I’ve made my Grande Jeté my large leap of faith.

ALL of my capital is now out of precious metals - gold and silver - and into U.S. 3-Month Treasury Bills. I’ve done it because The Bradshaw Predictor Model has flashed a signal that, historically, I have only seen during some of the most severe economic downturns in modern history. And that signal is with us again.

Blast From The Past

The last three major occasions when my model told me to allocate capital into U.S. 3-Month Treasury Bills were:

1974:

What followed?

U.S. real GDP plunged 4.9%.

The S&P 500 and gold subsequently suffered declines of 50%.

1980:

What followed?

U.S. unemployment surged to 10.8%.

The S&P 500 and gold subsequently fell 30% and 70%, respectively.

2008:

What followed?

An 18-month economic contraction.

The S&P 500 and gold subsequently crashed 60% and 35%, respectively.

Three historical episodes. Three severe economic downturns. And now we seem to be on the cusp again.

Nowhere To Hide

Look at where my valuation models currently put the major asset classes:

• Gold: +0.90 standard deviations above fair value.

• U.S. Real Estate: +0.67 standard deviations above fair value.

• U.S. 10-Year Treasury Bonds: -0.02 standard deviations below fair value.

• S&P 500: +2.40 standard deviations above fair value.

The chart is striking: Nothing is materially undervalued. When I can’t find an asset offering an attractive risk/reward, I would rather wait and be paid risk-free money to wait. That is why I’m willing to lock in 4% on U.S. 3-Month Treasury Bills rather than take unnecessary risks simply because I feel compelled to own something.

And The Macro Backdrop Is Getting Uglier

There are three developments making me increasingly uncomfortable:

1) Japan: Rising Japanese yields are putting pressure on the Yen Carry Trade, potentially encouraging Japanese investors to unwind positions in U.S. assets.

2) U.S. debt: Long-term Treasury yields are rising as concerns over enormous fiscal deficits and debt levels intensify.

3) AI & equities: The U.S. equity market has become extraordinarily concentrated and expensive, leaving little room for disappointing earnings.

Markets don’t necessarily need a catastrophic event to fall. Sometimes they simply need expectations to become slightly less than perfect. When valuations are extreme, a small disappointment can trigger a much larger repricing.

A Simple Plan

I’m waiting for better prices. My capital can sit in short-term U.S. Treasury Bills, generating income, while I wait for valuations to become attractive again. Then, if major asset classes fall far enough, I can redeploy that capital into:

• Commodities.

• Equities.

• Long-term bonds.

• Real estate.

When everyone is excited and valuations are stretched, I get uneasy.

I’d rather earn 4% while I wait for the next opportunity than risk losing 20%, 40% or more, chasing an overvalued asset.

A nod, then, to Diageo and Guinness and the advertising slogan: “Good things come to those who wait.”

And of course the surfer who patiently waits for the right wave….

Silver has been a key focus, along with gold, of my investing strategy over the past four years. And I have written about their merits ad nauseum on Linkedin for the better part of 24 months.

Now, my friends, I wanted to share with you that I am changing tack.

I have just sold ALL my silver.

The Bradshaw Predictor Model has told me my investment in silver is now in jeopardy. After it surged 450% from $22 to $122, then suffered a 55% selloff to $55, I believe we may now have entered a new secular bear market. My model has only flashed this signal four times before in history: 1974, 1980, 2008 and 2010. And the results were devastating for silver.

Extreme Valuation A Warning Sign

In early-2026, my fair value model calculated that silver was 210% overvalued. For context:

• 1983: Peak overvaluation of 130%

• 2011: Peak overvaluation of 181%

Both previous episodes were followed by corrections of 75%. Applying the same 75% decline to silver’s $120 peak would put the price at just: $30.

$29 Is The Number I’m Watching

Today:

• Silver Price: $69

• Fair Value Silver Price: $29

• Premium: $40

Silver is therefore still 138% above my model’s fair value. Back in 2008, silver peaked at just 28% above fair value. What happened next? A 60% correction during the Global Financial Crisis. Apply that same 60% decline to today’s $69 price: $70 → $28.

Why Silver Is Different

Silver isn’t simply a precious metal. It also has extensive industrial applications. But during a severe downturn, industrial demand can weaken alongside investors becoming more defensive. Speculative positions can unwind rapidly.

It is also why I refuse to assume that the 55% decline from $122 to $55 automatically marked the bottom.

I’m Not Chasing A Rebound

Silver recovered from $55 to around $70. That is a 25% rebound.

For me, that is the danger. The market appears increasingly comfortable declaring the correction made. I’m not. For me, this is a classic: “Sell the rip” opportunity.

When I Bought Silver

I bought silver in late-2021 at $23. At the time, my model calculated that silver was 55% undervalued. That was exactly the type of opportunity I look for:

• Cheap valuation.

• Positive momentum.

• And an asset with very little investor enthusiasm behind it.

I have now sold at $69, with my model calculating silver to be 138% overvalued. That produced:

• 200% cumulative returns.

• 26% annualised returns.

• Almost 3x the historical annualised return of a traditional 60/40 portfolio.

The Long And The Short Of It

I still believe silver can ultimately reach $375 later this decade. I simply don’t believe the path there will be straightforward. I think silver first needs a proper flush-out. My current downside range is:

• $28-$32.

If my fair value rises modestly to $36 and silver falls to $28, silver would become 29% undervalued. Following the 1983-86 bear market, silver reached a 49% undervaluation. Following 2008, it reached a 66% undervaluation. That is the opportunity I will bide my time for.

My Mantra

I have no emotional attachment to silver. I bought it low. I held it through the uptrend. And I sold it high.

• $23 → $69.

Backing myself and walking away hasn’t been easy. But with many years invested in painstakingly creating The Bradshaw Predictor Model, I needed to heed the advice it was giving me.

It’s told me to get out and have the chance of buying a significant dip.

I have honoured the first half of that arrangement!

I have just sold ALL my gold. My model has been indicating for some time the risk/reward is shifting. After gold surged 180% from $2,000 to $5,600, then suffered a 30% selloff to $4,000, I believe we may now have entered a new secular bear market. The model has only flashed this signal four times before in history: 1974, 1980, 2008 and 2011. And each time the results were devastating for gold.

The Signal Has Flashed

The rebound to $4,600 has left many investors thinking the worst is over. I’m not convinced. In early-2026, my fair value model calculated that gold was 71% overvalued.

For context:

• 1974: Peak overvaluation of 70%

• 2011: Peak overvaluation of 64%

Both previous episodes were followed by corrections of 45-50%. Applying those historical 45-50% declines to gold’s $5,600 peak opens up the possibility that gold could conceivably fall to $2,800-$3,100.

Why I Sold At $4,600

There is one glaring factor being overlooked by many. Gold is still 50% above The Bradshaw Predictor’s fair value. Today:

• Gold Price: $4,600

• Fair Value Gold Price: $3,060

• Premium: $1,540

That’s comparable to 2008. Gold peaked that year at 25% above fair value. What happened next? A 34% correction during the Global Financial Crisis. Apply the same 34% decline to today’s $4,600 price and you get: $4,600 → $3,000.

This Is Why I’m Not Chasing The Rebound

The rebound to $4,600 has not impacted the underlying signal.

Gold remains substantially above the model’s fair value - while the historical precedents suggest that large corrections can occur, even after a major decline.

Buy Low. Sell High.

I bought gold in late-2021 at $1,800. At the time, my model calculated that gold was 107% UNDERVALUED. I have now sold at $4,600, with my model calculating gold to be 50% OVERVALUED. That produced:

• 156% cumulative returns.

• 21.8% annualised returns.

• 2.5x the historical annualised return of a traditional 60/40 portfolio.

Same Model. Different Signal.

• Back in late-2021, my model was screaming that gold was deeply undervalued, hated by investors….but trending higher.

So I bought.

Today, the picture has completely changed. It’s:

• Overvalued.

• Trending lower.

• Loved by investors.

So I sold.

I listened to my model when it told me to buy. And I listened again when it told me to sell.

“But Surely Recessions Are Good For Gold?”

If that were always true, how do we explain:

• 1974-76: 50% decline

• 1980-82: 66% decline

• 2008: 34% decline

During deep downturns, investors can be forced to sell assets to meet margin requirements, raise liquidity and reduce risk. And when that happens, even “safe havens” like gold become vulnerable.

I Haven’t Turned Bearish On Gold Forever

I still believe gold can ultimately reach $9,000 later this decade. But I don’t believe the path there will be straightforward. I think a flush-out is coming. My current downside range is:

• $2,700-$3,100.

If fair value rises modestly to $3,680 and gold falls to $3,000, gold would become 23% undervalued.

Following the 1974-76 bear market, gold reached a 33% undervaluation.

Following 2008, it reached a 12% undervaluation.

That is the kind of reset I would be looking for before becoming aggressively bullish again.

This Is What Investing Means To Me

There is always a chance my model is wrong this time. But that’s investing. What I know is I have no emotional attachment to gold. It has fulfilled its purpose. I bought it low. I held it through the uptrend. And I sold it high:

• $1,800 → $4,600.

And my model says that after a hiccup, another great opportunity may not be that far away.

Investors are increasingly using leverage to bet on an already record-high stock market.

The Leverage Machine

Since 2020, the S&P 500 has experienced extraordinary gains.

It initially surged close to 120% in the two years following the Covid-19 pandemic, before gaining another 120% after the 2022 bear market.

When markets rise this dramatically for this long, confidence can gradually turn into complacency.

Complacency can encourage risk-taking.

And risk-taking can increasingly turn into leverage.

We can see this clearly in margin debt relative to U.S. money supply.

That measure has now climbed to its highest level in modern financial history - even above the peaks reached before the 2000 and 2007 bear markets, when the S&P 500 ultimately fell roughly 50% and 58% respectively.

But leverage depends heavily on the cost of money…

The Fed Connection

Before both the 2000 and 2007 market collapses, falling interest rates helped create an environment where borrowing became cheaper and investors could take on greater leverage.

Eventually, the cycle turned:

• The Fed raised rates.

• Borrowing costs increased.

• Growth weakened.

• Leverage began to unwind.

This Is Where 2026 Gets Interesting

Since 2024, the Fed has been cutting rates as inflation moved closer towards its 2% target.

But then came 2026.

Inflation surged from 2.4% to 4.2% - more than double the Fed’s target. It has since fallen back towards 3.4%, but remains significantly above 2%.

That creates a potentially dangerous contradiction.

Markets have become accustomed to easier financial conditions, yet persistent inflation could force the Fed to reverse course.

Markets are currently pricing roughly a 50% probability of at least one rate hike by the end of 2026.

But a rate hike alone isn’t necessarily the problem.

The bigger question is whether monetary policy becomes restrictive.

