How to Prepare For 'The End Of The World' | Neil Howe

Neil Howe (0:00)

Everyone thinks bonds are safe. No, bonds are not safe. That's great until inflation is 10%, right? This time, it's different with regard to AI, right? Because we got something so amazing that our economy is going to be able to absorb these extreme high valuations, and it always ends the same way. It always ends in the market goes down.

David Lin (0:19)

Do you see this leading to a generational shift?

Neil Howe (0:22)

I think the shift is already happening.

David Lin (0:24)

It's Thursday, October 15th, and tax stocks are continuing to fall. Micron, for example, is now down 22% from its highs since the start of October. Investors are fleeing tech for defensive assets, including bonds, pulling the 10-year treasury yield down about 2% just today. It's now at 5.091%, down a lot from the 24-year highs recently reached. In the Middle East, two Singapore flight container ships were recently hit near Hormuz this week and one sank.

Wholesale prices in the US came in today, jumped 6.3% over the past year, the biggest gain since 2022 This is a day after consumer inflation hit 3.7%, which was also higher than forecasts. Are we reaching the climax of what our next guest has dubbed The Fourth Turning? This is an era where a whole generation sees higher inflation, financial repression and the rise of dictatorships. How do we prepare for this?

Neil Howe joins us now. He's a portfolio manager at Hedgeye Asset Management, where he co-manages the Hedgeye Fourth Turning ETF. And he's the director of Hedgeye's demography sector. With the late William Strauss, he coined the term millennial and wrote The Fourth Turning. His new book, How to Prepare for the End of the World as We Know It, it's due next year. And I'm very pleased to welcome back Neil to the show. Welcome back, Neil. Good to see you.

Neil Howe (1:48)

Hey, David. Great, great to be on.

David Lin (1:50)

Your book, How to Prepare for the End of the World as We Know It, is also due to come out next year.

Are we seeing the climax? Maybe just jot our memory. What is the Fourth Turning and where are we right now in this Fourth Turning? And what evidence are you seeing from the current events that are happening around the world that can support your Fourth Turning thesis?

Neil Howe (2:12)

Wow, that's a big question. The Fourth Turning, David, just refers to a broad historical trend that we've seen in America, we see in a lot of other republics and democracies in the modern world, of large civic upheavals usually involving conflict, either internal or between countries, about the length of a long human life, about every 80 or 90 years or so.

And we've been on this broadcast before, we've talked about that. You know, the late 17th century in the colonies, the American Revolution, the American Civil War, the Great Depression, World War II, and now here we are again. And this is the timing of these cycles, this long cycle, is driven by generational change. Generations that are born after a great crisis, you know, raged in relative stability, community, indulged as elder leaders tend to take the nation into and through the next crisis. That has been a long term pattern, and not just in America, but you can see it in countries around the world. I mean, look at the rise of sort of autocrats, strongmen and ethnocentric populism around the world. I mean, not just in this country, but even more so almost everywhere you look, right? That is becoming a global trend. You know, the Great Depression, World War II, were global events. So, we see this as a global trend. And I might mention, because it interests a lot of people, that roughly halfway in between these great civica peoples, we have the Great Awakenings, right? The Great Cultural Revolutions. And in American history, we used to call those awakenings and religious awakenings.

And it's taken a more secular trend in sort of the last century. But many, many people alive today can remember the late 60s and 1970s, the so-called Consciousness Revolution, a period when the boomer generation sort of reinvented the culture. And this is also typical of this cycle. And in a number of books, just to be you asked me what the Fourth Turning was, David. So here, here I may in a number of books that Bill Strauss and I laid this out. We wrote a book called The Fourth Turning. I did a book recently back in 2023 called The Fourth Turning is Here, really talking about how since the since the GFC and the Great Recession, we are in this generation of crisis, what we call the Fourth Turning, the final season of this cycle. And it usually climaxes near the end of the, you know, the near the end of the period, which I reckon is going to be this next decade. And that really is kind of a segue to the next book, all right, that I'm coming out with. And many readers ask me, you know, Neil, I agree with everything you say in the book. What should, what can I do to prepare? So that's what this book is about.