To investors,
The US government shut down earlier this week and market commentators predicted excruciating pain in financial markets. The exact opposite has happened though. Adam Kobeissi points out the market bottomed at the exact moment the government officially shut down.
This is a classic example of the rumor being much more important than the actual news. Additionally, the market is essentially calling the government’s bluff. No one believes the government will stay closed and everyone sees this situation for the performative drama that it is.
A big reason the market has shrugged off the shutdown news is because there is so much momentum across public markets. Steve Deppe writes:
“The S&P 500 ended September on a 5-month winning streak & with a new all-time high monthly close. [This is the] 21st time since 1950. The index has then never closed lower 8 months out. This guarantees nothing, other than mute anyone saying the last 5 months are a sign of impending doom.”
This significant momentum is being driven by AI-related stocks. JPMorgan’s Michael Cembalest explains “AI related stocks have accounted for 75% of S&P 500 returns, 80% of earnings growth and 90% of capital spending growth since ChatGPT launched in November 2022.”
There is no other way to say it — we are living through an AI revolution and public market investors are big winners because of it.
But not everyone is thrilled about the recent developments in the market. Shanaka Perera believes something bigger is happening in the market. He claims “markets ripping higher into a shutdown isn’t strength … it’s proof the S&P 500 no longer trades on fundamentals. Liquidity, passive flows, and option mechanics have replaced cash flow and earnings. This isn’t history being made, it’s price discovery being euthanized.”
Famed investor Leon Cooperman went on CNBC yesterday and he was even more blunt about his reservations. Cooperman literally recited a Buffett quote from 1999, which said:
“Once a bull market gets under way, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks.”
This concern from Leon is rooted in the famous “Buffett Indicator” that measures total market cap of public equities against GDP. This measurement is at an all-time high right now, which has people nervous.
But I think the concern is overblown. Could stocks correct from their current valuations? Sure. But the technology innovation related to artificial intelligence is very real and the impact is likely to play out over the next decade or so. Companies are producing more profits with less employees. New companies are being built at breathtaking speed, including revenue numbers in the first few months that were previously thought impossible.
So this begs the question of what an investor’s timeline is for a given investment. If you are worried about capturing profits in the next few days, weeks, or months, you have a lot more work to do than the investor who is looking to buy great assets and hold them forever.
Speaking of great assets, we have discussed gold’s recent rise at length. It appears large banks are beginning to expand their enthusiasm to bitcoin in addition to the gold propaganda they have been spreading in recent weeks.
This morning VanEck’s Matthew Sigel called out recent commentary from JPMorgan, which compared bitcoin and gold. The bank wrote:
“The steep rise in the gold price over the past month has made bitcoin more attractive to investors relative to gold…the market cap of bitcoin at $2.3 trillion currently would have to rise by close to 42% (implying a theoretical bitcoin price of $165k), to match on a vol-adjusted basis the around $6 trillion of total private sector investment in gold via ETFs or bars and coins... ...This mechanical exercise thus could imply significant upside for bitcoin.”
As my friend PEOperator said, “amazing how they’ve changed their tune.”
Stocks, bitcoin, and gold. They are all doing well in 2025. Each asset has surged higher in response to the US government shut down. And I am willing to bet that each of these three assets will be higher in the coming years.
The doomsday predictors are not only wrong, they are cherry-picking data to tell a story that scares people out of the market. Quite literally, nothing could be more destructive to wealth than selling your financial assets to hold US dollars or treasuries.
Things in motion tend to stay in motion. And financial assets have a lot of momentum right now. If you want to try calling a market top, be my guest. Just make sure you don’t cry later if you get steamrolled.
Have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
How Crypto Technology Can Save America on National Security Stage
Robert Viglione is the Co-Founder & CEO at Horizen Labs and the Founder of zkVerify.
In this conversation we talk about zero-knowledge proofs, why they are critical for U.S. national security, how this technology allows machines to share information without revealing data, Rob’s experience as a military intelligence officer in Afghanistan, how he discovered the value of Bitcoin, and why ZKPs are one of the most underrated technologies shaping the future.
Enjoy!
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