[SPEAKER_03]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.
[SPEAKER_03]: Here's your host, Luke Guerrero.
[SPEAKER_00]: Good afternoon, fellow investors, and welcome to Invest Talk.
[SPEAKER_00]: I'm your host Luke Guerrero.
[SPEAKER_00]: It is Monday.
[SPEAKER_00]: The first day of the week.
[SPEAKER_00]: It is the first day of the month.
[SPEAKER_00]: And the first day of the last month of this quarter.
[SPEAKER_00]: As you can imagine, time has moved pretty fast.
[SPEAKER_00]: We are well underway.
[SPEAKER_00]: We are almost halfway through the year.
[SPEAKER_00]: So we have no time to waste.
[SPEAKER_00]: So before we talk about today's market performance and go over our show topics, why don't we tackle our first color question now?
[SPEAKER_05]: Hey, oh, I was calling about Nike and K.E.
[SPEAKER_05]: He that was down over 60%.
[SPEAKER_05]: How's this wondering if now would be a good time to get in on it?
[SPEAKER_05]: Wanted to know your thoughts.
[SPEAKER_05]: Thank you.
[SPEAKER_05]: I appreciate it, bye.
[SPEAKER_00]: Nike, ticker NKE.
[SPEAKER_00]: He's one of the most well-known clothing brands.
[SPEAKER_00]: Probably on the planet.
[SPEAKER_00]: They are famous for their large athletic footwear division.
[SPEAKER_00]: They're a parallel division Nike, Jordan brand,
[SPEAKER_00]: And they are in the midst of a tournament.
[SPEAKER_00]: And that's because this has been one of the most painful drawdowns in probably the history of the large cap consumer space.
[SPEAKER_00]: I mean Nike has lost roughly 70% from its all-time high of 165 and is trading your multi year lows at around $46 per share.
[SPEAKER_00]: It is down 27.91% year to date.
[SPEAKER_00]: And so it has some upcoming earnings in June that I think are pretty critical to understanding what position they're in because in their most recent earnings on March 31st.
[SPEAKER_00]: Revenue was down 3% year over year.
[SPEAKER_00]: And that was a beat revenue being down.
[SPEAKER_00]: So that's depressing.
[SPEAKER_00]: That income was down 35% year over year.
[SPEAKER_00]: Gross margin was down 1.3%.
[SPEAKER_00]: They have been dramatically affected by tariffs as well.
[SPEAKER_00]: And so you're seeing analysts continue to ground to downgrade this name.
[SPEAKER_00]: You're seeing the accompanied self guiding Q4 fiscal year 2026 revenue.
[SPEAKER_00]: Just negative 4% year over year.
[SPEAKER_00]: Wall Street was expecting plus 1.9.
[SPEAKER_00]: It's not all negative.
[SPEAKER_00]: I mean, the company does have authorization for an $18 billion buyback.
[SPEAKER_00]: They do have a 24-year dividend growth history.
[SPEAKER_00]: They do have a pretty solid yield right now, about 3.6% for 2026.
[SPEAKER_00]: And they have one of the most iconic athletic brands with genuine wholesale recovery in North America.
[SPEAKER_00]: And because of this drawdown, I mean, they're trading at pretty low valuation 25 times price to forward Laguna.
[SPEAKER_00]: And it's nearly the lowest been, it's lowest, it's been in the past five years.
[SPEAKER_00]: But as a lot negative, I mean, greater China, their Chinese segment guided down 20% in Q4, Converse down 35, their gross margins are compressing, a lot of which is due to tariffs.
[SPEAKER_00]: They are on the path of an 18-month turnaround story with no visible revenue inflection.
[SPEAKER_00]: And so, you know, there's a reason, it is one of the most hated great brands in the market, especially from investors, especially given what's happened over the past couple years.
[SPEAKER_00]: And so with no end insight to this drawdown, even though it's at multi-year lows, I don't see any reason to enter here.
[SPEAKER_00]: There's Nike, ticker, and K, thanks to the call.
[SPEAKER_00]: We had a great show for you on Friday.
[SPEAKER_00]: We looked into deep sea experiment price cuts and talked about what AI commandization means for tech investors.
[SPEAKER_00]: We also answered a question on Eli Lillian companies.
[SPEAKER_00]: If you missed that episode, feel free to go check it out.
[SPEAKER_00]: And remember, the best way to never miss a show is to follow and best talk wherever you get your podcasts.
[SPEAKER_00]: Let's talk about today, where a main focus point will be how to invest in volatile markets without panic, because investors are being told to stay calm, but markets today are reacting to more than earnings and interest rates, supply chains, tariffs, geopolitical conflicts, shipping disruptions.
