Don’t look now, but almost every commodity price is setting a multi-year high. The boom in commodity prices comes at a time when U.S. large-cap equities are, by almost any metric, selling at historically high prices.

Something is bound to give and Invenomic Capital’s Ali Motamed, who is participating in a webcast debating value versus growth with RiverPark’s Mitch Rubin on Thursday, thinks it could be stocks. “There isn’t a commodity that isn’t exploding,” he said. “And this is the most expensive stock market in history.”

In his view, the stock market’s narrative is completely one-sided. Goldman Sachs is predicting the S&P 500 will finish 2021 at 4,300 and Blackstone’s Byron Wien calling for a year-end target of 4,500. Both predictions appeared to be framing the upper end of the range.

History indicates that whenever equities have stood at current levels before they’ve suffered a 50% or 60% bear market, Motamed maintained. “I’m not saying that will happen,” but it’s a scenario investors should consider.

Motamed, a former Morningstar manager of the year who runs a long-short fund, believed that markets are at a major inflection point—and the factors that drove stocks and bonds for the last 40 years like falling interest rates and disinflation are disappearing in front of our eyes. "The only way to make money [in the next few years] is to be long value and short growth," he argued.

What few notice is the potential for inflation, which gathers steam if the Biden administration is successful in passing its proposed $1.9 trillion stimulus program. Copper recently set a five-year high of $3.80 per pound.

Most other commodities are sitting at three-year highs. Supply chain disruptions caused by the pandemic could take years to repair. Over the three months ending February 12, the Direxion Auspice Broad Commodity StrategyETF is up 11.89%.

There is currently a housing boom underway and Motamed estimated the surging cost of lumber is raising the price of new homes by more than $50,000. “All the math points to higher inflation,” he said.

Yet central bankers remain obsessed about deflation. Motamed was interviewed before an ice storm shut down several major oil refineries in Texas.

Bonds were off to their worst start of the year since 2013 and, if rates keep rising, they could eventually threaten long-duration assets like tech stocks, said Motamed. Liquidity provided by the Federal Reserve has helped mask some inconvenient truths lurking beneath the major stock market indexes.

Motamed said that most of the S&P’s 500 cash flow growth over the last five years came from only five stocks—Facebook, Alphabet, Microsoft, Amazon and Apple. “These behemoths have done great, but they are facing antitrust issues,” he said. Indeed, both political parties don’t seem to be able to agree on anything except the need to rein in Big Tech.

Besides antitrust problems, the big five tech companies could be vulnerable to margin compression. It’s the rest of the tech sector that has Motamed worried.

Many smaller tech companies aren’t making any money and their prospects for turning future profits are slim. Most are facing competitive pressures from well-financed new entrants with what for now is a virtually unlimited supply of venture capital.

Then there is the SPAC phenomenon and its influence on the ETF and index universes. A number of indexes and ETFs are throwing out real companies selling at two times sales and replacing them with SPACs selling at 12 times sales.

Investors also need to realize the wealth gap in America “has gotten so big it can’t last,” Motamed continued. “I see serious consequences arising.”

He might favor a stimulus bill that targeted those in need and was devoted to programs like infrastructure that could improve productivity. While the intentions of the plan are good, the contours of the proposed stimulus bill indicate that it is simply another scattershot income transfer program to pump money into the economy whether people need it or not.