[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_01]: Good afternoon fellow investors and welcome back to in Vestock.
[SPEAKER_01]: This is our Wednesday, March 11th, 2026 edition.
[SPEAKER_01]: And what another, while day markets, it, it is.
[SPEAKER_01]: I mean, we ended up flat, but certainly a lot of movement underneath the surface, especially in,
[SPEAKER_01]: And in the finance sector, you definitely have some sell-off and more problems with private credit and banks.
[SPEAKER_01]: And that certainly is a worrying sign.
[SPEAKER_01]: If you were a bull on this market, and there's economic data, which we'll get to here in a little bit, but so much to talk about during this hour, but most importantly, we'll be you and what's on your mind.
[SPEAKER_01]: Okay, this is what this show is dedicated to, help you coming a better investor.
[SPEAKER_01]: So that you aren't website by the headlines, you're focusing on the facts on the ground, you're making sober, non-emotional decisions, as opposed to what the default is as human beings, which is to use those emotions.
[SPEAKER_01]: Fear, greed, getting worked up based on
[SPEAKER_01]: And they matter, certainly do.
[SPEAKER_01]: But what matters more is risk and markets, the volatility within particular asset classes, your goals, and building out a strategy that makes sense for you, having an asset allocation target and working towards that over time.
[SPEAKER_01]: And adjusting it over time as well as the situation changes.
[SPEAKER_01]: So we're getting to give you the tools as we do this every day and ultimately our goal is to guide you towards better decisions consistently so that you can reach your financial goals.
[SPEAKER_01]: So that's this hour and then just to be able to talk about today's Mark performance and we'll run down the show topics, but as usual, we're going to tackle this first color question now.
[SPEAKER_08]: I guess I'm just wondering what you guys thought of Rochester's communication,
[SPEAKER_08]: Let's call him to see what you guys saw on it.
[SPEAKER_08]: I was thinking about taking some out.
[SPEAKER_08]: Appreciate it.
[SPEAKER_01]: Looking at Rogers communications.
[SPEAKER_01]: This is one of the largest telecom names in Canada about $21 billion market cap last quarter revenue grew 13% earnings grew 3%.
[SPEAKER_01]: Earnings this year, though, this will be down 29% of them back up 4%.
[SPEAKER_01]: Next year, it has been an a pretty protracted downtrend since the high in 2022.
[SPEAKER_01]: But it's starting to rally.
[SPEAKER_01]: So it fell from a little over $60 per share back then.
[SPEAKER_01]: All the way to a recent low at $23.18.
[SPEAKER_01]: That's the 52 week low.
[SPEAKER_01]: That was the liberation day lows.
[SPEAKER_01]: And now we're up into some pretty major resistance.
[SPEAKER_01]: And I think that is my biggest worry is this is where
[SPEAKER_01]: it broke down on a on a weekly chart and and it's right at the 200 day sorry 200 week moving average which the last few times it's been there it failed to really break out.
[SPEAKER_01]: So that worries me a little bit.
[SPEAKER_01]: Let me take a look at the balance sheet because all telecom names they tend to have
[SPEAKER_01]: balance sheet issues, they have a lot of debt in their balance sheet and this is no different.
[SPEAKER_01]: They have about $29 billion in long term debt that has come down from this 2023 higher on 35 billion so they're able to use a lot of that cash flow about one and a half billion in free cash flow and that is also going to a new all-time high recently.
[SPEAKER_01]: That's
[SPEAKER_01]: 15% the cash to the repair ratio is 42% which obviously not isn't quite as good but still pretty healthy so I think they can maintain that I would like to dig into their their maturity schedule on their debt I would imagine it's been termed out as long as it's been termed out I feel pretty comfortable with this name even though I would probably wait for a sell off weight a bit for a bit of volatility because it is into some resistance and I want to see if this really
[SPEAKER_01]: consistent and I'm thinking this is going to go through probably more of a consolidation period and until then I would probably wait a little bit longer to be honest with you.
[SPEAKER_01]: It doesn't get me excited but I also don't hate the name either because I do like the cash flow and the Canadian economy is
[SPEAKER_01]: My most likely going to do pretty well in the medium term with oil prices where they are with raw with the value of raw materials, which can't can it is very rich in, that's going to help their economy.
[SPEAKER_01]: They're a petro state in many ways, and not your typical petro state, like a Saudi Arabia, but
[SPEAKER_01]: their economy is very reliant on oil gas prices and they're doing some good things to I think expand that building out pipelines to the west coast to export to Canada for example and I think that's going to pay off in spades over the long term.
[SPEAKER_01]: So I like this name overall but I would be I would be in a rush to get in and say that.
[SPEAKER_01]: I hope you've heard about us talking about, hope you've heard us talking about our third annual invest talk market madness contest.
