George Noble: We're Witnessing the Death of Speculation
Summary
Macro Backdrop: The guest frames a broad currency debasement regime with sticky inflation, rising long-term yields, and bond market vigilantes pressuring deficits and fiat currencies.
Gold & Miners: Strong, long-term bullish case for gold, precious metals, and especially gold miners, citing central bank buying, fiscal/monetary excess, and attractive earnings leverage.
Energy Upside: Bullish on energy equities—particularly oil services—as activity rises and underinvestment persists; examples include Schlumberger (SLB), Tidewater (TDW), and Valaris (VAL).
Rotation Abroad: Expects market rotation from US mega-cap tech into emerging markets and China, with Europe gaining a fiscal pulse; advocates moving from cap-weighted S&P to equal weight (RSP).
AI Skepticism: Bearish on the AI trade’s commercial payoff and capex intensity; sees risk for semis and software (e.g., NVDA, TSLA, MSFT, GOOGL, ORCL, NOW) as multiples compress and “SaaS-mageddon” unfolds.
Housing & Bonds: Negative on housing given higher-for-longer long-term rates and tight spreads; views bonds as unattractive, challenging the traditional 60/40 portfolio.
Actionable Positioning: Own gold, energy, equal-weight US equities, and EM/China; reduce or avoid bonds and be cautious/short AI-heavy tech, anticipating elevated volatility and style/sector rotation.
Transcript
If you think about gold relative to inflation, gold relative to money supply, gold relative to GDP, etc., etc., etc., it's easy to come up with numbers like 6,000, 8,000, [music] 10,000. So, what I'm trying to So, I'm not giving you a particular number, but what I am trying to tell you is it's higher. That's my point. Uh, and meaningfully higher. And if we get to a Banana Republic Vimar type scenario, all bets are off. But you don't have to believe in that to want to own gold miners is my point. George Noble, CIO of Noble Capital Advisors, also the former um assistant to Peter Lynch and also someone who ran the number one mutual fund in the country at the time, which was the Fidelity Overseas Fund, a former guest of the show. Welcome back. Great to have you again, George. I really enjoyed our conversation from was well almost over a year ago, nine months ago at this point. I don't know, a long time ago at this point. um spring of 2025. Great to see you. Really appreciate you taking the time, George. >> Thanks for having me. Thanks for putting up with me. >> This is going to be fun. Uh last time it was fun, too. And you made some preient calls, which I will get into. But George, you watched the show, you listened to the show. Um it's been a while since we had you on. Feel like gosh, a lot has transpired in that time. So, since it's been a while, can we just start big picture? Can you set the stage for us? Uh set the table. What is the big picture macro view for you today? Where do you see things headed? What's been on your radar of late? Um your assessment of the economy globally, domestically. We can throw markets in there. Um let's take all the time you need to set the table when it comes to that big picture macro view. >> Thanks Julia. So much has been made of the debase so-called debasement trade of late and that's really the narrative that I'm running with. um you know there there is a sometimes the macro forces aren't that significant but other times they are and this is one of those times that they are um the whole basis for they very kindly reminded me of the call we got lucky last time about calling for it to buy gold and silver and precious metals I think that's still very much on the cards essentially um if you look at um past you look at what's going on right now you see a lot of move different moving prices you see gold going up crypto going down. The dollar's been weak. Emerging markets are doing well. Uh commodities are on fire and AI trades now losing losing ground. And there's a lot going on. They may seem disperate, but actually they're all connected in a way. And it's it's the it's the influence of the macro um settling out over the entire investment landscape. you if you go back you know and essentially this debasement trade all has to do with I think that the bill is coming for the um reckless policies that we've had both fiscal and monetary ever since Nixon took us off the gold standard in 1971 um we've just been spending more and more running running bigger and bigger deficits and you keep doing it until you can't uh and I think we're kind of getting to that place or at least we can do it but the market's starting to vote with its feet um and so this is the macro overview that's informing my opinion. I'm both a bottomup guy, macro guy, chart guy. I try to try to synthes synthesize a coherent view putting all those pieces together. But you know, if you think like think back to past cycles, I mean 1998 it all when we had the Asian contagion um and you know the whole long-term capital uh crisis that all started seemingly with a little incident in Thailand where the Thai bot blew up. Okay. But that really had to do that was just a manifestation of the giant carry trade coming unstuck. Um and then and then we know what happened thereafter. If you look at uh 2008 the great financial crisis that all started from uh cracks and fissures from the an obscure part of the uh housing finance market where that US housing market blew up and we all know what happened after that. So I think what's happening now is we're devaluing um u um uh paper money. Um we've made all kinds of promises. Many of your guests have abley spoken about this but you know it's unsustainable and I think the market's starting to sniff that out. Um you know you look at the increasing uh uh debt that we're accumulating and by the way Julia I'm not I mean you've had some other guests on who are much more expert at economics than I am even though I did study the disable science at Yale. Um, I consider myself more of a stock guy, but you know, there's a pretty good correlation between uh debt and uh interest rates. And um you know, if you look I I read this the other day. Um you know, many people were saying, well, 200 26 you're going to have lower deficits than in 25. Not true. I read an IMF paper a couple weeks ago. I think they're calling for deficits to GDP of 7.9% this year. That's up from like six something last year. So deficit's getting worse. Um, and it's pretty clear that, you know, they're going to have to just print more money to finance this whole thing. Raising taxes isn't really a tenable um a tenable option. They're spending money like drunken sailors. We talked about this last time, but you know, you'd almost think that modern monetary theory is okay. It's like, hey, Julia, what are you worried about? We're running this huge deficit. Nobody cares. Like, look, mom, no hands. So, my view is, and I, you know, I think Ed Edardi coined the phrase the bond market vigilantes. I think they're going to keep doing this until the bond market cracks. Uh, at a minimum, I think rates are coming down. So, they may want to cut rates, which I, you know, there's been a lot of talk about a couple rate cuts in 26. I really don't know. But if they do, I suspect it's going to blow up on them. It's going to backfire. I.e. long-term yields, bond yields are going to go up. The curve will steepen. So, for me, um, I don't see a recession. Um, I think inflation is sticky. Um, if anyone believes the official inflation numbers, I got a bridge to sell you, but I think inflation is sticky and probably heading up. Also ties into my oil price outlook. I think oil prices are headed up. Um, you know, consider the inflation numbers that we've seen are all against the backdrop of a well- behaved oil price. So, um, I think bond yields are uncooperative. I think they're going to have to print more money to um to to fund all these promises. I mean, Julia, think about this for a second. Imagine, imagine you had income of $5 billion and you were spending $7 billion. You, Julia Lar Ro, okay? You had 5 billion in income, 7 billion in in in um in spending. It's actually 7.5 billion. And you owe the bank 38 billion. And then you have some offbalance sheets obligations of, I don't know, 125 billion. And you go to the bank, you say, "Let me some money. I want to borrow money for 10 years. Like with inflation where it is 3-ish% 2 3% lending you money at 4.3%. Are you crazy? So I think bond yields are just way too low. U I it wouldn't surprise me if you see yields north of 5% um or more. Um and so I think I think as I look at markets overall, I'm kind of going all over the place here. I think uh 26 is going to see a lot of volatility. It's going to be very different from what we've seen previously. And as I think I shared with you before we started, my big theme for 2026 is uh rotation. Rotation within markets. In other words, don't look at the indices, look beneath the surface of what's going on. And why is that going on? That those are the really the key things. Don't just worship at the altar of price. >> Yeah. I want to get into the um the theme of rotation, but just let's stay on the macro bit. Um because I think it's also really important to understand like the backdrop and probably the regime in which you're operating in because that probably informs too like how do you want to be allocated when you're looking under the surface of the opportunities. So what I was hearing from you was the bill's coming due the math eventually is not going to work out and you want to be in places where there's stores of value. Correct. >> Is that fair to say? >> Correct. >> Mhm. Okay. So Ian just add to that please if I may. I'm told I like to interrupt people. Sorry about that. >> No, go for it. >> My mind just keeps going at such a frengatic pace. Um, you know, all the money kind of came to the US the last decade or so. US assets well outperformed the rest of the world. And look, US exceptionalism and and by the way, it wasn't random. US profit growths were staggeringly good compared to the rest of the world. So, you know, relative talk about equities now, relative um price follows relative earnings. So, it was justified. But um we got to the point now where um there's there's a story has been emerging in other in other areas now. So like for instance Europe was more abundant for many years. I don't want to get into politics. Let's talk about the effect of politics. The fact that Europe's now had to mobilize now and is spending tons fiscal stimulus particularly for defense spending. So all of a sudden there's a fiscal pulse in Europe. They were in a fiscal stray jacket previously. Okay. So you look at bon yields u okay they're soaring. All right, European bank stocks have been through the roof. They basically trade lock step with European bond yields. You look at what's going on in China. All right. Uh China, you know, the economyy's not been so great. Um and they've been very um uh tentative about about monetary stimulus, but it looks like they're take they're taking the gloves off on that. Now, the Chinese market, the Chinese market handily outperformed the US market. This is mindboggling. It's not Some people say, "Oh, China." Okay, China handily lapped the US market in 25. It even beat the US market in 24. So I expect China, the Chinese stock market and historically haven't been a fan of Chinese equities. I think that's going to outperform the the US uh again in uh in in in 26. So what I'm saying coming back to the macro picture, it's not just that, you know, we have increasing deficits and we need the foreigners to put more and more money in. it's that there's a fiscal story abroad now in some places, a stimulus story abroad, a growth story abroad. And also, let's not forget, we haven't exactly been treating foreigners particularly well uh to try to encourage them to put more money in the US. So, so I I I think I think I think US long rates are flat to up from here. >> Is part of it like the rotation out of US dollarbased assets as well? >> Yes. Yes. Um, you know, the dollar I I'm not where I don't know where we are year to date exactly, but um I think we're down slightly. Last year we're down 9%. Um, you know, the yen's anybody's guess. But but the real thing, you know, even more than I mean, I expect the euro will probably go up against the dollar, but that's not the point. I think the real bigger overarching point is I think all fiat currency, all paper currency is going is going down against real assets, going down against gold going. Okay, that's the key thing. So, we can get into debate, oh well, you know, George, what do you think of the euro or what do you think of uh the yen or this that whatever. It's like the race to zero. The history of paper currencies is they all wind up going the wrong way. And I think the market's gotten wise to this now. And so that's why you look it's it's not just individuals but more importantly central banks foreign central banks have been accumulating gold. Um and one thing just on participation it's it's really remarkable. You look at we'll come to gold and silver later but this rally with the exception of the last couple months where you know US retail investors adopted SLV and GLD as meme stocks which gave me a little bit of a concern. This the bulk of this rally has not been accounted for by American investors. As a matter of fact, if you look at holdings of uh ETFs, uh precious ETFs from American investors, they're lower than they were like a number of years ago. So, I think there's a lot more to go in this rally. Um I think going back to the question, yeah, do I see the dollar lower? Yeah, I do. But rather than just going and shorting the dollar, I think they're better ways to play the lower dollar. That's what I'm trying to get trying to get to. M and then like you know earlier you mentioned like the US like the long bond for example like or that we could see rates where do you see you said north of five like or you see a five handle >> yeah what we 425 or some somewhere thereabouts >> what would be the implications of that just help me understand if you saw that kind of level I don't know if that's if that is if that's the level where you see things headed but what tease that out a bit like what are the implications >> it's a great question uh Um, I know you've had my good friend Melody Hopster on the show. I'm a huge fan of Melody's and she and I have similar views about housing. I think housing is dead. >> Many of the housing bulls expect or long bond yields to uh come down, mortgage rates to come down. Um, I don't think it's going to happen. I mean you had you had you had mortgage you had yields come down somewhat because spreads narrowed but