Positioning For The New Post-Election Market Regime | Weekly Roundup
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What is up, everybody? Welcome back to another round up petition of four guidance.

You got we have R F K, R F K in .

the house today.

yes. So .

good. And so how do .

americans feeling today? This week?

I don't want strong. Yes, we're good. I feel like, you know, austerity friday, I feel like i've done a lot of Victory lap sin, a little tired and trying to do remain more for looking now. But yeah, pretty, pretty good. Even when you sleep on IT, IT feels even Better and say than than I think most people were expecting.

Was the outcome Better than he expected? Quin.

it's just nice to get IT in the bag. I thought IT was going to be a landside. Yeah, I thought is going be a landside.

I mean, Polly market had a one hundred percent accurate, which is fantastic. And I think that was generally right. Like I didn't think she's going to want too many the swing states of enny.

yeah. I feel the two big things I want to cover on this is obviously that the market impact sense and leading up into IT and what we've seen, but then also just like this, yeah this IT feels like this election cycle, there is a new media components born that really took the torch and ran with IT like know what you guys feel like when I was looking at everything I had you know a million windows popped up a cable on and watching and like yeah Polly market and like the odds websites they nailed IT um know at the same time I you're saying like about the traditional media components, you know nate silver was gone in at fifty fifty but I was obviously like incorrect. I mean, IT was IT was such a landslide that just like going into that with that sort of perspective is wrong.

What do you see? Keep ravel his bed with nate silver. I mean, this was the death of the experts, basically nates over.

They had that that enough. They actually loss bad thinking, you know, florida wouldn't go to trump by. And he was like twelve to fourteen points against key. He, reba, just shot him in a Walker and was like, this is so fitting. I can't at these mainstream network, people just their set figures, what bolsters even .

do at this stage. This is three elections in a row. They're just been incredibly wrong.

Well, just show, show me the incentives in auto, the outcome. I mean, like these people who's running these polls, new york times, A, B, C, you know, silver's bend compromise, read any of his stuff and he's like every time trump would take a leading ss model, he'd be like, while IT sucks and i'm sad to report and he still has its site. Ari, yeah, threw this up and went out its garbage.

I mean, the and sala poll, I mean, give me a break. This, how much did? How much did? See N B C, N B C P, oh, by the way, one of my favorite joe turnin and on square in the morning, he does god's work in the morning just absolutely dismantling these things. I'm surprised that n bc lets him just go and like he does but it's yeah he's my favorite .

one of these guys um he was mister beest manager. I ended up investing in his a venture fund but he follows basically decentralized media really well and this is from is the reduction ducal. I think I said his name right but he writes this news letter.

He says at one point during the night there is almost two million people watching streamers cup the election on which, and the same could be said about youtube. So I have been something that i've known, but after last night, there's no doubt in my mind that we the way we consume and get news, will be forever changed. Compared to twenty twenty of these elections, viewership was down twenty five percent.

In my mind, this was definitely going to happen, given how many people are going to youtube, twitter and twitch election resort. And then he is this time, okay. So top channels who covered the U.

S. Election on election day, and this is the individual streamers are the pink in the networks are are the purple. But check out these numbers, like five hundred fifteen thousand bond geno Stephen crowd, or four sixty assonance I three hundred thousand, these are individual people competing with.

You know speaking of like experts, you how many what's the overhead for fox news to get one point one versus Stephen crowd er at four sixty that these business models are just completely and they there none of that but they're wrong like and other data is wrong compared to like a guy with a good and that there in lies like think about the power dynamics that about this shift with this, we're watching very first turning stuff before. I think this is obviously a huge first turning. And we're watching new institutions we built yeah.

I think that's OK like this is something I can be a jm carson about a couple days ago about the impact election. And I ask him about this is like, why do you think these posters keep getting? And his point was that, yes, I and the only look at forty years of data, and you know we're talking about major cycles, who you talking about like first turning stuff like that hasn't happened in one hundred years.

So like intuitively, as people, as society, we understand these face shifts but is not being picked up in like statistic models. So I feel that's also why you seem like individuals, you know was skin in the game betting on polymer. They have more intuitive understanding what's going on. Then somebody is just running like a back test on like only forty years.

Yeah so the the explanation here is either dumb and stupid or deceitful and like purposely lying like there there two the two explanations. And you know, I tend to think these budgets of these companies, right, like they're they're able to they spend months in in months in months, in years building these these polls and these know election night algorithms. And and so I have a hard time relying on stupidity or lack of intelligence.

And you know, I think there's a lot of other signs that would CoOperate as well that maybe it's a cynical take. I don't think I just think that is what IT is. I'm not you know, I think it's more deceit and purpose relying to paint the image because, you know, today this is I love this chart because people don't want to get live to right.

