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Neil Howe: latest market views
Hedgeye Risk Management
Summary
Historian, economist and demographer, Managing Director of Demography at Hedgeye Risk Management, co-portfolio manager of the Hedgeye Fourth Turning ETF (HEFT), and co-author of 'The Fourth Turning' who coined the term 'Millennials'.
Chorus has 38 views from Neil Howe across 2 episodes on Thoughtful Money and The David Lin Report since October 16, 2026. Their latest calls: bullish on Technology Select Sector SPDR Fund; bearish on PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund.
Where they stand
Their latest bullish or bearish call on each company.
- PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded FundBearish ·
- Technology Select Sector SPDR FundBullish ·
What they talk about most
- Defense · 5
- US stock market outlook · 4
- US Treasuries & yields · 4
- Market sentiment, positioning & volatility · 3
- Commodities (broad) · 2
- Cybersecurity · 2
- European politics · 2
- AI chips & semiconductors · 2
- Manufacturing & industrial policy · 1
- US elections & politics · 1
- AI bubble & tech valuations · 1
- AI infrastructure & data centers · 1
The latest views
Newest first. Every quote is checked against the episode's transcript.
Howe sees a growing likelihood of a financial crash that could shut markets down.
Howe frames a financial crash as one of three main threats that fourth turnings bring, and says it is on the table now. He argues the likelihood is growing, drawing on his generational cycle framework and the probabilities he lays out in his book, and he says investors need to plan for markets ceasing to function, not just for losses in their portfolios. The support is mostly framework-based, with little market-specific data.
“If we do go in this direction, as I think there's a growing likelihood we will, and I I go through probabilities in the book.”at 4:05
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Trump's Golden Dome missile shield is an infeasible, unpriced line item meant to reassure, not a real defense.
Howe argues the Golden Dome is not feasible technology, has no end date for completion, and has no affordable price tag. He reads it as a political signal: a line item designed to make the public feel the government is in control rather than a credible defense program.
“We hear from our government. Well, we got a golden dome. ... This is no feasible technology, no end date, you know, when this could ever be built and and no affordable price tag. This is basically a line item just designed to say, don't worry, we're in charge.”at 9:09
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Cyberattacks on infrastructure control systems are the biggest threat, able to take down grids cheaply.
Howe says cyber is probably the single biggest threat. Adversaries can attack SCADA control systems and cripple aging infrastructure at a few critical points until the grid, gas pressure and other systems go down, without any need for nuclear war. He points to Russia's grid attacks on Mariupol, where the first step was taking down the grid and about 20,000 people died, and argues that 100 million people in the 20 largest US urban centers could face mortality risk from a three-week outage.
“cyber is probably the single biggest threat... All you need to do is cripple our decrepit infrastructure at a few critical points until the grid goes down”at 38:36
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Offensive missiles and drones beat defenses; new glide vehicles and drones will challenge military doctrine.
Howe argues the offense dominates the defense. Interceptors are much harder and more expensive to build than offensive missiles, and offensive systems are easier to evade interception. He cites hypersonic glide vehicles at Mach 10 to 20 that can maneuver and are hard to knock down, plus jet-powered drones used in Ukraine. He concludes that militaries will have to rethink doctrine, since taking down the arrows may not be enough and the archers may be hidden underground.
“dominates the defensive. It's much harder and more expensive to build interceptor missiles than another offensive missile.”at 39:57
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
US defense spending will ramp up sharply after the lame-duck Congress passes a new defense appropriations act.
Howe says defense spending is rising in almost every country, and that the US, which had been the exception in recent years, will follow. He expects the lame-duck Congress to pass a new National Defense Appropriation Act that will 'ramp defense spending way up.' He presents this as part of a global pattern of warming up for conflict, with wars between states and within them at a level not seen in thirty years.
