Bear Flatteners and Stock Pick Rick

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Jack Hough (0:35)

Hello, and welcome to the Barrons Streetwise podcast. I'm Jack Hough, and in honor of America's 250th birthday, it is 250 degrees outside where I live in New York. Hope it's comfier where you are.

Just ahead, we'll talk about the state of the broad US stock market, and whether investors should be wary about AI wobbles. We also have stock picks coming, four of them, from Rick Raskausik. He's lead portfolio manager at Sand Hill Investment Management. As I recall, it's a couple of healthcare ones, one that's sort of finance-y, and one with big trucks. Sorry, big trucks.

SPEAKER_4 (1:17)

Let's get into it.

Jack Hough (1:28)

Listening in is our audio producer, Emily, hi, Emily. Hi, Jack.

SPEAKER_6 (1:33)

Happy 250th.

Jack Hough (1:34)

I saw a, I guess you could say, fun fact. It's about the rapid uptake in the obesity medicines. And it said that the obesity rate in America has actually declined over the past five years. We've gone from 42% to 40%.

And so that's good news on our 250th, and it got me curious, where were we on our 200th? And I looked it up and the rate was 15% back then. So we are still, and not you.

Emily (2:05)

Give me a couple of hot dogs, Jack. I'm going to turn those numbers around for you. We're going to climb our way back up.

SPEAKER_6 (2:11)

No, no, definitely not you. But the rest of us, we're moving in the right direction. Well, we've got more to do.

Jack Hough (2:19)

Okay, we want to start off with, we have a listener question, right?

Emily (2:22)

We do indeed.

Jack Hough (2:24)

Who do we have?

Emily (2:24)

We have William, who actually has a question in response to your sit down with Brad Conger.

Jack Hough (2:30)

Okay, let's hear it.

Emily (2:32)

William says that he is in the conservative camp, like our recent guest, Brad Conger, but he's been wrong about the direction of the market before. He says there's nothing worse than being wrong, or what some analysts say, early.

He's struggling with the price action of some of these tech stocks. When William works on Wall Street, he says it was a surprise that your stock would even go up two, three, maybe 4% for large cap stocks. And forgive me, because you put the tickers, William, so I'm going to have a bit of trouble here. But you use examples like Dell, HPE.

Jack Hough (3:07)

That's Hewlett-Packard Enterprises.

Emily (3:09)

Okay. Now, what about this one? He says heck in front of it, so it's got to be a big deal. VSXY.

SPEAKER_6 (3:17)

VSXY? I don't even know that. That must be an ETF.

Emily (3:20)

All right. Well, it's soared up to 47%.

SPEAKER_6 (3:24)

Wait, it can't be Victoria's Secret, can it?

Emily (3:28)

Maybe it can.

SPEAKER_6 (3:29)

VSXY.

Jack Hough (3:31)

That's Victoria's Secret, yeah.

Emily (3:33)

So he can't understand the price action. What is fueling these stocks? He doesn't think it's real money. He thinks it's the option market.

Jack, what are your opinions?

Jack Hough (3:44)

Thank you, William. I'm going to set aside Victoria's Secret. You can insert a joke here about the catalogs back in the day.

I think that stock is a separate case. That's a case of a low-expectation stock with a lot of short selling and possibly a short squeeze.

But yeah, some of the moves we've seen in the stock market, especially with anything AI connected, the two that you mentioned, Dell and Hewlett Packard Enterprises. Those are what we think of as old tech. Dell was best known for those dude, you got to get a Dell commercials many years ago.

These days, dude, you got to get a whole enterprise scale AI platform, which is what Dell is busy selling. And Hewlett Packard Enterprises, that's not the printers that we all swear at because you run out of the ink and then it tells you that you can't do a thing with it until you go and get only their brand of ink. And you end up in a basically a hostage crisis with your printer. That's not that, it's a different company that was separated years ago. HPE is the one that sells servers and those were in huge demand in AI data centers. So some of these old tech stocks are running, but the same is true of many kinds of companies, especially semiconductors, including memory lately. And I think it is driven by retail investors and momentum traders and excitement. You mentioned you're conservative. I'm not quite sure if you mean politics or economics. If you mean politics, I always recommend that people try to keep their investing separate from their voting. But if it's economics, which I think it is, then I'm with you. It makes me a little nervous when I see these huge, rapturous moves in stocks. It makes me think, of course, about 1999 and the.com stock bubble. I'm going to share with you some recent views from Bank of America. This is part of their mid-year target update.