Weighing The Risks Orion

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


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Meet Rusty Vanneman, Orion's Chief Investment Officer

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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.

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

In the real estate market, both the commercial and residential sectors are currently navigating through challenging waters. Rising interest rates and falling property valuations plague the commercial realm, while residential real estate contends with affordability and a shortage of housing supply. Although these markets face formidable challenges, knowing the potential risks and scenarios can help financial advisors and investors make better decisions.
In this episode, Rusty talks to Xavier Goss, Portfolio Manager, and Hannah Greene, Fixed Income Investment Analyst at Capital Group. Xavier has 19 years of investment industry experience and has been with Capital Group for two years. Before joining Capital, Xavier was a portfolio manager in the structured credit group at BlackRock. Hannah is a fixed-income investment analyst with 10 years of investment industry experience.
Xavier and Hannah address concerns about commercial real estate, such as rising interest rates and falling property valuations, and highlight affordability and shortage of supply as key issues in residential real estate. They also discuss the potential risks and scenarios in commercial and residential real estate markets. Xavier and Hannah believe the housing boom isn't over and that the economy is poised for a soft landing rather than a recession. 

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
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.

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


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Rusty Vanneman

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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.

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


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Rusty Vanneman

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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

Global debt has hit an all-time high, making its way into the headlines worldwide. Debt held by governments, corporations, and individuals has alarmed economists and finance experts alike. While some argue that this debt load is necessary for economic recovery and growth, others warn that this could have far-reaching consequences for the economy around the world.
In this episode, Rusty talks with Phillip Toews, Founder and CEO of Toews Asset Management. Phillip has a passion for behavioral finance and its role in investment decision-making. He focuses on creating "investor-friendly" products and is an outspoken advocate of changing and improving investment vehicles to serve clients' needs. Phillip is also the Founder and CEO of the Behavioral Investing Institute, where he helps advisors cultivate their skills and, through education, seek to serve their clients better.
Phillip and Rusty weigh some of the potential scenarios and risks from the hidden implications of record global debt and some of the possible future scenarios for the stock market, interest rates, and real assets. 

Key Takeaways

[02:50] - The origins of Toews Asset Management.

[04:12] - Phillip's definition of risk.

[06:18] - How bad the debt situation is right now.

[08:40] - What financial repression means for the economy and investors.

[11:27] - What financial crisis means for the economy and the markets.

[13:37] - What the extended economic malaise looks like for investors.

[16:18] - How investors can build resilient portfolios in today's environment.

[20:37] - How the dollar plays out in the current economic climate.

[25:22] - What history says happened during a time of financial repression.

[29:56] - Phillip's view of the extended economic malaise.


Quotes
[04:36] - "I define risks as the probability that I will have a lower standard of living than I expect I want. At the extreme end, it means I run completely of money or am destitute. At a less extreme, it means that I will be living a certain standard of living during retirement. But something happens in the markets, and suddenly, I can't do that." ~ Phillip Toews
[07:14] - "We have record levels of debt. We've got sovereign debt, where in the U.S. and some other advanced economies were up to 100% of GDP, which is as high as ever. Simultaneously we have high levels of non-financial, corporate, and personal debt. To sum it up, it's 350% of GDP. That's a new record." ~ Phillip Toews
[17:53] - "Building a behavioral portfolio means creating an all-weather type of portfolio that looks outside of the sphere of what's happened in the last 50 years. That includes things like the Great Depression or things like what happened in Japan, where you need to build something that addresses contingencies." ~ Phillip Toews

Links 

Phillip Toews on LinkedIn

Toews Asset Management

Don't Give Up by Groove Armada

Michael Pettis

Peter G. Peterson Foundation

Behavioral Investing Institute

Toews Asset Management on LinkedIn


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.
1020-OAT-4/11/2023