[SPEAKER_03]: At a time, when investors are confronted with market volatility and a variety of challenges fueled by the uncertainty of inflation, unsettled geopolitical tensions and economic pressures, Justin Klein stands ready to take your finance and investment questions and share his unbiased answers.

[SPEAKER_03]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

[SPEAKER_03]: The clarity for your path forward starts now.

[SPEAKER_03]: Here is KPP Financial Chief Executive Officer, Financial Advisor Justin Klein.

[SPEAKER_05]: Good afternoon fellow investors.

[SPEAKER_05]: Welcome back to Invest Talk.

[SPEAKER_05]: This is our Tuesday July, eight, twenty twenty five edition of the best talk.

[SPEAKER_05]: Appreciate you all tuning in for this hour.

[SPEAKER_05]: It is going to be an interesting one just like these markets and we're going to bring a lot of fun topics to the table.

[SPEAKER_05]: That is what our goal here each every day is is to not only

[SPEAKER_05]: answer your financial investment questions, but to also bring topics that you can then help give you perspective, help give you data so that you can take it back to your own personal situation and make better decisions.

[SPEAKER_05]: There's a lot of headlines, there's a lot of, let you can focus on.

[SPEAKER_05]: You know, from social media to major headlines, a lot of clickbait, et cetera.

[SPEAKER_05]: And that's not what the show is about.

[SPEAKER_05]: I'm not here to bang bells and whistles on that creamer.

[SPEAKER_05]: I'm here to bring you relevant data and topics so that you can make better decisions with your money.

[SPEAKER_05]: Now, in just a bit, we are going to look at the mark performance for the day and run down the show topics that we will hit on for the hour.

[SPEAKER_05]: But first, let's tackle this color question now.

[SPEAKER_00]: had a question about Picker Symbol WMS advanced drainage systems.

[SPEAKER_00]: We spec out this product a lot where I work and just kind of want to know what your thoughts on the company were, what would be a good entry point for them and just the sector that it's in, kind of what that sector looks like.

[SPEAKER_00]: Moving forward, appreciate what you guys do.

[SPEAKER_05]: All right, looking at WMS, this is advanced drainage systems and then manufacture water management solutions in the storm water and on-site septic wastewater industries.

[SPEAKER_05]: Okay, so this is a nine point four billion dollar market cap company.

[SPEAKER_05]: So coming to the mid cap space earnings this year just be down four percent.

[SPEAKER_05]: to let's see, five dollars and sixty two cents.

[SPEAKER_05]: Next year back up, twelve percent to six dollars and twenty nine cents, though it's still be down from twenty twenty four's peak, which would be six dollars and thirty eight cents.

[SPEAKER_05]: Okay, so it's certainly a slow growth name, but it's trading at a multiple that is closer to the market about twenty times for looking earnings.

[SPEAKER_05]: I don't love to see that.

[SPEAKER_05]: I don't love to see a slow growth business trading at market multiples.

[SPEAKER_05]: Usually doesn't seem right.

[SPEAKER_05]: Now, the balance sheet is good only about five hundred million dollars in debt on a nine point two billion dollar market cap.

[SPEAKER_05]: That's equity ratio is only points point seven eight.

[SPEAKER_05]: Not too bad.

[SPEAKER_05]: No real issue there.

[SPEAKER_05]: Free cash flow, three hundred and sixty eight million.

[SPEAKER_05]: solid but it is coming down from a previous high of about five hundred seventy one million so

[SPEAKER_05]: It's about where it was, it's still above, where it was pre-COVID.

[SPEAKER_05]: It's where it's at kind of in the, in the, in the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the, end of the

[SPEAKER_05]: It's come down from the side around forty five, but still even pre-COVID.

[SPEAKER_05]: It's returning equity.

[SPEAKER_05]: It was around twenty percent peaked out now it's at thirty.

[SPEAKER_05]: So, you know, is it over earning a little bit potentially?

[SPEAKER_05]: Overall, I kind of like it.

[SPEAKER_05]: I just like businesses that have good balance sheets, that have good profitability, that have good consistent cash flow, et cetera.

[SPEAKER_05]: Now the earnings trends are not amazing, but the chart has been improving lately, and it's trading at a little bit higher valuation than I would like, let me pull this enterprise value to EBITDA,

[SPEAKER_05]: Currently at about eleven times historically our five-year average is fourteen so it's trading below that and therefore I'm going to give this one a thumbs up it's trading in the low end of its of its enterprise value either range which to me is a better multiple than pe and

[SPEAKER_05]: I like clean balance sheets, I like good businesses.

[SPEAKER_05]: And so I clearly use it regularly, and probably like the products, and that shows in the quality of the business.

[SPEAKER_05]: Let's talk about what is planned for the day.

[SPEAKER_05]: We have our main focus point.

[SPEAKER_05]: And that is on the big, beautiful bill.

[SPEAKER_05]: And the question is, does it really eliminate taxes on social security?

[SPEAKER_05]: Well, for some small segment of the population that collects social security, it may be, it may do that.

