[SPEAKER_20]: This is a best-of-invest talk episode from KPP Financial.
[SPEAKER_20]: Listener questions will be answered and commentary provided by Justin Klein and Luke Guerrero.
[SPEAKER_18]: Just like a live call, Dan, in Walnut Creek, wants to talk about precious metals.
[SPEAKER_05]: Hey there, Justin.
[SPEAKER_05]: Thanks for taking my call.
[SPEAKER_05]: Of course, yes, it's kind of curious.
[SPEAKER_05]: It's since...
[SPEAKER_05]: I'm pushing the middle a little bit of the downturn right now.
[SPEAKER_05]: It's been a good time to buy.
[SPEAKER_18]: I do think we're getting to that point where it's going to be a nice buying opportunity.
[SPEAKER_18]: Now we still may see a little bit more down from here, but we're starting to enter the zone.
[SPEAKER_18]: And when I say the zone, it means very aware these stocks broke out.
[SPEAKER_18]: Broke out.
[SPEAKER_18]: Now, you're talking about gold and silver itself or the miners.
[SPEAKER_05]: The miners, mainly, they held on for a little while, but they're starting to
[SPEAKER_05]: down a little bit down too.
[SPEAKER_18]: Yeah, they pulled back the GDX hit the lowest level today since early January.
[SPEAKER_18]: So even with this large pullback, it's actually still up on the year.
[SPEAKER_18]: And it's approaching levels where you saw the peak back in October and you had a bit of a cell-off that refreshed everything went through a consolidation period and then broke out kind of being in the year.
[SPEAKER_18]: And that high in October was right around $85.
[SPEAKER_18]: GDX today closed at 88.
[SPEAKER_18]: So I think there's, there's support in this area.
[SPEAKER_18]: When you have a pivot, we call it a pivot point where it,
[SPEAKER_18]: hit high and reversed for a period of time and then it broke back above broke out of that pivot point oftentimes when it returns to that price after the subsequent sell off like you're skating now that is good support and so is there another two to three percent down on miners maybe over the next week or two absolutely I think that's certainly possible but this is that zone mid 80s is where you
[SPEAKER_18]: GDX or the subsequent miners within it, if you feel you need to up your position in precious metals.
[SPEAKER_18]: Now, a lot of people have a lot already, especially if this program, for a period of time, you probably have bought some precious metals and you own a lot, so maybe you're feeling a little pain in the near term, but clearly it's still in a broader uptrend and it's starting to enter that zone of
[SPEAKER_18]: adding to positions, especially if you may be trimmed your positions over the past a couple months ago when I was saying, you know, a sentiment was a bit brothy.
[SPEAKER_18]: Now it's starting to get reset and I think that's a good buying opportunity.
[SPEAKER_18]: Yeah, that's just, um, no, it's basically industrial rapid, when the input to industrial products is energy of some kind with its natural gas or oil, then it makes it less economical to produce those goods.
[SPEAKER_18]: And that means less money, or less demand for things like copper.
[SPEAKER_18]: There's also the stronger dollar that's an aspect here.
[SPEAKER_18]: There's a, a, a,
[SPEAKER_18]: Adorth of supply coming out of the Middle East as well.
[SPEAKER_18]: So there's a lot of reasons for this pullback in metals in general and copyright.
[SPEAKER_18]: I think it's just getting caught up in that.
[SPEAKER_18]: And I also think that we're close to getting to a point where it's a good place to pick up some names.
[SPEAKER_18]: Thanks for the call.
[SPEAKER_19]: Let's head over to the Invest talk YouTube comment section question bank to take a look at this question that came in yesterday.
[SPEAKER_19]: And it says you mentioned fertilizer and second beneficiary.
[SPEAKER_19]: Would you say petrochemical companies and grain, especially will do well moving forward?
[SPEAKER_19]: Supercycle or just medium term, ADM, CF at A and D E are examples.
[SPEAKER_19]: Thank you.
[SPEAKER_19]: Well,
[SPEAKER_19]: a little bit convoluted to be able to fully predict what second order effects will be of rising impact costs.
[SPEAKER_19]: We talk about this and we actually have a story we're going to be talking about a little later on.
[SPEAKER_19]: But how a lot of people are focusing on oil but the components that are making it fertilizer, a lot of that comes from the Middle East and passes through the straight of her moose.
[SPEAKER_19]: I have heard stories, been talking to people, farmers who are already worried about the cost of fertilizer and it's not just a cost thing, right?
[SPEAKER_19]: At a certain point, it becomes less about how much you have to pay and if you'll be able to pay at all, will there be supply for you to purchase?
[SPEAKER_19]: And so certainly a lot of these names have run up as you expect revenues to increase dramatically because of how important and critical a lot of these goods are.
[SPEAKER_19]: Great.
[SPEAKER_19]: Food.
[SPEAKER_19]: Things that need to be produced.
[SPEAKER_19]: The question no becomes.
[SPEAKER_19]: given that all this is known, are you priced at?
[SPEAKER_19]: Is it priced in already?
[SPEAKER_19]: And so for a lot of these companies, a lot of some of the ones you mentioned as well, given what we see in a run up, I would hesitate to buy in just yet.
[SPEAKER_19]: Thanks for watching.
[SPEAKER_10]: I'm interested in moving my 403B over to Roth IRA.
[SPEAKER_10]: I know that you guys have talked about this before, but can you just explain
[SPEAKER_10]: If my wife and I filed jointly, would I be then able to open up two raw Thatter A's one for me and one for her if we still fall under that annual income.
[SPEAKER_10]: Again, thank you so much and I look forward to hearing your response on the next podcast.
[SPEAKER_18]: Thanks for the call.
