YouSaid · the spoken record

Felix Zulauf

lines on the record: 89
first: 2017-11-21
most recent: 2017-11-21
sittings or episodes: 1
sources: podcast

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“Absolutely, I think money management is a business for optimists because our system, it's a fiat currency-based system, it's asymmetric towards rising monetary inflation, and that is towards rising asset prices, and therefore a good portion of optimism never hurts.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Quite frankly, I'm glad I didn't know what I know today because I would not have been as aggressive then as I have been. If I knew all the risks that I know today, I would not have done as well as I have done.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Study history Study financial history also on top of history. Look at the long term trends, try to understand what zeitgeist and changes in the zeitgeist mean for financial markets. And after having read and studied all that, you go to the details that you need in your day-to-day business. You learn analyzing a company, you learn analyzing an economy, you look at the main factors that are driving a cycle and learn how the cycle works. At university, they do not teach you how a business cycle works anymore. It's basically mathematics calculations, but they do not tell you how people interaction work in the economy and in the markets.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the most German island off the Danish coast called Sult. It's a very German, very German island, but I love the climate. I love the calmness there. I love the nature. There are four golf courses you can bike, you can walk, you can enjoy the beach, there is a 30-mile beach you can walk. Can you swim there as gold? It's cold, but I grew up at the River Rhine that is always cold, so I'm used to that. That's no problem.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I read a lot. I love reading. I talk to friends. Actually, I talk to many people. I like communication. I do some sports in winterized key in summer I play golf. I go to the gym not too often once a week or so. I don't do enough sports. I walk, I bike, I love outdoors and I do that particularly where the ground is flat like in Florida or an island I have a domicile in the North Sea”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think at eighteen I sold out with a 50% loss and I turned the monitors up. I couldn't see it anymore. I felt sick. And then I went back to the drawing board and doing my analysis and I came to the conclusion this thing goes down to 10. And I wait. And when we are in the range of 10, around 10, I buy again and I buy three times more than what I owned before. And I did that about six months later, we were there and I bought that much and I thought we could have a rally for maybe six or nine months back to double basically. And it did double, and I was in San Francisco when Silva hit, I saw the headline in the Wall Street Journal, Silva hits 24. And I stayed up late at night in San Francisco to call my office in Zurich that morning. So I finally came out with a profit, but it was a long suffering.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, I give you another mistake I made. In 1980, when gold and silver peaked, silver peaked at 50 I was aware that it peaked and I had sold out before or near the peak. And then it went down to $35 from $50 to $35 silver. And then I thought it is now going to bounce to $45. So I wanted to be smart and I bought silver for a trade from 35 to 45 And instead of going to 45, it just continued to go down.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Mentally, it was psychologically, it was very bad. Really? And it really helps me to tighten my risk management procedures. Because when you are wrong in the market, you increase the risk of making wrong decisions and mistakes”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It went down 50% within six months. And I made a lot of money. And all my friends who have been... Japan bulls before always ridiculed me on the way up and on the way down they were angry because they lost more than in that year than what they have made before and I made more than I have not made before.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“The people, and it was painful for me because I was underway Japan and everybody was jumping on my back all the time. It was very painful and I refused to join in. Beach probably was a mistake, I suffered badly. I had enough extra returns before from the crash, but it was painful. And I went back to my analysis and I came to the conclusion that Japan would about peak and go down. And virtually on the first day of trading in 1990, January 2nd, I think it was in 1990, I put out my big shorts in the Japanese stock market and I wrote it down for, I think it was about 12 months or so. It went 40s then.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I missed the rise of the Japanese stock market after the crash of 87 to new highs. It was the only stock market that went to new highs in late 89.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's basically across the board because eventually those bonds will end up on the government bonds will end up on the balance sheet of central banks. The Bank of Japan already owns more than half of the JGBs. They own already about 15% of the outstanding equities of the market. The Swiss National Bank is probably one of the biggest individual shareholders of all the large US stocks corporations And things like that is new. That is new. And I think it's here to stay.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that the fixed income market will suffer badly because the way we run our economic policies will eventually destroy the fixed income market.