[SPEAKER_01]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk.

[SPEAKER_01]: Independent Thinking, shared success.

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

[SPEAKER_01]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

[SPEAKER_00]: Good afternoon fellow investors.

[SPEAKER_00]: Welcome back to Invest Talk dessert Wednesday, July ninth, twenty twenty five edition of Best Talk End.

[SPEAKER_00]: The first half of this year is behind us.

[SPEAKER_00]: We are through the July fourth holiday.

[SPEAKER_00]: I hope everyone had a wonderful time last weekend and we are into almost earnings with earnings season coming up and that's going to be a very interesting time especially in today's world with the economy slowing labor market slowly breaking with tariffs creating supply chain issues.

[SPEAKER_00]: but also fiscal spending that remains relatively robust.

[SPEAKER_00]: So there's a lot to unpack in today's market, not just for the short term, but we're focused more on the medium and the long term as well.

[SPEAKER_00]: That's what the show is about giving you data and perspective that you can take back to your own situation and make good consistent decisions with your money.

[SPEAKER_00]: We're in trying times.

[SPEAKER_00]: We're in difficult times.

[SPEAKER_00]: So it takes an extra level of focus and understanding of the complexities that the geopolitical environments creates, that the fiscal environment creates for economies, companies, sectors, et cetera.

[SPEAKER_00]: So that's what this shows about giving you

[SPEAKER_00]: I deal a holistic view of different asset classes, different sectors, different companies, et cetera.

[SPEAKER_00]: So the main way we do this is by answering your finance investment questions, because we can talk about it, I can blow V-A, whatever I want.

[SPEAKER_00]: But you guys don't want that, you want answers to your questions, especially because your questions are questions some other investors talk listeners are thinking about as well.

[SPEAKER_00]: So I encourage you to reach out and give me a call eight to eight ninety nine chart is always the number.

[SPEAKER_00]: Now, just to be able to talk about today's Mark performance and run down the show topics for the hour.

[SPEAKER_00]: But as usual, we'll tackle this first call a question now.

[SPEAKER_05]: Hi, guys, great show.

[SPEAKER_05]: I just wanted what you think of the pin code dynamic income fund as a just as a dividend.

[SPEAKER_05]: Thank you.

[SPEAKER_00]: All right, looking at PDI is the Symbol Pimco dynamic income ETF.

[SPEAKER_00]: And Pimco generally is the largest bond fund manager in the world.

[SPEAKER_00]: So obviously they're doing something right.

[SPEAKER_00]: Now, the worry here is that it like a lot of these, this is what we call it closed end fund.

[SPEAKER_00]: It's not an ETF, it's a closed end fund.

[SPEAKER_00]: And they have leverage about thirty percent leverage here.

[SPEAKER_00]: And it has a high distribution rate, about fourteen percent.

[SPEAKER_00]: So that sounds great until you realize that leverage can create problems.

[SPEAKER_00]: So if I go look at a chart and a zoom back out, what you can see is this peaked out all the way back in

[SPEAKER_00]: early, twenty twenty thirty three dollars per share and it fell during coven all the way down to nineteen dollars per share rallied all the way back to twenty nine and now it's back to nineteen and why is that it's because of duration risk it owns bonds that have some duration and if you look at the total return total return okay over the last

[SPEAKER_00]: ten years.

[SPEAKER_00]: You're talking about nine point four percent.

[SPEAKER_00]: You know, it's pretty good.

[SPEAKER_00]: Five years is eight point nine.

[SPEAKER_00]: Pretty good for a bond fund.

[SPEAKER_00]: But it's very, very high risk.

[SPEAKER_00]: You're going to get those big drawdowns and, you know, that price decline is natural.

[SPEAKER_00]: You know, there are our dividends included in there.

[SPEAKER_00]: There is some duration year to point six, effective duration and they're taking credit risk.

[SPEAKER_00]: So the average credit rating is B.

[SPEAKER_00]: B, which is junk, okay?

[SPEAKER_00]: So it's leveraged with not a lot of duration.

[SPEAKER_00]: So that's the positive here.

[SPEAKER_00]: I mean, I said that before that duration might be an issue.

[SPEAKER_00]: This is not really two point six.

[SPEAKER_00]: Two point six is the duration.

[SPEAKER_00]: Not a lot of you're there.

[SPEAKER_00]: So it's low risk on that side, but it's high risk on the credit quality side.

[SPEAKER_00]: So if you do get

[SPEAKER_00]: the credit markets coming and done again at some point you have a major recession.

[SPEAKER_00]: This is going to lose a lot rather quickly because of that credit risk it's taking.

[SPEAKER_00]: So understand the risk there, having this as a part of your portfolio, the high risk bond slice of your portfolio, I have no problem with.

[SPEAKER_00]: It's historically pretty good performing.

