[SPEAKER_02]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.
[SPEAKER_02]: Here's your host, Justin Klein.
[SPEAKER_00]: Good afternoon fellow investors.
[SPEAKER_00]: And welcome back to Invest Talk.
[SPEAKER_00]: This is our Wednesday.
[SPEAKER_00]: June 17th, 2026 edition of Invest Talk and Happy Fed Day to everybody out there.
[SPEAKER_00]: Which means there's a lot to discuss a little bit more than usual one of the eight Fed meetings happened today on the year.
[SPEAKER_00]: And the first half are behind us.
[SPEAKER_00]: So we have four in the books, four more to go.
[SPEAKER_00]: And it's not about what happened in the first four, but it's about what is likely to happen for the next four as we have a new Fed chair.
[SPEAKER_00]: That is the big news.
[SPEAKER_00]: Was the market reaction?
[SPEAKER_00]: How that might impact your portfolio and much, much more that's what today will be about helping you become a better best to are answering your finance and investment questions, bring you actionable data and perspective that you can make better decisions with your money.
[SPEAKER_00]: That's what this hour is dedicated to now.
[SPEAKER_00]: To that end, heads up, our next wealth webinars coming up
[SPEAKER_00]: June 30th, 12th, 1 PM, Civic Time.
[SPEAKER_00]: Beyond the yield, how to invest for your income needs so make sure you head over to invest.com.
[SPEAKER_00]: And register now in just a bit.
[SPEAKER_00]: We'll talk about today's market performance and always run down the topics for the hour, but let's tackle this first call a question now.
[SPEAKER_05]: Hi, Dave from Ohio.
[SPEAKER_05]: You got a question on a wood side energy
[SPEAKER_05]: see what your thoughts are and if it be a good long-term hold.
[SPEAKER_06]: Thank you.
[SPEAKER_00]: Looking at word side energy WDS is the symbol.
[SPEAKER_00]: It's in the oil patch.
[SPEAKER_00]: It's an MP company.
[SPEAKER_00]: They have wells in Australia, mainly.
[SPEAKER_00]: Put it around the world.
[SPEAKER_00]: Market cap is
[SPEAKER_00]: Obviously, down the last few days is oil prices have come down to this pay dividend.
[SPEAKER_00]: Yeah, high dividend, 5.37%.
[SPEAKER_00]: My issue though is the free cash flow is negative.
[SPEAKER_00]: Their balance sheet has been a debt, and the profitability is pretty meager, only return equity is only 8%.
[SPEAKER_00]: Real strength is 51, so it's kind of middleing name, but earnings is sheer so
[SPEAKER_00]: This goes back to something I said, few shows ago, which is if this crisis didn't produce a major super spike in oil, what will?
[SPEAKER_00]: It's hard for me to envision something that really pushes prices up so high that your average EMP companies, profit margins are going to explode.
[SPEAKER_00]: And the old saying in the commodity market is always, what's the cure for high prices?
[SPEAKER_00]: Well, tie prices, so even if you get a spike,
[SPEAKER_00]: And since we in the year, this has moved up from about $15 all the way to a high around 25, so a big move, up over 60%, but now we're back down to $20 in 10 cents.
[SPEAKER_00]: So what was a 60% move is now only about a 30% move.
[SPEAKER_00]: I think you're chasing this dividend, and I don't like that.
[SPEAKER_00]: One of my favorites, what would I say all the time?
[SPEAKER_00]: I don't like chasing dividends.
[SPEAKER_00]: I like chasing good businesses.
[SPEAKER_00]: And this is just an okay business.
[SPEAKER_00]: I don't want okay businesses.
[SPEAKER_00]: I don't care about a high dividend.
[SPEAKER_00]: I want good businesses, good companies, with high profit margins, with economic modes, et cetera.
[SPEAKER_00]: This is not one of them.
[SPEAKER_00]: If I'm investing in the oil and gas patch,
[SPEAKER_00]: refining capacity, I want downstream assets like pipelines, those are the best types of businesses within this space.
[SPEAKER_00]: And even as an EMP company, this is very middle-in.
[SPEAKER_00]: So I'm passing on Woodside, the Petroleum Woodside Energy Group.
[SPEAKER_00]: There we go.
[SPEAKER_02]: WDS is the symbol.
[SPEAKER_00]: Now yesterday we had a great show.
[SPEAKER_00]: We looked into the story.
[SPEAKER_00]: Silver is now a monetary medal.
