Thoughtful Money with Adam Taggart

"There's A Lot Of Room For Stocks To Fall" As Profit Margins Are Unsustainable | Eric Cinnamond

44 snips
Jun 17, 2025
Eric Cinnamond, founder and co-CEO of Palm Valley Capital Management, shares insights on the disparity between growth and value stocks, advocating for a patient investment strategy focused on small caps. He discusses the unsustainable profit margins and the risk of a market correction, pondering the ethics of corporate buybacks. Cinnamond highlights the implications of wealth inequality and explores future market outlooks, emphasizing the importance of financial wisdom in navigating uncertain times. Tune in for a fascinating financial deep dive!
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INSIGHT

Stocks Overvalued Due to Fiscal Spending

  • Current market earnings are inflated by unsustainable fiscal spending exceeding $6 trillion.
  • This unsustainability implies a significant risk of stock price declines to realistic valuations.
INSIGHT

Value Investing and Cash Strategy

  • Value investing, especially in small caps, remains viable despite underperformance.
  • Absolute return focus means holding cash when valuations are high to protect capital.
INSIGHT

Normalize Earnings for Valuations

  • Normalizing earnings to long-term margins shows current stock valuations are unrealistic.
  • Current margin peaks should not be used for valuing companies today.
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