Roundtable Discussion On Gold, Tech, Bitcoin, Country ETFs And Ignored Stocks
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Rob Isbitts joins analysts Amrita Roy, Uttam Dey, Emma Johnston, aka The Country Investor, and Mike Kehoe, The Undercover Investor, to discuss current market trends and portfolio advice (0:45). Gold, macro volatility and playing defense in this stock picker’s environment (8:30). Single country ETF versatility (15:10). Playing defense within tech (20:25). Dissecting 2 Bitcoin ETFs (26:35). Focusing on ignored stocks (29:15).
Transcript
Rob Isbitts: Welcome to Seeking Alpha’s Investing Experts Podcast. I’m Rob Isbitts, a Seeking Alpha analyst, and you can find me under the profile name, Sungarden Investment Publishing.
One of the things I’ve really enjoyed about being an Alpha, as I like to say at Seeking Alpha, is that the platform contains the most impressive collection of diverse and young investment talent that I have seen.
That’s why today I’m joined by four of Seeking Alpha’s bright next-gen stars. They are Amrita Roy, who also has a Substack called The Pragmatic Optimist, really like that name; Uttam Dey, who publishes separately and parenthetically is also Amrita’s husband. Then there’s Emma Johnston, who writes under The Country Investor, and I think that’ll be a different take for everybody; and then Mike Kehoe, whose profile name is The Undercover Investor. We are going to make this a free-flowing discussion for about the next 30 minutes.
And to start, I asked each of these analysts to explain who they are, what they write about on Seeking Alpha, and the single thing they want listeners to know about their market view right now. Oh, and I challenged them to do it in a 100 words or less. So I’ll go first and then have them follow the example.
So I’m Rob Isbitts, 38 years in professional investing. I’m a chartist or technician at heart. This is what I’ve learned. Offense is overrated in investing. It’s important, but overrated. Defense is underrated. And that governs everything I do in my portfolio construction. I think modern markets work differently than we were taught to think. So we need to stay current, especially for baby boomers like me.
And so my current portfolio, which I talk a lot about on Seeking Alpha, is a lot of T-bills, a dividend stock portfolio I’m gradually building using a factor I created and trademarked called YARP and tactical ETFs and options to round things out. So that’s me.
Now let’s turn to Amrita Roy. You write about two of the most popular investing topics of our time, I think, macro market analysis and tech stocks. Your bottom line right now is you’re bullish on T-bills, hey, me too, and gold. And although when it comes to gold, I have to say, it’s been a necessary evil for me over the years. So I’m really interested in hearing what you say about that. But what is top of mind for you right now?
Amrita Roy: Sure. Hi, everyone. This is Amrita. Rob, great to be back with you again on the podcast. So in the last podcast, we talked, or I talked mostly about my positioning in the technology space, which I’m concentrating on companies with pricing power and beneficiaries of AI who are well positioned in this current macro volatility environment.
But today, I think I’ll focus most of my conversation on more of the defensives in my portfolio, which one of them you mentioned is T-bills, given its risk-free rate of 5.25% makes perfect sense from a cash allocation standpoint, which earns risk-free interest.
And the second thing is gold. Like you said, it’s a necessary evil, but we are at a very interesting macro volatility environment right now where there’s really a tug of war between inflationary and deflationary forces.
And my bull case with gold over the long-term essentially is that gold has sniffed out the dynamic that the Fed’s 2% inflation rate may not be that achievable under the kind of macroeconomic indicators that we are currently getting. So that is my underlying thesis on gold right now.
RI: Thank you for that intro. Uttam Dey, you write about technology as well, but with a fairly narrow focus and I say that as a very large compliment. I think that what a lot of the Seeking Alpha audiences looking for is a narrow focus. It’s almost like collectively Seeking Alpha is a collection of subject matter experts. And so it works really, really well for the audience.
You also cover digital assets and defense stocks. So tell us more about that as a little intro here.
