00:04.201 --> 00:12.925 [SPEAKER_03]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk.

00:13.566 --> 00:15.927 [SPEAKER_03]: Independent Thinking, shared success.

00:17.968 --> 00:26.752 [SPEAKER_03]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

00:27.352 --> 00:32.035 [SPEAKER_03]: Here is KPP Financial Portfolio Manager, Luke Guerrero.

00:34.430 --> 00:39.112 [SPEAKER_01]: Welcome back everybody to another episode of Invest Talk.

00:39.792 --> 00:47.174 [SPEAKER_01]: I will be your host today, Luke Guerrero, and today's Wednesday, July, sixteenth, twenty, twenty, five.

00:47.574 --> 00:49.695 [SPEAKER_01]: We are officially, over the hump.

00:50.475 --> 01:02.440 [SPEAKER_01]: We are officially more than halfway through the month of July, more than halfway through the first month of the second half of the year, and more than halfway through the third quarter of twenty, twenty, five.

01:02.500 --> 01:03.520 [SPEAKER_01]: And things are moving fast.

01:04.612 --> 01:07.353 [SPEAKER_01]: Things are always moving quickly around us.

01:07.533 --> 01:12.315 [SPEAKER_01]: You saw a whip side a day in the market because of changing narratives, changing news.

01:13.396 --> 01:21.059 [SPEAKER_01]: And so, another example of the power of not overreacting, reacting but not overreacting.

01:22.920 --> 01:32.344 [SPEAKER_01]: And that's kind of our job here at Invest Talk, as I see it, is to help you understand how to decipher what is going on around you so that you can make informed investment decisions.

01:34.247 --> 01:42.854 [SPEAKER_01]: To that end, as always, we will bring you a mixture of educational, educational, that it's an actionable material.

01:43.275 --> 01:54.284 [SPEAKER_01]: We have some very important stories for you today, but most importantly, the most important thing is what is on your mind?

01:55.545 --> 02:02.211 [SPEAKER_01]: Through your finance and investment questions that you leave via voicemail over there on our YouTube, or

02:04.135 --> 02:05.636 [SPEAKER_01]: live throughout the show.

02:08.538 --> 02:12.581 [SPEAKER_01]: Now, just a bit, we will go over those show topics that I have for you today.

02:12.601 --> 02:18.205 [SPEAKER_01]: We will run down what happened in the market, but first, let's tackle this call or question.

02:18.766 --> 02:20.067 [SPEAKER_08]: This is art from Tucson.

02:20.247 --> 02:23.689 [SPEAKER_08]: I'm calling about a company, bath and body works.

02:24.050 --> 02:24.230 [SPEAKER_08]: Inc.

02:24.930 --> 02:26.852 [SPEAKER_08]: DBWI.

02:27.512 --> 02:28.533 [SPEAKER_08]: The stock's way down.

02:29.557 --> 02:42.886 [SPEAKER_08]: And I'm wondering if you see any value in this brand, in this company, in a stock, and if this would be a good time to buy, or if I should avoid it all together, and I'll listen on the podcast for your answer.

02:43.206 --> 02:45.568 [SPEAKER_08]: Thanks for everything you guys do for us.

02:48.170 --> 02:49.711 [SPEAKER_01]: Bath and body works.

02:51.687 --> 02:53.408 [SPEAKER_01]: I believe they sell candles.

02:54.168 --> 03:01.511 [SPEAKER_01]: I know they do a whole lot more than that, but I think my first interaction with his company was my mom loved buying those candles when I was a kid.

03:02.131 --> 03:06.353 [SPEAKER_01]: Now this company is fairly large, right?

03:06.673 --> 03:12.235 [SPEAKER_01]: It's a six point six billion dollar market cab company, but it's been struggling.

03:13.225 --> 03:22.712 [SPEAKER_01]: Not just over the past year, but specifically year to date, down over twenty percent since the beginning of the year.