[SPEAKER_00]: They are now directly impacting portfolio, so how do you invest without making emotional decisions?
[SPEAKER_00]: Also, we'll touch on the big three IPOs this year and whether or not the market really can handle all of them at the anthropic space exit open AI.
[SPEAKER_00]: We'll also give an update on the Iran situation as new clashes and oil prices higher and bond yields higher as well.
[SPEAKER_00]: Should we have time with the end of the show?
[SPEAKER_00]: We'll talk about private credit.
[SPEAKER_00]: We also have some voice bank calls ready to play, including one on a tenant healthcare corporation, another on the Hartford Insurance Group.
[SPEAKER_00]: As well as some questions that came in
[SPEAKER_00]: We had it in New Break.
[SPEAKER_00]: It is our first break and it is a quick one.
[SPEAKER_00]: Please remember you can call any time and leave your questions on the Invest Talk of Voice Bank.
[SPEAKER_00]: If you're listening to our live streamer on and 1220 in the Bay Area, give me a call now at 888-99 chart.
[SPEAKER_00]: When we come back, we'll talk about today's market activity.
[SPEAKER_03]: This is Invest Talk, now closing in on 63 million downloads.
[SPEAKER_03]: And Luke Guerrero is here, taking your questions live.
[SPEAKER_03]: 88899 chart.
[SPEAKER_00]: On to the market today, where U.S. stocks finished mixed the S&P and NASDAQ setting yet another round of fresh record closes, though only two sectors were higher and small caps under performed.
[SPEAKER_00]: And as that gained four tenths per percent, the S&P added a quarter, that I was roughly flat while the Russell 2000 fell about half a percentage point.
[SPEAKER_00]: Now the session featured pretty familiar push and pull between oil and yields moving higher on cautious Middle East updates and AI enthusiasm continuing to underpin what has been a risk on moot.
[SPEAKER_00]: Meanwhile, WPI crewed a surge to 5.5% bouncing off of last week's nearly 10% decline after Iran, state media and Tehran, or said Tehran has suspended mediator lead talks and will fully block the straight of Hormuz.
[SPEAKER_00]: But the afternoon tone improved a bit after Israel reported delayed planned strikes on Lebanon.
[SPEAKER_00]: Washington's request and Trump said Iran talks are continuing.
[SPEAKER_00]: What they hope for is an eventual resolution despite the ongoing setbacks.
[SPEAKER_00]: Treasure yields backed up three to four bases points at the short end of the curve flattening.
[SPEAKER_00]: Now the rotation into software was probably the standout story under the surface.
[SPEAKER_00]: The eye share software ETF is now rallied roughly 16% over the past three sessions and has outperformed semis for four straight sessions a dramatic reversal for a space that was one of the market's biggest punching bags just a few weeks ago.
[SPEAKER_00]: Large-tap semis and memory also rallied on the day with Nvidia and Microsoft leading the Maggie 7.
[SPEAKER_00]: Video's compotex announcement included a new RTX Spark chip for the first personal laptops designed to run AI agents.
[SPEAKER_00]: Anthropic confidentially filed for an IPO and Intel is pointing to ship a new AI chip by year-end designed to accelerate tasks.
[SPEAKER_00]: The M&A headline space was pretty busy today, but your halfway acquiring Taylor Morrison for 7250 a share in an $8.5 billion deal.
[SPEAKER_00]: And very dealers people confirmed an offer to acquire MGM for 48.30 in cash.
[SPEAKER_00]: Diving into sectors, airlines, cruise lines, banks, autos, housing linked retail, apparel, defense, and building materials.
[SPEAKER_00]: All underperformed on the day, well, energy, home builders, casinos, and tech hardware, fair, very well.
[SPEAKER_00]: The data front ISM manufacturing beat expectations and came in at its highest levels since May 2022 prices paid to the lower that remained elevated and employment improved, but stayed in contraction territory while construction spending also beat $3.3% gold fell nearly 2% silver edged a bit lower.
[SPEAKER_00]: We're going to head to the rest of the week, Jolt's job openings, the highlight on tomorrow's calendar, this week building towards Wednesday's ISM services in Facebook and Fridays May employment report.
[SPEAKER_00]: All right, let's go with a YouTube question and take a look at, see, what are we going to do here?
[SPEAKER_00]: Yeah, this question right here, it says, games workshop to your GMWKF,
[SPEAKER_00]: GMW KSY80R looks like a great revenue on licensing strategy, although it is very liquid, is the illiquidity enough to deter one for making it a position in a growth portfolio.
[SPEAKER_00]: Thanks for answering.
