‘Proceed With Caution’ On Silver, Buy This Asset Instead, Says Investor | Brian Belski
Summary
US Secular Bull: Guest reiterates a long-running secular bull case for US equities with a 2026 S&P 500 target near 7,300–7,500, arguing fundamentals remain supportive.
Earnings vs. Multiples: Expects the market to transition from multiple expansion to earnings-driven gains, implying more modest but positive returns.
AI Theme: Pushes back on “AI bubble” concerns, noting stronger fundamentals than 1999–2000 and highlighting AI as a durable driver for tech and broader markets.
US Financials Overweight: Overweight US financials on value, anticipated strong earnings, deregulation, and likely consolidation given an overbanked landscape.
Canada Positioning: Constructive on Canada but rotating to cyclicals (industrials, consumer discretionary, communication services), with utilities tied to AI infrastructure.
Commodities Caution: While acknowledging recent momentum in silver/gold, he advises caution and does not expect similar outsized commodity gains over the next 12 months.
Policy and Rates: Sees inflation trending lower and the Fed continuing to cut, supporting equities despite political noise.
Corrections and Geopolitics: Corrections can occur on surprises, but expects V-shaped recoveries with US assets outperforming due to superior fundamentals.
Transcript
The bears got it wrong that we're going to have an AI bubble that tech stocks were going to go straight down and they they they tried their hardest to compare it to 99200. The bears will be right at some point. Here here's here's what I'm going to say, David. We'll have the next big cyclical bull market, which will will be the last cyclical bull market of our 25- year secular bull market call. Last year was an anomaly. We had an exogenous event called called tariffs that quote unquote freaked everybody out. The end of the world. The end of the world trade. you can't collect on. So have faith when everybody gets nervous and sells, it's going to drive the bee to come back and that's why US assets outperform. >> Brian Belki joins us once more. He's a CEO and CIO of his own firm now, Humilus Investment Strategies, which he started back in October last year. Uh this follows his 13-year stint as CIO at Beimo Capital Markets. Brian's a 35-year veteran on Wall Street. So, uh, we're going to get his outlook on the US equities markets and which sectors he favors. This episode is brought to you by Kowi. It's a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code lin. Link in the description down below or scan the QR code here. New users will get $10 on their $100 deposit. Traders can put money down on their favorite teams, advance elections, and more in all 50 states, including California and Texas in over 140 countries. Brian, welcome back to the show. Good to see you as always. >> Thank you so much, David. We really appreciate uh the support. >> The outlook for the markets is what we're going to be focusing on today. You're still bullish on the S&P 500. I believe you've got a target that's well above current levels. Before we get to that, let me just show you a chart. I don't want to reveal Well, I guess the title's in there. Um, but I I wanted to play this game where I don't really show what the title is and then you kind of just like look at it and we talk about it. But anyway, this is a price of silver. If this were a price of any stock, and we're not here to talk about commodities in particular, but if this were the price of any particular stock, whether it be large cap or silver or small cap, it doesn't matter. And it goes straight up in this in a straight line. Basically, it's gone up from 30 bucks to 90. So 3xed in the last 6 months. What would you say to yourself? What kind of questions would you be asking yourself on what what to do with this particular security? >> Well, we'll never begrudge uh when asset prices go higher. So, let's accept that. Number one, we're not going to be Johnny Ranccloud uh in terms of of worrying that stock prices or an asset price goes up too much. I think what's interesting uh on this chart is when you see where the bottom was in 2025. The bottom in 2025 also coincided with uh that prior top in 2024. The the chart for gold looks very similar. If you kind of go back, I'm willing to bet that's probably April of 2025 when um u many investors were worried about the wherewithal of the United States. there was a lot of tariff uh talk and the fear trade got going and so I think a lot of people move to harder commodities and then what you really see what's happened later in 2025 David is the momentum trade turned on full boore and we're not going to begrudge momentum uh we have been long-term believers and holders of technology stocks uh I think the difference uh with respect to what we've been saying and seeing in terms of these types of parabolic moves moves in technology stocks especially circling around AI let's say it um there's a lot more fundamental I call it uh hutzbah quite frankly uh to to some of these technology stocks from silver and gold now again uh on the silver trade I think it's fantastic it's it's it's amazing your question is Brian what do you tell investors right now and I I always tell investors right now especially given when you see charts and price action like that is proceed with caution because we've had this triple move now and I think investors now are going to expect the same type of returns over the next year or so and we quite frankly from a fundamental perspective that humus investment strategies don't believe we're going to see that type of move in some of these commodities over the next 12 months. >> Okay, I bring this up because if you were to zoom out on the S&P 500, obviously the move is not this dramatic. The parabolic line we saw in silver is not really