The speaker believes that a PE ratio of 100 for a mega cap stock is questionable and could signal disconnect from fundamental reality. They also emphasize the importance of sentiment in the market, stating that when everyone is bullish, it may indicate that the best-case scenarios are already priced in. The speaker notes that many clients are skeptics rather than bullishly optimistic. Additionally, the speaker mentions that the reaction to the first Fed rate cut will be telling, as some anticipate a market fall while the speaker believes that the market could rally in response.
The stock market has had a torrid run in 2024 despite the fact that interest rate cuts haven't materialized in the way people had expected at the start of the year. In fact, outside of a few blips here and there (like spring 2020), US stocks have been phenomenal performers for years. Tom Lee, the founder of Fundstrat and FS Insight has been bullish for a long time, having caught the correct side of this lengthy trend. On this episode, we speak to the former JPMorgan strategist about how he thinks about the market, what he sees happening right now in macro and demographic trends, and why he thinks it’s plausible that the market could roughly triple in the next six years.
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