Alexander Altmann, Managing Director - Americas Head of Equity Trading Strategy, at Citi, joins The Sherman Show to discuss among other subjects his sanguine take on Federal Reserve plans to raise rates but his cautionary view on the risks surrounding Fed balance sheet shrinkage (4:52); the Fed’s policy dilemma in addressing inflation without tanking “America’s ATM,” the S&P 500 (13:50); the advantage of debt leverage to corporations in an inflationary regime (21:16); and valuation multiples rather than earnings as the larger risk to U.S. stocks, particularly growth stocks (26:41). The podcast hosted by Jeffrey Sherman and Samuel Lau was recorded on Feb. 15, 2022.
In terms of equity allocation, Mr. Altmann notes that while the protracted outperformance of U.S. stocks relative to European stocks might have conditioned some to believe in open-ended American exceptionalism, leadership historically has alternated between those two markets, with the last period of “non-U.S. exceptionalism” occurring in 2000-2008 (34:19). Pointing to Citi research showing that U.S. equities represent close to 60% of the MSCI World index but 48-49% of corporate profits, he offers the hypothesis that some of the capitalization of the U.S. stock market might become redistributed to other parts of the world. Within U.S. stocks, Mr. Altmann believes sector selection will play an increasingly important role in investment performance and makes his case for producers of commodities.
Jeffrey Sherman, DoubleLine’s Deputy Chief Investment Officer, is a thought leader, portfolio manager and public speaker in the industry. Mr. Sherman is a member of DoubleLine’s Fixed Income and Global Asset Allocation committees, and he serves as lead portfolio manager for the firm’s multi-sector and derivative-based strategies. In his role, Mr. Sherman guides the investment teams in developing top-down macro views and collaborative asset allocation processes throughout a market cycle. Additionally, he is a member of DoubleLine’s Executive Management Committee. In 2018, Money Management Executive named Mr. Sherman as one of “10 Fund Managers to Watch” in its yearly special report. Prior to joining DoubleLine in 2009, Mr. Sherman was a Senior Vice President at TCW, where he worked as a portfolio manager and quantitative analyst focused on fixed income and real-asset portfolios. Prior to that, he was a statistics and mathematics instructor at the University of the Pacific and Florida State University. Mr. Sherman taught Quantitative Methods for Level I candidates in the USC/CFALA CFA® Review Program for many years. He holds a B.S. in Applied Mathematics from the University of the Pacific and an M.S. in Financial Engineering from Claremont Graduate University. Mr. Sherman is a CFA® charterholder.
Mr. Lau joined DoubleLine in 2009. He is a Strategist on the Fixed Income Asset Allocation (FIAA) Committee and a contributing member on the Global Asset Allocation and Macro Committees. Mr. Lau is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives-based and multi-asset strategies, including DoubleLine's Shiller Enhanced CAPE®, Shiller Enhanced International CAPE®, Real Estate and Income, and Multi-Asset Trend strategies. He also co-hosts the Sherman Show (Twitter @ShermanShowPod, ShermanShow@Doubleline.com) and Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcasts. Prior to DoubleLine, Mr. Lau was a Vice President at TCW where he worked under Jeffrey Gundlach as a Research Analyst in the Mortgage Group. He holds a B.S. from the University of Wisconsin, Madison and an MBA from the Marshall School of Business at the University of Southern California.
