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Hard Assets the Place to Be in ’23: Kyrill Asatur, Centerfin (Szn 4, Ep. 34)

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Kyrill Asatur, co-founder and CEO of Centerfin, joins the podcast to discuss his view on asset allocation going into 2023: why he is bullish on hard assets like energy and bearish on fixed income — and why the inflationary environment is likely going to stick around.

Content Highlights

  • How Centerfin was set up coming into this year and what went into its contrarian decision to avoid fixed income (4:06);
  • Current views on the market after a tough year (5:25);
  • Centerfin’s take is to be long hard assets, including commodities and commodity-linked equities while continuing to avoid fixed income like bonds (7:44);
  • The environment is different now. There has been a regime change since 2017. Inflation can’t just be exported anymore (9:48);
  • There will likely be a recession. Once we emerge from it, leading industries will probably be different than they were in past recoveries (11:18);
  • Why Centerfin is bullish energy and how they are playing it (12:55);
  • Their chosen ETF to get exposure to clean energy (14:48);
  • There is no need to buy international (ex-US) energy stocks (16:36);
  • Short discussion on the concept of introducing different prices for different uses of energy (18:48);
  • Re-shoring from China with Apple (AAPL) moving all its production out of the country and how to potentially play that trend (20:46);
  • Background on the guest and what got him to start Centerfin (25:53);
  • Distressed investing remains out of reach for most investors but Centerfin is considering ways to change that… (30:52);
  • The bullish case for copper (39:13);
  • How best to gain exposure to uranium (40:00).

More on Kyrill Asatur and Centerfin

This podcast is for informational purposes only. Nothing here is intended as investment advice. Do your own research, make your own decisions.

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Prepare for a ‘Long Slog’ in Stock Markets as Fed Hikes Continue: Bob Elliott (Szn 4, Ep. 31)

Bob Elliott, chief investment officer of Unlimited Funds, joins the podcast to discuss his views on the Federal Reserve, inflation, the midterm elections, and why stocks have entered a long ‘slog’ for the foreseeable future.

Content Highlights

  • Investors have been conditioned for recessions to feature a fast decline in equity markets followed by a rapid recovery. This time around those dynamics are different (3:44);
  • There is no chance of a ‘Fed pivot’ coming anytime soon (7:58);
  • What about infighting at the Fed and within the FOMC? (11:03);
  • Yes, you need unemployment to increase for there to be any progress with inflation. Higher prices are no longer due to supply chain issues (13:57);
  • The Fed will raise either 50bps or 75bps at its next meeting and rates could easily go up to 6% (21:22);
  • Background on the guest and his ETF, the Unlimited HFND Multi Strategy Return Tracker ETF. Stock ticker: HFND (26:19);
  • The growing disconnect between hedge fund positioning and retail investors: Hedge funds are short bonds, long commodities, bullish gold, and are sitting on a bunch of cash… (36:21);
  • The Fed’s target rate for inflation is 2%, but that could change. That would bring a myriad of issues… (38:24);
  • It’s hard to get bullish about longterm bonds: right now and for the foreseeable future (40:54);
  • Investors continue to look for reasons that the economy is slowing and the Fed needs to reverse course. There is virtually no evidence of this happening (42:44);
  • The midterm elections are likely to lead to a split government. This brings tail risks that few people are talking about (44:50).

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Investors Are Ignorant, Fade Their Conviction: Jason Shapiro (Szn 4, Ep. 30)

Jason Shapiro joins the podcast to discuss his trading strategy, based on the simple premise that most investors are wrong most of the time. This approach requires trades to be crowded, which is decidedly (and surprisingly) not the case right now — with two possible exceptions.

Content Highlights

  • Most traders lose money. Shapiro seeks to capture these losses by going against the crowd (3:11);
  • He does this by monitoring the Commitment of Traders report for extreme positioning, which he then fades (4:03);
  • The thinking behind this? The crowd is wrong. “It’s really that simple.” The discounting method is not price but positioning (6:11);
  • Shapiro monitors 37 different futures markets. Two examples of where this approach worked in the past (7:03);
  • Right now “I’m seeing some pretty scary stuff, because you don’t have anybody crowded” in major asset classes (8:24);
  • One possible exception: lumber (11:08);
  • Background on the guest (16:35);
  • Patience is a virtue, especially for contrarians (27:28);
  • “I have contrarian views on everything…that’s how I develop my opinion.” People are wrong because they want others to guide them (31:00);
  • The set-up in cryptos is “massively dangerous” based on positioning in Bitcoin futures. This sets Bitcoin and cryptos up for a major drop… (36:36).

(On this last point, Shapiro shared the following chart)

Chart of crowded crypto positioning

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