Speaker 1it's friday october 23rd 2026 episode 304 i'm kevin muir and this week we have the great pleasure to welcome back to the show robert mullen founder of marathon resource advisors robert thanks for
Speaker 2making time for us oh god great to be here kevin thank you for having me
Speaker 1uh you know i was looking back and thinking about when you were last on the show and you came on and you had some great picks it was a terrific interview and then i watched the performance of your fund and it went straight up it was unbelievable everything you'd said was came true and it was straight up uh and it's since then i've been dying to have you back on the show because you had so many great insights and not only that i just want to you know put this out there right away i i get your letter you're going to get your letter and i'm going to get your letter and i'm going to get your letter in terms of to your investors it's one of the best attribution letters i've ever read
Speaker 2thank you i really appreciate that we put a lot of work into it yeah
Speaker 1i just i love the way you lay it out i love the way you explain to people uh what uh what contributed to it where what were the positives were the negatives i think that everyone should should take lesson from that if you're managing money go find robert's letter and and go and use that as a template because i think it's that good um all right so you were kind of talking about the the the the the the the the you were kind enough to say that you were going to get on the trading couch and uh talk about your indeed i'll stay upright
Speaker 2but let's go to the couch okay so one of
Speaker 1the things that we uh you know we'll just let's just start with creating a portfolio and one of the things that as you read your letters you'll realize that you don't just approach it with like i'm going to pick you know 10 stocks that are you know i think are positive and i'm going to be long those only and uh and that's all you think about it as creating a portfolio that has a certain characteristic of volatility and etc etc talk to us about that process yeah
Speaker 2so look when you talk to investors they end up wanting to 95 percent of the time they want to hear about what you're excited about today and the longs that you're picking and what's going on there um and those are look important and we put a lot of thought into kind of balancing the various resource sectors along uh in our long book you know around this construct of kind of high dividend paying resource equities that we think gives us a lot of asymmetry but that tells you a lot about you know how eventually you will get to a to B and probably the major drivers of a return but the path function can be very very different and that's where the things that people don't talk about a lot the short book uh the long volatility component of what we do those are the things that influence the path function and that at the end of the day I think is a more important driver of returns um to be able to manage through periods of volatility um and create what we hope to do which is we have not just great returns but some significant element of of uncorrelation or at best anti-correlation during times of market disruptions crisis Alpha for lack of a better term and if you can do that that's that's a unique Beast um and that's really something that we've been focusing on most people don't appreciate it very much in days where the S P just keeps going up into the right and you don't you don't you don't need uncorrelation because everything's correlated and it's all going the right direction right yeah but but that's that I think is it it's a lost it's a lost art um and you know you you termed me you know an empty room kind of guy on the last project my kids love that by the way they're they're like does that mean you don't have many friends um but but I I think there are a couple of empty rooms today that we can explore on the couch you know one of which is you know willingness to be short and patience with the shorts and the other is kind of embracing volatility and I think those I think those are things that go to the core of I think you kind of who I am as a person and what drives the way we construct portfolios
Speaker 1right so speaking of who you are as a person I had the good fortune to be with you uh last month and you had a line that I thought was so good and so funny and I said this is how much of a contrarian I am and he dot dot dot I'll let you finish off the thing about where you're from and what you ended up investing
Speaker 2in yeah look I I grew I was born in Stanford Hospital grew up in the heart of Silicon Valley rode my bike up and down Sand Hill Road for most of my youth on a big Loop you know 20 mile Loop that I used to do kind of up into the Woodside and Portola Valley Hills and I decided to be a resource guy and you know so egregiously um egregious amounts of wealth created in and around me um I don't want to say you could kind of throw a dart but you could kind of throw a dart and and do that and yet I decided to take a much more challenging much lesser traveled route shall we say uh and and be the real asset guy um the gift that I was the gift that I was thinking of in the the text chain that we had recently was you remember Steve Martin in the jerk and he's he's walking around and he's like that's all I need you know that's all I need this this remote control is he's at the bottom of his thing and it's like I have my value principles as a resource manager and I like my big free cash flow yields that's all I need is this you know 30 yield on my tanker stocks and my four times cash flow fertilizer company and that's that's all I need um okay so
Speaker 1one of the willingness to be a contrarian is actually to be as you mentioned short in this market and it is a difficult thing because everything's going up and not only that I guess some resource stocks going up but not everything and talk to us about first of all about the difficulties of being a contrarian in an environment where it seems so easy to just go by you know the Sandhill AI names and people have been doing so well and and yet here we are struggling with resource like why are we why are we doing that and then how do you hedge for it using this your short
Speaker 2techniques yes so look the the for all of what we do in portfolio management the question is why what purpose does it serve and usually the first question you get when you are a long short manager is do you make money on your shorts um and there are periods of time where we have and actually for most of the last decade we kind of did it's the last few years that had been a little bit more challenging on that but I think you need to take it up a level and and say what is the purpose of these shorts and you know I look at it in a way let's I'm going to speak in a very theoretical uh realm because you know we we've grown a fair amount recently we're probably going to have to be registering with certain authorities so I'm going to speak in general terms but if you look at a classic A.W Jones long short portfolio 150 gross long 75 grow short 75 net exposure what's the purpose of that 75 short and what level of the performance on that do you have to have to make sure that it is valuable to you um and it really depends on does your long book do reasonably well and if your long book does well the ability to absorb losses but still generate overall value with your short book is enhanced you know and let's just do the math if you're you know up a couple hundred percent uh and you were just running a hundred percent gross long book um you know you're up a couple hundred percent if you're running a 150 gross long book you're up 300 percent um what you have done to protect yourself if you got 75 percent grow short your growth shorts have to go down a lot your shorts have to be down as much or more than your longs are up to make that not useful to you so even if you lose 20 on your short book over the course of that same performance period you've lost 20 times 75 grosses you've lost 15 so instead of being up you know 100 you're up 150 minus the you're up 135 percent right instead of the hundred percent and so that has served a purpose so I think that's sort of the linear argument which is if you do have shorts that you think in you know most periods of time you can kind of break even on in times where you really need it you're going to make a lot of money because you know overall markets are uh introducing volatility a downside ball um that's that's really valuable um and so that's the linear argument is overall returns go up but I think the path function is much more important how does it impact how you are running money at the time of major drawdowns that's where a short book and we can get into sort of the long volatility component of that as well because I view that as kind of a separate entity that's where it becomes really useful because the difference in being just a long only manager where markets are starting to go against you and you're down 10 12 15 percent and the human reaction is to cut exposure because it hurts and look you may buy that first dip but when there's the next dip and the next dip after that you know all portfolio managers find themselves in a place where they're like just make the pain stop um and and and they're and they're degrossing at the time they're they're relinquishing opportunity at the time that they should