[SPEAKER_18]: Now, yes, simple, simply yes, you can open up to Roth IRAs and if you fall under the income limits, you both can contribute to them.
[SPEAKER_18]: That's beyond the rule over.
[SPEAKER_18]: That's completely separate.
[SPEAKER_18]: I believe there's new limits to leave it 7500 right this year.
[SPEAKER_18]: Let me know if you can confirm that for you 7,000 last year, might have gone up to 7500 this year.
[SPEAKER_18]: But when it comes to your 4 3b roll over, yes, you can roll that over and this goes with whether it's into a rough IRA or traditional IRA, it's usually pretty simple you call your provider of your 4 3b or 401k or whatever.
[SPEAKER_18]: and you say I want to do a roll over.
[SPEAKER_18]: They're going to issue you a check.
[SPEAKER_18]: Sometimes they'll let you send it directly to wherever that Roth or traditional IRA was open, that Schwab fidelity, whatever, and maybe they'll let you send it there.
[SPEAKER_18]: Most often they'll make you
[SPEAKER_18]: have it sent to your house, add just a record and then you'll mail it off to the broker.
[SPEAKER_18]: So, this kind of depends on which provider of the 401k it is.
[SPEAKER_18]: Now, remember rolling into a Roth IRA gives you tax consequences.
[SPEAKER_18]: So, whatever you roll over for 3b, that's tax deferred.
[SPEAKER_18]: Now, you might have a Roth 4 3b, I don't know if the check on that, some people have.
[SPEAKER_18]: a little bit of both a little bit of money in a Roth 401k and a traditional 401k, and so you want to separate those out based on account types.
[SPEAKER_18]: But it makes sure that if you roll it into a Roth IRA, that you're comfortable paying that tax in that particular year.
[SPEAKER_18]: More the the better.
[SPEAKER_18]: course of action for the vast majority of people is to roll that old through at four or three v or four or one k into a traditional IRA.
[SPEAKER_18]: No task consequences opens you up to as many investment options pretty much as you want, and then at a future date then you could roll it over until a Roth IRA.
[SPEAKER_18]: Typically that is the time between retiring and taking Social Security.
[SPEAKER_18]: That's where kind of planning comes in to something we do for clients, it's kind of map out that Roth conversion strategy so that you can avoid big RMDs.
[SPEAKER_18]: Once you get to RMD age, make sure that you don't hit a Medicare supplemental search charge, all of that you want to make sure you try to avoid that.
[SPEAKER_18]: So Roth conversion strategy is smart, but make sure you do it when you're in a low tax prep, not in a high tax prep.
[SPEAKER_20]: hope that helps.
[SPEAKER_20]: You are listening to an invest talk best of call or questions compilation program.
[SPEAKER_20]: Your comments and questions are always welcome call anytime 88899 chart that's 88899 CHART
[SPEAKER_21]: This is a special in Vest Talk, best of caller questions, compilation program.
[SPEAKER_21]: Remember, the Invest Talk phone lines never close.
[SPEAKER_21]: Please call with questions.
[SPEAKER_21]: 888-99 chart.
[SPEAKER_04]: My question is about a third stocks.
[SPEAKER_04]: If you can shine a little bit of light on them, I'm trying to produce like an income stream.
[SPEAKER_04]: If it's a good idea, I just hear general thoughts.
[SPEAKER_04]: I'll be looking forward to your answer.
[SPEAKER_04]: Thank you.
[SPEAKER_19]: Okay, well, preferred stocks are a class of shares that operates a bit different from common stocks, right?
[SPEAKER_19]: Typically, people want to invest in preferred stocks because they have a bit of an income focus.
[SPEAKER_19]: They typically pay higher fixed dividends than common stocks.
[SPEAKER_19]: And often have some pretty attractive yields anywhere from five to a percent.
[SPEAKER_19]: And so that makes them pretty attractive for these steady cash flow seekers.
[SPEAKER_19]: but that also changes where they are as well with respect to their position in the capital stack.
[SPEAKER_19]: They sit above common equity, meaning if a company goes bankrupt, you would get some claim on assets before common stock shareholder's do, but they are below bonds as well.
[SPEAKER_19]: Now understanding that they are long duration assets.
[SPEAKER_19]: Right?
[SPEAKER_19]: Most preferred are going to be rate sensitive when interest rates rise, prices can fall pretty sharply even if the issuer is financially healthy.
[SPEAKER_19]: There's also the call risk reinvestment risk.
[SPEAKER_19]: Many issues are callable, meaning companies can redeem them if rates fall forcing investors to reinvest at lower.
[SPEAKER_19]: You know, so they gotta worry about credit.
[SPEAKER_19]: You gotta worry about sector concentration.
[SPEAKER_19]: They work best as more of a supplemental income tool, not really a core holding.
[SPEAKER_19]: It's ideal for those investors who are seeking yield while, you know, taking a moderate risk.
[SPEAKER_19]: But not really for those who need principal stability inflation protection or really even liquidity because they tend to be far less liquid.
[SPEAKER_18]: Let's go talk to Cini in California.
[SPEAKER_18]: Let's talk about Bitcoin.
[SPEAKER_01]: Hi, good evening, Justin.
[SPEAKER_01]: I listen to your forecast when possible.
[SPEAKER_01]: Thank you very much for doing this.
[SPEAKER_01]: Quick question on Bitcoin as what's your opinion and a kind of High level guidance Is it a good good time to enter BTC iPhone USD Bitcoin USD?
[SPEAKER_18]: Well, I've been saying this for better part of six months now that
[SPEAKER_18]: Bitcoin, it was losing momentum and it's chart was starting to look a bit bare, especially when it couldn't break out above the 120, 125 range, it hit that range a few times and just died rather quickly.
