00:04.285 --> 00:15.983 [SPEAKER_01]: on radio on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk, independent thinking, shared success.

00:18.052 --> 00:26.738 [SPEAKER_01]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

00:27.599 --> 00:33.823 [SPEAKER_01]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

00:35.893 --> 00:40.398 [SPEAKER_05]: Good afternoon fellow investors and welcome back to Invest Talk.

00:40.418 --> 00:44.362 [SPEAKER_05]: This is our Thursday July third, twenty twenty five edition.

00:44.382 --> 00:50.448 [SPEAKER_05]: Hope everyone is hyped up and ready for the July fourth holiday.

00:50.968 --> 00:54.952 [SPEAKER_05]: Maybe some of you are actually listening to this podcast on July fourth.

00:55.693 --> 00:57.955 [SPEAKER_05]: Either way, we are here to help you.

00:59.151 --> 01:03.653 [SPEAKER_05]: Despite the long weekend, there's always work to be done.

01:04.673 --> 01:09.195 [SPEAKER_05]: And we are going to unpack what happened in the market, even though it was a short date.

01:10.416 --> 01:13.297 [SPEAKER_05]: And look at the economic data, we weren't short on that.

01:13.317 --> 01:13.937 [SPEAKER_05]: That's for sure.

01:13.957 --> 01:17.238 [SPEAKER_05]: There's a lot of economic data, so we'll take a look at what was released today.

01:17.999 --> 01:23.601 [SPEAKER_05]: And then we'll dig into the market performance and answer more of your finance and investment questions.

01:23.621 --> 01:25.702 [SPEAKER_05]: That's what this show is about.

01:27.004 --> 01:33.908 [SPEAKER_05]: we can bring topics, we will bring topics to the table, we think are important, but we'll be most important in our your questions.

01:34.188 --> 01:37.891 [SPEAKER_05]: So don't hesitate to reach out to us at eight to eight, nine, nine chart.

01:38.511 --> 01:47.076 [SPEAKER_05]: So we're going to run down the show topics in just the bits and like I said, the market performance and we'll tackle this call a question first though.

01:48.136 --> 01:55.701 [SPEAKER_03]: This is James from Georgia, it's trying to call you guys about innovative industrial properties, I, I, T, R is the ticker symbol.

01:56.454 --> 01:59.132 [SPEAKER_03]: I'm down about almost thirty quarter percent on this one.

02:00.048 --> 02:05.410 [SPEAKER_03]: So I just cut my losses here, try to find something else or it's just something I need to hang in here for a second.

02:05.870 --> 02:08.831 [SPEAKER_03]: If you could please give me your analysis from the big fans of the show.

02:08.851 --> 02:10.331 [SPEAKER_03]: Hope you guys have a great day.

02:10.391 --> 02:10.711 [SPEAKER_03]: Thank you.

02:10.951 --> 02:15.973 [SPEAKER_05]: All right, looking at innovative industrial properties and this is in the cannabis space.

02:16.033 --> 02:21.775 [SPEAKER_05]: They've had some recent issues with the Lieutenant defaults, et cetera.

02:22.155 --> 02:29.177 [SPEAKER_05]: So it's certainly high risk to small cap name about one point six billion dollar market cap, but it's a read that has

02:30.728 --> 02:49.731 [SPEAKER_05]: a good balance sheet, very little data only about two hundred million of net debt, a good free cash flow, about two hundred forty one million, despite the challenges with tenants, the free cash flow has come down just a bit from its high, but its profitability is very solid, eight percent return and equity.

02:50.532 --> 02:51.592 [SPEAKER_05]: Dividendial is very high.

02:51.652 --> 02:55.953 [SPEAKER_05]: Now, I don't think that dividend is going to be sustained at those levels.

02:56.033 --> 02:57.794 [SPEAKER_05]: So just be aware of that.

02:57.854 --> 02:59.234 [SPEAKER_05]: Don't chase it for that.

03:00.054 --> 03:06.816 [SPEAKER_05]: Now, one thing you have to consider, I don't know how many dividends you received over that time as well.

03:06.876 --> 03:09.357 [SPEAKER_05]: So I like it as a long-term hold.

03:09.717 --> 03:12.577 [SPEAKER_05]: The technicals are just kind of hanging in there.

03:12.617 --> 03:13.578 [SPEAKER_05]: They're not amazing.

03:13.598 --> 03:14.358 [SPEAKER_05]: They're not terrible.

03:15.438 --> 03:19.139 [SPEAKER_05]: And so it have to be a long-term hold for you because they would really need to.

03:19.739 --> 03:23.364 [SPEAKER_05]: gets those tenants to to ten issues to be resolved.

03:23.384 --> 03:24.005 [SPEAKER_05]: Let's just say that.

03:24.626 --> 03:28.732 [SPEAKER_05]: You know, that can be resolved in many ways, new tenants in there, renegotiations, etc.

03:28.792 --> 03:33.840 [SPEAKER_05]: So if you have a long-term time horizon, I would continue to hold thanks for the call.

03:34.741 --> 04:03.375 [SPEAKER_05]: to cover over the next forty five minutes and we are going to talk about the week dollar first off that's our main focus points is the worst start in fifty years the start twenty twenty five down nearly eleven percent on the dollar index will look at that and what that means for investors and the average consumer as well in addition with the jobs number today like I said it says there was

04:03.955 --> 04:08.257 [SPEAKER_05]: The headline number's good, but underneath the surface, it's not nearly as good.

04:08.297 --> 04:16.260 [SPEAKER_05]: So we'll look at why the headline number might be looking great, but it isn't looking great in other reports.

04:16.760 --> 04:18.101 [SPEAKER_05]: So we'll dig into that story.

04:18.761 --> 04:31.407 [SPEAKER_05]: Also, UBS has a new report, and they are flagging a couple of really issues with US, US economy, US markets, and

04:32.481 --> 04:35.744 [SPEAKER_05]: They're worried a bit about Fed independence.

04:36.064 --> 04:39.007 [SPEAKER_05]: We know President Trump has been badgering Trump how to count rates.

04:40.048 --> 04:44.051 [SPEAKER_05]: There's going to be a new Fed president in within the next twelve months.

04:46.887 --> 04:51.332 [SPEAKER_05]: how much will they be once getting independent or doing the bidding of this administration.

04:52.032 --> 04:55.956 [SPEAKER_05]: So they're worried about that as well as the risk of the rule of law.

04:55.976 --> 05:00.000 [SPEAKER_05]: So this is what UPS is saying and we'll dig into that report.

05:00.581 --> 05:02.062 [SPEAKER_05]: And then lastly, if we have time,

05:02.963 --> 05:06.267 [SPEAKER_05]: Well, look at the data center buildout boom.

05:06.808 --> 05:18.584 [SPEAKER_05]: How much of it is sustainable and how much of it is maybe chasing or creating too much supply that could come back to bite the industry and those that are financing it.

05:18.624 --> 05:20.826 [SPEAKER_05]: So we'll take a look at that as well.

05:22.005 --> 05:27.708 [SPEAKER_05]: If we have time, now we also have voice bank calls, one is on closed-end funds and the other is on Murphy.

05:28.308 --> 05:35.011 [SPEAKER_05]: Or Murphy USA, and then we have questions that came in via the comment section over on the Invest Talk YouTube channel.

05:35.211 --> 05:40.934 [SPEAKER_05]: As well, and of course, I welcome your finance and investment questions right now at eight and eight and ninety nine chart.

05:41.414 --> 05:43.735 [SPEAKER_05]: We're going to have to do a short break on on this side.

05:43.755 --> 05:49.478 [SPEAKER_05]: I'll talk about today's market activity and take questions on the Invest Talk any time, listen to line at eight and eight ninety nine chart.

