peshkov/iStock via Getty ImagesListen here or on the go via Apple Podcasts and SpotifyVictor Dergunov, The Financial Prophet, on very interesting current market dynamics (1:20). Mag stocks, strong conviction picks (4:35). Fed, monetary policy, healthy USD, interest rates (19:00). Earnings season underway - look for delinquencies (27:20). Amazon and Netflix bullishness (32:50). AI spending concerns (35:20).TranscriptRena Sherbill: The Financial Prophet, Victor Dergunov, welcome back to the Investing Experts podcast. Always great to talk to you on Seeking Alpha. Welcome back to the show.Victor Dergunov: Thank you for having me on. I'm glad to be here.RS: It's great to have you. You've covered a number of stocks in the past. Palantir (NASDAQ:PLTR) is the most prominent one that comes to my mind when I think of past episodes. How are you looking at the markets? What are you taking away from your understanding of what's happening right now?VD: We have a very interesting market dynamic right now. You know, the market has come a really long way since, since bottoming in in April.We've had a stellar rise. We've had something like a 30% increase in the S&P 500 (SP500) and about a 40% increase in the Nasdaq 100, which is pretty remarkable. I mean, we're talking about, about a three month time frame.This is something that we've basically never seen before. I believe that this even eclipses the rebound after the coronavirus bottom. So it's been amazing. It's been it's been a great ride.And, I think one of the one of the most important things I did this year and, you know, and in general, maybe in in my whole investment career, one of the one of the most important things I did was that I aggressively bought the April 7 bottom in in premarket.Now I was very, very confident about with a ninety eight, ninety nine percent probability just based on the fundamental factors, the technical indicators, and especially the sentiment gauges. We had the fear and greed index down at a three. It's the second lowest reading ever.So I was so convinced that we hit the bottom. I went basically all in on high quality stocks right at the lows. I basically attacked with all the money that I had, the cash position.Plus, I actually took on some margin only about 35%, but it was significant enough for me to build really, really considerable positions in stocks like Nvidia (NVDA), (AMD), Dell (DELL), Google. (GOOG) (GOOGL), Amazon (AMZN), Marvell (MRVL), Broadcom (AVGO).Basically, I just bought a lot of these stocks right at the lows and also some nuclear stocks like VST, SEG, OCLO. As scary as it was, it was an amazing period to just capitalize on the markets, and that's exactly what we did.All the investors in my investment group, it's just 500 plus investors now. They were very happy with that move and the way it worked out because I kept staying long the market. I always said people were asking me around the lows, should we sell, get out, sell America?And I just said no. We hedged a little a little bit beforehand. We knew that this kind of decline could potentially happen. We didn't expect a black swan event, but that's what we got.You never wanna sell the bottom. And that's what I told people. Most of them took my advice, and they're very happy investors right now.RS: Some discussion on this podcast and in general in investing circles and discussions is about the magnificent seven and how much the stocks in that moniker are deserving of it, where they stand now.Two of your most recent articles on Seeking Alpha are buys on Tesla and Google. So talk to us, contextualize for us the tech sector, how that's moving the market, what that means for you, why these stocks, speaking of buying at lows, does that have anything to do with it - specifically, when it relates to Tesla, share with us your thoughts there.VD: Absolutely. And just to go back to Palantir for a second because you mentioned that when you speak to me you think about Palantir.So first of all, I forgot to mention that I also doubled down on my Palantir position around the lows in April, which was a stellar move.And I also wanna mention that I had such great conviction in Palantir when it was still a $6 and $7 stock back in 2022 and 2023, that early 2023 that I actually built it into my most significant portfolio position with about a 15 to a 20% weighting, when it was only around $7.I saw that it was a monopoly very early on. I wrote about it many, many times on Seeking Alpha. I don't exactly understand why many investors waited so long to to get into Palantir, but I'm very happy that I positioned myself and everyone in my investment group to be in Palantir very early around that 6 or $7 mark.And we just we just rolled that stock all the way up to over $100 and to about $150. So we did amazing things with Palantir, just phenomenal. 