Transcripts For CNBC Fast 20240704 : vimarsana.com

Market cap coming off the best day since may of 2023. Ordinarily youd have folks say, you know what, i it kills me but im going to wait for a dip and buy this thing i dont care that its up this much, im buying anyway. You bought nvidia. I did as i mentioned an annoyance not owning it. Everybody owning it fomo. Fomo when the earnings hit i tried to buy it, the stock trade down 28 which sounds like a lot. As i quickly went through the release in expectation of the Conference Call and everything is going data centers because were very involved in data centers, you know what, im going to take dives. Its not a big position. Its a third the size of meta, which i continue to hold and havent sold any but they do have momentum in ai and the race for ai truly is going to be all were going to be doing forget about talking about it for the next number of years you feel they are undoubtedly secretariat at this point. I do for now. You have a lot of horses that can still place and show and get in the money but they look to be the secretariat. I think the momentum is here now. Intel wants to come into it. Intel will be producing for the hyper scalers, for aws, for meta i do have those concerns those concerns are out six months or so in the next six months, sure, there will be dips on it i dont want to take a full position at this level i hear you. There are so many incredible stats about nvidia the market cap gain was larger than those of 94 of the s p 500. That was the gain just yesterday. Here is from Tony Pasquariello i always cite his stuff. The notes that are being passed around by one of the best, the incredible part, when the market bottomed in october of 2022. Nvidia had a market cap of 280 billion and a 12month forward p e up 32 times. Yesterday it added 276 billion in one day alone, rounding up to 2 trillion and the p e is 33 times. He uses the word incredible and he is darned right the rally since october of 2022 low, if youre going to put one thing on your screen, its nvidia its the smh you think about performance from january from january to today, think of performance. It encompasses the moves think of what the performances have been. You have nvidia up 159 . You have the smh up 31 . What i call the meta recovery up 43 . And then you have underperformance from the rest of the mag 7, apple, alphabet unchanged. Amazon only up 2 . Tesla down 51 so really, to me this is about the mag 2 on that price recovery plus the smh story which is attributable to this thesis. Jenny, bespoke sends along, the last time the nasdaq 100 made a new alltime high on a day it gained 3 plus was march of 2000. Gulp the run in some of these stocks has been so incredible, its inevitably going to get people thinking, is this 99 . Dan ives says, its 95. Its not 1999. It is 1995 i think it is for a small group. For the Broader Group it might be 1999. The nasdaq making a new high, nasdaq is flat cherry pick your time period if i look at it, its up a percent or two in three years. How amazing it is and taking up our energy and focus right now okay nvidia is the king i also like to ground myself and look back. Tesla was trading at 10 a share. Lets think about microsoft. It was about 2 a share. It was 50 a share so those are similar runups to what tesla has had those are similar to what nvidia has had and they plateau ive been wrong on nvidia. I think if we take a market history perspective on it, these leadership moves arent sustained at the level of Price Performance the business has been at. It doesnt have to maintain the level of Price Performance the chances that it will are slim to none it will not maintain Revenue Growth year over year. That means it can be a big winner for a long time adam parker makes the point yesterday, were not near the top of this first initial phase of this revolution on ai were still at the beginning do you agree with that certainly this week nvidia is the zeitgeist of the moment. I remember both of those trading years like it was yesterday, we were looking at companies that had this thing, the infinity sign we couldnt create p e ratio, there was no e, no earnings. Were not trading them in anticipation of earnings growth. Theyre supporting it with earnings growth, and the stock price is trailing that way nothing lasts forever. I cant own nvidia because its not within my style box but, boy, i Pay Attention to it and Pay Attention for a lot of republics. Were looking at earnings for the s p 500. If we want to get to 245 this year, the big seven or magnificent seven of last year have to do heavy lifting the great thing about nvidias earnings, look, in 2024 we have you covered for at least 20 the ai halo is beyond nvidia. I will come back to you in a second since november 1st, arm, amd, snowflake its relevant ever day. Pal ianti palantir, 55 you do have broadcom, but you trimmed it that speaks broadly to how we should view the stocks here. I love the date november 1st. Right after the october meeting when the fed basically said no mas, when were done with rate hikes. Thats when things got normal again. I realize there are a few ai names still carrying but there was breadth to the market. As we go through our picks from november 1st, well see its lots and lots of other companies outside of ai that have moved. What hurts is taking profits or, dare i say, god forbid, selling a name and up get a blowout report and it gets so far away from you, theyreport earnings and its off to the races. I love that i took profits and had a lot of gains in the stock. When you see it go four stations down the road, man, why did i do that if youve been running money for a long time, hopefully youve had a lot of those, you always need somebody to sell to but it goes to Portfolio Management is that you have to be conscious of the risk that youre taking and you have styles and you have to abide by your styles. If you stray from your style, your investors leave you when we allocated to hedge funds, thats what we did. What do you mean youre a growth player what do you mean you own still water mining im out. No, dont tell me. The danger is i dont have those kind of style restrictions my restrictions is absolute performance make money i can let meta run and im looking at meta. Is at the same time i dont want to sell them because as i look out a year, two years, ill be dreading that i did. We get through another gauntlet palo alto made us reassess the gains in some of these stocks, joe, and what might happen next. Oh, man, if