[SPEAKER_05]: There's some carve outs here, some, yeah, carve outs for seniors, and we'll dig into that what type of tax relief it is, and how long it will last for.

[SPEAKER_05]: So we'll dig into that story.

[SPEAKER_05]: Also, industrial companies, US industrial groups are pivoting towards data centers.

[SPEAKER_05]: catering to the needs of these large data centers that are popping up throughout the country, that are requiring tremendous amounts of power, and we'll talk about what companies are truly benefiting the most from this trend.

[SPEAKER_05]: And then, tariffs, the market is not really believing.

[SPEAKER_05]: President Trump on tariffs.

[SPEAKER_05]: So we'll dig into that story as well because that's probably going to color color the headlines for the next two, three months or so before there's hopefully a little clarity, maybe there still isn't.

[SPEAKER_05]: Who knows, but we'll dig into that story a little bit more.

[SPEAKER_05]: And then we have some questions, color questions, voice bank questions, one is on P.P.

[SPEAKER_05]: T.S.

[SPEAKER_05]: Perpetua Resources, and then ENVX, and then we have some questions that came in via the comments section over on the Invest Talk YouTube channel as well.

[SPEAKER_05]: And of course, I welcome your finance and investment questions right now.

[SPEAKER_05]: We're heading into a short break and on the other side are looking today's market activity and tackle more of your questions here on Invest Talk.

[SPEAKER_04]: Sirious investors are certain to have finance and investment questions.

[SPEAKER_04]: Wanted to get your take on WW Granger?

[SPEAKER_04]: And the best person to ask your question in the right way is you.

[SPEAKER_05]: I was wondering from your standpoint at their downside in buying fractional shares versus whole shares.

[SPEAKER_04]: And twenty four seven rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

[SPEAKER_05]: The issue, though, is really over the last decade or so.

[SPEAKER_05]: It's never maintained this level of profitability for a longer time.

[SPEAKER_05]: The modities are incredibly volatile, so when the going is good, take some profit.

[SPEAKER_04]: Your participation makes an investor better.

[SPEAKER_04]: My name is Mike I'm calling in from Orange County, California.

[SPEAKER_04]: This is Lewis calling from Bolivia.

[SPEAKER_04]: Let's go talk to Chris and me.

[SPEAKER_04]: So don't forget to call, investor talk.

[SPEAKER_04]: First off, great show.

[SPEAKER_04]: I went a lot for you, too.

[SPEAKER_04]: Hey, date eight, ninety nine chart.

[SPEAKER_04]: That's right, you'll find great merch for the Savvy Investor.

[SPEAKER_04]: It's all there for you now at Investalkstore.com.

[SPEAKER_04]: And now Justin Klein is here and taking your finance and investment questions live.

[SPEAKER_04]: Call Investalk.

[SPEAKER_05]: Let's go take a look at the market today.

[SPEAKER_05]: It was a, not a flat day.

[SPEAKER_05]: You had the Nasdaq up six points, three tens of one percent.

[SPEAKER_05]: Sorry, three basis points, three hundreds of one percent.

[SPEAKER_05]: As if you owe a hundred was down four points, down seven basis points, seven one hundred, one percent.

[SPEAKER_05]: And then the Dow was down about three quarters of one percent, a hundred and sixty five points.

[SPEAKER_05]: Interesting enough, small caps did much, much better today, mainly small cap value because oil names were higher.

[SPEAKER_05]: If you take a look at the heat map for the day, you can see that Google's down about one and a half percent Amazon down nearly two, Walmart down over two percent today, so the consumer name certainly struggled.

[SPEAKER_05]: You also had some of the non-derables, Proctor and Gamble down one and a half percent.

[SPEAKER_05]: Okay, you also had some of the

[SPEAKER_05]: Banks, down over three percent, JP Morgan, down over three, Bank of America, down over three, American Express, down nearly two, same with Goldman Sachs, Oregon, same with Morgan Stanley.

[SPEAKER_05]: So certainly weakness out of that space overall, you had an interview with President Trump that was really focusing on the tariffs and he implemented a fifty percent tariff on copper, a two hundred percent tariff on pharmaceuticals and said semiconductor tariffs are still to come.

[SPEAKER_05]: And vaccinations will be hit with a ten percent tariff as well.

[SPEAKER_05]: So once again, we're heading into a time where tariffs are likely to become more part of the headlines.

[SPEAKER_05]: Once again, the big question is will President Trump follow through on this.

[SPEAKER_05]: or not, you know, he's the taco trade is on strong in my mind.

[SPEAKER_05]: And the big question is will he live up to the taco trade or will he really fall through kind of with the like the Iran situation or, you know, somewhere in between.

[SPEAKER_05]: They push the deadline for tomorrow's trade deals to really August first plundum, you know, that standard two weeks that he always talks about the over two weeks.

[SPEAKER_05]: But he's saying now they'll be very stern on that.

[SPEAKER_05]: And the big question is, will he, what is the market really believing?

[SPEAKER_05]: And I don't think the market really believes him at the current time.

