SPEAKER 01 :
He’s been seen on CNBC, the Fox News Channel, and the Fox Business Channel. His articles can be found on MarketWatch, Seeking Alpha, TheStreet.com, and many other places. He’s the author of the weekly Best Stocks Now newsletter and the inventor of the Best Stocks Now app. He’s president of Gunderson Capital Management. Here is professional money manager Bill Gunderson.
SPEAKER 04 :
And welcome to the Friday post Memorial Day weekend, May 22nd edition of the Best Docs Now show with professional money manager Bill Gunderson. And we are home, headed home today from Minnesota. I’m carrying covering for Barry today. And we’ve got quite a day. Well, we’ve got a decent day going on in the market right now. I’m not going to complain. The Dow is up 329 points right now on hopes for a peace deal in Iran, which seems to be pretty elusive. The NASDAQ is up 61 points right now. The NASDAQ is at 26,358. Another good day, Dell is the big winner today on the market and several of the AI-related stocks. The S&P is up 41 basis points or 30 points. The S&P is clear up to 7,476. It’s now hit my target price for this year, but I think it goes higher. Gold is down 60 basis points. Oil is under 100. It’s at 97. That’s a good thing. And interest rates right now are at 4.58% or too high. Kevin Warsh will be sworn in later today as our new Fed chairman. Hopefully, he’ll be a little bit better at his job than the previous Fed chairman. So welcome to today’s Best Stocks Now show with professional money manager, Bill Gunderson, and I’m here alone today flying solo. I guess I have been all week, really. I don’t remember. Where did Barry go? Has anybody seen Barry? I don’t know. We’ve been meeting with folks every single day in Minnetonka, Minnesota. I’ve got to say that’s probably going to be our new gathering place a couple of times a year because we had a lot of fun. We had a full house for the workshop on Tuesday. The workshop was recorded. I don’t know in what form it’s going to go out in, snippets, the whole thing. I don’t know the answer to that question. That’s in the hands of the people above me, and we’ll see what happens. But it was a fantastic workshop. We talked about a lot. And next time, we may have an opening act. Before the workshop, we have a subscriber that has a famous bluegrass band. Wouldn’t that be fun to have a little hoedown before the workshop? I’ve always wanted to learn how to stomp. I don’t know how to do that with the boots. They stomp. It looks fun. It’s almost like tap dancing, but it’s done with these crazy boots that look kind of like hillbilly boots or whatever. I don’t know how Billy would look in hillbilly boots, but it sounds fun. Well, we had a fairly good day in the markets yesterday. The Dow was up a half a percent. The NASDAQ was up. But the memory stocks, remember the memory stocks? I hope you remember them and the Alamo. They were flying again yesterday. I traveled yesterday, and I sat next to a hedge fund manager that works for – he’s not a manager. He actually works for a big hedge fund – A very well-known, successful hedge fund. And he was giving me some insights into the hedge fund industry right now. And I took away some very, very interesting insight. I told him what I do. And I told him about our performance since the beginning of the year, and his jaw dropped. Hey, I’m just telling you. I just speak truth here. His jaw dropped. He says that’s a better record than most hedge fund managers on Wall Street. So, hey, for what it’s worth, you decide for yourself. I also had someone ask me about one of the losers in our portfolios. What’s about this one? Come on. I said, well, when I can pick 100% winners, I’m going to retire and never worry about managing money again. There’s always going to be a few thorns in your side, I guess. But you know what? Some of those thorns in your side, I was getting really nervous about Vistra. the nuclear stock out of Texas. And all of a sudden, I stuck with it. I was patient. And all of a sudden, that one’s turning around. So there is something to be said for patience also when you own what I consider to be best stocks now. Many would disagree with me that they’re best stocks now. That is open to interpretation. I think Bob Dylan’s the greatest songwriter of all time, and I’m sure others would disagree. They might say, oh, I don’t know, Donny Osmond or someone else like that. Who knows what they would say? Or, you know, Glen Campbell or whatever. But anyways, sometimes beauty is in the eye of the beholder. Well, Hopes of a U.S.