In this week's Stansberry Investor Hour, Dan welcomes Rob Spivey back to the show. Rob is the director of research at our corporate affiliate Altimetry. He and his team utilize their proprietary Uniform Accounting strategy to dig through the as-reported numbers in company reports to find their true value.

Rob kicks things off by providing a deep dive into Altimetry's Defense Gold Rush webinar. In short, the Association of the United States Army ("AUSA") is hosting its annual confab in October. And it's not just the U.S. Army meeting up with the defense companies – other countries from around the world also attend with the goal of striking a deal with some of our nation's weapons manufacturers. So this is the best place to learn where the contracts are being made and where the money is flowing. But Rob says that it's not the big businesses you should be paying attention to, but the smaller ones...

We focus on sub-$2 billion names... We found a half dozen [companies] that we think are really, really compelling... These are suppliers who... literally make the hardened transformers that go into military equipment, that if you were going to have a whole bunch more drones that can't be disrupted by electromagnetic pulses or something, you're going to need a whole lot more of this company's equipment.

Next, Rob explains why microcaps are some of the best businesses that provide growth opportunities. The majority of stocks in the S&P 500 and S&P 100 indexes were once microcaps, and if you can find a company that has the same potential and value, your investment could soar. But Rob understands why folks are cautious of microcaps – there are some bad apples out there. That's why he and Altimetry Chief Investment Officer Joel Litman created a "Do Not Buy" list of stocks that investors should avoid unless they make tremendous improvements. And Rob says that we haven't seen such a great opportunity in defense stocks since the 1980s...

[Then-President Ronald] Reagan effectively drove the Soviet Union [into] bankruptcy... Because [he] basically said, "We're going to build 'Star Wars.' We are going to build a dome to protect ourselves from ballistic missiles, and we're going to throw all the money in the world at it"... And the Soviets said, "Well, we got to keep up with them"... And [he] caused them to spend that, to just spend themselves into oblivion... [China is] in the exact same position right now when you look at their financials, [the same position] as where the Soviet Union was in the 1980s, and if we force them to overspend, they will end up in the exact same tough spot that the Soviet Union did.

Finally, Rob discusses the U.S. government's $40 trillion debt and why it's not as bad as people believe. The U.S.'s revenue is able to offset its debt, so it can afford to take on that amount. Additionally, Rob says that every American should want the government to run a reasonable deficit every year. That creates value for us as citizens by growing our economy. And Rob says that folks are mistaken for selling off the hyperscalers just because they've become net debtors...

When Microsoft tells you, and [CEO] Satya [Nadella] tells you, "I literally am sold out for Azure for years, even with my capacity expansion," that has nothing to do with whether or not [you've] got traction between ChatGPT-6 versus ChatGPT-7, nothing to do with it... It's the right thing for [the hyperscalers] to [become net debtors]... Because if you have high-return businesses... you should be borrowing at 5% or 6% every single day to build another one of those [data centers] as long as you think that that demand is sticky.

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

(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Rob Spivey is the director of research at our corporate affiliate Altimetry. He leads a team using their proprietary Uniform Accounting framework to deliver equity, credit, and macro research... often leading to market-beating returns you won't find anywhere else.

Rob's rich background spans his time as a hedge-fund analyst advising some of the largest investment managers in the world. He has appeared on CNBC and been quoted in Barron's, Bloomberg, U.S. News & World Report, and Forbes. He has presented at Northeastern University, DePaul University, and Hult International Business School, and has been a judge at the CFA Institute Research Challenge.