[SPEAKER_01]: Instead of basketball brackets, we will be matching companies for watching companies, perform head-to-head in an epic showdown of best stock participants can compete for a thousand dollar grand prize and demonstrate their market prowess by locking in their stock victory predictions.
[SPEAKER_01]: And if this, if you, the contest winner is also a subscriber to the best talk YouTube channel, we'll bump that prize at the $1,500.
[SPEAKER_01]: So we're ready to test your skills, or if you're ready to test your skills in this new challenge, head over to invest.com and submit your bracket predictions today.
[SPEAKER_01]: The clock is ticking.
[SPEAKER_01]: We have now about one week, one week from today, 11.59.
[SPEAKER_01]: Eastern time will be when this contest closes, so make sure you get your brackets in.
[SPEAKER_01]: Now we've a lot of ground to cover over the next 45 minutes or so in time for many, we get to all of it our main focus point.
[SPEAKER_01]: Concerns this story, central bank pivot, how geopolitical chaos is rewriting monetary policy.
[SPEAKER_01]: Central ranks across Asia and globally are being forced into sharp policy re-thinks as the Middle East conflict drives oil prices higher
[SPEAKER_01]: Now the G7 is discussing emergency.
[SPEAKER_01]: Oil reserve releases while policy makers scrambled to balance growth concerns with ring price pressure.
[SPEAKER_01]: So we're going to dig into that story a little bit more power essential banks around the world thinking about this crisis.
[SPEAKER_01]: In addition, we have other topics on the docket.
[SPEAKER_01]: One is, would we be in a recession if it wasn't for the ultra wealthy?
[SPEAKER_01]: We'll take a look at that story.
[SPEAKER_01]: And, stagflation, that's the name, that's the term everybody's scared of.
[SPEAKER_01]: Are we heading towards stagflation?
[SPEAKER_01]: Well, recent data, kind of says that.
[SPEAKER_01]: And in addition, you are likely seeing an exacerbation.
[SPEAKER_01]: Yeah, I guess, what's happening in the Middle East is exacerbating this issue.
[SPEAKER_01]: That's probably a better way to say.
[SPEAKER_01]: So we'll dig into that story.
[SPEAKER_01]: We also have Boyspane calls on trailing.
[SPEAKER_01]: Stop losses as well as Ember Air, EMBJ, and then we have questions that came in via the V Invest Talk YouTube channel.
[SPEAKER_01]: As well, and of course, most importantly, will be your live calls at 80, 90, 90 chart.
[SPEAKER_01]: So we're ready to take a quick break, but please remember you can call any time and leave your question on the Abestock.
[SPEAKER_01]: Voice bank, and if you're listening via our live stream, or possibly an AM1220 in the Bay Area, you can call right now at 8.999 charting up next, and we'll comment on today's market activity.
[SPEAKER_03]: KPP Financial is excited to announce the third annual in Vestock Market Madness Contest.
[SPEAKER_03]: Instead of basketball brackets, Justin and Luke will be watching companies perform head-to-head in an epic showdown.
[SPEAKER_03]: In Vestock participants can compete for the $1,000 grand prize.
[SPEAKER_03]: and demonstrate their market prowess by locking in their stock victory predictions.
[SPEAKER_03]: And yet this, if the contest winner is also following the Investog YouTube channel, Justin will bump up the prize to $1,500.
[SPEAKER_03]: So if you are ready to test your skills in this unique competition, do not wait.
[SPEAKER_03]: It's free to join the fund.
[SPEAKER_03]: Visit Investog.com and search market madness.
[SPEAKER_03]: Then submit your bracket predictions to enter.
[SPEAKER_03]: Get it done before the deadline March 18th at 11.59 pm.
[SPEAKER_03]: 24.7 Rainer Shine.
[SPEAKER_03]: There's always value in the Invest Talk podcast.
[SPEAKER_03]: 8.88 99 chart.
[SPEAKER_01]: Let's go check in on the market today.
[SPEAKER_01]: Overall, if you look at
[SPEAKER_01]: Oh, we're taking a call, never mind.
[SPEAKER_01]: We're taking a live call.
[SPEAKER_01]: Let's go to John and St. Louis looking at WSO or CNM.
[SPEAKER_09]: And I was always, I was not always right.
[SPEAKER_09]: Been interested in corn, Maine for a little while now.
[SPEAKER_09]: I've heard you guys talk about them on the show with other colors.
[SPEAKER_09]: And, well, I was just doing a little research on the chat CPT and they also make through in another company that I might be interested in given the distribution and nature, possibly a little more stable in that it, um,
[SPEAKER_09]: in their field, and that would be watch, so ticker symbol WSO.
[SPEAKER_09]: I was just curious what you thought of these stocks.
[SPEAKER_09]: If you were to pick one or over the other, I noticed that watch go to photo separately on in price.
