Compelling buys, stellar tech moves with The Financial Prophet

0:00I also doubled down on my Palantir position around the lows in April, which was a stellar move. And I also want to mention that I had such great conviction in Palantir when it was still a$6 and a$7 stock back in 2022 and 2023, early 2023, that I actually built it into my most significant portfolio position with about a 15 % to a 20 % weighting when it was only around$7. because I saw that it was a monopoly very, very early on. I wrote about it many, many times on Seeking Alpha. I don't exactly understand why many investors waited so long to get into Palantir, but I'm very happy that I positioned myself and everyone in my investment group to be in Palantir very early, around that$6 or$7 mark.

0:47And we just rolled that stock all the way up to over$100 and to about$150. 20x return in about two years. that's pretty great.

1:05The Financial Profit, Victor Durganov. Welcome back to the Investing Experts podcast. Always great to talk to you on Seeking Alpha. Welcome back to the show. Thank you for having me on. I'm glad to be here. It's great to have you. You've covered a number of stocks in the past. Palantir is the most prominent one that comes to my mind when I think of past episodes. How are you looking at the markets? What are you taking away from your understanding of what's happening right now? So, I mean, we have a very interesting market dynamic right now. You know, the market has come a really long way since since bottoming in April.

1:46We've had a stellar rise. We've had something like a 30 % increase in S &P 500 and about a 40 % increase in the NASDAQ 100, which is pretty remarkable. I mean, we're talking about a three-month time frame. This is something that we've basically never seen before. I believe that this even eclipses the rebound after the coronavirus bottom. So it's been amazing. It's been a great ride. And I think one of the most important things I did this year and, you know, and in general, maybe in my whole investment career, one of the most important things I did was that I aggressively bought the April 7th bottom in pre-market.

2:31Now, I was very, very confident about with like a 98, 99 % probability just based on the fundamental factors, the technical indicators, and especially the sentiment gauges. I mean, we had the fear and greed index down at a three, its second lowest reading ever. So I was so convinced that we hit the bottom. I went basically all in on high quality stocks right at the lows. You know, I basically attacked with all the money that I had, the cash position. Plus, I actually took on some margin, only about 35%. but it was significant enough for me to build really, really considerable positions in stocks like NVIDIA, AMD, Dell, Google, Amazon, Marvell, Broadcom.

3:28Basically, I just bought a lot of these stocks right at the lows and also some nuclear stocks like VST, SAG, OCLO. So, I mean, it was actually as scary as it was, it was an amazing period to just capitalize on the markets. And that's exactly what we did. And, you know, all the investors in my investment group, you know, it's 500 plus investors now. They were very, very happy with, you know, with that move and and the way it worked out because I kept, I kept staying long the market. You know, I always said people were asking me around the lows, you know, I mean, should we sell, get out, sell America?

4:11And, you know, I just said, no, we, you know, we hedged a little, a little bit beforehand. You know, we knew that this, this kind of decline could potentially happen. We didn't expect a black swan event, but that's what we got. But, you know, you never want to sell the bottom. And that's what I told people. Most of them took my advice and, you know, they're very happy. investors right now. Some discussion on this podcast and in general in investing circles and discussions is about the Magnificent Seven and how much the stocks in that moniker are deserving of it, where they stand now. Two of your most recent articles on Seeking Alpha are buys on Tesla and Google.

4:52Yes. Speaking of which. Yes. So talk to us, maybe contextualize us specifically with contextualize for us the tech sector, how that's moving the market, what that means for you, why these stocks, speaking of buying at lows, does that have anything to do with it, specifically when it relates to Tesla? Share with us maybe your thoughts there. Yeah, absolutely. And just to go back to Palantir for a second, because you mentioned that when you speak to me, you think about Palantir. So first of all, I forgot to mention that we also, I also doubled down on my, on my Palantir position around the lows in April, which was a stellar move.

5:30And I also want to mention that I had such great conviction in Palantir when it was still a six and a$7 stock back in 2022 and 2023, that early 2023, that I actually built it into my most significant portfolio position with about a 15 to a 20 % waiting when it was only around$7. So, I mean, I had, because I saw that it was a monopoly very, very early on. I wrote about it many, many times on Seeking Alpha. I don't exactly understand why many investors waited so long to get into Palantir, but I'm very happy that I positioned, you know, myself and everyone in my investment group to be in Palantir very early around that six or seven dollar mark.