applicable here, but it's basically been a straight line ever since 2009. Um, with a few, you know, big dips along the way. So, to your outlook about 7,300 to 7,500, why are you not more cautious in the stock market than you would be on something like silver, which I just pulled up as an example? >> Well, again, uh, let's go back to fundamentals. If you take a look at the fundamental construct of the United States stock market, especially since we made our initial call for a 25- year secular bull market in print in the published medium uh in 2010, we came out with our call about a bull market in 20 2009. But then again, segue to 2010, the bull market in terms of being secular. In the secular bull market since 2009, we've had sever several cyclical bears and cyclical bulls. During these periods, during the cyclical bears, the stock market was able to take a pause, refresh, I mean regroup on a price perspective. On a fundamental perspective, when you take a look at things like valuation, earnings, um, cash flow, book value, dividends, we continue to believe that the United States stock market is in really good shape. Now, let's go back and talk about these commodities. Are they are they in the same shape with respect to demand and supply and cash flow and what they're doing with the companies or is this just a commodity? So it's it's it's a little bit like apples to oranges but in terms of just price to price we think the fundamental construct of the underpinnings of the equity market are much more timely and much more positive uh than the commodity market. Now why are we why are we um uh not more bearish? Why would we even be bearish? There's enough bears out there that are worried about an AI bubble or that the market's gone up too much. And most of these people, David, as you and I have talked about before, they missed it. They missed the initial first half of this big secular bull market. They've been playing it since 23, really 24. And so, they're kind of late to the party. So, uh we do think that the big secular bull uh is well and alive. We think uh this fourth year of the bull market actually is going to be more historically like usually the third year of a bull market. Third year of the bull market is not as strong as the other years of the bull market. Last year was an anomaly. We had an exogenous event called called tariffs that quote unquote freaked everybody out and made really drastic asset changes in equities. >> Well, you've actually made the point to me before that geopolitical risk are just short-term noise. Uh case in point, tariffs liberation day April 20 uh April 2nduh 2025 last year. Yes, we did get a major correction immediately after the announcement, but we also got a major bounce back. And looking back, it was it was literally just noise. Uh what about now? The whole world's talking about annexation. No one knows if this country is going to remain sovereign by next week. And yet the S&P is ripping higher. I mean, we are down today on some tech earnings news, but uh overall we're nearing towards 7,000 points. So what do you make of geopolitical tensions right now? >> I think it's I again I think they're overplayed. I I think you're you're showing your emotion about annexation. You're show and just like you know too many Canadian investors left in April last year and they didn't come back. Now they were very blessed and fortunate that were Canadian centric uh investors because Canada on an absolute performance using local currency at its best absolute and relative performance relative to the S&P 500 since 1990. So congratulations. That's fantastic. But from a non-diversified index, which Canada is, uh, and the majority of Canadian investors actually have to own a little bit of Europe or a little bit of emerging markets or used to be a little bit of the US, a lot of them left. And I think that's risky when you base your decisions on uh, politics and personal feelings with respect to those politics. In terms of your annexation, you know, that's just blowhard type talk that I I let's let's just deal with what we can deal with. And just like in life, you always deal with what you can deal with. And here's how you deal with what you can deal with. Buy really good companies, which there's a ton in Canada and there's a ton in the United States. Turn off all the noise and just continue to stick with your process and discipline. >> All right. Uh let's talk about monetary policy. Now, there's this feud going on between Trump and uh Powell that's been made more apparent since Powell released a video of of him basically that the Department of Justice issued a subpoena only because Powell refused to lower rates like Trump asked. Now, we don't know what's really going on behind the scenes. Maybe that's true or maybe because the DOJ really just wanted to subpoena them because they didn't provide transparency on their budget. But anyway, who is going to be the next Fed chair? more broadly who or what is going to happen to the Fed monetary policy in 2026. This is from Koshi. It's a it's a platform that traders can go to uh place bets on certain predictions. So in this particular case, traders have placed a 44% chance on Kevin Worsh being nominated as the Fed chair. Uh Kevin Hasset is a close second per this particular prediction market. So, uh, do you have a view on monetary policy for 2026 and whether or not this current feud between Trump and and POW is going to derail their doubbishness? Well, unfortunately, in this era of of instant news, we tend to sensationalize things and people need to take a step back and be a little bit more objective. If you go back in American history, just go back to the 1960s. There's a very famous meeting that took place between President Lyndon Baines Johnson with the head of the Fed in the mid1 1960s. I can't remember his