On this week's Stansberry Investor Hour, Dan and Corey welcome Joel Litman back to the show. Joel is the founder and chief investment officer of our corporate affiliate Altimetry, where his team uses their Uniform Accounting system to look beyond the as-reported numbers in financial reports to see how companies are really performing.

Joel kicks things off by discussing the resilience of the U.S. stock market, which has taken many professional investors by surprise. He states that historically, tariffs have not been a tax on consumers, with exporters absorbing 50% to 60% of costs to maintain their market share. Joel also argues that the U.S. dollar continues to be strong and that despite recession woes, corporate credit shows the economy is persistent...

Throughout the horrible pandemic lockdowns, corporate credit, at least for public listed companies, stayed unbelievably strong. The banks stayed open, the public debt markets stayed open, and as long as corporate credit's open, you don't have an extended bear market.

Next, Joel urges folks not to give in to the "fear of getting in" (the counterpart to the "fear of missing out"). Because investors are seeing new highs, they think they've missed out on buying in, but Joel says that's a mistake. Joel also shares his thoughts on the usage of AI and how many concerns over it replacing the entire workforce are unwarranted. Additionally, he says that the investment advice it provides is often incorrect and that is should be used as a supplement to research instead...

People will hear me in the office, and they're like, "Who's Joel talking to? He's arguing with ChatGPT again." ... And I'm like, "No, that actually isn't correct. I can show you the research that says what you just told me is 100% wrong." ... I think the AI is unbelievably productive when you use it for a very specific place that you could double-check the data quickly, whatever else. And then lead that up to your mosaic of the reason you buy stock.

Finally, Joel reflects along with Dan and Corey on Nobel Prize-winning economist Eugene Fama and the scope of his knowledge. Joel also provides a brief explanation of what he and his team look for at Altimetry. And he provides a glimpse of some of his latest research...

It's not just AI. U.S. supply-chain infrastructure with all these businesses that are having to get built. If someone puts up a new industrial plant because they're going to start making widgets, in the United States because they want to avoid the tariffs and they're not going to make it overseas, you need an entire infrastructure to support that business. It's not like they just put up a company and whatever. You need everything to support it.

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

(Additional past episodes are located here.)

This Week's Guest

Joel Litman is the founder and chief investment officer of our corporate affiliate Altimetry.

He has been on CNBC, quoted in Barron's and Institutional Investor, and interviewed in Forbes. He has been published in the Harvard Business Review, is a top contributor to Seeking Alpha, and co-authored the highly acclaimed book, Driven: Business Strategy, Human Actions, and the Creation of Wealth. He is a professor at Hult International Business School, a Financial Times and Economist top-ranked international MBA program. He conducts seminars regularly for financial and industry conferences around the world, such as for CFA and CPA chapters.

Joel is a member of CFA Institute, the global association for investment professionals, and the Association of Certified Fraud Examiners. He is a CPA (Certified Public Accountant), received a B.S. in accounting from DePaul University and an MBA/MM from the Kellogg Graduate School of Management at Northwestern University.

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, both published by Stansberry Research.

Corey McLaughlin:    And I'm Corey McLaughlin, Editor of the Stansberry Daily Digest. Today we talk with Joel Litman, the chief investment officer of Altimetry.

Dan Ferris:                 Joel is our good friend and our colleague, he's a very smart guy, he's got a head full of data and a head full of great ideas, so let's talk with him. Let's talk with Joe Litman. Let's do it right now.

                                    If you like what you hear on the show, there's a free daily letter you'll love. It's called the Stansberry Digest. It's packed with our latest thinking on the markets and investing, written for folks who care about protecting their wealth, like you. And here's the best part: it's free and it only takes a few seconds to sign up. Just remember this stansberrydigest.com. That's it. Stansberrydigest.com. Type it in when you're done with your drive or cleaning or whatever you're doing, and we'll be waiting for you.

Dan Ferris:                 Joel, welcome back to the show. Good to see you again, as always.

Joel Litman:                Hi, Dan. How are you, man? Hi, Corey. Thanks for having me.

Corey McLaughlin:    Hey, Joel.

Dan Ferris:                 So nobody responded to my e-mail. They were saying, "This guy, Joel Litman, is going to be on the show," and I shot back, and I thought it was very funny when I said, "Joel, who?" And nobody responded. [Laughs]

Corey McLaughlin:    Wow. I thought that was a rhetorical question, Dan. OK.

[Laughter]

Joel Litman:                That's right, "Joel, who?"

Dan Ferris:                 The one and only Joel Litman.

Joel Litman:                I say that to myself often, "Who? Who am I again today?"

Dan Ferris:                 Right.

Joel Litman:                How are you guys?

Dan Ferris:                 Good. Good. How are you doing?

Joel Litman:                Good. Are you enjoying this amazing all-time high bull market that is defying all the 95 economists at the beginning of the year that said we're going to have a recession, the stock market's going to be a bear market, and all the other prognosticators that got it so wrong? Got it so wrong as to misunderstanding the power of the U.S. economy and the U.S. stock market, even with all the changes that have been happening in the last eight months, seven months.

Dan Ferris:                 Well, let's talk about those changes, because they're obviously a lot more important than what anybody else thought. [Laughs]

Joel Litman:                Sure. Well, one of the things – there have been more than 300 companies that have doubled in stock prices. So the idea that they were saying, "Oh, it's only the Mag Seven," I'm like, "Well, then that would be seven companies that doubled." But no, 300 companies have doubled in stock price, right, in the last 12-plus months, which is just amazing. And I would say it's not a bubble – it's not for crazy reasons. It's for fundamentally good reasons. I think they started to see when people were using [generally accepted accounting principles ("GAAP")] accounting – that is our specialty, is that Wall Street gets it all wrong. Wall Street is beholden to [earnings per share ("EPS")] and GAAP accounting. Nobody worth their salt would ever rely on GAAP accounting or they're relying on traditional finance, traditional valuation methods, right? They're building their discounted cash flow models, but they're using a cost of capital that's completely – right – misses the boat on where the true risk of a company is and where companies have such opportunity. That's our specialty, so I assume – and that's our data.

Dan, you know I like to say this, we don't have opinions. I don't have opinions. I have data. If the data points us in a certain direction, we'll talk about it; if it points us in a different one, we'll say, "Here's where the data is headed." And the data on a lot of stuff really this year, when the market corrected was, no, this is a buying opportunity. It was a heck of a buying opportunity. That's proven right.

Dan Ferris:                 It certainly has, yeah. And like you said, it surprised a lot of people, I totally admit I'm one of them. But I'm always surprised, so that doesn't really mean much. [Laughs]

Joel Litman:                [Laughs]

Dan Ferris:                 I'm never not surprised.

Joel Litman:                Well, Richard Driehaus, who is like the father of this kind of market, right, "Growth and Mo" markets, the father of momentum investing. And I got to work with Driehaus a decent amount, because I went to school in Chicago and I graduated, I taught in school in Chicago for a long time, and Driehaus is a Chicago guy through and through. And he's one of the greatest investors of the last 50 years. He passed away about three, four years ago, God rest his soul. But he used to say that "I invest on surprise." It's funny to say, Dan, that surprises, but he said, "I want surprises. I want companies that surprise up, the surprising upside, the surprise on earnings, surprise on revenue, surprise on any store growth, surprise on customer growth." And he said, "And when you look at what has done so well," and I'm thinking of those 300-plus companies that have doubled in price, "you find some really good surprises." And those surprises, especially I'm talking about fundamental surprises, not just they beat on EPS or something, but where the company's just outproduced, outsold than what anybody would have thought. Surprises can be a really good thing, and right now they seem to be.

