AMD Stock is days AWAY from major move‼️

00:27:20
https://www.youtube.com/watch?v=uvJ9QGC1MFY

Summary

TLDRThe discussion focuses on investment strategies, particularly regarding AMD stock. The speaker, drawing on 16 years of experience, emphasizes the importance of a long-term perspective, encouraging investors to buy stocks during short-term price declines, as this can lead to significant future profits. He projects AMD could exceed $400 per share within three years, asserting that current lower prices present a buying opportunity. The conversation also touches on broader market comparisons and the necessity for investors to understand financial statements, management strategies, and projected growth rates. Moreover, it highlights the complexities of the tech sector, especially regarding AI's influence on stock valuations, and discusses potential investment opportunities in emerging markets due to their lower valuation metrics compared to US markets.

Takeaways

  • 📉 Don’t panic when stocks drop; view it as an opportunity to buy more.
  • 📈 Long-term investment strategies outweigh short-term fluctuations.
  • 🔍 Understanding financial statements is crucial for investors.
  • 🌍 Emerging markets could offer lucrative opportunities due to low valuations.
  • 📊 Projecting future growth is essential for successful investing.
  • 💡 Catching a falling knife can lead to significant gains if timed right.
  • 💰 Buying shares at lower prices increases potential profits.
  • 🔄 The focus should be on long-term gains, not immediate losses.
  • 👨‍🏫 Investing education is vital for navigating market challenges.
  • 🖥️ Tech sector investments are influenced by economic cycles and capex trends.

Timeline

  • 00:00:00 - 00:05:00

    The speaker emphasizes the importance of understanding stock market dynamics, especially for newer investors, encouraging a long-term perspective rather than short-term price fluctuations. He illustrates how to view stock drops as buying opportunities rather than losses, especially with AMD, which he believes has significant growth potential over the coming years.

  • 00:05:00 - 00:10:00

    He expresses confidence in AMD's future performance, projecting it could reach $400 per share in three years. The speaker stresses the importance of acquiring shares at lower prices for maximizing future profits while highlighting his own substantial gains in other stocks.

  • 00:10:00 - 00:15:00

    The discussion shifts to broader market strategies, with a focus on emerging markets and international stocks, particularly China, advocating for investment based on favorable valuations despite political and economic concerns.

  • 00:15:00 - 00:20:00

    Attention is drawn to the technology and AI sectors, particularly with companies like Microsoft and NVIDIA. The speaker acknowledges that growth rates may slow down due to capex scrutiny but suggests that NVIDIA will continue to see revenue growth albeit at a more modest rate than before.

  • 00:20:00 - 00:27:20

    The dialogue concludes with cautious optimism for stocks amid potential volatility, highlighting the importance of mindful investing and the challenges posed by economic conditions that can affect both U.S. and international markets.

Show more

Mind Map

Video Q&A

  • What should new investors do if a stock they own is going down?

    View it as an opportunity to buy more shares at lower prices instead of panicking.

  • Why is it advisable to buy stocks when prices are down?

    Lower prices can lead to higher profits in the long term as the stock value increases.

  • What are key factors to consider when investing long-term?

    Understanding financial statements, managing portfolios, and projecting future growth.

  • Should investors be worried about current market trends?

    Investors should focus on long-term gains rather than short-term market fluctuations.

  • What sectors might be undervalued currently?

    Emerging markets and sectors outside the US, particularly in Asia, may present buying opportunities.

  • Is AMD a good long-term investment?

    Yes, the speaker believes AMD could perform well in the next few years.

  • What can influence stock pricing in the tech sector?

    Capex spending, AI trends, and broader market downturns can significantly affect tech stocks.

  • What skills are necessary for becoming a successful investor?

    Mastering financial analysis, understanding market trends, and applying strategic portfolio management.

  • How do economic cycles affect tech stocks?

    Economic slowdowns can lead to reduced spending, impacting revenue growth for tech companies.

  • What is the significance of 'catching a falling knife' in investing?

    It refers to buying a stock after a significant drop, which can lead to high returns if the company recovers.

