Welcome to the latest episode of Rise UP! – your go-to weekly market and economic recap, where the week’s biggest financial stories meet expert analysis. Hosted by Joe Duran, Managing Partner & CIO of Rise Growth Partners, alongside special guests Peter Boockvar (CIO, Bleakley Financial Group) and Scott Schwartz (Co-Founder & Principal, Bleakley Financial Group).
In this episode, we dive into:
- The Hidden Danger in Overpriced Stocks – Why high-multiple stocks like Walmart, Costco, and Palantir selling off – and what does it mean for market risk and volatility?
- The Government’s Next Big Move – From budget cuts to new tariffs and trade policies, how will Washington’s economic decisions impact markets and your money?
- Gold vs. Bitcoin: The Ultimate Safe Haven Debate – With gold at record highs and Bitcoin surging, which asset is the true hedge against market uncertainty?
- AI & Nvidia’s High-Stakes Earnings Report – Can Nvidia keep dominating AI spending, or are we seeing the beginning of an AI bubble?
Investment Concerns? Get a free portfolio review with Wealthion’s endorsed financial advisors at https://bit.ly/439CRT0
Hard Assets Alliance – The Best Way to Invest in Gold and Silver: https://www.hardassetsalliance.com/?aff=WTH
Peter Boockvar 0:00
When you have a high multiple stock, you have no room for error. And Walmart came into this earnings report trading at 38 times earnings, so when they guide to revenue growth of three to 4% but the street is expecting four while that’s essentially in line no room for error, the stock is going to pull back Costco, to use that as another example. They don’t report earnings, but the stock is trading at 58 times earnings. Palantir trading, I think triple digit earnings multiple. So I think it was sort of a rethink of, wow, there’s some very high multiple momentum stocks. Let me just sort of take some money off the table. And I think that’s sort of spread into other parts of the market, and hence the sell off.
Joe Duran 0:58
Hi everybody, and welcome to rise up. I’m Joe Duran. I’m one of the CO hosts. Unfortunately, my intrepid partner, Terry, is not here today. She’s on a flight, so we’re going to miss her a lot. We’re going to obviously miss her brilliant insights. But I do have two amazing guests with us today. We have Peter Bucha, the chief investment officer of Bleakley, a brilliant mind on how to navigate the markets, and Scott Schwartz, a chartered, certified financial planner and somebody who works with clients all over the country, helping them understand how to apply planning principles to make good decisions about their financial lives. General, thank you so much for joining me. We’re going to miss obviously, Terry’s wonderful takes on the world, especially given her being the chair of the CFP Board. But gentlemen, thank you for joining us. Hi Joe, good to see you. Scott, to see you. Peter, obviously, we got to start with what’s happened so far this week. We started off with a couple of new highs on the S, p5, 100, the Dow, the NASDAQ, their interest rates raised reasonably flat, and then big pancake. Obviously, date started quite ugly. Lots of big stocks, like Walmart, really hitting the skids. Had some some defense stocks also not doing very well. And so would love to get your thoughts. Obviously the volatility. We did get a nice recovery toward the end of the day, but still down around 600 points on the Dow, about half a percent on the s, p, although we’re down to more than 1% at one point today. So nice little recovery at the end. But how should we think about today? Obviously, volatility spiking a bit. What drove today’s action? Do you think? Well,
Peter Boockvar 2:35
I think the lead in to today’s action, which I think helps to explain what happened, is, while the market went to the highs, there really wasn’t like an umph rally to the upside. It seems like the market’s more of like getting a case of vertigo here, sort of chopping around. But was most interesting about the decline of Walmart and other high multiple stocks was, when you have a high multiple stock, you have no room for error, and Walmart came into this earnings report trading at 38 times earnings. So when they guide to revenue growth of three to 4% but the street is expecting four while that’s essentially in line, no room for error, the stock is going to pull back Costco, to use that as another example. They don’t report earnings, but the stock is trading at 58 times earnings. Palantir trading, I think triple digit earnings multiple. So I think it was sort of a rethink of, wow, there’s some very high multiple momentum stocks. Let me just sort of take some money off the table. And I think that sort of spread into other parts of the market, and hence the sell off. But again, in the context of a market that was just at the highs, but I think just some choppiness and some vertigo, as I said, making people a little little afraid of heights up here, it
