5 Busted Narratives In 2025

DANO WEIR: It's Friday, December 5th, 2025, and you're about to go On The Markets with Fermata Advisors, Sonoma Wealth Advisors, the Fermata family of brands. My name is Dano Weir. This week, we are looking at five busted market narratives for 2025. Things like, oh, a new presidency must mean that crypto is going to go to the moon or bonds. They're done, right?

DANO WEIR: Maybe not so fast, buddy. Three other storylines in addition to that that just didn't play out this year. What? But correction, Santa Rally appears to be in full effect with another all-time high on the books today. And which asset class is tracking toward its best year in nearly two decades? Hint, it is its own continent. Let's get the show started.

SPEAKER 2: The stock market, the economy, your money. What's the latest and what could be next? Find out now with Fermata On The Markets. Straightforward financial market updates for the brands of Fermata Advisors, Sonoma Wealth Advisors, Fermata 401k and Fermata Tax. On The Markets starts now.

DANO WEIR: Or should I say near all-time highs? I think I said something along those lines. My name is Dano Weir. I'm the Marketing Director for Sonoma Wealth, bringing in our managing principals for the entire firm, Daren Blonski, Chris Sipes, guys. How was your Thanksgiving holiday? Good time with family? How was it?

DAREN BLONSKI CFP®: Mine was so good, I got sick, Dan. So you go to these family events and you come home with a cold. What the hey?

CHRIS SIPES CFP®: Yeah, crime was big. Knock on wood, no sicknesses yet. Thankful for something else, Dan.

DANO WEIR: Yeah, I had a good one as well. And we hope everyone watching did as well. Had a good time for the holiday. And we are back in... Action this week. And as the year starts to wrap up, we can kind of start to look back at 2025. And we wanted to look at what we're calling busted market narratives. Guys, as you know, I am a huge football fan.

DANO WEIR: And at the start of every football season, everybody's got their storylines, their narratives, their things, which seem really obvious. The Chiefs were in the Super Bowl last year, and it's very clear that they're probably at least going to win their division this year and probably be close to the Super Bowl.

DANO WEIR: Yeah, well, we're... Almost through the season now and it might miss the playoffs entirely. Those same type of narratives play out in the market. And that's how I'm relating to it, too. I'm saying I'm like, oh, it's not so different from football. So, Chris, why don't you start with our first one here that we're going to talk about?

CHRIS SIPES CFP®: Yeah, I think I think that's a great point, Dan. We're getting to that time of the year where we kind of look back on on the year as it's passed, but also looking forward. And try to guess what's going to happen. Like we were just talking about off air.

CHRIS SIPES CFP®: Even though when you look back and you're like, gosh, all these things happen that I never would have seen coming and never could have guessed were going to happen. We still set goals. We still try to predict what's going to happen in the future because I think it gives us some sort of sense of control, or illusion of control, I should say, which is nice.

CHRIS SIPES CFP®: And so... We talk a lot about diversification, investing in asset classes that you may not be super stoked to go into because it's like the old Mark Twain saying about it's not what you don't know that's going to hurt you, but what you think you know that just ain't so.

CHRIS SIPES CFP®: We can't know the future. It's a good time of the year to look back one year ago.

CHRIS SIPES CFP®: See what we were thinking. And I think chief among those was new administration, very pro-crypto, you know, going to pump it, pump crypto in all kinds of ways. And, you know, that's the asset class to be in. You know, that's one. Bonds definitely left for dead. Same with foreign stocks.

CHRIS SIPES CFP®: I remember the actual phrase of, the Chinese market in particular is uninvestable right uninvestable AI will become everything i think that narrative is still Chris i feel like you're kind of bitter about them people saying bonds are for yesterday i'm a little salty about it aren't i and then you know we had the whole deficit reduction.

DAREN BLONSKI CFP®: Trade deficit reduction Doge you know you guys remember Doge yeah didn't even make it a year make it a year and in the guy that had a really explicit name that was in part of Doge Did you ever catch that headline that he got like beat up in DC and like severely damaged because he saw someone getting robbed and he stepped in?

CHRIS SIPES CFP®: No, I don't know.

DAREN BLONSKI CFP®: This I don't know.

CHRIS SIPES CFP®: The stories are just getting too weird. Like the storylines are just getting too weird.

DAREN BLONSKI CFP®: There was a guy that was like this 21-year-old dude that was running Doge and he referred to himself as Big U something. And like. All of a sudden, out of nowhere, he came across a carjacking or something, and he stepped in and ended up in the hospital, and we never heard from him again.

DANO WEIR: Yeah.

DANO WEIR: Okay, yeah.

DAREN BLONSKI CFP®: What's the story? An engineer, his name was Edward Khoris.

DANO WEIR: Was that near the Watergate Hotel?

DAREN BLONSKI CFP®: Right, exactly.

DANO WEIR: Seems very convenient.

DAREN BLONSKI CFP®: And 19 year old hacker, had an explicit code name for online.

DAREN BLONSKI CFP®: And, I guess he just got dunked in DC and someone took him out.

DANO WEIR: So we've got these, we've got, we've got these five narratives. We'll have to look at that on our conspiracy podcast, Daren.

