On this week's Stansberry Investor Hour, Dan welcomes value investor Tobias Carlisle back to the show. Tobias is the founder and portfolio manager of Acquirers Funds, a deep-value investment firm. He's also an author and host of the Acquirers Podcast.

Tobias kicks things off by discussing the "happy hunting ground" in small-cap stocks, the market narrowing in the S&P 500 Index, and the massive amounts of capital flowing into AI. He also compares the AI mania today with the dot-com boom of the late '90s, questions how AI is making money, and notes that the bottom 490 stocks in the S&P 500 have been in a "little recession" since 2022. He says this gives value investors an opportunity right now to get great names for cheap before the inevitable rebound. After that, Tobias comments on passive investing, what could be in store for the top 10 large caps, and why fears of AI destroying the jobs market are overblown...

Since the dawn of the Industrial Revolution, there have been people smashing the weaving machine because that was putting people out of business back then... [But] all of these thousands... of different types of jobs created by every one of these innovations, that's what people are ignoring now. There are going to be lots of different jobs that we can't possibly conceive of, just as there are jobs in the last few years we couldn't have conceived of 10 years ago.

Next, Tobias talks about his company's two funds: the Acquirers Fund (ZIG) and Acquirers Small and Micro Deep Value Fund (DEEP). He explains what he looks for when picking stocks and how he determines valuations. He also name-drops many stocks and industries that he thinks have fantastic potential over the next decade. Tobias says...

All of the indicators that I see suggest we're in that late 1990s sort of bubble-ish market for large growth. And the things that are left behind are small value. And I think that that's where the opportunity lies, probably for a decade or so. And so I'm incredibly excited about the opportunities that we're seeing right now. I think it's a good time to be a small value investor.

Finally, Tobias discusses the significance of hedge-fund shorts of the small-cap Russell 2000 Index peaking recently, plus the extreme concentration of the top 10 stocks. He notes that Nvidia now accounts for 8% of the S&P 500's market cap – the highest in history. Tobias says that valuations will eventually come back down to Earth and that not all of the Mag Seven will be top performers in the future. Citing Tesla as the weakest in the group, he points out that Chinese electric vehicles beat Tesla cars in terms of price, design, and charging times. Tobias then closes things out with a conversation about an "echo boom" of 2021, cryptocurrencies being back in favor, and the unprecedented outperformance of large caps...

You want to be a handicapper rather than picking the best horse... Over the very long run... small [cap] relative to large [cap] has outperformed by 20 times going back to 1926. And that's an extraordinary outperformance. Since 2011, it has underperformed by about 75%. Where we've seen underperformance [in small caps] historically, it has always been around these notorious bubble peaks.

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

(Additional past episodes are located here.)

This Week's Guest

Tobias Carlisle is the founder of the Acquirer's Multiple and Acquirers Funds. He's also the author of several books, including his latest one, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market.

Tobias' previous experience includes an analyst at an activist hedge fund, general counsel of a company listed on the Australian Stock Exchange, and a corporate advisory lawyer across various industries in multiple countries. He is a graduate of the University of Queensland in Australia with degrees in law and business (management).

Dan Ferris:                 Hello, and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report. Today it's just a little old me. Corey's off. So, I'm going to talk to my old friend Tobias Carlisle. Tobias runs a couple of funds that trade publicly that we'll talk about. He's a very well-informed value guy who's going to have a lot to say on all kinds of things. So, let's do it right now. Let's talk with my old friend Toby Carlisle. Let's do it right now!

                                    Mr. Tobias Carlisle is in the house.

Tobias Carlisle:          What's up, Dan?

Dan Ferris:                 Yeah.

Tobias Carlisle:          Thank you. Good to see you.

Dan Ferris:                 Good to see you, too. As we were talking just before we hit the record button, it's been two years. Way too long. We need to have you on at least once a year and I think probably twice.

Tobias Carlisle:          That's very kind.

Dan Ferris:                 We're going to fix that. We're going to fix that.

Tobias Carlisle:          It's been a little bit sad because I'm a small-value guy and small value's been dying on the vine. So, I've been trying to keep my head down.

Dan Ferris:                 And yet at the same time – I hear you. On returns, I hear you. But on finding stuff that you can't find above whatever market cap you want to delineate, there's plenty to find. Plenty to find. Yeah.

Tobias Carlisle:          I couldn't agree more. It's a very happy hunting ground at the moment.

Dan Ferris:                 Yeah, I mean – yeah?

Tobias Carlisle:          I was going to say, I'm – I characterize myself as small- and mid-value but my mid-value is now small too, so I'm small cap across the board. My small is micro and my mid is small.

Dan Ferris:                 So, without giving away too much – we want to we want to hide some secret sauce – but as we record – the day we're recording this small caps are actually – a couple hours ago when I looked, they were doing pretty well today. It was like somebody – some [commodity trading advisor ("CTA")] somewhere was buying the Russell 2000 or something.

Tobias Carlisle:          Fat fingered it.

Dan Ferris:                 Yeah. For two days or something. It's just like "Whoa." On the chart it's like blip, blip. Two days. So, who knows? Your time is coming. I'm convinced of that.

Tobias Carlisle:          Let's hope. Yeah. I track that series pretty closely, as you can imagine, like on a daily basis. So, I can tell you that two days ago was the all-time low from the peak in 2011. It's a very long way down.

Dan Ferris:                 Wow. "Peak in 2011," he said, folks. Did you catch that? It's 2025.

Tobias Carlisle:          Yeah, this is not an old recording. It's a 14- or 15-year underperformance of small against large.

Dan Ferris:                 Oof. Yeah. Wow. OK. Well – and large lately, the largest, the mega has actually – rather than reverting to the mean it's done the opposite in the past several – if you look at the chart, it's pulling away from the rest of the pack, the top 10, I think it was from the S&P 500. It is pulling away. I mean –

Tobias Carlisle:          The market's really narrowed down. If you look at – I look at – you can take the – of the 500, 490 of them are basically flat since 2022, and it's 10 that are the beneficiaries of the AI capex spend.

Dan Ferris:                 And are accountable – the whole return since then is accountable to them.

Tobias Carlisle:          That's right.

Dan Ferris:                 And it's not a – it's not nothing. The return is not nothing.

Tobias Carlisle:          Right. It's extraordinary sums that are being invested into AI capex. I talked about this a little bit. It's like $500 billion, which is – that used to be quite a lot of money, but evidently not so much anymore. And it's not like – I characterize it as being something like the late 1990s when we were building cable, building the fiber-optic cable for the Internet.

Dan Ferris:                 I'm glad you brought that up. Yeah.

