The Contrarian Investor Podcast

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Barry Knapp of Ironsides Macroeconomics rejoins the podcast to discuss his surprisingly sanguine view of the economy in 2023: Why cyclical stocks should outperform the technology and defensive sectors, and why he's expecting inflation to drop to 3.5% by the second half of the year.

Content Highlights

• Inflationary recessions are different from deflationary ones. The last four were the latter. If there is a recession this year, it will be the former (02:18);
• Earnings downside is limited in this scenario, by 5% based on what happened in similar situations in the past, and earnings should actually go up (5:56);
• Tech margins should continue to be under pressure but economically-sensitive cyclical stocks should see margin expansion (10:50);
• The US labor market has actually started to weaken considerably -- and not due to Fed policy (12:18);
• There have been some big adjustments in the labor market post-pandemic (16:47);
• The 'wealth destruction effect' from tech stocks selling off is negligible (27:35);
• One point of concern: the deficit. This is where the implosion in wealth could affect things (32:59);
• The coming budget battle in Congress is worth paying attention to (34:41);
• The 'higher for longer' Fed interest rate hike thesis has gained traction. What this means for stocks (43:27);
• Inflation: Expect 3.5% CPI by mid-year (47:37).

More Information on the Guest

• Substack: Ironsides Macroeconomics;
• Twitter: @BarryKnapp.

Not intended as investment advice.

This episode is brought to you by Merk Research. Visit this link to take advantage of the offer presented on the podcast. To listen without ads or announcements, become a premium subscriber, which gets you access to a host of other benefits, including (but not limited to) the new Daily Contrarian podcast, released every market day morning by 7:00 a.m. eastern time.

Gav Blaxberg of WOLF Financial joins the podcast to discuss his views of the retail investors who have been pushing stocks like GameStop and more recently AMC. Blaxberg's research on this phenomenon predates the GameStop brouhaha. He has reasons to believe retail investors have been gaining in power and will be a growing force to reckon with when it comes to major movement, especially among small cap stocks.

Content Highlights: (Spotify users can click on the timestamp to link to the segment in question)

• What happened with GameStop was not an anomaly. Expect more where that came from (3:47);
• The trend did not start with GameStop, but can be traced to the 'Kodak movement' (5:07);
• Institutions still have more capital and control more of public companies' shares. How are smaller retail investors able to move these stocks? Even small caps? (8:23);
• The return of retail investors, which hasn't been seen since the heady days of the dot-com doom, can be traced in large part to commission-free trades (10:37);
• Quick segue after the guest mentions he gets 9% APR on his blockchain-linked savings account -- in USD (14:25);
• Background on the guest and how he came to start WOLF Financial (20:42);
• Twitter remains the most actionable social media platform when it comes to moving stocks. Everything else is a distant second. Yes, even Reddit (32:30);
• So what stocks are popular on social media right now? It's still growth stocks. Some examples (36:34);
• What stocks have potential but don't do enough (or anything on social media) and could boost their popularity with retail investors if they changed this? Some examples (39:34).

More Information on the Guest

• Wolf Financial website: WOLF.Financial;
• Wolf Financial Twitter: @WOLF_Financial;
• Personal Twitter: @GavBlaxberg.

Not intended as investment advice.

This episode was recorded on Jan. 27 and aired for premium subscribers on Feb. 2, without ads or interruptions. To become a premium subscriber and take advantage of a host of other benefits (including the Daily Contrarian briefing and podcast), sign up through Substack or Supercast. Dave Fishwick joins the podcast to make the argument for investing in the Turkish lira after it dropped half its value versus major currencies. The appeal is not just the value but the carry, resulting in the equivalent of 30% to 40% annual interest income. To Fishwick and his team, the trade is not only contrarian but an example of the type of idiosyncratic idea that has no correlation to other parts of the portfolio. The conversation is not limited to Turkey but expands to the U.S., China, and other emerging markets during the second half of the episode.

(This podcast was recorded in person at the iConnections conference in Miami. The acoustics were not ideal and there is some background noise as a result. Apologies for the inconvenience.)

Content Highlights

• The macroeconomic policy experiment in Turkey, where the country's central bank took the highly unorthodox step of combating a sovereign crisis by reducing interest rates. The Turkish lira went into freefall as a result (2:24);
• The lira looks attractive on a real basis, but the real appeal comes in the so-called carry, an often-forgotten part of foreign exchange markets. How this works (3:29);
• Some background on the strategy by the Central Bank of the Republic of Turkey, which is on the surface frightening. But therein lies the appeal (5:22);
• Why buy the Turkish lira when the CBRT is cutting rates while the Fed is raising rates? (11:07);
• If the CBRT succeeds with this experiment, could other emerging market countries follow its example? The strategy is not unprecedented... (13:15);
• Background on the guest (16:19);
• Fishwick's view on current markets. The market has re-rated asset classes, despite upbeat economic news (18:43);
• The present situation may appear bizarre, but it not without parallel. Why it's hard to be bearish for the longer-term (21:48);
• Other areas of the world that are interesting for investors, especially contrarians (24:11);
• There are "some similarities" with what happened the last time the Fed entered on a sustained interest hiking campaign (2004 to 2007), but many differences. The key? Watch the inflation data, though the Fed's record on engineering soft landings is poor (27:05).

More Information on the Guest

• Website: MandG.com;
• LinkedIn.

Siddarth Singhai of Ironhold Capital joins the podcast to discuss his views of semiconductor manufacturers and auto parts suppliers. He also shares his bullish views on industry sectors in his native India.

Content Segments (Spotify users can click on the timestamp to link to the section directly):

• Singhai's look at the macro situation with COVID (3:27);
• The cyclical nature of the semiconductor industry (5:59);
• Long-term prospects are "fantastic," and the macroeconomic environment should allow for the opportunity to build positions (8:06);
• Electrical cars will provide a tailwind to auto manufacturers (10:40);
• Background on the guest (13:52);
• The most profitable industry in India (17:19);
• Favorite ideas in semiconductor suppliers (27:04);
• Favorite ideas in automotive suppliers (32:14).

More Information on the Guest:

• Ironhold Capital is a value-based hedge fund in New York focused on leveraging both the Indian and U.S. markets. Its priority is to preserve capital, which is accomplished by buying high quality businesses with no leverage for cheap, followed by layers of risk management.
• Website: IronholdCapital.com
• YouTube Channel: Leaders in Business and Investing
• Podcast: via Spotify and Apple Podcasts

Not intended as investment advice.

Jonathan Boyar, principal at Boyar Value Group, joins the podcast to discuss the merits of investing in the public equity of professional sports teams.

Boyar is specifically bullish on the Liberty Braves Group (NASDAQ: BATRA), a tracking stock that consists of the Atlanta Braves Major League Baseball team and real estate development.

Content Segments (Spotify users can click on the timestamp to link to the segment directly):

• Sports teams as investments and two that have the guest's attention at present (3:34);
• Liberty Braves discussion (5:50);
• Why now? "You're at a point of maximum pessimism," with MLB specifically (8:24);
• The opportunity brought by sports gambling (14:06);
• Background on the guest (16:38);
• The Boyar Value Group's investing style (19:15) and recent purchase of Twitter (20:50);
• The makeup of the firm's portfolio and how it deviates from the S&P 500 (24:22);
• The opportunity with Hanesbrands (26:40).

For more information on the guest:

• Website: BoyarValueGroup.com
• Twitter: @BoyarValue
• Video of presentation at Contrarian Investor Virtual Conference No. 2

Not intended as investment advice.