03:23.613 --> 03:30.519 [SPEAKER_01]: The reason why, well, a big consumer spending pullback with respect to discretionary spending.

03:31.139 --> 03:33.200 [SPEAKER_01]: You see it in beauty product companies.

03:33.220 --> 03:47.527 [SPEAKER_01]: You see it in a lot of these retailers that, well, these are the types of products that you can pass up on your candles, your soaps, your lotions, your sanitizers, home fragrances, the types of things that you can pair back spending when it is necessary.

03:48.347 --> 03:57.912 [SPEAKER_01]: And so with sentiment coming down, with forward-looking projections of spending coming down, their guidance has trended downward as well.

03:58.552 --> 03:58.973 [SPEAKER_01]: Revenue

03:59.868 --> 04:03.711 [SPEAKER_01]: Looking worse than they thought, just one year ago.

04:04.812 --> 04:09.816 [SPEAKER_01]: Comp sales, an issue, input costs an issue on the back of potential tariff disruptions.

04:10.617 --> 04:15.421 [SPEAKER_01]: Margins headed in the opposite direction of where you'd like to see as well, right?

04:15.441 --> 04:25.950 [SPEAKER_01]: They're net margin down from eleven point eight percent, ten point nine percent, and now projected to be nine point nine percent at the end of their fiscal year, which ends next January.

04:27.571 --> 04:27.812 [SPEAKER_01]: But

04:29.818 --> 04:33.941 [SPEAKER_01]: If you look at the company, it has a decent amount of debt on its balance sheet as well.

04:34.141 --> 04:38.004 [SPEAKER_01]: So it's not just the cyclical nature of what is going on that is affecting this company.

04:38.684 --> 04:40.826 [SPEAKER_01]: It's got about five billion dollars of debt.

04:40.866 --> 04:42.447 [SPEAKER_01]: It's cash flow is falling.

04:43.168 --> 04:49.092 [SPEAKER_01]: It does pay a solid dividend yield that is floating higher than it has been over the past four years.

04:50.113 --> 04:54.336 [SPEAKER_01]: But regardless, the question is, is this a solid company to buy right net?

04:55.536 --> 05:06.486 [SPEAKER_01]: And with what we saw out of CPI, with what you see with the read through into PPI, which we'll talk about in a little bit, cosurizing, cosurizing.

05:07.587 --> 05:12.151 [SPEAKER_01]: And so the projection of consumer spending less, that could certainly hold.

05:12.611 --> 05:18.437 [SPEAKER_01]: Now, if you're in this for a long-term hold, this could be a good way to pick up some shares here, right?

05:18.477 --> 05:20.538 [SPEAKER_01]: Training at eight point six times forward looking earnings.

05:21.382 --> 05:22.422 [SPEAKER_01]: five year average of twelve.

05:23.203 --> 05:30.224 [SPEAKER_01]: And so, you know, even though it has a bunch of debt on its balance sheet from a liquidity perspective, it looks relatively stable.

05:31.585 --> 05:35.526 [SPEAKER_01]: I just don't know if in the short term, you're gonna see a turnaround in the market price.

05:35.546 --> 05:42.968 [SPEAKER_01]: So for now, I'd keep it on my watch list until things start to settle down, till we start to get more of a clear direction on the path of consumer behavior.

05:43.008 --> 05:46.509 [SPEAKER_01]: That is, Bath and Body Works, ticker BBWI.

05:48.145 --> 05:52.829 [SPEAKER_01]: Looks like we got our first live call from our friend Nick in Seattle.

05:52.849 --> 05:55.011 [SPEAKER_01]: There's a question about FLMX.

05:55.051 --> 05:55.511 [SPEAKER_01]: Do you own it?

05:55.531 --> 05:56.212 [SPEAKER_01]: You're looking to buy it.

