Sentiment, Valuations, Volatility and Earnings

The Prudent Speculator Weekly Commentary is expertly curated every week as a valuable resource for stock market news, investing tips, business insights, and economic trends as it relates to value stock investing. In this week’s Market Commentary, we discuss Earnings, Economy, Volatility and more Stock News. We also include a short preview of our specific stock picks for the week, the entire list is available only to our community of loyal subscribers.

Executive Summary

Webinar – Dividends & Diversification Wednesday at 11:00 Pacific

Newsletter Trades – 1 Sell Across 4 Accounts

Sentiment – AAII Buy Signal

History – Shutdowns, Tariffs & Fed and Stock Returns

Volatility – Stocks Go Up and Down, but Long-Term Trend Is Up

Valuations – Reasonable Metrics for our Portfolios

Earnings – Solid Growth Still the Forecast

Stock News – Updates on eight stocks across six different sectors

Webinar – Dividends & Diversification Wednesday at 11:00 Pacific

We are looking forward to our latest Webinar this Wednesday, November 19, at 11:00 AM Pacific; 2:00 PM Eastern.

We hope readers will join us for Dividends & Diversification: Practical Strategies for Putting Capital to Work Across a Broadly Diversified Portfolio.

The link to sign up is here: Webinar Registration – Zoom

Sentiment – AAII Buy Signal

The equity markets endured a roller-coaster ride over the past five trading sessions, with a nice rally early in the week giving way to a sizable selloff at the end. With stocks historically climbing a Wall of Worry,

the contrarian in us might blame the pullback on Michael Burry, of “The Big Short” fame, who revealed that he not only had closed out his Bearish put-option positions on a couple of popular A.I. plays, but he was also shutting down his hedge fund!

After all, we much prefer when the media is focused on negativity,

as decades of evidence shows that it can pay off nicely to be greedy when others are fearful,

which, believe it or not, is what the latest Bull-Bear Sentiment Survey from the American Association of Individual Investors is showing with a contrarian buy signal generated by the preponderance of pessimism.

Of course, when all was said and done last week, the Russell 3000 Value Index was virtually unchanged, registering one of its least volatile weeks ever,

and providing yet another reminder that a longer-term investment focus can lead to much more peaceful slumber.

History – Shutdowns, Tariffs & Fed and Stock Returns

Though the historical evidence shows that stocks, on average, have performed well on a go-forward basis the 21 times Uncle Sam has closed for business,

one might have thought investors would be more optimistic that the Senate and House finally reached an agreement to end the longest government shutdown in history, while news on the trade front continued to be not as bad as feared, with word coming late Friday of a reduction in duties on bananas, beef, coffee and other food imports, and a lowering of levies on Switzerland.

but we realize that traders last week ratcheted back their wagers on the speed of interest rate cuts from the Federal Reserve,

though stocks have performed fine, on average, no matter if America’s central bank is easing or tightening monetary policy.

Volatility – Stocks Go Up and Down, but Long-Term Trend Is Up

No doubt, anything can happen in the short run, as modest setbacks like the one witnessed last week are part of the positive long-term investment equation, with much larger 5% drops happening 3 times per year on average,

while 10% corrections are also a normal occurrence,

and even 20% skids have happened every 3-plus years,

but those who claim we are overdue for a Bear Market (the last “official” one was in 2022) conveniently forget that we had one, albeit “unofficial, just seven months ago as they somehow think that what happens when the markets are open doesn’t count!

Not surprisingly, even though the futures are suggesting a mixed opening when trading reopens and we are always subject to headline risk,

Valuations – Reasonable Metrics for our Portfolios

we see no reason to alter our optimism for the long-term prospects of our broadly diversified portfolios of undervalued stocks,

Earnings – Solid Growth Still the Forecast

as Q3 corporate profits generally were terrific and the outlook for Q4 and 2026 EPS growth is solid,

with equities historically needing an earnings recession to suffer a sustained selloff.

We also like that there remains a mountain of money parked on the sidelines,

and that we are in the seasonally favorable six months of the year,

and that returns on Value stocks in general, while still very good, have been lower than the historical norm over the last 10 and 20 years.

Stock News – Updates on sixteen stocks across nine different sectors

Keeping in mind that all stocks are rated as a “Buy” until such time as they are a “Sell,” a listing of all current recommendations is available for download via the following link: https://theprudentspeculator.com/dashboard/. We also offer the reminder that any sales we make for our newsletter strategies are announced via our Sales Alerts. Jason Clark, Chris Quigley and Zack Tart take a look at earnings reports and other market-moving news of note out last week for more than a few of our recommendations.