Corey McLaughlin:    Yeah, I would think a lot of people are surprised by – I don't think Dan's the only one. I think a lot of people might be surprised that – me, too – that 300 companies have doubled their stock price in the last 12 months is what you're saying.

Joel Litman:                Yeah, it's pretty amazing. I think that's not even 12 months. I think since the bottom in April.

Dan Ferris:                 Well, [inaudible].

Joel Litman:                Since the bottom in April.

Dan Ferris:                 Since the bottom in April, that's easy to believe. You know?

Corey McLaughlin:    Yeah, that's easy. That is easier to believe. But why –

Joel Litman:                But it's not just [crosstalk]. Since the bottom in April plus, even just the last year and a half, think of how strong the market is and just so many businesses that have just done so well.

Dan Ferris:                 Right. Yep.

Corey McLaughlin:    And been able to withstand whatever, the tariffs, the – that's the thing that comes to mind for me immediately, like what the big discussion was at the beginning of the year, was how are these tariffs going to impact businesses and are they – and you're saying basically that they [crosstalk].

Joel Litman:                Well, if you're Walmart and it used to be 80% of everything you sold came from China – they've been trying to willow that down. It's still well over 50% of Walmart. Walmart is still going to have a fund. If you're Nike you can't just move all your sneaker operations to another country. But there have been other companies that have been smart. Dollar General, you would think, "Are they in the same boat as Walmart?" And you'd say, well, Dollar General – but Dollar General, I think less than 5% of goods sold in Dollar General come out of China.

So there have been companies that have foreseen this, and so you could say, "All right, so they're not going to succumb to the tariff issues or supply chain issues in that way." Walmart and Nike are still in trouble with that issue, whereas someone like Dollar General, where they'd say "Isn't that in the same boat?" You'd be surprised to know how little of what's inside a Dollar General store comes from China. And there's been a marked strategy there to do that, and you're finding a lot of companies have done that, to say, "I'm not going to have that supply-chain risk from tariffs or anything else," unpleasantness that happens with China that might cause supply-chain issues. If they invade Taiwan or something like that.

And so a lot of firms have been worried about that, some haven't. And that's when you can start picking through and saying, "OK, who has been on the right side of these macro things?" The other thing about tariffs is that, the idea that everyone said tariffs are a tax on U.S. consumers. That was already proven wrong. Even in 2018, 2017, there were tariffs that were put on and it was shown in electronics and apparel and other kinds of textiles, the exporter will absorb as much as 50% to 60% of the tariff. They'll just reduce their – they actually reduce their profit to make sure they don't lose market share of the American consumer. You saw that happen in a number of cases. Even in the 1930s, with the ridiculous Smoot-Hawley tariffs, which are done horribly, nothing is, I'll say as strategic as they are now. Back then it was just, "Let's just slap a tariff on everybody, no matter what, and crush everyone else's economies without any thought." And even then, even then, that's not what caused the Great Depression. That wasn't the responsible thing. It hurt GDP, but –

Dan Ferris:                 It didn't help, but yeah.

Joel Litman:                Probably not, but more than 2% or 3%. There was all kinds of other ridiculous policies that were placed that caused the 1930s. So when you put that in context you're like, all right, so tariffs, particularly when done on countries that are terrifying us, on countries where there's such a gigantic trade deficit, they could be done in the way they've been doing, and produce what we're seeing is a lot of additional revenue to the U.S government so that we can see what we saw last month, I think, which is the U.S. ran a surplus for the first time in I don't know how long. Since what? Since Clinton? I mean a true surplus in terms of cash-in versus cash spent, and tariffs had a lot to do with that. That goes a long way of helping the U.S. economy and the government over time.

Dan Ferris:                 And we all certainly want to do that, because we love them so much. [Laughs]

                                    So let's talk about all the things that sort of, that you say that make people lose their minds, because that's what's most fun. So we've covered – what else about tariffs? Tariffs are – they're not nearly as bad as anyone thinks and not really a tax on the consumer.

Joel Litman:                Not nearly – [crosstalk]

Dan Ferris:                 What else? We were talking about gold before we hit the record button. I like that topic because I know it drives people nuts. I come at it from the other way that drives people nuts, which is to tell them how strong the U.S. dollar is and will remain for some time. And they hate that. [Laughs] They hate that.

Joel Litman:                And yet it's true. The world is dollarizing, it's not de-dollarizing. And people are like, "How can you show that?" I'm like, well, I think Danielle DiMartino Booth – she's shown that really good data on pre-pandemic, maybe 8% of the world's goods settled in dollars, of the world's trades and how that's doubled that almost, 15%, 16%. Let me just say even the super-alternative finance people, the alt-fi to the bone, crypto, right, but when crypto says, "I want to spend my money," what are 99.9% of crypto stable coins based on?

Dan Ferris:                 Well, it's not even just that. Right. They're all based on dollars, but also when they spend money, what do they do? Well, they go from dollars to crypto back to dollars. It's just sort of – it's a hokey intermediate [crosstalk]

Corey McLaughlin:    Yeah, which wasn't the intention when it started, but that's where it actually where it ended up.

Dan Ferris:                 Right. It ended up that way because you can't get around the dollar. Like you can't escape it. And the thing about the dollar people don't understand is that it's certainly about what happens in the U.S. economy, but it's about the demand for it and supply for it everywhere else. I think last time I looked Bank of International Settlements had it at like 12 or 13 trillion, some huge number like that, of U.S.-dollar-denominated debt outside the country. That's demand for dollars.

Corey McLaughlin:    Yes. I just saw a tweet here about foreign holdings of U.S. Treasurys in June jumped $80 billion, to a record $9.13 trillion. So all the talk about tariffs and people dumping bonds and everything, evidently not happening.

Joel Litman:                When you have inflation under 2% – I know the BLS, the Bureau of Labor Statistics, their methods are antiquated. They were producing bad data in the 1900s, they're producing bad data today. It's just their method is antiquated. When you look at – there's a number of great firms in the world of accounting and finance, whatever, right, Altimetry is the top purveyor/provider to institutions of Uniform Accounting and looking at the financials. When you look at inflation, there's a firm called Truflation, T-R-U-flation. And not just them. There's a number of other independent groups, and they're all at inflation below what the BLS says.

So when you have $1 that's maintaining its value with inflation at under 2%, in all likelihood that's what we're seeing. I think that [Federal Reserve Chair Jerome Powell] is recognizing that finally that the [consumer price index ("CPI")] number is just, it's still way too high on a relative to reality of people's actual spending and what they spend on and the productivity booms that we're seeing from AI and all kinds of other places, despite what MIT labs might say, which created a nice correction for some AI companies and AI-enabled companies. But no, we're seeing massive productivity from AI, just not in the very, very particular, specific study that the MIT Labs did, when they said, "Oh yeah, AI is not resulting in productivity." But they looked at such a specific kind of project. I'm in agreement with the MIT study. I'm just saying that's not 95% of where people are getting their productivity.

