Lance Roberts, the portfolio manager whose firm publishes at realinvestmentadvice.com, joins Adam Taggart for the weekly market recap on a Friday when Nvidia's results and Fed Chair Kevin Warsh's Jackson Hole speech landed within days of each other. The conversation runs through Nvidia's numbers line by line, what happens to the trade when the data center buildout ends, Warsh's message that financial conditions are not restrictive, the friction between the Fed chair and the Treasury secretary, a Chicago PMI and a payroll revision that both point the other way, the technical setup into September and the midterms, a reported 100-year oil lease with Venezuela, and a closing stretch on why neither man measures himself against a Ferrari.
Guest: Lance Roberts, portfolio manager, whose firm publishes its research at realinvestmentadvice.com
Host: Adam Taggart
Published: 29 August 2026 on the Adam Taggart | Thoughtful Money® feed
Watch on YouTube | Apple Podcasts | 1 hr 11 min
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Key Takeaways
Nvidia's quarter was real and it bought the market about half an hour of calm
Revenue up 106% year over year, operating income up 124%, gross margins of 75%
"It quelled a lot of fears temporarily, but that quelling of fears is going to last about 37 minutes"
The firm is long Nvidia and deliberately underweight it, at about a 4% position
When the data centers stop being built, the money rotates to the companies that run them
Microsoft, Amazon and Google are named as where the portfolio goes next
Warsh said financial conditions are not restrictive, and left himself room to hike
Mr. Roberts reads it as no hike in September, and a hike by year end as entirely possible
The bond market's rate signal is being distorted by about 50 hedge funds running a leveraged basis trade
Rates are not high by historical standards, they are back to normal after fifteen years of suppression
The demand destruction is already visible in the data, even as the buildout masks it
The August payroll revision came in at minus 79,000 against a Goldman Sachs expectation of a gain
The economy has two halves, and only one of them is working
Construction and business investment are running hot; employment and incomes are not
Disinflation wins eventually, but not inside the next 12 to 24 months
A risk-reduction signal could come within two to three weeks, and it is not a crash call
A 3% to 5% correction, maybe 10%, and then the next buy signal
Roberts would set stops around the previous highs or the 50-day moving average
A reported 100-year Venezuelan oil lease would make US energy independence permanent
Taggart's closing argument: the best day of his summer cost nothing and involved no phone
Nvidia's Numbers Are Real, and They Bought About 37 Minutes of Calm
Mr. Taggart opened on the week's biggest event — Nvidia's earnings call — and asked whether it was big enough to give stocks a material, sustainable boost. Mr. Roberts said no, and then read the quarter out of his firm's own commentary, published that morning.
"Revenue was up 106% on a year-over-year basis to 96 billion," he read off the commentary, with data center the bulk of it: "revenue was 89 billion. That was up 117% year-over-year"
Operating income is the line he said matters, because it strips out one-time gains: "63.7 billion, that was up 124% year-over-year"
The contrast he drew was Google, whose net income he said carried one-time gains from its Anthropic stake
"Gross margins were 75%. EPS on non-GAAP was $2.22 that was up 122%."
The growth is real, and the balance sheet is not pristine. "Accounts receivables are up, no doubt about that," he said, and if the end customer never pays, that hits revenue down the road
He said the bear case requires an extreme assumption: "you have to make some really really big assumptions that everything that's going on with AI is a complete sham and it's never going to work out"
The dot-com comparison does not hold on revenue. "There's a very big difference between the companies reporting earnings today versus the companies that reporting earnings like Global Crossing" and Lucent, he said, because of where the revenue generation is coming from
He allowed there could be "a little bit of a ding down the road" without it becoming a repeat of the early 2000s
The relief is temporary by construction. "It quelled a lot of fears temporarily, but that quelling of fears is going to last about 37 minutes" until the next post arguing the buildout is a fraud
On positioning: "We carry right now about a 4% weight in Nvidia," underweight what the S&P 500 benchmark would imply, because the risk is understood but the revenue growth is real
His retort to the bears was about the cost of the view: "how much money have you lost since 2022 following the bearish narrative"
A Texas aside, and a bad connection. Mr. Roberts described the dot-com era as having produced "some ugly hickeys," which stopped Mr. Taggart cold — "is ugly hickeying—hickeys, is that like a Texas saying or something?" Mr. Taggart then warned viewers about the audio: "Lance is having trouble with his internet. His house, wherever he lives, just seems to be a permanent lightning rod." Mr. Roberts explained that "somebody else got hit and our internet's been out for the last 24 hours, so I'm on a hot spot right now." The connection degraded through the episode and both men worked around it.