[SPEAKER_09]: I'm just wondering what you thought about them, and if you liked them, where you pick them up at,
[SPEAKER_01]: I look at core and main in Watsuko, core main was, I believe, the darling from last year's market madness had a nice run.
[SPEAKER_01]: Leave us the winner and can't remember exactly, but I know it was in the final four.
[SPEAKER_01]: Uh, no.
[SPEAKER_01]: Watsko, it just should be air conditioning, heating, refrigeration equipment and related parts.
[SPEAKER_01]: So certainly their business is improving from what's going on around data center, cooling, or at least it should be, even though actually now that I look at it now, it's actually turn negative.
[SPEAKER_01]: That's why the chart is in a downtrend.
[SPEAKER_01]: This peaked back in,
[SPEAKER_01]: late 2024, and it's been an downtrend ever since.
[SPEAKER_01]: So it's not really getting that tail in from the data center build out.
[SPEAKER_01]: So that worries me a bit.
[SPEAKER_01]: Now core and main, they distribute their distributor, focused on water, wastewater, storm drainage, fire protection products, and related services.
[SPEAKER_01]: So really about infrastructure, form municipalities, private water
[SPEAKER_01]: I, on the surface, I would say I like corn main more just because it's not sitting in a part of the market where it should be thriving and it's not, you know.
[SPEAKER_01]: So that's what drives me to corn main a little bit more.
[SPEAKER_01]: Let me look at the earnings here.
[SPEAKER_01]: Yeah, I mean, earnings are still positive.
[SPEAKER_01]: It's trading out of mid 20s multiple or low 20s multiple, which for last quarter, revenue group 1%, earnings group 4%, growth is certainly slowed from a year ago or so.
[SPEAKER_01]: And it peaked back in September of last year.
[SPEAKER_01]: At's, well, the 52 week high, $67, now at $40, $49, so down about 27% but also in a downtrend.
[SPEAKER_01]: So I would say neither of these names, if I'm being honest with you, I, the, the momentum is down, they're not super cheap.
[SPEAKER_01]: Yeah, I mean, I think there's far better names out there, far better opportunities in the market than these two, and I would just be passing on both of them.
[SPEAKER_09]: Great, oh, thank you for watching.
[SPEAKER_09]: I appreciate everything you do.
[SPEAKER_01]: No problem, thanks for the call.
[SPEAKER_01]: Those dig in to the market.
[SPEAKER_01]: It was another kind of flat day.
[SPEAKER_01]: NASDAQ up a little bit, literally NASDAQ of eight basis points, S&P down eight basis points.
[SPEAKER_01]: So definitely a lot of choppiness.
[SPEAKER_01]: There was green out of the energy patch, as you would expect, with shove on up 3% x on up a little over 2.
[SPEAKER_01]: You have some cell-offs in the finance space, if you send mastercard down, decently, and then some banks, anything private equity related, we're down.
[SPEAKER_01]: Tech overall was kind of a mixed bag.
[SPEAKER_01]: You did have some weakness that of Netflix and Adobe and Apple oven, and then you had some games that have names like Intel and Micron and Sandisk.
[SPEAKER_01]: So but a lot of things were flat Apple was really down one basis point.
[SPEAKER_01]: So flat there met up 12 basis points.
[SPEAKER_01]: So flat there, Microsoft down.
[SPEAKER_01]: less than a quarter of a percent so kind of flat there.
[SPEAKER_01]: So that was the market today.
[SPEAKER_01]: I think still a lot of uncertainty around what's going to happen in the Middle East and will start to flow once again in the next week or so.
[SPEAKER_01]: And I think if that's the case, then
[SPEAKER_01]: We can avoid chaos if it's continues to drag out for many weeks.
[SPEAKER_01]: That's going to be a bigger issue.
[SPEAKER_01]: Now, we did have CPI data today.
[SPEAKER_01]: It's, you could talk about it, but really, there's not a whole lot to talk about because this is old data, especially with oil prices, and that's going to feed into the CPI in the future months.
[SPEAKER_01]: And then you did have the International Energy Agency, 32 members, they agreed to release 400 million barrels from emergency reserves that's also kind of keeping things kind of tight over the or or or contains, shall we say, within the oil market in the short term.
[SPEAKER_01]: But that doesn't solve the medium-term issue.
[SPEAKER_01]: Once again, this gets dragged out for many weeks.
[SPEAKER_01]: That 400 million barrels probably won't do a whole lot.
[SPEAKER_01]: So that's where we're at on that crisis.
[SPEAKER_01]: And we'll see how the market reacts tomorrow.
[SPEAKER_01]: Now we're heading to a break.
[SPEAKER_01]: We're taking for helping us achieve more than 62 million downloads.
[SPEAKER_01]: We'd love to hear your calls right now.
[SPEAKER_01]: 80-89 chart.
[SPEAKER_03]: In the early days, in Vestock was Jerry Klein and Steve Peasley.
