Introducing Pod Street WeekCast
Hi There,
Welcome to the Pod Street Week Podcast, hosted by Sally and Harry, who unpack the latest podcasts every week and distill the experts’ key investment takeaways, market insights, and standout stories shaping today’s investment landscape.
Sally and Harry can get you up to speed in around 15 minutes. Whether you’re commuting, working out, or just prefer listening to reading, it’s the same Pod Street Week you know — now in audio form.
We’d love to hear what you think. Your feedback helps us make every episode better.
Happy listening,
The Pod Street Week Team
THIS WEEK · 15 PODCASTS · WEEK OF MAY 15, 2026
This week we bring you fifteen exceptional podcasts spanning Michael Pinto’s unsparing macro warning that credit breaks first before stocks and real estate — and his stagflation positioning playbook, Dan Drifus on the mother of all commodity supercycles and his high-conviction picks in energy, copper, silver, and aerospace, Albert Edwards making the case that SocGen’s top-ranked strategist sees a return to double-digit inflation through fiscal dominance, former Kansas City Fed President Thomas Hoenig on Kevin Warsh’s impossible inheritance and the inevitable decline of the dollar, financial historian Edward Chancellor on why the AI capex boom rhymes with the dotcom railroad mania and where the real anti-bubbles are, Luke Groman on the mother of all supply disruptions and his $15,000 gold base-case through the lens of monetary system reordering, housing analyst Melody Wright on the 35–50% housing correction she sees playing out over years with the first 10–12% wave beginning now, Michael Turpin — crypto’s godfather — shorting Bitcoin with a target in the 40s-to-50s before the real super cycle resumes, Dan Rohinton on why AI is killing buy-and-hold investing and why he is reducing time horizons from ten years to two or three, Geopolitical Futures on geoeconomics as the framework for understanding how economic structures shape state power, Marc Rubinstein’s deep dive into why 2008 comparisons are wrong — and where private credit, Jane Street, and insurance create the real latent risk, Gary Shilling warning of a 20–30% correction in stocks driven by a credit-led recession with no economic foundation supporting current valuations, George Noble on retiring savers’ exposure to the most dangerous misallocation of capital in market history and his miners conviction, Adam Rozencwajg on the oil market’s structural tightness, shale’s plateau, and why the Hormuz closure has accelerated a multi-year commodity bull market, and Jeremy Grantham on why AI will not sustainably lift profit margins, why mean reversion still governs everything, and what investors should do about it. Each summary is designed to be immediately actionable — whether you are allocating capital, running a business, or simply trying to understand the forces reshaping the world around you. We hope you enjoy them.
THIS WEEK’S LINEUP
EP 1 Credit Breaks First, Then Stocks and Real Estate — Michael Pinto — Pinto Portfolio Strategies Founder & President
EP 2 The Mother of All Commodity Supercycles — Dan Drifus — Borite Capital; Amber Kanwar — In The Money Host
EP 3 Why SocGen’s Global Strategist Sees Double-Digit Inflation Coming Back | Odd Lots — Albert Edwards — Société Générale Global Strategist
EP 4 The Inevitable Decline of the Dollar — Dr. Thomas Hoenig — Former Kansas City Fed President & FDIC Director
EP 5 He Wrote the Book on Bubbles | On If AI Is Different — Edward Chancellor — Financial Historian & Author, Devil Take the Hindmost
EP 6 The Mother of All Supply Disruptions & Why Gold Will Go ‘Much Higher’ — Luke Groman — Forest for the Trees Founder
EP 7 35–50% Housing Correction Needed, First Wave 10–12% Coming — Melody Wright — M3 Melody Substack Author & Housing Analyst
EP 8 Crypto’s ‘Godfather’ Is Shorting Bitcoin, Here’s His Downside Target — Michael Turpin — Transform Ventures CEO & Bitcoin Super Cycle Author
EP 9 AI Is Killing Buy and Hold Investing — Dan Rohinton — IIA Global Asset Management
EP 10 How These Economic Structures Shape World Power — Antonia Colibasanu — Geopolitical Futures Senior Analyst
EP 11 Why 2008 Comparisons Are Wrong — And Where the Real Risk Lies — Marc Rubinstein — Net Interest Newsletter Author
EP 12 Legendary Economist Called 2008, Now Warns Stocks Could Drop 30% — Gary Shilling — A. Gary Shilling & Co. President
EP 13 What Happens Next Could Wipe Out Your Retirement, Warns Fund Manager — George Noble — Noble Capital Advisors Managing Partner
EP 14 — Energy Shock, Oil Markets, & the New Commodity Cycle — Adam Rozencwajg — Goehring & Rozencwajg Partner
EP 15 We Asked Why AI Won’t Boost Profits — and What It Will Do Instead — Jeremy Grantham — GMO Co-Founder
Full summaries with actionable insights and investment focus for each podcast follow on the pages below.
EP 1 - Credit Breaks First, Then Stocks and Real Estate
Michael Pinto — Pinto Portfolio Strategies Founder & President
Michael Pinto, founder and president of Pinto Portfolio Strategies, delivered one of the most comprehensive macro bear cases available on US asset markets today. Appearing on the Julia LaRoche Show, Pinto argued that the US is experiencing the most extraordinary period in central bank history — one in which the Fed has printed money on a scale never previously attempted, creating simultaneous bubbles in equities, credit, and real estate that are growing larger, not smaller. With the CAPE ratio at 42 (average: 17), total market cap at 230% of GDP (average: 90%), and private credit now at $2 trillion — larger than the entire subprime mortgage market before 2008 — Pinto’s model has entered sector five: stagflation. His current portfolio is structured accordingly.
Actionable Bullet Points
• The Triumvirate of Bubbles Will Break in Sequence — Watch Credit First: Pinto has studied crises for 35 years and his conclusion is that the sequence is invariable: credit fractures first, then stocks collapse, then real estate tumbles. Private credit at $2 trillion is the epicenter — larger than the entire subprime market — and he is already seeing fissures. Watch June redemptions in private credit funds as the canary. When credit spreads widen materially, move to net short.
• Stagflation Is the Base Case — Position Accordingly: Pinto’s five-sector inflation/deflation model has moved into sector five: stagflation. Own T-bills only for duration (zero belly-of-the-curve exposure), hold commodities — agriculture, precious metals, energy, uranium, alternative energy — and avoid all conventional equities. Do not own duration bonds. The model has moved here from sector three (stasis) driven by the Iran war energy shock.
• Gold and Silver at 6% of Portfolio — Ready to Toggle Higher: At sector five, Pinto owns gold and silver at a combined 6% of portfolio on top of a 5% physical gold baseline. He would only add meaningfully when nominal rates begin to fall — the optimal environment for precious metals. Current rising nominal rates cap the upside near-term. If the next recession triggers the Fed to expand its balance sheet toward $12 trillion, precious metals will ‘rip.’
• Energy and Uranium Are the Structural Stagflation Plays: Pinto moved into energy, agriculture, fertilizer, uranium, and alternative energy after the Iran war triggered the stagflationary environment. At full sector five conditions — which he expects to intensify — only energy and precious metals should be overweighted. Everything else, including equities, should be avoided or shorted.
• Private Credit Is Systemic — June Redemptions Are the Trigger to Watch: The $2 trillion private credit market is funded by primary dealers via private equity — it is the same pie as the banking system. Dodd-Frank pushed lending into the shadow system, but the shadow system is funded by the same banks. Jeffrey Gundlach warned about June redemptions on Julia’s podcast in March. Gate walls accelerate outflows — it is a death spiral. This is the epicenter of the credit crisis when it comes.