The Data Centers Are Factories That Haven't Opened Yet
Mr. Taggart put the demand-cliff question directly: most of Nvidia's revenue comes off other companies' balance sheets, and when the buildout abates, does Nvidia stop earning what it earns now?
Mr. Roberts said the misread is treating an unfinished factory as a failed one. "These are the factories, right? We're just the process of building the factory. The revenue comes after they go into operation." He put that switch about two years out
The firm's thesis has been unchanged since 2023: own the chipmaker while the buildout runs
The growth rate has to slow regardless, on arithmetic alone. "They can't maintain a 100% growth rate in earnings when you're generating 96 billion in revenue," he said, calling it the law of large numbers
Mr. Taggart offered the counterargument — other countries build their own data centers and keep buying chips — while noting it is hard to see enough of them replacing American demand
When the revenue phase arrives, the portfolio moves. "We'll switch our holdings in our portfolios more towards the hyperscalers," Mr. Roberts said, naming Microsoft, Amazon and Google as the beneficiaries of actual data center revenue
Warsh Told the Market to Stop Being Fed by the Fed
Fed Chair Kevin Warsh had given his Jackson Hole speech an hour or two before the recording. Mr. Taggart had not watched it; Mr. Roberts had, and read from his notes on air.
The message, in his summary, was that the market has relied on the Fed for direction for too long and should go back to pricing off fundamentals
The lynchpin was that policy is not tight. "The financial conditions are not restrictive at all," he quoted, listing what Warsh cited: capex at 9%, S&P profits up 20%
"Credit spreads near cycle lows. Banks are easing lending standards, stocks are near highs, there's very low volatility."
The 2% inflation target has not moved, and Warsh called both oil prices and tariffs transitory
"The markets are going to have to come to the realization that they're not going to get fed by the Fed anymore," Mr. Roberts said
On the rate path: "He did give himself some room for a hike if needed," but "my takeaway is that the Fed's probably not going to hike in September. Could they hike by the end of the year? Absolutely."
The host read the tape as the market pricing a higher hike probability. Mr. Taggart noted gold, silver and Bitcoin all declining after the speech, and said he was inventing the explanation as he looked at it. Mr. Roberts said he had not checked Fed funds futures
Mr. Taggart relayed Darius Dale's view from an interview about two weeks earlier: a short-term flex, possibly one hike or even 50 basis points by year end, as the setup for an easing campaign. Mr. Roberts said he would not be surprised
Warsh Wants a Clean Signal and Bessent Is Leaning on It
Mr. Taggart brought in Art Laffer, who he said knows Kevin Warsh personally and has for decades. Mr. Laffer's view, as relayed: "He thinks that Kevin Warsh is going to be in that seat for a long time" — "like 25 years type of long" — and has the potential to be one of the great Fed chairs among those Mr. Laffer has known.
The contradiction Mr. Taggart put to his guest: Warsh wants the market signal restored and unadulterated, and then Treasury Secretary Scott Bessent ran what Mr. Taggart called a Treasury Operation Twist. "So do you think he feels a little punked right now by the administration?"
