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Armored Wolf Managing Director John Brynjolfsson on the economy and Federal Reserve’s impact on investors’ portfolios.
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Do investors.
Have the all clear signal to -- by the way you're late.
OK I mean let's just be honest about that but stocks hitting new highs once again today it is a question still.
Why not ask the man who launched one of the most successful funds of all time.
-- -- Yeltsin is the man who helped build the Pimco real return -- taking it from zero to eighty as an eighty billion dollars.
And he is now the managing director at armoured wolf good to have you.
Good to see you this not only do what want to know what you were doing yesterday Lou what you're buying what you were selling but what let's start.
You were doing a year ago where where you bullish a year ago in the face of negative headlines about Europe and all -- worries initiatives.
Read that the best trade about a year ago is was high yield high yield spreads were near not well yields are about 10%.
And those that come down it into towards 6% now so we had a huge compression high yield double digit returns and high yield.
So that was a great -- for you right and -- where you pro equities at that point did you really believe that we would see decline that we see you know ultimately I -- the risk.
Return in high yield -- much better.
One of the things that we're doing in the equity space is buying put some S&P down below the market.
To some extent the economy is kind of going to be in a bifurcated outcome and what I mean that as as long as things keep going well.
Things things are fine but suddenly if things start unravelling in terms of -- exit strategy from the Fed.
Weak dollar weaker earnings budget problems then you have.
But rather sharper decline and were positioned.
For a sharper decline.
-- a grinding higher.
Could you just said were positioned for one or the other how do you position for the moment when the Federal Reserve.
Just can't take it anymore and they realize you know what the economy perhaps is -- to the point where we -- show us incrementally tighten rates.
How do you position your portfolio for that -- which you have nearly a billion -- I don't wanna be that last -- not the Dora wanna be at the front of that exit line.
And that would involve sharp rise in interest rates.
-- short the long end of the treasury curve where we think it's most vulnerable to that sell off on an exit strategy the Fed.
Who's a huge amount long term treasuries.
The treasury meanwhile us trying to issue long term treasuries the fundamental.
Mismatch there -- -- just press you on this you're short the thirty or short the ten.
That's elderly having women can be -- that the ten many Milan -- ten terms of occur -- even the five year right now looks pretty attractive because.
-- -- to eighty basis points -- yield there is probably safe for the short term.
But people are going to be looking forward and saying what happens when an inflationary gets up above probably 3% level.
I think that's when -- was such -- hit the panic button.
That would -- -- to yesterday as you watch the Dow finally hit an all time high after five years of talk about a grind.
Fingers bloodied climbing back up that wall you know what were you buying what -- -- Ultimately.
To try to yesterday treasured rallied quite a bit -- yesterday sold off -- -- high yield -- still works.
-- -- -- -- I percent vs 10% well now we're trading -- a much more tactically we're gonna have hedges on.
We're gonna buy that individual issues we like and then we have that put on the S&P down offsetting that -- Stress case scenario in terms of risk market.
-- -- investors a little bit when it comes to high -- -- but there's a twenty we show that on the screen there ETFs but are there particular names out there that you really like well.
I I've got one of the best traders and then in the country.
I'm running -- most highly of this he spent five years Pimco -- yeah what's -- name -- woman.
Mexico oil higher I branch I hope -- -- OK tell us of just so I really I have I really have to rely on him but he is turning net portfolio over.
Literally every week every month getting new name very active very active.
Is there you know in a -- to get into your hedge fund.
Our hedge -- Is for five million dollars liquid net worth.
Investors and we have a mutual fund told bricks and then we run run the largest commodity funds in the world -- the Eaton -- commodity strategy fund now is there minimum for that.
Those funds and I think it's about thousand dollars so let's ask about commodities quickly -- what do you think about gold.
-- gold and gold and precious metals of of my favorite sectors within the commodities here really we've -- trading well -- betraying platinum vs gold.
Platinum is trading at David C 200 dollar discount to gold.
That's very -- I think Google I think -- platinum is being two or three times higher than gold.
That's -- that's I remember that.
And down so right now puns about even even dollar price to gold there was strike in South Africa yesterday.
Get a little -- -- platinum but it's still right in there with with gold so if you -- the -- Font.
24 commodities.
We have exposure to all of them.
And then we tactically trade individual clients as well.
With look to have you back for niche within next time -- had -- -- you also by the way that's an Icelandic name and it means.
Wolf with a code of farmer suddenly armoured wolf fun thank you very much good to see John and.
