“I think in the long run, it’ll go higher because I don’t think anybody trusts the U.S. anymore.” – 04:02
Ted Oakley, Managing Partner and Founder of Oxbow Advisors, joins Remy Blaire to discuss the current state of the U.S. equity markets and broader economic trends. The conversation begins with an overview of the recent performance of major U.S. stock averages, which have reached new records this year. Remy notes that a small group of mega-cap companies, particularly the MAG 7, has significantly driven these gains, while strong deal-making has bolstered major banks like JPMorgan Chase and Goldman Sachs.
Ted highlights the concentration of wealth within the top companies, explaining that the top 10 firms account for approximately 42-43% of the S&P 500. He cautions that this lack of diversification poses risks for investors, especially during market pullbacks. As the discussion progresses, Ted expresses his concerns about the market being overpriced and emphasizes the importance of safety in investment strategies. He reveals that Oxbow Advisors is currently holding a substantial amount of U.S. Treasury bills rather than bonds, as they aim to mitigate duration risk amid rising inflation expectations.
The conversation shifts to the performance of gold and silver, which have seen significant increases year-to-date. Ted shares his long-standing commitment to gold and mining stocks, suggesting that gold is likely to continue its upward trend over the next three to five years. He attributes this potential growth to a general lack of trust in the U.S. dollar and the use of gold as a currency hedge.
Ted also discusses the mining sector, explaining his preference for investing in larger mining companies over junior miners, which require extensive research. He mentions that Oxbow Advisors has invested in royalty companies, allowing them to benefit from mining operations without the associated risks of managing mines.