“Defense spending is rising in almost every country around the world... The lame duck Congress is going to put through a new National Defense Appropriation Act, which is likely to ramp defense spending way up.”at 49:00
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Fixed income is a poor holding: inflation erodes bonds and governments will keep rates low to fund crises.
Howe says his fund is not long fixed income for two reasons. First, inflation blindsides fixed-income holders and devalues them. Second, in a crisis governments keep interest rates low, below everything else, to save money at bondholders' expense (financial repression). He names insurers, banks and hedge funds as the owners who get squeezed, and argues politicians are willing to do this because those holders are easy to vilify. His fund's underweight is tied to this view.
“we are not long fixed income securities. That's one of the reasons. Not only because inflation blindsides fixed income security and devalues them, but also you will be spoon fed low interest rates below everything else on earth”at 58:52
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Manufacturing & industrial policy
In crises the state takes ownership of industrial capital, as in WWII and the Civil War.
Howe argues that in a real crisis, gains and losses get socialized, and the state will take over productive assets. He cites the fact that by the end of World War II the federal government owned slightly more than half the capital of US manufacturing companies, funding plants that were run by private operators on cost-plus contracts. He also points to the Civil War, when the Union took over the railways and requisitioned munitions inputs. He treats the current government taking equity stakes in strategic companies as part of this pattern and expects more of it.
“One little known fact is that half the capital of all manufacturing companies by the end of World War II was owned by the federal government, actually slightly more than half.”at 1:00:19
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Democratic socialists are electorally penalized in US primaries; their ideology is unpopular with voters.
Howe says wherever democratic socialists run or have a conspicuous presence in Democratic primaries, they are a penalty to their races. He cites Abdullah Syed in Michigan, who will probably win but by a much smaller margin than his primary opponent would have had. He attributes the weakness to socialists not distancing themselves from Leninists who, he says, hate America, and he contrasts this with the anti-communist liberals of the 1950s.
“the Democratic socialist, wherever they are running or wherever they have a conspicuous presence in the Democratic primaries... are a penalty to their race. ... voters are not drawn to that, right?”at 1:05:28
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Macron's collapse and France's left turn to unrest will hand Marine Le Pen a landslide.
Howe says Macron is about to lose the presidency and is advocating that young people burn schools. He also says Macron's answer to the fiscal problem is to cancel the debt and have banks write it off. He argues that when the left turns to violence it usually helps the extreme right, so if this continues it will be a landslide for Marine Le Pen. He adds that a similar dynamic happened in Germany in the 1930s.
“Take a look at France right now... Macron... is about to lose... If this continues, it's going to be a landslide from Marine Le Pen.”at 1:11:35
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
EU members' veto power blocks a common foreign or energy policy, including on Russian gas and oil.
Howe argues the EU has no common will that all members accept as paramount, as the US settled its federalism question through civil war. Any single country has a veto over EU foreign policy. As a result the EU has no concerted policy on buying Russian gas or oil, on the Balkans, or on Iran. He contrasts this with Russia, which is smaller economically but unified, and argues Europe would need to act together to defend itself.
“Any single country in Europe has a veto power over any foreign policy action of Europe as a whole. That's why it has no concerted policy about buying gas or oil from Russia”at 1:21:05
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Extreme valuations, with CAPE in the 40s, point to poor decade returns, so avoiding drawdowns comes first.
Howe says the stock market is at extremely high valuations. Shiller's CAPE is in the 40s, and on average the decade-long return after that level is negative. He concludes the first priority is preventing drawdown. His fund does this by holding cash to deploy as valuations fall, which he says is Buffett's approach (holding up to 50% of public assets in cash when valuations were high). It also uses CTA and trend-following allocations and buys out-of-the-money puts against gap-downs. He cites four twentieth-century US bear periods lasting about 10–13 years of zero real return, and the 2000 to GFC stretch, to argue that long flat periods follow high valuations.
