The Contrarian Investor podcast gives voice to those who challenge a prevailing narrative in financial markets. Each episode features an interview with a hedge fund manager, investor, economist or other market participant. The goal is to educate all listeners with an interest in asset allocation and ultimately to provide actionable ideas to the institutional investor community.
Forget Inflation -- Deflationary Forces Are the More Vexing Issue, Says Emma Muhleman
40:03This episode brought to you by StockMarketHats.com. Enter the code "contrarian" at checkout for a 10% discount! This episode originally aired for premium subscribers on Nov. 11, the same day it was recorded, without ads or interruptions. To become a premium subscriber and gain access (as well as take advantage of a host of other benefits, including the Daily Contrarian briefing and podcast), sign up through Substack or Supercast. Emma Muhleman of Ascend Investment Management joins the podcast to make the contrarian argument that inflation is overrated, will not cause the Federal Reserve to raise interest rates, and that deflationary forces are the bigger worry for global financial markets. These deflationary forces are both short term (slowdown in China) and long term (demographics in the developed world). Much of the discussion centers around the former. Muhleman's comments are her own and not a reflection of her employer. Nothing here is intended as investment advice. Content Highlights (Spotify listeners can click on the timestamp to link to the start of the segment) The market is pricing in a series of interest rate hikes for the coming 24 months. But the Fed has backed off of a tightening schedule before (2:18); Bonds have been selling off, but investors will find themselves on the wrong side of this trade when Fed backs off of tapering (4:07); Inflation is a supply-side problem that the Fed doesn't have control of. Markets are too fragile to handle rate hikes (5:06); The latest FOMC meeting where tapering was announced "was probably the most dovish taper you could come up with" (9:20); Deflationary forces, starting with China, are a major issue the market is overlooking. This despite the best (non-publicized) efforts by the Chinese government (10:49); It's not just China though; demographics and debt are part of the longer-term trend toward deflation (19:19); Background on the guest (22:33); What about potential headwinds, from China or elsewhere? (24:58); Unwinding Evergrande: Where is the exposure? (29:05); How much longer can the Fed taper before their hand is forced to back off? (31:17); What indicators should investors keep an eye on to monitor this situation? (34:35). More Information on the Guest Twitter: @Emma_cfa; LinkedIn. mployer. Nothing here is intended as investment advice.
The Coming Stock Market Bust, With David Hunter, Contrarian Macro Advisors
34:55This episode brought to you by StockMarketHats.com. Enter the code “contrarian” at checkout for a 10% discount! This episode originally aired for premium subscribers on Nov. 4, the same day it was recorded, without ads or interruptions. To become a premium subscriber and gain access (as well as take advantage of a host of other benefits, including the Daily Contrarian briefing and podcast), sign up through Substack or Supercast. Note: The aforementioned service has nothing to do with David Hunter's newsletter. Individuals interested in finding out more about that service should contact David directly by Twitter direct message. David Hunter of Contrarian Macro Advisors rejoins the podcast to provide updates on his prediction that stock markets are in the final stage of a parabolic melt-up that will be followed by a global bust. Hunter's initial targets for the S&P 500, Dow Industrials, and other U.S. stock market indexes have been breached, causing him to provide new, even more bullish, targets. The bust will likely start with a 'second-quarter swoon' next year, caused by the Federal Reserve overreacting to inflation. The deflationary meltdown will then cause another overreaction by central banks and government fiscal policies. Not intended as investment advice. Content Highlights (Spotify users can click on the timestamp to link to the start of the segment in question) Hunter's new targets on the S&P, Dow, Nasdaq, and Russell 2000 (2:50); Oil and oil stocks have peaked for this cycle (6:50); The bust should happen about mid-way through 2022 and result in oil prices back in the mid-$20s range (8:25); The cycle will end because the Federal Reserve tightens interest rates due to inflationary pressures (10:28); Central banks around the world are withdrawing quantitative easing and some have even started to adjust interest rates higher. This will affect things and force the Fed's hand. Resolution of supply chain issues would increase the pressure (15:54); China will definitely play a major role in the bust, though Evergrande is probably just the tip of the iceberg (19:27); What happens after the bust is an unprecedented flow of liquidity. Yes, even more than COVID. There will be bank failures, though more in Europe and Asia than the U.S. (21:17); Central banks only have one tool to combat this, which is quantitative easing. They will be matched by fiscal stimulus. It will be "March of 2020 on steroids, basically. Multiple steroids" (26:07). More Information on the Guest Twitter: @DaveHContrarian (send him a direct message if you are interested in finding out more about his service).