DAREN BLONSKI CFP®: Dude, I'm like. He stepped in on a knife or something.

CHRIS SIPES CFP®: Is that why Doge went away? Because of some random carjacking in Washington, D. C.?

DAREN BLONSKI CFP®: Ex-Doge staffer nicknamed blank blank left bloodied after savage D. C. Carjacking attempt by 10 juveniles.

DANO WEIR: Also, yeah, crazy.

DAREN BLONSKI CFP®: That's kind of interesting. He was the face of Doge. They were going to change government, and 10 miners took him out.

DANO WEIR: Well, we're looking at this week, we're looking at these five things which seemed very plausible at the start of last year that just didn't end up to be the case in 2025. And it's a good time to say that because you're starting to do that now for 2026.

DANO WEIR: So let's look back. And as we have slides to speak, slides and charts to speak to all these, let's look back at, we'll look as we go through the slides today, we will note which of these correspond to busted narratives, Chris.

CHRIS SIPES CFP®: That's right so just to touch on a couple news items this week we got some unemployment information and some ADP reports and such. And so this is from Charlie Biello saying the U. S. Unemployment rate moved up to 4.4% in September, which is the highest level since October of 2021. Of course, 21 was when the reopening was happening. Market was doing really well kind of coming out of that based on...

CHRIS SIPES CFP®: Based on the reopening narrative. And you can tell based on this chart over the long term, if Charlie would have overlaid recessions, typically unemployment goes up in recessions. And so when you see those peaks in the unemployment rate, typically those are during recessions. And we're kind of on an uptrend right now. We're not on a spike, but we're on an uptrend.

CHRIS SIPES CFP®: You can see the long-term average is about 5.7% unemployment rate, and we're at 4.4%. And so that's important because that has flowed through to the Fed. Now we've got a high probability that the Fed is going to lower interest rates here in a few days on December 10th because the Fed has the dual mandate of not only price stability, aka Don't let us have inflation or deflation or too much of those two.

CHRIS SIPES CFP®: And we need full employment. So those are the dual mandates of the Fed. And the fact that the labor market's looking a little soft is given the Fed the cover they need, at least according to the market, is expecting them to have the cover they need to lower interest rates a quarter point coming up in December.

CHRIS SIPES CFP®: Which is what you can see here, the CME, Chicago Mercantile Exchange probabilities were near 90% of a rate cut in just... Few days. Now this does change a lot, but given that we're only a few days out, this is probably pretty accurate. I think the market's expecting that it's pretty much in the bag that we get a quarter percent cut on the Fed funds rate in December on the 10th.

CHRIS SIPES CFP®: All right, so how are people feeling out there? Huge swing in the sentiment. Look at that bullish sentiment jump all the way up to 44.3. Which isn't necessarily in an extreme over the longterm been much more bullish, but I do think it's interesting how much it jumped in one week.

CHRIS SIPES CFP®: We went from 32 to 44.3 really quickly. The CNN fear and greed index, same thing. We're at 41, which is a jump, which still fear, but it's a jump extreme jump from, 18 extreme fear one week ago. Bitcoin pretty much flat.

CHRIS SIPES CFP®: At 28 fear last week it was 25 extreme fear so just a little bit of a change there on the Bitcoin side of things and of course we look at Bitcoin as kind of the leading risk indicator in the market when people are feeling risk on when there's a lot of liquidity in the market Bitcoin tends to do well and it tends to lead major indices especially the nasdaq by at least a few days in terms of where it's headed.

CHRIS SIPES CFP®: So Bitcoin going up and people feeling better about it is a good thing if you're looking for some good news On The Markets.

CHRIS SIPES CFP®: All right, Dan. So I think what you're referring to here is one of the narratives from a few years ago, the Metaverse. And this week, Meta announced that they were really backing off of the Metaverse, Switch. I, for one, am glad that we're not headed in this direction, at least for now.

DANO WEIR: So I saw this headline this week, and I thought it was so appropriate for one of our busted narratives. So this was, I believe, in 2021 when these changes were made. Meta in an attempt to be more than just Facebook, because you've got to keep attracting that investor money because you're advancing, you're growing, you're building the future. Well.

DANO WEIR: According to Mark Zuckerberg, the future was wearing a headset and having a virtual version of yourself, walking around in a virtual world, playing virtual games, buying virtual real estate, and many other things. This thing called the Metaverse. They believed in it so much that they rebranded the entire company and the stock ticker to reflect this.

DANO WEIR: Well, this week, they are reportedly cutting the budget of the entire department by a third. And a lot of people are viewing it as basically the beginning of the end for the Metaverse. And I think that's really interesting to look at because when he announced it, it was sold as and positioned as the next big thing. We're early on it.

DANO WEIR: No one else is on it. This is us. It will all be this. And that is the same pitch that was given this summer for anything AI. And I share this to say, sometimes it's not. Sometimes it is. The internet definitely is. AI probably will be. But as of December 5th, 2025, my kids still have a human teacher and I'm still writing on paper. Not always.

DAREN BLONSKI CFP®: Dan, I can't imagine how this was a total flop.

