Resolve Riffs Investment Podcast

Our guest this week was Mark Yusko, founder, chief investment officer and managing director of Morgan Creek Capital Management. With deep experience in both digital assets and traditional finance, Mark took us on a rollercoaster as we dissected the recent turmoil affecting the ‘crypto-verse’. Topics included: A post-mortem of the FTX debacle – an evolving situation with many missing pieces The sequence of events that led to the debacle Why Mark passed on the opportunity to invest… three times Useful idiots? Conspiracy theories versus actual conspiracies You can’t ban a decentralized system, but you ‘assassinate its character’ The due diligence failure of high-profile capital allocators Fiduciary responsibility gone awry Parallels with other frauds and characters An analogy between digital assets and the Eurodollar system Bitcoin as the base layer of a future monetary system Displacing trust with truth Innovation – why timing is key Exciting ventures and projects for the coming years With every investment we get richer or wiser… never both 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.

It was our great privilege to welcome Mark Rzepczynski this week. Mark has over 25 years of experience in financial markets, is a former finance professor and writes frequently about global markets and quantitative investing. Our conversation covered: His early years, ‘forged in the chaos of the trading pits’ Pursuing a PhD and recognizing a career in research was not for him Working for John Henry – an apprenticeship in trend following Finding one’s comparative advantage and sticking to it Why trend following had a bad reputation when the Efficient Market Hypothesis (EMH) was still regarded as the law of the land Trend following as the first derivative of the EMH Understanding how markets actually behave, as opposed to how they should Prices are primal Uncertainty as the gap between what you don’t know and what you should know The interplay between price action and narrative Specialists can be tremendously myopic, while trend followers seek to be the ultimate, rules-based generalists Black Box vs Glass Box Trend following as a signal to noise problem The dirty secret of trend-following – when most of the money is actually made 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 have been eagerly waiting for this one for a while! Our friend Mike Green, Chief Strategist and Portfolio Manager at Simplify Asset Management, returned to the podcast this week. Always thought-provoking, Mike journeyed with us through a wide range of topics that included: Why the enthusiasm for central bank intervention is so asymmetric Options trading and the wild swings in Zero Days to Expiration Options (0DTE) Statistical anomalies in the labor market The primary drivers of inflation in the 1970s A comparison between Volcker and Powell Monetary policy as a blunt tool and powerful opioid – numbing investors and delaying reforms Tax arbitrage by big corporations and why they must end A path to political moderation in the US Why tighter monetary policy may be the wrong policy right now A criticism of the Fed – authority, legitimacy, and reach Reasons for underinvestment in US energy production Why the capital allocation process in the US economy is largely broken An update on the recent dynamics of passive investment vehicles Home ownership, nimbyism, and affordability The importance of the Minsky Framework for the current environment “If you’re not doing macro, macro is doing you” 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.

It was our great pleasure to welcome back Cem Karsan (also known as @jam_croissant on Twitter), Founder and Sr. Managing Partner at Kai Volatility Advisors. This deeply insightful conversation included topics such as: A recap of the last few months in equity markets Volume-weighted time and why seasonality matters more than most people know The acceleration of gamma, vanna and charm – a dangerous time to be short equities Dealer positioning as a major gravitational force in markets, often overlooked The ‘game of chicken’ played between speculators, hedgers and market makers Less ‘put hedging’ begets the currently very low skew observed Why the first and last two weeks of a year are so important The large impact of retail speculative activity and challenges to market makers Households still sitting on very large excess savings, which is often making its way into equity markets Buy the dip – investors’ conditioning over the last 40 years The risk of another lost decade for equity investors Millennials vs Boomers – a generational tussle Why the American dream has become increasingly unattainable to most 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 guest this week was Darius Dale, founder and CEO of 42 Macro, an investment research firm focused on macroeconomics. Our conversation covered topics including: How higher inflation leads to higher inflation volatility and increased risk premia The core drivers of inflation and where the data currently points Complacency followed by overshooting – the central bank dichotomy Don’t count on a pivot anytime soon – why Powell is determined to “break things” An uncomfortable trade-off – under inflation, central banks can have price or financial stability, not both Signs the US economy is still firing on all cylinders Strong balance sheets and perhaps the strongest labor market in living memory Why cash has once again taken the throne The demise of the 60/40 portfolio Energy markets dynamics – from geopolitics to ESG Why a structural undersupply of labor reduces the probability of a recession The dysfunctional combination of tighter monetary and looser fiscal policies 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.  

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