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TheStreet Pro's top experts share their top stock picks for the rest of 2025.
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00:00Hello, everybody, and welcome to this week's podcast.
00:04You may have noticed that I am not Chris Versace.
00:07I am Jason Meschnick, the managing editor of The Street Pro, and this is a podcast takeover.
00:12Today, I'm joined by Luis Yanis, Ed Ponzi, James DePore, also known as RevShark, and
00:19don't worry, Chris Versace is here too.
00:22This week, we are combining the weekly Stocks and Markets podcast with the quarterly meeting.
00:26We've assembled a team here today to give us their top pick for the rest of the year.
00:31The format is that each contributor will have five minutes to discuss their top pick, as
00:35well as answer any questions from the panelists related to that pick.
00:37So hopefully, we'll be able to keep this moving, and we'll have some fun.
00:41And let me introduce the panelists, and then we'll get started.
00:48So first of all, we have Chris Versace, who I think needs no introduction, but he is the
00:53portfolio manager for The Street Pro's portfolio.
00:57He's been with us for a number of years and has done a great job.
01:00Luis Yanis is newer to The Street Pro.
01:03I think the newest person here, maybe the newest person altogether at The Street, but he's
01:09not new to me.
01:09I've known Luis for over 20 years.
01:12Luis is a wealth advisor, manages lots of money, and is one of my favorite people to talk
01:18about markets and money with, and even life occasionally.
01:23We have Ed Ponzi, who has been with us for a number of years as well.
01:28Ed, correct me if I'm wrong, but you're a CTA, trading advisor, commodities trading advisor,
01:33who gives us great picks on stocks as well.
01:37And awesome.
01:38And then finally, Jim DePere, RevShark, also been with us for many, many years and is an
01:48attorney turned trader and provides us with lots of great stock picks as well, focusing
01:53on technology and some smaller caps and things like that.
01:58So with that, we have not determined who is going to go first in this, so I'm just going
02:02to pick someone.
02:03And I'm going to lead off with Luis Yanis.
02:05So Luis, I'm going to start the clock now, and so let's talk about your top pick for
02:12the rest of 2025, your Q4 top pick.
02:16Okay, so I think we're in a phase right now where we really need to separate what is real
02:21and what is not real.
02:23So there's a lot of firms out there that are talking big talks about AI spend, and I think
02:28there's really two types of companies that we need to distinguish between.
02:31We have the research and development builders and the research and development destroyers.
02:37So what I'm going to be talking about is the research and development builders that I like
02:40in going into this quarter.
02:42So basically, if you can think of it this way, you have the builders like an NVIDIA.
02:46They're spending a lot of money on research and development, and it's turned into real
02:50cash flow.
02:51And then you have other companies like, say, a Peloton, where you might as well just be throwing
02:55the money into a big bonfire, right?
02:58And so what we want to do is we want to find those companies that actually are showing that
03:02they're getting results from the R&D.
03:05So what I've been doing is I've been screening out companies looking for companies with four
03:09checkboxes.
03:10They're spending at least 10% of their money on R&D, their revenue on R&D.
03:14They're growing revenue quarter over quarter on the year, so they're showing acceleration and
03:18growth.
03:19They have positive cash flow, and the return on capital is solid above average.
03:23And when you combine those, that's where you can kind of look at the pull.
03:27Right now, the pull is about 107 companies, the way I'm looking at things.
03:30So what I'm doing is I'm buying a basket, and I own all these stocks just for full disclosure,
03:34a basket of these types of companies.
03:36So I'm going to cheat a little bit, and I'll give you one stock.
03:38I'm going to give you five as a basket.
03:41Number one is Robinhood, and they've been building a superb financial app.
03:46They're really disrupting the industry, and we can get more into that.
03:49And the other is Reddit, which is a little bit controversial.
03:53But they're actually getting a return on their R&D spend with ad revenue and enterprise data
03:59deals.
04:00And then Garmin, which has a solid niche.
04:02They're getting really good returns on capital from their spend.
04:06And another controversial one would be Adobe.
04:08A lot of haters have been stepping in with Adobe, but from what I can see, their embedded
04:12AI in the creative cloud with Firefly looks good, and I think that could be a turnaround there.
04:18And then lastly is Autodesk.
