Know Your Risk Podcast Leverage in Investing
Oct 22, 2025
Market mavens discuss the S&P's performance, Tesla's earnings, and the looming risks of leverage in investing. They dissect the potential pitfalls of high leverage and highlight regulatory scrutiny from the SEC. The conversation shifts to predictions about market movements, emphasizing disciplined risk management to navigate downturns. Insights on gold, oil, and the significance of trimming positions reveal strategies for better long-term investment success. They even share friendly sports anecdotes to cap off the insights!
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Systemic Risk From Combined Leverage
- Margin debt plus leveraged ETF exposure is at levels only exceeded by the dot-com peak when adjusted for money supply.
- That combined leverage creates a systemic market vulnerability if investors begin to delever.
Trim Winners To Preserve Dry Powder
- Manage exposure and avoid high persistent leverage because unlevering can force vicious selling at market lows.
- Trim winners to maintain dry powder and avoid being forced to sell into falling markets.
Inside SEC Enforcement Priorities
- Zach teases sharing an SEC story about enforcement priorities and surprises from inside the regulator.
- He says listeners would be shocked at what the SEC focuses on and ignores.