3 Areas of Technology Investors Need to Watch, With Simon Erickson, 7investing
39:56This episode brought to you by StockMarketHats.com. Enter the code "contrarian" at checkout for a 10% discount! This episode originally aired for premium subscribers on Oct. 28, the same day it was recorded, without ads or interruptions. To become a premium subscriber and take advantage of a host of other benefits (including the Daily Contrarian briefing and podcast), sign up through Substack or Supercast. Simon Erickson, founder and CEO of 7investing, joins the podcast to discuss three areas of technological innovation and disruption that stand to transform the world of business as we know it. The guest identifies one stock from each area, with the understanding that it is not intended as investment advice. Content Highlights (Spotify users can link to the start of the section by clicking on the timestamp) Why focusing on technological change is contrarian (3:41); Idea No. 1: Buy now, pay later or BNPL. Disruptive to credit card companies (4:37); Several upstarts have 'cracked this code' but Erickson has one that he's been paying close attention to (5:57); Idea No. 2: Quantum computing (14:23); Background on the guest (22:25); Idea No. 3: Gene editing (25:24); How to go about picking entry points for investments in these areas? (31:30); What about cryptocurrencies and blockchain technologies? (33:47). More Information on the Guest Website: 7investing.com; Twitter: @7innovator; More on 7investing subscriptions here.
The Lessons From Iceland's Financial Collapse, With Jared Bibler
48:35This episode brought to you by the Me, Myself and AI podcast. To get episodes without ads or interruptions, and take advantage of a host of other benefits (including the Daily Contrarian briefing and podcast), consider joining our premium service. Prices start at $9/month. More information on our Substack and Supercast. Jared Bibler joins the podcast to discuss his book 'Iceland's Secret' and his experience living through that country's financial collapse in 2008. It was a very dark period in Iceland's history, with individuals losing homes and savings and not being able to buy food. The author experienced this first-hand, initially as an asset manager and later working for regulators seeking to bring the responsible parties to justice. The crisis in Iceland shocked the world but was quickly overshadowed by the collapse of Lehman Brothers in the U.S. Today it is largely forgotten outside of Iceland. But the author says his experience holds many lessons for the present day. If nothing else, his experience holds lessons for those interested in hedging against a total collapse of capital markets and civil society. Content Highlights (Spotify users can link to the start of the segment directly by clicking on the timestamp) Why Iceland's financial crisis remains misunderstood and not discussed while still holding important relevance to global capital markets today (2:36); Iceland as an extreme example of the contemporary world (7:51); Corruption unfortunately remains 'fairly endemic' worldwide in the guest's experience, which transcends several countries (12:43); The next crisis will make 2008 'look like a walk in the park' (14:27); Lessons for the prepper community: hard currency retains its value quite well in such crises (18:57); The crypto world is ripe for fraud and 'tethered' coins do not seem to offer the protection claimed (23:30); Background on the guest (29:21); How he's spending his days now and why ESG has the attention of global regulators (36:54); Insider trading, especially around M&A deals, is rampant (38:36); What has changed in Iceland, other than a tourist explosion (43:50). More Information on the Author Order the book online here; Website: IcelandsSecret.com; Twitter: @Jared_Bibler. Not intended as investment advice.