[SPEAKER_05]: He's saying some countries in the coming days will see rates going up to seventy percent.

[SPEAKER_05]: It's not quite as crazy as the one, you know, over a hundred percent tariffs that you saw on China and China and the initial trade war launch after liberation day, but still very extensive much higher than we're sitting today.

[SPEAKER_05]: So there's a lot of risk on that front.

[SPEAKER_05]: And you did see treasuries.

[SPEAKER_05]: They were a bit higher in yield on the day.

[SPEAKER_05]: Gold finished down about point eight percent.

[SPEAKER_05]: Bitcoin was up about point seven percent and WTI crude was that was also a point six percent excuse me up point six percent on the day the dollar index was roughly flat so that was the market today like I said you saw under performers the banks ensures you had brochures that were underperforming reads under performed

[SPEAKER_05]: Big Tech was mixed, you had small caps outperform, like I said, energy, chemicals, industrial metals, airlines, machinery, those were the leaders on the day.

[SPEAKER_05]: And so kind of a flat day after yesterday's cell-off and big questions will we get true falter.

[SPEAKER_05]: Today was more of a pause day.

[SPEAKER_05]: and we'll learn more tomorrow and then we have more fall-through labor data coming up on Thursday.

[SPEAKER_05]: So that was the market for today.

[SPEAKER_05]: Really not a whole lot of news, not a lot of economic news, really more are on a trade front and really ranching ratcheting.

[SPEAKER_05]: Excuse me, the rhetoric up across the board on that front.

[SPEAKER_05]: Now, every day we receive questions from the comments section of the invest talk YouTube channel and here's one that came in earlier.

[SPEAKER_05]: Roy says, what do you guys think?

[SPEAKER_05]: I'm wondering if you guys have a good play for agricultural commodities, would be Citrus Grower, L M N R L M N R

[SPEAKER_05]: Now, what he's talking about is we have a quarterly market analysis report that, if you want to copy of it, let me know, send us an email, and it's overweight underweight certain sectors, certain asset classes, et cetera.

[SPEAKER_05]: And right now, like most commodities, overweight.

[SPEAKER_05]: But you have to be very selective.

[SPEAKER_05]: And for this one, this is a out of here in California.

[SPEAKER_05]: They produce lemons, avocados, oranges,

[SPEAKER_05]: across California.

[SPEAKER_05]: Now, the issue is that with like, most cost commodity producers, there's just not really an economic advantage.

[SPEAKER_05]: They typically are what we call price takers.

[SPEAKER_05]: So they take what they can get for their products, especially products that spoil oil gas.

[SPEAKER_05]: You can kind of store them and wait for a better time to sell them.

[SPEAKER_05]: You can't do that with lemons and avocados and oranges for the most part, right?

[SPEAKER_05]: You have to

[SPEAKER_05]: You can pick kind of a tight window when you want to harvest it, but you can't wait too long to otherwise your product spoils.

[SPEAKER_05]: And so that tends to be a bad place to be from a profitability standpoint.

[SPEAKER_05]: And that's the same here with L M N R. Okay, so what I'm talking about agnames, I'm talking about more of the companies that that's

[SPEAKER_05]: sell to an LMR, right?

[SPEAKER_05]: Sell the end products, the picks and shovels shall we say for the space.

[SPEAKER_05]: So those are the type of businesses that I rather own.

[SPEAKER_05]: There's a reason this has fallen from a high in November around twenty eight dollars, twenty nine dollars per share, and now that under fifteen dollars does down nearly fifty percent over the past seven, eight months or so.

[SPEAKER_05]: Don't like that.

[SPEAKER_05]: Negative return to equity.

[SPEAKER_05]: A lot of debt, this is not the name that I would own.

[SPEAKER_05]: It would actually probably, I would lean on the short side considering, lose money, they have a lot of debt, their price taker, etc.

[SPEAKER_05]: You don't want it own.

[SPEAKER_05]: Well, thanks for the call.

[SPEAKER_05]: Now we're heading into a short break, but on the other side, I will answer more of your questions here on the best not.

[SPEAKER_04]: You've got finance and investment questions, and Justin Klein is ready to provide his unbiased answers.

[SPEAKER_04]: Call now or any time, eight, eight, eight, ninety-nine chart.

[SPEAKER_05]: Now my main focus point today on the best talk is about the big beautiful bill, and

[SPEAKER_05]: It's a question for seniors or the answer for seniors is does this eliminate taxes on social security?

[SPEAKER_05]: That's what was promised on the campaign trail.

[SPEAKER_05]: And that's what is still being said by the current administration and they're touting that it eliminates federal income taxes on social security benefits for most beneficiaries.

[SPEAKER_05]: And the question is, does it really deliver on that comment?

[SPEAKER_05]: Well, it's true that the bill does offer some fresh tax relief for those collecting social security.

[SPEAKER_05]: It's misleading to say that the measures away with tax and social security benefits altogether for the vast majority of people.

[SPEAKER_05]: Does create a new tax deduction for beneficiaries though?

