Summary
Highlights
The speaker opens by discussing recent stock market dips, framing them as opportunities for investors. He highlights significant losses in individual stocks like ELF, Honest, and Celsius, but emphasizes the long-term perspective, noting the significant growth of his public account despite daily fluctuations. He warns against being shaken by short-term volatility, likening current market conditions to the pain experienced by investors in 2018. He also mentions the importance of a private stock group for in-depth analysis and support.
Celsius Holdings' recent stock dip is attributed to a misunderstanding of a one-off distribution termination expense of $246 million. This expense was fully funded by PepsiCo, meaning Celsius's cash position was unaffected. The speaker argues Celsius should have seen an increase, not a decrease, in stock price due to strong revenue and gross profit growth. His projections for Celsius show strong future growth, with conservative revenue estimates of 30% and net income potentially doubling next year, given the absence of the one-off expense and the full integration of new acquisitions.
ELF Beauty experienced a 35% stock drop due to missed revenue estimates, which the speaker deems an overreaction. He believes the stock should have fallen 5-15% and continues to see significant upside. His bull-case projections include 25% revenue growth in 2026 and 20% thereafter, driven by full integration of acquisitions and international expansion. He also discusses the potential impact of tariffs, which if removed, could significantly boost ELF's margins and stock price. The speaker highlights ELF's history of extreme volatility but consistent long-term growth.
The Honest Company's stock dropped 30%, which the speaker believes is unwarranted, suggesting a 5-10% drop would have been more appropriate. He notes the company's strong balance sheet, with over $70 million in cash and no debt, against a $259 million market cap. The current revenue decline is attributed to exiting unprofitable product categories as part of 'Transformation 2.0,' designed to improve margins and long-term profitability. He suggests this move could also position the company for a potential acquisition.
The speaker details his recent stock purchases, including Nike, Celsius Holdings, PayPal, ELF, Cheesecake Factory, and Amazon. He explains his rationale for each, emphasizing long-term growth potential and undervalued opportunities. He highlights PayPal's insane return potential over the next three years and Amazon's position as the second-best buy in the 'Magnificent Seven' after Meta, due to its growth potential and his current under-exposure to the stock.
He discusses broader market conditions, including the S&P 500's record-breaking streak without touching its 50-day moving average, and the bifurcation between strong index performance and underlying stock weakness. He mentions the correlation between Bitcoin's performance and risk appetite in the market, with a sell-off in Bitcoin signaling a risk-off environment. He also reacts to an analyst's call for the S&P 500 to reach 6500, and Tom Lee's bullish prediction of 7500 by year-end, which he finds unrealistic given current government shutdown concerns.
Robert Frank reports that only a third of millionaires use wealth advisors, and among those who do, many are considering switching due to cost and lack of personalized service. The speaker shares his personal stance against using a financial advisor, preferring to manage his own investments but acknowledging their value for those less familiar with financial markets or needing accountability. He highly recommends professional tax services for high-net-worth individuals due to the complexity of tax laws and potential for significant savings.
Revolve Group demonstrates strong financial performance with 4% net sales growth, 11% gross profit growth, and 97% net income growth. The company boasts an excellent balance sheet with significant cash reserves and low liabilities, making it an attractive long-term investment. FuboTV, initially a speculative stock, is becoming less so due to strong execution, breaking the $4 barrier and showing over 80% growth. The speaker believes Fubo is undervalued, especially after its deal with Disney, positioning it for significant subscriber and ad revenue growth.
AMD maintains its strength despite market volatility, driven by strong growth in its data center business, particularly with the upcoming MI400 series. The speaker’s bull case projects 40% revenue growth and 50% net income growth, pushing the stock price to $845-$1,100 by 2029. His base case also predicts substantial growth, making AMD a unique opportunity for high compound annual growth rates over the next four years. He emphasizes AMD's increasing strength and future narrative.
SoFi continues to show strength in the fintech sector, outperforming rivals like Robinhood. The speaker believes SoFi is the most exciting fintech company, focusing on traditional banking services that attract valuable long-term customers. Shopify, a significant position in the speaker's portfolio, has delivered 146% growth. Despite not being part of the 'Magnificent Seven,' Shopify has outperformed most of them since its IPO, demonstrating strong revenue growth (32% year-over-year) and a lean, asset-light business model with high profitability potential.
The Honest Company receives a C-grade for its income statement due to a revenue decline, but is praised for reducing general and administrative expenses. Its balance sheet is described as 'legendary,' with cash and equivalents exceeding total liabilities. The company is undergoing 'Transformation 2.0,' exiting unprofitable product categories to improve margins and profitability, even if it means short-term revenue contraction. The speaker trusts CEO Carla to successfully navigate this transition, potentially positioning Honest for a significant acquisition or long-term growth as a multi-billion dollar company.
The speaker reveals his new stock pick: American Express (AXP). He praises it as a stress-free dividend and value stock with strong growth potential. His base case projects 8% revenue growth and 12% net income growth annually, leading to a stock price of $700-$800 by 2029, a significant increase from its current $365. He highlights American Express's consistent share buybacks and robust cash flows, which continually drive up earnings per share. Even in a bear case, he expects to make a profit, underscoring its low-risk, high-reward profile.
ELF Beauty's D-grade income statement reflects a challenging quarter with increased expenses, despite revenue and gross profit growth. The company's guidance for 18-20% revenue growth in fiscal 2026 is seen as conservative, likely to be beaten given past performance and strategic efforts. The speaker emphasizes ELF's historical volatility but consistent long-term upward trend, having weathered multiple crashes to reach significant gains. He maintains that despite short-term fluctuations, ELF is poised to become a cosmetic giant.
