On this week's Stansberry Investor Hour, Corey welcomes his colleague Brett Eversole back to the show. Brett is the editor of the True Wealth, True Wealth Systems, and DailyWealth newsletters. He also serves on the Investment Committee for Stansberry Portfolio Solutions.

Brett kicks things off by sharing what he learned from his mentor Steve Sjuggerud, including the investment philosophy of buying assets that are "cheap, hated, and in an uptrend." He examines the recent tariff drama and why he believes we're about to return to a boring market fueled by fundamentals after several months of turbulence. As Brett explains, a lot of it has to do with increased capital spending from hyperscalers...

Goldman Sachs just came out and said that they expect the hyperscaler capital expenditures to be $1.15 trillion in 2025, 2026, and 2027. For those same companies, they spent around $480 billion over the three prior years. So what really in a lot of ways kind of saved the market in '23 and '24 was this AI rollout and this massive amount of capital spending from the largest corporations in America into the real economy.

Next, Brett reviews the difference between secular bull markets and cyclical bull markets. He compares today's bull market (driven by AI) with the bull market of the late '90s (driven by the Internet), noting that a massive infrastructure buildout caused both. Brett predicts a normal market for the next few years, followed by a dot-com-style AI boom and then a "lost decade." He also discusses the S&P 500 Index decoupling from the U.S. economy, tariffs hurting smaller companies, and why he's bullish on gold and silver...

One of the things that's exciting about gold stocks as well is that – despite the good rally we've seen over the past 12 months or so – shares outstanding are still falling. So retail [investors haven't] really got onto that idea in an aggressive way yet. And I would say it's pretty similar for silver.

Finally, Brett talks about indicators that investors can use to gauge the market's underlying health, as well as what divergence between the indicators can mean in both the short and long term. He then dives into his work on Stansberry Portfolio Solutions, including the strategy the team uses to find the best companies and how to manage risk. And he closes things out with an analysis of today's real estate market...

I think if the U.S. housing market was going to die, it would have died a long time ago. We're essentially three years into mortgage rates being twice what they were for the decade prior. We've had 6% to 7% rates for a solid three years now, and home prices haven't budged at all. And I think that tells you just how out of balance the inventory versus the number of buyers really [is].

Click here or on the image below to watch the video interview with Brett right now. For the full audio, including Corey's post-interview thoughts, click "Listen" above.

Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Brett Eversole is the editor of True Wealth, True Wealth Systems, and DailyWealth, as well as a member of the Investment Committee for Stansberry Portfolio Solutions. He has been with Stansberry Research since 2010. Boasting a strong background in applied mathematics and statistics, including a degree in actuarial science, Brett has put his analytical expertise to work in the markets with a top-down investment approach.

He spots big macro trends in the market, looks for opportunities based on valuation and overall market sentiment, and waits for momentum to be in his favor before buying in. This approach means Brett consistently takes a contrarian approach to investing. And combining that with data-driven analysis leads to fantastic long-term performance.

Corey McLaughlin:    Hello, and welcome to the Stansberry Investor Hour. I'm Corey McLaughlin, editor of the Stansberry Daily Digest. Dan is on vacation this week, but the show will go on. And today we're talking with our colleague Brett Eversole, Stansberry Research senior analyst. Brett's been with the company since 2010, he's the lead editor and analyst for True Wealth, True Wealth Systems, and the free DailyWealth e-letter. As I think you'll see, he's a sharp, insightful guy, and I like to think of him as a descendent of Steve Sjuggerud, for those that know him, Stansberry's co-founder. You may hear some familiar wisdom from Brett.

So, here it is, I'm looking forward to having this chat with Brett, and let's get to it.

All right, Brett, welcome back to the show. I know our subscribers and all our listeners are likely familiar with your name and your work. But for those who might not be, let's just kind of orient them, briefly, kind of what your responsibilities are here at Stansberry.

Brett Eversole:            Yeah, well, thank you, Corey, having me back, and I always enjoy coming and chatting with you and Dan, although we threw Dan off this time, so, probably have a more lively conversation, if you ask me. But, yeah, I've been with Stansberry Research for 15 years now, a long time. I write True Wealth and True Wealth Systems, and for longtime readers, they probably remember a guy named Steve Sjuggerud, who was one of the founding partners of Stansberry Research. Steve hired me back in 2010, and I've got a background in mathematics, so he kind of brought me in to develop and build kind of training systems.

And that turned into the product that is now called True Wealth Systems, and I worked with him for a long time. And then when he stepped away, a few years ago, I kind of stepped into those roles and have been working on True Wealth and True Wealth Systems for a long, long time, and now they've kind of come under my wing. So it's been a lot of fun over the last few years.

Corey McLaughlin:    Yeah, it's been interesting to watch you kind of take over. I think of you as like a direct descendant of Steve Sjuggerud [laughs], and it's nice to have somebody be able to pass that on to and learn from him. Let's just, I wasn't going to go here right off the bat, but what's one or two things that stick out from working with Steve, maybe in your early days, that were eye-openers for you?

Brett Eversole:            Yeah, so, this isn't necessarily investment-related, but one of the things that I found incredible about Steve, and this is very much a personality trait, is that any time there's a door that's kind of just barely cracked open, he just kicks it open, wide, wide open, and walks right through it. And what I mean by that is, he goes out of his way to find people who are really, really good at whatever they do. That could be investing, that could be music, that could be surfing, a lot of his hobbies. And if he has any chance to open up a relationship with these people, he'd kick the door down and open up relationships with those people.