04:20They're spending a lot of money on design and construction in the four months in the auto
04:24AI platform.
04:25That's boosting renewals and margins.
04:27So these companies are actually creating results, and that's what I think we should be looking
04:31at right now.
04:32Not hype, but creating results.
04:34So that's my top idea.
04:35I love how you made it plenty of time.
04:40We have two and a half minutes left, Lewis.
04:41Yes.
04:43And I love how you separated out between the, what'd you say, the R&D builders versus the
04:49R&D destroyers.
04:51Yes.
04:51How'd you come up with that?
04:52There's a lot of destruction happening.
04:54I'm just thinking through what I've been trying to find, you know, and as I've been trying
05:00to define it more and more, I've really whittled it down to trying to separate companies
05:04in almost any industry.
05:06What's really interesting, what started this whole thing is, as you know, I look at a lot
05:10of quant research.
05:11And there's some quant research that shows that if you, you know, the way accounting rules
05:16work, research and development expense is actually taken off of income, right?
05:21But a company that is actually using that well, that's really an asset.
05:26So you really shouldn't, you shouldn't like hurt companies' profitability based on R&D if
05:32they're doing a good job.
05:34So, and there's quantitative results that show over a long period of time that you really
05:38should be backing out R&D and capitalizing R&D to the book value, which is kind of a lot
05:44of a jargon there.
05:46But basically what it means is that sometimes it's value creation.
05:49So what I set out to do is say, who's out there that's actually creating value?
05:54And, you know, there's not that many companies that have a lot of R&D spending, but there's
06:00more and more recently.
06:01And I think there's a lot of, I don't want to use the word junk because that's kind of
06:05a mean and non-engaging word, but I think there's a lot of cash burning going on right
06:09now.
06:10I find that really fascinating because, you know, several years ago, I kind of looked
06:14at a strategy that looked at companies with a high degree of R&D spend.
06:20But the question was, how do you know that they're being successful by monetizing that
06:26R&D spend?
06:27And we came up with a lag relationship to revenue growth and profit growth.
06:33So I was just kind of curious, how are you kind of measuring who's going to be successful
06:38monetizing this R&D, you know, that they're putting in?
06:42Well, there are a lot of studies out there.
06:44One study does actually show that there is a lag and it's usually about a year or two.
06:50Right.
06:50So what you want to see is companies that have more sustainable edges.
06:54So what you have to do is you have to get into qualitative work.
06:58There's no two ways about it.
07:00Now, you can benefit quantitatively by buying baskets of companies and taking out R&D out
07:05of net income.
07:06There's seminal studies that show that.
07:09Like that measure of profitability generates more returns in stocks than just looking at
07:16return on invested capital, things like that.
07:18So but what it boils down to is you have to look at these companies and say, what are they
07:22doing?
07:22Like in Robinhood, they're clearly doing things that are generating new customers and new products
07:30and innovation in the entire industry.
07:32And what really is interesting, I mean, I was talking to some clients that, you know, you
07:36think about Robinhood, you think about somebody really young who's investing in Robinhood.
07:40Well, I've got clients that are in their 60s now.
07:43We're just nonchalantly talking about their portfolios.
07:45They're like, yeah, I got, you know, $800,000 over at Robinhood and I'm just playing around
07:50with it.
07:51Okay, that's what's going on right now.
07:54It's not just, and I think the entire industry is being affected by it and we can get to a
07:58huge conversation about that.
08:00I would love to talk more about Robinhood at another time because I have thoughts on at
08:04least what they used to be and I'm interested in hearing more about the direction that they
08:08are going.
08:09But I think in the interest of time, let's move on to our next.
08:15Rev, how about we go with you next?
08:18Okay, very good.
08:23I'm going to talk about the sector, one sector that I favor and if you read the street, you
08:30know it, is biotechnology.
08:32In general, biotechnology has been a dog for a couple of years.
08:38It's lagged.
08:38It hasn't kept pace with the overall market.
08:42It's just been a terrible sector for a very long time.
08:45However, it's finally starting to come to life now and I think that many of the stocks in
08:53the sector are not as overvalued or as excessive as some of the technology names.
09:00There's still room to run in the biotechnology area.
09:04And my top pick in that area right now is HARO, H-R-O-W.
