China’s Economic Risks – How Might They Impact the Global Economy and Markets with Brendan Ahern of KraneShares

This week on Weighing the Risks we will revisit the topic of China, arguably the most unloved market in the global economy. Are the risks properly appreciated, or are the risks even deeper than most investors believe? What might these risks mean, not only for the Chinese economy and markets, but also for the world? Learn more at orion.com.

Key Takeaways

• [03:49] - Brendan’s professional background and what he focuses on, specifically, at KraneShares.
• [06:07] - People are attempting to point out a lot of similarities between the current real estate issues in China and the Great Financial Crisis in America. Is this a fair comparison to make in Brendan’s opinion?
• [08:46] - Recently we’ve started to see some of the big name CEOs re-emerge from their seemingly self-imposed isolation – is this a good sign or a false spring? Should we have concerns about government intervention like many are arguing?
• [15:25] - Does the current economy in China look like it might continue a slow descent similar to Japan’s economic doldrums of the 80s?
• [19:40] - What might be the effects on the relationship between the US and China based on the outcome of our upcoming presidential election?
• [22:54] - What might be some catalysts to turn the Chinese market around and get American investors engaged again?
• [26:12] - Some potential market scenarios and Brendan’s thoughts on their plausibility.
• [35:42] - What are some other risks investors should be thinking about right now?

 Quotes

[09:40] ~ “China does need the West, they need foreign investors [and] foreign corporations. They’re not like a Russia, they can’t afford to be ostracized.”

[17:42] - "We outsource our pollution to these people in Asia. Raise your hand if you want a rare earth processing plant down the road, or a coal smelter…not in my backyard is unfortunately a pretty powerful incentive. What our consumption does to China and a lot of these countries is terrible." ~ Brendan Ahern

[36:42] - "My worry is more [about] this “China McCarthyism in DC. It’s very detached from [the]  economic reality of how intertwined our economies are. That’s my bigger risk, is a political [one]...and you know, it takes two to tango, so it could be from the China side, not just the US political side, that some of this just gets a little out of hand. [Though] I’d argue there’s clearly an effort at a high level to stabilize things, which is necessary. " ~ Brendan Ahern

Links

• Brendan Ahern on LinkedIn
• KraneShares
• China Last Night

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s)

Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 0482-OAT-3/1/2024

This week on Weighing the Risks we take a closer look at Bitcoin ETFs with Matt Hougan and Hunter Horsley, the CIO and CEO of Bitwise Asset Management respectively. Matt and Hunter bring their unique experience to bear on questions about catalysts for  Bitcoin’s growth, Bitcoin “halving,” the pros and cons of owning Bitcoin itself vs. BITB, the tax implications of Bitcoin ETFs and much more. Learn more at orion.com.

Key Takeaways

• [02:28] - How does the team at Bitwise define risk and how do they think that advisors and investors should think about it?
• [04:20] - The current outlook for Bitcoin and what key factors should be considered when valuing Bitcoin.
• [04:50] - Potential catalysts for Bitcoin’s growth in the coming year(s).
• [06:40] - Other than reducing supply, what are some additional talking points around Bitcoin “halving” and why does this happen in the first place? 
• [09:20] - How will the Bitcoin ETFs affect the broader ETF industry and how large of a market opportunity might exist for Bitcoin ETFs?
• [11:26] - What sets apart the Bitwise Bitcoin ETF lineup from others?
• [15:30] - What are the tax implications for an ETF of this nature?
• [18:40] - What new strategies or products might Bitwise roll out going forward?
• [21:35] - What are the pros and cons of owning Bitcoin vs. BITB?
• [27:28] - How to approach portfolio sizing and rebalancing with Bitcoin ETFs.
• [33:00] - A few potential market outcomes and how realistic they might be.
• [43:30] - What other risks should investors be thinking about right now? 

 Quotes

[04:41] - "Historically Bitcoin has had multiple year bull markets, usually three strong  years before each pullback. When we look at the market we see a lot of catalysts that would suggest that there is reason for optimism both in the short and long term." ~ Matt Hougan

[15:30] - "Life gets a lot simpler with these Bitcoin ETFs. So, they are technically widely held grantor trusts and you get a 1099 from the brokerage or the custodian, so it’s a really simple story and I think that it is a huge advantage for advisors." ~ Hunter Horsley

Links

• Matt Hougan on Twitter
• Hunter Horsley on Twitter
• “The Final Countdown” by Europe
• “Patience” by Guns N’ Roses
• Bitwise Asset Management
• Crypto Market Quarterly Review (Q4)
• Crypto Library

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s)

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 0243-OAT-2/1/2024

The healthcare industry is in a renaissance of innovation, marked by groundbreaking treatments, drug development, and advances in medical technology revolutionizing patient care. While challenges like cost, political headwinds, and workforce constraints persist, the overall trajectory remains positive and presents many opportunities for investors.

In this episode, Rusty and co-host Nick Codola, Senior Portfolio Manager at Brinker Capital Investments, are joined by Michael Taylor, Portfolio Manager at Simplify Health Care ETF (PINK). For the past two decades, Michael managed hedged and factor-neutral portfolios with a gross amount of over $ 1 billion at funds. He is regarded to have built and run one of the best-performing healthcare funds on Wall Street. Previous to portfolio management, Michael worked as a scientist during the 1990s, developing predominantly viral-vector-based gene therapeutic drugs for the bio/pharma industry. 

Michael talks with Rusty and Nick about the current landscape of the healthcare industry, highlighting the advancements in drug development and medical technology. He emphasizes these innovations' positive impact on patient outcomes and quality of life. Michael also addresses the risks and challenges facing the healthcare sector, such as the potential impact of weight loss drugs on the economy and government spending.

Key Takeaways

• [01:44] - Michael's background and work at Simplify Health Care ETF (PINK).
• [02:52] - How Michael defines risks.
• [08:04] - Michael's overall assessment of the healthcare landscape.
• [10:58] - Probability of COVID to reemerge.
• [17:20] - Michael's take on weight loss drugs.
• [24:01] - The government's impact on healthcare.
• [31:32] - The demand for healthcare workers.
• [35:51] - Underinvestment in healthcare sector.
• [39:19] - Michael's thoughts on the market's base case scenario.
• [42:03] - Good case scenario for healthcare.
• [49:04] - Bad case scenario for the healthcare market.

Quotes

[10:04] - "What's happening in the world of healthcare is that there are so many novel, potent, sophisticated drugs being developed that are really changing the quality of life of humans in a gigantic way. So, the healthcare landscape is having a renaissance, and it's not going to stop. If anything, it accelerates." ~ Michael Taylor

[27:16] - "Having a single-payer government healthcare system would very much be the absolute worst thing that could possibly happen to patients." ~ Michael Taylor

[47:22] - "There's no such thing as right or wrong in investing. It's just 'how can I generate the best returns for our investors?' That's the most important thing." ~ Michael Taylor

Links 

• Michael Taylor on Twitter
• Simplify Health Care ETF (PINK)
• Simplify Asset Management
• Funkytown by Lipps
• Novo Nordisk
• Eli Lilly
• Pfizer
• Medicare
• Medicaid

Connect with Us

• Meet Rusty Vanneman, Orion's Chief Investment Officer
• Check Out All of Orion's Podcasts
• Power Your Growth with Orion

Disclosure

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

3365-OAT-12/27/2023

As nations grapple with shifting power dynamics, territorial disputes, and evolving international relations, geopolitical risks loom over the global economy and financial markets. From the threat of trade wars disrupting international commerce to the intricacies of diplomatic tensions altering investment landscapes, each scenario poses unique challenges and opportunities. 

In this episode, Rusty talks with Lauren Goodwin, Economist and Portfolio Strategist at New York Life Investments, focused on cross-asset and international analysis. In her role, she and her team are responsible for research, macro and asset class views, asset allocation, and thought leadership. Throughout her career, Lauren has linked the macroeconomic environment to investment decisions, whether in banking, corporate strategy, policymaking, or asset management. Lauren has extensive quantitative and forecasting experience and prides herself on translating that experience into actionable insight.

Lauren talks with Rusty about the current geopolitical concerns, with a special emphasis on the Middle East and how they might impact the economy and markets. Lauren also provides insights on various scenarios, including the Israel-Hamas conflict, the war in Ukraine, US-China relations, and their potential impact on stock, bond, and commodity markets. The conversation highlights the importance of focusing on real policy changes and diversification in the face of geopolitical risks.

