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Jason Simpkins on the Origins of His New Investment Advisory, The Wealth Warrior

June 15, 2018

Gerardo Del Real: This is Gerardo Del Real with Small Cap Stock Digest. Joining me today is the Investment Director of the newly launched Wealth Warrior, Mr. Jason Simpkins. Jason, how are you this morning?

Jason Simpkins: I'm great. How are you doing?

Gerardo Del Real: I am doing great, Jason. Now, you've been a financial reporter and analyst for 10 years. The couple of times that I've had the pleasure of having conversations with you at meetings, the one that has always stuck out to me is your candor, your honesty and your fearless approach to everything, whether we're talking politics, the economy, the markets. So it's a real pleasure to have you on the show.

I mentioned that you recently launched The Wealth Warrior, and I want to talk about that service. Congratulations, by the way. But before that I'd love for you to provide some more details on your background, just kind of how you broke into the business, and what you've been doing this last decade?

Jason Simpkins: Yeah, and thank you very much for taking the time just to talk to me about this. I really do appreciate it. But like I said, or like you said, I started in this business about actually 11 years ago now, in May 2007. I was pretty young. It was like my first real job out of college, but I started reporting, writing about financial news. And it was a real interesting time to do it, because it was right before the financial crisis, so there was a lot of learning on the fly. There was a lot of kind of self-teaching, but I got involved with some projects, and I just kind of kept moving up. I just kept working and researching and writing, and I moved up from writer to editor to managing editor, and then eventually I started my first stock trading service in 2013. That was regarding energy investments. That was like an oil and gas investments service.

And then after about a year or so of doing that, I made the move to the Outsider Club, mostly because I was a huge fan of Nick Hodge and everything that he does. This is my chance here, launching The Wealth Warrior to really start something of my own, my own vision, and now it’s in a place that I'm really, really comfortable and really, really happy to be.

Gerardo Del Real: That's excellent. Let's talk about The Wealth Warrior. It's funny that you mentioned that you cut your teeth reporting in that 2007 era, because I was trading options, leveraged options, in 2007-2008. And I was really smart for a couple of months, and then I got cleaned up and then washed out a couple of months later. It really colored my perspective on risk management, and how risk management should be the first box that gets checked off. Before you look at the potential profits you want to manage the risk to the downside, right? And me working in a high-risk sector, the junior resource space, that era was critical to my approach. I would love to hear how that crash affected your approach to what you're doing now. And then let's talk about The Wealth Warrior and the overall synopsis there.

Jason Simpkins: Yeah. I mean, that crash to me, that was definitive. And it's crazy in some capacity, because a lot of people just seemed to have moved on from it, the way the stock market rebounded, the way the housing market kind of came back to life. We still have absurdly low interest rates, but by and large people have kind of moved back. They've stopped worrying about their retirement. They've stopped worrying about losing their house. I never forgot that. I never got over that, and I don't think I ever will.

Coming in every day and writing about it, and reading about it, and seeing how close to the brink the US and the global economy was, that was terrifying. You were seeing guys come out of meetings, like Timothy Geithner and Ben Bernanke, these guys were coming out looking like they'd just seen a ghost. I look at today's market, and sure, I love a 10-year bull market. Who doesn't? That's great. But these things, they don't last forever, and you really do have to protect yourself.

Crises happen. We're going to have another one, and it may be something completely different, but the world changes. It just always does, and there's always this risk in change. I think what we're seeing now is kind of a political evolution. And one of the reasons I did want to start The Wealth Warrior was because I look at the world right now, and I see it becoming a more dangerous place. I got the whole idea and I started to launch this project last year, when things were really heating up with North Korea, because you had Donald Trump and Kim Jong-un essentially trading barbs on Twitter.

Gerardo Del Real: It's Little Kim, Jason. It's Little Kim.

Jason Simpkins: Yeah, Little Rocket Man. And I was like, “Oh my God. There's nothing to stop this from happening.” It's just two guys that got themselves in this basically pissing contest, and I'm afraid we might not get out of it. Now thankfully it looks like that's died down a little bit, at least for the time being. They had their summit. They kissed and made up. Everything there looks much better.

But outside of that, you still have all of these other things. Iran, we ended the deal with Iran, they're restarting their nuclear program. We've got Russia basically trying to sabotage and infiltrate western democracies. We've got China kicking its neighbors out of the South China Sea. The Syria civil war's been going on for years. The battle against ISIS isn't over. We have all these foreign conflicts going on. Most of them, at least indirectly, involve the United States, and they can come home. They can affect US investors.