Uttam Dey: Yeah, Rob, thanks for having me. I’m basically a technologist at heart and I’m really fascinated by the numerous advantages that the adoption of technology can bring and the potential to benefit from that as an investor is just, it’s a great opportunity for me and for other investors.
I think my fundamental and understanding in technologies, like specifically in the software infrastructure and platform part of the tech stack, along with my expertise and just valuing different positions and investments is something that I bring to the table when I’m just publishing research notes on Seeking Alpha.
My research style is just mainly just fundamentally-driven, growth-oriented strategies. It’s just meant for long-term horizons. And currently, yes, I’m focusing on primarily writing just about tech, like I just spoke before, but there are a couple of sectors that I also have started to write about because I think it’s really important given the backdrop that we are in today. So the other two sectors is alternative assets like Bitcoin and then also defense stocks.
RI: Great. Well, we’ll look forward to diving into that a bit more in just a couple of minutes. Emma Johnston, you have brought a new dimension in ETF coverage to Seeking Alpha. I’m a self-admitted ETF geek or ETF Nerd. I think I have my ETF Nerd button that somebody gave me right next to me on the desk here. So, your prior training kind of made this a logical next step for you. So please introduce yourself to the folks.
Emma Johnston: Definitely. So excited to be here. My first podcast always wanted to do this. So, yes, my name is Emma Johnston, and I write under The Country Investor profile for Seeking Alpha, and I really try to focus on single country ETFs there.
And I’d say I’ve been writing for the platform since late January. I’ve got a professional background with a large passive asset manager and I worked as an investment strategist in the equities team there for several years. But I have a formal graduate education in international relations. So Country Investor is really the marriage of these two disciplines.
Things that are on my mind at the moment, things impacting markets and particularly relevant to the single country space is the sort of period of brinkmanship we’ve entered with rate cuts by central banks.
The March inflation report undercut consensus expectations around rate cuts in June. And it seems like other central banks don’t want to be the one to jump first either. So we’re in a sort of interesting detente period as with respect to rates.
RI: Mike Kehoe. For a while, Mike, it was just the Mag 7. It was their world, and we were just living in it. That is changing, isn’t it?
Mike Kehoe: Well, thanks, Rob, and it’s great to be here. Well, I think that was mostly true for much of 2023, if not all of 2023. But just a year earlier in 2022, many of those stocks experienced drawdowns of 50% or more. And so I think that shows you just how quickly things can change, and things have changed again this year as market breadth has begun to widen out.
I think you can see this in the gap between the performance of the S&P 500, which of course, is a market cap weighted index and the performance of the equally weighted S&P 500. The performance gap between the two is essentially collapsed, as index performance is being driven by a wider swath of companies so far this year. I think this makes for more of a stock pickers market than what we saw last year, and excited to dive into what opportunities I’m seeing there.
RI: And that is what we’re going to do now, now that we’ve kind of covered the world in eight or nine minutes. I’m going to go back to Amrita.
And you had spoken before about gold and about T-bills and frankly, about kind of where you’re, I wouldn’t say pivoting to, but you are a macro strategist. You and I share that. Tell us what is in the hopper for you right now.
AR: Sure. So, like I said before, we are living in very interesting times when it comes to the overall macroeconomic environment. There’s really a tug of war between the inflationary and deflationary forces at the moment. We are in a fiscal dominant era with government deficits on the rise, and there is just a growing divergence between the haves and the have-nots.
And it’s just not about even individual consumers, you can see that among companies as well. The growing divergences between companies that have pricing power and companies that are just struggling to even meet their financing requirements. So this is actually creating, like Mike said, a really sort of a stock picker’s environment.
So a couple of things. So to tie back to what I had said earlier in my previous podcast, I had talked about companies that actually will stand to benefit from this whole macroeconomic environment, which are driving their product innovations through AI, for example, and seeing deeper adoption in their platform spend, leading to higher margins, leading to better operating performances.
And those companies I had mentioned were the ones that are focused – that are specifically around industries such as cybersecurity or DevSec or even certain kinds of consumer tech companies.
