Monetary Matters with Jack Farley S&P To 7000? | Warren Pies On Why Stocks Aren’t Overvalued
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Nov 20, 2024 
Warren Pies, a financial expert from 3Fourteen Research, dives deep into market dynamics and the potential for S&P 500 growth. He discusses the impact of Federal Reserve policies on small-cap and mid-cap stocks, revealing a split recovery favoring larger corporations. Pies shares insights on effective investment strategies, emphasizing quality stock selection and the importance of return on invested capital. He also explores the current commodities landscape, weighing the complexities of oil versus a bullish outlook on gold and Bitcoin.
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Lagging Small-Caps and Mid-Caps
- Small-caps and mid-caps have had the weakest bull market performance on record.
- This makes them tempting, but they might not outperform in a continued bull market.
Focus on Quality in a Mature Market
- Despite the S&P 500's high valuation, Warren Pies doesn't recommend rotating into riskier assets.
- He suggests focusing on high-quality companies given the mature state of the current market expansion.
Impact of High Yields
- Small-cap and mid-cap underperformance is linked to high bond yields.
- Economic weakness in areas like home and auto sales is largely attributable to high interest rates.