Ted Oakley: Hidden Leverage Is Everywhere — And It's at Record Levels
Summary
- The speaker operates in a 2026 context where the Dow has crossed 50,000, Gold is over $5,000, and Silver hit $100.
- Warns that the "Second Year" of a presidential term (referring to 2026) historically yields only 1% returns and often sees significant mid-year drawdowns.
- Identifies a "dislocation" where the "Big 10" tech stocks are faltering while industrial, foreign, and commodity stocks are outperforming.
- Maintains 50% portfolio liquidity in short-term Treasuries, citing record leverage (margin debt as % of market cap) as a systemic risk.
- Believes the US is in a "financial repression" regime where rates are held low but real inflation remains high (4-5%) to manage the $40T debt load.
Trade Ideas
He says "you really can't own the long paper" (10-30 year bonds) because inflation will average 4-5% over the next decade. With US debt at $40T, the government must inflate away the debt (financial repression). Holding long-duration bonds with fixed yields below the real inflation rate guarantees a loss of purchasing power. AVOID long-duration Treasuries. A deflationary crash would make long bonds the best performing asset.
He explicitly says "we don't own Nvidia" and notes that the "Big 10 stocks" are not doing well relative to the broader market. He views the valuations of AI and tech high-flyers as "too expensive" and disconnected from the reality of their ability to generate profits matching those valuations. He compares this to the 2000-2002 tech unwind. AVOID overvalued large-cap tech. AI productivity gains justify the valuations; momentum continues despite fundamentals.
Ted Oakley
Founder and Managing Partner, Oxbow Advisors
He explicitly stated he sold/trimmed Silver positions at $100 and Gold recently, expecting a consolidation period of 3-4 months. He targets re-entry at Silver $50-60 and Gold in the low $4,000s. While long-term bullish on hard assets due to fiscal dominance, he views the recent parabolic move as unsustainable in the short term. The trade is to wait for the specific pullback levels to re-deploy capital. WATCH for the pullback to buy (do not chase current highs). Prices continue to go parabolic without a pullback, leaving the investor on the sidelines.
Ted Oakley
Founder and Managing Partner, Oxbow Advisors
He names Gildan (t-shirts), Campbell Soup (6.5% dividend), and Union Pacific (merger synergies) as recent buys. As the "Mag 7" trade unwinds, capital is rotating into "bread and butter" companies with high free cash flow, dividends, and industrial utility. These stocks offer defensive characteristics in a volatile "Year 2" election cycle. LONG defensive value and industrial stocks. A "melt-up" in growth stocks would cause these defensive names to underperform significantly.
Ted Oakley
Founder and Managing Partner, Oxbow Advisors
He states they own oil and oil service stocks because they are "underowned" (2.3% of S&P vs historical 30%) and pay high dividends. He believes global oil supply is lower than the IEA estimates and that prices will be much higher in 2-3 years. The sector provides a hedge against the structural inflation he predicts. LONG Energy producers and services. Global recession crushing energy demand; geopolitical resolution increasing supply.
Ted Oakley
Founder and Managing Partner, Oxbow Advisors
Oakley states his firm keeps about 50% of assets in short-term Treasuries and recently moved duration out to three years to "lock" rates. He anticipates a mid-year market decline typical of the second year of a presidential term. Moving to 3-year duration secures yield before potential rate cuts while avoiding the inflation risk inherent in 10-30 year bonds. LONG short-to-intermediate duration Treasuries as a cash proxy and volatility buffer. Inflation spikes significantly above the locked yield; missed upside if equities rally continuously.
Ted Oakley
Founder and Managing Partner, Oxbow Advisors
He criticizes Private Equity for paying multiples higher than public markets for small companies and using excessive leverage. He argues that the illiquidity of PE is masking losses ("they can't sell it") and that secondary funds are a "gimmick." When the credit cycle turns, the leverage in these portfolios will cause significant impairments. AVOID Private Equity and Private Credit exposure. Private markets continue to attract capital flows, keeping valuations artificially supported.
Up Next
This Julia LaRoche Show video, published February 17, 2026, features Ted Oakley discussing TLT, NVDA, QQQ, SLV, GDX, GLD, CPB, UNP, GIL, XLE, OIH, SHY, IEI, PSP. 7 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Ted Oakley · Tickers: TLT, NVDA, QQQ, SLV, GDX, GLD, CPB, UNP, GIL, XLE, OIH, SHY, IEI, PSP