Key Takeaways

• [01:34] - Lauren's professional background.
• [03:56] - Lauren's thoughts on the geopolitical situation in the Middle East.
• [05:34] - The impact of the Middle East conflict on the stock and commodity markets.
• [07:57] - The war in Ukraine and its implications.
• [10:00] - US-China relations and the risk of China invading Taiwan.
• [12:55] - Lauren's advice to advisors about the upcoming presidential election.
• [16:12] - What advisors should consider when it comes to geopolitical risks.
• [19:04] - Lauren's response to Rusty's base case scenario.
• [21:18] - Lauren's thoughts on Rusty's good case scenario.
• [23:31] - Lauren's take on Rusty's bad-case scenario.
• [24:55] - How portfolios are impacted by globalization.

Quotes

[04:27] - "Be patient as geopolitical events are developing. Short-term moves are likely. But it's the underlying trend that can be obscure at first and really tends to drive an optimal asset allocation." ~ Lauren Goodwin

[16:45] - "When it comes to setting forward our scenarios for 2024, a lot of what we're thinking about are plain old economic risks that impact the market day in and day out. These disruptors can be very tempting to think a lot about. But really, what it comes down to for investors is focusing on action, not distraction." ~ Lauren Goodwin

[26:26] - "When you think about the most complex global supply chains like technology, energy, and even global finance, no one country is going to be self-sufficient in these major opportunity sets. We'll always have to work together or rely on one another in some form or fashion." ~ Lauren Goodwin

Links 

• Lauren Goodwin on LinkedIn
• Lauren Goodwin on Twitter
• New York Life Investments
• Fool for Love by Lord Huron
• Market Matters Podcast

Connect with Us

• Meet Rusty Vanneman, Orion's Chief Investment Officer
• Check Out All of Orion's Podcasts
• Power Your Growth with Orion

Disclosure

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

3133-OAT-11/17/2023

People moving across international borders has long been a defining characteristic of human society, shaping cultures, economies, and societies in multifaceted ways. As economic growth is closely connected to immigration, highlighting the potential benefits of a dynamic workforce, discussions on immigration and its impact on the economy and financial markets provide valuable insights for investors and financial advisors.

In this episode, Rusty talks with Donald Rissmiller, Chief Economist at Strategas. Don has directed the firm's economic research efforts since 2006. He oversees Strategas' thematic research as well as high-frequency econometric forecasting. Don is frequently quoted in the financial press, and his research has been consistently recognized by Institutional Investor magazine in its annual All-America Research Survey.

Don joins Rusty to talk about the potential impact of immigration on the economy and financial markets. They explore the connection between immigration and economic growth, the current state of the labor market, and the implications for inflation and interest rates. In addition, Don shares his insights on potential scenarios and risks related to immigration.

Key Takeaways

• [01:56] - Don's professional background.
• [02:41] - How Don defines risk.
• [06:22] - The connection between immigration and the economy.
• [08:49] - Don's assessment of the current labor market situation.
• [09:53] - Don's assessment of inflation, the federal reserve, and interest rates.
• [12:39] - Expectations for economic growth and corporate earnings growth.
• [15:00] - Other things advisors and investors should consider regarding the economy.
• [19:04] - Unique considerations that make the current business cycle different.
• [23:48] - Rusty's base case scenario and Don's opinion on it.
• [26:00] - Rusty's good case scenario and Don's response to it.
• [28:17] - Rusty's bad case scenario and what Don has to say about it.
• [30:10] - Other risks investors should be thinking about.

Quotes

[07:19] - "If we think about population or workforce growth coming domestically or through immigration, that, in the long run, will help support potential GDP growth." ~ Donald Rissmiller

[07:34] - "Having a dynamic economy could create better productivity growth, exchange of ideas, greater innovation, and greater invention." ~ Donald Rissmiller

[09:22] - "The domestic labor market is very strong, even leaning towards overheating at the moment. Because it's creating wage pressures, which are showing up in average hourly earnings, the employment cost index, and other wage measures." ~ Donald Rissmiller

Links 

• Donald Rissmiller on LinkedIn
• Donald Rissmiller on Twitter
• Strategas
• The Planet Suite, Op.32: Jupiter
• Jason Trennert
• Nicholas Bohnsack

Connect with Us

• Meet Rusty Vanneman, Orion's Chief Investment Officer
• Check Out All of Orion's Podcasts
• Power Your Growth with Orion

Disclosure

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

2858-OAT-10/17/2023

The real estate market assumes a pivotal role in the economic landscape, affecting not only the financial well-being of homeowners but also the stability and growth of the entire financial system. However, the industry has experienced significant shifts in recent years, revealing vulnerabilities that could have far-reaching effects on the broader economy.

