Video summary

Stocks Are "As Expensive As I've Ever Seen Them" | Ted Oakley

Main summary

Key takeaways

Finance

Finance-focused summary (markets/investing)

Valuations, market timing, and macro outlook (2025–2027)

  • Ted Oakley argues equities are “as expensive as I’ve ever seen them” and points to extreme valuation conditions:

    • CAPE (Shiller cyclically adjusted P/E): ~40
    • Current earnings: ~24.5
    • He characterizes this as the “eighth or ninth inning”—late-cycle, not early-cycle.

  • Base case: markets may continue to perform well near term, but risk increases later.

    • Late 2025: expects a strong end to 2025 with another big double-digit positive return, noting it would be the third consecutive year of that.
    • 2026:
      • Momentum could continue into Q1
      • A more meaningful high around mid/late 2026
      • Then a setback/correction in Q2 or Q3 (timing not precise)

  • He does not necessarily predict a classic short, blow-off mania. Instead, he expects a late-cycle peak followed by decline.

  • Ultimately, he expects a “true bear market” to occur (not since 2008), potentially driven by:

    • Complacency and “everyone on one side”
    • Demographic selling pressure as baby boomers age (he mentions average baby boomer age ~72 by 2027)
    • A potential shift in passive capital flows (if they turn negative, sustained selling could follow)

“Passive flows” risk framing (structural)

  • A key risk he highlights is passive capital flows (citing research associated with Michael Green) as a dominant bid while flows remain positive.
  • If passive flows turn negative, he warns of “sustained selling pressure”—a prolonged downside phase rather than a brief dip.

Precious metals / crypto (Fed expectations)

Immediate tape / catalysts mentioned

On the day of recording:

  • Silver broke above $60/oz (framed as a breakout)
  • Gold and silver miners were also strong
  • Bitcoin was up about ~4%
  • He also notes silver was up about ~4% that day

Narrative catalyst:

  • Markets may be positioning for a more dovish Fed at the next FOMC announcement (referencing Jerome Powell).

Oakley’s stance on silver

  • Oxbow owns silver, silver miners, and some royalty companies tied to silver.
  • Rationale:
    • Real/inflation-adjusted silver still isn’t viewed as as high as prior peaks
    • Country hoarding is supportive
    • He frames the move as a multi-year cycle (typically 4–5 year moves, not “a whole generation”)
  • He says some chasing has started, but institutions haven’t fully piled in yet.
    • If miners do extremely well, Wall Street may chase later (higher volumes), but he doesn’t think that stage is fully reached.

Portfolio action in metals

  • They took some profit:
    • Sold some miners about a month ago (not a large reduction)
  • Reasoning:
    • Commodity cycles can end; moves have been large (~100%+ this year, and cited ~150–200% gains in some cases)
    • They trim commodity exposure when it gets extreme to manage cycle risk

Discretionary caution: He explicitly warns that momentum can “chase at the top” once volumes spike.

Portfolio construction / allocation framework (Oxbow)

Oxbow’s stated model: “30/30/30” plus dry powder

He describes their framework as:

  • 30% in short-term treasuries
    • Explicit duration: < 30 months
  • 30% in commodities / commodity-based exposures
  • 30% in stocks (value or growth)
  • ≥10% held as trading dry powder for opportunistic buys

Caution on long-duration bonds

  • He argues long-term bonds (20–30 years) are a poor bet right now:
    • He references the 10-year / “tenure” yield around ~4.15–4.20%
    • Logic: long duration requires long-term inflation control, and he doubts that will hold
  • He expects short-term declines may happen, but believes long-term yields might not fall enough to justify the long-bond risk.

Fed/interest rates and yields

  • He expects the Fed is likely to cut at the upcoming meeting, saying he “just assumes” cuts based on commentary he’s seeing.
  • He also argues the Fed could be politically constrained (a “rubber stamp” concern after a Powell replacement).
  • Even if the Fed cuts, he cautions that long-term rates may not collapse, pointing to stubborn long yields and the risk of buying long duration at current levels:
    • Example framing: buying a 30-year bond at ~4.75% “for the rest of my life” is a bad move (duration + fiscal/inflation risk).

