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The Contrarian Investor Podcast Posts

Regional Bank Credit Risk, AI Hype, Trouble in Commercial Real Estate (Szn 5, Ep. 16)

Published June 20, 2023

With Chris Bemis, X-Cubed Capital

Chris Bemis, co-founder of X-Cubed Capital, joins the podcast to discuss his views on regional bank credit risk, the nascent bubble in AI tech stocks (and AI more generally), problems in commercial real estate, and how he applies his mathematics background to investing.

Content Highlights

  • Last September, X-Cubed’s credit risk signals flashed red over regional banks, causing the firm to put on some trades to profit. That opportunity has now run its course and the other side may hold more interest… (1:21);
  • AI tech stocks: It’s not 1999 but more like 1995 with the beginning of the seeds of a bubble. The firm is more bullish on mid-cap stocks in general (12:11);
  • Background on the guest (15:40);
  • The differences between a multi-manager approach to investing and multi-strategy and why the latter has advantages right now (19:46);
  • The bearish argument on office space and why he’s bullish homeowners (26:20);
  • Making use of mobile phone data and other ‘alternative’ data sources (30:00);
  • AI, artificial intelligence, and why it falls short in many investment approaches (33:18);
  • Some advice for math students from a mathematics academic (38:37).

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Inflation Will Persist Above the Fed’s Comfort Level (Szn 5, Episode 15)

Published June 7, 2023

With Naomi Fink, Europacifica Consulting

Naomi Fink, founder and CEO at Europacifica Consulting in Los Angeles, joins the podcast to discuss her view that inflation will prove more elevated and persistent than market participants are anticipating — and how and where this impact will be felt.

Content Highlights

  • Inflation caught investors by surprise and investors could be forgiven for thinking inflation will drop again. But inflation will more likely normalize around a higher rate (3:15);
  • There are multiple reasons for this: reversal of globalization, limits to technological advancements, supply shocks, geopolitical unrest, and labor supply shortages, to name a few (4:09);
  • Where does this leave Fed policy? (6:03);
  • Retailers have been reporting a consumer pullback on big ticket purchases: business cycle or inflation? (13:52);
  • Companies will need to innovate to deal with more persistent inflation and a skills shortage. Those that don’t will be left behind (16:34);
  • AI is not a cure-all and may in fact be mostly hype (18:23);
  • Background on the guest (24:53);
  • Japan and Japan stocks (28:36);
  • Social security cost of living adjustments are not keeping up with inflation. The impact (33:59);
  • What options do retirees have to maintain their purchasing power on fixed income? (38:17);
  • Financial literacy is vital but may be a double-edged sword… (46:28).

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AI is Overhyped as an Investment, Will Only Worsen Inequality (Season 5, Episode 14)Coverart, Season 5, Episode 14 feat Simon Johnson

AI is Overhyped as an Investment, Will Only Worsen Inequality (Season 5, Episode 14)

Published May 31, 2023

Feat Simon Johnson, co-author, ‘Power and Progress, Our Thousand-Year Struggle Over Technology and Prosperity’

MIT Economist Simon Johnson joins the podcast to discuss his book, ‘Power and Progress, Our Thousand-Year Struggle Over Technology and Prosperity’ and specifically why artificial intelligence is likely overhyped, and that not just from an investment perspective.

Content Highlights

  • Artificial intelligence’s default trajectory is about machine intelligence, code for replacing people with machines. Historically, this has not brought great things (1:21);
  • Indeed technological progress has not always benefited everybody, but just a small group at the top. Today’s advancements are no different (5:11);
  • Don’t expect a boost to business either. Productivity gains should be limited (9:17);
  • Some of the dangers of Chat GPT and Google’s Bard that is driving most business development around AI (20:12);
  • Background on the guest (24:26);
  • Thoughts on the current market environment and its potential to spill over into crisis (27:43).

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