Stocks & Markets Podcast: The Market Setup and Pro Picks for 2026

Hello fans of TheStreet Pro’s Stocks & Markets Podcast!

This week, we have something special for you. I took the reins and put Chris Versace in the hot seat. In fact, I asked four other contributors to join us for a review of 2025 and a preview of 2026. It’s a great conversation with Chris, Helene Meisler, Stephen “Sarge” Guilfoyle, Louis Llanes, and James “Rev Shark” DePorre.

Plus, a special announcement about TheStreet Pro, which was recently bought by TipRanks! I’ll share more on that soon.

Wishing you all the best in 2026!

Jason Meshnick

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Transcript

JASON MESHNICK

Welcome, everyone, to TheStreet Pro Stocks and Markets podcast. I'm Jason Meshnick, and I'll be your host today for a podcast takeover. This is our second podcast takeover of the year, and I'm looking forward to doing more of these.

This time we're going to wrap up 2025 and give you a preview of 2026. And I'm putting Christopher Versace in the hot seat along with four of my favorite contributors. We've got with us today: Helene Meisler, Stephen Guilfoyle, James "Rev Shark" DePorre, and Louis Llanes.

For our agenda, what we're going to do is we're going to kick it off with Helene, who's going to give us a market update. She's going to tell us where the market is at and what she'll be looking for as we enter 2026.

Then we're going to move on to a round robin of sorts with the following questions:

1. What surprised you the most in 2025?

2. If given the chance, what would you have done differently during the year?

3. Third is what industry or sector do you think will surprise to the upside in 2026?

4. And our last question is going to be the big one. Name one stock to buy going into 2026 and one that you would sell to fund that trade.

We'll go around the horn with each question and collect our answers before moving on to the next question.

However, first, I have a very special announcement. The Street Pro was recently acquired by TipRanks. We're going to maintain a close relationship with our friends over at TheStreet. However, we're really excited for improvements and new benefits coming to our subscribers.

So, if you're not a subscriber, please hit that subscribe button and join us because I think 2026 is going to be the best year yet for TheStreet Pro.

Let’s kick it over to Helene to give us her market update.

HELENE MEISLER

Okay. Thanks, Jason. All right, what I've been writing about recently is that the market had a shift, I believe, last summer. And it started with the magnificent diverging you started to get. And I never know which ones are exactly the right seven, but let's just call them Mega-cap stocks. They no longer moved in a block. They stopped moving as a group, and that was, to me, the biggest change in the market.

And a lot of stocks peaked in July and August, not just the mags, all stocks. And they started heading down, and a lot of them finished that correction somewhere around late November. But what we had in the process was the S&P being held up by the fact that the major indexes were being supported by the fact that the market was being driven by the fact that the Mag Sevens just kept rotating.

And so, they didn't, you know, they need to all come down together in order for us to get the index down. Anyway, I think that in September, we had a major speculative blow off in a lot of names. Okay? I mean, we're talking about them, and I'm sure I'm going to forget a few of them because there were so many of them.

There were the penny stocks, quantum stocks, the battery stocks, the. Wait, I wrote it down. Hold on. The rocket stocks. Did I say quantum? I can't remember, even Bitcoin had its day in the sun again. And, and what we had there was Nasdaq volume surging to over 10 billion shares a day, which is just typically you get that.

Well, you don't even get 10 billion. But typically, you'll get a massive surge in volume when the Nasdaq comes down or when the markets come down because you get panic selling. What we had was panic buying. You had a lot of these stocks up 40, 50, 60%. It was just ridiculous in my opinion. And, that all peaked in in call in early October.

And what we saw over the ensuing 4 to 6 weeks was the air coming out of a lot of that speculative bubble. And we got this low around Thanksgiving. We've had an oversold rally. Everybody's gotten all excited about the  (RSP) , the equal weight, and how it's going to be so wonderful going forward. I'm not so sure. But what I can tell you right now is, well, let me let me just back up…

I talked about Nasdaq volume. When I calculate various indicators using Nasdaq volume, I see a big peak last summer that never recaptured itself in the fall. And so, and it and, and this latest rally hasn't shown an upturn. And so, I think that's sort of the key to what's going on in the underlying technology area, which has been the hottest area of the year.

Anyway, what I see going forward now is that I think we still continue to have the the mega-cap stocks diverging. You know, some will start to bottom. Very few of them have broken. They may never break, although I think some of them will. But for example, you had Meta  (META)  it really I mean that peaked in July, came down and died.

And now notice in the last week Meta is starting to hold off the last two weeks. Meta is starting to hold. Whereas you are starting to see Google start to roll over. So, it's still this this divergence that you have there. I think that continues. I think that if we get a break in Nasdaq in the first quarter of 2026, and I, I keep saying Nasdaq, but that's really where the weakest area is because we never made a high or high, my guess is you'll you'll see these stocks break, you'll see them come down, and then we'll see a process through the remainder of the year where they start to bottom again.

