5 Stocks Are Driving The Entire Market | The Acquirer's Multiple®

During their latest episode of the VALUE: After Hours Podcast, Carbonneau, Forehand, Taylor, and Carlisle discuss 5 Stocks Are Driving The Entire Market. Here’s an excerpt from the episode:

Tobias: What’s Colin’s take on the Fed and the markets?

Jack: We haven’t had him on for a while, actually. With him, [crosstalk] we tend to do these primers. So, we wanted to do a primer like what investors need to know about inflation, or what investors need to know about Fed policy, because he’s really, really good at that stuff, like, making it understandable for people what’s going on. So, we ask less about predictions, and we ask more about teach us what we need to know about inflation and what drives it, or teach us what we need to know about what the Fed is doing. We tend to do stuff like that with him.

Tobias: Is inflation still running hot? It’s not reported on anymore.

Jack: It depends on who you ask. I guess, it depends on what number they’re throwing. That Truflation website is showing that it’s running the threes now.

Jake: Is that right?

Tobias: Truflation says in threes.

Jack: Yeah. So, lower than a lot of people think, but then a lot of other people are saying, it’s running four or five. [crosstalk]

Tobias: I thought it’d settled into a 5% range, like it’s two years of 5%, something like that.

Jack: Yeah. This is something that’s definitely beyond my pay grade is trying to figure out inflation and all the different measures of it and all the things that go in it. There’s just so much going on. It seems like it’s calmed down, but it certainly hasn’t calmed down near where the Fed wants it to be.

Tobias: A big run up in Nvidia and all of the tech stocks following must mean that they’ve got headroom to keep on raising rates.

Jake: [laughs]

Tobias: There’s still a fair bit of speculation out there as far as I can see.

Jack: I think that’s the problem. I think they’re going to keep going.

Jake: [crosstalk] spirits.

Justin: To your question about the market– [crosstalk] Sorry, Toby.

Tobias: Yeah. No, sorry. [crosstalk]

Justin: I was just going to say to your question about the markets, because we work with a lot of individual investors. I think people were frustrated a little bit with the losses last year, but it was accepting to some extent, because the market was down, whatever, 18%. You hung in there and there was no place to hide.

Tobias: You’re probably still up over five years, right? You’ve well and truly up over [crosstalk] depending on when it started.

Justin: But I do think that when people are looking at the last two and a half years and seeing that they’re flat, I think it’s somewhat frustrating. But I don’t get the sense that individual investors at least are overly worried or scared. I had some conversations around the debt ceiling. For some clients, we did some small adjustments just in case something went haywire. But it’s a weird market. I don’t know if that means it’s complacent. I don’t know if it means that we’re just in this, we got to just grind it out. It’s hard for me to see why this thing rips higher, but then again, maybe if the market starts to sniff out that the Fed is going to move, you’re probably going to see better performance out of many stocks, probably. It’s just a weird market these days, I feel like I know. Jack, what do you think?

Jack: Yeah. No, I’m just hoping it’ll widen out some for the type of things we do the five stocks driving the whole market is not where you want to be.

Tobias: [laughs]

Jack: There’s really no factor you can use that gets you at five stocks driving the market, I guess market cap.

Tobias: Market cap.

Jack: Yeah, exactly. But that’s not one of the better ones over time. So, we were just talking to a client about this the other day like, this idea that, if you look at what works over 100 years and you look at what’s worked over a much shorter period, they’re totally opposites of each other. And so, it’s a tough thing for clients to digest and think about. We try to bring people back to what’s worked over 100 years. What’s worked over 100 years is not by the biggest companies that have the most price appreciation. That’s not really what it’s been. And so, we try to bring people back, but it’s hard when these big stocks are driving the market like they are.

You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:

Apple Podcasts