[SPEAKER_04]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is invest talk, independent thinking, shared success.
[SPEAKER_04]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.
[SPEAKER_04]: Here is KPP Financial Chief Executive Officer, financial advisor, Justin Klein.
[SPEAKER_01]: Good afternoon fellow investors and welcome back to Invest Talk.
[SPEAKER_01]: This is our Friday, and I'm not usually here on Fridays, but
[SPEAKER_01]: This is our April 10th, 2026 edition of Investock.
[SPEAKER_01]: A lot of moving parts in today's markets, and we're going to unpack all of it for this week as we head into this glorious spring weekend.
[SPEAKER_01]: I'm Justin Klein.
[SPEAKER_01]: My goal here is to help you become a better investor and to your finance and investment questions, bring you data and perspectives so that you can become a better investor.
[SPEAKER_01]: So you're not, you'll fall prey to the emotions that
[SPEAKER_01]: usually fear and greet.
[SPEAKER_01]: All right, you're losing money.
[SPEAKER_01]: You fear, you might lose more.
[SPEAKER_01]: You sell out at the wrong time and vice versa.
[SPEAKER_01]: When things are going great, you think it'll continue that way.
[SPEAKER_01]: And you might see others making money and you jump in, you think it will continue that way.
[SPEAKER_01]: And both could be true, but most likely when emotions are at their highest, you make the wrong decision.
[SPEAKER_01]: So we're here to make sure that you don't make those mistakes.
[SPEAKER_01]: but you capitalize on the opportunities and you avoid the pitfalls of investing.
[SPEAKER_01]: So that's what this hour is dedicated to each every week day.
[SPEAKER_01]: Now, in just a bit, we'll talk about today's Mark performance and we'll run down the show topics.
[SPEAKER_01]: But first, let's tackle this call a question now.
[SPEAKER_06]: Hey, this is Andrew from Atlantic All Investigation about ticker symbol, IAU.
[SPEAKER_06]: What's the single biggest driver for gold right now?
[SPEAKER_06]: in which one matters most going forward.
[SPEAKER_06]: I'll listen to the podcast for the answer.
[SPEAKER_06]: Appreciate the show guys.
[SPEAKER_06]: Have a great day.
[SPEAKER_01]: I love this question because the gold market today is very different than it has been for most of the last 30, 40 years.
[SPEAKER_01]: Up until 2022, what you saw was there's a correlation between real yields that the caller talked about.
[SPEAKER_01]: and goal braces.
[SPEAKER_01]: So what that means is when real yields rise, real yields are nominal yields, think the 10 year treasure rate minus inflation.
[SPEAKER_01]: So inflation stays the same, rates rise well, real yields are rising.
[SPEAKER_01]: Okay, but maybe you could have yields stay the same, and then inflation rise and then suddenly real yields are falling.
[SPEAKER_01]: Who do you mean there?
[SPEAKER_01]: That was the model for a long time, which way were yield, real yields going?
[SPEAKER_01]: And if real yields were rising, gold would fall and vice versa.
[SPEAKER_01]: Because it's a non-yielding asset.
[SPEAKER_01]: And so your alternative, your real yield from the markets, went up and down.
[SPEAKER_01]: And therefore, the attractiveness of holding gold went up and down with that.
[SPEAKER_01]: But since 2020, to 2022, when Russian-vaded Ukraine, when we confiscated their assets, that is broken.
[SPEAKER_01]: And now, central banks around the world are buying gold consistently.
[SPEAKER_01]: And on top of that, you have an underallocation by really the rest of the world, when it comes to investors portfolios who have so concentrated in,
[SPEAKER_01]: U.S. stocks, big tech, et cetera, and gold for a long period of time, and then very well, but it's caught up in a big way, and since 2000, it's actually up before the S&P.
[SPEAKER_01]: Most people will know that.
[SPEAKER_01]: So right now, what's driving gold's price is just consistent demand.
[SPEAKER_01]: It is the
[SPEAKER_01]: the global, store value.
[SPEAKER_01]: With what's happening here domestically, with our politics, with our fiscal situation, which is what's happening geopolitically, treasures are no longer viewed as risk-free anymore.
[SPEAKER_01]: We have too many warts, and gold is the neutral reserve asset.
[SPEAKER_01]: That's why it continues just to fit.
[SPEAKER_01]: I was a steady climb because it's still as relatively volatile, but it's volatile generally to the upside.
[SPEAKER_01]: You had his large pullbacks, it has recently, but soon as you get the all clear, liquidity comes back a little bit, gold goes up.
[SPEAKER_01]: And then you talk with the dollar dollars, generally been in a downtrend for the last couple of years as well, and I do think that helps.
[SPEAKER_01]: But what you're seeing,
[SPEAKER_01]: broadly is governments are debasing their currencies, not just us, but really fiat currencies around the world are being debased.
