TOM LEE: "BUY THESE 6 STOCKS IN 2024 AND NEVER WORK AGAIN"

Summary

In this video, the speaker discusses Tom Lee's recommendation of six stocks for 2024: Nvidia, Meta, Uber, Tesla, Eli Lilly, and Palantir. The speaker evaluates each stock using a 10-point system based on metrics like revenue growth, net margins, and PE ratio. Nvidia and Meta scored the highest, with Meta nearly acing the test. Uber and Eli Lilly performed poorly due to high debt and inflated PE ratios. The speaker also emphasizes the importance of long-term investing, using dollar-cost averaging, and maintaining discipline to achieve financial success.

Takeaways

• 🚀 Tom Lee, a prominent analyst, has released a list of six stocks he recommends for 2024: Nvidia, Meta, Uber, Tesla, Palantir, and Eli Lilly.
• 📊 The speaker applies a 10-point rating system to assess stocks based on criteria like revenue growth, net margin, cash increase, institutional shareholding, and price-to-earnings (PE) ratio.
• 🥇 Meta scored the highest in the analysis with a 95/100, due to its strong fundamentals, scalability, and reasonable PE ratio.
• 💼 Nvidia scored 90/100, mostly penalized for having a high PE ratio, but it still ranks among the top due to strong revenue growth and financials.
• ⚡ Tesla and Palantir both scored 85/100, missing the 90+ range due to slightly lower institutional shareholding and high PE ratios.
• 📉 Uber and Eli Lilly did poorly in the analysis, with Uber scoring 65/100 and Eli Lilly being the lowest performer, primarily due to weak fundamentals like debt levels and high PE ratios.
• 💰 The speaker emphasizes that while hype can drive stock prices in the short term, long-term success is tied to fundamentals, which is why Uber and Eli Lilly are not recommended.
• 📈 The speaker prefers investing in Tesla and Palantir despite Meta and Nvidia having higher scores, as these stocks offer greater potential upside due to their market caps being relatively lower.
• ⏳ The strategy discussed involves consistent monthly investments, doubling down when the stock price drops 20% below the 52-week high.
• 👥 The speaker recommends joining a support group or community to help maintain emotional discipline in long-term investing, highlighting the importance of patience in wealth building.

Q & A

What are the six stocks mentioned in the video for potential investment in 2024?

The six stocks mentioned are Nvidia, Meta, Uber, Tesla, Eli Lilly, and Palantir.

What evaluation system does the speaker use to analyze these stocks?

The speaker uses a 10-point evaluation system with ten criteria, each having a perfect score of 10. The criteria include revenue growth, net margins, cash increase, assets vs liabilities, cash vs debt, short interest, institutional shareholding, scalability, investor returns since IPO, and price-to-earnings ratio (PE).

Which stock scored the highest on the evaluation, and what was its score?

Meta scored the highest on the evaluation, receiving a score of 95. It excelled in all areas except for the price-to-earnings ratio (PE), which was 28, leading to a slightly lower score in that category.

Why did Nvidia not receive a perfect score in the evaluation?

Nvidia scored a 90 because its price-to-earnings (PE) ratio is currently above 30 (at 60), which lowered its score. However, it performed well in other categories.

What reasons were given for excluding Uber and Eli Lilly from strong recommendations?

Uber and Eli Lilly were excluded due to weaker fundamentals. Uber scored 65 due to its high PE of 80, more debt than cash, and reducing cash flow. Eli Lilly scored the lowest, with a PE of 108, more debt than cash, and reducing cash, making it less attractive despite the hype.

What strategy does the speaker recommend for long-term investing?

The speaker recommends using a system of dollar-cost averaging (DCA), where you buy a fixed amount of stock every month regardless of price. Additionally, they suggest doubling down when a stock's price drops 20% below its 52-week high, ensuring an average price closer to the bottom without trying to time the market.

Why does the speaker have a larger portfolio allocation in Tesla and Palantir compared to Nvidia and Meta?

The speaker believes Tesla and Palantir have greater potential for growth relative to their market capitalization. For example, Palantir, currently valued at $80 billion, has a higher chance of growing to $800 billion compared to Nvidia growing from $3 trillion to $30 trillion. This potential for larger returns makes Tesla and Palantir more attractive for his portfolio.