Speaker 1be embracing it okay so it gives you the ability to play offense when everyone else is playing
Speaker 2defense yes and that is where outsized returns come from the ability to step in you know in our particular case we like buying stocks with 7 10 12 percent dividend yields that are we view as sustainable to be able to buy those when the yields go to 12 or 15 or 18 that's the difference between you know that can add in one single three-month period of volatility bout a covid or a tariff tantrum or something like that that can add thousands of basis points of performance to your annual returns in a period of time where most people are losing that right and so so so that to me is an area where people are they're now kind of afraid to tread anymore even the classic long short managers they talk about i will short some etfs but there's just shortings too hard
Speaker 1really you you've noticed that that people are giving up on individual shorting
Speaker 2there's a lot of that where people are moving and and i think pods are moving to a lot of either super big index name only shorting big index names or shooting shorting etfs you also notice i used to have a great cadre of friends in the short only right they don't exist anymore that is you know that that they are few and far between today um and so uh you know when even guys like chanos and the sort of archetypes of that um genre have gone out of business you know i think that's one of the things that we need to be thinking about is that you don't hear anything about it you know for the same token you don't hear about the long volatility guys anymore you're not hearing about you know chris cole and diego paria and those sorts of guys who um you know you hear about them after 2000 or 2020 into 2000 and 2020 in tarragon you hear about them for brief periods of time and but you uh you know when you stop hearing about them it's probably the time you should start paying attention to
Speaker 1you're absolutely right there do you think that the markets have become less efficient like do you think that the part of the reason that these shorts have given up is because it does seem like almost impossible to win and the markets are diverging from fundamentals
Speaker 2there is certainly uh elements of that in today's market and i think the first order reaction to that can be i just give up i'm not going to try anymore um and whether whether it's passive flows that have been you know covered very well by guys like mike green etc you know other facets of uh of of this you know that i think you know we have some friends who have explored recently uh in uh you know the tax advantage or attacks uh the the basically the strategies yeah that's where long shorts so so there there are non-fundamental flow drivers of what's going on in markets that for i think the better part of the last three four five years have made traditional shorting you've had to be very adaptable to be able to because that was going to
Speaker 1be my next question how have you adapted on the short book given the change in the in the uh environment in the market environment yeah so
Speaker 2i think there are a couple of ways you do that um one is to be more tactical and say look i'm i'm more willing to if it goes ten percent against me just cut it in half cut it in two-thirds and be willing to come back at a later point and not die on that hill so to speak but i also think it's you it's the type of you have to understand the type of shorts that are working and you have to just observe and you know big companies that are in the s p 500 index uh you know i wrote a couple things about shooting against like deer i think i think i think deer um had like 15 straight quarters where they guided down and the stock just went straight up and to the right and it just multiple expansion multiple expansion multiple expansion and there is nothing that could explain it other than just index flows and uh and it was a bigger component of a bigger index and it's uh relative to stocks rs so you have to think about shorting stocks outside the index and that doesn't mean that you have to go smaller micro cap you can go into companies that are 5 to 25 billion dollars in market cap and just and just understand that those are going to be more fertile hunting grounds for what you do and then and sometimes you had to adapt for that size discrepancy you have to short bigger baskets of things and we'll go into sub sectors in the resource space and just go okay we want to 7 to 10 short here it's not going to be three companies it's going to be 10 because we want to be outside of the index flows so that we have what we think is at least more fundamental drivers to the companies that we're we're being short uh so
Speaker 1i'm just pulling up deer and you're absolutely right like the we're just pulling up deer and you're absolutely right like the uh so i'm just pulling up deer and you're absolutely right like the absolutely right like the absolutely right like the next 12 month eps just keeps going down next 12 month eps just keeps going down next 12 month eps just keeps going down it's recently gone up but uh but it's it's recently gone up but uh but it's it's recently gone up but uh but it's it's kind of shocking that the market is it's kind of shocking that the market is it's kind of shocking that the market is just assigning a higher and higher you just assigning a higher and higher you just assigning a higher and higher you know p to that thing feels like costco know p to that thing feels like costco know p to that thing feels like costco and all these other things that are just and all these other things that are just and all these other things that are just the quote-unquote quality but i don't the quote-unquote quality but i don't know how that's quality with eps falling
Speaker 2know how that's quality with eps falling know how that's quality with eps falling yeah well then i think if people yeah well then i think if people yeah well then i think if people retroactively apply a a reason for it retroactively apply a a reason for it retroactively apply a a reason for it right it's uh you know stock performance right it's uh you know stock performance right it's uh you know stock performance drives narrative and oh they're using ai drives narrative and oh they're using ai drives narrative and oh they're using ai to more effectively um you know harvest to more effectively um you know harvest to more effectively um you know harvest fields etc and they're they've got you fields etc and they're they've got you fields etc and they're they've got you know drone driven yeah you know so know driven yeah you know so they're more effective and it's like maybe they're more effective and it's like maybe they're more effective and it's like maybe that's part of it maybe not but that's part of it maybe not but that's part of it maybe not but that is narrative following price okay
Speaker 1that is narrative following price okay that is narrative following price okay so you talked about using baskets and so you talked about using baskets and so you talked about using baskets and so is that is that something you've so is that is that something you've so is that is that something you've recently done more of like the one of recently done more of like the one of recently done more of like the one of the solutions has been to kind of spread the solutions has been to kind of spread the solutions has been to kind of spread the risk go over more names
Speaker 2the risk go over more names the risk go over more names yeah and to be able to go down a little yeah and to be able to go down a little yeah and to be able to go down a little bit in market cap from where we are and bit in market cap from where we are and bit in market cap from where we are and still feel like we have the liquidity still feel like we have the liquidity still feel like we have the liquidity to risk manage those positions properly
Speaker 1to risk manage those positions properly to risk manage those positions properly okay got it uh the other thing you okay got it uh the other thing you okay got it uh the other thing you mentioned earlier you said there was two mentioned earlier you said there was two mentioned earlier you said there was two components to to running a long short components to to running a long short components to to running a long short book and one of them was uh shorting and book and one of them was uh shorting and