Mr. Roberts said probably, and confirmed the tension. "There is certainly some friction between Warsh and Bessent." The buybacks, though, are short-dated: "The buyback starts September the 4th and runs through September the 9th"
The bigger distortion is the basis trade, the subject of the prior weekend's newsletter. "About 50 hedge funds own roughly about 8.5% of the bond market," he said — short-term positions, heavily shorting bonds to boost basis-trade transactions, running roughly ten times leverage
That shorting is pushing yields up in the near term, so "the interest rate signal that you're getting is not actually operating off the fundamentals"
A Treasury yield should reflect economic growth, inflation and a modest term premium; he said the term premium is far above that now because of the basis trade, oil and tariffs
Bessent's aim, as he read it, is to pull the term premium back to something reasonable — which works against what Warsh wants in the short run, even though Warsh has himself acknowledged the short-term traders are distorting the signal
Mr. Taggart pushed back on the whole premise of intervention. Every tactic of the past twenty years has been defended as rightsizing the market, he said, and "you don't rightsize the market. The market does what the market does." Mr. Roberts agreed
Rates Aren't High. They're Normal, and the Economy Is Feeling It
Mr. Roberts pointed to his article from the previous Friday on normal interest rates. The complaint that rates are the highest since 2007 ignores what came in between: zero rates and heavy quantitative easing from 2008 onward suppressed them artificially.
"It's returned back to normal levels. And it certainly seems high, but it's not." What is new is that the government now has to absorb a real interest burden, and the economy has to absorb demand destruction
The morning's data went his way on both counts. On the Chicago PMI: "We just saw a Chicago PMI this morning is a good example. Went from 56, 58.3 last month to 47.1."
The annual payroll revision came in the wrong direction. Goldman Sachs, he said, "was expecting the revisions to non-farm payrolls which we get every year which show an increase between 50,000 and 450,000 jobs" more than originally counted
"That revision came in at a negative 79,000" — after a year of weak employment prints, 79,000 jobs worse rather than better, which he said is not inflationary by any stretch
His causal chain: high oil prices out of the Iran situation, higher tariffs from the administration, and a push higher in interest rates, all pressuring yields and hitting the economy. The counterbalance of higher yields and demand destruction, he said, just has not caught up with itself yet
Lower Rates Would Cut $500 Billion of Spending. Congress Would Spend It.
Mr. Roberts made the fiscal arithmetic case: reverse the interest currently being paid on the debt back toward 2022 levels and "you're going to clip about 500 billion off spending just in interest rates"
Mr. Taggart was skeptical the saving survives contact with Washington, asking whether politicians simply spend the windfall
Mr. Roberts conceded the point in one line: "Name me a politician that doesn't want to spend money and I'll agree with you"
Mr. Taggart added the reverse dynamic he watches: because debt service has grown so much, the government's response has been more deficit spending rather than less, which is short-term stimulus and a longer-term problem
Two Economies: Dirt Moving on One Side, Weak Employment on the Other
Asked whether he is on the slowing-economy team, Mr. Roberts declined the label and split the question.
The consumer is under pressure, and the activity data is not. ISM manufacturing and the PMIs show an economy running on all cylinders, and the firm's "economic composite index, which has gone from basically 30 to 40 in just the past few months"
All of that activity is one thing. "That's all the data center buildout. So, that's people are moving dirt, they're building buildings," which feeds business investment and inflationary pressure through concrete, steel, power, gas and oil
Employment and incomes show the weakness. He put growth at "we have this economy that's you know generating about 1.5% growth," with the answer depending entirely on which side of it is being measured
The buildout is the mask. "That business investment side that's going to last another 18 to 24 months is kind of masking over what's happening for the rest of the broad economy"
Disinflation Wins, but Not for 12 to 24 Months
Mr. Taggart asked whether the AI capex boom and the disinflationary forces produce a stalemate, or whether one wins.