How does the speaker view the short-term stock market movements?

The speaker believes that short-term stock market movements are driven by psychology, trends, and media, which often have little to do with fundamentals. As a result, they emphasize not being swayed by short-term fluctuations and instead focusing on long-term fundamentals.

What does the speaker suggest investors should do when a stock drops below a certain price threshold?

The speaker recommends doubling down on stocks when their price drops 20% below the 52-week high. For example, for Tesla, the trigger price is $216, for Palantir it's $30, for Nvidia it's $112, and for Meta it's $460.

What advice does the speaker give to investors who have already bought 'bad' or underperforming stocks?

The speaker advises investors to identify the 'garbage' stocks in their portfolio and remove them. They suggest watching a separate video on how to analyze and eliminate underperforming stocks without making costly mistakes.

Outlines

00:00

💥 Tom Lee's Six Stock Picks for 2024

Tom Lee, a top analyst, has shared six stocks that he believes can turn investors into millionaires in 2024. These stocks include Nvidia, Meta, Uber, Tesla, Eli Lilly, and Palantir. The video presents this list upfront and promises to analyze each stock further, revealing which ones are truly solid and which are overhyped. The speaker encourages viewers to stay and learn how to assess stocks using a scoring system based on various factors like revenue growth, margins, cash reserves, and more.

05:01

📝 Scoring System Breakdown for Stock Evaluation

The speaker introduces a 10-point scoring system to evaluate each stock. Factors include revenue growth, net margins, cash reserves, institutional shareholding, and price-to-earnings (PE) ratio. Each factor is scored, with the highest possible total score being 100. The analysis aims to show viewers how to apply this method to any stock. Using this system, Nvidia, Tesla, and Palantir scored highly, with Meta achieving a near-perfect score. On the other hand, Uber and Eli Lilly failed to meet expectations, falling short on key financial metrics.

10:01

📈 Meta and Nvidia Lead, But Uber and Eli Lilly Fall Short

Meta scored the highest at 95, followed by Nvidia at 90, Tesla and Palantir tied at 85, and Uber and Eli Lilly scored much lower. Uber's high PE ratio and negative cash flow raise red flags, while Eli Lilly's massive PE of 108 is deemed unsustainable. Despite the hype, these two stocks don’t have the fundamentals to support their market values. However, the speaker emphasizes that this system doesn’t account for short-term market trends, which could still lead to gains for Uber and Eli Lilly, even if fundamentals are lacking.

🤑 Why Tesla and Palantir Dominate the Speaker's Portfolio

While Meta and Nvidia performed well in the evaluation, the speaker's portfolio is heavily weighted towards Tesla and Palantir. The reasoning is that these two companies have more room for growth compared to Meta and Nvidia, which already have enormous market caps. The potential upside for Tesla and Palantir is seen as greater, especially given Palantir's current $80 billion valuation. The speaker also holds 40% of the portfolio in the S&P 500 as a safety net, believing strongly in the strength of the U.S. economy.

🛒 Timing the Market: The Speaker's Buying Strategy

The speaker advises against waiting for a market pullback, arguing that timing the market is unpredictable. Instead, they advocate for a dollar-cost averaging (DCA) strategy, buying a set amount of stock each month. When stock prices fall 20% below their 52-week highs, they double down on their purchases. Current thresholds for doubling down include Nvidia at $112, Tesla at $216, and Meta at $460. The approach is based on consistency and long-term conviction in the companies, ignoring short-term news or market fluctuations.

⏳ Patience: The Key to Long-Term Wealth

The speaker emphasizes Warren Buffett’s philosophy of getting rich slowly. Their system requires patience, as it may take 3-5 years for investments to fully materialize. Many investors fail because they lack the patience and discipline to stick with a long-term strategy. The speaker also highlights the importance of a support system to avoid emotional decision-making. They invite viewers to join their community for guidance and support, noting that this approach works as long as investors maintain conviction and monitor their companies’ fundamentals over time.

🚨 Limited Offer: Join the Academy Before Prices Rise

The speaker promotes their investment academy, offering membership at a discounted price of $35 before it rises to $99 on October 1st. They stress that the lower price is temporary due to overwhelming demand, with nearly 6,000 members signed up. The academy offers support, education, and community to help members stay disciplined in their investing. For those with underperforming stocks, the speaker directs them to a video on how to identify and eliminate 'garbage' stocks from their portfolios, ensuring they only keep high-quality investments.

Keywords

💡Analyst

An analyst in the context of the video refers to a professional who examines financial data to predict trends and make recommendations for investments. Tom Lee, mentioned in the script, is an example of a successful analyst who has provided a list of stocks to buy. The role of an analyst is crucial as they guide investors in making informed decisions based on their research and expertise.

💡Stocks

Stocks are shares in the ownership of a company. The video discusses a list of six stocks recommended by an analyst for potential investment in 2024. Stocks are the primary focus of the video, as they represent the assets that viewers are encouraged to consider buying for potential long-term gains.

💡Investment

Investment in the video refers to the act of putting money into stocks with the expectation of making a profit. The script encourages viewers to invest in the recommended stocks, highlighting the potential for these investments to yield significant returns over time.

💡Revenue Growth

Revenue growth is a key financial metric that indicates a company's ability to increase its income over time. In the script, revenue growth is one of the criteria used to evaluate the potential of the recommended stocks. A company with consistent revenue growth is often seen as a strong investment opportunity.

💡Net Margin

Net margin, also known as net profit margin, is a measure of profitability that shows how much profit a company makes for each dollar of revenue. The video uses net margin as a criterion for stock evaluation, with a higher percentage indicating a more profitable company.

💡Cash Increase

Cash increase refers to the growth in a company's cash reserves over time. The video script mentions this as an important factor in evaluating a company's financial health. A company that increases its cash reserves is typically seen as more stable and potentially a better investment.

💡Short Interest

Short interest in the context of the video refers to the number of shares that have been sold short but have not yet been covered or closed out. It is used as an indicator of market sentiment. A high short interest can suggest that investors are betting against a stock, which could be a factor in the video's analysis of investment potential.

💡Institutional Shareholding

Institutional shareholding refers to the percentage of a company's shares that are owned by large institutions like mutual funds, pension funds, and insurance companies. In the video, a higher percentage of institutional shareholding is seen as a positive sign, indicating confidence in the company by professional investors.

💡Scalability

Scalability in the video refers to a company's ability to grow effectively as it increases its operations. The script mentions scalability as a criterion for evaluating stocks, suggesting that companies that can scale efficiently are more likely to succeed and provide returns to investors.

💡Price to Earnings Ratio (PE)

The Price to Earnings Ratio (PE) is a valuation ratio of a company's current share price compared to its per-share earnings. It is used in the video to assess whether a stock is overvalued or undervalued. A lower PE ratio is generally preferred, as it suggests the stock is cheaper relative to its earnings.

💡Disciplined Investing

Disciplined investing, as discussed in the video, involves following a systematic approach to investing, such as regularly buying stocks regardless of market conditions. This strategy is advocated as a way to avoid emotional decision-making and to potentially achieve long-term investment goals.

Highlights

Tom Lee, a well-known analyst, shares six stocks to invest in for 2024 that could yield significant profits: Nvidia, Meta, Uber, Tesla, Eli Lilly, and Palantir.

The video emphasizes transparency by providing the stock list upfront before diving into the analysis, promising not to waste viewers' time.

Tom Lee's approach to stock analysis includes a 10-point grading system with criteria such as revenue growth, net margin, cash increase, assets vs liabilities, institutional shareholding, and price-to-earnings ratio (PE).

The grading system gives perfect scores for companies with PE ratios under 10 and downgrades those above 30, with Nvidia scoring high but not perfect due to a PE of 60.

Nvidia receives a score of 90, Tesla 85, and Palantir 85. Despite their high marks, none scored a perfect 100 due to minor shortcomings like PE and institutional shareholding thresholds.

Meta stands out with the highest score of 95, thanks to its excellent performance across all categories, including revenue growth, margin, cash increase, and scalability since IPO.

Two companies, Uber and Eli Lilly, performed poorly on the test, scoring 65 and 55 respectively, with issues in net margin, debt, and liabilities outweighing assets.

