[SPEAKER_02]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is invest talk, independent thinking, shared success.
[SPEAKER_02]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.
[SPEAKER_02]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.
[SPEAKER_00]: Good afternoon fellow investors and welcome back to Invest Talk.
[SPEAKER_00]: This is our
[SPEAKER_00]: Tuesday, December 2nd 2025, edition of Invest Talk, and we're solidly now into the holiday season.
[SPEAKER_00]: We have Black Friday behind us, I've remunned a behind us, and a lot to unpack as we finish out this year and head into 2026, which is the handful of weeks away.
[SPEAKER_00]: So this hour is dedicated to that endeavor as well as the broader endeavor, which is
[SPEAKER_00]: helping you become a better investor to make smart decisions with your money consistently week after week, month after month, year after year.
[SPEAKER_00]: Not about one good decision, they're getting that one stock tip or something like that, it's having a foundation for smart decision-making on a regular basis.
[SPEAKER_00]: So that's what this hour is dedicated to and most of all it's
[SPEAKER_00]: Answering your finance investment questions, that's our main way we do it, but also I have topics that will bring to the table as well that I think are important to look at, especially our main focus point, which I like it today in a big way, it's about commodities and it's home for me.
[SPEAKER_00]: Now, just quick heads up before we embark on the rest of the hour.
[SPEAKER_00]: We do have a webinar coming up a week from today, December 9th, year in tax toolkit, armedee planning tax loss, harvesting, and deferral strategies.
[SPEAKER_00]: Important topic to discuss as we head to the finished line for 2025.
[SPEAKER_00]: This will be on, once again, December 9th from 11am to 12pm.
[SPEAKER_00]: The civic time, be sure to pre-register over on BestTalk.com.
[SPEAKER_00]: Now, I'm just a bit, I'll talk about today's mark performance and run down the show topics for the next hour, but as usual, we'll tackle this college question right now.
[SPEAKER_03]: Bye there.
[SPEAKER_03]: We'll be at a good Thanksgiving holiday.
[SPEAKER_03]: Just wanted to call on soft ticker, G-L-S, techno glass.
[SPEAKER_03]: I'm sorry, this is Duncan from New York.
[SPEAKER_03]: Just looking to see if this is going to be a hold sale or should I buy it more?
[SPEAKER_03]: This is one of my
[SPEAKER_03]: lowest performance stops at my portfolio right now.
[SPEAKER_03]: Thank you very much.
[SPEAKER_03]: Have a good day.
[SPEAKER_00]: Hi.
[SPEAKER_00]: All right, looking at techno glass, the manufacturer tempered safety, laminated, and thermo accused the glass for commercial and residential buildings.
[SPEAKER_00]: And it's definitely an adount trend relative strength is not great.
[SPEAKER_00]: Let me see if I get this to reload.
[SPEAKER_00]: There you go.
[SPEAKER_00]: It's nine.
[SPEAKER_00]: And it's fallen from a 52 week high at $90.34.
[SPEAKER_00]: Now we're at $50 down 44% in not a very long period of time.
[SPEAKER_00]: That $90 was back in with this early June.
[SPEAKER_00]: So four or five months, you're down 44%.
[SPEAKER_00]: And that's because earnings, which we're accelerating in a really breakneck pace,
[SPEAKER_00]: Last year, $3.65.
[SPEAKER_00]: It was down a percent from the previous year, but earnings are now expected to be 380 this year, but those expectations continue to come down.
[SPEAKER_00]: So analysts are downgrading expectations, and that's being reflected in the stock.
[SPEAKER_00]: So,
[SPEAKER_00]: Yeah, I mean, the trend is your friends until it ends and then this has ended.
[SPEAKER_00]: So I see no reason to keep this, the technicals are just too poor.
[SPEAKER_00]: It's bouncing a little here, but I don't, I don't, I don't get excited about it.
[SPEAKER_00]: To be honest with you, the business is,
[SPEAKER_00]: is decent, but it doesn't, yeah, it doesn't hit any of the areas that I want exposure to.
[SPEAKER_00]: And that slow growth is reflected now in the stock.
[SPEAKER_00]: And so I think you have better opportunities out there, and I would move on from Techno Glass, TGLS is simple.
[SPEAKER_00]: Now, a lot of ground to cover over the next 45 minutes, and I mean focus point, so it's topic.
[SPEAKER_00]: Navigating the virgin commodity
[SPEAKER_00]: commodity markets are our splitting you have inflationary pressures that are easing in the energy and food markets while strategic metals lie copper and rare earths there in high demand and there are supply constraints there as well.
[SPEAKER_00]: And this is in many ways colored with AI and clean energy in the background.
[SPEAKER_00]: So we're going to dig into this topic because
[SPEAKER_00]: It's one of those asset classes, insecters that have a lot of cross currents.
[SPEAKER_00]: Some are looking great, like precious metals, copper, et cetera.
[SPEAKER_00]: Others not so great, like parts of the ag market.
[SPEAKER_00]: So we'll dig into that story and much more here in a little bit.
[SPEAKER_00]: In addition, we'll talk a bit about pipelines, oil pipelines, mainly here in North America.
[SPEAKER_00]: There's a record amount of pipeline being built with companies laying hundreds of miles of new pipe across the U.S. and Canada.
[SPEAKER_00]: So is that good for investors or is that bad?
[SPEAKER_00]: Let's talk about that.