[SPEAKER_18]: And when you see that happening, it looked at charts for 25 plus years now and when it hits a certain level and they just
[SPEAKER_18]: cells off considerably that is a sign of momentum ending or weaning and that obviously followed through to the downside in October and consolidated through November and December and into mid-January and then broke down once again.
[SPEAKER_18]: And I said six months, like I said in the last six months, I said, the bear market is likely to go until 2027.
[SPEAKER_18]: It will find likely a bottom in 2027 where that is I do not know.
[SPEAKER_18]: We shall see, I very well could go below 50,000 this year.
[SPEAKER_18]: And I would say it's likely that it goes below 50,000 at some point.
[SPEAKER_18]: Now, again, it continued to bounce here between right now at 70, you could get up to maybe 80,000, 85,000.
[SPEAKER_18]: I think that's possible.
[SPEAKER_18]: But beyond that, I don't think that's very likely.
[SPEAKER_18]: So maybe it's a short-term trade, but it's very risky because it could
[SPEAKER_18]: over the next three, six, nine months.
[SPEAKER_18]: And ultimately, I think these down cycles, these bear markets, these winters in Bitcoin, typically last, typically create about a 70 to 80% drop from the high.
[SPEAKER_18]: And if the high was 120, 125, you're talking about,
[SPEAKER_18]: $25,000 to $35,000 in that range at the bottom, that's probably where it eventually bottoms.
[SPEAKER_18]: So no, I do not think that this is a time to buy Bitcoin, you know, just maybe a short-term trade, but it's very high risk.
[SPEAKER_18]: I wouldn't even consider touching it in $296.
[SPEAKER_20]: Invest talk, tell your friends they can listen live, download the free podcast, or watch Invest Talk on our YouTube channel.
[SPEAKER_17]: Hi, I wanted to know if you've been such apps as the cash app for investments is a legit way to get into the game of investing.
[SPEAKER_18]: It varies mostly by what app you're talking about.
[SPEAKER_18]: I'm not a huge fan of the apps when it comes to investing.
[SPEAKER_18]: Now, they can be good when it comes to saving.
[SPEAKER_18]: But the problem is, you need to be educated when you're investing.
[SPEAKER_18]: And most of these apps aren't really educating you.
[SPEAKER_18]: They're just getting you bought into their ecosystem and wants you making trades.
[SPEAKER_18]: And they don't have, usually the full features of a larger brokerage, like a
[SPEAKER_18]: trob or fidelity or e-trade, etc.
[SPEAKER_18]: So the cash app, they don't offer options, bonds, mutual funds, so mainly just stocks, ETFs.
[SPEAKER_18]: And that can be fine, but are there any other resources they give you?
[SPEAKER_18]: Research?
[SPEAKER_18]: That's the question.
[SPEAKER_18]: So these can be good to transfer assets or transfer money, they can be good to save in some sort of way, but you should always
[SPEAKER_18]: be actually investing on a real brokerage platform.
[SPEAKER_18]: I don't even consider Robinhood a great investing platform.
[SPEAKER_18]: It's they gamify everything to make it look cool and fun, but it's a more serious endeavor.
[SPEAKER_18]: And so I would always recommend the big brokerage firms because you're going to get a lot more of better customer service.
[SPEAKER_18]: You have more flexibility and your investment options, etc.
[SPEAKER_20]: You are listening to an invest talk best of caller questions compilation program.
[SPEAKER_20]: Your comments and questions are always welcome.
[SPEAKER_20]: Call anytime 88899 chart.
[SPEAKER_20]: That's 88899 CHART.
[SPEAKER_20]: You are listening to an invest talk, best of call or questions, compilation program.
[SPEAKER_20]: Your comments and questions are always welcome.
[SPEAKER_20]: Call anytime, 88899 chart.
[SPEAKER_20]: That's 88899 CHART.
[SPEAKER_18]: Let's go with a YouTube comment question.
[SPEAKER_18]: The divine feeling says, really appreciate your weekly updates.
[SPEAKER_18]: At the 154 mark you said clearly, we are in some trouble.
[SPEAKER_18]: Can you please elaborate?
[SPEAKER_18]: Are we clearly in trouble or clear on a path to the trouble?
[SPEAKER_18]: Well, you're definitely what's your definition of trouble.
[SPEAKER_18]: With this question, it's about as my weekly overview of markets.
[SPEAKER_18]: 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_18]: It's certainly bifurcated, as I've said many times, you see a lot of industries doing very, very well, others not so much.
[SPEAKER_18]: 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_18]: 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_18]: How does President Trump say face while also calming the crisis?
[SPEAKER_18]: Game theory says this will probably get worse before it gets better.
[SPEAKER_18]: So are we in trouble?
[SPEAKER_18]: Yeah.
[SPEAKER_18]: I think we're in trouble.
[SPEAKER_18]: Are we on the path to trouble?
[SPEAKER_18]: We're probably on the path to more trouble.
[SPEAKER_18]: But that doesn't mean the markets go to crash overnight or anything like that.
[SPEAKER_18]: This has been pretty orderly sell-off.
[SPEAKER_18]: But you have to call a spade a spade.
[SPEAKER_18]: We are in, we're in the fourth turning people, been talking about it for a number of years, fantastic book and really hits on the cycle that we are in.
[SPEAKER_18]: 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_18]: But crisis doesn't always look like OE.
[SPEAKER_18]: Crisis can be an inflationary crisis that can teach the push asset prices and hard assets higher.
[SPEAKER_18]: That is an outcome that you have to leave open as a possibility.
