September was a “fake out sell off,” says David Hunter.
David Hunter of Contrarian Macro Advisors rejoins the podcast to update listeners on his vision of a “parabolic melt-up” in risk assets that will presage the next market crash.
What we’ve seen since late March was not the real melt-up, Hunter says. Most of the gains are still ahead, in fact the coming months should see the final (and most dramatic) period of the rally. Then things get ugly.
Christopher Brown of Aristides Capital joins the podcast to discuss his investment strategy, which has produced positive returns every calendar year since 2008.
Update: This podcast episode has been transcribed! Read it here.
In Brown’s view, healthcare and information technology stocks should not be treated as defensive investments that will protect portfolios in times of stress — especially after their recent run-up. There are reasons many companies in this sector are overvalued and could see their shares drop as the economy begins to see further difficulties from coronavirus.
Aristides Capital has an active short book, which framed most of the second half of the conversation.
Why investors’ thinking about defensive stocks may be misguided (4:49)
Growth stocks’ recent performance is reminiscent of the late-1990s tech bubble (7:05)
The concerns with healthcare stocks (11:45)
Background on the guest (15:07)
Some of the red flags short sellers look for and why the “big picture” is often more pertinent (20:22)