Merrill Lynch, he just sells private credit. And that's where you can get 11% yield. And they'll tell you there's a window to get in. And then there's some exit windows. They're not always available.

But they're selling 11% yields to the wirehouses right now. And they're also selling you know, private equity and other things. Probably the best example is McKinsey took over Morgan Stanley and said stop selling stocks. Start selling all this stuff that pays us more money. And remember, they had this strategist, Mike Baker, who was perpetually bearish. I think he finally turned bullish, that's a bad sign. [Laughter] But they were just trying to divert money to sell this stuff.

But they're now leveraging debt again. Now, it's only 2-to-1 from what I can tell. My son has finished up an MBA at Stanford. He used to work for Bank Capital. You know, these private-equity guys are using the private-credit stuff to fund their deals, and the money's not cheap anymore. So I worry about private equity. I worry about just an implosion in this business. I mean, it's dominated by Apollo, Blackstone, BlackRock's getting in it. And a year now, a decade ago it was like 438 billion.

And the U.S. has become very odd. It's become a place where you can get a loan if you have a perfect credit score. And they usually want you to have assets and no credit. And no debt, I mean. And then yeah, we'll give you a loan. But if you don't have that perfect credit score, and you don't have assets, they're going to send you through these private-equity channels and private-credit channels. And it's going to be interesting. So when this, one day that's going to implode. And we're going to have 2008 all over again. I just have no idea when.

Dan Ferris:                 The term "private credit" sounds to me, it sounds so generic. And the way you described it, it's subprime part two.

Louis Navellier:          Yeah, it's leverage up the yin-yang part two, for sure. And you know, 11% yields are just not sustainable. But it's a problem.

Dan Ferris:                 Interesting. So I wonder, sounds like PE is a huge borrower then.

Louis Navellier:          Yeah.

Dan Ferris:                 And it sounds like you're also telling me that individuals with poor credit are essentially being funded by, you know, the loans that they're taking on come from private-credit issuers.

Louis Navellier:          Correct. Like the subprime auto loan business. You know, the check-cashing stores, all that kind of stuff.

Dan Ferris:                 And all those –

Louis Navellier:          There are predatory lenders out there, you know. And of course you may know that Joe Biden's been financed heavily by Capital One and people like that. So there's a certain group of people out there [that] would like people in duress.

Dan Ferris:                 Yes. And auto loans are, the delinquencies are rising aren't they, right now?

Louis Navellier:          Yeah, the Philly [Federal Reserve] does some good work on that, on 30/60/90 day delinquencies. They have all risen. But apparently the bubble hasn't been pricked yet. And we really can tell when the banks provide their guidance at the quarterly earnings. They'll provide guidance on their loan/loss reserves. But yeah, if you run a credit-card company, you expect at least 1.5% defaults. And then if you provide − like Citibank does this. They provide credit to you know, all kinds of retail chains. You can get a credit card from them, and it will be a Citibank card. They expect 4.5% defaults on that kind of credit.

Dan Ferris:                 Right. So, what level, when they start going 5% or 6% are you worried? Or does it have to go higher than that?

Louis Navellier:          I haven't gotten my alert. I've just got that people are a little behind on their bills. But the actual default rate after 90 days has not gone up. But the, recently. So you know, obviously Trump's been elected. Obviously, his job is to rejigger the manufacturing sector, which was in a recession for over two years, according to ISM. And so if he can get that going again, that would help immensely.

You know, I said on Fox News, the key to what he's doing is to get the velocity of money up, which is how fast money changes hands. And so the more we're out and about spending, the more we're lifting all the boats out there and prosperity's starting to rise and spread. So I think we're going to have that. I think we're starting to get it now, and I think we'll have that this holiday season. I think we'll have it entering the New Year. And it helps when you have a funny president, too. [Laughter]. That's, he just, it's important to laugh. And Trump is funny, just so you know.

Dan Ferris:                 Oh, he's hilarious, yes.

Louis Navellier:          I don't go to Mar-a-Lago. But I see him, and he's a very nice fellow. It's kind of weird, though. In between the presidencies he was running around like the maître d' and saying hi to everybody. Now he's going to be roped off, busy, meeting with people. But going back to the prosperity rising, the velocity of money picking up, it looks pretty good. We do want to get these wars out of the way. You know, we need Saudi Arabia to join the Abraham Accords. Acknowledge that Israel exists, and isolate Iran.

And then we have to get Ukraine and Russia to stop fighting with each other. Why Biden had to pour fuel on the fire by letting Ukraine launch long-range missiles into Russia is another nightmare. Of course he approved all the land mines, which of course are banned by the U.N. And then what else did he do? Oh, and we evacuated the embassies. So when you're evacuating the embassies because of fear of missile attacks, that would be a sign. So Trump's got to fix that ASAP.