[SPEAKER_00]: Also, talk about this bit yesterday, but what's going on with Japan and Japanese bond rates and it's having an impact on our borrowing rates here in the US as well.
[SPEAKER_00]: So this is one of those topics where there's wide ranging impacts for how those decisions happening almost halfway around the world are impacting
[SPEAKER_00]: us here in the United States.
[SPEAKER_00]: So we'll dig into that topic.
[SPEAKER_00]: And then lastly, we'll dig into cyber Monday sales, both not just here, but abroad as well.
[SPEAKER_00]: Okay.
[SPEAKER_00]: So we'll look at that.
[SPEAKER_00]: We also have voice bank calls.
[SPEAKER_00]: One is on covered call ETFs.
[SPEAKER_00]: I love it.
[SPEAKER_00]: I love that.
[SPEAKER_00]: What are covered call ETFs as well as Netflix?
[SPEAKER_00]: Okay, there are questions on that.
[SPEAKER_00]: And then we have some questions that came in via the comment section over on the best talk YouTube channels.
[SPEAKER_00]: Well, and of course, I welcome your finance and investment questions right now.
[SPEAKER_00]: But as we move to a break, I'm gonna tell you about special opportunity for you to begin.
[SPEAKER_00]: I'll begin by posing an important question for you, the investor, what's the one gift that really gives me to mind?
[SPEAKER_00]: Well, the answer is security for your family's future.
[SPEAKER_00]: So for the holidays, Cape P Financials, excited to introduce a high value limited offer.
[SPEAKER_00]: It's called the Holiday State Bundle.
[SPEAKER_00]: It's a specific design to help new households quickly establish a solid foundation for the financial and personal legacies before year and year or how it works.
[SPEAKER_00]: You come with client, Cape P Financial, and click around boarding by the end of the year,
[SPEAKER_00]: Central, a state planning documents as an added benefit through our partner trust and well.
[SPEAKER_00]: So you're not just starting a financial relationship with us, you're into getting a new year with clarity, confidence, and it's a cure plan, but people you care about most.
[SPEAKER_00]: So don't let this end of your opportunity pass you by.
[SPEAKER_00]: The holiday state bundle is only available until the September 31st of this year.
[SPEAKER_00]: Visit besttalk.com, fill out the portfolio, review,
[SPEAKER_00]: My full lines are open, waiting for you.
[SPEAKER_00]: Right now, let me call it.
[SPEAKER_00]: I did it.
[SPEAKER_00]: I need to make sure.
[SPEAKER_01]: Are you worried about what your tax bill will look like this year?
[SPEAKER_01]: As we head into the final weeks of 2025, now is a good time to get proactive.
[SPEAKER_01]: And you can do that by joining Justin Klein and Luke Guerrero for the upcoming Invest Talk, wealth webinar.
[SPEAKER_01]: Year-end Tax Toolkit, RMD planning, tax laws harvesting, and deferral strategies.
[SPEAKER_01]: This hour-long session is your chance to get their expert insights on navigating the complexities of year-end tax planning.
[SPEAKER_01]: Just an in-loop will cover everything.
[SPEAKER_01]: From managing those mandatory RMDs to using tax laws harvesting to offset gains to effective income deferral techniques.
[SPEAKER_01]: Mark your calendar for Tuesday, December 9th, from 11am to 12pm Pacific Time.
[SPEAKER_01]: The wealth webinar is free, but you must pre-register at investalk.com.
[SPEAKER_01]: Hurry, December 9th is coming up fast.
[SPEAKER_01]: The official numbers are in now with 62 million downloads in Vestark.
[SPEAKER_01]: Listen live or download the free podcast, call anytime 88899 chart.
[SPEAKER_00]: It didn't 99 chart, it didn't 99 to 4278.
[SPEAKER_00]: So I could do an answer question on today's show.
[SPEAKER_00]: Now let's touch a bit on the market today.
[SPEAKER_00]: You had a green day, by the way, green day.
[SPEAKER_00]: Well, my first favorite band, that was a good.
[SPEAKER_00]: Nasdaq up about six tenths of 1% S&P up a quarter of 1%
[SPEAKER_00]: Okay, and you had some strength out of...
[SPEAKER_00]: The tech sector mainly if you go look at the heat map large cap growth definitely was the strong point in today's market apple Microsoft and video meta all positive not a big way around 1% or less but still green and you have some chip names positive you had intel of 8% Cisco up 1% you had Boeing up 10% on the day.
[SPEAKER_00]: Some weakness though, out of consumer, non-derables, as in traits continue to rise, utilities, we're struggling, healthcare was down on the day, pretty decently after having a pretty good run over the past few months, energy continues to be weak, ex-on, and Chevron down over 1% there.
[SPEAKER_00]: You did have some strength out of industrials though, which was nice.
[SPEAKER_00]: You had a jeep or Nova up about.
[SPEAKER_00]: 4% there.
[SPEAKER_00]: So kind of a mixed bag, even though you had broad the market rose as a whole mainly driven by modest gains out of the magnets 7.
[SPEAKER_00]: So that was those are the movements today.
[SPEAKER_00]: But you had gold, that was down 1.3% near the worst levels, dollar up 0.1%.
[SPEAKER_00]: And Bitcoin features up six and a half percent.
[SPEAKER_00]: And I still balance back after losing seven percent yesterday.
[SPEAKER_00]: Where do we right now?