-Iran Breakthrough. President Donald Trump will host the swearing-in of Kevin Warsh as the Federal Reserve Chair at the White House on Friday. Investors also preparing for consumer sentiment and leading indicator data later in the day. And I haven’t seen that come across yet. I haven’t seen that come across yet, that data. But I do know that this past week, it was a pretty good week for economic data. We didn’t have any inflation reports. We didn’t have any big job reports, but on Thursday we had the every Thursday layoff report. And it was very, very favorable. And as I’ve said many times, trouble in the economy will more than likely start showing up in those initial jobless claims before it shows up anywhere else. And as of now, it looks like clear sailing ahead in the jobs market because the initial jobless claims came in very, very soft. Okay, Shell. Shell is a Dutch company, by the way. I want to say it was a California company at one time. We had a lot of Shell stations in California. We had a lot of Arco stations in California. But Shell is now a Dutch company, and they’re in trouble with the Dutch Supreme Court. You’ve got to understand that Europe has a gigantic energy problem. They have made some bad policy over the years, and now they’re scrambling to get energy. And you know what? That gives the U.S. a big, big heads up, a big, big advantage as it relates to data centers. and to all of this AI infrastructure because we have a very good energy infrastructure. Shell and environmental groups are set for a groundbreaking showdown this Friday as the Dutch Supreme Court rules on whether corporations have a legal mandate They cut their carbon footprints. I got a hunch I know how that one’s going to turn out. I really do. I think the Supreme Court will say yes. The Netherlands branch of Friends of the Earth, Milieu Defensie, will try to convince the country’s Supreme Court that the London-based, oh, it’s London-based, but it has Dutch ties. Iowa Giant has a duty to reduce its CO2 carbon emissions. How about cattle? Do they have a legal duty to reduce their carbon emissions into the atmosphere to 45% below? Where is that in the Constitution? You’ve got to reduce CO2 emissions to 45% below 2019 levels by 2030. Shell, however, disagrees, arguing that lawmakers and not courts should have the power to set limits on a company. Why is this important today, this hearing? This is the first time in the world that a country’s highest court will consider a company’s civil law emissions reduction obligation with regards to dangerous climate change. Winnie Osorin, spokesman for Melieu Defensee, said as per reports, she said the court’s ruling will be decisively guiding. And if Melieu Defensee prevails, it could have a ripple effect far beyond the Netherlands. And of course, you know, you had the riots there with the farmers. not being able to plant their crops because of carbon emissions from the fertilizer that they use. And you’ve had a lot of issues and problems that are in the Netherlands. Shell is one of Europe’s largest carbon emitters. Last year, they dismissed the lawsuit filed by the Peruvian farmer seeking to hold the utilities, oh, this is a different one, over in the Dutch, responsible for climate-related damages. Separately, Total Energy, which is France, is facing a lawsuit in Paris that seeks to halt fossil fuel exploration and production projects with a decision still pending. I sat next to the airplane yesterday with a man who works for a hedge fund. We had a really good conversation. He was very impressed by what I did. He says, not only do you have the results, but you’ve got a very peculiar kind of personality. I guess you could put it that way. Here’s what he told me. First, I want to read this story and then I’ll give you a little bit of insight. J.P. Morgan is seeking to offload risk tied to more than $4 billion in loans to private equity funds. as the U.S. bank looks to reduce exposure to an industry facing a prolonged slowdown in exits and rising concerns over AI-related disruption. The Financial Times reported Friday, citing people familiar with the matter. Well, they want to get rid of that risk that they have. And I asked him, I said, why have we seen this explosion in private, not equity, that’s different. Equity is ownership of companies. I said, why have we seen this explosion in private debt? He says, that’s very simple to answer, Mr. Gunderson. He said, there’s a limited number of companies out there that are worthy of private equity investments. And they’re all fighting over these companies uh for the private equity investment but he said there’s an unlimited