Dan Ferris:                 Do you think he really can? He's very confident of course. He represents himself as a very − he says "If I were in office they never would have done it to begin with, and I'd have fixed it in a week if they'd started." But you really –

Louis Navellier:          Yes. Just look at the Russian ruble. They needed an exit strategy. Obviously he's going to let them keep the land, whether it's Russian land or disputed territory doesn't matter. And Ukraine can't come back because we've obliterated − the country's been obliterated and lost 40% of its population. So it's kind of hard to grow when you've just lost all your people, and your infrastructure's been − you know [Volodymyr] Zelenskyy ran on doing a peace deal with Russia. Boris Johnson talked him out of it. We talked him out of it.

We were doing our bio weapons in Ukraine. Those facilities have been moved. We were doing a lot of cyber hacking out of Ukraine. Apparently, that's been moved. So whether that's in Poland or you know. Bulgaria or someplace. Who knows. But I do know that the U.S. doesn't like any country to be neutral. And Ukraine wanted to be neutral, and the U.S. told them to pick sides. And obviously there was some money going back and forth between the U.S. and Ukraine. But now it's time for that money to go to America and fix our country.

Dan Ferris:                 Well, I remain skeptical about what any given president can do. But hey, I'm on your side. I want less war in the world.

Corey McLaughlin:    I've become a little more optimistic lately, just reading reports this week from unnamed sources and whatnot out of Russia about how [Vladimir] Putin would be open to negotiating the end of it. And Zelenskyy too. So both sides are open to it, finally, for the first time.

Louis Navellier:          There's no men left in either country, you know? Now Putin doesn't grab them from Moscow or St. Petersburg, because that's his power base. But if you live in Siberia, you're going to the Ukrainian front, you know? And of course Putin − Russia has incredible demographic problems. And Putin has asked the women to have eight or nine children. And the women have said, where are the men? Minor problem, you know?

And the one thing people have to understand is regardless of who we elect, the U.S. is food and energy independent. We still have household formation. We have a lot of pro-family places in America. The South, the Mountain West. And then we still have orderly immigration. I mean, we have disorderly and orderly immigration. But we do usually let in a million or so green-card folks every year. And so we assimilate immigrants better than anybody else does. So we're kind of the oasis out there.

It's just, the U.S., Brazil, and India that are growing. And Brazil's going to stop growing soon. So it's very hard to grow your economy. China lost 2.08 million people last year. Europe's now shrinking badly. Germany's in a serious recession. They're going to have an election in February. France's PMI just collapsed. Obviously [Emmanuel] Macron, his party's a minority in France. And the majority party, which is led by Marine Le Pen, wasn't able to get the job in leading the coalition government. But she's tormenting him, because she controls the parliament.

So it's getting to be very, very interesting. And so you've got the two biggest countries in Europe just struggling economically. Germany's definitely contracting. France looks like it's contracting. And they're all complaining about tariffs. And the irony is, we're just a scapegoat for that because they put bigger tariffs on us than we on them. So when our buddy from Cantor Fitzgerald, who is now our commerce secretary, goes over there and has a chat with them, either they lower their tariffs to our level or we raise our tariffs to their level. And that's Howard Lutnick. And I think Howard is going to have a lot of fun doing all that. It's going to be a very interesting world here, pretty darn quickly.

Dan Ferris:                 The Chinaman's Curse. May you live in interesting times. We certainly do.

Louis Navellier:          Yep.

Dan Ferris:                 So let's talk about equities. Let's talk about the U.S. I know you as the guy who's always recommending just generally growth stocks. And I can remember just decades ago, you know, the market would take a dip for 10% or 12%, and then you would say something like just buy your favorite growth stocks. You'll be fine. You'll be fine. Just hang on to them and you'll be fine. What are you telling folks today?

Louis Navellier:          Pretty much the same thing. But we are oscillating right now. Obviously the week when Trump got elected was wonderful. And then we had to give all the gains back. Then the third week after he got elected, it was even better than the week he got elected. The gains were ridiculous. And we're still running now on the surface, but under the surface there's profit taking. So the way Citadel works, or the big market maker, that's Ken Griffin. They have these mean revision algorithms. So you know, if a stock goes up 12%, it's going to have to pull back at least 4%.

So the mean revision algorithms are underway now, and the market's rotating. We've noticed the market's trying to broaden out, but it didn't broaden out to quality. So we expect it to get more narrow again. Our testing shows that you have to be in the top 55% of fundamentals. That's absolutely imperative. And then if you can be in the top 5% of stocks, you'll make a lot more money. And to me it's still –

Dan Ferris:                 Top 5% defined how, Louis?

Louis Navellier:          Well, by our grading system. You know, we grade stocks. Our favorite stock is called Fundamental [inaudible]. It's in the top 20% of sales. Margin expansion. Earnings stability. Earnings momentum. Earnings surprises. Cash flow, term equity, analyst revisions. So those stocks are the crème de la crème out there. And they're explosive. That's stocks like Sezel, S-E-Z-E-L. Powl, P-O-W-L. GigaCloud, MPTI, [Vital] Farms, that's V-I-T-L. That's an organic chicken player. You know, chicken stocks are hot now. I've got some of the chicken stocks.