And probably in the later end of the year, the back half of the year, we'll start to see the strong stocks look better right here. So that's kind of what we've got. I don't expect famous last words. I don't expect to get anything “whooshy,” anything as fast and furious as we saw last April. What I think we're going to get this time is going to be much more gradual.

You know, like, what we've seen lately is just every day, it's just a little bit more. So, now, in the short term, let me tell you, I think we're going to get oversold as we get closer to Christmas, and we are going to get some kind of a rally into the new year. It's after that, I think that we go back to this problem.

That's it. Oh. Oh, wait, I should talk about I should talk about why I'm not so excited about all the others. I think the 493 are great. They become great trading stocks. We have a few bases there. We don't have a pile of stocks that look like bases. We have a pile of stocks that look like oversold rallies.

Maybe it'll be terrific and I'm dead wrong, but that's what I see.

JASON MESHNICK

Helene, one one quick question. Can you talk a little bit about what defines a base, like what what do you look for in a, in a buy candidate that's been basing.

HELENE MEISLER

I like it when a stock has been up and down, up and down, up and down forever. Let me, I'm just going to pick some numbers okay. A stock that trades between 50 and 80 over and over and over again. And every once in a while falls to 40. Sometimes it goes up to 90, and then a third months and months and months of that.

And eventually, instead of falling down to what I say, 50, instead of falling down to 50, it stops at 60, and the accumulation is starting a little bit higher, a little bit higher. That's when I start to look for a stock that's going to break out. So so I either I, I generally like a stock that's been dead for a long time.

Nobody cares about Google  (GOOGL) . Last year everybody hated Google and hadn't done anything for years. And then all of a sudden, look, Google came alive last summer. I like that. So I would like us to find stocks that nobody cares about anymore, i.e. the drugs, which is why I'm a big fan of the drugs. But now, of course, everybody's on the drug bandwagon, so I'm a little hesitant, but I'm still long, so…

JASON MESHNICK

So that's what the headline is: Helene likes drugs.

STEPHEN GUILFOYLE

I didn't do enough drugs this year.

HELENE MEISLER

I, when it comes to the staples, the charts are not nearly as good as the drugs because they haven't done this. I mean, just take a look at a chart of Bristol-Myers  (BMY)  and you'll know exactly what I'm talking about. I mean, the stock going down is. And now it's broken out. But I don't have that in the staples.

What I have in the staples  (XLP)  is looks to me just like a nice oversold rally. Then you're going to run into resistance, and then perhaps the staples can start to do this for maybe the first half of 2026.

JASON MESHNICK

I have one other quick question. So, I mean, it sounds like a lot of your, I'm not going to call it a forecast, but a lot of what you're saying around your thoughts for 2026 look like the second year of a Presidential Cycle. Is that accurate? Am I remembering that?

HELENE MEISLER

Oh, I don't know. That's seasonality and I'm not sure. So I don't do seasonality, but I think the second year of a presidential cycle was ,Sarge probably knows that the second year of a Presidential Cycle is generally not good in the first half and good in the second half if I’m right.

STEPHEN GUILFOYLE

I, I think it if it looks like we'll have a split legislature, it's usually considered a positive.

HELENE MEISLER

Okay. I didn't know that. See, I have no idea. I'm just looking at charts and I and I so I can tell you that, you know, a lot of the stocks that I, as I call them, control the index have made lower highs, not higher highs. And, usually, lower highs need to be worked out right.

STEPHEN GUILFOYLE

Can I ask you a question.

LOUIS LLANES

STEPHEN GUILFOYLE

Absolutely. And being you know I do a lot of technical analysis but you're the, you're really the pro do you consider, given that the way algorithms have replaced humans over the years, or do you still consider volume-based confirmations of technical movements as, as, accurate as they once were?

HELENE MEISLER

Okay. So, I have I have always been a fan that high volume on a down move is bullish. And I know that's not conventional wisdom. Maybe it's now, but for the longest time, I was like, I don't care. We could rally and rally and rally on low volume. Who cares? Doesn't matter to me. And I know conventional wisdom is you want a rally on high volume to me.

I like to look at volume when it gets extraordinary. That means either extraordinary amount or extraordinary on an up-move. It means we're getting some level of panic. And, like I said, back in September, October, I don't want panic to get in. And in April, it was panic to get out. And so, in that respect, I still think volume matters on a day-to-day basis doesn't matter.

Not to me. Overall though, when I do do it using my indicators for Nasdaq, I don't like breadth, the ad line because I just think it's it's so skewed because, as I'm fond of saying, it's where failed IPOs go to die. And so every stock that doesn't even matter gets counted. And so you get these really skewed, growth data on on Nasdaq.

Like you know what stock is up a penny. Who cares? But that's why I started using volume for a lot of my indicators on Nasdaq. And, for, let me let me give you a little thing in the last ten trading days, volume on Nasdaq, volume up minus down has been positive for seven of those days.

And yet my smoothed down indicators can't rally. So yeah, I think that matters. Does that answer your question?