[SPEAKER_00]: All right, let's take a look at this.
[SPEAKER_00]: This is Games Workshop GMWKF is the ticker.
[SPEAKER_00]: And, you know, I think game's work shop, right?
[SPEAKER_00]: As always, it is probably a pretty fascinating company, and most people have never heard of it.
[SPEAKER_00]: So what they do is they design, manufacture, and sell miniature, war-gaming figures, as well as tabletop games.
[SPEAKER_00]: They have two segments, their core, which is their miniatures, paints, and accessories.
[SPEAKER_00]: And they're licensed, so their video games, their TV film, merchandising, and publishing.
[SPEAKER_00]: Their core revenue is about 625 million pound sterling, they're licensing revenue, it's around at least 30 million pound sterling.
[SPEAKER_00]: And the business is really good because margins are crazy, gross margins are 65 to 70% they design plastic miniatures and manufacture them pretty cheaply.
[SPEAKER_00]: And the recurring revenue is built into the model.
[SPEAKER_00]: They are new additions, their rulebooks, their expansions, their paints, their accessories.
[SPEAKER_00]: They create an ongoing spending cycle and they have pretty much no competition.
[SPEAKER_00]: There's no real competitor at scale in tabletop miniature working.
[SPEAKER_00]: But with all this being said,
[SPEAKER_00]: What about their illiquidity?
[SPEAKER_00]: Because this is the key issue.
[SPEAKER_00]: How liquid are we talking?
[SPEAKER_00]: Well, GMWKF, their ordinary shares, they trade over the counter.
[SPEAKER_00]: They are extremely thin.
[SPEAKER_00]: Some days, they share, only if you're rather they trade, only a few hundred shares a day.
[SPEAKER_00]: Let's take a look at GWSKY.
[SPEAKER_00]: Well, GWSKY, or GWKSY, that is.
[SPEAKER_00]: Slightly better, but still pretty low volume.
[SPEAKER_00]: The primary listing on the London Stock Exchange is kind of where the real liquidity lives, but US investors need international brokerage access.
[SPEAKER_00]: Now, one other thing here, in terms of their ADRs, it still hasn't been trading, or it's been trading for just over a year now.
[SPEAKER_00]: And volume still pretty thin.
[SPEAKER_00]: I mean, there's an 8 billion dollar market cap company that is very thin.
[SPEAKER_00]: Volume, you're going to get wide bit of spreads.
[SPEAKER_00]: You could lose one to 3% just on the spread and touring and exiting a position.
[SPEAKER_00]: You're going to get slippage on a large order.
[SPEAKER_00]: So if you try to buy yourself, I don't know, 50,000 worth.
[SPEAKER_00]: That's going to move the price against you and the biggest problem is.
[SPEAKER_00]: When you have liquidity like this, rather ill-equited, you can't really exit quickly if you need to.
[SPEAKER_00]: And so if you are going to buy into this name, smaller position sizes, limit orders are essential.
[SPEAKER_00]: You never want to use a market order on an OTC name that is this thing for a significant position, which is the real concern, 5% of your portfolio.
[SPEAKER_00]: You can't really efficiently rebounds trim or exit.
[SPEAKER_00]: OTC positions without getting heard on the spread.
[SPEAKER_00]: And so the bottom line is, right, it is a high quality business.
[SPEAKER_00]: But, you know, it's, it's, it's, in spite of its brilliance and its licensing strategy, which is essentially free revenue on IP they already own.
[SPEAKER_00]: Well, it could it is, it's a legitimate concern.
[SPEAKER_00]: I wouldn't say it's a deal breaker, especially if you're working on smaller sizes.
[SPEAKER_00]: Obviously, the best play is to, to get, you know, an international access and just buy their, their main line in J.A.W.
[SPEAKER_00]: But if you have to choose between the two of these, certainly the GWKSY because there's a bit better liquidity would be the way to go.
[SPEAKER_00]: Thanks for watching.
[SPEAKER_00]: Now, I briefly mentioned it on Friday, but we are doing yet another invest talk, wealth webinar this month, and it's gonna be focusing on how to structure income portfolios.
[SPEAKER_00]: We're gonna be going beyond the yield to decipher all of your income needs as well as the options that you have.
[SPEAKER_00]: As always, our wealth webinars are free,
[SPEAKER_00]: to participate.
[SPEAKER_00]: We're excited for it.
[SPEAKER_00]: Can't wait to see it.
[SPEAKER_00]: Headed into break, still to come our main focus point.
[SPEAKER_00]: And as always, more answers to your burning and finance and investment questions.
[SPEAKER_00]: So give me a call.
