Join Chris Perras for the 5/22/2020 edition of Stock Talk! Chris: Good morning. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group in Houston, Texas, and welcome to our weekly Stock Talk podcast: Keeping You Connected to Your Money. This podcast is entitled Where We Stand. It’ll recap the current rally, where we stand, and what we expect to happen over the coming summer months. The S&P 500 sitting near 2950, up 35% from the late March lows, and it’s back in the same trading range that the market was last summer, before the fourth-quarter rally that sent the market from about 2,875 to almost 3,400 in mid-February of this year, pre the virus outbreak. Financial markets have moved far faster than the economic data has moved. Listeners, this always happens at the trough of the economic cycle. Waiting for the clouds to clear produces mediocre long-term investment returns. To those listeners, investors, who rely on fundamental visibility to make investment decisions, the rise in stocks since the mid-March lows would appear to be completely disconnected from reality. We’ve discussed how this happens at every trough and in every recession. 2009 had a similar lack of visibility from March to November of 2009, even Warren Buffett’s saying he saw no green shoots in June of 2009. Equally shocking to most listeners, the best performing sectors and groups since the March 23rd lows have been offense and cyclical-minded stocks, not the safety stocks most of the TV commentators have been pitching. The top sectors have been energy, which is at 57% from the lows, materials up 37%, and discretionary and technology up over 35%. The groups that have trailed the honors, staples up 17%, financials up 22%, and utilities up 25% off their lows. After peaking on a relative basis way back in June of 2008, almost 12 years ago, which was not coincidentally, at the opening of the Beijing Summer Olympics, energy has been the stealth leader of the March 23rd lows. It actually bottoms five days before…

Join Chris Perras for the 5/15/2020 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 title is Breaking News, Smart Money Opinions. The S&P 500 is sitting near 2,850 that’s down around 100 points or about 5% from our rally highs mid-last week. Why is the market pulled back? You may ask, well, turn on Network TV and listen to the pundits. It’s because the economic data is so bad or they say stocks, haven’t been this overvalued since the internet bubble, or maybe you heard or mirroring the Spanish flu outbreak of 1918 and we’re going to have a second wave of infections this summer. Well, we’ve received a number of calls this week from clients who have been concerned because the likes of David Tepper, Stanley Druckenmiller, and Warren Buffet had been on TV voicing their opinions on the markets and the economy. Well, listeners, these are brilliant investors. I could only hope to duplicate one, 1,000th of their success. However, each one of these investors has different goals and objectives. They have different goals and objectives from each other, and more importantly, they have different goals than you have. I want to revisit the great financial crisis to give listeners perspective on today’s forecast by a number of these individuals. Let’s go back to June 2009 at the depths of the economic despair, one of these well-known investors while interviewed on CNBC. What did he say? Well much as he has said the last two weeks back then these were his answers to the questions on the economy. Here are direct quotes from him in June of 2009. Quote, “Everything that I see about the economy is that we’ve had no bounce.” Another one, quote, “The economy will be in shambles this year and probably well beyond.” Finally his last quote, “I thought maybe by now, I’d be able…

Join Chris Perras for the 5/8/2020 edition of Stock Talk! Chris: Good morning. I’m Chris Perras, chief investment officer at Oak Harvest Financial Group in Houston, Texas. Welcome to the May 8th edition of our weekly Stock Talk Podcast: Keeping You Connected to Your Money. I’m titling this podcast The Robinhood Rally and a Teaser of Optimistic Outcomes. I’m titling this podcast this because I want to shed some light onto why the stock market has rallied so far, so fast. I think it’s being led by a certain group of stocks. As of this morning, the S&P 500 is sitting near 2,900. It is safe to say that 95% plus of the financial press in investing public over the age of 50 on TV who continue to pontificate on why the equity markets shouldn’t be here at these levels based on the economic data and based on the science of the virus. They argue and act like the rally from 2,200 to 2,900 doesn’t count. I hear daily from the pundits, who are almost entirely baby boomer age or older, that while stocks are “long-term investments”, you can’t invest now because times are so uncertain and volatility is way too high that you can’t buy an index fund right now and that you have to be a stock picker. We turn on the TV and hear every investor opinion disguised as “breaking news”. It doesn’t matter whether they manage stocks, bonds, real estate, or private equity, or whether they are a billionaire whose wealth was created through means entirely unrelated to public stock markets. The richer they are, well, it has to mean the smarter you are. We see every piece of virus news and economic data in real-time on TV. We are told why stocks are overvalued by 10%, 20%, or even 30%, or why this rally will retest the market lows of March, even as the S&P 500 has rallied from 2,200 to 2,900 in about 6 weeks. People are still waiting for that retest. We hear…