05:56.252 --> 06:06.700 [SPEAKER_00]: Hey Luke, I don't own this because I own EWW, which is a different Mexico focus ETF.

06:07.521 --> 06:14.967 [SPEAKER_00]: My problem with that ETF is, it has a fifty basis point fee.

06:16.308 --> 06:20.510 [SPEAKER_00]: And this one here, SLMS, has a much lower fee.

06:21.210 --> 06:30.194 [SPEAKER_00]: However, it's a much smaller fund with less than, I want to say, a hundred million in assets under management.

06:30.954 --> 06:35.115 [SPEAKER_00]: What is the risk of owning a much smaller fund?

06:35.336 --> 06:44.119 [SPEAKER_00]: Are there risks associated with that that would make me want to go with a larger fund like EW instead?

06:45.456 --> 06:47.456 [SPEAKER_01]: That is a great question.

06:47.997 --> 06:54.118 [SPEAKER_01]: So the core of it is, should you worry too much about fund size, okay?

06:54.718 --> 06:59.499 [SPEAKER_01]: One of the things that can determine fund size is when these funds were created, right?

06:59.619 --> 07:02.340 [SPEAKER_01]: First, to market, market movers, UW.

07:02.740 --> 07:10.882 [SPEAKER_01]: First debuted in March of nineteen ninety-six, FLMX, the Franklin Fuzzy Mexico ETF, November of twenty seventeen.

07:12.243 --> 07:21.690 [SPEAKER_01]: Now, I think I would be less concerned about the size of the fund and more concerned about the size of the fund manager.

07:21.930 --> 07:27.695 [SPEAKER_01]: The sub-advisor here is a Franklin Templeton, a very large investment manager, the custodian state-free bank.

07:27.735 --> 07:35.821 [SPEAKER_01]: The money is held in a very, very large institution, which shows you the safety of your assets.

07:38.352 --> 07:46.497 [SPEAKER_01]: One of the reasons why it is cheaper is because of the licensing of MSCI indices versus footsie wrestle indices.

07:47.037 --> 07:51.680 [SPEAKER_01]: They do just tend to be cheaper, and so you can save costs there, right?

07:51.700 --> 07:55.262 [SPEAKER_01]: The difference here is about thirty basis points in expenses.

07:55.942 --> 07:59.304 [SPEAKER_01]: And so I wouldn't be worried just because one fund is smaller.

07:59.344 --> 08:01.266 [SPEAKER_01]: It's more about who is managing it.

08:01.306 --> 08:03.827 [SPEAKER_01]: Do they have a track record of above board behavior?

08:03.867 --> 08:05.268 [SPEAKER_01]: Are they a big investment manager?

08:05.589 --> 08:13.394 [SPEAKER_01]: You know, such that the fund itself isn't just going to collapse on the way to the company, which for Franklin, you know, that's certainly not going to happen here.

08:13.754 --> 08:17.437 [SPEAKER_01]: And so the question becomes, you know, what are you really trying to target here?

08:18.217 --> 08:20.818 [SPEAKER_01]: And what do you care about in terms of trading it, right?

08:21.018 --> 08:23.159 [SPEAKER_01]: A larger fund is going to have more liquidity.

08:23.780 --> 08:32.644 [SPEAKER_01]: And so that's kind of where I would think about the difference between these two things oftentimes when you pay more in expense ratio, you're paying for something, right?

08:32.924 --> 08:34.725 [SPEAKER_01]: In this case, liquidity, a different index.

08:34.805 --> 08:39.407 [SPEAKER_01]: So either way, I think both of these funds are a decent way to get exposure to the Mexican market.

08:39.667 --> 08:42.908 [SPEAKER_01]: And I certainly wouldn't be worried just because one is substantially smaller.

08:43.749 --> 08:44.229 [SPEAKER_01]: Thanks for the call.

08:46.025 --> 08:51.333 [SPEAKER_01]: Now, I'm moving to do break on the other side, we'll preview today's topics and look at today's market activity.

