[SPEAKER_02]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk.
[SPEAKER_02]: 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_01]: Good afternoon fellow investors.
[SPEAKER_01]: Welcome back to Invest Talk.
[SPEAKER_01]: This is our Thursday, July, seventeen, twenty twenty five edition of Invest Talk.
[SPEAKER_01]: Summer is racing by it's the warm here in Southern California, but the markets are a bit quiet, at least the so far underneath season.
[SPEAKER_01]: Not a whole lot of movements, but we are also in opx weeks.
[SPEAKER_01]: So certainly we could see fireworks next week.
[SPEAKER_01]: typically opx is a turning point in markets, at least in the short term.
[SPEAKER_01]: But that's, that's near the hair another.
[SPEAKER_01]: You know, this is really, the show isn't just about the next week or the next month, which certainly have, I have opinions and insights on, but it's more about your mindset and data and perspective that can help you become a better investor.
[SPEAKER_01]: Help you make better decisions with your money, both within the investment world as well as the personal finance world.
[SPEAKER_01]: And the way that we help you, mainly, is by answering your finance and investment questions.
[SPEAKER_01]: So, encourage you to call right now at aidedate-nine-nine chart with anything money related that is on your mind.
[SPEAKER_01]: No question is too complex or too simple.
[SPEAKER_01]: We are here for all of it.
[SPEAKER_01]: Now, in just a bit, we'll talk about today's market performance and run down the show topics for the hour.
[SPEAKER_01]: But as usual, we'll tackle this call a question first.
[SPEAKER_00]: Hey, this talk bill from Philadelphia here, calling regarding global payments and cooperated ticker symbol GPN has about a twenty billion dollar market cap.
[SPEAKER_00]: I wanted to see if this was a good time to get into the stock.
[SPEAKER_00]: I could see this is a good value play and one of the get your thoughts.
[SPEAKER_00]: Thank you.
[SPEAKER_01]: Looking at global payments, GPN is the symbol, and it looks cheap.
[SPEAKER_01]: If you look at based on earnings this year, it's supposed to be twelve dollars and twelve cents from eleven dollars and forty-two cents last year, that's about a six percent bump.
[SPEAKER_01]: And then thirteen sixty-two expected next year, and both of those estimates are trending higher for Mano, so that's a good thing.
[SPEAKER_01]: And it's an eighty-three dollar stock, so it looks very cheap.
[SPEAKER_01]: made the high single digit multiple.
[SPEAKER_01]: But then you had over to some of the other metrics and they do look cheap.
[SPEAKER_01]: But also the business is not as fantastic as those numbers make it seem return equity is only six and three quarters percent not that high return assets only three percent there so don't love that.
[SPEAKER_01]: And
[SPEAKER_01]: And cash flow is very robust.
[SPEAKER_01]: So I like that.
[SPEAKER_01]: Certainly room to raise the dividend.
[SPEAKER_01]: So I like that.
[SPEAKER_01]: It is taking that cash flow and buying back shares.
[SPEAKER_01]: I like that as well.
[SPEAKER_01]: So I like a lot of what I see here outside of those profitability metrics.
[SPEAKER_01]: But my biggest worry is just that momentum.
[SPEAKER_01]: It's down and continues to trend lower.
[SPEAKER_01]: Now, what does goal payment do?
[SPEAKER_01]: Well, they are a leading provider of payment processing and software solutions for small and mid-sized businesses.
[SPEAKER_01]: In thirty countries, about a quarter of its revenue comes to North America and some in Europe and Asia as well.
[SPEAKER_01]: So the good thing is, is they have good graphic, good geographic diversity.
[SPEAKER_01]: The problem is I think some secular, they have some secular headwinds, okay, which means that
[SPEAKER_01]: You know, as more and more people maybe go into crypto currencies, you go into stable coins, et cetera, the potential for their demand or demand for their networks will go down.
[SPEAKER_01]: And this kid is a small meeting size businesses and they're struggling more than the average.
[SPEAKER_01]: So I think that's part of it here.
[SPEAKER_01]: Now, the good thing is, let's look at their balance sheet.
[SPEAKER_01]: Oh, that's the issue.
[SPEAKER_01]: Yeah, they have a lot of debt.
[SPEAKER_01]: Okay.
[SPEAKER_01]: So about fourteen billion in net debt, fifteen billion in net debt call it, which on a twenty billion dollar market cap, that's not nothing.
[SPEAKER_01]: That's not nothing.
[SPEAKER_01]: So a lot of that cash flow is really going to go towards delivering the balance sheet, or at least should go towards delivering the balance sheet.
[SPEAKER_01]: So that's your issue here is I would like a cleaner balance sheet, obviously, with prices or insurance going up, the cost of carrying that debt is going to rise as well.
[SPEAKER_01]: And, you know, while the technicals are improving, it's still in a very, very strong downtrend.
[SPEAKER_01]: So until this can get back above, let's see, above that two hundred-day moving average, which right now is up around ninety-six dollars, and currently the stock is trading around eighty-three.
[SPEAKER_01]: I probably wouldn't touch it.
[SPEAKER_01]: It just remains two weeks technically and I don't like companies right now that have big debt and have secular headwinds.
[SPEAKER_01]: Let's take a live call.
[SPEAKER_01]: Thomas from Santa Cruz looking at Berkshire Hathaway.
[SPEAKER_01]: Thomas?
[SPEAKER_05]: Justin, can you hear me?