[SPEAKER_05]: That's really what this is about.

[SPEAKER_05]: And it's not permanent.

[SPEAKER_05]: It's very, very temporary.

[SPEAKER_05]: Now the good news is that it's not just about deductions, it's also a security.

[SPEAKER_05]: So even if you don't earn that much from Social Security, it does apply to all income.

[SPEAKER_05]: I'll see yours income.

[SPEAKER_05]: Okay.

[SPEAKER_05]: Now that what the bill does provide is a temporary tax deduction of up to six thousand dollars for seniors aged sixty five and older, sixty five and older.

[SPEAKER_05]: But you have to have an adjuster gross income below seventy five thousand dollars if you're an individual or a hundred and fifty thousand dollars if you're a couple filing jointly.

[SPEAKER_05]: And this is set to expire at the end of twenty twenty eight.

[SPEAKER_05]: So a normal couple in there that are both over sixty five.

[SPEAKER_05]: We'll get an additional twelve thousand dollars in their standard deduction.

[SPEAKER_05]: Okay, so if you itemize, it doesn't matter.

[SPEAKER_05]: Okay, it's a standard deduction.

[SPEAKER_05]: And if you make over those amounts, seventy five thousand individual, hundred fifty thousand dollars for couples, it phases out above those income amounts, whether you get income comes to a security or not, it doesn't matter what that income is.

[SPEAKER_05]: Now, certain seniors already who have low social security income, low income overall, the standard deduction covers their income already.

[SPEAKER_05]: So they don't pay any taxes already.

[SPEAKER_05]: Because for those people, it doesn't help them.

[SPEAKER_05]: Because they're not paying any taxes.

[SPEAKER_05]: No, the extra six thousand dollars doesn't help them at all.

[SPEAKER_05]: Because the standard deduction covers them.

[SPEAKER_05]: So for the very low income earners, it doesn't do anything for for those that make like I said, seventy five thousand or above for an individual hundred fifty thousand four couples.

[SPEAKER_05]: It doesn't really help you much either.

[SPEAKER_05]: It's those that are kind of in the middle where

[SPEAKER_05]: You know, maybe you're married, you make a, excuse me, security and maybe other income, RMDs, things like that, you might come in at ninety five thousand or hundred and five thousand or something like that, hundred and thirty thousand.

[SPEAKER_05]: Those are the couples that will benefit from this overall.

[SPEAKER_05]: Now it's fully phased out for individuals making a hundred and seventy five thousand and couples making two hundred fifty thousand.

[SPEAKER_05]: So it's basically a hundred thousand extra hundred thousand.

[SPEAKER_05]: It will help you to agree, but it is once again phased out.

[SPEAKER_05]: So yeah, that's kind of how that works on that front.

[SPEAKER_05]: Now the downside to this is that it's going to hurt the longevity of the Social Security trust fund because of lower payments in the Social Security.

[SPEAKER_05]: And at the end of the day, there needs to be some changes of social security system to make it sustainable, but eighty-five percent of Americans think that benefits should not be reduced or that actually should be increased.

[SPEAKER_05]: He means raising taxes on some or all of Americans.

[SPEAKER_05]: And the reality is, that's true.

[SPEAKER_05]: That's likely what is going to happen.

[SPEAKER_05]: Nobody likes to

[SPEAKER_05]: cut money off to the elderly, and eventually put them into a precarious economic situation.

[SPEAKER_05]: And so, and those the accord is the one that tends to devote.

[SPEAKER_05]: And so, that's not likely to change, but this tax deduction or additional standard deduction, addition to the standard deduction, is helpful for some.

[SPEAKER_05]: But it will be phased out.

[SPEAKER_05]: It'll be gone at the end of the end of the current administration's term.

[SPEAKER_05]: And the big question is will it be extended or not?

[SPEAKER_05]: And we know that usually temporary cuts to taxes, as you've seen recently, that is those tend to be extended.

[SPEAKER_05]: But obviously we'll see where we are.

[SPEAKER_05]: In a few years, a lot will depend on how the fiscal situation shapes up over the next few years.

[SPEAKER_05]: Now we're going to head to a quick break, Bill from the Bay Area, your next here on the best thought.

[SPEAKER_04]: The more you learn about how the market works, the better your chances for success.

[SPEAKER_04]: So don't forget to call, in Vestark, eight, eight, eight, ninety-nine chart.

[SPEAKER_05]: Does it talk to Bill from the Bay Area?

[SPEAKER_05]: You want to talk about direct index, correct?

[SPEAKER_01]: Correct.

[SPEAKER_05]: Okay, what's your question?

[SPEAKER_01]: Question is,

[SPEAKER_01]: Well, first of all, my wife and I are in our sixties, and we've been investing our money for a long time, where we self-manage.

[SPEAKER_01]: And recently, got together with a certified financial planner who went over our scenario and analyzed our holdings and tax situation and all that.

[SPEAKER_01]: And he recommended that we might consider doing the direct indexing

[SPEAKER_01]: And I wanted to get your take on how it works, how successful you think it is, and who it's best suited for, would type of investor.