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Subtitles
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  • 00:00:00
    now let's go ahead and discuss AMD and I
  • 00:00:02
    understand there's a lot of investors
  • 00:00:04
    that are newer to the market that just
  • 00:00:05
    got in in the last few months right um
  • 00:00:08
    that don't really understand how to view
  • 00:00:10
    something like this so as somebody
  • 00:00:11
    that's got 16 years of experience here
  • 00:00:13
    and has millions of dollars of games
  • 00:00:14
    right here's how I view and here's a
  • 00:00:17
    proper way to view a stock you're buying
  • 00:00:20
    going down in the short term right
  • 00:00:21
    because I understand like newer
  • 00:00:23
    investors if you don't have much
  • 00:00:24
    experience you don't know much about the
  • 00:00:25
    market right you you you know you you're
  • 00:00:28
    just kind of like oh my gosh like what's
  • 00:00:29
    going on the Stock's going down this is
  • 00:00:31
    bad right and you hear a lot of these
  • 00:00:32
    bad things that that you know aren't
  • 00:00:35
    true or aren't accurate like you know
  • 00:00:36
    catching a fallen knife and all these
  • 00:00:38
    sorts of things that it's just complete
  • 00:00:39
    BS right I love to catch Fallen knives
  • 00:00:42
    and the far majority of the time I make
  • 00:00:44
    so much money coming out of that people
  • 00:00:45
    are like I wish I was there to catch
  • 00:00:46
    that Fallen knife with you right and so
  • 00:00:49
    you got to understand how to view
  • 00:00:50
    something like this you don't view it
  • 00:00:51
    from a context or a lens of like ah you
  • 00:00:54
    know it's going down that means bad no
  • 00:00:56
    no no no no if you guys watch the video
  • 00:00:58
    I did last night on the main channel
  • 00:01:00
    right I'm not sure if you guys follow me
  • 00:01:01
    on the main channel it's called
  • 00:01:02
    Financial
  • 00:01:03
    education I I dove into those seven
  • 00:01:06
    stocks here and I also discussed
  • 00:01:09
    the my price targets for those stocks
  • 00:01:12
    three years out okay and what we found
  • 00:01:14
    is when I ran my AMD numbers I have that
  • 00:01:17
    stock being over $400 a share 3 years
  • 00:01:21
    from now now even if it doesn't go there
  • 00:01:25
    let's just say 250 I still made over a
  • 00:01:28
    double up right on my money it's a
  • 00:01:30
    phenomenal opportunity the stock is a
  • 00:01:32
    phenomenal phenomenal opportunity and so
  • 00:01:35
    I'll take every share I can get my hands
  • 00:01:36
    on right now at these sorts of prices I
  • 00:01:40
    gladly welcome them I'm not selling AMD
  • 00:01:42
    for several years likely right so giving
  • 00:01:45
    that I'm not selling AMD stock for
  • 00:01:47
    several years and I'm trying to buy as
  • 00:01:48
    many shares as possible I would like my
  • 00:01:50
    shares as cheap as I can possibly get my
  • 00:01:52
    hands on them right now like if you told
  • 00:01:54
    me would I rather have AMD be$ 115 today
  • 00:01:56
    or $85 today I'd rather have it be 85
  • 00:01:59
    would I rather have it be 85 or 55 55
  • 00:02:02
    would I have rather have it be $55 or5
  • 00:02:05
    55 please give me AMD for 55 obviously
  • 00:02:08
    it's completely unrealistic as $55 is as
  • 00:02:11
    well right but you get the picture I
  • 00:02:13
    would rather have that stock be as low
  • 00:02:15
    as possible right now cuz I'm buying as
  • 00:02:16
    many shares as possible that are going
  • 00:02:17
    to make me a fortune on money over the
  • 00:02:19
    next few years right that's a way to
  • 00:02:22
    view this if I was buying AMD at $200
  • 00:02:25
    something dollar today is not nearly as
  • 00:02:27
    compelling of a risk reward profile then
  • 00:02:29
    at that point in time right so for
  • 00:02:30
    stocks I'm planning on holding for
  • 00:02:31
    likely several years I don't I don't
  • 00:02:34
    need to I don't need to have that stock
  • 00:02:36
    be any I would rather have it be much
  • 00:02:37
    lower have me be on a loss right now I
  • 00:02:40
    have so many stocks with such insane
  • 00:02:42
    gains I don't need my ego stroked Again
  • 00:02:44
    by having another stock go beast in the
  • 00:02:46
    short term go down in the short term
  • 00:02:48
    that's fine with me if I need to stoke
  • 00:02:51
    my ego I'll pull up I'll pull up my
  • 00:02:53
    portfolio and I I'll look at uh I'll
  • 00:02:55
    look at Tesla on back woo
  • 00:02:57
    2,96 game woo I'll look at
  • 00:03:00
    1700% gain paler 700 if I need to stroke
  • 00:03:03
    my ego I'll look at the $800,000 gain in
  • 00:03:05
    meta I don't need AMD to be up right now
  • 00:03:08
    that's silly silly silly so for any
  • 00:03:10
    newbies in the market right that are
  • 00:03:12
    trying to figure out how to really play
  • 00:03:14
    this game on a high level don't you
  • 00:03:16
    shouldn't need stocks to be at a certain
  • 00:03:18
    price in the short term you want as a
  • 00:03:20
    long-term investor you want to buy these
  • 00:03:22
    shares for as cheap as possible so a
  • 00:03:24
    year from now 2 years from now 3 years
  • 00:03:25
    from now 5 years from now 7 years from
  • 00:03:26
    now you can sell them at massive profits
