[SPEAKER_01]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.
[SPEAKER_01]: Here's your host, Justin Klein.
[SPEAKER_00]: Good afternoon fellow investors and welcome back to another edition of the best talk this is our Tuesday June 9th, 2026 edition and appreciate you all tuning in and an interesting market once again.
[SPEAKER_00]: I talked about this over the weekend on my YouTube video about how Friday was the potential for a an inflection point in markets
[SPEAKER_00]: And you know, we go for a lot of time during the year.
[SPEAKER_00]: We go, I want to say boring periods because always stuff to talk about, it always things to learn.
[SPEAKER_00]: But from a trend perspective, the trend is your friend until it ends.
[SPEAKER_00]: And it's usually boring while the trend is in place.
[SPEAKER_00]: But then it always ends.
[SPEAKER_00]: And that's when the excitement starts in my book.
[SPEAKER_00]: Because then you say, OK, now that is broken.
[SPEAKER_00]: How is the market rotating?
[SPEAKER_00]: Where are the new opportunities?
[SPEAKER_00]: Not only to buy, but also to trim to sell to take profits.
[SPEAKER_00]: These are those moments where you wake up and you say, okay, what is my portfolio look like?
[SPEAKER_00]: Where has risk grown?
[SPEAKER_00]: Where are the opportunities I can rotate into?
[SPEAKER_00]: How can I take advantage of these relatively rare moments in markets where the market is shifting?
[SPEAKER_00]: Underneath your feet.
[SPEAKER_00]: and you need to be on balance and aware and assessing the situation so that, you know, you don't fall through the cracks, shall we say?
[SPEAKER_00]: So that's what I'm going to talk about a lot on today's show, which is what is happening in the equity markets, in the bond markets, in the economy.
[SPEAKER_00]: It's going to impact your portfolio and market movements for, I think, the balance of the year.
[SPEAKER_00]: Think we're at that point, we're okay, things are different now.
[SPEAKER_00]: The narratives that drove the market for the past, let's call it since the beginning of the quarter, right, two plus months, two and a half months, roughly, the market bonded and marched.
[SPEAKER_00]: That was all about, you know, battle and march was always.
[SPEAKER_00]: control pullback, nothing crazy, but all about the impact of the Iran war, the last two months have been at, right, Iran war, no big deal.
[SPEAKER_00]: It's all about AI.
[SPEAKER_00]: It's all about these hyperscales, all about memory stocks.
[SPEAKER_00]: It's all about chip stocks, software's dead, all of that.
[SPEAKER_00]: Guess what?
[SPEAKER_00]: That's behind us.
[SPEAKER_00]: There's a new narrative being pushed in markets.
[SPEAKER_00]: A new narrative that will dry flows.
[SPEAKER_00]: And it all started on Friday.
[SPEAKER_00]: I'm Justin Klein and my goal here is to help you become a better investor by answering your finance and investment questions.
[SPEAKER_00]: Whatever's on your mind, don't hesitate to reach out and give me a call at 8.99 chart and heads up.
[SPEAKER_00]: Our next new wealth webinar is set for Tuesday, June 30th from 12 to 1 p.m. Pacific Time.
[SPEAKER_00]: The title is beyond the yield, how to invest for your income, needs.
[SPEAKER_00]: You can sign up as always over at investtalk.com and just the bed I'll talk about today's mark performance and run down the show topics for the hour.
[SPEAKER_00]: But as usual, we'll tackle this first call a question now.
[SPEAKER_02]: Now it's open you guys to give your opinion on premores services corporation the ticker is PR I am I've been looking at it now I think it looks good but looking to see if you guys can if you're on opinion if you guys do think it looks good if now's a good time to buy thanks again and we'll listen on the show.
[SPEAKER_00]: Looking at Primora's PRIM is the symbol.
[SPEAKER_00]: This is, see, what do we have in market capitalized?
[SPEAKER_00]: 6.6 billion, so, kind of a small domain cap name.
[SPEAKER_00]: What do they do?
[SPEAKER_00]: They're a gaze provision of construction, fabrication, maintenance, replacement, and engineering services.
[SPEAKER_00]: In the utilities and energy space, their business has boomed in the era of AI.
[SPEAKER_00]: And they provide a lot of services
[SPEAKER_00]: These data centers, symbols PR, I am earnings this year.
[SPEAKER_00]: This is down 14% with backup, 22% next year.
[SPEAKER_00]: And the issue for me here is relative strength only 27.
[SPEAKER_00]: So this topped back in, it looks like the earnings in May, early May, May 6th, maybe after hours, May 5th, I don't know.