08:52.294 --> 08:56.280 [SPEAKER_01]: Just like Nick, you can call in and talk to me live at eight, eight, and ninety nine chart.

09:05.956 --> 09:10.898 [SPEAKER_06]: Sirious investors are certain to have finance and investment questions.

09:11.118 --> 09:14.960 [SPEAKER_06]: Wanted to get your take on WW Granger.

09:15.180 --> 09:19.501 [SPEAKER_06]: And the best person to ask your question in the right way is you.

09:19.521 --> 09:25.003 [SPEAKER_05]: I was wondering from your standpoint, they're a downside in buying fractional shares versus whole shares.

09:25.323 --> 09:34.207 [SPEAKER_06]: And twenty four seven rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

09:34.567 --> 09:37.849 [SPEAKER_02]: The issue, though, is really over the last decade or so.

09:38.209 --> 09:41.671 [SPEAKER_02]: It's never maintained this level of profitability for a longer time.

09:41.911 --> 09:45.893 [SPEAKER_01]: Modernies are incredibly volatile, so when the going is good, take some profit.

09:46.053 --> 09:48.954 [SPEAKER_06]: Your participation makes an invest dog better.

09:49.194 --> 09:51.696 [SPEAKER_06]: My name is Mike, I'm calling in from Orange County, California.

09:51.736 --> 09:53.977 [SPEAKER_06]: This is Lewis calling from Bolivia.

09:54.077 --> 09:55.938 [SPEAKER_06]: Let's go talk to Chris and me.

09:56.178 --> 09:58.899 [SPEAKER_06]: So don't forget to call, invest dog.

09:59.139 --> 10:00.280 [SPEAKER_06]: First off, great show.

10:00.460 --> 10:01.481 [SPEAKER_06]: I went a lot for you, too.

10:01.661 --> 10:03.962 [SPEAKER_06]: Hey, day eight, ninety nine chart.

10:10.139 --> 10:16.985 [SPEAKER_06]: You've got finance and investment questions, and Luke Guerrero is ready to provide his unbiased answers.

10:17.466 --> 10:22.270 [SPEAKER_06]: Call now or any time, eight, eight, eight, nine, chart.

10:25.353 --> 10:28.115 [SPEAKER_01]: It's like a Roger, like the next idea decided to call in.

10:28.135 --> 10:32.299 [SPEAKER_01]: So let's go to Roger from Fremont to his a question about HPE.

10:32.319 --> 10:32.719 [SPEAKER_01]: Do you own it?

10:32.739 --> 10:33.340 [SPEAKER_01]: You're looking to buy it.

10:35.662 --> 10:36.323 [SPEAKER_04]: I'm looking to buy it.

10:37.308 --> 10:48.096 [SPEAKER_01]: Okay, we'll heal it, Packard Enterprises, it is an edge-to-cloud company, gauges in the provision of IT services, technology, enterprise product solutions, and services.

10:48.876 --> 11:04.407 [SPEAKER_01]: Geographically, the revenue is pretty spread out about thirty-six percent from the United States, thirty-four percent of it coming from Europe, about twenty-two percent from Asia as well, and then a mixture of other countries making up the other eight percent.

11:05.108 --> 11:12.572 [SPEAKER_01]: It's pretty big company, twenty eight billion dollar market cap and has a little bit of debt about seventeen billion dollars in debt.

11:13.273 --> 11:26.140 [SPEAKER_01]: Now the company is down about four point six nine percent year to date and what are some of the reasons why is well inventory challenges earlier in the year leading into the tariff announcement

11:26.600 --> 11:36.354 [SPEAKER_01]: You had pressure in its server segment as well as you're getting a lot of competition from a lot of various businesses and that segment makes about fifty three percent of its business.

11:38.523 --> 11:49.969 [SPEAKER_01]: As Nvidia has done very well, HP has well suffered a little bit from all the competition, but thirty six point seven percent return over the past three months.