[SPEAKER_01]: Again, yes.
[SPEAKER_05]: Hey, Justin, yeah, I'm calling about Berkshire Hathaway.
[SPEAKER_05]: Basically, I would like to hear your guys who's too sensed on the amount of cash that Warren Buffett's holding on right now.
[SPEAKER_05]: And also, basically, thinking about how the stock could rebound when there were any fullbacks in market, knowing that you had so much cash, or they had so much cash.
[SPEAKER_05]: And then I would like for you to compare it to the S&P five hundred with its current evaluations.
[SPEAKER_05]: I know the S&P is at all time high.
[SPEAKER_05]: Berkshire has pulled back a little bit.
[SPEAKER_05]: So how do you like the price of Berkshire right now?
[SPEAKER_05]: And then also, what do you think about the cash situation and would that benefit them in a potential rebound?
[SPEAKER_01]: Well, it definitely benefit them.
[SPEAKER_01]: When prices and equities go down, more broadly, a company like Berkshire historically has stepped in and bought shares at lower prices and over the long term, that's benefited them.
[SPEAKER_01]: Now, right now, they have an elevated level of cash.
[SPEAKER_01]: So clearly, they don't see a lot of opportunity out there.
[SPEAKER_01]: Now, from a timing perspective, it's a terrible timing mechanism.
[SPEAKER_01]: So don't think because Berkshire has elevated cash levels that the market has to roll over tomorrow or anything like that.
[SPEAKER_01]: It's just a product of the valuations at the current time.
[SPEAKER_01]: And as we've seen,
[SPEAKER_01]: For the last fifteen plus years, is that valuation can stay elevated for longer than you probably expect.
[SPEAKER_01]: It's not a timing mechanism, but it does speak to, hey, there are a lot of pockets of the market that are overvalued and very few that are undervalued.
[SPEAKER_01]: And I think that's generally true.
[SPEAKER_01]: Now, it has been an downtrend as of late.
[SPEAKER_01]: Now, could that coincide with the fact that Warren is stepping down, and the market may be less happy about or less confident in the new leadership's ability to allocate capital effectively?
[SPEAKER_01]: I think that's absolutely true.
[SPEAKER_01]: But the compounding problem is that analysts expectations for earnings this year and next year continue to be revised lower.
[SPEAKER_01]: And it's not shocking, considering the type of business that Berkshire is in from, you know, there may be businesses is Geico, right?
[SPEAKER_01]: And if tariffs are going up, the input costs to fix
[SPEAKER_01]: the fixed cars, fixed homes, whatever they're ensuring goes up.
[SPEAKER_01]: And this is the case for all property and cashily insurers.
[SPEAKER_01]: And so I think that's one of the headwinds.
[SPEAKER_01]: Burning's issue is those fall eight percent, but then bounce back six percent next year.
[SPEAKER_01]: But it's still lower than where we were last year at twenty two dollars per share.
[SPEAKER_01]: This is Berkshire B by the Berkshire B shares.
[SPEAKER_01]: You're not seeing great earnings trends, definitely some near-term headwinds with tariffs, the economy slowing a bit.
[SPEAKER_01]: They own railroads, but burning to northern.
[SPEAKER_01]: So less goods potentially being shipped to due to tariffs.
[SPEAKER_01]: So there's just a lot here that at least in the shorter term.
[SPEAKER_01]: I'm optimistic that this recent downtrend that started when it this peaked out in late April, I'm not convinced that this is the bottom.
[SPEAKER_01]: I'm not convinced that I want to step in and size at these levels.
[SPEAKER_01]: I still think there could be more pain ahead.
[SPEAKER_01]: Now, long term, the due of great assets fairly diversified.
[SPEAKER_01]: But I do also worry, like I said before, about that key man risk with Warren stepping down and the new leadership, as I've said before in the show, hasn't shown to have the same discipline and investment chops as Warren, which is frankly, it's all task, right?
[SPEAKER_01]: So not to say that they can't be.
[SPEAKER_01]: solid that can't be good, but, you know, I think that this is an area that you want to be careful with.
[SPEAKER_01]: So I'd continue to watch it.
[SPEAKER_01]: Watch it.
[SPEAKER_01]: It's not at a level that's screaming by at this point.
[SPEAKER_01]: So I would be patient on Berkshire.
[SPEAKER_05]: All right.
[SPEAKER_05]: Thank you, Justin.
[SPEAKER_01]: Thank you for the call that was Thomas and Santa Cruz looking at Birch your beat.
[SPEAKER_01]: Now, we're moving into a break until the content I focus point more answers to your questions and a YouTube question as well.
[SPEAKER_01]: And yes, I will get today's Mark Wrap also.
[SPEAKER_01]: Call me right now at eight and eight and nine chart.
[SPEAKER_03]: Sirious investors are certain to have finance and investment questions.
[SPEAKER_03]: Wanted to get your take on WW Granger.
[SPEAKER_03]: And the best person to ask your question in the right way is you.
[SPEAKER_01]: I was wondering from your standpoint, they're a downside in buying fractional shares versus whole shares.
[SPEAKER_03]: And twenty four seven rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.
[SPEAKER_01]: The issue, though, is really over the last decade or so.
[SPEAKER_01]: It's never maintained this level of profitability for a longer time.
[SPEAKER_01]: Modernies are incredibly volatile, so when the going is good, take some profit.
[SPEAKER_03]: Your participation makes it in Vestock better.
