저자: TomLee · 외국인
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Tom Lee는 S&P500이 15배 forward PE로 비싸지 않고 엔비디아 FCF가 크게 늘었으니 버블이 아니며, 연준이 2024년 금리 인하를 할 수밖에 없어 강세장 초입이라고 주장. Tom Nash는 Taylor rule로 금리 인하 필요성을 지지하고 Cisco 대비 엔비디아 PE가 낮다고 봄. 다만 조정(3회 5% 조정 등)이 불가피하니 한꺼번에 매수하지 말고 달러코스트에버리지 권장.
다듬은 글
So, Tom Lee just went on TV and dropped a massive bombshell. Check it out. I hear people talk about the market being expensive, but outside of the fangs, it's trading at 15 times forward. I mean, that's never been an expensive multiple. It's just people look at the price appreciation of the market and and and because they may not have participation, think it's a bubble.
Stocks rise rapidly when either estimates change or they they want to reprice the future growth. What's interesting is Nvidia's free cash flow was 7 billion a a year ago. It's now close to a 50 billion run rate. So, it's it's gone up by you know, seven times and the stock price hasn't risen by that much.
If the Fed doesn't cut, I I think it would pose quite a lot of risk for the stock market. Um I don't think the Fed's going to hesitate just because the stock market's risen or the ISM's have turned up. You know, the Fed's policy rate of close to 5 and 1/2% is the highest policy rate in the world for any developed country.
Look at the US 10-year, it's at almost 4 and 1/2%. Germany's 10-year yield is 2.6%. I I think that the bond market itself is telling us that uh the Fed is overly restrictive right now. So, as you can see, Tom Lee was asked a one trillion dollar question, which is are we in a bubble, Tom? Is this the beginning of the new dot com crash?
Have we hit the top? Is Nvidia overvalued? All the questions every single investor out there is curious about right now. And what he gave is three simple arguments to why we're not. Why this is not a bubble, why Nvidia is not currently overvalued, and why the market is just starting out. It's not the end of the cycle.
In fact, it is the beginning. Those three answers are very very simple. Number one, stocks are not objectively expensive right now. If you look at the fundamentals, if you look at the multiples, you'll find out that the stock market is not currently expensive. Number two, concerns of bubble because of Nvidia are completely unjustified because when you look under the hood of Nvidia and similar companies, you'll find out great fundamentals, great profit margins, and great revenue growth that goes along with the massive spike in price, not just hype.
And number three is that the Federal Reserve, which completely decides where we headed from here, will have no choice but to lower rates in 2024 because of the lowering inflation and the fact that we're currently sitting in the highest interest rates in the Western world. The combination of these three arguments convinced Tom Lee that we're in the beginning of the bull cycle, not at the end.
Now, what I'm going to do in this video is I'm going to give you my two cents because this is what you're here for. I'm going to confront Tom Lee's arguments with reality and we're going to find out if what Tom Lee is saying is accurate and if it holds up versus the data. Now, the bull market is going strong right now.
We have already done 70% of the annual return, average annual return, for the S&P 500 in just two out of 12 months. That's a bull cycle. There's no way to deny it. But, the question is whether this bull cycle means we just hit the top or this is just the beginning of the new bull cycle we're currently entering to.
And that's a hard question because, look, if you're an ant and you're currently making a way through a football field, there's no way for you to know where you are. Every single piece of grass looks like a tall building. You don't know where you are. You can kind of guess, but not really. But, if you're the same ant and you're sitting in the bleachers, you can see exactly where the field ends and where it begins, which is exactly what I want to do in this video, give you the overview look.
I do agree with Tom Lee that the monetary policy by the Federal Reserve is going to have a huge impact on this whole thing, no doubt. And even though we are currently in a bullish cycle, if the Federal Reserve decides to screw with the market expectations, essentially deciding to not reduce rates in 2024, that expectation is going to come back and bite every single investor up the butt because it will mean that stocks will have to be repriced to no rate cuts in 2024.
I also agree with Tom Lee that the Federal Reserve will have to reduce rates this year. Why? Well, look, he's right. At 5 and 1/2% interest, which is where we are right now, and about 3% inflation, it just doesn't add up. According to a very, very simplified version of the Taylor rule, which is the rule we use to determine the proper interest rates for a certain amount of inflation, we're currently looking at about 4% interest, which is required for a 3% inflation.
So, this is what we should have. We're currently 1 and 1/2% above it, which means that if inflation keeps coming down slowly, the Federal Reserve will, as Tom Lee said, have no choice but to cut rates in 2024. Whether that happens in May or June or July, it doesn't really matter. Now, if the Federal Reserve decides to screw this party and basically throw a monkey wrench into this whole thing by staying over hawkish, yes, there's going to be pain, but if you haven't invested in the right kind of company, companies that have massive demand, massive cash flow, lots of cash on the sideline, and not a lot of debt, companies like Tesla, like Palantir, like Nvidia, then you'll be fine anyways.
