Insider Talks – June 2020 (LIVE)

Published on
June 5th, 2020
51 minutes

Insider Talks – June 2020 (LIVE)

Insider Talks ·
Featuring Raoul Pal and Julian Brigden

Published on: June 5th, 2020 • Duration: 51 minutes

In this month's Insider Talk, Raoul and Julian will be going live at 11:15 AM EST on June 8th to discuss their recent thoughts and answer questions from our Real Vision Pro and Blacklist members.



  • MC
    Mark C.
    8 June 2020 @ 20:38
    Seemed to me that for the first time in watching Raoul that he was pretty defensive in his body language and talk, I'm guessing because of his strong stance on USD milkshake, rates going negative and being bullish on Gold and BTC . To be honest, these trades are not having a good run at the moment but I'm keeping faith and trying to remember that these are longer term moves and that the narrative still may be intact. Also to note, I really appreciate Julian's details of entry, stop and target which allow me to position size better knowing how much to risk and what the reward is.
    • HM
      Harry M. | Real Vision
      8 June 2020 @ 22:39
      Mark, forgive me for commenting, but I think even if RP doesn't give you stops, you should think through what you think regarding money management, and implement an appropriate strategy for you. Its your trade, ultimately not RP's or JB's. You put it on and you take it off. If it doesn't work for you then you should adjust it to be appropriate to your needs. I am a subscriber to a technical service cos I am not a good technician. The gentleman in question does appear on RV. I really like his work and he fills a gap in my skill set. However while he gives stops etc, he does not size the trades for me. And I often adjust his stops to reflect my own trading style and mentality. JB and RP are giving you trade ideas and a trading framework, But you have to customize it to best suit your needs. Once again, forgive me for commenting.
    • MC
      Mark C.
      9 June 2020 @ 14:12
      Harry M - no forgiveness needed, thank you for your constructive comment. Take care.
    • SN
      SAT N.
      11 June 2020 @ 02:28
      > The gentleman in question does appear on RV. I really like his work and he fills a gap in my skill set. Would you mind sharing this referral?
    • AL
      Andrew L.
      15 June 2020 @ 03:46
      Harry M, I would like a reference to a good technical service too
  • Yc
    Ying c.
    11 June 2020 @ 23:34
    does anyone here know why Raoul's long USD position doesnt include selling CAD?
    • DL
      David L.
      12 June 2020 @ 03:06
      Wondering the same thing??
  • MT
    Michael T.
    10 June 2020 @ 19:53
    Raoul (I believe) mentions Druckenmiller speech from last month at the The economics club of NY, and having read the transcript. Where are copies of the transcript?
  • AA
    Alberto A.
    9 June 2020 @ 18:29
    Thanks for this discussion. One of the best of the year. Thoughtful and at the same time actionable. Thanks for answering my question about "hedging" my short currencies positions. At the end as a macro trader we have to be patient and therefore have the right hedged portfolio so you wont get stop out all the time. I'm trading both medium to long term so your complementary thoughts on timing is great. "trade your time frame" "never loose money on a winning trade". I'm up for the year big time so is time to preserve my capital and be patient for the next and right risk/reward move!
    • HM
      Harry M. | Real Vision
      10 June 2020 @ 12:19
      Our pleasure Alberto. One cant emphasize capital preservation enough. No one is right 100% of the time. As a friend of mine repeats over and over to me, "Its isn't the things you don't know that will kill you. Its the things you know that just ain't so". Apparently this was a oft-repeated mantra at Tudor.
  • SS
    Steve S.
    8 June 2020 @ 21:48
    IMO in the short term i.e. this summer, The Dollar Bull thesis is dead. Keith McCullouch from Hedgeye, a Dollar bull has now switched to a Dollar bear as of today.
    • Dv
      Daniel v.
      9 June 2020 @ 04:58
      Oh boy, keith has been so wrong lately. He has been short a lot of stuff all the way up. I wouldn't bet on Hedgeye. They could switch again next month.
    • MC
      Mathieu C.
      10 June 2020 @ 08:05
      Hedgeye is a funny animal... I like their macro framework but they should not be so arrogant when you are so wrong (often). They shorted SPY in JAN 19 printing a big loss and here we go again a year later. What did they learn.
  • SS
    Shanthi S.
    10 June 2020 @ 05:33
    Great discussion. Thank you guys.