Investment Focus
Pinto’s framework is the clearest near-term bear case available. The actionable template: (1) hold T-bills and short-duration instruments for the bulk of the portfolio — avoid all duration, (2) own energy, uranium, agriculture, and precious metals as the stagflation commodity stack, (3) monitor credit spreads and private credit redemption activity as the leading indicator — when they widen, move net short, (4) own gold and silver at approximately 6% of liquid assets, with physical gold as a separate permanent allocation, (5) wait for Kevin Warsh to stop the covert $40 billion/month QE program as the trigger for market reality to reassert itself.
EP 2 - The Mother of All Commodity Supercycles
Dan Drifus — Borite Capital; Amber Kanwar — In The Money Host
Dan Drifus, founder of Borite Capital and a 25-year commodities specialist who trained at BMO and Goldman Sachs before striking out on his own, appeared on In The Money with Amber Kanwar for a comprehensive update on his commodity supercycle thesis. His framework — find the pinch points in the world’s biggest simultaneous capex cycles, own the companies that supply into them — has led him to concentrated positions in TSMC, Prairie Sky, Talon Energy, Carpenter Technology, and Skina Resources. His core message: the mother of all capex cycles in aerospace, grid infrastructure, AI data centers, and critical minerals is creating the best commodity investment opportunity in his career.
Actionable Bullet Points
• Prairie Sky Is the Best-Positioned Canadian Energy Investment in a Generation: US shale production has plateaued and will turn negative within months. Canada must fill the 1 million barrel per day gap that shale provided annually. Prairie Sky is a pure royalty structure — no capex, pure cash flow, pricing leverage to oil — with production that Drifus believes doubles over the next 10–15 years. If oil appreciates 3–5% annually and the share count halves through buybacks, the stock could be an 8x. Buy and hold without looking at it daily.
• Senovas Has More Juice — West White Rose Expansion Creates a Free Cash Flow Wedge: Senovas remains a top-three holding. The West White Rose expansion and other projects will create a significant step-up in cash flow alongside declining capex — the classic free cash flow wedge that Drifus loves. Would be in his top three if he were starting fresh. Own it alongside Prairie Sky for Canadian energy exposure.
• Copper Must Double From Here to Stimulate Supply — Own Hudbay as the Speculation: Copper demand grows 3% per year. At current rates, the industry needs four world-class mines annually and is building none. Blackwell-era data centers consume 50,000 tons of copper per gigawatt. 15 gigawatts of buildout per year implies 750,000 tons of incremental copper demand — against total global demand of 1 million tons. The price has to go to $10 or higher to induce supply. Hudbay is an excellent speculation given its US mine developments (Cactus and Copper World). Ivanho and Freeport are long-term holds.
• Silver Has a Three-Year Stockout Clock — Price Must Double: Silver demand at 1.2 billion ounces per year exceeds mine supply of 1 billion ounces by 200 million annually. Above-ground non-ETF inventory stands at approximately 600 million ounces. At the current 200 million ounce annual deficit, the world has three years before stockouts. Pro pick: Skina Resources (Snip Creek mine in BC) — producing gold, silver, and antimony from an already-permitted mine with hydro power, expected first production in 2028. At spot prices, the stock (low $30s) could reach $100. A silver price double makes this a potential 10x.
• Talon Energy Is a 3x Even Without Power Price Increases: Talon operates power generation in the PJM grid (Pennsylvania/New Jersey/Maryland). The PJM has projected 100 gigawatts of incremental demand over the next 10 years — equivalent to Japan’s entire annual consumption. Talon has locked in a long-term take-or-pay with an Amazon data center at premium pricing; that contract kicks in 2028–2029. At current strip prices with no increase, free cash flow per share reaches $50 against a $350 stock price — 7x earnings. At a 15x multiple (appropriate for contracted power), the stock is a double. A 20% power price increase takes free cash flow to $70 and creates a 3x.
• Carpenter Technology Is the Pinch Point in the Aerospace Supply Chain: Boeing and Airbus have a combined backlog exceeding $1 trillion over the next 10 years. The most acute pinch point is the nickel superalloys that only Carpenter and one or two other US producers can supply. Certification requirements make it impossible to substitute with Chinese alternatives. Carpenter has monopolistic pricing power, volume growth locked in for 15 years, and earnings compounding potential of 15–25% annually. Look through the apparently high current PE.
Investment Focus
Drifus’s framework: follow the cash into the world’s largest simultaneous capex cycles and own the pinch points in those supply chains. The actionable template: (1) own Prairie Sky as the best-positioned Canadian royalty for a decade of shale decline, (2) hold Senovas, Ivanho, Hudbay, and Freeport for energy and copper exposure — put them away for five years, (3) buy Skina Resources as the silver/gold/antimony 10x candidate on 2028 production, (4) own Talon Energy as the contracted power play in the most supply-constrained grid in the US, (5) own Carpenter Technology as the aerospace superalloy monopoly with 15 years of volume visibility, (6) own Mastercard as the royalty on currency debasement — a Franco-Nevada for everything bought.
EP 3 - Why SocGen’s Global Strategist Sees Double-Digit Inflation Coming Back
Albert Edwards — Société Générale Global Strategist (13-time Extel Survey Top Ranked Macro Analyst)
Albert Edwards, global strategist at Société Générale and the most consistently bearish top-ranked macro analyst on Wall Street for 13 consecutive years in the Extel Survey, joined Odd Lots in London for a rare extended conversation on the end of his famous Ice Age thesis, the fiscal dominance endgame, and what he sees as the most dangerous black swan in today’s market. His core thesis: the structural regime of disinflation and falling bond yields that drove his Ice Age framework from 1996 is over. The transition from QE injected into Wall Street veins to QE injected directly into Main Street via fiscal transfers — made irreversible by democratic politics and war — creates the conditions for a return to double-digit inflation.
Actionable Bullet Points
• Fiscal Dominance Is the Endgame — Double-Digit Inflation Is Coming: Democratically elected governments cannot and will not withdraw fiscal stimulus once the capacity constraint is hit. This is not a forecast — it is structural. The US deficit was already 6–7% of GDP before any recession. In a recession it goes to $6 trillion. The only solution is monetisation. Edwards sees double-digit inflation returning to the developed world as an inevitable consequence. Own inflation hedges, not duration.
• The Oil Price Cost-Push Wave Has Not Yet Hit Corporate Margins: The US personal savings rate has collapsed from 5% to 3.5% — levels only seen during the COVID check-spending period and just before the 2008 crisis. Companies raised margins aggressively during the post-COVID inflation wave (retail, wholesale, construction were the biggest culprits). This time, with the savings rate already depleted, companies cannot pass through cost-push inflation from energy without squeezing volumes. A recession from the outside of AI spending is a serious black swan that nobody is modelling.
• The AI Parallel to the Dotcom Telecom Capex Boom Is the Right Analogy: The Nasdaq bubble was TMT — telecom was the closest analogy to AI because it actually generated capex and real profits from picks-and-shovels (cables, then). But free money drove overinvestment. The mega-cap tech companies have gone from hugely free-cash-flow-generative to zero free cash flow by 2027. This is not a buy-and-hold environment.
• The Gilt Market Is the Weakest Kid in the Playground — Short UK Duration: UK 30-year gilt yields are at 28-year highs. Every attempt at fiscal consolidation has been politically blocked. The bond vigilantes have woken up. The gilt market is the most vulnerable developed-market sovereign in Edwards’s view. He invokes the Bill Gross characterisation: a bed of nitroglycerin. If Starmer exits the political scene without a credible fiscal path, gilts break.
