Monday Mar. 17, 2025 - Buy the big dip?
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He's been seen on CNBC, the Fox News Channel, and the Fox Business Channel. His articles can be found on MarketWatch, Seeking Alpha, TheStreet.com, and many other places. He's the author of the weekly Best Stocks Now newsletter and the inventor of the Best Stocks Now app. He's president of Gundersen Capital Management. Here is professional money manager, Bill Gundersen.

And welcome to the Monday morning. It is St. Patrick's Day. Happy St. Patrick's Day. And in celebration of St. Patrick's Day, the market is green so far this morning. This is Bill Gunderson, President of Gunderson Capital Management. And I'm here with Barry Kite, our Chartered Financial Analyst. And after a decent day on Friday...

We might get two days in a row, which we haven't seen for quite some time, of a positive market. We'll see. We've got a long way to go before the closing bell. But the Dow is up 173 points right now, puts it at 41,661. The S&P is up 16%.

that's 30 basis points the nasdaq's up just five six now but it is up 17 759 the small caps are up a half a percent uh pretty quiet in the bond market today with uh 4.30 i would note however that

You know, interest rates have come down 50 basis points since Trump took office back on January the 20th. And, of course, the Fed hasn't done anything to help out. It's been the markets that have driven those interest rates down. Gold is quiet after setting a new record last week, over 3,000 for the first time.

And Bitcoin is down today now, $52 to $82,816. So welcome to today's Best Stocks Now show, the shamrock edition, I guess, of the Best Stocks Now show with professional money manager Bill Gunderson.

President of Gunderson Capital Management, Barry Kite. You got any Irish in you, Barry? I think I do. I've never done one of those Ancestry.com things, but yeah, with the last name Kite. I would think so. And I've got some other folks who are in that area. All I know is I burn easy, so it probably makes sense. A lot of guys don't show up at work on Monday. On St. Patrick's Day, claiming they have Irish blood in them.

And, of course, they don't come back to work until Wednesday, usually, because they celebrate that Irish blood. But anyways, the market is green. That's encouraging. You know, the big question is, and I addressed it over the weekend, a big question on everybody's mind, have we put in a bottom here? Is this sell-off green?

over with and particularly the nasdaq which is now down some almost 15 percent from its high and those leading stocks within the nasdaq that are now down 25 to 30 percent from their highs and there's good news on that front and there's uh not bad news but there's concerns on that front to be aware of also

And I was encouraged last week by, I showed the NASDAQ chart in my newsletter. That was the cover page of the newsletter. And you can see that the NASDAQ's been trying to put in a bottom here in this 17,750 area. 1, 2, 3, 4, 5. This would be the sixth trading day of trying to put that bottom in.

No guarantee that it'll hold. No guarantee that it won't pierce that support line. But we do have a support line building right now. That's encouraging. We were at 20,110 at one time on the NASDAQ. That was February 18th. I think Scott Bessent said it best. He said, you know, corrections are healthy, especially after the market goes straight up. And we did have a straight up move there yesterday.

Being led Palantir and Nvidia and other CrowdStrike and other stocks had a very straight-up move, and we got into some very lofty valuation territory, and therein lies the other encouraging part of all of this. During the height of it all, the S&P got to a forward P.E. of almost 23X,

That's just too high. The five-year average is 18.8, somewhere in there, 23. The market didn't deserve to be there. The NASDAQ got up to 28.5x forward earning. Now, during this correction, believe it or not, on Thursday, the S&P forward PE closed below 20 for the first time. And when's the last time?

that we said, hey, the forward PE of the S&P is under 20. It's at 19.9, just a skosh under 20. But still, that sounds a lot better than 23X.

And the forward PE of the NASDAQ was 28.5, and now it's 24.5. That's a significant drop, okay? Well, we were talking about NVIDIA being at 20. Right now it's a PE of 27, right, which seems palatable from a valuation standpoint, especially when you look at the market as a whole, as high as it was. Yeah. Yeah.

Okay, now as I look inside the NASDAQ, which again, this is the sixth day of it trying to make a bottom. It's vacillating up and down, but it's staying on that support level, that floor. I look within the NASDAQ and market leader Palantir is now in about the second week of a bottoming pattern. Okay, and then it looks even better.