Tobias Carlisle:          Because I – but the difference is that fiber-optic cable has got a useful life of, like, 25 years whereas the [graphics processing units ("GPUs")] have got a useful life of three to four years. So, this is a – we're just going to spend like this all the time. I don't know where it comes from.

Dan Ferris:                 Yeah, The infrastructure around them may be a longer useful life. But yeah. The thing is it is different – there are similarities and differences. We all see the massive capex. That's obvious. And as you said, the useful life is different. Also, though,  I wonder how – in the late '90s that thing was always destined to crash, and a lot of us talked about it a year or two or more before then because they were borrowing money and not making a dime. They were levered up to the sky and not making a penny. These guys are gushing cash flow. They make more free cash flow than any 10 companies ever have in the history of the top 10 of the S&P 500. I'm not just talking about the hyperscalers but – and they're the ones spending the hundreds of billions.

                                    But how – they can keep this up. They're spending half of it. They're spending half of the cash flow on this. It seems like they could keep that up for a while. It's...

Tobias Carlisle:          I think that the only limit on it, the only fetter on it is that you have to earn a reasonable return on that investment.

Dan Ferris:                 At some point. Right?

Tobias Carlisle:          And it's not clear how they're monetizing yet. ChatGPT, you've got your $20-a-month subscription to one of the AIs.

Dan Ferris:                 How or if they're monetized. I wouldn't be surprised to learn that nobody's really making any money off of this yet.

Tobias Carlisle:          Right. Well, I think that's the case.

Dan Ferris:                 Yeah. So – but you understand what I'm saying, though. I – believe me, you and I are – we're birds of a feather and I'm a value guy and I'm skeptical about all this. But the – maybe I'm just – I'm succumbing, as we all do in a bull market. We all succumb in the end. But I look at it and I look at it and I think – I just feel like they can keep this up longer than WorldCom and Global Crossing could ever have kept it up.

Tobias Carlisle:          That's certainly true, and I don't think these are scams. I don't think these are scams at all. These are real businesses and they're making lots of money. They're doing very well.

Dan Ferris:                 That's right. There isn't going to be any WorldCom, [Dennis Kozlowski], whatever he did.

Tobias Carlisle:          There's some talk around the edges that maybe Nvidia is financing some of the – some of its customers. There's –  I saw a little rumor today that China makes up 40% of revenues because of the – they buy the old chips through some of those countries that – like, Vietnam buys a lot of chips and they're not – it's probably not Vietnam, it's probably a front for China, and at some point that gets cut off. I don't know what – how true all that stuff is. I just sort of raise it as something worth considering if you're long.

                                    But the thing that really stands out to me when I look at the market is that the large caps are trading now a huge premium to mid and small. And that's historically unusual from 2000 to 2020. Small and mid traded at big forward [price-to-earnings (P/E)] premium to large and you have to go back to the late 1990s to see this sort of large P/E premium in large – sorry – yeah, in large caps. It's really the pandemic flipped it. In the pandemic, large took off and small and mid have struggled since. And I think that if – the reason is – it's not hard to figure out why. When you look at the earnings, the earnings for large are going vertical right now, whereas the earnings for small and mid have been – mid is flat since '22. Smalls are down.

                                    So, I think that excluding those top 10 companies, the other 490 and then the 400 mid and the 600 smalls all in the S&P universe have been in a little recession since '22, I think. And that might be working off some of the COVID stimulus, all that demand got pulled forward, and we're sort of right-sizing and figuring out what's happening. And as a result, all of these companies are pretty reasonably valued. I like buying – there's a contrarian aspect to being value. You've got to buy these things when they're unloved. And they get unloved because their earnings look terrible and the multiples can press. But if you're a full-cycle investor and you can see these things – mean reversion still exists. These things probably will recover again and then the P/Es are too cheap. And I think that will do quite well. I don't know what the bottom is.

Dan Ferris:                 Gosh, that's my favorite old song you just sang. I love it. I sing it all the time.

Tobias Carlisle:          I've been picking the bottom for 14 years.

Dan Ferris:                 Yeah, some of us have. But yeah. Oh, well.

Tobias Carlisle:          I feel pretty positive. I think that it's – this is always the problem for value guys, that you can see the opportunity but you don't have any timing. There's no catalyst. And as soon as the catalyst becomes visible, the opportunity's gone.

Dan Ferris:                 It's gone, right.

Tobias Carlisle:          You've got to buy before the catalyst. And so, I like smalls and mids. I think that they're trough earnings, trough cycle earnings. So, I think you'll probably see some improvement in their earnings over the next few years. And then the P/Es will follow suit. I think it's a tale as old as time. I'm not concerned about it at all. I just think it's a matter of two, three, five years. I'm sure we'll be back to normal.

Dan Ferris:                 All right, elephant in the room is – I wonder if you know what I'm going to say.

Tobias Carlisle:          I don't.

Dan Ferris:                 Passive. I think I saw it's like 60% now of – I think of flows maybe. So, people basically mindlessly buying the S&P 500, which means at this point they're putting more than ever into the top 10, more than 40% at this point. And that – the source on that I think is – I think it might be Charlie Bilello, who's pretty good. Right? Wow. So, every time you contribute to your 401(k), 40% of your money goes into those 10 companies. Those 10 that we think are going to mean revert to poor returns, that we've been thinking that for years now.

Tobias Carlisle:          But I mean, just – there's two things going on. One is that's Mike Green's thesis that passive sort of sucks all of the oxygen out of the room for small and micro. I agree that that phenomenon is occurring right now. I don't agree with his conclusion that it means you get a crack-up boom and a crash. That's what every market cycle looks like. So – but of course, people invest in the thing that has been working, which has been the S&P 500.

Dan Ferris:                 And mega caps.

Tobias Carlisle:          And really the S&P 100. Yeah, mega caps, Mag Seven, whatever you want to call it. That makes everything else in the world, international value, small, everything else looks bad compared to the S&P 500, which you can get for basis points now. So, it's a no-brainer that there's a whole lot of money flowing in that direction. But that's always the case. People always pile into the things that have been working. And as soon as it breaks down, everybody hits the panic button and goes the other way. I don't think that those Mag 10 – I mean, they may have a little stumble along the way. I don't think that – I think those businesses are pretty solid and they'll.

                                    But again, in the late 1990s you would have had Microsoft, GE – well, GE's got its own problems. It had leverage and some earnings manipulation going on.

Dan Ferris:                 ExxonMobil.

Tobias Carlisle:          But they were – all of these big companies were trading, and they were trading at very high premiums, very high P/E's. And from 2000 to 2015 they continued to be excellent businesses. Microsoft continued to be an excellent business. Walmart continued to be an excellent business. But because the stock prices got too far ahead of the businesses, the stock prices were flat for 15 years. In 2015 I was buying Walmart [long-term equity anticipation securities ("LEAPS") and worried that the LEAPS weren't going to – and a LEAPS is a two-year contract to buy these things. And I was buying them basically at the market. And there was no volatility because they'd done nothing for so long. So, the calls were very cheap.

