[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_03]: Good afternoon fellow investors and welcome back to another week of Invest Talk.
[SPEAKER_03]: This is our Monday, July 27, 26.
[SPEAKER_03]: Addition.
[SPEAKER_03]: Lots of unpack as we move into another week, another summer week.
[SPEAKER_03]: I hope everyone had a good summer weekend.
[SPEAKER_03]: I know I did, it's been a lot of time at the beach, enjoyed the sun, heat, little hot, but luckily I had the air conditioning.
[SPEAKER_03]: So I was able to cool down a little bit, hopefully everyone out there was able to stay cool as well.
[SPEAKER_03]: But on this show, we're trying to stay hot.
[SPEAKER_03]: We're trying to stay hot on the tail of opportunity
[SPEAKER_03]: capitalize, avoid, avoid the heat stroke, avoid the risk, avoid the pitfalls that many investors make continuously with the emotions drive their decisions, they don't focus on doing the research, having the principles that make good investment decisions consistently instilled into them.
[SPEAKER_03]: That's where our job is to have this instilled into you so that you're no longer kind of flying
[SPEAKER_03]: a clear direction.
[SPEAKER_03]: So I'm Justin Klein.
[SPEAKER_03]: My objective today is to help you become that better investor and answer your friends and investment questions.
[SPEAKER_03]: I'm going to give you a national data perspective.
[SPEAKER_03]: All that.
[SPEAKER_03]: You've heard it.
[SPEAKER_03]: Now, just a bit, we're going to talk with today's Mark performance and run down the show topics.
[SPEAKER_03]: But first, let's tackle this
[SPEAKER_04]: as a potential core holding.
[SPEAKER_04]: Thank you.
[SPEAKER_03]: I'm looking at the tier price capital appreciation equity ETF TCF.
[SPEAKER_03]: The expense ratio is about 31 basis points kind of high for an ETF, but overall fund expense not that high.
[SPEAKER_03]: Kind of fun is this.
[SPEAKER_03]: Well, it leans on the growth of your side of the market, but it's it's it's definitely a blend.
[SPEAKER_03]: Still heavily technology, a hundred names here.
[SPEAKER_03]: 100 names.
[SPEAKER_03]: So, I don't know if they're just looking at the S&P and picking 100 names.
[SPEAKER_03]: I wonder what they're.
[SPEAKER_03]: The qualification is here.
[SPEAKER_03]: 93% is U.S. equities 5% and about 5.5% in non U.S. equities, so it's mainly a U.S. equity fund.
[SPEAKER_03]: From a sector perspective, I'm looking at a based on the S&P.
[SPEAKER_03]: About the same technology waiting.
[SPEAKER_03]: Less industrials, a 10 for the S&P6 for this one, a little more communication services, a little less financials from 12 to 10, no basic materials is zero where the S&P is two.
[SPEAKER_03]: The real difference here is it has more health care, not exactly, but it's I love to be a long-term, and a lot more industrials, which tend to have lower long-term returns.
[SPEAKER_03]: So to me, this looks a lot like the SMP, yes, there's a little more cost, a lot more concentrated on the 100 names, but still well diversified, except for that it's closet indexing, except for taking away some of the sectors that you rather be in, like you want more weighting and like industrials, like materials, even energy, it's below the SMP, which is hard to do, I'm from 3 to 2.
[SPEAKER_03]: and you're putting it in a healthcare, which usually is not a very good hedge against inflation, neither are utilities.
[SPEAKER_03]: They tend to have, you know, a lot of debt, kind of be bond proxies, et cetera.
[SPEAKER_03]: So it's an okay fund, but you're paying up for something that, frankly, I don't see any excitement for it.
[SPEAKER_03]: It's three-year quartile ranking is 66%, which means that two-thirds of funds in this category did better than it.
[SPEAKER_03]: I see zero reason, it's not a bad fund, but if you're going to, you out large cap, blend exposure, you might as well just go by the S&P, you'll get a better allocation.
[SPEAKER_03]: Now, we had a great show on Friday with a can to this story, the Fed's impossible position, war inflation versus rate cuts, so discussed how the Fed observed faces a nightmare scenario where energy is driving inflation.
[SPEAKER_03]: That could force rate hikes, even into a slowing economy.
[SPEAKER_03]: Guess what?
[SPEAKER_03]: Guys, coming up here on Wednesday, the Federal Reserve meeting starts tomorrow.
[SPEAKER_03]: They get their decision on Wednesday, or we get their decision on Wednesday.