The Long Term Bull Case for Oil, With Todd Sullivan, ValuePlays.com
45:19This episode brought to you by StockMarketHats.com. Enter the code "contrarian" at checkout for a 10% discount! To get episodes without ads or interruptions, and take advantage of a host of other benefits (including the Daily Contrarian briefing and podcast), consider joining our premium service. Prices start at $9/month. More information on our Substack and Supercast. Todd Sullivan of ValuePlays.com joins the podcast to discuss his long term bullish views on oil. The guest also provides his favorite stocks -- all portfolio holdings of his -- for investors to take advantage of this trend. Content Highlights (Spotify users can click on the timestamp to link to the start of the section directly) Big picture elements of supply, demand, and infrastructure that are driving the long term bull case for oil (2:50); What about the potential for an economic slowdown in the U.S. and more importantly China? How might that impact things? (7:39); Background on the guest and how he turned his passion as a blogger and investor into his current position (11:17); The three energy names he really likes right now (18:51); Energy has been unpopular for some time and people are under the illusion that gas and oil are going away. "Nothing could be further from the truth." (25:28); Why transport companies are more of a pure-play on energy prices than drillers (29:30); $100/barrel oil is a "realistic scenario" and prices could stay high after that as the macro outlook remains constructive (37:17); The bullish outlook for the cannabis industry in the U.S. -- this will be the topic of a future episode (42:49). More Information on the Guest Website: ValuePlays.com; Twitter: @ToddSullivan. Special Offer for Listeners Subscribe to ValuePlays at the original rate (discount of 63% over current prices). The guest discusses specifics of the service starting at (32:04).
The Transformation of the Hedge Fund Industry, With Dominique Mielle
48:54Get this podcast episode without ads and receive episodes up to a full week before regular subscribers. You also get the Daily Contrarian briefing and mini-podcast each morning. Sign up through our Substack or Supercast. Dominque Mielle joins the podcast to discuss the transformation of the hedge fund industry, as encapsulated in her book 'Damsel in Distressed: My Life in the Golden Age of Hedge Funds.' Mielle's career in hedge funds spans three decades, a period of dramatic growth that has culminated with many investors today questioning whether it still makes sense to allocate to the asset class -- to the extent that it can even be called an asset class. The guest says hedge funds still have value in certain circumstances, but there are many forces working against them. She also has some views on markets and even cryptos that are discussed in the back end of the episode. Content Highlights (Spotify users can click on the timestamp to link to the start of the segment directly) Her reasons for writing the book: very few women in hedge funds and the critical growth periods she observed in the industry (2:05); So does the hedge fund industry have a future? (5:15); What exactly has changed in the last 20+ years to make hedge funds less compelling? (8:02); There is certainly less mystique around hedge funds, and the media now reports returns and other things regularly -- something the host himself has been guilty of. How has that affected things? (13:54); Okay, so what is the value proposition for hedge funds? (18:58); Background on the guest (25:36); What if a woman wrote a 'Liar's Poker' of the hedge fund world? And why aren't there more women in finance? (31:30); The guest's view of markets at present. Tapering is critical (40:23); Her views on cryptocurrencies (44:47). More Information on the Guest: Website: DominiqueMielle.com; Book: Damsel In Distressed, by Post Hill Press; Twitter: DominiqueMielle. Not intended as investment advice.
Dangers Lurk in Market Structure's Changing Dynamics
43:12This episode brought to you by the Connecticut Economic Literacy Initiative. The get this podcast without ads or announcements, and a week before regular subscribers, sign up for the premium service through our Substack or Supercast. Michael Green, portfolio manager and chief strategist at Simplify Asset Management, joins the podcast to discuss the changing dynamics of market structure and how these are creating the potential for havoc. Content Highlights: (Spotify users can click on the timestamp to link to the segment directly) Market structure: what it means and how it has changed (3:30); How passive investing pools are changing the equation (6:26); How Tesla (TSLA) is the perfect case study for this phenomenon (8:39); The Fed's impact when it comes to the bond market. This has ripple effect (13:02); The interest rate and inflation outlook in the U.S. (15:34); Background on the guest (20:55); Passive investing has caused a host of confusing signals where the market cycle is concerned (24:37); Business cycles are still alive and well, and this can of course impact the market. Where that stands today (30:05); Market 'skew' is dramatically higher and chances of a collapse are increasing. "The market senses something is wrong." (34:31). More Information on the Guest: Twitter: @profplum99; Website: Simplify.us.