The Chart I’m Watching

That’s why I’m watching:

• U.S. 2-Year Treasury Yield - Fed Funds Rate

I think of this as a simple Fed Policy Stance Indicator.

The 2-year Treasury yield provides a market-based view of where investors expect interest rates to be over the next two years.

Subtract the Fed’s current policy rate, and we get a useful measure of how restrictive policy is relative to those expectations.

Above Zero

• The Fed is below what the bond market expects.

• Policy remains relatively accommodative.

Below Zero

• The Fed is above what the bond market expects.

• Policy is becoming increasingly restrictive.

This mattered before both the 2000 and 2007 market collapses.

The indicator fell sharply before eventually moving below zero:

• Economic growth weakened.

• GDP deteriorated.

• Recession arrived.

And leverage began to unwind.

Where Are We Today?

Today, the indicator remains above zero.

Monetary policy is not yet restrictive enough to seriously threaten the U.S. economy.

Economic growth remains resilient.

And that resilience is allowing today’s enormous leverage to remain sustainable… for now.

So What Would Change Things?

The signal I’d be watching is simple:

Does the Fed policy stance indicator begin moving sharply lower?

If the Fed raises rates while the 2-year Treasury yield remains above the policy rate, the economy may continue absorbing higher borrowing costs.

But if that spread begins collapsing...

And eventually moves below zero...

It would suggest monetary policy is becoming restrictive relative to market expectations and potentially the economy’s ability to absorb tighter financial conditions.

And when that happens alongside:

• Record leverage.

• Record stock prices.

• Extreme margin debt.

...the market setup becomes considerably more dangerous.

Hi everyone,

Welcome to the 48th edition of Beyond the Headlines.

This edition asks a deceptively simple question: What if the AI-driven bull market still has further to run - but the greatest risks are shaping up precisely because investors believe it cannot end?

On the surface, the case for U.S. equities remains compelling. The S&P 500 continues to trade near record highs, enthusiasm surrounding AI remains powerful, and investors continue to price a future of accelerating productivity and extraordinary corporate growth.

But markets have a habit of becoming most dangerous when the story feels most convincing.

Several historical signals are now blinking at once. The current market shares striking similarities with previous speculative episodes, while one particularly unusual momentum signal has appeared only twice before - in 1929 and 1987. At the same time, long-term market cycles suggest that the S&P 500 may still have a way to go before reaching a potentially much more consequential turning point.

That creates a fascinating paradox: the market could still rise but the journey could become more perilous.

In Part I, we examine the remarkable historical signal that has appeared only three times in the history of the S&P 500. Previously seen before two of the greatest market crashes ever recorded, its reappearance in 2026 raises the spectre that today’s AI-fuelled rally could follow the path of 1929 and 1987?

In Part II, our perspective changes and we ask what happens if the market does not crash immediately. Long-term inflation-adjusted market cycles suggest the S&P 500 could potentially climb to 8,863 points - another 16% above current levels. But rather than viewing that as purely bullish, we examine whether such a move could represent the death throes of the current secular bull market rather than the beginning of a new one.

Finally, in Part III, we turn away from Wall Street and towards an asset where investor sentiment has changed dramatically: Gold. After surging to $5,600 and subsequently suffering a correction of as much as 30%, the narrative has shifted from near-universal optimism to growing scepticism. Yet periods of declining enthusiasm can sometimes create the most interesting opportunities. We examine whether gold’s long-term technical structure could ultimately point towards $9,250 by 2028.

Across all three stories, a common theme emerges: Markets are driven not only by fundamentals, but by expectations, psychology and the stories investors tell themselves about the future.

The AI revolution may genuinely transform the global economy. The S&P 500 may still have another 16% upside. And gold may still have a long-term bull market ahead of it. None of these possibilities are mutually exclusive.

The challenge for investors is recognising that a great technology can exist inside a great bubble, a rising market can become increasingly fragile, and a falling asset can become increasingly attractive.

As always, this edition is not about claiming to know exactly what happens next. It is about examining the historical evidence, identifying the signals that deserve attention and asking whether today’s market is really as different as investors believe.

Thank you for reading. If you find this analysis valuable, please share it, leave a comment, and subscribe for future editions.

Sincerely,
Tom Bradshaw

PART I:

THE S&P 500’s EDGE OF TOMORROW?

A Market Signal Seen Before Two Of History’s Greatest Crashes

One of the most consequential historical market signals has now appeared for only the third time in history - previously in 1929 and 1987, and now again in 2026.

It suggests the AI-fuelled rally could come to an abrupt halt, with the S&P 500 potentially crashing 18% over the next month before falling as much as 32% over the next 2.5 years.

The Signal

Back in May, the S&P 500 triggered a signal that has occurred only twice before.

The index gained more than 16% for two consecutive calendar months while simultaneously reaching fresh all-time highs.

The only previous occurrences were:

• July 1929

• February 1987

And what followed just 3-8 months later?

• Black Tuesday (October 1929) → The S&P 500 fell 22% in just two trading days.

• Black Monday (October 1987) → The S&P 500 plunged 20% in a single session.

The Danger Is The Psychology Behind The Rally

Markets can remain irrational for longer than investors expect. But this signal stands out because it combines three powerful ingredients:

• Extreme momentum.

• Record highs.

• Maximum investor confidence.

That combination can become dangerous. Investors stop asking: “Is this stock cheap?” And start asking: “Can I still get in before it goes higher?”

An S&P 500 Historical Analogue…

Rebasing the market to 7,580 points - the level at which the signal triggered in May 2026 - I compared the S&P 500’s subsequent three-year path against:

• The 1929-32 path.

• The 1987-89 path.

• The average of both.

• The current 2026 path.

Almost three months after the signal triggered, the S&P 500 has risen another 1% and now sits at 7,641 points.

Remarkably, this is almost perfectly in line with the historical average of 7,719 points.

If the index continues to follow that historical average, the model suggests the S&P 500 could plunge 18% over the next month, taking it from 7,641 to 6,301 points.

And that could only be the beginning...

A Possible Roadmap Beyond September

September 2026-January 2027: The Bounce That Fails

The model suggests a powerful rebound of 19%, taking the S&P 500 from 6,301 back to 7,488 points. But, critically, the recovery would fail to reclaim the previous high of 7,799 points. Even a strong “Santa rally” would only retrace around 78.6% of the August-September decline - a classic Fibonacci retracement level.

January 2027-March 2029: The Long Decline

The model then points towards a grinding bear market characterised by lower highs, lower lows and eroding investor confidence. The potential endpoint? The S&P 500 falling to 5,161 points by March 2029. From today’s level of 7,641 points, that would represent a 32% decline. Painful? Absolutely. But the valuation picture makes the setup even more concerning…

2026 Is Looking More Like 1929

Momentum-wise, 2026 resembles both 1929 and 1987. But valuations tell a different story. The Buffett Indicator - once described by Warren Buffett as “the best single measure of where valuations stand” - shows:

• July 1929: S&P 500 was 176% above its historical average.

• February 1987: S&P 500 was 38% below its historical average.

• Today: S&P 500 is 144% above its historical average.

The comparison is uncomfortable. From a valuation perspective, today’s market looks far closer to 1929 than 1987.

The Biggest Risk?

The 5,161 point S&P 500 target by March 2029 may not be a base-case scenario.

It could actually prove to be an optimistic outcome.

Historically, periods of extreme valuations have often been haunted by the spectre of significant drawdowns.

Might we be on the Edge of Tomorrow?

PART II:

2026: THE LAST HURRAH OF THE AI BUBBLE?

8,863 Points: The AI Bubble’s Final Target?

In Part I, we examined an historical signal that has appeared only twice before - in 1929 and 1987. Its reappearance in 2026 raises an uncomfortable question: Could the current AI-driven rally eventually suffer a similar reversal? In Part II, we take a longer-term view and ask whether the market could actually have further to run, with historical cycles suggesting the S&P 500 could potentially reach 8,863 points before the current secular cycle reaches its top.

The AI Bull Market’s Final 16%?

The AI revolution has become one of the defining investment narratives of the 2020’s. Governments are running substantial fiscal deficits, central banks remain under pressure to support liquidity, and investors continue to price extraordinary growth into AI-driven companies. The result has been a powerful combination of optimism, liquidity and technological euphoria that has pushed U.S. equities to record highs.

But there is a question investors should absolutely be asking: What if we are much closer to the death of the AI-driven bull market than the birth?

That does not necessarily mean the S&P 500 has reached its ultimate peak. In fact, a long-term analysis of inflation-adjusted S&P 500 cycles suggests the index could potentially rally another 16% before the current secular cycle reaches its conclusion. And then?

The S&P 500 Could Rally Another 16%

The S&P 500 is currently trading at 7,641 points. A long-term comparison with previous secular market cycles suggests the index could potentially advance to 8,863 points. That would represent 1,222 points of additional upside, or 16% from current levels.

On the surface, that may appear strongly bullish. But the reality is that the historical significance of the target is more important than the size of any potential gain. The same broad long-term structure appeared during the secular cycles that preceded both the Nifty Fifty and Dot Com bubbles. To understand why that matters, it is necessary to look at the market in inflation-adjusted terms.

Two Secular “Cups”

The inflation-adjusted S&P 500 reveals two remarkable long-term cup-shaped structures. The first developed following the Nifty Fifty era. The second followed the collapse of the Dot Com bubble. In both cases, the market experienced a prolonged decline, established a major low, recovered towards its previous high and subsequently broke into new territory. The magnitude of those recoveries provides the historical comparison for today’s market.

1. The Nifty Fifty Cycle

The first major cycle began with the market peak in 1968, when the inflation-adjusted S&P 500 reached 1,029 points. The index then entered a prolonged secular bear market, eventually falling to 349 points in 1982. From that trough, the market embarked on a historic recovery. The advance from the 1982 low back to the previous 1968 peak amounted to 195%.

Assuming the same magnitude of appreciation was subsequently projected from the breakout, the resulting target was 3,036 points. The actual peak of the Dot Com bubble in 2000 was 3,046 points.

What followed, of course, was a prolonged decline. Between 2000-09, the S&P 500 suffered a 66% loss in real terms. More importantly, investors who bought around the peak faced a lengthy period before recovering any purchasing power.

2. The Dot Com Cycle

The second cycle followed a remarkably similar pattern. The inflation-adjusted S&P 500 peaked at 3,046 points in 2000 before falling to 1,046 points in 2009. From that trough, the subsequent recovery once again produced an enormous advance. The move from the 2009 low back to the previous 2000 peak represented 191% - strikingly similar to the 195% advance observed during the previous cycle.

If the current market repeats follows a pattern of the 2009 trough to its subsequent breakout, the implied target, today, would be 8,863 points. And at the current rate, that level could potentially be reached by the end of 2026.

