We’ve been kicking around for two and a half centuries.

We went from the Thirteen Colonies to a global superpower. We went from expanding into the western frontier to Armstrong walking on the Moon.

And then — for a while — something got stuck.

I think we all felt it. Peter Thiel put it best:

“We wanted flying cars; we got 140 characters.”

He wasn’t wrong. From roughly 1970 to 2010, the most powerful civilization in human history optimized for the virtual and the frictionless.

We went from atoms to bits. Apps. Platforms. The “knowledge economy” — which was, if we’re honest, a polite way to rebrand forgetting how to build things.

Frederick Jackson Turner saw this coming in 1893. When the frontier closes, he argued, something essential about America closes with it. The restlessness. The reinvention. The bias toward the impossible.

He was right, too. For a while.

Then a South African-Canadian with a physics degree and a messiah complex decided to go atoms.

Hard atoms.

The hardest atoms that exist — orbital mechanics, reusable rockets, the most unforgiving engineering environment in the known universe.

The frontier didn’t close. It just moved to higher ground.

And just before the 250th anniversary of this magnificent, infuriating, inexhaustible republic — it’s going public.

Ticker: SPCX
Exchange: Nasdaq
Valuation: $1.77 trillion

The listing date is June 12th. Independence Day is July 4th. Twenty-two days apart.

The most consequential American IPO in history opens for business three weeks before the country turns 250.

That’s not a coincidence. That’s a timestamp.

Let’s be clear about what SpaceX actually is.

It’s not a rocket company. It isn’t a satellite internet company.

It’s not even, really, a technology company in the way Wall Street calls it.

SpaceX is what America looks like when it stops apologizing for its ambitions.

The original American project was an act of civilizational audacity. A handful of farmers, lawyers, and printers in Philadelphia decided the old order — the one that controlled trade routes, taxation, and the terms of human movement — was finished.

They were outgunned, outfinanced, and given no chance by the consensus of their time.

They gave the most powerful empire on earth the finger and made it stick.

Sound familiar?

When Elon Musk founded SpaceX in 2002, NASA gave him six months before he’d quit.

The aerospace establishment — Boeing, Lockheed, the whole cost-plus cartel bleeding the government dry — dismissed him completely.

Three rockets blew up, and bankruptcy was howling just outside the door. But the fourth one made orbit and changed everything.

The Founders didn’t win on the first try either.

This is what American reinvention actually looks like up close.

It’s ugly. It’s expensive. It fails publicly and spectacularly.

And then it works — at a scale and speed that leaves the old order standing in the rubble of its own certainty.

There’s a certain type of investor who looks at SpaceX at $1.75 trillion and sees a bubble.

They see Musk risk. Execution risk. Valuation risk. Geopolitical risk. They build their bear case in a spreadsheet and feel very smart about it.

They are making the same mistake people have made about America every single generation.

In 1776, the smart money was on the Crown. In 1863, the smart money was on disunion. In 1941, the smart money was on the Axis. In 1979, the smart money was on Soviet supremacy and American decline. In 2002, the smart money was on NASA and the cost-plus cartel.

The smart money has a perfect record of being wrong about America at the moments that matter most.

Because they always do the same thing: they look at where America is and extrapolate forward.

They never account for what America does — which is to reinvent itself, violently and repeatedly, the moment the old frontier closes, and a new one opens.

The America shorts never learn this lesson. They see the explosions and miss the trajectory. They see the valuation and miss the frontier.

SpaceX is not a bet on Elon Musk. It’s not even a bet on rockets.

It’s a bet on the oldest trade in financial history.

Going long America.

Happy 250th, America.

The post Going Long America appeared first on Daily Reckoning.

It’s SpaceX IPO day. As of 1:25 pm ET, stocks are up. And so is SPCX.

But there’s palpable tension in the air. Behind all the excitement, everyone knows reaching a deal with Iran remains critically important for the world economy, and stocks.

Every time President Trump makes an announcement about Iran, markets react violently. Up and down, depending on the message and tone.

Forgive me for imitating a broken record, but if the Strait of Hormuz remains closed much longer, economic chaos will be unleashed on the world. Inflation is jumping, and the effects of shortages have only just begun to hit.

So those of us hoping stocks continue to rise should still be paying close attention to the Iran issue.

Here’s where we stand today.

Optimism, But Little Trust

Yesterday, the market soared after President Trump canceled his planned strikes on Iran, and said a deal was (once again) right around the corner.

The President went so far as to say, “Time and place of the signing to be announced shortly”.

Source: Truth Social

That sounded extremely confident. But apparently, the deal still has kinks to be worked out.

This morning President Trump posted another message about the Iran situation. If it sounds familiar, it should.

Source: Truth Social

“Very dishonorable people to deal with.” There is little trust here, on either side. And that’s going to make a real, lasting peace deal very tricky. Especially one that re-opens the Strait soon.

Update From the Iranian Side

There is some reason for optimism about a deal. For the first time, an official Iranian government news outlet has stated the following. From the Islamic Republic News Agency (IRNA):

The general outline and text of the memorandum of understanding to end the war between Iran and the United States have been almost finalized and are awaiting the final decision of the decision-making bodies in Iran.

Ok, interesting. That’s the headline that’s floating around social media and getting everyone bulled up. And it does represent real progress.

However, I read the entire article (translated from Persian to English via Google). And there are… caveats:

It is clear that simply signing an agreement to end the war does not mean that the American and Israeli sides will abide by it…

In this regard, the possible signing of the memorandum of understanding to end the war is being carried out in complete suspicion of the other side and with the Iranian armed forces and people fully prepared to confront any breach of promise and deception. Officials of the Islamic Republic of Iran have repeatedly emphasized that “they have no trust in the American side and the signing of the memorandum does not mean the removal of suspicion and the abandonment of the country’s combat and defense readiness.”

Combined with Trump’s new post from this morning (second image from the top), I remain skeptical that a real deal will be signed soon.

We may get a ceasefire extension, or an agreement to “end the war” while negotiations are ongoing. But who knows when the Strait is going to open back up.

The Strait of Hormuz Issue

Both sides want a peace deal. But we both want our own version of a long-term agreement.