[SPEAKER_03]: My name is Mike, I'm calling in from Orange County, California.
[SPEAKER_03]: This is Lewis calling from Bolivia.
[SPEAKER_03]: Let's go talk to Chris and me.
[SPEAKER_03]: So don't forget to call in Vestock.
[SPEAKER_03]: First off, great show.
[SPEAKER_03]: I went a lot for you, too.
[SPEAKER_03]: Hey, day eight, ninety nine chart.
[SPEAKER_03]: The more you learn about how the market works, the better your chances for success.
[SPEAKER_03]: So don't forget to call in Vestark.
[SPEAKER_01]: And we had a lot of ground to cover over the next forty five minutes or so into time remaining will get to all of it.
[SPEAKER_01]: Our main focus point is coast fire coast fire.
[SPEAKER_01]: I like this topic.
[SPEAKER_01]: There's a a been a recent trend called fire financial independence retire early and this is a twist on fire and I really like it because it I think is a bit more realistic and
[SPEAKER_01]: both in the short term as well as the long term.
[SPEAKER_01]: So I actually really like this strategy for a lot of people.
[SPEAKER_01]: So we'll take into that.
[SPEAKER_01]: In addition, we'll touch on the dollar and what we call purchasing power parity.
[SPEAKER_01]: Also, there's a measure of purchasing power parity called the Big Mac Index put up at the economists and it tells you whether the dollar
[SPEAKER_01]: is over undervalued.
[SPEAKER_01]: And now that the dollar index has fallen about ten percent since it's beginning to be here.
[SPEAKER_01]: Where does that leave the Big Mac index?
[SPEAKER_01]: So we'll dig into that.
[SPEAKER_01]: Also, everyone's focusing on tariffs and their economic impact.
[SPEAKER_01]: There's a Trump policy that is far more impactful on the broader economy than tariffs because tariffs are on goods and goods are very small percentage of our economy.
[SPEAKER_01]: The majority of our economy about seventy plus percent are services and immigration policy has a much stronger direct impact on services than it does on
[SPEAKER_01]: the rest of the economy.
[SPEAKER_01]: So we'll dig into what impact that could have both on economic growth as well as probably inflation.
[SPEAKER_01]: Okay, so we'll dig into that.
[SPEAKER_01]: In addition, we also have, if we have time, the diamond industry, it's transformed dramatically over the last decade and we'll talk about why that is.
[SPEAKER_01]: And then we have voice main calls.
[SPEAKER_01]: One is on Palo Alto.
[SPEAKER_01]: Networks and the other is on how to add a trailing stop.
[SPEAKER_01]: And we also have questions that came in via the investor, YouTube channels.
[SPEAKER_01]: Well, and of course, I welcome your finance and investment question right now at eight to eight, ninety nine chart.
[SPEAKER_01]: Now let's go look at the market today.
[SPEAKER_01]: It was another positive day.
[SPEAKER_01]: Hold this up here.
[SPEAKER_01]: If my computer wants to go along with me here,
[SPEAKER_01]: So I was a positive day.
[SPEAKER_01]: I opened day, there we go.
[SPEAKER_01]: SMP was up half a percent, a little half a percent.
[SPEAKER_01]: Same with the Dow and the NASDAQ about three quarters of one percent.
[SPEAKER_01]: But small caps did very well today.
[SPEAKER_01]: Small cap growth of one point two nine percent and small cap blend what about one and a quarter.
[SPEAKER_01]: So you had small caps up over one percent on average today while the rest of the market.
[SPEAKER_01]: Like I said, about half a percent or so.
[SPEAKER_01]: You had some pockets of weakness in the healthcare space as well as some pockets of strength in your tech.
[SPEAKER_01]: Financials did fairly well.
[SPEAKER_01]: You had bank America over two percent.
[SPEAKER_01]: So pretty solid day on that front.
[SPEAKER_01]: Now when it comes to the rest of the market, you had or the rest of the rest of the asset class should we say.
[SPEAKER_01]: Where is it?
[SPEAKER_01]: I'm pulling it up.
[SPEAKER_01]: My system goes by.
[SPEAKER_01]: Guys, we're gonna break when I'm on time.
[SPEAKER_01]: So I can give you more.
[SPEAKER_01]: We're heading to a break and we call now a day-to-day dining at church.
[SPEAKER_03]: Have you heard about the new Invest Talk Store?
[SPEAKER_03]: That's right, you'll find great merch for the savvy investor.
[SPEAKER_03]: It's all there for you now at InvestTalkStore.com.
[SPEAKER_03]: And now Justin Klein is here and taking your finance and investment questions live.
[SPEAKER_03]: Call Invest Talk.
[SPEAKER_01]: Now, before the break, I was going over the market and I want to finish that because you did have some decent movements and other asset classes.
[SPEAKER_01]: Dollar was up point two percent.
[SPEAKER_01]: Treasuries were weaker, which means rates were a bit higher, third year.
[SPEAKER_01]: hovering just above five percent so recapturing at five percent level.
[SPEAKER_01]: Bitcoin was down point one percent gold finished up point four percent WTI was up one point six percent so oil did fairly well.
[SPEAKER_01]: On the economic front, June retail sales was a bit better than expected.
[SPEAKER_01]: Point six percent month over month consensus was point two.
[SPEAKER_01]: It's actually pretty big beat there.
[SPEAKER_01]: If you ex out autos though, it was more of a modest beat point five percent month over month versus expectations of point four.
