“Macro is Back, Baby”

Published on
June 3rd, 2020
Duration
31 minutes


“Macro is Back, Baby”

The Expert View ·
Featuring Teddy Vallee

Published on: June 3rd, 2020 • Duration: 31 minutes

Teddy Vallee, founder and chief investment officer of Pervalle Global, returns to Real Vision to discuss why he believes we are at the precipice of a new dawn for macro investing. He explains the different models he uses to estimate the profound economic deterioration occurring in the U.S., and he explains how this data is shaping his macro outlook. Vallee reveals his long-term view for U.S. equities and explains why he thinks bitcoin is the macro asset class that offers the most opportunity. He also makes the case for gold mining stocks, as well as certain emerging markets equities. Filmed on May 29, 2020.

Comments

Transcript

  • SB
    Sahib B.
    10 June 2020 @ 09:13
    You know why I come to RealVision? To counter trade all the permabears on here. You guys invest in gold, I'm keeping my 50% allocation in equities and laughing my way to the bank. Gold has not outperformed equities in the past 20 years and I doubt it will any time soon. I am bullish on BTC though, the one thing that RealVision is right about.
    • RP
      Ryan P.
      12 June 2020 @ 16:36
      Best of luck
  • IC
    Ibrahim C.
    4 June 2020 @ 03:38
    The first part of his views until 17 mins is very good. However, in the light of very low returns he expects on equities (via passive investing) over long term, the store value of Bitcoin comes in his macro view and prevails on everything. Actually this seems to be an expert view on why (not) to invest in Bitcoin over long term? I do not understand why Realvision is sometimes giving me an impression of sole defender to invest in Bitcoin? What happens when Bitcoin could experience another deep tumble and people would then be very frustrated to put the money there?
    • MG
      Marcus G.
      4 June 2020 @ 09:41
      "What happens when Bitcoin could experience another deep tumble and people would then be very frustrated to put the money there?" - if you are not convinced of bitcoin, dont go for it. - if you have conviction, choose appropriate position size; if you have e.g. 2% in bitcoin, yes, you may well loose 2% of your portfolio (downside) or gain 60% to your portfolio (assuming 30x); it's not black and white. And you dont have to invest in it!
    • IC
      Ibrahim C.
      12 June 2020 @ 07:28
      What makes you to believe in this to defend this investment idea with your whole mind; as if it looks that you would have been paid by someone? I thought this platform is free for anyone to share their ideas. If you do not like my idea, simply press thumps down button rather being rude of your investing view!
  • KM
    Karan M.
    6 June 2020 @ 12:18
    Macro is back? About half the interviews end with - Gold and Bitcoin. Since the idea is to apparently have diverse opinions, should RV try to get folks who have a different view? Seems to be groupthink for almost every interview here to end in buy gold and buy BTC, everything else is screwed
    • PG
      Petter G.
      7 June 2020 @ 07:58
      Yeah, lets get some Robinhood traders on here to see the other side of the argument ;)
  • jR
    james R.
    4 June 2020 @ 00:11
    i’d love to hear a Zoltan interview discussing the state of the Repo rescue.
    • mb
      michael b.
      6 June 2020 @ 15:57
      Zoltan’s employer apparently prevents him from doing most interviews.
  • RP
    Raoul P. | Founder
    3 June 2020 @ 11:28
    All the macro guys end up at Bitcoin... Love Teddy's analysis as ever. Interesting to see him come across too to the Bitcoin camp.
    • CL
      Christopher L.
      3 June 2020 @ 12:58
      Yeah.. that should worry you lol
    • Jv
      Jasper v.
      3 June 2020 @ 15:05
      Christopher, why? You do not get adoption if nobody buys it.
    • RA
      Ryan A.
      4 June 2020 @ 05:16
      bitcoin has no store of value as it is too volatile. It has declined in each downturn. And you can't do anything with it, can you buy anything with bitcoin? I get it, you think I am wrong on one or all of these points. But if any of these become true and it becomes an actual currency, then govts around the world will stop this. We have already seen this in Asia. The technology may have long term value, but not how it currently exists. Where I am wrong? This is like a microcap stock and doesn't get attention. It could very likely get big attention and prices are driven up. But the more investors it gains the more issues there will be in mining (bitcoin can't really scale) and at some point there will be govt intervention. So you have to believe this will go up but there is a limit to that and you have to time that correctly. That seems a bad bet to me, "predicting" it will go up and timing right the upside limitation is really tough.
    • DL
      Dominic L.
      5 June 2020 @ 19:49
      BTC is a kind of litmus test IMO. Not so much of intelligence as the ability to think independently. The equations of BTC to gold remind me of automobiles initially being called "horseless carriages," though. There may be practical psychological reasons for understanding BTC based on a quasi-resemblance to what's come before. But the limitations of that will become clear in coming years. Giddyup ...
