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- [00:00]
Stephanie Link
I worry a lot about Europe, as you know, I worry a lot about India. There are countries that are not independent on energy. We are in the States. And you know an interesting fact is, you know, as I mentioned, like higher oil prices, higher gasoline prices, it's not good. But the U.S. consumer, only 3% of households budget is gasoline. I started buying actually in the beginning of March to be fair, and just kept on adding and buying the dip and not feeling very smart. But the way I think about it Wilf is, you know, I'm really big on themes and I will say since the March 30 low, the market is up 12%. The S&P, the Nasdaq's up 17% but it's been led by technology, semiconductors, it's led by energy and industrials and those three are all have the same thing in common. They all have the AI food chain. It's really hard to continue to buy the dip when they keep going down. But I feel really strongly about the themes and that's how I can justify and that's part of my process.
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Wilfred Frost
Welcome to the Master Investor Podcast with
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me, Wilfred Frost, where we celebrate and
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learn from the success of the greatest investors, business leaders and politicians in the
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world, giving you, our listeners, the edge.
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The Master Investor Podcast is sponsored by Elseg Interactive Brokers, the World Gold Council and BNY Investments. Please do remember the views expressed in this podcast are for general information purposes only. Nothing in the podcast constitutes a financial promotion, investment advice or a personal recommendation. More on that in the show notes. I am delighted to welcome back to
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the podcast Stephanie Ling, Chief Investment Officer and Portfolio Manager at Hightower Advisors, a US based wealth manager looking after $150 billion in AUM and a regular guest and friend of mine from my CNBC days.
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Steph, it's a joy to see you. A joy to have you back on the Master Investor Podcast.
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Stephanie Link
Thank you, Will. Thanks for inviting me back. It's a pleasure.
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Wilfred Frost
I would refer everyone back to our first episode as well, where we really dove into the Hightower and Stephanie Link investment process and reflected on the huge growth at Hightower to 150 billion AUM of which Steph personally manages $7 billion of Steph.
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Amusingly, this is genuinely not planned.
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As fate would have it, last time you came on the week after we had a very bearish Jeremy Grantham on and this time you've come on a week after we've had a very bearish Jeremy Grantham on and last time you injected a nice contrasting moment of positivity into the outlook.
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Are you going to be doing the same for us this time?
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Stephanie Link
I think so. We actually have been buying into the weakness in the beginning of this year and I have a couple interesting stats for you. So we were talking about last time I was on that, I was buying last year at this time Liberation Day and we're up about 34% since the liberation Day low. But if you go back and you go back to the spring of 2023 when Silicon Valley bank had collapsed and if you had sold, you would have missed 78% return from the lows. If you went back to Covid in the spring of 2020, you'd have missed 198%. And so to me in March when we saw the lows, I thought it was an opportunity. But I'll tell you there's one caveat, Wilf, it's the timing of the war. If this war drags on for three or four more months and not three or four more weeks, that is when I think we might have some problems because I do believe the higher energy prices, higher oil prices, higher everything prices will start to eat into the consumer. As of now it has not. And what I pay the most attention to, and you know this very well just from our relationship, I want to I listen to what the banks have to say because they're at the front line. And last quarter the big six banks talked about the consumer being resilient. And every One of the CEOs was very, very surprised at that. But they remain resilient, they continue to spend. And a lot of the reason is because they have jobs. The labor market has softened, there's no question. But it's not collaps here in the States there's still one job available per one unemployed person. And so I keep close eye on the weekly jobless claims and I smooth it out over a couple of months time just to see where we're at. We're at historically low levels. That continues. So that's something that I'm watching. But we care about the consumer because it's 70% of the economy and the consumer continues to consume on services, which is 75% of consumption. The other interesting points that the banks made was that credit quality continues to be quite good. Delinquencies fell, non charge offs fell, provisions for bad loans fell for the big six. And so I think that's really important. And then the third thing that they all did and said was that they're lending, which we want them to lend because that's going to feed into the economy. So that's the one piece that I feel okay about, but the war and the timing is really going to be. It's a very fragile situation, but the consumer continues to, to do their thing and that's important. The other piece, and I'm sure we'll get into this, is what we talked about last time. The momentum in what I call the AI food chain. So it's AI, we all know Mag7 and how much they're spending on CapEx. $761 billion this year. But it impacts an entire other parts of the economy. Meaning data centers. If you believe in AI, you need more data centers. We only have 11,400 data centers in the world. We have to get that to probably 30,000 by 2030. If you believe that you need an upgraded grid. And we haven't updated the grid in over 50 years. In fact, 75% of the grid is over 25 years old. And then power, we don't have enough power. So we need natural gas, we need coal, we need nuclear, we need renewables. All of this has been a nice impact to the economy. I think it's accounts it could account for 2% growth overall. So these two factors are the reasons why I still feel good now. The AI food chain has nothing to do with the war. So let's just say the consumer does slow down. I think you still have a lot of momentum from what I think is a revolution. And I've talked to many, many companies and on the industrial side that are part of building this stuff out. I've never heard of backlogs in the percentages that they have reported in my 35 years in being in this business, which is why I say this is a revolution and it impacts so many different industries and companies.
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Wilfred Frost
It's really interesting, Stefik, because I think the consumer is significantly de risked. Maybe. We'll talk about government finances in a moment.
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But before we get into a lot
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of what you just said there though, I just want to dwell on your confidence to buy the dip because as I referenced we spoke in July last year you reflected how you'd successfully bought the April 2025 Liberation Day dip. Sounds like certainly in the short term you've been correct to buy the March 2026 Iran war dip, albeit obviously shorter term bounce and smaller scale bounce so far.
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So since then, how do you have
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the confidence to do that? Because that is your classic Warren Buffett buy when others are fearful.
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It's not an easy thing to do.
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Stephanie Link
No. And I didn't time it Perfectly. Of course, I started buying actually in the beginning of March, to be fair, and just kept on adding and buying the dip and not feeling very smart. But the way I think about it, Wilf is, you know, I'm really big on things, themes we just talked about one of the biggest themes in the whole AI food chain. I'm a big believer in. If you believe all the things I just said about AI, you need cybersecurity. And by the way, the cybersecurity stocks act horribly and yet they are going to benefit. I strongly believe, I still believe in the housing cycle. And so that's just another theme. I believe in robotics and automation. We're just starting to hit on that. So I think about kind of big picture and then I think about themes and then I try to find stocks that are based on those themes because I think those themes, at least I believe are like a decade long. And when we do get the opportunities, when stocks do fall, I look at those stocks as opportunities. And of course it's important, very important in terms of where I think earnings are going to be and how they're going to grow. And I will say since the March 30 low, the market is up 12%. The S&P, the Nasdaq's up 17%. But it's been led by technology, semiconductors, it's led by energy and industrials. And those three are all have the same thing in common. They all have the AI food chain. And so those are the areas I have been buying because I believe those are where we're going to see better than expected earnings and higher earnings revisions. It's not easy and honestly it's really hard to continue to buy the dip when they keep going down. But I feel really strongly about the themes and that's how I can justify and that's part of my process.
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Wilfred Frost
So a couple more macro things before we dig into some of those themes and your stocks. And by the way, do a quick review of your stock picks from last time as well. It's a good review for you, so you should be looking forward to it. On the war, I mean, clearly NASDAQ, S&P, as you've said up since the start of the war, all time highs. Oil prices though up 50, 60, 65% on Brent this morning. I mean clearly that can't hold long term. One of those two things has to adjust in the opposite direction.
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And I guess at the start of
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the war people were saying, you know, this is as long as it's weeks, not months, then it's okay for the s and P500 to stay strong.
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I mean, we're into multiple months now pretty much. And I feel like there's a lot of just sort of adjusting the timeline
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in the rhetoric as opposed to fundamentally seeing oil prices come back down to earth yet.
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Stephanie Link
Yeah, I totally agree. Like I say, it does depend on the length of the war for at least the US economy and then also the global economies. I worry a lot about Europe, as you know, I worry a lot about India. There are countries that are very dependent on, in terms of they're not independent on energy. We are in the States. And an interesting fact is, as I mentioned, higher oil prices, higher gasoline prices, it's not good. But the U.S. consumer, only 3% of households, that's their budget, is gasoline. We are far less dependent on gasoline because we have much better fuel efficiencies. We're doing more in terms of EVs and that I imagine will continue going forward. And so as a percentage of the consumer's budget, I don't feel as nervous about. What I worry a little bit more about is it's not just gasoline prices, right? I mean, we hear about helium and we hear about fertilizers, all that. So it's the, the whole entire basket that I just keep my eye on. And again, if this war does go on for a long period of time, we're there, there will be a pinch. But war has nothing to do with the AI food chain. And so if we do see a weak, weaker consumer, that is plausible. Absolutely. And I worry about it. But the AI revolution is here and thriving and we're in the early innings and you have to have exposure to those particular sectors.
