The IRF Podcast

David Osman of the IRF is joined by James Aitken, the founder of Aitken Advisors, which is based in London.----more----

Consumers are becoming increasingly focused on ESG investing, not just for environmental reasons, but also for social and governance matters. This, along with increasing ESG financial regulation, is putting greater pressures on the investment decisions of institutional investors. Given the strong political momentum behind climate change concerns, James Aitken points out that inflows into ESG and climate related funds are likely to increase substantially in the years ahead. James warns that the ESG and climate tsunami have barely begun to ripple through the world economy and global financial markets: it could be an important feature of them for years to come. He argues that ESG, inflation and climate transition are 3 sides of the same coin. This has important investment implications for asset allocators, particularly with respect to central bank policies, the major oil & gas companies and the future inclusion of China in a global portfolio.

David Osman of the IRF is joined by Jeffrey Christian, the founder & managing partner at the CPM Group, which is based in New York.----more----

Bond and equity markets have risen to valuation levels that are expensive. In the face of rising inflationary expectations, several of the major central banks are now looking to tighten their monetary policy stance. Interest rates are generally expected to be on a gently rising trend in 2022. In these circumstances, many investors are looking to increase the weightings of precious metals and other commodities in their portfolios. A key consideration is what will happen to the price of gold. Jeffrey Christian discusses the outlook for the price of gold and other precious metals both in the short-term and on a 3 - 4 year view. In doing so, he sets out the macroeconomic and sectoral factors that will be the main determinants of the demand for and supply of gold, silver and the platinum group of metals in the next few years.

David Osman of the IRF Podcast team is joined by by Chris Watling, the founder, CEO and Chief Market Strategist at Longview Economics, which is based in London.

----more----Many global investors have come to the conclusion that the equity markets are the best place to investment at present. This has been an important factor driving the rise in stock markets to higher and higher valuations in recent times. Will this continue? When will it end? What happens when it does end? In this podcast, Chris Watling of Longview Economics discusses these questions and other important issues. He explains how for more than a decade the unconventional monetary policies that were implemented by the world’s major central banks, mainly in response to the global financial crisis, have driven down interest rates and government bond yields, created an abundance of liquidity, distorted investment opportunities and encouraged more risk taking. This has led to a major bubble in the global financial markets. Chris points out that the creation of abundant liquidity has been the most important factor driving equity valuations to extremely high levels. For many investors it has seemed that there has been no alternative (TINA) to investing in the equity markets in recent years. But this situation will not continue indefinitely. Chris discusses the outlook for world inflation and monetary policies. He sets out his assessment of when TINA will end as central banks tighten, interest rates increase and stock markets weaken. In conclusion, Chris answers a crucial question for global asset allocators: When should portfolios be switched from a ‘risk on’ to a ‘risk off’ strategy?

David Osman of the IRF Podcast team is joined by William Hess, the co-CEO and co-Head of Research at PRC Macro, which is based in Beijing and New York.

----more----With global investors becoming increasingly concerned about the recent big bang policy developments in China, PRC Macro is ideally positioned to identify and analyse key developments in the Chinese economy, not least in the property sector and the financial markets. Established in 2012, PRC Macro develops economic information and forecasting services to fill the large analytical gaps that exist with respect to China’s political economy. They do this through data, analytical models and extensive on the ground research. PRC Macro offers a subscription to their service where clients can expect to receive at least a weekly market outlook for multiple asset classes, thematic investment ideas and policy analysis. They are also able to offer bespoke work, roundtable events, webinars and privacy briefings.

In this podcast William Hess explains the pros and cons of Xi Jinping’s Common Prosperity Agenda and the severe problems in China’s highly-leveraged property sector. William also discusses China’s demographic trends, which will slow the rate of economic growth significantly in the years ahead. He highlights the main implications for Chinese monetary and fiscal policymakers and for investors in China’s bond and equity markets. William also assesses the chances of China introducing a nationwide property tax in the next few years.

In addition, he discusses China’s more aggressive approach towards reunification with Taiwan and other matters relating to the evolving Sino-US relationship, as well as the outlook for the Chinese currency.

Edward Blad of the IRF Podcast is joined by Jonathan Boyar, Managing Director of Boyar Research, to discuss US equity ideas. 

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Boyar Research carries out fundamental research rigorously going through company’s financial statements, tearing them apart and reconstructing them in accordance with economic reality as opposed to generally accepted accounting principles. They seek possible investment opportunities across the market capitalisation spectrum and within a diverse range of industries. A large number of the companies featured in their publications are not widely followed by Wall Street. Boyar's Forgotten Forty portfolio has produced an average annual gain of 9.6% over the past decade, versus the 8% average, for the Russell 1000 Value index. 

Stocks discussed include: Liberty Braves, Scotts Miracle-Gro, CVS Health Corp, Microsoft, Home Depot, Twitter.

