The Compound
Brian Belski Says "The Bull Market Continues"
11/3/2025, 10:00:09 PM
Economic Summary
- China currently dominates rare earth production and refining, driving global supply-security initiatives and boosting investment interest in related ETFs like REMX.
- Market leadership is concentrated in a few mega-cap AI names (MAG7); strategists suggest neutralizing cap-weight exposure and actively overweighting other areas where stock-specific fundamentals matter more.
- Profit margins are at historically high levels; adjusted forward P/E looks less alarming once margins are considered, but the sustainability of margins is the main risk to current valuations.
- The speaker believes a long secular bull market (post-2009) still has years to run but expects intermittent recessions and bear markets; SMID, value, and dividend-growth strategies could act as partial portfolio defenses.
- Regional and mid-sized banks are under pressure from large and small competitors, implying further consolidation in the banking sector and differentiated outcomes across financials.
Bullish
- Companies adopting AI and with strong balance sheets can outperform.
- SMID and value names may broaden leadership away from mega-cap AI stocks.
- Dividend-growth and high-cash businesses provide defensive, long-term return potential.
- Supply-chain reshoring in critical minerals benefits rare-earth and strategic metals exposure.
Bearish
- Concentration risk in MAG7 could reverse, triggering big-relative underperformance.
- Regional and mid-size banks face consolidation pressure and competitive squeeze.
- Small-cap names can be volatile and vulnerable if sentiment or margins reverse.
- High profit margins are key — a sustained margin decline would jeopardize valuations.
Bullish tickers
ORCLCELHGBCIFCNCAREMXAAPLMSFTGOOGLBRK.BCHWYSHAK
Bearish tickers
METACMAFITBGM
REMX
Bullish
ETF play on growing investment into rare earths and strategic metals as countries diversify supply chains away from China.
Bearish
Exposure to commodity cycles, policy changes, and concentrated supply chains could create volatility.
AAPL
Bullish
Strong consumer franchise and essential products that proved resilient through COVID and beyond.
Bearish
Valuation sensitive to margin compression or broad tech rotation away from mega-caps.
NFLX
Bullish
Large content moat and secular streaming adoption support long-term growth narratives.
Bearish
Subscriber and content competition risks could pressure growth expectations.
ZM
Bullish
Platform still embedded in remote communications and digital workflows.
Bearish
Post-pandemic normalization poses user-growth and usage risks.
ORCL
Bullish
Strong balance sheet and successful AI/cloud execution have driven durable outperformance since 2014.
Bearish
Large legacy business faces competition as cloud dynamics evolve.
AVGO
Bullish
Has delivered MAG7-esque performance at times; exposed to secular semiconductor demand cycles.
Bearish
Cyclical semiconductor exposure and acquisition-driven risks could weigh on performance.
NVDA
Bullish
Leader in AI hardware and a primary beneficiary of the ongoing AI investment cycle.
Bearish
Extreme sentiment and earnings-driven rotation can cause sharp underperformance in some quarters.
META
Bullish
Scale and platform positions make it a core AI and social advertising competitor over time.
Bearish
Demonstrated quarter-to-quarter volatility; earnings responses don’t always align with stock moves.
GOOGL
Bullish
Dominant search franchise and AI positioning make it a long-term structural winner.
Bearish
Ad revenue sensitivity and regulatory risk could pressure near-term results.
MSFT
Bullish
Deep cloud, software, and AI integrations position it to capture secular IT spending.
Bearish
High multiple could suffer if enterprise spend or margins roll over.
AMZN
Bullish
E-commerce scale and AWS leadership provide durable long-term cash-flow potential.
Bearish
Thin margins in some businesses and heavy reinvestment can magnify sentiment shifts.
CELH
Bullish
Long-term holding in SMID portfolio; strong growth in energy-drink category and brand momentum.
Bearish
Small-cap beverage execution risk and consumer cyclicality can create sharp volatility.
SHAK
Bullish
Attractive growth story in casual dining and brand recognition within SMID strategies.
Bearish
Consumer discretionary exposure vulnerable in downturns and volatile foot-traffic trends.
CHWY
Bullish
Strong niche e-commerce brand with recurring customer behavior and mid-cap growth potential.
Bearish
Competition and margin pressure in e-commerce pet supply could hamper profitability.
BRK.B
Bullish
Diversified holding company that offered relative stability when tech leadership rotated earlier in the year.
Bearish
Conglomerate exposures mean some holdings could underperform in cyclical downturns.
GBCI
Bullish
Small regional bank highlighted for strong relationship banking and attractive earnings growth.
Bearish
Regional banking risks if rate dynamics or credit conditions worsen.
FCNCA
Bullish
Roll-up and relationship-driven strategy seen as favorable among smaller bank franchises.
Bearish
Mid-sized bank consolidation risk and competition could limit long-term optionality.
CMA
Bullish
N/A
Bearish
Mid-sized regional banks face acquisition and competitive pressures from big and small banks.
FITB
Bullish
N/A
Bearish
N/A
F
Bullish
Strong-selling models (like top-selling trucks) and meaningful dividend orientation versus peers.
Bearish
Auto-cycle sensitivity and execution on EV transition could create near-term headwinds.
GM
Bullish
Exposure to higher-end SUVs and EV initiatives could support medium-term growth.
Bearish
Heavy reliance on buybacks for shareholder returns could be less sustainable than dividends.
People mentioned
Brian BelskyLouis RukeyserLaszlo BariniMary FarrellAdam ParkerLarry EllisonBenPeter LynchBill O'NeillJanet Jackson