What's More Likely: A Rally Or Rout From Here? | New Harbor Financial

July 16, 2026

AI Summary

5 min read

The S&P 500 is roughly 60 points from an all-time high, yet the two lead partners at New Harbor Financial, Mike Preston and John Loder, spend most of this episode explaining why they believe the market is sitting on one of the most dangerous setups in financial history. The central question is not whether the bull market will end, but whether the next move is a final vertical rally or an outright rout.

The AI Earnings Bubble

The conversation pivots on a single, uncomfortable claim: the market is not just experiencing an asset price bubble, but an earnings bubble—something Fred Hickey of the High-Tech Strategist told Adam Taggart he has never seen in his decades covering tech. The argument is that reported earnings for the hyperscalers (Google, Microsoft, Amazon, Meta) are artificially inflated because they are not properly accounting for the depreciation costs of their massive AI data center capex. John Loder shows a chart from Ed Yardeni: analysts are projecting 23.1% annualized earnings growth over the next five years, the most extreme reading since 1985, far surpassing even the peak of the tech bubble. Another chart shows the 12-month forward earnings consensus relative to cyclically adjusted earnings sitting on a parabolic spike with no historical precedent.

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What you'll learn

1 (00:00) **Episode Intro & Guest Welcome** - Adam Taggart introduces the monthly check-in with New Harbor Financial advisors Mike Preston and John Loder.
2 (02:19) **Fred Hickey's AI Thesis: Bubble in Earnings** - John Loder affirms Hickey's credibility and outlines the core argument that AI earnings are inflated by hidden depreciation costs.
3 (05:19) **Chart Evidence: Extreme Earnings Projections** - John presents charts showing analyst earnings forecasts are at historic extremes, exceeding even the 1999 tech bubble peak.
4 (09:47) **The Capex Dilemma: Chips vs. Hyperscalers** - John shows chip stocks going parabolic while hyperscalers' free cash flow plummets due to massive spending.
5 (13:56) **The "Fear of Missing Out" Mindset** - The panel discusses how CEOs are prioritizing speed over prudence, risking capital destruction.
6 (15:38) **AI's Economic Model "Disintegrating"** - Adam details Hickey's view that the AI business model is failing as compute costs double every 45 days while returns lag.
7 (18:56) **Market Concentration & Systemic Risk** - The AI sector now comprises ~40% of the S&P 500 and ~75% of the Nasdaq 100, making the entire market vulnerable to a correction.

+ Full timestamped outline available in the app

Guests on this episode

Mike Preston Adam Taggart

Show Notes

WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.comThe team at New Harbor Financial returns for their monthly summary, offering their updated outlook on the road ahead for the economy & the markets.They'll also take live viewer Q&A#marketcorrection #aistocks #inflation _____________________________________________ Thoughtful Money LLC is a Registered Investment Advisor Promoter.We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.All the details on Thoughtful Money's relationship with the financial advisors it endorses, many of whom regularly appear on this program, can be found in the following documents. We highly recommend you review these documents as they cover the terms that will apply should you choose to work with one of these firms at any time after watching this video.Thoughtful Money Disclosure Document: https://thoughtfulmoney.com/wp-content/uploads/2023/12/Thoughtful-Money-Disclosure-Document-12.6.23.pdf?pid=227Thoughtful Money Agreement: https://thoughtfulmoney.com/wp-content/uploads/2024/11/Thoughtful-Money-Agreement-Agreement.docx?pid=227IMPORTANT NOTE: There are risks associated with investing in securities.Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.Copyright © 2026 Thoughtful Money LLC. All rights reserved.