[SPEAKER_00]: Let's see this.
[SPEAKER_00]: There's quite the turnaround because we have that sell off on Sunday and into yesterday, we have had a nice bounce back.
[SPEAKER_00]: We just zoom in here to a weekly chart.
[SPEAKER_00]: Yeah, we're back to levels kind of where we were pre-sell off on Sunday.
[SPEAKER_00]: So nothing really resolved in the Bitcoin chart.
[SPEAKER_00]: It's still in the downtrend and it needs to get above 100,000 for this downtrend to be abated.
[SPEAKER_00]: Right now, it's just volatility amidst the downtrend.
[SPEAKER_00]: So I'm not seeing anything that's telling me.
[SPEAKER_00]: The hodolars are going to be happy in the short term.
[SPEAKER_00]: Actually, I think that we're going to go through a crypto winter bear market between now and sometime in 2027.
[SPEAKER_00]: So you can get bounces like this, but ultimately I doubt that they hold.
[SPEAKER_00]: Well, so we get we did get.
[SPEAKER_00]: data from Cyber Monday, which we'll get to in a little bit, so I don't want to spoil that one.
[SPEAKER_00]: WTI crew down 1.2% on the day.
[SPEAKER_00]: We'll get a lot more economic data.
[SPEAKER_00]: Mainly on Friday, I believe it's been a inflation and jobs numbers on Friday.
[SPEAKER_00]: That's where we're going to get a lot more information on what's going on with the broader economy.
[SPEAKER_00]: Now, from time to time, we received questions from Webforms, submitted on the besttop.com.
[SPEAKER_00]: And Jeff and Torrance says, hi, Justin and Luke.
[SPEAKER_00]: I'm looking for the stock at the stock PAS, pan-American Silver Corp to start new position.
[SPEAKER_00]: Is this a good stock to add to the portfolio at the current price?
[SPEAKER_00]: And that's a big question here.
[SPEAKER_00]: Is pressure metals in general have had a big, big run?
[SPEAKER_00]: And I talked about this about a month or so ago when sentiment got pretty extreme.
[SPEAKER_00]: That was back in early October.
[SPEAKER_00]: We had a pullback, a rally, and then a little bit of a pullback from there.
[SPEAKER_00]: And now we've just taken off.
[SPEAKER_00]: Pan American Silver is right near 52-week high.
[SPEAKER_00]: Those are in $3.42 next year.
[SPEAKER_00]: Currently, it's trading at $44 per share.
[SPEAKER_00]: So pretty cheap based on forward-looking earnings.
[SPEAKER_00]: And I think
[SPEAKER_00]: silver prices are likely to continue higher.
[SPEAKER_00]: So I see no reason to jump off this train.
[SPEAKER_00]: I think Pan American silver is one of the better miners out there.
[SPEAKER_00]: It's not currently a name we own for clients, but it's definitely in our top three or four names if we want it exposure to
[SPEAKER_00]: Gold and silver.
[SPEAKER_00]: Let me see here.
[SPEAKER_00]: This is, yeah, gold, gold.
[SPEAKER_00]: I'm trying to see their revenue breakdown.
[SPEAKER_00]: So silver or is it only about two, any four percent.
[SPEAKER_00]: So even though it's panamerican silver, it's still mainly a gold minor about 60 to 75% of the revenue comes from gold.
[SPEAKER_00]: So
[SPEAKER_00]: Just one of those examples of, yeah, it's a silver, but if you want a more pure play silver name, there's plenty more out there.
[SPEAKER_00]: Doesn't mean you don't buy this one, but understand what you're buying.
[SPEAKER_00]: Understand that this is still mainly a gold miner.
[SPEAKER_00]: And so I like it.
[SPEAKER_00]: I still think we're in more of a consolidation period, I think you're gonna have,
[SPEAKER_00]: big selloffs like you had in October and then rallies, big rallies like you've seen recently and so ultimately we want to be buying this probably more in weakness, it's a bit over but right now you're already seeing weakness last couple days, but certainly a name you continue to buy on.
[SPEAKER_00]: dips.
[SPEAKER_00]: Those pan American silver, P-A-A-S.
[SPEAKER_00]: I love that one, just because it's how we say, know what you own, don't just go based on the title of the company or the fund, etc.
[SPEAKER_00]: Know how it works, know how their business operates, and until you do, then you're going to be flying blind out there.
[SPEAKER_00]: So good name, just not up your play, silver name.
[SPEAKER_00]: It didn't 99 chart, it didn't 99, 2, 4, 2, 7, 8.
[SPEAKER_00]: So I get to ask your question on today's show.
[SPEAKER_00]: Now, let me focus point today is about commodity markets.
[SPEAKER_00]: And how there's, this is a unique time for all of us, not just with AI and geopolitical concerns, but how that all impacts the commodity markets.
[SPEAKER_00]: It's different.
[SPEAKER_00]: It's similar in many ways, but it's also very different.
[SPEAKER_00]: And there are supply demand dynamics, geopolitical tensions, and monetary policy decisions that impact all of this.
[SPEAKER_00]: And so, the big question for the average investor is how do they navigate this space where there's a lot of opportunity, but there's also a lot of pitfalls.
[SPEAKER_00]: And
[SPEAKER_00]: There's a lot of anticipation that overall the commodity markets will become, well, well, we'll decline, okay?
[SPEAKER_00]: And a lot of you'll focus on food and energy.