It actually even curled up on Friday, attempting to start a new number two uptrend. It's curling a little bit more today after getting down to 79. It's back to 88 today.

And I would expect, I mean, it's a natural assumption for the previous leaders to assume leadership in the market once again. I also use the example of Meta on Friday, which is still one of, I think it's the best one of the fabulous seven right now. And Meta's in like the fifth day of putting in a bottom. It's up a little bit here today, but that bottom pattern is,

is still in place now here's the worry here's the worrisome part you know that i've always said that stocks and indexes follow earnings follow the earnings you know like jesse james followed the banks because that's where the money was the stock market follows earnings

Because that's where the growth comes from. And that's what allows the stock markets and individual stocks to go higher. When we started this quarter that we're already in, the first quarter of 2025,

Believe it or not, Barry, we've only got two weeks left in the quarter. Two weeks from today. Unbelievable. And the first quarter of 2025 will be in the books. Okay. Let's go back to December 31st. Let's go back 10 weeks ago. The consensus S&P 500 estimate for this quarter was $63 per share. Okay. That was what the market was.

was expecting back then. It has been ratcheted down 10 weeks later. The estimate's now at $60.51 per share. So $2.50 have come out of those expectations. So the expectations, usually they do get shaved down a bit.

from the first print of the expectations back in December. That's not unusual, but that's a little bit more than usual. And that has probably been another reason why you've seen this sell-off. If you have a very high valuation to begin with, and then the earnings expectations get shaved a bit,

That's a combination that adds up to about a 15% drop in the S&P 500.

or in the NASDAQ, and that's what we have seen. And I think the NASDAQ's probably overdone it a little bit on the downside. Now, the other usual thing that happens is when the quarter ends in two weeks and when those earnings start rolling in, those expectations start going up again as companies come in and beat their earnings. So anyways, I would say right now it looks encouraging.

I ended my little, my writing, my article, my front page article on Friday or on Saturday evening with keep your fingers crossed because we may be at a crossroad here in the market. The Dow was up 675 on Friday. The NASDAQ was up 356. That's the strongest day we've had in a long time.

You've got greed coming back. You've got fear of missing out. That's a big one. I don't want to miss out. Will it stick? And you have the charts firming up. So, you know, all of that is encouraging. And don't forget Wednesday is the first day of Springberry.

You know, look, I got azaleas. I planted about 25, 20 azaleas a couple weeks ago. Just once in my life I wanted to plant them before they were in bloom. And they're about to pop, aren't they? A bunch of them popped over the weekend. The carnation color, the hot pink, and they are really beautiful. I noticed that this morning. About 10% of them have popped.

So let's hope that the NASDAQ, the S&P, the Dow, the Russell 2000 could follow my carnation azaleas and become hot pink again and beautiful. We'll be right back. I keep blowing and blowing. They call me free. I keep blowing and blowing.

What are you feeling now that I've caught my love?

And welcome back here to the second quarter of today's Best Docs Now Show. Fire-roasted oysters. You know, is there anything better? I mean, over a charcoal fire, that garlic butter. Oh, my goodness, that's good stuff. We're headed to Sarasota next week. A week from today, I guess. Yeah. Boy, that's coming up. I can't wait to get down to Sarasota again. I've got to visit my sister. That's...

That's a must. Family, very important. And she is still not back in her home after the last hurricane. So I just figured, hey, while I'm down there, spend a couple days meeting with the folks. And I know that calendar is filling up, but we'll figure it out. We'll squeeze you in there. Give us a call at 855-611-BEST, 855-611-BEST.

to reserve a slot. We'll be at the Westin Hotel. Not too far. We can probably smell those oysters roasting there on that fire over there at Owens Fish. If it's still there, I think it is. That's always one of my favorite places. Now, this Tuesday, what to expect this week? Tomorrow's going to be a big day for NVIDIA as CEO Jensen Wang will give a keynote address. He's the man now, the man in the leather coat.

from Taiwan at the company's GTC event. Potential announcements related to robotics, sovereign AI. See, China made some more advances in their AI today. AI agents and automotive technologies are anticipated. The list of stocks that correlate closely to NVIDIA include Broadcom,

Marvell, Qualcomm, you know, Reesta Networks, et cetera, et cetera. I have looked at several charts here during the break, and I'm very encouraged by what I see. I see Apple in the day three, day four of a bottoming price list. I see Airbnb trying to put in a bottom here.

