COT 153 – Special Mid-Year Analyst Update ===

[00:00:00]

Good morning, folks. Welcome to The  Cents of Things with Jeff and Ron,  

and this is a special episode focused around  the midyear and where all of our friends in  

the analyst community have completely  revised their numbers. I’m sure, again,  

Ron’s gonna cover that, so stay tuned.  We’ll be right back on in just a second.

Hey, everybody. Welcome to the show. Ron,  how are you, my friend? Good morning. Good.  

It was interesting ’cause, I like to be  the keeper of the information sometimes,  

and kinda doing research on where some  of the market analysts are more for  

entertainment fodder than anything else,  but I thought it was pretty interesting.

And then obviously also, like what  were our, so what were our predictions,  

not only for the- … market, but also- Yeah  … for sectors what to look at and what to  

avoid. So kinda looking at the chart here,  I, some of them I couldn’t find. I tried  

to. But many of them reiterated.  There were several that increased.

But I thought three that stood out to me  because right now the S&P [00:01:00] 500’s  

at 7519. Yeah. It was at 7480-something  close of yesterday. But I found that Bank  

of America was very interesting. They have  not increased it. Being the biggest name  

out here next to HSBC and CFRA. But, this is  essentially, 7%, under where we are right now.

8%. Yeah. And, looking at this, I think  it’s ~pr- I’m sorry, not 7. It’s six,  

s-~ about five to 6%. I think it’s just  very interesting because they’re saying  

we’re gonna be lower at this point- … if they  haven’t increased their price target. Yeah. And  

obviously they see a lot of things that are out  there that, obviously a lot of positives in the  

market, which is why you got Morgan Stanley  saying what they did say about the Mag Seven.

They’re trying to push this thing another 500  points higher by the end of the year. Yeah. So  

I thought those three that reiterated were  interesting. Meanwhile, Oppenheimer and Deutsche  

kept their price targets at 8,081 hundred, and  they could be right. Yeah. Who knows? [00:02:00]  

Yeah. And Bank of- So Chris what are your thoughts  on here before we get into what you and I saw?

I think my favorite… ‘Cause I do read the Bank  of America report, and their analyst that covers  

that, that’s their lead analyst on that, is  just straight up, flat out unbelievably wrong  

consistently. And if you listen to his advice,  you would not make any money. They are just flat  

out wrong, and they are just gonna keep him  in his chair and let him be wrong like crazy.

I honestly, I agree with Oppenheimer and Deutsche,  ~I don’t, I, I’m~ not changing any of my views for  

this year. Honestly, I think the market’s probably  gonna close around 8,000. I don’t even remember  

what we said at the beginning of the year.  All right. You’ll see. You’ll see in a minute.

All right. We’ll see. I don’t even remember  what I said, but I agree with him. I think  

we’re still gonna keep climbing the wall of  worry. And I think the S&P is gonna be somewhat  

muted because the powerful engine that it has  [00:03:00] been, if you watched our last show,  

the powerful engine has been the a- the Mag  Seven stocks, because they were 30% of the index.

And I think they’re somewhat muting  the the performance of some of the  

other stocks this year. And I also kept  their 2025 numbers because the number on  

the left in the 2025 column was what they  came out at the end of 2024- Yeah … for  

2025. And the reductions were within 30  days after the tariff tantrum last April.

And you can all see now where their numbers are  for what they say for 2026, less than two years  

later, or 18 months later- Yeah … where they  expected. Look, nobody wants to be wrong. But  

with this, it is a dart throw. Yeah … there’s  no other way to say it. You look at Zacks and the  

Scotiabank, it’s okay, once again, if you listen  to their advice, you would never make any money.

And I, it’s amazing to me that they actually  still have a business [00:04:00] in those  

cases. Yeah. But here’s the interesting thing.  We truly go to a full-scale war- Yeah … and  

we don’t have Europe or many of the other  countries and alliances backing us up yeah,  

we could see it easily a 10  to 15% hit in the market.

I’m just saying. We could. We could, but  we … Yeah, the market’s been pretty  

damn resilient. We’ve, we were- Yeah, but you  know what? If oil gets back over 100 to 110,  

and we can’t get goods here, and the supply  chain seizes up, I’m saying- Yeah … you’ll  

see a 10 to 15% hit. So that’s why  these numbers- are all over the board.  

Yeah. Yeah. Once again I … Some of these guys  I’m I don’t even remotely listen to at that point.  

Yeah. I listen to Goldman Sachs. Like I said,  if nothing else- They’re always pretty- …  

it’s entertainment purposes for you and me …  yeah. I listen to Goldman Sachs ’cause they are  

pretty much always the smartest guys in the room.

Morgan Stanley has good stuff. Bank of America  I wouldn’t listen to if you paid me money,  

I like I like Mike Wilson at Morgan  Stanley. Yeah. And even he’ll say,  

“Look, trying to predict anything  is difficult.” It is. But here,  

here’s what we see good in the [00:05:00]  economy, here’s what we see bad.

Yeah. This is what these market strategists  will do. To me, the ones that I’ve always had  

the issue with are not the bearish  ones. It’s the ones that are just,  

the bullish ones just keep pumping it  up. Just keep pump- ’cause ultimately,  

yeah, we’ll be higher, but people are …  Many people are quarter-to-quarter based.

Yeah. Which they shouldn’t be,  but you gotta just be realistic,  

and I’ve just found most of these market  strategists, they’re toeing the company  

line. They’re not independent. That’s my  opinion. We beat this to death over time.  

Yeah. All right. Next. So here we are. This  is what you and I said for the calendar year.

Yeah. And when we announced these numbers,  it was December 17th, when the market was  

at 6721. Today we’re at 7482, so we are  seven… over 750 points- Crap … higher  

in the last seven and a half months, or seven  months. Crap. If we could just, [00:06:00] if  

we just stay flat a little bit more, I  can get my bullish case in for the year.