name. I'm sorry. If my good friend David Rosenberg was on with me, he'd know right away, of course. But um uh he invited him out to his Texas ranch. He picked him up, literally picked him up, physically threw him up against the wall and said, "We need you to cut interest rates." Then let's go to in the late 1960s early 1970s with President Nixon and again the name of the Fed chairman uh is is not coming to my mind but President Nixon uh was very vocal in the press with respect to interest rates. Then let's go to 1984 uh after which Vulkar cut interest rates along with President Reagan and Speaker Tip O'Neal cut taxes in the United States and then the economic recovery was on. Reagan was very very aggressive in the press. So we love to we love to pick on the president of the United States because of his behavior. We love to do this but you know again both sides are talking. You asked me the question in terms of monetary policy. We still think that rates are lower given the fact that inflation is heading lower period. Uh we see that that employment is still pretty sticky but wages are kind of tipsy here. But we do think that the Fed's going to continue to cut rates irrespective of what who who's going to be in the chair. Our fundamental underpinnings are fundamental, David. Earnings growth. The economy looks good. Valuations are not stretched. And we still think there's a tremendous amount of themes out there from a fundamental perspective that will drive US and Canadian stocks higher. >> What's going to drive stocks higher fundamentally? Is it going to be earnings, primarily EPS, or is it going to be valuations expansion PE? In our report, we talk about uh the first three years of this new bull market that we were in print and started talking about in October of 2022. We said a new bull market, new secular bull market has started. And this bull market has been all about to date has been all about multiple expansion. What we believe is going to uh occur both in the United States and Canada as the market's going to transition to more of an earnings driven market. Based on our research, you go back and back test markets whether or not they're driven by earnings or driven by multiple expansion. Earnings driven markets are typically less exciting, meaning they're not as positive at the upside, but still positive nonetheless. So that's why we say positive is still positive to have a 20 plus% move in equity prices um in 2026 in both US and Canada, I think, is going to be tougher with respect to especially given the fact of how strong stocks were number one in Canada last year, but really how stocks how strong stocks, I'm sorry, have been since the October 2022 lows. Uh let's just take a look at uh at uh what prediction markets are saying about the S&P. So S&P 500 closed by the end of 2026. So your view is somewhere between 7,300 to 7500 which lies in the middle of the distribution of this particular trade. So you can see how people have been uh placing predictions. So the bulk is between 7200 to 7799. What would need to happen Brian? And we're not going to talk about the, you know, tail risk mega bear forecast, but what would need to happen if, let's say, we're heading towards 8,000, which some people are still predicting 8% chance we're going to get 8,000. Basically, uh, nearly a 20% chance according to this prediction market, that we're going to go between 7,600 to 8,000 points by the end of the year. Uh, which would be a huge gain. what would need to happen for you to become even more bullish such that this prediction becomes realized? >> Well, I'll tell you first off, I kind of like not being uh in one of the tales. Usually, I'm one of the tales, you know, on the bullish side. But I think I think uh discretion is a part better part of valor with respect to my markets. We'd rather underpromise and overd deliver. Been doing that in our career most uh uh for 36 years now. But at the at the end of the day, um, we you need to see 20 to 30% earnings growth, I think, to get up to those numbers that you're talking about, the 7,800 to to 8,000, number one, and probably some sort of dramatic drop off in inflation. Remember, the Fed has a dual mandate, inflation uh in in employment. So as long as employment I think kind of sticks around this 5% unemployment or below and we see this a really fast drop in inflation which is really difficult inflation can go up like an elevator but it's going down like a really really really slow escalator and so that escalator has to increase and get pretty fast for uh I think these types of forecast to occur. Can you uh comment on your sector recommendation here and what you're overweight or perhaps underweight? >> We're in Canada, we're overweight, communication services, consumer discretionary, uh industrials, and utilities. Woo, exciting. Uh much more cyclical. Um in the United States, we're overweight communication services, um utilities, um and financials. Yeah, financials we think in the US um are great plays not only for the value discipline, but I think we're going to get some very strong earnings growth. We have deregulation and I think we have a lot of consolidation coming in financials. Remember, Canadians have a hard time understanding US financials because there's six banks in Canada. In in the US, we have we have 600 publicly traded banks and 4,000 banks overall in the United States. Too many. So with that capacity, I think we need to take out some capacity through some consolidation. >> Just on Canada, are you still bullish overall on the TSX or as at least as bullish on the TSX overall as you would be on the S&P 500 given how >> heavy the TSX is weighted towards resources and uh oil and we you already talked about how gold and silver these other commodities are overstretched. >> We turned super bullish mid uh 2022 in Canada