Is A Private Credit Meltdown About To Take Down The System? | Chris Irons

You don't need to be a statistician or an actuary or, you know, a CFA level three to know that the front page of the Wall Street Journal is now every day showing another private credit fund under stress. And so, you know, I think we're on the doorstep of of a credit event. Welcome to Thoughtful Money. I'm thoughtful money founder and your host, Adam Teard. With the US at war with Iran, oil prices spiking, private credit likely imploding, and payrolls sinking, it's perhaps understandable that some investors are worried that the world is going to hell. To

put everything in perspective for us today, likely using more than a few f-bombs himself, is Chris Irons, author and publisher of QTR Fringe Finance, which has become one of the most popular financial newsletters around. Currently sitting at number 27 in the list of top 100 financial substacks worldwide. Chris, thanks so much for joining us today. Happy to be here. Thank you. Uh well, it's really fun to have you back, Chris. Really enjoyed your inaugural appearance on this program. Uh suffice to say a lot has happened since then. Yeah. Um and uh you made a great

statement Last time about stocks being pornographically overvalued. I want to ask you in a bit if we're still at that stage, but before you know, I just kind of gave a brief litany of of some of the headline worries that are out there right now. From your perspective, just how bad are things? Is it is it really all that bad or like most things in life, is there more nuance at play? I mean, how bad are things or how bad do they look? Because they don't look that bad, right? Like nominal price of the stock

market continues to go higher. The valuation I mean, we've come off a little bit here, but we're pretty much as stretched in terms of valuations as we've ever been historically. You know, I I don't know if the question is there things are bad in the sense that the way things look aren't the way that things are. And that's the story we're kind of seeing in private credit right now. You got a whole sector full of mismarked books and level three accounting that needs to be adjusted and is starting to be adjusted. And as that's happening,

you're seeing people rush for the exits in concert together. And you're seeing redemptions getting gated and, you know, bigger and bigger. Last week it was a $26 billion fund. Yesterday was a $33 billion fund. You know, getting 7% Redemptions. And so, uh, the shift's kind of hitting the fan in private credit. The overall market's the same deal. It's like, how does it look? Well, it's inflated from money printing and uh, and it's being, you know, bid up by the passive bid and the options market and money printing. Uh, essentially, you know, the passive bid sprays

uh, retirement capital to a market weighted index. Um and that propels the indexes higher despite the fact that market breath you know may show 70% decliners to advancers if the 30% that are advancing are the right names the index goes higher and so you know how are things I mean most people would say like oh things are good but under the surface you have things like the cryptocurrency uh sector which could arguably be it doesn't matter if you're bullish are bearish, but it's probably the tip of the spear if you wanted to make the argument

that one whole sector could be worth nothing. Um, you know, so you have a lot of a trillion or$2 trillion dollars in market cap there that could theoretically like go to zero or at least theoretically doesn't have a a floor or a bottom from any fundamental perspective. Um, and you have a long list of companies that are trading at even more aggressive valuations than the indexes themselves are at. Um, specifically in AI, but then like you have a lot of cash losing companies that really have no business even being public or having a bid um

that are trading at extremely excessive valuations. So, you know, I guess things are good. They look good, but there are significant pockets of air underneath everything. And you know, having positive real interest rates still each day kind of costically whittleles away at the euphoria in the market little by little, day by day, and limits companies ability to attract new capital or to refinance. And so, you know, I guess things look good now, but under the surface, I mean, you could make the argument that they're not as good as they look, and that's that's what you're

seeing in private credit now. All right. So, other than that, Mrs. Lincoln, how did you en enjoy the play? Um, okay. So, you know, you had used that term pornographically overvalued last time you were on. Um, obviously, you still think valuations are a big Issue from what you just said. I'm just curious, you know, the markets have sold off a bit um from their highs and they've cooled a bit during the war here. Would you downgrade your comment from hardcore porn to softcore porn or are we still at hardcore porn levels? Not really. I think

the uh excuse me I think the issue that needs to be considered more than are we extremely overvalued or very overvalued because you know whether we're at you know whether the Schiller PE is at 40 or 35 doesn't matter. What matters is whether or not we are actually going to revert back to historical averages when it comes to PE ratios and market cap to GDP and those things. Um if we do eventually revert to those historical norms and the averages that have been set over the course of whatever 130 years or 140 years um then

yeah then there's an argument that okay we do have a 50% draw down uh possibility in the future obviously before the Fed comes in and and puts a bid under the market. But really, there's also a case for, and I've written about this on my blog, there's a case for things just being Different now. And I know that that's something that somebody like me would just laugh about usually because it's a play on the idea that every time there's a bubble, people say it's different this time. And I started to kind of seriously consider whether

things really are different, whether 20 or 25 times earnings is now the new, you know, tough, you know, 10 to 15 times earnings, which would have been in the past. And the reason being is we're out of control with quantitative easing. And that was never the case from, you know, whatever the first hundred years or the first 90 years the Dow traded. So when you want to look at historical averages and you're going to work in numbers from 1906, uh you had a market that was functioning very differently than the the way the market functions

now. And I'm not just talking about structurally like you know options and trading 24 hours and the passive bid and all that [ __ ] Putting all of that aside, which is it does make it fundamentally a different type of stock market, you have unlimited quantitative easing coming at any point the market has a sharp draw down of whatever 5% or 10% at any point. And to the extent that that's going to continue, it is actually worth asking the Question, you know, is 20 times the earnings now like the new deep value? And trust me,

like nobody hates hearing me say that more than me, but I do think it's a topic worth exploring. Um, I think, you know, during COVID, I think forward earnings estimates got down to like 18 or 15 times earnings. Um, you know, CO was a pretty gnarly, nasty sell-off. Like, and in events like those in the past, you would see the S&P get close to singledigit PE ratios. And so, you know, the floor may have just been raised slightly by virtue of the fact that the mechanics that power this market are totally different than they've ever

been and they're going to be. Which is why you don't just see the stock market going in a chart of the Dow from the left side of the screen to the right. You don't just see it going up, you see it going parabolic, right? which is uh just shows the rules of the game changed, you know, once we started into the 2000s. And so again, a better question is not are we overvalued, but how are you even thinking about calibrating this market to valuations to begin with? So Chris, I know you do your own interviews

from time to time. Um, and I'm curious, have you ever interviewed Hugh Henry? Do you know who he is? No. Yeah, I do know who he is. I've never interviewed him. Um, I actually haven't interviewed Hugh either, but I would recommend that that you reach out to him even just to have a conversation off record. Um, Hugh is pretty famous, as you may know, for basically coming to that same epiphany that you just talked about. um soon after the the GFC when the central planners rushed in with the initial QE programs and he basically you

know he he had been very vocal about pointing out a lot of the the vulnerabilities of the current system but then he kept watching what the central planners were doing and he basically it was sort of like a Doctor Strange love like I just came to love uh uh I I learned to love the central planner response I He he hated why it was going on, but he just said, "Look, but it is what it is, right?" Yeah. He's like, "It's a joke that I just can't lay in front of." Yeah. If I lay in

front of it, I'm going to lose all my investor capital. And he he eventually famously sort of shut down his fund and returned money to investors and just said, "I I can't continue to invest the way that I have my whole career because I think there's been a Sea change in the way that markets work." And I kind of hear you saying you're you're potentially arriving or at least contemplating a similar conclusion. Yeah, I wish I would have arrived in it when he did because uh I would have made a lot of money, but I

didn't. So, all right, then let's um I feel like we've just fast forwarded through a lot of middle ground to get get to the real meat of things here. So, okay, you write your newsletter. You know, you're you're job is to try to help your readers make better informed decisions um about their investing. Uh and obviously, you invest your own money. So, what what are you doing with this this wrestling match that you're having right now? Are you are you contemplating going more long than you otherwise would have before or like what what are what

are the investment outcomes of this? Not really. I think you know the what I try to point out on the blog is just the other side of the coin when it comes to a lot of things. And so just to try to shed what is increasingly becoming a scarce fundamental light on the markets and on companies themselves. So if you step outside of Hugh Hendry's uh you know market circus that you're Describing you know it is still worth noting the fact that you know look no matter how much the Fed prints like if you own

equity in a company that's burning cash you still own equity in a company that's burning cash. I mean like you know the stock valuation may be higher but like you know there's going to be some type of fundamentals to look at um and that's generally what I try to do and I try to explore like you know asymmetric opportunities sectors that are kind of like uh being ignored or show some uh show promise that otherwise would not be thought of. I mean I have written about individual names. Um mostly I write about sectors in general.

Um and I don't really you know I don't really give advice. Um I just kind of write about things that I think you know a lot of things I write about I don't own. Some things I write about I do own. Um you know coming into last year I was focused on nuclear energy. Uh I think we talked about on on the first podcast gold and silver miners which obviously you know the I do like 25 picks at the beginning of the year and then I chart how they do over the year. This year I

did 26 for 26. You know last year being very heavily weighted in gold miners and uranium did incredible that you know little mock portfolio beat the S&P by Like 50%. this year still ahead of the S&P by like five or six% but have kind of spread around um through a couple different sectors uh that I was not in in 2025 for example kind of stepped a little bit away from nuclear although there's still a few names in nuclear that I still love um and still think secular bullish trend in nuclear will stay intact but also

wanted exposure to oil and natural gas coming into this year so more of like a conventional focus on energy as opposed it's a nuclear uh focused focus on uh and so that's generally what I what I write about. I try to just explore uh trends that don't get a lot of play in the financial media and really I don't just want to say like point out the bad news. I mean, the last two weeks I've written a lot about these private credit blowups and redemptions because, you know, I think you would have to be nuts

to own something like, you know, Blackstone, Black Rockck, Apollo, Aries, Blue Owl, any of the regional banks. um you know and so really I do try to issue warnings in areas where I see froth and that just comes from you know my professional background of being a Professional short seller for many years and you know generally being a skeptic and a cynic. Um and so and I think you know my readers who are wonderful and I really have some nice vibrant discussions in the comments and in the chat of my blog um you know I

think that's what they're looking for. I think they're look it's called fringe finance. I called it that because somebody told me that's what my podcast was as and they told me that as an insult and I was like you know that's not really an insult. Like what I'm trying to do is look at issues that aren't being covered in the mainstream media or in the financial media and explore them because that's where very interesting asymmetric opportunities can sometimes be. That's where, you know, a lot of times the media or the sell side will just lie

to you about things. And so the fringes are kind of uh interesting areas for for me to shine lights on. And I think that that's uh hopefully what will keep my subscribers coming back. Okay. So, um, we've got this market that is, um, pretty deformed, I think you'd say, and it's a term I'm stealing from David Stockman, who wrote the book, The Great Defformation, coming out of the GFC, things have only gotten, I think, far more deformed since then, especially Valuation wise. Um and even though that may be sort of a new normal, right, that

like multiples might be at a higher rate uh in this new normal than they were before, you know, it's being propped up. And when when something's being propped up, it's vulnerable to, you know, unexpected shocks it doesn't see coming. And basically, it just means you've got further to fall down the ladder when you do fall. right now, right? The central planners will likely respond and try to push things back up, but there'll be a period in there where there's a fall, right? And and things get rocky and painful. Um, and I think a lot of

your readers and my viewers, you know, they're really hoping not to become collateral damage to to kind of airpocket moments like that. Yeah. So, so one of the things that I think you and I'll pat myself on the back and say I and a number of the folks I bring in this channel have been somewhat early to over the past year plus have been pointing out the concerns about private credit and all of a sudden that's kind of headline news right now and you just listed a whole bunch of companies that all of a sudden

everybody's starting to read about, right? Oh my god, these guys are closing redemptions and things like that, right? Um, how how big of a of a potential Trigger do you see private credit credit as? Perhaps maybe trigger the next big downdraft here that the markets feel. Um, I was just talking with um, Stephanie Pomboy, like literally right before I came on with you here, um, Chris, and the analogy we came up with was kind of like the kid whose mom tells him to clean his room. And what he does is he just grabs all the

stuff on the floor and he throws it in the closet and the room looks great, right? And he can get away with that for a while, but eventually the closet just starts overflowing and it bursts open and all this stuff flows into the room again. Um, I'm curious, is is do you think that's a decent analogy? I mean, is this something that you think could Yeah. Yeah. And I think it's more than private credit. I think that, you know, I've been writing for like almost two years now on my blog about commercial real estate also

too and how much ugly commercial real estate paper is on the uh balance sheets of regional banks. Um, and I think eventually there there's some marks that are going to have to be changed in the, you know, the uh the cows will come home there at some point. I don't know when. I think this private credit event here could actually trigger that which is why before I when I said you know regional banks um you know to the extent that They have exposure to commercial real estate which is one area that I wouldn't want to

be around. I mean look you know the the first headline that came out in December was Blue Owl uh was trying to get some financing done for a data center and was unable to. And that was the first kind of like crack in the narrative where people were like interesting like you know is the AI boom over is it a private credit problem? Now what we're seeing these last few days with this $26 billion fund the $33 billion fund gating redemptions. Um you know that smells to me more like a real exodus. And so yeah,

I think you know private credit to the extent that they finance uh other speculative uh risk on companies uh whether AI or otherwise and to the extent uh that they're tied in and tethered to other companies with counterparties like obviously there's the potential for aftershocks. Um, you know, I I do kind of think actually on Friday, last Friday, we got that headline about Oracle and OpenAI and their data center deal in Texas falling apart and we sold off into the close and I thought like, wow, like we're going to have a Nightmare Monday. I thought

like this is it. This is the narrative breaking right now. You know, OpenAI is the flagship marquee name in in AI in AI. Oracle, you know, the credits fault spreads have uh swaps have been uh tumultuous over the last six months and people are wondering, you know, whether everybody's kind of overshot their capex marks and so it does kind of seem like a little bit of a storm is brewing. And when that deal fell apart, I mean, I kind of thought like we were going to see private credit just lock up like we did with

Silicon Valley Bank. And that that happened over a weekend, right? Like Friday after hours, I think they put out a press release saying they were fire selling assets to raise a couple billion dollars. And by Monday, they were facing $60 billion in redemptions and were bankrupt. And they brought down, you know, a couple other regional banks with them. I forget who, Signature, some other ones. So, I thought we were going to have the same event over the weekend. And it wouldn't surprise me to continue to see headlines this week because if you're in private credit,

like the signs are now obvious. it is being laid bare that it is time to get the [ __ ] out of private credit. You don't need to be a statistician or an actuary or you know a CFA level three to Know that the front page of the Wall Street Journal is now every day showing another private credit fund under stress. And so you know I think we're on the doorstep of of a credit event. Okay. So um you know psychologically once things change you know that's it right? like once the psychology breaks, you know,

that's there was I think some fund that offered to tender for parts of Blue Owl's book at like a 30% discount to NAV la last week. I mean, okay, like I guess that's kind of like there's a bid out there. There's still money in money market accounts. You know, there's a couple arguments that people can make that there's a bid, but you know, I don't know. Litigation's going to start. People can't get their money. I think more private credit companies are going to face more redemptions. I don't know when this is going out. Today's Wednesday,

