YouSaid · the spoken record

Tom Lee

lines on the record: 41
first: 2024-06-24
most recent: 2024-06-24
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“In their late 30s. In hedge fund, most people retire because they made a lot of money or they don't survive, which means that the lookback of institutional knowledge isn't growing over time. It's the same. They have 10 years of experience. So today, most people don't have necessarily real-time knowledge of GFC that are actually managing money. So that means the pandemic is influencing how people view markets disproportionately without appreciating the historical backdrop, which is something I'm continuing to observe.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“There's things that have reinforced some things I always wondered about. One is I think as much as people say they're objective and they only look at things objectively, they always have a bias. And I think that bias since COVID has been that we are in a state of emergency. There's too much debt. There's still a virus out there now AI is going to get us. And that is played into how people view stocks and not as objective instruments of shareholder value. The second thing that is true is that there's what I always observed as the youngification of money management, which is let's take the top 20 largest hedge funds and the top 20 largest, I don't know, active managers. Well, when we look at the average age of a fund manager, I don't know, they're probably in their late 30s. If you go back 10 years, they're also the same age.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I haven't updated the numbers recently, so I can speak to it from. Think three or four years ago when we first Publish that number, it's roughly a 20% annual price appreciation. Now, earnings growth would be 12 to 15% of that total. So then you have 5% a year PE expansion. Now, can PE expand at 5% a year? I think one thing to keep in mind is COVID proved to us that businesses are a lot more resilient than we realized. So why should we assign the same PE to them that we assigned to them prior to this knowing that if you shut down the global economy, jack up unemployment, 20% have huge supply chain disruptions and yet companies could manage earnings. I think they deserve a lot more credit. So I think the multiple can compound at a higher rate than 5%.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Pricing off Bitcoin, letting people lend off Bitcoin or micropayments around Bitcoin, or settle things on the blockchain, that's what's happening. So I can't give you a single use case that will explain the growth in wallets, but we know that institutional adoption is growing. I mean, I think it was a huge deal that BlackRock has gotten into Bitcoin because it pretty much invalidates the idea that this is just a bunch of people in their basements playing with, you know, digital money.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think it sounds like we're describing currency because dollar adoption probably looked that way, right? I mean, not everybody accepted dollars in the beginning, but more people accepted dollars. And then as more people accepted, they started to use it. I think in that way the history of currencies could explain how Bitcoin can grow because over time as Bitcoin is more widely held, you can start to innovate around it, whether it's”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“The 14 years of his existence, not a single entry on the Bitcoin ledger is fraudulent. In that same period of time, 6% of all bank ledger activity has considered suspicious by the FDIC. But today, if you look at any time interval and say how much of the price move is explained by wallet change and activity per wallet, it's still over 80%. So to me, Bitcoin's price in the future will be depend on how many people further adopt it and whether activity on the network will grow. We're confident both will take place and that's why you can get some really high exponential price levels from here. I know folks like Kathy would say it's in the 2 million. Believe it or not, if you go out into far enough timeframe, let's say five years and you grow the number while it's at a linear rate, you can get in the millions for Bitcoin.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Bitcoin would be 25,000 by 2022. So it was really kind of maths that Bitcoin, even if you don't understand it, and I think it's an incredible technology, right? It's a decentralized database so secure it hasn't been hacked.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, Bitcoin is unlike other asset classes because there is a cooperative value. You know, the people who contribute to the network benefit from it. And that's different than... Other asset class. When we first wrote about Bitcoins in 2017, and Bitcoin was around 1,000 at the time, we published a white paper that said, even if you don't really believe in blockchain and the security of the network, we had pointed out at the time that just two variables explained over 80% of the price move of Bitcoin, which is the number of active wallets and the activity per wallet. And at the time, we made a simple projection. We said that in five years, so by 2022, if the number of wallets went up by five years, 70% and activity per wallet went up by 40%.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“That's why I think as a company, we pride ourselves. We are in conversations with our clients. We have many clients that we're in constant contact with, but it does represent a meaningful percentage of professionally managed money. We have a very real-time way to measure sentiment.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Most sentiment indicators are not reliable because most people don't take the time to fill them out. At the extremes, they're quite useful, like the AAII, I think, is really useful. But if you look at surveys, they're not that reliable because the response rate's terrible. I mean, look at the labor surveys, right? Isn't the BLS, isn't the response rate like in the 40s now?”