05:55.437 --> 06:00.398 [SPEAKER_02]: Serious investors are certain to have finance and investment questions.

06:00.618 --> 06:04.480 [SPEAKER_02]: Wanted to get your take on WW Granger.

06:04.680 --> 06:09.001 [SPEAKER_02]: And the best person to ask your question in the right way is you.

06:09.021 --> 06:14.522 [SPEAKER_02]: I was wondering from your standpoint, they're at downside in buying fractional shares versus whole shares.

06:14.822 --> 06:23.705 [SPEAKER_02]: And twenty four seven rain or shine, Justin Klein and Luke Rero stand ready to provide their unbiased answers.

06:24.065 --> 06:27.366 [SPEAKER_05]: The issue, though, is really over the last decade or so.

06:27.727 --> 06:31.188 [SPEAKER_05]: It's never maintained this level of profitability for a long period of time.

06:31.468 --> 06:35.370 [SPEAKER_00]: Modernies are incredibly volatile, so when the going is good, take some profit.

06:35.550 --> 06:38.431 [SPEAKER_02]: Your participation makes an investor talk better.

06:38.691 --> 06:39.271 [SPEAKER_02]: My name is Mike.

06:39.291 --> 06:41.172 [SPEAKER_02]: I'm calling in from Orange County, California.

06:41.192 --> 06:43.473 [SPEAKER_02]: This is Lewis calling from Bolivia.

06:43.573 --> 06:45.454 [SPEAKER_02]: Let's go talk to Chris and me.

06:45.674 --> 06:48.415 [SPEAKER_02]: So don't forget to call, investor talk.

06:48.655 --> 06:49.775 [SPEAKER_02]: First off, great show.

06:49.956 --> 06:50.956 [SPEAKER_02]: I went one, you two.

06:51.236 --> 06:53.457 [SPEAKER_02]: Eight, eight, eight, ninety nine chart.

07:02.397 --> 07:03.259 [SPEAKER_02]: Invest talk.

07:03.679 --> 07:05.362 [SPEAKER_02]: Your questions are free.

07:05.783 --> 07:07.747 [SPEAKER_02]: The answers are unbiased.

07:08.167 --> 07:09.810 [SPEAKER_02]: Justin Klein is here now.

07:10.291 --> 07:12.776 [SPEAKER_02]: Eight, eight, eight, ninety-nine chart.

07:15.851 --> 07:18.573 [SPEAKER_05]: Let's go take a look at the market today.

07:18.613 --> 07:24.037 [SPEAKER_05]: It was a holiday shortened trading day, but it was a positive one.

07:24.377 --> 07:33.024 [SPEAKER_05]: Overall, you had the NASDAQ up about one percent, S&P up about point eight percent, down up three quarters of one percent on the day.

07:33.865 --> 07:37.607 [SPEAKER_05]: And this was on the back of what is a headline number.

07:38.388 --> 07:38.968 [SPEAKER_05]: That was very good.

07:39.509 --> 07:46.334 [SPEAKER_05]: Now, later I'm going to talk about why these headline numbers are not looking very accurate, especially when you look at revisions, things like that.

07:46.394 --> 07:54.200 [SPEAKER_05]: But this one did come in better than expected, a hundred forty seven thousand jobs versus expectations of a hundred eighteen thousand jobs.

07:54.520 --> 08:00.824 [SPEAKER_05]: Hourly wages though, missed, they were expected to go up point three, percent month over month, and came in at point two percent.

08:01.845 --> 08:17.353 [SPEAKER_05]: And the annual number is at three point seven, grow annual wage growth versus consensus three point nine percent three point seven versus three point nine unemployment rate did tick down a bit but the dispersion the dispersion index which is

08:17.813 --> 08:25.359 [SPEAKER_05]: You know, is this the job's gains broad based and the answer was no actually more sectors lost jobs than gained jobs.

08:25.799 --> 08:27.740 [SPEAKER_05]: So that was kind of a red flag there.

08:27.760 --> 08:34.205 [SPEAKER_05]: And then you dig into what I think is a far more informative report, which is the ISM services and next member services.

08:34.546 --> 08:42.612 [SPEAKER_05]: This is if you're looking at one broad based report that kind of covers the largest part of the economy and

08:44.695 --> 08:51.522 [SPEAKER_05]: beyond just one kind of metric with its labor, or demand, or prices, et cetera.

08:51.822 --> 08:57.928 [SPEAKER_05]: This is the one because I, some services are, services are seventy plus percent of the economy.

08:58.408 --> 09:02.792 [SPEAKER_05]: So you're capturing over two thirds of economic activity.

09:03.713 --> 09:04.854 [SPEAKER_05]: And this came in at fifty.

09:06.536 --> 09:07.217 [SPEAKER_05]: The overall index.

09:09.038 --> 09:10.998 [SPEAKER_05]: Last month it was forty nine point nine.

09:11.058 --> 09:14.219 [SPEAKER_05]: So fifty anything about fifty is growth and anything below fifty is shrinkage.

09:14.479 --> 09:15.319 [SPEAKER_05]: Fifty is flat.

09:16.039 --> 09:20.580 [SPEAKER_05]: There's no growth in the overall index, but there are sub indices here.

09:21.380 --> 09:27.462 [SPEAKER_05]: And one is new orders that returned to expansion in your territory was forty six point four in May.

09:28.242 --> 09:29.782 [SPEAKER_05]: Move to fifty one point three.

09:29.882 --> 09:32.442 [SPEAKER_05]: So some some nice positive movements there.

09:33.003 --> 09:34.283 [SPEAKER_05]: But on the employment index.

09:35.258 --> 09:42.023 [SPEAKER_05]: That came in at forty seven point two back into contractionary territory, the previous month is at fifty point seven, slight growth.

09:42.804 --> 09:51.711 [SPEAKER_05]: So that forty seven point two more lines with last months, or yesterday's ADP figure, which saw thirty three thousand jobs lost, okay?

09:52.291 --> 09:56.895 [SPEAKER_05]: That, to me, gives a better picture of what's happening in labor market.

09:57.636 --> 10:00.258 [SPEAKER_05]: Now, on the price side, also the price is paid index.

10:01.749 --> 10:10.031 [SPEAKER_05]: That did tick down a bit, so it means inflation wasn't as bad in June as it wasn't May, but it's still elevated.

10:10.051 --> 10:15.852 [SPEAKER_05]: It's a sixty-eight point seven from, sorry, it's sixty-eight point seven in May, it's a sixty-seven point five.

10:17.333 --> 10:23.254 [SPEAKER_05]: And that was, but that was still high at the highest number outside of May since November of twenty-twenty-two.

10:23.394 --> 10:27.075 [SPEAKER_05]: So it improved, but not very much there.

10:27.895 --> 10:33.498 [SPEAKER_05]: So you had factory orders that came in, eight point two percent month over month in line with the expectations.

10:34.438 --> 10:36.439 [SPEAKER_05]: You had the continuing claims.

10:37.480 --> 10:38.620 [SPEAKER_05]: You know, you want to look at that.

10:38.760 --> 10:45.384 [SPEAKER_05]: I've said that's an important another indicator of the overall economy jobs market that's been ticking higher.

10:45.404 --> 10:48.285 [SPEAKER_05]: It was in the one point eight five million for a while.

10:48.305 --> 10:52.347 [SPEAKER_05]: You know, these are people that are on the unemployment goals, right?

10:52.367 --> 10:53.408 [SPEAKER_05]: They're getting unemployment checks.

