How to Invest in an Inflationary Recession | Paulo Macro & Le Shrub

14 snips

May 13, 2024

Guest

Le Shrub

Guest

Paulo Macro

Experienced investors Paulo Macro & Le Shrub discuss investment frameworks, EM-ification of developed economies, understanding policymakers' incentives, international system strains, investment opportunities in commodities, and challenges during an inflationary recession.

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ADVICE

Write Publicly To Improve Your Edge

Write publicly to improve your investment process and accountability.
Le Shrub found tweeted trade ideas had a higher hit rate because public exposure forced him to share only his best trades.

ADVICE

Keep A Recorded Trading Diary

Use writing and recorded conversations as an investment diary to stay honest and improve speculation.
Paolo describes how speaking, writing, and saving calls with Shrub creates a useful digital record and sharpens decision-making.

ANECDOTE

Call My Wife If I Get Overconfident

Paolo shares a personal risk-control ritual after costly losses: enlist friends and family to intervene when overconfident.
He arranged for contacts to call his wife to stop him trading when he displays dangerous confidence.

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In Episode 363 of Hidden Forces, Demetri Kofinas speaks with investors Paulo Macro and Le Shrub about their investment ideas, frameworks, and processes for identifying investment opportunities and managing risk.

In the first hour, Demetri asks Paulo and Le Shrub about some of their respective frameworks, including the EM-ification of developed economies, the need to understand the incentives of policymakers, and how these frameworks can help inform your expectations about interest rates, inflation, credit rationing, and much more.

In the second hour, Paulo Macro and Le Shrub discuss how the contemporary strain on the international system and on American military and financial hegemony could amplify some of the budgetary and political headwinds facing developed economies in the years ahead. They discuss the conundrum facing policymakers in China, the investment opportunity in commodities, the search for a new safe asset in a world of worsening fiscal balance sheets, and what it feels like to be "financially gaslighted" during an inflationary recession where prices rise as one's living standard declines.

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Episode Recorded on 05/07/2024