March 11th, but um I wouldn't be surprised if by the end of this week by Friday or maybe Monday next week, you know, there the deluge of redemptions that continues. Okay. This is going to go out tomorrow. So, this will go out Thursday. So, Okay, cool. Folks will see if that prediction comes true. People can tell me I'm wrong immediately. Yeah. So, but I think the the big question with private credit is like how Entwined is the private credit world with the rest of the system, right? Like, so in other words, are folks not going

to cry that many tears if Blue, you know, gets if it stock gets hit hard or Blackstone or whatever? I don't know too many people that love Blackstone as a company. Um, yeah, but but you know, uh, one, it's a much more opaque market, right? It's not regulated the way that public credit is uh and banking credit is. It's completely opaque. Yeah. So, we just don't know a how how crappy the loans that have been made are, but we don't necessarily know where they lie. And and and there there is connectivity there like like banks

actually do make loans to private credit companies who then make loans to other ventures that we don't know based on where their marks are. Right. Yeah. So, so how could how might this cascade is the question? At the end of the week last week, I forget who it was. I think it was a black argument with a small fund. It was like a 25 million with an M dollar fund, but they wrote it down from 100% a par to zero overnight in 24 hours. There was no there's no, hey, it's deteriorating. There's no, you know,

100, then 80, then 60, then 40. Yeah, just 100 one day, next day worth zero. And we could see a Lot more of that. But yes, you're right. And things I always say that things only are laid bare and start to break and we really only see the big problems after these companies and their executives have exhausted all other options. So there is literally not one more refinancing they can do. There's not one more way they can gain the numbers. There's not one more lender they can go to for a bailout. there's not, you know,

and so when you start seeing things like gaining fund redemptions and these huge markdowns and, you know, it's really to to me I believe it signifies the end of the rope for uh a lot of these companies and then the question just like all right like what is the what's the effect on their counterparties and how many companies is this going to affect uh completely? Okay. Um so I guess just sort of on your Defcon meter, right? Let's let's let's say one is I'm sleeping like a baby. Two is hair on fire. How concerned are

you about the potential for private credit contagion here? What's the scale? One to what? One to 10. 10 being the worst. I would say my conviction level that There is going to be continued redemptions is probably like a nine. I would say that my conviction level that there's going to be contagion across the financial sector that's meaningful. uh is probably closer to five or six. Okay. Uh and obviously, you know, as new data comes in and I mean the key word there is meaningful. There's obviously going to be contagion. There's obviously going to be, you

know, counterparty effects. The question is, you know, h how much of those are going to cascade through and where's the terminus for each one of them? You know, I imagine some of them end at the larger banks. Um but, you know, we don't know. Okay. But but in terms of like, hey, this could be the new subprime. This could be the thing that that creates the next Well, in in sheer size, I don't think, you know, it it's going to be the housing market crash. I mean, you know, private credit's what, like, you know, a

trillion and a half or something. And, you know, maybe if there's contagion, it's it's three trillion. I I don't know. I I don't know. I don't think it's it's not as big as the housing market. Um, but it's not something to ignore either. I could be wrong also too. You should just look that up before I just talk out of my ass. All right. Well, um, and look, actually, While you're doing that, I'm just going to mention Yeah. All right. So, the housing market is about 10 trillion and the private credit market's about one trillion.

So, or one and a half trillion. So, that gives you perspective there. Okay. But it's enough it's enough to stir up some [ __ ] for sure. Okay. Um, and I I I'm just presuming we we sort of started this conversation with uh the high valuations of the market. I mean, if if if there is trouble in a trillion and a half private credit market um that may have some exposure to the main banks themselves as well, presumably this is something that could, no guarantees, but could create a market downdraft of some sort. Market downdraft

that would be painful that we we'd love to try to avoid if possible. Yeah, for sure. And what'll happen is exactly what happened when the regional banks started to collapse a couple years ago. You know, the Fed will come up with some program and and bail out the, you know, some we'll engineer some like sector specific bailout. Um, but yes, you know, this could be the fuse that lights a sharp deleveraging. You know, everybody was talking about Iran when the war started and you know, the first article I wrote was ignore Iran, like watch banks.

Um because we had that two Fridays ago where banks Were selling off and you know Iran that war and that volatility and oil's volatility. I mean yeah of course shops are blowing up and all hell's breaking loose and that could be the the fuse uh that definitely lights the bomb for sure. Um but I would you know those couple of days when everybody was just talking about the Iran war was dragging down the market. What I was writing about on my blog to my subscribers is don't take your eyes off private credit. like don't you

know yes everything's volatile now oil's volatile you know the overall market is selling off but the the the weather vein the canary in the coal mine and where the action I think is going to be first is the private credit okay um but just because you mentioned it so you know we are at war obviously you've got the the risk premium that war brings to the markets um and we've had oil kind of go bonkers right I mean it was up to 120 bucks uh in the futures market on Sunday night. It's come down a

fair amount since, but still quite elevated to where it was before the war. Um how right now, how much of a threat are you seeing the war to the prospects for the markets for the the greater year? Um honestly, when I wrote about it the first time, I thought it was going to be kind of quick and surgical like things were in Venezuela. Uh, I turned out to eat some crow on that because it's been prolonged now here for a couple of weeks and there's destabilizing effects across the Middle East. Um, and generally all hell

is breaking loose or has broke loose over the last week or two. But, um, I don't know. I I really stand at odds with some of my readers on this. I I don't think this is going to be a prolonged like, you know, monthsl long endeavor in Iran. I think they'll get things tidied up pretty quickly. I think you know a lot of the Middle Eastern countries Qar and Saudi Arabia and you know all these places all have a vested interest in creating stability in the region. Um and so I think we'll probably get there

more likely than not. I think you know I wrote the Sunday morning going into Monday on the the day that we had the crude oil spike that you know basically risk assets were getting sold. the URRA, which is the nuclear uh ETF, was down to 46. Um, and oil had gone up to 130. And I kind of just wrote, you know, hey, like tomorrow, I actually wrote on Twitter, you know, tomorrow is international short oil, go long nuclear day, you Know, nuclear trade, nuclear trades with the risk assets. And so that was getting killed and

oil was through the roof. But when you see moves like that in commodities like you know oftentimes they overshoot the mark like significantly um especially in the commodities market. And so the idea there was I think that's the blowoff in crude. I think the worst is over. Um and I you know I I hope for mankind but also I I guess for the markets too that the worst is over in Iran. Um but yeah, it's definitely going to be uh something that the market is going to keep its eye on, that investors have to keep

their eye on uh as well. Okay. And let's assume that you're right that um not necessarily like regime change, but but just the US sort of winds things up in the next couple of weeks and says, "Okay, we're we're done, at least done for now." Um how much of a relief rally, if any, do you expect the market to experience from that? I think it could actually be less than people think. You know, I think that uh a relief rally assumes first off, we've had a little bit of a relief rally, right? Over the last

like couple of sessions, Trump has come out and said, "Hey, we're mostly done in Iran." So, over the last 5 days, the NASDAQ hit the green. Uh over the last month, it's Barely down 1%. So, we have kind of like come back up. Uh the past six months, NASDAQ's still up 4%. So, um, you know, a relief rally kind of assumes that you were rallying on firm ground to begin with, and I'm not so sure that that was the case. Uh, I'd actually be more I would I'd be more inclined to think that any relief

rally would be shorter. um that we may have actually already even seen it over the last two days really with these comments from Trump. Um but really also that we'll have a bump and then people will realize they've returned to an overvalued market with a private credit crisis uh and you know positive real interest rates. So I think this probably gave people some pause and put things in perspective for some people. Um, you know, it's not like after Liberation Day where they said, "Okay, like we're gonna we're going to curb the tariffs and everybody just

gung-ho back in." I think I think we're on shakier ground than that now. So, I wouldn't be betting all of my money on a huge relief rally here and, you know, the S&P to go to 7500 overnight. Okay. So, the the vibe I'm getting from you, Chris, is you're kind of defensive right now mentality-wise when it comes to the the general markets, which yes, we might be in this new normal where everything is kind of, you know, eternally propped up, but there's a lot of things that are potentially weighing on the market in the near

term. Private credit being at the top of your dance card there. I'm presuming you're a little bit more defensive than normal. Um, I'm curious, where do you see opportunity right now? like you mentioned a few things like you increased your exposure to um fossil fuels. You clearly still like nuclear a bit. I think you still like precious metals and the miners. Uh but tell me if that's wrong, but where where else are you seeing opportunity this year? So, you know, I've written on my blog my 26 stocks that I'm watching for 2026. So, you can

get that on my uh Substack QTRE Finance. Um, like I said, that portfolio this year is at least outperforming the S&P by maybe 4% at least last I checked. Um, you know, that includes like individual tickers and ETFs, but really generally from a general sense like I I'll give you an Idea like like I said, I stepped away from completely being a nuclear when it comes to energy and diversified more to nuclear and oil and gas and LG. I like energy. I am defensive. I like consumer staples. I like the VDC. you know, they had

a tough year last year. I like utilities, like anything that's boring that pays a yield. Um, I'm I'm good with I like the ITA, which is the uh aerospace and defense ETF. I like the IHK, which is the cyber security uh which has just gotten killed with software. you know there there's a big difference between AI kind of replacing people that are using Photoshop and Adobe getting crushed and uh you know saying oh all these cyber security companies are going to be worth nothing. Uh I think that is an opportunistic sell-off that over the course

of the long term will pay off in something like the IHAK um which is you know companies like Palo Alto and uh Crowd Strike and uh the the others because you know the AI is not going to it's not going to harm their business it's going to help their business and uh you know cyber security is really going to be the future because wars now and in the future a lot of them will be fought online and through fiber Optic cable and you know just says there's a hot war, there's cold war [ __ ]

that goes down and it's not the 60s anymore. You know, it's done via the web. So, I like those names. I think psychedelic stocks um are an interesting niche in biotech that nobody's paying attention to that I think could get a good tailwind from clinical trials that are coming up uh clinical trial results that'll be coming up at the end of this year. And they also have uh an administration that's probably more favorable to them now than the last few administrations with RFK at the helm and looking into alternative therapies and medicines. Um so the

PSI is the uh ETF for the psychedelic names. Um and you know aside from that there's individual names that I like. I've written a lot about PayPal. That's not a huge surprise. You know that's deep value in my opinion. 5 billion free cash a year or cash from operations a year pays a dividend. They're buying back stock. It trades at eight times earnings. It's still growing a couple percent a year. It's a mature business, but it's not a dying business in a death spiral. And that's how the market is pricing it. It Owns one of

the best fintech assets in the world and Venmo. So, uh I love PayPal. Uh in nuclear I like Centress which is the only uh uh uranium enricher domestic uranium enricher in the United States. Uh Howard Lutnik was ping around with their executives at one point uh last year and I think that if the US looks to protect uranium enrichers like it has uh you know rare earth and those types of things um centrist is the obvious candidate to pull closer to the government. Um, plus they're the only ones that do it in the US. And

so, um, and I think that that's going to, you know, with recommissioning all these nuclear sites that's happening, the increased demand for uranium. Um, so I like LEU in, uh, in nuclear. And then, you know, other than those sectors, there's a bunch of individual names that I wrote about. Um, little asymmetric opportunities that I think here and there. Um, yes, like you said, I generally also like gold and silver miners. uh still although not with the same aggressive nature I like them last year. Uh you know this is kind of a breather year for them

so far. Um and I Continue I I expect that they will move up but not with the pace that they moved up last year. So uh so yeah that's a general idea of where I'm at. I I would like to say my positioning is defensive like you know I'm not super heavy in AI stocks. I'm not super heavy in crypto. um you know, consumer staples, utilities, defense stocks, um anything that generates cash and pays me yield consistently. Um and like I said, little opportunities in psychedelics and a couple other places that I've written about. All

right. Um I so appreciate you being that transparent, Chris. Super helpful. Um it's exactly what the folks who watch this video love is to get these ideas to go research themselves. Obviously, you've got, I think you said, a list of 26 stocks and ETFs that you put together for 2026. So, folks can go to Chris's Substack to get that full list of stocks and and when we say goodbye to Chris, I'll remind everybody where to go. Um, just real quick on software because I've been asking this question recently because I'm I've been thinking like you

Chris, which is a lot of these software stocks have kind of gotten hit so badly that it's it's almost like they're being priced for going out of business. that AI is just going to totally eat their business. And that will happen with some software companies. But for a lot of the big, you know, the big blue chip ones in this space, something I've been hearing a lot is um, you know, if you're an enterprise company and you, you know, need to run an important platform, your sales platform, your CRM, whatever, are are you going to

what would you prefer to use? you know, a battle tested right software suite that, you know, millions of lines of code that have been, you know, painstakingly put together as every use case has been found and and debugged. So, it's kind of a bulletproof solution that's out there. Or you going to go with something that's some AI company or some AI model just spit out, right? In most cases, you're going to be going with that triedand-true software package for for a good long time. And to your point, it's not an andor. A lot of times,

you know, AI's a lot of cases AI is going to work together with these software programs and and AI is going to help these software companies become even better at what they do. So, you know, this is sort of one of the things I asked about a relief rally, like if I if the war kind of dies down and and the market's immediate fears about the wars diminish, it's going to start looking around to say, okay, well, where should I put money to work? And it seems like the software space might be a pretty obvious

candidate of like, wow, this thing's Really been beaten down. time to get back into the pool. Do do you think that's the case or that's more likely than not? Uh I think probably there's going to be select names that will be negatively impacted and other names that won't. You know, I actually tried to handicap this a little bit last week. I was looking at Adobe. You know, Adobee's trading at like 15 times earnings now. They're a staple in, you know, any type of creative arts that you can do on on a computer. Um, and the

idea is like, okay, like is AI going to replace, you know, human ingenuity as it comes to graphic design, as it comes to video editing? And and I do think that there's um a case for that, but I also think there's a stronger case for Adobe integrating that into their suite and, you know, kind of moving alongside that and and growing with that trend. you know, it's it's not, you know, there's far more dangerous industries to disrupt, right? Like you disrupt like the airline industry by coming out with a way to teleport. Like, all right,

that's it. Like, the airline industry is done, right? Like, but software can be rewritten. That's the whole point of software. It's software, you know, and so it's code. Um and so you know you're arguing that say some code is gonna interrupt an entire sector based on code and it's like maybe They'll just adapt maybe they'll come up with some like hybrid model. So that's my like terrible analysis of software. Um but I I did read I can't remember off the top of my head but I was reading some statistics uh maybe on Zero Hedge last

week just about how badly software has gotten crushed. I think it's the IGV right which is the the software index. Let's see. Yeah, that's the expanded tech software sector. So, that's down uh 24% over the last six months. It's down 20% this year. Uh still up over a fiveyear period, but uh yeah, I don't know. If I had to pick one at a PE at a blended PE of 30X, it looks like I I would if I had to choose, I would be more inclined to buy software than sell it here. That would be my,

