The Contrarian Investor Podcast on Smash Notes

The Contrarian Investor Podcast podcast.

March 14, 2020

The Contrarian Investor podcast gives voice to those who challenge a prevailing narrative in financial markets. Each episode features an interview with a hedge fund manager, investor, economist or other market participant. The goal is to educate all listeners with an interest in asset allocation and ultimately to provide actionable ideas to the institutional investor community.



Recently updated notes

Vitaliy Katsenelson of ContrarianEdge.com joins the podcast to discuss his current views on markets and his recent thesis on automakers.

That industry has been disrupted by the entrance of Tesla. Other industries face a similar fate and Katsenelson discusses some of the winners and losers.

Content Segments
(Spotify users can click on the timestamp to reach the segment directly)

  • The automotive industry faces an "unstoppable" tsunami and Tesla is at the forefront (1:58)
  • Tesla as "iphone"-type disrupter (7:27)
  • What other companies are exciting? Recent investment Twitter (14:12)
  • Value versus growth: Knowledge is cumulative (16:07)
  • Background on the guest (22:08)
  • Views on coronavirus (28:39)
  • Makeup of the portfolio and one notable recent addition (33:58)

For More Information on the Guest:

Not intended as investment advice.

Key points in this episode

Dexter Roberts joins the podcast to discuss his book "The Myth of Chinese Capitalism."

In Roberts' view, economic reforms have already been curtailed under current political leadership. China's middle class, which has grown almost exponentially in recent decades, remains limited mostly to large coastal cities. The rural countryside, which still represents half the country's population, remains well below the middle class -- and is stuck there, in part due to outdated demographic policies.

The options for Chinese policymakers are limited. They have so far not managed to spread the wealth effects of their "pivot" to a services-based economy, and may have even exacerbated the problem. This all has wide-ranging consequences: for China, for western companies, and for the world.

Content Segments
(Spotify users can click on the timestamp to link to the section directly)

  • The first myth: capitalism as short hand for economic reforms (5:39)
  • The second key myth: the middle class will inexorably continue to grow larger (6:35)
  • The global supply-chain diversification, started several years ago and exacerbated by COVID-19, is effectively ending China's "factory to the world" model (9:21)
  • Authorities' options are very limited (10:45)
  • Where does this leave Chinese consumers? The days of western companies expanding sales through the growth of China's middle class are gone (13:10)
  • Background on the gust (20:15)
  • What might the future of China hold? (25:09) The possibility of social unrest (27:14)
  • Brief discussion of Hong Kong: "Don't think that the protests are over." (30:22)

For More Information on the Guest:

Key points in this episode

Christopher Brown of Aristides Capital joins the podcast to discuss his investment strategy, which has produced positive returns every calendar year since 2008.

In Brown's view, healthcare and information technology stocks should not be treated as defensive investments that will protect portfolios in times of stress -- especially after their recent run-up. There are reasons many companies in this sector are overvalued and could see their shares drop as the economy begins to see further difficulties from coronavirus.

Aristides Capital has an active short book, which framed most of the second half of the conversation.  

Content Segments: 
(Spotify users can link to the segment directly by clicking on the timestamp)

  • Why investors' thinking about defensive stocks may be misguided (4:49)
  • Growth stocks' recent performance is reminiscent of the late-1990s tech bubble (7:05)
  • The concerns with healthcare stocks (11:45)
  • Background on the guest (15:07)
  • Some of the red flags short sellers look for and why the "big picture" is often more pertinent (20:22)
  • Inovio Pharmaceuticals (NASDAQ: INO) discussion (22:52)
  • CytoDyn Inc. (OTC: CYDY) discussion (25:44)
  • Vuzix Corp. (NASDAQ: VUZI) discussion (28:37)
  • Accelerate Diagnostics (NASDAQ: AXDX) discussion (30:59)
  • Insider purchases are not always a bullish indicator (35:02)
  • Tesla Inc. (NASDAQ: TSLA) discussion, at the guest's suggestion (host didn't want to go there originally) and why it could be an indicator for future market direction (36:17)
  • Reasons to be bearish on markets and the economy (39:17)
  • How to protect your portfolio against inflation (42:13)

For more information on the guest:

Not intended as investment advice.

Key points in this episode

Chad Glauser of Denver-based Alpine Quantitative Management joins the podcast to discuss his fund's strategy of using just three ETFs as a way to manage risk, gauge volatility, and produce returns.