nvidia lays an egg, then who knows what will happen to the overall rally that didnt happen so you make it through the gauntlet of nvidia to where tony at goldman, again, sort of assesses where we are and what the best strategies are going forward. So he says the big dynamics in the game remain inherently friendly for risk. The profile of tacticalries it can reward has changed the Trading Community is quite long the momentum factor is stretched and valuation is tricky. If the market is due for some period of consolidation, in turn i have no problem with simplifying your portfolio hes speaking directly to the beg a caps, using options to manage details, but, look, if this sounds too clever, youre probably right and what japan has done in setting new records, i get it, lighten up a bit at the same time, two great horses its the secretariats, triple crown winners. As always a very thoughtful note from tony, and i share his perspective. In fact, i thought and i was obviously wrong in that assessment, i believe february would be a month you see corrective price action in the market i think for the viewers for a minute and a half. That doesnt confirm nvidia slammed the door on that thats what the viewers have to under i feel good about i dont want to call it a broadening out. Were not seeing small caps really work but there are other names working right now in particular in the large cap space so its really some participation beyond just the semis, but, scott, i cant think if nvidia were to correct, if the smh were to correct, the market itself would be immune from experiencing a universal correction i think its all about the semis. You made the argument to me yesterday i found confuseings on closing bell you wouldnt advise our viewers to be market weight the mega cap stocks those are, what, 25 of the s p thats correct. And you would advise them to be underweight that seems counter to every argument youve made about where the market is and where you think its going if you can enlighten us because you left me perplexed with that description, to be quite frank what i said to you yesterday was you could have an equal weighted strategy and outperform and theres evidence to that you can see year to date without talking your own book for a minute its fair that youre doing well in your strategy with all due respect, i want you again, you have made the case the mega caps are going to outperform you did not see the broadening in the market necessarily happening. Correct then youre advising our viewers, dont even be market weight the mega caps because theres concentration risk within the concentration itself i gave statistics to start the show since january of 2022, where is the performance come from . Its come from meta recovering from 88 in november of 2022 to 485 today, and its come from nvidia and the semis it has not it has not come from apple it has not come from alphabet. It has not come from amazon. It has not come from tesla so when someone says you must own the mega caps at market cap weight, where we are today or more or more understand one thing, the mega caps in totality havent done the heavy lifting for you. Use the chiefs analogy the chiefs win the super bowl, Patrick Mahomes was the reason the chiefs won the super bowl in overtime nvidia is the Patrick Mahomes. If you take Patrick Mahomes off the field, the chiefs arent winning the super bowl i dont agree with that let me finish nvidia is the entire story of where the performance has been, and thats why i say you have concentration risk within the concentration itself its been the story of the dramatic outperformance. It is not the whole story of the performance. You look at the s ps outperformance last year, were still only in february if you look at the s ps outperformance last year, it was because of all of the mega caps. Youre picking a period of time what about 2022 . All the mega caps were down did we have a bad 2022 were saying 2023 works for your narrative lets pull the lens back what do you mean . Im speaking the narrative the market is giving me. It had an awful year the mega caps had a great 2023 what did the s p do . It had a great year since november 1st, microsoft is only up 21 . Is that so terrible . Its underperformed nvidia so what. What has apple done since the s p is up 20 whats apple done . 5 whats alphabet done you can pick apple out of a hat. You cant cherry pick it. Since november 1st you have four of the mega caps that are underperforming the s p 500 and i just dont want to look at it from november 1st. I want to look at it from january 1 of 2022, encompass the entirety of the Federal Reserve rate hiking cycle. If you do that the s p is up 6 and four of the names have underperformed the s p really, all you have is extreme outperformance from nvidia and extreme outperformance from meta catching up because it fell to 88 in november of 2022. Which gets us back to my initial point. Choose your time period. Last week, oh, look at the chart for ten years on something this isnt a cherry picked time period. You can pick whatever time frame you want to fit your narrative. I think the right way is to step back and look at three years look at five years, because thats you cant look at that. You can you cant do that with ai stocks cannot ill tell you why you can thats what a real investor time frame is when an institution hires thats the only way you can justify not being in the names and missing it, if you go back five years i disagree. When youre hired, most clients give you three years over that threeyear period, theyre measuring you to your benchmark. Over that threeyear period, nasdaq is kind of flat, the s p is up a little bit, small cap russell 2000 is down you take a step back and theyre all kind of in line. What i think is more interesting when you take that step back is how different the faang, the top ten, actually is versus when we were talking about it a few years ago. Amazon is flat over three years. Tesla is down over three years so theres a lot thats changed. You have a couple that have led, but the managers who have done really well and i was last week reviewing a large cap growth manager, they were up over 40 last year they werent market weight to all the mega caps. Arguably for an immeasurable amount of time going forward, the day of the microsoft announcement with openai that was a move the goal post moment for the kinds of stocks that you had to be in. Some didnt see it then. The stock still continued to perform to this day. Some more than others. It was a