[SPEAKER_01]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk.
[SPEAKER_01]: Independent Thinking, shared success.
[SPEAKER_01]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.
[SPEAKER_01]: Here is KPP Financial Portfolio Manager, Luke Guerrero,
[SPEAKER_00]: Good afternoon, fellow investors, and welcome back to Invest Talk.
[SPEAKER_00]: I'm your host, Lou Grey.
[SPEAKER_00]: I'm today's Friday, December 12th, 2025.
[SPEAKER_00]: We don't really have much Fridays left in this year.
[SPEAKER_00]: We really only have two more Friday shows before we are diving deep into 2026.
[SPEAKER_00]: And what a year it has been.
[SPEAKER_00]: What a crazy, crazy, crazy year.
[SPEAKER_00]: And you know, sometimes I think it's great to reflect on things that you've learned, on things that you're gonna bring into next year.
[SPEAKER_00]: And really take stock of all that has happened around you.
[SPEAKER_00]: That being said, I want to mention a quick heads up and invite that this year we did something brand new.
[SPEAKER_00]: We will be bringing you exclusively to our YouTube channel, the first ever invest talk holiday special.
[SPEAKER_00]: And that drops on December 18th.
[SPEAKER_00]: Honestly, we filmed it today.
[SPEAKER_00]: It was really, really fun.
[SPEAKER_00]: I think you guys will enjoy it as well.
[SPEAKER_00]: It's an end of the year episode where we look back at the biggest market themes of 2025.
[SPEAKER_00]: Highlight a few lessons.
[SPEAKER_00]: and talk about our caller question of the year.
[SPEAKER_00]: As I mentioned to watch the Invest Talk holiday special head over to YouTube and search Invest Talk with two T's or use the link in today's show notes and while you're there don't forget to subscribe and hit that bell so you don't miss it on December 18th.
[SPEAKER_00]: All right, back to the show at hand and just event we will go over today's market performance and run down those show topics.
[SPEAKER_05]: But let's tackle this caller question now.
[SPEAKER_05]: I have a question about narrative holding, Luxembourg B is in Victor R.T.
[SPEAKER_05]: If you can provide me with any input on this, I really appreciate it.
[SPEAKER_05]: Thanks very much.
[SPEAKER_00]: Vertive Holdings Inc. that is to hear VRT is a digital infrastructure equipment and services name.
[SPEAKER_00]: So I think data centers, communications networks, industrial environments, and power management.
[SPEAKER_00]: system so really they have been a big beneficiary of the data center boom and you see that you're to date up 42% up 20% over the past three months up 29% over the past 52 weeks and that is in spite having a big big decline today down 9.73% but a lot of that is really just what we saw broadly across that AI theme in both hardware and in software as well.
[SPEAKER_00]: Now, it's a bit of an expensive name trading at 34.5 times price to 4 looking earnings well above the average of where it's been over the past five years, but I mean the reason why it's up so much is look at this explosive growth coming out of 2020.
[SPEAKER_00]: 4.3 billion in revenue in 2020 projected to be 10 billion this year at the same time net income has grown from being negative in 2020 to reaching 1.6 billion is where it's projected to be this upcoming year while margins have expanded at both the top line and the bottom line you see gross margin expanding you see EBIT margin expanding net margin expanding return on equity up to 42
[SPEAKER_00]: And so, you know, the question is, okay, going into next year, is the capex trend going to continue amongst the hyperscalers?
[SPEAKER_00]: You know, this isn't a name that is going to try and monetize AI, but rather it's one of those picks and shovel names that has done particularly well, and they've taken a lot of the success a lot of this cash.
[SPEAKER_00]: and they have started to reinvest it within their business with acquisitions.
[SPEAKER_00]: It is a fairly large company, too, a $69 billion market cap with a little bit of debt but not too much only about $3 billion, but again, $1.2 billion in cash on its balance sheet.
[SPEAKER_00]: And so, you know, I think if you're trying to attack the secular growth theme that is AI, this was a great way to do it.
[SPEAKER_00]: I mean, obviously, it's up 42%.
[SPEAKER_00]: Is this drawdown an opportunity to buy into it?
[SPEAKER_00]: Well, if it's a broader rotation, probably not, it's still trading at 34 times, price to forward looking or anything, still trading at 44.8 times, price to cash flow.
[SPEAKER_00]: And so it is still a bit expensive, but definitely a good company that I would certainly keep my eye on headed in to the next year that is, very of holding sticker V RT.
[SPEAKER_00]: Got a lot of ground to cover in the next 45 minutes or so.
[SPEAKER_00]: And here's a little bit of what we have planned for you all.
[SPEAKER_00]: My main focus point concerns this story, institutional window dressing season.
[SPEAKER_00]: As the year closes, mutual funds and hedge funds engage in window dressing, which is the practice of buying winners and selling losers.
[SPEAKER_00]: And they do it to make their quarterly reports look.
[SPEAKER_00]: good.
[SPEAKER_00]: So this kind of creates some artificial price movement.
[SPEAKER_00]: We'll talk about that.
[SPEAKER_00]: We'll talk about four other things that tend to happen at year-end and what it all means for you.
[SPEAKER_00]: We'll also touch on the oil market and how supply surge
[SPEAKER_00]: is going to hit demand lows.
