Episode summary
Bond Market Reckoning: Why Your Money Is Next | Tavi Costa
The David Lin Report
· · 49 min · Hosts: David Lin · Guests: Tavi Costa
Summary
Tavi Costa argues that investors are in a regime of rising yields, sticky inflation, and heavy debt where policymakers will eventually choose to inflate their way out rather than force a deflationary reset. He says the U.S. is facing a debt problem reminiscent of the 1940s, and that the result will likely be more intervention in bond markets, including larger Treasury buybacks and possibly yield suppression. In his view, that backdrop is broadly bullish for hard assets.
He says capital is already rotating into emerging markets, especially Latin America, and into resources, while U.S. technology still dominates portfolio weights and therefore has room to unwind over time. He is more constructive on bonds than many investors because yields have risen enough to improve their relative appeal, but he still expects a long rotation toward metals, mining stocks, and select energy names.
Costa is especially bullish on gold and silver miners, saying they combine strong margins with depressed valuations relative to the macro setup. He says his new Azura mining fund will be concentrated, with the largest exposure in silver, and will favor cash-flowing businesses, strategic developers, and exploration spending.
Key takeaways
- Costa thinks policymakers will likely choose inflation over a deflationary shock, making hard assets the favored trade.
- He says capital is rotating into emerging markets and the resource space, while U.S. technology still remains the largest global allocation.
- Costa believes bonds are becoming more attractive as yields rise, but he still sees metals and mining as a stronger long-term opportunity.
- He is most bullish on silver, saying silver companies have exceptional margins and his new fund will have more than 50% in silver-related exposure.
- Costa says the best mining investments are high-quality businesses with cash flow, strong balance sheets, and disciplined capital allocation.
Notable quotes
“I think there's a 75 80% chance they're going to go inflate our way out”
“It's definitely rotating to emerging markets. We're seeing a very significant appreciation of a lot of the Latin American funds and and also companies relative to the US”
“my base case is that silver is going to outperform in the next six to 12 months here”
How the episode opens
We have inflationary of the 1940s, the debt problem of the 1940s. You're just in a situation where you deflate your rate or you inflate your way out. Gun to my hat.
I think there's a 75 80% chance they're going to go inflate our way out. Did you just say we could see a 2008 deflationary shock and people should be, you know, looking at metals? Do metals perform well when there's a deflationary shock?
Investors want to know where money goes next? Now, we're speaking on Monday, October 12th, and uh oil prices are still above $100 after climbing in recent days last week. Gold is down about almost 1%.
Today, Bitcoin's down. Uh stocks are down to flat. Now, Tavi Costa joins us.
He is a CEO of Azura Capital. He was on early this summer. He turned to be a buyer of oil after collapsed from $100 the first time this year.
Let's see what he does this time once it's above $100. Importantly, he's going to give us an outlook on the economy, what's next for monetary policy, what's next for capital rotation, and congratulations. You're launching a fund tomorrow.
We'll talk about his strategy for investing overall. Welcome back to the show, Tavi. Good to see you.
Uh looking forward to this conversation, my friend, and uh it's always great to be here. — Looking forward to having you back. Okay. What should investors do with their capital is a regular, you know, as a general question. I think that's what everyone's asking themselves. And so, in light of everything that's going on right now, let's actually start before we talk about the economy, let's actually start with asset allocation strategy. And um the old adage, follow the money, follow where big money is rotating to.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- rising bond yields
- debt crisis
- market intervention
- inflation vs deflation
- gold and silver investments
Companies and tickers mentioned
- Azuria Capital LLC
Watch the episode
Watch “Bond Market Reckoning: Why Your Money Is Next | Tavi Costa” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from The David Lin Report
-
Oil Plunges 20%: Is $60 Or $125 Next? | Doomberg -
Bond Yields Spike Again: Brace For Bigger Shock | Peter Boockvar -
Jensen Huang RESIGNS After Second Affair: Nvidia's $855B Wipeout, What Next? -
New Global Arms Race Begins: Who Wins Trillion-Dollar Defense Boom? | Juno Industries -
Collapse Of Tech? Rosenberg &. Bianco Debate AI Bubble, Soaring Bond Yields -
Buy The Dip Or Short? Trader Reveals Key Signals | Jason Shapiro
The David Lin Report, this episode and its artwork belong to The David Lin Report. Octagon is not affiliated with the show; this page is an independent summary.
