YouSaid · the spoken record

Citrini

lines on the record: 123
first: 2024-06-18
most recent: 2024-06-18
sittings or episodes: 1
sources: podcast

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“On June 2nd, I published that we were going to sell Google in our AI basket and go long Apple. And that worked out pretty well with the WWDC. And I think that what we're going to see from here is basically There's going to be more dispersion in the Magzetan because of this. And so if you ask me, well, how is Tesla not an AI company? Well, I don't really think that Tesla has a real kind of expansive trust that it can tap into. It obviously has a very passionate user base. Yeah, but it's kind of, have you ever seen the movie Gattaka?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Say, hey, you know, what was that meeting that we had last week about so and so? And then it tells you, and you say, Oh, okay, you know, let's email that guy. Let's find a place in my schedule where we can do that. And then as you interact with this, it's going to increasingly kind of get to know you better and get to anticipate your needs and do inference and be able to kind of infer things. And if that's where we're going from here, the biggest component of who wins in these companies for kind of consumer and even B2B focused AI, it has a lot to do with trust. And when you look at a company like, say, Google or Apple, right? And Google has, the stock price has pretty much shrugged off these kind of faux pas that it's had with AI. I don't know if you have been following this.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Apple, Microsoft, Google, yeah, Amazon. Yeah, what I know this is a little bit of a tangent, but something that I wrote recently at the end of May was that What we're going to see now is that competition has to heat up because the way that it looks like AI is progressing is essentially going from here's chat GPT and you know you can use that as a productivity tool and here's like all these various startups and everything with with their ai tools but the real value of ai is that you know the hottest new coding language is english right and being able to interact regularly and effectively with words with uh you know like an ai assistant and have an ai assistant that is using uh whether it's agents or these kind of uh quote unquote specialist models that are really aggressively focused on their smaller models but they're really aggressively focused on specific tasks and have being able to walk down the street and not and work and not be on your phone and looking down and just have you know and your phone and”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I just think that the hyperscaler environment right now and also just the environment of AI and companies like that You know, just to go off on a little bit of a tangent, I think that when you look at the landscape right now and all of these gains that have kind of accrued to the hyperscalers and this like fierce competition in AI.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“If you're like constantly under the threats that if you don't pay this guy enough, although I will say that with the shareholder meeting, I'm pretty sure they'll vote his way. And I think that's probably.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“This is great, Jack. You know, I like how you had me on when everyone hated AI and I got to be bullish on AI. And now I get to alienate all the real Super Bowls who are also bullish Tesla because Tesla's a car company. I think that the Robo Taxi thing. I said back and even before I was on the podcast the first time I said you want to be long AI and short Tesla and so it was it was good because I got to really piss off the kind of bears by being bullish and then really kind of alienate everyone that was also very bullish because they were likely to be bullish Tesla as well. But Tesla is how can you be involved in a company with such like crazy governance? The idea that I think Elon Musk saying basically, well, I'll take my AI efforts elsewhere. Can you be an AI company?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“There are some people who would consider you to have a, oh, this guy's focused on AI pie in the sky thing. So I want to ask you about what do you think about the Tesla's as an AI company and Tesla as a beneficiary of robotaxis, as well as the most recent ARC open letter where the current stock price of Tesla is, let me get it, $178. So ARC has an expected value in Tesla in 2029 of $2,600 per share. Their bull case is $3,100, and their bear case is $2,000. Again, I repeat, the stock price now is $178. So their bear case is a 10x. What do you think about Tesla? I haven't really seen Tesla in any of your baskets.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“They're super cheap and just even better than the ones we have here, you know. And it's kind of, I mean, it's a shame, really, that if you look at what happened with like Japanese imports, it kind of elevated where you can't have one country that's constantly just sending these cheaper vehicles eventually the domestics kind of have to keep up. But I mean, Tesla has always been pretty good at playing, you know, whether it's government subsidies or government policies. And that's something where I don't think that we're ever going to, the US is never going to let in these Chinese EVs because it would completely destroy the US electric vehicle market just because there's no way to compete. They're so far ahead on production. And so I think that the Chinese kind of electric vehicle market, it's probably going to stay in China.