Because there was some bird flu in the west coast. It hasn't spread to Texas or east coast yet. So if you've got some healthy chickens, you can sell your eggs for more money. But yeah, my thing has always been finding little monopolies out there. And the first monopoly I found was Conair back in the ‘80s. They made hairdryers. I don't know if people remember, big hair was not a thing until the ‘80s. You know, Dallas and shows like that. So Conair made these hairdryers, and no one really competed with them for four or five years. And my next monopoly was Tyson Foods. You know, chicken chunks, chicken tenders. You know, you –

Corey McLaughlin:    That's [Inaudible, crosstalk] with the chicken, yeah.

Louis Navellier:          You talk to a kid and you explain to him, back in the '60s, we didn't have these things. They look confused. Like you know, aren't they born this way? No, not quite.

Dan Ferris:                 They're not made of chunks.

Louis Navellier:          Exactly. That was Tyson Foods. And they had a little monopoly going for four years. My third monopoly was Hansen's Natural, which became Monster Energy. And I remember I had the Red Bull guys in my office. My management company's out in Reno. I have a home out there. And so they come into my Reno office, the Red Bull guys, because I had a friend at [inaudible] team. And they're trying to sell them.

And these Austrian guys come in, they look like rock stars. Long hair, wearing leather. They got the aluminum suitcase, they open it up. And it's like a camera case. And they pull out these drinks. They're in their lining there. And we drink this stuff, and we thought, "God, this is bad." And I didn't realize it was supposed to be a college kid putting booze in it, you know what I mean?

Dan Ferris:                 Right.

Louis Navellier:          So unfortunately my friend did not get their sponsorship. So that was his problem. But you know, Red Bull's big in Europe, and Monster Energy was huge in America. And well, it's Europe as well but also Latin America. And that was a huge winner. And they had a nice little monopoly. And then we had Nvidia, and now we're in our second time in Nvidia. So this is fun the second time around. And it is definitely a monopoly, no one can compete with them.

I just wrote a MarketWatch article on it, that we'll be holding Nvidia through the end of the decade. Because again, no one can compete with them on making the regenerative AI chips. And they spend about two billion bucks when they build these new chips. No one wants to spend that kind of money. If there's anything holding all this AI craze back of course it's the power grid. But now Trump's going to be president, so we can hook up the natural gas turbines to fuel the power grid.

And you know, that really was the election. Biden was interfering with the growth of LNG. He had an executive order basically shutting them down for environmental review. He got overturned by a judge in Louisiana. Sixteen states sued, but he was still appealing. And so now we've got Trump, and we're going to go nuts on natural gas. And we're going to have a lot of pro-energy folks. And then if the states don't want natural gas, well, they just won't get the server farms. It's pretty simple.

But you know, right now we've been flaring natural gas. We've been letting it leak out of capped wells in the Permian Basin, mostly in New Mexico. And my argument is, if you're just flaring it or letting it leak, can't we have it spin a turbine, you know? What are you trying to accomplish? Again, I'm originally from Berkeley, where all this madness started. And California has a bill called, that they passed, Senate Bill 1221 where if they cut off natural gas to a town, the state will buy you new appliances. Electric appliances. And in some places in California, you can't put gas in anymore.

Dan Ferris:                 That's crazy.

Louis Navellier:          It's funny. On the ballot in Berkeley, they asked the folks, "Can we please cut off your natural gas so we can save the planet and all?" And the people in Berkeley voted 69 to 31 against that. So even in Berkeley, everyone likes their gas stove and their gas heater.

Dan Ferris:                 That's right.

Louis Navellier:          So all this madness is going to be gone soon. And we'll "drill baby drill," and we'll grow and prosper under Trump.

Dan Ferris:                 From your lips to God's ears, Louis. I hope you're right. And I think to a certain degree, I definitely agree. Definitely agree. And especially in the case of natural gas. Do you like natural gas producers, or do you like just the beneficiaries?

Louis Navellier:          Right now, I would do the midstreams. Like Hess. We hope LNG explodes. Obviously, there's not a place on the west coast that will allow an LNG plant. So guess what? They're terminal. But guess what? They're going to Mexico and Canada, and U.S. gas will be exported via Mexico and Canada. So you know, I'm from California. And they're delusional. That's all I can say. I'm not antigreen energy. If you live in a certain climate with certain conditions, it's fine. I have no problem if you have solar and all that stuff. But you know, it doesn't work in certain latitudes. That's Germany's problem. They tried it. Doesn't work very good here. Why is electricity so expensive?

Dan Ferris:                 It doesn't work well at scale though, really. That's a problem.

