With 30 per cent of the U.S. S&P 500 index trading at more than 10 times sales, and 13 per cent of the S&P 500 by index weight trading at 20 times price-to-sales (P/S) (a level that now surpasses the tech boom of 1999-2000), we’ll take a break this week from commenting further on market valuations and leave it to you to decide whether it’s wise to be fully invested in equities, or diversified.

This article was first published in The Australian on 21 November 2025.

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by Roger Montgomery Posted in In the Press, Technology & Telecommunications.

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53 positive months out of 54, 22.52% p.a. since May 2021

In this video, I provide an update on the October performance of Digital Asset Fund’s Management’s (DAFM) Digital Income Class. Despite significant volatility in Bitcoin – rising to record highs before sharply retracing – the fund continued to deliver steady results, returning 2.72 per cent for the month. Because the strategy is market-neutral and driven by high-frequency trading algorithms that capture price spreads rather than take directional cryptocurrency exposure, October’s turbulence created additional trading opportunities. The month reinforced the fund’s ability to generate consistent, uncorrelated returns irrespective of broader market noise. Continue…

by Roger Montgomery Posted in Digital Asset Funds Management, Video Insights.

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The U.S. Federal Reserve (The Fed) has two main mandates: supporting employment and controlling inflation. Until Friday, it looked as if the two were almost perfectly balanced against each other, suggesting that the Fed would keep rates on hold in December.

Last week, Wall Street decided that a December cut was off the table. On Wednesday, the Chicago Mercantile Exchange (CME) Fedwatch futures index placed the probability of a cut at just 30 per cent.

Meanwhile, JPMorgan published a note predicting a January cut. Markets sold off dramatically, with the Nasdaq 2.74 per cent lower, and the S&P 500 losing 1.95 per cent last week. And there were of course, fears of a bubble in the artificial intelligence (AI) theme, which we have written about here copiously. Continue…

by Roger Montgomery Posted in Economics, Global markets, Market commentary.

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The father of a field of mathematics known as fractal geometry, Benoit Mandelbrot, in his fantastic book, The (Mis)behaviour of Markets, observed that market price movements, unlike the smooth curves assumed in traditional financial models, are jagged and irregular, meaning that large price swings are more frequent than expected, and periods of high volatility can be followed by more high volatility. His work provides a more realistic framework for understanding and modeling risk, noting also that volatility in markets tends to cluster.

In my experience, I’ve observed those volatility clusters often mark turning points in markets. To be clear, not all periods of heightened volatility are turning points, but almost all turning points are accompanied by greater volatility. Continue…

by Roger Montgomery Posted in Economics, Market commentary, Market Valuation.

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U.S. Senator from Vermont, Bernie Sanders, and Professor Geoffrey Hinton – considered the ‘Godfather of AI’ – pointed out last week at Georgetown University that artificial intelligence (AI) and robotics aren’t inherently bad, but the people pushing this technology revolution are the richest people in the world. They suggest that Musk and Bezos, for example, aren’t staying up at night worrying about ordinary people. They aren’t worrying about working people. They’re not spending hundreds of billions of dollars to extend life expectancy, address global warming, shorten the workweek, and guarantee high-quality health care. They simply want more wealth and more power. Continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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I joined Angus Randall and Julia Bergin from ABC The world to discuss why, despite artificial intelligence’s (AI’s) enormous long-term promise, early investors often face the highest risks. History shows that major technology advancements usually go through a boom–bust cycle, which is why caution – not blind optimism – is essential right now.

Catch the segment here: Calls to boost Australian investment in AI. Continue…

by Roger Montgomery Posted in Market commentary, Radio, Technology & Telecommunications.

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In this final part of my two-part series on General Purpose Technology (GPT) booms, I explain how these cycles typically end. History shows that even world-changing technologies – from cars to commercial flight –  delivered poor outcomes for most early investors. This is because technology trends eventually run into the reality that customers don’t spend money in a straight line (their demand rises and falls), and also the concept of “creative destruction” (wherein new technology leads to the obsolescence of outdated products). These cycles are exactly why it’s important to diversify and regularly rebalance your portfolio. Continue…

by Roger Montgomery Posted in Market commentary, Market Valuation, Technology & Telecommunications, Video Insights.

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Wall Street on Thursday experienced a stunning reversal in sentiment. Impressive results from the company spearheading the artificial intelligence (AI) revolution, Nvidia (NVDA), and a strong September jobs report initially drove the Nasdaq up more than two per cent.

On Wednesday, Nvidia’s CEO Jensen Huang had described demand for its Blackwell chips as “off the charts”, and dismissed fears of an AI bubble on the company’s earnings call.

Meanwhile, the U.S. economy added 119,000 jobs in September, meaning the labour market was in better shape than previously thought. Continue…

by Roger Montgomery Posted in Companies, Global markets, Investing Education, Market commentary, Market Valuation.

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