“A Empty Room Kinda Guy” (Guest: Robert Mullin)

Patrick Serezno and Kevin Muir host a podcast featuring Robert Mullen, founder of Marathon Resource Advisors. They discuss the significant VAR shock from the decline of Liberation Day and Robert's portfolio positioning in response to the evolving macro environment. Robert shares his background as the oldest son of a stockbroker, which instilled financial literacy in his family. He recounts early investment experiences, including buying stocks based on real-world observations and financing his college education through investments. His academic journey led him to the University of Colorado, where he earned a degree in economics and completed internships at EF Hutton.

Reflecting on his career, Robert describes the excitement of working at Franklin Templeton during the dot-com bubble, where he observed peers amassing wealth while earning a modest salary. He draws parallels between the current financial landscape and past "echo booms," particularly in AI and crypto, expressing skepticism about the sustainability of current market trends. He critiques the concept of "financial alchemy" that leads to unrealistic risk-return profiles, referencing companies like MicroStrategy that issue stock to buy Bitcoin.

Robert humorously mentions the proliferation of cryptocurrencies, including "fart coins," and questions the valuation of innovative financial concepts. He compares current market behaviors to the dot-com bubble, specifically citing inflated valuations of companies like Internet Capital and CMGI. He notes the differences in risk-taking between past hedge fund operations and today's focus on minimizing volatility, suggesting that this trend may not be sustainable. The conversation concludes with a focus on changing correlations within the market and associated risks.

The interaction between bonds and stocks is discussed, noting that from 2000 to 2020, bonds served as an anti-correlated asset to equities. The low inflation environment of the 2000s and 2010s allowed central banks to stimulate markets during corrections, a strategy that is less viable in high-inflation scenarios. Critiquing the 60-40 portfolio strategy, it is argued that it is based on a 20-year anomaly rather than historical performance. The strong dollar has led to non-US investors becoming overweight in US assets, benefiting from the dollar's strength during market corrections.

The podcast notes a significant decline in resource prices, with nominal declines over 50% and inflation-adjusted declines closer to 70%. There is a pressing need for investment to fill the pipeline. Successful companies during downturns are characterized as low-cost producers generating substantial free cash flow. The introduction of the Real Assets Equity Income Fund focuses on companies with sustainable dividend yields of 5-12%, emphasizing buying at historically cheap valuation multiples.

The speaker discusses the divergence between commodity prices and stock performance, recommending gold mining companies due to favorable underlying economics. Gold remains a valuable asset for portfolios, particularly as a hedge against inflation and U.S. dollar risk. Central banks have been major buyers of gold, while Western investors have been selling, creating a unique market situation. Despite gold equities performing well year-to-date, there is a lack of interest in buying additional shares of gold ETFs.

The conversation transitions to copper and natural gas, with discussions on their market dynamics and the impact of tariffs. The analysis of Tesla reveals that its stock is coiling in a triangle formation, indicating potential for a significant move. Microsoft and Meta are noted for their earnings reports, with concerns about their stock performance following positive earnings. The charts for major tech stocks suggest a potential need for sector rotation to drive the market higher.

The podcast concludes with discussions on personal summer plans and the anticipation of future episodes focusing solely on interviews.