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Season 3, Episode 2: What Will Likely Prick The Everything Bubble, With Chris Stanton, Sunrise Capital

Published January 27, 2021

Chris Stanton of Sunrise Capital rejoins the podcast to discuss his views of what will upend the raging bull market in risk assets.

Content Segments

  • How we got here: the market price action is similar to late summer, 2019 (3:49);
  • However, there are some big differences between then and now, starting with volatility (5:44);
  • What’s awry? Two things should have people’s attention. One is that the retail market has figured out how to achieve leverage. The second is market structure (10:46);
  • Big market makers are being eliminated by the day, including hedge funds (16:59);
  • Where are the investors who have been moving the market? Not in the U.S. (20:38)
  • Believe it or not, U.S. investors do not appear to be “all in” on the bull market yet (24:48);
  • Central banks are setting up everybody’s portfolio to be long. At the same time passive indexing has eroded cash reserves (29:57);
  • The “terrible” setup is in place: Vol is elevated against what it has done historically, the market structure is not set up to provide liquidity when it is needed most, and investors are in increasingly crowded trades (37:57);
  • What ends the bull market? First thing could be a resurfacing of trade tensions with China (45:56);
  • Vaccines could provide a “straight line” out of the coronavirus crisis, removing the need for ultra-loose interest rate policy (49:00);
  • It’s only going to take one sentence in the Fed minutes to spook markets. Watch for the whole thing to be politicized too (50:49);
  • The next correction we see is not going to be 5%. “I will bet you it’s 15…it’s going to scare the living daylights out of you again.” (53:39);
  • Commercial real estate is something else worth watching (57:04);
  • For now watch for the bull market to run until March. If that happens, short opportunities should be abundant (1:00:01);
  • Finally, keep an eye out for a currency crisis to trip up investors (1:02:02).
MoreSeason 3, Episode 2: What Will Likely Prick The Everything Bubble, With Chris Stanton, Sunrise Capital
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Season 3, Episode 1: The Biden Administration and Risks to Global Growth

Published January 21, 2021

With Barry Knapp, Ironsides Macroeconomics

Barry Knapp of Ironsides Macroeconomics rejoins the podcast to discuss his view on “policy tremors” that could upend economic and risk asset growth in 2021.

(Barry’s dog Oliver makes a brief appearance as well).

Content
(Spotify users can skip directly to the segment by clicking on the timestamp)
  • The current reflation theme is part of a recovery from what was actually a two-year recession in global manufacturing, trade, and capital spending (4:19);
  • The Federal Reserve will initially be pleased with rising inflation, having slayed the deflation boogeyman. This will eventually morph into discomfort (first from regional bank presidents) and concerns that inflation is moving “too far, too fast” (11:43);
  • Once this happens, Fed officials will begin discussing “policy normalization” and real rates will start to move, triggering a risk-off event (13:19);
  • The Georgia elections the first week of the year were a kind of “sneak preview” of this event, but look to mid-year for the real McCoy (16:37);
  • Another important indicator: Watch house prices through the spring selling season (20:40);
  • Two details of President-elect Biden’s $1.9 trillion stimulus proposal that are not fully appreciated by the market (21:41);
  • The Democrats will likely ask for more than Republicans are willing to give, triggering reconciliation that would be a rude awakening for the market (28:38);
  • If the $1400 stimulus checks go through it may lead to another “speculative blow off” (30:50);
  • There is no indication President-elect Biden is willing to roll back tariffs on China, though he could re-engage in TPP. But anybody expecting a broader unwinding of the trade war “is pretty off-base” (33:00);
  • Look for further USD weakness, particularly against the yen and the euro (37:57);
  • Favorite asset classes for 2021 (41:09)
MoreSeason 3, Episode 1: The Biden Administration and Risks to Global Growth
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Season 2, Episode 39: How To Find Compounders In Unusual Places

Published December 31, 2020

With Artem Fokin, Caro-Kann Capital

Artem Fokin of Caro-Kann Capital joins the podcast to discuss his strategy of finding compounders in unusual places, specifically those listed on the “wrong” exchanges.

Content Segments

  • “What do I mean with the wrong exchange?” (3:42);
  • Why would a U.S. company not just list in the U.S.? Isn’t there more upside? (7:19);
  • Why the Australian exchange is one of the guest’s favorites for finding these companies (13:41);
  • What are the other criteria he looks for? (22:05);
  • What about valuation metrics for choosing an entry point? (31:06);
  • Background on the guest (35:05);
  • More information about his fund, which also focuses on special situations (37:18);
  • The focus has remained consistent, due to core competence (39:35);
  • One hidden gem, a portfolio holding, that he discovered recently: a software company with solid growth rate early in its lifecycle that trades in Australia — and is already profitable (41:19);
  • More discussion of the company, its customer base and how that has changed post-COVID (48:52).
MoreSeason 2, Episode 39: How To Find Compounders In Unusual Places
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