[SPEAKER_03]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk.
[SPEAKER_03]: Independent Thinking, shared success.
[SPEAKER_03]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.
[SPEAKER_03]: Here is KPP Financial Portfolio Manager, Luke Guerrero,
[SPEAKER_00]: Good afternoon fellow investors and welcome back to another episode of Invest Talk.
[SPEAKER_00]: I'm your host Lou Guerrero and today's Friday, January 30th, 2026.
[SPEAKER_00]: Now January is almost over but it does not mean our mission to educate you ends just as we turn to a new month.
[SPEAKER_00]: So we got a lot good plan for you today and as always we have plenty of finance and investment questions to answer.
[SPEAKER_00]: So what do we kick it off right now?
[SPEAKER_00]: with this question that came in earlier to eight a.d. ninety nine chart.
[SPEAKER_08]: I'd be happy to hear this.
[SPEAKER_08]: Kurt, Ohio, I'm just calling about power with industries.
[SPEAKER_08]: E.O.W.L.
[SPEAKER_08]: See it.
[SPEAKER_08]: Do pretty well up.
[SPEAKER_08]: Tell it on to it for a little while.
[SPEAKER_08]: I'm just wanted to know what you think it's going to do from here.
[SPEAKER_08]: Thank you.
[UNKNOWN]: Bye.
[SPEAKER_00]: Powell Industries, Dr. P.O.W.L.
[SPEAKER_00]: is an industrial electrical equipment manufacturer.
[SPEAKER_00]: So what they do is they design the engineer and they build these custom power control systems as well as electrical distribution equipment.
[SPEAKER_00]: There's really used all over the place, used for commercial reasons, used in the industrial setting and utilities and refineries and oil and gas and pipelines.
[SPEAKER_00]: It's $5.6 billion market cap company.
[SPEAKER_00]: So on the larger end of the small cap spectrum, and got very little debt less than $1 million in debt on its balance sheet.
[SPEAKER_00]: So very strong balance sheet, very strong fundamentals.
[SPEAKER_00]: In fact, I mean, there return on equities, it's 32.2% as of fiscal year end September 2025, projected to fall a little bit there.
[SPEAKER_00]: But on top of having great profitability,
[SPEAKER_00]: They also have very solid revenue growth as well.
[SPEAKER_00]: Revenue growth, sitting at 16.3% on an annualized basis going back to 2020 to have a backlog of industrial demand that should support future revenue viability visibility as well as strong orders in both the electrical utility space and the industrial markets.
[SPEAKER_00]: Why?
[SPEAKER_00]: Well, there's been a lot of
[SPEAKER_00]: A lot of money that has been spent and allocated towards modernizing the electrical grid.
[SPEAKER_00]: And so companies such as Powell stand to benefit from that.
[SPEAKER_00]: One other thing, the benefits them, very long product life cycle contracts.
[SPEAKER_00]: So this starts to create that recurring revenue as they're expanding, as they're growing operations.
[SPEAKER_00]: Those continuing sources of revenue really help to bolster your revenue growth, but then bottom line profitability and margins as well.
[SPEAKER_00]: And so it's understandable that this industrial name is trading at a pretty expensive valuation relative to its peers, 28.8 times price to forward looking earnings.
[SPEAKER_00]: Now, at a certain point it wasn't making any money, so over the past five years it's kind of a bit of a skewed price to forward looking earnings, but price to cash was 33 times, price to sales is 5 times, and so, you know, these numbers are pretty high relative to their peers, looks like on average.
[SPEAKER_00]: sits at about 1819 price to forward looking earnings here.
[SPEAKER_00]: Return on equity though far lower amongst the other names.
[SPEAKER_00]: It is a, you know, not your typical high growth tech name.
[SPEAKER_00]: It's a profit-oriented and industrial supplier with strong fundamentals that has benefited greatly from AI, build out from data center, build out, and from the overall electrical grid modernization.
[SPEAKER_00]: That's why, over the past year, it's up 87.67%.
[SPEAKER_00]: I mean, look at this performance, dating back to 2022, constant outperformance relative to the market, constant outperformance relative to the industry.
[SPEAKER_00]: Now, you know, growth rates are slowing a bit.
[SPEAKER_00]: They certainly are.
[SPEAKER_00]: Recent valuation is elevated, dividend yield is modest if you're more of an income-focused investor.
[SPEAKER_00]: But still, I think this is a name that over time, I would start to add slowly to, because it has been moving,
[SPEAKER_00]: In a positive direction for quite some time, could there possibly be a bit of a pullback in the horizon maybe?
[SPEAKER_00]: But given this growth given this profitability, certainly a name that I would not mind having in my portfolio.
[SPEAKER_00]: That is Powell Industries to your POWL.
[SPEAKER_00]: Thanks for the call.
[SPEAKER_00]: We've got a lot of ground covered in the next 45 minutes or so.
[SPEAKER_00]: And here's a little bit of what we have planned.
[SPEAKER_00]: The first thing is my main focus point, which is about an important topic that all of Wall Street has been talking about.
[SPEAKER_00]: And that is Japan's rate shock, the carry trade.
[SPEAKER_00]: unwinding a bit.
[SPEAKER_00]: While the US is looking to cut, the Bank of Japan is hiking rates for the first time in decades.
[SPEAKER_00]: So we'll talk a little bit about how a rising yen could trigger a massive reverse carry trade and maybe even crash US tech stocks.
[SPEAKER_00]: Also, the President announced his nominee to replace Jerome Powell's chair of the Federal Reserve in May, and that man is Kevin Warsh, so we'll talk a little bit about his history.