09:10They recently had an investor's day and they want to become the Amazon of ophthalmology.
09:19They started off providing custom-made drugs for ophthalmologists and have now gone into
09:30biosimilars and other areas.
09:32They offer a wide range of products to ophthalmologists.
09:35They're growing at a rapid pace right now.
09:40They're currently on a $500 million run rate for revenue and they anticipate that to be
09:48at $2 billion in the next two years.
09:52Analysts have target prices of around $70 on the stock.
09:56They also did a recent acquisition of a company that is developing a sedation that's used in
10:04very short-term surgeries.
10:06Right now, all the surgeries that are done for stuff like cataracts and so on require an IV
10:13just to deliver the sedation.
10:16This is a sublingual pill that just goes under the tongue and you do away with all of the IVs.
10:25It can be done in office and it makes it a lot more efficient of a process.
10:31This sedation can also be used in dental procedures, which is a huge market.
10:37It's a year and a half to two years away, but the growth in the other products is going
10:44to cause a lot of excitement about it.
10:46I put the chart up here on the, as you can see, it had a pretty nice run-up and then after
10:53investors' day there, it's sold off.
10:56It's now pulling back to the 50-day moving average.
10:59I think there's a good entry point around 40 or so.
11:04I'm going to mention one other name real quick.
11:08This is at the opposite scale of what you normally see, of what HARO is in biotechnology.
11:16This is a highly speculative, highly risk little stock that is going to have data at the end
11:26of the year.
11:27They have a drug for a rare disease that treats brittle bone disease.
11:34It's had good interim results and they're partnered with a bigger company called Rare and MRE always
11:43symbol on this, and they're going to have data probably in December or early January.
11:49If they do have the data that I think they will, the stock will likely double or triple
11:56on the news.
11:57This is a roll of the dice, but that's what happens in biotechnology.
12:02One of the things I like about a play like this is that the anticipation is going to build
12:08as to these positive results over the next month or two.
12:11And a lot of times you'll get a run up into events like this, which is tradable and it
12:17has much lower risk than trying to bet on an outcome of an event like this.
12:22So it's a good for if you're an active trader and you're looking for a little volatility to
12:27trade, this might offer a good short term trading vehicle for you.
12:35So I've got plenty more, but I think that's good for now.
12:38Those are two interesting picks.
12:42Yeah, Louis, you were going to say something?
12:43Yeah.
12:44You know, I was just putting this company against the R&D test.
12:48And so it's got every checkmark there except it hasn't quite gotten into operating cash flow
12:55positivity, but it's real close.
12:56And what's beautiful about that is you can get in, you know, if this is the thesis is
13:01right, that's a good time to enter.
13:04I can see kind of a confluence there as more of a speculative play, you know, and if you
13:11position size it right.
13:12I like the trend in operating cash flow is getting positive.
13:15They've got the R&D spend.
13:17Their revenue is producing results.
13:19So just on the surface, I was just, I just, just for a sidebar there, it kind of fits
13:24the, the, the, the bill there.
13:28Yes.
13:29And I think the way I approach all these kinds of stocks is with using incremental approaches.
13:35I don't go, I like to, you know, average in and out and trade them actively as I'm building
13:41a position.
13:42So, you know, I try to reduce the risk by being active with my, by, with some short-term
13:48trading around that core position.
13:53And that's one of the things I should point out for people that are not as familiar with,
13:57with Jim's work is that every Saturday he writes an educational piece that often talks
14:02about things like that, about the strategy of, of, um, legging into positions or different
14:06ways to, to trade, uh, which I really appreciate.
14:10Yeah.
14:11It's I always looking for ways, you know, investing, it's always a risk return, you know, is what
14:18matters the most.
14:19And if you control your risk and preserve the return outcomes, then you've got a much better
14:25chance of succeeding.
14:27So it's always about finding ways to reduce that risk while getting into the best stocks.
14:35Yeah.
14:35This is Spotify, you know, like when Spotify had negative cash, cashflow, they were doing
14:40a lot of R and D it's completely different industry, but the concept of, of a company
14:45going from not making operating cash flows to making it, they have what's called operating
14:50leverage and their earnings growth is very, could be very dramatic.
14:53So something that looks really expensive is really not that expensive.
