H1 2021 Outlook: Ain’t Seen Nothing, Yet
Join Chris Perras for the 12/18/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group in Houston, Texas. Welcome to our weekly Stock Talk Podcast: Keeping you connected to your money. This week’s podcast is going to be the short-form version of our first half 2021 outlook. I’m naming this abbreviated podcast after the 1974 Bachman- Turner Overdrive song, You Ain’t Seen Nothing Yet. As of this morning, we sit around 3720 on the S&P 500. It’s another new all-time high. Wall Street strategists are laying out their lists for 2021 in what they think happens in both the economy and the stock markets, and this is our abbreviated version of that. We’ll be giving you more detail over the coming weeks. We previously mentioned way, way, way back in January of 2020, what we thought would happen in the fourth quarter of this year and into the first quarter of 2021. I tried to get a few unknown indicators that I look at in the options, and futures, and volatility markets, and I try to triangulate both price and time at certain levels. Almost a year ago, we first previewed our thoughts on early 2021, and my views haven’t changed. The path, for sure, was different because of the COVID lockdowns. It took about three weeks, but we continue to see a move in the first quarter of 2021 above 4000 on the S&P 500. If pressed, my work shows a move above 4050 into late January and early February is possible. This current move up started on October 28th or 30th before the election. They tend to last almost exactly three months. Then they almost always end moving up exponentially over the last three or four weeks, which would be in January if things hold. These moves are almost always led by existing year’s leadership. This year, it was stay at home stocks and growth at any price stocks that are leading into year end. Why? Because the inflation…
High Hopes and IPOs
Join Chris Perras for the 12/11/2020 edition of Stock Talk! Chris: Hi. I’m Chris Perras, chief investment officer at Oak Harvest Financial Group in Houston Texas. This is the weekly Stock Talk podcast: Keeping You Connected to Your Money. This week’s podcast is titled High Hopes and Stock Prices, Panic in the Disco, and in the IPO Market. As of this morning’s down open, we’re sitting around 3,650 on the S&P 500, which is about 2% above the market short-term top on September 2nd. With equity futures having traded down last night, that put it actually overnight at a flat December. I’ve been asked the past few weeks, “What concerns do you have right now? What worries you?” This podcast should give listeners an idea of what’s on my mind, nor I remain very positive for 2021 what I think that concerns are in the market. First off, I can feel it, I can hear it, and I can see it in the markets. What is that “It”? Well that it is FOMO, F-O-M-O, the fear of missing out, the fear of, “I’m not making enough money.” The fear of, “I’m not being aggressive enough when others are.” That fear is completely opposite, the fear most investors felt late in the first quarter throughout most of the year into the election, when many retired investors were liquidating stocks at worse or sitting on their hands at best. This week, the overall markets were basically flat. However, individual and speculative stocks like Lemonade and Roku were up 20 to 50%, and new IPOs like Airbnb, AI, and DoorDash traded up over 100% from their IPO prices. This was on top of those IPOs already being priced up 100 to 300% over their down private venture capital rounds that were done only six to seven months ago. I often get asked what the internet bubble was like in the late 1990s. I was managing a fund in San Fransisco in the early days of that bubble in 1998 and ’99. Well, listeners,…
Are You Smarter Than Albert Einstein?
Join Chris Perras for the 12/4/2020 episode of Stock Talk! Chris: Good morning, I’m Chris Perras, chief investment officer at Oak Harvest Financial Group in Houston, Texas. Welcome to our weekly Stock Talk podcast: Keeping you connected to your money. I’m going to follow up last week’s podcast with another “Buy the Dips”, part four. This one’s entitled, “Are You Smarter Than Albert Einstein?” Earlier this week, I was talking to a friend of mine who, while he was managing other people’s money in the 1990s, was probably the top broke investor running a large mutual fund in the United States. His name is Scott Schoelzel. He took the Janus Twenty Fund from around 4 billion in assets to over $25 billion in assets over 10 years before turning in the keys and retiring a few months before the internet bubble peaked in late 1999, early 2000. I still consider this the second-best market timing call of that period right behind Mark Cuban selling broadcast.com to Yahoo for over $5 billion and then hedging his entire Yahoo stock holdings, which at the time was well over $1 billion in front of the internet collapse over the next two years. That internet collapse, remember folks, it took Amazon, yes, the number one internet company in the world, it took their stock down over 95%. Down 95%. We’re talking about long-term gross stock investing, and we were talking about letting your winners round in compound. He reminded me that it was Albert Einstein who said, “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pays it.” Regardless of whether Albert Einstein uttered those exact words or not, the truth of his statement is ridiculously powerful and can’t be questioned. For anyone who wants to build lasting wealth, understanding and harnessing the power of compound interest is essential. What is compound interest? Well, it’s the exponential increase in the value of the investment. Simply, it is the interest you earn on your interest. It’s…
Santa Shops Early
