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Speaker 1: Now equity markets are making investors very nervous. This September

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Speaker 1: markets are softening a bit, which is remarkably, remarkably regular

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Speaker 1: regular occurrence actually in September, and Sam Dickey from Fisher

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Speaker 1: Funds is with us, say Sam.

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Speaker 2: Hey have that. So what goes on in September, it

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Speaker 2: is quite astonishing. So if you go back sort of

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Speaker 2: twenty thirty or even one hundred years, September is by

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Speaker 2: far the weakest month in the US equity market. In fact,

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Speaker 2: over the last one hundred years, it is the only

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Speaker 2: month that is on average negative and the reasons are

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Speaker 2: actually pretty benign. So Northern Hemisphere money managers, so July

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Speaker 2: is the by far the strongest month of the year

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Speaker 2: on average, So when they go away on holiday, liquidity

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Speaker 2: drives up a bit and stock markets typically squeeze a

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Speaker 2: bit higher, and they come back from the summer break

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Speaker 2: all refreshed and look to clean up their portfolios. And

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Speaker 2: many of these guys have September year end, so they

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Speaker 2: clean out losers from their portfolio to tiding the mup

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Speaker 2: make them look good at September year end, driving down

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Speaker 2: stock prices, and part of it's probably self fulfilling, which

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Speaker 2: which seems silly, but investors sell to try and get

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Speaker 2: ahead of the September swoon, which brings on the September swoon.

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Speaker 2: But this year's weakness isn't just about this calendar superstition.

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Speaker 2: There are there are some real risks brewing that have

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Speaker 2: investors a little concerned, like what, well, first, sentiment is elevated.

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Speaker 2: So remember a few short months ago you and I

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Speaker 2: were talking about fear being the highest in twenty five years.

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Speaker 2: Now the market is quite exuberant, which worries professional investors.

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Speaker 2: So that's why number two is markets are headline expensive.

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Speaker 2: So the price to earnings multiple, the PE ratio is

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Speaker 2: twenty two times earnings, which is pretty much the highest

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Speaker 2: level in quarter of a century. And the next six

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Speaker 2: months should be tougher economically as the rubber meets the

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Speaker 2: road on inflation and growth from tariff. So Home Depot

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Speaker 2: put it most succinctly last week, it, like many other

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Speaker 2: US companies, have been been swallowing, been eating the tariff

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Speaker 2: cofts in pots, imposts and the in their profit and

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Speaker 2: loss statements to date as they wait and see where

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Speaker 2: terrafs will land. But the Home Depot said they'll look

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Speaker 2: to pass on these cost increases to consumers in the

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Speaker 2: second half, which will lift inflation and truncate growth. And

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Speaker 2: of course, the AI bubble is looking pretty inflated right now,

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Speaker 2: and the enthusiasm for AI stocks is just not being

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Speaker 2: matched by reality. It's not being matched by the revenue

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Speaker 2: use cases from real world use cases.

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Speaker 1: So what does this all mean for investors?

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Speaker 2: I think these are valid concerns. Not the September swiming,

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Speaker 2: by the way, not that superstitious thing, but I think

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Speaker 2: these are valid concerns, especially given how far the market

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Speaker 2: has moved. A couple of caveats, so the first one

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Speaker 2: is unlike in late twenty twenty one, twenty twenty two

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Speaker 2: when we last saw that sort of headline pe multiple

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Speaker 2: up at that twenty two times and we saw a

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Speaker 2: big pullback of markets. The US Federal Reserve, the FED

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Speaker 2: has a ton of firepower this time to cut rates

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Speaker 2: of the economy soften. So remember back then, the Federal

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Speaker 2: Reserve benchmark rate, which it uses to stoke or slow

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Speaker 2: down the economy was already near zero's whereas today it's

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Speaker 2: at four and a half percent, So tons of room

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Speaker 2: to cut rates to CUSHNERI economic weakness.

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Speaker 1: Yeah, brilliant stuff.

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Speaker 2: Sam.

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Speaker 1: It's good to talk to you. It always is. We

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Speaker 1: talk to you in a week's time. Sam Dickey Official

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Speaker 1: fundzet

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