Ep.437: Thematic Investing in an Age of Global Entropy | Marvin Barth

Bullish:

• $INDUSTRIALS - Invest in industrial sectors due to the expected redevelopment and reindustrialization of industries in the United States, driven by technological change and automation.

  • “So you'd better be focused on redevelopment of industries in The United States. So investment in industrials is going to be a crucial aspect of this.”

    Marvin·1:29:54

  • “So what you need to think about is what is the underlying driver of growth? And that comes back to this localization aspect to me, that we are going through a rapid process of technological change that is going to enable increasing re industrialization through automation.”

    Marvin·1:27:29
• $LOCAL - Invest in localization trends, which are driving economic processes and are underappreciated compared to the more commonly discussed idea of deglobalization.

  • “Localization is something very different. It is actually what's driving that process. And I think it's a very underappreciated and underobserved phenomenon.”

    Marvin·14:00
• $RATES - Invest based on the expectation of rising real interest rates, a trend that has been ongoing since the mid-2010s, with the exception of the COVID period.

  • “So one of my big calls was in the middle of the last decade. I said, you know, this is in 2015, 2016. I said real interest rates have bottomed out. And other than COVID, I was right. Right. They've been going up since.”

    Marvin·26:16
• $HEDGE - Implement tail risk hedging strategies using options and leveraged structures to protect against extreme market events, particularly in uncertain geopolitical environments.

  • “And so really you need to have actually a tail hedge insurance portfolio. Right. So you need to use much more option based or leverage structures that are going to pay off big when things go really badly.”

    Marvin·1:31:28
• $USD - Consider a bullish stance on the US dollar, potentially driven by increased adoption of stablecoins, which could enhance the dollar's global prevalence.

  • “Then in that case, I think the dollar actually increases its prevalence in this world. And, you know, one of the key points in that was this adoption of stable coins.”

    Marvin·1:37:18

Bearish:

• $EM - Consider shorting emerging markets based on their consistent underperformance compared to Western markets, especially the US, since 2012.

  • “Since 2012, when I said it was the sort of turning point in globalization for The US, emerging markets have consistently underperformed the West and especially underperformed The US.”

    Marvin·25:59