gamechanging moment, period, end of story it was a Game Changing moment from then until now. If you take today as your starting point, its an interesting question to ask, who benefit the next three years, the next ten years it wasnt the companies that created refrigeration that benefited the most it was the cokes, the pepsis, the general mills. It was the food companies. I think thats where we are maybe now going forward. And nvidia has had an incredible runup. When we think about other stocks that are in our portfolio like marriott, for example, when you think about the benefits of ai to a company like marriott, theyre going to be enormously benefited by it. The efficiency that will come. Starting today, broaden your lens on who benefits from ai we can have these fill sof ksof philosophical discussions. How fun that was when the bell rang and we took off. The point is that there are lots of stocks. We focus we tend to focus on the big name brands, but there are lots of under the surface, to your point, to your point, that perform as well overriding consideration i have, though, is ai is generational like the steam engine, like 5g, like so many other periods weve seen if you listen to jensen huang, he makes you believe its the dawn of an Industrial Revolution i think its the fifth Industrial Revolution unless you count 5g, but, keep this in mind, right now we dont even have a lot of the use cases to find for ai. If you talk to average companies theyll say, i dont know. I think i should be looking at it but i dont know what ill do with it. That will take it to a whole other level. The winners today will still be the winners because of microsoft and aws Cloud Business you have to put more there im happy to stay with those and look for others like vertiv. That will be a winner, right, because of data centers. Hang on im going to take a break. Im going to bounce. We all need to cool down. I have a lot of moves to get to Kevin Simpson is making some weiss has some trimming big winners, well do it next. Announcer aryoe u following the Halftime Report podcast . What are you waiting for look for us in your favorite podcasting app follow the halftime podcast now. Our clients are likely to recommend us. Ameriprise financial. Advice worth talking about. Theyre waiting for you. Hey, do you have a second . Theyre all expecting more. More efficiency. More benefits. More growth. When you realize you can give your people everything, and more. Thank you very much. [applause] ask, now what . Heres what. You go with prudential to protect, empower and grow. With everything you need to deliver, you guessed it. More. One more thing. Whos your rock . Learn more at prudential. Com whoa, how did you defeat them . Whos your rock . With a little kung fu strength and by connecting my devices to the most powerful force of all. Skadoosh. Hah, huh . Cool right . Amazing. Harness the power of xfinity internet and stay connected to the things you love. Ah, theyll be like this for hours. Hello dad, hello dad, hello da. Uhoh. Good bunnies. Ahh all right. Lets do some more of these moves here because its interesting. Kevin, you trimmed deere, sold to weiss, who bought deere again. Tell me why you trimmed it before weiss tells me why he bought it again. I think its down 10 from where i sold it, hes coming in and buying it. We took a little off the table i thought the earnings were less impressive caterpillar knocked it out of the park deere came in a little bit short. We still have a 2 position. Its the first time weve had deere and cat at the same time cat is crushing it, up 11 good to buy low. Im still an owner for us, disappointing. Weiss, whats the fascination . When youve been doing this for a while, and im sure they would agree, there are certain stocks you have a good feel for. Its a trading stock that got cheaper. The earnings came down its no less expensive the trade, i played that and now it moved on the down end and because of that, by the way, a phenomenal cat youve had this, people say ive had enough its not getting it. Farmers rights are up. Ill be there for a little bit i still think it can move up and then ill sell it. Josh mentioned yesterday Warren Buffett and amazon. To me deere is a Warren Buffett stock. If you continue to see deere cheapen up like that, to me, thats the stock you see berkshire come in and buy. Kevin, you traded half the position, was called away. Were excited jamie dimon will be on this program monday, of jpmorgan well get that promo out loud and proud and cant wait for that tell me about the stock here we had covered calls, i did not want jpmorgan to get called, i did want cisco to get called we had both positions called away i think its the best of the breed, a stock that i feel has benefited in the regional space. They have very little debt, if any, and if youre going to be in financials, i think you want to own best in breed discussing possible legal and policy options to pond to an Alabama Court decision that ruled frozen embryos were considered children under state law putting ivf access at Risk Administration officials tell nbc news the Justice Department and the department of health and Human Services are still early and no decisions have been made but did warn about the use of executive action to protect ivf access federal regulators granted native american tribes more power to block hydro Conference Call<\/a> and everything is going data centers because were very involved in data centers, you know what, im going to take dives. Its not a big position. Its a third the size of meta, which i continue to hold and havent sold any but they do have momentum in ai and the race for ai truly is going to be all were going to be doing forget about talking about it for the next number of years you feel they are undoubtedly secretariat at this point. I do for now. You have a lot of horses that can still place and show and get in the money but they look to be the secretariat. I think the momentum is here now. Intel wants to come into it. Intel will be producing for the hyper scalers, for aws, for meta i do have those concerns those concerns are out six months or so in the next six months, sure, there will be dips on it i dont want to take a full position at this level i hear you. There are so many incredible stats about nvidia the market cap gain was larger than those of 94 of the s p 500. That was the gain just yesterday. Here is from Tony Pasquariello<\/a> i always cite his stuff. The notes that are being passed around by one of the best, the