[SPEAKER_00]: But it fell dramatically.
[SPEAKER_00]: From a high over $200 per share, the clothes on May 5th to a low
[SPEAKER_00]: So quite the drop.
[SPEAKER_00]: The position here is that it rallied a little bit, but never broke into the gap, the high of that cell-off day.
[SPEAKER_00]: And as rolled over, once again, down big today, down 14.7% on the day.
[SPEAKER_00]: To me, that speaks very loud.
[SPEAKER_00]: And what I'm seeing is a free cash flow, 164 million dollars.
[SPEAKER_00]: Well, if it's high from 500 million,
[SPEAKER_00]: and it currently has a mark cap of 5.6 billing in, but it's about a billing and a half in debt, net debt.
[SPEAKER_00]: And to me, that's the issue.
[SPEAKER_00]: Is the cash flow is not good enough?
[SPEAKER_00]: It's profitability is good, but historically, it's return equity is a bit lower in the low teens, right now it's mid teens.
[SPEAKER_00]: So it's over earning a little bit.
[SPEAKER_00]: I generally like the space, I just don't like the valuation you're getting here.
[SPEAKER_00]: I don't like that chart at all.
[SPEAKER_00]: When you get a big move down and then the stock kind of chops sideways for a period of time above support level and for this one it's the 100 week moving average right around $98 this wants to go down again it wants to take another leg lower and that's really my problem with it to me this wants to go to at least 88
[SPEAKER_00]: And maybe I would think about that, but still, I don't love it.
[SPEAKER_00]: This would be, honestly, this probably would be a buy for me until the mid 60s, mid 60s.
[SPEAKER_00]: That's what I pick up.
[SPEAKER_00]: PR, I am Primorus Services Corp. Now, with a great show yesterday, we looked into the story about index funds, versus active strategies.
[SPEAKER_00]: Our index funds and enough in a volatile market, we answer that question.
[SPEAKER_00]: We also answered a listener question on P, P, G, Industries, and it was submitted via the comment section over on the investor hockey YouTube channel.
[SPEAKER_00]: And if you happen to miss it, go check it out, the best way to get every investor talk show is by finding it wherever you get your podcasts.
[SPEAKER_00]: We've a lot of ground to cover over the next 45 minutes or so here comes or time permitting.
[SPEAKER_00]: We'll get to all of it.
[SPEAKER_00]: Our main focus point is about the AI trade.
[SPEAKER_00]: Is it over?
[SPEAKER_00]: The bear case against hyperscaler, spending, going to dig into that.
[SPEAKER_00]: And what this recent trigger is all about.
[SPEAKER_00]: Is this the time that the market starts demanding answers?
[SPEAKER_00]: Usually when momentum fades or turns the other way,
[SPEAKER_00]: They start asking questions, vusters and markets start asking questions when level of medicine is no longer in their favorite.
[SPEAKER_00]: They just need to be a catalyst and we're going to talk about what that catalyst is and speaking of catalyst, liquidity.
[SPEAKER_00]: We talk about it's how it's so important to the market in the short term.
[SPEAKER_00]: And liquidity can be drawn out of markets by fiscal authorities by spending less than they were in the previous year.
[SPEAKER_00]: be drawn out by monetary authorities, talking about the Fed, Chinese Central Bank, such banks are on the world, by tightening policy, raising interest rates, reducing balance sheets, all of that.
[SPEAKER_00]: That's another way that liquidity can be drawn out.
[SPEAKER_00]: Banks can do it by drawing lending, down, reducing lending growth.
[SPEAKER_00]: But it also can be drawn out by private companies going public and drawing on the pool of capital in the public markets.
[SPEAKER_00]: And what's happened as of late is that the boring businesses have been sold off.
[SPEAKER_00]: But as I said at the top of the show is this inflection point where the boring businesses are finally more attractive than the exciting ones.
[SPEAKER_00]: OK, so we're going to look at that.
[SPEAKER_00]: We're also going to touch on one more.
[SPEAKER_00]: Oh, central banks.
[SPEAKER_00]: Are they buying as much gold as they were in the past?
[SPEAKER_00]: What are they doing as of April?
[SPEAKER_00]: We also have voice bank questions on oil stocks as well as virtue of emerging markets a dividend ETF, VM, and of course most importantly will be your questions, your live calls will be more important.
[SPEAKER_00]: We'll also answer questions from the best stock YouTube channel, but we're going to add to you a quick break.
[SPEAKER_00]: Please remember, you can call it any time.
[SPEAKER_00]: Leave your question on the best stock voice bank if this can be our live stream or possibly an April 20 area.