in the overall scheme of things um going back to the question I think if if the long bond is flat to up from here think about what that means for mortgage rates not not happening and so I think the housing market is likely to remain uh more abundant uh and I would stay away from housing stocks as an example um and you think people I know you understand this but many people when they when you talk about rates there's a short rate the long rate I mean nobody borrows individuals don't borrow at at the short end of the curve all right or if they do it's at a much it's at a much higher number and actually the Fed doesn't even control uh the Fed has no control over the long end all right and the Fed >> because they cutting it backed up right >> yeah exactly okay you know I we haven't seen that in you know quite a while so I think it's beyond their control I really do uh And you know, to your question, what's the implication? I think I think if the long if the long end of the curve, if long rates start going up for $50 in double jeopardy, joke, what's a question I'll answer myself, that ain't good for equity valuations. Uh, and you know, I also all lied to that. We got to look at credit spreads. Credit spreads have been incredibly tight, extremely well behaved. So for those that have been looking for a recession, not happening. Not happening. Um and so you know you've got if anything uh as my friend Louis Govikavka always refers to more likely to look at a inflationary boom. In other words economy doing okay. All right but with flat to up prices. You see so many price increases all over the place right now. And so the idea that you know a 10-year money should be at 4.2% or the short rate at 3 and a half or whatever it is. I mean to me it's just nuts. But that's not really the basis of my of my bearishness. I'll put it to you another way too. Here's a better way of thinking about it. So, it's one thing to look at the coupon, the yield that you're making on a 10-year piece of paper, but as I think we spoke last time, the bond price, well, it went up, it went down, I don't know, it's probably flat from where we were last time we're on on together, that's measured in American pesos, US dollars. If you look at in a different unit of account, like units of gold, it's been crashing. In other words, you know, as Alan Greenspan famously once said, um, they were questioning, this goes back 20 some odd years ago, I think it was like 1998 or something. Um, you know, what can you can you guarantee us that social security payments and, uh, will still be made and also social benefits? And he said, "Yeah, we're not going to run out of money. I I guarantee you that. But what I can't guarantee is what the value of that money is going to be." So you can sit there with your bond that's worth a hundred and you're getting your coupon of four and a quarter, but why would you hold that piece of paper? I mean, put it another way. Okay, I was at a conference last fall. I really played around with the audience and I put a chart of the bond market up and we all know the chart of the bond market. And then I put another chart up um except I measured the US bond market in Turkish LRA. We all know the Turkish L is a banana currency. So, so if you're a Turkish investor sitting in Anchora and you look at the US bond market, it's in a huge bull market because measured in Turkish LER it's unbelievable. All right, you say, "Wow, that looks great." I didn't tell people what it was. They said, "Oh, yeah. I like that chart." And then to finish it off, it's like when you go to get your your eyes checked, you know, the eye doctor says, "Do you like it better this way or this way?" I put a chart of bonds up, but I divide the bond market by by ounces of gold. And there the chart down, down, down, down, down. It was, "Oh, that's terrible." I said, 'Well, ladies and gentlemen, it's the same item. It's the same assets, US bond market. Just a question. What's your union account? Is it dollars American pesos or Turkish ler or ounces of gold? So, you know, people may say, "Oh, 6040 portfolio. I got my bonds. I got my income." Blah, blah, blah. I think you should run that walk as fast as you can away from a bond allocation. >> Wow. The 6040 sounds like it's dead, but like, okay, so that's so interesting. And it's like understanding that there's been a real depreciation too that's probably underappreciated still. >> Um we all kind of sense it. We intuit it and I feel like a lot of people on this show definitely do. >> Um does that all tie back, George, to just inflation and how we've seen the purchasing power of the dollar decline? Like what is like where does it all come back to like that? Because it definitely feels like you don't get as much anymore. >> That's for sure. And by the way, Julia, you just triggered me again. You triggered me a lot today. So, people get into this whole inflation discussion. >> Well, if I look at the true inflation, it's only 1.8%. Or if you take the >> I know they're saying that in the comment section. Now, >> if you if you if you if you look at the last 3 months annualized, it's only 1.2. Julia, think about this for a second. All right. >> Mhm. >> Less important than inflation. People don't live on rate of change. They live on price levels. Let me put you this way. Let's say um your cost of living, your mortgage goes up over uh two or three years. Let's say it goes up 30%, 40%. Your rent, okay? Because rents have skyrocketed, right? So let's say your rent, cost of living, mortgage, whatever goes up 30% over 3 years. So 9 10% here. It's a big number. And then let's say in the the next year the rent doesn't get increased. So the bean counters at the government goes, "See Julia, look look >> your rent's not going up." And meanwhile, you're you're dying cuz you just got 30% hike. >> And so and so and so in terms of like your wage demands, you need to catch up. People don't live on rate of change. They live on levels. So this is another dishonest. >> I feel the same way, George. I'm glad you said that. I was literally thinking about this this morning because some of you are saying, "Oh, true inflation shows this." So I'm like, "Yeah, but the prices did not come down from when we saw that big surge postco." >> Yep. >> Like the prices are still there. So it's like, hm. Yeah. It's just that rate of change. >> So yeah. So what that means is the prices are still So what means is the average person is going to say, you know what, I need a way I need I I I need a wage hike to catch up. So that's pressure on wages. >> And are they getting them? That's the other question. >> That's the other question. Or if they're not getting them, their real incomes are suffering. So they're not going out to eat you eat it much and have to cut back. One or the other, Julia. I don't care which way you take it. Neither one is good. >> Hey everyone, I hope you are enjoying this interview. If you can take a quick moment and hit that subscribe button, [music] we are on a mission to hit our next goal of 100,000 subscribers and your support could really help us get there. Thank you so much and enjoy the rest of the interview. And then I feel like there probably other forces at play where it's like, you know, if you have a job, you want to keep your job. So maybe it's like let me keep my head down, not like ask for more money uh to keep up with all the >> and then and then the other thing too, excuse me, I can see the wheels turning on your head and we've talked a lot about the K-shaped economy. It's unbelievable the people I mean it it we have such a disparity of wealth in this country now. >> The people who own the assets, they're long real estate, they're long NASDAQ, they're killing it. All right. >> And don't they benefit from the inflationary environment, too? like if you're the asset holders or or is that just like an illusion of like I don't know but is is there something to that like in the inflationary backdrop that if you're an asset holder it's been great >> it's it has been great past tense as I say Julie what is it that past performance is no guarantee of future returns future results okay so who knows but you know I was just talking to a friend this morning guy was on vacation at a richy island in the Caribbean he's at St. parts actually. And I said, and he goes there, he goes there once a year. And I was like, okay, so what' you what do you notice this time? Yeah, you Julie, I'm sure you have this experience. You go to a place you've been many times before and you notice like, okay, is it cleaner, dirtier, nicer, more expensive? The PE. Okay. So, I said, what'd you notice? He goes, George, the prices are insane. I go, what do you mean? He goes, I go out my wife for dinner. She only has like one glass of wine. The two of them, it's like €300. And they're not going to some like fancy damn place. I was on vacation a couple months ago in an island not so fancy as uh as St. Barts beyond my pay grade, but same thing. I notice how much that the restaurant prices have gone up. So for the wealthy tourists that are going through these places, fine. But if you're the average Joe working in one of these places, like it doesn't work. >> Mhm. Yeah. It doesn't work. Um Okay. I want to give you credit where credit is due. So, you were on the show in May of 2025 and you said you cannot be bullish enough on gold. I don't even know what gold was trading at back then, George. You probably know, but wow, we have seen gold on an absolute tear. And a lot of people who watch this channel, we are not a gold channel, but I will say the audience, I would say most of them probably own gold. They tend to like gold, so they've probably been pretty happy. So, we've seen gold on an absolute tear. We did see that pullback recently, but it's coming back. So yeah, like maybe talk to me about the move that we saw in gold. I take that that definitely did not surprise you and where you see things today. Like where do you stand today on that comment? >> So thank you for reminding me of that. Get them right, get them wrong. It's nice to be recognized when you get it right. Um this is a long-term structural secular story building on what we just discussed in the last few minutes. the driver as to why gold is going up. Again, it's not that the price of gold is going up. It's that the value of the money is going down. People say, "George, when are you going to turn bearish on gold? I'll turn bearish on gold when one can turn bullish on the value of money." I'll turn bearish on gold when you start seeing sensible monetary and fiscal policy out of governments. I'll tone bearish on gold when geopolitical u uh disturbances tone down. So all the drivers this why I go back to being the conversation it's not what's happening it's why is it's happening it's just like when you look at the price of a stock you know a lot of people do what they call resulting they just say oh number go up right well why is it going up okay if you don't understand the why it's not the what the what is the price it's the why okay so your question on gold I think the macro factors that are have been driving gold are still in play um you know trying to call gold on a short-term basis a fool's errand as I mentioned A few minutes ago, I got a little bit worried the last couple of months when it wasn't the wellthoughtout big picture guys you have on your show and and ladies. Uh it was more, you know, SLV became a mean stock. Bitcoin bro wasn't enough juice in that. So, they jump over to SLV or GLD, the silver and gold ETFs. And so, you had a lot of hot money momentum types piling in. And it got so it went up too much too quickly, you know, a zillion% over the moving averages, blah blah blah. Um, I was surprised it went up as much as it did. Not surprised that it came down as sharply as it did, but I put out something on my Substack the other day entitled the song remains the same. Again, we had such a sharp runup, some consolidation. I don't mean to engage in strategist world salad, but I, you know, in the very short run, I don't really know. It could go up, could go down. But the more interesting question, the more important question, the more relevant question for your viewers is not what is gold going to do in the next 30 days. It's not like what's the trade if they're investing, it's like where's gold going to be a year from now. And in fact, if you buy some today, if you don't now, I'd buy some. All right? Um, and if it goes down, you buy more. And by the way, I don't want to sound like Michael Sailor. I don't want to be, oh, and you buy more and you buy more and you buy more. No, >> you're not saying put all of your money in gold either. I'm sure it's like a portion. No. Yeah. And >> and even more important than gold, better than the gold, gold and silver and and that whole complex, the miners to me look much more interesting. Um they, you know, they're leveraged to the gold price. So, as you look at a lot of these, the most recent quarter, I think we haven't had fourth quarter numbers yet, but third quarter numbers, I think they're realizing average prices of, I don't know, 3500, 4,000, something like that. Gold's now 5,000. So, I think you're going to see major major uh positive earning surprises. And I think you could buy pretty much any gold miner. Um I think if the price of gold stays where it is, gold and silver, they stay where they are. Uh I think these stocks can double in 12 months. And if gold and you say, "Well, Julia, Julia, you say, George, how high can gold go?" I don't know. But um if you think about gold relative to inflation, gold relative to money supply, gold relative to GDP, etc., etc., etc., it's easy to come up with numbers like 6,000, 8,000, 10,000. So what I'm trying to So I'm not giving you a particular number, but what I am trying to tell you is it's higher. That's my point. Uh and meaningfully higher. And if we get to a Banana Republic Vimar type scenario, >> all bets are off. But you don't have to believe in that to want to own gold miners is my point. >> You know, you kind of brought up an interesting point. I want to ask you as like someone who's been in the space for 45 years investing. Um it was this idea of like I can't tell you like where it's going to go in 30 days or like even a year. you just know like for the long term you want to own it. Do you think oftentimes on Wall Street we get too caught up into like the short term like what did it do in this 30 days the quarter the year like in terms of performance versus like I'll tell you I've owned gold since August of 2011 and maybe there were some bad times I know right >> I should [laughter] I should be to you what what are you asking me what