Thesis on oil and commodity opportunities

In this episode, Ted Oakley, founder and managing partner of Oxbow Advisors with 49 years in the business, predicts that over the next 18 months, markets will see both new highs and new lows amid heightened volatility. Ted currently holds 50% of his portfolio in short-term Treasuries (recently extending some to 3-year), waiting for opportunities as he notes that second years of presidential terms historically return just 1% and typically experience mid-year declines. He argues that financial repression—holding rates low while letting inflation run—is the only way out of America's $40 trillion debt crisis, which is why he's positioned in hard assets including gold, silver, miners, energy, and commodities. Ted recently trimmed silver positions after a 200% move in 2025, expecting consolidation back to $50-60 (from $76), and warns that hidden leverage is at record levels: margin debt as a percentage of market cap is at all-time highs, high-net-worth investors have massive off-balance-sheet securities-based lines of credit, and leveraged ETFs have exploded fourfold. He's critical of private equity for overpaying for companies and using secondary funds as a "gimmick," and predicts this will be a year for active stock pickers as the regime shifts from passive buying to passive selling when baby boomers (averaging age 71 this year) begin withdrawing funds.

Links:

Oxbow Advisors: https://oxbowadvisors.com/

YouTube: https://www.youtube.com/@OxbowAdvisors

X: https://x.com/Oxbow_Advisors

Book: https://www.amazon.com/Second-Generation-Wealth-What-Want/dp/1966629168

Timestamps:

0:00 Intro and welcome back Ted Oakley

1:14 Big picture macro view — dislocation since mid-October

2:59 Year 2 of presidential terms historically poor performers

4:05 Why second years are difficult

5:23 How to prepare for drawdowns

6:51 Why Ted holds 50% in short-term Treasuries

8:21 Can't own long bonds for the next 10 years

9:17 Are we past the point of no return on debt?

11:04 What $1 trillion really means — $100k/hour for 1,100 years

12:03 What's the end game?

13:02 Financial repression — the only way out 13:34 Regime change to hard assets

14:19 Gold and silver — took some profits

16:25 Trading in and out vs. staying long

18:21 Price levels for getting back into silver and gold

19:32 Regime change for hard, durable assets

21:06 Are we due for a major pullback or bear market?

23:09 Hidden risks — margin debt at record levels

25:12 High net worth debt hidden off balance sheet

27:08 Private credit and private equity — trouble brewing

29:40 Would the Fed intervene in a generational bear market?

31:09 The thesis on oil

33:22 Kevin Warsh as Fed chair — Ted's reaction

34:24 The Fed doesn't really matter for stock picking

34:52 Where are you finding opportunities today?

36:58 At what level would you deploy the 50% cash?

38:25 Takeaway for investors this year

39:54 Active stock pickers will outperform

41:05 Prediction for a year from now

42:22 Where to find Ted and closing thoughts