Episode notes
James Davolos, VP and portfolio manager at Horizon Kinetics, joins the show to make the case for inflation and to explain their Inflation Beneficiaries ETF, ticker $INFL. In this episode:
- How Horizon and Murray Stahl were one of the earliest asset managers to put client assets in GBTC
- How Horizon's value approach landed them at a Bitcoin allocation James' reaction when Horizon first made the Bitcoin allocation
- Whether Bitcoin is a growth or a value asset, and how to reason about it from either perspective
- James' reaction to Jerome Powell's announcement on rates
- The genesis of the idea to create an inflation beneficiaries ETF
- James' case for inflation
- Should the disinflationists be taking victory laps?
- Why the Fed is calling inflation 'transitory'
- Why we didn't get inflation from 2010-20
- What crystallized the case for inflation for Horizon Kinetics?
- The importance of the 'taper tantrum'
- Why historical parallels are so hard to find – and why we have no historical precedent for our current moment
- How the dollar is the 'least rotten apple'
- The prospects for a non-dollar monetary system
- The effect of ESG on commodity cycles
- How fiscal spending and the political anti-capital movement represents a structural shift
- The constant battle between capital and labor
- Why equities may suffer from higher labor costs
- Why Horizon focuses on asset light companies
- James' answer to the equity-inflation return puzzle
- Horizon's specific allocations to benefit from inflation
- The early success of the Inflation Beneficiaries ETF
- Why the inflation beneficiaries ETF does not contain Bitcoin
- How this ETF sets itself apart from other ways to play inflation – and why TIPS aren't the best bet
- Is the thesis playing out so far?
- Why the Fed has to remain subtle with their debasement
- James' pitch to Bitcoiners
