Christopher Zook, founder and Chief Investment Officer of CAZ Investments, which oversees around $5 billion in assets under management, joins Julia La Roche on episode 72 for a wide-ranging macroeconomic discussion.
In this episode, Zook shares that a recession is coming, and it’s “going to be deeper and probably longer than people think.” He adds that we’ll have a “manufactured recession,” where inflation is running so hot that the Federal Reserve has to raise rates fast to slow down inflation, forcing the economy into a recession. Moreover, he points out that markets believe the Fed will start cutting rates by the end of the year, something Zook does not expect to happen.
In these types of environments, Zook is looking for opportunities in dislocated assets or persistent assets that perform well, even if his hypothesis is found to be true.
Zook has over 30 years of experience investing in traditional and alternative asset classes. He was recently honored with the Texas Alternative Investments Association’s (TAIA) Lifetime Achievement Award in recognition of his contribution and sustained support of the industry in Texas. He regularly contributes to major media outlets, including CNBC, Fox Business, and Bloomberg. Before starting CAZ Investments in 2001, Zook served in senior leadership positions with Oppenheimer, Prudential Securities, Lehman Brothers, and Paine Webber.
0:00 Intro
2:12 Welcoming Christopher Zook to the show
2:50 Beginnings in investing
3:43 Trading commodities to pay for college
4:40 Reading about traders
5:55 Managing risk extremely carefully
7:20 Starting own firm
8:20 Managing money at age 22
8:50 Set goal to start firm in 10 years
9:50 Tony Robbins
10:40 The bigger the way, the bigger the try
14:00 Zook’s “why”
16:20 CAZ Investments structure and focus
18:36 Thematic approach
20:30 Betting against subprime housing
25:00 Macro outlook
25:12 Meme stock bubble
26:23 It takes longer than people think to reconcile dislocations
27:07 We haven’t seen true dislocation yet
27:40 Recession is coming and it will be deeper and longer than people think
28:08 A manufactured recession
29:00 I’ll be shocked if the Fed cuts rates this year
30:06 More of a 2-3 year recession
31:00 Disconnect between the Fed and the market
33:20 Be greedy when others are fearful
33:54 Stagflation
34:34 Worst economic regime for financial assets
38:13 Opportunities
40:20 Themes right now
41:09 Cord-cutting
41:40 Opportunity in sports teams, media rights
43:55 Themes that exist in real estate today
45:40 Stress from higher rates will force refinancing
46:45 Why we haven’t seen panic selling yet
47:45 Every sector of real estate will be stressed
50:40 U.S. Dollar outlook
53:39 U.S. debt levels are terrifying
56:29 Growth of private assets
57:04 Opportunity in GP stakes
#193 'The Bulls Are No Longer In Charge' — Tom McClellan On What The Market Is Signaling Right Now
#192 Dr. Lacy Hunt On What The Huge Downward Revision In The Jobs Data Means For The Economy
#191 Ted Oakley On Deep Market Selloffs: 'If You Don't Have Any Liquidity, It's Not An Opportunity For You'
#190 Brian Wesbury: 'The Morphine Is Wearing Off' And We're Headed For Recession And A Market Correction
#189 Rick Rule On Paying Attention To The Warning Signs In The Economy And Insuring Against Collective Stupidity
#188 Chris Whalen On The Difficult Economic Environment Ahead
#187 Michael Pento: A Triumvirate Of Bubbles Is Creating A Dangerous Situation For Markets And The Economy
#186 David Woo, Economist Who Nailed 2016 And 2020 Election Outcomes, Explains Why The Market Has The Trump Trades Wrong
#185 Jim Rickards: We're Probably Already In A Civil War
#184 Professor Steve Hanke, Who Nailed The 9% Inflation Call, Sees It Falling To 2.5%-3% By Year-End And A Recession On The Way
#183 Neil Howe On The Fourth Turning, Tribalization of America, And The Attempted Assassination of Former President Trump
#182 Tyler Cowen On Why We Might Get Lucky And AI Can Solve Out Debt Situation
#181 Chris Whalen On Why The Fed Is Worried About A Recession Next Year
#180 Andrew Wilkinson On Going From A Barista To A Billionaire, Building Tiny 'The Berkshire Hathaway' Of Tech, And Life Lessons From Warren Buffett, Charlie Munger, And Bill Ackman
#179 Ed Dowd On The Fed's Policy Error And Why We Could See A Bad Correction Ahead
#178 Peter Boockvar: The Is The Most Mixed And Uneven Economy That I’ve Ever Seen And It Feels More Like A 1.5% GDP Growth Rate Economy Rather Than 3%
#177 Mike Green: Passive Investing Has Turned The Market On Autopilot
#176 Economist Jonathan Treussard On The Extraordinarily Confusing Macro Data, Markets With A Memory Of A Goldfish, And If We're In Bubble Territory
#175 Chris Whalen: 'We're Hiding A Lot' — Why Commercial Could Be The Next Source Of The Financial Crisis In This Country
#174 James Lavish On The Debt Spiral: They’re Going To Print So Much Money It’s Going To Shock You
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