Ready For A Bear Market? Most Investors Aren't | Ted Oakley

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Ted Oakley (0:59)

If you look at the 70s and 80s, you know, every four or five years, we had a pretty tough bear market. And in the 70s, we had one every other year, just about, you know, 20, 30 minutes.

Adam Taggart (1:09)

That's just inconceivable to most people right now, I think.

Ted Oakley (1:11)

Yeah. Oh, yeah. No, they spend so long for them that they don't see it, but they have to remember that the Fed can't bail them out now.

You know, they can for a little while, but it makes it even worse if they do.

Adam Taggart (1:30)

Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Welcome you here for an interview with one of my very favorite people to talk with. I'm talking about Ted Oakley, the founder and managing partner of Oxbow Advisors at a financial advisory firm for high net worth individuals. Ted, thank you so much for joining us today.

Ted Oakley (1:49)

Well, thank you, Adam. Good to see you.

Adam Taggart (1:51)

Oh, it's always wonderful to see you, Ted. So I've had a lot of people asking me, when's Ted coming back on the channel? So if you're one of those folks, congrats, you're going to get that itch scratched right now. Ted, it's a really interesting time.

We have a lot of things that might be seen as headwinds to the economy and just to the markets in general. Specifically there, I'm thinking about higher bond yields. So the Fed is back hiking. Bond yields have been rising pretty much all year. The day that we're talking here, we're recording this, Ted. They've had a pretty big jump. The 10-year is getting close to 5.1 percent right now.

So we'll talk in a moment about what you think the implications of those are, but that certainly raises some concerns. Now, flip side, the GDP now estimate for the US economy growth in Q3, and we're right near the end of a quarter, so the confidence in their number is fairly high. It's over 5 percent. So it seems like the economy doesn't care about these higher rates, and growing economy cures a lot of bills. So when you're looking to invest capital the way that you have to invest the billions there that you manage at Oxbow, is this more of a game on or a risk off type of environment?

Ted Oakley (3:15)

Well, I would say, Adam, it's one of those things like in cards, you got to know when to play them and where you're going to play them. I think the thing that goes on right now because the economy, it's a one-trick pony. I mean, everything's tied to AI, and if you pull AI out of the economy right now, you know, those numbers wouldn't be near as good. And you have to be a little careful on that because, you know, that will pass. All that buildup will pass in time. And for us, we're always trying to buy things we think can last a long time, you know, five to 10 years maybe.

And so it makes it makes it a little difficult, but still you get you can get in the right places. But we see that's sort of what's happening in the economy right now. I know it's confusing for a lot of people to look at, but that's what it seems like to us.

Adam Taggart (4:06)

Okay, I guess the question that most investors have right now is just, well, should I be playing the game?

You know, or should I know when to hold them, know when to fold them, right? Should I be holding or should I be folding? And I don't get the sense right now, but I could be wrong that Oxbow is saying to fold them. I definitely hear you say proceed with caution because a lot of this is revolving around a single sector, which is AI, but that sector is pulling a lot of freight right now. And so it's not necessarily a juggernaut you want to try to defy. So I'm just curious, you know, from your perspective, are you still holding and playing some cards or are you getting more into a folding state?