AUDIO DISCLAIMER: We ran into some unexpected audio issues in production of this episode. Our apologies for the subpar sound.

Porter Collins and Vincent Daniels were some of the last investors to bet against the Federal Reserve and win. Over 13 years after the events of “The Big Short,” they reflect on the past decade wherein the Federal Reserve tamed asset price volatility by keeping short-term rates very low and steadily expanding their balance sheet via quantitative easing (QE).

Learning from this lesson, Daniels and Collins explains how Seawolf Capital largely avoided shorting stocks during 2021 because the Fed had the market’s back. Now that high inflation has forced the Fed’s hand to tighten monetary policy, Daniels and Collins think that 2022 will be an excellent year for short-selling, and that in particular the most vulnerable stocks are unprofitable growth companies that saw enormous price appreciation in 2020 and 2021. The pair explain why they remain bullish on nuclear energy, the cannabis industry, as well as stocks in the shipping and energy sector. Filmed on January 26 at 2pm ET (the same the day as the FOMC meeting).

Follow Porter Collins @Seawolfcap
Follow Vincent Daniels @VD718
Follow Jack Farley @JackFarley96
Follow Blockworks @Blockworks_

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Timestamps
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00:00 Introduction
00:54 Price Discovery In A QE World
06:47 Lessons Learned in 2008
20:01 Modern Monetary Theory (MMT)
29:30 Is Tightening Bad For Growth Stocks?
33:14 Shorting Stocks
40:16 BCB Ad
41:24 The Fed
51:53 Credit Markets Are Calm - Why?
53:54 2000 Is A Better Analogue
1:00:38 SPACs
1:04:00 Investing in Cannabis
1:13:47 Nuclear Energy
1:18:48 The Energy Trade
1:22:34 Investing In Shipping
1:28:14 The Debt Supercycle
1:30:08 Crypto
1:35:50 Housing
1:43:13 The Return Of Lord Vol

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