all right so in the first part of this

video we said that although we are in

the second year of the boom market and

there's over 90% probability that the

market will end higher this year the

market cannot go up in a straight line

the market has been relentlessly going

up almost in a straight line for the

last 3 to four months so there will be

Corrections along the way that we need

to be psychologically prepared for and

when those Corrections happen no one

knows exactly when it's going to happen

like I said we could guess that it's

somewhere in mid mid-February to the end

of March going to get a correction

another one is September to October but

when these Corrections come and the

market begins to pull back down to their

moving averages these are the times that

we can take opportunity in the market

again the whole point is not to be

afraid of these corrections but to

embrace these Corrections and take

advantage of these corrections to add

more and more shares to high quality

businesses so what are the stocks I'm

going to focus on what are the sectors

I'm going to focus on this year that I

think could outperform the market okay

well the first thing to mention is that

I believe that the best stocks to buy

are the ones that you already own so my

priority is to always add more shares of

my existing stocks in my portfolio

because these are already great

companies and then after that I would

then add shares of new companies if I

find new companies that are even better

than the companies that I already own

okay so having said that let's jump into

this video we'll talk about which which

sectors do I think are going to

outperform the market this year and what

are the most compelling stocks that I'm

holding and I'm adding to now I

originally presented these slides during

my Market Outlook event 2024 back on the

20th of January as well as the following

week on my online Market Outlook event

which I think some of you did attend um

so uh what I presented some of the stock

some of the sectors have really run up

quite a bit since I presented it and and

you may find oh it's too late right now

they've already gone up but like I said

don't worry it doesn't go up in a

straight line there will be Corrections

along the way along this year where I

think that there'll be a chance to add

shares of these companies as well so

having said that let's jump in so last

year 2023 the best performing sectors

were technology communication services

and consumer discretionary and the three

or the four worst performing sectors

were healthare energy consumer

defensives and utilities so how about

this year what sectors would likely

outperform this year well I think these

are the sectors that number one will

benefit from falling interest rates now

so far the FED has not yet cut rates but

they should be cutting uh by the mid of

this year the long interest rates the

10e treasury yield has come down from 5%

uh but it did bounce back up a bit now

to above about 4.15% but I think the

long-term uh treasury yield will kind of

like consolidate and move lower towards

the end of the year so which sectors

will benefit from that that's number one

number two sectors that will benefit

from the AI secular growth Trend sorry a

bit of a typo here should be secular

growth Trend and number three I think

sectors that underperformed last

year because they went through an

earnings recession and this year their

earnings are beginning to recover I

think that these sectors could rebound

and outperform this year so what sectors

am I talking about specifically four

sectors number one the technology sector

number two the financial sector number

three Healthcare and number four

Industrials I think these are the four

sectors that could outperform the market

this year in addition to these four

sectors I'm also bullish on the small

caps which are the small companies which

I don't usually buy individually but I

buy them to an ETF like the iwm ETF and

for me personally I bought the vbk ETF

which is the small cap growth ETF now

again I shared this initially on the

20th of January during my Market Outlook

event the four sectors technology

Healthcare Industrials and financials

they have performed okay they have

performed positively so far this year

and yeah technology is outperforming

Healthcare is outperforming uh

Industrial and financials slightly

outperforming slightly okay so so far so

good let's see what happens throughout

the rest of the year uh now specifically

let's take a look at why these sectors

so number one technology I believe

technology will not just outperform this

year you'll outperform for uh the near

future because again we are in this six

wve Innovation super cycle that is

driven by Ai and automation so

technology is definitely a sector that I

I won't be fully allocated in I wanton

be overweight on this sector at the same

time when interest rates fall it will

lead to further PE expansion of

technology

stocks specifically which technology

stocks uh am I really really focused on

well three areas of course we want to be

uh focused on the ones that will benefit

the most from the AI Revolution so first

will be cloud computing almost every

business on the planet will have to use

use Cloud Computing Services because