[SPEAKER_00]: And a lot of the credit risk, what I would worry most about is where is it taking that credit risk?

[SPEAKER_00]: Okay, is it related to private equity?

[SPEAKER_00]: For example, I'd have to dig into this a little bit more.

[SPEAKER_00]: And if it is, I'd be very, very worried about it because I think private equity is a lot of problems.

[SPEAKER_00]: If it's more along lines of traditional corporates, then I would be okay with it.

[SPEAKER_00]: And it looks like here, it's a twenty-five percent government, twenty-eight percent corporate, twenty-three percent secure ties, twelve point, about thirteen percent cash and cash equivalent.

[SPEAKER_00]: Overall, I think it's okay to secure ties.

[SPEAKER_00]: It's probably the biggest worry about twenty three percent.

[SPEAKER_00]: That would probably be where the CLO is as close loan obligations are probably housed.

[SPEAKER_00]: But this is one of those ones where it's very complicated.

[SPEAKER_00]: You have to kind of unpack its holdings in a big, big way.

[SPEAKER_00]: But understand, it's very high risk.

[SPEAKER_00]: And anytime you're getting that type of yield, that is what you are taking.

[SPEAKER_00]: You're taking high risk.

[SPEAKER_00]: So if you're okay with high risk, then I don't mind it as a small slice of a bond portfolio.

[SPEAKER_00]: Now a lot of ground to cover over the next forty five minutes or so and time permitted.

[SPEAKER_00]: I will cover it all our main focus point is about nuclear energy and there's a big revival and there's various ways to bet on the space.

[SPEAKER_00]: So we'll look at different opportunities for investors from uranium miners to utilities, ETFs, small modular reactors, etc., will dig into that a bit more.

[SPEAKER_00]: Also, I want to look at

[SPEAKER_00]: the pitch of private equity versus traditional public equities.

[SPEAKER_00]: And there are various factors to consider, especially as more and more of these private equity, private debt offerings are being pushed out into the marketplace if through funds.

[SPEAKER_00]: And I've warned about this.

[SPEAKER_00]: But I want to break down various aspects of investing in that space because it's not just about one type of risk or one type of factor, it's multiple.

[SPEAKER_00]: Okay, so we'll dig into that story so you can understand private equity in a little with a little more context.

[SPEAKER_00]: Also, President of the Dallas Fed came out with a new study around immigration and mass deportation.

[SPEAKER_00]: Clearly, the current administration has some sort of a mandate, but the voters want immigration to slow.

[SPEAKER_00]: That was part of, I think, the Trump being elected.

[SPEAKER_00]: to what degree probably depends on what voter you're talking about, but either way it's going to have an impact and is having an impact already on the economy and the Dallas Fed has quantified that.

[SPEAKER_00]: So we'll dig into that story a bit more as well.

[SPEAKER_00]: We also have questions that came in via our voice bank around simply good foods.

[SPEAKER_00]: as well as corporate bonds, one concerning corporate bonds, and then we have some questions submitted via the comment section over on the investment on YouTube channels.

[SPEAKER_00]: Well, and of course, your live calls will be always top of the list.

[SPEAKER_00]: We can always save

[SPEAKER_00]: These questions for future shows, but we can't save your live calls.

[SPEAKER_00]: So, when you pick up the phone and give us a call, we will put you at the top and the front and the line, shall we say.

[SPEAKER_00]: Okay, but we're going to do a short break and on the other side, we'll talk about today's market activity and take your questions on the investment stock anytime.

[SPEAKER_00]: Listen to the line at eight and eight and nine chart.

[SPEAKER_02]: On radio, on YouTube, streaming live on at vestalk.com.

[SPEAKER_05]: My question today is about beach and me equipment services.

[SPEAKER_02]: And for our podcast subscribers, if you're willing to take the risk in vestalk, if you're okay with that risk, with host and financial advisor, Justin Klein, and that volatility.

[SPEAKER_02]: Go for it.

[SPEAKER_02]: And go host and portfolio manager, Luke Guerrero.

[SPEAKER_02]: It's this company's fall in like a rock.

[SPEAKER_02]: It's down, fifty-two percent in vestalk.

[SPEAKER_02]: Every body wants a secure financial future.

[SPEAKER_01]: Richard, do you have a question about T-O-L?

[SPEAKER_02]: But getting there takes strategy, discipline, and the right information.

[SPEAKER_00]: What are what you think of the price of it?

[SPEAKER_00]: Go to Chris in Maine, looking at I-E-X.

[SPEAKER_00]: Hey Justin, I own it, just seeing what you thought of it.

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[SPEAKER_02]: Call Invest Talk.

[SPEAKER_00]: Let's go look at the market today for July, nine, twenty, twenty, five.

[SPEAKER_00]: It was a nicely positive day mainly on the growth of the market.

[SPEAKER_00]: So the NASDAQ was up nearly one percent.