The Real Risk Is Not The Next 16%

This is where the thesis becomes more interesting. A move from 7,641 to 8,863 points would undoubtedly feel spectacular. It would provide further ammunition for the bulls and strengthen the argument that AI, technological innovation, fiscal stimulus and monetary liquidity can continue driving equity valuations higher.

But another 16% of upside should not automatically be interpreted as evidence that a new multi-decade bull market is starting. It could instead represent the final stage of the current secular cycle. That distinction matters enormously.

If 8,863 points ultimately proves to be a major secular peak, investors who chase the final leg higher could potentially capture a relatively modest gain before entering a market environment characterised by years of weak or negative real returns. The danger, therefore, is not necessarily the next correction. It is the possibility of confusing the final phase of a bull market with the start of the next.

The Cost of Buying At The Top

The historical narrative offers us an important reminder. Investors who bought around the 1968 Nifty Fifty peak had to wait 26 years to regain their purchasing power in real terms. Those who bought around the 2000 Dot Com peak faced 16 years before achieving a comparable real recovery.

If an AI-driven market peak were to occur during 2026 and we average out the length of the two previous episodes of no gains, an investor aggressively buying at the top today could theoretically face a 21-year recovery period extending to 2047.

That is obviously not a forecast. The economic environment of the next 20 years will almost certainly not resemble the past. AI could generate productivity gains on a scale that fundamentally transforms corporate profitability. Monetary and fiscal policy could produce a completely different market outcome. And technological revolutions could create enormous economic value. Nevertheless, the historical precedent is worthy of consideration.

The Final Stages Of A Bubble

Could the S&P 500 continue higher? Absolutely. Could the AI boom become even larger? Certainly. Could the index reach 8,863 points? Yes. The argument is therefore not that investors should automatically sell everything today. It is that investors should distinguish between participating in the final stages of a bull run and assuming this final stage will continue indefinitely. That distinction becomes particularly important when valuations, expectations and narratives begin reinforcing one another.

The final stage of a major bubble can feel extraordinarily comfortable. Technology appears transformative. Earnings forecasts seem certain. The economic narrative becomes increasingly compelling. And every additional surge up provides investors with the evidence that any concerns are misplaced. That is precisely what makes a final phase so dangerous.

To summarise: the S&P 500 could still deliver another spectacular rally from here. It could potentially reach 8,863 points. But the more important question may not be whether investors can capture that final move. It may be whether they understand what they are potentially buying into when they do. Is chasing a 16% upside worth the risk when considered against the backdrop of a potential downside that could involve 21 years of misery?

PART III:

THE CROWD HAS GIVEN UP ON GOLD. THAT’S WHY I’M BULLISH!

Following A 30% Correction, Historic Cup-And-Handle Patterns Point Towards A Potential Move To $9,250 By 2028

In Parts I and II, we explored both sides of the current equity-market paradox: the historical evidence warning of a potentially significant decline, and the possibility that the S&P 500 can still deliver another 16% of upside before that risk materialises. The obvious question now becomes: If the AI-driven bull market is entering its later stages, where might investors find opportunity instead? In Part III, we turn to gold and examine why its recent 30% correction may be creating a more attractive long-term risk/reward profile - with historical cup-and-handle patterns pointing towards a potential $9,250 target by 2028.

Wrong Before Being Right

Back in January, I believed gold was overextended and likely to consolidate in 2026.

My expectation was for it to move up marginally from $4,300 to $4,500.

I even said on The Daniela Cambone Show on 7^th January (when gold was already trading at $4,500) that the market looked stretched and a correction was likely.

Many disagreed.

Then something happened…

Gold Continued Soaring

Gold didn’t correct. Instead, it surged another 24% in 3 weeks from $4,500 to $5,600.

The bullish calls became louder and the excitement almost reached fever pitch.

But I continued to believe gold was overheating.

Because my fair value models were screaming that gold was 74% overvalued.

For context:

• In 2011, gold was 58% overvalued and then fell 45% over 4 years.

• In 1974, gold was 89% overvalued and then fell 50% over 2 years.

I was simply highlighting that gold had reached valuation extremes historically associated with major pullbacks.

Then History Repeated

Gold peaked on 29^th January at $5,600.

Since then?

A correction of as much as 30% over 5 months.

Suddenly, the narrative changed from: “Gold can only go higher” to “Gold is finished”.

But this is where investors often make their biggest mistakes.

They become: Too optimistic when prices are high and too pessimistic when prices fall.

The Lesson I’ve Learned

The more crowded a trade becomes…

The less upside usually remains and the more downside risk increases.

That was gold in January.

Today?

Far fewer people are excited.

And that changes the risk/reward equation.

The Bigger Picture

While many are frustrated with gold today, I’m focused on the long-term trend.

Historically significant cup-and-handle patterns have pointed towards a potential long-term destination of:

$9,250 gold by 2028.

Why?

Gold has previously formed major cup-and-handle patterns:

• 1969-71

• 1974-78

• 1996-2005

The subsequent moves?

• +345%

• +346%

• +347%

The current pattern formed between:

2011-24.

Using the historical average move of 346% from the $2,070 pivot high gives a target of:

$9,250.

Why 2028?

The previous breakouts took:

• 3 years (1969-71 pattern)

• 2 years (1974-78 pattern)

• 6 years (1996-2005 pattern)

Interestingly, the first major pattern of the 1970s supercycle took 50% longer than the second.

Applying that same logic to the 2000s supercycle:

A 4-year resolution from the 2024 breakout points towards…

2028.

The Truth About Investing

It was easy to be bullish on gold in January.

It’s harder today.

But that’s exactly when decisions matter.

Gold has already delivered 142% gains over 3 years - a 34% annualised return.

For context, since 1970 a traditional 60/40 portfolio has offered a 9% annualised return.

Final Thought

A 30% correction doesn’t mean the bull market is over.

Often, corrections are exactly what allow bull markets to continue.

Back in January, the gold trade was crowded.

Today, sentiment is far more balanced.

RISK DISCLAIMER

Past Performance - Future Performance

• No Guarantees: Past performance is not an indicator of future results. Exercise caution when evaluating performance as all financial products are influenced by market forces and unforeseen events that may impact future outcomes.

• Future Projections: Future performance predictions are not guarantees of past or current performance. Assess future claims cautiously, as they rely on assumptions. Like all financial products, this product is subject to market forces and unpredictable events that may affect future performance.

General Advice

• Educational Purposes: The information in this report is for educational purposes only. Any advice provided is general and does not consider your personal objectives, financial situation, or needs. You should evaluate the appropriateness of the advice in light of your own circumstances before acting on it.

Investment Decisions

• Risk Awareness: Investment decisions, including buying, selling, holding, or trading securities and other investments, carry risk and should be made with the guidance of qualified financial professionals. Trading, especially day trading, involves substantial risks and can result in significant losses. Consult a qualified financial professional before starting any trading program to determine if it is suitable for your financial situation and risk tolerance.

It suggests the AI-fuelled rally could come to a sudden end, with the S&P 500 potentially crashing 18% over the next month before falling as much as 33% over the next 2.5 years.

The Signal

Back in May, the S&P 500 triggered a signal that has occurred only twice before.

The index gained more than 16% for two consecutive calendar months while simultaneously reaching fresh all-time highs.

The only previous occurrences were:

• July 1929

• February 1987

And what followed just 3-8 months later?

• Black Tuesday (October 1929) → The S&P 500 fell 22% in just two trading days.

• Black Monday (October 1987) → The S&P 500 plunged 20% in a single session.

The Danger Is The Psychology Behind The Rally

Markets can remain irrational for longer than investors expect. But this signal stands out because it combines three powerful ingredients:

• Extreme momentum.

• Record highs.

• Maximum investor confidence.

That combination can become dangerous. Investors stop asking: “Is this stock cheap?” And start asking: “Can I still get in before it goes higher?”

An S&P 500 Historical Analogue…

Rebasing the market to 7,580 points - the level at which the signal triggered in May 2026 - I compared the S&P 500’s subsequent three-year path against:

• The 1929-32 path.

• The 1987-89 path.

• The average of both.

• The current 2026 path.

Almost three months after the signal triggered, the S&P 500 has risen another 1% and now sits at 7,692 points.

Remarkably, this is almost perfectly in line with the historical average of 7,719 points.

If the index continues to follow that historical average, the model suggests the S&P 500 could plunge 18% over the next month, taking it from 7,692 to 6,301 points.

And that could only be the beginning...

A Possible Roadmap Beyond September

September 2026-January 2027: The Bounce That Fails

The model suggests a powerful rebound of 19%, taking the S&P 500 from 6,301 back to 7,488 points. But, critically, the recovery would fail to reclaim the previous high of 7,799. Even a strong “Santa rally” would only retrace around 78.6% of the August-September decline - a classic Fibonacci retracement level.

January 2027-March 2029: The Long Decline

The model then points towards a grinding bear market characterised by lower highs, lower lows and eroding investor confidence. The potential endpoint? The S&P 500 falling to 5,161 points by March 2029. From today’s level of 7,692 points, that would represent a 33% decline. Painful? Absolutely. But the valuation picture makes the setup even more concerning…

2026 Is Looking More Like 1929

Momentum-wise, 2026 resembles both 1929 and 1987. But valuations tell a different story. The Buffett Indicator - once described by Warren Buffett as “the best single measure of where valuations stand” - shows:

• July 1929: S&P 500 was 176% above its historical average.

• February 1987: S&P 500 was 38% below its historical average.

• Today: S&P 500 is 144% above its historical average.

The comparison is uncomfortable. From a valuation perspective, today’s market looks far closer to 1929 than 1987.

The Biggest Risk?

The 5,161 point S&P 500 target by March 2029 may not be a base-case scenario.

It could actually prove to be an optimistic outcome.

Historically, periods of extreme valuations have often been haunted by the spectre of significant drawdowns.

Might we be on the Edge of Tomorrow?

My expectation was for it to move up marginally from $4,300 to $4,500.

I even said on The Daniela Cambone Show on 7^th January (when gold was already trading at $4,500) that the market looked stretched and a correction was likely.

Many disagreed.

Then something happened…

Gold Continued Soaring

Gold didn’t correct. Instead, it surged another 24% in 3 weeks from $4,500 to $5,600.

The bullish calls became louder and the excitement almost reached fever pitch.

But I continued to believe gold was overheating.

Because my fair value models were screaming that gold was 74% overvalued.

For context:

• In 2011, gold was 58% overvalued and then fell 45% over 4 years.

• In 1974, gold was 89% overvalued and then fell 50% over 2 years.

I was simply highlighting that gold had reached valuation extremes historically associated with major pullbacks.

Then History Repeated

Gold peaked on 29^th January at $5,600.

Since then?

A correction of as much as 30% over 5 months.