6:19And we just we just rolled that stock all the way up to over 100, over 100 and to about$150. So we did amazing things with Palantir, just phenomenal 20x return in about, you know, two years. That's that's pretty great. Now, to return back to your original question about about the mag, you know, about the mag stocks. Basically, I look at them this way. So I don't call them the Magnificent Seven. I call them the mags. And the mags, in my view, are Tesla, Google, Amazon, NVIDIA, Apple, Microsoft, Broadcom, and Meta platforms. These are the eight most significant tech companies globally. They're all about a trillion market cap or higher.

7:08and basically I like all of these names. Right now I own most of them. I stay away from actually from Microsoft. I usually stay away from because I think it's too expensive in my view. It has a pretty high peg ratio and I think it's relatively expensive relative to its growth prospects in my view. It's a very dominant company but it's not something I want to own. And a similar dynamic with Apple. And that's because I believe that they're a little bit pricey. And I think that there's maybe limited upside relative to some other stocks, like, for instance, Google. Google is very cheap. Now, there's a good reason for that, because there's the DOJ investigation, there's the possible potential spinoff of Chrome or a divestment, I should say.

8:02uh but you know having said that that's that's probably not going to happen so i believe the stock is being um you know kind of priced for a potential uh very negative event and there's a very low probability that that that highly negative event the forced divestment of chrome will occur so i actually think alphabet is a good buy here now uh i also own amazon i think you know, it has amazing things going forward and it should do really well. I own some Meta, but it's, I'm under, I only have a 1 % position now, but I really, really like this company for several reasons. It's doing amazing things with AI, you know, as other companies too, but Meta seems to be really out to kind of, you know, it's really competing to be at the top, basically.

8:57And what it's doing, you know, it's recruiting a lot of the top talent. It's taking, you know, it's taking top people from OpenAI. It's taking some people from Apple and, you know, and other companies. And it's basically doing this by providing just massive, massive pay packages. But, you know, it's looking long term because it has basically a social media monopoly. It has, you know, it has the amazing metaverse concept going. plus its leading position in AI, it kind of positions it very, very well to capitalize in multiple markets in the future. So I believe Meta is an excellent company to own here.

9:42Now, as far as the chip stocks, Broadcom and NVIDIA, I view them a little bit differently because they are maybe a little bit more cyclical in a way because, you know, just because when the AI slowdown does occur, we're going to see, you know, some margin compression in these companies. So while I am, you know, I have been bullish on them, and I remain positive on them going forward, I would be a little bit more cautious in the intermediate and longer term, just because of, you know, they're more of like hardware companies. So So yes, they have software segments, but a lot of their money comes from selling hardware, whether it be the most advanced GPUs right now.

10:29But there are other companies like Marvell, AMD, and others that are also looking to compete. So we're probably going to see some margin compression in the future. So those are a bit different for me, even though they are great companies. Finally, Tesla. It's maybe the most interesting of the companies. It's the most controversial for sure. It's also the one with the highest risk reward ratio. So, you know, some people say that it's overvalued. And of course, if you're judging it by a traditional P ratio or something like that, then, you know, and especially if you look at it as an auto company, then yes, it will look overvalued to you.

11:09However, I view Tesla as a, you know, first of all, as a tech AI company with remarkable potential in FSD, in the robo taxi industry, because that's going to be massive. You know, the self-driving industry is going to be huge. I mean, 10 years from now, I'll be surprised if 50 % of us are driving ourselves. Maybe even in five years, 50 % or so are going to be in driverless vehicles. So it's definitely the future. Tesla is the leading player. There are other players like Waymo and Amazon is getting into the business a little bit. And we have Chinese players. However, no one has the Tesla advantage.

11:54Now, I mean the infrastructure. I mean the ecosystem. They have so many cars on the roads for so much time. And these cars are basically computers on wheels. Now, they record everything. All the data goes back into Tesla's remarkable AI supercomputer. And just the data that the company has is phenomenal. Now, it uses its own proprietary technology, doesn't need to rely on Mobileye or any other company for driverless tech. So it has so many advantages, the supercharger network. They're really positioning themselves to corner the self-driving FSD robo-taxi market, which could potentially be worth trillions in maybe five or 10 years from now.

