Capital rotation from tech to real assets
The guest argued that a generational, secular rotation is underway, shifting capital out of high-multiple technology software stocks and into real-world assets and natural resources.
The argument
The guest pointed to rising global manufacturing PMIs and a rising ratio of Dow Transports to the Nasdaq (QQQ) as evidence of this shift. He noted that while the 'bubble economy' favored non-profitable tech, the 'anti-bubble economy' favors scarce, physical resources that cannot be printed.
The thesis, stress-tested
✓ What validates it
- ✓Continued outperformance of the Goldman Sachs Industrial Metals Index relative to the Nasdaq
- ✓Sustained increases in global manufacturing PMIs
▸ Risks discussed
- ▸A sharp economic slowdown could temporarily hurt industrial demand
- ▸Central bank policy reversals could temporarily revive high-multiple tech
Hear it yourself
"And not only are they nailing the macro trade to Austin, Texas, but then they're nailing this generational trade from, like, you know, high multiple software stuff to, like, real things that you need for the economy."
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