Which Beaten Down Stocks Are Worth a Closer Look?

Summary

• The S&P 500 is down ~7-8% from highs, but the equal-weighted S&P 500 is flat YTD, masking significant internal dispersion.
• The MAG7 (down ~14% YTD) is in a correction, with three stocks (Tesla, Meta, Microsoft) in bear markets, but their weakness is being offset by strength in sectors like energy, materials, utilities, and industrials.
• Ben Carlson identifies a list of "beaten down" household names across categories: software (ADBE, CRM down 50-60%), private equity managers (KKR, Apollo, BX down 40-50%), credit cards (COF, AXP, V, MA down 17-30%), and fintech (HOOD, COIN, SQ down 55-80%).
• Ben's highest-probability stock picks are high-quality, large-cap names like Microsoft and Meta after ~33% drawdowns, advocating a "plug your nose and buy" long-term approach rather than speculating in more disrupted areas.
• Duncan Hill has been buying Microsoft based on external research and Nvidia due to its improved valuation relative to earnings growth.
• Duncan also expresses interest in American Express (AXP) as a play on affluent consumers who are more resilient.
• Both hosts are skeptical of 24/7 trading, viewing it as inevitable but likely benefiting professional arbitrageurs over retail speculators; they advise maintaining low-frequency trading habits.
• Ben argues that higher long-term market valuations are driven by the "automatic investing revolution" (e.g., 401k defaults, target-date funds), lower barriers to entry, and more efficient corporate profit margins, not by a shrinking supply of public equities.
• Ben advises financial advisors to build a "library of expertise" via a owned newsletter (e.g., Substack) written in plain English for current and future clients, rather than aiming for viral fame or publishing in traditional outlets.