[SPEAKER_00]: You can call right now at 8.89 in chart up next comment on today's market activity.
[SPEAKER_01]: This is Invest Talk, now closing in on 63 million downloads.
[SPEAKER_01]: And Justin Klein is here taking your questions live.
[SPEAKER_01]: 88899 chart.
[SPEAKER_00]: It's been a very quick look at the market today.
[SPEAKER_00]: It was another red day.
[SPEAKER_00]: We're talking about that follow through day from Friday.
[SPEAKER_00]: We didn't get that yesterday.
[SPEAKER_00]: We got a pause.
[SPEAKER_00]: If you'll look at the candlestick charts of pretty much the majoring agencies, it closed up yesterday, but kind of closed where the market opened to call it a doji day.
[SPEAKER_00]: And usually when you get a big move, either direction, and then you get a doji day after.
[SPEAKER_00]: That's just the pause.
[SPEAKER_00]: That's it.
[SPEAKER_00]: There's likely a resumption to the downside.
[SPEAKER_00]: And we got that today.
[SPEAKER_00]: Now, it did rebound in today to some degree.
[SPEAKER_00]: But we closed kind of where we ended yesterday, at least on the S&P.
[SPEAKER_00]: Sorry, where we closed Friday.
[SPEAKER_00]: We closed where we ended up closing on Friday.
[SPEAKER_00]: So we're raised all the gains that we got on Monday.
[SPEAKER_00]: And so there still is that downside pressure.
[SPEAKER_00]: Yes, we got a balance, but usually those are the first major bounce when you hit support of some kind of, we hit that a little bit midday.
[SPEAKER_00]: We rallied about halfway up and then closed a bit weaker.
[SPEAKER_00]: So,
[SPEAKER_00]: Overall, this is what you're looking for when you're saying is this is Friday anomaly or was this the start of a broader trend, most likely we have two of three days of a similar type of weakness really in large cap growth anything a I related names like Apple down 3.6% AMD down 3 Microsoft down 2 Tesla down 3 Palens here down 3
[SPEAKER_00]: sales force down for app love and down 7.6.
[SPEAKER_00]: So a lot of red in technology in general, but actually, the broader markets where broader sectors were fine.
[SPEAKER_00]: The S&P was only down a quarter of percent on the day.
[SPEAKER_00]: The Dow was actually up 86 points about 17 basis points there.
[SPEAKER_00]: And you had a green in the finance sector, for example.
[SPEAKER_00]: Then you go over to health care.
[SPEAKER_00]: Names that had been weak, like a striker or thermo-fisher.
[SPEAKER_00]: Dan and her.
[SPEAKER_00]: These are all names that had nice days.
[SPEAKER_00]: Oil was down, so you had the energy names down, but consumer staples were up.
[SPEAKER_00]: Industrials were up, utilities were up.
[SPEAKER_00]: Really across the board, outside a tech, there was strength.
[SPEAKER_00]: So this is a continuation of that rotation from Friday.
[SPEAKER_00]: Yields were down for a basis point, so that was overall a positive.
[SPEAKER_00]: Dollar nix is down point one, goal of finished down 1.8% silver down 4.9, Bitcoin down 2.2%
[SPEAKER_00]: follow through, we still need to see it for the balance of the week, but this is the day that tells you that Friday was an inflection point.
[SPEAKER_00]: This is Investock, our work continues after this break, so give me a call now at 8.899 chart.
[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, just in client makes the same trade for himself and KPP.
[SPEAKER_01]: No front running, no special treatment.
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[SPEAKER_06]: Chevron and that kind of stuff oil sucks.
[SPEAKER_06]: I'm wondering if I can trim now or sit on it and I'm in no rush.
[SPEAKER_06]: It's all that's been up quite a bit in the last couple of years.
[SPEAKER_06]: My bottle.
[SPEAKER_06]: Just your thoughts are long-term, trim, sit on it or ran too much.
[SPEAKER_06]: And I will see you on show, thank you.
[SPEAKER_06]: Hi.
[SPEAKER_00]: There's a lot of lessons to me that have come out of this war.
[SPEAKER_00]: not just politically.
[SPEAKER_00]: That's one lesson.
[SPEAKER_00]: I think everyone's probably learning in some way shape or form.
[SPEAKER_00]: But it's also about the oil and energy industries and the dynamics in the oil patch.
[SPEAKER_00]: And to be the big takeaway is the closing of the street of Harmus was something everybody warned about for a long period of time.
