Kevin Rendino of 180 Degree Capital joins the podcast to discuss reasons for optimism (yes, optimism) in markets and why we may have already reached “peak pain.”
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);
Quick Highlights From Our YouTube Channel
Leo Schmidt, chief investment officer of River Eddy Capital Management, favored energy, aircraft leasing and 5G infrastructure development stocks in a February 2021 episode.
Among energy stocks, Schmidt liked natural gas transmission company Equitrans Midstream (ETRN).
“No matter what you think about the price of natural gas, it needs to be moved,” he said. “And we have the cheapest natural gas in the world, except for Saudi Arabia.”
Airline leasing companies were a “fantastic idea” due to “pent-up demand.”
His picks were AerCap (AER) Air Lease Corporation (AL).
Schmidt also said 5G infrastructure developers would be big players, with Nokia (NOK) and Ericsson (ERIC) at the forefront.
“Interestingly, Nokia is the only one out of those three that has supply in the United States to all the legacy carriers,” he said.