Joe Duran 3:48
seems I was reading today quite a bit of concern that if Walmart is a little bit concerned about future earnings, about people’s spending ability, that it might affect future earnings growth, it might affect perhaps a slowdown in the economy. How do you feel about where we are in the economy? Do you have concerns that we’re headed for a slowdown, even with the markets and new highs, interest rates are pretty stable. But what are your thoughts on where we are on the economic cycle? Here,
Peter Boockvar 4:19
I see a very uneven economy. At the headline level, growth is about two and a half percent. It sounds great, but most of that growth is being driven by upper income spending, anything related to AI spend, and anything related to government spending, in addition to the government legislative incentive programs like the IRA, the chips act, infrastructure spending, if you look at other parts of the economy, like housing, where the pace of transactions of existing homes is at 30 year lows, manufacturing has been in a recession for about two years. Lower to middle income spending has been somewhat soft, and anything capital spending x ai has been soft as well. So sort of like. A two track economy that we’re experiencing here. And Walmart is always a great tell, because what’s interesting about Walmart is it’s not just a retailer that caters to lower to middle income people. They are have a growing presence in those making above 100,000 so anybody looking for value and convenience, Walmart is the winner. So it’s always a great tell. And we do have a follow through next week with a bunch of other retailers and a variety of different consumer product companies, consumer product areas, that’ll be a really good finger in the pulse of the state of the consumer, but definitely a bifurcated consumer. Peter
Joe Duran 5:37
and Scott would love to bring in on this. Scott, it seems to me the government is taking very seriously with the Department of government efficiency, reducing our expenses, the government’s starting to act like a regular human being who has lived beyond their means and cutting back. But obviously, government spending is a big part of the economy, and so when they talk about reducing the defense budget by any level of percentage over the next few years, or even the reducing the waste firing employees, letting them take early retirements, all of that will take some gas out of the economy. So Scott, what’s your perception of what’s happening here? How should, how should an average individual be thinking about this, what are the impact for the stock market? How do you think it affects the economy as a whole? I’d start by
Scott Schwartz 6:25
saying that one’s probably a little above my pay grade, but look at it. Look, I think that anytime you can be more efficient, that’s great. We’ve all been, you know, talking our whole lives about how we know that, you know, the government is a lousy, you know, steward of our money. Anecdotally, we’ve been talking since we were little kids about, you know, $5,000 hammers and what have you. So that’s always been expected. It doesn’t have to be that way. I think the upsides of the government getting more in line if we didn’t have these huge debts and deficits, I think probably help with the inflation situation. And I think the other scenario is, you’re right on the fact that fewer government employees. Those are people who have jobs and spend money too, less money being spent, you know, throughout the bureaucracy, that’s part of GDP, but I’m pretty confident that these people who leave the government will find other jobs. I think that things that are being done there, money that’s being spent there, can be spent elsewhere. I think the economy is dynamic enough that maybe in the short term we’ll see a little bit of slippage, but I think the long term will actually do better. So I’m pretty encouraged by it. Honestly. On
Joe Duran 7:26
a related subject, there was talk Peter that they’re gonna potentially give us a efficiency dividend back to American consumers of several $1,000 I heard $5,000 it seems unimaginable to me, like, what’s the point of saving on a deficit and then giving people a boost? That’ll obviously be kind of like the stimulus checks. Everyone will spend it on a new phone and create a short term blip. Do you think it happens?
Peter Boockvar 7:53
I don’t. I think they’re better off allocating that to getting the tax cuts that are expiring this year. Get them extended a one time check is just a one time impact? I’d rather see it focus on permanently extending those tax cuts, which I think that money should be allocated to Scott.
