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Volatility is Back! | Market Recap | ft. Peter Boockvar & Scott Schwartz | Rise UP!
Feb 22, 2025
Peter Boockvar, Chief Investment Officer at Bleakley Financial Group, joins alongside Scott Schwartz, Co-Founder of the same firm. They dissect the hidden dangers of overpriced stocks like Walmart and Costco, highlighting risks of market volatility. The conversation shifts to potential government policies impacting markets, including budget cuts and tariffs. They also debate the roles of gold versus Bitcoin as safe havens amid uncertainty. Lastly, the discussion touches on Nvidia's earnings amid rising AI spending and its implications for market dynamics.
30:36
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Quick takeaways
- High-multiple stocks like Walmart and Costco are highly sensitive to earnings expectations, leading to significant sell-offs during market volatility.
- Investor strategies must adapt based on individual circumstances, with retirees prioritizing liquidity while younger investors seize opportunities during downturns.
Deep dives
The Importance of Earnings Guidance in Volatile Markets
Stocks with high earnings multiples, such as Walmart and Costco, exhibit very low tolerance for error regarding earnings expectations. When Walmart guided its revenue growth at 3-4%, aligning with market estimates, the lack of margin for error led to a drop in its stock price, showcasing how closely connected stock performance is to earnings forecasts. Similarly, other stocks trading at elevated multiples, like Palantir, faced pressure as investors reassessed their positions amidst market uncertainties. This situation highlights the broader market trend where investors are becoming cautious and taking profits on high-multiple stocks, leading to significant sell-offs during volatility.
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