which was excessively contrarian. Nobody believed us. Um, and now given the kind of move that we've seen in materials, especially last year, and remember the banks had an amazing year in 2025, mostly because they overreserved uh in 2023 and 2024. In fact, you and I have talked about when banks in Canada when they typically over reserve, they have massive outperformance for the 12 to 24 months that follow those periods. We've seen that now. And so when you have two of the big three sectors dominate like they did last year, I think it's be really difficult for that same type of of performance in 2026, that's why we like the more cyclical areas in Canada like industrials. Um like consumer discretionary I think is an amazing sector in Canada in terms of buying select stocks there. We're being contrarian and buying communication services, a sector that everybody hates, but the the cash flow is back and the dividends are still there. Then lastly, utilities are a play on AI infrastructure, and we think that that's a that's going to be a very very interesting and a and a theme that not a lot of Canadian investors are are playing. Uh, finally, your report states that look, nothing goes up in a straight line. I'm paraphrasing here, but corrections are imminent parts or not inevitable parts of the market cycle. Uh, even though you're bullish, corrections could still happen. What would be the case for a correction this year? >> Well, some sort of a surprise. uh you know the market we saw the surprise in April we could see um a surprise based on a geopolitical event which we believe will cause a massive V-shape uh type of recovery. Why Vshape? Because at the end of the day, no matter how much you on a personal uh basis, you don't like the United States sometimes, we are uh the best house in a in a really uh rocky neighborhood when the when the world gets rocky and we we still have the best companies in the world and the most consistency in fundamentals. And that's why we've seen not not just the last 10 years, not just the last 20 years, but the last 50 years when we see geopolitical events coming out of that, the United States stock market rapidly and massively outperform. So if we get some sort of a surprise and I don't like talk you I think you and I have talked about like black swan events through the years and all this stuff the way the world know the greatest thing about a black swan trade is hey Belowski how come you don't have the black swan strategy the best line you can tell people is because you can never collect on the black swan strategy right the end of the world the end of the world trade you can't collect on so have faith in what's faith in our business fundamentals and the fundamental construct in the United States stock market is such that it's going to drive the V when everybody gets nervous isn't sells, it's going to drive the bee to come back and that's why US assets outperform. >> Final question before I let you go. So Brian, the uh here you've got uh two figures showing the length the average length of bull markets in the United States, the S&P 500 in particular. And as you can see the light blue bar where we're currently at. Uh we're still at historic average, not yet. So there's still some more room to climb. Uh or so. So there's more there's more to go in terms of the duration of this this particular bull market. What have bears gotten wrong in the last two years besides calling for a recession, which I guess technically didn't happen, but fundamentally what was wrong with the bare thesis in the last two years? >> Well, in retrospect, of course. Yeah. >> At the end of the day, at at the end of the day, I think the Bears are are amazing. We need the bears um because uh you know we need those sellers and bears are fantastic because they're really smart and they have all these great statistics but they're I mean seven and a half years out of 10 the stock market's up. So I we would we would play those odds. I think the bears got it wrong that we're going to have an AI bubble that tech stocks were going to go straight down and they they they tried their hardest to compare it to 992000 which to us we lived through 992000 as strategists uh and we're investors back then too. this is uh what's going on with AI stocks had nothing to do with that. Then they pounded on the the geopolitical trade in terms of President Trump and the tariffs. That didn't really work out either. Uh and now the and now the latest thing is talking about the long end of the curve and talking about interest rates and the Fed. I just think it's going to be really difficult. So the bears will be right at some point. Here here's here's what I'm going to say, David. We will markets will have a normal recession at some point. two down quarters of GDP. We haven't had a normal recession for a long long time. Co was not a normal recession. And so that we'll we'll let the bears have their recession and come out of that we'll have the next big cyclical bull market which will will be the last cyclical bull market of our 25- year secular bull market call. >> Okay. We'll follow up closer to that uh period. Thank you so much, Brian. Where can we follow your work right now? >> You can check us out at humalisinv.com. That's hu m i l i s i nv.com and there's a bunch of cool media clips in there. You can you can click and see our research. You can click and see where our portfolios are available in the US and Canada. Thank you for all your support and we really appreciate uh the last decades in Canada with you. >> Thanks Brian. Don't forget to follow Brian and Humalis investment strategies link down below. Don't forget to subscribe to this channel and don't forget to use my code lin l i n when you sign up to kowshi link down below or scan the QR code here and you'll get $10 on your first $100 deposit.