STEPHEN GUILFOYLE

Yeah. No, it's actually you know, 7 to 10 days was partly what provoked my question, though, because I didn't notice that as well.

HELENE MEISLER

Right. And and still Nasdaq couldn't really go anywhere. Right.

STEPHEN GUILFOYLE

Right. Yeah. No Nasdaq. So Nasdaq's barely hanging on to its 50-day right now. I mean, it's got like one foot on the 50-day. It's hanging by a thread now, right?

HELENE MEISLER

And it's been it's been really the weakest index though.

STEPHEN GUILFOYLE

It has, no doubt.

JASON MESHNICK

All right. Well.

HELENE MEISLER

Let me just I'm I'm sorry I keep doing this one more for it. What other thing? If Nasdaq closes red today, it will be a major change to me in pattern, because Nasdaq has not had more red closing day since April. (EDITOR’s NOTE: The Nasdaq closed in the green on the day we taped this)

STEPHEN GUILFOYLE

And the 50-day would have been resistance.

HELENE MEISLER

Buyers have come in on the fourth day every single time. April. Just a little change anyway.

Part 2: What Surprised You the Most in 2025?

JASON MESHNICK

All right. That is worth watching. I'll. I'm going to take a note on that. Thank you. Helene. All right, let's let's move on to the to the round robin. I don't know if that's the right term, but that's what I'm going to call it for right now. We're going to go around the horn, I guess, with our with our questions.

Helene, you are off the hook for these, unless you have an answer that you would like to throw in there. But otherwise, we'll go with, by order of how I'm seeing everybody on the screen, Chris and then Sarge and then Lewis and then Rev. So, Chris Versace, what surprised you the most in 2025?

CHRIS VERSACE

You know, we could talk certain stocks and stuff like that. But I think probably the biggest surprise to me has been the level of GDP that we've seen really throughout the year, despite the impact of tariffs, despite the bifurcated consumer. You know, where we're sitting here looking at, you know, even as we get additional, you know, data, as a result of the government shutdown, you know, yeah, the November employment report wasn't great.

We lost more jobs in October, but you still look at the overall, you know, vector velocity of what these data points are telling us for GDP. Very surprised because it sure doesn't feel like a 3% economy. That's probably the biggest surprise to me.

JASON MESHNICK

Okay, Sarge.

STEPHEN GUILFOYLE

All right. Other than the New York Mets missing the playoffs after having the best record in baseball in June, what surprised me in 2025 was the length of the government shutdown, how long the Fed dragged on with their quantitative tightening program, because that was a mistake. How long it took Jerome Powell and his cronies at the FOMC to realize what they were looking at, because that now we know after today's data that was a mistake.

And also that all 11 S&P 500 sectors are still trading in the green, even though we've had this little selloff here. And, in December for the year, the trading in the green for the year.

JASON MESHNICK

Yeah. Amazing. Okay. Louis.

LOUIS LLANES

Well, I believe a lot of what I'm going to say is a lot what Chris said. I was really surprised that given the stretched valuations, the tariff uncertainty, interest rate uncertainty, geopolitical events, it's, amazing and how resilient the market has been. And the, the, the mega caps, you know, really outperforming, you know, technically rhymes with other, you know, cycles that I remember in my, my career and, and, you know, just the trend is your friend until it bends is at the end, they say.

And, I think that's kind of what we're in. It's everybody's kind of looking at each other. And we all know that certain stocks that have very good, fundamentals are, are stretched, but we keep buying them. And I think that's the mode generally where we are in the stock market. And as I was listening to Helene, I, I also I, I'm still surprised.

But luckily discipline keeps you in the market, but yeah, you could I think it's it could be a big mistake to sell out a lot of times in these kind of markets too soon. So.

JASON MESHNICK

Yeah, I think that's the most important thing is, is discipline, right. Have have a process and work your process. And if your process isn't working, figure out a different process. But let's start there. Okay. Thank you. Rev.

JAMES REV SHARK DEPORRE

I would say the most surprising thing in the past year has been the great concentration and the mega Caps, and how that has caused the indices to distort what was really going on with the majority, the market. There was a lot of poor action that was hidden behind the indexes. And there were there were areas where there was great, themes and things like quantum computers and rockets and so on that Helene mentioned.

JAMES REV SHARK DEPORRE

But the that was fairly narrow, and the whole market was basically focused on those mega caps the whole time, and stock picking was not as effective as it should have been. In a lot of cases, you can get in a lot of trouble, you know, good stock simply because it isn't a mega cap that was driving the indices.

And a lot of times the indices would send the message that, oh, yeah, this is a great market. We're not on a lot of stocks. We're not participating. So I, I that always happens to some degree. But I think in the past year it was to a much greater extent than we normally have seen in the past.

JASON MESHNICK

Yeah, I think that's true. I remember a year ago when we had, Doug Kass on the prior version of this or not, the podcast, but the, live quarterly call. And and I asked him, so, Doug, what's what's your call for the, for the year for 2025? Given that he was so bearish right during that time and he said, well, it doesn't matter what I think, the mega caps are doing well, you just have to continue with those.

