Daily Briefing – July 23, 2020

Published on
July 23rd, 2020
Duration
28 minutes


Daily Briefing – July 23, 2020

Daily Briefing ·
Featuring Nick Correa, Ed Harrison, and Tyler Neville

Published on: July 23rd, 2020 • Duration: 28 minutes

Managing editor, Ed Harrison, joins Real Vision’s Tyler Neville to break down his ideas around secular stagnating markets, demographics, and pensions. Tyler discusses how mega corporations are no longer playing to win, but playing to not lose and how the Fed’s monetary policies, especially in response to the pandemic, entrenches calcified companies, rendering the zombification effect. Ed and Tyler also examine how markets no longer reward innovative ideas with capital, but rather have converted into a debt refinancing mechanism and encourages a rentier market. They wrap their discussion by exploring how lack of funding will push pensions to go risk-on, whether Tesla can be likened to Amazon, and what may be coming to markets next. In the intro, Nick Correa shares the state of Kentucky recently filed lawsuit against Blackstone and KKR and how this highlights the extreme weaknesses and woes of the pensions industry at large.

Comments

Transcript

  • JM
    Jarrod M.
    26 July 2020 @ 11:02
    Just finished the Luke Gromen/ Hugh Hendry interview. These two gentlemen are rocks stars and provided great content and insight. I wish theses two bright minds would have dove more into the precious metals and commodities and their outlook over the next decade for selfish reasons, but really enjoyed the interview. Awesome, insightful, and entertaining!
  • RS
    Rob S.
    24 July 2020 @ 19:07
    Ed – always appreciate you – big fan. Tyler – would not watch another Daily Briefing with Tyler. Reasons: Boomers borrowing and buying real estate? What???? I am a boomer, all boomers I know are interested in wealth preservation and no debt. Not smart to become a landlord during a pandemic when rent payments are at-risk, at best, and government-mandated-no-payment, at worst. Best to invest in private companies? What???? I was in M&A for 12 years. Private is the riskiest space. Private is also highly overvalued due to misappropriation of capital as a result of TINA (see SoftBank). OK, if you want a moonshot take 5% of capital and give it a go, but to recommend that is how to close the gap between millennials and boomers is irresponsible. Concerning investing in higher risk vs more-traditional as a way to close the gap between millennials and boomers… The problem millennials have is they entered their wealth building era when all asset prices were already high (real estate, stocks, etc). You build wealth by buying a quality asset at the right price. We are in a bubble right now. The right price will come, have dry powder and then buy quality, not risky, assets. The more Tyler spoke the more scared I became for him. He is giving investment advice to himself and others but he is not battle tested. I want advice from someone who has gone through 2000 and 2008 (1987 would be a bonus). Wisdom is not gained during a mania phases. Concerning his idea to go with gold miners vs gold… Unless you can time it, bad advice. Gold has some volatility, but the miners have a ton of volatility. With precious metals it is key to know when to get out. I built highly sophisticated proprietary software to solve for that, but the general public can use the SPY/IAU ratio to help them. That ratio is not perfect, but it would have saved your butt from 2012 through 2016. Knowing when to get out of the highly volatile miners is very difficult and you can give back all your profits in a flash. In addition, miners do not perform better than gold when you look at a longer period. Example #1: mid 2005 through current, GDX (+7.54%) vs IAU (+182.63%). Example #2: Lehman collapse to August 2011 peak, GDX (+184.83%) vs IAU (+229.51%). In summary, have Tyler back on RV after (i) the market is down 50% and he foresaw it, or (ii) the market crashed and he has some battle scares. Until then, I sincerely wish him luck.
    • TN
      Tyler N. | Real Vision
      25 July 2020 @ 00:28
      I actually think those are great points and do think about all of them constantly. Like I said, If credit spreads widen I’ll change my tune. I went thru 2008 and bonds actually sold off and there was a credit crisis and valuations reset. How do you explain bond yields at all time lows and mortgage rates at all time lows? Just curious...I think we are in Ponzi finance right...
    • JA
      John A.
