Latest Stock Buy or Sell? Make More Informed Decisions!

What's little known out there is that, while headline numbers are showing markets at (or close to) new highs, the underlying market isn't quite as healthy. In fact, the latest statistics show that 41% of all stocks in the S&P 500 are 30% or more below their record highs.

Of course it's a cap-weighted market, so the biggest companies have the greatest effect on the index. Those big companies are kind of carrying the index along, but the underlying companies are being sold. That's actually creating opportunity.

The textbooks would probably say that it's an unhealthy market. You want breadth in the market and participation. To have so much money focused on so few stocks isn't a healthy market. 

We're starting to see some signs of capitulation and extreme bearishness. In Q4, this may lead to a broadening of the market. That would tie right in to the effects of both seasonality and the US midterms.

There are certainly concerns about whether there will be a true return on close to $1T of investment by the mega-cap tech companies. Players are positioning and new products are being introduced. 

It creates some nervousness among investors, but experience tells him that these types of things are normal in the early stages of a capex cycle. They will resolve themselves.

Q3 earnings have started to trickle in. Expecting 25% YOY growth, which is very strong. Corporate profit margins are at record levels, around 15%. 

There are a lot of opportunities outside communication services and mega-cap tech. Healthcare, for example, has been renewed after a couple of years of treading water. His team has had an overweight position in healthcare since last year, and it's now paying off.

Other areas also deserve some attention. Industrials have sold off hard, but a lot of them are growing earnings and cashflow at accelerating rates. Yet prices are falling. That tells him that valuations are becoming compelling and very quickly.

It's whether these data centres are actually going to be built. Will there be a political windstorm that puts up roadblocks?

His ongoing thesis is that opportunity will follow money. If there's a lot of money available with the returns that these data centres offer, there will be solutions. Some of these concerns are environmental, and some involve the cost of electricity. Some are disruption to communities. 

Over the long run, these things tend to be resolved if there's monetary opportunity.

Increasingly involved with data centre development. About 2/3 of revenue comes from data centres. Second choice to NVDA. Growing well, but NVDA is the leader and has a better valuation.

Car business is, in general, low-margin and capital-intensive. Software services opportunities have margins of 70%; contribution to income will be dramatic, even though that segment is only 15-20% of revenue. Market's overlooking that opportunity.

When the price falls, we're all tempted to jump on the "great value". But if fundamentals fall at a faster rate than the price, it's lesser value. You have to look at the value proposition, not just the price.

Organic revenue growth was 10-12%, now 6.5-8%. Losing market share. Didn't execute, and premium valuation disappeared.

Suffered along with all the second-derivative AI plays. Important, but low-tech. Relatively few customers make up 80% of revenue, so highly volatile. Projects slow down with cold weather. Leader, huge backlog. Hold, while you wait for the cycle to fulfill itself.

Have to look through the price swings. Focus on the fundamentals, and make sure they're satisfying your original premise. GLP-1 drugs are its biggest tailwind. Domestic, so no geopolitical risk. Good component of a well-balanced portfolio.

Amongst all of big pharma, doesn't have the pipeline or product infrastructure to grow revenues constructively. Tries to growth through shrinking costs and losses -- that only works for so long.

On the surface, you'd think it has great promise. He's neutral. Price is not particularly attractive. Doesn't stand apart compared to peers. 

At this point, GEV is the one he wants to do more homework on.

Of the 3 companies in the GE stable, the one his team is doing a deep dive on. Pulled back from highs. Electricity will be in huge demand as we build out data centres. It comes down to valuation.

Sold a few weeks ago to be safe. Troubles with rising medical-cost ratios and erratic reimbursement rates. Earnings reported this morning were "OK". 

Reason for selling is the upcoming US midterms may lead to Democratic House and Senate. Gordon lived through the mid-90s when Bill Clinton was president and assigned Hillary Clinton the task of cleaning up healthcare insurance. All these stocks went stone cold for 3 years.

Interest rates are the culprit. Rates went up instead of down. Not a great environment when your business is mortgages. Continues to hold. Will perform well once macro environment comes into line. Doesn't believe rate-hiking cycle has strong legs.

Has it at a certain percentage in portfolios. New clients buy in, but he's not increasing the percentage weighting overall.