[SPEAKER_00]: We had to listen to questions on two stocks, new holdings, and remitly global, that were submitted via our YouTube channel.
[SPEAKER_00]: If you happen to miss it, go check it out.
[SPEAKER_00]: That's way to get every show is to follow and best talk wherever you get your podcast.
[SPEAKER_00]: Now let's have a lot of ground to cover it in the next 45 minutes or so in time remaining, we'll get to all of it.
[SPEAKER_00]: is Bitcoin having an identity crisis?
[SPEAKER_00]: Is this a store of value or simply a speculative toy?
[SPEAKER_00]: Bitcoin's list, price plunge is forcing investors to revisit a fundamental question.
[SPEAKER_00]: Why do they actually own it?
[SPEAKER_00]: As they debate over crypto's role in diversified portfolios, he's up again, we will break down the real investment thesis or digital assets and whether Bitcoin deserves a seat at the table for long-term investors.
[SPEAKER_00]: What else are we going to talk about?
[SPEAKER_00]: Let's look at commodities in general.
[SPEAKER_00]: Get a gauge of difference.
[SPEAKER_00]: They have a commodity markets and where we are, post-war.
[SPEAKER_00]: And then with the Federal Reserve meeting, we have a new sheriff in town.
[SPEAKER_00]: The target was always two on the inflation front.
[SPEAKER_00]: But is it now three, it's three, the new two?
[SPEAKER_00]: Talk about that.
[SPEAKER_00]: We also have voice calls, voice bank calls, one is on sectors affected by the peace agreement and then zebra technologies, ZBRA.
[SPEAKER_00]: And of course most importantly, we'll be your live calls at 88899 chart of course we'll answer some questions via some interview at the invest.youtube channel as well.
[SPEAKER_00]: Or we're going to go into a quick break, please remember you can call any time and leave your question on the invest.voice bank.
[SPEAKER_00]: If you're listening to our live stream, or any until 20 in the Bay Area, you can call right now at 8.909 chart.
[SPEAKER_00]: So hang on, the Penn talk about Facebook's market activity in the next segment.
[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.
[SPEAKER_02]: 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_00]: It at 99 chart, it at 992, 4, 2, 7, 8.
[SPEAKER_00]: So you can get through and ask your question.
[SPEAKER_00]: On today's show, let's take a look at the market today.
[SPEAKER_00]: Very interesting day.
[SPEAKER_00]: You know, it else is interesting.
[SPEAKER_00]: It says zoom out to a monthly, I love one of favorite things that's tradingview.com.
[SPEAKER_00]: They have a heat map that shows you the S&B 500 or, I think, what else can you look at?
[SPEAKER_00]: You can look at the roster 3000, roster 2000, et cetera.
[SPEAKER_00]: And you can get a heat map so you can see different sectors, the size of the box, I'll make the company as you can see one day, one week, one month, three months, et cetera.
[SPEAKER_00]: One of the most interesting charts right now is if you just look at the one month
[SPEAKER_00]: What you see is, the Mag7 is doing horribly.
[SPEAKER_00]: It's almost all red.
[SPEAKER_00]: I think it is all red.
[SPEAKER_00]: Tesla's down five, this is the one month.
[SPEAKER_00]: Tesla down five and a half.
[SPEAKER_00]: Amazon down 10, Google down eight, Microsoft nine, met at 6.8, Apple had best performed down 1.4% in video down 11%.
[SPEAKER_00]: And then you even look at things like
[SPEAKER_00]: And there's some red in the industrial space as well, related to AI data infrastructure.
[SPEAKER_00]: But there's a lot of green.
[SPEAKER_00]: There's a lot of green.
[SPEAKER_00]: Mainly it's semiconductors, AMD up 20%, dial up 71, what's the digital 46?
[SPEAKER_00]: A lot of financials and health care up product manufacturing all green.
[SPEAKER_00]: There's a lot of green, but those are stand out, red.
[SPEAKER_00]: And the market is sniffing out,
[SPEAKER_00]: Kind of was a follow-through today.
[SPEAKER_00]: You had all the max 7's down once again.
[SPEAKER_00]: Some of the hardware names were up, like Western Digital and Dell and AMD Broadcom, Intel.
[SPEAKER_00]: But then a lot of red, once again.
[SPEAKER_00]: Financials were mixed, but healthcare was down, technology down, retail down, Amazon down 3.5.
[SPEAKER_00]: Home Depot down 3.
