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
#156 Tom McClellan On Why The Recession Is Still Coming And Why The Second Half Of 2024 Could Be Unpleasant For Stocks
#155 Meredith Whitney On The 'Bifurcated' Economy And Consumer, Why It Will 'Pay To Be Patient' For Young Homebuyers, And The Coming 'Silver Tsunami'
#154 Dr. Art Laffer: We Are In The Middle Of A Massive Redistribution Revolution And It's Destroying Growth
#153 Amy Nixon On Inflation Running Hot And Pivoting On The Deflationary Recession Call
#152 Brian Hirschmann: This Is Probably The Most Dangerous Time In US Financial History
#151 Whitney Tilson On The Mistake Of Predicting Doom And Gloom
#150 Alfonso Peccatiello On The Risk of a Global Recession Triggered by China's Deleveraging And The Spillover Effects Not Many Are Paying Attention To
#149 Jeff Snider: We're Still On The Same Path To Recession
#148 'Convexity Maven' Harley Bassman: The Market Is Ahead Of The Fed By A Lot
#147 Andreas Steno On Why The Resurgence In Inflation Could Mean Another Rate Hike From The Fed
#146 Darius Dale: We’re Pivoting To A Reflation Macro Regime — What It Means For Markets
#145 David Woo, Analyst Who Nailed The 2016 And 2020 Elections, Sees Huge Headwind For The Economy Ahead Of The 2024 Vote
#144 David Rosenberg: Recessionary Forces Are Building And The Economy Is Weaker Than The Narrative Suggests
#143: Danielle DiMartino Booth On The Jobs Market, The Economy, And Why The Recession Already Started
#142 Dr. Burton Malkiel On 'A Random Walk Down Wall Street,' The Best Way To Invest, And What You're Getting Wrong About 'Efficient Markets'
#141 Marc Faber On Interest Rates, Inflation, And 'QE Infinity'
#140 DoubleLine Capital's Jeff Sherman On Fed Policy, The Economy, And Why Rate Cuts Likely Won't Happen Until June Or Later
#139 'Dr. Doom' Nouriel Roubini On The 10 Megathreats That Could Destroy Our Economy
#138 Peter Mallouk, CEO of $245B Creative Planning: 'It’s Hard To Be Anything But Optimistic Over The Long Run'
#137 Professor Campbell Harvey, The Inventor Of The Most Famous Recession Indicator — The Inverted Yield Curve — Sees Economic Slowdown In 2024
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