[SPEAKER_00]: Answer or question.
[SPEAKER_00]: Ask it live, rather.
[SPEAKER_00]: You know the number, 888-99 chart.
[SPEAKER_03]: You've got finance and investment questions and the invest talk phone lines never close.
[SPEAKER_03]: Call any time, 88899 chart.
[SPEAKER_00]: Looks like we got our first live call, Sammy from San Francisco with me on AM 1220 in the Bay Area.
[SPEAKER_00]: Looks like you got a question about into it.
[SPEAKER_00]: Do you own any looking to buy it?
[SPEAKER_06]: I'm actually looking to buy it.
[SPEAKER_06]: And since I have you here online, so it'll be good to hear your comments around the general sector as a whole software, as I mentioned, as, you know, when doing better or as in the last few days, what should take on that?
[SPEAKER_06]: But of course, I want to hear your thoughts on interview first.
[SPEAKER_00]: Sure, let's take a look at Intuit, Intuit is, of course, the company that is famous for TurboTax QuickBooks, Credit Karma, MailChimp.
[SPEAKER_00]: They are a Silicon Valley-based financial technology platform, so they offer both enterprise solutions to businesses as well as customers.
[SPEAKER_00]: Now,
[SPEAKER_00]: They had a beat and a race with guidance and announced shortly thereafter, about a 17% workforce reduction.
[SPEAKER_00]: Now the stock dropped to 11% after hours on the layoff news, but it's recovered quite a bit.
[SPEAKER_00]: It's up 6.71% today, but still well below where it was at the beginning of the year.
[SPEAKER_00]: uh... when it was trading round six seventy six fifty per share now trading it about three fifty three minutes drawn down about forty six point six zero percent year to date and that's in spite of revenue being up ten point four percent year over year and their most recent earnings you know they beat their um... they had earnings per share non-gap earnings per share beat by about two point six percent so what's going on here
[SPEAKER_00]: Well, you know, it's recovered a bit.
[SPEAKER_00]: It's recovered a bit in the past two months, it's only down 13%, but it's still trading at a valuation that is really low.
[SPEAKER_00]: Considering where it's been over the past five years, I mean, it was once trading as high as 58 times, price to forward looking earnings, screen about 12 times, price to forward looking earnings.
[SPEAKER_00]: They did have a threat while back with IRS direct file.
[SPEAKER_00]: You know, that was shut down by the Trump administration.
[SPEAKER_00]: Is that permanent?
[SPEAKER_00]: Is that something that's going to come back?
[SPEAKER_00]: I would say it's still a bit looming here.
[SPEAKER_00]: You know, they do have the benefit of a combination of low valuation with solid growth in a time where the sector itself has just been absolutely beaten down.
[SPEAKER_00]: Now, it's not a positive, right?
[SPEAKER_00]: They did only grow turbo tax that is about 7% in peak tax season.
[SPEAKER_00]: That was below expectations.
[SPEAKER_00]: That was in spite of IRS direct file kind of being kicked to the curb.
[SPEAKER_00]: And so, you know, with this overall, let's say, just still dramatic recovery from April, fear lows.
[SPEAKER_00]: You know, it went from 390 to about 485 and one month as the market was re-rating and then it fell back down.
[SPEAKER_00]: I don't see it really as a company that's in distress.
[SPEAKER_00]: I think that amongst software as a whole, though,
[SPEAKER_00]: Intuit is in a space that is probably at the most threat from the consumer side, right?
[SPEAKER_00]: QuickBooks is something that is used really by small businesses and this is tying to your larger question of, you know, what is going on at the software space?
[SPEAKER_00]: I said when the drawdowns were happening.
[SPEAKER_00]: that I thought a lot of software was beaten down for no reason.
[SPEAKER_00]: I think there has been a lot of fear that some of these institutional companies, your Microsoft's, your sales forces, were beaten down because people thought that with the advances in quote unquote AI, there were a lot of big replacements.
[SPEAKER_00]: Now for those types of companies,
[SPEAKER_00]: The Microsoft and the Salesforce is I said, you know, the consumer revenue, small business revenue is a drop in the bucket compared to the Fortune 500 companies that are using these services.
[SPEAKER_00]: And these Fortune 500 companies, no CTO, chief technology officer is going to bank their entire career on switching from an established Salesforce type business to some vibe-coded internally managed system.
[SPEAKER_00]: It's just not going to happen.
[SPEAKER_00]: There is no efficiency at scale there.
[SPEAKER_00]: But for into it, a lot of their businesses, a lot of their business lines really cater to consumers and small business, QuickBooks, TurboTax, Credit Karma.