[SPEAKER_00]: Walmart down 2.4 Costco down 2.
[SPEAKER_00]: So a very interesting day on Fed Day where we had new Fed Chair, Stephen Worsh.
[SPEAKER_00]: The takeaway was pretty awkward.
[SPEAKER_00]: Nine of 18 officials penned so that at least one rate hike in 2026, six of them were looking for two rate hikes.
[SPEAKER_00]: The median dot plot increased to 50 basis points in 2027 and then 30 basis points in 2028.
[SPEAKER_00]: So this is all about raising rates, not what President Trump wants, which is lowering rates.
[SPEAKER_00]: President war, or not, Fed President Worsh.
[SPEAKER_00]: It is press conference said that they created, or he created a task force to examine fed communication, balance sheet, use of reliance on existing data sources, productivity, and jobs and inflation framework.
[SPEAKER_00]: But not the two percent targets, we're talking about a little bit later.
[SPEAKER_00]: So overall, this was hawkish.
[SPEAKER_00]: Which makes sense, especially when you look at things like the retail sales that came out today, that was at 0.9% month over month, the consensus was 0.5, core retail sales, which feeds into GDP, GDP, was at 0.7%, better than the 0.4% expected.
[SPEAKER_00]: So once again, you're getting a re-exaleration in the economy, as well as inflation, despite the, what looks like the be a resolution with the Iran War, which all adds up to a hawkish Fed.
[SPEAKER_00]: So we know that that is bad for equities.
[SPEAKER_00]: As I've said, I said, it's a last week, which was we're increasingly heading towards a rough or time in equity markets.
[SPEAKER_00]: Not because there's a recession around the corner, but because the Fed made a mistake, they made a mistake.
[SPEAKER_00]: What about a year ago when they started cutting rates?
[SPEAKER_00]: In hindsight, there was zero reason to do that.
[SPEAKER_00]: The Fed's target, the inflation rate was still above 2%.
[SPEAKER_00]: So it was a shock that we were re-excelerating on the inflation front.
[SPEAKER_00]: Then you add in, obviously, what happened in the Middle East, shouldn't, which is why we're getting a hawkish threat.
[SPEAKER_00]: And we're getting the equities that are most sensitive to higher rates, reversing, like the mag seven.
[SPEAKER_00]: Here's something else that I wanted to flag.
[SPEAKER_00]: This is important.
[SPEAKER_00]: Treasuries were up about 15 to 16 basis points the yields on the front of the curve, which was the market adjusting to a more hawkish fed.
[SPEAKER_00]: Put the dollar up 1% gold finished up 0.6% that was interesting though.
[SPEAKER_00]: It turned lower upon the meeting, but still was higher, which is a note, silver ended up 1.1%.
[SPEAKER_00]: Bitcoin features off 3.2.3%, WTI up 1%, on the day.
[SPEAKER_00]: So that was the market today, a very interesting fed meeting, first one from Kevin.
[SPEAKER_00]: Worse.
[SPEAKER_00]: We were heading into a break, ready for your calls.
[SPEAKER_00]: Now, we're going to talk to you day from free months after the break.
[SPEAKER_02]: This is Invest Talk, now closing in on 63 million downloads.
[SPEAKER_02]: And Justin Klein is here taking your questions live.
[SPEAKER_02]: 88899 chart.
[SPEAKER_00]: Good luck to Dave in Fremont looking at Microsoft.
[SPEAKER_03]: Yeah, hi, Justin, long time listener and I think my wife and I are going to join you for your next seminar.
[SPEAKER_03]: We absolutely love listening to you.
[SPEAKER_03]: So we are, can you hear me Justin?
[SPEAKER_00]: Yeah, you're great.
[SPEAKER_03]: Oh, no problem.
[SPEAKER_06]: Yeah, sorry about that.
[SPEAKER_03]: So we are have a pretty good cushion most of the AI stocks except Microsoft, we have about 40,000 Microsoft, but that one high thread about a $4,000 loss curious and European for.
[SPEAKER_03]: maybe head you know out of it a little bit or all of it and I can take your answer up here.
[SPEAKER_00]: Well, thank you for the call.
[SPEAKER_00]: Thank you for the kind of words.
[SPEAKER_00]: Microsoft's interesting case because if you look at from kind of from a valuation perspective, it's frankly on the cheaper side.
[SPEAKER_00]: It's very soft for heavy meaning.
