The Market (2022-2026)

[Dback Jon]

FEDS hold interest rates steady again today resulting in stocks taking a bit of a dive in the afternoon. Continuing for now to take a wait and see approach as they gain more insights on tariff fallout before possibly lowering rates.

Which is the wise thing to do

 

[Yuma]

FEDS hold interest rates steady again today resulting in stocks taking a bit of a dive in the afternoon. Continuing for now to take a wait and see approach as they gain more insights on tariff fallout before possibly lowering rates.

Watch Trumps head explode ala Scanners!

 

[Folster]

I thought this was interesting.

Healthcare...

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[Yuma]

Maybe some opportunities to buy on healthcare?

 

[Folster]

Maybe some opportunities to buy on healthcare?

Healthcare is typically a defensive sector so underperformance during a bull market is to be expected. It's 5 and 10 year performance is a bit surprising because I feel like it was ripping during Covid.

I don't have any healthcare in my single stock holdings and like many I'm over exposed to the Mag 7 stocks, so I may add some healthcare exposure with XLV versus trying hit on one or two stocks in that sector.

 

[Yuma]

Healthcare is typically a defensive sector so underperformance during a bull market is to be expected. It's 5 and 10 year performance is a bit surprising because I feel like it was ripping during Covid.

I don't have any healthcare in my single stock holdings and like many I'm over exposed to the Mag 7 stocks, so I may add some healthcare exposure with XLV versus trying hit on one or two stocks in that sector.

That's cool. I don't feel I have enough money to try and hit on single stocks. So I generally look for an ETF for the sector. One thing I have noticed is that strategy raises your floor on returns, but it does limit your upside versus the stocks that shoot up. Just like you said, the Mag 7 you can get in many ETF funds, but you get a bigger bang for your buck buying them individually. Of course you have more risk overall. You just have to be comfortable with that risk.

 

[Russ Smith]

These markets are insane. Friday we find out all the job and likely inflation numbers and GDP are bogus and the markets tank. and then today they're up, even higher than they fell Friday, because experts now think there will be a rate cut because the jobs numbers were so bad. The rate cut won't be until Sept, but the markets are skying today?

I know earnings are good but for those of us old enough to remember the .com bubble this is starting to get to that point? When people say the fed will HAVE to cut interest rates to save the economy that's normally NOT a good thing

 

[82CardsGrad]

These markets are insane. Friday we find out all the job and likely inflation numbers and GDP are bogus and the markets tank. and then today they're up, even higher than they fell Friday, because experts now think there will be a rate cut because the jobs numbers were so bad. The rate cut won't be until Sept, but the markets are skying today?

I know earnings are good but for those of us old enough to remember the .com bubble this is starting to get to that point? When people say the fed will HAVE to cut interest rates to save the economy that's normally NOT a good thing

There really isn't a lot of logic behind the market these days. The S&P is trading at an historical valuation, around 22-23 P/E, when the historical average is around 16... Is it justified? Will companies grow their earnings to the extent this elevated P/E is validated? And does it even matter when the market seems oblivious to historical norms?

 

[elindholm]

Healthcare is typically a defensive sector so underperformance during a bull market is to be expected. It's 5 and 10 year performance is a bit surprising because I feel like it was ripping during Covid.

I don't have any healthcare in my single stock holdings and like many I'm over exposed to the Mag 7 stocks, so I may add some healthcare exposure with XLV versus trying hit on one or two stocks in that sector.

We used to own a handful of pharmaceutical stocks directly, but their variance drove me crazy. As a retail investor, it's near impossible to guess which drugs in the pipeline are going to pay off. I also had a disappointing experience with PFE, failing to cash in when it soared during the pandemic, and later losing all of those gains.

So, like you, I've given up on trying to pick a couple of winners. Our pharmaceutical coverage now is provided by PPH, which is similar to XLV but is 35% international (XLV is all domestic). PPH has slightly out-performed XLV over the past five years.

 

[Folster]

We used to own a handful of pharmaceutical stocks directly, but their variance drove me crazy. As a retail investor, it's near impossible to guess which drugs in the pipeline are going to pay off. I also had a disappointing experience with PFE, failing to cash in when it soared during the pandemic, and later losing all of those gains.

So, like you, I've given up on trying to pick a couple of winners. Our pharmaceutical coverage now is provided by PPH, which is similar to XLV but is 35% international (XLV is all domestic). PPH has slightly out-performed XLV over the past five years.

UNH seems to be the oversold value play or potential falling knife in that sector. UNH makes up 5.78% of XLV. I don't believe PPH has exposure to health insurance companies. One needs a strong stomach or cold capitalist heart to invest directly into a health insurer, UNH especially.