I think of gold you think of gold >> look I have not sold it but and look uh August 2011 was not the best time to get in but you know like how sometimes we get so fixated on like the time frame like I'm up this amount this percent this year or something. I don't know. Is there something to it that like maybe that's not the way to look at investing is like >> 100%. And let me let me just share with you sort of what the world looks like if you're a real money investor say at Fidelity just as example. >> Mhm. >> It takes it takes a long time to get in and out of positions. So you know if let's say right now we say oh gold's going to go up 20% this week. I'm just making up something stupid. Finale can't take advantage of that. You know, I remember back in the day I was working for Peter Lynch. They did a calculation. I think I think on average it took Fidelity, it took Mellan Fund 6 months to get in and out of a position. So this fixation of you know it's up today, it's down tomorrow. And the volatility, look, the shiny object of the volatility, the hot potato, that that that's the siren calls beckon. Ignore them. Ignore them. Okay. You got to be a fundamentally invasive based investor. One of the things that's really struck me recently, I'm horrified. I digress. One story. You'll like this story. So, my Substack, which we'll mention later, um we're starting to write individual stock reports and I I recommended Southwest Airlines uh two weeks ago. I got lucky. They had a good quarter. Stock did pop 20% in one go. It's not recommended. Hey, I by the way, not investment advice. Do your own work. But I still like that stock a lot. Um, anyway, I had to write a report. I hadn't written a report for quite a while. So, I go back, I dust it off of my old Fidelity report. What was on an investment community report? Name of the stock, elevator pitch, few sentences, strengths, weaknesses, positive, negatives, what could go wrong, what could go right, catalyst, income statement, balance sheet. Pretty simple. Get to the to the kernel of the issue. So, I wrote this report and it's funny. I I put it in chat GPT too. I was trying to get it to fix some things and you know the chat GPT it hallucinates. It lies. And what's really funny I noticed the research that's out put out nowadays they don't talk about fundamentals or valuation. It's all number go up. It's all what's chart look like you know what's what's the story? What's the chart? That's not investing. That is gambling. Okay. And the problem is the problem is that approach has been so successful in recent years. That's all and you have so many investors came in the market postco that's all they know. I'm sure you're familiar with the Dunning Krueger effect. You know, it's when you okay self-confidence. So I've coined a new it's a I'd like to kind of wire get wire people up. >> When I find one of these newbies that that can't analyze companies to save their life, I say, "Aha, there goes another graduate of the Dunning Krueger Institute of Finance." Okay, these guys are all just it's like old man, you're a boomer. That's the pjorative term they use to describe me. They're not doing the work. Okay, and it's fine when pigs are flying. But one of the things we'll get into, I think we're witnessing the death of speculation right now. So all the meme stocks, all the all the AI nonsense, it is nonsense. all the um crypto stuff things where there isn't a wellthoughtout fundamental case with a valuation underpinning that was fine as long as the m money printer go burr but I think we're in the process of seeing that change. >> Wow. Okay. So that's an interesting idea the death of speculation because I mean I guess for the last I don't know how many years you've also had like the passive bid in the market like you point out and look you worked for Peter Lynch. have this book on my bookshelf and it makes me wonder are we going to go back to a stock picker market and is picking stocks a lost art you think because you're kind of just all just even writing at fundamental research >> Julia is a lost art >> thank you so much for that question this is was not rehearsed I love that question okay for years stock pickers are beginning killed all right we all know why okay mag seven concentration blah blah blah blah blah the passive bid I'm here today to tell you, and I've been saying this for a couple months now, that game is over. At least in 2026, I think the S&P, there's so many ways to beat the S&P now because the S&P is um anchored by, you know, a heavy exposure to MAG 7. Those are inextricably linked very much identified with the AI trade um and the technology uh situation. And I think what's happening now the rotation, the reflation and the rotation into um foreign markets, commodities, emerging markets. Some people like to say small caps. I think small caps will outperform large caps. And I don't want to get into a growth value argument, but I think small caps will outperform large caps. But it's not so much because I'm bullish on small caps. It's because I think large caps are going to do worse. Small caps might be flat and large caps are going to go down. So I think small caps will will outperform large caps. But the but the more direct way to answer your question I would look at the equal weight S&P the RSP that's an equally weighted index of the S&P stocks and that has been badly lagging the S&P which is cap weighted for quite a number of years. You're already seeing it starting to outperform and I think that's going to continue. Let me give you one anecdote. I can recall in the 80s when I was investing um for Fidelli the Fly overseas fund in Japan. You know Japan we all laugh at it now. It's hard to believe that actually was long that market at the time. Japan had the bull market of all bull markets. It peaked in the last day of 1989. And the Japanese market at its peak accounted for 2/3 of the EHA index. Europe, Australia, Far East. Think of that as a non- US S&P. So if you're investing in foreign markets, twothirds of your benchmark was Japan. I think today it's like 10% or 15%. It's some crazy low number. So the point was if you didn't own Japanese stocks, you had no way of keeping up with the market. And the Japanese market was on 60 times earnings 10 time and you had Japanese banks on 10 times book value and 100 PE. So any fundamental investor would say this is insanity. This is insanity. I I can't buy that. But if you're defining a risk as career risk like I don't want to underperform the market. You had to own Japanese banks. You had to own the Japanese stock market. All right. So in similar fashion fast forward read what's the read across? Had you if you hadn't owned MAG7 these last few years you were dead. There were good fundamental reasons why it worked. the earnings growth was superior. Earnings growth for the 493 was terrible. Blah blah blah blah blah blah. But what happens? I think more the the valuation on those stocks really soared to to to a place where they're not terribly attractive right now. And more importantly, I think you're looking at significant multiple compression as the wheels come off the AI story. So, I actually think that um this is a great time to be a stock picker. to finish the point on Japan. Once you got past a peak in the Japanese market for the next 20 years to outperform the non US index, all you had to do, Julia, just one thing, just one thing and one thing only have zero in Japan and index everything else. You'd have to pick stocks. You just make one decision. >> And I think that's what we're looking at in the US. I know that's that's very out of consensus, but I think it's definitely a stock pickers market. It's definitely a stock picker market now. >> Wait. Okay. So why do you think it's so out of consensus? >> Because you know why? Because it's behavior. Anyone who's owned their their their index funds, put your money into a lowc cost index fund. Active managers owners underperform. Okay, that's worked for how many years now? And now everyone's like, oh the narrative, oh these are great. Yeah, they are great companies, but everything has a price. Okay, so I think it's I think it's recency bias. And I don't want to say they had been fooled, but cuz they had been fooled. They made a lot of money. But Julie, you've heard the line. I think it's from is it Mark Twain or Oscar? I think it's Mark Twain. It's it's harder to convince someone they've been fooled than to fool them in the first place, you know. So I think there's a there's an anchoring and and the other thing I would say I'll remind people, you know, fund flows. Money follows performance. That's FOMO. At Fidelia, we'd see it all the time. You know, you could have a hot a hot fund, a hot sector, but the money only comes in once it's gotten really hot and it only leaves once it's gone down a lot. And so I think we're in that in that throws of that changing of the tides. The tides come in on all the mag seven and now it's starting to go out, but it's not obvious to everyone yet. I think it's going to soon become obvious. >> Okay. Very interesting. So would it be fair then George would you characterize yourself as bearish or are you just like picking opportunities out like what >> what's a fair characterization? >> Very good question and no I'm not bearish. I'm bearish on certain things but as I said it's rotation. So for instance >> got it. >> Aside from gold and precious metals and and and base base metals and copper and all the rest I love energy. Love energy. >> I want to talk to you about energy. Yeah. love energy. Okay, energy is so out of favor. It's only 3% of the S&P. Oil price has been depressed for quite a while. It's starting to pick up recently. Um sentiment's very bad. Started to improve. Uh there's this nar going around the world's washing oil blah blah blah blah blah. Uh if you actually look at consumption, it's quite healthy. Um and you know, at these level, this level of oil prices, it's a it's a deterrent to to exploration and future finding new production. And as you know Julia, depletion is such that we lose about 5% of production every year. In other words, you have to find 5% more oil just to keep the production stable. And so um spot oil prices, you know, they live in the in in the present. The equities live in the future, i.e. it's discounted cash flow future profits. So I think energy equities are incredibly attractive. I particularly like the oil service companies. The O is the ETF for that. You know, Schlumbumberge, everyone knows that's the biggest stock. There's some smaller, more interesting ones in there as well. But, you know, I was asked at the turn of the year in another interview and I don't like doing picks, but you for the year ahead. But, you know, I had to come up with something sensible and I didn't want to mention gold again because people are tired of hearing gold and silver. So, I wanted to come up with something new. >> They're not that tired of it. But, >> no, you're you're not. Yeah. But, you know what'll happen, but you know what I'm afraid of? People see this and they'll be like, "Oh, it's another gold." And by the way, I am not a tinfoil gold guy. Okay. I'm an equity guy. All right. This is this is totally opportunistic on my part. Save it. Save it. I wanted to come up with something that wasn't um a top of mind for everyone and where I thought the riskreward was really favorable. I energy might not work, but if it doesn't work, you're not going to get hurt. So, it's kind of like tales you win, heads you don't lose. So, um I like energy a lot. You know, they're you can pick your pick your names, but um I think you know, think of it this way. The entire energy sector is I think 3% of the S&P. I think Nvidia is like 6% of the S&P. So, you know, all it takes is is, you know, we talk about mag 7 being whatever 30 35% of the market. All it takes is a couple% of the money to come out of that and go into energy. >> $50 in double jeopardy. Uh Julia, what do you think the energy stock prices are going to do? >> Yeah. Um go higher. But so that's the rotation for you is the rotation out of tech into energy. >> Yep. >> Got it. Okay. Um the oil price is interesting too like where it is today. I don't I want to say it's probably like 64. I have not looked today. Um where is it anyway? Like 64.94 a barrel. >> Um >> do you think that the oil price is going to go higher? Because we also talked about inflation too at the top of this and we do know that that is an important component. Um >> help me tie it together too. >> Yeah. No, it's a good question. So a couple things. So, one, I'd like to point out the oil stocks, the equities, >> they've been doing incredibly well the last couple of months, despite the oil price not doing a hell of a lot. >> So, the stocks, as I say, live in the future, they're starting to discount that maybe out there things are going to get better. >> Um, as far as the oil price is concerned, trying to predict oil prices is a fool's error, particularly on a short-term basis. Okay. But again, looking out anything but the short term. I think oil prices need to go higher to encourage future uh uh exploration. There is some conspiracy theory uh around and I know you've had some pretty good conspiracy experts on your show in recent months. Some have speculated that um there have been deals cut behind doors. The Trump administration decided to keep the oil price down and had the elections blah blah blah blah blah. I don't know if that's true. Wouldn't surprise me if it is. Um, and that would just add that would pour more gasoline on my fire, no pun intended. So, I I I don't think there's a lot of downside in the oil price. Is it going to go up a lot in the short run? I have no idea. But my my my view on on energy stocks doesn't need oil prices to go up in the short run. Eventually, they will go up. But you look at you look at the operating leverage in a Schlumbumberge or a Tidewater or Valaris. Um, those are two those all service companies. You don't you don't need higher prices. You just need more activity. And I think we're going to see a lot of that. And oh, by the way, I'll preempt the question. I don't think you're going to answer it, but if you do, and then you talk about the noise, forget about Venezuela. That is that is a nothing burger. All right. So, going back to the volatility and noise of too much short-termism. That's one thing. Fade the hot takes. Fade the hot takes. I have one analyst on, a really smart guy. I love I love Jay. He says, he says, and this is not a political statement. It's not likes Trump, hates Trump. He comes to hate Trump. That's beside the point. He goes, "His superpower, his superpower is ignore what