In short: RPK: ~7,620, "a little over 2% off the all-time high," the Hedgeye signal "bullish for now," but "breadth has deteriorated under the covers" (30–35% of names above the 50-day). Both flag light positioning and cash on the sidelines as the potential positive catalyst if headlines get "less bad."
0:55So it is September 18th and it is episode 26, I believe, if my count is correct. The S&P is around 7620, 7625, wherever I last checked it. Just a little over 2% off the all-time high. Does it feel like that? — I don't know. Not really. I don't know. We'll see what Sam says. But breadth has deteriorated under the covers.
In short: "I am not bullish today, but I am looking for the moment probably within the next week to turn bullish and then I'm going to be bullish as all get out": the S&P is in the late-Sep/early-Oct seasonal bottom before presidential-cycle year 3 (only 1931 and 1939 failed) and a bullish year-7 decennial start; the NYSE A-D line is at highs, which historically caps the next 3 months' worst drawdown near 10%.
McClellan is a chart and cycle reader. He averages the stock market over every four-year presidential term and finds the same shape: two flat-ish years, then a strong third year. We are about to enter year 3, and that year has been positive every time for nearly a century except 1939, when World War II began. A ten-year version of the same exercise points the same way for 2027.
The rally usually starts from a low in late September or early October, about a month before the midterm elections, because investors stop worrying once they think they know the result. He is not buying yet: he wants signs of a final washout (a spike in fear gauges, a higher low in his breadth oscillator) within about a week. Breadth — how many stocks are rising versus falling — is already strong, and history says that caps the likely damage in the next three months at about 10%.
10:56So, I am not bullish today, but I am looking for the moment probably within the next week to turn bullish and then I'm going to be bullish as all get out. — Okay. Bullish as all get out. Okay, I like that. So, let's see where to go from here. Let me just ask you this question because it might strike people the way it kind of strikes me when you say years that end in seven tend to be pretty bullish. I think that's what you said.
In short: "This is a bear market… at least a two-year period during which stocks post negative real returns." Rising cost of capital, a commodity shock, flat markets, AI cracks, midterm risk and worst-season seasonality all line up; it's "early 2000, early 2001." He'd hold cash. He admits that "if it goes right… just by having SPY in your portfolio you'll be fine."
SPY is the US stock market. Deluard thinks it has entered a bear market: at least two years in which stocks lose money after inflation. His list is long. Borrowing costs are rising, oil products are in a price shock, the market has stalled for three months, and the AI story is cracking. On top of that come midterm elections likely to produce two years of gridlock, plus the seasonally weak autumn.
With cash soon paying around 5%, he sees little reason to stay fully invested; it feels like 2000–2001 to him. A final washout could come around 2028. His one caveat: if AI truly delivers a productivity boom, simply owning SPY will be fine, but he can't make that case.
27:48Everything that could go wrong is going wrong, right? Your cost of capital is going higher. You face a massive commodity shock. The stock market has gone nowhere for 3 months. You see cracks emerging in the AI narrative. You see a massive policy risk with the midterms. You see tariffs and completely insane policy proposals.
In short: Shiller CAPE "42 point something"; "any time that it has been 35 or higher, every single time, the forward 10-year return in real terms has been negative," most commonly about −5% a year — with 2% inflation that means negative nominal returns for a decade, "no exceptions." Valuations still rising while Treasury yields are ~75bp higher than six months ago.
The Shiller CAPE compares prices with ten years of inflation-adjusted earnings. It is above 42. Every time it has been 35 or higher, the next ten years delivered losses after inflation, typically about 5% a year. Meanwhile bonds now pay much more than they did six months ago, so stocks are getting more expensive relative to the safe alternative. He owns US stocks only through the equal-weight fund.
1:23In fact, the Shiller CAPE ratio for the S&P 500 is at 42 point something. And any time that it has been 35 or higher, every single time, the forward 10-year return in real terms, so inflation adjusted, has been negative. And the most common one has been about -5 real per annum. So if inflation is going to be 2%, if Kevin Warsh is going to guide us to two and stay there, that would mean you should expect negative returns on a nominal basis for the next 10 years and there are no exceptions to it.
In short: The concentration he avoids: one sector at ~40% is the level where, over "the past sort of seven mania cycles," it "reached its apogee in terms of market concentration and then it was kind of lights out" — hence equal weight instead.
The standard S&P 500 is weighted by company size, so it is now roughly 40% one sector. Across about seven past mania cycles, that level of concentration marked the top before prices fell hard. He avoids it by owning the equal-weight version instead.
17:52kind of pooped out and reached its apogee in terms of market concentration and then it was kind of lights out. So, we have these AI companies. It's clear that some of them don't like the other ones and want maybe even government help to slow them down, slow their competitors down anyway.
