In this episode of Excess Returns, we sit down with Kevin Muir, author of The Macro Tourist, for a wide-ranging conversation on market sentiment, asset rotation, and the growing signals of stress beneath the surface of global markets. Kevin explains why extreme bullishness can be dangerous, why gold and commodities may be flashing warning signs, and how shifts in currencies, energy, and global capital flows could reshape portfolios in the years ahead. From hedging strategies to volatility, from AI-driven concentration to international diversification, this discussion focuses on how investors can think clearly in an environment where traditional relationships are breaking down.
Topics covered:
Why extreme bullish sentiment can be a warning sign for markets
The meaning of “buying straw hats in the winter” and how to think about hedging
Market breadth, small caps, and whether rotations are healthy or late cycle
Gold, silver, and what precious metals signal about financial stress
Cross-asset volatility and why correlations are changing
Energy markets, commodities, and the long-term impact of underinvestment
Global capital flows, foreign ownership of US assets, and currency risk
The US dollar, trade deficits, and implications for international investors
Portfolio construction lessons from bonds, commodities, and FX
How macro regime shifts can change risk management and diversification
Timestamps:
00:00 Introduction and market sentiment overview
03:00 Buying protection and the straw hat analogy
07:00 Sentiment indicators and market confirmation
12:00 Market rotations, small caps, and late-cycle risks
18:00 Gold, silver, and precious metals as warning signals
23:00 Bonds, currencies, and broken correlations
29:00 Energy markets and commodity underinvestment
37:00 Global capital flows and foreign ownership of US assets
44:00 The US dollar, trade deficits, and FX volatility
52:00 Macro regime shifts and portfolio construction lessons