[SPEAKER_00]: Frankly, you know, we're doing this long
[SPEAKER_00]: I heard about it, never thought it was really was a big risk, but it was a big boogie man that everyone throughout there that if that happens the oil markets will go crazy, they will go insane and that would be the end of the world.
[SPEAKER_00]: Well guess what, we're over three months into this.
[SPEAKER_00]: And there are issues, I'm not saying there aren't, and obviously if it's closed another probably month or two they'll be even more issues.
[SPEAKER_00]: So it's a problem, but clearly it's not nearly a big of a problem as everyone made it out to be before it ever happened.
[SPEAKER_00]: Why?
[SPEAKER_00]: Because oil is a global market and the Middle East has the most oil, but it's not the only place to get oil.
[SPEAKER_00]: And so the lesson here is that if this isn't going to moon shot oil prices to,
[SPEAKER_00]: levels that allow the big oil companies to extract oil at huge valuations or huge margin, so we say, then what is?
[SPEAKER_00]: Then what is?
[SPEAKER_00]: So what I did is I said, if you're going to gain exposure enough time right now, it's okay to have some exposure right now.
[SPEAKER_00]: four percent super psyched like because that's a I think a pretty good political bet that this will come to a head to a point where prices do accelerate to the upside and it puts pressure probably on the current uh U.S. administration to do something to resolve it.
[SPEAKER_00]: Right now it was at you know ninety dollars a barrel in that range kind of hanging between ninety and a hundred higher not great but not a catastrophe for the world.
[SPEAKER_00]: I don't really feel great about the big oil and oil names, just EMPs in general.
[SPEAKER_00]: First off, you have to understand that their price takers means that they just get what the market says they're going to get.
[SPEAKER_00]: It's not much strategy behind that.
[SPEAKER_00]: You have this hedging and things like that.
[SPEAKER_00]: But overall, they're price takers.
[SPEAKER_00]: So I said, what about the rest of the energy world?
[SPEAKER_00]: What about transport stocks?
[SPEAKER_00]: Meaning the pipeline companies.
[SPEAKER_00]: And then I want to look at Chevron, Exxon, and then a Williams company.
[SPEAKER_00]: Well, look at the last 10 years.
[SPEAKER_00]: Even the last 15 years, last 10 years, look at Williams company.
[SPEAKER_00]: Total return, 14 and the quarter percent, total of the largest oil pipeline companies out there.
[SPEAKER_00]: Then you look at Chevron, nine percent,
[SPEAKER_00]: plus 15 years x on 6.2, Chevron 6.6 Williams Company 8.5.
[SPEAKER_00]: So clearly, it makes more sense to own the pipeline companies.
[SPEAKER_00]: Then what about the refiner's?
[SPEAKER_00]: The largest one is Vlaro.
[SPEAKER_00]: What's that return in the last 10 years?
[SPEAKER_00]: 18 and a half percent.
[SPEAKER_00]: Anulized, that's an incredible return.
[SPEAKER_00]: 15 years, 18% annualized, just consistent.
[SPEAKER_00]: And they're not building a lot of new refineries and it's difficult to get new pipeline spilt.
[SPEAKER_00]: So it's all about scarcity there and they can, they're the only game in town for the most part, they can extract higher returns.
[SPEAKER_00]: So my lesson here is,
[SPEAKER_00]: names that have exposure to finding that have midstream capabilities meaning moving oil and gas from the wellhead to where it's actually pretty actually used.
[SPEAKER_00]: That's the way I'm starting to look at the oil and oil industry.
[SPEAKER_00]: The next best talk we'll look into the story is the feds next move a rate hike on a strong job's report means for your portfolio.
[SPEAKER_00]: Friday's strong, strongly expected job support sent stocks, tumbling, and re-eaten any fears of the Fed, may be forced to raise rates rather than cut them.
[SPEAKER_00]: We'll talk about it tomorrow, but for now I'm Justin Klein and ready to hear calls 8-8-99 chart.
[SPEAKER_01]: Get ready for an all-new in Vestalk Wealth webinar, beyond the yield.
[SPEAKER_01]: How to invest for your income needs.
[SPEAKER_01]: Tuesday, June 30th, noon to one Pacific time.
[SPEAKER_01]: Learn more and register now at investalk.com.
[SPEAKER_00]: Our main focus point is about the EI trade and is it over?
[SPEAKER_00]: Is it over?
[SPEAKER_00]: Bull markets don't usually die of old age, they don't.
[SPEAKER_00]: There's usually some sort of catalyst that burst the narrative.
[SPEAKER_00]: And the catalyst, this time it may be higher interest rates.