And so, I got to ride shotgun with him throughout the years, doing that with a lot of different – in the investment world and then outside of it, as well. And I think that's just a very unique personality trait that he has, that allowed him to be a generalist in a lot of fields, but get very, very detailed, on-the-ground information from the right people whenever he needed it, about whatever it was. So that's a kind of a personality thing that he did – I definitely can't do it the same way he did. He's a one-in-a-million, I would say, at doing that.

Because, obviously, you can do that wrong and just make a lot of people angry, be kind of overbearing and difficult. He always tried to give those people a benefit right after that. Instead of asking them for something, he tried to deliver something to them. And then that's a great way to forge those relationships. But the other thing I would say is – it's kind of funny, looking back, because I think I was able to take over True Wealth and True Wealth Systems off of Steve I think relatively easily because – it's two things.

No. 1, he obviously kind of molded who I am as an investor. But at the same time, I've never met anyone, in my almost 40 years of living, who thinks more similarly to me than Steve. Somehow, he and I, the way we come at problems, the way we diagnose problems, the way we think about kind of everything in the world is almost perfectly aligned. And it's almost to the point where it's bizarre where, even early on, we would start talking about a subject, and we could just be finishing each other's sentences.

And we angle towards the same weird part of a thing, to understand it and think about it and move forward through it. So I think in a lot of ways, it accidentally worked out perfectly [laughs], if that makes sense.

Corey McLaughlin:    Yeah, yeah. So, it wasn't hard to be convinced of "cheap, hated, and in an uptrend," for you?

Brett Eversole:            No, it kind of made sense right off the bat. And for me, it's not a question of does it make sense. It's a question of do the numbers bear it out. Because he and I both have a relatively mathematical mind, I would say. So, what I've learned through 15 years in the world of investing is that people love to tell stories. Stories are really how you sell investments, stories are what people get excited about, stories are why people hold onto investments, whether they're going up or down.

And I've learned that stories can be important, and you have to understand why a thing is happening. But at the end of the day, the numbers are the truth. Stories can be fudged, stories can lie, stories can be made up, but if you have something that has been kind of proven mathematically, over a long period of time, there's no getting around that. The numbers and the fundamentals really are the truth, over a long period of time. So, again, the philosophy, like you said, that we use is "cheap, hated, and in an uptrend," and this is kind of like a – it's a great philosophy for that generalist-type idea, because it's kind of holistic and all-encompassing.

So you look for things that are good value, cheap, you obviously don't want to overpay if you can avoid it. You also want to buy things that other people are not excited about, so that's hated. You think about housing in 2010, or gold at the bottom in 2016 to 2017, or real estate over the last two years, I would say. These are things that people have absolutely no interest in. Generally speaking, when you find things that are hated, they're also inexpensive. And those are two really good kind of starting points.

What Dan does in value investing probably has a lot to do with "cheap and hated." The last part that we tack on, or that I tack on, is the uptrend. And so, when you wait for prices to start moving higher, what that's done is it's the market telling you that all that research you've done is right. Because you can find things that are cheap and hated, that have been that way for a year or two years or five years, and that are maybe never going to recover to what they were in the past or what you hope they'll be in the future. But if prices start moving higher, that's the market telling you that, "Oh, yeah, there is something here," and other people are starting to notice it.

So you can just buy waiting for the trend to be in your favor and just remove a lot of risk from the situation. And what we always want to do, as investors, is try to find the most upside potential with the least amount of risk. So, cheap-hated-uptrend is the way I get there, and I think it's something that you can really prove throughout history, mathematically, that works really well.

Corey McLaughlin:    Yeah, and you guys and Steve and you and the whole team have done it for a while and proven it. I remember when I first started at Stansberry, one of the earliest examples for me of that, seeing you guys do it, was after COVID – oil and energy. I think you were some of the first people I saw to say buy energy. I think it was the end of 2021. Or was it '22?

Brett Eversole:            That was probably in maybe August or September of 2020. And, yeah, It was a crazy situation, with oil prices going negative there, people were having to pay to have their oil stored on barges, because there were no capacity left, with the global economy shut down. And it took a minute to get going, but, yeah, I think we had some trades that were up 100% or 200% in 12 months or so. Because it was a very unique kind of crazy situation.

Corey McLaughlin:    Yeah, for sure. And maybe we can talk real estate a little bit later. I do want to ask you this, because I have it on my mind, but let's maybe go till – I was looking at the last time you were on here with me and Dan, March 2024. The title of the episode was "'Boring' Times Ahead Could Mean Fantastic Gains." And you said, "I do think stocks will do well through the rest of the year. I think the market's in a pretty healthy place."

Of course, that was right, right? The S&P 500 ended up 25%, last year.

Brett Eversole:            Yeah. Something like that.

Corey McLaughlin:    Yeah, and that was leading into the election, presidential election. Now, we had calmer times last year. Now is not boring at all – it's been anything but boring. I guess, what are your thoughts now, about just what you're seeing from the indicators that you trust, just market in general?

Brett Eversole:            Sure. Yeah, it's funny. I think your setup is completely right, and I think if we'd had this conversation even a month ago, definitely two months ago, I would've had a different outlook. But I think we're very quickly moving back into a boring market, and I think that that's already happened and people are – they're not going to catch up to it for a few months, but I think it's already very much happened. Here's what I mean when I say that.

I think a boring market is one that is driven by fundamentals. [Laughs] There are certain times, and we just lived through one, where you have a lot of headline risk. Maybe it's the pandemic coming on in March of 2020, maybe it is the inflation going on in 2022, where, every month, month after month, the next inflation print is going to determine what happens to the market. Or not just over the next few days, but over the next few weeks.

