[SPEAKER_00]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is invest talk, independent thinking, shared success.
[SPEAKER_00]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.
[SPEAKER_00]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.
[SPEAKER_08]: Good afternoon fellow investors and welcome back to another week of Invest Talk.
[SPEAKER_08]: This is our Monday March 16th, 2026 edition and a lot happening in the world.
[SPEAKER_08]: It's been quite the start of the year.
[SPEAKER_08]: First quarter has been.
[SPEAKER_08]: Rocky, geopolitically, domestically, and in markets, but there's a lot of dispersion, a lot of sectors doing well, and a lot of sectors doing poorly.
[SPEAKER_08]: And we are here to unpack all of it for you, help you understand why that is, which trends are likely to persist, which trends might be short-lived, how does that all impact your portfolio, your strategy, and ultimately your goal.
[SPEAKER_08]: So that's this hour is about, it's helped you become a better investor.
[SPEAKER_08]: better investor that is our aim each and every week day on a best stock.
[SPEAKER_08]: Now, I'm just inclined and I'm going to answer your finance and investment questions.
[SPEAKER_08]: I'm going to give you actionable data and materials that you can make better decisions with your money.
[SPEAKER_08]: Now, just to be able to talk about today's Mark performance and run down the show topics for the hour.
[SPEAKER_08]: But as usual, we'll tackle this first call, color question now.
[SPEAKER_02]: Justin Luke calling in regards to CF industry holdings ink the F pick this up a few years ago and went into a little downtrend but clearly natural gas kicking back up.
[SPEAKER_02]: I've had a nice uptick the last month with all the news.
[SPEAKER_02]: curious it would be a good time to sell or continue to hold when you're out look just a small portion of my portfolio.
[SPEAKER_02]: Appreciate your help.
[SPEAKER_08]: Looking at CF industries, the name we used to own for clients, so we liked the name overall.
[SPEAKER_08]: That's kind of owned it for some time, but it's having a nice little resurgence here.
[SPEAKER_08]: And it's something everybody needs to understand when they're investing in these fertilizer stocks,
[SPEAKER_08]: is that there's kind of like an arbitrage.
[SPEAKER_08]: Most fertilizer is artificial and means that about 50% of the input is actually natural gas of some type and energy of some type.
[SPEAKER_08]: And CF Industries is a domestic producer of nitrogen fertilizer and
[SPEAKER_08]: In many ways, it's an arbitrage between the price of natural gas here in the United States versus in other parts of the world, especially in Europe.
[SPEAKER_08]: This surge during the initial war in Ukraine, and then kind of languished from there.
[SPEAKER_08]: And now you're getting another catalyst that is driving natural gas prices abroad versus
[SPEAKER_08]: an abundance of natural gas and we don't have to deal with the streets of removes to get that to the end consumer.
[SPEAKER_08]: So if you think that the gap between domestic natural gas and for natural gas prices will persist and may be even grow over time well then you want to hold it.
[SPEAKER_08]: If you think this is the flash in the pan in that Trump will taco that they're this this war will be short lived and you'll see energy prices correct then this would be an opportunity to sell so that's the difficult party you're you're really playing the geopolitical game and everyone has their opinion
[SPEAKER_08]: And you can see today, this was down about 5.5% because oil prices dropped a little bit.
[SPEAKER_08]: It looks like some energy is moving through the straight, the straightive homo's and it's mainly to places like China and India and other countries that are friendly to Iran.
[SPEAKER_08]: And I think that's going to continue for some time, and there will be a lot of contentiousness.
[SPEAKER_08]: But that is just my take.
[SPEAKER_08]: It's probably going to drag out.
[SPEAKER_08]: And therefore, I think there's probably some more upside here.
[SPEAKER_08]: But what does that risk versus reward at this point?
[SPEAKER_08]: That is really the question.
[SPEAKER_08]: So what I would do is rebalance.
[SPEAKER_08]: take a little bit off the table, figure out what your target allocation for this name is, because it's still solid name, but clearly it's more of a price taker, it's more of a commodity producer, it's definitely one of my favorites within the fertilizer space, but it's not immune to
[SPEAKER_08]: the volatility and energy markets that feed through to prices here, to margins.
[SPEAKER_08]: And so this would be a name I'd probably take a bit off the table, but hold if you think, hold some, if you think that the problems in the Middle East will persist.
[SPEAKER_08]: If you don't, if you think they're going to be short-ladies, we've done in a week or two, then you definitely want to sell probably all of it.
[SPEAKER_08]: Now we have a lot of ground to cover over the next hour or so.
[SPEAKER_08]: Time remaining.
[SPEAKER_08]: We'll get to all of it.