20 x return in about two years, that's pretty great.Now to return back to your original question about the mag stocks, basically, I look at them this way. I don't call them the mag seven. I call them the mags. And the mags, in my view, are Tesla (NASDAQ:TSLA), Google, Amazon, NVIDIA, Apple (AAPL), Microsoft (MSFT), Broadcom, and Meta (META).These are the eight most significant tech companies globally. They're all about a trillion market cap or higher. And, basically, I like all of these names. Right now, I own most of them.I stay away from Microsoft, I usually stay away because I think it's too expensive. In my view, it has a pretty high peg ratio, and I think it's relatively expensive relative to its growth prospects in in my view.It's a very dominant company, but it's not something I wanna own.And a similar dynamic with Apple, and that's because I believe that they're a little bit pricey, and I think that there's maybe limited upside relative to some other stocks.Like, for instance, Google. Google is very cheap. Now there's a good reason for that because there's the DOJ investigation. There is the potential spin off of Chrome or a divestment, I should say. But, having said that, that's probably not going to happen.So I believe the stock is being kind of priced for a potential, very negative event, and there's a very low probability that highly negative event, forced divestment of Chrome, will occur. So I actually think Alphabet is a good buy here.Now, I also own Amazon. I think it has amazing things going forward, and it should do really well.I own some Meta, but I only have a 1% position now, but I really, really like this company for several reasons. It's doing amazing things with AI, as other companies too. But Meta seems to be really, it's really competing to be at the top. And what it's doing, it's recruiting a lot of the top talent.It's taking top people from OpenAI. It's taking some people from Apple and other companies. And it's doing this by providing just massive pay packages.But, it's looking long term because it has social media monopoly. It has the amazing metaverse concept going, plus its leading position in AI. It positions it very, very well to capitalize in multiple markets in the future. So I believe Meta is an excellent company to own here.Now as far as the chip stocks, Broadcom and NVIDIA, I view them a little bit differently because they are maybe a little bit more cyclical in a way just because when the AI slowdown does occur, we're gonna we're gonna see some margin compression in these companies.So while I have been bullish on them and I remain positive on them going forward, I would be a little bit more cautious in the intermediate and longer term just because they're more like hardware companies.Yes, they have software segments, but a lot of their money comes from selling hardware, whether it be the most advanced GPUs right now.But there are other companies like Marvell, AMD, and others that are also looking to compete. So we're probably gonna see some margin compression in the future. So those are a bit different for me even though they are great companies.Finally, Tesla, it's maybe the most interesting of the companies. It's the most controversial for sure. It's also the one with the highest risk reward ratio.Some people say that it's overvalued. And, of course, if you're judging it by a traditional PE ratio or something like that, and especially if you look at it as an auto company, then, yes, it will look overvalued to you.However, I view Tesla, first of all, as a tech AI company with remarkable potential in FSD, in the robotaxi industry because that's gonna be massive. The self driving industry is going to be huge.I mean, ten years from now, I'll be surprised if 50% of us are driving ourselves. Maybe even in five years, 50% or so are gonna be in driverless vehicles. So it's definitely the future. Tesla is the leading player.There are other players like Waymo and Amazon is getting into the business a little bit, and we have Chinese players. However, no one has the Tesla advantage. I mean the infrastructure. I mean the ecosystem.They have so many cars on the roads for so much time and these cars are basically computers on wheels. They record everything. All the data goes back into Tesla's remarkable AI supercomputer.And just the data that the company has is phenomenal. Now it uses its own proprietary technology. Doesn't need to rely on Mobileye or any other company for its driverless tech.So it has so many advantages, the supercharger network. They're really positioning themselves to corner the self driving FSD robotaxi market, which could potentially be worth trillions in maybe five or ten years from now.That's enormous potential. Then there's the robotics segment, which people may think it's far out there and it's futuristic now, but just wait a couple of years. And you may see a Tesla bot in almost every household. Maybe in five to ten years, that could be the hottest product on the market.Now have you seen the Tesla robots relative to their competition? The competition looks sloppy. They have wires sticking out. Their robots are walking backwards. They're not doing the right things. They're not doing anything right with their fingers. Sure, there are some companies that have certain elements worked out, but no one has the complete robot puzzled together like Tesla.No one. And this business is going to be massive. I believe it's going to be making