amount of private equity debt out there available the market share who doesn’t want a loan i mean come on and so these firms because left they charge big fees on this private equity okay they’re charging big fees And when there’s only so much private equity to go around, he said there’s almost an unlimited amount of private debt to go around. And I said to him, I said, aren’t these firms placing their own self-interest above their clients’ self-interest that are being put into this stuff? He said, well, what do you think they do on Wall Street? Of course they are. They’re going to make massive fees on this private credit that they’re going to turn around and sell to the public. And there’s basically, the market is unlimited for it. And that’s the reason why you’ve seen this explosion in the private debt markets. I would not touch private debt with a 100-foot pole. That’s just me. It’s illiquid. And didn’t we learn our lessons from the mortgage-backed loans, which also was an almost unlimited market opportunity for these people that invest in this stuff? They went out and bought all of that mortgage debt, packaged it up, repackaged it, and sold it to the public and the sovereign wealth funds and the countries all over the world, and it all blew up. Private debt At least, you know, the mortgages were backed by homes. The only problem is most of those homes didn’t have any equity in them. Most of them were underwater. We had that big wave of short sales in 2009, 2008. And private debt, it’s way below, in my book, mortgages as far as risk goes. So that’s the reason why you’re seeing this massive move into private credit. Private credit, I guess, is the word they’re using. And that’s the reason why you’re seeing all of this risk building in the financial system. And you see JP Morgan getting out of the way before it blows up and makes a big mess. in the economy at some point in time. It just seems we never learn. The other one that I never supported at all, and I’ve seen the consequences of what they did to individual investors, was with the real estate investment trusts that were non-traded. They called them non-traded REITs. one of my major competitors in California. He went after the non-traded REITs. He loaded up his buckets with non-traded REITs, and eventually he lost his license. I think he got it back. I think it went to the Supreme Court, the poor guy. But I said, I don’t like non-traded REITs. There’s plenty of traded REITs around. Why do we need non-traded REITs? Well, because the Private equity invented another product that they could make big fees on and turn around and sell to you. And that’s how the game works. And there are so many private equity funds today now that are all chasing after companies to buy or chasing after loans to loan. How about this number? IT, IT cap X swells to a record share of S&P 500 spending as the AI build-out accelerates. And that’s another discussion I had with this guy on the plane. I talk to anybody, you know, just about maybe I talk too much. Some people say I talk too much. But I learn a lot from people that I talk to. I’m kind of a sponge that soaks up information and knowledge. And many times I get insight that I had never thought of before. But I said to this guy who worked for the private equity fund, I said, you know, this year, it’s like there’s this little patch in the ocean of Wall Street that is producing. And it’s a very narrow area of the market. I’ve seen this before. This is But this has probably been one of the biggest feeding frenzies in one little small area of the market that I’ve ever witnessed. And I think the reason is, is because IT CapEx swells to record share of S&P 500 spending as AI build-out accelerates. So this massive amount of money, this is according to my friend Torsten Slocke over at Apollo. He’s their chief economist. I like him. Torsten’s got to be from the same island I’m from, Gundersen. Maybe our ancestors came over on the same boat. I don’t know. But I think he’s a pretty wise man. He says that this is exactly what I said. This money that is being thrown at these private companies with the AI adoption, and we’re talking about Anthropic, we’re talking about SpaceX, obviously. We’re talking about the one that is led by good old Sam Altman, OpenAI. They’re turning around with these billions of dollars that are being thrown at, and they lump it into a group called IT, IT CapEx. CapEx means spending on IT infrastructure. and it’s those companies that are on the receiving end of this IT infrastructure spending, that’s where the frothy area of a giant ocean is.
