Ben Carlson

"Since 1928, the US stock market is up 73% of all years. Since 1950, 80% of the time over 12-month periods, the stock market is up." Because the market has a statistically high "win rate" over any 12-month period, holding cash to "wait for a correction" or dollar-cost averaging slowly is statistically likely to result in underperformance. The probability favors immediate, full exposure to the broad market. LONG broad US equity indices immediately upon receipt of cash. "Murphy's Law" timing risk where the market drops immediately after the lump sum deposit (psychological risk, not statistical).

"We are looking at the worst start to the year for US stocks versus MSCI World since 1995... European stocks, Pacific stocks... are just smoking the S&P." A combination of a potentially weakening dollar, "Sell America" sentiment due to political/AI risks, and attractive valuations abroad is driving capital overseas. The momentum is now self-reinforcing as these markets hit multi-year highs. LONG International Equities (Developed and Emerging) to chase the momentum and valuation gap. A sudden strengthening of the US Dollar or global geopolitical instability.

The ratio chart of International Developed stocks (EFA) divided by US Total Market (VTI) flatlined, puked, recovered, and is now accelerating upwards. This technical pattern looks like a "real bottom" after years of false starts. A weakening US Dollar and the "broadening out" trade support international assets. International stocks are finally set to outperform US stocks. US Dollar strengthens again; US tech dominance resumes.

"Since 1928, the US stock market is up 73% of all years. Since 1950, 80% of the time over 12-month periods, the stock market is up." Because the market has a statistically high "win rate" over any 12-month period, holding cash to "wait for a correction" or dollar-cost averaging slowly is statistically likely to result in underperformance. The probability favors immediate, full exposure to the broad market. LONG broad US equity indices immediately upon receipt of cash. "Murphy's Law" timing risk where the market drops immediately after the lump sum deposit (psychological risk, not statistical).

Floor & Decor (FND) is a beaten-down stock (65% drawdown) that will benefit from a multi-decade home renovation boom. Aging housing stock, boomers staying in homes longer, and locked-in mortgage rates will eventually drive renovation spending, and the stock is a way to get ahead of that cycle.

South Korean stocks, represented by the EWY ETF, have gone vertical in the last year, driven by a massive explosion in forward earnings per share as companies like SK Hynix and Samsung become AI plays. The earnings chart matches the price chart, showing fundamental support. The South Korean market has overtaken Canada and the UK in size, reflecting this AI-driven transformation.

For cash needed within 1-2 years for a down payment, invest in T-bills, high-yield savings, money market, or short-term bonds yielding 3-5% to avoid principal loss risk.

Ben Carlson stated Meta is down about a third and included it with Microsoft as a "big high quality compan[y]" where the "highest probability bet is plugging your nose and buying Meta and Microsoft here and just don't look at them for 5 years." Despite regulatory lawsuits and the failed Metaverse investment, the company's core business (Instagram) remains strong, and it has weathered significant drawdowns before (e.g., -70% post-Metaverse). LONG because the current bear market decline offers a long-term buying opportunity in a company with a proven ability to recover from major setbacks. Regulatory actions could have a material impact. The core Facebook platform is seen by some as a declining "ball and chain."

Ben Carlson stated Microsoft is down about a third, is a "big high quality compan[y]," and that the "highest probability bet is plugging your nose and buying Meta and Microsoft here and just don't look at them for 5 years." The stock has experienced a significant drawdown (~33%), placing it in the context of a broader MAG7 selloff, but the speaker views it as a high-quality business whose long-term prospects remain intact. LONG because the drawdown presents a high-probability entry point for a long-term investor willing to tolerate further near-term volatility. The technology cycle could change, preventing these "behemoths" from recovering as they have in past cycles. The stock could fall further from current levels.

When asked what will be higher a year from now between energy stocks, tech stocks, or gold, Ben replies, "If it was like say software stocks, it seems like that would be the easiest one." Despite geopolitical noise and commodity volatility, the secular growth and earnings power of the technology and software sectors remain the most reliable drivers of capital appreciation over a 12-month horizon. LONG IGV / XLK as software and tech offer the clearest path to growth, independent of messy macro and geopolitical variables. A sudden spike in interest rates (due to inflation/oil) could compress the valuation multiples of high-growth software companies.

When asked what will be higher a year from now between energy stocks, tech stocks, or gold, Ben replies, "If it was like say software stocks, it seems like that would be the easiest one." Despite geopolitical noise and commodity volatility, the secular growth and earnings power of the technology and software sectors remain the most reliable drivers of capital appreciation over a 12-month horizon. LONG IGV / XLK as software and tech offer the clearest path to growth, independent of messy macro and geopolitical variables. A sudden spike in interest rates (due to inflation/oil) could compress the valuation multiples of high-growth software companies.

"Brent oil... was up 8% yesterday... Natural gas prices [in Europe] up 35%." A geopolitical supply shock (Iran strikes/Hormuz concerns) is driving input prices higher. While the US is energy independent, global pricing mechanisms (Brent/Nat Gas) are spiking, acting as an inflationary tax and boosting energy commodities. Long energy commodities as a hedge against the geopolitical flare-up. AI/Deflationary forces eventually trumping inflation narratives (as they have historically).

"Brent oil... was up 8% yesterday... Natural gas prices [in Europe] up 35%." A geopolitical supply shock (Iran strikes/Hormuz concerns) is driving input prices higher. While the US is energy independent, global pricing mechanisms (Brent/Nat Gas) are spiking, acting as an inflationary tax and boosting energy commodities. Long energy commodities as a hedge against the geopolitical flare-up. AI/Deflationary forces eventually trumping inflation narratives (as they have historically).

The prevailing doom narrative is that AI destroys jobs and income, crushing the economy. If AI is deflationary and replaces digital labor, the "Physical World" becomes the primary store of value. Furthermore, if AI causes deflation, the Fed will cut rates and the government may print money, both of which historically cause housing prices to skyrocket. Real Estate is the "best AI hedge" because it cannot be digitized or automated away. Mass unemployment (10%+) leads to mortgage defaults and a housing crash (the specific bear case cited in the Catrini piece).

Ben notes that in "weak dollar regimes," International stocks tend to outperform US stocks significantly. He explicitly adds, "Gold outperforms by a ton when the dollar is down." The current environment (referenced by the viewer's currency drag and Ben's charts) suggests a shifting currency regime. If the USD continues to decline or remains weak, the multi-year tailwind for US stocks reverses, favoring assets denominated in foreign currencies and hard assets like Gold. Long International Developed Markets and Gold as a hedge against USD devaluation. A resurgence in the US Dollar (DXY) due to a "flight to safety" event or hawkish Fed policy relative to other central banks.