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Wilfred Frost
So final macro question that follows from
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the war stuff because I think the sort of besant playbook of trying one last time with a lot of government spending to grow your way out of a big debt problem with a 5 or 6% deficit, the hope was to flood short term issuance and pay lower rates if and when rates came down. Looks like Kevin Walsh will be confirmed this week or soon, either way.
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But doesn't the war make that playbook
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very hard to enact? And do you fear a two, three year period of higher than otherwise rates than expected and given the multiples you see in the market, or is that not a major concern?
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Stephanie Link
I do think you'll see higher rates. I don't think you're going to see a spike to 5% inflation. If I did, then I would be a lot more concerned. But I will give it to you that we are seeing higher than average and higher than what we want in terms of inflation at like 3, 3, 3 and a half percent. Does it get to 4? It's entirely possible. I don't think rates are going to spike higher, but they're going to probably remain elevated. I don't think Warsh is going to be able to cut rates, but yet we're still able to grow 2, 2 and a half percent. We were growing 3% pre war. We are now slower, of course. But if that's why I say if we can have a short war, then maybe we can resume the momentum. One interesting thing is the one big beautiful bill, whether you think it's beautiful or not, is going to be stimulative to by the tune of 80 basis points. So that'll also help the consumer offset higher inflation. In my mind, here's the reason why I think it has to be shorter versus longer the war. We have midterm elections coming up and I just can't imagine that President Trump wants higher gasoline prices at the pump, higher inflation that, believe it or not, pre war he had, that was his victory. I mean, energy prices pre Covid were only up 11% and that was the thing that he could really, you know, tout, if you will, at the elections. I think if, if you have gasoline where it is and you have inflation where it is, I think it's a harder call, which is again why I think it's going to be shorter rather than, than longer. I'm, I'm not saying that we're not going to feel pain even if it is, you know, another month, but if it's another three, four, five months, that's gonna be problematic.
- [15:14]
Wilfred Frost
This episode is sponsored by Interactive Brokers. Building wealth starts with the right broker and Interactive Brokers helps you reach your goals with powerful tools, global market access, low costs and unmatched financial strength. That's why the best informed investors choose IBKR. Learn more at ibkr.com masterinvestor. This episode is brought to you by Elseg, the leading global financial markets infrastructure data and analytics provider. To learn more about how ELSEG connects businesses, investors and markets worldwide, visit elseg.com foreign.
- [16:02]
So let's get into the theme. You've talked a lot and obviously been really on the money about, as you call it, the AI food chain. So it's obviously not just the Geminis, anthropics and OpenAI's of this world, but all the beneficiaries of the huge capex that those companies have triggered Talk to
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me about the software meltdown off the
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back of AI in the last whatever six months or so it's been.
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Are software names the opposite of the AI food chain or are in fact
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they part of it and people slightly missing the point here?
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Stephanie Link
I think there are winners and losers. I think you want to be where there are mission critical software companies that cannot get displaced. I don't think you want to be anywhere near a SaaS company because SaaS companies, they get paid by per seat and therefore they have seen massive recurring revenues over the years and that's why the multiples got to where they got to. Now I think if you're a SaaS company, you actually have to change your business model. And I have no doubt, salesforce.com as an example, I have no doubt that they will figure it out. But I'm not willing to stay around to watch and wait because it's going to take some time. And what I have learned in my career wealth is that when you have a growth stock that becomes a value stock, it takes a really long time because even with the corrections in some of the SaaS companies, they're still trading at 25 times earnings and we just don't know what the growth rate is going to be. And then eventually they'll get a new business model on a per consumption basis is what I'm talking about. But that takes a long time time. So I think you want to be very careful. One of the names that I think has gotten hit hard unnecessarily so because it is mission critical, it's a company called Synopsys. I would even throw Cadence design in there as well. These are mission critical companies that the more complex the AI is in terms of producing chips, the more complex that the chips are, the more they need these design manufacturers and that software. And so to me that's a very interesting space. And yet the stocks go down with all the other software stocks. I think you could pick and choose the ones that you feel comfortable about. I think very strongly about cybersecurity as I mentioned that I think, I think I said this last year that AI is not secure and we are now using more and more AI agents to code. And so as a result that is also introducing a lot more security issues. And so I think those stocks have also gotten hit with software and I think you can be buying those names for the long term.
