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ALO38: Why the Old Rules of Diversification Are Changing ft. Mike Pyle
Description
Alan Dunne is joined by Mike Pyle, Deputy Head of BlackRock’s Portfolio Management Group, to explore how a supply-driven world is reshaping markets and portfolio construction. They discuss the transition from the demand-constrained 2010s to an era defined by scarcity, fiscal activism, geopolitical shocks and the immense capital demands of AI. Pyle explains why bonds may no longer provide the diversification they once did, why hedge funds and market-neutral strategies are becoming increasingly important, and how portable alpha can separate beta from return generation. They also examine AI productivity, equity valuations and what should replace the traditional 60/40 portfolio.
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Episode TimeStamps:
00:00 Mike Pyle’s journey from policymaking to investing
04:30 The shift from a demand-driven to a supply-driven world
07:29 Why the stock-bond relationship has changed
12:09 The return of fiscal activism
15:52 AI, scarcity and the growing demands on capital
19:57 When will AI productivity begin to transform the economy?
22:53 AI, inflation and the future of interest rates
25:23 AI valuations, earnings and whether markets are in a bubble
29:48 Building portfolios for the new macro regime
33:35 Private markets, income and hedge