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On The Brink with Castle Island

Mar 29, 2021

James Davolos, VP and portfolio manager at Horizon Kinetics, joins the show to make the case for inflation and to explain their Inflation Beneficiaries ETF, ticker $INFL. In this episode: 

  • How Horizon and Murray Stahl were one of the earliest asset managers to put client assets in GBTC
  • How Horizon's value approach landed them at a Bitcoin allocation
    James' reaction when Horizon first made the Bitcoin allocation
  • Whether Bitcoin is a growth or a value asset, and how to reason about it from either perspective
  • James' reaction to Jerome Powell's announcement on rates
  • The genesis of the idea to create an inflation beneficiaries ETF
  • James' case for inflation
  • Should the disinflationists be taking victory laps?
  • Why the Fed is calling inflation 'transitory'
  • Why we didn't get inflation from 2010-20
  • What crystallized the case for inflation for Horizon Kinetics?
  • The importance of the 'taper tantrum'
  • Why historical parallels are so hard to find – and why we have no historical precedent for our current moment
  • How the dollar is the 'least rotten apple'
  • The prospects for a non-dollar monetary system
  • The effect of ESG on commodity cycles
  • How fiscal spending and the political anti-capital movement represents a structural shift
  • The constant battle between capital and labor
  • Why equities may suffer from higher labor costs
  • Why Horizon focuses on asset light companies
  • James' answer to the equity-inflation return puzzle
  • Horizon's specific allocations to benefit from inflation
  • The early success of the Inflation Beneficiaries ETF
  • Why the inflation beneficiaries ETF does not contain Bitcoin
  • How this ETF sets itself apart from other ways to play inflation – and why TIPS aren't the best bet
  • Is the thesis playing out so far?
  • Why the Fed has to remain subtle with their debasement
  • James' pitch to Bitcoiners