Meeting of Minds – November 2017

Published on: November 28th, 2017

In the spirit of his ‘3Ds’ headwind/tailwind approach, Raoul identifies headwinds for China and tailwinds for India and highlights some especially encouraging market developments in the latter. Julian examines how the flow of central bank liquidity has dominated price discovery in 2017 and provides a roadmap to a changing backdrop in 2018.

Comments

  • DL
    David L.
    4 December 2017 @ 07:07
    Raoul, I have always placed my capital with investments in North America. You have opened my mind to research and consider India. Is there an ETF I can take advantage of when there are pullbacks in the Indian market? Any info or direction is much appreciated.
    • GS
      George S.
      4 December 2017 @ 18:42
      Most major ETF providers have India coverage.
    • EC
      Edward C.
      9 December 2017 @ 23:46
      EPI or INDA are probably your best picks David. However they are borad based holdings, so difficult if you wanted specific sector exposure. There are some DRs list in the US also. HDFC Bank for example has a US listing. However, that name trades at premium locally (Foreign room has been exhausted) and the DR again trades at a further premium to this. Cheers
  • KR
    Kieran R.
    6 December 2017 @ 01:05
    Julian this is one of your best pieces yet - outlined many of the dynamics at play well. A few questions: 1. You lay out the case for a higher USD - is this not in itself deflationary and a downward force on US yields? 2. In terms of the stock and flow of CB purchases: you mention a reduction in CB purchases and balance sheet unwind could reduce liquidity and raise yields. Back in 2000 the supply of US Treasuries was much lower than it is now and despite treasury repurchases yields peaked at more than 6.7%. Similarly in 2013 after initially rising more than 100bps after the mention of 'tapering' we hit new lows at 1.35% on the 10 year last year - are the structural factors more important in the end in determining yields than central bank machinations? 3. Doesn't central bank tightening usually precede economic slowdown, which eventually leads to lower yields? 4. You characterise the current yield curve flattening as a bull curve flattening as investors are pushed out further on the curve. Could it not just be the market already pricing lower growth and inflation on the back of expected central bank tightening? 5. You mention displacement and how investors have been pushed into high yield and equities. When these markets start to experience stresses could they not perhaps come back into the bond market and cap out yields? I realise my questions may be coming from a longer term time horizon point of view and you are perhaps discussing more imminent risks in rates Cheers
  • JJ
    Josh J.
    30 November 2017 @ 05:34
    @Raul, @Julian - On a side note, for the upcoming 'Insider Talks' or in inline comments here, it would be great to capture your opinions on projections on how to trade Bitcoin and Alt. coins and the upcoming Bitcoin futures contract. Specifically, do you project will the non-commercials will likely go long or short on the front month bitcoin futures contact? Do you have thoughts on going long or short or a calendar spread. Thank you.
    • RO
      Rory O.
      4 December 2017 @ 22:06
  • JJ
    J J.
    30 November 2017 @ 04:29
    Raoul, could you please elaborate on the problem of "one belt, one road"?
  • RI
    R I.
    30 November 2017 @ 03:21
    All I can say is that it will be interesting to see how Macro Insiders (the product) fares come July 2018.
  • TA
    The A.
    29 November 2017 @ 18:23
    Julian describes the flattening of the yield curve as a bull flattener. However, in the RV distillery from 15 november the current situation was described as a bear flattener: "This time, though, it’s a bear flattener, with front-end yields rising as the Fed hikes, whilst long-end yields have failed to push on. Bear flattening is the broad-based dynamic that has preceded previous recessions since 1980." Can someone explain? Thanks
  • TJ
    Tyler J.
    28 November 2017 @ 23:00
    Can a US individual buy Indian stocks?
    • DP
      Devraj P.
      29 November 2017 @ 05:27
      Many companies have an ADR - http://topforeignstocks.com/foreign-adrs-list/the-full-list-of-indian-adrs/
  • B
    Bob .
    29 November 2017 @ 05:06
    2018 should be interesting for many reasons. I suspect that some are awaiting January to lock in their winners and postpone the capital gains payment until 2019 so January may be "active". What we need is the ability to get true price discovery so we can rid ourselves of the zombies. One would hope in the next downturn that the Fed allows the economy to endure the pain and actually clear. Somehow I doubt they will and that is too bad. Thanks for another very comprehensive piece. As a side note, I appreciated your earlier excellent work on India. I am enjoying the ride and I view it as a 5+ year opportunity.
  • JJ
    Josh J.
    29 November 2017 @ 01:34
    V insightful. @Raul - If possible, can you share a potential trade setup (which instruments, time horizon, ballpark target and potential stop loss) for investments in India? Based on @Julian's writing on potential USD strength, and bearish EMs, do you think this is already priced in? It would be beneficial to gain perspective on how to reconcile investing in India (EM) and USD strength. Thanks.

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.