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Latest Episodes:

UTRN: The Short-Term Reversal Effect On Steroids Jul 01, 2020

Show notes

"Short-term reversals" are the market phenomenon that stocks with particularly bad one-week or month returns are likely to generate outsized returns in the following week or month. But while this stock market anomaly has been known for decades, the high-frequency trading and tax consequences of executing this strategy have made it difficult for investors to profit from. Housing a short-term reversal strategy in an the ETF wrapper has finally made the short-term reversal strategy efficient from both a tax and trading standpoint for regular investors. Vesper Capital Management's John Thompson joins Let's Talk ETFs and walks listeners through how the strategy underlying his firm's UTRN ETF has led to massive outperformance since the March 23 lows.
Show Notes
3:30 - What is the market anomaly known as the "short-term reversal"?
6:00 - Understanding investor behavior: People overreact more to the downside than the upside
12:00 - Introducing the Chow Ratio
15:00 - Even within an ETF wrapper, how tax efficient is this strategy?
18:00 - Is it a characteristic of the fund to underperform during bull markets?
23:45 - How does the Chow Ratio signal which stocks to buy and which ones to avoid?
30:00 - What names have been driving the performance over the last 3 months?
34:15 - Do you see UTRN as a core portfolio holding?
36:15 - Does combining this strategy with a momentum strategy lead to even better risk adjusted returns?
41:00 - Any plans to roll out similar strategies for different asset classes?
43:30 - What's your outlook for a V-shaped recovery? Will the market be higher or lower at year end?
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Aftermath Of An Epidemic: Does China Belong In Ethical Portfolios? Jun 24, 2020

Show notes

China is increasingly under the magnifying glass for its role in spreading misinformation about COVID-19 - or at the very least failing to properly warn the global community in advance. With COVID-19 continuing to wreak havoc on the global economy, an increasing number of voices in the investment community are questioning their allocations to Chinese equities. Perhaps chief among them is Life + Liberty Indexes founder and 2019 ETF.com award winner for Best New International/Global Equity ETF (FRDM), Perth Tolle. Perth rejoins Let's Talk ETFs to make the case for why countries that lack a commitment to basic human rights and civil liberties don't belong in ethically constructed portfolios.
Show Notes:
4:00 - The growing bi-partisan consensus on China
5:00 - Issues with Zoom (ZM) blocking Chinese dissidents: Ideas for a future index?
7:30 - Methodology of indexing freedom: Who is in, who is out
10:45 - FRDM's top holdings, method of selection, approach to weightings
13:15 - How many actually died from COVID-19 in Wuhan?
20:00 - Was China hiding information about the early stages of the outbreak?
26:00 - How much misinformation is being put out by the Chinese government and how much do the Chinese people believe it?
35:00 - The case of Luckin Coffee (LK): How much of a concern is corporate fraud with Chinese companies?
47:30 - The best of the Freedom 100: Polish gaming company (OTGLF)
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Betting On Innovation: How Much Longer Can The QQQ Continue To Outperform? Jun 17, 2020

Show notes

With QQQ recently passing the $100B in AUM mark, the world's second most traded ETF is showing no signs of letting up. The past decade has been especially good to the Nasdaq 100 index and the only U.S.-listed ETF that tracks it, outperforming the S&P 500 (and SPY) by an incredible 225%. Market history suggests we're due for some serious mean reversion sooner rather than later, right?
Ryan McCormack, QQQ Equity Product Strategist at Invesco, joins Let's Talk ETFs to make the case for why the next decade can be just as profitable for QQQ bulls as the last one.
Show Notes
2:30 - When did Ryan's love affair with ETFs begin?
5:30 - A strange index: How is the Invesco QQQ ETF (QQQ) and the NASDAQ 100 index underlying it constructed and maintained?
10:00 - What do you attribute the QQQ's unbelievable outperformance over the last decade vs. funds like (SPY) and (DIA) to?
16:00 - Further dominance of big tech: Effects of COVID-19 on early stage start-ups
18:15 - How can QQQ be considered a "growth index" with so many dividend growth companies in its top holdings, including Apple (AAPL) Microsoft (MSFT) and Intel (INTC)?
24:00 - Getting ahead of itself? What is current fair value for QQQ?
27:30 - More than 50% tech: Is QQQ diversified enough to be a core portfolio holding for investors?
32:15 - Holdings powering the index that might surprise people (SBUX), (TSLA) and more
36:00 - Outlook for US/Global economy: Can markets continue their march higher?
40:00 - Are continued low rates central to the bullish case for equities?
42:00 - Why is QQQ poised to continue outperforming the broader market in the coming decade?
43:45 - What are major risks to QQQ's continued outperformance?
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Successful Portfolio Strategy Is As Much An Art As A Science Jun 10, 2020

