Kevin Simpson
Appearances
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I wear the Meta Ray-Bans, and I swear by them. So not that that's a reason to buy a stock, but they're super cool.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So NVIDIA also a pretty good buying opportunity here. The problem is everyone already owns it. And you think like, gee, it was just 150. Now it's 110 or so. Should we buy more? Can it go to 90? Can it go to 80? It could. It could.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So the thought process there is, again, you're just trying to continue to buy it at valuations that make a lot more sense because looking at their earnings, people get freaked out because it's not 200% growth. But 30 to 60% growth is really, really good. You know, Apple's growth is maybe 9%. NVIDIA's growth is probably 20% to 30% when you kind of take away some of the hype.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
And this is a CEO that has this pulse on what's happening with the future. I wish they paid more of a dividend. They do pay one penny a quarter. To me, that's a rounding error down to zero. But for anyone on the planet besides me that doesn't own it, you can certainly start buying shares here at this level.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Because dividend managers can then say it pays a dividend. They can put it in their strategy. I think that's cheating.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Yeah, even more so. It's like the... The Deep Seek is like in Iron Man 1 when Tony Stark built his suit of armor out of a box of scraps in a cave. That was a movie. Deep Seek didn't build their Iron Man suit in a cave with a box of scraps. They took open source material and they probably have NVIDIA servers in other countries.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So I don't think that the $6 million price tag was as accurate now in hindsight as maybe it was the day the news came out.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Well, it's hard to pretend because you don't know what the financials look like. So I want to see profitability. And I know that at this point, they're not. profitable, at least to what they tell us. But if you look at their user base to what they do report, I mean, it's amazing the exponential users that are out there. I use ChatGPT.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I find it to be pretty helpful in consolidating a lot of the things that I'm thinking about. It makes it a little bit more concise. Some of my team members use Gronk and some use Perplexity, but For us, we're able to really use artificial intelligence in our work to simplify. I'll give you a great example. So in the old days, maybe like six months ago, I would have to listen to an earnings call.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
And maybe that would take 45 minutes of my time for all these companies. Now we can have the AI listen to the call, give us a complete transcript, and then a four to seven minute read of a synopsis to which we can then cite the data that we want to see.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So rather than spending 45 minutes somewhat zoning off at times or dozing off at least with some boring calls, we can get that information and be a lot more efficient. So I think that there's tremendous opportunities with AI and for those people that own open AI in the private sector. I think that there's lots and lots of upside down the road.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
On Friday, Perplexity had a report that they were doing another fundraiser, which was going to be 6X of what it was last year. So congratulations to your husband.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I think that we have to see if the accounting irregularities are really something that was not as horrific as maybe initially thought. when you see an auditor quit, that's a really bad sign. Now, I know they have another accounting firm that's in there. I know they're reporting and trying to get all of their listing and filings up to speed and up to date. Certainly, there's room.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I mean, absolutely, there is. I'm not sure if that is the one, but from an investment thesis, I would not be an investor until we see what the actual accounting numbers look like. So A little bit sketchy there, but sometimes the higher risk can be the highest reward. So that if things are all kosher on the other side, then those investors who took that risk will be well rewarded.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I don't take risk, but I'm wealthy because I do it slowly.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Well, there's no valuation stamp, like there's no valuation case for it. It is not a fundamental story in which you would invest in a car company that trades at that multiple. So they're at a crossroads. Either the company is going to pivot into a multi-factor, to your point, AI, autonomous driving, energy company that warrants that multiple and isn't dependent upon car sales exclusively.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Thanks for having me, Nicole. Great to see you.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
If not, then you own a car company with an insanely high multiple and that would not last. So I like the thought process of owning Tesla because I think that those things are just so awesome and neat down the road. And if you do own Supermicro or you do own Tesla, you can write calls against it and generate massive, massive premiums.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So I don't know exactly what the future holds from the standpoint of the car company, but very, very excited about what the future holds for the other aspects of those companies.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Hopefully there's not that many Cybertrucks. Yeah, I don't know that that's really a reason to buy. I don't think Cybertruck's a reason to buy or sell the stock. So if that's the headline concern, I wouldn't let that weigh on your thesis.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I think people that are really into Elon are really into the Elon ecostructure, much like you had, and we've talked a second ago about open AI in the private markets. You can invest in XXAI. Certainly SpaceX might be the most highly valued of privately held companies. So there are there's a lot of incestuous relationships, I guess, between these companies and how it all plays out down the road.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