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“That's a pretty interesting one. I mean, it seems like Europe originally was a little more accepting of the Chinese EVs. And they might be pivoting a little bit away from that. And I think that have you seen one of those electric vehicles?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Bipartisan agreement on US protectionism when it comes to China, it's pretty significant. There's no real China doves in the government anymore. So the way that I kind of view this is, you know, I'll look at Biden just passed some tariffs on China that were a lot more specific than what Trump's would be. If I can create a basket of stocks with longs like Beckton Dickinson and then short, like cardinal health and have this kind of exposure where it will likely get impacted by tariffs that are already existing under Biden that will only get expanded under Trump. You know, that gives me another kind of margin of safety. And as far as, you know, I'm not going to outright just short Nike because of tariffs, but in a collection with Target Restoration Hardware.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“That's where the basket composition comes in. And this is an evolving thing. We'll see it's going to be based on rhetoric in the debates. And I think that you kind of get a little bit less risk of just, well, what if this single company is able to diversify more away from China or they anticipate that the tariff risks will be higher? This is where having that diversification within kind of a theme works out. So, for example, the tariffs would be long DJs, long raos and like the long, a good example is like Beckton Dickinson, right? Like long Beckton Dickinson and then a short CAH and that's because of like specific tariffs on syringes basically and the thing is like”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Fossil fuels. So I'm going to go long clean energy stocks like ICLN is an example of an ETF. And then I'm going to go short energy, you know, XLE. You would have gotten destroyed, right? The returns would, you know, I have a chart of it, but it's pretty much down only. And that's a great example of saying, oh, Trump wins and then stocks go up or Biden wins.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Kind of collections of single companies. And as far as the overall economy is going to be much more important, and that is kind of where you get this disconnect of like, well, what are stocks going to do? You could have said any number of things about how stocks are going to do under, you know, Biden or Trump. So the thing is, predicting the entire stock market off of just a single election is going to lead to some pretty wrongful conclusions versus just trying to predict kind of the impact of specific policies. A good example of this is imagine it's 2021 and Biden has just won over Trump and your conclusion as well, the Democrats are a lot more accommodative of clean energy and they're not that friendly to.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Well, but you look at companies margins and like the beginning, especially during the 1973-74, as inflation went up, the margins on the S&P went up as well. And so I think that you would have to basically answer, you know, how much can Trump bully the Fed, right? If you get like this large fiscal stimulative pro-cyclical fiscal deficit, again, all of this kind of comes back to the actual effect of the election on the overall economy, which I think really is not extremely significant. The place where I want to be positioned is in the micro side, right? I want to be kind of hyper-focused on the impacts of trade policy and tax policy on”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but just because I think you're right, there were years of good performance in the 1970s, but I think the 1970s was one of the worst. Performances in real terms, one of the worst decades for stocks, probably even worse than the 2000s, which included the great financial crisis”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Sure, yeah. And that gets into kind of an interesting question of inflation. Is inflation bad for stocks or is the central bank reaction bad for stocks? Is it actually, because inflation probably inflation itself is not the worst thing for stocks? You look at the 70s and like the period of time where the kind of like Burns reaction, years of pretty good returns in there, but it was obviously the Fed's reaction to inflation that drove stocks down.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Why is that if stocks like large fiscal deficits because they're stimulated to the economy, wouldn't the scenario where you'd have the largest fiscal deficit be Republican in the Oval Office and running Congress or Democrats in the Oval Office and running Congress?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I don't know, but I have thoughts that are kind of contingent on specific things happening, you know, like I think it's going to depend what Trump can get through on the trade policy side. I can tell you for sure that, you know, if Trump got everything he wanted on the trade policy side, I don't think that the tax cuts and kind of supportive policies would be enough to offset the inflationary impulse. So I think that Really, that's something where we're going to need a little more information leading up to the election about exactly where their priorities are and kind of, that probably will be a lot more driven not by who wins the presidency, but by what the House and Senate are because stocks do better historically under divided governments. So I think that probably...”