Show notes

After 20 years working exclusively with institutional clients and trading virtually every asset class imaginable, James Kostohryz is determined to share his recipe for success with retail investors. Combining fundamental and technical analysis in surprising ways, James remains bearish on the outlook for stocks - while acknowledging that current momentum dictates a more balanced approach in the shorter-term. He joins Let's Talk ETFs to explain the fundamental, technical and behavioral edge he attempts to give members of his investing service, Successful Portfolio Strategy.
Show Notes
3:00 - After two decades working exclusively with institutions, why did James decide to create an investing service for retail investors?
7:30 - Is there a difference in temperament with institutional vs retail investors?
10:45 - Given the severity of the global economic contraction resulting from COVID-19, how do you make sense of recent extremely bullish market activity?
22:00 - What are investors getting wrong when they say this is a "don't fight the Fed" situation?
42:00 - How do you use the interplay between fundamental and technical analysis to make better investing decisions?
49:30 - How do you determine positions in your portfolios?
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Diversifying Away From China: The Long Case For Vietnam (VNM) Jun 02, 2020

Show notes

With the U.S.-China trade war showing no sign of abating and ongoing COVID-19 imposed shutdowns, the need to diversify global supply chains has never been more acute. WingCapital Investments' Vincent Yip believes Vietnam is the best positioned of the world's emerging economies to be the beneficiary of the inevitable move away from China. Vincent is playing his thesis via the VanEck Vectors Vietnam ETF (VNM). He joins Let's Talk ETFs to walk listeners through the long case for the world's 15th most populous country.
Show Notes
3:00 - A continuing look at the on-the-ground economic situation resulting from COVID-19: Tokyo, Japan
8:30 - Why have Vietnamese equities performed so poorly given the continued strength of the Vietnamese economy?
13:00 - A stronger Vietnamese dong should lift the country's stocks
16:00 - Countries that have gone from net importers to net exporters: The cases of Malaysia and Thailand
22:00 - As supply chains diversify away from China, Vietnam is poised to benefit
25:00 - Beyond Apple: Other multinationals establishing footholds in Vietnam
27:00 - Going under the hood of VNM's top holdings
32:45 - Is VNM's 25% allocation to real estate a good or a bad thing?
35:30 - Is Vietnam's financial sector up to the task of powering its continued growth?
37:00 - Understanding the time horizon for the long case for Vietnam and VNM
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The Great Inflation/Deflation Debate: What's An ETF Investor To Do? May 21, 2020

Show notes

With the Fed's balance sheet expanding at an unprecedented rate, inflation concerns have made a comeback among some market watchers on both Wall Street and Main Street. While the monetary supply has increased drastically since the onset of the COVID-19 induced economic crisis, the velocity of money has actually fallen during this period. So what will prevail once the pandemic dust settles - a deflationary or inflationary environment? And how should ETF investors be positioning in the meantime?
Macro specialist Eric Basmajian (EPB Macro Research) rejoins Let's Talk ETFs and delivers a master class in current monetary policy dynamics - and how investors can stay one step ahead of the curve.
Show Notes
4:30 - Eric's personal COVID-19 story
8:00 - Stock vs. Bonds (SHY): A tale of two markets - Which is right?
13:30 - The current environment is a deflationary one - here's why
21:30 - Is the US just a generation behind Japan and Europe when it comes to monetary policy and its likely affect on underlying growth?
29:30 - Productive vs. Unproductive debt: Prospects for future growth (KRE) (XLF)
39:30 - What is the theoretical case for inflation once the dust from COVID-19 settles in a few years?
45:15 - What would be the likely outcome if an emerging economy's central bank followed the same playbook as the Fed?
48:00 - Positioning portfolios in the current environment (SPY), (PDBC), (TLT), (IEI), (SHV), (VXUS)
1:00:00 - Would you consider a short position in something like (XLE) or (XOP) given the potential economic downside that still exists in the energy sector?
1:08:30 - Are you currently over- or under-weight gold? (GLD)
1:14:45 - How about gold miners? (GDX)
1:17:00 - How do you make sense of the extreme bullish stock market action of the last month or so? (QQQ) (DIA) (IVV) (VOO)
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Days Of Future Passed: Where's The ETF Space Headed? May 14, 2020

Show notes

As the exchange-traded fund space continues to mature, it's important to occasionally take a look back and understand ETFs' early origins. As with all great innovations, ETFs continue to evolve in ways that deliver investors increased efficiency and access - and also with potential new risks for the uninitiated. Education remains the key to reaping the many potential benefits the world's fastest growing investment vehicle offers investors. Procure Holdings and ProcureAM ETFs President and long-time ETF industry veteran Robert Tull - who helped coin the term "ETF" - joins Let's Talk ETFs to discuss the past, present and future of this space.
Show Notes
2:00 - The early history of ETFs and Bob's role in it - including coming up with the "exchange-traded funds" moniker
9:30 - Why were most of the initial ETFs (SPY) (QQQ) "40s act" Trusts as opposed to the current preference to launch nearly all ETFs as open-ended investment funds?
12:30 - In an environment like the current one, how can ETF investors avoid the impulse to trade emotionally based on the news of the day?
19:15 - Bob's latest enterprise: Difference between Procure Holdings and Procure AM; The Procure Space ETF (UFO)
22:30 - How does your active, non-transparent ETF model compare to other non-transparent models?
27:00 - Why does the world need additional non-transparent actively managed products now? Is this actually good for investors?
32:15 - Smart Beta everywhere: Bob's take on the proliferation of these products
36:30 - Days of future passed: Where's the ETF space headed?
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Protecting Your Portfolio From Black Swans: COVID-19 Edition (SWAN) May 07, 2020

