083 - Tim's Market Predictions For 2025 And Our Stock Line Up

The results of Tim’s 2024 predictions blew us away and spurred us on to get the oracle ball out for 2025.

We’re excited to share the 9 areas of the market that we think will perform quite nicely in the upcoming year. Plus there are a few extra companies that should benefit from the economic climate.

We’ve got oodles of stock picks to choose from so you can get in while the gettin’s good. And as always, Tim shares his favorites among all the stocks that we’ve pre screened for metrics and value. 

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Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

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Transcript

Welcome to Roaming Returns, a podcast about generating a passive income through investing so that you don't have to wait till retirement to live your passions. The results of Tim's 2024 predictions blew us away and spurred us on to get the Oracle Ball out for 2025. We're excited to share the nine areas of the market that we think will perform quite nicely in the upcoming year.
Plus, there are a few extra companies that should benefit from the economic climate. We've got oodles of stock picks to choose from so you can get in while the getting's good. And as always, Tim shares his favorites among all the stocks that we've pre-screened for metrics and value.
So get ready, because we're about to unload some alphabet soup. This took forever to create, so if you don't like it, let me know why, but be nice about it. It's his 2025 birthing baby.
This is what I foresee happening in 2025. And recently we went over how I thought 2024 was going to play out, and I missed with a couple, Intel and Horizon, but Intel is still a buy for 2025. But I was pretty spot on.
So yeah, but that's 2024. No one cares about that. So let's get on to 2025.
We put a lot of effort into this because Tim actually did a really good job with his predictions for 2024. Like if you go back and listen to that episode we just did not too terribly long ago, he freaking nailed it out of the park. I mean, he had a couple of major losses, but if you would have equally invested across the whole portfolio, or all the assets that he recommended during that prediction that he did back in the beginning of January, you would have made like 68, 70% yield on the freaking portfolio.
Yeah, way better than the 27% that the market's made. Yeah, and freaking credible. So we put a lot of, or he put a lot of effort into this because he wants to see if he can duplicate those results.
So I'm really curious to see what the heck he's come up with, because I'm completely fresh to this information. For the most part, these are mainly dividend stocks, because that's what we're interested in. We're interested in income.
But he did do some growth stocks because they make sense in the macro. Growth stocks that are in this list as well, and we'll get to them. So 2025, as I'm sure everybody's familiar with, 2025 we're having a new administration come into power in DC with their own agenda and policy that they want to implement.
The difference between 2024 and 2025 is when 2024 there was a split government, in 2025 it's going to be all one party controlling everything. So there's going to be some policies that we agree with, some policies that we disagree with, but it doesn't matter. How do we make money from it? With that in mind, and for me, caveat, in my opinion, when I say this is what I recommend in the different sectors, I think that'll be the one that yields the best with the total return plus the dividends included, so overall total return.
So with all that in mind, 2025, the very first thing that comes to mind in 2025 is there's one area that everyone in DC can agree on, and that's energy is super important. Now they do have differences when it comes to oil and natural gas, fracking, electric and water, blah, blah, blah, blah, blah. But one area where, whichever side of the aisle you're on, whether you're a conservative or you're a liberal, that there seems to be a huge consensus among, it's amongst nuclear power.
So nuclear power is going to be the first sector in 2025 that I think is going to just be awesome. I think there's a lot of other people talking about that too. I've been poking around on social.
The reason being, because it takes 10 to 25 times more power to run a chat GPT search compared to a regular Google search. Just let that sink in. 10 to 25 percent, 25 times more power, so that's a shit ton more energy.
And because that's, chat GPT being AI, AI is going to be the huge factor that's driving the nuclear power. So how do you power AI? You do it with nuclear power. We've already seen it at Microsoft with Three Mile Island, Amazon's, they're building some nuclear plants and they are having started up other ones.
So what's the best area that I can come up with with nuclear power? There's three options. There's NLR, LEU, and CCJ. You're not getting much in dividends for these three, but you are getting exposure to nuclear, which will be huge.
And my favorite is NLR. Because you get a lot of exposure to some really good ones. NLR yields 3.59 percent, LEU yields nothing, and CCJ yields 0.2 percent.
So I want income. But more so, what's more important than the income is with NLR, you're getting exposure to 26 different companies that deal with nuclear power, reactors, uranium. So they do all the diversification for you within the nuclear sector.
So I like that. Actually, I love that. We bought this, I mentioned this a while ago in the emails that went out, I bought this a few months ago just for this particular reason that they do all the hard work for me.
So area one, nuclear power. If you don't like what I chose, do your own research, Google search. Do some research and find your own nuclear stocks.
There are ones out there. But a lot of the gains are locked in. A lot of them have gone up 80 percent.
IOQN or something like that deals with it. But I just like NLR because some of the best holdings in NLR are the companies that people have actually approached me with. There was one company, I forget what the hell it's called, it has a G in it, I think it's SEG or LEG or something like that.
But the number one holding in NLR is that company. So why would I invest in that one company that doesn't pay a dividend when I can invest in NLR and get 3.5. And get access to 25 other nuclear companies. Now the bad thing about NLR is they just do one dividend in December.
So you're going to have to hold the stock for the entire year to get the dividend. But I don't foresee that being a problem because it's just going to go straight up. Yeah.
I mean it's already, like I said, I've seen a lot of them go up like 80 percent for the year. But we wouldn't have known Trump and the whole thing was going to happen until as late as it was. But I think they've got a lot more room to run a lot more.
So that is that. Since we're on the topic of power, we should also mention that AI uses electric power as well. So boring old Utilities could have another good year like they did in 2024.
2024's utilities was incredible. But I think we have to be specific to utilities that deal with electric power more so than renewable or solar or wind or water, whatever it may be. So you want to focus on the electric area.
And not to say that those are bad sectors, but they're not ready to pop. There's so much more focus elsewhere and we need to take advantage of that from a profit standpoint. So after doing the research, I came up with one, two, three, four, five that I think fit the criteria.