[SPEAKER_00]: They don't have a lot of
[SPEAKER_00]: when it comes to AI and the worries that AI will use a lot of what they do and allow end users to make these products on the room.
[SPEAKER_00]: So Microsoft in many ways is getting caught up in that.
[SPEAKER_00]: And we know to some degree, there's going to be parts of what AI can do that weighs on certain software names.
[SPEAKER_00]: Let's sum more than others.
[SPEAKER_00]: And to me, Microsoft is one of those ones that's more insulated.
[SPEAKER_00]: Just because of the diversity of their income streams, different types of software that they sell, their investment in AI in general.
[SPEAKER_00]: And so they're going to benefit in that way.
[SPEAKER_00]: And I just use it as a business owner.
[SPEAKER_00]: We're actually deepening what we're doing of Microsoft right now.
[SPEAKER_00]: And frankly, the complexity of it or at least the way it makes complex workflows, complex workflows, simple,
[SPEAKER_00]: is making me actually more excited about the name.
[SPEAKER_00]: We're building some amazing tools, allowing us to scale and really track client paperwork and if clients need money and not having to call around to everybody on the team, it just kind of flows, the workflows just flow in there.
[SPEAKER_00]: And there's ways to plug AI to improve the process and all of that.
[SPEAKER_00]: So as a business owner and a user of Microsoft software, I see nothing that tells me a is going to have a stop using it.
[SPEAKER_00]: So in the medium to long term, I actually like Microsoft, but here's the issue.
[SPEAKER_00]: As I said at the top of the show, the mag seven, they're not doing very well.
[SPEAKER_00]: And what's the M in mag?
[SPEAKER_00]: It's that's Microsoft.
[SPEAKER_00]: So the flows right now are coming out of these names
[SPEAKER_00]: So in the short term, I'm actually pretty bearish on Microsoft.
[SPEAKER_00]: To me, it's your time frame here.
[SPEAKER_00]: If you're a longer term investor, you're kidding, I'm a pretty cheap price.
[SPEAKER_00]: I mean, free cash flow, 73 billion on a $2.8 trillion market cap, about a 3% free cash flow yield.
[SPEAKER_00]: That's pretty good.
[SPEAKER_00]: Clean balance sheet, pretty much no debt.
[SPEAKER_00]: Now, they're not buying back shares like they used to.
[SPEAKER_00]: I would like them to.
[SPEAKER_00]: But there's certainly still, I don't want to say that oh, there's guaranteed they're gonna skate paths.
[SPEAKER_00]: They IR and be fine and be a big winner.
[SPEAKER_00]: I'm not saying that's guaranteed or anything.
[SPEAKER_00]: I just think they're well suited for this era.
[SPEAKER_00]: So I know you're down, what was the 4% you said?
[SPEAKER_00]: I think you could very well to be down more in the near term, but long term, I would be older.
[SPEAKER_00]: Let's go answer a YouTube comment question says, what do your Selena Marie says?
[SPEAKER_00]: What do you thought's on Schwab Schwab has good revenue growth, low debt, large margins, a solid moat and a growing dividend.
[SPEAKER_00]: If you were into, if you were to enter a position, what would be your entry point?
[SPEAKER_00]: Well, we own Schwab for our clients.
[SPEAKER_00]: We have for some time.
[SPEAKER_00]: Now, it's certainly had a bit of a, let's say Rocky here, definitely.
[SPEAKER_00]: S.C.H.W.
[SPEAKER_00]: is a simple.
[SPEAKER_00]: It closed the year, right amount of $100 per share, now we're at 94 in change, so it's not important in the market this year, but he zoom out to a weekly chart, it's still in a very good long-term uptrend, bottomed in the April of 2023 at $46 and we got it in the 50s, something like that.
[SPEAKER_00]: Now we're at $94 per share, earnings this year is supposed to be, well, it's not
[SPEAKER_00]: $6.15, then $7.33 next year.
[SPEAKER_00]: So based on forward-looking earnings, you're talking a mid to low-teens multiple.
[SPEAKER_00]: With earnings up 26th of this year up 19% next year, as you said, good balance sheet, good margins, good note, growing dividend, and other dividend doesn't look great, 1.2% dividend yield, but it consistently raises that dividend.
[SPEAKER_00]: Here in equity, 19%, net cash on its balance sheet,
[SPEAKER_00]: You're at a Bishwob?
[SPEAKER_00]: I'm just buying out.
[SPEAKER_00]: I'm next to the best stock we'll look into the story.
