Maggie Lake Talking Markets Episode 80: Signs of "Extreme Speculation". With Tommy Thornton.
Sep 8, 2025
Tommy Thornton, founder of Hedge Fund Telemetry, is known for his cautious approach to the markets. He discusses the surprising dynamics following Japan’s prime minister resignation and why he's avoiding gold and silver right now. Tommy shares his insights on the Mag 7 stocks and the overall risk-on sentiment. He emphasizes the importance of contrarian thinking in frothy markets and highlights promising opportunities in commodities and specific sectors, all while navigating the complexities of investor behavior.
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Market Stretch And Complacency
- Tommy Thornton argues markets are stretched with narrow leadership concentrated in a few mega-cap names.
- He warns complacency and low volatility increase the risk of a larger correction.
Passive Flows Distort Price Discovery
- Passive inflows and retail concentration in a handful of tech names have distorted price discovery.
- This concentration creates fragility if sentiment turns and few buyers remain.
Sentiment Signals Are Flashing
- Thornton tracks sentiment, VIX, and credit spreads and sees exhaustion signals that warn buyers may be running out of ammo.
- He highlights heavy option buying and low put-call ratios as signs of complacency.