• The Second Derivative of Tech Profit Growth Is Slowing — Watch the Momentum: Profits in the tech sector are still growing, but the rate of acceleration is slowing. That second derivative of momentum is what drives reversals in bubble conditions. Even a modest surprise on earnings — not a collapse, just a mild disappointment — will be enough to reverse the buy-the-dip mentality. Edwards does not see an immediate catalyst for collapse, but is unusual in saying so, which itself worries him.
Investment Focus
Edwards’s framework is the most structurally important macro call this week. The actionable template: (1) own inflation hedges — commodities, energy, real assets — rather than duration bonds at any point in the curve, (2) be aware that the corporate margin squeeze from cost-push inflation is coming and rotate out of highly valued consumer-exposed equities with low pricing power, (3) short long-duration UK gilts as the most vulnerable developed-market sovereign, (4) treat the slowing of tech profit momentum’s second derivative as the leading indicator for a reversal — it does not require a collapse, only a disappointment, (5) position for fiscal dominance as the structural endgame — gold and real assets over bonds.
EP 4 - The Inevitable Decline of the Dollar
Dr. Thomas Hoenig — Former Kansas City Fed President, Former FDIC Director, Mercatus Center Distinguished Senior Fellow
Thomas Hoenig, former president of the Kansas City Federal Reserve and one of the most respected independent voices in American monetary policy — a man who famously dissented against every FOMC decision in 2010 to hold rates near zero — appeared on Thoughtful Money with Adam Taggart. His subject: Kevin Warsh’s nearly impossible inheritance and the structural reasons why the purchasing power of the US dollar will continue to decline. Hoenig, who met Taggart in person in February at the Pomboy/Williams conference, delivered the clearest diagnosis available of what went wrong with post-2008 policy and why the mistakes are being repeated.
Actionable Bullet Points
• Kevin Warsh Faces Three Immediate Crises Simultaneously: First: what to do with rates at June’s meeting — massive political pressure to cut versus an inflation picture that says hike. Second: what to do with the Fed balance sheet, which has already expanded nearly $180 billion net since December (QE in all but name). Third: forward guidance reform — Warsh wants fewer press conferences and less forward guidance, but faces institutional inertia. His challenge is that doing the right thing on all three fronts will punish Wall Street and asset prices in the short term.
• The Dollar’s Purchasing Power Decline Is Irreversible Under Current Policy — Own Real Assets: Hoenig’s conviction: if you print money to fund the national debt, run persistent trade deficits, and suppress interest rates below their natural level, you will inexorably inflate away the purchasing power of the currency. He is certain this will continue. The only protection: own real assets — gold, commodities, equities. Not cash, not bonds.
• QE Beyond the Crisis Is the Original Sin — The Policy Error That Compounds Everything: The first QE in 2008 was defensible. Every subsequent round was not. QE injected into financial system reserves does not create productive capital — it inflates asset prices and suppresses interest rates, which crowds out capital formation in the real economy. This is not capitalism. It is a transfer from labour and Main Street to capital and Wall Street. The consequences — inequality, political polarisation, housing unaffordability — are the downstream effects of this single policy error.
• The Fed Needs a Hard Rule on Balance Sheet Growth — Two Changes Hoenig Would Make: A constitutional rule limiting the Fed’s balance sheet growth to a fixed percentage per year except by two-thirds supermajority in a declared emergency. No interest rate below 2% under any circumstances — negative real rates create bubbles without exception. These rules exist to bind a human institution against its own short-term political incentives.
• Rate Hikes Are More Likely Than Cuts in 2026 — Plan Accordingly: Hoenig’s view: the evidence will increasingly favour tightening as we move through the year. Whether the FOMC has the courage to actually hike — given Trump’s preferences and the war backdrop — is uncertain. But the right answer is higher rates. The base case is a slow taper of balance sheet growth plus modest persistent rate increases. Anyone modelling rate cuts this year is likely wrong.
Investment Focus
Hoenig’s framework is the most institutionally credible bear case on monetary policy this week. The actionable template: (1) own real assets — gold, commodities, equities — as the structural hedge against irreversible dollar purchasing power decline, (2) position for higher long rates rather than cuts — that is what the fundamentals require regardless of political pressure, (3) avoid long-duration bonds as they will be pressured by both fiscal dynamics and eventual rate normalisation, (4) weight the portfolio toward capital-light businesses with pricing power that benefit from inflation rather than those exposed to rising input costs, (5) treat any Kevin Warsh balance sheet taper announcement as a significant catalyst for repricing risk assets downward.
EP 5 - He Wrote the Book on Bubbles | On If AI Is Different
Edward Chancellor — Financial Historian, Author of Devil Take the Hindmost; Former GMO Analyst
Edward Chancellor, financial historian and author of the classic text on investment bubbles Devil Take the Hindmost, joined Kai on the Excess Returns podcast. Chancellor is the world’s foremost authority on capital cycles, having co-authored research at GMO and Marathon Asset Management. His argument: the AI capex boom follows the same historical template as the railroad mania, the telecom bubble, and the dotcom era — massive overinvestment in infrastructure for a genuinely transformative technology, leading to capital destruction for investors even as the technology succeeds. The anti-bubbles in beaten-down AI-perceived losers may be where the real returns are.
Actionable Bullet Points
• The AI Capex Boom Is the Classic Capital Cycle Pattern — Overinvestment Is Guaranteed: Every major technology wave — railways, telecars, telecom — followed the same pattern: legitimate innovation attracts competitive overinvestment, the prisoner’s dilemma logic compels everyone to enter, excess supply destroys returns even for winning companies. The telecom analog is most precise: the capex was real, the profits were real for picks-and-shovels (cables = Nvidia chips), but the free money drove overinvestment and the eventual winner (Amazon-equivalent) still fell 90%. You cannot assume which company wins from today’s vantage point.
• The Anti-Bubble Strategy: Own AI-Perceived Losers That Aren’t Actually Losing: During the TMT bubble, old economy stocks — cheap, profitable businesses deemed ‘pre-internet’ — were the best investments. Today, software companies, engineering firms, and professional services companies that have sold off 30–50% on AI disruption fears may be the equivalent. Chancellor specifically mentions businesses where the disruption thesis is speculative rather than proven and where valuations already price it in. Own quality businesses at depressed multiples — the equivalent of ‘old economy’ in 2000.
• Hallucinations and Reliability Limits Constrain the Total Addressable Market: The best-performing large language model still hallucinates at a 2% error rate. For mission-critical applications — legal, medical, financial, safety-critical — this is disqualifying. The TAM being priced into AI infrastructure assumes adoption across all categories. The true TAM is significantly smaller. A Hindenburg moment — one high-profile failure that changes the narrative — is a meaningful tail risk.
• SaaS Businesses Have Not Yet Priced In the Full Margin Deterioration: Software-as-a-service companies are shifting from pay-per-user to pay-per-token (agentic AI usage). The gross margins on agentic AI (40%) are half those of traditional SaaS (80%) because compute is expensive. Even companies that successfully adapt their billing model will see significant margin compression. Their current valuations may still not reflect this fully despite being down substantially.
• Gold Remains the Best Asymmetric Portfolio Hedge Against the Debt Endgame: Chancellor’s contrarian view: gold deserves a meaningful portfolio allocation. Equities are overvalued by most historical metrics. Bonds face secular headwinds from fiscal dynamics. Gold has no liability attached to it. In an era of unprecedented sovereign debt levels, owning an asset without a counterparty liability is structurally appropriate. In the last 10 years, a gold/equity portfolio outperformed bonds.