[SPEAKER_01]: And so gold is rising in all currencies now.
[SPEAKER_01]: So that's why you have to own gold in some way shape for them.
[SPEAKER_01]: You could have gold gold gold miners.
[SPEAKER_01]: You could old it physically.
[SPEAKER_01]: You can just own and in this case IAU, that's the I shares gold trust.
[SPEAKER_01]: You could own GLD, et cetera.
[SPEAKER_01]: There's a lot of ways to get exposure.
[SPEAKER_01]: But it's clear in this fourth turning type of environment, gold is becoming the global reserve asset.
[SPEAKER_01]: Now, we have a lot of ground to cover over the next 45 minutes or so in time for meeting.
[SPEAKER_01]: We'll get to all of it.
[SPEAKER_01]: First, we're going to talk about the shipping stock supply chain crisis.
[SPEAKER_01]: And how this will, this crisis impacting the shipping industry as a whole, talking, tankers, you're talking, air freight, and how this compares to previous cycles, previous events.
[SPEAKER_01]: And with a long-term impact, it will be.
[SPEAKER_01]: In addition, I have other topics on the docket, and I have, by far, one of my favorite stories of all time that connects sports and money.
[SPEAKER_01]: And that is the Bobby Bonilla story.
[SPEAKER_01]: Some of you might know about it, but that guarantee the vast majority of you don't, because when I talk to other people around,
[SPEAKER_01]: uh... out and about and showy say a lot of people don't know and there's a lot of great lessons from this story it is you do not want to miss this because it's going to be great great discussion i've never talked about it on air don't know why i haven't taken this long but it's a great great story and then we're going to look at defense spending in the midst of all this geopolitical unrest countries are spending more more money on defense
[SPEAKER_01]: And a lot of those politicians might say, well, that helps the economy and that's certainly true.
[SPEAKER_01]: But how durable is that spending?
[SPEAKER_01]: Or that growth, excuse me, let's talk about that.
[SPEAKER_01]: We also have Call of Questions.
[SPEAKER_01]: One is on Windmark and the other is Brown and Brown.
[SPEAKER_01]: And we have some questions that came earlier from the comment section over on our YouTube channel.
[SPEAKER_01]: Of course, and of course, your calls are number one.
[SPEAKER_01]: A to date 99 chart.
[SPEAKER_01]: We are here.
[SPEAKER_01]: You can call us live.
[SPEAKER_01]: If you're listening via our live stream or possibly an AM220 in the Bay Area, you can call right now 888-99 chart or if you're listening after hours, you can call and leave your message and we will answer that on a future show as well.
[SPEAKER_01]: Now up next, I will comment on today's Market Activity.
[SPEAKER_02]: When you tell your friends about Investor, and they ask you why you listen, let them know there are many reasons and one is parallel investing from KPP Financial and Investor Coast Justin Klein.
[SPEAKER_02]: Parallel investing means Justin invests right alongside KPP financial clients.
[SPEAKER_02]: He makes the same trade for KPP financial on the same day at the same price and the same percentages as KPP clients.
[SPEAKER_02]: There's no front running and no special treatment.
[SPEAKER_02]: In this way Justin and KPP financials share the same risks and the same potential for success.
[SPEAKER_02]: Parallel Investing aligns the interests of Justin and KPP Financial with those of his clients.
[SPEAKER_02]: Justin, Klein and Luke Guerrero are ready to answer your questions about Parallel Investing.
[SPEAKER_02]: And you can learn more anytime at InvestTalk.com.
[SPEAKER_02]: In the early days, in Vestock was Jerry Klein and Steve Peasley.
[SPEAKER_02]: Now the torch has been passed, and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.
[SPEAKER_02]: So when you've got finance and investment questions, don't forget to call in Vestock.
[SPEAKER_02]: 888-99, chart.
[SPEAKER_01]: 8899 chart, 889924 to 78.
[SPEAKER_01]: So I could do an ask your question on today's show.
[SPEAKER_01]: Let's take a look at the markets.
[SPEAKER_01]: It was a little bit of a red day.
[SPEAKER_01]: S&P down slightly down was down about 27 points.
[SPEAKER_01]: So pretty decent down day there.
[SPEAKER_01]: What was the big reason for that?
[SPEAKER_01]: Yeah, definitely big under performance for the Dow.
[SPEAKER_01]: You had the Nasdaq down up about a third of 1%.
[SPEAKER_01]: The broad US market though, slightly down about 14 basis points.
[SPEAKER_01]: March CPI increased 0.2% month over month, the consensus was expected to be 0.3.
[SPEAKER_01]: February was up 0.2%, and the annualized core payment 2.6 versus consensus of 2.7 headline CPI rose 0.9% which was inline with consensus
[SPEAKER_01]: And so overall energy is up 10.9% gasoline was up 21.2.
[SPEAKER_01]: That was expected.