The three ETFs track short-term Treasuries, long-term bonds, and the S&P 500. Alpine has been actively trading the strategy since late 2017 after an incubation period of about two years. The approach has worked, with the fund beating the hedge fund index for 22 straight months (and counting).

Content:
(Spotify users can click on the timestamp to link to the segment in question)

  • About the strategy: quick background and using volatility as an indicator (1:10)
  • The "real-world example" of what happened in January and February, and how the fund adopted (2:42)
  • How often, and quickly, the portfolio adjusts and why it is 100% allocated at all times (4:39)
  • The current view of markets (5:46)
  • Why Alpine views itself as the "anti-quant" quant (9:04)
  • Background on Chad Glauser (12:35)
  • How to get in touch (20:04)

For more information on the guest:

Not intended as investment advice.

Key points in this episode

Maya Joelson, founder and president of Metapoint Advisors, joins the podcast to discuss her view of exchange-traded funds.

These instruments are seen as efficient and cheap ways for investors, especially retail investors, to gain access to various asset classes. But this is misguided, especially when it comes to ETFs tracking bond markets. Even stock ETFs aren't always a good idea. Investors are better served picking individual securities themselves (or hiring somebody to do it for them).

Content
(Spotify listeners can click on the timestamp to link to the start of the segment)

  • A short history on the rise of ETFs in the U.S. (2:10)
  • Why bond ETFs don't make as much sense as equity ETFs (6:49)
  • How long before investors get wise to this? (10:41)
  • What about stock ETFs, how efficient are they? (15:20)
  • Background on the guest (20:24)
  • "Better Safe Than SARS-y": Looking back on the call to derisk portfolios in early February and where we are now (25:43) 
  • Buy stocks that should do well in this environment: consumer staples, healthcare, Kraft Heinz, Chewy (29:53)

For more information on the guest:

Not intended as investment advice

Key points in this episode

David Hunter, chief macro strategist at Contrarian Macro Advisors, has for some time predicted a final "melt up" stage of the market cycle before markets crash.

This stage is now underway as markets recover from an initial sell-off caused by the coronavirus (which Hunter admits he did not and could not have predicted).

What comes next is a "secular top that I expect to be the high-water mark for decades to come," he says. After markets peak around late summer, a "global deflationary bust" will ensue, with as much as 80% downside for equities.

Content: 
(Spotify users can click on the timestamp to link to the segment directly):

  • Target of 4,000 for the S&P as part of "the final melt up" (2:23)
  • The downside target. Forget the "reset narrative" in the short term (10:39). Markets should drop by 80% from the top (11:58)
  • Unprecedented leverage doesn't leave policymakers much time (14:09)
  • Background on David: 47 years in financial markets (18:46)
  • The current crisis in historical context (26:35)
  • Deflation allows for liquidity injections. Until it creates inflation (32:01)
  • Discussing the potential political and social fallout from the coming economic crisis (36:12)
  • How deflation will eventually turn to inflation (40:20)
  • Discussion of the U.S. dollar's reserve currency status (45:56)
  • Bullish outlook for gold and silver (51:37)

For more information on the guest:

Not intended as investment advice.

Key points in this episode

Hedi Ben Mlouka joins the podcast to discuss his views of frontier markets in light of the coronavirus crisis.

Ben Mlouka has been investing in frontier markets for more than a decade as CIO and CEO of Dubai-based FIM Partners. He sees the asset class in general as being at greater risk of being impacted by fallout from the COVID-19 epidemic. The political risks are particularly vexxing.

Content segments:
(Spotify users can skip to the section by clicking on the timestamp)

  • Is this a good time to be investing in frontier markets? (6:03)
  • The first part of the equation: Frontier markets are less prepared for the coronavirus than developed markets (7:05)
  • The impact will be larger from a healthcare perspective while the policy response can be expected to be weaker, especially in fragile economies (9:56)
  • The crisis will expose the "downside of globalization," precluding a "V-shaped" recovery (11:30)
  • Where are the opportunities? Oil importers like Pakistan and Egypt can benefit (15:26)
  • Speaking oil, forget about the demand shock for now. Oil prices should recover to $50 or $60 per barrel (18:57)
  • Beyond the macro picture, industries with access to capital are preferred. Avoid travel, hospitality, banks. (21:07)
  • Healthcare, education, retail, and consumer discretionary companies should recover over the long term (23:56)
  • Political risk is a major concern for many countries in frontier markets. Who's most vulnerable? (31:09)

More information on the guest:

Not intended as investment advice.

