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In today's segment of Good Buy or Goodbye, host Julie Hyman is joined by Tolou Capital Management founder and chief investment officer Spencer Hakimian to evaluate his top investment pick and which stock to steer clear of.
Hakimian recommends JPMorgan (JPM) as a buy, citing three key factors.
First, he anticipates the new Trump administration will implement lighter banking regulations, potentially boosting the company's profitability.
Second, he points to proposed tax cuts, explaining, "At the end of the day, a tax cut will one way or another lead to extra deposits that will flow to all banks," with JPMorgan positioned to capture a significant portion as the industry's largest bank.
Finally, Hakimian views the persistent high interest rate environment as highly favorable for banking operations, allowing institutions to earn "a very nice interest" in their lending activities.
Conversely, Hakimian cautions investors against buying homebuilding company D.R. Horton (DHI) stock. He identifies a concerning oversupply in Sun Belt markets that emerged "in the aftermath of COVID" as people left northeastern states in favor of states like Florida and Texas, to which builders responded with "excess inventory." This inventory surplus can force price reductions that compress profit margins.
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Additionally, Hakimian warns that evolving political policies on tariffs and immigration might impact housing prices and demand.
Lastly, he emphasizes that elevated interest rates continue to suppress new home purchases, with consumers increasingly favoring existing properties over new construction.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
This post was written by Angel Smith