“The world has gone mad”: Marcus Padley goes 100% cash

Markets are euphoric. The S&P 500 sits near record highs, valuations have soared, and leverage is creeping back into the system. Against that backdrop, Marcus Padley has done something few others can: distance himself from the herd.

“The stock market has become a dangerous place and the rise of gold is not fabulous, it’s ominous,” says the veteran stockbroker.

Padley, founder of Marcus Today and manager of the MT20 portfolio - which uses ASX-listed ETFs to time markets whilst targeting 20% p.a. (a return they have already hit in the first eight months) - has now moved entirely to cash.

“We’re now waiting for an irresistible buying opportunity I am confident will come," he says.

“We're not priced for any bad news”

So what’s got Padley so worked up? And why is he stepping aside when traders like Paul Tudor Jones are talking up a final stock market “melt-up”, one that could leave anyone sitting out “missing the juice”?

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For Padley, it’s all about sentiment. He’s seen this movie before - and he’d rather leave the party before the stampede to the exits.

“The signs of excess are everywhere... we're not priced for any bad news," he says. 

From record valuations to the highest margin loan ratios since the dot-com boom, Padley believes markets have become dangerously complacent. With ten stocks now making up around 40% of the S&P 500, the risk is simple: if one falters, the rest will follow.

"The results season is a risk – any doubts about earnings, return on investment, capex momentum or these vacuous circular deals will kill everything. 10 stocks are 40% of the S&P 500 and they have results starting in a week," he says.

Padley also sees the surge in gold demand as a warning sign. The queues outside ABC Bullion in Sydney’s Martin Place capture today’s split psychology: speculative mania on one side and fear on the other.

"The world has gone mad betting that the world might go bust and they might be right. I know I am biased but... the 'Trump Dump' is inevitable," says Padley.

For now, he’s content to sit in cash, waiting for markets to take a breather - and to jump back in before confidence returns. It’s a playbook he’s used successfully before, one he explains in more detail in his interview with Livewire's James Marlay below.

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Views from Wall Street

For Wall Street analysts, the tone is more measured - but not without caution.

UBS expects S&P 500 earnings to grow 7.7% year-on-year in the September quarter, with the final figure likely closer to 11% once all results are in. But the thing to note here is just how skewed those earnings are expected to be - and the skews within the skews (see their projections on NVIDIA's earnings in the quote below).

“Big 6 Tech+ are expected to grow 16.6%, but company forecasts are varied (MSFT: 11.1%, AAPL: 7.1%, META: 10.4%, GOOG: 8.5%, AMZN: 9.5%, NVDA: 53.1%)," says UBS.

"The other 494 companies in the S&P 500 are projected to report EPS growth of 5.2%, just below the 7.1% growth delivered in 2Q."

Yes, NVIDIA alone is expected to contribute more than half of the index’s overall EPS growth! Meanwhile, sectors such as energy and health care are in outright decline.

Over at Aptus Capital Advisors, Head of Equity Dave Wagner, says all eyes this quarter should be on one thing: demand for AI.

“Hyperscaler commentary this quarter regarding AI demand and capex spending will be critical to the durability of the AI trade,” he says.

Consensus estimates imply that hyperscaler capital expenditure will remain robust this quarter — up 75% year-on-year — but slow sharply to 42% in Q4 and to roughly 20% in 2026.

Wagner says that comparisons with the 2000s tech bubble are fair but argues that this cycle is likely to produce an air pocket, not a crash.

“The bottom line is that we don’t know the hour or the day the market peak will occur, but having a plan to prepare for what you can’t control makes sense," he says.

Padley agrees, adding:

“From the skyscraping New York offices of trillion-dollar fund managers to the back seats of a Sydney Airport taxi every stock market interested friend, colleague, broker, strategist, economist, commentator, TV anchor, King, Queen and taxi driver, is now asking the same question – 'When is the market going to top out?'"

"When the market is operating with a universal understanding that 'something’s coming,' you can bet, something’s coming. And it won’t take much. "

What's your take?

Marcus has put his money where is mouth is. How are you playing the market? Let us know below.

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