10:54.455 --> 11:18.040 [SPEAKER_05]: it recently moved or the past the month or so from one point eight five-ish all the way to one point nine five so hundred thousand more people on an employment and this week it was flat from the previous week so no real change but it's not improving either so just kind of flattened and that also continues to say labor market not so hot but the market

11:18.908 --> 11:25.933 [SPEAKER_05]: liked that as well as the GOP spending bill that has passed headed to the president's desk and will be signed.

11:25.973 --> 11:30.056 [SPEAKER_05]: So that just kind of increases the fiscal dominance that we are in.

11:30.737 --> 11:35.640 [SPEAKER_05]: It's very difficult to fix our budget situation with true austerity.

11:35.660 --> 11:38.903 [SPEAKER_05]: You know, there are ways to do it, but

11:40.527 --> 11:42.649 [SPEAKER_05]: It's politically very difficult.

11:43.630 --> 11:46.473 [SPEAKER_05]: And that's why you continue to see spending go up and up.

11:46.533 --> 11:51.477 [SPEAKER_05]: And that's why you should expect a more inflationary environment to inflate away the debt.

11:51.497 --> 11:52.418 [SPEAKER_05]: That's the plan here.

11:52.879 --> 11:54.020 [SPEAKER_05]: It's not a austerity.

11:54.440 --> 11:57.143 [SPEAKER_05]: It is, and President Trump has said that.

11:57.203 --> 11:58.344 [SPEAKER_05]: This is, we're going to grow.

11:58.364 --> 11:59.785 [SPEAKER_05]: We're going to grow our way out of the debt.

12:00.065 --> 12:01.166 [SPEAKER_05]: That's why they want to lower rates.

12:01.206 --> 12:01.707 [SPEAKER_05]: They want it to.

12:03.748 --> 12:11.797 [SPEAKER_05]: maybe not yield curve control, but basically lower rates and bring those down lower that that cost burden and run the economy hot.

12:12.137 --> 12:18.103 [SPEAKER_05]: That is the plan, but that is also a very inflationary plan.

12:18.484 --> 12:21.507 [SPEAKER_05]: And so that's what I think the markets reaction to as well.

12:22.448 --> 12:24.350 [SPEAKER_05]: So that was the market today.

12:24.370 --> 12:28.573 [SPEAKER_05]: Now every day we receive questions from the comment section of the Invest Talk YouTube channel.

12:28.613 --> 12:29.714 [SPEAKER_05]: Here's one that came in earlier.

12:30.514 --> 12:33.476 [SPEAKER_05]: Jim says, I'd love your thoughts on AMH.

12:34.197 --> 12:37.319 [SPEAKER_05]: Do you think it's a good hold for the next decade or so?

12:38.120 --> 12:38.780 [SPEAKER_05]: AMH.

12:40.842 --> 12:44.965 [SPEAKER_05]: It's always tenuous when you say next decade or so things can certainly shift.

12:45.025 --> 12:51.150 [SPEAKER_05]: But this is a read that owns single family homes for rent.

12:52.589 --> 12:59.273 [SPEAKER_05]: And it's been doing well from a growth perspective.

13:00.674 --> 13:07.018 [SPEAKER_05]: Funds from operation are expected to be up to seventeen percent this year and then another five percent next year.

13:08.079 --> 13:10.161 [SPEAKER_05]: So that's obviously a positive.

13:10.761 --> 13:16.925 [SPEAKER_05]: But I do think that we are headed into a housing market that is a lot more mixed.

13:18.427 --> 13:19.667 [SPEAKER_05]: And now it'd be my biggest worry.

13:20.367 --> 13:25.529 [SPEAKER_05]: I'd have to look at their dispersion of where these homes are located.

13:26.849 --> 13:35.731 [SPEAKER_05]: Generally, I don't find these, I rather own apartment reads frankly than these single family homes.

13:36.591 --> 13:45.513 [SPEAKER_05]: I just think that there's an efficiency and profitability level that the apartment reads can achieve.

13:46.842 --> 13:50.423 [SPEAKER_05]: You know, when you're managing significant family homes, it could be a lot more challenging.

13:50.583 --> 14:07.026 [SPEAKER_05]: When you have the ability to manage a bunch of units, you know, dozens of hundreds of units on one place versus kind of spread out single family homes, that can be a lot more challenging.

14:07.086 --> 14:09.027 [SPEAKER_05]: So I don't dislike it.

14:10.130 --> 14:14.231 [SPEAKER_05]: But it's probably wouldn't be near the top of my list of REITs to own for the long term.

14:14.411 --> 14:17.072 [SPEAKER_05]: Thanks for the question and encourage everyone.

14:17.732 --> 14:22.533 [SPEAKER_05]: If you, maybe you don't like to pick up the phone and leave a message.

14:22.893 --> 14:29.255 [SPEAKER_05]: You could always head over to your in best talk YouTube channel and subscribe to the channel.

14:29.275 --> 14:33.496 [SPEAKER_05]: That would be great as well as a leave your comments over there as well and questions.

14:34.296 --> 14:35.056 [SPEAKER_05]: That was briefly mentioned.

14:35.076 --> 14:39.037 [SPEAKER_05]: The newest K-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P

14:40.065 --> 14:45.507 [SPEAKER_05]: Now this week in the KP Insights section, we discuss moves in the dollar for the first half of the twenty twenty five.

14:45.907 --> 14:47.707 [SPEAKER_05]: I'm going to follow up to this episode.

14:48.368 --> 14:49.848 [SPEAKER_05]: In the stock section, we mentioned a U.S.

14:49.888 --> 15:00.872 [SPEAKER_05]: based furniture company and an integrated facility solutions company and in the portfolio management section, we dive into questions to ask yourself when managing your own portfolio.

15:01.332 --> 15:08.554 [SPEAKER_05]: And if you're interested in learning more of as it invest talk.com and subscribe newsletter will come to your inbox every Saturday.

15:09.580 --> 15:11.023 [SPEAKER_05]: Now, we're moving into a break still to come.

15:11.464 --> 15:17.458 [SPEAKER_05]: My focus point more answers to your questions, and I encourage you to call right now to invest stock at eight and eight ninety nine chart.

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15:39.508 --> 15:45.512 [SPEAKER_02]: And now Justin Klein is here and taking your finance and investment questions live.

15:45.972 --> 15:47.073 [SPEAKER_02]: Call Invest Talk.

15:47.513 --> 15:50.035 [SPEAKER_02]: Eight, eight, eight, ninety-nine chart.

15:53.360 --> 16:05.206 [SPEAKER_05]: Now, our main focus point today is about the US dollar and how it's off to its worst start in fifty years and what impact it will have on you and the broader economy.

16:06.147 --> 16:17.092 [SPEAKER_05]: Now, the dollar is down more than ten percent in the first half of twenty twenty five against a group of foreign currencies that belong to top US trading partners.

16:17.853 --> 16:20.374 [SPEAKER_05]: It's a trade weighted basket, et cetera.

16:23.053 --> 16:26.015 [SPEAKER_05]: This is going to have already as had wide ranging of effications.

16:26.055 --> 16:31.337 [SPEAKER_05]: So one good example is the first half you actually make more money by shorting the dollar than you would be long.

16:31.557 --> 16:35.520 [SPEAKER_05]: The S&P five hundred for example, S&P and the first half was up around five percent.

16:36.040 --> 16:38.281 [SPEAKER_05]: The dollar was down to ten percent, almost eleven percent.

16:41.167 --> 16:46.011 [SPEAKER_05]: A big reason the market was up was that, remember, the dollar is the denominator.

16:46.291 --> 17:03.224 [SPEAKER_05]: And that's what you have to look at here is that this is a likelihood of path forward, that a huge drawdown in equity markets is unlikely if the dollar continues to move lower, because number is Dr. Price and Dollars.

