Deregulation as an underpriced corporate tailwind
The guest argued that deregulation accelerates time-to-market, lowers compliance costs, and boosts corporate profit margins, representing an underpriced investment theme.
The argument
Michael Gayed explained that the US outperformance over Europe is structurally tied to lower regulatory friction. He noted that while the market remains heavily concentrated in passive AI plays, active exposure to sectors like financials, energy, cannabis, and aerospace will benefit from ongoing policy shifts and executive orders.
The thesis, stress-tested
✓ What validates it
- ✓Executive orders actively cutting federal regulations
- ✓Decreased SG&A expenses related to compliance on corporate balance sheets
- ✓Faster federal permitting times for energy infrastructure and data centers
- ✓Official reclassification of cannabis at the federal level
▸ Risks discussed
- ▸Regulatory rollbacks have a lag before showing up in corporate earnings
- ▸Political regime changes can shift which sectors receive regulatory relief
- ▸Market concentration in passive AI mega-caps may continue to overshadow value-tilted deregulation plays
Hear it yourself
"What was the original insight behind FMKT? How was deregulation becoming an investable theme that perhaps markets were under priced in? Yeah. And it's interesting. Right? So, when when Trump got like, I've got this large network of advisers that I talked to, 350 advisers that I regularly talk to, which is why my calendar is always so jammed. And, one of the advisers said to me, you know what? It would be a good investment ideas, you know, something that focuses on deregulation. And he was kinda saying it kind of off the cuff."
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