And so when you put all that together, inflation is down, unemployment probably is worse than the BLS is providing. And so to the extent that the Fed might have to cut rates, but they're cutting rates in a really low inflation period already. It's not like cutting rates is going to lead to a 7%, 10% inflation tailspin. You know, inflation is low enough that it can absorb some amount of interest rate cuts that should then help spread the economy and help in some areas, like unemployment, that are probably a bit worse than the BLS is reporting.

Dan Ferris:                 Yeah. Well, they cut rates. We've been thoroughly conditioned what to expect. People will say, "Well, if I can no longer get 5%" – which you already can't get. You're at 4.5 or whatever in T-bills. "I'm going to have to go up the risk trail a little bit." And that's not a terrible thing, I would guess, in a lot of cases.

Joel Litman:                And if earnings are growing at 7%, 8%, 9%, and it's uniform earnings, not just GAAP accounting BS earnings that Wall Street reports, but what we're measuring is Uniform earnings on a real basis, on a real uniform-adjusted, calculated the same way over 50 years, right, you end up with a price-to-earnings multiple that's not that bad, but with earnings growing at 7%, 8%, 9%-plus, that spells upside for the stock market, not downside, right?

Dan Ferris:                 Right.

Joel Litman:                Not downside, no recession.

Dan Ferris:                 Yeah, predicting recessions is a – it's just a horrendously bad business. It really is. Anybody who's honest will say it can't be done and doesn't need to be done, shouldn't be done. Predicting recessions is just, it's a mugs game. It's ridiculous, I think.

Joel Litman:                So recession is one thing, and then is the stock market going to go into a bear market another? Even ChatGPT will tell you, if you say, "In the last 200 years, ChatGPT," if you're GPT-5, right, or Grok, and you say, "Has there ever been a bear market that lasted more than a year that was not preceded by a corporate credit crisis?" And the answer is it's never happened. As in never. Never happened. Right? That even the tech bubble of 2000, where the bubble burst. In '99 corporate credit seized. It seized up, the debt capital markets groups at banks were dead, the desks were empty in terms of trades being done. Nobody was able to issue debt for the life of them, companies were having trouble refinancing. So even 2000, the "tech bubble" was still corporate credit-driven bear market.

One of the reasons in March/April/May/June of 2020, even in my LinkedIn, at that point I'm like, "I'm just going to tell everybody, because no one's listening anyway." And we were like, "Buy the S&P. Buy the S&P. Buy the S&P." And when people were asking I'm like, "Look at my LinkedIn." It wasn't like we were going back and forth on the subject, and the reason was, is that throughout the horrible pandemic lockdowns, corporate credit, at least for public listed companies, stayed unbelievably strong. The banks stayed open, the public debt markets stayed open, and as long as corporate credit is open, you don't have an extended bear market. I'm not saying there wasn't a bear market, but 2020 finished up, the S&P finished up 11% for the year, despite what a roller coaster it was. And that was one of the reasons we had such conviction in March/April/May. I think I published in Forbes in June or July, saying, "This is not just a bear market rally that's going to tank. This is fundamental, solid business performance and every reason to be buying in."

Dan Ferris:                 Yeah, we did the same thing in April.

Joel Litman:                And honestly, right now –

Dan Ferris:                 Yeah, that was obviously an incredibly moment to buy.

Joel Litman:                And, Dan, the measures are stronger now. Yes, there are some issues in consumer credit, consumer autos, office, real estate. There's pockets, but you just stay away from those pockets. You can stay away from the pockets where there are corporate credit issues, whereas across the board, all other sectors than those few pockets, you see spreads are really tight, meaning companies can issue debt and refinance debt at really, really inexpensive prices. If interest rates come down, that makes it even cheaper. That means there's more room for the companies to spend money on growth instead of spending money on just debt service. And that is all very, very positive for the U.S. economy in general, but really for public-listed stocks, all cap, microcap, all the way up to large cap.

Dan Ferris:                 It's funny, because a lot of people will look at that same spread and say, "See, it's just so tight. It's so tight. It never gets this tight" or something. It's the opposite. It's sort of like the S&P 500 trading at record price to sales or whatever, "It's never been this high. It's never been this tight."

Joel Litman:                Yes. Yeah.

Dan Ferris:                 And they don't see it as a positive – it's a negative.

Joel Litman:                Yeah, it's – I would agree that –

Corey McLaughlin:    Well, we're wired to be negative, aren't we? Yeah.

Joel Litman:                At some point, yes, we watch it, because we're saying at some point if those credit default swap spreads widen significantly, but they're so good, meaning financing is so cheap and easy for companies, public-listed companies, anyway, that that even if the spread widened 100 basis points, you'd still say it's still really cheap, though. At the end of the day it still means companies are spending less, that it's not enough for it to move 100 basis points. You'd have to have it – you'd have to move a lot. And for that reason it says we'll have a lot of – there'll be a canary in the coal mine long enough in advance to tell us, OK, times are tough. And it ain't right now. It isn't. It isn't.

Dan Ferris:                 Unless you're out of work, of course. [Laughs] Then times are tough. [Laughs]

Joel Litman:                That's the issue, is that's another reason for Powell to say, "I'm concerned about unemployment." I think this is where the BLS has been wrong on the CPI on the up, meaning inflation has truly been better than the CPI keeps supporting. But unemployment, when you look at a lot of other independent organizations, unemployment is truly probably worse than the BLS is reporting. And if the Fed's mandate is a dual mandate of unemployment and inflation, then of course Powell has to finally succumb to this – just succumb to the data and say, "Forget what Trump is saying, and the administration, the data is saying you don't have an inflation problem and you might have an unemployment problem." So what you do? You ease, right? You ease a little bit and you bring down interest rates, which is what the market is expecting to happen and we think that's what Powell is going to do, if he does right by the country.

Dan Ferris:                 Right. Maybe even what – possibly, I'm not sure what our schedule looks like, but maybe by the time people are hearing this, that will have happened. [Laughs]

Joel Litman:                Yeah, I don't know what today is, whoever is listening, but if we're in September, we're looking for a quarter and then another quarter. He may surprise with 50, but he's been so inflation-concerned over tariffs, despite the data saying otherwise, and assuming tariffs lead to inflation, which we've shown – they say, all right, if exporters eat 50% of tariffs, what about the other 50% And they said, "Well, the other 50% if offset by one of the biggest income tax cuts. Cutting tax on tips is probably a $15 billion spur to people having more money to spend, cutting on Social Security is over $100 billion, cutting on overtime is probably $85 billion. You're talking about $300 billion, right, $200 billion to $300 billion of additional money being in the hands of consumers, right, to say I can offset the ill effects of those things.

On top of that, you truly have oil and gas coming down in price, with the U.S. having some of the cheaper electricity bills in the world, especially compared to Europe, right? Not as cheap as China, which is going to burn coal all day long and pollute the air as much as they want, so they've been building coal plants like crazy. So electricity in China is cheaper. But amongst nations that care something about climate and aren't burning coal like crazy, the U.S. has got cheaper electricity because we have virtually – I don't want to say unlimited, but untapped potential of natural gas that the U.S. can put on. And when you think of that and the cost of electricity and the cost of all the things that are dependent on fuel coming down in price, coming down in price, that easily – easily enough to offset whatever inflation that could come through the tariffs coming through. And so when you put those puzzle pieces together, you can walk away knowing things are solid.