  • 00:03:29
    right and then redeploy that money into
  • 00:03:31
    the next great opportunities you see out
  • 00:03:32
    there that's a market 101 right and I
  • 00:03:34
    teach all that in my private stock group
  • 00:03:35
    I get you guys I what I teach you in the
  • 00:03:38
    private stock group I teach you all the
  • 00:03:41
    the numbers based stuff you need income
  • 00:03:43
    statements balance sheets how to Value
  • 00:03:44
    growth stocks how to Value dividend
  • 00:03:46
    stocks all that stuff right but it also
  • 00:03:48
    get your mindset right and I think
  • 00:03:49
    that's one of the biggest things that if
  • 00:03:51
    you talk to members in the private stock
  • 00:03:52
    group that they'll say he gets your
  • 00:03:54
    mindset right and and really
  • 00:03:56
    understanding how to view this game as a
  • 00:03:58
    long-term investor to set yourself up
  • 00:04:00
    for long-term success and not just like
  • 00:04:02
    this kind of like uh brain rot that goes
  • 00:04:05
    on out there from from folks right so
  • 00:04:07
    hey it's Jeremy I hope you really
  • 00:04:08
    enjoyed that clip here today listen
  • 00:04:10
    there are three main areas a long-term
  • 00:04:12
    investor has to understand you have to
  • 00:04:15
    understand financial statements income
  • 00:04:17
    statements balance sheets cash flows you
  • 00:04:19
    have to understand in master portfolio
  • 00:04:21
    management and you have to have the
  • 00:04:23
    ability to project what is possible for
  • 00:04:26
    companies in the coming years bearish
  • 00:04:28
    scenarios bullish scenarios all these
  • 00:04:30
    skills can be learned and that's the
  • 00:04:32
    good news and I'm still just a regular
  • 00:04:34
    guy who's out here I just have a lot of
  • 00:04:35
    passion for the market I've learned a
  • 00:04:37
    lot over the last 15 years I had a
  • 00:04:38
    tremendous amount of success and I have
  • 00:04:41
    a dedication to teaching people
  • 00:04:42
    everything I have learned in the past 15
  • 00:04:45
    years I can do it you can do it too you
  • 00:04:48
    can learn all that's required to become
  • 00:04:50
    a great investor in my private group the
  • 00:04:52
    application is going to be down there in
  • 00:04:54
    the description area you can click on
  • 00:04:55
    that fill an application join us in the
  • 00:04:57
    private group get access to all my best
  • 00:04:59
    course curriculums teaching you
  • 00:05:01
    everything that I got in my head and you
  • 00:05:03
    get ability to join our six figure 7
  • 00:05:06
    figure Hall of Fame we have such a
  • 00:05:08
    tremendous Discord is incredible so once
  • 00:05:12
    again description area down there
  • 00:05:14
    there's a link you can apply to join my
  • 00:05:16
    private group in there so you're going
  • 00:05:19
    to be sitting on quite a bit of cash in
  • 00:05:21
    a very strong US dollar environment so
  • 00:05:24
    you got a great currency behind you
  • 00:05:26
    you've got some money to deploy are you
  • 00:05:27
    tempted by some of the other sectors
  • 00:05:30
    around the world does Asia look cheap to
  • 00:05:32
    you or some parts of Europe is there
  • 00:05:33
    anywhere you're thinking of deploying
  • 00:05:35
    your cash outside the United
  • 00:05:37
    States yeah I mean we actually uh took
  • 00:05:41
    some positions in Emerging Markets
  • 00:05:43
    because we think all the rhetoric and
  • 00:05:45
    all the fear around Donald Trump and
  • 00:05:48
    tariffs you know it's funny when you
  • 00:05:50
    hear people just sort of take him at his
  • 00:05:51
    word at oh my God he's going to put 60%
  • 00:05:54
    tariffs on China or whatever and then
  • 00:05:57
    they panic and then you figure out well
  • 00:06:00
    he's a businessman and you've already
  • 00:06:01
    had four years of this where that's a
  • 00:06:03
    starting point in negotiation and where
  • 00:06:05
    you ultimately end up is typically a lot
  • 00:06:07
    better than that so to your point mark
  • 00:06:10
    if you look at the relative valuations
  • 00:06:13
    around the globe yes on a going forward
  • 00:06:15
    basis for 12 months the S&P is sitting
  • 00:06:18
    at about 22 times or so but if you look
  • 00:06:23
    at some of these other markets you've
  • 00:06:25
    got the Nik sitting at about 19 times
  • 00:06:28
    you got the Indian stock Market sitting
  • 00:06:30
    about 20 times but the China stock
  • 00:06:32
    market is sitting about 13 times so a
  • 00:06:36
    lot of these other markets have have
  • 00:06:38
    underperformed for the last 2 three
  • 00:06:40
    years they're very cheap for obvious
  • 00:06:42
    reasons people are afraid of tariffs
  • 00:06:45
    coming out of President Trump but I
  • 00:06:48
    think to some degree and and you saw
  • 00:06:50
    that with some of the moves since the
  • 00:06:52
    beginning of the year is maybe they're a
  • 00:06:54
    little bit overdone and so that's where
  • 00:06:56
    I'm looking because the valuations to
  • 00:06:58
    your point as you brought up are a lot
  • 00:07:00
    more compelling there and then also in
  • 00:07:03
    the us the markets have really been
  • 00:07:05
    driven by seven stocks the Magnificent 7
  • 00:07:09
    and I think there's going to be an AI
  • 00:07:11