Key points in this episode

Rachel Ziemba, a geo-economic and country risk expert, joins the podcast to discuss the continuing, and intensifying economic impact from the coronavirus.

It's become clear that the crisis has caused a demand shock that will likely bring "rolling recessions" in its wake. The most likely scenario appears to be for a "W-shaped" recovery. In the meantime, there is still a lot that go wrong.

Content Segments

(Spotify users can click on time stamp to link to section directly)

  • The demand shock, shift in demand, and rolling recessions (4:27)
  • Unique characteristics of the coronavirus crisis (7:57)
  • Oil and oil-producing countries may be at most risk. Sino-U.S. relations can be expected to suffer (16:35)
  • Background on the guest (25:55)
  • Discussion of historical parallels: some similarities, but there is no precedent (30:16)
  • The unlikely prospect of a "V-shaped" recovery (36:26)
  • How deep might the trough be? (39:55)
  • Are there any safe harbors from this? (47:57)

For more information on the guest:

Not intended as investment advice.

Key points in this episode

Dr. Robert Bednarz joins the podcast to provide his professional opinion on the coronavirus: Just how serious of a health crisis is COVID-19? And how long might it persist until economies around the world can spring to life again?

Dr. Bednarz records from his home in Dundee, Scotland, where he is currently under self-quarantine. Unlike typical guests on this podcast, he has no experience or knowledge of investing or the economy. To that effect, this episode contains no stock picks or tangible views on economics. However, the medical view he supplies is certainly valuable for all members of the investing community.

Content

(Spotify users can skip to the segment by clicking on the time stamp in question)

  • What is happening in Italy can happen anywhere (2:43)
  • The cases and fatalities in Scotland and how hospitals are dealing with the effects (5:47)
  • Hope relies on the local communities and people should "just stay home" (8:04)
  • The chances of a mutation of the virus exist, but it is unlikely to be more lethal than the current iteration (10:41)
  • Warmer weather should help (13:39)
  • The worst case scenario scaring medical professionals (15:31)
  • What medicines are being used for treatments? Antivirals show some promise (19:30)
  • Masks are useful only for those with symptoms. But buyer beware (23:23)

For more information on the guest:

  • Dr. Bednarz hosts a podcast, The Patient Will See You Now, available on all podcasting platforms, including iTunes and Spotify
  • Twitter: @Robert_Bednarz

Not intended as investment advice.

Key points in this episode

Marc Chapman, a political economist and currently managing partner at Bannockburn Global Forex, joins the podcast to provide his assessment of the coronavirus impact on the global economy.

Content:

(Spotify users can click on the timestamp to link to the segment)

  • This crisis is different, not brought about by the economic cycle but by an exogenous shock (3:15)
  • Assessing the fiscal and monetary response by policymakers (4:36)
  • Will there be a "V-shaped" recovery? (6:55)
  • Recovery in Q3, Q4, but growth will be limited (12:07)
  • The crisis may accelerate the move to a cashless society (13:12)
  • Background on the guest (17:43)
  • What's something the market is missing? (27:39)
  • The Age of Surplus (34:13)
  • Greater accountability for the Federal Reserve (38:21)
  • The crisis could result in expansion to enfranchisement. To 16-year olds? (43:21)

For more information on the guest:

Not intended as investment advice.

Key points in this episode

Kirill Zadov, political analyst at Russian-language radio station RUSA Radio, joins the podcast in this special episode to discuss the recent sell-off in oil prices.

Zadov has some unique insights into the Russian oil economy and the political economy of the Middle East. His prediction: Saudi Arabia and Russia will have to come together to agree to output cuts, and soon. How low will oil go in the interim? Here too Zadov has some views.

Segments:
(Spotify listeners can skip to sections by clicking on the time stamp)

  • What's motivating Russia on their decision to not cut output? (4:02)
  • Why Russia and Saudi Arabia need to cut output, and soon (7:07)
  • What other countries in the region are affected by this? (9:19)
  • How long will it take for Russia and Saudi Arabia to agree to cuts? (10:28)
  • Background on the guest (11:35)
  • How low will oil prices go? (13:26)

For more information on the guest: 

Not intended as investment advice.

 

Key points in this episode

Tobias Carlisle, founder of Acquirers Fund LLC, is well known in value investing circles. He defends this method while also pointing to the short opportunities that have emerged recently.

