We may be past 'peak uncertainty', but not 'maximum pain', says Fundstrat's Tom Lee

Key Concepts

• Bitcoin and Gold correlation
• Institutional deleveraging impact on Bitcoin
• VIX as a measure of market fear
• Potential for a "positive policy shock"
• Granny Shot ETF: Investing in stocks correlated to long-term structural themes

Bitcoin and Gold Correlation

• Observation: Gold has been outperforming Bitcoin in the recent past, reaching new highs.
• Tom Lee's Perspective: Bitcoin may have been struggling due to institutional deleveraging earlier in the year, where institutions were selling assets, including Bitcoin, to reduce risk. This selling pressure particularly affected Bitcoin over weekends.
• Future Outlook: Lee believes that the deleveraging is largely done, and Bitcoin is poised to catch up to gold. He notes Bitcoin's previous high was over $110,000, suggesting significant upside potential as a non-dollar asset.

Equity Markets and Uncertainty

• Current Market Sentiment: Stocks are considered attractive, but uncertainty remains a dominant factor.
• VIX as a Fear Gauge: Lee suggests that the high in the VIX (Volatility Index) on April 7th is unlikely to be matched, indicating that "peak uncertainty" may have passed.
• Potential Risks: Despite the potential for reduced fear, economic consequences could still cause market hesitation.
• Bear Market Low: While the S&P 500 made a low of 4800 a couple of weeks prior to the interview, Lee acknowledges the possibility of drifting dangerously close to that level again in the coming weeks due to investor uncertainty.
• Resilience and Positive Shocks: Lee emphasizes the resilience of companies, which will become evident during earnings season. He also highlights the potential for a "positive policy shock," such as a de-escalation of trade tensions with China or a new trade deal with one of the 15 countries the US has trade deals with.

Granny Shot ETF

• Concept: The ETF is named after the "granny shot" free throw technique popularized by NBA Hall of Famer Rick Barry, known for its high success rate (around 95%).
• Investment Strategy: The ETF focuses on identifying and investing in stocks that are strongly correlated to multiple long-term structural themes, such as cybersecurity and the millennial generation.
• Goal: To invest in companies that are linked to the most important themes that will last for ten years.
• ETF Size: The ETF has reached $1 billion in assets.