Know Your Risk Podcast Skewed Inflation Data
Dec 18, 2025
Zach and Chase dive into the perplexing state of inflation data and its impact on markets. They unpack the reliability of CPI prints and valuation limits on major tech stocks. The conversation shifts to Micron's robust performance in the AI sector and the necessity of diversifying portfolios beyond the U.S. Amid discussions of international investment opportunities, they highlight significant disparities in commodity valuations. Tune in for insights on market leadership shifts and the balancing act of navigating investment strategies.
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Skewed Inflation Print Limits Market Reaction
- The CPI print was distorted because rent data wasn't collected, making the monthly inflation read unreliable.
- Markets largely looked through it since Powell warned data would be wonky after the shutdown.
Mega-Cap Valuation Ceiling Persists
- MAG7-style mega caps sit near a persistent valuation ceiling around ~34x where rallies stall.
- Growth rates have slowed, so similar multiples now look less justified than during 2021.
Require Clear Breakouts Before Big Buys
- Avoid assuming current valuations are justified by past growth; demand clearer improvements before adding big positions.
- Wait for breakouts above prior highs before taking substantive positions in volatile AI names.