Marketplace Roundtable

2020 has already seen the quickest bear market sell-off and counter-rally in history. With one of the most consequential elections in U.S. history just six weeks away and another virus wave likely this fall, volatility will remain the key investing story in 2020. So much fear and greed can make even the most seasoned investor abandon well thought out plans, leading to potentially catastrophic results to their portfolio's bottom line. EPB Macro Research's Eric Basmajian rejoins the podcast to walk listeners through his unique approach to portfolio construction, which blends mean-variance analysis and his own financial forecasting models to produce risk-adjusted outperformance.
Show Notes

4:00 - 2020 has been a crazy year for markets - and it's not even over

7:30 - What is Modern Portfolio Theory - and why does it work?

12:30 - Balancing risk through mean variance analysis

17:30 - Eric's approach to portfolio construction within EPB Macro Research

23:00 - Frequency of portfolio rebalancing

29:45 - Current valuations and future expected returns in asset class allocations and position sizing 

33:30 - How overvalued are equities right now?

37:30 - Valuations continued: U.S. vs. Foreign equities

42:30 - Expected bond returns in a flat yield curve environment

56:00 - Disconnect between Wall Street and Main Street: How efficient are markets?

62:00 - Too much debt is bad for future growth

72:00 - Labor force vs. productivity growth

76:00 - Given the current interest rate environment, how does one get a real rate of return in bonds?


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With his ATAC Rotation Fund (ATACX) up 58% YTD, Michael Gayed explains how he uses historically proven leading indicators of volatility to generate outsized returns. ATAC Rotation employs a tactical risk-on, risk-off strategy that alternates weekly between a mix of stock and bond ETFs based on projections of short-term volatility. When not managing ATACX, Gayed runs The Lead-Lag Report at The Seeking Alpha Marketplace. Subscribers to The Lead-Lag Report receive daily detailed risk analysis reports that utilize the same proprietary data models Gayed uses to position ATAC Rotation, alongside tactical investment opportunities. With the VIX jumping from 22 to 32 in a little over a week and markets flailing, investors would do well to heed Gayed's central message: Ignore gathering storm clouds at your own peril.
Show Notes

3:30 - How does the strategy underlying the ATAC Rotation Fund work and how did Michael come up with it?

10:45 - What has driven the impressive returns so far in 2020?

20:00 - Effect of the COVID-19 pandemic on investor sentiment

23:00 - The 2020 effect: Making sense of one of the craziest years for investors in recent memory

29:00 - Diagnosing the problem: The disease plaguing American capitalism?

41:00 - Fund basics: Why hold 4 different small-cap ETFs? What does the ETF selection process look like?

48:30 - 2,000% turnover: How do you tax manage a fund like this?

53:00 - The Lead-Lag Report: Michael's outlook for equities?

55:00 - Dos and Don'ts of the ETF screening process


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We speak with Beth Kindig and Knox Ridley of Tech Insider Research about Zoom's ascent and why there's still more to come from the shift to the cloud.
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The Stock Waves team - Lyn Alden Schwartzer, Zachary Mannes, and Garret Patten - takes us through why they think the market will be higher in the next 3-5 years, and some ideas they like even as a correction beckons.
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Laura Starks joins us to talk about signs of life in the energy sector (1:00-26:00 minute mark), while Mark Hibben shares a note of caution for tech (26:30-57:00).
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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 The Marketplace Roundtable 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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We speak with two Marketplace authors, both of whom feel the tech sector has more than achieved full value, and that a correction may be in line for the market as a whole soon. First, Michael Kramer of Mott Capital Management, author of Reading the Markets, speaks to us about the need for patience in an increasingly expensive market (1:00 minute mark-28:00). Then, Victor Dergunov points out why he's not crazy with market valuations, but why gold and the mining sector shine brighter (28:15-56:30).
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Work from home tech plays have mostly been a software story, whether it's SaaS (software as a service) darlings like Zoom (ZM) or content plays like Netflix (NFLX). Momentum investing suggests that a stock that's going up is still a good bet, but it's hard to say that those names don't have significant valuations already.
Joe Albano, author of Tech Cache, joined us to speak about the tech sector. While we didn't explicitly target this, we ended up having a discussion about less heralded beneficiaries of the work from home theme. With the increased demand on servers, semiconductor and memory chip suppliers such as Micron (MU) would seem to benefit. Joe also calls out a security play that he thinks is suited for the current environment, especially if the shares pull back a little more.
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In our first episode this week, we speak with Ruerd Heeg, author of Global Deep Value Stocks, about the current market. He explains why he's pessimistic about the market as a whole, but also which quantitative strategies he's following to build a watch list and find interesting ideas. He shares the markets he most likes in today's climate - Poland and Hong Kong offer bargains - as well as over a dozen statistically cheap stocks in 6 different markets. Find Ruerd's Marketplace service here - https://seekingalpha.com/checkout?service_id=mp_276. Follow Ruerd's free Seeking Alpha content here - https://seekingalpha.com/author/ruerd-heeg#regular_articles
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We talk with three Marketplace authors about the oil storage glut and whether this is a sign of end times or just a rut. Kirk Spano of Margin of Safety Investing leads off (from the 1:00 minute mark-54:30), followed by Richard Berger of Engineered Income Investing (54:45-1:22:30), and Power Hedge, author of Energy Profits In Dividends, brings us home (1:22:45-1:37:15).
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