[SPEAKER_03]: And right now there's a two-thirds chance they won't raise rates for the third, which is a lot higher than it used to be, but they could raise rates.
[SPEAKER_03]: So, a very interesting meeting we have set up here.
[SPEAKER_03]: Here we have some surprises.
[SPEAKER_03]: We talk about that, and more on Friday, and we also answer list of questions on Camico, Camico, Camico, CCJ.
[SPEAKER_03]: And if you happen to miss it, go check it out.
[SPEAKER_03]: You best way to get every invest stock podcast is to find it wherever you get your podcast.
[SPEAKER_03]: Ever like I've got to cover over the next 45 minutes or so, time for many, we'll get to all of it.
[SPEAKER_03]: Guess is now above $4 a gallon nationally, well above $500, $5 a gallon here in California.
[SPEAKER_03]: I think we're pushing on six last time I looked, but should be getting premium.
[SPEAKER_03]: But what does this mean for your portfolio?
[SPEAKER_03]: How to think about the impact this will have on markets, on economies, et cetera.
[SPEAKER_03]: We'll dig into that.
[SPEAKER_03]: I also want to focus on
[SPEAKER_03]: The industrial boom, not just here in America, because there's definitely a lot of AI guys that have built out in some manufacturing capabilities being improved.
[SPEAKER_03]: But this is a global phenomenon.
[SPEAKER_03]: This isn't just happening here in America.
[SPEAKER_03]: So I want to highlight that and what that means for investment opportunities.
[SPEAKER_03]: And then we'll talk about banks.
[SPEAKER_03]: Our banks say better way, smaller banks are using mid-sized banks.
[SPEAKER_03]: A better way to capitalize on the AI, that is standard buildup.
[SPEAKER_03]: So we'll take a look at that story.
[SPEAKER_03]: And of course, we have questions from our voice bank when it's on Quant investing.
[SPEAKER_03]: And then in the best go, S&B 100 equal weight ETF RSP.
[SPEAKER_03]: And of course, we have some questions that came in via the comment section on the invest stock YouTube channel.
[SPEAKER_03]: But we're going to head into a quick break.
[SPEAKER_03]: Please remember, you can call any time and leave your question on the Investor Black Voice Bank.
[SPEAKER_03]: But if you're listening via a live stream on the bestdoc.com or possibly an aim to help 20 in the day area, you can call right now.
[SPEAKER_03]: I dated at 99 chart of next.
[SPEAKER_03]: I will comment on today's market activity.
[SPEAKER_02]: There are a few things that make KPP financial special.
[SPEAKER_02]: One of them is parallel investing.
[SPEAKER_02]: This means they invest right alongside their clients.
[SPEAKER_02]: Here's how it works.
[SPEAKER_02]: When KPP financial makes a trade for their clients, just in client makes the same trade for himself and KPP.
[SPEAKER_02]: On the same day, at the same price, and same percentage.
[SPEAKER_02]: No front running, no special treatment.
[SPEAKER_02]: Learn more about Parallel Investing at Investalk.com.
[SPEAKER_03]: It is 99 chart, it is 9924-278.
[SPEAKER_03]: So you can ask your question on today's show.
[SPEAKER_03]: Let's go look at the market today.
[SPEAKER_03]: Very interesting day.
[SPEAKER_03]: Start off higher on the hopes of a
[SPEAKER_03]: Maybe a ceasefire or at least a pause and in major kinetic operations, the Middle East.
[SPEAKER_03]: But that quickly faded.
[SPEAKER_03]: And the market rolled over pretty quickly as the market opened.
[SPEAKER_03]: Now we did have a nice little, find a nice little bottom and a little bit of a rally into close which allowed the S&P to only be down, let's see what we're gonna do.
[SPEAKER_03]: point, actually it was up, 0.02%.
[SPEAKER_03]: So two basis points.
[SPEAKER_03]: There, dials up about half percent.
[SPEAKER_03]: NASDAQ though, down 18 basis points, Russell 2000, up 62 basis points.
[SPEAKER_03]: Really, once again, it is this marker rotation.
[SPEAKER_03]: I've talked about it really for weeks now that you're seeing this underneath the surface, the chip names, memory names, they were all on coming under pressure.
[SPEAKER_03]: Sorry, down to pressure, but they were losing momentum.
[SPEAKER_03]: There we go.
[SPEAKER_03]: And that is the start of them coming into pressure.
[SPEAKER_03]: Now they're coming into pressure.
[SPEAKER_03]: In video, down 5% of the day, MD down 5, you had micron down 2, that's this one.