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Wilfred Frost
So let's pause before we get into some of the kind of stock recommendations in software directly and just reflect on your performance since last time. So in the end, we had six specific stocks from last time that you focused in on July 2025. Vertiv is up 154% since then. Congratulations. Dr. Horton is up 17%, Amazon's up 16%. Palo Alto Networks and Boeing are sort of flat to slightly down and uber is down 19%. I run through all of that and applaud it, particularly Vertiv, because Palo Alto Networks was one of the recommendations. And I guess in one sense to only be down a little bit since last July, given the software sell off, is relatively impressive.
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Is that your top pick in that area still?
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Stephanie Link
Yeah, I like it very much and I like what they're doing. Over the last five months, Wilf, they've made $30 billion worth of acquisitions. $30 billion. And the reason, and I've said the reason I like a lot of the reason I like cybersecurity is because not only is AI going to be a tailwind for them, but also I think you're going to see massive consolidation and the Big five are going to get bigger and bigger. And what they're doing, what Palo Alto is doing is actually they're trying to build out their capabilities, their products, what they can offer to customers. They want to be able to offer more. It's called platformization. And they're still not able to offer 100% of what a customer wants. But. But what the customer wants is they don't want to actually have 10 different vendors. They want maybe three, four, five vendors. And ideally they'd like one or two, but that's just not possible because no one, not even the big five, own or have enough of the products of what the customers need. And I only know this because I talked to my own chief technology officer and he has said, he has said such. So I also think it's interesting that the CEO was it, two weeks ago, bought $10 million worth of stock.
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Wilfred Frost
It's always a good sign.
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Stephanie Link
Yeah, it's pretty interesting. So, you know, it's trading at about 10 times price to sales, which is not cheap. But CrowdStrike is trading at 25 times price to sales. And so I think that there's a narrowing of the valuation. I think that could happen.
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Wilfred Frost
Let's just race through another one in the software space. So what about ServiceNow? How much has that fallen and why is that protected despite the sentiment?
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Stephanie Link
I mean, the stock is down huge. I bought it just recently because it's down quite, quite a bit. But it kind of goes back to. I think that they're mission critical. There are software that tries to connect all various different pieces of a company, all the various different departments, all the various different technologies. And by the way, this CEO also has just bought $3 million worth of stock. They have industry high margins. I think the quarter was really actually good last week but the guidance was conservative. Gross margins are down and that was disappointing. I understand that. But I do believe the catalyst here near term is they have a May 4th analyst day. I think they'll do a good job talking about the mission critical aspect of the company and I do think that they will see very strong bookings going forward.
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Wilfred Frost
I wanted to talk about the flip side now obviously there was a big software sell off since mid March since the sort of Iran war low, there has been an unbelievable rebound in semi stocks. I mean 18 days in a row.
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What do you feel when you see that?
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I mean certainly in the short term one has to step back and think this isn't sustainable. Even if the last couple of months up to today might provide a long term entry point.
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Are you worried when you see that
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type of rebound and what's been your kind of favored semi play of late?
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Stephanie Link
I think that it's always a little bit nerve wracking when you see the moves that we've seen almost meme like right. But, but as I mentioned, I think this is the area where you are going to see earnings revisions that are higher. Some of the numbers Wilf are off the charts in terms of what some of these companies are are printing. Marvell happens to be my favorite. I've owned Broadcom forever. I still like Broadcom, but I like Marvell because it's an alternative for the AI trade. Instead of copper, they are optical and I think both are going to be needed. But they just talked about growing optical 50% over the next year. And they also have custom Asics, which is what Broadcom also has. And the two of them have an 80% share and that business is growing 20%. So this stock has, and this company has potential to grow earnings of 5 to $6 a share over the next couple of years, making it a pretty reasonable valuation. But again it ties all the way back to the food chain of AI. They're a beneficiary of it.
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Wilfred Frost
And in terms of Vertiv, if we come back to the beneficiary of the food chain, I mean that has had a fantastic performance. How are you feeling about the valuation now?