The mainstream media has become an ARM of the government. And in china, that works because you can block, they can block access to youtube, twitter, twitch, all these other things. So and then they can pump out their state run media stories to say whatever they want. And in the us, we have morphed into the state run media, which is why they so up in arms at trump. You know, he wants to dismantle the power that theyve accumulated.

And you're seeing people just are like, you know, obviously there's a lot of noise right now about your democrats kind of, you know over fifty percent a country like is wrong and like, I can't believe in and it's like, no actually probably a bunch of people with the democratic rated party or O R A rational are actually saying, like, wow, we were just lied to brightly first with bite and health and second, with that he actually stood a chance and like that he was a good candidate. IT didn't matter like he was. He was going to lose from the beginning.

And I want to ask you, I want to ask you about that though, because you've had the senses that you feel like this be like a unifying moment but like when I hear some of these narrates going on and just IT still feels like more fracturing um do you still see that occuring? And like what's the path for IT?

Yeah because I think I think ultimately a everybody prefers you know the majority, let's say, ultimately prefers truth because you can only live in suspended reality for so long. And I think a lot of what trump has run on and the people he's brought, you know, he's emphasize team of a lot if you look at all ads, right that shows him R K.

Elon, all these people on his team seeking and like a lot of people eventually, you know, prefer truth and facing the music, living in this kind of fake world and you know, going after I I don't even think like what trump wants to do is that partisan? I think it's it's more class. It's more know and you look at the people who upset, it's not left, right if it's it's rich first, poor and middle class in my opinion.

And and I think the generational shift that's ongoing as a the ball of the country wants someone who's socially liberal and fiscally conservative and and wherever you fall that on that spectrum historically like twenty twenty five and was viewed as more of that right like um and democrats traditionally kind of been in the center, but trump has moved the whole republican party to the middle. You know he's way more socially liberal, Green energy, uh abortion, you know just leaving IT up to the states, not alright banning like he's brother republic ving party towards the medal meanwhile, you know with Harris picking tim walls who lost his own frequent home conney in minnesota, uh, you know they move they're moving to the left. And so you're just alienating so many people that just want kind of more rational views and not so partisan.

And and I think that's yeah that's how I I think you will be unified because like again, all these things like dismantle big pharma um you know they make amErica healthy again like the regulation like I don't see many these things is like that blue red like crypto. I mean crypto is a that should be embraced for is for the little for the little guy. It's a grass roots asset class.

That's why institutions have fought at first so long. The big banks hate IT because it's it's disruptive and like key embracing this. These are people see through the the you know the M S B C noise narratives.

And I think that just be coming more. And I think you need to get unity. The gem talks about this, right? You need some sort of event to to calise IT.

And I think if people felt feel like they're been wronged by the you know the kind of B S. Theyve been in taking for a long time. Uh, I think, you know, this is something that I saw.

I I still do have that. And I think on a global stage is happening in real time as well. If you look at putin ready to settle middle east, china, like everyone's getting line real quick.

You know what, to me, IT was fascinating, is after the election, bernie Sanders came out and basically about to say.

I saw a statement.

and yeah, and I I always like burning centers because he's real. And he dismantled by the entire progressive democrat abatis.

Imagine the different world the dance would be if he, like, got the nomination in two thousand sixteen, like total party.

and was so funny, amazing, like this, this populist movement could have gone to berny rather than trump. But I think they, whatever weird incentives was like gloss st. Weird power structures, kind of like toys. Party aside, and I hope I would love to see a great democrat becoming candidate that embodies like a je eve, I think all instead of this. Whatever this last regime was was just as r IT was really weird and am so glad we're over with IT. I say that you also saying, you know, there's some things that band did that was really good, but like campaign that was run was not democratic and I was just bizarre and like, I hope people can kind of see that at this point. Um clear it's clear that I mean .

one one way you could think about IT is is this like there's that chart growing around? It's the first time in um in black forty years or thirty years that IT wasn't a clinton bush er de or something that whatever that was you can kind of think of that as the democrats need to have the democratic party is going to have their sort of trump moment, right? So like bush, bush was know the last kind of republican president in in that side.

And then you obviously had a john mccain who is definitely very your ball hawk. George bush ask mitt romney was sort of a shift towards a little bit more maybe centric and then you had trump who completely flipped the script and and said enough of this like completely far leaning right um you know anti abortion and anti like all these things and really move the party kicking and screaming in two thousand sixteen, absolutely kicking and screaming and now they absolutely love the guy and then you look at the democratic side. It's kind of just muddled along with the hold vers of the clinton, you know, obama like, you know, that strong hold of just legacy versus actually merit and new ideas and changing with the generations.