But then you get into markets where there's not really anything crazy going on, and then it's just the fundamentals that matter. Now, it might surprise people to hear me say that right now, because of what's been going on with tariffs. But what I've seen happen over the past – the pandemic and the 2022 inflation are great examples of this. When you have something that's new and crazy and truly unexpected – I think we bill things as unexpected pretty often, when they're actually not that unexpected. When you have a truly unexpected event, markets react dramatically and quickly.

That's exactly what we saw in April, on the "Liberation Day" announcement, and then with tariffs being pulled off. And in the weeks and months since, there have been plenty of news on tariffs. And when you get the first piece of news, it's really jarring. When you get the second piece of news, its' pretty jarring. When you get the third, a little less, and a little less. And when you're on to the hundredth piece of tariff news, it stopped moving markets.

We saw the threats over the weekend towards copper and towards Europe, and U.S. markets didn't move, effectively. And so, I think we're to that point where, of course, if we actually went back to Liberation Day tariff levels, that would be a mess, and we'd have to figure that out. But I think the market doesn't believe that that's going to happen, and so, I think what is going on is that we're moving back to fundamentals mattering. And at the end of the day, we had a really good first quarter of earnings.

We're getting quickly back into earning season for quarter 2, and I think it's going to be fundamentals that are going to drive things. And to me, that's a pretty bullish place to be. Goldman Sachs just came out and said that they expect the hyperscaler capital expenditures to be $1.15 trillion in 2025, 2026, and 2027. For those same companies, they spent around I think $480 billion over the three prior years. So, what really, in a lot of ways, kind of saved the market in '23 and '24 was this AI rollout and this massive amount of capital spending from the largest corporations in America into the real economy.

They're going to spend about twice as much over the next three years as they did over the past three years. To me, that's incredibly bullish for the U.S. economy, that's incredibly bullish for the U.S. stock market. It doesn't mean that every company is going to do well, but at the end of the day, seven companies make up 35% of the S&P 500, and if they're spending like that and getting the returns that people expect out of it going forward, those companies are going to do incredibly well and the overall market's going to do incredibly well. So I think we're going to see, through second-quarter earnings, stocks are going to trade based on those fundamentals.

So, we're moving back to that boring market, and I think the underlying pieces that are going to drive that market are incredibly bullish. So, I kind of have, I guess, the same thing to say I did last year, is that I think we're mostly past tariffs. I think there could be a big, unexpected announcement, but it seems that's pretty unlikely, at this point. I think people have already moved past it, whether they realize it or not, fundamentals are going to drive the market, and fundamentals are darn good.

Corey McLaughlin:    Yeah, wow, OK, yeah, a lot's happened between last time you were here and this time, but we're back to a nice boring place, maybe. I kind of feel similar. You saw, in April, obviously, that big drop in stocks. And then, with each progressive move, as you said, I thought of – again, something Steve said, and you've said, is things were getting less bad as each thing went along, each negotiation, and people can start to see what is actually happening here. For example, over the weekend, I think one of the, or recently, one of these letters that the White House sent out on tariffs, one of the rates was actually higher than the reciprocal tariff rate from Liberation Day.

Brett Eversole:            Yeah, and you were up I think it was 40% instead of 20%, right?

Corey McLaughlin:    Yeah, and you saw, like what you said, nothing really much happened negatively in the market. So, yeah, interesting. So back to fundamentals, hyperscaler spending – it sounds like this was just a blip in the bull market, right? Or I guess we never technically got into a bear market in April.

Brett Eversole:            Yeah, people like to argue about that. In my mind, if it's not negative 20%, there's no rounding involved. I've argued with people about this, about 1990 [crosstalk] down 19.9% or something.

Corey McLaughlin:    Yeah, it was pretty close, yeah.

Brett Eversole:            You have to draw your line somewhere, and once they're drawn, they're drawn.

Corey McLaughlin:    Yeah. So, we're back bullish, and another thing I know you've written about is secular bull market versus cyclical bull market, cyclical bear and bull and secular. Maybe can we get back to that a little? That's something you've been talking about last year, too. Are we still just in that? Is that just where your head's at?

Brett Eversole:            Yeah, so a little bit of background on that. So, we think of these, like we just talked about, if we were down 21% instead of 19%, in April, that would be a bear market. We call a negative-20% decline a bear market. But what we don't think about is that there are bear and bull markets in the shorter term, and then there are these much, much longer-term cycles. So, we call those secular bull markets. Those tend to last 15 to 20 years for bull markets, and 12 to 15 years for bear markets, is what they've been over the last 100 years or so.

So this current secular bull market we're in, we generally peg these when stocks break out to new highs. So it's not that 2009 bottom. It's in 2013 when we broke out to a new high. So from there, we would expect stocks to have a roughly 15- to 20-year bull market. So that puts us to 2028, or the early-2030s, something like that. Now, what tends to happen when you study these throughout history, and I'll caveat it by saying we don't have a lot of these cycles.

Maybe in 500 years somebody will be doing this and they'll have a ton of cycles to look back on, but compared to all of history, the stock market's relatively new. So we have 100 years of data. What tends to happen is, you get the secular bear market bottom at the end of horrible economic times. So you think about the '70s being this terrible inflationary time, the economy was a mess in a ton of ways, and then you get this bottom in 1982. For about half of that secular bull market, you kind of have an economic recovery.

Nothing crazy is going on, but things just stop getting bad and they stop getting better. So throughout the '80s, you had a lot of financial booms happening and the economy just generally slowly improved. Then, in the 1990s, you got a real catalyst, and that was the Internet. That turns into kind of a massive capital spending boom, and then that turns into a speculative bubble at the end. What's playing out right now, in my mind, is exactly the same.

