Former hedge fund manager Felix Zulauf, who is the founder and CEO of Zulauf Consulting, joined The Julia La Roche Show to share his insights on macroeconomics, geopolitics, and the market. Zulauf Consulting is a boutique research and consulting firm that offers investment advisory services to institutional investors and family offices.
In this episode, Zulauf predicted that the market will continue to rise in early 2024 due to the economy appearing stronger than expected. However, he anticipates a drop in equities due to a recession. He described the current market as a "rollercoaster," with ups and downs that could be particularly frustrating for passive investors. He suggested that these investors might see low or even negative total returns in the next decade. According to Zulauf, those who can play mini cycles could find the environment beneficial.
Zulauf also commented on the concentration of fund managers in the Magnificent 7, a level of concentration he has never seen in his 40-year career.
Turning to inflation, Zulauf argued that what we're currently seeing is only a "temporary victory" and that we have "not killed the inflation beast." He shared his thesis for the latter part of the 2020s, predicting a possible 10% inflation rate. He noted that while occasional crises have been managed and kept under control, he worries that the next big crisis in the late 2020s "will be a shocker." As he put it, "all hell will break loose," and the latter half of the decade will be characterized by social, economic, financial, and currency crises.
0:00 Intro and Welcome Felix Zulauf
1:12 Macro view, geopolitical impact, changing world order
2:40 Equity markets likely to go up first, then drop
3:50 Inflation could rise above 10%
5:20 Nimble and flexible
7:29 Playing the markets in the environment
9:40 Fund managers piling into Magnificent 7 stocks, never seen this kind of concentration
14:24 FOMC reaction, Fed outlook, rate cut likely
17:40 Late 2020s, higher inflation, debt trillion
19:38 Inflation cycle similar to late 60s/70s
21:15 Next inflation cycle will create a problem for the bond market
22:15 Yield curve control
23:30 Hell will break loose, next big crisis will be a shocker
24:30 Addressing the fiscal problems
25:37 Gold not just a monetary asset, but a geopolitical asset
30:40 Parting thoughts, Japanese Yen
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#117 Ted Oakley On Staying Rich With A Balanced Portfolio
#116 Lyn Alden On Broken Money, Higher Inflation, Gold, And Bitcoin
#115 Dr. Lacy Hunt On The Impending Recession
#114 Bob Elliott On Why It's Time For A 10% Gold Allocation
#113 Jim Rickards On What The Israel-Hamas War Could Mean For The Global Economy
#112 Darius Dale: Why We Could Have A Worse Recession Than Investors Anticipate
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#110 Marc Chandler: The Dollar's Rally Is, If It's Not Over Yet, It's Nearly Over
#109 Danielle DiMartino Booth: 'It’s Clear That The U.S. Economy Is In A Recession If It Wasn't For Everything That Uncle Sam Is Either Spending Or Fudging'
#108 Chris Whalen On The ‘Silent Crisis’ — The Looming Commercial-Led Recession
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#102 Masha Bucher On The State Of Venture Capital, Investing In AI, And How To Navigate Today's Market
#101 Larry McDonald: The Probability Of Sustained Stagflation Is Rising
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