Nvidia’s Death Cross Argues for Tactical Asset Allocation Today
While the Death Cross sounds melodramatic, this technical indicator — when the 50-day moving average crosses below the 200-day moving average – historically precedes every major decline. While not every Death Cross leads to a major decline, it would be foolish to ignore this signal. Since March 19th, the Death Cross was breached by Nvidia […]
The S&P 500, NASDAQ 100, and Magnificent 7 stocks peaked in the first quarter of 2025
Simultaneously, foreign and emerging market stocks have turned up as did gold and value stocks reflecting a leadership rotation out of overvalued and over owned mega caps and into long dormant geographies and sectors. Through March 28, the table below shows the negative performance in the S&P 500, Dow Jones Industrial Index and NASDAQ as […]
Playing it Safe with Gold, Global and High Yield Values
7.5% Yield Portfolio Allocation. The US stock market is historically overvalued and should generate low single digit returns for the next decade. The enormous success of US technology has led to a bubble in the Magnificent 7 stocks and an irrationally exuberant market sentiment. We believe the best future returns will not be generated by […]
Did DeepSeek Burst the Bubbles in Nvidia and Stock Market?
By several measures this letter will show how the US stock market is in a bubble and prone to a collapse. We believe that this past week’s announcement by DeepSeek of a low-cost large language model could be the proverbial straw that breaks the back of this parabolic mega cap market leading to a pronounced […]
Major Signals Point to Market Top
Investment Risk Mitigation is Prudent Now. Several valuation and behavioral indicators are signaling that a generational stock market top is forming. While periods of overvaluation can persist, we advise reducing equity exposure in the Magnificent Seven, and capitalization weighted indices like the S&P 500 (SPY) and the NASDAQ 100 (QQQ). Furthermore, we advise reviewing your […]
The Two Trillion Dollar Question and the S&P 500’s Cautionary Risk Premium
The consequence of the re-election of Donald Trump is enormous. After the spike in inflation of over 20%, over the last four years, high hopes abound for the new administration’s initiatives to reduce inflation. With radical reform promised with the so called Department of Government Efficiency “DOGE” led by Elon Musk and Vivek Ramaswamy, markets […]
Post Election Volatility and Great Rotation
Whatever the outcome of the November 5th Presidential election is, market volatility will likely increase while the anticipated policies of the next administration are debated. After the Presidential Inauguration on January 20th, 2025, the process of implementing those policies will begin and the markets will continue to gyrate as polarized electorates comes to terms with […]
The Great Generational Leadership Rotation
Market cycles repeat themselves and we believe this current stock market cycle parallels the 2000 technology bubble because today’s market is led by technology stocks, enjoys a positive financial feedback loop, and is experiencing a mass euphoria. Furthermore, today’s market bubble benefited from four decades of declining interest rates, which lifted equity valuations, drove decades […]
The Mega Cap and AI Bubble and the Generational Rotation
Our July 9th letter cautioned that the parabolic rise in Nvidia shares is reminiscent of the “irrational exuberance” that historically accompanies generational peaks like 1929, 1966, and 2000. Since then, Nvidia (NVDA) and the NASDAQ 100 index (QQQ) have declined 16.9% and 9.3% respectively. While that call was well-timed and appears to be part of […]
The Final Stages of a Mega Cap Blowoff And Serious Equity Market Risks
The current rise in NVIDIA Corporation (NVDA) shares, mega cap stocks, and capitalization weighted indices, has all the markings of a generational stock market peak like 1929, 1974, and 2000. Like past historic bubbles, the current market is manifesting a parabolic ascent, historically high valuations, and an “irrational exuberance” based this time on the extraordinary […]