incredible part, when the market bottomed in october of 2022. Nvidia had a market cap of 280 billion and a 12month forward p e up 32 times. Yesterday it added 276 billion in one day alone, rounding up to 2 trillion and the p e is 33 times. He uses the word incredible and he is darned right the rally since october of 2022 low, if youre going to put one thing on your screen, its nvidia its the smh you think about performance from january from january to today, think of performance. It encompasses the moves think of what the performances have been. You have nvidia up 159 . You have the smh up 31 . What i call the meta recovery up 43 . And then you have underperformance from the rest of the mag 7, apple, alphabet unchanged. Amazon only up 2 . Tesla down 51 so really, to me this is about the mag 2 on that price recovery plus the smh story which is attributable to this thesis. Jenny, bespoke sends along, the last time the nasdaq 100 made a new alltime high on a day it gained 3 plus was march of 2000. Gulp the run in some of these stocks has been so incredible, its inevitably going to get people thinking, is this 99 . Dan ives says, its 95. Its not 1999. It is 1995 i think it is for a small group. For the Broader Group<\/a> it might be 1999. The nasdaq making a new high, nasdaq is flat cherry pick your time period if i look at it, its up a percent or two in three years. How amazing it is and taking up our energy and focus right now okay nvidia is the king i also like to ground myself and look back. Tesla was trading at 10 a share. Lets think about microsoft. It was about 2 a share. It was 50 a share so those are similar runups to what tesla has had those are similar to what nvidia has had and they plateau ive been wrong on nvidia. I think if we take a market history perspective on it, these leadership moves arent sustained at the level of Price Performance<\/a> the business has been at. It doesnt have to maintain the level of Price Performance<\/a> the chances that it will are slim to none it will not maintain Revenue Growth<\/a> year over year. That means it can be a big winner for a long time adam parker makes the point yesterday, were not near the top of this first initial phase of this revolution on ai were still at the beginning do you agree with that certainly this week nvidia is the zeitgeist of the moment. I remember both of those trading years like it was yesterday, we were looking at companies that had this thing, the infinity sign we couldnt create p e ratio, there was no e, no earnings. Were not trading them in anticipation of earnings growth. Theyre supporting it with earnings growth, and the stock price is trailing that way nothing lasts forever. I cant own nvidia because its not within my style box but, boy, i Pay Attention<\/a> to it and Pay Attention<\/a> for a lot of republics. Were looking at earnings for the s p 500. If we want to get to 245 this year, the big seven or magnificent seven of last year have to do heavy lifting the great thing about nvidias earnings, look, in 2024 we have you covered for at least 20 the ai halo is beyond nvidia. I will come back to you in a second since november 1st, arm, amd, snowflake its relevant ever day. Pal ianti palantir, 55 you do have broadcom, but you trimmed it that speaks broadly to how we should view the stocks here. I love the date november 1st. Right after the october meeting when the fed basically said no mas, when were done with rate hikes. Thats when things got normal again. I realize there are a few ai names still carrying but there was breadth to the market. As we go through our picks from november 1st, well see its lots and lots of other companies outside of ai that have moved. What hurts is taking profits or, dare i say, god forbid, selling a name and up get a blowout report and it gets so far away from you, theyreport earnings and its off to the races. I love that i took profits and had a lot of gains in the stock. When you see it go four stations down the road, man, why did i do that if youve been running money for a long time, hopefully youve had a lot of those, you always need somebody to sell to but it goes to Portfolio Management<\/a> is that you have to be conscious of the risk that youre taking and you have styles and you have to abide by your styles. If you stray from your style, your investors leave you when we allocated to hedge funds, thats what we did. What do you mean youre a growth player what do you mean you own still water mining im out. No, dont tell me. The danger is i dont have those kind of style restrictions my restrictions is absolute performance make money i can let meta run and im looking at meta. Is at the same time i dont want to sell them because as i look out a year, two years, ill be dreading that i did. We get through another gauntlet palo alto made us reassess the gains in some of these stocks, joe, and what might happen next. Oh, man, if nvidia lays an egg, then who knows what will happen to the overall rally that didnt happen so you make it through the gauntlet of nvidia to where tony at goldman, again, sort of assesses where we are and what the best strategies are going forward. So he says the big dynamics in the game remain inherently friendly for risk. The profile of tacticalries it can reward has changed the Trading Community<\/a> is quite long the momentum factor is stretched and valuation is tricky. If the market is due for some period of consolidation, in turn i have no problem with simplifying your portfolio hes speaking directly to the beg a caps, using options to manage details, but, look, if this sounds too clever, youre probably right and what japan has done in setting new records, i get it, lighten up a bit at the same time, two great horses its the secretariats, triple crown winners. As always a very thoughtful note from tony, and i share his perspective. In fact, i thought and i was obviously wrong in that assessment, i believe february would be a month you see corrective price action in the market i think for the viewers for a minute and a half. That doesnt confirm nvidia slammed the door on that thats what the viewers have to under i feel good about i dont want to call it a broadening out. Were not seeing small caps really work but there are other names working right now in particular in the large cap space so its really some participation beyond just the semis, but, scott, i cant think if nvidia were to correct, if the smh were to correct, the market itself would be immune from experiencing a universal correction i think its