[SPEAKER_05]: Well, we do direct an mixing for our clients, so we know this fairly well, and it is best suited for a taxable accounts, okay?

[SPEAKER_05]: Be somebody who wants to limit tax liabilities or even potentially take tax losses to offset gains elsewhere.

[SPEAKER_05]: Also somebody who might want to customize their holdings where you might want to hold a particular exposure to certain sectors, certain industries, etc.

[SPEAKER_05]: So that, you know, from a...

[SPEAKER_05]: kind of values perspective, maybe don't own cigarette stocks or alcohol stocks or whatever.

[SPEAKER_05]: That's always helpful as well.

[SPEAKER_05]: It also, if you are trying to maybe lean off particular over concentration in one of one company.

[SPEAKER_05]: that you can do that kind of systematically and slowly over time.

[SPEAKER_05]: And how it works on R&D is we can develop, it can be custom.

[SPEAKER_05]: It can be whatever you want, but we have some basic setups.

[SPEAKER_05]: My favorite right now is our global custom index where we're looking at exposure to foreign markets and domestic markets.

[SPEAKER_05]: And what it is is you take a sampling of the index.

[SPEAKER_05]: So you might not buy every name in the index.

[SPEAKER_05]: For example, there's the Russell three thousand, that's one that we follow.

[SPEAKER_05]: So it's three thousand names.

[SPEAKER_05]: But we might own two hundred fifty names within those three thousand and those two hundred fifty names have similar weightings to different sectors as the overall index.

[SPEAKER_05]: But you might own only three four five names in each sector versus thirty or forty names.

[SPEAKER_05]: Now the reason that's helpful is because, you know,

[SPEAKER_05]: The whole thing is a rising tide of salt boats and vice versa.

[SPEAKER_05]: And that depends on the sector, right?

[SPEAKER_05]: But sector performance is eighty, ninety percent of the performance of any individual name, right?

[SPEAKER_05]: So if the industrial sector is strong, all the industrial stocks are generally going to be strong with small idiosyncrasies from there.

[SPEAKER_05]: When you are direct indexing, you're able to get a sampling and get the names that have the most correlation with those sectors and those weightings, etc.

[SPEAKER_05]: And then, for example, if you have, and maybe this is you, do you have any high concentrations in particular names where you have large capital gains, for example?

[SPEAKER_01]: Yeah.

[SPEAKER_05]: Okay.

[SPEAKER_05]: So you can slowly, so you can say, okay, I don't want to buy an index because I'm going to also get more of that name.

[SPEAKER_05]: What I can do is do a direct indexing, I can own a particular, I can say, okay, I keep that slice of whatever company that is and not take a lot of gains down.

[SPEAKER_05]: Maybe take a little bit.

[SPEAKER_05]: We can set a particular parameters on capital gains, hey, I only want to take five thousand dollars for this year, or maybe I want to harvest losses, et cetera.

[SPEAKER_05]: And that can limit the amount that is sold from those particular names each year and slowly diversify the name.

[SPEAKER_05]: So you might have, say, thirteen percent of your portfolio in one company, but the sector itself has maybe eighteen percent of the index.

[SPEAKER_05]: I'm just using random numbers here.

[SPEAKER_05]: And so it's saying, okay, maybe it's in tech.

[SPEAKER_05]: A lot of people have that, right?

[SPEAKER_05]: Maybe thirteen percent in tech.

[SPEAKER_05]: It's that one position.

[SPEAKER_05]: Let's trim that down to twelve and then take a sampling of some other names with in tech and get that up to your total weighting of the sector of eighteen percent.

[SPEAKER_05]: And then the next year I trim that back down to eleven and add some more names, great diversity.

[SPEAKER_05]: And so it slowly over time can limit your

[SPEAKER_05]: your exposure to capital gains but still diversify you out of certain names we might be overexposed to.

[SPEAKER_05]: Does that make sense?

[SPEAKER_01]: It does and you know as I get older some of the schemes like this I understand it I think but I'm in a situation where I want to simplify my life I don't want to

[SPEAKER_01]: over, you know, I mean, it sounds a little bit complicated and I'm also.

[SPEAKER_05]: Well, that's about the thing is you're not doing it, right?

[SPEAKER_05]: Well, you're not there.

[SPEAKER_05]: For us, it's a one percent annual fee charge quarterly.

[SPEAKER_05]: So that's very simple.

[SPEAKER_05]: And it's we do it, right?

[SPEAKER_05]: So we do it with our systems and that's something that you have to do.

[SPEAKER_05]: It's just a matter of

[SPEAKER_05]: setting up the parameters, what index do you want to follow, what's have a capital gains, do you want to make sure you limit your limit to taking each year, et cetera.

[SPEAKER_05]: And once that's done, you don't do anything else.

[SPEAKER_05]: There's no conflict.

[SPEAKER_05]: The system does everything, you know, our backend software does everything for us.