12:43So that's enormous potential. Then there's the robotics segment, which people may think it's far out there and it's futuristic now. But just wait a couple of years and you may see a Tesla bot in almost every household. maybe in five to 10 years, that could be the hottest product on the market. Now, have you seen the Tesla robots relative to their competition? The competition looks sloppy. They have wires sticking out. Their robots are walking backwards. They're not doing the right things. They're not doing anything right with their fingers. Sure, there are some companies that have certain elements worked out, but no one has, again, no one has the complete robot puzzle together like Tesla.

13:28No one. And this business is going to be massive. I mean, I'm talking about, I believe it's going to be making hundreds of billions of dollars off of these robots in the future. Now, if you combine this, you know, you combine the FSD, the robots, you know, they have, of course, their traditional sort of car business. They have the best selling, some of the best selling cars. The Model Y was the best selling vehicle last year. this year it could also be the best selling vehicle um you know you you have the model the model three great selling vehicle and this is despite you know all the controversy recently with elon musk and you know doge and all that that's that's temporary in my view um all that all that fear-mongering you know that's that's been going away it's going to continue to go away and at the end of the day people are going to want the best products and tesla provides just that.

14:22They provide the best vehicles, the best EVs, in my view. And not only in my view, they have the best FSD program, they have the best robots, they have a very advanced AI component. So I definitely believe Tesla is a huge winner long term. You listed many of the reasons to be bullish that I feel like many people cannot disagree with. I think where people may have concerns is like we had Sara Awa talking about the robo taxi launch and she was expressing some concerns. You mentioned the Musk concerns and how they're temporary. Maybe people would say what about his continuous desire to want to put himself into the politics conversation, his continual, seemingly continual desire to want to be a public figure that is talked about.

15:17What would you say to those concerns or any other concerns that you hear? How would you counter them? I don't think that Elon Musk should stay out of politics. I think that Elon Musk should pursue everything that Elon Musk sees fit to pursue. And just like he told Dan Ives to shut up, I believe he was right in doing that, because I don't think anyone with the kind of success that Elon Musk has achieved and how much Elon Musk has basically created and done for humankind is more than anyone has done in any generation, I believe. So this is a one in a lifetime kind of generational genius that we're talking about here.

16:09Now, for someone like an analyst, I like Dan Ives, I think, and I align with a lot of his points. But for him to be kind of dictating and trying to restrain Elon Musk, I think is ridiculous. And I believe that Elon Musk is entitled to do what Elon Musk wants to do if it's within reason, if it's legal and what he's doing is not only reasonable. I believe it's a very necessary move to create a third party, the American party, and for this party to gain more and more traction so more favorable laws can be passed in the Senate and the Congress. And I believe that this should not be in any way impacting his businesses negatively.

17:01On the contrary, I believe that in the future, this is going to turn into a big net positive because we could see some friendlier legislation concerning renewable energy, concerning EVs, concerning other things that should have been in the big, beautiful bill that were actually excluded for other unnecessary pork. I believe that the EV credits should have stayed in. I believe that the United States should be more focused on solar energy, not just nuclear. I don't like wind or hydro that much, but I believe that solar is a good energy source. So I definitely think that him creating the third party is a positive.

17:45I don't think that shareholders, I think it's a mistake that shareholders are reacting negatively to it. I believe that all of these dips in Tesla stock are typically buying opportunities. And I also don't think that there's going to be great political fallout in the sense that Donald Trump is going to try to punish Elon Musk or do anything of the sort. You would posit that not only is Musk getting into politics and voicing his opinion and trying to create the kind of change that he wants, you would say that it's not only not a negative, it's a positive, that you seem to be a fan and that there are many more like you, and he's not turning off potential investors.

18:29He's bringing more in. Well, he's definitely turning off some investors, but those are going to be the investors that are ultimately going to lose out on making a lot more money because what they're doing basically is they are doubting Elon Musk. And if I've learned one thing over the years is that you don't want to bet against Elon Musk and you may be a fool to doubt him as well. As long as we're wading into some broader topics, care to weigh in on the broader markets and how you see those going and how the Fed is handling monetary policy, where you see interest rates going either in specifically the U.S.