In this episode, Rusty talks with Marc Pfeffer, Director at the Imperial Fund and Co-Founder of M2M Capital. Marc has more than 35 years of experience in the investment management industry. Before co-founding M2M Capital, Marc was the managing director of S64, focusing on private markets capital raising by connecting alternative managers with asset managers, insurance companies, pensions, endowments, foundations, and wealth managers.

Marc joins Rusty to discuss the potential scenarios and risks in the residential real estate market. With extensive experience in the real estate industry, Marc explores the current state of the housing market, its vulnerabilities, and its potential impact on the economy and financial markets. 

Key Takeaways

• [02:51] - Marc's professional background.
• [04:12] - Marc's endeavor beyond the workplace.
• [05:05] - How Marc defines risk.
• [06:58] - The current state of the housing market.
• [08:58] - The vulnerability of the residential real estate market.
• [11:21] - Marc's take on the bond market, mortgages, and inflation.
• [16:17] - The most effective way to invest in real estate today.
• [17:28] - Marc's view on the future of the overall economy.
• [21:35] - How the government can address the housing crisis.
• [24:11] - Rusty's base case scenario and Marc's response.
• [26:37] - Marc's base case scenario for housing prices and market impacts.
• [35:32] - Marc's thoughts on Rusty's bad-case scenario.
• [39:28] - The other risks Marc sees in the current economy.

Quotes

[10:53] - "It's very difficult to say what a true housing market is because there's virtually no inventory." ~ Marc Pfeffer

[22:03] - "If you want to get inventory up and get people to move on to housing, you treat your mortgage as an asset, almost taking it and making it portable." ~ Marc Pfeffer

[31:03] - "Stocks can do well without housing, but the economy is very difficult to do well without housing." ~ Marc Pfeffer

Links 

• Marc Pfeffer on LinkedIn
• Imperial Fund
• M2M Capital
• My Way by Frank Sinatra
• Goldman Sachs
• S64 Capital
• J.P. Morgan
• Portfolio Risk Analytics | Orion Risk Intelligence

Connect with Us

• Meet Rusty Vanneman, Orion's Chief Investment Officer
• Check Out All of Orion's Podcasts
• Power Your Growth with Orion

Disclosure

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

2676-OAT-9/25/2023

Energy, often dubbed as the lifeblood of industries, holds the power to shape economies. However, the surge in energy prices has the potential to cast a shadow over the stock and bond markets, sending ripples through the intricate web of financial systems.

In this episode, Rusty talks with Jake Hanley, Managing Director and Senior Portfolio Specialist at Teucrium. Jake has an intimate understanding of investment strategies made available through Teucrium's funds. He is partly responsible for certain fund-related daily operating procedures and acts as an alternate for specific dual control functions.

Rusty and Jake weigh potential scenarios and risks associated with rising energy prices. With over a decade's experience in financial services, Jake also shares Teucrium's current macroeconomic outlook, how to mitigate the negative effects of rising energy prices, and the other risks investors should know about.

Key Takeaways

• [03:11] - Jake's background and his work at Teucrium.
• [05:02] - Jake's definition of risk.
• [06:52] - Teucrium's current macroeconomic outlook.
• [08:30] - The potential impact of rising energy prices on the economy and markets.
• [10:31] - Jake's outlook on other commodity markets, such as agriculture and precious metals.
• [13:04] - How to mitigate the negative effects of rising energy prices.
• [15:11] - How advisors allocate commodities in their portfolios.
• [17:16] - Other potential risks to consider, such as the situation in Russia and Ukraine.
• [19:13] - Base case scenario on rising energy prices.
• [22:06] - Good case scenario on rising energy prices.
• [24:44] - Bad case scenario on rising energy prices.
• [27:19] - Other risks investors should be aware of.