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Stephanie Link
Well, they had an enormous backlog growth over 60% in their quarter and I think that. And they're now not going to actually be posting backlog anymore, which is kind of a bummer. But when you see those kinds of backlog numbers, I mean those are absolutely incredible. Like I said earlier, I don't think I've ever, ever seen backlog numbers. And it's not just Vertiv, right? It's of all the other companies that we have talked about in the past. It's Quanta Services, Eaton, it's ge, Vernova, Rockwell Automation. But Vertiv actually is really an amazing way to play the data center and the fact that you need cooling systems inside the data centers. And what I think is really interesting is they just made an acquisition announced today that actually they're buying a small, very small company but they're buying the company to help them with their engineers people. Because there's one thing that I have learned over the last year is that we don't have enough people, we don't have enough sophisticated electricians, we don't have enough sophisticated engineers, we don't have enough sophisticated pipe fitters. So I thought it was interesting this morning that they're going after a company just to get their engineers. This management is top, top rate and they're doing all the right things.
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Wilfred Frost
That's very interesting. Also an indication of what younger people should be training towards. I think perhaps going forward.
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Stephanie Link
100% Wilf it might be your kiddos.
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Wilfred Frost
Yeah, exactly. He's two and a half. So I won't start pushing him, won't start pushing him towards learning those types of skills quite yet.
- [26:07]
This episode of the Master Investor podcast with Wilfred Frost is sponsored by BMY Investments, a trusted partner for many delivering financial solutions to investors and institutions worldwide. This sponsorship does not constitute financial advice. This episode is sponsored by the World Gold Council, the global experts on gold. They champion gold as a trusted strategic asset, providing market leading research and to help investors understand gold's role and modernize
- [26:37]
how gold is owned, traded and used.
- [26:40]
Developing industry standards and market infrastructure. Learn more@goldhub.com. Doctor Horton Just want to hit that
- [26:52]
one from last time as well. Clearly a housing stock, I mean how much is it linked to mortgage rates? And when going back to that point at the start of the discussion with the war and its impact on it,
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are they heavily, heavily correlated to what's
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happening with mortgages or is there more of a structural case?
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Stephanie Link
Either way, 100% tied to mortgages. It was interesting that pre war the whole sector was doing quite well and that is because interest rates had come down and in fact we hit below 6% on the 30 year fixed mortgage for just a moment in time. But if you talk to the company, when we did hit that lower interest rate, they did say that inquiries and demand had started to pick up. And so I think you do need interest rates to come down. And so maybe this is a stock and a theme that kind of is in, you know, show me mode, I would say for sure. But this company, in the face of all that, actually just beat earnings estimates. And they're very conservative on guidance, but they basically feel good about the guidance that they've given at the very beginning of the year. And so they're doing and controlling all they can. I think at the end of the day when you do get interest rates lower, and I think eventually we will, but you got to get it in the fives, probably in the low fives to really see this pent up demand. But we have pent up demand. You know, we're 4 million homes short in this country and we've got 5 million millennials that want to buy a home, a new home. And so I think it'll take a little bit of time, but in the meantime, the stock is extremely cheap at
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Wilfred Frost
10 times earnings and you can build
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houses with less local planning restrictions than we can here. It's a time for another discussion, for another day. Just actually one more from last time. I mean, you referenced Amazon. It's up 16% since last July when you joined us.
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The max seven, five of them or six of them report all on Wednesday this week?
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Stephanie Link
Yeah. Oh, I mean, five out of the seven report this week and four of them report on Wednesday and Apple is on Thursday. So we're going to be very busy this week.
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Wilfred Frost
And still Amazon is your top pick of the Max seven.
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Stephanie Link
I think I tie between Amazon and Meta. I like them both for different reasons. I think first and foremost, I would highly encourage you and the viewers to read Andy Jassy's shareholder letter. Andy Jassy is the CEO of Amazon. To fully understand why they're spending $200 billion this year alone on AI and why they were likely to spend more going forward. I haven't, I have no issues with them spending. I just don't want them to eat in their free cash flow. And they are right now. But he did a great job explaining eventually they'll see the return. So that's going to be very important when we hear from them. They just doubled their capacity for aws and so I think you're going to see an acceleration in that business. And of course they're the juggernaut in retail, in E commerce and meta I like a lot because you are already seeing the monetization from all their aggressive spend and I don't expect that to actually diminish anytime soon either. However, because they're using AI, they're able to price their ads up 10%. So price per ad was up 10% last year and time spent rose 5% on all of their sites and for video time spent rose 30%. This is all attributed to AI and the functionality that they're putting in into their business. So those are the two that I like. I don't own the others. I'd like to pick my spots. I just much prefer if I'm playing AI to talk about more of the infrastructure plays.
