00:04.218 --> 00:12.940 [SPEAKER_03]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk.

00:13.581 --> 00:15.941 [SPEAKER_03]: Independent Thinking, shared success.

00:17.962 --> 00:26.804 [SPEAKER_03]: Invest Talk is made possible by KPP Financial, a registered investment advisor for serving clients throughout the United States.

00:27.345 --> 00:32.046 [SPEAKER_03]: Here is KPP Financial Portfolio Manager, Luke Guerrero.

00:34.533 --> 00:38.095 [SPEAKER_01]: Good afternoon, fellow investors, and welcome back to Investock.

00:39.115 --> 00:43.178 [SPEAKER_01]: I'm Lou Guerrero, and today is Friday, July, July, eleven.

00:43.838 --> 00:46.619 [SPEAKER_01]: Getting ahead of myself, twenty, twenty, five.

00:46.639 --> 00:57.725 [SPEAKER_01]: And with that being said, we are almost halfway through the month of July, and I feel as though I often come on here and just talk about how time is just flying by.

00:58.886 --> 01:00.687 [SPEAKER_01]: One of the reasons could be, well,

01:02.083 --> 01:03.383 [SPEAKER_01]: Things are constantly happening.

01:03.743 --> 01:06.824 [SPEAKER_01]: The world is constantly changing around us.

01:07.965 --> 01:18.568 [SPEAKER_01]: And so because of that with regards to the market, with regards to your own financial plans, regards to your portfolios, it's important that you don't lose focus.

01:19.552 --> 01:27.417 [SPEAKER_01]: And so in Investock, Justin and I have one objective, and that is to help make you become a better and also more informed.

01:28.177 --> 01:39.905 [SPEAKER_01]: Investor, we want to help you understand market dynamics, we want to help you understand market structure, we want to help you understand how all of this data you're getting drives, equity prices, drives your portfolio, returns.

01:41.388 --> 01:44.771 [SPEAKER_01]: Now to that end, I have a mixture of educational and actionable items today.

01:45.611 --> 01:48.474 [SPEAKER_01]: As we always do, we'll go over all of those a little bit later on.

01:49.355 --> 01:57.982 [SPEAKER_01]: But most importantly, we have your contributions to this show, your contributions to all of us, which is your finance and investment questions.

01:59.223 --> 02:04.527 [SPEAKER_01]: So in just a bit, we'll talk about today's market performance, and we will run down those show topics I have for you.

02:05.228 --> 02:06.789 [SPEAKER_01]: But let's tackle this question now.

02:07.604 --> 02:19.593 [SPEAKER_05]: I own a small position in N of X, ticker, E and the X. They just declared a dividend in a form of a warrant.

02:19.853 --> 02:23.476 [SPEAKER_05]: And I've never owned a stock that has done this before.

02:23.736 --> 02:30.641 [SPEAKER_05]: They're going to issue a warrant for every seven shares owned with an exercise price of eight dollars and seventy five cents.

02:31.122 --> 02:35.465 [SPEAKER_05]: And it looks like it's going to expire in October of twenty six.

02:35.884 --> 02:42.866 [SPEAKER_05]: My cost per share of my whole name is actually a dollars and ninety cents, so it's just a little bit above that.

02:43.687 --> 02:44.367 [SPEAKER_05]: What is this?

02:45.727 --> 02:52.449 [SPEAKER_05]: I assume that they want to raise some money and it's kind of like an option maybe except the company is issuing it.

02:53.290 --> 02:55.711 [SPEAKER_05]: Won't this dilute the shares?

02:55.791 --> 03:00.052 [SPEAKER_05]: Like what effect do you foresee this having on the stock?

03:00.252 --> 03:03.073 [SPEAKER_05]: Thanks for all you do and I will listen on the podcast.

03:05.362 --> 03:18.384 [SPEAKER_01]: Okay, so with this company, first and foremost, let's go over what the company is and what it does just to give you a little bit of context here, ticker, e and vx is and no vx.

03:19.164 --> 03:20.945 [SPEAKER_01]: They are a battery company, right?

03:20.965 --> 03:32.627 [SPEAKER_01]: They design and manufacture advanced lithium ion batteries for electric vehicles for wearables and their goal like most battery companies is to essentially improve battery storage and improve energy density.

03:33.187 --> 03:41.791 [SPEAKER_01]: Now, over the past three months, they're up a hundred and thirty five percent and in spite of that, they're still down twenty percent over the past fifty two weeks.

03:41.831 --> 03:44.432 [SPEAKER_01]: One of the reasons being, well, revenue has been missing.

03:45.432 --> 03:46.813 [SPEAKER_01]: Growth has been not too great.

03:46.873 --> 03:50.175 [SPEAKER_01]: Production capacity has been disappointing as well.

03:50.215 --> 03:57.638 [SPEAKER_01]: And so, you know, they did show a little bit of revenue in the last quarterly report that was to their benefit a little bit of growth, but

03:58.811 --> 04:00.333 [SPEAKER_01]: still missing a lot of expectations here.

04:01.313 --> 04:04.957 [SPEAKER_01]: From an ownership perspective, this is a pre-profit company, right?

04:04.997 --> 04:10.422 [SPEAKER_01]: You see net margins are very, very negative, return on equity negative, forty five point three percent.

04:11.263 --> 04:14.906 [SPEAKER_01]: They have a little bit of debt, though not too much debt on a

04:15.947 --> 04:19.950 [SPEAKER_01]: You know, of two point eight billion dollar market cap company, about a hundred and ninety five million in debt.

04:20.350 --> 04:31.519 [SPEAKER_01]: Regardless, in terms of ownership, this is a company that I probably wouldn't own right now, just because of the trends within the EV market, the difficulty of being within the battery space, how expensive it can be.

04:31.559 --> 04:32.920 [SPEAKER_01]: And obviously this company is having some issues.

04:33.420 --> 04:34.961 [SPEAKER_01]: But your question about warrants, right?

04:35.001 --> 04:41.126 [SPEAKER_01]: The warrant upon exercise gives you the right to buy shares directly from the company, okay?

04:41.666 --> 04:42.007 [SPEAKER_01]: And so,

04:43.398 --> 04:53.208 [SPEAKER_01]: It is a derivative instrument that allows a company to raise additional capital and for a company that doesn't have much debt and also has no profits.

04:54.430 --> 04:57.233 [SPEAKER_01]: This is a way for them to finance their business.

05:00.328 --> 05:04.651 [SPEAKER_01]: to entice you, they will do it at a discount, which is the case here.

05:04.711 --> 05:12.116 [SPEAKER_01]: And so if your cost basis is way above and you like the company, this is a good way to lower your average cost per share ownership.

05:12.796 --> 05:16.618 [SPEAKER_01]: But you are correct, it does dilute existing shareholders.

05:17.059 --> 05:18.320 [SPEAKER_01]: And so keep that in mind, right?

05:18.340 --> 05:22.302 [SPEAKER_01]: But the core of it here is should you be owning this pre-profit company?

05:22.802 --> 05:25.644 [SPEAKER_01]: You are pretty high above where your cost basis is.

05:25.684 --> 05:27.606 [SPEAKER_01]: I think you said it was around the eight dollar range.

05:28.126 --> 05:29.267 [SPEAKER_01]: And given some of the struggles,

05:30.007 --> 05:33.830 [SPEAKER_01]: I would probably not throw additional money in the pot here.

05:34.351 --> 05:37.473 [SPEAKER_01]: That is, ENVX and OVIX Corporation.