11:50.549 --> 11:50.789 [SPEAKER_01]: Why?

11:50.829 --> 11:58.673 [SPEAKER_01]: Well, you're still seeing pretty solid demand growth in the other aspects of its businesses and revenue growth as well.

12:02.017 --> 12:16.932 [SPEAKER_01]: really strange picking up a little bit again over the past three months but hasn't really looked great going all the way back to twenty nineteen now margins again I mentioned we're an issue and that's really what has driven a lot of this downward pricing pressure

12:17.613 --> 12:37.428 [SPEAKER_01]: About eight point six percent is where it's margin stands this year lower than a lot of tech companies that you will see right during the pandemic about twelve point three percent net margin is where it stood and because of this you're seeing it's forward looking price earnings move back towards it's long term five year average now this is a company that's in flux

12:38.088 --> 12:41.689 [SPEAKER_01]: Right, you're seeing positive sentiment over the past three months because it's shifting.

12:41.729 --> 12:49.491 [SPEAKER_01]: It's pivoting towards this hybrid cloud and an infrastructure business like a lot of companies are trying to do because that is where the capital is going.

12:50.411 --> 12:55.352 [SPEAKER_01]: And it's delivering some pretty consistent revenue growth projections over the past three months.

12:55.972 --> 13:07.135 [SPEAKER_01]: And so if it can be successful in this transition, which stands to be seen, picking it up at it's about nine point nine times for looking earnings, seems like a pretty reasonable place to do it.

13:07.755 --> 13:16.423 [SPEAKER_01]: Now that being said, right, there are some risks associated with this, especially given where the market is floating right now, where Kaffax is right now.

13:16.843 --> 13:18.404 [SPEAKER_01]: And should we have an economic pullback?

13:18.424 --> 13:23.849 [SPEAKER_01]: Well, companies are going to stop spending as much just at a time at which HP is trying to transition.

13:24.710 --> 13:27.352 [SPEAKER_01]: So I think it's a pretty solid company.

13:27.372 --> 13:28.914 [SPEAKER_01]: You got a reasonable debt levels.

13:28.974 --> 13:29.674 [SPEAKER_01]: It's margins.

13:30.809 --> 13:31.790 [SPEAKER_01]: need to be turned around though.

13:31.950 --> 13:38.137 [SPEAKER_01]: For me, before I consider investing in this company, I would keep it on my watch list for now.

13:38.738 --> 13:40.860 [SPEAKER_01]: I want to see it cut that trend in free cash flow.

13:40.880 --> 13:43.423 [SPEAKER_01]: I want to see a little bit more success in its transition.

13:43.804 --> 13:46.347 [SPEAKER_01]: Maybe another quarter of successful earnings.

13:46.707 --> 13:50.071 [SPEAKER_01]: This quarter pretty solid looking forward to September to see what they can come up with.

13:50.491 --> 13:50.952 [SPEAKER_01]: Thanks for the call.

13:55.215 --> 13:55.955 [SPEAKER_01]: I don't know if you know this.

13:56.615 --> 13:59.096 [SPEAKER_01]: We do mention it from time to time.

13:59.856 --> 14:02.636 [SPEAKER_01]: And we love investing.

14:02.856 --> 14:17.459 [SPEAKER_01]: This is probably one of my favorite parts of my job is, yes, talking to our clients, helping our clients, but getting to answer your finance and investment questions when you call into the show, when you'll even be a voicemail, when you leave them on YouTube.

14:17.939 --> 14:23.160 [SPEAKER_01]: And so we thought it would be pretty cool for those of you who like investing.

14:23.560 --> 14:27.201 [SPEAKER_01]: who want to rep invest talk, to be able to do so.

14:27.281 --> 14:30.042 [SPEAKER_01]: And so we opened up the invest talk store.