[SPEAKER_00]: Qualifications he brings to the table, and what we can glean from his past, how that might change our opinions of where the Fed is heading this year and into next year.
[SPEAKER_00]: We also have a good story about U.S. producers, prices posting their biggest gain in five months.
[SPEAKER_00]: But also, indications of the businesses are more and more passing tariffs on two consumers.
[SPEAKER_00]: Should we have time at the end of the show?
[SPEAKER_00]: We'll look back at January 26th and how the dollar has slid and emerging markets have roared.
[SPEAKER_00]: We also have some voice bank calls ready to play, including one on a Dutch brothers,
[SPEAKER_00]: As always, we also have some questions that came in from the comment section of the Invest Talk at YouTube channel, and hopefully we hear from some of you live throughout the show.
[SPEAKER_00]: Ready to do break?
[SPEAKER_00]: Still to come?
[SPEAKER_00]: A lot, a lot, a lot to talk about, and I'd be remiss if I did not mention that because of all of you,
[SPEAKER_00]: we have achieved more than 60 to million downloads.
[SPEAKER_00]: And as that number grows, our mission stays the same.
[SPEAKER_00]: If you got a burning question on your mind, give me a call now at 888-99 chart.
[SPEAKER_04]: Sirious investors are certain to have finance and investment questions.
[SPEAKER_02]: I'm looking at an EPS in Goldman Sachs, Nasdaq.
[SPEAKER_04]: And the best person to ask your question in the right way is you.
[SPEAKER_04]: If that would be a good hold to having the Roth IRA for the long term horizon.
[SPEAKER_04]: And 24-7 rain or shine, Justin Klein and Luke Guerrero stand ready to provide their
[SPEAKER_04]: This isn't really a copper plate, this is a iron ore plate with some aluminum copper.
[SPEAKER_00]: If you're looking at each of these, you have to hold so few names that are so top-heavy.
[SPEAKER_00]: I think it is probably ill-advised to pay.
[SPEAKER_00]: An expense ratio like this in order to get exposure that you could really get yourself.
[SPEAKER_04]: Your participation makes an invest talk better.
[SPEAKER_06]: Hey guys, Brian Thunrow, Carolina here.
[SPEAKER_06]: I'm a big fan of the show.
[SPEAKER_06]: I haven't missed an episode in over five years.
[SPEAKER_04]: So don't forget to call in Vestalk, 888-99 chart.
[SPEAKER_04]: The Vestalk phone lines never close, and now Luke Guerrero is here, taking your calls live.
[SPEAKER_04]: In Vestalk, 888-99 chart.
[SPEAKER_00]: Let's go to Taylor from Philadelphia Go Birds.
[SPEAKER_07]: Hey, Luke, how's it going?
[SPEAKER_07]: Yeah, I have a question.
[SPEAKER_07]: I have some of you.
[SPEAKER_07]: I'm sure it will be a popular topic.
[SPEAKER_07]: I own it in a taxable account.
[SPEAKER_07]: I'm up 3, I'm up over 200 percent.
[SPEAKER_00]: Possibly.
[SPEAKER_07]: But after seeing the shocking number today, I'm just wondering what you guys think guidance is for that.
[SPEAKER_07]: Is it the buying opportunity setting up?
[SPEAKER_07]: Is it really time to jump and run or what how should we interpret this?
[SPEAKER_00]: Well, I think it's a good lesson on some of the differences that people don't necessarily think about between the silver and the gold market.
[SPEAKER_00]: Gold ETFs, a lot of them are backed by physical gold, are incredibly liquid.
[SPEAKER_00]: There is a lot of money that is flowing into those things.
[SPEAKER_00]: Big players have less of an impact on the pricing of paper gold.
[SPEAKER_00]: Whereas silver is kind of the complete opposite.
[SPEAKER_00]: Silver markets are far less liquid.
[SPEAKER_00]: A lot of them are
[SPEAKER_00]: based primarily on synthetic products that track spot prices and open to a bit more speculation.
[SPEAKER_00]: Now, you know, what we have seen in the past couple months, if you are looking at this chart at home of SLV, which is the Isher Civil Trust, certainly at least going back to September, is a massive explosion, right?
[SPEAKER_00]: It's up 282%.
[SPEAKER_00]: in the past year.
[SPEAKER_00]: And so understandably you have areas where you have corrections after overbought conditions and a bit of a rebound on the idea that maybe the new Fed chair would be a bit more hawkish than the expectations.
[SPEAKER_00]: Now, you know, this is part, and it was part of a broader cell-off in the commodity space, but some of the underlying factors that have driven silver higher have driven gold higher are certainly still there.
[SPEAKER_00]: Silver also stands out relative to gold because of its industrial uses, because of its more widespread uses in jewelry as a cheaper alternative.
[SPEAKER_00]: And so, you know, I think that having commodities...
[SPEAKER_00]: Having silver, having gold, having copper, having all of those things, in your portfolio is important as a diversifier, but because the things that have been driving them higher are likely to continue to drive them higher in the future.
[SPEAKER_00]: But that being said, if you're up a lot, this is why we put constraints on our portfolio.
[SPEAKER_00]: Certainly, if you decide it in September, 2025, that you wanted to be 100% in silver and you decided to get out yesterday, you'd look like a genius, it's still what have been a bad idea.
[SPEAKER_00]: And so when things start to march up like this, this is why we need constraints on what we're willing to hold because especially in assets like this, they tend to be very volatile.
