Watch our Special Webinar: The Game Plan for 2025 Part II

Thank you for being with me today. Here we are in a continuously wild market, and I felt it was important for us at New Constructs to, to step in here and do our best to calm investors and reassure them in what I think is a world that's very difficult to be reassured. And we continue to provide alternatives to the traditional mainstream Wall Street research that outperforms significantly. We continue to make recommendations for specific stocks that are up even while the market is down. And of course, our danger zone warnings are all coming in true as could be these days. And ultimately, I guess what I'm trying to say is that our research is really working. It's worked always, but it's working especially well now because this market is a situation where you've got upheaval, you've got turmoil, which is actually pretty normal. We've only just been conditioned to believe that markets only go up in the last couple of decades, except for a few very brief exceptions. That's not real. That's not how markets should work. Unfortunately, weaning ourselves off of the stimulus, the socialization of risk and the privatization of gain is going to create some havoc. Because guess what? The people in power that have privatized the gains, they're not going to want it. It's been really good for them. It's been really profitable. They are up in arms with this upheaval. And we shouldn't be surprised any more than we should be surprised that the people in the government who've been unfairly paid, that Doge is pointing out, we shouldn't be surprised that they're up in arms. Now, that doesn't mean that everything is being done in the best way possible. I don't know the best way possible. I do know that I think change is good. And I think that having a portfolio, regardless of whether— of how you feel about change, I think it's good for you to have an investment strategy, an investment process that can handle change. Because change happens. The longer you hold back on it, probably the more severe it will be. But change happens. With that, let me share my screen and get going here. As usual, please get your questions into the chat. Please get your suggestions into the chat and/or requests for tickers for me to cover. So some of this stuff is going to be hammering what I've talked about in the past. Why? Because it's still true, and I think it's important to continue to hammer these points in. But again, if you got requests, you get certain tickers you're worried about or concerned about, want to know more about, Let me know. I've got tickers that I'm going to give you that have worked, and we're going to think are going to continue to work. I'm also going to show you indices and model portfolios that are working, that are, I think, proof positive that what New Constructs does works in this environment as it does, I think, in all environments. First and foremost, no advice here. I'm not giving you investment advice. I'm giving you research. I'm giving you insights. You make the decisions. We're not advisors. We're not supposed to be advisors. That's not what we do here at New Constructs. So let's talk about the status quo here. What's, what's happening? Right? Volatility is nuts. It is crazy. We're seeing disruption in a way we haven't seen it since COVID or the global financial crisis. Keep in mind, once you put those things in the rearview mirror stock market-wise, they're almost inconsequential to long-term performance. As one of our guests has commented this morning already, the S&P is up 21% in the last 2 years. In the big scheme of things, in a fairly small scheme of things, in just a couple years' time period, we're fine. However, uncertainty is a problem for those assuming things would stay the same forever. What I mean by that is there are a lot of folks that have disproportionately benefited from a great stock market, from a great— I hate to say it, but a great COVID. Asset owners have benefited disproportionately. They have a lot to lose if the system changes. They're not happy with this. That doesn't mean it's a bad thing. We need change. We need creative disruption. And I think in this environment, now is the time when diligence matters most. This is when, when things aren't going like they're supposed to go, this is when your diligence matters most. Here's some consistent themes that I'm seeing too. Look, recession is coming. Businesses are being disrupted. Okay? We haven't really had a, like, a recession. I don't think we even had a recession during COVID I don't think we had enough negative GDP consistent enough To even for that to even happen. So that's kind of an interesting phenomenon, right? We haven't had a reset in any way for a long time, and and I think people are justifiably and understandably upset by how long this craziness will last. Keep in mind, it's been like a week, maybe less than a right at a week, one week of market turmoil. And in the last ten twenty years, we've had maybe you know. Several weeks of market turmoil. This is the exception to the rule for sure. Maybe too much the exception. Some thoughts: We've been conditioned to believe the Goldilocks economy would last forever, haven't we? There's the Fed put. There's the White House put, where the major forces, monetary and fiscal stimulus, those that control it, have been expected to step in. And fix things anytime the