New Constructs Monthly Podcast July 2025

Thanks for joining us today. Welcome to you from all over the world. I see some names that I don't even know if I could pronounce. Welcome to you all. Without further ado, Hakan, why don't you kick us off here?

Yeah, welcome again for— to everyone. Your hosts are David, as usual, and me, Hakan. Salt. And first of all, obviously we'll go through disclaimers and disclosures. We're not giving any advice, we're just sharing information and providing research. And we'll jump into the agenda, our latest research. As always, you can find the replays and slides to this podcast and in the community. And this is our monthly podcast. We are hosting the next one on August 8th. So So mark your calendars, we'd love to see you there. And latest research, we have new long ideas and updates, new danger zone picks. We updated a couple of our model portfolios since the last one. Yeah, the best way to see our research is go to our website and the blog. Everything is there and we provide a lot of research every week. Yeah, long ideas, danger zones, everything you can see by tab as well. And we really picked up with the ETFs and mutual funds research last week and this week. So best and worst rank, um, 5 best and 5 worst ETFs in all the sectors, and the style ones are coming out next week. So a lot of value-add research you can find on our blog site.

There's so much research here, and there's also so much we give away for free. Free stock pick from the very attractive stocks list.

Yeah, a lot of free stock picks.

Really key insights. And we do this because we want you to know how good our research is, but we also understand, look, you need to know how good it is before you pay. That's the way the world works. So we're giving you this access before you pay because we believe that when you see it, you're going to want to pay us for more. And we'll get into this a little bit later. There have been some questions about how to price certain things on our site, but I think it's— I think you're going to find that we give out an extraordinary amount of free research so that people get the chance to know what we do before we do it. Definitely before they pay for it.

And with that, we'll jump into the agenda. The footnote season is starting soon. A lot of filings are starting to come in, companies are reporting, so there'll be a lot of model updates and rating updates. So keep an eye out for them. Our actively traded indexes are continuing to outperform through the first half of 2025, as we'll show just in a bit. If we have time, we'll jump into the posts on community, and there's a couple of member trade discussions as well. And after that, David will go through the guidebook to earnings season and second half of 2025, or what to expect, how to navigate the second half of 2025. And at any time, if you have questions, pop it into the Q&A and we'll make sure to answer them. With that, we want to show the value add of our research just from the indexes we have with Bloomberg. So first of all, the very attractive stocks, just as the name includes, all the very attractive stocks in the Bloomberg 1000 index, so only the very attractive rated stocks. And this all outperformed first Q and also the first half of 2025. And over the longer term, it has a massive outperformance of 77% over the last 5 years. So just to show how superior our stock ratings are. After that, we have the Core Earnings Weighted S&P Index. This is literally the same stocks as the S&P, just weighted differently, weighted based on our proprietary, proprietary core earnings metric, which is just a cleaner version of earnings that removes unusual gains and losses and everything like that found in the footnotes. And just by weighting differently, we can see that the index is outperforming also in the first half and over the 5 years. And last but not least, the Core Earnings Leaders Index. This is an index that picks stocks based on the core earnings difference to the reported earnings. So companies that have the highest difference between core earnings, the higher actual earnings they have compared to the reported earnings, get picked for this. And This one outperformed greatly in the first half of 2025 and also over the 5 years. So just to show you the value add and the quality of our research and the accuracy of our metrics, the outperformances of the indexes.

Yeah, outperforming by 7%, doubling the S&P year to date is really probably pretty much what we've done. And even since we took this snapshot, outperformance has gotten even stronger. So I think that means that core earnings matters. You know, superior data makes a difference.

Yeah, definitely. And these indexes are managed by Bloomberg. They're not available to purchase, but you can get— it's based on our research. So you could, like we showed in the blog, and you can get our research from us.

