Welcome to the Big Picture interview. This is the first in a series of interviews with the most insightful and influential money managers, traders, economists and strategists. We will be doing this at least once or twice per month, and already have a stellar line up of guestsin the queue. (We had some technical difficulties with the recordings, which have since been fixed.)

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Felix W. Zulauf, for those unfamiliar with him, is a legend in the asset management business. He has worked in the financial markets for almost 40 years, starting his investment career as a trader for Swiss Bank, then training in research and portfolio management in New York, Zurich and in Paris.

In 1977, Felix joined Union Bank of Switzerland (UBS), Zurich, managing global mutual funds, heading the institutional portfolio management unit and being global strategist for the UBS Group. He founded his wholly owned Zulauf Asset Management AG in 1990, allowing him to independently practice his own individual investment philosophy.

Felix Zulauf always believed that the world economy and the financial markets move in cycles. That has helped him avoiding all the major casualties in the financial markets since the 1973/74 bear market in equities. He is a member of Barron’s Roundtable for over 20 years.

Today, we are thrilled to chat with Felix Zulauf: We discuss his work background, training, and history as an asset manager, and why he is coming out of retirement to advise on a new hedge fund.

Felix Zulauf Interview, part I

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Felix Zulauf Interview, part II

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Our next interview will run later this month. As always, your feedback is appreciated

Category: Investing, Media, Podcast

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

38 Responses to “The Big Picture Interview: Felix Zulauf”

  1. dagreenspan says:

    Any chance you can get the interview onto itunes so we can listen on the go?

    ~~~

    BR: We will be adding the transcript of this (in the future, within a week of the interview)

    I will set up an iTunes account so people can download the MP3s for mobile listening

  2. Mike C says:

    Awesome — this is terrific

    I am a big fan of Zulauf

  3. Becky says:

    Barry, thank you for that interview! What a coup!

  4. dead hobo says:

    Thanks for a first. He said virtually nothing I disagreed with. That’s frightening. Am I that smart or is he that wrong? Much of what he said regarding recent macro economics matches my remarks here for years, or at least the past couple of years, although he says it far more respectfully.

    The only thing I might possibly question … and that is because I need to know more about the current investing environment … regards gold. To what degree will a deflationary impact affect gold beyond a mild (20%) decrease? Also, how will this likely deflation affect other commodities? To answer this, you need to understand the actual impact of oceans of money being invested in commodities in non traditional ways. How much of the price is due to asset inflation? Are there any honest old times who understand derivatives enough to answer this? I suspect a lot of asset inflation is present, but no one has risen above the crowd to confirm or credibly refute my belief.

    Gold as a currency of democratic choice is an interesting concept. I think I’m going to research ways to invest that avoid markups and provide security. That being said, I don’t expect to put one dime in gold until the coming deflation arrives.

  5. dead hobo says:

    Regarding what will happen as economic systems fail … I think they will be ignored to a great extent. Shadow economies will appear and avoid the mainstream and the tax systems. There won’t be revolution. People will expect govt to perform basic functions, provide cash for wily operators to steal, and provide political theater. Govt will be the dark matter that holds society together.

    In the not too distant future, people will depreciate government and the current system by figuring out ways to avoid paper trails for tax collectors. Strong leaders won’t take over. Rather, govt will be ignored except when it can’t be or when it is needed. Govt will be less relevant except for those who depend on it.

  6. The Window Washer says:

    I’ve been wondering what iron you’d pull from the fire next.
    Seems like this has a better enjoyment/effort balance than a video program.
    Thanks for giving us more for nothing.

  7. vipasyana says:

    Barry,

    Great Manager to start, hopefully a regular, new segment.

    I probably would have appreciated a 30-40 minute piece more, with less emphasis on his bio. Would have loved to hear his short-intermediate term outlook (unless I missed it or it was edited out at the end?).

    Co-incidently, the first interview link on my blog was his interview on the King World News Web site.
    http://market-vipasyana.blogspot.com/2010/08/felix-zulauf-interview-on-tbp.html

  8. DeDude says:

    Great idea – great first step. We need blogs to take more away from corporate media. The content quality is just so much better than what CNBC etc. can deliver.

  9. sonni says:

    excellent interview! thank you and look forward to the next.

  10. woolybear1 says:

    Terrific Barry, great new feature. Thanks.

