Cassandra’s Rally

Published on: July 14th, 2020

Since the March lows, we have ‘enjoyed’ perhaps the most unloved rally Julian has ever encountered in stocks in his career. Like Cassandra before them, a host of luminaries are on the record fighting it. But remember, Cassandra was right. Below Julian addresses why data is turning more negative, supporting the case for the bears and why he is shifting more defensive as the summer rolls on.


  • DB
    Dan B.
    15 July 2020 @ 10:40
    Hi Guys - wondering what demographics are suggesting forced consumption by ageing and ailing Baby Boomers? My general thinking was this generation would be gradually consuming less perhaps
    • JB
      Julian B. | Contributor
      15 July 2020 @ 23:31
      Hi Dan Our demographic model suggest that globally we hit the tipping point on saving in 2016. That's when the the ratio of workers/retirees peaked. So at this point, net net the trend is towards more spending vs saving. Whereby, the spending is a combination of younger millennial, older Gen Zs who are consuming from income and retires, who are dis-saving ie selling assets to fund current spending.
    • MG
      Marcus G.
      16 July 2020 @ 06:12
      Thanks for asking the question and thanks for the replay Julian. "Even demographics suggest forced consumption by ageing and ailing Baby Boomers which will become an inflationary tailwind." I can not see how dis-saving of retirees create, support inflationary pressure. I always heard the narrative that retirees spend less compared to when they were younger and had an income stream. They dis-save because they lack the income-stream and thus need to dis-save in order to support their now lower spending-level. No? On the other hand, if the workforce shrinks because a lot of people retire over time, this may be inflationary due to a changing balance of power between employers and employees, which may lead to higher wage-share.
    • SM
      Sean M.
      24 July 2020 @ 02:42
      Hey guys- Last August Julian put out a piece showing the correlation of negative interest rates and an increase in savings rates and used Germany, Sweden, and Japan as examples. How does this fit in with the consumption patterns especially if rates go negative?
  • MP
    Michael P.
    19 July 2020 @ 05:31
    Grateful if someone could explain why the USD and the S&P500 seem inversely correlated these days. Thank you.
    • HM
      Harry M. | Real Vision
      20 July 2020 @ 23:05
      JB has a theory which he calls "American Exceptionalism" which argues that stronger US asset markets create a virtuous cycle viz the dollar. Equities go up. Internationals starved of investment opportunities bring capital into the US to obtain higher returns. Dollar goes up too. Rinse and repeat. Till it stops working. Since US equities are now a funding vehicle for some global central banks there has to be some merit in thinking about this problem this way. How much is an open question.
  • SO
    Shads O.
    17 July 2020 @ 15:16
    Who is this Cassandra? =)
    • MD
      Michael D.
      18 July 2020 @ 22:02
      Recall your ancient civilizations course at school.
  • DR
    Derrick R.
    16 July 2020 @ 13:28
    what's it mean to long the ESU0 2500 Puts "at 60 Index Points"...? currently on my platform this one's bid ask is $16.50-17.00
    • HM
      Harry M. | Real Vision
      17 July 2020 @ 18:37
      Sadly the market went down and not up. So I think this put was worth 60 points and is now only worth 16.5 points. The hedge was unnecessary - up to this point.
    • JL
      J L.
      18 July 2020 @ 09:52
      up not down