[SPEAKER_00]: And the fact that that has not really gone up as much as many have imagined and inflationary environment, especially energy, big of gas prices, oil prices, that hasn't taken off like we saw on the last energy boom, right?
[SPEAKER_00]: The 70s, for example.
[SPEAKER_00]: But the inflationary pressures are different.
[SPEAKER_00]: And what's interesting here is that if you look at the commodity sectors, like the commodity indexes, shall we say, they're heavily weighted towards things like oil, because historically oil was very important to the broader commodity market, the broader economy.
[SPEAKER_00]: oil intents.
[SPEAKER_00]: This was decades ago.
[SPEAKER_00]: Nowadays, it's much less so.
[SPEAKER_00]: Not only are cars far more efficient, but a lot of people are now moving to EVs.
[SPEAKER_00]: And power plants are not really powered by coal as much anymore.
[SPEAKER_00]: Or gasoline, it's mainly natural gas or nuclear.
[SPEAKER_00]: And then we have green energy from solar panels to wind.
[SPEAKER_00]: And all of this has changed that dynamic of the commodity market.
[SPEAKER_00]: So you have to reset your thinking.
[SPEAKER_00]: The different economy out there, the different commodity market out there.
[SPEAKER_00]: Now the world bank forecasts a fourth consecutive year to climb an overall global commodity prices next year, reaching the lowest level in six years.
[SPEAKER_00]: mainly due to weaker demand and expanding oil surpluses, like I said, oil surpluses.
[SPEAKER_00]: And a lot of us have to do with OPEC, trying to take back market share from shell producers, et cetera.
[SPEAKER_00]: And you're likely to see, I think oil prices stay contained through next year, especially Brent crude, which is where that's European crude, not WTI crude, different prices, different benchmark here.
[SPEAKER_00]: So that will probably continue to fall.
[SPEAKER_00]: But natural gas prices are expected to continue to rise, not only the rest of this year, but next year as well, due to energy demand driven by AI.
[SPEAKER_00]: Okay, so that's the energy market.
[SPEAKER_00]: Neutral to bearish on oil, especially rent-crupe for the WTI, on more bullish on WTI.
[SPEAKER_00]: And more bullish on natural gas.
[SPEAKER_00]: Now, precious metals, you're seeing that.
[SPEAKER_00]: We had that question earlier, reaching multi-decade heights.
[SPEAKER_00]: And this is driven by weaker dollar as well as what's going on with central banks around the world.
[SPEAKER_00]: And then you have industrial metals, things like copper, zinc, aluminum, maybe even lithium?
[SPEAKER_00]: Talk about that in a second.
[SPEAKER_00]: But overall, those are generally
[SPEAKER_00]: in trending in the right direction, positively was positively for those investors and investment in them.
[SPEAKER_00]: I was the negative for the inflation picture.
[SPEAKER_00]: What else is doing poorly though?
[SPEAKER_00]: Iron ore, this was mainly driven historically over the past 20, 30 years by China demand for building, but that's reversing in a big, big way as well.
[SPEAKER_00]: Okay, so that is a broad overview of the commodity space and how to think about it.
[SPEAKER_00]: Then you add in agriculture, there's parts of that that are doing well, but overall ag, you know, there's substitutes, you know, when you plant a crop, you sell that crop, well, a lot of times depending on the location, you can switch that crop out for a different crop that maybe has more value.
[SPEAKER_00]: And so the supply dynamics are more responsive to market prices versus things like copper, it takes a long time to bring a copper mine on line, okay.
[SPEAKER_00]: So that's a big difference between the ag markets and the metal markets.
[SPEAKER_00]: Okay, now on top of this, you have geopolitical tensions, you have poor congestion, shipping delays, labor shortages, climate change, all of this has made the process of commerce in general, become stickier, more difficult, and that's contributed to that inflationary environment that we are in.
[SPEAKER_00]: And then you have the energy transition.
[SPEAKER_00]: Like I said, you have to really step back.
[SPEAKER_00]: I'm a big fan of copper, big fan of nickel, big fan of aluminum, not a big fan of lithium.
[SPEAKER_00]: Okay, because it's easy to get.
[SPEAKER_00]: Remember, it's not just the demand side, it's a supply side as well, just as important.
[SPEAKER_00]: And arguably more important to the investment picture than just, is there more demand for a particular metal or commodity in general?
[SPEAKER_00]: Okay, so that's how you have to think about this.
[SPEAKER_00]: There's a lot of cross currents here.
[SPEAKER_00]: And there's a lot of ways that can this can go.
[SPEAKER_00]: It can go into gradual disinflation with certain commodities doing well.
[SPEAKER_00]: There's not so much.
[SPEAKER_00]: And you can get in the stack situation where most commodities go up, but you have an environment where economic growth is modest.
[SPEAKER_00]: and that's a potential risk for markets as well.
[SPEAKER_00]: Hopefully gave you a good brought-over view how to think about the commodity markets today.
[SPEAKER_00]: Now we're heading into a break.
[SPEAKER_00]: I'm ready for your questions right now.
[SPEAKER_00]: In today, thank you guys.
[SPEAKER_01]: In the early days, in Vestock was Jerry Klein and Steve Peasley.
[SPEAKER_01]: Now the torch has been passed and a new generation of hosts is on the job.
[SPEAKER_01]: Justin Klein and Luke Guerrero.