Yep. Can't, can't get, can't get the indexes, but you can get the research, which all that stuff is based on, from us. And we're always for more ways to deliver. Let's talk about some new features and tools. Many of you may have already seen some of this, but I want to go through portfolio page enhancements, more research on the rating breakdown, and then probably my favorite is being able to screen by analyst notes and red flags. So let's go through what this means. So on the portfolio page, what we're talking about here is that, well, on the ratings page for a long time, you could type in the name of a company And it would figure out the ticker for you. Well, in the portfolio page, you can do the same thing. You can still copy and paste in a bunch of tickers, right, and add them to your list. But you can also do the lookup. So if you wanted to, you know, look for this company and add it to the list— anyway, you get the idea. You got the company lookup capability. Which is, which is great on this page as well. And then in the ratings breakdown, we added a couple new things. Number 1, the number of shares over time. So that's always interesting to know. You want to see this going down, not up. You want your ownership stakes to be getting larger, not smaller. That's good. You don't want them to be diluting people over time. So that's a nice addition on this page. Then we, then we also added Return on tangible invested capital, or ROTIC, to the ROIC chart. Super cool. Good thing to have there. And as an additional metric, because it's, you know, I think it's important to understand tangible invested capital, especially when you've got a new CEO or a new C-suite of managers running a company, because that legacy excess capital from acquisitions and stuff like that, goodwill, might not really be relevant to what the new management's going to do. So anyway, RYC is still our favorite number in general, but ROTIC, or return on tangible invested capital, is a good one to know as well. And then when it comes to the screeners, here we've got some really cool stuff. As you know, we can screen by rating at any time, but now there's a new thing to screen on. Analyst notes. So you can go in and see quickly, right, how many very attractive— or sorry, unattractive or very unattractive stocks have a bankruptcy in process? 2, right? Super cool. How many unattractive or very unattractive have restructuring going on? None right now. How about weak internal controls? Wow, a lot. Woo-hoo! Over 50. That's a big deal. Weak internal controls is a red flag. Who remembers the last big company that made an announcement about weak internal controls and then subsequently fell 50% in the matter of a few days? Anybody put that in the chat and I'll give you, give you a free report. Going once, going twice. Super Microcomputer. Last August, we posted that a red flag on weak internal controls at the end of last August. And that was a couple of weeks before the auditor announced that they were going to quit and the stock tanked, right? So these red flags mean a lot. Being able to screen on those is super cool, I think. Really, really nice to know and a great new feature. Let's see what's next here. Oh, yeah, new alerts too. So we've got a whole bunch more data in our, in our rating alerts. Now, some of these features may or may not apply to you. If you're a professional client, you're going to see the screener and you're going to get more detailed alerts on equity and credit. But as a Stock Tracker 50 subscriber, you're only going to see the equity ratings, but you'll still, still get these. Up and down arrows, and you'll get more details around adds to coverage, drops from coverage, because, you know, sometimes stocks just stop trading and we don't cover it anymore. And we, you know, we're going to let you know that. And then there's also, you know, returns to coverage, promotions in coverage, demotions in coverage. So like a company's going to demote it in coverage to not having a rating, but we'll still have the data. It'll get demoted. Like, for example, if it all of a sudden has no revenue, like it just goes to zero revenue, we got to get no way to cover this anymore. It's like there's no— you can't build a model on a company that has no revenue. There's no valuation on that. And so we'll demote it, or we oftentimes move them from data only to a primary or premium coverage where they now will have a rating. So we'll put all that in there for you to see as part of these new and enhanced alerts. Please give us feedback. You know, we had some great feedback on the alerts. For example, the first version of these that went out, we'd taken out the arrows. And we had a client come back and say, hey, you know, I really like those arrows. And I thought the arrows were great. We should put the arrows back. So we did. And we just kind of missed it. You know, we're down heads in the ground trying to get all this information in there. We take something out, we forget like, oh my gosh, arrows are great in an email because it very quickly gets you to what you do or, you know, don't care about. Like, hey, did I— did one of my stocks get upgraded or downgraded, which is the primary reason for all those alerts. So let us know when you have feedback. It makes us better. All right, let's take some look at the discussions and feedback from the community. Legacy stocks and defense stocks. You know, some great questions here. So we, you know, a lot of stocks stay on the attractive, most attractive stocks list. Not a lot, but some stay on that list for a long time. Some keep their attractive and very attractive rating for a long time. And you look, that's just kind of the nature of things. These things don't always turn over. Some stocks keep getting more profitable. I mean, I know JP Morgan, for example, has been an amazing stock pick and focus list stock for us. It's been forever. It's still very attractive. Sometimes it drops to attractive, but now it's back to very attractive. Like, I don't have to say good stock stays good stock. I don't know, man. I think that makes things easier. I'd take it. Love it. An Allison Transmission, one of those. And I think we had a great question about defense picks and shovel ideas, defense pick and shovel ideas, right? Like, what are some companies that help serve the defense industry that maybe people haven't thought about that are farther upstream than the companies that are actually producing the defense products? And the best way to do that is just go screen in our system, use the screener. You know, I don't like to give away answers for free. But, you know, when you've got the screener in here, you can come in and say, all right, I'm going to go no analyst notes. And then I, you know, I can come in and say, okay, where is defense? Industrials.