Louis Navellier:          That's true. And that's why they still have brownouts in California. You know, what's interesting is we had Enphase Energy on a really good run. We held onto it for too long. So I think we were only up a little more than 300% when we sold it. But it was up over 1,000 for a while. And Enphase Energy was really all about tax evasion. So what it was, is you know, there's a lot of wealthy people that live in California. But they're not there all year round, so they leave. And they try to spend just no more than five months a year there, so they don't have to pay that 14.4% income tax.

So what happens is, is you install a solar system with an end phase operating system and a power wall. And you can set that so it looks like you're not there when you're really there. OK? And then of course, if you go out to restaurants and things, it might be better to pay cash than credit cards. So I know one guy in California who got caught posting his golf scores, OK? Because the gym system is public. But I have a home in Reno high in the hills, and we don't see our neighbors because they all live in California. And people say if you're in Palm Beach, why are you in Reno? So, well, the Schwab office in Reno is actually the biggest in the world, OK?

Dan Ferris:                 No kidding.

Louis Navellier:          I'm an ex-banking regulator. I know where the money is, you know what I mean? And in addition to having all these California residents around me that say they live in Nevada, we have all the California corporate money. Apple's there. Google's there. Intuit founder's my neighbor. Sysco − They all keep their cash there. And also, Washington State fuels that area too, because the state of Washington has a 2% tax on gross revenue. So guess where all Microsoft's money goes through? Microsoft's actually the biggest employer in Reno. Amazon's huge.

So we get the big Washington companies, we get the California companies, and then we get all the Californians who say they live in Reno when they're really in Napa or wherever they live. California, Carmel, et cetera. So it's, this is what makes America great. Our 50 states compete with each other, you know? And even if one state screws up, some other state will figure it out. And obviously, a lot of the tax-free states have been prospering. Tennessee, Texas, Florida. So it gives me hope.

Dan Ferris:                 I live in southern Oregon, where Californians have come over. Actually, when I lived in Washington, Californians were outbidding folks for homes there. And they're outbidding them here in southern Oregon as well.

Louis Navellier:          Are you in the Ashland area?

Dan Ferris:                 We're about 20 minutes, we're in Eagle Point. Just out in the country.

Louis Navellier:          OK, wonderful. Were you OK with the storm?

Dan Ferris:                 Oh yeah, we're fine.

Louis Navellier:          Your bomb cyclone?

Dan Ferris:                 Yeah, we really didn't see a whole lot of that. We're fine, you know. It just rained a little bit more than usual. But this time of year it starts getting rainy anyway. It's going to rain from now till April, so. The worst thing I have to do is empty my pool out because they didn't install the automatic device to drain it. So I've got to hook up a pump. But other than that, you know, it was just a little bit of rain. It wasn't a heavy rainstorm back east, like where you are… It's a lot worse than what I had to go through. As a matter of fact, when that happens here, we say geez it's back east rain out there. Just uncommon.

Louis Navellier:          You're in a gorgeous part of the world. It's gorgeous there.

Dan Ferris:                 Yeah, I mean, I live on a golf course and look out at mountains and gorgeous terrain. It's beautiful out here. Absolutely.

Louis Navellier:          So enjoy it.

Dan Ferris:                 Every day. Every day.

Louis Navellier:          Especially summer. You get those long days.

Dan Ferris:                 Yeah, summer, people don't realize. Summer here where we are, July and August is triple digits, many days. Now that sounds brutal. But when it's 80% humidity where you are, Louis, it's 18% humidity here. And those triple-digit days are great to be in the pool. That's the perfect day to be in the pool. So yeah.

Louis Navellier:          That's wonderful.

Dan Ferris:                 Good life out here, yeah. So now that we've established that we're all living the high life, and that we like –

Corey McLaughlin:    Except for my Maryland humidity, that's not fun.

Dan Ferris:                 Yeah, Maryland, that's right. I'm born and raised in Maryland. It's a different animal entirely.

Corey McLaughlin:    I wanted to ask you about, I've got a question about, going back to the monopolies that you listed off there. Are there any commonalities in how you were able to spot those monopolies? You know, those are different industries, we're talking about Conair, chicken, and energy drinks. Like, how were you − what guides you toward those?

Louis Navellier:          So one of the tricks of my trade has always been margin expansion. So when operatings are growing fast, earnings are always growing faster than sales. So let's say you have a company with 20% sales growth, only 18% earnings growth. That means the margins are under compression, so I don't want that. I want to see the earnings growing much faster than sales. That seems to create a lot of earnings surprises. I think the other key to my success is because I have a database of over 6,000 stocks, and I'm constantly data mining. We just find a lot of stocks before they hit the radar, you know?

And then once the analyst community picks them up, then we get this parade of analysts perpetually revising their earnings estimates higher usually for four or five quarters. You know, our average hold is well over a year, so we're usually selling stocks after 15, 16 months. We have a top-two quant indicator called Alpha. And what Alpha is, is it's return uncorrelated to the market. And it's a long story. Most people do their alphas wrong. I do them right. So it's a correlation thing. People are often comparing stocks to the wrong benchmarks.