                                    And so, I just – I'm just using that as an illustration of how unloved they were just 10 years ago, the large caps. And so, I think that that could easily happen again, where we have a decade or more of large caps still doing very well as businesses, just the stock prices don't perform as well because they get too far ahead of themselves. And in that period of time people will look around for better opportunities. And it's going to be small and mid.

Dan Ferris:                 That's the next song on my favorite album.

Tobias Carlisle:          It's inevitable. It's happened countless times before. And it'll happen again.

Dan Ferris:                 Yes, it has. And every time at this moment, people talk about it like everything's different now and it'll never happen again.

Tobias Carlisle:          I posted on my Twitter – I post these charts on my Twitter just saying, "Look how many times this happened before." And there's inevitably someone saying – I think people are a little bit self-aware. They're like, "I hate saying that it's different this time, but it is different this time." But the railways were transformative. The Internet was transformative. All of these things. The telegraph was transformative. The steam engine was transformative. All of these things are transformative. And they had a similar sort of impact. A lot of capital flowed towards those opportunities. They traded at very high P/Es. We overestimated how quickly really it would change. The internet's the most recent example. The dot-com 1.0, there was a lot of hype and a lot of interest but it didn't really deliver on it. It took 20 years to deliver on the promise. And probably the same thing happens with AI. We've built it out. We've got the LOMs as – probably as close in current technology as we can to as smart as they're going to get. From here on in, it's going to be the business of integrating it into the rest of business and the economy, which is a much harder, longer process, 15 or 20 years. I’m optimistic but takes a while.

Dan Ferris:                 Yeah, it does. And another aspect of that that people like to talk about every time is everybody's going to be put out of work. "No, but this time we really mean it." Pin-making machines, weaving machinery.

Tobias Carlisle:          That's where I was going to go.

Dan Ferris:                 Yeah, I mean, pin-making machines, weaving machines, all of it, All of it. And –

Tobias Carlisle:          Since the dawn of the Industrial Revolution there have been people smashing the weaving machines because that was putting people out of business back then, taking away jobs back then. But as Marc Andreessen, who's the Netscape navigator, now VC, a26 –

Dan Ferris:                 A16z.

Tobias Carlisle:          A16z. Thank you. And he says all of these thousands, hundreds and thousands of different types of jobs are created by every one of these innovations. That's what people are ignoring. Now, there are going to be lots of different jobs that we can't possibly conceive of, just as there are jobs in the last few years that we couldn't have conceived of 10 years ago.

Dan Ferris:                 And look at the internet. Look at all of the people who seem to possess very little in the way of a working brain cell, and they are online selling you perfume and whatever else. I mean, they're making an awesome living, some of them. And there are many more in existence than that. It's nothing like what is feared. The fear is always the first thing out of the gate. First out of the gate, "Oh, it's going to kill jobs." And it doesn't happen that way. Every time we take a leap forward, it benefits all the people it was purported to hurt the most.

                                    The things that – and it's funny because the things that hurt those people are the things everybody sure is going to benefit, like the welfare state. No problem. We're taking care of people on the lower end. Well, we're also supplanting heads of household with the state and giving a huge incentive to do nothing and be unproductive and etc., etc. I don't want to get into all that, but it's always the opposite. It's always the big expectations, big promises. "We know how to engineer society. This is going to work. We know it." And it doesn't work. And then on the other end it's "This thing's new. We're not sure what we can do with it." "Ah, we're terrified. It's going to ruin our lives."

Tobias Carlisle:          I couldn't agree more that – there's a podcast engineer on this call. There wouldn't have been a podcast engineer 10 years ago. This is its own little business: podcasts. And previously –

Dan Ferris:                 I hope so.

Tobias Carlisle:          – that wouldn't have existed. I just think that there's – just because you can't imagine how the technology is going to be used to help somebody else doesn't mean that it's not going to help somebody else. Clearly it does. I'm incredibly excited about the prospects for AI in my own business, and my kids will just be – it'll be native to them. They'll grow up with it using it all the time. To them, it's just another tool.

Dan Ferris:                 It is. And the unknown – people don't appreciate the fact that you don't know the future and you don't know what's going to happen, and that that unknowableness is necessary, because if we knew the future and we could design a society with bureaucracy from the top down, we wouldn't need freedom. We need freedom. We need political freedom as much as possible to maximize the benefits to everyone because all the – because things happen by people accidentally sort of bumping into each other and ideas that come from out of nowhere and we just – we don't know how good it's going to be is the truth. We think we don't know how bad it's going to be – we think we know how bad it's going to be, actually, but the truth is we just don't know how good it's going to be. This is a – the more I read it, the people like – Friedrich Hayek is the one, really – the more I appreciate this, that we can't design society. We can't engineer the future. We have to allow it to come to us.

Tobias Carlisle:          One of the reasons that I love America and I live in America is that America really – America is imperfect in many ways. It could be more free, but compared to even places that are liberal Western democracies in Europe, the UK, like that, what goes on there terrifies me, all of that sort of censorship of people just expressing pretty anodyne, benign beliefs getting a visit from the police. That's – online. That sort of stuff is crazy.

Dan Ferris:                 I hate to say it, but not to mention your home country.

Tobias Carlisle:          And Australia, certainly. Yeah.

Dan Ferris:                 A little sketchy there, too.

Tobias Carlisle:          And Australia, too. I couldn't agree more. It's a little bit sad. It is sad.

Dan Ferris:                 Which is not to say – I definitely – I agree with your earlier statement. America is not perfect. Far from it. And we're under assault by our government in a similar way. But it seems like they're a step ahead of us in those other places.

Tobias Carlisle:          America has a Bill of Rights, which makes it – at least you have one little thing to fight back with. You can get yourself to the Supreme Court and you can argue that it's – and a Constitution, but the Bill of Rights, I think is the most important part, gives you the last little bit of protection against an overreaching federal government.

Dan Ferris:                 Yeah, we have something else too, 120 guns –

Tobias Carlisle:          The right to bear arms.

Dan Ferris:                 – for every 100 population and 15,000 hunting licenses.

Tobias Carlisle:          Yeah, God bless America.

Dan Ferris:                 Yee haw.

Tobias Carlisle:          Yeah, I grew up in the country. I grew up in the country, so I grew up firing guns, so they don't bother me too much. But I get that there are a lot of people who are a little bit squeamish about them.

Dan Ferris:                 Sure. Sure. Yeah. I mean, they're deadly, so it's nothing to nothing to be careless with. Maybe we should talk about investing, though.