DANO WEIR: Right, right.

DAREN BLONSKI CFP®: When you look at how we all would have to look in the Metaverse, I mean, I understand why this was a flop.

DANO WEIR: Exactly.

DAREN BLONSKI CFP®: Clearly, you didn't get that. You know, I hope you're really right, though, about AI. I hope AI is a flop. I hope AI doesn't change all of our lives so drastically that it's unrecognizable 10 years from now. I hope you're right.

DAREN BLONSKI CFP®: I don't think you are, but I hope you are. I hope it is completely the amount of research and stuff I've listened to and studied on AI. Nobody's ready for what's coming based upon at least what the top founders are saying tonight.

DAREN BLONSKI CFP®: But I hope you're wrong. I hope I'm wrong.

DANO WEIR: Well, the, the, I only just say that to say, you know, there's, I think, I think what, what happens a lot of times you've talked to a lot with the S curve is that it does end up causing change, right? And instead of listening to the radio, you're still basically listening to the radio.

DANO WEIR: It's just totally digital through your phone and it's off of a server. And so for the radio industry, man, that's a nightmare, you know, massive change. But ultimately, you know, you wanted a little show to listen to and you found a different way to get it.

DANO WEIR: But ultimately, you're still kind of listening to the radio, just as one example. I see that coming for AI or, you know, it could be global, you know, complete global upheaval. But at least for this year, it didn't happen this year, I think, is one of our narratives that we're talking to.

CHRIS SIPES CFP®: You know, one last thing on this, Dan, that I think is really interesting is the market's reaction to these two, you know, technologies, if you will. Remember when Meta announced the Metaverse?

CHRIS SIPES CFP®: And Zuckerberg had that earnings call where they talked about how much they were going to be putting into the Metaverse. Do you guys remember Meta stock dropping? I think it was 27% or 28% in one day. You guys remember that a couple of years ago?

DAREN BLONSKI CFP®: Yeah.

CHRIS SIPES CFP®: Yeah. So the market reaction was it hated the idea.

DAREN BLONSKI CFP®: Right.

CHRIS SIPES CFP®: Let's be honest, right? And the opposite, I think you could safely say is is true about AI where pretty much anything AI related has been richly rewarded by the market. So, you know, if we had to, if we had to use the market as a gauge on, you know, which one's going to end up being, being, you know, transformative, it looks like the market is saying, yeah, AI is going to do the thing.

DANO WEIR: And interestingly, just to that point on, on this news, I believe Meta. I believe Meta had a pop of about 5% this week on this news. Yeah. Clearly, the market don't like the idea of the headsets.

DAREN BLONSKI CFP®: You know what would be super cool, though, is if AI could just do the Meta thing for us and I always had to do that stupid place. So you could just have AI robots that went into the Metaverse for us.

CHRIS SIPES CFP®: How's that? Yeah. Yeah. Now Talking about narratives that are, you know, not what I expected. This is from Bespoke and it's showing the consumer conference, sorry, the comp conference board consumer confidence by age group. And the dark blue is under 35. The, you know, kind of lighter blue is 35 to 54 and then 55 plus in green, there. And I.

CHRIS SIPES CFP®: I was not expecting to see this. This is from, like I said, from Bespoke, and it's showing that the consumer confidence for young people, those under 35, is actually headed up. Meanwhile, those over 35 continues to trend down. I guess you could say the under 35 is still trending down, but at least less so.

CHRIS SIPES CFP®: Now, I would have assumed that the over 55 cohort given the fact that we've talked kind of ad nauseum about the fact that most of the wealth is held by that age group, all the homes are held by that group, et cetera, et cetera, you would think that their confidence would be higher based on the overall wealth of the age group. So this is interesting. I would not have guessed that this is where the data would show.

CHRIS SIPES CFP®: All right. So Bitcoin, this is a Bitcoin year to date, pretty much flat. We've been up, we've been down, we've laughed, we've cried. But the narrative, it's kind of hard to remember, but if you kind of put yourself back in late fall, I feel like people were talking a lot about, I feel like the number was 125 and we were in the neighborhood of, I don't know.

CHRIS SIPES CFP®: 80s or 90s on Bitcoin. And the thing is, we actually did hit that number during the year, but then it's kind of pulled back from there. Of course, Bitcoin is a very, very volatile asset anyway.

CHRIS SIPES CFP®: So who knows, we could end the year and it could be up 30% in the last few weeks. So anything can change from here. But I just think it's important to remember how things felt. It was just a slam dunk, it felt like at this time last year. And when it comes to investing, nothing is ever a slam dunk.

CHRIS SIPES CFP®: Another one, European equities tracking toward their best year versus the U. S. Since 2006. So almost 20 years, the stock's 600 annual total returns performance versus the S&P 500 in U. S. Dollar terms. Now, one thing that's been really helpful to foreign stocks. Is the retreat in the dollar. So when the dollar loses value relative to other currencies, that is a big tailwind for foreign stocks.

CHRIS SIPES CFP®: So if that continues, which has been a stated goal of the administration was to devalue the dollar a bit. And if they continue to do that, that might be a continued tailwind to foreign equities, along with the fact that their prices were very low, especially coming into the year relative to their fundamentals in the past. And so we've seen a strong year.