But today, I want to focus, as I said, more on the defensive side, which is on the T-bills and gold, which I think are very interesting. So to take a step back, I’m a technological optimist. But at the same time, in this macro environment, I think it makes sense to be a Pragmatic Optimist first, in order to make sure that you have a portfolio that is balanced.
So when it comes to gold, gold is at a very interesting point in time, because there are two things that are happening that is making the case for gold. One is macro volatility, and the second is that central banks around the world are piling into gold.
When it comes to the macro volatility, we are seeing this very interesting thing where gold is moving in line with the 10-year real treasury bond yield. That is a little bit strange, but not strange at the same time, given sort of the era that we are in.
Essentially, when gold is going up in line with the 10-year treasury yield, it ultimately kind of means that the gold has already sensed out that, or in other words, it doesn’t believe that the Fed is going to meet its 2% inflation target, given the kind of hot CPI prints we are getting three months in a row and the repricing in interest rate futures at the moment, which is just pricing in two rate cuts.
So given this dynamic, I believe that along with the fact that that central banks are also pouring in into gold to manage their FX better or to improve their quality of FX, I think, gold has a real case at the moment for a long-term bull run in this macro environment, where also certain kinds of technology stocks will also stand to benefit at the same time, interesting times, I know.
RI: So let me get this straight, Amrita. All that chatter about six or seven Fed rate cuts this year and all that happy talk and inflation’s gone for good and the Fed got it right and all that stuff, that was just another cyclical round of mainstream Wall Street, big firms with big voices, telling us happy talk, so that we would buy more stuff?
AR: Great point. I think when optimism starts to come, everybody gets very, very optimistic. Like I said, even in the previous podcast that I don’t, like I see S&P 500 continuing to chug along in the previous month, which it did for another 100 or so points because there was really no catalyst at that time given that Q4 earnings were over for S&P 500 to suddenly say, oh my God, I’m going to start to price in a hard landing scenario.
It was getting good earnings, like companies were presenting strong earnings projections; and B, we were also seeing inflation sort of steadying out, declining at the same time. But I think when markets start to freak, everyone starts to freak. So that is what is currently happening.
A couple of things, I think we often tend to forget what kind of a big fiscal dominant era that we are in, which is inherently inflationary. And the second part is that end of last year, when the Fed almost sort of didn’t declare, but indicated that the inflation fight was more or less over that it had conquered inflation, the bond market sort of almost declared victory, which is exactly why the interest rate futures were pricing in way more rate cuts, I think, six to eight, way more than the Fed’s three rate cut projections.
This inherently loosened financial conditions and probably one of the main drivers of why we are seeing the CPI print coming hot once again for three months in a row at the moment.
But my thinking is that the bond market is currently doing most of the work by retightening once again. And we may once again see sort of inflation start to come down again, hoping that nothing breaks in the banking or in the treasury market, because liquidity is ultimately the glue that drives everything forward.
RI: Yeah. I think what you’re saying is that, I mean, there are – there’s a paradox here, right? You’ve got these macro hurdles, which I’m, as far as I can tell are probably creating the highest risk to reward, high risk, low reward. There’s always reward, but the question is at what risk. But the odds are stacked so much, but that’s in the near-term.
Eventually, we’ll get beyond it. It’s almost like saying, well, if I have a proverbial $100, maybe the best way to keep moving forward toward my investment goals is to make sure first that that $100 doesn’t fall to $70 or $60 on the way to $300 or $400 years from now.
So I’m going to move over to Emma. I’m a big fan of country investing myself, written about it just a little bit on Seeking Alpha, but it is not a market niche that I think you’ll find on the tip of many investors’ tongues. Should it be and why?
EJ: Well, I’m a bit biased, but I sure think so. I really like its versatility. There’s, as we all know, so many different lenses through which we can decompose markets and risk drivers. For example, I have a background in factor investing, which is just one example of these lenses. But at the end of the day, an investment approach is our best effort. It’s sort of systematizing and implementing a philosophy that is optimized for our own risk and reward tolerance.