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“The biggest change is the intervention by the central banks and the compliance. I recently had lunch with a friend of mine who was the founder of a listed private bank in Switzerland. They operate internationally. And he said to me, look, I'm the only entrepreneurial guy at the bank left because everybody else is driven by compliance. And I think in investing it's the same thing. So we have lost in a way the entrepreneurial spirit in the field of investment because these central banking intervention just kills it.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“The recent book I read, biography, was the former chairman of UBS, whom I knew very well, Holzach, Mr. Holzach, Robert Holzach. He was really... The brain and driver behind making UBS great before the youngsters took over and run it against the wall. And he always... He always warned against those fascinating investment bankers who always overdo it. He always warned against that. He praised me in the UBS journal, internal journal after the crash of 87. He was the only one who praised me. And I quit after that because I knew my career was over.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Hedgehogging, that was a great and entertaining book. You learned a lot. Those are the type of books that I like. And then history, economic history, lots of finance, things like that.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“A book that every serious student of the market should have read is One Way Pockets we talked about earlier. I loved those market visit books.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I really didn't change. I always have been a macro guy in my younger years, George Soros was inspirational in that sense. I later thought that Stanley Drackemiller, who is a few years younger than I am, probably played the macro. The best. I know. I think he is a great guy. Those were the people that were influential.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Rico Clerici was my boss at UBS. I learned a lot from him. He is a cycle guy and he introduced me to Deeper into the business cycles and the long waves and all that stuff. And he's a good friend nowadays, not as close to the markets as I am, but he was a great man in my career. He also taught me to write. You know, when I had to write the investment strategy for the bank, it was always very tough for me at that time, younger years. And then I handed it in to him and he came back all red, you know, and it was so frustrating, but over time I learned and he was a great teacher.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“The other thing I'm a happy family father, very modest person. And I'm a very happy and optimistic person, which is not your public persona. Yes, I know.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And keep the system afloat, and it will be underwritten by central banks. Who else could do it? Central banks will do it. And that leads to a situation that I dislike as a citizen of this world dislike because it leads to much more central planning, higher government shares in our economies, less prosperity, less freedom for individuals eventually.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Before the cycle, I thought zero was the bottom. Now I know that zero interest rate is not the bottom. I think next time it will be huge fiscal spending, huge fiscal spending, infrastructure spending to just employ the people.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“If it's a secular change, then it would have to do with central planning type of sciental banking for the long term. That would lead to an environment of ever-inflated asset prices. It would lead to much higher inflation over time, and it leads to much less efficient economy and the less productive economy and the less prosperous economy. I hope that it does not. My fear is that it will. So in the next downturn, next recession, next crisis, you will probably see that governments all over the world will launch huge fiscal programs to support the system.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it makes actually markets less efficient and it should create opportunities for stock pickers over the long term, but it may take much longer until the discrepancies are discovered by the market because of indexing that is growing its share of the market in general. So as long as this trend towards passive investment continues, it's very difficult for talented stock pickers to create the extra returns because the value on their investments is there, but the market does not discover it until the passive investment fed is gone or is being reduced.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And therefore, the attractiveness of hedge funds has declined. I think if we go back to a more cyclical environment where you have a downcycle, then the hedge funds will come back. Some will come back and some will not, because in the last cycle, you saw that a lot of the hedge funds that used to be Hedge funds, as the word implies, were long only. And they had a few hatches on just to charge the higher fees, but they were leveraged long only, basically.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Investors and not so sophisticated long only investors so the average guy from the street. He buys his stocks and he has great performance because it's just very it's just doing very, very well. Why do you need hedge funds for? Because you can do it yourself or the central bank is doing it for you.