So the 2010s, as we came out of that secular bear market in the 2000s, was really just kind of like a return to normal. People complained about the slow growth, but growth was better than it had been over the prior 10 years. The economy was improving, the job market was strong, companies were getting better at being companies. And then, you get to the early 2020s and now we have this AI catalyst. And so, what I think is going to happen, and it's kind of playing out, it's almost, in a lot of ways, eerily similar to how the 1990s were playing out.

In that, what we have right now is this massive infrastructure buildout. Like I said, those hyperscalers have spent half a trillion dollars, they're going to spend another trillion dollars over the next three years. I've seen numbers as high as $4 trillion to $5 trillion, by 2030. So we have this massive capital-expenditure buildout of this new technology, new infrastructure for new technology. What we haven't seen yet, is many – there are a few, but we haven't seen a lot of companies actually building businesses on top of that infrastructure.

That's what turned the 1990s from an Internet boom to a dot-com mania, it's when all those companies get built on top of it. And so, I think probably for the next two to three years, we're going to continue down this infrastructure buildout. At some point, we're going to start getting massive amount of companies built up on top of this. When that happens, we are going to see, I expect, a dot-com-style mania, where most of it is built on faulty assumptions, nothing businesses that are getting crazy multiples. You can point to a handful of things in the market today and say, "This is like that," but I think we're not anywhere near that yet.

So, I would expect kind of a more normal market over the next two or three years, and then at some point, whether it lasts 12 months or 24 months or 36 months, it's hard to know, we're going to get that mania type boom. That's where the secular bull market's going to peak. So, that could be 2029, it could be 2031, it could be 2032, but it's almost certain to happen, and we're probably going to get a lost decade in stocks after that. So that's kind of what I see, so it is good news for the longish term, but all of these things that seem like they're going to work out forever never do. So, there will be a reckoning, eventually, but I think it's a lot farther off than most people expect.

Corey McLaughlin:    Yeah, probably so. I'm thinking, as you're talking there, I'm thinking about – there's a lot of these private AI companies that are thinking about going public eventually. Maybe that aligns with that next period, what you're talking about. And when you know, you'll know, when you're in it, right? When everything has ".ai" at the end of it and is getting – [crosstalk].

Brett Eversole:            Exactly. We've started to see some of that, right, with CoreWeave going public and that being incredibly successful, but still, that is an infrastructure company. One that I think of, that I've heard recently, is Perplexity, which is built on top of OpenAI's technology. So that's literally a product built on top of the infrastructure, that is exactly this thing. I think in the private markets, that's raising at, like, $15 billion or something. Which is a big number, but it's not 1998 anymore.

We have $4 trillion companies. OpenAI is a $300 billion to 400 billion company, in the private markets. So, to see a tiny little company – $15 billion is tiny these days, that's the thing. So, if we saw these kind of things raising at 200 times sales with a $400 billion valuation, that would be crazy. We're not there, yet. We're not even close. It's still a long way off, I think.

Corey McLaughlin:    Well, that's encouraging for the next couple years. And the lost decade part that you mentioned there isn't, for – I'm still – we're on the relatively young side, here. That wouldn't be very fun, lost decade, but [crosstalk].

Brett Eversole:            It depends how you look at it [crosstalk] you get to buy, consistently, at lower prices, so that's good. But if you need the money in the next 10 years, it's less good.

Corey McLaughlin:    That's right, yeah, it's all about the timing. Can we go back to tariffs for a second? When we were prepping for this, I said, "Hey, maybe I want to talk about tariffs, a little bit," because people have been writing in, into the Digest. I asked the question, "What are people actually seeing?" and we have a lot of small-business owners and whatnot in our audience. And a lot of them were saying, basically, "These things are killing us. Our profit margins are shrinking," and the uncertainty is more paralyzing than anything.

And then we get into the philosophical discussion about short term, long term. But you were, like, "Yeah, that's great, I don't know if I'll have too much to say about tariffs." And I think that's the point, right? Why is that your response to tariffs or whatever it may be, just through the work that you do?

Brett Eversole:            Yeah, so, there's a trend that's been going on for at least the last 15 or 20 years, and that is that – when I say stock market, I think S&P 500, right, so the 500 largest companies in the U.S. There's been a trend that, as time has gone on, the S&P 500 has kind of decoupled from the overall US economy. And it's, like, every year that goes, the S&P is a little less representative of the overall economy. I'm not saying that that's a good thing or a bad thing, it's just a thing that has happened.

And I would say in the last three years especially, since that bottom in 2022, we've seen this play out in I would say relatively dramatic fashion. In that, mid-cap stocks have done a lot worse than large-cap stocks, and small-cap stocks have done worse than that. So it's kind of this farther down the chain you go regarding size, the less successful the U.S. economy appears to be. So, the S&P 500 has done incredibly well – most things that are smaller have been hurt.

At the end of the day, very large companies can handle these things much easier, when it comes to tariffs, whether it's uncertainty or the actual costs. In the first quarter, S&P 500 margins were, like, 13%, which is not quite the all-time high, but pretty darn close. They just, they have a lot more levers to pull. At the end of the day, they probably have better people with more experience, who have gone through more crap throughout the years, and more access to capital, all of these sorts of things that make this kind of stuff kind of easier to get through.

So, it's not that I would say that tariffs don't matter. I would say, if I'm thinking about investing, especially in large cap stocks, tariffs don't matter. And those are two very different statements. I'm sure for the small-business owner, especially in certain industries, it's absolutely brutal and potentially even business-ending, which is terrible, and I definitely feel for that situation. But you can just make a choice, as an investor, "I'm just not going to buy small caps," or, "I'm just not going to buy midcaps."