they want to be online they need to get

online so Amazon Microsoft and Google in

my opinion is a must have in every

portfolio combined they make up 65%

market share of the cloud computing

market and it's a recurring business

it's a business that is very very

sticky uh the second would be companies

that provide the semiconductors required

for AI and automation we call this AI

Exel accelerator semiconductor companies

and Nvidia is the market leader with 90%

market share and AMD is the second in

place with a 4% market

share now some people say wow how about

AMD because AMD looks like could catch

up to Nvidia and grow its market share

well that's possible but the funny thing

is if you look at both

um EMD is not cheaper than Nvidia in

fact it could still be slightly more

expensive than Nvidia and between the

two rather uh stay invested with the

market leader and AI semiconductor chips

for the next 10 years will grow

estimated with an annual return of about

24% the third area would be an AI

software two types of AI software number

one would be cyber security which is

projected to 7x over the next 10 years

so to be invested in cyber security you

could look at the ETFs like one of the

top ETFs is the IH K or individual

companies of which my two favorites are

foret ftnt and Palo AO PW So currently I

am invested in foret I have been buying

foret for quite a while right now and

it's run up quite a bit since it

announced great earnings uh last week uh

Palo Alo I'm not yet invested in it

because it's been too expensive I've

been waiting for it to drop drop it's

not dropped yet but who knows maybe in

March and September if it drops I will

add some poo Alto

next we enterprise software using AI of

which there are two one is paler and UI

path now UI path is a bit more

speculative because it's not really

profitable yet uh and a bit expensive so

my preference would be paler which you

guys know I made a video on it last year

I'm very bullish on palen here I've been

holding it for quite a number of months

right now and again they just released

blowout earnings and the stock you know

went up 40% uh in 4 days so yeah some of

you may say is it too late to buy palen

here yes I think so at this price but

you never know in March September if it

retraces back down again there could be

a chance to add more shares to Palance

here now I'm also looking at Financial

stocks as well as Healthcare stocks to

outperform this year now so far

Healthcare has been outperforming which

is great financial slightly okay so

again why these two sectors because

these two sectors were unloved last year

they were out of rotation so again we

call it sector rotation money flows out

of the sectors they UNL and everything

falls and usually after um uh sector

goes out of rotation eventually it will

get back in rotation where money flows

back into the sectors and they start to

outperform it's kind of like a musical

chest you know every sector takes turn

to outperform and underperform so since

they underperformed last year I think

they could uh outperform this year if

their earnings

recover so the reason why they

underperformed last year was because

these two SE sectors financials and

Healthcare in 2023 they had negative

earnings growth they went through an

earnings recession where financials uh

their earnings uh dropped 2.6% year on

year and Healthcare might got 20%

earnings contraction year on- year now

this year 2024 financials are expected

to grow at 6% year on year uh not really

really exciting because financials you

have to understand they don't really

grow double digits so if financials grow

single digits is pretty good now this is

talking about the entire financial

sector of which a lot of it is made of

banks which I avoid because Banks tend

to be very cyclical with low growth so I

tend to go for specific Financial

companies that have very high growth

like uh payment technology companies

like Visa Mastercard no not not PayPal

all right um as well as ratings agencies

like S&P Global moodies these are the

ones uh they have very high growth rates

um but the banks tend to pull down the

growth rates right um next Healthcare so

Healthcare is projected to grow at 177%

this year and that's why last year I

bought a lot of healthc care stocks and

this year a lot of them are now

rebounding quite a bit like I bought met

pace which I'll talk about more later on

I bought thermal Fisher I bought Viva

systems and I bought a lot of United

Health and El health and so far they

rebounded significantly already in the

first uh month of the year but you know

what they could still go a lot higher

and they could retrace for more shares

to be added next I think industrial

stocks could also do well as pmis

rebound from their bottom so what are

pmis purchasing managers index which

measures the health of the country's

manufacturing or Services sector so over

here on this chart you can see this a

long-term chart that shows you the

manufacturing uh PMI index in red and

the Services index or non-manufacturing

index in blue and you can see it's

pretty much in a long-term range where

it expends contracts expends contracts

expense contracts now uh last year you

can see that it contracted all the way

down to here so this this is the

