00:05:29 · Ryan Detrick, Anthony Pompliano
I've talked with you for a couple years about these cycles that last longer. You think I think the sideways action for five months, it's frustrating. Everybody is a good thing. And we're gonna continue to go higher here before this year is over. [00:05:40] S2: Let's talk about this idea of breadth in, in the market. So, Phil Rosen, who is a friend of yours and I's, he recently put out this chart and blew my mind. Right? Because it's such a narrative violation. What he said was the average stock rose during the dot com bust. And he shows that the S and P 500 during the dot com bust was down almost 20%. But if you take the equal weight S and P 500, it actually was up 5.6% during the same time period. Is that kind of what we're seeing now is everyone is paying attention to tech and kind of sentiment is tied to the AI trade, but actually the rest of the market is still continuing to be strong and and doing well?
00:06:14 · Ryan Detrick
[00:06:14] S1: Yeah. We think so. And shout out to... You've joined Phil a couple times on his podcast. I love listening to that. So you guys need to do that more often. That's really great stuff. And that's very true because of the late 90s, that's when I started getting the bug and all this stuff. I thought tech was all you could own. And then yeah, it crashed and everybody lost a lot of money on leverage and all the trouble that we see. But then you look back and you realize, there were sectors that did really well in 2001, 2002. Now, it was still a bear market. It wasn't like rip roaring, but the rotation was real. I mean, work with a guy named Sonova Gies on our team. He did some really interesting work on this stuff. And again, it's like, yeah, tech was down, but a lot of other groups did well. Now, think still where we are right now, we're not so sure though the tech trade's done, right? I mean, I think tech has taken its break here. The hyper scalars are still spinning. There's still positive things that are taking place out there. And I'm not a huge valuations guy, but I mean, Dan Ives know he's been on with you a couple of times. I mean, NVIDIA is the cheapest has been in a long time. Amazon is cheapest has been since it's been a publicly traded company. I mean, are some really nice valuations on some companies that make a lot of money and are still growing very, very quickly on the tech side of things. Last thing we say tech or bust. I I don't think this tech trade's over, but I still encouraged by the fact that healthcare is ripping, staples are ripping, different areas have taken that baton when tech took a little bit of a step back, but I still think tech is probably gonna lead us into next year.
00:07:35 · Anthony Pompliano
[00:07:35] S2: Now when you look at, NVIDIA being the cheapest it's ever been as a public company, what does that tell you? Is that like the market is pricing in that they're gonna get disrupted? Is that the market saying it was too overvalued before and now this is a healthier valuation? Is that people saying we don't believe your future projections? Like, what do you take away from something like that?
00:07:53 · Ryan Detrick, Anthony Pompliano
[00:07:53] S1: Yeah, think it's a combination of those and it's kind of easy answer. I mean, I will say this much, like when we look at major peaks, right? You tend to get expansion in multiples. And this isn't just this cycle. These are all these different cycles, Anthony. And you look at it, I mean, yes, the valuations on the S and 500 are down like 15%, yet the S and P's ballpark up 12 or 13% the time we're doing this. How in the world is that possible? If you would have told me multiples would be down like this this year, I don't think I would have thought the market would be up this much. It's because earnings growth has grown over 30% this year, is why. And again, you know, then you can think of it like, well, what if more confidence comes back? It's this whole thing I was kind of talking a couple questions ago about. Not a lot of confidence out there and with multiple contraction. Well, listen, with yields doing what they're doing, history tells us higher yields, multiple contraction is how this tends to work. At the same time, you know, earnings are justifying this, and I think with some more good news, multiple expansion. Just imagine last thing on this. Just imagine if earnings stay strong, the bull market keeps going, we start to get multiple expansion, which I think is probably the play next year. Those are all still positives for investors in our opinion. [00:08:58] S2: Now what do you think the bears have right? What is the biggest critique that you're like, you know what? I I actually agree with that, with that issue.
00:09:06 · Ryan Detrick
[00:09:06] S1: Yeah. I mean, I I talked about it a second ago. The credit default swaps on a lot of these hyperscalers, NVIDIA, Amazon, obviously, some of the neo clouds. I mean, those are really, really blowing out. SpaceX. I mean, day you turn around, one of these companies are saying we're gonna spend another 10,000,000,000 here, 50,000,000,000 there. Meta's gonna sell 90,000,000,000 here to go buy... To build more data centers. I'm not saying the bears are right, but when I see all of that, it's like there's a lot of... I'm not saying it's not obvious here. There's a lot of spending going on, like more than we've ever seen, more than the railroads in the 1860s, more than the infrastructure highways in the 1950s, the space race, even more than the Internet bubble boom of the 1990s. So there's a lot of money being put at this. So we saw with Meta last week, they said, things are great. Then you look, it's like, ah, negative cash flow and the stocks down seven or 8% last Thursday. So those are the things that have our attention, but then it comes back to what we just said. Just don't go all in on tech. I mean, there's other areas, they diversified. I mean, what's happened when South Korea just crashed not that long ago, a week or two ago? What happened? Well, every single day Europe was higher. I mean, it's like just keep a diversified portfolio, stay overweight equities is one thing we've been preaching for a long time now. And I still think you're gonna benefit from it. But I don't know. I just don't think this tech wave is over. What's our buddy Dan Ives say? It's like, maybe it's one in the morning. I mean, this party still has some time left to it, think, and tech's probably gonna come back.
00:10:24 · Anthony Pompliano, Ryan Detrick
[00:10:24] S2: When you think about this technology, there's many different ways to play. You can go to the app layer. You can go to, you know, powered LAN, the whole thing. How do you see your clients actually getting exposure? [00:10:35] S1: Mhmm. Yes. Good one there. So we are... We manage about $9,100,000,000 on on the Carson Investment Research team for financial advisors all over the country and their clients. We, you know, we have a slight overweight to technology. I mean, XLK. You know, we're not getting too cute, too specific with it. We do have some more tactical models. We've had some semiconductor exposure. We've had some, software exposure. We have momentum. I mean, high momentum is another way potentially to play some of this. The high momentum's come back in a big way as we know. You know, we've looked the last three years, look at high momentum relative to the excess returns over the S and P 500 the last three years, even after this huge momentum almost crash that we've seen, Anthony, last month or so, still in ninety fifth percentile. So that tells you how well momentum's done. So really momentum, a little bit overweight tech, owning some software, owning some semiconductors. Those are those are ways we've done it now. Are we all in on like neo clouds and things like that? No, No. We're not getting to quite that specific of a level. That's how we're that's how we're doing it.