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Nov. 24, 2022

Cullen Roche - Why Macro Matters

Cullen Roche - Why Macro Matters

Cullen Roche is the Founder of Discipline Funds. Discipline Funds is a low fee financial advisory and asset management firm. Prior to establishing his own business, Mr. Roche founded his own investment partnership in 2005 after working at Merrill Lynch Global Wealth Management where he helped oversee $500MM+ in assets under management. During the the 7 years running the partnership he was able to guide the small business to high risk adjusted returns with no negative full year returns during one of the most turbulent periods in stock market history.

Mr. Roche's primary areas of expertise include global macro portfolio construction, quantitative risk management, behavioral finance and monetary theory.

He is regularly cited in the Wall Street Journal, on CNBC and in the Financial Times. Mr. Roche is a Georgetown University alumnus, growing up in the DC area and now living in San Diego, California with his fiancée Erica and their problem child, Cal, an Australian Shepherd.

You can find Cullen's bio here: https://www.pragcap.com/meet-cullen-roche/

Detailed Show Notes:

1:34 He talks about housing as an investment but also comes with quantifiable and unquantifiable expense ratio.

4:23 - Japanese real estate and what it may mean for real estate in the US

5:54 - Housing as a central component not just to the economy, but to everyone’s balance sheet.

8:16 - Housing in other countries whose Central Banks are more aggressive

16:32 - How consumers act in the beginning of economic slowdowns

17:43 - The Fed is worryied about the short term inflation rate

20:41 - The likelihood or more fiscal stimulus in a big downturn

23:08 - How banking operates in panics

32:33 - How Quantitative Easing works

47:36 - The Buffett approach in investing

52:40 - Focusing on investor behavior

54:07 - The inter-temporal (mismatched time horizons) conundrum

1:02:39 - Behavioral problems in a 60/40 portfolio

1:06:17 - Thoughts on diversification

1:15:20 - The biggest benefit of understanding macro finance