Market Emotions and Economic Realities: A Deep Dive

Ted Oakley, Managing Partner and Founder of Oxbow Advisors, joins Julia La Roche on episode 285 to discuss the economy and markets.

Sponsored by Monetary Metals.

https://monetary-metals.com/julia

In this episode, Ted warns that markets are extremely expensive at 23x future earnings while the economy is flatlining. He expects coming Fed rate cuts to be an Arthur Burns-style policy mistake, creating a window to sell long bonds before higher structural inflation takes hold over the next 5-10 years. Oakley advocates significant cash positions (his firm holds 50% short-term treasuries) and exposure to commodities, energy, and gold as hedges against dollar decline and inflation. He sees concerning parallels to late 1990s day-trading mania among retail investors and emphasizes risk management over aggressive growth, particularly for older investors who need to preserve wealth rather than chase returns.

With more than forty years of experience in advising high-net-worth clients in the investment industry, Oakley implements the firm’s proprietary investment strategies and the “Oxbow Principles” to provide a unique investment perspective.

He is a frequent guest on FOX Business News, Bloomberg Radio, KITCO News, Cheddar TV, Yahoo Finance, and many more. Oakley is a Chartered Financial Analyst (CFA) and a Certified Financial Planner (CFP). He is a member of the Austin Society of Financial Analysts. He is also a Partner of Herndon Plant Oakley Ltd., an investment company. He is a Board Member of Texas State Aquarium, American Bank, and American Bank Holding Company. Mr. Oakley is a United States Army Veteran. Oakley began his career in Dallas, Texas, over 35 years ago. He is the author of nine books: You Sold Your Company, $20 Million and Broke, Rich Kids Broke Kids – The Failure of Traditional Estate Planning, Crazy Time – Surviving the First 12 Months after Selling Your Company, Wall Street Lies, Danger Time, My Story, The Psychology of Staying Rich, and Your Money Mentality. Oakley’s primary philanthropic interest is helping children. He is Chairman Emeritus and Founder of the Foster Angels of South Texas, the largest foster child foundation in South Texas, as well as Chairman Emeritus and Founder of Austin, Texas-based Foster Angels of Central Texas. Also, President and Founder of Advocates for Foster Children Foundation.

Links:

Oxbow Advisors: https://oxbowadvisors.com/

YouTube: https://www.youtube.com/@OxbowAdvisors

X: https://x.com/Oxbow_Advisors

Book: https://www.amazon.com/Second-Generation-Wealth-What-Want/dp/1966629168

Timestamps:

0:00 Welcome and intro

0:51 Big picture outlook - market extremely expensive

2:10 Disconnect between economy and markets - flatlining economy vs rising stocks

3:20 48 years in markets - emotions never change at highs and lows

4:43 Fed rate cuts coming - Arthur Burns mistake repeating

6:24 Sell long bonds opportunity - inflation higher for next 5-10 years

9:08 Most people don't know what's in their portfolios

10:27 Rate cuts won't significantly impact 30-year rates

12:02 Can Fed solve inflation? Only through Volcker-style aggressive tightening

13:28 Jobs report

14:20 Recession outlook - wouldn't hurt to clean up system leverage

15:52 Retail investor activity - zero commissions created day trading

18:22 Warning signs from individual investors - last in, last out

19:49 Liquidity allocation by age - different strategies for different ages

22:49 Risk management key - never lose a lot of money

26:59 Finding opportunities - screening 300 good companies

29:45 Current allocation - 50% short-term treasuries across strategies

31:48 Gold and bonds relationship - hard assets hedge against dollar decline

33:48 Commodities outlook - 25-year lows present opportunity

36:15 Biggest surprise this year - tariff costs not fully passed to consumers

37:54 Biggest risk - America not as strong militarily as we think

39:11 Optimism in American resilience and young people's potential