"Eventually, the disinflationary forces are going to win out because those are long term. It's demographics, it's debt," Mr. Roberts said, and those point to lower growth and lower inflation over time
In the near term the buildout runs the other way, because productive investment creates economic prosperity. "We're getting a lot of productive investment for the first time since the 50s," he said, showing up in productivity rates
He tied it to Mr. Taggart's recent Lacy Hunt interview: rising productivity, more onshoring, both inflationary — and both temporary
The long-term effects of debt and deficits are disinflationary, and an aging population with too few young workers entering the labor force keeps them that way
The Chart: A Good August, a Sell Signal, and Stops at the 50-Day
Mr. Roberts pulled up a live S&P 500 chart, refreshed for a real-time quote, with the hotspot holding.
The market peaked at an all-time high in early August, pulled back to the 20-day moving average, retested the previous highs and rallied a little off that level
"August has actually been a pretty decent month. Surprisingly for August," which is typically one of the weaker months
The seasonal statistic he cited: "When you have a positive August and a year where the market is up more than 10% about 91% of the time you've had a decent return through the end of this year"
September is the weaker month, and this one carries a midterm election. He expects the current correction to continue or the market to consolidate, with the 50-day moving average as a possible target
The risk-management instruction was explicit. "So, I'd be a little bit cautious here with exposures. We're still short-term on a sell signal." Momentum is weakening, which he called a bearish indicator in its own right
"I would have stops kind of set around the previous highs, maybe around the 50-day moving average"
If the market breaks out to new highs from here, he said, then it is good to go
"Retail investors have stepped out of the markets to a large degree," with no roaring return to the semiconductor trade or sharp moves in other sectors. Institutional investors are largely away for August internationally and return in September
Mr. Taggart tied it to Mark Newton's outlook from the previous week: choppy and volatile into the midterms, some kind of pullback, and then "he sees the market having a pretty big end of the year and ending at 8,000." Mr. Roberts said his own view is "very similar. Very similar."
On a sideways market instead of a drop: the consolidation is working off overbought momentum and relative strength, which the market has been doing for three or four months. One day it is tech, the next healthcare and financials, then back — hard to trade, harmless for a diversified portfolio that captures the rotation
Wide Breadth Is Bullish and a Contrarian Signal at the Same Time
Mr. Taggart noted that breadth has widened over the past six months, with more sectors participating rather than the AI trade carrying everything, and asked whether it is starting to narrow.
It is still broad, and that is the warning. When the number of stocks above their 200-day moving average gets above 70 or 75, "that's very bullish for the markets" — and "that's also where markets tend to start to peter out," because everyone is already in
The firm's own market breadth indicator works the same way: very high readings are super bullish and historically a good contrarian signal to start reducing risk
What they are actually waiting for is the reversal in money flows, measured weekly and published in the Saturday newsletter, checked against the four-week average
The timing is close. "If there's going to be a risk reduction signal, it'll be within the next two to three weeks"
It is not a crash call. "It just means you have a 3 to 5% correction, maybe a 10% correction and then you have your next buy signal"
A 100-Year Venezuelan Lease and the End of OPEC's Leverage
Mr. Taggart raised the week's other development, opening with a shot at the president for renaming Lake Ontario — "a master of like the schoolyard taunts" — before getting to the substance: reports that the US is close to a roughly 100-year lease on a number of Venezuelan oil fields, "which they're saying would essentially double the US proven oil reserves." He asked whether it would "cement America's role for the foreseeable future as the world's gas station."
