Episode 394: Gunslinging Gambler or Cautious Investor: Which One Are You?

On this week's Stansberry Investor Hour, Dan and Corey welcome Herb Greenberg back to the show. Herb started out as a financial journalist and now publishes On the Street, a newsletter that offers observations, insights, and opinions on various stocks and the broad market. Herb has spent 50 years researching and writing about the markets, and he joins the podcast to impart some of his wisdom.

Herb starts off by reintroducing himself, his opinions on market risk, and his history with long-biased research. He emphasizes that knowing yourself, your psychological makeup, and your skill set are crucial components to success. Some investors thrive under the pressure and enjoy the gambling nature of stocks, while others prefer to sleep well at night and take a more cautious, long-term approach. Either route is OK. And the same principle applies to specifics like when to sell a stock... "There's no one size fits all," Herb says. But the upside to every mistake is that you'll quickly learn more about yourself...

I think in a world of FOMO and YOLO – you know, fear of missing out and you only live once – there's that dynamic, until of course you lose money. And once you lose money, that gives you discipline.

Next, Herb discusses a recent post in his On the Street newsletter about home-furnishings company RH. Not long ago, RH's CEO made comments concerning debt that raised many red flags. This leads to a conversation about software company MicroStrategy, which has been using debt to buy bitcoin. "It's a pyramid atop a pyramid," Herb quips. He also shares his thoughts on bitcoin itself, talks about the 2021 market mania where "everyone was a bag holder," and dives into how retail and institutional investors differ in risk versus reward...

The smart ones always looked at the risk first, and then the reward. It's the retail investors that are basically looking at the reward first and ignoring the risk, because they're stumbling into it.

Finally, Herb evaluates today's market optimism and the potential for an inflection point. He notes that many garbage stocks have gone from deep in the red to in the green this year for no reason other than hype. Herb then urges investors not to get complacent with their portfolio holdings and to always consider differing opinions on stocks, in case the setup has changed since you first bought in. "You lose sight of the ones that have not been problem children." Herb rounds things out with a discussion about short selling and market inefficiencies created by passive investing. He says...

It's the stocks no one's paying attention to that still create a big inefficiency in what's perceived to be an efficient market.

Click here or on the image below to watch the video interview with Herb right now. For the full audio episode, click here.

(Additional past episodes are located here.)

The transcript is coming soon.