Where the macro picture is concerned, the coronavirus is still front and center. Here Carlisle expects corporate earnings to be impacted and doesn't anticipate central banks being able to help much. (This podcast was recorded before the Federal Reserve's 50 basis point cut announcement on March 3).

Highlights:

  • The case for value investing (4:28)
  • Coronavirus and the impact on supply chains (7:36) and how the market will react this year (8:47)
  • The fund's short position in Tesla (12:58)
  • Favorite contrarian ideas right now, including short Etsy (21:25)
  • Exposure to energy (27:15)

More information on the guest:

Not intended as investment advice.

Key points in this episode

Philip Reade, founder and managing partner at Helm Investment Partners, joins the podcast to discuss his approach to crisis investing on a global basis.

Reade does not follow the "buy when everybody else panics" maxim. Instead, he searches first for a country that is emerging from a crisis and then buys that market's largest, most liquid public equities. Helm Investment Partners seeks to capture shifts in the "psychological cycle" where the perception of a market changes.

Content:

  • Reade's approach and how it's different from value investing (1:12)
  • Identifying buying opportunities (5:35)
  • Timing the purchases is just as important as identifying the opportunity (15:30)
  • Some of the firms' investments in 2019 (19:09)
  • When to sell positions (20:30)
  • Reade's "origin story" of how he came to investing (23:51)
  • Where are the opportunities now? (30:30) Greece (31:29), Turkey (32:09), Chile (33:36), Pakistan (35:04)
  • China and the coronavirus (37:57)
  • Potential future investment targets in Egypt, Mexico, Argentina (39:25)
  • Why there is still upside in Greece (42:42)

Not intended as investment advice.

Key points in this episode

Gregory Obenshain, director of credit at Verdad Capital, joins the podcast to discuss his concerns about private credit investing.

Obenshain and Verdad Capital founder Dan Rasmussen recently penned an article in Institutional Investor: "High-Yield Was Oxy. Private Credit Is Fentanyl." Subtitle: "Investors are hooked, and it won't end well."

In this 29-minute conversation, Obenshain tells listeners about his thesis.

Content:

  • How private equity has become the dominant player in this market (4:02)
  • The lending is a lot more dangerous and indeed riskier than the high-yield bond market (7:39)
  • Obenshain's background (15:03)
  • Historical returns for private credit investments (19:50)
  • Ramifications of new lenders entering the market (22:22)
  • Potential timing of an unwind (24:17)
  • More constructive ideas for investors (25:27)

For more information on the guest and his firm: VerdadCap.com

Not intended as investment advice.

Key points in this episode

January 2020 has been an eventful month. Geopolitical events and other exogenous factors have roiled global financial markets. In the end, they may not matter all that much where the trajectory of the global economy is concerned. In fact, they may not matter at all.

Nicholas Reece of Merk Research shares his thesis that there is a "subtle fallacy" that events in the news are important to the global economy and financial markets. This is due to evolutionary biography, behavioral biases, and the nature of the news business in the digital age.

In a wide-ranging conversation, Reece tells listeners how to cut through the noise to identify data that has real economic repercussions. One conclusion is that in 2020 (at least so far) to be a contrarian means being optimistic.

Content:

  • The "subtle fallacy" of news (1:32)
  • Humankind's innate negativity bias (2:43)
  • So what news is relevant to the economy and to markets? (4:09)
  • Discerning the signal from the noise for investors (5:50)
  • Economic damage from the coronavirus (7:53)
  • "Unknown unknowns" (9:32)
  • Nick Reece's "origin story" as an investor (12:41)
  • The changing public perception of the Federal Reserve (20:30)
  • Being positive is contrarian (26:21)
  • A short discourse on political commentary (27:25)
  • Favorite economic indicators that can supply contrarian signals (30:19)

For more information about Nick Reece and Merk Research, visit their website.

Key points in this episode

Economist and energy specialist Peter Sainsbury joins the podcast to discuss his thesis, that the fossil fuel industry faces a dilemma similar to what confounded big tobacco a generation ago.

Oil companies in particular are starting to be seen as "sin stocks" with institutions divesting themselves on ethical grounds. Much like tobacco companies reinvented themselves in the 1990s, energy companies can undergo a similar renaissance. Indeed the process of oil companies divesting harmful assets is already underway. This causes opportunities for investors. But first, expect headwinds.