17:04.926 --> 17:06.587 [SPEAKER_05]: Okay, it's the denominator.

17:08.107 --> 17:13.948 [SPEAKER_05]: If you look at the S&P of a hundred in euro terms, we're not at new highs because of the decline of the dollar.

17:14.648 --> 17:30.292 [SPEAKER_05]: For example, so you understand that dynamic and the likely path forward to look at the fiscal dominance that we are in, where despite the whole doge rhetoric, the not-cut spending this bill is going to increase spending.

17:32.868 --> 17:46.737 [SPEAKER_05]: And so the whole history of Congress or our government over the last fifty plus years has been, doesn't matter whether you're blue or red or purple or ever in between, you increase spending.

17:48.518 --> 18:01.627 [SPEAKER_05]: And history says when you control the currency, you inflate it with a debt, you weaken the dollar, you weaken the currency so that

18:02.822 --> 18:04.003 [SPEAKER_05]: the debt becomes more palatable.

18:06.264 --> 18:07.484 [SPEAKER_05]: You'd flate away.

18:07.644 --> 18:10.866 [SPEAKER_05]: The debt that did this from post-World War II all the way into the early eighties.

18:11.446 --> 18:15.088 [SPEAKER_05]: It's similar debt situation post-World War II and what did they do?

18:15.148 --> 18:22.712 [SPEAKER_05]: Then the Fed Institute yields curve control invested in infrastructure, the national highway system, for example, and boom.

18:25.573 --> 18:28.995 [SPEAKER_05]: By the early eighties, our debt to GP ratio was thirty percent.

18:29.937 --> 18:30.337 [SPEAKER_05]: very low.

18:30.798 --> 18:35.061 [SPEAKER_05]: It's a loud vulgar to raise rates dramatically because we don't have a lot of debt sitting there.

18:35.081 --> 18:36.042 [SPEAKER_05]: We can't do that anymore, right?

18:36.082 --> 18:36.702 [SPEAKER_05]: We have a lot of debt.

18:38.063 --> 18:40.245 [SPEAKER_05]: So understand those dynamics, they're very important.

18:41.226 --> 18:43.668 [SPEAKER_05]: Obviously the current trade policy that

18:44.947 --> 18:53.314 [SPEAKER_05]: is up and down and very uncertain, as well as criticism about federal reserve and a clear indication that the next Fed President will dramatically lower rates.

18:53.774 --> 18:59.759 [SPEAKER_05]: Well, that's also kind of a roting, trusting the dollar as a safe haven asset.

19:00.340 --> 19:03.242 [SPEAKER_05]: And four investors are definitely marginally selling assets.

19:04.423 --> 19:06.765 [SPEAKER_05]: But most of all, they're just not buying nearly as many.

19:07.846 --> 19:09.267 [SPEAKER_05]: They're buying things like old.

19:10.315 --> 19:15.398 [SPEAKER_05]: And that's why gold, and silver, and these other assets are becoming more valuable.

19:17.679 --> 19:18.580 [SPEAKER_05]: That's how these things work.

19:18.600 --> 19:29.326 [SPEAKER_05]: That's why I say if you don't own harder assets like base metals, like precious metals, your portfolio is not complete in this environment.

19:30.727 --> 19:37.671 [SPEAKER_05]: Now central banks, I think it was over ninety percent said that they are buying more gold over the next year.

19:40.173 --> 19:42.754 [SPEAKER_05]: What does this mean for you?

19:43.715 --> 19:44.215 [SPEAKER_05]: For the economy.

19:44.795 --> 19:50.218 [SPEAKER_05]: The first is, important, important goods are going to be, are going to cost more.

19:50.398 --> 19:53.820 [SPEAKER_05]: Inflation is likely to head to over three percent by the end of the year.

19:56.241 --> 20:01.804 [SPEAKER_05]: Around two and a half percent now, the back half of the year will be colored by higher inflation.

20:02.464 --> 20:03.524 [SPEAKER_05]: Inflationary surprises.

20:04.045 --> 20:04.225 [SPEAKER_05]: Not.

20:04.800 --> 20:10.821 [SPEAKER_05]: seven, eight, nine percent, like we were in twenty twenty one, not that level, but a re-acceleration.

20:13.362 --> 20:22.164 [SPEAKER_05]: Simply because of of of lower value than all are in those imported goods, which we, you know, we buy a lot of they're going to cost more.

20:22.904 --> 20:25.804 [SPEAKER_05]: And if you want to travel abroad, the dollar is going to go quite as far.

20:26.625 --> 20:28.025 [SPEAKER_05]: I know that I was just in Europe.

20:29.027 --> 20:41.052 [SPEAKER_05]: Now, the positive here for the, for a weaker dollar, and this kind of aligns with President Trump's agenda is making our goods more competitive.

20:41.852 --> 20:54.357 [SPEAKER_05]: And while tariffs can help with the margins, what really needs to take place is a real strong devaluation of the dollar, but there are side effects that just as there's side effects to the dollar being too strong.

20:55.770 --> 20:57.832 [SPEAKER_05]: The side effects can go the other way, right?

20:58.432 --> 21:03.556 [SPEAKER_05]: A consistent, strong dollar over the past, twenty, thirty years.

21:04.397 --> 21:08.840 [SPEAKER_05]: As more and more money was put into US assets, US treasuries.

21:09.661 --> 21:10.862 [SPEAKER_05]: Cause disinflation.

21:11.682 --> 21:13.884 [SPEAKER_05]: It forced the Fed to keep rates low.

21:14.565 --> 21:16.166 [SPEAKER_05]: The try to fight that disinflation.

21:17.587 --> 21:20.910 [SPEAKER_05]: Well now is the exact opposite, right?

21:20.930 --> 21:23.492 [SPEAKER_05]: When you unwind that, it creates inflation.

21:24.478 --> 21:27.520 [SPEAKER_05]: And while the Fed is, you may be pushed to lower rates.

21:28.701 --> 21:34.145 [SPEAKER_05]: I mean, it's going to start to become a problem later this year and into next year.

21:34.786 --> 21:42.731 [SPEAKER_05]: If the Fed is no longer independent and pushes rates, it's forced to push rates much, much lower.

21:42.751 --> 21:45.794 [SPEAKER_05]: So it's going to watch out for as we head into twenty twenty six as well.

21:46.564 --> 21:50.567 [SPEAKER_05]: Now, tomorrow Friday is the July fourth federal holiday, so the stock market will be closed.

21:50.667 --> 21:51.588 [SPEAKER_05]: And now I have no fear though.

21:51.628 --> 21:55.411 [SPEAKER_05]: We have put together a compilation show, a best of color question podcast.

21:56.151 --> 21:56.552 [SPEAKER_05]: Look for that.

21:56.612 --> 22:00.995 [SPEAKER_05]: We posted all in the invest.com and other platforms as well.

22:01.035 --> 22:02.716 [SPEAKER_05]: Remember, the invest talk downloads are free.

22:02.816 --> 22:05.679 [SPEAKER_05]: And now my phone lines are open for you at eight to eight, nine, nine.

22:13.920 --> 22:18.981 [SPEAKER_02]: Every investor is working to build a secure financial future.

22:19.502 --> 22:25.003 [SPEAKER_02]: The more you learn about how the market works, the better your chances for success.

22:25.643 --> 22:29.204 [SPEAKER_02]: In Vestar, eight, eight, nine, chart.

22:29.925 --> 22:37.807 [SPEAKER_07]: Hi, my name is Ernesto from Wood Lake, California, and I'm calling about thicker symbol, M-U-S-A.

22:38.267 --> 22:39.007 [SPEAKER_07]: Use the oil.

22:39.527 --> 22:41.688 [SPEAKER_07]: I've held it for at least two plus years.