Dan Ferris:                 I have to squawk up here. [Laughs] I would say pipe up, but I need to squawk. It's always been dumb to talk about tariffs causing inflation. Inflation is a monetary phenomenon and tariffs are not a monetary phenomenon. I never knew what anybody – if you say it's going to make the price go up because they're going to pass the cost along to the consumer, we know to some extent that happens. It just does. Now if it's offset elsewhere, great. But that's not inflation. Price going up is not always inflation, and it's wrong to just conflate it or to think that you're using some type of shorthand to describe the situation, because inflation is a very specific phenomenon. It's not CPI going up. It's not any of those things. It's about the supply of money and credit. Ah, there.

Joel Litman:                Dan, I would see –

Dan Ferris:                 Thank you.

Joel Litman:                – one of my favorite newsletters from back in the '70s, '80s, that I read when I was really just a teenager, but then as a young adult, was Howard Ruff, R-U-F-F. And he used to say, "Explaining inflation as rising prices is like explaining a hurricane as falling trees, right? Yes, it happens, and I think one of the things that we've tried to do with our research is separate between is it increasing prices or is it currency devaluation?

Dan Ferris:                 Right.

Joel Litman:                Right? And trying to get out of just saying inflation and say, "Let's talk about are their prices rising? That's something. Is there currency devaluation?" And that gets to Howard Ruff's comment that it's currency devaluation that we want to look at. And it looks like the U.S. dollar does not have the currency devaluation, which is part of the reason why the world is turning to the dollar and is dollarizing more and more. If you want a reason to buy gold, the reason why gold is not the U.S.'s problems, it's the problem in the next 20 countries in the world. And that would be a reason why to buy gold, right? If you're in Russia and you are getting paid in rubles, I would turn that into gold in a second. If I was paid in renminbi in China, or if I had real estate, I could get rid of my real estate, I would turn that real estate into gold in a second. If you're in Poland, the Polish government's like, "If we end up a wartime economy, our currency is going to become worth a lot less." And in fact, all the countries that are not on the euro even, and even ones that are on the euro would say, "Maybe I should be buying gold if things are going to go really south with Russia, Ukraine, and the stuff in the Middle East."

So if things really get bad, like those are all the reasons to buy gold. So people are like, "Oh you're not a gold bug." I'm like, "Actually, I think gold is going to do very well," but not because of the U.S.'s having concerns, but because the rest of the world does. And when you can only produce 1.5% to 2% of gold a year, and on the margin you have all these giant populations saying, "I don't like my currency," some turn to dollar, some turn to crypto, and quite a few turn to gold. And so it's a very bullish call on gold. I'm not against gold, I just still think the S&P 500 plus the dividends reinvested is still on par, on balance a better place than pure gold. That said, if you're investing in gold stocks or gold equities and those companies produce a profit and they can pay you a dividend, different story.

I spoke at the Rule Symposium in July. Rick Rule invites me there all the time, I think, to rouse people up. [Laughs]

Dan Ferris:                 Yeah, I know. [Laughs] That's right.

Joel Litman:                And yet I was saying – the title of my presentation was "Goldilocks for Gold and Stocks." Because you could have a situation where for U.S. stocks you could have things going well and still have a bullish reason for gold at the same time. They don't have to be, you know, against each other the way people often think.

Dan Ferris:                 Yeah. It's often assumed that it's a seesaw with gold on one side and dollars on the other, and it's not.

Corey McLaughlin:    Yeah, I think the fundamentals right now are bullish for both.

Dan Ferris:                 Yeah, the fundamentals for the dollar are hard to shake, they're hard to change. It's too massive. There's too much demand outside the U.S., as we've been saying.

Anyway, OK, so we've ticked people off with tariffs and we've ticked them off with gold, maybe, hopefully. Although you couched it a little bit, being bullish with gold, I don't know.

Corey McLaughlin:    Yeah, that was pretty bullish on gold, I would say.

Dan Ferris:                 Yeah, they're not going to be too angry at you.

Joel Litman:                I wasn't thrown out of the conference the way I might have been at – [inaudible] [Laughs]

Dan Ferris:                 OK. Well, let's get you thrown out of here. What else you got? What have you got that's like, "Throw him out of here"? Bullish on the S&P, bullish on gold.

Joel Litman:                I think there's an emotional – it used to be they were always talking about the fear of missing out, right, FOMO?

Dan Ferris:                 Mm-hmm.

Joel Litman:                I think there's a fear of getting in. When people are looking at the market and at all-time highs, and then they see 300 companies double in just a few months. So there's breadth. It's not just the Mag Seven or something. I think people are just worried about getting in. I think it's a mistake. I think that you can get into the stock with the U.S. equities and you can get in selectively. You can avoid the known problem areas, which are obvious, like office real estate is still in a horrible depression. I think autos are in trouble. I mean, I think there are some big areas to be worried about. Right? Any banks that are dependent on office real estate, and there are a lot that still are, I'd still be very concerned about. I'd be worried about, you know, we still have to see what happens with Trump on drug pricing and pharmaceuticals. So if your company's drugs are the ones that are getting hit with the price control, that is going to limit profits, it's going to limit dividends and capital gains.

So there are known areas to worry about, but there's a lot of other areas, like the AI, I'll say enablers, where it is gangbusters for corporate America. I haven't talked to, and I do spend a lot of time with the management teams as well as investors, I haven't talked to managed team yet that hasn't said they're embracing AI at every single level the firm. Every level the firm is embracing AI, right? And to think that AI – you know, '94 to 2000 the Nasdaq did something like 600%, and most of that was post-'96, '97. I think today is sort of like '96-'97, we've got another three, four years of an AI early inning still, bull run, and we're seeing it, we look at the uniform earnings of companies.

It's really difficult to see this with GAAP numbers. That's where people, you know, for good reason, will say, "Well, I don't like the earnings of these companies. I don't like what's happening." But the problem is GAPP accounting punishes the innovators, it punishes [research and development (R&D)] spend to this day. In other countries a company spends on investment, invests in research and development, it doesn't get expensed – it gets capitalized. But when U.S. companies invest it gets expensed as a cash flow from operations. It's ridiculous.

Dan Ferris:                 Right. Yep.

Joel Litman:                On what planet is R&D cost of goods sold? It's an investment. But it doesn't show up under the investment section of the Statement of Cash Flows. So a company could be pumping in R&D like crazy, because they know we're going to take this market, we're a leader in our space. And we see this – that's the companies we like to buy, right, the leaders in a growing sector, is as Driehaus said, "a really good house in a great neighborhood." So if we can find those names; the problem is the uniform accounting, the GAAP accounting will tell us something wrong. Uniform Accounting will say, "Oh no, no, no, cash from operations is strong. They're just investing like crazy." That's very different from cash from operations being low because of R&D, right? And when you see clearly on that, you can get away from this fear of getting in and say, "We could be selective."