CHRIS SIPES CFP®: Who knows if this is the beginning of a different cycle. We used to have more of kind of regular cycles in this relationship between foreign stocks and U. S. Stocks. And then the last really since the great financial crisis, it's not been that way. It's been all U. S. And with foreign stocks really just kind of left for dead. So we'll see what next year holds. But this year has been a good year for. Foreign stocks.

CHRIS SIPES CFP®: Bonds, almost a swear word when meeting with clients, boy, really from 22 till this year, really, a very common question was why even own bonds? What is this ticker symbol in my portfolio, right? And given the U. S. Debts, deficits, et cetera, et cetera.

CHRIS SIPES CFP®: Really, the narrative has been, why even hold bonds? Let's look for other assets to diversify out of our equity holdings. And this is showing the long-term treasury bond just about a little over 5.5% total return this year so far.

CHRIS SIPES CFP®: By no means a knockout year, by no means a great year. But I think had you started the year and you said, ask the average person, what do you think is going to do better this year, Bitcoin or long-term treasuries? I can't imagine many people would have said long-term treasuries.

DANO WEIR: That's crazy. That's crazy when you think about it like that. And it's a good example too of the herd mentality. You know, especially if you're a new investor, bucking that herd mentality of like, well, everyone's in these tech stocks.

DANO WEIR: I better go be in those too. I don't want to be in those things that aren't doing well. Well, look what those things ended up doing in a year when absolutely this and Forge stocks. There was no reason why it should have done this, but it did.

CHRIS SIPES CFP®: Here you are seeing the S&P. And these are all in indexes. Indices. So you cannot invest in these. These are not investable, but they just are meant to track certain Markets. And the one there at the bottom is the S&P in dark blue, having a good year, no doubt about it. Definitely having a good year.

CHRIS SIPES CFP®: But relative to some of these other Markets, specifically pointing out China here in the dark green, the market that was uninvestable at at the top performer for this year at 33%, a little over 33%. This to me was probably one of the strongest narratives, especially with the new administration coming in.

CHRIS SIPES CFP®: Literally had clients tell me, I do not want any foreign stock exposure. There's no way they're going to do well with the new administration coming in, the trade war kicking off, tariffs. Et cetera, et cetera.

CHRIS SIPES CFP®: I, I don't know many people that would look back, and say, Hey, in December, which, which of the major Markets are going to be in, in front, which are going to be in, you know, lagging. And, and even for the S and P, I don't know too many people that when the trade war kicked off, when we were going through the tariff tantrums in the spring, how many people would have said that the S and P was going to end up.

CHRIS SIPES CFP®: Having a decent year. I know I would probably not have been in that camp. So the surprises are always all around when it comes to investing and you really can't, you can't know the future. You can't know the outcomes ahead of time. And it's all just a snapshot in time.

DANO WEIR: So Chris, if they can't know the outcomes and if logic is illogical and useless in investing. What can they do? Work with an advisor and come up with an allocation that fits their plan? And I mean, what would the normal, if we take our normal experience and have to throw it out the window, what does an investor do?

CHRIS SIPES CFP®: To me, there's a couple things. One is if you look at your investments and you love whatever it is that you own. I'm talking about you really have a...

DAREN BLONSKI CFP®: I feel personally attacked about my Bitcoin allocation, Chris.

CHRIS SIPES CFP®: I'm sorry. I didn't mean to attack you, Darren.

DANO WEIR: I feel personally attacked about my Nintendo allocation, Chris.

CHRIS SIPES CFP®: If you have an emotional feeling on a positive emotional feeling, if you're tied to your investment, like, hey, this thing has made me wealthy. I believe in it.

CHRIS SIPES CFP®: I believe in the narrative. I believe that this is going to be the way to be invested. Maybe look at some of these things and go, hey, maybe my belief is wrong. You don't want to get overly concentrated. The whole, the things, the things that you think are true, but just ain't.

CHRIS SIPES CFP®: So those are the ones that are going to get you on the flip side of that. If there are certain asset classes where you're like, I believe there's no possible way this could ever turn around, you know, it's left for dead there. Why would I ever want something like that in my portfolio?

CHRIS SIPES CFP®: Maybe take a look at some of those and say, you know, what's, what's, positive here that could happen? And what's the upside versus downside here? And try to kind of look at those two extremes of the portfolio and ask yourself, do I really know? Can I know at that time?

CHRIS SIPES CFP®: Okay, so where might there be some opportunities? Possibly, this is from Bank Of America The U. S. Mid-cap, so medium-sized companies, are trading at a price to earnings of 15 times versus the S&P, which is large-cap companies, mostly large-cap growth companies, trading at 22 times earnings, so a little richer valuation.

CHRIS SIPES CFP®: The B of A is showing the mid-cap versus large-cap relative valuations as at a 30-year stretch. Now. Could this continue? Could this chart continue to go down and to the right? Yes. That's the tricky thing about investing is, we've talked about a million times fundamentals valuations.