Suddenly, the narrative changed from: “Gold can only go higher” to “Gold is finished”.

But this is where investors often make their biggest mistakes.

They become: Too optimistic when prices are high and too pessimistic when prices fall.

The Lesson I’ve Learned

The more crowded a trade becomes…

The less upside usually remains and the more downside risk increases.

That was gold in January.

Today?

Far fewer people are excited.

And that changes the risk/reward equation.

The Bigger Picture

While many are frustrated with gold today, I’m focused on the long-term trend.

Historically significant cup-and-handle patterns have pointed towards a potential long-term destination of:

$9,250 gold by 2028.

Why?

Gold has previously formed major cup-and-handle patterns:

• 1969-71

• 1974-78

• 1996-05

The subsequent moves?

• +345%

• +346%

• +347%

The current pattern formed between:

2011-24.

Using the historical average move of 346% from the $2,070 pivot high gives a target of:

$9,250.

Why 2028?

The previous breakouts took:

• 3 years (1969-71 pattern)

• 2 years (1974-78 pattern)

• 6 years (1996-05 pattern)

Interestingly, the first major pattern of the 1970s supercycle took 50% longer than the second.

Applying that same logic to the 2000s supercycle:

A 4-year resolution from the 2024 breakout points towards…

2028.

The Truth About Investing

It was easy to be bullish gold in January.

It’s harder today.

But that’s exactly when decisions matter.

Gold has already delivered 130% gains over 3 years - a 32% annualised return.

For context, since 1970 a traditional 60/40 portfolio has offered a 9% annualised return.

Final Thought

A 30% correction doesn’t mean the bull market is over.

Often, corrections are exactly what allow bull markets to continue.

Back in January, the gold trade was crowded.

Today, sentiment is far more balanced.

• “This time it’s different.”

A generation ago, investors said it about the internet. Today, they say it about AI.

• “AI is different.”

• “Tech is the future.”

• “It will transform how we live and work.”

And perhaps it will. But when I look at the charts, I don’t just see innovation. I see a haunting echo from the past.

An Ominous Historical Resonance

The correlation between the 1995-1999 Dot-Com boom and the 2022-present AI boom is astonishing. The S&P 500 has followed its previous cycle with an uncanny 98% tie-in.

Different technologies, different companies, a different generation of investors.

Yet an astonishingly similar trajectory.

If historical precedent continues to recur with historical rigour, the S&P 500 could peak at 7,800 points during October (close to current levels) before suffering a roughly 42% decline, targeting around 4,500 points by May 2029.

Which raises an uncomfortable question: Was the recent high of 7,750 points in early-August more consequential than many investors realise?

Consolidation… Or Distribution?

Markets may continue oscillating between 7,000 and 7,800 points over the next four months. Many investors would view that as healthy after the market’s remarkable 20% surge between late-March and early-June.

But what if this isn’t consolidation? What if it’s distribution?

A period when optimism remains elevated…yet smart money quietly sells into strength. Because that is precisely what appeared to be unfolding in late-1999. Everything looked tranquil. Until suddenly it wasn’t.

If this comparison sounds extreme, it is worth examining the underlying fundamentals between the 1990s Dot Com boom and today’s AI boom…

The 1990s Dot Com Boom

Extreme Valuations

• The S&P 500 CAPE ratio reached 44.2, around 175% above its historic median of 16.1.

Retail Mania

• Many IPOs were 50x oversubscribed.

Venture Capital Surge

• Venture capital investment rose 400% over five years.

Market Concentration Risk

• Internet-related stocks represented roughly 41% of the U.S. equity market.

The Crash

• The S&P 500 eventually fell roughly 50%, and investors waited 17 years for new inflation-adjusted highs.

The 2020s AI Boom

Extreme Valuations

• The S&P 500 CAPE ratio sits at 42.2 - only slightly below the Dot-Com peak of 44.2 and approximately 162% above the long-term median of 16.1.

Retail Mania

• AI-related investments have been heavily oversubscribed as capital floods into chips, data centres, automation and software.

Venture Capital Surge

• AI startups have attracted more than $100 billion annually into global venture capital funding.

Unbounded Expectations

• Forecasts place the AI opportunity at $1 trillion+.

Market Concentration Risk

• AI-linked equities now account for roughly 40% of the U.S. equity market.

The Verdict

The parallels between 1999 and 2026 are becoming increasingly difficult to dismiss.

Could the S&P 500 already be close to a cycle peak? Absolutely.

Could historical precedent once again reassert itself with a roughly 42% decline over the years that follow? Also, yes.

Perhaps this time really is different. Perhaps AI will justify everything.

But markets have heard those words before. And the most perilous episodes in financial history often emerge when investors become convinced that the lessons of the past have become obsolete.

Hi everyone,

Welcome to the 47th edition of Beyond the Headlines.

Over the past few weeks, one question has increasingly occupied my thinking: Are we approaching the final stages of one of the greatest equity bull markets in modern history?

At first glance, the answer appears obvious. AI continues transforming industries, corporate earnings remain robust, and investor enthusiasm shows little sign of fading. Wall Street continues to celebrate innovation, record-breaking IPO’s, and rocketing equity prices.

Yet periods of extraordinary technological progress have often coincided with off-the-chart speculation.

The arrival of electricity during the 1920s, the “Nifty Fifty” boom of the early-1970s and the internet revolution of the late-1990s each transformed the global economy. But they also fuelled some of the largest market bubbles ever recorded. The technologies ultimately changed the world. The valuations did not survive.

This edition examines whether today’s AI-driven bull market is beginning to exhibit similar characteristics.

In Part I, we begin with one of the most significant financial events in history: the record-breaking SpaceX IPO. Looking back over nearly a century and an intriguing pattern is revealed. Many of the largest and most celebrated public offerings have arrived during periods when valuations were already stretched and investor optimism had passed a point of no return.

In Part II, we move beyond IPOs and examine the forces that continue to power today’s AI-led market. Using a simple “fuel gauge” framework, we explore whether investors still possess enough liquidity to sustain the rally, or whether diminishing cash reserves are steadily increasing the market’s vulnerability.

Finally, in Part III, we consider where investors might position themselves if equity valuations eventually snap back to somewhere approaching where they should be. While many commentators argue that gold’s January peak marked the end of its secular bull market, a closer examination of the Gold-to-S&P 500 ratio suggests something very different.

Although each article focuses on a different market, they all explore the same underlying concept: Markets are driven not only by innovation, but also by valuation, liquidity and investor psychology.

Technological revolutions can justify enormous economic progress while simultaneously producing speculative excess. Understanding where we sit within that cycle may prove invaluable.

As always, this newsletter aims to provide historical perspective, quantitative analysis and a framework for thinking about risk in markets that continue to be dominated by optimism surrounding AI.

Thank you, as always, for reading… And if you find this analysis useful, please consider sharing it, leaving a comment, and subscribing for future editions.

Sincerely,

Tom Bradshaw

PART I:

LOST IN SPACEX?

Three IPO Cycles. Three Peaks. One Recurring Market Pattern

Two months ago, SpaceX launched the largest IPO in history - and Wall Street has been celebrating.

But one question worth asking is:

Are we witnessing genuine innovation… or a euphoric market’s end-game?

As always, history offers an intriguing perspective.

Some of the largest IPO events have arrived at moments when optimism, speculation, and valuations were already stretched to extremes.

And each time, the market paid the price.

1928: The “Roaring Twenties” Bubble

In December 1928, the Goldman Sachs Trading Corporation was launched. A record number of shares were sold to the public during one of the greatest stock market booms in history.

Between 1927-29, the S&P 500 surged 90%.

Investor optimism reached stratospheric levels, while valuations became severely stretched, with the S&P 500-to-U.S. GDP ratio climbing to 28% - 180% above its long-term median of 10%.

Then came the turning point…

Black Tuesday.

The S&P 500 fell 22% in just two trading days. The Great Depression followed, and between 1929-32 the index collapsed by 86%.

Investors then had to wait 26 years before inflation-adjusted highs were finally exceeded in 1955.

1971: The “Nifty Fifty” Bubble

In October 1971, Intel went public.

Once again, IPO enthusiasm was widespread and investor confidence exceptionally strong.

Between 1971-73, the S&P 500 advanced 80%, while the S&P 500-to-GDP ratio reached 13% - 30% above its historical median.

Then the market turned…

Between 1973-75, the S&P 500 declined by 50%.

Investors waited 18 years before inflation-adjusted highs were regained.

2000: The Dot-Com Bubble

In April 2000, AT&T launched its IPO.

Once again, optimism and speculation reached extreme levels.

Between 1998-2000, the S&P 500 rose 70%, while the S&P 500-to-GDP ratio climbed to 16% - 60% above its long-term median.

Five months later, the market peaked…

The Dot-Com crash followed.

Between 2000-02, stocks fell 50%, and investors waited 16 years for inflation-adjusted highs to return.

2026: The AI Bubble?

SpaceX recently launched the largest IPO in history.

And it has taken place when AI enthusiasm is at fever pitch.

The S&P 500 has already risen 60% over the past two years.

Meanwhile, valuations remain exceptionally elevated, with the S&P 500-to-U.S. GDP ratio standing at 25% - 150% above its historical median.

The Historical Pattern

Looking back at the three IPO episodes that preceded major market peaks, two characteristics stand out:

1. Valuations were elevated.

2. Market momentum was exceptionally strong.

It’s well worth noting that every previous peak occurred when:

• The S&P 500-to-GDP ratio stood at least 30% above historical norms.

• The S&P 500 had already risen 60% or more during the preceding two years.

The Big Question

If parallels with the past reemerge, are we looking down the barrel at another major correction?

Looking back at the three major post-IPO market peaks examined above, the S&P 500 subsequently declined by an average of 60%, with the downturn unfolding over two years.

Applied to today, that would imply the S&P 500 could fall from 7,500 to 3,000 points between 2026-28.

But perhaps the bigger concern is this:

Following those three previous post-IPO peaks, investors had to wait an average of 20 years before inflation-adjusted highs were recovered.

If the pattern were to repeat again, the hard truth is that S&P 500 might not surpass its current inflation-adjusted peak until 2046.

We all have a grasp of risk and reward. So we should also be well aware that with the potential for higher returns comes a higher probability of loss.

PART II:

THE AI BOOM MAY NOW BE RUNNING ON FUMES

The Gauge Is In The Red

In Part I, we examined an intriguing historical pattern. While a record-breaking IPO does not guarantee a market peak, it raises an important question: what continues to fuel today’s AI-driven bull market? One possible answer lies in liquidity. In Part II, we examine whether liquidity is beginning to run on reserve.

The Hidden Fuel Behind Every Bull Market

For years, the S&P 500 has been a car travelling faster and faster. The road has been smooth. Confidence has grown. Every time the fuel level diminished, investors may have made a pit-stop – but it was short and sweet.