Investment Focus
Chancellor’s framework is the most historically grounded capital cycle analysis this week. The actionable template: (1) identify the anti-bubbles — profitable businesses with strong moats that have been sold off on speculative AI disruption narratives — as the highest risk-adjusted opportunity, (2) avoid direct exposure to the AI capex infrastructure spending race as it resembles the telecom infrastructure build-out that destroyed investor capital even as the technology succeeded, (3) own gold as a portfolio anchor given the debt/fiscal endgame that both he and Hoenig have outlined, (4) be sceptical of SaaS margin recovery stories — the shift to agentic billing structurally lowers margins, (5) look for the Lindye effect in beaten-down consumer staples and spirits companies — businesses that have endured for decades are more likely to survive.
EP 6 - The Mother of All Supply Disruptions & Why Gold Will Go ‘Much Higher’
Luke Groman — Forest for the Trees Founder & President
Luke Groman, founder and president of Forest for the Trees and one of the most prescient macro analysts on monetary system dynamics, appeared on Palisades Gold Radio for a comprehensive briefing on the Iran war’s supply chain implications, the monetar system’s structural shift toward gold as the net settlement asset, and his base case for gold at $15,000–$25,000. Groman has been tracking the Chinese yuan/gold settlement system since 2016 and argues the data is now unambiguous: the world is already moving to a multicurrency, gold-settled trade architecture.
Actionable Bullet Points
• The Oil Price Suppression Is a Ticking Time Bomb — Acceleration Is Coming: The Trump administration has been managing the oil price by releasing SPR, creating false peace deal narratives, and using the 4.4% Treasury yield as the ceiling. The result: demand has not been rationed at all. When the suppression breaks — which Groman thinks is 1–3 months away — prices will not go from $100 to $125. They will go from $100 to $150–$200 in a compressed window. The longer the suppression, the more violent the catch-up.
• Gold Is Already the De Facto Reserve Asset — $15,000 Is the Base Case: Gold has surpassed Treasuries in FX reserves globally. Central banks have not added net Treasury bonds to reserves in 12 years. China has built offshore yuan clearing banks in every major gold hub — London, Switzerland, UAE, Hong Kong, Shanghai. Non-monetary gold is the US’s largest single export item in five of the last six months. These are not coincidences. They are the architecture of the new settlement system. The base case price to restore the historical ratio of foreign-held Treasuries to US gold reserves is approximately $15,000. Dow-to-gold ratio of 2:1 (not 1:1 as in 1980/1933, because the Dow cannot fall without economic collapse) implies $25,000.
• The Dollar Will Fall 35–40% Against the Yuan — This Is Mandatory for Reindustrialisation: China’s trade surplus rose 25% in 2025 even as the yuan appreciated against the dollar. This means Chinese productivity so vastly exceeds American productivity that currency appreciation does not close the gap. To reshore manufacturing, the dollar must fall to DXY 60–65. This is not a crisis — it is a deliberate policy choice embedded in the reindustrialisation agenda.
• Long Commodities, Energy, Hard Assets — Own the ‘Things That Hurt If Dropped on Your Foot’: In a secular commodity bull market driven by debasement plus the largest infrastructure capex cycle in history, physical assets outperform financial assets. The secular commodity bull will survive the short-term demand destruction event that higher prices create — use that dip to add. Copper, silver, nickel, uranium, rare earths are the strategic minerals the US government is now contractually backstopping.
• Fertilisers Are a Catastrophic Risk — Nitrogen Supply Chains Are Breaking: 80% of India’s ammonia comes from the Gulf. Urea prices are stratospheric. If 30% of nitrogen supply is cut from the Gulf, the math on global caloric availability is terrifying — potentially affecting hundreds of millions of people. Mosaic (US phosphate producer) is losing money because it cannot get sulfuric acid — a preview of how supply chain breakdown looks from the inside of a supposedly ‘safe’ US company.
Investment Focus
Groman’s framework is the most geopolitically and monetarily comprehensive macro call this week. The actionable template: (1) own gold as the primary portfolio hedge — the monetary system’s net settlement asset is repricing from Treasuries to gold and this process is years from complete, (2) own physical commodities and commodity-producing equities as the secular bull market driven by debasement and infrastructure capex plays out, (3) position for the dollar weakening significantly against real assets and Asian currencies as reindustrialisation makes a lower DXY mandatory policy, (4) watch oil carefully — the administration’s price suppression is creating a coiled spring, and when it releases the move will be violent and rapid, (5) use any near-term commodity weakness as a buying opportunity — the structural thesis has never been stronger.
EP 7 - 35–50% Housing Correction Needed, First Wave 10–12% Coming
Melody Wright — CEO of Heringa, Author of the M3 Melody Substack
Melody Wright, CEO of Heringa and the author of the M3 Melody Substack — who tracks 86 housing markets across the US and has driven tens of thousands of miles visiting development sites — appeared in-studio on the Julia LaRoche Show for a comprehensive update on housing. Her thesis: housing prices need to fall 35–50% from current levels to return to affordability relative to median household income, the first wave of 10–12% declines has already begun in multiple markets, and mortgage delinquencies are rising in the spring selling season — a time when they historically fall.
Actionable Bullet Points
• Mortgage Delinquency Is Rising in Spring — This Is Historically Unprecedented: 30-day delinquencies are rising in Wright’s client mortgage servicing books during the spring selling season — the exact opposite of the seasonal pattern. Delinquencies should be falling as tax refunds and bonus payouts arrive. Wright is now seeing the first prime (Fannie/Freddie) delinquency weakness after years of only FHA deterioration. This is the early-stage signal that preceded the 2010 foreclosure crisis — FHA peaked in 2008, prime peaked in 2010.
• Over 50% of 86 Tracked Markets Had Year-Over-Year Price Declines in February: In February, more than 50 of Wright’s 86 tracked markets showed year-over-year price declines — the first time this has happened. Raleigh, Boston, San Jose, and Kansas City are all showing price weakness or frozen inventory. The spring selling season temporarily masks this with seasonal price bumps, but the underlying trend is deteriorating.
• Boomer Stubbornness Is Creating a Shadow Inventory That Will Release Over a Decade: Boomers own most of the housing stock and are refusing to cut prices, believing mainstream media’s housing shortage narrative. The resulting ‘rage delisting’ is masking how bad the underlying supply situation is. Over the next decade, demographic-driven inventory release — napkin math suggests a 20% incremental annual increase per year — will dwarf any demand-side recovery.
• New Construction Quality and Affordability Are Both Broken: New construction has been systematically overbought at inflated prices by institutional investors and speculators — not owner-occupiers. Builder surveys provided to government data agencies create a systematic upward bias in reported data. The LAR Facebook group is a public resource documenting construction defects at new developments. When construction employment fades — which Wright is already seeing in Kansas City — the secondary economic effects on local service economies will be severe.
• Sell Now if You Must — Buy When Delinquency Becomes Foreclosure: For sellers: price aggressively now before the cascade begins — small price reductions do nothing, and first movers get the buyers. For buyers: patience is the strategy. The FHA forbearance program that has been suppressing foreclosures expires in autumn 2026. Foreclosure sales will rise significantly by end of year. The math will begin to make sense for buyers in 2027–2028 in many markets.