CHRIS SIPES CFP®: They're not a timing tool, cause nobody knows how long it takes. Right. But if you're looking at it as a set of proper probabilities, right. The probabilities, You're always trying to weigh probabilities with investments. And this would be one where you're like, hey, does it eventually turn? I would guess probably.

CHRIS SIPES CFP®: But you just don't know when. But you think if we're going to kind of go back to somewhat of a cycle, you would expect this relationship to turn eventually.

CHRIS SIPES CFP®: Ed yardini's research and by way of toby carlisle showing the earnings per share of small and green medium or mid caps and blue and then the S&P and red and this is over a 15 year period so despite the fact that it's been all large caps really since Covid since that gray line Toby Carlyle saying, despite the strength in large cap earnings since the pandemic, small and mid caps have grown earnings faster over the last 15 years.

CHRIS SIPES CFP®: So this is the growth of earnings over the last 15 years. So if you look at these different Markets and you say, well, sure, the MAG7, the S&P, they've outperformed because they've had all the earnings in the shorter run in the last five years. But if you stretch that out over a longer period of time, over the last 15, it's not even close that the small caps and mid caps have outpaced the large caps over that longer period.

CHRIS SIPES CFP®: So this from Charlie Biello, the U. S. Trade deficits, and this is as of the end of August, so it's probably even more extreme if we were measuring it today here in December. But let me just read Charlie's commentary here. Tariffs were pitched as the fix for America's trade deficit, but instead, the first eight months of 2024, we've got a $571 billion deficit.

CHRIS SIPES CFP®: The first eight months of 2025, $714 billion deficit, which is a 25%. Year over year gain in deficits or loss in deficits. I don't know how you would even think of that, but the deficits have gotten bigger in the last year.

CHRIS SIPES CFP®: Definitely not something I could have foreseen or many others would have foreseen or bet on that happening as the year started off.

DANO WEIR: Chris, I don't know if Charlie intended to make this look like a French flag, but it definitely does. The, just to be clear for someone who doesn't understand the trade deficit is the ratio of what we send out versus what we have to bring into the country. So we're sending out 10 loaves of bread, but we need to bring in 15 gallons of milk and thus we're at, you know, five was, is the deficit.

CHRIS SIPES CFP®: Something like that yes but it's measured in dollars essentially and and yes more more more is coming in than is going out. That's right.

CHRIS SIPES CFP®: Money supply, money supply growth. We've got year over year change this, he, Charlie's showing the year over year change here. We've, we've definitely, started the money printer backup. Now if you show a chart of them to over the longterm, we're hitting all time highs. So there's, there's still more money coming into the system.

CHRIS SIPES CFP®: I'm definitely a big believer that this drives a lot of what's happening in financial Markets, good and bad, is the overall liquidity, how much money is sloshing through the system. And we are continuing to add to that supply now. That drop that we saw from 21 into 23, that's when all assets really struggled.

CHRIS SIPES CFP®: Really the only Parts of the portfolio that were holding up at that time were trend following funds and everything else was pretty much getting whacked. And that was due to the drop in liquidity. They dropped the M2 there for a while and money supply was shrinking. Well, that's reverse course and we're headed back to all time highs in the money supply.

CHRIS SIPES CFP®: So the status quo from a government and Federal Reserve standpoint have continued, which really isn't a surprise when you think about it. Usually only changes are made when we hit a crisis. Some sort of financial crisis, some sort of major market crisis is what generates change at both the government level and the Fed level. Otherwise, they're going to continue to kick the can down the road.

DANO WEIR: We move on to the second half of our presentation. As I mentioned at the start of the show, near an all-time high this week. Let's look at the charts themselves. Darren, you want to fire up some candlesticks for us?

SPEAKER 5: It's getting cold around here, paging Mr. Blonsky.

DAREN BLONSKI CFP®: Trying to share my screen. It wouldn't let me come off mute while I was sharing my screen. Screen and I'll have to apologize ahead of time for my voice today. This particular cold seems to go after the voice box, but nonetheless, let's dive into it.

DAREN BLONSKI CFP®: So yeah, interesting week in the market, kind of getting the float higher into the end of the year, right? It looked like a couple of weeks ago that we were headed down, but that seems to be confirmed through now that we're not going to be doing that. So when we take a look at our S&P 500, this is the S&P 500 on a heat map.

DAREN BLONSKI CFP®: So one of the things I've talked a lot about this year is NVIDIA and how large of a concentration NVIDIA is versus some of the other stocks in the S&P. This is the capitalization size of NVIDIA versus, let's say, this is the entire oil sector over here. So pretty significant.

DAREN BLONSKI CFP®: And I was debating amongst my own selves today and I was thinking, you know, where could I be wrong in this thesis that eventually these bubbles go down, which I think that's probably the case. And I was looking at the world stock indexes and these are all the different country indexes. So you can see, interesting. So we go to Taiwan and look at Taiwan. Taiwan is primarily one company on their entire index.

SPEAKER 5: Wow.

DAREN BLONSKI CFP®: And it's been that way, and that's Taiwan Semiconductor. That's why the U. S. Continues to defend Taiwan the minute. We get all these fabs built in the United States where we can build these chips that they're building in Taiwan.