[SPEAKER_03]: Sand is down 11, KLA 10 core down 3, was some digital down 4.
[SPEAKER_03]: So anything around chip production, chip manufacturing was down.
[SPEAKER_03]: Google Apple, Microsoft with the strong players in the mag seven, meta was about flat, Tesla then 1.2% SpaceX, Tesla continued to be kind of under pressure, not a shock there.
[SPEAKER_03]: Utilities were down on higher interest rates.
[SPEAKER_03]: And then, yeah, very interesting market, lot of rotation that you're seeing.
[SPEAKER_03]: Durable goods orders did come in pretty strong.
[SPEAKER_03]: but may was a decline.
[SPEAKER_03]: So we got a nice little bounce back there.
[SPEAKER_03]: That's always a good sign for the broader economy.
[SPEAKER_03]: The dollar was up 0.1% of the day, gold at 0.2, silver down 0.3, Bitcoin features up 1.1, looks like you're starting to see a bit of a bottom in gold and silver and maybe Bitcoin.
[SPEAKER_03]: WTI crewed down 7.1%, but far off session low.
[SPEAKER_03]: So I actually think,
[SPEAKER_03]: Mark is getting it wrong here.
[SPEAKER_03]: I think that the more limited the operations in the Middle East are, the more tenable it is politically.
[SPEAKER_03]: The bigger the bigger the action, the more headlines there are.
[SPEAKER_03]: And clearly in war, bad things happen, people die.
[SPEAKER_03]: That's how it is.
[SPEAKER_03]: whether you agree with the war or not, that's war.
[SPEAKER_03]: And so the more action there is, the more there's going to be headlines, and that makes it politically untenable.
[SPEAKER_03]: But if there's not a lot going on, it's just more of a stalemate.
[SPEAKER_03]: Well, then it can just drag on, make sure, move stays closed.
[SPEAKER_03]: We have what's going on in, what is it?
[SPEAKER_03]: The other straight.
[SPEAKER_02]: I don't remember, I'll stop ahead.
[SPEAKER_03]: But that's preventing Saudi Arabia from pumping oil at the Red Sea.
[SPEAKER_03]: Can I remember?
[SPEAKER_03]: I was reading it earlier.
[SPEAKER_03]: But as a lesson, it's clear that oil prices, what oil prices are going to be volatile, which is talk about later, it's more about refining capacity, refined products in general, moving throughout the world.
[SPEAKER_03]: And that ultimately is going to continue to put pressure on the economy.
[SPEAKER_03]: So definitely a Mark rotation today, a lot going on as we move into, as I said earlier, a very important meeting coming up here on Wednesday.
[SPEAKER_03]: Let's go to a YouTube comment question.
[SPEAKER_03]: Tom says, hi, Justin, trying to leverage the pullback to raise my gold exposure.
[SPEAKER_03]: Which one do you like a bit?
[SPEAKER_03]: Better at levels of a long-comperspected AM or B-T-G. Well, we own Agmeco-E-L-A-M for clients.
[SPEAKER_03]: And to me, this is now an absolute bargain.
[SPEAKER_03]: I mean, you're talking about, so it's starting $12 in 12 cents this year, 1284 next year, and it's at $148.
[SPEAKER_03]: Stock, it's a, between at 12 times earnings,
[SPEAKER_03]: with the tailwind of gold prices, likely improving that.
[SPEAKER_03]: Well, gold goes back to $4,500 to $5,000.
[SPEAKER_03]: Like it was, all that's going to go to trade to their bottom line.
[SPEAKER_03]: And they already have $4.5 billion of free cash below on a $70 billion market cap.
[SPEAKER_03]: No net net, up $3 billion in cash.
[SPEAKER_03]: ability and willingness to raise that dividend.
[SPEAKER_03]: They just raised it last in first quarter.
[SPEAKER_03]: So much larger name, BTG though.
[SPEAKER_03]: Also, also good.
[SPEAKER_03]: I like it.
[SPEAKER_03]: This is around $1.15 next year.
[SPEAKER_03]: It's $3.08.
[SPEAKER_03]: I'm stuck.
[SPEAKER_03]: I'm still paying 30 times.
[SPEAKER_03]: And it's relative strength is much weaker.
[SPEAKER_03]: So I'm going to go with Agnika Ligo.
[SPEAKER_03]: 24-7 Invest Talk, VoiceBank, never closes so you can leave your question, your finest investment question.
[SPEAKER_03]: Any time, 8-8 on your chart, and your work continues after this break.