[SPEAKER_08]: Our main focus point is about global supply chains and the crisis that it's not just about energy, but food and metals as well.
[SPEAKER_08]: So we'll look into some data there and what that means for inflation more broadly.
[SPEAKER_08]: Once again, not just about the rise in oil prices or national gas prices.
[SPEAKER_08]: It's a byproduct, but we'll talk further down
[SPEAKER_08]: We also have voice bank calls that we'll get to on cover call strategy as well as Mirin energy ink.
[SPEAKER_08]: And then we will have some other topics.
[SPEAKER_08]: One is in regards to shale oil.
[SPEAKER_08]: You would think that the shale industry would love high oil prices.
[SPEAKER_08]: Well, it's more nuanced than that.
[SPEAKER_08]: So we'll dig into that.
[SPEAKER_08]: And then lastly, how our central bank's going to confront what looks to be a rise in earnings inflation expectations.
[SPEAKER_08]: We'll look at that story and then we'll have some questions that came in via the comment section over on the Invest Talk YouTube channel.
[SPEAKER_08]: But most importantly, we'll be your live calls at 8.899.
[SPEAKER_08]: Sharks.
[SPEAKER_08]: So we're going to take a quick break.
[SPEAKER_08]: Do you have anything you can call any time and leave your question on the Invest Talk Voice Bank?
[SPEAKER_08]: And if you're listening to your live stream or possibly on AM-1220, the Bay Area, you can call right now at 8.899.
[SPEAKER_08]: Sharks hang up because I plan to talk about today's market activity in the next segment.
[SPEAKER_01]: KPP Financial is excited to announce the third annual investor stock market madness contest.
[SPEAKER_01]: Instead of basketball brackets, Justin and Luke will be watching companies perform head-to-head in an epic showdown.
[SPEAKER_01]: Invest talk participants can compete for the $1,000 grand prize.
[SPEAKER_01]: and demonstrate their market prowess by locking in their stock victory predictions.
[SPEAKER_01]: And yet this, if the contest winner is also following the Investog YouTube channel, Justin will bump up the prize to $1,500.
[SPEAKER_01]: So if you are ready to test your skills in this unique competition, do not wait.
[SPEAKER_01]: It's free to join the fun.
[SPEAKER_01]: Visit Investog.com and search market madness.
[SPEAKER_01]: Then submit your bracket predictions to enter.
[SPEAKER_01]: You better hurry your last chance to enter the market madness contest is this Wednesday.
[SPEAKER_08]: 8899 chart, 88992427A.
[SPEAKER_08]: So I get through and ask your question on today's show.
[SPEAKER_08]: Let's take a quick look at the market.
[SPEAKER_08]: And it was a bounce back day.
[SPEAKER_08]: You have the NASDAQ about one and a quarter percent S&P up one percent and the Dow up a little more than eight tenths of one percent.
[SPEAKER_08]: And it was really about some some progress.
[SPEAKER_08]: on getting oil through the streets of Hormuz so that it eases oil prices or prices were down about 5% on the day Bitcoin features up 3.8.
[SPEAKER_08]: dollar next down point six percent on the day gold finished off one point two percent on the day treasureies were a bit stronger with yields down five to six basis points.
[SPEAKER_08]: So everything's that the oil prices are wagging the dog.
[SPEAKER_08]: If oil prices stay more contained, you know, we're in the 90-ish range, which is an 100.
[SPEAKER_08]: It's elevated, but not as bad as people were.
[SPEAKER_08]: Fearing last week.
[SPEAKER_08]: And that ultimately does feed into inflation expectations, which feeds into treasury yields, which feeds into the dollar, and then feeds into gold prices.
[SPEAKER_08]: It's all connected.
[SPEAKER_08]: It's all very connected.
[SPEAKER_08]: And so for the foreseeable future, we're gonna get the whims of how President Trump and those in his cabinet
[SPEAKER_08]: Manage the economic volatility this is creating.
[SPEAKER_08]: So far, very much a mixed bag.
[SPEAKER_08]: Today better than Friday, but today could be far worse, right?
[SPEAKER_08]: So that's kind of sums up the market.
[SPEAKER_08]: then you did have, now here's the issue.
[SPEAKER_08]: With economic data that comes out, you have the Empire State Manufacturing Index that came in at negative.2 versus a consensus 3.2.
[SPEAKER_08]: That's certainly not good.
[SPEAKER_08]: Negative territory when this rotation is worth 3.2.
[SPEAKER_08]: It's the second negative reading or the past four months.
[SPEAKER_08]: But once again, the problem is,
[SPEAKER_08]: This is kind of old data.