David Osman of the IRF Podcast is joined by David Roche, President and Global Strategist of Independent Strategy, to discuss ‘investing during a saw tooth pandemic recovery’.  Independent Strategy is a macro research company focused on long and short term investment, which is unafraid to challenge conventional wisdom. ----more----

David explains that a normal cyclical recovery post pandemic is impossible. The saw tooth recovery pattern is one where there is a huge boom once the sector is unlocked, followed by decline towards a trend growth rate. The timing and extent of the boom is largely dependent on the sector, with manufacturing first showing the largest boom and now the service sector will likely replace it. In light of this, granular investment selection is very important: specific sectors, countries and stocks. David believes the increased inflation which has been witnessed recently will continue. The pandemic has shifted from a libertarian market philosophy to a state intervention. Higher levels of debt, bigger budget deficits and greater role of the state are expected. David mentions the correlation between higher growth rates and stronger currencies, and expands on his view that government bonds are an unattractive investment proposition. 

David Osman of the IRF Podcast is joined by Kathleen Kelley of Queen Anne's Gate Capital to discuss "The Myths and Maths of Commodity Investing".----more----

Katheen Kelley, the CEO of Queen Anne’s Gate Capital, is a former commodities fund manager at Tudor Investment and Kingdon Capital. Kathleen is adamant we are not entering a commodity super cycle because every commodity comes with its own cycle and should be addressed individually. However, whilst some commodity markets, particularly metals, seem to be rolling over, energy markets should continue to rise and as an input to every other commodity this will provide a floor to commodities overall. We should expect the largest draw in oil inventory to come this quarter, leading to a sharp rise in crude oil prices, as demand outpaces supply.  Supply remains constrained with OPEC being more disciplined and US companies respecting shareholder demands to return capital.  Kathleen discusses her inflation expectations in relation to gasoline and gold prices, as well as China’s demand for metals and their determination to keep prices low to boost economic growth. She also talks about China’s new ESG strategy in terms of commodity production and her insights on soft commodities, which have much shorter cycles. Kathleen discusses coffee, sugar, cocoa, wheat, corn, soyabeans, and one of the most interesting markets vegetable oil with the increasing demand for biofuels.

Jamie Stewart of the IRF Podcast is joined by Callum Thomas, the founder of Topdown Charts to discuss ‘Global Policy Pivot and the Wake Up Call to Markets.’ Topdown Charts is a chart driven Macro Research House covering global asset allocation and economics.----more----

Callum gives clear and expert insight into investment strategy, the projects that can be covered by charts and creates a 3 dimensional appreciation of graphic disciplines. He discusses global policy pivot, how it functions and how it is relevant for us all. He explains why central banks are transitioning from suppressors of volatility to sources of volatility and how investors should understand and interpret this. How last year was about suppressing volatility and pouring unprecedented amounts of monetary easing into the system and why this year we are starting to see monetary policy as a source of volatility. Callum relates how anyone with an asset allocation investment responsibility on an institutional basis should be positioned and what they should be looking for. He indicates any undervalued assets that offer a positive and attractive risk reward prospect and also highlights significant risks which investors are tending to ignore or underestimate.

Jamie Stewart of the IRF Podcast is joined by Richard Edwards, Founder of HED Capital Management, to discuss how to read the mood of the market. HED Capital Management use the tools of behavioural finance to study how shifts in crowd behaviour affect markets.

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Richard begins by emphasising the importance of mood in determining price movements in the market. By examining the ebbs and flows of mood, HED Capital Management have devised various ways to measure it and make predictions. Richard delves into the tools that they use for measuring mood through feedback loops and footprints and how they report these signals to their clients alongside economic commentary and recommendations. Richard finishes by demonstrating how their research differs from typical technical analysis and what subscribers to their service can expect.

David Osman of the IRF Podcast is joined by Carl Weinberg, the Managing Director and Chief Economist at High Frequency Economics to discuss ‘Recovery from the Covid Crisis – Sizzle or Fizzle.’ High Frequency Economics has been a trusted source of economic intelligence for the financial community for over 30 years.----more----

The Fed is facing a crisis and there is no good policy option to be had. It is currently looking at extraordinarily high unemployment which it sees as a risk to social stability, financial stability and economic stability – an unaffordable burden on the economy. There is a risk of inflation to be weighed against the risk of high unemployment. Carl is not convinced there is an inflation risk and gives his reasons why. He states that inflation is the simultaneous and proportionate increase of all prices and all wages for a sustained period of time. He looks back at the last global financial crisis in 2008/09 and then recalls that going into the current economic downturn the economy was already entering an industrial recession. The question he asks of those expecting a sizzling rebound is: ‘Why should the economy not go back to what it was doing before the Covid crisis.’ Carl discusses the impact of scarring from the pandemic and closes with his thoughts on the strongest risk to the strength of the global economic rebound. This may take investors by surprise!