[SPEAKER_00]: And so for them, I think they're easy legitimate concern that some of these solutions from AI,
[SPEAKER_00]: can supersede their existing business lines.
[SPEAKER_00]: I think that's one of the reasons why you're seeing Turbo Tax have such low growth in 2026.
[SPEAKER_00]: And so I would separate into it from a lot of these other software companies.
[SPEAKER_00]: If I'm being frank, I think that software as a whole has been beaten down.
[SPEAKER_00]: I think that into it being beaten down those a bit more reasonable and I think we're still trying to figure out whether it's still trying to figure out where it's going to go from here.
[SPEAKER_00]: That is ticker.
[SPEAKER_00]: I end to you into it.
[SPEAKER_00]: Thanks for the call.
[SPEAKER_00]: Well, folks, when we come back from the break, we got yet another great focus point for you all.
[SPEAKER_00]: It's going to be about not panicking and not investing emotionally.
[SPEAKER_00]: And because it is our Monday focus point, as we typically do with our Monday focus points, we expand on this topic in our new, deeper, focus video series.
[SPEAKER_00]: So look for that to drop on Tuesday or Wednesday of this week over on our YouTube channel.
[SPEAKER_00]: If you haven't been there yet, I encourage you to check it out.
[SPEAKER_00]: Head over to YouTube and search in Vestock with two teas.
[SPEAKER_00]: On the next in Vestock, we'll look into this story.
[SPEAKER_00]: Is the 10-year treasure yield about to break out?
[SPEAKER_00]: What rising rates means for bonds and borrow?
[SPEAKER_00]: Treasurer yields are edging higher as U.S. Iran military exchanges or rattle markets, and inflation expectations climb creating a challenging environment for fixed income investors.
[SPEAKER_00]: We decode what's driving yield movement right now and weather bond investors should be repositioning for a higher for longer work.
[SPEAKER_00]: That's tomorrow.
[SPEAKER_00]: For now, I'm Luke Guerrero ready to take your calls at 888-99 chart.
[SPEAKER_01]: At KPP Financial, Accountability means more than advice.
[SPEAKER_01]: It means we invest alongside you, 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_01]: Same day, same price, same percentage.
[SPEAKER_01]: If your portfolio moves, ours does too.
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[SPEAKER_01]: Visit investtalk.com to get your free portfolio review.
[SPEAKER_03]: Get ready for an all-new Invest Talk Wealth webinar beyond the yield.
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[SPEAKER_03]: Tuesday, June 30th, noon to one Pacific time.
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[SPEAKER_00]: So we're about three months into the situation in the Middle East, and stay calm has been the most overused and probably least useful piece of advice that is proliferating amongst financial media.
[SPEAKER_00]: Everyone knows you are supposed to stay calm.
[SPEAKER_00]: Nobody really knows how, and the problem isn't that investor's lack composure.
[SPEAKER_00]: It's that the source of volatility.
[SPEAKER_00]: The sources have changed, in ways that make traditional investment frameworks feel a bit inadequate.
[SPEAKER_00]: And we're no longer dealing with a market driven primarily by earnings and interest rates.
[SPEAKER_00]: This market is being driven simultaneously by, in Middle East war, a straight-of-war moves blockade, a potential peace deal that might or not hold and seem to devolve a little bit today.
[SPEAKER_00]: Oil that swings 5% in a single session.
[SPEAKER_00]: inflation re-excelerating to 3.8% a new Fed share whose independence is already being tested, tear of policy that shifts by tweet.
[SPEAKER_00]: And, by the way, an AI-driven sector rotation, a $75 billion SpaceX IPO in 10 days, consumer sentiment at an all-time loan, a stock market that keeps hitting record highs, despite all of it.
[SPEAKER_00]: And when 9 of 11 S&P sectors close in the red, but the index still rises, because tech and energy carry the day, telling someone to stay calm is really missing the point.
[SPEAKER_00]: Now the first thing to internalize is that volatility itself is at the risk.
[SPEAKER_00]: The risk is what you do in response to the volatility.
[SPEAKER_00]: We covered the behavioral finance data we could go, talked about Oxford risk estimates, emotional investing cost roughly 3% per year in lost returns.
[SPEAKER_00]: CFA Institute analyzed the 10 worst single-day drops in history and found that in seven out of 10 cases, the market was higher within 10 trading days after that.
[SPEAKER_00]: Investors do so during the March cell-off funded the profits of the hedge fund that bought 86 billion at the bottom and the S&P has since rallied to all-time highs.
[SPEAKER_00]: The volatility wasn't the problem.
