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
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#025 Alex Gurevich On Why Deflation — Not Inflation — Is The Real Concern
#024 "Convexity Maven" Harley Bassman On Repricing For Reality
#023 Nick Maggiulli On Why You Should ‘Just Keep Buying’
#022 Brent Johnson On The "Dollar Milkshake" Theory And Why A Currency Crisis Is Ahead
#021 Jim Rickards: We're Going To Wake Up This Winter With A Severe Recession
#020 Josh Brown: You Weren’t Supposed To See That
#019 Marty Chavez On How Software Ate Finance
#018 David Friedberg On Reimagining The World Through Decentralization
#017 Jim Rogers: The Next Bear Market Will Be 'The Worst In My Lifetime'
#016 Marc Benioff On The New Era For Business
#015 Activist Short-Seller Dan David On 'The China Hustle' And Uncovering Frauds
#014 Nik Bhatia On The Coexistence Of The Dollar And Bitcoin
#013 Epsilon Theory's Ben Hunt On The Narratives Everywhere
#012 Jim Bianco: This Is The New Normal. Get Used To It.
#011 Anthony Scaramucci On Failure, Bitcoin, and Trump
#010 Kyle Bass On Energy, China, Inflation, And More
#009 CrowdStrike's Adam Meyers On The Biggest Cyber Threats
#008 Alan Patricof on 50 years of investing, Burning Man and the NYC Marathon at 87, and living to 114
#007 Ryan Williams On Unlocking Access To Commercial Real Estate Investing
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