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[SPEAKER_03]: Now we all know the story about AI, industrial, build AI, data center, build out.
[SPEAKER_03]: But what about the industrial boom globally?
[SPEAKER_03]: Because that's under the discussed.
[SPEAKER_03]: This isn't just happening here in America.
[SPEAKER_03]: It's happening around the world.
[SPEAKER_03]: And this brings opportunity.
[SPEAKER_03]: There's demand for building materials, equipment, construction sites.
[SPEAKER_03]: commodities needed for renewable energy power grids and energy engineering services, automation.
[SPEAKER_03]: This is, frankly, I think a better opportunity for investors than AI, because it's part of the picks and shovels of AI and frankly, the less competitive part of the AI stack.
[SPEAKER_03]: But this revolution, industrial revolution is global, because it's not just about strategy.
[SPEAKER_03]: It's about security.
[SPEAKER_03]: We see what's happening right now with geopolitics.
[SPEAKER_03]: And with two major geopolitical conflicts going on at the same time, it's impacting logistics.
[SPEAKER_03]: and the ability for really the AI infrastructure to be built out as well as the necessary supply chains that are resilient.
[SPEAKER_03]: So you're having leaders around the world, Japanese Prime Minister is one of them.
[SPEAKER_03]: It recently proposed a $2.3 trillion investment across 17 sectors to revitalize Japan's economy.
[SPEAKER_03]: and mainly focusing on security.
[SPEAKER_03]: The EU proposed 914 billion dollar package for rearmament and infrastructure.
[SPEAKER_03]: India is expected to invest 170 billion this year to pollster its energy resilience because of what's happened in the least.
[SPEAKER_03]: So improvements in nuclear as well as solar.
[SPEAKER_03]: So when you look at the industrial space, you might say, oh, the trading at a premium.
[SPEAKER_03]: It might look expensive, but the reality is there's huge tailwinds behind them.
[SPEAKER_03]: And they should say sell it a premium because they typically have over the next couple decades, suspected that there are $10 trillion that are going to be spent on non-adaptive center related infrastructure and manufacturing spending.
[SPEAKER_03]: That translates into almost three plus annual growth if that comes to fruition.
[SPEAKER_03]: The U.S. ISM manufacturing index, purchasing an engine index, is at 54, and man's highest points is mid-2022, has been up for five straight months, but then if you look globally, it's at 52.2, the strongest, strongest reading in a few years.
[SPEAKER_03]: Then you look at who's putting money behind this, venture capital for managers in horror which launched their watch their own American dynamism, fund, focusing on defense, manufacturing,
[SPEAKER_03]: JP Morgan's investing $1.5 trillion in security and resilience initiative, so they're putting big money behind this.
[SPEAKER_03]: And so when banks are willing to lend, that's huge.
[SPEAKER_03]: And that goes into, is that copper, copper demand, automation, equipment rentals.
[SPEAKER_03]: This is where the opportunity in today's market really lies, and there's a lot of it.
[SPEAKER_07]: Hey, hello, I'm thinking of buying some shares of this stock.
[SPEAKER_07]: I would love to hear your opinion on owning this stock.
[SPEAKER_07]: The stock is, let's see, see, oh, again, let's see, see, oh, thank you so much.
[SPEAKER_03]: Now, I know you guys aren't going to believe me, but I do not pick the colors.
[SPEAKER_03]: play what questions I'm going to answer etc.
[SPEAKER_03]: I have zero input on this.
[SPEAKER_03]: But this is Southern Copper and this kind of hit someone I just talked about, which is the demand for industrial applications and what will that require?
[SPEAKER_03]: And it's going to require a lot of copper.
[SPEAKER_03]: Now we've owned Southern Copper for a long period of time.
[SPEAKER_03]: It's been one of our best purchases
[SPEAKER_03]: And it's just the best copper producer out there when it comes to profitability as low cost minds in Central and South America, $5.1 billion in free cash flow return equity 50% by zero.
[SPEAKER_03]: They pay 2% as 2% dividend yields, but that dividend amount,
[SPEAKER_03]: is on the rise.
[SPEAKER_03]: It was only 46 cents back in 2022 now to dollar.
[SPEAKER_03]: So, yeah, I give this a thumbs up.
[SPEAKER_03]: Great balance sheet.
[SPEAKER_03]: Pretty much no net debt.
[SPEAKER_03]: Very strong cash flow.
[SPEAKER_03]: Very high profitability.
[SPEAKER_03]: And I think copper rises are headed a lot higher in the long term.