We keep hammering this point home. So forgive me for sounding repetitive.

We are still a long way from a real, lasting deal on the Strait of Hormuz and other key disputes. We know Trump wants total freedom of passage, and possibly even a role controlling the chokepoint.

But here’s what that Iranian state media article says regarding Hormuz:

Contrary to some strange claims in the media, Iran does not make any commitment in this text to hand over management or return the Strait of Hormuz to the other side before the US and Israeli military aggression.

The only issue mentioned is the normalization of passage through the Strait of Hormuz in the event of an end to the war, the establishment of maritime security by the coastal countries, the end of the illegal blockade and the removal of threats to the passage of commercial ships by the US and Israel.

So it sounds like if the war does end, Iran is willing to begin normalization of the Strait of Hormuz.

BUT that depends on Iran’s other demands being met. Including sanctions relief, frozen funds being released, and the U.S. leaving bases on Iran’s borders.

That’s a tall order. And I don’t see Trump agreeing to those terms.

Don’t get me wrong, some progress has been made. At least a deal is circulating and going back and forth. But we’re not on the verge of a miraculous resolution.

We remain in a similar situation as last month. Negotiations are ongoing (through proxies, not directly).

Trust is non-existent. And the world’s most important naval chokepoint, Hormuz, remains closed.

We’ll keep a close eye on this situation. If we move back into an escalation phase, it could certainly derail bullish action in stocks. And that remains a real possibility. In time, the Strait remaining closed could crush markets by itself.

In my most optimistic case, I could see Hormuz reopening in a month or so. But that will require compromise from both sides. And until we see otherwise, I’m highly skeptical on that front.

The post Iran: Deal, No Deal, Maybe Deal appeared first on Daily Reckoning.

Writing a newsletter about investing can be exhilarating.

When you’ve been pounding the table on an idea to readers, and it’s working, there’s nothing quite like it.

Helping our readers make money and navigate these crazy markets is our mission. So when we give readers our best ideas, and it goes really well, that’s a fantastic feeling.

And for a while, almost everything we like was going up. Gold, silver, miners, Brazil, oil, rare earths, etc.

We’re still up big on all these assets since we first covered them, but they’re now down significantly from the highs. Which is not nearly as much fun.

However, the decisions we make during these times are critical. Should I try to time the market, buy more, take profits, or just hold?

Here’s how I think about such decisions.

Trading vs. Investing

Whenever I invest in a new asset, I decide whether it’s a short-term trade, or something I plan to hold for a long time.

For me, anything less than a year is a trade. These could last anywhere from a week to 11 months.

With trades, timing is the tricky part. When a trade is working, I will typically scale out of it. Sell half once it’s up a certain amount, then let the rest ride for a while. It depends how durable the thesis is. All the editors here at Paradigm are excellent at this.

Anything longer than a year, I consider an investment. And I always aim to hold investments for a long time. I held Google from just after the IPO for 15 years before selling in 2019 (far too early, in hindsight).

I’ve had a few amazing trades that permanently moved the needle on my portfolio, but most of my biggest wins have been great assets held for a very long time. As Warren Buffett famously said, “When we own outstanding businesses with outstanding managements, our favorite holding period is forever.”

These days, many investors are too heavy on short-term trades and don’t allocate enough of their portfolios to long-term investments. I think it’s important to have a mix of both. Personally, about 80% of my assets are tied up in long-term ideas. The editors here at Paradigm Press also do a nice job providing long-term picks. Many of the positions in our various portfolios have been running for 4+ years, and are doing great. It’s one of the things that sets us apart from other publishers.

In the Daily Reckoning, I try to make it clear when I’m discussing ideas whether it’s an investment or a trade. But if I don’t specify, readers should assume it’s a long-term play.

Theory Meets Reality

When I started going heavy into gold and silver miners in early 2025, from the start it was a long-term investment.

The thesis is pretty simple. The world is in an out-of-control debt spiral. Trade wars, currency wars, and kinetic wars are raging.

Inflation is becoming problematic on a global scale. And the world’s central bankers have finally remembered why they used to love gold.

Precious metals and miners rose much faster than expected. I took a small amount (~15%) of profits once my 1-year mark was up, to take advantage of long-term capital gains. But I’m still holding the vast majority today. Despite this brutal correction.

It might seem crazy to watch silver go from $32 to $115 in less than a year, and not take any profits as it slides back down to $68. But I did, because I believe it’s going to at least $200 over the next 5 years. And maybe higher.

Trying to time such a volatile move is challenging, and usually involves paying taxes, so sometimes the best move is to simply hold.

My plan is to hold long-term, because I believe we’ve entered a very disruptive period where there’s going to be a lot of money printing, and unfortunately, inflation. So I’m sticking to it.

But my investment horizon is long. And I’m OK with volatility. Your situation may be different.

We’re All Unique

Whether you should buy, sell, or hold an asset depends on your unique situation. Here are some of the key factors to consider.

What does your investment horizon (timeline) look like? Are you already retired, or going to be soon? If so, it usually makes sense to take profits earlier.

If you’re on the younger side, and you own great companies, it often makes sense to hold at least a portion of the position for a very long time. Now, with that said, you have to be able to stomach the volatility.

Are you going to panic sell if the asset drops 30%, or possibly more? If so, it’s probably best to lean more towards trading. Eventually, every asset goes through a significant downturn.

Taxes Matter, Too

Another important question: Is the investment in a taxable account, or a 401k or IRA? That matters greatly. If it’s in a tax-sheltered retirement account, you don’t have to worry about the tax implications of every sell order. But sometimes it makes sense to hold long-term anyways, because market timing can be difficult.

Whether your gains are long or short-term also matters greatly. Long-term capital gains (investments held over 1 year, in the U.S.) are taxed at a much lower rate compared to short-term gains).

Short-term capital gains can hurt overall returns if you’re not careful. Assuming it’s in a taxable (non-retirement) account, these taxes can reach up to 54% in extreme cases (California, top tax bracket). Long-term capital gains for the top bracket in California are around 37%. Still high, but much more reasonable.

This is another reason why, whenever possible, we should max out our retirement account savings. IRAs, 401ks, and other tax shelters are amazing tools.