19:10or also internationally, how you see monetary policy being handled? Well, absolutely. I would love to. Well, first of all, I think the monetary system here in the U.S. is the most crucial monetary system globally. You know, they're cutting rates in Europe, basically. Japan is actually raising rates a little bit. So, you know, we're having a very interesting monetary dynamic. And the Fed, you know, has been on hold for over six months now. So it's a very atypical monetary approach from the Fed to start cutting rates and then, you know, just go on hold for a long time. Because we We saw about 175 or 100 basis points worth of cuts from September.

20:07And now the Fed has been on hold for six months while mortgage rates are at decade highs. Credit card rates are at all-time highs. We're seeing a lot of – basically, we're seeing the market slowing down in a lot of key areas like housing and as well as consumer spending in some respects because of these ultra-high interest rates. And who's responsible for it? The Federal Reserve. And Chairman Powell is the main man responsible for this issue. And I believe that he is very much behind the curve. First of all, he was very negative regarding tariffs. And he was claiming that there was going to be a lot of inflation.

21:01Basically, you know, the Fed was looking out for increased inflation because of tariffs. Well, we didn't really see increased inflation because of tariffs. In fact, we've been seeing lower than expected inflation readings. So there might have been a slight uptick in inflation after, you know, the April 7th bottom. But we're not we're not seeing like anything like we saw, you know, after the coronavirus or we're really not seeing high inflation. Now, on the other hand, we are seeing the labor market weakening, especially in the private jobs market. We only, you know, we saw only about 75 ,000 private and non-farms created last month, as opposed to the consensus estimate for 105 ,000.

21:51So like a 30 % miss there, that is a big, big miss. So, I mean, that's telling us that the private sector is very cautious on hiring. you know, there's actually a considerable slowdown. And, you know, a big a big component of that is the very high interest rates, because, of course, corporations have to have to borrow money all the time. So they're borrowing money at very high rates right now. The national debt is around thirty seven trillion that, you know, we're paying one trillion dollars just in interest on that debt annually now. And that's because we have very high rates. Now, if we had a competent, I believe that Fed Chair Powell is pretty much an incompetent Fed Chair.

22:38Now, if we had a competent Fed Chair, we would have rates lower by now. And we would be aiming for a low enough rate so that we could issue some very long-term bonds, perhaps even 100, you know, like 100-year treasury. issue those at very low rates, you know, because we could have the Fed come in and, and buy, buy bonds on, buy treasuries on the open market. That's what we need basically to re, to refinance the national debt because, you know, we need, we need long-term rates. We need to refinance our national debt into longer term rates that are at a very low interest rate. Now, the way that we would do that is first by lowering interest rates.

23:26So, I mean, we're very far behind the curve on that. And then we would also introduce some quantitative easing to hammer down that longer end of the curve. And now that would give us an opportunity to refinance the national debt, as well as any kind of corporate debt and just debt in general, consumer debt. And in this instance, you know, we would not be paying as a nation a trillion dollars in interest each year. We would be paying something maybe like 500 billion or less. And we could be on our way to, you know, fixing our enormous budget deficit problems and things of that nature that are in large part because of high interest rates.

24:15And what would you say about the dollar these days and or any other currencies you'd care to add to that? I don't really see like a problem in the dollar relative to other currencies. I see a problem in fiat currencies in general. Yes, the dollar has declined from its highs, but that's just because it was at an uber high level when Donald Trump got elected. You know, everyone thought that, you know, he would want a strong dollar. But, you know, I didn't think that. I realized that the dollar was too strong that we needed a lower dollar because a lower dollar is actually better for the American economy.

24:56It makes it more competitive globally. So I believe the dollar is at a very good place now. Around a 90 on the dollar index is very healthy. It's a very good spot. I don't think it should be a lot higher than that. We see rate cuts occurring in the European Union. We see rate cuts occurring in Britain. We see a lot of major central banks cutting rates. So the Federal Reserve is behind the curve here. And I don't believe that the dollar is going to decline significantly once the Fed starts cutting rates again. And I think that once Fed Chair Powell is replaced and a new Fed chair gets appointed, whether it be when his term runs out or if he chooses to maybe retire early, which is possible, that would be great.

