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All these concerns (Iran war, software, private credit) look dramatic but are fairly benign, believe it or not.

The beat that the market's marching to now is the inflation print from Wednesday morning. The market's ready for the story of:  OK we have elevated oil now, how long will that last, and what will that do for inflation? But it was not ready for an inflation print from before the war that was far too high. 

For him, that means that the rate path was not what we thought. It means that the market multiple was not what we thought. And we're seeing the effects in the market.

Every time you're in a bull market, you always have narrative shifts and tests. Everything we're seeing now is consistent if we can get to a place where earnings growth resumes, inflation is in check, and interest rates do start to go down.

But we're probably not going to see that for a while, even if the Iran war were to get under control and the Strait were to open tomorrow. We can always get a rally, but we're still dealing with inflation being too high even before the war started.

One of the reasons for inflation was US tariffs. Those tariffs do get passed through to the economy. The long-term trajectory of AI is a lot of disinflation. 

So the disinflation story is intact, but it depends on how long it takes oil to start to come down.

Eroding confidence in near-term supply. If crop prices soar, farmers will have more $$ for fertilizer. Stock's not crazy pricey, but it is overstretched along with other commodities. EPS path over next 3 years looks flat. Better value elsewhere.

With Iran conflict, yield curve has gone a bit flat, so net interest margins aren't going to be as good. If the conflict persists, earnings will possibly decelerate. This name is best positioned for all that. Usually trades at 11% premium to peers, now 8%.

If you assume that the conflict gears down to more manageable levels, you could buy the banks here and this name is the best choice.

You want to put yourself in a strong position to be able to buy, because other people are late to the game and selling because they have to. You could go into a high-interest savings account with your financial institution. 

But he likes this BMO product. Pays you a bit more. Steady-eddy, 12-month basket of rolling, short-term, investment-grade bonds. Almost as safe as cash, with a slightly better yield.

When you have market carnage like this, everything gets attacked. While market multiples still need to come down for the likes of banks and industrials, tech already took its drubbing. Tech is the belle of the ball.

Trades ~17x PE for 2028 for 20% growth. Very reasonable PEG ratio. Concern is that spending is in overdrive but returns won't be sufficient. At forefront of AI revolution. AWS spinout could add another $35 per share.

There are better places to be.

There are better places to be.

Along with AMZN, looks pretty compelling here.

Along with AMZN, looks pretty compelling here.

Premium brand, but an affordable luxury. Valuation's getting much more compelling. Beat on Q1, but impacted by tariffs. Proxy battle going on. Turnaround plan needs to materially reduce inventory. Bumpy earnings profile for next 1-2 years. Only 13x PE, but remember that retail is fickle.

On risk/reward, better value out there. If you feel speculative right now, you could start building a position in your non-registered account. You could even sell puts.

PE is 11x earnings for 2027. Decent growth. This is what happens when you get 4 consecutive years of guidance reductions. Selling non-core assets would help. Way too much debt. A show-me story. Concern about commodities and pass-through inflation.

Enough stories out there that have delivered over the last 4 years that are also cheap.

Taken down unfairly. Whippy stock. Not widely held, somewhat illiquid. Delinquencies can go up in bad economies, and we have some headwinds. Bad news is more than reflected in the stock. Remember that even the stalwart names can have huge moves.

Likes it longer term. Trades at 6x PE with 30% growth. Plug your nose and keep it.