Name: 'Stagflation' Crisis: How Bad It Can Get | Ted Oakley
Uploaded: 2025-03-20T02:19:26+00:00
Duration: 1900 s

Speakers

Ted Oakley — Founder & Managing Partner, Oxbow Advisors

Summary

Ted Oakley of Oxbow Advisors discusses stagflation risk and a defensive investment posture. He thinks US equities remain expensive and risky given high valuations and broad ownership, so he favors liquidity, short-term fixed income, gold, real assets, and a tactical 30-year Treasury trade. He expects inflation to stay elevated, long-term bonds to become unattractive after a yield decline, and the dollar to weaken over the long run.

Ted Oakley says market uncertainty and high valuations keep him defensive on US equities.
He favors short-term fixed income and liquidity because inflation may average 3.5-4% over the next decade.
He owns gold and gold miners as a dollar-diversification and long-term store of value.
He also likes real assets and commodities, including fertilizer, metals, iron ore, and income-producing real estate.
He took a tactical long position in 30-year Treasuries, expecting yields to fall before midyear.
He would sell long-term bonds if rates decline again, citing stagflation risk.
He sees long-run downside for the US dollar, though he does not trade DXY.
Discussion includes wealth transfer and second-generation wealth planning.

Ideas

Ted Oakley Founder & Managing Partner, Oxbow Advisors 4:37

US equities still expensive; stay defensive.

Ted is defensive on US equities because valuations remain expensive even after the pullback: forward multiples are still over 21x versus 15x when the 10-year yield was above 4% historically, current earnings are around 28x, US equity market cap relative to GDP is far above world GDP, and stock ownership is extremely high across retail and older investors. He sees uncertainty hurting markets and believes investors are poorly positioned for a prolonged bear market, so he holds liquidity and Treasuries rather than buying stocks until values are cheaper.

Ted Oakley Founder & Managing Partner, Oxbow Advisors 20:03

Own gold and miners as dollar hedge.

Ted owns gold and gold miners and expects the rest of the world and central banks to keep buying gold because they do not want to hold dollars, especially given US government debt and fiscal/monetary trends. He notes gold has outperformed the S&P, bonds, and everything over the last 25 years and does not need a dividend to be a valid store of value.

Ted Oakley Founder & Managing Partner, Oxbow Advisors 22:37

Tactical long 30-year Treasury trade.

Ted recently took a position in 30-year Treasuries in income accounts as a trade, not a long-term hold, expecting one more turn lower in yields—10-year below 4%, potentially 3.5% or less—if the economy or stock market softens before midyear. He would use that rally to exit long-term bonds.

Ted Oakley Founder & Managing Partner, Oxbow Advisors 25:30

Keep fixed income short amid inflation.

With inflation likely to average 3.5-4% over the next decade, Ted keeps fixed income short—under 48 months, often 2-4 years—and buys munis with short calls or short maturities to capture better rates. He argues long-duration bonds make a 25-year bet that today's rates are right and were wrecked in 2022-2024, so investors should avoid extending maturities.

Ted Oakley Founder & Managing Partner, Oxbow Advisors 27:54

Real assets and commodities look attractive.

Ted is positive on real assets and commodities because commodities have gone nowhere relative to stocks for 25-30 years, creating a setup for better performance, and commodities can do okay even in a recession. He owns income-producing real estate and specific real assets including fertilizer, metals, and iron ore.

Ted Oakley Founder & Managing Partner, Oxbow Advisors 30:06

Long-run dollar downside, watch DXY.

Ted thinks the US dollar is likely to weaken over the long run because policymakers would prefer a lower dollar to support domestic business and because inflation pressures tend to weigh on the currency. He does not trade the dollar himself but sees these forces pressing against it.

'Stagflation' Crisis: How Bad It Can Get | Ted Oakley

Summary

Ideas

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