I'm not going to fight the tape, to a certain extent. I'm not going to go out there and hope that things are going to reverse, when they're kind of a big sea change against you, working against you. Instead, you can just go play in the sandbox that's working right now. So, that's kind of how I view it as an investor, but that's a different discussion than do these matter at all, if that makes sense.

Corey McLaughlin:    Yeah, totally, no, I get what you're saying. And you look at small caps, I think they still haven't gotten above – let me look back at the chart here – they still haven't gotten above the previous highs of several years ago, so.

Brett Eversole:            Yeah, it's been a super tough period. And I made a couple of recommendations thinking that that trend's going to buck, and there's a lot of value there and this and that and the other. But at the end of the day, it's just – it's been a mistake on my end to try to do that, because I should take what the market's giving me. And I think that's an important lesson for investors, is that you can always try to – you can get mad at the market for not doing what you want it to do, or you can take what it's giving you and move forward from there. So, that's a lesson I've learned a handful of times throughout my career, and I'll probably learn it again in the future, but that's OK.

Corey McLaughlin:    Yeah, me too, for sure. What's one area maybe we can get into that you're – let's analyze one area that you're, I don't know, bullish or bearish on right now. Is there anything that sticks out on what you've been – I know you can't really give away the recommendations per se, here, but is there an area, sector? I know that you've written about international stocks in the past, as well, everything. The great thing about your systems is that you can apply it to everything. So, anything stand out to you right now?

Brett Eversole:            Yeah, I think there are kind of – there's a couple of ways I could go. I think one of the more obvious opportunities right now, that most people probably are just now kind of waking up to, is in precious metals. I've written about gold a lot, over the last couple of years, Gold kind of struggled around that $2,000 mark, from 2020 through, really, late 2023, early 2024. We finally saw that breakout happen and the market was really only moving by kind of big institutional buyers.

Mostly, global central banks were buying the crap out of gold in 2021, '22, '23, and that retail has kind of just woken up. Now with gold over $3,000 an ounce, retail is now just kind of waking up to the opportunity there. But I think it'll probably play out – it'll probably take longer to play out and lead to higher prices than most people expect. If you look at a chart of gold now and you see $1,800 an ounce three years ago, and now you see $3,400 or $3,500 an ounce, it feels like you missed it in that regard. I'll say, when I started in this business in 2010, I was just enamored.

Gold is like a thing that is kind of put into my head, it's seared in my brain how the gold market was back then. And that's because it was definitely the mania phase was underway, at that point. Gold was eight years into what would turn into a 10-or-so-year bull market, every advertisement on television was – and this was back when people actually watched financial television – was "We buy gold" or "Sell this gold" or "xyz." It was all completely related to the metal, so it was very much a retail mania that was underway, at that point.

And that went on for another year and the price went up 50% or 70%, and then it fell for year after year after year and dropped 50% or 60%. And so, I think we're at the start of that retail mania type phase in gold. What's interesting is that, for the first time this year, we've seen the gold miners really start to pick up. They had a lot of cost issues –

Corey McLaughlin:    Everybody's been waiting for the gold miners to take off, yeah.

Brett Eversole:            Yeah, they were absolutely crushed by inflation. I would say that these are historically some of the worst businesses in the world. [Laughs] I like to say that a successful gold mine is one that can just stay in business for more than 10 years without going bankrupt. Because it's a difficult business with low margins, and you are a price taker, not a price maker. So, you can just go from a really good situation to a really terrible one, effectively overnight, and it's completely out of your control.

But these companies had massive cost overruns during the inflationary period of 2022 and 2023, and they'd really gotten that in order in the last 12 months or so, where costs have moderated and gold prices have gone up a lot. So, the leverage factor that we generally get out of miners has finally started to work in their favor, really in the past 12 months, so, we've seen a lot of good action there. The other thing [crosstalk].

Corey McLaughlin:    Sorry, what's the trends like with the gold miners? Is it like with ETFs or [crosstalk]?

Brett Eversole:            So GDX is the VanEck Gold Miners Fund, and that's kind of the broad basket. They also have a junior miner, GDXJ. These things are effectively the same product, if you look at how they perform over periods of time. I think the other kind of sleeper opportunity is in silver. Silver has definitely lagged behind gold, over the last couple of years, and it – so we do a ratio, I wrote about this recently, the gold-to-silver ratio, which is just how many ounces of silver does it take to buy an ounce of gold. Now, this has moved around a lot over history, but essentially, any time it's hit a multiyear high, silver has gone up, I think on average, about 40% over the next year.

So we saw a multiyear high at about 100, earlier this year. Silver has been actually taking off in the past few weeks. I think that's a trend where there's probably a lot more upside. Silver tends to be more retail-driven as opposed to institutionally-driven, so if we're moving from, I would say, the early stages of a boom, where kind of early on you expect smart money to be buying, institutions to be buying. Later on, retail comes on, and eventually you get an all-out mania. So, I would expect silver to kind of start moving up as we enter that retail phase, which is what we're kind of seeing right now in the data.

Corey McLaughlin:    How are you seeing that in the data? How do you gauge whether retail has taken off [crosstalk]?

Brett Eversole:            So, yeah, the thing we love to use are shares-outstanding ETFs. So, this is kind of – when I first started, the ETF business was relatively new, and this wasn't really a thing that was that useful. I would say over the last five or 10 years, it's become maybe one of the most useful sentiment tools. So you think about what an exchange-traded fund is, right? It's just like a very easy way for anyone to buy into, a lot of times, a hyper-specific investment idea. So you can buy the S&P 500 ETF. That's not really going to tell you much about what investors are doing, because they're probably just buying in their 401k or it doesn't really matter.