In short: Long out-of-the-money puts on "spot" (probably SPX/SPY — transcript garble) expiring before the midterms, a tactical trade: stocks must fall ~10% before Trump tacos on oil; a Chinese-AI ban around the Xi summit would bring "a much bigger sell-off."
SPY tracks the S&P 500, the broad US stock market. Woo holds cheap "out-of-the-money" puts on the index. They pay off only if stocks drop meaningfully before the midterms. (He said "spot," which almost certainly means the S&P index.)
His reasoning is a loop: Trump won't back down on the Iran war, and oil won't stop rising, until stocks fall about 10%. Central banks keep raising rates while stocks stay high. In his view nothing relieves the pressure until the market falls, so he is positioned for that.
20:41— I am, stocks in particular. I am short. I'm long put spreads on QQQ and then I'm long out of the money puts on spot. I mean both of them basically expire before midterm elections because I do think that between now and the midterm is when I think things are going to get most interesting again.
In short: Long in dollars, falling in gold: "S&P up in dollar terms but down in gold terms." The S&P total return is "down about 10 or 15% in gold terms over the last eight years even though it's up I want to say almost 200% in dollar terms" — "like trying to short Argentine stock markets in peso terms. You would never do it." The balance of the allocation sits in blended large-cap equities. Dale agrees on direction and goes further: an equity bubble into end-2027 / mid-2028.
SPY tracks the S&P 500. Gromen holds large-cap stocks as the balance of his allocation, but with an unusual scorecard: he measures them in gold, not dollars. In dollars the S&P has nearly tripled since late 2018; priced in ounces of gold it is down 10–15%.
He calls this the "Argentinization" of the US stock market. In a country whose currency keeps losing value, stock prices keep rising in that currency simply because the money is worth less — so betting against stocks in pesos is foolish, even if they lose ground against gold. His rule: don't be short US stocks in dollars, but expect gold to beat them. Dale is more bullish still, expecting an outright equity bubble into late 2027 or mid-2028.
1:33:52we've phrased it as do S&P up in dollar terms but down in gold terms. So you look back you can go back to fourth quarter 18 or first quarter 19 when Powell pivoted because of those bond market issues. That was one of the very early signs that there was a problem. the S&P total return is actually down about 10 or 15% in gold terms over the last eight years even though it's up I want to say almost 200% in dollar terms.
In short: S&P 500 products like SPY/VOO/IVV are "a liquidity collection mechanism like a fire hose" aimed at a crowd — the information is in how the individual stocks react. Still: "for the average investor you should continue to invest passively."
SPY (and its twins VOO and IVV) simply buy the 500 largest US companies in proportion to their size. Green compares them to a fire hose: they gather money and spray it at the whole crowd of stocks, and the interesting information is in how each individual stock reacts to that flow.
Despite warning that passive investing distorts markets and could be "levered on the way down," his practical advice for the average investor is to keep investing passively — the risk is market-wide and you can't diversify away from it, and he can't say next year will be bad.
19:12Was that index and ETF complex referenced a single security? So the product and the underlying were the exact same thing. When you think about something like the S&P 500 and a product like SPY or VO or IBV from BlackRock, what's actually happening is that's a liquidity collection mechanism like a fire hose that is then directing liquidity at a crowd.
In short: Shiller CAPE 42; at that level 10-year forward real returns have never been positive — "negative 5% to 9% per year" — "anything but a ringing endorsement for heavy capitalization weighted equity portfolios. In fact, I recommend none of that." Tech is 38% of the index (above 1999); "about as many bargains… as there are in a hotel minibar."
The Shiller CAPE compares stock prices with ten years of average earnings to smooth out booms and busts. It's at 42 — near the 1999 bubble peak and far above 1929. Historically, whenever investors bought at that level, the next ten years delivered losses after inflation of roughly 5–9% a year. Add that one sector (tech) is 38% of the index, and Gundlach says he recommends no heavy exposure to the standard, size-weighted index — bargains are as rare as in a hotel minibar.
23:50But we're more commonly now in the last 15 years, 20 years, living at more normally higher PEs than we used to in the past. But this is anything but a ringing endorsement for heavy capitalization weighted equity portfolios. In fact, I recommend none of that. Interestingly, the stock market's very very concentrated.
In short: "You just don't want to buy the stock market": the Buffett model (market cap vs GDP) is at its highest year-end since 1928, stock market cap (~$82T) is 2.1× total US debt, and the index sits ~40% over its 200-week average. The one thing oil hasn't broken yet — and the trigger for his deflation call; "very worried about touching the stock market."
The S&P 500 is the index of the 500 largest US companies; SPY is the fund that tracks it. McGlone doesn't doubt stocks win over very long periods — the index keeps dropping failures and adding winners, and it tracks human ingenuity. His problem is the price today.