  • TC
    Thomas C.
    9 June 2020 @ 16:42
    Poor sound quality so could not listen while driving. I'm sure the content is good have to relisten
  • JW
    J W.
    8 June 2020 @ 19:30
    Julian’s recent trade recommendations have obviously been brilliant, as has the underlying analysis. I was looking for an answer to the question about whether I should add to these winning positions or should take profits/raise stops. I got that answer, so thanks! (I am itching to add to the silver position – cf. also the Gurevich interview - but will now wait for the US Dollar to drop further). In contrast, I imagine anybody with prudent risk management will have been stopped out of the trades recommended by Raoul (except perhaps BTC, but I for one am not touching that). The value of his contribution would improve immensely if he did start to set specific targets and stops. He keeps talking about the guy he used to have to trade around his ideas. Bring that guy on!
    • DR
      Derrick R.
      8 June 2020 @ 20:46
      I think I read a comment from Raoul somewhere where he said he doesn't use stops in his trading. I went through a period of frustration trying to figure out how to make a trade out of Raoul's recommendations as I don't have an FX trading account, or really had much practical experience assessing my trades from a risk management perspective. I believe Raoul's response to myself and others on this issue was to recommend educating ourselves on the broader universe of trading markets and strategies, hence the trading academy promotion RV sent out recently.
    • HM
      Hazvinei M.
      8 June 2020 @ 21:08
      The way I understood Raoul's comment about the guy trading around him, it had to do with time frames; different time frames bring about different trades. In the case of MI, wouldn't Julian be on different time frames, and thus different trades? My approach has been long term oriented towards Raoul's view, building towards those positions with Julian's positions. It's like the trading lesson, nothing goes up or down in a straight line, there are times of high momentum, correction, and then change in regime. The EUR/USD move looks like a lower time frame correction for the long term trend. If you can catch it, you can trade the current C-wave per Julian's recommendation and then turn around and trade the trend down to connect with Raoul's view. Alternatively, you just setup for the trend trade of a weaker Euro and once everyone is catching up, you size up and get the meat of the trade. My 2 cents.
    • JW
      J W.
      8 June 2020 @ 21:13
      Education is certainly a good thing. One of my favourite trading books has the follwing quote: "Someone who trades everything and anything, i.e. over-trading, will eventually lose their money. Anyone who is unable to hold on to their winners, but who are able to hold on to their losing trades, will eventually lose their money. Anyone, who adds to their winning trades will catch our attention (positively), but anyone adding to their losing trades will with near certainty lose their account deposit at some point – sooner or later. Anyone trading without a stop loss will follow that path too. We sadly see it all the time." (T. Hougaard) So a beginners guide to trading will teach you: 1) Never add to a losing trade; 2) Never trade without a stop!
    • HM
      Harry M. | Real Vision
      8 June 2020 @ 21:57
      FWIW, I think Hazvinei has nailed it. JB and RP have different styles and different time horizons. RP is trading a longer time horizon which is particularly useful for setting trading strategy and less useful for tactical trading. JB keeps an eye on the longer term but generally focuses on a 6 week to 6 month time horizon. In this special case there is probably one other difference. My impression is that RP believes that ultimately, the Fed does not have the tools to prevent a debt deflation outcome. The can postpone but ultimately they cannot stop it. In contrast JB is more "optimistic" in the sense that he thinks that they can, if determined enough, force an ultimately inflationary outcome. JB definitely does use stops. RP does not generally use stops. But he does strongly suggest appropriate scaling of trades to control risk, and the use of asymmetric risk return instruments, like options, to control risk.
    • JW
      J W.
      8 June 2020 @ 22:22
      I have very high regard for RPs analytical capabilities. But I don’t have to be a pro subscriber to know his general view on USD, BTC etc. Without specific trade recommendations there is not much value added. Perhaps Real Vision could ask somebody who agrees with RPs debt-deflation/doom-loop/dollar-bull-thesis to put up tradable recommendations. How about Roger Hirst? I don’t think it is doing justice to JB to portray him as the short/medium-term addendum to RPs macro view. In fact, since they both seem to agree the Dollar will eventually depreciate, it may be the other way around…
    • GP
      Geoff P.