[SPEAKER_00]: S&P was up about point six percent on the day, Dow up about half a percent and the mag seven overall did fairly well in video up nearly two percent met up one point seven Amazon up about one and a half brought come up to point two.

[SPEAKER_00]: A Tesla was the big loser in the mag seven, but it's still only down about point six percent on the day.

[SPEAKER_00]: Other sectors

[SPEAKER_00]: It wasn't a whole lot of movement, frankly.

[SPEAKER_00]: Walmart was down a little, Costco was down a little.

[SPEAKER_00]: A lot of the banks were roughly flat and we had weakness out of consumer staples.

[SPEAKER_00]: The communication companies, the wireless communication companies, the ATT Verizon team mobile.

[SPEAKER_00]: That's where the weakness was.

[SPEAKER_00]: So we're still below Monday's high.

[SPEAKER_00]: Kind of the choppy environment.

[SPEAKER_00]: We're heading into opx week next week.

[SPEAKER_00]: Probably brings more potential fireworks as well as the start of earnings season.

[SPEAKER_00]: And earnings season is

[SPEAKER_00]: is up in the air, you know, this is the first full quarter where you have the tariff issues.

[SPEAKER_00]: What does that look like?

[SPEAKER_00]: How does that feed into earnings?

[SPEAKER_00]: What does that has that feeding also into more importantly, the rest of the year outlook for companies?

[SPEAKER_00]: And labor, you know, what is the labor market weakening?

[SPEAKER_00]: How is that impacting the overall earnings picture as well?

[SPEAKER_00]: So,

[SPEAKER_00]: I think there's more fireworks probably next week.

[SPEAKER_00]: This week kind of a dirt of economic news tomorrow.

[SPEAKER_00]: You do get continuing in initial jobless claims.

[SPEAKER_00]: But that's about it.

[SPEAKER_00]: And tomorrow next week, excuse me, you get a lot more potential catalysts.

[SPEAKER_00]: Okay.

[SPEAKER_00]: The major news event on the economic front was not even really an economic.

[SPEAKER_00]: Now a report, it was really around the FOMC minutes.

[SPEAKER_00]: Now the FOMC will meet again at the end of this month and the third year.

[SPEAKER_00]: Three weeks on today.

[SPEAKER_00]: And it's pretty clear based on the minutes.

[SPEAKER_00]: The members of the FOMC are pretty mixed on what they think they should do.

[SPEAKER_00]: A couple of members said maybe a July cut.

[SPEAKER_00]: is justifiable.

[SPEAKER_00]: A few more said, no cuts at all, most likely between now in your end because labor market, well, slightly weakening is overall fine because the responding is generally fine.

[SPEAKER_00]: And inflation is actually starting to tick up, but that's what we're seeing is that we think inflation will head from about two and a half percent roughly, depending on what measure you're looking at, closer to three percent, maybe a little higher than that by year end.

[SPEAKER_00]: So that, especially live market breaks in a material way, will put the Fed kind of in a box of what to do.

[SPEAKER_00]: You cut rates and the midst of rising inflation with labor market breaking, et cetera.

[SPEAKER_00]: So, not a lot of clarity.

[SPEAKER_00]: with that report, and clearly the model of the clarity on the FOMC board.

[SPEAKER_00]: So that was kind of the news today on that front.

[SPEAKER_00]: Treasuries were a bit stronger with rates down a little bit.

[SPEAKER_00]: Dollar was flat, gold finished up.

[SPEAKER_00]: One percent Bitcoin.

[SPEAKER_00]: That was a strength there, two point, seven percent gain above the hundred twelve thousand mark-fresh record highs.

[SPEAKER_00]: And that is a leading indicator.

[SPEAKER_00]: I've said that for a while that Bitcoin has been kind of chopping around here in the between a hundred and, you know, one ten level for a while at two three months now.

[SPEAKER_00]: And it's kind of given a neutral liquidity reading.

[SPEAKER_00]: And that's where I look at Bitcoin.

[SPEAKER_00]: It's a liquidity proxy.

[SPEAKER_00]: If it's doing well, liquidity is relatively abundant because it's the outskirts of the financial system.

[SPEAKER_00]: Whereas if it is weakening, then that's clearly the market saying, hey, liquidity is starting to add.

[SPEAKER_00]: And this is what happened in, twenty, twenty, one, it peaked before the actual equity markets.

[SPEAKER_00]: And so the fact that's strong,

[SPEAKER_00]: He's being a little more bullish in the short term, and we'll be paying to watch that as well as on top of the earnings season that comes up very soon.

[SPEAKER_00]: Now we're heading into a break.

[SPEAKER_00]: Drop break.

[SPEAKER_00]: Feel the comment.

[SPEAKER_00]: A YouTube questionnaire too, and of course my phone is blocked.

