Foundation Podcast 10/25

Show Notes

Show Overview

  • Review of:
    • The Biotech Sector
    • Cloud Computing Tech Names
    • Europe and Japan
    • Oil
  • Plus a discussion on why tips and picks from newsletters aren’t enough to be successful in markets  

Biotech Sector

  • Price action signaled the top – Head and Shoulders pattern
  • Macro Outlook – end of current business cycle with rates likely to tighten
  • Biotech was an overvalued sector the last few years – too much hype, yet not enough real results for many of these companies
    • Theranos – a blood testing company valued at over $9 billion that has yet to prove that its technology really works
    • Valeant – recent fraud allegations
  • Low interest rate environments lead to capital misallocation everywhere, not just in biotech
    • Sakti3 – a supposedly “revolutionary” battery company that could not produce any results  
  • The catalyst for the biotech drop was attributed to Hillary Clinton’s statements on drug prices, but in reality, those statements were not the real key to the drop. The real key was the underlying conditions that were already very apparent in the biotech sector. Any catalyst would have done the trick to send biotechs lower.  

Cloud Computing Tech Names

  • “Winner Take All” mentality – tech stocks are the last real area of growth due to their cloud computing presence
  • These stocks are building a giant moat in the cloud industry that will ensure protected profits for years to come
  • The macro equity pictures isn’t great, but the “winner take all” narrative is taking over and launching these stocks to new highs
  • Going long these tech stocks is a good hedge against any shorts you may have on in the market
  • Volatility is greatest at turning points, which currently makes it a difficult time to invest in the equity markets  


  • Breakout from triangle
  • Japan’s economy is stuck in a deflationary malaise due to unending government support for dying companies, a tight labor market, and terrible demographics
  • Is sex drive correlated to economic performance?  
  • Japan also suffers from extreme debt levels, and the only way they can fix that is by destroying their currency
  • The Currency Wars will also affect Japan’s decision to devalue their currency


  • Breakout of giant triangle
  • The catalyst for the move was Draghi’s dovishness in the last ECB meeting
  • Fundamentally, Europe is a mess. Their “union” will never work. Trying to manage competing fiscal policies under one monetary policy is a recipe for disaster.
  • There is a rise of anti-europe and anti-immigration parties all while the refugee crisis rages on
  • Europe will keep devaluing their currency to fight off inflation


  • Oil price is sitting at the lows and not recovering
  • Many oil companies have had to really tighten their belts and cut all expenses
  • Years of capital investment with the thinking that oil would stay at $100 a barrel is now making the pain for these companies much worse as they are forced to readjust to the new normal
  • The top 40 frackers in the U.S. use around 86% of their cash flows are going to service their debt costs. This is obviously unsustainable

Newsletter Picks Are Not Enough

  • Trying to profit off random newsletter picks does not work because there is no process behind this method
  • Process is KEY – it’s hard, but it’s what works




Subscribe To Our Newsletter

Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.