Industrials.

Aerospace and defense. Go. Right now, we probably would go to the attractive and very attractive if we were looking for stuff to buy, but you get the idea. Here's a big list. Right now I can go in and break in, you know, this makes it much easier now for me to go in and break down which of these companies is more a pick and shovel or not a pick and shovel. Of course, you could add other qualifiers here that you'd wanted. You could say, look, I want something that's got a return on capital greater than 10%. Go. All right, now your list is smaller. But the idea is that the screening tool is incredibly powerful. Incredibly powerful, mostly because every single data point in our models is best in the business. So, when you're screening on a rating, it's the best stock rating in the business. If you're screening on return on invested capital, it's the best measure of return on invested capital in the business. Why is our stuff the best? Because it has the best source data. Models are only as good as their inputs. The old saying, garbage in, garbage out. And we don't put garbage on our models. We have super high-quality data. I think the next thing I wanted to talk about is the add-on columns, adding, you know, potentially adding à la carte additional columns to the Stock Tracker 50 membership. And in this discussion, we had some great comments around, hey, what should you pay for research? And I think one of our, one of our community members made a really great comment around looking at our sort of our professional membership or memberships in general as a percentage of assets in the same way that an advisor takes a percentage of assets. And I think it's a great benchmark. It's a great benchmark. And especially if you've got a really, really great advisor who does an amazing job, in which case you're probably going to be paying at the high end of that 0.5% to 2%. And if you're at 2%, I think our fees are really, really low. If you're 0.5%, then maybe we seem expensive. But I think you have to ask yourself, what's worth paying for? Right? Is there a price you can put on diligence? Is that expensive? Is that too expensive? What cost? Right? It's like going to the hospital. Do you want a really good doctor or do you want a cheap doctor?

Right?

Because advisors aren't that great. Now, look, if your advisor is using new constructs, all in, that's great. And we have a lot of advisors as clients. That's awesome. And that's a great way to scale new constructs that an advisor can use it for a lot of their clients and add to their diligence. If you're not going through an advisor, if you don't have anyone else who has access to new constructs, do you want to make investment decisions based on a doctor who's a quack, or do you want to make investment decisions based on a doctor who's a true expert? I think the healthcare analogy is really good here, right? Expertise and diligence makes all the difference in the world. Right? You pay, you know, you get what you pay for in research. You want to pay a lot of money for research, you're going to get bad information. You're going to make bad investment decisions. If you don't care about that, by all means, go ahead. So I think that's the important way to think about new constructs. And, and, and look, I get, we get pushback on price all the time, not from our clients typically, but from people, new people coming on. And I'll tell you, hand on heart, we have institutional clients that come in, they pay us 6 figures. Some of these are like teams of 2 and 3 people, over 6 figures a year. Why? Because they know and they tell me, say, David, you know what? I love it. This is great. You know, I'd come in, 15%, 20% increase, price increase. Yeah, no problem, David. You know why? Because if I didn't have new constructs, I'd have to spend millions of dollars. to replicate what you're doing. Millions every quarter. So you're giving us a great deal. And I think, look, the institutional investors, they get more data, they get more granularity, they get more screeners, they get access to models, but they're looking at the same ratings that you're looking at. There's no one rating for one kind of client, another rating for another kind of client. You get the same rating. It's all based on the same super high-quality information. So. You can talk to me about price all you want. At the end of the day, I'm going to say, what's it worth to you to have good information? Can you put a price on diligence and accuracy, integrity, honesty? If that doesn't matter to you, sure, go with something cheaper. If it does, then you're not going to get anywhere close to as good a deal anywhere else as you get from us. It's not even close. Now, the option stuff is something that we got to give full credit to one of our clients, John Fallensby, and been a client for a long time. He's not on here today. He's usually on all these calls. He's great. If you haven't seen his posts on options trading and ideas and straddles and all this stuff that he does, totally check it out. It's excellent. It's great. You know, at some point we get big enough, we just have to bring Jay on or John on as like our options expert. And always know you can— Khan, are you able to drop the link to the community into the chat?

I believe I don't have access, but if you give me, I can put it in there.

Yeah.

Oh yeah. Okay. Put it that— Here we go.