[SPEAKER_02]: You've got finance and investment questions, and Justin Klein is ready to provide his unbiased answers.

[SPEAKER_02]: Call now or anytime, eight eight eight ninety nine chart.

[SPEAKER_00]: Now my main focus point on the best talk today is about nuclear energy and it's experienced a huge revival as of late the biggest in decades.

[SPEAKER_00]: And the sector as a whole is going to produce record amounts of electricity this year.

[SPEAKER_00]: And investment in nuclear power has increased by about fourteen percent annually over the past four years.

[SPEAKER_00]: That's up from only one percent prior to twenty twenty.

[SPEAKER_00]: Okay.

[SPEAKER_00]: And it's, it used to be about climate goals that this was a clean way to produce power.

[SPEAKER_00]: But it was always, you know, environmentalists were scared off of the risks around nuclear meltdowns, et cetera.

[SPEAKER_00]: But now the driving force is less about climate goals and more about massive power demands around AI and cloud infrastructure.

[SPEAKER_00]: Now, overall data centers consume about four point four percent of U.S.

[SPEAKER_00]: electricity in

[SPEAKER_00]: That's that figure is expected to go to twelve percent by twenty twenty eight.

[SPEAKER_00]: And what we're seeing as of as of late is that these hyperscalers, your metas, your Google's, your Amazon's, your Microsoft's of the world, they are signing nuclear power purchase agreements from companies like constellation energy.

[SPEAKER_00]: And they're clearly trying to find clean, consistent, base load power to put to power these facilities.

[SPEAKER_00]: And the head of global energy at meta, think about that, meta has a head of global energy.

[SPEAKER_00]: What he said was, quote, securing clean, reliable energy is necessary to continue advancing our AI ambitions and quote.

[SPEAKER_00]: So it's clear that this is only beginning.

[SPEAKER_00]: because of the growth of demand of AI is also only beginning.

[SPEAKER_00]: The question is, how do you gain exposure to this space?

[SPEAKER_00]: Now, the first, I was in a simple way, the riskiest and most upside, the stocks that have the most upside are probably in the uranium space.

[SPEAKER_00]: Okay, and that would be the biggest we own for clients.

[SPEAKER_00]: Comica, but there are others out there.

[SPEAKER_00]: They're the second world's second largest uranium producer.

[SPEAKER_00]: But then you have utility companies like constellation energy, the largest owner of nuclear plants in the United States.

[SPEAKER_00]: Then you have families like GE, Vernova, they also fund the, or they have products for the industry of build out of traditional nuclear plants supporting, if you're being activating some of these plants servicing these plants, et cetera.

[SPEAKER_00]: But there are many others out there that cover this space.

[SPEAKER_00]: We own some others that are smaller.

[SPEAKER_00]: So don't think use the only ones if they do your own research and find the one that makes sense for you with the best growth and value, et cetera.

[SPEAKER_00]: But those are, you know, from an industrial to utilities to obviously uranium miners, those are the main ways of individual companies that probably produce profits and maybe pay dividends that you can go out there and buy.

[SPEAKER_00]: Other other ways to gain exposure, one would be nuclear power ETFs.

[SPEAKER_00]: So the top two are URA and URA and M. URA has fifty one holdings, has uranium producers as well as component manufacturers, service providers, etc.

[SPEAKER_00]: And Mika's about a quarter of that funds you're getting a lot of exposure there.

[SPEAKER_00]: The Sprot Uranium Miners ETF, Uranium, that is, thirty eight holdings.

[SPEAKER_00]: Those are all Uranium miners that produce at least fifty percent of their assets are headed towards Uranium mining.

[SPEAKER_00]: Then there are small modular reactor companies.

[SPEAKER_00]: These are very high risk because there hasn't really been large scale rollout of these type of

[SPEAKER_00]: products and basically the whole goal of this is saying they were going to create this small power plant that we can build in a factory that is powered by uranium and ship it and put it in place maybe next to a AI data center for example

[SPEAKER_00]: The issue with it is that there are eighty different small modular reactor designs in development, eighty.

[SPEAKER_00]: And the reality is that most likely there will be one maybe two different designs that will actually make it to market and create scale, meaning

[SPEAKER_00]: It's so cost effective and efficient and safe that this is the best design that's out there.

[SPEAKER_00]: That means the very small percentage of those AD are actually going to be good investments.

[SPEAKER_00]: The best majority are going to be throwing money after something that just doesn't really gain traction.

[SPEAKER_00]: So that's the biggest worry here with investing in that space.

[SPEAKER_00]: It's extremely high risk.

[SPEAKER_00]: and you have to go into it knowing that.

[SPEAKER_00]: Now what are the risks around the space in general?

[SPEAKER_00]: We know the...

[SPEAKER_00]: long-term demand, the secular trends there.

[SPEAKER_00]: But what are the short-term risks?