[SPEAKER_00]: The reaction to the volatility was that acknowledging that, especially in hindsight, is different from having a framework for dealing with it.
[SPEAKER_00]: So let me give you one that actually is practical in the current environment.
[SPEAKER_00]: First,
[SPEAKER_00]: Separate the signal from the noise by identifying which risks are priced, and which one's aren't.
[SPEAKER_00]: Oil at 92 is priced.
[SPEAKER_00]: The market knows about hormones, it knows about the ceasefire fragility, it knows Chevron CEO said buffers are depleting, and what isn't fully priced is the timeline for infrastructure repair.
[SPEAKER_00]: AdNox CEO said full or moves flows won't return until Q1 or Q2 of next year even with a deal.
[SPEAKER_00]: The gap between what the market expects quick resolution and what the operators are saying months to years of disruptions is where the unpriced risk sits.
[SPEAKER_00]: If we're going to act on anything, act on the gap between market expectations and operator reality.
[SPEAKER_00]: Second, build a portfolio that doesn't depend on a single
[SPEAKER_00]: The biggest mistake investors make during geopolitical crises is concentrating their portfolio around their best guess about the outcome.
[SPEAKER_00]: If you think the war ends and go all in on rate sensitive growth stocks, you can, and might, and probably will get crushed if the ceasefire collapses.
[SPEAKER_00]: If you think the war drags on and loads up on energy, you get a website on every peace headline.
[SPEAKER_00]: The correct approach.
[SPEAKER_00]: is to own assets that perform in different scenarios and accept that some part of your portfolio will always be underperforming.
[SPEAKER_00]: That's not a failure.
[SPEAKER_00]: That is quite literally what diversification is.
[SPEAKER_00]: It is diversification working as designed.
[SPEAKER_00]: Now, in the current environment, that means maintaining core equity exposure through broad index funds, keeping five to 10% in energy and commodities as an inflation and geopolitical edge, holding short duration bonds or money markets for the income and optionality that provides, rather that is provided at three and a half to four percent.
[SPEAKER_00]: maintaining a 5 to 10 percent gold allocation as a long-term debasement hedge that has recently started working again as peace hopes push the dollar lower and having enough cash to act on opportunities without having to sell at the wrong time.
[SPEAKER_00]: Third, dollar cost averaging is your friend.
[SPEAKER_00]: It removes timing decisions entirely.
[SPEAKER_00]: The single most effective strategy during volatile markets is also the most boring.
[SPEAKER_00]: That's how this thing worked, guys.
[SPEAKER_00]: Invest a fixed amount of regular intervals.
[SPEAKER_00]: Regardless of what's happening, you buy more shares when prices are low and fewer when they're high.
[SPEAKER_00]: It mechanically produces the opposite behavior of what emotional investors do and then eliminates the question is now a good time to invest because the answer is always yes, if you're investing consistently over years, not months and have a long-term lens, fourth.
[SPEAKER_00]: Rebalance.
[SPEAKER_00]: Don't react.
[SPEAKER_00]: If your target allocation is 60% equities, 30% bonds, 10% altts, and the equity rally is post stocks is 68.
[SPEAKER_00]: The correct move is the twin trim equities and add bonds, not because you're bearish on stocks.
[SPEAKER_00]: But because you're managing risk, rebalancing forces you to sell high and buy low systematically.
[SPEAKER_00]: It is the only free lunch and investing and it works precisely because it requires you to move against the market's momentum.
[SPEAKER_00]: fifth, extend your measurement period.
[SPEAKER_00]: Don't check your portfolio daily, guys.
[SPEAKER_00]: The worst thing that has happened is everybody traded on Robin had off their phone.
[SPEAKER_00]: And when you do it during a crisis, it's only going to give you more anxiety and increase the probability of making an emotional driven trade.
[SPEAKER_00]: The difference between checking daily and checking monthly can literally be the difference between panic selling at the bottom and holding through recovery.
[SPEAKER_00]: The S&B 500 has delivered positive returns in roughly 70% of calendar years since 1945.
[SPEAKER_00]: The average entry year to climb is about 14% even in years that end positive.
[SPEAKER_00]: If you measure performance over days, you will always find a reason to panic.
[SPEAKER_00]: If you measured over years, you'll almost always find a reason to stay invested.
[SPEAKER_00]: And that's the thing here.
[SPEAKER_00]: People always say investing is easy.
[SPEAKER_00]: Look at what the S&P does over the long term.
[SPEAKER_00]: That is true, but the hardest thing is actually holding it.
[SPEAKER_00]: The market right now, it's sending contradictory signals.
[SPEAKER_00]: Record highs alongside record low consumer sentiment, storing AI earnings alongside oil-driven inflation, peace optimism alongside continued home news closure.