“at a time of extremely high valuations right in the stock market... Schiller's cape is like way up in the 40s and we know what the decade return is on average after that it's negative.”at 1:23:14
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Commodity futures and precious metals beat government bonds over time, especially when inflation threatens.
Howe's fund avoids fixed income, is occasionally short bonds, and holds commodity futures and precious metals to offset its equity exposure and protect against inflation. He cites commodity futures' 'brilliant record over the past century and a half', saying they outperform government bonds, and that they do particularly well when inflation is threatening.
“We are in commodity futures and precious metals, particularly commodity futures have a brilliant record over the past century and a half. They actually do better than bonds, than government bonds and they particularly do better at a time when inflation is threatening.”at 1:24:51
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Defense is a fourth-turning theme his fund goes long, alongside nationalized industries.
Howe describes his fund's third bucket as long/short positioning on fourth-turning themes, naming defense and nationalized industries. He gives no detailed valuation or earnings case for defense. The support is the thematic link to a fourth turning, which he argues brings collective and national priorities.
“the third part is just going long short and forth turning like themes and this is things like defense, nationalized industries”at 1:25:02
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Market sentiment, positioning & volatility
Hugely leveraged 3x chip funds swing wildly, so their arithmetic returns mask real losses from volatility drag.
Howe cites leveraged 3x funds on micro-cap chip stocks in South Korea that can rise 150% in a day and fall 300%. He says some have day-to-day arithmetic returns near 45% yet still lose money for an investor compounding at around 20%. He uses this as a case study of volatility drag, arguing that arithmetic averages (including the Sharpe ratio) are misleading and that investors should keep volatility down.
“these hugely leveraged 3x funds in micro chips... go up one hundred and fifty percent one day and go down 300%... some of these things have an arithmetic return day to day of something like 45% but they're actually losing money”at 1:28:04
Thoughtful Money: Surviving The Fourth Turning | Neil Howe ·
Wealth, inequality & billionaires
Fed survey shows household wealth gains for older Americans and losses for under-35s, which he says is unsustainable.
Howe cites the Fed's Survey of Consumer Finances, which he calls the gold standard for household net worth, from the 2025 data released recently. Households age 75 and over had a 33% real increase in net worth, further gains on earlier periods. Those under 35 were down over 20%, and he says the same pattern appears by income. He calls this one breaking sign of the current situation and does not think it is sustainable.
“age 75 showed an increase in household net worth of 33% in real terms... Younger people 35 were down over 20%... I don't think that's sustainable.”at 8:26
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
China has planted Volt Typhoon malware in US infrastructure, and Iran has tried to disrupt dams.
Howe argues the countries allied against the US have already been planting malware in its infrastructure. He cites reports that Iran tried to disrupt dam flows in several US counties and says China's Volt Typhoon malware is inserted into the SCADA systems of US infrastructure. He says that, according to the director, the FBI and CIA are waiting for the right time to pull the switch. He expects the homeland to be involved in any great-power conflict, with attacks on infrastructure.
“But we know what China has Volt Typhoon, which is malware inserted into the SCADA systems of all of the infrastructure in The United States. And according to the director, the FBI and the CIA are just basically waiting for the right time to pull the switch.”at 14:38
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
AI is making legacy US weapon systems obsolete faster, and missile offense has the advantage over defense.
Howe argues that AI sharply speeds up the rate at which legacy weapon systems become obsolete. Technological revolutions always make big defense investments stop working, as with battleships and torpedo planes. He says the US is struggling with its legacy investments in carriers and tanks. He also argues this revolution favors offense over defense in missiles, since an interceptor is much harder to build than an offensive missile, which pushes toward ground operations against the launch sites.
“What AI does is hugely increases the speed at which all of our legacy weapon systems become obsolete... Technological revolutions always increase the rate at which everything you've invested in with regard to defense no longer works.”at 16:50
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
Iran's buried missiles and drones can only be eliminated by a ground operation, which is Trump's problem.
