Join Chris Perras for the 7/31/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group in Houston, Texas, and welcome to our July 31st podcast, Keeping You Connected to Your Money. This podcast is entitled Millennials Kodak Moment: Smile and Say Technology. The S&P 500 sits this morning around 32, 35. This is almost exactly flat here today. The tech-heavy NASDAQ is up over 15% here today and the value bias Dow Industrials is down about 8% here today. Listeners, it’s summer in the stock market in the economy. This week gave me one of the most interesting and unique weeks I’ve ever seen in 25 years of helping people invest their money. I would venture to guess that until this week, almost no one under the age of 50 knew what Eastman Kodak did, or had ever used one of their products. Kodak’s company and their stock once a titan in the film industry in US manufacturing had become irrelevant to both our economy and the stock market. I mean, how big is the current market for physical film nowadays? Your iPhone can produce a higher-quality image instantaneously that lasts forever. It can do it for free, and you can edit your beautiful work immediately. The pictures you take never wash out with age. You can send dozens or hundreds or even millions of copies to friends, relatives into the world instantaneously for free. Physical film was one of the first losers in the transition from an analog to a digital world. I mean, have you used your Polaroid camera lately? When’s the last time you bought Fujifilm? I don’t know a professional money manager who even knew the ticker of Kodak until this week. Then Peter Navarro in the Republican-led White House inked a $750 million loan with an otherwise dead company to convert their corporate campus and convert their underutilized and unused manufacturing facilities into a home for up to 25% of the United States domestic drug…

Join Chris Perras for the 7/24/2020 edition of Stock Talk! Chris Perras: Hi, I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group, and welcome to the July 24th edition of our Stock Talk: Keeping You Connected to Your Money. First of all, thanks to James for recording last week’s podcast in my absence. This week’s podcast is entitled Summer Stall Stocks in the Economy. As of this morning, S&P 500 sits around 30 to 35. This is almost exactly flat year to date. Although it’s flat year to date, it’s been a wild ride thanks to the virus. The second-quarter earnings reports kicked off late last week and have been ramping this week. Most of their prints have been better in earnings, a little weaker in revenue. The stock price action around these earnings might be a bit confusing to many investors. Why? Because the names like Tesla, Texas Instruments, Netflix, and Microsoft all smashed analyst estimates, but their stocks dropped. While companies like Pepsi, CSX Railroad, Verizon, and Hershey beat earnings estimates. They pulled their third-quarter guidance and their stocks all rose. Why did this happen? Largely because investors had already bid up the former stocks in anticipation of the great news, while the latter names had been lagging and most investors had been dismissing them as boring and had not then overweighed them going into earnings. Additionally, technology stocks traditionally peak for summer in or around July 4th, as investors anticipate a normal slowdown in their business as summer ordering for their products slow. This year, many investors are particularly nervous as a combination of pantry loading and technology products, both semiconductors and software. Which is something, pantry loading is very similar to the pantry loading you might have done as a consumer for toilet paper and canned goods and water to the virus. These companies that buy semiconductors most likely ordered more than necessary for the third quarter. They did this in front of the third quarter due to their concerns about additional China and…