22:42.448 --> 22:44.049 [SPEAKER_07]: And I'm playing with the house money.

22:44.609 --> 22:47.130 [SPEAKER_07]: I was just wondering what your platform that you pay for.

22:47.150 --> 22:51.071 [SPEAKER_07]: Do you see any revenue or earnings per share growth moving forward?

22:51.471 --> 22:53.912 [SPEAKER_07]: If not, I'm going to get rid of the whole position.

22:54.052 --> 22:58.474 [SPEAKER_07]: And if you do show any growth, I'm probably going to just play with the house as money.

22:59.074 --> 23:00.315 [SPEAKER_07]: Take my profits.

23:00.655 --> 23:02.736 [SPEAKER_07]: Take a sell about three quarters of my position.

23:03.376 --> 23:04.496 [SPEAKER_07]: Waiting to hear your answer.

23:05.157 --> 23:06.897 [SPEAKER_07]: Guys are doing the best and I love it.

23:07.358 --> 23:07.978 [SPEAKER_07]: Have a good day.

23:08.178 --> 23:08.518 [SPEAKER_07]: Bye-bye.

23:08.725 --> 23:10.867 [SPEAKER_05]: Well, thank you for the kind words.

23:10.907 --> 23:16.051 [SPEAKER_05]: You're looking at Murphy, USAA, it operates more than seventeen hundred gas stations.

23:16.331 --> 23:21.515 [SPEAKER_05]: And community stores primarily across the Midwest and South Eastern United States.

23:22.756 --> 23:25.858 [SPEAKER_05]: And it owns about seventy five percent of its locations.

23:26.819 --> 23:30.061 [SPEAKER_05]: And it looks like it has some near Walmart super center.

23:30.121 --> 23:31.943 [SPEAKER_05]: So you might see a lot there.

23:32.983 --> 23:34.685 [SPEAKER_05]: And see.

23:36.393 --> 23:38.436 [SPEAKER_05]: Yeah, it's certainly a good business.

23:39.398 --> 23:44.225 [SPEAKER_05]: It's return equity is, let me pull this up here, around sixty one percent.

23:44.286 --> 23:45.628 [SPEAKER_05]: So very, very profitable.

23:46.229 --> 23:48.652 [SPEAKER_05]: Free cash flow though has come down a bit.

23:49.093 --> 23:51.196 [SPEAKER_05]: It peaked out back in twenty twenty two round.

23:51.797 --> 23:53.578 [SPEAKER_05]: says, you know, a million dollars.

23:53.638 --> 23:57.260 [SPEAKER_05]: Now it's down to three hundred seventy million and had it lower.

23:57.280 --> 24:03.483 [SPEAKER_05]: And that's just seeing with earnings expectations this year down two percent to twenty three dollars and seventy one cents.

24:03.943 --> 24:08.946 [SPEAKER_05]: But next year, it's supposed to return the product to return the growth up to twenty seven dollars in the fifty two cents.

24:08.986 --> 24:10.886 [SPEAKER_05]: Now usually those are a bit more optimistic.

24:11.507 --> 24:13.328 [SPEAKER_05]: So I doubt it's going to be that strong.

24:14.696 --> 24:16.918 [SPEAKER_05]: You know, it's, it's growth is certainly slow.

24:16.978 --> 24:22.444 [SPEAKER_05]: And in your, I would temper saying, oh, just because there's no growth that it's a bad company.

24:22.464 --> 24:23.865 [SPEAKER_05]: No, it's very profitable.

24:24.425 --> 24:26.628 [SPEAKER_05]: It has a very solid balance sheet.

24:27.368 --> 24:30.391 [SPEAKER_05]: It's taking that cash flow and it's buying back shares.

24:30.471 --> 24:31.773 [SPEAKER_05]: So I like that.

24:32.673 --> 24:39.200 [SPEAKER_05]: I like the cash flow even though it's not a great free cash flow yield about a four percent free cash flow yield.

24:39.641 --> 24:43.305 [SPEAKER_05]: That's decent not amazing, but I like the profitability.

24:43.685 --> 24:46.848 [SPEAKER_05]: Not a big dividend, but the dividend certainly has room to grow here.

24:47.309 --> 24:54.196 [SPEAKER_05]: Now let me take a look at the chart because you're probably going to get a movement in the chart before you see

24:55.609 --> 24:56.710 [SPEAKER_05]: major growth.

24:57.151 --> 25:04.177 [SPEAKER_05]: These convenience stores are they tend to be very good businesses and fairly consistent.

25:04.197 --> 25:10.863 [SPEAKER_05]: So even though free cash flows come down from a tie, it's still above pre-pandemic levels back then.

25:10.903 --> 25:15.707 [SPEAKER_05]: It was only two hundred million dollars in free cash flow in the third quarter of twenty nineteen.

25:15.727 --> 25:15.767 [SPEAKER_05]: So

25:17.879 --> 25:20.001 [SPEAKER_05]: It's still in a long-term uptrend.

25:21.222 --> 25:23.023 [SPEAKER_05]: I actually hold it to be honest with you.

25:23.063 --> 25:24.985 [SPEAKER_05]: I think it's at a reasonable valuation.

25:25.485 --> 25:32.031 [SPEAKER_05]: You had an enterprise value to EBITDA around ten, run ten, and it has pulled back.

25:33.272 --> 25:34.433 [SPEAKER_05]: But I like the business.

25:34.573 --> 25:38.476 [SPEAKER_05]: I would probably hold on to it to be frank, even though growth certainly has slow.

25:39.257 --> 25:40.117 [SPEAKER_05]: Thanks for the call.

25:40.498 --> 25:42.720 [SPEAKER_05]: Let's play two and a row from eight to eight, nine you mentioned.

25:43.580 --> 25:45.442 [SPEAKER_04]: Justin, Luke, Chuck McLean.

25:46.057 --> 25:47.738 [SPEAKER_04]: Thank you for the show and everything you do.

25:48.178 --> 25:54.943 [SPEAKER_04]: Got a question today about ticker FL-O Flowers Foods Inc Company.

25:55.003 --> 25:58.545 [SPEAKER_04]: About three years ago, cost averaged in as it was going up.

25:58.986 --> 26:03.689 [SPEAKER_04]: Continue to cost average in as it's been going down now for about a year.

26:04.730 --> 26:06.791 [SPEAKER_04]: Now I'm wondering if I'm trying to catch a falling knife.

26:07.191 --> 26:08.852 [SPEAKER_04]: Should I sell this and get rid of it?

26:09.573 --> 26:10.193 [SPEAKER_04]: Write it out.

26:10.413 --> 26:12.154 [SPEAKER_04]: See if we can re-correct.

26:12.735 --> 26:14.076 [SPEAKER_04]: Continue to cost average in.

26:15.016 --> 26:15.797 [SPEAKER_04]: What are your thoughts?

26:16.317 --> 26:19.579 [SPEAKER_04]: Thank you again for all you do listening on the podcast.

26:21.400 --> 26:23.421 [SPEAKER_05]: All right, looking at flowers food.

26:23.521 --> 26:34.427 [SPEAKER_05]: This is a blast in the past for me because this is a name we did own a long long time go probably a decade ago something around that can't remember exactly but definitely a while ago.

26:34.447 --> 26:37.369 [SPEAKER_05]: And it makes baked goods.

26:40.567 --> 26:46.331 [SPEAKER_05]: It's main brands are nature's own, under tasty cake, cany and bake house, et cetera.

26:47.572 --> 26:50.594 [SPEAKER_05]: And it was growing nicely pre-pandemic.

26:52.095 --> 26:54.317 [SPEAKER_05]: But growth has certainly slowed.