[SPEAKER_00]: On Friday, the Nasdaq fell 4% biggest drop since the tariff turmoil in Liberation Day last April.
[SPEAKER_00]: The semiconductor next to Sox dropped 10% the biggest fall since the pandemic in 2020.
[SPEAKER_00]: And the fourth largest drop since the index was launched in 1994.
[SPEAKER_00]: When you see those type of moves at a high, that is a giant signal.
[SPEAKER_00]: quite red flag, but it's definitely a yellow flag.
[SPEAKER_00]: It has a tint of maybe a little orange, right?
[SPEAKER_00]: Cause it's head and towards red.
[SPEAKER_00]: All in two trillion dollars is wiped off the value of US equities in one day and more than half of that was in the chip sector alone.
[SPEAKER_00]: And it wasn't bad news or anything.
[SPEAKER_00]: In fact, you could argue it was too good of news.
[SPEAKER_00]: It was the jobs report, not only did the jobs come into 172,000, which was double the consensus expectation, but the previous two months were revised up sharply as well.
[SPEAKER_00]: Most people would think it's good news.
[SPEAKER_00]: Drawing economy, drawing your labor market, that should boost profits, and that's true.
[SPEAKER_00]: But frankly, more people being employed isn't doing anything for the hyperscalers, for AI companies.
[SPEAKER_00]: In fact, you could argue that if, if companies are hiring more, his AI is impactful as everyone says, says it is, pick there's a small glimmer of that theme as well.
[SPEAKER_00]: But mainly, it's that interest rates are likely to move higher.
[SPEAKER_00]: And when you combine the higher cost of capital with a market that's priced for perfection, well, that's the catalyst for a sell-off.
[SPEAKER_00]: Now, we know, over the next five years, hyperscalers are going to spend probably over $3,000 on average each.
[SPEAKER_00]: We talked about the IPO blitz that's coming from SpaceX to AnthropocTOBI, and to Google, that's underappreciated Google's public or alphabet, but they're raising $80 billion as well.
[SPEAKER_00]: And these IPOs are obviously at eye watering valuations.
[SPEAKER_00]: So the bubble signs are flashing kind of everywhere.
[SPEAKER_00]: If you look at equity strategies at city, warn that their global bear market checklist was at its frothyest level since the global financial crisis in a way and getting frothyere.
[SPEAKER_00]: They have 18 red flags.
[SPEAKER_00]: the checklist, includes things like earnings forecasts, fun flows, valuations, capex, investor sentiment, equity issuance, and currently on a global scale 10 of the 18 red flags are flashing, and in the United States 11 and a half of them are flashing.
[SPEAKER_00]: And usually when it's double digits, that's historically when problems arise.
[SPEAKER_00]: Now, also typically when it hits double digits, it accelerates more to the upside, so there could be even more you
[SPEAKER_00]: Just a little tremor, and then we're off of the races once again in the short term.
[SPEAKER_00]: But ultimately when you have all these signs of over-exuberance flashing, it tells you have to be on the lookout for days like Friday for these signals of volatility rising rapidly.
[SPEAKER_00]: The bubbles don't tend to burst by a single trigger, but once again, the cost of money is up there with one of the most impactful ones, like you saw in 2022.
[SPEAKER_00]: Remember the, the spec craze in 2021, just people putting stupid money behind these stupid acquisitions and these stupid acquisition companies were nine and a ten of them went from ten dollars down to sub one dollar per share and investors lost the gobs of money.
[SPEAKER_00]: because it was just stupid decision-making, misallocation of capital, just complete nonsense back then.
[SPEAKER_00]: And in many ways, there's a lot of that right now, and you can see that with SpaceX being worth two trillion when they're not profitable.
[SPEAKER_00]: And back then, the trigger was, once again, higher interest rates of the Fed getting hawk is trying to fight inflation.
[SPEAKER_00]: And for most of this year, the Fed was, or the market was expecting the Fed to cut rates
[SPEAKER_00]: But as the Iran War started to kick off inflation again, traders were shifting to neutral, and then maybe one rate hike, and that hike now, it's almost guaranteed there's one rate hike, and maybe two or three by a year end.
[SPEAKER_00]: We should flip everything on a set.
[SPEAKER_00]: It would turn loose financial conditions into either neutral, to possibly type financial conditions by a year end.
[SPEAKER_00]: So, the simple answer to that is, yes, there's a very good chance the AI trade is over.
[SPEAKER_00]: And this is that make a break week.