But now, the needle is well into the red zone.

The question investors asked during the 1990s Dot Com boom, the 1970s Nifty Fifty era, and the 1920s technology bubble was always the same:

“How much further can this go before the tank runs dry?”

Every boom feels unstoppable - until the gas runs low.

Well - there is a way to measure how much remains.

The Fuel Gauge: Investor Dry Powder

Money market assets relative to the size of the U.S. equity market act as a proxy for investor reserves.

When reserves are high:

• Investors have cash to deploy.

• Dips attract fresh buyers.

• Markets can absorb shocks.

When reserves fall:

• Buying power declines.

• Fewer investors remain on the sidelines.

• The market becomes more fragile.

Today, the reserve tanks warning just pinged.

The Reserve Warning

Money market assets relative to the S&P 500:

• Current: 1,147x

• Historical average: 1,623x

Investors have 30% less fuel than normal in the tank.

Historically, readings below 1,200x have preceded major bear markets within 12 months. Previous signals:

• 1997 → S&P 500 fell 22% over 3 months

• 1999 → S&P 500 fell 50% over 30 months

• 2017 → S&P 500 fell 20% over 3 months

• 2021 → S&P 500 fell 28% over 9 months

What About AI?

A car does not stop the moment the warning light appears.

It can keep going.

But fuel matters. In markets, fuel is valuation.

Are We On The Reserve Tank?

S&P 500-to-U.S. GDP ratio:

• Current: 25x

• Historical median: 10x

Valuations are 150% above historical norms.

Comparable periods:

• 1997: 11x

• 1999: 15x

• 2017: 14x

• 2021: 20x

Only 1999 and 2021 came close. Both ended with major declines.

The Road Ahead

Warning signs do not mean the market drops immediately. Historically, markets continued higher for 12 months after similar signals:

• 1997-98: +35%

• 1999-2000: +21%

• 2017-18: +10%

• 2021-22: +20%

• Average: +22%

It’s possible the S&P 500 has 22% further upside over the next 12 months before it hits a major peak of 9,000 points.

Will The Fuel Run Out?

Driving faster eats up fuel at a greater rate.

Running out in the fast lane could have serious consequences.

If valuations mean revert, and we see similar declines to 1999 and 2021 - history suggests the S&P 500 could later fall 39% from 9,000 points in mid-2027 to 5,500 points by early-2029.

My Takeaway

Every bubble eventually brings with it the arrogant assertation: “This time is different.”

Sometimes it is.

AI may reshape the world. The technology may justify extraordinary investment.

But every journey follows one rule: The faster you drive, the more fuel you burn.

The AI boom may not be over. The car may still have a way to go.

But the question is not “can this go further?”

It’s rather: “How far can it go now the gauge has touched the reserve?”

Because eventually the fuel runs out and slipping into the pits is no longer an option.

PART III:

WHY THE GOLD RUSH IS NOT OVER!

Gold-to-S&P 500 Ratio Signals The Gold Bull Market May Be Far From Over

In Parts I and II, we explored two characteristics often associated with the later stages of major bull markets. The obvious question now becomes: if equity valuations eventually begin to contract, where might investors find the next opportunity? In Part III, we examine why gold’s recent correction may not mark the end of its bull market.

A Familiar Pattern… Or A False Signal?

Gold has pulled back from its January 2026 peak near $5,600, prompting a growing number of analysts to argue that the precious metal has already formed a major long-term top. This assessment is understandable. The recent high coincided with a significant resistance line on the long-term Gold-to-S&P 500 ratio chart - one that also capped the major peaks in January 1980 and September 2011.

Both of those episodes were followed by prolonged periods of underperformance for gold relative to equities. After the 1980 peak, gold declined 72% over the next 19 years. Following the 2011 high, the metal fell 45% during the subsequent five years.

On the surface, the similarities may appear compelling. But focusing solely on the price of gold ignores a crucial ingredient in the equation. The Gold-to-S&P 500 ratio is exactly that - a relative valuation measure. Understanding where the ratio may head next requires analysing both sides of the trade rather than gold in isolation.

Looking Beyond Gold

The major difference between today’s market and previous cycle peaks lies not in gold itself, but in the valuation of the U.S. equity market. At the January 1980 gold peak, my long-term valuation model suggested gold was trading 6.6 standard deviations ABOVE fair value, while the S&P 500 was 1.5 standard deviations BELOW fair value. In other words, investors were rotating out of one of the most overvalued assets in history into one of the cheapest. That relative valuation gap proved decisive. Over the following two decades, the Gold-to-S&P 500 ratio collapsed by 98%, driven not only by weaker gold prices but also by one of the strongest equity bull markets on record.

A similar story unfolded in 2011. When gold reached its all-time high in September 2011, it was 1 standard deviation ABOVE fair value, while the S&P 500 remained 0.1 standard deviations BELOW fair value. Although the gap was far smaller than in 1980, equities were still cheaper than gold. Once again, capital gradually rotated back into stocks, causing the Gold-to-S&P 500 ratio to fall 78% over the following decade.

Why 2026 Is Different

Today’s market presents a completely different valuation backdrop. At gold’s January 2026 high, my valuation model placed the metal 0.9 standard deviations ABOVE fair value. That alone might appear comparable to previous cycle peaks. The difference is where equities sat. Rather than being undervalued, the S&P 500 stood 2.6 standard deviations ABOVE fair value, placing it among the most expensive equity markets on record. This dramatically changes the relative valuation picture.

Comparing the two assets highlights the contrast:

• 1980: The S&P 500 was 8.1 standard deviations cheaper than gold.

• 2011: The S&P 500 was 1.1 standard deviations cheaper than gold.

• 2026: The S&P 500 was 1.7 standard deviations more expensive than gold.

That distinction is difficult to ignore. Previous secular peaks in gold occurred when investors had an attractive alternative in undervalued equities. Today, investors face a market where both assets appear expensive on an absolute basis, but equities remain considerably more exorbitant than gold. From a relative valuation perspective, the current environment looks fundamentally different from either 1980 or 2011.

Relative Valuation Drives Relative Performance

Investors often assume that because gold reached a familiar resistance level, history must repeat. Technical analysis is valuable, but long-term market cycles are rarely driven by price patterns alone. Valuation plays a central role. Historically, major declines in the Gold-to-S&P 500 ratio occurred when three conditions aligned:

• Gold was expensive.

• The S&P 500 was cheap.

• Equities offered substantially better long-term gains than precious metals.

Only the first condition exists today. While gold is modestly above fair value, U.S. equities remain significantly more costly according to long-term valuation measures. Unless equity valuations contract through either a prolonged period of underperformance or a major market correction, it becomes difficult to build the same bearish case for gold that existed during previous cycle peaks.

A Multi-Decade Bullish Pattern

The long-term Gold-to-S&P 500 ratio chart may also be signalling something even more significant. Rather than completing another cyclical peak, the ratio appears to be forming a massive multi-decade cup-and-handle pattern stretching back to the early-1980s. If confirmed, a decisive breakout above the long-term resistance line would carry significant technical implications. The traditional measured-move target from the pattern projects a Gold-to-S&P 500 ratio of 3.6. For context, the ratio currently sits at 0.55. That implies the potential for 6.5x outperformance by gold relative to U.S. equities in the coming years.

Whether that outperformance is driven primarily by rising gold prices, falling equity prices, or a combination of both, remains uncertain. However, the technical structure aligns closely with the valuation backdrop currently developing.

What Could This Mean For Investors?

My longer-term valuation studies continue to suggest gold could reach $9,250 by 2028. If achieved, and assuming equity valuations simultaneously mean revert toward historical norms, the implications for the broader market could be significant.

Under that scenario:

• Gold could rise 115% from current levels.

• The S&P 500 could decline to 2,550 points, representing a fall of 67%.

These figures should not be interpreted as precise forecasts. Markets rarely move in straight lines, and countless macroeconomic variables will influence the eventual outcome. The more important takeaway is the underlying relationship. Investors drawing direct comparisons with 1980 or 2011 risk overlooking the single biggest difference between those periods and today. Back then, gold was expensive while equities were cheap. Today, gold appears only moderately expensive, while U.S. equities remain among the most richly valued markets in modern history. Until that relationship changes, the long-term case for continued gold outperformance remains considerably stronger than many are suggesting.

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But now, the needle is unwaveringly into the red zone.

The question investors asked during the 1990s Dot Com boom, the 1970s Nifty Fifty era, and the 1920s technology bubble was always the same:

“How much further can this go before the fuel runs out?”

Every boom feels unstoppable - until the gas runs low. Today, we may have a way to measure how much remains.

The Fuel Gauge: Investor Dry Powder

Money market assets relative to the size of the U.S. equity market act as a proxy for investor reserves.

When reserves are high:

• Investors have cash to deploy.

• Dips attract fresh buyers.

• Markets can absorb shocks.

When reserves fall:

• Buying power declines.

• Fewer investors remain on the sidelines.

• The market becomes more fragile.

Today, the car alarm has triggered.

The Reserve Warning

Money market assets relative to the S&P 500:

• Current: 1,147x

• Historical average: 1,623x

Investors have 30% less fuel than normal in the tank.

Historically, readings below 1,200x have preceded major bear markets within 12 months. Previous signals:

• 1997 → S&P 500 fell 22% over 3 months

• 1999 → S&P 500 fell 50% over 30 months

• 2017 → S&P 500 fell 20% over 3 months

• 2021 → S&P 500 fell 28% over 9 months

What About AI?

A car does not stop the moment the warning light appears.

It can keep going.

But fuel matters. In markets, fuel is valuation.

Are We On The Reserve Tank?

S&P 500-to-U.S. GDP ratio:

• Current: 25x

• Historical median: 10x

Valuations are 150% above historical norms.

Comparable periods:

• 1997: 11x

• 1999: 15x

• 2017: 14x

• 2021: 20x

Only 1999 and 2021 came close. Both ended with major declines.

The Road Ahead

Warning signs do not mean the market drops immediately. Historically, markets continued higher for 12 months after similar signals:

• 1997-1998: +35%

• 1999-2000: +21%

• 2017-2018: +10%

• 2021-2022: +20%

• Average: +22%

It’s possible the S&P 500 has 22% further upside over the next 12 months before it hits a major peak of 9,000 points.

Will The Fuel Run Out?

Driving faster eats up fuel at a greater rate.

Running out in the fast lane could have serious consequences.

If valuations mean revert, and we see similar declines to 1999 and 2021 - history suggests the S&P 500 could later fall 39% from 9,000 points in mid-2027 to 5,500 points by early-2029.

My Takeaway

Every bubble eventually creates the same belief: “This time is different.”

Sometimes it is.

AI may reshape the world. The technology may justify extraordinary investment.