[SPEAKER_03]: On the next and best talk, we look into this story.
[SPEAKER_03]: Bond Market Outlook, 20206, what treasure yields near multi-year highs means for your portfolio.
[SPEAKER_03]: That story is for tomorrow, but if now I'm just inclined, ready to take your calls any time on 80-80-99 chart.
[SPEAKER_03]: At KPP Financial, Accountability means more than advice.
[SPEAKER_03]: It means we invest alongside you through our parallel investing approach.
[SPEAKER_03]: When we recommend an investment for clients, one or more KPP principles invest their own capital at the same time, same day, same price, same percentage.
[SPEAKER_03]: If your portfolio moves, ours does too.
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[SPEAKER_03]: Visit investtalk.com to get your free portfolio review.
[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-Charne.
[SPEAKER_03]: Now our focus point today is about gas prices hitting $4 a gallon nationally.
[SPEAKER_03]: What that means for your portfolio.
[SPEAKER_03]: If you look at all prices, you might say, why are gas prices going up?
[SPEAKER_03]: And right there is an lesson, a lesson into itself.
[SPEAKER_03]: That what you think drives something is price.
[SPEAKER_03]: Isn't always that thing?
[SPEAKER_03]: Yes, oil is a part of the cost, but it's not the only cost.
[SPEAKER_03]: The refining capacity that really drives how much you pay at the pump.
[SPEAKER_03]: Now, where could this go?
[SPEAKER_03]: Well, I don't say that this drags on through the summer, you likely will see 450, maybe even $5 a gallon by say Thanksgiving.
[SPEAKER_03]: So there's definitely more upside potential from here.
[SPEAKER_03]: But what you do about it, you're portfolio.
[SPEAKER_03]: Life people say, well, let's go by little stocks and that could be certainly one way you do it.
[SPEAKER_03]: But usually you want to buy it before a supply shock not in the middle of one.
[SPEAKER_03]: But to me, the bigger takeaway is long term.
[SPEAKER_03]: We'll continue to be volatile, then you're going to want exposure to energy when things come down, because it's going to Evan flow.
[SPEAKER_03]: It has, for the past couple of years, we'll likely Evan flow going forward.
[SPEAKER_03]: So when EBS, Oprah's go down, where do you
[SPEAKER_03]: But this is a lesson of where to allocate capital in the energy stack.
[SPEAKER_03]: And to me, it's number one in that refining capacity.
[SPEAKER_03]: So yes, Xon and Chevron, they have that because they operate up and down the energy stack.
[SPEAKER_03]: Supply chain.
[SPEAKER_03]: But there are peer place.
[SPEAKER_03]: Nothing you got by those today, but those are examples of companies that are more pure place around refining capacity.
[SPEAKER_03]: So when you're doing a research in that space, get your buy list ready and know that you want some of those names.
[SPEAKER_03]: You also might want the
[SPEAKER_03]: The downstream companies, the pipelines, those that are moving the products from the wellhead to where they might be refined.
[SPEAKER_03]: And they pay a toll, or they charge a toll.
[SPEAKER_03]: For that, it's a very good business.
[SPEAKER_03]: How do capital intensive, but that's a good place to be as well.
[SPEAKER_03]: So to me, this is about getting your bylists ready and understanding the type of businesses in the energy stack that are going to thrive in this new world we love it.
[SPEAKER_03]: But how's it gonna affect the consumer?
[SPEAKER_03]: Yes, gas is part of the budget.
[SPEAKER_03]: Then number one, it's not as big as it used to be.
[SPEAKER_03]: The average person's disables won't come.
[SPEAKER_03]: Number one cars are far more efficient than they have been over the last many decades.
[SPEAKER_03]: People drive less because they're working from home.
[SPEAKER_03]: They can get things delivered, for example.
[SPEAKER_03]: And then there's electric cars.
[SPEAKER_03]: Certainly a lot less than that, a lot more of that.
[SPEAKER_03]: but it's really around diesel prices.
[SPEAKER_03]: So diesel prices are up about 45%.
[SPEAKER_03]: This year, up to $5.45 a gallon, now that usually feeds into other goods because usually those goods are delivered with a truck that's running on diesel.
[SPEAKER_03]: It usually feeds in the grocery prices with a two to three-month lag.
[SPEAKER_03]: So that's really where the impact here is, not even today, but in called September, October, I think that's where you're really gonna feel the inflation impact on other types of goods.
[SPEAKER_03]: And how does that feed into the consumer?
[SPEAKER_03]: The ability of the consumer too, maintain its debt, spend, et cetera.