The 'New Normal' of Blue-Collar Labor Shortages, With Gad Levanon, The Conference Board
35:05This episode brought to you by the Connecticut Economic Literacy Initiative. The get this podcast without ads or announcements, and a week before regular subscribers, sign up for the premium service through our Substack or Supercast. Gad Levanon, head of Labor Market Institute at The Conference Board, joins the podcast to discuss his views of employment trends. Levanon's analysis differs from the consensus view of labor markets. In his view, unusual demographic and educational trends are causing a 'new normal' of shortages among blue-collar workers. These jobs can be expected to see fast wage growth, bringing a host of restraints on the next stage of economic expansion. Content Highlights: (Spotify users can link directly to the start of the segment in question by clicking on the timestamp below) The 'new normal' of labor shortages (3:35); The economic impact of rising wages for blue-collar workers: corporate profits and higher consumer prices (7:29); Automation has the potential to help the trend somewhat, but there are reasons to be skeptical (10:37); How close is the U.S. to reaching full employment? (14:29); What all of this says for the next stage of the economic cycle (16:57); Background on the guest (20:22); The 'work-from-home' trend and how that is impacting things (22:47); Other trends in employment and labor markets (27:27); The guest's primary concerns about the economy and society at present (31:22). Background on the Guest: The Conference Board website and bio; Forbes contributions.
When Investors Become Gamblers -- And Why It's Happening Now
47:32This episode brought to you by the Connecticut Economic Literacy Initiative. The get this podcast without ads or announcements, and a week before regular subscribers, sign up for the premium service through our Substack or Supercast. William L. Silber, author of the book ‘The Power of Nothing to Lose: The Hail Mary Effect in Politics, War, and Business,’ joins the podcast to discuss his thesis that individuals, including investors, can become reckless gamblers if they have nothing to lose. Silber has a career dating back to 1966 in academia and Wall Street. His comments are pertinent in the present day of cryptocurrencies, the ‘retailization’ of options trading, NFTs, and meme stocks, among others. So is his recommendation (not investment advice) to reduce risk exposure. Content Highlights When people have downside protection and limitless losses, “they tend to become reckless and almost gamblers” (3:48) Rogue traders and the skewed payoff that makes them go rogue (14:41); What to make of the present day and investors’ collective risk appetite, especially regarding meme stocks? (17:32); Background on the guest (24:55); A valuable lesson learned at Odyssey Partners in the 1980s: what’s an exit strategy? (27:47); Is this a time for investors to reduce risks and sell stocks? (30:26); Precious metals and their place in a modern portfolio (36:52); More Information on the Guest Website: WilliamLSilber.com; Wikipedia; Places to buy the book; LinkedIn.
Bubbles Lurk in Sovereign Debt, Financial Engineering, With Michael Ehrlich
32:35Check out the new Substack and sign up to listen without ads or announcements -- and get the Daily Contrarian briefing and podcast each morning. Michael Ehrlich, director of the Leir Center for Financial Bubble Research at the New Jersey Institute of Technology, joins the podcast to discuss his views. Dr. Ehrlich has identified two areas of concern: sovereign debt and financial engineering. This is not his only area of interest however, as Dr. Ehrlich is passionate about early-stage venture/angel investing, which guides the discussion in the second half of the episode. Content Highlights It's been a long time since the last sovereign debt crisis. Too long (1:47); Keep an eye out for private equity as well (8:02); Bubbles are part of the market and can even be viewed as a good thing. Until they aren't (9:44); SPACs and cryptos are two examples of financial engineering potentially gone awry (10:56); Background on the guest (15:07); Venture capital has historically controlled early-stage investing. But this is changing (18:07); Financial technology, aka 'fintech' is one area Dr. Ehrlich likes a lot (20:20); What about driverless cars? (23:35) For More Information on the Guest NJIT.edu biography; Henry J. and Erna D. Leir Research Institute for Business, Technology, and Society website. More Coverage of These Topics S3E12: The Real and Present Regulatory Risk Facing Cryptocurrencies; S2E35: How Bubbles and False Narratives Made Financial Markets; S2E4: Private Credit is Fentanyl.