‘Proceed With Caution’ On Silver, Buy This Asset Instead, Says Investor | Brian Belski
Summary
Transcript
The bears got it wrong that we're going to have an AI bubble that tech stocks were going to go straight down and they they they tried their hardest to compare it to 99200. The bears will be right at some point. Here here's here's what I'm going to say, David. We'll have the next big cyclical bull market, which will will be the last cyclical bull market of our 25- year secular bull market call. Last year was an anomaly. We had an exogenous event called called tariffs that quote unquote freaked everybody out. The end of the world. The end of the world trade. you can't collect on. So have faith when everybody gets nervous and sells, it's going to drive the bee to come back and that's why US assets outperform. >> Brian Belki joins us once more. He's a CEO and CIO of his own firm now, Humilus Investment Strategies, which he started back in October last year. Uh this follows his 13-year stint as CIO at Beimo Capital Markets. Brian's a 35-year veteran on Wall Street. So, uh, we're going to get his outlook on the US equities markets and which sectors he favors. This episode is brought to you by Kowi. It's a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code lin. Link in the description down below or scan the QR code here. New users will get $10 on their $100 deposit. Traders can put money down on their favorite teams, advance elections, and more in all 50 states, including California and Texas in over 140 countries. Brian, welcome back to the show. Good to see you as always. >> Thank you so much, David. We really appreciate uh the support. >> The outlook for the markets is what we're going to be focusing on today. You're still bullish on the S&P 500. I believe you've got a target that's well above current levels. Before we get to that, let me just show you a chart. I don't want to reveal Well, I guess the title's in there. Um, but I I wanted to play this game where I don't really show what the title is and then you kind of just like look at it and we talk about it. But anyway, this is a price of silver. If this were a price of any stock, and we're not here to talk about commodities in particular, but if this were the price of any particular stock, whether it be large cap or silver or small cap, it doesn't matter. And it goes straight up in this in a straight line. Basically, it's gone up from 30 bucks to 90. So 3xed in the last 6 months. What would you say to yourself? What kind of questions would you be asking yourself on what what to do with this particular security? >> Well, we'll never begrudge uh when asset prices go higher. So, let's accept that. Number one, we're not going to be Johnny Ranccloud uh in terms of of worrying that stock prices or an asset price goes up too much. I think what's interesting uh on this chart is when you see where the bottom was in 2025. The bottom in 2025 also coincided with uh that prior top in 2024. The the chart for gold looks very similar. If you kind of go back, I'm willing to bet that's probably April of 2025 when um u many investors were worried about the wherewithal of the United States. there was a lot of tariff uh talk and the fear trade got going and so I think a lot of people move to harder commodities and then what you really see what's happened later in 2025 David is the momentum trade turned on full boore and we're not going to begrudge momentum uh we have been long-term believers and holders of technology stocks uh I think the difference uh with respect to what we've been saying and seeing in terms of these types of parabolic moves moves in technology stocks especially circling around AI let's say it um there's a lot more fundamental I call it uh hutzbah quite frankly uh to to some of these technology stocks from silver and gold now again uh on the silver trade I think it's fantastic it's it's it's amazing your question is Brian what do you tell investors right now and I I always tell investors right now especially given when you see charts and price action like that is proceed with caution because we've had this triple move now and I think investors now are going to expect the same type of returns over the next year or so and we quite frankly from a fundamental perspective that humus investment strategies don't believe we're going to see that type of move in some of these commodities over the next 12 months. >> Okay, I bring this up because if you were to zoom out on the S&P 500, obviously the move is not this dramatic. The parabolic line we saw in silver is not really applicable here, but it's basically been a straight line ever since 2009. Um, with a few, you know, big dips along the way. So, to your outlook about 7,300 to 7,500, why are you not more cautious in the stock market than you would be on something like silver, which I just pulled up as an example? >> Well, again, uh, let's go back to fundamentals. If you take a look at the fundamental construct of the United States stock market, especially since we made our initial call for a 25- year secular bull market in print in the published medium uh in 2010, we came out with our call about a bull market in 20 2009. But then again, segue to 2010, the bull market in terms of being secular. In the secular bull market since 2009, we've had sever several cyclical bears and cyclical bulls. During these periods, during the cyclical bears, the stock market was able to take a pause, refresh, I mean regroup on a price perspective. On a fundamental