[SPEAKER_01]: So when you've got finance and investment questions, don't forget to call in Vestock.
[SPEAKER_01]: 888-99-Chart.
[SPEAKER_00]: Looks like the David in New Hampshire wants to talk about international exposure.
[SPEAKER_05]: Yeah, hi.
[SPEAKER_05]: Thanks for taking my call.
[SPEAKER_05]: Yes, thanks very much.
[SPEAKER_05]: I would add some more international exposure to my portfolio.
[SPEAKER_05]: I have some emerging markets already, so I'm looking at developed markets, I'm going to use an ETF and my question is, so I also write international, so I'm excluding the
[SPEAKER_05]: purchase in ETF, then it includes Canada, or is that essentially like a those companies going to track very close to what's going on in the United States?
[SPEAKER_00]: No, I think that there's no reason to exclude Canada.
[SPEAKER_00]: Those businesses are very different, just think of.
[SPEAKER_00]: What are the large domestic corporations who are talking about heavily tech?
[SPEAKER_00]: versus Canada's gonna be more oil, utilities, industrials, banks, telecom, companies like that.
[SPEAKER_00]: I'm just thinking of the regular Canadian companies that I encounter.
[SPEAKER_00]: Mining companies, you'll get exposure to those as well, natural resource names.
[SPEAKER_00]: And some of those sectors I really like, like natural resources.
[SPEAKER_00]: As I've talked about earlier in natural gas, but I was not so much so you're definitely getting more diversity, you're getting access to some very quality names, especially golden silver, things like that.
[SPEAKER_00]: So I see no reason to exclude Canada because it's definitely going to give you a different exposure than you're going to get domestically here.
[SPEAKER_05]: Okay, great.
[SPEAKER_00]: Thank you.
[SPEAKER_00]: No problem.
[SPEAKER_00]: Thanks for the call.
[SPEAKER_00]: It did 99 chart, it did 99, 2, 4, 2, 7.
[SPEAKER_00]: He's how you get through and ask your question right now about 20 minutes left in the show.
[SPEAKER_00]: So let's keep it going, attack all another listener question now.
[SPEAKER_07]: Hi, Justin and Luke, good day to you both.
[SPEAKER_07]: I have a quick question here.
[SPEAKER_07]: Just doing some, I guess, attacks, loss, selling here at the end of the year, trying to get rid of some losers and so forth, and I'll just wondering, some of the cash I'm getting
[SPEAKER_07]: Netflix be a good place to stick some of this.
[SPEAKER_07]: Now that I noticed they did a split and the price is down very reasonable.
[SPEAKER_07]: I know that doesn't matter in the quality of the company, but it is a monopoly.
[SPEAKER_07]: I do believe and at the price it's at.
[SPEAKER_07]: I do believe that having some shares and that I could see it over the course of
[SPEAKER_07]: time it could easily go back up to close to the $1,000 range that I did go to when it did the split.
[SPEAKER_07]: What are your thoughts on this?
[SPEAKER_07]: Hopefully, I'm not crazy for thinking this.
[SPEAKER_07]: I look forward to your feedback on the show.
[SPEAKER_07]: Thank you.
[SPEAKER_07]: Have a good day.
[SPEAKER_00]: Well, thanks for the call.
[SPEAKER_00]: Netflix, NFL, Acts, and it has had a recent split.
[SPEAKER_00]: And you almost got to the answering your own question, which is that shouldn't matter, right?
[SPEAKER_00]: It's valuation does not change when it has a stock split.
[SPEAKER_00]: So that's to me as a relevant.
[SPEAKER_00]: Now, I'm going to get to a file back to $1,000 per share and trading $100 per share right now.
[SPEAKER_00]: I have to split.
[SPEAKER_00]: Somebody's got to go 10X from here and it's already a $463 billion market cap.
[SPEAKER_00]: So you basically say I'm going to go to a $4 trillion market cap.
[SPEAKER_00]: I think maybe someday, but that's, I think far off.
[SPEAKER_00]: Now, do I think Netflix is not believe?
[SPEAKER_00]: No, I do not.
[SPEAKER_00]: I think that's something I'll believe.
[SPEAKER_00]: I think that we're getting up to the price, they've risen, risen, risen, risen, raised their price, excuse me, raised their price too bad as much as I think they can.
[SPEAKER_00]: Now, they've done a good job of splitting it between premium, I think it's now $25 a month, which to me,
[SPEAKER_00]: You know, you go beyond that.
[SPEAKER_00]: You might as well just be paid for cable at that point.
[SPEAKER_00]: Right?
[SPEAKER_00]: And then you have ad supported tiers and you have lower tiers, etc.
[SPEAKER_00]: And I think they've done a good job of that.
[SPEAKER_00]: And that's helped boost their growth.
[SPEAKER_00]: But I don't see this as a good valuation right here.
[SPEAKER_00]: You're talking about enterprise value,
[SPEAKER_00]: Now the highest ever been, but the highest ever been was 30 or early low 40s, and that was earlier this year.
[SPEAKER_00]: Okay, so it's still pretty expensive.
[SPEAKER_00]: This doesn't get cheap at least over the last decade until this gets down to closer to 20.
[SPEAKER_00]: So I think there's definitely potential for more downside, especially if growth slows.
[SPEAKER_00]: earnings this year, so it's got 28% and then 27% next year.
