Aahan Menon: Systematic Macro in a Shifting Economy: Signals Over Stories – Resolve Riffs Investment Podcast

Aahan Menon: Systematic Macro in a Shifting Economy: Signals Over Stories – Resolve Riffs Investment Podcast — Transcript

Market views

Bullish

XAU— Gold is part of a crisis protection program that provides counter-cyclical portfolio insurance alongside TIPS and long volatility exposure
QUANT— Systematic quantitative trading with many diversified bets across different assets provides superior risk-adjusted returns compared to discretionary macro approaches
TECH— Big tech is the sole driver supporting equity markets while other sectors show weakness, making it the only component floating the market

Bearish

MACRO— Long-term fundamental macro research is almost entirely useless for portfolio decisions, as even perfect one-year forward growth and inflation forecasts can't outperform beta
LEI— Traditional economic indicators like the Conference Board LEI are outdated, designed for a 1980s manufacturing economy, and have incorrectly signaled recession since 2022
BONDS— Bonds have shown extreme short-term mean reversion since 2022 due to conflicting Fed mandates between employment weakness and inflation persistence
JOBS— Labor market is heading south with employment growth potentially contracting meaningfully while output and spending continue unaffected, creating an unprecedented divergence that must resolve
CYCLICALS— A market-neutral strategy of going long tech indexes while shorting the most cyclical parts of the economy represents one of the best plays based on deteriorating earnings momentum in cyclical sectors

Not investment advice.