Tea and Crumpets

Tea and Crumpets is Formidable Asset Management's biweekly podcast that features Formidable's Managing Partner and CEO, Will Brown, and Chief Investment Officer, Adam Eagleston, CFA, talking directly about current events in relation to their expertise and business in a conversational manner.

Black Eye 06/17/2025

Black Eye In the first half, we examine the (rumored) literal fisticuffs in D.C., and the implications of the proposed “Big, Beautiful Bill” on taxes, spending, the deficit, interest rates, and the dollar. We discuss the timing of tax cuts versus spending cuts, especially in light of the employment data we have seen since 2022, wherein: Private sector job growth -> a little over 1% cumulatively. Public sector job growth -> over 7% cumulatively. In the second half, we discuss the market’s rapid rebound from its April nadir and juxtapose returns (and valuations) for different parts of the equity market. Is it finally time for diversification to help after a 15-year run for the U.S.? U.S. large caps +3% YTD U.S. small caps -2% YTD Developed non-U.S. +17% YTD Emerging markets +11% YTD While the collapse in the volatility index and the huge rally from the lows normally portend further gains, valuations for the S&P 500 are historically high on any number of measures. While the so-called Magnificent Seven are more elevated, the other 493 are also expensive, and have grown earnings a lot more slowly than the tech titans. Contrary to our forecast entering 2025, fewer than one in three stocks are outperforming this year, putting a premium on stock selection. While multiples are high, we think active managers willing to go further afield can find values. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/37028065

The Swamp Always Wins 05/15/2025

The Swamp Always Wins In this episode, we have a no-holds-barred conversation featuring Kalee Kreider, a seasoned political strategist and expert in climate policy. Together, we dig into the uncomfortable truths about markets, politics, and the economic pressures facing everyday Americans. From election forecasts and the appeal of government gridlock to the harsh realities of student debt, the conversation is unscripted, unfiltered, and unexpectedly funny. We explore why investors often prefer a slow-moving Congress, how middle-income families are still reeling from financial burdens nobody talks about, and why economic narratives need more honesty and a lot less spin. What You’ll Learn: Why political gridlock can actually calm the markets The ongoing impact of student debt on families earning six figures What’s really driving midterm election outcomes—and what to expect next How public perception influences both policy and portfolio performance Why clarity in communication is just as valuable as a solid balance sheet Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/36572955

Face Off 04/30/2025

Face Off In the first half, we discuss the showdown between the U.S. and China on tariffs. While the headlines have been stolen by who is calling whom first, we look into the effect the tariffs are already having on container ship volumes, and what implications that has for the rest of the supply chain, and the economy. Tariffs are just starting to hit consumers as they look to buy online, with the tariff exceeding the purchase price in some cases. While there is optimism over a resolution, historically trade agreements have involved lengthy negotiations, and we are weeks away from the initial impact of being felt, making this akin to a slow moving shipwreck. We also discuss the impact of student loan payments turning back on after years of forbearance. In the second half, we discuss the rebound in U.S. equities, which are anticipating a quick and painless resolution to the trade war, along with three or four cuts by the Federal Reserve during the rest of this year. In our opinion, that number of cuts would only occur if we saw the onset of a recession, which has significant market implications. Since World War II, the average recession sees gross domestic product (GDP) decline 2.3%. The average earnings decline for the S&P 500 is 11% during a recession However, around 1/3 of the time, earnings decline 5% or less. Many market strategists are celebrating the recent equity rebound, which has been broad based and triggered a number of positive market breadth signals. While these are normally positive portents, valuation is not part of the calculation, and any disappointment in terms of the current earnings estimates leaves little room for error, making us mindful of seeking opportunities outside of the index, which continues to be dominated by a handful of stocks. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/36363715

Winging It 04/16/2025

Winging It In the first half, we discuss Liberation Day, the violent reaction of, initially, the stock market and, subsequently, the bond market. In terms of the bond market, we look at the frantic trading from last week that ultimately forced the administration to announce a 90-day pause on most tariffs. Who holds U.S. debt? The answer might surprise you: Total debt - $34 trillion Domestic holders - $26 trillion Japan - $1.1 trillion China - $820 billion (though may be understated as offshore entities, i.e., other countries, are likely being used as well) Other countries - $5.3 trillion In the second half, we discuss the volatile reaction of equities to headlines. Post-Liberation Day, over a 10% decline in two days. The third largest daily gain ever for the S&P 500 on April 9th (when the 90-day pause was announced). While many pundits cite such a large up day as being a portent of further gains, which is true historically, we put it in context of valuation, and the 20.7x P/E the market currently has is well above the 12.7x multiple the market had on average after other large gains. Similarly, we look at expectations for earnings, what we have heard so far (JP Morgan noted deteriorating credit trends while Wells cited resilient spending), and what we think we might hear from companies as earnings season gets into full swing (hint: prepare for the word “uncertainty” to be a common refrain). Finally, we discuss the administration’s stated objectives of bringing back manufacturing and reducing trade deficits. What is not often mentioned is that this approach overlooks service surpluses, and is causing a sharp decline in foreign tourism, which may jeopardize these surpluses. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/36182755

