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DoubleLine Podcasts

S10 E3 Grant Williams on Bubbles, Power Struggles and Inflation

“The Sherman Show” guest Grant Williams brings his wide experience across asset classes and the world’s financial centers to this Feb. 8, 2021, episode with DoubleLine’s Jeffrey Sherman and Samuel Lau. Mr. Williams is a senior advisor to Matterhorn Asset Management AG in Switzerland, and a portfolio and strategy advisor to Vulpes Investment Management in Singapore. He is a co-founder of Real Vision, an on-demand internet-based financial media platform, and writes the newsletter “Things That Make You Go Hmmm.….” In his more than 35 years in the financial markets, Mr. Williams has worked in postings to London, Tokyo, Hong Kong, Singapore, Sydney, New York and the Cayman Islands.

Amid market bubbles spurred by massive deficit spending and central bank monetary stimulus, Mr. Williams foresees the need to both hold cash against the ultimate bursting of those bubbles and to stress-test portfolios for inflation scenarios. “I wouldn’t shy away from starting to nibble at inflation trades even though they may not work for the near term,” he says. The prospective return of inflation “is arguably the most important secular change that we have to deal with in the last 40 years.”

Another secular change to prepare for, according to Mr. Williams, is value stocks breaking their long underperformance relative to growth and momentum stocks. “A few value managers that I’ve spoken to are starting to see people making inquiries, they’re starting to see inflows. That tells me that there could be a tremendous tailwind to that trade because value is so unloved at the moment.… You just have this beautiful setup where there are some great companies and great sectors that are really, really downtrodden and sold-out, and nobody wants to own them.”

Among the greatest and most-underappreciated risks in the present environment, Mr. Williams points to societal and political volatility as well as market volatility. “We are at a time where suppressed volatility is everywhere, and anytime you suppress volatility, at some point, … it’s going to explode.” After decades of the hollowing out of the middle class amid wealth creation that has privileged the people fortunate to be born in the 1960s, the millennial generation, whose leading edge is approaching age 40, is on the cusp of taking political power from the baby boomers. Having missed out on the wealth creation of the last two decades, he expects millennials elected to office to “make things right for their generation” by enacting policies redistributing that wealth.

Guest Speaker Bio

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 protected].

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.

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