It's so much about emotions, and that's the problem. For better or for worse, I've been in this industry for over three decades. And in the old days, we would experience one or two 10% pullbacks, almost like clockwork. And it seemed like every other year, we'd have a 20% pullback. Very often, it wouldn't be in the Gregarion calendar where you'd have it start to finish, peak to trough 20% downturn.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I'm not certain of it, but I think the people that believe in Elon have been rewarded so far. And I know that right now there's a lot of headline political things that go on and can be very, very divisive. But at the at the end of the day, you want to look at the companies and the company's profitability. And he's had tremendous success as a business person.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So we talked in August and I was excited about Apple because of the Apple intelligence that was going to come out. And I saw all the cool commercials and all the hype around it. I sold my Apple in December at $247 because it never came out. There was no super cycle for the 16. There was no artificial intelligence. And then very recently, it's been pushed back again, probably till next year.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
which took the stock down from 250 to 210. So we're buyers again here at the 213, 214 level. I do think that there's going to be a little bit of a period of kind of range bound trading and then some volatility based on the disappointment of the fact that series never worked and now it still won't. I believe in the company down the road.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I know how the software business model for the services is a cash machine. They make $110 billion a year, not on iPhone sales, just from services. And they take that $110 billion and they buy their shares back to reduce the float. So if you don't own Apple or you're worried about it down at the $200 level, I'm a buyer here and I was a seller at $250 in December.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So I'm less enthusiastic than I was in April, but I'm buying the stock now.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Yeah, it's probably a beneficiary of those passive flows also. Every time we contribute to our 401ks in an index fund, we're buying shares of Apple in a big way. It's a great point.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
If you wanted to roll the dice and you want to be a speculator that on April 2nd, when we have the big tariff reciprocal day and we find out that we were just kidding, then you're going to see a big bounce in FedEx and probably UPS because FedEx Why wouldn't you?
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
If you believe that there will be some type of tariffs, maybe not as massive as the headlines are suggesting, but you're still concerned about tariffs as a reality, you may want to hold off on FedEx. We used to own UPS. We haven't owned it in about two years and probably haven't owned FedEx in about six or seven years, although it did really, really well for a stretch recently.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I think I would probably stay away from it until we get a little bit more clarity next month on tariffs.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I agree with you.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I just think about 2018. We had a little bit of a peek into the playbook. You have a reasonable negotiating stance when you put a big tariff out there and all you can do is negotiate down. You can't start at zero and negotiate up. In 2018, there were lots of things with the tariffs that were exceptions or exemptions and things could really flow through.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
But throughout the course of a year, it was very commonplace. So I feel like today, maybe we've been spoiled because the past two years were so good. But I think investors are freaking out a little bit. But we're only down maybe 10%, if that. Some stocks, certainly more so than others. But on a grander scale, I mean, I think things are OK.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I think the Apple iPhone was probably one of them back in 2018. But there was a 20% pull down in the stock market at that point. The Fed was actually in a rate hiking cycle at that moment. We're in much better shape here, I think, than we were from an economic standpoint than we were in 2018. So when you think of tariffs, and again, like anything political, you're just like one side or the other.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
There's no agreement ever, except for the fact that if you look at what other countries put tariffs on the U.S. and what some of those levels look like, you might think, well, maybe things should be a little bit more fair. Maybe that's something where we all kind of come together and agree on.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Well, I think we talked about the Q's, which was kind of a weird thing for me to talk about. But the fact that it has tremendous volatility is something that I like down here. But if you want a single ticker name, this is risky. This is not a dividend payer. This is not for people in my conservative tilt of investing.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
But for your viewers, knowing that they're hip, young, and cool, everything I'm not, I would look at Robinhood at these levels down here because I think this is a company that at one point was treated as a meme stock and is just doing so many things to educate investors on the proper way of investing. It's not just gamification, but it's investing.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
They've acquired an RIA that I think is going to help for generational transfer of wealth down the road. And if you're looking for a stock that I think is a diamond in the rough that you can also write calls against, but it's not a dividend payer. I think Robinhood's a real neat company to take a look at down here.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
We're not going into a recession. Don't sell anything. If you have a little bit of money, put it to work. If the stock market goes down another 10%, put more money to work. Absolutely do not sell. You're young. You have a long period of time. You own great investments. And I've seen so many 20% pullbacks.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
And I just wish I would have had money to put to work at those points in time when I was younger. But the greatest mistake that I didn't make was trying to be smart enough to time it. I was not smart enough 32 years ago when I started. I am not smart enough now. but take these opportunities to put money to work and don't freak out.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
No, no, we had the same type of whiplash. What we didn't have was 24 hour social media. So we didn't know what was happening all the time. I mean, Even from a Fed perspective, if the Fed cut rates or they would hike rates, you know, we didn't know about it for a couple of days, maybe a week until we read it in the Wall Street Journal.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
The problem when we have volatility today is that we just feel it so intensely because we can't escape it. And that's fine. That's OK. It's just how do we mentally overcome markets when they turn down? And what do we do about it to make successful investment decisions?