[SPEAKER_05]: So it's just the amount of setting up the parameters, you know, are there companies you don't want to own, are there particular sub sectors that you don't want to own, maybe you do, maybe you don't, et cetera.

[SPEAKER_05]: So once you make those decisions,

[SPEAKER_05]: It's not complicated at all.

[SPEAKER_05]: You don't have to do anything.

[SPEAKER_01]: Okay.

[SPEAKER_01]: Well, I would appreciate your input.

[SPEAKER_05]: Well, if you and if you ever want to have a conversation about that, I can kind of show you.

[SPEAKER_05]: Obviously, this is just on air.

[SPEAKER_05]: No visuals.

[SPEAKER_05]: We have visuals.

[SPEAKER_05]: I know website too.

[SPEAKER_05]: If you want to go to website, there is the custom indexing section over the under-investment programs called, we call it direct indexing.

[SPEAKER_05]: So if you want to check that out, you can head over there.

[SPEAKER_05]: And if you want to schedule calls me, just click on the portfolio view button.

[SPEAKER_05]: Thanks for the call, Bill.

[SPEAKER_01]: Great thanks.

[SPEAKER_05]: Let's go talk to Duncan in New York looking at MTPL.

[SPEAKER_05]: Tell me more.

[SPEAKER_05]: Duncan either.

[SPEAKER_02]: Yep, look at that meta planet.

[SPEAKER_02]: I know it is an over-the-counter stock.

[SPEAKER_02]: The reason why I'm just like calling on this was for two things.

[SPEAKER_02]: If you could tell me and let my solicitors about like over-the-counter stocks.

[SPEAKER_02]: And too, I feel like this is trying to follow the micro strategy.

[SPEAKER_02]: They're just trying to

[SPEAKER_02]: by a lot of big points and be like a holder of it.

[SPEAKER_02]: And I know this is like a company in Japan, but I'm just I'm looking to trade this actually rather than really like buy and hold.

[SPEAKER_02]: So just wanted to know your two cents.

[SPEAKER_02]: Thank you.

[SPEAKER_05]: Yeah, I mean, there are a lot of names that are trying to copy microstrategy frankly.

[SPEAKER_05]: It's just a levered bet on Bitcoin.

[SPEAKER_05]: If that's the way you want to play it, then that's all you're doing.

[SPEAKER_05]: It's just very Bitcoin is obviously very high risk itself.

[SPEAKER_05]: You've seen that over the past decade plus that goes through big

[SPEAKER_05]: booms to one two hundred three hundred four hundred five hundred percent you know rallies and then falls seventy eighty uh... believe it's even had a ninety percent drop over the past decade at some point so uh... that if you go that's the biggest issue with these names is that in a bull market there's no problem but when you have a levered position in an asset class that is prone to seventy eighty percent drops when those drops come along they will be wiped out

[SPEAKER_05]: They will be liquidated and you will be worth nothing.

[SPEAKER_05]: So the question is, is Bitcoin going to continue to go up?

[SPEAKER_05]: Right now, it's been just kind of hanging around this hundred thousand mark.

[SPEAKER_05]: We know it's very tied to liquidity in the marketplace.

[SPEAKER_05]: liquidity is relatively abundant now, but I've been saying as we enter the back half of this year, which now we're there, and you can deeper into the year, liquidity is going to slowly be allocated less towards equities, less towards Bitcoin, and what global balance sheets will be allocated towards is actually refinancing debt.

[SPEAKER_05]: Now, that's mainly in the corporate side.

[SPEAKER_05]: About eight or fifty billion dollars this year, one trillion dollars in refinancing next year.

[SPEAKER_05]: These are just simple debt maturitys.

[SPEAKER_05]: And then you have, obviously, treasury maturities that are going to have to be refinanced.

[SPEAKER_05]: Now they're going to continue to issue on the short end.

[SPEAKER_05]: That's a big question.

[SPEAKER_05]: Those are all dynamics that will shape liquidity over the next eighteen months or so.

[SPEAKER_05]: So as we get deeper into this year and especially into next year, liquidity dynamics are going to become more challenged.

[SPEAKER_05]: And that means upside to Bitcoin is going to get more challenge or crypto in general is going to get more challenged.

[SPEAKER_05]: So as a trade, I think in the short term, it's okay, because the technicals are fine on Bitcoin, but it's kind of long in the tooth, right?

[SPEAKER_05]: I think we're near in the seventh, seventh, eighth, maybe ninth inning of this Bitcoin rally.

[SPEAKER_05]: Doesn't mean it can't keep going up to a one, twenty, one, thirty, one, forty even.

[SPEAKER_05]: If we're in the seventh inning now, it probably one, thirty, one, forty in that range is probably the peak.

[SPEAKER_05]: But for a trade, then this would do very well, same with micro strategy.

[SPEAKER_05]: But as I said, it's all about that turn.

[SPEAKER_05]: And when that turn happens, and that's always difficult to tell.

[SPEAKER_05]: Now, this is an over-counting name.

[SPEAKER_05]: It should mean that it's more liquid.

[SPEAKER_05]: You can certainly go buy it.