      9 June 2020 @ 11:42
      JW, for what it's worth on stops as the only risk management tool, that's not correct. You do not need to use stops to mitigate capital loss (e.g. if you risk 2% on a full position and it goes to zero, you lost 2%, this is the same as the trader that risked 2% on the entry - stop of a position and got stopped out). Traders, particularly short term traders, use stops because it allows them to leverage the size of the position. For example, if you have a dollar wide stop and you risk 2% of your capital on that dollar, your size of the trade will be significantly larger than one that risks 2% of their capital on the whole position (no stop, full price being the risk). Position sizing, not stops, is the real risk management tool. Stops simply attempt to maximize the ROC by employing leverage (creating a larger position because instead of your risk math being based on the whole position it's based on entry - stop). There are lots of areas that employ position sizing, not stops, for risk management. VC funds for example, options traders as another... Position sizing is perhaps the most critical component of trading (even when using stops). It's the balance between maximizing profits and minimizing loss. The longer the time horizon the higher the desire to not be chopped up getting in and out of an idea.
    • DR
      Derrick R.
      9 June 2020 @ 13:40
      Beautifully explained by Geoff - couldn't agree more
    • JW
      J W.
      9 June 2020 @ 15:50
      Point taken, Geoff. I agree with the importance to keep the initial position fairly small. I am so risk- and loss-averse, however, that I much prefer to have a stop anyway.
  • NR
    Nathan R.
    9 June 2020 @ 13:01
    Thanks Harry for good questions, great management of the conversation and following up here in the thread. I would agree with another commentator that Raoul should consider making his RV platform commentary higher value via scarcity. An aside: For me the juice is in the macro framework construction. The qualitative tools that are informed and complemented by quant/technical addenda. The trades are simply Plant’s range and Page’s screaming arpeggios to the framework’s Jones/Bonham deep line. Take away that deeply informed structure and the notes simply grate. All to say, I have been long the UST curve for well over a year. I’m implicitly long USD, long equity vol, long deflation, short general equity and short EM. More philosophically, long preservation, short hubris. Discretion...valor...etc. In order to have any chance at winning you have to be able to stay in the game. Fighting retreats and managing logistics are the highest test of skill for any general. Without mastering those, you will eventually lose. Mixed metaphors. Shaken, not stirred.
    • HM
      Harry M. | Real Vision
      9 June 2020 @ 14:07
      Very good Nathan! Who doesnt like Zeppelin. And I liked how you mixed those metaphors. You got to know when to hold them.
  • MB
    Mark B.
    9 June 2020 @ 04:20
    Julian, Regards, silver when you say increase the stop on silver to $16.50, is this on the SLV ETF that closed at $16.59 on 8-Jun? Or, is it on the actual metal price that is currently $17.86 closed at 8-Jun?
    • JL
      J L.
      9 June 2020 @ 10:17
      actual price surely
    • HM
      Harry M. | Real Vision
      9 June 2020 @ 14:04
      Yes precisely. Actual price. $16.50 on XAG, the spot price of silver. As of writing that is $17.68
  • SS
    Steve S.
    8 June 2020 @ 23:40
    I am one of RV's biggest fans but today's Insider Talks was not up to scratch for the following reasons: 1 - You started 15mins later than planned. 2 - The sound quality was terrible live absolutely awful. Did you not do a sound check? 3 - You finished 10 mins early, usually its one hour despite there being a ton of unanswered questions, including mine that I submitted. 4 - I love dogs but I don't want to hear a bloody dog barking during a talk hit the mute button at least.
    • SS
      Steve S.
      8 June 2020 @ 23:47
      I told my wife I couldn't help her do some chores because I was listening to a very important live conversation and all she could hear was WOOF WOOF from my room. No wonder I got the death stare and I'm sleeping in a separate bed tonight.
    • HM
      Harry M. | Real Vision
      9 June 2020 @ 12:30
      Steve, I am terribly sorry. The sound quality point is well made. Efforts to improve sound quality have so far only made it worse. I am sorry about the dog. Now as for your question can you ask it now?
  • RG
    Razmig G.
    9 June 2020 @ 01:22
    Medical knowledge with which you're basing the outlook needs to be updated. Now the thinking is to allow "permissive hypoxia" meaning less reliance of ventilators and ICUs, so ICUs overflowing won't be an issue. Also WHO just said today that asymptomatic carriers don't transmit. If true this is a massive finding. It is equivalent to it's social effects as a vaccine is. Basically more positive news.