Mr. Roberts said maybe, and framed it against the Strait of Hormuz scare. The fear had been that closure would "cut off 20% of the world's oil supply" and trigger the next financial crisis
He read the deal as the plan all along. "The US was already energy independent and this just makes it permanently so," removing dependence on OPEC pricing and on the Strait, and providing substantial leverage if it comes to fruition
Energy security is the point, he said, and this is a good thing long term
Mr. Taggart's own commentary took most of the airtime here. He noted that Venezuela would leave OPEC as part of the deal, and that "the UAE has already left OPEC. So OPEC is in danger of fracturing here"
On the risk of a future nationalization, he assumed the lease carries heavy provisions against it
On why Venezuela would sign: more compensation than they were getting alone, plus American engineering help, plus capital to reinvest — "this really does feel a lot like a win-win"
On the century-long term, he was relaxed: "Oil might not even be an issue. We're probably all nuclear by then." Mr. Roberts said he had been thinking the same thing
The socialism digression. Mr. Taggart called Venezuela a modern real-world example of a socialist regime leeching off inherited infrastructure until it collapses. Mr. Roberts said he had published an article that day on capitalism versus democratic socialism, prompted by the political push for it in the US: "If you think the K-shaped economy is bad in the US now," push toward democratic socialism and see how bad it gets
He hoped that "hopefully with the removal of Maduro" money starts migrating through and broad economic prosperity improves
Mr. Taggart proposed a shape for it — "it's kind of like a space-bar-shaped economy" — with everyone flat on the bottom. Mr. Roberts agreed, "except for the ruling elite or the military junta"
No Trades This Week, and Why the Urge to Act Is the Trap
The firm made no trades and has some setups in the pipeline, waiting to see what the market does
This is where investors get themselves into trouble. A portfolio that looks the same as yesterday creates the feeling that something must be done
"When you feel like you need to do something, you're typically better off just not doing anything, stepping back, let the market do what it wants to do, wait for a clear signal, and then take some action"
The market has earned the boredom. "This market's just been kind of grinding sideways for three, four months now." He gave Nvidia as the example of why acting on yesterday's tape fails: it was up big the day everyone expected it down
Mr. Taggart added the seasonal explanation — European traders and investors take August off — and Mr. Roberts agreed: "It's not uncommon to kind of have a quote unquote kind of boring market, especially in late August," with a truer read after Labor Day
Taggart's Rant: Four Hours on the Truckee River, No Phone
Mr. Taggart tied his own segment to the nickname he gives his guest, the Epicurean portfolio manager, and redefined the word on the spot: money is a catalyst and a means, and the things that matter are quality relationships, purpose and health.
The occasion was a neighbor's family cabin on the Truckee River and an annual gathering the host's friend calls a mannation — beer, cornhole, a group of high school and lifelong friends
They drove a couple of miles upriver with inner tubes and "we just floated down river for 4 hours," then ate bratwurst and played poker until roughly three in the morning
The detail he kept returning to was the absence of the phone. "We all had to leave our phones in the cabin and just literally be humans for a day" — the longest he has gone without it in recent memory
He said the day felt like four days of living relative to his average day of reading websites and editing videos
The instruction: make the space weekly in small doses and do something like this at least once a month, because the alternative is reaching the end with nothing to reflect on
"So, go forth and touch grass, folks"
He tied his house purchase to the same logic, calling it more money than he ever thought he would spend, and framing it the way he framed AI capex — high cost going in, a long-term memory creator at low cost afterward, near the Sierra range, "I'll be able to be up in it in like 12 minutes"
Roberts on Benchmarking: The Ferrari Video and the Wrong Yardstick
Mr. Roberts turned the rant into a measurement problem, and connected it to the sentiment surveys he reads professionally.
Social media commentary about unaffordability is distorting how people report their own lives. Someone may have groceries in the refrigerator, gas in the car and a job, and still answer a sentiment survey badly because everything they read is negative
"We start benchmarking ourselves against the wrong benchmark"
The example was a video he had seen the day before: a young woman sitting in a Ferrari saying she likes her Ferrari, which sent him straight to the financing question — how it was paid for and how much debt sits behind it
Mr. Taggart's reply was that she probably paid the dealership a couple of hundred dollars to sit in it and shoot the video
Mr. Roberts's point was the second-order effect: everyone who watches concludes their own life is behind
His own definition of the benchmark: "It's spending the weekends with my wife out in the park, taking a walk with our dogs. That stuff makes me super happy and it costs nothing." He was careful to add that being financially underwater is a real problem, and living within a budget and saving still matter
Mr. Taggart's addition was about fairness as a wired instinct — humans and other mammals react badly to seeing someone treated better — and a claim about what people actually remember: the neighborhood potluck, whiffle ball, his wife's mahjong group, none of which cost much
"The things that bring you most joy, tend to be available to that entire socioeconomic spectrum"
On potlucks specifically, he said it takes nothing more than dragging card tables into the cul-de-sac and having the will to do it
Mr. Roberts's closing instruction to viewers: "Compare yourself to the right benchmark, you know? Go put your—get the right benchmark. It'll make your life so much better"
The Cars They Actually Drive
The segment ended on the joke and then on the disclosure, which made the point better than the rant did.
