#414 Andy Constan: Markets Vulnerable to Disappointment, Cautious on Equities, and the 60/40 Strikes Back

<p>Andy Constan, founder and CIO of Damped Spring and a veteran of Bridgewater and Brevan Howard, makes his debut on The Julia La Roche Show. He lays out his four-pillar macro framework and explains why he's turning cautious on equities despite a strong U.S. economy. His "pie theory" argues that the earnings AI companies are promising add up to more than the GDP available to deliver them. His "hamburger theory" warns that the massive borrowing needed to fund AI capex could stall if capital markets take a breather. With rates spiking for the seventh time since COVID, Constan doubts policymakers will engineer another V-top. He is currently short equities and max long long-term bonds, arguing that the much-maligned 60/40 portfolio is finally worth owning again. He also gives his early read on Fed Chair Kevin Warsh, explains what it would really take to kill inflation, and argues that this cycle has no clean historical analog because it's fueled by public-sector rather than private-sector debt. He closes with the story of analyzing every trade from the 1987 crash on the Brady Commission at age 23, and his core advice: own a well-constructed portfolio at your risk target and hold it for life.</p><p>Thank you to our partners</p><p>Augusta Precious Metals — To learn more, visit <a href="https://juliabuysgold.com/" rel="ugc noopener noreferrer" target="_blank">https://juliabuysgold.com/</a> or text “Julia" to 35052</p><p>Monetary Metals - learn more at <a href="https://www.monetary-metals.com/julia/" rel="ugc noopener noreferrer" target="_blank">https://www.monetary-metals.com/julia/</a></p><p><br /></p><p>Links: </p><p>Website: <a href="https://dampedspring.com/" rel="ugc noopener noreferrer" target="_blank">https://dampedspring.com/</a></p><p>X: <a href="https://x.com/dampedspring" rel="ugc noopener noreferrer" target="_blank">https://x.com/dampedspring</a></p><p>Substack: <a href="https://substack.com/@dampedspring" rel="ugc noopener noreferrer" target="_blank">https://substack.com/@dampedspring</a></p><p><br /></p><p>Timestamps: </p><p>00:00 Introduction and welcome Andy Constan<br />00:50 The four-pillar macro framework: growth, inflation, risk premium, positioning<br />02:42 Where we are: a strong economy and 66 months of above-target inflation<br />05:20 AI and the "pie theory": why there isn't enough GDP for the earnings expectations<br />12:22 The "hamburger theory": who pays for the AI capex boom<br />13:50 The seventh rate spike: will it V-top again?<br