Content:

  • Peter Sainsbury introduces his thesis (1:59)
  • The impact on energy companies' share prices (8:16)
  • What about alternate energy? (10:27)
  • Background on the guest (15:58) and other areas of interest, including gold and gold miners (18:15)
  • Palladium may be frothy. One little-known indicator worth tracking (23:16)
  • Potential catalysts for supply-side disruption in energy markets (27:08)

For more information on Peter Sainsbury:

Not intended as investment advice.

Key points in this episode

Chris Stanton, chief investment officer at Sunrise Capital, rejoins the podcast to discuss his bearish views on the market at the start of 2020.

There are reasons to believe a market correction is overdue, Stanton says. Risk is everywhere: geopolitical, volatility, repo markets. A drop of 18% to 20% can be expected before March 31.

Highlights:

  • "Rest assured, we're heading for a correction and I would argue it's going to be terrifying when it comes" (5:43)
  • The "Phase 1" deal with China is a temporary measure that will be revoked if Donald Trump wins reelection in November (9:55)
  • A likely catalyst for a correction is in the repo market (11:36)
  • A "volatility-led sell off" is likely before the end of the first quarter (16:12)
  • Where's inflation? (26:34)
  • It may not take an actual headline for investors to decide equities are overbought (31:01)
  • Background on Stanton's firm, San Diego-based Sunrise Capital (38:03)
  • The "origin story": Background on Stanton himself (53:03)
  • What should retail investors do, right now? (1:02:49)

Not intended as investment advice.

For more information on Sunrise Capital: www.sunrisecapital.com

Key points in this episode

Lukasz Tomicki of LRT Capital Management joins the podcast to discuss his investing strategy and ideas for 2020.

Contents: The case for Russian natural gas companies (3:05) and healthcare stocks (5:28). What's to like about UnitedHealth (9:24). Background on Tomicki (13:48). Handicapping the 2020 US presidential election (20:50). The outlook for growth in the US (23:01).

Austin, Tex.-based LRT Capital is a long-biased, concentrated equity fund started by Tomicki in 2012. For more on LRT Capital, visit the firm's website.

Key points in this episode

Nicholas Shaxson, author of The Finance Curse, joins the podcast to discuss his thesis, that the financial sector is at the root of many problems facing economies and society, and where to look for possible solutions.

Content

  • The paradox: Too much finance can make you poorer (1:47)
  • How did we get here? (3:11)
  • Angola as the genesis of the finance curse concept (7:58)
  • Rising inequality. Where might solutions lie? (14:11)
  • Debunking private equity (18:34)
  • Antitrust solutions may be the answer (27:06)
  • What sectors are most at risk? (33:19)

For More Information

 

Key points in this episode

The collective mood and risk appetite of investors may be turning more cautious, but this makes for a more optimistic outlook for risk assets. The author of the Demonetized Blog (and corresponding Twitter account) joins the podcast to discuss this concept and what it means for the economy and markets going forward.

Content:

  • Investor surveys as contrarian indicators (2:40) and the "basic principle" that broader conservative positioning makes for bullishness (5:13)
  • Nick's "origin story" as an investor (13:36)
  • Timing is everything. How much longer does this bull market have to run? (17:45)
  • Interest rates should stay low indefinitely (20:37) and the economy is not facing an imminent recession (22:00)
  • Prospects of a new president in the U.S. (24:12)
  • What this all means for asset allocation (26:05) and why investors should keep wary of inflation (28:25)

Not intended as investment advice.

Key points in this episode

Andrew Redleaf is best known as the founder of Whitebox Advisors, a hedge fund that at its peak managed $6 billion. He joins the podcast to discuss his thesis that the world is increasingly bifurcated between those who have access to cheap capital and those who do not.

Content:
The contrarian take on low interest rates (2:33). Who has access to capital (5:16)? Small banks an outlier (7:28). The macro outlook (9:02). Andrew's "origin story" (12:10). Cultural elements of financial markets (19:11). Biggest concerns facing markets and best ideas (23:20).

Not intended as investment advice.

Key points in this episode

Nancy Davis of Quadratic Capital joins the podcast to discuss the danger of interest rate volatility risk.

The market is at "peak confidence of central banks being able to control markets" (2:27), as evidenced by the historic low in all gauges of interest rate volatility (5:36). The risks of stagflation (8:37) and a trade war with Europe (10:16) are similarly discounted. 

Background on Nancy (14:39), further information on her fund (17:23), why gold is an ineffective inflation hedge (22:05).