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Many still don't feel October 2022 was a complete bottom because markets have since risen while the Fed has stayed tight. Most people cannot sleep at night with that notion. And they want to see how stocks react to the first Fed cut. And as you know, how many people tell you, oh, stocks are going to fall as soon as the Fed starts cutting? Because many people say that I'm probably in the camp that markets rally on the first cut.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, in wireless, I did call many tops and stocks and had many fundamental shorts. So there is, of course, the key anchoring is are the price levels disconnected from a justifiable fundamental reality. I mean, I don't think so. I think if we have PEs of 100 for a mega cap stock, maybe that's Second, of course, is sentiment because when everybody is bullish, then one cannot Be convinced there's upside because a lot of the best cases would be priced in, we at FunStrat don't find most of our clients are bullish. Most of them are skeptics because”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. So maybe it's starting. I wouldn't consider that a late. I would never consider firms like Ko2 or 0.72 as late cycle signals.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“That has been a change now. If you look at the prequin database, there's more privately held companies than publicly listed. But every company needs an exit. So there is going to be an IPO cycle, or there should be a merger cycle. Or there should be huge amounts of venture money pouring into this where allocators are fighting over themselves to allocate. I don't see any of that today. I think there's a lot of skepticism that AI has a lot of hype.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Was at a time when many people in the markets were famously making $30,000 stocks when they made $10 million in a month. I mean, there were many people I was working with that were realizing trades like that. The second... Is when analysts have to suddenly shift discount rates to a level that removes all risk. So the CELEX, for instance, you had to apply a 5% Cost of money, and you assumed everybody was paying market rate for fiber. I mean, it was, that was not possible, but that's you had to fudge it. The third is capital markets. There was so much investment banking activity. No investment banking in IPOs right now. I mean, it's a paucity of it. So I don't think you could say there's a bubble even in the next two years because there aren't tons of AI IPOs. There was so much IPO activity. I think it was. The numbers were staggering.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, I can cite many. I'm not citing them in the order of importance The first is I remembered when investors suddenly said our price targets weren't adequate. So I remember putting a buy rating on a stock and it had 25% upside and they're like, Tom, I can make that in a week.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of our price targets seemed really crazy when we did wireless. I remember I upgraded, you can timestamp it. I should show you Alamosa Holdings at 21 cents and it went to $22. Priced target was not 30 cents, it was $12 at the time. And we upgraded Western Wireless at $1.74. Our price target was $25 and it ended up going to $40. So I think we tried to look at a normalized situation and in a normalized world. This is a normal SP cycle following demographics. I could provide a chart later. SP should be potentially 15,000 by the end of the decade. Yeah, so to me, that's the more as you move into longer timeframes, that's probably where I think we're moving towards.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Down well, do you know this is a lifelong debate? Because for 30 years, I covered wireless docks and had price targets. And our salespeople would always say, no one cares about your price target. But then the first thing in the meeting people, what do you think, where do you think this thing goes? So they always care about the price target. I don't really value people's price targets, which is 10% above where you are now. Because to me, that's just staying in the middle of the lane. And you can't make clients' money. So whenever we did stock research, we always had to build a base case on what we think could happen and then discount it at what we think is a reasonable rate.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“And we'd put like an 18 multiple on that. And that's got you to 5200. 2025 earnings no longer look like 270. It looks more like 285. And as I was citing, as interest rates moved up, the PE should be higher. So let's say 20 is a more appropriate PE multiple or even 21. Then you get into the 5,800-ish level. But I think the open question is really, if you're in mid-June and December 31, It's a line up, or is there a Pullback and then align up. And I would probably, this is not evidence-based, just an opinion. I don't see why it would be straight up.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, where can we go? Well, at the The first week of December 2023, we had said Target for 2024 was 5200. Which at the time was almost 20%. Now our 5200 is low because we're above that level. We haven't changed our target because our practice is typically to do it at the midyear. So we're two weeks away”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a hundred 37 components. Another way to look at it is what percentage of the basket of CPI equal weight is below their long-term year-over-year growth rate. So take each component and just say where does it sit. Now at 55%. So in the long term average is 50%. So more than 500%. 55% of CPI components are below their long-term average. It's considered controlled when it's 50%.