By the "Buffett indicator" (the stock market's total value compared with the size of the economy) it is the most expensive at a year-end since 1928, and the market's ~$82 trillion value is 2.1 times all US debt. It is also ~40% above its own four-year (200-week) average, a level he treats as a danger zone. Midterm-election years 2018 and 2022 were both down, and he sees the stock market as the domino that finally turns today's oil-driven inflation into falling prices — so "you just don't want to buy the stock market" here.
24:14The problem is now you just don't want to buy the stock market. Okay, I'll end with one key fact. Okay, we all know the Warren Buffett model, but what I've really started using this year is, well before total debt, US got the 40 trillion, is a stock market cap around 82 trillion versus total debt.
In short: Expected a range-bound Wall Street this year (rising yields compress P/Es while strong economies lift earnings); tech earnings pushed it higher, but his 6–12-month best guess is "a continuation of this range-bound market" — the administration wants to hold it up, yet "we're late cycle" and risks are mounting.
24:46— Okay. Well, 6 to 12 months is a tricky prediction because there's a lot of moving parts. My view for this year, which, I'm not going to say it's been 100% accurate so far, is I thought Wall Street would be largely range-bound this year because I thought the bond markets would suffer.
In short: Named as the thing a rational rich person will not do, in his risk-of-ruin argument: "let's say you played the Powerball and you won the jackpot and you had 300 million… Would you take $300 million and put it all in SPY?… over time you would probably end up with billions of dollars, but nobody does that. What they do is they take it and put it in T-bills." No view on the fund itself — the point is that the same allocation reads as prudent or reckless depending on the size of the balance sheet behind it.
SPY is the oldest and most-traded fund that simply holds the 500 largest US companies. Here it is not being rated — it is standing in for "all-in on the stock market" inside an argument about who can afford that.
The test he poses: you win $300 million on the Powerball. Would you put it all in SPY? Mathematically that is the highest-expected-value answer — "over time you would probably end up with billions of dollars." And yet, he says, "nobody does that. What they do is they take it and put it in T-bills and they get 4.5% a year and they live off 13.5 million a year."
The term for what the winner is avoiding is risk of ruin — the chance of a loss so large that you cannot recover from it, however good the odds looked in advance. His claim is that attention to it tracks wealth rather than sophistication: "wealthy people think about the risk of ruin and middle class people don't." The person with $400,000 in a 401(k) is trying to double and double again; the person with $300 million is trying not to go backwards.
The practical takeaway is not about SPY at all. It is that the same holding is prudent or reckless depending on whether you would still be fine after it halved — and that most people never actually ask themselves the question.
20:17Wealthy people are very careful with their wealth and middle class people are very careless with their wealth, right? So, let me give you an example. Let's say you played the Powerball and you won the jackpot and you had 300 million, right? Would you take $300 million and put it all in SPY? Would you just put it all in the S&P 500? Now if you did that, over time you would be a billionaire.
In short: The denominator of the note's central chart, and one of only two ways its imbalance can resolve. The FactSet/Jefferies exhibit relayed by ZeroHedge plots the GSCI Commodity Index against the S&P 500 from 1970 to 2026; on it, "commodities remain exceedingly undervalued compared to the S&P 500" — the ratio has sat near ~0.7 for six years, below the 1999 Tech Bubble trough and roughly a tenth of the ~10 Gulf War peak, against interim highs of ~7.6 (1970s oil embargo) and ~8.3 (2008). Hay converts that into the note's only unconditional statement, and it is put as an arithmetic identity rather than a forecast: "based on the below, it's highly probable that either stocks need to fall precipitously or commodities need to continue their ascent, or some combination of both." No timing, level or target is given, and he explicitly leaves open that the resolution comes from the commodity side — the directional lean comes from the standing house view restated the day before (Sep-02: US index funds "fully invested… highly concentrated in AI-related shares," vulnerable when record tech inflows reverse). Rowed Negative on that basis: the S&P is the asset the note is positioned away from, in favour of "considerable hard-asset exposure."
SPY is the fund that owns the S&P 500 — America's 500 biggest listed companies, held in proportion to their size. In this note it is not really being analysed as a business; it is being used as a measuring stick. The question Hay is asking is not "is the stock market expensive in dollars" but "how much stuff — oil, copper, wheat, metals — does one unit of the stock market buy?"
The chart he shows answers that, and the answer is startling. It divides a broad commodity index by the S&P 500 and runs the result back to 1970. Over those 56 years the ratio has swung between roughly 1 and roughly 10. It hit about 10 during the 1990 Gulf War, about 8 in the 2008 oil spike, about 7½ during the 1970s oil embargo. It bottomed near 1½ at the peak of the dot-com bubble in 1999 — the moment everyone points to as the most extreme case of paper assets being loved and real assets being ignored.