Key points in this episode

Peter Borish is a founding partner at Tudor Investment Corp and current chief strategist at Quad Group. In his long career on Wall Street, Borish has seen multiple market cycles and met with and allocated to many hedge fund managers. He shares his wisdom with listeners.

Content:
The need for active management in today's market (6:23). A contrarian view on ego (8:35). State of the economic cycle and deflationary pressures (10:29), political realities (14:26), concepts to keep in mind for the long run (16:31). What to look for in an investment adviser and hedge fund manager (20:46). The current state of hedge fund talent (22:57). Areas for concern in the macro picture (26:45) and possible inflection points (29:18).

Not intended as investment advice.

More information on Peter Borish and Quad Group: www.quadgroup.com

Key points in this episode

Adam Johnson of Bullseye Brief joins the podcast to discuss his optimistic views on the US economy. He supplies ideas for stocks to take advantage of this situation, and talks about his background and how he came to start his investing service.

Content:
Labor markets, consumer spending speak to strong economic currents in the US (0:46). The bullish case for financial stocks (2:55) and United Rentals (6:04). Semiconductors should do well (9:49). Adam's background and how he came to start Bullseye Brief (14:23). Ideas in biotechs (19:07).

More information about Bullseye Brief: www.bullseyebrief.com

Key points in this episode

Rupal J. Bhansali joins the podcast to discuss her just-published book "Non-Consensus Investing: Being Right When Everyone Else is Wrong."

Ms. Bhansali is the chief investment officer, international and global equities, at Ariel Investments in New York. Over the course of the conversation she explains why she wrote the book, some of its most valuable lessons for stock analysts, and why investors should eschew FAANG stocks for a new acronym: MANG (Michelin, Ahold, NTT Docomo, Glaxosmithkline).

Skip to segments:
The need for developing non-consensus views (2:20), focusing on balance-sheet risk rather than earnings (3:50), "kicking the can down the road" is not an option (6:27), FAANG vs. MANG (7:27), a special message to young women (12:20)

More information on the book: https://cup.columbia.edu/book/non-consensus-investing/9780231192309

Key points in this episode

Maj Soueidan, co-founder of GeoInvesting LLC, joins the podcast to discuss his approach to microcap investing and his process for sourcing ideas before concluding with one of his favorite stock picks at the time of the recording.

Content: The case for microcaps (1:25), how to find ideas (5:14), sectors (9:04), monitoring and holding periods (10:08), catalysts and "problems" (12:30), an illustrative case study (15:10), Maj's background and how he came about microcap investing (18:43), more about GeoInvesting (24:19), current idea: Rand Worldwide Inc. (26:09), how to find more information (37:14).

 

Key points in this episode

David Hunter, Chief Macro Strategist at Contrarian Macro Advisors, discusses the current state of the economic cycle and why risk assets have a final upleg left before the onset of the bear market. 

Content:
The Federal Reserve is behind the curve of the economy (2:00), the coming bust (5:00), predictions for bond prices (8:15), the final "melt up" and why it will be "parabolic" (12:29), echoes of 1982 (16:50), the 2020 bear market (19:34) and recovery, which will bring the first inflationary cycle since the 1970s (21:21), favorite places to be in terms of investments (26:45), $10 oil (30:00)

Not intended as investment advice.

Follow David on Twitter

Key points in this episode

Barry Knapp of Ironsides Macroeconomics joins the podcast to discuss the 2-year/10-year yield curve inversion. The gauge is viewed as a harbinger of recession and while global trade has clearly slowed, the U.S. economy should not necessarily see any ill effects in the immediate future, says Knapp.

Content: The 3-month/10-year yield curve versus the 2-year/10-year (2:52), for historical precedence see Japan in the early 2000s (7:50), recession in global trade but not in the U.S. (8:42), positives for the U.S. economy (13:00).

For more information on our guest: https://ironsidesmacro.substack.com/

Key points in this episode

Denise K Shull joins the podcast to argue against the platitude that emotions have no place in investing. Identifying and managing emotions does not only play an integral role in investing, but can in fact hold one of the keys to succeeding at all levels of money management -- and elsewhere.

Denise was one of the key inspirations for the Wendy Rhoades character on Billions, the Showtime program that just completed its fourth season.

Content: The place of emotions in investing (0:20), examples of red flags (2:48), structuring a dataset of emotional reactions (6:35), gauging collective emotions in the market (10:00), Billions discussion (15:00). 

