Resolve Riffs Investment Podcast

Wade Pfau is Professor of Retirement Income at The American College and has published several books on retirement, most recently The Retirement Planning Guidebook: Navigating The Important Decisions For Retirement Success. He joined us for an awesome discussion that included:

• The drawbacks of privatized retirement plans
• Why longevity pooling is so important
• Trade-offs between defined benefits and defined contribution plans
• Varying incentives across countries
• How different systems can withstand long-term shocks
• Path dependency, sequence of returns and the most crucial period for a retirement portfolio
• Motivations for writing his latest book and debunking retirement myths
• Safety First vs Probability First
• Optionality vs Commitment
• Different profiles and preferences, and a framework to accommodate them all
• A controversial take on the importance of asset allocation
• Why a 4% withdrawal rate is the least efficient approach
• Navigating the tax maze
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.

Our friend Jeff Weniger, Head of Equity Strategy at Wisdom Tree, returned as this week’s guest. Our wide-ranging conversation covered topics including:

• How sticky has inflation really become
• Many ways to measure inflation
• Leading and lagging indicators
• The recent drop in US home prices and the health of the real-estate market
• How the recent rise in interest rates affects mortgages and affordability
• US money supply and the reversal of the TINA trade
• Japan – demographics, debt burden and a collapsing Yen
• Reverse currency wars
• What makes a country (and its currency) a safe haven
• The apparent disconnect between financial markets and the economy
• How investors should prepare and protect their portfolios for the next few years
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.

As we returned from the summer break, the season’s opening episode brought the ReSolve crew together for a deep dive into Commodity Trading Advisor (CTA) strategies, often referred to as Managed Futures, covering topics that included:

• The path we all took to become CTA fund managers
• The role these strategies can and should play in portfolios
• How to position them within a broader asset allocation framework
• ‘Closet betas’ vs true diversifiers
• Are CTAs necessarily synonymous with trend following?
• The many faces of trend following
• ‘Lumpy’ returns and prolonged winters
• The role central banks have played in reducing outcome dispersion across asset classes
• Behavioral hurdles and challenges
• Going beyond trend and the tradeoffs associated with stacking other strategies
• All-weather vs all-terrain investing
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.

Today’s guest is Claudia Sahm, who is the founder of Stay-At-Home Macro Consulting. She also writes a Substack of the same name, stayathomemacro.substack.com. She is a former Federal Reserve analyst, and also a former White House economic adviser.

Claudia and I discussed the interaction between fiscal and monetary policy, and how the government and the Federal Reserve might more effectively combine forces to use the best tools available to address many of the major challenges that are ongoing in the domestic economy today.

We also discuss the limitations and strengths of monetary policy and the lost opportunities for constructive action in terms of fiscal policy, and what measures we might be able to take to make progress in Washington, and if so, what type of policy actions might have the greatest impact in terms of improving quality of life without exacerbating the immediate economic effects of the current inflationary impulse.

We also talk about the impact of the wealth effect and debate the extent to which housing, the rapid rise in home prices and the enormous outlier gains in equity portfolios over the last several years may be contributing substantially to the type of inflation that we’ve started to see recently on the services side, in terms of discretionary travel, shelter, discretionary healthcare spending and labor costs.

Hosted by Adam Butler of ReSolve Global*

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

 Logan is one of the foremost experts on the state and health of the U.S. housing market. In his capacity as Lead Analyst for HousingWire, he invokes a comprehensive data-driven framework for understanding the fundamental drivers of housing supply and demand.

Logan demonstrated his expertise on the subject, bringing to bear data and analysis from a variety of sources and perspectives. The housing market is extremely complex with many agents and feedback effects. Logan’s insights into the motivations and risk management tactics of homebuilders were especially interesting. We discussed whether private sector incentives are likely to alleviate a chronic housing shortage and concluded that agents rarely have the right incentives to seek equilibrium between supply and demand.

Logan believes sufficiently high interest rates on mortgages will curtail demand and slowly bring supply onto the market to ease price growth, but it will be slow, and a pivot in rates may spur a renewed surge in demand. There are few easy options and it’s hard to see how the housing crisis will be resolved any time soon.

Hosted by Adam Butler of ReSolve Global*

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority

The conversation was motivated by Demetri’s tweets about MMT and fiscal policy, which stirred up quite a conflagration, and involved several primary exponents of MMT including Warren Mosler and Rohan Gray.

Adam and Demetri spent the first 35 or 40 minutes on MMT, mostly overcoming the frustration around the politicization of the concept. They discussed inequality and government’s involvement in the economy.

The conversation then shifted to what’s happening currently in the economy and to the US politically, both domestically and in terms of their projection of power internationally.