NEE is the one in Florida that I've mentioned previously. There's PCG, there's SO, there's ES, and there's DUK. So let's compare those real quick.
NEE gives you a 2.6% dividend, PCG gives you a 0.2% dividend, SO gives you a 3.23% dividend, ES gives you a 4.43% dividend, and DUK gives you a 3.57% dividend. The most undervalued of the lot is ES, ES has a 14.16 PE, whereas the other ones are higher than that. And comparing to the peers is 22.
NEE is actually overvalued compared to its peers, so NEE was just eliminated for that reason. We just sold that, didn't we? Or am I thinking NEP? NEP, we're still in that. And NEE has no projected EPS growth, whereas PCG has an EPS projected growth of 9.6% for the next five years, SO has a 7.3% EPS growth projection, ES has a 4.2% EPS growth, and DUK has a 6.7% growth projection.
ES is the smallest of the four of those. My pick here is ES, ES gives you a better dividend, it's the most undervalued of the five, but it does have the lowest EPS projected growth. But you could probably pick any of the four, PCG, SO, ES, or DUK, and do just quite fine for the next couple of years.
But this is mainly for 2025, and I think because it's so undervalued that EPS is the best of the group. We don't know what the Trump administration will do and how it will affect these kind of stocks, but all we do know is that AI needs massive amounts of power, so they're all going to generate revenue. I like the valuation, the upside of ES more so than the other four.
Okay, that's the second sector, electric utilities are going to be bangers. The third sector that's going to be bangers is oil. I know a lot of people have a problem with oil, we've discussed this.
Yeah, does oil contribute to energy as well, I assume? Yes. We've discussed it previously about how a lot of people have a problem with oil because it destroys the environment. We don't disagree.
But putting our personal feelings aside, we do understand that Trump wants to drill in the U.S. Drill, baby, drill. And he wants the U.S. to be energy independent, and he wants U.S. oil companies to flourish. So currently oil's at $67 a barrel.
I think within two to four years, this is going to be more like $150 to $175 a barrel or more. That's pretty crazy. Which is awesome because you can pick whatever oil company or oil storage, oil transporter, oil refinery, et cetera, that you like when the prices are tripling.
The only caveat is to make sure they're American or have a high percentage of their revenue in America. Because like I said, he wants the U.S. to be energy independent, and that means he's going to do whatever he can to make sure that American energy companies are awesome. So that's why recently we sold EQNR.
I really like EQNR. It's an outstanding European oil company, but it's not American. So there's a whole lot of companies that I researched.
We have CVX, OKE, CIVI, KRP, MTDR, CVE, CEM, MPLX, EPD, EMO, ET, EOG, BGR, SRV, and AMLP. So these are all the ones that I researched that are mainly American or most of their exposure is to American oil. So that's a lot of tickers to go through.
So let's dig in. Of all those, I picked one, two, seven. So seven of them I found to be better than the rest of them, and I came up with four that I really like.
But I'll let you ... We'll go through the numbers first. OK, CVX has a 4.03% yield, and it has a 15.56 PE. I probably should have looked up what the peers are, but I do believe the peers are around the 27.8% or 27.8, that's where they were previously.
There's no projected EPS growth for CVX. So CVX is nixed because it has a low yield and no growth forecast. It does have a low PE, so it is undervalued, but you're not getting squat.
It's not as good as some of the other ones. OKE, the second one, has a 3.49% yield and has a 22.42 PE, but it does have 6% projected EPS growth. OKE deals mainly in natural gas, but it does have some oil exposure, but natural gas is a component of oil that gets overlooked or forgotten.
I like OKE. The one that ... This is one that we hold, and the next one's one that we actually hold in both our retirement and our van life is the CIVI. It yields 9.58%, has a PE of 5.96, which is ridiculously undervalued, but it doesn't have any projected EPS growth.
So what that means is because you're going to have price depreciation because it's so undervalued at the 5.96, but it's only going to go up to like what the average of the oil companies are, and it's not going to go much above that because there's no projected growth or revenue growth. So you're going to be collecting 9.5% while it climbs up. Maybe it might double, maybe triple, but I think double's a better understanding.
The next one's the Small Cap Royalties, which is KRP, which we also hold in the van life one. Well, I'm surprised this isn't one of your pick picks. It has a 10.82% yield, but it is 27.1. It is super ... Close to the pier, right? It's pretty high value compared to the rest of the chart, so that's why KRP, even though we hold it, I don't actually have it as one that's going to flourish in 2025.
Interesting. The next one is MTDR, Matador. Ole! Is it actually Matador? Yeah.
Oh my God, I was going to guess that. It has a 1.67% yield and a PE of 8, so it's undervalued, but you're not getting a lot in terms of dividend, and it has no projected EPS growth. Next one is CVE.
CVE has a 3.26% yield with a 10.41 PE with a 17% EPS growth. That's a pretty big amount of projected growth. The reason that I chose OKE over CVE is because OKE has more exposure to natural gas, whereas CVE is mainly just oil play, and I like CVE better than CVE, but CVE could be awesome.
If you want to get into that one, I totally understand why that's a really good one. I could see why, too, from the metrics. Now, then we have some conglomerates.
They hold a little bit of everything. They have exploration. They have transportation.
They have refining. MPLX is in this category. It has a 7.41% yield with a 12.36 PE with 5% EPS projected growth, so I really like MPLX.
I can see why that one makes the list. MPLX is a good one. That's bolded.
You can't see it, but it's bolded, trust me. The next one we have in the retirement account is EPD. I really like EPD.
I think EPD is going to be outstanding for a multitude of factors, but mainly because they deal in a lot of the midstream and downstream. They don't really focus a lot in the exploration part, which is more expensive. They basically just transport it and store it and refine it.