And so I think you could see some contender come up on the left. Two just radially different than what they they went with and gain a lot attraction because now everyone is like what IT didn't work, like the last IT hasn't worked in an honesty for trump. It's probably Better he wasn't reelected in in hindsight now because he's going be a lot more effective. And and I think you know people will probably give them a Better shot now than if you just can't Carried into another four years.

Yeah agree with that. And you know you know canadian like I as somebody that has been like extremely alienated by the democratic party and then also like doesn't really like trump s as a person but you understands the policies there that that are obviously Better that these the world a weird world and yeah hopefully we can just continue this. All I want is that you talk i'm hopeful about IT as well.

Um I anna, talk a bit about the market impact now from obviously, we got you know the big one is that we got a sweep of congress. Um highly likely. I don't think it's confirmed from the house yet. Just want to get you guys just takes on like one of the applications there are. Obviously, there's a lot of thrown round about the the main policies about know tax cuts, a tarifa drill, baby drill these type of ideas, but just want to get your tax now that we're seen that is going to be highly likely and there is going to be no good lock in congress. How are you guys thinking about how policy evolves from here?

And now for me, i'm watching there's been, you could call IT a thirty years cycle from the private sector to the public sector in terms of, I guess, our structure. And these institutions made IT a lot harder, and they grew so big and gorod and bureaucratic. And now you're watching almost that crowd ding out effect.

If this is done correctly, meaning must comes in. And you have a lots of productive captain open up in the private sector and chop down the rape tape of the public sector. Imagine a what type of growth that would release in investment and disinflationary pressures.

And I really could be epic in in the market. And Jason said we could move to six percent growth per year. Imagine what I would do.

Do you lover the economy? Do you lover the the debt bubble that were in and IT is very early, but we have that given the timing of this neal house forth. Turning to first turning narrative.

There's a lots of stuff that appear to be like believing in and especially space stocks that I always think when the frontiers open. I've talked about this in and out probably every week washed the frontier markets, bitcoin, space biotech. Those are going to tell you where they or not.

It's working because when investment goes to those places, they're usually high. Cap beck's not a po, but like places where there's a giant time downing and money will seek IT out. But if you have the administrative state taking power and the crowding out effect happens then, and this is also control SE.

Everyone thought, oh my god, yields gonna Spike here because the deficits will blow out all the other stuff and the servers had a great call this week. Um he's like, that's kind of incense. You might actually get some distinct lation ary pressures from trump know for a lot of different reasons, technological advancement, productivity, iata.

And you know, we're see oil down to seventy box today and know it's fascinating how these narratives, you know, they can. And we we were talking about to here, how they get so stretched. And we thought on the effects, we are the fixing come side.

And now people are like, oh god, what's going on? But I think over the long period of time were in a productivity boom, which should help assets, really should should help equities relative to to fix the income. You just going to be in the right sectors in in in fact, this rotation from giant centralized capital to more decentralized capital, from like the q to I W M on a relative basis is probably huge. Like we woke up and hide up almost about six percent and the cues were a kind of they were up, but not as much. I think all these things are going to be secular air if they can keep, you know.

attacking IT. Yeah, I think those are great points teller. One of the funny things to me is all the all the fear monger. I mean, whether IT was about who is gonna win, whether is about being contested, just hello, none none substantiated, you know, just regard ating popular narrative claims was just, um IT was such an easy fade for how long I got, I would say, I mean, we were pound in the table.

This is our mean from last week. We said, I think it's gonna decisive and nothing will happen like obviously something happy. But I mean, like, you know, I wasn't catala close. I wasn't contest IT or .

anything and and wednesday's Price action showed who is right and who is wrong. You had all these people saying how your responsible is to be position going in.

And yeah I mean, I was trying to say that last week the Price of insurance was up yeah so much and you're Better off selling insurance when that hurricane is coming and the Price is egregious, sell the insurance .

yeah no yeah. If you listen to us last week, yeah you know you knew that excessively bit up .

and how about how and where is the like reflection from these people who screaming, you know no, we just ragged the media but how about everyone feel mongering and then there all you should elevate cash levels going in to this unknown event. And then everybody wakes up wednesday in forging. Small caps are up six percent.

How about how about that? Like what do you do? You just missed out on a third of the year gains in the index because you SAT on the sidelines and it's like you can do that when you're mant IT like boom, you're under performing your benchmark six percent wow. Like your screw like these are risk managers.

This is part of the problem. There are risk managers. They are they're not investors. They there this is how we got ten to speculate stagnation in the first places because you have all these bucking morons, excuse my french, that want to just get out three to five percent.