That's all encouraging. In the meantime, we've got to look at the risk out there. Things heating up in the Middle East over the weekend. U.S. strikes, Yemen, which should have been done a long time ago in my book. Why do we have a bunch of ragtag people disrupting the shipping lane, one of the most important shipping lanes in the world?

And adding to cost. I mean, remember how far away they have to go around basically the Horn of Africa instead? Yeah, that's stupid. Ridiculous. I mean, you kind of take out the cancer that's causing this. What will the ramifications be? Obviously, I mean, Iran denies it, but they're totally behind the Houthi rebels. Those Houthis don't have the money for those kinds of weapons that they're firing.

And it's encouraging. Trump is going to speak with Putin tomorrow. Maybe that's even more important than Jensen Wang, Barry. Who knows? Maybe more important than Powell speaking on Wednesday. Yeah. Man, I'll tell you what. Those are three big ones. Wang, Putin and Trump and Jerome Powell. Wow.

Okay, so anyways. And then we've got March Madness starting with basketball, NCAA basketball tournament starts on Thursday. Yeah, I was looking at that today. Duke is 30-3 this year. How about that? They're having a good year. Yeah, and I read that the gambling on March Madness, the gambling stocks are seeing a lot of activity coming in. European markets rise in cautious trade.

Europe's had a good year. China's up 21.8% year to date. And, of course, the U.S. markets were negative as of Friday. Morgan Stanley says stocks are poised for a short-term bounce amid longer-term doubts. Well...

Even a broken clock is right twice a day. No, you know, since they got rid of Chris Wilson or Mike Wilson or whatever, Alan Wilson, what was his name? He's still there. Mike Wilson. He's still there. They don't put him out there as often as they did. Yeah. Brian Wilson was the Beach Boy guy. And his brother, too, Mike Wilson. Morgan Stanley says we're due for a bounce.

And it looks like we are getting one. But you know what? It's day to day. I haven't heard the word tariff come up yet today. So that's helping. But that word comes up all the time. Besant says that he is not at all worried about the stock sell off. Okay. Hey, that's good news.

This was yesterday. He's not at all worried. He says, I've been in the investment for 35 years. So he's got 10 years on me. And he's the Treasury Secretary. And he lives in the biggest house in Charleston. And I can tell you, I live in the biggest house between my two neighbors, right? I can tell you that corrections are healthy. They're normal. What's not healthy is straight up. Well, that's what we had.

He continued to say, you get these euphoric markets. Well, yeah, that was after Trump was elected. You had Bitcoin go to $106,000. You had Palantir go straight up. And he says, that's not normal. That's not healthy. He says, euphoric markets lead to financial crisis. So, you know, it almost seems like they've tamped down the market a little bit, maybe,

trying to get it cooled off a little bit. Anyways, Trump has wavered on imposing tariffs on the country's two top trading partners, Mexico and Canada. He keeps going back and forth. He's threatened to levy steep levies on the European Union. That hasn't happened yet, but it's going back and forth.

And then, of course, you've got China out there. RBC Capital cuts their S&P year-end target as it warns of a rockier path ahead. Well, that's a Canadian bank. Canada not real happy with the U.S. right now.

That's the Royal Bank of Canada. They're lowering their S&P 500. And one of the strongest banks in the world from a credit standpoint, actually. From 6,200 to 6,000. Okay. Well, I mean, the consensus is up around 6,800. They're well below consensus at 6,000.

And the earnings estimates for this year have remained pretty much the same, $270 for 2025, which would be about a 12% increase over last year. And like I say, the consensus target price out there on the S&P 500 is up around $6,800.

I'm down around 6,500. RBC is lowering it to 6,000, which I think is a little bit on the bearish side there. But they do think it will be a rocky path. That's RBC. Market turbulence spurs shift from passive investing strategies. You know, everybody's a passive investor until the markets start to get rattled, right?

And that goes against the whole grain of being a passive investor. Can you remain passive when the market gets very active and

And can your timing remain passive, right? Yes. If you're getting closer to retirement, there may be a little more evasive action than you would at other parts of life. The Wall Street Journal reports a surge in investor activity as concerns about economic stability grow. Well, I would say this. You can definitely be too active. There's no question about it. You can be too active.