Investment Focus
Wright’s framework is the most granular ground-level housing intelligence available. The actionable template: (1) do not buy residential real estate in the US as an investment in 2026 — the thesis does not work at current prices in almost any market, (2) exit investment properties — especially in markets like Florida, Raleigh, Boston, and Atlanta — ahead of the institutional fire-sale wave, (3) watch monthly mortgage delinquency data in FHA and prime books as the leading indicator — rising prime delinquencies this spring are the signal the crisis is earlier than expected, (4) builders are overbought and should be avoided — the housing shortage narrative is a fiction created by developers and policy makers with conflicting interests, (5) patience for first-time buyers — the first 10–12% correction is already beginning and will be followed by additional waves over a multi-year period.
EP 8 - Crypto’s ‘Godfather’ Is Shorting Bitcoin, Here’s His Downside Target
Michael Turpin — Transform Ventures CEO, Author of Bitcoin Super Cycle; CNBC ‘Godfather of Crypto’
Michael Turpin — author of Bitcoin Super Cycle, former institutional crypto pioneer, and founder of Transform Ventures — appeared at Consensus Miami with David Lin. Turpin’s framework is the four-season model of Bitcoin cycles driven by the halving schedule, which he believes Satoshi deliberately calibrated around US presidential elections. His current call: Bitcoin has not yet found its cycle low, the 200-week moving average (approximately $57K) has not been touched as it has at every prior cycle low, and his fund is actively shorting the $83K level with a target range of $48–$57K before the real supercycle to $1 million resumes.
Actionable Bullet Points
• Bitcoin’s Cycle Low Has Not Been Set — The 200-Week Moving Average Has Not Been Touched: Every prior Bitcoin cycle low has involved either touching or briefly violating the 200-week moving average. The February low at $60K came close but did not touch it. Historically, the low takes approximately one year from the cycle peak. 23 months from the pre-halving ETF ATH (73,850 in January 2024) puts the target around October 2025 — which would have been February 2026. The data is ambiguous but Turpin assigns 60% probability the low is still ahead. His target: $48–$57K.
• STRC Has Put a Floor Under the Bear Market — But Not a Ceiling: Michael Sailor’s STRC (formerly MicroStrategy preferred structure) has changed the cycle dynamics by providing permanent institutional buying that would have been absent in prior bear markets. This has likely truncated the downside — Turpin no longer expects below $40K. But it has not eliminated the cycle. The downside is shallower; the upside trajectory to $1 million by 2033 is unchanged.
• AI Tokens Will Outperform Bitcoin in the Next Three Years Before Rolling Back: The Venice token (VVV) is up 500% from its recent lows. Bit Tensor has doubled. AI crypto tokens are the highest-beta play on the AI thesis for crypto-native investors. Turpin believes they will significantly outperform Bitcoin in the 2026–2029 period before rolling back into Bitcoin as the terminal store-of-value. Own a basket of top-10 AI tokens alongside Bitcoin.
• The Real Crypto Risk Is Not Quantum — It Is AI Cracking Smart Contracts: A quantum attack on Bitcoin’s SHA-256 would first hit defence, hospitals, and banks before Bitcoin. Bitcoin is distributed and decentralised; cracking one wallet requires individual effort. The real risk is an advanced AI model finding zero-day exploits in Ethereum smart contracts — the DAO hack on steroids. A major Ethereum exploit would cause massive Bitcoin collateral damage. This is the near-term left-tail scenario.
• The Super Cycle to $1 Million Is Intact — Logarithmically Diminishing Returns Hit a Floor: Prior cycle gains: 3,000x, 100x, 30x, 10x, then the ETF disruption compressed the fourth cycle to ~8x. The next cycle is likely 3x. From a $60K low, 3x implies $180K. From a $50K low, 3x implies $150K. The super cycle is not these individual cycles — it is the cumulative effect of Bitcoin absorbing the global monetary debasement trade as cycles compound. By 2033, with 96% of Bitcoin already mined, Turpin’s $1 million target stands.
Investment Focus
Turpin’s framework is the most rigorous Bitcoin cycle analysis available. The actionable template: (1) if holding Bitcoin long-term, use current levels ($80–$85K) as a scaling-out opportunity — the cycle low is more likely ahead than behind based on historical pattern analysis, (2) target re-entry in the $48–$60K range with the 200-week moving average as the key indicator, (3) allocate 10–20% of crypto exposure to top AI tokens (VVV, Bit Tensor, and their successors) for the AI-crypto convergence trade through 2028, (4) own STRC as the stable-income proxy for Bitcoin exposure — the 11.5% yield is three times T-bills with fundamental Bitcoin backing, (5) hold a left-tail hedge against an Ethereum smart contract crisis — consider systematic underweight of ETH relative to BTC.
EP 9 - AI Is Killing Buy and Hold Investing
Dan Rohinton — IIA Global Asset Management
Dan Rohinton of IIA Global Asset Management, a growth-plus-dividend mandate manager with a historically long-term orientation, appeared on In The Money with Amber Kanwar for one of the most candid assessments of how AI is changing professional portfolio management. His core message: buy-and-hold investing — the idea that you can own a great company for 10 years without reassessing its moat — is increasingly dangerous because AI is diffusing into industries faster than anyone anticipated. His time horizon has compressed from 5–10 years to 2–3 years. He is tactically long several companies he does not love long-term.
Actionable Bullet Points
• Buy and Hold Is Changing — Time Horizons Have Compressed to 2–3 Years: The rate of innovation is accelerating across all industries including those previously considered defensive. SpaceX threatens every telecom company globally with low-earth orbit internet. AI threatens the billing models of every professional services firm. There are no sacred cows. Rohinton’s practical response: more rapid portfolio turnover, willingness to own companies he likes tactically but not terminally, and a much lower terminal value assigned to businesses exposed to AI disruption.
• Constellation Software Is a Tactical Buy, a Long-Term Question Mark: At approximately 20x unlevered free cash flow — down 50% — Constellation is tactically interesting. But the bear case is structural: the AI revolution is breaking the moat that made Constellation’s model work. Vertical market software companies had pricing power because switching costs were high and developer expertise was the bottleneck. If anyone can vibe-code a competing solution, that bottleneck disappears. The organic growth rate was never impressive; the thesis rested on lock-in. Watch for retention rate deterioration.
• Microsoft Is ‘Dirt Cheap’ at 20x — Own It Despite the OpenAI Divorce: Microsoft is growing Azure at 39% year-over-year and trading at record-low valuation multiples for the modern era. The OpenAI relationship is evolving rather than breaking — OpenAI is also on Amazon Bedrock because it needs enterprise distribution that Microsoft already has. Rohinton’s key insight: Microsoft serves the long tail of the enterprise (not just Fortune 50 cloudnative tech), and that customer base is far less likely to churn to a pure AI-native competitor. Buy at 20x with the caveat that co-pilot margins are structurally lower than legacy software margins.
• LVMH Is a Tactical Buy at Seven-to-Eight-Year Valuation Lows: China gold buying has replaced handbag purchasing for the aspirational Chinese consumer — a direct competitor to LVMH’s core fashion and leather goods segment. The Iran war has impacted Middle East travel retail. Both are transitory negatives. At historically depressed valuations, LVMH has the brand durability (the Lindy effect) and the structural K-economy tailwind to recover. Own it as a multi-year mean-reversion trade.
• Amazon Remains a Top Position — The Distribution Moat Is More Valuable Than the Chips: The reason OpenAI went through the pain of a ‘divorce’ from Microsoft to get onto Amazon Bedrock was that Amazon Web Services serves the tail of the enterprise market that Microsoft Azure does not fully reach. At a $120 billion revenue run rate growing rapidly, AWS’s distribution to tens of thousands of companies — not just Fortune 50 — is the most valuable AI distribution asset in the market. Own Amazon for the moat, not the capex.