    digestion phase and we've been writing
  • 00:07:13
    about this now for several months and
  • 00:07:16
    you're seeing signs of it from what some
  • 00:07:18
    of what Microsoft has said over the past
  • 00:07:20
    month which we can get into but if that
  • 00:07:24
    trade starts to fall apart and given
  • 00:07:26
    you've got seven stocks that are
  • 00:07:28
    somewhat tied to to the AI trade that
  • 00:07:31
    are driving the US market that are you
  • 00:07:33
    know 35% let's say of the S&P 500 and
  • 00:07:37
    are trading at valuations in the low 30
  • 00:07:39
    times range then you've got a huge
  • 00:07:42
    problem potentially and that money could
  • 00:07:44
    also flow into these foreign markets
  • 00:07:47
    that are a lot more hated where the
  • 00:07:50
    valuations are
  • 00:07:51
    cheaper uh Dan we'll pick up on AI and
  • 00:07:55
    chips slightly later just to pick up on
  • 00:07:57
    what you talked about deploying your
  • 00:08:00
    assets in markets uh you know in Asia
  • 00:08:03
    Emerging Markets uh included you talked
  • 00:08:05
    about that low valuation in China and as
  • 00:08:08
    you said it's low for a reason is it
  • 00:08:11
    comp so Dan and myself we don't always
  • 00:08:13
    see ey ey but there's a lot of times
  • 00:08:15
    I'll be honest him and I see I die right
  • 00:08:17
    for instance last year he was heavily
  • 00:08:19
    invested in meta and Amazon guess what
  • 00:08:21
    two of my top four positions are in the
  • 00:08:23
    public to meta is my biggest Amazon I
  • 00:08:25
    believe is my fourth biggest right so
  • 00:08:28
    and then also what have it been talking
  • 00:08:29
    about for a while like specifically with
  • 00:08:32
    Nvidia growth rates are going to
  • 00:08:34
    definitely slow substantially at least
  • 00:08:35
    in my opinion in the back half of 2025
  • 00:08:38
    right and that's going to be kind of a
  • 00:08:39
    moment for people to kind of figure that
  • 00:08:41
    out and I think people are already
  • 00:08:42
    starting to figure that out even though
  • 00:08:43
    it hasn't happened yet right uh but
  • 00:08:46
    based upon kind of where what Nidia
  • 00:08:47
    stock has been doing it looks like
  • 00:08:48
    people are kind of catching up to what
  • 00:08:50
    I've been talking about for several
  • 00:08:51
    months right about that that cycle
  • 00:08:53
    that's coming there where it's going to
  • 00:08:55
    be a major slowdown and people are going
  • 00:08:56
    to be whoa okay because then people are
  • 00:08:58
    going to start to run with conclusions
  • 00:09:00
    about is NVIDIA going to go negative on
  • 00:09:02
    Revenue all those sorts of things will
  • 00:09:03
    start to be talked about right even if
  • 00:09:05
    they don't come true and they don't come
  • 00:09:06
    to fruition it will just start to be
  • 00:09:08
    subjects they'll freak people out right
  • 00:09:10
    oh man could nvidia's revenues go
  • 00:09:11
    negative because we know several times
  • 00:09:13
    in the past nvidia's revenues have
  • 00:09:14
    actually gone negative and so people
  • 00:09:16
    will start having those sorts of
  • 00:09:17
    discussions thinking about 2026 right so
  • 00:09:20
    that's going to be a whole digestion
  • 00:09:21
    cycle like he speaks about so we
  • 00:09:23
    definitely see eye to eye on that enough
  • 00:09:25
    for you right now to be pumping money
  • 00:09:27
    into into that market
  • 00:09:29
    yeah I mean we we own some stocks in
  • 00:09:31
    there but the thing with China which
  • 00:09:35
    makes it difficult is two things they
  • 00:09:39
    they've talked about in the past where
  • 00:09:42
    handing out checks directly to Consumers
  • 00:09:44
    they view it as a form of welfarism
  • 00:09:47
    rightly or wrongly and they don't want
  • 00:09:49
    people to get addicted to that so you
  • 00:09:51
    don't get this over stimulation that
  • 00:09:53
    you've seen in markets like the US in
  • 00:09:56
    particular where they were handing out
  • 00:09:57
    checks for people unemployed or in
  • 00:10:00
    Europe and so you don't have that big
  • 00:10:02
    bazooka effect for lack of a better term
  • 00:10:05
    that will drive valuations and markets
  • 00:10:08
    up on Euphoria and so any kind of
  • 00:10:10
    recovery is likely to be a lot more
  • 00:10:12
    measured the second big big problem
  • 00:10:15
    quite honestly is the same one Japan
  • 00:10:17
    suffered through for decades which is
  • 00:10:20
    there's only two real ways to grow the
  • 00:10:23
    real economy right there's
  • 00:10:25
    population growth and then the productiv
  • 00:10:29
    ity increases on that population grow
  • 00:10:32
    well in China for the first time in 60
  • 00:10:34
    years the population went down and based
  • 00:10:37
    on the three pump massive amounts of
  • 00:10:40
    money into your uh but then he said he
  • 00:10:43
    said real to be fair but I'm just like
  • 00:10:45
    you know can also grow that way too oh
  • 00:10:48
    gosh traffic Trends they're probably
  • 00:10:49
    going to go down for the next decade at
  • 00:10:51
    least and so much like Japan had to
  • 00:10:54
    suffer through that unless you get a
  • 00:10:57
    massive increase in productivity which
  • 00:10:59
    given some of the restrictions on