Join Chris Perras for the 5/1/2020 edition of Stock Talk! Chris Perras: Hey, I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group and welcome to our weekly Stock Talk Podcast: Keeping you connected to your money. With the S&P sitting near 2850, which remains basically flat for three weeks, I wanted to return to some general market comments. In the midst of the pandemic virus economic lockdown that has seen over 30 million Americans file for unemployment benefits, the S&P 500 surged over 12.5% in April, making it the best monthly performance since January of 1987 and the best April since the 1930s. To clients of Oak Harvest and listeners of our podcast and YouTube channel, this should not come as much of a surprise. In late March and early April with the market near its lows, we highlighted on multiple occasions, that the list of best performing days, weeks, and months almost always come within the same short-term time windows of the worst time periods. The lessons from these episodes remain the same. First, you have to be in it to win it and stay the course with your financial plan during periods of high volatility to earn the longer-term investment performance rewards of owning equities. If you want the potential average return the equities have given over long periods of time, which is that 8% to 10%, you have to endure both the ups and the downs. Secondly, if an investor feels uncomfortable and realizes their risk tolerance is lower than they thought, well, if they look their financial situation with their advisor, decide that they can live comfortably and with less anxiety without a high allocation to stocks, the time to make moves towards more conservative asset allocation is during times of lower volatility, not during times of high volatility. Some advisors boast that they have a system and defined process that can “get their clients out”, that they tactically allocate their clients out of equities and into cash to protect downside risk. Every system and…

Join CIO Chris Perras for the 4/24/2020 edition of Stock Talk! Chris Perras: Good morning. I’m Chris Perras, chief investment officer at Oak Harvest Financial Group in Houston, Texas. You’re welcome to our weekly Stock Talk podcast: Keeping You Connected to Your Money. With S&P 500 sitting at about 2,800, which is basically flat for the last two weeks, even though there’s daily financial press sounding fury on every bit of news and opinion on the virus, I’m going to follow up last week’s educational piece that was on real estate investment trusts with a second educational piece. Listeners, I apologize in advance to those who have heard me steadfastly talk on this subject, but I’m going to get up on my soapbox, and part of this podcast is going to sound like a rant. Well, sometimes, one must rant to be heard. Today’s subject matter is a financial product in the market that has been there for years. Why these things exist outside of brokered selling and pure speculation is beyond my comprehension. What are these supposed tools I’m alluding to? They are leveraged ETFs and ETNs, which are Exchange Traded Funds and Exchange Traded Notes and commodity ETFs that don’t actually own the underlying commodity. This podcast is a lesson in these WMDs, Weapons of Mass Destruction, for retail investors who do anything more than speculate short-term in them. Remember those two terms, speculation, and short term. My first experience in these contrived in a needed financial products was my purchase of the no longer existence VXX volatility ETF, which was about nine years ago. I was sure that volatility in the overall market was set to rise over the next three or four months. I bought this WMD ETF, that being the VXX volatility index. I did this without reading the perspectives on the ETF however. It was generally thought that this ETF was supposed to be a way to invest if you wanted to hedge or bet on higher or lower market volatility. In this case,…

Join Chris Perras for the 4/17/2020 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. I’m going to digress this week from the constant market commentary of the current virus outbreak and its effects on the markets and the economy. Today, instead, I’m going to provide what I hope is an eye-opening educational lesson for investors in REITs, or real estate investment trusts. I’m doing this largely because these investment vehicles have become a huge investment category the last 10 years, as baby boomers have desired investment vehicles that provide income. With government interest rates at historic lows, money has flocked into real estate, mutual funds, single stocks, and ETFs. Public REITs account for almost $2 trillion in assets. Private REITs account for almost $1 trillion. Combined, this $3-trillion industry has become huge. This asset class, that most of my comments here are directed specifically at, are publicly traded single stock listed REITs. First off, what is the definition of a REIT, a real estate investment trust? Here’s the definition, and please listen carefully. They are companies that own, or, and this is very key to today’s story, they either own, or they finance income-producing real estate across a single or multiple property sectors. REITs allow investors to invest in a portfolio of otherwise illiquid real estate assets the same way one can invest in other industries through buying stocks, mutual funds or ETFs. The stockholders of a REIT earn a share of the property income produced from the real estate investment without having to personally go out and buy, manage, or finance a property. That sounds simple enough, doesn’t it? REITs invest in a wide scope of real estate property types, including apartments, offices, warehouses, health facilities, data centers, the big cell phone towers off the highways, hotels, retail stores, and infrastructure. They can be single property focused, like Crown Castle Holdings that’s…

Join CIO Chris Perras for the 4/9/2020 edition of Stock Talk! Chris: Hey, I’m Chris Perras, the Chief Investment Officer at Oak Harvest Financial Group here in Houston, Texas. Welcome to our weekly Stock Talk podcast for April 9th: Keeping you connected to your money. This podcast is going to be titled, “Normal Isn’t Needed.” On the back of an almost daily firehose of Federal Reserve liquidity policy responses the past three weeks, combined with constant financial channel talk of, “It’s just a bear market rally and we will retest the lows that have been going on for the past two weeks,” the S&P 500 has regained its technically critical 200-day moving average at 2,630 and now sits near 2,800 as of this morning. While this is still down almost 18% from its all-time highs reached only six weeks ago, it is up almost 30% from its intraday lows reached only two weeks ago. This is against the backdrop of the constant daily negative news slant of the financial press. Hourly calls on the TV channels that this is just a bear market rally, that there is a coming Great Depression, that we are replaying the 1930s, or that we will never return to normal again. Against this nonstop negative sentiment the last three weeks the trading bears have been gored bloody. Why? Because they have chosen to fight the Fed. We said it since our Tuesday, March 24th podcasts, the stock markets will recover before the economy recovers. They will recover before the economic news improves, just as the markets peaked and rolled over while the data was still outstanding in late February only five weeks ago. News on the productivity of diagnostic testing and improvements in lowering the virus spread curve through social distancing has led this stock move. Listeners, you do not need to be perfect. We do not need to return to “normal”. Stocks do not wait for perfect or they don’t wait for “normal” to move higher. Equities only need marginally better news to move…

