Gerard Minack, founder of Minack Advisors, joins DoubleLine Deputy Chief Investment Officer Jeffrey Sherman and Portfolio Manager Samuel Lau to discuss his global macroeconomic outlook and asset allocations. With U.S. stocks at or near record valuations, Mr. Minack also observes “so much good news is in the price. The consensus is so tightly clustered.” Even after stripping out the FAANGs and Microsoft, he regards U.S. stocks as expensive. These are among the factors behind his outlook for U.S. equities to underperform other equity markets.
Developed economies are on the cusp of reflation, which among other influences would serve as a further “carrot” to attract capital into non-U.S. stock markets. Mr. Minack describes a world shifting from “three decades of monetary-policy dominance to a new era of fiscal-policy dominance,” with “large, sustained fiscal deficits where central banks are playing a backstopping, supportive role” by monetizing most of those deficits. The catalyst for this sea change is the COVID-19 pandemic.
Broadly speaking, with respect to equities, Mr. Minack favors cyclical companies with operational leverage, especially in Japan, Europe and emerging markets. Among his industry themes, he likes the “beat-up goods producers,” including “conventional car makers” (not necessarily Tesla), construction companies and miners. “They’re all very cyclical, and the cycle looks very strong.” He also believes the commodity take-off of the last nine months has more room to run.
The views and opinions expressed herein are as of the date recorded and should not be construed as an offer to buy or sell any securities. Such views/opinions may differ from those of DoubleLine Capital or other of its affiliates and are subject to change without notice. DoubleLine has no obligation to provide any updates or changes. The following audio presentations represent DoubleLine’s intellectual property. No portion of these presentations may be published, reproduced, transmitted or rebroadcast in any media in any form without the express written permission of DoubleLine. DoubleLine has no obligation to provide any updates or changes. To receive permission from DoubleLine please contact email@example.com.
Neither DoubleLine nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.
DoubleLine is not providing any financial, economic, legal, accounting or tax advice in these podcasts. The receipt of these podcasts by any listener is not to be taken as constituting the giving of investment advice by any DoubleLine entity or individual to that listener, nor to constitute such person a client of any DoubleLine entity. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.