Another Sign the Blow-Off Top Is Coming

Chipmaker Nvidia is up over 500% in the past five years. Its market cap, closing in on $5 trillion, boggles the mind. That’s just one reason why it reminds one of Cisco during the dotcom bubble.

Yet, shares trade at 50 times earnings — pricey even for a growth stock — but nowhere near the 500 times earnings of Palantir.

In 2020, you could have bought shares of Nvidia at 50 times earnings. And in 2025. The fact of the matter is, Nvidia’s valuation has held fairly steady – with its share price soaring as its earnings soar.

That’s also a big drive for the massive rally in the S&P 500:

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There’ s still more room for stocks to run as prices haven’t yet exceeded earnings growth (Source: Carson)

If history continues to rhyme, we expect a final parabolic move higher to be in the works for the stock market. One that may kick off near the end of the year and move into 2026.

That final push higher will finally see a divergence – with soaring stock prices amid a backdrop of slowing – or even evaporating – earnings.

When that happens, retail investors who would usually be cautious on stocks may throw that caution to the wind, just as cautious investors in 1997 and 1998 joined the relentless bull market mentality in 1999 – and the playout of our forecast for a terrifying bull.

~ Addison

P.S. Exuberance for AI has forced a massive concentration in a historically few stocks such as Nvidia. Fortunately, there are pockets of extreme value elsewhere in the market.

That includes materials, commodities, mining and energy stocks, as the Trump administration pushes for a stronger industrial policy and more domestic production.

Gold, jumping to $3,850 this morning, will likely catch retail interest as central banks push prices higher and the Trump administration forces monetary changes. Our forecast for significantly higher gold prices continues to move in the right direction, and can play out even as the AI bubble meets its inevitable pin.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

Chipmaker Nvidia is up over 500% in the past five years. Its market cap, closing in on $5 trillion, boggles the mind. That’s just one reason why it reminds one of Cisco during the dotcom bubble.

Yet, shares trade at 50 times earnings — pricey even for a growth stock — but nowhere near the 500 times earnings of Palantir.

That’s also a big drive for the massive rally in the S&P 500:

Turn Your Images On

There’ s still more room for stocks to run as prices haven’t yet exceeded earnings growth (Source: Carson)

If history continues to rhyme, we expect a final parabolic move higher to be in the works for the stock market. One that may kick off near the end of the year and move into 2026.

That final push higher will finally see a divergence – with soaring stock prices amid a backdrop of slowing – or even evaporating – earnings.

~ Addison

P.S. Exuberance for AI has forced a massive concentration in a historically few stocks such as Nvidia. Fortunately, there are pockets of extreme value elsewhere in the market.

That includes materials, commodities, mining and energy stocks, as the Trump administration pushes for a stronger industrial policy and more domestic production.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

What followed was bipartisan condemnation of the investigation. Greenspan, Bernanke, and Yellen co-signed a blistering rebuke, warning the U.S. was starting to resemble “emerging markets with weak institutions.”

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Not to fret, the other 85% of borrowers continue to spend on borrowed time. Total U.S. household debt, including mortgages, auto loans, student loans, and credit cards, reached record highs in late 2025, exceeding $18.5 trillion. This surge was driven partly by rising credit card balances, which neared their own all-time peaks due to inflation and higher interest rates.

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

A wise capital allocator doesn’t fight that storm. He doesn’t argue with it. He respects it the way sailors respect the sea: with preparation, with humility, and with a sharp eye for what breaks first.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

Total municipal, state and federal debt service costs soared to nearly $1.5 trillion in the third quarter of 2025. Debt’s easy to accumulate when rates are low. Trouble is, you are obligated to refinance them even after rates go up.

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.