Sector view: energy (oil & gas) and dividend focus

Macro/sector thesis

  • Oxbow bought a lot of energy during the year, and most energy holdings are up year-to-date.
  • He believes energy is the best buy over the next 2–3 years, driven by:
    • High dividend yields and emphasis on cash flow
    • Dividends cited around ~6%–10% (example: ProBrazil up to ~12%)

Key energy holdings/examples mentioned

  • Petrobras (called “Pro Brazil”)

    • Described as the biggest oil company in Brazil
    • Mentioned as having ~12% dividend
    • Mentions a drilling-related threshold around $55–$56 oil

  • Other named companies:

    • Apache (APA)
    • Matador
    • National Energy, NESR (described as a small Mid-East service company with a big contract)

  • Midstream exposure clarification:

    • They own midstream mainly via LP/K-1 structures
    • Average yield around ~7.5%
    • Named: Enterprise Products (also referenced as a long-held winner)

Oil price level caution

  • He does not claim to know the exact bottom, but suggests:
    • Oil could get weaker
    • He wouldn’t expect much below ~$50–$55
  • He implies they would add if oil weakens to improve cash flow and valuation entry.

Demand/supply tailwind

  • Referenced influence: Rick Rule
    • Oil demand rises long-term (or at least doesn’t disappear)
    • But capex/exploration has been reduced, implying potential shortages even if demand is flat
  • He says you don’t need full belief in the shortage thesis for the position to work, but it provides additional tailwinds.

Companies / tickers mentioned (explicit)

Tickers / publicly traded names mentioned

  • Bitcoin (no ticker provided)
  • Apache (APA)
  • Matador (Matador Resources; ticker not provided)
  • Enterprise Products (ticker not provided)
  • NESR / National Energy (ticker not provided)
  • Petrobras (“Pro Brazil”; ticker not provided)
  • Domino’s (ticker not provided)
  • Gildan (ticker not provided)
  • Marcato Libre (likely MercadoLibre; ticker not provided)
  • Autodesk (ticker not provided)
  • Bristol Myers (ticker not provided)
  • Val / Vale (ticker not provided)
  • Rio Tinto (ticker not provided)
  • CBR / fertilizer LP (described as ~12% cash flow; ticker likely CB, but not fully reliable)

Sectors/instruments mentioned

  • Broad equities / stock market
  • Short-term Treasuries (duration: < 30 months)
  • Precious metals: silver, gold; silver miners
  • Royalty companies linked to silver
  • Commodities / commodity-based exposures
  • Energy: oil & gas, natural gas, midstream LP/K-1
  • “High-income portfolios” including gold/silver/silver miners

Performance metrics / numbers explicitly cited

  • CAPE ~40
  • Current earnings ~24.5
  • Silver breakout: > $60/oz
  • Short-term rate range mentioned: ~4.15–4.20% (context: tenure/long yields)
  • Expected double-digit positive return for end of 2025 (and third year in a row)
  • Metals/miners returns referenced (approximate):
    • ~100% move for a miner “this year”
    • ~150–200% in some cases

Explicit recommendations / cautions

  • Treat the current market as late-cycle (“eighth or ninth inning”).
  • Don’t assume equities are “safe” just because they’ve been strong; high valuations + complacency increase downside odds.
  • Risk control / scaling:
    • He criticizes “all-or-nothing” investing
    • Prefers scaling in/out (buy more on weakness, trim on big winners)
  • Bond allocation:
    • Discourages 20–30 year bond purchases
  • Commodity cycles:
    • Trim winners after large run-ups because commodity cycles “come and go”
  • For retirees:
    • Warns that investors aged 75–80 with 85–90% of liquid assets in stocks may be overexposed (implying lower risk exposure is prudent)

Disclosures / disclaimers

  • No clear “not financial advice” disclaimer is captured in the provided excerpt.
  • The host mentions professional-adviser recommendations, but no formal regulatory disclaimer appears in the text provided.

Presenters / sources mentioned

  • Adam Tagert — host, founder of Thoughtful Money
  • Ted Oakley — Managing Partner & Founder, Oxbow Advisors
  • Michael Green — referenced for research on passive capital flows
  • Jerome “Jay” Powell (Pal) — referenced regarding FOMC communications
  • Scott Bessent — referenced (Treasury Secretary)
  • Rick Rule — referenced for oil demand/capex thesis
  • Ryan — briefly mentioned during webinar housekeeping (name appears in subtitles but isn’t otherwise identified)

Original video