[SPEAKER_01]: But you aren't seeing the spill over effects.
[SPEAKER_01]: It's kind of too early for that.
[SPEAKER_01]: Core goods increase 0.1% parallel up 1% new vehicle is up 0.1%.
[SPEAKER_01]: So
[SPEAKER_01]: I think it's still too early.
[SPEAKER_01]: Once again, we just kind of saw the spike in oil at the beginning of March, and then hadn't fled through to the rest of the economy.
[SPEAKER_01]: The preliminary April, University of Michigan Consumer Sentiment came at 47.6, consensus was 52, and that was the lowest on record.
[SPEAKER_01]: Broad-based declines based on age, income, political party, all concerned about the conflict with Iran.
[SPEAKER_01]: An inflation expectations went from 3.8 to 4.8.
[SPEAKER_01]: In just a month, the largest one-month increase since April of 2025.
[SPEAKER_01]: And long-run inflation expectations ticked up the 3.4 from 3.2 the highest reading since November of last year.
[SPEAKER_01]: So the inflation picture didn't look as bad as everyone expected, but it's also once again too early to really tell.
[SPEAKER_01]: To really see the higher fuel cost, feed into inflation, the logistical choke points as well, and the low inventory that will come about if you continue to see the straight to our moves closed and just overall goods and raw materials not flowing the way they normally do.
[SPEAKER_01]: Treasuries were a bit weaker.
[SPEAKER_01]: You had yields up 2 to 3 basis points across the curve.
[SPEAKER_01]: The dollar index was off 2.2% gold finished down 0.6%.
[SPEAKER_01]: Silver was flat Bitcoin up 1.3 and WTI actually settled down 1.3% in continued volatile trading up and down very choppy environment.
[SPEAKER_01]: As there's still not a lot of clarity of what's going to happen with this tentative,
[SPEAKER_01]: Seasfire.
[SPEAKER_01]: The US and Iranian delegations are going to meet in Pakistan over the weekend, so a lot of headlines most likely you will see on Monday, but it's probably unlikely they reach anything material over the weekend.
[SPEAKER_01]: It was a two week ceasefire.
[SPEAKER_01]: My guess is this drags on through next week and into the following weekend.
[SPEAKER_01]: And so a lot to really be figured out between now and then.
[SPEAKER_01]: Let's go talk to or go answer a YouTube comment question.
[SPEAKER_01]: Audio Obsession says, thank you for the consistent education and all things finance.
[SPEAKER_01]: My question is on team, which is at Lassian,
[SPEAKER_01]: I'm looking on my brokers website and they offer both adjusted earnings, which look great and has been an upper trajectory, however, my broker offers gap earnings, which sings a different song than a good of earnings quarter after quarter.
[SPEAKER_01]: Stock has plunged and now that things have leveled off, the software service have gone.
[SPEAKER_01]: Oh, my god, pummeled is a time to add keep or liquidate the small position about 1.5% of portfolio that I have.
[SPEAKER_01]: This is a great question looking at non-gap and gap earnings and this happens a lot in tech.
[SPEAKER_01]: I always focus on gap.
[SPEAKER_01]: Non-gap is, you never know a non-gap is.
[SPEAKER_01]: That's why it used gap.
[SPEAKER_01]: It's generally accepted.
[SPEAKER_01]: But I would not be focusing on the non-gap because the net income is negative.
[SPEAKER_01]: and it's in a downtrend because software names are also in a downtrend.
[SPEAKER_01]: I would not be buying, I would just sell it.
[SPEAKER_01]: I think this looks like a value trap to me.
[SPEAKER_01]: It's clear that their tools are easily replaced with a.
[SPEAKER_01]: It's the type of name I think that will continue to struggle in the era of AI.
[SPEAKER_01]: So, I'm passing.
[SPEAKER_01]: I would sell, move on, from team.
[SPEAKER_01]: We are heading into a break, with thank you for helping us achieve more than 62 million downloads.
[SPEAKER_01]: Call with your questions now at 8.99.
[SPEAKER_02]: The Investor phone lines never close, and now, Justin Klein is here taking your calls live.
[SPEAKER_02]: Investor 888-99 chart.
[SPEAKER_05]: Good morning.
[SPEAKER_05]: This is Andrew from Maine.
[SPEAKER_05]: Thank you for your show.
[SPEAKER_05]: It's very helpful.
[SPEAKER_05]: I have a question for you about ticker symbol, W-I-N-A-Wina.
[SPEAKER_05]: is Windmark Corporation.
[SPEAKER_05]: I very much like the asset life, this is a model and profitability on a consistent basis.
[SPEAKER_05]: However, I just question about if it's too expensive.
[SPEAKER_05]: The PE ratio and the earnings and cash flow all seem to be consistently rated higher than other retailers.
