Thomas Lee

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Last quote by Thomas Lee

The S&P 500 has been performing considerably above our base case so far in 2017 … The reason we have been more cautious is that these expectations are diverging from fixed income and credit markets where flattening curve (10Y vs 30Y and even 10Y vs 2Y) and widening HY [high yield] spreads … signal a more cautious growth outlook.feedback
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Apr 28 2017 Facebook
Find all of Thomas Lee’s quotes that have been published in 42 different articles on this page. Thomas Lee’s quotes are organized by date and topic, making it easy for you to compare, for example, what Thomas Lee has said both recently, and in the past, on a variety of topics. Some of the topics Thomas Lee likes to comment on include S&P and U.S.. Most recently, Thomas Lee said, “I think my biggest concern is that the stock market is betting on an acceleration in growth this year, even at a time when corporations might take a break until they figure out what tax reform looks like, and it's coming at a time when margin debt is so high. In the past, the bond market has been much better at ferreting out problems and smelling slowdowns; that's the message from the yield curve. So I think the bond market is really taking the position that growth is going to disappoint, and the gap between the hard data and the soft data is still pretty big.”.
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Thomas Lee quotes

I think it's easier for investors to bet on things that you don't require acts of Congress to change. Things that can happen by executive orders are the things that are investable. That's a lot of deregulation plays. … Where's earnings growth? It's coming from the banks, energy, materials, technology, even telecoms. I think that's the easier way to make money this year.feedback

We're going to see 10 percent plus comps later this year.feedback

I think it's possible that we're going to have a bumpy first half. It won't be a straight shot upward for stocks. The first half, we're going to have a draw-down by 5 percent. We essential have a policy 'put' in place. It's setting the stage for earnings to be the primary driver [of markets]. That's how you're going to pick stocks and sectors. This is pretty amazing. Two quarters ago, people were talking about peak earnings and peak margins. Now, all of a sudden, people think it's mid-cycle and we have the best earnings we've seen in over two years.feedback

We see tail winds building for the sector – higher interest rates/inflation, deregulation, pro-growth policy – all add upside to EPS and multiples.feedback

Since election day, one of the more obvious (and appropriate) shifts in investor frameworks is the shift from the Fed put ... to the policy put (Trump is pro-growth). And with this shift, sector and style implications are notably different – favoring groups levered to higher nominal GDP, higher inflation and de-regulation. As we discussed in our 2017 outlook, we see this favoring CRAP [computers, resources, American banks, phone carriers] as well as value stocks.feedback

We looked at close to 80 years of the performance of 164 industries. When a group severely lags, by at least 2,500 basis points or more, you almost always make money buying these things.feedback

Since 1977, a flattening of the long-term yield curve sees equities weak over the next six months.feedback

Moreover, as many investors are aware, telecoms and cable have suffered from 'liberal' expansion and definitions of net neutrality – hence, could benefit from a Trump administration.feedback

We continue to expect the market to finish the year higher [due to] Santa Claus rally, positive inflows and improving investor optimism. In 2016, portfolio strategy' mattered more than 'market calls.' We would add to telecom exposure.feedback

We believe telecom services may be particularly positive levered to rising inflation given it is such [a] capital intensive business with significant invested assets – hence, rising inflation raises the ROE of the embedded assets.feedback

Recalling why 1991 shows after 8 years of a bull, you need to embrace the rotation. At end of 1991, pundits and investors were skeptical of equities – noting high P/E, lack of benefit from 11 rate cuts, IPOs – perhaps not surprising given the stagflation that marked the previous decade. But that sure sounds like today … doesn't it?feedback

I think that the first half of 2017 could end up being pretty treacherous. It's just a fact. If you look at the first half of (the first year for) a new president, you usually see a pretty big drawdown. Three-quarters of the time it's usually almost 10 percent.feedback

And that means – don't do consensus trades. Focus on groups that have lagged in the last seven years; that means energy, basic materials, mining, steels, [communication] equipment, industrials, tech.feedback

Investors need to focus on laggards ... small-caps ... value – strategies we have argued all year.feedback

Trump looks to be both an 'inflation' and 'de-regulation' president–In our view, Trump is likely a bit of both Eisenhower and Reagan. Notably, the two longest bull markets in history 1953-1974 and 1982-1999 were preceded by a Republican 'revolution'–Eisenhower (1952) brought infrastructure spend. Reagan (1980) saw tax cuts and de-regulation.feedback

Things like corporate tax reform – investors just historically don't pay for that. So even though we think that's going to help corporate profits, it's not something that actually is going to help the stock market on a [private equity] basis.feedback

Political events are important, but they've proven to just be buying opportunities, and I think the mistake everyone makes is they try to be positioned into the event and then they're chasing the market.feedback

That's the 'short-termism' that really bothers me about investing. I think investors need to be thinking about the bigger stories like inflation, earnings trends.feedback

We still see the S&P 500 rallying into YE ... rising inflation is good for stocks.feedback