I had a guy used to call me just about every other week and say, sell everything, sell everything. That's too active. We'll be right back.

This is Bill Gunderson. Thank you for tuning in to today's Best Stocks Now, Best Inverse Funds Now show. I put several hours of research in during the wee hours of the morning each day to bring you the very best cutting-edge stories that I can.

To get two free weeks of my newsletter, go to GuntersonCapital.com. To talk to us about our fee-based only money management services, call us at 855-611-BEST. Now, back to the second half of the show. Call out the instigator because there's something wrong.

We've got to get together sooner or later

Well, a significant number of investors are pulling money out of the U.S. stocks in search of more stable alternatives. That's good news because that's usually a contrary indicator. Where are they going with their money? Money market, short-term bonds, gold, historic safe havens.

I don't, you know, cash, obviously. I mean, we raised a lot of cash just to wait for things to improve a little bit. And I do think that they are improving. The jury's still out. We had a 72% run in the S&P 500 from its lowest point in October 22, 2020.

That's when the market bottomed. That was that famous date after the Fed started to signal that they were about done with the rate hikes. To its peak in February 2025, just last month, four weeks ago, we had a 72% rally, and it's cooled off, obviously.

It's settled, but there's still earnings expectations that support a higher market out there if those earnings are achieved, if we do not go into a recession. Buying the dip seems a little bit more of a good strategy here to me right now.

but being very, very judicious in what you buy. And on your safe assets side, I would say liquidity. The main thing is make sure it's liquid, right, in terms of whatever your safety vehicle is. Don't park it in an annuity. This is totally illiquid or a partnership, a non-traded REIT, things like that.

Well, must takes a lot of heat, but whose capsule docked to rescue the astronauts stuck in the International Space Station, SpaceX? I don't know when they're coming home. Let's see. Completed docking. We don't have the date on when they're coming home, but I think that's quite an accomplishment. NASA couldn't do it.

Boeing couldn't do it. They're the ones that got him into that jam. But Musk was there to the rescue. Apple, Google, lead big tech supporting tripling nuclear power capacity by 2050. Well, the number 2050 is one of the concerns with investing in nuclear because it takes time.

And I think the market kind of realized that. The nuclear stocks were part of that big, huge run-up. I'm still a big believer in the nuclear renaissance myself. I particularly like this, you know, the arrival of these smaller... Like the nano. Yes, the smaller modular reactors that, you know, they seem to be very interested. And, of course, Oklo, too.

And SMR and nanonuclear seem to be the players there. And then, of course, there's companies coming up with different kinds of fuel, more efficient fuels, ones that can split. You know, they've got to get it to that rich, whatever it's got to be, they have ways of speeding that process up now.

So anyways, Amazon's invested more than a billion dollars in the nuclear industry during the past year. Meta has talked it up a lot. Amazon's talked it up a lot. John Ketchum, CEO of NextEra Energy, which operates one of the largest nuclear power fleets, he said that new nuclear power would take until 2035 or later.

So there's one of the issues that you have with stocks like Vistra. Long duration. Long duration, Vistra and Constellation Energy. Nike's going to report this week it is a Dow stock, and, of course, tomorrow you're going to get another Dow stock in NVIDIA doing their conference, GTC conference. UBS hikes the gold forecast at 3,200 on trade risk.

Well, you know what? There was a breakout in gold that I sent out the chart on. I think it was Wednesday. I think it was Wednesday. It could have been Thursday where it just, boom, it went through that $3,000 level and was there. Pulled back. It's just under it, but we saw above $3,000 for the first time. And silver, you know, burst through $34 per ounce, so...

You know, all the gold coins and the gold bullion and the bars and the gold ETFs and everything like that all had a good week last week. Well, Trump's strategy of tariffs work. Well, you know, the thing of it is, Barry, the other countries are using tariffs heavily against us, especially Europe, okay?

And now we have a rust belt because of a lot of these industries. I don't know that – I have high – I doubt very much that a lot of those industries are ever going to come back because I don't know that we've got the people that have the will to work like that anymore in the steel mills. I don't know. Maybe we do.