Join James McFarland for the 7/17/2020 edition of Stock Talk! James: Hi everyone. This is James McFarland, Senior Portfolio Manager and Investment Specialist for Oak Harvest Financial Group. Chris Perras is out for today, so I’m happy to welcome you to a very abbreviated episode of Stock Talk for today, July 17th, 2020. Today we’re just going to do a quick recap of the week’s market action, touch on our short-term view for late summer headed into autumn, and then do a quick teaser related to the presidential election which we’ll touch on towards the end. I’m recording this on 7/7/2020 at 9:30 AM, Central Time. The S&P currently trades at about 3200. The S&P opened up Monday at 3147. It proceeded to trade down to a low of about 3120 on Tuesday, before rallying back up to 3230 on Wednesday, slightly dipping back to 3207 on Thursday, and now trading just under that level, up about 1.6% for the week. This, in other words, has been a somewhat range-bound week in the S&P 500. On the upper side of that range, the S&P is bumping right up against the prior June 8th high of about 3232. On the lower side price has been constrained by 3120 to 3125-ish. Now, those two it’s the six-eight high that carries more significance in my view. To go higher, the S&P will need to break and close above that level, or we could see a bit more sideways to down action in the broader stock market. This is in line with our general view of nearing the end of the normal summer rally. We believe the market does have a bit more upside left through the end of July. After which in August, we tend to think we’ll see the normal summer slowdown in the economy with reopening schools in some fashion or other and the upcoming election in November. That means we’d expect to see some consolidation, sideways trading, and backfilling into October. That will take us right into the election. Now,…

Join Chris Perras for the 7/10/2020 edition 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. It’s July 10th. This Stock Talk podcast is entitled “Stock Market Volatility: Did you Know?” First off, the S&P 500 sits this morning at around 3,150. The S&P is now down about 2 1/2% year to date. The Nasdaq Composite, which is largely technology stocks and biotech stocks, is up almost 17% year to date and has been making new all-time highs almost every day. This is because investors have raced to buy growth at any price stocks, which have the fastest revenue and earnings growth, as the coronavirus has caused an economic slowdown and has caused interest rates to drop materially over the last four months. I’m going to skip the play-by-play this week on the status of the virus and the economy and focus on something I’ve discovered midweek doing a little bit of primary research. My questions to listeners is this, for the past two years, post the Trump tax plan being passed in early 2018, which stock market has been more volatile? Has it been the S&P 500, which is mainly large, established, US domiciled companies, or has it been the Chinese stock market, which is classified as an emerging market? The data might surprise you. Not only has our S&P 500 been more volatile, and clients can go ahead and log in to our web portal and see the accompanying charts and graphs, it’s been more volatile by a factor of two times. Yes, the S&P 500 has been over 100% more volatile than the much maligned Chinese stock markets since the Trump tax plan was passed. Just to put this increase in S&P 500 volatility in perspective, from early July 2016, which is almost an identical time period in front of the 2016 election as we are right now, through January 2018, when the…

Join Chris Perras for the7/2/2020 edition of Stock Talk! Chris Perras: Hey, this is Chris Perras, Chief Investment Officer at Oak Harvest Financial Group in Houston, Texas. Welcome to the July 2nd edition of Keeping You Connected to Your Money. This podcast is entitled V for V bottom, not for virus. The S&P 500 sits this morning around 3125. That’s up almost 125 points from last Friday’s close. When the news channels were filled with dire warnings of virus cases accelerating, even though this trend started way back in late May. What did we learn during the month of June? When the stock markets went up and down, it didn’t go anywhere [unintelligible 00:00:37]. We’ve learned that listening to 99% of the experts on TV will generally get you nowhere in your financial life. Non-stop opinions from politicians, economists, billionaires, aged, baby boom, money managers who have already made their fortunes and retired, what about those opinions? Well, they’ve been wrong. Since late March, there have been four or five people who have been right on this recovery in the stock market. First, I want to list a few of the notable personalities who have been flat out wrong but are given constant press on their opinions. This is not an exhaustive list, given probably 99% of those people on TV have missed the last four months. Here it goes, though. No one on the CNBC show, Fast Money, has been right. The closest person to being consistently correct has been Pete Najarian. What does he do? He follows the options market, which is data-driven. No, Jim Cramer has not been right. I will say he has been spot-on the stay-at-home momentum stocks, but he has been fighting the overall stock market rally for four months. In fact, he was probably the loudest voice proclaiming the potential of the coming Great Depression number two. Hedge fund managers like Ray Dalio, Stanley Druckenmiller, and a myriad of others have been wrong. Warning, like many others, “There’s a coming Great Depression,” or…