Investment Focus
Rohinton’s framework is the most practically useful for active portfolio managers navigating the AI transition. The actionable template: (1) reduce your investment time horizon to 2–3 years for most technology and professional services holdings — the pace of disruption makes 10-year convictions dangerous, (2) own Microsoft and Amazon as the distribution-moat AI infrastructure plays — they serve the long enterprise tail that pure AI-native competitors cannot reach, (3) use the Constellation selloff as a tactical buying opportunity while monitoring retention rates and organic growth for structural deterioration, (4) own LVMH as a multi-year mean-reversion trade — gold-buying cannibilization of the Chinese aspirational consumer is transitory, (5) avoid General Mills — leverage plus structural volume pressure plus GLP-1 headwinds is a compounding negative at 4x net debt to EBITDA.
EP 10 - How These Economic Structures Shape World Power
Antonia Colibasanu — Geopolitical Futures Senior Analyst
Antonia Colibasanu, senior analyst at Geopolitical Futures, appeared to announce the launch of Geoeconomic Lens — GPF’s new monthly publication analysing how economic structures shape geopolitical power. Her framework: geoeconomics sits at the intersection of economics and geopolitics — it asks not how GDP grows, but how economic structures sustain political stability and project power. The core insight for investors: states with weak static economic power (internal cohesion, energy security, demographic balance) cannot convert economic resources into geopolitical influence regardless of surface-level GDP metrics.
Actionable Bullet Points
• Static Power First — Internal Economic Cohesion Determines Long-Run Geopolitical Capacity: A country’s static power is its internal resilience: equitable wealth distribution, energy security, demographic strength, and freedom from critical import dependencies. Without static power, a large GDP does not translate into geopolitical influence. Russia’s post-sanctions deterioration — labour shortages, goods scarcity, inflation — illustrates the limits of resource wealth when static power is weak.
• Russia Is Losing the Long Game Despite Oil Revenue: Russia’s strategy was to weaponise energy exports for geopolitical leverage. But the West’s sanctions have exposed the structural weakness underneath: dependence on Western technology, inability to replace depleted military systems, economic deterioration that the oil windfall cannot fully offset. Model for a Russian leadership transition and a post-Putin normalisation of energy markets — long European energy infrastructure companies that benefit from re-engagement.
• China Has the Static Power Advantage But Faces Its Own Demographic Constraints: China has invested in static power systematically: energy reserves, domestic supply chains, industrial capacity, and gold accumulation. The demographic challenge (one-child policy legacy) is a long-run constraint, but in the near term China’s geoeconomic position is stronger than the US narrative suggests. The yuan strengthening against the dollar during the Iran war is a data point confirming this.
• Europe Is in an Existential Static Power Crisis — Energy and Demographics Are Both Broken: Europe’s energy policy (dependent on Russian gas), immigration policy (failed social cohesion), and fiscal position (deficit-constrained with high debt) create a textbook weak static power scenario. Without static cohesion, Europe cannot convert its nominal wealth into geopolitical influence. Long European defence companies as the continent is forced to rebuild military capacity from a very low base.
• The Framework to Apply: Identify States With Strong Static Power That Are Underpriced: The investment application of geoeconomics: states with strong static power and attractive dynamic power (strategic resources, trade routes, productive populations) but undervalued financial markets are the best long-term investments. India, Southeast Asia, and select Gulf states fit this profile. States with high GDP but weak static power (high inequality, energy import dependence, deteriorating demographics) will underperform their nominal wealth.
Investment Focus
Colibasanu’s framework provides the structural lens for geopolitical investment allocation. The actionable template: (1) use the static power checklist — energy security, demographic balance, wealth distribution, import dependency — before allocating to any country’s equity market, (2) long India as the highest static power growth economy with deep human capital and favourable demographics, (3) long European defence companies as the structural military rebuild from near-zero base creates a decade-long spending cycle, (4) model for Russian leadership transition and position European companies for post-Putin re-engagement, (5) apply geoeconomics to supply chain positioning — own companies with resources in high-static-power countries to reduce geopolitical tail risk.
EP 11 - Why 2008 Comparisons Are Wrong — And Where the Real Risk Lies
Marc Rubinstein — Net Interest Newsletter Author, Former Hedge Fund Manager
Marc Rubinstein, author of the must-read Net Interest newsletter and a veteran financial sector analyst, appeared on Excess Returns for a forensic examination of where the real risks in today’s financial system lie — and why the reflexive 2008 comparison is both wrong and distracting. His key arguments: the private credit industry ($2 trillion and growing) has created a three-layer cake of leverage that regulators are only beginning to understand, the HSBC/Atlas/MFS episode is the first visible crack in that system, and Blue Owl’s redemption gates are the early symptom of a broader structural problem in retail-accessible private credit.
Actionable Bullet Points
• Blue Owl and Private Credit Redemptions Are a Symptom — Not the Crisis Itself: Blue Owl Capital Corp 2’s gate of 30% redemptions and deferred payouts is a signalling event, not yet systemic. The real risk is that as more retail investors — who were placed into these funds by advisers chasing incentives — seek liquidity in a stress scenario, the legal gate structures cannot prevent reputational and market damage. Blue Owl’s founders used stock as loan collateral; share price collapse created secondary forced selling.
• The Three-Layer Credit Cake: Bank → Private Credit → Non-Bank Financial Intermediary: JP Morgan alone has $160 billion of bank lending to private credit vehicles. Banks’ loans to non-depository financial institutions have grown fivefold over 10 years at 16% per annum. The Bank of England’s deputy governor and the IMF have flagged the leverage embedded in this structure. The HSBC/Atlas/MFS case — HSBC thought it had diversification; Atlas was massively concentrated in MFS; MFS allegedly double-pledged collateral — is the first live example of how contagion flows through this architecture.
• The Insurance/Private Credit Nexus Is Underappreciated — Apollo Is the Pioneer: Apollo has pioneered the acquisition of life insurance companies (Athene, and others in Europe) to create long-duration liability books that it can match with long-duration private credit assets. The model has merit. The risk is the blurring of lines between the originator, the distributor, and the insurance policyholder — all sitting inside the same alternative asset manager. Regulators are scrutinising this.
• Jane Street Is the Most Important Firm Nobody Is Discussing — And It May Be Overextending: Jane Street’s 2025 earnings exceeded the combined market-making revenues of several major Wall Street firms. The firm has gone from pure arbitrage to proprietary directional trades held over years to VC investments. Every firm that has outgrown pure arbitrage — investment banks in 2008 most obviously — has taken on structurally higher risk to feed compensation expectations. This is worth monitoring.
• The 16-Year Credit Cycle Creates Complacency That Will End Badly: Credit losses last peaked in 2010. We are now 16 years into the longest credit cycle in modern history. The absence of a credit cycle creates complacency in underwriting standards, rating agency models, and risk management frameworks. The next credit cycle, whenever it arrives, will expose risks that have been building for over a decade in a financial system that has grown substantially more complex.
Investment Focus
Rubinstein’s framework is the most granular financial sector risk assessment available. The actionable template: (1) reduce exposure to retail-accessible private credit funds — the redemption gate structure does not prevent reputational damage or forced mark-to-market events, (2) treat HSBC’s Atlas/MFS charge as the first visible crack in the three-layer credit cake and monitor for follow-on events at other institutions, (3) monitor Jane Street and multi-manager hedge fund positioning for signs of overextension beyond their core arbitrage competencies, (4) do not reflexively short banks using the 2008 playbook — the risk this cycle is in the non-bank financial intermediaries, not regulated bank balance sheets, (5) long European financial institutions with genuine franchise value as the continent is forced to consolidate — cross-border M&A in Europe remains structurally undervalued.