But every journey follows one rule: The faster you drive, the more fuel you burn.

The AI boom may not be over. The car may still have some miles to go.

But the question is not “can this go further?”

It’s rather: “How far can it go now the gauge has touched the reserve?”

Because eventually: The fuel runs out. And the pits are a long way away.

AI-related stocks now represent 40% of the U.S. stock market.

That level of concentration is strikingly similar to two of history’s biggest market bubbles:

• Internet stocks in 2000.

• Technology stocks in 1929.

Does that mean AI is a bubble?

Probably.

Additionally, the past shows that major bubbles tend to share three powerful forces:

1. Narrative

2. Liquidity

3. Momentum

The Narrative

History teaches us that the biggest bubbles are usually built around powerful ideas.

In the 1920s, investors believed electricity, automobiles, and radio had created a permanently better world.

In 1990s, the internet promised to transform commerce, communication, and daily life.

Today, AI carries a similarly strong narrative. Companies such as OpenAI and Anthropic are experiencing extraordinary growth. AI adoption is accelerating. Eight years ago, only 2% of firms were hiring for AI-related roles. Today, that figure has risen to 5.7%. The message? Businesses are not just talking about AI. They are investing in it to unlock productivity gains.

Liquidity

A powerful story alone does not create a bubble. Liquidity does.

Between 1995-1999, the Fed lowered interest rates from 5.25% to 4.5%. That helped fuel the internet boom, with the S&P 500 rising 160% between 1996-2000. But between 1999-2000, rates increased from 4.5% to 6%. The tightening cycle helped trigger a 50% S&P 500 collapse from 2000-2002.

The same pattern appeared in the 1920s. Between 1921-1927, rates fell from 7% to 3.5%. The S&P 500 surged 400%. But between 1927-29, rates rose from 3.5% to 6.5%. The result? The market collapsed 86% from 1929-32.

The lesson: Easy money fuels bubbles. Tighter money ends them.

Since 2023, financial conditions have supported markets. The Fed has reduced rates from 5.5% to 3.75%, helping drive the AI-led rally as the S&P 500 has gained around 85% over the past three years.

If liquidity remains abundant, history suggests the boom can continue. But if inflation returns… Or speculation becomes excessive… The Fed may eventually be forced to tighten.

Momentum

Momentum is often the final stage of a bubble. Investors may know valuations are stretched. Yet they continue buying. Why? Because the asset class producing the strongest returns becomes impossible to ignore.

Between 1995-2000, the S&P 500 stayed above its 2-year moving average and gained 240%. But when it broke below that level in 2000, the decline accelerated. The market fell 44% over two years.

The same happened in the 1920s. From 1922-1929, the S&P 500 remained above its 2-year moving average and gained 320%. But when momentum failed in 1929, panic followed. The index declined 81% over three years.

Today, momentum remains strong. Since 2023, the S&P 500 has stayed above its 2-year moving average while rising 85%.

Final Thought

The AI revolution may be real. The productivity gains may be enormous. The technology may reshape the global economy. But past annals remind us:

Great technologies can create great companies - and still exist inside great bubbles. The key question today is how long the narrative, liquidity, and momentum can remain aligned? This uncertainty highlights the central fragility that could determine the stability or breakdown of the current AI bubble.

Welcome to the 46th edition of Beyond the Headlines.

This edition explores a question that has been on my mind all week: What if today’s record-breaking stock market is telling a very different story to an economy that is showing signs of break up?

On the surface, U.S. equities appear unstoppable. The S&P 500 continues to trade close to record highs, AI optimism remains firmly intact, and investors continue to embrace risk with remarkable enthusiasm.

Yet beneath that optimism, a number of warning signs are becoming increasingly difficult to ignore.

Consumer confidence has fallen to levels even weaker than that witnessed during the depths of the Global Financial Crisis. And on top of that, investors have accumulated the largest margin debt exposure in modern market history, leaving markets increasingly dependent on confidence and continued liquidity.

At first glance, these developments appear contradictory. Historically, Wall Street and Main Street tended to move together. Strong consumer confidence supported spending, corporate earnings and ultimately higher equity prices. Today, however, those relationships have begun to fracture. Markets continue hitting new peaks while households grow increasingly pessimistic about their financial futures.

This edition examines whether those disconnects represent a temporary feature of the current cycle - or something far more significant.

In Part I, we explore one of the most remarkable divergences in recent financial history: the widening gap between consumer confidence and the S&P 500. As Wall Street celebrates record highs, Main Street has become increasingly pessimistic. Has the market simply become detached from economic reality, or is it correctly anticipating a brighter future driven by artificial intelligence and productivity gains?

In Part II, we examine another record-breaking statistic that has received surprisingly little attention: investor credit has fallen to an unprecedented -$1.06 trillion. History shows that excessive leverage has often amplified both booms and busts. While elevated borrowing does not necessarily signal an imminent market decline, it does raise an important question: how resilient would today’s market be if investor confidence were to weaken?

Finally, in Part III, we step back from the longer-term structural risks and examine what history suggests could happen over the coming months as the United States approaches the next mid-term elections. Looking back over every election cycle since 1970 reveals a surprisingly consistent pattern: periods of short-term consolidation have often been followed by strong post-election gains. The question now is whether this cycle will once again follow history - or chart a different course.

Across all three stories, a common theme emerges: markets rarely move because of one single factor. Valuations, leverage, investor psychology, politics and economic fundamentals constantly interact, sometimes reinforcing one another and sometimes moving in completely opposite directions. Understanding those relationships may prove far more valuable than focusing solely on today’s headlines.

As always, this edition is not intended to predict the future with certainty. Rather, it aims to provide historical context, quantitative analysis and a framework for thinking about risk in a market that continues to challenge conventional wisdom.

Thank you for reading. If you find this analysis valuable, please share it, leave a comment, and subscribe for future editions.

Sincerely,

Tom Bradshaw

PART I:

CONSIDER THIS A DIVORCE!

Wall Street and Main Street Have Officially Gone Their Separate Ways

At a time when the adage attributed to Vladimir Lenin or Josef Goebbels: “lie enough and it becomes the truth” seems rife, everyday Americans are not being fooled.

A swathe of the general population are becoming increasingly pessimistic about their financial futures - as indicated by the University of Michigan Consumer Sentiment Survey which came in at just 44.8 points in May.

Consumer confidence is now weaker than it was during the depths of the 2008-09 Global Financial Crisis (GFC) - the worst economic downturn since the Great Depression.

Yet investors appear to be living an entirely different reality.

The S&P 500 Is At Record Highs

While consumer confidence sits near historic lows, the S&P 500 continues to trade close to all-time highs at 7,500 points.

That’s more than 11x higher than the low of 666 points reached during 2009.

2008-17: When Fundamentals Still Mattered

For nearly a decade after the 2008-09 GFC, the relationship between Main Street and Wall Street made perfect sense:

• Consumer confidence rose.

• Consumers spent more.

• Corporate earnings increased.

• The S&P 500 climbed higher.

The numbers told the story:

• S&P 500: +65%

• Consumer Sentiment: +26%

• Correlation: +89%

2017-Today: The Great Decoupling

Then something changed.

And it changed dramatically.

Since 2017:

• S&P 500: +226%

• Consumer Sentiment: -55%

• Correlation: -80%

Instead of moving together, the two series moved in opposite directions.

What If Consumer Confidence Still Mattered?

If the S&P 500 had continued tracking consumer sentiment after 2017 the way it did during the previous decade…

The index wouldn’t be at 7,500 points. It would be at 666 points today.

In other words: All post-2009 GFC gains would be wiped out.

So What’s Driving Market’s Higher?

In my view, the answer is increasingly clear.

Between 2008-17, the S&P 500 traded on average just 2% above fair value based on my valuation models.

Since 2017?

The market has averaged 86% above fair value.

That suggests the market’s rise is no longer being driven primarily by traditional fundamentals.

Instead, investors are pricing in:

• The transformative promise of AI.

• Indefinite policy support from governments and central banks.

The Bottom Line

The most striking thing about this chart isn’t that consumer confidence is weak.

It’s that markets seem to have stopped caring.

For nearly a decade, confidence and stock prices moved, healthily, hand-in-hand. Today they are travelling in opposite directions.

Maybe markets are correctly forecasting a brighter future. Maybe AI really is the game-changer investors believe it to be. Or maybe we’re witnessing one of the greatest valuation disconnects in modern market history.

Either way, this chart asks a question every investor should be thinking about: Can asset prices continue to rise indefinitely when the people who drive two-thirds of the economy are feeling worse than they did during the Global Financial Crisis?

PART II:

$1.06 TRILLION REASONS TO RETHINK U.S. EQUITIES

The Hidden Fault Line Beneath The AI Boom

In Part I, we examined one of the most remarkable divergences in modern financial history: Wall Street continues to celebrate record highs while Main Street has become increasingly pessimistic about the economic outlook.

If markets are no longer being driven primarily by consumer confidence, an obvious question follows: What is driving them instead?

One possible answer lies in the extraordinary build-up of investor leverage. As optimism surrounding artificial intelligence and ever-rising asset prices has intensified, investors have borrowed at unprecedented levels to increase their exposure to equities.

In Part II, we explore why investor credit has fallen to a record -$1.06 trillion, how previous episodes of excessive leverage have amplified major market downturns, and whether today’s debt-fuelled bull market has become increasingly vulnerable to a reversal in investor confidence.

The Leverage Time Bomb

Debt has always been an essential component of the modern financial system. Borrowing enables businesses to invest, consumers to spend, and financiers to amplify returns. Yet when markets become overly dependent on leverage, the very force that fuels gains can ultimately become the catalyst for severe declines.

In the second quarter of 2026, investor credit fell to a record -$1.06 trillion, representing an extraordinary deterioration of $814 billion over the past four years. Viewed in isolation, the number is remarkable. Viewed alongside previous market cycles, it becomes potentially far more significant.

Could this unprecedented plunge in investor credit represent one of the biggest threats facing U.S. equities today? More importantly, could the AI-driven market boom eventually collide with a brutal reality check once the debt-fuelled speculation cycle finally reverses?

Understanding Investor Credit

Investor credit measures the difference between the cash investors hold in brokerage accounts and the amount they have borrowed to purchase equities. When investor credit is negative, investors collectively owe more through margin borrowing than they hold in available cash balances. In practical terms, it indicates that a greater portion of market exposure is being financed through borrowed capital rather than investor funds.

Extreme levels of investor credit are often associated with periods of elevated risk appetite. As asset prices rise, investors become more willing to increase exposure through leverage, allowing portfolios to grow and supporting further borrowing. This can create a reinforcing cycle where rising markets encourage even greater risk-taking.