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Republicans are coming out in support of crypto. Paul Ryan, very notable deficit hawk back in the day. Talk about how we're printing so much money. We're borrowing so much money. Our grandkids are going to be saddled with debt. Now he is a stablecoin promoter and talking about how stable coins are necessary because they can help us increase the amount because stablecoins will buy US treasury debt, which is true, but it's interesting, you know, he's kind of acknowledging that there can be the private sector can print money to buy the government paper that the government prints when it borrows. So a little maybe inconsistency there. It's similar to banks can just buy debt and then issue credit against them. What do you think just about the pure S&P 500, the stock market? Does it do better or worse under Trump or Biden and why?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Here's how I care about X, Y, or Z policy, but a lot of my net worse than crypto, so I'm going to vote for Trump. So what you saw right after that was the approval of the Ethereum ETF by the SEC. And I can literally imagine the conversation that was had between Biden and Gensler, where he probably just called him and was like, listen, I do not want to become the tough on crypto candidate because that is not going to fare well. So you have to get something done here.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“That might be an interesting thing to talk about because I don't know if you saw recently Trump came out and was very supportive of crypto, right? And so the most interesting part of this that really in hindsight is pretty obvious, but the Biden administration does not want crypto to become a single issue, right? Where it's like that's an issue where people vote along the lines of where everybody that owns a significant amount of crypto is going to say, well, you know,”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So, the other themes are you call idiosyncratic Trump beta, which is just stocks that are associated with Trump. So Fannie Mae, Freddie Mac, Rumble, conservative app, Trump Spack, Trump crypto tokens or NFTs, although I don't believe that those are part of it.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Good example of like how hard this stuff is to predict was the performance of clean energy stocks versus energy stocks when Biden got elected because it's like if it's 2021. All right, well, if a Democrat's getting in, you know, that's probably not great for energy, and that's probably pretty good for clean energy. So I'll go along, you know, ICLN and I'll go short XLE, you would have gotten destroyed, right? And that's like a great example of how the economy is always going to be the macroeconomy is the primary driver. And that's a lot more important than who wins the election. But so you have to be really selective about not just doing these kind of blanket things and blanket assumptions of what the Republicans and what the Democrats are like and finding areas where there's an outsized impact from specific policy rather than just how you think things will do because X, Y, or Z administration.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Playing the election and informs kind of AI through the chipsack stuff and China informs AI, AI informs China. So I think this is like what I personally love about it, right? I love like this massive puzzle. And sometimes you get moments where you kind of see where the pieces are going to fall, or at least you think you do. And that's my favorite part of it.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“China, that line has gone parabolic, right? Because China realizes that the only way that they're going to have some independence here and not be beholden to a US company, which is distasteful for them, is going to be by doing their own build out and trying to basically create something that puts them a little ahead. Do I think that China will ever in the next five years will create something that's better than Wet Nvidia has for the purposes of doing AI and machine learning? Probably not, but can they create something that is better than what's needed to exceed what they're allowed to buy from the US? Or can they focus more significantly on whatever inference or another area of AI or custom silicon? This is all super interesting and it kind of informs how all these themes, you know, fiscal informs.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“When I first put this China trade on, which the last time I was on here, I think I was complaining about how badly it had done. But it recently has, for a little while, very small amount of time. But for a little while, it was outperforming Nasdaq since I had put it on. I think that is back to underperforming the Nasdaq slightly. But performing a bound line with the S&P The way that I look at it is from the AI side, okay, I'm going to focus a little more on the necessities of China having to build out its domestic semiconductor industry, right? Do I think that they will necessarily be successful in whether it's focusing on ASICs or trying to create a GPU that I don't know? But what I do know is that they're going to try. And if you look at like Japanese exports of semiconductor capital equipment, semicap, to”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Which obviously did not end super well. You can basically create a reasonable allocation. And this is the interesting part of how I run, or at least it's interesting to me. The interesting part is basically how different themes kind of inform one another, right? My allocation in China is directly going to be impacted by what I'm thinking on the election or what I'm thinking on AI, for example. There's a lot of really contentious stuff going on where China, if we're constantly saying, okay, China, you can buy the generation of chips that's too below whatever NVIDIA has out right now. They're not just going to say, okay, cool. You know, they're not going to just relegate themselves to constantly being at a disadvantage in this technology.