05:37.493 --> 05:46.160 [SPEAKER_01]: All right, we've got a lot of ground to cover in the next forty-five minutes or so and here's a little bit of what we have planned.

05:46.901 --> 05:50.044 [SPEAKER_01]: My main focus point concerns this topic.

05:50.064 --> 05:50.124 [SPEAKER_01]: Why?

05:50.224 --> 05:54.647 [SPEAKER_01]: Twenty-twenty-five is a pivotal year for America's budget.

05:55.627 --> 05:56.047 [SPEAKER_01]: The U.S.

05:56.107 --> 06:05.212 [SPEAKER_01]: is facing mounting risks of higher inflation, rising interest rates, and a potential fiscal cliff, if Congress fails to address expiring tax cuts, which they already have.

06:06.033 --> 06:13.157 [SPEAKER_01]: Though, you know, there are some additional issues with discretionary spending and other fiscal deadlines in twenty twenty five.

06:14.377 --> 06:20.341 [SPEAKER_01]: Whilst the touch on the latest hair threats, seems like there's a new threat every day, and how that could delay rate cuts.

06:21.210 --> 06:31.078 [SPEAKER_01]: We'll also touch on how index fun investing has turned into a far more active avenue than it has before.

06:31.799 --> 06:33.180 [SPEAKER_01]: And should we have time at the end of the show?

06:33.440 --> 06:40.446 [SPEAKER_01]: We'll touch on why it's important to think of investing as a forward-looking thing and not spend too much time looking behind you.

06:41.993 --> 06:54.956 [SPEAKER_01]: We also have some questions ready to play, including, well, I don't have a preview for you, but we also have some questions coming in from the comment section of the University of YouTube channel, your voice males, and hopefully your live calls.

06:56.296 --> 06:57.116 [SPEAKER_01]: We're headed into break.

06:57.796 --> 06:59.616 [SPEAKER_01]: I welcome your finance and investment questions.

06:59.636 --> 07:01.317 [SPEAKER_01]: Now, no question is too simple.

07:02.097 --> 07:03.817 [SPEAKER_01]: Hopefully, no, it none is too complex.

07:03.837 --> 07:04.997 [SPEAKER_01]: We'll find out if you have one.

07:05.538 --> 07:07.518 [SPEAKER_01]: Give me a call at eight, eight, and ninety nine chart.

07:18.840 --> 07:23.304 [SPEAKER_04]: On radio, on YouTube, streaming live on at vestalk.com.

07:23.504 --> 07:26.887 [SPEAKER_02]: My question today is about HIV equipment services.

07:27.307 --> 07:32.331 [SPEAKER_04]: And for our podcast subscribers, if you're willing to take the risk, invest talk.

07:32.652 --> 07:38.837 [SPEAKER_04]: If you're okay with that risk, with host and financial advisor, Justin Klein, and that volatility.

07:39.157 --> 07:39.517 [SPEAKER_04]: Go for it.

07:39.778 --> 07:43.501 [SPEAKER_04]: And go host and portfolio manager, Luke Guerrero.

07:43.541 --> 07:47.204 [SPEAKER_04]: This company's fall in like a rock, it's down, fifty-two percent, invest talk.

07:49.345 --> 07:52.105 [SPEAKER_04]: Every body wants a secure financial future.

07:52.366 --> 07:54.046 [SPEAKER_01]: Richard, you have a question about T-O-L.

07:54.266 --> 07:58.948 [SPEAKER_04]: But getting there takes strategy, discipline, and the right information.

07:59.128 --> 08:00.848 [SPEAKER_01]: What are what you think of the price of it?

08:01.028 --> 08:04.289 [SPEAKER_01]: Go to Chris in Maine, looking at I-E-X.

08:04.989 --> 08:06.850 [SPEAKER_04]: Hey Justin, I own it.

08:07.230 --> 08:08.471 [SPEAKER_04]: Just see what you thought of it.

08:08.711 --> 08:12.092 [SPEAKER_04]: Invest talk is made better by listener contributions.

08:12.532 --> 08:14.812 [SPEAKER_04]: So don't forget to call, eight, eight, nine, chart.

08:23.047 --> 08:25.747 [SPEAKER_04]: Have you heard about the new Invest Talk store?

08:26.388 --> 08:30.048 [SPEAKER_04]: That's right, you'll find great merch for the savvy investor.

08:30.548 --> 08:35.069 [SPEAKER_04]: It's all there for you now at InvestTalkStore.com.

08:35.749 --> 08:40.990 [SPEAKER_04]: Luke Guerrero is here now, taking your finance and investment questions live.

08:41.590 --> 08:45.631 [SPEAKER_04]: Call Invest Talk, eight, eight, nine, nine, chart.

08:46.931 --> 08:52.552 [SPEAKER_01]: It's good art from San Jose who has a question about IQVD, you own it, you'll kind of buy it.

08:54.827 --> 08:56.027 [SPEAKER_00]: I'm looking to buy it.

08:57.748 --> 09:05.870 [SPEAKER_00]: It's in the healthcare and I'm thinking about putting it in increasing my portfolio to the four percent in that area.

09:06.331 --> 09:07.971 [SPEAKER_00]: What would you recommend?

09:08.611 --> 09:14.013 [SPEAKER_01]: Okay, let's take a look at IQV which is IQVia Holdings Inc.

09:15.458 --> 09:22.670 [SPEAKER_01]: It is a clinical research services and healthcare data analytics firm, so there are three core segments here, right?

09:22.690 --> 09:27.679 [SPEAKER_01]: They're technology analytics, there are ND solutions, and their contract sales.

09:28.413 --> 09:56.027 [SPEAKER_01]: Now, over the past year, this name is down about twenty five point eight one percent underperforming the sector by about six point seven percent last year and currently underperforming their industry about twenty three point seven percent year to date where they are underwater about seventeen right so the rest of their industry is positive here down in additional one point six five percent today now the reason why well they've had some pretty solid bookings

09:57.483 --> 09:59.665 [SPEAKER_01]: And their backlog growth has been strong as well.

10:00.305 --> 10:09.312 [SPEAKER_01]: But they've had some worsening and slow demand within their R&D solutions group, which makes up the bulk of their business.

10:09.352 --> 10:12.074 [SPEAKER_01]: Growth has been okay with in technology and analytics here.

10:12.534 --> 10:19.439 [SPEAKER_01]: But research and development has been really slowing here as some people start to spend a pair down spending on capex.

10:19.459 --> 10:22.582 [SPEAKER_01]: These companies and these types of companies would otherwise service.

10:23.102 --> 10:24.662 [SPEAKER_01]: And so you see with growth here, right?

10:24.682 --> 10:28.543 [SPEAKER_01]: You go from eleven billion to fifteen billion from twenty nineteen to twenty twenty four.

10:28.563 --> 10:31.224 [SPEAKER_01]: That slowed pretty significantly.

10:31.624 --> 10:35.925 [SPEAKER_01]: Not much growth last year and not much growth going into this upcoming year.

10:36.465 --> 10:42.066 [SPEAKER_01]: Margins that look in pretty solid about as high as they have been over the past five years.

10:42.607 --> 10:52.449 [SPEAKER_01]: But because of this slowing growth and because of the underperformance here, it's now trading closer to where the lowest over the past five years.

10:53.643 --> 10:54.704 [SPEAKER_01]: Now recently, Q-M-M-M-M-M-M.

10:54.724 --> 10:55.644 [SPEAKER_01]: Now recently, Q-M-M-M-M-M-M-M.