Joe Duran 8:11
Any additional thoughts on that? No,
Scott Schwartz 8:13
I think, I think that’s right. I think the problem when you send money out, it gets spent. And it also, you know, we should have learned a little something when they were sending that money out during COVID. All it really did was cause, you know, some unnecessary spending and some inflation. It didn’t really help anybody. Didn’t change anything. So, yeah, it’s
Joe Duran 8:29
like that second Martini. You really don’t need it. It feels good at the time, and then you regret it afterwards. That’s right. And all it does is add to the deficit. Obviously, we obviously have a new Secretary of Commerce. I’m going to check his name, because I never remember it. Howard lutnic, he was a finance guy from Canada. Fitzgerald, I think he’s quite big on tariffs as well. Any thoughts? Peter Scott,
Peter Boockvar 8:53
I think he’s going to be sort of the point man on tariffs. He was the one that was tasked to look into the reciprocal tariffs. You know, as Commerce Secretary, you’re sort of, you know, the guy who’s overseeing economic policy, and tariffs, we know right now is a pretty important part of of economic policy, in which, with respect to that reciprocity, you know, it’s trying. It’s going to try to sort of even out, you know, the tariff playing field. So if Europe tariffs a US automobile by 10% and we only put a 2% tariff on their cars coming into us, we want to even that out. In addition to the plan on the part of Luke is to include the European VAT taxes that they implement. So it’s that’s the goal. How it all plays out, well to see they sort of gave themselves through April 1 to try to figure it out. And also the key with the tariffs is, are they’ll get are they going to just sort of roll the revenue raising of it into extending the tax bill, or will this be sort of an isolated focus where, again, it tries to even out the sort. Know the trade playing field. I mean,
Joe Duran 10:02
reciprocal is very hard, right? Like, you can’t say, Well, you’ve got this much on cars. We’re going to put that much on cars because they might have a different amount on wine that we have, that they have a whiskey that we do on wine. So it’s very fluid. It’s very difficult to calculate exactly what the what the amount is you’re meant to tax, and what products you’re going to tax, but it makes it quite difficult. If you’re a corporate citizen, if you’re in the making products, and you’re trying to figure out what you could charge. And I noticed a lot of the car companies really getting hit quite hard just in anticipation of what could happen. So how does an investor think about this? Like, how should you think about navigating these tariffs in these rather complex times?
Peter Boockvar 10:45
Well, we are beginning to see some sort of softening of confidence in the manufacturing data, because this uncertainty, I think, if you are a small business or a manufacturer, you know tariffs are coming, but you just want to know where they are, because once you know the level of tariffs, then you can plan for it and you can move on. It’s it’s the the unknown that’s creating some sitting on the hands type behavior, particularly when it comes to capital spending plans, where we’ve seen some surveys where that has actually softened. So let’s just get it out there. Let’s have business be able to deal with it and move on. But until then, I think there’s going to be some hesitancy. So
Joe Duran 11:23
we’re going to shift gears here to our big topic. And I think it’s apropos, especially although we hadn’t planned it before. What ended up happening today is a reminder of where we are in the markets, all time highs, some serious volatility starting to kick in, even if it’s just for in between a day, interest rates still not coming down. And so we’re going to have a session on questions. The most frequent questions we get about how to navigate volatility, we we tend to be fairly optimistic, but we tell people prepare for for tough time. So Scott, we’re going to start with our first question, which came from Monica in Atlanta, who says, How do I know what the right level of risk is in my portfolio if I’m going into a volatile time? So financial planning, you deal with this every day. I know you have this question come up almost I can’t imagine that many days it doesn’t come up with doing what you do. So how should a person think about their risk exposure, their risk appetite, what is the difference? And how do I think about that when I’m putting a portfolio together?
Scott Schwartz 12:25
You know, you and I have talked about this a lot, right? We all focus so much on the day to day. What happened? You know, the reversal in the market, you know, from the lows of the morning and a recovery in the afternoon, or vice versa. The reality is, you know, when you’re in the financial planning business, like I have been for you know, I hate to say it out loud for 40 years. You see, we’ve seen a lot. We don’t focus on what happened today, right? So when we’re looking at, what should the volatility look like for a portfolio, the first thing I want to manage is, I want to manage my clients liquidity. So if you’re if the person asks this question, is 20 years from retirement, I’m not so worried about it, right? I want to have a good balance, high quality equity portfolio. I’ve got a 20 year time horizon. Whatever happened this afternoon at three o’clock, I assure you, will be worked out over the next 20 years. If that person is retired, however, and they’re drawing money from their portfolio, I want to make sure I’ve got enough liquidity available that’s not going to be impacted by the volatility in the market, so that at the end of the day, we know we’ve got five years of income coming in the door, and again, whatever’s happening in the market has plenty of time to sort itself out.