But he was he was effectively calling for just stay the course right? Trend is your friend, like Louis said. And so so that was turned out to be the right call as well. At least for the first part of the year.

Part 3: What Would You Have Done Differently in 2025?

Okay, let's move on to question number two. Given the chance, what would you have done differently in 2025?

And let's, start right back with Mr. Versace.

CHRIS VERSACE

I think if I could go back in a little time machine and whisper in my ear, maybe middle of the year, maybe even the start of the year, I would have introduced the EPS, EPS Diplomat's model strategy into the portfolio much, much sooner than than we did. We we only, pulled the, pulled the trigger, as we like to say, on bringing that into the portfolio in the middle of November.

It's performed extremely well. And for folks who aren't familiar with this, this is a forward, backward look at the, you know, top eight companies poised to deliver EPS growth in a consistent fashion in a double digit fashion. And it gets the basket, gets reconstituted, once a quarter. And like I said, we brought these eight stocks in, in mid-November.

And they've outperformed the S&P 500, in a very strong fashion. Looking at the data going back, we would have had even better performance if we started the model earlier in the year. So that that's the one thing that if I could go back in time, I would change.

JASON MESHNICK

And, I will make sure that that is noted, that we have a link back to the article where you first talked about those and added those into the Street Pro portfolio. Yeah. 

Okay, Sarge, what would you like to go back and change?

STEPHEN GUILFOYLE

Well, I had no exposure to utilities this year. And the  (XLU)  ended up being the fourth best performing sector for the year. I think they're up 15 or 16%, something like that. And so I had no exposure to exposure to a dividend paying space that actually did well in the market as well. And so I kind of ticks me off a little bit.

And, and as Helene is heavily exposed to pharma right now, I was very lightly exposed to pharma this year. I mean, I was in Lilly  (LLY)  for a good portion of the run, and I traded it well when it was going back and forth. But outside of Lilly, I wasn't really in pharma. And I think the Dow Jones U.S. Pharmaceutical Index is up like 22 or 23% for the year.

So, too, you know how you always you always go to the machines in the gym that you're good at and stuff like that? Well, I didn't really trade a section. The sectors I wasn't good at, and I really should have been involved in those two sectors. This year.

JASON MESHNICK

So you skipped leg day? Oh.

STEPHEN GUILFOYLE

Yeah, I skipped like that.

HELENE MEISLER

Sarge. Sarge, I just saw a great statistic this morning that in the last four months, if you look at all the sectors of the market, the health care sector is by far outperforming everything.

STEPHEN GUILFOYLE

Yeah, well, I can go to three months right now without doing any extra work. And it's the top dog for three months easily. Right.

HELENE MEISLER

So if you go to four it's. Yeah, it's still up there. On other words, if you go to four you're taking out you're even including before they started running.

STEPHEN GUILFOYLE

Yeah. Now you. Congratulations.

JASON MESHNICK

All right. Louis

LOUIS LLANES

I love to. First of all, I love to hear these tactical, discussions that you guys. I don't know, but I'm a pretty hardcore technician myself. I try to keep it under wraps, but I really am.

JASON MESHNICK

That's how Louis and I met and became friends. Is that Louis and I ran the, the Denver chapter of the CMT Association. For for many years. I think I'm the only one who's left, running it, but, some at some point, we'll have a meeting. Anyway, I.

LOUIS LLANES

Wash my hands and. No, it's great. I need to get involved here, but, I wanted to make a quick comment about volume. I've actually done quite a bit of studies on volume in terms of in recent years. And, the volume, you're exactly right. I mean, it's it's it's the quantity of volume, I mean, quantity, you can go back and actually back... It is how much volume that's happening. And what's the price doing at that time? And actually buying, on heavy volume actually is a negative expectancy in the next near-term, you know, one month, two months, three months, you know, like quantitatively. So, and it has a decade to it. But but actually, quiet, is is the best time to buy quiet and not a lot of volatile volatility, which fits right into what you talked about.

HELENE MEISLER

It's my back test.

LOUIS LLANES

And your back test is better than any quant I look, you know, where's my ruler? I'm going back to the ruler. So, let's see, what was the question again? What was the what would I oh, I know what what what?

JASON MESHNICK

Yeah, yeah. What would you have done differently?

LOUIS LLANES

The first thing I thought of when, I saw this question was that song breaking up is hard to do. You remember that one? They say the breaking up started to do. Now, I think you. Yeah. That was, Neil Sedaka.

JASON MESHNICK

Neil Sedaka.

LOUIS LLANES

So, and the reason why is because, you know, I let taxes wag the, you know, wag the tail a little too much, you know what I'm saying? And I need to get back to my trim versus sell discipline, which is very nuanced, but you know, that, you know, protecting a profit is oftentimes more important than it is for you to be worried about your tax concerns, even though with their big dollar amounts that you got to pay in taxes.