[SPEAKER_00]: Silver had a run to go in forward, I still like it.
[SPEAKER_00]: Thanks to the call.
[SPEAKER_00]: Like we are not the live call, Mike, from Utah.
[SPEAKER_00]: How can I help you?
[SPEAKER_06]: Oh yeah, there we go.
[SPEAKER_06]: Sorry for that.
[SPEAKER_00]: No, no, where is that going to help you?
[SPEAKER_06]: Yeah, I was just calling on Medline.
[SPEAKER_06]: I'm pretty sure it's considered an IPO.
[SPEAKER_00]: I think Mike, you're cutting it out, but I did hear that you're interested in Medline.
[SPEAKER_00]: So we can go ahead and take a look at that company that is ticker mdln
[SPEAKER_00]: MDLN is a new IPO'd company.
[SPEAKER_00]: It looks like it first started trading December 17th, 2025.
[SPEAKER_00]: It is a US-based medical supply and surgical products company.
[SPEAKER_00]: So they make surgical kits, gloves, personal protective equipment, and overall logistics of getting those products.
[SPEAKER_00]: to hospitals, to nursing homes, to surgery centers, towards these areas that need it.
[SPEAKER_00]: Now, it's had a bit of a strong debut, right?
[SPEAKER_00]: It had a pretty massive IPO.
[SPEAKER_00]: I think it's a price was about $29 a share.
[SPEAKER_00]: It's not trading at $44.20 a share.
[SPEAKER_00]: And other reasons why is, well, the dynamics of IPO, so I mean, that oftentimes, not all the time, in fact less than 50% of the time.
[SPEAKER_00]: They continue to be above IPO price while shares are locked up.
[SPEAKER_00]: Now what we've seen historically with IPO's and the reason why I tend to tell people to stay away from them is because on average over the first year after trading your expected return is negative.
[SPEAKER_00]: Why?
[SPEAKER_00]: Because you have a lot of hype from a IPO initial public offering when it hits the market.
[SPEAKER_00]: tend to have a price spike, but then you have areas of and pockets of large institutional shareholder selling off, you have lock up periods ending.
[SPEAKER_00]: So you have a bunch more shares hit the market, a lot more selling pressure from people that were bought in far below what even the initial public offering price was.
[SPEAKER_00]: So I tend to because it is a numbers game and because the empirical evidence shows us
[SPEAKER_00]: Regardless of what the company is, tend to stay away from IPOs within their first trading year, I would say that's still the case here.
[SPEAKER_00]: That is, Medline Inc. Tigger MDLN.
[SPEAKER_00]: Love to start the day with two live calls, but why don't we talk a little bit about the market before our next break?
[SPEAKER_00]: Because stocks were lower.
[SPEAKER_00]: The Dow was down 36 basis points, S&P down 43 NASDAQ down 94 small caps down 1.55% on the day.
[SPEAKER_00]: And really, I mean, not a lot of positivity.
[SPEAKER_00]: Big tech was mostly lower, Apple though, a bit of a slight gainer on its report, Tesla, fairing well compared to its counterparts.
[SPEAKER_00]: But semides were down, software was down, precious metals, obviously a big decliner on the day.
[SPEAKER_00]: So miners were down, home builders were down, high beta, momentum, small caps, most short of names, a lot of retail favorites all down on the day.
[SPEAKER_00]: A bit of a small pocket of outperformance, HPC's telecom's energy ensures some of the best performers,
[SPEAKER_00]: on the day, and on the bond side, bit of a mixture, the curve steepening yields down three to four basis points at the short end, and the dollar was at baby basis points, though, you know, in spite of that, still lower week today, silver down 31.4 percent, it's worst sessions since 1980, gold down 11.4, it's largest single day drop in decades,
[SPEAKER_00]: And in other remaining threads to the narrative, the president, obviously nominating Kevin Worsh, we'll talk about that a little bit later on in the day, him seeing a bit more hawkish than most of the leading candidates, precious metals, you know, selling off sharply, following a big reversal on Thursday, and some talk about just potential month-end selling pressure.
[SPEAKER_00]: On the earnings front, tech get a bit of the bulk of the attention from the corporate earnings side to other batch of strong results and guidance, but you know, the bar is pretty high here.
[SPEAKER_00]: Apple, for example, the bar was even lower than semis, but the stock didn't get much help, even though there's some pretty solid surprise to the upside, there was some pretty solid guidance as well.
[SPEAKER_00]: Some economic numbers came out today.
[SPEAKER_00]: PPI up 50 basis points well above the consensus across the board.
[SPEAKER_00]: We'll talk a little bit about that later on in the show as well.
[SPEAKER_00]: You know, earnings is going to be the big thing next week.
[SPEAKER_00]: We've got some numbers, ISM manufacturing on Monday, Jolts, of course on Tuesday, January Employment, coming a little bit later in the week.
[SPEAKER_00]: And here in an advice talk, we still got more to talk about over this next hour.
[SPEAKER_00]: So stay with me, give me a call, at 808-99 chart.
[SPEAKER_04]: There are a few things that make KPP financial special.
[SPEAKER_04]: One of them is parallel investing.
[SPEAKER_04]: This means they invest right alongside their clients.
[SPEAKER_04]: Here's how it works.
[SPEAKER_04]: When KPP financial makes a trade for their clients, Justin Klein makes the same trade for himself and KPP.
[SPEAKER_04]: On the same day, at the same price, and same percentage.
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[SPEAKER_04]: Learn more about Parallel Investing at investtalk.com.
[SPEAKER_00]: Japan's having a bit of a rate shock.