[SPEAKER_00]: Well, obviously, construction and development, you can certainly run over on cost, high-concitation, concentrate supply chains.

[SPEAKER_00]: So most of the uranium in the world is produced out-setting landscapes, and Kazakhstan accounts for forty-three percent.

[SPEAKER_00]: So that's an issue.

[SPEAKER_00]: And then political support can wax and wanes.

[SPEAKER_00]: So understand those risks.

[SPEAKER_00]: Now the next and best thought we'll look into the story behind this headline.

[SPEAKER_00]: Gen X can't count on the great gender, great wealth, transfer, or retirement.

[SPEAKER_00]: Best story tomorrow, but for now I'm Justin Klein and ready to take your calls at eight and eight ninety nine chart.

[SPEAKER_02]: The markets react to uncertainty.

[SPEAKER_02]: Are you prepared?

[SPEAKER_02]: Is your portfolio balanced?

[SPEAKER_02]: Is it optimized?

[SPEAKER_02]: Your financial future depends on the answers to those questions.

[SPEAKER_02]: Justin Klein is here now and ready to talk with you.

[SPEAKER_02]: Call on Vestalk, eight, eight, nine, chart.

[SPEAKER_03]: Hey guys, I wanted to get your thoughts on simply good food's company.

[SPEAKER_03]: Take your symbol, FMPL.

[SPEAKER_03]: If nearest fifty two week low, just trying to find some potential deals and more food like a bit of a fraught in market, the company owns quality brands like Ashkins and Quest with both things we do well and continue to expand their product offerings.

[SPEAKER_03]: The reports earnings tomorrow, so I wouldn't pick up any shirt until afterward.

[SPEAKER_03]: I just wanted to get your guys thoughts on this one and if it may be a good pick-up long term.

[SPEAKER_03]: Thanks for what you did.

[SPEAKER_00]: are looking at simply foods company s m p l and it has been struggling as of late that's for sure relative strength is at sixteen but it's not at multi year lows or anything is just at the really the the lows

[SPEAKER_00]: of the range it's been in since twenty twenty one.

[SPEAKER_00]: Between about twenty nine dollars per share.

[SPEAKER_00]: It's called thirty and a high end around the low forties.

[SPEAKER_00]: So it's at thirty two now earnings this year so it's been a dollar ninety four two dollars and six cents next year.

[SPEAKER_00]: Of those estimates are coming down.

[SPEAKER_00]: No dividend is probably the the biggest issue on that front.

[SPEAKER_00]: But they have a good balance sheet.

[SPEAKER_00]: very little net debt, their debt decry ratios only point one six.

[SPEAKER_00]: Cat free cash flow is a hundred and seventy eight million on a three billion dollar market cap.

[SPEAKER_00]: That's decent you know five six percent cat free cash flow yield return equity is eight percent.

[SPEAKER_00]: A point four which is where it's been in for a while which is a.

[SPEAKER_00]: Good business, but certainly not amazing.

[SPEAKER_00]: Now, what they do is they provide low carbohydrate, high protein bar shakes and other products under the Atkins and Quest brands.

[SPEAKER_00]: So that's the issue.

[SPEAKER_00]: I see is a Zempick.

[SPEAKER_00]: If that's the new way that people lose weight, then what you need a low carb

[SPEAKER_00]: diet for.

[SPEAKER_00]: Now, I'm a much bigger fan.

[SPEAKER_00]: Personally, I've done a ketogenic diet, a low carb diet.

[SPEAKER_00]: I didn't use their products, but you know, it is a brand that's been around a long time.

[SPEAKER_00]: They were kind of the pioneers around ketogenic diets, and I think they work.

[SPEAKER_00]: I think they're great.

[SPEAKER_00]: High protein, high fat, low carb, I personally have

[SPEAKER_00]: Once again, utilized that type of diet to cut weight dramatically, actually, quick story at a, did a body fat challenge with some friends, some years back.

[SPEAKER_00]: And in thirteen weeks, I went from fifteen percent body fat to ten, just doing keto, working out, playing basketball, et cetera.

[SPEAKER_00]: So it was a, I recommend it to everybody who's trying to lose weight.

[SPEAKER_00]: I think it's a much healthier way to lose weight than, it was epic.

[SPEAKER_00]: But for some people, obviously, that's one way to do it.

[SPEAKER_00]: I actually kind of like this because I think at some point there will be a reversion to actual food in this type of healthier way to lose weight.

[SPEAKER_00]: And it's a good business.

[SPEAKER_00]: It's not amazing.

[SPEAKER_00]: It's probably with the top of my list of companies that I would buy.

[SPEAKER_00]: But if you're trying to fade the exemplic trend, the GLP-one trend, this would be a good way to do that.

[SPEAKER_00]: Once again, probably not my favorite way to deploy my capital in this market, but it's fine.

