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b'Episode 27 starts with a quick note from Meb. It\\u2019s a week of freebies! Why? Meb is celebrating his 10th \\u201cblogiversary.\\u201d (He\\u2019s officially been writing about finance now for a decade.) Be sure to hear what he\\u2019s giving away for free.\\nBut soon the interview starts, with Meb asking Porter to give some background on himself and his company, as Porter\\u2019s story is somewhat different than that of many guests. Porter tells us about being brought into the world of finance by his close friend and fund manager, Steve Sjuggerud.\\nThis conversations bleeds into Porter\\u2019s thoughts on how a person should spend his 20s, 30s, and 40s as it relates to income and wealth creation. But it\\u2019s not long before the guys dive into the investment markets today, and you won\\u2019t want to miss Porter\\u2019s take. In essence, if you\\u2019re a corporate bond investor, watch out. Porter believes this particular credit cycle is going to be worse than anything we\\u2019ve ever seen. Why? There\\u2019s plenty of blame to go around, but most significantly, the Fed did not allow the market to clear in 2009 and 2010, and it means this time is going to be very, very bad. Porter gives us the details, but it all points toward one takeaway: \\u201cThere\\u2019s going to be a big bill of bad debt to pay.\\u201d\\nMeb then asks what the investing implications are for the average investor. This leads to Porter\\u2019s concept of \\u201cThe Big Trade.\\u201d In a nutshell, Porter has identified 30 corporate offenders, \\u201cThe Dirty 30.\\u201d Between them, they owe $300 billion in debt. His plan is to monitor these companies on a weekly basis, while keeping an eye out for liquid, long-dated puts on them that he\\u2019ll buy opportunistically. He\\u2019ll target default-level strike prices, and expect 10x returns \\u2013 on average. Meb likes the idea, as the strategy would serve as a hedge to a traditional portfolio.\\nNext, the guys get into asset allocation. Porter\\u2019s current strategy is \\u201callocate to value,\\u201d but for him that means holding a great deal of cash. Meb doesn\\u2019t mind, as wealth preservation is always the most important rule. This leads the guys into bearish territory, with Porter believing we\\u2019ll see a recession within the next 12 months.\\nThis transitions into how to protect a portfolio; in this case, the guys discuss using a stop-loss service. Porter finds it invaluable, as most people grossly underestimate the risk they\\u2019re taking with their investments, as well as their capacity to handle that risk. He sums up his general stance by saying if you don\\u2019t have a risk management discipline you will not be successful.\\nNext, the guys get into the biggest investing mistakes Porter has seen his subscribers make over the years. There\\u2019s a great deal of poor risk mitigation. He says 95% of his own subscribers will not hedge their portfolio. Meb thinks it\\u2019s a problem of framing. People buy home insurance and car insurance. If we framed hedging as \\u201cportfolio insurance\\u201d it would probably work, but people don\\u2019t think that way. He sums up by saying, \\u201cTo be a good investor, you need to be good at losing.\\u201d Porter agrees, pointing out how Buffet has seen 50% drawdowns twice in the last 15 years. If there\\u2019s a takeaway from this podcast, it\\u2019s \\u201clearn how to hedge.\\u201d\\nThere\\u2019s far more, including what Porter believes is the secret to his success. What it is? Find out in Episode 27.\\nLearn more about your ad choices. Visit megaphone.fm/adchoices'