[SPEAKER_00]: The Fox Roku Deal, what Big Media MNA tells us about the streaming economy.
[SPEAKER_00]: Fox announced a $22 billion deal that requires streaming.
[SPEAKER_00]: The device maker Roku this week, a blockbuster movie that signals how traditional media companies are racing to control, living room, hardware.
[SPEAKER_00]: We will look into what the mega merger reveals about the economic, subs streaming, the value of distribution, and what consolidation means for consumers and investors.
[SPEAKER_00]: But for now, I'm Justin Klein, and we're going to take your calls at 88899 chart.
[SPEAKER_00]: At KPP Financial, a accountability means more than advice.
[SPEAKER_00]: It means we invest alongside you, through our parallel investing approach.
[SPEAKER_00]: When we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.
[SPEAKER_00]: same day, same price, same percentage.
[SPEAKER_00]: If your portfolio moves, ours does too.
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[SPEAKER_00]: That is the KPP difference.
[SPEAKER_00]: Visit investtalk.com to get your free portfolio review.
[SPEAKER_02]: Get ready for an all-new Invest Talk Wealth webinar beyond the yield.
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[SPEAKER_02]: Tuesday, June 30th, noon to one Pacific time.
[SPEAKER_02]: Learn more and register now at investtalk.com.
[SPEAKER_00]: Our main focus point today is about Bitcoin's identity crisis.
[SPEAKER_00]: Is it still a store value or just simply a speculative toy?
[SPEAKER_00]: Bitcoin kind of hanging around the mid 60,000 mark today, but well off it's high of 126,000.
[SPEAKER_00]: Just last fall, not long ago less than a year ago.
[SPEAKER_00]: So we're down roughly 50%.
[SPEAKER_00]: They said it's low, this year we're down 50% plus.
[SPEAKER_00]: Ethereum fell to about 1,500.
[SPEAKER_00]: It's long and dropped with a 70% from its peak.
[SPEAKER_00]: The total crypto market cap is down $2 trillion from its high.
[SPEAKER_00]: So let's talk about potentially why.
[SPEAKER_00]: And what this teaches us about this asset class.
[SPEAKER_00]: Number one is it's impacted.
[SPEAKER_00]: by a lot of the same things broader equities are.
[SPEAKER_00]: The liquidity, but there are other aspects that make it more fragile.
[SPEAKER_00]: There's not a lot of substance behind it.
[SPEAKER_00]: In fact, there's no substance behind it.
[SPEAKER_00]: There's no utility to it.
[SPEAKER_00]: Remember, with equities at least, there's some asset there.
[SPEAKER_00]: There's a hard asset.
[SPEAKER_00]: Even if it's not cash, it's maybe a building, some equipment, some intellectual property,
[SPEAKER_00]: There's something there that can be utilized by another business to produce value in the economy.
[SPEAKER_00]: Crypto for the most part does not have that, especially Bitcoin.
[SPEAKER_00]: So as inflation continue to where it's ugly head.
[SPEAKER_00]: and the market started to price in a more hawkish fed, crypto was more sensitive to that.
[SPEAKER_00]: Then we had the Iran war intensified the hawkish fed narrative.
[SPEAKER_00]: And those in the Middle East that were cut off from being able to ship their oil because the streets were misheard closed.
[SPEAKER_00]: Well, they sold water acid.
[SPEAKER_00]: They could, in a lot of cases, that was Bitcoin.
[SPEAKER_00]: Then you also had a reversal of flows.
[SPEAKER_00]: If you have one lesson to take away from this segment,
[SPEAKER_00]: is that flows matter far more than anyone thinks.
[SPEAKER_00]: It is the most important driver of near-term returns of any asset class.
[SPEAKER_00]: And one of the big reasons Bitcoin was so high last year was twofold.
[SPEAKER_00]: Number one was, we're all those Bitcoin ETFs.
[SPEAKER_00]: Like I bit, new money flowing in.
[SPEAKER_00]: And then there was micro strategy,
[SPEAKER_00]: up Bitcoin.
[SPEAKER_00]: Well, both of those are starting to reverse those flows.
[SPEAKER_00]: U.S. spot, Bitcoin ETFs recorded 13 consecutive days of net outflows from May 15th to June 3rd.
[SPEAKER_00]: The longest streak since their January 2024 launch, $4.4 billion were drained from these ETFs.
[SPEAKER_00]: Now that is slowed, so we're not seeing as much liquidity drain from those ETFs, but we're not seeing positive lows either.