And it's a hard pill to swallow. But I've had multiple instances in the past 12 months where that has proved a net negative on my decision making. So I would go back and, you know, work on my trim versus self, you know, trim when you have something with the businesses intact, but it's just stretched. And so when, when the business is not intact and, and, and use your technical.

So that would be my biggest I would say for the right.

CHRIS VERSACE

Hey Jason, can I, can I squeeze a question in just, just kind of for the group here, just based on what Louis said? I know, I know, Sarge has, you know, certain, fixed rules stocks pull back a certain amount. He will either, trim or exit the position. Does does anybody else have any other rules for, when you would trim, in a positive sense relative to, say, a position size?

STEPHEN GUILFOYLE

Well, I mean, if you want to go back to me, I don't it's not just my 8% rule when stocks are doing poorly, but, but I also take something off every time one of my target prices is reached. So that way I can't say, oh, I should have sold it when it hit my target. What a moron.

Because I learned early in my career that sometimes I can be a moron. So when I do hit targets, I do take something off and if it comes back into it to what I see is a technical level where I should be buying it, then I'll put the portion back on that I took off.

CHRIS VERSACE

Right. But but if it runs in like like for the portfolio, we say if it hits 4.5% position size because we've got 25, you know, if we include that EPS dividend model, about 30 to 33 stocks. So we've got to be a little careful in terms of our sizing. So for us, if it comes over the 4.5% members know that, especially if it's, overbought, we will likely be trimming some profits out, you know, rebuilding our cash or just redeploying it elsewhere.

Do you have anything like that, Sarge? Rev? Well, and Lewis or anybody else?

STEPHEN GUILFOYLE

I used to do that, but I used to keep all my positions under 5%.

JAMES REV SHARK DEPORRE

That what I do with my positions is I trade them all in multiple time frames. So rather than just having a set rule, I think about it as each stock in a long-term frame or short-term frame and so on. And that way my position size is always going up or down, depending on the longer-term or short-term technical conditions and develop. And that way I don't just have a set rule that I handle the whole portfolio in that manner, it's just a subset of each position gets treated a little bit differently. So my rules get very complex, you know, because I'm using multiple time frames plus some parameters to also court or to expand positions as as conditions change. So it's a, a little bit of subjectivity involved in it, but I try to keep it on subjective to some extent.

LOUIS LLANES

Yeah. If I could just add, you had mentioned that you kept your position size to a certain constraint. One of the things I found this useful is to not based just on the position size, but based on the contribution to risk to the portfolio. So I could have a position size of 5%. And if the stock is, you know, average volatility is a lot higher than you want to pare back.

So, I have a similar rule. But if the concentration if the the contribution to risk, it's out of whack that that's a hard and fast discipline that I use. And if regardless of taxes, the mistake I made with taxes was more discretionary oriented. But but on the on the, you know, if something gets way out of whack like I reduce my gold position, even though I'm bullish on gold and people were telling me that I was crazy.

But and it was just pure risk management had nothing to do with like, I don't like gold anymore. But I find that that's more effective than than just using a position size. But that's just. And I do it.

HELENE MEISLER

I find I was just going to say, I find that if you take something off, like Sarge, when it hits your target, you have no regrets. If it goes down and it doesn't and it doesn't stop where you think it's going to.

JAMES REV SHARK DEPORRE

No.

STEPHEN GUILFOYLE

And I wanted to add to what Chris said about position size. And I sort of agreed, you know, for most of my career, I do break that rule at times, like, like last year, 2024, when I realized with Palantir  (PLTR)  that I had a tiger by the tail, I let that thing become a massive portion of my portfolio because...

...because I realized that was the key to my year. So, I mean, I will try to use my head and when it's appropriate, when I think it's appropriate, and break my rule.

JASON MESHNICK

Have rules, but break them when appropriate.

STEPHEN GUILFOYLE

Well, and you'll be wrong sometimes. So, it's not it's not a rule. Right. But it's a guideline. And and once in a while you have something special like that. I mean, I missed my best trade in about 30 years, so I, I had to let it go.

HELENE MEISLER

It's why we draw thick lines.

JAMES REV SHARK DEPORRE

Exactly.

STEPHEN GUILFOYLE

And we have erasers.

JASON MESHNICK

And this sort of time. Rev, let's let's move on to you, with the same question. Given the chance, what would you have done differently in 2025?

JAMES REV SHARK DEPORRE

Well, the first thing that I would do is only pick stocks that go up. That is the main reason I would make so okay, other than that. But, really the main thing I'm always tinkering with my with my style, and the way that I approach the market, I think in the past year, the one thing that I learned that I need to do more effectively is to have concentrated positions in the best stocks and make those positions big.

You know, just like just like Sarge just mentioned, you know, he knew he had a winner there and he stayed big and stayed with it. And, and and it's the mistake I think too often I, you know, you want to take that profit. You know, put the, put the, ring register. Make sure you got it on the books.