That's the thing we have to imagine: In a normalized rate world, equity is a great business [and] stock selection makes a ton of sense.feedback

We've almost created a generation of people who've compensated for low interest rates by doing things like buying dividend, going into private equity, seeking leverage in order to juice up returns. It's made equity management a terrible business.feedback

The bigger move has been this huge rotation … into the value names, small caps, the laggards. The irony is these were all trades that were working into Election Day, so they just all got turbo-charged.feedback

Trump victory [is] a surprise but path forward not all negative... Clinton had been the favored 'horse' in this election cycle for investors, so it is natural for markets to see Trump's win as a 'shock. We see 'negative' shock, weakness as short-lived ... a sustained and deeper sell-off can only be justified if Trump's victory leads to a U.S. recession.feedback

I would say it's actually bullish if we end up seeing a relief rally and it really engages investors and we see capital put back to work.feedback

Wage inflation sensitivity [is] beginning to impact stocks. Stocks with low wage sensitivity outperformed 1,590 bp [basis points] since May.feedback

This market has gotten a little dull, shrugging off earnings. Overall, it's been actually one of the better earnings seasons. Now we finally have positive earnings growth.feedback

The S&P, any time the high-yield market has been up 10 percent, has averaged a 22 percent gain. The stock market is only up 4 [percent].feedback

Poor relative performance remains a big issue for institutional investors, setting up the likelihood of a performance chase. So we are still buyers of the dip.feedback

We see 3Q16 as a positive catalyst, marking the end of the earnings recession. The bottom line, in our view, is that we are seeing the positive turn in sales. Central to our positive stance on equities in 2016, is the view that 3Q16 would mark the turning point for earnings (oil fade, USD fade, etc.) and indeed, 3Q16 is shaping up to be a key inflection point.feedback

With revenue growth accelerating higher, oil stabilizing, USD headwinds fading, we believe US corporates will surprise on EPS.feedback

Investors need to buy technology stocks ... whenever sentiment [is] this negative.feedback

Sentiment is so negative, it is at an extreme for sell-side strategists (target price) and for individual investors (AAII % bulls less bears). Strategists [are] so bearish, their S&P 500 target has zero upside.feedback

If Deutsche Bank leads to a true ceasing of credit markets and credit access and liquidity then that itself, because of the effect it would have on the underlying economy, it could drive us into a recession and that would be bearish.feedback

I don't think it's created a bubble. I think it's very scary to hear a presidential candidate, though, say … that he's going to inherit a huge bubble.feedback

The global search for yield has driven outperformance of most dividend payers. However, we have identified several laggards with materially better dividend yields, positive fundamental outlooks, strong balance sheets, and reasonable payout ratios.feedback

They had such leadership for the last seven years, and it's rare for stocks to continue to lead like that.feedback

You have to remember, because people have anticipated this, I think exposure is low, and that's why there's a chance for people to do some panic buying.feedback

Since the start of 2016, NYSE margin debt and the S&P 500 have diverged.feedback

The equity has yet to reflect this and as we noted in the past, we believe credit leads equities.feedback

The economic background remains supportive of growth-oriented trades, as the July payrolls, along with solid ISM readings and also recent chatter on fiscal stimulus are positive for risky assets. We are upgrading consumer discretionary to OW [overweight] from N [neutral], as we see an opportunity for this group to outperform the S&P 500 between now and year-end.feedback

In 1990, bond yields stabilized ? after huge declines from '82 to '90, and there were a lot of investors who thought the bull market would run out of steam in 1990, and they missed really the 10 years of the biggest returns in the stock market.feedback

We see 2016 as ripe for a regime shift and as such, given telecom's 4-years of consecutive underperformance, is the turn for Telcos. Between telecom stocks and utilities, as the P/E and dividend differentials have reached extremes...Telecom [is] the most logical convergence trade to utes [utilities] in 2H16.feedback

We are scared about the month of August. A few recent developments suggest August is likely to be a down month. We are not changing our views and we remain buyers of weakness – however, for our tactically minded clients, it may make sense to fade strength and be prepared to add to weakness in August.feedback

There's very limited supply of U.S. bonds this year. That's actually helping dividend stocks. So we like the idea of consistent dividend payers, but also value stocks.feedback

Gold is an alternate currency. It makes a lot of sense for investors to have some exposure because there're concerns with negative rates and regime changes and Brexit and central bank uncertainty. It makes other currencies less attractive than gold.feedback

It's hard to ignore that U.S. yields are a lot higher on an absolute basis than a lot of other countries which have less credit worthiness than the U.S. It's an argument for yields to continue to inch downwards.feedback

There's always negative bubbles created when people get too worried.feedback

We would be buyers of an upside breakout – in other words, we do not think this breakout attempt will fail like it did in 2015. Upside breakout will be led by small caps due to ISM export recovery.feedback

These are all setting the stage for growth to pick up, and I don't think that's what investors are expecting. I think everyone's worried about 'Brexit' and the Fed.feedback

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