EP115: if you say it enough times, it must be true

a market that continues to hit record highs despite ongoing geopolitical tensions in the Middle East, high energy prices, and rising cost-of-living pressures, with skepticism toward repeated claims of an imminent peace deal. They note the divergence between a euphoric equity market (particularly the Mag Seven) and more cautious signals from bonds and energy markets, while highlighting strong performance in lithium and uranium amid supply concerns. The episode covers Australian bank earnings driven by trading revenues, potential buying opportunities in Viva Energy after a refinery fire, Netflix’s weak outlook, and speculative AI-themed stock surges reminiscent of dot-com era hype. Valuation metrics show the market more overvalued than in November, with historical patterns suggesting a likely 10%+ pullback in the midterm election year. The hosts maintain a “high conviction do nothing” stance for now but promote their “Buy the Dip” strategy targeting the typical mid-year weakness, while voting mixed on next week’s market direction amid light data and ongoing earnings.6 One-Sentence Bullet Points:The equity market remains at record highs driven by the Mag Seven despite persistent Middle East conflicts, high oil/gas prices, and consumer cost pressures equivalent to a full percentage point rate hike.Australian banks reported solid earnings boosted by trading volumes, while Netflix was hit hard after beating estimates due to a poor content outlook and chairman departure.Viva Energy is viewed as a buying opportunity after its refinery fire, given Australia’s reduced refining capacity makes it almost “essential infrastructure.”A former wool sneaker company (Allbirds) rebranded to Newbird AI and surged 900%+ on a pivot to GPU-as-a-service, highlighting ongoing speculative froth in AI stocks.Key valuation indicators including the Shiller CAPE and Buffett Indicator show US equities more overvalued now than in November, with historical data pointing to a high probability of a 10%+ correction in midterm election years.The hosts are promoting a “Buy the Dip” strategy timed for the typical May–October weakness in midterm years, while leaning slightly bullish or neutral for next week due to positive technicals and earnings season.