DAREN BLONSKI CFP®: I think it might be a game-over situation for Taiwan because right now, if we let the Chinese take Taiwan, it would be absolutely horrific for the world and our ability to get chips because then they would have all the control on the chips. So that would be a pretty bad concern.

DAREN BLONSKI CFP®: Just about half of the things we use on a day-to-day basis now, these are chip, have chips. So I think that's interesting. So in theory, we could look at the S&P, and maybe it's possible that these large capitalizations go on forever.

DAREN BLONSKI CFP®: I think that's less likely, but it's possible. I'm still doing some interesting research on Palantir this week. And Palantir's been quite the stock, and it's... Really had a pretty good year.

DAREN BLONSKI CFP®: And one of the things with Palantir I think is kind of interesting is that nobody seems to know exactly what they do. Other than Peter Thiel, it's a Peter Thiel company, and they're very much in bed with the CIA. So everything they do is like top, top secret. I think that's kind of interesting.

DAREN BLONSKI CFP®: And from the sense of like from an AI standpoint, the AI is so integrated into everything we're doing. Both on a government level and becoming more and more on a grain that I think it's less likely we have the antithesis that it, it doesn't become something and completely change our life, but it's still possible.

DAREN BLONSKI CFP®: All right. That was, I was diverging on a side note there, guys. Sorry. So, let's take a look at the S and P 500 and, the candlesticks. So each one of the candlesticks represents a day in the market. So we're on the daily chart right now. So this was today. Really wasn't a lot. Looks like a doji, which could be a topping.

DAREN BLONSKI CFP®: Could also be the beginning of a change up, a really strong thrust upward. Why this wasn't an all-time high, albeit that it did close above the high from back in November, we have this other candlestick back here from October 29th that still in theory opened up higher that day and closed up higher than where we're at right now. But these two candlesticks are all we're contending left to be for our all-time high.

DAREN BLONSKI CFP®: Once we pass these, then we'll be at an all-time high. Market's doing what it typically does from a seasonality perspective in the end of the year, kind of tends to float higher. We come into January, things seem to be generally okay in January from a seasonality perspective and then taper off into February.

DAREN BLONSKI CFP®: There is a seasonality to the Markets. And understanding those seasonalities helps you understand how to make decisions in your portfolio.

DAREN BLONSKI CFP®: So you can see that we're definitely flirting with all-time highs. When we look at the VIX, which is a measurement of how volatile the Markets look to be 30 days out, you can see we have these massive kind of double-top patterns that hit us this fall. And now we're below this neckline here.

DAREN BLONSKI CFP®: So I think less volatility is the way for a little while. So I would expect things to float higher based upon this chart, based upon where SPX is in the end of the year. Let's take a look at bonds. Bonds certainly had an incredible year. I can't wait to do our end of the year broadcast. We should do like something cool for that, Dan.

DANO WEIR: We could do a countdown. We could do the greatest hits.

DAREN BLONSKI CFP®: The greatest hits.

DANO WEIR: The greatest hits of the year.

DAREN BLONSKI CFP®: That right. So you can see right at the beginning of the year, see this was January for bonds for the ag index. And right now the ag index is, let's get our clap right for Chris here. Okay. Just because we want to make him feel good because he was taking it on the chin for a long time for these bonds. Yeah, that's right.

SPEAKER 5: Bonds are up to 7%.

DAREN BLONSKI CFP®: Okay. 7% this whole year. That's a great year for bonds. The rise continues, maybe a double top forming there. There's kind of some precariousness here, but I wouldn't be too concerned at the moment. I think with some of the jobs data that we do have coming out, we're not getting a lot of it out of the government.

DAREN BLONSKI CFP®: But with the data coming out, it does appear that jobs are weak and that will give the Fed room to move the interest rate. We have officially ended quantitative tightening, I believe, this week, which means that liquidity is getting loose.

DAREN BLONSKI CFP®: In the system, which then can speak to why we're approaching all-time highs, right? I think if there's any million-pound gorilla, if we can make up such a term as that, a million-pound gorilla, it is liquidity, global liquidity. And what that has to do with is how easy money is. Are interest rates headed down? Is the Fed printing more money?

DAREN BLONSKI CFP®: Are other governments around the world being stimulated with their currency? Liquidity is everything with Markets. And if you can track... Times when things really pull back, it comes with a period of less liquidity. And why? Because people can't build. People can't grow. People can't do things in the economy when there is no liquidity. Silver. Wow. Look at that, guys.

DAREN BLONSKI CFP®: Silver's starting to look like a meme stock. Gold did its thing here. Kind of memed it. And then it's tapering sideways, I guess. But silver crushed it this week. Look at that move. Had a massive move. That was last Friday, and then we came up in, and it looks like we're holding, that looks like a mean bull flag to me. So there's your bull flag.

DAREN BLONSKI CFP®: So I think things are probably likely to keep headed north on silver. Which I think is really interesting. Meanwhile, we have Bitcoin getting pummeled. I guess you could argue, though, that, let's see, so this would have been November 25th. First was our bottom. So one could argue that it's actually bottoming at this time because we're making higher lows.