  • DL
    Dominic L.
    5 June 2020 @ 19:44
    Great interview - thank you, Teddy Vallee. Would love to see you back on RV.
  • TN
    Tim N.
    3 June 2020 @ 10:06
    So the macro consensus seems to be coalescing around gold, bitcoin, EM, and active funds. Gold still seems to be manipulated. by central banks and Bitcoin ownership is concentrated in the hands of a few whales who scalp retail investors with the Bart Simpson patterns. EM is also subject to the political whims of countries which do not have a robust democracy. Actively managed funds perform unreliably. Does that mean the best option for us retail investors is to hide money under the mattress?
    • AR
      Alexander R.
      3 June 2020 @ 12:47
      Buying gold is not hiding money under the mattress Silver can give even better long return return. And so gold miners but at price of high volatility Agree on bitcoin, seems like an act of desperation, stocks are overvalued, bonds are not atractive any longer, federal reserve killed the "normal " investment game, so need to invent a new one and Bitcoin is perfect for that I do not see it as store of value, it can go up significantly, but it is not store of value as it will go down as fast Also It will be illegal even 1/2 way to the 30x Price, government will not let it happen All central banks buying gold, not bitcoin
    • RD
      Ruediger D.
      3 June 2020 @ 13:19
      I think not. Because as far as Gold is concerned they will not let it explode (as long as they can prevent it of doing so) but must let in move slowly but surely upwards as it's at least kind of backening the amount of deficit spending and widening their balance sheet. And that's why they are still holding on to it (although telling the people that it's just an archaic relict) and other Central Banks are buying it. So, if you are poor and want to get rich take the risk and buy bitcoin. But if you are kind of rich allready and must not get richer by any means just buy gold to keep your wealth over time and sleeping good at night....smile....
    • FF
      Fei F.
      3 June 2020 @ 14:56
      Bitcoin went from 0 to 200B in 10 years, if it were to survive another 10 years, i think the market cap will not be 400B, but rather 2-3T or something. Given that it has been under constant attack and hated world wide by hackers/government/miners and somehow still manage to survive this long, I would think that it has a pretty good chance it eventually proves itself as a form of store of value to most people. Gold currently has market cap of 10T, in 10 years it might go to 30T, and assuming bitcoin is still around then, 2-3T market cap is quite reasonable imo. Lets not forget tech is something that evolves, right now Bitcoin already show potential to become digital gold and SWIFT alternative. Give it another decade and we can see a lot more use cases develop. with 2-3T marketcap, price per coin is 10-15x from now. In a risk/reward sense, I would say its a very good trade
    • SS
      Stephen S.
      3 June 2020 @ 16:30
      We have “robust democracy” in the US. How’s that going? Maybe it’s good EM don’t have it.
    • CM
      Chris M.
      3 June 2020 @ 17:11
      Reflecting back to the Tony Deden interview (and part 2 is worth watching again, newcomers should watch both parts), those of us worried about capital preservation should look at his portfolio, Edelweiss Holdings. As of January, he had 33% in gold and 9% in cash. He likes holding gold as he sees it as a better store of value than cash and just as liquid. He has an interesting perspective on markets that make his video worth watching again. Here is is corporate overview: https://edelweissholdings.com/docs/EH-2020-01-Corporate-Presentation.pdf
    • JM
      John M.
      3 June 2020 @ 17:37
      "they will not let it explode" Who is they....the global community of central banks? Chinese & Russian central banks are going to collude with the Fed to suppress gold, why? Previous price suppression schemes like the London Gold Pool have been ineffective. US government outlawed ownership of gold .... still it went up. Most people don't own any gold (except their jewelry), don't think/care or talk about gold! They care far more about the value of their home. Gold is little used for industrial applications so its price has little impact on the real economy. The irrelevance of gold may be its best quality.
    • TN
      Tim N.
      4 June 2020 @ 06:40
      Also if any government really wanted to destroy bitcoin surely they would have the resources to capture >51% of the hashrate - sure it may cost 10's or 100's of millions but this is chicken feed for a national entity.
    • JB
      Jamie B.
      4 June 2020 @ 08:51
      @Chris M - Thank you for the recommendation to the Anthony Deden interviews. In a world full of numbers that don't mean much and a quick gain, it is so refreshing to listen to a man that flies in the face of modern investing techniques. As he mentions, his investing strategy "is simple, but it's not easy". I really appreciate you bringing my attention to this extraordinarily humble and insightful fellow. I can't wait to watch Part 2.
    • WM
      Will M.
      5 June 2020 @ 16:41