But yeah, I, yeah I mean- No, you  would’ve got your base case. Oh,  

I know. I’m right at my base case at this point,  but I still have another half a year to go. So  

it can go either way on me at this point,  and I don’t want it to be the bear case,  

so we just- I- Yeah … I know.  I just think it’s funny, though.

Like I said, I thought we definitely  would be higher, obviously. Yeah. But,  

I didn’t think we’d be this high at this point.  I thought- … this would be relatively a flat to  

negative year. Yeah. If we were up, I didn’t think  we’d be up 10%. It’s just insane. Yeah. And the  

funny part is I laugh though, because I’m like,  my, my portfolio that I run for clients really  

has absolutely very little component- cross to the  S&P, and I’m like, “We’re up a lot more than…”

I’m not excited about the S&P this year,  

but it’s still a really good year- Yeah  … for the S&P. We’re still up, what,  

8% year to date. That- People are greedy, my man.  People are greedy … that’s a really… Yeah,  

that’s a [00:07:00] really good year  normally. And we’re halfway through the year.

So i- if we went flat for the rest of the year, it  would still be a pretty damn good year, you know-  

I agree … overall. I agree. All right. So then  what did we see when it came to areas to invest  

or areas to avoid? Yep. So these were sectors to  consider. Now, I will say, in a bit of flag-waving  

my biotech the IBB ha- hit all-time highs in- the  last two weeks and has been going up. … The BBH,  

which is the mid and the small cap, is at a  five-year high and c- approaching all-time  

highs. So the biotech finally broke out in the  last month. The defense and aerospace has still  

been pretty positive. AI and robotics, yeah, it’s  been flat recently, but it’s been doing very well.

And I said… And by the way, I put it in the  both. Real es- real estate would be good if  

the 30-year Treasury would go down, which  it has not been. What do we- … what are  

your thoughts on [00:08:00] where  you’re where you thought you should  

put money? ~Indust-~ So ~my, my, my~ theme  was industrials and natural resources as one.

The industrials portion of that  sleeve, crushing it for the year.  

Absolutely crushing it because, it’s  industrials, construction company,  

stuff like that. We rotated out of the  natural resources portion early in,  

let’s call it February-ish. So it’s more  aligned to the industrial side of it right now.

Tech and communications the 5G and future  communications, crushing it this year. And  

clean energy, you laughed at me, my friend,  but that is my best performing sector this  

year- Really? … is clean energy. I haven’t  tracked it. Yeah. It’s crushing it. Crushing it.  

That, that sleeve it, that full sleeve, not the  ones we’re invested in, but the full sleeve is…

it’s up like- 48, 50% for the year.  Just crushing it. Because, a lot of the,  

Part of this is with these data [00:09:00]  centers. My theme was around data centers,  

so these are the components of it. And my theme  with that was I knew what was gonna happen  

because there’s such a resistance to these data  centers because of energy and water and all that,  

that, they’re gonna have to put in  their own, power plants, basically,  

and that all kind of falls under the clean energy  realm, gotcha. All right. And then we said these  

were the sectors to avoid. Of course if it  wasn’t for the war, energy and oil would’ve  

been flat again. But that has actually done  well. So I didn’t call that right. And I said,  

and I did say about consumer discretionary  has just been bad in- bad investment.

It sucks. But the real estate,  I put that in here also because  

I said- You hedged your bets … if the  rate doesn’t, if 30 year doesn’t go down,  

keep away. And- Yeah … and basically they  came out with housing numbers today. They  

were flat. It just, it’s going nowhere.  What are your thoughts on your stuff?

Health insurance has actually crushed it  this year. Utilities actually have been  

really [00:10:00] good, surprisingly.  And my belief on the pure AI side,  

I think has been completely right.  It’s been, especially the hyperscalers  

have just wildly underperformed. Where  you make money on the AI side has been  

downstream of the component producers and not  necessarily the big plays on AI at that point.

So I was correct there. Health insurance,  

surprisingly, has been really  good this year. And like I said,  

utilities has been… if you looked at the-  They’ve been doing well … the sector map,  

they’ve actually been up towards the top which  surprises the heck out of me. So hey, whatever.

I, my, my other pieces have been fine. So yeah,  if I avoided the other ones, I don’t care at  

this point. It’s worked out. No, I hear you. So  that was the quick overview of what- Yep … we  

got so far midyear. We’ll do it again in  December. It should be interesting to see.  

I would ex- if not in the by the end of July, I  [00:11:00] would expect by September, October,  

before the midterms- as people see things shaking  out towards the election that we may get some end  

of year revisions, which is stupid. You’re gonna  give an end of year revision with three to four  

months to go, but it’ll happen. Oh I would not  be surprised- Yeah … to see that. But yeah,  

at, the, it doesn’t surprise me ever  when you see this with these guys.

They try and keep their job by, by, “Oh,  look I hit the number on.” You revised it  

four times during the year. We don’t. We give a  baseball and- Bear case, and good on both of us,  

’cause we’re right on track, in either, in  all cases, yeah. Good. And it’s, like I said,  

it’s interesting, like I said we’ll touch  upon this between now and the end of the year,  

but we’ll do another end of  year going in the next year.

It’s always good conversation. That’s always the  fun one anyhow, and to kinda talk about our themes  

for the next year. So I’m already formulating  my themes for the next year at this point,  

so I’m excited about it. Good. All right,  folks thanks for joining us once again.  

We do these shows for you, and this was  [00:12:00] one of those special shows.

So if you don’t subscribe to the  channel, you may very well miss  

it. So make sure you subscribe, and we’ll  see you guys back here the very next time.