It was natural for the discussion to cover how a constant dwelling on themes around geopolitics and markets, and all the major risks, can weigh on your psyche, and how easy it is to develop pathos and obsessions, and how that can sometimes impact your personal life.

Demetri was kind enough to share his experience with brain cancer and how that was so transformative for him and how that translates to his outlook on life and his ability to see past some of the major issues that we constantly think about, and focus on some of the amazing things in our lives.

Hosted by Adam Butler of ReSolve Global*

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

This week we welcomed back our good friend Jason Buck (founder and CIO of Mutiny Fund) for the final episode before the summer break. Our conversation included:

• Recent price action in the commodity space
• The incredible confidence of the ‘buy the dip’ equity investors
• An end to the “bad news is good news” regime
• The mental pivot required to successfully navigate regime shift
• Why prolonged bear markets have become a foreign idea to most investors
• The kind of environment in which the difference between nominal and real returns matters most
• Human’s constant pursuit of historical analogues
• The Farmer’s Fable, macro efficiency and a mentality of abundance
• The opportunities created by the blind-spots in traditional portfolios and the allure of an ‘esoteric fringe’
• A harmonious core and a zero-sum explorer
• Observing the ongoing evolution of the zeitgeist
• Evidence-based zealotry
• Two types of scientific theories – those that have been disproven, and those that one day will be
• An eternal struggle between the brain’s hemispheres – falsifiable simplicity vs intellectual rabbit-holes
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.

This week we had the pleasure of welcoming Jeff Snider (Head of Global Investment Research at Alhambra Investments) and Emil Kalinowski (enterprising investor, author and host of both a talk radio show and a podcast). Together, they co-host Eurodollar University podcast and shed light on the complexities of the global monetary system. Our conversation included:

• Back to basics – how the global currency and monetary systems actually work
• The origins of the Eurodollar system
• Triffin’s Paradox and the breakdown of the Bretton Woods System
• Interest rate targeting as a form of mass psychosis for capital markets
• How banking reserves interact with the Eurodollar system
• Different types of money – commodity-backed, high-powered and credit
• Treasuries as the main form of balance sheet ballast for private investors
• A different take on the Great Financial Crisis – a stampede towards prime collateral at all costs
• Why central banks would compete to buy assets that are already scarce and in high demand
• The true impacts of quantitative easing and why it’s ineffective in reducing interest rates
• The importance of sentiment and why the main role of central banks is theatrical
• Lacking the tools to unclog the system
• How even China got caught in the ‘Eurodollar System Vortex’
• Vast swathes of the real economy have been deprived of credit since 2008
• REPO markets, unwilling primary dealers and backwards elasticity
• Rehypothecation of collateral and other fundamental problems
• Creation and intermediation of money should be done by separate institutions
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.

For this week’s special episode, Adam, Mike, Rodrigo and Richard gathered to explore the building blocks of an ultimate All Weather portfolio. Our conversation included:

• The blind spots of the 60/40 stock-bond portfolio
• Regime dependency and economic shocks
• Diversifiable versus non-diversifiable risks
• How to create an optimal portfolio that can navigate most regimes
• Why Global Risk Parity is the natural starting point for any investor with a long-term view
• Different ways to implement Risk Parity
• Time horizons and rebalancing
• Tactical tilts and the beta-alpha continuum
• Yield as another proxy for risk
• Global Carry as a complement to risk parity beta
• The Existence Proof as a threat to alpha
• Trend following, seasonality, carry, counter-trend, relative value and volatility
• Why one man’s alpha can sometimes be another’s (smart) beta
• Ensembles and thinking beyond traditional factors
• Considering speed and size
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.

We had the pleasure this week of speaking with Cem Karsan (the pronunciation can be a bit challenging, bit the hint is in his Twitter handle - @jam_croissant), founder of Kai Volatility Advisors. His deep knowledge of market structures and investment flows took us on a fascinating conversation that included:

• Joining a team early in his career that would become one of the Street’s largest options market makers
• Developing a profound understanding of the reflexive game of dealer positioning and its feedback effects on asset prices
• Launching Kai Volatility Advisors and three uncorrelated strategies
• A quantitative approach with a discretionary overlay
• The circumstances under which dealer flow becomes most relevant
• The upcoming June expiration and the ‘massive delta’ hovering over the market
• Distributions vs expectations
• The remarkable advances in the options market over the last two decades
• The ‘dramatic oversupply’ of volatility and its underperformance as an asset-class
• The JP Morgan Equity Hedge giant and its impact on the market
• Efficiency, transparency and performance – the trade-offs between ETFs and private pools
• Cem’s global macro perspective and his take on the current environment
• The explosive combination of cheap capital and technological innovation
• The road to inflation – inequality, populism and a pandemic-induced fiscal trigger of titanic proportions
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.