[SPEAKER_03]: Now the torch has been passed, and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.
[SPEAKER_03]: So when you've got finance and investment questions, don't forget to call in Vestock, 888-99-Chart.
[SPEAKER_07]: Hi, it's Justin or Luke.
[SPEAKER_07]: This is Dan from Wanna Creek.
[SPEAKER_07]: I have a question about Embraer, Stucksmall E, MBJ.
[SPEAKER_07]: They've been coming down a little bit in price lately and I see that they're, I guess they're forecast for their revenue is dropping quite a bit from 2025 to 2026 and then I also see that they're, well their forward PE is not too bad
[SPEAKER_07]: I have it as 133 now and it's forward piece will be 23.
[SPEAKER_07]: So I was wondering what your thoughts are on this talk.
[SPEAKER_07]: I have a few shares and it's a drop and I don't know if I should sell it or hang on to it.
[SPEAKER_07]: Thanks very much for your help.
[SPEAKER_07]: Appreciate it.
[SPEAKER_01]: Looking at Embraer out of Brazil, name manufacturer, aircrafts for commercial and executive aviation,
[SPEAKER_01]: They also have some defense and security applications as well.
[SPEAKER_01]: So this is actually a name that we own for clients and have owned for some time.
[SPEAKER_01]: Now it has pulled back from its higher on $80 in late January, now it's at 65.
[SPEAKER_01]: But came back down to the 20-day moving average.
[SPEAKER_01]: It's bounced off that nicely reacting quite well, still in a longer term uptrend.
[SPEAKER_01]: We're not seeing a major shift in earnings expectations.
[SPEAKER_01]: In fact, earnings expectations for this year, next year continue to go up.
[SPEAKER_01]: And the expectation is for a $3.68 sentence earnings next year.
[SPEAKER_01]: Next year.
[SPEAKER_01]: Which puts a forward P down around 18.
[SPEAKER_01]: Which to us is fine.
[SPEAKER_01]: We like Brazil assets.
[SPEAKER_01]: We like owning Brazil in many forms.
[SPEAKER_01]: But this is one of the more in-demand companies in Brazil over the long term, and especially over the last few years, because Boeing has squandered its lead in aviation.
[SPEAKER_01]: And you have airbus, and this is the only South America.
[SPEAKER_01]: South American exposure, you can get from the aviation world
[SPEAKER_01]: Modest dividend, about a third of one percent, free cash flow around 300 million, return equity right around 10%, which is good, but not amazing.
[SPEAKER_01]: But once again, if earnings continue to ramp up, because last year, they only made a dollar 38.
[SPEAKER_01]: So it's nearly a triple in earnings in just two years.
[SPEAKER_01]: So despite the recent pullback, I still think it's a good name, goodbye, we own it.
[SPEAKER_04]: Yeah, I'd even free month just wanted to see if you had a suggestion on what to buy in the way of a silver or precious metals ETF or something that pays dividends while the price seems to be continuing to go up.
[SPEAKER_01]: Thanks.
[SPEAKER_01]: Well, we can't give you a recommendation.
[SPEAKER_01]: That's the case for any call.
[SPEAKER_01]: I've said this multiple times.
[SPEAKER_01]: We can answer questions about a specific fund of specific company, but we can't answer it.
[SPEAKER_01]: We can't say, hey, you should go buy x y and z.
[SPEAKER_01]: We can give our opinion on different names on their ask that's how it works.
[SPEAKER_01]: while collecting a dividend, then you probably want to own the miners.
[SPEAKER_01]: And there's big funds out there, a GDX, GDX, J, with the junior miners.
[SPEAKER_01]: Those are examples, I'm not saying, once again, to go buy those, but those are examples, and they do pay some sort of a dividend.
[SPEAKER_01]: For example, GDX, the dividend is chilling 12 months to about a half percent, not high.
[SPEAKER_01]: But this is something everyone needs to get out of their head
[SPEAKER_01]: Golden Silver, you're not buying it for the income.
[SPEAKER_01]: And to be frank, most investments, you shouldn't be focused on the income.
[SPEAKER_01]: You should be focusing on the value of your paying, the profitability of the business.
[SPEAKER_01]: And the good thing right now is these miners are very profitable.
[SPEAKER_01]: And what are they doing with those profits?
[SPEAKER_01]: Some of them are raising their dividends, some are buying back shares,
[SPEAKER_01]: And we like all of that, but we own them not for the income.
[SPEAKER_01]: And that's how we get exposure to precious metals for our clients is typically owning the miners, finding the best miners that are out there, creating portfolios with the large sampling of those type of names.
[SPEAKER_01]: So I know it's tempting to try to capture both upside-up precious metals while also collecting the dividend.
[SPEAKER_01]: And that's fine, but don't expect the high dividend from this space.
[SPEAKER_01]: You click some, like I said, about half percent from the GDX, but don't think that you're owning this for a high dividend.
[SPEAKER_01]: That's not what it's for.
[SPEAKER_01]: It's for a hedge against monetary debasement.
[SPEAKER_01]: it's hedge against geopolitical uncertainty, and we're getting both of those in spades, and that's why prices continue to go up.
[SPEAKER_01]: Now the next and best talk we're looking to this story.
[SPEAKER_01]: Emerging Market Excess, when global tensions trigger capital flight, it means stocks have dropped to almost a one year low while other emerging markets face similar pressures as Middle East conflicts send investors fleeing to developed.
[SPEAKER_01]: market safety.
[SPEAKER_01]: This capital flight pattern is creating both significant risk for EM heavy portfolios and potentially potentially buying opportunities for potential investors.
[SPEAKER_01]: That's tomorrow but for now I'm ready to take your calls at 8.89 in chart.
[SPEAKER_03]: There are a few things that make KPP financial special.
[SPEAKER_03]: One of them is parallel investing.
[SPEAKER_03]: This means they invest right alongside their clients.
[SPEAKER_03]: Here's how it works.
[SPEAKER_03]: When KPP financial makes a trade for their clients, just in line makes the same trade for himself and KPP.
[SPEAKER_03]: On the same day, at the same price and same percentage.
[SPEAKER_03]: No front running, no special treatment.
[SPEAKER_03]: Learn more about Parallel Investing at Investalk.com.
[SPEAKER_01]: Main focus point today is about the central bank pivot and how this geopolitical chaos could rewrite monetary policy for the balance of 2026 and maybe even beyond.
[SPEAKER_01]: So let's start off with Europe because it's pretty clear that it's the European economies that will be impacted by the spike in low prices more than us here in America.
[SPEAKER_01]: and we'll get to us get to America here in a little bit, but recently three ECB policy makers warned Thursday that Euro's uninflation would likely rise and right now it's sitting right around the ECB's 2% target, which just happens to also be their policy rate.
[SPEAKER_01]: And so if that starts to creep up, it put pressure on them to also match that increase in inflation with the increase in the rates.
[SPEAKER_01]: And that would push up rates globally.
[SPEAKER_01]: Now, this heart comes back to the Russian Ukraine invasion in 2022.
[SPEAKER_01]: Initially, the ECB kind of wrote it off, flashed in the pan, and kind of stayed on pause.
[SPEAKER_01]: until the impact was felt, months later, and you saw inflation rise, and they had to raise rates pretty aggressively.
[SPEAKER_01]: So that is kind of in the back of their mind, and I would imagine, this is their calculus now.
[SPEAKER_01]: How long will this last?
[SPEAKER_01]: what will the choke points continue to be?
[SPEAKER_01]: I just saw a news event that another tanker in the bin, the straight-to-home removes, was blown up.
[SPEAKER_01]: And so it's pretty clear that Iran is in control of that region, at least the straight-to-home removes.
[SPEAKER_01]: And so oil probably get to China, but besides that, it's shut off.
[SPEAKER_01]: They are going to struggle, especially the industrial parts of the economy.
[SPEAKER_01]: You already saw in 2022 when Germany could no longer endpoint cheap import cheap Russian gas, what that did to their industry.
[SPEAKER_01]: And this is going to have a similar effect, most likely, but more broadly across the region.
[SPEAKER_01]: for meetings later in the year.
[SPEAKER_01]: Now, there is supposed to be a meeting in about one week.
[SPEAKER_01]: That's our next policy decision.
[SPEAKER_01]: And no change is expected.
[SPEAKER_01]: So I think that'll still be the case.
[SPEAKER_01]: And probably the case for the Fed here in the US.
[SPEAKER_01]: So let's talk about the United States economy and how this feeds into Fed policy.
[SPEAKER_01]: Already we're dealing with trade disruptions
[SPEAKER_01]: immigration shocks and just a chaos over the past one year and now we're dealing with an energy shock but we're buffered from it more than most because we are energy independent.
[SPEAKER_01]: Sheel started to boom in around 2012 and we've been an energy independent for a number of years now.
[SPEAKER_01]: So the global impact on trade is going to impact us more than actually the increase in price.
[SPEAKER_01]: Yes, that hurts at the gas pump.
[SPEAKER_01]: I just filled up today.
[SPEAKER_01]: During California, I'd put in premium, those over $6 a gallon.
[SPEAKER_01]: So that's going to hurt, especially low income consumers.
[SPEAKER_01]: But for the majority of the economy, it's going to be the supply chain problems.
[SPEAKER_01]: And potential increases in food costs.
[SPEAKER_01]: maybe manufacturing of semiconductors, and all of the feedstock that goes into that.
[SPEAKER_01]: The ability to refine copper, for example, that can go into data centers.