 

[Mainstreet]

There really isn't a lot of logic behind the market these days. The S&P is trading at an historical valuation, around 22-23 P/E, when the historical average is around 16... Is it justified? Will companies grow their earnings to the extent this elevated P/E is validated? And does it even matter when the market seems oblivious to historical norms?

JMHO, but I think the stock market is soaring because they are waiting for the Feds to reduce interest rates in September.

Then, inflation gets another kick-start. The question is, how many consumers can keep pace?

 

[82CardsGrad]

JMHO, but I think the stock market is soaring because they are waiting for the Feds to reduce interest rates in September.

Then, inflation gets another kick-start. The question is, how many consumers can keep pace?

Oh, that is 100% the case... However, what seems to be lost in all of the market craze is that the consumer still represents 70% of GDP. Yes, the AI craze has lifted Big-Cap Tech Stocks to record highs which, collectively, have brought the NASDAQ and S&P to record highs. Even when the Fed does drop rates, maybe in Sept, or later in the year, it will be small bps.

I dunno... the more I look at all of this, I just can't see why the market will continue to leap forward. At best, it maintains current levels into next year. But I'd be lying if I didn't say some type of correction is coming soon, perhaps as much as 10%.

 

[Mainstreet]

Oh, that is 100% the case... However, what seems to be lost in all of the market craze is that the consumer still represents 70% of GDP. Yes, the AI craze has lifted Big-Cap Tech Stocks to record highs which, collectively, have brought the NASDAQ and S&P to record highs. Even when the Fed does drop rates, maybe in Sept, or later in the year, it will be small bps.

I dunno... the more I look at all of this, I just can't see why the market will continue to leap forward. At best, it maintains current levels into next year. But I'd be lying if I didn't say some type of correction is coming soon, perhaps as much as 10%.

Down to the basics as I see them, if the consumer can't keep up with prices it's either something like a recession or devaluing the dollar.

I don't think the Feds should lower the interest rate. It's opening Pandora's Box.

 

[82CardsGrad]

Down to the basics as I see them, if the consumer can't keep up with prices it's either something like a recession or devaluing the dollar.

I don't think the Feds should lower the interest rate. It's opening Pandora's Box.

Yep... Whether it's due to AI finally having an impact on jobs (meaning less bodies required to perform tasks), or companies feeling the Tariff pinch, the employment situation is likely to continue what appears to be, a downward trajectory.
Coupled with hire prices due to Tariffs, a full-blown recession definitely can't be taken off the table.

As for rates... I'm torn. Consumers, once impacted by the eroding labor market, will be in dire need of lower rates... However, with the impact of Tariffs causing higher prices (inflation), the case can easily be made rates should remain where they are.
It doesn't matter though as Trump's new Fed Chief will 100% be nothing more than his 'lil puppy on a leash held by Trump.

 

[Mainstreet]

Yep... Whether it's due to AI finally having an impact on jobs (meaning less bodies required to perform tasks), or companies feeling the Tariff pinch, the employment situation is likely to continue what appears to be, a downward trajectory.
Coupled with hire prices due to Tariffs, a full-blown recession definitely can't be taken off the table.

As for rates... I'm torn. Consumers, once impacted by the eroding labor market, will be in dire need of lower rates... However, with the impact of Tariffs causing higher prices (inflation), the case can easily be made rates should remain where they are.
It doesn't matter though as Trump's new Fed Chief will 100% be nothing more than his 'lil puppy on a leash held by Trump.

Personally, I would take a market correction like a recession over the alternative.

Then after the correction, interest rates would naturally come down.

IMO, runaway inflation will take down the average wage earner into something much worse, creating even more opportunities for the rich to get richer.

 

[elindholm]

UNH seems to be the oversold value play or potential falling knife in that sector. UNH makes up 5.78% of XLV. I don't believe PPH has exposure to health insurance companies. One needs a strong stomach or cold capitalist heart to invest directly into a health insurer, UNH especially.

Ah, I didn't process that XLV does the whole sector, not just drugs. So yes, that's another key difference. I won't touch UNH, but we do have HUM, so I guess you could say that's a similar gamble of trying to pick out an individual winner.

We also hold LH and RPRX, the latter of which has been having a great year so far.

 

[Yuma]

These markets are insane. Friday we find out all the job and likely inflation numbers and GDP are bogus and the markets tank. and then today they're up, even higher than they fell Friday, because experts now think there will be a rate cut because the jobs numbers were so bad. The rate cut won't be until Sept, but the markets are skying today?