Today’s markets are absolutely crazy. So it’s best to go into such situations with a plan, and stick to it.

We’ll keep delivering our best investment ideas, and provide insight into different ways to manage them.

The post The Mental Rollercoaster appeared first on Daily Reckoning.

For most of its history, the United States treated debt with suspicion, if not outright fear. That instinct came from four men who understood, in ways modern policymakers seem to have forgotten, debt is less an economic tool and more a political weapon.

George Washington, Benjamin Franklin, Thomas Jefferson, and John Adams, America’s founders, architects, and revolutionaries, were students of history. History taught them one simple lesson: nations don’t collapse overnight. They decay under the weight of obligations they can’t control.

Washington warned against entanglements that could drag the young republic into endless commitments. Today, America is entangled in alliances abroad and its balance sheet at home.

Franklin, the pragmatist, understood the corrosive nature of excess. “Rather go to bed without dinner than to rise in debt,” he said. Today, the United States does neither. It spends without restraint and borrows without consequence… for now.

Unlike that statist Alexander Hamilton, Jefferson feared centralized financial power and permanent debt, arguing that each generation should pay its own way. Now, that idea is almost quaint. The current system doesn’t just pass the bill to the next generation; it compounds it.

Adams was blunter still: “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”

We chose the latter.

Now comes the reckoning. Not in soft theory, but hard mathematics.

When Interest Becomes the Budget

Within a few years, interest on the national debt is projected to become the single largest line item in the federal budget — overtaking defense, Medicare, and eventually Social Security, if nothing changes.

This is one obscenely incredible post:

Credit: @charliebilello

The numbers are already brutal. The government paid roughly $882 billion in net interest in fiscal 2024 — nearly triple the $345 billion paid in 2020, and more than it spent on national defense or Medicare. In 2025, that figure climbed again to an estimated $970 billion, or about 19 percent of all federal revenue collected.

Read that again. Nearly 1 in 5 tax dollars now goes just to pay interest. That’s before a single soldier is paid, a single pension check is mailed, or a single road is repaired.

Based on CBO projections, annual interest costs will exceed $1 trillion around 2026 and continue to climb to roughly $1.8 trillion by 2035. Over the next decade, cumulative interest payments will run into the tens of trillions. Over the next 30 years, the U.S. is on track to spend nearly $100 trillion on interest alone if current policies persist.

This is nothing if not a slow-motion transfer of national income from taxpayers to bondholders.

You can see this in the above chart. Net interest costs are rising from a few hundred billion in 2020 to roughly $1 trillion by the mid-2020s, then marching relentlessly toward $1.8 trillion by 2035. It’s not a gentle slope. It’s an accelerating curve.

From Spending Priorities to Interest Tribute

The more alarming story isn’t the nominal dollars. It’s the changing composition of the federal budget itself.

Interest costs have already become the government’s second-largest expenditure, trailing only Social Security and outpacing every other major program. As a share of total federal spending, interest is projected to reach 15–16 percent by the end of this decade — surpassing the prior peaks of the 1990s, but this time on a far larger debt base with far less room to maneuver.

As a share of the economy, interest is heading into uncharted territory. CBO-style projections show net interest rising from just over 3 percent of GDP in the mid-2020s to around 4.5 — 5 percent by the mid-2030s, and higher still beyond that.

The above chart tells this story cleanly: one line shows interest as a share of GDP grinding higher; another shows it climbing through the mid-teens as a share of federal outlays.

At some point, the budget is no longer about national priorities. It’s about servicing past decisions.

That’s the tipping point the four founders would have recognized immediately.

Once interest becomes your largest expense, you’re not governing freely. You’re managing liabilities.

Debt as Stealth Political Control

Every dollar spent on interest is a dollar that cannot go to defense or infrastructure. It’s a transfer from citizens to creditors. Those creditors include foreign governments and large institutional investors whose only concern is that America keeps paying.

To put a finer point on it, let’s look at the numbers for this past May, thanks again to Charlie Bilello:

Credit: @charliebilello

You read that right: $107 billion spent on interest in the month of May 2026, just behind Social Security.

This is where the founders’ warnings stop sounding like philosophical musings and start sounding like a risk memo.

Washington feared entanglements that would limit the republic’s independence of action. A government that must roll over trillions of dollars at ever-higher rates is not fully independent. It’s constrained by what markets will tolerate. One only needs to monitor The Donald’s war-on/war-off policy, which depends only on when the markets are open.

Jefferson’s skepticism of permanent debt was not anti-growth naivety. It was a recognition that a state that lives forever in arrears slowly mortgages its future policy choices.

Adams’ line about conquering a nation by debt rather than by the sword was not hyperbole. It was a description of how power actually operates: not through the now passé direct coercion, but through the more modern means of controlling cash flows.

We’re living in that world now. The U.S. is still nominally sovereign, militarily dominant, and the issuer of the world’s reserve currency. But its fiscal trajectory is increasingly dictated by a simple math problem: how to service a ballooning stock of debt in a world of higher rates.

When interest consumes 15–20% of your budget and a quarter of your revenues, you’re working for your bondholders, not your citizens.

What Happens When the Bill Comes Due

The markets will tolerate this… until they don’t.

There is no precise breakpoint on a chart where confidence disappears. But the mechanisms are familiar:

• Borrowing costs rise as investors demand compensation for fiscal risk.
• The currency weakens as foreigners question its long-term purchasing power and store-of-value status. (Just check out TLT’s dreadful returns since 2020.)
• Policymakers are forced into bad choices: higher taxes, sudden spending cuts, financial repression, or higher inflation.

The CBO’s long-term outlook already assumes that interest rates stay elevated enough to keep interest costs outpacing growth in both revenues and the underlying economy. That’s how you get to projections where interest alone may be the single largest category of federal spending within a decade.

None of this would surprise Washington, Franklin, Jefferson, or Adams. They had all studied what happened to overextended empires like Spain, France, and Britain. Their reach exceeded their revenue. Our Four Fathers understood that debt, if abused, was a slow form of national subjugation.

Unfortunately, their successors (and their voters) ignored them.