More information about Denise and The ReThink Group: https://therethinkgroup.net/

Key points in this episode

Gregory Mariasch, partner at Pembroke Emerging Markets, makes the case for his particular brand of long-short investing. Contrary to the prevailing opinion, there are opportunities in emerging markets that are less correlated to trade war issues between the US and China.

Stock markets in China, Brazil, Argentina, and Mexico are discussed in greater detail.

Content:
Not your grandfather's emerging markets (2:40), China's economy and the trade war (5:40), stocks to own (13:20), the bullish case for Argentina (14:30) and Brazil (19:30), reasons to be bearish on Mexico (24:50).

Not intended as investment advice. 

More information about Pembroke: https://www.pembroke-em.com

Key points in this episode

Kevin Smith of hedge fund firm Crescat Capital in Denver joins the podcast to discuss his views on China and other asset bubbles, which he considers ripe for implosion.

China heading into an economic downturn (2:00) and why its currency hasn't faced any real devaluation, the situation in Hong Kong (3:50) and short HKD trade, the maturing economic expansion in the US (7:37), fiat currency debasement and bullish case for precious metals (11:35), background about Kevin (17:32).

Not intended as investment advice.

Key points in this episode

Scott Colbert, chief economist at Commerce Trust Company in St. Louis, disagrees with the prevailing consensus that the US expansion is at or near recession.

While growth may have slowed, the economy is in much better shape than is believed by many, with few near term chances of recession according to Colbert, citing leading economic indicators.

Indeed, "if we had to put a number on it...we would push it out towards as much as four more years" of economic expansion.

The market is underestimating the response by policymakers, including by the Federal Reserve, to ward off a slowdown. 

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The market has begun to price in the likelihood of a US-China trade deal. But this would not be the end of China's problems with its biggest trading partner, says renowned short-seller (and China bear) Jim Chanos in this short clip.

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Shares of timeshare companies have not done particularly well lately. That is understandable considering the options investors have elsewhere as well as the state of the economic cycle in the U.S. But this week's guest, Michael Kahan of North Peak Capital Management, likes one particular stock in the sector -- and tells us exactly why.

Content: The value proposition (2:33), the stock (3:15), drivers of revenue growth and performance during recessions (6:00), more on the hedge fund (16:30), entry points (19:35).

For more on North Peak Capital: www.northpeakcapital.com

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Retail is dead. Brick and mortars shopping has been replaced by E-commerce. Amazon is triumphant, the victor over all goods that can reasonably be bought and sold. The experience of in-person shopping, whether for clothes or food or electronics or anything else, is going the way of the horse and buggy. 

This is the conventional wisdom. It would take a very wise (and contrarian) individual to want to oppose it. But that's exactly what this week's guest is all about. @ValueStockGeek has spotted some opportunities in retail stocks. Yes, really.

Content:
Finding mispriced securities (3:00), more about ValueStockGeek and his process (12:54), stock ideas (15:23).

The guest was kind enough to share some reports that factor into his view:

https://fred.stlouisfed.org/series/ECOMPCTSA

https://www.theatlantic.com/business/archive/2017/09/sears-predicts-amazon/540888/

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Renowned short-seller Jim Chanos spoke at the Connecticut Hedge Fund Association's quarterly meeting on June 6. This is a recording of his speech.

In his 45-minute address, Chanos discussed Tesla, China, kidney dialysis companies, and a host of other topics.

Note: The acoustics leave a little bit to be desired.

Special thanks to the Connecticut Hedge Fund Association.

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The general assumption that management and governance of public companies are efficient, is false. So says Henry D. Wolfe in his recently-released book, "Governance Arbitrage: Blowing up the public company governance model to maximize long-term shareholder value."

Content:
The underlying thesis (3:00), what needs to replace it (5:30), why institutional investors have to play a key role (7:44), the advantages of the private equity model (8:45), Wolfe's contrarian investing priority (16:26), Costco the optimal model (21:30).

More information: https://governancearbitrage.com/

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Almost all headlines from Puerto Rico are negative these days, but there is a way to profit from all the doom and gloom, according to Tobias Carlisle of Acquirers Funds. An insurance company is uniquely positioned to capitalize on Puerto Rico's recovery. Along the way, Tobias also discusses Tesla (and TSLAQ), his investment style, and other sectors that he finds interesting at present

Content:

Background on Tobias and his fund (0:56), the debate over Tesla (5:26), makeup of the long book and the case for Assured Guarantee (8:37), the specifics of Puerto Rico (12:00), possible target price for AGO (16:25).

