Transcript:
Tom Vaughan:
Hello, welcome to Thursday. The S&P 500 was up .2% today, and we’re getting really close to an all time high. Again, it’s actually happening on most of the major indexes right now, getting near all time highs, so that’s fantastic. Great leadership today out of some really high quality companies like Apple and Adobe and Amazon. So these big growth companies are doing quite well. They’ve had a few days here and there where it’s kind of settled down, but there’s been a nice trend in these big growth companies happening right now.
I think personally, this is such a strange environment with so many things that are happening; crosscurrents that are going on: “Are we really having reopening or not, and how’s that going to work?” I think people are kind of falling back on sort of the tried and true, big growth companies. And the other piece that’s important to understand about those is that they really haven’t done that well, since the end of September, in comparison to some of the other categories that did really well. So, their earnings have continued to grow. Some of them quite dramatically actually, but their price have kind of stayed fairly stable. And now we’re starting to see some kind of breakouts in those particular areas. So kind of the combination of, quasi-value in those areas, as well as the fact that I think there’s some flight to quality here as a whole. Not that I think people are super nervous about what’s going to happen, it’s just more there isn’t a real strong trend at anything; so we might as well go with companies that have great earnings, have fantastic cash positions, have cash flow that’s just unparalleled, really worldwide to a certain degree in some of these companies.
I think that’s a great thought process, for this. We got a reopening, we don’t have reopening. We have a vaccine, and we have a Delta variant. We have all of that inflation, hyperinflation; “oh, maybe the economy’s not gonna grow fast enough.” We got a tight unemployment market, and then today, the unemployment number that came out was a little soft, so unemployment isn’t as good as thought, so. That’s what’s happening: We’re just getting all of these crosscurrents, and I think some money is actually moving towards these large cap pieces. And we have those in our model, because that’s a trend that I’ve seen. We’ll see how much of that how long that trend actually lasts but, that the areas that I’m seeing motion in, mostly are in kind of that larger growth stock area as a whole.
And I like that area, actually. I love investing in companies that have huge cash positions, and really dominant names in their category: The Microsoft’s and Adobe’s of the world. Everybody kind of knows those names, and it’s harder for other people to break in. I think this is a great market, actually. This is a fantastic arena to be invested in right now. I mentioned yesterday, I think the basics are there. Don’t lose sight of that, and things are moving along nicely.
Look forward to see what’s gonna happen tomorrow. We have our Talk Money with Tom show tomorrow: Friday’s from 12:15pm to 1pm Pacific Time. Please feel free to join me, I’ve already gotten some questions that have come in. Feel free to send in any other questions at any time, and I’ll try to answer those during that show. I look forward to seeing you then. Thank you. I’ll talk to you tomorrow.