Caruso Weekend Report: July 20, 2025
Weekend Report
Markets continue to march higher, much to the surprise of those fixated on tariff worries. The “wall of worry” is still being climbed as investors look ahead to potential rate cuts and ongoing AI innovation. Most people tend to plan based on recent experience. Looking back five years, we’ve seen several sizable bull and bear markets, with this year’s tariff drop being the smallest (though swift). These repeated market shocks make it normal—even reasonable—to fear sudden declines. However, extended bull markets do arise, especially when new technologies and falling interest rates converge—two key pillars in place right now. Rather than focusing solely on potential setbacks, we should also study the substantial opportunities.
My view is that we’re in a tech revolution similar to the 1990s and still in its early stages. I think 1995 is a fair reference point; it ended up being the S&P 500’s best year of that decade. Yet, in real time, a pessimist would have struggled to capture those outlandish returns. Let’s consider what that experience might have felt like without the benefit of hindsight as we study what these 1995 charts looked like in “Real Time”:
With that perspective, the Nasdaq sitting about 3 % below its 2024 highs doesn’t seem terribly extended. Sure, the market can correct, but key pillars remain intact—there’s no euphoric sentiment or frothy price action.
Most of the strength continues to come from leading companies such as HOOD, GEV, AMD, and PLTR (all early Caruso Insights rally buys), where a pause would be normal and healthy rather than disruptive. The market has trained us over the past five years to expect erratic moves, but our focus should remain on buying the most innovative companies, supported by strong risk management and a structured, data-driven market process. As Bill O’Neil wisely noted, “We are in the interpretation business, not the prediction business.”
Leading stocks are generally extended; that doesn’t mean they need to fall, but the ideal entries have passed for now. This may change as several begin to base or pull back to key averages—cybersecurity names like RBRK are a good example. The key is to remain patient and concentrate only on true leaders.