[SPEAKER_01]: May was revised slightly higher as well there, but but only by point one percent.
[SPEAKER_01]: So pretty interesting strength out of the retail sales.
[SPEAKER_01]: Strength was in car and auto parts.
[SPEAKER_01]: clothing stores, building materials, restaurants, and bars continue to be strong, general merchandise.
[SPEAKER_01]: Weakness was really electronics and appliances for a nature and home stores, things that have tariffs involved prices going higher.
[SPEAKER_01]: So that's one issue.
[SPEAKER_01]: The labor market report Thursday, every Thursday, you get the continuing initial claims.
[SPEAKER_01]: And once again, you had an initial claims that actually beat.
[SPEAKER_01]: It's like about a month now where initial claims continue to decline from closer to two hundred fifty thousand per week, which have peaked out at last month.
[SPEAKER_01]: And now we're down to twenty one.
[SPEAKER_01]: Consensus was two thirty two.
[SPEAKER_01]: But continuing claims that continues to stay steady around the one point nine five.
[SPEAKER_01]: million people on the unemployment goals.
[SPEAKER_01]: Now consensus was one point nine seven.
[SPEAKER_01]: So it did beat a little bit, but still kind of in that uptrend.
[SPEAKER_01]: Philly Fed manufacturing for July was very strong.
[SPEAKER_01]: Fifteen point nine from negative four in June.
[SPEAKER_01]: So certainly some strength there.
[SPEAKER_01]: So overall, actually a fairly decent day for economic numbers.
[SPEAKER_01]: So that was the market today and tomorrow is OPEX.
[SPEAKER_01]: Let's take a live call from Larry in Minnesota looking at Akamai.
[SPEAKER_08]: Hey, Justin.
[SPEAKER_08]: Hey.
[SPEAKER_08]: Yeah, I was looking at this name.
[SPEAKER_08]: They're a cloud platform provider.
[SPEAKER_08]: It seems like they help companies deliver content securely.
[SPEAKER_08]: Kind of serving as an infrastructure as a service.
[SPEAKER_08]: You know, they work with some of the largest companies and they have a
[SPEAKER_08]: A good divers fight revenue based both geographically and across their customers.
[SPEAKER_08]: Seems like they have high recurring revenue, strong free cash flow, strong buyback.
[SPEAKER_08]: They've bought back up twenty-two percent of their float over ten years.
[SPEAKER_08]: So, this curious what your opinion is on this company and what risks them I may be not seeing here.
[SPEAKER_01]: Well, I like the recurring revenue part.
[SPEAKER_01]: This is a name we've owned.
[SPEAKER_01]: We own the long time ago for clients.
[SPEAKER_01]: I think the biggest issue is the profitability.
[SPEAKER_01]: We're trying to equities only about nine percent.
[SPEAKER_01]: And that's declining from the mid teens back in twenty twenty one.
[SPEAKER_01]: So that's an issue.
[SPEAKER_01]: And then the growth, right?
[SPEAKER_01]: Where growth in the broader business is just not really there.
[SPEAKER_01]: revenue last quarter is up three percent earnings this year so speed down a three percent okay and that's with buying back shares and you see the net income peaked out around six hundred twenty eight million that was in the second quarter of last year now we're down to four hundred fifty two million
[SPEAKER_01]: okay so net income is falling if you look at operating margins right now they're at fifteen percent but that's way down from a high around twenty three percent in twenty twenty two and even go back to twenty fifteen they're up to twenty two percent so they've been in a long kind of downtrend in the in their profitability
[SPEAKER_01]: They do have a good balance sheet, pretty minimal debt.
[SPEAKER_01]: And I like the way they're taking their cash flow, which is healthy and putting that into share by bags.
[SPEAKER_01]: But oftentimes, that can mask the underlying issues with the business.
[SPEAKER_01]: And I just don't see a lot of, I don't see a growth.
[SPEAKER_01]: I see more erosion of their business over the longer term.
[SPEAKER_01]: I see the merits, but I just would rather own something that has some organic growth, not just manufactured growth through stock buybacks.
[SPEAKER_01]: I don't think it's terrible, it's not like I would
[SPEAKER_01]: Blast anybody for owning it, that it's the worst thing in the world or anything like that.
[SPEAKER_01]: I don't see it as particularly compelling because of that lack of growth and low profitability that continues to go down.
[SPEAKER_01]: And then you look at the chart, right?
[SPEAKER_01]: It's momentum is not very good.
[SPEAKER_01]: I just would continue to watch it until they can return to growth, start expanding their margins.
[SPEAKER_01]: I worry that this is a value trap.
[SPEAKER_01]: Thanks for the call.
[SPEAKER_08]: Okay, thank you.
[SPEAKER_01]: No problem.
[SPEAKER_01]: Well, next in the best stock, we will look into the story.
[SPEAKER_01]: Three biggest misconceptions, uh, dividend stocks.
[SPEAKER_01]: Many investors believe dividend stocks are always safe and reliable, but there are key misconceptions that can lead to poor investment, choices, if not carefully examined.
[SPEAKER_01]: Best story for tomorrow, but for now, I'm Justin Klein and ready to take your calls right now.
[SPEAKER_01]: At eight, eight, nine, nine chart.
[SPEAKER_03]: You've got finance and investment questions, and Justin Klein is ready to provide his unbiased answers.
[SPEAKER_03]: Call now or anytime.
