🗞 Let's Go Stock Picking

WHILE YOU POUR THE JOE… ☕️

I guess we can trust Vanguard’s outlook on where opportunities can be found across financial markets right now.

Here’s the nutshell:

• The S&P 500 is the most overvalued market in the world

• Only opportunities in the United States are found in “value” stocks and small caps

Let’s expand a bit on the idea of “value” and where it stands right now ⬇️ 

In the orange spread, you can see how value stocks ($IVE) are beginning to outperform growth stocks ($IVW), so far, so good for Vanguard.

But,

Crude oil isn’t catching up to this narrative, so you have to consider the fact that this move won’t have much economic growth attached to it.

Which is why our stock selection is shifting to a very specific niche right now. 👀 

A niche that has delivered over 10% portfolio returns for our Deal Room members. This is an opportunity you can grab onto right now.

Get a 7 Day Free Trial, and 10X your membership investment likely before it’s even due:

Speaking of niche opportunities, let’s get on with today’s email 📧…

A DIFFERENT MARKET
Forget Everything You Know

Warren Buffett and Charlie Munger were successful at two things:

1. Compounding capital

2. Romanticizing the stock market through value investing

However, times have changed, and so have the ways that information gets spread around in markets.

Far from saying that the efficient market theory is alive, we are in an industry that gets pretty close to it.

Let me explain,

The turnover ratio, or how much money goes in and out of the stock market, is on a secular decline that started last decade.

In other words, there is much less trading in the stock market. 📉 

Think about it, though, every retail trader you know (maybe even yourself) trades way too much and way too often, so they are literally going against the industry trend and paying the price for it.

They also don’t represent a big percentage of all the money that is moved in the financial markets, which means the big guns (investment banks and hedge funds) aren’t trading that often either.

I can attest to this, as my final days at Goldman Sachs were dedicated to studying the trading department.

This is what I found:

1. New trading hires needed to have a programming or mathematics background (quants)

2. Old trading employees were being trained on a new strategy that is much slower in nature

Leaving you with two options, that is, if you really want to perform in the financial markets.

Either become a world-class programmer, or learn long/short equity trading.

Here’s a quick way to learn the approach, which is super counterintuitive to everything we have learned from Buffett and other value investors.

You must identify the industries that are positioned for breakouts/breakdowns, then dig deeper into them and find the outlier stocks and the reasons why they trade that way.

In previous newsletters, I showed you why the retail and furniture space was a good place to start finding some ideas:

• Floor & Decor (FND) is the “expensive” name there at a forward P/E of 29x

• Williams-Sonoma (WSM) is the “cheap” name at a forward P/E of 21x

Differentiating them is the forward EPS growth expectations set for the next 24 months, 15% and 5% respectively.

This is why FND has outperformed WSM since we put on this long/short equity trade.

Now that you understand how today’s market works and how it will keep on working, it’s time to get yourself some “premium” stocks and find the proper hedges to go along with them.

Then you have a market-neutral portfolio that lasts from 1-3 months on average, and align yourself with how the big money is currently trading and investing.

These premiums and discounts are just the beginning of coming up with an idea; there is a lot more work that goes into putting on a winning trade.

Such as:

• Financial & Valuation modeling

• Modeling the long/short spread and making sure it works

• Managing risk parameters and catalysts

If that’s all new to you, that’s okay.

Because I have a gift for you today, after you take away this list of stock picks, to go digging into.

With a 7 Day Free Trial in our Deal Room, you’ll be exposed to how a Goldman Sachs analyst puts together these ideas, models them, and puts them to work in real time.

Grab a seat in our Deal Room, it’ll change the way you look at trading forever. ✅ 

Also,

Knowing how sluggish stock returns could be in the next decade, broken down by Vanguard, here’s a way for you to diversify your investments in an entirely different market ⬇️ 

GO AND MAKE IT HAPPEN
Taking Inventory

Outperforming the market doesn’t have to be a science or an art.

But it should be a systematic process you can repeat month in and month out, using some of the concepts we’ve broken down for you today.

It’s exactly how I can achieve returns like this (a managed client account, running since late October 2025) ⬇️ 

Why would someone trust me with their savings?

Simple.

I don’t trade based on chart patterns and other useless information; I use the real edge that is very much alive today.

Now you can learn the fundamental truths of this strategy, completely for free, in this five-day email crash course below.

To your success,

G 🥃