And part of that process for me is figuring out new ways to segment the market. And I think one way to do that is country investing, which in essence is capturing a series of considerations around macro sector, sometimes currency and political risk factors, and then trying to contextualize their role within your own portfolio. These single country ETFs can accommodate different time horizons.
One country might be a better long-term play, another might be a tactical move. I don’t want to generalize too much, but in an overbought U.S. market, there’s also some value to be found abroad. What will give you – still give you exposure to key themes, just vis-à-vis a different route.
And so right now, I’m just thinking of a recent article I wrote on Taiwan (EWT), which I think we all know is a critical link in the AI supply chain. And it’s cheaper than a lot of tech you’d find in the U.S. So yeah, I think it’s just a different bet and I’m excited by all the variety out there. There’s more than you think, you know.
RI: So I think you make a good point on tying the macro together with a single country, in this case, Taiwan. Obviously, some geopolitical risk there, but it has just been risk that was not realized unlike some of the risk of things like reinflation that have now been realized and it’s part of what’s impacting the market.
Can you just briefly, one or two other countries that you have either written about or that you’re studying about?
EJ: Yeah. Well, I mean, if you want to take the other side of the Taiwan bet, I just recently wrote about Mexico (EWW). So obviously, benefiting from this strategic sort of approach to nearshoring, right, like we understand this weakness in our supply chain is super concentrated in a pretty tense environment. And so, wrote about Mexico recently.
And then I think in terms of heavy hitters in the euro region, France, it’s sort of outperformed the broader region, low, low vol relative to some of the more emerging countries that I think are generally more interesting to read about. But again, all these have a role to play in your portfolio. So just trying to capture a broad swath of different countries and the value they add.
RI: Yeah, I keep a list of, I don’t know, 75, 80 single country ETFs on my screen every day. And there’s something I remind myself to do every day. And this is why I’m a fan of country investing in this era, in this era of dramatic U.S. outperformance for so, so long.
And who knows with the dollar, right? Because I think my understanding is that these ETFs from other countries all get translated back into dollars if you’re a U.S. dollar investor, correct? So a stronger dollar hurts them, a weaker dollar helps them, yes?
EJ: Yes, yes, and that’s definitely part of the broader – the broader picture I try to paint is understanding currency movements in relation to the U.S. dollar and what kind of sectors those countries are focused on so.
RI: And those really, when you think about it, it is a different type of diversification that people are used to, but it follows the same principles, doesn’t it, right? You want something that’s going to zig when the main part of your portfolio is going to zag.
EJ: Yes.
RI: And that’s sort of Level 1. Level 2 is, well, maybe generally the country ETFs are going to behave differently from, let’s say, the U.S. stock market. But also, within those countries I mentioned, I’ve got maybe 80 of them on my screen.
And what I remind myself to do every day is to quickly check and see what is the array of performance from best to worst on a daily basis. And just about every single day, you’ll see some that are up 2%, 3%, you’ll see some that are down 2%, 3%. And I mean, sometimes it’s wider diversification than you get in an equity market when it’s all going in one direction or the other.
EJ: Yeah, absolutely. And that’s part of what’s exciting about it. So I’m glad I have a fellow single country investor nerd on this podcast.
RI: Yes, exactly. Guilty, guilty as charged.
So, Uttam Dey, when I talk tech, it’s sure for technical analysis because I’m a chartist for like 44 years. You mean technology stocks. And when I talked about defense and concern about a high-risk market, I mean doing so within a portfolio mix. You mean defending national security and people in nations, right? So highlight some of the themes of the stocks that you are covering in these areas and why you think investors should be paying more attention.
UD: Yeah, I think you made this point when you started out the podcast and you said, if I remember correctly, you said, “Defense is underrated.” I think that that’s one of the key things that a lot of investors just ignore sometimes when a lot of the money moves to the crowded trades that Amrita was pointing to when she was talking about summarizing her overview about tech so far.