all about the semis. You made the argument to me yesterday i found confuseings on closing bell you wouldnt advise our viewers to be market weight the mega cap stocks those are, what, 25 of the s p thats correct. And you would advise them to be underweight that seems counter to every argument youve made about where the market is and where you think its going if you can enlighten us because you left me perplexed with that description, to be quite frank what i said to you yesterday was you could have an equal weighted strategy and outperform and theres evidence to that you can see year to date without talking your own book for a minute its fair that youre doing well in your strategy with all due respect, i want you again, you have made the case the mega caps are going to outperform you did not see the broadening in the market necessarily happening. Correct then youre advising our viewers, dont even be market weight the mega caps because theres concentration risk within the concentration itself i gave statistics to start the show since january of 2022, where is the performance come from . Its come from meta recovering from 88 in november of 2022 to 485 today, and its come from nvidia and the semis it has not it has not come from apple it has not come from alphabet. It has not come from amazon. It has not come from tesla so when someone says you must own the mega caps at market cap weight, where we are today or more or more understand one thing, the mega caps in totality havent done the heavy lifting for you. Use the chiefs analogy the chiefs win the super bowl, Patrick Mahomes<\/a> was the reason the chiefs won the super bowl in overtime nvidia is the Patrick Mahomes<\/a>. If you take Patrick Mahomes<\/a> off the field, the chiefs arent winning the super bowl i dont agree with that let me finish nvidia is the entire story of where the performance has been, and thats why i say you have concentration risk within the concentration itself its been the story of the dramatic outperformance. It is not the whole story of the performance. You look at the s ps outperformance last year, were still only in february if you look at the s ps outperformance last year, it was because of all of the mega caps. Youre picking a period of time what about 2022 . All the mega caps were down did we have a bad 2022 were saying 2023 works for your narrative lets pull the lens back what do you mean . Im speaking the narrative the market is giving me. It had an awful year the mega caps had a great 2023 what did the s p do . It had a great year since november 1st, microsoft is only up 21 . Is that so terrible . Its underperformed nvidia so what. What has apple done since the s p is up 20 whats apple done . 5 whats alphabet done you can pick apple out of a hat. You cant cherry pick it. Since november 1st you have four of the mega caps that are underperforming the s p 500 and i just dont want to look at it from november 1st. I want to look at it from january 1 of 2022, encompass the entirety of the Federal Reserve<\/a> rate hiking cycle. If you do that the s p is up 6 and four of the names have underperformed the s p really, all you have is extreme outperformance from nvidia and extreme outperformance from meta catching up because it fell to 88 in november of 2022. Which gets us back to my initial point. Choose your time period. Last week, oh, look at the chart for ten years on something this isnt a cherry picked time period. You can pick whatever time frame you want to fit your narrative. I think the right way is to step back and look at three years look at five years, because thats you cant look at that. You can you cant do that with ai stocks cannot ill tell you why you can thats what a real investor time frame is when an institution hires thats the only way you can justify not being in the names and missing it, if you go back five years i disagree. When youre hired, most clients give you three years over that threeyear period, theyre measuring you to your benchmark. Over that threeyear period, nasdaq is kind of flat, the s p is up a little bit, small cap russell 2000 is down you take a step back and theyre all kind of in line. What i think is more interesting when you take that step back is how different the faang, the top ten, actually is versus when we were talking about it a few years ago. Amazon is flat over three years. Tesla is down over three years so theres a lot thats changed. You have a couple that have led, but the managers who have done really well and i was last week reviewing a large cap growth manager, they were up over 40 last year they werent market weight to all the mega caps. Arguably for an immeasurable amount of time going forward, the day of the microsoft announcement with openai that was a move the goal post moment for the kinds of stocks that you had to be in. Some didnt see it then. The stock still continued to perform to this day. Some more than others. It was a gamechanging moment, period, end of story it was a Game Changing<\/a> moment from then until now. If you take today as your starting point, its an interesting question to ask, who benefit the next three years, the next ten years it wasnt the companies that created refrigeration that benefited the most it was the cokes, the pepsis, the general mills. It was the food companies. I think thats where we are maybe now going forward. And nvidia has had an incredible runup. When we think about other stocks that are in our portfolio like marriott, for example, when you think about the benefits of ai to a company like marriott, theyre going to be enormously benefited by it. The efficiency that will come. Starting today, broaden your lens on who benefits from ai we can have these fill sof ksof philosophical discussions. How fun that was when the bell rang and we took off. The point is that there are lots of stocks. We focus we tend to focus on the big name brands, but there are lots of under the surface, to your point, to your point, that perform as well overriding consideration i have, though, is ai is generational like the steam engine, like 5g, like so many other periods weve seen if you listen to jensen huang, he makes you believe its the dawn of an Industrial Revolution<\/a> i think its the fifth Industrial Revolution<\/a> unless you count 5g, but, keep this in mind, right now we dont even have a lot of the use cases to find for ai. If you talk to average companies theyll say, i dont know. I think i should be looking at it but i dont know what ill do with it. That will take it to a whole other