[SPEAKER_01]: All of this could undermine what was expected to be a fairly growthy year.
[SPEAKER_01]: Going into the show, that's what most economists had expected is to be a pretty solid year for economic growth.
[SPEAKER_01]: That is now being called in the question.
[SPEAKER_01]: because the impacts on what we're shipping and broader commodity prices.
[SPEAKER_01]: They're looking back to what we did in 2022 or the Fed did in 2022.
[SPEAKER_01]: Their initial reaction to their Russian invasion of Ukraine was pretty devish.
[SPEAKER_01]: They actually stopped their expected interest rate hikes in the spring of that year.
[SPEAKER_01]: But quickly, they saw the impact of higher oil prices, sharp rise in inflation, and rate hikes obviously accelerated.
[SPEAKER_01]: That's where we got that big rise in interest rates.
[SPEAKER_01]: So you can see something similar happened here.
[SPEAKER_01]: Now, the market isn't.
[SPEAKER_01]: Has it moved their expectations dramatically?
[SPEAKER_01]: There's still a slight tilt towards two rate cuts this year with the first move happening in July.
[SPEAKER_01]: as a Monday, and even into today, because the concern, once again, is inflation.
[SPEAKER_01]: And this is really being played out in the dollar, it's dollar had been very weak, and it's getting a bit of strength now, as markets are expecting, hey, maybe this dovish fed pivot will not come to fruition.
[SPEAKER_01]: And then the worry is what do they do?
[SPEAKER_01]: Let's say inflation does re-accelerate, which is already getting having signs of happening
[SPEAKER_01]: Do they just simply keep it as it is in pause?
[SPEAKER_01]: They did that before.
[SPEAKER_01]: That was a bad move.
[SPEAKER_01]: And they eventually had a raise rates to fight inflation.
[SPEAKER_01]: To me, that's the most likely outcome because I think the market is underestimating the length of this war, the length of the conflicts in the Middle East.
[SPEAKER_01]: I think it's going to drag out for months.
[SPEAKER_01]: And the tail risks have certainly increased.
[SPEAKER_01]: And that ultimately should mean, frankly, lower equity multiples, more volatility in the short-term.
[SPEAKER_01]: And ultimately, this looks to be more like a quagmire for this administration that will likely drag out for some time.
[SPEAKER_01]: Now, that's going back to the investment I've always been for a question that came in earlier on 80, 99 chart.
[SPEAKER_05]: The most important thing about ticker PBR, it's a Brazilian oil and gas-innovated energy company.
[SPEAKER_05]: I know you guys like Brazil, but I don't know if you like energy companies, but then Brazil.
[SPEAKER_05]: The numbers actually look kind of good to me, and start the evaluation.
[SPEAKER_05]: Those look like it's not too expensive.
[SPEAKER_05]: However, I don't know if just most companies in Brazil are like that.
[SPEAKER_05]: Also, the dividend is a little high as some of those skeptical, but the payout seems to be okay.
[SPEAKER_05]: So I'll just curious if you could take a look at this, take a look at the chart, and let me know your thoughts.
[SPEAKER_05]: I do all another energy companies, you know, that's at the full Exxon Devon Chevron.
[SPEAKER_05]: It's like that, just wondering if I can sell some of those, and I guess for the diversified, outside, and into Brazil, appreciate any thoughts.
[SPEAKER_05]: Okay.
[SPEAKER_01]: Looking at Petro Brass, and this has moved pretty nicely,
[SPEAKER_01]: We're in $11, as of late, and now it's probably up to $19 in just a handful of weeks.
[SPEAKER_01]: And this is obviously because of what's going on in the least.
[SPEAKER_01]: And Petro Bross is the largest oil name in Brazil.
[SPEAKER_01]: Revenue's last quarter of 19% earnings are up to 200%.
[SPEAKER_01]: earnings expectations are up to 270 next year, and it's about a $19 dollar stock.
[SPEAKER_01]: Yeah, it looks cheap.
[SPEAKER_01]: Now, historically, it trades cheap.
[SPEAKER_01]: It trades at single digit multiples.
[SPEAKER_01]: Why?
[SPEAKER_01]: Because there aren't political risks within Brazil.
[SPEAKER_01]: But actually, I actually started picking this up.
[SPEAKER_01]: Number of months ago, and my personal account.
[SPEAKER_01]: So I'm up about 36% on it so far.
[SPEAKER_01]: I like it.
[SPEAKER_01]: I've been trying to add Brazilian equities of some kind.
[SPEAKER_01]: And this is the largest $123 billion market cap.
[SPEAKER_01]: Pretty decent balance sheet, return equity that was 27%, free cash flow about 15 billion.
[SPEAKER_01]: And it pays about a four and a half percent yield even after this run.
[SPEAKER_01]: So is it a bit overdone in the short term?