But anyway, Alpha explains a return that's uncorrelated to the market. Beta's the return correlated to the market. But what we like, is we like stocks when it's a very smooth steady manner, with high alpha, low deviation, because there's perpetual institutional buying pressure underneath them. Eventually then institutional buying pressure will ebb, usually after four or five quarters, it ebbs. And then the stock might get a little more volatile. And then we might trim it before we sell it outright. So we're running the portfolios like it's a sports team. So if you're on my team and you lose a step, maybe you party too much or you're just getting older. I'll often cut your minutes before I throw you off the team.

Corey McLaughlin:    Nice, I like that. I like that analogy. So with Nvidia, you said you're looking at a decade. What are your thoughts on their margins, their direction right now?

Louis Navellier:          It's ridiculous. They're 70% gross and margins, operating margins are 66%. I mean, it's ridiculous. And they're in California, in a high-tech state. So I mean, what can I say. It's unbelievable. I love [Jensen Huang]. I think Jensen's a great CEO. I encourage everybody to go to YouTube and watch his presentation at the Stanford Business School. My son was in the audience when he did that presentation. And I think you'll get a really good feel for Nvidia. They are going to have a problem at the end of the decade. They're not going to be able to put more transistors on the chips. There are only like two billion now, on the Blackwell chip. And the reason they won't be able to add any more after they do a couple reiterations is they're going to be approaching the atomic level.

So it's not like they can split atoms to put more stuff on a chip. So they're going to have to do quantum computing after that. That's where you use ones and zeros instead of one or zero. So they're working with Google on that quantum computing, the components. You know, set up a quantum-cloud simulator, you know. In Maryland you have a stock, QDOT I think? Anyway. Anyway, they do the qubits, the quantum components. But they're not making money yet, so.

Dan Ferris:                 So are you telling me that you expect to be holding Nvidia until the end of the decade?

Louis Navellier:          Yeah. No competition. Legal monopoly. You know, that's the other thing that's interesting, is obviously we had the tech industry was pro-Biden, right? They got him elected. And then he rewarded them by suing them. He had Lina Khan suing Amazon because they think Amazon's corrupting on their best deal. I mean, that's just going to get thrown out. She loses everything in court. They literally won the antitrust case against Google. And they got to split it up.

And that's like a dog catching a car. Like, now what do I do with it? They're trying to get them to spin off the Chrome browser. They're starting to heat up litigation again on Microsoft. Apple's been massacred. Three billion in fines in the E.U., and then we had to fine them this. And then they had $14.4 billion in fines for taxes. They did nothing wrong other than have their facility in Oregon − Ireland, I'm sorry. I was thinking green landscape, so yeah, that's Oregon too.

And so Trump puts JD Vance on the ticket. Peter Thiel guy, Silicon Valley friendly guy. Now what's interesting is [Mark] Zuckerberg got really subpoenaed pretty hard by the house, so he didn't want to do any politics anymore, you know? So whatever he did a few years ago he's not doing now. And he called Trump a badass and stuck his tail between his legs and he's going to pretend to never be political ever again.

But I think the easiest way to explain how hostile they were to tech is this Lina Khan keeps pushing them for an open operating system. And most companies, with the exception of Microsoft, have a closed system. So when Microsoft − their cloud system crashed a while back because CrowdStrike had an upgrade and it crashed the system. And they had a quick fix. Microsoft wasn't so mad at CrowdStrike, and they were telling everybody to upgrade.

Unfortunately it was on a Friday. In Europe they don't work on Fridays. So the airlines all crashed. I mean, the systems crashed. The airlines were all messed up. But Microsoft actually blamed the E.U., because they forced them to have an open architecture. And had they had a closed architecture, they could have protected everybody. So if we ever get, if Lina Khan ever got her way and they were all forced to have open architectures, we'd have crashes perpetually, you know what I mean? It's not a good thing.

Dan Ferris:                 I'm still stuck on Nvidia. You said, you know, if your team doesn't − if a team member doesn't play for, if he doesn't perform as well, he's off the team, meaning out of the portfolio. Are we talking price action? Fundamentals? Some combination of both? What makes you throw him off the team?

Louis Navellier:          Definitely the fundamentals. Fundamentals scores fall. But we don't have that with Nvidia, because they have the 6% sales surprise, a nine-and-a-half surprise. They're still getting higher. And their operating margins are fat. But there is a quant score, which is alpha over deviation. And usually when a stock consolidates a bit, as I'm talking to you, Nvidia has consolidated since its earnings. The risk goes down. As long as it stays within the trading range we've calculated.

But if it breaks through that trading range, that would send off a lot of alarm bells, and we'd have to reassess the stock. And obviously we'd widen the standard-deviation band that happens naturally. But yeah, when a stock pulls back from its normal range, that's a healthy sign. But we're not worried about Nvidia at all. I have a friend in the AI business who makes chips for Samsung. He's in Boise. And you're welcome to interview him. His name is Paul Dlugosch and his company is Natural Intelligence.