Wrap Up

The result is visible now, not in abstract theory, but in the federal budget line where interest is about to eclipse everything else.

The successors systematically dismantled every cultural, political, and fiscal safeguard its four founders had tried to leave in place to stop this from happening.

Debt becomes destiny. And the charts are telling you: destiny is getting closer.

The post Our Four Fathers Were Right appeared first on Daily Reckoning.

Trump has three ways out of the Iran War.

While the choices are all bad for Trump, they are not all bad for the U.S. economy. Some are better than others. Trump’s choice will not only determine the outcome of the war, it will determine the path of the U.S. economy over the year to come.

Choice One is surrender.

Basically, the U.S. would withdraw from the Iran War without having achieved any of its major goals (not that those goals have ever been well articulated by the administration). Iran would still have its highly-enriched uranium (HEU).

The Iranian regime, consisting of the Iran Revolutionary Guard Corps (IRGC) and Supreme Leader Mojtaba Khamenei or a successor, would still be in charge.

The Iranian people would be largely unified behind new leadership who are younger than the leaders Trump killed. This new group, in their 40s instead of their 70s and 80s, would feel more nationalist and more comfortable in power than their predecessors.

Iran would suffer enormous infrastructure damage, but it can repair and replace those assets over time. Most importantly, Iran would have de facto control of the Strait of Hormuz — something it has threatened but never actually accomplished in the 47 years since the Iranian Revolution.

Choice Two is stalemate.

This is basically the current state of the war. Calling it a ceasefire is a joke. Iran recently attacked the Kuwait airport and Israel. The U.S. bombed radar facilities in Iran. Israel struck Iranian energy infrastructure. Hezbollah and Israel continue to fight it out in southern Lebanon.

This is a low-intensity conflict — all sides back off after a few strikes. But it’s not a ceasefire.

The stalemate suits Iran because it gives them time to dig out missile sites, build more drones and receive financial assistance from Russia and China. The stalemate suits the U.S. because it gives us time to rebuild stockpiles of cruise missiles and Patriot anti-missiles.

Most importantly, the stalemate favors Iran because the Strait of Hormuz remains closed. Iran can suffer economic consequences longer than the world can do without Persian Gulf oil, liquid natural gas, helium, nitrates and sulfur. It’s a game of chicken, and the U.S. will swerve first because it has more to lose.

Choice Three is escalation.

The logic is simple. Trump won’t surrender, and the game of chicken can’t go on much longer.

Trump will unleash the U.S. Department of War to bomb Iranian infrastructure, including bridges, railroads, key highways and telecommunications. Bombing may include sites believed to hold the Iranian HEU.

More extreme versions of escalation could include a special operations mission to seize the Iranian HEU or precision bombing aimed at Iran’s oil export facilities on Kharg Island, or even desalination plants. The idea is to bomb Iran into submission and get the deal Trump wants while avoiding the stigma of surrender.

All three choices will fail.

A surrender might be papered over with some kind of memorandum involving an “agreement to agree” in the future, but the world will see it for what it is — just another Iranian stalling tactic that preserves the status quo for Iran and solidifies the rule of a new younger regime.

Iran won’t give Trump the satisfaction of saving face because Iran is winning. Trump won’t accept surrender because of ego and the bad optics. Neither side will accept the deal the other wants. So there will be no deal.

Choice Two will fail because the current stalemate is unsustainable.

The world has been without Persian Gulf oil exports for almost four months. A combination of Gulf oil already underway in tankers before the Strait was closed, some increased production from the U.S. and Russia and a drawdown of strategic reserves by various countries has kept the global industrial economy going.

Those lifelines are running out. There is no more Gulf oil in tankers on their way. Reserves are reaching critically low levels, at which pumps and pipelines begin to break down. The U.S. and Russia can supply some oil to their friends, but there’s not enough to go around.

Time is almost up on the stalemate. Something has to give.

Escalation may be attempted, but it will fail also.

There is no history of a side being bombed into submission without boots on the ground.

Germany tried to bomb Britain into submission during the Battle of Britain, the first major military campaign fought entirely with air forces. It failed. Germany was never able to invade.

The firebombing of Dresden did not defeat the Germans. It took D-Day, the Battle of the Bulge and the Red Army marching on Berlin after destroying Warsaw.

The firebombing of Tokyo, which used napalm on wooden structures, did not defeat the Japanese. The atomic bombs may have ended World War II, but that’s an exception that proves the rule. Is anyone up for using nukes in Iran?

Tokyo after the firebombing raids of March, 1945

Ten years of bombing North Vietnam did not win the war in Vietnam. The U.S. never invaded the North in that war.

In short, bombing doesn’t work without a land invasion.

Invading Iran would be a military undertaking on a massive scale. With 80 million people and a landmass roughly the size of the U.S. east of the Mississippi River, Iran would require perhaps 60 divisions organized into six armies and two Army Groups, backed by air power, naval aviation and submarine-launched missiles.

Anything short of that would risk defeat. You can escalate all you want, but it won’t win the war.

Surrender would be the best result for the U.S. economy.

It would be embarrassing, but not necessarily more embarrassing than the outcomes in Vietnam, Iraq, Ukraine and Afghanistan. Better to cut your losses and live to fight another day.

The Strait of Hormuz would reopen (possibly with tolls paid to Iran as reparations), but the oil would start flowing and oil prices would gradually return to the pre-war $60 per barrel level. The American people might actually be relieved that we got out of the Middle East. They’re more focused on the economy anyway.

A stalemate would be negative for the U.S. economy in the medium term because it would keep oil prices high and disrupt other critical supply chains, including helium for semiconductors, nitrates for fertilizers and sulfur as a precursor chemical for many important industrial processes.

It could lead to a global recession in the second half of 2026 and weigh heavily on stock markets. But because a stalemate is non-sustainable, it could eventually lead to surrender, which would be a much better outcome.

Escalation would produce the worst economic outcome by every measure.

It would offer all of the disruption of a stalemate, but for a longer period, at a higher cost and with no better outcome. If Trump pursued escalation, large parts of the global industrial economy could grind to a halt, putting millions at risk of starvation.