Joe Duran 13:25
I think there’s a very important point here, Scott, the difference between being a net saver and a net user of your savings. People say, Well, you should invest for the long term regardless. But the truth is, if you’re living on your savings and selling securities in a volatile time, your dollar cost averaging down, whereas if your net saving volatility is your friend. So I think one very big takeaway here is it really depends whether you’re in retirement or close to retirement, your approach to risk has to be very different. You should view that you need to have your life’s your spending money in safe harbor for at least the next five years so you can withstand volatility. You don’t want to be selling stocks when they’re going down. But the reverse is also true. If you are away from retirement. Volatility is your friend, because you get to buy stocks when they’re going down, when they’re volatile. And so again, I think that’s a very, important takeaway, anything you would add to that? Peter,
Peter Boockvar 14:23
no, I think that’s right. I mean, if you’re young, you almost want to embrace a down market, because then, as you say, you get to buy things cheaper. You know, the stock market is the only thing in the world where it becomes more attractive to people, the more expensive things get. And we talked about Walmart earlier. Walmart made its business on everyday low prices. If the stock exchange said everyday low prices, everyone would be scared, and no one would show up. So I think that people should not be afraid. Those that have a long term time horizon. Time horizon is so key here. Those with that long term time horizon should not fear a down market. They should embrace one. Yeah.
Joe Duran 15:00
So good, great transition, because Lewis and Dallas asked the question, how do I profit and how what are the best strategies in volatile times? And let’s stay away from trading trying to time the markets, because frankly, I’ve never seen anyone who gets it right. Maybe you have a secret that I don’t know about, but anyone who could time the markets wouldn’t, wouldn’t even need to invest, because I get it all right, but what should a person do to profit from it? What are the best strategies in volatile times?
Peter Boockvar 15:29
Well, one of my favorite Warren Buffett quotes, and I’m just paraphrasing, because I don’t know what exactly was I benefit from other people’s foolishness and impatience, right? And when you get volatile markets, that sort of is being expressed through people’s emotions. And sometimes those emotions get out of whack, and when they do which results in lower prices and people’s impatience, well that’s an opportunity to add to one’s portfolio. On the flip side, when everyone is really excited and the bullishness is ebul and that full boat is very full. That’s when actually you should get a bit more cautious in committing new money. This
Joe Duran 16:06
is kind of like a seesaw. If everyone’s on one side of the seesaw, the snap the other direction could be a lot more dramatic, because everyone jumps off and all of a sudden the other side gets a lot more volatile. We had a question from Robert of Boston, and his question was around, are you better off in a volatile market, in individual stocks or in indexes? Scott, what are your thoughts on that
Scott Schwartz 16:29
so? So look what individual stocks do in a portfolio. Create stock concentrations. If I’m buying fewer stocks, I’ve got bigger concentrations. What concentrations do is magnify volatility. So the word volatility, in and of itself, isn’t necessarily bad, because volatility can mean something shooting way up or way down. Sometimes at the same time, some stocks are up, some stocks are down. We’re not big proponents of large stock concentrations. We prefer to own larger baskets of stocks. But when things are cheap out there, you know, if certain indexes are cheap, if certain areas in the market are cheap, you might want to add a little extra, mid cap here, a little extra, you know, healthcare here, a little extra energy here. But at the end of the day, we prefer to own, you know, separately managed accounts that are spread out among a number of different stocks. You know, buy the indexes, buy ETFs, because if you bet wrong in a volatile market, you can really get hurt. You
Joe Duran 17:28
know, we talked about this last week a little bit that, in fact, being diversified for the first time in a while, so far this year has been your friend. You do better. You’ve done better with international stocks. You’ve done better with small caps, oh, excuse me, with mid caps. And in fact, the meta stocks, the mag seven haven’t kept up with the S, p5, 100 in general. So even meta I noticed was having a little bit of softness here, Peter after being up almost 20% just for this year. So quite a it was up
Peter Boockvar 17:57
to 20 years in a row. Interestingly enough, yeah, wow, prior to these last couple of years,
Joe Duran 18:02
