Oxbow Advisors founder Ted Oakley warned US equities could decline at least 40%
— and possibly more — in a 'generation-level' bear that could last one to two
years. He said valuations sit about three standard deviations above normal and
that mean reversion would require a 40–45% drop; chasing a final 6–8% upside now
carries roughly 25% downside risk. Oakley flagged semiconductor concentration
risk (10–12 names account for roughly half the market) and used Intel's
multi-decade recovery after 1999 as a caution against late-cycle buying. Oxbow's
equity exposure is slightly above 60% across 45 stocks, with the remainder in
short-term Treasures. The firm is overweight energy and commodities — Oakley
said he would be surprised if oil does not return above $100, arguing
production-side disruption is worse than widely recognized — and expects gold,
miners and silver to rebound next year as momentum unwinds. CIO Chance Finucane
said the firm is cautious on 2027 because next year will face a high 1H base,
which could slow growth and produce disinflation that is not supportive for risk
assets.