manufacturing PMI that went all the way

down to here and you can see

historically this is kind of like the

bottom of the

range and so when it starts to to bounce

up from the bottom you know that uh

manufacturing activity is beginning to

rebound and when that happens industrial

stocks will tend to uh rebound as well

so uh so far the latest reading for the

manufacturing PMI came in at 53 and a

half sorry my bad 49 49 uh which is

somewhere around there so yep it has

been rebounding back and for the

services PMI just came in uh after it

hit again this um kind of like bottom in

the range it's now bounced up to be

about 50 53 and a half so I think that

with this happening Industrials could

outperform as well now personally I

don't really buy industrial stocks

because industrial stocks tend to be

generally in the long run low growth

they don't outperform the S&P 500 and

they tend to be pretty cyclical so there

are only a few industrial stocks I I

would buy that have got good growth one

of them is Corporation and another one

is lockit Martin which are already sold

but generally again industrial companies

like Caterpillar hone well they tend to

be low growth and cyclical so if I think

Industrials are going to rebound this

year and they actually starting to

rebound I won't really invest in them

but I'll just buy the ETF for a

short-term trade and the ETF you could

look

at uh to get exposure to Industrials is

basically the xli ETF so if you take a

quick look at the uh Industrials ETF xli

you can see that it already has broken

out for the year it was making a high

last year and then it pulled back and

then it made uh the same high pulled

back and so this is kind of like what we

call a base consolidation pattern and it

broke out of that pattern and now it's

beginning to run up so again it should

run up for the rest of the year and uh

if it's any pullback pullback to this

area of previous resistance and support

that could be a buyable area if it pulls

back to the area for a continuation of

that trend for the rest of the year the

next beneficiary of falling interest

rates would be small caps as well as

reads by the way but I'll leave that to

a separate topic because I can talk

about reads in the entire video by

itself but small caps so small caps are

basically small companies now

historically small caps used to

outperform large caps because small caps

are smaller they've got more growth po

potential than large caps that are

already very big but in recent years you

see that small caps no longer outperform

large caps large caps outperform small

caps but now they' have outperformed to

such a large extent that I think that

small

caps there's a high chance it would

rebound back to close the gap with large

caps now if you take a look at this

chart you notice something interesting

preco uh large caps which are represent

by the SNP 500 ETF the

spy and the one in Orange would be the

iwm which is the small cap ETF you can

see they pretty much are in sync right

they're pretty much in sync but most of

the time again large caps would slightly

outperform small caps now covid changed

everything you can see what happened

during covid when covid hit they both

went down but small caps went down more

than than large caps and during the

rebound large caps rebounded a lot

faster than small caps and this Gap has

gotten wider ever since then now what's

the reason the reason is very simple Co

really screwed up small companies so for

small companies because they are small

they don't have as much cash they've got

more debt they are not as resilient as

big companies with lots of resources so

small caps really got uh whacked during

covid and then in 2022 when the FED

raised interest rates at the fastest

rate in history small cap suffered the

most because against small caps they

have a lot of debt and when interest

rates rise they have to pay a lot more

interest on the debt their profits

collapse and many small caps they don't

have a lot of cash so they have to keep

raising cash through debt or by uh

issuing shares and with high interest

rates it's hard to do that and that's

why they have been underperforming and

very much going nowhere in the last year

or so whereas big companies like like

meta Amazon Nvidia High interest rates

are actually good for them because these

big companies they're immune to high

interest rates they earn more interest

income because of the large cash on

their balance sheet and they have got

hardly any debt so you see this big gap

right here but once interest rates fall

we should see this Gap narrow I don't

expect large caps to come down as much

as I expect small caps to at least

rebound to at least you know close the

gap with large caps now I don't buy

specific small companies because I think

they're too risky for me to buy I'm a

very very conservative person but I'll

buy the ETF for more of a short to

medium-term trade while small caps catch

up now I've already bought it I already

bought the small cap ETF there few of

them the one I bought is the vbk which

is the small cap growth ETF so I started

buying it uh I think about a month or

two months ago yeah about there I think

about a month ago so so far it has

started uh rebounding and I think that

there's a lot more room for it to run