level. The winners today will still be the winners because of microsoft and aws Cloud Business<\/a> you have to put more there im happy to stay with those and look for others like vertiv. That will be a winner, right, because of data centers. Hang on im going to take a break. Im going to bounce. We all need to cool down. I have a lot of moves to get to Kevin Simpson<\/a> is making some weiss has some trimming big winners, well do it next. Announcer aryoe u following the Halftime Report<\/a> podcast . What are you waiting for look for us in your favorite podcasting app follow the halftime podcast now. Our clients are likely to recommend us. Ameriprise financial. Advice worth talking about. Theyre waiting for you. Hey, do you have a second . Theyre all expecting more. More efficiency. More benefits. More growth. When you realize you can give your people everything, and more. Thank you very much. [applause] ask, now what . Heres what. You go with prudential to protect, empower and grow. With everything you need to deliver, you guessed it. More. One more thing. Whos your rock . Learn more at prudential. Com whoa, how did you defeat them . Whos your rock . With a little kung fu strength and by connecting my devices to the most powerful force of all. Skadoosh. Hah, huh . Cool right . Amazing. Harness the power of xfinity internet and stay connected to the things you love. Ah, theyll be like this for hours. Hello dad, hello dad, hello da. Uhoh. Good bunnies. Ahh all right. Lets do some more of these moves here because its interesting. Kevin, you trimmed deere, sold to weiss, who bought deere again. Tell me why you trimmed it before weiss tells me why he bought it again. I think its down 10 from where i sold it, hes coming in and buying it. We took a little off the table i thought the earnings were less impressive caterpillar knocked it out of the park deere came in a little bit short. We still have a 2 position. Its the first time weve had deere and cat at the same time cat is crushing it, up 11 good to buy low. Im still an owner for us, disappointing. Weiss, whats the fascination . When youve been doing this for a while, and im sure they would agree, there are certain stocks you have a good feel for. Its a trading stock that got cheaper. The earnings came down its no less expensive the trade, i played that and now it moved on the down end and because of that, by the way, a phenomenal cat youve had this, people say ive had enough its not getting it. Farmers rights are up. Ill be there for a little bit i still think it can move up and then ill sell it. Josh mentioned yesterday Warren Buffett<\/a> and amazon. To me deere is a Warren Buffett<\/a> stock. If you continue to see deere cheapen up like that, to me, thats the stock you see berkshire come in and buy. Kevin, you traded half the position, was called away. Were excited jamie dimon will be on this program monday, of jpmorgan well get that promo out loud and proud and cant wait for that tell me about the stock here we had covered calls, i did not want jpmorgan to get called, i did want cisco to get called we had both positions called away i think its the best of the breed, a stock that i feel has benefited in the regional space. They have very little debt, if any, and if youre going to be in financials, i think you want to own best in breed discussing possible legal and policy options to pond to an Alabama Court<\/a> decision that ruled frozen embryos were considered children under state law putting ivf access at Risk Administration<\/a> officials tell nbc news the Justice Department<\/a> and the department of health and Human Services<\/a> are still early and no decisions have been made but did warn about the use of executive action to protect ivf access federal regulators granted native american tribes more power to block hydro Power Projects<\/a> on their land, reversing a decision that gives developers approval despite tribal objections. It will give tribes veto power that would force companies to cooperate with them in order to receive exclusive federal grants and German Parliament<\/a> passed a lot legalizing cannabis, the ninth country to do so the law will allow individuals and voluntary associations to grow and hold a small amount of the drug while a large scale but noncommercial cannabis production is allowed only for members of cannabis clubs of no more than 500 adults scott, back to you pippa, thank you. Pippa stevens. Up next, big opportunities beyond ai. There actually are some. Committee names are beating the street and they have nothing to do with it ai, that is. We will tackle those trades next we really dont want people to think of feeding food like ours is spoiling their dogs. Good, real food is simple. It looks like food, it smells like food, its what dogs are supposed to be eating. No living being should ever eat processed food for every single meal of their life. Its amazing to me how many people write in about their dogs changing for the better. The farmers dog is just our way to help people take care of them. Take cnext. F them. Next. Stop. We got it . No. Keep going. Aga. [ sigh ] next. Next. If you dont pick one. Oh, you have time. Am i keeping you from your job. Next. I dont even know where i am anymore. Stop. Do we finally have it . Lets go back to the beginning. Are you. Your electric future. Customized. The fullyelectric audi q4 etron. How am i going to find a doctor when im hallucinating . What about zocdoc . So many options. Yeah, and dr. Xichun even takes your sketchy insurance. Xichun, xichun, xichun youve got more options than you know. Book now. Complexity. Healthcare payments are filled with it. Wasted time, inadequate resources. Confusion about the cost of care and how to afford it. Its time to simplify. Waystars technology is the way to make Healthcare Payments<\/a> more human. The way for providers to prioritize care and improve margins. The way for patients to have clarity and trust. The way to care for Healthcare Payments<\/a>. Waystar. The way forward. This thing, its making me get an ice bath again. What do you mean . These straps are mindblowing they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. And you are . Im an investor. In invesco qqq, a fund that gives me access to. Nasdaq 100 innovations like. Wearable training optimization tech. Uh, how long are you. Im done. Im okay. All right. Welcome back obviously a lot of talk about tech and ai stocks getting the attention. Other stocks in the universe of our Committee Members<\/a> that have been