  11. inessence says:

    Thank you Barry and thank you Mr. Zulauf. Terrific insight!

  12. ejulesp says:

    Fascinating interview. Thank you, Barry.

  13. Bootvis says:

    Interesting, thanks!

  14. dman3298 says:

    Very interesting and thought provoking. Thanks for providing such insightful information.

  15. LR European says:

    Great idea, but listening while sitting in front of a computer is not so great – either I am impatient, or easily distracted! – Is there any chance you could format these as downloadable MP3 files which can be listened to at a moment of choice?

  16. panchog says:

    @BR,

    Exciting new feature on your blog! I love it!

    One problem: the interview is encoded on flash, so we can’t listen it with iPhone or iPad. You may want to have it encoded on mp3 or something similar?

  17. cheif yogi says:

    Excellent addition

  18. bmoseley says:

    good interview. i look forward to more.
    but, you did ask too many leading questions.
    peace

  19. icm63 says:

    Please create a section for your audio files, for easy find on your blog.

    Also as Flex talks about cycles this outfit attempts mathematically time all types of cycles (markets, economies, any time series) , http://www.foundationforthestudyofcycles.org/

    ~~~

    BR: Doh! I already have one –Podcasts!

    Fixed

  20. icm63 says:

    Best place for cycles studies is here:

    Barry I have already sent you example of there work…

    http://www.foundationforthestudyofcycles.org/

  21. icm63 says:

    Also Felix is in the same camp as Charles Nenner, Cycles ( in SineWave form) to time the market.

    ~~~

    BR: Zulauf is a superstar; Nenner is no where near his level of acumen

  22. Darmah says:

    Most excellent. Thank you.

  23. TakBak04 says:

    Barry, that was an excellent interview. I watched the whole thing…his history and then Part II about what he thinks will happen with the “Global Economy” in the Future. Thank you for doing this. It’s more of what we need out there in financial news to have an “OverView” of what we are living through from an International Perspective.

    I will give a Hat Tip to the earlier interview from “King World News”….which was postedvipasyana Says:
    August 2nd, 2010 at 12:02 pm where he links to “King World Interview with Zulauf.”

    As I watched all THREE INTERVIEWS…I have to say it was just incredible. Each interview imparting a newer and more revealing party of our “Global Economics.”

    I recommend all three interviews..but, your two are so important. Particularly your Part II followed up by this to view before your interview or after for EVEN MORE PERSPECTIVE. BTW…i forced a partner to watch all THREE and he was most impressed! That’s good coming from an Attention Deficit Span person who just can’t sit still when they aren’t focused on making money. He slowed down and listened and was WOWED!

    ———
    THIS INTERVIEW linked from ” Vipasyana” Blog Site…. IS ALSO WELL WORTH THE WATCH because it pairs so nicely with your link for those of us who have the time and just can’t get ENOUGH of “Out of the Box” Financial News these days!
    ——————–

    @ Barry,

    Great Manager to start, hopefully a regular, new segment.

    I probably would have appreciated a 30-40 minute piece more, with less emphasis on his bio. Would have loved to hear his short-intermediate term outlook (unless I missed it or it was edited out at the end?).

    Co-incidently, the first interview link on my blog was his interview on the King World News Web site.
    http://market-vipasyana.blogspot.com/2010/08/felix-zulauf-interview-on-tbp.html

    I think I’d preface the interview with “Hat Tip” tohttp://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/28_Felix_Zulauf_files/Felix%20Zulauf%205%3A28%3A2010.mp3

  24. winstonw says:

    Brilliant guest to kick the series off with Barry. Felix’s long term rational perspective is comforting, and resonates.

    Another way of expressing the US currency being taken off the gold standard, is to express it as the decoupling of money and credit supply from gdp, or more correctly, gni growth.

    Barry, I’d appreciate your views on floating vs fixed exchange rate systems and how they impact an economy. It is a complex field with highly variable views, but is relevant in explaining excessive credit growth. Some say it is difficult for an economy to prosper with a floating rate, because a trade surplus and foreign capital inflows are offset by counter movements in the exchange rate……and because trade surpluses don’t allow an economy to grow, they have instead become reliant on population and credit growth.

  25. Nic says:

    Terrific interview, I love this stuff, thanks :)

  26. crazygreek says:

    How can investors get information on Zulauf’s new hedge fund in the US?

