The Great Rotation Out Of Stocks Begins As Markets Enter ‘Fourth Turning’ | David Hay

Top-line thesis

David Hay (founder, Haymaker Publications; former co‑CIO at Evergreen) argues we are in a structural “great rotation” out of US equities — driven by fading US market exceptionalism, falling foreign inflows, stretched domestic valuation/AI enthusiasm, and rising interest in international markets and hard assets (gold, silver, energy). He frames this as part of a broader “fourth turning” macro cycle and recommends selective international and hard‑asset exposure while taking profits and raising cash to buy on weakness.

Tickers / assets / sectors / instruments mentioned

• Equities / ETFs:
  • FXI (iShares China Large‑Cap), KWEB (likely referenced as “KB” — Chinese internet ETF), EWZ (Brazil ETF)
  • GDX (senior gold miners ETF), GDXJ (junior gold miners ETF)
  • General references: S&P, NASDAQ, MSCI/world indexes
• Stocks / companies:
  • BYD, Alibaba, First Majestic (silver miner), Amazon (AMZN), Walmart, Eli Lilly (LLY), Caterpillar (CAT), Deere (DE)
• Fixed income / rates:
  • US Treasuries (long and short), T‑bills, corporate bonds
• Commodities / hard assets:
  • Gold bullion, silver, gold & silver miners, energy
• Other:
  • DXY (US dollar index), target‑date funds (large systematic equity inflows), emerging‑market debt

Note: some tickers/names in the transcript are garbled (e.g., “KB” likely KWEB); verify before trading.

Methodology / frameworks Hay uses

• Macro + technical overlay
  • Identify long multi‑year bases and breakouts; prefer markets that break out of long bases.
  • Favor assets that already broke out but then corrected — wait for pullbacks to enter.
• Portfolio discipline
  • Methodical profit‑taking on parabolic moves (typical trim ≈ 20–30% on winners).
  • Raise cash when exposures are extended; be ready to buy on weakness.
• Security selection
  • Use ETFs for broad foreign exposure (FXI, KWEB, EWZ) or select individual names for extra alpha.
  • Prefer mid‑caps > large caps, and be selective in small caps.
  • For cyclical/mining exposure: buy into corrections; be selective across miners.
• Risk signals / contrarian indicators
  • Fund‑manager cash levels (Bank of America FMS): very low cash historically aligns with market tops; very high cash with bottoms.
  • Net foreign buying of US equities: extreme foreign buying has historically coincided with market peaks.
• Income / fixed income ideas
  • Include income strategies and selective emerging‑market debt for yield, but warn of structural fragility in long US Treasuries.

Key numbers, multiples, timelines, and performance metrics called out

• Haymaker performance claims (self‑reported)
  • Past ~1–1.5 years: implied annualized ~45% average return
  • 2025 snapshot: some trading alerts claimed annualized closer to ~100% (Haymaker’s stated results)
• ETFs / market moves
  • FXI average P/E cited ≈ 14 (described as undemanding)
  • FXI noted as up ≈ 90% in 2025 (per slide)
  • GDX / GDXJ: claimed >100% gains in prior year; GDX cited as up ≈ 228% since early 2025 (speaker noted numbers may be slightly outdated)
  • EWZ (Brazil) highlighted as a favorite
• Dollar / FX
  • US dollar: cited ≈ 12% decline in first half of 2025
• Commodities / anecdotes
  • Silver and miners described as having parabolic moves followed by sharp corrections (specific quoted prices appear garbled in transcript)
• Cash / flows
  • Target‑date funds: estimated USD 300–400 billion per year flowing into equities
  • Bank of America fund‑manager cash: cash at record lows (since series began ≈1999)
  • Berkshire Hathaway: cash levels at record highs (industry contrast)
• Macro/timing polls
  • Prediction market (Cash) showed ≈ 17% chance IMF declares global recession before 2027
  • Hay: global recession unlikely; US recession risk higher but not expected within next 6 months absent a severe equity crash

Explicit recommendations, tactical statements and cautions

• Recommendations / tactical views
  • Rotate into international equities (China, Brazil, other emerging markets) and hard assets (gold, silver, energy) — be selective.
  • BYD described as “intriguing” (not a formal Haymaker recommendation).
  • Use ETFs for practical foreign exposure (FXI, KWEB, EWZ, broad ex‑US ETFs).
  • Consider emerging‑market debt and income strategies for yield.
  • Gold miners: attractive opportunities — buy on weakness and be selective.
• Risk management / cautions
  • Trim profits after parabolic moves (recommendation: trim ~20–30% on many winners).
  • Don’t blindly chase parabolic markets (cautioned specifically about Japan and South Korea parabolic moves).
  • Beware seemingly expensive US “value” names (Walmart, Eli Lilly, Caterpillar, Deere cited as high multiples).
  • Monitor fund‑manager cash levels as a contrary sell signal when at historical lows.
  • Long US Treasuries face structural risks from fiscal dominance and future issuance; central banks are increasing gold allocations.
  • Government / Fed intervention risk exists in severe market dislocations (e.g., flash crashes).

Timing view

• Short term
  • Hay does not expect a US recession in the next ~6 months unless a severe market crash occurs.
  • Political stimulus actions could bolster markets before midterms.
• Medium / long term
  • Favors a multi‑year rotation out of US equities into international markets and hard assets.

Notable macro / thematic points

• Structural forces
  • Multipolarity replacing unchallenged US dominance.
  • Massive AI capex in 2025 — compared to historical mega‑projects as a share of GDP — with rising skepticism about returns.
  • Domestic target‑date inflows plus prior foreign buying created a “double” momentum effect; reversal of foreign buying matters materially.
• Gold vs Treasuries
  • Some central banks prefer gold over Treasuries; gold is increasingly viewed as a reserve alternative.
  • Treasuries useful for short‑term safety (T‑bills yield ~3–3.5% cited) but long Treasuries face supply/issuance pressures in future recessions.

Disclosures / promotional notes in the interview

• Haymaker sells paid content, trading alerts, a Substack newsletter and webinars and stated they provided many of the discussed trade recommendations.
• Episode sponsor mentioned (Kowi) and a promo code (“lin”) for signups were provided.
• No formal “not financial advice” statement is recorded in the transcript; viewers are expected to perform their own due diligence.

Limitations / transcript caveats

• Several company names and tickers appear garbled in the automated transcript (e.g., “KB” likely KWEB; “Evergreen Gavac/Gavcow” likely Evergreen GaveKal).
• Some quoted prices and data (e.g., a silver price noted as “120”) appear inconsistent with market reality.
• Treat exact tickers, prices and some percentage claims with caution and verify before acting.

Presenters / sources referenced

• Guest: David Hay — founder, Haymaker Publications; former co‑CIO (Evergreen)
• Host: (implied by promo code) likely David Lin
• Other referenced people: Robin Brooks, Mike Green, Louis (likely Louis Gave), Luke Gromen, Mike Oliver, Adrian Day, Christopher Waller, the author of the “Catrini” research
• Companies/ETFs referenced: BYD, Alibaba, Amazon, Walmart, Eli Lilly, Caterpillar, Deere, First Majestic; FXI, KWEB (likely), EWZ, GDX, GDXJ; asset classes: US Treasuries, corporate bonds, emerging‑market debt, gold, silver

Follow‑up options (available)

• Extract a concrete Haymaker trade list and dates from the slides and format a concise watchlist.
• Cross‑check garbled tickers/names and the price/multiple claims and supply corrected tickers with up‑to‑date market data.