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
No, no. And you're going to hear words like recession and stagflation and very, very scary things out there. But the resiliency of the labor market makes me a lot less concerned about a recession. Someday we'll have them. It's part of a normal economic cycle. When you look at the economy right now, we still have a GDP that's expanding, even though it's not expanding rapidly.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Again, the labor market is what I'm hanging my hat on as being something that's super resilient. We have CPI and PPI that didn't really freak anyone out from an inflation standpoint. And you have a Fed that last week was saying that they're there to step in with rate cuts if necessary, looking at both the labor market inflation and the broader economy. So you have a Fed put.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Problem is you don't have a Fed put here at these levels. It could be another 10 percent down before they kind of step in with the white horses. So we're not we're not through the we're not through the end of this yet because there's so much uncertainty. But I'm not overly concerned just yet about any of the real problems. brand long-term grind out bear markets.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
No, I don't think we've hit the bottom, but I don't necessarily care from the perspective of thinking about it like this way. Maybe we're halfway done. So if you have a 20% roll down and then you have a bear market like pullback, which again isn't the end of the world considering how much things have gone up. If we're halfway through it, you can start to invest a little bit now.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
and continue to do so over the course of the next year, thinking that dollar cost averaging will allow you to kind of lean into that volatility. And if we're wrong, and this is the bottom, well, great, we've put some money to work here.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
The biggest mistake that any investor can make, even us as professionals, is to start thinking that we can time the market, that we wanna be so clever that we wanna kind of maybe get out now and try to call a bottom, because it's very, very difficult to do that. And I'm certainly not gonna try.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
We did. I mean, we bought J.P. Morgan, which was, again, kind of thinking that we're talking here on Monday and it's a week or so removed. But J.P. Morgan was down 17 percent. I mean, we bought more. A really good company. We actually bought some of the Qs.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Now, that's not part of our dividend strategy, but really looking at things that had come down so much that you could write covered calls on, really good opportunity there. Wait, wait, wait.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Yes. So we have a, you know, you know, of us in our flagship dividend strategy, we were right covered calls, very boring, you know, number one for volatility or risk. We recently launched in August, a more aggressive growth strategy. The symbol of the ETF is QDVO. And within that growth strategy, we actually bought some of the QQQ.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
We actually bought the NASDAQ just thinking that it's a pure bounce from a technical standpoint. You've got a pure bounce there. Plus, we can write calls against it. I still have a lot of cash. So if I'm early, we can continue to put things to work. But we're buyers at these levels across the board where there's good reason to be. Profits, solid valuations, and projected growth.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Very, very modest hedging. Yeah, I don't want to overstate it as being something that's going to really protect the downside, but it does a little bit and it helps to smooth out the ride. And maybe the next month or two, we can just dedicate a show and talking about what covered call writing is because let's play like let's play out the volatility and say, OK, well, we have a new administration.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Things were kind of calm for two years. Now, all of a sudden we have a constant overload of information that's causing this volatility. Maybe that continues for the next couple of years. In a range bound market, convert calls can be a really helpful way to buffer some of that volatility and also generate a little cashflow.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
No, I had my, I told you some moment on dividend paying stocks in like the year 2000 and the early 2000s. I'll tell you a very brief, funny story. But first the idea that you're mentioning dividends and dividend reinvestment and the power of compounding, that's true wealth creation. I mean, that's how we become really, really rich over time. But I remember in 1998, I was fired by someone.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
This was during the dot-com bubble. It was a really sweet, like nice lady that said she wouldn't refer me to her worst enemy. And I was like, that's pretty harsh. And the reason was I bought Merck, M-R-K. I put her in an investment that I thought was a quality dividend payer in 1998, Merck.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