[SPEAKER_08]: This is operating on a $65 per barrel oil price.
[SPEAKER_08]: Where does this ultimately settle out at?
[SPEAKER_08]: That's going to be the name of the game.
[SPEAKER_08]: It's going to be the big question.
[SPEAKER_08]: And so expect more market volatility in potentially both directions now.
[SPEAKER_08]: We know
[SPEAKER_08]: that this is not going well for this administration and it's a bit of a quagmire.
[SPEAKER_08]: How do we say face?
[SPEAKER_08]: I think that's what President Trump is probably looking for it looking for an off ramp.
[SPEAKER_08]: But it's hard to see one that makes them look good while also bringing oil prices down in the
[SPEAKER_08]: So what I'm expecting is a whole lot of, let's try this, let's try that.
[SPEAKER_08]: So it works a little bit, this doesn't work at all.
[SPEAKER_08]: Because the Iranian regime has a staying power.
[SPEAKER_08]: And so I expect a choppy to hire oil price over the shorter term, which means more pressure on markets.
[SPEAKER_08]: It's a be ready for that.
[SPEAKER_08]: Now let's keep things moving and drop it and another listener question now.
[SPEAKER_06]: Hello and best talk.
[SPEAKER_06]: This is George Cohen from Boston.
[SPEAKER_06]: I had a question in regards the cover call strategy that you guys run for your clients.
[SPEAKER_06]: I always hear you guys mention it.
[SPEAKER_06]: I guess my question would be, what do you guys do when the call goes about the strike price and it's in potential of getting assigned?
[SPEAKER_06]: especially if the client wants to keep the stock, what do you guys usually do for that sort of income, especially if they want to keep their stock and just keep collecting that premium.
[SPEAKER_06]: Thank you all here on the podcast.
[SPEAKER_08]: Great question, and you're right, we do run a cover call strategy and works really well.
[SPEAKER_08]: It's called the Equity income plus what we call it.
[SPEAKER_08]: And this is the,
[SPEAKER_08]: can undrum that a lot of covered call writers have and the average person struggles to conceptualize.
[SPEAKER_08]: How to deal with it, which is when you're selling a covered call, when you own the underlying, typically you're selling out of the money somewhere in the 5-10-15% out of the money collecting your premium.
[SPEAKER_08]: But sometimes stuck into you's go up.
[SPEAKER_08]: And it's a good thing you're still making money.
[SPEAKER_08]: It's just your call option writing, limited that upside.
[SPEAKER_08]: Some.
[SPEAKER_08]: And people freeze and they don't know what to do.
[SPEAKER_08]: It's in the money I'm gonna get called away.
[SPEAKER_08]: But the solution is rather simple.
[SPEAKER_08]: is that is a separate position that call option.
[SPEAKER_08]: You can always buy it back and resell another option and the later date and you can roll it with what we call it rolling.
[SPEAKER_08]: So for example, this is option X week, which means on Friday, traditional monthly options will expire.
[SPEAKER_08]: We are in the process and we've already rolled a good amount of them from our March expiration all the way
[SPEAKER_08]: And if they're in the money, that's fine.
[SPEAKER_08]: You can either roll it out and up, meaning go up a strike.
[SPEAKER_08]: Now it's going to cost you a little bit, potentially.
[SPEAKER_08]: But still might make sense, just depends on where you, how bold as you are on the particular position.
[SPEAKER_08]: You can also just roll it out and flat.
[SPEAKER_08]: You'll get a little bit of a credit, but probably not a whole lot, depending on how many it is.
[SPEAKER_08]: So that's how you deal with it.
[SPEAKER_08]: You don't have to let it expire, and have the stock taken away from you.
[SPEAKER_08]: Go, roll the position.
[SPEAKER_08]: Now we're gonna head to a break.
[SPEAKER_08]: Richard from Santa Clarita Hangon, you'll be next year on Investon.
[SPEAKER_01]: There are a few things that make KPP financial special.
[SPEAKER_01]: One of them is parallel investing.
[SPEAKER_01]: This means they invest right alongside their clients.
[SPEAKER_01]: Here's how it works.
[SPEAKER_01]: When KPP financial makes a trade for their clients, Justin Klein makes the same trade for himself and KPP.
[SPEAKER_01]: On the same day, at the same price, and same percentage.
[SPEAKER_01]: No front running, no special treatment.
[SPEAKER_01]: Learn more about parallel investing at investalk.com.
[SPEAKER_08]: Let's talk to Richard and Santa Clarita looking at potential insurance.
[SPEAKER_08]: The owner looking to buy it.
[SPEAKER_07]: I own a small position in it.
