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Month: May 2020

Season 2, Episode 15, Transcribed: Chris Brown on Healthcare, Tech Stocks

Moderator 0:02
Welcome to the Contrarian Investor Podcast. We give voice to those who challenge prevailing sentiment in global financial markets. This podcast is for informational purposes only. Nothing on this podcast should be taken as investment advice. guests were not compensated for a period, nor today’s supply payment in order to appear. Individuals on this podcast may hold positions and securities that are discussed. This is our urge to educate themselves and make their own decisions. Now, here’s your host, Mr. Nathaniel E. Baker.

Nathaniel E. Baker 2:24
Chris Brown of Aristides Capital Management. You are the manager of a long short equity fund. And interestingly enough, this fund has produced positive returns every year since inception in 2008. And I wanted to get your views here on a number of things. First of which is the fact that if I understood correctly, you are now bearish on two sectors that have done very well over the last month and that people seem to To believe, will continue to do well regardless of what happens in the broader economy. I’m talking here about tech it, and healthcare. And especially in the case of healthcare, this is something that is seen as being very much economy agnostic. Something that can, as I said, do well, even when the economy is in a downturn or a recession. And these are two areas that investors have flocked to in the equity markets over the last month or so, as I mentioned, but your views are different here. So I thought it’d be really interesting if you could share that with us.

Chris Brown 3:43
Yeah. Hey, Nat. Thanks for having me on. We’re, we’re working very hard to try to try to counter our record of not having a losing year. 2020 has been brutal so far. So yeah, I mean, I think we’ve always been kind of a very value focused, firm. And you know, for a long time, even before I had a hedge fund did my personal investing, I’d like to kind of buy the assets that were cheap into, stay away from the classes that were expensive. And, you know, I think right now, it’s funny because people see an economic slowdown. And so of course, you want to like race away from things that are cyclical or that are economically exposed. And I think people are racing towards some of the things that are, you know, seen as more defensive. And interestingly, I think whoever tweeted that this is like if the Great Depression and the NASDAQ bubble had a baby was just so spot on with that, because that’s kind of that’s what you’re seeing.

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Season 2, Episode 17: Finding ‘Disruptive Ideas’ In Autos, Media, Telecoms

With Vitaliy Katsenelson, author of ContrarianEdge.com

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 that can be expected to emerge.

Content Segments

  • 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)

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Not intended as investment advice.

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Season 2, Episode 16: Chinese Economic Reforms Are Already a Thing of the Past, With Dexter Roberts

The author of “The Myth of Chinese Capitalism” discusses the ramifications of his thesis

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:

  • 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)

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