Banks, REITs, Energy and Betting Markets with Tim Travis, Portfolio Manager, TT Capital | S06 E42

·1 hr·5 clips

Tim Travis explains why bond yields are rising after Fed rate cuts, contradicting conventional wisdom.

The episode begins with hosts Tobias Carlyle and Jake Taylor welcoming back guest Tim Travis, a value investing specialist and portfolio manager at TT Capital Management. Travis updates on his firm becoming SEC registered and moving out of California. He opens with a macro view, noting valuations are at highs since 2000 and bond yields are rising despite Fed rate cuts, suggesting inflation concerns and a complex backdrop for banks. Travis discusses banks in detail, mentioning Wells Fargo, Citigroup, and JP Morgan, but highlights BNP Paribas as undervalued with a 7.5x P/E and 7.5% dividend yield. The conversation shifts to REITs, where Travis points to opportunities in names like Crown Castle, VTOL, and WP Carry, citing dividend yields of 5-7.5% and recent price declines. He advises caution in office REITs but notes potential in San Francisco with deep pockets. The hosts then explore Warren Buffett's sale of Apple stock, debating whether it's due to high valuations or succession planning for the next CEO. Travis references Charlie Bilello's tweet on Apple's valuation metrics being 50% above historical averages. The episode includes a segment on prediction markets accurately forecasting the election compared to failed polls, with Travis noting Kamala Harris had 33% odds. Later, Jake Taylor presents an extended analogy using animal tails (cheetah, kangaroo, scorpion, lizard) to discuss portfolio strategies like diversification, tail risk hedging, and liquidity. Travis shares his experience with concentration versus diversification, citing examples like Berkowitz and Sears Holdings. He also discusses Assured Guarantee's performance and buybacks. The episode concludes with macro thoughts on deficits, unemployment, and energy prices, with Travis recommending discipline and investment-grade bonds for stability.

As heard by us

Tim Travis connects stretched valuations and higher yields to a grounded case for balance in portfolio construction.

Tim Travis brings a wary, practical eye to a market where valuations are sitting near their highest levels since 2000. Fed cuts have not stopped bond yields from moving higher, and inflation worries, along with punishing mortgage rates, keep the housing question sharp for…

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Why you'd press play

You want a wary tour through expensive markets, rising yields after Fed cuts, and the cheetah-tail case for staying balanced.

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