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Wilfred Frost
Let's touch on the banks a little bit. A topic you and I have discussed at length many times.
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The recent earnings.
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You've already referenced it a little bit. It's not, not really revealing any terrible scares coming, even if provisions went up a little bit.
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That said, they have had a phenomenal
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run over the last couple of years. As you said, going back to the SVB moment, they're up many times over.
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Has the sector got quite expensive as a whole?
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Stephanie Link
Believe it or not, they're still cheaper than a year ago when they were on a tear. They did get expensive by the end of last year, beginning of this year for sure. But they're still trading like Morgan Stanley's, still trading at 13 times earnings. So is Goldman Sachs. And on a book basis, I mean you still have bank of America at 1.2 times book, Truist Financials at 0.9 times book. So I think you can find some names that are cheaper. But the earnings have gone up incredibly even in the face of kind of the yield curve and what it's doing. And as I mentioned, you know, the businesses are really good and what the companies are saying is really quite good. Gives me a lot of confidence. I like the investment banks probably better at this point just because the capital markets exposure and the business momentum and the pipelines that we're seeing are really exciting. The IPO market, I mean one way to play anthropic or OpenAI or SpaceX is through the investment banks. I think they're going to make a killing from from those IPOs when they do occur. So I still like those a lot.
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Wilfred Frost
Do you expect those IPOs to be sort of rushed out as soon as possible if and when the war calming down is solidified?
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Stephanie Link
I think you're going to see it as soon as they can get it done, for sure. I mean, these, these are going to be so oversubscribed wealth. But the interesting thing about SpaceX is actually that Elon Musk wants to allocate retail, 30% of it, which is definitely different than what you normally see. You normally see institutions getting 90%, retail getting 10%. So 30% is a big deal.
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Wilfred Frost
It'd be really interesting to see how, how all of those. I mean, to be honest, I think it's another reason that would pressure President Trump because he loves this sort of thing happening to bring an end to the war. My fear on it, just to put the counter argument or refer our listeners back to the last episode with Jeremy Grantham for the general bearish argument, but it's a much harder issue to back out of than Liberation Day was. As we're seeing, there's a ceasefire, but the strait's not, not open. So we'll see if the genie can be put back in the bottle in the coming weeks or not.
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Stephanie Link
I think he'll try as much as he. I think he'll try as much as he can. We'll see. I mean, I just, I hope, you know, we all hope, right? We don't want to go through war, we don't want to be involved in all this. So it'll be interesting.
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Wilfred Frost
I wanted to touch on international for a moment and actually it's interesting because, you know, the UK 10 year, for example, is flirting, hitting just under 5% again today. And it sort of shows how, to your point earlier, outside of the us, a lot of us are seriously impacted by this already. There's no need for it to go on any longer. And of course that will have impacts on global growth. What is your exposure to international markets at the moment? Is it still relatively low or have you seen more opportunity in the last year there than in past, the past decade or not?
- [34:24]
Stephanie Link
Well, I think you have to be very selective. I am quite nervous about Europe for the obvious reasons, as you just cited, and I think you want to have definitely some exposure. One of the areas that I have exposure, which is fairly new, I bought the, it's an etf, the ewz. That's Brazil. I actually went there on holiday in December and was amazed by the amount of cranes that I saw and the amount of building that I saw. And I came back, did some homework and I think it's really interesting. Most people think Brazil is kind of a commodities country and it is. Agriculture is 25% of their GDP, there's no question. And it's copper and it's a lot of things. But what it is, what's underappreciated in my mind is they have the power that everybody in this world wants. And so I think in a weird way, it's kind of an AI play too. That being said, you know, they have 741 million people in the country. It's the seventh largest country in the world, the largest in Latin America. They have a government that's actually getting more friendly in terms of fiscal policies, monetary policies. Interest rates are still quite high, but I think they're coming down. And I think that the demographics are quite interesting too. The average age, median age is 35 years old. So you kind of package that whole thing together and I've been pretty pleased. It's up a lot this year, so I certainly wouldn't chase it. But on any bad couple of days, couple of weeks, it's certainly worth a look.
