The stock market’s breakneck rally has taken a new turn, one that Yves Lamoureux believes signals an unhealthy shift. The president of Lamoureux & Co., once “extremely bullish,” has now adopted a neutral stance, citing what he calls a gambler’s market dominated by reckless speculation and short-term bets.
Lamoureux shared with MarketWatch that the speed of recent gains has unsettled him. He pointed out that while he had projected the Dow to hit 50,000 by 2027, it nearly reached 46,000 in just a few months. That pace, he argued, reflects market behavior driven less by fundamentals and more by gambling instincts. In his view, when risk-taking returns in such a frenzied fashion, it is a sign to start raising cash.
Gambler’s Market: Signs of a Casino Mentality Are Emerging
Speculative activity in the current market resembles conditions last seen in 2021. Lamoureux flagged the resurgence of meme stock surges and record levels of trading in extremely short-dated options as key indicators. He warned that many retail investors are treating equities like lottery tickets rather than long-term investments.
His concern is not rooted in any single stock or asset class. Instead, he sees a broader shift in investor psychology. When participants jump into markets with little understanding, momentum takes over and rational valuation takes a backseat. For long-term investors, that shift carries clear risk.
A Topping Process May Be Underway
According to Lamoureux, what comes next may not be a dramatic crash but rather a slow grind. He describes a “topping process” in which markets plateau for several years without significant upside. This scenario could leave investors exposed if they remain overly aggressive in a flattening market.
To prepare, he advises gradually building cash reserves. He does not recommend exiting entirely, but suggests trimming positions during rallies and re-entering during pullbacks. This method, often referred to as scaling in and out, allows investors to manage volatility without trying to time exact tops and bottoms.
Why Fundamentals May Be Fading in a Gambler’s Market
Macroeconomic risks also play a role in Lamoureux’s caution. He expects inflation to rise again in 2026 and 2027, making it more difficult for central banks to cut interest rates. If yields push higher, companies carrying heavy debt loads could face pressure, especially if revenues weaken during a prolonged plateau.
Lamoureux is also wary of the market’s underlying structure. He cited the introduction of global greenhouse gas fees on shipping as an example of rising structural costs. These could eventually work their way into higher prices for goods and services, creating additional drag on margins.
Still Looking for Value in the Right Places
Even as he urges investors to be more cautious, Lamoureux has not abandoned equities entirely. He continues to favor companies that have strong cash positions and reinvest in growth rather than paying out dividends. One of his top picks is Nebius Group, a Dutch-based AI infrastructure company with a diverse portfolio of technology assets.
Goldman Sachs recently gave Nebius a buy rating, and Lamoureux believes it offers long-term upside even in a more volatile environment. His preference for high-quality, future-focused businesses stands in contrast to the speculative names currently driving market hype.
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