But if you have an ETF that just tracks the price of gold, well, people only buy that if they want more exposure to the price of gold. So, the way ETFs work is, if I go and I try to buy a million dollars of [SPDR Gold Shares (GLD)], which is the gold ETF, the market maker is going to create those shares and then they're going to go buy the underlying asset, so it can sell their shares to me. So then, the share account goes up, based on that demand, effectively. If I go to sell that million dollars, they're going to sell the gold and liquidate the shares.

So, these share accounts move up and down over time. This is kind of the defining feature of an exchange-traded fund. What that means is, when you have a hyper-specific investment idea, like gold or like silver or like gold miners, you can look at what that share account's doing over time and get a feel for what regular investors think about this idea. So, we saw GLD's shares outstanding falling, throughout 2021, 2022, 2023, and most of 2024. So, despite gold prices rising, it was very much institutions, it was global central banks who were buying the metal and pushing the price higher.

Because retail, through GLD, you could see, were selling. I also, I've got a handful of coin dealers that I like to talk to, as well, and they said the same thing, there was just no volume, the phones didn't ring for two years. They've told me that that has started to change this year, and then also, we've seen a reversal in shares outstanding for GLD. So it's gone from I would say a major downtrend and it's started to become into a pretty major uptrend. One of the things that's exciting about gold stocks, as well, is that despite the good rally we've seen over the past 12 months or so, shares outstanding are still falling there.

So retail hasn't really got onto that idea in an aggressive way, yet. And I would say it's pretty similar for silver.

Corey McLaughlin:    OK, I think a lot of people will be happy to hear this, the setups in gold and silver, and stocks, from what you're saying. We're headed, I don't know, it sounds like, to you, we're in a good place, if we're talking precious metals and stocks, That's a pretty good situation, right?

Brett Eversole:            Yeah, I think so.

Corey McLaughlin:    Is there one indicator that you really like, to kind of gauge market health? Since you're saying it's all about the numbers here, is there a number that, if people, just wondering, some number to trust, what's one that you would say has to be on their list?

Brett Eversole:            Yeah, so I think one of the most important things is something that's called the advance-decline line. You can find these on all kinds of different things. The one that I've used, historically, is the New York Stock Exchange all listed securities advance-decline line. So, this is a cumulative series. So, say, today, there are 1,000 things listed on the NYSE to go up, and there are 800 things that went down, then you take the positives minus the negatives and you end up with 200, in that case. Tomorrow, you do the same thing, say, you get 500 tomorrow, then you add those two together and you get 700.

And then, the next day you do that and you add that number to 700. And then, over time you build this cumulative series. And it's essentially telling you, this is an indicator of what we call market breadth, and what that means is how broad, or narrow, is the rally that's going on right now. It doesn't matter how well Nvidia and Microsoft and Amazon and Apple are all doing, if every other stock in the market is going down. At the end of the day, those big companies, even if they're doing fantastically, are going to get their comeuppance.

Because a handful of companies can't go up when everything else is going down. You can come up with explanations why that is the case. I don't really care about the explanations. I just know, throughout history, that's always led to bad things. So, I think market breadth is a really important thing. You want to see more stocks going up than going down. And so, the advance-decline line is a really strong way to see that happening. Right now, the advance-decline line is breaking out to new highs, which is exactly what we would want to see.

Corey McLaughlin:    Right, yeah, no, I'm glad you brought that up. I had a feeling you would say that, the advance-decline, and, yeah, it is breaking out to new all-time highs right now, which is, for people who think this recovery might just be a short-term thing, if you look at the number of stocks going up versus down, you would come to a different conclusion. That it's stronger than it might appear.

Brett Eversole:            Yeah, and if that's difficult for people to find, because some things, these are relatively esoteric [crosstalk] to find, another way you can look at it is just the ticker RSP. Which is the Equal Weight S&P 500 Index. This is, I would say – we're all swinging at the same kind of pitches. These are similar things. But instead of the S&P being market-cap-weighted, where you have 30% or 35% in these top seven stocks, now every company is equally weighted. And so, if you see the broad market breaking out and you see RSP breaking out, well, that means that most stocks are going up, as well.

So that's a much simpler way for people to track them, I would say a very similar thing. The equal weight has not broken out to a new high, post what we saw in February, I think, so, that's something definitely to keep an eye on. When you see, I would say, a big divergence between the broad market and between these breadth-type indicators, that can tell you that there's something – it's not necessarily, it doesn't guarantee bad news, but it's definitely a yellow flag, as an investor, that you need to think, "If this doesn't work itself out, this could lead to problems."

We saw that in 1999, where I think the advance-decline line peaked maybe a year before the overall market peaked in 2000. And it was absolutely collapsing, so, the underlying health of the market was terrible, I would say, during the most furious part of the dot-com boom. And you can still make money in the short term on the right things, but that tells you that there are problems brewing underneath the surface.

Corey McLaughlin:    Yeah, yeah, for sure. I think something similar happened at the end of 2021, right before interest rates went up. And we saw all those crazy tech stocks and whatnot peak at the beginning of 2021, but [crosstalk].

Brett Eversole:            Yeah, people forget that entirely, but I would say all the exciting stuff, the Pelotons of the world, they peaked in February of '21. And the overall market peaked in November or December, maybe even early January of '22, but that was definitely something that told you that this mania that is going on is kind of unravelling, even though the big stocks are – it was a warning sign, for sure.

