At Porter & Co. we are determined to be your best source of investing, economic, and financial insight, and your first choice for information about what to do with your money… in the entire world, bar none.
This is Porter & Co.’s Sunday Investment Chronicles. Every week, the Porter & Co. research team pores over thousands (and thousands) of articles, reports, social media posts, analyses, regulatory filings, and anything else we can get our hands (and eyes) on to understand what’s happening in the world of investing and finance – and to uncover the most original, compelling, and double-head-fake ideas…
… and we curate the best of those here. We do it all the old-fashioned way: Hours of reading and brainpower (no AI curation here). We read everything – for you.
In Case You Missed It… What We Published Last Week
On Monday, Porter painted a picture of a hypothetical middle-class American family – spending more than they earn and loading up on debt of various forms. He then compared that family’s situation to that of the federal government:
That’s exactly the real-life situation with our looming Social Security and Medicare unfunded liabilities. They now total over $100 trillion!
People believe, falsely, that these promises are funded in some way, that the money they’ve paid into the system over the years belongs to them and will be there for them. That’s all nonsense. The money was never invested. And you don’t own the rights to anything… What the system “owns” are the bonds of our bankrupt government. And those promises will start coming due before 2030. There’s zero chance we can live up to these promises.”
On Wednesday, Porter explained that Vanguard and Fidelity have brainwashed people to believe that prudent, conservative investing is defined by “indexing” – buying a huge basket of stocks, to minimize volatility. But, he wrote, that is complete nonsense.
Instead, he said to find businesses that can produce very high returns on invested capital and therefore have high free cash flow margins.
I call this characteristic capital efficiency.”
Over the last decade, following this capital efficient approach has produced returns of almost 400% (17.4% annualized), outpacing the S&P 500’s 242% return by a wide margin.
On Thursday, The Big Secret On Wall Street team released a comprehensive guide to investing in stablecoins (“How To Own Crypto And Not Get Stiffed”), which Porter had written about last week. We warned that investing in crypto can be risky:
In 2024, stablecoin usage grew by more than 30% to nearly $28 trillion in total transaction volume worldwide. As Porter noted, this figure already exceeds the total annual transaction volumes of Visa (V) and Mastercard (MA) combined.
Yet despite this impressive milestone, the direct investment options in stablecoins remain extremely limited.”
We went on to caution…
Cryptocurrency criminals also employ sophisticated phishing techniques, deceiving victims into willingly handing over their private keys. Others rely on social engineering – exploiting human psychology to manipulate targets into revealing sensitive information. And some crypto thieves resort to the brutal method known as “wrench attacks,” physically threatening or harming crypto owners until they surrender their digital assets…
Given these less-than-ideal options for direct investment in stablecoins, we believe the safest way for most investors to gain exposure to this trend is simply to own Bitcoin.
Bitcoin benefits from stablecoin adoption through multiple direct and indirect channels.”
Also on Thursday, Marty Fridson released his latest market analysis in Distressed Investing on the innovations made over the last few decades in distressed-debt investing. He wrote:
It’s by no means essential to master all the details of financial restructuring to enjoy attractive returns on distressed debt. The deals that head off bankruptcy filings emerge from negotiations among corporations, large institutional investors, hedge funds, private equity firms, banks, and private credit lenders. As an individual investor, you can ultimately benefit from the outcome without being involved in the bargaining process.”
Porter ended the week by demonstrating the importance of constructing a low-volatility portfolio that enables investors to use leverage to propel returns higher, highlighting the 54% return of his own portfolio year to date…
Porter will release a video on July 4 to Partner Pass members demonstrating his three principles to using leverage on a properly constructed portfolio. If you are not already a Partner and would like to gain access to this video and everything that we publish at Porter & Co., call Lance James, our Director of Customer Care, on Monday: 844-933-9986… You won’t regret it.
The Best Things We Read Last Week
Out of the hundreds of sources of investment, finance, and economics news and insight we regularly review – our Bloomberg terminal, hedge-fund letters, annual reports, the financial news media, Securities and Exchange Commission (“SEC”) filings, investment newsletters, newspapers, X (Twitter) threads, conferences, podcasts, and more – here’s what we’ve read that we think you might find interesting.
Markets And Economics
The Legends Speak
Investment Ideas
Government Bonds And Credit
Real Estate
Energy
Bitcoin And Crypto
Here’s What You Missed This Week
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