[SPEAKER_01]: Now our main focus point today is about coast fire, coast fire, and this is a wrinkle on the very popular fire concept, which is financial independence retire early.
[SPEAKER_01]: And coast fire is a bit different.
[SPEAKER_01]: And frankly, I think it's far more achievable for most people.
[SPEAKER_01]: Now, a coast fire is where you make life choices that save a large amount of money so you can retire before your sixties.
[SPEAKER_01]: But you do it in a way where you don't just quit working, you scale back your hours.
[SPEAKER_01]: You scale back, maybe you change careers and something that's less lucrative or something you want to do, something that's more flexible or just simply less hours.
[SPEAKER_01]: Whatever that means to you.
[SPEAKER_01]: So you still minimize your spending, you invest as much as possible, very similar to fire, and you reach your target of saving savings that lets you coast towards an eventual retirement in your sixties.
[SPEAKER_01]: So instead of, hey, I'm going to limit my spending
[SPEAKER_01]: Invest the ton in my twenties and thirties and maybe in my forties and then maybe fifty I retire and I'm done working and that's the fire concept right retire early Early could mean a lot of different things but Coast fires basically saying I'm going to Have some similar concepts concepts in my life financially
[SPEAKER_01]: the limit spending and save a lot, but I'm not going to, my goal isn't to stop working.
[SPEAKER_01]: It's to do something a bit different.
[SPEAKER_01]: Or scale back at hours like I said.
[SPEAKER_01]: Now why this is more achievable?
[SPEAKER_01]: Well, because when you, your goal is just to cover your day-to-day expenses.
[SPEAKER_01]: which is kind of the the coast fire goal, which is okay.
[SPEAKER_01]: At what point can I scale back?
[SPEAKER_01]: I no longer need to save more for example, right?
[SPEAKER_01]: I don't need to save.
[SPEAKER_01]: I might save thirty forty percent of my income up until I hit my goal.
[SPEAKER_01]: And then I'm just just covering my expenses and the rest is just going to grow, right?
[SPEAKER_01]: So you might save a ton.
[SPEAKER_01]: And then at forty or forty five, you might say, I'm going to go for full time the part time, but I have enough money to where I invest it over the next decade or two when I hit sixty or sixty five, I can combine that with Social Security or some other pension that I might be qualified for.
[SPEAKER_01]: And I can, I will have enough money to really retire.
[SPEAKER_01]: But there's this area where I'm coasting.
[SPEAKER_01]: This is fifteen to twenty, maybe twenty-five years where I'm not working that hard anymore.
[SPEAKER_01]: I did that.
[SPEAKER_01]: I saved the time.
[SPEAKER_01]: I sacrificed now.
[SPEAKER_01]: You know, I'm working a part-time job.
[SPEAKER_01]: Maybe I'm a barista at Starbucks or whatever.
[SPEAKER_01]: Doing something that you want to do more than what you're doing now.
[SPEAKER_01]: And that's really the coast fire concept.
[SPEAKER_01]: And that's why I like it.
[SPEAKER_01]: You know, another reason why it can help be helpful too is, and more realistic is that period where you go from, you work part time, you can still get health insurance, it's certain jobs, you might even still have some sort of four or one K, you can get an employer match on, et cetera.
[SPEAKER_01]: And you still are in contact with society.
[SPEAKER_01]: I think that's the biggest aspect the fire people miss is that
[SPEAKER_01]: When you retire, you don't have that constant, almost forced interaction with the rest of the world.
[SPEAKER_01]: And that in many ways can be unhealthy, both physically and mentally.
[SPEAKER_01]: And so this concept, which means that your target will be lower than the standard fire of how much you need to save.
[SPEAKER_01]: This is something that keeps you busy during those co-steers and allows you to expand, have more time to expand on those relationships.
[SPEAKER_01]: Explore those relationships, do things with the people that you interact with in friends you make, and the family that you have as well.
[SPEAKER_01]: What is that's bridge to the future?
[SPEAKER_01]: That's really what this is trying to figure out.
[SPEAKER_01]: What is that dollar man I need?
[SPEAKER_01]: And where are the events that I need to get to in order to bridge myself to that ultimate retirement?
[SPEAKER_01]: And the first might be just that savings target, like I said.
[SPEAKER_01]: But it also might be a pension that you're eligible for.
[SPEAKER_01]: It also might be kids leaving the house.
[SPEAKER_01]: Right, I need to work, save, carry this, I don't say burden, but carry this other person human being on my payroll, get them off.
[SPEAKER_01]: And then I can use that money, save a little bit more and get to that point where I can just coast.
[SPEAKER_01]: I can scale back my working hours and make less money and that's fine because I have saved enough.
[SPEAKER_01]: And it might also be when you pay off that mortgage.
[SPEAKER_01]: Right?
[SPEAKER_01]: You put extra towards your mortgage.
[SPEAKER_01]: Well, I do right now.
[SPEAKER_01]: We have clients that are doing this, putting it in treasuries.
[SPEAKER_01]: They're mortgage rates at two percent.
[SPEAKER_01]: And they're, but they're putting money towards this treasurer account earning four percent earning a gap between their interest accrual on their mortgage and their cash.
[SPEAKER_01]: And then once cash goes down, cash yields go down below that mortgage rate, then they take that cash in their payout.
[SPEAKER_01]: a lot of people are doing that as well.