Join Chris Perras for the 11/20/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group here in Houston, Texas. Welcome to our weekly Stock Talk Podcast: Keeping You Connected to Your Money. We hit a new all-time high in the S&P 500 on Monday, November 9th, and then again on Monday, November 16, near 3,625 on the back of surprising timing of positive Pfizer vaccine news, and then some more positive vaccine news from Moderna earlier this week. This caused a brief short squeeze in negatively positioned portfolios. As of this morning, we were sitting near 3,555, 3,575, thereabouts on the S&P 500. That’s about 1% below early September’s closing all-time high. This week’s podcast is titled, By the Dip, Santa Shops Early. The election results are in and while Vice President Biden looks like the winner, the vote is being contested by President Trump and his team of lawyers are dragging out the process. I know this concerns some of our clients and many of my listeners. As far as the market is concerned, the election event risk peaked in advance of the election around October 28th or 30th, just as the options market had said it would all year, and as we discussed for many months prior to the election. The contended states will be finalizing their results through December 1st. For those of you wanting the exact timing, well, Nevada is the next state with certification scheduled to take place on Tuesday, November 24th, but the final key deadlines are after Thanksgiving with Arizona on November 30th, Wisconsin on December 1st. Then guess what happens on December 8th? Well, that’s the safe-harbor deadline that all states should be certified by then. Why is this of note? Well, because this timeline is laid out by the options market behind the scenes all year, continues to say that if you miss the pre-election weakness buy time period, the final pivot up for stocks for the end of the year…
Early Bull Markets: “Buy the Dips” and Making Sense of it All
Join Chris Perras for the 11/13/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group here in Houston, Texas. Welcome to our weekly Stock Talk Podcast: Keeping You Connected to Your Money. When it hit a new all-time high on the S&P 500 early Monday morning, and that was near 3,625 on the back of surprise timing of positive Pfizer vaccine news. As of this morning, we were sitting near 3,525 on the S&P 500. That’s about 2% below the September 2nd’s daily closing all-time high of 3,588. What has transpired the last few weeks? What has transpired is the markets have vaulted from 3,225 to 3,525, which if we close here today is a weekly closing all-time high. Are things any more certain than when investors were worried two weeks ago with the market about 10% lower? Let’s go ahead and walk through a few things. The election, while the election results are primarily in, and while the vice-president looks like he’s the apparent winner, the vote count is still being contested and with vote recounts and multiple states and legal bills being run-up, the outcome is still a little bit uncertain. It’s at least less certain than most election cycles. How about the outcome in Congress? Well, the House of representatives was held by the Democrats, but the GOP and Republicans massively outperformed expectations taking close to 10 new seats. Republicans and conservatives out there, exhale deeply. This vote shows that we are far from a left-liberal country, regardless of those fears by many. Do we know what the final vote tallies will be with certainty or the Senate makeup? Well, no, won’t know that for another few months because my former home state of Georgia is holding that outcome up with their double runoff for both Senate seats whose final outcome won’t be known until early January. How about the COVID virus? We obviously must have cured that virus given the stock market is at or near…
Stock Talk School: Divided Government = Goldilocks
Join Chris Perras for the 11/6/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group here in Houston, Texas. Welcome to the November 6th edition of our weekly Stock Talk podcast: Keeping you connected to your money. At around 32:50 on the S&P 500 last week, I gave you the final chapter in my waiting series, and that was entitled, “Wait No More — This is How Early Bull Markets and Stocks in the Economy Look.” Well, this week as a follow-up entitled, “And so it Begins, Divided Government is Goldilocks.” For the past four weeks, we have stressed that the increase in short-term volatility that we are seeing into the election is what breeds higher investment return opportunities if one can control one’s emotions and biases. That the period of high or implied volatility is when long-term investors should be pushing their chips and dollars into the market, not abstaining or fleeing the markets. Election day has passed for most of us, and most of the votes are in and counted, and while not yet finalized, the outcome looks to be Goldilocks for your money for the rest of 2020 and 2021. Yes, I know that sounds hard for most of my listeners to imagine. Like myself, most of our clients run with a conservative political tilt. A whole lot of Texas was hopeful that the president would retain his position and while the votes have not been finalized, it looks like the outcome will be a divided government, which is bullish, very bullish for the stock market. A divided government with a democratic president of progressive policies are neutered by a conservative Supreme Court in a GOP-led senate combined with a stimulative monetary policy from the Federal Reserve, that’s Goldilocks. Why? Because with a blocking position by the GOP, government regulation is likely to stay moderately low. Big liberal programs looking to increase corporate and individual tax rates look less likely. With that in mind, increased supply of…
Stock Talk School: Waiting No More — This is How Early Bull Markets Look