They have a 6.1% dividend yield with a 12.81 PE and 6% EPS projected growth, so I like EPD a lot. ET is another ... It's a lot like EPD. People sometimes get them confused, but they're actually different companies even though they have a lot of the same stuff and a lot of the same looking numbers.
ET is a 6.5% yield, so a little bit better than EPD. It has a 14.07 PE, so it's a little bit higher evaluated than EPD, but it has a 16% EPS projection growth. It has a lot more room to grow.
That's like 10% more growth than EPD, so I like ET. I like any of these four. I like MPLX, EPD, EMO, ET.
Next one is ... It's a closed-ended fund that deals with the oil, it's BGR. Booger. Booger.
Booger. Here it is. I will put this chart up as a link.
6.14% yield, but it's 2% overvalued currently, so that's ... I don't like anything overvalued. Next one is AMLP, which has a 7.81% yield, but it's currently fair-valued, so again, I'd rather ... Of these closed-ended funds here, I love SRV, which we have in both the retirement and the van life, plus I actually have the van life people that we talk to and I help with their ... F&A Van Life. ... portfolio.
F&A, yeah, I actually have her in SRV. It yields us 11.61%, and it's 10% undervalued. This is probably the best play for just income plus the price appreciation of all the ones I just mentioned.
All that, the ones I like are CIVI, EPD, ET, and SRV, but again, if you've got OKE, CIVI, MPLX, EPD, EMO, or ET, SRV, you would be just fine, but the ones out of the four I like are CIVI, EPD, ET, and SRV. Oil, no matter how you feel about it, it's going to be around the rest of our lives, so swallow your disdain for it and make money off it. That's what I recommend there.
Next area is it's going to be around for the next 10 years. They keep trying to say that it's a bubble, it's going to die, it's overvalued. It's not blah, blah, blah, blah, blah, blah.
AI. AI, it's going to be strong. It's going to maybe not as strong as last year, but it's still going to be probably one of the leading sectors or areas that you're going to make money in 2025.
What it's starting to do is it's starting to shift from the chip makers and the hardware makers into practical applications. By this I mean they're actually starting to take the AI and certain companies are using the AI and inputting data to actually create data sets that then they can put in the AI and the AI does the work for them. That's actually what's started to happen, say, with Amazon or Google.
They're actually starting to use the AI to ... They're inputting data into it. The computer uses the data to learn and once it learns, it spits out better results. This is something that actually has just started happening in the ... What is it called? It's not the healthcare.
It's the biomedicine or whatever. Telemedicine? Biomedicine? Biomedicine, where they're actually starting to input data from different diseases, plus they'll actually take individual DNA or skin samples or whatever and they use that and they're actually creating data sets. It's pretty interesting.
They'll take tissue from a tumor and they'll let the AI learn from the tumor what exactly fights the tumor best. It's fascinating. Yeah, it is really fascinating.
Obviously you got NVDA. NVDA is ... I shouldn't even have to say anything about that. It's going to be around for probably 10 years.
This is where Intel comes in. INTC is going to be awesome in 2025. I know I said 2024.
I'm really surprised Intel pivoted like they did, but that's freaking awesome they did. I know I said 2024, but I was probably a year early, but Intel is going to be fine. INTC, it makes too much money to be trading as low as it is right now, so it has nowhere to go but up.
Another thing you will notice over time, Tim's little Oracle thing he's got going on is usually way before it's time. There's usually a delay before it really reaps its ... That was a hard learning lesson for us. We usually get out too early.
Amazon, AMZN, another- No surprise there. Another surprise. ASML is another stock that you should maybe be able to make money off of.
I don't think any of these really have a dividend per se, but- Which is one thing we don't like. You could still make a lot of money off them. VRNT is another AI winner for 2025.
ORCL, Oracle's probably going to be another winner for 2025. What I was going to say here is going to be somewhat controversial, but I think one of these ones that I just mentioned, Intel, Amazon, ASML, VRNT, or Oracle, they're actually going to return more than NVIDIA in 2025 just based on they've taken what NVIDIA is selling, they've implemented it in their own computers, and they have their own data sets, so they're going to generate higher returns than NVIDIA. I could see that.
Where I like, where I get my money at in the AI sector is not from any of these stocks I just mentioned. I mean, they're awesome stocks, but NVDY, which is the yield max for NVIDIA, MSFO, which is the yield max for Microsoft, AMZY, which is the yield max for Amazon, or the one that I just got into two months ago, AIPI, which is basically a covered call version of FEPI, but it mainly deals with AI. Do any of its holdings include the ones you listed, Intel, Amazon? Yeah.
It's like AIPI includes all these. Okay. And that's a way to get- I think that one has 36% yield, AIPI? It has to be between 30 and 40, depends on the model.
You're not getting any yield, so you're going to have to choose between the growth perspective. We can look at the chart here. You see how NVIDIA has no dividend.
Intel has a 2% dividend. Amazon, none. ASML, 1%.
ROK, which I didn't even mention because it's ass, but 1.78. VRNT is zero. Oracle has 1%, but then you get down here to what I just mentioned. NVIDIA is 73.4, and Microsoft yield max is 36, Amazon yield max is 43, the AIPI, which actually- Dang, I was close, 35.7. These ones here, the yield maxes, if you remember, they have options on- Themselves.
They do synthetic calls, so they actually hold the stock, whereas AIPI actually holds the stock, so they're writing cover calls in the stock they hold, so I really like this one. And if I'm getting 36% for that, awesome. But if you go up here and you look at what they have going on, what the experts are projecting, you look at NVIDIA's 62% EPS growth, Intel's 13.5, Amazon's 33, ASML's 18, so they're going to have lots of growth, but I would rather make money.
I'm all about income, so it's one of these. These four are my picks. Well, and like I said, that's why I asked if the Intel, Amazon, and all those were included in AIPI, because if they are, you're actually going to get the price appreciation in conjunction with that high yield.
