Finance & Economy

Kiril Sokoloff, investment strategist, recommends caution in a delicate economy

July 19, 2023

Kiril Sokoloff, investment strategist, recommends caution in a delicate economy

Kirik Sokoloff

Founder & Ceo of 13D Research & Strategy

Get a hot take on the economy from Kiril Sokoloff, founder and CEO of 13D Research & Strategy, a prominent institutional global research firm.

At the Walker & Dunlop Summer Conference, I had the pleasure of sitting down to chat with Kiril Sokoloff for about an hour to discuss everything from AI to the future of oil. Kiril is the founder and CEO of 13D Research & Strategy, one of the most prominent institutional global research firms.

The delicate state of the economy

The first thing that Kiril noted in our interview is that the economy is in an incredibly delicate state right now. Although the economy saw a peak in early 2022, it’s important to remember that it usually takes between eight and nine quarters for GDP to peak, following an economic peak. While the stock market seems to be performing well this year, there are only a select few companies that are driving most of the stock market gains. Additionally, there have been bank collapses, the likes of which we’ve never seen until this year. So, Kiril thinks it’s safe to say we’re not out of the woods yet.

Be wary of artificial intelligence

Although AI has become a bit of a buzzword lately, and countless media outlets have been jumping at the opportunity to cover this revolutionary technology, 13D Research is one of the few firms researching AI for years. 13D started covering ChatGPT several years ago when the technology was just in its infancy. Many believe that AI will lead to a sort of new renaissance in the business community.

However, Kiril believes quite the opposite. He brought up that the population at large had the same thought about the internet when it was first gaining a foothold. While the internet certainly changed a lot in the business landscape, there were just a handful of companies that were able to leverage it to become massive. He believes that AI will have this same effect. The capabilities of nearly every company will expand, but only a select few will leverage the technology to become the largest companies in the world.

Climate change, oil, and alternative energy

13D Research & Strategy’s Clean Energy Index Fund focuses on companies involved in clean energy technologies such as solar, wind, and grid improvements. Kiril emphasized the importance of battery storage to ensure a reliable energy supply from renewable sources. He also highlighted his belief that extreme weather events such as floods and heatwaves will ultimately force the world to address climate change in a meaningful way.

As geopolitical tensions rise, Kiril emphasized the importance of oil security for countries. The growing awareness of that need will likely mean that oil demand will continue to grow, leading to higher oil prices. Energy self-sufficiency and security will be driving factors behind nuclear and clean energy transitions.

The move to de-dollarization

Although the US is the largest debtor in the history of finance, there have been some cracks in the global financial foundation that is the dollar recently. Due to the confiscation of Russian foreign exchange reserves, there are countless countries across the world that have realized their reserves can be seized if they decide to make a move of which the US does not approve.

While this may seem farfetched to many, there are plenty of countries that hold a significant amount of US treasuries on their balance sheets. So naturally, some of these countries are beginning to de-risk and offload some of these treasuries. Singapore is even going as far as buying 46 tons of gold to bolster its reserves.

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