About this episode
In this episode, Ryan Caldwell, CIO of Chiron funds, is joined by FS Investments Chief U.S. Economist Lara Rhame, Chiron Head of Trading Peter Bianco, and Chiron Portfolio Managers Brian Cho and Scott Sullivan. The group reflects on the markets and economy in Q1 and what these trends may mean for the rest of the year.
Ryan Caldwell (00:00:04):
This is the FireSide podcast series, by FS. And today this is the Chiron 3D report for the first quarter of 2021. Today I’m joined by my four colleagues; Lara Rhame, Peter Bianco, Scott Sullivan and Brian Cho. Good morning, everybody.
Lara Rhame (00:00:27):
Peter Bianco (00:00:27):
Ryan Caldwell (00:00:28):
By the way, Lara, I had to start here. We had to change the podcast name. As soon as Rhame gets involved, and marketing gets involved, we have new names, new things to do. They didn’t like my Jocko, Chiron episode one, two, three… That was no good. So here we are.
Lara Rhame (00:00:47):
Sorry about that. Fingerprints all over it.
Ryan Caldwell (00:00:49):
No, you’re not. You’re not sorry at all. It’s fine. It’s fine. That’s why we integrated you into the podcast. We needed to shake this up a bit.
Lara Rhame (00:00:57):
Happy to do it.
Ryan Caldwell (00:01:00):
So, I thought what we would do today is go through our—We wrote our quarterly, us being the Chiron Capital Allocation team and the Chiron Mid Cap Fund team. We wrote our 3D report to get through Q1 of 2021. And I actually, as I was writing it, it invoked a little bit of a bigger discussion. And so, what I thought we might do today is tear through that. And so, I think from a setup perspective, here’s what I’m going to throw at you guys. And again, for our listeners, I didn’t give everybody a lot of time to prep. Partially mistake, partially just to see what they’re going to say.
Peter Bianco (00:01:41):
Ryan Caldwell (00:01:41):
By design. So, again, I thought we’re at an intersection of a lot of things topically, and if I look at Q1 and how I tried to use this report was to talk a little bit about the cycle, and the cycle of the market, and the cycle of the economy, because I think that’s one of the things we’ve been talking about for a while, and I know Lara has written about as well and looking at what markets we’re anticipating versus the actual data and maybe updating where we’re at in that, because, obviously, the first quarter, I thought, was a pretty violent realization of a lot of things I thought were actually fairly obvious toward the end of the year.
Ryan Caldwell (00:02:20):
But, 1Q was really, I would say, almost a hard realization in the market. But where I want to go to from there is where we’re at. So, when I think about where we were at end of year to where we were at the end of the first quarter, like I said, it was this moment of acceptance and almost, to a degree, that by the end of March, the market had completely grappled onto the narrative that not only was growth going to be great, but we very well could be entering this period that was, the Roaring Twenties, because of all the stimulus and liquidity in the pipeline, how the consumer was going to res… U.S. consumer, specifically, was going to respond.
Ryan Caldwell (00:02:59):
And again, I think when you look at what happened with rates in the quarter, equities in the quarter and all of this we’re going to get into, I would say that consensus by the end of the quarter was really consensus and it was this macro narrative that inflation was here forever. And again, the consumer is going to power you through.
Ryan Caldwell (00:03:19):
So, I thought what we would do is maybe use this podcast to challenge consensus. And again, I’m a little skeptical that the narrative is so accepted, which is probably my own bias. And again, given where we’ve come from, a year ago where everybody was skeptical the other way. But again, there are some things lining up when you look at the cycle clock, you look at sentiment, they don’t-look-normal relative to where you would expect to be a year into a recovery. And I want to vet that out and talk through it.