David Samra, Portfolio Manager of Artisan Partners’ International Value Fund, speaks with Real Vision managing editor Ed Harrison about the subtle art of value investing. Samra, who defines value investing simply as buying something well below its intrinsic value, shares the four criteria he and his fund use when looking at stocks: undervaluation, quality, financial strength and management alignment. He and Ed also discuss how investors can avoid the pitfalls of so-called “value-traps” – i.e. when a stock is cheap because there’s a reason it’s cheap. Lastly, Samra analyzes two companies that are in his fund’s portfolio: ABB and Compass Group PLC. Filmed on August 3, 2020.
Parrilla and Pal -- A Macro Masterclass in Portfolio Construction and Management
Diego Parrilla, portfolio manager and author of "The Anti-Bubbles" and "The Energy World," returns to discuss his poignant predictions that are coming to fruition one-by-one in this conversation with Real Vision CEO and co-founder, Raoul Pal. As well, Parrilla gives a master class on how he has developed his own macro framework and the subsequent portfolio construction and management that has served him extremely well both before and after the March crash. After establishing his current outlook, Parrilla focuses on the 5% of his portfolio dedicated to finding outsized returns using options and what he calls the goalkeepers of your portfolio. Filmed on August 3, 2020.
With valuations stretched, economic turmoil affecting cash flows for huge swaths of the global economy, and high-profile frauds like Wirecard and Luckin Coffee making headlines, it seems like high time to dig in and find the next big short. Quinton Mathews, founding member of boutique investment advisory firm QKM, would say otherwise. In this interview with Real Vision’s Max Wiethe, Mathews argues that although researching, publishing, and trading based on your own activist short seller reports can be profitable and fulfilling work, the path is filled with pitfalls like lawsuits and regulator investigations that might not have factored into the P&L you envisioned. He walks viewers through his own journey learning the hard way about the unforeseen costs of short selling, the larger problems within the financial system related to regulation and enforcement, and the epiphanies he has had about shorting at different points in the economic cycle. As well, Mathews puts forward the high-minded goal of starting a dialogue with corporations, regulators, and activist short sellers to improve the system for all market participants. Filmed on July 22, 2020.
Marko Papic and Mike Green -- The Next Decade for Geopolitics and Markets
We can all remember when geopolitical tensions and trade wars were the most important headlines seeming to move global markets up or down depending upon their tenor, but recently the global pandemic and the associated policy responses have brought the focus home with all eyes squarely on domestic fiscal policy. In this interview with Mike Green of Logica Capital Advisors, Marko Papic, partner and chief strategist at Clocktower Group, looks forward at the coming decade of the 20's and explores the growing importance of government consumption and investment to GDP, the countries and assets that will emerge as winners and losers from the rewiring of the global economy, and why the cold war is a poor analogy for U.S. relations with China. As well, they discuss why news of the European Union’s death has been greatly exaggerated and much more. Filmed on July 29, 2020.
Rob Arnott -- "The S&P 500 Index is a Growth-Tilted, Momentum-Chasing, Active Strategy"
Rob Arnott, founding chairman of Research Affiliates, is one of the most influential quantitative investors and researchers of the last 30 years, having produced over 100 academic papers in a career that began before the term quant had even been coined. In this interview with Mike Green, chief strategist and portfolio manager at Logica Capital Advisors, Arnott argues that the current period is extremely reminiscent of the late 90s, the last time that value investing was declared surely dead. Together Arnott and Green discuss the structural factors related to indexing that have caused the return of calls of the death of value and debate whether these forces can be calmly unwound by the natural mean reverting tendencies of markets or whether the freight train of "passive" indexation has too much steam to be stopped by anything less than a catastrophic crescendo with an abrupt and devastating end. Filmed on July 28, 2020.
The Spirit of St. Louis: A View From Inside the Fed
David Andolfatto, economist and senior vice president at the Federal Reserve Bank of St. Louis, joins Pedro da Costa, senior reporter at Market News International, to give a peek behind the curtain into the Fed’s monetary policy at this unique market juncture. Andolfatto analyzes the most recent economic data and estimates that we are headed towards a “W-shaped” recovery. He then describes the remaining tools the Fed still has at its disposal. Da Costa and Andolfatto also analyze the pandemic as an accelerant of secular trends, such as working from home and rapid adoption of technology, as well of the lasting impacts of this acceleration. They also explore helicopter money, the commoditization of consumer loans, as well as the looming threat of inflation. Filmed on July 10, 2020.