market's not right. And people believe in that because it's happened. I'm not a Ray Dalio disciple. I don't believe in everything he says, but I think his his his messaging around the cycles of world powers is absolutely right on. There there there are patterns here that are undeniable. Same is the true the concept of the fourth turning. They're very similar. Right around once a generation, every 80 to 20 years, 80 to 100 years, there's a cycle of revolution, prosperity, and destruction. And that gives way to more revolution and then prosperity and destruction. And so the fact— the idea that the Goldilocks economy would last forever was, I believe, false. And we know our borrowing and spending habits cannot last forever. How do we reconcile these 2 factors? The answer is we can't. There's got to be change. We can't continue to enrich the top 2 to 10% at the expense of the rest of the country. We can't pretend that people would rather deliver DoorDash to their betters than actually work a real job where they make something. At some point, we've got to We got to have some change. And look, change is hard. Unexpected change is much harder. Right? Is it really change if you expect it? It's a plan. So I think this idea that, oh my gosh, things are disruptive and what's going on? I mean, it's okay. These things are healthy for those that are prepared. And I think the only folks that aren't prepared are those, the ones that wanted to believe that the good days would last forever, that momentum will last forever. We could just trust Roaring Kitty or Reddit. Or Wall Street that that could just last forever. They tell you that because it's soothing, because we want to believe it. Society tells us there's a pill that can fix everything. Yet I think in our hearts we all know that hard work is what matters. Hard work is what deserves or merits reward, not luck, not following the herd. So we caution you against trusting people that are trying to sell you. On these traditional ways of of getting rich quick, because those are not sustainable. Speaking of getting rich quick schemes, I think Wall Street's pretty good at preaching that. Here we are with you know my one of my favorite examples of how much more Wall Street likes to tell you things are good than we do. Over 50% of the ratings that they have out there are buy ratings for us. It's less than 15, just 13. Same is true with Morningstar. Our ratings tend to be a little bit not quite as positive. We don't have as many buys as they do, especially in the ETF and the mutual fund space. We are not out there to make our clients— make companies and fund managers more money. We are out there to help people make more informed decisions, to be honest. We— and we're honest and in every way that we could possibly be as honest. How is our research different? It's called diligence. It's called hard work analyzing thousands of pages of SEC filings. Thousands, thousands, tens and hundreds of thousands, doing diligence to understand the truth, to find details that other people miss. It gives us alpha. It gives us alpha. We've got prestigious institutions proving that there's alpha, that there's— and when I say alpha, that's stock market outperformance in our data and in our research, proven by Harvard Business School, MIT Sloan School of Management, Ernst Young, the Journal of Financial Economics, the most prestigious institutions, many of the most prestigious institutions in the world. So our stock ratings Are different? Yes. Are they better? Yes. There's alpha there. I think this is— I need to update the slide. It's 45 straight months where we have been ranked number one in at least one category on SumZero. SumZero is a buy-side only network, so I'm not competing against a bunch of folks who don't invest for a living. Buy-side folks invest for a living. This is real competition. It's not seeking alpha. It's not Yahoo Finance. It's not Reddit. This has been tracked by professionals. And then we have our indices, live traded indices that are run by Bloomberg. This is real as it gets, my friends. This is a very attractive rated stock index. In the first quarter of 2025, it was up almost 5% while the index was down almost 5%. It outperformed by 9%. That's pretty impressive. It continues to outperform. I've had a lot of questions about how do I get into this index? You can't invest in it. This is the only way to invest with this stuff is to have our research and get our ratings. And I'll show you how to do that, how our system makes it super easy to get our ratings. This is not an investable index. This is only a— this is only something that's tracking stocks. It may be an ETF someday. We could license this to an issuer. It may be right now you can't. The only way to take advantage of this is to buy our research. And we are looking to make this available and we have other ways. There are, there are, there are ways that people can invest directly into some of our strategies. But this unfortunately is not one. And then there's the core earnings weighted S&P 500, or what I would call the enhanced S&P 500. And this one is kind of one of my favorites because I like to say, hey, look, Even if someone else picks the stocks, we can beat them. We can outperform because we can weight them based on core earnings, and that's going to beat market weighting or the S&P 500's weighting methodology, which is market weight driven, which