What Everything Money said in this video:
- Market Breadthpositive for stocksAlthough the S&P 500 is near a record high, 134 of the 500 largest U.S. companies have fallen at least 40% from their highs, some down 70% to 80%. The host believes that somewhere in this list of beaten-down stocks there could be great businesses that the market is getting wrong, meaning hidden bargains. Therefore he is bullish on the opportunities among these oversold stocks.Source
- Bonds & Ratesneutrallong-termDiscussing mortgage rates, the host says he does not believe a recovery requires lower rates; people just need to accept higher rates. He notes that buyers currently resist paying 7.5% because they previously paid 3%, but eventually incomes will rise and if rates around 7% to 7.5% persist, people will become used to that level. Therefore his stance on rates is neutral, expecting rates to potentially stay around current levels and be accepted.Source
- LENbullishlong-termLennar, a major U.S. homebuilder, is down about 60%. The host disagrees with the bear case, arguing that rates do not need to fall because buyers will eventually accept 7% to 7.5% mortgage rates as incomes rise. America still needs more homes, the company is buying back shares consistently, and Berkshire Hathaway has aggressively added to its stake. If the business normalizes, profits could rebound strongly, and the stock looks very cheap versus its five-year average earnings and free cash flow. Therefore the host is bullish on LEN.Source
- FICObullishlong-termFICO is down about 70% because the government opened the door for a rival credit score in the mortgage market and a large lender already announced it is switching, plus FICO is cutting 15% of its workforce. However, the host argues that replacing the credit score baked into an entire industry is slow, risky, and complicated. FICO remains trusted and deeply wired into lending, and even with competition its high margins mean it could lower price slightly and still make a lot of money. If its moat holds up at least partly, the stock may have fallen too far. Analysts expect profit growth, and the host's own ten-year analysis shows a middle intrinsic value of about $1,021, so he is bullish on FICO.Source