So most AI is just optimizing packets of things, OK? Like, I get gun ads, OK? I'm not a gun guy, OK? But I get gun ads. I have a shooting range at my home in Reno. It just came with the house. I have also an RV garage. I get RV ads. I don't have an RV. So, sometimes they look at where you live and they figure out you must need this. But you could have like 400 precursors on people, you know? All your hobbies and things. Figure out what you might like and stuff like that. That's how most of the AI is done today, to do more direct marketing.

But Paul's thing is basically building a super-Alexa for the Samsung folks. So all the appliances that have Wi-Fi and talk to each other, it might figure out "Oh, you forgot to get this at the store. Your kids forgot to take this." Or, it tries to learn your pattern. Or, "By the way, did you know your food's spoiled? You might want to throw this out." But essentially the AI that Paul does, it's like our pets, you know? Our pet [inaudible]. And they actually train us, you know? So basically the super-Alexas of the world, what's coming down, will be doing that for us.

Dan Ferris:                 The super-Alexas. Yeah. I've been hearing, that's interesting. I've been hearing about the intelligent home, the smart home, for many, many years. I probably have been hearing about that for decades now, at least a couple of decades. And now –

Louis Navellier:          It works great until the power's off.

Dan Ferris:                 Works great until the power's off. Yes. [Laughs] That's fair.

Corey McLaughlin:    It's true, yeah.

Dan Ferris:                 So just keep the power, have your own backup supply and your home will remain highly intelligent.

Louis Navellier:          Yep.

Dan Ferris:                 A lot of folks where I live, Louis, a lot of folks, they have either solar and batteries, or they've got backup diesel, or something. There's a lot of folks who are worried about that.

Louis Navellier:          Well, I'm on my second generator here in Florida, which is obviously hurricane related. We're fortunate, it's a natural gas one. But it is my second. It's gross up here, so they do fall apart. But I was shocked they were putting them in Reno. I said we don't need generators in Reno.

But Reno grew so fast, and we have so many people from California, they don't want to hook up the natural gas. They just want to do the batteries and solar. So, we don't have enough electricity during peak power demands. So they have diesel generators every mile in my neighborhood. And somehow the server farms there, the Apples and the Googles, have hogged all the power initially, the base power. And so we might crash, but they won't.

Dan Ferris:                 I see.

Corey McLaughlin:    You mentioned oil and gas and post-Trump and what you think will go on there. Do you have any thoughts on nuclear? And if there's any opportunities in that area? Short term or longer term.

Louis Navellier:          Well, obviously Microsoft's deal with Constellation Energy basically said it all. Constellation closed Three Mile Island because it was cheaper to burn natural gas. But Microsoft said no, we would like zero-carbon electricity. So they gave them a 20-year commitment to fire up one of the reactors on Three Mile Island. There's a reactor being reactivated in Michigan. There was a fourth reactor added in Georgia.

My neighbor up the street actually bought a nuclear plant in Alabama. He's trying to start it, although he's very ill now, on a feeding tube, so I don't know if he'll ever get there. But as far as the small fission nuclear reactors they're trying to build. Obviously Amazon has called for this, Google has called for this. None of them are approved yet. They're trying to build prototypes. The magnets apparently can lift an aircraft carrier. I don't know why you'd want to do that, but anyways, it's interesting. And we'll see if we can get any of these small fission type reactors going. But you know, I have nothing to buy until it earns money.

See, I only buy things when they earn money. Because I still manage money, and I've had to pack a lot of E&O insurance. And I, yeah − I can't imagine what E&O would cost if the stocks didn't earn money. There's all these criteria. So, I'm not in that, I never buy something unless it earns money. I will buy it if it goes from negative to positive earnings next quarter, OK? If it makes that transition, I will sneak in there. But if it doesn't have forecasts of positive sales earnings, I just ignore it. So I wish the nuclear folks well, and you know, we do have a little problem with fuel. We do have chemical, one of our letters, of fuel.

But Hillary sold our nuclear processing to Canada, and Canada sold it to Russia. So that's just another reason to kiss and make up with Vladimir Putin, even though he might be a bad guy. We still need him if we want nuclear stuff. And then also if something bad happened to him, Russia could break into six different countries. So then you have six new nuclear nations to deal with. You've got to pick who you're going to be negotiating with.

So that's just another reason in the Ukraine war. But right now, Turkestan, I have a hard time pronouncing the countries around Iran. But there's some other countries, you can get uranium from. But it's very scarce right now.

Dan Ferris:                 How do you feel about getting nuclear energy through utilities which have just – I'm looking at the XLU, the Utilities Select SPDR Fund. Up 30%-ish over the past year. 29%, 30%.