EP 12 - Legendary Economist Called 2008, Now Warns Stocks Could Drop 30%
Gary Shilling — A. Gary Shilling & Co. President; Wall Street’s Top Economist (Two-Time Institutional Investor Recognition)
Gary Shilling, president of A. Gary Shilling & Co. and a legendary contrarian economist who called the 1969 recession, the end of the 1970s inflationary era, the 2006 housing bubble, and the 2008 financial crisis, appeared on David Lin’s show with a straightforward bear case. His core message: there is nothing solid supporting today’s equity valuations — not consumers (retrenching), not capital spending (excluding AI, minimal), not trade. The market is at the upper end of euphoria and the risk is materially to the downside. He remains a structural long-treasury bull and a structural equity bear.
Actionable Bullet Points
• There Is No Fundamental Support for Current Equity Valuations — Risk Is Down: Shilling’s process is brutally simple: what is fundamentally supporting earnings? Consumers are retrenching. Capital spending outside AI is not a broad tailwind. Trade is not a bonanza. There is nothing. The market is pricing in a future that has no concrete foundation in today’s economic data. His base case: a 20–30% correction as the recession eventually arrives.
• India Over China — Demographics and Technology Orientation Are the Deciding Factors: India has unrestricted population growth, deep technology talent, and an inherited legal system from the British that provides rule-of-law assurance. China has demographic headwinds from the one-child policy, a government-directed capital allocation system that suppresses consumer demand, and a real estate bust that the government has shown limited appetite to bail out fully. Long India as the better long-term growth engine.
• Treasuries Are the Defensive Posture — But Less Certain Than Two Weeks Ago: Shilling’s recommended list has been long Treasury bonds and out of stocks (or short major indices). He acknowledges that the market is now beginning to price in the possibility of hikes rather than cuts, which reduces the Treasury long’s attractiveness. But relative to equities in a risk-off environment, Treasuries remain the better risk-adjusted hold. The safe haven effect dominates when recession arrives.
• Agricultural Commodities Are the Most Likely US-China Deal Catalyst: At Trump’s Beijing meeting, Shilling identifies soybeans and agricultural products as the most probable deal category — the US has surplus supply, China has structural demand, and both sides have immediate interest in announcing a win. Long soybean and agricultural commodities complex on any Xi-Trump summit announcement.
• The Fed’s Only Two Levers — Balance Sheet and Rates — Are Both Constrained: The Fed cannot effectively fight an oil price shock with rate tools because the shock is supply-driven. Raising rates in response to an oil shock risks tipping the economy into recession without reducing inflation. The balance sheet is already expanding covertly. Shilling’s framework: the best the Fed can do is nothing, but political pressure will force action — and that action will likely be wrong.
Investment Focus
Shilling’s framework is the clearest near-term defensive template this week. The actionable template: (1) reduce equity exposure — particularly high-multiple, low-earnings-support names — as the current euphoria has no fundamental underpinning, (2) own Treasury bonds as the risk-off safe haven even as the rate hike risk has increased, (3) go long agricultural commodity complex on any Xi-Trump summit news, (4) overweight India versus China as the demographic and technology-oriented growth engine for the next decade, (5) hold cash as optionality for the 20–30% correction that Shilling sees as the base case when recession eventually arrives.
EP 13 - What Happens Next Could Wipe Out Your Retirement, Warns Fund Manager
George Noble — Noble Capital Advisors Managing Partner; Host of Best Income Ideas Summit
George Noble, managing partner of Noble Capital Advisors and host of the Best Income Ideas Online Summit (May 20), appeared on David Lin’s show for one of the most impassioned and specific bear cases for over-valued technology stocks and the most conviction-filled bull case for gold mining stocks available this week. Noble, who worked under Peter Lynch at Fidelity and has a deeply fundamental orientation, is actively short Tesla, Robinhood, Cava, and Fresh Pet while being long SSR Mining and the broader precious metals mining sector.
Actionable Bullet Points
• SSR Mining Is the Highest-Conviction Near-Term Miner — Stock Could Double in a Year: SSRM has sold its Turkish asset for $1.3 billion, holds $3 billion in cash, trades at 7–8x free cash flow, generates 70% margins, and is executing a 10% float buyback — the same capital return flywheel that drove the Mag 7. The stock is a pure North American producer now, reducing geopolitical risk. The analogy to Barrick’s buyback announcement — which drove an 8% single-day gain — applies directly. Buy SSRM as the highest near-term risk-adjusted miner.
• Gold Miners Are Generating So Much Cash They Will De-Equitise — Own GDX and GDXJ: Gold companies are not reinvesting windfalls into new mines — they are buying back stock and raising dividends. The deequitisation of the mining sector at current gold prices is the structural tailwind that drove the Mag 7’s outperformance for a decade. GDX is up 94% in the last year; the underlying fundamental improvement in earnings justifies this and there is more to come. Own GDX or GDXJ for broad exposure alongside individual names.
• Become Negative on Gold Only When Fiscal Policy Becomes Sensible — Not Happening: Noble’s precise negative catalyst for gold: sensible fiscal policy, a halt to money printing, and confidence in fiat currency. None of these conditions are remotely present. US deficit at 7% of GDP and rising. QE covertly ongoing. The dollar in structural decline. Until these conditions change, gold’s bull market is intact. The PBOC and global central banks are still buying gold every month — this is sticky institutional demand that does not reverse.
• SpaceX at Trillion-Dollar Valuation Is the Most Dangerous Capital Misallocation in Market History: Noble’s strongest conviction short: SpaceX at $1.7 trillion valuation on $15 billion of revenue and losses. This is 120x revenue. Tesla’s entire 18-year history has generated only $38 billion of total profits against $20 billion of government subsidies. Tesla at $420 is worth at most $50 on fundamentals. Both Musk companies represent the corruption of price as a capital allocation signal. Their impending inclusion in indices at these valuations will force index funds to buy worthless paper.
• The 60/40 Portfolio Is Broken — Replace Bond Allocation With Income-Generating Real Assets: Bonds have declined for four consecutive years. Inflation will run above 3% for an extended period. The bond/equity negative correlation that made 60/40 work has broken permanently. Noble’s alternative: own Brazilian bonds at 14% yield (fiscal position better than US, currency appreciating), energy-linked dividend stocks with covered yields, gold royalty companies, and healthcare REITs with stable non-cyclical cash flows. All of these are yielding 8–14% with inflation protection.
Investment Focus
Noble’s framework is the most specific mining and anti-technology call this week. The actionable template: (1) buy SSR Mining as the highest near-term risk-adjusted miner with the best capital return profile, (2) own GDX and GDXJ as the primary vehicles for precious metal mining exposure — the buyback cycle has just begun, (3) short Tesla and SpaceX on any entry opportunity — these are the most extreme valuation misallocations in market history, (4) replace bond allocation with high-yield real asset income: Brazilian sovereign bonds, energy dividend stocks, healthcare REITs, gold royalty companies, (5) remain long gold until the Federal Reserve demonstrates fiscal responsibility — the wait will be indefinite.
