Great Ones,

What we’ve got here is… failure to communicate. Some stocks, you just can’t reach.

So, you get what we have here on the S&P 500 Index (SPX) this week. Which is the way Big Tech wants it… well, they get it.

What are you complaining about, Mr. Cool Hand Lu…Er… Great Stuff? It’s a four-year bull run!

A four-year … sigh. It’s clear that I don’t like this far more than you.

Yes, the SPX officially entered the record books this week, logging its 11th bull-market run since the 1950s – (when Cool Hand Luke is set, I might add). The broad-market index has gained roughly 120% since bottoming in October 2022, marking only the seventh such bull market in the past 75 years to cross the four-year hurdle. 

But while Wall Street suits pop champagne bottles and celebrate the milestone, all I can hear is Albus Dumbledore slow clapping:

Yes, yes, well done, Slytherin. Well done, Slytherin. However…

The funny thing is, we’re not even taking into account “recent events,” if you know the rest of that quote. We’re talking about the facts of what actually happened in the market over the much-vaunted, four-year bull market run.

If you peel back the “AI slop” plastered all over Wall Street, you can look at what’s really going on:

And if you drill down on the numbers via this YahooFinance report, you can…

Look at consumer staples fighting.

Look at financials crying.

Look at real estate dying.

I don’t want to hear no more. Mr. Great Stuff, what do we do?

Don’t worry, Great Ones. This isn’t a Wall Street civil war just yet. 

Your hands aren’t completely tied as the AI billions shift from side to side, and the indexes invest with brainwashed pride.

When three companies dictate the fate of the entire financial ecosystem, investors don't fight the tape. 

Great Ones, when you find yourselves in times of trouble, remember Mother Mary’s words of wisdom: Follow the money and let it be. 

Right now, you should definitely have exposure to the following SPX leaders:

Now, you don’t want to go buying NVDA, AAPL and MSFT all willy-nilly. The idea is to buy low and sell high, remember? 

Buying with all three stocks near all-time highs and 84% of the market in correction territory is a recipe for disaster. It’s like buying Amazon (NASDAQ: AMZN) in April 1999 … sure, you’re up now, but you didn’t see anything but losses for 10 years.

Instead, we’re going to use the stock market’s own volatility and institutionalized trading algorithms against it!

Here’s the deal… In strong bull markets, dips are always aggressively bought up. You know this. You’ve seen the so-called “invisible hand” of the market step in on any number of serious pullbacks during the past four years. 

But it’s not an “invisible hand,” per se… It’s institutional investors. It’s ETFs. It’s index funds that are forced to buy certain stocks at certain intervals. It’s 401k contributions. 

All of these institutions use trading algorithms. And these trading algorithms aggressively target pullbacks to the 20-day moving average of the underlying stock’s price. Why? Because a pullback to a 20-day moving average typically represents a move in the stock that is roughly twice its average daily trading range (ADR).

Now, a pullback to the 20-day is not always representative of 2X daily move, but it happens enough that trading algorithms key off this level. In this capacity, buying a pullback to the 20-day is a good “rule of thumb” for adding to your holdings amid a bull rally.

But, if you want more precise numbers on where to potentially add to your holdings: 

As long as this trio continues to defend shareholders with buybacks, free cash flow, and dividends, these pullbacks are your mathematical signal to step in and add to your long-term holdings.

And now for something completely different…​

So, we’ve just looked at the best Wall Street has to offer. What about the rest? 

Do they just sit around and watch the tube, while no one’s calling? 

Change the channel for an hour or two? 

Well, I’m done twiddling my thumbs for a bit … and I’m sick of all the same old shh…. Stocks. We’re in a market with unlocked doors and I’m curious what the bottom of the SPX looks like.

You really are a Basket Case, aren’t you?

I know the Dow Jones Industrial Average (DJIA) has the "Dogs of the Dow," but over in the SPX, things smell a bit more funky: the "Skunks of the SPX." These are the stocks stuck in absolutely brutal 70%+ declines while the rest of the market does the AI safety dance. 

You can dance if you want to, but there could be some deep-value turnarounds trapped down there … if you have to stomach:

But this pessimism neglects two rather powerful points.

First, while 5G wireless and satellite speeds are "good enough" for budget-conscious cord-cutters, it physically cannot match the raw bandwidth, speed, low-latency reliability, and security of hard-wired connections.

Second, Charter’s physical infrastructure represents a multi-billion-dollar, sunk-cost moat that no new competitor in its right mind  is going to try to replicate. 

Right now, Charter is basically going through a mid-life crisis. It knows it has the goods. It also knows not everything can be or will be wireless, and that we still need a way to watch Hollywood drivel and YouTube videos to stay entertained. Charter remains a primary pipeline into millions of homes and businesses … something the media headlines have conveniently left out. 

With CHTR sporting a greatly compressed price-to-earnings (PE) ratio of just 2.67, the stock is sitting on a classic deep-value setup. If you can ride out the short-term volatility, CHTR is a definite hold and a potential value buy for patient investors.

One would assume, given the ease at which plastic teeth aligners can now be manufactured, that Align’s business model is dead. That’s clearly how Wall Street is treating the stock. 

However, doing so neglects to include the fact that Align isn’t just 3D printing plastic teeth trays (and now I have a new indie band name to consider). 

Align’s moat isn't just a fancy brand … it’s biological data and health-care hardware lock-in. The company’s teeth scanner – iTero 3D – integrates directly with its ClinCheck AI, which itself was trained on data from over 17 million Invisalign patients. Now that is a technological moat. 

The problem keeping ALGN in the “Bad” category is that the company depends heavily on discretionary consumer spending. Not all insurance covers your luxury teeth bones, after all, and the American consumer isn’t doing so hot right now. The company’s model is solid, and it's still humming along just fine. Just don’t bet your eyeteeth on ALGN until we aren’t worried so much about gas, groceries, housing, you know … living. 

But the company isn’t just struggling alongside the consumers it serves, it's struggling to remain relevant at all. 

The former king of the e-commerce boom forgot what happens when people are allowed to go outside once again. Hint: They don’t sit at home and order things on their computers. 

While PayPal was still taking payments on its computer in its grandmother’s basement, Apple, Google … and many, many others … realized people like to go outside and pay for things. In our post-pandemic, mobile-first world, PayPal is being left in the dust by the likes of Apple Pay, Google Pay, Samsung Pay, Amazon Pay … you get the gist.

Now, PayPal has become nothing more than a glorified financial-services middle man. The company is not quite a bank and not quite a payment rail. It’s not present at physical cash registers. It’s just not in your wallet. Meanwhile, low-cost competitors like Stripe and Adyen are compressing margins even further, while attempts to move into crypto processing and branded debit cards look just as they appear: desperate appeals to remain relevant on any front.

Sure, PYPL trades at very low PE multiples compared to its peers, but the only reason those multiples aren’t worse is likely because of massive share buybacks. You can’t buyback your way back into relevance, and trying to do so is just ugly.

Still have questions? 

I know you do: Drop me a line and let me know!

Remember, Greater Stuff doesn’t exist without your help and support!

Like, share, and comment! Help me reach all the OG Great Ones and build this community once again! 

And if you have a stock or investing idea you’d like to see Greater Stuff cover, let us know at: [email protected]. 

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Until next time, stay Great!​

​Joseph Hargett

Editor, Greater Stuff

Founder, Greater Stuff Publishing LLC

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