Yeah, and I feel like we should just take a step back first and just see where we are in this world at the current moment. I think in terms of technology innovation, we’re at the farthest point of our times in our lives that we are with all of the AI innovation that’s going on right now.
But yet, we have to stand where we are standing at this point. We’re looking at a few headwinds that are really forming. One is inflation is not backing down. That’s putting pressure on the Fed to keep rates high. And then you have geopolitical conflicts that just does not, that’s – it’s not making the Fed’s job easier so far, or for – either for the Fed or for anyone else, really.
So despite all of these strides in innovation, prices are remaining high, global trust is eroding, and that’s creating this constant flux of consistent uncertainty for longer periods of time. So while tech still remains a growth story, that trade has become crowded like lots of us have already seen.
I write about tech. I still see there’s – there are areas of growth there. But in addition to that, I’m bullish on alternative assets, gold, silver, Bitcoin, and then defense, which you had said is quite underrated, and I believe that defense is underrated. So when it comes to tech, mid- to long-term, I have that kind of a view, but Bitcoin, gold, defense, long-term, long-term bullish.
RI: So let me ask you, bottom line in tech alternatives, which is Bitcoin, et cetera, and defense, three areas. What is the top name and why? And it doesn’t mean it has to be the one you like the most. It’s the one you think is the most intriguing for one reason or another.
UD: If I had to start just with tech, there’s going to be some overlap with, I guess, defense and cybersecurity.
RI: Sure.
UD: I feel like Zscaler (ZS) and Palantir (PLTR), these are two really good names that you can – that investors get exposure to technology, at the same time to cybersecurity and defense in, I feel like cybersecurity is kind of an emerging area in defense, which we’re seeing online adversaries propping up so many – so many of them are coming up on the horizon. And cybersecurity exposure gives us – gives investors that that real growth advantage out there. So that’s one in technology.
If I’m just talking about core defense stocks, and then in that case, I would probably go with – you can go with some names like the big four, we hold RTX Corp. (RTX).
RI: Well, I’m sorry, just for the listeners, who are the big four?
UD: For the listeners, okay, so RTX, Lockheed Martin (LMT), General Dynamics (GD), Northrop (NOC), I think this is the big four in defense.
So we say – investors can look at that as well. There are some headwinds that I feel like are formed there as well. So you need to be a little picky out there, but RTX, General Dynamics, great picks out there.
And then you also have emerging defense tech. You can see all of the trends that are forming in defense with the war that’s moving towards drones and drones technology and unmanned systems. So there’s this company called, AeroVironment (AVAV). They manufacture lots of drones and I think they’re a great pick as well.
And finally with Bitcoin, I feel like I’ve written about (IBIT), that’s BlackRock’s Bitcoin ETF, as well as Fidelity’s Bitcoin ETF. That’s (FBTC).
RI: Now why those two? I mean, I do a lot of ETF writing, Seeking Alpha and elsewhere. And wow, have we ever seen a parade of media attention like we have for those ETFs. And the assets are flooding in kind of going back to what just about everybody has said at some point in this discussion that the firehose of buying pressure, or selling pressure, depending on which part of the market you’re looking in, seems to be much more important almost than what it is you’re buying or selling, which to me as a technician, and this is for another conversation probably one I’ll have with Rena, but that seems to be it.
We’re all talking about how, let’s say, technology, okay, we all know that it’s going to produce some incredible growth. And what we don’t know is how much of that is already priced in and has gotten ahead of itself. So I think that’s the challenge. But when it comes to those two out of, I don’t know, 12, 15, 275, I don’t know how many Bitcoin ETFs are right now. So, why those two? How do they stand out?
UD: Yeah, I think what Bitcoin ETFs have done so far is they’ve allowed investors to get that exposure without the investors really having to climb that technology adoption curve. Because a lot of – if you want to buy Bitcoin, you need to get digital wallets and you need to understand a lot of the cryptographic keys and blah blah blah.