[SPEAKER_01]: Probably, but this is really a play on the protracted nature of this war.
[SPEAKER_01]: If you think it's going to drag out, then you want to be buying this on dips.
[SPEAKER_01]: So I like it.
[SPEAKER_01]: Let's go with the YouTube comment question.
[SPEAKER_01]: Navine says, great show, very informative.
[SPEAKER_01]: Could you please share your thoughts on Auto Desk, A, D, S, K?
[SPEAKER_01]: A quick follow up when you say free portfolio review, how does that work?
[SPEAKER_01]: Would like to know the steps for free portfolio review.
[SPEAKER_01]: Yeah, just align to that real quick.
[SPEAKER_01]: Very easy, go to our website, besttalk.com.
[SPEAKER_01]: click on portfolio review, fill that out.
[SPEAKER_01]: You can upload your latest statement.
[SPEAKER_01]: We will that goes directly into our backend, backend of our website, securely, if you have spot.
[SPEAKER_01]: And then we will run the analysis on that.
[SPEAKER_01]: And we usually go over those,
[SPEAKER_01]: Physicians, they overall portfolio.
[SPEAKER_01]: We can see our U overweight growth, their value, foreign domestic, large, small, what is your risk of the portfolio?
[SPEAKER_01]: Is that aligned with your risk tolerance levels?
[SPEAKER_01]: We focus on that and then we look at your long-term goals or are they aligned with your long-term goals, et cetera.
[SPEAKER_01]: So those are things that we discuss on the portfolio reviews.
[UNKNOWN]: Yeah.
[SPEAKER_01]: Now, as for Autodesk, this is one of those names in the software patch that has been fairly weak.
[SPEAKER_01]: It's 52 week high.
[SPEAKER_01]: It's $329, and it's 52 week low is $215, both of those were reached over the past six months.
[SPEAKER_01]: So you can see how volatile it has been.
[SPEAKER_01]: And now it's at 251, so it's still down about 23% from this 52 week high.
[SPEAKER_01]: And what they do is they make computer-aided design software.
[SPEAKER_01]: historically it's been an extremely good business.
[SPEAKER_01]: The worry though is like all software names that AI will somehow you serve their dominance within this space.
[SPEAKER_01]: Now most architects and design engineers they are well-versed in Autodesk.
[SPEAKER_01]: Most of them learn it in in school and in college and they bring it to the real world because they know
[SPEAKER_01]: And that's why their business has been so incredibly strong, sticky or turned equity on 40% free cash flow, run $2.4 billion, and that is near and all time high on a $53 billion mark.
[SPEAKER_01]: Yeah, so about a 5% free cash flow yield.
[SPEAKER_01]: That was not cheap, but it's a fantastic business.
[SPEAKER_01]: And you have to assume this is what you're trying to do.
[SPEAKER_01]: You're assuming that.
[SPEAKER_01]: AI is not going to be able to do what they do.
[SPEAKER_01]: A combining the creativity of an architect or an engineer with technology, that is a fine balance.
[SPEAKER_01]: And I don't think that's going to be disrupted in the short term.
[SPEAKER_01]: Long term, however, the bigger issue is that it's going to become
[SPEAKER_01]: because of the ability for ad to cope.
[SPEAKER_01]: And so it could bring more competition to their business, shrink there overall, sticking this to their business, profitability of their consumers and their customers, and that's the long term question.
[SPEAKER_01]: In the short term, I don't mind it.
[SPEAKER_01]: I think the software space is going to get a bounce.
[SPEAKER_01]: This would be in, I think, the upper tier of the names that I would believe could defend their mode in the world of AI.
[SPEAKER_01]: But it's not what's out of its risks.
[SPEAKER_01]: And you have to be certainly cognizant of that.
[SPEAKER_01]: So I like it.
[SPEAKER_01]: But,
[SPEAKER_01]: You have to be, you have to monitor, this is the evidence, all of the software names.
[SPEAKER_01]: You have to monitor that market to see if AI truly is upending their segment of the software space.
[SPEAKER_01]: Let's go answer another boy's mail question now.
[SPEAKER_06]: The agent from Texas, I wanted to diversify my portfolio and enter a defense play.
[SPEAKER_06]: I don't want to share thoughts on ticker symbol and OC Northrop Ruman.
[SPEAKER_06]: So I want to share thoughts on if this was a good place to look at or if I should maybe go elsewhere.
[SPEAKER_01]: Thanks.
[SPEAKER_01]: Looking at Northrop Grumman and you would imagine that this is going up in the midst of a war.
[SPEAKER_01]: It's pulled back recently.
[SPEAKER_01]: So that's kind of interesting, but not dramatically.
[SPEAKER_01]: It's still near 52 weeks high.
[SPEAKER_01]: Estimates for earnings continue to come down though for this year next year.
[SPEAKER_01]: That worries me.
