Doc's note: I spend most of the year traveling tens of thousands of miles around the world, keeping my "boots on the ground"... attending conferences on everything from the latest in cancer research to new developments in the world of finance. If you want to find opportunities most folks will never hear about, you need to get out into the world.
Today, Stansberry Research analyst and Wall Street veteran Gabe Marshank explains why going on field trips can help give you an edge to beat the market...
In 2015, I found myself drinking baijiu with a man in a Teletubby costume.
I was in Tieling, the 164th-largest city in China, roughly 500 miles northeast of Beijing – a place I'd bet you've never heard of before.
The Teletubby was my host for the evening.
This wasn't a prank or a bachelor party. It was part of my research.
I was working for David Einhorn at Greenlight Capital, and I was deep in a project on global iron-ore demand. At the time, there was a big debate about whether China's real estate boom was sustainable or if it was a mirage about to evaporate.
Wall Street had opinions. The sell-side had models. I had questions. And I knew the answers weren't in Midtown Manhattan. So I got on a plane and flew to China.
I didn't stop in Beijing or Shanghai. That's where all of the other investors went, because that's where the investment banks have offices. Instead, I went inland, to the steel towns and the mining hubs... and to cities like Tieling, where our translator moonlighted as a hotel bellhop.
The only real nightlife was a cavernous club staffed by dancers in cartoon costumes. That's where I met the Teletubby, who toasted us with baijiu and welcomed us like family.
Absurd? Absolutely. Informative? Massively.
Here's the truth: Great investing doesn't happen in conference rooms... It happens on the ground.
If you want to understand how the Chinese financial system really works, don't read the latest Wall Street report. Visit a city full of 30-story apartment blocks with no tenants. Talk to a local banker issuing loans against collateral that wouldn't pass muster in the West. Visit ghost malls, walk construction sites, and put your boots on the ground.
I knew China consumed more than half the world's iron ore. To make a bet on the future of commodities, I had to see where the steel was going (and where it wasn't). That included construction.
As I dug into the numbers, I discovered that every province in China was reporting gross domestic product ("GDP") growth above the national average. Every single one. That's not possible.
Those China trips made me skeptical of GDP figures and central bank reassurances. They also taught me to look past the headlines and find the data points that others miss.
And they confirmed the hunch about my career that had pulled me away from Manhattan: If you want original insights, you have to get out of the loop.
When you sit at a trading desk, you're bombarded by noise. Prices tick by the second. Headlines flash nonstop. Everyone is talking about the same thing, often at the same time.
That environment is great for short-term trading, but it's terrible for deep thinking. The further you get from the Bloomberg terminal, the better your odds of finding something nobody else is seeing.
And the market only pays you when you see something others don't.
I started taking more field trips.
Solar conferences in Dresden, Germany... oil fields in Bismarck, North Dakota... forgotten cities in northeast China. It forced me to build views from scratch, not from consensus.
Traveling isn't just about geography. It's about mindset. It's about refusing to outsource your thinking... asking questions others think are stupid... and talking to people who don't work in investor relations.
Even when I was working at Steve Cohen's SAC Capital, I preferred to do my own work. When the Northeast blackout hit eight U.S. states in the summer of 2003, others thought it was a terrorist attack. Our team knew the grid structure and could tell it was a cascading failure. We acted fast, bought index futures, and made millions.
That wasn't luck... It was thinking differently.
The market doesn't reward familiarity... it rewards originality. And these days, that's harder than ever.
Too many investors consume the same information, in the same way, from the same sources. They listen to the same podcasts, read the same news outlets, and trade the same tickers. And then they wonder why their portfolios don't beat the market.
So, what happened to me?
I stayed in the game for a while and managed hundreds of millions of dollars. I had good years and bad years. But by 2017, I'd had enough. Wall Street had become an echo chamber. The grind was relentless, and I wanted to spend more time thinking, not reacting.
So I left.
Today, I live in Berkeley, California – about as far from Midtown as you can get, in more ways than one. I work with individual investors, research what interests me, and spend my days reading and writing.
Sometimes, I walk the trails in the Berkeley Hills with a notebook. Sometimes, I hop on Zoom calls with CEOs. Sometimes, I go down research "rabbit holes." But my days of sitting in front of the Bloomberg Terminal are behind me.
And I'm a better investor because of it.
So what's the takeaway for you?
If you want better investment ideas, get off the map. Turn off CNBC. Turn off the noise – literally – and take a walk with only the sounds of birds. Allow your brain to work in the background and see what creative connections it makes.
And most importantly, generate your own input. Skip the investor presentation... Instead, read a 10-K for a company nobody cares about. Book a trip to a place that doesn't make headlines. Talk to people who actually touch the product.
The best ideas won't come from someone else's model. They come from your own hard-earned insight.
That's what I learned in China. Not just from steel production and housing bubbles, but from the dancing Teletubby in Tieling, toasting me with cheap baijiu, saying without saying it, "You want to understand the future? Then stop following the herd."
Regards,
Gabe Marshank
Editor's note: On October 29 at 1 p.m. Eastern time, Gabe is stepping forward to share the same kind of strategies that helped him make his billionaire bosses $100 million in profits... twice.
He'll also be giving away a free recommendation with 25 times upside potential from his model portfolio and research that will soon cost $10,000 per year to access.