26:54.657 --> 27:03.983 [SPEAKER_05]: Twenty twenty three earnings were down six percent to a dollar twenty then back up and last year to a dollar twenty eight but then that dollar ten this year and so it's the only dollar thirteen next year.

27:04.423 --> 27:09.367 [SPEAKER_05]: You're getting a nice dividend six point one percent but the problem is that debt level.

27:10.428 --> 27:18.313 [SPEAKER_05]: It does have a decent amount of debt about two billion dollars in in that debt which worries me a bit.

27:20.054 --> 27:27.661 [SPEAKER_05]: That just jumped recently from about a billion to one point in, not sure made an acquisition or what, but clearly the market didn't like it.

27:28.382 --> 27:33.908 [SPEAKER_05]: Now, let me see if there's a turnaround potentially, I don't really see it.

27:33.948 --> 27:39.653 [SPEAKER_05]: Now, the only positive here is recently, you've had a high amount of volume.

27:39.753 --> 27:41.795 [SPEAKER_05]: And it's been in a long downtrend.

27:42.296 --> 27:43.557 [SPEAKER_05]: It peaked around.

27:43.577 --> 27:44.098 [SPEAKER_05]: Let's see here.

27:45.237 --> 28:07.345 [SPEAKER_05]: around thirty dollars per share back in twenty twenty two and now it's at sixteen dollars per share so it's been a strong downtrend once again volume is picking up and that could mark a trend change but i wouldn't bet on it you know uh... it is relatively cheap

28:10.372 --> 28:11.112 [SPEAKER_05]: This is a tough one.

28:11.412 --> 28:12.893 [SPEAKER_05]: You know, I kind of follow the chart here.

28:13.673 --> 28:14.733 [SPEAKER_05]: I would have an out though.

28:14.853 --> 28:21.635 [SPEAKER_05]: What is what I would say is things are slightly improving on the chart, but not enough to get me excited.

28:21.735 --> 28:23.616 [SPEAKER_05]: And that's why I would have an out.

28:23.656 --> 28:29.457 [SPEAKER_05]: If it breaks below the recent low around fifteen seventy five or so, I would be out.

28:30.718 --> 28:31.638 [SPEAKER_05]: Not sixteen ten.

28:31.678 --> 28:32.898 [SPEAKER_05]: So it's kind of teetering there.

28:33.458 --> 28:36.779 [SPEAKER_05]: I would be quick to be out if this breaks below those levels.

28:38.020 --> 28:39.320 [SPEAKER_05]: Thanks for the call.

28:40.770 --> 28:44.173 [SPEAKER_05]: Now let's touch a bit on the labor market.

28:44.213 --> 28:48.135 [SPEAKER_05]: We had the jobs number that came out today, better than expected.

28:48.476 --> 28:56.782 [SPEAKER_05]: We'll talk about why the, that headline number, everyone talks about not really a great number to look at anymore.

28:57.762 --> 29:05.108 [SPEAKER_05]: Now through May, the US added on average, a hundred and twenty four thousand jobs this year.

29:06.735 --> 29:10.416 [SPEAKER_05]: No, that's going to go up after this headline number, what is it?

29:10.956 --> 29:19.378 [SPEAKER_05]: So, you know, let's call it, you know, one, one, one, twenty seven versus last year, the average was a hundred sixty thousand jobs.

29:20.658 --> 29:22.499 [SPEAKER_05]: And that's after all the revisions, okay.

29:22.639 --> 29:26.060 [SPEAKER_05]: So certainly it's been a stair step lower in job growth.

29:27.220 --> 29:30.801 [SPEAKER_05]: Part of this is slowing population growth and aging workforce.

29:31.121 --> 29:33.342 [SPEAKER_05]: All of that makes it harder to add more jobs.

29:33.942 --> 29:34.582 [SPEAKER_05]: So that's part of it.

29:35.908 --> 29:38.190 [SPEAKER_05]: Now, layoff activity remains low.

29:38.230 --> 29:41.592 [SPEAKER_05]: People aren't laying off workers at a dramatic clip.

29:41.612 --> 29:43.754 [SPEAKER_05]: You can see that within the jobless claims, et cetera.

29:44.555 --> 29:49.659 [SPEAKER_05]: But it's about hiring, hiring is not happening at the same pace.

29:50.919 --> 29:59.166 [SPEAKER_05]: An evidence is mounting that these headline numbers are overstating the strength of the labor market in a big, big way.

30:00.465 --> 30:09.092 [SPEAKER_05]: Now, from January through April, the labor market is so far revised down monthly employment gains by an average of fifty five thousand jobs.

30:10.313 --> 30:13.815 [SPEAKER_05]: So the headline was on average two hundred twenty eight thousand when it was first announced.

30:15.717 --> 30:17.918 [SPEAKER_05]: And then it was first revised to a hundred eighty five thousand.

30:18.859 --> 30:21.401 [SPEAKER_05]: And then now there are a hundred and twenty thousand when it was advised again.

30:21.421 --> 30:23.903 [SPEAKER_05]: The wise is happening.

30:25.032 --> 30:39.761 [SPEAKER_05]: Well, the best guess, the best evidence here, is that the respondents to this survey, maybe these are surveys, is that those that respond are the larger employees, employers.

30:40.702 --> 30:52.329 [SPEAKER_05]: The larger employers are well capitalized, well run, they have deep pockets and they can handle an uncertain situation with tariffs

30:53.700 --> 30:58.062 [SPEAKER_05]: and the cost of debt, et cetera, better than smaller businesses.

31:00.664 --> 31:07.288 [SPEAKER_05]: And so when the survey recipients eventually get around to it, the later ones tend to be those smaller businesses.

31:07.908 --> 31:11.630 [SPEAKER_05]: And smaller businesses are the ones that are struggling more than any.

31:13.351 --> 31:19.014 [SPEAKER_05]: Now, in August, there will be big yearly revisions.

31:21.728 --> 31:24.511 [SPEAKER_05]: If you had every six months, so they did it in, sorry, every six months of revisions.

31:24.571 --> 31:26.694 [SPEAKER_05]: So they did it in February, they're going to do it in August.

31:28.456 --> 31:41.592 [SPEAKER_05]: And what it looks like is that there will be about six hundred and seven thousand fewer jobs reported than actually was reported.

31:43.399 --> 31:43.579 [SPEAKER_05]: Okay.

31:44.039 --> 31:50.681 [SPEAKER_05]: Now the survey of businesses shows that the US added a one point seven million jobs over the twelve months ending in May.

31:51.421 --> 31:53.082 [SPEAKER_05]: That's according to that survey, right?

31:53.102 --> 31:53.842 [SPEAKER_05]: The headline survey.

31:54.522 --> 31:59.384 [SPEAKER_05]: But if you look at the household survey, that's much smaller one million jobs.

32:00.024 --> 32:03.865 [SPEAKER_05]: That's much closer to what you're seeing in things like the ISM services.

32:03.925 --> 32:07.446 [SPEAKER_05]: So they say the ADP report and the ISM employment figure.

32:10.527 --> 32:12.148 [SPEAKER_05]: And yesterday you saw ADP say,

32:13.780 --> 32:16.821 [SPEAKER_05]: Number of private sector jobs, declined by thirty-three thousand.

32:16.841 --> 32:18.622 [SPEAKER_05]: Remember, they're getting real-time data.

32:18.902 --> 32:20.482 [SPEAKER_05]: This is not a survey.

32:20.963 --> 32:27.945 [SPEAKER_05]: This is ADP, the public company, ADP, largest payroll company in the country.

32:29.426 --> 32:31.566 [SPEAKER_05]: And they service both large and small businesses.