Corey McLaughlin:    All right, that's a great one, yeah. The advance-decline line, to me, it's helpful, like you said, a yellow flag or just kind of for turning points, if you're looking for some great context, it'll do that. The first time I heard somebody explain it to me, like, "It's just measuring the number of stocks going up versus down," I was like, "This is it? This is what we're doing?" [Laughs] But it makes total sense.

Brett Eversole:            Yeah, to me it's just, there's a lot of times when it's so easy, I think at a moment like this as well, where it's hard to objectively say that we're on more firm footing today than we were six months ago. However, the market is at higher places than it was six months ago. And I think for a lot of people, they think about something like that and it feels very unsettling. And so, to me, when I see the market breaking out, I look at the advance-decline line or I look at those kind of indicators, and it's just [breathes out sharply], you can breathe a sigh of relief, like, "I want to think that this is problematic, but the market is telling me that it's not."

And so, that, to me, is what it is. You very rarely see the big divergences. What it can do is kind of walk you away from the edge, if you're thinking that horrible things are about to happen because you've gotten yourself worked up about x or y or z.

Corey McLaughlin:    Yeah, for sure, it's definitely, you're preaching to the choir there. I figured that out at some point, so that was good. All right, let's briefly switch gears to, we just had Alan on, Alan Gula, on a couple weeks ago, talking about our Portfolio Solutions products. And you are also a key member of that team, so, how do you translate what you do in True Wealth and all of those franchises into what you do with Portfolio Solutions?

Brett Eversole:            Yeah, well, it's funny, I started working on Portfolio Solutions maybe three years ago, and I was surprised how different it was versus what I do in True Wealth and True Wealth Systems. And that is what we do in Portfolio Solutions is really design – it's a complete portfolio design from the ground up. And when you take that approach, you have to think very differently. If you look at the True Wealth or True Wealth Systems portfolio at any time, what we tend to do is pile into a lot of the same ideas, because those are things that are working over a period of time.

And so, right now, you'll see a ton of foreign stock recommendations in True Wealth Systems, and a lot in True Wealth as well, and then a lot of metals and mining and things like that, because those are the things that are working, that's where we're seeing the biggest opportunity. If we try to do that in Portfolio Solutions, we would just end up with something where you had to do way more trading than you would want to, in the context of a portfolio. So, we really designed it from the ground up with the idea of what are all the big themes that we think are going to be important and that are going to drive the market.

How do we want to tilt what we're doing against the broad market, so that we can hopefully generate that alpha in a portfolio context. And then it's not finding – and a lot of times, if I'm excited about gold stocks, I might just recommend GDX and get the broad basket. But in Portfolio Solutions, we're always trying to think what are the one or two companies that are the absolute best in this industry at all times. To not just get the broad theme built in, but to get the best companies on that broad theme. So it really is a very different kind of way to approach it.

The other thing I would say is that I've pretty religiously recommended stop losses in True Wealth and True Wealth Systems, over the years. And I think in the context of that product, that makes a lot of sense. When you are building a portfolio, you can do things a lot differently when it comes to stops and risk management. The first time I heard this, I thought it was silly, and I think over time, it's become – I think it's brilliant. And if you're worried about how much stocks you own, then you don't need to come up with some complicated hedging strategy or derivatives or this and that. You can just own the stocks.

Because now you have less risk in the stocks that you own, you just own less of them. And we don't think about that in, like, True Wealth, in a newsletter format, but in a portfolio format, it's brilliant. If you think that this is a risky position, then you just buy 2% instead of buying 4%. And now you've dramatically reduced the risk of that position to your overall portfolio. So the way we do risk management and utilize stops and things like that is drastically different.

But the numbers have been really, really good, this year. I don't have them exactly offhand, but I think The Total Portfolio is up something like 15%, while the market's up 5%, something to that effect. And we had a much smaller drawdown during the April sell-off, so the solution works really well. And I'll give a ton of kudos to Alan, he's the architect, in many ways, whereas, I just kind of help step in, nibble around the edges to help out, but he definitely gets the majority of the credit in that. But it's been a lot of fun to do, and I think it's a different thing for readers, that for certain people is really, really useful.

One of the things I've heard over the years at conferences is, "I get all these products and I just don't know what to do with them all. I got all these great ideas and I don't know how to utilize them." And I definitely understand that difficulty for people. So that was what we tried to fix in Portfolio Solutions, and I'm glad to see that it's working well.

Corey McLaughlin:    Yeah, no, that's great. That's interesting to hear about, you're identifying more like the best possible plays on those themes or individual stocks. And that's what you kind of can do, and Alan talked about this – that's what you can do when you have somebody who's actually doing this for you. Because it's pretty hard to do it on your – it can be hard to do it on your own, unless you're doing it full time. And so, yeah, I just wanted to make sure we mention that you're also part of that group, so, cool.

All right, I do want to ask you about real estate, briefly, as well, before we go. I know last time you were here, you said, actually, most of your personal investments would be real estate-related. And you mentioned it before the market the last couple years, not so great. What's your take on real estate right now? I'm in the middle of selling our current place where I'm living and buying a new one, actually, finally.

Brett Eversole:            I'm sorry to hear that. [Laughs]

Corey McLaughlin:    Yeah, well, it's needed. But I don't want to give up my 3% interest rate, but it's happening, so. What's your take on the real estate market right now?

Brett Eversole:            Yeah, so, it's obviously two very different things, and that's the commercial market and then the kind of residential market. I'm sure there are people that'll disagree with this, but I think if the U.S. housing market was going to die, it would've died a long time ago. We're essentially three years into mortgage rates being twice what they were for the decade prior. We've had 6% to 7% rates for a solid three years now, and home prices haven't budged at all. And I think that tells you just how out of balance the inventory versus the number of buyers really were.