10:55.664 --> 10:57.345 [SPEAKER_01]: Now recently, Q-M-M-M-M-M-M-M-M-M.

10:57.365 --> 10:59.366 [SPEAKER_01]: Now recently, Q-M-M-M-M-M-M-M-M-M-M-M.

10:59.386 --> 11:03.228 [SPEAKER_01]: Now recently, Q-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M-M

11:10.152 --> 11:13.114 [SPEAKER_01]: Clinical trial market conditions are not not great.

11:13.535 --> 11:19.439 [SPEAKER_01]: And so this company having fifty-five percent of its revenue deriving from that specific area of its business.

11:20.180 --> 11:24.423 [SPEAKER_01]: Well, that is leading it to have some issues as well.

11:24.443 --> 11:26.464 [SPEAKER_01]: Let's look at its debt picture on top of that, right?

11:26.524 --> 11:28.386 [SPEAKER_01]: Twenty-nine billion dollar market cap company.

11:30.298 --> 11:39.940 [SPEAKER_01]: I'll turn dead about thirteen point two billion net operating cash flow pretty stable free cash flow pretty stable as well over the past couple years.

11:40.420 --> 11:55.363 [SPEAKER_01]: I think just given where the clinical trial market is if you're looking for a health care company specifically one who has already been struggling over the past six months and is likely to continue struggling forward may not be where you want to allocate your

11:56.023 --> 11:58.064 [SPEAKER_01]: a healthcare exposure to.

11:58.424 --> 12:00.484 [SPEAKER_01]: At the same time, relative strength momentum here.

12:00.885 --> 12:06.926 [SPEAKER_01]: It's pretty weak, and the market isn't really signaling from a momentum perspective that there is a turning point from a chart.

12:07.347 --> 12:16.349 [SPEAKER_01]: So I would probably keep this out of my portfolio for now, just given some of the struggles broadly within the sector and with the company specifically.

12:16.769 --> 12:21.751 [SPEAKER_01]: There's IQV holdings, or IQVIA holdings, ticker IQV.

12:24.592 --> 12:24.712 [SPEAKER_01]: Yeah.

12:25.423 --> 12:27.676 [SPEAKER_01]: All right, let's talk about the market today.

12:27.736 --> 12:28.520 [SPEAKER_01]: Thanks for the call art.

12:30.769 --> 12:32.370 [SPEAKER_01]: Let's talk a little bit about the market today.

12:32.390 --> 12:39.236 [SPEAKER_01]: It looks like stocks were lower ending the week a bit lower, though they did finish off of worst levels.

12:39.276 --> 12:41.878 [SPEAKER_01]: The Dow was down about sixty three basis points.

12:42.478 --> 12:45.460 [SPEAKER_01]: S&P five hundred down thirty three basis points.

12:46.141 --> 12:50.504 [SPEAKER_01]: Nas deck down twenty two Russell two thousand down one point two six percent.

12:50.845 --> 12:56.169 [SPEAKER_01]: And all this coming after the S&P Nas deck set fresh record closes on Thursday.

12:57.182 --> 13:00.565 [SPEAKER_01]: Because of today, both indices are slightly lower for the week.

13:00.605 --> 13:05.109 [SPEAKER_01]: The S&P snapping its two straight weekly gain streak.

13:05.569 --> 13:10.033 [SPEAKER_01]: The Nasdaq was positive for the previous three weeks, so that streak broken as well.

13:10.653 --> 13:17.599 [SPEAKER_01]: Looks like underperformers included airlines, casinos, chemicals, copper, homebuilders, apparel, and pharma.

13:18.680 --> 13:31.734 [SPEAKER_01]: Not a lot of outperformers, a lot of the market was read most of the market, if not all the market was read, but precious metal miners, food, energy, crude oil, doing well today, and AMD, and Semis, some of the relative outperformers on the day.

13:33.145 --> 13:39.089 [SPEAKER_01]: Treasuries a bit weaker, the curve steepening, and you see I'm the long end yields up about eight to ten basis points.

13:39.689 --> 13:43.772 [SPEAKER_01]: Dollar index up about twenty with some strength on the end cross.

13:43.832 --> 13:46.013 [SPEAKER_01]: It looks like gold finished up one point two percent.

13:46.273 --> 13:51.056 [SPEAKER_01]: We did mention that some of those precious metal miners were the best performers of the day.

13:52.117 --> 13:57.880 [SPEAKER_01]: And crude oil settled up two point eight percent, recouping those losses we saw.

13:58.280 --> 14:02.143 [SPEAKER_01]: Some of them at least from that to two point seven percent drop yesterday.

14:03.275 --> 14:03.995 [SPEAKER_01]: What was the overhang?

14:04.035 --> 14:06.836 [SPEAKER_01]: Well, you guessed it more talks about tariffs.

14:06.876 --> 14:10.897 [SPEAKER_01]: The president's saying you would hit Canada with a thirty-five percent tariff rate on the first of August.

14:11.478 --> 14:18.840 [SPEAKER_01]: Also talked about a higher baseline tariff of fifteen to twenty percent on most trading partners and said that you would get a tariff letter today.

14:19.300 --> 14:21.861 [SPEAKER_01]: On top of that, you would reports that the recent trade deal of Vietnam.

14:21.981 --> 14:24.782 [SPEAKER_01]: Well, it may not be done at all whatsoever.

14:25.688 --> 14:28.229 [SPEAKER_01]: However, you also got some of the usual chatter.

14:28.569 --> 14:29.509 [SPEAKER_01]: These are just bluster.

14:29.569 --> 14:30.449 [SPEAKER_01]: These are just threats.

14:30.789 --> 14:32.749 [SPEAKER_01]: He was going to back out of these things.

14:33.210 --> 14:38.991 [SPEAKER_01]: You get to a certain point where if the market believes somebody's going to back out and the only reason they do back out is because the market freaks out.

14:39.231 --> 14:40.111 [SPEAKER_01]: The market's not freaking out.

14:40.151 --> 14:41.511 [SPEAKER_01]: Maybe you go through.

14:41.571 --> 14:43.992 [SPEAKER_01]: These are some real risks on the horizon here.

14:45.012 --> 14:54.094 [SPEAKER_01]: Other big story that upward pressure in yields because of fiscal deficit dynamics and also just continued US macro resilience.

14:54.929 --> 14:56.791 [SPEAKER_01]: Pretty quiet though, elsewhere, right?

14:56.831 --> 15:00.274 [SPEAKER_01]: The unofficial start of Q to earnings in Gune CPI.

15:00.815 --> 15:03.958 [SPEAKER_01]: We'll be coming next week, so things start to heat up a little bit.

15:05.341 --> 15:08.964 [SPEAKER_01]: Looking ahead to next week, again, that June CPI will be on Tuesday.

15:09.665 --> 15:17.192 [SPEAKER_01]: Street looking for headline CPI at thirty basis points, month over month in June, pushing the year over year rate to about two point seven percent.

15:17.733 --> 15:25.159 [SPEAKER_01]: And on core, looks like they're looking for about a thirty basis point increase as well, pushing that year over year rate to three percent.

15:25.860 --> 15:37.452 [SPEAKER_01]: CPIs not all that will get retail sales, another high-profile data point on Thursday, while prediliminary University of Michigan Consumer Sentiment for July, caps off the week on Friday.

15:39.134 --> 15:43.538 [SPEAKER_01]: Moving into a break, still to come, my main focus point and more answers to your questions.

15:44.299 --> 15:46.882 [SPEAKER_01]: I encourage you to call now at eight, eight, and ninety nine chart.

16:06.577 --> 16:13.425 [SPEAKER_04]: You've got finance and investment questions, and Luke Guerrero is ready to provide his unbiased answers.

16:13.926 --> 16:18.612 [SPEAKER_04]: Call now or any time, eight, eight, eight, ninety-nine chart.

16:21.403 --> 16:31.548 [SPEAKER_01]: I think we have a pretty important topic today as our main focus point, and that is why, twenty twenty five is a pivotal year potentially for America's budget.

16:32.268 --> 16:39.072 [SPEAKER_01]: Now for quite some time, everyone's been talking about the debt and deficits and what, how large of a problem they are.

16:40.738 --> 16:44.259 [SPEAKER_01]: probably my entire life, probably your entire life as well.

16:45.099 --> 16:49.000 [SPEAKER_01]: And so the question is, well, why does now, why should I take this seriously now?

16:49.440 --> 16:55.341 [SPEAKER_01]: Is it a boy who cried wolf scenario that you're just saying something you've constantly been saying?

16:57.422 --> 17:06.083 [SPEAKER_01]: Jamie Diamond, though, warns of a potential bond market crisis due to the US government's debt, but also in sufficient market liquidity, right?

17:06.144 --> 17:08.104 [SPEAKER_01]: A double pronged issue here.

17:09.075 --> 17:16.338 [SPEAKER_01]: Now, some argue that yields are just returning to the two thousand eight pre pre financial crisis levels, right?

17:16.358 --> 17:25.182 [SPEAKER_01]: We had a decade of historically low interest rates, historically low federal funds rate, a lot of demand for US assets.

17:26.602 --> 17:33.805 [SPEAKER_01]: But the problem here is, right, the twin deficits, your government fiscal deficits and your trade deficits.

17:36.026 --> 17:37.487 [SPEAKER_01]: Now, if you take a look back towards

17:38.781 --> 17:41.684 [SPEAKER_01]: When deficits historically had been high, right?

17:41.724 --> 17:50.071 [SPEAKER_01]: Think of Reagan era large deficits with massive tax cuts, think of clip neck surpluses, think of the post-two thousand eight stimulus driven imbalances.

17:51.012 --> 18:01.002 [SPEAKER_01]: You had in the past situations where bipartisan groups would come together and say, okay, things need to change.

18:02.194 --> 18:21.266 [SPEAKER_01]: But since twenty twenty after the huge amount of injection, five the Trump administration and then continued by the Biden administration, budget deficits have been more than five percent of GDP greater than five percent of GDP and future projections are looking even more elevate.

18:22.106 --> 18:23.067 [SPEAKER_01]: The bill that just passed

18:24.198 --> 18:32.321 [SPEAKER_01]: as a conservative estimate from conservative groups like the Kato Institute suggested it could add four trillion dollars to the deficit and so why do you care?

18:34.662 --> 18:35.502 [SPEAKER_01]: Isn't it just numbers?

18:36.142 --> 18:38.023 [SPEAKER_01]: A trillion here, a trillion there, doesn't even matter.

18:39.543 --> 18:50.087 [SPEAKER_01]: Will the problem with having more and more debt as a person, more and more debt as a government, is when you go out and try and roll that debt over, try and get more loans?

18:51.427 --> 18:52.308 [SPEAKER_01]: People are going to say, oh,

18:53.710 --> 18:57.711 [SPEAKER_01]: You already got a lot to deal with, but we're going to have to charge you a higher interest rate.

18:57.731 --> 18:58.291 [SPEAKER_01]: And if the U.S.

18:58.351 --> 19:08.053 [SPEAKER_01]: government is charging higher interest rates, or being charged higher interest rates, so to will you and I, deficits are a problem because they affect us.

19:10.413 --> 19:21.555 [SPEAKER_01]: If we add four to six trillion to the deficit of the next ten years, which is entirely possible, some people were trapped by those gold and handcuffs, some people were looking to purchase their first homes,

19:22.627 --> 19:26.631 [SPEAKER_01]: may never see interest rates at a reasonable level again.

19:28.032 --> 19:36.599 [SPEAKER_01]: And so because of this investor confidence is eroding a little bit, you're seeing less of a demand for US debt.

19:40.122 --> 19:42.184 [SPEAKER_01]: Tax threats on foreign capital.

19:42.845 --> 19:43.786 [SPEAKER_01]: We talked about it before.

19:43.826 --> 19:47.309 [SPEAKER_01]: It was taken out of the big beautiful bill, but foreign capital.

19:49.303 --> 19:54.106 [SPEAKER_01]: Could in turn tell foreign investors why do I want to be invested in this market?

19:54.146 --> 19:58.029 [SPEAKER_01]: But the bigger problem is there is no political consensus today for fiscal reforms.

19:58.830 --> 20:03.333 [SPEAKER_01]: No matter who's an office, people keep raising the level of spending.

20:05.615 --> 20:10.018 [SPEAKER_01]: And until that changes, the bigger issue is not going to change.

20:11.453 --> 20:19.697 [SPEAKER_01]: The reality is, is in order to get out of this, people are rather policy probably needs to exist such that we cut spending and we raise taxes.

20:19.977 --> 20:22.378 [SPEAKER_01]: Two very unpopular things.

20:23.599 --> 20:28.841 [SPEAKER_01]: And so recent bond market volatility may signal an approaching fiscal reckoning.

20:29.722 --> 20:36.005 [SPEAKER_01]: Echoing the morning, the warning that crises arrive gradually, but then happen suddenly.

20:38.696 --> 20:47.524 [SPEAKER_01]: Alright, it is Friday, and on Fridays we generally take the time to fit in a quick rundown of key benchmark numbers, so let me hit you with that list right now.

20:48.685 --> 20:52.008 [SPEAKER_01]: To your treasure yield was it, three point nine is zero two percent today.

20:52.669 --> 20:59.075 [SPEAKER_01]: Two weeks ago that number was three point seven four four hundred eighty four weeks ago that number was this point six four.

21:00.087 --> 21:03.089 [SPEAKER_01]: The ten-year treasury yield was at four point four zero three percent today.

21:03.469 --> 21:12.134 [SPEAKER_01]: Two weeks back, it was four point two eight seven, forty eight weeks ago, it was three point nine two one, and a hundred and eighty two weeks ago, it was one point seven six two.

21:13.034 --> 21:20.618 [SPEAKER_01]: Gold was priced at three thousand three hundred and fifty nine dollars per ounce that it is an eighty seven dollar increase compared with just two weeks ago.

21:21.579 --> 21:26.722 [SPEAKER_01]: eighty seven weeks back, that number was nineteen thirty five and a hundred and seventy six weeks ago, that number was eighteen oh six.

21:28.045 --> 21:51.178 [SPEAKER_01]: Silver was priced at thirty eight dollars and fifteen cents per ounce a two dollar and twelve sent increased compared with two weeks back seventy four weeks ago that never was twenty two eighty and look in all the way back hundred sixty eight weeks silver was twenty three ninety four oil selling for sixty eight twenty nine per barrel of it a two dollar and seventy four cent increase over two weeks

21:52.369 --> 21:58.192 [SPEAKER_01]: Forty two weeks ago that number was sixty seven seventy nine and eighty four weeks back the numbers seventy four thirty.

21:59.653 --> 22:07.217 [SPEAKER_01]: The national average for a gallon of regular gasoline is a three dollars and sixteen cents per gallon a four cent decrease compared with two weeks back.