And, I need I should have been much more aggressive with the winners than I had. And then more concentrated. And I think I get over-diversified sometimes because I'm looking at many little small stocks and waiting for them to produce and so on. And, and that's kind of one of the things that I'm going to change or work on in 2026 is staying very focused on the winning sectors and themes and so on.

JASON MESHNICK

It sounds great. And, Sarge, I know it sounds like your dog may have, some regrets in 2025.

STEPHEN GUILFOYLE

Share. Oh, we had a guy fixing the air conditioner, so.

JAMES REV SHARK DEPORRE

Okay.

Part 4: What Industry or Sector Do You Think Will Surprise to The Upside in 2026?

JASON MESHNICK

All right, so let's move on to our third question. This one's forward-looking. So we're moving from being backward-looking to being forward-looking. What industry or sector do you think will surprise to the upside in 2026? And, we won't start with Sarge's dog, but let's start with Chris Versace instead.

CHRIS VERSACE

Hopefully, a somewhat smarter answer. Well I have, so I, you know, as we sit here towards the end of December, I think there's a lot of questions over what's, happening on the AI front, whether, you know, how is how some of these, you know, massive deals are going to get funded, are the CapEx level is going to be, you know, needed that we've been we've seen just getting stepped higher and higher.

And these are all the things that have led many of us to be, you know, bullish on, you know, whether it's Nvidia  (NVDA) , Marvell  (MRVL)  or even Sarge and Palantir. And the way I've talked about it, and I've written about this is, you know, we are going to continue to follow adoption and usage. And I think there are things that are happening with enterprise adoption.

And soon in 2026 on consumer adoption of AI that I think is really going to drive, greater demand for digital infrastructure, that is data centers, that is chips, that is servers. So I think that as we, you know, revisit this conversation in 12 months, I think these names even Broadcom it has been falling off of late. I think the vast majority of these will be higher 12 months from now. And some of what I'm talking about really ties back. Not not just, you know, some of the big announcements we've heard, but even some of the, you know, maybe not as high profile ones, like for example, one of the ones I'm thinking about and I've written about this is the OpenAI and Disney  (DIS)  tie up to use the Disney characters in short form, AI generated video with, open AI platform Sora.

And the reason I really step back and thought hard about this is because it has the potential to drive AI, usage from, you know, a simple text query on ChatGPT or anthropic, what have you to, you know, much richer, more robust, much, much data, data being used, you know, video. And if we think about how we have seen, data, content creation, consumption and data traffic evolve really over the last 20 to 25 years.

First from, you know, simple texting to apps to streaming video to streaming video calls that push into the richer applications, especially video, it drives tremendous data consumption. So I would argue that, you know, here today we're concerned about it. But if we see this video adoption happen in AI, if we see it happen on the consumer side as well, once, Gemini, which is Google's tool, powers this new AI enabled Siri on iPhone.

And then we get the competitive response. I think what we're seeing today, people will look back and go, wow, that was a time to pick up some of these names.

JASON MESHNICK

Great. Thank you. Sarge.

STEPHEN GUILFOYLE

All right. From a business sense, I think the real place to be is going to be nuclear power. Like. Like I said, more like like acwell. But they don't have any sales yet. These companies. So. So they're overvalued. The stocks are overvalued. From a stock market point of view, I'm thinking as AI becomes more democratized, as the AI trade broadens away from infrastructure and towards the industries that may benefit, I think I like the financials.

I think what banks, large and small, I think net interest margin is going to expand and the investment banking opportunities are going to be there. There's going to be increased productivity, increased efficiency. And I think this is a group that's still priced relatively affordably. And I think this is where I'm going to start focusing, at least in the earlier part of the year, as I set up for my year at length.

JASON MESHNICK

I love it. So we've got, I infrastructure moving on to one of the main consumers. Now. They'll benefit...

HELENE MEISLER

JP Morgan  (JPM)  going off the top.

STEPHEN GUILFOYLE

Yeah, right a minute.

JASON MESHNICK

So let's take a look at the charts. Still live.

HELENE MEISLER

I think they were overbought up here.

STEPHEN GUILFOYLE

Anyway. Yeah I'm actually intending to sell some. To tell you the truth.

JASON MESHNICK

All right. Louis.

LOUIS LLANES

I agree with both Chris and Sarge. So I'm going to I'm going to flank to it my third point, because they have the same points that I was going to make. But, actually, one of the things that I do is I have, you may have heard I have this this concept called TORQ, which is the technical term Trend, Overbought/Oversold, Relative Performance, and Quality patterns.

So I analyze the sectors based on that. And then I have a basic fundamental scores that I look at the, the sectors from a bottom up level. And so I kind of rank them and actually the one that's, number three in the third slide, but I think could surprise people even more. So it would be a rebound play in real estate.

Financials is also in that actual, scoring. So financials by the way, had a score of seven, has a score 7.8 out of ten in my criteria. And, real estate has a slightly better 8.2 out of ten. And I'm, you know, looking at like, what are the trends, you know, what is a relative performance and whether or not it's turning.