[SPEAKER_00]: really is just driven by let's see are they buying back shares with that cash flow yeah they've been buying back shares but those buybacks have slowed down recently which is interesting kind of yeah kind of leveled out here with the past quarter or so they've kind of stopped the buybacks and has good balance sheets a good business but it's not an oplet you can go and find great content hbo or hulu or million other streaming services now till the preaminent one
[SPEAKER_00]: You know, what'll always be?
[SPEAKER_00]: Me, no, probably not.
[SPEAKER_00]: You know, 100 years now is Netflix going to be the primary streaming service, probably not.
[SPEAKER_00]: It's going to be something different.
[SPEAKER_00]: Now,
[SPEAKER_00]: Does AI make their content creation better?
[SPEAKER_00]: Do they use the data that they get from the customers to make their service better?
[SPEAKER_00]: I think there's some potential for that as well.
[SPEAKER_00]: So it's a great business.
[SPEAKER_00]: 42% return to equity, very little debt.
[SPEAKER_00]: I have no problem with Netflix as a business, but at these levels, you are priced for perfection.
[SPEAKER_00]: And it's lost its momentum.
[SPEAKER_00]: It's now in a downtrend.
[SPEAKER_00]: If he's back in June,
[SPEAKER_00]: As you said,
[SPEAKER_00]: split adjusted to the 133 and we're down 18% from there.
[SPEAKER_00]: So it's in a downturn.
[SPEAKER_00]: It's not quite a bear market yet.
[SPEAKER_00]: I guess it has bounced a little recently, but it's in a downturn.
[SPEAKER_00]: And I want that downturn to break.
[SPEAKER_00]: I want a reasonable valuation.
[SPEAKER_00]: And I want sentiment to get less off-side.
[SPEAKER_00]: So keep on your watch list, but not a place I would be plowing money when it comes to tax off-services proceeds.
[SPEAKER_00]: Let's talk a little bit about pipelines, pipelines, oil pipelines.
[SPEAKER_00]: And right now, North America, there's a boom, a record amount of pipeline building.
[SPEAKER_00]: Companies laying hundreds and millions of new pipes across the United States and Canada.
[SPEAKER_00]: And that sounds great.
[SPEAKER_00]: And growth expectations are rising for these names.
[SPEAKER_00]: Are you talking about the pipeline names?
[SPEAKER_00]: Names like,
[SPEAKER_00]: uh, Onioke and uh, let's see what else energy transfer.
[SPEAKER_00]: Can you more again?
[SPEAKER_00]: These are names that pay high dividends, probably a lot of you have that are income focused investors have these in your portfolio and they have been doing really well for a number of years, but that has certainly slowed recently.
[SPEAKER_00]: Okay, and a lot of these are now in downtrends.
[SPEAKER_00]: So if I look at the KMI, it's been kind of flat over the past year or so.
[SPEAKER_00]: You look at names like energy transfer.
[SPEAKER_00]: That's been flat to down over the last year.
[SPEAKER_00]: Okay, E, that's been certainly down over the past year.
[SPEAKER_00]: So despite the boom,
[SPEAKER_00]: Market is not loving the capex that they're laying out there.
[SPEAKER_00]: And this is a lesson that you have to take a heart, which is there's an inverse correlation between capex spending and stock price.
[SPEAKER_00]: Markets don't love that that you're taking on a lot of risk spending billions of dollars to potentially get more earnings and revenue down the line.
[SPEAKER_00]: And once again, that comes with risks
[SPEAKER_00]: Leaders, they go overboard, especially when they see big opportunities, like exporting LNG to Europe, like moving natural gas to data centers, like building out the pipeline that is moving oil from the oil sands and Canada all the way to the West Coast for export to China, those are the main drivers of this build.
[SPEAKER_00]: But a decade ago, they did something similar, especially when shale was ramping up, all the shale production, right?
[SPEAKER_00]: They were building tons of pipelines.
[SPEAKER_00]: The move, the product from the shale regions to the places it can be consumed.
[SPEAKER_00]: But they overextended themselves and many of these names caught their dividend.
[SPEAKER_00]: And that is the worry here in a Morgan, a giant, giant company.
[SPEAKER_00]: MarketCap is $60 billion for the space that's a big name.
[SPEAKER_00]: They cut their dividend in 2015, because most of these names are very levered, they have a lot of debt on their balance sheet.
[SPEAKER_00]: Which means a lot of CapEx.
[SPEAKER_00]: very cyclical.
[SPEAKER_00]: And if those volumes don't materialize, well, you wasted a lot of money building out this infrastructure.
[SPEAKER_00]: And that may come back that demand, it may come back for those pipelines.
[SPEAKER_00]: But in an intermediate term, the stocks get hit in a big way.
[SPEAKER_00]: And that is, I think a risk that needs to be understood.
[SPEAKER_00]: that weaker oil prices means less product moving through these pipes.
[SPEAKER_00]: It also means that the shale regions are going to produce less product because they're not incentivized to.
[SPEAKER_00]: And the most of the shale is what's coming with shale oils, what's coming out of these regions.
[SPEAKER_00]: And if oil prices remain weak, well, there's natural gas prices are not expensive
[SPEAKER_00]: for them to continue to operate.
[SPEAKER_00]: And remember, these are names that they make money when product moves through their pipes.
[SPEAKER_00]: And think of it as whole.
[SPEAKER_00]: And they are great businesses when volume is good, when money is properly allocated.