[SPEAKER_00]: And the latest breed on the Bank of Japan's thinking shows policymakers growing increasingly focused on whether inflation in Japan is no longer temporary, but structurally entrenched within their economy.
[SPEAKER_00]: Digging into the minutes from the December meeting, revealed a board that is clearly more comfortable with the idea of continued rate hikes after decades of what could only be considered ultra loose.
[SPEAKER_00]: Policy officials acknowledge that inflation pressures are being driven by the multiple forces at once, not just imported costs or short-term shocks, a weak yen feature pretty prominently.
[SPEAKER_00]: And there's a discussion with members noting it's role in pushing up import prices across energy, across food,
[SPEAKER_00]: and several policymakers even linked the currency's weakness directly to rising underlying inflation rather than viewing it as a side issue.
[SPEAKER_00]: That's not the only thing they talked about, labor shortages, and we're also highlighted as a growing driver of inflation, particularly as companies raise wages to retain workers.
[SPEAKER_00]: Members noted that firms are increasingly passing higher wage costs and input prices directly to consumers.
[SPEAKER_00]: And so that dynamic, which was once rare in Japan, is now becoming more widespread and more persistent.
[SPEAKER_00]: It's understandable then that some policy makers are warning that inflation risks may now be skewed to the upside if policy remains too accommodative.
[SPEAKER_00]: While the Bank of Japan raised rates in December by 75 basis points, members agreed that borrowing costs are still very, very low by historical standards.
[SPEAKER_00]: One member argued that the policy rate is too low relative to inflation, contributing to both the end weakness on one side and rising long-term yields on the other.
[SPEAKER_00]: That member suggested that timely rate hikes could help contain future inflation and stabilize bond markets.
[SPEAKER_00]: Others, however,
[SPEAKER_00]: Erd some caution, stressing the need to avoid moving to aggressively, while economic conditions remain uneven as they have for some time.
[SPEAKER_00]: Still, there were some broad agreements that future rate decision should be guided by incoming data rather than a fixed schedule.
[SPEAKER_00]: The end slide towards 160 per dollar earlier this month added a bit of urgency to the debate.
[SPEAKER_00]: Certainly,
[SPEAKER_00]: policy makers express concern about the impact of currency weakness on household purchasing power.
[SPEAKER_00]: Rising living costs have become a politically sensitive issue understandably ahead of Japan's upcoming general election.
[SPEAKER_00]: Now, the recent yen strength driven by speculation around the U.S., and Japan rate checks offered some temporary relief.
[SPEAKER_00]: Even so, board members made clear that currency movements cannot be ignored.
[SPEAKER_00]: We're in assessing inflation risks.
[SPEAKER_00]: Several emphasize that while exchange rates are not a formal policy target, their inflationary effects matter.
[SPEAKER_00]: Core inflation has now exceeded the Bank of Japan's 2% target for nearly four consecutive years.
[SPEAKER_00]: That track record is reinforcing market expectations that additional tightening,
[SPEAKER_00]: It's on the way.
[SPEAKER_00]: Economists generally expect the next rate hike later this year, the markets are pricing in a bit of an earlier move.
[SPEAKER_00]: Swap markets, which is a way that you can take a look at with the market itself, it's thinking currently implies a higher probability of reaching 1% within months.
[SPEAKER_00]: Some policy makers are suggesting that tightening and intervals of a few months to gradually approach neutral policy would be a better idea.
[SPEAKER_00]: Other stress that it's important to evaluate a wide range of indicators, including what businesses and it totally are telling you.
[SPEAKER_00]: But the key question remains whether wage and price increases are self-sustaining or is this just episodic as Jerome Powell would say transitory perhaps.
[SPEAKER_00]: For investors, the takeaway is that Japan's era of ultra-easy money is clearly ending, even if the path remains cautious.
[SPEAKER_00]: What does that mean for the US?
[SPEAKER_00]: I mean, we have seen spurts of times where financing in the end has become expensive.
[SPEAKER_00]: The carry trade has unwound a bit.
[SPEAKER_00]: I believe it was two years ago in the summer.
[SPEAKER_00]: When the same situation started to happen there and so so much of the U.S. market, especially on the growth aside on the tech side, has been supported by these historically weak lending conditions.
[SPEAKER_00]: But currency volatility's persisting, inflation is persisting.
[SPEAKER_00]: And so policy normalization is now tightly linked in the Bank of Japan's thinking.
[SPEAKER_00]: That combination,
[SPEAKER_00]: raises the odds of further rate hikes and keeps Japanese assets firmly in the global macro spite spotlight as we had deeper and deeper into 2026.
[SPEAKER_00]: Today's Friday is one of briefly mentioned the newest KPP premium newsletter which will be distributed to all of our subscribers tomorrow.
[SPEAKER_00]: In this week's KPP Insight section, we had a bit of a discussion on the Fed due to the most recent announcement of who may be replacing Jerome Powell
[SPEAKER_00]: The stock idea section we mentioned a construction supply company, as well as a tech company.
[SPEAKER_00]: And in the portfolio management section, we touched on hyperscalers.
[SPEAKER_00]: What is a hyperscaler?
[SPEAKER_00]: Who are the hyperscalers?
[SPEAKER_00]: And why has it become such an important part of where markets have moved over the past couple years?
[SPEAKER_00]: If that sounds interesting, if you're interested in learning more, visit us at investalk.com and subscribe to the newsletter.
[SPEAKER_00]: For all subscribers, the newsletter will hit your inbox, Saturday afternoon.