Quotes

[08:13] - "The foundation for all capital markets is international trade currency and sovereign debt. And as you have quakes and tremors in those markets, it's going to reverberate throughout all asset classes. That's why the broad macro view right now is volatility." ~ Jake Hanley

[09:07] - "Energy is the lifeblood of the industry. So higher energy prices either mean lower profit margins for corporations producing goods and services or higher consumer prices." ~ Jake Hanley

[21:57] - "Energy prices moving up can act as a cap for future economic growth. Higher prices can cure high prices." ~ Jake Hanley

Links 

• Jake Hanley on LinkedIn
• Jake Hanley on Twitter
• Northeast Kingdom by Will Evans
• Teucrium
• Teucrium ETFs on Twitter
• Vermont Flood Disaster Relief (Teucrium's Matching Gift Program)
• Ameriprise Financial
• Merrill Lynch
• Jackson Hole Economic Symposium

Connect with Us

• Meet Rusty Vanneman, Orion's Chief Investment Officer
• Check Out All of Orion's Podcasts
• Power Your Growth with Orion

Disclosure

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

2356-OAT-8/25/2023

Key Takeaways

• [02:59] - Hannah and Xavier's career backgrounds and how they got to Capital Group.
• [04:14] - Xavier's definition of risk.
• [06:56] - A broader macro outlook from Capital Group.
• [12:22] - What commercial real estate is and its challenges today.
• [18:50] - How commercial real estate problems affect the broader economy.
• [21:00] - Potential opportunities and catalysts for unlocking value in commercial real estate.
• [22:51] - What makes up the residential real estate landscape?
• [23:45] - The challenges facing residential real estate today.
• [26:13] - Xavier's outlook on residential real estate and its economic impact.
• [29:31] - Base case scenario for mortgage rates, home prices, and commercial real estate.
• [35:00] - Good case scenario for mortgage rates, home prices, and commercial real estate.
• [37:59] - Bad case scenario for mortgage rates, home prices, and commercial real estate.
• [44:14] - Other risks investors should be aware of.

Quotes

[09:27] - "If you can survive a run on the banks and banking crisis in March and come out the other side relatively unscathed, that's a good outcome." ~ Xavier Goss

[19:05] - "As long as the problems in real estate are concentrated mostly on office loans, there won't be a broad spillover into the economy." ~ Hannah Greene

[24:22] - "If you own a home with a 2% or even a 3% mortgage, it's hard to pull the trigger and sell it because you don't know what home you'll purchase because there isn't that much supply out there. And you can't replicate that mortgage rate, so your payments are up two to three times what you were paying before." ~ Xavier Goss

Links

• Xavier Goss on LinkedIn
• Hannah Greene on LinkedIn
• Capital Group
• Shake It Off by Taylor Swift 
• One Love by Bob Marley
• Fannie Mae
• Freddie Mac
• Insights | Capital Group

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 2048-OAT-7/28/2023

AI has become a buzzword that dominates the headlines, sparks conversations, and captures the imagination of both industry experts and the general public. However, amidst the seemingly widespread mentions of AI, questions arise regarding the existence of a potential bubble burst in AI stocks. As the debate intensifies, weighing the possible risk and scenarios surrounding the AI hype becomes crucial. 

In this episode, Rusty talks with Dan Russo, Portfolio Manager at Potomac Fund Management. Dan has been in the securities industry for 23 years. His experience includes a wide range of institutional investors, working with them to perform fundamental, technical, and quantitative research to navigate the market and generate actionable trading and investment ideas. At Potomac Fund Management, Dan conducts technical and quantitative analysis, structuring portfolios of ETFs based on this analysis and providing ongoing written research for the firm's financial advisor client base.

Dan and Rusty weigh some potential scenarios and risks from the possibility of a bubble burst in artificial intelligence stocks and future scenarios for the stock market, technology stocks, and interest rates.

