What’s the Better Bet? Stocks or Gold? - Ep. 916
68
Companies
84
Key Quotes
4
Topics
4
Insights
🎯 Summary
Podcast Summary: What’s the Better Bet? Stocks or Gold? - Ep. 916
This 59-minute episode of Unchained features a spirited, collegial debate between Ram Alawalia (Limita Capital) and Vinny Langham (Praxis Capital) regarding the relative merits of investing in Stocks (S&P 500) versus Gold as a strategic asset allocation, particularly in the current macroeconomic environment characterized by high liquidity and potential systemic risk.
1. Focus Area
The primary focus is a macroeconomic investment debate comparing Equities (Stocks) against Precious Metals (Gold). Secondary themes include the role of Bitcoin as a finite asset, the impact of fiat currency devaluation/inflation, and the strategic implications of corporate share buybacks.
2. Key Technical Insights
- Productive vs. Inert Assets: Stocks are fundamentally productive assets that generate earnings and free cash flow, allowing for reinvestment and adaptation, whereas gold is an inert commodity whose supply increases by about 1.5% annually (an inflationary supply).
- Asset Repricing in Inflation: Real assets like stocks and real estate reprice with inflation, maintaining purchasing power, while fiat currency is a “sinking asset.”
- Share Buybacks as Capital Deployment: Stock performance is enhanced not just by harvesting fiat liquidity but by corporate earnings being deployed via buybacks, which reduce outstanding shares, a mechanism unavailable to gold.
3. Market/Investment Angle
- Ram’s Bullish Stance on Stocks: Stocks have a superior long-term track record due to innovation and earnings growth. He views gold’s recent strength as tactical (driven by China/international divestment) and believes gold is currently overbought.
- Vinny’s Bullish Stance on Gold: Gold is the “hardest finite asset” and serves as the best hedge against infinite fiat supply. He argues that the current macroeconomic structure suggests a coming “crisis of capital,” making gold a necessary defensive reserve.
- Risk Assessment: Vinny suggests a “barbell approach” of short-term Treasuries and gold to wait out what he sees as an unsustainable stock market rally priced for perfection, anticipating a potential recession or bond market correction.
4. Notable Companies/People
- Ram Alawalia (Limita Capital) & Vinny Langham (Praxis Capital): The central debaters.
- Apple, Google, Meta, Nvidia: Cited by Ram as examples of companies driving legitimate innovation and earnings growth that underpin stock market performance.
- FDR (1933): Mentioned in the context of the US government making gold ownership illegal and forcing conversion at below-market rates, highlighting the sovereign risk associated with gold.
- Token 2049 Singapore Speakers (Eric Trump, Tom Lee, Arthur Hayes, etc.): Mentioned during sponsor reads, indicating the podcast’s connection to the broader financial/crypto ecosystem.
5. Regulatory/Policy Discussion
- Share Buyback Controversy: Vinny argued that buybacks deprive the state of tax revenue (as capital gains are deferred compared to dividends), contributing to deficits and wealth inequality, potentially harming the startup ecosystem by diverting excess capital away from M&A/innovation.
- Ram’s Defense of Buybacks: Ram countered that buybacks are a rational, tax-efficient corporate finance decision when companies have excess capital (e.g., shelving projects like the Apple Car). He prefers this over unproductive spending.
- Sovereign Risk: Ram emphasized the historical risk of government confiscation or devaluation of assets held under sovereign trust (citing 1933 US gold seizure and Argentina 2001 currency devaluation).
6. Future Implications
The conversation suggests a divergence in outlook:
- Ram: Believes the long-term trend favors productive, innovative assets (stocks) driven by technological advancement, provided the current stability holds.
- Vinny: Predicts an impending systemic break due to excessive fiat creation, leading to a “crisis of capital” where hard, finite assets like gold (and potentially Bitcoin) will outperform, and stocks will falter.
7. Target Audience
This episode is most valuable for Professional Investors, Financial Advisors, and Sophisticated Retail Investors interested in macro asset allocation strategies, particularly those weighing traditional hedges (gold) against growth assets (equities) in an inflationary, high-liquidity environment.
🏢 Companies Mentioned
Bologi Sreenivasan
✅
Event Attendee
Vlad Tenif
✅
Event Attendee
Fannie Mae
✅
unknown
And Argentina
✅
unknown
All I
✅
unknown
World Trade Organization
✅
unknown
Bretton Woods
✅
unknown
US American
✅
unknown
Luke Groven
✅
unknown
The United States
✅
unknown
So AI
✅
unknown
Model T
✅
unknown
Binance Pro
✅
unknown
Binance Academy
✅
unknown
Grand Prix
✅
unknown
💬 Key Insights
"I'll bet you gold breaks 5,000 in the next 12 months."
"I think inflation goes to three and a half, 4% and 4 and a half. They're going to cut rates. I don't think we'll see. But probably inflation is going to go up to that level again."
"My advice to a lot of my friends is, look, if you know that you're going to get, you know, maybe, you know, even if you say gold does just to do 10% a year for the next couple of years and wait around for a crisis to happen. That for me is better than putting all your things into stocks and watching a 40%, 50% drawdown, which is what I'm expecting to happen at some point."
"I'll make a prediction. Yeah, I think we'll hit $10,000 per ounce within the next two years."
"And central banks are buying gold en masse. So the fact that central banks are rotating into gold right now and not US treasuries, I don't think gold is even close to a top."
"I saw a chart. I think Luke Groven posted it where it shows, you know, basically gold is, you know, sorry, long-term treasuries are being offloaded by foreign governments in favor of gold."
📊 Topics
#artificialintelligence
66
#startup
5
#investment
3
#generativeai
2
🧠 Key Takeaways
have fun
get into, but I wanted to keep it focused
keep an eye on the carry trade between Japan and the US