Why Leverage Matters

The danger is that the same mechanism that supports markets during periods of strength can accelerate declines when conditions reverse. When asset prices begin falling, leveraged investors face declining portfolio values and increasing pressure to reduce exposure. Brokers may issue margin calls, forcing investors to either provide additional capital or liquidate positions. These forced sales can intensify downward momentum, creating a cycle where falling prices trigger more selling and further declines.

This process can rapidly transform an ordinary market correction into a much deeper downturn. Historically, leverage-driven liquidation has played a central role in several of the largest equity sell-offs of the past three decades.

Previous Market Cycles

The Dot Com Bubble

During the technology bubble of 2000, investor enthusiasm surrounding internet companies pushed valuations to unprecedented levels. At the height of the cycle, investor credit bottomed at -$132 billion. Although that figure appeared extreme at the time, the subsequent unwind proved devastating. The S&P 500 ultimately declined 51% over the following two years. As leveraged positions were unwound, investor credit reversed sharply, eventually swinging to +$45 billion by 2002. That deleveraging process laid the groundwork for a healthier market structure, helping support the subsequent 100% rally in the S&P 500 between 2002 and 2007.

The Housing Bubble

A similar pattern emerged during the Global Financial Crisis. Before the market peaked in 2007, investor credit had fallen to -$61 billion. While leverage levels were considerably lower than those seen during the Dot Com era, the eventual outcome proved even more severe. The S&P 500 plunged 58% as the housing market collapsed and financial institutions faced mounting losses. Investor credit subsequently rebounded dramatically, reaching +$153 billion by 2008, signalling a broad reset in market leverage. That cleansing process eventually preceded one of the strongest bull markets in history, with the S&P 500 rallying approximately 1,000% from 2009 to the present.

Across both cycles, the sequence followed a familiar pattern:

• Elevated leverage helped inflate asset prices.

• Deleveraging accelerated the downturn.

• A reset in investor positioning established the conditions for the next long-term expansion.

Today’s Numbers Stand Apart

Making historical comparisons offers a frightening perspective regarding where we sit today. Current investor credit figures have reached a mind blowing $1.06 trillion. That is:

• 7 times worse than the 2000 Dot Com Bubble.

• 17 times deeper than the 2007 Real Estate Bubble.

Are you comfortable with how much margin borrowing has expanded during the current market cycle?

Does Record Leverage Mean A Crash Is Imminent?

It is important to distinguish between elevated leverage and an imminent market collapse. High levels of investor borrowing do not automatically trigger a downturn. Markets can remain heavily leveraged for extended periods, particularly when corporate earnings continue growing, economic conditions remain supportive, and investor confidence stays elevated. Nevertheless, leverage significantly increases market vulnerability if selling pressure emerges.

How Severe Could The Fallout Be?

One of the more striking observations from previous cycles concerns the relationship between leverage and market declines. The S&P 500 fell 51% following investor credit of -$132 billion. It declined 58% after investor credit reached -$61 billion. Today, investor credit stands, as already mentioned, at -$1.06 trillion.

If previous bear markets swept in when leverage represented only 12% and 6% of today’s levels, investors may reasonably ask whether current downside risks could exceed those experienced during either the Dot-Com collapse or the Global Financial Crisis.

Of course, financial markets rarely accord with simple mathematical relationships. Higher leverage does not necessarily imply proportionally larger declines. Economic conditions, corporate earnings, central bank policy and fiscal responses all influence eventual outcomes.

Even so, today’s debt exposure highlights the extent to which market stability increasingly depends on continued investor confidence. Should confidence weaken materially, the adjustment process could become considerably more volatile.

Expressing The View: A Risk-Managed S&P 500 Strategy

For investors who believe the AI-driven equity boom may eventually unwind into a significant bear market, the challenge is not simply identifying the risk, but determining how to express that view while managing the possibility that markets continue to rise.

An approach I would use is to examine the behaviour of the S&P 500 following major breakout levels. Since breaking above the previous 2000 and 2007 highs around the 1,550-1,575 point tally in 2013, the S&P 500 has followed a remarkably consistent pattern: Once the index breaks above a major pivot high and reaches new all-time highs, it has never subsequently closed below that prior pivot high.

Since 2013, five major pivot highs have defined the market structure:

• The May 2015 pivot high at 2,135 points

• The February 2020 pivot high at 3,394 points

• The January 2022 pivot high at 4,818 points

• The February 2025 pivot high at 6,147 points

• The January 2026 pivot high at 7,002 points

Each time the S&P 500 broke above these levels and entered new all-time-high territory, those previous highs became structural support.

• The index never closed below 2,135 points after breaking above the May 2015 high, even during the Covid crash when it reached 2,192 points.

• It never closed below 3,394 points after breaking above the February 2020 high, even during the 2022 bear market when it reached 3,492 points.

• It never closed below 4,818 points after breaking above the January 2022 high, even during the 2025 tariff sell-off when it reached 4,835 points.

• Finally, it never closed below 6,147 points after breaking above the February 2025 high, even during the 2026 geopolitical-driven sell-off when it reached 6,317 points.

Using this framework, the January 2026 pivot high of 7,002 points becomes the critical line in the sand. As long as the S&P 500 remains above 7,002, the bullish structure that began in 2013 remains intact. A confirmed break below this level would represent a significant technical deterioration and potentially signal the end of the 2009-present secular bull market.

A Potential Bearish Strategy

A risk-managed approach I would use would be to remain long the S&P 500 while it trades above 7,002 points. If the index breaks below this level, the long position would be exited and a short position would be initiated with the objective of targeting previous major pivot highs.

• The first target would be 6,147 points, the February 2025 pivot high, representing a 17% decline from current levels.

• The second target would be 4,818 points, the January 2022 pivot high, representing a 35% decline from current levels.

• The third target would be 3,394 points, the February 2020 pivot high, representing a 54% decline from current levels.

• The final target would be 2,135 points, the May 2015 pivot high, representing a 71% decline from current levels.

A disciplined approach I would use would involve reducing exposure progressively as these levels are reached:

• Cover 25% of the short position at 6,147 points.

• Cover 33% of the remaining position at 4,818 points.

• Cover 50% of the remaining position at 3,394 points.

• Exit the final position at 2,135 points.

The Bottom Line

The AI revolution continues to reshape financial markets, firing a heady and intoxicating enthusiasm across U.S. equities. Whether that optimism ultimately proves justified will depend on technological progress, corporate profitability and broader economic conditions. However, investor credit offers a different perspective. Rather than measuring innovation or earnings, it measures risk appetite. And at -$1.06 trillion, that risk appetite has reached levels never previously recorded.

Investor credit may not predict exactly when markets will turn. But the S&P 500’s long-term trend structure provides investors with a framework for identifying when the market regime has changed.

The question investors should now consider is straightforward: How long can the largest leverage build-up in modern market history continue before the debt finally demands repayment?

PART III:

THE MID-TERMS MARKET IMPACT: A 4% PULLBACK… THEN A 10% RALLY?

The Historical Mid-Term Patterns Investors Might Consider

In Parts I and II, we examined two of the defining characteristics of today’s bull market: a growing disconnect between Wall Street and Main Street, and the largest build-up of investor leverage in modern financial history.

Together, these developments suggest a market that has become increasingly dependent on optimism, abundant liquidity, and continued investor confidence.

The obvious question now becomes: What could cause that confidence to change?

One potential catalyst lies just around the corner: the U.S. mid-term elections. While elections introduce uncertainty in the short term, history suggests they have often been followed by surprisingly strong equity market performance.

In Part III, we examine how the S&P 500 has historically behaved before and after mid-term elections, whether a short-term pullback could still occur despite record highs, and why the months following the vote have often marked the beginning of the market’s strongest seasonal period.

The Mid-Term Roadmap

I spent time analysing one question this week: Does history give us any clues about what the S&P 500 could do heading into - and after - the next U.S. mid-term elections? The results were surprisingly interesting…

The Market Has Started This Cycle Strong

The S&P 500 is currently trading at 7,400 points. Looking back at every mid-term election cycle since 1970, this is the sixth strongest start for equities during the first three months of the six-month period leading into mid-term elections. Only five cycles were stronger:

• 1994: 7,425 points

• 1978: 7,482 points

• 1990: 7,557 points

• 2014: 7,626 points

• 2018: 7,676 points

The historical median across the previous 14 mid-term cycles? 7,206 points. That creates an interesting question: Has the market moved too far, too fast?

Could Volatility Be Ahead?

The S&P 500 has recently surged:

• More than 16% in April and May.

• Into fresh record highs.

• At a pace rarely seen historically.

Based on previous election cycles, the current setup suggests a possible period of digestion:

• A potential 4% pullback.

• A possible retest of the 7,000 point area.

What makes that level interesting? Markets often revisit previous breakout zones before continuing higher - turning old resistance into new support.

Why The Mid-Terms Matter For Markets

Mid-term elections are more than just a political event. For a sitting President, they determine:

• Control of Congress.

• Ability to pass legislation.

• The strength of the Administration’s agenda.

With Republicans currently holding both chambers, President Trump currently has greater room to advance policy. A shift in either chamber could significantly change that dynamic.

Markets Influence More Than Portfolios

Around 60% of U.S. adults invest in the stock market. That means market performance affects more than investment accounts. A stronger market can influence:

• Consumer confidence.

• Household wealth perception.

• Retirement balances.

• Economic sentiment.

And when people feel financially stronger, their view of the economy - and those in power - can shift.

The Historical Pattern After Mid-Terms Is Fascinating

Looking at the 14 previous mid-term election cycles, the pattern changes after the election. Historically, 11 out of 14 cycles saw the S&P 500 higher six months after mid-terms. The historical median suggests:

• Around mid-terms → 7,316 points

• Six months later → 8,076 points

A potential move of around 10%.

Seasonality May Add Fuel

The timing is also interesting. Historically, the strongest periods for equities often include:

• The final quarter of the year.

• The first quarter of the following year.

Five of the six months after mid-term elections sit inside two historically strong seasonal windows. This may help explain why post-mid-term returns have historically been so robust.

The Bigger Picture

The historical roadmap suggests two possible phases:

• Now to Mid-Terms: A period where markets may consolidate after a powerful run.

• Post Mid-Terms: A period where history suggests the possibility of renewed upside momentum.

Of course, the past is not a blueprint for the future. But markets have a habit of leaving footprints - and history can often reveal patterns hiding in plain sight. The next few months will determine whether this cycle follows the lessons of the past… or writes an entirely new chapter.

RISK DISCLAIMER

Past Performance - Future Performance

• No Guarantees: Past performance is not an indicator of future results. Exercise caution when evaluating performance as all financial products are influenced by market forces and unforeseen events that may impact future outcomes.

• Future Projections: Future performance predictions are not guarantees of past or current performance. Assess future claims cautiously, as they rely on assumptions. Like all financial products, this product is subject to market forces and unpredictable events that may affect future performance.