We're publishing a bunch of research on this and we're announcing it in mid-September. I think September 17 we're gonna release this research, but it's 30, 40 years of research on the type of stocks that, even in market highs, continue to hit new market highs and really take off in these kinds of markets. And it's fantastic research. It's on the way that Driehaus, right, the way that Cliff Asness at AQR has built his $100 billion firm. Cliff Asness, who studied directly under Eugene Fama, under the efficient market, and his goal was, "All right, now when is the market not efficient, so that I know where to buy and where do I make money." As Fama said, it's not perfectly efficient. We're looking for those imperfections, and that research study we're publishing on in September is a big deal. It's good, and it backs up why some of these investors have done well, when the value people, particularly at times like this are like, you know, they're pulling their hair out. And you're like, "Well, there's still value. You just have to – value is still is the stock cheaper than it should be?" It's not just does it trade at a 12 [times price to earnings]?

Dan Ferris:                 Right. There are a few of those around, but they are harder to find than ever. I'm glad we're talking about AI, because that's another thing where I think we could potentially really make people angry by [laughs] And it's good – I'm joking, of course, but it's good to upset people's expectations and tell them something different than what they want to hear. And with AI, the drum beat – the constant drum beat, actually – is it's going to put a lot of people out of work. Now from, you know, automatic loom equipment to the Internet, this has never been the case. It's always – all new technologies that are transforming, the printing press, whatever you want to call it, you know, early in The Wealth of Nations I think, or I know Adam Smith mentions pin-making machines. All of these things, they make people more productive, and when a technology is really transformative like this, it just spawns new industries. The Internet has created new industries. So it makes us more productive, it spawns new industries. Thinking that, "Oh, it's going to wipe out corporate America," well, there are probably a lot of middle manager types who need to lose their jobs, AI or not, right? [Laughs]

So I think it's silly to talk about it that way, as this sort of unemployment apocalypse, since so far that just hasn't happened in history.

Joel Litman:                Well, Americans have been very good since going back a couple hundred years, and being able to change, being able to adapt, being able to innovate. And that means also changing jobs. At one point we were what, 65% of people in the U.S. were agriculture. Today it's 2%, 3%? But it's very, very, very low. Well, it's not like the other 58% just remained unemployed for the rest of their lives, right?

Dan Ferris:                 No, not at all.

Joel Litman:                Right? It's people moved over, right?

Dan Ferris:                 Right.

Joel Litman:                And you move over into jobs that are increasingly more tech or tech related or tech support or tech maintenance. And it's our employees said to us a couple of years ago, they said, "Hey, we're hearing this. Are you," especially in a knowledge industry, we're manipulating numbers, we're manipulating data, and they said, "Can't AI take our jobs?" And I said, "Here's what we guarantee," I said. "I don't think AI could replace our people, but someone using AI will replace your job. Or some research firm using AI will replace Altimetry, if we don't." And that is the case, right? But no, I'm with you on I don't think you'll see some massive, massive – there's no unemployment, by any stretch of the imagination.

But there does have to be change, as there has been. Like if you were an expert in farming before, you had to learn how to build houses. If you were an expert in building houses and, you know, right now that's still a decent industry, but maybe not building offices.

Dan Ferris:                 Right. We don't –

Joel Litman:                You have to change and move and adapt, and Americans are great at that.

Dan Ferris:                 Right. We don't read books about the great buggy maker crisis of the early 20th century, right? The buggy whip crisis of the – oh my god, it was mass chaos. The buggy makers and the buggy, where they all went out of business.

Joel Litman:                [Laughs] Yep.

Dan Ferris:                 We don't read about that. And as you point out with agriculture, 98% of the country is not doing anything. It just doesn't happen.

Joel Litman:                [Laughs] Yeah.

Dan Ferris:                 It's like a lot of things in life, it's what's not there, what you don't notice and you don't see is what's important.

Corey McLaughlin:    Yeah, you have to do something. Yeah, Dan, the way I'm thinking about this is like AI is coming towards us, right? But like we just have to adjust to it. And I feel like that's what people and companies it sounds like across the board are doing, otherwise you're just going to be left behind and you might lose your job.

Dan Ferris:                 Right. And I'm pretty sure humans made it, right? Aliens didn't make it. I think humans did.

Joel Litman:                Right.

Corey McLaughlin:    [Laughs] Yeah, you can't replace humans. I mean totally, right? Like what's the point. If it did everything for everybody like it wouldn't work. Like it just wouldn't. So you need to – we're creating this thing. Maybe I gets to the point where in like sci-fi this thing's coming to put me in jail. But I think we'll hopefully put controls on that.

Joel Litman:                Yeah. Yeah, I think we're a long way from 2001: A Space Odyssey.

Dan Ferris:                 And the real thing, though, is that we'll never see the singularity. The singularity was never going to happen. We're never going to see the machines taking – the machines aren't going to be superior to humans. Humans are always going to be more human than the machine, and humans want other humans. The demand is from human beings is more humanity. It's not more devices.

Joel Litman:                I am in – Dan we're on the same page on that. Philosophically and I'll even say spiritually, right, I believe that. I'm into that.

Dan Ferris:                 Yeah. Yeah. So when people talk about the singularity or AI, like the mass employment apocalypse view of AI, or even the other thing they talk about, Elon Musk and various folks have expressed concern is, you know, AI kind of taking over, just being a threat to us physically, I guess, as Corey just mentioned, actually. You know, it's like the machines in the Arnold Schwarzenegger movie, right? Skynet, right? The AI becomes Skynet. Again, I don't – you don't – like humans have a say is all I'm going to – humans have a say.

Corey McLaughlin:    Yes.

Dan Ferris:                 And I can still pull the trigger and we can still pull the plug and all this stuff. It just doesn't make any sense.

Joel Litman:                Not to mention, if AI is still based on the Internet, searching what is out there, what has been published, what's out there, it's still dependent on that data set for coming up with its conclusions. And that's why to this day if you go to ChatGPT, right, or Grok or Perplexity, whatever you like –

Dan Ferris:                 Right. Go to Gemini or any – yep, all of it.

Joel Litman:                – and you say, "I'm a 75-year-old man. I have a pension that covers all my expenses. I have $10 million in the bank that I don't intend to spend. How should I allocate it?" And the answer is patently wrong every single time.

Dan Ferris:                 Yep.

Joel Litman:                Patently wrong. It is – I can't begin to tell you. And if you say you're 25 years old, but I have a couple of kids, and they're in school, and I get to have private tuition, and you ask for your asset allocation, it's wrong again. It's so wrong it's like detrimental to a person's financial wherewithal.

Dan Ferris:                 Right.

Joel Litman:                At such material levels. And I'm like if it can't get that right, if it can't get that right, it's not going to simply say, "OK, here's your stock you should buy tomorrow" and everyone just stops [laughs] investment research. It's just a silly kind of idea. We're always doing it, because I'm always like at the point that AI can do a better job than we can on corporate analysis, right, then I've got to rethink my business. So far it's not even close. It's not even the same ballpark. In fact, it's patently wrong whenever we ask things as simple as basic how much percent in stocks, how much bonds, how much cash, how much gold, and it gives you the wackiest numbers. And it seems to depend on the day of the week. It seems to depend on the phrasing of your question, even though you use the same data, and it depends on which database AI is pulling from. You get these crazy answers, right, that it says [inaudible] it's so bad.