And then they they close american innovation because you don't end up investing in future growth like the hope premise of investing is to take an idea that hasn't happened yet, turn IT into something when everyone else is doing risk adJusting returns, you risk adjust everything and then you're just part of the no IT is what that is. But it's great for bomber depending on your age and 3， i get the homecoming thing. But in general, it's terrible for amErica because if you have risk parody out the ass now is presenting active managers like us opportunity.

And then we have to be like judge zu when you see like have a great chart, take outflows for the past four weeks for the biggest since two thousand and two. That was all systematic risk suggested returns like all these all these quante strategies that try to not make money. It's like let's just not lose your money.

Sometimes you just need to have some skin in the game, you know, expose yourself to some risk if if go read this book and believe in something, you know, sometimes you just got to put your, put your capital on the line, even know yet work.

He's kind of a the goal.

He is a pencil. But I like the, I like the point of IT.

I mean, that's what people probably think of me right now. But at least if i'm wrong, at least I runs myself on from jersey.

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Yeah, I think I think your market showed time the next day, right? everybody? We for all the talk, right? We have four years to look back on trump and what did he do and and he was super bullish growth.

I mean, people saying his joe baby, but oil Price was up almost every year of his presidency because economic growth was up. You know, people say he's horrible for china, oh, my god. And the chinese stock market was one of the best performing equity markets during his first few years.

I mean, mexico, you know he redrafted after to the mexico and and we strong trade bills like he's a businessman and I think everyone kind of having the realization overnight like he doesn't come into these global situations where you have lines I gram and dicky like because someone said one not nice thing, they said like we need a new come you know he's not looking to kill and get no wars and cost american like like everybody's a competitor, no lone's enemies, right? Everyone is like there's a deal to be made. And if you view the world that way, like that's positive for the market, it's it's pausing m for growth.

Like he you know, he might have a certain view on immigration, but he doesn't want inflation. So he's going to make sure you find workarounds. And and I think I think that kind of people have to realized and on the deficits, again, we were pounding the table on this like all these fears and and how a lot of this move in bonito de was kind of offside, hedging and fear as the move was so high.

And and so now we're seeing, you know, just like a company might have A A decent earnings uh, quarter, but if expectation were for them to boat out the park and is still good, but I just didn't meet expections, um then you know that the spot Price can fall. That's what we're seeing with yields. Here is people, you know, we got that bump in yields because he's pro growth, but then IT wasn't IT didn't justify the massive imply all in the move and can see here .

in this country like it's just catering. And then you know you look at I just have this chart as well of like the vex contract before and after um for people that don't look too much at futures cars because like we ve from this, like hop at the front of a very elevated premium and just basically fear um to a much to to a cotangent um market structure, that's a lot more constructive.

So you can just see like know everything we talked about last week, terms of just like basically fading, just how bid up and play volatility was and that that being one of the main reasons for seeing such a surgeon fields like we're seeing this happen now where you know we can get into this, you might be a good segway into IT. It's just talking about what we saw the fed meeting, but you know they cut rates and they are pretty David and bony else are coming lower, you know um I think if you could vass a lot of people what would happen in the circumstances and theyd say all know the feed is going to continue losing the bomb market. We're going to see bomb yids keeps surging. And I don't know like i'm curious what you guys took away from that on on yesterday's M. C.

I just think the event risk is rolling off. He was already Priced in ninety eight percent chance. I mean, we could i'd love to show some positioning things to show you know besides the the vicks to slide one.

This war is when everyone saying you played safe and raise your cash. This is a Scott run at woman unwinds of short dated election hedges create synthetic demand. For example, on monday, the C, B, O, A put call, asia was the highest and september twenty, twenty one.

So everyone has to add downside puts. And then you know, you can go, you usually show the vine voice mush. This is the vicks nine day inside thirty three.

As those as that protection rolled off vix nine, nine day vix fell fifty percent. So now you get, you know, F, O, M, C rules off. It's following even more today and all these.

And then this is the best, is my favorite. good. Decide thirty six.

This is a the risk parity positioning. You can see how I dropped in August. And now you are these massive half. Those best of the week's had the election and heading into the lower vics, quanta inside to buy one hundred ten billion of us equities from now until january.

All controlled funds are expected by fifty billion of stocks in november in one hundred and ten from now until january, according to nura leverage, utf are estimated to have bought fifteen billion of U S. Security on according more standing with dealers buying five billion these U. S.

Equities yesterday. Let's also enough get by back problems and four force, which means one hundred twenty five billion of equity buying both november ver. So it's like I think it's six billion per day in daily v wap volume of buybacks too, which should save of all it's just really incredible that and of all after all this F O M C election, those were systematic things that we're onna happen anyway.

But all the systematic guys deliver because the mix pop, the whole market structure is just so stupid right now. And I think that we're watching the end of like the quant bubble right now. And in people who will start out form hopeful ly active manager start out performing here as they understand like these rules based investing things in risk adjusted turns are going to go out the window in this new era.