But Bitcoin ETFs allow investors just get that exposure, for example, gold. I’m not going to buy gold bars as such if I need the exposure. I can just – I can buy (GLD), the ETF, and get my exposure. So Bitcoin ETFs so far have just done the job.
Apart from that, what they’ve also done is I feel like Bitcoin ETFs have been this massive global advertisement for Bitcoin in general that has created this buzz and awareness, allowing more money to flow into Bitcoin ETFs.
So if you look at just Black share’s ETF, IBIT; if you look at FBTC, that’s Fidelity, they have got massive inflows so far year-to-date, like you alluded to, like, IBIT has probably 17 billion in inflows, FBTC has 9 billion in inflows.
When you look at that GLD, which is a gold ETF, which is the largest in terms of just assets managed, but that’s on the gold side, that that’s probably got, I think, around 64 billion, 65 billion in assets managed.
Gold, GLD’s ETF has just moved 6 billion in – so far for this year. So I feel like IBIT and FBTC, what they have done is they’ve created a lot of good awareness. And the other thing is they’ve reduced their expense fees. So that has allowed investors to get a cost, like a relatively cheap exposure to Bitcoin.
RI: And the ETF business, to me, so much of it is driven by brand, I mean, so concentrated at the top. In fact, that’s why a lot of my interest has been in relatively undiscovered ETFs.
And that is a perfect segue to Mike Kehoe. You work Undercover, kind of like Detective Elliot Stabler on the TV show I watch with my wife all the time, Law & Order.
What kind of investment police work are you doing these days? And tell us maybe about some guilty and innocent stocks and ETFs, if you will.
MK: Sure, sure. So as the name suggests, much of my time is spent focused on the stocks and funds that I think are unfairly overlooked or ignored by the market, as Rob was mentioning.
And while I’m looking for hidden gems, I do also uncover some guilty stocks and ETFs, as you put it, from time to time, ones that I would argue are fairly ignored.
And I think one stock that comes to mind, which I actually haven’t written about yet, but reported earnings, I think yesterday, that I would put in the guilty category is the food delivery business, Just Eat Takeaway, with the ticker (JET). And this is a business that owns Grubhub here in the U.S.
And since acquiring Grubhub for a little over $7 billion in the midst of the pandemic in June 2021, which, of course, was a time when the food delivery industry was flushed with cash from the public market investors and also VCs as well, JET’s stock price has fallen more than 80% since their acquisition of Grubhub. And the entire company now trades at a market cap of less than $3 billion, which is less than half of what it paid to acquire Grubhub in the first place.
And so I think, in my view, management’s capital allocation missteps, which is namely the acquisition of Grubhub and the proceeding disappointing returns for shareholders really land JET a guilty verdict from me.
On the other hand, there’s an ETF called the Simplify Health Care ETF, which I have written about. The ticker is (PINK). And this – I think, this one definitely falls into the innocent category for me. It’s the first 100% pro-bono ETF focused on the healthcare sector. It donates all its net profits to support the Susan G. Komen Foundation’s fight against breast cancer.
And Michael Taylor serves as the lead portfolio manager of the ETF and brings over two decades of experience managing long/short healthcare equity portfolios at leading hedge funds. And before beginning his investment career, Taylor also spent time as a virologist focused on drug development.
Now, I haven’t talked about my background much, but my background is in originally in investment due diligence and manager selection. And so this one sort of aligns very closely with my background in trying to find some of the best off the run, uncovered investment managers out there. And it’s a fairly short period of time, obviously, since the inception of the ETF, which launched – only launched in October ‘21. So, obviously, take the returns with a grain of salt.
But since then, PINK has generated attractive, absolute, and relative returns and has outperformed both its benchmark, which is the MSCI USA IMI Health Care Index, as well as the S&P 500 over that period. So that maybe gives you one example of a guilty, guilty stock and then what I think is an innocent, innocent overlooked ETF.
RI: Yeah. Yeah, that’s interesting. I mean, I do a lot of ETF writing, as I mentioned, and this past Monday was Jackie Robinson Day in Major League Baseball, where all the players wear his now retired #42. And it’s a special day every year.