[SPEAKER_00]: So until you get durable demand from institutions, you're unlikely to see an uptrend in Bitcoin.
[SPEAKER_00]: Then they're strategy or micro strategy.
[SPEAKER_00]: They solve 32 Bitcoin last month.
[SPEAKER_00]: 32 is not a lot, so it's minimal, but it's a psychological impact.
[SPEAKER_00]: And the fact that they start buying anymore.
[SPEAKER_00]: So those are the drivers here.
[SPEAKER_00]: And I think there's one other untalked about driver.
[SPEAKER_00]: And that is world liberty financial, Trump coin, millennia coin, all of the Trump administration related crypto endeavors.
[SPEAKER_00]: There was a study by Reuters looking at everything since the election.
[SPEAKER_00]: And what they found was pretty astonishing.
[SPEAKER_00]: The Trump family alone generated $2.3 billion in profits from these crypto ventures.
[SPEAKER_00]: And the core layer to that, it's $2.3 billion of net losses from crypto investors.
[SPEAKER_00]: So where do you think that money went?
[SPEAKER_00]: You think they just took that money and put it in Bitcoin now?
[SPEAKER_00]: They most likely offloaded it to Fiat.
[SPEAKER_00]: And then there's another drain of liquidity from the crypto system, right?
[SPEAKER_00]: The document ecosystem where people are they putting new fiat currency into Trump coin, no, probably they're transferring it from some sort of, they made from Bitcoin, another cryptocurrency, a stable coin, whatever it is, that money is likely even drained from the crypto system.
[SPEAKER_00]: No, Bitcoin is not a store of value.
[SPEAKER_00]: Store of value doesn't drop 50% in, what are we, eight months?
[SPEAKER_00]: And when the president of the United States and the people around him are running these crypto endeavors the way they are.
[SPEAKER_00]: All it does is make it seem a lot more like a speculative toy, because that's how they're treating it.
[SPEAKER_00]: That's how the,
[SPEAKER_00]: The powers that be the regulators are treating it.
[SPEAKER_00]: They're not doing anything about this, right?
[SPEAKER_00]: Where's the value that's being created?
[SPEAKER_00]: Can't be a store of value when it's not creating value.
[SPEAKER_00]: So you must treat it as such.
[SPEAKER_00]: You must treat it as a speculative toy because fortunately, I love the ethos of Bitcoin and maybe we get there one day, but two day, based on the players if in the space, it is absolutely a speculative toy.
[SPEAKER_00]: Let's keep moving and drop it another listener question now.
[SPEAKER_04]: Hey, guys, Brad from Texas, I have a question on zebra, ZBRA, long term holder, considering weighing my options moving into something else and transitioning to another sector, however, I continue to hold faith.
[SPEAKER_04]: At the fundamentals are looking much better and they have recent earnings beat but still struggling to break out from its current resistance levels with analysts calling for a higher target.
[SPEAKER_04]: I wanted to know what your current thoughts are if you think there's better opportunities elsewhere.
[SPEAKER_04]: Look forward to hearing your answer.
[SPEAKER_00]: Thank you.
[SPEAKER_00]: Looking at Zebra technology, ZBRA is the symbol, Mark Kappa 11 billion dollars.
[SPEAKER_00]: So they're in $20.58 next year, $18.55.
[SPEAKER_00]: This year, the $232 stock.
[SPEAKER_00]: So based on forward looking at earnings, we're about 11 times multiple.
[SPEAKER_00]: Pretty cheap.
[SPEAKER_00]: Now what do they do?
[SPEAKER_00]: They basically make RFID devices to track inventory,
[SPEAKER_00]: They have software that allows them to, you know, the end user or the company to track their products using their, their products and software and the leader within the space.
[SPEAKER_00]: Chernecule 11 and half percent, which is not amazing, but not terrible.
[SPEAKER_00]: Good balance sheet about $3 billion in that debt in the $11 billion market cap, free cash flow 836 million dollars.
[SPEAKER_00]: So based on that, your free cash flow yield is somewhere around 7.5% which is very good.
[SPEAKER_00]: What is it doing with that cash flow?
[SPEAKER_00]: Well, it does continue to buy back shares.
[SPEAKER_00]: A 10% of shares have been retired over the past five years.
[SPEAKER_00]: It's just pretty good, not dramatic, but pretty good.
[SPEAKER_00]: The issue is the chart, right?