Today it sits near 0.7. Lower than the dot-com bottom. The lowest in the whole series. In other words, relative to the stock market, physical commodities have never been cheaper in the entire period the data covers.
From that Hay draws a conclusion that is closer to arithmetic than to prediction: a ratio this far outside its historical range does not simply stay there forever. Either the numerator rises or the denominator falls. As he puts it, "either stocks need to fall precipitously or commodities need to continue their ascent, or some combination of both." Notice that he does not claim to know which. That is unusually restrained, and it is worth respecting rather than reading past.
Why this is rowed as a negative view on the index anyway: the choice of which side resolves is answered elsewhere in his work, and the day before this note he argued that the US index is being propped up by record inflows into technology funds — roughly $216 billion this year, about three times any prior year — while still losing to foreign markets. An asset that cannot outperform even while receiving the biggest inflow on record is being carried by the flow, and flows reverse. Combine the two notes and the position is clear: own less of the index, own more of the physical world.
The practical point for a reader is about relative exposure, not about calling a crash. Nothing here says the S&P falls next month. It says that if you own only the index, you are on the expensive side of the widest gap in half a century, and the cheap side is available.
In short: The object of the note's conclusion — the US index vehicle Hay expects to keep losing to overseas markets and to absorb the damage when flows reverse. The bull case is conceded first and in full: "the S&P 500 is up roughly 12 ½% this year on a total return basis," the advance is "broader than in the past," and "the equally weighted S&P index is actually slightly ahead" — which removes the narrow-breadth objection rather than relying on it. The bear case is then built from relative performance and flows, not valuation. Per Gerard Minack, "the U.S. market itself has been lagging overseas indexes since the start of 2025," and that is called out as anomalous given the support it received — "considering the mammoth inflows into U.S. equities due to the AI boom/mania, and the related proliferation of trillion-dollar-plus market caps in the S&P, this is surprising," with Michael Hartnett's BofA chart putting 2026 tech-fund inflows on pace for a record ~$216bn. The conclusion is a flow asymmetry: "already underperforming U.S. shares will trail overseas markets to an even greater extent should — we'd argue, when — these epic inflows shift into outflows. This has the very real potential to place significant downward pressure on the fully invested U.S. index funds which are also highly concentrated in AI-related shares." SPY is also the table's own benchmark line, at +12.6% YTD. No price target or timing is given — the claim is directional and relative to international equities.
SPY is the fund that simply owns the S&P 500 — buy it and you own America's 500 largest listed companies in proportion to their size. Because the biggest companies are now the AI-related technology giants, a very large share of the fund is concentrated in a handful of names, whether the buyer intended that or not.
Hay begins by giving the fund its due, and this matters because it is the opposite of what a bearish note usually does. The S&P is up about 12½% this year including dividends. More importantly, the gain has not come only from the giants: the "equally weighted" version of the index — which holds the same 500 companies but in equal amounts, so a small company counts as much as a huge one — is actually doing slightly better. That kills the standard complaint that the market is being propped up by a few stocks. On the surface, this is a healthy, broad advance.
Then he lays out two things that don't fit. The first: professional investors who are famous for beating the market have all fallen behind it this year — the growth specialist, the value specialists, the great compounder, the activist. When every style fails at once, the explanation isn't that one style was out of favour; it's that the index has something none of them could hold enough of. That something is the enormous, concentrated position in AI-related megacaps.
The second doesn't fit at all, and Hay says so openly. Since the start of 2025, the US market has actually been losing to markets outside the US. He calls this surprising, because it should not have happened: money has been pouring into US equities on the back of the AI boom, and specifically into technology funds, which this year are on pace to take in roughly $216 billion — around three times any prior year on record. A market receiving the largest inflow ever recorded should be leading, not trailing.
His conclusion follows from that gap. If the US is already underperforming while being flooded with money, then the money is the only thing holding the line — and money flows reverse. He is deliberate about how confident he is: US shares will lag international markets by even more "should — we'd argue, when — these epic inflows shift into outflows." He changes "if" to "when" mid-sentence, and that is the forecast.
The part worth understanding is why he singles out index funds for the damage. An active manager holding cash can meet withdrawals without selling. An index fund cannot — it is always fully invested by design, so when investors pull money out, it must sell shares in exact proportion to what it owns. And what it owns most of is the AI complex that everyone else also owns most of. So the vehicle that absorbed the record inflow becomes a forced seller of the most crowded stocks in the market, which is the mechanism that turns an ordinary outflow into an outsized decline.
The other side of the trade is the one he actually wants readers to act on: Americans hold very little outside the US, the shift toward international stocks has already quietly started, and Haymaker keeps a list of overseas names it likes. He does not name any of them in this note.