that’s incredible. Hey, can we talk a little bit just in the volatility question, one of the questions that always comes up, should I buy gold? I remember Peter doing my CFA years ago. Unfortunately, it was many decades ago, learning that the correlation the way all asset classes behave triples after the S P falls 15% and I’ve noticed actually that when, when the market, when the S P falls 20 25% which is rare, but happens every few years, gold seems to go down just like everything else. So does everything other than bonds. How do you think about gold is it’s obviously hitting new highs. Goldman and several other researchers saying it’s going to keep on going up. How to how do you think about gold as an asset class, and especially in context of Bitcoin, which I know is viewed as an alternative to gold as a as another asset. So how do you think about that and diversity diversifying in a volatile market? Well,
Peter Boockvar 19:00
to your first point is, yeah, when you’re down 20% or more or all correlations go to one, right? When people need to sell something, they sell anything they can.
Joe Duran 19:10
By correlation, we mean the way asset class is based together.
Peter Boockvar 19:14
Yeah, at a certain point, right, right when, basically, when you get a tap on the shoulder with a margin call, for example, and you need just, you sell anything you can, and that’s when everything starts to trade together. With respect to gold, I’ve been, we’ve been as a firm, we’ve been pretty bullish over the last bunch of years. You know, when you look back, going back to when I started, at least 2018, and we went through a negative interest rate world, a zero interest rate world QE and we sort of transitioned out of that, but gold still did very well, because gold has become this very important central bank asset that after the US and the EU basically froze half of Russia’s central bank reserves after they invaded Ukraine. Foreigners. That owned a lot of US Treasuries and a lot of other US assets. Felt that, you know what? Gold can be a very important asset for me to own. Me being a central bank or a foreign government, where I can domicile myself, I can stick it in a vault, and no one can freeze it, no one can take it, and it’s my own thing. And you know that rally in gold, obviously, has continued. The interesting thing that we still see upside. You inflation adjust gold for where it was in 1980 and you’re talking about a price of about $3,500 so there’s still upside. Mostly the buying that has lifted it to this level in the face of higher interest rates, in the face of a strong dollar, has been, as I mentioned, foreigners, but I think that the Western investor is sort of that next pent up demand for gold, where they’ve been more hiding out in treasuries yielding four and a half percent, but also understanding that gold can be an important part of one’s portfolio as well, and
Joe Duran 20:51
bitcoin does it. Should people think of Bitcoin as an alternative to gold. Scott, I’m sure you get these calls all the time too. I do. Everyone says, Oh, well, I think Bitcoin is like gold. I always try to tell people, well, you can actually do something with gold. I don’t even know what you can do with Bitcoin. You can’t even go to El Salvador and use it anymore. So tell me, how do you think about that as an asset class relative to
Scott Schwartz 21:18
gold? As I’m looking at Peter and you’re talking about Bitcoin. It makes me smile. We talk about this often, right? The difference is, how many 1000s of years has gold been around? Peter, you know, you remind me all the time. So, yeah, gold’s been around and has been a standard for 5000 years. Look, I own a little Bitcoin myself. Some of my clients own it. I understand the idea that we’ve got a new technology here that might create some efficiencies. There is a scarcity. But right now, again, and I am no expert, but right now, Bitcoin appears to me to be purely a speculate, a speculation I own some because I think it will become more valuable down the road, because of the scarcity of it, and because of the demand, and because of the fact that it’s becoming institutionalized. Having said that, I just don’t think you can compare, you know, Bitcoin to gold. I think a lot of people like to say it’s the new digital gold. I think that’s I think that remains to be seen. And I’m neither, you know, extremely bullish or extremely negative on it, like I said, I own some I got clients who are interested in it, to have one or 2% of Bitcoin in your portfolio. I don’t think it’s a terrible thing we do live in a world that is evolving technologically. It has certainly gotten some institutional acceptance. It’s not like three years ago, I would have never put a client in Bitcoin. Obviously, I should have looking at where the numbers are, but I didn’t have the confidence in it. But yeah, I look at it as a play on technology that if it does become really widely adopted, and if it does become extremely institutionally adopted, yeah, you could see Bitcoin, you know, go up significantly from here, but I think goals are different. In our mind, in our portfolios, we think of gold differently.
