In this episode, Will and Adam examine former Secretary of Labor Robert Reich’s comments comparing today to the Gilded Age. We acknowledge there are several similarities, including increasing wealth disparity, the emergence of disruptive technology, and widespread commingling of government with business. We specifically discuss the recent discussion around the government taking stake in public companies, which, though has a precedent, was used in the past during times of financial crisis, i.e., to keep automakers afloat during the financial crisis.

We discuss the (until just recently) ebullient vibes in the stock market, and why some of the forefront of the AI revolution are starting to sound a little more cautious about what AI can deliver in the near-term. However, that has not stopped investors from returning to familiar favorites from the 2021 run-up, with this rally’s best performers including:

• Non-profitable tech
• Most shorted stocks
• Meme stocks

With Fed chair Powell on tap for Jackson Hole, we look at the recent Fed minutes, which indicating a focus more on inflation than jobs, and why that could change if job revisions continue to be revised lower. However, with the inflation effect of tariffs expected to shift from businesses to consumers soon, will the Fed have the flexibility to cut rates as much as investors currently believe? With both anecdotes and hard data indicating a struggling consumer, the Fed is in a tough spot and under continuing political pressure.

We conclude with why it is important to remain systematic and focused on long-term investing success and resist the temptation of the continued gamification of stock trading, with platforms like Robin Hood now exploring the addition of traditional sports wagering alongside retail investment accounts.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In this episode, we provide a recap on earnings so far in Q2, which, so far, have been good enough for the market to remain near all-time highs. We also delve a little deeper into some of the megacap earnings, especially as it relates to whether accounting rules are optically improving earnings while cash flow is shrinking as spending on capital expenditures, specifically AI chips, is draining corporate coffers. To wit, free cash flow versus capex for the four biggest spenders (GOOG, META, AMZN, and MSFT) is as follows (in billions):

• 2024
• • FCF - $233
  • Capex - $226
• 2025
• • FCF - $207
  • Capex - $351
• 2026
• • FCF - $240
  • Capex - $445
• 2027
• • FCF - $289
  • Capex - $512

In other words, these businesses, which once generated massive amounts of free cash flow for things like buybacks, are becoming much more capital intensive. However, since 2021, it has been only the 10 biggest stocks that have had earnings that have exceeded inflation; the other 490 have barely kept pace with overall price increases.

We also talk about inflation, specifically the shift toward the greater use of estimates versus actual inflation data, as well as the smoke signals from the economic intelligentsia hinting at a shift away from the fed’s long-standing 2% inflation target. In the spirit of government estimates, we also review the recent (abysmal) jobs data, and revisions, and connect that with the demise of certain professions, which ties into the massive AI spending driving corporate earnings and capital expenditures.

We close with a look at the strong recent performance of speculative stocks, the historically large nature of the volume in that trading, and why that has historically boded poorly going forward. Of particular note is the recent record flow into the Ark Innovation ETF.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we look at the OBBBA, and what its passage may mean for investors, as well as for the government’s balance sheet.

Debt from baseline projection of 154% of GDP to upwards of 200% of GDP with the OBBBA. Deficits from around 6% of GDP to over 7% with the OBBBA.

Despite the ballooning deficits and debt, markets are celebrating the prospect of fiscal stimulus, as well as favorable tax treatments on investment as well as other corporate goodies.

In the second half, we discuss President Trump’s penmanship as it relates to his letter to Chair Powell on interest rates and why the “hottest country in the world” should “LOWER THE RATE!!!” We also look at the risk associated with the loss of Fed independence due to either political pressure or a dual role for the Treasury Secretary.

At some point, we finally get around to talking about the stock market, and note the historic rebound in equities in Q2, which was the largest in record by some measures. The biggest winners were growth stocks, which led value by a wider margin than during the tech bubble, and retail favorites, which are often highly speculative names; these soared over 60% in Q2. We also look at the expectations embedded in markets at this point in terms of earnings and multiples, and what effect passive investing is having on markets as over half of U.S. fund assets are now passively invested.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we examine the (rumored) literal fisticuffs in D.C., and the implications of the proposed “Big, Beautiful Bill” on taxes, spending, the deficit, interest rates, and the dollar. We discuss the timing of tax cuts versus spending cuts, especially in light of the employment data we have seen since 2022, wherein:

• Private sector job growth -> a little over 1% cumulatively.
• Public sector job growth -> over 7% cumulatively.

In the second half, we discuss the market’s rapid rebound from its April nadir and juxtapose returns (and valuations) for different parts of the equity market. Is it finally time for diversification to help after a 15-year run for the U.S.?

