Video summary

Generational Bear Market Ahead, 35–45% Drop; Gold in ‘Early Innings’ | Ted Oakley & Michelle Makori

Main summary

Key takeaways

Finance

Finance-focused summary (markets, investing, macro, portfolio, key recommendations)

Market outlook: “euphoria” + potential generational bear market

  • Ted Oakley argues the current bull market is in the “euphoria stage”, referencing Templeton’s cycle: pessimism → skepticism → optimism → euphoria.
  • He suggests the S&P 500 could potentially reach around 8,000, framing it as achievable “this year” (while acknowledging the index is already near highs).
  • Timing / catalyst for risk: he implies roughly 15–18 months from the interview window (i.e., the next ~1 to 1.5 years) when conditions may look less favorable.
  • He forecasts a “generational bear market” with an equity drawdown around 35–45%, comparing it to 2000 and 2008, and emphasizing it’s driven by valuation risk rather than “doom for doom’s sake.”
  • He also suggests the bull market may struggle to persist into a 5th year—implying 2027 (given “the last four” years, with a 5th year being 2027).

What would trigger the decline? (valuation + AI overbuild concerns)

  • His primary trigger is over-optimism/speculation around AI/data center capex, including concern that:
    • AI-related earnings (especially for “hyperscalers”) may not hold up over the next 2–3 years after accounting for debt and depreciation.
    • The market could be pricing an overshot future—likened to Cisco/late-1999/early-2000 tech expectations—followed by correction when expected “fiber”/telecom overbuild didn’t materialize as assumed.
  • He highlights semiconductors as especially vulnerable:
    • He describes semiconductors as the “most vulnerable” area due to sharp run-ups.
    • He cites the SMH ETF as a tell: the group has made new highs, which historically can precede limited upside and broader correction risk.

Sector/stock examples of “meteor-rises then give-back”

Oakley cites prior tech-style blowups to illustrate expectation-reset risk:

  • Zoom: +700% (Dec 2019 → Oct 2020), then surrendered gains by Dec 2022
  • DocuSign: $44 (2019) → $36 (2021) and “gave all that back practically”
  • Peloton: $24 → $158, then collapsed

Current “chasing” risk area he emphasizes:

  • Semiconductors broadly, naming AMD, Intel, Nvidia
  • Even if AI remains important, he argues valuations/expectations may correct sharply

How to know when to sell / take profits (valuation-based approach)

  • His approach is primarily valuation discipline:
    • If valuation “doesn’t make sense” relative to forward assumptions, he trims or sells.
  • Example: Microsoft
    • He says he owned it for nearly 15 years, then after a recent run-up he sold Microsoft because his team concluded the valuation no longer held up.
    • He notes some investors may be constrained by taxes and may not sell 100% immediately, but the action should be to reduce materially when valuation stretches.
  • He contrasts the risk of selling too early, but stresses that taking profits (e.g., his “4x gain” example with Nvidia) is still worthwhile.

Cash vs participation risk (Berkshire as a case study)

  • He discusses Berkshire Hathaway’s shifting positioning:
    • 14 consecutive quarters of net selling.
    • By end of Q1 2026, Berkshire cash/short-term investments were around $397 billion (presented as valuation caution).
    • In Q2, Berkshire reportedly:
      • Bought about $23.5B of stocks
      • Sold about $3.7B
      • Net buyer of roughly $20B
  • His interpretation: Berkshire isn’t “crazy bullish,” and spending ~5% of cash is not enough to declare a broad valuation regime change.

Portfolio positioning + risk management (explicit allocation and instruments)

Liquidity and asset allocation (stated percentages)

  • Oxbow’s “primary two” strategies hold about:
    • 45–50% in short-term Treasuries (less than 2-year maturities)
  • They note Treasuries have “done well this year.”

Equity/alternative allocations

  • They invest in undervalued stocks (broadly ~40 other diversified stocks across industries).
  • They maintain exposure to:
    • Energy (described as a “fairly large” position)
    • Gold and silver and miners/royalty companies
      • He says they “put a lot of money back” into gold/silver/miners after prices became “really cheap” over the prior ~6 weeks
    • A broader emphasis on hard assets due to long-run inflation / “stealth inflation” concerns

Explicit hard-asset thesis (macro risk framing)

  • Key points:
    • ~$40 trillion in debt and difficulty exiting it “in any ordinary way”
    • Risk of a regime shift similar to post–World War II “stealth inflation” (inflation may persist and be difficult to fully measure/eradicate)
  • Macro takeaway: over ~5–8+ years, investors may need hard assets to protect purchasing power.

Real estate vs farmland

  • Real estate: viewed as a hard asset that can reflect inflation
  • U.S. farmland: less attractive because it’s “really expensive”
  • Farmland might be cheaper in Brazil, roughly 20% of U.S. per-acre cost (as framed)

Gold (core recommendation) and silver (selective rebuilding)

Gold: “early innings,” near a bottom

  • He argues gold is in the “early innings” phase and the low may already be in.
  • Price references:
    • Gold revisiting $4,000 multiple times (“four or five times”)
    • Hot money “rung out” between February and ~6–8 weeks ago
    • After another dip, gold around $3,950 (from ~$4,000)
  • Recommendation stance:
    • Comfortable with $4,000 as a bottom “in this year,” but acknowledges there could still be a new low; if so, they would buy more.