you know, but again, I'm not a financial adviser and generally have no idea what I'm talking about. I'm a former bartender. All right. Well, look, um, we got to start wrapping up here, but let me just ask you this, Chris. Um, you're right about a lot of topics. Um, is there anything else that's kind of burning brightly on your radar or your interest set that I just haven't thought to ask you about yet? Um, I'm just looking here at like the first page of my uh of my blog and I Think we pretty much covered

everything. You know, the the only thing I would recommend actually is that if you go to my if you go to my page, my blog page, the free article, you don't have to like read you don't have to pay to read it. Um, it's called AI now with less circle and more jerk. It's such a great title. And that was a human thought of title, too. You know, I didn't run that one through AI. But if you go in there, there's a link to Michael Bur's podcast from December 8th of 2025. And one of the

things he talks about in that podcast is the similarities that he sees in the tech boom where fiber optic buildout got way ahead of what was needed and how that compares to AI and how he thinks the buildout in AI now is getting far ahead of what we need. Uh and this goes back to you know when companies start reducing capex is the market just going to get crushed. Um, and that's a worthwhile listen if you want to kind of keep a pulse on tech, but the overall markets in general because that's what that's what's

driving everything now. Okay. I I actually haven't listened to that that interview yet, but I definitely will. Does he get into at all the circular financing concerns of the Industry as well in that discussion? I don't I don't remember with specificity whether or not he does, but it's certainly worth mentioning. Yeah, that you know, again, it's the same deal in private credit, right? Like one guy loans to another guy and his collateral is worthless and he loans to another guy and his collateral is worthless. And you know, these companies have these companies have hundreds of

billions of Yeah. And we have companies with like hundreds of billions of dollars of these partnerships down on paper uh that nobody knows whether or not they're going to be able to actually affectuate them. So, you know, it's worthwhile to note. All right. Um well, Chris, look, thank you so much for coming on. Great update. Again, thank you for being so generous and going through the things where you see opportunity here. I love that it's not just about concerns, it's where opportunity lies. Um, for folks that would like to follow you and your work, you've

already mentioned it once, but where should they go? Yeah, it's just uh quote the raven.substack.com. So, quo t the raven r-en.substack Substack, su t-ac.com, or just go to Substack and search for qtrsfring finance. All right. Well, Chris, when I edit this, I'm going to put up the URL right there on the screen so folks know where to go. Folks, the link will be in the description below this video, too, so You can get there with one click. I got to ask Chris, so Quote the Raven, obviously, um, a reference to Edgar Allan Poe. Just curious,

why' you pick that one for your uh, for your your subst? It was a long time ago. That was the moniker I was using since like 2012 when I started writing on uh uh on finance kind of anonymously. There was no real reason for it. I I just needed to pick a moniker. I was an English major. You weren't like an English major or I was an English major. Yeah, you were. Okay. Well, there we go. Yeah. So, I did read some Po and I, you know, I actually like, you know, some of Po's stuff,

but there's no like, you know, no crazy like allegiance to him or big crazy story. I was filling out a form for Seeking Alpha and they were like, "What's the uh you know, what's the pseudonym that you want to use?" And I was like, maybe I had some book or some [ __ ] on my desk like the Raven, you know, like whatever. I didn't know, you know, 13 years later that was going to be my name of everything, but now it is what it is. So, yeah. Well, no real good story. Well, congratulations on

the success and look, you're a great writer, so there's something you got in common there with Po and obviously the results show that given your the the extreme popularity of your your Substack there. Um, but it is just interesting and kind of fun to know that you got a literary background. Yeah, for sure. Yep. All right. Well, look, Chris, again, can't thank you enough. This is, uh, wonderful. Look forward to having you back on again soon. All right. Sounds great. Thanks, Adam. All right. Well, now is the time in the program where we bring in

the lead partners from New Harbor Financial, uh, one of the endorsed financial advisory firms by Thoughtful Money. I'm joined this week as usual by senior partners John Lodra and Mike Preston. Mike, let's start with you. um love to hear any key takeaways that you have from the conversation uh just had there with Chris and obviously we'll talk about what the market's done over the past week. Um I guess in particular, you know, the thing that seemed to be burning brightest to me on Chris's radar is the um the mounting concerns that we're starting to see

in the headlines around private credit. Um are you guys noting the same at New Harbor? And how concerned are you guys about how this could potentially metastasize from here? Yeah, hi Adam. Thanks for having us. And um Chris certainly talked a lot about private credit there maybe being a canary in the coal mine. It's certainly something that we're watching here and noticing. It's hard to tell whether this is going to be a contagion or not or is it just a minor nuisance? I think Chris said something like the on a scale of 1 to 10,

if he thought this was going to cause problems or Credit problems, he thought maybe a 9 out of 10 likelihood. But in terms of a contagion, I think he said five or six, something like that. So, yeah, more like it would beat up the the big private credit companies, but but not so much potentially spill into other parts of the system. Yeah. So, let me just share a couple quick charts. These are on a daily basis. Here's Blue Owl Capital, and they had, I think a week or two, said they're going to start to gate

redemptions, meaning you can't take money out of their fund. uh OBDC I think is their fund and it's been in a big downtrend. But take a look at some of the other big names. KKR for instance has been in a big downtrend year to date. I mean that's down a lot. That's what 30 40% year to date. And uh BX here Blackstone way down. Even if you take a look at the EyesShares financials, you can take you can see that it's been a really negative sector. I mean, this used to be in our model um

last year. We got out of this somewhere around 5152, maybe 4 months ago, something like that, cuz it's been in a downtrend a few months ago. But, so there's certainly some concern about financials, particularly private credit. What's it going to do? I don't know. I don't think anyone really knows. Um it's something to watch, something to be concerned About, particularly in a hyper overvalued market. I if I can I'd like to just share a couple basic charts about valuations because Chris started and said you know what after all these years of money printing here we

are at a you know at a point where maybe a PE of 20 is deep value. I know he was being sarcastic but people like us and individual investors don't even know what way is up sometimes anymore because valuations have been so darn stretched for so long. We just don't know if this is the new normal and you still need to operate in this environment. So it's tough. So let me just share that chart. Actually two quick charts here. Very very basic charts. This first one is the Schiller PE. Professor Robert Schiller of Yale famously

created this. It's a 10-year smooth inflation adjusted price earnings ratio. This goes back to 1880. You might say that the average on this is 10 or maybe 12, something like that. Prior bare markets didn't clear until the single digits back here in 19 29. Actually, that's this would be after the the big um right here, 1932. After the big Great Depression, cleared at maybe five or six back here in the 80s, we hit a low at maybe six or seven. But Starting in the '9s, we went way off the reservation. We hit a PE of

45. We did come back to 15 at the bottom of the housing crisis, but that was rescued. And we were here for what felt like a millisecond. And it just this is not a good timing tool, but it shows you how overvalued this was. But take a look at this chart, which is John Husman's chart. This one's a few months old, but I just had to go back to John Husman's work because his work is so good, and show you going back to 1928 what his measure of valuation shows. If you take a look at

this green line, this is what the market would have to be at to yield 10% future returns. And if you look at what happened in the late 90s, the blue line is the actual S&P index. And so we we came out of norms in the late 90s and we never went back. This is the kind of point that I want to put across here. The low of the tech bubble did not touch normal valuations. The low of the housing crisis touched normal valuations for what felt like a millisecond and then the world went into infinite

QE and here we are again. This is a few months old. We're actually a little higher now. We'd Have to fall to like maybe 17,800 2,000 on the S&P to have 10% return possibilities. Again, well, I think you can do the math on that. That's a drop of over 2/3. And in fact, we think that's what likely eventually to happen. But what Chris was talking about there is, yeah, what kind of faith should we have? I think, if I could put it in my own words, should we have faith that we're never going to reach

these norms again? Or should we have faith that math really does matter? So, yeah, I I think we fall into the into the latter camp. We think that valuations do matter. That doesn't mean we're not playing the game, but we're playing the game relatively conservatively. Okay. And uh I'm trying to remember from the last time we talked um I know that the guys at RAIA I believe have recently um brought down their equity exposure a little bit. Um but they it was at a pretty high level for them. Have you guys reduced any of your

equity exposure yet in the wake of uh recent things that have been going on? We've been at about 47 and a half% for a few months. So I'm going to share another screen while I'm answering you here. we've been. So, the first thing you want to do in in any environment to Set what what your risk exposure is. We're at a hyper overvalued environment. Our risk exposure set at 47.5 on equity excluding the gold stocks that we have because we count those as different. And that's because we know we might be wrong about the fact

that we think that presently this market will likely hold up here for a little while. Nobody knows what's going to happen next, but we have a set of indicators we trust. So, here's the S&P. I'm going to zoom in a little bit on a daily chart. Take a look at the S&P right here at like 6,800. You could go all the way back to late September, early October, and the and the S&P is trading at the same place it was 5 to 6 months ago. That's driving people mad a little bit. It really has gone

nowhere. The NASDAQ is similar. And the S&P over the last few months, year to date, has been tracing out this big triangle. We recently broke to the downside on this triangle. Is this going to be a fake triangle breakdown and and we reverse up or not? We don't know. We're going to have to wait and see. But to answer your question about risk exposure based on valuations, we're hideously overvalued. And we have our suite of indicators which have been in green for quite a While. Over the last week, they turned red. Because of that, we

added S&P index put hedges down here at 6,500. So, if we get a big crash here, which we don't know, we really can't tell. I don't think that's going to happen, but we'll see. 15% of our exposure will come right off the top because our index hedges are at 6,500 for 15%. That'll drop us to 32% overnight. And then from there, we'll probably start taking stops on our sectors and reduce from there. So, unlike a lot of other managers out there, we'll be reducing into a downturn or crash versus saying don't ever sell. So that's

where we stand right now. I'll stop sharing. Okay. So So Ba basically your your default isn't a big breakdown from here, but you're concerned enough about the potential of it that you've you've bought some insurance there at 6,500. Yeah. You know, one thing that's tough about this business and for individual investors out there is you have to have some kind of bias because the truth is there's no set of indicators that will just print money. Wouldn't it be nice? You have to set your exposure based on the environment. The environment is relatively risky. So, our

exposure is low. From there, it becomes tactical. If I had to guess, I think we might actually have had a false breakdown and springboard higher. You know, Chris said that if the Iran situation was resolved, he didn't think that the market would react. I kind of disagree. I think the market might literally react and break into new highs, that could even cause some type of blowoff. We would welcome that blowoff because frankly I think this market has a date with destiny ultimately to for a long bare market and so we're we're kind of in this

false environment where everything is stimulus stimulus stimulus and so people are a little bit going crazy I think watching all this. So we don't have to guess overall we added our hedges on. If we get a crash we'll be okay. If we get a blowoff we'll know what to do and we'll ride some of that as well. Okay Mike, do me a favor. pull up that chart just one more time. Um the the question I want to ask you, you know, you you we've talked about this a fair amount in the past uh couple times

you guys have been on, but the market hasn't done much since uh September. Do me a favor, just pull out a little bit more there if you can. Sure. And I can even go to weekly. Maybe it's going to be better. Here's a weekly. Yeah. Yeah. Yeah. Okay, that's actually great. So, at what point do you stop Thinking, okay, this market's likely consolidating and, you know, it's it's going to eventually break out to the upside and we'll get new highs versus this looks like a topping process and and and I don't think we can say

it definitively here, but you can definitely see now it has rounded over um unless prices go up high pretty quickly from here. Um, and you know, it's done so over the course of five months or so. Um, so at what point do you start getting concerned that like, okay, this thing looks like it's it's heading down. I'd say the last swing low here, Adam, you know, right back here, 6,500 back in November, we touched 6,500. This big horizontal red line is at 6,500. That's why our hedges are at 6,500. If we have a meaningful break

and let's say a few clo a couple closes below 6,500, I would say that we'll be a lot more concerned. But by then, as I just mentioned, our equity exposure will automatically be lower. Furthermore, we'll probably take some stops and because we don't really want to say never sell like the rest of Wall Street says, we don't want to be adding on a downturn because we're expecting the big one, quote unquote. You know, going back to some of the valuation charts, at some point Something big is going to change and the world's going to figure

out QE doesn't fix things forever and the market could lose 2/3. In fact, it will likely lose 2/3 as we go through the final few years of this fourth turning climactic cycle that we're in. And so, we don't want to mess around with the big one. But at the same time, take a look at this chart. We're like three 3% off. what this is 220 points um between here and the high. That's 3%. One day or two days and we could be busting through to new highs, right? And so at this point, if we have

a big uphammer on a weekly or daily chart even and we come through new highs, I'm going to say that some kind of bullish blowoff is probably in play. Particularly if you see a few hundred points in a short period of time. If on the downside we come through 65, well, we're probably done. we're probably done for maybe for for a long time. All right, thanks Mike. Um all right, John, I'm gonna pull it over to you here. Um so we have, you know, a couple of potential downside triggers here and obviously private credit's one

and would love to hear any thoughts you have about that. And I guess maybe a question for you is is sort of similar to what I asked Mike There. what at what point would you start really getting worried about private credit becoming you know something that could cascade into other parts of the market and start pulling you know things down with it. Um but you know we also we've got the war going on and yeah let's all cross our fingers and and hope that it's over quickly. uh but it might not be and certainly investors

have been really worried about um what a sustained uh rise in the price of oil could end up doing to the economy overall. Um and you know I'm sure I could pull up some other concerns there. I think I I mentioned to Chris uh you know we've got data on both sides but the latest payroll uh data that came out from the BLS was pretty concerning. So, um, h how how worried are you about or or are you worried about any potential pins here that could really prick these borrow from Chris pornically pornographically overvalued asset

prices? Yeah, thank you, Adam. And I think Mike did a great job covering our our take on things. Uh, uh, I want to talk about private credit in just a moment. Um, but let's talk about and and to to be completely honest and humble here, um, I think Mike would agree when I say the Last 15 years has probably been the toughest years we can imagine as a fundamentally uh, dataare investor. When you look at the valuations, valuations are not a timing indicator. They never have been, they never were, and they aren't now. But the

degree to which the the usefulness of valuations have been um timely um exercisable has has been greatly uh you know interrupted I'll I'll say at least um so you know you could you could probably make a fair case that just on valuation and loans you know 0% equity exposure but that would be exactly the wrong thing to have been. So that's why you know we we rely on a whole bunch of other stuff beyond and the way I would think about valuations is it's kind of like an analogy of uh you know at some point

markets will fall the elevator will drop and you know a prudent investors got to decide how many floors up they are comfortable being when that happens you know do you want to be up 100 stories or 10 or five right that's a simple analogy and and our way of expressing that is just being somewhat underweight equities and even better hopefully underweight equities but the equities we're in are are ones that are you know outperform performing um the broad market and that's easier said than done but it's certainly what we try to do with our systematic

tools. Um you know I uh we Are in a point of indecision. You Mike just showed up the S&P chart and it's kind of like this sideways range and traditionally the the logic is that's going to break one way or the other and until the trend is broken the the assumption is the trend is going to be kept. Uh Mike talked about some key levels that if we saw it taken out would be a a further affirmation to us that things are not as as hunky dory with uh stock the stock market as as one