[SPEAKER_00]: It's in a downtrend.
[SPEAKER_00]: So not horrible, but very minimally.
[SPEAKER_00]: So that would be my worry is that near term, I want momentum.
[SPEAKER_00]: I like to see momentum as stocks I own, a positive momentum anyway.
[SPEAKER_00]: This is certainly negative momentum.
[SPEAKER_00]: So to me, it's a name that you keep on the shelf, keep on the watch list.
[SPEAKER_00]: And you wait for the market to realize,
[SPEAKER_00]: What it's missing, which is a very quality, solid business, good balance sheet, good growth, good capital allocation.
[SPEAKER_00]: What it's not a name that I think is going anywhere in the short term business, not telling you it is.
[SPEAKER_00]: You really want to see some sort of price, you know, breakout here.
[SPEAKER_00]: Now, if you already own it, I'd probably just keep a tight stop on it, right?
[SPEAKER_00]: It's a low for the year, which is right on 200.
[SPEAKER_00]: Because in the weekly it is consolidating bullishly in the short term, so could get ready for a break out, but for breaks 200, I'd be happy.
[SPEAKER_00]: Now let's pay it over to another.
[SPEAKER_00]: Call a question.
[SPEAKER_00]: Yeah.
[SPEAKER_07]: Guys, I like your show, Mark from San Diego.
[SPEAKER_06]: It's curious.
[SPEAKER_07]: That's a lot more.
[SPEAKER_07]: And the pseudo piece of agreements as opposed is going to happen by the weekend, which I seriously doubt will.
[SPEAKER_07]: What sectors would you expect to react to it?
[SPEAKER_07]: What were the sectors that would probably run up and sectors that would part run down, just looking to see which way this would detect the overall market at least in the U.S. As well as globally.
[SPEAKER_07]: Any thoughts on it would be great.
[SPEAKER_07]: You'll see me on the show.
[SPEAKER_07]: Thank you.
[SPEAKER_00]: Well, I would temper and I would step back and say, is this the type of,
[SPEAKER_00]: investor you want to be chasing these little wiggles in geopolitical environment.
[SPEAKER_00]: What we like to do is what is the market actually doing?
[SPEAKER_00]: Yeah, you know, why, yes, why, why, why assume that that is what matters.
[SPEAKER_00]: The market will tell you what matters.
[SPEAKER_00]: What this could mean for, you know, what I assume it means, so we say, I care about what it is.
[SPEAKER_00]: And what I am seeing is a market that is rotating out of tech into industrials, even the healthcare starting to improve.
[SPEAKER_00]: The real story here isn't this piece deal in a rock.
[SPEAKER_00]: Frankly, it's very minor in the grand scheme of things.
[SPEAKER_00]: What matters?
[SPEAKER_00]: Liquidity.
[SPEAKER_00]: What's the driver liquidity?
[SPEAKER_00]: Not this piece deal?
[SPEAKER_00]: It's what's happening with Fed policy.
[SPEAKER_00]: What's happening with this IPO schedule?
[SPEAKER_00]: The largest IPO
[SPEAKER_00]: issuance in history, what had been huge tailwinds for many years of mag seven names taking being so profitable, producing so much free cash, they did not know what to do with it, what did they do with it, they bought back shares.
[SPEAKER_00]: that reduce the supply of shares in the marketplace and what happens when the man stays the same or goes a little bit higher and supply drops, prices go up.
[SPEAKER_00]: What's happening now?
[SPEAKER_00]: The inverse.
[SPEAKER_00]: A lot of the Mac 7 names are no longer buying back shares or reducing the amount of shares they're buying back at least.
[SPEAKER_00]: Then you have SpaceX with the largest IP on history.
[SPEAKER_00]: You have Google raising $80 billion.
[SPEAKER_00]: You have OpenAI and Thropic coming on board.
[SPEAKER_00]: Not to mention a few dozen others as well.
[SPEAKER_00]: That is what matters.
[SPEAKER_00]: I always say this.
[SPEAKER_00]: Just because it's in the headlines, does not mean you should react to it.
[SPEAKER_00]: Does not mean the market is reacting to it.
[SPEAKER_00]: When you go on C and B C, you read the article.
[SPEAKER_00]: Oh, the market was up because of XYZ.
[SPEAKER_00]: The market was down.
[SPEAKER_00]: That's there a assumption.
[SPEAKER_00]: That's the assumption of the writer of that article.
[SPEAKER_00]: That does not mean it's factual.