I know earnings are good but for those of us old enough to remember the .com bubble this is starting to get to that point? When people say the fed will HAVE to cut interest rates to save the economy that's normally NOT a good thing

Oh there may be a rate cut, IIIIIIFFFFFFF Trump doesn't try and tariff the Universe 110 percent!

 

[Folster]

Apparently Buffett wasn't afraid of UNH. Right after I call it a falling knife, it's up nearly 30% off its low.

 

[Yuma]

Apparently Buffett wasn't afraid of UNH. Right after I call it a falling knife, it's up nearly 30% off its low.

Looks like people took some profit today and dropped it under $300/share. Gotta see the candlesticks....

 

[Dr. Jones]

Fun thread:

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[Yuma]

Fun thread:

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Wow! What a record for investing in Bitcoin. "Bitcoin’s "Boring" Year: After ranking #1 in 11 of the last 14 years"

 

[Russ Smith]

Never noticed this until tonight. Lucy had shares of GE that she's held for close to 10 years. A few years ago it spun out to GE, GEHC(healthcare) and GEV( which is electricity including wind and solar.) When it spun out she got one share of each of those new stocks. the HC one is down 8% over the time she's had it. the GEV was 66.71 when she got it, it's at 985 and change now and was briefly over 1200, the wind mill part is struggling since 2025 but otherwise she's up nearly 1300 perecent.

Man I wish she'd got more than 1 share in that spinout

 

[Folster]

I have been watching a few names in the software sector after they've been beaten down by the AI trade. I think the fears are overblown for a lot of the big names which makes for a potential value play. I opened a half position in Sales Force (CRM) yesterday and plan to add to it if it drops another 10% or so.

I don't see AI as a threat to them as it may be to other software companies like Adobe. They are entrenched in many enterprises and these businesses aren't going to replace them with some system that was vibe-coded in house, especially companies in highly regulated or critical industries. Maybe I'm underestimating AI.

Revenue, net income, and cash flow growth are all strong and analysts project that to continue. Valuations look enticing to me now that it's down over 50% from its all time high. I've ran it through my discounted cash flow analysis with multiple different growth assumptions and the potential upside looks good from here. I don't expect much initially until the AI frenzy plays out. We shall see.

As always, this is not investment advice.

 

[elindholm]

I have been watching a few names in the software sector after they've been beaten down by the AI trade. I think the fears are overblown for a lot of the big names which makes for a potential value play. I opened a half position in Sales Force (CRM) yesterday and plan to add to it if it drops another 10% or so.

I don't see AI as a threat to them as it may be to other software companies like Adobe. They are entrenched in many enterprises and these businesses aren't going to replace them with some system that was vibe-coded in house, especially companies in highly regulated or critical industries. Maybe I'm underestimating AI.

Revenue, net income, and cash flow growth are all strong and analysts project that to continue. Valuations look enticing to me now that it's down over 50% from its all time high. I've ran it through my discounted cash flow analysis with multiple different growth assumptions and the potential upside looks good from here. I don't expect much initially until the AI frenzy plays out. We shall see.

As always, this is not investment advice.

Could be a good play. I'm skeptical of CRM itself because it got way ahead of itself at 300+, and also I resent its inclusion in the DJIA. But I have a few positions that could be considered somewhat adjacent, for example FIS -- on which I've taken a loss during three months of holding it, but still.

 

[Devilmaycare]

I have been watching a few names in the software sector after they've been beaten down by the AI trade. I think the fears are overblown for a lot of the big names which makes for a potential value play. I opened a half position in Sales Force (CRM) yesterday and plan to add to it if it drops another 10% or so.

I don't see AI as a threat to them as it may be to other software companies like Adobe. They are entrenched in many enterprises and these businesses aren't going to replace them with some system that was vibe-coded in house, especially companies in highly regulated or critical industries. Maybe I'm underestimating AI.

Revenue, net income, and cash flow growth are all strong and analysts project that to continue. Valuations look enticing to me now that it's down over 50% from its all time high. I've ran it through my discounted cash flow analysis with multiple different growth assumptions and the potential upside looks good from here. I don't expect much initially until the AI frenzy plays out. We shall see.

As always, this is not investment advice.

I've been keeping an eye on them too but haven't pulled the trigger yet. UI (Ubiquiti) is another that I've been eying. Both seemed like they got over sold a bit.

I've been a little hesitant to move more money out of cash though lately with the way the market has been basically barcoding the last few month. Taking the 3.5% or so a month over sideways action hasn't felt like the worst move. Then I also have plenty of cash on hand for if we finally get our overdue recession and a bit of a market reset.