Investing Lessons From a Dog, a Hypnotist, and a Convicted Felon

By P.J. O'Rourke

Of course, it was fun... Porter does fun.

And of course, it was smart... Stansberry subscribers don't do stupid.

If you weren't at the Stansberry Conference last week at the Aria Resort and Casino in Las Vegas... you should have been. Because the Stansberry Conference is a full-course meal for the mind (with some great meals for the mouth in between at Aria's array of excellent restaurants).

It's not an experience that can be easily summed up in print. The Stansberry Conference isn't a stick of investment Juicy Fruit gum that I can chew up and spit out in a Digest column.

So I won't try. I'll just point out that all of Stansberry's go-to people were there to talk and, what's more important, to be talked to personally – Porter, Steve Sjuggerud, Doc Eifrig, Jeff Clark, Dan Ferris, Matt Badiali, and more.

The guest speakers shed light on the entire electromagnetic spectrum of investment, from the X-ray wavelengths of portfolio insights to the ultra-low frequency of perfect trading opportunities.

I was taking notes using the "MEGO" index ("My Eyes Glaze Over") and I'm happy to report that not a single presentation caused any naps in the audience.

To name just five of the more than 30 vastly engaging, startlingly informative speakers...

• Steven Eisman – the real-life hero behind the movie The Big Short.
• Todd Buchholz – former White House director of economic policy and genius at clearing the murk of econ.
• Robert Edsel – bestselling author of The Monuments Men, about saving Europe's cultural treasures from the Nazis. He's an expert on that intersection where art, money, and politics collide.
• Raven Zachary – pioneer and entrepreneur in the fast-emerging field of unbelievable 3D augmented-reality devices. (They have to be seen to be disbelieved!)
• Hugh Herr – mountaineer and director of the Biomechatronics Research Group at MIT, a double amputee who created bionic legs so good that he can now climb mountains better than he could on the legs he was born with.

For me, personally, the high point of the conference was the Tuesday morning "Great American Liberty Panel" featuring Porter, Ron Paul, and Buck Sexton, host of The Buck Sexton Show on TheBlaze Radio. Buck is a former CIA officer at the National Counterterrorism Center who has done tours of duty in Iraq and Afghanistan.

For me, personally, it was the high point because I got to moderate the panel. (I was more than a little honored. And more than a little awed.)

Naturally, the subject was this year's confounding election.

Porter is dismissive of politics from a "top down" perspective. He feels politics is a big hole in the ground. It's always going to be there, and you shouldn't step in it.

Dr. Paul is dismissive of politics from a "bottom up" perspective. He has been in the hole. He served 12 terms in Congress and ran for president. When I asked him how we should mark our ballots in November, he said, "Don't vote. It's a scam."

Buck thinks we had better take a good look at the scam going on down in the hole of politics and try to figure out how to fill the hole with the "least worst" candidates.

It was a great panel discussion (even if the panel moderator does say so himself). But – and it's no surprise, given this year's confounding election – the discussion probably didn't win the Stansberry Conference "Cheerful Optimism" award.

Fortunately, the conference was also full of happy surprises – about opportunities in the short term, strategies for the long term, and technological developments soon to come.

And here was the biggest surprise for me: The best pieces of investment advice I got at the Stansberry Conference came from a dog, a hypnotist, and a convicted felon.

Mike Ritland is a former Navy SEAL, professional dog trainer, and founder of Trikos International, a firm that provides bomb-sniffing, drug-detecting guard and patrol dogs for SEAL teams, the Department of Homeland Security, the Department of Defense, and private security services.

A good "warrior dog" and a good investor turn out to be made the same way – with breeding, training, and sticking to the plan.

Breeding is key. Actually, who your sire and dam are doesn't matter much in you as the investor. But it really matters in your investments. Who "conceived" this financial venture? What is their "business bloodline"? Do they come from a strong, healthy, assertive, and loyal "litter" of enterprises? Or are they mangy curs and stray mutts?

Training is what Stansberry – and Ritland – is all about. Nobody becomes a good investor without the ability to obey the commands of economic laws, market forces, and common sense. We all know too many investors who can't learn the difference between "sit" and "fetch."