Yeah, the AIPI has like, I mean, we could pull it up and read off what they have, but they have most of their holdings are anything that you can think of that deals with AI, they have, they hold it. Yeah, so I think that's the better play. And they actually have Planeteer (PLTR) as well.
And that's why we put a juicy sum of money into AIPI. Yeah, AIPI is pretty banging. We get our first dividend here in a couple days.
We bought into those other ones that don't yield, like don't sell, just let them ride, I guess. But yeah, my favorites here are NVDY, MSFO, AMZY, and AIPI. I'd rather make income off AI than growth.
Yeah, because again, the whole goal is income, not to have to sell your assets to pull money out. So that's with AI, but there's another component of AI. So AI basically dominated the first hour of this conversation.
Nuclear power so you can power AI, electric power so that you can power AI, oil so you can power AI. And then you have the actual AI, then you have down here, you have data centers to house AI data. To store the AI data.
Yes. That's epic. But that makes sense.
This can be either data, the actual physical data storage, or cloud storage, or even companies like Dell, which supply the infrastructure to build the data storage companies. I like Dell for that reason. They're actually good.
What I mean by infrastructure is they give the shelves to hold computers, or they actually give you the outside of the computer where you can put your computer chips and whatnot inside the actual computer frame. So I like Dell a lot. The reason I think that this is a huge area that's not really invested in it too highly is the CAGR estimates, and these are even the low- I'd say this is like an underdog sector.
These are the low ones. I didn't even use the higher ones. There's people who are saying 50, 60, 70%, but I went with the really conservative ones.
15 to 20% year-over-year CAGR growth for the next decade on data storage. I think this isn't as sexy as the AI and all that other stuff. So these are going to be huge winners.
I think this is going to be a lot like Tim's utility pick for 2024. Utilities freaking killed. I think this is going to be the sector that kills it for 2025.
So you have here, you have CCI, DLR, DOCN, STX, ANET, PSTG, WDC, MU. Those are the stocks. Those are those I like, STX and DOCN, but we'll get to the data here in a second so you can see.
And then you have the closed-ended funds that deal with it. You have AIO, JRS, AIQ, MBXG, and BSTZ. And I'm going to double up on AIO and MBXG from last year, and those are going to be the ones I recommend for this year.
So those four there, STX, DOCN, AIO, and MBXG are the ones I like for the data storage. Let's look at the actual data for data storage. Fun stuff.
Okay, there you see Dell only offers a 1.4% yield, but at least you're getting a dividend for something that's going to grow a shit ton. 16.3 PE, 12% EPS growth. DOCN doesn't have a dividend, so this is one of those ones where I mentioned at the top there's some that are just going to be growth stocks.
This is actually just a growth stock, but it has 14% EPS growth projected. Yeah, that's pretty big. STX doesn't have any projected EPS growth that I could find, but that doesn't mean it's there.
I just think it's very difficult to find EPS growth projections for stocks. It has a 2.84% yield with a very low PE of 13.48. WDC, I have no reason other than it's super undervalued at 9.71, but I like that it's undervalued. Anything undervalued in the data storage field is going to pop off, so that's why I like that one.
We go down here to AIO, 7.3% yield. JRS is a 7.06% yield with 10% undervalued. AIO is actually overvalued compared to where it's been historically, but because it houses all of these ones that are going to grow, I think there's a few times that I'll actually look at closing the fund and say the premium, the discount doesn't matter, and this is one of those times.
CBSTZ has an 8.93% yield, but eh, whereas MBXG has a 9.10% yield. It's like 5% overvalued right now, but again, it's going to be awesome. This one's a monthly.
I think these are all three monthly dividend payers, so you get your dividends every month. Hells yeah. Next area is going to be REITs.
I may have been a year too early. I don't know. We'll see.
We'll see. Yeah, we'll see. Again, I'm very bullish on REITs for 2025.
The falling interest rates plus absurd mortgage and rent rates, I think they should pop off. Why the high mortgage and rent rates? Because these companies are going to be collecting higher rent per month because rent's just ridiculously high, and if they own the mortgage, they're going to be obviously getting more payments in mortgage. Another reason I really like REITs is you have a pretty overvalued stock market, which makes REITs more enticing for investors and institutional investors because they're so low value compared to the rest of the market as a whole.
Rest of the market has a really high 27, 28 PE, whereas the REITs have 12, 9, 8, 13 PE, so they're very undervalued. They're very undervalued. But I think the area that's going to perform best is mortgage REITs, MREITs, the ones that actually hold the paper, not the properties.
I think they're going to perform better because I know this contradicts the falling rate environment because lower interest rates would be less payments in the mortgage, but I just have a sneaky feeling that MREITs that have floating rates, because most of them have floating rate loans, which means they just bounce around like whatever, so they just lowered the interest rate this week. So it went down 0.25%. They have floating rate loans, so they'll actually bounce around based on where the interest rates are. And I have a pretty good suspicion in my mind that at some point, the interest rates are going to go up in 2025.
I've been talking about this for months in the email that I sent out. I was going to say, even on the emails, the metrics do not add up. They preemptively started lowering the interest rates.
All the data suggests that the interest rates should have stayed at like 7% to combat inflation. If their objective is to have 2% inflation, they lower the interest rates probably 6-9, maybe 12 months too early. So I think MREITs are going to be where it's at, but also, like I did in 2024, I think healthcare is an area that is due for some mad revenue because people like the boomers are getting older and they need care or housing or whatever the case may be, medicine.
So some of the REITs that I went through are SBRA, GMRE, LTC, NHI, ARR, BXMT, AGNC, BRMK, STWD, ABR, and GEO. GEO is the only aberration of this. This is a private prison because there's going to be a lot more housing of illegal immigrants because they're going to send them all back to wherever they came from.
Where they house them at is like in private prisons for the most part. Yeah, according to Trump's claims of cleaning up whatever he's doing. So of all this, I like NHI as my healthcare REIT for 2025, AGNC and ABR are my mortgage rates for 2025. So let's look at the numbers. You look over here, you see SBRA has a 6.41% yield with a 36.58 PE, which is ridiculously high.
