Bubble talk.
Yes, my friends, there is indeed a bubble. A bubble in the headlines about bubbles! Sheesh, man. It’s a little out of control. I was in the car all day Wednesday and I swear about 80% of the talk on the financial shows was whether we were in a stock market bubble or not.
I’m sure I’ll discuss this topic from time to time over the next number of weeks and months, but for now I’d say the talk of bubbles is having an impact on investor behavior. And that’s not a bad thing in my book. It keeps a real bubble from forming, at least anything close to 1999-2000.
According to S&P analytics, investors have pulled $33 billion this year from the largest ETF that tracks the S&P 500. That’s a record number through the first 9 months of the year. And to think this has occurred while the S&P itself has been hitting numerous record highs. Meanwhile, virtually every sentiment indicator has shown a decline in investor enthusiasm, including this one from the CNN Fear and Greed Index.
Source: CNN Business, 10-17-25
The S&P has declined 2% from its all-time high and we’re suddenly in “extreme fear” territory. Overreact much? But like I said, as ridiculous as this is it’s actually a positive development from a contrarian standpoint.
My viewpoint on this hasn’t wavered. A healthy bull market needs the occasional correction to keep investors honest and Mr. Market satiated. We haven’t had a meaningful pullback in more than six months so we’re overdue. I sincerely hope we get one sooner rather than later. If not, and this market balloons to one record high after another well into 2026, then you’ll find me with one leg on the bubble bandwagon. But we’re not there just yet.
Revisionist history.
Big bad bear markets rarely announce themselves in advance. There are tons of stops and starts, lots of teases along the way, but true bear markets begin with little fanfare. However, there is one thing I can guarantee after the completion of the next inevitable decline of more than 20%. Professional and amateur investors alike will mimic this guy.
Just like tens of millions of Boomers claim they were at Woodstock, so it is with those who claim they not only saw the Great Financial Crisis coming, but also took advantage of it at the lows. People. They’re funny.
Cockroaches.
A lot is being made of the sudden and surprising bankruptcies of Tricolor Holdings, an auto lender and used car dealer, and First Brands Group, an auto parts supplier. Are these the proverbial canaries in the coalmine, revealing cracks in the credit markets? Some certainly think so, including J.P. Morgan’s Jamie Dimon who warned that “when you see one cockroach, there are probably more.” Perhaps, Mr. Dimon. Perhaps. But a deeper dive reveals bad management practices, and even the potential for fraud, rather than systemic issues lurking in the economy’s underbelly.
Execs at Tricolor are being accused of “double pledging” where the same collateral is used for multiple loans. The Feds claim the Tricolor scheme approaches $200 million. Oops! Meanwhile, the Department of Justice is investigating First Brands for some $2.3 billion that has “simply vanished.” Double oops!!
Then came the news Thursday that Zions Bank is facing a $60 million loss due to accusations of fraud concerning a couple of its borrowers. This sent the shares of regional bank stocks plummeting late in the week. But let me repeat. So far there is no indication that this is a widespread issue due to a sudden decline in credit quality. These are singular issues of alleged fraud and corruption.
This reminds me of when the banks of Silicon Valley and First Republic went belly up in early 2023. Much was made about the possibility of a collapse in the banking industry similar to 2008. But I wrote at the time that those bankruptcies were due to egregiously poor management practices and not indicative of any kind of weakness in the financial sector. That turned out to be a correct assessment.
There are legitimate concerns about the private credit markets getting a bit frothy, but we are nowhere near the issues that nearly brought down the economy some 17 years ago. Don’t believe the headlines.
The shine of silver.
We talked gold last week, but let’s not ignore its underappreciated little brother. SILVER.
Earlier in the week silver breached the $50 level for the first time in history. What makes this so compelling is that, unlike gold, silver isn’t primarily used as a financial instrument. It has wider practical applications within the global economy such as usage on circuit boards, solar panels, electronic components, medical devices, automative parts, and the list goes on.
Source: Wall Street Journal, 10-14-25
But let’s not miss what that chart on the left is screaming at us. The fall from those previous peaks is breathtaking. A lot of investors were taken out on stretchers. I make no prediction what will happen this time around. Maybe the reasons cited above push the precious metal even higher. We certainly don’t have the Hunt brothers cornering the market like in 1980. But the advice is the same. Be careful chasing investments that go parabolic, at least in large quantities. Prudence and patience rarely cause harm to long-term investors.
OUCH!
I’d just as soon forget last Saturday. But that’s hard to do when you’re sporting both figurative and literal scars. And to think that the day started with so much promise!
Let’s get the first one out of the way. And I’m sorry to do this to you.
Hope you had your breakfast already. That’s my left foot, right knee, and the dastardly thing that caused all the damage.
I was five miles into a 15-mile run around Creve Coeur Park when….down goes Frazier! Never saw that rock-like ball on the trail, called a Bald Cypress Cone. I will now curse the name as long as I live.
I rolled the ankle while falling on my right side, and you can see the results. Nothing broken, just a severely sprained ankle that shredded some tendons, produced major swelling, and discolored the foot, ankle, and toes with bruising.
After I got home, I cleaned up the wound on my right leg, wrapped the foot and ankle in an icepack (thank you Dr. Steve), elevated it onto a pillow, slammed down a couple of ibuprofens, and got ready for the Mizzou/Alabama game. But alas, a few hours later I had added the figurative scars to the literal ones. Ugh. A chance for the Tigers to make a statement to the nation and we came up short.
But hey, I almost nailed the final score! Remember my prediction from last week’s commentary? 27-23. The final score was 27-24. Not bad. Am I good or what?!
(Please don’t pay any attention to what team actually won and how it compared to my prediction. That’s completely beside the point.)
Now it’s on to another SEC matchup as Mizzou travels to Auburn. I’m hoping for a much better weekend. No injuries (because I’m not running), and a prediction I guarantee will come true. The Tigers will win. Take it to the bank!
I think the Simons Says podcast is starting to go to my colleague’s head. Brandon is feeling a little sure of himself these days, at least judging by this picture.
2025 Retirement Tax Strategies:RMD Rules, QCD Tips, & Roth IRA Conversion Secrets for High-Net-Worth
Despite the horseplay we tackle some very important topics: Required Minimum Distributions, Roth conversions, and Qualified Charitable Distributions. No matter your age I’m sure you’ll find some useful nuggets in there. Enjoy!
Take care and enjoy your weekend. No gruesome pictures next week…I hope.
Dave
Please reply to this email to unsubscribe from all future marketing messages.
The material included in this email is for informational purposes only and is not intended as an offer to buy or sell any securities. This commentary is not intended to provide tax, legal or investment advice. Any views presented in this commentary are solely those of the author and do not necessarily represent those of &Partners, LLC. While the information contained in this commentary is believed to be reliable, no representation or warranty, whether expressed or implied, is made by &Partners, LLC, and no liability or responsibility is accepted by &Partners, LLC or its affiliates as to its accuracy. Nothing contained herein is, or shall be, relied upon as a promise or representation whether as to past, present, or future performance. Past performance is not indicative of future returns.
Securities and investment advisory services offered through &Partners, LLC, a broker-dealer and investment adviser registered with the U.S. Securities and Exchange Commission and member FINRA, SIPC.
