Let's bring in a long time friend of ours, Luke Lloyd, president and CEO of Lloyd Financial Group.
He joins us via Zoom.
Luke, it's nice to have you.
Your take on these markets, the resiliency of these financial markets front and center here for another day of big gains.
Luke, what are you seeing?
Uh, thanks for having me as always, JD.
So, look, I, I'm actually a little irritated right now because there's a lot of people on the street that were saying sell, sell, sell when the market was down 10%.
They were saying sell, sell, sell when we covered up to 5, down 5%, and now they're saying buy when we're back to even.
If you've been watching what we've been saying the past few months, You don't get things right all the time.
We've been saying buy this dip.
This was probably one of the easiest dips to buy in a lot of ways because there are so many things trading at a discount, specifically in the software space and specifically in the tech space.
And I'll give Microsoft just as an example.
Back in 2021, Microsoft was trading at a 33 forward price to earnings.
Ratio.
Uh, just a few weeks ago or a week ago, Microsoft was trading at a 19 forward price to earnings ratio, and that's with bigger revenue, that's with just about the same amount of growth in the earnings.
And these stocks are basically cut in half from a valuation standpoint.
So you're seeing this big pickup rally in tech.
I think this is gonna continue through because the IGV stock.
Software index is the most short it was since 2017.
So you have a lot of institutional money offsides right now, specifically in software.
I think what we're seeing is a big short cover rally going on.
I think we're still, uh, just, you know, we still got a lot more to go from here.
I think maybe a 5 or 10% more on the IGV before we kind of cool down.
I think this is a great spot to deploy some capital.
We've been deploying capital the past few months.
We're the most aggressive we've ever been in our portfolios so far at Lloyd Financial Group.
So IGV up about 1% on the day.
I don't know if everyone at home can see my chart.
That's more or less the year Derek.
It's more like the 6 month chart or so, but obviously a downward pressure, Luke, in this environment.
Do you still like these beaten down software names?
Do you still like these tech names given how slashed a lot of these valuations have been over the last 6 weeks or so?
I love it.
I mean, just about a month ago, so the reason why a lot of this stuff sold off in March was in the past few weeks until about the end of last week was because we went from 2 interest rate cuts back in March to possibly an interest rate hike with oil prices going.
Uh, up so much.
So that kind of was a risk-off environment.
Higher beta, long duration stocks got hit.
And then you also for about a two-week period had almost short reports coming out.
It felt like it was almost facilitated saying that, uh, you know, AI is gonna replace real estate, uh, you know, firms, uh, uh, brokerage firms, uh, AI is gonna replace logistics firms, AI is gonna replace software firms.
All AI is gonna do is increase productivity and.
Frankly, make all of these software businesses and every business out there more money.
So that increases profit margins and that means stocks go up.
So there almost was this like negative attitude for no reason for so long that I think a lot of these names are still unvalued.
So we picked up Coreweave in the 70s and 80s.
That's up to $115 a share.
We picked up Intuit.
I think Intuit is still a good, good price here.
We picked it up about $380 so it's a little down from our cost basis.
We Picked up even blew out in the private credit space that's been beaten up because everyone's saying it's a 2008, 2009 scenario in private credit.
Well, just because you lock up funds doesn't mean it's an 08 09 scenario.
These vehicles are meant for long duration 10-year holds, and when investors kind of get that dopamine rush that they get in today's world, that they want their money back quickly, that's not what it's meant to do.
So the fact that it's locked up is not necessarily a bad thing.
So even the private credit space, I think, is very interesting right now.
Yeah, Luke, I, I got to leave it there, but I hope you come back.
I, I could do an entire sit-down interview with my man just about the state of the KKRs and the Blue Owls and the private credit of the world.
We're up against a hard deadline.
Please come back.
Luke Lloyd, longtime pal of ours, president and CEO of Lloyd Financial Group.
My man, thank you as always.