What is evaluations on the price to funds of operation? There's many different, angles that I'm looking at it, but overall, quantitatively, that particular sector looks like it could be a surprise. No surprise. Some people on the upside, the data center stocks also fit in that category. But the financials I think is also another, significant one there.

And I, I do agree, I feel like when you kind of put a mosaic of what Helene is saying and, you know, you have this potential of a drop, with kind of the darlings that everybody loves right now. But the fundamentals are still in play like Broadcom  (AVGO)  I completely agree with that. And that's when you can pick them up.

But but you know at that overbought level seems to be the the theme right now. So I'm looking for trying to looking for places to put money. Now that can can help rather than just having a bunch of dry powder.

HELENE MEISLER

Are you looking at, housing or like the REITs.

LOUIS LLANES

Looking at the the REIT's.

HELENE MEISLER

Because the REITs are one of those charts, Jason, that have just done this all year long. And I keep waiting, thinking one of these days they're going to go up and they never go up.

LOUIS LLANES

And if you look at them on a bottom-up basis, to which I know you do, one of the things I like to look at, those RRG charts. I don't know if you're familiar with those, but it's a rotational chart. So you can see the relative performance versus an index. But you can also see the change of that over time.

And you can see it has like a tail. So you can see the path of it. And you have this rotation that happens. And you can see the financials have gone from the from the underperform to the risings. And so have the and so has the the health care and so has the financials. And I think what's going to happen is, is that when the the darlings sell off, their rotation will go in those sectors.

LOUIS LLANES

They probably have some upside there you can make money on. But the real long-term fundamental growth engine is still the stocks that, I believe that Chris was talking about. We just need them to come down. I think my.

JASON MESHNICK

Grade. Yeah. For those not familiar, RRG stands for relative rotation graphs, and I think they're about 15 years old. Pretty pretty cool way of looking at, relative strength analysis. Because again, yeah, you get that strength as well as the momentum of the strength. I'll try to link that in the, in the notes as well.

Rev, let's move on to you. So, what industry or sector do you think will surprise?

JAMES REV SHARK DEPORRE

Well, I think both Chris and Sarge have good points about AI and power, and I think you have to look at some of the niches there rather than the overall themes, like in In Power. I think some of the niche stuff like edge computing, some of the alternative energy things, solar or whatever will be areas that really do well.

One group that is sort of talking my book that I think will do well in 2026 is biotechnology. Biotech has been under a lot of pressure because of FDA. You've had all that craziness going on there for a while. It's underperformed for years. It's been a terrible, terrible group for a long time. And this finally started coming alive in the last few months.

It's done very well. It had good relative strength and so on. And I foresee that continuing. There's going to be a lot more merger and acquisition activity in that group. And the big drug companies, they the way they do on R&D is to acquire a little biotechs. That's where their R&D comes from. And, I think that the group will start getting a little more respect when they start showing some relative strength.

And that's going to suck some more people into that. And, there's a lot of more. There's also a lot of AI plays in the biotech sector. There's AI implications in a lot of these little, biotech stocks that is going to start coming to the forefront, in the next year or so.

JASON MESHNICK

Awesome. Yes. The only concerning thing I've heard so far is that, everyone seems to be in agreement on. I have.

HELENE MEISLER

Not.

JAMES REV SHARK DEPORRE

Made,

JASON MESHNICK

Except for really good. Okay.

HELENE MEISLER

No, but that's my nature. That's my nature. Come on. When everybody starts to say, oh, we have too much of this and too much of that, and it's awful and terrible. I'll probably be like, oh, no, it's not so bad.

LOUIS LLANES

Yeah.

JASON MESHNICK

Four out of five market analysts agree.

HELENE MEISLER

As long as it's not dentists and foreigners.

Part 5: One Stock That You Want to Buy and the One Stock that You Would Sell to Fund the Purchase

JASON MESHNICK

Okay. Last one, this is the big one that everyone's been waiting for. Let's name one stock to buy. And going into 2026 and the big one that you would sell to fund that purchase, again, starting with Mr. Versace.

CHRIS VERSACE

Yeah. So I'm going to make this pretty quick. We are in the portfolio looking to buy some Broadcom  (AVGO) . And as we've communicated, we would trim back some of our existing chip holdings. The one that I would probably trim the most out of to fund this buy would be Qualcomm  (QCOM) .

JASON MESHNICK

Okay. Buy Broadcom, sell Qualcomm. 

I'm writing these down. Sarge.

STEPHEN GUILFOYLE

Okay. Well you know I can't just give you a one. So this these are my two in my mind setups. Okay I'm going to increase my long exposure to SoFi  (SOFI)  which is already a big one. I'm going to re initiate Wells Fargo  (WFC) . I'm going to do that at the expense of JP Morgan  (JPM) .

On the tech side, plus AMD  (AMD)  plus Broadcom  (AVGO)  initiate Amazon  (AMZN) .

And that's at the expense of CrowdStrike  (CRWD) , Intel  (INTC) , and Nvidia  (NVDA) .

