How gold goes to $5,000
From Stansberry Investor Hour:
What happens when 15% of the largest companies in America can no longer afford the interest on their debts? As the Federal Reserve pushes interest rates past 3%, Porter makes the case that we could see investors pulling out of the stocks to put money back into the safety of government bonds. Is this how the air comes out of the current bull market in equities?
Extreme Value analyst and editor Dan Ferris joins the show to talk about how to spot the next “$6 Amazon Moment,” how his value investing style has changed in an overheated market, and what could usher in the next “Golden Age of Value Investing.” Porter asks Dan to explain the first thing he looks at when evaluating a beaten down stock and reveals a scenario for $5,000 gold that doesn’t sound outlandish, at all.
A listener writes in to tell Porter he’s completely backwards when it comes to position sizing with bonds, and Buck tells everyone he’s moving to “the swamp” in D.C.
06:09 Porter shares a grim finding he first revealed in last week’s Stansberry Digest – that a big number of supposedly blue-chip companies don’t even appear able to pay off the debt they’ve accrued. “What if 15% of the 1,500 largest countries in America can’t pay the interest on their debt?”
09:21 Rising interest rates will crush debt-ridden companies that can barely make interest payments even in this low-rate regime. Now Porter has a warning for people with large amounts in the stock market.
11:02 Porter revisits his No. 1 prediction for 2018, that gold would outperform Bitcoin.
22:23 Porter shares the story of that time he bought Amazon stock in the late 1990s with “every penny he had saved in the world,” what he spent the profits on two years later, and how, if he’d held those shares and done nothing at all with his life, he’d be far richer than he is now.
44:57 James G. writes in to ask Porter about his American Jubilee thesis. What are his thoughts on the Federal Reserve, rather than our politicians, doing the honors for America’s debt forgiveness?