  • HS
    Haythim S.
    16 July 2020 @ 17:01
    Thanks Julian. I am currently buying some S&P puts as a hedge. I was wondering if someone can explain the proper % of the hedge for some one who holds all other julian’s recommended commodities trades ?
    • HM
      Harry M. | Real Vision
      17 July 2020 @ 18:36
      There is no "proper". What are you trying to hedge. All your equities? Some of your equity risk? All your life risk? One way to think about this is to look at how much your stocks go up when the market is up 1%. Thats an estimate of the beta of your portfolio. That gives you an idea of what you stand to lose should equities go down.
  • FK
    Firoze K.
    14 July 2020 @ 18:05
    Does anyone on here have any suggestions for an alternative for XME for a UK investor?
    • mb
      melville b.
      15 July 2020 @ 00:49
      Sure, I ran into the same problem when constructing a portfolio for a UK based friend. Take the ten largest( or however many you want) equity holdings of the ETF and allocate to your portfolio on an equal weight ratio, or weighting closely similar to what is shown in the holdings. The weightings can be found on any finance website on the SRDP website. Trades are free, should make little difference. Better yet....... Worthington Industries Inc WOR 5.09% Commercial Metals Co CMC 5.05% Materion Corp MTRN 5.05% Newmont Corp NEM 5.04% Freeport-McMoRan Inc FCX 4.99% Hecla Mining Co HL 4.77% Allegheny Technologies Inc ATI 4.73% Schnitzer Steel Industries Inc Class A SCHN 4.72% Coeur Mining Inc CDE 4.67% Royal Gold Inc RGLD 4.67%
    • FK
      Firoze K.
      17 July 2020 @ 14:10
      Thanks Melville
  • HH
    Hugh H.
    15 July 2020 @ 00:26
    I don't quite understand Julian's view on boomer's forced consumption expectation. Anybody can elaborate on his view, please?
    • JB
      Julian B. | Contributor
      15 July 2020 @ 23:33
      Hugh please see above
  • AA
    Alberto A.
    15 July 2020 @ 00:26
    Julian this was very thoughtful and super clear regarding the trade ideas and reasons behind it. Love the logic. Quick one: Do you use option for these trades or just buy the underlying straight up (which I'm assuming as you mentioned stops). Thanks again!
    • JB
      Julian B. | Contributor
      15 July 2020 @ 23:33
      Alberto to be honest it depends. But typically we just take outright positions. Its cleaner from a portfolio management perspective.
  • MD
    Michael D.
    15 July 2020 @ 19:32
    Exceptionally clear and thought-through. Thank you Julian.
  • TG
    Thomas G.
    15 July 2020 @ 16:53
    Superb. Half the value of RV Pro in my opinion is these reports.
  • km
    ken m.
    15 July 2020 @ 11:20
    Always clear and actionable. Thanks!
  • MJ
    Matthew J.
    15 July 2020 @ 01:57
    What expiry is the SpX 2500 put ? ESUO ? Can’t find it in Interactive Brokers?
    • HH
      Hugh H.
      15 July 2020 @ 02:33
      ESU0 means September 2020 E-mini futures
  • GM
    Guillermo M.
    15 July 2020 @ 00:05
    Many thanks, Julian.
  • AF
    Anoop F.
    14 July 2020 @ 22:25
    Great read and great calls. Thanks Julian.
  • JG
    Johan G.
    14 July 2020 @ 17:59
    Thanks Julian, totally agree! Multiple expansion means yield contraction. There is a limit to how far that can go, and I fear we are pretty close!
  • GL
    G L.
    14 July 2020 @ 17:29
    Thanks Julian.
  • JU
    John U.
    14 July 2020 @ 17:05
    Thank you Julian. Always look forward to your In Focus write ups.
  • CH
    Charlie H.
    14 July 2020 @ 16:49
    Great write up Julian. I've never before heard of the term "Cassandra Rally".

