Stocks Are Clearly Overpriced Now | Chance Finucane

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**Chance Finucane** (0:59)
When you look at where things are priced today, we've got a group of about 400 high-quality companies that we track. And this is about as overpriced collectively as they've been since we've been tracking this in years. And that just tells us that we want to really be prudent about what we're picking to own in our portfolios on the equity side. And even in other asset classes, we want to be very sure about the potential downside. When you've got a 4% risk-free short-term treasury that you can always fall back to, and it's been a perfectly good place to be so far this year.

**Adam Taggart** (1:39)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. With stocks back near all-time highs, capital is gushing into the US financial markets, and investors are feeling exuberant again. So is all this bullish optimism justified? Today's guest, Chance Finucane, Chief Investment Officer of High Net Worth Advisory Firm, Oxbow Advisors, takes a more cautious approach. In their recent market letter to their High Net Worth clients, Chance, along with Oxbow Founder Ted Oakley, delivered the warning that quote, it's a different time now, a time when the chickens may come home to roost after a period of distortion that has artificially and unsustainably goosed financial asset prices. Chance, thanks so much for joining us today.

**Chance Finucane** (2:24)
Yeah, great to be back on, Adam.

**Adam Taggart** (2:26)
Great to have you back on, Chance. You're looking way too rested for a young father, but hopefully that just means your son's a good sleeper and your spouse is helping you shoulder the load.

**Chance Finucane** (2:37)
Yeah, all good at home and crazy time to be trying to keep up with these markets too.

**Adam Taggart** (2:43)
It is. Okay, so I did reference the piece that you and Ted recently put out. In fact, it's a piece I just sent to the premium subscribers of Thoughtful Money's newsletter or Thoughtful Money Substack for the Macropass service. But before we get to that, I just want to thank your colleague there, Ted Oakley. We did a webinar a few weeks back on his book, Second Generation Wealth, so essentially how to raise financially savvy, financially resilient kids. The feedback to that was just off the charts. I know that you guys at Oxbow have sent out, I think, thousands of free books to folks who have wanted to read Ted's latest book on that topic and benefit from its main points. So anyways, so fun to do, so well received. I hope we get to do more of that in the future.

**Chance Finucane** (3:39)
Yeah, I know he really enjoyed doing it and this is just me personally saying, I think it's one of the best books he's ever written and really liked the message that he was getting through on that one.

**Adam Taggart** (3:48)
All right. Well, folks, look, if you want to get your hands on that, I will tell you at the end of this video where to go. But right now, let's dive into your latest report there, Chance. Like I said, you guys titled it, It's a Different Time Now, and why don't we just walk through it? I'll ask questions about some of its major points.
The first one was comparing the returns of stocks and bonds year to date. The market feels like it's just on fire right now, and it is, I suppose, but our memories are short. Just two and a half months ago, it felt like everything was horrible, coming out of the what was called Liberation Day tariffs. And so if you look at the total return of the S&P and the NASDAQ in the first half of this year, they were like around 5%, right? Which is really not that different with what bonds have returned, right? So you could have started the year and said, all right, look, I'm going to go along, and you would have had a really stressful ride, or you could have just jumped into the safety of treasuries and pretty much had the same return, but been able to sleep at night. So while, again, right now, the animal spirits are running fast and hard, what are your guys' thoughts on the performance of the year to date? And can these animal spirits keep running like this, or have they moved so far so fast that you guys expect some sort of pullback?