[SPEAKER_00]: And what does that mean for prices in 2026?
[SPEAKER_00]: Also, I tried to talk about silver on Wednesday.
[SPEAKER_00]: I didn't quite have the time.
[SPEAKER_00]: So we'll try to tackle that today.
[SPEAKER_00]: And that's story that I've been trying to bring you for a couple of days now on Bond Investors and their reaction to the Fed finalists.
[SPEAKER_00]: We also have some voice bank calls ready to play.
[SPEAKER_00]: Clean one on Goldman Sachs, the Goldman Sachs, NASDAQ, 100 premium income ETF, that is, ticker GP IQ, not only global X data center and digital infrastructure ETF, ticker DTC, or, as well as some questions that came in from the comment section of the invest talk YouTube channel and hopefully some live calls throughout the show.
[SPEAKER_00]: We are going into a break.
[SPEAKER_00]: Our first break.
[SPEAKER_00]: Please remember you can call any time and leave your questions on the invest stock voice bank.
[SPEAKER_00]: If you're listening via our live stream or on aim 1220 in the Bay Area, give me a call now at 88899 chart.
[SPEAKER_00]: Hang on.
[SPEAKER_00]: I'm going to talk about today's market activity when we return.
[SPEAKER_02]: For the Holidays KPP Financial is excited to introduce a high-value limited time offer, the Holidays State Bundle.
[SPEAKER_02]: It's specifically designed to help new households quickly establish a solid foundation for their financial and personal legacies before the year ends.
[SPEAKER_02]: When you begin a financial relationship with KPP Financial and complete your onboarding by December 31, 2025, you'll receive essential estate planning documents as an added benefit and it's all powered by our trusted partner, Truston Will.
[SPEAKER_02]: Learn more about the holiday estate bundle now at investtalk.com and while you're there, fill out a portfolio review to get started.
[SPEAKER_02]: and now the phone lines are open and waiting for your finance and investment questions 88899 chart.
[SPEAKER_02]: The Invest Talk phone lines never closed and now Luke Guerrero is here, taking your calls live.
[SPEAKER_02]: Invest Talk 88899 chart.
[SPEAKER_00]: negative day overall for markets, the Dow is down 51 basis points, S&P 500 down 1.07% Nasdaq big under performer down 169 small caps Russell 2000 down 150 one and with that the S&P and Nasdaq now logged declines for the week
[SPEAKER_00]: AI enablers high beta stocks all weaker across the board big tech as well was mostly lower Nvidia the notable decliner amongst that group.
[SPEAKER_00]: Industry wide looks like semis software networking communications energy some of the worst performers of the day.
[SPEAKER_00]: Relative out performers included managed care restaurants, airlines,
[SPEAKER_00]: On the bond side, Treasuries came under a bit of pressure.
[SPEAKER_00]: We saw the curve experiencing what's called a bare, steepening yields up about five to six basis points.
[SPEAKER_00]: Five to six percent would be crazy.
[SPEAKER_00]: Five to six basis points at the long end.
[SPEAKER_00]: Same time dollar index ended little change after the sharp drop that we saw yesterday.
[SPEAKER_00]: Well, gold finished up 40 basis points and what was pretty choppy trading and getting falling a massive gain of about 2%.
[SPEAKER_00]: on Thursday.
[SPEAKER_00]: One of the stories we're talking about later, oil, crude oil settling down 30 basis points on the day.
[SPEAKER_00]: But the big story was and continues to be text weakness.
[SPEAKER_00]: Despite what was largely some pretty favorable AI related takeaways from Broadcombs earnings with the bars high.
[SPEAKER_00]: and disruption and dispersion continue to gain traction in the broader AI theme.
[SPEAKER_00]: Unlike the recent trend, markets not really finding much cushion from the rotational dynamics.
[SPEAKER_00]: You saw cyclical rotation has really been the big story as of late, especially with help coming out of December's FOMC decision and meeting.
[SPEAKER_00]: On the day to front, nothing really on the economic calendar today.
[SPEAKER_00]: It was a busy day.
[SPEAKER_00]: of Fed speak, though.
[SPEAKER_00]: Chicago's ghoulsby said he dissented amid a lack of inflation data saying waiting until January presented a little risk.
[SPEAKER_00]: Adding he who is optimistic rates can come down a significant amount in 26 Kansas City Schmid said his dissent reflexes continued belief inflation is too high and policy should remain restrictive.
[SPEAKER_00]: And again, some more Fed Chair drama, the president saying he's leaning towards either former governor, or White House advisor, has it adding, critically, the next chair should consult with him on rates.
[SPEAKER_00]: Looking ahead to next week, another high profile macro week with the November NFP non-Farm payrolls on the 16th and November CPI on the 18th.
[SPEAKER_00]: NFP expected to attract even more attention in the wake of Jerome Powell's comments about data quality and how the Fed staff estimate payroll growth currently being overstated by 60,000 jobs per month.
[SPEAKER_00]: While skit empire manufacturing, NHB housing market index retail sales, existing home sales, University of Michigan sentiment and expectations, also all on the calendar for next week.
[SPEAKER_00]: Busy week next week as we head into the holiday.