22:07.977 --> 22:12.620 [SPEAKER_01]: Hundred ten weeks ago that was three fifty six and hundred fifty eight weeks back that was four twenty five.

22:14.107 --> 22:23.496 [SPEAKER_01]: In California, it was averaging four or fifty-three per gallon, eight cents lower than two weeks back, though it was four or sixty-seven when I filled up at Costco.

22:24.657 --> 22:29.481 [SPEAKER_01]: Eight-eight weeks back, that number was five, thirty-two, and hundred and sixty-four weeks back, that number was five, eighty-seven.

22:30.302 --> 22:39.611 [SPEAKER_01]: For comparison in Florida, gas is averaging two dollars and ninety-seven cents per gallon today, that is one dollar and fifty-six cents less than gas in California.

22:40.935 --> 22:47.221 [SPEAKER_01]: On the next investment top, we'll look into this story, Trump threatens twenty-five percent tariff on Apple iPhones, not made in the United States.

22:47.922 --> 22:51.966 [SPEAKER_01]: In an effort to boost American manufacturing, the president has warned Apple to shift production.

22:51.986 --> 22:54.168 [SPEAKER_01]: The state side are face this penalty.

22:54.729 --> 22:58.853 [SPEAKER_01]: That's Monday, but for now, I'm Lou Guerrera ready to take your calls at eighty-eight ninety-nine, sure.

23:06.480 --> 23:14.046 [SPEAKER_04]: Invest dog is here to help, and when you download the free Invest dog podcasts, don't forget to rate and review.

23:14.707 --> 23:18.650 [SPEAKER_04]: The phone lines are open, eight, eight, nine, nine chart.

23:19.851 --> 23:28.078 [SPEAKER_06]: Hello, this is Dan from Walla Creek, and it's sure to know why copper in general, and so they're in copper corporation SCCO.

23:28.598 --> 23:31.120 [SPEAKER_06]: I've been taking it on the chin in the last couple of days.

23:31.680 --> 23:33.142 [SPEAKER_06]: The cord of hearing your answer on the air.

23:33.262 --> 23:33.502 [SPEAKER_06]: Thank you.

23:36.284 --> 23:43.763 [SPEAKER_01]: Alrighty, southern copper, ticker SCCO is one of the world's largest integrated copper producers.

23:45.836 --> 23:47.337 [SPEAKER_01]: And that's not the only thing they produce, right?

23:47.357 --> 23:48.718 [SPEAKER_01]: They operate in Peruvian Mexico.

23:48.758 --> 23:52.439 [SPEAKER_01]: They produce silver, zinc, and other byproducts.

23:53.480 --> 23:57.082 [SPEAKER_01]: But essentially, their big business is copper, hence the name.

23:57.582 --> 24:04.085 [SPEAKER_01]: So geographically speaking, most of their revenue actually is derived external to the United States, right?

24:04.105 --> 24:08.167 [SPEAKER_01]: They have their United States segment, they have their Mexican segments, Switzerland, etc.

24:09.568 --> 24:20.329 [SPEAKER_01]: Now over the past fifty two weeks it's down about eight point seven three percent but in the past three months it's up twenty one point two five percent the volatility of this name

24:22.480 --> 24:30.367 [SPEAKER_01]: The volatility of this name is going to more so than anything tied towards the volatility of the industry.

24:31.127 --> 24:49.043 [SPEAKER_01]: Now in twenty twenty five again they've had a notable fifteen point nine percent uh... gain i'm sorry thirteen point four three percent gain after the past couple days and a lot has been driven by strong copper price trends and increase mining output which is very company specific we think

24:50.609 --> 24:53.333 [SPEAKER_01]: as we do on this day and think copper exposure is important, right?

24:53.353 --> 25:04.107 [SPEAKER_01]: Historically speaking, Dr. Copper was a harbinger for economic output, but copper is also a critical critical metal in the green energy sector.

25:05.412 --> 25:15.458 [SPEAKER_01]: And so demand globally, over the next ten years, is likely to be boosted regardless of internal US economic policy.

25:15.498 --> 25:23.783 [SPEAKER_01]: And so for us, being exposed to copper as a long term play, certainly is something that would be wise.

25:24.604 --> 25:33.349 [SPEAKER_01]: Right now it's trading at about its average of forward looking price earnings, about twenty two point one times, forward looking price to earnings.

25:35.429 --> 25:37.271 [SPEAKER_01]: And so we continue to hold this name, right?

25:37.291 --> 25:42.237 [SPEAKER_01]: We're getting earnings again on the twenty-third of July for the next quarter.

25:42.257 --> 25:53.689 [SPEAKER_01]: I just think it's important to know that, you know, there are companies you invest in, there are themes you invest in on different timeframes, and understand that for certain ones like ones that are tied to the performance of a commodity,

25:54.430 --> 25:59.032 [SPEAKER_01]: You need to be able to stomach that volatility over the short term for that investment.

25:59.352 --> 26:01.854 [SPEAKER_01]: And so for us, we will continue to hold Southern Copper.

26:01.874 --> 26:05.035 [SPEAKER_01]: We think it's a great name if you want to be exposed to the Copper industry.

26:05.075 --> 26:08.757 [SPEAKER_01]: That is Southern Copper Corporation, ticker, SCCO.

26:10.678 --> 26:13.880 [SPEAKER_01]: All right, let's make it two and a row from eight, eight and ninety nine chart.

26:14.200 --> 26:18.522 [SPEAKER_07]: My question is today, I'm interested in purchasing an ETF.

26:19.289 --> 26:26.396 [SPEAKER_07]: buying into it, the symbol is V as a vector, G as a good, T as a tongue.

26:26.957 --> 26:32.022 [SPEAKER_07]: It is a Vanguard informational technology ETS.

26:32.642 --> 26:34.284 [SPEAKER_07]: Is this a good time to get in?

26:35.025 --> 26:38.268 [SPEAKER_07]: It is, but maybe give us a little guidance on that.

26:39.129 --> 26:42.172 [SPEAKER_07]: Thank you very much, and I'll be listening forward on the podcast.

26:44.417 --> 26:51.102 [SPEAKER_01]: Ticker VGT is the Vanguard Information Technology ETF.

26:51.242 --> 26:57.186 [SPEAKER_01]: It is a Vanguard fund and Vanguard is known for two things, being passive and being cheap.

26:57.626 --> 26:59.007 [SPEAKER_01]: And this is both of those.

26:59.547 --> 27:05.812 [SPEAKER_01]: It is a passive-diverse-exposed fund for the information technology stocks in the US.

27:07.175 --> 27:09.216 [SPEAKER_01]: But it still has a lot of concentration.

27:09.376 --> 27:09.616 [SPEAKER_01]: Why?

27:09.736 --> 27:13.197 [SPEAKER_01]: Because there's some pretty darn large technology stocks.

27:13.777 --> 27:16.497 [SPEAKER_01]: And so, fifteen point seven percent of it is going to be in video.

27:16.937 --> 27:19.798 [SPEAKER_01]: Fifteen point one one percent of it is going to be Microsoft.

27:19.878 --> 27:22.399 [SPEAKER_01]: Fourteen point one eight percent of it is going to be Apple.

27:22.859 --> 27:26.560 [SPEAKER_01]: And so, in spite of holding to three hundred and twenty one names, so named diversity,

27:27.240 --> 27:34.546 [SPEAKER_01]: The top ten make up about sixty percent of the portfolio and the top three make up about forty five percent.