[SPEAKER_05]: And I'm just wondering if this is
[SPEAKER_05]: of $5.00.
[SPEAKER_05]: Thanks.
[SPEAKER_01]: This is an interesting one.
[SPEAKER_01]: When, when Mark Corporation, WINA is a symbol, small name, only about billion and a half in market cap.
[SPEAKER_01]: But it's one of those consistent businesses where their operating margins are 63% very high.
[SPEAKER_01]: Good balance sheet, very little debt.
[SPEAKER_01]: They're not buying back shares, which I don't like.
[SPEAKER_01]: They do pay a little bit of a dividend, which is good, but it doesn't look like it's like you didn't go higher because they're cash dividend pair ratio is 110%.
[SPEAKER_01]: The free cash flow at 44 million is kind of flat over the past five years.
[SPEAKER_01]: And it's a billion and a half market cap.
[SPEAKER_01]: That's not a very good free cash lead.
[SPEAKER_01]: That's only about a 3% free cash flow yield.
[SPEAKER_01]: and they've been issuing more shares instead of buying them back.
[SPEAKER_01]: In order to do, they have franchise stories about 1,300 stores that buy, sell, and trade sports equipment, clothing, and musical instruments.
[SPEAKER_01]: So they're kind of the middleman between kind of used stuff for, for kids.
[SPEAKER_01]: High schools, etc.
[SPEAKER_01]: And you're right, it is very expensive.
[SPEAKER_01]: 37 times earnings, enterprise value, even around 29, it's just way too expensive for its growth.
[SPEAKER_01]: Very modest growth, mid to high single digits.
[SPEAKER_01]: So I need to see no reason to own this.
[SPEAKER_01]: The technicals are fine, certainly is a diversifier maybe, but yeah, it's just too expensive for my taste.
[SPEAKER_01]: So I'm passing on Winmark, W-I-N-A.
[SPEAKER_01]: Let's go answer another voicemail question now.
[SPEAKER_07]: Hey Justin look, this is Frank from LA.
[SPEAKER_07]: I have a question about utility stocks.
[SPEAKER_07]: I was thinking a look at a bunch of names in the energy sector in Europe, and I found an interesting company called NL, EN, EL.
[SPEAKER_07]: I think it trades over the counter with ticker symbol, EN, L, A, Y.
[SPEAKER_07]: They are in the process of dismissing those strategic assets in South America and other regions in Europe.
[SPEAKER_07]: They are geographically diversified of a good exposure to renewable energies.
[SPEAKER_07]: I would like to hear your view on the stock and the text world you guys do and I'll be listening on the show.
[SPEAKER_01]: All right, looking at NL, this is out of looks like Italy, headquarters in Rome.
[SPEAKER_01]: Definitely seen the name.
[SPEAKER_01]: throughout my time in Italy.
[SPEAKER_01]: The do, yeah, looks like Italy, Iberia, Latin America, Europe, North America, so they're fairly diversified.
[SPEAKER_01]: And they're a electric utility as well as the distribute natural gas as well.
[SPEAKER_01]: Take a look at return equity around 13% that's pretty solid.
[SPEAKER_01]: They do have a lot of debt, but that's typical for utility company that is consistent profits, consistent growth.
[SPEAKER_01]: Enterprise value to even around 7.5%.
[SPEAKER_01]: which is on the high end of its historical range, but money is flowing to these other businesses around the world.
[SPEAKER_01]: And overall, I like it, about $6 billion market cap, so it's $6 billion in free cash flow and 114 billion dollar market cap.
[SPEAKER_01]: I don't think their dividends are gonna go up, but I think it's gonna be maintained.
[SPEAKER_01]: And so as a global diversifier, I kind of like it.
[SPEAKER_01]: I'm going to give Enil, like a site at PlaySafe, ENL-A-Y is the over-the-counter symbol.
[SPEAKER_01]: Good one.
[SPEAKER_01]: Thanks for the call.
[SPEAKER_01]: Now, from time to time, we see questions via web form from the best-talk.com.
[SPEAKER_01]: Here's when the came in earlier says, BRKB, opinion, as it doesn't pay, dividend is suitable to keep in its taxable account.
[SPEAKER_01]: We'll listen daily, podcast, for feedback, thanks.
[SPEAKER_01]: So Berkshire historically is never paid a dividend.
[SPEAKER_01]: It's now under new leadership, war and stepped down at the end of last year.
[SPEAKER_01]: And over the past year, since that announcement, that you're stepping down, it's kind of meander.
[SPEAKER_01]: And so the market is basically saying that this premium that it's trading at,
[SPEAKER_01]: shouldn't be as high without Warren at the helm, because these new leaders are unproven.
[SPEAKER_01]: This cause Warren is great at investing as meaning is great at choosing his successor rate.
[SPEAKER_01]: And this has been underperforming the financial sector's whole because that's basically what it is to finance company because of Geico, yes it is other operations, but in general, to look at it.
