Jim Lebenthal

The speaker bought eBay as a way to play the discretionary consumer sector, believing it benefits from both luxury and secondhand/refurbished goods markets. He highlighted collectibles as a major, underappreciated growth channel and noted the stock trades cheaply (low teens forward P/E), has very little debt, good free cash flow, and aggressively shrinks its share count. If geopolitical tensions ease and oil/gasoline prices decline, discretionary consumer spending should recover. eBay's platform is uniquely positioned to capture spending across the economic spectrum (K-shaped recovery). LONG because it is a growing company at an attractive valuation with multiple catalysts (broad discretionary recovery, niche growth in collectibles, shareholder-friendly capital allocation). A failure to de-escalate in the Middle East, keeping energy prices high and crushing discretionary spending.

Speaker notes WYNN pulled back from 130 to 110 and DAL shares are down despite planes and airports being "packed." The pullback is attributed to the stocks getting "ahead of their skis" (valuation) rather than operational flaws. With low unemployment and wage gains continuing, the long-term trend of consumers seeking experiences remains intact. LONG (Buy the dip on valuation reset). Rising oil prices affecting airlines; persistent consumer slowdown.

Added to Nike after earnings, as the market's rally on potentially bad news indicates a buying opportunity and signals to get invested.

The market is telling investors to get in, as it is near all-time highs and stocks that should be doing poorly are performing well, indicating underlying strength and a bullish outlook.

Added meaningfully to BlackRock because he feels good about the market and doesn't think things are worrisome, indicating confidence in further gains.

Farmer stated "CISCO SYSTEMS CONTINUES TO OUTPERFORM." This indicates that Cisco has demonstrated strong performance and is expected to sustain this trend. LONG due to the expectation of continued outperformance based on historical strength. A reversal in performance drivers or deterioration in market conditions for networking equipment.

Lebenthal calls Citigroup the "easy button," citing its valuation (trades at book value), profitability improvements, a ~2.5% dividend yield, and the pending Banamex Mexico IPO/spin-off as the "final piece of the puzzle." CEO Jane Fraser's restructuring is bearing fruit, and the removal of the Banamex overhang will simplify the story. The stock's discount to book value offers a margin of safety. A straightforward value play with multiple near-term catalysts (profitability, divestiture) that should lead to a re-rating. A broader economic slowdown impacting credit quality could offset operational improvements.

Lebenthal states Microsoft is a "great company" and at ~22x forward earnings with >20% growth (PEG <1), it's a "steal." He explicitly says, "this is a price that I think two years from now I'm going to look back and say man that was a steal" and that he is loading up. The recent downdraft is attributed to general market selling (QQQ/SPY outflows), not company-specific news. Its RSI is at multi-year lows (~36), indicating extreme technical weakness. The combination of a low valuation metric (PEG) for a dominant, profitable franchise in AI (Azure, OpenAI) and a washed-out technical setup presents a high-conviction long opportunity. The stock could become more oversold (RSI 25) if market sentiment on tech/AI spending worsens further.

Lebenthal describes Oracle as a "coiled spring" for AI believers, down ~50% from highs. He acknowledges the market doubts OpenAI can pay its large contract with Oracle but argues "they just have to be good for some of it." OpenAI's recent massive fundraising ($110B) and incoming customer contracts provide credibility that at least partial payment will flow through to Oracle's earnings, which the market is not pricing in. The extreme sell-off on OpenAI solvency fears is overdone, creating a high-risk/high-reward long opportunity if AI spending remains robust. OpenAI faces financial or operational difficulties, jeopardizing its contract payments to Oracle.

"Retail sales have been good. Look at Costco. Look at Dick's look at Walmart." Despite fears of war and rising oil prices, underlying consumer spending remains robust. Strong economic data (Atlanta Fed GDP tracker at 2.7%) and high productivity mean these specific large-cap retailers will continue to capture consumer dollars and defend their earnings against macro volatility. LONG because domestic consumer staples and dominant retailers offer a safe haven with proven fundamental strength during geopolitical uncertainty. If oil prices remain elevated for months, it will eventually cause demand destruction at the consumer level, hurting retail margins.

"Retail sales have been good. Look at Costco. Look at Dick's look at Walmart." Despite fears of war and rising oil prices, underlying consumer spending remains robust. Strong economic data (Atlanta Fed GDP tracker at 2.7%) and high productivity mean these specific large-cap retailers will continue to capture consumer dollars and defend their earnings against macro volatility. LONG because domestic consumer staples and dominant retailers offer a safe haven with proven fundamental strength during geopolitical uncertainty. If oil prices remain elevated for months, it will eventually cause demand destruction at the consumer level, hurting retail margins.

"Retail sales have been good. Look at Costco. Look at Dick's look at Walmart." Despite fears of war and rising oil prices, underlying consumer spending remains robust. Strong economic data (Atlanta Fed GDP tracker at 2.7%) and high productivity mean these specific large-cap retailers will continue to capture consumer dollars and defend their earnings against macro volatility. LONG because domestic consumer staples and dominant retailers offer a safe haven with proven fundamental strength during geopolitical uncertainty. If oil prices remain elevated for months, it will eventually cause demand destruction at the consumer level, hurting retail margins.

"ISM Manufacturing survey is nicely into expansion for the second month in a row... indicates very good economic strength here in the U.S." The market is bifurcated. While consumers might be shaky, the industrial economy is re-accelerating (onshoring, capex). This domestic strength is uncorrelated to Middle East conflict. LONG. Industrials are the strongest cyclical group technically. Sustained high energy prices increasing input costs for manufacturers.

Speaker observes that share price charts for these companies exactly mimic their valuation charts, and valuations have compressed significantly (e.g., Workday at 12x forward vs. 35x two years ago). The market has aggressively priced in skepticism about future growth. At ~12x earnings for asset-light businesses, the risk/reward shifts to the upside because the "fear" is fully priced in, making them deep value plays. Long on valuation compression. Shannon Saccocia's counter-thesis: AI creates "obsolescence" and "disintermediation" risks that make historical valuation comparisons irrelevant.

Speaker observes that share price charts for these companies exactly mimic their valuation charts, and valuations have compressed significantly (e.g., Workday at 12x forward vs. 35x two years ago). The market has aggressively priced in skepticism about future growth. At ~12x earnings for asset-light businesses, the risk/reward shifts to the upside because the "fear" is fully priced in, making them deep value plays. Long on valuation compression. Shannon Saccocia's counter-thesis: AI creates "obsolescence" and "disintermediation" risks that make historical valuation comparisons irrelevant.