Our Financials & Housing analyst Josh Steiner has over two decades experience in the investing game on both the buy side and sell side. Before joining Hedgeye, he worked at multiple shops including Millennium, Amaranth and Lehman Brothers. Below are his thoughts on a wide range of interesting subjects including current market risks, his favorite all-time movie and the advice he would give his 16-year old self. He recently launched a new investing research product called Financials Sector Pro.
IF YOU WERE AN ANIMAL, WHAT WOULD YOU BE (AND WHY)?
Any apex predator. A Polar Bear, Orca or Lion, Golden Eagle. It would be miserable to be lower on the food chain and know that eventually you’ll make just one mistake and be eaten as a result.
WHAT WOULD YOU DO FOR A LIVING IF YOU WEREN’T AN ANALYST AT HEDGEYE?
If we are talking job, I would probably be at a hedge fund somewhere. If we are talking career, I suspect I might have become a doctor.
My wife tells me that if I had not found her, I would probably be in jail.
What is the single biggest market risk right now?
Most of these questions are short, fun questions, but this is a serious question. So let me give a slightly longer, more serious answer. First off, who in November 2019 would have answered this question with “a Pandemic four months from now”? No one. That’s the thing to realize and remember about risk.
Sometimes it builds slowly from reasonably foreseeable places. Sometimes it comes at you from out of nowhere like a bolt of lightning. In the short-term, the risk resides in the 28 million unemployed workers when their benefits run out and the millions of small businesses now running on fumes after exhausting their lifelines.
Another real risk is the election. Recall what happened to markets in 2017 after Trump’s election. Longer-term, I believe the other large-scale known known risks are climate change – this one appears existential – but also profligate government spending combined with central bank money printing. Fiscal conservatives are now an endangered species in Washington and the Fed appears to have lost all grounding.
Exhibit A: why is the Fed buying Microsoft and Visa corporate paper? The government and central bank have us on an accelerating path toward the dollar losing world reserve currency status and that will precipitate a host of problems that will make the Covid selloff appear small by comparison.
If you could travel back in time, where would you go?
I’d go way, way back. Like 14 billion years back. To before the Big Bang. To me, it’s literally inconceivable what preceded it. It perplexes me whenever I think about it. My number two choice would be to go back to the 1990s. I loved that decade. So much fun. No cell phones. No Internet. No Social Media. It was fantastic.
What’s your favorite (and least favorite) word?
Favorite word: Xiphoid Process. It’s the bone (technically, cartilage) just under the center of your sternum. In high school our Biology teacher, Mr. Mastrorio, convinced the class that it could very easily break off (not true) and I’ve lived with a moderate paranoia ever since.
Least favorite. Every cliché, overused business phrase, but especially “the reality is”. That one grates on me.
If you were a car—what year, make and model would you be?
A few years ago I got to drive a Lamborghini on a racetrack. It was their big boy, the Aventador. V-12 with over 700 hp and AWD. It was, by far, the most fun I’ve ever had in a car. Runner-up choice would be a DeLorean – the stainless steel, the gullwing doors, the flux capacitor – I rode in one as a kid and I remember it like it was yesterday.
Starbucks or Dunkin’ Donuts?
Mehhh … I’ve never been a very big fan of either. In Old Wall parlance, I’d rate both a Neutral. In a pinch, Dunkin’s ham/egg/cheese on English muffin isn’t bad.
If you could wave a magic wand and wipe away one person from earth who would it be?
For all the good in this world, there sure is an awful lot of evil. If it were up to me, I’d go full Thanos – my list is long, or for those older, Travis Bickle … “Someday a real rain will come and wash all this scum off the streets.”
What is your favorite movie of all time?
I’m a huge movie fan so this is tough, but lately – because my kids are at that age – we’ve been watching a lot of family movies so I’d probably go with either Goonies or Back to the Future for family fun or Paranormal Activity for the older, scary genre. If we’re talking serious movies, but not too serious, probably either The Last of the Mohicans or Stand By Me. Alternatively, Predator is just an amazing film. “I aint got time to bleed.”
What’s the most important book you’ve ever read?
Why We Sleep by Matt Walker. Just a profoundly interesting and important book. In my opinion, everyone should read this book.
If you could tell your 16-year old self one thing, what would it be?
Don’ts: Don’t buy that Trans-Am in 1992 and skip that last ski run at Tahoe in 2006.
Do’s: Buy Amazon in 1997 and Bitcoin in 2010.
Also, time goes by faster than you realize: spend more of it with your family and the ones you love.
Who is the best CEO past or present?
Charlie Ergen. His is an incredible story. It’s too long to detail here, but what a wild ride. From humble, quiet middle-class accountant to tycoon billionaire media exec. He’s also a heavy duty poker player, but his biggest bet was probably when, in 1995, he put his first (and only) Geo satellite, without launch insurance, on a Chinese Long March 2E rocket that, at the time, had a reliability rating of 50%. Two successes. Two explosions. No insurance. Ergen’s was the 5th launch and it worked. The rest is history. If you’re going to bet big, go all in.
What is the single greatest invention of all time?
Either wine or beer – depends on the occasion. Most people think Benjamin Franklin said “God made beer because he loves us and wants us to be happy”, but what he really said was “Behold the rain which descends from heaven upon our vineyards; there it enters the roots of the vines, to be changed into wine; a constant proof that God loves us, and loves to see us happy.”
What’s your favorite professional sports team?
Patriots, but now I see myself also watching a lot of Tampa Bay Bucs games.
What annoys you the most?
The lack of real, unvarnished, substantive discourse in modern day US politics. Case in point: the sound bite/chirp/zinger framework of modern U.S. Presidential debates – it really is a reality TV-type setup, i.e. tell us how, as President, you would solve this profoundly intractable, complex problem. You have 15 seconds to do so, then your challenger has 10 seconds to respond, and then you have 5 seconds to respond to that. Then on to the next profoundly complex problem.
Compare today’s 1-millimeter deep discussion of topics with Lincoln’s Cooper Union Address, which was 7,000 words. I used to love watching Tim Russert’s Meet the Press on Sunday mornings but haven’t found a good format for political discourse since. I’d be in favor of the major candidates – both in the primary and the general – going on the Joe Rogan podcast for a semi-substantive one hour conversation. I decided to listen to the Joe Rogan/Bernie Sanders podcast and came away realizing Bernie was actually less crazy than I had assumed.
You’re on a desert island. You can only listen to one album. What is it?
Journey. Either Escape or Frontiers. Neal Schon’s guitar and Steve Perry’s vocals. Never gets tired.
Are America’s best days behind or ahead?
Ahead, but we probably have to traverse a major Fourth Turning event first. Technological change is happening at an exponential rate and the US is still the global leader on that front. The future is going to be incredible. Read Kurzweil’s The Singularity.
What’s the best piece of advice you’ve ever received?
Be your own boss. My stepfather was a doctor and had his own practice. He gave me that advice when I was a teenager. Keith is my boss, but I have a lot of latitude and Hedgeye is great. It really is a fantastic place to work.
What’s your favorite quote of all time?
Intellectual brilliance is no guarantee against being dead wrong. – Carl Sagan
What is your biggest fear?
It’s either snakes or being homeless. The thought of either is terrifying.
What would you like written on your tombstone?
Heaven is a place where all the dogs you've ever loved come to greet you.
BONUS QUESTION: What’s your favorite deli meat?
Prosciutto, definitely.