[SPEAKER_01]: This has been a downtrend really since the fall of 2023, underperforming the financial space.
[SPEAKER_01]: So, I still don't love it at these prices, but, yes, it doesn't pay dividend.
[SPEAKER_01]: It is suitable for a taxable account.
[SPEAKER_01]: Would I buy it here?
[SPEAKER_01]: Not necessarily.
[SPEAKER_01]: The next and best talk, we're looking to this question.
[SPEAKER_01]: Do corporate stock buy back signal at the attractive entry points for investors?
[SPEAKER_01]: That story is for Monday, but for now I'm just inclined and I'm ready to take your calls any time and eight and eight nine you nine chart.
[SPEAKER_02]: There are a few things that make KPP financial special.
[SPEAKER_02]: One of them is parallel investing.
[SPEAKER_02]: This means they invest right alongside their clients.
[SPEAKER_02]: Here's how it works.
[SPEAKER_02]: When KPP financial makes a trade for their clients, just in client makes the same trade for himself and KPP.
[SPEAKER_02]: On the same day, at the same price, and same percentage.
[SPEAKER_02]: No front running, no special treatment.
[SPEAKER_02]: Learn more about Parallel Investing at Investalk.com.
[SPEAKER_01]: Domain focus point is about shipping stocks, logistics stocks, amidst the supply chain crisis that the Iran war is creating.
[SPEAKER_01]: The question for investors is this short lived.
[SPEAKER_01]: or the beginning of a structural reset.
[SPEAKER_01]: We know oil markets reacted instantly.
[SPEAKER_01]: Jump from WTI made 60s to 100 plus a barrel, still hanging around that level.
[SPEAKER_01]: Why?
[SPEAKER_01]: Because Iran accounts for 4% of global output and the flows from the straights of our moves are close to the 20% of global output.
[SPEAKER_01]: But what about the carriers?
[SPEAKER_01]: Transportation carriers, talking about truckers, less than truckload, intermodal, those type of sub-sectors in the transport space.
[SPEAKER_01]: For them, fuel is one of the largest variable costs.
[SPEAKER_01]: And diesel jumps 30, 50, 70% from pre-war levels.
[SPEAKER_01]: So this is instant margin compression.
[SPEAKER_01]: Some carriers did have fuel hedges,
[SPEAKER_01]: And that's helped a lot of them.
[SPEAKER_01]: But it's usually temporary, usually very short term.
[SPEAKER_01]: If this high fuel cost continues to drag on, well, that means they're going to have to eat it.
[SPEAKER_01]: And they're going to have to raise their prices for shipping and that feeds through to other sectors that use them to ship their goods from package food companies, to industrial names,
[SPEAKER_01]: Anybody, or any company that ships physical product, they are feeling the pressure, the pressure on their margins.
[SPEAKER_01]: Because transportation is downstream from the product production.
[SPEAKER_01]: Now, it's 20 to 21 million barrels of oil transit through the straight through the room is daily.
[SPEAKER_01]: And then you have those other goods that we've talked about.
[SPEAKER_01]: So often, I see other goods, but raw materials.
[SPEAKER_01]: from urea to copper to aluminum, et cetera.
[SPEAKER_01]: And now the straight-to-war moves are not there.
[SPEAKER_01]: They're finding other routes and oftentimes those routes are around the Cape of Good Hope, for example, as 10 to 14 days of transit time from Asia.
[SPEAKER_01]: Not only is it drive up costs, but that means less ships on the high seas.
[SPEAKER_01]: Why?
[SPEAKER_01]: Because they're spending more time,
[SPEAKER_01]: at anchor, or they exit the trade lane entirely, because it's just not economical.
[SPEAKER_01]: And then you have air freight.
[SPEAKER_01]: Aircargo is usually the last release valve we know this, you've seen this during COVID.
[SPEAKER_01]: But often it's unreliable, it's expensive, and you can only ship limited number of high priced products in this way.
[SPEAKER_01]: And then the cost of that is going up because the fuel is going up.
[SPEAKER_01]: So is this a temporary setback or something that is structural now?
[SPEAKER_01]: And I think that's still TBD.
[SPEAKER_01]: The industry has seen this before, talked about COVID, but you've seen things like the Red Sea attacks, port strikes, tariff shocks, and the list goes on.
[SPEAKER_01]: So the industry as a whole is not unfamiliar with this.
[SPEAKER_01]: The global container fleet is large, and they know how to be flexible.
[SPEAKER_01]: And so they find efficient ways to reallocate the capacity, but ultimately that's still reflected in prices.
[SPEAKER_01]: So right now, most of them are actually making more money because they're able to raise prices, they're using as a catalyst to raise prices.
[SPEAKER_01]: And prices are strong, signal that there is tightness in shipping around the world.