[SPEAKER_00]: It is Friday, which means I briefly want to mention the newest KVB Premium Newsletter which will be distributed to subscribers tomorrow.
[SPEAKER_00]: In the KVB Insight section, we discussed the Santa Claus rally and how that might apply to this year.
[SPEAKER_00]: Stock idea section, we mentioned a retail company as well as a home improvement company.
[SPEAKER_00]: And then the portfolio management section, we touched on differences between ETFs and mutual funds.
[SPEAKER_00]: If you're interested in learning more, visit us atinvestalk.com and hit subscribe.
[SPEAKER_00]: For subscribers, the newsletter will hit your inbox on Saturday after news.
[SPEAKER_00]: All righty, it's been a while since we answered once.
[SPEAKER_00]: So let's add a color question now.
[SPEAKER_04]: I was wanting to get your opinion on KBWB.
[SPEAKER_04]: It's in Vesco Bank, EPS.
[SPEAKER_04]: I was wondering where a good entry point on this would be or if we're getting close to a good time
[SPEAKER_04]: your input is appreciated.
[SPEAKER_04]: Thank you.
[SPEAKER_00]: KBWB is the Invesco KBW Bank ETF.
[SPEAKER_00]: What they do is they try and provide exposure, pretty broad exposure to the US banking markets.
[SPEAKER_00]: So they have a portfolio that includes money centers, regional banks, and some thrift institutions as well, all of which must be traded within the United States.
[SPEAKER_00]: Over the past one year, up 27.72% up 33.04%, year to date up 7.65% over the past.
[SPEAKER_00]: Month, fairly, you know, decently large fund about six billion is the assets under management, clocks in at a net expense ratio of about 35 basis points.
[SPEAKER_00]: Now, typically when you have banks, you expect to be a bit more on the value sign, but higher dividend yields here.
[SPEAKER_00]: And you certainly are seeing that a bit 2.36% is the dividend yield of this ETF.
[SPEAKER_00]: Price to books in about 1.48%.
[SPEAKER_00]: As mentioned, US traded company, so 83% of the revenue from the United States concentrated within the banking sector and because of the dominance within banking, large caps make up 94.68% of this portfolio mid caps coming in at 5.23 now.
[SPEAKER_00]: It is a pretty concentrated portfolio.
[SPEAKER_00]: The top 10 makes up about 61.54% of the whole portfolio, and it's only 26 names, right?
[SPEAKER_00]: So you know these top names, Goldman Sachs, Morgan Stanley, Wells Fargo, Bank of America, J.P. Morgan, and taking a look at this,
[SPEAKER_00]: I can tell it's not market-cap-weighted because J.B. Morgan is the biggest out of this whole bunch, when in this portfolio, it's only the fifth largest name.
[SPEAKER_00]: Let's take a look and see how we do this.
[SPEAKER_00]: So they use a cap-a-capped modified market-weighting strategy that comes close to matching the top-heavy nature of this segment.
[SPEAKER_00]: Interestingly enough though that J.B. Morgan comes in where it is compared to Goldman Sachs, which is on top there, meaning they probably look at different industries within banking a bit separately.
[SPEAKER_00]: And this tends to be my advice here.
[SPEAKER_00]: When you're talking about a ETF that gives you 61% exposure to 10 names, when you're talking about a ETF that only holds 26 that is more of a black box about how they have determined weightings.
[SPEAKER_00]: And they're attacking primarily U.S. large cap names.
[SPEAKER_00]: Frankly, 35 basis points, bid two expensive, you could do this yourself.
[SPEAKER_00]: So I like the idea, I think that with credit loosening, obviously QE is a thing now as well, with rates, at least coming down a bit.
[SPEAKER_00]: Banks and benefit, but should you pay 35 basis points to essentially hold 10 of the largest banks?
[SPEAKER_00]: Probably not, thanks to the call.
[SPEAKER_00]: We're headed to New Break.
[SPEAKER_00]: My main focus point, come it up next along with more answers to your finance and investment questions.
[SPEAKER_02]: So stay with me here on Investock.
[SPEAKER_00]: Institutional window dressing sounds a little bit fancy, but in reality it's one of the problems that really faces markets in December and December 2025 is shaping up to one of those rare months where almost every major market force converges at once.
[SPEAKER_00]: Creating conditions that can define the tone pretty early for 2026.
[SPEAKER_00]: You've got the feds final meeting of the year.
[SPEAKER_00]: You've got critical inflation and labor data.
[SPEAKER_00]: You've got heavy seasonal flows.
[SPEAKER_00]: Any of a fewer trading days, all colliding in a very, very tight window.
[SPEAKER_00]: And that combination alone explains why markets often feel unstable or even
[SPEAKER_00]: And so, understandably, investors are pretty deeply split.
[SPEAKER_00]: On whether the Fed cuts rates while the bond market and Fed officials continue to send Mitz McSignals.
[SPEAKER_00]: The inflation is cooling in some areas, but remains sticky in others.
[SPEAKER_00]: And consumers are still spending, but clearly showing fatigue.
[SPEAKER_00]: And that uncertainty means that every data point this month carries extra weight, because it feeds directly into rate expectations.
