Evaluating Asset Worth: Expert Analysis on iShares Russell 2000 ETF (IWM) and Reddit (RDDT)

In the latest edition of Good Buy or Goodbye, Public Ventures President and Chief Market Strategist Lou Basenese shared his insights on two assets based on their valuations.

Basenese highlighted the iShares Russell 2000 ETF (IWM) as a buy. He emphasized that the ETF provides exposure to a basket of small-cap stocks, which have seen a historic rebound since October. The technical indicators for IWM are also favorable, with the index trading above the 50 and 200-day moving averages. Basenese pointed out that small caps tend to outperform during economic cycles, making them an attractive investment option. However, he cautioned that prolonged high-interest rates could dampen the rally for small caps.

On the other hand, Basenese advised against investing in Reddit (RDDT). He raised concerns about the company’s profitability, noting that Reddit has not reported a profit in 19 years. Additionally, Basenese highlighted Reddit’s lack of patents as a disadvantage, as patents are crucial for protecting intellectual property and staying competitive in the market. He also pointed out that Reddit’s price-to-sales ratio is on par with Meta, despite significant differences in user base and profitability.

Basenese acknowledged that Reddit’s potential partnership with Google for AI services could be a catalyst for the stock. However, he cautioned that investing based on hype rather than fundamentals could be risky.

In summary, Basenese recommended buying the iShares Russell 2000 ETF for exposure to small-cap stocks with strong potential for gains. He advised avoiding Reddit due to its lack of profitability, patents, and high valuation relative to peers.

For more expert insights and market analysis, viewers can watch the full episode of Market Domination and Good Buy or Goodbye. Stay tuned for more episodes of Good Buy or Goodbye three times a week at 3:30 PM Eastern.