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, a hedge fund by definition hedges part of its bets and usually underperforms in a bull market and makes money in a bear market and that adds up to a great long-term performance. This bull market has been going on longer than usual. So it's one of the longest bull markets in history. And I think most of us did not understand to what degree and for how long the central banks would intervene to the degree they did. And I think that created a big problem for the hedges. Because they had hedged beds out there when you should have been full-time or leverage long. I think that's the first problem. The second problem is that you have a situation where long only”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, protectionism and nationalism is not here since Trump. It has been there before. But the election of Trump made it bring up to the surface. So the next president, whoever he or she will be, We'll continue on that policy line of protectionism and nationalism. I'm pretty sure about that.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Blew it up. You see Right about when you were talking So it's not the same, but there are similarities and there is in the world people act as they act and people vote. And to avoid conflict, you need two leaders who understand all that and want to work it out in a peaceful way. I don't see that situation with the current leaders playing out in a peaceful way.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Rising nationalism. We had rising nationalism, we had migration, huge migration waves. There was a big wave coming to the US at that time. And you had terrorism. And you had terrorism at that time against the establishment because the whole situation produced losers and the losers were fighting against the establishment. And that's why you had terrorism.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“The hope is that he does not, of course, but the risk is that he does. And, you know, the time period I described in the late 19th century and early 20th century was very similar to today. We had globalization. We had free capital movement at that time. So we had no capital controls, nothing, which came later during the wars and after the war we had capital controls.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And to some degree France and Germany came up and they challenged them. And that led to conflicts. And I think we are in for rising conflicts in the world over the next 10 to 20 years.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Very low economic growth, and that creates a fight for more share of the pie that doesn't grow enough. And that creates competition. It creates protectionism. It creates conflicts. And you have a situation where the hegemon, the world hegemon, the US, is being challenged by a new power, China. And for the first time, a Chinese president said it very bluntly, we want to be number one. In 10, 15 years, we want to be number one. We want to close the gap of the leading corporations to the Western world and then surpass them. We want to be a major military power and we want to make an influence on the world. This is quite a challenge. And when you look at history, you can go Back the last time we had such a situation was about a good hundred years ago in the late 19th century, early 20th century when the leading hegemon was Great Britain.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Coming to geopolitics on that side, it's very important that if the world economy cannot grow enough over the next 10 years, and I think this is a fair assumption given the demographics. We have, if you look at the age class of up to 65 years. per year in the OECD, China, Brazil and Russia in that area we had since the 1950s every year twenty five to thirty million more people. Tremendous growth in 2008 we had 14 people only new growth Today we have 1.7. For 2017. Next year, it's zero. Thereafter, until 2035, the number declines to a negative 12 million. So you have a negative growth rate, productivity growth has peaked and is declining. And if you combine population growth and productivity growth, the outcome will be...”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Nobody ever intervened, nobody ever sanctioned them. If they had played according to the rules, there would have been a different outcome. It would have been a slower development process in China. and the globalization problems, so to speak, would have been much smaller. But nobody sanctioned them. And I think that's the problem. You have a system in China, a central planning system, that were run in the last 20 years for employment, not for profits. Whereas in the World Trade Organization, it really states that an economy should be run for corporate profits. You know, those are two ideologies that do not fit together in World Trade Organization. So that creates the problems.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“China entered the World Trade Organization in 2002 and they cheated every year. They stole technologies, they copied patents, etc.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have rising socialism, not just in the US, we have it in Europe as well. We have rising socialism. We also have rising nationalism because of globalization that has gone too far and created too many losers. We have rising nationalism.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I don't know the name yet, but I think, you know, a lot of Democrats, the losers of globalization, voted for Trump.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“regain control and I think this is not for good because this means Trump will not be able to deliver what he promised and only a very small fraction if at all that means all the voters who voted for Trump will get disappointed and I think the next US president We'll come from a political side that is left of Bernie Sanders. Absolutely.