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“He basically said that we're nearing the third plenum and we are increasingly likely to see Chinese consumer stimulus stimulating consumer demand, basically like helicopter money or not probably not as extensive as what we did during COVID. But the general idea is basically you have this situation where consumers aren't levered up that much. They're not spending that much and they're the household savings high. So you kind of incentivize that spending. So I think that that sets up pretty nicely where even if Trump wins in China, it seems like you want to be positioned for the kind of localization of the Chinese economy. And the idea that if they are going to do that, if the stimulus materializes and it looks a lot different than the previous Chinese attempts at stimulus.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“The tariffs that are proposed by Trump, but they're pretty aggressive. It's like a 10% tariff on anything that's not US-made and then like 60% tariff on some Chinese goods. All of this kind of informs also how I want to be positioned in China. I don't know if you saw recently Michael Pettis on, yeah. Did you see that?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Anticipate well because it's pretty clear what they're going to do from a tax policy perspective. And while large cap companies don't really trade on after tax earnings, it does make an impact of how much money people have and how much money these companies have to kind of invest and do CapEx and do R&D. I think that when you're talking about forecasting the deficit, I don't really know. How does it play out? Trump's tax policy make it so that since there's more money to invest, that we get more productivity and the government gets more tax revenue or does cutting taxes while spending the same amount, which I'm pretty sure he will. Does that increase the deficit? I don't really know, but what I do know on the tariffs and tax policy, those are two places where whenever the outcome comes out, that's what I'm going to be playing. Because as far as, you know, I don't know if you've seen.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Tax rates between the time when the TCJA came in to 2018 just to eliminate the COVID kind of, that's the thing. If you're analyzing these two things, you really have to just take out COVID because this was the biggest bipartisan thing ever. So before the CARES Act, basically, and then examining who were the biggest beneficiaries of kind of the Trump tax plan versus who were the biggest beneficiaries of Biden's tax plan and who was hurt by either. So I think that that's kind of an area where you can really”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Global minimum income tax or for corporations guilty GILTI. It's currently under the TCJI there are incentives to repatriate foreign income, but that expires in 2025. So Yellen has expressed hope that Congress will basically admit us to these 140 countries signatories where no matter what you do, like for example, pharmaceutical Big Pharma, they have a tax loophole that I think is called single malt, which is basically hiding your intellectual property kind of revenues in Ireland that's owned by a company in Malta. I don't know. I'm not an accountant, but there are all these loopholes where you can kind of shift overseas and that would be the tax burden on companies would be pretty significant. So, you know, what I've done is I've looked at what were these companies affected?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“He has a very kind of aggressive tax policy where you're going to do tax cuts and you're cutting the corporate tax rate and you're extending this kind of like 100% bonus depreciation in the first year. And then on the Biden side, it's a lot more aggressive where you have raised the corporate tax rate to 28%, quadruple the stock buyback tax to 4%, eliminate tax subsidies for fossil fuel and real estate and executive comp.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Sides are profligate spenders. There's the era of the conservative fiscal policy, I think, has been disrupted by the paradigm of the US increasingly kind of being a little more populist, where you spend money because you want people to vote for you. And that's, you know, I don't know if that's cynical or whatever, or maybe that's my own political bias in the sense that like I don't favor either party, but it is something that I think we have seen very significantly. And I think that the deficit, that's one area where it might be a little larger under Trump, but ultimately the offsets of like, you know, the tax policy differences, one of the first things that's definitely on Trump's agenda will be extending the TCJA. Which is the”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So there's two sides, right? Laissez fare and then Dirajist, right? And laissez-faire, you know, in French means kind of like let alone, you know, just like let the market do what it will. And that used to be kind of the policy of the GOP, where state intervention for curbing inefficiencies or whatever doing counter-cyclical stimulus it was much more kind of let the market sort it out and you know and obviously there's still differences in how these parties approach it but TRG is kind of the opposite of that where you have a very involved government has you know like indicative planning government credit policies subsidies kind of fostering