[SPEAKER_00]: We're headed into another break, but still more to come before we head off for the weekend.
[SPEAKER_00]: So, if you want to, if you want to chat with me live, give me a call at 888-99 chart.
[SPEAKER_04]: It's a new year.
[SPEAKER_04]: 2026 is here and so is Luke Guerrero.
[SPEAKER_04]: He's taking your finance and investment questions anytime.
[SPEAKER_04]: Call in Vestock 888-99 chart.
[SPEAKER_10]: Hey, guys.
[SPEAKER_10]: Part from Tucson here.
[SPEAKER_10]: Callin' today about Dutch grows in the ROS.
[SPEAKER_10]: They try through coffee house, probably familiar with it.
[SPEAKER_10]: If think it's a good company to invest in and what a good buy-in point would be or now is a good time to pick up some more.
[SPEAKER_10]: Anyway, I listen on the podcast and appreciate you guys a lot.
[SPEAKER_10]: Thanks for all you do for us.
[SPEAKER_00]: Bye.
[SPEAKER_00]: Dutch Brothers, coffee.
[SPEAKER_00]: is interesting company.
[SPEAKER_00]: So what it is is more of a drive through coffee joint.
[SPEAKER_00]: They have franchises, they have beverage shops across the United States and it's really known for two things, a very loyal customer base and very rapid expansion.
[SPEAKER_00]: Now, at IPO, in mid 2021,
[SPEAKER_00]: Like a lot of IPOs, it pops.
[SPEAKER_00]: And then it just starts to have a bit of a downward trend all the way into 2024.
[SPEAKER_00]: When you start to see a big explosion again in same source, same store sales, as well as store openings in general.
[SPEAKER_00]: And so revenue starts to pick up a bit.
[SPEAKER_00]: Right, from 1.2 billion in 2024, projected to 1.6 in 2025.
[SPEAKER_00]: Again, stellar growth from 2023 when it was 965 million.
[SPEAKER_00]: Marcians, they're okay, and it's a coffee business, right?
[SPEAKER_00]: They tend to be a bit lower within this industry.
[SPEAKER_00]: Free cash flow, started to pick up again.
[SPEAKER_00]: And if you ever driven around, you've seen long lines, front of this place.
[SPEAKER_00]: But it doesn't necessarily mean that because anecdotally you see a lot of people there, that it's necessarily the best company to invest.
[SPEAKER_00]: You're to date, it's down a bit, down 11.16%, down 13.97% over the past 52 weeks, down 5%.
[SPEAKER_00]: Today, and even in spite of that, it's still trading at massive valuation, 63 times price to forward looking earnings, 26.3 times price to cash flow.
[SPEAKER_00]: What are my biggest problems with coffee businesses in general?
[SPEAKER_00]: And it's not as big in an as an issue as it used to be.
[SPEAKER_00]: Is there still is a limited time in which coffee is highly sought after?
[SPEAKER_00]: Most people don't drink coffee at five o'clock in the afternoon.
[SPEAKER_00]: It just doesn't happen.
[SPEAKER_00]: And so, for these businesses that rapidly expand because they see this initial loyalty, sometimes you can find yourself in a situation where you stretch the business a bit too thin and when it's a low margin business, that can certainly be a problem.
[SPEAKER_00]: So, given how expensive it is, and it is very expensive for Dutch brothers, TickrBROS, gonna have to pass.
[SPEAKER_00]: Thanks for the call.
[SPEAKER_00]: Now, in front of you, like to take a little bit of time for a quick rundown of key benchmark numbers.
[SPEAKER_00]: So let me hit you with that list right now.
[SPEAKER_00]: The two-year yield was at 3.527% today, last week that number was 3.398.
[SPEAKER_00]: 213 weeks back, then number was 64 basis points.
[SPEAKER_00]: 10-year yield was at 4.239 today, compared to last week when it was 4.231,
[SPEAKER_00]: Gold 4943 announced today, $44 less than it was last week.
[SPEAKER_00]: But far ahead of where it was 26 weeks ago, it was 3348.
[SPEAKER_00]: And higher still than 205 weeks back when it was 1806.
[SPEAKER_00]: Silver 8628 per ounce today that is $16.69 less than it was last week.
[SPEAKER_00]: Way higher than 103 weeks ago and it was 2280 and higher still than 197 weeks ago and it was 2394.
[SPEAKER_00]: Oil, 65, 50, 7 per barrel today that it's $4.24 higher than it was last week.
[SPEAKER_00]: 71 weeks back then, it was 67,79, 113 weeks back then, and it was 74,30.
[SPEAKER_00]: 212 weeks ago then it was 66, 62.
[SPEAKER_00]: National average for a gallon of regular gasoline is 287, a 1 cent increase compared with last week.
[SPEAKER_00]: 139 weeks ago then, it was 356.
[SPEAKER_00]: 187 weeks back then it was 425 and looking all the way back 207 weeks, almost four years, a gallon of regular gas cost $350.
[SPEAKER_00]: California was averaging 429 per gallon and eight cents increased compared to last week.
[SPEAKER_00]: 116 weeks back then it was 532 and 192 weeks ago, 587.
[SPEAKER_00]: For comparison, in the great state of Georgia, gas is averaging $2.67 per gallon, that is $1.62 less than gas in California.
[SPEAKER_00]: We've been moving pretty fast, and we are not stopping now.
[SPEAKER_00]: So let's roll in another question from 80 to 99 chart.
[SPEAKER_01]: Good afternoon, and this is Jeff from Alabama.
[SPEAKER_01]: I have a question about the ATF Global E.