[SPEAKER_00]: Now, the first major signal that we've seen in December comes from Black Friday and Cyber Monday spending, which gives the Fed an early read on demand strength, strong spending supports a higher for longer narrative while weak numbers immediately revive expectations for radians.
[SPEAKER_00]: That data sets the psychological tone heading into the Fed's December.
[SPEAKER_00]: Decision is just one of many factors affecting markets this year.
[SPEAKER_00]: Labor data has added fuel to this fire because jobs remain the Fed's primary signal for weather policy is really tight enough.
[SPEAKER_00]: week unemployment report all of these factors, all these macro events are compressed into fewer trading days and so price action can become exaggerated and even abrupt.
[SPEAKER_00]: That's one of the things that drives prices in December.
[SPEAKER_00]: That's one reason why stock prices often behave strangely at the end of the year.
[SPEAKER_00]: Another reason liquidity thins out as traders step away for the holidays.
[SPEAKER_00]: With your participants even normal size trades, they can put prices much further than usual.
[SPEAKER_00]: On top of that, you have this institutional behavior that starts to dominate market flows.
[SPEAKER_00]: This window dressing.
[SPEAKER_00]: fun sell losing positions to lock in tax loss harvesting and buy winners to make portfolios look better in year end reports it creates this rotation that has little to do with fundamentals and everything to do with calendar mechanics.
[SPEAKER_00]: Do you can often tell these moves apart by looking at volume and looking at follow-through if a stock spikes or drops on the volume and reverses quickly, in early January?
[SPEAKER_00]: It was like driven by this positioning rather than new information.
[SPEAKER_00]: Genuine moves, tied to earnings power, macro shifts,
[SPEAKER_00]: They tend to hold their gains once normal liquidity returns.
[SPEAKER_00]: What's another clue that something is looking a little weird that might be part of this window dressing.
[SPEAKER_00]: Well, if multiple stocks in the same sector move together without news, that often signals this institutional rebalance rather than the stocks specific conviction.
[SPEAKER_00]: So we talked about a couple of things, a bunch of data coming in at the end of the year.
[SPEAKER_00]: This year specifically, the Fed making certain moves.
[SPEAKER_00]: A lot of retail investors go, and you know what?
[SPEAKER_00]: The years over, time has been time with my family, and then this institutional window dressing.
[SPEAKER_00]: And so for individual investors, it's got to raise as an important question here about whether late December is a bad time to buy stocks.
[SPEAKER_00]: Now.
[SPEAKER_00]: As with everything there's caveats here, the answer is not a blanket yes or no, but it does require a bit of caution.
[SPEAKER_00]: Buying into sharp year and momentum without understanding the source of the move can expose you to those quick reversals in January and at the same time, forced selling tied to taxos harvesting can create temporary mispricing and fundamentally sound companies.
[SPEAKER_00]: That's why
[SPEAKER_00]: More than any other month, late December often rewards patients more than urgency.
[SPEAKER_00]: Watching OSTOX behave, once January liquidity returns, is often more informative than reacting to December price swings.
[SPEAKER_00]: In short, December markets, they're not broken, they're distorted by timing, by mechanics,
[SPEAKER_00]: and understanding that this dynamic is often the difference between protecting capital and chasing noise.
[SPEAKER_00]: And so, we always stress.
[SPEAKER_00]: We always stress to investors that there is a lot of noise out there.
[SPEAKER_00]: And the toughest thing is to discern what is signal and what is not.
[SPEAKER_00]: What is important to your portfolio and what is not.
[SPEAKER_00]: So, pay particular attention.
[SPEAKER_00]: understand the confluence of events that tends to drive markets in any December, but especially this December, and prepare yourself as we head into 2026.
[SPEAKER_00]: Speaking of heading into 2026 and preparing yourself, if you haven't already, head over to the Invest Talk YouTube channel, over on YouTube, search Invest Talk with two T's.
[SPEAKER_00]: One of our latest posts, I think, is a very important one.
[SPEAKER_00]: And it is an update for you on what you should be thinking about with regards to taxes.
[SPEAKER_00]: That's right, our latest invest talk, Well the webinar was about our year-end tax toolkit for all investors.
[SPEAKER_00]: They went through what is changing heading into 2026 from tax law because it is a particularly important year.
[SPEAKER_00]: And what types of things you should look to recognize this year versus delay into next year?
[SPEAKER_00]: And how various strategies can prepare you not just in December for tax season,
[SPEAKER_00]: That webinar, including all the Q&A, is posted down on our YouTube channel.
[SPEAKER_00]: On the next interview, we will dig into this topic of global divergence, Europe stalls, U.S., Chugs along.
[SPEAKER_00]: Recent data shows that the U.K. economy is shrinking, and German industrial production is stalling.
[SPEAKER_00]: While USPMI data remains robust, this divergent suggests that the US remains the cleanest dirty shirt in the global economy, will continue next year.
[SPEAKER_00]: That's Monday, but for now I'm Luke Guerrero, ready to take your calls at 888-99 chart.
[SPEAKER_02]: Again, is here or almost here, but you've got an answer to investment questions, so step up and call in.
[SPEAKER_02]: Invest talk, 888 99 chart.
[SPEAKER_03]: Hey, guys, Brian from Rotterdam here.
[SPEAKER_03]: I'm a big fan of the show.