Speaker 2book and one of them was uh shorting and yeah yeah i look i think i think long yeah yeah i look i think i think long yeah yeah i look i think i think long vol may be the emptiest room around and vol may be the emptiest room around and vol may be the emptiest room around and it's it's like volatile the attempt by it's it's like volatile the attempt by it's it's like volatile the attempt by the allocator class the allocator class the allocator class has been to eradicate volatility from has been to eradicate volatility from has been to eradicate volatility from every component of their portfolio every component of their portfolio every component of their portfolio so what they really seem to be and so what they really seem to be and so what they really seem to be and i'm making a universal statement there i'm making a universal statement there i'm making a universal statement there it's not universally true there are it's not universally true there are it's not universally true there are folks out there who think a little bit folks out there who think a little bit folks out there who think a little bit differently and and want to do that but differently and and want to do that but differently and and want to do that but they're looking for low vol versions of they're looking for low vol versions of they're looking for low vol versions of x y z a b c they're looking for low vol x y z a b c they're looking for low vol x y z a b c they're looking for low vol versions of all of them that may or may versions of all of them that may or may versions of all of them that may or may not be levered up because of that not be levered up because of that not be levered up because of that control drawdown profile right um and control drawdown profile right um and control drawdown profile right um and they're looking to build a big low vol they're looking to build a big low vol they're looking to build a big low vol portfolio out of portfolio out of portfolio out of 50 low vol components right 50 low vol components right 50 low vol components right which means if you have an element of which means if you have an element of which means if you have an element of volatility like us you are viewed as volatility like us you are viewed as volatility like us you are viewed as wildly fringe and scary and and those wildly fringe and scary and and those wildly fringe and scary and and those sorts of things there's a great paper sorts of things there's a great paper sorts of things there's a great paper written i think it was maybe two or written i think it was maybe two or three years ago um cliff assness at aqr three years ago um cliff assness at aqr three years ago um cliff assness at aqr who is just he's a great follow and who is just he's a great follow and who is just he's a great follow and but he wrote a paper um called uh it but he wrote a paper um called uh it but he wrote a paper um called uh it wasn't even in defense of it was um wasn't even in defense of it was um wasn't even in defense of it was um uh it was it was oh shoot i'm gonna uh it was it was oh shoot i'm gonna uh it was it was oh shoot i'm gonna but it was basically uh in praise in but it was basically uh in praise in but it was basically uh in praise in praise of high volatility alternatives praise of high volatility alternatives praise of high volatility alternatives okay amazing you can pick it up off the okay amazing you can pick it up off the okay amazing you can pick it up off the off the web and what it basically says off the web and what it basically says off the web and what it basically says was if you can find truly uncorrelated was if you can find truly uncorrelated was if you can find truly uncorrelated or in the best possible environment or in the best possible environment or in the best possible environment anti-correlated volatility you should anti-correlated volatility you should anti-correlated volatility you should embrace that right um and that and that embrace that right um and that and that embrace that right um and that and that that's something that that we have that's something that that we have that's something that that we have generally exhibited and we think it's generally exhibited and we think it's generally exhibited and we think it's very useful again it doesn't it's not very useful again it doesn't it's not very useful again it doesn't it's not top of mind when things just grind up top of mind when things just grind up top of mind when things just grind up into the right all the time into the right all the time into the right all the time but when you have those periods of but when you have those periods of but when you have those periods of volatility volatility volatility if you have a small allocation to if you have a small allocation to if you have a small allocation to a highly volatile but anti-correlated a highly volatile but anti-correlated a highly volatile but anti-correlated asset asset asset that can do an enormous amount to offset that can do an enormous amount to offset that can do an enormous amount to offset the damage that the rest of the the portfolio portfolio portfolio you know sustains and so so that's very you know sustains and so so that's very you know sustains and so so that's very useful so so we've always carried you useful so so we've always carried you useful so so we've always carried you know kind of a one and a half to two know kind of a one and a half to two know kind of a one and a half to two percent long vol book okay and what is
Speaker 1percent long vol book okay and what is percent long vol book okay and what is that do you mind talking to us about that do you mind talking to us about that do you mind talking to us about what that looks like is it yeah rolling what that looks like is it yeah rolling what that looks like is it yeah rolling vix calls is it buying out of the money vix calls is it buying out of the money vix calls is it buying out of the money smps like how long do you go like how smps like how long do you go like how smps like how long do you go like how and how do you think about sizing it in and how do you think about sizing it in and how do you think about sizing it in terms of is it just i'm willing to terms of is it just i'm willing to terms of is it just i'm willing to spend x and whatever you know whatever spend x and whatever you know whatever spend x and whatever you know whatever that insurance as much insurance as that that insurance as much insurance as that that insurance as much insurance as that buys me this year that's as much buys me this year that's as much buys me this year that's as much insurance as i get
Speaker 2insurance as i get insurance as i get yeah a lot of it is the level of all yeah a lot of it is the level of all yeah a lot of it is the level of all um dependent you know how much can you um dependent you know how much can you um dependent you know how much can you get and how far out of the money do you get and how far out of the money do you get and how far out of the money do you need to go need to go need to go but it tends to be a number of but it tends to be a number of but it tends to be a number of different instruments we do use different instruments we do use different instruments we do use vix calls and call spreads we use vix calls and call spreads we use vix calls and call spreads we use um sort of uh out of the money options um sort of uh out of the money options um sort of uh out of the money options uh in currencies or commodities or uh in currencies or commodities or uh in currencies or commodities or individual etfs or individual etfs or individual etfs or high yields uh utilities have been an high yields uh utilities have been an high yields uh utilities have been an area that we've used quite a bit um in area that we've used quite a bit um in area that we've used quite a bit um in terms of our our vol book because you terms of our our vol book because you terms of our our vol book because you know utilities tend to know utilities tend to know utilities tend to they have the volatility of bonds and they have the volatility of bonds and they have the volatility of bonds and they act like bonds particularly in the they act like bonds particularly in the they act like bonds particularly in the first parts of a correction first parts of a correction first parts of a correction but then ultimately if that correction but then ultimately if that correction but then ultimately if that correction continues they act like stocks um continues they act like stocks um continues they act like stocks um and so so you get a and so so you get a and so so you get a sort of uh a step function move in sort of uh a step function move in sort of uh a step function move in volatility that you can purchase very volatility that you can purchase very volatility that you can purchase very cheaply cheaply cheaply uh for a period of time we've used so
Speaker 1uh for a period of time we've used so uh for a period of time we've used so you're the guy i you're the guy i you're the guy i barclays has this great etf report barclays has this great etf report barclays has this great etf report that's like volatility and they go that's like volatility and they go go through all the different, you know instruments that you can use to hedge and if they're cheap or expensive versus you know typical drawdowns you're the guy that's listening to them and uh maybe not specifically them but you're the guy combing through there trying to find the different uh different hedges that are
Speaker 2cheap i'm i yeah i'm a i am a i covet inexpensive convexity um and and look this goes back to like the guys that we mentioned earlier the diego parias the david dredges the chris coles you know there's some great guys who we spend a lot of time with you know noel smith jason buck people who really understand vol and help us go out on the vault surface and figure out how to most efficiently express our set budget to embrace that volatility and i like it to be a multitude of different things because you don't it's a shame if you expect the environment to get volatile and you choose the wrong instrument right so one of the things that we've had in that box is that we've had a lot of people who have been in the industry for a long time and we've had a lot of people who have been in the industry for a long time and we've had a lot of people who have been in the industry for a long time and we've had a lot of people who have been quite frankly over just for the last couple of weeks which is timely given some of the conversations we've had over the last month you know was long bonds um you know tlt calls as part of our ball book right now as is long yen as is you know a couple of other things that we've packed