is why we have so much concentration in such a few stocks, which is, I think, is sort of representative. The concentration in the stock market is in many ways representative of the concentration of the wealth in our country. That's not healthy. It's not good. We need change. We need disruption. Yes, that's going to upset the people that are super wealthy and have benefited from the system as it is. But long term, our country needs that because if we keep going towards more and more concentration, more and more overvalued stocks, the disruption we see today will be a drop in the bucket compared to what we see in the future. The longer you put it off, the worse it'll be. The more dysfunction in the system. The more correction required. That's why I like to say trusting Wall Street, trusting the media, trusting legacy forms of research, people who have been successful doing things the old way, it's like trusting tobacco companies who said that cigarettes aren't harmful or addictive. We all know that's laughable, right? And we will look back on Wall Street and we will laugh at the same thing, that people trusted Wall Street, the media, the people that benefited from the existing regime. Of course they're going to be upset when it's up, when it's disrupted. Of course they're going to want it to stay the same. Of course they're going to tell you that certainty lasts forever. The Goldilocks scenario keeps going on because they profit from it. They're conflicted, significantly conflicted. You can't trust folks who are conflicted. We have no conflicts in the constructs. To prove that we have no conflicts, I'm going to show you how to find great stocks right now. Here's how we do it. We have a technology, a RoboAnalyst technology, that is the first and best AI for investing. What do I mean by that? It's the first AI, real AI, because it's based on superior data. Data. Not just— we're not just throwing darts at a dartboard. We're not just talking to company management. We're not just looking at earnings. We are actually analyzing more data than has ever been analyzed for US stocks. And that's where we get alpha. In particular, we're going through footnotes. We use this technology to build better models for more companies than's ever been built. And to me, that's why it's the first and best AI. It's the first because it's based on a reliable dataset. Can't say that about any other AIs out there, certainly not these general large language models that are trying to digest the internet. Good luck. How much of the internet is reliable? Do you want any machine to be based on the internet? Do you want your machine to be based on unreliable data? No. Ours is based on the best data in the business. That's what part of what Harvard Business School and Ernst Young prove. And then we build models on that. So we've got better models. And this model is, is designed to give you not just a better answer, but a simple answer. You ever wonder why there's 20 different metrics on Wall Street and different ways to analyze profits and companies make up new ones all the time? It's called a shell game. As long as you don't know really where to look, you just got to trust them. Why is Wall Street research often so complicated? So that you use their advisors. Do you know that the advisor network in general was created just to syndicate IPOs to retail investors? It's just a better way to sell stock. And don't get me wrong, there's a lot of great advisors out there. I just want you to know the history of the advisor business was not to help you make better investment decisions. It was to sell more stock. Most of what Wall Street is designed to do is to sell more stock. That's where they make the majority of their monies— their money. You get a free Most Attractive Stocks model portfolio. I'll email it to you after the webinar if you will put in your guess for the percentage of profits that a Wall Street research department, the equity research department— well, how much does that department contribute to the profits of the Wall Street bank? Love to get some guesses on that. Okay, we got some people who, who I think maybe been here before, but yes, the answer is zero. Zero. All right, so we got to Frank and Curtis. Make sure you email me support@newconstructs.com and I'll get you a free copy of the most— the latest Most Attractive Stocks report. Yes, the point being they don't make money, they don't have influence. Guess who makes the money? The Wall Street investment bankers and the trade— their big trading desks. So who has the influence? Not the research folks, the bankers. So this AI works because it's, it's based on things that matter, like quality of earnings and valuation. We've been told valuation doesn't matter. We've been told profitability doesn't matter. We've wanted to believe it because if we did, then our— more of our stocks went up. Investing was easy. We didn't have to do hard work. Sure, a lot of people are willing to buy that. Oh, I can invest and it's easy and I don't have to do hard work. Great. I can still make money. Great, I'll sign up for that all day long. Right? This is just like you know it's crack. It's it's opioids for investing. So people want to hear. It doesn't mean it's right, and it isn't. So these five key things contribute to the overall rating. This is I think a very very sophisticated and proven successful, right? Because the stocks that