[SPEAKER_05]: There's less regulation around reporting requirements, et cetera.

[SPEAKER_05]: But at the end of the day, this is just a bet on Bitcoin and a leverage bet on Bitcoin.

[SPEAKER_05]: If that's what you're looking for,

[SPEAKER_05]: I don't mind it because I have to look at it, but it probably is cheaper than micro strategy because micro strategy is trading and it reaches valuations compared to it's actual Bitcoin holdings.

[SPEAKER_05]: So I probably wouldn't go in that direction either.

[SPEAKER_05]: So if you're looking for a value levered way to play Bitcoin, I guess this would be a name for that.

[SPEAKER_02]: Awesome.

[SPEAKER_02]: Really appreciate it.

[SPEAKER_02]: Thank you for all that you did.

[SPEAKER_05]: No problem.

[SPEAKER_05]: Thanks for the call.

[SPEAKER_05]: Now let's touch a bit on, let me get to data centers and the industrial companies that are taking advantage of the current trends in that space.

[SPEAKER_05]: This is an area that is starting to become non-cyclical and the industrial space tends to be very cyclical.

[SPEAKER_05]: But a lot of these industrial names are chasing the flood of money headed towards AI data center development.

[SPEAKER_05]: I call it the picks and shovels.

[SPEAKER_05]: You know, there's the flashing names like in video, but they're the industrial names that are

[SPEAKER_05]: helping build and sell specialized products for what we call hyperscalers.

[SPEAKER_05]: The Amazon's, Alphabet's, Meta's and Microsoft's.

[SPEAKER_05]: They're the main drivers of the investments in AI capacity.

[SPEAKER_05]: Okay, and so these industrial companies are selling backup power generators, cooling pumps, et cetera, to make sure that these can run, twenty four seven three sixty five, and produce the requisite power that is needed to do so.

[SPEAKER_05]: Now, U.S.

[SPEAKER_05]: factory activity has declined over the past few months.

[SPEAKER_05]: I have some manufacturing purchasing manager index.

[SPEAKER_05]: That is been in contractionary territory since March.

[SPEAKER_05]: But spending on data centers continues to go up about four hundred billion dollars will be spent this year to build out the infrastructure during the current fiscal year and expect to grow next year as well.

[SPEAKER_05]: So that's why companies like Honeywell are starting to target these

[SPEAKER_05]: verticals and building out hybrid cooling systems, for example, to make sure that the full four applications around data centers and similar applications.

[SPEAKER_05]: And this will also produce servicing revenue as well.

[SPEAKER_05]: So it's not just about the current

[SPEAKER_05]: sale, what that adds to the top line today and bottom line today.

[SPEAKER_05]: But it's okay, what about servicing those end products and making sure that their their their their piece of the puzzle continues to run effectively and efficiently.

[SPEAKER_05]: uh... companies like generac they're selling they used to uh... they were they had a boom during the coven lock downs and everyone wanted these generators that's what generac does they sell generators well sales peaked out you know kind of that we got past the lock downs and everybody was in a little more calm you saw sales plummet well they're looking at selling larger generators to the for these applications and so uh... even if the economy continues to slow down

[SPEAKER_05]: This is isolated from economic downturns.

[SPEAKER_05]: And so you want to be looking at, like I said, the picks and shovel companies within this space.

[SPEAKER_05]: There's much better value there.

[SPEAKER_05]: There's much better balance sheets.

[SPEAKER_05]: And in a lot of ways, there are an equal amount of competitive advantages that a company like Nvidia has.

[SPEAKER_05]: And in less companies that are able to do what they do.

[SPEAKER_05]: You know, Nvidia has AMD, they have Intel.

[SPEAKER_05]: They have other companies that are nipping up their heels and trying to compete with them on that front.

[SPEAKER_05]: That's the nature of big tech.

[SPEAKER_05]: But when it comes to these industrial companies, it takes a lot of capital to replicate what they do.

[SPEAKER_05]: The history of the

[SPEAKER_05]: expertise that they've built up with cooling, especially, and power generation that is not as easy to replicate.

[SPEAKER_05]: Like I said, very capital intensive.

[SPEAKER_05]: There's a lot of institutional knowledge that they are taking

[SPEAKER_05]: from traditional industrial applications and applying it to these data centers, that is allowing them to not only improve the top line in sales, but really improve their overall margin profile, both short-term and long-term as well.

[SPEAKER_05]: So you're looking to take advantage of the AI space, make sure you focus just as much on the industrial applications of the data center buildouts as you do, the tech names that are inside these data centers as well.

[SPEAKER_05]: Well, this is Invest Talk, I'm Justin Klein.

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[SPEAKER_06]: My name is Nina I'm from Boston.

[SPEAKER_06]: I have a question about company called perpetua resources, ticket of P.P.C.A.

[SPEAKER_06]: It's a gold miner.

[SPEAKER_06]: I'm interested in adding that to my portfolio.

[SPEAKER_06]: Thank you so much.