[SPEAKER_00]: That dissonance, it's uncomfortable, and the human instinct is to resolve it by making a big move in one direction.
[SPEAKER_00]: Resist that instinct.
[SPEAKER_00]: The market can hold contradictions far longer than most investors can hold their nerve.
[SPEAKER_00]: Your job isn't to resolve the contradiction, it's to build a portfolio that survives it, and to let compounding do the rest.
[SPEAKER_00]: Right, let's keep things moving.
[SPEAKER_00]: And take a look at this YouTube question on ticker R and MBY.
[SPEAKER_00]: It says, what do you think of R and MBY?
[SPEAKER_00]: I want to buy this stock because it has strong growth numbers.
[SPEAKER_00]: Another reason is the long-term trend seems strong.
[SPEAKER_00]: With Germany building in military backup, it seems like it will have steady profits for years to come.
[SPEAKER_00]: Alright, let's take a look at this name, it is.
[SPEAKER_00]: coming up.
[SPEAKER_00]: It is Ryan, Ryan Matel, AG, and this is an unsponsored ADR.
[SPEAKER_00]: Going back to 2021, performance has been very, very strong relative to the US market.
[SPEAKER_00]: I mean, in three of the past or three of the four years, past full four years, they have returned over 100%.
[SPEAKER_00]: In 2025, it was a 180% and I think your thesis is generally right.
[SPEAKER_00]: This is one of the best secular growth
[SPEAKER_00]: But the stock has pulled back pretty hard from all-time highs.
[SPEAKER_00]: You're today they're down 23% in the past 52 weeks, they're down roughly 35%.
[SPEAKER_00]: Now the real story here is their order backlock.
[SPEAKER_00]: 73 billion euros as of March 2026.
[SPEAKER_00]: That's up 56 billion a year ago.
[SPEAKER_00]: Their backup coverage is roughly 97% for 4-year 2026 revenue guidance.
[SPEAKER_00]: I mean, this year is essentially sold out.
[SPEAKER_00]: Their total backlog is projected to reach 135 billion euros by year end 2026.
[SPEAKER_00]: So nearly doubling from current levels.
[SPEAKER_00]: I mean, that's roughly five and a half years of revenue visibility at their current run rate.
[SPEAKER_00]: And their order intake is expected to exceed 20 billion.
[SPEAKER_00]: And there are structural tailwinds here.
[SPEAKER_00]: I mean, Germany has not yet fully executed on its promised defense spending search, so the money is committed, but it hasn't all flowed yet.
[SPEAKER_00]: The country said they're targeting 162 billion in a defense budget for 2029.
[SPEAKER_00]: European NATO members projected to spend one trillion cumulatively by 2030.
[SPEAKER_00]: And the Iran War has, in a lot of ways, only,
[SPEAKER_00]: Work to accelerate the urgency of European environment with, of course, the Russian invasion in 2022 of Ukraine doing that as well.
[SPEAKER_00]: It's eventually a lot of goods, right?
[SPEAKER_00]: There are downsides to this thing.
[SPEAKER_00]: I mean, momentum perspective, momentum doesn't look great, especially coming off surging in 2022 to 2024.
[SPEAKER_00]: Q1 revenue missed on both earnings per share and revenue estimates.
[SPEAKER_00]: The OTC liquidity issue is also there as well.
[SPEAKER_00]: I mean, it's got decent volume, but certainly not great volume.
[SPEAKER_00]: And I was bad as the other name that we looked at.
[SPEAKER_00]: Now, overall, I would say it is for good reason, one of Europe's premier defense companies.
[SPEAKER_00]: And it's trading at a 40% discount to its 52 week high.
[SPEAKER_00]: I like the name, you know, just keep in mind it's thinly traded, so just like we said before use limit orders understand that the, you know, the Iran cease fires creating a bit of a near term sentiment headwind.
[SPEAKER_00]: Let's see how that develops this week.
[SPEAKER_00]: And it's not cheap at 38 times forward price earnings.
[SPEAKER_00]: It's stocks not cheap even after this pullback.
[SPEAKER_00]: So if you have a really strong conviction,
[SPEAKER_00]: This is a good way to play that conviction, but understand the downsides primarily with liquidity and that, you know, we're priced pretty high right now at about 28 times priced to four lucky earnings.
[SPEAKER_00]: Thanks for checking out our videos.
[SPEAKER_00]: I hope you enjoyed it.
[SPEAKER_00]: That is in Vestock.
[SPEAKER_00]: I'm Lou Guerrero.