might think. So we're not complacent at all. We are very hyper focused and vigilant. But I do want to talk about you know so even though the S&P has gone nowhere uh doesn't mean there haven't been opportunities. And this is this kind of echoes off of some of Chris Iron's comments. You know energy for example here's a oil and gas services companies. They have absolutely exploded higher, not just since the war, but actually they've been rallying since uh the September October time frame when the S&P basically stalled out. Okay. Um you know, things like uh

global uh base metals companies, let me just pick up another ticker here that follows those. Um they've done tremendously well. Emerging markets on a relative basis have done very well. Right? Right. So there's been areas of strength even though the market has been frustrating frustratingly in a cap weighted S&P Context frustratingly nowhere. But what does have as concerned is some key sectors of the market have been really really weak even though the market broad market has gone nowhere. Look at the financial sector and this we'll talk about the private credit in a moment because I

think it's certainly starting to flow through to the financial sector. Generally when financial stocks struggle it's not a good sign at all. Okay? Doesn't mean the world's coming down but it's not a good healthy sign. Look at um retail stocks um you know as a sign of consumer health. Those have started to falter quite quite dramatically. Look at home builders for example. Um they're falling out of bed. These are the cyclical type of sectors that you don't want to see turning over if if you're going to have a durable follow through to an uptrend in

the market. Um so that that's just some comments on the stock market. And I, you know, I want to talk talk about private credit, but if I'll pause here to see if if you want to talk about any of that, Adam. No, I think it's all good. Um, I I do want to connect some dots um from what you just showed to private credit. So, why don't we go to private credit and then we'll we'll do that. So, um, you know, I'll I'll be honest. We were afraid of private credit years ago. You know, we're

not we're not we're afraid now, but more importantly, we Were afraid a couple years ago. And there were a lot of good, you know, headline reasons why we felt that way. Um, you know, you look at the private credit um, kind of class. The loans that are made by in that class uh, you know, generally lack the kind of financial covenants that bank loans and traditional bank lending um, provides, basically protections for investors. And it's probably a year and a half now. And you know, our industry does a great job at pitching products, especially when

they're, you know, hot and they offer a nice juicy yield, which private credit certainly was, you know, a big selling point selling point there. You know, hey, look at these great yields on these, you know, private fun, you know, credit, you know, loans. Isn't that great? Wouldn't you like 8 to 10% a year? Well, you know, there there is risk and we're starting to see that now. Um, but, you know, we we get pitched by a lot of financial product companies. uh we have to keep a pretty pretty u solid lock on our doors and

our phones to be candid um you know because there's not a day that goes by where we don't get pitched on a lot of stuff and we've been very reluctant we've raised a lot of these issues with with a lot of those firms and I recall being at a a investment forum uh held by a very large institutional manager one of the leaders In the private credit and bond investing space in general and there's probably 300 adviserss in the room I I asked the question you know are you concerned about these lack of covenants the,

you know, this and that, the the the the the headline talk about public and private marks to markets not being the same. And they kind of sloughed it off. They said, "Yeah, yeah, you know, yeah, there's, you know, Covenant light loans, but, you know, at the end of the day, they sloughed it off and said, you know, but if you're going to invest in this space, you want to be with a big company like ours because when it comes time to to negotiate with these borrowers when they're up against the ropes, we're going to get

a better deal." So, it's kind of like almost like a tested admission that that day will come, but don't worry, be with us and we'll get you the best deal. It it blew my mind. So, we've been we've been out of the space. We haven't succumb to it. So, we're not worried about it in that our clients aren't invested in it, but we do we are worried about the contagion. And it's impossible to put a a a bound on that other than I would say, as history would attest, generally speaking, it's worse than it appears

or worse than the headlines would want you to believe. I'm going to share um back last May and and it's not just the private credit. I'm I am a little bit more than a little bit concerned about traditional financial Firms having a contagion. So, this is a study that the Fed put out last May, May of 2025, and it's entitled bank lending to private credit. Let me see if I can make that a little bigger just just in case uh uh you can't see it. But the the title says it, bank lending to private credit.

So, there's some great charts in here, you know. Let me scroll down. This first of all this is this is what happened to private credit through different you know BDC's private debt funds and and you know you can see there's been an explosion and one timehonored uh lesson is when something blow you know increases dramatically in the financial product realm it usually is a sign of being overdone and and you know that's just one data point. So uh you can see the the absolutely stunning growth there right but then you see the uh the bank

exposure to that this is uh where was it? There was a chart in here somewhere. I might have jumped over it. Um, oh, that is that's the bank. That's the bank. Uh, you know, so essentially what happens here, traditional banks lend to these private credit firms who in turn lend out to, you know, private credit b uh, you know, borrowers. Um, yeah, this is what I was saying to Chris, right? I mean, so you know, some people say, well, don't worry, it's going to be contained to the private credit space. Well, it's like, no, these

private credit companies get a lot of their loans from the traditional banking System. Exactly. And, you know, I don't know if it's a loophole in the system to get, you know, I don't want to be that conspiracy theorist, but I think there probably is some element of the the capital rules and and kind of the restrictions that were put on lending in the wake of the financial crisis. You know, I think instead of banks lending directly to borrowers, they they found happy intermediaries in the form of the private credit funds. So um I wanted to

share that um you know what we have seen a lot you know another thing that has concerned us you know the again back to our industry's uh mastery of putting out products a lot of the retail private credit products are built on what are called the secondary market do a quick Google search you know private credit secondaries essentially what this is it's a way for either general partner private credit funds or the limited partners that invested in to uh achieve liquidity on their investment by essentially selling it to secondary markets. And a big part of

that secondary market are retail investors. Again, I don't want to go so far as to say, you know, criminal acts or anything like that, but there is this notion of the small guy holding the bag while the big guys are trying to get out. And you know, I think it's not um coincidental that uh um last August There was a presidential order called the what was it called the title you know I think is does it does it full justice democratizing access to alternative assets for 401k investors. Basically the under the opaces of hey let's

let the little little guys get access to these great you know private investments that have only been reserved for the big guys. Let's let them start to put it in their 401ks. We shook our heads. It had all the markings to us of let's let's find the retail small mom and pops to hold the bag. So yeah, let's let's take all our underperforming stuff and give it to them. Yeah, I I don't want to get overly alarmist, but I do think there's probably much more pain here than the authorities talking heads want want to communicate.

It always is that way. It was that way in the high housing crisis and the things like seeing the financial sector as weak as it is tells me that there's probably something to worry about here. Just like in the almost year leading up to the the you know the subprime becoming a problem financial stocks were struggling you know even though the market was doing great but you know pretty much all of 2007 you look at the financial sector even going back to late ' 06 I think the financial sector was Was struggling in the stock

stock prices. Why? We didn't know until, you know, subprime became a household name, but that's the market kind of told us. So, okay. Um, I'm looking at the time here. John, I want to come back to you with a question about kind of what to do about all this, but Mike, if we can, let's just do a really quick dial through what's going on with the precious metals here. Um, you know, from from my perch here, um, uh, still a little TBD, but it is looking like we staunched the bleeding, um, from the the big

correction that they had from their highs. Now, we had expected that, you know, they were going to go through a pretty big correction because the price action had just gone exponential. Um, but uh what what what are your charts telling you about where you think the precious metals are likely to be heading from here? I'm on mute. I'll try to keep it really brief here, Adam. And uh hopefully you can see that now the chart. Yep. Of SLV, which is an ETF that follows silver. Now, chart reading is a little bit hocus pocus. I realize

it doesn't necessarily tell us exactly what's going to happen next. In fact, it never tells Us exactly what's going to happen next, but at least it can give us an idea. This purple line that I've drawn is a rough trend line that silver seems to be respecting. We had a big blowoff here, and you almost have to just take that right out of the equation because, well, I think we all knew it was kind of crazy. It's kind of like what oil just did. You know, oil just went crazy and then came came on back

down. But this is still in an uptrend and it keeps hugging $85 to $90 spot. I mean, who would have thought that we would be settling up here a few years ago or even last year we were talking about a big triple top breakout of 35 and now we're settling at 80 to 90. In my opinion, you can almost throw out this point and just take a look at this. This is doing some some good things here. all this consolidation if I move this to let's say the weekly chart we had this big parabola but

this back and forth going on between 70 and 85 on SLV which is basically what 80 maybe to 95 on silver looks pretty good to me and therefore I think it's building I think it's building I don't think it's like the other big tops like 2011 1980 we Seem to be recovering pretty well and and on down days I'm just noticing watching the tape that the miners are being bought up. So, I know it's talking our book a little bit because we're still 10% miners, but I I do believe and we actually have a trading

piece in SLV as well. I do believe that these names are likely going higher. And so, let me just take a look at SIL for a minute here. Sil down a little bit today. This is a silver miners. But if I back this out to let's say a weekly chart, we can see that SIL went from 40 to 80 last year. So it doubled. And Chris said he's also positive of the miners. He doesn't think that we'll have the same performance. I'm not so sure. I mean, maybe we go 80 to to 160 this year

or maybe we only go up, I don't know, 50%. But the big bull markets, I've said before, usually double once and there's a big double off the base. Normally there'll be another double before this thing's done. I can't imagine that we have one year out performance and that's it. And particularly if gold and silver hang in there. Going back to the daily chart, let me bring up gold. Look how well this has been hanging in there. We had this blowoff top and it's just been straight uptrend. And this is gold here at 5100 or 5200.

So I believe these gold stocks have 50 To 100% more in them. I don't know that that'll happen this year. Um, in in the metals themselves, uh, I'd continue to hold as long as your allocation is not out of whack, you know. So, I I think it's very bottom line very positive. Okay. And and as we're seeing, um, the earnings start to come in for these mining companies with precious metals prices way higher than they were a year ago. Um, is that starting to catch Wall Street's attention, do you think? I mean, do do you

or do you anticipate the miners to catch another bid here soon as Wall Street just can't ignore their heightened profitability? Yeah, I mean, in general, the the earnings were really good. You know, the market seems to have anticipated them because in general, these stocks did not have huge gap ups. In fact, today I'm looking at Harmony Gold, HMY, they actually are down 12% on earnings. So, I don't know if that is uh I don't think that's anything to be worried about industrywide. I haven't had a chance to read that. I would say that most of

the earnings uh surprises have been up. It seems like the market isn't really convinced that the metals are going to hang in here at this level. But with that chart like I just showed you with with silver 80 to 90 and certainly if it Continues to hold that level and or go higher, I think the market's going to have no choice but to be convinced that these these multiples are going to be worthy of expansion and the the the record profits are probably going to be here for a lot longer and that means higher stock

prices. Okay. Well, we'll have you tracking it here for us on a weekly basis going forward. Mike John, coming to you for a wrap-up here. Um so you know obviously lots of reasons to be concerned about um you know potential risks to the downside here. We've talked about a bunch of them with Chris and here with you guys as capital managers um uh you know there's a lot of people watching this channel who um probably had a pretty good 2025. um are probably uh watching the action here in 2026 and starting to feel a little

bit nervous, but I'm going to guess maybe most of them haven't really changed much about their portfolios since the end of last year. Um, is this a good time for, you know, the average investor, folks watching this channel, ju just to kind of do kind of a an audit of what they're invested in and um, just, you know, take a fresh appreciation of the risks and just ask themselves, hey, should I Be taking some maybe more defensive measures in my portfolio um, than I had coming into this year? Yeah, Adam, I'm not going to mince

words. Absolutely. Yes. And that's not synonymous with freak out over headlines. I mean, yesterday there was some big market moving things on a a tweet that was and then got taken down in terms of, you know, escorts of, you know, vessels through the straight of Hormuz. Uh but no I mean again going back to the valuations we just talked about you know even Vanguard uh last year 2025 you know the the profit of passive investing you know index investing basically said hey valuations are stretched it would be prudent to think about underweighting equities what you

otherwise might be. So, you know, even Vanguard has has kind of acknowledged not with perfect timing, but from the the standpoint of a person's life, a couple's life, a household's life, and what they need to do. Uh, this is not a time one of the biggest dangers or or it's not the the market risk. It's not the the the fraught, you know, issues in the market. It's it's oftenimes one's own psychology, a a fear of missing out. you know, this idea that geez, if I miss the The 10 best days, I'm gonna be forever doomed.

You know, there's so much that that that that's a big part that most individual investors really need to get a handle on. A do I need the returns that I'm fearful of missing out on. Everybody wants returns. Let's let's face it, everybody wants the returns, but do you need them? And you know, you're not there's not a god-given right for more return if you take more risk. In fact, there are parts of the market cycle where absolutely that equation gets turned on its head that more risk just invites bigger downside, bigger losses. Um, that's not

fiction. It's not uh it's not something making up. It's actually in the data. You just have to understand that there are parts of the market market cycle where that coin flip is very negatively weighted uh and there are times where it's very positively weighted and valuations are just one of those things that you know tilt the odds on that coin flip. So absolutely yes. Review your exposures, review your allocations. Don't freak out, but bring it back to your own situation and be at peace with some level of regret. You're always going to regret something. You're

going to regret not buying enough, buying too much, selling too soon, buying too soon, selling too late, selling too early. That that's part of the game. There is no such thing as as perfection here. So come to come to Grips with that. That's going to be the most important arsenal in one's psychological and investing toolkit more so than tactics or strategies. All right, very very well said there, John. And um I'm getting a sign here from my computer that for some reason um it looks like the memory is getting real low. I think my video

might even be a little bit delayed here. Um so we'll wrap things up real quick. Hopefully this works well. Um, folks, uh, if you'd like to see Chris Irons come back on this program again soon, please let us know that by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. Um, obviously if you would like to get some help in doing, you know, what John just mentioned there, um, highly recommend you get that from a good professional financial adviser, um, if you

don't have a good one who's advising you, consider scheduling a free consultation with one of the ones that Thoughtful Money endorses. These are the firms you see with me on this channel week in and week out. Perhaps you'd like to talk to even John and Mike themselves there at New Harbor. To do that, just fill out the very short form at thoughtfulmoney.com. Only takes you a couple seconds. These consultations are totally free. There's no commitments involved. It's just a service these firms offer to be as helpful as possible. Um, and a reminder that Thul Money's

spring online conference is just a little more than a Week away. You have a couple days left. I think like three uh after the day this video airs to buy your ticket at the last chance to save price before it jumps up to the full price. Um we've got our best uh faculty ever. I won't go through the whole list because it's quite long and I'm worried about the memory lasting here, but you can find out all the information about the conference and buy your ticket over at thoughtfulmoney.com/conference. And if you are a premium subscriber

to our Substack, check your email. You've got a code for me you can use to get an additional $50 off whatever the ticket price is when you go to that URL. Um, John and Mike, gentlemen, great week. Can't thank you enough. Very interesting times. A little scary. U, but thank you guys for keeping us on track every week. Look forward to doing this again with you next week and we'll cross our fingers that hopefully things get better for the market outlook than worse from here. But again, guys, thanks so much for doing this. Thank you,

Adam. Always a pleasure and we'll see you soon. Thank you, Adam. Nice talking with you and enjoyed it very much. See you soon. All right, everybody else, thanks so much for watching. You don't need to be a statistician or an actuary or, you know, a CFA level Three to know that the front page of the Wall Street Journal is now every day showing another private credit fund under stress. And so, you know, I think we're on the doorstep of of a credit event. Welcome to Thoughtful Money. I'm thoughtful money founder and your host, Adam Teard.