crushing it just to remind you there are things outside of ai that can do well like jennys sl green from november 1 up 22 from november 1 well put that line in the sand of when the latest leg of this record setting rally started like sl green up 59 , lamar advertising, up 35 , like marriott, up 32 , jenny. And these are only a handful. You had a list of ten we cant do ten. It was so hard to choose. We helped you choose. I tried to think what is similar and what is similar is expectations were just trel reay out of line. None of them are up so much because they had that nvidia moment they didnt suddenly go from a company that didnt make money to explosive earnings, but they were all companies that just delivered. Lamar advertising, its the huge billboards everywhere. Why is it up so much because they delivered on earnings the same with marriott you see International Hotel<\/a> rooms are booming. Up 17 last quarter. Sl green prime class a real estate in new york city. As everybody freaked out, commercial real estate is dead, nod all commercial real estate is created equal kevin, merck up 27 , depot up 31 , cat up 43 were not talking about nvidia, a stock jenny and i typically arent looking at. Its important to look at home bepoe. Its about total return, cash flow youre getting a dividend. Youre not stretched or ex extended these are companies that return cash to shareholders the other thing to remember is these can all be beneficiaries of ai. If jensen huang was right in his postgame presser, the earnings call, we talked about it extending into the other industries it will increase earnings and dividend growth. Joe, train technologies is up, Intuitive Surgical<\/a> up 48 , costco up 34 trane also a record intraday high this is the reason im so passion add about our conversation, everyone on the desk is managing money and everyone in the halftime universe is managing money you never want to concede to the market the three names are a classic example of mine for the opportunities, reshape the risk, understand the risk and you have the strong belief that, yes, you can with your strategy overcome some of the concentrated performance that we see in the names like meta and nvidia weiss, transdym, uber, 80 if you take a look at those, goldman is the premiere investment bank, in my view. And they will even ratchet up that performance transdigm is a permanent compounder, a private collection, and its an aerospace and defense. Theres not a plane out there that doesnt have one of their parts on it. Uber has just delivered. I have all three in the portfolio. Straight ahead, david versus goliath. Up nt,ex were going back to trade school to speak with the heads of baylor universitys Endowment Fund<\/a> were going to find out whats driving that success halftime is back in two minutes. You bring a lot back to civilian life. Leadership skills. Technical ability. And a drive to serve in new ways. Syracuse universitys Daniello Institute<\/a> for veterans and military families has empowered more than 200,000 veterans to serve their communities and their careers. From professional certifications, to job training, to help navigating programs and services, we give veterans access to support from anywhere in the world. All right. Welcome back to halftime. It was billed as one of College Basketball<\/a> upsets, baylor crushing previously unbeaten gonzaga to win the 2021 National Championship<\/a> another collegiate competition has that school near the top of another highly prized battle the best performing College Endowment<\/a> in the country over the past five years baylors tiny by comparison 2 billion fund has beaten the illustrious ivy leagues. Two of the managers are with us today. Dave morehead, cio, renee hannah handles the private investments. Welcome. Its great to have you on halftime. Thank you were happy to be here you beat all the Ivy League Schools<\/a> the past three years, the ivies except for brown over the past five. I think the question, dave, how did you do it . Well, first of all, we should say that this is a little bit of a fun competition that we have amongst all of the schools obviously every school has different risk tolerances, different needs. Our liquidity has been a topic of a fair bit of concern over the last 18, 20 months or so but our view is if we think about what our liquidity is or needs are in advance, we can take advantage of opportunities as they arise. Really, i think the bit that we try to get right is the cash flow and the liquidity needs. You, renee and three other ladies, five of you running the endowment . Thats correct. On the Investment Team<\/a> its the five of us what would you say is your main strategy. Youre looking at broader themes and then bringing the ideas to managers how does that work most endowments actually outsource the actual trading, the Portfolio Management<\/a> it you think about it from an intellectual perspective, it would be really hard for somebody to have all the smartest people all the best ideas in one room. Whether its yale or us or the schools up and down the street, almost all endowments outsource most of the investment activity. How it works from an overall perspective and the opportunities we do take is really driven by the managers, and then, if we on the edges, are seeing something that theres a dislocation, we could allocate more money into high yield. We could allocate more money into em, Something Like<\/a> that but thats really what were doing. So, renee, what i find interesting, too, private investments make up half of the endowment. What kinds of themes are you looking at in that arena yes, scott, we dont try to invest in all things we run a focused portfolio and are leaning in to longterm growth were leaning into technology, leaning into health care, into consumer that makes up roughly 80 of the portfolio when we leaned into private oil and Gas Investments<\/a> in 2020 via the secondary trade. The asset class was out of favor. You aimed to cash out before the companies ipo. Tell me about that we like to stay involved in companies when revenue is zero to 50 million if you look at the private equity industry, two thirds will be in funds that are 3 billion or greater our portfolio is comprised of strategic or larger financial sponsors that gives us an opportunity to get the capital back on the marketable side so we can be tactical. Jenny harrington on the desk has a question jenny . Hi, guys. Congratulations on the amazing performance and love the heavy woman dominance of your group. Thanks, jenny what strikes me, you said five people run it and its only 2 billion when i think of harvard and yale, i wonder how much size the committee as well as the endowment allows you to be more nimble, to move more vastly. Dave . I think some has to do with my background on the forprofit investment side. Im comfortable in this role, wearing the risk weve looked back and theres one theme a year thats kind of helped or driven performance particularly on the marketable side in 2016 it was High Yield Energy<\/a> in 20172018, the vix was at alltime lows, so we were actually buying long 2018 we were having trouble finding things to do, so we built cash 2020, post the pandemic, it was a reopening trade. 