SPEAKER 03 :
This is Bill Gunderson. Thank you for tuning in to today’s Best Stocks Now, Best Inverse Funds Now show. I put several hours of research in during the wee hours of the morning each day to bring you the very best cutting-edge stories that I can. To get two free weeks of my newsletter, go to GundersonCapital.com. To talk to us about our fee-based only money management services, call us at 855-611-BEST. Now, back to the second half of the show.
SPEAKER 04 :
There’s something in the air, and it is the Best Stocks Now show, which flows through the airwaves every day across the nation. This great nation, which will celebrate Memorial Day on Monday. And I certainly do honor. I was just lucky by a simple twist of fate. I was not born in a year that people had to go to war. I just was lucky that way. My father was not lucky that way. He joined the Navy at the age of 18 and went to Groton, Connecticut for submarine training and spent the next four years in the South Pacific Navy. hunting down Japanese enemies that wanted to destroy and take over our country. He didn’t like to talk about it a lot, but I saw pictures of them ashore in Australia on leave. That looked like a wild party. He said one guy, he was about five foot two, little guy, you know, probably from Minnetonka, Minnesota or something like that. He goes into town in Perth, Perth, Australia. He comes back with a battleship tattooed on his chest. I don’t know if he ever regretted that or if his wife liked it or if he ever got a wife. Not sure about that. But it looked to me like they might have liked a little bit of that Australian beer when they went ashore. And I don’t know what my dad meant by it, but he said, see, the Australian women are awful friendly, too. So, hey, maybe I’ve got some half-brothers running around Perth. I don’t know. And then my brother, who is five years older than me, when we had the draft for the Vietnam War, he was drawn in the lottery. He was number 17 out of 365. He would have gone to the… to the Vietnam War for sure. Whether he would have come back or not, who knows? But he was a pole vaulter in high school. He was a very good pole vaulter. My father was a pole vaulter too. My father was pole vaulting like 14, 15 feet way back when, like, you know, in the 1940s. Now they’re over 20 feet, obviously. But my brother John, he pole vaulted. He still holds the record at Point Loma High School for pole vaulting. But one day, my brother, in a simple twist of fate, as Bob Dylan would say, he missed the pit when he went over the crossbar. He was a 14, 15-foot pole vaulter, and he fell outside the pit. He broke his wrist, and arthritis set in to his wrist, and that kept him out of the Vietnam War. So you know what? Sometimes God has different plans for us. And I would also say that very few of the submariners came back. The attrition rate was very high. And somehow my father made it back. I overcame two big obstacles in being born on this earth. Number one, my father was one of the few submariners to come back from the war. I’m obviously a boomer. Which has a bad connotation to a lot of people out there. It shouldn’t because we understand and we appreciate our freedom that we have today and how hard we had to fight to keep it and how much attack it’s always going to be under attack. There’s another wave of attack on our freedom here in the United States of America that we need to be worried about. Freedom of religion, freedom of speech. All of these kinds of things, there are evil forces that want to take that away from us. So be on guard going forward about these attacks that are coming. I truly believe they’re coming. But having said that, I overcame that obstacle to make it to this earth. My mother could not carry babies to full term. She lost, I think, four or five. And then she got pregnant with me. And at the eighth month or so, there was no heartbeat. It was over. She was going to lose her ninth baby or sixth baby. I don’t know. It was a lot. I know it was more than five. And she received the blessing that she would deliver the baby. And guess what? Here I am today, you know, 69 years later on the radio. I somehow got that heartbeat back. Probably a little brain damage in there in the womb. But I made it through that, and I’m still kicking and going stronger than ever. SpaceX is planning a 10 gigawatt solar factory near Austin. Man, that’ll cook a few briskets. That’ll smoke a few briskets down there in Austin at, what, Terry Black’s, Franklin Barbecue, the home of brisket. But why is he doing this? This is part of his vision. He’s planning to build a