  27. [...] Barry interviews Felix Zulauf about how he became an investing legend.  Intelligence ensues.  (TBP) [...]

  28. [...] In case you missed it, our interview with Felix Zulauf  is here [...]

  29. Tahoe says:

    Fascinating interview, many thanks for your efforts to conduct this interview and make it available to us. Many points that are in line with my thinking which we always like to hear/see. Maybe it can be best summed up as – buying things we don’t need, with money we don’t have, to impress people we don’t really care about. The Credit-Debt-Value relationship is broken and needs to be resolved. I’m not sure what that will look like but I have personally rid myself of all debt. Period. Let the delevereaging continue.

  30. HemantArora says:

    Is there some way to get a transcript? I personally prefer black n white to hearing such good thoughts. Find it much easier to correlate and retain views expressed by the interviewee. Plus, I’m starting to slowly build a compendium of interviews I like…

    ~~~

    BR: Transcript coming in a week or so . . .

  31. ToNYC says:

    Much gratitude presenting Felix’s views.
    On his belief the god is a store of wealth but not to be a gold standard:
    To the degree the smart monkeys are frustrated in protecting Intellectual Property by legal device , piracy, and counterfeiting, gold benefits as fear (of collective ignorance) ; however when the reverse is also true in this inverse relationship.
    The killer app and stuff we crave in abundance and rewarded and a fertile scientific new paradigm, leaves the gold price/demand limp.
    Moses down from the Mount with the killer app in stone left the golden calf worshipers behind.
    Now he comes down with the iPhone 4.
    Media is the fork we take
    in the road we make
    by walking on it.

  32. cheese says:

    Instant classic.

    Thank You, FELIX!

    And, Thank YOU, Barry!

  33. We will be adding the transcript of this (in the future, within a week of the interview)

    I will set up an iTunes account so people can download the MP3s for mobile listening

  34. readerOfTeaLeaves says:

    Thx for offering to provide this interview in an iTunes format, as it will enable more people to listen (Personally, I find Yves Smith’s audio formats to be outstanding; they work in iPad, iTunes/iPod, and desktop — audio files can be real timesavers.)

    This extended interview concept is a wonderful idea, and in a world where there seems to be so much screeching in the media, as well as ‘hosts’ who never give their guests enough time to fully answer a question in a thoughtful fashion, IMVHO your interview (both I and II) is a true gem.

    Apart from the content, it’s nice to hear any guest given enough time to reflect on his professional development, approach to analysis, and perspective (drawing on a large number of years, and multiple economic cycles). This interview strikes me as a genuine public service, simply for the civility and thoughtful tone. The depth of information is gravy.

    Best of luck with this new addition to your blog.

  35. gloeschi says:

    It’s Friday 13th, so here’s how things are going to pan out over the next 13 years:

    Greece is a tragedy. On May 7th they were already priced for a 30% haircut, and the banks prohibited it. So instead of dealing with EUR 210bn in debt (300bn *.7) they will be looking at 450bn in 2 years time. Good advice, Mr. Stiglitz. Once the current government is being overthrown by a (possibly communist-leaning) movement I doubt the new powers in place will recognize current debt obligations.

    Europe will delay any useful policy responses due to fighting between the austerity and Keynesian camps, hence nothing will get done. Week countries will finally leave the Euro, which means default (if you default anyway, you might as well leave the Euro, since the punishment will be same, hence Euro-exit a freebie). Then, ironically, the remaining Euro members (Germany, Netherlands, may be France) will make the Euro a very strong currency (which in turn will hit those countries’ export businesses).

    The US, uninhibited from infighting of the Europeans, will happily print money and debase the currency. But as long as you own the reserve currency you make others share the burden. Then the IMF comes in with it’s idea of abolishing all 3 major currencies in favor of their SDRs, and the printing will start in earnest (since Switzerland will have established FX controls there will be no decent currency left to switch into).

    Finally the public loses trust in fiat currencies and a mad gold rush follows, hyperinflation, war. The only way the public will accept a new currency is by backing it by minuscule amounts of gold. Felix is wrong in stating there was not enough gold to do that – at $100,000/oz, there is.

    Crazy, right?

    I like push back on my ideas – feel free to use comments here or at www LighthouseInvestmentManagement dot com.

  36. [...] Earlier this month, I interviewed famed investor Felix Zulauf on his professional background and investment outlook (Audio here) [...]