In a year defined by tariffs, geopolitical tensions, and an ever-narrowing stock market dominated by a handful of tech giants, few voices in finance command more attention than Ted Oakley, founder and managing partner of Oxbow Advisors. With more than four decades advising high-net-worth clients, Oakley’s market lens is data-driven, contrarian, and often prescient.
In his latest conversation on Triangle Investor Interviews, hosted by Lucian Valkovich, Oakley delivered a sweeping assessment of markets in late 2025—from valuations and inflation to gold, energy, crypto, and the psychology of investors who have known only bull markets. What emerged is a warning wrapped in wisdom: we’re in rare territory, and few appear prepared for what comes next.
Asked about the biggest red flag keeping him up at night, Oakley didn’t hesitate: valuation extremes.
“We’re two standard deviations higher than the norm… under any metric—price-to-book, price-to-sales, or the CAPE ratio—it’s off the charts. I don’t know that I’ve ever seen it this high.”
The CAPE ratio brushing near 40 is historically ominous territory. Oakley isn’t predicting an imminent crash, but he stresses that extremes unwind, sooner or later:
“When you know you're in an extreme—too low or too high—you know eventually it's going to change. Maybe not next month, but eventually it does.”
For investors lulled into complacency by more than a decade of near-relentless gains, the message is blunt: gravity still exists in markets.
Inflation may be cooling in some headlines, but Oakley maintains skepticism. His broader concern is the structural shift to higher interest rates:
“Rates are generally going to be higher over the next 10 years. Instead of a 2% average, think 3.5% to 4%. There’s not much the Federal Reserve can do about that.”
Higher long-term rates, he warns, change the calculus for bonds:
“People trying to go long on 20- and 30-year bonds—that’s a mistake.”
The “tariff-fueled hard landing” remains a possibility, but Oakley notes pending legal battles and policy rollbacks may alter economic trajectories. Still, structurally higher rates create a ceiling on speculative excess, even if the market hasn’t yet accepted it.
With gold hitting all-time highs in 2025, Oakley offered a nuanced, cycle-aware perspective. His firm trimmed some positions recently, but still holds substantial exposure.
“Gold isn’t a 10-year asset. It has a defined life… when it’s hot, it’s hot. When it’s cold, it’s cold.”
Agnico Eagle – his largest and most trusted producer.
Royalty companies like:
Franco-Nevada
Royal Gold
Wheaton Precious Metals
A speculative exploration play: Southern Cross Gold, which Oakley describes as potentially “the best gold mine in the world eventually,” though not yet producing.
On whether gold could reach $4,800 or $5,000:
“Over the next two or three years, I suspect it goes higher. I don’t know the number, but you’ll make new highs.”
Silver’s recent outperformance caught attention, but Oakley remains measured.
“People say if you get past $50, it takes off. Maybe. We’re at $56–57. Could it go to $90 or $100? I don’t know. We own it. If it gets fully priced, we’ll trim.”
His standout pick?
Hecla Mining—“the best in North America,” he says.
With the S&P 500 more concentrated than ever, Oakley sees parallels to late-stage bull markets. But the real risk is demographics.
“The largest holders are the baby boomers, average age 70. They’ll be selling soon.”
He believes the market could still melt up to 7,000 or 7,500 before reality hits.
Then comes the generational reckoning:
“At some point, everybody is in. There’s nothing left to do but sell… I think you’ll run into another generational bear market.”
And many newer investors won’t recognize it until it's too late.
Oakley’s highest conviction for 2026 isn’t tech. It’s not even gold.
It’s energy, especially oil and gas:
“Energy is the cheapest thing on the board. It’s only 3% of the S&P, down from 30% decades ago.”
At $58 oil, dividends are already strong. But in a future where oil hits $150 or even $200:
“These will be red-hot stocks. You’ll want to own them for a long time.”
Beyond oil, Oakley favors hard commodities with genuine supply scarcity:
Fertilizer
Copper
Iron ore
Industrial metals
“You don’t have enough of that in the world. Everyone is hoarding. If you’re going to expand globally, you need these.”
Soft commodities like sugar, coffee, and soybeans hold no interest for Oxbow’s strategy.
Few mainstream investors critique crypto as sharply as Oakley. His refusal to own Bitcoin is philosophical and practical:
“If you don’t have electricity or internet, you don’t have an asset.”
He predicts massive losses across the broader crypto ecosystem:
“People will lose millions and millions outside of Bitcoin and Ethereum. It will be one of the worst catastrophes ever.”
Criminal activity in stablecoins only heightens his concerns:
“They’ll bust that system somewhere. It’s not what we do. We own breathing companies with cash flow. Bitcoin doesn’t give you that.”
While he’s not rooting against it, he’s emphatic:
“The only way to make money is finding a higher buyer—and that’s not investing.”
Oakley refrains from specific predictions, but he identifies the core issue:
“Nobody trusts anybody. Countries don’t trust each other. People in the same country don’t trust each other.”
Something unexpected is likely in the years ahead, he says—but his focus stays on fundamentals, not headlines.
Drawing on decades in finance and his book Second Generation Wealth, Oakley sees troubling signs among younger traders:
“They think it’s all a video game—day-trading options, crypto, single-day bets.”
His advice:
Start saving real money.
Stop betting the farm.
Learn to read balance sheets and income statements.
Buy real companies, not just indexes or speculation.
Almost every generation learns the hard way, he says—but today’s youth are especially exposed to “mania culture.”
Liquidity, says Oakley, is the ultimate insurance.
Ages 20–40: 15–20% in short-term Treasuries
Ages 65+: 35–40% liquidity
“If you’re 100% in the market during a downturn, you will make irrational decisions. Liquidity lets you sleep, think clearly, and buy when others are panicking.”
Short-term Treasuries, he notes, also avoid state income tax.
As 2025 closes, Oakley sees a world distorted by liquidity, speculation, and complacency. Yet he remains hopeful for disciplined, patient investors willing to look beyond the herd:
Valuations will normalize
Energy is massively undervalued
Hard assets matter
Liquidity is essential
Speculation is not investing
His closing guidance is as simple as it is timeless: Know who you are, how old you are, and what you truly own.
Watch the interview with Ted Oakley.
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