[SPEAKER_05]: Looking at Perpetua resources, PPTA is a symbol at a Boise Idaho, about one point two billion dollar market cap.

[SPEAKER_05]: And they've gold and silver deposits, but this is what we call a junior miner.

[SPEAKER_05]: They do not have revenue.

[SPEAKER_05]: They produce losses.

[SPEAKER_05]: And this is a very levered way, similar to a Microsoft Azure, you'd be a levered bet on Bitcoin.

[SPEAKER_05]: This is kind of a levered bet on

[SPEAKER_05]: gold and silver, but also with the risk that their minds may not eventually produce.

[SPEAKER_05]: And next year, they're not supposed to earn money either.

[SPEAKER_05]: It's supposed to lose thirty-eight cents this year or sixteen cents next year.

[SPEAKER_05]: I don't really, you know, the trends are good because the trends in gold and silver are good.

[SPEAKER_05]: So this is the extreme risk way of betting on the upside of golden silver.

[SPEAKER_05]: This is a name that bottoms back around March of last year.

[SPEAKER_05]: Well, actually, ultimately, it was all the way back in December of twenty twenty two.

[SPEAKER_05]: And that was around two dollars per share now at twelve dollars in seventy seven cents.

[SPEAKER_05]: So you can see that type of rally that it can't have and if golden silver price did you go up, I think this will do.

[SPEAKER_05]: By, you know, this will be a target of acquisition from some some large names, et cetera, depending on how those developments go.

[SPEAKER_05]: But it's very, very high risk.

[SPEAKER_05]: It's not the way we play it.

[SPEAKER_05]: We either own companies that produce profits that have actual revenue.

[SPEAKER_05]: And that's a safer way to invest in gold.

[SPEAKER_05]: Still more aggressive and riskier than owning a GLT or the actual physical metal.

[SPEAKER_05]: But it's kind of the good in between.

[SPEAKER_05]: This is, like I said, on the extreme risk spectrum.

[SPEAKER_05]: So that's what you're looking for.

[SPEAKER_05]: I have no problem with it, but it's not the way that we play the gold and silver.

[SPEAKER_05]: Thanks for the call.

[SPEAKER_05]: They'll lastly, lastly, lastly, let's talk about tariffs and tomorrow is supposed to be the deadline.

[SPEAKER_05]: But to really no one's surprised, the deadline is no deadline.

[SPEAKER_05]: It has been pushed to August first, so ninety days has turned into a hundred and thirteen days.

[SPEAKER_05]: And the big question is will August first to really be the deadline as well.

[SPEAKER_05]: Now, as Scott Bessett once said, you should take Trump seriously, but not literally.

[SPEAKER_05]: So seriously, because Trump should decide to enforce the deadline, but not literally because he probably won't.

[SPEAKER_05]: This is the taco trade, okay?

[SPEAKER_05]: And today, President Trump announced deals with Japan in South Korea, which faced twenty-five percent tariffs as of the first of the month.

[SPEAKER_05]: But the market didn't really react very much.

[SPEAKER_05]: Mainly because the new tariff rate doesn't really increase the effective tax rate at all because there are carboats for things like electronics and pharmaceuticals and automobiles, which, for these companies, countries, excuse me, they're thirty-four percent of US imports from those countries each.

[SPEAKER_05]: So the actual effective rate on those countries simply will go from fifteen point five to sixteen point six, a very minor change.

[SPEAKER_05]: by the market and really react.

[SPEAKER_05]: But now we have a lot of other countries, dozens and dozens, that still need to be agreed upon.

[SPEAKER_05]: Now, there are other quote unquote deals, but none of them really deals at all.

[SPEAKER_05]: The China one was really more about exports of rare earths, more of a de-escalation.

[SPEAKER_05]: the White House is not released any details about the deal and China still withholding exports to US companies according to the Wall Street Journal.

[SPEAKER_05]: So a lot of this is fluff.

[SPEAKER_05]: And there's no beef.

[SPEAKER_05]: Where's the beef?

[SPEAKER_05]: There's no beef here.

[SPEAKER_05]: Okay.

[SPEAKER_05]: These deals are frameworks at best.

[SPEAKER_05]: And ultimately,

[SPEAKER_05]: The question is, will he follow through?

[SPEAKER_05]: And I actually feel there's the Trump put, or the output, or the Fed put, whatever you want to call.

[SPEAKER_05]: That's if the market goes down a lot, go back up.

[SPEAKER_05]: But the market's rallying a lot.

[SPEAKER_05]: And to me, there's also the Trump call.

[SPEAKER_05]: He has now room to actually not be a taco.

[SPEAKER_05]: to actually follow through and be tougher on these trade agreements.

[SPEAKER_05]: And I think that's what the market is underestimating as you head into July and through the summer.

[SPEAKER_05]: Well, that about does it.

[SPEAKER_05]: I'm Justin Klein.

[SPEAKER_05]: It's another invest talk program.

[SPEAKER_05]: And if today's show made you think about your portfolio, your financial path, your financial plan.

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[SPEAKER_05]: Kind of go over your situation and figure out whether

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