[SPEAKER_00]: I think you can continue to get weakness, and you don't reverse most, if not all of Friday's losses in the short term, that momentum easily could reverse the gamma positioning and the option market could shift to what we call negative
[SPEAKER_00]: So keep an eye out for the market this week and how we fall through or not.
[SPEAKER_00]: Let's keep things going and drop another fresh call a question now.
[SPEAKER_07]: Hey, good evening guys.
[SPEAKER_07]: Long time listener.
[SPEAKER_07]: Again, thank you for everything that you do.
[SPEAKER_07]: I'm calling with regard to allocation in my 401k.
[SPEAKER_07]: I've recently taken a position over the last three months.
[SPEAKER_07]: represents about 50% of my 401k portfolio, and my question is, with the current state of the market and the probability like we high interest rate hikes, do you think I should take this opportunity to rebalance my 401k or do you think I should stay with the course and
[SPEAKER_00]: a car for a week or so and look forward to the answer for you to have to make you do guys enjoy the rest of your day all right VMA X this is the Vanguard emerging market stock in X 50% it's a little high to be honest with you of just one fund especially emerging market funds even though I like emerging markets
[SPEAKER_00]: But as the, as the dollar strength is a little bit based on what's going on with the Fed rate policy rate path, that's going to be an issue for merging markets, I don't know what the rest of your portfolio looks like and you 401k, I don't know what your options are within your 401k, but here's what I would do.
[SPEAKER_00]: for everybody.
[SPEAKER_00]: If you have a 401k as I talked about talk about many times so far this hour, which is this looks like a very important mark and affection point that could end up being like 2020 to a big warning for the past couple of months that yeah, the AI hype is great and you know, it's the momentum is feels good.
[SPEAKER_00]: But we know that these trends end at some point and there is a trigger and the triggers likely occurs policy.
[SPEAKER_00]: So everyone out there should be taking this time to reassess their portfolio.
[SPEAKER_00]: What areas of the market are likely to, in fact negatively, if the Fed does go in and that into a hiking stance?
[SPEAKER_00]: and which ones will reflect positively.
[SPEAKER_00]: And to me, this is the time to be moving into the names of the names of the sold-off really over the past couple of months.
[SPEAKER_00]: I've seen health care names that have sold-off and I'm going, what is happening here?
[SPEAKER_00]: We thought we have a couple of names on our portfolio and they're down in a 15-ish per cent or so.
[SPEAKER_00]: Still up before in the healthcare space, which is saying, okay, we're still doing fine, because this is more of a sector's specific issue, but the earnings aren't affected.
[SPEAKER_00]: It's just money flowing out of the quote-unquote safer names.
[SPEAKER_00]: The boring names and into these hyperscalish.
[SPEAKER_00]: And so, if that flips and you're already seeing it now,
[SPEAKER_00]: I'm seeing so many names that are now rallying that had been relative under performance.
[SPEAKER_00]: And we've been re-balancing our portfolios.
[SPEAKER_00]: We have a lot of those AI winners, a lot of the kind of nuts and bolts of AI data centers.
[SPEAKER_00]: Those are done extremely well.
[SPEAKER_00]: We've had some of the chip names, a lot of the big ones that have rallied recently.
[SPEAKER_00]: We've been trimming those over the past couple of weeks as well.
[SPEAKER_00]: This is that time, you must rebalance when you see this inflection point.
[SPEAKER_00]: So I would probably trim some of that, because it's 50% of your 401k, that's too much.
[SPEAKER_00]: This is where I say, this is my biggest issue with the 401k world is leaving up the average person to just invest their money when they don't really know how to properly create that allocation.
[SPEAKER_00]: That's one reason why we manage our client 401k is when we can, and make sure they're aligned.
[SPEAKER_00]: appropriately, so, yes, this is the time to absolutely rebounds.
[SPEAKER_00]: Let's pivot over to another voice mail question.
[SPEAKER_05]: Now, I have about a 10% position in an intermediate term bond fund, I'm retired.
[SPEAKER_05]: And I'm thinking of taking half of this and putting it into a residential
[SPEAKER_05]: Go ahead with his move.
[SPEAKER_05]: Thank you.
[SPEAKER_05]: I'll listen for the answer.
[SPEAKER_00]: Well, first off, I like that you're looking to shift out of intermediate term bonds, because if anybody's out there, you have a bond fund of any type, you want it to be short term.
[SPEAKER_00]: Talking duration to three years max, ideally even shorter than that potentially.
[SPEAKER_00]: But intermediate, usually that's eight, 10 years, maybe 12 years somewhere in that range,
[SPEAKER_00]: Okay, so I like your thought process there.
