In this week's Stansberry Investor Hour, Dan and Corey welcome Stephen Hester to the show. Stephen is an editor at our corporate affiliate Wide Moat Research.

Stephen kicks things off by breaking down the Federal Reserve, interest rates, bonds, and how all of them are intertwined. He also clears up some misconceptions that folks might have regarding the Fed and the markets. He follows up by explaining his strategy for investing in options. Contrary to what some might believe, Stephen says that it's important to know about a company before its options...

The main focus I have [is] on the underlying company – the option comes last. If the company is rock solid and I don't understand what the key risks are, then you're going to get a nasty surprise when you sell put options on something you don't understand and it backfires.

Next, Stephen warns about the temptation to sell premiums on trending companies. He says that successful trades might cause folks to focus on potential high gains rather than the fundamentals. Then he discusses the different methods of knowing where the yields for options ought to be. And he mentions the struggles that individual investors might have with finding good opportunities...

You can spend two minutes and find 100 interesting stock positions. I challenge you to find that in bonds. The bonds can be tough, especially individual bonds or ones that don't yield... Spending the time to find an individual bond that just pays kind of a normal amount. It's a waste of time... I try to have a... big opportunity set so I can try to find the most interesting, best risk, just returns for the customer.

Finally, Stephen shares one company that he's really interested in. It's a company that he has studied and researched in the past, and it remains a strong business. And Stephen mentions that one of the biggest things he hopes he can do for readers (apart from helping them find worthwhile companies to invest in) is to educate them. He says his goal is to help provide them with the tools to invest in the years to come...

Everything I do has a strong education component. I hope at least that's the most valuable thing I actually provide. Not that I don't want the investments to work out – you guys have heard how much work I put into it. But, yeah, teaching the person, I think, is the most important because that's going to help their decision-making, hopefully, the next 20, 30, 40 years.

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(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Stephen Hester is an editor at our corporate affiliate Wide Moat Research. He started his career in the hedge-fund industry before moving on to large financial institutions. His latest role was as director of due diligence at two $200 billion-plus independent broker/dealer networks. In the past decade, he has presented institutional-quality analysis on commercial and residential real estate, tax-driven special situations, private equity, private debt, and traditional and renewable energy in more than 100 investment committees.

Stephen also authored publications on regulations, private and public company investment analysis, and advanced engineering applications. He has a bachelor's degree in economics and a master's degree in energy and earth resources from the University of Texas at Austin.