“we have a situation where the equity risk premium is almost completely the reverse...”
S&P priced for perfection with inverted equity risk premium points to a lost decade of returns
“I suspect that we'll be shocked at how quickly this cycle rolls over … how much this ends up being a little bit of a mirage in terms of the demand for these…”
Semis are the ultimate cyclical and this AI cycle rolls over faster than Wall Street assumes
“we could have a situation where some of that is just normalized … the rest of the world catches up a little, the US goes sideways for a little while”
US equities' ~$30T premium over the rest of the world mean-reverts; ex-US catches up as the US grinds sideways.
“I call it the token mirage … there's going to be a huge wake-up call when all of a sudden we realize that we mistook how much demand there was for this.”
The 3-month AI rally rests on a token mirage of forced internal usage that will reverse and trigger a crash
“now all of a sudden the small, the little mom and pops are going to be able to compete with the Amazons.”
AI lifts small private mom-and-pops over big public incumbents, making Amazon worth less
“what you see in this situation when the Fed gets hawkish is that the long end often gets bid and especially versus the short end.”
Long bonds get bid as a hawkish Fed protects the dollar, flattening the curve
“It has never been more important than you have an SPR. So just like the surprise, um, during the last few months has been that oil didn't go to $200…”
Oil bottoms here as governments worldwide refill drained reserves, defying glut bears
“I really like the stocks … I'm buying a cheap asset that I think is going to be bid much better.”
Energy stocks are dirt cheap, pay dividends, and rally when AI semis correct
“I love the Canadian ones, especially because they're— the life of their reserves with these oil sands is just astronomical. And so the Canadian ones especially.”
Canadian oil sands producers win on astronomically long reserve life
“the People's Bank of China is all that matters. They're gonna continue to diversify into gold.”
Gold stays bid for years as People's Bank of China keeps diversifying reserves
“by the way, the miners are just like the energy stocks. They're dirt cheap. And if anything, I, if I, if I probably had to pick what to own…”
Gold miners are dirt cheap and beat the metal itself from here
“If you look at the start of these lost decades, the CAPE ratio, the cyclically adjusted PE ratio, were at high levels. It's just not random.”
CAPE near 41 marks a lost-decade setup; defensive low-vol stocks should outrun the froth-heavy index.
“I personally think we, we might likely be within days of a reversal … that's about, in my opinion…”
Silver near a bottom after giving back half its rhino-horn run, days from a reversal, hold the position