hundreds of billions of dollars off of these robots in the future. Now if you combine the FSD, the robots, they have of course, their traditional sort of car business. They have some of the best selling cars. The model y was the best selling vehicle last year. This year, it could also be the best selling vehicle. You have the model three, great selling vehicle.And this is despite all the controversy recently with Elon Musk and DOGE and all that. That's temporary in my view. All that fear mongering, that's been going away. It's gonna continue to go away.And at the end of the day, people are gonna want the best products. And Tesla provides just that. They provide the best vehicles, the best EVs, in my view. And not only in my view, they have the best FSD program.They have the best robots. They have a very advanced AI component. So I definitely believe Tesla is a huge winner long term.RS: You listed many of the reasons to be bullish that I feel like many people cannot disagree with. I think where people may have concerns is, we had Sara Awad talking about the robotaxi launch, and she was expressing some concerns.You mentioned the Musk concerns and how they're temporary. Maybe people would say, what about his continuous desire to want to put himself into the politics conversation, his seemingly continual desire to want to be a public figure that is talked about. What would you say to those concerns or any other concerns that you hear? How would you counter them?VD: I don't think that Elon Musk should stay out of politics. I think that Elon Musk should pursue everything that Elon Musk sees fit to pursue.And just like he told Dan Ives to shut up, I believe he was right in doing that because I don't think anyone with the kind of success that Elon Musk has achieved and how much Elon Musk has created and done for humankind is more than anyone has done in any generation, I believe.So this is an once in a lifetime kind of generational genius that we're talking about here. Now for someone like an analyst, I like Dan Ives. I align with a lot of his points.But for him to be kind of dictating and trying to restrain Elon Musk, I think is ridiculous. And I believe that Elon Musk is entitled to do what Elon Musk wants to do if it's within reason, if it's legal.And what he's doing is not only reasonable, I believe it's a very necessary move to create a third party, the American party, and for this party to gain more and more traction so more favorable laws can be passed in the senate and the congress.And I believe that this should not be in any way impacting his businesses negatively. On the contrary, I believe that in the future, this is going to turn into a big net positive because we could see some friendlier legislation concerning renewable energy, concerning EVs, concerning other things that should have been in the big beautiful bill that were excluded for other unnecessary pork.I believe that the EV credits should have stayed in. I believe that the United States should be more focused on solar energy, not just nuclear. I don't like wind or hydro that much, but I believe that solar is a good energy source. So I definitely think that him creating the third party is a positive.I think it's a mistake that shareholders are reacting negatively to it. I believe that all of these dips in Tesla stock are typically buying opportunities. And I also don't think that there's gonna be great political fallout in the sense that Donald Trump is gonna try to punish Elon Musk or do anything of the sort.RS: You would posit that not only is Musk getting into politics and voicing his opinion and trying to create the kind of change that he wants, you would say that it's not only not a negative, it's a positive?You seem to be a fan and that there are many more like you, and he's not turning off potential investors. He's bringing more in?VD: Well, he's definitely turning off some investors, but those are gonna be the investors that are ultimately gonna lose out on making a lot more money.Because what they're doing basically is they are doubting Elon Musk. And, if I've learned one thing over the years is that you don't wanna bet against Elon Musk, and you may be a fool to doubt him as well.RS: As long as we're wading into some broader topics, care to weigh in on the broader markets and how you see those going and how the Fed is handling monetary policy, where you see interest rates going either in specifically the US or also internationally, how you see monetary policy being handled?VD: Oh, absolutely. I would love to. Well, first of all, I think the monetary system here in the US is is the most crucial monetary system globally.They're cutting rates in Europe. Japan is actually raising rates a little bit. We're having a very interesting monetary dynamic. And the Fed has been on hold for over six months now.So it's a very atypical monetary approach from the Fed to start cutting rates and then just go on hold for a long time because we saw about 175 or 100 basis points worth of cuts from September.And now the Fed has been on hold for six months while mortgage rates are at decade highs.Credit card rates are at