The Market Is Topping Out | Cem Karsan

Video Description

WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.com Today's guest is the perfect expert to discuss a year as volatile as 2025 has been so far. Cem Karsan is Founder, CIO, and Managing Principal of Kai Volatility Advisors & Kai Wealth. He's widely known as @jam_croissant on X/Twitter. Heading into 2025, Cem warned us that he predicted it would be a year of heightened volatility. And that certainly proved true in the first half of the year. And again over the past two months. But what about the road ahead? Are we through the worst of the bumps, twists and turns the market will throw at us this year? Or is the ride about to get rocky again? Let's hear straight from the man himself. #volatility #marketcorrection #diversification 0:00 – The 40-year regime is over – we’ve entered a 15–20 year period that looks like 1962–1982 3:41 – Lost decade ahead: nominal flat, real losses for traditional portfolios 5:03 – Why buy-and-hold growth worked for 40 years… and why it will destroy wealth now 6:24 – 2025 = final stage of the topping process 7:44 – Presidential election years in populist eras average +21.5% (2024 delivered +25%) 9:29 – The shocking 1962–1982 data almost nobody knows 10:48 – Midterm years in populist eras: all 5 had 23–49% drawdowns 12:20 – 2026 midterm outlook: “The pitchforks are already turning on Trump” 15:10 – Stagflation is here – Black Friday data proves it 17:21 – Why the administration is struggling to hide bad data (CPI, jobs numbers disappearing) 19:53 – Markets now bigger than Fed + Treasury combined – liquidity is reflexive 20:56 – “This is a sumo-wrestler market” – fat tails on BOTH sides 22:59 – Are investors sleepwalking? “After 40 years of one playbook, nobody wants to hear it’s over” 24:47 – The S&P 500 has only a 0.35 Sharpe over 125 years – 60/40 is no diversification 30:55 – Tool #1: Stock replacement with long OTM calls (25–30 delta) 34:39 – Why calls are structurally cheap right now (everyone sells calls, buys puts) 35:54 – Tool #2: True diversification – 15–20 genuinely uncorrelated strategies 39:07 – The magic of diversification: 10% average return, Sharpe 2.0, max drawdown ~4% 44:46 – Tool #3: Long volatility = “brakes on a race car” – 5% allocation dramatically improves returns 47:51 – Tool #4: Value + quality investing (Buffett style) – same return, half the volatility 50:00 – Moneyball investing: combining all four tools can 4x+ risk-adjusted performance 53:05 – “You never know who’s swimming naked till the tide goes out” – 2026 odds are rising fast 54:02 – Cem: “Risk management is the highest calling right now… and the biggest business opportunity on earth” 56:02 – How to follow Cem: kaiwealth.com + @Jam_Croissant on X _____________________________________________ 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. IMPORTANT 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 © 2025 Thoughtful Money LLC. All rights reserved.