Insider talks – October 2017

Published on
October 7th, 2017
Duration
35 minutes

Insider talks – October 2017

Featuring Raoul Pal, Julian Brigden

Published on: October 7th, 2017 • Duration: 35 minutes

Raoul and Julian look under the hood of their investment frameworks and highlight how they develop an investment thesis. They go into detail on some of the themes and trades they have been writing about and share their thoughts on interesting positions on the watchlist. Filmed on 3 October.

Comments

  • KA
    Kelly A.
    8 October 2017 @ 15:25
    Love the addition of Adam. Great chemistry with all 3 of you. Thanks.
    • WM
      Will M.
      22 October 2017 @ 15:49
      Yes. Adam good intro to the team! Just watch those ehhs and umms.
  • EC
    Edward C.
    21 October 2017 @ 13:02
    Raoul really summed it up with US equities being the only game in town there despite the valuations. Although I unfortunately agree with him, I just can't get involved in US equities at these nosebleed valuations. Be interesting to see if the FED balance sheet unwind does indeed accelerate next year as Julian mentioned based on who is head of the FED.....that'll be the S&P a punch in the face!
  • RM
    R M.
    7 October 2017 @ 23:14
    Excellent questions generated a meaty and worthwhile discussion. I am fully on board with the goals you both outlined, for me this is a tutorial on the process first, a trade discussion second. Would have enjoyed a longer conversation, for example buying gold in other currencies when one is trading a dollar based market....what the best way to do that? Raoul has stated in the past that his idea is both the dollar and gold in dollars will rise, but to accumulate in yen terms for instance may be the best trade, which I have no clue how to properly structure....
    • GM
      Gerald M.
      8 October 2017 @ 04:12
      Buy 10K USD of GLD and then sell $10K USD of yen in the FX market. You are now, in equal USD amounts, long gold and short yen (owning gold in yen). Make sure you check the direction of the JPYUSD trade or you'll end up with the wrong trade. Recheck what I just said for that matter... :-)
    • BB
      Brent B.
      11 October 2017 @ 00:46
      IMHO, I am not a fan of GLD......I prefer to use a physically backed ETF like Sprott's PHYS. Full disclosure, I own PSLV (Sprott's silver ETF) and may have a small PHYS position. Not an advert here, just think there is a possibility that the GLD has an inherent weakness relative to the physically backed ETF's that should be taken into account.
    • RM
      R M.
      11 October 2017 @ 14:40
      Thank you both for the comments, appreciated.....
  • GL
    G L.
    11 October 2017 @ 10:28
    I continue to enjoy these videos, with the Q&A format and the evolution in thought process. A lot of great themes and content covered. Thanks.
  • GM
    Gerald M.
    7 October 2017 @ 14:30
    Hi Julian, Playing on your inflation theme, is there a commodity fund that you find interesting? There are a wide variety of structures in commodity funds so it can be a challenge finding the right one. On the other hand, they don't move around too much now since many have been building a base so risk seems reasonable. Given your views on inflation and Raoul's view on oil, I would think that an ex-energy commodity fund would have an acceptable tailwind. Thoughts? -Gerald
    • DR
      David R.
      7 October 2017 @ 16:56
      Have you looked at DBB (base metals)?
    • GM
      Gerald M.
      8 October 2017 @ 04:00
      Hi David, I've looked at all the DB commodity funds as well as others. It's not obvious if all commodities go up together or if my focus should be on ags, PMs, base metals, etc. There are also commodity currencies but that gets difficult if the USD also strengthens (which would clobber commodities and associated currencies).
    • DR
      David R.
      10 October 2017 @ 14:36
      Ags are defintiely cheap here. But have been for a while. You could even create your own bundle of high quality ag focused stocks and get cheap exposure that way. (I say this because I prefer equal weight to market cap; and I prefer companies with low debt to FCF, esp if it is at the bottom of the cycle. You can even get ideas for the best players by looking under the hood of Ag oriented ETFs.)
    • DR
      David R.
      10 October 2017 @ 14:39
      You could also look into long dated future option spreads on a bundle of ag commodities. But I can make no promises about liquidity.
  • DW
    Daniel W.
    10 October 2017 @ 08:46
    Hey Julien, is your trigger for shorting European Bonds still the rise above 0.6 in Bunds? If not, will we get an update when you think the time is right? Thanks
  • BA
    Bob A.
    9 October 2017 @ 00:14
    Without using futures, and hopefully using options, I am looking for a way to invest when the time comes for European negative rates to move higher. This will be an explosive opportunity, but unclear how to participate as a U.S. investor . If there is no investment vehicle with one-to-one correlation that is okay, anything close will do. Thanks and I continue to enjoy your co,comments.
