TOM LEE: "BUY THESE 6 STOCKS IN 2024 AND NEVER WORK AGAIN"
Summary
TLDRIn 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
💥 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.
📝 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.
📈 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.
Mindmap
Keywords
💡Analyst
💡Stocks
💡Investment
💡Revenue Growth
💡Net Margin
💡Cash Increase
💡Short Interest
💡Institutional Shareholding
💡Scalability
💡Price to Earnings Ratio (PE)
💡Disciplined Investing
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
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