perspective, when you take a look at things like valuation, earnings, um, cash flow, book value, dividends, we continue to believe that the United States stock market is in really good shape. Now, let's go back and talk about these commodities. Are they are they in the same shape with respect to demand and supply and cash flow and what they're doing with the companies or is this just a commodity? So it's it's it's a little bit like apples to oranges but in terms of just price to price we think the fundamental construct of the underpinnings of the equity market are much more timely and much more positive uh than the commodity market. Now why are we why are we um uh not more bearish? Why would we even be bearish? There's enough bears out there that are worried about an AI bubble or that the market's gone up too much. And most of these people, David, as you and I have talked about before, they missed it. They missed the initial first half of this big secular bull market. They've been playing it since 23, really 24. And so, they're kind of late to the party. So, uh we do think that the big secular bull uh is well and alive. We think uh this fourth year of the bull market actually is going to be more historically like usually the third year of a bull market. Third year of the bull market is not as strong as the other years of the bull market. Last year was an anomaly. We had an exogenous event called called tariffs that quote unquote freaked everybody out and made really drastic asset changes in equities. >> Well, you've actually made the point to me before that geopolitical risk are just short-term noise. Uh case in point, tariffs liberation day April 20 uh April 2nduh 2025 last year. Yes, we did get a major correction immediately after the announcement, but we also got a major bounce back. And looking back, it was it was literally just noise. Uh what about now? The whole world's talking about annexation. No one knows if this country is going to remain sovereign by next week. And yet the S&P is ripping higher. I mean, we are down today on some tech earnings news, but uh overall we're nearing towards 7,000 points. So what do you make of geopolitical tensions right now? >> I think it's I again I think they're overplayed. I I think you're you're showing your emotion about annexation. You're show and just like you know too many Canadian investors left in April last year and they didn't come back. Now they were very blessed and fortunate that were Canadian centric uh investors because Canada on an absolute performance using local currency at its best absolute and relative performance relative to the S&P 500 since 1990. So congratulations. That's fantastic. But from a non-diversified index, which Canada is, uh, and the majority of Canadian investors actually have to own a little bit of Europe or a little bit of emerging markets or used to be a little bit of the US, a lot of them left. And I think that's risky when you base your decisions on uh, politics and personal feelings with respect to those politics. In terms of your annexation, you know, that's just blowhard type talk that I I let's let's just deal with what we can deal with. And just like in life, you always deal with what you can deal with. And here's how you deal with what you can deal with. Buy really good companies, which there's a ton in Canada and there's a ton in the United States. Turn off all the noise and just continue to stick with your process and discipline. >> All right. Uh let's talk about monetary policy. Now, there's this feud going on between Trump and uh Powell that's been made more apparent since Powell released a video of of him basically that the Department of Justice issued a subpoena only because Powell refused to lower rates like Trump asked. Now, we don't know what's really going on behind the scenes. Maybe that's true or maybe because the DOJ really just wanted to subpoena them because they didn't provide transparency on their budget. But anyway, who is going to be the next Fed chair? more broadly who or what is going to happen to the Fed monetary policy in 2026. This is from Koshi. It's a it's a platform that traders can go to uh place bets on certain predictions. So in this particular case, traders have placed a 44% chance on Kevin Worsh being nominated as the Fed chair. Uh Kevin Hasset is a close second per this particular prediction market. So, uh, do you have a view on monetary policy for 2026 and whether or not this current feud between Trump and and POW is going to derail their doubbishness? Well, unfortunately, in this era of of instant news, we tend to sensationalize things and people need to take a step back and be a little bit more objective. If you go back in American history, just go back to the 1960s. There's a very famous meeting that took place between President Lyndon Baines Johnson with the head of the Fed in the mid1 1960s. I can't remember his name. I'm sorry. If my good friend David Rosenberg was on with me, he'd know right away, of course. But um uh he invited him out to his Texas ranch. He picked him up, literally picked him up, physically threw him up against the wall and said, "We need you to cut interest rates." Then let's go to in the late 1960s early 1970s with President Nixon and again the name of the Fed chairman uh is is not coming to my mind but President Nixon uh was very vocal in the press with respect to interest rates. Then let's go to 1984 uh after which Vulkar cut interest rates along with President Reagan and Speaker Tip O'Neal cut taxes in