With the US at war with Iran, oil prices spiking, private credit likely imploding, and payrolls sinking, it's perhaps understandable that some investors are worried that the world is going to hell. To put everything in perspective for us today, likely using more than a few f-bombs himself, is Chris Irons, author and publisher of QTR Fringe Finance, which has become one of the most popular financial newsletters around. Currently sitting at number 27 in the list of top 100 financial substacks worldwide. Chris, thanks so much for joining us today. Happy to be here. Thank you. Uh well, it's

really fun to have you back, Chris. Really enjoyed your inaugural appearance on this program. Uh suffice to say a lot has happened since then. Yeah. Um and uh you made a great statement last time about stocks being pornographically overvalued. I want to ask you in a bit if we're still at that stage, but before you know, I just kind of gave a brief litany of of some of the headline worries that are out there Right now. From your perspective, just how bad are things? Is it is it really all that bad or like most things

in life, is there more nuance at play? I mean, how bad are things or how bad do they look? Because they don't look that bad, right? Like nominal price of the stock market continues to go higher. The valuation I mean, we've come off a little bit here, but we're pretty much as stretched in terms of valuations as we've ever been historically. You know, I I don't know if the question is there things are bad in the sense that the way things look aren't the way that things are. And that's the story we're kind of seeing

in private credit right now. You got a whole sector full of mismarked books and level three accounting that needs to be adjusted and is starting to be adjusted. And as that's happening, you're seeing people rush for the exits in concert together. And you're seeing redemptions getting gated and, you know, bigger and bigger. Last week it was a $26 billion fund. Yesterday was a $33 billion fund. You know, getting 7% redemptions. And so, uh, the shift's kind of hitting the fan in private credit. The overall market's the same deal. It's like, how does it look? Well,

it's inflated from money printing And uh, and it's being, you know, bid up by the passive bid and the options market and money printing. Uh, essentially, you know, the passive bid sprays uh, retirement capital to a market weighted index. Um and that propels the indexes higher despite the fact that market breath you know may show 70% decliners to advancers if the 30% that are advancing are the right names the index goes higher and so you know how are things I mean most people would say like oh things are good but under the surface you have

things like the cryptocurrency uh sector which could arguably be it doesn't matter if you're bullish are bearish, but it's probably the tip of the spear if you wanted to make the argument that one whole sector could be worth nothing. Um, you know, so you have a lot of a trillion or$2 trillion dollars in market cap there that could theoretically like go to zero or at least theoretically doesn't have a a floor or a bottom from any fundamental perspective. Um, and you have a long list of companies that are trading at even more aggressive valuations than

the indexes themselves are at. Um, specifically in AI, but then like you have a lot of cash losing companies that really have no business even being public or having a bid um that are trading at extremely excessive valuations. So, you know, I guess things are good. They look good, but there are significant pockets of air underneath everything. And you know, having positive real interest rates still each day kind of costically whittleles away at the euphoria in the market little by little, day by day, and limits companies ability to attract new capital or to refinance. And

so, you know, I guess things look good now, but under the surface, I mean, you could make the argument that they're not as good as they look, and that's that's what you're seeing in private credit now. All right. So, other than that, Mrs. Lincoln, how did you en enjoy the play? Um, okay. So, you know, you had used that term pornographically overvalued last time you were on. Um, obviously, you still think valuations are a big issue from what you just said. I'm just curious, you know, the markets have sold off a bit um from their

highs and they've cooled a bit during the war here. Would you downgrade your comment from hardcore porn to softcore porn or Are we still at hardcore porn levels? Not really. I think the uh excuse me I think the issue that needs to be considered more than are we extremely overvalued or very overvalued because you know whether we're at you know whether the Schiller PE is at 40 or 35 doesn't matter. What matters is whether or not we are actually going to revert back to historical averages when it comes to PE ratios and market cap to

GDP and those things. Um if we do eventually revert to those historical norms and the averages that have been set over the course of whatever 130 years or 140 years um then yeah then there's an argument that okay we do have a 50% draw down uh possibility in the future obviously before the Fed comes in and and puts a bid under the market. But really, there's also a case for, and I've written about this on my blog, there's a case for things just being different now. And I know that that's something that somebody like me

would just laugh about usually because it's a play on the idea that every time there's a bubble, people say it's different this time. And I started to kind of seriously consider Whether things really are different, whether 20 or 25 times earnings is now the new, you know, tough, you know, 10 to 15 times earnings, which would have been in the past. And the reason being is we're out of control with quantitative easing. And that was never the case from, you know, whatever the first hundred years or the first 90 years the Dow traded. So when

you want to look at historical averages and you're going to work in numbers from 1906, uh you had a market that was functioning very differently than the the way the market functions now. And I'm not just talking about structurally like you know options and trading 24 hours and the passive bid and all that [ __ ] Putting all of that aside, which is it does make it fundamentally a different type of stock market, you have unlimited quantitative easing coming at any point the market has a sharp draw down of whatever 5% or 10% at any

point. And to the extent that that's going to continue, it is actually worth asking the question, you know, is 20 times the earnings now like the new deep value? And trust me, like nobody hates hearing me say that more than me, but I do think it's a topic worth exploring. Um, I Think, you know, during COVID, I think forward earnings estimates got down to like 18 or 15 times earnings. Um, you know, CO was a pretty gnarly, nasty sell-off. Like, and in events like those in the past, you would see the S&P get close to

singledigit PE ratios. And so, you know, the floor may have just been raised slightly by virtue of the fact that the mechanics that power this market are totally different than they've ever been and they're going to be. Which is why you don't just see the stock market going in a chart of the Dow from the left side of the screen to the right. You don't just see it going up, you see it going parabolic, right? which is uh just shows the rules of the game changed, you know, once we started into the 2000s. And so

again, a better question is not are we overvalued, but how are you even thinking about calibrating this market to valuations to begin with? So Chris, I know you do your own interviews from time to time. Um, and I'm curious, have you ever interviewed Hugh Henry? Do you know who he is? No. Yeah, I do know who he is. I've never interviewed him. Um, I actually haven't interviewed Hugh either, but I would recommend that that you reach out To him even just to have a conversation off record. Um, Hugh is pretty famous, as you may know,

for basically coming to that same epiphany that you just talked about. um soon after the the GFC when the central planners rushed in with the initial QE programs and he basically you know he he had been very vocal about pointing out a lot of the the vulnerabilities of the current system but then he kept watching what the central planners were doing and he basically it was sort of like a Doctor Strange love like I just came to love uh uh I I learned to love the central planner response I He he hated why it was

going on, but he just said, "Look, but it is what it is, right?" Yeah. He's like, "It's a joke that I just can't lay in front of." Yeah. If I lay in front of it, I'm going to lose all my investor capital. And he he eventually famously sort of shut down his fund and returned money to investors and just said, "I I can't continue to invest the way that I have my whole career because I think there's been a sea change in the way that markets work." And I kind of hear you saying you're you're

potentially arriving or at least contemplating a similar conclusion. Yeah, I wish I would have arrived in it When he did because uh I would have made a lot of money, but I didn't. So, all right, then let's um I feel like we've just fast forwarded through a lot of middle ground to get get to the real meat of things here. So, okay, you write your newsletter. You know, you're you're job is to try to help your readers make better informed decisions um about their investing. Uh and obviously, you invest your own money. So, what what

are you doing with this this wrestling match that you're having right now? Are you are you contemplating going more long than you otherwise would have before or like what what are what are the investment outcomes of this? Not really. I think you know the what I try to point out on the blog is just the other side of the coin when it comes to a lot of things. And so just to try to shed what is increasingly becoming a scarce fundamental light on the markets and on companies themselves. So if you step outside of Hugh

Hendry's uh you know market circus that you're describing you know it is still worth noting the fact that you know look no matter how much the Fed prints like if you own equity in a company that's burning cash you still own equity in a company that's burning cash. I mean like you know the stock valuation may be Higher but like you know there's going to be some type of fundamentals to look at um and that's generally what I try to do and I try to explore like you know asymmetric opportunities sectors that are kind of

like uh being ignored or show some uh show promise that otherwise would not be thought of. I mean I have written about individual names. Um mostly I write about sectors in general. Um and I don't really you know I don't really give advice. Um I just kind of write about things that I think you know a lot of things I write about I don't own. Some things I write about I do own. Um you know coming into last year I was focused on nuclear energy. Uh I think we talked about on on the first podcast

gold and silver miners which obviously you know the I do like 25 picks at the beginning of the year and then I chart how they do over the year. This year I did 26 for 26. You know last year being very heavily weighted in gold miners and uranium did incredible that you know little mock portfolio beat the S&P by like 50%. this year still ahead of the S&P by like five or six% but have kind of spread around um through a couple different sectors uh that I was not in in 2025 for example Kind of

stepped a little bit away from nuclear although there's still a few names in nuclear that I still love um and still think secular bullish trend in nuclear will stay intact but also wanted exposure to oil and natural gas coming into this year so more of like a conventional focus on energy as opposed it's a nuclear uh focused focus on uh and so that's generally what I what I write about. I try to just explore uh trends that don't get a lot of play in the financial media and really I don't just want to say like

point out the bad news. I mean, the last two weeks I've written a lot about these private credit blowups and redemptions because, you know, I think you would have to be nuts to own something like, you know, Blackstone, Black Rockck, Apollo, Aries, Blue Owl, any of the regional banks. um you know and so really I do try to issue warnings in areas where I see froth and that just comes from you know my professional background of being a professional short seller for many years and you know generally being a skeptic and a cynic. Um and

so and I think you know my readers who are wonderful and I really have some nice vibrant discussions in the comments and in the Chat of my blog um you know I think that's what they're looking for. I think they're look it's called fringe finance. I called it that because somebody told me that's what my podcast was as and they told me that as an insult and I was like you know that's not really an insult. Like what I'm trying to do is look at issues that aren't being covered in the mainstream media or in

the financial media and explore them because that's where very interesting asymmetric opportunities can sometimes be. That's where, you know, a lot of times the media or the sell side will just lie to you about things. And so the fringes are kind of uh interesting areas for for me to shine lights on. And I think that that's uh hopefully what will keep my subscribers coming back. Okay. So, um, we've got this market that is, um, pretty deformed, I think you'd say, and it's a term I'm stealing from David Stockman, who wrote the book, The Great Defformation,

coming out of the GFC, things have only gotten, I think, far more deformed since then, especially valuation wise. Um and even though that may be sort of a new normal, right, that like multiples might be at a higher rate uh in this new normal than they were Before, you know, it's being propped up. And when when something's being propped up, it's vulnerable to, you know, unexpected shocks it doesn't see coming. And basically, it just means you've got further to fall down the ladder when you do fall. right now, right? The central planners will likely respond

and try to push things back up, but there'll be a period in there where there's a fall, right? And and things get rocky and painful. Um, and I think a lot of your readers and my viewers, you know, they're really hoping not to become collateral damage to to kind of airpocket moments like that. Yeah. So, so one of the things that I think you and I'll pat myself on the back and say I and a number of the folks I bring in this channel have been somewhat early to over the past year plus have been

pointing out the concerns about private credit and all of a sudden that's kind of headline news right now and you just listed a whole bunch of companies that all of a sudden everybody's starting to read about, right? Oh my god, these guys are closing redemptions and things like that, right? Um, how how big of a of a potential trigger do you see private credit credit as? Perhaps maybe trigger the next big downdraft here that the markets feel. Um, I was just talking with um, Stephanie Pomboy, like literally right Before I came on with you here,

um, Chris, and the analogy we came up with was kind of like the kid whose mom tells him to clean his room. And what he does is he just grabs all the stuff on the floor and he throws it in the closet and the room looks great, right? And he can get away with that for a while, but eventually the closet just starts overflowing and it bursts open and all this stuff flows into the room again. Um, I'm curious, is is do you think that's a decent analogy? I mean, is this something that you think

could Yeah. Yeah. And I think it's more than private credit. I think that, you know, I've been writing for like almost two years now on my blog about commercial real estate also too and how much ugly commercial real estate paper is on the uh balance sheets of regional banks. Um, and I think eventually there there's some marks that are going to have to be changed in the, you know, the uh the cows will come home there at some point. I don't know when. I think this private credit event here could actually trigger that which is

why before I when I said you know regional banks um you know to the extent that they have exposure to commercial real estate which is one area that I wouldn't want to be around. I mean look you know the the first headline that came out in December was Blue Owl uh was trying to Get some financing done for a data center and was unable to. And that was the first kind of like crack in the narrative where people were like interesting like you know is the AI boom over is it a private credit problem? Now

what we're seeing these last few days with this $26 billion fund the $33 billion fund gating redemptions. Um you know that smells to me more like a real exodus. And so yeah, I think you know private credit to the extent that they finance uh other speculative uh risk on companies uh whether AI or otherwise and to the extent uh that they're tied in and tethered to other companies with counterparties like obviously there's the potential for aftershocks. Um, you know, I I do kind of think actually on Friday, last Friday, we got that headline about Oracle

and OpenAI and their data center deal in Texas falling apart and we sold off into the close and I thought like, wow, like we're going to have a nightmare Monday. I thought like this is it. This is the narrative breaking right now. You know, OpenAI is the flagship marquee name in in AI in AI. Oracle, you know, the credits fault spreads have uh Swaps have been uh tumultuous over the last six months and people are wondering, you know, whether everybody's kind of overshot their capex marks and so it does kind of seem like a little

bit of a storm is brewing. And when that deal fell apart, I mean, I kind of thought like we were going to see private credit just lock up like we did with Silicon Valley Bank. And that that happened over a weekend, right? Like Friday after hours, I think they put out a press release saying they were fire selling assets to raise a couple billion dollars. And by Monday, they were facing $60 billion in redemptions and were bankrupt. And they brought down, you know, a couple other regional banks with them. I forget who, Signature, some other

ones. So, I thought we were going to have the same event over the weekend. And it wouldn't surprise me to continue to see headlines this week because if you're in private credit, like the signs are now obvious. it is being laid bare that it is time to get the [ __ ] out of private credit. You don't need to be a statistician or an actuary or you know a CFA level three to know that the front page of the Wall Street Journal is now every day showing another private credit fund under stress. And so you

know I think we're on the doorstep of of a credit event. Okay. So um You know psychologically once things change you know that's it right? like once the psychology breaks, you know, that's there was I think some fund that offered to tender for parts of Blue Owl's book at like a 30% discount to NAV la last week. I mean, okay, like I guess that's kind of like there's a bid out there. There's still money in money market accounts. You know, there's a couple arguments that people can make that there's a bid, but you know, I