Speaker 1in there well i was going to ask you about the currency component because that's not something that a lot of people look at and like one of my big beliefs is if you were looking for an inexpensive hedge i think that the swiss franc yen is a great short um and it's a complicated trade in that the swiss generally have a higher hedge ratio in terms of their currency overlay for their stocks and the japanese don't and so in a risk off stock market i was kind of expecting swiss franc yen to to to do poorly is that something you would look at like it would be something that complicated
Speaker 2yeah so we actually we're we're we're long yen versus euro and actually versus dollar um and so that was uh you know basically a a way to express the same thing what is the most egregiously overloaded boat to one side in the currency world which was yen um which with the world using that as a funding currency um and uh you know where where do we think that that could switch and who is vulnerable to the type of environment that we think might be conducive to a risk off and we're if we were looking at credit you know potential credit issues around the world um you know the the french you know the french and the potential impact on the euro was something that we were able to identify with you know guys like you know vincent to lord and a few others um good friends of ours out in san francisco i was actually i was i was more inclined to do uh yen versus dollar uh and then i had a great long burgundy uh white burgundy lunch with vincent and um and decided to express the trade uh you know long long euro versus or long yen versus euro and
Speaker 1that's absolutely nailed up by the way he he came on our show when he was really early with that uh long before anyone else i remember him saying no no this is the problem trade and you know i i kicked myself for not being short oats versus long boons it was just the home run trade of the of the of the year so far i think that nobody's really talking about the other story that few are highlighting as a trade that has done really well
Speaker 2yeah yeah hopefully he's still uh allowed back into his home country
Speaker 1well you know what if it wasn't that call i'm sure it was the fact that he says he actually likes emily in paris that it has caused him not to be allowed to be into the country okay um so you you have this ball budget you spend it every year you just try to find the the best way to do it it's the same as the short it helps you in terms of being able to play offense when everyone else is playing defense what are the the other things um you think that people when they're thinking about investing that they get wrong like what do you think is the biggest mistake you see out there not mistake or just habit that they drop into or just something that you're like i gotta make sure i don't fall into that same you
Speaker 2know problem yeah i think people just tend to be pretty rigid in the framework under which they're investing and they are disinclined to recognize the potential for a changing backdrop um you know one of the one so i think that portfolio construction is a lot like architecture there's something that i i wrote um god so i was almost six or seven years ago um one of the pieces that i'm kind of most most proud about but i wrote about portfolio management from the lens of architecture and how building a great structure has to take in account the setting in which it is built and the corollary that i drew was you know frank lord wright built the amazing uh tokyo imperial hotel and i think that's one of the things that i'm really proud about is the fact that he built a great structure in 1921 i think it was an incredible story um about him kind of down on his luck and you know sort of middle of his career total lull goes over and designs this hotel and does everything totally differently from everyone else is doing you know they're like look earthquake territory we got to build these rigid structures etc and and he built something that is more like a boat that's going to float and work with it and two years later the great kanto earthquake hits and tokyo is leveled um and he gets this telex a couple days later saying hotel standing as a monument to your genius has house and to me you know talk about being on the couch that i saw this in a documentary at the sundance film festival in 1998 and it was it was visceral um in terms of my reaction to it the ability to be able to convey to someone that you have helped shepherd them through a period of incredible turmoil um i think was one of the formative things for me as a portfolio manager i didn't necessarily want to put up the best returns or anything like what i wanted to do was to give a vehicle which would enable it would provide shelter in a storm would provide these kind of uncorrelated or anti-correlated returns that would enable us to emerge from periods of incredible volatility together and say we made it onto the other side that is
Speaker 1awesome you're the frank lloyd right of portfolio managers um okay so let's um let's talk about what we what you see that might actually be the next earthquake right like well let's get a little more in terms of what you're seeing and what you're worried about in today's environment like a lot of folks seem to be really all bulled up nothing's going wrong there's absolutely nothing going wrong like here we are smp is two and a half you know percentage points off the highs and even in the midst of this big huge ai ai sell-off and there nothing really can it seems impervious all right do you believe the market is as strong as the bulls make it out to be and if not what do you
Speaker 2worry about yeah i think the setting of the market is changing and look for 20 years or 20 almost 25 years now it has paid to kind of invest in long duration assets and have exposure to you know things that benefit from lower or low inflation and are in some ways dependent on accelerating liquidity from the underlying markets and positive flows from 401ks etc etc and i think that has driven a focus on it just by pure mechanics it has made people more exposed to the s&p 500 the leverage component that was available within that in a low interest rate environment that's leaving now but with the legacy of that is still very much intact in most people's portfolio allocations that's where private equity and private credit and all of these things expanded in a way that it's it's hard for people to think about that environment changing to one that is you know one of the drivers of low inflation and relative complacency about geopolitical placidity around the world was the fact that we were in this you know u.s centric unipolar we make the rules everybody listens everybody can trade with everybody nobody needs to hold inventories you can just trust that whatever you need it's going to be there and you just buy from the lowest price guy and that's great that world if you didn't believe it after 2022 with russia invading ukraine and you're not believing it now when you're seeing this sort of balkanization of russia china north korea etc i mean all of these different moving pieces where the need for national resiliency and national interests in terms of sort of bolstering supply chains and those if that doesn't change that decision-making process i don't know what it is so it has to lead to a higher inflationary environment doesn't mean we're going back to the 70s it doesn't mean and i get the demographic arguments and and all those things but look the the usefulness of bonds in a three to four percent inflationary environment is historically very different and very inferior to the usefulness of bonds in a one and a half to three percent inflation environment and so you just you have to do that and that's where we you know pivot to you know louis louis vincent govs you know it's not the 60 40 it's the 60 20 20 where you You've got some component of gold. You've got some component of energy. That is, I think, where there is a legacy portfolio allocation that it's extremely inconvenient for most of those managers to look at having to change that allocation because there's not a lot of market cap in the other stuff that they're supposed to go into. And it's an enormous amount of work to pivot what have become aircraft carrier-sized, you know, multi-trillion dollar portfolios for some of these sovereign wealth funds and, you know, even some of these big asset managers. There are private equity firms running $150 or $200 billion. I mean, a $10 billion private equity firm 20 years ago was huge. So that, to me, is the peril of the current environment. And that's where the earthquake hits. And so what we're trying to position ourselves as is not just to be able to, you know, avoid that storm and not to be negatively impacted in it, but to position ourselves. So that we can be sufficiently positively impacted by that, that we can help our investors who may have exposure to some of those things.
