Episode summary
Still Searching For Buffett (FvF Ep. 185)
Facts vs Feelings
· · Hosts: Ryan Detrick, Sonu Varghese
Summary
The hosts argue that stocks can keep making new highs even when sentiment is sour because earnings, profit margins, and nominal growth remain strong. They point to the S&P 500 hitting its 10th all-time high of the year, forward profit margins reaching a record 15.2%, and S&P 500 forward earnings rising sharply from the start of the year. They also note that the bull market from the October 2022 lows is up 100%, but they say history does not require a bull market to end just because it has doubled.
They connect that strength to an inflationary-growth backdrop: real GDP may come in weak, but nominal GDP and corporate revenues are still growing, and that supports profits. The hosts also discuss oil, saying WTI has moved back near $100 and Brent has climbed as the Strait of Hormuz situation remains unresolved, while bond yields have edged higher too.
On policy, they say the Fed is likely to hold rates steady, even as trimmed mean PCE is being used to justify eventual cuts. They think the market is pricing in fewer cuts, which pressures gold in the short run. Still, they describe gold as being in a long-term secular bull market, just stretched after a huge run and vulnerable to consolidation.
Key takeaways
- The host says the S&P 500 is up 100% from the October 12, 2022 lows, and history suggests bull markets can continue after that milestone.
- The hosts say forward 12-month S&P 500 earnings are up about 10% from the start of the year, with profit margins at a record 15.2%.
- They argue the market is being supported by nominal growth, even if real GDP growth is weak or below trend.
- The hosts expect the Fed to hold rates steady, while Kevin Walsh leans on trimmed mean PCE to argue for cuts.
- They view gold as still secularly bullish, but short-term stretched because real rates are rising and rate-cut expectations have faded.
Notable quotes
“the market's at all-time highs. But at the same time, today especially, I think there's a realization that, you know, I was joking about this to you earlier”
“Profit margins are going up and to the right. 15.2% forward-looking profit margins. That's the highest ever we've seen”
“Every additional day this straight is closed. every additional day oil is not flowing, more barrels are lost, right”
How the episode opens
Welcome to the Facts Versus Feelings podcast. I'm your host, Ryan Dietrich, and I'm joined by my co-host, Sonar Geese. Cutting through the noise each week with Ryan Dietrich, chief market strategist, and Sonar Geese, chief macro strategist.
taking out the boring and helping investors focus on what really matters. Live from Omaha Sonu, episode 185 of Facts Versus Feelings. Still searching for Buffett.
We've already done it, so you're going have to wait. But we have something special coming into the podcast. What do we do?
What did we just do without giving it away? Of course.
Well, we were searching for somebody. Well, well, I guess we're searching for Buffett because that's in the title. — That's in the title. — But I should say howdy because we are at our producers studio. — Yes, we are. I don't know where. What do you call this area?
Omaha. Downtown. — Just down. Okay. I thought it had like a specific name, but — Old Market. I guess you can tell the Old Market.
We'll call this the Old Market area of downtown Omaha. Pod Pony. They've been our producer for a while now.
Uh we're in their studio. It's it's awesome. So it's it's a neat opportunity.
But I know Sony, you and I have a plane. At least I have a plane to catch. Maybe you don't have a plane to catch.
I have a plane to catch. So we need to get into it. But at the end of this, we will go to the McDonald's that Warren Buffett goes to all the time as we are still searching.
And if longtime listeners, this podcast now, we've done this before probably g two years ago, three years ago.
I think it was three year three and a half years ago.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- secular bull market
- equities all-time highs
- oil and wti
- consumer sentiment vs retail sales
- fed outlook and pce
Companies and tickers mentioned
- MCD
- Carson Group
- McDonald's
Watch the episode
Watch “Still Searching For Buffett (FvF Ep. 185)” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Facts vs Feelings, this episode and its artwork belong to Carson Investment Research. Octagon is not affiliated with the show; this page is an independent summary.