let's take a look at the charts so this

is the vbk and I'm looking at the weekly

candles and you can see it's pretty much

been in this range over here uh for the

last uh year or so right it went up went

down went up went down went up down

right stuck in this range and you can

see that recently kind of like started

to break out of this range all right it

broke out of this range and then

retraced and now it looks like it could

be setting up to begin to move higher

again uh when rates start to fall that's

when you see this will really begin to

run up again there's no guarantee but I

think there's a high chance it will run

up now if you zoom down to the uh daily

candles you can see a clearer view of

the daily candles that it has started to

run uh but it's not that far yet from

the moving average right so we've got

that wave up we've got a wave down and

now it's beginning to uh wave up over

here so there the vbk now at the start

of every year during my Market Outlook

event I will share what I think are the

highest quality stocks with the most

compelling value at the time so this was

presented again in uh on the 20th of

January which I thought they still had

very good value some of them still have

very good value but some of them have

run up quite a bit so they may not they

may no longer be that cheap but again

you never know we could get the

correction in March or or September to

give them back that attractive value but

these were the stocks I presented and

I'll run through them one by one to show

you what I think is the latest intrinsic

value and uh the levels where I think I

would want to add more shares myself so

these are the eight stocks that I think

um would do well this year and for years

to come Amazon that's always my number

one favorite and it's it's currently the

biggest position in my portfolio number

two will be Google alphabet number three

meta platforms again one of the biggest

positions in my portfolio uh foret which

is cyber security company so all these

are within the technology sector I

talked about Healthcare Healthcare

United

Health uh Viva systems and met pay which

I just bought recently in fact bought

met P about a couple of weeks ago and

for financials basically it's just S&P

Global so let's begin with Amazon so

ever since I presented it back on the

20th of January which was uh somewhere

around here you can see that it's run up

quite a bit especially this Gap up after

solid earnings but it is still

undervalued so my intrinsic value for

Amazon currently is

$182 so 174 it's slightly below

valuation but like I said I don't add

shares just because it's undervalued I

add only when it retraces to a level of

support and on The Daily candles I would

like to see it retrace to at least the

50 moving average minimum so this is the

50 moving average over here so right now

you can see the wave up the wave down a

wave up wave down and wave up so I never

chase it once it runs right so I like to

let it wave up and then eventually it's

going to wave back down to at least that

50 moving average before I would add it

back again now currently the 50 moving

average would be somewhere around 157

but bear in mind that as the price moves

the moving averages will move as well

and that's why I

update my my support levels every month

for my subscribers of the ultimate

investors Playbook and at the same time

the intrinsic value also changes uh

every time the company begins to report

uh new results so that's something that

I update for my subscribers as well now

if you've taken my whale investor course

you've learned all these skills you can

uh update your support levels every

month and you can recalculate your

intrinsic values as as well so that's

Amazon next would be alphabet which is

uh also known as

Google so alphabet actually they

announced pretty good results everything

was great except they missed on just one

little item and the market freaked out

and we had that drop over here right

boom went down by the way what's the

intrinsic value of Google intrinsic

value is

172 yep so this is still very very

undervalued

but again I like to buy after a wave

down and this was a perfect buying

opportunity right here so again I

presented this stock on the 20th of

January which was

somewhere

uh somewhere over there right and then

it went up after that and then earnings

came and it kind of like GED down to the

support level right so that's the first

support level and then since it's it's

run up over there so very undervalued by

but again uh would I add at this point

of time after it's waved up no I'll wait

for it to again retrace back down nearer

this 50 moving average at least uh at

about 140 yeah for now but again it will

change as as time goes by support levels

will go up over time next will be meta

platforms which is I think one of the

best performing stocks in the last 12 24

months So Meta intrinsic value is

$480 right right now is at 468 so it is

uh pretty much at fair price and again I

I don't like to buy something at fair

price I like to buy something at a

discount so we have got a margin of

safety and you can see that it's run up

uh quite far above the moving averages

right very far above the 50 moving

average

so yeah I hold matter and if you do