I got you.

Thank you.

Yeah. Here is the link to the community, and if you want a free invite, we'll let you in for free. You just got to fill out this form. There you go. So let's talk a little bit more real quickly here as we move on about what we're looking at for 2025, because we want you to know how concerned we think people ought to be and, and how to navigate the market. First of all, we've done a bunch of trainings lately. If you guys did not see our Stocks Most Likely to Miss and Beat Wall Street Earnings, we got a great webinar. We got a great couple of, of reports that talk about the stocks most likely to beat and the stocks most likely to miss. If you haven't seen that, I highly— you got to see that. You got to know. You got to do, do your diligence. Do you want to be all holding the stocks you're going to beat? And would you like access to the stocks? All right. So you want to be holding the stocks that are going to miss, and you want to be holding the stocks and know which stocks are most likely to beat. That's based on superior data that no one else has. Superior data that no one else has and drives alpha, as you can see in the performance of the indices. That's the other thing, folks. Like, name another research firm. Put it in the chat. I'll give you a free report on it on the ticker of your choice. Name another research firm. that's got 3 indices that outperform and a patent and papers from Harvard Business School and MIT Sloan proving the data is better? Get it. You get to get one firm that can do any of that. Put it in the chat. I'll give you a free report. We did an Ideas Dinner this week too for our PRO members. If you're a PRO member on the call and you missed the Ideas Dinner, shame on you. It's a great conversation. You got to show up. It's awesome. A lot of really smart colleagues of yours that are in there. It's a great, it's a great call. But first, let's, let's take a minute to talk about the current market from a mathematical perspective. Because on the surface, markets could look better. Keeps going up, maybe down a little bit. Everything looks awesome. Every bullish strategy is working. All-time highs everywhere. Stocks, home prices, Bitcoin, money supply, national debt. Inflation, it's not an all-time high, but it's bad too, right? Fed's going to cut. Like, what, what, what can we— what can make it better? Stocks from all the sectors seeing huge gains. Almost every— mining, transportation, industrials, health, technology, aerospace, energy, everything's up. And the way July usually goes, it's going to stay that way. We haven't seen a red July in 10 years. Here's a big one. M2 money supply jumped 4.5% year over year in May to a new all-time high. Money supply, you know, that's like, that's the alcohol in the punch, friends. That's just going to keep everybody partying. Nothing could go wrong according to the financial media. Or could it? Right? The Shiller PE at 38, it's the second highest since the dot-com bubble.

Right?

I think everyone agrees things are expensive. But it's expensive and nutty that gets you in trouble, right? Like the fact that everything is a positive. For example, a company reports strong earnings, stock goes up. Makes sense. But how about a company that misses earnings and the stock still goes up? Like Nvidia back in May missed on adjusted earnings per share by a lot and warned that it was going to lose $8 billion in sales next quarter. Stock still goes up. Anil, I see you raised your hand. Hey, do me a big favor. If you would put your question into the chat or the Q&A, we will take it that way. Right? So stock misses earnings, still goes up. That's not right. And keep thinking about all the negative news concerning tariffs, deficit, slowing growth, heightened geopolitical risks. Market's still all-time highs, all-time highs. Logic, we think, has left the building. Emotion and momentum, not fundamentals, are in the driver's seat. Now, that can be good and it can be bad, but the truth is, one thing that you need to know no matter what is that you're being misguided by Wall Street and the media. Wall Street's business model depends on you buying stocks. I want you to understand their paychecks are tied to investment banking and trading volume, not to providing accurate, unbiased research. It's a huge conflict of interest. I'm not just talking about a conflict. I'm calling it— talking about counter-incentive going on for years. But it's also your biggest opportunity. People don't get this. Yeah, there's a conflict of interest, but this is a big opportunity to beat the market. See, our, our research enables you to see how Wall Street is cheating and use it against them. Because our AI uncovers the truth. So you can beat them at their own game. Here's the secret. Here's what I'm getting at. The secret Wall Street doesn't want you to know, and they will go to almost any length to keep you from figuring it out, because once you do, you're gone forever, right? Like our clients. Like these people are like, they love us. They can't— there's no one else that does what we do. And they know it would be exorbitantly impractically expensive for them to try to do it. And Wall Street doesn't want you to know this truth either, because once the wool is removed from your eyes and you're given the key to beating them at their own game, you're not going to go back. Here it is. Wall Street analysts, the people publishing the research, They have to please their bankers or they get fired. Don't believe me? Here's an example, prime example. A few years ago, this is a guy I worked with. I saw it happen. He was at Credit Suisse when I was there. And he was a great analyst, amazing ratings, but he had sell ratings. And even though he was right on those sell ratings, he got fired. He got fired and was replaced by a lower-ranking team.