[SPEAKER_00]: But history says that oftentimes they overspend and the ROI of these investments oftentimes can be negative and very volatile.
[SPEAKER_00]: That's going back to the Best Talk Voice Bank, you know the number it's 80-day, 90-day chart.
[SPEAKER_06]: Good afternoon, gentlemen.
[SPEAKER_06]: This is a Mark calling from Santa Cruz.
[SPEAKER_06]: First of all, thank you for the daily addiction of In Best Talk, I've been totally hooked for years.
[SPEAKER_06]: I am a retiree for several years now, and as an investor, I would classify myself as a dividend flash income value investor.
[SPEAKER_06]: I have a question, if you could explain, please,
[SPEAKER_06]: what covered call ETFs are?
[SPEAKER_06]: How they work?
[SPEAKER_06]: Are they cyclical?
[SPEAKER_06]: Would you recommend them for retirees to help out with additional income?
[SPEAKER_06]: Again, thank you guys very much for all that you do and I'm looking forward to your answer.
[SPEAKER_06]: Thank you.
[SPEAKER_00]: This is a great question.
[SPEAKER_00]: I love this because
[SPEAKER_00]: This is a hot space, and most of the time when the retail investor gets excited about new products that's pitched by Wall Street, they
[SPEAKER_00]: They're duped in many ways.
[SPEAKER_00]: Not to say that duped in that they're going to lose money, but they really don't understand what they're buying, because these fun companies in Wall Street, they're good at spinning the narrative, spinning the story.
[SPEAKER_00]: And I think the SEC needs to change the way that these are really classified and the way that the marketing is done.
[SPEAKER_00]: Unfortunately, SEC, they've been a sleep at the wheel for a long time now.
[SPEAKER_00]: The simple answer is, it's fool's goal.
[SPEAKER_00]: You're not getting the yield that it says you're getting.
[SPEAKER_00]: Okay.
[SPEAKER_00]: Because what's happening here is, they're running cover call.
[SPEAKER_00]: Judging, a lot of time we're doing on an index and that's a simple process.
[SPEAKER_00]: We run a cover call strategy and I don't have anything against a covered call strategy in general.
[SPEAKER_00]: What I do have a problem with is that is anyone saying a cover call strategy is giving huge yield.
[SPEAKER_00]: Now, we talked to our clients, we say it's bringing in income, but it's countered with giving up potential upside, and that's what most investors are not understanding here.
[SPEAKER_00]: Is that yes, you're bringing in extra income and in down markets, it definitely hedges against
[SPEAKER_00]: the downside in home markets.
[SPEAKER_00]: You can do much better with the broader indices because you're bringing in income and those that are buying the call options are losing out in your game.
[SPEAKER_00]: But when things are doing really well, it can hold back returns.
[SPEAKER_00]: So it's really more of a what I call a fall dampener.
[SPEAKER_00]: It lowers the volatility of the underlying investment,
[SPEAKER_00]: is whatever that is that we didn't ask that 100, the S&P, could be a mix of stocks, whatever that is.
[SPEAKER_00]: And so what you don't want to do is think that, oh, it says it's getting some big yield.
[SPEAKER_00]: For example, the one that we benchmark a lot of our strategy to is the JAPI, the JP Morgan equity premium income fund.
[SPEAKER_00]: And it will say that the SECL is seven and a quarter, turning to a month yield is eight percent.
[SPEAKER_00]: And the reality is that's not really true.
[SPEAKER_00]: If you go look at the total return, that's what you want to do with these names.
[SPEAKER_00]: Do not pay any attention at all to what the quote unquote yield is.
[SPEAKER_00]: It is functionally irrelevant for these names.
[SPEAKER_00]: What you want to focus on is the performance.
[SPEAKER_00]: What is the total return that you are getting from these names?
[SPEAKER_00]: And JPI, this year is up seven and a quarter per cent.
[SPEAKER_00]: So, effectively, it's year-to-date return is somewhere around what it's quote-to-quote SEC yield is.
[SPEAKER_00]: Maybe slightly higher if you're analyzing, right?
[SPEAKER_00]: That's not what you're getting that yield, but you're also subject to the downside of the markets as well.
[SPEAKER_00]: It's a good hedge, but that's about it.
[SPEAKER_00]: It's a fall dampener.
[SPEAKER_00]: That's it.
[SPEAKER_00]: So when you're looking at these, remember call it ETFs, whatever that is.
[SPEAKER_00]: There's a lot of them out there now.
[SPEAKER_00]: I don't want to dig into each one.
[SPEAKER_00]: Understand, ignore the yield, focus on the total return.
[SPEAKER_00]: If you're comfortable with the total return, you're comfortable with that lower volatility that you have a little bit less on the outside, as well as maybe potentially a lot less on the downside than it might be right for you.
[SPEAKER_00]: But don't think of it as this surefire yield producer.
[SPEAKER_00]: That was MS Talk, I'm Justin Klein, and we have one goal here that should have a big day.
[SPEAKER_00]: He's helped you achieve your own version of Fangs of Freedom, and I'm working to use after this final break.
[SPEAKER_00]: So if you have a question, you want to call that in right now.
[SPEAKER_00]: 8-8-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9-9
[SPEAKER_01]: As we head into the final weeks of 2025, now is a good time to get proactive.
[SPEAKER_01]: And you can do that by joining Justin Klein and Luke Guerrero for the upcoming Invest Talk, WealthWebinar.