[SPEAKER_03]: How does that feed into the labor market as well?
[SPEAKER_03]: So I think those pressures actually going to be worst in a few months, rather than today.
[SPEAKER_03]: And then big picture, I've been saying this really since COVID started, which is we are in inflationary environment.
[SPEAKER_03]: You have to look at it in another way.
[SPEAKER_03]: It's not disinflationary.
[SPEAKER_03]: It's not like from the late 90s into basically the before COVID, you had an era
[SPEAKER_03]: Basically, China was exporting deflation to the rest of the world, which is why you didn't get big spikes in the inflation.
[SPEAKER_03]: Really at all, throughout that period.
[SPEAKER_03]: But now we're in a new era.
[SPEAKER_03]: There's more like the 70s than the 90s, so be prepared for that.
[SPEAKER_03]: Now from time to time, we received questions from
[SPEAKER_03]: or via web form, over on desktop.com.
[SPEAKER_03]: If Francisco from Spain says, Hi, greetings from Spain.
[SPEAKER_03]: Been listening to your podcast for two months now.
[SPEAKER_03]: I've learned a lot.
[SPEAKER_03]: American Express, AXP, recently dropped after Q2 results, is this a buying opportunity?
[SPEAKER_03]: Interesting.
[SPEAKER_03]: American Express is a name that
[SPEAKER_03]: kind of credit card company pretty much to invest in over the last many decades, just consistent profitability, mainly because their customers are usually wealthier.
[SPEAKER_03]: Nevada's shifted over time as they've have chased more growth, but still skews wealthier.
[SPEAKER_03]: Ernie just doesn't have to be $20 next year from 1766 this year that would be an all-time
[SPEAKER_03]: It's only a $3.35 stock, so forward-looking multiple is pretty good, only about 17 times.
[SPEAKER_03]: Forward-looking enterprise value is about 10, which is definitely at the low end of the range, that's for sure.
[SPEAKER_03]: The technicals are, I would say, neutral to slightly bearish.
[SPEAKER_03]: You could argue this is long term consolidation, but you could argue it peaked in the fall for a reason.
[SPEAKER_03]: And the MACD is pretty weak.
[SPEAKER_03]: I do like the profitability as usual.
[SPEAKER_03]: Return equity is sitting at 34%.
[SPEAKER_03]: So this definitely a great company to own long term.
[SPEAKER_03]: The question is, do you want to own it right now with, you know, the consumer being squeezed, going into the second half of the year with, as we talked about, higher energy prices, higher inflation, eventually higher interest rates now?
[SPEAKER_03]: I'm not going to say no, I'd be patient on it.
[SPEAKER_03]: I just don't like the chart, I think it.
[SPEAKER_03]: Is screaming another break lower where would I buy it?
[SPEAKER_03]: Probably down in the 250 range that probably we're on pick up American Express the 335 now.
[SPEAKER_03]: Let's drop in another fresh voice mate question right now.
[SPEAKER_06]: afternoon guys on his palm coin from Atlanta.
[SPEAKER_06]: I've always been pretty risted verse about 95% of my portfolios.
[SPEAKER_06]: or in the S&T 500, the OO.
[SPEAKER_06]: You all guys are recommending maybe rotating to some equal weight.
[SPEAKER_06]: I'm looking at RSP.
[SPEAKER_06]: If that might be a good play right now, also I have about 100,000 of the OO that says about a 40% gain and an individual account.
[SPEAKER_06]: Would I be right and thinking just let that ride?
[SPEAKER_06]: Because I don't want to create a taxable event if you could help on those questions.
[SPEAKER_06]: I would be amazing.
[SPEAKER_03]: I'll start with the first one last good thing is this is something the first one.
[SPEAKER_03]: I'll start with the last one first is what I meant.
[SPEAKER_03]: Because this is something a lot of people get wrong.
[SPEAKER_03]: One of the biggest mistakes I see consistently, like 25 years of doing this, is avoiding paying taxes by allowing your portfolio to be misallocated.
[SPEAKER_03]: The best thing isn't about what happened in the past is about going forward.
[SPEAKER_03]: Now, should you sell some of that VLO?
[SPEAKER_03]: Probably.
[SPEAKER_03]: I've looked at your old portfolio, but probably.
[SPEAKER_03]: Now, do you sell all of it?
[SPEAKER_03]: No, I'm certainly.
[SPEAKER_03]: Maybe you try to sell just the most expensive lots and you limit your tax.
[SPEAKER_03]: Well, gains.
