Trahan and Lazar: Buy Domestic Consumer and Industrial stocks

Interesting interview with Francois Trahan and Nancy Lazar. I’ve long been a fan of Trahan and his ‘Inflation is the new fed funds rate’ thesis, and now that he’s moved to a new firm to focus only on macro strategy I’m watching Cornerstone Macro LP very closely. Check out the interview below in which they discuss the outlook for the US:

Source: WealthTrack

Some of the takeaways:
• Macroeconomic influences have an outsized impact on equity market returns
• Dividends will contribute less to equity returns over the next few years. Markets driven mostly by PE expansion
• US has a low cost of energy because of natural gas
• Structural story of inflation being contained in US
• Emerging market bond sell-off and inflation problem: Indonesia yields from 5% to 9%, much worse than change in US yields
• Retail/Consumer stocks will have structural and cyclical outperformance vs materials/energy
• Buy US based industrial companies

I also recently came across this presentation by Trahan to the CFA society which has some great charts. In particular here are two slides that highlight the shift from a fed dominated market cycle to inflation dominated.

Source: Francois Trahan presentation to the CFA

I’ve also mentioned Trahan’s LEI framwork from his book in a previous post.


Beyond Crunching Numbers: How to Have Influence

I wanted to post this panel interview from the 2013 MIT Sloan Sports Analytics conference about how to influence people as a number crunching analyst. Its no secret that good stories influence much more than statistics. You’ll hear some good takeaways from analysts that have been very successful in their careers and have influenced others.