Right?

Because even though there were those who appreciated his blunt views, the banks on the receiving end were not enamored, to say nothing of his employer. In other words, the companies and the investment bank didn't like the negative ratings, and the comp— and the investment bank, his employer, doesn't like negative ratings, because if you're an investment banker And you go to meet with a company and they're ticked off about the fact that your analyst is saying bad things about them, do you think they're going to do business with you? No. Guys, this is not clear. This is not tough. This is easy to understand. Ken, also, you raised your hand. Please put your question in, if you don't mind, in the chat or the Q&A. So, Wall Street writes favorable research and makes up numbers to support all those buy-and-hold ratings. Right. That's the takeaway. They got to be positive. They have to please the bankers, but you don't have to. You just need to look out for yourself. You don't have to please anyone else. You please yourself, which means you get to use true research that Wall Street analysts can't use or they get fired. They're forced to put bad stuff out there, forced to make bad calls, forced to fake the numbers. You can use that as an advantage because you've got better numbers and you can get an advantage over all those people looking at the wrong numbers. That's the secret Wall Street is keeping from you. You don't have to rely on them. You don't have to use the bad research. You don't have to drink the Kool-Aid. You can choose to use better research, unbiased, independent research that is proven to outperform. What are you waiting for? Do you like using biased, flawed research? How can you trust buy ratings when Wall Street rates over 50% of the market as a buy? Only 4% of stocks we cover get a very attractive rating. And we rate the majority of stocks unattractive or worse. Who would you trust? The people who rate most everything a buy or the people who are more discerning? So how does our research find the right stocks? Diligence. We've done the work. That's why our indices outperform. That's why we're the number one, number one ranked stock picker for 49 straight months on SumZero. And on our recent training, we gave you the opportunity to see that our research works before you pay the full price. That's because we trust our research and we trust you to come back and buy more research after you see how our honesty pays off for you. And we make it easy to trust you. We give you pre-screened stocks, right? We make it easy for you to trust us. We give you pre-screened stocks, both attractive and dangerous, delivered to your inbox every single month on a silver platter. But for the next few days, we have a special deal for the most attractive and the most dangerous stocks. It's an opportunity for deeper learning about how to apply our proven superior research to your own investment decisions. So, yes, our research, is it more expensive than some? Yes. Is it more valuable? A million times more valuable. But every now and then, we give out deals that are really maybe too good to be true. Go and put a— click the link in the chat that we provided and you'll get access to the special deal. Hakan, you have the link to that checkout? Yes.

I will put that in the chat.

Great. Let's see here. Do we get it? I saw a couple of people raise their hands. What do we got in the Q&A here? Any thoughts on how the recent legislation impacts one of our favorite ideas, HCA? I don't have a great— I don't have a great sense of that. Ken, great, great, great question. One of the things about HCA that I think we can talk about here For just a minute, we'll go and pull the rating up. Is that it's cheap? So there's room for bad news. There's room for bad news. Any other questions? Avi, you said you had a question. You raised your hand, or maybe it was Anil raised his hand. All right, well, no more questions. We will move on here. Check out that guidebook deal. That's an extremely attractive opportunity to get the most attractive stocks. ETFs and mutual funds. I'm sorry, the most attractive stocks, the most dangerous stocks at like 60% off. That's a once in a long period, once in a lifetime. I don't know about lifetime. We offer a lot of good deals, but not on the most attractive, most dangerous stocks. You're not going to see something like that come along for a long time. So take a look. Otherwise, we will When the update, the safe dividends portfolio is expected? John, that should be coming out soon. Let me see here. Hakan, do you know, have an exact date?

Safest dividend yield is, should be the 23rd of this month.

Safe dividend. See here, go here. And if it was—

The 23rd of this month, we'll update it.

Okay. Yeah. So, you know, if it came out on the 18th, Last month, it's going to be pretty close to that date in the next month. So we keep them around the same week of the month every time.

So, so next Wednesday it'll be out.

Great question. All right. If that's it, folks, thank you for being with us today. Appreciate it. And we will look forward to seeing you next time.

See y'all next time.