Donald Trump says." >> Wait, who's this? >> Okay, this is Jay Pilowski. And the reason he No, you have to have Jay on the show. You'll really like him. By the way, he's a he's a Duke guy. I don't know if you can deal with him. He's a Duke. >> I went to Carolina, so I know. >> No, I can handle the Jay on. He He played football at Duke, actually. >> Okay. I I'm tired of hearing about the Blue Devils and the basketball and all that stuff. Anyway, so Jay's like, he goes, "My superpower is I ignore ignore what Donald Trump says." And what he means by that, it's not I hate Trump. It's he introduces so much noise into the markets. Traffs are on, they're off, they're up, they're down. It's taking your attention away from what's really important, which are the fundamentals. And by the way, you know what's really funny, Julia? Think about everything we've been talking about previously. Gold, AI, tech, this, that, whatever. As I said to somebody yesterday, tariffs. What's that? No one's talking about tariffs [laughter] now. Like, like that's so yesterday, you know? No one talks about it anymore. >> So, so the answer is avoid hot takes. Avoid hot takes. >> Okay, that's a good mental model. All right. Are you shorting anything right now, George? >> Oh, yeah. >> What do you Yeah, tell me. >> So, run don't walk from all the AI related stuff. So, I think the NeoClouds, the core weeaves, NBIS, cipher, all these things is was I love, you know, it's basic. I love the So, I think the wheels are coming off the AI trade and and let's back up. Um, AI is an important breakthrough. No argument about that. But I think the benefits of it have been greatly exaggerated. You probably heard from others, Julia, waiting to see the use cases. Like, who can make money from using all this stuff? And um, it's not clear that's got a commercial payoff remotely sufficient to justify the trillions of dollars that are slated to be spent on this project. The Chinese are doing it with deepseek at a fraction of the cost. Maybe 10% of the cost. Is it as good as ours? No. But is it good enough? Yes. Um, and so I I think I think the adjustable market for AI, it's it's not an efficiency revolution. AI is dumb. By that I mean it can't invent anything. All it does is it makes predictions. It aggregates existing data. Goes all over the internet and tries to figure out based on looks for patterns and based on A will it be followed by B and by C. But for AI cannot solve cannot cure cancer. AI can for on the other hand in 30 seconds when we're done with this show can give you a very nicely organized summary of what we discussed. But you know that only goes so far. And so is that enough to justify the trillions of dollars that are being going to be spent on this? And I think the answer is no. Um I think AI is designed to fail. And so I think all the and by the way there will also will be winners and losers within AI. So for instance, you look at Google absolutely killing it. All right. On the other hand, you know, Microsoft bet on the wrong horse, chat GPT, and so they they're in big trouble with that. You look at Elon Musk thing, they're bad. You know, the anthropic that's doing really well. U so there's winners and losers. But I think overall the fervor over the AI trade is is now starting to recede. And more importantly, it doesn't matter what I think. The market will tell you or as my Greek friend uh Stavos always says it will show us. The market will show us. So what's important is not your opinion or my opinion, Julia, but and so you might say, well, George sounded smart. The bears always sound smart, but the market will render a verdict as to whether or not what I'm saying is true. And I would just for $50 in double jeopardy, and whereas I wasn't short these things last year, now I would be short. I am short a little bit. Um, you know, in a bull market, companies rewarded for bigger and bigger spending. You know, I'm gonna spend 100 billion, 200 billion, 500 billion, and stock number go up, stock prices go up. When the market starts to call into question though the legitimacy of those actions, it votes with its feet and price goes down. And so, you're starting to see that. Look at Oracle, for instance. Oracle went up, what was it, 30 or 40% in one day a few months ago when they had that crazy announcement. It's crashed back down. It's lower now than it was before that announcement. Okay. Um the the semiconductor stocks have been on fire. Um they've done nothing wrong except for the fact that they've gone up so much and they're so expensive. I don't think the market's going to pay for any more improvements from here. So I think AI trades are a short. I think Nvidia is a short. I think Tesla is a short. I'm naming names. Um software. I learned a new phrase yesterday, Julia. Maybe you know this already. They had what's known as SAS mageddon instead of Armageddon or Volmageddon. SAS mageddon. No. SAS companies. So, here's a situation where, you know, everyone's concerned whether concern [clears throat] is right or not, who knows? I think it is right, but everyone's concerned that many of these software uh companies are going to be upset by AI. Um, and whether that turns out to be the case, who knows? But the market's voting with its feet. And so, valuations come down. Earnings haven't changed, but multiple start to come down. It's discounting a slowdown. And as you know, valuations expand and contract with accelerating decelerating growth. And so I think the software stocks are shorts. Uh I was chuckling. I couldn't believe it the other day. Someone was pointing out a stock I think was service now. I don't really know much about the company, but whatever. So look at the chart. Looks terrible. Absolutely horrendous. And then look at the valuation. It's down by like I don't know 40 50%. It's still on like 73 times earnings, nine times book value. I'm like are you crazy? Now, the problem is these stocks did so well for so long. People, you said earlier, why don't people sell? Because they think that, oh, number don't worry, it'll go back up. It'll go back up. It'll go back up. It's like a little boy, the cried wolf. And throughout the cycle, it has kept going back up. But one day, it won't go back up. And I think that's where we are with these things. I think people are going to become have become will increasingly become concerned about the impact of AI on um on on software. So I think the whole tech complex is under suspicion and that's why I said before you know go to if nothing else just go from S&P market cap weighted to equal weighted I think you're going to improve your performance. >> Yeah. So like again like the theme here is rotation understanding where you see that headed. You've been quite um in this conversation descriptive of like what's going on predictive of like where things are headed. Um, and you've been prescriptive, but let's just drill down a little bit more for investors. What should they do like from your vantage point? >> So, so for the average investor who's probably been told by and listen it, the markets are are more difficult now than any time at 45 years. So, if investors are home and confused, don't worry. Good company, right? Nobody really knows what's going on. Let's be blunt about this, okay? I'm sorry. I love your show, Julia. You're great. You got great guests. But when I watch mainstream media and these guys come on with this just unwavering conf confidence and then like two weeks later they come back and the exact opposite happened and it's like h oh oh but we sold we sold. So anyway um so in terms of trying to trying to help people make money which is also what my conference is about. So everyone's been you know in the 64 to portfolio they already should have an idea that bonds are a disaster. bonds have have lost money I think three four years in a row now and given my outlook for spending and debt and inflation I think they're going to continue to do poorly so I would take some of my bond money and put it into gold uh I would have nothing in bonds but even Morgan Stanley take Michael Wilson is a good strategist he's got his shares of share of good and bad calls even he said take take half of your bonds and put them into gold so 20% gold so I take some of my bonds and put into gold I personally would be I have no bonds get out of bonds and then as far as equities go mean shorting is not for everybody. Don't you don't have to go short, but I would the S&P has too much tech in it. I would go to the RSP, which is the equal weighted tech. Um, and I think that's going to outperform uh the SPY, the S&P. I'm a bit suspicious of the Russell, the IWM, Russell 2000. Um, it'll probably outperform, but a lot of bad companies in there. I mean, I think it'll outperform the S&P just because S&P is not going to do well until my outlook for tech, but I think 40% of the companies in the Russ are lossmaking. So, I'd stay away from that. Um, so, so, so, so own gold. Um, get out of your bonds, go to Equalade S&P, put some money abroad. Put some money abroad. It could be the EM or any other emerging market fund. Or if you want a particular emerging market, I happen to like Brazil. I happen to like China. Put some money there. I think I think foreign markets and are going to vastly outperform the US market. They already have. last year to from memory I think the S&P was up 16 and I believe EM emerging markets was up 33. So it's not like I'm predicting, you know, it's not like, oh, you know, something that goes in motion stays in motion. It's already happening. All right? So it's not like some crazy prediction. So I think if you just do those few things, get some money out of the country, go to equal weight, sell your bonds, buy some gold, buy some energy, you don't have to be crazy like me and short stocks, but I think for the average person, that's going to really improve their performance. >> George, I I've had a lot of fun having you back on. Um before I let you go here, you have a conference coming up. You mentioned that. Um I want you to take a moment, let folks know about the conference, how they can attend or join. Um and uh also you write a Substack, you host a bunch of spaces on X and also just leave them with some parting thoughts. So just take the next few minutes. Um the floor is all yours. >> Thanks Julia. So we're having a conference um on March 11. Um you can go on my Twitter or on my uh Substack. All the details are there. This is unlike any other conference that you would have been to. And we're basically having 15 um well-known independent thinkers come in and give pick, stock picks, prescriptive ideas, not well I think the GDP is going to do this and the yield curve is going to do that. No, how do we make money? That's what this is all about. How do we make money? And this is like an all-star team of investors. These are all guys are on the buy side run their own funds or they have their own independent research firms. So they're eating their eating their own cooking. Eat what you kill. May not get it right, but the incent the incentives are properly aligned. The quality of this event was inspired by over the years and Julia, I'm sure you've been to some of these. You go to these dinners where they have some really highowered investors and you get to hear what they're saying. The average investor doesn't have exposure to that. That's what this conference is designed to do. And I just I I'm blown away. Okay, you I bet it's 45 years. Julia, this is only $99. I mean, I'm not going to make much money out. It's not the point. The point is I'm trying to give access to people, access to to the folks so they can hear from top rate investors what they're thinking. Uh, you know, as an example, I don't want to embarrass them, but you know, Robert Mullen from Marathon advisers out in San Francisco, his fund was up over 100% last year. 100%. Uh, Tom Chenos, brother of Jim Chenos, had a great short idea. I think it was Fresh Pat last year. um you know uh Adam Parker, former uh domestic ex strategist for uh Morgan Stanley. I mean, these are not fly by night guys. This is this is really first rate. In this conference, I promise you this. You may not make money, but you're going to enjoy it and you're going to learn a lot. And I'm telling you, this conference is better than any other conference you'll ever see. And the reason I say that is because it's not my ideas. No, it's like I'm putting on a concert and I'm able to gather the best musicians in the world to come perform. And so as opposed to, you know, if you're at Goldman Sachs and Morgan, not to pick on them, they have their own analysts and, you know, they have their own conflicts of interest and so on and so forth. This is like an all-star team. You're a basketball fan, Julie down in Carolina. Imagine if I got to pick instead of just being stuck with the Duke team, I could go around the ACC and pick the best player from each team. Okay, that's what this is. All right, and so you know, Tavi Costa, Don Durret, two of the leading gold guys. Tavy's funds were up over 100% last year also. All right, we got as I mentioned, Robert Mullen is doing gold. We got a short seller guy, Tom Thornon, who I think you've had on. >> I love Tommy. >> Tommy, I love he's a dear friend. He's going to be on. He had a Door Dash short last year. It was great. Anyway, it's a And Jay Pilowski, by the way, I mentioned earlier, he is the former head of emerging market strategies for Morgan Stanley. He's given the keynote and he'll tell you about his secret secret uh power about ignoring Trump. In fact, Julie, we got to get we got to get you into the conference. So anyway, it's I promise you, you're going to come with a lot of ideas. $99. I mean, listen, last year I did a couple of these, they were great successes. The content was phenomenal. But the first time I did one, I want to have proof of concept. I drastically cut the price just because I want to have a big outing. And if this is successful, I will do this on a quarterly basis. Where else can you get this? Nowhere. So, I just wish in my career I had this open to me. I mean, you go to dinners, you hear guys, you know, talk their book, whatever. But imagine in your own home, you can watch 15 guys, 20 minutes a piece. The replays will be available within 24, 48 hours. It doesn't get any better than that in my opinion. George Noble, CIO of Noble Capital Advisors. Thank you so much for being so judous with your time, all of your knowledge, your wisdom, helping us learn and get better. This was such a fun conversation. Really appreciate you and I look forward to our next conversation and best of luck with the conference. >> Thank you, Julia. Good to see you. Take care.
