Nov 8, 2026 · 19 min
Cress says correction lacks crisis-level debt risks
Do. Not. Panic.
The episode weighs whether election-driven volatility signals lasting economic damage or a chance to buy fundamentally strong companies.
- 1Post-midterm market history generally favors gains over three, six, and twelve months despite occasional short-term declines.
- 2Equal-weight ETFs can reduce concentration in the largest technology stocks during a technology-led market correction.
- 3Cress argues contracted data-center projects, durable AI demand, and strong quant signals support selective buying rather than panic.
Don't miss
Cress’s central argument is that the correction lacks a broad debt bubble, making selective buying more plausible than panic.
The brief
Steven Cress argues that the selloff looks unlike a systemic, debt-driven crisis: strong companies are being sold despite solid earnings, creating potential opportunities.
Historical post-midterm performance generally favors gains over the following three, six, and twelve months, though Cress acknowledges short-term dips can persist.
RSP becomes a diversification case study: its equal weighting reduces dependence on the largest technology stocks compared with market-cap-weighted SPY.
Cress uses Allstate and the QG&I portfolio to show how quant selection can pair valuation, profitability, revisions, and dividends across several sectors.
The episode closes on semiconductors and AI: upcoming earnings may need several quarters to prove demand remains durable across data centers, automobiles, phones, and other devices.
What was said on this episode
34 statements · 26 positive · 4 negative · 1 mixed · 3 neutral
Buying during this market panic should outperform remaining fearful.
“if you are thinking of buying the market, you'll be in a much better position than somebody who would panic in this market”
Listen at 0:53
Markets generally rebound quickly after corrections without debt bubbles.
“Most other crises that are not leverage oriented, where there's not a debt bubble, the markets do tend to rebound fairly quickly.”
Listen at 1:46
Markets tend to post positive returns twelve months after non-leveraged corrections.
“you see positive returns 12 months after that correction”
Listen at 1:54
Markets rose in all 19 post-1950 midterm-election instances, averaging 15.1%.
“in all 19 instances, the market was up. And on average, it was up about 15.1%.”
Listen at 3:23
Historical performance favors buying during post-midterm volatility.
“history is definitely in your favor of buying during that volatility”
Listen at 4:02
Steve favors the equal-weight RSP ETF.
“Yeah, I like RSP as well.”
Listen at 4:34
The ten largest S&P 500 stocks comprise 40% of its market capitalization.
“The top 10 stocks in the S&P 500 reflect 40% of the market cap in just 10 names.”
Listen at 5:19
Diversification reduces investment risk and increases returns.
“through diversification, it helps to minimize your risk and maximize your returns”
Listen at 5:53
The current selloff is a favorable time to invest capital.
“this is a really good period if you want to put some capital to work and take advantage of this panic selling”
Listen at 5:58
Leverage and systematic models accelerate selloffs in affected securities.
“it tends to have a much quicker sell-off in a lot of these securities”
Listen at 6:40
Accelerated pullbacks create opportunities for investors buying weakness.
“which lends the opportunity to those who want to take advantage of the weakness during these sharp pullbacks like this”
Listen at 6:52
Strong earnings and upward revisions currently have limited market impact.
“you can have record earnings and you can have a record number of analysts taking their estimates up. It doesn't really matter right now.”
Listen at 8:13
Threats to data-center construction would negatively affect markets.
“any potential threat there, obviously is going to be negative to the markets”
Listen at 8:40
Most existing data-center projects are unlikely to be halted completely.
“It's very unlikely that they're going to stop data centers cold.”
Listen at 8:55
Future data-center projects outside the current pipeline may face some impact.
“There may be some impact on ones that are not even in the pipeline now, perhaps in the future.”
Listen at 9:00
Markets have historically rallied equally under Democratic and Republican administrations.
“the market has rallied just as much under Democrats as it has under Republicans”
Listen at 9:26
Approximately 560 data centers are being built now and 1,100 next year.
“there's like 560 data centers being built now, and there's like 1,100 next year”
Listen at 10:03
Local opposition is unlikely to reject data centers outright because communities want jobs.
“It's very unlikely that they're going to say, we don't want the data center. We don't want the jobs here. Everybody wants jobs.”
Listen at 10:17
Allstate has a Quant Strong Buy rating.
“There's a quant strong buy on it.”
Listen at 11:28
Allstate stock gained 38% over one year and about 29% year to date.
“Over the last year, the stock is up 38%. And year to date, it's up about 29%.”
Listen at 11:30
Allstate compares favorably on valuation, growth, and profitability versus financial peers.
“So we like Allstate on its valuation, on its growth, on its profitability, compared to the rest of the financial sector.”
Listen at 11:41
Higher interest rates benefit Allstate’s investment portfolio.
“it benefits their portfolio”
Listen at 12:15
QG&I gained 12.31%, outperforming its benchmark’s 3.9% gain.
“It's up 12.31% versus its benchmark, which is up 3.9%.”
Listen at 12:56
QG&I contains relatively few technology stocks.
“this actually has very few technology stocks in it”
Listen at 13:10
Market pullbacks are excellent opportunities to invest additional cash.
“Whatever the market does pull back, it's actually an incredible opportunity to put more cash to work.”
Listen at 15:14
“if you just bought the S&P 500 during those pullbacks and you held it for two years, on average, you were 50%.”
Listen at 15:34
Top ten Quant Strong Buys averaged 117% returns over two years after 15% market pullbacks.
“if you bought the top 10 quant strong buys, when the market was down 15% and you held those 10 stocks for two years, you were up 117% on average during those periods.”
Listen at 15:41
The current selloff lacks the broad debt bubble seen in major historical crises.
“There's not a debt bubble like we had during the Doc.com era or the financial crisis or in 1987 or most of these big crises.”
Listen at 16:14
The current market selloff is likely to be relatively short-lived.
“It makes me think it'll be somewhat short term oriented.”
Listen at 16:46
Semiconductor companies may need one or two more quarters to prove earnings and growth durability.
“it might be that we have to go out like another full quarter or two. for companies to demonstrate that the earnings are still there and that the growth is still there.”
Listen at 17:27
AI interest, construction, and semiconductor demand remain strong.
“People are still interested in AI. Building is still occurring. There's huge demand for semiconductors.”
Listen at 17:43
Demand for chips and energy will continue.
“there's going to be continued demand for chips and there's going to be continued demand for energy as well”
Listen at 18:07
Semiconductor companies are financially healthy overall.
“all in all these companies you know are in good shape financially”
Listen at 18:14
The absence of a broad debt bubble reduces concern and supports buying the selloff.
“outside of that is not a broad debt bubble. So for me, that alleviates a lot of concern. And it makes me more interested in using this as an opportunity.”
Listen at 18:28
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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