Whitney Tilson on letting winners run as market hits new highs

Jeffrey Hirsch, editor-in-chief of the Stock Traders’ Almanac — chief investment officer at Hirsch Holdings — says that calendar effects and seasonal sell signals may be indicating that it's time to "sell in May and go away," but he says long-term investors have plenty of reason to remain bullish enough thanks to election effects and more that investors "have no need to go away," so long as they can put up with the market's increased chop over the summer. Hirsch noted that the election effects suggest that the market will benefit from having a second-term president — regardless of who wins in November — but that there tends to be weakness in the first two years of any lame-duck president, which means he may take a more cautionary stance once the election passes in November. John Cole Scott, president of Closed-End Fund Advisors — chairman of the Active Investment Company Alliance — talks about the good and bad in recent industry trends that have fund sponsors taking steps to keep a lid on discounts and to reduce a fund's potential attractiveness to activist investors, as well as the trend towards managed payouts and how investors should size up distributions that might be connected more to marketing materials than to what a fund actually can deliver.  In the Market Call, Tom Plumb, president and chief investment officer at the Plumb Funds, covers growth stocks with disruptive technologies and business plans.  

Simeon Hyman, global investment strategist at ProShares, is doubling down on a forecast he made before 2024 started, in which he said the outcome of the year for the market and economy was not "all about the Fed." He says the Federal Reserve's grip on the economy has eased, largely because the long end of the yield curve is free from the tight grip of the Federal Reserve. With the long end of the yield curve driving equity prices, Hyman thinks the market can find more room to run, and that's what he is expecting, although he does think there is an economic downturn with a soft landing in our near future. Hyman notes that valuations remain difficult, though he explains how using equal-weighted funds should pay off a little better moving forward. Todd Rosenbluth, head of research at VettaFi, turns towards an all-purpose commodity fund for his "ETF of the Week," Cassandra Happe, an analyst at WalletHub, discusses how consumers expect to use credit cards to pay for their summer travel and how they can help themselves with the right credit-card deal. And in the Market Call, Brian Frank of the Frank Value Fund talks about absolute value investing at a point when the market is near record highs.

Jose Torres, senior economist at Interactive Brokers, expects consumers to keep spending and to help power the economy through at least the end of the year without a recession, but he notes that if the Federal Reserve ultimately decides that it's going to 2 percent inflation or bust, there will be a bust for the consumer and the economy, with the current party ending in a potentially protracted period of struggles. Jack Nelson, portfolio manager of the global emerging markets sustainability strategy at Stewart Investors, says that while many investors are avoiding China, it's important to not be so fearful as to miss out on the opportunity that a number of companies there represent, due to valuations that are more compelling in much hotter markets like India. Sarah Foster, analyst at Bankrate.com discusses the site's latest survey showling that while nearly nine of 10 Americans know what financial success looks like in their life, only one in four think they will achieve it. Plus, Chuck answers a listener's question about whether it's time to convert traditional long-term retirement savings into Roth IRA accounts.

Ryan Detrick, chief market strategist at the Carson Group, notes that the economic news and growth remain so strong that "the odds of recession are quite low."Detrick notes that 10 of 11 sectors in the Standard & Poor's 500 are higher year-to-date, which is why his firm is overweight in equities generally, and has been adding to financials and industrials in particular. Detrick says there are several disconnects between hard and soft data -- soft data shows low consumer confidence but hard data shows strong retail sales -- and he is trusting the hard data to see the economy continue to broaden out for the remainder of the year. Also on the show, Chuck explains how the new securities settlement standard of "T+1" will affect individual investors, and while he explains that the changes are minimal and won't be noticed by a lot of everyday investors, he also lays out that virtually every stock, bond and ETF trade moving forward will be impacted by the new rules. Plus, in the Market Call, long-time CNBC contributor Ron Insana, the chief executive officer at iFi AI, showcases his platform's technology, which brings together artificial intelligence and stock market data to decide which securities are likely to go on big runs in the next week, month and year.

Jeff Bishop, chief executive officer at RagingBull, says that the market is showing signs of topping out, though he thinks that the building downturn now will likely be short and not too steep before a rally again chases record highs. Bishop notes that "all of the bears have been destroyed," so there are few investors betting against the market, which is typically a sign that trouble is ahead. Bishop notes that those bearish investors were tired of their losses, and that betting against the market now would be risky, but he says there is more downside risk than potential upside right now. Sam Millette, senior investment strategist at Commonwealth Financial Network, says that as the market adjusts to the Federal Reserve delaying rate cuts as long as possible, it will set up the market for a better second half of the year. Stephen Minar, head of closed-end funds at BlackRock, discusses how discounts drive money flows into closed-end funds, but they also attract activist investors whose actions may be harmful to others. BlackRock has created some initiatives to fight back, reducing discounts but hoping to increase a closed-end fund's consistency. And in the Market Call, David Brady of Brady Investment Counsel returns, and is the only guest who tackles the ticker list by simply addressing the first five names on it.