      25 July 2020 @ 02:42
      Tyler strikes me as a person who feels they will be able to get out of the market in time. Perhaps he will play this right. But this industry is full of people who think they have an edge. They can't all get out without some of them being disappointed. The problem with suppressed volatility thru Fed action is that it often acts like a coiled spring. When it gets loose, there is a lot of potential energy that will be unleashed all at once. We already saw a flash preview of that in June. And a more pronounced demonstration of that in March for that matter. I don't see a bull case for this market that doesn't involve the never-ending actions of the Fed. At some point, the politicians are going to mess this up for the asset owners and a lot of people with too much invested in this market are going to see liquidity disappear in a flash. If someone trips over the Ted Spread and shakes it just a little bit, the whole system is going to start looking REALLY hard at that exit.
  • RF
    Russell F.
    25 July 2020 @ 02:05
    Great DB! Good to have someone finding and deploying their bullish sentiment well.
  • CM
    Cory M.
    24 July 2020 @ 23:48
    Still glad Tyler's aboard. Interesting POV. Welcome Austin!
  • RO
    Robert O.
    24 July 2020 @ 23:32
    For a better answer of what is going on in the gold and silver market you can read the 350+ page In Gold We Trust-2020 or RV could just interview Ronald-Peter Stöferle.
  • JF
    Joshua F.
    24 July 2020 @ 21:24
    Always great content, Men. FYI - 30b and counting in AUD removed from Australian superannuation up to mid July.. https://www.abc.net.au/news/2020-07-16/coronavirus-super-early-withdrawals-near-30-billion-dollars/12459648
  • IN
    I N.
    24 July 2020 @ 18:46
    Tyler brings a number of good points, and his perspective is very fresh. He explains the persistence of high valuation companies in the presence of the Fed's MMT policies. Ed's analogy of Tesla to Amazon of the 90s is a good parallel to this. I would look for growth in new ideas as they come out of "small cap" or "sub-small cap" (unlisted small companies looking or investors), as even small cap can be affected and held back by market pull-backs. Maybe Peter Thiel's "seek the future" capitalism ideas that urge diverging from the related notion of "indefinite optimism" that Tyler mentioned explicitly is the way to go for anyone looking to invest.
  • JR
    Jacob R.
    24 July 2020 @ 02:39
    My only question regarding IPOs would be under what conditions does well? We have had a bear market rally since covid hit. Does IPOs continue to dominate if that reverses ?
    • TN
      Tyler N. | Real Vision
      24 July 2020 @ 02:45
      My only question...Is it a bear market?
    • EM
      Eivind M.
      24 July 2020 @ 18:09
      Tyler: Have you ever seen a bull market with the volatility we've had since March? 1-2% intraday swings have been the norm. That's why I personally am still convinced this is still a bear market. I also have no confidence in the Fed managing to levitate this much longer. At some point the equity market (much like the bond market has) will call the bluff and see the Emperor's new clothes. I don't see anything in bond markets that would indicate anything resembling a flood of dollars.
  • JH
    Jacqueline H.
    23 July 2020 @ 23:00
    *sigh* Thank you Ed, good job as usual. Mr. Neville has a good imagination and tells some interesting stories around his theories, but he sounds like a Twitter day trader. I'll also add that the markets are and have been seriously impaired by Central Bank interference which makes it hard for many investors to make consistent gains on sound investing principals (remember value?). Turning the investment arena into a war between generational buckets is not helpful. We're all trying to navigate this mess together.
    • ES
      Edward S.
      24 July 2020 @ 10:01
      Twitter day traders are the ones making money
    • PW
      Paul W.
      24 July 2020 @ 12:04
      The NASDAQ day traders were the ones making money in 1999.
    • MT
      Mike T.
      24 July 2020 @ 18:09
      Ref Nasdaq day traders, a little over 15 months post 1999, they were all dead in the water
  • AK
    Arthur K.
    24 July 2020 @ 18:01
    Thanks for highlighting IPO etf.
  • PU
    Peter U.
    24 July 2020 @ 17:57
    He is on the right path but his underlying rationale is disjointed. Meaning he is arriving at the right conclusions but for the wrong underlying macro and micro thesis. Nevertheless, it was enjoyable.
