Tea and Crumpets is Formidable Asset Management's biweekly podcast that features Formidable's Managing Partner and CEO, Will Brown, and Chief Investment Officer, Adam Eagleston, CFA, talking directly about current events in relation to their expertise and business in a conversational manner.
After a holiday hiatus, we welcome 2025 with a look at what worked in 2024 and what that may mean for this year. One thing that did not work: forecasts. The Fed cut rates fewer times than predicted, and we discuss the recent pivot toward a more hawkish tone, which is part of the reason for the increase in yields on longer bonds. Those higher yields are stressing consumers and businesses, not to mention grinding mortgage activity to a halt. We look at the implications of higher rates and compare some of the small business stress we are seeing in our community versus the strong jobs data being reported, which is influencing the Fed’s outlook for rate cuts. In the second half, we discuss stock returns in 2024, which were biased upward by a handful of stocks in one (well, two, as defined by the S&P committee) sectors. We compare the level of index concentration, valuation, and performance dispersion versus history and find the clearest parallel with 1998 and 1999. After that period, we saw the following pattern emerge: The average stock beat the index each of the next six years. Value stocks beat growth stocks each of the next seven years. We close with our thoughts on why that could be replicated again, specifically given the implications of likely Trump administration policy on merger and acquisition activity, which is off to a strong start. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
1/15/25 • 34:08
We take a wicked look upward, where both unidentified drones and market valuations reside. We also discuss the upcoming Fed meeting, investor sentiment, and the outlook for corporate margins (and employment) as AI gains greater adoption. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
12/18/24 • 36:19
We discuss the recent mania around levered ETFs and the market mechanics that make these so volatile. We also take our first look at investor response to Trump’s win and what we think some of the over (and under) reactions have been so far, and what the true implications of changes in fiscal and regulatory policy may mean. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
11/27/24 • 35:11
This week, Will and Adam discuss how markets typically respond to the election cycle, and the importance of staying committed to the long-term view when it comes to investing. We also do a deep, some may say submarine, dive on the phenomenon causing some of the extreme weather we are seeing, and compare this type of explosion and its effects to how the explosion of post-Covid stimulus has affected inflation, stocks, and bonds. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
10/28/24 • 37:39
We recap the historically strong year-to-date performance of equities and compare Q3 versus the first half of the year. We also delve into the potential market implications of the upcoming presidential elections as well as the ongoing (and escalating) conflict in the Middle East. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
10/8/24 • 44:27
Special guest Kalee Kreider joins us to discuss the recent presidential debate, its impact on the November election, and all things political. We also explore the impact of broad trends like inflation and AI on the election, the economy, and markets. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
9/17/24 • 68:37
Will and Adam discuss the large downward revision in job creation and analyze its causes and implications. With the Fed meeting in Jackson Hole, they review its current stance on interest rates versus market expectations, as well as the divergent paths the market has historically taken around rate cutting cycles. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
8/27/24 • 33:59
Will and Adam return to provide insight on recent market tumult. We look at the causes (recession concerns, Japanese bank policy) and the effects (sharp decline, quick rebound, spike in volatility). We compare what is normal about today’s environment versus the anomalies that cause us some concern. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
8/12/24 • 41:51
We wish Formidable a happy 11th birthday, though the more eccentric among us may say “get well soon”, instead. Regardless, we look back on our approach to college planning and the merits of trade schools in the era of AI. We also examine AI’s broader implications for inflation, wages, and stocks, both those that area direct beneficiaries (like the Magnificent Seven) and those that have, so far, been left behind from a performance perspective, where we see opportunity. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
7/3/24 • 41:58
Will and Adam review the new Bearcats flavored Grippo chips, and compare them to the Fed’s approach on inflation. We take a look at what the lack of movement in oil prices is telling us about inflation and the economy, and how higher interest rates are (or, more accurately, are not) constricting some measures of financial conditions. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
5/24/24 • 39:56
We discuss the fluid situation in the Middle East, its impact on oil, and, ultimately, its importance as a key stumbling block on the Fed’s path to 2% inflation. The changing expectations regarding Fed rate cuts and how those should (theoretically) affect valuations for stocks are also key topics, as are some of the recent divergences in the historical relationships between things like gold and real rates. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
4/22/24 • 35:02
Will and Adam discuss the potential for broader equity market participation, as well as the strange dynamics affecting the smaller cap indices. We also deconstruct the latest Fed minutes, and what the Fed’s changing stance on inflation may mean for interest rates, stocks, risk, and housing. Finally, we explore whether one can forge their own signature, if plant-based mashed potatoes is redundant, and the merits of Kenny Rogers’ “good food quickly” approach to chicken. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
3/28/24 • 36:10
In episode 66, Will and Adam discuss the Fed’s shifting stance on its inflation target and the implications for consumers and markets. We also examine the diverging fortunes of the Magnificent Seven and compare today’s market conditions with those of the early 2022 peak as well as the 2000 peak. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
3/12/24 • 43:18
We welcome back special guest Kalee Kreider, president of Ridgely Walsh and former communications director for Vice President Al Gore. With November fast approaching, we get her take on the candidates, what states might determine the outcome, and why “double haters” may be the deciding factor. We also evaluate the implications of the outcome in terms of both foreign and domestic policy. Finally, we take a look at a few under-the-radar Supreme Court cases with significant implications for the functioning of the Federal bureaucracy in 2024 and beyond. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
2/20/24 • 52:28
In episode 64, Will and Adam discuss the winnowing of the Magnificent Seven to somewhere between three and four, and the exorbitant valuations on the shrinking number of winners. We also look at the conundrum faced by businesses dealing with pushback from consumers on rising prices while at the same time increasing demands (not to mention government mandates) on wages. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