massive 10 gigawatt solar… He’s going to manufacture solar panels for what? His ambition to power artificial intelligence data centers in space. So his plan is underway. In space, and I’ve talked to several engineers about this, even people from NASA, about his ambitions. And they just see a lot of… logistical issues that need to be overcome to make this work but must that’s his vision these data centers would have unlimited access to the sun because when you’re in space it’s not filtered through the atmosphere and it would definitely power these data centers number one number two the cooling okay obviously it’s very cool up there at that altitude but But the logistics of it all seem very, very difficult. So he’s going to go on the warpath building solar panels as fast as he can to fulfill his ambition. And, you know, I read an article yesterday that through all of this, the IPO of SpaceX, he could become our first trillionaire. Trillionaire. Well, I mean, do they check his credit? Does his Amex card get denied? I don’t know. Like the rest of us, who knows? He’ll be a trillionaire, the very first trillionaire. Another thing I noticed yesterday, there is an ETF out there that currently 23% of this ETF owns SpaceX, right? So if you want exposure to SpaceX, which I don’t, but if you want it, God bless you, you can buy this ETF, XOVR. It’s an ETF that boosted its SpaceX position to 23% of the fund with a $35 million buy. So not only are you getting SpaceX, but you’re getting other funds. private equities. I was looking at the performance of XOVR, which is a private, let’s see the name of it. It’s got a kind of a funny name. It’s a private public kind of intersection of companies. And I’m looking at the five-year performance of it is really meager, 5.9% per year. The market’s 15.8%. And over the last 12 months, even with this big exposure to SpaceX, this ETF is up 7.4%, while the S&P is up 25.4%. And for that reason, we wrote an article about why we don’t like the SpaceX, we would not be investors in the SpaceX IPO. And believe it or not, Seeking Alpha would not print the article. They would not print the article. Because they didn’t like the fact that we had issues with the SpaceX IPO. I find that an attack on freedom of speech, to be honest with you. But I have to abide by their rules. They’re the boss. And we put about eight or nine hours worth of research into that article. And it was rejected by Seeking Alpha. And they said, just forget it. We’re not going to print a negative article about SpaceX. Whatever. Okay, let’s go back. So that’s his vision. And of course, you know, the solar panels, that’s a whole nother story in and of itself. The solar panels were coming from the Uyghur region of China where there’s slave labor. We have video of the camps over there where these people are in slave labor producing these panels. And I remember DECO New Energy, DQ, not Dairy Queen. We saw the Dairy Queen headquarters. We had dinner right next to the Dairy Queen headquarters. I did not have a chili cheese dog. I had a little nicer thing than that. But DQ was one of the hottest stocks in the entire market because they were producing all of the solar panels that the green side of the political spectrum was all excited about. And there was one that came along named Cylindra that decided we’re going to make cylinder tubes like you would see in a fluorescent light, the long tubes, because that’s more effective. It was a massive scam that went belly up. You think you’re Bitcoin safe, huh? You think that it’s safe behind all of those firewalls and the private keys that you need and the encryption? Well, the cryptocurrency industry is bracing for Q Day when quantum computers will be able to break standard public key encryption, posing major risk to Bitcoin and digital finance. Crypto wallets have two keys, a public key that works like an address to send or receive funds and a private key that is like a password for users to access and manage their funds. Advanced quantum computers could one day decrypt private keys, allowing hackers to access crypto wallets. Crypto research forum Glassnode estimated that around 30% of Bitcoin supply may be exposed to quantum risk. Now, there’s a lot of risk. You know, you go outside, there’s a risk of being run over by a garbage truck. There’s all kinds of risk. Now, there’s quantum risk to your crypto wallet. So be on the lookout. Open AI hits $5.7 billion in Q1 revenue. That’s revenue. That’s not earnings. That’s sales. For the quarter, $5.7 billion. Let’s annualize that. Let’s round up. Let’s give them the benefit of the doubt. They