Tom Lee just predicted another CRASH...

Tom Lee went on CNBC and basically said that look markets they're going to rally in the near term but we're about to run into some problems and he's still calling for a correction. Now betting against Tom Lee has has not been smart in the past but I sort of agree I sort of disagree. I'm going to share with you this five minutee long clip and what Tomley says and the argument that he makes and I'm going to share with you what I think is going to happen here over the next couple of months. What I also think you should be doing in your portfolio right now. Like is it time to take a profit? Is it time to hedge? What do you do right now? I know that's that's something that I've even personally been struggling with since the portfolio that we started in the trading community really at the start of this year is up almost 94% year to date. This is not hardware. This is like software cyclicals industrials. You know, I have a very specific strategy what we're doing over there. If you guys want to join us, that link is down below in the description of today's episode. Long story short, we're just going out to find opportunities before Wall Street. And it's a it's a it's a very lucrative thing and way that we do it. Um, obviously not a recommendation, not financial advice. You could lose money, blah blah blah blah blah. Like, don't be a jackass here. Read the disclaimers, okay? But even I'm like, dude, up 94% year to date, up 115,000. Is that sustainable? Right? Should I be taking a profit right now? So, I'll share with you what I'm doing in my portfolio. Don't worry at all. We got a lot to get into. Hit that like button. Subscribe to the channel if you guys have not done so already. It's free.99. Cost you absolutely nothing to do so. And let's begin. So, I want to start with the clip here from Tom Lee. It's about 5 minutes long. And then I want to share my perspective. What I think is going to happen for the markets and what to do right now, what I'm doing right now. So, take a listen. Head for stocks with targets and optimism both climbing. Let's welcome in our panel. Funst strats Tom Lee, Robin Hood Stephanie Gild, and Pain Capitals Courtney Garcia. Tom and Courtney are CNBC contributors. Welcome everybody. It's good to have you, Tom. This was just what the doctor ordered, right? >> It it is. We got a a nice CPI report and in the backdrop of good earnings, stocks going up on good news. I think the rally is quite healthy and it's tracking to our view that we could get to 7900 8,000 by the end of the month. >> Well, that's that's what your call was, you know, the other day. Edard Denny says we're now tracking. so well that we can get to 8,400 by the end of the year because of the earnings story that we keep talking about. Does that make you know sense to you? >> Yeah, I I think that is sort of the underpinning of this because 2027 earnings probably 410 right now. It was around 395 at the start of earning season and it's probably going to be by the end of this month close to 425. And so if you put a 20 multiple on that you're already close to 9,000. >> So we keep saying that you've been bullish. You have, you've been right, but you keep calling for this maybe 10% pullback in stocks at some point. Now, we haven't gotten it yet. And you lay out today in a note that says, quote, positive drivers for stocks in the tur in the near term remain good AI fundamental demand, right? Strengthening US economy, positive revisions to earnings, and the fact that inflation remains tamer than most expect. Those don't sound like catalysts for a 10% pullback. So, what is? Well, I I think pullbacks occur when we're least expecting it, you know, and usually when investors are bullish. So, I think the end of August getting to 8,000 is going to set us up for a period where stocks could disappoint even though underlying fundamentals are good. Part of it is the margin debts gotten so big. [snorts] Part of it is we still haven't resolved how the market views Kevin Worsh and his new framework whether the bond market's going to have a tantrum. And the third is we have midterms coming up and I think that's a source of uncertainty. And finally, I do think SpaceX, which had an initial unlock, there's still a lot of stock to be unlocked. So I think all of that represents potential traps ahead. >> Okay, Steph, that what do you think about that? >> Uh I mean I agree that you know typically like when you have a period where a hedge fund for example blows up, it's a sign that there can be just easy credit conditions and leverage builds up. I think that kind of cleared, but I don't I think we're going to have another one. I just think in this environment where AI is driving things, you end up having like almost speed crashes. I've I've heard Jordi Visser from 22V say and I agree with that because I think you have parabolic moves and then kind of consolidations. I also think interest rates are certainly a risk that could keep flaring up. Um but I I also agree that there's strong fundamentals. So I think that's going to be a fight within the market. >> The resiliency of the market has been amazing in the face of what you've described. you know, a hedge fund blowing up, yields backing up, but aren't we a little cleaner now in in a number of ways, right? You get a little bit of heat off of the inflation picture >> and [snorts] the positioning is cleaner and we've delevered a little bit. Tom's right. There's still a fair amount of, you know, leverage in the system, margin debt and whatever, but feels