For those reasons, escalation would likely be abandoned in the end, but not before historic damage is done. Escalation could produce a market crash and a new Great Depression.

Our estimate is that the U.S. will pursue the current stalemate for another month and then turn to escalation because of the warmongers in the Republican Party.

The best strategy for investors is to reduce stock exposures, increase holdings of cash and gold and keep your car’s gas tank full. You may need it to flee from social unrest.

The post Trump’s 3 Bad Options in Iran appeared first on Daily Reckoning.

This past Friday was the largest Nasdaq selloff in history (by points).

But Monday was surprisingly calm. Stocks rebounded and traders breathed a sigh of relief.

Then today, chaos returned. At least for a few hours.

As of 2:40pm, the Nasdaq 100 is down 1.2%. At one point it was down a more shocking 3.5%. The S&P 500 is off by less than 1%, but was down 2% around noon. Gold, silver, and miners are down as well.

It was a nasty move at one point, but stocks have regained ground since.

The question is – are we approaching a market top, or is this another fakeout before new all-time highs?

The Guy Who Called Bear

Over the past year, I’ve said we’re likely near a market top a few times. Most recently near the start of the Iran war.

I was wrong. This bull has gored anyone who got in his way.

Eventually we are due for a major pullback, and possibly even a “lost decade”. But we don’t know when the peak will come. Or how much further stocks can run before they collapse from exhaustion.

One thing I can say clearly is that stocks are historically expensive. Priced for perfection. The chart below shows the S&P 500’s CAPE ratio (cyclically-adjusted price-to-earnings). This is a measure of how expensive the S&P is over a 10-year period, adjusted for inflation.

Source: Multpl.com

As you can see, we’ve only been more expensive during the 2000 dotcom bubble peak. According to this metric, anyway. But note how much bigger the 2000 peak was than 1929. Maybe this time will be even bigger. Who knows?

Once a bubble of this magnitude pops, it takes a long time to get back to even. Following the 2000 bubble pop, it took around 13 years for the S&P 500 to fully recover (accounting for both inflation and dividends being reinvested).

Using the same rules, it took the Nasdaq 100 about 18 years to reach its previous highs. That’s a long time to wait.

This is what happens after stocks become extremely overpriced. They underperform for many years to come. And that’s where we are today.

Personally, I’m preparing for the party ending relatively soon. But not by shorting the market. Over the past few years, I’ve been shifting a portion of assets out of broad U.S. stocks and into specific areas which should outperform going forward.

So I’m not saying you should sell everything, or even get rid of all your tech exposure. Or all your U.S. stocks. But if you’ve made good money already, it’d be smart to take some profits and rotate them into less popular (and expensive) assets.

Where to Hide Out

During an actual crash, the only truly “safe” place to hideout may be cash. And there’s nothing wrong with having a decent chunk of cash today. As long as you’re getting a decent yield on it, either from your bank or a money market fund.

U.S. government debt (Treasuries) may work for a while, but for a few reasons, I don’t want too much exposure there for the long-term. However, if you want to earn some yield in a relatively safe way, there are certainly worse options than U.S. Treasury bills and notes.

Even hard assets like gold, miners, and oil can fall during a crash. But these investments should outperform dramatically once the market bottoms out.

We saw this after the 2000 bubble. Gold, silver, and miners soared for more than a decade, outperforming the market hugely. This is why I’m still holding my precious metal investments. And I have cash to buy more if we do see a major selloff.

I continue to hold my emerging market investments, especially Brazil (EWZ). My favorite South American country’s stock market has pulled back, and this is an attractive entry point for long-term investors.

The other area I’m interested in, which we covered yesterday, is beaten-down consumer staples like Campbell’s (CPD). It’s worth noting that as the market sold off today, Campbell’s gained as much as 2.3%. General Mills (GIS) also outperformed.

These stocks have been slashed in half (or more) over the past few years. IF the market reverses, it will be the cheap and hated sectors which are likely to outperform.

With all of that said, I’m not downright bearish. I have a few tiny puts which represent well under 1% of my portfolio. This is still a market that could absolutely “rip faces off” bears, as they say.

I prefer to buy assets that have significant upside, limited downside, and the ability to withstand crashes better than the hot stocks.

The SpaceX Complication

This is one of the most important weeks in market history. The biggest IPO in history, by far, goes live on Friday.

If the market continues to sell off, chances of a failure to launch (pun intended) rise. If we rebound and the IPO soars, that will likely set a positive tone for the market for at least another few weeks.

I don’t pretend to know for sure what’s going to happen. But the market (once again) feels toppy. If the SpaceX IPO doesn’t perform well, it would set a rather negative tone for the market going forward.

Then again, if SpaceX soars 30% on day one, there will be even more liquidity and profits sloshing around. I hate to be so ambivalent, but this one could truly go either way.

The Iran Situation

Just after noon today, President Trump posted the following message on Truth Social.

So on top of everything else, a deal to re-open the Strait of Hormuz remains highly unlikely anytime soon.

There’s an increasing risk we return to all-out war. This remains a major risk to markets. One that has been ignored so far.

For the past few months, we’ve been running on optimism, hope, and rainbows. Not the cold hard reality of draining oil inventories and reserves, while hitting consumers’ wallets hard with higher prices.

If the war starts back up in earnest, and oil infrastructure once again becomes a target, oil prices would soar and markets would (probably) crash. But who knows, this market is a bit manic. So maybe we’ll recover just fine, and keep running to new all-time highs. Despite the wall of worry.

Tomorrow we have a special Daily Reckoning by Jim Rickards dedicated to the Iran situation. It’s going to be a good one. Nobody has called this conflict better than Jim so far. So look for that in your inbox at 6:00pm ET.

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We’ll begin with SpaceX. Then, we’ll switch gears for a quick look at what’s happening with markets, especially metals and miners. And yes, the two broad themes are connected.

I’ll set the stage by noting that next month, on Sunday, July 20^th, Shark Week kicks off for its 37^th year on Discovery Channel. To which you may be thinking, “Huh?”

Yes, bear with me; read on…

If You’re Not a SpaceX Insider, You’re on the Outside

I mention Shark Week, above, only because we may as well call this week “SpaceX Week.”