[SPEAKER_03]: I have a missing episode in over five years.
[SPEAKER_03]: And I wanted to get your take on an ETF, DTCR, global data center, and digital infrastructure.
[SPEAKER_03]: I was curious, would this be a good way to gain exposure to the PIX and shovel part of AI?
[SPEAKER_03]: I know it's a reeks, some non-reek companies, it's pretty well-diversified, domestically and internationally.
[SPEAKER_03]: And I am after growth, but the dividend is cherry on top, but it has a dividend of 1.3 percent, and also expense ratio, 0.5, right?
[SPEAKER_03]: You think I'd be better off just picking some of its holdings that do have a higher dividend
[SPEAKER_03]: and also the ETFs really only been around for five years, right?
[SPEAKER_03]: So it's five years enough time to determine if the ETF is ran properly, and now it's forward to hearing your answer, and thank you guys for what you do.
[SPEAKER_00]: DCTR is the Global X Data Center and Digital Infrastructure ETF.
[SPEAKER_00]: It addresses firms from both developed and emerging markets.
[SPEAKER_00]: The drive a bulk of their revenue,
[SPEAKER_00]: in data centers, and digital infrastructure.
[SPEAKER_00]: So you're looking at ownership, operation, and development of these data centers, as well as some exposure to cellular towers.
[SPEAKER_00]: Pass one, you're up 27% up 31.50% year to date.
[SPEAKER_00]: As the caller mentioned, 50 basis points expense ratio and just under a billion, significantly under a billion in assets under management.
[SPEAKER_00]: is where it sits as of click close today.
[SPEAKER_00]: Pretty well diversified out in terms of revenue right 45.75% comes from the United States.
[SPEAKER_00]: A bit from China 17.95% and then a bunch of other countries as well.
[SPEAKER_00]: 7.6 from Europe 38.94 from Asia Pacific and pretty well diversified across the
[SPEAKER_00]: percent coming from large caps, 24% from mid caps, 6.63% from small caps and a lot of these names are familiar names, digital reality, trust, American tower corp, crown, castle, some very large reeds in here, and remember reeds tend to be a bit rate sensitive, so big changes, unexpected changes, can certainly be a something that hurts performance.
[SPEAKER_00]: So, am I concerned a bit?
[SPEAKER_00]: Well, top 10 makes up 67% of the portfolio.
[SPEAKER_00]: Only holds 26 names.
[SPEAKER_00]: I think we find ourselves in a very similar situation to the financial ETF that we looked at earlier in this show.
[SPEAKER_00]: Where you're paying pretty decent clip 50 basis points for a fun that is primarily just view as reads.
[SPEAKER_00]: And so, I'm going to give the same conclusion here that I gave in the other one.
[SPEAKER_00]: If you're looking at ETFs that hold so few names that are so top-heavy, I think it is probably ill-advised to pay an expense ratio like this in order to get exposure that you could really get yourself by holding a handful of names in a diversified way.
[SPEAKER_00]: That is DCTR, rather DTCR, apologies.
[SPEAKER_00]: The Global X data center and digital infrastructure
[SPEAKER_00]: ETF.
[SPEAKER_00]: Now it is Friday and we generally we try and fit in a little bit of time to give you a quick rundown of key benchmark numbers.
[SPEAKER_00]: To your treasure yields at 3.5 to 8% today.
[SPEAKER_00]: Last week it was 3.554 and 206 weeks ago it was 0.64.
[SPEAKER_00]: 10 year yield, 4.19% compared to last week when it was
[SPEAKER_00]: Gold, $59 higher than last week sat at 4,297 per ounce, 19 weeks back that number was 33, 48,198 weeks ago that number was 1806.
[SPEAKER_00]: Silver came in at 61,90 that is $2.91 higher than last week, substantially higher than 96 weeks ago and it was 22,80 and higher still
[SPEAKER_00]: oil, 5762 per barrel today, $2.76 less than last week.
[SPEAKER_00]: 64 weeks back, it was 6779.
[SPEAKER_00]: 166 weeks back, it was 7430 and 205 weeks ago.
[SPEAKER_00]: The number is 6662.
[SPEAKER_00]: National average for a gallon of regular gasoline is two 93 today, for cents lower than last week.
[SPEAKER_00]: 132 weeks back, that number was 35680 weeks back, that number was 425.
[SPEAKER_00]: And look at all the way back, 200 weeks close to four years a gallon of regular gas cost 357.
[SPEAKER_00]: In California, it was averaging 439 per gallon, 10 cents less than it was last week.
[SPEAKER_00]: 110 weeks ago, that number was 532 and 186 weeks back, that number was 587.
[SPEAKER_00]: For comparison, in the great state of Iowa, gas is averaging $2.50 per gallon today, but it's $2.19 less than gas in California.
[SPEAKER_00]: I think it's pretty good segue, because one of the world's largest commodity traders,
[SPEAKER_00]: sending out a bit of a warning that the oil market could face a super glut.
[SPEAKER_00]: There weren't.
[SPEAKER_00]: It's not mine.
[SPEAKER_00]: A super glut.
[SPEAKER_00]: That sounds horrible.
[SPEAKER_00]: I don't even know that means.
[SPEAKER_00]: But next year is when this super glut is expected as a wave of new supply.
