Has A.I. Mania Created Twin Bubbles In Both Stock Prices AND Earnings? | New Harbor Financial

**SPEAKER_1** (0:00)
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**John Lodra** (0:30)
We probably have a valuation and an earnings bubble. Doesn't mean these aren't real, they're not transformative, just like the Internet was, but we've gotten way ahead of ourselves. We very much think.

**Adam Taggart** (0:46)
Welcome to Thoughtful Money, I'm Thoughtful Money Founder and your host, Adam Taggart. Welcoming you here for our ongoing monthly series with the team from New Harbor Financial. They're one of the endorsed financial advisory firms by Thoughtful Money.
And you see these gentlemen with me on this channel every week, usually coming on after one of our big interviews. But once a month, we like to give them the full spotlight and dive deeply into what the team at New Harbor Financial sees currently going on in the macro side of things and then what their market outlook is. So as usual, I'm joined by John Lodra and Mike Preston. Gentlemen, thanks so much for joining me. Love to hear what you guys are seeing in your market crystal ball. And Mike, why don't we start with you?

**Mike Preston** (1:30)
Hey, Adam, thank you. So here we are recording on June 3rd. So five months out of 12 of the year are gone. And it's been a wild ride already. The conflict in Iran has been going on at least three months, longer than most or many have thought that it would. I can tell you a lot of our clients are concerned. Talking to a lot of our clients are saying, well, geez, things just don't seem unsustainable. They think the conflict in Iran is going to get worse or something else is going to pop up geopolitically. And that's normal. There's always uncertainty in life. And the way that this market has been acting has been relatively concerning. It's been a straight up move. And it's been a very narrow move. We're going to get into some graphics that will show you just how narrow pretty soon. But it's very, very challenging because as an individual investor or as a money manager, you need to try to make money for people to try to stay ahead of inflation, to pay for life goals. And to be honest, this cycle that we're living in is different than others. It's different in this way. We have been at a relatively high, extremely overvalued level for way longer than I think any time in history. The cyclically adjusted PE ratio, the Buffett indicator, any number of these indicators that you can look at that are statistically reliable, reliable at predicting future returns have not mattered. And so that's driving people a little bit crazy. So what do you do to take emotion out of your decisions as an investor or as a money manager? The best thing that you can do is to have some kind of system that tells you what to do. If there's some doubt, and there's always some doubt, it's because humans are emotional. Money managers are emotional. Everyone has their own psychology and their past to deal with. And hopefully that past is a past that has made you stronger, that gives you depth and an experience. But even then, with that experience, nobody really knows for sure what's going to happen next, even with the best indicators. So the indicators are our guideposts. Our experience and our committee is what helps us execute and make exact decisions.
And those decisions aren't always absolutely correct, but at least we have skills and tools to be able to react if they're not correct. So we have a dashboard of indicators. It's really nothing super fancy. There's no black box that anyone can design, that you can just press a button and have it print money for you. I know that high-frequency trading and hedge funds and algo trading, they try to find these things, but that field is so developed and so competitive. I'm just not really sure that there's really any edge there. What there is an edge in, I think, is being willing to be different than the pack, having a system that you're willing to stick to, having tools like knowing how to use options that can hopefully round the corners or help you have some, a little bit more forgiveness when you're not exactly right.