Mr. Roberts said he needed to go get his Ferrari out of the garage; Mr. Taggart told him to "make sure not to scratch the Bentley when you go by"
The correction was the punchline. "I drive a 2019 used Toyota 4Runner, just to be clear"
Mr. Taggart's version: the family bought a car a couple of years old when they moved to Nevada, and "we'll never buy new." Every previous car had been at least ten years old when bought used, so it felt like going from the stone age to the nuclear age — and they hardly use any of the features that mesmerized them
Mr. Roberts's commute makes the case on its own. "I live about four miles from work. So I'm like in the car for like five minutes"
Mr. Taggart's close: 99% of what anyone needs from a car is getting from point A to point B, and the dealership features are the same trap as the Ferrari video — things to be dazzled by that go unused
Mr. Roberts's bottom line is that Nvidia's quarter confirmed the buildout rather than extending the rally, that a weakening momentum reading and a possible risk-reduction signal inside two to three weeks argue for stops around the previous highs and a modest trim rather than a crash trade, and that the demand destruction showing up in the Chicago PMI and the payroll revision will eventually outweigh the construction boom that is currently hiding it.
Products, Companies & Tools Mentioned
Nvidia (The quarter that framed the episode: revenue up 106% to 96 billion, data center revenue 89 billion, operating income 63.7 billion, 75% gross margins. Held at about a 4% weight, deliberately underweight the S&P 500 benchmark)
Microsoft, Amazon and Google (The hyperscalers Mr. Roberts says the portfolio rotates toward once the data centers switch from construction to revenue generation. Google is also cited as the case where one-time gains from its Anthropic stake flattered net income)
OpenAI (Named as the target of the off-balance-sheet financing debate and the "it's an Enron" bear case circulating in the market)
Global Crossing and Lucent (Mr. Roberts's dot-com comparison, and his argument that today's companies differ from them on where revenue actually comes from)
Goldman Sachs (Its expectation of a 50,000 to 450,000 upward payroll revision against an actual reading of minus 79,000)
Zero Hedge (His shorthand for the source of the next AI-fraud narrative, and why the relief rally lasts about 37 minutes)
OPEC and the UAE (The cartel Mr. Taggart says is in danger of fracturing, with the UAE already out and Venezuela reportedly leaving as part of the lease deal)
Ferrari, Bentley and a 2019 Toyota 4Runner (The benchmarking argument in three cars, ending with what Mr. Roberts actually drives)
Books & Resources Mentioned
realinvestmentadvice.com daily market commentary (Where the Nvidia numbers Mr. Roberts read on air were published that morning)
The firm's weekend newsletter (Carries the weekly market breadth indicator and the four-week average he says will show any risk-reduction signal; the prior weekend's edition was on the basis trade)
Mr. Roberts's article on normal interest rates (Published the previous Friday, arguing rates only look high against fifteen years of suppression)
Mr. Roberts's article on capitalism versus democratic socialism (Published the day of the recording, with Venezuela as the worked example)
Kevin Warsh's Jackson Hole speech (Read out on air: financial conditions not restrictive, capex at 9%, S&P profits up 20%, credit spreads near cycle lows)
Adam Taggart's interviews with Art Laffer, Darius Dale, Mark Newton and Lacy Hunt (Referenced throughout for the optimistic economy case, the Fed path, the 8,000 year-end target and the productivity argument)
Apple Podcasts (The episode on Apple)
Episode page (The show's own page for this episode)
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