Rusty Vanneman, chief investment strategist at Orion Wealth Management, says that while the economy has been stronger than investors expected entering the year — and isn't likely to have a sudden reversal — investors need to heed the warning signs and balance optimism with caution, remaining properly diversified. He notes that some international markets are particularly well-positioned right now in terms of valuations compared to domestic equities, particularly in hot industries like artificial intelligence, where the bargains are more with global stocks. Vanneman also likes real assets and discusses the importance of adding alternatives to generate both returns and stability. Todd Rosenbluth, head of research at VettaFi, talks about adding international bonds to the portfolio mix with his pick for the ETF of the Week, Chuck answers a listener's question about properly selecting bonds and bond funds for a retirement portfolio, and Les Rubin of Main Street Economics discusses his new book, “Why You Should Give A Damn About Economics: The US Debt and Your Future.”

Gina Sanchez, chief market strategist at Lido Advisors, says that the stock market is changing its mind so fast that every month investors have a new focus. She notes that the market has gone from favoring value to growth to defensive growth and kept rotating to where it is now back to growth, but she says that can't continue for long because the current level of "productive inflation" will stop working, leading to a slower economy in the second half of the year. While she doesn't expect a hard landing — and in fact expects a long, slow period of sluggishness — it will create volatility and conditions that favor quality, profitability and cash flow. Jennifer White discusses the latest J.D. Power research on consumer financial health, which showed modest improvement despite headline issues over inflation, although there is some concern that it's still a small group of consumers claiming improving circumstances. Plus, Kevin Walkush, portfolio manager at Jensen Investment Management, talks about quality growth stocks — with an eye towards the artificial intelligence companies that deserve the "quality" label — in the Market Call, and Chuck tells the story of Bitcoin Pizza Day, and what happened to the guys who in 2010 exchanged two pizzas valued at roughly $25 for a little more than $40 in bitcoin, which today is worth hundreds of millions of dollars.

Dave Rosenberg, president of Rosenberg Research, says that anyone believing a no-landing scenario believes in pixie dust, and that investors are mistaking record highs on the stock market for a booming economy. He sees the economy as cooling off, and warning signs building, and notes that the Federal Reserve is too focused on lagging indicators, but the trouble they have been guarding against is still coming. Meanwhile, Rosenberg says investors aren't getting paid to take on equity risk, so he is happy in being in money markets and bonds while he waits for conditions to change. Also on the show, Stephen Dover, chief market strategist at Franklin Templeton — head of the Franklin Templeton Institute — digs into his research on just how much election results actually matter for the market, and Will Rhind, chief executive officer at GraniteShares, talks in the Market Call about investing in disruptive stocks.

Fritz Folts, chief investment strategist at 3EDGE Asset Management, says investors need to be watching for issues like liquidity being pulled from the system and credit spreads widening and other signs that there may be trouble ahead. He says the market -- as witnessed by the Dow Jones Industrial Average crossing 40,000 last Friday -- remains driven by momentum and investor behavior and fear of missing out, but once there are strong signs that conditions are faltering and momentum is slowing, there will be a downturn, with a slowdown starting later this year though it may not turn into a full recession until 2025. Ted Benna, recognized as "The father of the 401k," discusses America's retirement and savings crisis and details what he calls the "Wheat Grain Incentive Plan," that would revolutionize the way millions of Americans build savings, plus Kyle Guske, investment analyst at New Constructs, puts payment-technology company Marqeta (ticker MQ) in the Danger Zone.

Thomas Winmill, manager of the Midas Fund, says that gold historically has a quick bounce after the first cut in a rate-cutting cycle, and he expects to see that gain in gold stocks — a fast uptick and then strong results lasting at least a year — whenever the Federal Reserve moves next. Winmill says that the market can keep climbing the wall of worry for a little while, but he expects struggles once current momentum fades. Leo Leydon, president of Financial Focus Advisory Services, says the technical indicators are suggesting that the Standard and Poor's 500 can hit 5,600 by the mid-fall, though he warns that there may be a setback all the way down to 4,800 once the uptrend ends. Charles Lewis Sizemore, chief investment officer at Sizemore Capital Management, says that the big discounts investors have seen in closed-end funds will continue, and he likes real estate and term funds as great values for investors to consider now. In the Market Call, Christopher Sargent, portfolio manager at Bradley, Foster & Sargent, makes his debut talking stocks.