What If Earnings Guidance Disappoints? How Low Could Stocks Fall? | Lance Roberts

**SPEAKER_1** (0:01)
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**Lance Roberts** (0:19)
So again, it's not going to be what these companies report. It's going to be about what they say about the rest of this year. And if there are guidance, so two things are potentially, and so here's two of the potential risk. We talked about those earnings being very optimistic for this year. If we go through this quarter's earnings season and outlooks are starting to get cut back, we're going to see those earnings estimates drop. And that's going to make valuations more difficult to justify at current levels. So that may induce some more risk into the markets worth paying attention to.

**Adam Taggart** (0:57)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Very excited to welcome you all here at the end of the week for another weekly Market Recap featuring my good friend, the Argentine portfolio manager, Lance Roberts. Lance, how you doing?

**Lance Roberts** (1:12)
I am not in Argentina, I'm in Houston.

**Adam Taggart** (1:16)
Well, folks may know, Argentine is a derivative of Argentum, Latin word for silver. And right before we hopped on here, Lance, silver finally cracked $100 an ounce. So we got a lot of celebration going on. We'll talk a little bit about that, both to celebrate the win, but also to urge a little bit of caution here. But anyways, for everybody who has followed the silver ride, especially those of you who got in, six months ago, went back when it was 35 or six years ago, when it was much lower than that, congratulations to you all. But yeah, it's a great day for anybody who's got any interest in silver. And Lance, it raises the question, so what do you think is going to be hit next? 5,000 gold or 7,000 S&P? Because we're very close to both.

**Lance Roberts** (2:07)
Yeah, no, look, all asset classes are running right now, and it's great. I mean, pretty much, as we talked about before, you can pretty much throw money into anything, and it makes you money. And I love markets like that. It makes it really, really easy to make money. And since that's what we're in the business of doing, that's what we all invest, is to make money.
This has been such an easy market over the last few years to generate really outsized returns. I don't know how long it lasts. That's kind of the theme of today's article, which is called the South Park Market.

**Adam Taggart** (2:36)
Yeah, we're really into that.

**Lance Roberts** (2:38)
Yeah, but man, enjoy it. It's so easy. I encourage you, though, just to be a little bit mindful about managing risk and just take some profits along the way. These prices aren't going to last forever. These things eventually always reverse. It doesn't matter what asset class it is. You're going to have a reversion in price at some point. So just don't forget to take some profits along the way and manage your risk. But yeah, it's great.

**Adam Taggart** (3:04)
All right. So we're going to get into all of that. First, let me just congratulate you and the entire team at RAA. You guys put on a wonderful conference last weekend, and I was out there for it, had a great time. And from what the audience told me, they did as well.
A few things I want to talk with you about that, but you, Michael, and I did kind of a live weekly market recap there on the stage to conclude it. And I was kind of digging around with you around the nature of this market and sort of finally got to the type of answer I was looking for from you, which was sort of given the arc of your long career in this space, how are you looking at today's market? And I can't remember the exact words that you used, Lance, but you basically did say like, look, this is one of the most overvalued markets, if not the most overvalued market I've seen in my professional career. That was not a message to say, everybody sell right now and get in the bunker. But I found that that was very important to hear because, yes, you're playing the market you have, you're dancing while the music is still playing. But you do have a caution in your head saying, look, I've been around for a long time and I've never seen things this deviated from their means.

**Lance Roberts** (4:21)