  • JJ
    John J.
    24 July 2020 @ 16:23
    I got very little out of this conversation. Most of Tyler's investment ideas were not actionable. Not much to work with in terms of creating a framework. Plus, the AV quality in Austin was awful.
  • ES
    Edward S.
    24 July 2020 @ 10:30
    Sorry for the noob question but how do I invest in gold miners?
    • GG
      Gary G.
      24 July 2020 @ 11:28
      Canadian and Aussie equity markets are a good place to start. Many to pick from on the tsx and tsx venture that give you high leverage to gold.
    • ES
      Edward S.
      24 July 2020 @ 11:55
      Thanks Gary!
    • MC
      Michael C.
      24 July 2020 @ 12:34
      Look at GDX and GDXJ. SILJ as well. Lotta interest in the sector already.
    • DM
      Doug M.
      24 July 2020 @ 13:42
      Gary Go to yahoo finance, pull up GDXJ, that is an ETF, if you want individual names, with more risk, then hit the holdings page of GDXJ, that will give you the top ten holding names. They may not be good stocks, but it is a start. You also can pull up a mutual fund like FEGIX and look at their holdings, one would hope a mutual fund has done the work on who they select. This would give you some ideas of names to investigate. Small minors could be thinly traded, are small and volatile so size your trade carefully.
    • ES
      Edward S.
      24 July 2020 @ 14:16
      Thanks Michael & Doug, that's really useful. I'll get researching.
  • SM
    Sean M.
    24 July 2020 @ 13:39
    Tyler, I was wondering if there was a way to watch how many of these new retail accounts hit the PDT rule. If we get a lot of vol in a given week and people are sitting home trading, if a significant number of accounts go PDT, might that stop the added retail flow?
  • DR
    Danilo R.
    24 July 2020 @ 07:24
    The credit market is apparently on summer vacation in self isolation waiting for the vaccine to come back alive. The only driver of the stock market is the need for 7% percent return for pension plans. The very job security of the fed and our politicians is dependent on boomers getting their entitlements no more matter the level of debt or the stupidity of the risk. These are unpredictable times because we never had such a huge population that depended entirely on inflated assets to survive. Ignoring China, we have the AOC headwind that wants to see the system burn so the Frappuccino tip took generation can day trade penny stocks with UBI checks and their gig economy black market economy income.
  • HT
    Hans T.
    24 July 2020 @ 06:15
    There is no way US pension funds are going to generate 7% in a zero interest rate world. Instead of being honest with people and lowering their hurdle rate to 3%, their grand idea is to leverage up and invest in the most illiquid asset class with the highest fees and lowest transparency, then sue the asset managers for not making enough money, hoping for an anti-capitalist judge to award massive damages. This is turn will encourage private equity asset managers to take in more money from pension funds, thus ensuring they go out of business. It's so stupid it's genius!
  • AP
    Aneil P.
    24 July 2020 @ 05:49
    Gold, Bitcoin, Silver and and new tech
  • XM
    Xavier M.
    24 July 2020 @ 04:26
    Yes, yes. Many of us are insufferably bearish. But Mr. Neville always makes a compelling case. I do think many observers like him are still discounting this very dangerous US election at their own peril. There’s a reason why the likes of Mr. Gammon and others are hiding away in St. Barts. But, we shall see.
  • JB
    Jamie B.
    24 July 2020 @ 03:49
    I really enjoy Tyler's insight. Great stuff. Funny, I was watching an old trading training video with Mark Douglas the other day and who should I see in the audience but a very young Tyler (I'm positive its Tyler). Great to see he was trained by one of the masters of trading psychology https://youtu.be/6i4xPdCQ-L8?t=328
  • PB
    Paul B.
    23 July 2020 @ 22:55
    He said it right there ....I'm so Bearish I'm Bullish......They are pretty much all playing the same dangerous game.....Like all things high risk....If the tide turns it's like a friggen Tidal Wave simply because of the High Freak Trading in the Pension Funds....Most nearly all Stocks are a no go Zone Bro...Just look at risk verses reward. I'm staying on 65% Gold 15% Silver 5% Cash 15% Gold Mines until the Ponzi Scheme implodes and the forced selling comes into the Crypto Space, then and only then would I consider changing my Weight around and Stocks wont be in there especially US and Aussie...Emerging Markets are the way to go after the reach the Bottom and we have 2 years to go yet
    • PC
      Peter C.
