How It All Works (A Few Short Stories)

Our Stansberry Research conference is next week... An essay from one of our guests, Morgan Housel... Everything is for sale... Too many theories try too hard to be facts... Resume and eulogy virtues... Mark Twain and Henry Ford's wisdom... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] Our Stansberry Research conference is next week... An essay from one of our guests, Morgan Housel... Everything is for sale... Too many theories try too hard to be facts... Resume and eulogy virtues... Mark Twain and Henry Ford's wisdom... --------------------------------------------------------------- Editor's note: We're just a few days away from the start of our annual Stansberry Conference next week in Las Vegas, and I (Corey McLaughlin) couldn't be more excited. Our editors and analysts, special invited guests, and many of you – our subscribers – will gather for three days of insightful market discussion, exclusive trading ideas, and in-person mingling at the Encore at Wynn Las Vegas. Among our presenters is a person who is writing to you today: Morgan Housel, one of my favorite financial writers and author of The Psychology of Money. The book has sold more than 3 million copies and has been translated into 53 languages. I shared a contribution from Morgan in the Digest [a couple months ago](... With our conference now upon us, I want to share another – to give you a taste of the kind of things you can expect to hear next week. Because if you're not going to make it to the event in person (tickets are already sold out), good news: You can catch all of the presentations on our livestream. That's right, you can be "in the room" from the comfort of your own home or office or anywhere else, hear from your favorite Stansberry Research editors and analysts plus our guests, and get access to video replays of everything, too. [Click here for more information about our streaming package now](. With that, enjoy today's contribution from Morgan, which he originally published earlier this year on his blog for Collaborative Fund Management, an investment firm where he is a partner. He gave us his blessing to run it here today... --------------------------------------------------------------- A few short stories whose lessons apply to many things... Author R.L. Stine is one of the bestselling authors of all time. His Goosebumps series of scary kids' books have sold over 400 million copies. But horror wasn't his first act. Stine spent the first two decades of his career writing kids' joke books. Scaring people, he discovered, is easier than making them laugh. "Everyone has a different sense of humor, but we all have the same fears," he said. "Kids are all afraid of the dark, afraid of being lost, afraid of being in a new place. Those fears never change." Everyone has different tastes, but emotions – especially fear and greed – tend to be universal. --------------------------------------------------------------- Physical attractiveness is something everybody intuitively understands but struggles to put into words. What makes an attractive face? It's hard to describe. You just know one when you see one. Several studies have tried to crack the code, the most fascinating of which I think is the idea that average faces tend to be the most appealing. Take 1,000 people and have a software program generate the average of their faces – an artificial face with the average cheekbone height, average distance between eyes, average lip fullness, etc. That image, across cultures, tends to be the one people are most likely to judge as the most attractive. One evolutionary explanation is that non-average characteristics have the potential to be above-average risks to reproduction. They may or may not actually impact reproductive fitness, but it's almost like nature says, "Why take a chance? Go for the average." People love familiarity. That's true not just for faces but products, careers, and styles. It's almost like nature's risk-management system. --------------------------------------------------------------- William Vanderbilt was one the richest heirs to ever live. But hold your envy – his life was hardly a joy. Just before he died in 1920, Vanderbilt told the New York Times, "My life was never destined to be quite happy. Inherited wealth is a real handicap to happiness. It is as a death to ambition as cocaine is to morality." The interesting thing is that the other end of the spectrum – an overdose of ambition – may be just as miserable. A half-century before, Mark Twain wrote to William Vanderbilt's grandfather, Cornelius Vanderbilt: How I pity you, and this is honest. You are an old man, and ought to have some rest, and yet you have to struggle, and deny yourself, and rob yourself restful sleep and peace of mind, because you need money so badly. I always feel for a man who is so poverty ridden as you. Don't misunderstand me, Vanderbilt, I know you have $70 million. But then you know and I know, that it isn't what a man has that constitutes wealth. No – it is to be satisfied with what one has; that is wealth. --------------------------------------------------------------- Building the transcontinental railroad in the 1860s was too costly for any private company to manage. So Congress offered subsidies: $16,000 per mile on flat land, and up to $96,000 per mile in the mountains. As to what was considered "flat" vs. "mountain" land, Congress relied on the opinion of geologists. One particularly malleable geologist named Josiah Whitney was persuaded to declare that the Sacramento Valley – flat as a pancake – was actually the geological beginning of the Sierra Nevada mountains, and was therefore a mountainous region. The railroad companies were so grateful for the sleight of hand they persuaded the California legislature to rename the state's tallest mountain Mount Whitney. Everything is for sale. --------------------------------------------------------------- As he neared death, physicist Richard Feynman asked a friend why he looked