Despite back and forth trading this week, we've seen the major US stock averages hit more records this year and head towards milestones.
Now a small group of mega caps have driven gains for the past few years.
The AI race has helped the Mag 7 dominate the S&P 500, while strong deal making has helped big banks like JPMorgan Chase and Goldman Sachs, which have driven the Dow to recent records.
And this year, gold has soared along with market rallies and in spite of sell-offs.
Yesterday it did become the world's first asset to hit a $30 trillion market cap.
Joining me live here at the New York Stock Exchange on this Friday morning is Ted Oakley, managing partner and founder of Oxfa Advisors.
Ted, welcome.
Thank you so much for joining me.
Thank you, Rey.
Well, 2025 has been quite the year across markets, not just in the US, but also across the world.
So first and foremost, when we're talking about the US equity averages, tell us about market concentration.
Well, you know, if you look at it, I mean, you know, if you look at the top 10 companies.
They make up probably 42 43% of the S&P, so it's really not a diversified, that's not a diversified portfolio.
And that's what's driven everything.
And I, you know, we've always caution investors against that because if you get a turn on those companies then you're gonna get hurt and so that I, I think that's a bit of a misnomer that's diversification when it's really not.
Yeah, that is something to keep in mind and especially when we see steep pullbacks like we did last Friday, then that's when people start asking the hard questions here.
But of course, I do want to ask you what areas are you most concerned about right now and why?
Well, we, we generally think the market's overpriced and so for us we carry a hefty amount of US Treasury bills, not bonds but bills, and so safety for us, we have a fairly high safety factor right now because if you look, if you can go through any set of numbers you want to on valuations on the market in general, they're very extreme doesn't mean they can't get more extreme now they could, but when it's like that, I think it behooves you as an investor to know what you're doing.
And I think a lot of people today are just not thinking like that.
They just buy and they don't think about what they're buying.
Yeah, so tell us why Treasury bills.
Well, we two things we don't want to take duration risk right now, even though it probably helps you a little bit because we think inflation is just going to keep on moving higher over the next 5 years.
So we want everything to be less than a year or 2 so we can adjust if those come too, but that's we're really not managing a bond portfolio per se.
We're just holding out there as a safety valve.
If things get really cheap, we'll use it.
You know, we run about 500 companies that we want to look at, but we only own about 50 and if uh if they got cheap enough, we, you know, we'd buy more of them.
Yeah, well, one area of the market that we've seen continue to skyrocket year to date is gold, and we also saw silver hit new records as well.
So why do you think this is happening and do you expect gold to continue its run higher?
Well, I think it does in time.
I'm not saying it wouldn't get any selling.
But unlike most people, we've been in the gold and the miners for a number of years now, so we've, it's not something new to us.
All of our portfolios have always had them.
Uh, and so what I would say to people is if you look at the gold to the S&P 500 ratio, go back to 1980 at the high, we're not anywhere like that.
So goal, um, I think over the next 3 to 5 years it probably does go higher if you have a setback, you have a setback, but I think in the long run it'll go higher because I don't think anybody trusts the US anymore.
They don't want to buy the dollar.
They want, they don't want to buy the bonds.
I think they're using that as a currency hedge.
Yeah, and I do want to get your take on what you said about miners because we've been seeing different mergers and acquisitions as well as deals over the years.
So what's different now when it comes to the other gold plays?
Well, it depends on what you own.
Now for us, we own the larger companies and we don't own the juniors because you need to really have a full research group to do the juniors.
That's a whole different bag.
But on the, on the larger companies they've got good products, the good good minds, and some of them even have got so many mines you take a new mine or something like that where they're they're actually selling some off because they make, they make money off of it, but we also own and we're real big in The royalty companies because then you don't have, then you don't have to put money into the mines.
And so you know we we own three royalty companies and I think that's a great place to in order to not have to worry about finding the next gold mine.
And finally, before I let you go, we are looking at gold, continue to hold that 4300 level, at least for now, but where else are you finding opportunity?
Well, a number of places really I think the cheapest is energy.
I think people are, are missing something here because they're really hung up on this energy price.
Oil West Texas Intermediate $57.58 dollars.
But if you can look at a year from now.
We don't, we don't think oil is, is a plant as people think it is.
In other words, we think that a year from now price will be considerably higher, so the oil companies, oil service companies probably do really well, and they pay you a lot of cash flow now.
You get great dividends right now and energy, but there's other things too.
I mean, if you look at just companies like Gilden, that's a company we just bought that makes t-shirts, you know, sweatshirts, you look in the back of one, a lot of them you want to be gilding.
You look at different regeneram we just bought different companies that you get away from these big 10 stocks, so there's a lot of them like that that we like, you know, we just bought Union Pacific, so, uh, there's ways to do it, but you have to.
You got to know what you're doing.
Well, Ted, great to have you here today.
Thank you so much for joining me here at the New York Stock Exchange, and thank you so much for sharing your perspective.
Thank you.
Thank you.
