Antti Ilmanen - Understanding Return Expectations (S7E21)

Bullish:

• $INTL - Strong conviction to favor international equities over US equities on a 3-5 year horizon due to extreme US valuations

  • “If I take a three to five year perspective, I feel exceptionally confident that this is not the time to overweight The US.”

    Antti·50:09
• $LIQDIV - Liquid diversifiers are underappreciated due to recent underperformance while investors embrace illiquid alternatives, creating a contrarian opportunity

  • “I think the rear view mirror has been discouraging investor adoption of liquid diversifiers, whereas investors have been obviously embracing illiquid alternatives.”

    Antti·1:08:37
• $BONDS - Real yields have moved from negative territory to positive 2%, reaching more attractive levels

  • “Ten year TPS yield goes from minus one to plus 2%”

    Antti·52:07

Bearish:

• $SPX - Exceptionally confident that US equities should not be overweighted on a 3-5 year perspective given current valuations

  • “If I take a three to five year perspective, I feel exceptionally confident that this is not the time to overweight The US.”

    Antti·50:09
• $PE - Private equity faces significant headwinds from high valuations, expensive leverage costs, and high fees, making outperformance very difficult

  • “I do think that it's very difficult for, let's say, private equity now to deliver any kind of outperformance as long as we have what the valuations where they are now and cost of leverage where it is now.”

    Antti·1:08:37
• $REIT - Real estate hasn't repriced despite a 300 basis point increase in real rates, suggesting overvaluation

  • “How come real estate, public equity, private equity hasn't been repriced given such a change in the relevant part of their discount rate anyway?”

    Antti·52:07
• $TECH - AI bubble may be in late innings with excessive risk-taking behavior in technology sector

  • “If I have to guess, I think we'll be closer to the overtime part.”

    Antti·54:59