[SPEAKER_01]: And a lot of companies are,
[SPEAKER_01]: trying to get inventory in as fast as they can.
[SPEAKER_01]: That pulls forward a lot of demand.
[SPEAKER_01]: And we know when that happens, there's usually a hangover at some point, meaning, okay, the crisis resolves itself in some way, shape or form, inventories are now a bit, are filled up once, everything runs back online, and then rates drop.
[SPEAKER_01]: So it's not an area that you want to chase
[SPEAKER_01]: except for maybe, to me, when there is that hangover and these stocks do correct, understand that we are in an era over the next probably five to seven years of geopolitical volatility.
[SPEAKER_01]: And so while this war is someone unprecedented in modern times, it's probably not the last one in this period.
[SPEAKER_01]: So I do think in some ways, it'll be structural.
[SPEAKER_01]: It's pretty clear that we won't exit this crisis without some sort of toll being charged by Iran and Iran in this straight to our moves similar to the Suez Canal.
[SPEAKER_01]: So the rerouting may become structural in some way, shape, or form.
[SPEAKER_01]: And war risk is elevated.
[SPEAKER_01]: It creates another cost layer to shipping.
[SPEAKER_01]: So this is a good example of what I've been saying for basically since the beginning of COVID, which is we are in the era of inflation or inflationary environment.
[SPEAKER_01]: And certain sectors of the economy feel it more than others.
[SPEAKER_01]: And it needs to be part of your calculus when you're looking at sectors, at companies.
[SPEAKER_01]: How exposed are they to these types of crises?
[SPEAKER_01]: Those keep things going and move back, pivot back to the invest talk voice bank.
[SPEAKER_08]: Hey guys, this is Eric from Utah.
[SPEAKER_08]: I'm calling in about, take our BRO, brown and brown and insurance.
[SPEAKER_08]: I ended a while back and it was a great stock that I ended up doing pretty good with.
[SPEAKER_08]: Then they ended up acquiring, I think a business or two and the stock ended up just plummeting.
[SPEAKER_08]: It's very, very low right now and one of your assessment of it.
[SPEAKER_08]: I know you mentioned before some insurance companies getting into private equity.
[SPEAKER_08]: Didn't know what your evaluation would be on it or when might be a good price to pick it up don't want to catch a falling knife, but they do have a lot of skin in the game
[SPEAKER_08]: and as far as ownership of a lot of their shares and just want to your opinion.
[SPEAKER_08]: Thanks.
[SPEAKER_01]: Looking at BRO Brown and Brown, it is in a pretty steep downtrend.
[SPEAKER_01]: It's 52 week high as all the way up at $125 per share.
[SPEAKER_01]: Now down to $65 per share.
[SPEAKER_01]: Right now,
[SPEAKER_01]: This is just grinding lower week after week.
[SPEAKER_01]: And I'm trying to find major support.
[SPEAKER_01]: Down here, it's good, I guess it's getting the right amount on 60, would be the 100 month moving average.
[SPEAKER_01]: That could be interesting.
[SPEAKER_01]: But major support, we're on 50, 51.
[SPEAKER_01]: So I think there's more downside here.
[SPEAKER_01]: It's a broker for property and casualty and employment benefit insurance in 46 states.
[SPEAKER_01]: So it's a broker.
[SPEAKER_01]: So it shouldn't have a lot of these assets on its balance sheet.
[SPEAKER_01]: So I don't think it's private credit related.
[SPEAKER_01]: Seems to be more.
[SPEAKER_01]: It looks like earnings growth deceleration.
[SPEAKER_01]: Bid to high teens, maybe into the 20% range, last quarter earnings are only a 8%.
[SPEAKER_01]: And then all this year, all the next four quarters, earnings are only supposed to be up on average about five, six percent.
[SPEAKER_01]: So I think a lot of this is multiple contraction, I would say, the thing is there's the valuation reset.
[SPEAKER_01]: Generally, I like these at some point.
[SPEAKER_01]: Because what happens is, is it's a growth name, it's valued so aggressively.
[SPEAKER_01]: And then grow slows and the downtrend starts, and the weekends tend to drop shit.
[SPEAKER_01]: What I'd be looking for here is some sort of major capitulatory event that could be earnings, that could just be a bad headline, whatever, that has huge volume, somewhere in that 50 to 60 range.
[SPEAKER_01]: Now it's 65, so I think there's still more downside, but I'd be watching for that.
[SPEAKER_01]: And if I can get that, if I can see that and I have confidence that it's still going to grow that it's not gonna turn into negative.
[SPEAKER_01]: growth, right?
[SPEAKER_01]: Just that growth is slower.
[SPEAKER_01]: That's fine.
[SPEAKER_01]: But as long as it's still remains at a very profitable company, which is 1.3 billion dollar freecat in free cash flow, but a $22 billion market cap, only about $7 billion in that debt.