[SPEAKER_18]: If you don't, well, then you don't have a silver outlook about what's happening.
[SPEAKER_18]: As Lynn Alden says, if nothing stops this train, 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_02]: I have a question about stock valuation, particularly regarding the P ratio.
[SPEAKER_02]: Are there simple rules or formulas that you guys use both with the P ratio along with one or two other metrics
[SPEAKER_02]: For instance, I was wondering if consistent 10% earnings growth could justify a PE ratio of 10.
[SPEAKER_02]: I know this is over simplistic, but I'm curious if you have any guidelines to initially assess a stock before diving into a more detailed analysis.
[SPEAKER_02]: I would appreciate any advice you could give.
[SPEAKER_02]: Thank you very much.
[SPEAKER_19]: Yeah, it's a great question.
[SPEAKER_19]: So, you know, not all P ratios are made the same.
[SPEAKER_19]: We talked about that all the time.
[SPEAKER_19]: You have to look at it on a comparative basis.
[SPEAKER_19]: How does it compare to where it's been historically?
[SPEAKER_19]: How does it compare to other companies within that industry?
[SPEAKER_19]: But at its core, multiples are telling you something.
[SPEAKER_19]: high multiples can intrinsically give you the type of sales revenue price to sales, the amount of sales growth that is expected to happen to justify those prices.
[SPEAKER_19]: And so when you look at something that is trading at 60, 70 times price to forward looking earnings, you have to say to yourself, does this?
[SPEAKER_19]: is this feasible that you're supposed to project for the next five years, 25, 30% growth over time.
[SPEAKER_19]: Either way, when you're talking about valuation, there's a lot that goes on there, right?
[SPEAKER_19]: Because when valuation at its core is trying to discount future cash flows.
[SPEAKER_19]: And there's more that goes into that than just what is going on with the company internally.
[SPEAKER_19]: So all of these multiples are not the be all end all of analyzing stock valuation, but,
[SPEAKER_19]: From a comparative perspective, they can at least give you a little guidance on where to start your thinking at how much a company is worth.
[SPEAKER_08]: Yeah, this is Mark from San Diego.
[SPEAKER_08]: I got a question for the show.
[SPEAKER_08]: I have about 3% of my portfolio and commodity, including the oil, gold, silver, and of course play up the modest years ago.
[SPEAKER_08]: I did trim off the gold minor, they got a really real high.
[SPEAKER_08]: This time I planned to retire in the next four years and I have 30% of my portfolio, my wife's higher-man account, of course she has none because she's worked in place.
[SPEAKER_08]: I was wondering if I needed to slowly start building up a 20 or 30% additional exposure to account for her account.
[SPEAKER_08]: So in other words, her account and my account fit together for both of us in the card
[SPEAKER_08]: So your thoughts for future retirees, let's percentage when you combine the two spouses together, relationship, commodity marketplace.
[SPEAKER_18]: Thank you, father.
[SPEAKER_18]: Well, the general thought is good here is,
[SPEAKER_18]: understanding your flow allocation with all of your assets, not just, you know, you're with that one account, it's looking at your wife's money as well and looking to big pick at the big picture of something we do when we do portfolio reviews for listeners is put all of their assets into our system and what does it look like in aggregate, you know, from a sector perspective, from an asset allocation perspective, meaning stocks, gold.
[SPEAKER_18]: commodities, bonds, et cetera.
[SPEAKER_18]: And 30% of this environment, I think, is perfectly fine.
[SPEAKER_18]: I would certainly want to be building up the exposure elsewhere, probably more on pullbacks, but I would be looking to add to that.
[SPEAKER_18]: Now, you can give me numbers.
[SPEAKER_18]: And so I would really need to see, what is the total value?
[SPEAKER_18]: It's 30% in one account, but what if you combine everything, as it's still 30, is a 20, is a 10?
[SPEAKER_18]: I don't know.
[SPEAKER_18]: So really, you should be building it up, but if you want to do a portfolio view,
[SPEAKER_18]: Keep financial.com or invest talk.com and then submit your statements, we'd run a full analysis and we can tell you what your real true exposure is to the commodity space.
[SPEAKER_20]: This is an invest talk best of caller questions compilation program.
[SPEAKER_20]: Your comments and questions are always welcome, call anytime 88899 chart that's 88899 CHART.
[SPEAKER_18]: at KPP Financial.
[SPEAKER_18]: Accountability means more than advice.
[SPEAKER_18]: It means we invest alongside you.
[SPEAKER_18]: Through our parallel investing approach, when we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.
[SPEAKER_18]: same day, same price, same percentage.
[SPEAKER_18]: If your portfolio moves, ours does too.
[SPEAKER_18]: That is alignment, that is transparency.
[SPEAKER_18]: That is the KPP difference.
[SPEAKER_18]: Visit investtalk.com to get your free portfolio review.
[SPEAKER_21]: This is a special in Vest Talk, best of caller questions, compilation program.
[SPEAKER_21]: Remember, the Invest Talk phone lines never close.
[SPEAKER_21]: Please call with questions, 888-99 chart.
[SPEAKER_13]: Hi, Duncan from New York.
[SPEAKER_13]: Thank you for all that you do.
[SPEAKER_13]: I actually have a question about alternatives in Vest scene.
[SPEAKER_13]: Maybe this question is probably good for the listeners right now.
[SPEAKER_13]: But back during COVID,
[SPEAKER_13]: When everybody was getting a lot of money from the federal government in the state, when I was unemployed, I had some extra cash on the side that I decided to put into alternative medicine, which was something called ground floor, they are just basically a private market where you invest into real estate funds and you get a consistent investment back.