like we've cleaned some stuff up. But I think with the a rally continues and then you start rebuilding that and that's why I say like you could end up having another kind of pullback because the margin debt rebuilds. >> Court, are people too bullish? >> I don't think so. And I I think ultimately the the markets are being driven by earnings right now and the earnings are justifying what the markets are doing. People were getting concerned about capex spending. But I think the more that you see these earnings come out, it really is justifying that. And I think when you look at the markets as a whole, if you look at the last three months, the things that are leading are healthcare financials industrials those are all actually outperforming the S&P 500, which means you're seeing this really broad-based rally. So, it's no longer just seven names that are holding up the markets. And the fact that even in days where AI is driving the story, you're seeing everything participate. I really like that as a good story. And if earnings keep holding up and the consumer keeps holding up, I think the markets will continue to drive higher. Glad you went there cuz if you look at the let's call it the balance over the last 30 days. So 1 month performance financials almost 4%. Technology 3 and a4%. Industrials 2 1/2 healthcare 4 and 2/3 materials better than 3%. This is just what people were hoping for isn't it? >> Yeah it's broad-based. Uh I I think this is a sign and and of course as you know global markets are doing well well and there's still several trillion dollars of cash on the sidelines and I think that there's still a pretty level of healthy skepticism because I think a lot of clients of ours institutional think either the AI trade is extended or that we're in late cycle on earnings >> like an earnings bubble that's about to to burst at some point. >> Correct. And then of course they think the Fed has to react to that by tightening. So I think that there's people who are sort of keeping an eye on the end of the bull market and I think that's what's keeping it healthy. >> I think I actually I corroborate with that because if you look at like valuations have actually come down by two turns but earnings growth have more than doubled since the end of March. And so I do think there's a healthy you can that to me is the numbers behind the skepticism and I welcome skepticism because I actually think it means that the bull market can go on for a bit longer. And so that's kind of like 1998 after LTCM and like the market went up for another 18 months and 35%. >> So I do think Tom Lee is very sound in the arguments that that he's making for the most part. If you get a little bit more granular in this, yes, the new Fed is a problem. And I think the markets are taking the lack of communication as more of a negative than it actually is because every time we're getting economic data, like the labor market's been weakening for months. Retail sales today came in really low. Inflation's been coming in low. Like that to me is a recipe for the Fed to be on pause, right? And even potentially cutting rates next year. markets are still expecting like a rate hike between now and March of 2027. So, I think there's a lot of room for the markets to continually be proven wrong, right? From the Fed perspective, and I don't think the markets have to panic just because we have a new Fed chair. I think if that was going to happen, it's already going to happen. If the markets panic over the Fed, it's because we got a hot CPI report, we got a really hot jobs report, like something like that happened. And that is a risk in this market right now. And that's going to be with us just I mean until we get more certainty on the trend of things. So that's not going away and that's not a new thing. Number two, and I really wish Tom Lee would would have talked about this because I think he would agree with this. you know, the war with Iran, that is such a a a focus point for the Fed, for the markets, for the inflation fight, all of these things. And we are so close to the midterms right now. In in my opinion, I think we are much more likely to get good news than bad news. I don't see escalating the Iranian conflict right before the midterms. I don't think causing gas prices to go up before the midterms is good for your political career or what you you want to accomplish over the next two years if you're Trump, right? I think right now it's about damage mitigation and you know getting gas prices down. I think that's why the bombs are not flying at this current moment. So I think if we put this on a probability spectrum, the highest probability is deescalation or some kind of good news over the next month or two. And that could actually feed into again positive developments from the Fed, positive inflation expectations, oil coming down, consumers stronger, and really help fuel the markets to do well. Another point that I will make is something that not a lot of people are talking about, but the NASDAQ fell 11 12% in about a month and a half time span. You know, again, that they kind of talked about that the de the there was a bit of a deleveraging event. Come on, Sparty. Get away. This cat is scary, dude. He'll come right in my face and smack me. So, yeah, that's that's what the water bottle's for. But um nonetheless, yes, you've seen this delever. The markets are in a better position right now versus where they were two months ago. And I was warning about this on the channel. I was saying, look, stay away from hardware. Do not buy SanDisk