Not intended as investment advice.

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Leverage, especially using borrowed money to increase returns, has a bad reputation that is no longer justified, according to David Kreinces of ETF Portfolio Management. In fact, proper use of leverage can help investors produce alpha in market environments where other strategies fall short.

Content:
Treasuries as a shock absorber, allowing for use of leverage with growth assets (2:55), why following price action is more important than monitoring news (7:11), including presidential tweets (9:11), background on David and his firm (11:40), why investors' continued fear of leverage causes missed opportunities (17:00), semiconductor stocks and indexes as the ultimate proxy for growth and artificial intelligence (20:33), current stocks in the portfolio (24:49).

Not intended as investment advice.

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Shares of AMC Entertainment Holdings (AMC) and Gogo Inc. (GOGO) have been beaten down pretty badly in recent years. But there is a lot that the market is missing, says this week's guest, Mark Jones of Pragmatic Capital.

What's been ailing AMC (2:40), why the cyclicality of the movie business (5:00) and Disney's production schedule (6:52) will help its cause. Jones's price target for AMC (9:20) and his research methods (16:30).

The case for Gogo (23:25), the backlog of demand (27:00) and his price target (30:08).

Not intended as investment advice.

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The metals and mining sector of the equities market has effectively gone nowhere for more than a decade. That may be about to change, according to Matt Zabloski of Delbrook Capital.

A supply/demand imbalance faces the copper market (4:30) and there are ways for investors to profit. Electric vehicles are part of what will drive demand (5:38), leading to higher prices (8:30).

Delbrook Capital's approach (10:37), the coming consolidation (11:48). Background on Delbrook (15:18). Devil's advocate (18:45). Best ideas and stock pick (23:08).

Not intended as investment advice.

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This year's rally in equity markets has not been equally kind to all sectors of the market. DowDupont Inc. has seen relatively muted returns this year, especially compared to the broader indices.

The company spun off Dow, its material science division, on April 1. The market has not been particularly impressed. Another spinoff, its agricultural business Corteva, will follow June 1.

This week's guest, Jim Osman of Edge Consulting Group, says this presents a buying opportunity -- for all three stocks.

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Chris Stanton, partner and chief investment officer at Sunrise Capital Partners, sat down with host Nathaniel E. Baker to discuss risks facing markets and the economy.

On the surface, the investing environment looks rather benign, with solid employment and consumer data easing recession fears. But the 2019 recovery in risk assets is at an important juncture. As the market looks for a catalyst that could lead to a "melt-up", pockets of risk are accumulating.

The chances of a significant liquidity event akin to the "taper tantrum" or even the 1987 crash are rising. Stanton tells listeners what to look for. The Russell 2000 Index may hold one clue...

03:03 - What are the Fed's options yields on the 10-year go to 3%?

05:40 - The upcoming "pivot points" that could lead to big corrections.

09:10 - The sell-off in bonds and ineffectiveness of Fed policy.

11:05 - Could the market be underpricing a liquidity event? The S&P "looks an awful lot like a spread triple top."

16:05 - Liquidity events, and the corresponding spikes in volatility, are becoming more frequent.

17:30 - Stanton discusses his background and Sunrise Capital's approach to investing.

21:40 - "The physics of markets." Risk is accumulating and the increasing likelihood of a selloff akin to what happened in the fourth quarter.

35:00 - The market continues to be Fed-dependent. A problem as it appears to be losing confidence with the current Fed chairman.

37:00 - The case for active management.

This podcast was recorded on Monday, April 22, 2019. 

 

Key points in this episode

Act I: Host introduces an area of conventional wisdom in financial markets or the economy, something that has perhaps already been priced in to markets. In this case: the inverted yield curve and what it is saying about (slowing) economic growth in the U.S. (1:41)

Act II: Enter the contrarian. In this case Barry Knapp of Ironsides Macroeconomics LLC. (2:20)

Break: Placeholder to shout out to sponsors and tell people how and where to follow the guest and his or her research. In this case please check out the guest: ironsidesmacro.substack.com (11:20)

Act III: Host attempts to play devil's advocate, questioning the contrarian's thesis . (13:25)

Act IV: Actionable insights. What concrete steps might investors take if the contrarian is correct? What stocks, bonds, indexes, sectors should they look to? (23:00)

Disclaimer: Nothing said here should be considered investment advice.

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