[SPEAKER_13]: Recently, I want to figure out how I can take that money out and I sent them a message and they basically said, well, we can't give you it close.
[SPEAKER_13]: You can settle your shares to somebody else and then you can get that cash back.
[SPEAKER_13]: So, I feel like I've kind of been screwed, but I also have been educated and that's totally my fault.
[SPEAKER_13]: But with your knowledge, is this the only way for me to get my money that invested by selling my shares to get it out?
[SPEAKER_13]: Ground floor did say that if they eventually go public then I'm more likely to get the money back in the traditional way of just selling the stock.
[SPEAKER_13]: I'm just wondering that like what if I end up just being in my semides they would still technically have the money like do I have to wait until they get into public stock market so just wondering and thank you for everything have a great day.
[SPEAKER_13]: Bye.
[SPEAKER_18]: Well, thanks for the call and start your dealing with this, but this is an education for every single invest talk listener out there.
[SPEAKER_18]: Don't let this be you.
[SPEAKER_18]: This is why we say private investments are not better than public investments.
[SPEAKER_18]: say that 10 times over, look yourself in the mirror and tell that to you because you will be pitched a private investment, whether it's ground floor, which I don't even really know what this is.
[SPEAKER_18]: It just looks like a private, re-platform that you can go invest in.
[SPEAKER_18]: They're going to promise you these big returns.
[SPEAKER_18]: But in return, you get illiquidity.
[SPEAKER_18]: Which means that if you ever want to sell this asset, you need to find somebody that will buy it from you, third party, and you're going to take a massive discount, 20, 30, 40, maybe even 50% from what you actually put in.
[SPEAKER_18]: That's how these things work.
[SPEAKER_18]: Now, in the Rosie's environment, if they go public, bubble, blah, blah, could you get your money back?
[SPEAKER_18]: Yeah, maybe, but probably not.
[SPEAKER_18]: You're already seeing this with a big boy's ground floor.
[SPEAKER_18]: That looks like a little tiny guy.
[SPEAKER_18]: I don't even know, honestly, I haven't seen, heard much about them.
[SPEAKER_18]: You got duped, and a lot of people did, even the Morgan Stanley's in Maryland of the world that put them in private credit and private equity funds.
[SPEAKER_18]: which are not that much different, and you see they're being gated, and they're not able to get their money out.
[SPEAKER_18]: This is a lesson to all of you out there.
[SPEAKER_18]: If you own private equity, if you own private credit, if you have money in, ground floor or fund rise or any of these online platforms, this is just all private investments that are very illiquid and you need to pull tea.
[SPEAKER_18]: private investments are not better than public markets.
[SPEAKER_18]: Bottom line.
[SPEAKER_18]: Now on an individual basis, if you want to invest in an individual company, you know the leader, you know the business, you know you want to help seed and be a venture capitalist.
[SPEAKER_18]: Great.
[SPEAKER_18]: I think those can be great investments.
[SPEAKER_18]: But just to
[SPEAKER_18]: throw money into a fund that you know nothing about who's managing and what the fees are, what the liquidity provisions are, etc.
[SPEAKER_18]: That's not smart.
[SPEAKER_18]: I've been saying this for years.
[SPEAKER_18]: It was the most obvious thing of all time.
[SPEAKER_18]: And this collar is, unfortunately, a victim of that.
[SPEAKER_18]: He's learning the hard way.
[SPEAKER_18]: Don't learn the hard way.
[SPEAKER_18]: This is the easy way I'm telling you the easy way.
[SPEAKER_18]: Never invest in private funds, private equity, private credit, private real estate.
[SPEAKER_18]: It is not better than what you can find in the public markets.
[SPEAKER_18]: This is only for the Charlotton's better pitching this stuff.
[SPEAKER_18]: that are collecting fees on this stuff, that are collecting commissions on this stuff.
[SPEAKER_18]: It is not better for you, the investor.
[SPEAKER_18]: I have to hammer this home to every single and best talk listener out there.
[SPEAKER_18]: And you need to send this episode to every single one of your friends and family members that may possibly be pitched this in the future.
[SPEAKER_18]: that may own this stuff.
[SPEAKER_18]: It is not better.
[SPEAKER_18]: That clearance simple.
[SPEAKER_18]: Eliquid, you cannot get your money out.
[SPEAKER_18]: You don't know what it's really worth.
[SPEAKER_18]: You don't know if you're gonna get paid from it.
[SPEAKER_18]: Stay away.
[SPEAKER_18]: Take your bath, learn your lesson, move on.
[SPEAKER_21]: Invest talk is ready 24-7 for your finance and investment questions.
[SPEAKER_00]: I'm hoping you'll give me your cake on Oremat Technologies, ORA.
[SPEAKER_14]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest in the better stock?
[SPEAKER_21]: Don't forget to call, Invest Talk, 888-99, chart.
[SPEAKER_09]: Hey, you're Justin, Jake here from North Carolina.
[SPEAKER_09]: It's been a question about your investment philosophy overall, and you apply that to your clients and investment accounts.
[SPEAKER_09]: The firm that I work for uses the business cycle as our framework for when to buy, when to sell, what to buy, what to sell.
[SPEAKER_09]: That was just curious as to the degree of which you use the business cycle to inform you of your investment decisions, your managed client accounts, or otherwise.
[SPEAKER_09]: Thank you very much looking forward to hearing on the show.
[SPEAKER_19]: You know, this is such an important question because for anybody there investment philosophy underpins everything they do not just for themselves, but for their clients as well.
[SPEAKER_19]: And I really appreciate the color asking that because this really gets to the core of what we do at KPP.