So that's why it's not on my list of yay. GMRE is a 9.45% yield. I didn't like a couple of things about this one that has nothing to do with like the metrics.
I just didn't like what they held. LTC, which is, I've wrote about this numerous times in my emails, like the top 10 best investments going ex-dividend. LTC yields about 6% with a pretty low 18.57 PE in the diversified REIT section.
ARR, which has a 15.22% yield and a 4.84 PE wasn't included because they cut their dividend all the freaking time. So like, I like some consistency with my dividends. AG&C, which we hold has a 15% yield with like a minimal 4.89 PE.
This is an MRE mortgage rate with a really low PE with a super high yield. So this is going to be awesome. Yeah.
We like them high yield. We have STWD in the retirement portfolio. It's just, I think ABR is better, but STWD is 9.43% yield with a 10.13 PE.
Whereas ABR has a higher yield of 11.72 and an 8.47 PE. So I think ABR, which it has a mixture of mortgages and physical properties. So this is kind of, I think it's like a 60, 40 or 70, 30, where they have like the majority of the stuff they hold is MREITs or mortgage deeds or mortgage, whatever you want to call it.
And they hold like 30 to 40% in physical properties. NHI is my healthcare one. It only yields 5%, but it has a 25.97 PE, which is pretty low for like these diversified REITs.
I think it's like the average for the peers is like 40 some or 50 some. So it's like half of what the peers are, but it actually has a 2% EPS projected growth. So I like NHI, ABR, and AGNC in this group here.
I like them a lot. Actually, this is super undervalued. We've been saying Arbor for a while.
So we're like, well, why would we, this like up here, we have the healthcare REITs, which was GRME, LTC, NHI. Those were healthcare REITs. So it's SBRA.
I like NHI the best, but healthcare is by itself is another sector, much like last year, where there's potential for ridiculous gains in 2025 because the world is getting older and requires medicine. We've been saying that. It's not going to be a smooth ride because there's new administration, which has some interesting ideas about health.
But the ones I looked at here were CVS, which if you're not from the East, you don't know what a CVS is. Oh, really? And they don't have them out there? It's like a Walgreens. WBA, which is a Walgreens.
So if you don't know what a CVS is, it's a Walgreens. Bristol-Meyer, BMY, OGN, HQL, HQH, BMEZ, and BME, which we actually just invested in BME because it does social science. It does like social medicine, like it does science and stuff.
It's more holistic and like science-based solutions as opposed to pills. So of these, I like OGN, BME, and BMEZ are my three of like all those we listed, but we'll check out the numbers. I'll preface this by saying, I think you'll make money in any of these, but I like OGN, BMEZ, and BME.
BME a little more than BMEZ. And you'll see why here in a second. CVS is a 4.4% yield with an 11.31 PE, which is about average for this area.
So it doesn't have a lot of appreciation compared to its peers. Walgreens has 11.09% yield, but it cut its dividend and its prices literally went like 80% down. So like this is like a contrarian buy.
Yeah, it's a contrarian buy because it's so like just ridiculously depressed. If you look at your chart, it went from like $30 down to like $10. So it's down like a ridiculous amount.
So that's why it's on the list, but I don't like it. I don't know, like whatever they got going on, there's something about it. It just screams, ah, stay away.
Bristol-Myers, if you recall, I did say Bristol-Myers is one of my stocks you should hold for like a decade, for the next decade. It has a 4.05% yield, but they have a lot of drugs in the pipeline. So this one could just like smash up like 100, 200, 300% if like the trials pass and the medicines are deemed safe and everything.
That's too much uncertainty for me to say, hey, you should get into that. But like this is one that if you want to, you get into it and hold it for a decade. I did mention that in a previous podcast.
I really like Bristol-Myers. OGN, we've held this one for two or three years now in the retirement portfolio. It has a 7% yield, which is awesome.
Its PE is negligible at 3.85, like it's so undervalued, it's sick. And it actually has a 3% EPS projected growth. I really like OGN.
I was hoping to dump more money into it, but I ran out of money. So we have a common problem with that. But yeah, this one here is going to be awesome.
This one I could see actually going up like 50 to 60% in 2025. Then the next four are closed-ended funds, HQL, 13% yield, 3% undervalued. HQH, 13% yield, fair valued.
BMEZ, which is a BlackRock science healthcare type thing, has a 10% yield and it's 5% undervalued. So it's really good, but I like BME better because it's 20 to 30% undervalued. That's big.
It has a less yield of 6.53 and it costs like almost $40, whereas this one's like 15. So you can get a lot more shares of BMEZ at a higher yield. So you'll actually have a better total return.
But I think I'm probably not getting out of this for the four years of the Trump's presidency. You said that it performs really well during the last time he was in. Both these, BMEZ and BME, they were up like 50, 60, 70% during Trump's first presidency because he has a different view on medicine and healthcare.
They did really, really well. So BME is really good. I would recommend getting into that if you're not in that.
The next thing I have to say is going to seem counterproductive based on everything, but I think BDCs are actually not going to do as well in 2025 as people think they're going to. Really? Didn't you say that that was a good sector before? Yes. Did you change your mind after you dug into the research? Well, because there's other political forces going in.
Like any investment, there are good ones and bad ones. Trump's appointment for the SEC will make money easy to lend again with little or no regulation. However, I see the decline in interest rates having a huge impact on revenue and capital and dividend coverage.
Additionally, the high debt companies are kind of screwed as they will have to either pay at higher rates or restructure their debt, which a lot of times Wall Street investors don't like when they restructure debt. So the stock will go down. Either way, if they either pay the higher interest rates or they restructure their debt, they're going to have less capital to apply to loans, debt repayment, and dividend payouts.
So if you're in a BDC right now, verify they have their scrap together. By having their shit together, I mean they have free cash flow, they have good profit margins, they have debt reduction. The last five years you can go into Schwab and it can show you what their debt has done the last five years at the very bottom of any ticker.
