Replacing Tech with Soap

Published on
July 31st, 2018
Topic
ETF, Technology, Trading
Duration
10 minutes
Asset class
Equities

Replacing Tech with Soap

Trade Ideas ·
Featuring Max Wolff

Published on: July 31st, 2018 • Duration: 10 minutes • Asset Class: Equities • Topic: ETF, Technology, Trading

Max Wolff, chief economist at the Phoenix Group, discusses his call for a defensive rotation out of tech and into consumer staples. In this interview with Brian Price, Max also highlights an ETF that is poised to benefit from the shifting market trends. Filmed on July 27, 2018.

Comments

  • YB
    Yuriy B.
    31 July 2018 @ 11:47
    Max, I mean it as a high compliment when I say that your thinking reminds me most of Charlie Munger. "Everyone else is trying to be brilliant. We're just trying to stay sane." Thank you for your consistently excellent contributions to Real Vision.
    • KS
      Karen S.
      31 July 2018 @ 12:23
      ^^^^^^^ agree
  • SJ
    Stefan J.
    31 July 2018 @ 12:19
    Everyone on RV is amazing .. But would like to hear about how he managed his previous trade on GM .. Its important how pros manage their portfolios and risk .. before they move on to the next trade .. Well done RV .. look forward to more ..
    • AL
      Andrew L.
      1 August 2018 @ 14:35
      I have requested follow-up content as well and many people seemed to like the idea. The recent Michael Purves trade ideas video did include some coverage of his previous trade which is greatly appreciated. I think even deeper coverage like this is well worth the time.
  • SS
    Steve S.
    31 July 2018 @ 13:08
    Love Brian Price on Trade Ideas. Always asks the questions I want to hear the answer to.
    • BP
      Brian P. | Real Vision
      31 July 2018 @ 20:09
      Thank you, Kulbir! Much appreciated!
  • MM
    Michael M.
    31 July 2018 @ 14:52
    A market correction will take everything down. Why try to hide in stocks that might not go down much when you can just go to cash and wait for better opportunities.
    • MH
      Michael H.
      31 July 2018 @ 18:08
      It's an attempt to maximize expected value. As a simplification, assume two scenarios: market correction, or continuation of the bull market. In either scenario, assume cash pays off zero. In a bullish scenario, assume soap gains 5% and tech gains 10%. In a bearish scenario, assume soap loses 20% and tech loses 50%. Assuming a moderate probability of a correction, say 20%, you maximize the expected value (the sum of the probabilities times the associated payoffs) by buying soap. Going to cash maximizes the expected value only when the probability of a correction becomes very high (or the payoffs in the bullish scenario become very low). Obviously real-world allocation decisions are more complicated, but I believe that's the logic at work.
    • RP
      Reinaldo P.
      31 July 2018 @ 18:35
      Timing is hard plus upside potential yf you still want exposition.
  • JH
    Joseph H.
    31 July 2018 @ 23:54
    Relatively speaking consumer staples may be a haven, but only when compared to tech. 2% top line growth at a 20 PE doesn't inspire me to load up on soap and toothpaste. Still, differing opinions make markets. Good piece.
  • SF
    Simon F.
    1 August 2018 @ 07:18
    So refreshing to see a guy like Max with a grounded grasp of the investment landscape hitched to the ability to deliver his thesis with humour! And, boy do we need a bit more humour nowadays!
  • CD
    Clive D.
    1 August 2018 @ 10:47
    Love his name, love his trade. great work RV
  • AL
    Andrew L.
    1 August 2018 @ 14:45
    Would love more discussion around determining accumulation ranges, stop-loss, and take-profit levels. Remember these videos are more useful as lessons of how to develop a trade thesis and how to structure a trade than as individual trade ideas! Also with a $9 risk and a $2.70 profit it would be good to discuss when and why you would take on such a skewed RR. Thanks again for all the great content!!!
  • FH
    Frank H.
    2 August 2018 @ 00:11
    His political bias is overt condescending and annoying. One can only assume it clouds his investment judgement.

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