Episode summary
The Final Phase of This Bull Market Will Be Massive | Charles Lemonides
Monetary Matters
· · Hosts: George Noble, Jack Farley · Guests: Charles Lemonides
Summary
Charles Lemonides argues that the market is still in the late stages of an 18-year bull run, but not yet in the explosive “liftoff” phase that often marks the final stretch. He says valuations are more fully stretched than before, yet not so extreme that the cycle must end immediately, and he thinks policy makers are still supporting the expansion. In his view, the biggest returns often come before the turn, so investors need to stay involved while remaining alert to the eventual reversal.
His investment approach is to own “growth in value’s clothing”: companies that look cheap on cash flow, book value, or sentiment but have real operating momentum. He points to Micron, Intel, Lyft, Instacart, and Rivian as examples of stocks with upside if the market re-rates them. He also emphasizes that he sizes positions carefully and holds a mix of long and short themes so the portfolio can work across different market regimes.
Lemonides is constructive on energy, especially domestic E&Ps and offshore service names, where he sees attractive replacement-cost valuations and tight supply. At the same time, he is skeptical of richly valued consumer and industrial names such as Casey’s, Walmart, and Caterpillar, and he frames many of his shorts as idiosyncratic valuation bets rather than broad sector calls.
Key takeaways
- Charles Lemonides thinks the market is still in a late-cycle bull phase and has not yet seen the kind of upside “liftoff” that usually precedes a top.
- He prefers “growth in value’s clothing,” citing Micron, Intel, Lyft, Instacart, and Rivian as examples of stocks that can rerate sharply.
- He says his portfolio is built around a dozen or more themes, with core positions around 5% to 7% and diversification used to manage client risk.
- He likes domestic energy producers and offshore service vessels because valuations remain low versus replacement cost and cash-flow potential.
- He is short idiosyncratic names like Texas Pacific Land, Casey’s, Walmart, and Weiss Markets where he sees valuations outrunning fundamentals.
Notable quotes
“Bull markets have massive blowups to the upside before the downside happens”
“what we're trying to do today is build a portfolio of those individual assets that really have some growth elements to them”
“The thing we missed are the refiners and and the and the tankers”
How the episode opens
This market has gone up and to the right without a more than a 25% correction for 18 years. It's sort of silly to think it's going to be 18 years in two weeks instead of 18 years and 6 months or 19 years and two months or 22 years and seven months. And the important thing to consider there is that the best returns are earned in the final years of a bull market.
Bull markets have massive blowups to the upside before the downside happens. And I don't think we've seen that liftoff quite yet in this in this cycle.
This episode is brought to you by Sarma Partners, who manages a return to tangibles ETF, Lens, ticker Lens, the Sarma thematic ETF built for a return to Tangibles. Learn more at sarmayf.com and see the show notes for disclosures. Let's get into it. Welcome to Other People's Money. I'm your host, Maxy, and I am joined today by Charles Lemones, CIO and founder of Value Works LLC. Charles, thank you for joining me today.
Thank you ever so much for having me, Max. — Let's just start with the big picture. I mean, S&P 500 forward earnings at 18, let's call it, historically elevated, but not elevated to what we've seen in other periods of time, other tech bubbles. Are we in a tech bubble? Is the market overvalued?
The market is not necessarily overvalued, but it is an awful lot more fully valued than it once was. I I I think we can talk about the PE um and it's okay. It's a little on the high side, but I think the big bigger picture is that we're in an 18-year bull market. You know, th this market has gone up and to the right without a more than a 25% correction for 18 years.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- late-stage bull market
- valuation and overvaluation
- rates and bonds
- semiconductor earnings
- portfolio shorts
Companies and tickers mentioned
- MU
- INTC
- LYFT
- TPL
- CASY
- ValueWorks LLC
- Sarmaya Partners
- Micron Technology
- Intel
- Lyft
- Instacart
- Texas Pacific Land Trust
- Casey’s General Stores
Watch the episode
Watch “The Final Phase of This Bull Market Will Be Massive | Charles Lemonides” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Monetary Matters, this episode and its artwork belong to Jack Farley. Octagon is not affiliated with the show; this page is an independent summary.
