Steven Miran 1.1 20 ideas

Addressing a tech company cutting half its staff, Miran says, "This is how productivity gains and technology work... they allow you to produce more with fewer cuts." He dismisses this as a labor crisis and frames it as "technological progress." This validates the "AI Efficiency" bull case. If companies can maintain or grow revenue while slashing headcount by 50% via AI, operating margins will expand significantly. The primary beneficiaries are the hyperscalers providing the infrastructure (Microsoft, Google, Meta) and the firms successfully executing these cuts. Long Big Tech / Hyperscalers as the drivers of this deflationary productivity boom. Regulatory backlash against mass AI-induced layoffs or a collapse in consumer demand due to rising unemployment.

Miran highlights a "potential shortcoming" in market analysis: "Financial conditions aren't showing you what's going on in private credit... we decide not to look at the part of financial markets that are tight." He references "credit jitters." Investors currently believe liquidity is abundant (loose conditions). Miran suggests a hidden divergence: Private Credit (PC) is actually "tight" (stressed/illiquid). If PC is the engine of recent credit growth and it is seizing up, Business Development Companies (BDCs) and private lenders may face rising non-accruals or liquidity crunches that public equity markets haven't priced in yet. Avoid or Watch major BDCs (proxies for private credit health) for signs of credit deterioration that isn't showing up in high-yield bond spreads. If the "soft landing" is perfect, private borrowers may refinance into public markets, alleviating the stress on private lenders.

Miran states, "My forecast for inflation calls for continuing interest rate cuts... I prefer to still move at 25 clips." He explicitly rejects the idea of pausing due to the recent oil shock, noting, "It's difficult to get excited about a policy implication [from oil]... pass through into core inflation... is quite limited." The market fears the Fed might pause cuts due to Middle East energy inflation. Miran argues the Fed will look through this "headline shock" because the macro backdrop (restrictive policy) is different from 2022. If the Fed continues cutting 25bps despite oil rising, yields at the long end (which price in growth/inflation) might wobble, but the policy-sensitive rates will drop, supporting bond prices. Long Duration Treasuries as the Fed commits to the cutting cycle regardless of supply-side noise. A sustained, massive spike in oil that unanchors long-term inflation expectations (which Miran admits would change his mind).

"I don't think tariffs is driving goods inflation. Because imported prices are not inflating faster than we expect to see." The market has priced in a risk premium for retailers and importers due to fears of tariff-induced margin compression. Miran argues this data is not materializing. If goods inflation remains low and tariffs are a non-issue, consumer discretionary stocks are undervalued relative to the actual cost pressures they face. LONG Retail/Consumer Discretionary to fade the "tariff fear" narrative. New, more aggressive tariff policies or a drop in consumer spending power.

"My forecast for inflation calls for continuing interest rate cuts... I prefer to still move it 25 clips." The speaker explicitly dismisses the "Iran War" supply shock as a reason to pause cuts. He believes the Fed should look through supply-side volatility. If the Fed continues to cut rates by 25bps despite geopolitical noise, yields on Treasuries will fall, driving bond prices higher. LONG duration to capture the price appreciation from the continued cutting cycle. A massive spike in oil prices that forces inflation expectations to unanchor, causing the Fed to pivot to a hold or hike.

"Expecting a faster convergence down of new rents... If I end up being worried about housing wrong... we will undershoot our target." Miran's dovishness is predicated on shelter inflation cooling. If the Fed cuts rates based on this "rent convergence" thesis, mortgage rates will stabilize or decline. Lower financing costs combined with the structural housing shortage creates a "Goldilocks" scenario for large homebuilders. LONG Homebuilders as the primary beneficiaries of the "rate cuts + soft landing" thesis. Re-acceleration of shelter inflation or a recession that crushes buyer demand.