  • 00:11:01
    technology coming out of the US it's
  • 00:11:04
    hard to believe those are some of the
  • 00:11:05
    things you're going to have to struggle
  • 00:11:07
    with so for us you know we pick cash as
  • 00:11:10
    our top pick but we have four other
  • 00:11:12
    names two of them Cisco and adran are
  • 00:11:15
    sitting in the Telecom Services space we
  • 00:11:18
    like the midcap stocks today one of our
  • 00:11:21
    other top picks which is KBWB which is
  • 00:11:23
    the bank ETF in the US that benefits
  • 00:11:26
    from deregulation and tax cuts so there
  • 00:11:29
    are other names that we like in the US
  • 00:11:31
    we're just saying that it could be a
  • 00:11:32
    very volatile year and don't be
  • 00:11:35
    surprised and that's why we don't have a
  • 00:11:37
    magnificent seven in that group of five
  • 00:11:39
    which we've always had one or two stocks
  • 00:11:41
    in there last year for example we had
  • 00:11:44
    both meta and Amazon in our top five
  • 00:11:46
    picks we don't have one of those names
  • 00:11:48
    in there this year because we do think
  • 00:11:50
    there's some real AI digestion risk and
  • 00:11:53
    there's better places to deploy and all
  • 00:11:55
    of those names I mentioned um midcap
  • 00:11:58
    value the bank ETF ad Francisco those
  • 00:12:01
    other for names they all have very
  • 00:12:03
    compelling valuations relative to their
  • 00:12:05
    peers or the
  • 00:12:07
    market you like it always is interesting
  • 00:12:10
    to see like societies over time like
  • 00:12:13
    viewing let's say uh people having kids
  • 00:12:15
    as like a bad thing right like China had
  • 00:12:17
    their one child policy for the longest
  • 00:12:19
    time right um that was a whole situation
  • 00:12:21
    and like it was like demonized if you
  • 00:12:23
    had a bunch of kids in China right and
  • 00:12:25
    it's just like crazy for me to think
  • 00:12:26
    about that cuz it's like like people
  • 00:12:29
    kids is the best thing for the economy
  • 00:12:31
    it's just like there's no debating that
  • 00:12:33
    like of course it is right like you if
  • 00:12:34
    you want to grow your economy you want
  • 00:12:36
    to grow your nation you want to grow
  • 00:12:38
    your country like what are you going to
  • 00:12:39
    do like you need more people right like
  • 00:12:41
    if I had a choice would I rather there
  • 00:12:43
    be 330 million Americans or 660 million
  • 00:12:47
    Americans as an American
  • 00:12:50
    that has a business I much rather have
  • 00:12:53
    there'd be 660 million Americans and 330
  • 00:12:56
    if we had 660 million Americans of 3 30
  • 00:13:00
    my YouTube views would probably be twice
  • 00:13:01
    as high right I'd probably have twice as
  • 00:13:04
    many people to sell THX stocks.com too
  • 00:13:06
    all that stuff right like all my
  • 00:13:09
    companies all my stocks I own would have
  • 00:13:12
    double the amount of consumers and if
  • 00:13:14
    you would just say even if the GDP was
  • 00:13:16
    the same or not the GDP if you GDP per
  • 00:13:19
    capita if you say the GDP per capita was
  • 00:13:21
    the same right the average incomes were
  • 00:13:22
    the same right it's just a massive
  • 00:13:24
    amount more people to sell to so yes
  • 00:13:28
    like you know yeah it's always
  • 00:13:31
    interesting cuz I'm
  • 00:13:32
    like if anything I think countries
  • 00:13:34
    should be encouraging their people to
  • 00:13:36
    have children not if you look at almost
  • 00:13:39
    any society where they start to go into
  • 00:13:41
    population decline it's not it's not a
  • 00:13:43
    great thing for that country it's not a
  • 00:13:45
    great thing man it's just it's the way
  • 00:13:47
    it is why not small cats they also have
  • 00:13:50
    compelling
  • 00:13:51
    valuations well it's a great question
  • 00:13:55
    has Linda the big reason the Fong if you
  • 00:13:57
    think about what I'm worried about which
  • 00:13:59
    is the Fed having to raise rates
  • 00:14:01
    potentially as you get towards the end
  • 00:14:03
    of this year small caps struggle in that
  • 00:14:07
    environment because they just happen to
  • 00:14:09
    be smaller and so a rate environment
  • 00:14:12
    that's more beneficial to them really
  • 00:14:13
    helps them out a lot more and also if
  • 00:14:16
    the economy is slowing down they don't
  • 00:14:19
    have as much revenues to cover the fixed
  • 00:14:21
    costs if you look at the midcap space by
  • 00:14:24
    definition they're midcap right so
  • 00:14:26
    they're a little bit bigger they can
  • 00:14:27
    handle a tougher tougher operating
  • 00:14:29
    environment but that's also why we say
  • 00:14:31
    it's midcap value not midcap because
  • 00:14:35
    midcap growth has also benefited from
  • 00:14:37
    the same trends that have driven the
  • 00:14:39
    overall market and that's why we're
  • 00:14:41
    saying midcap value is more interesting
  • 00:14:44
    because the S&P 500 over the last five
  • 00:14:46
    years if you think about it first it was
  • 00:14:49
    a couple of years of investment during
  • 00:14:51
    covid because everybody's going online
  • 00:14:53
    so you have all this internet
  • 00:14:55
    infrastructure spending happening then
  • 00:14:57