Joe Duran 22:55
So thank you. Let’s, let’s shift to next week. We’re just talking about technology, there’s no bigger darling than Nvidia. So what are you expecting next week? Peter, how it’s almost like again, it’s priced in some softness here already that we’ve had a little bit of a pullback, so we’re not at all time highs again. And so how, what are you expecting? What do you think people should do in advance? Obviously, don’t do anything dramatic, but what do you think is going to happen next? Going to happen next week with
Peter Boockvar 23:24
Nvidia? This is going to be a really fascinating report, because it comes after the deep sea news where a Chinese company revealed to the world that they can create a similar AI model to meta, for example, or Microsoft at a fraction of the price, which would imply less demand for Nvidia chips. But on the other hand, we heard from all the hyperscalers, Microsoft and Amazon and Google and meta that they’re still spending extraordinary amounts of money where Nvidia would be a beneficiary of that. So how that earnings report sort of balances those two in terms of their not only the quarter that just ended, but their order rates for the quarter that we’re currently in that’s going to be really interesting. And if the mag seven trade, which is really sort of splintered meta, really became sort of the last man standing in this trade, can Nvidia sort of regain its stature in the mag seven, or is that going to potentially drop out, like some of the others. So it’s a really big deal that report. In addition to, as I said earlier, we’re going to hear from more retailers to sort of get a sense of
Joe Duran 24:30
Home Depot, right. So we’ve got Home Depot coming up. That’s a great pulse of weight consumers. I’ve noticed home builders have been quite soft lately. So do you think Home Depot continues the trend, or are they more like Walmart? Or do you see some some positive news
Peter Boockvar 24:47
there? Well, I think Home Depot’s challenge right now is the pace of existing home sales being at the lowest level since 1995 less transactions that take place between a buyer and. Seller. Well, you don’t get that turnover. There’s less paint being bought. There’s less need to redo the bathroom or put in some new flooring. Don’t
Joe Duran 25:07
tell that to my wife. I’m the worst handy man in the world. She keeps telling me, we’ve got to do some work about so I’m like, yeah, yeah, let’s wait.
Peter Boockvar 25:14
Well, that’s the flip side. Yeah, you’ve been sitting in your house for a while. You start doing renovations. But a lot of people did renovations during COVID, so there’s less need to do them again. So that’s the challenge with Home Depot’s business and their their revenues have been sort of flattish over the past couple of quarters. And
Joe Duran 25:29
so we’ve got personal income next week. I think we’ve also got spending report, little bit of a gage of inflation. Do you expect any big surprises?
Peter Boockvar 25:37
You know, there shouldn’t be. I think we’re the week after is it will be more heavy in terms of the data that potentially can move markets. But you know that inflation number is one that the Fed watches the PCE, it usually doesn’t deviate too much from expectations, but it’s still going to be a big focus in the markets next week.
Joe Duran 25:54
Well, listen Scott Peter, thank you very much. At rise up, we’re always trying to inform and educate you, how to think about the markets, how to make smart choices. If you do have any questions, if you’d like to have a portfolio review, you can go to the website wealthion. Let me get this right. Wealthion.com forward, slash, free. I think there’s a link below, and Scott or Peter, one of the team would do research for you. We will, of course, we care a lot about having your input and your ideas, your feedback, your questions. This week’s set of questions came because we had several interesting ideas about how to manage volatility. So any ideas you have to make the show better, other than having Terry here, who we know, makes it a lot better. But gents, thank you very much for being here and enjoy the rest of what should be for many of you, the ski ski week, if you Have kids and we’ll see you again next week.