And so I kind of wrote a commemorative article in honor of Jackie Robinson’s legacy. And I tried to find funds that had a mission beyond just investing money. And actually, PINK was one of, I think, three that I highlighted in the article.
So I’m glad you brought it up and yeah, I think that gives us some insight into, I mean, along with the country stuff that Emma has been talking about, there’s a lot more to ETFs than (SPY) and (QQQ).
So before we finish up, I would like to spend a couple of minutes doing what I call all swim, everybody in the pool. And so basically, anybody who has a question either based on what somebody else said, if it’s something that you just want to add as kind of a closing thought, go ahead, but we’ve got, I don’t know, probably five minutes left here.
So why don’t we use that time to just kind of make it a very controlled and somewhat orchestrated free for all. How about that? Who would like to go first? All right, go ahead. Uttam has raised his hand.
UD: All right. I think my question’s for Emma. I do follow a few countries. I do love that whole proposition of allocating capital outside of the U.S., which I still feel is crowded at the moment. It just helps allocating capital outside. What’s like the one or two metrics that you look at when you’re trying to pick the right countries when you’re investing?
EJ: Oh, that’s hard. One or two. I mean, I’m looking at valuations quite a bit. So I think forward price-to-earnings and price-to-book values are sort of a bit of a guidepost for now, just given how expensive the U.S. market is. And so I think going back to the Taiwan example there, it’s just, I think, it’s like a 66% tech heavy ETF that’s trading at a 20x forward earnings.
And when you compare that to QQQ or another, even the S&P 500, it’s pretty favorable for essentially a tech ETF. And so I would say that’s just what’s capturing my interest at the moment, but obviously inflation data and interest rates within the country, GDP growth, et cetera, et cetera, it’s sort of my tiering at the moment, but it’s really contingent on sort of what’s under the hood.
So, I would have different expectations around valuation multiples based on the sector allocations within the fund, et cetera. So it’s a bit mealy-mouthed, but that’s all to say, you’re sort of just trying to contextualize everything within the given environment. So yeah, I hope that’s helpful.
RI: Yeah, it seems like everybody’s scouring the U.S. market for this stock or that stock, it’s kind of off the radar and selling at a deep discount when you can buy large cap established companies that their only drawback maybe in the eyes of some investors, maybe not intentionally, is that they’re not based in the U.S.?
EJ: Yeah.
RI: So not bad. Not bad. Great. Who’s got another? We’ve got one or two more we can get in here. And you don’t want me asking the questions. All right. I’m going to ask the questions.
So, Mike, what – how do you define a stock as undiscovered? Because my guess is every time you write an article for Seeking Alpha, I mean, it’s such a diverse and large audience that you’re bound to write about almost anything. Like I’m amazed, sometimes I write about something like, oh, nobody’s going to care about this, oh, 20 comments. It’s like, wow, wow, I struck a gusher, okay?
So what is your definition so people know what it is they’re getting when they look at The Undercover Investor?
MK: Yeah, it’s a great question. I wouldn’t say that I have a hard and fast definition necessarily. I don’t want to sort of be overly prescriptive there. But I will say it’s probably rare that I write about something in the S&P 500. I think, Rob, to your point, there are more stocks than just those included in the S&P 500, right?
And so, and stocks that have performed quite well sort of under the radar. I wrote about a stock called (TPL) recently, which I think is sort of a nice play on some of the changes in the macro environment that we’ve been discussing here today, and is what I think is a beneficiary of some really long-term structural trends with respect to the energy transition and increased developments in the Permian Basin.
And so that’s just one example of a stock that has quite a bit of a following, I think, on Seeking Alpha, but is not an S&P 500 stock and not one that is maybe in everyone’s portfolios, but certainly one that people seem to care about. I think it’s probably got the most comments on that that I have on anything else I’ve have written about.
RI: Yeah. TPL is Texas Pacific Land, correct?
MK: Yes. Texas Pacific Land Corporation. It recently converted from a trust to a corporation. And so there was slight name change there, but keeps the ticker TPL.
