This transcript has been edited for length and clarity.
Jim Pinkerton worked at Fox News as a contributor and as a columnist for Newsday. His newest book is, The Secret of Directional Investing: Making Money Amidst the Red-Blue Rumble.
Federal Newswire
What inspired your new book?
Jim Pinkerton
The book came as I got to thinking about trends we're seeing. You can make money when the stock goes up. I'm sure you can also make money when the stock goes down–called shorting the stock. If you see a trend like that…you can anticipate the stocks going down. That's a trend to be watched. The book, starts with the investment wisdom that the trend is your friend.
These trends can then be put into two categories. The trend you can spot, which is the passive, and the active, which is the “short.”
There are also trends to be shaped, and that's harder and more ambitious. It takes a larger effort, but it works. For example, consider how Nevada turned itself from a state of tumbleweeds in 1931 into a state of mega entertainment–they did it by legalizing gambling.
One of the chapters in the book [focuses on the] red-blue rumble that is so serious and so polarizing. You see Governor Abbott defying the Biden administration on the barbed-wire issue in Eagle Pass, Texas. And Governor DeSantis of Florida is not going to abide by the Biden Administration's Title Nine education. So you start to think, what else do the feds do that is such an obvious wet blanket?
The one that leaps to mind is a whole chapter in the book is the Food and Drug Administration.
The FDA has been a damper on medical innovation for a long time. Back in 1962, they changed the rules from safety [only to include] efficacy–does drug work or not? They've added an endless number of sidebars and regulatory opinions, way beyond anything that the Constitution or Congress imagine.
Federal Newswire
How did America become so polarized?
Jim Pinkerton
One theory [is] from Bill Bishop, who wrote a book in 2008 called The Big Story. He says that as the country became more affluent, …bliss comes from moving to a state that is ideologically closer to [their views]. So people are sorting themselves.
Polarization is bad in terms of the political divide. Red and blue is stilted. However, the red and blue separation allows for innovation. This becomes the basis of a blue state patriotism and a red state patriotism. I think that we have all the elements of Civil War, notwithstanding the actual desire to fight.
Would the students at Harvard join in combat? [Would] most of them get killed for the sake of keeping South Carolina in the Union? I think today they'd say ‘good riddance.’
Federal Newswire
You call yourself a “big government libertarian.” What does that mean?
Jim Pinkerton
The big government part is mostly national defense. Every 50 years or so, you end up in a mortal struggle for your existence, whether it's against the British or the Germans or the Russians or Chinese. This is one reason why I want red and blue to achieve some degree of autonomy and independence, but not secession.
We both have to contribute to the 82nd Airborne. Within that, though, as Nevada proves and the tech industry proves, freedom is an economic bazooka. If you let people loose, they will astound you. The difference between tech and medical innovation is that medical innovation has the FDA. There's no equivalent for that for tech.
Federal Newswire
What are your thoughts on the endurance of our Republic?
Jim Pinkerton
The genius of this country, thanks to James Madison and Thomas Jefferson and so on, is the states. Every state has the nucleus of its own government. So, if D.C. goes nuts, people in Texas say, “we'll just have to do it here.”
Each state has its own executive, and they have the beginnings of a police force or a National Guard. They can say, “we will take care of the common defense and all these things right here in Montana. Let's get back to investments.”
The Howard Hughes Company in 2021 spent $600 billion to buy 50,000 acres of land west of Phoenix. In Arizona, they had high hopes to build housing developments and new cities and everything else. To their shock, when the Democrats won the governorship in Arizona in 2022, the new Democratic governor said [they had] to go back and study the Ground Water Act, which says you can't build anything unless we have 100 years of water ahead of you.
How could anybody with a straight face say they can predict the future in a hundred years?
The problem is Arizona is landlocked. So the obvious place to get desalinated water is California [but California can prevent that]. Arizona could make a deal with Mexico. The state of Sonora and the narco terrorists [could] say, ‘we'll build a $5 billion plant piped up to Arizona.’
The value of residential real estate in Arizona is about 1.3 trillion. Now, if they had abundant water, and everybody got their swimming pools back and their lawns and their fountains, the price of real estate would go up easily 10%.
If you insist on letting California veto Arizona, then you're never going to get it right. If you say, in return for California not vetoing Arizona, Arizona won't veto California, now you're getting to a good living. You reduce polarization by turning problems into win/wins.
Federal Newswire
How can the American people find common ground?
Jim Pinkerton
Let’s keep in mind, blue states have some pretty good cards to play. The leading one is probably AI. It's always startling to conservatives to think where ChatGPT or OpenAI is headquartered–in San Francisco. If the people with the IQ of 200 who have figured out ChatGPT choose to live in San Francisco, that tells you a lot about who they are. You don't have to think they're right, but you certainly have to respect the product.
Truman Capote was born in Alabama, Halston was born in Indiana, and Tom Ford was born in Iowa, and they [all] wanted to go to New York. That's the joy of this country. If they live in Massachusetts and we live in Texas or Virginia or wherever, it's better because then they can do their thing and we can do our thing. As George Washington said, be under your own fig tree and enjoy the vine.
[It’s] what Madison and Jefferson bequeathed to us in the 10th Amendment, which says the states will be the main arbiters. In 1798, James Madison went to the legislature and said that the state of Virginia has the right to “interpose itself to the federal government.” Then Thomas Jefferson, who was Vice President at the time, went to Kentucky and said that Kentucky has the right to nullify the federal government. They were talking about the states being prior to the federal government. All of a sudden, all these regulations that so infuriate people just go out the window.
Federal Newswire
Do you have any investment advice?
Jim Pinkerton
You can learn a lot just by observing. Half the country likes one thing and half the country doesn't. So you have to figure that if company A aspires to be a national brand, it’s going to have a heck of a problem. Because half our country is blue and half the country is red, so you're going to have to make a judgment as an investor. Can the company make themselves purple?
Will Black Rifle Coffee get anywhere versus Starbucks? We’ll see. That's the kind of question that investors need to be pondering.
Federal Newswire
Where can your book be purchased after its release on May 28?
Jim Pinkerton
You can preorder on Amazon, and it will also be available at Barnes and Noble. It's “The Secret of Direct Investing: Making Money Amidst the Red-Blue Rumble.”
