Oct 12, 2026 · 44 min
Tax-loss candidates expose the market’s valuation fault lines
5 Stocks to Sell for Tax-Loss Harvesting
The episode connects macro uncertainty and narrow market leadership to a practical review of stocks whose losses may warrant harvesting.
- 1Rising yields, oil prices, and narrow breadth are testing a market rally still centered on artificial-intelligence investment.
- 2Morningstar’s updated views on Marvell and Constellation Brands show how company-specific research can challenge broader market positioning.
- 3Roblox, Robinhood, Netflix, Cava, and Progressive illustrate different valuation, momentum, and uncertainty cases for tax-loss harvesting.
Don't miss
Dave Sekera’s five-stock tax-loss screen contrasts weak momentum, premium valuations, and uncertainty across Roblox, Robinhood, Netflix, Cava, and Progressive.
The brief
Sarah Hansen and Dave Sekera assess a resilient stock market facing higher rates, oil prices, narrow breadth, and uncertainty around inflation and Federal Reserve policy.
Upcoming bank earnings and ASML’s results become tests of financial-sector health and semiconductor-capacity spending, while Morningstar updates its views on Marvell and Constellation Brands.
A barbell-strategy question exposes the central portfolio tension: attractive individual valuations may matter less when macro risks and market-wide positioning dominate.
The tax-loss discussion moves from Roblox and Robinhood’s weak momentum or rich valuations to Netflix, whose price could fall without a matching cut to fair value.
Cava and Progressive complete the list, showing how high-growth restaurant stocks and a strong insurance sector can still carry substantial valuation risk.
What was said on this episode
25 statements · 8 positive · 14 negative · 3 neutral
France may receive at least a one-notch Moody’s downgrade later this month.
“Honestly, I wouldn't be surprised to see them downgrade the country at least one notch there.”
Listen at 4:45
Further credit-rating downgrades could occur if European bond spreads remain elevated.
“So we could even see further rating downgrades ahead if we stay at these kind of levels.”
Listen at 5:03
Market breadth during earnings season will indicate how equities trade into year-end.
“And I think that's going to be the real indicator for how the market's going to trade into year end.”
Listen at 7:15
Inflation appears to be worsening slightly rather than improving.
“it still seems like inflation overall is still getting at kind of that slightly getting worse stage as opposed to getting better.”
Listen at 9:02
Major U.S. banks should meet or exceed their typical guidance near term.
“Overall, I don't think there's going to be any near-term issues. I don't see any reason why they shouldn't be able to meet or beat their typical guidance.”
Listen at 9:36
Goldman Sachs and Morgan Stanley should report strong results.
“Should be pretty strong results.”
Listen at 10:42
Strong ASML results would indicate short-term upside potential.
“If so, it certainly shows that there's going to be more upside potential in the short term.”
Listen at 12:16
ASML shares could decline further.
“I think it also has the potential to fall even further from here.”
Listen at 12:24
Overall alcohol consumption continues to decline.
“alcohol consumption in general continues to decline.”
Listen at 15:19
Investors should overweight value and growth while underweighting core equities.
“you want to have this barbell-shaped portfolio of being overweight value, overweight growth, and then to pay for that, you have to underweight core.”
Listen at 19:10
Investors should continue holding highly rated growth-category technology stocks.
“you want to still hold those four and five star rated tech stocks that are in the growth category.”
Listen at 19:32
The Federal Reserve is not expected to raise rates after December’s hike.
“we don't expect any hikes after that.”
Listen at 22:28
Treasury yields above 5.5%, approaching 6%, would change his equity stance.
“if we start getting above 5.5 and it looks like we're going to get to a 6% handle, that's going to be a different story.”
Listen at 24:38
Tax-loss harvesting can prompt selling losing stocks with poor outlooks or valuations.
“I think this is a good way of forcing yourself to sell some of those stocks that are losers, especially those where maybe the outlook is still relatively poor or at least the valuation is poor.”
Listen at 25:54
Tax-loss candidates ideally have one- or two-star ratings and appear overvalued.
“I was looking ideally for a stock which is rated one or two stars, stocks that we think are overvalued.”
Listen at 26:28
Roblox has substantial downside if it fails to restore priced-in growth.
“if they're not able to get back to that kind of growth that's being priced into the marketplace today, yeah, I do think that there could be a lot of downside left to come.”
Listen at 30:25
Robinhood still has potential downside.
“it still shows there is still some potential downside in the stock”
Listen at 31:13
Robinhood’s valuation alone supports a sell recommendation.
“valuation alone tells me that this is probably a sell.”
Listen at 31:45
Robinhood’s business model gamifies trading rather than emphasizing long-term investing.
“In my mind, I think this is a company that's really gamified trading.”
Listen at 31:53
Investors should avoid Robinhood.
“this is one, personally, I'd steer far, far away from.”
Listen at 34:20
Netflix remains suitable for harvesting losses to offset gains elsewhere.
“I still think it's a good candidate to lock in some of those losses and use those losses to offset gains elsewhere.”
Listen at 35:20
Netflix’s long-term thesis would remain intact if its rating reaches four- or five-star territory.
“if it trades down enough that it goes into four or five star territory, our long term investment thesis is holding up.”
Listen at 36:12
High-growth restaurant stocks can plunge when their growth rate slows.
“once the rate of growth starts to slow, that's when you see these stocks plummet”
Listen at 38:12
Slowing insurance-sector growth should produce negative market sentiment.
“as the market starts to see that slowing growth, that should drive a negative sentiment across the insurance space.”
Listen at 41:32
Many insurance stocks likely have further downside before becoming undervalued.
“I think a lot of these insurance stocks have further to fall before they get to the point that the market's going to see them as being undervalued or cheap.”
Listen at 41:39
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.