[SPEAKER_01]: So not too bad, the balance sheet looks pretty decent.
[SPEAKER_01]: pay as a dividend, paying a dividend can be sustained and grown over time.
[SPEAKER_01]: So I like what you're looking at.
[SPEAKER_01]: It's would be a name on the watch list, but the downtrend needs to, there needs to be a signal that's downtrend is over.
[SPEAKER_01]: I see nothing right now, like I said, at least until 60s, at 65 now, and it could even go as low as 50s.
[SPEAKER_01]: But someone that range, I'd be looking for signals of the major gap down in reversal, if some sort of spike in volume, something that tells me,
[SPEAKER_01]: The day he's being thrown out of the bath water, all the weekends are gone, and now it can reset itself and begin a new uptrend.
[SPEAKER_01]: But until then, just stays on the watch list.
[SPEAKER_01]: So on Friday's, we generally make time to fit in a quick rundown of some key bench buck numbers.
[SPEAKER_01]: So let me hit that list now.
[SPEAKER_01]: But to your yield, 3.78% of the clothes today,
[SPEAKER_01]: two weeks ago, it was at 3.93.
[SPEAKER_01]: So you said, you've seen a pretty decent drop in the two-year yield, kind of brings more balance.
[SPEAKER_01]: Frankly, what happened is, a couple of weeks ago, you had the expectations of the Fed would actually maybe high grades by year end.
[SPEAKER_01]: Now, it's a bit more neutral that by year end, actually the Fed's not going to do anything, not going to make a high grades or cut rates because of the inflationary pressures and the weak labor market.
[SPEAKER_01]: A 10-year yield, 4.3% the close today, two weeks goes that point, 4.42.
[SPEAKER_01]: So a bit of a drop there on mortgages, got a feed-in to mortgages a little bit.
[SPEAKER_01]: Gold prices, 4.72, okay, 4.782 per ounce, excuse me, that is a $250 one dollar increase over the past couple of weeks.
[SPEAKER_01]: And 32 weeks goes $330, sorry, $330 and $348.
[SPEAKER_01]: So big, big drop jumps since then.
[SPEAKER_01]: And about 250 weeks ago, there was only $1800.
[SPEAKER_01]: So pretty big move in just a few years.
[SPEAKER_01]: So over $76.50 cents announced, that's a $5.73 increase over the past couple of weeks.
[SPEAKER_01]: oil.
[SPEAKER_01]: Oil settled at $98.63 cents per barrel that's in WTI, but a 50 cent increase from a couple weeks ago.
[SPEAKER_01]: So we're in a choppy range for oil as the market kind of figures out.
[SPEAKER_01]: How to price the geopolitical
[SPEAKER_01]: volatility in this market.
[SPEAKER_01]: Then we look at natural gas.
[SPEAKER_01]: Sorry, not natural gas.
[SPEAKER_01]: National average for gasoline, regularly let let $4.13.
[SPEAKER_01]: It's like 15 cents, and 18 cents increase compared to two weeks ago.
[SPEAKER_01]: Looking back 217 weeks ago, just over four years, there was only $3.57 cents in our
[SPEAKER_01]: down if regular gas, five dollars and 91 cents per barrel per gallon, excuse me, seven set increase from two weeks ago.
[SPEAKER_01]: Thus compares a South Carolina, South Carolina, only three dollars and 87 cents per gallon today.
[SPEAKER_01]: And while we're at it, let's briefly mention the KPP premium newsletter was distributed tomorrow.
[SPEAKER_01]: This week in the Cape Fee Insights section, we discussed the ceasefire in Iran and the stock idea section we mentioned a global power, solutions company, and a global ingredients solution company.
[SPEAKER_01]: And in the portfolio management section, we touch on the avoiding value traps.
[SPEAKER_01]: So if you're interested in learning more, visit us at besttalk.com to subscribe and the newsletter comes out to your inbox every Saturday.
[SPEAKER_01]: Those in Vestock, I'm Dustin Klein.
[SPEAKER_01]: We have one goal here each and every week.
[SPEAKER_01]: Today, it's helped you achieve your own version of financial freedom, and I'll work continues after this final break.
[SPEAKER_01]: It's a good question as in now and eight and eight and ninety nine chart.
[SPEAKER_03]: Got a question for Justin or Luke?
[SPEAKER_03]: I've heard you say multiple times that you prefer shorter duration treasury barn.
[SPEAKER_03]: You're the best person to ask it.
[SPEAKER_03]: Can you explain to me why it is more advisable?
[SPEAKER_00]: The symbol is you and I T wondering what you thought about this read if it would be a good time to get in.
[SPEAKER_04]: Invest talk is ready 24-7.
[SPEAKER_08]: So I was thinking, is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest into better stocks?
[SPEAKER_06]: Just wanted to ask you about one stock that I'm looking at in Turkey, E.T.R.