[SPEAKER_03]: We run, who would call direct indexing, custom indexing strategies for our clients to make sure that,
[SPEAKER_03]: They're reallocating without the tax impact.
[SPEAKER_03]: So if you want to talk to us about what we can do.
[SPEAKER_03]: But number one is taxes are a factor.
[SPEAKER_03]: They are not the only factor.
[SPEAKER_03]: And everybody needs to understand that, because it's one of the biggest mistakes I could see people make, and a lot of times they don't sell, because they don't want to pay taxes, and guess what?
[SPEAKER_03]: Market turns around, stock turns around, and now you don't have any gains.
[SPEAKER_03]: And you should have sold and paid the taxes.
[SPEAKER_03]: Okay, so don't be dogmatic about taxes.
[SPEAKER_03]: Number two, RSP equal weight S&P 500.
[SPEAKER_03]: I would say yes, this is started to outperform, it started outperform in the fall of last year.
[SPEAKER_03]: The recent run up from the March lows in the S&P that actually pushed large caps higher, but now as those max seven names, the chip names are rolling over, et cetera.
[SPEAKER_03]: So for example, today, smallcapped, the RSP outperformed, the S&P 100 by 75 basis points, 33 basis points.
[SPEAKER_03]: Big move, and that's been fairly consistent, really since the may-hides in the S&P.
[SPEAKER_03]: As I said before, the major mics, the major hyperscalers, are spending the cash flow, their balance sheet, on AI data center infrastructure.
[SPEAKER_03]: And that money is mostly going to mid in small cap companies.
[SPEAKER_03]: And on top of that, they don't have any money left over for stock buybacks.
[SPEAKER_03]: This is a dynamic that is relatively new, but I think it's very sustainable.
[SPEAKER_03]: Do you think, I think they're going to slow down
[SPEAKER_03]: But I don't think it's going away.
[SPEAKER_03]: So as I said before, there's a lot more runway here on the industrial side, and you want to own a lot more of those.
[SPEAKER_03]: So if you own the balanced S&P, the, sorry, the equal weight S&P, you're going to get a lot more of that industrial exposure.
[SPEAKER_03]: For example, this is 15% in industrial versus 10 in the S&P.
[SPEAKER_03]: There's only 16% technology for 34 in the S&P.
[SPEAKER_03]: This is much better set up for success in this market than the S&P.
[SPEAKER_03]: So don't be dogmatic about holding on to S to VLO, excuse me.
[SPEAKER_03]: Those are another voicemail question now.
[SPEAKER_05]: Good day gentlemen.
[SPEAKER_05]: This is Jim down on 90 Florida.
[SPEAKER_05]: I'm calling today about liberty energy, ticker symbol, L, B, R, T. New gentlemen are really good at finding out the needy gritty about these stocks.
[SPEAKER_05]: you would recommend as a buy and now at this entry point.
[SPEAKER_05]: That'll be great.
[SPEAKER_03]: Thank you so much.
[SPEAKER_03]: Liberty energy provides completion services and technology to onshore natural, ultra oil, natural gas, and geothermal thermal energy producers here in U.S. earnings of 82% this year, but down nine, five, five percent next year.
[SPEAKER_03]: It's made $3.17 in 2023, but it's supposed to make 27 cents this year, 26 cents next year.
[SPEAKER_03]: This is in a stark downtrend.
[SPEAKER_03]: I'm not sure what this, the must have been earnings, because this thing was it's on Thursday.
[SPEAKER_03]: It, I'm assuming it's earnings, it gaped up and failed, we call this the gap in crap.
[SPEAKER_03]: All right, gaps up, look second thing's going well, and then it reverses in a huge way.
[SPEAKER_03]: And they're being down, and she's 20 plus percent of the day.
[SPEAKER_03]: Down again, Friday and down again today.
[SPEAKER_03]: Now, because the three of our surge probably a bit of a bounce here in this short term, but I don't like that reaction, especially in the name that she'd be doing well.
[SPEAKER_03]: This is the business of fracking.
[SPEAKER_03]: With higher oil prices, more demand for energy they should be doing well.
[SPEAKER_03]: Why are they not?
[SPEAKER_03]: That makes no sense to me.
[SPEAKER_03]: A minute, look at the earnings picture.
[SPEAKER_03]: Doesn't look very hot to me.
[SPEAKER_03]: So something is wrong here.
[SPEAKER_03]: They're not executing well.
[SPEAKER_03]: The market's punishing them for it.
[SPEAKER_03]: The wealth of strength is horrible, especially when you compare it to the broader energy market.