Howe says the offense now advances faster than the defense in missiles, so the choice is to compel the country diplomatically or to go in on the ground and take out the archers, not the arrows. He says Iran's ballistic missiles and drone assets are all buried underground and cannot be reached from the air, so if the US does not go in on the ground it will never get them. He calls this one of the big problems Trump is having with Iran.
“I think that's one of the big problems Trump is having now with Iran. You know, all these all these ballistic missiles and all of their drone assets are underground... if we don't go in on the ground, we'll never get them.”at 20:07
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
AI infrastructure & data centers
AI depends on a large physical plant, which makes it vulnerable to cable and power disruption in a conflict.
Howe says that in a conflict environment, the first things to go are interconnectivity on undersea cables and electricity generation, which are the easiest to take out. He points to Russia's actions in Ukraine and asks what that would do to AI. He argues people forget AI depends on a huge industrial plant that needs an enormous interconnected network of cables, not just wireless, so it could be the first thing disrupted.
“People forget that AI depends on a huge industrial plant to keep it going. An enormous interconnectivity involving cables, you know, not just wireless. That could be the first thing to be disrupted.”at 24:03
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
Inflation is the almost-certain endpoint of a crisis, so the next decade will trend toward inflation.
Howe argues that in a real crisis the state must quickly move resources to those who need them, and taking them from creditors via inflation has always been the way nations do this. Holders of fixed nominal debt such as Treasuries lose purchasing power, which he calls financial repression. He points to the pattern of the Fed and Treasury responding to every market drop and unemployment rise since 1987 and to the roughly 30% rise in national debt to GDP during COVID. He thinks the trust in government and the political polarization make restraint unlikely. Periods of disinflation are possible, but the general trend over the next ten years will be toward inflation.
“Inflation is the is the almost certain endpoint of the crisis. Right? Because in a in a real crisis, right, where you have to suddenly summon up... the country.”at 26:17
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
The Fed may hike again this year, but it will reverse course and support markets if unemployment rises.
Howe says the Fed may hike at least once more before the end of the year. He argues the Fed is still very sensitive to the economy and markets. If unemployment rises, the market will fall first, and then the Fed will reverse course. He says that if the S&P fell 30%, the Treasury and Fed would focus on bailing everyone out rather than on inflation.
“The Fed may hike again before the before the year is over, but I think still they're very sensitive both to the economy and the market. I guarantee you, if unemployment starts to go up, the first thing that's gonna go is the market's gonna go down.”at 32:02
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
The AI boom is drawing global capital into the US and keeping the dollar high.
Howe says the AI boom is one of the things keeping the dollar high. It draws in capital from all over the world from people who want to participate, because nothing else like it is going on. He notes the dollar fell about 0.4% today, which he calls large for recent moves, after steadily rising day to day.
“the AI boom, which is also, by the way, one of the things that's keeping the dollar high because it's drawing in capital all over the world of people who wanna participate.”at 34:46
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
Chip producers are most vulnerable to any slowdown in data center growth, so they are leading the sell-off.
Howe argues that the AI boom is the segment most sensitive to changes in momentum. If growth in data centers even slows, chip producers face actual negative growth, since the second derivative hits hardest. He points to the recent weakness in Micron, SK Hynix and the South Korea trade as this effect already playing out.
“As soon as the growth in all these data centers even slows, that means going to actual negative for a lot of these chip producers. Right? That's the whip hand.”at 34:46
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
The 'this time is different' AI argument for high valuations is a familiar pattern that ends in a market drop.
Howe describes the debate as those who say the market is overvalued versus those who say AI is so transformative that the economy can absorb extreme valuations. He says the second argument recurs through history and it always ends with the market falling, though timing is unknowable. He treats tech underperforming the broad market for several days as an early warning. He adds that AI will change society, but that does not prevent a boom-bust cycle, which he expects to be painful.