George Noble: We're Witnessing the Death of Speculation
Summary
Transcript
If you think about gold relative to inflation, gold relative to money supply, gold relative to GDP, etc., etc., etc., it's easy to come up with numbers like 6,000, 8,000, [music] 10,000. So, what I'm trying to So, I'm not giving you a particular number, but what I am trying to tell you is it's higher. That's my point. Uh, and meaningfully higher. And if we get to a Banana Republic Vimar type scenario, all bets are off. But you don't have to believe in that to want to own gold miners is my point. George Noble, CIO of Noble Capital Advisors, also the former um assistant to Peter Lynch and also someone who ran the number one mutual fund in the country at the time, which was the Fidelity Overseas Fund, a former guest of the show. Welcome back. Great to have you again, George. I really enjoyed our conversation from was well almost over a year ago, nine months ago at this point. I don't know, a long time ago at this point. um spring of 2025. Great to see you. Really appreciate you taking the time, George. >> Thanks for having me. Thanks for putting up with me. >> This is going to be fun. Uh last time it was fun, too. And you made some preient calls, which I will get into. But George, you watched the show, you listened to the show. Um it's been a while since we had you on. Feel like gosh, a lot has transpired in that time. So, since it's been a while, can we just start big picture? Can you set the stage for us? Uh set the table. What is the big picture macro view for you today? Where do you see things headed? What's been on your radar of late? Um your assessment of the economy globally, domestically. We can throw markets in there. Um let's take all the time you need to set the table when it comes to that big picture macro view. >> Thanks Julia. So much has been made of the debase so-called debasement trade of late and that's really the narrative that I'm running with. um you know there there is a sometimes the macro forces aren't that significant but other times they are and this is one of those times that they are um the whole basis for they very kindly reminded me of the call we got lucky last time about calling for it to buy gold and silver and precious metals I think that's still very much on the cards essentially um if you look at um past you look at what's going on right now you see a lot of move different moving prices you see gold going up crypto going down. The dollar's been weak. Emerging markets are doing well. Uh commodities are on fire and AI trades now losing losing ground. And there's a lot going on. They may seem disperate, but actually they're all connected in a way. And it's it's the it's the influence of the macro um settling out over the entire investment landscape. you if you go back you know and essentially this debasement trade all has to do with I think that the bill is coming for the um reckless policies that we've had both fiscal and monetary ever since Nixon took us off the gold standard in 1971 um we've just been spending more and more running running bigger and bigger deficits and you keep doing it until you can't uh and I think we're kind of getting to that place or at least we can do it but the market's starting to vote with its feet um and so this is the macro overview that's informing my opinion. I'm both a bottomup guy, macro guy, chart guy. I try to try to synthes synthesize a coherent view putting all those pieces together. But you know, if you think like think back to past cycles, I mean 1998 it all when we had the Asian contagion um and you know the whole long-term capital uh crisis that all started seemingly with a little incident in Thailand where the Thai bot blew up. Okay. But that really had to do that was just a manifestation of the giant carry trade coming unstuck. Um and then and then we know what happened thereafter. If you look at uh 2008 the great financial crisis that all started from uh cracks and fissures from the an obscure part of the uh housing finance market where that US housing market blew up and we all know what happened after that. So I think what's happening now is we're devaluing um u um uh paper money. Um we've made all kinds of promises. Many of your guests have abley spoken about this but you know it's unsustainable and I think the market's starting to sniff that out. Um you know you look at the increasing uh uh debt that we're accumulating and by the way Julia I'm not I mean you've had some other guests on who are much more expert at economics than I am even though I did study the disable science at Yale. Um, I consider myself more of a stock guy, but you know, there's a pretty good correlation between uh debt and uh interest rates. And um you know, if you look I I read this the other day. Um you know, many people were saying, well, 200 26 you're going to have lower deficits than in 25. Not true. I read an IMF paper a couple weeks ago. I think they're calling for deficits to GDP of 7.9% this year. That's up from like six something last year. So deficit's getting worse. Um, and it's pretty clear that, you know, they're going to have to just print more money to finance this whole thing. Raising taxes isn't really a tenable um a tenable option. They're spending money like drunken sailors. We talked about this last time, but you know, you'd almost think that modern monetary theory is okay. It's like, hey, Julia, what are you worried about? We're running this huge deficit. Nobody cares. Like, look, mom, no hands. So, my view is, and I, you know, I think Ed Edardi coined the phrase the bond market vigilantes. I think they're going to keep doing this until the bond market cracks. Uh, at a minimum, I think rates are coming down. So, they may want to cut rates, which I, you know, there's been a lot of talk about a couple rate cuts in 26. I really don't know. But if they do, I suspect it's going to blow up on them. It's going to backfire. I.e. long-term yields, bond yields are going to go up. The curve will steepen. So, for me, um, I don't see a recession. Um, I think inflation is sticky. Um, if anyone believes the official inflation numbers, I got a bridge to sell you, but I think inflation is sticky and probably heading up. Also ties into my oil price outlook. I think oil prices are headed up. Um, you know, consider the inflation numbers that we've seen are all against the backdrop of a well- behaved oil price. So, um, I think bond yields are uncooperative. I think they're going to have to print more money to um to to fund all these promises. I mean, Julia, think about this for a second. Imagine, imagine you had income of $5 billion and you were spending $7 billion. You, Julia Lar Ro, okay? You had 5 billion in income, 7 billion in in in um in spending. It's actually 7.5 billion. And you owe the bank 38 billion. And then you have some offbalance sheets obligations of, I don't know, 125 billion. And you go to the bank, you say, "Let me some money. I want to borrow money for 10 years. Like with inflation where it is 3-ish% 2 3% lending you money at 4.3%. Are you crazy? So I think bond yields are just way too low. U I it wouldn't surprise me if you see yields north of 5% um or more. Um and so I think I think as I look at markets overall, I'm kind of going all over the place here. I think uh 26 is going to see a lot of volatility. It's going to be very different from what we've seen previously. And as I think I shared with you before we started, my big theme for 2026 is uh rotation. Rotation within markets. In other words, don't look at the indices, look beneath the surface of what's going on. And why is that going on? That those are the really the key things. Don't just worship at the altar of price. >> Yeah. I want to get into the um the theme of rotation, but just let's stay on the macro bit. Um because I think it's also really important to understand like the backdrop and probably the regime in which you're operating in because that probably informs too like how do you want to be allocated when you're looking under the surface of the opportunities. So what I was hearing from you was the bill's coming due the math eventually is not going to work out and you want to be in places where there's stores of value. Correct. >> Is that fair to say? >> Correct. >> Mhm. Okay. So Ian just add to that please if I may. I'm told I like to interrupt people. Sorry about that. >> No, go for it. >> My mind just keeps going at such a frengatic pace. Um, you know, all the money kind of came to the US the last decade or so. US assets well outperformed the rest of the world. And look, US exceptionalism and and by the way, it wasn't random. US profit growths were staggeringly good compared to the rest of the world. So, you know, relative talk about equities now, relative um price follows relative earnings. So, it was justified. But um we got to the point now where um there's there's a story has been emerging in other in other areas now. So like for instance Europe was more abundant for many years. I don't want to get into politics. Let's talk about the effect of politics. The fact that Europe's now had to mobilize now and is spending tons fiscal stimulus particularly for defense spending. So all of a sudden there's a fiscal pulse in Europe. They were in a fiscal stray jacket previously. Okay. So you look at bon yields u okay they're soaring. All right, European bank stocks have been through the roof. They basically trade lock step with European bond yields. You look at what's going on in China. All right. Uh China, you know, the economyy's not been so great. Um and they've been very um uh tentative about about monetary stimulus, but it looks like they're take they're taking the gloves off on that. Now, the Chinese market, the Chinese market handily outperformed the US market. This is mindboggling. It's not Some people say, "Oh, China." Okay, China handily lapped the US market in 25. It even beat the US market in 24. So I expect China, the Chinese stock market and historically haven't been a fan of Chinese equities. I think that's going to outperform the the US uh again in uh in in in 26. So what I'm saying coming back to the macro picture, it's not just that, you know, we have increasing deficits and we need the foreigners to put more and more money in. it's that there's a fiscal story abroad now in some places, a stimulus story abroad, a growth story abroad. And also, let's not forget, we haven't exactly been treating foreigners particularly well uh to try to encourage them to put more money in the US. So, so I I I think I think I think US long rates are flat to up from here. >> Is part of it like the rotation out of US dollarbased assets as well? >> Yes. Yes. Um, you know, the dollar I I'm not where I don't know where we are year to date exactly, but um I think we're down slightly. Last year we're down 9%. Um, you know, the yen's anybody's guess. But but the real thing, you know, even more than I mean, I expect the euro will probably go up against the dollar, but that's not the point. I think the real bigger overarching point is I think all fiat currency, all paper currency is going is going down against real assets, going down against gold going. Okay, that's the key thing. So, we can get into debate, oh well, you know, George, what do you think of the euro or what do you think of uh the yen or this that whatever. It's like the race to zero. The history of paper currencies is they all wind up going the wrong way. And I think the market's gotten wise to this now. And so that's why you look it's it's not just individuals but more importantly central banks foreign central banks have been accumulating gold. Um and one thing just on participation it's it's really remarkable. You look at we'll come to gold and silver later but this rally with the exception of the last couple months where you know US retail investors adopted SLV and GLD as meme stocks which gave me a little bit of a concern. This the bulk of this rally has not been accounted for by American investors. As a matter of fact, if you look at holdings of uh ETFs, uh precious ETFs from American investors, they're lower than they were like a number of years ago. So, I think there's a lot more to go in this rally. Um I think going back to the question, yeah, do I see the dollar lower? Yeah, I do. But rather than just going and shorting the dollar, I think they're better ways to play the lower dollar. That's what I'm trying to get trying to get to. M and then like you know earlier you mentioned like the US like the long bond for example like or that we could see rates where do you see you said north of five like or you see a five handle >> yeah what we 425 or some somewhere thereabouts >> what would be the implications of that just help me understand if you saw that kind of level I don't know if that's if that is if that's the level where you see things headed but what tease that out a bit like what are the implications >> it's a great question uh Um, I know you've had my good friend Melody Hopster on the show. I'm a huge fan of Melody's and she and I have similar views about housing. I think housing is dead. >> Many of the housing bulls expect or long bond yields to uh come down, mortgage rates to come down. Um, I don't think it's going to happen. I mean you had you had you had mortgage you had yields come down somewhat because spreads narrowed but in the overall scheme of things um going back to the question I think if if the long bond is flat to up from here think about what that means for mortgage rates not not happening and so I think the housing market is likely to remain uh more abundant uh and I would stay away from housing stocks as an example um and you think people I know you understand this but many people when they when you talk about rates there's a short rate the long rate I mean nobody borrows individuals don't borrow at at the short end of the curve all right or if they do it's at a much it's at a much higher number and actually the Fed doesn't even control uh the Fed has no control over the long end all right and the Fed >> because they cutting it backed up right >> yeah exactly okay you know I we haven't seen that in you know quite a while so I think it's beyond their control I really do uh And you know, to your question, what's the implication? I think I think if the long if the long end of the curve, if long