      24 July 2020 @ 03:48
      Wow. I thought I was high with a 30% allocation to PM.
  • JH
    Jon H.
    24 July 2020 @ 03:25
    Sound was so bad that I opted out midway.
  • MC
    Michael C.
    24 July 2020 @ 03:22
    Good interview. Great defense wins games and may keep one in the game. 10 year bonds paying 3% in Dec 2018 to .6 was a great play without a lotta stress; I can't see the Fed raising rates for a long, long time so a zero 10 year yield is not out of the question . FAANGM stocks are a Potemkin village IMO...multiple expansion; still a win but I don't know how long one can ride that horse. Gold/silver have been good but what everyone knows isn't worth knowing...they'll have to sell off and discourage the CNBC talking heads....lol. Kinda like Cryptos because PM's would get fired for buying them. It's just hard to see much true organic growth in anything and value without momentum of some sort is dead money. I just don't want to blow up before the big opportunity shows up which I will then not want to buy...lol
  • MC
    Michael C.
    24 July 2020 @ 01:59
    Within the first few minutes Tyler said he would be looking for a sell off in BONDS for him to be concerned about a market correction. Are you serious Real Vision? Did he mean G7 sovereign bonds, EM sovereign bonds, investment grade corporate bonds, junk bonds? Where in the credit spectrum is he referring? He didn't say because like the rest of his comments they are a collection of meaningless throw away statements. Liking or disliking this video should have nothing to do with whether you are a bull or a bear and everything to do with whether it offered real insights that add value to your own process. However real insights need to be backed with demonstrable facts, credible analysis and a framework/thesis that is properly explained. Roger Hirst does this and that is why he is so popular (not because he is a bear or a bull).
    • TN
      Tyler N. | Real Vision
      24 July 2020 @ 03:10
      Credit spreads on US corporate bonds... also if treasury yields go higher...
  • RT
    RANDALL T.
    24 July 2020 @ 01:41
    Seemed to be more a generational warfare segment. Tyler appears to have a chip on his shoulder about Boomers and it comes through. Very dangerous to analyze markets with a chip on your shoulder. Boomers know this already and Gen X's are learning.
    • RT
      RANDALL T.
      24 July 2020 @ 01:44
      though very good to hear how Millenials/Gen Z's are thinking.
    • TN
      Tyler N. | Real Vision
      24 July 2020 @ 03:00
      Dangerous for millennials not to understand what’s going on....
  • MM
    MARTIN M.
    24 July 2020 @ 02:24
    Enjoyed it... And appreciate Tyler willing to be "the market-top guy"... My best guess is that he'll have that opportunity... But I'll be happy to be wrong there myself
  • DS
    David S.
    23 July 2020 @ 22:47
    Venture Capital is where the money is investing in new dynamic companies. Even pension funds are moving funds to VC while the stock market is high. Firstly, there is no quarterly mark to market as you can value VC companies more loosely. Secondly, the emphasis on making great progress each quarter in revenue and profits is markedly less. Thirdly, financial engineering is easily done. Fourthly, you can execute a plan without Wall Street yelling at you and Wall Street attorneys suing you all the time. Fifthly, you have big investors who can help you in developing your business. It is only reasonable that the best new bets are in VC. There is a lot of trash in VC, but some of that can be analyzed out. The current and future growth of innovative Capitalism is in Venture Capital. (A nod to old English.) DLS
    • RN
      Rohit N.
      24 July 2020 @ 02:08
      DLS - very well summarised DLS! couldn't agree more
  • BD
    Ben D.
    24 July 2020 @ 02:06
    I think Tyler should do another piece for RV on his idea of disruption through the IPO markets. That's a brand new idea I haven't heard before that has some weight behind it. Either way, the daily briefings in general have been a really good way to distribute bite sized idea so great work RV.