Tobias Carlisle:          Let's do that.

Dan Ferris:                 So, just – let's – since it's been two years, let's remind folks about exactly what you do and how you do it. Let's do that for a little bit.

Tobias Carlisle:          I run two funds. They're both ETFs. One is a mid-cap ETF, which is – the ticker is ZIG. It's the Acquirers ETF. And then I run DEEP, which is a small and micro. It's the smallest of the small. You really – they're really small, uninvestable companies, which may or might not be appropriate for an ETF, but we'll find out if they ever get some flow. So, ZIG and DEEP are the two funds that I run. And I look for – the "acquirer" in the name is based on a book that I wrote called The Acquirer's Multiple. And the thesis is basically that you can find a financial value for any company, which is basically what it's worth in a negotiated transaction.

                                    And I say, because I was a corporate lawyer and I worked in private equity and transactions from 2000 to 2008, that the private equity valuations are based on operating income on one hand, which is a more full version of the earnings. It includes interest and tax and other things that are more discretionary that depend on the capital structure, and on the other side there's enterprise value, which is a little bit more – which is the price, but that's its market capitalization plus debt minus cash, plus anything else. It's like a minority interest preferred stock, anything that an acquirer would have to take on. So, I look at that as a more full – it's like a more – it's a souped-up P/E, really, and it just includes all of the things that an acquirer would consider. And so, that really tells you how expensive something is. And then you want to see what are you getting for how expensive something is. And so, you look at the return on assets, just its ability to generate operating income on assets, controlling for the leverage.

                                    So, I'm scanning the entire universe of stocks, ranking them all on this basis and then finding the ones that are doing the things that – because I cannot get control of these things and do anything about it like an activist or a private equity firm could, then I want a management team that's behaving as I would behave if I was in control of one of these things, which is to say that if they're undervalued and they're generating lots of free cash flow, they should be buying back stock. And so, my portfolio tends to be characterized by these businesses that generate lots of operating income, created a reasonably cheap valuation against the total enterprise value, which includes all the debt and all these other things, not just looking at the market capitalization. And then I want a management team that's doing sensible things, and it's either – I like acquisitions, but acquisitions done at a sensible price, and I want buybacks done at a cheap price.

                                    So, my portfolio is filled with these companies where – one example is – I don't know if you know Bed Bath – I'm not saying Bed Bath & Beyond. I'm having a little, having a little brain explosion at the moment. The Bath & Body Works. Excuse me.

Dan Ferris:                 Bath & Body Works. Yep. We know it. We – yeah. We took a run at it.

Tobias Carlisle:          So, I like – it's one of the stocks that I hold. I like Bath and Body Works because it spun out of L Brands not that long ago. They generate pretty good returns on assets. If you walk into a mall – and malls around here are pretty dead. I was doing a little – I just wanted to see – this is not the way I invest but I wanted to just go and see. So, I was there with my son. We walked around and I found a Bath and Body Works. And I walked in and there's a few things that really stand out. It's not a huge store. It's got a fairly small footprint but it was crammed with people. There were more people in the Bath and Body Works and there were in the rest of the entire mall. And it's basically they sell fragrance, which sounds like – it's not – it's obviously not the kind of thing that my son and I would ordinarily go and have a look at. We walked past it and it was full of people. And they're doing a $500 million buyback right now. It's a $5 billion market cap, $750 million in free cash flow, doing a $500 million buyback.

                                    These are the kind of things that – to me, that's the sort of situation that I don't – I can't see the future for retail and I can't see the future for this kind of company, but all of those things together tell me that management thinks it's cheap. I think it's cheap. They're buying back stock. And this is what creates floors for these sort of businesses. Your downside is reasonably limited because management's doing the right thing.

                                    I have a portfolio filled with these. We've got some energy home builders that I think have been smashed to smithereens. Now, I know that homes are – house building is a funny business.

Dan Ferris:                 Yeah, it is.

Tobias Carlisle:          And one of the reasons that you should be concerned is that clearly homes are unaffordable from – the median home price is unaffordable to 80% of Americans. And that's a problem.

Dan Ferris:                 It is.

Tobias Carlisle:          And the solution is going to be a combination of lower interest rates and house prices coming down. That's not a disaster for the homebuilders because they make good money on transaction volume. So, they want lots of houses being sold rather than lots of houses being sold at these premium prices. So, when – I think that – and all of these – all of the home building stocks are off 40% to 50% from their peaks.

Dan Ferris:                 And if the prices come down, they'll still make plenty of margin from here. Right?

Tobias Carlisle:          They'll make – that's what I think too. They'll make lots of margin. We had a similar scenario in 2001 where the lumber got very expensive. Home builders sort of stopped doing business for a little bit there. And their stock prices were similarly beaten up. And then they had a very good run. And I think a similar thing happens around here. And I think it's already started, honestly. It's been the last month or so home builders have sort of come back to life. For the rest of the U.S. and for younger people in the U.S. I really do hope that home prices come down. But it certainly seems to me that we're getting closer to that kind of scenario. There's a big buildup in inventory.

Dan Ferris:                 Yep. It is starting to build up. That's right. People want to sell –

Tobias Carlisle:          Homes are staying on the market for longer. Yeah.

Dan Ferris:                 Yeah. They don't want to – and they'll do it. If they list for $900,000 and they're not getting it, they'll sell it for $800,000 or $700,000 or whatever they need to get. As – I don't mean to be rude while you're talking, but you can see I've been doing something here. What I'm doing is I'm running the Bloomberg screen of EV over EBIT for – I didn't specify market cap. I specified U.S. traded, U.S. domiciled. OK? The universe has 144 names and I'm happy to see among the top 10 or so Devon Energy, which I recommended.

Tobias Carlisle:          Oh, yeah. That's one I hold, too.

Dan Ferris:                 Yeah, really great, well-run energy company.

Tobias Carlisle:          Actually, I think that's one of my – it's one of my – I think that's one of the best – that's one of my favorite positions. It's probably my favorite position out of all of the 130 that I hold.

Dan Ferris:                 No kidding? What a coincidence.

Tobias Carlisle:          Yeah.

Dan Ferris:                 It's – I have it in a portfolio of nine names and you've got to spend a whole bunch more to get my newsletter at what they call the premier level so that you can get these extra nine names. And that's one of them. It's brilliant. But –

Tobias Carlisle:          Yeah, I think it's a superbly well-run energy company. And the oil price is currently trading as cheaply as it has been in the last 25 years. The only two times it's been cheaper than where it is now is 2000 and 2020. And those are famous dates. So, I think that – I think energy – I don't know when energy turns around. It's the same old problem that value investors always have. I don't know where the bottom is and I don't know when it turns around. But the values here are pretty good. And so, you might lose some on a mark-to-market basis between now and the resolution of this problem, but I think that even the positions that you're putting on now will work out over a three-to-five-year horizon.