In short: Forward P/E has fallen from ~22× to ~19× as earnings outran price — "that's not so bad" — but sticky inflation means little multiple upside. Valuation is a sentiment gauge, not a timing tool: "zero correlation" with the next year's return.
SPY tracks the S&P 500 — shorthand for "the US stock market." On valuation, the good news is that earnings have been growing faster than prices, so the forward price-to-earnings ratio (what you pay per dollar of next year's expected profit) has fallen from about 22× earlier in the year to about 19×. "That's not so bad." The catch: with inflation not coming down, you shouldn't expect investors to pay a higher multiple from here.
Her bigger message is a warning about how to use that number at all. She checks every valuation gauge there is — Shiller's cyclically adjusted P/E, Tobin's Q, the Fed model, the Buffett indicator, the rule of 20 — and finds essentially zero correlation between the forward P/E and how the index does over the following year. Cheap markets keep falling; expensive markets keep rising. Valuation tells you about sentiment and about very long-run (10-year) returns, not about timing.
35:55this is the number. It really depends on what the plug is for the denominator, but based on the data that we look at, you were at about a 22 multiple earlier in the year and you're at about a 19 multiple right now. That's not so bad. Now, rising inflation or inflation that is not coming down, maybe that's a better way to state it.
In short: Referenced as the valuation comparator, not rated. "EYLD sits on a forward PE of 9x, while SPY is 20x and QQQ is 22.5x" — the broad US market is the expensive side of the spread Ferg expects to widen in his favour ("my view is that the above performance gap will continue to widen for years to come"). No direct call on the index is made, but the Kedrosky material earlier in the post is the implied read on what a high starting multiple does to forward odds.
In short: Dot-com-level valuations: "if you took a million dollars and put it in the SPY ETF, you're projected to earn 0% over 10 years, which implies a huge drawdown." An index 40–50% AI and AI-adjacent — "that concentration risk always ends badly. Always." He expects a 40–50% drawdown before the Fed responds.
SPY is the fund that tracks the S&P 500 — effectively "the US stock market." Dowd says it is priced at dot-com-era levels, and he translates that into a number anyone can act on: put a million dollars in today and the projected return over the next ten years is about zero, dividends included.
A 0% decade doesn't arrive as a flat line. It implies a large drop somewhere along the way — he expects 40–50%, on par with the dot-com bust and the 2008 crisis. The reason it could be that severe is concentration: 40–50% of the index is now AI or AI-adjacent, so one theme cracking takes the whole index with it. "That concentration risk always ends badly. Always."
10:07The housing market slowly rolling over. So it's all conspiring to be a very nasty recession and stock valuations are at the highest and we're at dot com level valuations. If you look forward on 10-year projected returns versus bonds, if you took a million dollars and put it in the SPY ETF, you're projected to earn 0% over 10 years, which implies a huge drawdown.
In short: Long in dollars, short in gold — stated as a rule twice. "Shorting American stocks in dollar terms is not a good idea. Shorting them in gold has been a great idea": S&P total return is down almost 30% against gold since Powell began hiking in early 2022 and 50% against gold since 2000, and he expects gold to keep outperforming equities "over the next two to five years." Under his own one-month fix the nominal side goes vertical — "Dow probably goes from 50,000 to 100,000."
SPY tracks the S&P 500. Gromen's rule is blunt and he repeats it twice: do not short American stocks in dollars, do short them in gold.
The reason is that inflation flatters share prices. He compares it to shorting Argentine stocks in pesos — a company's shares rise with the currency's decline, so betting against them in that currency is a losing game even when the country is falling apart. Measured in gold instead, the S&P's total return is down almost 30% since the Fed began raising rates in early 2022, and down about 50% since the year 2000. He expects gold to keep beating equities for another two to five years, especially given what he calls "La La Land valuations" in anything AI-related.
The nominal upside is real, though, and large. Under his own one-month fix for the debt, the stock market "goes nuts" — "Dow probably goes from 50,000 to 100,000" — with hiring and corporate earnings booming alongside 10–15% inflation. That is the whole point of the trade: you make money in dollars and lose purchasing power at the same time, which is why he insists on scoring the position in gold.
40:02I would rather own gold. I'd rather own US equities in dollar terms. Shorting Argentina stocks in Argentine peso terms is a stupid thing. It's been a stupid thing for a long time. Shorting American stocks in dollar terms is not a good idea.
