Podcasts/Videos Of The Week
My Favorite Investing Podcasts From Last Week & An Honorable Mention Video
I plan on doing a post with my favorite Podcasts and/or YouTube videos that I watch each week. I go through a steady diet of content on investing and other topics, and I want to put my favorites in front of readers so you can listen for yourself. This week I have four picks that readers might find interesting.
KunstlerCast with Neil Howe
My favorite podcast that I listened to last week was the most recent episode of KunstlerCast, with Neil Howe. Neil Howe is the author of The Fourth Turning, written in 1997, is an expert on demographics and generational changes. He is responsible for coining the term “millennial”. If you are looking for a book to read, I highly recommend reading it. I have also preordered his upcoming book, The Fourth Turning Is Here, and I’m looking forward to reading that one as well.
They talk about the differences in generations and how the environment each generation grows up in influences the attitude of each generation and the events of the day. For some background, each generation is about 20-25 years (called a turning), and these longer cycles last about 80-100 years. They culminate in a Fourth Turning, or a crisis moment. We are in the middle of a Fourth Turning right now, and the podcast discusses the economic and geopolitical ramifications we are looking at in coming decades.
“Younger people are turning against democracy…. There is this enormous shift from older generations to younger generations in attachment to democracy. Older people are much more likely (20, 30, 40% more likely) to say it is really important we live in a democracy…. It’s not just an age effect, it’s clearly a generational effect.”
- Neil Howe
The podcast is a little longer than an hour and I was hanging onto every word. It’s definitely a good podcast for a look at the big picture and some of the topics outside of markets that could have a significant impact on financial markets moving forward. You can find it on Apple Podcasts here.
Excess Returns - Building An Inflation Fighting Portfolio
The next podcast ties in well with my post on inflation on Thursday. They talk about why inflation might be higher for longer on average, and which assets generally perform well in inflationary periods. They talk about some of the things I mentioned in my post, including manufacturing returning from overseas, increasing interest rates, and underinvestment and shortages in commodities. They also talk about war having an impact and how the assets that performed well in recent years in a disinflationary and low interest rate environment won’t be able to generate the same attractive returns moving forward.
“History would tell us, that once high inflation materializes, as it is right now, it takes a very long time to resolve. If you go back to the 1960s and look at the G10 countries, once inflation breaks above 5%, it typically takes 18 years on average to fall back to 2%. The last major inflationary cycles we had in the US were the 1940s and the 1970s. Both of those took well above a decade, and the average level of inflation was around 5%, with several peaks and troughs throughout. The base case scenario should be from here that we’re going to be stuck with high inflation for an extended period of time, because once that inflation genie is out of the bottle, history tells us it’s very hard to put back in.”
- Dave Schassler, VanEck Head of Quantitative Solutions
My portfolio is heavily weighted towards energy, in no small part due to my outlook on inflation. The other main driver is how cheap some of these assets are relative to tech-heavy indices like the S&P 500 and Nasdaq 100. They assume (like I do) that we will see high commodity prices due to shortages, and that natural resource equities will perform well. They also like gold bullion and gold equities, which is a smaller portion for me, but I think gold belongs in every portfolio in some way, shape, or form.
“Commodity cycles typically last for 20 years…. We think we are in the early innings of an extended bull market in commodities after a deep commodity bear market…. This is a very different environment than it was 10 years ago to invest in commodities.”
- Dave Schassler
He also mentions that REITs and infrastructure assets tend to do well later in the inflationary cycle. This one is a little shorter at about 40 minutes. If you are interested in a well thought out case for different assets for an inflationary environment, this one is worth a listen. You can find it on YouTube here and on Apple Podcasts here.
Oil Ground Up - You Cannot Out Policy Physics
If you are interested in the energy sector, more specifically oil, this one should be right up your alley. Tony Greer and guest Dave Williams discuss various parts of the energy sector. They talk about some of the differences between large vs. small energy companies and go into carbon capture programs and other ways ESG influences the energy sector. They also talk about the raw materials that go into a battery, including the artisanal mines and child labor in certain mines around the world. I don’t want to spend too much time summarizing this one, but I do want to include a couple quotes that readers might find interesting.
“Batteries store power, they don’t generate it…. If you take the best batteries in the world that are made by Tesla, that I think are in their Model 3, if you take how much they weigh and how much they cost to make, you would have to spend 250,000 dollars and you would get 20,000 pounds of batteries to equate to the energy storage capacity of one barrel of oil (1700 kilowatt hours)…. I see the administration is pushing for renewables and clean, but you can’t out policy physics.”
- Dave Williams
“Yeah, the big mismatch with the policy is that all of a sudden, as they are trying to push renewables, we have got to shut down the fossil fuel industry and take your gas stove. That’s the part to me, that on its face shows that the ESG movement is really a lot about politics and money. You have clearly proven that with that one equation that it is not about energy efficiency, it is not about cheap energy, it is not about civilization, it is a money grab.”
- Tony Greer
“There is such a push on changes to electric cars. That’s hilarious to me on why that’s the focal point. Another one of the martini discussions to have is right now we have like 4 million electric cars, and people are talking about trying to get that number up 100 fold in two decades. In two decades we want 400 million electric cars on the roads. Well, right now, we have 4 million electric cars in the world, but there’s a billion automobiles on the road today. Those billion cars use about 30% of the world’s oil. So, there’s a focus on cars, but they are only taking up a third of the oil demand. So, if we go ahead two decades to 2040, we will have 400 million electric vehicles, but it’s estimated we will have two billion total automobiles. So, if you go from one billion to two billion, and we are able to achieve 4 million to 400 million electric cars in two decades, you’re only going to reduce world petroleum demand by 6%.”
- Dave Williams
This podcast is about 40 minutes. It’s full of interesting facts and insights into the oil sector and some of the political factors that influence the energy sector. You can find it on Apple Podcasts here.
Honorable Mention: Coal Is The Future
This one is more of an honorable mention. Most of the podcast is spent discussing bitcoin mining, which I didn’t find that interesting. There is a ten-minute chunk in the middle of the YouTube video (link here) that talks about coal and some of the uses that most people don’t know about. If you are interested, you can skip to the 55-minute mark where they discuss a couple topics that impact the coal industry. It fits in well with my post yesterday on Peabody Energy BTU 0.00%↑ .
Disclaimer
Nothing discussed here is an investment recommendation. You should do your own research before making any investment decisions. Each investment discussed has different risk & reward profiles that might not be suitable depending our your situation.