the United States and then the economic recovery was on. Reagan was very very aggressive in the press. So we love to we love to pick on the president of the United States because of his behavior. We love to do this but you know again both sides are talking. You asked me the question in terms of monetary policy. We still think that rates are lower given the fact that inflation is heading lower period. Uh we see that that employment is still pretty sticky but wages are kind of tipsy here. But we do think that the Fed's going to continue to cut rates irrespective of what who who's going to be in the chair. Our fundamental underpinnings are fundamental, David. Earnings growth. The economy looks good. Valuations are not stretched. And we still think there's a tremendous amount of themes out there from a fundamental perspective that will drive US and Canadian stocks higher. >> What's going to drive stocks higher fundamentally? Is it going to be earnings, primarily EPS, or is it going to be valuations expansion PE? In our report, we talk about uh the first three years of this new bull market that we were in print and started talking about in October of 2022. We said a new bull market, new secular bull market has started. And this bull market has been all about to date has been all about multiple expansion. What we believe is going to uh occur both in the United States and Canada as the market's going to transition to more of an earnings driven market. Based on our research, you go back and back test markets whether or not they're driven by earnings or driven by multiple expansion. Earnings driven markets are typically less exciting, meaning they're not as positive at the upside, but still positive nonetheless. So that's why we say positive is still positive to have a 20 plus% move in equity prices um in 2026 in both US and Canada, I think, is going to be tougher with respect to especially given the fact of how strong stocks were number one in Canada last year, but really how stocks how strong stocks, I'm sorry, have been since the October 2022 lows. Uh let's just take a look at uh at uh what prediction markets are saying about the S&P. So S&P 500 closed by the end of 2026. So your view is somewhere between 7,300 to 7500 which lies in the middle of the distribution of this particular trade. So you can see how people have been uh placing predictions. So the bulk is between 7200 to 7799. What would need to happen Brian? And we're not going to talk about the, you know, tail risk mega bear forecast, but what would need to happen if, let's say, we're heading towards 8,000, which some people are still predicting 8% chance we're going to get 8,000. Basically, uh, nearly a 20% chance according to this prediction market, that we're going to go between 7,600 to 8,000 points by the end of the year. Uh, which would be a huge gain. what would need to happen for you to become even more bullish such that this prediction becomes realized? >> Well, I'll tell you first off, I kind of like not being uh in one of the tales. Usually, I'm one of the tales, you know, on the bullish side. But I think I think uh discretion is a part better part of valor with respect to my markets. We'd rather underpromise and overd deliver. Been doing that in our career most uh uh for 36 years now. But at the at the end of the day, um, we you need to see 20 to 30% earnings growth, I think, to get up to those numbers that you're talking about, the 7,800 to to 8,000, number one, and probably some sort of dramatic drop off in inflation. Remember, the Fed has a dual mandate, inflation uh in in employment. So as long as employment I think kind of sticks around this 5% unemployment or below and we see this a really fast drop in inflation which is really difficult inflation can go up like an elevator but it's going down like a really really really slow escalator and so that escalator has to increase and get pretty fast for uh I think these types of forecast to occur. Can you uh comment on your sector recommendation here and what you're overweight or perhaps underweight? >> We're in Canada, we're overweight, communication services, consumer discretionary, uh industrials, and utilities. Woo, exciting. Uh much more cyclical. Um in the United States, we're overweight communication services, um utilities, um and financials. Yeah, financials we think in the US um are great plays not only for the value discipline, but I think we're going to get some very strong earnings growth. We have deregulation and I think we have a lot of consolidation coming in financials. Remember, Canadians have a hard time understanding US financials because there's six banks in Canada. In in the US, we have we have 600 publicly traded banks and 4,000 banks overall in the United States. Too many. So with that capacity, I think we need to take out some capacity through some consolidation. >> Just on Canada, are you still bullish overall on the TSX or as at least as bullish on the TSX overall as you would be on the S&P 500 given how >> heavy the TSX is weighted towards resources and uh oil and we you already talked about how gold and silver these other commodities are overstretched. >> We turned super bullish mid uh 2022 in Canada which was excessively contrarian. Nobody believed us. Um, and now given the kind of move that we've seen in materials, especially last year, and remember the banks had an amazing year in 2025, mostly because they overreserved uh in 2023 and 2024. In fact, you and I have talked about when banks in Canada when they