Loyal listeners, I hope your recent days have gone well, even if they are becoming shorter. On my mind – and where I hope to engage your interest for 20 odd minutes – is the topic of risk and uncertainty.
The SPX is at an all time high and it is also highly concentrated with volatile and richly valued but uncorrelated tech behemoths. That’s very unique. Whether you are an AI bull or bear, one thing we must acknowledge is the unique degree of index concentration and the risks that accompany it.

The exposure of both US households and foreign investors to the SPX is at an all-time high. There’s a reflexive element here. The massive increase in market cap for corporates is the currency that funds the epic capex. For consumers, facing a tepid labor market and ongoing cost of living challenges, stock market wealth matters a great deal.

I also discuss the surge in volatility in gold and the advent of prediction markets. I hope you enjoy the discussion. Be well.