    for the last two years it's it's all
  • 00:14:59
    been about Ai and so the S&P 500 over
  • 00:15:02
    the last 5 years is up
  • 00:15:04
    82% the midcap value space has
  • 00:15:07
    underperformed that by 35% over that
  • 00:15:10
    period of time and trades it a 17
  • 00:15:13
    multiple not the 25 times trailing
  • 00:15:16
    multiple at the S&P 500's trading at so
  • 00:15:20
    and you've seen this during 2022 when
  • 00:15:23
    the Fed was hiking really fast and quite
  • 00:15:25
    honestly during 0102 when you had the
  • 00:15:28
    tech bubble break which if it gets
  • 00:15:30
    really bad in AI I I don't think it'll
  • 00:15:32
    be that bad but it could happen that
  • 00:15:35
    also held up very very well and so in a
  • 00:15:37
    tougher environment they also hold up
  • 00:15:39
    nicely and things like tax cuts and
  • 00:15:42
    deregulation help the midcap names more
  • 00:15:45
    than they're going to help the S&P 500
  • 00:15:47
    names where they've already got low
  • 00:15:48
    borrowing cost they're pretty they're
  • 00:15:51
    huge they don't care as much about
  • 00:15:54
    that all right Dan this malan you're
  • 00:15:57
    talking about the potential risk of of
  • 00:15:59
    an interest rate hike in the states well
  • 00:16:01
    we got one very much on the radar here
  • 00:16:03
    in Asia there's a lot of talk that the
  • 00:16:04
    bank of Japan could be raising interest
  • 00:16:07
    rates next week of course some very very
  • 00:16:08
    low levels and that may well give some
  • 00:16:11
    support to the Japanese Yen do you think
  • 00:16:13
    that will work out in some way as a
  • 00:16:15
    positive people will be more attracted
  • 00:16:17
    to Japanese markets because of a
  • 00:16:18
    stronger currency or is that going to be
  • 00:16:20
    something which breaks the sentiment
  • 00:16:22
    there' be a lot of money flush rushing
  • 00:16:24
    into Japan over the past couple of years
  • 00:16:26
    is it is it good or bad if they have an
  • 00:16:27
    interest rate hike next week
  • 00:16:30
    Mark you frame that beautifully I mean I
  • 00:16:33
    always say it's never the data it's the
  • 00:16:35
    Market's reaction to the data right
  • 00:16:38
    because if I tell you hey inflation's
  • 00:16:41
    going to go up 6% over a year you may go
  • 00:16:44
    oh my God that's terrible for markets
  • 00:16:46
    except if it's 2021 in which case the
  • 00:16:49
    S&P went up
  • 00:16:50
    27% right so I think it'll actually be
  • 00:16:54
    good for Japan because the reason
  • 00:16:56
    they're having to raise rates is Maybe
  • 00:16:58
    faster growth some inflation people
  • 00:17:01
    really hate deflation and Japan's been
  • 00:17:04
    struggling with that for decades and so
  • 00:17:07
    I think in Japan's case with the support
  • 00:17:10
    as you rightly pointed out for the
  • 00:17:12
    currency if I were to bet I think it's
  • 00:17:14
    going to be more uh supportive for their
  • 00:17:17
    economy versus negative and so that's
  • 00:17:19
    kind of how I would think about it as it
  • 00:17:21
    relates to Japan specifically the
  • 00:17:23
    valuations because the market has
  • 00:17:25
    rallied so much um from the lows it's
  • 00:17:28
    not hugely compelling at 19 that's like
  • 00:17:31
    a flash crash right there man look at
  • 00:17:33
    that move down so dramatic right and
  • 00:17:35
    then it just got right back to where it
  • 00:17:36
    was supposed to be versus you know the
  • 00:17:39
    China Market sitting closer to 13 times
  • 00:17:41
    but it is lower than the S&P at 22 and
  • 00:17:44
    obviously a lot you know the AI
  • 00:17:46
    companies for the most part are all
  • 00:17:48
    sitting in the US and so foreign markets
  • 00:17:51
    by definition have have struggled
  • 00:17:53
    because of that and the dollar as you
  • 00:17:56
    pointed out relative to you don't play
  • 00:17:58
    the Chinese market Market or the Chinese
  • 00:17:59
    stocks here's here's the issue those
  • 00:18:01
    Chinese stocks and those the Chinese
  • 00:18:03
    indexes they always look cheap versus US
  • 00:18:05
    peers always looks
  • 00:18:08
    cheap always looks cheap always will
  • 00:18:11
    look cheap unless China makes some
  • 00:18:14
    massive changes with
  • 00:18:17
    transparency with being much much more
  • 00:18:20
    business friendly especially the top
  • 00:18:22
    companies trust gets built a lot more
  • 00:18:25
    like outside of that it will always
  • 00:18:27
    trade at a significant discount to the
  • 00:18:29
    US markets and so won't Chinese stocks
  • 00:18:31
    and the Dollar by itself has gone up
  • 00:18:34
    from 101 at the end of Q3 to about 109
  • 00:18:38
    at the end of Q4 and so that's put
  • 00:18:41
    tremendous pressure on anything that
  • 00:18:43
    isn't us-based right for that reason and
  • 00:18:46
    so we'll see what happens going forward
  • 00:18:48
    but I think the way you framed it was
  • 00:18:51
    perfect right and I tend to be more on
  • 00:18:53
    the bullish side on it you know Dan this
  • 00:18:55
    is a theme in in a tech space isn't it I
  • 00:18:58
    mean that's what we're seeing uh with
  • 00:18:59
    the max 7 as well they just keep biding
  • 00:19:02
    up the
  • 00:19:04
    valuations yeah absolutely and quite
  • 00:19:06