the areas where you think there's going to be the most productivity gains and both”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“You said something interesting before I answer that question, but the idea of when the trickiest part of this election is essentially that it's a rematch, right? And that kind of makes it very tempting to just go and backtest, you know, well, how did stocks do when Trump was president and how did stocks do when Biden was president and then call it a day? And, you know, that's not going to work. First off, obviously the economy and external factors are much more important than whoever's president. The places where election kind of focus strategy will work is going to be more in the micro side, I think, than the macro side just because you want to be very specific about the areas where things will be different. This kind of gets into the idea of not playing the expectations surrounding the election, but playing the actual outcome of the election.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“U.S. fiscal deficit was. Large, you know, ever since 2002 under Obama 2008, the economy clearly needed a giant stimulus. Trump, as a Republican, when he was elected in 2016, ran a large pro-cyclical deficit with tax cuts. Then a huge amount of simplification in 2020, again, under Trump, but of course that was for the reason of the pandemic. Biden is also running a very large, smaller, but still very large. And again, you could say that maybe Biden's deficit now is more large than Trump's was with the consideration relative to the circumstances because we're not in a, you know, unemployment rates not at 20% now in the same way that you could say Trump's first deficit in 2016, that was deficit when the economy was expanding, unlike when Obama got elected and clearly there was a need for massive fiscal stimulus because the economy was in a deep recession and getting into a worse one.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“On Long Un staying the same or even going up, kind of a bond market revolt. So I think that's like my one, I don't really have a view on like, how does the dollar do if Trump gets in or Biden or whatever? But as far as the yield curve, I think that if Trump wins, we get a pretty significant steepening.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Anyone, but I do think that the political pressure for the Fed to lower interest rates would be extremely significant. And I do not think that there would be some degree of caving on that. And at the same time, you have Trump's policies, which are basically cutting taxes without cutting spending. And you have this kind of trade policy tariff stuff. It's all pretty inflationary stuff. And obviously dependent on whether the economy can absorb that. But I do think that in the beginning, what you essentially have is the bond market saying, well, if that's the case, then why wouldn't I just own the front end? And so I think what you could end up getting is basically significant drop in rates on the front end and with kind of”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, great book and really rare opportunity to have the sitting Fed shared than have such an extensive look into his thought process and his values. And that was really very helpful in the fallout of kind of Silicon Valley Bank and the regional banking, whatever you want to call it, Bruhaha crisis, whatever, because you could basically go through that book and control F like banking crisis. And you would see what Powell thought during, I think it was the savings and loan crisis where Powell had this mentor blanking on the exacts of it, but he was very pro not letting the banks fail. And, you know, so it really, if you haven't read it, I would say it's definitely something that you should take a look at. But I think that one of the interesting parts of that was this contentious relationship before COVID. Obviously, of Trump and the Fed. And that's not a secret.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“You have an epic steepening in twos, tens, the spread between the two year treasury, the 10 year treasury, the 10 year, the two year. Now it's inverted two years higher than 10 year. You think that would change why if Trump got elected?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“You're not going to get that benefit if you try to onshore production of whatever it is, vehicles or precast concrete or whatever that is. So you look at kind of like this the way nearshoring has played out in Mexico. And it's been great for them. But if Trump gets in, I think that what we'll see is probably a lot more spending on kind of industrial automation equipment providers, advanced manufacturing. And you could see a lot of America first kind of policies about supply chain resilience and trade tensions and get some losers and kind of Mexican manufacturing and logistics. And then on the macro side, I think there would be some implications, obviously, there for inflation. I'm not going to go too far into that, but the one macro view that I'd say I'd have on the election, I think that if Trump gets in, we'll probably see one of the most epic twos, 10 steepeners in the history of Tuesday.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think so, but you know, the really interesting one, I think, is kind of onshoring versus nearshoring. If you look at kind of the way that the Democrats have approached the pivot away from China versus the Republicans, the Biden administration has definitely favored nearshoring, especially to Mexico. And I think that the Trump administration would probably view that unfavorably because of the negotiating leverage that it gives Mexico. And their stance on illegal immigration would also factor in. But, you know, onshoring the idea of not shifting from using one emerging market to another, but actually bringing production domestically, I think that really that's only feasible for a first world country if you make significant progress in automation. Offshoring or nearshoring has solely been driven by labor cost differences.