Stocks Aren't as Expensive as You Think | WAYT?

Michael Batnick (0:15)

Here we are. There they are. How are you boys doing?

Sean Russo (0:18)

Let's go.

Matt (0:19)

Fantastic. Excited.

Michael Batnick (0:21)

All right. It is Tuesday, September 8th. We are live at 5 as always. My name is Michael Batnick, and I am joined by Sean Russo. Sean, introduce yourself. Say hello to the audience.

Sean Russo (0:31)

What's up, guys?

Michael Batnick (0:33)

And of course, Chartkin Matt, who needs no reintroduction. Chart, say hello.

Matt (0:37)

Hello, everyone.

Michael Batnick (0:39)

Great to see you guys.

Why are they here? Well, Josh is out today with a back. If there was an injury report, get into the NFL, swing of the things. Josh has a back. Not going to reveal more than that. I myself dealt with back issues.

Sean Russo (0:54)

Me too.

Michael Batnick (0:54)

Not fun. Oh, yeah?

Sean Russo (0:56)

Yeah.

Michael Batnick (0:57)

During your playing days?

Sean Russo (0:59)

All the time. Last month.

Michael Batnick (1:02)

Sean, flex a little bit.

Matt (1:03)

What did you do?

Michael Batnick (1:05)

You were a sport baller.

Sean Russo (1:07)

I was a sport baller. I played football in North Dakota.

Michael Batnick (1:10)

Go Hawks.

Matt (1:10)

You got football guys here, Michael. D3 for me.

Michael Batnick (1:15)

We'll get to you. Sean, guard or tackle?

Sean Russo (1:18)

A little bit of both, but tackle mostly.

Michael Batnick (1:21)

All right. D what? Was that D1?

Sean Russo (1:24)

Yeah, D1. SCS, though.

Michael Batnick (1:27)

Char, where did you play?

Matt (1:29)

Union College, Division 3, Liberty League.

Michael Batnick (1:32)

Still.

Sean Russo (1:33)

Hell yeah.

Michael Batnick (1:34)

Still not nothing. All right. So, Josh, I hope you're feeling better. Get well soon.

Here's what we're going to get into tonight. We're going to talk about, and we've got charts out the ass. You would not believe how these boys cooked tonight. We're going to get into the great re-rating and why some stocks might not be as expensive as people think. We're going to do a little bit of Peter Lynch's old adage, invest in what you know, why it's harder than you think. It works sometimes, sort of.

We're going to talk about one, what I think is a sort of missing ingredient from this alleged stock market bubble. And then we'll get into Apple's $2,000 phone. We'll do a mystery chart and then we'll get out of here. But first, we've got a sponsor tonight. Gentlemen, what do we got?

Matt (2:17)

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Michael Batnick (3:24)

All right. Listen, I feel like I make it look easy.

You guys were lumbering through that chart. You got a throat. You're coming off a wedding. So you have an excuse. Sean, clear your throat. My fault.

Sean Russo (3:36)

My fault. Sorry.

Michael Batnick (3:37)

All right.

Good job. Let's get into it with Matt. This is you. We're talking about a great re-rating. What are we talking about here?

Matt (3:46)

Yeah, yeah. So we're talking about the great re-rating.

So the beginning of the year, I talked about the great broadening. That was happening in the market. And so we had a lot of stocks that were going up that weren't necessarily the Mag-7. And now we have a new phenomenon, which is what I'm calling the great re-rating. So the first chart that I brought today, Duncan, can we throw this up?

Is we're looking at the number of S&P 500 stocks with a 4P greater than 40 So these are the stocks that are like the most expensive in the market. And so as this line goes down, it means there's less stocks that are trading above a 4 times 4P. And look at it today. We have 27 stocks in the S&P 500, only 27 trading with a 4P greater than 40 That's like marking past bear market lows and we're within 2% of all time highs. All right. So that's really incredible.