rates start going up for $50 in double jeopardy, joke, what's a question I'll answer myself, that ain't good for equity valuations. Uh, and you know, I also all lied to that. We got to look at credit spreads. Credit spreads have been incredibly tight, extremely well behaved. So for those that have been looking for a recession, not happening. Not happening. Um and so you know you've got if anything uh as my friend Louis Govikavka always refers to more likely to look at a inflationary boom. In other words economy doing okay. All right but with flat to up prices. You see so many price increases all over the place right now. And so the idea that you know a 10-year money should be at 4.2% or the short rate at 3 and a half or whatever it is. I mean to me it's just nuts. But that's not really the basis of my of my bearishness. I'll put it to you another way too. Here's a better way of thinking about it. So, it's one thing to look at the coupon, the yield that you're making on a 10-year piece of paper, but as I think we spoke last time, the bond price, well, it went up, it went down, I don't know, it's probably flat from where we were last time we're on on together, that's measured in American pesos, US dollars. If you look at in a different unit of account, like units of gold, it's been crashing. In other words, you know, as Alan Greenspan famously once said, um, they were questioning, this goes back 20 some odd years ago, I think it was like 1998 or something. Um, you know, what can you can you guarantee us that social security payments and, uh, will still be made and also social benefits? And he said, "Yeah, we're not going to run out of money. I I guarantee you that. But what I can't guarantee is what the value of that money is going to be." So you can sit there with your bond that's worth a hundred and you're getting your coupon of four and a quarter, but why would you hold that piece of paper? I mean, put it another way. Okay, I was at a conference last fall. I really played around with the audience and I put a chart of the bond market up and we all know the chart of the bond market. And then I put another chart up um except I measured the US bond market in Turkish LRA. We all know the Turkish L is a banana currency. So, so if you're a Turkish investor sitting in Anchora and you look at the US bond market, it's in a huge bull market because measured in Turkish LER it's unbelievable. All right, you say, "Wow, that looks great." I didn't tell people what it was. They said, "Oh, yeah. I like that chart." And then to finish it off, it's like when you go to get your your eyes checked, you know, the eye doctor says, "Do you like it better this way or this way?" I put a chart of bonds up, but I divide the bond market by by ounces of gold. And there the chart down, down, down, down, down. It was, "Oh, that's terrible." I said, 'Well, ladies and gentlemen, it's the same item. It's the same assets, US bond market. Just a question. What's your union account? Is it dollars American pesos or Turkish ler or ounces of gold? So, you know, people may say, "Oh, 6040 portfolio. I got my bonds. I got my income." Blah, blah, blah. I think you should run that walk as fast as you can away from a bond allocation. >> Wow. The 6040 sounds like it's dead, but like, okay, so that's so interesting. And it's like understanding that there's been a real depreciation too that's probably underappreciated still. >> Um we all kind of sense it. We intuit it and I feel like a lot of people on this show definitely do. >> Um does that all tie back, George, to just inflation and how we've seen the purchasing power of the dollar decline? Like what is like where does it all come back to like that? Because it definitely feels like you don't get as much anymore. >> That's for sure. And by the way, Julia, you just triggered me again. You triggered me a lot today. So, people get into this whole inflation discussion. >> Well, if I look at the true inflation, it's only 1.8%. Or if you take the >> I know they're saying that in the comment section. Now, >> if you if you if you if you look at the last 3 months annualized, it's only 1.2. Julia, think about this for a second. All right. >> Mhm. >> Less important than inflation. People don't live on rate of change. They live on price levels. Let me put you this way. Let's say um your cost of living, your mortgage goes up over uh two or three years. Let's say it goes up 30%, 40%. Your rent, okay? Because rents have skyrocketed, right? So let's say your rent, cost of living, mortgage, whatever goes up 30% over 3 years. So 9 10% here. It's a big number. And then let's say in the the next year the rent doesn't get increased. So the bean counters at the government goes, "See Julia, look look >> your rent's not going up." And meanwhile, you're you're dying cuz you just got 30% hike. >> And so and so and so in terms of like your wage demands, you need to catch up. People don't live on rate of change. They live on levels. So this is another dishonest. >> I feel the same way, George. I'm glad you said that. I was literally thinking about this this morning because some of you are saying, "Oh, true inflation shows this." So I'm like, "Yeah, but the prices did not come down from when we saw that big surge postco." >> Yep. >> Like the prices are still there. So it's like, hm. Yeah. It's just that rate of change. >> So yeah. So what that means is the prices are still So what means is the average person is going to say, you know what, I need a way I need I I I need a wage hike to catch up. So that's pressure on wages. >> And are they getting them? That's the other question. >> That's the other question. Or if they're not getting them, their real incomes are suffering. So they're not going out to eat you eat it much and have to cut back. One or the other, Julia. I don't care which way you take it. Neither one is good. >> Hey everyone, I hope you are enjoying this interview. If you can take a quick moment and hit that subscribe button, [music] we are on a mission to hit our next goal of 100,000 subscribers and your support could really help us get there. Thank you so much and enjoy the rest of the interview. And then I feel like there probably other forces at play where it's like, you know, if you have a job, you want to keep your job. So maybe it's like let me keep my head down, not like ask for more money uh to keep up with all the >> and then and then the other thing too, excuse me, I can see the wheels turning on your head and we've talked a lot about the K-shaped economy. It's unbelievable the people I mean it it we have such a disparity of wealth in this country now. >> The people who own the assets, they're long real estate, they're long NASDAQ, they're killing it. All right. >> And don't they benefit from the inflationary environment, too? like if you're the asset holders or or is that just like an illusion of like I don't know but is is there something to that like in the inflationary backdrop that if you're an asset holder it's been great >> it's it has been great past tense as I say Julie what is it that past performance is no guarantee of future returns future results okay so who knows but you know I was just talking to a friend this morning guy was on vacation at a richy island in the Caribbean he's at St. parts actually. And I said, and he goes there, he goes there once a year. And I was like, okay, so what' you what do you notice this time? Yeah, you Julie, I'm sure you have this experience. You go to a place you've been many times before and you notice like, okay, is it cleaner, dirtier, nicer, more expensive? The PE. Okay. So, I said, what'd you notice? He goes, George, the prices are insane. I go, what do you mean? He goes, I go out my wife for dinner. She only has like one glass of wine. The two of them, it's like €300. And they're not going to some like fancy damn place. I was on vacation a couple months ago in an island not so fancy as uh as St. Barts beyond my pay grade, but same thing. I notice how much that the restaurant prices have gone up. So for the wealthy tourists that are going through these places, fine. But if you're the average Joe working in one of these places, like it doesn't work. >> Mhm. Yeah. It doesn't work. Um Okay. I want to give you credit where credit is due. So, you were on the show in May of 2025 and you said you cannot be bullish enough on gold. I don't even know what gold was trading at back then, George. You probably know, but wow, we have seen gold on an absolute tear. And a lot of people who watch this channel, we are not a gold channel, but I will say the audience, I would say most of them probably own gold. They tend to like gold, so they've probably been pretty happy. So, we've seen gold on an absolute tear. We did see that pullback recently, but it's coming back. So yeah, like maybe talk to me about the move that we saw in gold. I take that that definitely did not surprise you and where you see things today. Like where do you stand today on that comment? >> So thank you for reminding me of that. Get them right, get them wrong. It's nice to be recognized when you get it right. Um this is a long-term structural secular story building on what we just discussed in the last few minutes. the driver as to why gold is going up. Again, it's not that the price of gold is going up. It's that the value of the money is going down. People say, "George, when are you going to turn bearish on gold? I'll turn bearish on gold when one can turn bullish on the value of money." I'll turn bearish on gold when you start seeing sensible monetary and fiscal policy out of governments. I'll tone bearish on gold when geopolitical u uh disturbances tone down. So all the drivers this why I go back to being the conversation it's not what's happening it's why is it's happening it's just like when you look at the price of a stock you know a lot of people do what they call resulting they just say oh number go up right well why is it going up okay if you don't understand the why it's not the what the what is the price it's the why okay so your question on gold I think the macro factors that are have been driving gold are still in play um you know trying to call gold on a short-term basis a fool's errand as I mentioned A few minutes ago, I got a little bit worried the last couple of months when it wasn't the wellthoughtout big picture guys you have on your show and and ladies. Uh it was more, you know, SLV became a mean stock. Bitcoin bro wasn't enough juice in that. So, they jump over to SLV or GLD, the silver and gold ETFs. And so, you had a lot of hot money momentum types piling in. And it got so it went up too much too quickly, you know, a zillion% over the moving averages, blah blah blah. Um, I was surprised it went up as much as it did. Not surprised that it came down as sharply as it did, but I put out something on my Substack the other day entitled the song remains the same. Again, we had such a sharp runup, some consolidation. I don't mean to engage in strategist world salad, but I, you know, in the very short run, I don't really know. It could go up, could go down. But the more interesting question, the more important question, the more relevant question for your viewers is not what is gold going to do in the next 30 days. It's not like what's the trade if they're investing, it's like where's gold going to be a year from now. And in fact, if you buy some today, if you don't now, I'd buy some. All right? Um, and if it goes down, you buy more. And by the way, I don't want to sound like Michael Sailor. I don't want to be, oh, and you buy more and you buy more and you buy more. No, >> you're not saying put all of your money in gold either. I'm sure it's like a portion. No. Yeah. And >> and even more important than gold, better than the gold, gold and silver and and that whole complex, the miners to me look much more interesting. Um they, you know, they're leveraged to the gold price. So, as you look at a lot of these, the most recent quarter, I think we haven't had fourth quarter numbers yet, but third quarter numbers, I think they're realizing average prices of, I don't know, 3500, 4,000, something like that. Gold's now 5,000. So, I think you're going to see major major uh positive earning surprises. And I think you could buy pretty much any gold miner. Um I think if the price of gold stays where it is, gold and silver, they stay where they are. Uh I think these stocks can double in 12 months. And if gold and you say, "Well, Julia, Julia, you say, George, how high can gold go?" I don't know. But um if you think about gold relative to inflation, gold relative to money supply, gold relative to GDP, etc., etc., etc., it's easy to come up with numbers like 6,000, 8,000, 10,000. So what I'm trying to So I'm not giving you a particular number, but what I am trying to tell you is it's higher. That's my point. Uh and meaningfully higher. And if we get to a Banana Republic Vimar type scenario, >> all bets are off. But you don't have to believe in that to want to own gold miners is my point. >> You know, you kind of brought up an interesting point. I want to ask you as like someone who's been in the space for 45 years investing. Um it was this idea of like I can't tell you like where it's going to go in 30 days or like even a year. you just know like for the long term you want to own it. Do you think oftentimes on Wall Street we get too caught up into like the short term like what did it do in this 30 days the quarter the year like in terms of performance versus like I'll tell you I've owned gold since August of 2011 and maybe there were some bad times I know right >> I should [laughter] I should be to you what what are you asking me what I think of gold you think of gold >> look I have not sold it but and look uh August 2011 was not the best time to get in but you know like how sometimes we get so fixated on like the time frame like I'm up this amount this percent this year or something. I don't know. Is there something to it that like maybe that's not the way to look at investing is like >> 100%. And let me let me just share with you sort of what the world looks like if you're a real money investor say at Fidelity just as example. >> Mhm. >> It takes it takes a long time to get in and out of positions. So you know if let's say right now we say oh gold's going to go up 20% this week. I'm