McAlvany Weekly Commentary The Markets’ Stratospheric Tsunami (with Steven Hochberg & Peter Kendall)
Dec 3, 2025
The discussion dives deep into the extreme S&P valuations and market risks tied to low dividend yields. A fascinating analysis reveals how speculative manias in AI stocks and Bitcoin mirror the S&P's trends. The guests explore the potential peak in the Dow using Fibonacci projections and discuss the long-term outperformance of gold versus equities. They also highlight the implications of a declining dollar, the risks associated with AI investments, and the importance of prioritizing safety in current portfolios.
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S&P Valuations In The Stratosphere
- Current S&P valuations are astronomically above historical norms and create substantial risk for investors.
- High dividend yields and price-to-book metrics show a generational overvaluation that likely precedes a major revaluation.
Leverage Is Fueling Fragility
- Leverage across markets (margin debt, leveraged ETFs, zero-day options) has expanded systemic fragility.
- Stephen Hochberg warns a loss of liquidity in 2026 could cause leveraged positions to unwind violently.
Liquidity Is A Mood-Driven Force
- Liquidity is a psychological phenomenon that fuels market manias until sentiment shifts and liquidity evaporates.
- When mood turns negative, leveraged structures and speculative positions can collapse quickly.