Yeah, it's it's quite dramatic when you think about one, the level of fearful offsides position going into what happened to be just a complete non event. And IT wasn't just a nonevent IT was an extremely positive event, a red sweep with a clear electoral plus popular about when and and A A very obvious Mandate to implement the changes they want. Um everything kind of lining up to be quite pro business friendly, at least for main street business friendly like A T V D. And it's good for a large cap tack and semiconductors and and those safety trades we've been seen.

But um yeah I mean, you also have we we were the the questions start on the fed right and the fed people again, like people arms up in the air, are saying all these questions, why are you cutting when an inflation expectations all this it's like, guys, the simple answer is their Mandate is two percent inflation as measured by their go you know talk about the measurements. Don't talk about they're doing something wrong talking about they should be tearing up the C P, I and P, C, fixing the waiting and um because that's what they're all they are doing. So if you just look at what they are doing, you know the unemployment rising and infinites.

C, P, I is at two point. I tweet this chart. C, P, I was above seven when they started hiking, and it's at two point one now.

So they vindicated. And his his speech was just nothing but Davis. H.

yeah. People are letting their biases, I think, over run them because like they just want power to be barish and hawkish so badly. And you know, you can see this in some of the questions that they are asking power too. Like, you know, they they got to ask like talk a bit about inflation and he was like, yeah well, you know sounds like you quoted a twelve month core P C, two point seven percent. But like you just look at three months annualized or six month annualized core PC two point three percent.

If you look at the headline PC on a year over year base, as we talked about this last week, but that's at two point one percent, like he was making IT extremely obvious that he does not care about inflation anyone for a long time. And yet that is all they want to ask me about. Know there's a question about like what would you do in the circumstances if if you know what's your planned for stacking?

You know, like that is just the most ridiculous question i've ever heard. You know, I I I have got pretty fired up yesterday hearing about just some of these like press conference questions that they're asking because one nobody asked him about qt, about the baLance sheet. You know like we're seeing yields.

Ge using the R P, almost get back down till like a hundred billion dollars. There is the most monetary planing aspects of thinking that we're going to see like Q T. And in like the first quarter, twenty, twenty five.

And IT just feels like irresponsible for the fact that they're asking him these ridiculous questions about like what would you do in the light of his speculation? And his answer was like, well, you know, that's why we have the entire fed Mandate. Like what kind of question is that? And nobody asked about qt.

You know what's the plan for qt? Not a single question on that. So that .

was my favorite, my favorite axy. I find, I find.

I find IT so ironic .

because it's always the people who are saying, who are who are talking you you're like your politics, get into your market views and to add at a and when it's usually about then attends to be about trump stuff and and then you have the same people saying is bullshit that powers still, David, when trumps just won the election and you know, he's going to like, wait, inaudible. In two months there's nothing been past, nothing even been proposed.

The terrace is, we have four years blueprint of tariff s and there was no inflation. Like what is people gonna do come up there and say it's because trump, in a campaign speech, said that he might tell of a country if they like. So diode, yeah, he drop a few hamers.

So I think we are really good now is like kind of emphasising like, look, we have zero percent waiting terms, potential policies until they are. There's a billion congress that is past, you know. So it's like we're not going to hike fifty bps today because we think old terrorists might happen, especially because like I think a fraction of the amount of terrible actually occur. So done .

this like you to Tyler's point, like the market structure, it's great. I mean, it's great for us because like you, yes, it's great for active managers because in the same way that the market structure has become kind of perverted, you know, just kind of liquidity driven by you centrally manipulated organizations, governments, it's also the the the narratives and how quickly we go from one side boat to the other.

And there's a complete and total loss of like first principles thinking I see which you know you think of in the investment community is very one skeptical, open minded and heart like. Do your own research, you know your diligently y things and like the majority of stuff is like the quality just got gone downhill. And that regard to, I think like people just regard to .

take these popular. I know I talk about this. A lot of my boss is, you know what the market generally, people that gravitate towards the market are high achieving, really smart people. But they are you know, if you take like you probably top your class, it's a really well deemed college or institution. And what that really does that you've always been the smartest and you're kind of you're not self aware enough to realize that you know you could be wrong, your basically of self reinforce. But when you some of the best investors like streets to margus that went like SONY being on tender.

some people and people like that .

yeah like and I always found IT funny because just because you're really smart in a IQ sense doesn't mean you have the sense to be an investor sometimes that that that happens obviously too. But it's a it's a fascinating like in any other industry like sports, you get alienated really quick when you suck at IT. But this is the one industry where you can stay in IT for a whole career and suck at IT and be you know like I know this .

is murdered to every maco demo substance.

