Stock Talk - 4Q25 Outlook: "Let's Get it Started" - V-Bottom Month 7. Stock Market Update, Friday October 17, 2025

Starting point is 00:00:00 Okay, investors, maybe five or ten years from now, investors will look back and cry about the 21 trading days in September of 2025 as the top of the AI bubble. By view, as I doubt that will be the case that we've seen the top. Moreover, I also disagree with the recent calls from the likes of the legendary trader of Paul Tudor Jones that we are in late 1999, replicating the near end of the dot-com bubble. Yes, investors, we just got through a near historic third quarter for stocks, particularly the combined positive returns of August and September, which historically amount to nothing net over two months, with August most often being up and being negated by a down September. Here's a chart from Carson showing third quarter returns since 1970. First off, I flat out don't see

Starting point is 00:00:49 the comparison to the third quarters during the 1998 through 2000.com run. Data says otherwise. The third quarter of each of those years was negative. In fact, Paul Tudor Jonah, analogy, it's early fourth quarter in 1999. I can't disagree anymore. In the summer of 1999, the S&P 500 was down minus 6.9%. Not up 7.6%, just like we returned in the third quarter of this year. Here's the seasonal table for the S&P 500 throughout the dot-com internet buildout for you. If you want to make your own decision on this, Paul Tudor Jones was one of the world's best traders in his days. However, I'd argue like most of the retired bill, and our hedge fund managers I've heard on financial TV for the last five to ten years.

Starting point is 00:01:34 Most of all their advice has been ill-timed or just flat out wrong. They don't trade the way they did when they were making their fortunes. I mean, it doesn't take much of a Google or Gemini search to see that Paul Tudor Jones has been negative for years. And as recently as May, he said the S&P 500 would fail to rally and take out its April tariff Teetrum lows regardless of a tariff truce. The S&P 500 has rallied over 20. in the five months since that call. Nearly in a straight line with very little volatility.

Starting point is 00:02:06 And now near what looks like a short temp talk in early October, he says you need to get long and ride the last innings of a bubble up move. Looks like that advice should you ignore it. Looks to me like advice that most of you should ignore and consult with your advisor to see where your plan stands with the gains most of you are likely to have in stocks here to date. You've been following our videos, we've been discussing the dot-com internet build-out first AI build-out analogy for over a year and increasingly positive on it since the mid-April stock market v-bottom this year. Others have been trying to scare you about a comparison in a negative way, or it about being a bubble. This might have been the 10th video I've done on this the last 5 to 6 months.

Starting point is 00:02:50 In our work, if you're making this analogy, are April 2025 tariff loads when the S&P 500 was down, minus 21% off its highs corresponds to the long-term capital management lows in early October 1998, with the S&P 500 also down minus 21%. Using this timing overlay, which has accurately and almost precisely mirrored the dot-com rally, would put you in late March 1999, say, three to four more months to go in our initial V-bottom rally to more new all-time highs. I mean, would this make sense now? To me, the answer is yes. No one still gets in. Here's the longer-term overlay and the zoomed-in version of where we could go if we're to go in the same path in the future. We're heading into the seasonally strongest period of the year, the fourth quarter. However, I am expecting most of the

Starting point is 00:03:42 net gains of the fourth quarter to come in December. The presidential cycle in the investor's favor right now in the fourth quarter in the first year of a presidential cycle, leaning very positive, averaging almost a 3.8% gain with a 77.8% win rate. That kind of return would say we print 7,000 on the S&P sometime in December. As I've discussed since the April V-bottom move and seasonal history says rally in stocks isn't over. We've covered the date of the last few months on this. Go check out our prior videos on the topic. Today, the AI buildout is leading. These high relative strength groups may pause for a little while after their selling. September's and third quarter performance, but they will likely continue to work in the months ahead.

Starting point is 00:04:27 Throwing some down and out health care and energy and material names who have been beating numbers, but whose values have been cut in half by the government and economic fears. What could cause a true parabolic move next year farther out in 2006, like happened during dot com? Well, I'm just guessing here, but a new, more doveish-fed chair is being appointed by President Trump next April or May would correspond almost exactly to when the last. leg up and the dot-com run began. Recall, the dot-com run lasted almost exactly 18 months from the long-term capital management bottom in October 1998. But Chris, stocks move on both interest rates and earnings, and in 2006, earnings can't support that kind of move up. That's what I've heard for the last

Starting point is 00:05:09 couple months. Well, if you believe the quarterly earnings estimates that Goldman Sachs has, they can move up like that. Here's the table for quarterly earnings for the S&P 500, growth rates historically, and going forward in 2006. Investors, remember that the SP500 historically anticipates economic bottoms by troughing one to two quarters in advance of the economy. However, this isn't the case at market tops. Historically, the S&P 500 tops coincident with earnings growth rates. It hasn't historically peaked in advance in the advance of earnings growth. Investors, why not be prepared in advance of the fourth quarter of 2025 to hear about the chase for performance into year end before it 10? takes place. Investors, if the V-bottom pattern continues an historic path, which I expect,

Starting point is 00:05:57 maybe we hit a new all-time high in October, month then, and pullback again in November, before the year-end rally and sprint begins. V-bottoms historically do not have extended for deep pullbacks on a percentage term until after the 10th or 11th month as you approach a year-holding period for those investors who bought at or near the loaves. Think back to the Friday sell-off a week ago. The market dropped about minus 2.5% and quickly regained its footing early in the next week. Expect more of that over the next few months, with pullbacks largely being buying opportunities into mid-next year first quarter. Investors know that regardless of the path through the economy and the financial markets in the next few months, the investment team at Oak Harvest will be here.

Starting point is 00:06:41 Until next week, have a blessed weekend and know that Oak Harvest team is doing what we can to plan for you and your family's future, regardless of what stage you're at in your career or in your retirement. All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not guaranteed. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you and nothing in this podcast should be considered as personalized investment, tax or legal, advice or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not

Starting point is 00:07:28 available for direct investment and your investment results may differ when compared to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.

Stock Talk - 4Q25 Outlook: "Let's Get it Started" - V-Bottom Month 7. Stock Market Update, Friday October 17, 2025

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