32:34.027 --> 32:41.570 [SPEAKER_05]: And what they're seeing is that smaller businesses, those with fifty or less employees, lost forty-seven thousand jobs last month.

32:43.218 --> 32:47.639 [SPEAKER_05]: So that means that the large employers actually added about fourteen thousand jobs.

32:48.859 --> 32:54.440 [SPEAKER_05]: And so far this year, small companies have added on average only about fifty three hundred jobs a month.

32:56.181 --> 33:00.341 [SPEAKER_05]: Last year, those small businesses added forty thousand jobs a month.

33:02.382 --> 33:03.962 [SPEAKER_05]: Major, major difference.

33:05.022 --> 33:11.604 [SPEAKER_05]: So that's why you really can't look at these headline numbers.

33:11.744 --> 33:12.404 [SPEAKER_05]: They're not as

33:14.156 --> 33:19.840 [SPEAKER_05]: Reliables they were because of the way that the surveys done.

33:21.641 --> 33:24.623 [SPEAKER_05]: So what they do is they take the response, they extrapolate that number.

33:25.363 --> 33:28.645 [SPEAKER_05]: Like that's what all employers are doing.

33:30.686 --> 33:39.692 [SPEAKER_05]: But as they get in the backlog of late submissions, et cetera, and really get an understanding with these small businesses are doing,

33:41.406 --> 33:52.994 [SPEAKER_05]: They start to revise it, and they realize that no, it's not just about those large employers, it's about the small ones as well, which is about half the labor market or the small businesses.

33:54.715 --> 34:00.859 [SPEAKER_05]: So that's why the labor market, I think, is breaking, you see that with the continuing claims for unemployment.

34:02.084 --> 34:07.849 [SPEAKER_05]: said that many times and that remains that came out today and that was flat month week over week.

34:08.350 --> 34:13.434 [SPEAKER_05]: But still at that one point nine five million level of people that are on unemployment.

34:16.036 --> 34:18.479 [SPEAKER_05]: Let's go answer an investor talk YouTube question.

34:19.680 --> 34:23.823 [SPEAKER_05]: Tim Ali says I have a question about comparing past performance.

34:23.903 --> 34:24.524 [SPEAKER_05]: This will be interesting.

34:26.306 --> 34:28.748 [SPEAKER_05]: Says hi, Tim, a loyal listener from the UK.

34:30.377 --> 34:32.798 [SPEAKER_05]: That's the British way of saying, love what you guys do.

34:33.899 --> 34:40.342 [SPEAKER_05]: Building a pension pot to start drawing down in Fort, four years time, I've generally questions about comparing past performance.

34:41.003 --> 34:49.607 [SPEAKER_05]: For example, I have a core satellite portfolio satellite positions include two similar text stocks, PCT, and he gave me some, um, use it.

34:50.608 --> 34:59.753 [SPEAKER_05]: But with quite different past performance, one of them is six percent better looking at a five year annualized growth, but you look at growth over the next last five years, it's the other way around.

35:02.524 --> 35:04.005 [SPEAKER_05]: Sorry for the last year, the other way around.

35:07.207 --> 35:10.490 [SPEAKER_05]: Six percent community make difference to me when I think about drawing on four years.

35:10.830 --> 35:12.151 [SPEAKER_05]: How would you read this difference?

35:12.211 --> 35:14.933 [SPEAKER_05]: Or would you simply not be reacting to past performance at all?

35:15.994 --> 35:19.016 [SPEAKER_05]: If not, how do you read funds supposed to individual stocks?

35:19.076 --> 35:22.338 [SPEAKER_05]: How do you look at the same fundamentals that you would for a company?

35:24.420 --> 35:25.461 [SPEAKER_05]: So there's definitely a big difference.

35:25.841 --> 35:28.403 [SPEAKER_05]: If you're looking at individual company versus a fund.

35:29.777 --> 35:31.518 [SPEAKER_05]: You definitely want to compare the two.

35:32.758 --> 35:33.699 [SPEAKER_05]: They're apples or oranges.

35:34.839 --> 35:40.922 [SPEAKER_05]: And when you're comparing funds, you want to look at also what exposures they have.

35:43.003 --> 35:58.171 [SPEAKER_05]: My guess, based on what you are talking about, is that what they might both be funds, they are very different in their exposure because of the wild differences in that five-year performance.

36:01.263 --> 36:09.033 [SPEAKER_05]: You know, the age-old story of or saying past performance of that indicative of future performances is absolutely true.

36:09.093 --> 36:12.377 [SPEAKER_05]: You never want to simply rely on that.

36:14.648 --> 36:18.069 [SPEAKER_05]: You want to be comparing, like I said, apples to apples.

36:18.749 --> 36:19.829 [SPEAKER_05]: So we're looking at funds.

36:20.629 --> 36:32.192 [SPEAKER_05]: If you're looking at a domestic large cap, growth fund, and a foreign small kind of value fund, they must both be equities, but they're going to have very different performance.

36:34.132 --> 36:35.472 [SPEAKER_05]: So you don't want to look at it in that way.

36:37.333 --> 36:38.293 [SPEAKER_05]: You want to throw that all out.

36:39.697 --> 36:41.597 [SPEAKER_05]: And my guess here is that you will want to throw it on.

36:42.358 --> 36:45.118 [SPEAKER_05]: What you want to do is say, let's take step back.

36:46.598 --> 36:51.899 [SPEAKER_05]: This recent performance over the last year, probably more indicative.

36:53.200 --> 36:56.700 [SPEAKER_05]: By the last five years, you've had COVID, you know, it's Europe's interest rates.

36:56.780 --> 37:00.681 [SPEAKER_05]: You had, uh, he's drawn on twenty twenty two.

37:02.602 --> 37:04.262 [SPEAKER_05]: Big rally over the past couple of years.

37:09.630 --> 37:15.452 [SPEAKER_05]: And now we're in a more inflationary, persistently inflationary environment, weaker dollar, et cetera, harder assets are doing better.

37:16.353 --> 37:23.415 [SPEAKER_05]: So I think the last year's performance is probably more indicative of what you're going to see versus five years.

37:24.816 --> 37:26.496 [SPEAKER_05]: So it's really about what that exposure is.

37:26.516 --> 37:36.140 [SPEAKER_05]: I would be leaning on equities that have exposure to harder assets.

37:39.172 --> 37:41.994 [SPEAKER_05]: that are going to benefit from an inflationary environment.

37:42.514 --> 37:43.595 [SPEAKER_05]: That's the way you want to think about it.

37:43.635 --> 37:47.818 [SPEAKER_05]: Don't just go based on some five-year performance or even the one year.

37:47.858 --> 37:49.039 [SPEAKER_05]: You know, I want to look at that.

37:49.179 --> 37:50.560 [SPEAKER_05]: Why is it up for the one year?

37:51.521 --> 37:52.982 [SPEAKER_05]: Could be a crapshoot, could be an anomaly.

37:56.065 --> 37:56.645 [SPEAKER_05]: Thanks for the question.

37:58.648 --> 38:03.710 [SPEAKER_05]: This is Invest.com, Justin Klein, and we have one goal here, and help you achieve your own version of financial freedom.

38:04.190 --> 38:06.251 [SPEAKER_05]: And I work continues after this final break.

38:06.271 --> 38:07.412 [SPEAKER_05]: So, get your questions in right now.

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38:41.138 --> 38:41.478 [SPEAKER_06]: Good morning.

38:41.498 --> 38:43.579 [SPEAKER_06]: I think you're checking Jayang's field dynamic.

38:43.779 --> 38:45.259 [SPEAKER_06]: Take your single set, see it all the way.

38:45.279 --> 38:49.321 [SPEAKER_06]: All right, let me stop for over a few years.

