Yesterday's Winning Stocks Becoming Tomorrow's Losers? And Vice-Versa? | Chance Finucane

**SPEAKER_1** (0:01)
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**Chance Finucane** (0:28)
I think you are seeing a broadening or a consolidation where some of the big winners that were driving the gains in the index in the last few years are starting to top out and there's starting to be some more questions about those. And you're seeing other sectors, other industries of the market that are showing more strength. And so for anybody who had a more diversified portfolio that might have lagged in the last year or two, they're now outperforming because those other areas are starting to act the way that you would have liked.

**Adam Taggart** (1:01)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. For years now, corporate stock prices have been growing substantially faster than their free cash flows. In theory, this shouldn't be sustainable. So will 2026 prove to be the year that the math starts to matter? Today's guest, Chance Finucane, Chief Investment Officer of high net worth advisory firm, Oxbow Advisors, thinks it may be. Chance, thanks so much for joining us today.

**Chance Finucane** (1:29)
Hey, Adam, thanks a lot for having me back on your show.

**Adam Taggart** (1:32)
Hey, it's always a pleasure to have you on, as is having your partner in crime there, Ted Oakley. You guys do a fantastic job there at Oxbow Advisors.
You guys just put out your latest outlook. One of the things that focused on, as I just mentioned there in the intro, is how stock prices have been growing substantially faster than free cash flows, really, for the past bunch of years. So I want to talk to you about whether or not you think that can sustain, and if not, what that means. But before we start, if I can, just at a very high level, what is your current assessment of the financial markets right now?

**Chance Finucane** (2:15)
Sure. When we look at it, we think the market cap indices such as the S&P 500 look expensive to us, especially given the concentration in seven or 10 big stocks that I'm sure we'll get into. The free cash flow production of those really large tech companies has gone down as they try to invest in AI, which then creates more risk if it doesn't pan out. We think there's a little bit more opportunity and more of an equal weighted, diversified approach to your stock portfolio. And then the other thing we're monitoring is, as much as it's been a little bit of a slow, steady start for the indices through the first month of the year, there's been a lot of movement under the surface, whether that's in commodity prices, specifically precious metals, that we've been taking a lot of activity within our portfolios, try to make sure we risk manage that well, and then also through certain sectors within the stock market. So it's been a lot happening in the first month of the year, even though it seems like a bit of a normal start.

**Adam Taggart** (3:10)
Okay. Yeah. And if you look at the S&P, even though it has recently hit new all-time highs, it finally cracked 7,000. It's been pretty range-bound since, what, say October or so of last year. Do you see that as more consolidation, or do you see that more as a topping process?

**Chance Finucane** (3:33)
We would expect, at least, we thought the first three, four, five months of this year was going to be more of a continuation of the up move, just because comparison to the first quarter of last year, when you had slow GDP growth was going to make it look like the economy was accelerating in the United States. That tends to be a decent backdrop for stocks. So we weren't expecting a break in the market in the first quarter. But to your point, I think you are seeing a broadening or a consolidation where some of the big winners that were driving the gains in the index in the last few years are starting to top out and there's starting to be some more questions about those. And you're seeing other sectors, other industries of the market that are showing more strength. And so for anybody who had a more diversified portfolio that might have lagged in the last year or two, they're now outperforming because those other areas are starting to act the way that you would have liked.