14:57And sometimes you can have some amazing moves in those types of companies.
15:04All right.
15:05Should we move on to Ed?
15:07Hey, everybody.
15:08Can you hear me?
15:09Okay.
15:11Loud and clear.
15:12All right.
15:13Fantastic.
15:13Okay.
15:13So I'm assuming that everyone heard, uh, Paul Tudor Jones yesterday.
15:18He made some very interesting comments.
15:20Uh, if you missed it, he basically said that, um, we're in 1999 mode and, and I've had that
15:26feeling for a while, um, specifically, and this was not, Mr. Jones didn't say this, but
15:33I think it's liquidity.
15:35You have high liquidity and you have lowering interest rates at the same time.
15:39It's a recipe.
15:41It's a very explosive recipe.
15:42Stocks are just going to, and you see it, you know, every dip seems to get bought and
15:48stocks just seem to go higher.
15:49There's no reason why that shouldn't continue for the entire fourth quarter and into next
15:54year.
15:54And maybe, you know, talk to me six months from now, maybe things will change.
15:58But if, um, if we believe what, uh, Mr. Jones is saying, and I, and I've always felt that,
16:04uh, that's where we are right now is that, um, you've got to go with large cap tech.
16:08And, um, uh, I would say AMD, I think still has upside after all of these moves it's made.
16:17Our readers are up a hundred percent on AMD since mid-May.
16:22Uh, and, uh, at that point I was recommending buying it at 105 and it actually had to come
16:27up to 105.
16:29Uh, it was, it was in the nineties and I wanted to see it get climb above its 50 day moving
16:34average before I, I felt safe buying it and now it's doubled, uh, since May.
16:40And I think there's still upside because we're getting into that frenzy.
16:44And one of the things, uh, Paul Tudor Jones said yesterday is, you know, I'm paraphrasing
16:51here.
16:51We might be entering a bubble, but the best part of the bubble is where the most money is
16:57made.
16:57The NASDAQ was up 85.59% in 1999.
17:03If we're going into that mode, I think the way to play it is you play it with chip stocks
17:09like, and you can own them all, you know, Nvidia, Broadcom, AMD, right?
17:15Those are your rock stars in that area.
17:18And, um, now I realized I'm supposed to pick one stock and I'll get to that.
17:22So just give me a minute.
17:23Okay.
17:24Because I had a few, I had to get that off my chest because, uh, I've been thinking about
17:27what Paul Tudor Jones said all night.
17:30Um, the, another thing that I think, uh, we're going to be surprised one of these days is we
17:36all saw what happened with Intel and, um, you know, the, the government taking a big stake
17:43in, in Intel.
17:44And, and, uh, I think one of these days we're going to wake up and we're going to see that
17:50happen in the pharmaceutical sector.
17:52And I, and I don't know what name, but, but I just feel that that's coming.
17:56Um, a lot of these stocks that have been like, like Intel was dead money for a very long time
18:03and suddenly it's, it's flying, you know?
18:06Um, and, um, and then yes, you know, so, so, uh, I think there's a very good chance that
18:12we haven't seen the last of that type of investment.
18:16Um, I don't want to pick one name.
18:21Um, I think if we look at XPH, that's, um, pharmaceutical sector ETF, um, I think that
18:29that covers all the bases and, uh, it gives you exposure because I, I think something like
18:35that could happen, could occur.
18:37Um, so let's boil it down to one pick.
18:39We all wanted to talk about one stock today.
18:41So I'm finally going to get to my pick.
18:43Um, you know, um, everyone here knows their FICO score and I'm sure you're aware, maybe
18:50you're aware, maybe you're not, that there's a stock called FICO, Fair Isaac Corporation,
18:56F-I-C-O.
18:57And that stock has been a fantastic performer over the years.
19:05Only one down year since the crash of 2008.
19:09In, in 2021, the stock was down.
19:11That's the only year it's been down since the crash of 2008.
19:15It's been up every year and almost every one of those years, it's up double digits.
19:19So we're talking about FICO, Fair Isaac Corporation.
19:24And, uh, one of those years it was up triple digits.
19:27Uh, so the performance has been amazing and the stock, the company basically has a monopoly
19:34on your credit scores.