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Both one year and five year inflation expectations are below the long term average. So consumers and businesses and their perception don't think there's inflation. CPI is elevated, but as you guys know and talked about, and many economists point out, it's really due to two components that are kind of lagging, right? One's shelter and one is auto insurance. And you know the Median CPI. Inflation rate right now is 1.4% year over year. It's long term average is 16%. Everything except for housing and auto insurance is below trend.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“I think inflation. If we looked at historically how people looked at inflation, whether it's the surveys or ISMs, inflation's under control. Because, for instance, the ISM services manufacturing, the prices paid component is below the long-term average right now. So at 57, people think 57 means price going up. That's not true. It's averaged like 58. Since inception. So actually, price trends are below where they have been. I think people aren't using history to understand where we are now. And if you look at UMISH surveys”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it speaks to a lot of things. One is the market is starved for cash. There's $6 trillion of cash on the sidelines. Finra margin debt is like 20% below where it was in October 2021. So there isn't a lot of money sloshing in the stock market. I know it's weird because we're at record highs. Yeah. So if there is money actively trading, it's just buying the high volume sectors, which is tech. From a rates perspective, and I kind of mentioned it before, like the groups that are hurt by tight policy have really been sucking wind. So I think if monetary policy eases or people are more convinced of it, then breadth expansion is going to be pretty fierce later this year.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, again, I can cite some history and then maybe provide some context Since 1935, when you look at the relationship between the tenure yield and forward PE, it is not linear. It is a dynamic relationship. And between 4 and 7%, it is positively correlated. So when interest rates go up PE rises, logically it sort of makes sense because you're seeing it now. When you have higher rates, it's barriers to entry. So the existing companies make more money and companies earn money on their cash. So, do you unlever cubies are actually, you know, for Apple, it's like $6, $7, $8 in earnings, right? Some big number. Actually, with splits, it's lower. And between four and five percent, the median Ford PE has been $18.5. And 48% of the time, it's actually above 20.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, there's a lot of parallels, but there are some differences. You know, keep in mind Cisco sold a hundred dollar box, NVIDIA selling at $50,000 chip. The moat around that is much, much greater. I also think to contextualize this, we need to look at the global economy. If we're turning labor cost into silicon, then which countries are really the primary suppliers of technology? The US by a country mile is the only supplier. So the US is essentially exporting technology now. And that's different because internet was more democratized. People just put up towers and lead fiber. You can't create your own version of an NVIDIA chip. You have to buy from NVIDIA. So I think that Tech will probably be 40-50% of the global stock market weight.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“The global labor shortage by the end of this, just by the end of this decade is close to 40 million worker equivalents. And that's $3 trillion of wages. returning labor cost into silicon or into automation of which we know today 80% is hardware or silicon so does that mean whoever's supplying the chips might have a two trillion revenue probably and right now the largest share of that would go to a company like Nvidia so if NVIDIA is 100 billion in revenues now you know what does by the end of the second is it's 800 billion a trillion dollar revenue company and then what should we discount that rate at i'd say there's probably a lot of up”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“People thought it was a yuppy toy and it was going to be only for people who make $75,000 a year. But what I learned as a wireless analyst was Teenagers and young kids, especially in Europe, were using cell phones. So I used a vintage model saying that if 100% of like teenagers have a cell phone, by the time they're 60, the penetration rate should be whatever it is. That's like AI, the adoption rate for AI is staggering, but the use case is important because there's a labor shortage. So to me, I think it's very likely we're underestimating how much revenue all these companies will make. I can give you some simple math. Yeah.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“There are a lot of parallels. When I started doing wireless, there were 34 million cell phones. Today there's 7 billion. So it's a hypergrowth industry that grew almost in parallel with internet because without mobile, you wouldn't really have the internet that we have today. In the early stages of that growth, so when you look at penetration, Wall Street always underestimates the importance of the technology. And part of it has to do with, it's a generational lens. Every new technology is adopted by a young cohort, people in their 20s, teens, or even 30s. But most people on Wall Street are in their 40s or 50s. So they're one generation removed. I remembered when our PC analyst at Kidder said, why would you have one computer per household or even more than that? Because they're 2,500. And I know when cell phones first emerge,”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Did a whole piece called The Chapter after Chapter 11 where I looked at over 2,000 publicly listed bankruptcies. I used our Mumbai team, or at the time we call it Mumbai team at JPMorgan, and we went through all these filings and we found that stocks that emerged from bankruptcy do well. So we had a whole strategy around buying bankruptcy stocks. And then JPMorgan asked me at the time if I wanted to become the small cap strategist on top of wireless. So I had two jobs. I eye ranked in both categories. And then in 07, they asked me if I wanted to become the chief equity strategist, which I've been doing ever since. And started Funstrat 2014. So this is our 10th year.