27:34.586 --> 27:45.575 [SPEAKER_01]: So understand the concentration here is concentration you're going to get not because of any active bet, but because this is just a passively invested market cap weighted portfolio.

27:46.635 --> 27:51.699 [SPEAKER_01]: Now my guess is it rebalances quarterly or annually.

27:51.719 --> 27:52.360 [SPEAKER_01]: Let's see.

27:55.030 --> 28:04.476 [SPEAKER_01]: difficult to say, but, you know, it is the other thing that I mentioned, which is cheap, about nine basis points.

28:05.396 --> 28:21.326 [SPEAKER_01]: And so, you know, if you were trying to get this broad exposure to the tech sector, or any sector in general, and you're not trying to make active bets, you just want to ride the market cap weighted theme in a cost effective way,

28:22.691 --> 28:29.337 [SPEAKER_01]: Well, VGT, or Vanguard's sector funds in general are a pretty solid way to do it.

28:30.318 --> 28:34.181 [SPEAKER_01]: Don't think this is gonna make some crazy active moves that is a passively managed fund.

28:34.561 --> 28:37.224 [SPEAKER_01]: If that's what you're looking for, VGT is a good way to go.

28:38.064 --> 28:40.667 [SPEAKER_01]: That is the Vanguard Information Technology ETF.

28:42.748 --> 28:49.494 [SPEAKER_01]: All right, it looks like we have a live call, another live call, James from New York, who you're asking about, CCJ, do you own it?

28:49.514 --> 28:50.075 [SPEAKER_01]: You're looking to buy it.

28:52.667 --> 28:54.409 [SPEAKER_05]: I'm looking to buy it on a pullback.

28:55.070 --> 28:55.370 [SPEAKER_01]: Okay.

28:55.390 --> 28:59.214 [SPEAKER_05]: I want to know what a sensible point to enter might be at this point.

29:00.416 --> 29:01.236 [SPEAKER_01]: That's a great question.

29:01.877 --> 29:08.184 [SPEAKER_01]: We have held CCJ for quite a long time in a couple of our strategies and it's done pretty well, right?

29:08.204 --> 29:10.466 [SPEAKER_01]: You're to date up forty one point four seven percent.

29:11.828 --> 29:34.016 [SPEAKER_01]: Three month up, it's seventy eight percent past fifty two weeks up, thirty five point three three percent and with the exception of twenty twenty four, it's outperform the S&P five hundred by upwards of thirty percent most of years right big app performance of twenty twenty three up sixty five percent higher right up ninety percent for the full year this year outperforming by thirty five percent as well.

29:34.837 --> 29:37.297 [SPEAKER_01]: And the reason being is just massive massive demand.

29:39.438 --> 29:44.065 [SPEAKER_01]: Right, they had that thirty five plus percent rally here today, forty one percent now.

29:44.966 --> 29:54.861 [SPEAKER_01]: Really has been driven by the rising demand for uranium amidst a lot of geopolitical tensions, you know, suspension of

29:55.842 --> 30:01.585 [SPEAKER_01]: certain stockpiles within Kazakhstan and just growing nuclear energy commitments globally.

30:01.625 --> 30:10.130 [SPEAKER_01]: It is such a powerful technology for energy generation that most countries want it as part of their energy load.

30:10.590 --> 30:18.775 [SPEAKER_01]: And so as we see over the next decade, energy demand going to exponentially increase, not from people, but from businesses, right?

30:18.795 --> 30:21.837 [SPEAKER_01]: The energy intensive cost of running all of these models

30:23.300 --> 30:25.382 [SPEAKER_01]: CCJ stands to do pretty well.

30:26.384 --> 30:32.831 [SPEAKER_01]: And, you know, because that, it's trading at fifty three point three times for looking earnings, which looks really, really expensive.

30:32.871 --> 30:39.739 [SPEAKER_01]: But it's like, train about six point eight times, price to book value only thirteen times sales, which is at the upper end of its five year range.

30:39.759 --> 30:41.020 [SPEAKER_01]: I mean, it's an expensive name.

30:41.341 --> 30:42.202 [SPEAKER_01]: I certainly get that.

30:43.283 --> 30:48.546 [SPEAKER_01]: You know, I think one potential catalyst here again is the power of deregulation, right?

30:48.566 --> 30:50.547 [SPEAKER_01]: There's a lot of regulation around the nuclear industry.

30:50.587 --> 30:53.628 [SPEAKER_01]: There's a lot of regulation around business in general in the United States.

30:54.109 --> 31:04.554 [SPEAKER_01]: And so the question is does this administration try and fully unleash nuclear energy and continue to deregulate deregulate deregulate and that could add to another like higher here?

31:05.014 --> 31:07.556 [SPEAKER_01]: And so the question is what is a reasonable price to get into?

31:08.416 --> 31:25.359 [SPEAKER_01]: you know we have trimmed it a little bit but we haven't really reduced it beyond the weight that we want to hold it in the portfolio because we think those upward catalysts albeit it can be a volatile name are good reason to hold it even at these prices and so for me you know I would probably

31:26.750 --> 31:29.932 [SPEAKER_01]: You know, you see today, it's up two point six five percent when the rest of the market is red.

31:30.633 --> 31:42.200 [SPEAKER_01]: I might even want to consider just slowly DCing into this name, because like any other energy name, these catalysts can be so rapid, they can be so quick, but also the long term thesis holds, right?

31:42.220 --> 31:46.603 [SPEAKER_01]: The demand is going to be there two, three, five, ten years outward.

31:47.123 --> 31:47.744 [SPEAKER_01]: Great company.

31:48.124 --> 31:52.247 [SPEAKER_01]: We hold it for our clients that is Camico Corporation, ticker CCJ.

31:54.739 --> 31:58.780 [SPEAKER_01]: All right, let's talk about something that we never talk about.

31:59.300 --> 32:00.060 [SPEAKER_01]: That is tariffs.

32:01.480 --> 32:08.361 [SPEAKER_01]: And that's because new tariffs were announced by the President, a thirty-five percent tariff on Canada, and a fifty percent tariff on Brazil.

32:08.381 --> 32:22.864 [SPEAKER_01]: And we all know those things, but what we are now seeing from comments from Austin Goalsby, the Chicago Fed President, is, well, this may add a little bit more merceness to the tariff or rather to the interest rate picture.

32:24.203 --> 32:28.405 [SPEAKER_01]: And as we get scare for later price spikes, could reignite inflation fears.

32:28.485 --> 32:32.888 [SPEAKER_01]: Canada is a big trading partner for the United States.

32:34.378 --> 32:45.009 [SPEAKER_01]: Now, despite inflation data, year to date, showing cooling, right, two point three percent year over year through May, well, that could frankly turn the other way.

32:45.029 --> 32:48.132 [SPEAKER_01]: And could turn the other way in an unsustainable way.

32:48.192 --> 32:57.961 [SPEAKER_01]: The Fed has thus far been on a path to cut rates, been hesitant hoping to get through the summer to see the impact of trade policy.

32:59.306 --> 33:01.647 [SPEAKER_01]: But what happens if we keep kicking the can down the road?

33:01.688 --> 33:06.511 [SPEAKER_01]: The impact comes later and later and does the Fed continue to pause?

33:06.531 --> 33:18.878 [SPEAKER_01]: It's the uncertainty that stems from whether or not these tariffs are going to be one-time price hikes or prolonged inflationary events, sparking retaliation that has been influencing the Fed's response.