[SPEAKER_06]: If you could run that down for me.
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[SPEAKER_01]: If you know anything about baseball in the 90s, and finance in the over the last 20 years,
[SPEAKER_01]: Bobby Boneya and Bernie made off.
[SPEAKER_01]: So let me tell you how they are connected.
[SPEAKER_01]: Bobby Boneya was a star in the late 80s, 90s.
[SPEAKER_01]: I remember that time growing up, watching Dodger Games.
[SPEAKER_01]: In 1989, Boneya was kind of past his prime.
[SPEAKER_01]: He was owed $6 million by the Metz.
[SPEAKER_01]: And he agreed to defer that $6 million
[SPEAKER_01]: almost thirty million dollars deferred.
[SPEAKER_01]: He depayed in twenty five annual installments over over one million dollars, every July 1st starting in 2011, 12 years later.
[SPEAKER_01]: And he's still collecting that check.
[SPEAKER_01]: It happens every July 1st called Bobby Boney a day.
[SPEAKER_01]: Now you might say, that was a great deal.
[SPEAKER_01]: But you run the numbers, it was an okay deal.
[SPEAKER_01]: If you invested $6 million in 1999 and got a 10% return, you would have $19 million by 2011.
[SPEAKER_01]: And it would be plenty enough to pay you a million plus every year for 25 years, because you get that initial a million plus, but you're investing the rest and you're continue to grow it, the principle.
[SPEAKER_01]: So the deal actually locked in about an 8% return for him at a very low risk.
[SPEAKER_01]: Metz fans, a lot of times are mad about it, but if you look at the numbers, it was a win for both of them.
[SPEAKER_01]: The Metz at the time didn't want to pay $6 million in Bobby Boney and wanted to defer that money and was fine.
[SPEAKER_01]: He made a lot of money.
[SPEAKER_01]: Didn't need it.
[SPEAKER_01]: Didn't want to risk that money and go bankrupt or anything like that.
[SPEAKER_01]: But if you're in reality, this is kind of like a pension.
[SPEAKER_01]: Basically, he did.
[SPEAKER_01]: He created a pension for himself.
[SPEAKER_01]: Baseball players, usually not the greatest that investing.
[SPEAKER_01]: You've seen that with many of them going bankrupt and fun with many other professional athletes across different sports.
[SPEAKER_01]: Now, if you look at what risks the exposed Bobby too, you'd actually love you to don't understand.
[SPEAKER_01]: There are risks here.
[SPEAKER_01]: There are basically three.
[SPEAKER_01]: Number one is longevity.
[SPEAKER_01]: Will he live the 2035 when the agreement ends?
[SPEAKER_01]: If he doesn't, well, he's not gonna collect on all of that money.
[SPEAKER_01]: Then there's inflation risk.
[SPEAKER_01]: time up until basically 2020 inflation was relatively muted, but now inflation is very high.
[SPEAKER_01]: Those $1 million checks today are about $500,000 in 1999 terms.
[SPEAKER_01]: Once again, that's with sub-dude inflation, but if that accelerates, obviously that million doesn't go as far as they used to.
[SPEAKER_01]: So any long-term contract like that
[SPEAKER_01]: Then there's counterparty risk.
[SPEAKER_01]: Will the Metz be around to pay?
[SPEAKER_01]: Now, baseball's still thing, and there's still making money into the pay.
[SPEAKER_01]: He also has a deal like this with the Baltimore Orals.
[SPEAKER_01]: That was in 2004, not as big, but still something.
[SPEAKER_01]: How does this all connect to Bernie Maydoth?
[SPEAKER_01]: Well, the reason that the Metz did this was because, at that time, they were invested with Bernie Maydoth.
[SPEAKER_01]: And so they took that $6 million, but they were going to pay Bernie made off.
[SPEAKER_01]: And they said, yeah, we'll guarantee you eight percent because we're getting 15, 20 percent from Bernie.
[SPEAKER_01]: Well, we know all know how that worked out.
[SPEAKER_01]: And it just shows you that you can crunch all those numbers and it might look great on a spreadsheet, but like anything in life and in investments,
[SPEAKER_01]: Nothing is guaranteed, nothing is certain, except for Bobby Booney a day.
[SPEAKER_01]: I'm Justin Klein, reminding you of that KP Financial's parallel investing, when you make a trade for our clients who make the same trade for ourselves, on the same day, same price, same percentage, no front-running, no special treatment, we invest a little right alongside our clients.
[SPEAKER_01]: Be sure the same risk and potential for success.
[SPEAKER_01]: Learn more by heading over to investtalk.com.
[SPEAKER_01]: And please tell your friends and family about a free podcast down those, which will find any time at iTunes or Spotify and check out our YouTube channels as well.
[SPEAKER_01]: Independent Thinking Shared Success is some best talk.
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