[SPEAKER_01]: So these are goals that you can put in place to
[SPEAKER_01]: hit in order to hit that coast portion of the coast fire, which that's something if you want need a financial advisor, it might be helpful to lay this all out.
[SPEAKER_01]: So what we do for clients beyond just the investment side and getting that dialed in, it's about getting the financial plan dialed in and we have clients that pretty much are on the path for coast fire.
[SPEAKER_01]: And I think it's a great concept that a lot of people should follow.
[SPEAKER_01]: Those keep things moving and play a fresh call like question now at eight and a ninety nine chart.
[SPEAKER_07]: This is Brett stress from California.
[SPEAKER_07]: I called him before you guys are excellent on a set me straight on some of these stocks.
[SPEAKER_07]: I really want to get the cybersecurity and I was in crowds driving the cross-action so high.
[SPEAKER_07]: So I started really investing in Palo Alto, PANW.
[SPEAKER_07]: What is your feedback on that stock?
[SPEAKER_07]: Do you feel like I'm trying to I'm thinking more five year to hold this?
[SPEAKER_07]: stock, but it grows pretty slow, very conservative.
[SPEAKER_07]: Just want to know if it's something that I should keep going with, or you recommend something else.
[SPEAKER_07]: Thank you.
[SPEAKER_01]: Are you looking at Palo Alto networks?
[SPEAKER_01]: And as you imagine, it is out of Santa Clara, out of Palo Alto, or out of Silicon Valley.
[SPEAKER_01]: And it is in the cybersecurity space.
[SPEAKER_01]: earnings growth continues to be strong now it's slow to bit so it's be fifteen percent this year from twenty eight percent last year is seventy six percent a year before and earnings has to go up to all percent next year so that is probably my biggest worry is that this is trading at very high multiple prices sales at fifteen times and well that's a great business
[SPEAKER_01]: Twenty-one percent return in equity, pristine balance sheet, good cash flow, excuse me, about three billion dollars, trillion, twelve months, but it's enterprise values, a hundred and twenty-five billion.
[SPEAKER_01]: So it's about a two-and-a percent free cash flow yield, and free cash flow has gone sideways, really over the past two years.
[SPEAKER_01]: It's just hanging out around three billion dollars.
[SPEAKER_01]: Once again, good business, but it's just too expensive.
[SPEAKER_01]: Enterprise value D, but it's seventy five.
[SPEAKER_01]: And to me, I would just be very patient within this space.
[SPEAKER_01]: I agree that you want to have cybersecurity in your portfolio at some point over the long term.
[SPEAKER_01]: The problem is is that
[SPEAKER_01]: They keep issuing shares as well, so it's stock based compensation.
[SPEAKER_01]: So not really counting for that and free cash flow that worries me.
[SPEAKER_01]: So the issuing more shares at sky high valuations.
[SPEAKER_01]: I understand why it's on your watch list, but it needs to be much, much cheaper.
[SPEAKER_01]: So I'm passing appellals and networks.
[SPEAKER_01]: And then if I look at a daily charge in the short term, it did have a pretty nice reversal a few days ago.
[SPEAKER_01]: It looks like it's topping here.
[SPEAKER_01]: And so I would pass on it.
[SPEAKER_01]: Now, every day we receive questions from the comments section over on the best talk, YouTube channel, and let's answer one of those questions.
[SPEAKER_01]: Now, Nicholas Collins says, hey, hope you're doing well.
[SPEAKER_01]: I have a question about new month, mining.
[SPEAKER_01]: It's about six percent of my portfolio with the recent gains and wondering when is the good time to trim or at all?
[SPEAKER_01]: Well, I think the broader question is how much exposure do you have to precious metals.
[SPEAKER_01]: Now, six percent, you're kind of an upper limits of what I want for one particular
[SPEAKER_01]: company.
[SPEAKER_01]: However, this is all only your only gold miner than I would probably hold it.
[SPEAKER_01]: So I think new mod is undervalued.
[SPEAKER_01]: I have no problems with you holding it.
[SPEAKER_01]: They'd have a little bit of pullback recently, they'd have to see if those stuff down.
[SPEAKER_01]: But earning is supposed to be five dollars next year.
[SPEAKER_01]: So about eleven to twelve times forward looking earnings.
[SPEAKER_01]: Obviously, gold prices continue to go higher.
[SPEAKER_01]: They're very well diversified in their minds throughout the world, sixty four billion dollar market cap.
[SPEAKER_01]: These activities in one point seven percent there.
[SPEAKER_01]: Last quarter revenues about twenty five percent earnings are up to one hundred twenty seven percent.
[SPEAKER_01]: So I like Numa.
[SPEAKER_01]: Is it a decent time to trim after this run?
[SPEAKER_01]: Sure.
[SPEAKER_01]: Maybe balance it back to three or four percent.
[SPEAKER_01]: But once again, it's about the total allocation of gold.
[SPEAKER_01]: So if you have less than fifteen percent, then I probably wouldn't trim it at all.
[SPEAKER_01]: I'll probably keep this as part of your exposure to the golden mining space.
[SPEAKER_01]: Thanks for the call.
[SPEAKER_01]: Now let's squeeze in another call or question.
[SPEAKER_01]: Yeah.
[SPEAKER_06]: Hi, Investor.
[SPEAKER_06]: I was hoping you guys could walk me through how to edit trailing stuff.
[SPEAKER_06]: Are you swabbed as my brokerage?
