#025 Alex Gurevich On Why Deflation — Not Inflation — Is The Real Concern

Alex Gurevich is the founder and Chief Investment Officer of HonTe Investments, a Bay Area-based investment management firm, and the author of two books — The Next Perfect Trade and Wall Street Journal bestseller The Trades of March 2020. Gurevich led HonTe’s macro strategy in 2020 to rank second by net return according to BarclayHedge—and in the top ten of emerging managers in all strategies by Eurekahedge. Gurevich has over twenty years of trading experience and was hailed by the Wall Street Journal in 2003 as the star trader of JPMorgan, where he served as Managing Director responsible for global macro trading. In this episode, Gurevich shares his divergent views, which are that rates are most likely going to zero, and deflation — not inflation — is the concern. 0:00 Intro 0:31 St. Petersburg to America 1:38 Early interest in Wall Street 2:53 Poker and investing 4:39 Psychology of trading 8:37 Turning HonTe’s 2020 trading success into a book 12:33 Extreme side of the deflation camp 13:33 Two words: Policy lag 17:04 Outlook for rates 20:22 Implications of deflation 24:15 Why is there a shortage of dollars? 27:10 Scenario for deeper a longer recession, global depression 30:59 Oil and energy pivotal to the deflation story 33:14 Why Japan might be in the best position 34:34 What the inflation camp is missing 37:58 Focus on the Fed 42:11 Thesis of deflationary depression and implications for a portfolio 44:50 Why bonds will have more upside 46:00 What would alter or reinforce the thesis on deflation? 48:12 Final thoughts