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let's welcome back Chris grisanti Chief Equity strategist at Mai Capital Management it's good to see you again Chris welcome thank you Kelly it's good to be with you as always yeah I don't think you're the kind of guy who's going to take off a trade after one month but it's worked out pretty maybe it's met your Target in advance well being down three percent isn't my idea of a great trade yet but but I think uh I think over the year I think Verizon stands a terrific chance even continuing to beat Tesla from here and it's more honestly a statement about the markets in the economy than it is about about these these two companies so to explain that and and where evaluation fits into that sure so the valuation the the first half of 2023 uh left stocks like Verizon completely behind it like a year ago when mortgage rates started to go up and the home builders were absolutely demolished that's really what's happened to Verizon here it's the first investment grade company I've seen in more than a decade that has a higher dividend than its PE ratio you can just think about that um we think the dividend is completely safe the payout ratio is less than 60 cash flow is strong it's actually getting better because 5G spending is peaking but Verizon has languished and folks say to me what do you care about nobody cares about Verizon and then I say well that's not a bug that's a feature that's when you want to buy a stock is when nobody cares about it everybody's left it for dead now let's compare that with Tesla of course Tesla you know for all its Brilliance still makes cars and if the economy slows folks will buy less cars than analysts are now expecting them to buy and that's the that's the hurdle they have to be and it's okay if you're the seven PE like Verizon does not to quite meet expectations but when you have a 60 or 70 p e you need constant reassurance which comes in the form of making or beating the numbers and I just think in a slowing economy which I strongly see over the next six to 12 months I think that's going to be tough for Tesla and I'm not saying Verizon's a better company whatever that means I'm just saying I want to make money and I want to protect myself over the next year I think Verizon is a better way to do that than test so the the sort of rejoinder to that would be Verizon's a value trap and Tesla's growth is worth paying for like its performance is worth paying up sure and there's you know both of these kind of continuing to go where they've where they've gone is more likely than not I think that's right but but you have to I think that's right that's the contrarian argument but but what I why I disagree with that is I think the pendulums in both cases have swung to extremes and if I'm correct about the economy slowing that's when you want to make the switch from the very economically sensitive Tesla to the much less economically uh sensitive Horizon which is a tenth of the valuation with a safe eight percent dividend by the way if we do kind of lapse into a Slowdown rates may come down and the eight percent yield which looks attractive now will look super attractive totally if long rates go into the threes or something like that so that's yet another reason to like no I love it the line of the day is a company whose dividend yield is higher than its p e ratio now I wouldn't want to run a whole historical screen on that uh Chris you always bring us the best most provocative ideas we apprec and by the way the home builders and they always work out pretty well we really appreciate it today so far so good thank you Kelly Berkshire following you 12 months later Chris crisanti from Mai Capital Management

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