Basically, the good ones, Hercules, HTGC, MAIN, ARCC, FSK, and OBDC should be fine and flourish no matter what the economic conditions of 2025 throw at them. If you're in BDCs other than those five, you might want to re-research them to verify they have good profit margins, that they have revenue that's growing, that they have debt that's going down, that they have free cash flow. If they do, then awesome, you can keep them.
But if you see there's cracks in the armor, you might want to actually think about selling them before Trump becomes president. There's a few BDCs that hold all five of the ones I mentioned here plus other ones, but the one I like best is BIZD. I'll show you why here in my little chart.
Here we go. Hercules Capital, 10% yield with a 9.28 PE, which is obscenely low. The average is 27.
I'm surprised that's that low. Main Street Capital, 5.41% yield with a 13.52 PE. ARCC has an 8.7% yield with a 9.38 PE.
Pfister Capital, 11.5% yield with a 7.72 PE. OBDC, 11.3 with an 8.07. You see the theme here, that these are all super undervalued compared to their peers and they all have a pretty good yield minus this one here. Then you got BIZD, which is an 11.34% yield and it's trading at par for it closing the fund.
These are all excellent choices for the BDC section. Excellent. Only thing you have to look out for is Hercules and Main Street Capital, both are trading pretty high.
When you look at- Their history? How do they phrase it? Their debt to their revenue is pretty high. They have a metric and say Hercules makes a billion dollars. Well, they're actually have like 1.7 billion in debt.
They're trading at 1.7, whereas Fisker has trading at 1.2 or 1.02 or something like that. It basically has enough revenue to pay off its debt within a year if the shit hit the fan, whereas OBDC is actually trading at- It's like a risk indicator metric based on debt. There's a good website.
It's called BDC Channel that you can go into. If you get on the main page, it tells you the top 10 BDCs that are trading at a premium basically compared with their debt to revenue. I like all of these for 2025, every single one of them.
Invest in any of them. Invest often. Any and all.
Now, there's two other areas where people are getting just ridiculous bulges in their pants about. She bulged. She bulged.
Under a Trump administration and that's the financial cryptocurrency. You got financial and cryptocurrency. Both are expected to outperform in 2025 and cryptocurrency is going to blow up.
For financials, I believe it will be the big banks. It won't be the regional banks, the little banks. With less regulation in the financial sector, I expect the big banks to crush the little guys and probably even start buying up the little guys.
Since banking stocks really suck when it comes to yield, you have to actually look at ETFs or closing the funds for this. I looked up a few PFI, IXG, FTXO, DIAX, and IAT. I don't have them in the chart.
Whoopsie daisy. You whiffed. I did.
What are you doing? For the financial ETFs, I like DIAX from a valuation standpoint and I like FTXO because of the collections of big banks in their portfolio. If you go into their portfolio holdings, you'll see that FTXO has Wells Fargo and it has Pinnacle or PNC or something like that. It has the bigger banks.
Bank of America? Bank of America is in there and American Express and shit like that. It probably has also Capital One and Discover possibly? Possibly. I don't remember off the top of my head.
And DIAX is trading at really pretty good valuation, so I like that from a valuation standpoint. I think that has a lot of room to grow. Personally, for me investing, I don't invest in financial stocks too much because I don't care.
I'd rather invest in BDCs. They pay more. But if you want to invest in financial stocks, I would do FTXO.
FTXO, like I said, holds all the big ones. There's cryptocurrency. Aside of holding the actual tokens in your crypto wallet like Bitcoin, Ethereum, Solano, Chainlink, things like that, you have a few different options like BITO, BITO, YBTC, ETHE, GBTC and BKCH.
Basically, just type in crypto. It close-ended funds and ETFs and you come up with a whole bunch of things. And if you remember in 2024, they actually started the Bitcoin and Ethereum ETFs.
That's where these are here. For these, I like BITO a lot, actually. Yeah, BITO is great.
It uses a cover called Bitcoin Strategy. And the reason I like BITO is because pretty much every other Bitcoin ETF dabbles in BITO. They use BITO as their barometer.
So why buy them when you can just buy BITO? So I'd rather just be in BITO than them, yeah. And ETHE and GBTC are other ones to look at because they actually hold Bitcoin and Ethereum. Again, like going back at the AIPI, I actually like ETS and closing the funds that actually hold the actual assets that they're trying to make money off of as opposed to holding like future contracts or other companies' options.
That's my opinion. Let's look at the... I didn't really come up with anything here. Other than BITO has a 57% yield and BITO has been awesome for us.
BITO has been ridiculous. We're up so much. We're up like 500% in BITO and it's only going to get better.
Cryptocurrencies, if you're not familiar, they're basically Trump's claiming to be the most crypto president ever. And he wants to create a Bitcoin reserve. I was going to say, it sounds like he wants to do a Bitcoin reserve as opposed to the gold reserve thing.
So like how we have a gold reserve, like we have billions of pieces of gold in a reserve somewhere. He wants to actually have a government reserve of Bitcoin. Actually, we have a freaking info thingy jig to listen to, so we may have an update for that.
Somebody's got the skinny on that whole thing. Crypto is going to be awesome. Crypto is going to be where people make much money and there's going to be so many millionaires in 2025 that weren't millionaires in 2024 because of crypto.
I'm pretty sure my mom's going to be one of them, which is hilarious considering she's a boomer. Okay. Then the most exciting prediction of 2025, and it could happen in 2024 in the last couple of weeks, is that Starlink is going to IPO.
If you're not familiar with Starlink, Starlink is Elon Musk's solution to the internet network problem. He basically fires satellites up into the sky and to get internet, you basically get a beam down from the satellite as opposed to having the actual cables or the things bouncing around off the cell towers. If you are in an area where it's a pain in the butt to get internet that's affordable and stuff, Starlink is literally revolutionizing these weird outlier places.