33:19.759 --> 33:27.684 [SPEAKER_01]: And as we all know that these counter to the desires of the President, Trump is in very vocal, had a lot of criticism about Powell.

33:29.037 --> 33:30.358 [SPEAKER_01]: He's added a lot of political pressure.

33:30.378 --> 33:45.872 [SPEAKER_01]: There was news out seeing in the Wall Street Journal today that the White House may be looking at using the renovation at the Fed claiming that Jerome Powell was either lying or mismanaged it to drum up cause for him to be fired.

33:45.892 --> 33:47.113 [SPEAKER_01]: Now the problem is, right?

33:47.714 --> 33:49.956 [SPEAKER_01]: It's not just Jerome Powell that's keeping rates steady.

33:51.233 --> 33:55.256 [SPEAKER_01]: It's an entire governing board that votes to keep rates steady.

33:55.276 --> 34:02.401 [SPEAKER_01]: And now the chair does have a lot of power over them, but it takes more than just one person's vote to make moves.

34:02.941 --> 34:17.811 [SPEAKER_01]: And so with that unknown inflationary impulse potentially on the horizon, and with the market doing well, and with the fiscal stress that has just been introduced with the big beautiful built, the amount of spending, and with unemployment low,

34:18.905 --> 34:19.926 [SPEAKER_01]: The economy's stable.

34:19.946 --> 34:26.449 [SPEAKER_01]: It's not really seen, but doesn't really seem vulnerable to new shocks such that we need to cut immediately.

34:28.430 --> 34:29.011 [SPEAKER_01]: That's for now.

34:29.891 --> 34:32.793 [SPEAKER_01]: It'll be interesting to see how the picture changes in Met.

34:33.673 --> 34:36.835 [SPEAKER_01]: Jerome Powell's term is up in May, twenty twenty six.

34:36.875 --> 34:45.580 [SPEAKER_01]: And I don't imagine the president is going to renominate him given the nicknames that he has for him and his general disagreement with his policies.

34:46.698 --> 34:52.300 [SPEAKER_01]: And so the question is, what happens next year if you get a best-intera Waller has it in there?

34:52.320 --> 34:53.781 [SPEAKER_01]: What does that mean for rates?

34:53.801 --> 35:00.504 [SPEAKER_01]: What does that mean for the stability of the financial system, for the inflationary effects?

35:02.864 --> 35:05.005 [SPEAKER_01]: As always though, right, the other governor's kind of have his back.

35:05.365 --> 35:13.969 [SPEAKER_01]: Gooseby, President Chicago Fed, emphasize the importance of Fed independence, warning against letting political influence affect monetary decisions.

35:16.733 --> 35:23.035 [SPEAKER_01]: Now I want to briefly mention the newest KPP premium newsletter, which would be distributed tomorrow, which is Saturday.

35:23.795 --> 35:29.676 [SPEAKER_01]: This week, in the KPP Insight section, we'll be talking about manufacturing.

35:31.297 --> 35:42.240 [SPEAKER_01]: In the stock section, we talked about a leader in the chip semi-conductor industry, as well as a global leader in the tech IT information services field.

35:43.179 --> 35:51.101 [SPEAKER_01]: And in the portfolio section management section, we discussed technical analysis and some of the indicators that we as investors can use.

35:52.241 --> 35:55.782 [SPEAKER_01]: If you're interested in learning more, visit us at www.investalk.com and subscribe.

35:55.802 --> 35:59.023 [SPEAKER_01]: The newsletter will come to your inbox on Saturday afternoon.

36:00.823 --> 36:04.684 [SPEAKER_01]: Right, let's keep things moving and see if we can squeeze into one more answer before the break.

36:10.192 --> 36:28.160 [SPEAKER_02]: products and building materials distribution company was kind of like in what I saw in regards to some of the things that they're doing and was wondering what you thought about the company really appreciate your answer and I'll be looking forward to being there on the podcast.

36:28.180 --> 36:28.380 [SPEAKER_02]: Thanks.

36:29.949 --> 36:38.392 [SPEAKER_01]: Boisey Cascade Company is a manufacturer and distributor of engineered wood products that's ticker is BCC.

36:39.493 --> 36:54.839 [SPEAKER_01]: As the name suggests, headquarters in Boisey, Idaho has about seven, five hundred employees, and year-to-date has been a really, really struggling down, twenty three point three percent underperforming its industry by thirteen point eight percent, so from a momentum perspective, not doing too hot.

36:55.600 --> 36:59.143 [SPEAKER_01]: It's about a three point five billion dollar market cap company.

36:59.183 --> 37:05.027 [SPEAKER_01]: It's got five hundred and sixteen million dollars a debt and free cash flow has been falling.

37:06.428 --> 37:21.719 [SPEAKER_01]: As has net operating cash flow for about the past six years in that same time margins collapsing a little bit from a high twenty twenty two and there's a large demand for finished wood products of ten point two percent down to three point six percent.

37:23.060 --> 37:23.480 [SPEAKER_01]: This year.

37:26.117 --> 37:35.201 [SPEAKER_01]: And so, you know, what generally is going on with this company, right?

37:35.361 --> 37:37.942 [SPEAKER_01]: Is that construction demand and housing starts?

37:38.543 --> 37:41.164 [SPEAKER_01]: Haven't really picked up that much.

37:42.024 --> 37:45.106 [SPEAKER_01]: You know, you see this huge revenue growth coming out of the pandemic.

37:46.026 --> 37:48.887 [SPEAKER_01]: For twenty nineteen to twenty twenty revenue nearly doubled.

37:50.408 --> 37:54.470 [SPEAKER_01]: Since then, it dropped off and it certainly has not recovered and so while margins are compressing,

37:57.065 --> 38:01.029 [SPEAKER_01]: In spite of debt staying the same, revenue is falling.

38:01.850 --> 38:06.355 [SPEAKER_01]: And the golden rule of business is you don't want those numbers to go down.

38:07.957 --> 38:13.483 [SPEAKER_01]: And with the market seeing okay, tariffs on imported wood, tariffs on input costs.

38:14.737 --> 38:18.060 [SPEAKER_01]: lower construction demand because there's fewer people that want to get out of their homes.

38:18.100 --> 38:23.204 [SPEAKER_01]: Remember that even though interest rates are mortgage rates are closer to seven percent now.

38:23.925 --> 38:26.347 [SPEAKER_01]: Most people are still locked into their pre-pandemic mortgages.

38:26.768 --> 38:32.533 [SPEAKER_01]: And so why would you leave your golden handcuffs and buy a new home when it becomes so much more expensive?

38:34.234 --> 38:40.860 [SPEAKER_01]: That's why this name is moved closer to its ten closer to its average for looking price ratings about ten point two percent.

38:42.706 --> 38:51.849 [SPEAKER_01]: Just down about two point two five percent today, maybe because of the announced tariff on Canada.

38:52.349 --> 38:55.330 [SPEAKER_01]: Look at any, if you have any other suppliers or Canadian, just quite look like it.

38:56.530 --> 38:57.430 [SPEAKER_01]: But either way, right?

38:57.710 --> 39:06.553 [SPEAKER_01]: Being a building material sector name, when wood products plywood lumber can become more expensive because of imported lumber, when demand is lower because people can't afford houses.

39:07.615 --> 39:11.796 [SPEAKER_01]: really makes it difficult in this environment for this company to succeed.

39:11.836 --> 39:21.778 [SPEAKER_01]: And so I think within, you know, this specific sector, it's a little bit risky for me given the overall macro picture.

39:22.198 --> 39:23.499 [SPEAKER_01]: That is a Boise Cascade.

