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Grant Williams on Bubbles, Power Struggles and Inflation

DoubleLine Capital, Released on 2/11/21 (Recorded on 2/8/21)

Amid market bubbles spurred by massive deficit spending and central bank monetary stimulus, Mr. Williams foresees the need to both hold cash against the ultimate bursting of those bubbles and to stress-test portfolios for inflation scenarios. “I wouldn’t shy away from starting to nibble at inflation trades even though they may not work for the near term,” he says. The prospective return of inflation “is arguably the most important secular change that we have to deal with in the last 40 years.”

Another secular change to prepare for, according to Mr. Williams, is value stocks breaking their long underperformance relative to growth and momentum stocks. “A few value managers that I’ve spoken to are starting to see people making inquiries, they’re starting to see inflows. That tells me that there could be a tremendous tailwind to that trade because value is so unloved at the moment.… You just have this beautiful setup where there are some great companies and great sectors that are really, really downtrodden and sold-out, and nobody wants to own them.”

Among the greatest and most-underappreciated risks in the present environment, Mr. Williams points to societal and political volatility as well as market volatility. “We are at a time where suppressed volatility is everywhere, and anytime you suppress volatility, at some point, … it’s going to explode.” After decades of the hollowing out of the middle class amid wealth creation that has privileged the people fortunate to be born in the 1960s, the millennial generation, whose leading edge is approaching age 40, is on the cusp of taking political power from the baby boomers. Having missed out on the wealth creation of the last two decades, he expects millennials elected to office to “make things right for their generation” by enacting policies redistributing that wealth.

Grant Williams is the portfolio manager of the Vulpes Precious Metals Fund and strategy advisor to Vulpes Investment Management in Singapore. Grant has 28 years of experience in finance on the Asian, Australian, European and US markets and has held senior positions at several international investment houses, including Robert Fleming, UBS and Credit Suisse. Since 2009, he has also been writing the popular investment newsletter Things That Make You Go Hmmm…

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John

Navelney is no threat to Putin. He is around 1% of voters. By the way- he hates immigration and he like that Crimea is part of Russia. Now how to the propagandists in the West not tell you that.. He is of use to the narrative here . How come you never hear of why he is being jailed? Look it up. He would get more time in the West.

Really Silly Idea

Yep, all The Russia hate is left over from the cold war propaganda. Russia is not the USSR. Any way looks to me like Putin is a bad azz, and runs the country well; Very little or no debt, stockpiling PM’s and becoming self sufficient. Actually I just bought a Russia ETF as a value play on both energy and Russia being so hated.