[SPEAKER_01]: LLP and Energy Infrastructure ETF.
[SPEAKER_01]: The symbol is LLPX.
[SPEAKER_01]: I would like to get your opinion on this.
[SPEAKER_01]: This is a ETF that lets you avoid a K1.
[SPEAKER_01]: So I have this in a couple of my portfolios and I just like to get your opinion on this.
[SPEAKER_01]: Thanks very much.
[SPEAKER_01]: I'll be listening on the podcast.
[SPEAKER_00]: MLPX is the global X MLP and energy infrastructure ETF.
[SPEAKER_00]: It's an exchange traded fund and it gives investors exposure to a basket of energy stocks primarily midstream energy infrastructure companies and MLPs.
[SPEAKER_00]: Now the reason why this is a bit different is because typically, when you invest in MLPs,
[SPEAKER_00]: This is a bit of a complex tax issue there.
[SPEAKER_00]: And so most investors don't want to do that, understandably.
[SPEAKER_00]: Now, this is a little bit different because what they do is they have structured MLPx in such a way that it is a regular ETF.
[SPEAKER_00]: It is a C-Corp, which keeps tax reporting simpler for most investors.
[SPEAKER_00]: Success ratio is about 45 basis points.
[SPEAKER_00]: So it's a bit on the expensive side, but again, you're paying for something here.
[SPEAKER_00]: You're paying for not having to deal with the tax consequences while still getting that investment.
[SPEAKER_00]: About 70% of this portfolio is in large caps 18.85% is in the midcap space.
[SPEAKER_00]: And for dividend investors, I mean, it's pretty appealing.
[SPEAKER_00]: It is, you know, I would say, it's a bit of a middle ground between higher yield and having to deal with those complex and LP funds.
[SPEAKER_00]: So if you're trying to get that exposure, honestly for 45 basis points, this is a solid way to go about it.
[SPEAKER_00]: Thanks for the call.
[SPEAKER_00]: President Trump has nominated Kevin Worsh to become the next chair of the Federal Reserve, setting up a pivotal leadership change at a moment when the central banks independence is under a bit of intense scrutiny.
[SPEAKER_00]: Trump framed the pick as a vote of confidence in Worsh's stature, his credibility, calling him a future great fed chair and signaling a desire for stability rather than confrontation.
[SPEAKER_00]: Worsh himself a former Fed governor during the 2008 financial crisis, and now he stands for academic, tied to Stanley Drunken Miller's family office, is widely respected on Wall Street.
[SPEAKER_00]: His nomination, in a way, eased a bit of market fears that the president would install a more overtly political ally with the dollar rising and gold falling sharply after the announcement.
[SPEAKER_00]: Investors interpreted the move as a bit of a sign that Warsch would resist aggressive pressure to slash rates, even as inflation remains elevated, and growth has been showing signs of cooling.
[SPEAKER_00]: Warsch will succeed, Jerome Pal in May, pending a Senate confirmation, and then one of the most contentious Fed's succession battles in a recent history.
[SPEAKER_00]: He's been pretty outspoken about the Fed's past mistakes, particularly its massive balance sheet expansion, and his
[SPEAKER_00]: He argues that the fetus stayed beyond the core mandate of price stability and maximum employment.
[SPEAKER_00]: Acting too often is a general purpose arm of the government.
[SPEAKER_00]: Now that stance kind of initially raises doubts about his fit with Trump's preference for lower rates.
[SPEAKER_00]: But concerns about alternative candidates ultimately strengthened Worsh's case.
[SPEAKER_00]: Influential figures like Jamie Diamond supported Worsh, while others warned that politicizing the Fed could undermine its inflation fighting credibility.
[SPEAKER_00]: If confirmed, Kevin Awards would inherit a deeply divided central bank, with officials split between prioritizing stubborn inflation and guarding against labor market weakness.
[SPEAKER_00]: His ability to potentially reform the Fed could hinge on political battle still ahead, including investigations surrounding Drill Pal, Senate resistance, and court decisions that may reshape the Fed's governance structure.
[SPEAKER_05]: Hello, this is David from San Jose.
[SPEAKER_05]: So I'm looking to get into Apple.
[SPEAKER_05]: I want to see what be a good price point to get into.
[SPEAKER_05]: I'll look forward to being answer on the podcast.
[SPEAKER_05]: Thank you.
[SPEAKER_00]: Apple incorporated ticker AAPL is one of the largest companies on planet Earth.
[SPEAKER_00]: They just announced earnings today and it up a bit higher up 46 basis points on the day.
[SPEAKER_00]: One of the reason being is very strong iPhone demand and better guidance moving forward.
[SPEAKER_00]: Now, this is not a small cap company.
[SPEAKER_00]: In fact, it is a 3.835.
[SPEAKER_00]: trillion dollar with a T market cap company that is just an absolute cash machine, 133 billion in free cash flow, what it's projected to have this year.
[SPEAKER_00]: They have 54.7 billion cash just sitting on their balance sheet.
[SPEAKER_00]: They tend to do a lot of acquisitions of smaller companies.
[SPEAKER_00]: They
[SPEAKER_00]: and that gave or will give Apple a bit more presence within the AI space, or not, sorry, not within the AI space, but within the, within various alternatives to how the audio space is what that was about.
[SPEAKER_00]: Sorry about that.
[SPEAKER_00]: And, you know, we do own Apple in one of our strategies for our clients because
[SPEAKER_00]: Again, it is a cash juggernaut.