But I think a lot of things that have left are not coming back. But I do think that the balance of global trade is completely off kilter, and it needs to be adjusted. And that's what's going on, and that's where the pain is coming from. You know, look at this in the last few years. Look at how Apple has lost tremendous market share to China.

Look at how Tesla has lost. Look at how a lot of offshore building Volkswagens in Mexico and things like that. So anyways, I think there needs to be an adjustment. And is it going to work or not? Well, the jury's out. The jury is out whether it will increase growth there in America. You know, if we can just narrow the trade gap,

That's going to help our gross domestic product every year, our GDP, and increase our growth. So there's a lot of good that can come from it. But in the meantime, there's this pain that

The headline news, I would say. China. You have to reshuffle the supply chains. Yes. Think back at COVID, right? In terms of cost, it's going to at some point make sense to build that plant here and produce it here because...

You know, the value because the cost when you add the tariff in, right, it makes sense from a cost-benefit analysis to just make it here. Yep. But it takes a while to reconfigure, right, the supply chain. China's retail sales, now ours came in at 0.3. Their retails accelerated 4% year over year.

China's starting to come back. Like I say, the Chinese market's up 21.8%. It really helped when that deep seek came along. It put a chill through our tech sector.

That was also a big reason behind the 15% sell-off in the NASDAQ. Deep Seat didn't help. Yeah, that was the first shot across the bow. Then we had the cut in defense spending for Palantir. That's right. And the high valuations, right? And all of that added up to a 15%. Let's hope it doesn't turn into a 35%.

We talked last week about how many times does a 10% correction turn into a bear market? About 25% of the time, at least if you look at the last 50 years. And China's industrial output grew by 5.9%. Well, you know, as it relates to China, if you're going to invest in it, and it does seem investable again to me right now. I think China has learned their lesson today.

about disrupting these big tech giants that they own. But it's going to be companies like Alibaba, PDD, Baidu, NetEase, Tencent Holdings. There's about six or seven of them. I think BYD in that EV market. Those are all, to me, investable once again.

And more sign of China eating our lunch. Foreign phone shipments in China slumped 21% in January, and that's Apple. That means Huawei. Okay, that wasn't a trade deal. I think Huawei is probably a little bit of a counterfeiting operation, opening up an Apple iPhone and re, you know, what do they call that, reverse engineering Apple.

and coming up with the Huawei phone, which has really hurt Apple big time, and the Chinese EV automakers have hurt Tesla big time. Tesla is turning promotional. They're offering a free trial of their full self-driving service, which my friends tell me doesn't work.

And in fact, it's a $10,000 option to buy when you buy a Tesla. And I have a friend who bought it, and he says he never uses it because it's not very reliable. And there's no resale value. You lost that $10,000. So that's maybe why they're offering it for free in China today.

trying to spur their sales. But I think his best strategy in China is coming up with a cheaper electric vehicle. If anybody can do it, you would think Musk could. And more news coming out of China when we come back on their AI initiatives as the AI race continues to heat up. We'll be right back. ♪ music playing ♪

And welcome back here to the final segment of today's Best Docs Now show. Let's take a look inside, underneath the surface of the market. Put on my mask here and my snorkel. Okay, I've got air. All right, let's take a look here inside the S&P 500 today.

As we're seeing some green shoots, okay? Where are those green shoots? Well, in the S&P 500, Intel. Intel's really, all of a sudden, perky, huh? It was 19. Turnaround story. Now that they've got a new CEO, right? Five days ago, it was 19, and now it's $25.74. I had that one slated in my value fund.

Which is on the drawing board, and it's really taking shape. And I may be ready to roll that out on April 1st. That's an unlucky day, though. Trump says it is, anyways. April Fool's Day. March 31st. We'll call it March 31st. The closing price is on March 31st. But I've currently got about 20 stocks in that portfolio. And it has done well. The volatility is low.

You know, you're basically going with beaten up best stocks now. All right? B-B-S-N. B-U-B-S-N. Beaten up best stocks now. Because Intel at one time was. A turnaround also fits into that strategy also. Let's see what else on the S&P 500. Intel's up 7%. Enphase up 5.8%. No thanks. That's Solar.