General Advice

• Educational Purposes: The information in this report is for educational purposes only. Any advice provided is general and does not consider your personal objectives, financial situation, or needs. You should evaluate the appropriateness of the advice in light of your own circumstances before acting on it.

Investment Decisions

• Risk Awareness: Investment decisions, including buying, selling, holding, or trading securities and other investments, carry risk and should be made with the guidance of qualified financial professionals. Trading, especially day trading, involves substantial risks and can result in significant losses. Consult a qualified financial professional before starting any trading program to determine if it is suitable for your financial situation and risk tolerance.

But one question worth asking is:

Are we witnessing genuine innovation… or the final stage of market euphoria?

Almost always, history offers an intriguing perspective.

Some of the largest IPO events have arrived at moments when optimism, speculation, and valuations were already stretched to extremes.

And each time, the market paid the price.

1928: The “Roaring Twenties” Bubble

In December 1928, the Goldman Sachs Trading Corporation was launched. A record number of shares were sold to the public during one of the greatest stock market booms in history.

Between 1927-29, the S&P 500 surged 90%.

Investor optimism reached stratospheric levels, while valuations became severely stretched, with the S&P 500-to-U.S. GDP ratio climbing to 28% - 180% above its long-term median of 10%.

Then came the turning point…

Black Tuesday.

The S&P 500 fell 22% in just two trading days. The Great Depression followed, and between 1929-32 the index collapsed by 86%.

Investors then had to wait 26 years before inflation-adjusted highs were finally exceeded in 1955.

1971: The “Nifty Fifty” Bubble

In October 1971, Intel went public.

Once again, IPO enthusiasm was widespread and investor confidence exceptionally strong.

Between 1971-73, the S&P 500 advanced 80%, while the S&P 500-to-GDP ratio reached 13% - 30% above its historical median.

Then the market turned…

Between 1973-75, the S&P 500 declined by 50%.

Investors waited 18 years before inflation-adjusted highs were regained.

2000: The Dot-Com Bubble

In April 2000, AT&T launched its IPO.

Once again, optimism and speculation reached extreme levels.

Between 1998-00, the S&P 500 rose 70%, while the S&P 500-to-GDP ratio climbed to 16% - 60% above its long-term median.

Five months later, the market peaked…

The Dot-Com crash followed.

Between 2000-02, stocks fell 50%, and investors waited 16 years for inflation-adjusted highs to return.

2026: The AI Bubble?

SpaceX recently launched the largest IPO in history.

And it has taken place when AI enthusiasm is at fever pitch.

The S&P 500 has already risen 60% over the past two years.

Meanwhile, valuations remain exceptionally elevated, with the S&P 500-to-U.S. GDP ratio standing at 25% - 150% above its historical median.

The Historical Pattern

Looking back at the three IPO episodes that preceded major market peaks, two characteristics stand out:

1. Valuations were elevated.

2. Market momentum was exceptionally strong.

It’s well worth noting that every previous peak occurred when:

• The S&P 500-to-GDP ratio stood at least 30% above historical norms.

• The S&P 500 had already risen 60% or more during the preceding two years.

The Big Question

If parallels with the past reemerge, are we looking down the barrel at another major correction?

Looking back at the three major post-IPO market peaks examined above, the S&P 500 subsequently declined by an average of 60%, with the downturn unfolding over two years.

Applied to today, that would imply the S&P 500 could fall from 7,500 to 3,000 points between 2026-28.

But perhaps the bigger concern is this:

Following those three previous post-IPO peaks, investors had to wait an average of 20 years before inflation-adjusted highs were regained.

If the pattern were to repeat again, the S&P 500 might not surpass its current inflation-adjusted peak until 2046.

We should all understand risk and reward. And we should also understand that with the potential for higher returns comes the higher probability of loss.

Welcome to the 45^th edition of Beyond the Headlines.

This edition revolves around a single question: What if inflation was never fully defeated - merely held at bay?

For much of the past three decades, investors have become accustomed to an environment of relatively low inflation, falling interest rates, and abundant liquidity. That backdrop has supported rising asset prices across equities, bonds, and property, while encouraging markets to believe that inflation is largely a problem of the past.

History, however, suggests inflation rarely disappears in a gift-wrapped package.

The inflationary crisis of the 1970’s did not unfold in one continuous move. It arrived in waves. Each period of easing convinced investors and policymakers that the worst was over, only for inflation to return with even greater force following renewed supply shocks and energy disruptions.

Today, we are seeing astonishing similarities. Geopolitical tensions remain elevated. Global supply chains continue to face periodic disruption. Fiscal deficits remain historically bloated. And while inflation has retreated from its recent highs, the underlying forces that helped create it have not gone away.

This edition examines whether markets may once again be underestimating the persistence of what economists call the slumbering dragon.

In Part I, we revisit the inflation cycle of the late 1960’s and 1970’s, highlighting the striking similarities between that period and today. The astonishing parallels raise an important question: if the first two waves have followed a remarkably similar path, could a third lie ahead?

In Part II, we examine an often-overlooked relationship between crude oil and long-term U.S. Treasury yields. While most investors focus on geopolitical headlines when analysing oil, the bond market may be signalling something much larger. If long-term yields continue pointing toward significantly higher energy prices, the implications for inflation, economic growth, and financial markets could prove substantial.

Across both sections, one central theme emerges: Inflation is rarely driven by a single event. It develops through a combination of supply shocks, policy decisions, market expectations, and investor psychology. Understanding those relationships may prove far more valuable than focusing solely on today’s headlines.

This edition is not intended to predict a specific economic outcome. Rather, it explores historical patterns, macroeconomic relationships, and market signals that may help investors better understand the risks - and opportunities - that could emerge if inflation proves more persistent than currently expected.

Thank you for reading. If you find this analysis valuable, please share it, comment, and subscribe for future editions.

Sincerely,

Tom Bradshaw

PART I:

IS THE 1970’s INFLATION GENIE OUT OF THE BOTTLE?

The Historic Inflation Cycle That Offers A Cautionary Roadmap

The market’s old enemy may be stirring once again. With geopolitical tensions elevated, energy markets remaining volatile, and the possibility of supply disruptions still hanging over the global economy, investors are beginning to ask a question many thought had been settled years ago: could the inflation dynamics of the 1970’s be re-emerging?

When comparing the current inflation cycle to that of the late 1960’s and through the 1970’s, several striking similarities are revealed. And the similarities may be noteworthy enough for investors, policymakers, and market participants to give serious credence to.

The Inflation Lessons Of The 1970’s

To understand the potential risks ahead, it is worth revisiting one of the most inflationary periods in modern economic history. In 1967, oil traded at $3 per barrel. The average U.S. home cost $30,000 and a loaf of bread sold for $0.21.

By 1980, the picture had changed dramatically. Oil prices had surged to $40 per barrel, representing an increase of over 13x. The average U.S. home price climbed to $80,000, while bread prices rose to roughly $0.51.

The consequences for consumers were severe. Inflation eventually surged to 15%, purchasing power was heavily eroded, and the cost of living increased substantially across nearly every area of the economy. This inflation crisis ultimately required aggressive monetary tightening and some of the highest interest rates in modern history before price pressures were finally brought under control.

Today, while the economic backdrop differs in many respects, some of the underlying inflation patterns appear spookily familiar.

The 93% Correlation

One of the more intriguing observations emerges when comparing the broad trajectory of U.S. inflation between two periods:

• 1967-1982

• 2015-2026

When plotted side by side, the two inflation cycles exhibit a correlation of 93%.

As said already, correlation alone does not predict future outcomes. Markets are influenced by countless variables, and no historical comparison should ever be viewed as a forecasting certainty. Nevertheless, a 93% correlation is difficult to dismiss outright.

This similarity raises an important question: if the first phases of today’s inflation cycle have broadly mirrored the 1970’s experience, could later stages also share common ground?

The Three-Wave Inflation Pattern

One of the defining features of the 1970’s inflationary era was that inflation did not arrive all at once. Instead, it unfolded in three distinct waves:

• The first wave occurred between 1967 and 1970, when inflation rose from 3% to 6%.

• The second wave proved considerably more powerful. Between 1972 and 1974, inflation accelerated from 3% to 12% - a whopping 9% increase.

• The final wave occurred between 1976 and 1980. Inflation rose from 5% to 15%, adding an excruciating 10% and ultimately producing the peak inflation reading of the entire cycle.

Now compare those moves with recent history:

• The first modern inflation wave occurred between 2015 and 2018, with inflation rising from 0% to 3%, closely matching the 3% increase of the first 1970s move.

• The second wave followed between 2020 and 2022, when inflation surged from 0% to 9%, again closely matching the 9% increase experienced during the second 1970s wave.

The obvious question becomes whether a third wave lies ahead. If the historical narrative becomes the reality of today, a future inflation move from 2% to 12% would represent a similar 10% increase. This is not a forecast. However, it remains a scenario that is worth taking seriously.

Why Oil Remains the Key Variable

The common denominator behind every major inflation surge of the 1970’s was energy:

• The 1973-74 Arab Oil Embargo triggered a dramatic supply shock, sending oil prices 210% higher. Inflation subsequently accelerated from 3% to 12%.

• A few years later, the Iranian Oil Embargo of 1979-80 produced another major energy disruption. Oil prices surged 165%, while inflation climbed from 5% to 15%.

Energy acted as the transmission mechanism that spread inflation throughout the broader economy. That dynamic remains relevant today. During the 2026 geopolitical shock, oil prices briefly surged 80% in a single month before subsequently falling 40% as supply concerns eased. Inflation rose from roughly 2% to 4% during the same period.

Importantly, inflation pressures could ease again if energy prices continue to decline. However, the episode served as a reminder that oil remains one of the most important variables in the inflation equation. Energy costs influence nearly every sector of the economy: transportation, manufacturing, food production, housing construction, utilities, and logistics all depend heavily on energy inputs. When oil prices rise sharply, inflation can spread rapidly. Conversely, when oil prices decline, disinflationary forces often accelerate.

The Most Concerning Historical Parallel

Perhaps the most important comparison lies not in the inflation peaks but in the temporary periods of stability that occurred beforehand. Between late 1976 and early 1977, inflation rose from 5% to 7%. Following that increase, inflation remained relatively stable between 6% and 7% for 12 months. At the time, many observers believed the inflation crisis had largely been harnessed. They were wrong. Over the next two years, inflation accelerated dramatically, eventually reaching 15% in 1980.

Today, something similar appears to be unfolding. Inflation has risen from 2% in early 2026 to around 4% in May 2026, representing a 2% increase - closely resembling the initial rise experienced in 1977. As was the case 50 years ago, might inflation remain within the 3% to 4% range for an extended period of time with investors becoming increasingly complacent?