[SPEAKER_07]: My question, financials are something that are good to have in the portfolio and in listening to the show and the past and you've said, you know, it's not an exciting business necessarily, but you know, insurance companies can be good.
[SPEAKER_07]: The thing with credential, I noticed over the last couple of years, tended to go up later in the early fall quite a bit.
[SPEAKER_07]: It dropped quite a bit now.
[SPEAKER_07]: Just wondering in context with what's going on with the straight of her move and oil right now.
[SPEAKER_07]: I think it's a pretty good insurance company.
[SPEAKER_07]: And at the same time, I believe a caller called in last week asked you about metropolitan life.
[SPEAKER_07]: And you recommended it at the cellet.
[SPEAKER_07]: One of the issues you have concerned was the potential investments in private equity.
[SPEAKER_07]: So my question at this point has a long-term hold in a diversified portfolio, knowing that at this time,
[SPEAKER_07]: the favorite sectors or energy, you know, industrials.
[SPEAKER_07]: What would you say about keeping a position and potential maybe adding to it at this point for the long term?
[SPEAKER_08]: Well, I don't think there's a huge amount of risk when it comes to what's going on in the Middle East.
[SPEAKER_08]: In this name, this is of more of a life and share, annuity, mutual funds, of time or products.
[SPEAKER_08]: And but but I do think your last point is the most present, which is if you have an insurance company and it's down considerably and it's starting to correlate with the private equity firms, the KKRs, the world, the Apollo's or you just look up a PSP is probably the best ETF to kind of get a aggregate look of what's going on within that industry.
[SPEAKER_08]: If you're seeing a correlation
[SPEAKER_08]: That is the market telling you that there are issues, there's exposure, major exposure to private equity in that particular name.
[SPEAKER_08]: You talked about that previous caller, and potential is in that same realm.
[SPEAKER_08]: They have roughly $40 to $50 billion allocated to alternative assets in their portfolio, which is considerable.
[SPEAKER_08]: And that's my issue.
[SPEAKER_08]: I don't want to own any of these insurance companies that have significant exposure.
[SPEAKER_08]: Now if it's two, three, four, five percent fine, but you're getting the double digits and maybe even higher, that's where I get worried.
[SPEAKER_08]: And so there's another red flag and the fact that it yield six percent, most people would say,
[SPEAKER_08]: That's great, but 6% is pretty high in this market for any financial that's out there and usually that is the market signalling
[SPEAKER_08]: this is high risk.
[SPEAKER_08]: And I've said this for the last two years, the subprime of this cycle is private equity and private credit is blatantly obvious.
[SPEAKER_08]: You're starting to see the cracks form.
[SPEAKER_08]: Now, what is the catalyst that ultimately creates a more more of a crisis in this space?
[SPEAKER_08]: I'm not sure.
[SPEAKER_08]: Maybe it is.
[SPEAKER_08]: What's going in the middle least?
[SPEAKER_08]: So in that sense, there is some connection
[SPEAKER_08]: Now it's not large enough, I think it's only a 10% of the size of the sub-prime market back in 08.
[SPEAKER_08]: So it's not a large enough to really take down the financial system like 08.
[SPEAKER_08]: But it can create a crisis and a lot of losses within this particular
[SPEAKER_08]: area of finance and those companies that are tied to it.
[SPEAKER_08]: So I would not be, I would, I would just like metropolitan life, I would be selling this name.
[SPEAKER_08]: Look for the, I like insurance companies, but the ones that have low exposure here.
[SPEAKER_07]: And I would go back, good, what was that?
[SPEAKER_07]: lot of people have their retirement, a lot of their retirement on fixed annuities.
[SPEAKER_07]: Does that mean that there may be, you know, that could trigger there be a lot of insurance companies that fail on those annuities in the future or is that, are we at, do you think at that point or is it, I mean, as I say, a lot of people, they're, they're, they're, they're, they're, they're, they're
[SPEAKER_07]: You know, they're whole retirement in, you know, and insurance annuity.
[SPEAKER_08]: Yeah.
[SPEAKER_07]: What do you think of?
[SPEAKER_08]: I agree that there is elevated risk compared to the past in a lot of these insurance products.
[SPEAKER_08]: Now, do I think there's going to be a widespread defaults and bankruptcies for these in these names?
[SPEAKER_08]: I don't think so.
[SPEAKER_08]: I think it's more about impaired assets on their balance sheet that causes the stock price to go down and earnings to go down ultimately.
[SPEAKER_08]: So I don't think.
[SPEAKER_08]: It's going to be a widespread issue, but if you do hold the newities, you do hold insurance products, you do want to take a look and see how safe, how exposed it are those insurance companies to what's going on in private equity and private credit.