EP 14 - Energy Shock, Oil Markets, & the New Commodity Cycle
Adam Rozencwajg — Goehring & Rozencwajg Partner
Adam Rozencwajg, partner at Goehring & Rozencwajg — a natural resources-specialist investment firm — appeared on the Definitely Uncertain podcast with David Ram for a comprehensive briefing on the oil market’s structural dynamics, the shale depletion paradox, the OPEC dissolution signal, and the Hormuz shock’s long-delayed physical consequences. Rozencwajg repositioned his fund from 25% gold to 5% gold in January — moving the proceeds into oil and US natural gas — because the energy market was structurally tighter than anyone was pricing long before the Iran war started.
Actionable Bullet Points
• The IEA’s ‘2 Million Barrel Surplus’ Was False — The Market Was Balanced All Along: The IEA claimed a 2 million barrel per day surplus in 2024. But if that were true, global inventories would have grown by 730 million barrels. They did not. The inventory data invalidates the surplus narrative. What actually happened: demand was stronger than expected, OPEC was producing at maximum capacity, and US shale was beginning its terminal depletion phase. The market was balanced entering 2026 — and then the Hormuz shock hit an already-tight market.
• Shale Is at Its Terminal Depletion Phase — The Supply Response to High Prices Will Disappoint: US shale production grew at 1.8 million barrels per day annually for 15 years. That era is over. Growth has fallen to below 100,000 barrels per day and will turn negative within months. The depletion paradox: when a field has consumed 40–60% of its reserves, production peaks and declines even if drilling continues at the same pace. High oil prices will generate modest incremental supply, not a replay of the 2010–2014 shale boom. Position for $70–$80 normalised oil with significant left-tail risk of sustained $100+.
• OPEC’s UAE Departure Is Bullish — It Signals They Are Already at Maximum Production: The conventional reading of UAE leaving OPEC is bearish (cartel discipline weakening). The correct reading: you only leave a cartel when the cartel serves no purpose, and a cartel serves no purpose when everyone is already producing at maximum capacity. The UAE is leaving because there are no quotas to hold back — everyone is already at full output. This is one of the most bullish signals possible for structural oil tightness.
• Canadian Oil Sands Are the Best Structural Supply Source — Own Prairie Sky and Senovas: Canada must fill the shale void. The oil sands are one of the few non-OPEC, non-shale sources of significant incremental production capacity. Prairie Sky (royalty, no capex) and Senovas (Canadian integrated, West White Rose expansion) are the highest-quality long-term exposure. The Iran war has accelerated the structural bull case — it is now impossible to ignore Canada’s strategic importance.
• Gold Repositioning — Took Profits at January Parabolic Top, But Base Case Is Much Higher: Rozencwajg reduced gold from 25% to 5% in January for three reasons: oil/gold ratio was at all-time extreme favouring energy, western speculative money (not sticky central bank buying) had driven the parabolic move, and gold was pricing in 2–3 Warsh rate cuts that were not yet justified. The long-term gold bull is intact — Rozencwajg believes gold will make a new all-time high this cycle, potentially $10,000–$20,000 on fundamental metrics. The pullback is a re-entry opportunity for patient investors.
Investment Focus
Rozencwajg’s framework is the most technically specific energy market analysis available. The actionable template: (1) own energy equities as structural longs — the market is priced for normalised $70 oil while the physical reality is $100+ for the foreseeable future, creating massive free cash flow upside, (2) own Prairie Sky and Senovas as the highest-quality Canadian structural supply plays for the shale depletion decade, (3) use any oil equity weakness as an entry point — the commodity thesis is years away from resolution and the valuations assume a return to $65 oil that will not happen, (4) use the gold pullback from $5,000 as the structural re-entry opportunity — the oil/gold extreme was the correct sell signal but the bull is intact, (5) own US natural gas producers with long-term LNG take-or-pay contracts as the global gas supply diversification trade accelerates post-Hormuz.
EP 15 - We Asked Why AI Won’t Boost Profits — and What It Will Do Instead
Jeremy Grantham — GMO Co-Founder; Author of The Making of a Perma Bear
Jeremy Grantham, co-founder of GMO and author of the newly published memoir The Making of a Perma Bear — which chronicles 50 years of contrarian investment calls including calling the bubble in 1982 at the bottom, the tech bubble, the housing bubble, and the 2009 buying opportunity — joined Excess Returns for a comprehensive final word on mean reversion, AI’s likely economic impact, the formation conditions for the current potential bubble, and why purpose matters more than anything else. His most important insight this week: AI will not sustainably lift aggregate profit margins. It is a technology that eventually becomes a cost of doing business, not a permanent source of above-normal profits.
Actionable Bullet Points
• AI Will Not Sustainably Raise Aggregate Profit Margins — It Is a Cost of Doing Business: The early adopters of any major new technology earn superior profits for 2–3 years. Then everyone adopts, it becomes the cost of doing business, and profit margins revert. GMO’s own mainframe computer gave them a competitive advantage for 2–3 years in the 1970s — then everyone had one. AI will follow the same path. The aggregate profit margin of the S&P 500 will not be structurally higher because of AI once the dust settles. This is not a forecast — it is an axiom of capitalism.
• The Current Bubble Is Unique — It Formed From a Half-Deflated Prior Bubble: The 2022 bear market was interrupted by ChatGPT (October 2022) before it was complete. Grantham believes without AI the market would have entered a mild recession and fallen another 25%. AI’s unprecedented capex accounted for essentially all of the GDP growth from 2023 onwards. We are now in what he calls ‘terra incognito’ — a bubble forming out of a bubble that only half-deflated — which has no historical precedent.
• The Critical Indicator Has NOT Yet Triggered — This Is Not 1929, 1972, or 2000: Grantham’s proprietary bubble indicator — where market leaders of the prior cycle peak and fall while the broad market continues to rise — has not triggered. In 1929, low-priced speculative stocks fell 40% while the S&P rose 30+%. In 2000, growth stocks fell 50% while the S&P was flat for 6 months. In 2021, meme stocks and ARK Innovation peaked and collapsed while the S&P rose. That signal is currently absent. Junky stocks are outperforming quality. The bubble has not reached its final phase.
• Emerging Markets and International Value Are in a Multi-Year Mean Reversion: From January 2025 to May 2026, GMO’s emerging market fund is up approximately 70% versus the S&P’s 25%. This is the beginning — not the end — of a multi-year mean reversion from the most extreme non-US discount to US equities in history. In all prior instances of this level of discount, the rest of the world significantly outperformed the US for multiple years. Own emerging markets and international value as structural longs.
• Mean Reversion Still Governs Everything — With One Exception: For 200 years, the return on capital in capitalism has been remarkably stable. The one exception: when governments tolerate monopoly formation. The Mag 7’s decade of exceptional returns was enabled by regulatory inaction — no antitrust enforcement as global monopolies formed. Now, with AI compelling all seven monopolists to attack each other’s markets simultaneously, the competitive dynamic that drives mean reversion has reasserted itself. The blood will flow — but to the average company that the monopolists are now invading, not to the monopolists themselves.
Investment Focus
Grantham’s framework is the most historically grounded investment philosophy available. The actionable template: (1) own emerging markets and international value as the multi-year mean reversion trade from the most extreme non-US discount in history — this is early innings, (2) resist the interpretation that AI creates a permanent new normal for corporate profit margins — it will become a cost of doing business, and current valuations assume otherwise, (3) watch Grantham’s proprietary bubble indicator — when quality stocks begin to hold while speculative leaders fall, that is the signal to move defensively, (4) do not make the mistake of overpaying for quality in a late-bubble environment — pay as little as possible for exposure to the most enduring businesses while waiting for the mean reversion to complete, (5) allocate capital toward purpose — the long-term societal risks (chemical toxicity, demographic decline, climate) create decade-long investment opportunities in the companies solving them.
