In this week’s episode, Extreme Value Editor Dan Ferris shares the two key concepts investors need to master to value a business, and why the most famous metric is, to him, totally meaningless. We also chat about Beyond Meat’s spectacular rise, and possible fall… and discuss a fear-mongering article from Bloomberg about the “fear gauge.” Fielder Capital Group CEO Frank Byrd stops by to share his fascinating story of major investing success, inspired by Warren Buffett.

How to Value a Business

From financial markets and politics to business and social issues, Dan Ferris and our Stansberry Analysts offer candid discussion on today’s most important headlines. Each week you’ll hear exclusive interviews with guest investment experts, authors, and top thinkers such as Jim Rogers, Kevin O’Leary, Glenn Beck, PJ O’Rourke, and Jim Grant.


The Stansberry Investor Hour is produced by Stansberry Research, LLC.

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Gary Mishuris of Silver Ring Value Partners talks about today's market being one of the most challenging periods for bottom-up investing since 2007. In terms of the quality of a business versus its stock price, there isn't a lot of opportunity right now. But he emphasizes that transparency and candor with clients is essential, as is prioritizing the long-term process over short-term performance. (5:19)  Next, Gary describes what sets Silver Ring Value apart from other fund managers. He shares why he left the "sausage factory" of larger firms behind, how his firm makes money for clients rather than off of clients, and how his unique temperament and behavioral models allow him to make better investing decisions. (14:38)  Gary also goes into detail on the psychology behind investing and compares it with a game of poker. He talks about trying to avoid making mistakes, continuously learning from past errors, the importance of having guardrails in place, and cutting your losses. (21:44)  Then, Gary explains why you should never be ashamed to change your mind, even when you haven't received any new information. It's OK to reanalyze the same set of facts and admit that you were wrong, and he cites several examples of investors who have learned and grown from their past mistakes. (31:21)  Lastly, Dan and Corey discuss the consumer price index and gold. Inflation came in hotter than expected, while gold has broken out to new highs. Dan and Corey speculate on how long gold's bull run can last. Plus, they detail gold being a good hedge for retirement against the government's money-printing addiction. (48:18)

Stick to Your Process, Even When It's Painful

 Dan and Corey kick off the show by discussing inflation staying persistently higher, rampant government spending and money-printing, and the repercussions of the Federal Reserve's decade-plus of low interest rates. (0:41)  Next, Cambria Investment Management's Meb Faber joins the conversation to talk about the exchange-traded funds ("ETFs") at Cambria and why the team focuses on shareholder yield when picking stocks for these ETFs. He breaks down the importance of shareholder yield in mega-bubble markets like today's and urges investors to pay more attention to it. (24:25)  Meb then discusses managing risk on a portfolio level, including focusing on quality and value. He also covers why emerging and foreign markets are so attractive today, the opportunity in fixed-income investments like bonds and Treasury bills, and how higher interest rates have changed the game. (38:21)  Finally, Meb describes himself as a value investor and shares which areas of the economy he's most concerned about. He talks about inflation driving commodities sharply higher, gold hitting new highs, and why investing at all-time highs can still be a smart choice. (56:43)

Ignore the Mega-Bubble Mania and Prioritize Shareholder Yield

Dan and Corey kick off the show by reviewing the most recent PCE number, what's happening with inflation, and the current state of the economy. (0:41)  Next, real estate expert and entrepreneur George Gammon 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. (21:59)  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. (34:16)  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. (46:32)

The Best Investors Treat Trading Like Blackjack

 Dan and Corey kick off the show by arguing against the Federal Reserve potentially cutting rates this year. They point out that inflation is persistently volatile, gas prices are soaring and hurting everyday consumers, and the Fed is "pretending that everything is OK," according to Corey. Dan also brings up the fact that 2024 being an election year may have something to do with this. (0:43)  Next, Stansberry Venture Technology editor Dave Lashmet joins the conversation to discuss the biotech industry. He explains that he doesn't see biotech as a sector, and rather he looks bottom up at biotech companies to find a drug that will have a macroeconomic effect. Because only 6% of drugs that start a Phase I trial succeed, he says being selective is crucial. Dave also describes the three phases of drug testing and the importance of efficacy and safety data. (17:55)  After, Dave talks all things weight-loss drugs. He reflects on how he knew Ozempic was going to be a blockbuster drug from his boots-on-the-ground research, the incredible room for growth in this area, and the unprecedented amounts of money that biotech companies are spending on factories to develop these weight-loss drugs. (24:36)  Further, Dave discusses why the obesity epidemic has worsened over the decades and how exactly weight-loss drugs work to increase metabolism and suppress appetite. It involves something he calls the "winter switch." Plus, Dave brings up the U.S. Food and Drug Administration approving these drugs for the purpose of reducing strokes and heart attacks by nearly 20%. (32:40)  Lastly, Dave talks about the widespread economic implications behind weight-loss drugs and other areas of the market that could be impacted, such as the airline industry. However, Dave emphasizes once again that any mass changes are still years away due to supply constraints. (41:20)

Finding the Winning 6% of Drugs

Dan and Corey kick off the show by discussing both bubbles and "anti-bubble" stocks. Dan mentions how the S&P; 500 Index's cyclically adjusted price-to-earnings ratio, with data going back to 1871, is currently in the top 1%. He even believes this is the biggest mega- bubble in all of recorded history. (0:41)  Next, Porter & Co. analyst Erez Kalir joins the conversation and shares his financial philosophy. He talks about investing legends who have influenced his investing style, the importance of avoiding labels, and how successful investing is similar to using a Swiss Army knife. Plus, Erez explains the yin and yang of macroeconomics versus security-specific fundamentals and how there are extreme periods where one can entirely dominate the other. (13:00)  After, Erez goes into detail about biotech – the sector's history in the stock market, how it's shaped by interest rates, and how you can find companies trading at an extreme discount with negative enterprise value. He argues that not being able to time the markets is merely a myth, and he shares the seven factors he uses to evaluate whether a biotech stock is worth buying. (21:59)  Lastly, Erez explains why the conditions are right for biotech stocks today. He covers the sector being hated and how this gives savvy investors a chance to break away from the herd and profit. (38:36)

How to Value a Business

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