[SPEAKER_19]: Now you mentioned the business cycle and that's actually a great starting point because we incorporate that thinking to, but our philosophy it goes a bit deeper.
[SPEAKER_19]: We believe.
[SPEAKER_19]: And we think the evidence is shown that successful long-term investing comes down to three things, understanding where we are in the economic cycle, understanding high quality businesses trading at reasonable valuations, rather identifying them, and then having the discipline to stay the course.
[SPEAKER_19]: In a KVP, we're what I'd call these evidence-based investors.
[SPEAKER_19]: We don't chase hot tips.
[SPEAKER_19]: We don't try to time the market on a day-to-day basis.
[SPEAKER_19]: And we try to not let emotions drive decisions.
[SPEAKER_19]: What we do is we look at the data.
[SPEAKER_19]: We look at earnings-transcender dynamics, factor exposures.
[SPEAKER_19]: Yes, where we are in the business cycle.
[SPEAKER_19]: And what market price action is telling us, to help us build diversified portfolios, that are positioned for what's ahead, what's ahead,
[SPEAKER_19]: and not just what's happening right now.
[SPEAKER_19]: So in practice, what that looks like is we're building portfolios that are tilted towards quality, they're tilted towards value, where the data supports it, we're mindful of one of the things that people don't take it a consideration when they build their portfolios risk management.
[SPEAKER_19]: and we're constantly stress testing our assumptions.
[SPEAKER_19]: We're not trying to hit home runs on pie in the sky.
[SPEAKER_19]: Companies were trying to compound wealth over time by avoiding those big mistakes by staying disciplined through the full cycle.
[SPEAKER_19]: So to sum it up.
[SPEAKER_19]: I would say we let the evidence guide us.
[SPEAKER_19]: We stay independent so we can stay objective.
[SPEAKER_19]: And we focus on long-term wealth building rather than short-term noise.
[SPEAKER_18]: Thanks to the call.
[SPEAKER_18]: Those keep things moving and pivot back to a question from our anytime listener line.
[SPEAKER_11]: Hi, and that's all.
[SPEAKER_11]: I had the question about buying into a credit card company.
[SPEAKER_11]: So Visa, Master Carter, Eric, and Express were the three that were on my watch list.
[SPEAKER_11]: So my question is, do you have a preferred from those three company that you would allocate money towards or do you feel like it could even be good just $2 cost average into the three of them evenly, not do some like super high weight in my portfolio, but just to have some exposure.
[SPEAKER_11]: I just see them as a, I guess, triopoly and also with the expenses at the cards charge, it just seems like they'll always have like that income.
[SPEAKER_11]: American Express.
[SPEAKER_11]: I know they charge higher fees to merchants, but they also don't have as many people probably who qualify for the car Just because it requires a higher credit score if that has any influence on your decision to my first question I know that's a lot, but I'm very interested to see what you guys say so I'll listen on the show and thank you as always
[SPEAKER_18]: Well, first off, I like that you're looking at quality companies, quality businesses, but there are risks here, and there's a big difference between a visa to mastercard and an American express.
[SPEAKER_18]: What you have to understand is that mastercard and visa, those are not credit card companies.
[SPEAKER_18]: Those are credit card processing companies, very, very different.
[SPEAKER_18]: They make money on swipe fees, on debit fees, that's how they make money.
[SPEAKER_18]: Now, Americans press also makes money on that, but as you said, they lend money.
[SPEAKER_18]: Basta card and visa do not take credit risk.
[SPEAKER_18]: They do not lend to customers.
[SPEAKER_18]: Banks lend to customers.
[SPEAKER_18]: Synchronies lend to customers.
[SPEAKER_18]: So if I think lends to customers, those are credit card companies that actually take credit risks to a very different businesses.
[SPEAKER_18]: American Express historically has a pretty nice business of doing a little bit above, getting the swipe fees as well as charging interest on the credit cards they didn't have a higher quality of customer.
[SPEAKER_18]: So in rougher times they have less defaults.
[SPEAKER_18]: They don't tend to lend to low credit customers.
[SPEAKER_18]: So somewhat different.
[SPEAKER_18]: Now when you're stepping back and you're looking at all three and the swipe fees,
[SPEAKER_18]: what I worry and I think you're seeing this in the chart is that will the shifts in crypto and stablecoins cause more and more people to move away from those transaction rails.
[SPEAKER_18]: Will AI start to utilize and that's the kind of the current consensus it could change, obviously, is that
[SPEAKER_18]: AI will start to transact on with stable points and on Crypto Networks versus a VCR Mastercard or American Express.
[SPEAKER_18]: And it gets being priced in the markets.
[SPEAKER_18]: Now, that's a big question.
[SPEAKER_18]: You have to answer yourself.
[SPEAKER_18]: If you think that third tri-opily, as you said, it will maintain, then you want to invest that's fine to invest in these.
[SPEAKER_18]: You want to be fading this decline in these names.
[SPEAKER_18]: I would pick American Express because of that higher profitability, that diversity,
[SPEAKER_18]: of the three.
[SPEAKER_18]: But frankly, I wouldn't buy any of them because I do think over time their premiums that the market is pricing on these names is too high and it's going to come down to have to come down a lot for me to take on the risk of their payment networks being distributed over time.
[SPEAKER_18]: So I'm passing on all three.
[SPEAKER_21]: Invest talk is ready 24-7 for your finance and investment questions.
[SPEAKER_21]: My five-year-old son and I listen to your podcast every night so thank you very much for putting it on.
[SPEAKER_21]: Justin Klein is here and ready to tackle your questions.
[SPEAKER_14]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest in the better stock?
[SPEAKER_12]: I'm wondering what you thought about this read is it would be a good time to get in?