25:53I think the market would react really, really positively to that. That would be just an excellent phenomenon. And I don't think that the dollar would have a significant decline. There could be some transitory weakness, but we're still the United States. The dollar is still the reserve currency, and there are reasons for that. Look, we have the best, most advanced, strongest military globally. We have the most dynamic, the most, the strongest, the most amazing consumer economy globally. And, you know, we have the innovation. We have, no one has innovation like the United States. The US, you know, we have Silicon Valley.

26:42We have all the, all the mag, all the mag stocks. They're all American. You know, Europe, they have, they have like a few, a couple, you know, high quality big cap tech companies. But, you know, it's nothing compared to what to what America has. So America has the three things, you know, we have the three things for the wind. Basically, we have the innovation, we have the, you know, the most dynamic, the most remarkable, the most resilient economy. And we have, you know, the most powerful military globally. So that makes America the place to invest. So the dollar, I don't think it's going to decline.

27:25I just don't buy it. And what are you looking for this earnings season? It's just underway. What are the takeaways or what are the things that you're most focused on as you parse through those reports? Yeah. So, I mean, I'm most focused on the big tech earnings, of course, but other sectors are also very important because, you know, we can see what's going on in certain sectors of the economy by the earnings and the guidance that the companies give in those spaces. So, I mean, right now we've just seen several banks report, but we saw very positive reports out of JP Morgan, out of BlackRock, out of Wells Fargo, out of Citigroup.

28:07So, I mean, we're seeing really, really solid numbers like very good sales, you know, very nice EPS beats and pretty solid guidance. Now, one thing that we need to keep an eye on is, you know, the increases in delinquencies, basically. Loan delinquencies, credit card default rates and basically everything that has to do with a potential worsening in the credit system basically, especially the housing market is one thing that I am getting a little bit concerned about here because we did get that red flare, I believe they called it, out of Moody's or one of the rating agencies. which came out with the red flare saying that interest rates are too high, housing prices are declining in many areas.

29:05Basically, there's way too many sellers relative to buyers on the market. So that's a big negative there. We definitely need to watch the banks especially and lending institutions to see that that doesn't get out of hand because we don't want to see another 2006-2007 transpire when we have you know like a wave of defaults or a crash in the housing market or anything like that so definitely i'm looking for any anything that that could suggest that and thankfully we're not seeing anything that negative yet but i did notice some rises in you know in in delinquencies relative to credit cards and bank credit.

29:49So aside from that, of course, we have Tesla reporting soon. Netflix is actually reporting very soon. And we have the heart of the earnings season coming up in a couple of weeks where we're going to have all the big tech companies reporting like Amazon, Microsoft, Google, Apple, et cetera. So that's going to be very interesting. And I do believe that we're going to get solid numbers. We're going to get some pretty good guidance. There may be some limited visibility because of some uncertainty regarding tariffs. But I really think that most companies are starting to look past, you know, the tariff dynamic and they're looking more toward, you know, the tax cuts and, you know, potential rate cuts in the future, more liquidity, you know just they're probably looking ahead to 2026 and they're probably going to begin guiding a little bit better I think because there's really more and more opportunity for growth ahead like you know the way I'm looking at the market now is that we've had this massive rebound and it's great you know it's very solid it illustrates that the market you know just basically was way too panicky around April and in the beginning of the year.

31:12Now, we're on very solid footing, but we're a little bit overbought here. So I believe we could use at least a three to five kind of technical correction in the S &P 500. We'll probably get that around the summertime time or maybe in the early fall. But that's going to turn into a very compelling buying opportunity, I believe, because there is, you know, that expectation for a lot of growth ahead. And I don't think we've seen anything, you know, relevant to animal spirits yet. Like, you know, we've seen it in some isolated stocks and some isolated sectors. But I believe that when, you know, when we revisit the market in 2026 and maybe 2027, the market could be considerably higher by then because by that time we could really see, you know, the animal spirits kicking in a lot more than they are now.