This Friday, June 12^th, Space Exploration Tech Group, aka SpaceX (SPCX) will launch its initial public offering (IPO). And it’s a Really Big Thing across the markets. There’s massive interest out there…

But the truth is, SpaceX will only “sort of” go public. The company will release less than 5% of its shares. Which is to say that over 95% of shares will remain locked up with Elon Musk, his management team, employees, and other well-connected insiders.

This limited release of shares is designed to support what’s called a “monetization” event, and in this case it’s a market cap of about $1.8 trillion, or the ballpark equivalent of the GDP of, say, Turkey or South Korea. It sets a new record as the biggest IPO in history.

There’s much to say about SpaceX, and if you’re interested, I discussed this earlier today in the Rude Awakening.

I pointed out that SpaceX is already a massive industrial ecosystem within the space, aerospace and related tech sectors. To use a term of astrophysics, it’s a “gravity well” for talent and money. And no doubt, the company’s IPO will affect markets everywhere, both within the space sector and with much else that’s space-adjacent, and even distant from space.

For example, many index funds have already sold or will soon sell assets to raise significant cash. No doubt, they’ll chase SpaceX shares, bid up the price, and just buy-buy-buy out of a perceived need to own this new shiny thing.

Likewise, many retail investors want a piece of the action and will buy no matter what. And SpaceX insiders know this, so they’ve reserved a portion of the IPO for retail. Right away, this is unusual because big IPOs are usually parceled out to institutions and favored customers, while everyday punters must buy in the secondary market at higher prices.

Sure, we might see a strong rise for SpaceX shares in the early days after the IPO. But when you consider all the glitz, glitter, hype and utter $$-size of the event, whatever happens will not be true “price discovery.” No, it’ll be hot money blowing in like rocket exhaust, and momentum chasing momentum. In other words, SpaceX IPO stock is a high-risk play.

Here at Paradigm Press, several editors have followed SpaceX over the years. They studied the recent prospectus. And it’s fair to say that they urge outsiders to steer clear of the IPO.

In particular, our AI authority James Altucher; our macro maven Jim Rickards; our trading pro Enrique Abeyta are all on the same page with this one: don’t chase SpaceX as it blows the hold-down bolts and lifts off from the IPO launch pad.

Still, whatever our editors say, we understand that many investors are primed to grab SpaceX shares, if for no other reason than to “be there,” if not to trade in and trade out. And okay, some people might even make money; but again, keep in mind the risk.

If nothing else, just understand that big money guys and trading pros have inherent advantages with this IPO, let alone the SpaceX insiders. And if you’re not on the inside, you’re outside.

The New Space Economy

That said, there are other ways to participate in the market boom for the new space economy. Because, yes, costs to access space have fallen dramatically, and more and more “mass” is going into orbit: big satellites of course, but also literally tens of thousands of small satellites that perform a vast range of missions.

There are fortunes to be made in the heavens above. And along these lines, if you don’t want to play in the sandbox with SpaceX, you can buy other publicly traded companies that are its suppliers, or that work on space exploration and telecommunications on their own.

Two companies that come to mind are AST SpaceMobile (ASTS) and Intuitive Machines (LUNR). But note: these names are from independent sources and are not necessarily official recommendations from our publications. As always, if you buy shares in anything, read up first, and then watch the charts, wait for down days in the markets, always use limit orders, and never chase momentum.

And I can think of at least ten other publicly traded companies that offer a close fit to SpaceX, either as competitors, key vendors or other participants related to SpaceX’s core businesses.

Last Week’s Market Swoon

Meanwhile, for all the SpaceX excitement and Big Money in play, last Friday we had a serious down-day in markets (speaking of gravity wells). That is, on Friday, June 5^th pretty much everything dropped.

Big losers included many recent big gainers, for example memory chips and AI. Of course, those sectors have had massive runups this year, courtesy of hyped narratives about what AI can or will do, as well as an ocean of hot money, which tends to be fickle.

The sell-down was rooted in a few basic reasons. We had a robust national “jobs report” that showed stronger-than-expected hiring gains. To some, this indicates that the Federal Reserve might actually raise interest rates under the new Chairman. But really… C’mon, man…

No, the Fed won’t raise rates this summer, not as we move towards mid-term elections. And the federal government is already paying over a trillion dollars per year of interest on the national debt, so raising rates will just drain the Treasury.

Then again, strong job growth may indicate that the Fed won’t lower rates anytime soon, which is not what the broad market wanted to hear. Indeed, investor sentiment this year has leaned into the expectation of rate cuts; hence markets were primed for that kind of easy-money news. But the strong job numbers changed the narrative.

One example of risk-off sentiment out there comes from Bank of America, which now recommends that investors “exercise caution” with U.S. stocks due to an increasing number of “bear market signposts.” According to B-of-A Securities, we’re “approaching a top” and there are “too many red flags.”

So, “take profits,” says B-of-A, because according to the firm’s metrics, “70% of bear-market signals” have recently been triggered, which has marked numerous prior market peaks.

Closer to my own wheelhouse, Friday’s sell-down hit mining plays quite hard. Big names, intermediates and a long list of superb juniors sold down in the realm of rocks, mines, minerals and metals.

Well, between Friday morning and Friday at close of markets, nothing changed with any mining play. It’s all the same people, same assets, same geology and engineering, same exploration and development plans, same kind of production profiles. And developing an exploration play or building a mine is still a long-term effort, while production is forecasted months and years ahead as well. So… It’s a bargain-hunter’s market just now, with all the usual caveats about care and moderation.

More specifically, with $4,300 gold and $65 silver – and solid prices for most of the rest of the periodic table – we’re still looking at what were record highs as recently as February of this year. And many of the recent high levels of share prices for miners were yearly highs as well. For many producers, earnings are strong, if not growing.

But yes, last week blew off the top, and Friday’s charts were bright red on the daily trackers. Now, for the long-term? Miners and metals have done well, with more to come after market sentiment recalibrates. The fact is there’s not enough copper out there. Or aluminum. Or silver, gold, zinc, lead, tin, bismuth, rare earths, and a host of other metals and materials.