typically over reserve, they have massive outperformance for the 12 to 24 months that follow those periods. We've seen that now. And so when you have two of the big three sectors dominate like they did last year, I think it's be really difficult for that same type of of performance in 2026, that's why we like the more cyclical areas in Canada like industrials. Um like consumer discretionary I think is an amazing sector in Canada in terms of buying select stocks there. We're being contrarian and buying communication services, a sector that everybody hates, but the the cash flow is back and the dividends are still there. Then lastly, utilities are a play on AI infrastructure, and we think that that's a that's going to be a very very interesting and a and a theme that not a lot of Canadian investors are are playing. Uh, finally, your report states that look, nothing goes up in a straight line. I'm paraphrasing here, but corrections are imminent parts or not inevitable parts of the market cycle. Uh, even though you're bullish, corrections could still happen. What would be the case for a correction this year? >> Well, some sort of a surprise. uh you know the market we saw the surprise in April we could see um a surprise based on a geopolitical event which we believe will cause a massive V-shape uh type of recovery. Why Vshape? Because at the end of the day, no matter how much you on a personal uh basis, you don't like the United States sometimes, we are uh the best house in a in a really uh rocky neighborhood when the when the world gets rocky and we we still have the best companies in the world and the most consistency in fundamentals. And that's why we've seen not not just the last 10 years, not just the last 20 years, but the last 50 years when we see geopolitical events coming out of that, the United States stock market rapidly and massively outperform. So if we get some sort of a surprise and I don't like talk you I think you and I have talked about like black swan events through the years and all this stuff the way the world know the greatest thing about a black swan trade is hey Belowski how come you don't have the black swan strategy the best line you can tell people is because you can never collect on the black swan strategy right the end of the world the end of the world trade you can't collect on so have faith in what's faith in our business fundamentals and the fundamental construct in the United States stock market is such that it's going to drive the V when everybody gets nervous isn't sells, it's going to drive the bee to come back and that's why US assets outperform. >> Final question before I let you go. So Brian, the uh here you've got uh two figures showing the length the average length of bull markets in the United States, the S&P 500 in particular. And as you can see the light blue bar where we're currently at. Uh we're still at historic average, not yet. So there's still some more room to climb. Uh or so. So there's more there's more to go in terms of the duration of this this particular bull market. What have bears gotten wrong in the last two years besides calling for a recession, which I guess technically didn't happen, but fundamentally what was wrong with the bare thesis in the last two years? >> Well, in retrospect, of course. Yeah. >> At the end of the day, at at the end of the day, I think the Bears are are amazing. We need the bears um because uh you know we need those sellers and bears are fantastic because they're really smart and they have all these great statistics but they're I mean seven and a half years out of 10 the stock market's up. So I we would we would play those odds. I think the bears got it wrong that we're going to have an AI bubble that tech stocks were going to go straight down and they they they tried their hardest to compare it to 992000 which to us we lived through 992000 as strategists uh and we're investors back then too. this is uh what's going on with AI stocks had nothing to do with that. Then they pounded on the the geopolitical trade in terms of President Trump and the tariffs. That didn't really work out either. Uh and now the and now the latest thing is talking about the long end of the curve and talking about interest rates and the Fed. I just think it's going to be really difficult. So the bears will be right at some point. Here here's here's what I'm going to say, David. We will markets will have a normal recession at some point. two down quarters of GDP. We haven't had a normal recession for a long long time. Co was not a normal recession. And so that we'll we'll let the bears have their recession and come out of that we'll have the next big cyclical bull market which will will be the last cyclical bull market of our 25- year secular bull market call. >> Okay. We'll follow up closer to that uh period. Thank you so much, Brian. Where can we follow your work right now? >> You can check us out at humalisinv.com. That's hu m i l i s i nv.com and there's a bunch of cool media clips in there. You can you can click and see our research. You can click and see where our portfolios are available in the US and Canada. Thank you for all your support and we really appreciate uh the last decades in Canada with you. >> Thanks Brian. Don't forget to follow Brian and Humalis investment strategies link down below. Don't forget to subscribe to this channel and don't forget to use my code lin l i n when you sign up to kowshi link down below or scan the QR code here and you'll get $10 on your first $100 deposit.