Liberation Day 04/02/2025

Liberation Day In the first half, we discuss the imminent arrival of “Liberation Day”, and why uncertainty over tariffs is causing consternation to consumer, business, and investor confidence. We look at the most recent inflation data from the government and examine the widely divergent inflation expectations based on political affiliation. We also tie this to the likelihood of further rate cuts and the necessity to drive rates lower as sizable government debt is due to be refinanced in 2025. In the second half, we (finally) discuss what has been a challenging quarter for stocks, especially the Magnificent Seven: In the aggregate, the Mag Seven are in a bear market (down 20%). The S&P 500 is down 5% YTD and 10% below its all-time high, led lower by the Mag Seven. The average stock in the NASDAQ is 35% below its high. The path forward for the market depends on the impact of tariffs and spending cuts, both of which are likely headwinds in the near term. With both valuations and earnings expectations still elevated, there remains downside in the event of either an economic or earnings recession. However, value stocks have performed well year-to-date, as have non-U.S. stocks, which are garnering attention as a result of changing U.S. trade and foreign policy. In other words, diversification has (finally) been helping. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/35962970

Canadian, Judge, and Jury 03/20/2025

Canadian, Judge, and Jury In the first half, Will and Adam discuss the rapid deterioration in consumer sentiment and how it is cutting across both economic and political divides, albeit to differing degrees. Some sentiment indicators, especially concerns over job loss, are at levels normally seen during a recession, in part due to the uncertainty over tariffs with large trading partners like Canada. Another concern is spending cuts. We look past the headlines to see that cuts have not yet taken hold, though with 85% of job growth in 2024 attributable to government spending, we could be in for a volatile transition period as a result of the “detox” the administration is seeking. In the second half, we look at the recent (albeit brief) market correction, and put it in historical context: Since 1980, the average yearly decline for the S&P 500 has been 14%. There have been about 117 10% corrections since 1928, so around one per year. Statistically, a 10% correction turns into a bear market around 25% of the time, and that normally occurs when the economy dips into a recession. The rest of the time, the market recovers in about eight months, on average. Although modest, the 10% correction is equivalent to 12% of GDP. That type of hit to wealth has contributed to a recession in about half of the prior 12 occurrences. With the Magnificent Seven, on balance, lagging this year, we look at the prospect of a broader market showing the benefits of diversification, not to mention the strong start to the year for non-U.S. stocks, which have been buoyed by the shift in spending priorities in both developed and emerging markets. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/35783885

The Rest is Geography 02/28/2025

The Rest is Geography With headlines versus earnings moving markets, we look at the perceptions and realities influencing investors (and speculators). In the first half, we discuss the sharp decline in consumer confidence and spike in inflation expectations, both of which represent challenges to continued equity market strength. We also look at how the bond market (and the Federal Reserve) are responding, and how the continued on again/off again/on again tariff headlines are causing consternation to consumers and investors. In the second half, we delve into the perception versus reality of government efforts to cut waste and if that is enough to reduce the deficit enough to achieve the administration’s goal of a lower yield on longer term Treasuries. We also look into the effects of wealth and spending inequality on the economy. There is also a continued discussion of the effect of passive fund flows and levered ETFs on some of the markets biggest names, and how those are widening the dispersion between stock indices versus the average stock; to wit: The NASDAQ is only 5% from its year-to-date high, while the average NASDAQ stock is 25% from its high. Only 22% of stocks in the S&P 500 outperformed the index over the past 12 months. After six of the so-called Magnificent Seven outperformed in 2024, only one is ahead of the S&P 500 so far this year. We close with our thoughts on where we are seeing positives and why, eventually, fundamentals may matter more than headlines. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/35475530

Trump Tariff Tourette’s Threats 02/05/2025

Trump Tariff Tourette’s Threats With tariffs in the news, we sift through the torrent of headlines coming from both sides of the border and beyond. In the first half, we look at the breaking news on tariffs, with an 11th hour agreement with Mexico giving a pause to the proposed 25% duty on imports. We also look at why Canada may be more reticent to strike a deal, and what the bigger objectives may be. Is it all about oil and inflation, or are we looking at a 21st century version of the Monroe Doctrine aimed at China? We also break down how the Fed is assessing the situation. In the second half, we finally get to the stock market. We look at the effect of Deep Seek news coming out of China on AI stocks, and whether it represents a opportunity or a threat for the sector. We also recap the first big week of technology earnings: Four of the Magnificent Seven reported. While the initial reaction was positive for three of the four, only one has held onto its gains. We close with our thoughts on where we are in the economic (and market) cycle, and where we are looking for opportunities. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/35153875

