The Hottest Sector to Find Beaten-Down Value

Stansberry Investor Hour

Stansberry Research

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4.4 • 677 Ratings

🗓️ 28 August 2023

⏱️ 65 minutes

🔗️ Recording | iTunes | RSS

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Summary

This week in Stansberry Investor Hour, Dan and Corey are joined by their Stansberry Research colleague, Bryan Beach. Bryan is the editor of Stansberry Venture Value, which is Stansberry's small-cap value newsletter. Dan and Corey kick off the podcast by dissecting the latest in the market, starting with the recent Republican political debate and Federal Reserve Chair Jerome Powell's presence in Jackson Hole, Wyoming. (00:00)

Bryan then joins the conversation to break down his value-investment approach. This approach extends across industries and is guided by the pursuit of "value nuggets." One of Bryan's central investing tenets involves identifying companies that have experienced significant declines in value. And right now, the Software as a Service ("SaaS") space is a prime example of such undervaluation. (20:53)

The conversation then shifts to Bryan's previous role as an accountant. He recalls Wall Street's historical inclination toward upfront software-purchase models, which encompassed future maintenance packages and fees. But Salesforce changed all that in the early 2010s by reshaping the software landscape. The transition toward the SaaS model gained remarkable traction between 2015 and 2021. (27:50)

More recently, SaaS companies have experienced a downturn in popularity. But Bryan sees this as an opportunity. Bryan and Dan go into how if Warren Buffett were a young investor today, he would likely be captivated by the software sector. The two draw connections between Buffett's historical interest in newspapers and the appeal of software business today. Bryan highlights their affordability and upward momentum, making them prime investment candidates. (46:00)

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Transcript

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0:00.0	Hello and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and the Ferris Report, both published by Stansberry Research.
0:08.9	And I'm Corey McLaughlin, editor of the Stansberry Daily Digest. Today we talk with Brian Beach, editor of our Stansberry Venture Value newsletter.
0:17.0	And today, Corey and I will talk about the Republican presidential debate, Jackson
0:22.2	Hall, Wyoming, and long-term investing. And remember, if you want to let us know it's on your mind,
0:27.8	email us at Feedback at InvestorHour.com. That and more right now on the Stansbury Investor Hour.
0:42.8	Well, I have to ask you straight up.
0:44.0	I mean, did you watch the debate?
0:47.5	Do you care at all about the Republican presidential debate?
0:48.5	I do care.
0:51.8	I did not watch any of it for two reasons.
0:59.3	One, it's very early on in this whole process and, you know, politics is just,
1:05.6	you know, there's never none of it. So there's plenty of time to get involved in it further. And second, I've been away for a couple days and, you know, trying to tune out a little bit, but not tuning out
1:12.3	enough to skip our episode here. So yes, yes, and no, I, I read a couple things on the debate.
1:17.7	And, you know, without Trump there, though, it's kind of who's still the leader by, you know,
1:23.3	in polling by, you know, a wide margin, which people still seem to not want to acknowledge.
1:29.9	I mean, like, you know, acknowledge that that's the obvious elephant in the room.
1:36.0	I know they talked about him a lot, but without him there, it's a little, I don't know,
1:40.5	it seems like having a playoff game with one team or something in a big sporting
1:46.3	event. Yeah. I mean, as far as the actual outcome, the election goes, I mean, I agree with you.
1:52.5	It's early on. Who cares? I'm not even thinking about it. And to me, I don't think it matters who gets
1:57.6	elected anyway. I honestly don't. But I will say this. If
2:01.7	Vivek Ramoswamy had a snowball's chance in hell of getting elected, he actually, he said
	...

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