[SPEAKER_00]: collides with a slowing global economy.
[SPEAKER_00]: This assessment says that it's hard to avoid a surplus scenario with aggressive drilling projects ramping up just as demand growth starts or rather continues to weaken.
[SPEAKER_00]: Brent Crude is already down 16% this year on track for the worst performance since 2020 and fresh supply from Brazil and Diana is expected to add a bit more pressure
[SPEAKER_00]: A key swing factor is seeing sharply reduced electric vehicle adoption, or rather that the adoption of electric vehicles is sharply reducing the demand for gasoline.
[SPEAKER_00]: This is slowing future consumption growth.
[SPEAKER_00]: Low prices have also encouraged China to buy crude for its strategic reserves, but
[SPEAKER_00]: That buying would need to stay pretty elevated, just to delay this supposed superglut.
[SPEAKER_00]: Now, the US is also a big contributing factor here, right?
[SPEAKER_00]: President Trump is pushing a renewed drill maybe drill agenda, which is aimed at boosting domestic production.
[SPEAKER_00]: And so supply is and should be coming online.
[SPEAKER_00]: Against that backdrop, right?
[SPEAKER_00]: Trafigura, this analyst, where this analyst was from, posted net profits of 2.7 billion, slightly lower than last year, and the firm's weakest results in five years after a period of war driven windfalls.
[SPEAKER_00]: Meadows trading was a bit of a bright spot for them with the record profits driven in part by shipping copper into the US ahead of tariff disruptions and shifting trade rules.
[SPEAKER_00]: That's all to see that there's been a bit of a reshuffling amongst the commodity market.
[SPEAKER_00]: We've been talking pretty much every day about gold, right?
[SPEAKER_00]: Gold has been surging for the better part of two years now.
[SPEAKER_00]: We've spoken about copper, the demand for copper as an input to from everything from data centers, to power infrastructure, to electric vehicles, and then we're talking about oil, because oil could be moving in the opposite direction.
[SPEAKER_00]: Right, a lot of oil companies have been thinking about pairing back some sharing purchases from what could potentially be a fall in revenue.
[SPEAKER_00]: We're already sitting in the high fifties.
[SPEAKER_00]: Is it possible that oil could dip into the mid fifties?
[SPEAKER_00]: Maybe even the low fifties could that be a historic opportunity to pick up stock and oil companies that might suffer from this continued slump.
[SPEAKER_00]: Either way, something we actually talked about on the holiday special when we filmed it today, oil, other commodities likely to be a critical theme heading into 2026.
[SPEAKER_00]: Keep things moving and hit another question that came in earlier to be in best talk voice pick.
[SPEAKER_06]: Hi, my question today was about fifth third bank core figure FITB.
[SPEAKER_06]: I don't have any exposure to finance, so I was just looking to see if this is a bank that you guys think could be good and if so I want price.
[SPEAKER_06]: So this is whether you think this was something that'd be good to add a position or if I should be more patient and
[SPEAKER_06]: If I should be more patient, kind of a good timeframe to wait before getting in.
[SPEAKER_06]: Looking for your answer on the podcast.
[SPEAKER_06]: Thanks as always, guys.
[UNKNOWN]: Bye.
[SPEAKER_00]: Fifth, third bank is a regional bank about $31 billion market cap regional bank.
[SPEAKER_00]: And it focuses really on consumer and small business banking as well as wealth and asset management.
[SPEAKER_00]: From an earnings perspective, most recent quarterly earnings in Q3 did beat the analyst consensus, which is certainly positive.
[SPEAKER_00]: You're to date, it's only about 13.88% actually in line with the industry.
[SPEAKER_00]: Regional banks have struggled a bit, right?
[SPEAKER_00]: As rates went up,
[SPEAKER_00]: a lot of the bonds that were on deposit there, they had banked in losses on their books.
[SPEAKER_00]: Some banks went under in 2023.
[SPEAKER_00]: We all remember what happened.
[SPEAKER_00]: And so the systemic stress within the regional banking system really led us to believe, okay, still even the rates are coming down a bit.
[SPEAKER_00]: There could be some hidden risks here.
[SPEAKER_00]: If you're trying to get exposure, is this where you really want to be?
[SPEAKER_00]: Now, I mean, this name is trading at the upper end of where it's traded over the past five years, sitting at two times price to book value.
[SPEAKER_00]: And it's not interesting.
[SPEAKER_00]: It comes really only grown 3.3% on an annualized basis.
[SPEAKER_00]: It's R-O-E, sits where it's sat for the past three, four years at about 12%, and so the question is, okay.
[SPEAKER_00]: Given that rates are coming down, are there any structural catalysts that can really drive fifth or third bank higher or the regional banking system more broadly?
[SPEAKER_00]: But for you specifically, if you don't have any financial exposure at all,
[SPEAKER_00]: I don't think that the one name you want to should hold is a midcap regional bank.
[SPEAKER_00]: Again, because of those outsized asymmetric risks, especially one that is currently trying to execute a merger, which tend to be, you know, frankly historically, more mergers
[SPEAKER_00]: Surprised to the downside than to the upside in the year following an acquisition.
[SPEAKER_00]: And so this all goes to say, if you're looking for financial exposure, I'd probably start a little bit higher on the Fuji that is fifth third bank court, ticker, FITB.