“This time it's different with regard to AI... because we've got something so amazing that our economy is gonna be able to absorb these these extreme high valuations, and it always ends the same way.”at 34:46
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
US stocks are extremely overvalued; a CAPE above 40 has historically meant negative ten-year equity returns.
Howe says the market has entered a period of extremely high valuations. He uses the real-return CAPE, cyclically adjusted P/E, which he says is over 40 and about 43 now. Since the late nineteenth century, starting from a CAPE above 40 has been followed by negative ten-year real returns on equities, so he calls the prognosis for the stock market very bad.
“We've entered a period of extremely high valuations... the real return cape... which is over 40... if you start out at a cape of over 40, which is where we are, I think we're now about 43, your ten year return on equities is negative.”at 34:46
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
Commodities and precious metals are a deliberate anti-inflation hedge in the fund for this economic regime.
Howe says the fund is multi-strategy, with an anti-inflation component made up of commodity futures and precious metals. The fund also has a component to limit large drawdowns and takes some share of the rising market. He says it was designed for the economy and fourth-turning scenario he expects, in which inflation is a risk. Real assets like commodities are therefore central to his approach, as opposed to long-dated bonds.
“there's an anti inflation component, which involves, you know, commodity futures and precious metals and so forth as part of the fund.”at 38:44
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded FundBearish
Fund is short 20-year zero-coupon Treasuries, having profited, as long bonds suffer in inflationary crisis.
Howe says his fund is not a buyer of long-term bonds and oscillates between neutral and short. Right now it is short 20-year zero-coupon bonds, which he says has paid off. The logic is that a fixed 5% yield is a good hedge only until inflation reaches 10%, and fixed income has historically performed badly when the world is more exposed to crisis. The fund was built for a fourth-turning economy with inflation and upheaval, so long-dated zeros, which carry the most duration, are the exposure it shorts.
“Right now, we're actually short zeros... the twenty year zero bonds, and we've done very well with that.”at 39:22
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
Long-duration fixed income has historically performed terribly during crisis-prone periods; avoid duration.
Howe argues that a 5% locked-in yield looks good only until inflation reaches 10%. He says fixed income debt has always performed badly when the world enters a phase more endangered by crisis, which he presents as a rule of history stretching back five centuries. As danger rises, the less one should hold duration, and he extends this to any long-term exposure as real interest rates rise. His fund is short long-dated bonds on this basis.
“Fixed income debt has always been terrible when the world enters a phase which is more endangered by crisis... That is the rule of history.”at 39:59
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
Bond volatility is rising as savings become scarce and investors grow skeptical of government fixed income.
Howe says the MOVE index has risen sharply since the Biden administration, which he attributes to a greater skepticism about fixed income. This is not only about US public finances but about the political economy of high-income countries generally. He argues the world has moved from the post-Depression savings glut into a period of capital scarcity, so the bond market is repricing the risk. This structural shift is why bond volatility is high while equity volatility stays subdued.
“I think that's because that's one of the biggest changes we've seen is a greater skepticism about fixed income... I think we're in a period of capital scarcity.”at 41:08
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
Market sentiment, positioning & volatility
VIX is lowest on the way up and rises near market peaks as investors buy downside protection.
Howe says that across market booms, the VIX tends to be lowest on the way up and then rises as the market approaches its peak. At extreme valuations, investors who are still long begin buying puts and insuring against downside. He notes that the market has barely dipped in the past two years, and that volatility was unusually low (around 10 to 12) in 2018-2019 and before COVID, when protection was very cheap. The implication is that elevated valuations with low VIX are a late-cycle warning sign.
“...the VIX tends to be its lowest on the way up, not at the peak. At the peak, it begins to rise again.”at 42:13
The David Lin Report: How to Prepare For 'The End Of The World' | Neil Howe ·
8 older views from Neil Howe are on the episode pages, and all of them are a question away in your AI with Chorus.
Shows
- Thoughtful Money · 1 episode
- The David Lin Report · 1 episode
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