My brother's overseas in really remote areas. They have Starlink and he said it's incredible. Anybody who's in the van life community, we're looking at Starlink to add to our van because we're going to be frequenting national forests and you do not get self-service out there.
I have read good things from people's other reviews that Starlink actually gets you internet access, which will be phenomenal because if we can literally go out in the boonies and chill for two plus weeks on end, oh hell yeah. Basically what he did is he created, like if you remember, I'm going to date myself here. Back when Reagan was president, he wanted the Star Wars defense system.
Basically have a bunch of satellites in space that created a net that anytime a missile was fired, the defense network would blow the missile out of the sky. Starlink is similar to that. They basically have a network of satellites strategically placed throughout space so that they can cover the whole planet in like a connectivity net basically.
Instead of needing to rely on towers for connectivity, your connection will just be beamed down from space from a satellite no matter where you are. It's so good that they even have, if you go onto the actual Starlink website, they actually have packages for boats because if you're on a boat, you can get internet and you can stream on a boat. This is going to be a game changer and a great disruption in the force.
AT&T and Verizon are going to get just crushed eventually. We don't know how long that's going to take and it is possible that they may hang around if they adapt or go in or somehow tap the technology with that, but if they do not, it is very possible that Starlink could make them the next taxi to the Uber. Oddly enough, T-Mobile actually has a contract with Starlink, so T-Mobile uses Starlink's satellites.
Is it AT&T or is it T-Mobile? It's T-Mobile. I remember hearing about that forever ago. They got early on the bandwagon because they see the light.
I don't see this happening in 2025 where it's just a great shift where we go from regular internet to space internet, but by 2030, the whole process is going to be vastly different. When I see a lot of people having trouble converting over because if you look into Starlink, buying the hardware is like $400 to $600. That's a pretty big intro price point for people to get started.
I could see it being a slower transition until possibly that actual cost of the hardware comes down. We went over this weeks ago. That's why I was surprised you had CCI up there because CCI is the towers and we were talking about possibly the obsolescence of the towers with the whole Starlink thing.
You have so many boomers that they're not going to keep using Starlink. We're not sure how fast this trend is going to take into place, but this is just something to keep in mind from the macro economic macro trend thing for future. How we're profiting from this is investing in ASTS and STM, both growth stocks, no dividends, nothing.
ASTS is the satellites being launched into space by SpaceX to make Starlink possible. STM is the chips and components inside the satellites for all this to happen. ASTS and STM, if you're not in those, you need to get into those.
Especially before Starlink goes IPO, which is probably going to be really soon. We probably are also going to get into Starlink's IPO. Oh, I'm going to.
Or maybe not the IPO, but we're going to get into it when it comes out because I just see big things. My general thoughts about 2025 is Starlink, crypto, financials, EDCs, healthcare, REITs, AI, data centers, oil, electric companies, and nuclear energy. Those are my nine main areas where I think it's going to just be crazy in 2025.
However, there are miscellaneous aspects also to consider. When looking through everything, you can find that FDX, Federal Express, and UPS are both undervalued and should do well because of e-commerce. Yeah, let's think about it.
They need trucks to deliver stuff. So that makes sense. That's like secondary tier.
Bonds could have a comeback in 2025 based on the interest rates. We just got out of the overvalued bond funds, but we got into PHT, which is undervalued and steeply undervalued. So that's something else to consider.
ARLP, which is not widely known as a fertilizer stock, should do quite nicely as we need to grow more food because there are more people. And the way to do that is with fertilization. UAN, which is not widely known as a coal stock, should do quite nicely in the Trump's not so green economy.
Plus, people are always getting coal. Another area that's cray-cray is flying cars, JOBY and ACHR. They're both flying car stocks.
These are both growth stocks. These other ones up here, they all have dividends. So JOBY and ACHR are just growth stock potential because Musk is so pro-technology and because Musk and Trump are such buddy-buddies now.
I could see the flying car stocks just popping off. AUR, which we mentioned previously, which is the automated trucking stock, is going to have an awesome 2025. But on the side of that, large caps are going to do quite well.
I know a lot of people are expecting small caps to rebound and do better than large caps. I'll actually put my money into either USA or ASG, which are both large cap funds. And SPXX, which is a covered call S&P fund, will be just fine in 2025 as well.
AFCG, which is a pot REIT, should be good. Here's the Nemesis IEP because it's so undervalued now. It's like 80% undervalued.
Are we really dubbing it the Nemesis? Yeah. I feel like we should come up with like a... The Nemesis because it's so undervalued that I can see it actually going up a lot in 2025 because it's too big not to. WIW, which is, if you're not familiar, it is a close-ended fund that mainly deals with inflation protection assets like treasuries and CDs and things of that nature.
Because we don't know exactly what's going to happen with inflation, I see W-I-W as something that could do quite nicely in 2025. So that's like an alternate play as opposed to getting into like treasury or T-bombs, and it yields way, way, way more. I have data on all these.
There's UPS, e-commerce, 4.8% yield, 1813 PE with 2% EPS growth projection, but it's so undervalued right now. The difference between these is EPS is a better dividend, whereas Federal Express has more projected growth plus a cheaper PE, but Federal Express is like $400 some dollars a share, and UPS is like $1.20. So you can get like four shares of this for like one of those. But if you have the money, Federal Express is the better one, even though it has a smaller yield, it's actually more undervalued with more potential growth.
That's crazy. PHT, which is the bond fund, undervalued bond fund, has an 8.3% yield and it's at least 30% undervalued. Whereas all the other bond funds we sold were like 40, 50, 60, 70% overvalued.
I think the one was 100% overvalued. This one's actually vastly undervalued and it holds a good collection of decent bonds. Here's ARLP, the fertilizer stock, 9.92% yield with an 8.47 PE, which is small.
