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Bearish Indicators Abound, With Downside Risks for Stocks: Ayesha Tariq (Szn 4, Ep. 15)

Published May 31, 2022

Ayesha Tariq of Keystone Consulting joins the Contrarian Investor Podcast to discuss her bearish views on the global economy and on stock markets, what investment options she prefers right now, and why work-from-home will not persist (or at least not at current levels).

Content Highlights

  • The idea of a ‘Fed pivot’ away from higher rates is baseless. The Fed has no choice but to raise rates (3:01);
  • What about inflation having peaked? Won’t that remove some pressure from the Fed? (8:35);
  • Unemployment is due to rise, with companies soon having no choice but to lay off workers — but this won’t stop the Fed either (11:28);
  • Markets had a good week. Did we have the bottom already? (13:57);
  • What about commodities? A potential bright spot due to structural issues? (15:32);
  • Background on the guest (21:06);
  • What are some of the best options for investors in light of all this? (23:19);
  • Real estate investment trusts are one good option, especially commercial real estate. Work-from-home was a phase that will be scaled back soon (26:25);

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Not intended as investment advice.

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The Coming Credit Crunch and Death of Unicorns: Leo Schmidt (Szn 4, Ep 11)

Published April 18, 2022

Leo Schmidt of River Eddy Capital Management rejoins the podcast to discuss the coming credit crunch, its impact on stock market sectors, and where to invest to protect one’s portfolio.

Content Highlights

  • So-called “unicorn” companies, or the darlings of the VC crowd, and others that cannot generate cashflow, will face a tough reckoning (3:17);
  • Undermining this is “a complete change of psychology” in terms of velocity of money (6:27);
  • What if the Fed reverses course? It’s not so simple (8:52);
  • Oil is a short: “Oil is the ultimate liquid commodity” but there is a place for pipeline stocks… (11:38);
  • What stocks can thrive in this type of environment? Look first to medical company spin-offs (19:13);
  • Another area to look: Business development companies, or BDCs. This is a risky part of the market but there is at least one BDC making first-lien loans, which are the safest part of the capital structure… (26:23);
  • Quick epilogue on China’s latest Covid lockdown. There are ways to play the move away from supply chain issues that result (35:58);

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The Fallacy of Renewable Energy: Leigh Goehring, Goehring & Rozencwajg Associates (Szn 4, Ep 10)

Published April 6, 2022

Leigh Goehring, managing partner of Goehring & Rozencwajg, joins the podcast to discuss his view that most renewable energies are ineffective at reducing carbon output and pointless as investments.

Content Highlights

  • The consensus opinion is that renewable energy will solve many of the problems of CO2 production and energy needs. This is false (3:12);
  • The “terrible energy efficiency” associated with renewables will make the world poorer (5:00);
  • What is the problem with solar and wind and why are they so inefficient? (7:20);
  • It’s no coincidence that the energy crisis started in Germany, which is now forced to import coal (12:20);
  • Vaclav Smil and the premise that there has never been a new technology with inferior energy efficiency that displaced the old technology (13:59);
  • The ulterior motives behind China’s green energy push (18:33);
  • The “great hope” for a Moore’s Law of wind mills and solar panels is a fallacy. Input prices have declined because energy prices have (21:05);
  • Where does that leave electric cars? (25:00);
  • Background on the guest (33:42);
  • What parts of the energy industry are better targets for investment right now? Look to uranium for starters, “the perfect solution to our problems” (37:17);
  • Copper is “the quintessential green metal” also facing a supply/demand imbalance. Also agricultural commodities, grains, fertilizers, nitrogen, and potash (41:26);
  • Mosaic (MOS) is one of the world’s largest phosphate and potash producers, and a stock the guest is particularly bullish on — it trades at just 5x earnings versus 25x at the peak (47:07);
  • An agricultural crisis could soon be upon us, leading to hoarding of supplies (49:58).

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