      Chris M, great recommendation for any new comers to this forum. That interview with Grant was superb and in my top 5 on this channel. The difference between the ultimate unassuming, deeply professional and calm Deden is at stark contrast with the likes of Hugh Hendry. Latter may appeal to a younger in your face mind set, but Deden represent "real" and "old" money.
  • ml
    m l.
    5 June 2020 @ 12:53
    Has macro ever left, especially on this channel ?
  • IG
    Ivanaila G.
    5 June 2020 @ 11:06
    At 15:30, a real return chart for equities is shown. Is that the real return over the next 10 years or this is the average real return per year for the next 10 years? Thanks!
    • IG
      Ivanaila G.
      5 June 2020 @ 11:07
      It is per year over the next 10 years! I just checked the transcript.
  • IG
    Ivanaila G.
    5 June 2020 @ 10:58
    At 15:53, a chart is shown of the Wilshire 5000 Market Cap to Household Assets. The left side of the chart shows this ratio I assume. Teddy says that we are currently around 40%. However, looking at the chart, it seems we are at around 20%. Is the left scale inverted by mistake or he messed up with the number? Thanks!
  • MC
    Michael C.
    4 June 2020 @ 10:13
    Enjoyed the talk thanks. Views seems very equilibrium/stochastic model based so please bring Teddy back again for updates as macro environment chages. Trade wars, currency wars, hot wars, proxy wars, FX pegs failing, states failing, civil unrest etc, have a habit of messing with models. And if macro is back then we should expect more crazy. Everyday seems like Wacky Wednesday.
  • RC
    Rob C.
    3 June 2020 @ 15:30
    Kind of a sad story really, but one that has a ring of truth to it. The monetary systems of the world have run their course and your best options are stores of value from an investment perspective. Entrepreneurship has never been that attractive to me but with how risky the entire landscape has become I am now thinking, why notÉ
    • AI
      Andras I.
      4 June 2020 @ 08:31
      I for one share your feelings. Sitting on decades of experience in my original field (with no real competition in my location) makes me think that human capital is better to be leveraged rather than chasing diminishing returns on investment research. As for macro: we shall see. I'm detecting quite a bit of herd behavior to be honest (and I try to diversify my sources as much as possible).
  • BB
    Ben B.
    4 June 2020 @ 04:55
    Diesel fuel consumption does not make up a third of mining cost.
  • DG
    Dave G.
    4 June 2020 @ 02:53
    Good interview and excellent straight forward information without the usual vagueness that accompany a lot of these videos. Thanks Ted.
  • AM
    Alastair M.
    3 June 2020 @ 08:33
    Little new insight here.
    • RF
      Russell F.
      3 June 2020 @ 09:53
      Do you have a crypto portfolio?
    • PB
      Phillip B.
      3 June 2020 @ 22:10
      I haven't watched it yet. That said, even if "little new insight," the takeaway then is to help gel the consensus of the play.
  • mB
    marc B.
    3 June 2020 @ 21:31
    I agree with his outlook. Us markets are wild right now.
  • AV
    Alvin V.
    3 June 2020 @ 21:29
    Good outline of road map. I'll love to hear some of the parts in greater detail but this bull run needs to run it's course. Having said that, I'll love to hear an interview on some of the methods and techniques of short-selling. So far, shortsellers have been more narrative rather than methodical in their discussions and I can find very little "lessons" on the process and timing. Thanks again for the great lineup of experts.
  • GC
    George C.
    3 June 2020 @ 17:35
    "Macro is coming back." I've heard this every year for quite a while. I'm not even sure what it means at this point.
  • ea
    edwin a.
    3 June 2020 @ 16:53
    a lot of insight and detail, but unfortunately his verbal style was a bit choppy and the mic didn't help, making it unnecessarily hard to follow good content. i'll look forward to hearing more about EM, particularly ex-China, maybe later in the year as his insights get clear.
  • ca
    charles a.
    3 June 2020 @ 16:28
    Excellent summation of where the macro landscape is heading. Teddy has the info we need and can back it up with the data. I appreciate him coming on Real Vision to present his perspective. If I may offer some constructive criticism, It would help if he could slow down his presentation. I felt a bit like I was trying to take a drink of water off of a fire hydrant. If he's not open to that criticism, that's fine also. I look forward to seeing more of him here on RV. He's an excellent resource for delivering actionable advice.
  • TM
    Trent M.
    3 June 2020 @ 15:14
    Can you have Kathy Derbes on again to talk about what is going on in the gold market?
  • RF
    Russell F.
    3 June 2020 @ 10:14
    IoTeX for the win. Most under valued project in the crypto space. Future is bright for crypto in general
    • pw
      paul w.
      3 June 2020 @ 12:55
      Was IoTeX mentioned in the interview as I missed it?
  • CL
    Christopher L.
    3 June 2020 @ 12:51
    Bro did you just wake up?
  • VB
    Vincent B.
    3 June 2020 @ 11:30
    Good, sober summary of where asset classes are likely to go in the next 10 years - necessary in these times.
  • HS
    Hugh S.
    3 June 2020 @ 07:52
    Was not expecting to hear Bitcoin from this interview... Makes sense though.