Join Chris Perras for the 6/26/2020 edition of Stock Talk! Chris: Hey, I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group in Houston, Texas. Welcome to our June 26th podcast, Keeping you Connected to your Money. This week’s podcast is entitled, “Politically Incorrect — Politicians, Your Health and Stocks.” The S&P 500 sits this morning around 3,050. To put that in perspective, it’s almost exactly where it was at the start of June. Yes, that’s down about 5% off the early June recovery highs that were driven by short-covering and the Federal Reserve announcement about corporate bond buying. That spiked the S&P 500 back in early June to around 3,220, give or take. The markets are almost flat with the level the S&P was exactly a month ago, on May 29th. Back then, I released my Friday podcast on May 29th, and it was entitled “Summer Stall —It’s Not Time to Rotate.” What have we learned during the past four weeks during the month of June? We have learned first and foremost, don’t listen to politicians on two things that matter most in your life. Don’t listen to politicians when it comes to matter of your finances and your health. My listeners know that I am generally a political conservative. That being said I’m not oblivious to societal change. In late May and early June, just as our president, our governor at it, and other Republican governors in southern states, including Florida and Arizona, and our network news stations decided to push the mantra, “The virus health issue is dead and it’s on the back burner,” we were warning our clients and listeners that the virus issue you wasn’t over. Why? Because the data of the virus in Texas was starting to worsen late May and in early June. The virus data in Texas was already getting worse. Justice Texas Governor Abbott was extolling the virtues of reopening the economy, which Oak Harvest was wholly in favor of. However, he decided not to mandate the use of mass…

Join Chris Perras for the 6/19/2020 edition of Stock Talk! Chris Perras: I’m Chris Perras, chief investment officer at Oak Harvest Financial Group in Houston, Texas. Welcome to our Friday, June 19th edition of our Stock Talk podcast: Keeping You Connected to Your Money. This podcast is entitled Second-Half Surge, The Bulls Run Wild with Four Ss. Having managed money for over 25 years now in all sorts of manners, I’ve run and worked as an analyst on large-cap funds, mid-cap funds, even micro-cap equity funds. I’ve had the chance to be a portfolio manager on mutual funds, pension funds, hedge funds, and my position for the last five years has been helping manage money for registered investment advisors like Oak Harvest. I’ve had the luxury of being on index products that manage tightly to their benchmarks within basis points, managing financial service funds that invest only in banks and financial stocks. I’ve even managed heavily growth-oriented funds that owned upwards of 80% technology stocks, managed GARP funds, which is the acronym for growth at a reasonable price, and GAAP funds, which are growth at any price funds. After doing this for 25 years, I can say without question, I have one of the most diverse careers managing money in public markets that listeners might find out there. What have I discovered over my 25 years of managing public money? I’ve discovered this. Almost universally, the bear case on stocks, the economy, and the markets always sound more convincing and well-researched than the bull case. Say what, Chris? Yes, those bears almost always sound smarter and more convincing than the bulls. However, as investors know, being a bear on the US, our economy, our stock markets, is rarely a worthwhile position over the longer term. It has never paid off. To combat the current round of bearish calls that have clearly been wrong for almost 1,000 S&P 500 points since March 23rd, and continue to dominate the news channels, here’s the bull case for continued gains in the second half…