The speaker shares personal anecdotes about consistently experiencing stock crashes and corrections throughout his 17-year investing career. He emphasizes that such downturns are a normal and inevitable part of the investing landscape. He asserts that long-term success requires diversification and resilience through painful periods, drawing parallels to athletic training. He encourages listeners to embrace the 'pain' of thorough research and market fluctuations to achieve their financial goals and dream lifestyle, stating that 'you can't have the success without the pain.'
AMD is undergoing a monumental transformation, with its stock demonstrating resilience despite market-wide risk-off sentiment. The speaker delves into AMD's latest earnings, highlighting an 'A+' grade due to impressive revenue growth ($9.2 billion from $6.8 billion), a 12-percentage-point sequential increase in gross margin, and surging net income. All business segments (data center, client, gaming, and embedded) showed strengthening sequential growth, indicating healthy underlying business trends. He reiterates his long-term confidence in AMD, projecting the stock to reach $300, $400, and even $500+, calling current conditions an 'appetizer stage' before greater growth.
FuboTV received a D grade but showed significant improvement by cutting losses and reducing marketing spend. The recent deal with Hulu Plus Live TV will bring millions of new subscribers, diminishing the need for aggressive marketing in the short term. The advertising business is expected to accelerate significantly due to Disney's involvement, leveraging Disney's marketing power and improving ad conversions. The speaker argues that Fubo, currently under $5, is significantly undervalued given its strengthening balance sheet, Disney partnership, and potential to become a profitable giant in the streaming space.
The speaker reacts to an interview with Palantir CEO Alex Karp, who expresses frustration with short-sellers and analysts who don't understand the company's unique value. While acknowledging Palantir's success in enriching retail investors, the speaker disagrees with Karp's assertion that Palantir is the only company to do so, citing numerous other stocks. He advises Karp to anticipate negativity as a consequence of success and emphasizes that short-selling does not inherently harm the company's operations. He further criticizes Karp's repeated negative comments about Democrats.
The discussion continues on Palantir's valuation. The speaker critiques Karp's claims of market manipulation and his emotional response to short-sellers, stressing that their actions don't directly affect Palantir's business. He explains that Michael Bur's short position likely anticipates a deceleration of Palantir's growth, which, combined with a high valuation, could lead to a significant stock price drop. The speaker asserts that most CEOs and CFOs lack expertise in valuation, and Karp's statements imply a misunderstanding of market dynamics.
The speaker provides commentary on Tom Lee's recent market predictions, including a 7,500 S&P 500 target by year-end and 150-200,000 for Bitcoin. While acknowledging Lee's general bullish accuracy in a bull market, he cautions against 100% agreement, citing past inaccuracies. He deems Lee's S&P 500 prediction overly optimistic given ongoing government shutdown concerns. The speaker suggests that significant market pain, such as a 10% S&P 500 drop or a TSA workers' strike, might be necessary to force a resolution to the government shutdown.
Cheesecake Factory, despite being a 'hated' stock by many analysts, is presented as an exciting long-term investment. The company earned a B+ for its income statement, with increases in revenue, gross profit, and net income. While the main Cheesecake Factory brand's revenue growth is modest, its other concepts like North Italia and Flower Child are seeing significant growth (16% and 31% respectively). The speaker views Cheesecake Factory as a stable 'cash cow' funding the expansion of these high-growth brands. Its low 13x forward P/E ratio offers substantial downside protection, with a projected 20-30% compound annual growth rate.
Estée Lauder, often overlooked by male investors, is highlighted as a compelling turnaround play. The company's revenues are now growing after a period of decline, indicating successful restructuring and adaptation to online channels. The speaker points to Estée Lauder's long history as a consistent growth stock before the pandemic, returning 745% between 2010 and 2020. The latest earnings show significant improvements in operating income and net earnings, marking 'inning two' of its turnaround. He projects the stock to double or triple within 24-36 months, with the potential for sustained long-term growth and dividend income.
Amazon, despite past underperformance against market indices, is considered a must-own stock due to its three core businesses: e-commerce, AWS, and advertising. The speaker attributes past underperformance to overvaluation during the pandemic-driven growth surge. He predicts massive outperformance for Amazon over the next five years, driven by accelerated AWS growth (a major focus for Wall Street) and strategic cost-cutting measures, including recent corporate layoffs. These actions are expected to significantly boost profitability, with net income potentially growing at 30-40% even with 15% revenue growth. His base case projects a 16-20% compound annual growth rate based on current numbers.
PayPal is presented as a hated stock with significant turnaround potential. Despite a 63% drop over the past five years, the company's revenue growth has clearly accelerated, from 1% to over 7% in the latest quarter, indicating a strong business model change. This improvement is not yet reflected in the stock price, potentially due to tax-loss harvesting by investors. PayPal's income statement shows strong growth in operating income, net income, and EPS. Even with modest revenue and net income growth projections, the speaker expects a compound annual growth rate in the 20-30% range, making it a compelling buy. PayPal's newly introduced dividend adds to its attractiveness.
Palantir's latest earnings are described as 'game-changing' and 'insane,' especially given the stock's high valuation heading into the report. The company's 'Rule of 40' score of 114% is exceptionally high, indicating superior growth and operating margins compared to other SaaS companies. US commercial revenue grew an astonishing 121% year-over-year, validating the speaker's long-term investment thesis. Palantir's financial fundamentals, including strong net income and a debt-free balance sheet with $6.4 billion in cash, are deemed 'perfect.' However, he cautions that while current numbers are accelerating, a deceleration in growth rates—likely in the next few quarters due to tough comparables—will inevitably lead to a stock price 'crack,' despite the business remaining fundamentally strong. He updates his projections for Palantir to reflect higher revenue and net income growth, though he still sees better investment opportunities elsewhere in the market.