Louis Navellier:          I have nothing against that. You know, I mean if you spend all that money building those plants, I'd run them as long as they're safe, you know what I mean? We do have one in Florida. And I do know down in Miami, their nuclear reactor has all the crocodiles, you know? We do have alligators in Florida, which are black. But we also have crocodiles, which are green. And they hang out at that plant. They're very rare. We don't see them too often. They're in the brackish water, the salty water.

Dan Ferris:                 So maybe you buy utility stocks, but don't go wading through the swamps near the power plant.

Louis Navellier:          No, unless you want some new shoes, you know. It's, I'm not an expert in crocodiles. I do know alligators are out and about in February and March. It's alligator mating season. So you've got to be careful then. That's when they're out and about, getting a little frisky. So I did, there is a golf course in Florida, what's it called? Anyway, it's like our Bandon Dunes, I'll think of it. But anyway, it's a wonderful course. Inland, it's an old potassium mine. Anyway, my only complaint about it –

Corey McLaughlin:    Streamsong?

Louis Navellier:          Yeah, Streamsong. There's gators everywhere. And they have pretty wide fairways, but you want to hit the fairways there. Because as soon as you start walking around the high grass, guess what you're going to step on. And I still remember having to tee off of one on my tee box once. So, "How are you. Give me a moment, OK?"

Corey McLaughlin:    Yeah, we had a meeting there, a Stansberry meeting a couple years ago. I don't remember, I guess I kept my ball straight that day. But I didn't remember seeing any animals, yeah.

Louis Navellier:          Yeah, they're in the side. I haven't played the new course yet, the black course. But it's a nice place.

Corey McLaughlin:    Yeah, beautiful.

Dan Ferris:                 We've got geese, turkeys, deer, and the odd blue heron actually in Oregon year-round. But no alligators. Knock wood.

Louis Navellier:          No, I'm very aware of the turkey problem in California, your area. It's all over the east coast as well. Even in Florida, we have too many turkeys. So they need some predators.

Dan Ferris:                 Hey, look, if it wasn't illegal, I'd be eating the ones that are in the backyard. They've been up on the roof. They're everywhere.

Corey McLaughlin:    Yeah, I know.

Dan Ferris:                 I think –

Louis Navellier:          Huge problem in Napa, huge problem in Carmel. I remember my daughter went to Cornell, it was a problem there. And in Reno, we have to stop our vehicles for the geese and stuff. There's a few places where they're crossing the road, and there's a few hundred of them. And they're pretty oblivious. But yeah, the turkeys are a big problem in California, Oregon, and the northeast.

Dan Ferris:                 Well, I stop for them. You don't want to run them over, it makes a mess. It's a big mess. A guy hit a bunch of them with a truck one day and it's like oh great, now I've got to drive around that. Anyway.

Corey McLaughlin:    Crime scene.

Dan Ferris:                 We all know turkeys are an issue. I wish I could shoot them. I wish I could just stand out back and shoot them and eat them. But they won't let me do it. Louis, we are about time for our final question. But before I get to that I just want to say one more thing about the utilities. I was asking about those because they're not exactly big margin expanders and big growers, are they? So I was like, we're talking about nuclear power. I just wanted to see if you would ever own a utility stock, for that or any other reason?

Louis Navellier:          Not really. If I did, it would probably, because they have an LNG terminal or something special was going on that they were prospering from. You know, utilities are regulated. The California utilities are the worst, because Governor Gray Davis was trying to seize the utility grid decades ago. And to this day they're still trying to seize utility grids.

So if my name was PG&E, and they say why don't you maintain your grid? The answer is because, the state's always trying to seize it. So now what happens when fire season comes, they just shut off the power. And you know that big round thing on the transmission line, that's full of oil. And if that comes down, you've got a spark with oil. So they shut off our power in Reno during the bomb cyclone. My power was out for over 13 hours. So there went all the cameras, everything else in the house. That's what they do in northern California.

You know, they should bury the power lines. But no one wants to invest, because they're regulated by government entities. And San Diego's probably the most disorganized. They just want you to put up solar and power walls, because their grid is just horrific. So, that's fine. I mean, they have financing deals and it works OK. The only issue with solar, you want to make sure you don't burn your house up after 20 years because those things can corrode. So you've got to be really careful.

Dan Ferris:                 Now we are, now I can say that it's time for our final question, which is the same for every guest no matter what the topic, even if it's nonfinancial. And if you have already said the answer, by all means feel free to repeat it. And the final question is simple, Louis. If you could leave our listener with a single thought today, what would you like them to take away? What would you like that thought to be?

Louis Navellier:          I think that if we can get you the right stocks, these legal monopolies that dominate their business, it can change your life. And that's our goal. You know? My dad was a bricklayer. Obviously I live on the ocean. Life's good. You know, I eat my own cooking. But that's our goal, is just to set you up for life so you don't have to worry. And, but you're going to have to go on a nice little ride and we'll find the crème de la crème for you. And obviously it's a good time now.

