The economy is breaking, and today we discuss the signs. We explore the challenges of navigating today’s markets, highlighting the volatility and skepticism around AI-driven companies, overinflated stock valuations, and earnings season dynamics where “beating expectations” often masks underlying realities. It's important to be cautious investors over high P/E ratios, unsustainable growth, and market timing. You need to focus on risk management over speculation. Critical thinking is also imperative while evaluating data and it's important to question assumptions and focus on market behavior rather than blindly trusting reported numbers. Today we discuss...
- Volatility in November and the flat performance in October, with a mixed outlook for the remaining six weeks of the year.
- Historical trends in presidential cycles, noting that the second year is statistically the worst for stock market performance, while years one, three, and four tend to perform better.
- The impact of earnings season on markets and how companies often beat expectations by managing guidance strategically, which can mislead retail investors.
- The market’s reaction to AI-related companies, the skepticism around reported growth, revenue, and inter-company financing “shenanigans.”
- Historical parallels to the late 1990s internet bubble, where vendor financing inflated revenues before companies ultimately collapsed.
- The difficulty of individual stock investing, noting that growth rates slow as companies mature and valuations often contract over time.
- The risk of focusing on long-term predictions without timing, being “right too early” can result in significant opportunity costs and losses.
- Michael Burry’s recent hedge fund moves, his short positions on AI-related stocks like Nvidia and the implications for investors skeptical of inflated earnings.
- Timing is critical in investing, caution with high-growth sectors and risk management rather than speculative bets are needs.
- Investors should not blindly trust government or corporate data, but instead focus on market behavior and price trends to assess reality.
- There's importance in distinguishing between what is factually true and what the market believes.
- Apply critical thinking, question assumptions, and focus on present market realities rather than speculative long-term projections.
"Cash is not trash... Cash is King" - Kirk Chisholm
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Today's Guest: Kirk Chisholm
Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group, an independent Registered Investment Advisor located in Lexington, MA. He has been providing wealth management services to individuals, executives, entrepreneurs, and their families since 1999. He is an outside the box thinker, risk manager, inflation expert, blogger, podcaster, and all-around interesting guy. Kirk is dedicated to developing lasting relationships with all of his clients and their families. One of the benefits of working with Kirk is his patience, empathy, and his ability to provide clear and easy-to-understand explanations to complex financial topics.
Kirk developed a unique philosophy for the wealth management industry called Risk Management First. The medical field has a similar way of thinking of “first do no harm”. This philosophy focuses on risk management for clients in all aspects of their lives in ways the industry does not address. Risk management does not stop with investments. It also requires working closely with other professionals to address areas of their financial lives not currently being met.
In 2008, Kirk co-founded Innovative Advisory Group to address the needs not being addressed by the wealth management industry. It started with specializing in alternative assets held in retirement accounts (i.e. self directed IRAs/401ks). Then the company expanded into the specialization of college funding (i.e. planning, strategy, and paying the least possible for a high quality education), Risk Management First, exit planning for business owners, advanced planning (estate, tax, etc), and providing practice management and leadership training to other financial advisors, accountants and attorneys.
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Today's Panelists
- Kirk Chisholm | Innovative Wealth
- Phil Weiss | Apprise Wealth Management