Key Takeaways

• [02:31] - Dan's career background and how he got to Potomac Fund Management.
• [03:38] - How Dan defines risk.
• [06:38] - Is AI-related stock overvalued?
• [10:07] - Are there signs of speculative behavior in AI investments and indications of a herd mentality? 
• [13:16] - How sustainable is the AI industry's growth trajectory? 
• [15:30] - Will artificial intelligence increase investment companies' efficiency and productivity?
• [17:44] - How AI impacts the markets over time and how investment managers manage their portfolios moving forward.
• [20:44] - Rusty's risk and scenario on AI's impact on U.S. stocks, technology stocks, and interest rates. 
• [22:25] - Dan's perspective on Rusty's first base-case scenario.
• [24:58] - Rusty's good case scenario for AI stocks.
• [30:03] - What other risks should investors think about?

Quotes

[12:53] - "There's probably a bubble in media mentions of the phrase AI. But I can make a compelling case that this is not super crowded at this point. And I wonder if I would call it a bubble yet." ~ Dan Russo

[19:10] - "If you are a fundamental investment manager or stock picker, keep doing your job. Keep analyzing these companies from the bottom up and then just incorporate AI into that analysis process." ~ Dan Russo

[30:30] - "Investors should also think about regulatory risks. We have no idea how governments are going to react to the widespread adoption of artificial intelligence." ~ Dan Russo

Links 

• Dan Russo on LinkedIn
• Dan Russo on Twitter
• Potomac Fund Management
• Can't Stop by Red Hot Chili Peppers
• Global X ETFs
• Manish Khatta

Connect with our hosts

• Rusty Vanneman

Subscribe and stay in touch

• Apple Podcasts
• Spotify
• Google Podcasts

Disclosure

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

1696-OAT-6/21/2023

The banking sector has long been considered a cornerstone of economic stability. However, the 2023 banking crisis cast a dark shadow over financial markets. This raised concerns about bank stability, stock markets, and the economy's overall health. As analysts and investors brace themselves for potential impacts, various scenarios are explored, ranging from cautious optimism to gloomy apprehension.

In this episode, Rusty talks with Kevin Preloger, Portfolio Manager at Janus Henderson Investors. In his role, Kevin co-manages the U.S. Mid Cap Value and U.S. SMID Cap Value strategies. Kevin joined the firm in 2002 as a financial services research analyst. 

Kevin and Rusty weigh some potential risks and scenarios from the 2023 banking crisis and possible future scenarios for the stock market, bank stocks, and interest rates. They also talk about how the banking crisis might impact the economy and the markets, the possible baseline expectation, what's a good case scenario, and what could be a bad one.

Key Takeaways

• [02:32] - How Kevin got to Janus Henderson Investors.
• [04:17] - Kevin's definition of risk.
• [06:57] - Why we have a banking crisis.
• [10:37] - The government's response to the current banking crisis.
• [15:11] - Kevin's outlook on the current banking crisis.
• [17:04] - How advisors should manage investment portfolios in light of the current banking crisis.
• [21:31] - Kevin's perspective on bank stability for the next 12 months.
• [24:00] - Kevin's take on the economy doing better.
• [26:48] - A worst-case scenario on the economy and the markets.
• [29:47] - The other risks investors should consider.

Quotes

[07:11] - "Interest rates were so low for so long. We had an issue in the late nineties with long-term capital management, Russian defaults, the tech wreck in 2000, the great financial crisis in 2008 and 2009, and here we are today. All these events in the last two decades have caused angst in the marketplace and destroyed a lot of capital." ~ Kevin Preloger

[08:19] - "The fuel on the fire was a fiscal policy that was too stimulative because the pandemic-related spending added to the issue. So interest rates, inflation, and regulatory and supervisory lapses are the things that might have been pointed out as issues in a banking crisis." ~ Kevin Preloger

[26:00] - "Any customer that's wobbling pre-pandemic was bailed out for two years with all the zero rates and fiscal stimulus. That's all gone away now. And if credit is contracting even more, the marginal borrower that's in a tough position before the pandemic is in a tougher position now." ~ Kevin Preloger

Links 

• Janus Henderson Investors
• Take The Money And Run by Steve Miller Band
• Peter Thiel
• J.P. Morgan
• Wells Fargo
• Orion's Risk Intelligence

Connect with our hosts

• Rusty Vanneman

Subscribe and stay in touch

• Apple Podcasts
• Spotify
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Disclosure

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

1339-OAT-5/15/2023