19:36And, uh, now they've changed their business model to sort of cut out the middleman and
19:42sell directly to, um, uh, to mortgage providers and companies like that.
19:48So in other words, um, they're basically cutting out Experian and, and, and companies like that,
19:53uh, who are generally known for distributing those FICO numbers and they're going direct.
19:59They're going to cut out the middleman.
20:01I think, and the beautiful thing about this.
20:03So you've got this amazing performing stock.
20:04It's so, I don't want to say under the radar, but I really don't hear many people talking
20:09about it and, uh, it's well off the highs.
20:12It was at 2,400.
20:13Now it's in the 1800s.
20:15So you're getting this amazingly well, good, great performing stock well off the highs.
20:20It's down slightly this year.
20:22I think it's down 7% this year, but, but it's up 20% in the last month because on at the
20:28beginning of this month, that's when the company announced that they were changing their
20:32business model, I think it's a great move.
20:35I think it'll pay for a long time.
20:37And so that's going to be my number one pick is going to be Fair Isaac Corporation FICO.
20:45I love it.
20:46Buying a monopoly.
20:49Any other comments by anyone?
20:53All right.
20:55Um, there's no argument there.
20:57Uh, I guess last, but certainly not least is Chris Versace.
21:03Um, so why don't you take it away?
21:06Sure.
21:06Thanks, Jason.
21:06I, I'm going to do what everybody else did and I'm going to rattle off a couple of names
21:10and work my way to my pick if that's all right.
21:13And, uh, let, let me start, uh, with Ed totally agree with that first part that you had.
21:18Uh, glad to hear it.
21:19Uh, the only thing I will say is I think you missed Marvell, which we own in the portfolio,
21:24MRVL, and I would argue that I actually liked that not only for everything you said, but
21:29because of the simple fact that as this AI adoption happens, we are going to have to
21:36see, uh, improvements in the networks because AI adoption is going to drive bottlenecks, just
21:41given the amount of data that's used for each AI search.
21:44And I think that bodes well for incremental spending.
21:46You could call it, you know, for Cisco, for, uh, Arista networks, whatever.
21:50Um, but I also think that means very good things for the other half of Marvell's business.
21:55That's not AI chips, um, which is enterprise networking and carrier infrastructure.
22:00So I, I would just toss that onto your pile if that's okay.
22:04Um, I think Marvell is a terrific name.
22:07You know, it's funny you mentioned Cisco though, because when I think of 1999, I think of Cisco.
22:12Totally great.
22:12And yeah, and, and, and so, you know, one of these days, my, the only thing that one of
22:19these days we're going to wake up and I don't know if you remember where, oh, the internet's
22:24going to be so big and Cisco sells the plumbing and it's going to go for, and then suddenly,
22:30well, we've got enough routers.
22:32So, so it's, it's funny you say that, right?
22:35Because one of the things that, you know, I'm constantly thinking about is when do we
22:40hit that 65, 75, 80%, you know, adoption level for AI, which means to your point that
22:48the vast majority of the infrastructure we, we need will be built out.
22:52And I, I still think we're in the relatively early innings, but that's something that is
22:56constantly on my mind, which is why, you know, uh, before we jumped on, we were chatting
23:01about, you know, different AI usages.
23:03And I think Rev mentioned that he's using it for quite a bit.
23:06Lewis is as well.
23:07I shared some things that I'm using it for.
23:10And I, I think that, you know, as we get more AI PCs, as we get more, um, robust applications
23:16on smartphones, and of course, enterprise adoption, you're going to see that enterprise carrier,
23:22sorry, enterprise consumer adoption continue to grow.
23:25But the question is, when do we start to see that rate of growth slow down, right?
23:31And I, I thank you, Chris, Chris, please don't say innings.
23:34I'm a Phillies fan.
23:35So, um, anyway, uh, but, but seriously, folks, um, that's, I worry about that too.
23:43Like, like, you know, really very few people saw it coming when we went into 99 into 2000.
23:49And the, I remember the NASDAQ peaked on March 10th, 2000.
23:54I remember the day and, uh, not too many people recall, uh, that, you know, in hindsight,
24:01everyone's a genius, but not a heck of a lot of people were saying, guys, you better
24:05get out, you know?