Speaker 1I think you're going to agree with me that that potential earthquake might be all the worse because a lot of these material, like all these gold miners, copper miners, all these things, they are, they've been, the amount of capital that's been, you know, put for expansion over the last decade or two. Has been negligent. And the reason is because the reality was that we had that big, huge boom in 2005 to 12 or whatever. And so there's been, the capital markets for those resource companies have been starved of capital for a long, long time. And so when we do get the demand side, the price response is going to be all the worse because the supply is constrained. Would you agree? And how do you think about that?
Speaker 2Yeah, absolutely. I mean, I think that's the underpinning of any really good resource market. The bull market of sort of 2000 to, or late nineties to 2007, 2008 with that little echo boom beyond it into 2011, 2012 was really a demand driven market. Um, and you know, there's Chinese industrialization where we are currently is you're absolutely correct. A supply driven bull market. Uh, and I think it was like an old red hour back quote. He's like, you know, I like draft. Yeah. Yeah. I like drafting, you know, tall guys, not fast guys. Cause yeah, um, you know, tall guys don't shrink when they get tired. So, so, so that's, that I think is the supply driven bull. And by my numbers spending in CapEx in the resource sector has gone down about 50% on a nominal basis and about 75% inflation adjusted since the sort of 2012 to 2014 range. And so the big projects that you need to be production. And from 2025 to 2035, you really needed to start working on those in 2020, um, and have to continue to have worked on those, you know, for the last five, six, seven years. And there's just a lot less of that out there. So, so I think that, you know, the resource bull market is underpinned by that. It's underpinned by the fact that this tech bull market is a much more materials intensive one than what we had back in the two thousands. And I was front row for that in San Francisco and, you know, 99, 2000. Um, And third is this, the, the geopolitical imperative thing that it's just not a world where everyone's going to be okay using other people's supply. They're going to need to have some of their own. And that's that caught that you need more spending on top of the more spending that you need to catch up with what we didn't spend.
Speaker 1Right. And I think that the part that a lot of folks miss is that in 20, you know, basically from 2010, all the way to 2024, uh, the U S was the only country that was actually willing to run deficits. So the fiscal was very much limited. They were the ones that were willing to run big deficits and now, you know, Trump, you know, love them or hate them. The reality is that he's changed everyone's attitudes about running deficits because they have to. And so, so not only have we got the geopolitical concerns about the fact that you can no longer count on, you know, being able to go and buy your last minute or whatever it is. You also have the situation where every single government is like, holy smokes, we can't rely on the U S to be the only spender. We're going to have to spend as well. And I, I just kind of, I'm flabbergasted that more people aren't more worried about the amount of fiscal spending that's going on throughout the globe.
Speaker 2Yeah, it, it, that is, that is a significant component of this regime change that I think we have to be cognizant of and everybody running simultaneous, um, you know, uh, uh, fiscal deficits just tells you that inflation is going to be higher. I think that's just, it's kind of built, it's baked into the cake.
Speaker 1Okay. So now. So now people are going to be mad at me if I don't start asking you about individual commodities and sectors and things like that. So let's just go, let's go through the gambit. What do you want to start with? What's, what are you most excited about right now?
Speaker 2Yeah. So energy has been a wild ride this year, uh, and it was egregiously under-owned back in kind of Q4 of last year. I think the consensus was that it was a $60 market that was going direct to a $50 market or even a forties market. Um, yeah. And even before the missiles started flying at the end of February, stocks started doing really well. And I think that was just a egregiously underweighted, I think it got down to 2.7% of the S and P 500 or something like that. So then you got on top of that, a geopolitical catalyst. Um, and then I think you had this, that the reaction from most investors was, it was very polar. Uh, it was, Hey, straight's closed. Okay. You know, energy is important. Straight's open. Okay. It's not important anymore. And, and I, I think the way we tried to view it with a bit of a longer lens and going back and forth
Speaker 1on every tweet that Trump did all 65,
Speaker 2but reopenings of the straight, you know, every single one of them, this one's going to be real though. This one's going to be real. So you say there's a chance. But, but I think that in our view, the bigger impact was a depletion of the buffers that had driven the $60 oil price in the first place. Um, and that was not just us strategic petroleum reserves, but those in China, it was, you know, we, we learned a lot in this study, you know, you, you can't cut off 10 to 15% of global oil demand without learning an incredible amount of crisis management about how things work. How things evolve around the globe. And, and so I think we, we learned a lot. I, I, I underestimated how flexible the global system was. I think everyone, so you're
Speaker 1not alone in there, right?
Speaker 2Yeah. But I think that where we come out on the other side is, uh, energy is important again. Um, it's not just important because of this geopolitical backdrop. It's important because data centers and AI and all of technology indeed doesn't run without it. It is, uh, it's important for national security. It's important for politicians being able to stay in office. Um, and I think there is a gradual movement. We've seen it in the Americas first. I think there's a chance that it moves to other places overseas in that the sort of extreme swing in anti fossil fuel, anti extractive industry mentality that had been prevalent for really, for many years. Or really from kind of the late 2010s, you know, really kind of peaked probably 2022, 2020, 2024, and has started to ebb a little bit towards what I like to say, like energy pragmatism. Um, and I think there is a balance that can be struck. And again, most of the kind of Latin South American countries are starting to move a little bit more, right? They're starting to be a little bit less nationalized, the industry and et cetera, and more like we have to be good partners. Yeah. To be able to foster our own resilience. And so I think, I think that's underway. I think that's a very big theme. So we like, uh, buying energy in jurisdictions that have had really bad energy policy on the bet that it gets a little less stupid.
Speaker 1Okay. So where are those,
Speaker 2uh, I think the, the North sea and the UK North sea in particular is a, is a, is a fantastic example of that. Um, you know, 80% windfall tax rates and those sorts of things. Crushing domestic industry, losing tax revenues, losing employment, uh, and putting out a business, most of your industrial sector, it's just bad business. And, uh, I think, I think politicians are realizing that regardless of sort of whatever green cred you want to, to, to go with, um, if people are finding it hard to afford food and their businesses are going under because they can't afford the energy, you're likely going to be a former politician. And so I, I think there is, there is movement underway in some of these areas. And if you can, you know, buy companies at two or three times cashflow and 15% dividend yields and, you know, and you don't need any other catalyst, then people can go from max stupid to, you know, only seven on a scale of 10 stupid. Yeah. I, I, I think that's, I think
Speaker 1that that may just work. Okay. So can you name names there or do you, or do you, or do you just have to tell people? Paul, they should go.
Speaker 2I should not name it, but there aren't many names left. It's kind of a it's a Darwinian group that has that's still kind of independent North Sea oil and gas producers.
Speaker 1So, OK, so go do some go do some work. That's something to look at. I thought when you were talking about countries that had gotten a little less stupid about their energy policy, you were going to mention my country.
