Episode 429: Use Common Sense and Avoid the Echo Chamber

Use Common Sense and Avoid the Echo Chamber

Share:

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey welcome Chris Irons to the show. Chris started writing about finance back in 2013 under the moniker Quoth the Raven and was a speaker at the 2019 Stansberry Conference.

Chris kicks things off by addressing tariffs and shares how nominal prices will continue to rise regardless of what we do. He says the cycle of crashes and money-printing has continued to accelerate and create bigger distortions and drops. And he discusses passive bids that pile into the S&P 500 Index and cause valuations to become stretched. He warns against overexposure to the fund due to potential drawdowns in any of the "Magnificent Seven" that could take the index down with them...

Every once in a while... things happen, something unexpected happens, a key person at the top dies, or a company commits fraud, or there's some type of major product liability or something... [It] could be the impetus for exactly what sets off a cascade lower just by virtue of its weighting in funds like these. And so we're really in a situation where we're putting so many of our eggs all in seven baskets. And that's frightening.

Next, Chris states that the market has gone "all in" on options instead of equities, creating a state of leveraged gambling. And he predicts that things have changed so much that despite the beliefs that there will continue to be government bailouts or other solutions, this cannot continue. Something will break eventually. However, it's not all doom and gloom. Chris says you just have to find where there's good value...

I'm not a pessimist, I'm just trying to put together a clear picture of exactly where we stand based on common sense and not from this echo chamber that you see... [They're] just making excuses on why people should be buying now, which is a ridiculous thing to do because these people are... backfitting [their] thesis as to why we should buy to the ridiculous price, instead of looking at the price and making up their mind.

Finally, Chris shares advice on how to hedge any large market crashes based on his own strategies. He also cautions against buying into assets in blind hope of reaching a bottom. If a company is burning money without generating any cash, there won't be a bottom to bounce off of...

What people don't realize, and a lot of dip buyers don't realize, is that when you're buying something that is burning cash, or you're buying something pre-revenue, or you're buying something that's unprofitable, or you're buying something that doesn't have any, you know, that's an insolvent on its balance sheet, essentially, there is no bottom... And with insolvent companies and companies that don't generate cash, they will die when the market pulls back. And that's just how it goes.

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

(Additional past episodes are located here.)

The transcript is coming soon.


This Week's Guest

Chris Irons started writing about finance and "pulling the curtain" back on the B.S. of the industry under his moniker Quoth the Raven in 2013. Since then, he has been quoted in the Wall Street JournalFinancial Times, and Barron's, has made SeekingAlpha's list of Top Bloggers, Forbes' 100 Twitter Accounts in the Financial World to Follow, and has shared the stage as a speaker with acclaimed investors David Einhorn, Andrew Left, Ben Axler, Jon Najarian, and many others.

Subscribe to Stansberry Investor Hour for FREE
Get the Stansberry Investor Hour delivered straight to your inbox.
Recent EpisodesView All Episodes

Buy the AI Boom's Quiet Beneficiaries

Podcast cover for Episode 432: Buy the AI Boom's Quiet Beneficiaries
Marc Chaikin, the Chaikin Analytics founder and a 50-year Wall Street veteran, joins Dan and Corey this week to discuss what's happening with the bond market, the three factors that are driving the stock market today, and which companies and sectors will be quiet winner of the AI boom.
Podcast cover for Episode 432: Buy the AI Boom's Quiet Beneficiaries

Today's Top Short Sells, From AI Victims to Chinese Scams

Podcast cover for Episode 431: Today's Top Short Sells, From AI Victims to Chinese Scams
The Bear Cave editor Edwin Dorsey joins the podcast this week to discuss the best opportunities in short selling today, including companies being disrupted by AI, traditional retailers that sell natural diamonds, and U.S.-listed Chinese companies that are being pumped and dumped.
Podcast cover for Episode 431: Today's Top Short Sells, From AI Victims to Chinese Scams

The Pros Have Misread the Market

Podcast cover for Episode 430: The Pros Have Misread the Market
On this week's podcast, Joel Litman argues the market is not as bad as the majority believe... urges investors to ignore the "fear of getting in"... and gives a peek at his new research.
Podcast cover for Episode 430: The Pros Have Misread the Market

Management Might Be the Top Clue to Your Next Investment

Podcast cover for Episode 428: Management Might Be the Top Clue to Your Next Investment
On this week's podcast, Old West Investment Management Chairman Joe Boskovich shares a strategy to finding good deep-value companies... explains why you should keep your eyes on precious metals... and warns about selling your stocks too soon.
Podcast cover for Episode 428: Management Might Be the Top Clue to Your Next Investment
Back to Top