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The Contrarian Investor Podcast Posts

Season 2, Episode 3: News Headlines Are a ‘Subtle Fallacy’ Confounding Investors

Published January 29, 2020

Nicholas Reece of Merk Research says news has no real impact on the global economy or markets

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.

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Season 2, Episode 2: Energy Markets at a Turning Point, With Economist Peter Sainsbury

Published January 22, 2020

The history of tobacco companies and lead markets may hold lessons for investors

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.

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Season 2, Episode 1: The Next Market Meltdown is Coming

Published January 16, 2020

Sunrise Capital’s Chris Stanton on the What, When, and Where

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)

Highlights From Our YouTube Channel

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

Not intended as investment advice.

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