[SPEAKER_00]: It's a solid business.

[SPEAKER_00]: I like that they have a good balance sheet, et cetera.

[SPEAKER_00]: Now let's keep things moving and play another fresh listener question now.

[SPEAKER_04]: Hello and this talk.

[SPEAKER_04]: This is Jenny from Denmark.

[SPEAKER_04]: I have a question about corporate bonds.

[SPEAKER_04]: The bulk of my free money that I have invested is in the corporate bonds, USD corporate bonds, and one of the three year turn corporate bonds.

[SPEAKER_04]: This is like almost a hundred percent bonds in my pension account.

[SPEAKER_04]: I have some stock.

[SPEAKER_04]: But regarding my bonds, they've dropped a bit.

[SPEAKER_04]: I was wondering if you'd sell them by stocks instead because I've recently heard that the American stocks are actually undervalued now because everyone is afraid that the terrorist is going through calls of crack in the investment world.

[SPEAKER_04]: When everyone's afraid, you should be bullish.

[SPEAKER_04]: So I was wondering if you think I should sell my corporate bonds and go stocks again.

[SPEAKER_04]: would do much like to hear your opinion.

[SPEAKER_04]: Thank you.

[SPEAKER_04]: Bye.

[SPEAKER_00]: Well, I would argue down after this rally, the market is off-size on the impact of tariffs and that, you know, you're timing wise.

[SPEAKER_00]: You're not, you're not, it's like a great time to be moving money from Singapore bonds into

[SPEAKER_00]: Equities broadly, now there are certainly a hundred percent there are opportunities out there.

[SPEAKER_00]: So if you have specific companies, then that may make more sense.

[SPEAKER_00]: But, you know, just broad-based, okay, timing-wise, not the best time, I think, to get into U.S.

[SPEAKER_00]: Equities.

[SPEAKER_00]: Corporate bonds, I'm not sure what they dropped recently.

[SPEAKER_00]: If I pull up like an LQD, a chart of LQD, which is the investment grade bond ETF, it's rallied fairly nicely, and your short duration, so that's good.

[SPEAKER_00]: I don't see credits spreads widening out, so I'm not sure why they've dropped as of late.

[SPEAKER_00]: But I wouldn't be, this isn't to me, a timing, a time to betraying out of equities and finding great bargains.

[SPEAKER_00]: Sorry, out of corporate bonds and finding great bargains and equities.

[SPEAKER_00]: I shall see that as good timing at the current time.

[SPEAKER_00]: Now let's pivot over and talk a bit about, I like this immigration story.

[SPEAKER_00]: This is from the Dallas Fed.

[SPEAKER_00]: And they looked at a period between nineteen fifty five and twenty nineteen.

[SPEAKER_00]: And what they said was that.

[SPEAKER_00]: US GDP growth typically increase for the two years in response to unexpected increase in net unauthorized immigration.

[SPEAKER_00]: And then gradually vrts to its meat.

[SPEAKER_00]: What's saying is.

[SPEAKER_00]: You have a boost in economic growth, economic output, and slight deflation, or disinflation, which makes sense, right?

[SPEAKER_00]: Because as the workforce grows, economic output goes up.

[SPEAKER_00]: That's a plant.

[SPEAKER_00]: It's a product of

[SPEAKER_00]: just more labor supply.

[SPEAKER_00]: When you put in more capital, you put in more planning equipment, you put in more labor, you could economic output.

[SPEAKER_00]: That's simple basic economics.

[SPEAKER_00]: So that shouldn't shock anyone.

[SPEAKER_00]: And then inflation comes down because once again, more labor supply means less upward pressure on wages.

[SPEAKER_00]: Now that could be the reason why a lot of people want less immigration because of the long term impact that has on

[SPEAKER_00]: on pay for workers.

[SPEAKER_00]: But what they're just looking at is what does it do in the short term, over the first couple of years.

[SPEAKER_00]: And their base case, and they look at what this is mean for future economic output under a Trump administration that clearly has drastically reduced if not eliminated.

[SPEAKER_00]: immigration and now they are obviously looking to deport a large number of undocumented workers.

[SPEAKER_00]: So what kind of economic impact will that have in the short term?

[SPEAKER_00]: That's what they're looking at.

[SPEAKER_00]: Now once again, this isn't me saying this is good policy or bad policy.

[SPEAKER_00]: It's just simply the facts backed up by historical debt.

[SPEAKER_00]: Now what the Dallas Fed was was looked at the

[SPEAKER_00]: net unauthorized immigration statistics and keeping them in place as of the spring of twenty twenty five.

[SPEAKER_00]: So March April may time period.

[SPEAKER_00]: And what they see is annual GDP growth is going to be about point eight one percent lower this year.

[SPEAKER_00]: And point four nine percent lower.

[SPEAKER_00]: Next year.