There million other funds that like underperformer rear. But because you're in this giant like asset gathering marketing bubble, IT doesn't matter. I always found that fascinating. Somebody guys.

it's going to happen for you know the december meeting onwards because I felt like, you know, when I looked that I see me futures right now that it's very like sixty percent I think odds for cut and december when I was caring people talk and I know know you were talking as that has happened. But I felt to me like december was a lock you know like what we need to happen for him not to cut in december, probably an extremely hot labor market int because he does not care about inflation. Would you guys think?

But even I don't know that, that would because he's like reiterated for we a like for at last bunch time he spoke, he's like really there's no inflation coming from the labor market. He used the the housing and rent sticky inflation is is very lagging and he said in this meetings, particularly one you know someone asked about, like pausing and slowing th Epace a nd h e's l ike, yeah of course, when you start cutting and you get incremental close to neutral, then you start thinking about having conversations of how to slow th Epace o r y ou k now u m w hatever i s t hat w e j ust k ind o f s tarted h aving t hat. It's not we're firmly easing in cy in the firm easing cycle.

And and then I think the other one was he he noted um on the inflation, he said, you know one good print or one bad print isn't going to really alter things from here. We know there's it's going to be bump y road and and we believe from our sides, I mean, look at like he's looking at things like the George quit, you know, would show at the E C, I point a cost index that show wage inflation isn't really big deal. So even if a hot print comes out, I feel pretty good that decembers december is gna happen at twenty five.

And then and then I think they probably should pause after that. You get the you get the rate down just above four. And you know they should can probably wait and see a meeting and had done its january, march, the next meetings they pride skip january and and maybe they go again.

And mark, maybe they if if things improve, then they don't need to. But like you know, I think it's pretty, pretty clear. And and I also think the Marks expectations are some of the most a fair and appropriate that theyve bent in a long time. And that that was part of my thesis going in here, is that like once you clear the election uncertainty, you have that that clarity in in so many fronts and policy to growth from a government perspective, but also fed path. And and that's why you're seeing the move note to the ground and and I think that S A nice runway here to for people to kind of take action in portfolio.

Yeah, I mean, it's pretty simple honesty. I like you just like you know the fed, regardless of all european ian, is europe ian and neutral. And whether they are restrictive or not is that they think they are restrictive and that are not above neutral.

They want to eventually get the neutral the next little while. Es, so they are going to keep cutting. Um you know you can have an opinion on whether you think neutral is that could maybe lead to a inflation to be accelerate as they get no potentially accommodative and below neutral if you think you have high neutral rate. But the fact that they are going to keep cut in are going to keep cutting for a while.

Yeah they said he's like, we don't know how restrictive we are, but we know we firmly believe a restrictive basically and like, yeah, they're gone like, oh, the other point, he said, we really are not welcoming of further deteriorate the labor market. He said, we think the labor market is weaker now than two and nineteen and obviously, they are cutting in twenty nineteen. So you know all the man date is um you know it's more baLance now.

I think it's still skew towards thord's labor weakness and people just concocted these narratives themselves in the market about, oh, you'd deriving he's GTA do something it's like, no, the yields rose to Price out a recession. The yields were gapped down away below what they should have been. They asked him these stupid questions too, like wasting up all this time.

What do you think about this? Like, yeah, it's pro growth like I think he said the left tail got removed of a recession because we we said we want to back stop the labor market. Like yeah, take that's what happened. Like people try to expense on everything he says. Like, take him at his word and in you find.

I think what you have to watch is for black, red givens because that will give you a sense of inflation really turning up here or not, and then the federal public changes because then you'll have to tighten. But right now, one year break you to forty and almost look like they're onna roll over here. Lower wish even might pretend lower oil like you might get in.

This is kind of funky. But you can get into lower oil Prices, lower yields, lower U. S. Dollar, because that incentivises the fed.

And you know what what do equities do? And now that's kind of about what I think might possibly happen here. And everyone thinks, oh my god, that allowing interest rates a oils gonna Spike.

But what they don't take an account is what if trump is a this this peace dividend where the geopolitics become very um I guess like less adversarial and yes, terrify or could be inflationary. But they're not saying that know what is not saying that these are all themes s already enough to watch in the next year. But it's highly likely like if the ukraine russia thing gets defused in russia, starts providing energy to europe again and there there's this new contract that's written geopolitically.

These are massively disinflationary pressures again, if you don't have military the military industrial complex like creating these like supply change waggers. Uh and that that's something i'm watching closely. And no, watch break break given inflations watch the dollar and watch credit spreads and that will give us an indication that the world is changing somehow. And maybe we just our risk is at that.