[SPEAKER_03]: So I'm nothing really good to say about this name.
[SPEAKER_03]: I would pass on liberty, energy that was L B R T. Thank you for the call.
[SPEAKER_03]: As the best thought, I'm just inclined with one goal here.
[SPEAKER_03]: Each and every week, they help you achieve your own version of fans of Freedom, and they work to use after this final break, because questions are now at 8.89 chart.
[SPEAKER_02]: invest talk.
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[SPEAKER_00]: Hi Justin and I wanted to ask you a question I retired early and I'm now enjoying life abroad in the Philippines with my family.
[SPEAKER_00]: I'm in my 40s and I'm exploring
[SPEAKER_00]: I'm particularly interested in quant investing and wanting to get your take on it.
[SPEAKER_00]: Do you think it's a viable way to create consistent passive income?
[SPEAKER_00]: Understand there's a deep learning curve, but I'm ready to put in the effort.
[SPEAKER_00]: If you have any advice, resources or key things to watch out for as it begins with journey, I greatly appreciate it.
[SPEAKER_00]: Thanks again for all the great work that you do.
[SPEAKER_03]: All it means that it's systematic, that it's driven approach, use algorithms, mathematical models, et cetera.
[SPEAKER_03]: They're what those algorithms actually instruct the, you know, instruct you to do can be a million different things.
[SPEAKER_03]: It's all based on building that algorithm, who's programming the algorithm?
[SPEAKER_03]: Use it somewhere else, someone else's AI.
[SPEAKER_03]: Here's what I would say.
[SPEAKER_03]: In the world of AI, you're smart enough, you have the time, you could probably start building out tools that can help you execute certain strategies, consistent.
[SPEAKER_03]: One of the biggest problems with quantum investing is that market's shift.
[SPEAKER_03]: So an algorithm that might work in one market, when the market shifts,
[SPEAKER_03]: Meaning, you know, maybe it's something around growth stocks and growth stocks are doing well and then that shifts and that's value stocks.
[SPEAKER_03]: And now you want to, that doesn't work for growth stocks, growth stocks aren't getting the same upside that they were before.
[SPEAKER_03]: Maybe it's around dividend paying stocks to try to collect the dividend and dividend stocks start to underperform because the trades are going up.
[SPEAKER_03]: Be a million different things.
[SPEAKER_03]: Markets change, Markets shift.
[SPEAKER_03]: So just say you're going to make much money who caught investing, it's just too broad of a term that doesn't tell me anything, but congrats and good luck.
[SPEAKER_03]: Last thing I want to talk about, banks, banks of boring, both teachings that regional banks are starting to act a lot like their Wall Street peers.
[SPEAKER_03]: They're lending less to your average consumer and more to,
[SPEAKER_03]: Corporations for corporations that are surrounding AI and then what's again, you're they're they're lending to small medium size businesses mental market businesses and they're getting It's hell in because of as it's before the spending from the hyperscalers on this massive endeavor to build out that infrastructure and Biosmosis Chowi say these regional banks are benefiting
[SPEAKER_03]: Now, they are not benefiting as much from the, let's say, the IPO schedule over the past year, but there's still a lot of M&A.
[SPEAKER_03]: And there's a lot of M&A within these banks as well.
[SPEAKER_03]: So the larger regionals are buying up a lot of these mid-sized investment banks.
[SPEAKER_03]: Then they're uping they're not interesting come think fees, for example.
[SPEAKER_03]: And they rose in the second quarter on par with
[SPEAKER_03]: So a lot of ways they're copying what the big banks are doing and acting a lot more like them, which means they should be as they gain heft and gain scale, they should be able to be priced in the market as much as these larger banks.
[SPEAKER_03]: So if you're looking for opportunities in the finance space or the city banking sector,
[SPEAKER_03]: Because smaller banks are probably a better risk-person award in today's market.
[SPEAKER_03]: I'm Justin Clyde, running up at K.P.
[SPEAKER_03]: Financial's parallel investing will make a trade for our clients to be the same trade for ourselves, same day, same price, same percentage, no front-running, no special treatments we invest right alongside.
[SPEAKER_03]: Our clients, we should have the same risk and potential for success.
[SPEAKER_03]: If you'd like to learn more, head over to invest.com, please tell your friends and family about a free podcast download with me at any time at iTunes or Spotify.
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[SPEAKER_03]: In the pen and thinking, sure to success.
[SPEAKER_03]: It's an investment.
[SPEAKER_03]: Good night.
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