    honestly for the last couple of years
  • 00:19:08
    that's been the right thing to do
  • 00:19:10
    because the AI trend has been so strong
  • 00:19:13
    but I think what investors should be
  • 00:19:15
    concerned about is if you look at the
  • 00:19:18
    biggest spender by far on AI capex it's
  • 00:19:22
    Microsoft and part of that is obviously
  • 00:19:26
    Microsoft has a 49% economic interest
  • 00:19:28
    interest in open AI which started this
  • 00:19:30
    whole AI theme which with their
  • 00:19:32
    introduction of chat GPT at the end of
  • 00:19:35
    2022 and Microsoft's capex has been
  • 00:19:39
    growing at uh 70 to 80% year-over-year
  • 00:19:43
    for the last six quarters if you include
  • 00:19:46
    December but on January 3rd they came
  • 00:19:49
    out in a blog post and said we're going
  • 00:19:51
    to spend 80 billion on capex in their
  • 00:19:54
    next fiscal year which ends in June M
  • 00:19:57
    but if you go and do the math they
  • 00:19:59
    already spent 20 billion in September
  • 00:20:01
    quarter they guided that up for the
  • 00:20:03
    December quarter and so you go wait a
  • 00:20:06
    minute that means there's more than 40
  • 00:20:07
    billion in the first 6 months of fiscal
  • 00:20:09
    25 which means they going to spend less
  • 00:20:11
    than that in the next six months after
  • 00:20:13
    growing over s growing 70 to 80%
  • 00:20:17
    year-over-year for the last six quarters
  • 00:20:19
    so if you're any kind of chip company
  • 00:20:21
    that sells into Microsoft or any of
  • 00:20:24
    these other big hyperscalers I think
  • 00:20:26
    you're going to see dramatic slowdown in
  • 00:20:28
    r
  • 00:20:29
    by the time you get to the middle of the
  • 00:20:30
    year and by the way that's what you saw
  • 00:20:33
    after all that investment during Co cuz
  • 00:20:36
    don't forget Nvidia which is the poster
  • 00:20:38
    child for this trade their revenues
  • 00:20:42
    before covid were negative
  • 00:20:43
    year-over-year for about three quarters
  • 00:20:46
    and then covid hit and then the revenu
  • 00:20:48
    surged to being up over 80%
  • 00:20:51
    year-over-year by the beginning of 2021
  • 00:20:53
    because we're all locked up right we're
  • 00:20:55
    all going online then once we all get
  • 00:20:58
    unlocked locked those revenues went from
  • 00:21:00
    up over 80% year-over-year to down over
  • 00:21:04
    20% year-over-year the stock got crushed
  • 00:21:07
    went down over 60% during that move from
  • 00:21:10
    Peak to trough and then you got the AI
  • 00:21:13
    trade and you're back up to these levels
  • 00:21:16
    but I think you're going to see another
  • 00:21:17
    slowdown after growing for two years
  • 00:21:19
    over 100% year-over-year in
  • 00:21:21
    revenues Dan Nvidia is not in your top
  • 00:21:25
    five but that doesn't mean you can't
  • 00:21:27
    still make money with Nvidia a lot of uh
  • 00:21:30
    the guests that we've had on the show
  • 00:21:31
    say that it is a must in your portfolio
  • 00:21:34
    one place I'll push back on the negative
  • 00:21:36
    side for NVIDIA is just because the
  • 00:21:41
    companies you know might not be growing
  • 00:21:43
    as fast that's called by the back half
  • 00:21:45
    of 2025 2026 2027 doesn't mean
  • 00:21:48
    necessarily the company's going to go
  • 00:21:50
    down on revenues so I think if you're
  • 00:21:53
    trying to price in like you know
  • 00:21:55
    revenues are going to go negative like
  • 00:21:57
    past periods I would be care careful
  • 00:21:58
    about that and the reason being is
  • 00:22:00
    NVIDIA keeps launching these better AI
  • 00:22:02
    chips it's going to likely be year after
  • 00:22:04
    year after year and since we're in kind
  • 00:22:06
    of a AI War over this next number of
  • 00:22:09
    years these companies are going to have
  • 00:22:11
    to keep upgrading right so maybe they
  • 00:22:14
    won't increase the capex as dramatically
  • 00:22:18
    but they still might have to increase at
  • 00:22:20
    some point in time right and so yeah
  • 00:22:22
    just be careful about betting Nvidia
  • 00:22:24
    revenues going negative I feel much more
  • 00:22:26
    comfortable about maybe betting that
  • 00:22:28
    their revenu end up evening out maybe
  • 00:22:31
    more in the 10 to 15% range longer term
  • 00:22:34
    right obviously 25 is still going to be
  • 00:22:35
    a really nice growth year for NVIDIA uh
  • 00:22:38
    Revenue wise but then after that you
  • 00:22:40
    know I would kind of think about Nvidia
  • 00:22:41
    maybe let's call it 10 to 20% Revenue
  • 00:22:44
    growth for the next number of years
  • 00:22:45
    after that AMD is a little different
  • 00:22:47
    though AMD I really view that as a 20
  • 00:22:50
    plus% Revenue grower for the next like
  • 00:22:54
    number number of years right cuz
  • 00:22:56
    remember AMD is playing a lot of catchup
  • 00:22:57
    here in regards to this where nvidia's
  • 00:23:00
    pulled forward a massive Monumental
  • 00:23:03
    amount of demand know that it's risen
  • 00:23:05
    800% over the last two years there's
  • 00:23:08
    still money to be had right even if it's
  • 00:23:10
    not going to be at the pace that we've
  • 00:23:12
    been seeing in the last two
  • 00:23:14
    years as I said the last time you had to
