Stock Market More Dangerous Than Right Before The 1929 Crash | David Hay

**David Hay** (0:00)
The market, in many ways, looks more dangerous than it did even in 1999-2000, and that was a bigger bubble than 1929 So that should really get people's attention.

**Adam Taggart** (0:16)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. One of the great David Bowie's most popular songs was titled Changes. Today's guest, David Hay, Chief Investment Officer and Principal at Evergreen Gavekal might well steal that title for his expected theme for 2025 He sees headwinds that could cause the economy to grow slower than many currently expect. He sees the prices of stocks and bonds at risk, the Fed increasingly behind the curve, the dollar potentially reversing, and lots of uncertainty to soon ensue as the Trump Administration starts to deploy its disruptive policies. He'll walk us through charts of all of that and more today. David, thanks so much for joining us today.

**David Hay** (1:00)
It's a pleasure to be here again, Adam. And first of all, I want to wish you a happy new year, and I hope that this year is as prosperous for you as last year was.
Your show, your channel is just doing fantastically well. I know you hear that from a lot of your guests, but it's true. And so kudos to you, and I hope that momentum keeps going.

**Adam Taggart** (1:16)
You're very, very kind. Thank you very much. Happy new year right back at you, as well as kudos to you for the performance of Evergreen Gavekal. I know you guys had a good year last year and a very good year, I believe, on your fixed income side of the house. So again, mutual appreciation society, you're doing great things, and very happy to have you as one of the first guests here on Thoughtful Money for 2025

**David Hay** (1:41)
Well, I will say, this is not humility, this is just reality that when you think about a really good year in the bond market last year, we were at about 4% return, which you might think that's not that great, but it's about four times what the benchmark did, and I think that puts us in the top, close to the top percentile. So yeah, it's funny, the bond market is, of course, it's been struggling, we're going to talk about that more, but anyway, there's plenty to talk about. I do think we're in a pivotal period right now in the markets.

**Adam Taggart** (2:11)
All right. So I was appropriate there with the David Bowie reference?

**David Hay** (2:16)
Very appropriate.

**Adam Taggart** (2:18)
Okay, good. All right. Well, look, I normally kick these interviews off with a very intentionally broad question to get the discussion flowing. That question obviously is, what's your current assessment of the global economy and financial markets? David, being the far end of a curve student that he is, anticipated that question, put together actually a pretty phenomenal presentation. So David, I think maybe we address that question however you like, but do so maybe through your charts.

**David Hay** (2:50)
Well, before we get there, thank you. We'll definitely do that. And I appreciate that comment. Sometimes I'm guilty of over-engineering and I think when I'm with you, I do that even more as my team members would, I'm sure wholeheartedly agree. But to answer your basic point about the outlook for global financial markets and the economy, I would just say that probably a great word is precarious. I think there's really a major change going on right now. I mean, getting back to your opening theme of changes, and it has to do with liquidity. And I think those of us who are older, we've seen more tough market cycles than the younger people. We tend to be more value focused. I think we've really underestimated the impact of liquidity in recent years. In fact, the older I get, I think that's kind of like the number one thing. If you get the liquidity trends right, kind of everything else falls into place. And that's not to say that you ignore valuations or you ignore sentiment. I mean, those all matter. But I think in terms of the near term direction, the market liquidity is kind of it. And that's where I think there is a major shift going on. We do study and track a number of very good sources that are on top of liquidity much better than we are at Evergreen. And I think you just interviewed Darius Dale. I'm pretty sure I saw that hit my inbox here earlier today. And Darius has been very successful with his liquidity, kind of his dip mining, if you will. And because of you, I'm now a subscriber to 42 Macro, his company of service. And he's clearly shifting gears and becoming more apprehensive.