just making up something stupid. Finale can't take advantage of that. You know, I remember back in the day I was working for Peter Lynch. They did a calculation. I think I think on average it took Fidelity, it took Mellan Fund 6 months to get in and out of a position. So this fixation of you know it's up today, it's down tomorrow. And the volatility, look, the shiny object of the volatility, the hot potato, that that that's the siren calls beckon. Ignore them. Ignore them. Okay. You got to be a fundamentally invasive based investor. One of the things that's really struck me recently, I'm horrified. I digress. One story. You'll like this story. So, my Substack, which we'll mention later, um we're starting to write individual stock reports and I I recommended Southwest Airlines uh two weeks ago. I got lucky. They had a good quarter. Stock did pop 20% in one go. It's not recommended. Hey, I by the way, not investment advice. Do your own work. But I still like that stock a lot. Um, anyway, I had to write a report. I hadn't written a report for quite a while. So, I go back, I dust it off of my old Fidelity report. What was on an investment community report? Name of the stock, elevator pitch, few sentences, strengths, weaknesses, positive, negatives, what could go wrong, what could go right, catalyst, income statement, balance sheet. Pretty simple. Get to the to the kernel of the issue. So, I wrote this report and it's funny. I I put it in chat GPT too. I was trying to get it to fix some things and you know the chat GPT it hallucinates. It lies. And what's really funny I noticed the research that's out put out nowadays they don't talk about fundamentals or valuation. It's all number go up. It's all what's chart look like you know what's what's the story? What's the chart? That's not investing. That is gambling. Okay. And the problem is the problem is that approach has been so successful in recent years. That's all and you have so many investors came in the market postco that's all they know. I'm sure you're familiar with the Dunning Krueger effect. You know, it's when you okay self-confidence. So I've coined a new it's a I'd like to kind of wire get wire people up. >> When I find one of these newbies that that can't analyze companies to save their life, I say, "Aha, there goes another graduate of the Dunning Krueger Institute of Finance." Okay, these guys are all just it's like old man, you're a boomer. That's the pjorative term they use to describe me. They're not doing the work. Okay, and it's fine when pigs are flying. But one of the things we'll get into, I think we're witnessing the death of speculation right now. So all the meme stocks, all the all the AI nonsense, it is nonsense. all the um crypto stuff things where there isn't a wellthoughtout fundamental case with a valuation underpinning that was fine as long as the m money printer go burr but I think we're in the process of seeing that change. >> Wow. Okay. So that's an interesting idea the death of speculation because I mean I guess for the last I don't know how many years you've also had like the passive bid in the market like you point out and look you worked for Peter Lynch. have this book on my bookshelf and it makes me wonder are we going to go back to a stock picker market and is picking stocks a lost art you think because you're kind of just all just even writing at fundamental research >> Julia is a lost art >> thank you so much for that question this is was not rehearsed I love that question okay for years stock pickers are beginning killed all right we all know why okay mag seven concentration blah blah blah blah blah the passive bid I'm here today to tell you, and I've been saying this for a couple months now, that game is over. At least in 2026, I think the S&P, there's so many ways to beat the S&P now because the S&P is um anchored by, you know, a heavy exposure to MAG 7. Those are inextricably linked very much identified with the AI trade um and the technology uh situation. And I think what's happening now the rotation, the reflation and the rotation into um foreign markets, commodities, emerging markets. Some people like to say small caps. I think small caps will outperform large caps. And I don't want to get into a growth value argument, but I think small caps will outperform large caps. But it's not so much because I'm bullish on small caps. It's because I think large caps are going to do worse. Small caps might be flat and large caps are going to go down. So I think small caps will will outperform large caps. But the but the more direct way to answer your question I would look at the equal weight S&P the RSP that's an equally weighted index of the S&P stocks and that has been badly lagging the S&P which is cap weighted for quite a number of years. You're already seeing it starting to outperform and I think that's going to continue. Let me give you one anecdote. I can recall in the 80s when I was investing um for Fidelli the Fly overseas fund in Japan. You know Japan we all laugh at it now. It's hard to believe that actually was long that market at the time. Japan had the bull market of all bull markets. It peaked in the last day of 1989. And the Japanese market at its peak accounted for 2/3 of the EHA index. Europe, Australia, Far East. Think of that as a non- US S&P. So if you're investing in foreign markets, twothirds of your benchmark was Japan. I think today it's like 10% or 15%. It's some crazy low number. So the point was if you didn't own Japanese stocks, you had no way of keeping up with the market. And the Japanese market was on 60 times earnings 10 time and you had Japanese banks on 10 times book value and 100 PE. So any fundamental investor would say this is insanity. This is insanity. I I can't buy that. But if you're defining a risk as career risk like I don't want to underperform the market. You had to own Japanese banks. You had to own the Japanese stock market. All right. So in similar fashion fast forward read what's the read across? Had you if you hadn't owned MAG7 these last few years you were dead. There were good fundamental reasons why it worked. the earnings growth was superior. Earnings growth for the 493 was terrible. Blah blah blah blah blah blah. But what happens? I think more the the valuation on those stocks really soared to to to a place where they're not terribly attractive right now. And more importantly, I think you're looking at significant multiple compression as the wheels come off the AI story. So, I actually think that um this is a great time to be a stock picker. to finish the point on Japan. Once you got past a peak in the Japanese market for the next 20 years to outperform the non US index, all you had to do, Julia, just one thing, just one thing and one thing only have zero in Japan and index everything else. You'd have to pick stocks. You just make one decision. >> And I think that's what we're looking at in the US. I know that's that's very out of consensus, but I think it's definitely a stock pickers market. It's definitely a stock picker market now. >> Wait. Okay. So why do you think it's so out of consensus? >> Because you know why? Because it's behavior. Anyone who's owned their their their index funds, put your money into a lowc cost index fund. Active managers owners underperform. Okay, that's worked for how many years now? And now everyone's like, oh the narrative, oh these are great. Yeah, they are great companies, but everything has a price. Okay, so I think it's I think it's recency bias. And I don't want to say they had been fooled, but cuz they had been fooled. They made a lot of money. But Julie, you've heard the line. I think it's from is it Mark Twain or Oscar? I think it's Mark Twain. It's it's harder to convince someone they've been fooled than to fool them in the first place, you know. So I think there's a there's an anchoring and and the other thing I would say I'll remind people, you know, fund flows. Money follows performance. That's FOMO. At Fidelia, we'd see it all the time. You know, you could have a hot a hot fund, a hot sector, but the money only comes in once it's gotten really hot and it only leaves once it's gone down a lot. And so I think we're in that in that throws of that changing of the tides. The tides come in on all the mag seven and now it's starting to go out, but it's not obvious to everyone yet. I think it's going to soon become obvious. >> Okay. Very interesting. So would it be fair then George would you characterize yourself as bearish or are you just like picking opportunities out like what >> what's a fair characterization? >> Very good question and no I'm not bearish. I'm bearish on certain things but as I said it's rotation. So for instance >> got it. >> Aside from gold and precious metals and and and base base metals and copper and all the rest I love energy. Love energy. >> I want to talk to you about energy. Yeah. love energy. Okay, energy is so out of favor. It's only 3% of the S&P. Oil price has been depressed for quite a while. It's starting to pick up recently. Um sentiment's very bad. Started to improve. Uh there's this nar going around the world's washing oil blah blah blah blah blah. Uh if you actually look at consumption, it's quite healthy. Um and you know, at these level, this level of oil prices, it's a it's a deterrent to to exploration and future finding new production. And as you know Julia, depletion is such that we lose about 5% of production every year. In other words, you have to find 5% more oil just to keep the production stable. And so um spot oil prices, you know, they live in the in in the present. The equities live in the future, i.e. it's discounted cash flow future profits. So I think energy equities are incredibly attractive. I particularly like the oil service companies. The O is the ETF for that. You know, Schlumbumberge, everyone knows that's the biggest stock. There's some smaller, more interesting ones in there as well. But, you know, I was asked at the turn of the year in another interview and I don't like doing picks, but you for the year ahead. But, you know, I had to come up with something sensible and I didn't want to mention gold again because people are tired of hearing gold and silver. So, I wanted to come up with something new. >> They're not that tired of it. But, >> no, you're you're not. Yeah. But, you know what'll happen, but you know what I'm afraid of? People see this and they'll be like, "Oh, it's another gold." And by the way, I am not a tinfoil gold guy. Okay. I'm an equity guy. All right. This is this is totally opportunistic on my part. Save it. Save it. I wanted to come up with something that wasn't um a top of mind for everyone and where I thought the riskreward was really favorable. I energy might not work, but if it doesn't work, you're not going to get hurt. So, it's kind of like tales you win, heads you don't lose. So, um I like energy a lot. You know, they're you can pick your pick your names, but um I think you know, think of it this way. The entire energy sector is I think 3% of the S&P. I think Nvidia is like 6% of the S&P. So, you know, all it takes is is, you know, we talk about mag 7 being whatever 30 35% of the market. All it takes is a couple% of the money to come out of that and go into energy. >> $50 in double jeopardy. Uh Julia, what do you think the energy stock prices are going to do? >> Yeah. Um go higher. But so that's the rotation for you is the rotation out of tech into energy. >> Yep. >> Got it. Okay. Um the oil price is interesting too like where it is today. I don't I want to say it's probably like 64. I have not looked today. Um where is it anyway? Like 64.94 a barrel. >> Um >> do you think that the oil price is going to go higher? Because we also talked about inflation too at the top of this and we do know that that is an important component. Um >> help me tie it together too. >> Yeah. No, it's a good question. So a couple things. So, one, I'd like to point out the oil stocks, the equities, >> they've been doing incredibly well the last couple of months, despite the oil price not doing a hell of a lot. >> So, the stocks, as I say, live in the future, they're starting to discount that maybe out there things are going to get better. >> Um, as far as the oil price is concerned, trying to predict oil prices is a fool's error, particularly on a short-term basis. Okay. But again, looking out anything but the short term. I think oil prices need to go higher to encourage future uh uh exploration. There is some conspiracy theory uh around and I know you've had some pretty good conspiracy experts on your show in recent months. Some have speculated that um there have been deals cut behind doors. The Trump administration decided to keep the oil price down and had the elections blah blah blah blah blah. I don't know if that's true. Wouldn't surprise me if it is. Um, and that would just add that would pour more gasoline on my fire, no pun intended. So, I I I don't think there's a lot of downside in the oil price. Is it going to go up a lot in the short run? I have no idea. But my my my view on on energy stocks doesn't need oil prices to go up in the short run. Eventually, they will go up. But you look at you look at the operating leverage in a Schlumbumberge or a Tidewater or Valaris. Um, those are two those all service companies. You don't you don't need higher prices. You just need more activity. And I think we're going to see a lot of that. And oh, by the way, I'll preempt the question. I don't think you're going to answer it, but if you do, and then you talk about the noise, forget about Venezuela. That is that is a nothing burger. All right. So, going back to the volatility and noise of too much short-termism. That's one thing. Fade the hot takes. Fade the hot takes. I have one analyst on, a really smart guy. I love I love Jay. He says, he says, and this is not a political statement. It's not likes Trump, hates Trump. He comes to hate Trump. That's beside the point. He goes, "His superpower, his superpower is ignore what Donald Trump says." >> Wait, who's this? >> Okay, this is Jay Pilowski. And the reason he No, you have to have Jay on the show. You'll really like him. By the way, he's a he's a Duke guy. I don't know if you can deal with him. He's a Duke. >> I went to Carolina, so I know. >> No, I can handle the Jay on. He He played football at