all time highs. We're seeing the market slowing down in a lot of key areas like housing, as well as consumer spending in some respects because of these ultra high interest rates.And who's responsible for it? The Federal Reserve. And Chairman Powell is the main man responsible for this issue, and I believe that he is very much behind the curve. First of all, he was very negative regarding tariffs, and he was claiming that there was gonna be a lot of inflation.Basically, the Fed was looking out for increased inflation because of tariffs. Well, we didn't really see increased inflation because of tariffs. In fact, we've been seeing lower than expected inflation readings.So, there might have been a slight uptick in inflation after the April 7 bottom, but we're not seeing anything like we saw after the coronavirus, we're really not seeing high inflation.Now on the other hand, we are seeing the labor market weakening, especially in the private jobs market. We saw only about 75,000, private and nonfarms created last month as opposed to the consensus estimate for 105,000.So a 30% miss there, that is a big, big miss. So that's telling us that the private sector is very cautious on hiring. There's actually a considerable slowdown, and a big component of that is the very high interest rates because, of course, corporations have to borrow money all the time, so they're borrowing money at very high rates right now.The national debt is around 37,000,000,000,000 that we're paying $1,000,000,000,000 just in interest on that debt annually now, and that's because we have very high rates.Now I believe that Fed chair Powell is pretty much an incompetent Fed chair. If we had a competent Fed chair, we would have rates lower by now, and we would be aiming for a low enough rate so that we could issue some very long term bonds, perhaps even a hundred year treasury.Issue those at very low rates because we could have the Fed come in and buy bonds, buy treasuries on the open market. That's what we need to refinance the national debt because we need long term rates. We need to refinance our national debt into longer term rates that are at a very low interest rate.Now the way that we would do that is first by lowering interest rates. So we're very far behind the curve on that. And then we would also introduce some quantitative easing to hammer down that longer end of the curve.That would give us an opportunity to refinance the national debt as well as any kind of corporate debt and just debt in general, consumer debt. And in this instance, we would not be paying as a nation a trillion dollars in interest each year. We would be paying something maybe, like, 500,000,000,000 or less.And we could be on our way to fixing our enormous budget deficit problems and things of that nature that are in large part because of high interest rates.RS: And what would you say about the dollar (DXY) these days and/or any other currencies you'd care to add to that?VD: I don't really see a problem in the dollar relative to other currencies. I see a problem in fiat currencies in general.Yes. The dollar has declined from its highs, but that's just because it was at an uber high level when Donald Trump got elected. Everyone thought that he would want a strong dollar.I didn't think that. I realized that the dollar was too strong, that we needed a lower dollar because a lower dollar is actually better for the American economy.It makes it more competitive globally. So I believe the dollar is at a very good place now. Around 90 on the dollar index is very healthy. It's a very good spot. I don't think it should be a lot higher than that.We see rate cuts occurring in in the European Union. We see rate cuts occurring in Britain. We see a lot of major central banks cutting rates.The Federal Reserve is behind the curve here, and I don't believe that the dollar is gonna decline significantly once the Fed starts cutting rates again.I think that once Fed chair Powell is replaced and a new Fed chair gets appointed, whether it be when his term runs out or if he chooses to retire early, which is possible, that would be great.I think the market would react really, really positively to that. That would be just an excellent phenomenon. And I don't think that the dollar would have a significant decline.There could be some transitory weakness, but we're still the United States. The dollar is still the reserve currency, and there are reasons for that.We have the most, the best, most advanced, strongest military globally. We have the most dynamic, the strongest, most amazing consumer economy globally. And, we have the innovation. No one has innovation like the United States. We have Silicon Valley. We have all the mag stocks. They're all American.Europe, they have a few high quality, big cap tech companies, but that's nothing compared to what America has.So America has three things. We have the three things for the win, basically. We have the innovation. We have the most dynamic, the most remarkable, the most resilient economy, and we have the most powerful military globally.So that makes America the place to invest. The dollar, I don't think