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I don't actually care if they actually do it. The thing is basically just playing the expectation of it, right? And so this is basically a basket that's just solely the purpose is just to play election expectations. So if there's a higher, if Trump's odds are rising and there's a higher chance of essentially, you know, well, there's a higher chance of Republicans doing it than Democrats. I actually don't think that they'll do it either. But that doesn't mean that if there's a higher chance, then the security is probably should price that in, right? So, you know, stuff like deregulation of the financial sector, mergers and acquisitions in a Trump scenario of immigration, that's kind of a classic one, you know. And then the other thing is basically, I think that no matter who wins, there's going to be some sort of protest or whatever. So I've found a name that basically makes the...”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So you have a bunch of different buckets within your election basket. So for example, on the defense side, if Trump wins, the basket that benefits from Trump winning would be long European defense stocks and short U.S. defense stocks. Then there's winners and losers from increased tariffs. Then there's bets on Trump-specific securities such as his SPAC, Fannie Mae, Freddie Mac, which some investors think that Republicans are more likely to deregulate that or reprivatize Fannie and Freddie, which got taken over in 2008, of course. I think Republicans are more likely to do it to Democrats. The question is, are they likely to do it? Trump didn't do it in his first time.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“We're absolutely not paying that. So for a while, that was my way of playing the election. Just long European defense companies. And then as the election drew closer, I started saying, okay, let me kind of separate this out into where I think there could be outperformances we get closer to the election. And then on the other side, there's the actual impact of whoever ends up winning. And the two areas that I think that that really will show itself is basically a trade policy and B, tax policy. So that's pretty much how I've approached this so far.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Impact because people want to be positioned for that. And then you have the actual outcome and how that will affect markets. So what I've done is essentially created two strategies. And the first one is playing anticipation of the election and playing what's likely to be said or what has been said, how people will react to when I wrote a rising Trump odds. Typical example there was Trump came out one day at one of his rallies in February and said, if you're a NATO member and you're not paying your fair share, Russia can do whatever they want to you. And the idea that forcing these kind of NATO companies to meet their obligation to spend 2% of their GDP on defense, that was a huge delta or represented a huge delta for European defense companies where countries”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Basically, while people began to understand this, so I focus a lot on policy because you look at how Encore Wire has performed. I think it's up 150, 200% since then. And with an election year, I just think that, listen, forecasting elections is a lot harder than forecasting stocks. I'm not someone that's going to tell you who I think is going to win the election. Come in with kind of a Boy Scout mentality of just, you know, be prepared and be ready for whatever tales might surface. And I look at the election in essentially two phases where in this kind of first stage you have the market reaction to the rhetoric from presidential promises or debates and what politicians say they're going to do. And that has a lot of market movement.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“If you're building a efficient building, as you can see, infrastructure investment has performed a lot better than most other areas, all these build outs, you're going to need to put in American-made components. And that goes beyond just assembling the component in America and putting it in. It also includes basically sourcing from companies that are doing this in America. So you look at the options for basically copper wire. And the biggest one that produces their copper wire in America was Encore Wire. So if you're going to build an efficient building, you're going to need a lot of copper wire. And you're only going to get the tax credit if you buy from a domestic component requirement company. And so you look at how Encore Wire reacted after the inflation reduction text came out. And there was a delay.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“The reason why I try to focus so much on policy is because I think that the idea of getting an edge from just when you look at, for example, the Inflation Reduction Act or the IIJA or the Chips Act, there is a real discernible edge in just reading those documents and finding out kind of all that money that's spent. It ends up going to someone, right? And a lot of times those someone are publicly listed companies and there's a direct impact on their earnings. So a good example that I use is you have a company called Encore.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT