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.