The 'Forward Cap' portfolio beats traditional indexing
The guest presented a 'Forward Cap' investment thesis that allocates capital based on estimated future sector market capitalizations 30 years out, rather than current market caps.
The argument
By projecting five major macroeconomic megatrends - such as technology eating the world, rising healthcare consumption, and decentralization - the guest built a global portfolio that historically outperformed the broader US stock market in backtests.
The thesis, stress-tested
✓ What validates it
- ✓Technology sector weighting in the S&P 500 continuing to climb toward the projected 40% level
- ✓Outperformance of global healthcare and decentralized technology assets over a multi-year period
▸ Risks discussed
- ▸High active management and guesswork risk regarding 30-year trends
- ▸Potential for extreme short-term volatility and tracking error relative to the S&P 500
Hear it yourself
"Ends up being a very global portfolio and it ends up beating The US stock market, which totally shocked me because I would have bet you a million dollars that if I was picking a series of global instruments, that there was almost no chance that this would have beat a total US stock market index."
00:00 / 00:20
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE