Christopher Zook, founder and Chief Investment Officer of CAZ Investments, which oversees around $5 billion in assets under management, joins Julia La Roche on episode 72 for a wide-ranging macroeconomic discussion. 

In this episode, Zook shares that a recession is coming, and it’s “going to be deeper and probably longer than people think.” He adds that we’ll have a “manufactured recession,” where inflation is running so hot that the Federal Reserve has to raise rates fast to slow down inflation, forcing the economy into a recession. Moreover, he points out that markets believe the Fed will start cutting rates by the end of the year, something Zook does not expect to happen.  

In these types of environments, Zook is looking for opportunities in dislocated assets or persistent assets that perform well, even if his hypothesis is found to be true. 

Zook has over 30 years of experience investing in traditional and alternative asset classes. He was recently honored with the Texas Alternative Investments Association’s (TAIA) Lifetime Achievement Award in recognition of his contribution and sustained support of the industry in Texas. He regularly contributes to major media outlets, including CNBC, Fox Business, and Bloomberg. Before starting CAZ Investments in 2001, Zook served in senior leadership positions with Oppenheimer, Prudential Securities, Lehman Brothers, and Paine Webber.

0:00 Intro

2:12 Welcoming Christopher Zook to the show

2:50 Beginnings in investing 

3:43 Trading commodities to pay for college

4:40 Reading about traders 

5:55 Managing risk extremely carefully 

7:20 Starting own firm 

8:20 Managing money at age 22 

8:50 Set goal to start firm in 10 years 

9:50 Tony Robbins 

10:40 The bigger the way, the bigger the try 

14:00 Zook’s “why” 

16:20 CAZ Investments structure and focus 

18:36 Thematic approach 

20:30 Betting against subprime housing 

25:00 Macro outlook

25:12 Meme stock bubble 

26:23 It takes longer than people think to reconcile dislocations 

27:07 We haven’t seen true dislocation yet 

27:40 Recession is coming and it will be deeper and longer than people think 

28:08 A manufactured recession 

29:00 I’ll be shocked if the Fed cuts rates this year

30:06 More of a 2-3 year recession 

31:00 Disconnect between the Fed and the market 

33:20 Be greedy when others are fearful 

33:54 Stagflation 

34:34 Worst economic regime for financial assets 

38:13 Opportunities 

40:20 Themes right now 

41:09 Cord-cutting 

41:40 Opportunity in sports teams, media rights

43:55 Themes that exist in real estate today 

45:40 Stress from higher rates will force refinancing 

46:45 Why we haven’t seen panic selling yet 

47:45 Every sector of real estate will be stressed 

50:40 U.S. Dollar outlook 

53:39 U.S. debt levels are terrifying 

56:29 Growth of private assets 

57:04 Opportunity in GP stakes