Tommy Thornton: Tech Stocks Are In A Bubble
Episode publishedPodcast: Forward GuidanceForward Guidance
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Jack: Forward guidance is brought to you by Van Eck, a global leader in asset management since 1955. You'll be hearing more about a Van Eck ETF later on. For now, let's get into today's interview. I am joined once again by Tom Thornton of Hedge Fund Telemetry. Tom is a veteran trader, and I'm gonna be talking all things stock market.
Tom, great to see you. How are you thinking about markets?
Tommy: Well, I think we're starting to see a little bit of change happening, which is great, because it's been, for active managers, it's been an act actual nightmare because we just haven't had any dispersion in the market to find ideas, and there's pullbacks or well, they don't happen. And we're starting to see that develop, and I I that gives me encouragement going forward. I I should actually preface that and say we really haven't seen enough dispersion. In other words, you know, we've been sort of skewed by the S and P and Nasdaq lifting higher and led by I mean, it's been talked about a
I I caution people that the rotation trade that people are, you know, loving right now most likely will turn out to be not as good as they had hoped. And that that's the concern I have right now. I'm I'm bearish in the market, blah blah blah. You know? I I have longs.
I have shorts. I have a long short fund. So but I I do think that, we're starting to see peak tech start to occur.
Jack: And so those stocks that have led this the market this time, NVIDIA, Apple, Google, why has that been hell for active managers?
Tommy: Because people are looking at performance and saying, well, you're underperforming the S and P. And, yeah, I I I have. And I'm I'm I'm fine with that. I'm not no. I'm not fine with it, but I'm just I'm cognizant of that.
And the last 2 years have been tough for those that haven't chased those technology stocks that are trading at excessive valuations, very bubble like and thematic like with the AI narrative that we can go into a little bit more after this. But I think that the last time we had this type of performance or underperformance by active managers, and and really it's been underperformance by the majority of of stocks within the market versus the S and P, was 99 in 2000. And maybe it was 98, 99, but we had 2 years in a row where that happened. And I I saw some data recently that showed that only, 24%
Now you're starting to see some some rotation. The banks are starting to act very, very well. And I I I personally don't think that I wanna be involved in banks if we do go into a recession, which I think is is possible. You know, it's always been the waiting for Godot for a recession for so many people that have predicted it. But I think we're probably gonna see a recession in the next year.
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