Ted Oakley: Why This Is ‘Much Worse’ Than The 1970s – And That’s Good For Gold
Ted Oakley, founder of Oxbow Advisors, warns that the current risk-reward setup in financial markets is unfavorable, with potential rewards of only 5-6% against risks of 25-30%. He believes earnings estimates for 2027 are too high, citing a slowdown in AI growth, a struggling real estate sector, and declining manufacturing. Oakley expects the Federal Reserve’s rate hikes to be a mistake, potentially leading to a sluggish economy in early 2027. He maintains a defensive posture with 55% of portfolios in short-term Treasuries, emphasizing that cash is the only safe haven during market declines.
Oakley sees value in energy stocks, which trade at low single-digit P/E multiples, but notes they are not immune to a broad downturn. He has trimmed energy positions after recent highs. He holds gold bullion as a long-term currency hedge against persistent fiscal deficits and dollar debasement, though he expects near-term volatility. Gold miners are attractively valued with strong earnings and reduced debt, but Oakley awaits a clearer market bottom before adding. He also favors royalty companies like Wheaton and Franco-Nevada for their lower capital risk.
Other commodity exposures include iron ore, copper, and fertilizers, with the latter benefiting from potential agricultural demand due to La Niña. Oakley’s firm, Oxbow Advisors, prioritizes capital preservation over aggressive growth, catering to clients who have experienced liquidity events and seek to avoid significant losses.
Timestamps:
00:00:00 – Introduction
00:00:47 – Risk/Reward and Market Positioning
00:02:09 – Where Do the Risk/Reward Numbers Come From?
00:03:23 – Current Market Multiples and Earnings
00:04:42 – Tail Risk and the Wealth Effect
00:05:52 – AI Boom vs. Historical Bubbles
00:07:18 – Portfolio Defensiveness and Cash Allocation
00:09:46 – Outlook on US Treasury Market
00:12:15 – Hard Asset Allocation Strategy
00:13:44 – Energy Cycle and Middle East Conflict
00:16:26 – Energy Valuations and Quality Gates
00:20:01 – Importance of Inventory in Energy
00:22:10 – Gold Outlook and Portfolio Role
00:24:22 – Rate Hikes and Gold Dynamics
00:29:41 – Gold Miners and Royalty Companies
00:36:06 – Fertilizer and Agriculture Outlook
Links
About the Guest
J. Ted Oakley, CFA, CFP, is Managing Director and Founder of Oxbow Advisors. With more than forty years of experience in advising high net worth clients in the investment industry, Oakley implements the firm’s proprietary investment strategies and the “Oxbow Principles” to provide a unique investment perspective. He is a frequent guest on FOX Business News, Bloomberg Radio, Thoughtful Money, The David Lin Report, and many more.
Mr. Oakley is a Chartered Financial Analyst (CFA) and a Certified Financial Planner (CFP). He is a member of the Austin Society of Financial Analysts. He is also a Partner of Herndon Plant Oakley Ltd., an investment company. He is a Board Member of Texas State Aquarium, American Bank, and American Bank Holding Company. Mr. Oakley is a United States Army Veteran.
Mr. Oakley began his career in Dallas, Texas, over 40 years ago. He is the author of Eleven books: You Sold Your Company, $30 Million and Broke, Rich Kids Broke Kids – The Failure of Traditional Estate Planning, Crazy Time – Surviving the First 12 Months after Selling Your Company, Wall Street Lies, Danger Time, My Story, The Psychology of Staying Rich, Your Money Mentality, Stay Rich with a Balanced Portfolio & his 2025 latest release: Second Generation Wealth.
Mr. Oakley’s primary philanthropic interest is helping children. He is Chairman Emeritus and Founder of the Foster Angels of South Texas, the largest foster child foundation in South Texas, as well as Chairman Emeritus and Founder of Austin, Texas-based Foster Angels of Central Texas. Also, President and Founder of Advocates for Foster Children Foundation. Mr. Oakley recently arranged for Foster Angels in South Texas to represent The Heart Gallery of Texas to further their adoption efforts.