[SPEAKER_00]: Now, rotating into R-E-Z, what you're doing is actually here.
[SPEAKER_00]: Buying one reat, this is a reat fund.
[SPEAKER_00]: Okay, so yes, there are a lot of residential reads in here like imitation homes, like Avalan Bay, equity, residential, et cetera.
[SPEAKER_00]: But you said not in office and industrial reads, but through reality is, you actually have a lot of this.
[SPEAKER_00]: You have extra space storage.
[SPEAKER_00]: You have Ventos, you have public storage.
[SPEAKER_00]: A lot of these are residential,
[SPEAKER_00]: So make sure you know what you own.
[SPEAKER_00]: Yes, it says residential and multi sector real estate ETF and this goes back to what I always tell people, which is don't rely on the name of the fund just to tell you exactly what's in it.
[SPEAKER_00]: Those names are very short.
[SPEAKER_00]: You're talking for five words.
[SPEAKER_00]: and a lot of times sectors or it's difficult for them to really summarize exactly what it's invested in and what they've tried to do is by saying they say residential yes they'd lead with that and there's a good amount of those but then it says multi-sector that's multi-sector means more than one and guess what that also means probably every sector of the
[SPEAKER_00]: You aren't scurting away from office and industrial retail.
[SPEAKER_00]: You're getting plenty of that as well.
[SPEAKER_00]: Now, what I rather own this than an intermediate term bond fund, yes, I would.
[SPEAKER_00]: But I understand it is the ETF.
[SPEAKER_00]: You have an expense ratio of 48 basis points.
[SPEAKER_00]: You're paying that, even though you might not see it, you're definitely paying it.
[SPEAKER_00]: It's a solid fund.
[SPEAKER_00]: It gets four out of five stars via morning star.
[SPEAKER_00]: Pretty good.
[SPEAKER_00]: but understand what you want.
[SPEAKER_00]: It's a multi-sector read.
[SPEAKER_00]: You're getting exposure to all of it.
[SPEAKER_00]: Let's tackle another YouTube comment question.
[SPEAKER_00]: Jimmy Gustafson says, what are your thoughts of the mining company K92 mining?
[SPEAKER_00]: K92 mining.
[SPEAKER_00]: Let me see this.
[SPEAKER_00]: K92.
[SPEAKER_00]: out of Toronto.
[SPEAKER_00]: Vona for a while, I think it may be adding some more, it's about 2.5% of my portfolio.
[SPEAKER_00]: I have other mining names besides this, though.
[SPEAKER_00]: I currently have around 25% of my portfolio in raw materials, mostly gold and silver mines, but also copper, one aluminum company in tungsten as well.
[SPEAKER_00]: All right, let's see, $3 billion market cap return equity, $45% free cash flows, about a hundred million dollars, I'm just looking at different timeframes here.
[SPEAKER_00]: The other profitability was weak, but it's obviously got up as the price of underlying commodities are good.
[SPEAKER_00]: Good balance sheet, no net debt on its balance sheet.
[SPEAKER_00]: It doesn't pay a dividend, but it's taking that cash flow, and what is it doing?
[SPEAKER_05]: Yeah.
[SPEAKER_00]: It's issuing more shares.
[SPEAKER_00]: I don't like that.
[SPEAKER_00]: I rather it not be issuing more shares, this is an interesting one.
[SPEAKER_00]: I mean, I like the broader trends in the stock.
[SPEAKER_00]: I like the profitability.
[SPEAKER_00]: I like the balance sheet.
[SPEAKER_00]: It's hard for me to say that this is would be up there with the one I favorites because I currently have it.
[SPEAKER_00]: Looked at it, it looks like it's out of Canada.
[SPEAKER_00]: So it's not one that we typically don't buy Canadian listed names usually not there's anything wrong with that, but it's just not something we do deep research on these type of names.
[SPEAKER_00]: So overall, I like the trends in the chart.
[SPEAKER_00]: I like the profitability, like the balance sheet.
[SPEAKER_00]: So adding to it,
[SPEAKER_00]: Things are going well for you.
[SPEAKER_00]: I would be mad about it in 20% of your portfolio and raw materials, and it gets fine as well.
[SPEAKER_00]: This is Invest Talk, I'm Justin Klein, and we are heading into our final break.
[SPEAKER_00]: This is a good question.
[SPEAKER_00]: So now, it's eight and eight nine chart.
[SPEAKER_03]: Oh, this is the Adore from Orlando, Florida, and I had a question for the guys.