don't know. Litigation's going to start. People can't get their money. I think more private credit companies are going to face more redemptions. I don't know when this is going out. Today's Wednesday, March 11th, but um I wouldn't be surprised if by the end of this week by Friday or maybe Monday next week, you know, there the deluge of redemptions that continues. Okay. This is going to go out tomorrow. So, this will go out Thursday. So, Okay, cool. Folks will see if that prediction comes true. People can tell me I'm wrong immediately. Yeah. So, but I

think the the big question with private credit is like how entwined is the private credit world with the rest of the system, right? Like, so in other words, are folks not going to cry that many tears if Blue, you know, gets if it stock gets hit hard or Blackstone or whatever? I don't know Too many people that love Blackstone as a company. Um, yeah, but but you know, uh, one, it's a much more opaque market, right? It's not regulated the way that public credit is uh and banking credit is. It's completely opaque. Yeah. So, we

just don't know a how how crappy the loans that have been made are, but we don't necessarily know where they lie. And and and there there is connectivity there like like banks actually do make loans to private credit companies who then make loans to other ventures that we don't know based on where their marks are. Right. Yeah. So, so how could how might this cascade is the question? At the end of the week last week, I forget who it was. I think it was a black argument with a small fund. It was like a 25

million with an M dollar fund, but they wrote it down from 100% a par to zero overnight in 24 hours. There was no there's no, hey, it's deteriorating. There's no, you know, 100, then 80, then 60, then 40. Yeah, just 100 one day, next day worth zero. And we could see a lot more of that. But yes, you're right. And things I always say that things only are laid bare and start to break and we really only see the big problems after These companies and their executives have exhausted all other options. So there is literally

not one more refinancing they can do. There's not one more way they can gain the numbers. There's not one more lender they can go to for a bailout. there's not, you know, and so when you start seeing things like gaining fund redemptions and these huge markdowns and, you know, it's really to to me I believe it signifies the end of the rope for uh a lot of these companies and then the question just like all right like what is the what's the effect on their counterparties and how many companies is this going to affect uh

completely? Okay. Um so I guess just sort of on your Defcon meter, right? Let's let's let's say one is I'm sleeping like a baby. Two is hair on fire. How concerned are you about the potential for private credit contagion here? What's the scale? One to what? One to 10. 10 being the worst. I would say my conviction level that there is going to be continued redemptions is probably like a nine. I would say that my conviction level that there's going to be contagion across the financial sector that's meaningful. uh Is probably closer to five or

six. Okay. Uh and obviously, you know, as new data comes in and I mean the key word there is meaningful. There's obviously going to be contagion. There's obviously going to be, you know, counterparty effects. The question is, you know, h how much of those are going to cascade through and where's the terminus for each one of them? You know, I imagine some of them end at the larger banks. Um but, you know, we don't know. Okay. But but in terms of like, hey, this could be the new subprime. This could be the thing that that

creates the next Well, in in sheer size, I don't think, you know, it it's going to be the housing market crash. I mean, you know, private credit's what, like, you know, a trillion and a half or something. And, you know, maybe if there's contagion, it's it's three trillion. I I don't know. I I don't know. I don't think it's it's not as big as the housing market. Um, but it's not something to ignore either. I could be wrong also too. You should just look that up before I just talk out of my ass. All right.

Well, um, and look, actually, while you're doing that, I'm just going to mention Yeah. All right. So, the housing market is about 10 trillion and the private credit market's about one trillion. So, or one and a half trillion. So, that gives you perspective there. Okay. But it's enough it's enough to stir up some [ __ ] for sure. Okay. Um, and I I I'm just presuming we we sort of started this conversation with uh the high valuations of the market. I mean, if if if there is trouble in a trillion and a half private credit

market um that may have some exposure to the main banks themselves as well, presumably this is something that could, no guarantees, but could create a market downdraft of some sort. Market downdraft that would be painful that we we'd love to try to avoid if possible. Yeah, for sure. And what'll happen is exactly what happened when the regional banks started to collapse a couple years ago. You know, the Fed will come up with some program and and bail out the, you know, some we'll engineer some like sector specific bailout. Um, but yes, you know, this could

be the fuse that lights a sharp deleveraging. You know, everybody was talking about Iran when the war started and you know, the first article I wrote was ignore Iran, like watch banks. Um because we had that two Fridays ago where banks were selling off and you know Iran that war and that volatility and oil's volatility. I mean yeah of course shops are blowing up and all hell's breaking loose and that could be the the fuse uh That definitely lights the bomb for sure. Um but I would you know those couple of days when everybody was

just talking about the Iran war was dragging down the market. What I was writing about on my blog to my subscribers is don't take your eyes off private credit. like don't you know yes everything's volatile now oil's volatile you know the overall market is selling off but the the the weather vein the canary in the coal mine and where the action I think is going to be first is the private credit okay um but just because you mentioned it so you know we are at war obviously you've got the the risk premium that war brings

to the markets um and we've had oil kind of go bonkers right I mean it was up to 120 bucks uh in the futures market on Sunday night. It's come down a fair amount since, but still quite elevated to where it was before the war. Um how right now, how much of a threat are you seeing the war to the prospects for the markets for the the greater year? Um honestly, when I wrote about it the first time, I thought it was going to be kind of quick and surgical like things were in Venezuela. Uh,

I turned out to eat some crow on that because it's been prolonged now here for a couple of weeks And there's destabilizing effects across the Middle East. Um, and generally all hell is breaking loose or has broke loose over the last week or two. But, um, I don't know. I I really stand at odds with some of my readers on this. I I don't think this is going to be a prolonged like, you know, monthsl long endeavor in Iran. I think they'll get things tidied up pretty quickly. I think you know a lot of the

Middle Eastern countries Qar and Saudi Arabia and you know all these places all have a vested interest in creating stability in the region. Um and so I think we'll probably get there more likely than not. I think you know I wrote the Sunday morning going into Monday on the the day that we had the crude oil spike that you know basically risk assets were getting sold. the URRA, which is the nuclear uh ETF, was down to 46. Um, and oil had gone up to 130. And I kind of just wrote, you know, hey, like tomorrow,

I actually wrote on Twitter, you know, tomorrow is international short oil, go long nuclear day, you know, nuclear trade, nuclear trades with the risk assets. And so that was getting killed and oil was through the roof. But when you see moves like that in commodities like you know oftentimes they overshoot the mark like Significantly um especially in the commodities market. And so the idea there was I think that's the blowoff in crude. I think the worst is over. Um and I you know I I hope for mankind but also I I guess for the markets

too that the worst is over in Iran. Um but yeah, it's definitely going to be uh something that the market is going to keep its eye on, that investors have to keep their eye on uh as well. Okay. And let's assume that you're right that um not necessarily like regime change, but but just the US sort of winds things up in the next couple of weeks and says, "Okay, we're we're done, at least done for now." Um how much of a relief rally, if any, do you expect the market to experience from that? I think

it could actually be less than people think. You know, I think that uh a relief rally assumes first off, we've had a little bit of a relief rally, right? Over the last like couple of sessions, Trump has come out and said, "Hey, we're mostly done in Iran." So, over the last 5 days, the NASDAQ hit the green. Uh over the last month, it's barely down 1%. So, we have kind of like come back up. Uh the past six months, NASDAQ's still up 4%. So, um, you know, a relief rally kind of assumes that you were

rallying on firm Ground to begin with, and I'm not so sure that that was the case. Uh, I'd actually be more I would I'd be more inclined to think that any relief rally would be shorter. um that we may have actually already even seen it over the last two days really with these comments from Trump. Um but really also that we'll have a bump and then people will realize they've returned to an overvalued market with a private credit crisis uh and you know positive real interest rates. So I think this probably gave people some pause

and put things in perspective for some people. Um, you know, it's not like after Liberation Day where they said, "Okay, like we're gonna we're going to curb the tariffs and everybody just gung-ho back in." I think I think we're on shakier ground than that now. So, I wouldn't be betting all of my money on a huge relief rally here and, you know, the S&P to go to 7500 overnight. Okay. So, the the vibe I'm getting from you, Chris, is you're kind of defensive right now mentality-wise when it comes to the the general markets, which yes,

we might be in this new normal where everything is kind of, you know, Eternally propped up, but there's a lot of things that are potentially weighing on the market in the near term. Private credit being at the top of your dance card there. I'm presuming you're a little bit more defensive than normal. Um, I'm curious, where do you see opportunity right now? like you mentioned a few things like you increased your exposure to um fossil fuels. You clearly still like nuclear a bit. I think you still like precious metals and the miners. Uh but tell

me if that's wrong, but where where else are you seeing opportunity this year? So, you know, I've written on my blog my 26 stocks that I'm watching for 2026. So, you can get that on my uh Substack QTRE Finance. Um, like I said, that portfolio this year is at least outperforming the S&P by maybe 4% at least last I checked. Um, you know, that includes like individual tickers and ETFs, but really generally from a general sense like I I'll give you an idea like like I said, I stepped away from completely being a nuclear when

it comes to energy and diversified more to nuclear and oil and gas and LG. I like energy. I am defensive. I like consumer Staples. I like the VDC. you know, they had a tough year last year. I like utilities, like anything that's boring that pays a yield. Um, I'm I'm good with I like the ITA, which is the uh aerospace and defense ETF. I like the IHK, which is the cyber security uh which has just gotten killed with software. you know there there's a big difference between AI kind of replacing people that are using Photoshop

and Adobe getting crushed and uh you know saying oh all these cyber security companies are going to be worth nothing. Uh I think that is an opportunistic sell-off that over the course of the long term will pay off in something like the IHAK um which is you know companies like Palo Alto and uh Crowd Strike and uh the the others because you know the AI is not going to it's not going to harm their business it's going to help their business and uh you know cyber security is really going to be the future because wars

now and in the future a lot of them will be fought online and through fiber optic cable and you know just says there's a hot war, there's cold war [ __ ] that goes down and it's not the 60s anymore. You know, it's done via the web. So, I like those names. I think Psychedelic stocks um are an interesting niche in biotech that nobody's paying attention to that I think could get a good tailwind from clinical trials that are coming up uh clinical trial results that'll be coming up at the end of this year. And

they also have uh an administration that's probably more favorable to them now than the last few administrations with RFK at the helm and looking into alternative therapies and medicines. Um so the PSI is the uh ETF for the psychedelic names. Um and you know aside from that there's individual names that I like. I've written a lot about PayPal. That's not a huge surprise. You know that's deep value in my opinion. 5 billion free cash a year or cash from operations a year pays a dividend. They're buying back stock. It trades at eight times earnings. It's

still growing a couple percent a year. It's a mature business, but it's not a dying business in a death spiral. And that's how the market is pricing it. It owns one of the best fintech assets in the world and Venmo. So, uh I love PayPal. Uh in nuclear I like Centress which is the only uh uh uranium enricher domestic uranium enricher in the United States. Uh Howard Lutnik was ping around with their executives at one point uh last year and I think that if the US looks to protect uranium enrichers like it has uh you

know rare earth and those types of things um centrist is the obvious candidate to pull closer to the government. Um, plus they're the only ones that do it in the US. And so, um, and I think that that's going to, you know, with recommissioning all these nuclear sites that's happening, the increased demand for uranium. Um, so I like LEU in, uh, in nuclear. And then, you know, other than those sectors, there's a bunch of individual names that I wrote about. Um, little asymmetric opportunities that I think here and there. Um, yes, like you said, I

generally also like gold and silver miners. uh still although not with the same aggressive nature I like them last year. Uh you know this is kind of a breather year for them so far. Um and I continue I I expect that they will move up but not with the pace that they moved up last year. So uh so yeah that's a general idea of where I'm at. I I would like to say my positioning is defensive like you know I'm not super heavy in AI Stocks. I'm not super heavy in crypto. um you know, consumer

staples, utilities, defense stocks, um anything that generates cash and pays me yield consistently. Um and like I said, little opportunities in psychedelics and a couple other places that I've written about. All right. Um I so appreciate you being that transparent, Chris. Super helpful. Um it's exactly what the folks who watch this video love is to get these ideas to go research themselves. Obviously, you've got, I think you said, a list of 26 stocks and ETFs that you put together for 2026. So, folks can go to Chris's Substack to get that full list of stocks and

and when we say goodbye to Chris, I'll remind everybody where to go. Um, just real quick on software because I've been asking this question recently because I'm I've been thinking like you Chris, which is a lot of these software stocks have kind of gotten hit so badly that it's it's almost like they're being priced for going out of business. that AI is just going to totally eat their business. And that will happen with some software companies. But for a lot of the big, you know, the big blue chip ones in this space, something I've been

hearing a lot is um, you know, if you're an enterprise company and you, you know, need to run an important platform, your sales Platform, your CRM, whatever, are are you going to what would you prefer to use? you know, a battle tested right software suite that, you know, millions of lines of code that have been, you know, painstakingly put together as every use case has been found and and debugged. So, it's kind of a bulletproof solution that's out there. Or you going to go with something that's some AI company or some AI model just spit

out, right? In most cases, you're going to be going with that triedand-true software package for for a good long time. And to your point, it's not an andor. A lot of times, you know, AI's a lot of cases AI is going to work together with these software programs and and AI is going to help these software companies become even better at what they do. So, you know, this is sort of one of the things I asked about a relief rally, like if I if the war kind of dies down and and the market's immediate fears

about the wars diminish, it's going to start looking around to say, okay, well, where should I put money to work? And it seems like the software space might be a pretty obvious candidate of like, wow, this thing's really been beaten down. time to get back into the pool. Do do you think that's the case or that's more likely than not? Uh I think probably there's going to be select names that will be negatively impacted and other names that won't. You Know, I actually tried to handicap this a little bit last week. I was looking at

Adobe. You know, Adobee's trading at like 15 times earnings now. They're a staple in, you know, any type of creative arts that you can do on on a computer. Um, and the idea is like, okay, like is AI going to replace, you know, human ingenuity as it comes to graphic design, as it comes to video editing? And and I do think that there's um a case for that, but I also think there's a stronger case for Adobe integrating that into their suite and, you know, kind of moving alongside that and and growing with that trend.