Dan Ferris:                 Love it. Love – keep singing it, baby. Love it. There's actually quite – just apropos of nothing, just glancing at the screen here, there are – the top name – let's see. If I go – OK, the – sorry. The cheapest name is something called – it's actually something called Circle Internet Group because that's a new company, it just IPO'd, because it's negative 46 times. I didn't specify a positive EV over EBIT. I think they probably have a bunch of cash. And something called Eventbrite. But then you get into something called – well, and these are all tiny market caps too. So, if you go descending on the market cap, you get General Motors, Ford, Synchrony Financial, Ally Financial, Permian, Borg Warner, and lots of energy. Expand, Devon, Cottera, Permian, APA. The screen is trying to tell us something here.

Tobias Carlisle:          Yeah, I've got a lot of energy. I have some – I'm up to my risk limits on the energy. I won't put more than 20% of the fund into any industry just because you could be – it could be for-profit education. I don't think energy is for-profit education, but that was when the Obama administration decided that people were spending too much on useless college degrees. They've wiped out all the for-profit education. I think they missed that the main villains in that story, but they've got – they got a lot of – they got the for-profit guys at least. I think an interesting stat is Buffett is lagging the S&P 500 by the widest margin since – and the only ones that have been wider are 2020, 2009, and 2000, which again, they're all famous dates. Obviously there's – him stepping down has created some selling pressure on that stock. But I think that all of the indicators that I see suggest we're in that late 1990s sort of bubble-ish market for large growth. And the things that are left behind are small value and I think that that's where the opportunity lies, probably for a decade or so. And so, I'm incredibly excited about the opportunities that we're seeing right now. I think it's a good time to be a small value investor.

Dan Ferris:                 Yeah, man. Yeah. I agree. I own – of the individual stocks that I own, there's just a small portfolio that I actually pay a lot of attention to and actively manage because I just want it that way. And aside from LEAPS puts on index ETFs as the smallest part obviously – I hope that's obvious – it's really natural resources and Treasury bills is really what's in there. Those are –

Tobias Carlisle:          Natural resources are being left behind.

Dan Ferris:                 Yep.

Tobias Carlisle:          As they were in the late 1990s as well.

Dan Ferris:                 Yeah, I mean talk about – yeah, that's another chart that's got some suspicious dates on it. Like, wow, OK, every time people get really excited about some new technology, they'd stop paying attention to the stuff that is – that they are surrounded with unless they're out in the woods. And even then, if they dig far enough they'll – it's like you can't get away from the need for everything that is mined and extracted from the earth and then processed, manufactured, et cetera. You can't escape it. It's – there's no way. There's a book I like to cite called – I think it's called How the World Really Works by Vaclav Smil.

Tobias Carlisle:          Yeah. Yeah. Classic.

Dan Ferris:                 Yeah, man. And he cites cement, plastics, steel, and ammonia as the four ingredients of every modern city. And it's true. You can't get away from those things. And the plastics, of course, come from petroleum. So, you can't get away from the extractive nature of things. And yet, here we are again.

Tobias Carlisle:          Well, under Biden, remember, there was – the stimulus under Biden was the Inflation Reduction Act, which is really a green infrastructure-building stimulus. And the concern – at that point in time, coal was trading very cheaply, which is just crazy, because if you think about how you go and build a whole lot of green infrastructure is you need a whole lot of steel. And the way you make steel is you get a whole lot of coal and you burn it really, really hot. And so, all the coal mines at that time were trading very, very cheaply. I think they're still reasonably cheap, but they're not as screamingly cheap as they were there.

Dan Ferris:                 Right. They're 4X – they're 3X, 4X, 5X and still cheap, like 10 times or something. Cheap. And gushing cash. Just gushing it. It's just – it's like the gold miners. They're cheaper at $3,300 per ounce than they were, whatever, 50% or 100% ago at whatever it was, $2,000, just call it, an ounce.

Tobias Carlisle:          What do you – the gold miners – I haven't – I don't hold any gold miners and I haven't seen them in my screens yet. So, I'm sort of curious to know why do you think the gold equities haven't kept up with the gold price?

Dan Ferris:                 My first answer to all such questions is I don't know.

Tobias Carlisle:          Yeah?

Dan Ferris:                 No, I'm serious. And I think it's important to do that because just this morning I was on Twitter and somebody put up that chart of the Russell 2000 I mentioned with the small cap screaming for the past two days. And the next post was "Why do you think that's happening?" And I immediately said, "Who knows?" If you're at all honest, you don't know. And you don't.

Tobias Carlisle:          Yeah, that's right.

Dan Ferris:                 Especially a two-day move. As far as not keeping up with gold, smarter people than me have thoughts about this, but I don't know that it's all that important to know it. I just know that opportunities are made on such divergences. And that I don't think we're – I think we're going to keep mining gold and I think we're going to keep using it and I think I think at $3,300 an ounce it's very obvious that people are going to keep holding it as a very, very important store of value.

Tobias Carlisle:          I think it's amazing that gold has now outperformed the S&P 500, I think, since 2000 or something.

Dan Ferris:                 Yeah, this century. That's right. It's amazing. It's incredible.

Tobias Carlisle:          It's funny. I remember that Buffett letter that he wrote, I forget the date, but like the '70s, something like that where he said, "For all of the blood, sweat, and tears that I've poured into this portfolio and the people working in this, the yellow rock has beaten me" for whatever it is, since inception or something like that.

Dan Ferris:                 And then sometime later he talked about how silly it was to pull this stuff out of the ground and pile it up over here, and pull it out of the ground over here, pile it up over here. But there's obviously a lot more to it than that. It's really – he should just admit that he missed it and that he does not understand gold. I don't expect him to know everything. I don't expect him to get everything right. But I expect him to know when he's really wrong about something.

Tobias Carlisle:          Do you think it was something like his old man was a libertarian, hard money guy?

Dan Ferris:                 Oh, sure.

Tobias Carlisle:          And do you think that that's the – maybe there's a little – something psychological going on there?

Dan Ferris:                 Could be. Could be. I don't – Buffett's – he's inscrutable. Who knows?

Tobias Carlisle:          Truly.

Dan Ferris:                 But –

Tobias Carlisle:          I've got another good data point for you.

Dan Ferris:                 All right.

Tobias Carlisle:          Russell 2000 hedge-fund shorts were as high a few days ago over the weekend when I checked it as they were in 2021 at the peak.

Dan Ferris:                 Oh.

Tobias Carlisle:          So, hedge funds are as short the Russell 2000 –

Dan Ferris:                 As November '21.

