Dear Hedgeye Nation,
We are excited to bring you yet another heavy-hitting macro-dose of financial insight with our newest Real Conversation on HedgeyeTV.
Throughout June, Hedgeye CEO Keith McCullough is hosting a special Real Conversations series with four leading market strategists: Inflation Tsunami: Investing During A Rising Inflationary Tide.
In this edition, Keith is joined by James Davolos, Portfolio Manager at Horizon Kinetics.
For access to the entire slate our special "Inflation Tsunami" interviews, click here.
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TRANSCRIPT
McCullough: Can you hit again on the effect of ESG on Capex. Do you think that is something that you can actually change? Or is that going to perpetuate inflation?
Davolos: Oh, it's going to be one of the most wildly inflationary forces we've ever seen.
McCullough: Wait, you mean an government policy can be inflationary? Ha.
Davolos: But ESG in particular, because you have this green wave worldwide. Look at what the Chinese urbanization and development of the late 90's into the 2000's did to the commodity index.
Now magnify that times 10x, and look at the entire world ripping out their existing power grid and shoving a bunch of Copper, Nickel, Zinc and Iron in there to modernize all of these projects.
I think that all of these industries have looked at it for the last 10-15 years going back to the global financial crisis, saying, 'There's never going to be this type of a secular demand driver ever again. So we're not doing long cycle investments. We're actually going to reign it in because we're never going to be in an aggressive growth environment again.'
Guess what, it takes a lot longer to get that supply back on now that you've got this enormous fiscal wave that is going to be very oriented towards these types of commodities colliding with a supply curtailment and limited supply.
Live insight from the webcast
MORE INSIGHT WITH JAMES DAVOLOS
James is currently the Co-Portfolio Manager for Horizon Kinetics' Inflation Beneficiaries ETF (INFL), the Internet Fund as well as several private funds and institutional separate accounts.
You can also watch James' recent "Hedgeye Investing Summit" interview with Keith and Horizon Kinetics CIO Murray Stahl, here. They discuss Horizon Kinetics' Inflation Beneficiaries ETF (INFL). $INFL is an actively-managed ETF which launched in January 2021 and has net assets exceeding $500 million.