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Will I differ from most of the Europeans? They look at it and find it ridiculous what's going on in the US and say, oh, those silly Americans, etc. You know that. I think Trump went through the primaries and he beat 15 members of the Republican establishment and he was the only candidate who read the zeitgeist right. You see, and whether he has the character and the personality to lead the US as a president is another question. But he was elected for reasons to change policies. And I think since Bannon has left, which was his ideological compass in a way. I think it looks to me like the establishment has taken over at the White House.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That was the idea, but that was not tolerated by the EU. And that's why we have this situation. I think if the Brits are smart. And right now they are in political disarray. But if they were smart, they could decide what sort of policy serves. Their own country best and do exactly that and position them to attract businesses, and that would be very beneficial. At the present time, Theresa May has lost her compass completely. She will probably be a transition figure. And you need a new government, a new leader to make Brexit work for the UK.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And the Brits, the people were afraid to lose their jobs to those people because they were working for less money. And they feared they could lose their jobs. And that's why they voted for Brexit. Actually, the UK leader, Cameron, was meeting with Brussels and Berlin before the Brexit vote and said, give us a good point that we can open up a little bit or close the doors to some degree that we can have better control on migration. And they denied it, although migration in total in the EU is not a big problem. And they are very dogmatic, and they created Brexit.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“You create imbalances, you create imbalances, and the imbalances have to be rebalanced by transfer payments. And that, by definition, means more socialism, more redistribution, and that makes an economy less competitive in the long term. And the productivity and prosperity goes down. So it's a bad idea. And one of the cornerstones of the European Union and the free market is free movement of people. Sure. And that free movement of people in an area where you have completely huge differences in income and huge differences in wealth and huge differences in social security standards and social welfare, etc. creates migration movements. And you get people moving from the pool. places to the richer places. And so the UK got a lot of inflow from Eastern Europe.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“In Europe you have that situation where you have the European Union and the European Union is a good idea or was a good idea originally but the introduction of the euro made it an idea that moves towards centralization and moved towards centralization when you link currencies together of economies that are structurally completely different and different in terms of competence etc you shouldn't have the currency”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. Yes, there's the same thing in Europe. And the big beneficiaries were the platform companies, those who have their taxes paid in places where the tax rate is very low, those who have production where labor cost is very low and they sell their products worldwide. Those have the big winners and the shareholders of those companies. And I think that is backfiring. It's changing the political landscape because people are dissatisfied with their governments because it's sort of like they are working primarily for themselves and the big companies, the establishment, so to speak. So there is a big push against the establishment. It's in Europe and you see it also in the US.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Behind Brexit and Trump and rising populism, they are the losers and they want to change. They are losers or they fear to become losers.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I think they are all related to some degree and in some way. And I think it's a backfiring of too much globalization or an extreme globalization. Globalization in theory is wonderful because everybody who can produce something cheaper or better than anybody else does that and focuses on that and then you trade and that is beneficial to all the consumers. So in theory that's fine, but there are losers also. And when you look at the income statistics, we have built a new middle class in terms of a big push higher in real income in Asia and the emerging economies over the last 30 years. But at the same time, the real income has declined or eroded in the industrialized economies, middle class. And that has been the reason.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely, so we had a great year. We were up over 40%. That was the currency trade that made it for us. I always traded currencies. I always traded commodities. I always traded fixed income and stock.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Trade workout, and I think Dollar Yen went in in two weeks time from 145 or so to 108 or something like that. A huge move.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And that got a tremendous kick into China, but it hurt all the Asian economies, including Thailand, including Thailand, Malaysia, et cetera. And then we had the Asian crisis. And the Asian crisis was for many a shock. And central banks opened up the floodgates. And then we had markets going higher again. And then we had 98, we had the LTCM. And that was a big decline. And we had a huge move in the currency markets. The whole world was short, the yen. I think Julian Robertson at that time, that was a big problem for him. And I talked to him about two weeks before it happened because I was on the other side of the trail.”
2017-11-21 · Masters in Business · Felix Zulauf Discusses the Evolution of Markets · IDENTIFIED FROM THE TRANSCRIPT · source