you know, it's it's not, you know, there's far more dangerous industries to disrupt, right? Like you disrupt like the airline industry by coming out with a way to teleport. Like, all right, that's it. Like, the airline industry is done, right? Like, but software can be rewritten. That's the whole point of software. It's software, you know, and so it's code. Um and so you know you're arguing that say some code is gonna interrupt an entire sector based on code and it's like maybe they'll just adapt maybe they'll come up with some like hybrid model. So that's

my like terrible analysis of software. Um but I I did read I can't remember off the top of my head but I was reading some statistics uh maybe on Zero Hedge Last week just about how badly software has gotten crushed. I think it's the IGV right which is the the software index. Let's see. Yeah, that's the expanded tech software sector. So, that's down uh 24% over the last six months. It's down 20% this year. Uh still up over a fiveyear period, but uh yeah, I don't know. If I had to pick one at a PE

at a blended PE of 30X, it looks like I I would if I had to choose, I would be more inclined to buy software than sell it here. That would be my, you know, but again, I'm not a financial adviser and generally have no idea what I'm talking about. I'm a former bartender. All right. Well, look, um, we got to start wrapping up here, but let me just ask you this, Chris. Um, you're right about a lot of topics. Um, is there anything else that's kind of burning brightly on your radar or your interest set

that I just haven't thought to ask you about yet? Um, I'm just looking here at like the first page of my uh of my blog and I think we pretty much covered everything. You know, the the only thing I would recommend actually is that if you go to my if you go to my page, my blog page, the free article, you don't have to like read you don't have to pay to read it. Um, it's called AI now with less circle and more jerk. It's such a great title. And that was a human thought of

title, too. You know, I didn't run that one through AI. But if you go in there, there's a link to Michael Bur's podcast from December 8th of 2025. And one of the things he talks about in that podcast is the similarities that he sees in the tech boom where fiber optic buildout got way ahead of what was needed and how that compares to AI and how he thinks the buildout in AI now is getting far ahead of what we need. Uh and this goes back to you know when companies start reducing capex is the market

just going to get crushed. Um, and that's a worthwhile listen if you want to kind of keep a pulse on tech, but the overall markets in general because that's what that's what's driving everything now. Okay. I I actually haven't listened to that that interview yet, but I definitely will. Does he get into at all the circular financing concerns of the industry as well in that discussion? I don't I don't remember with specificity whether or not he does, but it's certainly worth mentioning. Yeah, that you know, again, it's the same deal in private credit, right? Like

one guy loans to another guy and his collateral Is worthless and he loans to another guy and his collateral is worthless. And you know, these companies have these companies have hundreds of billions of Yeah. And we have companies with like hundreds of billions of dollars of these partnerships down on paper uh that nobody knows whether or not they're going to be able to actually affectuate them. So, you know, it's worthwhile to note. All right. Um well, Chris, look, thank you so much for coming on. Great update. Again, thank you for being so generous and going

through the things where you see opportunity here. I love that it's not just about concerns, it's where opportunity lies. Um, for folks that would like to follow you and your work, you've already mentioned it once, but where should they go? Yeah, it's just uh quote the raven.substack.com. So, quo t the raven r-en.substack Substack, su t-ac.com, or just go to Substack and search for qtrsfring finance. All right. Well, Chris, when I edit this, I'm going to put up the URL right there on the screen so folks know where to go. Folks, the link will be in

the description below this video, too, so you can get there with one click. I got to ask Chris, so Quote the Raven, obviously, um, a reference to Edgar Allan Poe. Just curious, why' you pick that one for your uh, for your your subst? It was a long time ago. That was the moniker I was using since like 2012 when I started writing on uh uh on finance kind of anonymously. There was no real reason for it. I I just needed to pick a moniker. I was an English major. You weren't like an English major or

I was an English major. Yeah, you were. Okay. Well, there we go. Yeah. So, I did read some Po and I, you know, I actually like, you know, some of Po's stuff, but there's no like, you know, no crazy like allegiance to him or big crazy story. I was filling out a form for Seeking Alpha and they were like, "What's the uh you know, what's the pseudonym that you want to use?" And I was like, maybe I had some book or some [ __ ] on my desk like the Raven, you know, like whatever. I

didn't know, you know, 13 years later that was going to be my name of everything, but now it is what it is. So, yeah. Well, no real good story. Well, congratulations on the success and look, you're a great writer, so there's something you got in common there with Po and obviously the results show that given your the the extreme popularity of your your Substack there. Um, but it is just interesting and kind of fun to know that you got a literary background. Yeah, for sure. Yep. All right. Well, look, Chris, again, can't thank you enough.

This is, uh, wonderful. Look forward to having you back on again soon. All right. Sounds great. Thanks, Adam. All right. Well, now is the time in the Program where we bring in the lead partners from New Harbor Financial, uh, one of the endorsed financial advisory firms by Thoughtful Money. I'm joined this week as usual by senior partners John Lodra and Mike Preston. Mike, let's start with you. um love to hear any key takeaways that you have from the conversation uh just had there with Chris and obviously we'll talk about what the market's done over the

past week. Um I guess in particular, you know, the thing that seemed to be burning brightest to me on Chris's radar is the um the mounting concerns that we're starting to see in the headlines around private credit. Um are you guys noting the same at New Harbor? And how concerned are you guys about how this could potentially metastasize from here? Yeah, hi Adam. Thanks for having us. And um Chris certainly talked a lot about private credit there maybe being a canary in the coal mine. It's certainly something that we're watching here and noticing. It's hard

to tell whether this is going to be a contagion or not or is it just a minor nuisance? I think Chris said something like the on a scale of 1 to 10, if he thought this was going to cause problems or credit problems, he thought maybe a 9 out of 10 likelihood. But in terms of a contagion, I think he said five or six, something like that. So, yeah, more like it would beat up the the big private credit companies, but but Not so much potentially spill into other parts of the system. Yeah. So, let

me just share a couple quick charts. These are on a daily basis. Here's Blue Owl Capital, and they had, I think a week or two, said they're going to start to gate redemptions, meaning you can't take money out of their fund. uh OBDC I think is their fund and it's been in a big downtrend. But take a look at some of the other big names. KKR for instance has been in a big downtrend year to date. I mean that's down a lot. That's what 30 40% year to date. And uh BX here Blackstone way down.

Even if you take a look at the EyesShares financials, you can take you can see that it's been a really negative sector. I mean, this used to be in our model um last year. We got out of this somewhere around 5152, maybe 4 months ago, something like that, cuz it's been in a downtrend a few months ago. But, so there's certainly some concern about financials, particularly private credit. What's it going to do? I don't know. I don't think anyone really knows. Um it's something to watch, something to be concerned about, particularly in a hyper overvalued

market. I if I can I'd like to just share a couple basic charts about valuations because Chris started and said you know what after all these years of money printing here we are at a You know at a point where maybe a PE of 20 is deep value. I know he was being sarcastic but people like us and individual investors don't even know what way is up sometimes anymore because valuations have been so darn stretched for so long. We just don't know if this is the new normal and you still need to operate in this

environment. So it's tough. So let me just share that chart. Actually two quick charts here. Very very basic charts. This first one is the Schiller PE. Professor Robert Schiller of Yale famously created this. It's a 10-year smooth inflation adjusted price earnings ratio. This goes back to 1880. You might say that the average on this is 10 or maybe 12, something like that. Prior bare markets didn't clear until the single digits back here in 19 29. Actually, that's this would be after the the big um right here, 1932. After the big Great Depression, cleared at maybe

five or six back here in the 80s, we hit a low at maybe six or seven. But starting in the '9s, we went way off the reservation. We hit a PE of 45. We did come back to 15 at the bottom of the housing crisis, but that was rescued. And we were here for what felt like a Millisecond. And it just this is not a good timing tool, but it shows you how overvalued this was. But take a look at this chart, which is John Husman's chart. This one's a few months old, but I just

had to go back to John Husman's work because his work is so good, and show you going back to 1928 what his measure of valuation shows. If you take a look at this green line, this is what the market would have to be at to yield 10% future returns. And if you look at what happened in the late 90s, the blue line is the actual S&P index. And so we we came out of norms in the late 90s and we never went back. This is the kind of point that I want to put across here.

The low of the tech bubble did not touch normal valuations. The low of the housing crisis touched normal valuations for what felt like a millisecond and then the world went into infinite QE and here we are again. This is a few months old. We're actually a little higher now. We'd have to fall to like maybe 17,800 2,000 on the S&P to have 10% return possibilities. Again, well, I think you can do the math on that. That's a drop of over 2/3. And in fact, we think That's what likely eventually to happen. But what Chris was

talking about there is, yeah, what kind of faith should we have? I think, if I could put it in my own words, should we have faith that we're never going to reach these norms again? Or should we have faith that math really does matter? So, yeah, I I think we fall into the into the latter camp. We think that valuations do matter. That doesn't mean we're not playing the game, but we're playing the game relatively conservatively. Okay. And uh I'm trying to remember from the last time we talked um I know that the guys at

RAIA I believe have recently um brought down their equity exposure a little bit. Um but they it was at a pretty high level for them. Have you guys reduced any of your equity exposure yet in the wake of uh recent things that have been going on? We've been at about 47 and a half% for a few months. So I'm going to share another screen while I'm answering you here. we've been. So, the first thing you want to do in in any environment to set what what your risk exposure is. We're at a hyper overvalued environment.

Our risk exposure set at 47.5 on equity excluding the gold stocks that we have Because we count those as different. And that's because we know we might be wrong about the fact that we think that presently this market will likely hold up here for a little while. Nobody knows what's going to happen next, but we have a set of indicators we trust. So, here's the S&P. I'm going to zoom in a little bit on a daily chart. Take a look at the S&P right here at like 6,800. You could go all the way back to

late September, early October, and the and the S&P is trading at the same place it was 5 to 6 months ago. That's driving people mad a little bit. It really has gone nowhere. The NASDAQ is similar. And the S&P over the last few months, year to date, has been tracing out this big triangle. We recently broke to the downside on this triangle. Is this going to be a fake triangle breakdown and and we reverse up or not? We don't know. We're going to have to wait and see. But to answer your question about risk exposure

based on valuations, we're hideously overvalued. And we have our suite of indicators which have been in green for quite a while. Over the last week, they turned red. Because of that, we added S&P index put hedges down here at 6,500. So, if we get a big crash here, which we don't know, we really can't tell. I Don't think that's going to happen, but we'll see. 15% of our exposure will come right off the top because our index hedges are at 6,500 for 15%. That'll drop us to 32% overnight. And then from there, we'll probably start

taking stops on our sectors and reduce from there. So, unlike a lot of other managers out there, we'll be reducing into a downturn or crash versus saying don't ever sell. So that's where we stand right now. I'll stop sharing. Okay. So So Ba basically your your default isn't a big breakdown from here, but you're concerned enough about the potential of it that you've you've bought some insurance there at 6,500. Yeah. You know, one thing that's tough about this business and for individual investors out there is you have to have some kind of bias because the

truth is there's no set of indicators that will just print money. Wouldn't it be nice? You have to set your exposure based on the environment. The environment is relatively risky. So, our exposure is low. From there, it becomes tactical. If I had to guess, I think we might actually have had a false breakdown and springboard higher. You know, Chris said that if the Iran situation was resolved, he didn't think that the market would react. I kind of disagree. I think the Market might literally react and break into new highs, that could even cause some type

of blowoff. We would welcome that blowoff because frankly I think this market has a date with destiny ultimately to for a long bare market and so we're we're kind of in this false environment where everything is stimulus stimulus stimulus and so people are a little bit going crazy I think watching all this. So we don't have to guess overall we added our hedges on. If we get a crash we'll be okay. If we get a blowoff we'll know what to do and we'll ride some of that as well. Okay Mike, do me a favor. pull

up that chart just one more time. Um the the question I want to ask you, you know, you you we've talked about this a fair amount in the past uh couple times you guys have been on, but the market hasn't done much since uh September. Do me a favor, just pull out a little bit more there if you can. Sure. And I can even go to weekly. Maybe it's going to be better. Here's a weekly. Yeah. Yeah. Yeah. Okay, that's actually great. So, at what point do you stop thinking, okay, this market's likely consolidating and,

you know, it's it's going to eventually break out to the upside and we'll get new highs versus this looks like a topping process and And and I don't think we can say it definitively here, but you can definitely see now it has rounded over um unless prices go up high pretty quickly from here. Um, and you know, it's done so over the course of five months or so. Um, so at what point do you start getting concerned that like, okay, this thing looks like it's it's heading down. I'd say the last swing low here, Adam,

you know, right back here, 6,500 back in November, we touched 6,500. This big horizontal red line is at 6,500. That's why our hedges are at 6,500. If we have a meaningful break and let's say a few clo a couple closes below 6,500, I would say that we'll be a lot more concerned. But by then, as I just mentioned, our equity exposure will automatically be lower. Furthermore, we'll probably take some stops and because we don't really want to say never sell like the rest of Wall Street says, we don't want to be adding on a downturn

because we're expecting the big one, quote unquote. You know, going back to some of the valuation charts, at some point something big is going to change and the world's going to figure out QE doesn't fix things forever and the market could lose 2/3. In fact, it will likely lose 2/3 as we go through the final few years Of this fourth turning climactic cycle that we're in. And so, we don't want to mess around with the big one. But at the same time, take a look at this chart. We're like three 3% off. what this is

220 points um between here and the high. That's 3%. One day or two days and we could be busting through to new highs, right? And so at this point, if we have a big uphammer on a weekly or daily chart even and we come through new highs, I'm going to say that some kind of bullish blowoff is probably in play. Particularly if you see a few hundred points in a short period of time. If on the downside we come through 65, well, we're probably done. we're probably done for maybe for for a long time. All

right, thanks Mike. Um all right, John, I'm gonna pull it over to you here. Um so we have, you know, a couple of potential downside triggers here and obviously private credit's one and would love to hear any thoughts you have about that. And I guess maybe a question for you is is sort of similar to what I asked Mike there. what at what point would you start really getting worried about private credit becoming you know something that could cascade into other parts of the market and start pulling you know things down with it. Um But

you know we also we've got the war going on and yeah let's all cross our fingers and and hope that it's over quickly. uh but it might not be and certainly investors have been really worried about um what a sustained uh rise in the price of oil could end up doing to the economy overall. Um and you know I'm sure I could pull up some other concerns there. I think I I mentioned to Chris uh you know we've got data on both sides but the latest payroll uh data that came out from the BLS was

pretty concerning. So, um, h how how worried are you about or or are you worried about any potential pins here that could really prick these borrow from Chris pornically pornographically overvalued asset prices? Yeah, thank you, Adam. And I think Mike did a great job covering our our take on things. Uh, uh, I want to talk about private credit in just a moment. Um, but let's talk about and and to to be completely honest and humble here, um, I think Mike would agree when I say the last 15 years has probably been the toughest years we

can imagine as a fundamentally uh, dataare investor. When you look at the valuations, valuations are not a timing indicator. They never have been, they never were, and they Aren't now. But the degree to which the the usefulness of valuations have been um timely um exercisable has has been greatly uh you know interrupted I'll I'll say at least um so you know you could you could probably make a fair case that just on valuation and loans you know 0% equity exposure but that would be exactly the wrong thing to have been. So that's why you know

we we rely on a whole bunch of other stuff beyond and the way I would think about valuations is it's kind of like an analogy of uh you know at some point markets will fall the elevator will drop and you know a prudent investors got to decide how many floors up they are comfortable being when that happens you know do you want to be up 100 stories or 10 or five right that's a simple analogy and and our way of expressing that is just being somewhat underweight equities and even better hopefully underweight equities but the

equities we're in are are ones that are you know outperform performing um the broad market and that's easier said than done but it's certainly what we try to do with our systematic tools. Um you know I uh we are in a point of indecision. You Mike just showed up the S&P chart and it's kind of like this sideways range and traditionally the the logic is that's going to break one way or the other and until the trend is broken the the Assumption is the trend is going to be kept. Uh Mike talked about some key

levels that if we saw it taken out would be a a further affirmation to us that things are not as as hunky dory with uh stock the stock market as as one might think. So we're not complacent at all. We are very hyper focused and vigilant. But I do want to talk about you know so even though the S&P has gone nowhere uh doesn't mean there haven't been opportunities. And this is this kind of echoes off of some of Chris Iron's comments. You know energy for example here's a oil and gas services companies. They have

absolutely exploded higher, not just since the war, but actually they've been rallying since uh the September October time frame when the S&P basically stalled out. Okay. Um you know, things like uh global uh base metals companies, let me just pick up another ticker here that follows those. Um they've done tremendously well. Emerging markets on a relative basis have done very well. Right? Right. So there's been areas of strength even though the market has been frustrating frustratingly in a cap weighted S&P context frustratingly nowhere. But what does have as concerned is some key sectors of the

market have been really really weak even though the market broad market has gone nowhere. Look at the financial sector and this we'll talk About the private credit in a moment because I think it's certainly starting to flow through to the financial sector. Generally when financial stocks struggle it's not a good sign at all. Okay? Doesn't mean the world's coming down but it's not a good healthy sign. Look at um retail stocks um you know as a sign of consumer health. Those have started to falter quite quite dramatically. Look at home builders for example. Um they're

falling out of bed. These are the cyclical type of sectors that you don't want to see turning over if if you're going to have a durable follow through to an uptrend in the market. Um so that that's just some comments on the stock market. And I, you know, I want to talk talk about private credit, but if I'll pause here to see if if you want to talk about any of that, Adam. No, I think it's all good. Um, I I do want to connect some dots um from what you just showed to private credit.

