Interview: The Julia La Roche Show with Julia La Roche.

I had the pleasure of speaking with Julia La Roche on 11/9/23 for the first time. We covered not just Macro, but also bigger-picture Investing concepts like Long/Short Duration and Exit Strategies.

YouTube:

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Show Notes:

Julia started by asking me to set the table with my Macro view, and I began by talking about how Oil may have STARTED the Inflation Conflagration, but it’s not necessarily SUSTAINING it:

I go through the “The Four Horseman of US Economic Resilience” and why our “Vodka/Red Bull” Economy will likely lead other Central Banks to OUT-DOVE the Fed ultimately:

Although we recorded this session on 11/9/23 (before the cooler-than-expected CPI), I am still of the opinion that Structural underpinnings for the “stickiness” of this Inflation are leading to misplaced ebullience for an imminent Fed Pivot.

I note that the “omniscient” Yield Curve has been consistently wrong over the last 2 years:

Oil is the GLOBAL Canary in the Coal Mine and is showing cracks:

On the Twin Wrecking Balls of the USD and Oil:

The USD Wrecking Ball has been hiding in plain sight because of EUR strength, but it has been very evident in Asia for quite some time:

On being Long-Term Bullish but Short-Term BEARISH Oil.

This is a deep dive on my nuanced views:

Here is my April, 2022 thread in which I first turned Bearish on Oil (after being wildly Bullish at the beginning of 2021):

Why I think Geopolitical Risk for Oil is DOWN and why this is NOT like the 1973 dynamic:

Remember the Trump Rug-Pull of Q4’18? I sure do:

We then moved on to a detailed discussion about Duration, in which I referenced this Thread and why I am favoring Short Duration Assets over Long Duration Assets:

I referenced the Bear Steepening cycle of the late 1970’s that culminated in a BULL STEEPENING in 1982 once Inflation Expectations became embedded:

I talked about the conspicuous ABSENCE of any acknowledgment of the forward impact of the current STRIKES on Finished Goods Inflation:

My favorite part of the conversation came at the end, where we talked about the importance of EXIT STRATEGIES in Portfolio Construction and how my current favoring of Short Duration Assets plays into Exit Strategies that do not rely on the “Greater Fool” to provide a profitable Exit:

We ended by referring to this new Mental Models Thread I just put out. It’s the most powerful Mental Model yet, imho: