Deep Dive: The U.S. stock market has now split into the ‘haves’ and ‘have nots’

You might have heard analysts and investors saying the U.S. stock market is in the “late innings” of the bull cycle.

Tom Plumb, who runs the Plumb Balanced Fund, says instead that the market is “bifurcated” into “haves” and “have nots.” The “haves” are companies that “generate tremendous free cash flow with recurring revenue streams,” he said. (Free cash flow is cash flow after planned capital expenditures.)

The “have nots” include slow growers, even if they are considered value stocks, and the cyclical companies that have been replaced “as the most important movers of the markets,” he said in an interview Feb.

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