Uber’s high debt, low net margin, and decreasing cash reserves led to a score of 65, raising concerns about its fundamentals despite market hype.

Eli Lilly's 108 PE ratio, coupled with more debt than cash and reducing cash reserves, led to its low score and highlighted the disconnect between its fundamentals and market valuation.

Tom emphasizes that the market can sometimes defy fundamentals, as stocks like Uber and Eli Lilly may still rise due to trends, media, and investor psychology.

His system recommends focusing on strong fundamentals for long-term success, acknowledging that short-term market movements can be unpredictable.

The core of the investment strategy is discipline and dollar-cost averaging (DCA), continuously buying stocks monthly regardless of market volatility.

He advises doubling down on stocks when their price drops 20% below the 52-week high, allowing investors to average out the cost over time.

Meta, Nvidia, and Tesla are close to their 52-week highs, while Nvidia’s stock is trading close to the threshold where doubling down could be a good option.

Patience is key in Tom’s system, with the expectation that it takes 3-5 years to see meaningful returns, following Warren Buffett’s approach of 'getting rich slowly.'

Transcripts

folks this is huge Tom Lee one of the

best analysts in the business just

released a list of six stocks to buy in

2024 and never work again because I

remembered when I started in this

business someone says you don't get

fired for recommending Coke Coca-Cola

not yeah yeah um well either way yeah so

and so most people always play in the

middle of the Fairway according to Tom

Lee who's one of the most successful

analysts in the business and the head of

funstra these six stocks will make

millionaires in 2024 now in my video

the bottom line always comes first so

before I say a single word about

anything here is the list of the six

stocks so I don't hold you hostage don't

click nothing don't smash nothing don't

buy nothing just listen the six stocks

are envidia meta Uber Tesla Eli paler

and if all you needed is the bottom line

if all you need it is that six stock

list here we go you're free to leave I'm

not angry in fact I I don't care since

this isn't the way I make my living but

I suggest you give me about 30 seconds

of your time to convince you to stay

because I'm about to blow your mind and

make you a lot of money because I'll do

in this video what most mainstream media

most creators out there they're not

going to show you I'll tell you which

ones of the six stocks are the

pretenders and which ones are the real

ones which one is legit and which one is

total and trust me there's two stocks on

this list which have fallen miserably on

their face despite the hype and it's not

the stocks you think trust me now Look

the cost of doing business is making

mistakes Tom Le is not immune to that

myself I'm not immune to that I don't

think you should follow anybody blindly

not Tom Lee and not Tom Nash what I'm

doing in this community is teaching

people how to think for themselves how

to create a process which they trust and

make their own decisions I'm not about

to feed you fish so what I'll do in this

video is I'm going to show you how I

analyze these six stocks and I'll tell

you which one of them are real and which

one are completely fake and that system

which you learn in today's video you can

apply to any stock out there within

minutes the test basically includes 10

items each item has a perfect score of

10 a fail of zero and a medium score of

five okay very very simple number one

did the company grow its Revenue over

the past three years the perfect score

gives you a 10 here does the net margin

goes above or below 10% as you

understand above 10% is a perfect score

5% is a medium and Below 5% is a zero

cash increase did the company increase

its cash over the past three years does

the company have more assets than

liabilities does the company have more

cash than debt does the company have a

short interest of below 5% below 10% or

above 10% does the company have 50% % or

more of institutional shareholding does

the company grow its revenues faster

than it's growing its expenses

scalability and how much did the company

do for its investors since IPO and the

last one is PE price to earnings is it

above or below 30 any stock that is

above 30 does not deserve a full score

of 10 any stock that is between 10 and

30 deserves a five and anything below 10

PE deserves a perfect score now as you

will see in this test we have two

companies that absolutely have fallen

flat on their face not the ones you

think we have four companies that have

done really well and we have one company

that pretty much gotten the perfect

score now let's play a little game here

you guess which company has come very

very close to a perfect score which is

pretty much as close as you can get

under the system comment below before I

reveal this and let's see how many of

you got it right because most of you

will not I promise you it's going to be

surprising now very very quickly put it

down in the comments and let's get to it

I'm not about to waste people's time

here in this video number one Nvidia so

Nvidia scored 90 on this test which is

one of the highest scores we have ever

seen the only reason Nvidia did not get

a perfect score is because it has a PE

of above 30 now its PE currently is 60

it's not horrible but it is above 30

that is why it's a 90 stock still very

high Tesla scored an 85 which is really

and 90 and I'll tell you why Tesla's

institutional shareholding is 47% which

is just shy by 3% of a perfect score on

that 50% threshold which means Tesla

just barely barely got 85 instead of 90

but it also lost 10 points the same way

Invidia did with 67p which is about 30

penter with 85 for the same reason 42%

institutional shareholding very close to

that 50% but not quite there yet just

about 2 years ago it was at 30% so it's

moving along nicely but not there yet so

85 for paler 85 for Tesla 90 for NVIDIA

and the perfect score of 95 that's as

close as you can get to perfect score in

this test goes to meta now meta actually

scored a 95 because it has a PE of 28

now 28 is below 30 but above 10 which

means it only got five out of 10 on that

test 95 but it completely aced every

single test Revenue growth margin cash

increase more assets than liabilities

more cash than debt short interest below

5% above 50% institutional shareholding

scalability since IPO it went ballistic

and the PE is actually below 30 that is

the highest score we have ever seen on

this test So Meta actually blew

everybody out of the water Nvidia Tesla

and paler had great scores but these two

companies actually fell flat on their

face and the hype around them seems more

air than anything else number one Uber a

company that scored 65 now high PE with

80 more debt than cash only 5% net

margin and reducing cash so this company

basically does not have the fundamentals

to justify the hype maybe they will get

better maybe they will blow up I don't

know right now they're not good enough

eliy you guys have brought it to 108 PE

of all this hype I get it I understand

the hype at 108p with more debt than

cash with more liabilities than assets

with reducing cash it doesn't make sense

Eli liy scored the lowest on our test

with the highest PE except paler which

is a whole different story paler has a

crazy PE I get it but give it a year

it's going to get better now look it

doesn't mean that eliy or Uber and or

both cannot go through the stratosphere

for the next year it doesn't mean that

stocks in the short term can do crazy

things it's not about fundamentals it's

about psychology Trends media all this

stuff that have nothing to do with

fundamentals so don't come out me in

about a year saying oh my God El has

doubled itself it may happen I don't

know but my system works 80% of the time

I know I'm going to miss a few because

I'm being a tight ass that's fine but

right now based on my system I would

exclude Uber and eliy and I would

absolutely love the other four stocks

but the next question you should ask

yourself is well Tom you just said that

meta scored the highest Nvidia scored

the second highest and then Tesla and

paler were tied for three and your

portfolio only has Tesla and paler in

fact paler had 40% and Tesla at 20% how

come Tom well what about meta Nvidia

such great companies great scores well

I'll explain look I have no doubt that

these four companies Nvidia paler Tesla

and meta are some of the best companies

in the land they're some of the best

they'll be dominant for the next 5 to 10

years they're incredible amazing

companies with all the right things all

the right ingredients I'm not saying

that but look at the valuation the

market cap of Nvidia is currently $3

trillion how much more can you get out

of this lmon if it doubles and go to $6

trillion which would be insane but it

might happen you make a 100% of your

money and that's great if Nvidia goes

from 3 trillion to 6 trillion you have

doubled your money and that may happen

if meta goes from 1.4 trillion to three

trillion you've double your money again

incredible right but I'm looking at

paler and I'm saying well paler is

basically the next Microsoft in the

making and they're currently trading at

$80

billion the chances of pal going from 80

to 800 billion are a lot higher than

Nvidia going from3 to30 trillion at

least the way I see it so the upset in

paler is a lot bigger for me as an

investor than it is in Nvidia and that

is why Tesla 800 billion is only 20% of

my portfolio and paler is that 40%

position well Tom what about the other

40% well that is in the S&P 500 that is

because I'm not an idiot and I'm not

about to bet against the US economy

which is undefeated S&P 500 is my

security blanket and it's always going

to be there now the challenge for you as

a long-term investor is the fact that

great companies are trading at a premium

and these companies mostly are very very

close right now in their pricing to

their 52e high price so what do you do

with it do you wait do you get a better

price do you wait until the collapse the

fall the drop back the pullback whatever

you call it no because you never know

what the stock market is going to do in

the short term the stock market might

fly up in the next year and these stocks

might double price before they pull back

again we simply don't know what we do is

we allocate a certain fixed amount every

month and we buy that like clock work

now the minute the stock drops below a

certain price point which I'll talk to

you about in a second we actually go and

double down so essentially we're writing

the average of the stock but every time

the stock dips we actually Double Down

creating a weighted average that gets

very close to the bottom of the price

without timing the market even once this

system is pretty much guaranteed the

only thing you need is time this thing

takes 3 to 5 years to materialize and

that is the problem Warren Buffett said

it I think the best people would love to

get rich they all want to get rich

nobody's willing to get rich slow this

system takes years but it is proven how

many of you have the balls the kones and

the patience to do it well let's find

out now I also told you something that I

haven't explained I told you that we

double down on the stock once it hits a

certain threshold price but what is it

well for each stock we calculate quite

simply it is 20% below the 52 we high

for Tesla the 52 we high is 271 which

means that any price below 216 is our

trigger amount for piler is 38 so

anything below $30 is a trigger amount

for NVIDIA it's 140 which

means2 is our trigger amount for meta

it's 577 which means $460

is our trigger amount anything below

these amounts triggers the Double Down

process for us it's very very simple now

Tesla paner and mea are basically almost

touching their 52 week highs so they're

nowhere near that threshold amount but

surprisingly Nvidia which is one of the

best companies in the land is currently

trading at $121 which is very close to

that 112 which means it's almost there

if Nvidia drops just another 10% it's

going to get into that region where we

want to double down which means instead

of $100 every month 200 every single

month until the stock climbs up above

112 again very very simple ignoring the

news ignoring the hype ignoring all the

fomo all the Panic the only thing we

care is that the company fundamentally

does not deteriorate we still want to be

a shareholder and we look at the price

and we buy more on weakness we buy a

little bit less on strength and we keep

doing it for 3 to 5 years eventually

getting to a very comfortable position

now look this system basically teaches

you discipline it teaches you conviction

and it allows you to become an

absolutely Carefree person not giving a

freak about what's going on in your

portfolio in the short term which I

think is a huge reward for anybody who

wants to enjoy life we have limited

amounts of freaks to give in life let's

use them for smart things not for this

this system only requires you to

research good companies and then the

automatic system takes over and just

keep buying and selling all you have to

do is monitor the companies you invest

in and make sure they're still as

attractive as they were a year two year

three years ago now here's the thing the

DCA thing works it is proven the only

thing you need is conviction patience

and a support group we have that we have

a 20,000 member Discord which will

prevent you from doing emotional

and will keep you in line doing

exactly the smart logical decisions you

need to make I invite you to join our

Academy and a few days ago I dropped the

price to $35 for 24 hours since then the

amount of people who signed up was

incredible we're almost at 6,000 members

right now now a lot of you have asked me

to continue this and I will allow it

which means that as of October 1st the

price goes back from $35 back to $99 and

will never ever drop again to 35 No

Matter What It's Gone Forever the reason

is and that's the reason I'm not bsing

you on this is because we are already

over subscribe in the academy we need to

slow it down a little bit we need to

slow down the pace at 99 we're about to

have a slower sign sign up and that's

okay I don't need more people right now

I have enough but I don't want to close

the door too quickly so you have until

the end of the month don't tell me I

didn't give you the chances to join at

35 that's the end of it now before you

go one important thing I get this

question from almost any new member here

before I learned the system I've bought

a bunch of garbage and now my portfolio

is filled with bad companies loser

companies what do I do with this I've

made a video exactly for that purpose

how to identify which stocks in your

portfolio are garbage that needs to go

which ones are Keepers and how to get

rid of them if you don't want them in

your portfolio without making stupid

mistakes that video is on the screen

right now the video is very

straightforward it's going to teach you

how to identify and how to remove these

bad cter stocks from your portfolio in

about 10 minutes go watch it right now

thank me later I'll see you next one

peace