14:30.062 --> 14:35.223 [SPEAKER_01]: If you had over the invest talk store, you can see this polo shirt that I wear pretty much every show.

14:35.303 --> 14:37.063 [SPEAKER_01]: I would say, I promise I do clean it.

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14:47.918 --> 14:57.845 [SPEAKER_01]: And so, if that is of interest to you, just head over to the Investock Store at investockstore.com, and maybe leave us a message on the website.

14:57.905 --> 15:02.869 [SPEAKER_01]: Tell us if you want any additional merch to be available.

15:04.932 --> 15:08.034 [SPEAKER_01]: All right, we are headed into another break.

15:08.074 --> 15:09.435 [SPEAKER_01]: This one a little bit longer.

15:09.455 --> 15:10.796 [SPEAKER_01]: And we come back.

15:10.856 --> 15:12.978 [SPEAKER_01]: We have a lot to go over.

15:13.018 --> 15:14.899 [SPEAKER_01]: We'll go over our main focus point.

15:15.580 --> 15:17.461 [SPEAKER_01]: Big story on the macro data today.

15:18.001 --> 15:21.024 [SPEAKER_01]: A rare story on cryptocurrency.

15:22.345 --> 15:23.605 [SPEAKER_01]: More on investor sentiment.

15:25.127 --> 15:28.149 [SPEAKER_01]: And hopefully more of your questions.

15:29.169 --> 15:32.552 [SPEAKER_01]: If you want to talk to me live, give me a call at eight eight eight and ninety nine chart.

16:08.426 --> 16:11.206 [SPEAKER_06]: Have you heard about the new Invest Talk Store?

16:11.747 --> 16:15.407 [SPEAKER_06]: That's right, you'll find great merch for the savvy investor.

16:15.927 --> 16:20.449 [SPEAKER_06]: It's all there for you now at InvestTalkStore.com.

16:21.109 --> 16:26.330 [SPEAKER_06]: Luke Guerrero is here now, taking your finance and investment questions live.

16:33.372 --> 16:37.074 [SPEAKER_01]: It was certainly an interesting day in the markets today.

16:37.674 --> 16:57.324 [SPEAKER_01]: After trading down for most of the day, all indices, all major indices finishing in the green, the Dow up, up, fifty, three basis points, S&P, five hundred up, thirty, two basis points, NASDAQ up, twenty, five basis points, Russell, two thousand up, one, point, zero, six, percent.

16:58.761 --> 17:01.562 [SPEAKER_01]: It's upside came after, tributrating.

17:01.822 --> 17:03.862 [SPEAKER_01]: For reasons we will get into in a little bit.

17:03.942 --> 17:10.424 [SPEAKER_01]: Our performers included Pharma, Managed Care, Asset Managers, Airlines, Biotech, and Home Builders.

17:11.404 --> 17:16.605 [SPEAKER_01]: Big Tech, mostly mixed though Tesla was a notable gainer on the day.

17:17.705 --> 17:24.887 [SPEAKER_01]: Relative underperformers included Semis, oil majors, casinos, apparel, retail, and hospitals.

17:25.876 --> 17:28.559 [SPEAKER_01]: Looking on the bond side, treasuries are mostly firmer.

17:28.599 --> 17:38.328 [SPEAKER_01]: We did see a bit of bolstewing on the curve, though, the third year to probably be a chagrin of the White House still unchanged the long end.

17:38.848 --> 17:42.812 [SPEAKER_01]: Really seeing a big jump on the news, which we'll dive into in a second.

17:43.412 --> 17:48.597 [SPEAKER_01]: Third year's sitting at about five percent, just above five percent at the close.

17:49.358 --> 18:11.292 [SPEAKER_01]: Dollar next was down to thirty basis points on the day gold finished up seventy basis points and crude oil settled down twenty basis points on the day and so what really drove a market activity was pretty multifaceted right you had a story that shifted in the morning you had several congresspersons

18:12.193 --> 18:16.215 [SPEAKER_01]: tweeting that the president was going to eminently fire Jerome Powell.