at $2,300 a share. Like, what's going on? Right? I I I felt like I remember saying at the time, I felt like I was in like the Twilight Zone. Like everyone was so bullish and I'm like what are you guys doing? You know SanDisk since I was making those warnings, you know, at 2300 22 $2,300 a share is down 31% from here. At one point it was down 57.5%. You know, I don't know exactly what's going to happen next with a hardware trade. I don't think you're heading into like a crazy FOMO environment. I I I I I just don't buy that. I don't think you have leverage collapse and FOMO happen and then that kind of goes away and then it comes back. I've never seen that before. Like I've never seen um any sector of the markets receive FOMO twice. Like EVs, right? FOMO 2021, that's never happened again. Cannabis, that was FOMO in 2017. That never came back. solar, you know, there was a bit of FOMO around that as well in 2021. That never came back, even though these fundamentals of the the companies in question have actually just gotten better. So, FOMO and fundamentals don't actually go together. So, we've seen an 11 12% pullback in the NASDAQ, a deleveraging event. I don't think you have to see some kind of grandiose correction like Tom Lee is calling for, right? Um there's going to be volatility, that's for sure. But I don't think you have to see a like correction like we think because you've kind of already seen that. And unless we get bad news from economic data that suggests the Fed could hike rates or unless we get, you know, bad news from the Iran war, which to me seems unlikely. I don't see a catalyst to get a broader market pullback unless we get some kind of blowoff top broad market rally. And we have seen a bit of a rally recently, but I don't think we're that overextended. Like look at software earnings, right? whether it was data dog or you know Adobe or a ton of companies came out and reported great earnings Apple loven and still went down like 20% Figma you know baby misses or most of them actually beat and just got crushed right there is a lot of fear and skepticism in certain areas of this market but again keep in mind it is premidterm election period so there's going to be a lot of event hedging. There's a lot of event risk right now around the midterms, right? And the seasonality around that. So, what is Wall Street doing? They say, "Oh, look, there's uh the seasonal volatile period before the midterms. We have the midterm event risk. We have anything that could happen between now and then that could amplify this. Let's hedge our portfolios." Right? So, there's going to be more volatility in general, but I don't think you have to have some kind of like correction in the way that you would think a correction is like 10 15% downside. But again, this is kind of what I struggle with at this moment when like our portfolios are up 94% year to date in the trading community. If you guys want to join that, that link is down below in the description of today's episode. Again, do not be a jackass, please. Um, come to your own conclusions. Of course, you have to understand the companies you're investing in, but it's like, what do you do right now, you know? And when I'm looking out, I'm seeing so many people that are still bearish on the stocks that we bought. It's like, do you take a profit right now? What do you do? Um, I'm not doing anything personally right now in this portfolio. Like, I'm not doing any major hedging or anything like that. But if you are in a similar position and you have big gains, I think selling calls probably makes the most sense. You still give yourself some upside if stocks come down. If your positions come down, you can still make money as they come down, right? So selling calls, I think, is pretty attractive right now, especially if some of the stocks you own have have done well. But also remember, it is earning season and there are irrational reactions right now in the marketplace. And one example is Apploving. You know, the stock grew revenue 53%. Management's projecting 30% compound revenue growth for the next 10 years. The stocks trading around the S&P's multiple of about 20 times forward um earnings. The stock got crushed. You know, it was a $600 stock in June. It's $320 today. There's going to be irrational emotional reactions in the markets right now. And I think you kind of want to be a sniper, right? When you see these opportunities, you want to take advantage of them, you know, because that's how you beat the markets. That's how you, you know, win and make a lot of money as an investor. I don't think you want to be going out buying the NASDAQ or the S&P right now at all-time highs. But if maybe Target falls 20% because of a weird metric they missed on, it's like, really? Does that make sense? Should they have fallen 20%? You know, and I'm just making up here. It could be whatever stock that you're interested in. You want to be a sniper in this environment, picking up opportunities when you get them, not necessarily rushing out into everything. Does that make sense? Now, we're going to talk about this more, break it down in detail and depth over this weekend. So, if you guys kind of uh resonate with some of the things that we're saying or want to hear more, hit that subscribe button so you guys do not miss uh future videos. Again, if you guys want to come trade and invest alongside of us, that link is down below in the description of today's episode. That's it. Hit the like button on your way out. Have a great rest of your day and I will see you in the next