[SPEAKER_15]: I wanted to pick your brain about Apple.
[SPEAKER_15]: What did you think about their earnings call?
[SPEAKER_15]: Is it a good time to pass for my position?
[SPEAKER_21]: Don't forget to call.
[SPEAKER_21]: Invest talk.
[SPEAKER_21]: 888-99 chart.
[SPEAKER_18]: Let's pivot back to another voicemail question now.
[SPEAKER_06]: Just in a loop, this is Nick from New York, a long time listener.
[SPEAKER_06]: I just kind of had a question today about 401 slash 457.
[SPEAKER_06]: So what I was curious about is, uh, I happened to find, or I have most of my money in a target dated fund through my employer.
[SPEAKER_06]: And, you know, the options and the profiles that you can select from just or not very diverse.
[SPEAKER_06]: So I was just curious, like, is there really anything that you can do?
[SPEAKER_06]: and put it somewhere else.
[SPEAKER_06]: But it sounds like that there's no real good way to do that without taking like a major tax beating.
[SPEAKER_06]: So am I kind of just like stuck in my account for a long period of time?
[SPEAKER_06]: I just I have 21 years left until I retire.
[SPEAKER_06]: Thank you for your help.
[SPEAKER_06]: I appreciate the advice.
[SPEAKER_06]: We'll be listening on the show.
[SPEAKER_06]: Thanks.
[SPEAKER_18]: Well, if you ever move jobs, then that's when you roll that over into an IRA.
[SPEAKER_18]: Does number one, I don't know if you have any plans for that or not, but something you always want to have at the radar, that's kind of the upside of moving jobs is getting that money out of your 401k, 457, et cetera, and into an IRA where you have maximum flexibility.
[SPEAKER_18]: Those number one.
[SPEAKER_18]: Number two, a lot of 401k plans have the ability to opt into was called a self-directed brokerage account.
[SPEAKER_18]: They love and call it something different, but effectively that's what it is.
[SPEAKER_18]: It goes into an account is usually a large broker, a fidelity or Schwab that is the custodian, and you get a login.
[SPEAKER_18]: That's what we have at KPP for our clients.
[SPEAKER_18]: It opts into fidelity and we have a fidelity login and looks like a normal fidelity brokerage account, but it's a 401k.
[SPEAKER_18]: And now we can invest in whatever we want, individual stocks, ETFs, other mutual funds, etc.
[SPEAKER_18]: So I would look into that potential with your 401k or 457.
[SPEAKER_18]: And if you don't have that opportunity,
[SPEAKER_18]: Remember, your HR department, your CFO, they have a fiduciary duty to you as the employer to put together a plan that's in your best interest.
[SPEAKER_18]: So if the options are too limited for you, if you just have targeted funds and a couple of index funds,
[SPEAKER_18]: You can argue that that is not good enough.
[SPEAKER_18]: You need more options.
[SPEAKER_18]: You need better options.
[SPEAKER_18]: And so you want to go to them and say, either give me more mutual fund options or give me a self-directed account that I can opt into and make trades make individual by individual securities.
[SPEAKER_18]: Thanks for the call.
[SPEAKER_11]: Hi, I'm Bustock.
[SPEAKER_11]: I can no longer contribute to my Roth IRA because of income limits.
[SPEAKER_11]: And our did research, it looks like I can contribute to a traditional IRA, the maximum amount.
[SPEAKER_11]: Which is what I would plan to do and then convert it immediately.
[SPEAKER_11]: And by doing so there would be no consequences I wouldn't pay any additional tax other than what I've already paid on that income.
[SPEAKER_11]: That was post tax that I contributed to the account.
[SPEAKER_11]: I know you guys have talked about doing Roth conversion later closer to retirement and how that makes sense for most people But this research that I did makes it seem like I could do a back door Roth, which might be different and I'm hoping that you guys can clarify that I hope that makes sense.
[SPEAKER_11]: And I'll listen for the answer on the shelf thing
[SPEAKER_18]: The simple answer is, yes, that's exactly what a backdoor Roth is.
[SPEAKER_18]: You make a non-deductible IRA contribution, and then you immediately convert it to a Roth IRA.
[SPEAKER_18]: In fact, I just did this for myself last week, for my 2426.
[SPEAKER_18]: Now, the caveat here is that IRA, it pretty much needs to be empty.
[SPEAKER_18]: So,
[SPEAKER_18]: you need to either convert it all already or maybe just you don't have an IRA, right?
[SPEAKER_18]: You just, you have an open that I have an IRA open but there's nothing in it.
[SPEAKER_18]: So every year I can make my contribution and then it's converted to my Roth.
[SPEAKER_18]: So that's really the way to do it.
[SPEAKER_18]: There are, I think, a call like the pro-ratt rule or something like that.
[SPEAKER_18]: But effectively, it means that that IRA needs to be empty.
[SPEAKER_18]: So you have to convert all of it or any IRA.
[SPEAKER_18]: You have to not have any traditional IRA money at all.
[SPEAKER_18]: That helps.
[SPEAKER_20]: You are listening to an invest talk best of call or questions compilation program.
[SPEAKER_20]: Your comments and questions are always welcome.
[SPEAKER_20]: Call anytime.
[SPEAKER_20]: 88899 chart.
[SPEAKER_20]: That's 88899CH-A-R-T.
[SPEAKER_20]: This is an Invest talk best of caller questions compilation program.
[SPEAKER_20]: Your comments and questions are always welcome, call anytime 88899 chart that's 88899 CHART.
[SPEAKER_18]: Let's keep things moving and drop in another listener question now.
[SPEAKER_03]: Hello, I'm Beth Talk.
