Robin Brooks 2.9 11 ideas

Brooks explicitly names "The Brazils, the Mexicos, the Indonesia, the South Koreas" as markets he expects to "do especially well." He argues that the "institutional quality" premium that separated G10 from Emerging Markets is eroding due to the politicization of Western central banks. Combined with a falling US Dollar, capital will rotate into these specific EMs. Long Emerging Markets with a focus on Latin America (commodities) and Asian manufacturing hubs. A resurgence in the US Dollar or aggressive tariffs from the US administration targeting these specific nations.

Brooks notes a "huge rise in precious metals... gold, silver, platinum" driven by a "broader global push into safe havens." He attributes this not to central bank buying (which he views as passive), but to retail and institutional flight from "institutional debasement" (e.g., Fed/ECB monetizing debt). As trust in fiat institutions declines, hard assets reprice higher. Long Precious Metals basket. A sudden restoration of confidence in central bank independence or a sharp rise in real interest rates.

Brooks states clearly: "I am expecting the dollar to fall. So abroad is better than domestic." The erosion of US institutional exceptionalism (Fed independence under attack) removes the premium investors are willing to pay for the Dollar. Short the US Dollar Index (UUP tracks the DXY). A global liquidity crisis usually triggers a flight to the Dollar (the "smile theory"), regardless of US domestic policy.

In the context of safe havens, Brooks explicitly mentions "Switzerland... those things will outperform." As investors seek alternatives to the US Dollar and Euro due to debt monetization fears, traditional "fortress balance sheet" currencies like the Swiss Franc become the primary beneficiaries of FX diversification. Long Swiss Franc (via CurrencyShares Swiss Franc Trust). The Swiss National Bank (SNB) intervening to weaken the Franc to protect their export economy.

Brooks predicts a "reshoring wave" and "home shoring" will lead to an "investment wave in places like the United States" to build capacity. You cannot reshore manufacturing without physically building factories and infrastructure. This creates immediate demand for industrial construction, engineering, and machinery firms (represented by Industrials XLI and infrastructure builders like Quanta Services PWR). Long US Industrials/Infrastructure Construction. High interest rates making capital expenditure projects too expensive to finance, leading to project cancellations.