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yusko is the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets.

Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office. Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation.

Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.

Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

Prior to founding SkyBridge in 2005, Scaramucci co-founded investment partnership Oscar Capital Management, which was sold to Neuberger Berman, LLC in 2001. Earlier, he was a vice president in Private Wealth Management at Goldman Sachs & Co. In 2016, Scaramucci was ranked #85 in Worth Magazine’sPower 100: The 100 Most Powerful People in Global Finance. In 2011, he received Ernst & Young’s “Entrepreneur of the Year –New York” Award in the Financial Services category. Anthony is amember of the Council on Foreign Relations (CFR), vice chair of the Kennedy Center Corporate Fund Board, a board member of both The Brain Tumor Foundation and Business Executives for National Security (BENS), and a Trustee of the United States Olympic & Paralympic Foundation. He was a member of the New York City Financial Services Advisory Committee from 2007 to 2012. In November 2016, he was named to President-Elect Trump’s 16-person Presidential Transition Team Executive Committee. In June 2017, he wasnamed the Chief Strategy Officer of the EXIM Bank. He served as the White House Communications Director for a period in July 2017. Scaramucci, a native of Long Island, New York, holds a Bachelor of Arts degree in Economics from Tufts University and a Juris Doctor from Harvard Law School.

Michael Saylor

MicroStrategy, Co-Founder

Mr. Saylor is a technologist, entrepreneur, business executive, philanthropist, and best-selling author. He currently serves as Chairman of the Board of Directors and Chief Executive Office of MicroStrategy, Inc. (MSTR). Since co-founding the company at the age of 24, Mr. Saylor has built MicroStrategy into a global leader in business intelligence, mobile software, and cloud-based services. In 2012, he authored The Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot on The New York Times Best Sellers list.

Mr. Saylor attended the Massachusetts Institute of Technology, receiving an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society.

Alex Saunders

Nugget's News, Founder & CEO

Alex Saunders is the founder and CEO of Nugget’s News, a digital media company focused on all things crypto. Alex has been captivated by cryptocurrency since 2012 and in 2017 he began educating globally on the benefits of cryptocurrency and how to safely acquireit. Nugget’s News has been listed as a top-20 podcast by Business Insider, ShapeShift and Lifehacker and has over 120k YouTube subscribers with 9 million total views.Alex is also heavily focused on his cryptocurrency education platform Collective Shift which currently serves over 4,500 members. provides his unique perspectives by utilising his expertise in fundamental analysis, technical analysis and market sentiment. He is working towards his mission of making it easier for everyone to understand the financial world.

James Putra

TradeStation Crypto, Inc., Sr. Director of Product Strategy

James helped launch TradeStation Crypto’s offering which utilizes a true online brokerage model that self-directed investors and traders have come to expect for equities, futures, and foreign currency markets. He is a reputed crypto asset specialist and blockchain thought leader focused on helping people find innovative ways to participate in this space. He is active in the blockchain community with speaking engagements, TV appearances and mentoring. James has over 15 years of experience in the Fintech industry.

Raoul Pal

Real Vision, Co-Founder & CEO

Raoul Pal is the Co-Founder and CEO of Real Vision, the world’s pre-eminent financial media platform, which helps members understand the complex world of finance, business, and the global economy.

Real Vision members also have access to Real Vision Crypto, a cryptocurrency and digital assets video channel watched by over 80,000 people. In addition, Raoul has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 31 years of experience in advising hedge funds and managing a global macro hedge fund. Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years.

He retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands. Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences.

Other stop-off points on the way were NatWest Markets and HSBC, although he began his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full time journalist/podcaster covering topics such as Freedom, Human Rights, Censorship and Bitcoin. Peter created and hosts the What Bitcoin Did Podcast, a twice-weekly Bitcoin podcast where he interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. Expanding his growing list of human interest recordings, documentaries and films Peter has recently launched the Defiance podcast and DefianceTV.

Caitlin Long

Avanti Financial Group, Founder & CEO

22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. In 2018-20 she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws. From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), heldsenior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997). She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).

Hunter Horsley

Bitwise Asset Management, CEO

Hunter Horsley is Chief Executive Officer of Bitwise Asset Management. Prior to Bitwise, he was a product manager at Facebook, working on advertiser products including the multibillion-dollar sponsored content ecosystem and ad breaks in videos. Before Facebook, Horlsey was a product manager at Instagram, responsible for multiple advertising products generating several hundred million dollars of revenue. He is a graduate of the Wharton School at the University of Pennsylvania, with a B.S. in economics. Recently, Horsley was named a member of Forbes’ 2019 “30 Under 30” list.

Luke Gromen

Forest For The Trees, Founder & President

Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.

FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients. Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

Meltem Demirors

CoinShares, Chief Strategy Officer

Meltem Demirors is Chief Strategy Officer of CoinShares, an investment firm that manages billions in assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem. Meltem oversees the firm’s managed strategies group and its New York office and leads corporate development.

Previously, she was part of the founding team of Digital Currency Group. As a veteran investor in the digital currency space, she has invested in over 250 companies in the ecosystem.

Meltem is passionate about education and advocacy, and teaches the Oxford Blockchain Strategy Programme and co-chairs the WEF Cryptocurrency Council.