• U.S. large caps +3% YTD
• U.S. small caps -2% YTD
• Developed non-U.S. +17% YTD
• Emerging markets +11% YTD

While the collapse in the volatility index and the huge rally from the lows normally portend further gains, valuations for the S&P 500 are historically high on any number of measures. While the so-called Magnificent Seven are more elevated, the other 493 are also expensive, and have grown earnings a lot more slowly than the tech titans. Contrary to our forecast entering 2025, fewer than one in three stocks are outperforming this year, putting a premium on stock selection. While multiples are high, we think active managers willing to go further afield can find values.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In this episode, we have a no-holds-barred conversation featuring Kalee Kreider, a seasoned political strategist and expert in climate policy.

Together, we dig into the uncomfortable truths about markets, politics, and the economic pressures facing everyday Americans. From election forecasts and the appeal of government gridlock to the harsh realities of student debt, the conversation is unscripted, unfiltered, and unexpectedly funny.

We explore why investors often prefer a slow-moving Congress, how middle-income families are still reeling from financial burdens nobody talks about, and why economic narratives need more honesty and a lot less spin.

What You’ll Learn:

• Why political gridlock can actually calm the markets
• The ongoing impact of student debt on families earning six figures
• What’s really driving midterm election outcomes—and what to expect next
• How public perception influences both policy and portfolio performance
• Why clarity in communication is just as valuable as a solid balance sheet

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss the showdown between the U.S. and China on tariffs. While the headlines have been stolen by who is calling whom first, we look into the effect the tariffs are already having on container ship volumes, and what implications that has for the rest of the supply chain, and the economy. Tariffs are just starting to hit consumers as they look to buy online, with the tariff exceeding the purchase price in some cases. While there is optimism over a resolution, historically trade agreements have involved lengthy negotiations, and we are weeks away from the initial impact of being felt, making this akin to a slow moving shipwreck. We also discuss the impact of student loan payments turning back on after years of forbearance.

In the second half, we discuss the rebound in U.S. equities, which are anticipating a quick and painless resolution to the trade war, along with three or four cuts by the Federal Reserve during the rest of this year. In our opinion, that number of cuts would only occur if we saw the onset of a recession, which has significant market implications.

• Since World War II, the average recession sees gross domestic product (GDP) decline 2.3%.
• The average earnings decline for the S&P 500 is 11% during a recession
• However, around 1/3 of the time, earnings decline 5% or less.

Many market strategists are celebrating the recent equity rebound, which has been broad based and triggered a number of positive market breadth signals. While these are normally positive portents, valuation is not part of the calculation, and any disappointment in terms of the current earnings estimates leaves little room for error, making us mindful of seeking opportunities outside of the index, which continues to be dominated by a handful of stocks.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss Liberation Day, the violent reaction of, initially, the stock market and, subsequently, the bond market. In terms of the bond market, we look at the frantic trading from last week that ultimately forced the administration to announce a 90-day pause on most tariffs. Who holds U.S. debt? The answer might surprise you:

• Total debt - $34 trillion
• Domestic holders - $26 trillion
• Japan - $1.1 trillion
• China - $820 billion (though may be understated as offshore entities, i.e., other countries, are likely being used as well)
• Other countries - $5.3 trillion

In the second half, we discuss the volatile reaction of equities to headlines.

• Post-Liberation Day, over a 10% decline in two days.
• The third largest daily gain ever for the S&P 500 on April 9th (when the 90-day pause was announced).

While many pundits cite such a large up day as being a portent of further gains, which is true historically, we put it in context of valuation, and the 20.7x P/E the market currently has is well above the 12.7x multiple the market had on average after other large gains. Similarly, we look at expectations for earnings, what we have heard so far (JP Morgan noted deteriorating credit trends while Wells cited resilient spending), and what we think we might hear from companies as earnings season gets into full swing (hint: prepare for the word “uncertainty” to be a common refrain). Finally, we discuss the administration’s stated objectives of bringing back manufacturing and reducing trade deficits. What is not often mentioned is that this approach overlooks service surpluses, and is causing a sharp decline in foreign tourism, which may jeopardize these surpluses.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss the imminent arrival of “Liberation Day”, and why uncertainty over tariffs is causing consternation to consumer, business, and investor confidence. We look at the most recent inflation data from the government and examine the widely divergent inflation expectations based on political affiliation. We also tie this to the likelihood of further rate cuts and the necessity to drive rates lower as sizable government debt is due to be refinanced in 2025.

In the second half, we (finally) discuss what has been a challenging quarter for stocks, especially the Magnificent Seven:

• In the aggregate, the Mag Seven are in a bear market (down 20%).
• The S&P 500 is down 5% YTD and 10% below its all-time high, led lower by the Mag Seven.
• The average stock in the NASDAQ is 35% below its high.

The path forward for the market depends on the impact of tariffs and spending cuts, both of which are likely headwinds in the near term. With both valuations and earnings expectations still elevated, there remains downside in the event of either an economic or earnings recession. However, value stocks have performed well year-to-date, as have non-U.S. stocks, which are garnering attention as a result of changing U.S. trade and foreign policy. In other words, diversification has (finally) been helping.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.