But, in this video, we're trying to figure out where we are in the cycle, not how to pick a company that's good for high rate environment. Now, let's talk about the next argument of Tom Lee, which is that companies are not objectively expensive right now. Now, look, if you look at the dot-com bubble, you'll find out that a company like Cisco, which was the Nvidia of the time, based on some Twitter arguments, sorry, X arguments, well, it used to be priced in at 200 PE at the peak.
If you look at Nvidia right now, it's at 70 PE. The forward PE of Nvidia, which is the one you should be looking at, is 40. So, 40 versus 200, it doesn't seem like Nvidia is anywhere close to the level of hype that Cisco used to generate in the 2000s. But, of course, some people would not let facts confuse them.
Again, if you look at other metrics like the fact that we have $6 trillion dollars cash on the sideline by a lot of disappointed investors that have missed this run-up and are waiting for every pullback opportunity to buy a little bit more. That's why you've seen the couple of pullbacks we had got closed super quick.
These guys are sitting in the bushes waiting to jump. The minute we have a little pullback, every little gap like that's going to be filled super quick. And it's going to take a while to fill up that $6 trillion on the sideline. That's going to keep it coming a lot longer. Now, if you listen to a guy like Gene Munster who was on TV a few days ago, he thinks that the AI revolution is a 99 out of a 100 innovation cycle.
If I think about the scale of how transformative this is, if we put electricity at 100, I'd put AI at 90, I would put the internet at 50, and the smartphone at 30. I think it's that big of a deal. Now, just to give you some proportions, the invention of electricity was 100 as you would expect, but the invention of the internet was 50 out of 100.
So, Gene Munster is saying that this AI innovation cycle is actually twice as more powerful as the invention of the internet. And if you going to go in history, you'll find out that, you know, the internet cycle gave people 2,000% on the S&P 500 in 30 years. That's not bad. If this thing is double that, I mean, you can do your own math.
Now, look, there's no dot-com bubble here. There's no doubt in my mind about that. I agree with Tom Lee 100%. If you look at Nvidia, if you look at the other companies are playing in that space, the fundamentals are insanely strong. The dot-com bubble companies had nothing but hot air, but promises, by hype, hope, the future.
It's the future, bro. These companies like Palantir, like Tesla, like Nvidia are printing money, creating actual business models that work, massive amounts of growth, massive amounts of margins. And the crazy part about it, the demand for all this stuff is just the beginning. It's just heating up. The reality is we have an almost flat demand curve, a 90-degree angle.
Whatever Nvidia can put out, people want to buy. Whatever Palantir wants to put out, people want to buy. The AI cycle is driven by massive amounts of demand and the capacity to produce it by the hardware and the infrastructure side. So, I don't see the dot-com bubble in what I'm seeing right now in this innovation cycle and I have to agree with Tom Lee on this 100%.
But, what does scare me the most about this whole thing is how investors will perceive this because someone may hear me and think, "Well, Tom, you're that excited. Oh my god, this is just a beginning. We have to pile into this market and blow everything right now on Nvidia, on the S&P 500, on Tesla, on Palantir." No, I think that's a bad idea.
Because, look, at the end of the day, the market never goes up in a 45° angle. You're going to have corrections, especially once you had a 2-month run-up like we had, there's bound to be a correction. This thing will correct. It's inevitable. In every good year the S&P 500 has, it has three 5% corrections.
That's massive for a stock with a three beta, that's a 50% drop three times a year. And once a year, a 10% drop for the entire market, which can be a 30% drop for a company like Palantir. So, it's going to fluctuate. It's going to correct. It's not going to go in a straight line up. If you just pile in right now after a huge run-up, you're not going to get to dollar cost average into weakness, which is I think is the right strategy.
It's the better strategy. If you just dollar cost average, which is a fancy word to just keep buying the stocks and the index that you believe in, well, what happens is that when the stock goes up, you keep buying. But, when the stock drops, you buy a little bit more. That way, in 10 years, you look and your cost base is very, very close to the bottom without timing the market at all.
It's just a question of time, patience, and discipline. That's it. Now, we teach these things on our Patreon Academy. Tom's Academy, $35 per month. We're not the cheapest, we're not the most expensive, but I think we give the most value. If you want to join, we have a few spots left. patreon.com/tomnash.
Now, you don't have to pay me anything to join my Discord, discord.gg/tomnash. 7,000 members have joined in the past few weeks. We'd love to have you there to talk shop, to talk about Palantir, Tesla, Nvidia, AI, all the good stuff. It's absolutely free to join and get yourself a one-week free of stock MVP.
stock-mvp.com is software that's going to allow you to run your own modeling, your own intrinsic value, to think for yourself instead of sticking stock tips from mainstream media. I'll see you next month.
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