Speaker 2Well, I think, again, in the Americas, that's absolutely the case. And Carney came in as sort of a, you know, thinking that he was, you know, sort of arm in arm with, you know, the you know, the great the World Economic Forum and all those sorts of things. And he's proving to be, surprise, surprise, a pretty adept politician in terms of finding some ways to compromise that actually are in the best interests of his constituents.
Speaker 1Yeah. And listen, I I from day one argued that Carney was not. What everyone thought he was, that they were tainting him with this brush because he went with the liberals. And the reality was that he was just as likely to be the leader of the conservatives. It just happened to be that that's ball was taken. Previously, Stephen Harper, one of our former prime ministers, actually tried to get him on his cabinet. So the guy is a liberal or conservative. It doesn't really matter. He recognized that the issue was that we need to get our economy going and he was going to do what he's going to do. Like, Jesus, he's a Goldman Sachs, Brookfield, central banker for, you know, and everyone's like, oh, no, he's going to do all this green stuff. And I'm like, you know, I get it. They'd be like, his wife's a big green. And I go, does your wife, you know, does she make your portfolio like like like why do we think that just because his wife was a green that he was going to do that? And the other thing is that I thought was obvious, Robert, was that his first thing he did was get rid of the carbon tax. Yeah. Right. So do you have names there? Can you just go by the oil sands or like, you know, or.
Speaker 2So. I think that, you know, I've always been a big fan of Canadian energy. We don't have a lot of exposure there right now. We like, you know, kind of the the steady as they go, kind of high dividend paying. But can do we like companies that can grow a little. Pay down debt a little. Pay out a big dividend. At the same time. And there's there are there are a number of those up there that that kind of fit that criteria. And we've got long held positions in a couple of them.
Speaker 1OK, so let's keep going. There's energy. You think that is that's the one you chose to go with first. What's the next most attractive, you know, resource, you know, play out there?
Speaker 2So I think that we're starting to see the junior mining sector has gotten beaten up pretty, pretty well. I do think that they're very specific. Specifically, I think there's a very short list of really good next generation copper projects in good jurisdictions that have the size that are going to be interesting to potentially majors. And that's where I would want to focus if I was buying those were actually on the margin, we're actually short some of the big cap developed copper companies that global majors and sort of diversified. Because we think there's some element of economic headwinds and probably an element of a eyebrows who decided to round out their portfolios with a little copper and a little natural gas. And those are very kind of low conviction holdings for them. And so, so, so we're short some of those, but we're, we find this tape where there's, again, I don't think there are 50 good copper projects. I think there are maybe half a dozen. And we want to hold a basket of those and be ready to kind of lean in when those stocks get beat up, which they kind of have been over the last couple of months.
Speaker 1One of the things that's actually surprised a lot of traders is the fact that as gold's gotten hammered. Copper's hanging in there. Is that just the AI trade or what do you think's going on there?
Speaker 2You know, there's been a lot of kind of variability in the way there was incentives because of the US tariff, tariff threats that there's an enormous amount of copper that's being held in the US because people are worried that the tariff is going to be enacted. And therefore you're going to want to have copper already in the US. So you built stockpiles very aggressively here, but they're, they're viewed as strategic. They're not really. Really being viewed as functional. They're much bigger than they need to be functionally so that in some ways has kind of isolated a point of supply or made people not concerned that US inventories are high. So I think that's probably part of it. Look, I think, you know, sort of this, you know, build out of data centers and things like that on the margin, it helps a little bit. But really, it's kind of going to be China as as, you know, just just China construction start to really start to pick up again. And that's been. You know, pretty moribund. So I've been surprised at how well copper is held up, and that really has driven why we've got sort of shorts across the major big cap miners. The smaller developers, you know, had acted really well. They're the ones that have really underperformed over the last couple of months, which is where we see the opportunity set.
Speaker 1You mentioned China. I remember there was a point when China was all that mattered when you thought about pricing copper. That was all. Everyone. Everyone talked about and one of the things that I've been trying to stress over the last little while is that a lot of these relationships that had previously been driving it, whether it be China, you know, influencing copper or whether it be US rates and US dollar being the sole driver of the gold trade, all those things need to be thrown out the window. But one of the things that, you know, you highlighted there was that China has actually been struggling. What do you think is going on there? And how do you incorporate that into your view about? I mean, look, effectively,
Speaker 2China is the world's largest commodity hedge fund. They just happen to control an enormous amount of the physical and they can use that to their advantage. I think it's sort of a more twenty five thousand foot for you. They did something that the US has been very, you know, very reluctant to do, which was they saw. The bubble and they popped it right. They decide they consciously went in and said Evergrande, et cetera, et cetera. All this ridiculous building that was being done at both the state on entity and other levels in China. They said, uh, no more of this. You're cut off and it's fine if you go to bankrupt. It's good. It's fine if you go bankrupt and it's fine if you go to jail. So so they had the courage to let the air out of something before it got so big that it could end up being. Utterly catastrophic to social fabric there, which is really what they're there to protect. They're not they're not there to protect people's for one case. They're just there to make sure that people are fed and people are hapless and people are happy and we're not going to have team and square number two. So so that's it's a very different construct than what we have in the US. So so that's what they have done. I like the I like the fact that I can be constructive. On a number of facets of the resource spectrum and not have it be a China story and in fact, have China being exactly as you say, has kind of taken itself out of the picture. Not really, but on the margin, if you look at the last 30 or 40 years of Chinese growth rates, we're at the low end of the band for sure. And so and so that's a then that provides potential upset. I think we've seen the downside. We've seen the downside of that, watching them contract. And now we're at the point where, hey, you know, look, if if they decide to do some pro growth policies and decide that they've deflated their real estate bubble sufficiently, that they can go in and start modestly supporting a rebuilding of that. Not that they need a lot of new apartment buildings or anything like that, but to go back in and start saying, all right, let's do a little bit more in infrastructure. And maybe they, you know, kind of support some of their domestic AI data center needs and things like that. But I think I think it's kind of it's kind of all almost all upside on China for now, which is kind of a spot to be in.
Speaker 1Are you I know our friend Louis Vincent Gaff, he he argued that like in terms of the recent Chinese weakness that we've seen across the board, one of his arguments has been, well, we just had a huge energy shock over the last couple of years. I mean, you know, I mean, there's a lot of people who are saying, well, we just had a huge energy shock over the last couple of years. Why wouldn't China pull back on the on the the throttle? Right. Because if they push down on the throttle in the midst of an energy shock, it's going to make everything worse. And so his argument is that, yes, once this finally cracks, whether it's the air bubble, whether it's the war in Iran and oil comes back down, they'll be able to put their foot back down on the throttle. Do you buy that? Do you buy that argument?
