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.
- 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);