Episode summary
All The Market Tinder Needs Is A Spark To Crash | New Harbor Financial
Thoughtful Money
· · Hosts: Wolf Richter, Adam · Guests: John Llodra
Summary
John Llodra argues that the market’s sharp one-day selloff looked more like a “rogue wave” than the start of a sustained break, but he still sees a market that is late-cycle, richly valued, and vulnerable to a bigger decline next year. New Harbor’s process is leaning more constructive in the near term because breadth and bullish percent signals are improving, so the firm is prepared to add back some equity exposure from 37.5% toward the low 40s if the recovery holds. The team is not buying aggressively, though, because it believes the market is trying to find a top and could still stage a blowoff before rolling over.
Key takeaways
- Mike Preston says the selloff likely was a “rogue wave,” and New Harbor may raise equity exposure from 37.5% toward the low 40s if breadth keeps improving.
- John Llodra thinks the market is severely overvalued and expects a very disruptive, volatile, downward-biased stock market in 2027.
- The firm sees sector rotation beneath the surface, including renewed strength in banks and small caps, while semiconductors look washed out enough for a short-term rally.
- New Harbor says the recent CPI shock raised odds of more Fed hikes, but that could eventually pressure long-term rates lower if inflation fears fade.
- Gold and silver remain a core hedge for New Harbor, even though the metals are “hanging on by their fingernails” under dollar strength and higher-rate expectations.
Notable quotes
“There are lots of good reasons why the market should crash and crash in a big way”
“we came into this kind of meltdown at about 42.5% equity”
“there's a a very material likelihood we get a very disruptive, very volatile, very downward um biased stock market next year for a lot of reasons”
“gold and silver are just hanging in here just hanging on by their fingernails”
Topics
- market crash outlook
- risk control reducing equity exposure
- ai trade positioning risks
- fed hikes and long-term rates
- gold silver and dollar strength
Companies and tickers mentioned
- RGLD
- New Harbor Financial
- Royal Gold
Watch the episode
Watch “All The Market Tinder Needs Is A Spark To Crash | New Harbor Financial” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Thoughtful Money, this episode and its artwork belong to Adam Taggart | Thoughtful Money. Octagon is not affiliated with the show; this page is an independent summary.
