Forward Guidance

Latest Episodes:

Adrian Helfert on Stock/Bond Allocation, Equity Broadening, and Credit Market Richness Feb 27, 2024

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Adrian Helfert, chief investment officer of Westwood Holdings Group (AUM ~$16B), joins Forward Guidance to share his quantitative approach to asset allocation. He explains why, even with the drastic surge in interest rates, he prefers an overweight allocation to equities over bonds. Filmed on February 21, 2024.

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:54) Stocks Vs. Bonds

(05:19) Upside Downside Capture On Bonds

(08:24) Overweight Stocks Over Bonds

(21:44) VanEck Ad

(22:29) Stock Market Valuations

(30:51) Return Attribution In Equity Portfolio

(37:26) Breadth In Stock Market

(45:00) Notion of "Equity Duration" Is Mostly Just A Narrative

(49:11) Comparisons To Dot Com Bubble

(53:40) Bond Market Outlook on Credit & Duration Risk

(55:55) The Fed And The Wealth Effect As The "Third Leg Of The Monetary Policy Stool"

(57:01) Are Financial Conditions Tight Or Loose?

(01:01:52) Investing With An Income Focus

Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

Overheated Stock Market To Correct Before Continuing Rally | Le Shrub on Le Shrub on AI, CRE, and China Feb 26, 2024

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Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more.VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:33) Shrub's Background In Shorting Credit During Great Financial Crisis

(05:28) Short Credit Spreads Trade

(08:43) Commercial Real Estate (CRE)

(12:14) The Challenges of Shorting An Index

(15:26) Have We Seen "Max Stupid" Yet?

(23:58) VanEck Ad

(21:08) Shrub's Short-Term Call That Stocks Will Correct Mildly

(25:33) Why Shrub Thinks Stocks End Up On the Year

(28:51) This Is Not 2000, This Is Not 2021, Argues Shrub

(34:25) Shrub's Investing Approach: Value, Thematic, Coal, and Digimarc

(40:40) Tesla and Google

(51:02) Treasury Secretary Yellen Tamagotchi

(52:12) Two Types of Inflation: Wealthflation and Plebflation

(55:44) How Much Does Market Plumbing Matter?

(01:01:29) Is U.S. Treasury Sterilizing QT?

(01:07:05) Economic Outlook in U.S. And Europe

(01:09:42) How Systemic Are Commercial Real Estate (CRE) Issues?

(01:14:48) Banking & CLO Systems

(01:17:57) Views on Fed's Interest Rate Policy

Real Estate Crisis Hits Two German Banks | Josef Pschorn on Deutsche Pfandbriefbank and Aareal Bank Feb 23, 2024

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Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more.

VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:15) Background in Relative Value Credit

(02:25) Potential Trouble At Deutsche Pfandbrief Bank

(15:03) VanEck Ad

(15:45) Liability Structure of Deutsche Pfandbriefbank

(18:42) The Pfandbrief Market (Different Than Bank Known As "Deutsche Pfandbrief" AKA "PBB")

(21:56) Negative Marginal Net Interest Margin Is A Big Problem

(23:54) Why Josef Does Not Have A Trade On PBB - Insufficient Liquidity In Options Market

(25:23) Bail-in-ability of AT1 Debt

(29:59) How This Might Play Out

(32:47) Comparison To Greek And Spanish Banks

(35:06) Silver Lining: Long-Term Nature of Many of PBB's Liabilities

(40:21) Deposit Insurance In Germany & Europe

(43:05) How PBB Might (Possibly) Overcome The Challenges It Faces?

Swiss Re’s Patrick Saner on Soft Landing Scenario, Central Bank Balance Sheet Policy, and Inflation Volatility Feb 22, 2024

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Patrick Saner, Head of Macro Strategy at Swiss Re, joins Forward Guidance to share his insights on the global economy, interest rates, and central bank policy. Filmed on February 16, 2024.

Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more.

VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:40) U.S. Economy Appears Resilient

(03:16) Financial Conditions And Neutral Rate

(08:)54 Central Bank Balance Sheet Policy (QE & QT)

(13:32) The Reaction Function Of The European Central Bank (ECB) Has Changed

(17:44) VanEck Ad

(18:28) Interpreting Ongoing Yield Curve Inversion

(20:24) Patrick's Work At Swiss Re

(23:24) Inflation Volatility

(33:47) Currencies

(35:46) European Economy

(38:32) Two Consecutive Quarters Of No Growth Does Not Necessarily Indicate A Recession

(40:55) Most Common Error In Macro: Mistaking Correlation For Causation

(43:16) Soft Landing Is Patrick's Base Case

(45:49) Patrick's Prior Work At Swiss National Bank

Paul Sankey: Oil Would Be Below $60 If It Weren’t For Saudi Production Cuts Feb 21, 2024

Show notes

Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more. VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

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Paul Sankey research: https://sankeyresearch.com/

Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:55) Oil Market At "Equilibrium" Right Now

(08:51) “If It Wasn't For Saudi Production Cuts, Oil Would Be Below 60 Dollars, I'm Sure Of It”

(13:03) U.S. Oil Production Has Exploded

(18:25) VanEck ad

(19:07) The Mergers & Acquisitions (M&A) Cycle Has Begun In Oil (Diamondback-Endeavor Deal)

(25:40) Importance Of Inventory Quality (And Quantity)

(29:00) Management Issues

(32:38) Buybacks and Dividends

(35:50) Oil Companies With Strongest (And Weakest) Inventories

(38:07) Merger Arb In Deals That Haven't Closed

(44:43) How AI Will Impact Power Demand

(50:55) About Sankey Research

Secrets of Small Cap Value Investing | Kyle Mowery Feb 19, 2024

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Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more.

VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

Follow VanEck on Twitter https://twitter.com/vaneck_us

Follow Jack Farley on Twitter https://twitter.com/JackFarley96

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:57) The Small Cap Value Universe

(06:58) Why Did The Value Factor Used To Work, And Why Isn't It Working Now?

(11:27) How To Find Great Small Cap Value Stocks

(14:45) Finding Asymmetric Opportunities

(16:18) VanEck Ad

(17:51) Ferroglobe PLC

(20:50) ACV Auctions

(24:52) I Despise Price / Sales Ratio

(27:38) What Makes Some Investments Work, And Others Not Work?

(31:17) Look At Managements' Incentives

(40:54) Banking Stocks

(43:06) Last Time Small Cap Value Stocks Were "All The Rage": Early 2000s

(45:17) Has The Rise Of Passive Flows Distorted The Small Cap World?

(51:13) Markets Are "Broadly Efficient": Some Value Stocks Are Cheap For A Reason

(53:06) How to Avoid "Value Traps"

(58:42) How To Generate Short Ideas

(01:07:00) The Role of Macro

(01:08:37) U.S. Economy Is "Pretty Strong," European Economy Is "In Shambles"

(01:10:51) Calumet Specialty Products

(01:13:33) Inflation Reduction Act (IRA)

The Rising Risks In The Private Credit Lending Bonanza | Andrzej Skiba Feb 16, 2024

Show notes

Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more. VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

Follow VanEck on Twitter https://twitter.com/vaneck_us

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Follow Blockworks on Twitter https://twitter.com/Blockworks_

Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:50) What Is Private Credit?

(07:51) Private Credit Is Doing The Riskiest Deals In Leveraged Finance

(16:04) How Will Private Credit Perform If Defaults Pick-Up? (Very Little Data In Previous Cycles Because The Asset Class Has Grown So Much)

(19:24) Private Credit Is Very Illiquid

(20:54) Debt Covenants In Private Credit Are, Admittedly, Usually Very Strong

(26:31) VanEck Ad

(27:14) Interplay Between Private Credit and Rest of Fixed Income Universe

(32:35) Private Equity Is Using Private Credit To Pay Itself Via Dividend Recaps

(35:13) Private Credit Is Refinancing Some Of The Riskiest Deals In Leveraged Loan Market, Which Perhaps May Be Bullish For Leveraged Loan (& High-Yield Bond) Market

(38:00) Default Outlook In High-Yield Bond And Leveraged Loan Market

(43:09) Moderately Bullish View On Duration (I.e. Rates)

(58:43) Maturity Wall High-Yield Bond Is Very, Very Termed Out

(01:02:56) Opportunities In Securitized Products Market Appear Interesting

(01:04:57) Single Borrower Commercial Real Estate Loan Market Offers Interesting Opportunities To Fundamental Credit Investors

(01:07:48) Most Common Investing Mistake In Credit: Herd Mentality

Danny Dayan: Reacceleration Risk Threatens Bond Market, Demographics In U.S. Are Inflationary (Not Deflationary) Feb 13, 2024

Show notes

Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more. VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(00:29) Recession Is An Overrated Risk

(04:33) The Right-Tail Risk: Reaccelerating Inflation

(16:18) Will Stocks Continue to Outperform Bonds If Inflation Reaccelerates?

(21:25) VanEck Ad

(22:13) What Is The Neutral Rate Of Interest?

(29:22) Why Are Financial Conditions So Loose?

(44:59) "If Economy Stays Hot, I Think There Will Be Zero Rate Cuts This Year"

(47:22) Demographics Is Wildly Misunderstood

(01:01:20) China

(01:04:39) Duration Bubble of 2020 & 2021 Means Losses From Higher Rates Are Borne Not By Borrowers But By Lenders

(01:06:19) Danny's Bull Case For The Dollar

Martin Pelletier & Joseph Wang on Stock Market Concentration, Cash-Futures Treasury Basis Trade, Structured Products, and New York Community Bank Feb 13, 2024

Show notes

Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more. VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

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Follow Joseph Wang on Twitter https://twitter.com/FedGuy12

Joseph’s latest on Cash-Futures Basis Trade: https://fedguy.com/levering-up/

Joseph’s latest on CBO: https://fedguy.com/sea-change/

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps:

(00:00) Introduction

(10:25) VanEck Ad

(11:10) New York Community Bank $NYCB

(15:34) The Canadian Banking System

(22:05) Is Tech Forming A Stock Market Bubble?

(33:15) Cash-Futures Basis Trade In Treasury Market

(39:41) The Rise of Structured Products In Canada

(56:40) Energy Market

(01:03:00) Joseph's Views On Powell's 60 Minutes Interview

(01:07:40) Bank of Canada Could Cut Interest Rates By More Than The Fed Does In 2024

China’s Deflation Trap | Brian McCarthy On The Popping Of The World’s Biggest Bubble Ever Feb 09, 2024

Show notes

Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more. VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-london

Timestamps;

(00:00) Introduction

(00:35) The Chinese Financial System Is A Giant Ponzi Scheme

(05:17) The Property Bubble In China Is Popping (It's Still In Early Stages)

(11:21) How The Chinese Banking System Works: Window Guidance > Forward Guidance

(27:02) VanEck Ad