[SPEAKER_06]: You know, I see online about like what percentage to do a trailing stuff that but I don't see exactly how to like actually execute it.
[SPEAKER_06]: So if I want to sell it like five percent lower, because I just do like a limit order.
[SPEAKER_06]: That's good till close and you know submit that.
[SPEAKER_06]: I guess another worry I have is that you know someone on the other side could
[SPEAKER_06]: I guess theoretically you know also have a buying price you know five percent lower and that order would be executed and even before the price got to that level just because there's another order on the I guess opposite side of the trade if that makes sense I guess I just want to make sure I do it the right way where I'm not you know missing out on a potential gain you know just due to a poor order being submitted if that makes sense
[SPEAKER_06]: as opposed to actually coming down in price, which I'd be okay with.
[SPEAKER_06]: But yeah, I'll listen on the show and thank you always.
[SPEAKER_06]: Bye.
[SPEAKER_01]: Oh, we custody our accounts at Schwab as well.
[SPEAKER_01]: Now, we typically don't trade directly on the Schwab platform, believe it or not.
[SPEAKER_01]: We actually trade through a couple of pieces of software.
[SPEAKER_01]: One, we pay for separately called Orion that our clients log in through.
[SPEAKER_01]: And the other is actually a piece of software that came over from TD Ameritrade.
[SPEAKER_01]: It's called Think Pipes, kind of off-shoot.
[SPEAKER_01]: Very similar to Think or Swin.
[SPEAKER_01]: So we trade mainly on there.
[SPEAKER_01]: But I do know on Schwab and I actually have a pull up here is that you can put a trailing stop limit or trailing stop on an order.
[SPEAKER_01]: And now this is on the institutional side.
[SPEAKER_01]: I haven't seen it on the retail side.
[SPEAKER_01]: So I'm not sure, but you should be able to set a trailing stop.
[SPEAKER_01]: However, if you can't do it online, call them.
[SPEAKER_01]: There's a trading desk and they'll help you with how to place that order.
[SPEAKER_01]: Now, when it comes to, will someone see that?
[SPEAKER_01]: Will they get picked off?
[SPEAKER_01]: It could.
[SPEAKER_01]: There are market makers that see those orders and you could certainly get picked off there.
[SPEAKER_01]: I personally would not try to, I don't like
[SPEAKER_01]: using these orders and placing them.
[SPEAKER_01]: I rather manually calculate that, right?
[SPEAKER_01]: What that trailing stop is, you know, keep a notebook on your positions of, you know, what if it drops below X and you can do alerts, I believe.
[SPEAKER_01]: I know there's a lot of pieces of software.
[SPEAKER_01]: We have software.
[SPEAKER_01]: We can do alerts if something drops below certain price.
[SPEAKER_01]: It will alert us.
[SPEAKER_01]: So you might want to find some software to try to do something like that.
[SPEAKER_01]: That's the way I would execute a trailing stop.
[SPEAKER_01]: And for everyone else out there, what a trailing stop is
[SPEAKER_01]: is when a stock is rallying that if it drops below a certain percentage, then you would sell it.
[SPEAKER_01]: So that's a trailing stock.
[SPEAKER_01]: Now lastly, let's talk, not lastly, before the break, let's touch a bit on the Big Mac Index.
[SPEAKER_01]: And we know tariffs are gone up on average.
[SPEAKER_01]: This year, the effective tariff rate has gone from two and a half percent last year to seventeen percent this year.
[SPEAKER_01]: And the dollar has declined significantly, but the economist has a Big Mac Index.
[SPEAKER_01]: And the reason they do this is because Big Macs are fairly consistent throughout the world.
[SPEAKER_01]: And based on what price they trade for, you can really see which currencies are over or undervalued.
[SPEAKER_01]: So this is in economic terms, you call this purchasing power parity.
[SPEAKER_01]: And if all things being equal doesn't matter which country you're in, it's a big match should cost the same.
[SPEAKER_01]: In reality though, that's not true.
[SPEAKER_01]: And based on this, you can see which currencies are over undervalued.
[SPEAKER_01]: So currencies that are undervalued, Taiwan, Ruby, you have the Vietnam, sorry, the Indian Ruby, the Taiwan, Taiwanese dollar, there we have Taiwanese dollar, Indian Ruby and the Indonesian Ruby as well.
[SPEAKER_01]: Those are the three most undervalued.
[SPEAKER_01]: The most overvalued is actually
[SPEAKER_01]: This was Frank.
[SPEAKER_01]: And the euro is now a bit overvalued, and the pound is a bit overvalued as well.
[SPEAKER_01]: But most other currencies are undervalued, which means they should appreciate, which means the dollar should continue down over time, especially with this new tariff regime.
[SPEAKER_01]: Now, this invest stock, I'm just inclined with one goal here at each heavy week.
[SPEAKER_01]: It helps you achieve your own version of financial freedom, and it will work to use after this final breaks, which questions in right now at eight and eight in a chart.
[SPEAKER_01]: And don't forget to head over to the new invest stock store.
[SPEAKER_01]: It's open now on the best stock store.com.
[SPEAKER_03]: In June of June of June of June of June of June of June of June of June of June of June of June of June of June
[SPEAKER_01]: It hit ninety nine chart.
[SPEAKER_01]: It hit ninety two four two seven eight.
[SPEAKER_01]: So you get through and ask your question.
[SPEAKER_01]: Before we close the day, but before we close, that's also answered in the best talk of YouTube question.
