Stocks Becoming More Volatile Due To Growing Liquidity Shortfall | Michael Lebowitz

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Nov 15, 2025

This week, portfolio manager Michael Lebowitz offers his insights into rising market volatility and the tightening liquidity landscape. He explores the potential pitfalls of the AI spending boom and its sustainability. The duo discusses sector rotations, highlighting healthcare's recent surge and risks tied to credit markets. Lebowitz also examines the implications of high valuations amidst shifting sentiments, questioning whether current investment patterns reflect genuine growth or a head-fake boom. Lastly, they touch on personal health, emphasizing its importance as a form of wealth.

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ADVICE

Rotate Rather Than Flee The Market

Use factor and sector rotation signals to adjust portfolio exposure instead of exiting the market.
Move from overbought sectors into oversold conservative sectors to reduce downside risk.

ADVICE

Check Correlations Before Rotating Sectors

Before making rotation trades, check the statistical correlation between factors to ensure odds favor reversion.
Prefer trades with strong historical R‑squared relationships.

INSIGHT

AI Spending Drives Valuations And Uncertainty

AI capex expectations are driving much of current valuations, but growth may be over‑extrapolated.
The useful life and obsolescence risk of today's AI infrastructure is a central uncertainty.

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Volatility returned to the stock market this week.Partly due to growing concerns about the sustainability of the AI spending boom.Partly due to further stresses building in the credit market.And also due to a growing shortfall of liquidity.Portfolio manager Michael Lebowitz and I discuss each of these in depth in this week's Market Recap.For everything that mattered to markets this week, watch this video.

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