Transcript

Josh Brown (0:00)

You are so early to the commodity rally.

Michael Batnik (0:02)

Dude, I said gold. 5,000 people thought I was crazy.

Josh Brown (0:04)

No, but even like last summer, commodities had been rallying, but not like this. And they just. They just exploded. Starting the first of the year, it was like a brand new bull market just started for a lot of them.

Michael Batnik (0:17)

And here's the interesting part about commodities, is that historically these bull markets don't just last a few quarters or a few years. They last 10, 20.

Josh Brown (0:24)

Yeah.

Michael Batnik (0:24)

So if you're. If you're betting this is over, then you're betting that this is the shortest commodity super cycle ever.

JC Peretz (0:29)

Who's your boy that did the chart? Y. Is it Alfonso that did the gold to stock chart? And it looks like it might be breaking out.

Michael Batnik (0:36)

Oh, yeah.

JC Peretz (0:37)

You know what I'm talking about.

Michael Batnik (0:38)

Of course.

JC Peretz (0:38)

That's a great chart.

Michael Batnik (0:39)

Gold dow. I think that was Rick. Slick Rick. Okay, we got this. This Lebanese Mexican dude.

Josh Brown (0:45)

Really?

Michael Batnik (0:45)

Slick Rick. He's the man.

Josh Brown (0:47)

He does commodities only or.

Michael Batnik (0:49)

No, he just does everything, dude. He's like overlaying tack with like the Israeli shekel. Like this guy's.

JC Peretz (0:55)

He's a lesbianese Mexican.

Michael Batnik (0:58)

Yeah, they got those. Yeah, Lebanese Mexicans. Yeah.

JC Peretz (1:02)

You got a lot of talented people on your roster.

Summary

The Compound and Friends: "These Are the Stocks to Buy In 2026"

Date: January 16, 2026
Hosts: Josh Brown, Michael Batnick
Guest: JC Peretz

Episode Overview

This lively episode explores which stocks and sectors are best positioned for gains in 2026, with deep-dives into commodities, small caps, international markets, and why trend-following continues to matter. The hosts welcome technical analyst JC Peretz for an energetic roundtable—full of actionable insights, analysis of historical cycles, and a signature blend of irreverence and investing wisdom.

Key Discussion Points and Insights

1. The New Commodity Supercycle

Commodities, especially gold and silver, have exploded since the start of the year—potentially marking the early phase of a new "supercycle."
- Michael Batnik [00:17]: "Historically these bull markets don't just last a few quarters or a few years. They last 10, 20."
- Josh Brown [00:04]: "Starting the first of the year, it was like a brand new bull market just started for a lot of them."
The consensus: it's not too late to ride this trend; if you think the commodity rally is over, "you're betting this is the shortest supercycle ever."

2. Lessons from Blow-Ups: Why Smart People Do Dumb Things

Warren Buffett’s famous anecdote about Long-Term Capital Management (LTCM) sets the stage for risks of overconfidence.
- Buffett Audio Clip [11:19-13:05]:
  - "To make money they didn't have and didn't need, they risked what they did have and did need. And that's foolish."
Recognizing and exploiting both your own behavioral biases and those of others is key to long-term success.
- Michael Batnick [14:03]: "You don't have to be smarter than everybody else, you just have to be slightly less stupid."

3. The Four "Fade Groups"—Who To Bet Against

JC Peretz and the hosts share a tactical framework:

Sell-side analysts—prone to herding and conflicts of interest.
Asset managers (esp. hedge funds)—data shows they’re often wrong at consensus moments, especially on futures positioning.
Journalists—by the time mainstream media highlights a trend or sector, it’s late.
Economists—often wrong because they ignore "what is" (market prices) in favor of "what should be" (models/data).
Michael Batnick [24:28]: "There's a lot of information out there. There's a lot of noise. Focus on these. Do the opposite. Especially when they all agree."

4. The Power of Trends & Breakouts

Strength is not a red flag—most investors miss out because they fear buying at highs.
- Michael Batnik [46:44]: "The best time to buy stocks is when it’s making new highs. We have the data."
- JC Peretz [47:09]: "Asset prices don't oscillate...they're going up, or they're going down, or they're doing nothing."
The myth of “weak market breadth” is debunked; concentration in leaders does not equal danger if participation (breadth) is rising.

5. Small Caps Poised for Rebound

Small caps have been base-building since 2021. Multiple indexes and sectors within small caps (industrials, materials, tech, financials) now show breakouts or major bases that suggest large upside.
- Michael Batnik [56:05]: "You want to walk through it? ...This thing has done nothing since the end of 21."
- JC Peretz [56:19]: “The bigger the base, the higher in space.”
Debate over Russell 2000 (all comers) vs. S&P 600 (earnings requirement) and how profitless companies have driven outperformance in recent runs.

6. International Equities—Breakout at Last

For the first time in over a decade, non-U.S. equities have decisively outperformed U.S. stocks—especially EM ex-China, Europe, and Japan.
- Michael Batnik [39:41]: "Emerging markets EX China up 35%. Emerging markets with China up 34%. All Country World Index X North America up 32%. IFA... over 30%."
The trend may have several years left to run, reflecting long cycles of mean reversion and global synchronization.

