Stock Talk - NVIDIA - How is This Possible - History Repeats?

Episode Date: December 3, 2024

Welcome, and thank you for tuning in! I hope you had a wonderful Thanksgiving and are enjoying the holiday season. In this video, I share insights into current market trends and reflect on historical patterns that may provide valuable context for today’s investing environment.   Key Highlights:   Bull Market Trends: An overview of the ongoing bull market for equities, which has persisted for over a decade, and its potential implications for investors.   Market Parallels: A look at striking similarities between 2016 and 2024 market performance, particularly in stocks like NVIDIA (NVDA) and sectors leading the market today.   Historical Patterns in Financial Markets: Exploring how past behaviors often repeat and why understanding these patterns can help investors make more informed decisions.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy — with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free consultation: https://click2retire.com/Connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Investors, first off, happy post- Thanksgiving and Black Friday shopping day. Hopefully you had a great Thanksgiving and you've benefited from the ongoing bowl market and are in the economic position to splurge a little for yourself and others over the upcoming holiday weeks. If not, my thoughts and prayers go out to you and your family during the holidays. I'm going to keep this one short, but I hope you pass it on to others and take a moment to subscribe to my channel to help me get above a thousand subscriber base before 2025 begins. investors, we're in a bull market for equities. We've been in a bull market at least since 2011,

securely and cyclically since October 2022 low, as well as the October 2023 pivot hire from around 4150 on the S&P 500. If you're watching and following doomers like Robert Prector, Harry Dent, Robert Kiyosaki, Jeremy Grantham, and a long list of retired hedge fund billionaires, you've likely missed most, if not all of the move higher in U.S. stocks

the last two to 15 years, especially in the case of chronically wrong Harry Dent and Robert Prector. Hopefully, it hasn't permanently damaged your financial plan. Investors give us a call before year end, and hopefully one of our Oak Harvest advisors can help you decide if another path is better for you and your money. So quickly, as I said, investors, it's a bowl market. And the funny thing is that in 2024, that is particularly since late summer, it's been following a script we've seen relatively recently. What year was that? Yep, 2016, the same year that the then long-shot Donald Trump shocked the world and won his first term as our president. Investors pretty much ever since Donald Trump was re-elected, many economists and commentators

on the financial news networks like Bloomberg and CNBC have spent countless hours trying to convince their viewers that Trump 2.0 won't be like Trump 1.0 for the economy and four-year wealth. Well, investors, so far, it appears that as if they were pretty much wrong in 2016 and 17, and they've been wrong year-to-date in 2024. My question to investors is, why do so many people continue to put somewhat's faith and energy into listening to or following people

who've been wrong in their views for years on the economy and markets, if not decades? Particularly when it comes to their finances and their investments. In my world, for now, until otherwise proven wrong, Trump 2.0 will be much, if not, close to the same as Trump 1.0. Investors, history does repeat in the financial markets time and time again. Humans are creatures of habit. Patterns do repeat. And as I like to say, it's the same

people managing the same money, doing the same things time and time again. Why would you expect something different from their outcome? I'll give you a quick few examples that I recently stumbled upon. First and foremost is Nvidia, which is currently the most valuable company in the world. Turn on the TV and you'll hear many tell you that Nvidia's stock performance is unprecedented in 2024. Yes, it's true for a company this size. It is unprecedented. But take a look at Nvidia's chart year to date. Year to date, the stock was up about 186% into this writing Thanksgiving week post-Trump 2.0 win. That's a hell of a

move. Now take a look at the chart of Nvidia back in 2016. Back through Thanksgiving week post-Trump 1.0 win. Yes, investors, your eyes aren't deceiving you. Here to date in 2016, Nvidia stock was up a little over 184% in 2016 into the exact same post-Trump 1.0 election into Thanksgiving weekend. I mean, how is that possible? When was the exact same massive return to the day over 184%? I mean, ask yourself over the weekend. Take a look at the two charts overlaid on top of each other for 2016 and 2024, and then an extension of NVIDIA's chart in 2017. Investors, this is not a projection for what's to come for NVIDIA in 2025, but given what Jensen has said historically versus how their business is performed,

it would certainly be something to keep an eye on and keep it in the back of your mind in 2025. While those AI bubble calls prove prescient, or have they been one year and counting too early. Time and time again, when I do this overlay, particularly of the second half of 2016 versus the second half of 2024, I get near the same results, at least in trend, if not both trend and level, for so many different asset classes and financial instruments. Bitcoin, the dollar, interest rates, both nominal, real interest rates, and yes, inflation component, too. Many commodities look the same. Stocks and sectors that were working and leading in the fourth quarter of 2016, seen, yep, working and leading again in the fourth quarter of 2024.

Stocks that were weak and missing earnings, as we say in our trading desks blowing up, blowing up again the last few weeks this year. Even outside of technology, patterns and histories continued to seem to be repeating almost to the day. Just last week, industrial and agricultural giant John Deere reported their third calendar quarter and took down their estimates for sales for 2025, which was largely expected. However, the financial press was out in mass with negative comments in tone. But what happened to John Deere's stock?

Yep, it gapped higher, closing the week almost 10 and a half percent higher in two days at a new all-time high. Now, overlay the chart of John Deere from 2016 onto 2024. And what do you see? Take a look at that overlay, along with the extension of John Deere in 2017. Yes, investors, almost to the exact day in 2016, John Deere's stock, did the exact same thing on their third quarter 2016 earnings report. It gapped to a new all-time high in the back of investors looking out beyond the valley to a hopeful turn in their business in the second half of 2017.

I mean, is history repeating? Are you bearish in fighting the tide? Are you listening to Doomers still? Just hoping that one day they'll be right so you can tell the world I told you so. If so, you are likely investing based on emotion, which is rarely good thing to. do. I know I do it at times too, and it almost never works out for me. Investors, against the near decade-long, Dumer calls from Jeremy Grantham, Harry Dent, Robert Prector, Jim Grant, and a myriad of retired billionaire hedge fund managers that come on CNBC almost monthly to scare viewers.

We are in a bull market for equities in the U.S. The group of doomers that I've been calling out for my time here at Oak Harvest has been wrong for years, if not decades now. Exactly why is now the tipping point that they'll suddenly be right. If they've been suddenly right now, given how wrong they've been for years, isn't it just luck? Calling tops is hard. You have to be right in both price and time, not just once, but twice. Calling a top or a crash in October of 2022, or saying your managing risk below lines in the sand of 416 in October, 2003 isn't considered early in the real world of managing money. It's being wrong. Being wrong is part of this business that we all deal with. Not admitting it is the bigger mistake unless you're just selling fear and subscriptions or

newsletters. Investors, until proven otherwise, my suggestion to you, trade or invest similarly to Trump 1.0 for at least the early stages of Trump 2.0. Why? Because it's the same people doing the same things and therefore the outcomes tend to be very similar. Look no further than the performance of Nvidia year to date in 2016, first, 2024. I mean, how is that possible? Let's set a 1% variance in total return over two 11 month periods up over 184%. I mean, think about that one over the weekend. So for myself and the whole team here at Old Carbass, I hope you had a great Thanksgiving yesterday and have a great Black Friday, get out there and shop and help the American economy.