[SPEAKER_08]: And if it's substantial, then I would think about getting out of those positions.
[SPEAKER_08]: Thanks for the call.
[SPEAKER_08]: Now we're heading to a break.
[SPEAKER_08]: I'm ready for your calls now at 88899 chart.
[SPEAKER_01]: KPP Financial is excited to announce the third annual Invest Talk Market Madness Contest.
[SPEAKER_01]: Invest Talk Participants can compete for the $1,000 grand prize.
[SPEAKER_01]: So if you are ready to test your skills in this unique competition, do not wait.
[SPEAKER_01]: It's free to join the fund.
[SPEAKER_01]: Visit InvestTalk.com and search Market Madness.
[SPEAKER_01]: Then submit your bracket predictions to enter.
[SPEAKER_01]: Be better hurry your last chance to enter the market, Matt discontest is this Wednesday.
[SPEAKER_08]: A lot has been set over the past couple of weeks about the war in the Middle East, and it's impact on energy markets.
[SPEAKER_08]: But,
[SPEAKER_08]: It's impact is far more substantial across supply chains around the world.
[SPEAKER_08]: And that's what our focus point is about today.
[SPEAKER_08]: It's about not just energy disruption, but the investment implications across economies and harder assets.
[SPEAKER_08]: So one underappreciated aspect of this crisis
[SPEAKER_08]: And probably the most impacted metal is aluminum.
[SPEAKER_08]: There are many key smelters in the Middle East.
[SPEAKER_08]: The Middle East accounts are about eight to nine percent of global aluminum output.
[SPEAKER_08]: And smelters only keep about three to four weeks of aluminum in stock.
[SPEAKER_08]: And if this crisis continues for just a couple more weeks,
[SPEAKER_08]: that supply has gone.
[SPEAKER_08]: And they've already halted shipments and curb production, and this will ripple through supply chains.
[SPEAKER_08]: Think about what a aluminum goes into.
[SPEAKER_08]: It's not just cars, but it's all types of manufactured goods.
[SPEAKER_08]: And most importantly, in today's economy, there's a lot of aluminum that goes into AI data centers.
[SPEAKER_08]: Aluminum Bahrain operates one of the largest smelters in the world, and they halt the shipments due to shipping and strengths in the straight-to-home moves.
[SPEAKER_08]: It produced more than 1.6 million metric tons of aluminum every single year.
[SPEAKER_08]: And then there's no region producer Norris Hydro.
[SPEAKER_08]: They have a smelter in Qatar.
[SPEAKER_08]: Who's about 648,000 tons of aluminum every year?
[SPEAKER_08]: They declared force major and will fully shut down by the end of the month.
[SPEAKER_08]: And this is pushed prices aluminum to the highest level since 2022, climbing above 3,400 metric tons, 3,400 dollars per metric tons, excuse me.
[SPEAKER_08]: And so while energy prices are a large input into the global economy,
[SPEAKER_08]: It's not the only input to the global economy.
[SPEAKER_08]: And it costs a lot, it costs a lot of energy to excuse me to produce aluminum for the smelters to run this narrowes margins and also pushes aluminum prices.
[SPEAKER_08]: Uh, so that's metals, but it's not just metals, and it's not just outwardly to the rest of the world.
[SPEAKER_08]: It's for the Middle East in general and that's food.
[SPEAKER_08]: Most of the ships that carry grain and food in the Gulf region are not passing through.
[SPEAKER_08]: About 30 million tons of grain imports is imported into the Gulf region last year.
[SPEAKER_08]: 14 million of it went to Iran.
[SPEAKER_08]: So that's a challenge that Iran's gonna have in the short to medium term.
[SPEAKER_08]: Is how do they continue to get large quantities of food?
[SPEAKER_08]: into the country.
[SPEAKER_08]: They do have a lot of domestic production, so that's helpful for them.
[SPEAKER_08]: But it will be a bottleneck over the medium term.
[SPEAKER_08]: But there are other countries that food travels through the streets of our moves to get there countries like Yemen, Sudan,
[SPEAKER_08]: And Iran is banned all exports of food and ag, so that's going to help.
[SPEAKER_08]: And they had about four million tons of wheat stores strategically before this, but that's only about four months of food.
[SPEAKER_08]: And then you have other Gulf countries like Kuwait, Qatar, Bahrain, Saudi Arabia, UAE.
[SPEAKER_08]: These are all food scarce.
[SPEAKER_08]: They import most of their food.
[SPEAKER_08]: And so it's going to be pressure from them for this to end or for this to come to some sort of resolution, but overall it's going to push up inflation.