Speaker 2I do. Yeah, I think I think they are a day. What they have shown. Very clearly over the last nine months is they are a counter cyclical in the resource business, which is which is great because we're used to booms and busts and to be able to understand that, you know, look, OK, China is going to be a decelerator at. 105, $110 Brent, and they are going to significantly and aggressively rebuild inventories at 70 or 75. Quite honestly, the equity case for the companies that I'm investing in in the energy sector, that is spectacular for. Right. That's such a good
Speaker 1way of putting it, Robert, that they are counter cyclical. And I would argue that it's more than just the resource economy. I would argue it's the whole entire global economy. It's not just resources. It's everything. Right. They're doing counter cyclical, you know, policies and that makes the economy more stable. Okay. What else should we talk about in terms of some of your picks? You mentioned, how about shippers? What's going on there? And like, give us your views there. Like this BWET, like, I don't know what's in this thing because this is one of the most unbelievable ETFs I've ever seen.
Speaker 2Yeah. Yeah. You know, I'm, I sort of have kicked myself a number of times over the last year because we were, we were really constructive on tanker rates going back almost two years. And we liked it both because there were some structural things going on, low order book and, you know, potential navigation of the sanctions regime that would, would cause increased demand for tonnage. But we really liked it because it helped hedge our long book, our long energy book, because the vulnerability that we saw in 2025 was OPEC increases more barrels. You know, that's bad for our energy longs. It's really good for shipping stocks. So, so we've been there. Um, but I didn't have the good sense to just buy the thing that just is, is effectively it, it is long, short-term spot tanker rates.
Speaker 1Yeah. BWET. Go pull it up folks and have a look at this ETF. It's insane. $20 to a thousand or something.
Speaker 2Yeah. And this is not an investment recommendation. This is not, yeah, this is, yeah. Uh, and we don't, we don't own it. We have not owned it. Um, but what it is indicative of is that it's not an investment recommendation. It's not an investment recommendation. of a shipping market that if you think the refiners have been, you know, in a sweet spot this year, if you actually do the math, um, anchor rates, particularly we're talking specifically Middle East Gulf coast, um, VLCC rates have done like four times as well as U S Gulf course, Gulf coast refining cracks. Uh, it is absolutely absurd. They've gone, you know, it used to be where, you know, a year ago, if your tanker was getting $50,000 a day and cost $25,000 a day to run, you got this great $25,000 margin. You know, now you're seeing spot rates in the 800,000 to a million two a day. Those are look, those aren't for long voyages and it's 30 or 40 days. Um, but the math on this, you can back it out from like a new tanker costs 125 million barrel, $125 million to build. You can sell a 10 year old tanker for $125 million. You can sell a 10 year old tanker now. Um, uh, and, and get like $160 million because it would take it because you can generate 30 or $40 million worth of cash in the next
Speaker 1six months. And, and I'm just thinking, as you tell this story, that back to your original thing about all these costs that are embedded now into the system and the inflation we're seeing there's yet again, another part of this.
Speaker 2Yeah. And look, I don't think. You're going to stay here by any stretch of the imagination, but what we're seeing is, you know, what people used to think a good one year charter rate, uh, was, you know, $60,000 a day, a good, you know, two year charter rate was $50,000 a day. Now you can go out and do, you know, one year charters for 125, 150 grand. And think about the margin expansion on that when your cost is 25, that's four or five X of where it was a few years ago. Um, you know, two year, two years are well north of a hundred thousand dollars a year. So, so there's the interesting thing to me, and this is always the case in these kind of niche industries is that investors say, okay, I see a headline about tanker rates and I'm just going to buy the tanker. So I'm going to look for the one that has gone up the least, and I'm going to buy that one. Um, but that one may have some issues. Like maybe it doesn't even have VLC sees maybe, maybe it doesn't operate in the middle East. Maybe it's actually forward sold a lot of their freight. And so they aren't going to get these high rates. Yeah. So there are a couple of really good folks who cover the shipping space, um, on X, uh, and, um, you know, there's, uh, um, differentiating between tanker stocks. There's a wild variation between the net present value that these companies are going to generate. So actually for a, for a long, short guy, um, you know, there's, there's incredible opportunity, but you guys, you want to listen to guys like at Finley and, um, you know, a keen hand. Well, and there are a couple of really elegant, thoughtful, deeply embedded folks in that market where, um, there's, there's, there's money to be made there.
Speaker 1Um, can we talk about, um, specific commodities that are very, very important from a national, like a, you know, uh, security point of view, like tungsten, uh, and, and just give us what you thought, what you think about those and other rare earths. Yeah. What are some of the things that you think might be, that might be, you know, uh, there might be a political element, but also make huge opportunities there for some of these
Speaker 2things. Yeah. Yeah. So the way we are currently positioned generally is that we were, you know, we had some early exposure to some of the rare earths, um, some of the things like tungsten and gallium and, uh, things like that in the bigger metals, you know, we've kind of been generally positively inclined towards nickel, um, versus, you know, some of the other ones. Um, in rare earths in particular, I actually think that the tough thing to do is not necessarily find and produce rare earths, it's to process them. So if you can find they're actually, let's just say, uh, north of the border companies that are already real scale, not bench, but real processors of rare earths, um, where I think that that's the bottleneck, um, I'm a little concerned there, so you really have to go. I mean, rare earth are, are, they're not apples to apples. There are incredible variances between the weights of lights versus heavies in many of these deposits. And if you have too much of one facet of the spectrum of rare earths, it's the difference between, uh, uh, deposit being wildly economic and being totally an economic. So I think that is not something where you want to take a shotgun approach. You want to really understand them as, and I, I do think broader thinking. Again, I think, um, rare earths and strategic metals have become a little bit more of a crowded room in the resource space. Okay. Um, and especially when, if you think like, look, if we now have four or five countries around the world that are now trying to make sure they are nationally independent in terms of self-sufficient in being able to produce their own variances of these, and they're willing to offer significant guarantees or off takes or some sort of contract. Structure that would bring hundreds of billions of dollars into an industry that has typically survived off of five or $10 billion in capital expenditures. I think you want to be pretty discerning in terms of the ones that you invest in because oversupply is, you know, winter is coming at some point. It's not right around the corner, but it's, it's, it's going to come and look, I was there for. The uranium boom in the late nineties where six companies turned to 600, uh, and then all of a sudden, you know, five to seven years later, you were back to maybe a dozen companies. So of that incremental 600, you know, 590 of them ended up disappearing. And so I think that, I think you want to be caught between the lines there.