Tobias Carlisle:          – as they were in 2021 at the peak. So, I don't really like timing tools so much. I don't use any timing tools. I just sort of collect these data points to share on podcasts. It's not part of my investment process. But I think it's an interesting data point because I think that you want to be fighting hedge fund concentration. The hedge funds are all sort of performance chasers and so they will all pile into a trade right before it stops working.

Dan Ferris:                 Yeah, they're – that's right.

Tobias Carlisle:          To me, that says hedge fund long is the place to be.

Dan Ferris:                 Right. That's actually a good data point I like those data points. And I agree, it may not necessarily be about timing but it's certainly about sentiment and it's certainly a decent way to look for the crowded trade. There's no – looking for the crowded trade versus the uncrowded, those are good things to look for. I agree. It's not about timing. It's about knowing the state of things. And that's a great way to do it. The Commitment of Traders, looking at that whole thing is kind of interesting. It can be very interesting,  just because you want to know what everybody wants to buy right now and what everybody seems to want to sell right now. So –

Tobias Carlisle:          I've got another good data point for you, Dan. I picked it up from one of my favorite Twitter accounts, dferris1961.

Dan Ferris:                 Uh-oh.

Tobias Carlisle:          Number of listed companies per million people in the U.S. troughed in 1979, which was the "Death of Equities" cover and peaked in 1996, which was irrational exuberance. And we're back now to where we were in 1979, getting close.

Dan Ferris:                 Yep. So, by that, it would suggest that it's time to get – it would suggest that it's time to get bullish maybe, but it also – there's also the issue of concentration that we discussed. I don't think people – I don't know the statistic, but I know that it wasn't 40% of – the top 10 of the S&P 500 weren't 40% in 1979. That much I know. And I would be surprised if it was 20 or much more than that.

Tobias Carlisle:          I think Nvidia set a record at 8% for a single stock. The single stock concentration has been sort of 6% previously. So, I don't know if 8% is that much bigger. And it may be deserved. They seem to have done very, very well. But the performance for the No. 1 stock after it becomes the No. 1 stock hasn't been great historically. Meb Faber had some good research on that.

Dan Ferris:                 Right. I'm glad you used the word "deserved" because that reminds me of something that I wanted to say earlier that I wanted to run by you, which is the dot-com bubble and its aftermath speak for themselves. They speak for themselves. But I think what's also been noticed – I've noticed it, others have noticed it, I'm sure you have too – the market was basically right. It took 20 years to – well, it took the Nasdaq till 2015 to make a new high, but it took 15 or 20 years for it to all sort of work out the way everybody expected it to at the peak in 1999, early 2000. But they were right. And if you'd bought Amazon at the top – at the top – and held it until today you'd have made tons of money. So – of course, if you'd have bought Cisco at the top you'd still be underwater. You can't –

Tobias Carlisle:          Cisco's been doing better recently, though.

Dan Ferris:                 Yeah, better recently. Yes.

Tobias Carlisle:          It got cheap a few years ago.

Dan Ferris:                 Yeah, it did.

Tobias Carlisle:          I think the – there was a study done by I think it was Jeremy Siegel, he looked at the "Nifty Fifty" stocks.

Dan Ferris:                 Yeah, I know what you're going to say. This is good.

Tobias Carlisle:          And the Nifty Fifty did have eventually all together, how they have collectively outperformed or they've earned about a market return since then, which is pretty amazing given how expensive they were at that time. The problem is that – and it's probably true also of the large caps from the late 1990s, Microsoft and Walmart and – I don't know if Costco qualified at that time, but you could probably take that list and they've probably all done pretty well. I do think that the current crop of businesses are similarly very, very good businesses. The problem is that you get very, very good businesses at the absolute best time of the cycle and then you project that earnings growth forward into the future and you overestimate how well these things are going to do in the short to medium term. So, they get too expensive in the short to medium term. And it's not so much that their business stumbles. It's just that the valuation has departed from all rationality and has to come back to earth at some point and that process is a long, slow process.

Dan Ferris:                 It's the – that's right – it's the disconnect between that massive optimistic expectation baked into that massive P/E, that massive price, versus what actually plays out. Rob Arnott from Research Affiliates wrote about top dogs. I've cited it many times, because every 10 years the top dogs are different and the – every now and then you find an unusual one that hangs around in the top 10 biggest market cap companies. Those are the top dogs. And GE hung around for a while and Microsoft has hung around for a while. So, it's not perfect but it's pretty much pretty much right. Mostly right. Overwhelmingly right in fact. So –

Tobias Carlisle:          And there's a there's a little sampling bias, a little error there too you have to be careful of, because we look back with the benefit of hindsight to see the ones that have survived. And in the moment I don't know if all of the Mag Seven – think maybe Tesla is the weakest of the Mag Seven. Tesla has certainly got some very real problems at the moment. But people don't like the brand because it's associated with Musk, who has become political internationally. It doesn't do very well because there are – the Chinese EVs are better and cheaper. And the only thing that keeps it sort of on foot in the States is that we've prevented any of those Chinese EVs from competing here. I went to Shanghai in March and walked in a Huawei showroom and I had a look at their SUV and the sedan, and they're both – like, gorgeous leather, interior screens everywhere. Charge in 15 minutes. They say the charge is going to be coming down to five minutes.

Dan Ferris:                 Whoa.

Tobias Carlisle:          Really stunning-looking vehicles. Yeah. And they're $35,000 U.S.

Dan Ferris:                 And we can't buy one because we live here.

Tobias Carlisle:          Right. But the rest of the world can. I was in Santiago, Chile, less than a month ago and their – every single car on the road is Chinese, basically. There's a lot of Chinese cars around the rest of the world, just not in the States. So, your picture of what the EV market looks like in the States is skewed by the fact that these very dominant BYD, Great Wall, all these other car companies aren't here. All you see is the is the Tesla. And the Rivians. And I live in a place where there are lots of – there were – people have owned – Teslas are like Corollas here. Every second car is a Tesla. But as soon as the Rivian got released, the people who were novelty-seeking and wanted to show off got the Rivians. And then the Cybertruck. There are bloody Cybertrucks all over this hill in fluorescent yellow and fluorescent orange and black and all of these people trying to like really stand out. But I've noticed that there's – there aren't a lot of the new Teslas. People have substituted the new Teslas for the Rivians because I guess there's some – I live in a blue state and a blue area in a blue state and so it's – nobody wants that Musk association. My wife drove our Tesla down to Santa Monica and got a "This car supports fascism sticker" put on the window. So, there's a fair bit of pushback to Tesla in this place.

