Worst Quarter in 4 Years, Oil vs Stocks, Win Rates From Buying Corrections, the Case for T and VZ

The Compound and Friends podcast delivers a high-energy, data-driven market analysis following one of the worst quarters for stocks in four years. Hosts Michael Batnick and Josh Brown dissect the recent market volatility, driven by geopolitical tensions in the Middle East, particularly around Iran and the Strait of Hormuz, which triggered a dramatic 1,000-point Dow rally on speculation of de-escalation. They critique the market's overreaction to headlines while emphasizing that earnings remain strong—S&P 500 companies are on track for double-digit earnings growth—and that the current sell-off is largely due to multiple compression, not deteriorating fundamentals. The hosts highlight the divergence between falling stock prices and rising earnings estimates, calling it a 'dislocation' that creates rare buying opportunities. They explore 'fat pitches'—deeply discounted stocks with strong long-term potential—in software (IGV), AI leaders (NVIDIA, Oracle), consumer finance (American Express), and telecom (AT&T, Verizon), arguing that these sectors offer defensive, yield-generating, and AI-adjacent value. The episode also covers the failure of the traditional 60-40 portfolio in rising rate environments and the rise of speculative public proxies for private companies like SpaceX, which have seen extreme volatility. Finally, they reinforce the long-term power of buying after market corrections, citing historical win rates of over 90% for investors who bought after 10%+ drops. Key takeaways include: 1) Earnings are still strong despite market pessimism—this is not a bear market driven by fundamentals; 2) The current sell-off is primarily due to multiple contraction, not earnings decline; 3) 'Fat pitches' exist in software, AI infrastructure, and defensive telecom stocks; 4) The 60-40 portfolio is failing in high-rate environments, making private credit and yield-oriented assets more relevant; 5) Historical data shows that buying after sharp corrections leads to high win rates over 1-, 3-, and 5-year horizons; 6) The market's breadth is misleading—most stocks are down, but a few mega-cap names are dragging the index; 7) AT&T and Verizon are now lean, focused, and well-positioned for AI-driven demand; 8) Investors should focus on businesses, not macro noise, and avoid panic selling during temporary volatility.