[SPEAKER_03]: This is George calling from Boston.
[SPEAKER_03]: I had a question in regards the cover call strategy that you guys run for your clients.
[SPEAKER_03]: I always hear you guys mention it.
[SPEAKER_03]: 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, especially if a client wants to keep the stock
[SPEAKER_03]: their stock and just keep collecting that premium.
[SPEAKER_03]: Thank you all here on the podcast.
[SPEAKER_18]: Great question.
[SPEAKER_18]: And you're right.
[SPEAKER_18]: We do run a cover call strategy and works really well.
[SPEAKER_18]: It's called the equity income plus is what we call it.
[SPEAKER_18]: And this is the conundrum that a lot of covered call writers have and the average person struggles to conceptualize.
[SPEAKER_18]: how to deal with it, which is when you're selling a cover call, when you own the underlying, typically you're selling out of the money somewhere in the 5, 10, maybe 15% out of the money, collecting your premium.
[SPEAKER_18]: But sometimes stuck into you's go up and it's a good thing you're still making money.
[SPEAKER_18]: It's just your call option writing, limited that upside, some, and people freeze and they don't know what to do.
[SPEAKER_18]: But the solution is rather simple.
[SPEAKER_18]: That is a separate position that call option.
[SPEAKER_18]: You can always buy it back and resell another option at the later date.
[SPEAKER_18]: And you can roll it with what we call it rolling.
[SPEAKER_18]: So for example, this is option X week.
[SPEAKER_18]: which means on Friday, traditional monthly options will expire.
[SPEAKER_18]: We are in the process and we've already rolled a good amount of them from our March expiration all the way out to the April expiration.
[SPEAKER_18]: And if they're in the money, that's fine.
[SPEAKER_18]: You can either roll it out and up, meaning go up a strike.
[SPEAKER_18]: Now it's gonna cost you a little bit, potentially.
[SPEAKER_18]: But still might make sense, just depends on where you, how bold as you are on the particular position.
[SPEAKER_18]: You'll get a little bit of a credit, but probably not a whole lot depending on the money it is.
[SPEAKER_18]: So that's how you deal with it.
[SPEAKER_18]: You don't have to let it expire and have the stock taken away from you.
[SPEAKER_18]: Go, roll the position.
[SPEAKER_16]: A quick reminder if there's a term that you hear mentioned on the program but you're unclear about what it means or you have a question about it, we want you to ask.
[SPEAKER_16]: It's very likely that you're not the only one with that same question, 88899 chart.
[SPEAKER_07]: Hey, Logan Druston, Matt and South Florida, question on CEPP, a 72T, rather than a questions about how to do it or the requirements, I think I understand that.
[SPEAKER_07]: 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 of
[SPEAKER_07]: via the SEP72T, I guess, mechanism.
[SPEAKER_07]: 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_07]: So what did you see here?
[SPEAKER_07]: An example or two of one that might be a good idea and how you guys view that option.
[SPEAKER_18]: Thank you.
[SPEAKER_18]: Thank you for the call.
[SPEAKER_18]: Now the rule of 72T or SEPP,
[SPEAKER_18]: is something most people don't take advantage of, mainly because most don't retire early.
[SPEAKER_18]: So for normal IRA or in a 401k, which is a normal IRA, your age where you can take the money out, penalty free is 59.5, when a 401k, it's 55.
[SPEAKER_18]: What's some one, retireally, especially the fire trend rate.
[SPEAKER_18]: But you can basically take money out of these 401ks, these IRAs, early without the penalty, but you have to set up what is called an SEPP.
[SPEAKER_18]: And what that means is there's a ways to calculate it and it's a certain dollar amount, and you have to do it consistently.
[SPEAKER_18]: 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_18]: So if you tire at 50, you set this up, you can take money out, penalty free, but that's the same amount over.
[SPEAKER_18]: nine and a half years until you reach that age of 59 and a half and then it's over.
[SPEAKER_18]: So it's a great little work around, but only if you are regiring early.
[SPEAKER_18]: Then that's pretty much it.
[SPEAKER_18]: It's pretty simple.
[SPEAKER_18]: Once again, there are some complex calculations and how much you can take out.
[SPEAKER_18]: One is amirization method, fixedenutization method, R&D method, et cetera.
[SPEAKER_18]: And you can look those up, IRS schools, all of that.
[SPEAKER_18]: Probably once I'm on to the CPA before you do that.
[SPEAKER_18]: Now all of this distribution is still taxed as your ordinary income, and that's another issue.
[SPEAKER_18]: is if you start this plan, you can't stop it.
[SPEAKER_18]: So whatever impact that has on you, from a tax perspective, it has.
[SPEAKER_18]: You can't say, oh, I don't want that income.
[SPEAKER_18]: I don't need that money this year.
[SPEAKER_18]: You're going to set it up, it's going to come to you, and you're going to have to report it as income like the taxes.
[SPEAKER_18]: If you're okay with that, then you can go ahead, so I hope that helps.
[SPEAKER_21]: Invest talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.
[SPEAKER_21]: It's important for the listener to understand that not all comments made will apply to them.
[SPEAKER_21]: Specifically, nothing said she'll be taken to be investment advice.
[SPEAKER_21]: or shell statements on this program be considered an offer to buy or sell security.
[SPEAKER_21]: Because such advice is rendered solely on an individual basis, and at times will require that the investor review of perspectives before investing.
[SPEAKER_21]: Invest talk is a copyrighted program of client, Pavles, and Peasley Financial, a registered investment advisor firm, which retains all rights.
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[SPEAKER_21]: Thank you for listening, and your comments and questions are welcome on our 24-hour listener line at 888-99 chart.