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The Contrarian Investor Podcast Posts

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

Published May 20, 2020

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represents half the country’s population, remains well below the middle class — and is stuck there, in part due to outdated demographic policies.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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Season 2, Episode 15: Healthcare, Tech Stocks May Not Be As Defensive As Believed

Published May 13, 2020

With Chris Brown of Aristides Capital

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

Update: This podcast episode has been transcribed! Read it here.

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: 

  • 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)

Highlights From Our YouTube Channel

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Not intended as investment advice.

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Season 2, Episode 12, Transcribed: The Next Stage of the ‘Market Melt-Up’ With David Hunter

Published May 6, 2020

Nathaniel E. Baker 0:36
David Hunter, Chief macro strategist at contrarian macro advisors. You were on the show last summer in August if memory serves, and you told listeners about your idea that there would be a dramatic melt up that would be caused by central bank liquidity, injections and other measures. And anybody who’s been paying attention to markets in the last couple of weeks, could reasonably point out that this is exactly what’s happened here with the Fed, and other central banks, mainly the Fed, stepping in to combat the coronavirus impact, and unleashing all kinds of liquidity. So, I guess that would be the first question for you is where we stand with this. And if this is indeed the start of this melt up?

David Hunter 1:37
Sure. Yeah, I think this is definitely the start of what I think will eventually become a parabolic melt up into a secular top. And in all honesty, when we talked last, I guess, late August, I didn’t anticipate the coronavirus by any means and didn’t anticipate that we’d get down under 2200 on the S&P, I thought we might in fact in January, February, March. I was talking about January, February, early March, I was talking about a correction back to 3000, maybe 2900. But I certainly didn’t see the the cascade that we we got. So, you know, the coronavirus certainly affected the path. But my target of 4000 plus on the S&P, which I had last summer is still my target today. We had another leg down. It took us down to a deeper bottom. But I think it didn’t change the fact that we are going to have this final melt up into a secular top, a top that I expect to be the high watermark for decades to come.

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MoreSeason 2, Episode 12, Transcribed: The Next Stage of the ‘Market Melt-Up’ With David Hunter
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