[SPEAKER_01]: and it's training about 31 multiple.
[SPEAKER_01]: I would say you missed it to a degree, but it would be a name if you don't have any defense exposure.
[SPEAKER_01]: This would be probably a name you wanna or one of the names you wanna out.
[SPEAKER_01]: So I probably would buy it on a pullback, especially if they do think that this war will be protracted.
[SPEAKER_01]: But Gia politics right now are just so all over the place.
[SPEAKER_01]: And that makes the risk in these names so much more dramatic, but I do think you should have exposure in this this all day.
[SPEAKER_01]: This is Invest.com, Justin Klein.
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[SPEAKER_01]: Help you achieve your own version of Phantom Freedom.
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[SPEAKER_01]: Let's go talk about our favorite word, the scariest word in finance, and that is stagplation.
[SPEAKER_01]: And we had the U.S. employment data on Friday,
[SPEAKER_01]: that was week, we lost 92,000 jobs in February, unemployment rate climbs, and we've had no job creation since May.
[SPEAKER_01]: That is by definition a week labor market, and 2025 says that.
[SPEAKER_01]: have the lowest level of job creation in one of the two decades, outside of a recession.
[SPEAKER_01]: And then on the inflation front, you had Core PPI, remember producer price index, that is far more consequential than CPI.
[SPEAKER_01]: If you go look at the data, it usually leads about two to three months.
[SPEAKER_01]: And in February, it was up 3.6 percent well above the forecast.
[SPEAKER_01]: That's before the oil price shock.
[SPEAKER_01]: And the PCE index, that was at 2.9 in December.
[SPEAKER_01]: highest level since March of 2024.
[SPEAKER_01]: So inflation was here before and will accelerate due to this crisis.
[SPEAKER_01]: But the market is in many ways whistling past the graveyard.
[SPEAKER_01]: Now, this reminds me a lot of pre-COVID.
[SPEAKER_01]: I'm where I was talking about COVID and it's impact before the real shake out and we're really landed here in the US because it's my job to see what's going on in the world.
[SPEAKER_01]: I have to follow it.
[SPEAKER_01]: It's top of the day, it's frankly, it's a hard thing to follow the world in these times.
[SPEAKER_01]: I have to be locked in, sometimes you want to ignore it, but I can't, it's my job.
[SPEAKER_01]: So I see this, and then in America, and then it obviously we had block downs and you know happen from there.
[SPEAKER_01]: Now, a big part of this is the structural nature of our markets.
[SPEAKER_01]: Our markets are so big, there's so many factions, there's so much option activity that in many ways,
[SPEAKER_01]: Markets are designed not to have big volatility because in volatility comes in, you have players that sell that volatility and that naturally brings volatility back in, et cetera.
[SPEAKER_01]: So it's a reinforcing loop, it's reflexive in that way.
[SPEAKER_01]: But when that volatility does break out, that's where you get kind of those waterfall type of markets.
[SPEAKER_01]: And I'm increasingly feeling like we're headed towards
[SPEAKER_01]: The market is looking at what's going on in the middle at least is just a temporary setback, a little flesh wound.
[SPEAKER_01]: But when you add it on top of really stagflationary data that we're already seeing in 2026, it creates mounting pressure on the stabilizers of the market.
[SPEAKER_01]: Now I'm not saying the market is going to crash 50% or anything like that, but could you see a bush down of 5, 7, 10% maybe?
[SPEAKER_01]: In a short order, would not shock me to see something like that.
[SPEAKER_01]: Now in markets, these issues, once again, can be paid for over, but in the real world, these problems compound.
[SPEAKER_01]: Businesses may overlook one problem.
[SPEAKER_01]: Maybe even two problems.
[SPEAKER_01]: When they start stacking up and you see three, four major concerns on their horizon, or currently in today's economy,
[SPEAKER_01]: You throw your hands up and you pause.
[SPEAKER_01]: A lot of businesses have already done that, but that is certainly building.
[SPEAKER_01]: And so that is the issue with Stagflation, not only do central banks pause and stagnate because they don't know what to do, do you fight inflation, do you try to stoke?
[SPEAKER_01]: Growth, what do you do?
[SPEAKER_01]: But business is the same thing.
[SPEAKER_01]: and economic activity, slows, bank stop lending.
[SPEAKER_01]: That is where you get bigger issues.
[SPEAKER_01]: So the more this disruption draws out, the more it is compounding the problems that the economy already has.
[SPEAKER_01]: So I wanted to highlight that because we had not really seen true stagflations since the 1970s and it looks like we are hurling towards that situation pretty fast.
[SPEAKER_01]: I'm Justin Klein, my new that we at KTP Financial Practice Parallel Investing, which means we invest right alongside our clients, when we get betrayed for our clients we do have ourselves as well.
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[SPEAKER_01]: Good night.
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