DAREN BLONSKI CFP®: The fact that we lost this 20 period moving average is not great for the day, although it's three o'clock. We probably got, so we got under two hours on this market almost, a little less. If it trades up above 89, call it 90, I think we got this.

DAREN BLONSKI CFP®: Is shaping up to be our bottom. Here in this 20-period moving average, you can see breakout, rejection, break, rejection, break, rejection, break up, but then it looks like it's going to get rejected again and go below that 20-period trading moving average.

DAREN BLONSKI CFP®: That red line is kind of where the traders start seeing, they seem, no one really knows, but seem to get interested or excited. This will get out on the weekly, see if this has anything else that's interesting to us.

DAREN BLONSKI CFP®: Yeah, I mean, it's definitely looking like it's got a short-term bottom. And for all those Bitcoin haters out there, Chris, you can see that we're definitely...

SPEAKER 7: I am not a Bitcoin hater.

SPEAKER 7: I don't want to hate you. Poor Chris. We have a few people that listen now, not just, you know, your mom and my dad anymore. So like, I don't want to be known as the bond guy who hates Bitcoin.

DANO WEIR: We, we're going to know it's a thing when you hear it in your first client meeting and someone's going to sit down and go, Chris, you know, I know you're a bond guy is that's when we know that the shark has been jumped and we've put this into the culture.

SPEAKER 7: That's right. That's what I get. People will say to me.

DAREN BLONSKI CFP®: You know, you're kind of into Bitcoin, aren't you? And I'm like, I mean, I think it's an asset class like everything else. I'm not like a maximalist. I actually got kicked out. Did I ever tell you this? There was like on X, there was like a Bitcoin only group. And I kind of pushed back on all these guys that were like super maximalist Bitcoiners. They kicked me out of the group.

DAREN BLONSKI CFP®: They didn't want me in their cult. So I'm not really a maximalist. I just see as an asset class like anything else. But technically we're still in an uptrend here. Precarious uptrend, but we're technically still in an uptrend in Bitcoin. And it's all about time frame, right? We're looking at the weekly and you look at the monthly. It just tends to have bigger swings, right? There's more volatility to it.

DAREN BLONSKI CFP®: But it's just an asset class like anything else. Just like Chris said earlier so wisely, do not fall in love with any investment.

DAREN BLONSKI CFP®: And the minute you're falling in love with your investment, you're up a creek, buddy.

DANO WEIR: Can you make a distinction, though, between falling in love with an investment and understanding and feeling good about an investment? Because it feels like in order to be in something and ride it, let's say, and this would be a concentrated traded position or single stock or asset class like Bitcoin.

DANO WEIR: You do have to feel a certain way about it, right? You do have to either like the fundamentals or you're good with the volatility. But there is, it seems like there's a line between being okay and being in love.

DAREN BLONSKI CFP®: Well, I, for me, I think it's different for everyone. But for me, it's like. If I'm not willing to question my assumptions, like I was just doing a minute ago with this assumption that NVIDIA is this bubble, you know, I was showing you Taiwan and TSMC, which is, you know, the bulk of that economy.

DAREN BLONSKI CFP®: Like, well, maybe we're moving to an economy where AI is the bulk of the market because it takes the bulk, it creates the bulk of the value for the economy, right? So maybe those capitalizations stay intact. On the one hand, I could argue that.

DAREN BLONSKI CFP®: On the other hand, I could argue that NVIDIA is a complete bubble. And all this AI stuff is a complete bubble, but on the S-curve that eventually it's going to, you know, it's going to correct, but then completely change our lives. So to me, it's about, are you willing to question your assumptions?

DAREN BLONSKI CFP®: Are you willing to step away from your narrative and say, where am I wrong? Where am I misunderstanding? What data don't I have? If you're not willing to ask those questions of yourself. And those questions make you feel uncomfortable, then you have an issue.

DAREN BLONSKI CFP®: It's kind of the same thing with politics, right? Especially on our feeds these days. It's so easy to get Fed certain political slants on our feeds, and then it just becomes this echo chamber, and that's all you can hear.

DAREN BLONSKI CFP®: And so one of the indicators I use for myself... In trying to understand when I might be over the top, committed to some position or some belief system or some approach, is when I'm dismissive of other people.

DAREN BLONSKI CFP®: Like that's a tall tale sign for me of like, oh, if I'm being dismissive of this person and their opinion and I'm blocking it out, then it's actually probably more a reflection of my over-commitment.

DAREN BLONSKI CFP®: And so I think each of us has to find that piece or that part of us emotionally that's that indicator. And when it comes to investing, it's really, really, really, really important to understand what that point is for yourself. Because this was interesting. I was looking at this.

DAREN BLONSKI CFP®: We're going to look at bubbles.

DAREN BLONSKI CFP®: You got me going. So you can thank me later, Dan. So.

DANO WEIR: We've never seen the bubble. Show me the bubbles.

DAREN BLONSKI CFP®: Show you the bubbles. So this is what we're looking at. This is the S&P 500. So these are the 500 S&P 500 companies. So the ones that are negative. So right now we're looking at one day performance. It's actually, so we're looking at one day performance and this tells you what these stocks did today. So, and where they were in juxtaposition to. The other stocks in the index.