Show notes

Amplify ETFs founder Christian Magoon joins Let's Talk ETFs to discuss the Amplify BlackSwan Growth & Treasury Core ETF (SWAN) - particularly the unique way in which it attempts to deliver upside while mitigating losses. SWAN has very much resonated with investors, recently crossed the $250M mark in AUM, crushing the S&P 500 along the way (+13%).
Show Notes
4:00 - The economic situation on the ground in Colorado: Christian's personal perspective
10:00 - COVID-19 vs. other "Black Swan" events
12:30 - Christian's base case for global markets before COVID-19 took center stage
16:00 - Does the recent rally mean the market is out of the woods?
25:30 - Will short duration treasuries actually go negative in the U.S., along the lines of the German Bund?
30:35 - How does SWAN attempt to mitigate the effects of the market conditions we've seen since February without abandoning upside?
42:00 - It's all about returns: SWAN vs. S&P 500 ETFs (SPY) (VOO) (IVV)
52:00 - A retail world gone fully digital? Discussion of the Amplify Online Retail ETF (IBUY)
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HDGE: A Better Way To Short The Market? Apr 30, 2020

Show notes

The extreme bullish market action of the last month has left an increasing number of investors feeling a disconnect between a worsening macro-economic picture and lofty equity prices. Using inverse or leveredged ETFs to short the market for more than very short periods of time presents a major potential risk in the form of compounding via daily resets. The AdvisorShares Ranger Equity Bear ETF (HDGE) holds an actual portfolio of actively managed short positions meaning bears don't need to worry about compounding losses over longer-term holding periods. Two of the funds managers, Brad Lamensdorf and David Tice, join Let's Talk ETFs to discuss their outlook for markets and delve into their investing process, including specific names they're particularly bearish on.
Show Notes
3:00 - How do you explain the extremely bullish market action of the last month, since the March 23 low?
5:15 - Once COVID-19 is resolved, will the economy and market snap back?
8:30 - Who's debt buying right now?
12:30 - What do you say to the "don't fight the fed" argument?
14:15 - Dynamics of inverse ETFs and how they differ in fundamental ways from HDGE?
19:15 - Having to disclose your positions daily, is "front-running" a serious concern with HDGE?
25:00 - Process for selecting or excluding short candidates (ZM) (CACC)
31:15 - Why do you not have more currently allocated to energy sector shorts?
33:30 - Why are you short so many financials at present?
38:00 - How do you determine position sizes?
39:30 - Names you're currently particularly bearish on: (CIT), (CACC), (SYF), (ABS), (W), (SC)
45:45 - Predictions for the closing price on the S&P 500 on December, 31, 2020
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The Income Factory: An Approach To Safe And Steady Income Via CEFs And ETFs Apr 23, 2020

Show notes

Steven Bavaria is somewhat of an outlier in that he had his investing epiphany only after retiring from a long career in the financial services space. Following a five decade career at top financial institutions - he worked at the Bank of Boston, where he handled international credit workouts and at Standard & Poor's, where he introduced ratings to the leveraged loan market - Steven started reading articles on Seeking Alpha in the site's early days.
Enamored with Seeking Alpha's growing dividend growth community, he painstakingly developed his own unique set of DGI strategies, resulting in what he terms The Income Factory. "The Income Factory is as much an attitude towards investing as it is a strategy," Steven explains early in our conversation. "Ford builds a factory to produce automobiles. No one at the company thinks about what the factory's resale value is the day after it's built... they think about how they can make it more productive year after year." This is the same attitude Steven recommends income investors take with their portfolios.
Steven took his more than 10 years of refining his approach to investing, including more than 100 articles he submitted to Seeking Alpha, and distilled it into a book-length treatment of the subject. The Income Factory: An Investor’s Guide to Consistent Lifetime Returns was the #1 new release in Amazon's Investment category when it came out in March. Steven favors CEFs as well as some ETFs in his own portfolios. He was generous enough to discuss the book and his reaction to the Covid-19 market panic on the latest episode of Let's Talk ETFs.
Show Notes
3:30 - Steven's initial approach to investing and how it has changed over time
9:30 - The Income Factory approach to investing explained
15:00 - How does the Income Factory approach help investors overcome counterproductive behavioral investing tendencies?
19:15 - What are some other advantages of the strategy?
23:45 - Using the demise of Washington Mutual as an example, how do you create a portfolio to withstand the loss of one or two solid stocks?
30:45 - One of Steven's favorite ETFs: The Amplify High Yield ETF (YYY)
36:00 - Some of Steven's favorite CEFs (FOF) (XFLT) (ECC) (OXLC) (JQC) (ACP) (OCCI): Why the focus on CLOs?
46:30 - Steven's recommendations to a new investor looking to build an "Income Factory" portfolio
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