Transcription
So, Tom Lee just came off a CNBC interview where he dropped a lot of interesting insights about the market and the current dip. He also just released four new stocks added to the new "Granny Shots" list, which I'm going to give away right now: Amazon, Meta, JP Morgan, S&P Global, and Accenture. There you go! Right away. Don't click anything, don't smash anything, don't buy anything. The list is first. I respect your time, but I want you to pay attention to this because he was on CNBC and explained in detail, giving a lot of interesting insights about this current dip in tech stocks and why this is a massive buying opportunity.
I want you to listen to Tom Lee, then I'm going to give you my take. At the end, I'll share some insights about my own top 25 stocks list, which you don't want to miss. So stick around to the end; this is not the sort of video you want to skip. But first, first thing first, let's watch Tom Lee. The market has eluded extended periods of weakness because investors are bearish at the highs at a time when there's record cash on the sideline. So to us, this is a market that is very skeptical of these new highs. That bearishness and concerns about tariffs means there's a wall of worry, so I think this is actually a very positive setup for stocks.
Inflation expectation surveys matter to the Fed because they're concerned about whether or not consumers are actually raising their inflation expectations, and that would in fact be bad. But we have to keep in mind the Yish surveys do seem to be polluted by political affiliation. When you break down respondents by Democratic responses, they've gone from seeing inflation under 2% before the election to over 5% today. Republican respondents have gone from 4% to basically zero. In fact, if you look at the distribution of responses for those Democratic respondents, almost 7% think inflation is currently at 25%. So I think that there is a lot of pollution in that data, and I think it's probably pretty typical what happens when there is a change in administration. But I hope the Fed is aware of that political dynamic.
I think investors can cite a lot of things top of mind why short-term they're expecting the turbulence. We're coming up to back-to-back 20% years. We know there's significant uncertainty about tariffs, and our latest client survey—63% of our clients, and that's over a clear almost 2000 respondents—said tariffs or deportations is the biggest risk. That's up from 54% last month. But these are not things that have necessarily long-term negative effects. In fact, things like the number of Fed cuts is actually back towards two, and I think there's a possibility the Fed may actually make cuts sooner. I think one thing the market is being complacent on is thinking the Fed's on hold. But if this turbulence causes hiring to slow, I actually think the Fed could actually be making cuts a lot sooner, which would be positive for stocks.
Investors really want to own stocks that actually have structural advantages, and that's best evidenced by revenue growth, margin expansion, earnings growth, and reasonable prices. So the reason growth stocks will still outperform is that in a period like this, if we have macro uncertainty, they're going to be names with some visibility. It's not pleasant to own a growth stock today, but we know the lesson of 2025 is that these pullbacks have not been deep, and investors have been buying these dips. So I don't think today is any different. In fact, it's no different than the Deep Seek Panic or the Tariff Day Panic or the CPI Panic. So I think this is going to be a buying opportunity.
So you know, Tom Lee attracts a lot of criticism. People call him "improbable"; they say all sorts of things about him being a pumper, whatever. The fact of the matter is that he had a lot of calls right over the past few years, but also he had some wrong. Nobody hits 100%, but what I like about him and why I listen to him is because, number one, he's smart, he's data-driven, and he has high conviction which he bets on, which I absolutely believe is the right way to be a long-term investor. Now, does his thesis in today's CNBC interview hold up well? Let's break it down into four pieces. Number one, he says that the market is currently experiencing a lot of skepticism, and that skepticism is a good thing for the markets. It almost sounds weird—what are you talking about, Tom? That's counterintuitive. Well, it's not really. Look at the fear and greed index; it says fear. What Warren Buffett told you for years and years and years: when everybody's fearful, I'm greedy; when everybody's greedy, I'm fearful. When the entire market is panicking, when it's afraid, when it's expecting a boom, that's the best time to invest; the opportunities are in the red, in the fear. So market skepticism is not necessarily a bad thing, although it's also not an automatic guarantee that the market is going to spike, but there is a point to what he's saying here.
Another thing he says is that inflation fears are essentially overblown, and I get where he's coming from with this. He's basically saying that all the surveys are politically skewed. People who voted for Donald Trump see no inflation, and people who voted for the other candidate are terrified that Donald Trump is going to cause inflation. So all of a sudden, from two weeks ago to now, their inflation fears have spiked. A lot of this is political; it's not really economic, and I totally understand where he's coming from with it. But here's the thing: we're still at 3%, which is not stellar. But if you look at the overall map—not the sentiment, not the political stuff—you know the one driver that can set off inflation in America is oil. Now, will oil drive the prices up? Currently, it's $70 per barrel; it's not that expensive. And we know Donald Trump has a history of a great relationship with the Saudis, who lead basically the pricing cartel of oil, so no problems there. The other problem where we can see issues—and Tom Lee talked about this—is tariffs. Right? If we have an extra layer of tax, import tax on goods that come into the United States, prices will go up, buying power is going to diminish, and inflation is going to spike. And we might even see stagflation because lower buying power plus recession plus inflation—that's the worst recipe, right? But you have to assume that Donald Trump is not a rational player for you to accept that as reality.
I think the reason the market hasn't collapsed despite all the Trump talk about massive tariffs is because they understand he's an agent of chaos, but he's only going to push it so far. Look at the history: every time he talked about tariffs with Canada, with Mexico, all that stuff, every time he talked about it, he took it just so far to make his point but not really to take it all the way. Nobody believes Trump is going to impose these tariffs; it's more of a negotiation tactic, and that's why the markets have not collapsed. Will Donald Trump surprise everybody and go absolutely ham and do this? Possibly, but not likely. The next thing he says is that the markets are expected to continue to be bumpy and volatile, and I totally understand that. I just made that point yesterday in my video: the markets drop all the time. The S&P fund drops 5% three times per year, 10% at least once per year, every three years it drops 15%. Volatility is okay. Now here's the thing: a lot of people fear that the Fed is going to slow down and not cut rates. I don't think that's happening. In fact, Tom Lee is making a point here, and he says, "Look, folks, when everybody's pushing their expectations of a Fed cut to the end of the year, right, and if the Fed actually decides to cut earlier—let's say in June or July—that is going to push the market up because that is not priced in." That's another possibility, right? But also, he's talking about the fact that lots and lots of money on the sideline has to be brought into the game—$7 trillion—and he's basically saying, "Look, buying this dip is the smartest thing you can do." And looking at the data, he's not wrong. Buying the dip as a long-term investor has never been a bad idea; it's always been the right move as long as you bought the dip in the good companies or in the index and you held for long enough. I mean, we've been doing this for a while, right? If you look at my track record, right, Penter is up 1,000% since the DPO. On top of that, I covered nine stocks on which I was bullish in 2023; nine stocks, eight out of them actually went up, one went down; overall, they've made 287% on average. Long-term matters.
Now also, if you look at our top 25 stocks in the academy, which is a list we put out every single month for my Academy members, right, that top 25 list, so far in four years, has done 130%. Not too shabby. And out of that list, 10 stocks have done 100% and more in four years. Long-term investing works; our system works. There's no magic tricks. Trading and guessing the market and timing—all of this is a fo Z; it's a stupid game, and if you play stupid games, you're going to win stupid prizes, folks. If you want to do it the right way, if you want to join a team of people who have been doing this for four years who've made a lot of money on Paler, on Tesla, on other stocks, join the academy: patreon.com. Would love to see you there; would love to teach you these things—the simplicity of it, the elegance of it, and how little anxiousness and anxiety and panic you will have making money by doing absolutely nothing. Join us; we love to see you there. I'll see you next one. Peace.