Veteran Investors Justus Parmar and Joey Magazine on America-First Investing and Policy Risk

Justus Parmar, founder and CEO of Fortuna Investments, and Joey Magazine, a senior partner at the firm and a Miami Beach city commissioner, say policy now sits next to valuation as a core input for investors.

Their main takeaway is that defense, rare earths and nuclear energy should hold up under either party, while a Democratic win in Congress could re-rate solar and batteries.

I sat down with Parmar and Magazine on stage at Future Proof in California for a Full Signal conversation about investing alongside policy.

They run an America-first venture capital firm, and both argue that investors who ignore Washington leave real risk unpriced.

Magazine, who helps oversee a municipal budget of roughly $1 billion, said "none of these things happen isolated in a vacuum." In his view, policy drives where wealth and capital flow, from city halls to Washington.

Parmar said the midterm elections could shift capital flows if Democrats win the House or Senate. He added that a federal election is two years away, so investors should hedge for a change in power now.

Magazine put it plainly. "Macro drives everything," he said, and a great company can still face a steep climb if it ends up on the wrong side of a policy story.

Both guests said defense spending is bipartisan, whether it fortifies the country at home or supports allies abroad. Magazine said rare earths and nuclear power have also moved beyond partisan politics because energy has become a bottleneck.

Parmar said Fortuna's thesis began after COVID with a simple observation that "we actually don't make anything anymore." He said the firm moved into uranium, rare earths, and aerospace and defense, and noted that 90% of rare earths come from China and that only one rare earth mine is producing in the US.

If Democrats gain power, Magazine said solar, batteries and other alternative energy could come back into vogue. Parmar said clean energy and battery technology could get a re-rating and that Democrats tend to spend more on home building.

Asked how he chooses between America-first investments and the most advanced technology, Parmar said "I don't think they have to be mutually exclusive." He argued that many of the best companies and institutions of the past century were built in the US.

He said Fortuna leans toward American-made companies, but not simply because of where a company is based. Magazine said the world is best off "when America is leading."

Asked about the administration taking stakes in private companies, Magazine said there is "some hypocrisy" for free-market capitalists in accepting it. He still called the race for technology an "all hands on deck" effort.

He said government can help most by speeding up permitting. "Sometimes I think the best thing for government to do is get out of the way," Magazine said.

Parmar countered that "there actually has been a long history of the government taking positions and stakes in companies." In his view, the harder question is who decides which companies to back.

Magazine said Miami Beach is cutting its tax rate for a second straight year and that a statewide ballot amendment would eliminate homesteaded property taxes. He argued that capital is mobile and follows those policies.

Parmar said Miami will not be bigger than New York from a corporate perspective. "Absolutely not," he said, though he expects the city to be better than it is today.

Magazine, a New York native, said "it's not a zero-sum game."

His goal is for a young finance professional to find the same opportunity in South Florida that exists on Wall Street or in Silicon Valley.

Tune in to the full conversation with Parmar and Magazine on YouTube, Spotify and Apple Podcasts.

For more on the sectors in play, read Industrials aren't the new technology sector. They could be something better., and subscribe to the free Opening Bell Daily newsletter for a daily briefing on stocks, macro and Wall Street.

This article is informational only and is not investment advice. Views expressed are those of the guests, whose firm, Fortuna Investments, has invested in companies in sectors discussed, including uranium, rare earths and aerospace.