[SPEAKER_01]: Mark your calendar for Tuesday, December 9th, from 11am to 12pm Pacific Time.
[SPEAKER_01]: The WealthWebinar is free, but you must pre-register at investalk.com.
[SPEAKER_04]: Hey, and by stock, just have a couple of stocks I'm looking at in the pool sales sector target and Walmart, just wondering your opinions on those just kind of want to get a little bit of exposure to some full sale companies.
[SPEAKER_04]: Thanks.
[SPEAKER_00]: This is a great question, because it kind of depends on what you're looking for.
[SPEAKER_00]: Target is obviously down in its lock, peaked that around $260 per share, back in 2021, now we're at $90 per share, earnings gone from $13.56, those kind of anomaly during COVID in 2022.
[SPEAKER_00]: But now so starting $7.28 this year and $7.68 next year, that's still higher than
[SPEAKER_00]: Uh, but it certainly has struggled recently with last quarter revenue growth at negative 2% and earnings growth at negative 4%.
[SPEAKER_00]: But it's trading at very, very low multiples, it's cheap.
[SPEAKER_00]: and we actually recently picked it up for clients.
[SPEAKER_00]: It's just kind of too cheap to ignore.
[SPEAKER_00]: It has a solid balance sheet, which are in equity around 25%, enterprise value to EBITDA, right around 6.9, and historically, if I go back over the last 10 years, it's only traded that low back in 2017, 2017.
[SPEAKER_00]: So,
[SPEAKER_00]: You know, it's still a very good business, very strong, a very consistent cash flow of $3 billion in cash flow.
[SPEAKER_00]: And it's cash from operations recently started a nice little tick higher.
[SPEAKER_00]: So things have kind of leveled out and started to improve a little bit, even if it's off at 2021.
[SPEAKER_00]: Hi, which once again, kind of an anomaly.
[SPEAKER_00]: So if you're looking for the cheapest, those bombed out best, I think, opportunity of the next three to five years, it's target.
[SPEAKER_00]: Now, Walmart is making 52-week highs.
[SPEAKER_00]: Those to earn $2.63 this year, 296 next year, but it's $112 stock.
[SPEAKER_00]: So even based on next year's earnings, it's called $3 per share.
[SPEAKER_00]: You're talking nearly 40 times earnings.
[SPEAKER_00]: Versus Walmart, sorry, excuse me, target, you're in the low teens.
[SPEAKER_00]: Okay, and Walmart's enterprise value to EBITDA is, let me pull that up here, 22.
[SPEAKER_00]: So, about three times more expensive.
[SPEAKER_00]: Is it that much better of a business?
[SPEAKER_00]: Return equity is 24% for Walmart.
[SPEAKER_00]: Great business.
[SPEAKER_00]: What is it for Target?
[SPEAKER_00]: 25% it's actually a bit better.
[SPEAKER_00]: So while growth is certainly not,
[SPEAKER_00]: in its favor, I do think there's a floor to where target is.
[SPEAKER_00]: And I think that it's probably a better longer-term investment because there's similar profitability.
[SPEAKER_00]: And target has, it's not the return to no growth.
[SPEAKER_00]: And I think that the price moves up 2030%.
[SPEAKER_00]: And so Walmart's price of reflection, so I'm picking one or the other from a value investor standpoint.
[SPEAKER_00]: I'm picking Target, but know that from a momentum perspective, the next month or two, if trying to steer friend, so Walmart will probably continue to outperform in the short term, but medium to long term, I'm picking Target.
[SPEAKER_00]: Now lastly, let's touch on Japan and talk yesterday about how they hinted at a rate increased later this month and the market was not ready for that and Japanese yields, 10 year yields, with a 1.879% highest closing level since June of 2008.
[SPEAKER_00]: and that pushed the 10-year treasury up to nearly 4.1% as well.
[SPEAKER_00]: And what's most important about this story is that they're trying to stem their foreign currency.
[SPEAKER_00]: Slide.
[SPEAKER_00]: In order to do that, not only are they raising rates, but they could be selling treasure holdings as well.
[SPEAKER_00]: And they own about $1.2 trillion of US treasures.
[SPEAKER_00]: And so if they sort of sell the treasures that could put up more upward pressure on rates, along with the fact that in many ways they can be a bond proxy.
[SPEAKER_00]: There could be a, again, Carrie Shen, unwind.
[SPEAKER_00]: And all of this is now hitting our shores.
[SPEAKER_00]: And we'll likely to likely be a battle that we encounter for the next number of years as Japan, unfortunately, they are mired in a ton of debt and they don't see a way out of it anytime soon.
[SPEAKER_00]: Now I'm just inclined at today's show how made you think about your own financial picture in any way, your investments, taxes, retirement, and really whether it's all working for you and encourage you to head over to besttalk.com and schedule a no-cost portfolio review with myself or Luke, help you help us bring clarity and confidence to your situation.
[SPEAKER_00]: Please tell your friends and family about a free podcast down those, which you can find any time that I tune Spotify and be sure to rate and review on iTunes as well.
[SPEAKER_00]: Click your reminder, our newest Invest Talk World webinar is set for a week from today, December 9th.
[SPEAKER_00]: Having online and it's free, but you do have to pre-bed share at besttalk.com.
[SPEAKER_00]: Independent thinking should success, the best talk, good night.
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