In short: The comparator, and the note's real target — negative-leaning but no trade attached. Its 50% total return since March 2024 is acknowledged as genuine and earnings-driven: the forward P/E "has actually decreased slightly to 20 times the consensus projection for the next 12 months," from 21× in March 2024 — "this speaks to how strong profits have been for the blue chip index." The objection is to where those profits come from: "in addition to robust organic growth, this is a function of companies such as GOOG reporting massive gains on their holdings in AI entities like Anthropic," a booster mid-caps do not have and which Hay calls "unsustainable." Three structural criticisms follow — concentration ("the top 10 S&P constituents represent 38%"), a margin problem ("a looming mean reversion in the S&P 500's profit margins… on a normalized profit-margin basis, the S&P 500 is far more overpriced than it superficially appears"), and the index-inclusion drag from buying graduates like SMCI at their peak market cap, which "multiplied by dozens, if not hundreds, of these events… can add up to a material performance drag over time." Add the market-wide risk flag: "an unusually large number of threats hovering over the market. Margin debt having gone vertical is merely one of them, though among the most serious." Long-run verdict: "Mid-Caps/IJH have clobbered the S&P 500 for the full duration of the 21st century," and over the next decade mid-caps will "dramatically outperform the world's most beloved equity index." Rowed Neutral because the argument is relative — no short, no sell instruction, and the index's earnings strength is conceded.
The S&P 500 is the index most people mean when they say "the market" — the 500 largest US companies, weighted so the biggest count most. It is the thing Hay is arguing against here, though he is careful not to call it a short.
He concedes the good news first: the index really did return 50% since March 2024, and it did it on profits rather than on hype — its price relative to expected earnings actually fell slightly, from 21 times to 20 times. Normally that would be the end of the argument.
His objection is to the composition of those profits. A meaningful chunk comes from big technology companies revaluing their stakes in private AI firms — Alphabet's holding in Anthropic accounted for more than half of Alphabet's profits in the first half of the year. Those are accounting gains on investments, not operating income, and Hay calls the effect "unsustainable." Strip them out and normalise profit margins back toward historical levels, and the index's earnings are lower than they appear, which makes the price higher than it appears: "on a normalized profit-margin basis, the S&P 500 is far more overpriced than it superficially appears."
Two other criticisms sit alongside it. The index is extremely concentrated — its ten largest members are 38% of the whole thing. And it has a mechanical bad habit: it admits companies after their share price has already exploded, which means index funds buy them near their peak. Super Micro Computer, added right at the top, is down about 70% since; Tesla was a bigger and more disputed instance of the same thing.
Finally the market-wide risk flag: "an unusually large number of threats," the most serious being margin debt — borrowed money used to buy shares — going "vertical." That is a leverage problem, and leverage is what converts a fall in prices into forced selling.
Rowed Neutral rather than Negative because there is no instruction attached. Hay is not telling anyone to sell the index or bet against it; he is saying that over the next decade, medium-sized companies should beat it — and he is "adamant" about that.
In short: "My target for the year is 8,000, but I think it's going to be tricky" — and "I don't suspect that we can get up above 7,900 right away." Bullish intermediate-term (momentum sloped up, weekly RSI only now nearing overbought), but expects "backing and filling" from late August into September/October; the Oct→Nov pullback is "probably going to be one of the better buying opportunities we've seen throughout the entire 4-year cycle."
Newton thinks the US stock market ends 2026 higher — his target is 8,000 on the S&P against roughly 7,800 when he spoke — but he is unusually specific that the ride there is bumpy and the next eight weeks are a bad time to buy. "I don't suspect that we can get up above 7,900 right away."
His reason is a split between two clocks. On a weekly chart the market is only just becoming "overbought" (a momentum gauge called RSI, which measures how far and fast a price has run relative to its own recent history — high readings mean a rest is due). On a daily chart it is already stretched. So the bigger trend is intact while the short-term one needs a pause. Add three specific pressures he expects — oil back to $100, the 10-year Treasury yield creeping toward 5%, and technology bumping into its old highs — and you get "backing and filling" rather than a melt-up.
The actionable part is the calendar. Third quarters of midterm-election years are historically choppy, and he expects a pullback from October into November that is "probably going to be one of the better buying opportunities we've seen throughout the entire 4-year cycle." In other words: bullish, patient, with cash reserved for autumn.
5:40And so, it's a tricky time usually in the third quarter, specifically of a midterm election year. I don't suspect that we can get up above 7,900 right away. My target for the year is 8,000, but I think it's going to be tricky. And that specifically has to do with three main factors.
In short: Positive in dollars, negative in gold — the debasement trade resuming. On the next yen intervention: "I think you could get equities take off in dollar terms… you could see equities rip, gold really rip." But "you'll actually see equities continue to decline in gold terms, which has resumed over the last 10 days — equities are still down almost 25% since the Fed started hiking rates in early 2022." Under a true 1940 wartime footing they'd crash and "then basically go to the moon… it would certainly crash and flatline in gold terms."
SPY tracks the S&P 500. Gromen expects US stocks to go up in dollars and down in gold — and he thinks both halves matter. When the authorities are forced to intervene again to hold the yen, the liquidity they inject has to land somewhere: "you could see equities rip, gold really rip."