[SPEAKER_00]: All right, let's make it tune around with TVK, the big question here.
[SPEAKER_08]: Hello, invest talk.
[SPEAKER_08]: This is Carl from Florida.
[SPEAKER_08]: I would like to get your assessment of a Canadian company, TerraVess.
[SPEAKER_08]: Trades on the Toronto Stock Exchange under the ticker symbol.
[SPEAKER_08]: T is in Tom, V is in Victor, K is in Kellogg.t0.
[SPEAKER_08]: Thank you very much.
[SPEAKER_00]: Oh, Kido?
[SPEAKER_00]: Okay, let's take a look at Teravest.
[SPEAKER_00]: As mentioned, trades on the Canadian stock exchange, the TSE, it's $3.5 billion market cap company, so pretty small, what they do is they manufacture and sell industrial equipment and services to agriculture, mining, chemicals, utilities, and transportation, so pretty broad exposure here in terms of their customer base.
[SPEAKER_00]: It has compared to the TSX,
[SPEAKER_00]: which is the Canadian Stock Exchange composite, the form very well going back to 2019.
[SPEAKER_00]: And I mean, this is the relative strength there.
[SPEAKER_00]: It's pretty crazy performance.
[SPEAKER_00]: It's up 37% year to date.
[SPEAKER_00]: It's up 22% over the past 52 weeks.
[SPEAKER_00]: It has outperformed pretty much every year going back to 2019.
[SPEAKER_00]: Ernest for share.
[SPEAKER_00]: Up, beat consensus on the most recent quarterly earnings.
[SPEAKER_00]: And so after big gains, the question is, what are valuations sitting at?
[SPEAKER_00]: Any time we see a big gainer here, any time we see a positive momentum name like this, we have to ask that question.
[SPEAKER_00]: Well, it's sitting at 47 times price to forward looking earnings.
[SPEAKER_00]: The high really is 49 over the past five years.
[SPEAKER_00]: So it's about as expensive as it has ever been.
[SPEAKER_00]: Now is this justified maybe, but there's a bit of downside risk here that you're starting to see in terms of trend, right?
[SPEAKER_00]: Over the past couple months, a downward trend, except for recently after earnings, had a bit of an out performance, and then taper, sorry, right before earnings, had a bit of strength.
[SPEAKER_00]: It's since tapered down a bit.
[SPEAKER_00]: Frankly, I think that the benefit to this name is how broad its exposure is in terms of its client base, right?
[SPEAKER_00]: It is selling to all sorts of businesses, meaning that should one sector struggle,
[SPEAKER_00]: Should the cycle move against it?
[SPEAKER_00]: It's got a bit of broad exposure.
[SPEAKER_00]: It's fundamentals.
[SPEAKER_00]: Certainly, solid.
[SPEAKER_00]: Let's take a look at its depth position here.
[SPEAKER_00]: I mean, it's only sitting on about 800 million of long-term debt.
[SPEAKER_00]: Bunch of assets, free cash flow starting to improve.
[SPEAKER_00]: I don't know.
[SPEAKER_00]: Still a bit expensive for me, especially with free cash flow actually declining recently.
[SPEAKER_00]: So for now, I'd keep it on my watch list that is teravest industries to your TV, okay?
[SPEAKER_00]: You know what?
[SPEAKER_07]: Thank you so much for everything you guys do.
[SPEAKER_07]: Your program is extremely informative for folks like us who are small investors.
[SPEAKER_07]: I would really appreciate if you could give me an entry point for a company called Metronic MDP.
[SPEAKER_07]: I would like to get an entry point into this company.
[SPEAKER_07]: Really appreciate it.
[SPEAKER_07]: Thank you so much.
[SPEAKER_00]: Yeah, well, I think we actually talked about Metronic on Wednesday.
[SPEAKER_00]: And, you know, year to date, it's up 25%, it's up 21% over the past 52 weeks.
[SPEAKER_00]: It was actually positive today for those of you who were not listening to the Wednesday show, or maybe haven't listened yet.
[SPEAKER_00]: Medtronic is a medical technology company that has all sorts of products, right?
[SPEAKER_00]: cardiovascular to neurological to surgical to diabetes, pretty well diversified amongst the groups right 37 cardio 29 neuro surgical 25 so well diversified med tech business and it's trading at the average of where it's been over the past five years on a price or earnings basis on price to book really across the board here.
[SPEAKER_00]: And a bit of a rough 2024, but again, a solid 2025, you're seeing growth again, nearly 10% growth year over year in revenue.
[SPEAKER_00]: And so, you know, for us, we hold, as I mentioned, Metronic in actually a couple of our strategies, we think within the device's space, it is one of the better names, and it's trading at the average of where it's been.
[SPEAKER_00]: So, frankly, I think it's pretty well priced now.
[SPEAKER_00]: That is a Metronic PLC, Tigger MDT.
[SPEAKER_00]: This is Invest Talk.
[SPEAKER_00]: I'm Lou Guerrero, we have one goal here and that is to help you achieve your financial freedom through lots and lots and lots of education.
[SPEAKER_00]: Our work continues after this break, it is our final break of the week, so get your questions and now at 888-99 chart.