  • 00:23:17
    go through a digestion phase after covid
  • 00:23:21
    Invidia stock went down over 60% 60 from
  • 00:23:25
    Peak to trough right now forecasts are
  • 00:23:28
    for media's revenues to grow over 50%
  • 00:23:30
    this year I don't think it's going to be
  • 00:23:32
    even close because if you think about it
  • 00:23:35
    this way if your biggest customer is
  • 00:23:37
    Microsoft and it's growing and it's
  • 00:23:39
    going from growing their capex 70 to 80%
  • 00:23:44
    to basically zero in six
  • 00:23:47
    months you've got to think through that
  • 00:23:49
    because all of these big hyperscalers
  • 00:23:52
    they kind of
  • 00:23:53
    move together to some degree and so if
  • 00:23:57
    Amazon and
  • 00:23:59
    Google Etc see Microsoft spending
  • 00:24:02
    slowing down that much and by the way
  • 00:24:04
    it's slowing down for a good reason
  • 00:24:06
    because you're spending all this money
  • 00:24:07
    but the question is have you seen any
  • 00:24:10
    return on that investment have you seen
  • 00:24:12
    any return on investment but yeah that's
  • 00:24:14
    going to happen with all of them all of
  • 00:24:15
    them are going to slow down um it's
  • 00:24:17
    going to start in 25 and it'll slow even
  • 00:24:20
    more in 2026 that does not mean they're
  • 00:24:22
    going to stop spending they're going to
  • 00:24:24
    stop buying these chips right no is not
  • 00:24:26
    how this works but the there it will be
  • 00:24:29
    a significant significant slowdown over
  • 00:24:31
    the next two years in that spending
  • 00:24:34
    right and the spending on capex could
  • 00:24:37
    end up being much more in line with
  • 00:24:40
    revenue or maybe slightly lower Revenue
  • 00:24:42
    so the way I would think about it is
  • 00:24:43
    let's say let's just use meta as an
  • 00:24:45
    example let's say meta is growing an
  • 00:24:47
    average of 15% Revenue per year for the
  • 00:24:50
    next number of years right which is a
  • 00:24:52
    pretty fair number to consider metag
  • 00:24:54
    grown 15% a year revenues for the next
  • 00:24:56
    you know many many years so if that's
  • 00:24:57
    the case maybe meta grows you know capex
  • 00:25:01
    in future years by 15% also or maybe
  • 00:25:04
    they do a little less maybe it's like
  • 00:25:05
    12% or 11% or something like that right
  • 00:25:08
    but in terms of this crazy capex cycle
  • 00:25:10
    where it was far outpacing Revenue I
  • 00:25:12
    think that's coming to a close on that
  • 00:25:15
    chapter um over this next one to two
  • 00:25:17
    years and then I believe it's going to
  • 00:25:18
    be more in line with the company's
  • 00:25:20
    revenues going up or less than what the
  • 00:25:22
    company's Revenue so then if you got a
  • 00:25:24
    company like Google that maybe growing
  • 00:25:26
    11% per year Revenue you know maybe they
  • 00:25:29
    start only growing capex by 7% or five
  • 00:25:32
    5% or something like that right so
  • 00:25:34
    that's the way I would view it so if you
  • 00:25:37
    think about Microsoft in particular
  • 00:25:39
    especially given their relationship with
  • 00:25:40
    open AI when they reported the June
  • 00:25:43
    quarter they guided revenues below
  • 00:25:45
    consensus for September despite capex
  • 00:25:48
    expectations going up then when they
  • 00:25:50
    reported the September quarter they
  • 00:25:52
    guided revenues below expectations for
  • 00:25:55
    December despite capex expectations
  • 00:25:57
    going up so at a certain point if you're
  • 00:26:00
    not seeing the return you're going to
  • 00:26:01
    slow down that spending and by the way
  • 00:26:03
    that goes for the other big guys as well
  • 00:26:05
    which is why I think you're going to see
  • 00:26:07
    capex slow for the industry as a whole
  • 00:26:09
    from growing 50 to 60% down into a 10 to
  • 00:26:12
    20% range and I think Nvidia I would be
  • 00:26:16
    very careful on that stock this year now
  • 00:26:19
    it doesn't mean over the next you know
  • 00:26:23
    three years two years you can't see
  • 00:26:25
    still growth but I don't think anybody
  • 00:26:27
    wants to go go through a 60% loss like
  • 00:26:30
    they saw after the co hangover and you
  • 00:26:34
    could see some very big downward
  • 00:26:36
    revisions especially when forecasts are
  • 00:26:38
    for 50% growth for nvidia's revenues in
  • 00:26:41
    calendar 25 so right that's why I think
  • 00:26:44
    you have to be very careful of all of
  • 00:26:46
    the AI related stocks because if Nvidia
  • 00:26:49
    gets hit and there's an issue
  • 00:26:50
    everything's going to go down yeah I
  • 00:26:52
    would be careful uh betting against uh
  • 00:26:54
    you know thinking Nvidia is going to go
  • 00:26:56
    down 60% from here um you you know I
  • 00:26:58
    think that's really hard to do you in
  • 00:27:00
    order to do that You' have to have
  • 00:27:01
    market crash on top of that like you did
  • 00:27:04
    with the NASDAQ in 22 on top of that you
  • 00:27:06
    have to have their revenues go
  • 00:27:07
    significantly negative right I think
  • 00:27:10
    that's going to be hard to do to get
  • 00:27:11
    their revenues to go literally negative
  • 00:27:13
    okay
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