But rising in dollars isn't the same as getting richer. Measure the index in gold instead and US equities are still down roughly 25% since the Fed began raising rates in early 2022, and he expects that decline to keep going. In other words the stock market is functioning as an inflation hedge rather than a growth story — you keep pace with the currency's decline, not ahead of it.
He makes the point most vividly with the wartime scenario. If the US genuinely went to a 1940-style footing, the stock market would crash and "then basically go to the moon, because it's one of the only inflation hedges" — and it would "flatline in gold terms" the whole way. The nominal chart would look like a boom; the real one wouldn't move.
25:34And so I think you'll actually see equities continue to decline in gold terms which has resumed over the last 10 days at least from look equities are still down almost 25% since since one Q since the Feds started hiking rates in early 2022. So, I think we get back to that debasement trade, and it's what they need.
In short: Deliberately two-timeframe. Short run: "extremely complacent" — debt-financed, cash-negative big tech is a huge share of the index and "they can't have anything go wrong" while their borrowing rate keeps rising. Structurally: rational in dollar terms (the Venezuela framing; S&P/TLT is exponential) though −40% since Jan-2000 in gold terms. Conclusion: "very bearish short-term, but… long-term it's going to be a screaming buy on the dip" — "that's exactly it."
SPY tracks the S&P 500. Gromen's answer is deliberately two-handed, and the split is about time frame. Right now he thinks the market is "extremely complacent": the huge AI/big-tech block at the top of the index is increasingly funded with borrowed money while burning cash, so it needs to keep borrowing into rising interest rates — a combination in which nothing is allowed to go wrong.
Step back, though, and he thinks stocks are behaving rationally — not because business is great, but because the currency is being debased. His extreme example: for several years the world's best-performing stock index was Venezuela's, while its currency was destroyed. Measure the S&P in gold instead of dollars and the "bull market" vanishes: including dividends it is down about 40% since the January-2000 peak, 8% since late 2018 and 21% since the Fed started hiking in 2022.
He also thinks the government can't tolerate a real bear market: a sustained 20% fall wipes out capital-gains and stock-compensation tax receipts, blows out the deficit and risks a debt spiral — so the stock market props up the bond market and vice versa, which is why policymakers are in "zugzwang," the chess position where you must move and every move worsens your position. The practical conclusion: very bearish near term, but the break is the setup — "long-term it's going to be a screaming buy on the dip." Hence the survival rule: be unlevered so you're still there to buy it.
27:14In the very short run, I think they're extremely complacent. Because ultimately big tech AI, et cetera, has become very debt financed, very cash negative debt financed. And when you have a segment that is valued extremely highly in terms of equity valuations, that is a very large portion of the equity indices in the biggest equity market in the world in the United States, they can't have anything go wrong.
In short: The second sell — an index, not a company. Watsa "started selling it in the third quarter of 2025 and completely exited in the first quarter of 2026." The argument: "The S&P 500 used to be a wide investment in the whole American economy… but not anymore. Today it's more of a narrow bet on AI. A few big tech names decide where it goes," with those names "spending billions on AI." The valuation check is the Buffett Indicator at 219% — total market value to GDP, where "above 100% suggests stocks may be overpriced relative to the actual economy." Note: the post says only "an S&P 500 index fund"; the specific fund is not named.
Prem Watsa — who runs the Canadian insurer Fairfax — sold his entire holding in an S&P 500 index fund, starting in late 2025 and finishing in early 2026. The argument is about what the index has quietly turned into. Buying the S&P 500 used to mean owning a slice of the whole American economy across hundreds of unrelated industries. Today a handful of enormous technology companies dominate it, and those companies are all spending vast sums on the same thing, so the index has become a concentrated bet on artificial intelligence dressed up as diversification.
The price check offered is the Buffett Indicator: the total value of the American stock market divided by the size of the American economy. Anything above 100% suggests share prices have run ahead of the economy that ultimately produces the profits. It currently reads 219%.
In short: US equities are in "complete and total La La Land." His "adjusted Warren Buffett metric" (total equity market cap minus federal debt, over GDP) is now higher than 1Q-2000 and 4Q-2021 — the highest in 65 years — with yields breaking out and a terrible risk-reward; he'd rather be patient and wait for "real pain."
SPY is the most widely held S&P 500 ETF — owning it means owning a slice of the 500 biggest US companies, so it's a stand-in for "the US stock market." Gromen thinks the market is dangerously expensive — "complete and total La La Land."
His yardstick is a twist on the "Warren Buffett metric," which compares the total value of all US stocks to the size of the economy (GDP); a high reading means stocks are pricey relative to what the country actually produces. Gromen adjusts it by subtracting the federal government's debt first — his logic being that the Fed will eventually monetize (print to cover) that debt, so you should strip it out to see the true valuation of stocks. On that adjusted measure, the market is more expensive than at the 2000 dot-com peak and the late-2021 top — the highest in 65 years. Both prior peaks were terrible times to buy. Combine that with bond yields breaking out and a war driving inflation, and he calls it "a terrible risk-reward" — he'd rather sit patiently in cash and wait for a washout.