Speaker 1And I do like your winter is coming in a thing, um, especially with the 51st state and the, big wall up there so i think we'll we'll be building the wall um what one of the things that before we let you go and before we let you off the couch i'm going to give you just a couple but we're going to bring it back to kind of bigger questions and if i asked you if you could sit down with one of your favorite market wizards who would it be and what would you ask him it's a really
Speaker 2good question um you know because my my desert island trading uh you know guys is you know drunken miller um i just think his his flexibility of uh of being able to shift views and to change perspectives and not to be married to various things and to be able to navigate different um market environments are extraordinary i i almost think i'd go back to like my vol guys um you know i miss you know i miss i think one of the most elegant writers that i have ever seen is um is chris cole from artemis i don't know if you remember some of his old pieces you know star wars convexity and i i view those as almost uh like bootleg grateful dead tapes where where if you read if you read his piece on why dennis rodman was likely the most valuable player in the history of the nba yeah um it's it it is perspective altering and so i i i think i would i you know there's some like him or uh you know a diego period or you know that someone did you know dave dredge or someone like that that just helps reinforce the fact that um you know stick with the stuff that's not working because it'll work eventually and it's going to be really
Speaker 1important when it does uh in terms of your weaknesses in your investing what what's your biggest weakness and what do you like have to work on the most
Speaker 2so one of the things that i've worked very hard to overcome is i'm a like i'm a dip buyer i want to buy the low i want to i want to be i want i want to be able to point to a chart two years later and say i i that's where i loaded the boat um and what it did was it precluded me from starting to buy things when relative strength and absolute performance were improving um and it took a lot of introspection and going back and walking through my trades all right what worked this year what didn't and let's look at the entries and list and it it took me like 20 years to figure out that it's like wait a minute if if you just wait until things start working again and you're not the only guy in the room anymore it's a lot easier to make my so i i still don't think i'm great at that i i but i but i am better than i use i'm less bad than i used to be so you wait for the room to have one or
Speaker 1two people in it before you go and join it it's not completely empty anymore
Speaker 2yeah i so i may be in the room but it's not like i'm all in the room right yeah yeah i love
Speaker 1when you told me that you love to buy the the low and be able to point to that low i love that harley basman line he goes i've only bought the low once and that was when i went to sell the position and i mistakenly hit the buy button there is
Speaker 2there is some of that in this business for sure okay i will raise my hand as guilty i've
Speaker 1um i've asked you a lot of questions is what you know if you were sitting here and you were in the interview chair asking you the questions what would you ask that you think i missed i
Speaker 2mean look as usual you've covered a lot of ground here and i've just kind of been along for the ride and you've been you know leading me by the reins i i i'm not sure i could point to something in particular i mean if there's anything that you know we didn't really talk about gold i think we're almost there on gold let's do it
Speaker 1let's talk about a lot of people to hear your views on that
Speaker 2yeah so look we we we had a good ride in gold in 2025 and into early 2026 but when you know everyone on twitter started having the silver eyes and things like that you know so sometimes they they do ring a bell right and so we look we didn't go to zero weight but we took our weight down a bunch um and we tactically brought it back up uh kind of into august and it worked really well and it was hard to take some of it back off again but we did and it was because it was just it was too sharp it was like too good um and the reason that i put that on you know we i and you know i've got a colleague uh in the office and we had been popping around and talking to a lot of investors and going to some of the shows in denver and beaver creek etc um and man it was like everybody in the gold space was like even the tried and true old guard portfolio managers who we've gotten to know well over time some of them i've worked with and um no no one was everyone was waiting for the 3500 print ah right uh and so we're like look if it starts to work here it's going to work well um but then it was like it worked too well it showed how off sides the rest of the world was and how anxious retail was to pile back into the trade and unfortunately that created a another period of vulnerability that we're we're currently working our way through but where we need to get to with gold is um we need the central bank to blink um and us in particular and i think there's a it was i think it's a great a great shrub ism that we're uh we're familiar with which is um you know best and it's like either you'll buy my bonds um or i'll torture equities and then you'll buy my bonds so i think we're in that period now and the question is does it create the sort of economic backdrop that then pivots the likely path of of central bank activity and you know raise you know increases turn to cuts and then and that's where it's when they blink um and i think given the kind of tape over the last years look they've wanted bonds to be stronger they've wanted the dollar to be you know relatively stable they wanted the yen to strengthen um they're starting to get all these things best is looking a little but but but ultimately it is it is when they they they the the environment goes a little further than they want it to go that's where the next leg in gold comes in and i think we're i think we're setting up for that now and um so we're we're sharpening pencils in that space great
Speaker 1okay so we're gonna end with one last question which is we did your your top music pick so on the desert island but this one we're gonna do is the one that i especially in this environment where it seems like everyone's at each other's throats and there's not enough kindness going around i'm gonna you know take i think it's patrick o'shaughnessy that started this and i think it's a great uh way to end the podcast it's like can you give us something kind someone did for you in your career you know and tell us the story of who they are and what they did for you
Speaker 2so when i was originally at the franklin templeton group so after i graduated from college backpacked around the world for a year and then went to work for franklin uh so i was a couple of years the last year of that was in the portfolio management department and i actually um you know was a co i convinced him to launch a natural resource fund and was a co-manager on that but i got an opportunity to to kind of jump out and run a resource hedge fund i was 27 years old i was like hey that sounds like an awesome idea um so so i left and i purposefully put in my resignation about three days before um bonuses were set to be paid and i'm like i'm like look it's just it's i i think it's so cheesy to take your bonus and resign the next day um and i knew i was going and they had been really good to me and you know the johnson family etc you know just great folks and my the director of equity research at the time was a guy named ed jameson and i went in and i said look i've got this opportunity to go launch this i'm gonna go do it i understand that means you know i'm not gonna be able you know eligible for my bonus and and and i'm i'm cool with that um and it wasn't like it was a big bonus uh it was a big bonus and i was like oh my god i'm gonna go do it i'm gonna you know particularly in the realm you know i was a young guy junior guy there um but he looked at me and he said he said you know what we're gonna pay your bonus anyway uh and he said we think we think you've you know you've done good work you've contributed here we appreciate that and you never know in this business when we might want to you know collaborate again or when you know what you do might be relevant to us what we do is relevant to you or you never know in this business when we do what we do we just leave it on a high note and that to me you know for a 26 year old guy who didn't have a lot of money in the bank at the time um that was something that helped formed the way i think about how i want to run my business for my partners um and so it's kind of like that that that tiger management when when they went off and they said look we we generated great returns for our investors but most importantly we conducted ourselves as gentlemen yeah that that to me is a is i think should be a cornerstone principle in this
Speaker 1business that is an awesome story um great way to end it uh before we let you go why don't you tell people about your firm where they can get more information how they can reach out to you if they're interested in investing with you
Speaker 2um so i i'm occasionally on x uh at mra funds um we do have a website that i think was updated in a couple of weeks ago but you can go to mrafunds.com uh marathon resource advisors is the firm you know we manage money for qualified investors uh around the world and um you know happy to talk to people if something from this conversation resonates with them and uh you know just always appreciate your time and and the the wealth of knowledge that you bring to to this platform is amazing and uh i just i feel lucky to occasionally be able to bop
Speaker 1around in the world and be able to talk to people about this and the right back at you and i really enjoy you coming and thank you very much for your time and all the kind words
PodcastTranscript AI