"I've Not Seen This Level Of Market Speculation Since 1999" | Lance Roberts

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Jul 12, 2025

Lance Roberts, a seasoned portfolio manager and chief investment strategist at RIA Advisors, dives into today’s speculative market, drawing parallels to the 1999 dot-com era. He discusses the risks associated with retail investors' increasing reliance on leveraged ETFs and call options. As Q2 earnings season approaches, Lance paints a picture of market expectations and the potential for significant adjustments based on company performances. He emphasizes the need for cautious investing amid the current prevailing optimism that may not reflect economic reality.

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INSIGHT

Market Speculation Hits 1999 Levels But a Big Crash Isn’t Imminent

Lance Roberts warns that retail investor speculation on highly leveraged ETFs and call options is at levels not seen since 1999.

However, he does not see the current market move as a melt-up akin to 1999’s dot-com frenzy, describing the current rally’s angle of ascent as normal and lacking the extreme positioning and sentiment of a classic melt-up.

He assigns a 50% probability that stocks will rise modestly over the next three months aided by low earnings expectations and corporate buybacks returning starting August.

There is a 35% chance of a 6% market correction back to the 200-day moving average due to risks like renewed tariffs impacting earnings, and a 15% chance of sideways chopping.

Roberts emphasizes risk management and balanced portfolio positioning between high beta speculative stocks and more stable low beta names to navigate potential rotations or corrections.

INSIGHT

Speculation Parallels 1999 Peak

Retail investor speculation is at levels not seen since 1999, fueled by the belief in being bailed out by the Fed or banks.
This risk-taking mindset can lead to severe losses eventually when market corrections occur.

ANECDOTE

Unexpected Fan Encounter Abroad

Lance met a fan named Joseph in Lincoln, UK, who watches his and Adam’s videos.
They found it surprising and encouraging to connect with viewers internationally.

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Investors appear just blind to risk at this point.Portfolio manager Lance Roberts says he hasn't seen this high degree of speculation in the markets since 1999.At some point, the chickens will likely come back to roost. But in the near term, the essential question investors need to address is: How much higher will the rally continue?Lance and I discuss the odds, as well as what to expect from the start of Q2 earnings season, whether the Fed will cut soon and if that will be a "sell the news event". As always, we close by discussing Lance's firm's latest trades.For everything the mattered to markets this week, watch this video.

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