The David Lin Report Trump Seizes Maduro: Will Venezuela Conflict Spark 40% Stock Crash? | Gary Shilling
Jan 7, 2026
In this discussion, Gary Shilling, President of A. Gary Shilling & Co., shares insights from his extensive Wall Street experience. He warns the stock market may be drastically overvalued, predicting a potential 30-50% correction. Gary assesses the implications of geopolitical events, particularly regarding Venezuela, and how they may affect markets. He also touches on the disconnection between stocks and the economy, emphasizing his preference for Treasuries over commodities and gold. Plus, he reflects on long-term investment strategies and the importance of staying grounded amid market noise.
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Capture Reasserts U.S. Power
- The Maduro capture boosts Trump's perceived international power and could shift geopolitics back toward a Cold War posture.
- Gary Shilling warns this may increase threats rhetorically but not necessarily lead to sustained kinetic escalation.
Be Selective On Defense Stocks
- Don't assume defense stocks automatically benefit from a single special operation; assess whether it signals more sustained military spending or merely U.S. strength.
- Gary Shilling suggests defense names only benefit if events trigger broader Cold War-style countermeasures.
Valuations Fueled By Speculation
- The stock market is disconnected from the weak real economy and is driven by abundant money and speculative flows.
- Shilling notes rising speculative assets create ex-post rationalizations that keep valuations stretched.