sad. The friend said he would miss Feynman. Feynman said that he had told so many good stories to so many people – stories that would surely be repeated – that even after death he would not be completely gone. It's similar to the idea that everyone suffers two deaths: Once when they die, and another when their name is spoken for the last time. --------------------------------------------------------------- Chris Rock says teachers provide half of the education at school, bullies provide the other. "And learning how to deal with bullies is that half you'll actually use as a grownup." --------------------------------------------------------------- Think of how big the world is. And how good animals are at hiding. Now think about a biologist whose job it is to determine whether a species has gone extinct. Not an easy thing to do. A group of Australian biologists once discovered something remarkable. More than a third of all mammals deemed extinct in the last 500 years have later been rediscovered, alive. Some were even thriving. A lot of what we know in science is bound to change. That's what makes it great. When a previously known truth is later discovered to be wrong, we should also respect the idea that too many theories try too hard to be facts. --------------------------------------------------------------- David Brooks makes the distinction between "resume virtues" and "eulogy virtues." Resume virtues are things like income, job title, and the size of your house. Eulogy virtues are things like being helpful, being loved, being honest, and being remembered. An irony is that many people aspire for the latter, but put all their effort into the former. --------------------------------------------------------------- I had a professor in college who used to work for Adobe. He said the engineers who built Photoshop had no clue how users would use every filter and tool in the software. They just tried to develop every imaginable way to manipulate an image and had faith that artists and designers would discover a creative use for it. A lot of things work like that – their value to the world isn't entirely known, or predicted, by their creator. Visa founder Dee Hock said, "A book is far more than what the author wrote; it is everything you can imagine and read into it as well." Author James Patterson said, "One of the best things about reading is that you'll always have something to think about when you're not reading." Mark Twain, as he does, put it best when he said: "Wagner's music is better than it sounds." --------------------------------------------------------------- Chronicling the Great Plague of London, Daniel Defoe wrote in 1722: The people were more addicted to prophecies and astrological conjurations, dreams, and old wives' tales than ever they were before or since... Almanacs frighted them terribly... the posts of houses and corners of streets were plastered over with doctors' bills and papers of ignorant fellows, quacking and inviting the people to come to them for remedies, which was generally set off with such flourishes as these: 'Infallible preventive pills against the plague.' 'Neverfailing preservatives against the infection.' Hard times make gullible people, who become willing to believe anything that might help their situation. Comedian Trevor Noah sums this up well when he says, "If you find the right balance between desperation and fear you can make people do anything." --------------------------------------------------------------- Actor Matt Damon once mentioned the downside of tabloids and publicity: "If people can see 16 pictures of you drinking coffee or walking your dog, I think it dilutes the desire to see you in a movie." Early in your career: Wave your arms and be noticed. Later in your career: Most value comes from scarcity. --------------------------------------------------------------- Investor Howard Marks once told the story of an investor whose performance was never in the top half of his peers in any given year. But, cumulatively, over a 14-year period, he ranked in the top 4% of his peers. A trader at bond giant PIMCO shared an idea called "strategic mediocrity": You're never the best in the short run, but you stick around long enough to outlive the competition and come out on top. --------------------------------------------------------------- Pension & Investment Age used to publish a list of the best-performing investment managers. In 1981, Forbes realized that the top-ranked investor of the previous decade was a 72-year-old named Edgerton Welch. Virtually no one had heard of him. Forbes paid him a visit. Welch said he had never heard of Benjamin Graham and had no formal investment education. When asked how he achieved his success, Welch pulled out a copy of Value Line – a publication that ranks stocks by how cheap they are – and said he bought the ones ranked "1" (the cheapest) that Merrill Lynch or E.F. Hutton also liked. When any of those three changed their opinion, he sold. Forbes wrote: "His secret isn't the system but his own consistency." A lot of things work like that: Consistency beats intelligence, if only because it takes emotion out of the equation. --------------------------------------------------------------- Henry Ford had a rule for his factories: No one could keep a record of the experiments that were tried and failed. Ford wrote in his book My Life and Work: I am not particularly anxious for the men to remember what someone else has tried to do in the past, for then we might quickly accumulate far too many things that could not be done. That is one of the troubles with extensive records. If you keep on recording all of your failures you will shortly have a list showing that there is nothing left for you to try – whereas it by no means follows because one man has failed in a certain method that another man will not succeed. That was Ford's experience. "We get some of our best results from letting fools rush in where angels fear to tread." He wrote: "Hardly a week passes without some