If you look at my batting average, it's super high. High in the 90s, of winners. But we have a lot of triple-digit and a thousand-plus-percent winners now. And we just want to get you set up for life. That's my goal. And so we give away our research free, to kind of tease everybody. Obviously, we have all those free letters and stuff. But when they're ready, we have newsletters to sell, and I'll start to upsell you. We're ready when they're ready.

Dan Ferris:                 All right, sounds good. Listen Louis, thanks for being here, man. It was really great to talk with you.

Louis Navellier:          Any time, any time.

Dan Ferris:                 You bet. You'll definitely be getting invited back.

Louis Navellier:          Yeah, I saw Doc when I was in Baltimore the other day. He's a good guy.

Dan Ferris:                 Oh yeah, he's a great guy.

[Music plays]

Corey McLaughlin:    Gold has been on a tear recently, hitting new all-time highs, and everyone seems to want in. Wholesale store Costco is selling out of its gold bars. Central banks are buying gold in record numbers, stacking it in their vaults on pallets. It's even hitting overseas as China's gold trading volume just hit a record 400%. You may be wondering if you've missed the window. Is it too late to get in on the gains?

My colleague and friend Dr. David “Doc” Eifrig says "No." This gold mania is actually just getting started. But he cautions you don't want to run out and buy gold coins or mining stocks like everyone else. Instead he has found a much better way. You can get all the details at goldmaniareport.com. That site will take you to Doc's new free report that spells it all out for you. Get the facts for yourself. Go to goldmaniareport.com to read Doc's free report and find out how to get his four simple steps you can take today for the best way to get in on this gold mania.

[Music plays]

Dan Ferris:                 Well, it's hard to talk to anybody when the view behind them is so incredible. But Louis is a good guy to talk to, so that was a lot of fun.

Corey McLaughlin:    Yeah, right. I want to jump in that water right now. But yeah, it was great. It was awesome to hear from him, you know. Kind of a legend. Been around forever.

Dan Ferris:                 Yeah.

Corey McLaughlin:    Loved hearing his thoughts on a simple approach really, it sounds like, to finding those big winners, which doesn't need to be complicated, I guess.

Dan Ferris:                 Right. If there's an insightful analytical nugget, margin expansion. And the way he defined it. The margins you can say, "Well, if the margin goes from whatever it is, 20% to 30%, that's great." But he said when earnings are growing faster than sales. Very specifically. Which is a nice way to think about it. Then, he gets interested. And sounds like he buys the top 5% of the names that conform to his model and holds them until they make 1,000%, you know.

Corey McLaughlin:    Yeah, and he listed off a bunch of them there. I think if anybody's interested, you should go back and listen to that part real quick. I know I am, just to make sure I got those tickers. I'm going to look at them some more.

Dan Ferris:                 Do you have them written down? Or do you want to repeat any of them?

Corey McLaughlin:    I started to.

Dan Ferris:                 I didn't catch all of them either. So yeah, I guess you're just going to have to listen to the podcast again, folks. As much as we hate that.

Corey McLaughlin:    Scroll back and find it, yeah.

Dan Ferris:                 And there will be a transcript eventually, so you'll be able to scroll through for them there. Yeah, really good time talking to one of the absolute legends of our industry. I was reading his stuff when I first started in this game, in the late 1990s. And I can't believe I'm saying that here in 2024, still at it. Hopefully I will be for a while longer, knock wood. And it was just a lot of fun. It was a lot of fun to hear him talk about, looking for those, what he calls monopolies, which can last just a few years. Like Conair, when he said Conair was a monopoly, I thought, really? Because hair dryers are a commodity. They're everywhere. Everybody has a branded hair dryer or something.

Corey McLaughlin:    I started thinking about the movie, Con Air. But you know.

Dan Ferris:                 Yeah, that was the first thing that came to mind. Is that an airline stock?

Corey McLaughlin:    That was different. You know.

Dan Ferris:                 That was something different. So yeah, it's interesting, you know? To think in terms of what small growing company is just absolutely dominating its market? And I've heard that from other people too, who will say look, a great business doesn't go in and expect to get 1% of some gigantic market. That's a lousy thing to aspire to. You want half of some really small market, you know? Or some big share. 20%, 30%, 50% of some really small market that you can just dominate. And it sounds like that's where Louis has found quite a few winners. So, good place to look.

All right. Well, that's another interview. And that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as we really truly did. We do provide a transcript for every episode. Just 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 and know anybody else who might like it, tell them to check it out on their podcast app or at investorhour.com, please. And also 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. Follow us on Facebook and Instagram. Our handle is @investorhour. On Twitter our handle is @investor_hour.

Have a guest you want us to interview? Drop us a note at [email protected], or call our listener feedback line, 800-381-2357. Tell us what's on your mind and hear your voice on the show. For my cohost Corey McLaughlin, until next week, I'm Dan Ferris. Thanks for listening.

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