Dan Ferris:                 It's worse than that. But it's worse than that, because to some extent how I ought allocate is an opinion and it's kind of a personal thing, you could even say. But it doesn't know facts. And it's like 100% confident, 100% ignorant. It'll tell you – I was looking for the book, which is called Time Enough for Love by Robert Heinlein, and I asked one – I forget which one it was – I asked one of them, "Where and when did Robert Heinlein say 'Specialization is for insects?'" And then it said, "Well, he never actually said it," blah, blah, blah. And then the next one I asked, which was Gemini, said, "Oh, that's in the book Time Enough for Love, published in 1973 and it's part of this speech," and I was like, "Yep, that's it." And the other one just, it was 100% confident and didn't know. And that happens repeatedly.

I've sat here and had conversations like that with Gemini as well, where, you know, I was looking for mentions of Louis Bachelier, I was talking about the birth of modern finance, or something. And I was like, "You told me that this was in this book, but it's not there," or vice versa, I can't remember. But I told – I b*tched Gemini out for telling me the wrong thing, and it said, "Oh, I'm sorry. You're absolutely correct. I was wrong about that." And I wanted to say, "Yeah, and you were totally confident that you were right." [Laughs]

Joel Litman:                And you know, Dan, I'm totally with you. And I'll use the speech function, and I'll – and people hear me in the office and they're like, "Who's Joe talking to?" and like, "He's arguing with ChatGPT again."

[Laughter]

Joel Litman:                They literally say, they're like, "He's having an argument with ChatGPT." I'm like, "No, that actually isn't correct. I can show you the research that says what you just told me is 100% wrong." "Oh, sorry, let me check again." Exactly what you're saying, Dan.

So I mean this is one of the things, is that when it comes to something as complicated as investing and the art and science of it and stock picking, it's not going to be able to be the be-all answer, the be all end all answer, and you need, – now, that said, do I use AI? At this point, our firm is over 100 people, and I could not tell you how many different AI tools are being used. Meaning 2.5 years ago everyone was using ChatGPT or some coding AI or whatever. Now it's like every team has their own 12 agents, some of them custom-made that I'm like I couldn't possibly even take an inventory of everything, because they're like, "Oh yeah, that's what we were using six weeks ago, but the new graphic design software is so much better, and it's free." And I'm like, "Oh, I thought we were paying for that." They're like, "Well, we were, but we're going to cancel it because the free one is actually much better and does better whatever, just even for simple design." I'm like, wow, right? It's amazing. So the tools are incredibly valuable.

But to give you the be-all answer and say, "How should I invest my money? What stock should I buy?" All I get is a bunch of nonsense every time. Every time.

Dan Ferris:                 Yep.

Corey McLaughlin:    Yeah, you reminded of something Eugene Fama was talking to us about, like do you have –

Joel Litman:                Great interview, by the way. Great interview you guys did with Gene Fama.

Dan Ferris:                 Thank you. Yeah.

Corey McLaughlin:    Yeah, I was not expecting to talk to a Nobel winner this month.

Dan Ferris:                 Yeah. [Laughs]

Corey McLaughlin:    But what he said – what we kept asking him about different things, and he kept saying, "Well, do you have better information than the market or somebody else does?" And what we're talking about with AI is you might actually have worse information, is it's pulling from the wrong things and not tailoring it to what would really work for you anyway.

Joel Litman:                Yes, what will provide, you know, alpha? What stocks will create alpha? And it's just – now a firm using lots and lots and lots of agents that are used and then amalgamate it, and then you still have an investment committee that we have, that the trigger is still pulled manually, right, a fundamental shop like ours, you know, that still works. And I think the AI is unbelievably productive when you use it for a very specific place that you could double check the data quickly or whatever else, and then leave that up to your mosaic of the reason you buy stock.

Fama, Eugene Fama, obviously famous for the "Efficient Market Theory," but even on your wonderful interview – I really thought it was a great interview, I'm not just saying that – he said, "Well, do you have the information for when the market is" – he said, "It doesn't all work perfectly. And so when you make money is when it doesn't work perfectly." One of the areas that confounded him that one of his top students, Cliff Asness at AQR, wrote his dissertation on and dissertation was for Fama, who's his PhD doctorate at University of Chicago. And Cliff Asness, as you know, is AQR capital running over $100 billion, and he said "the importance of momentum as a factor," meaning looking at the 300 doubles. Looking at the stocks that are going up over the last 12 months, looking at whatever, and saying, "OK, what are the characteristics about them that have created this momentum?" And if we can identify that then you can go in and – honestly, Dan, I think there's a lot more really interesting issues out there right now when you look at that from that perspective, when you're looking for where is there imperfect information, where are the things that the market's not getting right? And one of them is when the market tells you earnings are negative a company when they're really positive or earnings are shrinking when they're spending more in R&D, when in fact earnings are growing, they just happen to be investing a lot more in R&D.

That's a really simple one of I can name 20 that the research is showing, but when you look for that kind of anomaly, there's a lot more really interesting issues, even with the stock market at all- time highs right now, when you're focused on this growth and momentum kind of strategy, the way Asness did, who was Fama's maybe one of the five most successful students of Fama, along with Dimensional and Booth and others.

Dan Ferris:                 Right. One of his billionaire students, to put it simply.

Joel Litman:                Of several. Of several. [Laughs]

Corey McLaughlin:    Yeah. Yeah.

Dan Ferris:                 Yeah. Amazing. Yeah, I enjoy Cliff on Twitter a lot, and I think I've asked him to be on the show once or twice, and he's not interested.

Corey McLaughlin:    Yeah.

Dan Ferris:                 But maybe I'll ask him again. Who knows? You never know. Love – [inaudible]

Joel Litman:                Well, you've had Fama now, so if you reach out and say, "We had Eugene. It was a great interview. Our giant audience loved it. Would you like to come on and build off of it?"

Dan Ferris:                 Yeah.

Joel Litman:                That might be interesting, now that you've had Eugene.

Dan Ferris:                 Yeah. Yeah, that might get us some other ones, right?

Joel Litman:                Yeah.

Dan Ferris:                 That's a good thought. Yeah. I'm not above that. I'll do anything to get him here, yeah.

Joel Litman:                Yeah.

Corey McLaughlin:    Seconded. Yeah, let's do it.

Joel Litman:                Yeah, because I think Fama enjoyed it. He seemed to enjoy your interview. It wasn't just – I'm being honest, it was good to watch.

Dan Ferris:                 I hope so. I think he enjoys – I don't know if I asked him this, but he seems to be really interested in talking with people and getting on podcasts and just, expounding ideas and things. But we admitted – I admitted – I'll speak only for myself and not for Corey – in the takeaway session after the interview, that it was probably the hardest interview I think I've ever done. I just, I wasn't ready for him to be so concise so many times. He didn't feel the need to expound a lot more than many others.

Joel Litman:                Yeah, he had the simple, it must – when you asked him about why all these money managers underperform the market, he was like, "Well, if they're trying to beat the market and they don't have information that's unique, then of course, they wouldn't."