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I got into stock research at that time and I was working at the sector I was assigned to was wireless. So the first 14 years of my career arc was as a technology analyst covering the wireless industry. which, again, for my clients, many of which I still have from those days, no, I'm not an Uber bull because there were many times I had sell ratings on stocks, but it's not fun to be telling people to short a stock that they own. That's when they're very angry. And then in the 2000s, wireless was consolidating, and I wanted to find some other things to do. So I started to do some work on bankruptcy stocks because many wireless stocks went bankrupt.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, I've essentially had the same job for my entire post college career. I started off at Kidder Peabody in the early 90s.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think the gold standard is still the debt service ratio, which the Federal Reserve. Puts a lot of time into and employs a lot of economists to build a fair view and the debt service ratio today is still under 10%, which, for instance, before this decade, you'd be in a sort of peak consumer borrowing at the 14 to 16% level. So consumers can, if interest rates don't move, they can borrow 40% more money. I think the cash excess savings is a spurious argument because I don't remember it in my 30 years people saying consumer cycles turn when their excess savings is gone. I mean, that's not really been how the business cycle works.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, if I look at the stock market, I think it is playing out with all the things you just mentioned because the groups that are affected by high and tight monetary policy have really lagged, whether it's the regional banks or industrial multiples are being suppressed. And we know that the spend and actually now some of the synergy coming from AI is driving not only the producers of AI like NVIDIA and some of the software companies, but in many of the companies that are leveraging this for revenue growth. So I think it is playing out. But overall, I think it's on balance, a healthy economy because companies are generating good earnings growth and the labor market has come back into balance and consumers aren't highly levered, which is really the big deal because to me when consumers can't borrow more money because they've borrowed too much, that's really when the economy hit.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“But of course, now coming is a big generational wealth transfer of as much as $80 trillion. The second, of course, is that there is a huge global labor shortage, which has started in 2015 and won't be resolved until 2035. And the two previous instances of global labor shortage resulted in a parabolic movement technology stock, which has been part of our thematic approach. And now we see two other things like energy security and cybersecurity are huge thematic drivers, especially because of AI. And so this grounds our work. We not only use it to judge markets, but we use it to build our granny shots core stock portfolio, which is a thematic portfolio, picks the strongest stocks within each theme. And that has outperformed every year.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, part of our work relies on what we call thematic drivers. One is millennials. So that since 2018, we've talked about how millennials, which is the largest generation, are reshaping the economy, which they are, mainly through fintech and changes in preference”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“We rely on a lot of cross market signal. So to us, the bond market is always smarter than the stock market. That's why they say equities are the land of C students. And the third is, of course, monetary policy is really the driver, so you can't fight the Fed. And then I think the fourth is that thematic approaches surpass cyclical approaches. What does that mean?”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, fundamental to our process is evidence based research. So, you know, at the core, we really try to frame where history could explain where we are today.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“This is actually a textbook rally at the start of this month. We alerted our clients that since 1927, when you look at Started June, but markets were up in the first quarter, but then had a drawdown in April, which is what we had. That happened 11 times, 11 of 11 times, June was a positive month. So May is essentially a recovery month, and then June is the month where markets go back to risk on. The median gain since 1927 is 3.9%, which calculated to 5,500.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'd say so. I think people don't live in those longer time frames in the day to day. People live as if This is a street battle, and the label Uber Bowl is like someone. Well, you know what? He might lead us out, but I don't trust him because we're in a street fight. And so it's generally, I find people saying it more as a cheap show.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that label is not reflective of how I feel about markets. I think that label is generally used by perma bears who've been perma wrong. And it's a cheap shot taken.”
2024-06-24 · Odd Lots · Why Tom Lee Thinks We Could See S&P 15,000 by 2030 · IDENTIFIED FROM THE TRANSCRIPT · source