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Month: March 2021

Contrarian Calls, Revisited: Biden Victory and the ‘Rotation to Value’

Published March 30, 2021

Scott Colbert, chief economist at Commerce Trust Company, on the eve of last November’s presidential election predicted a ‘blue wave’ followed by a rotation into value stocks.

“The Democratic turnout is going to be much larger than it was, and that’s enough right there to carry most of those swing states back to the Democratic side,” Colbert said last Oct. 28. “You’re not going to have enough pro-Trump voters to offset that Democratic wave.”

This would lead to “Democrats rolling this thing” and taking back the Senate as well as the White House. The biggest change for markets would be a rotation from growth to value. “It’s the combination of the election and a vaccine,” Colbert said.

Corporate America would be punished in the terms of higher tax rates, which would affect growth companies more than any other segment of the market. This would make growth stocks less appealing to investors. Value stocks would benefit from this development.

“If you’re looking for a contrarian play, I think it’s the rotation to value,” Colbert said.

MoreContrarian Calls, Revisited: Biden Victory and the ‘Rotation to Value’
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Season 3, Episode 7: David Hunter Says Markets to Peak in 2nd Quarter Before Bust

Published March 24, 2021

David Hunter of Contrarian Macro Advisors rejoins the podcast to update listeners on his prediction of a ‘parabolic melt-up’ in risk assets that will be followed by a ‘deflationary’ bust.

Over the course of the 40-minute conversation, Hunter also updates his forecasts for rates, technology stocks, commodities, and more.

This podcast was recorded the morning of Monday, March 22 and made available to premium subscribers that same day.

Content Highlights
(Spotify users can click on the timestamp to link to the start of the segment directly)
  • The coming ‘parabolic melt-up’: new targets for stocks and bonds and timing (3:01);
  • What will cause the bust: The Fed will be forced to tighten, despite chairman Powell’s current (sincere) views. This will not likely be by raising interest rates but by tapering bond purchases (7:01);
  • Unlike many of his predecessors, Powell is actually trying to be transparent so those conspiracy theories (including one voiced by the host) are probably wide of the mark (9:36);
  • “It won’t take a big tightening to send us back in the other direction in a hurry.” People are underestimating how fast this can happen (16:37);
  • For now the stimulus checks and reopenings have not worked there way through the economy yet. They may not have even started. This will lead to the “final, vertical phase” of the melt-up (21:48);
  • The coming bust will see a 80% correction, peak to trough (25:14);
  • What comes after that: the deflationary bust (32:02).
MoreSeason 3, Episode 7: David Hunter Says Markets to Peak in 2nd Quarter Before Bust
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Season 2, Episode 30 Transcribed: David Hunter on Why ‘The Real Melt-Up is Still Ahead of Us’

Published March 19, 2021

This transcript was made available immediately after the episode aired to premium subscribers. Become one here for just $9/month or $99/year, or $199 lifetime and get a host of other benefits including the new daily podcast released each market morning by 7 a.m. 

Update: David just guested on another episode of this podcast, which is now available to premium subscribers, where he updates his views.

David Hunter of Contrarian Macro Advisors rejoined the podcast to update listeners on his vision of a “parabolic melt-up” in risk assets that will presage the next market crash.

Nathaniel E. Baker 0:36
I am here with David Hunter of the contrarian macro advisors, and author of the Contrarian Value Advisor newsletter. David, thank you so much for rejoining the Contrarian Investor Podcast. This is your third visit, which if I’m not mistaken, you are the first three time guests, so congratulations on that.

MoreSeason 2, Episode 30 Transcribed: David Hunter on Why ‘The Real Melt-Up is Still Ahead of Us’
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