24:06And, uh, I think, uh, Jones was, was pretty adamant about that.
24:10He says, listen, you better have happy feet.
24:13You got to ride this.
24:14If you want to get the juice out of it, you've got to be in, but you better know where the
24:18exit is.
24:19I'm paraphrasing again, but you know, you have to know where the exit is because it's
24:23not going to last.
24:24And, uh, we probably go what folks call parabolic before it happens.
24:29You know, the very best gains could be ahead of us, uh, because usually that's the way
24:35that, that's the way these things end.
24:37Um, so let me, let me just, let me just say, I think this is where between Lewis and Rev,
24:43they would say that's where position sizing is important.
24:46That's where, and I think Rev, you said it, legging in and out of positions is important
24:50that, you know, you've just got to be mindful and, and he's not here, but he's here in spirit.
24:54Cause I'm about to mention him.
24:55Bob Lang would say, no one went and no one's ever gone broke, taken a profit, you know?
25:00So if you compare with Lewis and, uh, Rev, I think would say, and mix in a little bit of
25:05Bob, some prudent trimming along the way, it'd probably make some sense.
25:08Right?
25:09Absolutely.
25:10I was trying to say, one of the things that's interesting.
25:13About 1999 compared to now is that in 1999, we had Y2K threatening, and there was this
25:21huge amount of liquidity that was being created to deal with the, you know, the disaster that
25:26that was supposed to be.
25:27So that was just flooded into that system in 1999 and we started, we're getting a similar
25:34kind of thing now with the fed easing and so on.
25:38Sometimes we have that incoming, uh, liquidity.
25:41I think, uh, Jones talked about that, uh, as saying that he saw monetary and fiscal policy
25:48contributing to the liquidity, you know, that's going to drive this.
25:51And a lot of, in a lot of ways that parallel to the Y2K thing is very interesting.
25:55I can see how that, I can see where he comes up with his basis for that.
26:00But, but Rev, you got to admit, hang on one sec, Rev, you got to admit, Y2K, total bust.
26:07Well, I mean, it was, I mean, it was a total bust.
26:10Right.
26:10And so then, I mean, every time I see Ed Yardini on TV, I always remember him talking about how that was
26:19going to be such a disaster, you know, and I mean, nothing.
26:24So, I mean, all that money was in the system and, uh, I mean, that really fed that bubble.
26:31Rev, Rev make, I just want to say Rev makes a great point.
26:33And, and that's something that, that should definitely be mentioned is liquidity, liquidity
26:39was being poured into the market because we thought everything was going to stop working on January 1st.
26:44And so to, to sort of soften any potential blow, uh, liquidity was pouring in and then
26:51right after it turns out, Hey, we don't need it.
26:54Start pulling that liquidity out.
26:55That's when things started to turn.
26:58And I think we're in that high liquidity environment now.
27:00I mean, just look at global M2, uh, look at global money supply.
27:05It's going up again and it's just more money chasing the same stocks.
27:10No wonder they keep going up, right?
27:12It's just supply and demand.
27:14I think there's a lot that has a lot to do with it.
27:16Everyone talks about interest rates.
27:18No, one's really talking about that liquidity issue.
27:20And while it's not a Y2K, uh, it's not similar to Y2K, but it is similar in the sense that I
27:26feel like we're in a high liquidity environment.
27:29Right.
27:30Excellent.
27:31Um, I, I guess I actually have to give a pick now.
27:34Um, yeah, I didn't want to stop this conversation because it's great.
27:37And it's what we should be doing, but, um, yeah, you have to tell us.
27:41Yeah.
27:42What is your pick?
27:43Yeah.
27:43So there, there's a number of names that, I mean, people can go to the portfolio, uh,
27:47holdings page and see kind of what our upside, you know, price targets are and they can assess
27:51for themselves, you know, um, what the greatest percentage returner is.
27:56But I think Jason, your, your, uh, your, uh, your ask of us is which name do we think will
28:03be the strongest performer between now and the end of the year.
28:06And as I think about that, you know, I tend to think about the holiday shopping season.
28:09I tend to think about, uh, where consumers are, you know, we're starting to get some holiday
28:15shopping season forecasts that are actually calling for a decline year over a year.
28:19We know consumers are continuing to feel the pinch of higher prices.