Join CIO Chris Perras for the 4/02/2020 edition of Stock Talk: Keeping you Connected to your Money! 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. Outside of the Russia-Saudi Arabia oil skirmish, news surrounding the coronavirus has been the driver of all financial markets since late February. The duration and volume of COVID-19 virus-related news and its lingering effect on the economy can’t yet be determined. We continue to counsel our clients and prospects to control what they can control. Investors should be mindful of their perspective matters. In investing, time horizon always matters. The longer the holding period, the lower in assets volatility, and the higher one’s expected returns. After failing early in the week last week at 2,630 on the S&P 500, which is the 200-week moving average, the market now sits around 2,530 as of the opening this morning. The futures this morning were pointing 1% lower. The economic fallout of shutting down the economy, which is over 70% service-based here in the United States, in order to slow the virus has begun to show in the economic numbers as unemployment claims have spiked historically high and historically fast. That being said, the markets will begin recovering before the economic news improves, just as the markets peaked and rolled over while the data was still outstanding in late February, only five short weeks ago. News on the productivity of diagnostic testing and improvements in lowering the virus spread curve through social distancing will likely lead financial markets’ recovery. The good news on that front is China and Korea are improving and slowly getting back to work. In Europe, it looks like the virus spread in Italy and Spain looks to be peaking and slowing. However, domestically, it looks like things are still in the acceleration phase. On the good news domestically, Governor Cuomo in New York did bring a bit of optimism this past…

Join CIO Chris Perras for the 3/27/2020 edition of Stock Talk: Keeping you Connected to your Money! Chris: Hey. Good morning. This is 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. First off, there is no denying that headlines fear and rhetoric surrounding the coronavirus have become the primary driver of investment performance since mid-February. While the duration and volume of the virus-related news is yet to be determined, we continue to counsel our clients and prospects to control what they can control. Investors should be mindful that perspective matters in investing time horizon always matters, the longer the holding period, the lower in assets volatility, whether it’s stocks or bonds, and the higher ones expected total return. As of last night’s close, we had rallied almost 20% off the intraday lows on Monday. The markets were sitting around 2630 on the S&P 500 last night, which is the 200-week moving average. That moving average had been support for the majority of the last 10 years. This morning, US equity market futures are pointing lower again, tracking down about 2.5% from last night’s close as I sit here and record this. It’ll be interesting to see how the week closes after yesterday’s forceful rally lifted the S&P 500 20% above its early week lows. For what it’s worth, the junk bond credit markets are better today, even with the stock market down and that’s a very good sign, but shh, don’t tell anyone, that’s our secret. Besides the early [unintelligible 00:01:41] signs we spoke of on our Tuesday podcast, the good news that the market is keen on over the past three days includes the massive US stimulus program that runs at about $1.6 trillion in direct support, or that’s about 7.5% of GDP. It includes a mix of direct handouts and incentives for firms to keep employees on the payroll through the crisis. President Trump is apparently championing an early removal…

On a special edition of Stock Talk, CIO Chris Perras provides an update on the market, COVID-19, what we see happening “behind the scenes,” and what that may mean for the markets going forward. Chris Perras: Hey, my name is Chris Perras. I’m Chief Investment Officer at Oak Harvest Financial Group in Houston, Texas, and welcome to a special midweek podcast of our weekly Stock Talk Podcast: Keeping You Connected to Your Money. First off, there is no denying that headlines, fear, and rhetoric surrounding the coronavirus has become the primary driver of investment performance over the past five weeks. While the duration and volume of COVID 19 virus-related news is yet to be determined. We continue to counsel our clients and prospects to control what they can control. Investors should be mindful that perspective matters. In investing, time horizon always matters. The longer the holding period, the lower in assets volatility and the higher one’s expected returns. This is relevant to all asset classes including bonds and stocks. At all times we advise clients to try to remain calm and rational in their decisions. However, particularly in times of high volatility like we’ve seen the past five weeks, we advise investors to remain poised and patient in their decision-making and to trust the investment process and financial plan. I know it’s hard to do but the time to make asset allocation changes is during times of calm in the markets when emotions are running low. As of this recording, we were sitting near 2,425 on the S&P 500 and that’s up almost 9% on the day. From the February 19th high of around 3,385 on the S&P 500, we have fallen almost 28% from our all-time highs in only five weeks as volatility has spiked historically fast and the markets have fallen at a speed last seen in October of 1987. I do remind listeners that the rapid October 1987 sell-off was the low for the next 10 years of a 20-year secular bull market. Historically, bear markets and…