    • HM
      Harry M. | Real Vision
      9 June 2020 @ 12:27
      I will have to take your word for this Razmig. But I agree, if true its a game changer. But I pity the FOMC. What a place to find oneself!
  • AP
    Aneil P.
    9 June 2020 @ 01:51
    actual unemployment is 33MM according to USdebt clock. Why are we still talking about reaching 20% unemployment. What are we talking about?
    • HM
      Harry M. | Real Vision
      9 June 2020 @ 12:26
      The unemployment data is hopelessly muddied. There are all sorts of things which mean the BLS figures are not reliable. I think 20% was a good guess regarding peak unemployment, whether the BLS data shows it right now.
  • RG
    Razmig G.
    9 June 2020 @ 02:01
    Julian why didn't you bring your point about if you throw enough money at this all time highs can happen. Also your mention about the Iran equity as a case in point.
    • HM
      Harry M. | Real Vision
      9 June 2020 @ 12:24
      There is so much one could say, and its so hard to mention everything in a one hour talk. But I can assure you JB very much stands behind that point Razmig.
  • JW
    Jim W.
    9 June 2020 @ 03:10
    I thought this was one of the better Insider Talks, as it's clear we're basically in a lull for Raoul's positions/thesis while Julian has a bunch of exposure "playing the bounce". Since the two of you disagree right now on currencies, and it's the area about which I know the least, I'm opting out for now. FWIW, I think Raoul's doing the hardest thing for a trader, which is nothing. Unlike than most of the folks in the comment section, I was surprised at how MANY trades were being put on in a macro service, at least until Feb-Mar when the trading opportunity shifted from "sometime in the future" to NOW. I have other things in my portfolio besides what Raoul and Julian recommend as well, so I look for things that will either behave differently or excellent risk/reward opportunities. Raoul, I hope you find a 2 year risk/reward you like-after those Eurodollar calls last year I'm spoiled in terms of cheap, long term optionality. Further, your interview with Hugh Hendry a month ago was also really important for me from a portfolio mgt perspective--I put on SP 4000 calls at 25 or 50 bps as HH talked about--even though they were contrary to my beliefs about the market direction, they've helped me sleep better at night. Both of you were clear about government intervention creating risk on the trades, so y'all made sure that (if I listened) I made money on the trades. Julian, your point about "Never let a winning position turn into a losing position" is a great one, and thank you for beating that drum. Much of the financial media is all about being 100% invested on flavor of the day stocks (which I guess is bankruptcy right now, though that's a sour taste) so reminding all of us advanced retail traders not to become the proverbial "dentists" is much appreciated. Your discussion as well on possible hedges that are not just "buy puts against the position" was a good one, and an excellent insight to the mind of the macro trader.
    • HM
      Harry M. | Real Vision
      9 June 2020 @ 12:22
      Great points. Totally agree.
  • HS
    Haythim S.
    8 June 2020 @ 20:30
    Thanks guys, great discussion as always. I just need a clarification on one point. Julian suggested that we add to our silver position if dollar start to moves. I am assuming this means add if dollar goes further DOWN ?
    • HM
      Harry M. | Real Vision
      8 June 2020 @ 22:25
      Forgive but that wasn't quite what I heard. I think if you look at the gold-silver ratio chart, you will see that a lot of the cheapness of silver has corrected. Precious metals are a little crowded now, but I think if the dollar makes a decisive break weaker it wont matter that silver is no longer very cheap relative to gold. Similarly it wont matter that there are so many new longs in gold. Ultimately, if you think the Fed/UST does a "rinse and repeat" then you should be long both. But it doesnt seem like a great level to add new longs. Thats what I took away from the call, but I might well have heard it wrong. Do others agree?
    • JW
      JW2 W.
      9 June 2020 @ 07:26
      @Harry - I took away that long term Julian is bullish on silver. He does not advise to enter now. He did say to 'pile into' silver the moment the dollar weakens. My own take is that if you take the assembled wisdom of the fintwit crowd (Alex G, Mish, Weldon, Kabusa and other experts), people recommend to be long silver due to the store of value reason as well as the fact that when the economy is opening up the industrial application of silver will increase. I am and will stay long but won't add anymore. I will look at some potential profits points if SLV hits 20 or 30 at some point.....let's see how it plays out.
  • DB
    David B.
    9 June 2020 @ 02:32
    Excellent discussion, thanks!
  • SS
    Steve S.