7. Bullish Confirmation: Dow Theory & Breadth

Industrials and transports both at all-time highs confirm underlying strength ("Dow Theory"); NYSE Composite also at record highs.
- Josh Brown [44:24]: "Industrials and transports...have never been higher."
The team emphasizes that new highs are historically bullish, not a reason for skepticism.

8. Commodities & Energy—2026’s Opportunity?

Energy (oil, oil services, refiners) now shows the same type of breakout/base as gold before its huge run.
- Michael Batnik [60:43]: "Look at that base, bro. By the way, gold looks just like this before it broke out."
Services (Baker Hughes, Halliburton, Solaris) could be the trade of the year, as few investors own or overweight the sector.

9. Magazine Covers as Contrarian Indicators

Price action regularly reverses after major media covers declare a bubble, crash, or coronation.
- Michael Batnik [35:59]: "The rule of thumb is whenever there's a chart on the cover of the magazine, you buy stocks."
Example: "Beware the Bubble" Economist cover marks more bull fuel, not a peak.

10. Rotation Within Tech ("Mag 7" vs. Semis + Next Gen 100)

Mega cap tech’s relative performance has faded; “next 100” NASDAQ stocks and semiconductors (semis at new highs) now lead.
- Michael Batnik [53:46]: "Practically every stock is going up except those [Mag 7]."

11. Prediction Markets: A Fad, Not a Threat?

Vigorous debate over whether binary prediction markets will ever rival traditional securities markets.
- Michael Batnik [78:04]: "If these prediction markets didn't suck so much...they're nothing. It's an irrelevant penny stock scam."

Notable Quotes & Memorable Moments

Commodities & Behavioral Contrarianism

Michael Batnik [14:03]: "You don't have to be smarter than everybody else, you just have to be slightly less stupid."
Josh Brown [13:05]: "The more arrogant people are about what they think they're good at is one...needless risk, risking what you did have and did need for more."

On Fading Consensus

Batnik [24:28]: "There's a lot of information out there. There's a lot of noise. Focus on these. Do the opposite. Especially when they all agree."

On Buying Highs and Momentum

Michael Batnik [46:44]: "The best time to buy stocks is when it’s making new highs. We have the data, we have the math."
JC Peretz [47:09]: "Asset prices don't oscillate...they're going up, or they're going down, or they're doing nothing."

Humor & Life Advice

Batnik [06:22]: "You provide and you hire people to do all that shit. Don't worry about it...go make money."
Batnik [61:28]: (on oil service stocks) "Allegedly they're in the oil and gas space, but I don't know. Maybe it’s a Ponzi scheme."

Market Wisdom

JC Peretz [47:16]: "If you want to manage a portfolio, you better be comfortable with buying things after they’ve already doubled. If not, you’re not going to last."

Sector & Stock-Specific Highlights

Small Caps — Now developing actionable bases across major sectors. Both small-cap indexes (Russell 2000, S&P 600) and industries (industrials, tech, financials, energy) highlighted.
Commodities — Silver, gold, oil, energy services (Solaris, Baker Hughes, Halliburton) called out for current and future upside.
International Stocks — Clear outperformance seen in EM ex-China, Europe, Japan; the trend may be persistent.
Tech & Mega Cap Rotation — The semiconductors and "next-gen" mid-cap tech (QQQJ) show strength as the "Mag 7" pause.
Financials — U.S. large caps (Morgan Stanley, Goldman Sachs) remain in uptrends; European and Japanese financials also strong.

Timestamps for Key Segments

Commodity Rally, Gold & Silver: [00:00–01:00]
Day Trading Stories (Kenny): [01:06–02:56]
Buffett LTCM Clip & Behavioral Lessons: [11:19–14:55]
"Fade Groups": [19:23–24:35]
Equal-Weight vs. Cap-Weighted Indexes: [26:08–28:32]
Consumer Discretionary & Sentiment: [29:07–30:16]
Magazine Covers as Contrarian Signals: [35:43–37:31]
International Outperformance: [39:40–43:07]
Small Cap Breakouts & Sectors: [55:09–60:25]
Energy & Oil Services: [60:25–61:44]
US Financials & Technicals: [68:15–69:59]
Prediction Markets Debate: [77:08–82:14]

Conclusion & Actionable Takeaways

Stay With the Trend: Don’t overthink breakouts and all-time highs; momentum is real.
Commodities and Energy Are Early in New Cycles: Ongoing strength signals opportunity, not exhaustion.
Small Caps & International Stocks: After years of underperformance, they may lead the next phase.
Avoid Consensus Traps: Be wary of analyst, media, and economist groupthink.
Watch for Rotations: Tech leadership is shifting beneath the surface; watch semis, “Next Gen 100.”
Don’t Bet Against the Market When It’s Strong: Highs are to be bought, not faded.

For charts and further reading, visit trendlabs.com and review the Chart Summit 2026 presentations.

JC Peretz: “We want to be buying stocks, we want to be buying breakouts…I think [2026] could be a K-shaped market: there will be huge winners, huge losers, and some that just trade flat.” [66:00]

End of summary