[SPEAKER_00]: So folks, listen to headlines, focus on what the market is doing and the market is rotating right now because those other factors, not because of this peace group.
[SPEAKER_00]: Those are Vestock, I'm Dustin Klein.
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[SPEAKER_00]: They help you achieve your own version of nature.
[SPEAKER_00]: Freedom, and I work at the news after this final break.
[SPEAKER_00]: The good questions are now at 80-89 chart.
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[SPEAKER_00]: Looking at sales force, CRM is the symbol another software name that is down in the dumps.
[SPEAKER_00]: Ralthist strength is 8, which means 92% of stocks have done better than this over the past year.
[SPEAKER_00]: Despite earnings, what's we up 30% this year, lovers that next year to $15.60.
[SPEAKER_00]: And it's $155.00, so about a 10 times forward looking multiple, which is pretty cheap.
[SPEAKER_00]: There are a lot of landmines in the software space, but you only know in hindsight.
[SPEAKER_00]: There are also a lot of bargains, a lot of names that can effectively fendoth AI that have built in advantages that make them hard to replace by simply vibe coding something with cloud code, for example.
[SPEAKER_00]: So the question when you're looking at any of the names
[SPEAKER_00]: Is it a real winner or the big problems ahead?
[SPEAKER_00]: Salesforce runs, that's why CRM's.
[SPEAKER_00]: Customer relationship management software.
[SPEAKER_00]: It's effectively a simple database.
[SPEAKER_00]: All the contact information, all the notes throughout the years, et cetera, very simple.
[SPEAKER_00]: We have it for, I don't even know what our database is, 25,000, 30,000 people.
[SPEAKER_00]: We use a competitor to them called red tail.
[SPEAKER_00]: But it's a very simple piece of software.
[SPEAKER_00]: It's something AI can certainly vibe code.
[SPEAKER_00]: You could vibe code with AI.
[SPEAKER_00]: It is not hard.
[SPEAKER_00]: So why would people pay so much companies pay so much for this type of software?
[SPEAKER_00]: Especially Salesforce, it is expensive.
[SPEAKER_00]: We looked at it, they have a,
[SPEAKER_00]: Specialized pieces offer for industry.
[SPEAKER_00]: It's kind of like red tail, but red tail is for industry and it's all we need.
[SPEAKER_00]: It's simple.
[SPEAKER_00]: It's great.
[SPEAKER_00]: Way less expensive.
[SPEAKER_00]: So we've always stuck with it for 15 years.
[SPEAKER_00]: So to me, this is the type of name that will probably over the long term melt away.
[SPEAKER_00]: And now it is cheap for a very good reason.
[SPEAKER_00]: Now, couldn't get a bounce, sure.
[SPEAKER_00]: I think the whole space will get a bounce at some point.
[SPEAKER_00]: But ultimately, I'm not a long-term holder of Salesforce.
[SPEAKER_00]: That was CRM.
[SPEAKER_00]: Now, the close, let's talk a little bit about is two.
[SPEAKER_00]: There's three of the new two.
[SPEAKER_00]: Meaning the Fed, the ECB, the Bank of England.
[SPEAKER_00]: They're all sitting at inflation levels, or seeing inflation levels above two, but they're not actively raising rates, which tells you that they're scared, and they're comfortable with everything above two.
[SPEAKER_00]: In Kevin Worst said he was more worried about having the number to the left of the decimal place, which sounded like F2.3, 2.8, eh, it's fine.
[SPEAKER_00]: This, and inflation expectations across the U.S. Eurozone UK, all above two, once again that not actively tightening policy.
[SPEAKER_00]: So that's the moral of the story from this Fed meeting, and really, essentially makes it around the world, is that they're okay with running it hot.
[SPEAKER_00]: They're okay with a little bit of inflation.
[SPEAKER_00]: They don't want deflation.
[SPEAKER_00]: Which tells you, and I've said it's before, is that the risk going forward is not an OAD-flationary bust, but an inflationary spiral that actually pushes that grudyshyder because crisis is in the economy or higher.
[SPEAKER_00]: That is how you want to frame your thinking in it today's market.
[SPEAKER_00]: Well, I'm Justin Klein reminding you about KPP Financial's Parallel Investing.
[SPEAKER_00]: when we make a trade for our clients, we make the same trade for ourselves, same day, same price, same percentage, no front running, no special treatments, which means we invest right alongside our clients, and you can learn more by heading over to investtalk.com.
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