2025 Could See A Repeat Of 2022's Market Pain | Brent Johnson

He says it's time to be "extra cautious"

As we head into a new year, there are a lot of questions swirling about money:

Will the dollar's strength vs other world currencies continue into 2025?

And even if so, will it continue to lose purchasing power vs real things?

Will gold continue to be aggressively purchased by the world's central banks? By investors?

Is Bitcoin "winning" the store of value war?

To discuss all these and more, we're fortunate to welcome back to the program Brent Johnson, CEO & Portfolio Manager at Santiago Capital, and developer of the Dollar Milkshake Theory.

Brent is "extra cautious" right now given Wall Street's exuberance. At these high levels of euphoria, he fears the 2025 market could look a lot like 2022’s rough year.

For the details, click here or on the video below:

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Adam’s Notes: Brent Johnson (recorded 12.5.24)

EXECUTIVE SUMMARY:

• Brent is concerned about the extreme valuation levels and rapid market movements following recent political and economic developments. To mitigate risks, he is reducing equity exposure through options-based hedging rather than outright selling. While already holding sufficient gold, he is open to increasing allocation during a significant price pullback. Additionally, Brent is focusing on U.S. investments, particularly blue-chip equities, while exploring growth opportunities in sectors like uranium, which he expects to play a significant role in the coming years.

• Brent reinforced his Dollar Milkshake Theory, which predicts the U.S. dollar will continue to dominate global markets due to its reserve currency status and capital inflows. He anticipates that the U.S. will outperform other economies because of its relative advantages, including its deep financial markets, economic resilience, and strategic geopolitical positioning. However, he warned that a significant and rapid rise in the dollar's value could disrupt global markets, creating potential risks.

• The upcoming Trump administration's aggressive economic policies such as tariffs, government spending cuts, and attempts to repatriate manufacturing are likely to cause short-term disruptions. Brent emphasized the need for cautious positioning to navigate potential volatility in 2025, which he compares to the tumultuous economic conditions of 2022. Despite short-term challenges, he sees a potential for long-term economic growth if policy reforms succeed.

• Liquidity has been a significant driver of asset prices in recent years, and Brent expects this trend to