38:49.541 --> 38:51.242 [SPEAKER_06]: And I'm up to get a amount, thirty, forty percent.

38:51.342 --> 38:53.643 [SPEAKER_06]: And kind of thing all day, I do have other

38:54.552 --> 38:56.694 [SPEAKER_06]: materials, and just use stocks.

38:56.994 --> 39:00.237 [SPEAKER_06]: So it's wondering if you think not the time to take my profits and put it elsewhere.

39:00.257 --> 39:01.398 [SPEAKER_06]: Thank you very much for your time.

39:01.418 --> 39:01.598 [SPEAKER_06]: Bye.

39:03.077 --> 39:29.165 [SPEAKER_05]: Looking at steel dynamics and the good thing here is you're in one of the the better steel companies from a profitability standpoint tends to be one of the best one of the most profitable and consistent and it's in a long term uptrend earnings are expected to accelerate thirty two percent next year to twelve dollars and fifty five cents and it's a hundred thirty three dollars stock so I I honestly have no issue with this I would probably continue to hold it

39:31.446 --> 39:33.468 [SPEAKER_05]: It has a solid balance sheets.

39:34.269 --> 39:41.716 [SPEAKER_05]: It's the biggest issue is it's free cash flow did turn negative recently, but like I said, earnings are expected to accelerate next year.

39:41.816 --> 39:48.082 [SPEAKER_05]: So most likely that profitability will improve for that cash flow will improve next year as well.

39:48.643 --> 39:50.304 [SPEAKER_05]: They do continue to buy back shares.

39:50.724 --> 39:55.329 [SPEAKER_05]: So you have to like that nice dividend probably not going to go up much, but

39:56.230 --> 39:58.793 [SPEAKER_05]: No reason to really sell it at this point.

39:58.853 --> 40:01.075 [SPEAKER_05]: So I would hold steel dynamics.

40:01.756 --> 40:02.977 [SPEAKER_05]: Thanks for the call.

40:03.918 --> 40:12.668 [SPEAKER_05]: Now lastly, let's touch on a survey from UBS and they surveyed forty different central banks.

40:14.012 --> 40:19.334 [SPEAKER_05]: And they asked them a series of questions and the responses were quite interesting.

40:19.834 --> 40:28.318 [SPEAKER_05]: Two thirds of reserve managers fear that the Federal Reserve's independence is at risk and merely half think the rule of law in the U.S.

40:28.898 --> 40:32.999 [SPEAKER_05]: may deteriorate enough to influence their asset allocation.

40:36.517 --> 40:46.025 [SPEAKER_05]: Thirty, thirty-five percent already think that the US might ask allies to convert longer data debt to other instruments such as ultra long as you're a coupon bonds.

40:46.105 --> 40:53.932 [SPEAKER_05]: So that pressure will certainly impact the treasury market in about a third of central banks are worried about that.

40:53.972 --> 40:59.677 [SPEAKER_05]: And so that impacts their willingness to buy treasuries and you're seeing that show up.

41:00.658 --> 41:00.818 [SPEAKER_05]: Now,

41:02.936 --> 41:07.838 [SPEAKER_05]: Liberation Day really is what changed these reserved managers minds.

41:07.898 --> 41:10.859 [SPEAKER_05]: But twenty-nine percent were looking to cut exposure to U.S.

41:11.420 --> 41:13.881 [SPEAKER_05]: assets in response to Liberation Day.

41:14.581 --> 41:20.944 [SPEAKER_05]: And over the next few years, twenty-five percent of the central banks they expected to cut their exposure to the dollar.

41:21.704 --> 41:21.984 [SPEAKER_05]: A quarter.

41:24.496 --> 41:25.156 [SPEAKER_05]: Now, that's cut.

41:25.316 --> 41:30.819 [SPEAKER_05]: Doesn't mean that they are going to, you know, some of them might just stop by, right?

41:30.839 --> 41:32.840 [SPEAKER_05]: Maybe not sell assets, but stop buying.

41:32.860 --> 41:35.861 [SPEAKER_05]: That's what China's done for a long time.

41:36.361 --> 41:41.083 [SPEAKER_05]: Just let trustees roll off and, you know, not allocate more money that way.

41:44.124 --> 41:50.287 [SPEAKER_05]: Now, eighty percent of respondents expect the dollar, however, to remain the reserve currency.

41:53.180 --> 41:59.404 [SPEAKER_05]: And in coming years, they expect gold to be the top winner of non-currency assets.

42:02.406 --> 42:05.648 [SPEAKER_05]: Thirty-nine percent respondents were playing to increase their share of gold reserves.

42:06.048 --> 42:14.694 [SPEAKER_05]: They hold domestically, meaning hard, hard, not just owning a paper gold is you own GLD, for example.

42:15.654 --> 42:16.695 [SPEAKER_05]: Are you own a gold mine?

42:17.756 --> 42:22.559 [SPEAKER_05]: No, they want to own the gold in their country, hold it in their country.

42:24.180 --> 42:25.800 [SPEAKER_05]: And mainly, this is emerging markets.

42:27.201 --> 42:32.542 [SPEAKER_05]: They're worried about sanction risk, just like the sanction risk are on Russia.

42:33.083 --> 42:33.943 [SPEAKER_05]: That could be expanded.

42:34.243 --> 42:37.384 [SPEAKER_05]: And likely will be in the case of geopolitical escalation.

42:39.064 --> 42:44.586 [SPEAKER_05]: Over the next five years, Missouri managers believe that the euro will benefit the most from these global shifts.

42:45.406 --> 42:45.906 [SPEAKER_05]: That's interesting.

42:46.847 --> 42:50.208 [SPEAKER_05]: Followed by the Red Mimbe as well as crypto assets.

42:50.308 --> 42:51.228 [SPEAKER_05]: That's interesting as well.

42:52.513 --> 42:53.374 [SPEAKER_05]: And this is just a survey.

42:53.394 --> 42:55.395 [SPEAKER_05]: This is UBS going on and asking these.

42:55.415 --> 42:58.376 [SPEAKER_05]: This is not my opinion, not even UBS's opinion.

42:58.396 --> 43:00.398 [SPEAKER_05]: This is just a survey that they put up.

43:02.279 --> 43:11.044 [SPEAKER_05]: The dollar dropped from first place last year in attractive currencies to ninth place.

43:11.064 --> 43:12.625 [SPEAKER_05]: It's pretty well.

43:14.180 --> 43:19.102 [SPEAKER_05]: And over the next year, only a net six percent of respondents planned to add the euro.

43:19.122 --> 43:24.864 [SPEAKER_05]: So even though they think that the euro is going to benefit, it's not like they're a lot or buying an inventory away.

43:25.524 --> 43:32.607 [SPEAKER_05]: The top, the one that took the top spot was the Renminbi, twenty-five percent, followed by the Canadian dollar, the pound, and yen.

43:35.048 --> 43:36.248 [SPEAKER_05]: The respondents were looking at.

43:36.969 --> 43:40.550 [SPEAKER_05]: So very interesting report there, and I wanted to bring that to you.

43:41.788 --> 43:42.489 [SPEAKER_05]: Well, I'm Justin Klein.

43:42.509 --> 43:43.830 [SPEAKER_05]: This is another Invest Talk program.

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44:04.064 --> 44:04.665 [SPEAKER_05]: We thank you for listening.

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44:15.427 --> 44:16.068 [SPEAKER_05]: Independent thinking.

44:16.789 --> 44:17.389 [SPEAKER_05]: Sure, it's success.

44:17.950 --> 44:18.550 [SPEAKER_05]: It's the best stock.

44:18.730 --> 44:20.672 [SPEAKER_05]: Enjoy your fourth of July holiday weekend.

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