Dan Ferris:                 Yeah, the protesting makes no sense to me. And the throwing Molotov cocktails and dealerships and all that stuff, it just – and putting the sticker on, it makes absolutely no sense whatsoever. If people thought about what they were doing, they'd go, "Oh, wait a minute." They'd say, "Oh, wait a minute. If I believe all this other stuff, I can't do that to a Tesla." But –

Tobias Carlisle:          It's silly behavior but there's an enormous amount of social pressure to not have one in certain parts of the country. It's just toxic for Musk because that's really the lifeblood of that business. They're doing a lot of other stuff there but it's the cars that make the money. And I think that they've got some real competition and there's some distaste for that brand.

Dan Ferris:                 Yeah, real competition. That's right.

Tobias Carlisle:          And so – and they've got a lot of debt.

Dan Ferris:                 Real competition. All the other stuff doesn't really make any money. And people like Dan Ives on Wall Street – I think he's Wedbush – I wrote about this recently. I just couldn't believe it. He says all the other stuff is worth 100 times earnings and that they're going to – the stock's going to be whatever he said, $500 at some point soon. I was just like "No, no, that's not how it works." That's how it works maybe in the short term sometimes. But there certainly isn't going to be any beat and raise going on any time soon.

Tobias Carlisle:          Tesla's expensive. Tesla trades at 150, 200 times earnings. And the earnings are basically nonexistent. It's not like there's any switch that they can turn to immediately become profitable. They're sort of at that breakeven level. And unfortunately, that's the nature of these – metal-bending car companies are – they don't make a lot of money. There's a lot of infrastructure. There's a lot of assets in there to make not a lot of money. I'm more worried about the other car companies in the States that I am Tesla, but Tesla – the other car companies are small caps now. They're not in the in the Mag Seven. The Mag Seven's got to perform or it falls out. And then I think it's a long way down for Tesla.

Dan Ferris:                 Well, that's another – that's a song I've sung before, too. I'm shocked that it's where it is. I'm shocked that it's still trading for where it is. But we could probably name 100 companies off the top of our heads that we could say the exact same thing about.

Tobias Carlisle:          I have been shocked where Tesla is, too. But if you look at the performance of Tesla over the last five years, they had a very – they had a huge ramp in 2020. And by the end of 2020, they were trading roughly where they are now. And so, it's really gone nowhere for five years. And I think that that's bad news for these sort of stocks where really it's a – there's got to be a lot of excitement in these stocks and if there's not a lot of excitement then people move on and they sort of start trading more like what they're worth rather than all of this blue sky that's built into them. There are a lot – there are lots of companies like this that have that big blue sky where they're really not delivering on the promise on a financial basis. They're just – they're saying, "Hey, we've got robots, we've got satellites, we've got all this other stuff and it's all going to be super valuable at some point." There's no business robotaxis.

Dan Ferris:                 Robotaxis.

Tobias Carlisle:          Robotaxis have been coming since 2020.

Dan Ferris:                 And it's worth whatever – he made that statement about it being worth trillions or something. I forget exactly what it was. I thought, "Man, you are –"

Tobias Carlisle:          Cathie Wood at Ark said the whole thing was – I think she put a $6 trillion valuation  on it.

Dan Ferris:                 Yeah, yeah, yeah, yeah. Yeah, she –

Tobias Carlisle:          And my co-host on the podcast, Jake Taylor, he went and had a look at the amount of money spent globally on transportation in a given year, and it was nowhere near that amount.

Dan Ferris:                 Yeah, I called her – I think I called her – what did I call her? I called her the Gerald Tsai of the modern era once.

Tobias Carlisle:          Well, that's – that may not be unfair. Although, to be – she has recovered pretty well in this little – whatever this is. There's this 2021 echo boom going on right now, which is all of the – crypto is back. not the NFTs so much, but people seem to be able to launch these "sh*tcoins," as they call them. There are just sh*tcoins everywhere. Fartcoin, all this other silly stuff. Fartcoin.

Dan Ferris:                 Yeah, I went – you go onto CoinMarketCap.com and there's – I forget what the number is, but I was like "What?" I thought there was, like, a few thousand cryptos and it was some number like 10,000 or 100,000, something crazy. I could pull it up, I guess, if I wanted to but I don't need to. It's an insane number. Who knows of the existence of all these things? Who buys them? I don't understand –

Tobias Carlisle:          The kids.

Dan Ferris:                 Yeah, I don't understand how this works at all, obviously.

Tobias Carlisle:          I think the meme stocks have sort of largely gone away because they've all moved into the crypto because it's unregulated. So, it's not like you have to do – it's not a security, so it's not governed by the Securities and Exchange Act, so therefore it doesn't have to follow the IPO rules and it doesn't have to follow – it's much easier just to spin them up. You can get a little bit of a software that will spin it up for you. And you can just launch one every 15 minutes if you want. Just stick a name on it and see what sticks. Like Fartcoin, evidently, that was the – that got a lot of people's attention and did very well. At one point their Fartcoin had a bigger market cap than the entire Russell 2000 ETF, IWM.

Dan Ferris:                 So, on CoinMarketCap.com it tells you the number of exchanges, 840, the market capital, the whole thing, $4.1 trillion. And it says cryptos – the number of crypto currencies tracked by CoinMarket.com, 19.45 million.

Tobias Carlisle:          Wow.

Dan Ferris:                 It's just crazy. That's crazy. Look, to me, bitcoin is actually really cool. I think it's cool. I do. Because it's competition for – it's, it's potentially valuable. It's competition for currencies. Maybe it's some kind of new payment system. We don't really know yet. I don't.  I think it's worth a speculation, though, a small one, just to see. It could be a 100X amazing thing, even from here. Who knows? Who knows? But 19 million? I don't know. Maybe that's just the way it goes. You get one valuable thing and 19 and a half million unvaluable ones.

Tobias Carlisle:          Well, I think that's where all the speculation has gone this time around. I think that the stock market is pretty well sorted. The better companies are attracting better valuations and the worst companies attract worse valuations. It's just that the spread, I think, is too great. They're not – the better companies aren't that much better and the worst companies aren't that much worse. And this business is a handicapping business. You can take the second horse if you can get better odds than the first horse at worse odds. And that's how you make money. You want to be a handicapper rather than picking the best horse if you have to overpay for the best horse.

                                    Now, that point of view, that philosophy hasn't really worked since 2011. But over the very long run, when I look back with my quant hat on, small relative to large has outperformed by 20 times going back to 1926. And that's an extraordinary outperformance. Since 2011 it's underperformed by about 75%. So, you've got $25 when the guys who invested in the growth have got $100. But I think that the points in time where we've seen this sort of level of under – this is this is unprecedented, this level of underperformance, I should say. But where we've seen under performance historically, it's always been around these notorious bubble peaks – 2000, 2009 at the bottom. And then you have to go back to '66 was an electronics boom. That was when electronics sort of came in. And then you go back. There are about six of these in the data going back to 1926, and every single one of them is a famous boom time peak.