    8 June 2020 @ 22:49
    The awkward moment when you find out that post March 23rd, Robin Hoodies have outperformed Stan Druckenmiller (he made 3% since then)... 😱
  • ap
    andrew p.
    8 June 2020 @ 21:07
    Raoul and Julian, A topic that was touched upon today, and as I understand is a big part of Raoul's thesis, that is " real rates. We have US inflation out this week, if there is a miss to the downside and that kicks real rates higher further,( 5 years out to 30 have already moved higher). Do you expect in the short term gold to get hit, ( due to real rates higher, also risk assets wobble due to the real rates higher?) That is initially, the risk is, gold down and risk assets down, and bonds ultimately have to rally, (yields down) to offset the increase in the real rate?
    • HM
      Harry M. | Real Vision
      8 June 2020 @ 22:43
      There were a lot of questions today and I am sure that someone asked something very similar to this and we didnt get to it in the time. As usual I will offer and answer and if JB or RP come along they can correct my comments. I know that JB is nervous about Gold in the short run. A lot of new longs have come in above $1700 and the investment thesis behind those positions is challenged by rallying equities and a stock market recovery. Will the Fed and other global central banks continue to inject near infinite liquidity? Lower inflation tightens real monetary policy. But it also provides cover for the CB to be more aggressive in delivering liquidity. So while it might be negative in the short run, (and we might be surprised by how far it moves were there to be a sell off), ultimately low inflation will only prompt more aggression from CBs, at least from Julian's perspective.
  • JH
    Jon H.
    8 June 2020 @ 20:36
    @Raoul, I'm no expert, so: The USD's part of the forex market is somewhere around $1300 tn per year. Is really $1.5 tn in debt servicing from Non-US entities in 2020 enough to noticeably appreciate the USD ?
    • HM
      Harry M. | Real Vision
      8 June 2020 @ 22:32
      Forgive my hubris in trying to answer. I'm sure that RP will correct me if I have it wrong. The total turnover is a poor guide to actual exposures. FX traders can do a lot of turnover a day without actually having a position at the close. I would guess a number more like $100tr for the total size of the global dollar balance sheet. Even then you might think $1.5tr was not so bad, but I guess that depends on whether you have the kind of world in which its hard to borrow it. Until the Fed stepped in, we were in precisely that kind of world. So, yeah, if the Fed wasnt there, then $1.5tr is more than enough to cause a massive dollar move.
  • JM
    John M.
    8 June 2020 @ 20:33
    Great conversation, these discussions really help understand the framework. One question - given that it is possible we could see the dollar continue to weaken, any thoughts on how much cash to keep in an investment portfolio (excluding cash for daily expenses etc)? How much cash are you keeping to add to these positions?
    • HM
      Harry M. | Real Vision
      8 June 2020 @ 22:28
      I think money management issues are really about the individual trader and his style/risk management approach. Last time I checked JB has relatively high amounts of cash but since then he has put out a number of buy recs for cheaper risk assets/commodities. If you fear CB monetization then you probably dont want to own too much cash, but you do want to make sure you dont face a catastrophic cash call from your brokers etc. Sorry I couldnt be too definitive. For what little its worth, I have way too much liquidity right now!
  • SM
    Shantanu M.
    8 June 2020 @ 20:28
    Trade war, still? Sorry guys but that ship has sailed. Last year was proof that even if he wins the election in November 2020, Trump is not going to touch US's tech industry dealings with any country in the world. He might ratchet the rhetoric every once in a while but under the hood there will be exemptions and all sorts of side deals to protect business interests in short-term. Market knows that and that's why isn't pricing it in. And if Biden wins then .....
    • HM
      Harry M. | Real Vision
      8 June 2020 @ 22:22
      Actually Shantanu, I respectfully disagree. While its definitely true that there are real costs around a trade war, there is a bipartisan consensus now that the US has to be tougher to prevent technology transfer. Trump is certainly not a skilled Washington insider, so he has not been able to find the most effective tools (until recently) to guide US industry towards redirecting those supply chains. But the national security wonks are deadly serious in their goal of restricting China from achieving technology parity as far as is possible. That means they have to prevent technology transfer. I do agree, that Trump has no intention of doing anything to hurt stocks ahead of the election. And I agree that Biden's team have made it clear that they don't have any interest in a trade war. However there is really no daylight between the sides on this issue of preventing tech transfer. Still, it wouldn't be the first issue I was wrong about.