[SPEAKER_08]: Globalization was deflationary.
[SPEAKER_08]: We saw that through most of the 90s and early 2000s.
[SPEAKER_08]: And it's clear that globalization is reversing.
[SPEAKER_08]: Not just on a one-off level, but through crisis after crisis.
[SPEAKER_08]: And so there's another shot across the bow that inflation is here to stay.
[SPEAKER_08]: And that puts central banks in the quagmire of what should they do about policy.
[SPEAKER_08]: No, we'll be coming out with a video, Luke and I, we recorded one last week on this topic
[SPEAKER_08]: broader ramifications of this war on supply chains and we'll see you'll see that posted over on a YouTube channel very shortly.
[SPEAKER_08]: Let's go with a YouTube comment question.
[SPEAKER_08]: The divine feeling says, really appreciate your weekly updates at the 154 mark you said clearly, we are in some trouble.
[SPEAKER_08]: Can you please elaborate?
[SPEAKER_08]: Are we clearly in trouble or clearly on a path to trouble?
[SPEAKER_08]: Well, dear death, what's your definition of trouble?
[SPEAKER_08]: Well, this question is about
[SPEAKER_08]: overview of markets.
[SPEAKER_08]: And when I say we're in trouble, first off technically, if you're looking at markets, you're in a downtrend in risk assets.
[SPEAKER_08]: It's certainly bifurcated.
[SPEAKER_08]: As I've said many times, you see a lot of industries doing very, very well.
[SPEAKER_08]: Others not so much.
[SPEAKER_08]: So it doesn't mean there are opportunities that's just if you are in the right indices, you're going to probably see a lot of malaise for, I think at least, through the third quarter.
[SPEAKER_08]: And potentially more downside, if the trouble we're in now intensifies, as I've said, it's all about what's the resolution here.
[SPEAKER_08]: How does President Trump say face?
[SPEAKER_08]: Well, also, calming the crisis.
[SPEAKER_08]: Game theory says this will probably get worse before it gets better.
[SPEAKER_08]: So are we in trouble?
[SPEAKER_08]: Yeah, I think we're in trouble.
[SPEAKER_08]: Are we on the path to trouble?
[SPEAKER_08]: We're probably on the path to more trouble.
[SPEAKER_08]: But that doesn't mean the markets go to crash overnight or anything like that.
[SPEAKER_08]: It's just been pretty orderly sell-off.
[SPEAKER_08]: But you have to call a spade a spade.
[SPEAKER_08]: We are in, we're in the fourth turning people.
[SPEAKER_08]: Been talking about it for a number of years, fantastic book, and really hits on the cycle that we are in and we're probably another five to six years before this crisis period ends, the fourth turning ends, which means if it's not this crisis, there will be another one.
[SPEAKER_08]: But crisis doesn't always look like O8.
[SPEAKER_08]: you can teach the push asset prices and hard assets higher.
[SPEAKER_08]: That is an outcome that you have to leave open as a possibility.
[SPEAKER_08]: If you don't, well, then you don't have a silver outlook about what's happening.
[SPEAKER_08]: As Lynn Alden says, nothing stops this train.
[SPEAKER_08]: And I think whatever crisis we see going forward, it'll probably met with more spending, which is inflationary, which means higher prices across the board.
[SPEAKER_08]: Those were another listener question now.
[SPEAKER_04]: Hey, guys, this is Dan from Pittsburgh, Pennsylvania.
[SPEAKER_04]: I am a client of your guys.
[SPEAKER_04]: This has even managed all of my retirement accounts for the last five or six years now.
[SPEAKER_04]: And I've been super happy with your performance
[SPEAKER_04]: With that said, I do have an account that I still like to manage on my own and I got a winner for you guys now.
[SPEAKER_04]: You're going to like this one with the Middle East being a mess.
[SPEAKER_04]: We're trying to go and get their oil from Africa, right.
[SPEAKER_04]: I'd rather than let it turn me on to this small cap stock trades over the counter.
[SPEAKER_04]: Marin energy, M-E-R-E-N, sticker symbol, I think it's M-N-R-F-F, Marin energy, but it's been paying me a 10% different and all last year.
[SPEAKER_04]: I'm up over 20% all the technical analysis, say the suckers go into the moon, as long as the Middle East is still a mess.
[SPEAKER_04]: I think this is a no-brainer.
[SPEAKER_04]: What do you guys think?
[SPEAKER_04]: I know it had a bad force quarter, but we're not going to talk about that.
[SPEAKER_04]: Let's just look to the future with the world's going.
[SPEAKER_04]: We need that oil and gas from Africa.
[SPEAKER_04]: Let me know if I'm wrong, but I don't think I am.