I Can Hear You Clowns 01/15/2025

I Can Hear You Clowns After a holiday hiatus, we welcome 2025 with a look at what worked in 2024 and what that may mean for this year. One thing that did not work: forecasts. The Fed cut rates fewer times than predicted, and we discuss the recent pivot toward a more hawkish tone, which is part of the reason for the increase in yields on longer bonds. Those higher yields are stressing consumers and businesses, not to mention grinding mortgage activity to a halt. We look at the implications of higher rates and compare some of the small business stress we are seeing in our community versus the strong jobs data being reported, which is influencing the Fed’s outlook for rate cuts. In the second half, we discuss stock returns in 2024, which were biased upward by a handful of stocks in one (well, two, as defined by the S&P committee) sectors. We compare the level of index concentration, valuation, and performance dispersion versus history and find the clearest parallel with 1998 and 1999. After that period, we saw the following pattern emerge: The average stock beat the index each of the next six years. Value stocks beat growth stocks each of the next seven years. We close with our thoughts on why that could be replicated again, specifically given the implications of likely Trump administration policy on merger and acquisition activity, which is off to a strong start. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/34862525

Defiling Gravity 12/18/2024

Defiling Gravity We take a wicked look upward, where both unidentified drones and market valuations reside. We also discuss the upcoming Fed meeting, investor sentiment, and the outlook for corporate margins (and employment) as AI gains greater adoption. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/34490820

Gamma Claus is Coming to Town 11/27/2024

Gamma Claus is Coming to Town We discuss the recent mania around levered ETFs and the market mechanics that make these so volatile. We also take our first look at investor response to Trump’s win and what we think some of the over (and under) reactions have been so far, and what the true implications of changes in fiscal and regulatory policy may mean. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/34163990

Undecided Boaters 10/28/2024

Undecided Boaters This week, Will and Adam discuss how markets typically respond to the election cycle, and the importance of staying committed to the long-term view when it comes to investing. We also do a deep, some may say submarine, dive on the phenomenon causing some of the extreme weather we are seeing, and compare this type of explosion and its effects to how the explosion of post-Covid stimulus has affected inflation, stocks, and bonds. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/33620742

Not Chicken Anymore 10/08/2024

Not Chicken Anymore We recap the historically strong year-to-date performance of equities and compare Q3 versus the first half of the year. We also delve into the potential market implications of the upcoming presidential elections as well as the ongoing (and escalating) conflict in the Middle East. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/33361687

Podcast or podcats? 09/17/2024

Podcast or podcats? Special guest Kalee Kreider joins us to discuss the recent presidential debate, its impact on the November election, and all things political. We also explore the impact of broad trends like inflation and AI on the election, the economy, and markets. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/33085777

We Need These Jobs 08/27/2024

We Need These Jobs Will and Adam discuss the large downward revision in job creation and analyze its causes and implications. With the Fed meeting in Jackson Hole, they review its current stance on interest rates versus market expectations, as well as the divergent paths the market has historically taken around rate cutting cycles. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/32749402

Hiatus Over 08/12/2024

Hiatus Over Will and Adam return to provide insight on recent market tumult. We look at the causes (recession concerns, Japanese bank policy) and the effects (sharp decline, quick rebound, spike in volatility). We compare what is normal about today’s environment versus the anomalies that cause us some concern. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/32532697

Happy Birthday 07/03/2024

Happy Birthday We wish Formidable a happy 11th birthday, though the more eccentric among us may say “get well soon”, instead. Regardless, we look back on our approach to college planning and the merits of trade schools in the era of AI. We also examine AI’s broader implications for inflation, wages, and stocks, both those that area direct beneficiaries (like the Magnificent Seven) and those that have, so far, been left behind from a performance perspective, where we see opportunity. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/31983022

Saul Grippo 05/24/2024

Saul Grippo Will and Adam review the new Bearcats flavored Grippo chips, and compare them to the Fed’s approach on inflation. We take a look at what the lack of movement in oil prices is telling us about inflation and the economy, and how higher interest rates are (or, more accurately, are not) constricting some measures of financial conditions. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/31444192

There’s No Way Wainscott Will Approve This Title 04/22/2024

There’s No Way Wainscott Will Approve This Title We discuss the fluid situation in the Middle East, its impact on oil, and, ultimately, its importance as a key stumbling block on the Fed’s path to 2% inflation. The changing expectations regarding Fed rate cuts and how those should (theoretically) affect valuations for stocks are also key topics, as are some of the recent divergences in the historical relationships between things like gold and real rates. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/30908628