Duke, actually. >> Okay. I I'm tired of hearing about the Blue Devils and the basketball and all that stuff. Anyway, so Jay's like, he goes, "My superpower is I ignore ignore what Donald Trump says." And what he means by that, it's not I hate Trump. It's he introduces so much noise into the markets. Traffs are on, they're off, they're up, they're down. It's taking your attention away from what's really important, which are the fundamentals. And by the way, you know what's really funny, Julia? Think about everything we've been talking about previously. Gold, AI, tech, this, that, whatever. As I said to somebody yesterday, tariffs. What's that? No one's talking about tariffs [laughter] now. Like, like that's so yesterday, you know? No one talks about it anymore. >> So, so the answer is avoid hot takes. Avoid hot takes. >> Okay, that's a good mental model. All right. Are you shorting anything right now, George? >> Oh, yeah. >> What do you Yeah, tell me. >> So, run don't walk from all the AI related stuff. So, I think the NeoClouds, the core weeaves, NBIS, cipher, all these things is was I love, you know, it's basic. I love the So, I think the wheels are coming off the AI trade and and let's back up. Um, AI is an important breakthrough. No argument about that. But I think the benefits of it have been greatly exaggerated. You probably heard from others, Julia, waiting to see the use cases. Like, who can make money from using all this stuff? And um, it's not clear that's got a commercial payoff remotely sufficient to justify the trillions of dollars that are slated to be spent on this project. The Chinese are doing it with deepseek at a fraction of the cost. Maybe 10% of the cost. Is it as good as ours? No. But is it good enough? Yes. Um, and so I I think I think the adjustable market for AI, it's it's not an efficiency revolution. AI is dumb. By that I mean it can't invent anything. All it does is it makes predictions. It aggregates existing data. Goes all over the internet and tries to figure out based on looks for patterns and based on A will it be followed by B and by C. But for AI cannot solve cannot cure cancer. AI can for on the other hand in 30 seconds when we're done with this show can give you a very nicely organized summary of what we discussed. But you know that only goes so far. And so is that enough to justify the trillions of dollars that are being going to be spent on this? And I think the answer is no. Um I think AI is designed to fail. And so I think all the and by the way there will also will be winners and losers within AI. So for instance, you look at Google absolutely killing it. All right. On the other hand, you know, Microsoft bet on the wrong horse, chat GPT, and so they they're in big trouble with that. You look at Elon Musk thing, they're bad. You know, the anthropic that's doing really well. U so there's winners and losers. But I think overall the fervor over the AI trade is is now starting to recede. And more importantly, it doesn't matter what I think. The market will tell you or as my Greek friend uh Stavos always says it will show us. The market will show us. So what's important is not your opinion or my opinion, Julia, but and so you might say, well, George sounded smart. The bears always sound smart, but the market will render a verdict as to whether or not what I'm saying is true. And I would just for $50 in double jeopardy, and whereas I wasn't short these things last year, now I would be short. I am short a little bit. Um, you know, in a bull market, companies rewarded for bigger and bigger spending. You know, I'm gonna spend 100 billion, 200 billion, 500 billion, and stock number go up, stock prices go up. When the market starts to call into question though the legitimacy of those actions, it votes with its feet and price goes down. And so, you're starting to see that. Look at Oracle, for instance. Oracle went up, what was it, 30 or 40% in one day a few months ago when they had that crazy announcement. It's crashed back down. It's lower now than it was before that announcement. Okay. Um the the semiconductor stocks have been on fire. Um they've done nothing wrong except for the fact that they've gone up so much and they're so expensive. I don't think the market's going to pay for any more improvements from here. So I think AI trades are a short. I think Nvidia is a short. I think Tesla is a short. I'm naming names. Um software. I learned a new phrase yesterday, Julia. Maybe you know this already. They had what's known as SAS mageddon instead of Armageddon or Volmageddon. SAS mageddon. No. SAS companies. So, here's a situation where, you know, everyone's concerned whether concern [clears throat] is right or not, who knows? I think it is right, but everyone's concerned that many of these software uh companies are going to be upset by AI. Um, and whether that turns out to be the case, who knows? But the market's voting with its feet. And so, valuations come down. Earnings haven't changed, but multiple start to come down. It's discounting a slowdown. And as you know, valuations expand and contract with accelerating decelerating growth. And so I think the software stocks are shorts. Uh I was chuckling. I couldn't believe it the other day. Someone was pointing out a stock I think was service now. I don't really know much about the company, but whatever. So look at the chart. Looks terrible. Absolutely horrendous. And then look at the valuation. It's down by like I don't know 40 50%. It's still on like 73 times earnings, nine times book value. I'm like are you crazy? Now, the problem is these stocks did so well for so long. People, you said earlier, why don't people sell? Because they think that, oh, number don't worry, it'll go back up. It'll go back up. It'll go back up. It's like a little boy, the cried wolf. And throughout the cycle, it has kept going back up. But one day, it won't go back up. And I think that's where we are with these things. I think people are going to become have become will increasingly become concerned about the impact of AI on um on on software. So I think the whole tech complex is under suspicion and that's why I said before you know go to if nothing else just go from S&P market cap weighted to equal weighted I think you're going to improve your performance. >> Yeah. So like again like the theme here is rotation understanding where you see that headed. You've been quite um in this conversation descriptive of like what's going on predictive of like where things are headed. Um, and you've been prescriptive, but let's just drill down a little bit more for investors. What should they do like from your vantage point? >> So, so for the average investor who's probably been told by and listen it, the markets are are more difficult now than any time at 45 years. So, if investors are home and confused, don't worry. Good company, right? Nobody really knows what's going on. Let's be blunt about this, okay? I'm sorry. I love your show, Julia. You're great. You got great guests. But when I watch mainstream media and these guys come on with this just unwavering conf confidence and then like two weeks later they come back and the exact opposite happened and it's like h oh oh but we sold we sold. So anyway um so in terms of trying to trying to help people make money which is also what my conference is about. So everyone's been you know in the 64 to portfolio they already should have an idea that bonds are a disaster. bonds have have lost money I think three four years in a row now and given my outlook for spending and debt and inflation I think they're going to continue to do poorly so I would take some of my bond money and put it into gold uh I would have nothing in bonds but even Morgan Stanley take Michael Wilson is a good strategist he's got his shares of share of good and bad calls even he said take take half of your bonds and put them into gold so 20% gold so I take some of my bonds and put into gold I personally would be I have no bonds get out of bonds and then as far as equities go mean shorting is not for everybody. Don't you don't have to go short, but I would the S&P has too much tech in it. I would go to the RSP, which is the equal weighted tech. Um, and I think that's going to outperform uh the SPY, the S&P. I'm a bit suspicious of the Russell, the IWM, Russell 2000. Um, it'll probably outperform, but a lot of bad companies in there. I mean, I think it'll outperform the S&P just because S&P is not going to do well until my outlook for tech, but I think 40% of the companies in the Russ are lossmaking. So, I'd stay away from that. Um, so, so, so, so own gold. Um, get out of your bonds, go to Equalade S&P, put some money abroad. Put some money abroad. It could be the EM or any other emerging market fund. Or if you want a particular emerging market, I happen to like Brazil. I happen to like China. Put some money there. I think I think foreign markets and are going to vastly outperform the US market. They already have. last year to from memory I think the S&P was up 16 and I believe EM emerging markets was up 33. So it's not like I'm predicting, you know, it's not like, oh, you know, something that goes in motion stays in motion. It's already happening. All right? So it's not like some crazy prediction. So I think if you just do those few things, get some money out of the country, go to equal weight, sell your bonds, buy some gold, buy some energy, you don't have to be crazy like me and short stocks, but I think for the average person, that's going to really improve their performance. >> George, I I've had a lot of fun having you back on. Um before I let you go here, you have a conference coming up. You mentioned that. Um I want you to take a moment, let folks know about the conference, how they can attend or join. Um and uh also you write a Substack, you host a bunch of spaces on X and also just leave them with some parting thoughts. So just take the next few minutes. Um the floor is all yours. >> Thanks Julia. So we're having a conference um on March 11. Um you can go on my Twitter or on my uh Substack. All the details are there. This is unlike any other conference that you would have been to. And we're basically having 15 um well-known independent thinkers come in and give pick, stock picks, prescriptive ideas, not well I think the GDP is going to do this and the yield curve is going to do that. No, how do we make money? That's what this is all about. How do we make money? And this is like an all-star team of investors. These are all guys are on the buy side run their own funds or they have their own independent research firms. So they're eating their eating their own cooking. Eat what you kill. May not get it right, but the incent the incentives are properly aligned. The quality of this event was inspired by over the years and Julia, I'm sure you've been to some of these. You go to these dinners where they have some really highowered investors and you get to hear what they're saying. The average investor doesn't have exposure to that. That's what this conference is designed to do. And I just I I'm blown away. Okay, you I bet it's 45 years. Julia, this is only $99. I mean, I'm not going to make much money out. It's not the point. The point is I'm trying to give access to people, access to to the folks so they can hear from top rate investors what they're thinking. Uh, you know, as an example, I don't want to embarrass them, but you know, Robert Mullen from Marathon advisers out in San Francisco, his fund was up over 100% last year. 100%. Uh, Tom Chenos, brother of Jim Chenos, had a great short idea. I think it was Fresh Pat last year. um you know uh Adam Parker, former uh domestic ex strategist for uh Morgan Stanley. I mean, these are not fly by night guys. This is this is really first rate. In this conference, I promise you this. You may not make money, but you're going to enjoy it and you're going to learn a lot. And I'm telling you, this conference is better than any other conference you'll ever see. And the reason I say that is because it's not my ideas. No, it's like I'm putting on a concert and I'm able to gather the best musicians in the world to come perform. And so as opposed to, you know, if you're at Goldman Sachs and Morgan, not to pick on them, they have their own analysts and, you know, they have their own conflicts of interest and so on and so forth. This is like an all-star team. You're a basketball fan, Julie down in Carolina. Imagine if I got to pick instead of just being stuck with the Duke team, I could go around the ACC and pick the best player from each team. Okay, that's what this is. All right, and so you know, Tavi Costa, Don Durret, two of the leading gold guys. Tavy's funds were up over 100% last year also. All right, we got as I mentioned, Robert Mullen is doing gold. We got a short seller guy, Tom Thornon, who I think you've had on. >> I love Tommy. >> Tommy, I love he's a dear friend. He's going to be on. He had a Door Dash short last year. It was great. Anyway, it's a And Jay Pilowski, by the way, I mentioned earlier, he is the former head of emerging market strategies for Morgan Stanley. He's given the keynote and he'll tell you about his secret secret uh power about ignoring Trump. In fact, Julie, we got to get we got to get you into the conference. So anyway, it's I promise you, you're going to come with a lot of ideas. $99. I mean, listen, last year I did a couple of these, they were great successes. The content was phenomenal. But the first time I did one, I want to have proof of concept. I drastically cut the price just because I want to have a big outing. And if this is successful, I will do this on a quarterly basis. Where else can you get this? Nowhere. So, I just wish in my career I had this open to me. I mean, you go to dinners, you hear guys, you know, talk their book, whatever. But imagine in your own home, you can watch 15 guys, 20 minutes a piece. The replays will be available within 24, 48 hours. It doesn't get any better than that in my opinion. George Noble, CIO of Noble Capital Advisors. Thank you so much for being so judous with your time, all of your knowledge, your wisdom, helping us learn and get better. This was such a fun conversation. Really appreciate you and I look forward to our next conversation and best of luck with the conference. >> Thank you, Julia. Good to see you. Take care.