[SPEAKER_04]: You're probably going to be buying this for all of your platforms starting tomorrow.
[SPEAKER_04]: Thank you.
[SPEAKER_08]: Well, thank you for the call in the kind of words looking at Marin energy.
[SPEAKER_08]: This is an OTC stock.
[SPEAKER_08]: So it's lightly traded.
[SPEAKER_08]: It is very small about $1.1 billion market cap.
[SPEAKER_08]: Very solid balance sheet.
[SPEAKER_08]: Free cash flow very strong, 258 million on a 1.1 billion dollar market.
[SPEAKER_08]: You're talking about 20% free cash flow yielded to means that dividend is certainly payable and as he said, this is a company that produces oil and gas out of Nigeria, mainly equatorial Guinea, and South Africa.
[SPEAKER_08]: 97% oil, only 2.6% gas, and this market, I kind of like that, but we tend to lean more on natural gas companies because oil is in normal times, and obviously we're not normal times, easier to move around than gas.
[SPEAKER_08]: So I like it, and we don't buy OTC stocks for clients, you probably know that.
[SPEAKER_08]: But for the average investor, if you want to pick up some shares here, I do think there's some good value.
[SPEAKER_08]: It wouldn't be an a long-term play, it would be more of playing this crisis.
[SPEAKER_08]: But money is flowing, not just energy names, to foreign assets.
[SPEAKER_08]: And this is in the heart of that.
[SPEAKER_08]: Now it's a small cap name.
[SPEAKER_08]: So probably not in the big indices, but I like it as a diversifier, as an energy play, a broad that has very good value if you're looking at enterprise value, EBITDA, et cetera, and it's continue to pay you out the dividend.
[SPEAKER_08]: And so I'm gonna give it a thumbs up.
[SPEAKER_08]: Let's get things for the call in the kind words.
[SPEAKER_08]: Now let's go take another listener question right now.
[SPEAKER_03]: I was calling about old tree group and I wanted to know if I should sell it or keep it pretty much cut for the dividend.
[SPEAKER_03]: Listen on the podcast.
[SPEAKER_03]: Thank you.
[SPEAKER_08]: Looking at M-O, Altria Group.
[SPEAKER_08]: This is your domestic fill-it-morse.
[SPEAKER_08]: Now, you need to be called fill-it-morse and they spun it off to fill-morse international and then Altria Group as the domestic cigarette producer.
[SPEAKER_08]: It's decent value, still, even after it's recent run, retraining in the low teens multiple.
[SPEAKER_08]: The problem is that while profits are flat last quarter, they were at four percent, previous quarter, revenues were down to two percent.
[SPEAKER_08]: And the average American is smoking less and less.
[SPEAKER_08]: They're vaping, they're doing other things.
[SPEAKER_08]: It's just not a growing business.
[SPEAKER_08]: And so it should trade it a relatively low multiple.
[SPEAKER_08]: And frankly, since the end of 2024, profits have rolled over, net income up from 11 billion to only 7 billion trailing 12 months.
[SPEAKER_08]: Not a great look.
[SPEAKER_08]: We're trying to ask it to the world over.
[SPEAKER_08]: They have a decent balance sheet, good cash flow.
[SPEAKER_08]: I like that.
[SPEAKER_08]: But we own Philip Morris International.
[SPEAKER_08]: for better or worse, people overseas smoke more and they're quitting less.
[SPEAKER_08]: And so you're seeing revenue growth and they have their leader in the smokeless tobacco or Venus well.
[SPEAKER_08]: So I rather get a lower yield, more growth, better asset mix and unfilled Morris over Altrian.
[SPEAKER_08]: Those are the Best Docs I'm Justin Klein.
[SPEAKER_08]: We have one goal here each every week.
[SPEAKER_08]: They help you achieve your own version of financial freedom.
[SPEAKER_08]: And it will continue after this final break.
[SPEAKER_08]: So if you are going to call me, you need to do that right now.
[SPEAKER_08]: Here in the Best Docs, I'll get eight, eight, nine, nine chart.
[SPEAKER_01]: In the early days, in Vestock was Jerry Klein and Steve Peasley.
[SPEAKER_01]: Now the torch has been passed, and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.
[SPEAKER_01]: So when you've got finance and investment questions, don't forget to call in Vestock.
[SPEAKER_01]: 888-99, chart.
[SPEAKER_05]: Hey, Logan Griffin, Matt and South Florida, question on SEP, SCP-P, a 72T, rather than a questions about how to do it or the requirements.
[SPEAKER_05]: I think I understand that.
[SPEAKER_05]: I'm more interested in your guys explaining, I guess, a best case or a potential scenario where somebody would want to entertain, taking withdrawals.
