Raoul Pal and Julian Bittel dive into the ultimate macro masterclass covering topics like understanding the economy, markets, debasement of currency, liquidity, forecasting asset prices, and why crypto is a crucial macro trend. They also explore Polkadot's blockchain, the Everything Code, and the importance of crypto investments in today's landscape.
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Quick takeaways
Understanding the Everything Code for investing framework.
Polkadot as a versatile Layer Zero blockchain for data transfer.
Insights from Raoul Pal on macro investing tools and research content.
Forecasting asset prices through liquidity cycles and macro trends.
Relationship between economic fundamentals and crypto asset performance.
Deep dives
Understanding the Polkadot Blockchain Protocol
Polkadot is a leading Layer Zero blockchain that enables the transfer of arbitrary data across blockchains, not limited to tokens. Gavin Wood discusses Polkadot's evolution into a versatile world computer, emphasizing its transition from a relay chain to a multi-core virtual machine.
Journey of Discovery in Macro, Crypto, and Tech
Raoul Pal shares insights into his 20 years of writing Global Macro Investor research, highlighting the genesis of his diverse ventures like Real Vision and asset management businesses rooted in his GMI work, aimed at providing comprehensive research content for hedge funds.
Unique Insights into Macro Investing Structures
Through collaborations like the Exponentialist with David Matin and Pro Macro with Julian, Raoul details the unique macro investing tools like the Macro Investing Tool designed to guide asset allocation models and provide a comprehensive understanding of the business cycle.
Forecasting Liquidity and Asset Prices
Raoul and Julian unveil the Everything Code, explaining the cyclical nature of liquidity and its impact on asset prices. By forecasting liquidity peaks and correlating them with asset performance indicators like the NASDAQ and Bitcoin, they provide a directional view on future asset valuations and market trends.
Impact of Macroeconomic Factors on Asset Prices
Assets, including crypto, are influenced by macroeconomic factors, leading to a lack of diversification as everything is tied to the same economic trend. This correlation highlights how economic fundamentals govern assets like Bitcoin, contradicting previous beliefs of its independence. Crypto's performance reflects macroeconomic shifts, with Bitcoin anticipated to be a preferred asset during economic booms.
Liquidity and Financial Conditions Impact on Asset Allocation
Liquidity cycles play a key role in asset price movements, with Bitcoin demonstrating correlation with liquidity cycles. Fed net liquidity and liquidity premium projections indicate potential increases, influencing investment strategies. Understanding excess liquidity's impact on equity PE ratios guides asset allocation decisions, aligning with the broader economic cycle for optimal investment outcomes.
Asset Allocation Strategies Based on Changing Business Cycles
A comprehensive framework incorporating growth, inflation, and liquidity helps in asset allocation decisions across various business cycle phases. Different assets and sectors perform differently based on the prevailing macro regime, such as tech and consumer discretionary in spring and commodities in summer. The framework aids in identifying opportunities and optimizing investment portfolios.
Copper Outperforms Gold in Business Cycle
During a macro discussion in the podcast, the speaker highlights how copper tends to outperform gold as the business cycle transitions and moves higher. The speaker mentions that the current environment indicates a significant breakout of copper versus gold. This insight emphasizes the importance of understanding macro trends like the business cycle to make informed investment decisions.
Cryptocurrency Investment Opportunities and Trends
In the podcast, the speaker delves into the dynamics of the cryptocurrency market, comparing all coins to small cap equities and major cryptocurrencies to large cap growth equities. The speaker emphasizes that all coins operate in line with the business cycle, showing a lag in response due to their smaller project size. Additionally, insights are shared regarding NFTs as trophy assets, aligning them with traditional trophy assets' investment behaviors. This discussion underscores the evolving opportunities in the crypto space and the importance of understanding market cycles for profitable investment strategies.
🔥 Join the Polkadot community here: http://realvision.com/polkadot
The Everything Code is the most important investing framework for our times.
This is the ultimate macro masterclass. It will give you everything you need to understand how the economy works, how the markets work, what debasement of currency is, and why liquidity matters. It brings it all home with how to forecast asset prices and why crypto is not only the greatest macro trend of our lifetimes but also the most important investment of all time. Recorded on May 17, 2024.
Polkadot is a leading layer zero blockchain with over 2,000 developers. It is a network protocol that allows arbitrary data — not just tokens — to be transferred across blockchains. The Polkadot 2.0 upgrade will be a massive accelerator for the ecosystem. You can learn more and join the community here: http://realvision.com/polkadot