DAREN BLONSKI CFP®: And so this is why investing in indexes is often valuable because you can generally look at this and say there seems to be a positive skew to the whole index.

DAREN BLONSKI CFP®: So the positive skew, meaning that when you combine all these, there's a positive skew to it versus a negative skew. So if this is neutral line right here. Just from an appearance level, there's more above the zero line than there is below. And that's why investing in indexes tends to be a more effective way to invest than trying to guess which one is the right investment.

DAREN BLONSKI CFP®: Like, well, if you invested in Ulta Beauty, you crushed it today. You had a great day. But if you invested in Paramount Skydance Corp., you ate it hard. And so when you're trying to pick winners and losers and which one's going to be above the line positive, which one's going to be below the line negative, it's a very difficult job to do it consistently.

DAREN BLONSKI CFP®: And so what often young investors do or newer investors is they pick one and they're like, you know, they pick Cooper companies, whatever the heck that is, and they hit it out of the park with Cooper. And then They're like, well, I did it so good on this one. I'm going to pick another one. But their next one, it's maybe not even a loser, becomes this company. What company is this? Tapestry. And it does nothing.

DAREN BLONSKI CFP®: They're like, well, okay, that was just a bad app. And then they end up picking WRB, WR Berkeley Corp, and then they lose money. And I call that the law of averages, right? The law of average investing. The more positions you try to... A pick, the more likely it is in the end, it will average out to the end.

DAREN BLONSKI CFP®: Very hard to pick stocks above the index consistently so, especially in a day where we got computers the way we have these days. The people who are doing it successfully are not talking about it, trying to keep it on the DL.

DANO WEIR: You mean they're not selling a mastermind course that I just need to buy for $59.95 two months a week?

DAREN BLONSKI CFP®: Exactly. Usually if they are... Selling you a mastermind course. Like, why would you go tell everybody about your course? I mean, you, there are courses you could do okay on, but, but if someone's willing to tell you their secrets, why? And I would cite Renaissance Capital as an example.

DAREN BLONSKI CFP®: So Renaissance Capital, was this, I, it still is this highly secretive Wall Street firm that no one knows anything about. Their early years, they were using math. They were one of the first groups to start using math to try and solve the market and figure out how to beat the market.

DAREN BLONSKI CFP®: And eventually, they figured out a way that they were doing very, very well. And they did so well that they kicked and they fired all their clients because they didn't want, they realized that if we have too much money to deploy above and beyond our money, someone else will figure out what we're doing and we can't move.

DAREN BLONSKI CFP®: Quietly enough in the market and then the market will adjust to our you know our secret sauce wow so typically people who have a secret sauce aren't going to talk about it because the market will wash it out and it's affecting this over time so anyway long story short those are the bubbles but bottom line is it's really hard to pick something above and beyond the market in the indexes and if you get lucky on one celebrate your luck good job that's awesome But then question yourself, I don't know if I can do that again.

DAREN BLONSKI CFP®: And if you don't have a high degree of skepticism, then you're probably in for blowing up an account. And you can always tell the brand new investors at Thanksgiving dinner when they're like, I just bought. And I'm like, oh, you must have just started.

DAREN BLONSKI CFP®: Because people who have really done this and been around the block, they stop bragging about it because they've done enough damage to their accounts and they're just not going to talk about it. Anyway, that's the soapbox for today. Let's take a look at the 10-year. Oh, no, not the 100. Do we want the 10-year? There we go.

DAREN BLONSKI CFP®: So kind of eyeing the 10-year. It sounds like rates are going to be headed down. I've been watching this trend line always since 2016. You can see we're working our way up along. It's still holding on, but the trend has been up.

DAREN BLONSKI CFP®: And then we have these moments where the market really gets pummeled, like in COVID, and the interest rates really shoved interest rates down. So we see another significant correction, recession coming in. Might be time to check back in with this 200-month moving average. See where the weekly, oh, interesting, the weekly, the 200-weekly moving average is coming up right under this area, which will create support.

DAREN BLONSKI CFP®: If we fall through that. Like you can see where it was creating support, it would fall through, then it tends to get a little negative. I'm just looking more and more to me like we're headed for a downward rate spiral. How fast, I don't know.

DAREN BLONSKI CFP®: That's what I would look at there on the 10-year.

DAREN BLONSKI CFP®: All right, well, I think we'll leave it there. Chris, Dan, anything else you want to add?

SPEAKER 7: Nothing from me.

DANO WEIR: Just happy holidays to everybody. Hope you had a great Thanksgiving. Hope the ones coming up are great for you and your family. Thank you for checking out our show this week. We appreciate it, especially if you check it out every single week, all the way until the end. That's when we give out the thank yous, just to you, is at the very end. So thank you for making it this far, and thank you for checking us out.

DANO WEIR: Maybe you were new this year. We're doing it again next year. We're doing it every week. We're doing it forever. It's called On the Market. Subscribe wherever you are. That's a great way to... Not miss any future episodes. And if you're new to our firm, SonomaWealth. Com is where you can find our free wealth analysis and learn more about our firm. We will see you next week On The Markets.

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