UAN, our coal stock here, 8.2% with a 16.4 PE, which is still undervalued. USA, large cap fund, 9.73% yield, it's 5% overvalued. So it's a little bit too high right now, but if we wait for a pullout, get a par value.
Whereas it's sister ASG has an 8% yield and it's 10% undervalued. So like if you have the money right now and you want to get into something, get into ASG as opposed to USA because of this 15% difference here, that's the potential for 10% price appreciation, even though this one has a higher dividend. Dang.
There's our pot REIT, 13.57% yield. I do believe marijuana and cannabis, or however you want to say it, marijuana or cannabis is going to do nicely under a Trump presidency, even though- Cannawanna. The potential, like most people think that the Republicans don't like it.
It's just so, it's more on the state level now than the federal level. And at some point, the federals are just going to have to say, fine, it's legal. And when they do that, everything that's pot related is going to shoot off.
But 13.57% yield with a 5.48 PE for a REIT is ridiculous. So this is a really good play. There's Icon, the Nemesis, 18% yield.
Would have been nice had we not rode that thing down from the top. There's the flying cars. They're both, they're not making any money yet, but these both are going to shoot off in 2025.
Cool. SPSX, which is the cover call S&P, has a 6.67% yield and it's 5 to 10% undervalued. So if you like the cover call approach, this is an option.
But I mean, if I had to, I literally would just take this one right above it. You get the same discount with a higher yield, plus this holds better companies than SPS. And then here's that WIW.
It yields 8.35%. It's fair value, but you're getting 8% yield. With inflation protection. That's way better than T-bills.
Just covering inflation. As always, if you have cash, you can dump it into bullet shares and wait for any of these things I mentioned to actually reduce the price. Because I think 2025 is going to be volatile with a couple of pullbacks in like the 5 to 10% range where we're going to have a pretty big pullback.
If you have cash, just put it in bullet shares, wait for the pullback and then dump it into whatever you want. Because I do believe overall that the stock market is going to be up in 2025. I'm not near as bullish as I was in 2024 for a multitude of reasons.
If you remember 2024, you had the presidential election year, which the stocks are almost always up. Interest rate cuts were going to happen. And so people are super awesome.
And I think compared to what everybody else is projecting 2025 to go up, Tim's actually conservative with the up, right? Yeah. You're like under. Well, I think because the inflation is going to remain sticky.
By sticky, they want it to be 2% and it's been about 2.5 to 2.7 for months now. Well, technically three if you take out some of the stuff, if you put back in the stuff you shouldn't be taking out. And because Trump promises tariffs, if he implements any tariffs, it's going to hamper earnings and revenue.
So there's factors why I'm not as bullish about 2025 as I was in 2024. I think 2025 is going to be good. I think it's not going to be as good as like an average year.
I'm thinking 5 to 10% gains for the market for the year is good. But there's also potential for a 5 to 10% decline as well. So you have to actually do risk mitigation with your portfolio, but you should be doing this all the time anyways.
So nothing new. My prediction is the markets will yield between 7% and 9% in 2025. So a below average year, but not a disaster year.
But I will tell you that however, 2025 turns out is going to be a harbinger for 2026. If 2025 is down, 2026 could be super bad. If 2025 is up, I think 2026 will be up as well.
But it pays to proceed cautiously. You want to be in stocks that are going to be able to keep paying you income without cutting it. There's only 8 instances since 1950 where we had back-to-back 20% gains, back-to-back years of 20% gains.
In 6 of those 8 instances, the 3rd year return on average 13%. But the 2 of the 8 times that they were down, it was super bad shit, down over 10%. I'm not suggesting to be fearful, but you should have a plan in place for whatever the market does.
So keep that in the back of your mind. There is a 25% chance that we could be down at least 10%. Okay.
So if that is the indicator, you should be turning the drips off in the overvalued stocks to have a cash slush fund so that when stocks drop, you can get in stuff that's on sale. Yeah, you should be doing that. You should be doing that all the time.
That's what I'm saying. You should be doing everything that we've been teaching you. You should be doing it all the time anyway.
So it should help you have a nice buffer of cash in your bullet shares that you can then dump into stuff whenever there is a huge pullback. Because that is one of the hardest parts and something we even have issues with still is just having enough capital on hand when one of these things goes juicy bottom. You're like, oh, I want that.
I gave you so many tickers. I think there's 57 or something like that tickers. I'll clean up his chart a little bit and then I'll post a link to it in the show notes for you.
But like the bolded ones are the ones that I recommend before the other ones. So those are Tim's top picks, but you definitely can do anything inside the things he found. Yeah, that is my projections for 2025.
It's going to be an interesting year and I think it's going to start off with the bang. I think January is going to be pretty good, but then who the hell knows what's going to happen after Trump's inaugurated. If he starts doing tariffs, the market could tank pretty quickly.
Oh, and I want you to repeat your comment that you said to me earlier about how you think the Christmas rally is actually in early. There's generally a Santa Claus rally for the most part. I think that's already happened.
I think the post-election jubilation went up a lot and I think we went up like seven or eight percent since November 4th. I don't think the Santa Claus rally is going to happen. If you're new, Santa Claus rally is the last trading week of the month that stocks are generally up between one and two percent.
I don't think that's happening this year because the markets are up so much. I think the markets are going to be extremely volatile that last week and there's going to be a lot of the stuff we mentioned in the last podcast, the tax harvesting, which is going to actually keep the stock prices down. I actually think the last week of December is going to be a down week.
Yeah, I think that makes a lot of sense. We'll see what happens, but that does make a lot of sense from a grinder scheme's perspective. But that's everything I got for that.
Next week, next podcast is going to be my whoopsie daisies for 2024. You're going to want to tune in for that because you'll get to see the stuff that we messed up in, how we messed up in it, what our learnings things were, and why we suck at getting out of the top of growth stocks. I'm not very good at that.
I'm awesome at getting in but getting out. That's why we like the dividend approach because you don't have to worry about selling. So that's next weeks. Alright guys. See you next week.