Join Chris Perras for the 10/30/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group here in Houston, Texas and welcome to our weekly Stock Talk Podcast. This is October 30th, and this is Keeping You Connected to Your Money. This is the last week in an ongoing multi-week series entitled, Waiting. We started this series way back in late August, with the stock market’s moving parabolically upward toward almost 3,600 on the S&P 500. That segment was entitled, Curb Your Enthusiasm – Election Volatility Breeds Investment Opportunity. Today, I give you the final chapter in the series. It’s entitled. Wait No More, This is How Early Bull Markets and Stocks in the Economy Look. Since late March, the investment team has been discussing almost weekly with clients and listeners that we saw a strong likelihood of a V-bottom in both stocks and the economy most likely for mid-2020. Since mid-August, for the past three months, we have tried to educate our clients and listeners as to the normalcy of pre-presidential election volatility. This focus appears well justified as the markets have now pulled back to basically flat year-to-date with a big jump in volatility the past two weeks. For the past four weeks, we have stressed that this increase in short-term volatility is what actually breeds higher investment returns and higher opportunities if one can control one’s emotions and biases. That the period of higher implied volatility is what long-term investors should be looking for and when they should be pushing their chips and their dollars into the market, not abstaining or fleeing the markets. Well, listeners, we are finally here. It’s time. The next few weeks should continue to stay volatile in the short term. Why? I don’t know. I can make up reasons like everyone else. Factually, I think due to states’ individual voting procedures, we are unlikely to get an official winner in the election next Tuesday night due to the massive early and mail-in voting…
Waiting: The Final Countdown
Join Chris Perras for the 10/23/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group here in Houston, Texas. Welcome to the October 23rd edition of our weekly Stock Talk Podcast: Keeping you connected to your money. This is the second to last an ongoing multi-week series entitled Waiting. We started this the series way back in late August with the stock markets moving parabolically upward to almost $3,600 on the S&P 500. That segment was entitled Curb Your Enthusiasm, Election Volatility Breeds Investment Opportunity. Mid-September during the first steep sell-off, we released Waiting is the Hardest Part, and on September 25th with the S&P 500 around $3,300 and almost 300 points and 10% off its recent all-time highs, we produced an optimistic Waiting Get Ready. The last two segments were titled waiting, but it’s about to get fun and profitable, and October 9th waiting but turning the corner slowly. Today will be the second to last in the series, which I will end next week. Today’s piece is entitled after the top one-hit-wonder song on Spotify. That’s the 1990s band called Europe and the song was The Final Countdown. A close second for this week’s title was the 1970s, one-hit-wonder song by the Stealers Wheel entitled, Stuck in the Middle. What do I mean by the final countdown? Well, since late March, the investment team has been discussing almost weekly with clients and listeners that we saw a strong likelihood of a V bottom in both stocks and the economy most likely for mid-2020. Against almost all financial commentator opinions, this is exactly what happened with the S&P 500 making new all-time highs in August. Thank you, Jerome Powell and the Federal Reserve. For the past two months, we’ve tried to educate our clients and listeners as to the normalcy of pre-presidential election volatility. All over, we have stressed the investment opportunity that this volatility brings if one can control one’s emotions and biases. The period of higher implied…
Waiting: Looking Forward
Join Senior Portfolio Manager James McFarland for the 10/16/2020 edition of Stock Talk! James: Hey everyone, this is James McFarland, senior portfolio manager and investment specialist at Oak Harvest Financial Group. Welcome to the October 16th edition of Stock Talk: Keeping You Connected To Your Money. I’m recording this on 10/16/2020 at 9:30 am Central time. The S&P currently trades at about 3506. The S&P opened Monday at 3524 and proceeded to trade down over Tuesday, Wednesday, and Thursday, reaching the low of about 3431 on Thursday. After reaching that low, the market immediately bounced to close Thursday at 3475 and is trading higher again today. That means the market is trading down just about point 0.7%, from Monday’s open as of the time of recording. The action this week is right in line with my expectations. As you probably know, we’ve been expecting to see a pullback in the broader market since August or so. We expected that pullback to materialize in September and last through mid-October. We’ve since seen that pullback happen and the market again starting to turn up. This week is notable to me since when the S&P bounced on Thursday, it bounced at almost exactly the price point I’d been expecting it to do so. If that price level had failed, and the S&P continue downwards, I’d be more inclined to see more sharp short-term moves to the downside in the near term. However, as this week has played out, I think we’re more likely now to see more upwards action and some sideways chop headed into the election. The election, of course, is still the foremost event on people’s minds, which is entirely understandable. We will all find out what happens in just a few weeks in that regard. I’ll just remind everyone that we will be closely monitoring the results and making portfolio adjustments as needed based on the outcomes. At the highest level, we remain very bullish heading into 2021 regardless of the election outcome. As you’ve heard Chris Paris discuss for…