do $25 billion a year in sales. And they’re trading at what? $1 trillion? Yes. Do a price-to-sales ratio on that. Divide $1 trillion, divide $25 billion into that, and you’ll see an astronomical price-to-sales ratio. You’ll see that same astronomical price-to-sales ratio for Anthropic, for SpaceX, and for other systems. companies that are on the runway right now for these massive IPOs. I would rather be buying the companies that are on the receiving end of the contracts that these guys are letting than on these big private companies that will soon go public. I have no interest in this ETF that I just mentioned. that you can get 27% of the ETF of SpaceX. If you believe in SpaceX, buy XOVR ETF, and you get exposure to others of these big IPOs that are going to land here at some point in time. Weight loss drugs from Lilly and Novo Nordisk are linked to stalling. You know how many people have written to me and said, oh, you should see what these drugs are doing to people and the risk involved. I’m just saying I haven’t seen it. And I got a hunch that the diet industry is planting a lot of misinformation to scare people away from these. The world’s most popular weight loss and diabetes drugs are linked to a powerful new possible benefit. better outcomes for cancer patients. A suite of four new studies suggest that people taking so-called GLP-1 drugs like Novo Nordisk, Ozempic, and Eli Lilly’s Mongero saw reductions in tumor progression, lower overall chance of death, and less risk of developing Brent’s cancer. It’s a really provocative study that showed in several cancers that people who took these drugs seem to have a lower risk of their cancer returning. There you go. AMD ramps up Taiwan production capacity amid CPU demand surge. I’ll say there’s a CPU demand surge. CPU is not the same as memory chips. CPU are the ones that drive the computers and AMD is the king there. But, you know, we’re having to upgrade our laptops these days to keep up with what’s going on and AI and stay with these fast current laptops. So I think there is a pretty good, oh, you know, trade in demand right now, trading in older models for newer models to handle the speed requirements. Dell is certainly benefiting from this move, and AMD is totally benefiting from this move. And they are working with partners in Taiwan to expand production capacity as stronger-than-expected demand tightens the global CPU market, says CEO Lisa Su. Cousin to Jensen Wang over at NVIDIA. She says the overall CPU market has significantly higher demand than any of us ever predicted a year ago. I would say right now that the CPU market is tight. What does a tight market do? It drives up prices. AMD is able to charge more for their CPUs. Micron is able to charge more for their flash memory. And SK Hynix, oh, Samsung, the strike is over. It was averted. And Wedbush adds CK Hynix to their AI30 list. But the problem is you can’t buy SK Hynix. You can look at a chart of it. It’s HXS, HXSCL. That’s SK Hynix. HSXCL. And you’ll look at that chart and you’ll say, that’s a weird looking chart. It’s because it just doesn’t trade any volume. They are anticipating a U.S. IPO, an ADR at some point, maybe later this year. But in the meantime, it’s a couple, two or three ETFs that have big positions in SK Hynix and Samsung out of South Korea. in those portfolios. I would much rather go that route than the one that has 27% of SpaceX in the portfolio. Well, I’ll be writing the newsletter today. I’d like to get it out so I can have a nice three-day weekend. I’m going to do my best to do that. The newsletter will have the latest earnings estimates, target prices, macro outlook on the market. It will have an changes that we made or didn’t make this past week. It will have all of major charts and my analysis of these charts. It’s a must read every weekend. You can go to Gundersen capital.com to get four free weeks of the newsletter, which also includes access to the best docs now app. And the first four weeks you get the live trading alerts also, which is quite the offer from us. I hear the music. The Sound of Music. This is Bill Gunderson. It’s the Best Docs Now show. Have a great weekend, everybody.
SPEAKER 02 :
This show is not a solicitation to buy or sell any securities. Bill Gunderson or clients of Gunderson Capital Management may have long or short positions in stocks mentioned during the show. Past performance is not indicative of future performance. Gunderson Capital Management is a fee-based registered investment advisory firm. All accounts are held at Charles Schwab. Schwab is a member of SIPC and FINRA.