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[SPEAKER_09]: Hello, I'm this talk.
[SPEAKER_09]: I'm looking at an EPS and wanted to get your opinion.
[SPEAKER_09]: It's the
[SPEAKER_09]: wanted to see if this be a good one to get into.
[SPEAKER_09]: and I'll be listing to a podcast.
[SPEAKER_09]: Thank you.
[SPEAKER_00]: GPIQ is the Goldman Sachs Nasdaq 100 premium income ETF.
[SPEAKER_00]: So what it does is it holds names within the Nasdaq 100 and it combines those equity investments with a call strategy.
[SPEAKER_00]: This is a covered call ETF.
[SPEAKER_00]: Again, interesting because we just talked about this in a way on our holiday special.
[SPEAKER_00]: And this ETF is there for going to get less of a return.
[SPEAKER_00]: Then the NASDAQ indexes, but hedge bit to the downside, right?
[SPEAKER_00]: That's the point of covered call strategies.
[SPEAKER_00]: For those of you who don't know a covered call on an individual stock is when you buy stock, you write a call option, and that gives somebody else that you are selling it to the ability to buy that stock at a price, and you in return get what is called a premium income.
[SPEAKER_00]: If the stock price goes above the strike price, obviously, if you are the investor who holds that call option, well, it's beneficial for you to buy the stock at the lower price, sell it for the higher one, right?
[SPEAKER_00]: So it gets called the way.
[SPEAKER_00]: That's how your upside is capped.
[SPEAKER_00]: Your downside is hedged a bit because you're getting that premium income.
[SPEAKER_00]: The market goes down, you don't go down as much as that stock, right?
[SPEAKER_00]: Because you have the premium income makes up for a bit of a turn.
[SPEAKER_00]: One issue is, is that investors then look at these things, these ETFs and say, oh, well, the yield is high.
[SPEAKER_00]: Because they're reporting the yield as the income from the premiums, as well as the yield of the individual stocks, meaning you're getting a long-term distribution yield of 9.7%.
[SPEAKER_00]: But that's where understanding the dynamics matters, because if you're an investor and you're seeing a yield of 9% you're probably thinking dividend.
[SPEAKER_00]: And a dividend is when you just hold something and you get money for holding it, right?
[SPEAKER_00]: That's the point of a dividend returning money to shareholders.
[SPEAKER_00]: But this carries risks because those stocks can be called away.
[SPEAKER_00]: That being said, it doesn't mean covered calls are bad strategies.
[SPEAKER_00]: We actually have one ourselves.
[SPEAKER_00]: What I'm trying to get at is you should understand where you're holding here.
[SPEAKER_00]: So, the Nasdaq 100 premium income ETF, it's a cover call strategy, Nasdaq 100 is its universe, meaning it's going to be highly concentrated in tech, 67.47% is tech, knowledge, and it does it for a pretty cheap fee, I would say, relatively 35 basis points here.
[SPEAKER_00]: But you know, it doesn't mean you're not exposed to a lot of downside.
[SPEAKER_00]: You are highly concentrated within a couple of names.
[SPEAKER_00]: The top tenult's 55% Nvidia Apple Microsoft alphabet, Broadcom, names that tend to move in a correlated fashion.
[SPEAKER_00]: Meaning that if there's a bit of a pullback or a lot of a pullback within the AI space, this EGF could suffer greatly.
[SPEAKER_00]: So, I think if you're trying to get a covered call strategy, it's best to do it on a more broadly diversified, less centrally exposed ETF, so that you don't have the potential to have massive downside risk, especially given the reason why you hold some of these names is for that upside growth.
[SPEAKER_00]: What you're giving up?
[SPEAKER_00]: Goldman Sachs NASDAQ 100 premium income ETF, GPIQ, thanks for the call.
[SPEAKER_00]: Silver, up, a lot, just like gold.
[SPEAKER_00]: An annul-seventh expectation of a near-term, fed-a-rate cut, adding this moment.
[SPEAKER_00]: But the deeper driver is, as with what we're talking about with copper, a structural supply, deficit in its last five consecutive years.
[SPEAKER_00]: Silver's demand isn't just coming from jewelry or coins.
[SPEAKER_00]: Industrial uses like electronics and solar panels have also grown rapidly.
[SPEAKER_00]: And on my gold, it's output is mostly a byproduct of mining, not just gold itself, right?
[SPEAKER_00]: Gold, you mine gold, silver, you mine other metals, and gold is silver's the byproduct of that.
[SPEAKER_00]: Making it difficult for producers to ramp up supply quickly when prices spike.
[SPEAKER_00]: Meanwhile, that massive stockpile built earlier this year by the US, driven by fears of potential tariffs, has artificially inflated inventories, a lot, roughly tripling historic levels.
[SPEAKER_00]: That cushions now shrinking, analysts are warning its masking, deeper, global shortage issues.
[SPEAKER_00]: So while a lot of people are thinking about gold, the dynamics that affected the rise of silver are also likely to continue into the future.
[SPEAKER_00]: I'm Luke Graham, this completes another invest talk.
[SPEAKER_00]: Justin and I thank you for listening and encourage you to tell your friends and family members about our free podcast downloads, which you can get at iTunes and Spotify.
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