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[SPEAKER_00]: SpaceX is expected to price its IPO on June 11th and begin trading on the NASDAQ on June 12th under the ticker
[SPEAKER_00]: And the company is targeting a $1.75 trillion valuation in a $75 billion race, more than 2.5 times.
[SPEAKER_00]: The previous record set by Saudi Ramcon in 2019.
[SPEAKER_00]: Goldman Sachs is what's called the lead left bank, they're the lead book runner with Morgan Stanley Bank of America's City Group JPMorgan rounding out the syndicate.
[SPEAKER_00]: In an unusual move, SpaceX is allocating roughly 30% of their shares directly to retail brokerage platforms, through Robin Hood, through Fidelity, and through Schwab, the largest director retail carve out any IPO of the size has ever extended.
[SPEAKER_00]: An anthropic filed draft IPO paperwork today.
[SPEAKER_00]: Open AI is expected to follow soon.
[SPEAKER_00]: The two AI labs are rumored to be seeking as much as 60 billion dollars of the
[SPEAKER_00]: Together, the three giga IPOs could add as much as four trillion to the market value of listed American companies in a matter of months.
[SPEAKER_00]: The economist raised the right question, how does the stock market handle this?
[SPEAKER_00]: The answer is that America's $79 trillion equity market is deep enough to absorb the initial offerings, but the long-term digestion is where the problems could emerge.
[SPEAKER_00]: Index Inclusion is the immediate mechanical question.
[SPEAKER_00]: Nasdaq has shortened its seasoning period to 15 trading days, Fuzzi Russell has slashed it to five most indices, weight firms by free float.
[SPEAKER_00]: The shares actually available for public trading, not total market cap.
[SPEAKER_00]: SpaceX's initial free float will be
[SPEAKER_00]: Just the 75 billion it issues, meaning it's initial weight and the S&P would be around 10 basis points, but over time, as lockups expire and insider sell the freeflow grows and index weight increases, forcing tracker funds to buy progressively more.
[SPEAKER_00]: The historical data on IPO performance should give pause.
[SPEAKER_00]: Of IPOs, listed between 1980 and 2024, the average IPOs stock returned 20% at points less than the broader market over the three years following its first trading net.
[SPEAKER_00]: This is what I talk about all the time.
[SPEAKER_00]: Burms valued at over 40 times revenue, underperformed by 58% SpaceX, would begin trading at over 90 times its 18.5 billion in 2025 revenue.
[SPEAKER_00]: The S1 filing revealed SpaceX posted a $4.9 billion net loss in 2025, despite that revenue driven by the massive capital requirements of the Starlink Satellite Constellation and XAI integration.
[SPEAKER_00]: Elon Musk's 42% stake comes with 85.1% voting power through a dual-class share structure.
[SPEAKER_00]: It begins to help with shareholders essentially zero government in influence.
[SPEAKER_00]: Blockbuster IPOs have also historically coincided with market peaks.
[SPEAKER_00]: The last surge in listings 2020, 2021 came just before a big bear market.
[SPEAKER_00]: Previous booms in the late 1990s and before 2008 proceeded major slumps.
[SPEAKER_00]: All three Gig IPO companies are closely associated with AI and America's 10 biggest AI related firms already account for two fifths of the S&P's value.
[SPEAKER_00]: If the AI thesis disappoints, this is what we call concentration risk people and it is enormous.
[SPEAKER_00]: For all of you, for all investors, the SpaceX road show starts June 18th or June 8th.
[SPEAKER_00]: The excitement, it's going to be intense.
[SPEAKER_00]: The retail allocation, it is going to be unprecedented, the temptation to buy on day one.
[SPEAKER_00]: It will be strong.
[SPEAKER_00]: But the data says patience pays.
[SPEAKER_00]: Most IPOs underperform valuations at 90 times revenue have rarely rewarded early buyers.
[SPEAKER_00]: And the $4 trillion in new market cap coming and market to the market represents a structural shift from the capital scarcity that's been driving share prices higher to a world where tech giants are raising capital rather than buying it back.
[SPEAKER_00]: That transition from buyback to issuance could define the next phase of this market.
[SPEAKER_00]: Well, folks, that doesn't for another episode of Invest Talk.
[SPEAKER_00]: Justin and I, and the entire team, thank you for listening and encourage you to tell your friends and family members about our free podcast downloads as you're well aware you can get those iTunes and Spotify.
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[SPEAKER_00]: Lastly, if today's show made you think about your financial circumstances, your investment, your retirement, whether or not you actually have a financial plan that works for you, I encourage you to head over to invest.com and schedule a free portfolio review just and I speak with investors just like yourselves, each and every day.
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