[SPEAKER_00]: Now it's trading at a bit of an expensive valuation compared to where it's been 30 times price to Ford looking earnings, the average is 27.4 over the past five years, and I mean, it's price appreciation.
[SPEAKER_00]: Up 9.21% year to date, or sorry over the past 52 weeks, it certainly did lag its industry in the past couple years, but just bear 20, 24, underperforming the industry by 1.5, still outperform the S&P, underperformed, 20, 25 by 1.6, underperforming this year by 0.4%.
[SPEAKER_00]: And that's in spite of them having pretty much nothing to do with doing internalized AI development.
[SPEAKER_00]: They have not spent a bunch of money like these hyperscalers.
[SPEAKER_00]: Have they have partnered with ChadGPT?
[SPEAKER_00]: They are going to partner with Gemini as well moving forward.
[SPEAKER_00]: But the catch position they have and their ability to acquire what they think they need, bolstered by the recurring revenue from the fact that people just buy iPhones, whether or not they change them or not, really makes Apple a compelling company.
[SPEAKER_00]: And as a reason why we have it in one of our strategies.
[SPEAKER_00]: That is Apple Inc. Tigre A-A-P-L.
[SPEAKER_00]: No, we haven't tackled one yet.
[SPEAKER_00]: So we've been doing mostly voice mails and live calls today.
[SPEAKER_00]: So why don't we dip in to the invest talk, YouTube, comment section, question bank.
[SPEAKER_00]: This one that came in just today.
[SPEAKER_00]: And it's on ticker, DU, S, T. They pull this up on my screen over here.
[SPEAKER_00]: So your D-U-S-T, it says, today I put it nearly 15% of my portfolio in dust.
[SPEAKER_00]: I'm not selling my physical gold.
[SPEAKER_00]: If this was any other asset than gold going parabolic, you'd rent for 30 minutes about how overvalued it is, but with gold, your blinded gene is over.
[SPEAKER_00]: Game is over soon.
[SPEAKER_00]: Okay, well, this is the daily gold miners' index bear to extras.
[SPEAKER_00]: Well,
[SPEAKER_00]: It's a little bit different.
[SPEAKER_00]: Gold is a commodity, commodities tend to be a bit more volatile.
[SPEAKER_00]: The reason why gold is price is elevating is multiple reasons.
[SPEAKER_00]: We've seen wholesale debasement of the US dollar.
[SPEAKER_00]: We've seen massive inflation.
[SPEAKER_00]: We see central banks buying up a lot of gold in order to remove some of the power of financial regulation.
[SPEAKER_00]: Gold, physical gold is not any other asset.
[SPEAKER_00]: The reason why it goes parabolic is far more in tune to the macro picture than micro economics that tend to drive individual companies or other assets.
[SPEAKER_00]: 15% of your portfolio in any thing.
[SPEAKER_00]: is a bit risky, certainly, especially a bearish two times levered instrument such as this.
[SPEAKER_00]: And we always talk about levered instruments, not really for long-term holds, mostly for daily trading, because the long-term returns can vastly differ from the actual return of the asset class because, again, it's a vehicle for daily trading.
[SPEAKER_00]: But, certainly I wouldn't consider myself or anyone blinded about the reality that when something pumps as massively as gold does, there is going to be a pullback, and it's not going to go up forever.
[SPEAKER_00]: But, the dynamics that are driving at higher have not changed, and so remaining two bearish were too long, especially in the levert fund, could certainly come back to bite you.
[SPEAKER_00]: Good luck, thanks for watching.
[SPEAKER_00]: Well,
[SPEAKER_00]: We are through the month of January, and on the horizon, because it's been a while, I think Justin and I are going to do a new, invest talk, wealth, webinar, and any time this comes about, we start to think about, okay, what is of most interest towards the end of the year tends to be about taxes?
[SPEAKER_00]: during the large growth phase at AI in the amount of money it's being spent.
[SPEAKER_00]: Well, maybe we want to talk about how to attack it in a different way.
[SPEAKER_00]: And we try to show and bring an unbiased lens and provide you with different types of ways to think about things.
[SPEAKER_00]: But as always, this is for you.
[SPEAKER_00]: Just as invest talk is for you.
[SPEAKER_00]: And we ask for your finance investment questions.
[SPEAKER_00]: We would like to know what you would like to hear.
[SPEAKER_00]: What you would like to learn about on our next invest talk wealth webinar.
[SPEAKER_00]: And I think the best way for you to tell us that is to head over to our invest talk YouTube channel, find the most recent invest talk video, head over to that comment section where you usually can drop a question, any question that's on your mind while you're watching, and let us know in that comment section what do you want to hear?
[SPEAKER_00]: What do you want to learn about in the next invest talk wealth webinar?
[SPEAKER_00]: Without you, this show is nothing.
[SPEAKER_00]: And certainly, we don't know what is on your mind.
[SPEAKER_00]: So do me a favor, head over there, hit subscribe, head to those comments.
[SPEAKER_00]: Let us know what's on your mind.
[SPEAKER_00]: This is in Vestock, I'm Lou Guerrero.
[SPEAKER_00]: We have one goal here.
[SPEAKER_00]: The Met goal is to help you achieve your financial freedom.
[SPEAKER_00]: Our work continues after this break, our final break.
[SPEAKER_00]: So if you wanna, if you got that burning question, pick up that phone, dial that number,
[SPEAKER_04]: 888-99 chart the weekend is here or almost here but you've got finance and investment questions so step up and call in in Vestalk 888-99 chart.
