This article is based on TheStreet’s Stock & Markets Podcast. Hosted by the veteran Wall Street investor Chris Versace, the weekly podcasts are available early to members of TheStreetPro investing club.
If you see a freight train heading straight for you, the first thing you want to do is get off the tracks.
This simple but important bit of advice is brought to you by TheStreet Pro contributor Bob Lang, who chose the choo-choo analogy to describe the current state of the stock market during the Sept. 24 edition of TheStreet Stocks and Markets Podcast.
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“We’ve seen stocks in this market defy gravity and stay up for a long period of time,” Lang told Chris Versace, lead manager of TheStreet Pro’s Portfolio. “And anybody who wants to step in front of a freight train, be my guest, because that thing is going to run you over in a big way.”
“And that’s what this market is doing, and it’s making fools of people who call the top in the market and say, ‘that’s enough.’ They just get run over day after day after day.'”
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TheStreet Pro’s Lang: Banks in a good place
Lang, founder and chief options analyst at Aztec Capital, says that one day the naysayers will be right.
“But you know what?” he said. “This isn’t a game where we’re ‘it’s all about the boy who cried wolf.’ It’s about identifying the trend and staying with that trend for as long as it goes.”
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Versace mentioned the so-called Magnificent 7, a collection of top tech names including Nvidia (NVDA) , Microsoft (MSFT)  and Apple (AAPL) . The group has been a significant driver for the S&P 500.
“If we start to see those names being overheated and starting to roll over from price action or something like that, is that a warning sign for you?” Versace asked.
“I don’t necessarily think that if people stop investing … in the Mag 7 stocks that it’s going to have a negative effect on the market because that money that’s coming out of those stocks is going to find itself another home, probably in small-cap stocks, maybe the midcap stocks, but it’s going to find in a new spot, but still in the market.”
Lang said banks are in a really good place, and he mentioned such mainstays as Bank of America (BAC)  and Morgan Stanley (MS) , which recently hit an all-time high.
“I think that these stocks have much more runway left to go to the end of the year, especially with a favorable Fed and favorable monetary policy,” he said. “And you’ve got some deregulation coming up very, very soon. That’s going to be extremely helpful for them.”
Lang said he also liked the private equity firms, such as Apollo Global (APO) , Carlyle Group (CG) , KKR (KKR) , and Blackstone (BX) .
“I think that group, along with the banks and maybe some of the regional banks as well, are going to be huge top performers into the end of this year,” he said.
TheStreet Pro’s Lang weighs in on retail, Nvidia
Versace asked whether Lang would favor Walmart (WMT)  or Amazon (AMZN)  through the end of the year.
Related: Nvidia OpenAI blockbuster deal raises major questions
“I’d like to have Amazon. It’s a little bit more diversified than Walmart,” he said, citing the e-commerce giant’s deal with the National Football League, and noting that the company’s studio is “a very underrated asset.”
“Amazon Prime membership is much more valuable than anything that the Walmart has,” Lang said. “You just don’t get the same things that you do with Amazon Prime that you do with the Walmart membership.
He also picked portfolio American Express (AXP)  over Visa (V) , saying that he liked what “American Express has done here with raising prices, at the right time.
“It’s really tied to transaction volumes,” Versace said. “American Express, about 70% of their pretax income comes from membership card fees. So, they’ve continued to grow that.”
Nvidia’s (NVDA) name came up and while Lang said he liked the AI-chip giant, the company is “priced all the way out for at least two years.”
“In 2024, the stock went bananas and it rewarded shareholders,” he said. “[They’re] an innovative company; don’t get me wrong. But I think there’s other companies out there like Broadcom (AVGO)  or perhaps American [Superconductor] (AMSC) . Maybe even [Advanced Micro Devices] (AMD)  might be able to catch up a little bit.”
He also mentioned Celestica (CLS) , an electronics manufacturing services company that is heavily involved in the semiconductor supply chain.
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