[SPEAKER_00]: The question is, will they ramp up the deportations?

[SPEAKER_00]: If they do, you're talking about farm laborers, roofers, meat packers, etc.

[SPEAKER_00]: They're calling this high interior deportation.

[SPEAKER_00]: So not just stopping people from coming into the country, but actually actively finding them that are undocumented and deporting them.

[SPEAKER_00]: And they assume that this will rise to about four hundred and thirty seven thousand five hundred per year.

[SPEAKER_00]: And that would cut economic growth by point eight percent eight three percent this year and point eight four percent next year.

[SPEAKER_00]: Okay, so nearly one percent.

[SPEAKER_00]: And you add on top of that, if people self-deport, they've talked about, hey, we'll pay for your flights to go back to your home country, be self-deport between now and middle of next year, that would shave off about one point, one point, oh, one percent this year, and point four, five percent next year.

[SPEAKER_00]: and under mass interior deportation.

[SPEAKER_00]: So this is not high interior deportation.

[SPEAKER_00]: You're talking about mass meaning high for them is four and a thirty seven thousand people and under mass interior deportation.

[SPEAKER_00]: They're saying it would be over the next two years a million annually.

[SPEAKER_00]: So, over double what the, what I'm going to call it, high interior duplication radius.

[SPEAKER_00]: That would cut growth by about point eight, nine percent this year and one and a half percent next year as well.

[SPEAKER_00]: So, that's the raw economic impact.

[SPEAKER_00]: Most likely, obviously, these are models, but the model is based on

[SPEAKER_00]: previous data, previous economic activity, et cetera.

[SPEAKER_00]: And the bigger question I think is, we'll be magnified.

[SPEAKER_00]: Because if you run a hotel and you are employing some undocumented workers to work in the kitchen, clean rooms, et cetera, and years ago, maybe one or two get deported, you can find replacements and keep operating.

[SPEAKER_00]: Well, let's say ICE comes in and deports the vast majority of your staff.

[SPEAKER_00]: Now, you may not be able to actually even run your operation.

[SPEAKER_00]: And then that could snowball itself to laying off from desk people and those that work in events and other parts of the hotel, for example.

[SPEAKER_00]: So I think that's the big question is what other, if it's a mass, what type of magnified impact would that have?

[SPEAKER_00]: And that is, is difficult to quantify because we haven't had that type of data because

[SPEAKER_00]: any change in immigration has been minor, not major.

[SPEAKER_00]: And so, is inching to follow that, but we'll see how that evolves and which way it goes.

[SPEAKER_00]: It's going to be high, interior deportation, how much self-deport and how many it will, it will to be mass deportations as well.

[SPEAKER_00]: Now, every day, receive questions from the comment section of our Invest.

[SPEAKER_00]: YouTube channel, and here's one that came in earlier from Selenus, is what are your thoughts on NEE?

[SPEAKER_00]: I believe they're focused on solar and when energy is going to be a strength in the future, but I'm a little concerned about the location of their services for it as notoriously for natural disasters, is that something to consider?

[SPEAKER_00]: I think the simple answer is yes, you answered your own question.

[SPEAKER_00]: and I actually don't think that the investment in that clean energy or traditional clean energy of solar and wind historically those payback periods are very very long and it's they take on the high-half front costs

[SPEAKER_00]: and creates a lot of debt.

[SPEAKER_00]: And the good thing is this is a regulated utility.

[SPEAKER_00]: So a lot of cases they could pass along that high cost of debt to the citizens of Florida that's where next energy operates operate out of Florida.

[SPEAKER_00]: And so I don't think it's going to be a bankruptcy thing or anything like that.

[SPEAKER_00]: I think they'll be able to

[SPEAKER_00]: lobby the regulators to help them with any potential issues.

[SPEAKER_00]: But if I'm betting on utility company out there, this is very low.

[SPEAKER_00]: This is a very low.

[SPEAKER_00]: This is lower on my list because of that focus on renewables, frankly.

[SPEAKER_00]: We actually looked recently, we assessed our utility sector rankings and

[SPEAKER_00]: Next era was not near the top of the list.

[SPEAKER_00]: So I think there are much better opportunities out there.

[SPEAKER_00]: I rather focus on companies that have nuclear as the main focus went on today's show is about I rather focus on companies that have that capacity that are building out that capacity, etc.

[SPEAKER_00]: Whereas right now approximately thirty percent of next era's energy growth comes from its renewable energy development.

[SPEAKER_00]: And like you said, when you have hurricane potential issues and the damage that can be done to solar and wind farms, et cetera, and the high upfront costs, if there's a lot of risk there on that front.

[SPEAKER_00]: So I'm, I would put this middle of the pack to lower on the totem pole when it comes to utility companies that I would invest in.

[SPEAKER_00]: Thanks for the comments.

