42 Macro合伙人：美股是蓄势待发的弹簧，看多至2027年

What is it like as a kid and you go out there for your first Ivy League game like Yale, Cornell this weekend? Uh, it's, uh, it's best time of year. That's part of the country. Bone chilling. Uh. It's exciting. It's very exciting. I mean, I look at the hairs. Did you. Do you think you were cheated because you didn't go to the playoffs last year to get shellacked by Montana? You cheated. Yeah, but no, I mean, I'd rather.

Yeah. No, no, we had a good time. It's very cool though. I mean, you know, the whole college sport, I mean, it's different since the level of the passion, really of of what you and I remember. Yeah. Yeah. It is. What's the atmosphere like? All the crazy alums. The game, the Harvard Yale game is just insane. What's it for? Like a player when you guys go on the field? Is it just another game? Do you guys, as young kids have any idea what's going on?

No, it's not another game. I mean, you have presidents in the crowd. Yes. And former presidents in the crowd. It's definitely not a normal game. Uh, but I would say the contrast between being a player and being an alumni is very different. Yeah, well, you're a player. It's very focused. It's very serious. You're an alumni. It's the biggest party in the northeast. You are going to chemistry. I know, there you go. Sunday night.

Microeconomics. So let's see Slutsky, Hexi, and we'll get it right. Jerry is still in the equity markets here. These are the oddest markets I've ever seen. I just quoted a zero hedge quote. Just. I've never seen it like this. How do you stay invested confidently, given the upset and turmoil right now? Yeah. Thank you for asking that question. Excellent question. Because I think you really do need to have a systematic process to make sense of all the noise, the cacophony of noise.

We're in a period right now with the distribution of probable economic policy. Market outcomes is as wide as probably anybody trading risk has ever seen. And as a function of that, you must have a systematic process that allows you to interpret your your data challenger, Bayesian prior and ultimately come up with a better asset allocation mix for your clients. So what are we doing in a world where, um, yields are appear to be higher for longer?

That's kind of what the experts are telling us. But we've got excellent economic growth here. So maybe the rates are where yields are, where they kind of should be. Are you still active in this equity market? Let's start with the equity market first. Yeah we're very bullish. Um, uh, you know, we we have two views. Our Bayesian prior from a research perspective is that the market has substantial upside and is a coil spring.

We can talk about that. Our view is that after that coiled spring, you know, to rise, it may persist throughout 2027 and perhaps even in 2028. But after that, we're likely to experience a secular bear market, uh, and ultimately the bear market later. Yeah, well, secular bulls tend and and secular bears and and and and I and CapEx bubbles tend to catalyze frenzied overbuilding, debt financing structures that are complex.

Uh, you tend to see disruption of legacy industry. So those are all things that are likely to be, you know, you know, um, features of this, uh, market cycle. The equity markets have been driven, uh, rightfully so, by really, really strong earnings like exceptionally strong earnings here so far in 2026. If nothing else, the comps for 2027 are gonna be more difficult. Is that a headwind? The fact that the growth rates and earnings are going to slow.

Is that something you think the market can digest here? I think the market's been digesting that really since early June in terms of the increasing the expansion and volatility that we've seen across the indices. In our view, we think that's a coiled spring, however, because if you think about the drivers of this market cycle, uh, on one hand you have, uh, what we've been calling a productivity boom and a jobless recovery.

Those should equal margin expansion. The margin expansion should equal multiple expansion. And we also have a view that liquidity is on the way which should equal multiple rerating. And so that's why we're so bullish when we look out into 2027. And and you made a comment on bonds and I respectfully disagree. Bonds are not at their equilibrium price level. We run five sophisticated models that try to ascertain what the fair value of the ten year nominal Treasury yield is, and the mean of those models is 6.04%.

Really. And so as a function buyer, we can and likely will go higher until until one of two things happens. The Federal Reserve's hikes 2 to 3 more times to truncate its accommodative policy buys. Or we see an expansion of buybacks via the Treasury, TJ funded, and or bank deregulation. Reserve management purchases or yield curve control out of the fed. That sort of caps yields at a certain level. So what am I doing in the bond market here I mean Thomson triple leverage all cash.

He's not doing anything. He's not playing. I'm at the two year treasury at 4.9% I feel like that's a good living there. Do I take credit risk above and beyond that in our view, when whenever the sovereign is buying its own bonds, it's a signal to investors to go buy other asset classes, other to go further out on the risk spectrum. Uh, in our view, a lot of investors, based on our positioning model, investors aren't appropriately allocated to risk their is is killing us folks with some fancy statistics talking on a lazy Friday in September.

We're going to crush it here. I will be going to services for Alan Greenspan on Monday. I'm honored to be invited by the family. We'll go down to Washington for this very emotional service of a guy who believed in 90 and uncertainty out of Chicago, 1921. You're spouting Bayesian prior years, which is a certitude about where I am right now and using that prior guesstimate into the future. Do you? Are you saying Wall Street now is so damn certain they know where they're going?

I think they're not necessarily certain. I think the focus has become hyper short term. And as an equity career that the fate has come in. This is right in the formulas, folks. Here the theta comes in. Does that make our narrative heavier weight? Absolutely I think so. It increases the value of gamma in terms of, uh, as a as a risk attribution. However, if you want to get away from that, in my opinion, where I think the bulk of the returns come from for most investors is going out, extending that theta and understanding that there are certain macro forces that dictate the performance and dispersion asset markets.

Where could you do you have some humility, like a 90 and uncertainty out of the University of Chicago that oops, we're going to get a correction. We're going to get an eye drawdown and we're going to be uncertain about their future. Translated get some humility. Yeah, I think the best way to transition from uncertainty to risk and actually do something about that is to have a Bayesian inference process where you're challenging your assumptions on a daily basis.

Okay, unconditional data. But does that lead to an overconfidence like we see now in a market that's completely stacked? Detecting AI. I think what leads to overconfidence is confirmation bias. It's anchored around a legacy narrative. In what we do in 42 macro is we understand our legacy narrative. But again, every single day we refresh the same models to challenge that legacy narrative with new data to interest rates.

Change your equity narrative here. Yeah, we've been so we've been bearish on bonds since December of 2021. We call it the for the death of the 6040 portfolio. And as a function of that since January of 2023, we've been very bullish on stocks, very bullish on cryptocurrencies. Into September of 2023, we've been very bullish on gold, our bearishness on bonds and the policy intervention as a result of that is why we're so bullish.

I'll save the interview. I want to say folks,