Macy's is up 5-2, no thanks. I think that's not terminal, but I don't see much hope.

AMD's up 4.8. That is one of the ones in my value fund. That thing's put in a bottom, if you ask me. Look at that. I mean, it trimmed half of its value in 52 weeks. Yep. I mean, it should only have one way to go, right? If it doesn't take off and start running, it will be in that portfolio on March 31st.

Domino's Pizza, no thanks, 4% today. I think pizza parlors have a lot more competition now out there.

with the delivery service. Everybody's delivering now. Everybody delivers now, yeah. Okay, Edison. That's an interesting story. The telephone pole that they've zeroed in on in California, I think for the Altadena fire, is inactive, or the electric pole. It's not even connected to the circuit anymore.

I can't think of the name, regeneration or something from electromagnetic waves, they think, energized that thing again and made it spark? This is weird. This is crazy.

But that was in the news today. There was good news on Netflix today. I didn't see what it is. Netflix is one of the stocks we got back into last week. I know they had a couple of upgrades. Must be. It's up 3.8% today.

And when they said stocks on the move. Upgraded by Moffitt Nathanson in terms of monetizing some of the ad piece and the other subscription side of things. I know my subscription went up recently, so they had to have – I forget how many percent it was. I forget what the math was, but it should translate into earnings for them. And I think they're the best –

of what's gone on, all these different cross currents with all the news over the last, you know, really since this correction started,

None of it is going to, I think, would play into anyone getting rid of their subscription, right? Tariffs have nothing to do with it. Right, which is why we dipped our toe back in the water on that one. Yep, powerful earners. And, okay, let's see. The gold stocks are breaking out again today. Newmont's up 2.4%. I saw American Eagle was up.

Another good day for the gold stocks. Now let's go over to the NASDAQ and see where the green shoots are. Baidu, like I say, big China.

Baidu has a new, they have Ernie, an Ernie bot. They're a major player in artificial intelligence. I heard it's supposed to explain its thinking a lot. I mean, apparently it's supposed to explain how it comes up with these answers more. I guess maybe be more transparent. Who knows? Which kind of seems odd for a Chinese firm. Ask Ernie. Ask Ernie.

Ask Ernie, and he'll tell you. Dollar Tree up 2.1. Cadence up 2.7. Kind of missing from all of this are Amazon, Microsoft, the big tech, the fabulous 7, which would include Tesla, which has been under heavy, heavy fire recently.

Here recently. Then as I look at the Dow today, the winner there is going to be Walmart up 2.3. So I guess our retail sales numbers weren't all that bad. Nike's up 1.9. On the downside, you know, well, NVIDIA's down 1.4 today.

We did not get back into NVIDIA. That would be one that I have a high interest in. Amazon's down 1% today. Apple's down 1%. Apple's in day four of trying to form a bottom here. Microsoft, which kind of ended on a whimper. It sold off. It's trying to put in. It wouldn't be one I'd be real anxious to go back into right now. And Apple I have been sour on.

for a couple of years really and it hasn't done much so anyways that uh that's what's happening in the market today i would just say that it's encouraging okay this is a good time i i think my last message i sent out this morning before after the market opened i i said i'm in a buying mood

And I can't wait to go shopping after the market opens. And it's open and I've looked at a lot here so far. And I'm making a list and I'm checking it twice. But I'm pretty picky about going in. So anyways, if you're a live trading subscriber, you're going to hear from me today for sure.

one way or another. And again, that four-week trial, which includes the app and the newsletter and the daily alerts, is free for four weeks at GuntersonCapital.com. And I teach a lot.

You ought to see what I did, the opening article in the newsletter. I taught a bunch of principles and concepts with current examples. There's no better teaching tool than current examples from today's market.

And if you'd like to make an appointment with us via phone, Zoom, or in person down in Sarasota next Tuesday and Wednesday, 855-611-BEST. 855-611-BEST. Have a great day, everybody. ♪♪♪

This show is not a solicitation to buy or sell any securities. Bill Gunderson or clients of Gunderson Capital Management may have long or short positions in stocks mentioned during the show. Past performance is not indicative of future performance. Gunderson Capital Management is a fee-based registered investment advisory firm. All accounts are held at Charles Schwab. Schwab is a member of SIPC and FINRA.