Tea and Crumpets

After a holiday hiatus, we welcome 2025 with a look at what worked in 2024 and what that may mean for this year.

One thing that did not work: forecasts. The Fed cut rates fewer times than predicted, and we discuss the recent pivot toward a more hawkish tone, which is part of the reason for the increase in yields on longer bonds. Those higher yields are stressing consumers and businesses, not to mention grinding mortgage activity to a halt. We look at the implications of higher rates and compare some of the small business stress we are seeing in our community versus the strong jobs data being reported, which is influencing the Fed's outlook for rate cuts.

In the second half, we discuss stock returns in 2024, which were biased upward by a handful of stocks in one (well, two, as defined by the S&P committee) sectors. We compare the level of index concentration, valuation, and performance dispersion versus history and find the clearest parallel with 1998 and 1999. After that period, we saw the following pattern emerge:

• The average stock beat the index each of the next six years.
• Value stocks beat growth stocks each of the next seven years.

We close with our thoughts on why that could be replicated again, specifically given the implications of likely Trump administration policy on merger and acquisition activity, which is off to a strong start.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

We take a wicked look upward, where both unidentified drones and market valuations reside. We also discuss the upcoming Fed meeting, investor sentiment, and the outlook for corporate margins (and employment) as AI gains greater adoption.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

We discuss the recent mania around levered ETFs and the market mechanics that make these so volatile. We also take our first look at investor response to Trump's win and what we think some of the over (and under) reactions have been so far, and what the true implications of changes in fiscal and regulatory policy may mean.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

This week, Will and Adam discuss how markets typically respond to the election cycle, and the importance of staying committed to the long-term view when it comes to investing. We also do a deep, some may say submarine, dive on the phenomenon causing some of the extreme weather we are seeing, and compare this type of explosion and its effects to how the explosion of post-Covid stimulus has affected inflation, stocks, and bonds.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

We recap the historically strong year-to-date performance of equities and compare Q3 versus the first half of the year. We also delve into the potential market implications of the upcoming presidential elections as well as the ongoing (and escalating) conflict in the Middle East.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

Special guest Kalee Kreider joins us to discuss the recent presidential debate, its impact on the November election, and all things political. We also explore the impact of broad trends like inflation and AI on the election, the economy, and markets.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

Will and Adam discuss the large downward revision in job creation and analyze its causes and implications. With the Fed meeting in Jackson Hole, they review its current stance on interest rates versus market expectations, as well as the divergent paths the market has historically taken around rate cutting cycles.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

Will and Adam return to provide insight on recent market tumult. We look at the causes (recession concerns, Japanese bank policy) and the effects (sharp decline, quick rebound, spike in volatility). We compare what is normal about today's environment versus the anomalies that cause us some concern.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

We wish Formidable a happy 11th birthday, though the more eccentric among us may say "get well soon", instead. Regardless, we look back on our approach to college planning and the merits of trade schools in the era of AI. We also examine AI's broader implications for inflation, wages, and stocks, both those that area direct beneficiaries (like the Magnificent Seven) and those that have, so far, been left behind from a performance perspective, where we see opportunity.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

Will and Adam review the new Bearcats flavored Grippo chips, and compare them to the Fed's approach on inflation. We take a look at what the lack of movement in oil prices is telling us about inflation and the economy, and how higher interest rates are (or, more accurately, are not) constricting some measures of financial conditions.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.