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
In Monday’s Daily Journal, titled “Dumb And Dumber Leading Us To The Apocalypse,” Porter wrote that “President Donald Trump’s tariffs, if left in place, will destroy the global economy. And this wouldn’t be the first time… ” He added: “Alas, no matter what the Orange Man says, tariffs are not beautiful. They are taxes! Even worse, they impede the most vitally important economic exchanges, where comparative advantages create tremendous wealth.” We received a flurry of emails – in favor of his comments, disagreeing with his opposition to Trump’s tariffs, and critical of his using the term “Orange Man.” We published a handful of those comments on Wednesday.
Porter invited Distressed Investing’s Marty Fridson to provide insight on the market turmoil for Wednesday’s Daily Journal. Marty wrote that fears of stagflation – high inflation, high unemployment, and economic stagnation – are emerging: “In the early 1970s, stagflation struck fear in observers of the economic scene. Market watchers then were intellectually invested in the Phillips Curve, which states that the higher the unemployment rate, the lower the inflation rate – and vice versa… So high inflation coinciding with high unemployment? Couldn’t happen, many argued… until it did happen.”
During the 1973-1975 recession, he reported, the monthly unemployment rate rose as high as 8.6%, compared with a 1950-1975 average of 4.9%. During that recession, inflation ran at a staggering 11.1% annual rate. He concluded on a positive note…
But some highly profitable opportunities will arise for those who know what to look for and who can ride out the volatility they should expect along the way.”
Then, on Thursday, Marty released a recommendation for readers of Distressed Investing. It’s a bond issued by a relatively new software company that caters to the automotive industry. After going public, the company’s revenue declined and its stock price plunged. “Now,” Marty wrote: “new management is doing the right things and beginning to turn the company around. We believe this past turmoil has created an opportunity to buy its bond at a very favorable yield.”
On Thursday, we sent to Big Secret On Wall Street subscribers a recommendation, in an issue titled “The Baby Berkshire,” about a conglomerate of hotels, energy, and insurance businesses. While it has consistently grown at double-digit rates over the last 80 years, it is severely undervalued, mainly because people don’t know about it. We added:
Another thing we like is how the company has proven to be an excellent steward of investor capital by achieving 3x growth in net income, despite cutting back on capital expenditures (capex) over the same period. The capex investments into one subsidiary have steadily dropped from $487 million in 2018 to $365 million last year, or a 25% decline.”
We ended the busy week in the market with Friday’s Daily Journal… Porter wrote: “We are in the early stages of a massive financial reordering that will end the U.S. dollar’s status as the world’s only reserve currency.” To deal with it, he suggested:
Stick with us here. In our Journal, I’ll continue to share extraordinary opportunities, like I did 10 days ago when I pointed out that Rémy Cointreau was trading well below the value of its inventory alone!”
He concluded…
Finally, I highly recommend that you organize your portfolio in a structure that’s similar to Porter’s Permanent Portfolio. This structure is designed to produce very consistent results because the four recommended asset classes are non-correlated. The strategy works: despite the markets’ radical volatility this year, our Permanent Portfolio is up a hum-drum, nothing-to-see-here 3% so far this year. Plus, having the 25% in cash will come in handy when, at some point, there are great opportunities in distressed debt.”
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
SPONSORED BY ONEBLADE: A $10 Million Shave?
Ten years ago, a single shave cost Porter $10 million…
It all started in Rimini, a remote Italian village on the Adriatic coast. In a dusty, old barbershop that could’ve been a front for the mafia, Porter experienced what he calls the perfect shave. Ever since that shave, Porter became obsessed with getting the same shave at home. Ten years and $10 million later, he created OneBlade – the world’s finest safety razor. A razor that redefines shaving perfection. Today, you can try the OneBlade Genesis, use STANS15 for 15% off, exclusive for Porter & Co. readers.
Government Bonds And Credit
Special Situations: Activist Investing, Spinoffs, Arbitrage, Mergers and Acquisitions (M&A), And More
P.S. My Biggest Mistake
I’ve made plenty of mistakes over the years.
But frankly, the one I talk about in this short video might just be my biggest.
Not only did this mistake cost me a lot of money, but it left egg on my face, too.
But here’s the thing: Like most mistakes in life, it also provided me with an invaluable education.
In fact, that’s the reason I recorded this short video for you… so you don’t have to make the same mistake I did.