    • TC
      Tom C.
      9 October 2017 @ 19:43
      Can you do options on futures? The bund on Interactive Brokers is GBL (schatz is GBS) and they both fairly liquid options markets. Otherwise, search for bund ETFs, looks to be a few on IB. Not sure if there are options on these though
  • TK
    Thomas K.
    9 October 2017 @ 19:10
    Julian, it sounds like for 2018 you're bullish Euro due to ECB being forced to tighten but also USD once there are tax cuts, repatriation, dollar supply shortage, etc. so, on this basis, both might be good longs against JPY for example. However, how do you see them playing out against each other in 2018, i.e do you see EUR/USD heading back above 1.20 in 2018 despite USD strength against other currencies? Re EM currencies and Monsoon ETFs: While it was good to hear Raoul flesh out his Monsoon thesis a bit by suggesting trades in ETFs in one's own home currency this doesn't really address the outlook for the Monsoon currency in question. How for example do you evaluate the risk to a USD ETF for a Monsoon country if USD is strengthening while the EM currency is also weakening? I'd hate to be right on a call on a particular EM equity market only to lose money on the home currency ETF due to persistent EM currency weakness. Some more insight into your process on evaluating EM currency risk would be welcome...
  • SB
    Sergei B.
    9 October 2017 @ 18:23
    Apropos the survey, I appreciate the format of the Macro Insiders as it allows for the development of a thesis, continuous incorporation of new information, re-weighing the risks and rewards of any particular trade .. perfect for someone like me with a several-month to years investment horizon. Julian and Raoul pull out what is really important out of the buzzing and booming chaos of ambient information and with those insights I can take and monitor positions with confidence.
  • SB
    S. B.
    9 October 2017 @ 14:55
    First EUR to 1.15, then higher again next year 1.20-125? Then USD bull market after that (but when?)
  • SD
    S D.
    8 October 2017 @ 14:19
    Is there some way to get a transcript or am I just not seeing it somewhere?
    • BT
      Bryan T.
      9 October 2017 @ 14:33
      I've asked the same question previously Sarah and was told they are considering it. I believe it adds value significantly for several reasons. I can read at times and in places where otherwise I can't easily watch a video. I am not always sure I heard the speaker correctly...a transcript eliminates that issue. If I want to review a comment or section of the talk I can scan a transcript and find it quickly without rewinding and fast forwarding around on the video broadcast to try and find it...etc. I remain hopeful that they will add that feature soon.
  • AF
    Andrew F.
    9 October 2017 @ 10:35
    Thanks for a nice update and other insights. It always helps to clear the fog for my better understanding. Always enjoy your interactions.
  • DP
    Devraj P.
    8 October 2017 @ 05:37
    RP, On India Equity Investment opportunities would you be able to recommend/share few individual stocks/ETF?
  • RM
    Russell M.
    8 October 2017 @ 04:13
    good job. i feel like we don’t know adam. perhaps a brief bio of the questioner can add color to his questioning. thanks.
  • KC
    Ken C.
    7 October 2017 @ 20:06
    Julian and Raoul, I think for most of us going forward in these uncharted times portfolio construction is the most important challenge we have.  Typically near the end of a business cycle one adjusts their portfolio with a bigger percentage in fix income to equities.  With interest rates so low, is that still the thing to do?  I agree with Julian that equities and bond prices could both decline at the same time but will this be short lived and in the end bonds still provide a good hedge for equities?  Do you have any suggestion how we should construct our portfolios looking out the next 12 months? KC
  • GA
    Guy A.
    7 October 2017 @ 15:52
    Good review of themes. Julian, I would really appreciate a heads up and some trade suggestions when you see the timing right to pull the trigger on the short european fixed income theme. I am watching BNDX and IHY as shorting opportunities. Unfortunately, options in these two are very thin and neither is a pure play on Europe, but I don't have an account that gives me access to a Bund option. Thank you.
  • JV
    Jason V.
    7 October 2017 @ 10:48
    Excellent, guys. The expanded insight into the thought processes underlying trades going forward is much appreciated. This clarity supports conviction. Feels like some good opportunities are just around the corner. Great to have Adam on board as well, I think he really added value to the discussion. The product is building very nicely.