2/10/24 • 39:10
Will and Adam return from a hiatus with the S&P 500 at an all-time high. They recap what drove returns in 2023 (index flows, zero-day options, the Magnificent Seven) and what expectations are baked into valuations at current levels (above-average earnings growth and six Fed rate cuts). They also juxtapose the divergent growth expectations the low price of oil seems to be indicating in spite of elevated geopolitical tensions. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
1/24/24 • 51:57
We revisit the risks associated with passive investing as the Magnificent Seven stocks become even more unmoored from the rest of the S&P 500. We also analyze the likelihood of the Fed engineering a soft landing, why the market may have celebrated a win on inflation too early, and how we are trying to navigate through this challenging environment. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
11/22/23 • 36:59
We talk about the ongoing shift in labor market dynamics and its implications for inflation going forward, which could be “higher-er for longer-er”. The market’s recent rebound, fueled by hopes of a soft landing and a bounce in the most shorted stocks, is also discussed. We also look at concentration of the index in a handful of stocks and compare recent earnings for some of the tech titans to the rosy projections for next year. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
11/9/23 • 39:59
Will and Adam provide their perspective on the market impact of events in Israel and Gaza, which come at a perilous time from a market perspective with yields reaching psychologically important levels. We also discuss how flows into passive funds have had an outsized impact on the so-called Magnificent Seven stocks and juxtapose their performance (and valuation) versus the rest of the market. Finally, we look at some real-time data on what is happening for economic canaries like shipping and small business. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
10/27/23 • 43:51
In the midst of typical seasonal weakness, we examine the causes for the stock market’s recent volatility, as well as the unprecedented moves in the bond market. We also look at oil’s ability to help the economy to a Goldilocks scenario, how labor unrest is affecting inflation and consumer sentiment, and whether one person can riot. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
10/6/23 • 36:49
After enjoying the festivities, including a fantastic caricature, we delve into the underappreciated risks associated with both zero-day options and put writing, given the launch of a new ETF that combines the two. We examine the market’s recent reaction to CPI data and the potential for inflation to re-accelerate with soaring oil prices and wage pressure from the current UAW strike. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
9/18/23 • 38:44
We parse Fed Chair Powell’s Jackson Hole speech and assess the odds (and timing) of further rate hikes versus a pivot. We also examine the impact on the global economy of China’s weakening property market. We conclude with a look at the recent weakness in U.S. consumer stocks and debate whether expectations for megacap tech earnings are too high in the wake of this week’s market reaction to everyone’s favorite AI stock. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
8/29/23 • 37:59
We return from hiatus with a recap of the happenings in emerging markets, including Chinese property problems and Argentinian elections. We juxtapose the echo boom in tech names with the so-called dot com darlings, and look at how those high-flying companies fared in terms of sales growth (outstanding) and investment returns (dreadful). We close with the odds of and implications for a pivot by the Fed. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
8/15/23 • 39:19
We welcome special guest Kalee Kreider, president of Ridgely Walsh and former communications director for Vice President Al Gore. She offers a unique perspective on the recent debt ceiling resolution, as well as the broader implications of “Bidenomics”. She, Will, and Adam discuss the implications of fiscal policy on the Fed, inflation, and the political landscape for 2024. We close with a conversation on the emerging power of the executive branch, and its supporting bureaucracy, in the wake of a dysfunctional legislative branch, and the role a changing Supreme Court may have. It’s like eight grade civics, only entertaining. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
6/21/23 • 53:32
We discuss the continuing game of chicken being played over the debt ceiling, and why any ultimate resolution to increase the government’s borrowing ability is a negative for bond yields and equities. Also, you cannot have a podcast in 2023 without talking about AI, and we explore its impact on equity market returns so far this year (positive) as well the murkier longer-term impact on things like inflation and unemployment. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
5/25/23 • 37:59
We discuss recent comments by the Fed and bank industry luminaries as it relates to whether the current bank crisis is closer to the beginning or the end. We also delve into the continuing divergence between earnings expectations and interest rate expectations, and why this is the most important problem markets must solve. Finally, we cover the simple math behind inflation and assess our chances of getting back to the Fed’s 2% target in one piece. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
5/12/23 • 36:15
Technology investors keep dancing as the NASDAQ enters a bull market. We compare the performance of the largest names in the index versus the rest and evaluate the reasons why the performance of the average stock has been so lackluster. We also delve into the seemingly irreconcilable difference between the outlook for earnings and interest rates, as well as the ongoing fallout higher rates have caused for the banking industry. We close with our opinion on the market’s relative upside versus downside based on the positioning of both retail investors and institutional quant funds. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
5/1/23 • 43:02
We delve deeply into pun-ditry, as well as a continued post-mortem of Silicon Valley Bank. Will casts doubts over Adam’s ability to be a bond guy (or girl), and they also discuss the Fed’s strong conviction, Wile E. Coyote-style stretching of the economic rubber band and the potential implications of its snap back in the event the Fed is forced to pivot. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
4/11/23 • 40:08
Will and Adam provide an update on the continued fallout in the banking sector, including what it means for consumers and markets. The surprising rebound in technology stocks despite a nascent banking crisis is also analyzed and compared to what we experienced during the financial crisis. We also debate what the opposite of inverted is and why it is important to our outlook for the economy. For even more, click here to read Will’s comments on Silicon Valley Bank in Barron’s. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
3/27/23 • 38:45
We discuss the topic on everyone’s mind, Silicon Valley Bank, and delve into the reasons for its failure and potential consequences. Who’s to blame, who’s not, and what comes next? Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.
3/14/23 • 36:58