I feel like i'm fading pretty heavily. Any sort of a significant inflation we acceleration like I feel like, you know, if we think that sixty percent of that run up to seventy percent ever C P I was was supply chain related, I just don't really see how we get that sort of move without that.

Like you can print a bunch of money, you know helicopter money, i'm sure you know that could get you I don't want to quantify through a number, but yeah, you will get some inflation but like to get above like my simple framework is this is is that i'm not worried about inflation until cp s over five percent. I'm not worried about inflation until oils above a hundred dollars. As long as you know that's not happening, I just don't see how we can get that fundamental usin in in cbi.

Yeah, I agree. I think that I think I would like take seventies as an example. Let me take twenty two as an example. These these super inflationary bouts ultimate usually stem from some sort of, uh, geopolitical event that Spikes energy Prices.

And if you know, if you look at trumps four years of an office, right, like he is the first present, what couple decades did not start a new war? Looking to kind of strike deals and set you do construct and was killing um yeah is pretty, pretty constructed for economic activity. So you know that what people kind of also don't see your account for when they just carbon tariff terf h tariff. Well, I would say like way worse than terrace is when half the world d lobbing bombs at each other and and cut in, you know, removing any sort of communication and trade and commerce between the entire middle east and russia, one of the largest exporters of you based commodities and grains and agricultural things like, you know you're blowing up the order stream pipeline from uh you russia to eo like what's like anyways i'll stop on that but like and I I short of gold this week to .

give you example of like yeah .

pulling up. Is that thing that just like a political risk premium coming out?

I think it's a bit of everything. I think a little bit of that. I think it's a little bit of gold. Has arty front run all this funding to some extent? I think that you know if if oil melts a little bit here, you know, I think inflation is for concern. And and above all, I would say that the core of the thesis is from a cyclical perspective, this is when gold starts to below under perform because if you think about late Q Q two to to september to the fifty bb based point cut where the fed took off recession from from the outcome probably distribution.

The concern was not really if the fed was in ease, we knew they would IT was more of when the fed was in ease and IT was is there going to be a recession? Is you specifically are we are we decelerating and continue to fall? And in in those cases, gold can perform very well.

And I did because you have the the easing, but the market is still wondering, is this enough to resist late economic activity? And I need a safety valve that protects my, uh, currency debasement. And also, you know, if shit blows up and now you're getting to a world where trumps elected peaceful.

Animal spirits are going to be high, business leaders are going to be hiring and you're going to expect an economic recognition chinese stimulating. All central banks are easing and you're going to get this regression in the economies and and probably you know probably a little bit higher and animal spirits and less need for this dooming gloom protection. And so this is where gold kind of hands up a time to bitti in.

And so I like IT as a head. I mean, it's not something you want to read size up as like a big sure because like then your you don't want to be like short tail rescue of political conflict as a pride as well in that situation. So it's more like offset a little like other commode, the more clo comity exposure than .

I yeah that's maybe we can just talk a bit about crypto zy rap up here. You would mention pass in the the town to bitcoin. You know we blew through the all time highs were know all three of us pretty big capital fans here.

Yeah what do you think IT about there? What's what's the move or we just going to be just ride in the all time highway ves, not be passed through IT? And um yeah what you can see there.

it's pretty drasti C2Change tha t thi s bri ngs bec ause I w ou ld say don 't for get, obviously, we've had this red, red sweep with a big ticket to implement change, which is extremely procreative. The proscriptive spat uh pack was the largest single issue um you know uh influence in in this election downtown lot across the house and senate. And that matters because one they've they've been able to get a lot of procris pto democrats.

So this this makes room for by parson policy improvement, but also for future elections. What's the guy that almost lost his local race? Because a huge crypto pack was was helping the other other canada started to think and see how much money and no politicians show me the in the comments.

They care about election. They don't care about there. There are people in most cases. So it's very positive. And I don't think IT really be Price in overnight.

I think you know, even you know, up until like trumps election, right? This kind of reminds me a bit on T. F. Janner renews out there on horizon and you didn't know what to be a one hundred billion of inflows in the first month of a zero.

But I wasn't give me negative so kind of pines and puts the floor on prize because you have problems in augment and these huge promises for first hundred days. And lets see what happens and how quick IT happens. But we know with the red sweet that can happen pretty easily if they if it's a high ranking of the um priority, which know everybody is cabinet administration is procrit to uh and and uh you have serious momentum behind things like potential strategic reserve or others.

So it's monumental. And I mean, I kind of I think finally put the nail in the coffin to like the bitcoin ncr patos rap poison view. And if you're macro non crypto person, you know you can't buck IT IT with ark Cathy wood, garbage patch stocks more you to you have to at least I acknowledge that is being a real asset. And I think that you you start rewriting overnight post election. But I imagine people are still offsides relative to they what they want in an allocation perspective and just kind of trickles in.