Dan Ferris:                 Yeah. Yeah.

Joel Litman:                It was like [laughs] – and that was it. And I remember, Dan, you were listening to him saying, "Yeah, if you don't have information, that's" – my entire business is built in do we have information the rest of the world doesn't have. And if we don't, then we have no business having an opinion, right?

Dan Ferris:                 Right.

Joel Litman:                I don't want to hear someone's opinion on some company and they start telling me the same thing I can hear on CNBC or in Bloomberg or whatever. I'm like, "No, no, I want to hear data that you've uncovered or dug up, sometimes through primary research, right? Sometimes through primary research, where sometimes did you get on the phone and call 20 dealerships, and all 20 dealerships told you something that was totally different from what Wall Street's saying from the research? That – once in a while picking up the phone or getting out and doing channel checks can get you some insights that lead to when the market is not perfectly efficient, which is when you make money.

Dan Ferris:                 Yeah. Scuttlebutt, so it's –

Joel Litman:                No, it was great. It was great.

Corey McLaughlin:    Yeah, and, Dan, I'm with you on your takeaway point, as well.

Dan Ferris:                 [Laughs] OK.

Corey McLaughlin:    Eugene was, he's 85 to 86 years old. You've got to – we'll keep that in mind here. So he also doesn't need to expound. He's short and to the point, he knows what he knows and that's it and that's fine.

Dan Ferris:                 Yeah, and as we noted at the time, just –

Corey McLaughlin:    Hopefully I can do a podcast when I'm 86.

Dan Ferris:                 That's right. He was very – his integrity, his sort of intellectual integrity was on full display, because he refused to let you kind of bait him into saying something about the future. "I don't know. I don't know the future." [Laughs] He just wouldn't do it. So...

Joel Litman:                And he's famous for not letting students ever use the word "bubble" in his class. In his class he's famous for saying, "Don't use the word bubble. Don't use the word – but you can say expectations were built in that were very high. And if they meet those expectations, then it wasn't a bubble. And if they don't meet the expectations, then it falls, but it's not falling because it was a bubble. It's because the information at the time told you that stocks were going to continue having 12% earnings growth, and when they didn't, they fell."

I mean that's a discipline I think that I've been trying to teach internally is also with our, look, when you have all these analysts up and coming, I can't do everything. And we have some great investment analysts and I'm teaching them early on, right, "Don't say bubble. What are the embedded expectations?" And that's something you learn from Fama that I think is through-and-through at our firm and the way we invest. And the way anyone should invest, is to always think – don't think it's just, "Oh, the market is overpriced." No, think what is priced into the market. Now let's have a debate over that. But simply saying it's an all-time high, the market is overpriced, that's – at least say something that has some data behind it, and then we can debate the data.

Dan Ferris:                 That is the core of the Extreme Value newsletter that Mike Barrett and I have been doing, that I've been doing since 2002 and Mike's been doing for 15 years now. So it's comparing, because you can't do the other thing – I tried to do the other thing for a while, and I was like you can't do discounted cash flow. You just can't do it because you'd have to know the cash flows within some reasonable probability, and you don't. However, you can plug them in to equal the current price and then tell me, well, what does that look like?

Joel Litman:                Yes.

Dan Ferris:                 Are things that bad? Are things that good? Are things somewhere in between? You can do that. And that's price implied expectation. That's the way to do it.

Joel Litman:                And that's what our Altimeter does. So our Altimeter for 6,000 U.S. stocks, for every single company, right, we don't say buy, we don't say sell, we're not like Wall Street, with some overpriced/underpriced on every company. On every single company we simply say, "At this price, here's what the cash flow stream, the ROAs, the profitability of this firm has to look like to justify today's price. Now you decide." I mean what I like to say is if you're good as a research provider, not just a stock pick, but just providing, 'cause a lot of our clients, you know, just rely on our database, we're setting the line. We're really good bookies. We're saying, "Look, everybody knows this company is going to do well, but how well does it have to do to justify its current price?" And that's what we're modeling out graphically, right, and for – I think it's more than 6,500 companies now that we're covering. And because, yeah, that philosophy about expectations is so – I don't want to sound so – I mean I keep bringing it back to the way we do our research, but man, I live and breathe – I live and breathe research, so what can I say?

Dan Ferris:                 Hey, man, at some point in life you've just got to say this is who I am and this is what I do. And what you do is pretty cool, so of course you're going to – that's why we have you here, Joel.

Joel Litman:                Thank you, sir.

Dan Ferris:                 We have you here to talk about that.

Corey McLaughlin:    Right.

Dan Ferris:                 You know?

Corey McLaughlin:    So, Joel, who – who –

Joel Litman:                [Inaudible Crosstalk]

[Laughter]

Corey McLaughlin:    Yeah, I'm looking forward to this research coming out. It's sounds exciting. It sounds like it should be appealing to a lot of people. You know, 'cause we hear about, you know, the hyperscalers, and how much money they're putting into AI spending and all of that, and it sounds like you're getting into that subject a bit deeper.

Joel Litman:                Yes. It's interesting, when you look at the hyperscalers, a lot of what – so the statement of cash flow says here's capital expenditure. That capital expenditure is a fraction of the actual investment that the hyperscalers are making. It's a fraction, meaning the amount that they're actually putting is underreported. For instance, R&D is not included in [capital expenditures ("capex"}]. If they are leasing warehouses and leasing land and leasing super computers, that's not included under capex. That's not a capital expenditure under GAAP accounting. We're like, of course it is. They just added 500 hectares of potential solar power, whatever, land or whatever, to the thing, or whatever they're buying into or all these data warehouses they're leasing, and in actual physical warehouses they're leasing, and that's not included. None of that is included under capital expenditure and GAAP accounting, right? It's a complete miss.

So we have this hyperscalers chart that we show, and when you see it, the growth is far more than people are saying, which means it'll be pulling energy at a much, much higher level than I think people are saying. People think like there's this energy magic that'll just happen, and the energy will appear that the U.S. economy needs. And no, one of our big calls is, no, you're going to see electric power producers being able to start pricing at a premium. And it's one of the areas that we think you're going to see growth with stocks that may look a little bit, all right, you know, 24, 25 times earnings. And we're like we may look a year from now, those companies are trading at 35 times earnings, on earnings growth that's, you know, 20% higher.

Those are the kinds of really interesting ideas that pop up in these kinds of markets that you can find, fundamentally. And Corey is, thanks for tuning in when we release that research.

Corey McLaughlin:    Yeah, I'll be watching. Yeah.

Joel Litman:                I think September.

Dan Ferris:                 September 17. What do you call this? Is this your AI report or what is it?

Joel Litman:                "Growth and Mo." Growth and Momentum. Growth and Momentum. Because it's not just AI. U.S. supply-chain infrastructure with all these businesses that are having to get built. If someone puts up a new industrial plant because they're going to start making widgets in the United States because they want to avoid the tariffs and they're not going to make it overseas. You need an entire infrastructure to support that business. It's not like they just put up a company and whatever. You need everything to support it. That means more roads, more bridges, better bridges, better roads, and all the other cabling and telecom infrastructure that is going to have to go into support this unbelievable renaissance that we're seeing, that we're in the early innings of. So when you think of that, there's all kinds of Growth and Mo places to be looking at, Growth and Momentum. And that's a big piece of that research that we're showing on in just a few days, I guess.

