Video summary

More Weakness Ahead? Kevin Mahn Says Buy These 7 Stocks

Main summary

Key takeaways

Finance

Macro / Market Backdrop & Outlook

Why he’s still bullish (long-term)

  • Ongoing US–Iran conflict escalation; the Strait of Hormuz remains not open.
  • Oil near/above $100 per barrel (Brent “hit $100”).
  • Inflation risk remains:
    • Two key inflation reports are “this week.”
    • Inflation expected to stay above 3% vs the Fed target of 2%, implying policy takes time to normalize.
  • Midterm elections in November could increase volatility due to expected “balance of power” shifts in Washington.

Expected near-term volatility (but not a major correction)

  • Expects intermittent pullbacks over the next 1.5–2 months.
  • Typical pattern described:
    • Down 300–500 S&P points
    • Bounce as investors “nibble”
    • Further pullbacks as tensions/oil/Fed uncertainty persist
  • Argues earnings growth is the key force preventing a “more serious correction.”

Correction risk threshold (rule of thumb)

  • If there are 2–3 consecutive days of meaningful pullbacks of about 1.5% to 2% each, and dips aren’t met with buyers returning from the sidelines, then a more serious correction becomes more likely (though still not a long-term one).

Rates / Fed / Probability Callouts

  • FedWatch:
    • 62% chance the Fed hikes next week
    • 38% chance they do nothing
  • 10-year yield level: cites ~4.2% (stated as “42,” interpreted as 4.2%), the highest since Nov 2023.
  • Base-case on the path: yields could eventually come down 25–50 bps next year.
  • How markets absorb hikes:
    • Says markets can absorb a 25 bps hike.
    • Would be more surprised if hikes continue in October and December or if:
      • 10-year pushes above 5%
      • 30-year approaches ~5.75–6%
  • Strategy reaction to a hike:
    • A 25 bps hike alone would not change his strategy.
    • Only more hawkish guidance would likely shift allocations.

Key Investing Framework / Behavior Guidance

“Time in the market, not timing the market”

  • Backed by a study:
    • Hartford study referenced: missing the 10 best days in a 20-year period halves returns.
    • Missing the 30 best days reduces returns by 84%.

Cash / “dry powder” guidance

  • If someone needs an emergency fund: keep ~6 months of earnings in cash.
  • For market investing cash:
    • Cautions against trying to predict “lower levels.”
    • Notes historically best days often come after worst days—cash can be deployed after heavy selloffs.

When to get cautious (explicit warning condition)

Consider becoming more cautious if:

  • Oil goes above $120/barrel, and especially if it stays elevated for an extended period.

Mechanism:

  • Higher gasoline costs reduce consumer spending (consumer is ~70% of economic growth).
  • Fed may be constrained because inflation may remain high.

Stock / Sector Picks & Specific Instruments Mentioned

AI Ecosystem / Infrastructure (core theme)

  • NVIDIA (NVDA)
    • Called “top stock for new money.”
    • Strong emphasis: “Always buy Nvidia” (rapid-fire).
  • Micron (MU)
    • Liked, and described as not “too expensive.”
    • Notes:
      • Stock up over 600% over the last year
      • Forward P/E ~6x
  • Palantir (PLTR)
    • Likes the business.
    • Hard to chase at “those types of multiples,” but would like it more if it “comes in.”
  • Alphabet (GOOGL/GOOG)
    • Listed as one of his top names.
    • Also favored in a post-earnings software context.
  • Taiwan Semiconductor (TSM)
    • Likes it.
    • Cites ~70% market share for their dedicated chip foundry role (as stated).

Semis / Infrastructure Real Estate

  • Digital Realty (DLR)
    • Listed as a top name (though he’s not certain it’s his favorite REIT within the data-center theme).