Yeah, if you get the the bitcoin strategic reserve, that in itself creates a whole new geopolitical game, which which maybe is why you'd so cold here too because I think if you can deliver your economy by owning bitcoin in the Price keeps going up and up. You know I have found one thing interesting is buckley was one of the first people that called trump um to congratulate him and that was really symbolic.

I thought of like a stamp of approval from one of the classical kings of coin. And I just think you know one of the best in the side agent. You know, I want you personally get canon in the fun, but sona is literally the best chart in the entire market right now.

If you look on like a three, four, three, three year basis, it's like the prototypical cup in handle, our technicians gold and almost on the cup of breaking out here. You probably by this weekend and IT, well, i'm guessing. But yeah, that there's just so much bullish stuff buying this right now .

and sounds like the bananas .

zone I I don't want to drink IT, but IT feels like we might be in the .

banana zone. Banana zone rap has brought us to the banana zone.

You know else as interesting as people little bit reluctant to buy IT like they see IT this is asked people like like you have on bitcoin was at new eyes they're like, I miss IT I I missed IT and act like i'm not getting the mother in law calling, hey, should I buy some bitcoin here at the top? This is more like everyone is in the cape of like up so high I missed IT, which is just going to cost.

It's like that you watch go up every day, every day and then IT ripped and you like, okay, i'll buy IT now and that's the local top. But I think that's kind of the cycle. And now and what's also fascinating, there's really unless something happens that is not in the belt curve like they go after trump gan or try to fascinating again, wall is gonna drifting lower, lower in to the holidays.

Earnings are coming out Better and Better. Like I don't know if you watch the up start today, it's like forty, forty percent, forty five percent. Like all the drag stand line, steam called the drag is ripping.

I heart radio. I talked about that last week that IT was IT was one of the high yelled companies was up thirty percent yesterday. All this stuff that been basically beaten up on a higher cost of capital, relatively speaking, is now just crushing IT.

And no one's paying attention to IT because the things aren't making you know all time highs left and write anymore. And that doesn't mean there's not a boom market. There's always a ball market somewhere or so. I think that is more synonymous with the crp to frontiers starting to work again is the the cost of capital drops for the rest of the the ecosystem and not the large banks.

Yeah how much I love the elan assets to that like tesla. Just mooting you like to .

look at D X, Y, Z. I bought some space sex recently like that. lucky. And have you seen this? no.

D, X, Y, Z is the, is the private, the um I just attack one hundred private corporations of forty three percent today. this. So basically I think this is this is something to watch.

I don't know this, but this is that the IPO market is dying, right? Like we're watching. The frontiers actually be incentivised again for four years.

IT was like, you know was intimate. Big tech wants incentivised because that's collectivist and IT controls everything and it's very centralized. That's what happened. That's what is good under that that regime people.

But now when you the administrator state in the red tape and the bureacracy crush innovation works, believe IT or not, and it's starting to tell you that I just think you know most people haven't put those two into together, is that you're gonna to be a frontier and investor in IT. If you're still in risk adjusted return, sorry for worsting rejected return people. But like I just separate .

us and shambles.

Did I think you're just gonna a be crushed by the relative performance because we've been secular stagnation for thirty years, forty years. This is a whole new political philosopher. I want to do a some another interview with one of my political philosopher friend.

I think we're starting like the age of liberalism is gone and we're actually entering whole new thing and IT, which is kind of out there. But I think we're seeing all the stock reactions. Tell me this is different one in a different regime here.

Well, look, guys, I think we we deserve a little pat on the background market calls in recent months. I think no, we won't get too excited. Try to be a humble I don't know. IT was been a good couple months and I was great to do, as you know, round up the experience and what's next year.

Never let a woman go to your head, nor I lost to your heart. It's my old may used to say .

that i'm that I said the next week, we stating, you know, we had a big period of the market, everyone just kind of flooding in, trying to react in certainly. And I think you know over the next couple days weekend, you know people are gonna go go home, markets close and and makes you know think about what they need to be positioning and going and to keep one under the new regulation and a potential fiscal monetary environment. And I think it's a good, good time to kind of the underwrite a all your priors and uh, previous this season and make sure on the right side and I am going to do that with my monday letter and get that out.

I do want to pump queen tires for a second because I I need a plug in because I have no incentive in this. But reach out like our capital is I I don't like to do that. I I know yes, you can, but I feel like, you know, you should to check .

queen head skin in the game. Yeah, what to say that he had his views out there?

I can't drinks anything, but hopefully we don't get back. The early month started and will be out there, out the .

where to crash vehicle. Oh, 这个 you guys， thanks .

around good.