18:17.155 --> 18:23.178 [SPEAKER_01]: And understandably, when the independence of monetary policy was threatened, market didn't really like that.

18:23.218 --> 18:32.642 [SPEAKER_01]: Yes, you saw a thirty, forty basis point downward movement in equity markets, but more importantly, you saw the ten and thirty year just blow up.

18:33.263 --> 18:34.483 [SPEAKER_01]: Now did come back down, right?

18:34.543 --> 18:37.885 [SPEAKER_01]: Because right after that happened or shortly after that happened,

18:38.485 --> 18:47.311 [SPEAKER_01]: Well, the White House said, or rather the president himself said that he has no desire to fire Jerome Powell at this time.

18:48.892 --> 18:57.017 [SPEAKER_01]: Elsewhere we saw another cooler inflation print hit this morning with some accompanying hints of upward pressure on those care sensitive categories.

18:57.277 --> 19:01.540 [SPEAKER_01]: We'll dive into that because it's critical to dive into the numbers rather than just looking at the top line.

19:02.579 --> 19:05.500 [SPEAKER_01]: A reminder, PPI is domestic prices as well, right?

19:05.520 --> 19:09.022 [SPEAKER_01]: It doesn't include tariffs contrary to what some people were saying.

19:10.283 --> 19:20.007 [SPEAKER_01]: On the trade front, Trump said that pharma and tariffs, pharma tariffs, rather, were coming soon and expressed comfort with his tariff letter strategy and how that's been going so far.

19:20.747 --> 19:28.191 [SPEAKER_01]: High level, PPI, June, Core PPI, X Food Energy and Trade, headline all unchanged month over month,

19:29.269 --> 19:31.910 [SPEAKER_01]: which means it was a bit cooler than expected.

19:32.550 --> 19:43.475 [SPEAKER_01]: Annualized core ticked down, thirty bases once or two point seven percent, the lowest level we've seen since July of last year, little bit more of macro economic data, right?

19:43.495 --> 19:49.197 [SPEAKER_01]: June industrial production up, thirty bases points, month over month versus the forecast for a flat reading, so positivity there.

19:49.818 --> 19:55.060 [SPEAKER_01]: The Fed's beige book noted a slight increase in economic activity as well.

19:56.080 --> 20:03.503 [SPEAKER_01]: And not really anything else coming from the Fed no Fed speak today, or at least by the time this show airs.

20:04.684 --> 20:08.145 [SPEAKER_01]: Look at the head to the rest of the week retail sales will be out on Thursday.

20:08.205 --> 20:11.966 [SPEAKER_01]: Street looking for ten basis points month over month increase in headline retail sales.

20:12.347 --> 20:15.888 [SPEAKER_01]: While court retail sales seen up thirty basis points.

20:17.437 --> 20:20.198 [SPEAKER_01]: All right, let's go to a question from our YouTube comment section.

20:20.218 --> 20:24.299 [SPEAKER_01]: And this one's kind of appropriate given what our focus point is today, which we'll dive into after the break.

20:24.919 --> 20:26.320 [SPEAKER_01]: And that is on REITs.

20:26.340 --> 20:29.781 [SPEAKER_01]: It says, do you think ELS is a good REIT to own?

20:30.321 --> 20:33.582 [SPEAKER_01]: Well, equity lifestyle properties is a self administered REIT.

20:33.622 --> 20:44.485 [SPEAKER_01]: They specialize in lifestyle oriented real estate, including manufacturer home communities, RV resorts, marine properties, and seasonal rentals across four hundred and fifty five.

20:45.125 --> 20:47.227 [SPEAKER_01]: Properties and like a lot of reach.