50:32Fast forward to today, the adjusted Warren Buffet metric is now higher than it was in 1Q2000. It's higher than it was in 4Q21. It's the only time in 65 years. It's it's higher than it's been in 65 years. And the only time it's been close is 1Q 2000 and 4Q21, both of which time were terrible times to own stocks, you know.
In short: "Bubble 4.0" — ~50% tech and dangerously narrow breadth (only ~5% of S&P stocks at new highs; VIX rising into the highs); a vicious-unwind risk.
SPY is the fund that tracks the S&P 500 — the broad US market. Hay calls today's market "bubble 4.0": about half of it is now tech (and "stealth tech"), making it dangerously concentrated. "Breadth" — how many stocks are actually participating — is terrible: only about 5% of S&P companies were hitting new highs even as the index did. A market carried by a handful of names is fragile.
He also notes the VIX (the market's "fear gauge") was rising even as stocks rose, an odd warning sign, plus a coming flood of mega-IPO stock supply. When such narrow, crowded markets crack, he warns, the unwind is "vicious."
4:02You know, we've been warning particularly in the last couple of weeks that the US stock market was looking a little precarious, at least on a near-term basis with very poor breadth. Uh the VIX was actually going up while the stock market was going up, which was very unusual. Uh on the breadth topic, you had only about 5% of the S&P stocks making new highs as the S&P itself was making new highs.
In short: US large-caps at historic-high valuations (CAPE/Shiller, Buffett indicator) — a $1M lump sum today is "likely guaranteed a 0% return including dividends for 10 years." "I wouldn't own this with your money."
SPY tracks the S&P 500 — basically "the US stock market." Dowd says by every long-term yardstick (the CAPE/Shiller ratio and the Buffett indicator, which compare prices to earnings and to the size of the economy) stocks are at historic-high valuations.
His blunt math: put $1 million in today and you're "likely guaranteed about 0% return including dividends for 10 years" — with a big drop along the way. In other words, you're paying so much that there's little reward left. "I wouldn't own this with your money."
7:39That's a fool's er but I would look the valuations every everybody you see you've seen this everywhere all over the uh the Twitter sphere and in financial newsletters the cape ratio the Schiller ratio the Berkshire Hather measurement. It's a historical high valuations. And so if you were to like get an inheritance and put your $1 million inheritance in the stock market today, you're likely guaranteed a 0% return including dividends for 10 years, which incl which implies a a tremendous draw down between now and then.
In short: Structural reference, not a stance: relaying Mike Green's point that January's annual rebalancing mechanically produces smallcap "Broadening Out" because "each year SPY gets bigger," so trimming it (or the Mag7) in a rebalance has an ever-larger relative impact on smallcaps as the Mag7 numbers become enormous.
SPY is the giant fund that tracks the S&P 500, so it's basically shorthand for "the US large-cap market." Paulo isn't giving a view on it — he's explaining a plumbing point (via Mike Green): every year, money keeps flowing into passive funds like SPY, so it gets bigger and bigger. When the market does its January rebalancing, trimming a little from the huge winners (the Mag7) and spreading it around mechanically pushes some money into smaller stocks — which looks like "Broadening Out." His warning is that this is a mechanical, flow-driven effect, not proof the small-cap rally is real or durable.
In short: "It's a time to buy your protection now" — everyone is all in (lowest FMS cash ever) while the index goes sideways. He's "kind of negative on US stocks" because they're overowned, and fixing the dollar/trade imbalance means a lower stock market.
SPY tracks the S&P 500 — the broad US stock market. Muir's core message is "buy your straw hats in the winter": buy protection (options that pay off in a sell-off) while everyone is euphoric and that insurance is cheap, not after trouble arrives. Every sentiment gauge says investors are all-in — big money managers are holding the least cash ever recorded — yet the index itself has gone sideways for three months. When belief is that uniform and price won't confirm it, a lot of people are positioned wrong.
He's also negative on US stocks for a structural reason: foreigners own an enormous amount of them, and he believes the overvalued dollar must fall to fix America's trade imbalances. A falling dollar means that foreign money — which has been chasing US stocks at a record pace — starts going home, and that selling lands on the US market. This isn't a crash prediction; it's an argument that right now is the cheap moment to own hedges.
7:41So, I'm just looking at this setup and then you combine that with the fact that gold and silver are doing these crazy things and to me you put it all together and it's a time to buy your protection now. Doesn't mean I think that we're going to go straight down from here. It just means that this is an opportunity to buy some hedges.
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