Steve Weiss recently shared his investment strategy, highlighting his purchases of stocks from companies like Netflix, Meta, Taiwan Semiconductor, Nvidia, Leidos, and Goldman Sachs, while expressing caution about the current market conditions. He emphasized the importance of investing in undervalued equities over cash, given inflation and potential economic risks, and projected a possible market correction ahead.
In a recent discussion, Steve Weiss shared his investment strategy, highlighting his recent purchases of stocks from notable companies such as Netflix, Meta, Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia, Leidos, and Goldman Sachs. Despite expressing a cautious outlook on the market, Weiss emphasized the importance of investing in equities, particularly in companies that have been undervalued or hit hard in recent times. He noted that while cash may seem like a safe option, it is ultimately a depreciating asset due to inflation, making equities a more attractive choice.
Weiss elaborated on his rationale for investing in Goldman Sachs, mentioning that he had made purchases on multiple occasions leading up to the discussion. He believes that the current market conditions, including inflation and the potential for rising interest rates, necessitate a focus on equities rather than cash. He also discussed Taiwan Semiconductor, pointing out its valuation at 14 times earnings and the geopolitical risks associated with China, particularly regarding rare earth materials that are crucial for various industries.
When discussing Netflix, Weiss acknowledged its appeal but expressed more caution regarding Meta and Nvidia. He indicated that while he holds a core position in these companies, he views them as trades rather than long-term investments at this time. Weiss mentioned that he has been maintaining a significant cash position, approximately 75%, since Inauguration Day, which has allowed him to navigate market volatility effectively.
The conversation also touched on the broader market environment, with Weiss suggesting that the market is currently overvalued at 20 times earnings. He projected that the S&P 500 could trade between 4000 to 4500, indicating a potential correction ahead. Weiss referenced a note from Jan Hatzius, which highlighted a 45% probability of a recession within the next year, underscoring the uncertainties facing the U.S. economy.
In conclusion, Weiss’s investment strategy reflects a blend of caution and opportunism, as he seeks to capitalize on undervalued stocks while remaining aware of the broader economic risks. His focus on companies like Goldman Sachs and Taiwan Semiconductor illustrates his belief in their long-term potential, despite the current market challenges. Overall, Weiss’s approach emphasizes the importance of careful asset allocation and the need to adapt to changing market conditions.