Which brings us back to Elon Musk and SpaceX, if not the entire solar system of companies in the new space economy. That is, if the idea is to put “mass” into orbit and make money out of it, everyone will require the usual, familiar metals and alloys, plus other quite exotic materials. And the geological fact is that everything begins as a rock in the ground.

In fact, last week in Philadelphia, at Paradigm’s “76/26 – America 250” event, my colleagues and I discussed metals for both normal economic use and in the new space economy. Between five editors, we laid out 53 names of strong companies across the boards, including many mining names.

As we look ahead, people will still make money from rocks in the earth, as well as from rockets and satellites up in the heavens. Which prompts me to ask… Did you tune into that event last Thursday, June 4^th? If you missed the broadcast, here’s the replay.

And there’s always more to say but that’s all for now. Thank you for subscribing and reading.

The post Fortunes from Heaven and Earth appeared first on Daily Reckoning.

Friday was a nasty trading session.

Almost everything was down. A sea of red.

But there was one little green spot on my watchlist. Like a tiny seedling after a forest fire.

It was Campbell’s (CPB). You know, the soup, food, and snacks company.

I’ve been investigating beaten-down consumer staples stocks, like Campbell’s, for a few weeks now.

And over the past week, I did deep dives on General Mills (GIS) and Campbell’s, and decided the latter is more attractive.

Campbell’s owns a bunch of popular food brands:

Today, let’s dig into why Campbell’s is a fascinating stock here.

Real Value, or Value Trap?

At a glance, Campbell’s is dirt cheap. It’s trading at about 9x next year’s earnings. The dividend yield is a juicy 7.2%.

CPB is trading at an extremely cheap price-to-sales ratio of just 0.65x.

But the company just reported earnings, and revenue is down 4% from last year. Additionally, CPB has a lot of debt at $6.9 billion.

Campbell’s is still making a solid profit, but with sales slowing down, investors have trashed the stock. Shares are down 37% over the past year, and 56% over the past 5.

One primary threat to these companies is the rise of GLP-1 drugs like Ozempic and Wegovy.

The Ozempic (GLP-1) Threat

This new GLP-1 class of drug is revolutionizing treatment for diabetes and obesity.

Currently, around 12% of Americans are taking one of these new prescription drugs. That is remarkably fast adoption.

This has been a good thing for many Americans. But it’s been brutal for U.S. food companies. People are eating less overall, and not snacking nearly as much.

This is one of the most interesting negative catalysts I’ve seen hit a whole sector before. It’s like a tidal wave hitting the restaurant and food industry. Whether it will last or not remains to be seen.

But for now, companies like Campbell’s and General Mills have taken a big hit.

Private Labels = Trouble

Another big threat to companies like Campbell’s is the rise of “private label” brands. Most grocery stores have their own competing brands these days.

Costco’s Kirkland has been especially tough to compete with. They see what’s working in Costco, then launch a competing product.

In cases where private labels can get the quality close to leaders, it can be difficult for national brands like Campbell’s to compete.

Combined with the rise of GLP-1s, this makes for a tough environment for classic consumer staples stocks.

The Turnaround Plan

Campbell’s does have a turnaround plan. And much of it depends on an acquisition the company made back in 2023, when they purchased Sovos Brands, parent company of popular Italian food brand Rao’s.

Source: The Campbell’s Company

Campbell’s paid $2.7 billion for Sovos Brands. The market apparently thought that was too rich of a price, and has punished CPB ever since.

Since that acquisition, Campbell’s shares are down almost 50%.

But the silver lining is that Rao’s is the primary driver of growth at Campbell’s today. The company’s flagship pasta sauce is a premium offering that sells for around $8 a jar, but it’s got a cult-like following. And they’ve expanded into frozen foods, pasta, pizza, soups, and more.

Rao’s has built an incredible brand, and it’s really the primary reason I’m interested in Campbell’s. Sure, having Pepperidge Farm and Goldfish is great, but in today’s environment, they’re just struggling to hold onto their market share. Rao’s is still brimming with upside potential.

Elsewhere, Campbell’s is attempting to adjust to changing consumer habits. In chips and other snacks, they’re replacing soybean and cottonseed oil with healthier options like avocado oil. The public is turning against “seed oils”, especially soybean and canola. For decades these oils were sold as “heart healthy” and used in margarines, snacks, and meals. But now research is showing these cheap oils are essentially industrial-grade lubricant.

Is CPB a Buy?

I haven’t made a decision whether to buy Campbell’s yet. But watching this stock get crushed as the market soars brings out my contrarian instincts.

A 7% dividend is juicy enough to get my attention. The dividend looks safe over the short-term, but could get cut if the company’s turnaround efforts fail.

Campbell’s is the kind of cheap stock that could do relatively well if we get a broad market selloff. It’s already been beaten into the dirt, offers a nice dividend, and its products should hold up fairly well in a downturn.

However, the threats to the company are real:

• GLP-1 drugs like Ozempic
• Private label brands like Costco’s Kirkland
• Changing consumer habits

The stock may yet have further to fall. We’ll keep an eye on it and let you know if we see any great entry points.

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The SpaceX IPO next week is going to be nuts.

It’ll be a bit like the Superbowl for investors, on steroids. But bigger.

The valuation (market cap) of SpaceX at IPO is expected to be around $1.75 trillion.

I remember when Facebook went public at $104 billion and thinking that was crazy. SpaceX is going to be almost 17 times larger.

Today, let’s go through the SpaceX math and try to figure out if this stock is a buy.

A Hefty Price

$1.75 trillion is such a large number, it’s hard to wrap one’s head around it.

To understand the scale, here’s a simple framework. One million seconds is 11.5 days. One billion seconds is 31.7 years. One trillion seconds is 31,688 years.

An IPO of this size has never happened. Nothing else comes close.

So what are investors getting for this price?

In 2024, SpaceX made a profit of $791 million. In 2025, it lost $4.94 billion. In the first quarter of 2026 alone, it lost another $4.28 billion.

SpaceX has a highly profitable space launch business, and Starlink. So what happened? The company merged with X (formerly Twitter) and xAI, Elon’s social media and AI firms.