Utilities / “Backdoor AI” Exposure

  • Sector: Utilities
    • Explicitly said to be “underperforming” and “flat” vs last year.
  • ETF: XLU (Utilities Select Sector SPDR)
  • Individual utilities:
    • American Electric Power (AEP)
    • Duke Energy (DUK)
    • NextEra Energy (NEE)
  • Nuclear component noted as important to AI:
    • Utilities that own nuclear power plants are called “key.”
  • Rapid-fire “best place to hide if volatility spikes”:
    • Utility sector
  • Rapid-fire “one stock… with no hesitation” (non-Nvidia/Micron):
    • American Electric Power (AEP)

Why utilities now (as stated):

  • Dividends support after bond yield rise
  • Oil/gas volatility supports a more defensive tilt
  • Less “rich” than last year

Aerospace & Defense (core theme)

  • Raytheon / RTX
    • Mentions Tomahawk missiles
    • Collins Aerospace / Pratt & Whitney referenced in the RTX context
  • Moog (MOG.A)
    • Framed as diversified across space and defense
  • Framed as exposure for 2026 and the next decade

Cybersecurity / AI Defense Overlay

  • CrowdStrike (CRWD)
  • Fortinet (FTNT)
  • Belief:
    • They use AI to thwart AI attacks
    • Trading under value with potential “catch-up” upside

Biotech / Healthcare

  • Notes biotech M&A is accelerating.
  • Mentions:
    • Certain biotechs remain attractive in small caps
    • Large-cap pharma acquisitions may be less dependent on high-rate credit (as stated)

Bonds (Macro Hedge / Income)

  • Says he still likes bonds, citing inverse relationship between yields and bond prices.
  • Belief:
    • If yields come back down, current bond prices may offer attractive total return plus coupon income
  • No specific bond ticker/fund provided in the excerpt.

Valuation / Multiples / Performance Numbers Explicitly Cited

  • Oil
    • Near $100/bbl
    • Brent “hit $100”
    • Caution threshold: $120/bbl
  • Inflation
    • Expected above 3%
    • Fed target: 2%
  • Market timing horizon
    • Volatility window: next month and a half to 2 months
  • S&P 500
    • About 2% away from all-time highs
    • Pullback pattern: down 300–500 points
  • Rate levels
    • 10-year yield ~4.2% (stated as “42”)
    • Concern if:
      • 10-year > 5%
      • 30-year ~5.75–6%
  • AI spending
    • $1 trillion spent “this year” on AI infrastructure (as stated)
    • Jensen Huang forecasting $3–4 trillion by end of decade (as stated)
  • Micron
    • Up >600% over last year
    • Forward P/E ~6x
  • Utilities / data-center basket
    • His 7 names equally weighted are “up roughly 60% year-to-date” through September 4th

Explicit Recommendations / Cautions (Actionable)

Core allocation stance

  • Repeatedly implies staying invested and buying dips rather than attempting sideline timing.

Volatility / correction management

  • Buy pullbacks of roughly ~1% to 1.5%.
  • Watch for a more serious correction if:
    • 2–3 consecutive days of declines of about ~1.5%–2%
    • and dip-buyers don’t return.

Oil risk condition

  • Become more cautious if oil sustains above $120:
    • Consumer spending pressure
    • Fed constrained by persistently high inflation

“Where to put fresh money” (where best opportunities were implied)

  • Primary themes:
    • AI infrastructure
    • Aerospace & defense
  • Defensive / income / “backdoor AI” tilt:
    • Utilities
  • Macro hedge / income:
    • Bonds if yields normalize

Disclosures / Disclaimers

  • No explicit “not financial advice” disclaimer appears in the provided subtitles excerpt.
  • He does state: “None of us here have a crystal ball,” and advises diversification aligned with risk tolerance.

Presenters / Sources

  • Kevin Mann — President and Chief Investment Officer, Hennion & Walsh Asset Management
  • Caroline — interviewer (name not provided in the excerpt)
  • Hartford study — referenced for the impact of missing best trading days
  • Mentions of Jensen Huang as the forecast source for AI spend

Original video