Then Mike brought his dog Rico out on stage. Rico did everything Mike told him to do as soon as Mike told him to do it, the way a well-bred, well-trained dog should. But Rico was so well-bred and well-trained that when Mike put a thick padded sleeve on his left arm and gave the command, Rico attacked his own master!

Was there ever a better lesson for investors? No matter how much you love an investment and no matter how good that investment has been to you in the past, when the command comes from economic laws, market forces, and common sense, bite the hand that feeds you.

Joel Silverman gave a hypnotic presentation. Which makes sense, since Joel is a hypnotist. Just the fact that hypnosis exists gives investors something to ponder. We can all get hypnotized by the markets. "Watch the market go back and forth, back and forth, back and forth. You are falling into deep s&^%."

Joel snapped us out of it with a brilliant exhibition of his skills. More than a dozen audience volunteers were sent into a trance on stage and provided with subconscious suggestions that made for hilarious scenes.

My favorite was when the volunteers were told that "ladies and gentleman" was a filthy, disgusting, and utterly offensive phrase. Then Joel turned to the auditorium and said, "Thank you, ladies and gentlemen..." The volunteers jumped to their feet and began yelling at Joel, telling him to be ashamed of himself, to apologize to everyone in the room, to never say anything like that again and – as one fellow in a particularly deep trance put it – "Shut the f*&% up!"

But besides the entertainment, Joel was making a bigger point. The subconscious mind is a powerful force. It is a source of immense strength, but sometimes it's also a source of ridiculous confusion.

Joel showed how the subconscious is the reservoir of everything we have in our mind. Be careful what you put in your reservoir. The subconscious can be tapped to provide us with great powers of concentration, focus, and endurance. But you need more than just your "gut instincts."

The conscious mind is where your clear thinking and rational decisions get done. And that, Joel explained, is why even the best hypnotist can't get people to do something they think is wrong.

When the tick-tock of the markets is putting you under, tell your subconscious what Joel told his volunteers: "You will now wake up feeling relaxed, confident, and full of renewed self-determination."

Then came the convicted felon, Andrew Fastow. He gave the Stansberry Conference's final – and to my mind, most powerful – talk. Fastow is the former CFO of Enron who spent six years in federal prison for... following the rules.

Fastow was the architect of the preposterously complex and amazingly opaque "off-balance-sheet special purpose entities" that Enron used in its quarterly balance sheets to conceal the corporation's massive losses.

Fastow knew what he was doing was deceptive, but he didn't think it was "wrong." He had consulted Enron's lawyers and outside counsel and Enron's bookkeepers and independent auditors. They all told him that his financial shenanigans obeyed the letter of the law, conformed to SEC regulations, and dotted the Is and crossed the Ts of generally accepted accounting practices.

"I followed the rules," Fastow said, "but I forgot the principles."

Even after he was convicted, he didn't really feel he was guilty. It wasn't until he had to explain to his teenage son why he was in prison that everything became clear to him.

He told his son, "Suppose I had a rule that you could drive to a party, but you couldn't drink beer there. And when you got to the party, a friend said, 'I know you're not allowed to drink beer. But I have beer pills. They have the same effect as beer, but you won't be breaking the rule because, technically, you didn't drink beer.'"

Fastow asked his son, "Would you take the beer pills?"

"Of course not," his son said. "It would go against the whole point of the rule."

"That," he said, "is why your father is in prison."

Fastow asks the question: How many companies and corporations are following the rules but forgetting the principles in their accounting, market evaluations, tax compliance, conference calls with analysts, and footnotes in their annual reports?

Fastow answered the question: Most of them.

How did a dog, a hypnotist, and a convicted felon make the Stansberry Conference so valuable to me? Use your "warrior dog" nose to sniff out good investments. Be sure that those investments come from a great business bloodline that obeys the commands of free enterprise. Apply all the powers of your conscious and subconscious mind to your investment strategy. And always remember that good principles are at the heart and in the soul of good investing.

Regards,

P.J. O'Rourke