On this week's Stansberry Investor Hour, Dan and Corey are joined by Eric Fry. Eric is the editor of multiple newsletters at our corporate affiliate InvestorPlace, including Fry's Investment Report and The Speculator.

Eric kicks off the show by discussing his time working alongside legendary financial publisher Jim Grant and his top-down approach to investing. His strategy involves finding industry leaders that have fallen on hard times but still have favorable underlying dynamics. Eric says that with this method, he has collected 100%-plus gains in the past few years in companies like Amazon and Corning. He also talks about investing in foreign stocks, the unbalanced risk in microcaps that many investors don't consider, and three industries he stays away from. He advises...

Invest in what you know. Start at least there... If you know something about the industry – a little bit even – you'd be able to say, "OK, that makes sense. Tesla's selling more cars than it was before. Tesla's selling less cars than it was before. I kind of get that." You have to have some basic knowledge of what you're investing in, or you're not going to know when you're wrong and when to get out.

Next, Eric shares his time horizon for investing, whether he recommends adding to existing winners, his past experience with bitcoin, and the advice he gives his subscribers on position sizing and risk management. He notes that investors will often overstate their risk tolerance and understate their investment goals, which can cause problems. This leads to a conversation about the advantages of long-dated options versus short-term options...

The fun thing about those long-term ones is that it forces... discipline... It forces you to stay in the position. So if you buy a long-term option and it goes against you immediately, well, you could sell it at a loss. But why not just hang in there? And many, many times I've had options that will go down 50% or 60% or 70% but end up being a double, a triple, or a quadruple. Hard to do that if it's a stock. If you're in a stock that falls like that, you're panicking and you want to bail out. But in an option, it's much easier to stay in there... for an ultimate payout.

Finally, Eric breaks the world of AI investment down into four groups: builders, enablers, appliers, and survivors. He says most of his current investment ideas are focused on the survivor category – and he names three such stocks he likes today. This includes a for-profit thrift-store chain, an English beverage company with rising U.S. sales, and an international food-delivery company that just became profitable. Speaking about the AI space, Eric observes...

As a professional investor, I'm not finding a ton of opportunity in... the AI builders and the AI enablers... There are lot of great companies there, but the prices are very inflated... I am finding opportunity in the other two categories, the AI appliers and the AI survivors. And many of the survivors are so overlooked... People tend to think that in the middle of a boom like this, you must be close to the boom in order to make money. And actually, history tells the opposite tale.

Click on the image below to watch the video interview with Eric right now. For the audio version, click "Listen" above.

(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Eric Fry is an author and the editor of the Fry's Investment Report, Eric Fry's Smart Money, and The Speculator newsletters at InvestorPlace. Eric has specialized in international equities for nearly two decades. He got his start as a brokerage assistant with E.F. Hutton. And after more than 10 years as a professional portfolio manager, he joined James Grant's prestigious Wall Street-based publishing operations. There, Eric helped launch Grant's International before starting his own boutique firm, Apogee Research.

In 2016, Eric won the Portfolios with Purpose competition – Wall Street's most prestigious investment competition – beating 650 of the biggest names in finance with a 12-month return of 150%. In professional circles, Eric is known for his extraordinary long-term track record, which includes numerous 10-bagger calls. His record on the short side of the market is just as remarkable, though, as he successfully shorted numerous technology stocks before the dot-com bust. Eric's work has been published in Time magazine, Barron's, the Wall Street Journal, Bloomberg Businessweek, USA Today, the Los Angeles Times, and Money.