- [35:51]
Wilfred Frost
That's really interesting. And Peter Boockvar a few weeks ago was recommending Brazilian debt. And obviously, you know, we talk about, sadly, Russia being a bit of a beneficiary of the war. Brazil not being located close to the war, but being a significant fossil fuel exporter is sort of a short term beneficiary.
- [36:11]
Sure, 100% as we start to wrap
- [36:16]
up, Stefan, it's been so great to get such actionable tips and advice this time round and to have a more positive outlook. What's the factor that worries you in the short term?
- [36:32]
The kind of the war side? I mean, are you not nervous about valuations? Are you not nervous about so much
- [36:39]
of what we've just talked about being linked, at least, if not directly relating to one particular theme?
- [36:47]
Stephanie Link
Well, it's interesting, just last week, earnings estimates for the Overall S&P 500 have actually been going higher and expectations for the full year are now expected to be about 14%. So far, by the way, they're running 25% for this current quarter, but 14% for the full year. At the same time, multiples have contracted by 17%. So we went from 23 times to 19 times for the S&P 500. That's not cheap relative to history, but it's cheaper. And I think these other sectors that we've been talking about are very attractive because earnings estimates are probably understated wealth and that is semiconductor. June, I don't want everyone to think, go out and buy semis today, please don't, because they are on a tear. They will pull back. They will. Correct. But that's one of the areas where you want to look and make your shopping list. We talked about energy, we talked about industrials and the infrastructure plays. These are secular winners right now. Again, pick your spots because they've all had a nice run. But I do think that the earnings are just so understated and the growth is so exciting going forward.
- [37:52]
Wilfred Frost
So, Steph, last time you were on
- [37:54]
with us, we did a more full review of your entire career and reflected on your investment strategy and advice for our listeners over the very long term. I wondered this time with the kind of crazy volatility that we've seen already this year, what your advice is for the year ahead. I mean, I guess you've already touched on it a bit in the way that you've successfully bought the dips. But for the rest of 2026, do
- [38:18]
investors have to be much more nimble as opposed to stick always to their long term views?
- [38:24]
Stephanie Link
Well, I guess it depends on your strategy and your philosophy. I try to be longer term with the whole themes and that sort of, and I look for opportunities on dips, but I think no one's ever, you know, it's never been a bad thing to take profits along the way. And yeah, I mean you look at some of the charts in certain sectors in the market, you have to be, you have to be, you know, just mindful if you can stomach the volatility, you hold on. But if, if you want to kind of trade in and out. I've never been really good at that. Will, to be honest, I'm a better buyer than I am a seller, to be honest with you. I think selling stocks is really hard, but for a gain, you can't complain about a gain. So I would just say look, focus on your themes, look for opportunities. I would hold on especially to the sectors that we've been talking about where I see a lot of upside over the very long term.
- [39:18]
Wilfred Frost
Steph, it is always a pleasure. Great to see. Thanks for joining us again on the Master Investor podcast. And next time I'm going to make sure you come on the week before Jeremy Grant them. But either way, you're the perfect antidote and it's really fantastic to get a very convincing, constructive outlook for US Stocks in particular. Thank you again for joining us.
- [39:40]
Stephanie Link
Thanks. Well, great to see you.
- [39:42]
Wilfred Frost
Great to see you as well. That was, of course, Stephanie Link.
- [39:46]
Coming up next week on the Master Investor podcast, we'll be talking to Louis
- [39:49]
Vincent Gav of gavcal. Make sure to tune in for that. But for now, thanks again for tuning in to The Master Investor Podcast the
- [39:59]
Master Investor Podcast is sponsored by Elseg Interactive Brokers, the World Gold Council, and BNY Investments. Please do remember the views expressed in this podcast are for general information purposes only. Nothing in the podcast constitutes a financial promotion, investment advice, or a personal recommendation. More on that in the show. Notes this podcast is produced by Paradine Productions and Master Investor limited In association with Birdline Media. If you've enjoyed the show, please do subscribe on YouTube or click follow on your podcast platform and you'll be automatically notified each time a new episode drops.