Join Chris Perras for the 6/12/2020 edition of Stock Talk! Chris Perras: 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. This week’s podcast is entitled, It’s the Robinhood Route. Not. As of Thursday night, the S&P 500 sat around 3000 after an almost 200 point one day 6% decline. You ask, what caused this one day dump? Was it as the financial news networks suggest? Was it those Robinhood millennial day traders? No. However, they are a very convenient excuse, as millennials seem to have been for years now. Listeners, I must confess, for many years, I’ve been blaming the millennial generation for a lot of things. I’m almost 55 years old. I was born in the late 1965, which was really at the very tail end of the baby boom. I have two late millennial aged early 20-year-old boys, and have another five late millennial age data points and stepchildren. For quite a while, I blame millennials for a lot of things. Heck, they were generationally lazy, as all new generations seem to be. They sat in their bedrooms and they played lots of video sports games and war games, that’s instead of going outside and playing basketball, or playing war in the woods like I used to do. They sat inside and they chatted with their friends way too much on the internet, on Skype, on Instagram and Snapchat, instead of waiting by the phone for the phone to be free, or waiting for call waiting, or hanging out with friends at the local Pizza Hut and McDonald’s, like I used to do. The millennials, they started watching way too much Netflix about five or six years ago. Watching YouTube comedians, and glorifying top Amazon Twitch channel online video gamers who are now getting paid millions of dollars. How dare they do this? Instead, they should stay up late and watch Saturday Night Live the way I used…

Join Chris Perras for the 6/5/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group, and welcome to the June 5th edition of our weekly Stock Talk podcast: Keeping you connected to your money. This week’s podcast title, booster rockets, and I’m not talking about last week’s SpaceX launch. First off, I have to admit that last week’s podcast timing was ill time. The investment team at Oak Harvest has been preaching at the bottom in both the economy and stocks since our March 23rd YouTube video. We’ve been talking to clients for the past eight weeks about new all-time highs this year, and much higher in the fourth quarter of 2020. Even more in the first quarter of 2021. We’ve been sending out data to clients and prospects on the history of V bottoms. We’ve been out there trying to quell the non-stop talk by “smart money billionaires” on the financial news networks of the coming second depression with both data and analysis, not opinion. We’ve been trying to negate all the calls on network TV for a repeat of the 1918 Spanish Flu outbreak with the economic and stock market story that factually followed the Spanish Flu. That was the roaring ’20s. We’ve been trying to educate our clients and listeners with data and analysis, not emotional fear-mongering. That being said, I was not expecting this week’s 4% move above 3,050 in just five days. What has caused this further blast off this week? Well, first, the European Central Bank known as the ECB joined the liquidity party the Federal Reserve began eight weeks ago, and they initiated their own massive bond buying program. This drove up a massive short covering move in the European currency and European stock markets as most hedge funds were short, these indexes. These moves in turn accelerated a selling in the US dollar in longer-term risk-free treasury bonds. That caused a steepening of the US treasury interest rate yield curve. As we…

Join Chris Perras for the 5/29/2020 episode 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. This podcast is entitled, Summer Stall. It’s not time to rotate. The S&P 500 is now sitting near 3,050 up almost 38 1/2% from the late March low. Volatility has dropped from about 70 to 28 to 30 by way of the VIX index. As always, financial markets have moved far faster than the economic data has moved. This always happens at the trough of an economic cycle. Waiting for the clouds to clear produces mediocre long-term returns. As we covered last week, most investors are shocked to hear that the best performing sectors in group, since the March 23rd lows have been offence and cyclical minded stocks, high beta stocks, not the safety stocks most of the TV commentators have been pitching. Why? Because long-term investors looked at the federal reserves, looked at their moves and said, “The economic slowdown is here. It’s going to be sharp, and the recovery will be sharp as well.” This last Tuesday and Wednesday, we had a massive move in cyclical groups X technology. Those groups, financial, small caps, and consumer discretionary and industrials lit up the news channels with the story that it’s time to rotate. It’s time to buy the junk or the laggards. Listeners, this historic data on this is almost universally consistent. Is this a good strategy you ask? The answer is, well, yes, kind of, if you’re a short-term trader, not a long-term investor. Now, I am not recommending this strategy and certainly not recommending this for our clients. What I’m saying that is if someone were a short-term trader looking to take on risk and get the highest possible short-term percentage returns, that type of trader would buy the companies with the absolute worst balance sheets and the most economic leverage as soon as you…