get the very attractive rating, if you just hold those, you meaningfully. outperform the S&P 500 meaningfully in good markets and in bad. The key to this AI is that it gives us the ability to comb through thousands of government filings with precision. Green means good, red means bad. We have a patent on this. And again, the very attractive stock performance speaks for itself. So let's talk about some real-world recent stock picks. These are all stocks that we've written about. I believe sometime this year on our focus list. HCA, DR Allstate, Kroger, all up year to date while the rest of the market is getting crushed. Here's Kroger up year to date. HCA, one of our longtime picks. Now, DHI has been a great long-term pick for us. If we're going back 5 years, we're still talking about a significant amount of improvement Sort of to the point earlier in the call, this stock has done extremely well, and we are—we've lost here recently. But I think this will one. This is one that we would lean back into. I believe it's it's a resilient business that is part of part of what makes our country work is is having housing. And so what does this mean for how we pick stocks going forward? Let's talk about the plan. All right, we're pointing out that we've. We've done research, we've published reports, we've given you stocks that have been up even when the rest of the market is down, like Kroger on our focus list, NHCA, Allstate. How do you find more stocks like that? Well, we have a screening system, and this is going to go fast, folks, because I've got to end this in 3 minutes. We have a screening system that can tell you immediately the best stocks in the market, and we can do it by sector. So if we say, hey, give me all the very attractive stocks in a particular sector, we can make it whatever we want it to be. Let's go consumer non-cyclicals because that's the stuff people have to buy no matter what's going on. There it is. Now if we wanted to exclude suspended stocks, that might be helpful. There we go. There's not a lot of them, folks. Guess what? Good stock picks don't grow on trees. We can do the same analysis in any sector or even subsector. So let's go to industrials just for fun, and then we can break it down further into— let's go machinery and components. There they are. Those are the very attractive ones. So New Constructs allows you to find the best stocks in the market in a matter of seconds. It's an unbelievable capability. And keep in mind, if we want to do a deep, a deep dive on any one of these stocks, the dive you can do with New Constructs is the best there is in the business. No one can take you further into what's going on. Every element of the rating system we will break down into more detail. Here's economic earnings compared to accounting earnings, return on invested capital. See long-term trend up. NOPAT margins, long-term trend up. Capital turns, long-term trend up. Free cash flow, free cash flow yield. Long-term trend up, very strong free cash flow. If you want to know how we do our calculations, we'll show you. Here are the income statement adjustments we'd like to make, the balance sheet adjustments we'd like to make, valuation adjustments that we make. And then if you say, oh well, how do I know you're not making up those numbers? We'll take you straight to the filings. You want to see where the income statement adjustments come from? Here they are. Currency translation, loans and, loans and leases, financing. These are allowances for that, that effectively allow you to manage earnings. Operating lease receivables and others, severance expense, right? These are adjustments we're picking out of the footnotes here. We'll show you exactly where it comes from. The income statement as we parse it, the balance sheets as we parsed it. Balance sheet adjustments. There are the balance sheet adjustments, hidden short-term debt, deferred taxes, and other liabilities. We're going and doing the work that needs to be done to give you the truth. So the takeaway for how do you manage your portfolio in this kind of market is you do diligence. You do diligence. And no one does it better than we do, which is why you should trust our research more than other firms. Not to mention the fact that we've got significant outperformance. Even if we're looking at today, even the last few days, I showed you the, the Very Attractive Stocks Index outperformed so far this year by a huge amount, continues to outperform. The Core Earnings Weighted S&P continues to outperform. Better data makes a difference. We give you better stock picks. We give you better options. We give you truth. We give you honesty. Okay, everybody, thanks very much. We'll send out a replay probably later today or first thing tomorrow. Keep in mind, on April 15th, we have a special event. I'll put this into the chat to go through how to get access to our latest great picks. You think very attractive stocks are great? We've got a way to make them even better. We're constantly mining our system to figure out how to get people the best research in the business. The Very Attractive Stocks Index does really, really well. We figured out a way to make it even better in terms of a performance metric. And if you join us at April 15th at 1:00 PM Eastern, I will share that with you on that day. I put the link to register for that into the webinar. Thanks very much, and I will see you later. Bye.