Policy Response to COVID-19 and the Fate of the United States
Mike Green of Logica Capital sat down with Srinivas Thiruvadanthai, director of research at the Jerome Levy Forecasting Center, in the last interview to be filmed in Real Vision's studios before the world and our daily routines would be drastically changed by unforeseeable total lockdowns. A lot has changed since then, and in this new interview, they reexamine their outlooks with the advantage of fresh data. Together they discuss the side effects of policies like total lockdown, increased unemployment insurance, and PPP while also examining the social and economic undercurrents that, although accelerated by COVID-19, were established long before it arrived on our shores. Using historical parallels to the Roman Empire, Sri and Mike also think about their long-term outlooks for the U.S. and its currency, taking a view that the U.S. is not in its dying days. Filmed on July 23, 2020.
The global economy had been running higher for over a decade, and the coronavirus has been a major speed bump. But what happens when central banks have replaced the airbag with a dagger? This is the very question that Hugh Hendry, founder and former CIO of Eclectica Asset Management, explores alongside Luke Gromen, president and founder of Forrest for the Trees. Hendry and Gromen explore the fate of the U.S. dollar through the lens of Charles Kindleberger’s theory about “monetary hegemony.” They analyze the various interest rates and current accounts of different countries and break down how these nations manage their exposure to commodity risk. Filmed on July 20, 2020. Hugh’s report, “The Dawn of Chaos,” can be accessed here: https://rvtv.io/3fX1uHd
Simon Dixon, CEO of bnktothefuture.com, joins Real Vision CEO, Raoul Pal, to break down the intersection of the crypto world and the world of traditional finance. Starting his career in investment banking and joining the monetary reform movement along the way, Dixon understood early on the shortcomings of the fiat money system. He and Pal talk about applying traditional financial ideas to the crypto world and argue that doing so will create a stronger financial system for the future. Pal and Dixon discuss the early days of bitcoin, the intersection between central banks and crypto technologies, and their ideas about the relationship between bitcoin, dollars, and gold. Finally, they talk about how the principles of behavioral economics could impact the interplay between fiat currencies, cryptocurrencies, and the composition of future of financial markets. Filmed on July 17, 2020.
Druckenmiller Protege on Tech Investing and Developing Your Own Framework
We all get our start somewhere, and often the formative experiences of our early years shape our career path for years to come. Beeneet Kothari, managing partner at Tekne, was fortunate enough to spend a large chunk of his formative years at Stanley Druckenmiller's Duquesne Capital where he became the youngest portfolio manager in the history of the firm. In this interview with Christian Alexander, headhunter and author of Macro Link, Kothari outlines his biggest takeaways from working with legends of finance and eventually starting and running his own successful fund. He explains why some of the most important lessons he learned are not hard and fast rules but ways to think, and why even after working at one of the most successful macro shops in the world, he built his fund with a narrow focus on his first love of tech investing. Additionally, he provides his views on bargain hunting, diversification and portfolio concentration, provides his outlook for technology investing in general, and argues against thinking of technology as a sector in the traditional sense. Filmed on July 15, 2020.
Just how severe are the risks in today's market – and what can investors do to protect themselves against them? Sven Henrich, founder of Northam trader, joins Real Vision CEO Raoul Pal to explore these questions. Raoul and Sven analyze the current market landscape, looking at the equity market’s multiple expansion, the flashing warning signals in the bond market, and the flood of central bank liquidity keeping everything afloat. They examine the risks and rewards of shorting equities, and explore whether it is wise to take an observationally-bearish view and implement it into a tactically-bearish view. Sven and Raoul also look at a wide variety of charts in order to incorporate technical indicators within their macro framework. Filmed on July 14, 2020.
The Austrian Perspective on Recoveries, Bubbles, and Monetary Policy
For decades, the schools of economic thought that have informed monetary and fiscal policy decisions have been decidedly not Austrian; but, outside of the echo chambers of Washington D.C., Austrian School economics is in a boom as academics and civilians alike see the predictions and promises of the mainstream fall short. Guided by his Austrian views, Robert P. Murphy, senior fellow at the Mises Institute, has been astute with many of his predictions of the side effects of mainstream economic policies. Together with Real Vision's Ed Harrison, Murphy reintroduces the core of Austrian economics and compares and contrasts with other major economic schools of thought in relation to how each try to make sense of past and recent economic developments and the responses to them. He also attempts to answer the question of whether the Fed's monetary bazooka has ushered in a swift end to the recent business cycle and set us on course for another underwhelming economic expansion. Filmed on July 14, 2020.