Michael Kao (@Urbankaoboy) joins Julia La Roche on episode 119 to discuss his macro outlook, why we haven’t seen a hard landing yet thanks to the “four horsemen of economic resilience,” and why he’s favoring shorter duration assets in this economic environment.
Mike has been in the investment business for 30 years and has experience analyzing and investing in many markets and asset classes, spanning commodities to credit to convertible/capital structure/event arbitrage to distressed debt/equity investing.
Mike began his career in the commodities unit at J. Aron/Goldman Sachs in NYC in the early 90’s and traded over 25 different commodity markets and their derivatives. Mike left Goldman to pursue an MBA in Finance at The Wharton School.
After business school, Mike joined Canyon Partners, a credit-oriented hedge fund in Los Angeles, where he went on to become partner and co-founder of the Canyon Arbitrage Fund, which focused on various strategies including convertible and capital structure arbitrage as well as event-driven/risk arbitrage.
After 5 years at Canyon, Mike decided to leave Canyon and begin his own investment firm, Akanthos Capital Management, LLC. At Akanthos, Mike ran an opportunistic, value-driven investment strategy that looked for “fulcrum securities” up and down the capital structure.
Mike stopped actively managing external capital in 2019 and now invests primarily for his family office and enjoys blogging about the markets and economy on Substack at urbankaoboy.substack.com and Twitter @UrbanKaoboy.
Mike holds a BS in Electrical Engineering/Computer Science from UC, Berkeley and an MBA in Finance from The Wharton School of the University of Pennsylvania.
Links:
https://www.urbankaoboy.com/
https://twitter.com/UrbanKaoboy
0:00 Welcome Michael Kao
0:51 Macro view / The Four Horsemen of economic resilience
7:43 Recessionary outlook in the “vodka-Red bull” economy
11:00 The dollar wrecking ball
15:30 The rest of the world ‘out-doving’ the Fed
19:23 Oil outlook
26:27 Portfolio construction, favoring shorter duration
33:00 Thinking about stocks and bonds
35:00 Exit strategies
41:16 Parting thoughts
#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
#173 Dave Collum On Why We’re Headed For A 40-Year Bear Market
#172 John Cochrane On The Fiscal Theory Of The Price Level, Causes Of Inflation, And The Need To Stop Throwing Money Down Trillion-dollar Rat Holes
#171 Dave Friedberg, CEO Of Ohala And Co-Host of The All-In Podcast, On The New Breakthrough Can Boost Crop Yields By 50-100% And Could Change Farming Forever
#170 Bob Elliott: The Biggest Risk For Equity Investors Is The Economy Remains Too Strong
#169 Carol Roth: The Stagflationary Economy Is Making A Resurgence
#168 The ‘Acid Capitalist’ Hugh Hendry On The Fed’s No-Win Situation, The Fragility Of Valuations, Gold As ‘The Alchemy Of Chaos,’ Buying Bitcoin, And The Dangerous Sign The Japanese Yen Is Sending
#167 Michael Pento: If Rates Don't Come Down Across The Yield Curve Relatively Quickly, The Economy's In For Big Trouble
#166 Nancy Davis: 'Whatever They Say, The Opposite Happens' — Fed Meeting Reaction, Why Inflation Is Here To Stay, And The Opportunity For Investors
#165 Jim Bianco On Stickier Inflation, A 10-20% Chance Of A Rate Hike, And Why The 10-Year Treasury Yield Could Surge To 5-5.5%
#164 Chris Whalen On Higher Interest Rates, Illiquidity, And The Death Of Leverage
#163 Professor Scott Galloway: We're Turning Into Something That's Not Very American
#162 Keith Fitz-Gerald, Investor Who Nailed 2023 Market Rally, Says The Fed Doesn’t Matter — Investing In Optimism Does
#161 Michael Howell On Global Liquidity, A Re-entry Point For Risk Assets, Monetary Inflation, Gold, The US Dollar
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