Nick’s Note: At the Daily, we’re always trying to stay in front of big, profitable trends… And PBRG friend and Strategic Investor editor E.B. Tucker has put a lot of them on our radar—including “the biggest energy shift of our time” and legalized sports betting.

To uncover these trends, E.B. often travels to talk with key individuals and do boots-on-the-ground research. And on one of his recent trips, he not only met with investing legend Jeffrey Gundlach—he also stayed in a psychiatric ward for a night…

By E.B. Tucker, editor, Strategic Investor

When I’m on the road, I do my best to avoid chain hotels. They’re sterile and boring. That usually goes for the guests, too. With a few minutes of research, I can usually find a local boutique hotel for the same price or less than the national chains.

Boutique doesn’t always mean luxury. I’m not talking about lying around in a spa. What I’m looking for is a refurbished piece of history with a story behind it.

There was a period during the late 19th and early 20th centuries when the U.S. had unmatched wealth. Some of the buildings built during this period are structurally irreplaceable. There’s no comparison to the aluminum wall studs and Chinese drywall used to build most buildings today.

I found one of these historical gems on a quick trip to Buffalo, New York last month. I’ll explain later why I went to Buffalo… But first, the hotel.

As you can see in the picture below, this hotel would be impossible to rebuild today. This 180,000-square-foot, 180-feet-high section I’m standing in front of is less than half of the original complex.

E.B. in front of Hotel Henry in Buffalo, New York

The hotel only opened two years ago after a more than $100 million renovation. Before that, it sat empty for 40 years. For 90 years before that, it was an insane asylum.

In 1870, New York state commissioned the Buffalo State Asylum for the Insane. It took eight years to build.

Henry Richardson was the architect. Richardson also built Trinity Church in Boston, the New York State Capitol, and the old Marshall Field’s Wholesale Store building in downtown Chicago. Richardson was a first-rate architect.

He paired up with a leading psychiatric doctor and Frederick Olmsted, who designed Central Park. Together, they created a complex of buildings spanning nearly 500,000 square feet. The complex was so large that Richardson’s plans called for a miniature railroad connecting all of the basements. This is how the staff delivered food, laundry, and supplies between buildings.

It’s anyone’s guess how many millions of pounds of Medina sandstone it took to build the entire structure. This unique, durable sandstone comes from nearby Medina, New York.

From the slate roof to the ornate staircases and giant copper spires, the resources devoted to housing the insane back then are incredible. These days, insane people live downtown in parks or drift from place to place.

Richardson and his fellows designed the patient rooms with specific details in mind. They had 20-foot ceilings. As you can see in the exterior picture above, the windows are large, filling the rooms with natural light. They also gave patients a clear view of the facility’s sprawling 200-acre grounds.

The hallways were 18 feet wide to encourage patients to feel comfortable.

Hallways as long as 200 feet

Today, the hotel has 88 rooms. It also has several large banquet spaces in the upper levels of the building. The rates are reasonable at around $155 per night.

And the hotel staff has the walls peppered with beautiful art. That’s part of the reason I went to Buffalo.

Hotel Henry keeps the asylum walls covered with beautiful art

Why I Went to Buffalo

The other reason I went to Buffalo was to meet Jeffrey Gundlach. He’s the billionaire founder of DoubleLine Capital, a notable fixed-income fund.

Gundlach grew up in Buffalo. And he recently donated $42 million to the city’s Albright-Knox Art Gallery. Not long after, it became the Albright-Knox-Gundlach Art Museum. Gundlach visited the museum as a child.

We arrived at the museum at the same time. The curator offered me a tour, and Gundlach joined us. After about 10 minutes, he took over the tour. He’s a pacing genius and also an art savant.

With a collection of untold value, Gundlach thinks about artists the way I think about stock charts. The artist has periods of popularity and periods of stall. A Rothko painted from the mid-1950s is entirely different from one that came 10 years later. Gundlach can tell you why—and he did.

We zipped through the museum that will soon bear his name. Then, we joined a group of around 100 people for a presentation and Q&A session.

Jim Grant interviews Jeff Gundlach in Buffalo

Each year in early January, Gundlach lays out his predictions for the coming year. That’s something we at Strategic Investor do in December.

After listening to his talk and the questions, I pulled him aside. I told him that if I arrived at his talk via time travel from another period, my conclusion would be that gold was on the cusp of taking off. Almost every one of his predictions—if true—will be positive for gold and difficult for mainstream assets.

Gundlach told me his recommendation for the Barron’s Roundtable due out that week was the VanEck Vectors Gold Miners ETF (GDX). I told him I prefer gold royalty companies, but there was no reason to split hairs.

Before we parted ways, I told Gundlach to keep in mind that not one of the questions he fielded from the crowd mentioned gold that day. It’s common for the asset most likely to thrive in a coming time to be of little interest to mainstream investors. And he acknowledged the same.


E.B. Tucker
Editor, Strategic Investor

P.S. This Wednesday, February 27, at 8 p.m. ET, I’ll go on record and reveal a whole new approach to making explosive gains in 2019.

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