How they buy gold (vehicles named)

They use a mix including:

  • Gold ETFs (he says they own “one or two” in some accounts)
  • Gold miners:
    • Agnico Eagle (“biggest one we like”)
    • Equinox (“smallest one we like”)
    • Alamos (“another good gold miner”)
  • Royalty companies:
    • Royal Gold
    • Wheaton
    • Franco Nevada
  • He expects miners/royalties could continue performing if the bottom holds.

Silver: after triple-digit peak, less emphasis than gold

  • Price context:
    • Silver broke into triple digits around $120, then fell to about $64
  • Actions / timing:
    • They sold silver all around the last week of 2025 and in 2026 when it surged above 100
    • He cites roughly +212% in 2025 for the earlier spike and states it was “time to go”
    • Since then they added back (and recently added again)
  • Position sizing:
    • Silver is not as large as gold in their portfolio.

Copper / energy / commodities (and concrete named positions)

Copper / mining exposure

  • They hold Freeport McMoran exposure split between:
    • Southern Copper
    • Freeport

Energy allocation and yield example

  • Example purchase:
    • Northern Oil and Gas bought around $18 about 7–8 weeks earlier
    • Yield around 10%, now about ~7.5% at the current level
  • Named energy holdings:
    • Oil producers: Chevron, Exxon
    • Producer/misc: APA (Apache), Antaro
    • Pipelines: Enterprise Products, Energy Transfer, and MLX (as transcribed; likely a ticker-name issue)
    • Service side: SLB (“Slumberj”), Noble Drilling, Transocean

Oil outlook and alleged price suppression

  • He suggests oil is kept artificially lower via strategic reserve/inventories and derivatives.
  • Derivatives-style stat:
    • ~480 million barrels short in oil futures (presented as an indicator of a large positioning bet/hedge)
  • Expected oil “settlement range”:
    • ~$65 to $85
  • Rationale:
    • Energy firms can remain profitable at lower prices; they “don’t have to have $100 oil” (example tied to West Texas)
  • Risk framing:
    • In a major recession, energy demand drops; oil behavior depends on supply, but recession is the key macro risk.
    • Analogy: summer 2008 oil fell substantially by Jan 2009, though later partially recovered within 12 months.

Upside commodities beyond precious metals

  • He argues critical minerals and energy can have upside.
  • Uranium example (supply-demand imbalance):
    • U.S. demand roughly 50 million pounds/year
    • Production roughly 2.5–3 million pounds/year
    • Interpreted as a demand–supply gap implying potential upside
  • He notes “numerous” similar imbalances in other critical minerals.

Macro: inflation, Fed, employment data (numbers cited) + stagflation regime

  • He discusses recent U.S. data with a caveat to “assume” government data is accurate:
    • CPI: +0.1% in July; about 3.4–4% YoY
    • PPI: unchanged for the month; about 4.7% YoY
    • Jobs: economy lost ~23,000 jobs in July vs expectations for ~80,000
    • Revisions: May/June down by a combined ~103,000 jobs
  • Fed interpretation:
    • Markets liked the “bad news” initially because it might imply less pressure on the Fed.
    • His longer-run view focuses less on month-to-month Fed actions and more on structural debt/inflation pressures.
  • Big expectation:
    • Stagflation over the next 8–10 years, while outcomes could include valuation mean reversion rather than only economic collapse.

Performance metric / valuation metrics mentioned

  • CAPE valuation:
    • He cites a “42 CAPE ratio”
    • It has risen “every month for four months,” calling it among the most expensive levels
  • Valuation mean reversion scenario:
    • He implies a possible S&P reversion toward about a ~15x earnings multiple (“15 multiple… pretty big decline from here”).

Disclosures / disclaimers (as reflected in the subtitles)

  • The excerpt contains general investing advice; no formal “not financial advice” line appears in the provided subtitles.
  • Some statements are explicitly probabilistic/uncertain:
    • He says he’s “not much at prognosticating,” and his AI timing view is a guess
  • He states they could be wrong on gold bottoms; even then, they would still act (buy more) if gold makes new lows.

Instruments / tickers / assets explicitly mentioned

  • Equities / indexes: S&P 500
  • ETFs: SMH (semiconductors)
  • Stocks / names (examples):
    • AMD, Intel, Nvidia
    • Microsoft
    • Cisco (historical reference)
    • Zoom, DocuSign, Peloton
    • Berkshire Hathaway
    • Agnico Eagle, Equinox, Alamos
    • Royal Gold, Wheaton, Franco Nevada
    • Hecla (as “Heca”)
    • Chevron, Exxon, Matador
    • Northern Oil and Gas, APA
    • Enterprise Products, Energy Transfer, SLB, Noble Drilling, Transocean
    • Southern Copper, Freeport / Freeport McMoran
    • Mastercard, Visa
  • Commodities / hard assets: gold, silver, uranium, copper, iron, fertilizer/farm-type companies, oil (West Texas), natural gas, real estate, critical minerals
  • Rates / fixed income: short-term Treasuries (under 2-year maturities)
  • Derivatives positioning: CFTC referenced (oil futures positioning)

Presenters / sources mentioned

  • Michelle McCrory (host)
  • Ted Oakley (founder & managing partner, Oxbow Advisers)
  • Sir John Templeton (valuation cycle quote; referenced)
  • Warren Buffett (via Berkshire discussion)
  • Greg Abel (referenced)
  • Michael Green (referenced re: passive investing discussion)
  • Mike Green (same person referenced earlier)
  • Miles Franklin Precious Metals (promotional mention by the host)

Original video