Top Men 03/28/2024

Top Men Will and Adam discuss the potential for broader equity market participation, as well as the strange dynamics affecting the smaller cap indices. We also deconstruct the latest Fed minutes, and what the Fed’s changing stance on inflation may mean for interest rates, stocks, risk, and housing. Finally, we explore whether one can forge their own signature, if plant-based mashed potatoes is redundant, and the merits of Kenny Rogers’ “good food quickly” approach to chicken. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/30564068

Mugabe Shack 03/12/2024

Mugabe Shack In episode 66, Will and Adam discuss the Fed’s shifting stance on its inflation target and the implications for consumers and markets. We also examine the diverging fortunes of the Magnificent Seven and compare today’s market conditions with those of the early 2022 peak as well as the 2000 peak. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/30325068

I Choo-Choo-Choose You 02/20/2024

I Choo-Choo-Choose You We welcome back special guest Kalee Kreider, president of Ridgely Walsh and former communications director for Vice President Al Gore. With November fast approaching, we get her take on the candidates, what states might determine the outcome, and why “double haters” may be the deciding factor. We also evaluate the implications of the outcome in terms of both foreign and domestic policy. Finally, we take a look at a few under-the-radar Supreme Court cases with significant implications for the functioning of the Federal bureaucracy in 2024 and beyond. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/29996828

Top Hats and Hash Browns 02/10/2024

Top Hats and Hash Browns In episode 64, Will and Adam discuss the winnowing of the Magnificent Seven to somewhere between three and four, and the exorbitant valuations on the shrinking number of winners. We also look at the conundrum faced by businesses dealing with pushback from consumers on rising prices while at the same time increasing demands (not to mention government mandates) on wages. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/29880393

Nvidiots 01/24/2024

Nvidiots Will and Adam return from a hiatus with the S&P 500 at an all-time high. They recap what drove returns in 2023 (index flows, zero-day options, the Magnificent Seven) and what expectations are baked into valuations at current levels (above-average earnings growth and six Fed rate cuts). They also juxtapose the divergent growth expectations the low price of oil seems to be indicating in spite of elevated geopolitical tensions. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/29621908

Passive Observer 11/22/2023

Passive Observer We revisit the risks associated with passive investing as the Magnificent Seven stocks become even more unmoored from the rest of the S&P 500. We also analyze the likelihood of the Fed engineering a soft landing, why the market may have celebrated a win on inflation too early, and how we are trying to navigate through this challenging environment. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/28749223

Unionized Baristas 11/09/2023

Unionized Baristas We talk about the ongoing shift in labor market dynamics and its implications for inflation going forward, which could be “higher-er for longer-er”. The market’s recent rebound, fueled by hopes of a soft landing and a bounce in the most shorted stocks, is also discussed. We also look at concentration of the index in a handful of stocks and compare recent earnings for some of the tech titans to the rosy projections for next year. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/28561088

Backwards Pants 10/27/2023

Backwards Pants Will and Adam provide their perspective on the market impact of events in Israel and Gaza, which come at a perilous time from a market perspective with yields reaching psychologically important levels. We also discuss how flows into passive funds have had an outsized impact on the so-called Magnificent Seven stocks and juxtapose their performance (and valuation) versus the rest of the market. Finally, we look at some real-time data on what is happening for economic canaries like shipping and small business. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/28433285

One-person Riot 10/06/2023

One-person Riot In the midst of typical seasonal weakness, we examine the causes for the stock market’s recent volatility, as well as the unprecedented moves in the bond market. We also look at oil’s ability to help the economy to a Goldilocks scenario, how labor unrest is affecting inflation and consumer sentiment, and whether one person can riot. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/28246478

Octoberfest 09/18/2023

Octoberfest After enjoying the festivities, including a fantastic caricature, we delve into the underappreciated risks associated with both zero-day options and put writing, given the launch of a new ETF that combines the two. We examine the market’s recent reaction to CPI data and the potential for inflation to re-accelerate with soaring oil prices and wage pressure from the current UAW strike. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/28053846

Upside Down and Backwards 08/29/2023

Upside Down and Backwards We parse Fed Chair Powell’s Jackson Hole speech and assess the odds (and timing) of further rate hikes versus a pivot. We also examine the impact on the global economy of China’s weakening property market. We conclude with a look at the recent weakness in U.S. consumer stocks and debate whether expectations for megacap tech earnings are too high in the wake of this week’s market reaction to everyone’s favorite AI stock. Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting . /episode/index/show/teaandcrumpets/id/27871410

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