I had an opportunity to have the
as a guest on the podcast. You can subscribe to his Substack here:
We had a very broad conversation on many topics including:
Current take on the equities market
Real Estate
AI
Best free bullish ideas
Best free bearish ideas
Hope you enjoy!
The genesis of this podcast interview:
If you are new to my Substack and podcast, I welcome you to subscribe as well!
AI Generated Briefing doc
Briefing Document: Sunday Chat - Simple Side and Not Your Advisor
Subject: Review of a podcast interview between "Simple Side" and "Not Your Advisor" discussing market conditions, investment strategies, and the future of technology and finance.
Executive Summary:
This podcast features a conversation between two Substack content creators, "Simple Side" and "Not Your Advisor" (NYU Grad), delving into the current state of equity markets, investment strategies (particularly bonds), the AI hype cycle, and specific bullish and bearish ideas for investors. Both individuals share their backgrounds in finance and content creation and emphasize transparency and a macro-focused approach to investing. They express concerns about market overvaluation, speculative investment behavior, and the potential for a market correction. They also discuss the challenges and opportunities presented by AI, and offer specific investment ideas in the energy sector.
Key Themes and Ideas:
Introduction and Backgrounds:
Both "Simple Side" and "Not Your Advisor" discuss their origins as content creators on Substack, motivated by a desire to share their knowledge and investment strategies in a digestible format.
"Simple Side" started their Substack in college, aiming to simplify complex financial jargon and track their investment portfolio for validation. "The name, the simple side, came from the fact that every time I would go to find a newsletter to read or anything at all to read about. Um, there was just so much jargon that was involved with everything."
"Not Your Advisor" started their Substack and podcast after exiting the corporate world, wanting to create a concise, advertisement-free daily market update and pass down investment knowledge to their family.
Copy Trade Platform by Simple Side:
"Simple Side" is launching a "Copy Trade" platform, allowing subscribers to replicate their portfolio trades transparently. "Hey, I'm going to put my portfolio together. And I want you to be able to copy it one for one, see the returns one for one. see the trades that I'm making one for one. There's no way for me to hide it."
This platform aims to combat the "fantasy land" of flashy, unproven investment advice often seen online by providing verifiable results.
"Simple Side" will not be taking any fees from the portfolios copied on the platform.
Market Outlook and Concerns:
Both guests believe the equity markets are nearing a top and are overvalued. "I think we're pretty close to a top... everything that we're looking at is so speculative now."
They cite metrics like total market cap relative to GDP being at all-time highs, suggesting low expected returns.
"Simple Side" points to the lack of stock price appreciation even when companies meet high growth targets as a concerning sign. "when companies have these really high growth targets, which almost all of them do now, and they hit those really high growth targets, there's really no change in the stock."
"Not Your Advisor" highlights concerning macroeconomic indicators like a high "true rate of unemployment" (using Lisb U methodology) and record levels of consumer debt. "if you look at consumer debt, it's at record and the annual APR for for that consumer debt is at record levels."
They also express skepticism towards government economic data, citing negative revisions.
Hedging Strategies and Bond Investments:
Both agree on the importance of hedging long-term portfolios, particularly given the current market environment.
"Not Your Advisor" favors TLT (Treasury bond ETF) as a safe-haven asset during market sell-offs. "everyone rotated into TLT because they're betting that the government won't default on that."
"Simple Side" discusses using ZROZ (zero-coupon bond ETF) and TMF (3x leveraged bond ETF) for potentially higher returns if rates decline, acknowledging their greater volatility. He is thinking "do I go half in that I'm all right or do I go 100% in that I'm all right?"
AI Hype and its Implications:
"Simple Side" is wary of the AI sector due to its speculative nature and difficulty in valuing companies. "anything that's related to AI right now is so speculatory...I'm not the biggest fan."
"Not Your Advisor" acknowledges the significant capital expenditure in AI by major tech companies but questions the long-term return on investment.
"Not Your Advisor" recommends following Gary Marcus, who offers a more critical perspective on AI and its limitations, arguing that scaling laws may not lead to Artificial General Intelligence (AGI) and that companies may need to move away from LLM.
"Simple Side" believes AI's primary benefit will be cost-cutting rather than revenue generation. "I don't expect very many companies to make excessive profit off of any sort of AI that currently exists. Um I I really think that AI for now is is only going to be good for cost cutting."
Bullish Ideas: Energy Sector
"Simple Side's" bullish idea is to invest in companies powering data centers, particularly those developing Small Modular Reactors (SMRs). He cites Doomberg's Substack as a valuable source of information on energy.
"Not Your Advisor" suggests Energy Transfer (ET), a natural gas exporter, as a dividend-paying stock benefiting from the increasing demand for energy.
Both acknowledge the potential for natural gas as a bridge fuel for data centers.
Bearish Ideas: Real Estate and Non-Bank Financial Institutions:
"Simple Side" is bearish on commercial real estate, citing significant price discounts. They also see potential for shorting business service companies due to AI-driven cost-cutting.
"Not Your Advisor" is bearish on non-bank financial institutions due to their vulnerability in a financial crisis. They also express concerns about housing builders facing inventory challenges and margin compression.
Notable Quotes:
Simple Side: "I don't want to buy a stock where it hits growth targets and then we see a 10% decline."
Not Your Advisor: "We're trading off of like fake data that comes out every week from the government."
Simple Side: "I really think that AI for now is is only going to be good for cost cutting."
Not Your Advisor: "Even if mortgage rates go down, uh I suspect they're going to have trouble filling the inventory of buyers and that's their only job is to build homes and sell homes and I think their margins are going to compress tremendously."
Actionable Insights:
Consider hedging long-term equity portfolios.
Exercise caution when investing in AI-related stocks, and seek out diverse perspectives.
Explore investment opportunities in the energy sector, particularly in companies developing SMRs and natural gas infrastructure.
Be wary of commercial real estate and non-bank financial institutions.
End Note:
This podcast provides valuable insights into the perspectives of two independent financial content creators. Their discussion highlights both the opportunities and risks in the current market environment, encouraging investors to approach their strategies with caution, a macro-focused lens, and a long-term perspective.
Share this post