RI: Great, great. Okay. Any other golden nuggets doesn’t have to be about gold. Although I do remember that Amrita actually, you know what, I’m going to ask Amrita, because why not? So do you have, I mean, you talked about gold in general.
What about gold miners? Because to me, there are at least three levels of gold. There’s the metal, GLD, (IAU), et cetera. Then there’s the miners and then there’s the junior miners, same idea, higher risk reward. Anything that you’ve looked at in that realm, either an ETF form or in stock form, or are you really more focused on the metal?
AR: Sure. I think it’s a great question. I am primarily focused on the actual metal, GLD, because I understand it from a macroeconomic perspective. So I can actually, like, predict its future outcomes based on a fundamental analysis.
I haven’t done as much work in miners, though I – from a high level analysis of companies like such as Barrick Gold (GOLD) and others – other miners, I do believe that if gold starts to go up in price, the actual underlying metal, these companies will also benefit from a profit, from a reacceleration in their profit cycles. These companies are well-capitalized at the same time, but I wouldn’t – I don’t have the expertise at the moment to make a buy or a sell or any kind of recommendation because I haven’t actually done a full valuation on it.
RI: Got it. And that’s what I like about this next gen group, all four of you and many, many others on Seeking Alpha. You are very careful about just going and saying, well, this looks okay, that looks okay.
I mean, again, I’m a technician, so I always want to get the fundamental part right and narrow down to a watch list. And then from there, it’s all about price. But in this case, the deep dives that you’re doing are so well appreciated.
Before we finish up, does anybody else have, let’s say, a name that you are working on to maybe tease the audience a bit? It may or may not be out by the time this publishes, but if there’s anything else that you think is very much on your radar, maybe you don’t have a conclusion yet, but we’ll see it on Seeking Alpha soon.
AR: I can go first. I’m actually – I believe that one of my latest posts is just on the way to getting published. It was actually a request from one of the editors on Seeking Alpha, Rick, who had asked me to do some of the key trends to watch out for in the Q1 earnings for software stocks particularly.
So I’m actually looking for – so in that – in this post I have not just focused on one company but across multiple companies in the software space from infrastructure and SaaS, companies like Microsoft (MSFT), ServiceNows (NOW), (IBM)s, DataDogs (DDOG). And over there, I’m looking at some of the key trends when it comes to, once again, AI roadmaps – AI product roadmaps, platformizations as trends to understand how to actually assess forward guidance moving forward.
So I’m excited for that post coming out. It’s probably out already, I don’t know. But yeah, I’m looking forward to that.
RI: Okay, great. Yeah, they’re quick over there. All right. Last call. Anybody?
MK: I’ll go quickly. One I might write about soon is Kinsale Capital Group (KNSL), which is a specialty insurance company and continues on my theme of insurance that I’ve been on lately. I recently wrote about Brown & Brown (BRO), another large insurance broker, and I’ll figure – continue that theme a little bit there.
EJ: Just going to say South Korea. So (EWY), that’s the iShares South Korea product. Again, just in continuation of sort of tech abroad.
UD: Yeah, I just had a couple of tickers. I think there’s been a lot of questions that have come in about Snowflake (SNOW). That’s the data platform company. So I’ll be writing about that soon. And then also IBM will be out with its earnings. So I’ll be writing about IBM. That’s an interesting company, which is just turning around its business.
RI: Well, I will definitely be watching for that one, because I’m a Dow file. I’m a big fan of the Dow and, look, a lot of those stocks look not so great technically, but they are fundamental powerhouses and they are adaptive. So good, good. All right. Everybody, watch for that.
Well, that is all from us for now. I encourage you to follow these four outstanding fresh faces on the Seeking Alpha platform, that would be Amrita Roy, Uttam Dey, Emma Johnston from The Country Investor, Mike Kehoe from The Undercover Investor, and I’m Rob Isbitts from Sungarden Investment Publishing.
Thanks for listening.