[SPEAKER_01]: And Amir Rameek says question on HPE or CAR more.
[SPEAKER_01]: So what you think they are sort of storage cooling systems for chips.
[SPEAKER_01]: Very interesting.
[SPEAKER_01]: Love the know what you think.
[SPEAKER_01]: Well, HPE, these are these are very different companies.
[SPEAKER_01]: So HPE is fuel-packered enterprises.
[SPEAKER_01]: They're just they just had approval of Juniper for network.
[SPEAKER_01]: So they are they're merging with Juniper and the market it's kind of like that.
[SPEAKER_01]: The market's up after the DOJ looks like they approved that merger.
[SPEAKER_01]: And so they're a IT vendor.
[SPEAKER_01]: Solid business, but frankly, not an amazing business.
[SPEAKER_01]: It's a trend equity is only six percent.
[SPEAKER_01]: That's not great.
[SPEAKER_01]: And even the good times, we're trying to get a good hit, twenty percent back in twenty, twenty, two.
[SPEAKER_01]: That was kind of an anomaly.
[SPEAKER_01]: Typically, we're trying to equity hovers around the high single digits.
[SPEAKER_01]: Once again, not a bad business.
[SPEAKER_01]: but not an amazing business, either.
[SPEAKER_01]: Earnings this year, for example, is just the fall of six percent after falling eight percent last year.
[SPEAKER_01]: So, not great.
[SPEAKER_01]: The other one, Carrier, C-A-R-R is a symbol, is in the heating, ventilation, and air conditioning or refrigeration business business, which is historically a much better business.
[SPEAKER_01]: If you look at its profitability, forty-one percent would turn that way.
[SPEAKER_01]: Return of the capital, twenty-one percent.
[SPEAKER_01]: They're getting a better, you're paying a higher premium than you would for HPE, but you're getting a much better business.
[SPEAKER_01]: So if I'm picking one or the other, I'm going to go with C-A-R-R, carrier, global.
[SPEAKER_01]: Thanks for the call.
[SPEAKER_01]: Let's go take a live call bill in Northern California looking at N-V-O, N-A-N-N-R-V-O, N-R-Disc.
[SPEAKER_04]: Hey, Justin.
[SPEAKER_04]: Hey.
[SPEAKER_04]: Yeah.
[SPEAKER_04]: I just noticed lately that
[SPEAKER_04]: This is kind of, you know, come up from a lower point here.
[SPEAKER_04]: I don't know if that's bottoming.
[SPEAKER_04]: But I like the company and I just wonder how you see it as terms of valuation and maybe as an entry point for a longer term hold.
[SPEAKER_01]: This is interesting because we were reassessing the healthcare industry and kind of relooking at all the players in the space.
[SPEAKER_01]: And this, this was in our top five.
[SPEAKER_01]: So we say,
[SPEAKER_01]: But we end up not going with it for a few reasons.
[SPEAKER_01]: One is momentum is poor.
[SPEAKER_01]: So until the chart starts to look a bit better, I think there's, you know, the market telling you something.
[SPEAKER_01]: Because if you look at earnings expectations for next year, they are pretty solid.
[SPEAKER_01]: So to go up again, their cash flows is good.
[SPEAKER_01]: But then if you look at things like their, their market share in the GLP one,
[SPEAKER_01]: therapy area and their market share is falling to you know literally they're looking to they have a new obesity drug called uh... congress semi set semi which is a late-scale late-stage glp one and the results were not that great uh... their legacy business is around insulin and insulin pricing continues to be pressured
[SPEAKER_01]: In fact, they announced that we'll cut U.S.
[SPEAKER_01]: list prices on several insulin products, but we're in seventy percent starting January of next year.
[SPEAKER_01]: And that was basically in line with Eli Villy.
[SPEAKER_01]: And this is all about regulatory and legislative pressures.
[SPEAKER_04]: Gotcha.
[SPEAKER_01]: Yeah.
[SPEAKER_01]: So.
[SPEAKER_04]: Okay.
[SPEAKER_04]: Well, thanks for the thanks for the insight.
[SPEAKER_04]: I appreciate it.
[SPEAKER_01]: Yeah, and the inflation reduction act mandated price negotiation for certain drugs that are Medicare, capping monthly insulin costs at thirty five dollars for Medicare recipients.
[SPEAKER_01]: That's a big part of their business.
[SPEAKER_01]: So while the whole GLP one craze, they were pumped up for that, and I think it's, it's come back down to Earth to at least more reasonable valuations.
[SPEAKER_01]: I think there's too many other issues here that
[SPEAKER_01]: bring a lot of risks to future earnings.
[SPEAKER_01]: And so for us, it looks good on the surface, but when you dig, there's too much lack of clarity, grass to buy, and you have to listen to the chart and the chart is at the lower.
[SPEAKER_01]: So the name we're going to continue to watch, but not buying it right now.
[SPEAKER_01]: I'm just in fun.
[SPEAKER_01]: Just complete the Dother Investor program and if they show maybe you need to write your own financial picture in any way, whether it's your best Malocation, your financial planning maybe, post-fire or fire in general, financial independence of fire really.
[SPEAKER_01]: That's what we're hoping for for all of you.
[SPEAKER_01]: And that's what we work towards with our clients.
[SPEAKER_01]: And so if you need help with any of that, I encourage you to head over to invest.com and schedule a free portfolio review, help bring clarity and confidence to whatever strategy you were trying to execute.
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