Two things that I really wanted to achieve with the service was to protect investors, and help them profit from it. So that when stuff does hit the fan, you not only save your money, but you multiply it, that you're not one of these people trying to play catch up once the crisis starts.

Don't wait until the bullets start flying or until things get really ugly before you protect yourself. The time to protect yourself and prepare for wars and things like that is during peace time. You have to squirrel away your acorns when things are good, before they get bad. And so that's what I seek to do in The Wealth Warrior. I'm investing heavily. We're going into defense contractors, but also just security companies, kind of across the board. And one example there is one of my first recommendations is a cyber security firm. They also do national IDs. ID cards, drivers licenses, e-passports, visas, these kind of secure identification things, and databases to manage immigration and travel, and all of these things. It helps secure borders.

Those are the kinds of stocks I'm looking at for growth, while also banking on the stability and steady returns and dividends of the the bigger, major players like your Lockheed Martins and Boeings, because they're still fantastic stocks, big as they are.

Gerardo Del Real: Wonderful. Now you mentioned be in position before the bullets start flying, and just today the Trump administration announced that they were imposing, I believe, it was tariffs to the tune of $50 billion dollars on Chinese goods. I believe the bullets are definitely flying, and despite that the Dow's down less than 1%. So if it was 92 degrees outside and it shifted to 91 degrees, you really wouldn't notice. Are you sensing the same type of complacency today that we saw back in that 2007-2008 time period?

Jason Simpkins: I would say with respect to the stock market, absolutely. I've lost a little bit track of the data, but we went something like a year and a half without a 20% correction, or any kind of significant drop in the stock market. That thing has just gone up and up and up and up. I don't think that's in accordance with the facts on the ground. I think that's been driven a lot obviously by the Fed money, or by banks or companies that have a lot of money and a lot of cash on their balance sheet, and there's big pools of money moving it, but I don't think that's really appropriate given the underlying circumstances now. So I do see some complacency there for sure.

Gerardo Del Real: So you don't see the current state of the markets and capital flows as sustainable in the way that they've been the last, nearly a decade?

Jason Simpkins: Certainly not, certainly not. And even with just the Fed raising rates, and like you said with the United States and other countries, we're kind of pulling away from this globalist approach, where with free trade and all that stuff, because in addition to the tariffs, remember, President Trump also shot down the TPP. There have been these hardball negotiations with NAFTA. It seems like the pendulum's really swinging back, whereas for years and decades even, America pushed this free trade, free trade ideology. Knock down all the barriers. Knock down all the barriers.

Well, now the barriers are coming back up, and I think there are some parties that don't want to believe that. I think they're reluctant to accept that, but if you just kind of read the tea leaves here, it's pretty obvious what's happening. Even things like the EU, it's kind of teetering with the Brexit and with debt crises. This whole order that we've established, the things that were safe havens, the things that were reliable and stable, these institutions, they're destabilizing. And I think that's something people should take seriously, and investors should prepare for.

Gerardo Del Real: Wonderful, wonderful. Jason, you mentioned wanting to help people not just preserve their wealth, but also grow it. How can people get in touch with you? Where can they read your opinions, and how can they subscribe to The Wealth Warrior?

Jason Simpkins: I write weekly for the Outsider Club. And then The Wealth Warrior, we've already done kind of a limited launch, but it's going to go out in full in a couple of weeks, we're going to open it up. Typically when we do these launches, we'll let our VIP, our lifetime subscribers in first, because they've paid for a lifetime subscription already, so they tend to get first crack at these things. But we're going to open it up to everybody else within the next few weeks. We're eyeing actually July 4th. I thought that would be really appropriate to launch a defense contractor based newsletter. We're going to go for that week. We're going to try to roll out with it and get as many people in as we can.

Gerardo Del Real: Fantastic.

Jason Simpkins: Because I really do want to help people.

Gerardo Del Real: I love it. I encourage everybody to go to the Outsider Club. It's founded by a colleague and friend of both ours, of course, Mr. Nick Hodge. I, of course, am an editor for the Outsider Club as well. I write for the Outsider Club, and do a weekly editorial there.

Jason, I want to thank you for your time, and as you get the launch up and going official and mainstream, I'd love to have you back, because I get the feeling that we're going to have to do these interviews on a monthly basis with just the situation being what it is on a global scale right now.

Jason Simpkins: I'd love to. This has been a pleasure. I really do appreciate it.

Gerardo Del Real: Jason, thank you for your time.

Jason Simpkins: Thanks so much, Gerardo.

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