[SPEAKER_03]: For the next 30 years, I'm going to index her, and would you guys, for one fund, fits all, would you choose, as an example, with the Vanguard options, V-O-O versus V-T-I, obviously V-O-O's, S-P-501 index, V-T-I, total stock market, it's indexed fun, and we know there's
[SPEAKER_03]: I'm putting a lot of money in a lot of money.
[SPEAKER_03]: I know over 30 years, they're still going to be at least that maybe $102,000 dollars difference because that's a piece that's really well.
[SPEAKER_03]: So I'd just didn't know what you guys think.
[SPEAKER_03]: Which would you choose?
[SPEAKER_03]: Thanks a lot.
[SPEAKER_00]: Well, first I want to caveat my answer with, I actually think indexing is going to do much worse than it has over the past 30, 40 years than it had.
[SPEAKER_00]: If you look at history, indexing goes through phases where it does really well, and they're to really poorly, so I think we're at the beginning of the time where you're going to be much better by adding more diversification in your portfolio, foreign assets, harder assets, et cetera, and moving more mid and small cap as well.
[SPEAKER_00]: So I think we're in that point now.
[SPEAKER_00]: If you're just looking at an vacuum,
[SPEAKER_00]: if you just want to own VLO, which is the basically S5500 or VTI, it's no question.
[SPEAKER_00]: It's VTI, it's 3500 names versus 500 names.
[SPEAKER_00]: It's far more diversified, a little bit less tech, but in a little bit more kind of everywhere else for the most part, you're just getting better diversity.
[SPEAKER_00]: Now once again, like you said, call us at it, there's not much difference.
[SPEAKER_00]: S&P is about 35 and 1% in tech versus VTI is about 33 and 1%.
[SPEAKER_00]: 200 basis point difference there, notable, but not dramatic.
[SPEAKER_00]: You're getting a little more industrials, a little more energy, you're getting a little more financial services, and a little more basic materials, things like that.
[SPEAKER_00]: But overall, they're going to have very similar performance.
[SPEAKER_00]: So VTI is definitely answered, but I would encourage you to broaden your horizons and go beyond just US large cap equities.
[SPEAKER_00]: Because history says that other sectors are set, or so other asset classes and sub asset classes are set to outperform.
[SPEAKER_00]: As speaking of that, let's talk about the IPO market.
[SPEAKER_00]: and really liquidity.
[SPEAKER_00]: I've talked about liquidity, can shift dramatically based on various reasons.
[SPEAKER_00]: But what are the big reasons that liquidity could shift right now beyond just the fact we talked about the Fed, but it's also this IPO schedule and there is no bigger indication of this than
[SPEAKER_00]: What Alphabet just did, planning to raise $80 billion, $15 billion in convertibles, $25 billion in common stock, and $40 billion that at the money sales in Q3.
[SPEAKER_00]: So that's coming up.
[SPEAKER_00]: So it's clear that they are getting ahead.
[SPEAKER_00]: That's they're doing.
[SPEAKER_00]: They don't want, they want to get ahead of the music stopping, because they see what's happening in SpaceX, OpenAI, and then Thropic over the next three
[SPEAKER_00]: at the same time.
[SPEAKER_00]: Typically, IPOs underperform by 20% on the three-year time horizon, and it's even more pronounced by 30% if they don't make money, that's what a lot of these new IPOs do not make money.
[SPEAKER_00]: The index providers themselves are so worried about finding the proper liquidity that they are waving profitability requirements.
[SPEAKER_00]: They're cutting the seasoning window from 90 days to 5.
[SPEAKER_00]: You're 401K investors that are vested in targeted funds.
[SPEAKER_00]: They're being forced to buy these.
[SPEAKER_00]: They're buying up the initial IPO pump and then right before the accelerated unlock.
[SPEAKER_00]: Which means that inside of the world continue to have to be selling more and more as the year goes on into 2027.
[SPEAKER_00]: This has been happening for 100 plus years, dumping these IPOs on the unsuspecting public.
[SPEAKER_00]: SpaceX is just doing this at scale, and all of this issuance is making it increasingly likely that the music will stop playing in the very near future.
[SPEAKER_00]: So this is the time, as I said before, rotating your portfolio, re-balancing your portfolio, is to be job number one for all of you right now.
[SPEAKER_00]: I'm Justin Klein, reminding you that of KP Financial's Parallel Investing when we make a trade for our clients, we can be the same trade for ourselves, same day, same price, same percentage, no front running, no special treatment.
[SPEAKER_00]: We invest right along side, our clients share the same risk, and potential for success and you can learn more by heading over to invest.com.
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[SPEAKER_00]: This is Invest Talk.
[SPEAKER_00]: Good night.
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