Geoff Beers, host of the 40 Finance YouTube channel, joins Yahoo Finance to discuss the rise of meme stocks like GameStop and AMC over the past year, retail investing trends, energy stocks, earnings season, and the outlook for the stock market.
– From the boom in retail trading to the unprecedented levels of stimulus out of Washington, last year’s trading environment is a tough one to follow in 2022. Our next guest helps us make sense of it all. Geoff Beers is creator of the “40 Finance” blog and YouTube channel. He joins us now. Jeff, it’s been just over a year now since activist investor Ryan Cohen picked up a seat on GameStop’s board of directors in one of the key events leading up to that surge we saw in GameStop shares last year. This year, are we going to see that same kind of surge taking place in GameStop, AMC, or a new cohort of stocks? Or was last year really the peak for this retail investor-driven trade?
GEOFF BEERS: Hey there. You know, I would say that the conditions were perfect for it last year. But on the same token, this might have been the greatest win in retail investing history, just the results that we saw from GameStop and AMC. I don’t hold positions in either, nor did I participate in the run up.
But I think that when you start to put together the information that’s available on the internet and the fact that there’s some very, very smart people who are retail investors and they’re sharing ideas between each other, I think that you’d have to say we’ll see it again at some point. But this year, I don’t know. I think you’re coming off of perfect conditions, as you mentioned, with the stimulus, with the sort of time at home in the lockdown period.
But then there’s another catch to it all, too, is we had the pandemic bottom, which was a great starting point for this type of activity. And I’m not sure that we’re going to see a huge bottom anytime over the next year.
ADAM SHAPIRO: Jeff, for those of us who like to make a buck, and some of us like to do it in a more traditional way, I want to ask you a question about oil. A few years back, one of the worst decisions I ever made– Royal Dutch Shell. Great dividend over history, right? The world’s going to need more oil, right? Boy, was that the wrong call. That stock– boom. So if you’re looking at oil today– and I won’t be buying individual stock, by the way. But what should an investor consider?
Because the things that we’ve been taught to believe– it had– they paid a dividend for years and years and years. And they were one of the giants, and now, you know, they’ve been slayed.
GEOFF BEERS: Yeah. And I think if you sit at the dinner table or you go out with Graham Paul, he’s going to tell you how great the oil stocks are and what they did for his investment over time. But I think that world’s changed quite a bit. And the obvious point inflection that we have now looking ahead, it is little single-point declines in revenues.
You know, it’ll take forever for fossil fuels to not be profitable for these companies. Let’s not get too far ahead of ourselves on the EV revolution. But the fact of the matter remains that very, very slowly, those markets are declining. And in today’s environment– you know, I recently did a deep dive across the sector.
And I think that oil stocks today, for as much as they’re on TV as like the energy play for 2022, I would say oil stocks today, in my opinion, are fairly valued, if not, you know, 3% over fair value. And the only upside, the only reason really get in them now for the short term, is do you think oil prices go to $90 or $100 a barrel? And that’s where your thesis has to be.
– What’s your outlook for tech specifically– shifting gears a little bit– on a sector basis? Because where the big tech stocks go, the S&P 500 and NASDAQ really go, as well, because of their weights in the index. We’re seeing the NASDAQ composite really getting crushed again during today’s session. Are you seeing opportunities in tech outside of the mega cap names?
GEOFF BEERS: I think we’re getting very, very close. I was actually doing some scouting myself, and there are points– I don’t think I would go on the record and say tech is on sale yet. But I think if you look across some of the names that actually bring in earnings, whether it’s in the Nvidias of the world, even DocuSign I was looking at for a minute today, their P/Es are starting to come down to points where, again, they’re not on sale, but they’re certainly 10 times better than what we saw last year.
Now I’m a huge proponent of the QQQ, and that’s a lot of what I’m playing here in the first quarter of 2022. I think that we’ve got a lot of inflection points, most notably earnings coming up here in the next month or so. And when those earnings come out, I’m not as concerned about who hit their Q4 numbers or not. I think that Googles, Microsofts, et cetera, are going to hit their numbers for Q4.
But the CEOs are going to have to sit on the stage and tell us what do they see in 2022. And there’s a chance that what the CEOs see is going to be a lot different than what analysts have projected for earnings in 2022. So I would be very patient. And I would consider, in my opinion, looking at something like the QQQ and avoid nit-picking through individual stocks, because some of these fortunes for companies– the expectation of 2022 earnings is going to end up being a lot different than I think a lot of analysts have projected.
– All right, we will leave it there for now. Geoff Beers, creator of the “40 Finance” blog and YouTube channel, thank you so much for your time.