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
#137 Professor Campbell Harvey, The Inventor Of The Most Famous Recession Indicator — The Inverted Yield Curve — Sees Economic Slowdown In 2024
#136 Professor Jeremy Siegel Shares Outlook For The Economy, Fed Rate Cuts, And The Stock Market
#135 Chris Whalen On Pain In Commercial Real Estate, More Bank Failures, And A Maxi Reset In Home Prices In The Future
#134 Luke Gromen: A Hard Landing Isn't Going To Come In Stocks. It Will Come In Treasuries
#133 Jim Bianco On Why The 10-Year Treasury Yield Could Hit 5.5%, Implications For Stock Market, And Concerns About The Bitcoin Spot ETF
#132 Morgan Housel: Save Like A Pessimist And Invest Like An Optimist
#131 Sallie Krawcheck: Nothing Bad Happens When Women Have More Money
#130 Dr. Charles Calomiris On Fiscal Dominance And The Return of Zero-Interest Bank Reserve Requirements
#129 Fundstrat's Tom Lee, Analyst Who Nailed The 2023 Stock Market Rally, Shares His 2024 Market Outlook
#128: Felix Zulauf: 'Hell Will Break Loose' — The Next Big Crisis In Late 2020s Will Be A Shocker
#127 Grant Williams: Get Rid Of Certainty — Be Prepared For A Recession And A Soft Landing
#126 Liz Ann Sonders On The 2024 Market Outlook, A Different Investing Environment, And Why You Can’t Rule Out A Recession
#125 Jason Calacanis On American Society And Getting Past The Victim Mentality, Friendship With Elon Musk And Owning The First Tesla Model S, The All-In Podcast And Leaving Millions On The Table
#124 Michael Howell: Rising Liquidity, Monetary Inflation, And Why Gold Could Surge To $3,000
#123 Cullen Roche On Inflation, Why The Fed Won't Cut Rates Soon, And Is The S&P 500 Broken?
#122 Charles Payne On The Bifurcated Economy, Being An Unbreakable Investor, And The Roaring 2020s
#121 Raoul Pal: Get Ready For ‘Macro Summer’ — Falling Rates, Falling Inflation, And Growth Picking Up
#120 Dr. Gary Shilling On Recession Risk, Inflation, Rate Cuts, And Bonds
#119 Michael Kao: The Four Horsemen Of Economic Resilience, And Why We Haven't Seen A Hard Landing (Yet)
#118 Jim Rogers: A Recession Is Not Here Today, But I Can See It Coming
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