[SPEAKER_00]: Those are Vestoc, I'm Justin Klein, and we have one goal each and every week day.

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[SPEAKER_00]: Let's pivot over to a live call, Eric and Phoenix looking at CVCO, which is Cavco Industries.

[SPEAKER_00]: What are you liking about this name?

[SPEAKER_06]: I was just thinking that it was in a different part of the housing market, something that seems more affordable, more affordable at housing.

[SPEAKER_06]: They're financial seems to be good.

[SPEAKER_06]: They're buying chairs.

[SPEAKER_06]: They don't have very much debt.

[SPEAKER_06]: And then they had like vertical integration of like providing mortgage for their own

[SPEAKER_06]: product and insurance options.

[SPEAKER_00]: Yeah.

[SPEAKER_00]: Got it.

[SPEAKER_06]: I like that.

[SPEAKER_00]: Yeah, I think this is a very interesting name.

[SPEAKER_00]: I will say that.

[SPEAKER_00]: What they do is they make factory built homes.

[SPEAKER_00]: So modular homes, mobile homes, vacation cabins, et cetera.

[SPEAKER_00]: And in a world where affordability is challenged across the country.

[SPEAKER_00]: This is certainly homeowners are looking to these solutions.

[SPEAKER_00]: And they've done very well.

[SPEAKER_00]: Pre-COVID, they made seven dollars and forty cents.

[SPEAKER_00]: This year, the system make twenty three dollars and ninety nine cents, that's about eleven percent from last year.

[SPEAKER_00]: It's just to go up about thirteen percent next year and earnings as well.

[SPEAKER_00]: And I like what you were talking about where they're buying back shares consistently.

[SPEAKER_00]: They're using their cash flow.

[SPEAKER_00]: Like you said, no debt, really net cash on its balance sheet, a hundred and fifty seven million dollars in free cash flow on about about three billion dollar enterprise value in twenty twenty one that nine point two million shares outstanding now they're down to about eight million shares outstanding.

[SPEAKER_00]: So consistently using that cash flow to buy back shares.

[SPEAKER_00]: I like that enterprise value the EBITDA is around fourteen

[SPEAKER_00]: Now that is on the higher end of its range over the past five years.

[SPEAKER_00]: So I wouldn't say it's cheap.

[SPEAKER_00]: My biggest worry with this is the chart.

[SPEAKER_00]: And it's now in a downtrend.

[SPEAKER_00]: It broke.

[SPEAKER_00]: It's uptrend, broke the two hundred aim of the average back in May, late May.

[SPEAKER_00]: And it's had a recent balance, but still below the fifty, the hundred and the two hundred aim of the average.

[SPEAKER_00]: And so it's in the downturn.

[SPEAKER_00]: It's in a clear downtrend right now.

[SPEAKER_00]: But I do like the business overall.

[SPEAKER_00]: If you look at profitability return equity is sixteen percent.

[SPEAKER_00]: And that's great with very little debt.

[SPEAKER_00]: And I don't think they're going to earn as much they did in twenty twenty two or twenty twenty one when return equity peaked at thirty two percent.

[SPEAKER_00]: But even if you go pre-COVID, there return equity was always in the mid to high teens, which is a good business.

[SPEAKER_00]: So I like that.

[SPEAKER_00]: Okay, so what I would say is keep this on the watch list and watch for the technicals to firm up a little bit.

[SPEAKER_00]: I don't like that downtrend is there could be an issue with tariffs and I have to dig into it right how much of their of of the homes are they are the importing as it just components of the homes where is it what does their supply chain look like?

[SPEAKER_00]: I think that would be a question I would want answered on top of

[SPEAKER_00]: the chart for me up so do a little more digging do a little more research be patient on it because it's it's not like it's running away from you it's like I said in a downtrend and so keep on the sidelines for now thanks for the call I like these I like that he's looking at

[SPEAKER_00]: smaller companies that have good balance sheets that's crucial in this environment where over the medium term long term rates are probably going higher you know short term yeah rates could drop you could go through a fed easing cycle but due to our fiscal situation most likely rates are higher and so that's going to flow into the ability for companies that are highly lured to finance themselves that's going to hit their bottom line because their interest costs are going to go up and

[SPEAKER_00]: and it also probably keeps you housing market from really breaking out the upside and brings continued affordability challenges and these are companies that can address that for some people.

[SPEAKER_00]: So I like the name.

[SPEAKER_00]: I'm Justin Colliding, it's another invest talk program and if today's show made you think about what's going on in your financial life, whether that's retirement planning, whether that's just strategy within your portfolio to prepare for inflationary environments, for higher-instructing environments, whatever

[SPEAKER_00]: Whatever concerns you might have, I encourage you to schedule a no-cost portfolio review with me or Luke.

[SPEAKER_00]: All you have to do is head over to bestdoc.com, click on the portfolio view button and fill that out.

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