This week's Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking with Seeking Alpha contributor and editor of The Lead-Lag Report, Michael Gayed. Gayed is also portfolio manager of the ATAC Rotation Fund, which has managed to walk between the raindrops in 2020, returning about 60% year-to-date.
Prior to the wide-ranging interview with Gayed, Task and Alpher mull Friday afternoon's big news - the disclosure of a $500M stake in Barrick Gold (GOLD) by Berkshire Hathaway ([[BRK.A]], [[BRK.B]]), alongside major cuts in holdings of Wells Fargo (WFC), JPMorgan (JPM), and Goldman Sachs (GS). Warren Buffett, of course, has made no secret over the years of his disdain for investing in the yellow metal, and whether it was The Oracle himself, or Ted Weschler or Todd Combs who made the Barrick purchase remains to be seen. Nevertheless, the news lit a fire under Barrick and the gold miners (GDX) in general on Monday, not to mention maybe playing a role in lifting gold (XAUUSD:CUR) almost back to the $2K level.
The ATAC Rotation Fund is highly tactical and designed for low correlation with broader markets - rotating into Treasurys when indicators point to high volatility, and into equities with leverage when indicators point to low volatility. The fund's signals got it into Treasurys in late January and back into equities in late March - hence, the big gains in 2020. Key to the indicators - the behavior of utilities (XLU) and long-dated Treasurys (TLT).
And what are those indicators saying now? It's a bit cloudy, says Gayed, noting the absolute yields of Treasurys suggests deflationary pressure, but the underperformance of the utility sector suggests reflationary pressure. In the short term, at least, Gayed suspects the reflationary forces will win out.
There's plenty more, including the growing chance of a major selloff in Treasurys, why we should pay attention to the soaring price of lumber, and how Gayed might position his fund for a "two crash" scenario. Finally, we get into Gayed's recent article, "The Greatest Disconnect Between Stocks And The Economy Continues," and how COVID-19 has exposed capitalism's weaknesses.
Listen to or subscribe to Alpha Trader on these podcast platforms:

Apple Podcasts

Spotify

Google Play

Stitcher


Learn more about your ad choices. Visit megaphone.fm/adchoices