[SPEAKER_05]: via the SEP72T, I guess, mechanism.
[SPEAKER_05]: It sounds like it's for people that are in their early 50s trying to access funds strategically to maintain a certain tax rate, et cetera.
[SPEAKER_05]: So what did you see here?
[SPEAKER_05]: An example or two of one that might be a good idea and how you guys view that option.
[SPEAKER_05]: Thank you.
[SPEAKER_08]: Thank you for the call.
[SPEAKER_08]: Now, the rule of 72T or SEPP,
[SPEAKER_08]: is something most people don't take advantage of, mainly because most don't retire early.
[SPEAKER_08]: So for normal IRA or in a 401k, which is an normal IRA, your age where you can take the money out penalty free is 59.5 when a 401k, it's 55.
[SPEAKER_08]: What's some one, retireally, especially the fire trend rate.
[SPEAKER_08]: But you can basically take money out of these 401k's, these IRAs, early without the penalty, but you have to set up what is called an SEPP.
[SPEAKER_08]: And what that means is you have to, there's a ways to calculate it, and it's a certain dollar amount, and you have to do it consistently.
[SPEAKER_08]: you do every year, every quarter, every month, but it needs to be the same for at least five years, or until you reach the age of 59 and a half, whichever is longer.
[SPEAKER_08]: So if you tire at 50, you set this up, you can take money out, penalty free, but that's the same amount, over nine and a half years until you reach that age of 59 and a half and then it's over.
[SPEAKER_08]: So it's a great little work around.
[SPEAKER_08]: but only if you are vaginaly.
[SPEAKER_08]: And then that's pretty much it, it's pretty simple.
[SPEAKER_08]: Once again, there are some complex calculations and how much you can take out one is amirization method, fixinuity, newization method, RMD method, et cetera.
[SPEAKER_08]: And you can look those up, IRS rules, all of that.
[SPEAKER_08]: You probably want to talk to a CPA before you do that.
[SPEAKER_08]: Now all of this distribution is still taxed as your ordinary income.
[SPEAKER_08]: And that's another issue.
[SPEAKER_08]: is if you start this plan, you can't stop it.
[SPEAKER_08]: So whatever impact that has on you from a tax perspective, it has, you can't say, oh, I don't want that income this year.
[SPEAKER_08]: I don't need that money this year.
[SPEAKER_08]: You're going to set up it's going to come to you and you're going to have to report it as income on your taxes.
[SPEAKER_08]: If you're okay with that, then you can go ahead.
[SPEAKER_08]: So I hope that helped.
[SPEAKER_08]: Now, lastly, let's talk about oil and shale oil, really.
[SPEAKER_08]: And most people would say, high oil prices good for the shale companies.
[SPEAKER_08]: That's probably true for the most part, but it's not as clear cut as most people imagine.
[SPEAKER_08]: Why?
[SPEAKER_08]: Because if you look at the oil curve, it's what it's called backwardation, which means
[SPEAKER_08]: oil prices are high in the short term.
[SPEAKER_08]: We call that spot.
[SPEAKER_08]: But if you go out to future years, prices are much lower.
[SPEAKER_08]: Spot prices are up about 60 plus percent.
[SPEAKER_08]: But if you got the next year, only about 17 percent.
[SPEAKER_08]: You got the 2028, only up about 12 percent.
[SPEAKER_08]: So the market is saying that the conflict is likely going to blow over and you could fade that.
[SPEAKER_08]: And
[SPEAKER_08]: But that's not how the oil industry works.
[SPEAKER_08]: They're not going to put a bunch of cat backs in for modestly oil prices, mostly high oil prices in a year or two.
[SPEAKER_08]: Already read counts have been down over the past year or so by about 10% or so.
[SPEAKER_08]: Why because Trump is threatened $50 oil and he's may want to get back there again at some point before the midjurps, so he has some incentive to do that.
[SPEAKER_08]: So it's not a clear cut shift in the industry that they're just going to massively drill baby drill.
[SPEAKER_08]: I'm Justin Klein.
[SPEAKER_08]: Remember, mind you about KP Financial's Parallel Investing when we make a trade for our clients, we make the same trade for ourselves, same day, same price, same percentage, bill front running, no special treatments, we invest right alongside our clients.
[SPEAKER_08]: If you want to learn more, just head over to investtalk.com.
[SPEAKER_08]: Please tell your friends and family about a free podcast downloads which can find any time that iTunes is Spotify and head over to our YouTube channel and subscribe.
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[SPEAKER_08]: This is Invest Talk.
[SPEAKER_08]: Good night.
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