28:22There's concerns about layoffs, obviously the weakening job market, uh, and all of that.
28:27And yet food prices, you know, continue to be a pain point for folks.
28:31So when I kind of put all that together, um, my, my, uh, recommendation would should be fairly
28:38obvious.
28:38I would say it is, uh, Costco, uh, for a number of different reasons.
28:42One, it allows consumers to stretch their disposable spending dollars that they do have.
28:47Two, Costco has done a wonderful job of leaning into, um, uh, grocery and fresh food.
28:54Uh, and I think especially during the, uh, period of time, as I like to call it,
28:58season's eatings, um, when I have to, you know, um, let my pants out a little bit.
29:03Um, Costco is the place to go.
29:05You can also do your holiday shopping there as well, but it's also a very different business
29:10model than most realtors.
29:11And that's really why I like Costco.
29:13It's a membership driven business model.
29:16And when you really look at the financials and pull them apart, you'll see that that membership
29:20fee income stream is about 50, 52% of their pre-tax income.
29:27The only other company that is bigger in that is American Express, which is right around 70%.
29:32Uh, also having a membership business model, but, but for this conversation, given where we are,
29:37where we're headed over the next few months, uh, my pick is Costco.
29:41It is pulled back.
29:43And, you know, I constructively, I think that the, the risk reward to borrow some words from
29:49Rev is very compelling at the current level.
29:52The only thing that I would say, and I've been very vocal about this in my writings is
29:57we want to see what happens with the government shutdown.
30:00A does it come to an end?
30:01In which case, hopefully, uh, government workers, um, are given their back pay, but also too,
30:08if we don't see it shut down, if the shutdown is not averted in a relatively short order,
30:13there are these threats of massive layoffs.
30:16What does that potentially mean?
30:18Um, you know, the economy, consumer spending, that sort of thing.
30:21I would argue that in that environment, Costco would thrive even more.
30:25But if we do see those layoffs, you know, the market would probably get hit a little bit.
30:29And I think we'd have an even more compelling place to pick up some Costco shares.
30:34So that's my answer.
30:35One question, how many, how many people on the call are Costco members?
30:44And shareholder.
30:46And shareholder.
30:47I'm a, I'm a BJ, I'm, I'm a BJ's member.
30:50You know, I, I finally heard, I heard my first commercial on the radio today in my car
30:56for BJ's.
30:56I never heard a commercial for them before, but today's the day, but I think Chris,
31:00Chris makes a great point.
31:01And if I could just take it a little bit further, has anyone noticed, I eat out a lot.
31:07I don't like, I hate to cook.
31:09I like to eat out.
31:10Has anyone noticed that these restaurants are not as full as they used to be?
31:15A lot of the places, like I was in a Panera Bread yesterday.
31:18I was the only person in there.
31:20There used to be a line to get in.
31:23I'm seeing this type of thing a little bit more all the time.
31:28And I think people are dining out less, but I don't think they're giving up eating.
31:33They're going to have to, you know, make something at home that might come from Costco.
31:37It might come from, uh, from their local supermarket.
31:40But I think that there's a, there's definitely a general play toward folks staying home and
31:46eating at home.
31:47And Costco specifically, I think is a great choice for that too.
31:51Thanks, Ed.
31:51I would say just your point on people eating more at home.
31:55If you looked at, listen to the McCormick's call today, which, you know, quality company,
32:00but they're, you know, they're having some margin pressure issues.
32:03They talked about for the first time in a while, an increase in the volume of what they're selling.
32:09And that to me says that folks are shifting back to eating home.
32:13Yeah, for sure.
32:15That's a great point.
32:15And it's not really surprising.
32:17Yeah.
32:17Me and my wife were just talking about that.
32:19Another trend that's happening is the quality in order, you know,
32:22inflation is killing middle America, right?
32:25And, uh, there it's, it's harder and harder to go out for many people.
32:29And, um, also the restaurants are having a hard time making ends meet.
32:33They can only raise prices so much.
32:35And so what they're doing is they're, they're scrimping on the quality of the food.
32:39Uh, they're using seed oils and they're, you know, they're, they're scrimping on the portion
32:44sizes and the quality, um, maybe even the staff, right?
32:49So it's tough.