That's what led to the crazy boom in 2020 and 2021, and we've seen a handful of markets that really, really went crazy start to roll over a little bit. But I think on the whole, we just still have too many buyers for the number of homes that are for sale. The other thing is that, as time goes on, there are going to be more people like you who – I'm sure three years ago, there was no way you were getting over that 3% mortgage. Two years ago, there was pretty much no way. And a year ago, it would have to be the perfect house.

And now, you're giving it up, right? As time goes on, people just settle into the new normal, and as much as no one likes it, 6% to 7% mortgage rates are the new normal. And so, people are going to continue to live their lives based on that new normal, because they don't have an option. We can't just wait around forever. People will wait around for a while, but three years in, you can't wait around forever.

Corey McLaughlin:    Yes, my kids are not getting smaller [crosstalk].

Brett Eversole:            Exactly [laughs], yeah, that's exactly it. And so, I think if we were going to see a lot of destruction in the U.S. residential market, it probably would've already happened by now. We've actually started to see activity pick up. Mortgage applications hit an I think two-year high, last week, in the most recent data. So, we're still well below what I would call a normal market, but we are on the path to normalization around that much higher mortgage rate. That just kind of is what it is.

When it comes to the commercial market, I think that there has been, for better or worse, essentially, just activity has gone to zero. And that's true in residential, as well, but there could've been a lot of – if people were forced to sell throughout 2022 and 2023, we would've seen a lot of absolutely brutal price destruction. And nobody sold unless they absolutely had to, and I think we're starting to see prices tick back up, we're going to see activity tick back up. I think even in the office space, things are getting better.

I recommended BXP holdings, in True Wealth, recently, which is, it used to be called Boston Property, which is the largest U.S. office [real estate investment trust ("REIT")]. And at the end of the day, this company has seen their funds from operations grow every quarter, for the last three years, throughout this terrible situation. So, the office environment is much different than it was in 2019, but it's also much different than it was in 2022. People are going back to the office, big companies are forcing people back to the office.

This has kind of gone through fits and starts, I would say, over the last two or three years, but we're having another push right now with getting people back to the office. And so, I think office is obviously the most beaten-up portion of the real estate market, but banks have been willing to kick the can down the road, no one's selling unless they have to, and we're starting to see some rebound. So, I'm not sure we're going to be in a boom time, like, boom-boom time, any time in the next two or three years, unless we see rates come down a lot. I think that'll be the catalyst.

But again, that's a market where, if it was going to die like people anticipated in 2022, it would have already. It just hasn't gotten there, yet.

Corey McLaughlin:    All right, yeah, we're past that. We're past the worst-case scenario.

Brett Eversole:            Hopefully. [Laughs]

Corey McLaughlin:    Yeah, hopefully. Yeah, it'll be interesting to see what happens with interest rates. Right before we recorded this, I saw the report that Trump has said he wants to fire [Jerome Powell], the Fed chair, soon, now, and he's going to do it soon is what he told some people in Congress. So, we'll see [crosstalk].

Brett Eversole:            His term only goes till February or March, is that right?

Corey McLaughlin:    May of next year, so, one way or another, it's happening. It's just a matter of timing, at this point. But anyway, it'll be interesting to see what happens with rates, I will be curious, personally curious, myself, if it happens sooner than later.

Brett Eversole:            Get that refi in.

Corey McLaughlin:    Yeah, yeah, have to get that. All right, well, this has been great. I think we can see – I got great insight, as usual, from you, into all different kinds of things. So, we've reached our final question which Dan always asks, but I'm going to do it this time, and it feels strange me asking it, but here we go. So, same for every guest, no matter the topic, even if it's a nonfinancial topic. And you can repeat it if it came up before. But if you could leave our listeners with a single thought, what would it be?

Brett Eversole:            Oh, a single thought – I feel like every time Dan has asked me this question, I half remember when he asked me last time, and then I forget and then I have this panic moment, like, "What is my single thought?" Maybe I've given this kind of answer in the past, when having this discussion with Dan. But I would say when it comes to investing, and I think this is important as we have moved through this tariff moment, in my mind moved through it, it's just always remember that the worst-case scenario almost never plays out.

And just kind of just worry less. Think about things less. I would say one of the things I picked up from Steve early on in my career is that, if there's 1,000 headlines going by every day, one or two of them maybe matter. Really, your job as an investor is to find the 5% of things that actually matter, and focus on those and ignore the rest. And then, once you do that, you can just worry about things a lot less. So, yeah, I would say, try to get your stress level down when it comes to the world of investing.

The world hasn't ended yet. It's probably not going to any time soon. Things are going to be fine. Stress less.

Corey McLaughlin:    I like it, yes, if the world's ending, then we're all – you don't have to worry about [crosstalk].

Brett Eversole:            Yeah, who cares about your portfolio. [Laughs]

Corey McLaughlin:    All right, cool, well, thanks for being here. We'll have you again soon, and maybe Dan will be back from vacation.

Brett Eversole:            Sounds great. Thanks, Corey, I appreciate the time. It's fun.

Corey McLaughlin:    All right, so that was Brett Eversole, Stansberry Research senior analyst, True Wealth, Steve Sjuggerud disciple, part of our Portfolio Solutions team. I think you got a great look at his approach to the market and how he uses the numbers to really apply his analysis to any real sector. We talked about everything there, stocks, AI, real estate, gold, silver, he's bullish on the gold miners right now. And, yeah, so, you could also follow him in his free newsletter, Daily Wealth, which I recommend you read, if you haven't already. It goes out every day, and you can hear from Brett and the whole team and his colleagues.

So, that was a great chat with Brett, and we'll be back next week.

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