Top Podcasts of the Week

Below is our “Top Podcast” list with our curator, Colby Donovan!

Today we have John Hempton on finding and exploiting an edge, Alan Dunne on all things trend-following and global macro, and housing expert Ivy Zelman on why she thinks the housing market is ‘euphoric.’

Investing

• Risk of Ruin: Zero, by Way of a Hundred. This episode is with John Hempton, CIO of Bronte Capital, which seeks to generate excess returns primarily through shorting fraudulent companies. The conversation is around finding an edge, exploiting the edge, and managing your risk along the way. John also specifically discusses two famous shorts, Valeant Pharmaceutical and Wirecard. [March 28, 2022–55 minutes] iTunes Podcast | Spotify | Google

“If you talk to the management of a company and you believe everything that they say, then almost every company looks like a buy.”

• The Derivative: Commodity Volatility, Global Macro, and Trend Following with Alan Dunne from Archive Capital. Alan Dunne is the CEO of Archive Capital, a boutique multi-asset and investment research firm focused on global macro and managed futures strategies. In this episode, they touch on the volatility in the commodity markets and how it compares to prior periods, how macro traders have evolved over the years, and his framework for allocating to trend-following managers. [March 17, 2022–73 minutes] iTunes Podcast | Spotify | Google

“Those positions that feel uncomfortable are often the ones that that will deliver for you over time but that’s a feature of trend following that you have to have. The point of trend following is that it is uncomfortable.”

“Profit taking makes it lose its trend following profile and some of the convexity. There is less risk on when you get outlier events that can make up for years of flat performance. Investors view it as a bug, CTAs [Commodity Trading Advisors] view it as a feature.”

The Meb Faber Show

• #402 — Paul Kim, Simplify Asset Management — Embracing Convexity Through The ETF Structure. Paul Kim is the co-founder and CEO of Simplify Asset Management, an ETF provider focused on long volatility ETFs that seek to generate income or hedge downside risk. He discusses the ability to use options in the ETF structure, an idea which Paul and his team have embraced to create convex strategies. Then he walks through some strategies, including some that hedge bonds and stocks, and even Simplify’s thematic health care ETF that gives 100% of the proceeds to charity. [March 28, 2022–55 minutes] iTunes Podcast | Spotify | Google | Website Link

• #403 — Ivy Zelman, Zelman & Associates — Here’s Why This Housing Expert Says The Market is “Euphoric” and Urges Caution. Ivy Zelman is the CEO and co-founder of Zelman & Associates and one of the top analysts covering the housing market. The episode starts by going back to 2008, and what led her to be one of the few housing bears. Then she talks about the housing market today, which she describes as euphoric and bonkers. She explains why poor demographics and lack of affordability due to rising rates lead her to think the market is over-extended today. [March 30, 2022–52 minutes] iTunes Podcast | Spotify | Google | Website Link

• 35% of homeowners do NOT have a mortgage• Cash purchases are up over 40% in ~2 years• >50% of homeowners have a mortgage rate below 3.75%

BOOK RECOMMENDATIONSBill Gross (Co-Founder, PIMCO): 

1. An American Childhood by Annie Dillard

2. Pilgrim at Tinker Creek by Annie Dillard

3. Nothing to Be Frightened Of by Julian Barnes

4. The Age of AI: And Our Human Future by Henry A Kissinger, Eric Schmidt, and Daniel Huttenlocher

Good investing,Meb Fabertheideafarm.com