Dan Ferris:                 The Gro Mo Report, it sounds like.

[Laughter]

Corey McLaughlin:    Growth and Mo.

Joel Litman:                Growth and Mo. Our clients – our institutional clients will say and Growth and Mo, so I'll stick with the way our clients talk.

Dan Ferris:                 There you go. All right, so we'll look for that on the 17th. And is there like a presentation with it or something that folks can sort of - are you just going to publish this, or is it going to be a presentation, like a video presentation with it or anything?

Joel Litman:                Oh, we're going to – I actually, because as a veteran of the space, Whitney Tilson, Whitney and I are going to actually have a nice discussion about it. I won't even say debate, because I think he's lining up where our research is showing, but we're going to discuss it on that program. No, so it'll be a big event. It'll be a big event.

Dan Ferris:                 All right. Good. Yeah. All right. We'll have to give folks a link to sign up so they can watch it.

Joel Litman:                Yes, sir. I'll get you that.

Dan Ferris:                 We've got to do that. All right.

Joel Litman:                Of course.

Dan Ferris:                 So we've hit – it's time for our final question. Same question for every guest, no matter what the topic, even if it's a nonfinancial topic.

Joel Litman:                I love it.

Dan Ferris:                 Same question. And you've answered it before, but I'll restate the question just in case you don't remember. And if you've already said it, by all means, feel free to repeat it. The question is simple, it's for our listener, if you could leave them with one takeaway, with one thought today, Joel, what would you like it to be?

Joel Litman:                Dan, you know it's an easy one, and anyone that reads my work sees it every day.

Dan Ferris:                 [inaudible] yeah.

Joel Litman:                Love, joy, and peace, every moment. And you just pick one. Right? I don't know that you can do all three. But there are some days that I'm just like I am so blindsided with things that happen and frustrated and I don't know what to do, except to say, "I'm just going to find some peace in it." And just radical acceptance, this must be the way it is. And there are other times where I'm working on something and I couldn't be more loving and caring about that situation, whatever it is, where I'm just like so into it – and other days where something just happens that it's such a nice surprise, you just experience pure joy. And all I'm thinking is – and all I'd say is the more we focus on that love, joy, and peace, the more we create our future in a way, that whatever our future is, future finance, future of accounting, future of our families, our relationships, the more love, joy, and peace we exude, the more our lives become loving, joyful, and peaceful by default. Well, what else are we on this planet for, other than to experience that?

Dan Ferris:                 Right. Great answer. And I know – I want our listeners know I can always rely on Joel for a philosophical answer and a good spiritual philosophical answer. And I knew I was going to get one. Not disappointed. Yes.

Joel Litman:                Oh, thank you. [Laughs]

Dan Ferris:                 Love, joy, and peace, love it. I might write that down and just hang it on my desk here. So thanks for that, Joel, and thanks for being here, man.

Joel Litman:                Oh, cool. Dan, Corey, great to be on. Thanks. And just great what you're doing, too. You heard me say it many times, but you've been getting some great guests, great conversations. Really, really, I love your show. So thanks for having me be a part of it. Really.

Dan Ferris:                 Glad to hear it.

Corey McLaughlin:    Thank you. Yep.

[Music plays]

Announcer:                 On Wednesday, September 17, Joel will unveil the biggest investment breakthrough in the history of his firm. It helps you to isolate potential 100% winners with startling accuracy, and it is directly linked to the hundreds of stocks that have doubled in just the last six months alone. More importantly, for you, it could help you see potential gains of 500%, 800%, even 1,000% by this time next year. Although all the top 20 global investing houses follow Joel's work, his breakthrough market discovery is reserved for those who tune in live on September 17. That's this Wednesday. Best of all, you can beta test this new breakthrough right now free of charge, and punch in your existing holdings to see whether they're destined to double or nosedive. I strongly recommend you try it for yourself immediately. Head to www.2025Breakout.com. Again, that's www.2025Breakout.com, where you can get all the details directly from Joel's team. I consider this must-see for all investor our listeners. One last time, that's www.2025Breakout.com. Don't miss it.

Dan Ferris:                 Always great to talk with Joel. The first thing I did when we stopped talking to him was do a quick Bloomberg screen to find out how many companies doubled since January 1st, because he was talking about 300. Well, he must be making like a market-cap cut off, like a really high market cap, like $50 billion or something, because I haven't gotten up that high yet, and it was like 600, around $25 billion it was like 600. So lots of companies have doubled year to date, and a lot more, I'm sure, he was saying since April 8, Tariff Tantrum Day.

Corey McLaughlin:    The post-"Liberation Day" lows, yeah.

Dan Ferris:                 Liberation Day. Tariff Tantrum Day is what I call it. Anyway, great to talk with the guy that's got all that data in his head, isn't it?

Corey McLaughlin:    Yeah. For about a week there. Yeah, that was cool. I mean, and the more I hear people, yeah, with him it was obviously rooted in data, and then a couple other people I like to listen to, too, about just where we are with AI, the more I think, oh, we've still got – like eventually things may get out of control market-wise. No pun intended. You know, and like we're in dot-com, you know, bubble – I'm not afraid to say bubble – bubble levels.

Dan Ferris:                 Me neither.

Corey McLaughlin:    But I don't know, it just seems like there's still a lot more buildup that's happening till we get to that point, and it may continue for years. I don't know. But every time you think, "Hey, maybe this is slowing down or something," or it should, you know, I hear about some new chip from the video coming out that makes creating robots easier for people. [Laughs] So I don't know, I think maybe we're still even earlier than we think in this. And so to hear him say it too – not like that, but his take on AI was interesting to hear as well.

Dan Ferris:                 Yeah, I like to hear Joel's take on anything that is moving revenues and earnings and capex and research and development, all the – and margins, too. We didn't even talk about margins. Because I know I have to talk to Joel, because he's got data on thousands and thousands of them, like at his fingertips, and he's got a unique accounting-based, like real accounting-based perspective, not GAAP accounting perspective. So he's sort of like one of these people that you need to check in with him, because he's one of the people who kind of knows the real story. So that's why I love having him on the show, and that's why we keep bringing him back. He's one of our people that we have to check in with, just so that we have the right perspective.

And I wish we'd had him on, like the week of April 8. Then we'd really look smart. [Laughs] We should have had him on the week after that bottom and hear him tell us that it was all going to take off like a rocket, which of course it did.

Corey McLaughlin:    Yeah.

Dan Ferris:                 Unexpectedly.

Corey McLaughlin:    Well, we can hear him now. You can hear him –

Dan Ferris:                 That's right.

Corey McLaughlin:    You can hear him now at this new research he's got coming out, and also, you know, he's always at our conference as one of our corporate affiliates. So he's always a popular speaker there as well, so.

Dan Ferris:                 Yep. Great guy, smart guy, great guest. Always a great talk. So it was a really, really fun interview and a really, really fun episode of the Stansberry Investor Hour. I hope you enjoyed it as much as we really, 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 www.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.

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For my cohost, Corey McLaughlin, until next week, I'm Dan Ferris. Thanks for listening.

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