2021, again, we were finding difficult things we were having difficulty finding things to do, so we went back to long vol again last year we were really building small cap position. So that hasnt particularly played out yet but we own our own capital so we dont have to hold ourselves to account every two weeks, every two months. We lock out three yearsish in terms of what were trying to achieve in terms of returns versus the dislocation were seeing today interesting steve weiss question on the private side. Are you expressing in coinvestments or going with managers if managers, are you tending to pick the medium size because they can generate better alpha everything we do is going to be through managers on the private slide and we select managers that are smaller and can take advantage of the capital above them it will be subwho is sub 500 million. Dave, you look at these stocks that are just like nvidia and the mega caps. Im curious the exposure to those. Do you call in the managers, do we have enough nvidia . You see the stock going up the way it has, its pretty remarkable we actually dont have very much exposure. Endowments in general are way more diverse than the s p 500. We own everything under the sun in the public and private markets. What were doing is really at the edges, like i said, we focused over the last year on the historical spread between large caps and small caps since we tend to be value conscious. We dont have that much exposure to the magnificent seven continued success wish you both good look. Its great to have you well see you soon, i hope thank you very much thank you you be well David Morehead<\/a> and renee hannah. Up next, trades on a few Key Committee<\/a> names. Well set you up ahead of that rich is being able to keep your loved ones close. And also send them away. Rich is living life your way. And having someone who can help you get there. The key to being rich is knowing what counts. upbeat rock music [phone rings] hey, jim. Ill definitely get those to you first thing monday. Bye. Conquer the weekend, in the allnew Hyundai Santa<\/a> fe. grunting at morgan stanley, old school hard work meets bold new thinking. laughter at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. Investment opportunities old school grit. Are everywhere you turn. Do you charge forward . Freeze in your tracks . Or, let curiosity light the way. At t. Rowe price, we ask Smart Questions<\/a> about opportunities like advances in healthcare and how these innovations will create a healthier world tomorrow. Better questions. Better outcomes. Welcome back going to be another busy week for earnings monday is one oak. Right i was so nervous about nvidia. This is the opposite this is the company thats reporting that you have nothing to worry about it will be the First Quarter<\/a> where we start to see it post. Youll see deleveraging, a clean balance sheet. Its got a 5. 5 yield on it. Joe, zoom is also on monday recent purchase not every stock that you own youre going to really have deep affection for. Were learning to like this one. The Free Cash Flow<\/a> number has to come in stronger than 210 million. This is a Free Cash Flow<\/a> generation story, because earnings are going to be down probably 5 to 6 . And the Revenue Growth<\/a> isnt there. Its modmodest, single digits. A dig ai moment next week, salesforce is wednesday after the bell i think this is probably one of the most important earnings reports next week, and its really, okay, what is i. T. Spending currently, and what are they believing that i. T. Spending is going to look like as with we move forward, in particular in the wake of Palo Alto Networks<\/a> . The story and the reasoning behind the recovery for salesforce has been lifting of margins. Theyve lifted the margins from below 20 up to nearly 30 so theyve got to maintain the strength of margin they have to continue executing on cost efficiency and they have to give investors some degree of confidence that the demand is still there for i. T. Spending. We will nadofil trades on the other side of this quick break. 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Gobble gobble. Ive seen bigger legs on a turkey rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness<\/a> mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment<\/a> objectives, risks, charges, expenses and more in prospectus at invesco. Com. song in french book in the hotels. Com app to find your perfect somewhere. All right. 3 00 eastern on closing bell, i hope youll join me. Karen mcdawson is we me. Tom lee will be with us, too hes been all of the f. A. N. G. Trade. Lets do final trades. Kevin, what do you got walmart great earnings, online sales were up 20 . Increased their dividend by 9. 3 and finally, most importantly, theyre going to have a three for one stock split on monday. Jenny star bulk, theyre closing a merger with eagle in april steve weiss leidos. Its one of those companies that doesnt get a lot of attention its cheap, management came in close to a year ago. Just a great, steady story joe snmplt intuit reported earnings this morning. I was listening to cramer this morning. He said it shouldnt be down look where it is right now approaching a new alltime high. Swezll see if the nasdaq can get that closing high. The exchange is now. Hi, everybody. Welcome to the exchange. Here is whats ahead tech stocks are treading water after a big run. The nasdaq is flat s p tech sector flat the dow, the only major average that hasnt dipped into negative territory at some point in todays session. Nvidia briefly touched 2 trillion this morning, so is the ai momentum finally starting to slow our trader says not just yet the names shes buying now, and the one to avoid a different story for live nation, however. 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