So, why don't we go to private credit and then we'll we'll do that. So, um, you know, I'll I'll be honest. We were afraid of private credit years ago. You know, we're not we're not we're afraid now, but more importantly, we were afraid a couple years ago. And there were a lot of good, you know, headline reasons why we felt that way. Um, you know, you look at the private credit um, kind of class. The loans that Are made by in that class uh, you know, generally lack the kind of financial covenants that bank loans

and traditional bank lending um, provides, basically protections for investors. And it's probably a year and a half now. And you know, our industry does a great job at pitching products, especially when they're, you know, hot and they offer a nice juicy yield, which private credit certainly was, you know, a big selling point selling point there. You know, hey, look at these great yields on these, you know, private fun, you know, credit, you know, loans. Isn't that great? Wouldn't you like 8 to 10% a year? Well, you know, there there is risk and we're starting to

see that now. Um, but, you know, we we get pitched by a lot of financial product companies. uh we have to keep a pretty pretty u solid lock on our doors and our phones to be candid um you know because there's not a day that goes by where we don't get pitched on a lot of stuff and we've been very reluctant we've raised a lot of these issues with with a lot of those firms and I recall being at a a investment forum uh held by a very large institutional manager one of the leaders in

the private credit and bond investing space in general and there's probably 300 adviserss in the room I I asked the question you know are you concerned about these lack of covenants the, you know, this and that, the the the the the Headline talk about public and private marks to markets not being the same. And they kind of sloughed it off. They said, "Yeah, yeah, you know, yeah, there's, you know, Covenant light loans, but, you know, at the end of the day, they sloughed it off and said, you know, but if you're going to invest in

this space, you want to be with a big company like ours because when it comes time to to negotiate with these borrowers when they're up against the ropes, we're going to get a better deal." So, it's kind of like almost like a tested admission that that day will come, but don't worry, be with us and we'll get you the best deal. It it blew my mind. So, we've been we've been out of the space. We haven't succumb to it. So, we're not worried about it in that our clients aren't invested in it, but we do

we are worried about the contagion. And it's impossible to put a a a bound on that other than I would say, as history would attest, generally speaking, it's worse than it appears or worse than the headlines would want you to believe. I'm going to share um back last May and and it's not just the private credit. I'm I am a little bit more than a little bit concerned about traditional financial firms having a contagion. So, this is a study that the Fed put out last May, May of 2025, and it's entitled bank lending to private

credit. Let me see if I can make that a little bigger just just in case uh uh you can't see it. But the the Title says it, bank lending to private credit. So, there's some great charts in here, you know. Let me scroll down. This first of all this is this is what happened to private credit through different you know BDC's private debt funds and and you know you can see there's been an explosion and one timehonored uh lesson is when something blow you know increases dramatically in the financial product realm it usually is a

sign of being overdone and and you know that's just one data point. So uh you can see the the absolutely stunning growth there right but then you see the uh the bank exposure to that this is uh where was it? There was a chart in here somewhere. I might have jumped over it. Um, oh, that is that's the bank. That's the bank. Uh, you know, so essentially what happens here, traditional banks lend to these private credit firms who in turn lend out to, you know, private credit b uh, you know, borrowers. Um, yeah, this is

what I was saying to Chris, right? I mean, so you know, some people say, well, don't worry, it's going to be contained to the private credit space. Well, it's like, no, these private credit companies get a lot of their loans from the traditional banking system. Exactly. And, you know, I don't know if it's a loophole in the system to get, you know, I don't want to be that conspiracy theorist, but I think there probably is some element of the the capital rules and and kind of the Restrictions that were put on lending in the wake

of the financial crisis. You know, I think instead of banks lending directly to borrowers, they they found happy intermediaries in the form of the private credit funds. So um I wanted to share that um you know what we have seen a lot you know another thing that has concerned us you know the again back to our industry's uh mastery of putting out products a lot of the retail private credit products are built on what are called the secondary market do a quick Google search you know private credit secondaries essentially what this is it's a way

for either general partner private credit funds or the limited partners that invested in to uh achieve liquidity on their investment by essentially selling it to secondary markets. And a big part of that secondary market are retail investors. Again, I don't want to go so far as to say, you know, criminal acts or anything like that, but there is this notion of the small guy holding the bag while the big guys are trying to get out. And you know, I think it's not um coincidental that uh um last August there was a presidential order called the

what was it called the title you know I think is does it does it full justice democratizing access to alternative assets for 401k investors. Basically the under the opaces of hey let's let the little little guys get access to these great you know private investments that have only been reserved for the big guys. Let's let them start to put it in their 401ks. We shook our heads. It had all the markings to us of let's let's find the retail small mom and pops to hold the bag. So yeah, let's let's take all our underperforming stuff

and give it to them. Yeah, I I don't want to get overly alarmist, but I do think there's probably much more pain here than the authorities talking heads want want to communicate. It always is that way. It was that way in the high housing crisis and the things like seeing the financial sector as weak as it is tells me that there's probably something to worry about here. Just like in the almost year leading up to the the you know the subprime becoming a problem financial stocks were struggling you know even though the market was doing

great but you know pretty much all of 2007 you look at the financial sector even going back to late ' 06 I think the financial sector was was struggling in the stock stock prices. Why? We didn't know until, you know, subprime became a household name, but that's the market kind of told us. So, okay. Um, I'm looking at the time here. John, I want to come back to you with a question about kind of what to do about all this, but Mike, if we can, let's just do a really quick dial through what's going on

with the precious metals here. Um, you know, from from my perch here, um, uh, still a little TBD, but it is looking like we staunched the bleeding, um, from the the big correction that they had from their highs. Now, we had expected that, you know, they were going to go through a pretty big correction because the price action had just gone exponential. Um, but uh what what what are your charts telling you about where you think the precious metals are likely to be heading from here? I'm on mute. I'll try to keep it really brief

here, Adam. And uh hopefully you can see that now the chart. Yep. Of SLV, which is an ETF that follows silver. Now, chart reading is a little bit hocus pocus. I realize it doesn't necessarily tell us exactly what's going to happen next. In fact, it never tells us exactly what's going to happen next, but at least it can give us an idea. This purple line that I've drawn is a rough trend line that silver seems to be respecting. We had a big blowoff here, and you almost have to just take that Right out of the

equation because, well, I think we all knew it was kind of crazy. It's kind of like what oil just did. You know, oil just went crazy and then came came on back down. But this is still in an uptrend and it keeps hugging $85 to $90 spot. I mean, who would have thought that we would be settling up here a few years ago or even last year we were talking about a big triple top breakout of 35 and now we're settling at 80 to 90. In my opinion, you can almost throw out this point and

just take a look at this. This is doing some some good things here. all this consolidation if I move this to let's say the weekly chart we had this big parabola but this back and forth going on between 70 and 85 on SLV which is basically what 80 maybe to 95 on silver looks pretty good to me and therefore I think it's building I think it's building I don't think it's like the other big tops like 2011 1980 we seem to be recovering pretty well and and on down days I'm just noticing watching the tape

that the miners are being bought up. So, I know it's talking our book a little bit because we're still 10% miners, but I I do believe and We actually have a trading piece in SLV as well. I do believe that these names are likely going higher. And so, let me just take a look at SIL for a minute here. Sil down a little bit today. This is a silver miners. But if I back this out to let's say a weekly chart, we can see that SIL went from 40 to 80 last year. So it doubled.

And Chris said he's also positive of the miners. He doesn't think that we'll have the same performance. I'm not so sure. I mean, maybe we go 80 to to 160 this year or maybe we only go up, I don't know, 50%. But the big bull markets, I've said before, usually double once and there's a big double off the base. Normally there'll be another double before this thing's done. I can't imagine that we have one year out performance and that's it. And particularly if gold and silver hang in there. Going back to the daily chart, let

me bring up gold. Look how well this has been hanging in there. We had this blowoff top and it's just been straight uptrend. And this is gold here at 5100 or 5200. So I believe these gold stocks have 50 to 100% more in them. I don't know that that'll happen this year. Um, in in the metals themselves, uh, I'd continue to hold as long as your allocation is not out of whack, you know. So, I I think It's very bottom line very positive. Okay. And and as we're seeing, um, the earnings start to come in

for these mining companies with precious metals prices way higher than they were a year ago. Um, is that starting to catch Wall Street's attention, do you think? I mean, do do you or do you anticipate the miners to catch another bid here soon as Wall Street just can't ignore their heightened profitability? Yeah, I mean, in general, the the earnings were really good. You know, the market seems to have anticipated them because in general, these stocks did not have huge gap ups. In fact, today I'm looking at Harmony Gold, HMY, they actually are down 12% on

earnings. So, I don't know if that is uh I don't think that's anything to be worried about industrywide. I haven't had a chance to read that. I would say that most of the earnings uh surprises have been up. It seems like the market isn't really convinced that the metals are going to hang in here at this level. But with that chart like I just showed you with with silver 80 to 90 and certainly if it continues to hold that level and or go higher, I think the market's going to have no choice but to be

convinced that these these multiples are going to be worthy of expansion and the the the record profits are probably going to be here For a lot longer and that means higher stock prices. Okay. Well, we'll have you tracking it here for us on a weekly basis going forward. Mike John, coming to you for a wrap-up here. Um so you know obviously lots of reasons to be concerned about um you know potential risks to the downside here. We've talked about a bunch of them with Chris and here with you guys as capital managers um uh you

know there's a lot of people watching this channel who um probably had a pretty good 2025. um are probably uh watching the action here in 2026 and starting to feel a little bit nervous, but I'm going to guess maybe most of them haven't really changed much about their portfolios since the end of last year. Um, is this a good time for, you know, the average investor, folks watching this channel, ju just to kind of do kind of a an audit of what they're invested in and um, just, you know, take a fresh appreciation of the

risks and just ask themselves, hey, should I be taking some maybe more defensive measures in my portfolio um, than I had coming into this year? Yeah, Adam, I'm not going to mince words. Absolutely. Yes. And that's not Synonymous with freak out over headlines. I mean, yesterday there was some big market moving things on a a tweet that was and then got taken down in terms of, you know, escorts of, you know, vessels through the straight of Hormuz. Uh but no I mean again going back to the valuations we just talked about you know even Vanguard

uh last year 2025 you know the the profit of passive investing you know index investing basically said hey valuations are stretched it would be prudent to think about underweighting equities what you otherwise might be. So, you know, even Vanguard has has kind of acknowledged not with perfect timing, but from the the standpoint of a person's life, a couple's life, a household's life, and what they need to do. Uh, this is not a time one of the biggest dangers or or it's not the the market risk. It's not the the the fraught, you know, issues in

the market. It's it's oftenimes one's own psychology, a a fear of missing out. you know, this idea that geez, if I miss the the 10 best days, I'm gonna be forever doomed. You know, there's so much that that that that's a big part that most individual investors really need to get a handle on. A do I need the returns that I'm fearful of missing out on. Everybody wants returns. Let's let's face it, everybody wants the returns, but do you need them? And you know, you're not there's not a god-given right for more return if you

take more risk. In fact, there are parts of the market cycle where absolutely that equation gets turned on its head that more risk just invites bigger downside, bigger losses. Um, that's not fiction. It's not uh it's not something making up. It's actually in the data. You just have to understand that there are parts of the market market cycle where that coin flip is very negatively weighted uh and there are times where it's very positively weighted and valuations are just one of those things that you know tilt the odds on that coin flip. So absolutely yes.

Review your exposures, review your allocations. Don't freak out, but bring it back to your own situation and be at peace with some level of regret. You're always going to regret something. You're going to regret not buying enough, buying too much, selling too soon, buying too soon, selling too late, selling too early. That that's part of the game. There is no such thing as as perfection here. So come to come to grips with that. That's going to be the most important arsenal in one's psychological and investing toolkit more so than tactics or strategies. All right, very

very well said there, John. And um I'm getting a sign here From my computer that for some reason um it looks like the memory is getting real low. I think my video might even be a little bit delayed here. Um so we'll wrap things up real quick. Hopefully this works well. Um, folks, uh, if you'd like to see Chris Irons come back on this program again soon, please let us know that by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. Um,

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you a couple seconds. These consultations are totally free. There's no commitments involved. It's just a service these firms offer to be as helpful as possible. Um, and a reminder that Thul Money's spring online conference is just a little more than a week away. You have a couple days left. I think like three uh after the day this video airs to buy your ticket at the last chance to save price before it jumps up to the full price. Um we've got Our best uh faculty ever. I won't go through the whole list because it's quite long

and I'm worried about the memory lasting here, but you can find out all the information about the conference and buy your ticket over at thoughtfulmoney.com/conference. And if you are a premium subscriber to our Substack, check your email. You've got a code for me you can use to get an additional $50 off whatever the ticket price is when you go to that URL. Um, John and Mike, gentlemen, great week. Can't thank you enough. Very interesting times. A little scary. U, but thank you guys for keeping us on track every week. Look forward to doing this again

with you next week and we'll cross our fingers that hopefully things get better for the market outlook than worse from here. But again, guys, thanks so much for doing this. Thank you, Adam. Always a pleasure and we'll see you soon. Thank you, Adam. Nice talking with you and enjoyed it very much. See you soon. All right, everybody else, thanks so much for watching.