[SPEAKER_09]: Yes, Mark and San Diego, wondering about the silver market, as you know, there was a 22% so-off on the silver market, as far as paper assets, ETFs and stuff.
[SPEAKER_09]: The big concern, of course, is if we have the paper silver back ETFs and stocks and stuff in the prices crashing down, if that ever looked like a risk of going under while the
[SPEAKER_09]: and it's being rationed, basically at the Costco and these other countries that are trying to load up up onto the consumer.
[SPEAKER_09]: If you guys are not asking about this, can that can truly be concerned about our consumer asset to be sober?
[SPEAKER_00]: Thanks, fellas, and on the show.
[SPEAKER_00]: So that's a great, great point that you're making here.
[SPEAKER_00]: And...
[SPEAKER_00]: The reality is that paper silver ETFs like SLV, they reflect financial trading and liquidity not actual physical metal demand or even inventory tightness.
[SPEAKER_00]: Physical silver premiums are rising due to limited dealer supply and strong retailer demand, and that creates a disconnect between paper spot pricing and what physical silver pricing is.
[SPEAKER_00]: And so silver ETFs may show smoother declining prices,
[SPEAKER_00]: since most ETFs can't redeem for metal.
[SPEAKER_00]: And then disconnect isn't new, but it signals growing stress in the physical market that may eventually impact broader price.
[SPEAKER_00]: But as I reasoned to panic, all it does is kind of highlight the limitations of relying solely on paper instruments in what is a tightening physical commodity market.
[SPEAKER_00]: Thanks to the call.
[SPEAKER_00]: U.S. producer prices jumped by about 50 basis points in December.
[SPEAKER_00]: The largest monthly increase in five months, signaling renewed inflation pressure heading in two early 2026.
[SPEAKER_00]: The upside surprise was driven almost entirely by services, not goods, reinforcing concerns that inflation is becoming more entrenched in the service economy.
[SPEAKER_00]: Trade services, which capture margins earned by wholesalers and retailers, search 1.7% and accounted for roughly 2-thirds of the overall increase.
[SPEAKER_00]: Hotel prices, motel prices, they sparked 7.3% airline fares, rose 2.9%.
[SPEAKER_00]: And portfolio management fees climbed 2%, highlighting broad pricing power in discretionary services.
[SPEAKER_00]: good prices, flat overall, with falling energy prices and food prices offsetting modest gains elsewhere, suggesting tariff impacts are showing up more in margins than stick your prices.
[SPEAKER_00]: Over the past year, producers prices are up 3% matching November's pace and marking a slower trend than 2024, but still well above the Fed's comfort zone.
[SPEAKER_00]: Federal Reserve officials see the data as an invalidating, validating their shift away from labor market concerns and back towards guarding against price stability.
[SPEAKER_00]: Dronepal reiterated that tear-fullated inflation should peak later this year, but uncertainty around pass-through.
[SPEAKER_00]: It still remains elevated as we start to digest what is happening.
[SPEAKER_00]: Components feeding into the Fed's preferred core PC inflation measure, point to a strong 40 basis point increase in December.
[SPEAKER_00]: Potentially keeping annual core PCE near the 3% level well above the Fed's 2% target.
[SPEAKER_00]: Market slowly reacted a bit cautiously.
[SPEAKER_00]: Stocks were a bit lower, treasury yields were a bit higher.
[SPEAKER_00]: The dollar stabilized after some earlier weakness.
[SPEAKER_00]: But businesses from this report, they appear to be passing through some tariff costs selectively, especially the service pricing rather than through manufacturer goods.
[SPEAKER_00]: While economists still expect inflation to cool later in 2026, the December PPI, it reinforces expectations.
[SPEAKER_00]: that the Fed, in spite of what, many in the White House, many on Wall Street, many at home would like to see.
[SPEAKER_00]: has to have a more keen focus on inflation and is likely, at least into the near future, to keep rates on hold for now.
[SPEAKER_00]: Well, that about does it for another week of invest talk.
[SPEAKER_00]: Justin and I, of course, thank you for listening and encourage you to tell your friends and family members about our free podcast downloads.
[SPEAKER_00]: As always, if you're looking for those downloads, you can get them at iTunes, you can get them at Spotify, wherever you listen to your podcasts, and while you're at it, if you want to check out something a bit new, something a bit different, head over to our YouTube channel that is in Vestock with two teas, to check out some of our YouTube exclusive content.
[SPEAKER_00]: I don't know if you've heard this, but one of the things that differentiates KPP from a lot of other competitors is we put our money where our mouth is.
[SPEAKER_00]: We practice something called parallel investing, where we invest in our strategies alongside our clients.
[SPEAKER_00]: We get the same pricing, we get the same percentages, we don't front run, we get exactly what our clients are getting.
[SPEAKER_00]: It helps to build trust, and in this business trust is critical.
[SPEAKER_00]: If that's interesting, that sounds interesting, head over to investsuck.com and schedule a free portfolio review.
[SPEAKER_00]: Independent thinking, shared success.
[SPEAKER_03]: This is invest talk.
[SPEAKER_03]: Enjoy your weekend.
[SPEAKER_03]: Invest talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.
[SPEAKER_03]: It's important for the listener to understand that not all comments made will apply to them.
[SPEAKER_03]: or shell statements on this program be considered an offer to buy or sell security.
[SPEAKER_03]: Because such advice is rendered solely on an individual basis, and at times will require that the investor review a perspective before investing.
[SPEAKER_03]: Invest talk is a copyrighted program of client, Pavles, and Peasley Financial, a registered investment advisor firm, which retains all rights.
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