And she wanted to own Lucent Technologies, which was a much more high-flying tech stock, very similar to some of the medium or dot-com stocks that went by the wayside. In fact, this was one that did just that. But it was like a $100 stock. They didn't really make any money. And I thought that it was a little bit outside of her risk profile. And maybe the stock was around $100, $105.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
And within a year, I think it went down to like $65. And I felt very much like that was my aha moment in those early times. But yeah, dividend stocks never really go out of favor. They just become less popular when NVIDIA doubles every day. And then all of a sudden value plays a little bit more of an important role in people's portfolios.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Well, I think they both know more than we do. So I will be too humble to compare myself to either one. But certainly Jamie, I mean, has an inside track on JP Morgan, but it seems like he's always telling us not to buy it. And the stock always seems to go higher for the most part. So if I was buying it in August here, I am buying it again in March. We've owned it for 13 years.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I really like the position. The cash stockpile that Warren Buffett has within Berkshire is very interesting. Is that a macro call and we'll see a sell-off and then they'll look like geniuses once again? I mean, that possibility certainly exists. It's also very possible that they're making acquisitions and purchasing shares now on this pullback that we'll find out about in their next filing.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
So I think it's always great to have cash on the sideline. It's easy for us as professionals to do that because we're always generating cash. We're trimming things. We're bringing in call premiums. We're collecting dividends. And to your point, that's not always the position that the retail investor is in.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
As we're building portfolios, when we're newer to investing, we don't have that luxury all the time. So I think that the lesson of dividend reinvestment and securing a drip is something that I've literally practiced for over 30 years. There's nothing really that... I would own it. That wouldn't give me that dividend reinvestment ability for my investment portfolio. And I will give you a statistic.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
I know no one likes to hear stats, but since 1926, so for almost 100 years, the S&P 500 has generated 10.2% per year, which is a great return. That's why we invest. That's why you teach people so wonderfully in the way that you do to get them motivated to start investing. 10.2% a year is really, really powerful.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Of that return for almost 100 years, 39% of it, almost 40% comes from dividends and distributions reinvested. If the market's up 30%, we feel like geniuses. If it's down 30%, you and I are probably talking when you jump off a bridge or at least we feel like we might want to. But overall, it's that power of dollar cost averaging, compounding and dividend reinvestment that is the secret to investing.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
Don't be fooled by our multiple screens. You know, it's very, very hard to separate that emotion from it. I mean, we have to think of everything as a math equation. We look for companies that are profitable businesses, and if they can earn more money next year than they did this year, in all likelihood, their share price will trend in the right direction over time. Investing is really easy.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
But the application of trading, knowing when to buy, when to sell, when to move in, when to kind of dial back a little bit, that part can be just incredibly emotional. And if you let the emotions bleed into the decisions, that's when you're more apt to make a mistake. So for us, it's always thinking like, well, if it's down 10%, we'll put some money to work.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
If it's down 20, we'll put a lot more to work. And that's a hard thing to separate the emotion from it.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
That's my favorite stock. I mean, I'm absolutely bullish. It had a 20-day run where it just seemed like it couldn't go down, and it definitely got higher than the valuation deserved and warranted. Now that it's pulled back, it's absolutely a buy. The reason it's pulled back is because investors are fearful of advertising pullbacks, which would affect Meta's profitability.
Money Rehab with Nicole Lapin
What Professional Investors Are Doing Right Now with Kevin Simpson
But from a Mag7 valuation standpoint, maybe NVIDIA is close, but this is very, very reasonably priced. They pay a dividend now, which is why we like it. They just had a modest dividend increase recently. For the past three years, they've been buying back shares, so they've reduced the float. This is also a stock that's getting into hardware to compete with Apple.