would I sell no I wouldn't sell because

it is still fairly priced I remember I

only sell something if it's gross ly

overpriced like if meta went up to

$11,000 I'll start selling right because

$11,000 would be like 100% above

intrinsic value that's when I'll start

to think okay it's a bit crazy I'll get

out but right now it's it's it's not

overprice okay so I I wouldn't sell okay

but neither would I buy because

technically it is overextended right

wave up wave down wave up wave down wave

up extended right I like it to kind of

like retrace back again at at least near

to the 50 moving average at about 3 390

then then I'll add more meta shares now

some of you may be thinking are you sure

can it drop all the way to 390 it's so

far away you never know okay those of

you who have been in a markets for the

last 10 20 30 years know that once the

sentiment shifts oo the market can

suddenly drop 5 10 15% and high beta

stocks could drop

20% 30% in a heartbeat

okay so when that happens you got to be

psychologically prepared don't fre oh my

God I'm going to die that's an

opportunity to add more shares

right so one thing I learned my career

is you know never chase the girl you

know once the girl runs let her run wait

that patiently she'll run back to you

eventually now if she doesn't there are

many other girls out there who are just

as attractive or beautiful okay inside

next we have got cyber security company

foret so foret just shared it in the

Market Outlook on the 20th of January

which was somewhere there when it was

just below the 200 day moving average uh

and it was at the support level so that

was the point where many of my students

yeah the moment they heard it uh they

did their research and they started

adding at $62 and of course students in

my community we bought you know much

lower around this area here last year so

for for9 the intrinsic value is $73 and

at $70 it is still undervalued

uh but right now you can see wave up

wave down wave up wave down wave up wave

down wave up after earnings it's kind of

like consolidating right here so again

on the daily candles I would personally

add more only if it retraces uh to the

closest level of support and in this

case I would say the closest level would

be about

$63 and again it may not go there it may

run up again so in that case I'll then

raise the support levels over time and

the in pH value will go up as well over

time uh next we have got SNP Global sbgi

which is the only Financial

stock uh in this particular uh watch

list so I've been holding spgi for quite

a number of years uh right now this

stock is overvalued you can see the

intrinsic value is

$46 all right currently it's about 437

so it is overvalued and again uh I would

say the level to addir is only when it

retraces down to at least

$43 which is where uh was a previous uh

resistance uh previous resistance

becomes support and that would be just

below the 406 intrinsic

value next we go on to the Health Care

stocks the first of which is Viva

systems I've also been holding this for

quite a number of years and viva's

intrinsic value

is

$261 so this is still pretty undervalued

so like I said in this market where

there are many stocks that are

overpriced there are still some quality

companies that are still reasonably

priced so this is still

undervalued um let just go down to the

Daily candles over here yep uh but you

can see again it's after wave up pattern

right so wave up wave down wave up wave

down wave up okay so uh again my level

to add would be about

196 even though it's undervalued but we

want to always add on a retracement to a

level of support at this point of

time next United

Health the other Healthcare Company

intrinsic value 548 so this one is

undervalued and well close enough to the

second level of support so I would say

for investors who are building a new

position right this would be a level

that would be attractive to add shares

for United Health and finally another

Healthcare stock met pce so this one

when I first introduced it to um the

community and on the Outlook it was

right here you can see wave up wave down

right at this 50 moving average support

that was on the 20th of January

beautiful and I said I'm adding more

than myself so you can see the intrinsic

value is 336 so at that point very

undervalued well not very quite

undervalue and retrace with support

level that was a great place to add now

since then of course it has waved up so

right now it is still slightly below the

intrinsic value but I wouldn't add more

there so I want to add more myself

because I've not bought enough yet so

I'm waiting for the next uh wave down

pattern at least to the 50 moving

average at about 300 to add more myself

so that we are those are the eight uh

high quality stocks that I think are

still reasonably priced but doesn't mean

that now it's a level to add yet the S&P

500 continues to be on this very strong

wave up pattern breaking the 5,000 Mark

yesterday it's times like that that I

wouldn't Chase it it could go higher but

I would wait patiently for that

correction to appear in the later part

of the Year hope you enjoyed it and may

the markets be with you if you want to

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is Adam cou and may the markets be with

you