JASON MESHNICK

So CrowdStrike Nvidia. Okay. Well the.

STEPHEN GUILFOYLE

That's right. I'm not getting out of those stocks. I'm reducing them to fund.

JASON MESHNICK

Right. Okay. All right Louis, let's move on to you.

LOUIS LLANES

Okay. I'm going to give you something that's quite boring. Dutch Bros. Buy Dutch Bros  (BROS) . They've got a great growth story. They could double the number of, of stores that they have. Drive through my daughter. I want to go to a football game. My daughter said, hey, we got to go to Dutch Bros. And I started looking at the fundamentals.

I'm like, whoa, this has some nice growth potential. Nice chart, by the way, as well. And I would just sell Starbucks  (SBUX) . You know, that's that's an easy one. Even though Starbucks you know you can make a case for owning it. I do think it will outperform in the next 12 months. We'll see.

HELENE MEISLER

You can make a case that Starbucks has done this.

LOUIS LLANES

Yes.

HELENE MEISLER

It's time.

LOUIS LLANES

Yeah.

STEPHEN GUILFOYLE

And the coffee's not that good.

JASON MESHNICK

Okay. And Louis, you just wrote an article about Dutch Bros, so I'm going to make sure to link that as well. All right. Awesome. Rev.

JAMES REV SHARK DEPORRE

Well, I always have a hard time with this question because I don't trade portfolios like you guys do. I just don't handle the market in the same way. The way I look at this, picking a stock for the year ahead is I want something with the biggest return. I have something that's going to have a giant return, and that you have to take into account your your tolerance for risk when you're picking stocks in that way, if you don't want any risk, then I mean, I go with a big cap, I pick an Amazon or, an alternative to that, that I'm kind of thinking would be a good long-term, longer-term buy and hold is Uber  (UBER) . I think Uber is a contrarian play at this point and that it's gotten it's gotten too much pressure on it because of the fear of competition from Tesla  (TSLA) . And and it's also getting the FTC is going after them on all this other stuff.

So they have a pile of bad news. And I think it's getting overly, oversold because of that. Not that was what I was what I would do in a longer-term balanced portfolio, you know, in, if I was going to pick a risky stock, I'd go with one of my biotechs. I mean, last year I picked Xeris  (XRX)  your which more than doubled throughout the course of the year.

JAMES REV SHARK DEPORRE

This year, I got two biotechs that I'm looking at. One's called Alto Neuroscience  (ANRO) . And what they do is precision precision psychiatric medication. What they do is they take drugs for depression or for, schizophrenia. And it it's made to fit the exact bio makeup of those individuals that need those drugs. So they try to make it precisely formulated so that it deals with it.

It's not a one size fits all of psychiatric drug. And, that's one name. I think the other one is Delcath Systems. The symbol is  (DCTH)  they make in oncology. They treat liver cancer. The primarily. And they have a system where blood is taken as it comes out of the liver, and it's into a device that's external to the body that filters the blood and then puts it back into the system and it takes out all of the, the, chemotherapy stuff so it doesn't go through your system.

It just goes through your liver or whatever is needed. It's, it's a very complicated process. It requires a lot of medical staff, it has specialists and so on. And, it's kind of been slow on the uptake, but I think this is the year where they're going to really start to prove what they do. And there's a lot of other, cancers that it will work for.

So, those are my two small biotech picks that I have for the you know, like I said, they're high risk. The way you manage them is you trade, you got to trade them. And that's how you that's how you manage your risk. If you want to buy and hold something longer, I'd go with, Uber or maybe and I think Amazon and The Magnificent Seven is the one that I think is going to outperform in the year ahead.

Conclusion

JASON MESHNICK

Awesome. That was great. Thank you. With that. And does anybody have any final words they’d like to say?

Okay. Well I just want to wrap things up by saying thank you so much. This has been a really good conversation. I wish, I wish we could make it five times as long and we could spend, spent all this time with everybody. So I just want to say thank you to everyone for all all your hard work, in 2025.

And I'm really excited and optimistic for all the changes in 2026. It's going to be great. The only other thing that I want to say, and I keep forgetting to say this, is that this podcast, can be found on, all of your, major podcast channels. It's also available on YouTube. We're actually migrating it right now.

So this one will be up on our new, YouTube platform, which I believe will be called, the Street Pro video. I will put that in the article that we publish. This is on so everybody can, can, like and subscribe and, and, and continue to follow along with the, the conversation and also remember that, if you're listening now, you can leave a comment for everybody and, and, people, especially on this call, are really good about, answering their, answering people's comments and responding.

So we want to make this as much of a two way conversation as possible. And it doesn't have to end with just, when we turn off the video here. So, thank you for everyone for participating. Thank you to everyone for watching. And again, I'm very excited for all that's to come in 2026.

STEPHEN GUILFOYLE

Rock on.

JASON MESHNICK

Thank you.

HELENE MEISLER

Thank you.

JASON MESHNICK

Thank you, thank you.