it's gonna decline. I just don't buy it.RS: And what are you looking for this earning season? It's just underway. What are the takeaways, or what are the things that you're most focused on as you parse through those reports?VD: I'm most focused on the big tech earnings, of course, but other sectors are also very important because we can see what's going on in certain sectors of the economy by the earnings and the guidance that the companies give in those spaces.So, right now, we've just seen several banks report, but we saw very positive reports out of JPMorgan (JPM), out of BlackRock (BLK), out of Wells Fargo (WFC), out of Citigroup (C).We're seeing really, really solid numbers, very good sales, very nice EPS beats, and pretty solid guidance.Now one thing that we need to keep an eye on is in the increases in delinquencies. Loan delinquencies, credit card default rates and everything that has to do with a potential worsening in the credit system.Especially the housing market is one thing that I am getting a little bit concerned about here because we did get that red flare, I believe they called it, out of Moody's or one of the rating agencies, which came out with the red flare saying that interest rates are too high, housing prices are declining in many areas.Basically, there's way too many sellers relative to buyers on the market.So that's a big negative there, and we definitely need to watch the banks, especially, and lending institutions to see that doesn't get out of hand because we don't wanna see another 2006, 2007 transpire when we have a wave of defaults or a crash in the housing market or anything like that.Definitely, I'm looking for any anything that could suggest that. And, thankfully, we're not seeing anything that negative yet, but I did notice some rises in delinquencies relative to credit cards and bank credit.So, aside from that, of course, we have Tesla reporting soon. Netflix (NFLX) is actually reporting very soon.And we have the the heart of the earning season coming up in a couple of weeks where we're gonna have all the big tech companies reporting, like Amazon, Microsoft, Google, Apple, etcetera. So that's gonna be very interesting.I do believe that we're gonna get solid numbers. We're gonna get some pretty good guidance. There may be some limited visibility because of some uncertainty regarding tariffs.But I really think that most companies are starting to look past the tariff dynamic, and they're looking more toward the tax cuts and potential rate cuts in the future, more liquidity, they're probably looking ahead to 2026, and they're probably going to begin guiding a little bit better because there's really more and more opportunity for growth ahead.The way I'm looking at the market now is that we've had this massive rebound, and it's great. It's very solid. It illustrates that the market just basically was way too panicky around April and in the beginning of the year. Now, we're on very solid footing, but we're a little bit overbought here.I believe we could use at least a three to five technical correction in the S&P 500. We'll probably get that around the summertime or maybe in the early fall.But that's gonna turn into a very compelling buying opportunity, I believe, because there is that expectation for a lot of growth ahead. And I don't think we've seen anything relevant to animal spirits yet.We've seen it in some isolated stocks and some isolated sectors, but I believe that when we revisit the market in 2026 and maybe 2027, the market could be considerably higher by then.Because by that time, we could really see the animal spirits kicking in a lot more than they are now, and we could see just many more positive elements happening relative to the negative concerns that we have here.I believe that a lot of them are going to continue to be alleviated, and we're gonna have a much cleaner, healthier, and a much higher growth path ahead in 2026 and 2027.RS: In terms of the tech sector and the tech names, is AI spending something you're looking at, wondering what's coming in terms of guidance?And, also, in terms of the names that you mentioned, Amazon and Netflix our two most recent episodes, a lot of bullishness around, if not questioning a bit of Netflix's valuation, but general bullishness around Amazon and Netflix. If you'd care to weigh in even briefly on those two stocks.VD: I love Netflix. I've been using Netflix since 2009, I believe. I love Netflix.RS: Back when you were getting it in the mail?VD: Yeah. Back when I was getting in the mail. Exactly. I would get in the mail. I'd send it back. They didn't even have streaming back then. Unfortunately, I didn't start investing in the stock until 2011.Here are my three top investments, ever. Apple, because I started buying in 2006 right when the iPhone came out, Netflix, because I started buying in 2011, and it appreciated by 10000% before I started selling considerable amounts, and Tesla because I started buying back in 2013.Now, of course, Netflix is one of my favorite companies. I love it. I love the stock, but I don't own it here. I don't own it now, and I haven't owned it recently.And the reason I don't own it is because it's so darn expensive. It's ridiculous. I just think that it's too expensive now.So I believe that Netflix needs at least a technical pullback. I mean, if we look at it here, it's just very expensive, and it's getting overbought. We could probably get it at a better better level even if we ought to own it at these lofty valuations.Amazon, on the other hand, I don't think it's too expensive. I own Amazon, and I think that they're doing amazing things with AI. They have a huge, massive, very diversified portfolio. They have almost like a monopoly in online shopping.It's an excellent business. I love Amazon. I own it. So, I'm a buyer on any dip that I can get in Amazon.RS: And anything to say about AI spending?VD: AI spending. Yes. I mean, that's something that we need to consider that we need to continuously keep our eye on because there's this constant kind of concern that at some moment, AI spending could slow considerably.And when it does what's gonna happen is that a lot of companies that have been making a lot of money like Nvidia, like Broadcom, and other smaller companies and other big companies, of course, they're going to first of all, feel a margin compression.And second of all, they're probably not gonna achieve the kind of revenue growth that analysts are anticipating and the stocks are priced for. That's gonna translate into even lower earnings growth potentially, and we may even see periods of earnings declines.That's gonna be a messy period. So, of course, we're always on the lookout for when that could happen. Because when it does, a lot of these stocks, they're not just gonna correct by 20 or 30%.They could actually decline by 40. They could go through considerable bear markets, like 50%, 60% bear markets in some of these stocks that are high flyers right now.And this doesn't only concern the guys at the base powering the AI industry, like the picks and shovels, Nvidia, Broadcom, AMD, and others.This also concerns the software players and even companies like Palantir because when we get that slowdown in the hardware AI, it's gonna contaminate the whole AI segment because those are the highest market cap companies, and they're gonna be the ones that may decline the most.But other companies like Google and Amazon and others, they're also gonna have these these big periods of decline. Facebook, they could go through very significant corrections, 40%, 50% possibly something like that.So we're definitely looking out for that period when we see some noticeable signs of AI spending slowing.But, we haven't really seen anything any considerable slowdown yet. And instead, we're seeing increased competition between Meta and Microsoft and x xAI and OpenAI.Then there's China, of course. We can't forget about that. This is a global phenomenon. So, we're having massive investments in the Middle East, and of course, Europe wants to participate.This bubble could continue to inflate for, I don't know for how long, but for more time. But, when it pops, it's gonna be a loud pop, and a lot of stocks are gonna crash. That's for sure.RS: Lot to keep our eyes on. No doubt about it. Victor Dergunov is the name. If you type it into Seeking Alpha, you can read some articles for free.He is The Financial Prophet. That's the investing group he runs on Seeking Alpha. He has a YouTube channel of the same name. Victor, I'll leave you with the final words if there's anything investing wise you wanna share or if you just wanna share with listeners how they can find more of your content. Happy for you to do that now. Always appreciate catching up with you. Thank you for sharing so much time and insight.VD: Thank you very much. Thank you for having me on. And just for the record, my Hebrew name is Shlomo. So if some of my Jewish brothers out there wanna wanna join The Financial Prophet, Shlomo is my Hebrew name. And, of course, I invite everyone to join The Financial Prophet.It's an amazing investment community. We have over 530 members now, and it just keeps growing and growing and growing. And to be honest with you, I would say that probably 95% or more of the people who are in The Financial Prophet, they love it. We get the best reviews.I think that we get the best portfolio results, honestly. I mean, I don't know many people on Wall Street who can top our all weather portfolio return of year to date. I'll tell you that our all weather portfolio is up by 29% year to date, and our passive ETF portfolio is up by 19% year to date.That's tripling the S&P 500, and that's just the ETF portfolio. The all weather portfolio, 30% over the 6% S&P 500 gain. So that's about 400 or 500% outperformance rate.So I think people should join. I want as many people to join as possible because the more people that join, the more money they're gonna make and the more money we're gonna make together.And I think that that's the bottom line here. We want people to become better investors, and we want people to achieve optimal investment results. And that's exactly what we do at The Financial Prophet. It's the best place to be.Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.