39:23.559 --> 39:24.459 [SPEAKER_01]: Take your BCC.

39:24.959 --> 39:25.459 [SPEAKER_01]: Thanks to the call.

39:26.960 --> 39:27.640 [SPEAKER_01]: This is the best talk.

39:27.740 --> 39:28.300 [SPEAKER_01]: I'm Lou Guerrero.

39:28.340 --> 39:31.621 [SPEAKER_01]: We have one ball here to help you achieve your financial freedom.

39:32.481 --> 39:36.622 [SPEAKER_01]: And if you want to spend time helping expand those we reach, tell a friend to listen to this show.

39:38.096 --> 39:43.331 [SPEAKER_01]: Our work continues after this break, our final break, so get your questions and now at eight, eight, eight, ninety nine chart.

39:56.645 --> 40:04.648 [SPEAKER_04]: The weekend is here or almost here, but you've got financial investment questions, so step up and call in.

40:05.229 --> 40:05.969 [SPEAKER_04]: Invest talk.

40:12.957 --> 40:19.800 [SPEAKER_01]: We have a yet gone to one, so let's tackle a question from the Invest talk YouTube channel question bank.

40:19.880 --> 40:21.801 [SPEAKER_01]: This one from Tango Panzer.

40:22.461 --> 40:26.984 [SPEAKER_01]: On ticker ENVA, it's as I came across ENVA stock recently.

40:27.004 --> 40:31.966 [SPEAKER_01]: If that looked very enticing, do you think it's a good bye?

40:33.551 --> 40:48.698 [SPEAKER_01]: The NVAs in Nova Corporation, it's a FinTech firm, ledger leveraging its Colossus machine learning platform to offer online financial services, installment loans, lots of credits, while business financing and money transfers to non-prime consumers.

40:52.119 --> 40:58.062 [SPEAKER_01]: In Brazil, they also operate under the brand's cash net USA, net credit on deck, simplic, and pin-gia.

40:59.170 --> 41:01.335 [SPEAKER_01]: Nineteate percent of its revenue comes in the United States.

41:01.896 --> 41:04.322 [SPEAKER_01]: Two percent comes from Brazil.

41:04.863 --> 41:05.865 [SPEAKER_01]: Growth pretty solid.

41:05.945 --> 41:07.529 [SPEAKER_01]: Seventeen point seven percent.

41:08.515 --> 41:15.240 [SPEAKER_01]: on an annualized basis over the past six years margins, for fin tech name pretty low in the past couple years, right?

41:15.260 --> 41:18.102 [SPEAKER_01]: They had thirty four percent net margin in the pandemic.

41:18.382 --> 41:20.384 [SPEAKER_01]: Let's fall into about eight point nine percent now.

41:21.245 --> 41:24.307 [SPEAKER_01]: So it looks like a lot of it is coming from their interest in taxes, right?

41:24.347 --> 41:29.951 [SPEAKER_01]: Because you see that they're EBITDA and EBIT pretty consistent over the past three, four years.

41:30.291 --> 41:32.933 [SPEAKER_01]: They drop off this year and so as expected.

41:33.874 --> 41:40.401 [SPEAKER_01]: Well, they took on a bit more debt in the past couple years, from one point four billion in twenty twenty one, now at three point five billion now.

41:41.182 --> 41:48.671 [SPEAKER_01]: It is a three point two billion market cap company, meaning that the debt on this company exceeds the their market cap.

41:50.412 --> 41:52.955 [SPEAKER_01]: The same time they're buying back shares, which is certainly good.

41:53.878 --> 41:58.702 [SPEAKER_01]: in spite of their profitability falling cash flow looks to be improved as well.

41:59.302 --> 42:06.247 [SPEAKER_01]: From a moment perspective, they were ranging for a while in the ninety to a hundred before they broke out a little bit ago.

42:06.728 --> 42:11.611 [SPEAKER_01]: And one of the reasons why is accelerating loan origination and revenue growth, right?

42:11.651 --> 42:17.035 [SPEAKER_01]: They had a huge demand for consumer and small business lending.

42:17.716 --> 42:19.097 [SPEAKER_01]: But I get a little scared.

42:20.268 --> 42:24.429 [SPEAKER_01]: Anytime, I read the words non-prime.

42:26.570 --> 42:33.372 [SPEAKER_01]: And so when you have non-prime and underserved businesses, you have the potential for credit stress.

42:35.232 --> 42:42.114 [SPEAKER_01]: And so all those companies performing well up, seventy-five percent of the past fifty-two weeks in economic, downtime, it can be pretty risky.

42:42.814 --> 42:46.715 [SPEAKER_01]: And it's trading about at its high of the past five, six years.

42:46.775 --> 42:49.496 [SPEAKER_01]: So, strong run up, very strong run up.

42:50.882 --> 42:59.972 [SPEAKER_01]: If you want to invest in a name like this that has heavy debt, the market is saying is worth too much, because there's about ten percent short interest to understand the huge risks should things turn.

43:00.292 --> 43:02.374 [SPEAKER_01]: That is in Nova International to get EMVA.

43:04.917 --> 43:08.301 [SPEAKER_01]: Last thing I want to talk about today is risks of ETFs, right?

43:08.421 --> 43:11.084 [SPEAKER_01]: ETFs are increasingly narrowing.

43:12.183 --> 43:38.161 [SPEAKER_01]: The typical fund holds a hundred and twenty three stocks in twenty twenty five when in nineteen ninety eight the average ETF held fifteen or five hundred and three stocks and that's because new ETFs are focusing on these niche themes or even being single stock ETFs there are so many ETFs out there that are single stock leverage ETFs that try to amplify the daily returns or losses of one stock and so people who treat

43:39.594 --> 43:43.578 [SPEAKER_01]: Investing, more like gambling, have been flocking to these things.

43:44.980 --> 43:55.271 [SPEAKER_01]: But the problem is, is the average stock, suffers an eighty five percent, sorry, eighty one percent max drawdown, historically, and most never recover.

43:55.971 --> 43:59.075 [SPEAKER_01]: And so narrow ETFs do not protect against this risk.

44:01.329 --> 44:03.330 [SPEAKER_01]: Fundishers, though, they love these narrow ETFs.

44:03.550 --> 44:04.830 [SPEAKER_01]: They love these leverage ETFs.

44:05.030 --> 44:08.331 [SPEAKER_01]: It is so little work, and they can charge such higher fees.

44:08.911 --> 44:14.253 [SPEAKER_01]: And when retail investors are chasing this excitement, and there's a market for it, they're just going to continue to do that.

44:15.513 --> 44:25.036 [SPEAKER_01]: Fematic ETFs, like solar cannabis, they often lose seventy to ninety percent in downturns, yet people are still there.

44:26.237 --> 44:30.018 [SPEAKER_01]: And so if this describes you, if you want to be highly concentrated,

44:31.069 --> 44:35.771 [SPEAKER_01]: If you want to be highly levered, understand the risks.

44:37.712 --> 44:41.553 [SPEAKER_01]: Understand that you should probably not allocate more than five percent of your portfolio to it.

44:41.993 --> 44:45.455 [SPEAKER_01]: Understand that owning a quirky ETF doesn't make you diversified.

44:45.475 --> 44:50.877 [SPEAKER_01]: It makes you the exact opposite, exposing you to risks you weren't expecting.

44:53.358 --> 44:57.120 [SPEAKER_01]: I'm Lou Guerrero, this completes another Investock program just in a night.

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