improvement being made somewhere in machine or process, and sometimes this is made in defiance of what is called 'the best shop practice.'" The important thing is that when something that previously didn't work suddenly does, it doesn't necessarily mean the people who tried it first were wrong. It usually means other parts of the system have evolved in a way that allows what was once impossible to now become practical. --------------------------------------------------------------- Paul Graham once wrote: One way to tell whether a field has consistent standards is the overlap between the leading practitioners and the people who teach the subject in universities. At one end of the scale you have fields like math and physics, where nearly all the teachers are among the best practitioners. In the middle are medicine, law, history, architecture, and computer science, where many are. At the bottom are business, literature, and the visual arts, where there's almost no overlap between the teachers and the leading practitioners. He concluded: "How much you should worry about being an outsider depends on the quality of the insiders." Watch the Stansberry Conference Live! The annual Stansberry Conference & Alliance Meeting is right around the corner. Our editors, special guest speakers, and many of our subscribers will gather in Las Vegas to share their favorite investing ideas and stock picks for the coming months... We've got tons of great speakers lined up, including your favorite Stansberry Research editors and analysts like Dr. David "Doc" Eifrig, Dan Ferris, Eric Wade, Greg Diamond, Dave Lashmet, and Brett Eversole... and invited guests like Morgan Housel, Danielle DiMartino Booth, Josh Brown, Ben Mezrich, and Lance Armstrong (yes, that Lance Armstrong – the former cyclist who now has investing interests). Stansberry Research founder Porter Stansberry will also be there live on stage, too. So will more familiar faces like Meb Faber, Rick Rule, and Empire Financial Research founder Whitney Tilson. If you can't make it in person this year, we've got you covered... Reserve your livestream ticket today and you'll be "in the room" for all the conference action. You can watch the presentations and hear all the recommendations from the comfort of your couch or office – no travel required. Your livestream ticket also includes access to on-demand recordings, breakout sessions, and transcripts of all presentations. You can pause or rewatch as many times as you like through the end of the year. [Click here for more details and grab livestream access today](. --------------------------------------------------------------- Recommended Links: [AI Pioneer Unveils Radical New Type of Investment]( A little-known way to potentially triple your portfolio – in bull or bear markets – is by using a new AI system that can predict stock prices every 21 trading days. From the man who outperformed Warren Buffett over a 15-year span, he calls it "my biggest AI breakthrough in 40 years." [Click here to learn more](. --------------------------------------------------------------- ['If I Had to Pour Every Single Penny of My Retirement Into Just ONE STOCK...']( The former vice president of Goldman Sachs – who called everything from Microsoft's 1,100% surge to the death of the 60/40 portfolio – is now stepping forward with his most explicit message yet: "Make this ONE STOCK the cornerstone of your portfolio." [Get the full story and ticker symbol here](. --------------------------------------------------------------- New 52-week highs (as of 10/9/23): BWX Technologies (BWXT), CBOE Global Markets (CBOE), CME Group (CME), Alphabet (GOOGL), Qualys (QLYS), Shell (SHEL), and VMware (VMW). In today's mailbag, your feedback on our report in [yesterday's Digest]( about the Hamas terrorist group's attack on Israel... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Another probable catalyst of the Hamas attack is the $6 billion [President Joe] Biden recently released to Iran through Qatar. Yes, Qatar has custody of the funds, but also note that the Muslim Brotherhood is financed by Qatar. Most senior members of Hamas reside in Doha. Connect the dots people." – Subscriber Mike O. "Laugh line of the day: 'And if you are to believe U.S. Secretary of State Antony Blinken...'" – Subscriber Gary S. Morgan Housel October 10, 2023 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 1,199.7% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,036.5% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 897.3% Extreme Value Ferris wstETH Wrapped Staked Ethereum 02/21/20 604.3% Stansberry Innovations Report Wade WRB W.R. Berkley 03/16/12 570.0% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 512.5% Retirement Millionaire Doc HSY Hershey 12/07/07 474.1% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 391.0% Stansberry's Investment Advisory Porter TTD The Trade Desk 10/17/19 340.5% Stansberry Innovations Report Engel ALS-T Altius Minerals 02/16/09 307.0% Extreme Value Ferris Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 4 Stansberry's Investment Advisory Porter 2 Extreme Value Ferris 2 Retirement Millionaire Doc 2 Stansberry Innovations Report Engel/Wade --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst wstETH Wrapped Staked Ethereum 12/07/18 1,456.3% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,036.4% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,025.8% Crypto Capital Wade MATIC/USD Polygon 02/25/21 761.9% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 634.7% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Microsoft^ MSFT 12.74 years 1,185% Retirement Millionaire Doc Band Protocol crypto 0.32 years 1,169% Crypto Capital Wade Terra crypto 0.41 years 1,164% Crypto Capital Wade Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Frontier crypto 0.08 years 978% Crypto Capital Wade Binance Coin crypto 1.78 years 963% Crypto Capital Wade Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. 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