Three Stock Trades That an Indy 500 Team Would Approve Of

Summary:

What parallels can be drawn between investing and a day at the races?
Doug Kass, Chris Versace, and Ed Ponsi offer three different ways to look at markets. Each has lessons that can make you successful.
We’ll discuss three trades that the team has made recently.

How is Investing Like a Day at the Races?

Nothing prepared me for the outright speed that I witnessed at practice day for the 2026 Indy 500 last Tuesday. I race cars and have been to professional car racing events since I was a kid. But Indy cars are wicked fast.

So, what does this have to do with investing? Everything.

You see, in my day wandering the Indy Motor Speedway, I got to learn more about what it takes to drive a fast lap, and it’s not that different from what our team at TheStreet Pro does every day.

First of all, teamwork. To win at Indy, each team will need a top-notch driver, combined with the best team and equipment. Every person on that team has a different job that other people rely on. But there’s more. It comes down to risk management. While each team member searches for the edge that can lead to victory, they’re also focused on keeping the car on track, where it can continue to fight for position. After all, racers say that to finish first, first you must finish.

That’s what we do here at TheStreet Pro. Our team members come from different backgrounds within the investing world. No two are alike, which means that we present a complete picture of market risk and potential reward.

So today, I wanted to highlight three of our people with three different styles and share three different trades that they’re in.

Doug Kass: The Driver Takes a Trade on the Short Side

Let’s start with Dougie Kass. He’s probably the most active trader on our team. Yet, he also publishes some of the longest-term macro analyses. His annual surprise lists are must-reads, not to see if he’s right or wrong, but to understand the thought process that it takes to read the market action. Well, sure, it’s good to keep Dougie honest and see where he’s right or wrong, too!

I think of Dougie like the driver on an Indy car team. As he looks at the market, he’s constantly evaluating conditions and changing strategy. In fact, in a past life, Dougie was a driver! He drove trotters, a type of horse racing. The man understands speed.

Dougie started the year bearish because of valuation and risk concerns. As the market hit its lows, he turned bullish again. Now, with stocks near all-time highs, he’s bearish, penning that “A Possible 2026 Market Top May Have Occurred on Thursday” and that “A Market Bacchanal Rages on While I Remain Celibate.”

His rationale is that speculation is on the rise, valuations are pornographic, slugflation rules the economy, and the Fed’s hands are tied.

Dougie’s made many trades recently, but one that caught my eye was his short in Winnebago (WGO). Dougie mostly discusses his high-octane trades, like shorts in the indexes or volatile stocks like Tesla (TSLA). On Friday, and again on Monday, he discussed his “Thoughts on My ‘Low Drama’ Shorts – And One in Particular.” These low-drama companies sell simple and understandable products where the secular prospects and business landscapes are changing in ways that hurt their bottom line.

In the case of Winnebago, Kass is short for four reasons:

The chart shows a stock that topped in 2021 and has been in a downtrend since 2024.
The K-shaped economy is moving up vertically towards the middle and upper-middle class. These people are the target market for WGOs RVs.
RVs get terrible fuel economy. The rise in oil prices makes it more expensive to keep an RV on the road.
RVs have gotten expensive, reducing the total addressable market.

In other words, demand for RVs is shrinking. Earnings should follow. The stock price will continue to fall.

Dougie is short a small amount of WGO because it’s rare that he takes a large short position in anything.

Chris Versace: The Engineer Uses Data to Manage TheStreet Pro’s Portfolio

Whereas Dougie is a driver, Chris Versace is an engineer. Rather than being a trader, he’s an investor who focuses on data to manage his available resources.

On a racing team, the engineers monitor everything. From driver health to the health of the car and the strategy of the other teams. Resources are not unlimited in professional racing, so things like tires and fuel consumption are a huge concern. Over time, tires degrade, making the car harder to control. Bring the driver in too soon, and valuable time is wasted. It’s a critical part of race strategy.

Similarly, Chris Versace, who runs TheStreet Pro’s Portfolio, constantly tweaks allocations to make sure that he’s using available resources to the fullest. Case in point, there are 29 holdings in the portfolio, excluding the seven that make up the EPS-All Stars. On average, each has around a 3% weight in the portfolio. When Chris is right on an idea, that stock’s weight will increase as the price rises. So, Chris looks to trim those that are overweight. He sells into strength. Buy low, sell high.

Like Alphabet (GOOGL). On Tuesday, Chris wrote that he was “Cashing in on This Big Tech Holding After Shares Surge.” He sold 77 shares of GOOGL, bringing the total shares held down to a more reasonable 4% of the portfolio.

Why?

The rally had made GOOGL an oversized position. Technically, there was also a lack of support for shares to fall back to during the profit taking that Chris was seeing. Risk outweighed reward.

He still owns a sizeable position because, in the long term, the company is well-positioned to monetize both search and YouTube, and he sees Google Cloud benefiting from continued AI adoption.

Despite the sale, he reiterated his 2 rating and $410 price target, but would raise the rating to a 1 if shares fell to around $330. He’d also buy more shares in that zone.

Ed Ponsi: The Crew Chief Looks Far and Wide for Opportunity. And to Stay Out of Trouble.

If Dougie is a driver and Versace is an engineer, Ed Ponsi is like the crew chief. He trades and invests, like Dougie and Chris, but he’s monitoring many things at once, always on the lookout for great opportunities to outperform while keeping us safe.

On a racing team, the crew includes the mechanics, the people who swap out the tires and keep the car running in top condition, while making sure that the conditions are safe for the driver to be on track. They need to be detail-oriented, yet look broadly across all aspects of the car and driver.

This week, Ed took an in-depth look at retail stocks and found one that’s got the green flag, while the others are red.

Consumer confidence has been on the decline over the last few years. Inflation is up, and economic prospects for the working class are down, highlighted by the daily news about AI taking people’s jobs. TJX Brands (TJX), which set a new high earlier this year, has fallen below its 200-day moving average. Other retailers are seeing similar weakness.

Walmart (WMT), however, is bucking the trend.

From a price perspective, Ed sees a cup and handle pattern, suggesting a $145 price target, around 10% above current levels. Next, Ed says that most of the other retail companies are down on institutional selling, rather than news. Institutions can be considered the smart money, so if they’re hanging onto WMT, while selling other retailers, they’ve probably got a good reason. Kind of like noticing that one well-regarded team is swapping to rain tires while the others are staying on slicks. Sometimes, you’ve gotta go with the smart money.

Final Thoughts

The connection between auto racing and investing is risk. The best racers know when to take a risk and when to hold back.

It’s the same in investing. To be successful as an investor, you need to consider potential gains from the standpoint of risk. As Chris Versace shows above, you can sell shares in a stock you love if it’s overpriced. Or like Doug Kass, take an aggressive position, but only if you’ve done your homework first. Even then, go small. Or be like Ed Ponsi and buck the trend, but only when you feel like you’re not alone.

With the long weekend coming up, you can bet that I’ll be watching the Indy 500 this coming Sunday. The stock market can wait an extra day.