32:50That's definitely a trend that's been happening for a while.
32:53And, uh, Costco is a great, great play.
32:54I love that.
32:55It's that support right now too, from a technical perspective, it's just a little above it.
33:00I wonder how much health issues are driving eating at home now.
33:05I mean, so many people are focusing on longevity and changing their lifestyles.
33:10And I think that's driving a lot more of, uh, eating at home.
33:14So there just aren't, I mean, going out, you just can't find the choices you want,
33:19you know, if you're on certain diets and so on.
33:22Sure.
33:24That's a great point.
33:25I think there's a lot more, uh, you know, you know, we used to basically trust what we ate,
33:30you know, um, my, my wife's from Brazil and we'll go shopping and, and I'll be picking
33:35something off the shelf and she'll say, you know, they don't sell that in Brazil.
33:38They're not allowed to sell that product.
33:40I'm like, really?
33:41And, uh, so, so it turns out that we allow many things in the United States to,
33:47to appear on our shelves that simply would not appear in another country.
33:52And, uh, and I think we're finally becoming cognizant of that.
33:55So just to tag onto Rev's point, I think we're finally becoming cognizant of that.
34:00And I think we're all, you know, being a little bit more conscientious about it.
34:03And I think that's going to add up too.
34:05So that's a very good observation.
34:08Yes.
34:08Not just about the quantity of life.
34:10It's about the quality of life too, right?
34:12We all want to live longer, but you know, we want to live healthy.
34:15Yeah.
34:16Um, I think that's, I think that's a great point too, about, about longevity, um,
34:20and sort of wrapping up the picks.
34:23Um, at least two of you had picks that were around health and, and longevity, right.
34:27Or health.
34:28Let's just say, let's just say Costco eating at home is, is a health choice.
34:32Right.
34:32Um, so I, I think, um, I think that says a lot too.
34:36It's not, it's not just technology, even if that's what we hear the most about, um,
34:40in the market these days, but it was really great to see that people are thinking beyond
34:43the technology bubble.
34:46Did you say bubble?
34:48Don't say bubble.
34:49Um, I was thinking about the, the chewing gum.
34:53Yeah, absolutely.
34:55I think, I think we only know if it's a bubble in the fullness of time.
34:59So cannot predict it now, but we'll see.
35:01Um, anyway, does anyone have any, um, any last minute comments, anything they'd like to say?
35:07No, just ride, surf that wave for as long as you can.
35:11You know, we're on that wave now.
35:13Just stay on that board for as long as you can.
35:16Listen to rev, cut some, you know, maybe do some trimming along the way, but you, but, and that
35:21helps you to stay on the board.
35:23If you trim those positions, it, it psychologically, it makes it easier to hang in there.
35:28Just try to hang in there because I think we're, we're, we're going into a really strong phase coming up.
35:33I can't, I promise you that it's going to last.
35:35I know it's not going to last forever, but I think it's going to be a good quarter.
35:38So Ed, um, between ride the wave, hang in there.
35:43We're supposed to hang 10.
35:44Is that it?
35:46Absolutely.
35:47Okay.
35:48Don't ask, don't ask, don't ask me.
35:49I've, I've never successfully surfed a wave, but I do love the ocean.
35:54I like watching other people do it, but you're not going to get me out on it.
35:56Yeah, there's not a lot.
35:58I don't recall there being a lot of waves up there in Pennsylvania.
36:01No, but we're close to the Jersey shore.
36:03You got to see, you know, it's true.
36:05If the weather's close to 80, you know, we're hitting, we're hitting the beach.
36:09All right.
36:09All right.
36:10Hey, Jason, the only thing I will say is, uh, I, I thought we had a great conversation
36:13and I always enjoy talking with Lewis, who's been a frequent guest on the podcast.
36:17Ed, you've been there in the past and I hope you'll come back soon.
36:20And, uh, Rev, we haven't had you on the podcast and I'm hoping a week we can make that happen.
36:26Well, let's set it up.
36:27Let's set it up.
36:29Awesome.
36:30So wonderful.
36:32All right.
36:33I just want to say thank you to everyone who's listening and, uh, thank you to all our subscribers
36:37and members.
36:38Uh, I appreciate you all, uh, with that.
36:40I think we can wrap it up.
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