And as we all know, AI is a highly expensive business. GPUs and data centers aren’t cheap, and Elon’s company has rapidly built some of the largest AI compute clusters in the world.

The company’s Colossus data center clusters operate around 230,000 high-end Nvidia GPUs. The best AI hardware on the planet, at a scale that essentially nobody else has.

And xAI will soon start monetizing this asset at scale. They signed a deal with Anthropic, maker of the famous Claude AI models, which will reportedly generate about $1.25 billion in revenue per month.

That should get them close to breakeven by itself. And there’s a good chance that Elon’s proprietary AI model, Grok, will eventually catch up with ChatGPT and Claude in terms of capability.

Still, AI is an extremely competitive business. And believe it or not, SpaceX is mostly an AI company.

Sure, there’s a great space launch business, and the Starlink satellite communication network, which is still growing at 100% year-over-year. In 2025, Starlink produced $11.6 billion of revenue. That’s going to be a very nice business.

But much of the risk (and upside) in this stock comes from the AI side of the business. The company is investing massively in data centers and to build Grok, their proprietary AI model.

The Elon Premium

Elon Musk is the greatest American entrepreneur of the century. Paypal, Tesla, SpaceX, the Boring Company. It’s quite a track record.

Tesla has created thousands of millionaires. And that stock isn’t exactly cheap either. The chart below shows the P/E ratios of the “Magnificent 7” tech stocks. Note how much more expensive Tesla is than everyone else.

People have been calling Tesla overvalued for many years, and it has simply maintained a premium price. Elon’s die-hard fans are convinced he’s going to win self-driving cars, and humanoid robotics. And those are both going to be massive markets. This is the Elon premium.

So it’s entirely possible that SpaceX starts out expensive, and simply maintains its valuation. Or even jumps higher.

But personally, I’m not buying the IPO. It’s too expensive for my taste. Based on 2025 revenue of $18.7 billion, it will debut at a rather expensive 94x sales (revenue). That’s… generous.

But hey, I’ve had the opportunity to buy SpaceX in private markets since it was around $100 billion, and I never pulled the trigger. It always seemed too expensive. Clearly, that was a mistake.

The core space launch business is fantastic. Starlink is amazing. And AI has massive potential.

If Grok becomes competitive with ChatGPT and Claude (the top 2 AI models), it could certainly justify the price. The parent companies of those two models (OpenAI and Anthropic) are both valued around $900 billion. And they don’t have a space business to go along with it.

The Elon premium is very real, and perhaps it can even support this massive valuation. However, I do worry about what would happen to SpaceX if we get a market crash. Even Elon’s giant cult of personality may not be able to maintain such a lofty price if the market tumbles.

For me, however, SpaceX is simply too expensive. So I’m steering clear. We’ll know next week whether that was a mistake or not.

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All eyes are on oil thanks to the war in Iran. It gets all the headlines.

Talking heads debate shortages and supplies. But out of the spotlight, copper is ripping higher. It’s near an all-time high now:

This isn’t a new story. It’s the reason I jumped at the chance to run a junior copper explorer back in 2022. I knew that a copper bull market was coming. I was too early. But as an investor, the timing is perfect.

Some folks look at the chart and thing, “I missed it.” But here’s an example of what happened during the last copper bull market:

We used Freeport McMoRan (FCX) as a proxy for the major copper producers at the time. Coming out of the crash, Freeport’s shares ran 400% from January 2009 to January 2011. The price of copper exploded 225% higher.

Now compare that to the last two years:

As we can see here, Freeport’s shares didn’t start to rally until April 2025. Since then, they rose about 130%…well below the performance from 2009. And copper prices are only up about 45%…

That leaves us plenty of room for bigger gains.

And even if the copper prices stop rising for now, copper producers are about to generate massive cash flows. This will be the start of a massive round of consolidation, exploration, and development.

And it won’t be enough.

It takes nearly two decades to take a copper discovery to production. And thanks to nearly a decade of under investment from 2012 to 2023, there have been far too few new discoveries.

According to the analysts at S&P Global, new discoveries fell 90% since 1990. Since 2021, only six discoveries meet the “major discovery” criteria. And all the new production scheduled to come online between now and 2030 will only cover about 80% of expected demand.

That math is impossible to argue. We need copper to live a modern life. If you want the lights to come on when you flip the switch…you need copper. If you want to use ChatGPT or any other AI for that matter, you need more copper.

It doesn’t all have to be new, though. Recycling will add some back into the system. But you can’t recycle enough to meet the projected demand.

That means the price of copper must go up. And as we saw from the chart above, that’s already underway. However, the earnings growth hasn’t been priced in yet.

That’s why we want to buy now, even though these stock prices appreciated significantly. There are a couple of ways to own these stocks. For generalists who want some exposure to quality miners, the Sprott Copper Miners ETF (Nasdaq: COPP) is perfect.

COPP holds a basket of the world’s largest miners (percentages are estimates):

• Freeport McMoRan (26%)
• Teck Resources (11%)
• Antofogasta (9%)
• Hudbay Minerals (5.5%)
• KGHM Polska Miedz (5.5%)
• Lunding Mining (5.3%)
• Southern Copper (4.7%)

These are giant copper producers that will absolutely benefit from the rising copper price. However, for investors with more risk tolerance, there’s the Sprott Junior Copper Miners ETF (Nasdaq: COPJ). This holds the smaller, “up and coming” copper companies:

• Arizona Sonoran (6.3%)
• Faraday Copper (5.9%)
• Taseko Mines (5.2%)
• Firefly Metals (4.8%)
• Solaris Resources (4.7%)
• Minsur (4.6%)
• Osisko Metals (4.4%)
• ERO Copper (4.3%)

As you can see, there are much smaller portfolio memberships, which gives them more members. The exposure to these smaller companies gives them more opportunities to benefit from both production and discovery. Higher risk, but potentially higher reward as well.

These funds did well over the past year, but they have room to move. So, if you don’t have exposure to copper yet, you should get some now. Because, while oil gets all the headlines, copper is about to explode.

The post Don’t Buy Oil, Buy this Critical Commodity Instead appeared first on Daily Reckoning.