                                    And then once the bubble sort of worked its way through the system and went back to being the way that it always is where small and micro and mid, if you pay a reasonable price, you get a pretty good return out of those things because they grow earnings faster. Over the long run, they have grown earnings faster. So, it's the place to be, as ugly as it looks right now.

Dan Ferris:                 Yeah, because it's ugly in large part. All right, man. We have actually been talking for quite a while here and it's time for our final question. I'm sorry to say. I feel like I could do this for another two hours. And maybe someday we will. I think – I don't know. I'd like – maybe I want too badly to be the Joe Rogan of finance, but there's something about those long formats. It's just – you just can go so much deeper and you're someone –

Tobias Carlisle:          Yeah, I agree.

Dan Ferris:                 – that we can do that with very well. But anyway, so let's do the final question. It's always a little bit of fun, if not a lot. Same question for every guest no matter what the topic, even if it's nonfinancial. If you've already said the answer, feel free to repeat it. And the final question is for our listeners' benefit. If you could just leave them with one takeaway, if you could leave our listener with one thought today, what would you like it to be? It could be anything. I've had people say "Go outside and breathe fresh air and get some exercise." All kinds of stuff.

Tobias Carlisle:          Yeah, that's a good – OK, this is – I haven't really formulated it, but my thought is that you should be optimistic about the future. I think that we should – whatever – it's easy to get – to see all of the negativity out there globally and domestically and become pessimistic about it. I think that regardless of the accuracy of your predictions, you should always be optimistic that they're going to work out because even if things don't work out, you're still better off being an optimist in that scenario because the optimists are the ones who are going to keep on pushing forward and trying to solve the problem. And that's the best mindset to be in whether it works out or not.

                                    So, I'm forever an optimist. I've got kids. I think they should be optimistic. I'm optimistic about the U.S. I'm optimistic about the globe. I'm optimistic about AI, technology, value, small value. I think it all works out. I think there's enough good people in the world, smart people working on good stuff. We're standing at the absolute pinnacle of civilization. I think in 25 years' time we'll look back and it'll be a valley relative to where we are then and another 25 years after that. So, that's my message, be an optimist, because it's the best way to be and because it's probably what's going to happen anyway, it's going to work out.

Dan Ferris:                 That's an awesome message. Thank you for that. And thanks for being here as always. I promise you, you will be invited back sooner than two years next time.

Tobias Carlisle:          Thanks so much for having me, Dan. I love chatting to you. It's always a good time.

Dan Ferris:                 It is. And we'll have it sooner again, as I said, rather than later. Thanks, man.

Tobias Carlisle:          My pleasure.

Dan Ferris:                 Always a pleasure to talk to my good friend Tobias Carlisle. Haven't seen him in a while. It's been two years since he's on the show. That's way too long. I want to get him on more often than that because, as you heard, it's a great conversation with him. He's a very well-informed smart guy who pursues value investing with a constancy and a fervor, which I think is absolutely necessary because it is a long-term strategy. I think it'll work out over the long term, but as he said, lately it's been rough for the small- and mid-cap value.

                                    But like we said, that's where you find things. So, I'm glad we had him on here to point that out. You can find all kinds of stuff in those stocks that is really attractive, limited downside. Gushing free cash flow. He mentioned Bath & Body Works and the reasons for it. The gushing of free cash flow and the $500 million buyback, which is 10% of the current outstanding shares at current prices. So, yeah, that sounds like a really good opportunity there. We used to have it in the Extreme Value portfolio. I think we actually exited at a loss. I tend to forget about the ones we exit unless it was a real disaster. Maybe it wasn't as big of a disaster, a big enough disaster to remember. But I agree, it's an interesting business. And I've noticed also what he did. I think we wrote about it at the time, that it's – the stores are crowded. They have this very niche sort of a thing that it's the best place to go on earth for scented candles. If you're anywhere and that's what you want, that's the place to go.

                                    So, it was cool to talk about that opportunity and to hear all his thoughts about Tesla and to hear about the Chinese car that charges in 15 minutes and is $35,000 U.S. that we're not allowed to buy because we can't import them into the US. But they're all over the place outside the U.S. Wow, that was really interesting. And all the other data points that he threw out. It's great. It's just great to talk to somebody who's that focused and well-informed and knowledgeable and obviously travels around and sees how the world works. Lot of fun. Really loved every split second of that, as I always do with him, and I'm sure you did, too. I promise you will have him back a lot sooner than two years.

                                    That's another great interview and another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as we really, truly did. We do provide a transcript for every episode. Just go to www.investorhour.com, click on the episode you want, scroll all the way down, click on the word "Transcript" and enjoy. If you liked this episode and know anybody else who might like it, tell them to check it out on their podcast app or at investorhour.com, please. And also do me a favor, subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts. And while you're there, help us grow with a rate and a review. Follow us on Facebook and Instagram. Our handle is @InvestorHour. On Twitter, our handle is @Investor_Hour. Have a guest you want us to interview? Drop us a note at feedback@investorhour.com or call our listener feedback line, 800-381-2357. Tell us what's on your mind and hear your voice on the show. For my co-host, Corey McLaughlin, until next week, I'm Dan Ferris. Thanks for listening.

Announcer:                 Thank you for listening to this episode of the Stansberry Investor Hour. To access today's notes and receive notice of upcoming episodes, go to investorhour.com and enter your e-mail. Have a question for Dan? Send him an e-mail: feedback@investorhour.com.

                                    This broadcast is for entertainment purposes only and should not be considered personalized investment advice. Trading stocks and all other financial instruments involves risk. You should not make any investment decision based solely on what you hear.

                                    Stansberry Investor Hour is produced by Stansberry Research and is copyrighted by the Stansberry Radio Network.

                                    Opinions expressed on this program are solely those of the contributor and do not necessarily reflect the opinions of Stansberry Research, its parent company, or affiliates. You should not treat any opinion expressed on this program as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of opinion. Neither Stansberry Research nor its parent company or affiliates warrant the completeness or accuracy of the information expressed in this program and it should not be relied upon as such.

                                    Stansberry Research, its affiliates, and subsidiaries are not under any obligation to update or correct any information provided on the program. The statements and opinions expressed on this program are subject to change without notice. No part of the contributor's compensation from Stansberry Research is related to the specific opinions they express. Past performance is not indicative of future results.

                                    Stansberry Research does not guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this program. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this program may not be suitable for you. This material does not take into account your particular investment objectives, financial situation, or needs, and is not intended as a recommendation that is appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this program. Before acting on information on the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.