  • sw
    stefan w.
    24 July 2020 @ 01:31
    Please try to do a better job providing sources for key data and tables. The interesting table shown in the video, "Millenials share of household wealth remains stubbornly low" was pulled directly from this FT article with no attribution: https://www.ft.com/content/241f0fe4-08f8-4d42-a268-4f0a399a0063 good update today... thanks..
  • RH
    Rohit H.
    24 July 2020 @ 01:24
    Thought Tyler was great would be good to have him on regularly
  • JS
    Jonathan S.
    24 July 2020 @ 01:23
    Very interesting. My question on this innovation and gold barbell is how to assess valuations on when to step in to the trade. Gold is easy to assess but how do you enter on the other side of the bell and not get sucked into FOMO
  • TL
    Tevin L.
    24 July 2020 @ 01:18
    This was great.
  • BB
    Bob B.
    24 July 2020 @ 00:47
    Great interview but I would have like some more specifics time horizons on his bullishness.
  • CH
    Charlie H.
    24 July 2020 @ 00:40
    Great interview with Tyler, definitely had me thinking.
  • VD
    Vishal D.
    24 July 2020 @ 00:36
    this was awesome
  • RO
    Robert O.
    24 July 2020 @ 00:28
    From ZH: "Millenials Flood Into Precious Metals: Is Gold The Next TSLA?" Earning reports for the miners in the next three weeks. Gold closed up again, above $1880 today. Silver pulled back but still over $22. Why pay up for the big tech stocks when you can find many miners that have been buying back shares with free cash flow and expanding their dividend? KL P/E 16.3, 1% dividend. Or just add a streamer like WPM or FNV for a safe and likely expanding dividend and rising equity price. And there are plenty of new names like Wallbridge, Lumina Gold, Freegold Ventures to speculate on. Maybe overdone in the short run but better than watching paint dry in the S&P or hoping you're not buying the top of the NASDAQ.
  • PL
    Pierce L.
    24 July 2020 @ 00:20
    Great interview Ed. Tyler rocks. Definitely in line with his view of the barbell approach.
  • JD
    James D.
    24 July 2020 @ 00:13
    Loved it! Both participants fed off the other. Right or wrong, Tyler offered legitimate ideas. I tend to agree with him and can't wait to see things play out. Ed was great in this role...fun stuff!
  • SB
    Steve B.
    24 July 2020 @ 00:02
    love this. invest in the future while having a stake in the time honored past. And it makes sense from a tactical standpoint imo. Im curious as to whether tyler has thoughts on specific companies and sectors within the new IPO space/barbell approach.
  • SS
    Sheldon S.
    23 July 2020 @ 23:47
    More Tyler, please.
  • MH
    Matthew H.
    23 July 2020 @ 23:47
    Tyler Neville sound is terrible. needs wired headphone with mic as a minimum. basic apple-ish headphones at a minimum
  • JH
    Joseph H.
    23 July 2020 @ 23:38
    I enjoyed that. I think Tyler has some interesting points and perspectives. Helps me look at things from another angle. Thank you both
  • DT
    David T.
    23 July 2020 @ 23:33
    If tide turns and inflation picks up, all those 'new idea' companies will be dumped for metals, crypto and Buffet will be smiling.
  • MD
    Matt D.
    23 July 2020 @ 23:26
    Nice ending lads.
  • GC
    GIANCARLO C.
    23 July 2020 @ 23:21
    One of the best dailies in some time. Would love to see Tyler on once a week.
  • MT
    Mark T.
    23 July 2020 @ 23:13
    If you look for them, there are 'experts' who will predict every possible outcome.
  • DM
    Doug M.
    23 July 2020 @ 22:48
    Tyler had some good insights. If you don't usually listen to the daily briefing, you should watch this one. I find watching at 1.5 speed gives you all the content, with less time invested.
    • DM
      Doug M.
      23 July 2020 @ 22:55
      He said, "I am so bearish I am bullish now..." interesting... Ed did a good job on this one.
  • BS
    Bevyn S.
    23 July 2020 @ 22:50
    Great interview Ed. Great call on the seasonally adjusted job #s 👍