20:47.427 --> 21:03.298 [SPEAKER_01]: They are down year to date down about seven point two seven percent down nine point one four percent over the past fifty two weeks reach being one of the worst performing sectors on a trailing twelve month basis will dive into that when we go over our main focus point

21:04.279 --> 21:07.420 [SPEAKER_01]: The question is, okay, is this a read that I want to get into?

21:08.061 --> 21:12.243 [SPEAKER_01]: Well, if we cash flow guidance is okay, right?

21:12.283 --> 21:26.829 [SPEAKER_01]: The range has been pretty stable over the past couple months price to funds from operation is certainly lower than it has been quite some time nearly the lowest it's been in five years revenue growth

21:27.649 --> 21:29.330 [SPEAKER_01]: Pretty steady, right?

21:29.370 --> 21:32.072 [SPEAKER_01]: You're seeing it actually fall a little bit year over year.

21:32.672 --> 21:33.593 [SPEAKER_01]: And so the question is, right?

21:33.613 --> 21:36.935 [SPEAKER_01]: Is this being dragged down just because of the sector itself?

21:37.055 --> 21:39.737 [SPEAKER_01]: Or is it something specific to the company?

21:40.458 --> 21:52.286 [SPEAKER_01]: And the fact that it's underperforming its sector by six percent in twenty twenty four and another six percent in twenty twenty five means that maybe right you are entering an area where what the read is owning is a problem.

21:52.966 --> 21:59.532 [SPEAKER_01]: Now we got a question earlier about Bath and Body Works, and one of the reasons why it was not doing well is people are pairing back spending.

21:59.992 --> 22:02.154 [SPEAKER_01]: Where is another place people would pair back spending?

22:02.714 --> 22:06.137 [SPEAKER_01]: Vacation, lifestyle, real estate.

22:07.258 --> 22:13.443 [SPEAKER_01]: And so because of that, when you're seeing revenue, fall like this, well, maybe this type of specialized read is not where you want to be.

22:14.084 --> 22:17.767 [SPEAKER_01]: That is equity lifestyle properties, ticker, e, l, s.

22:20.489 --> 22:24.853 [SPEAKER_01]: On the next in Vestock, we will look into this question, what is Coast Fire?

22:25.834 --> 22:38.325 [SPEAKER_01]: Coast Fire is a strategy where you save and invest enough early in life so that your retirement nest egg can grow on its own through compounding, allowing you to stop making new retirement contributions.

22:39.667 --> 22:44.032 [SPEAKER_01]: That's tomorrow, but for now, I'm Luke Guerrero ready to take your calls.

22:44.232 --> 22:46.354 [SPEAKER_01]: We've already had two live colors today.

22:46.895 --> 22:49.617 [SPEAKER_01]: Do you think we can possibly have a third?

22:50.178 --> 22:54.462 [SPEAKER_01]: If you want it to be you, pick up that phone and dial, eight, eight, and ninety-nine.

23:08.839 --> 23:16.411 [SPEAKER_06]: Invest dog is here to help, and when you download the free Invest dog podcasts, don't forget to rate and review.

23:17.092 --> 23:20.918 [SPEAKER_06]: The phone lines are open, eight, eight, eight, nine, chart.

23:24.482 --> 23:27.563 [SPEAKER_01]: My main focus point today concerns this topic.

23:28.504 --> 23:32.786 [SPEAKER_01]: Why stock investors should take a closer look at REITS?

23:33.686 --> 23:47.513 [SPEAKER_01]: With high interest rates and changing economic conditions weighing down returns, out of favour real estate investment trusts, also known as REITS, may now offer compelling valuations and attractive dividend yields.

23:48.888 --> 23:49.912 [SPEAKER_01]: And that's the key of it, right?

23:50.193 --> 23:52.181 [SPEAKER_01]: Reets are deeply out of favor.

23:52.602 --> 23:54.409 [SPEAKER_01]: Thus far we mentioned, I mentioned.

23:55.543 --> 24:02.809 [SPEAKER_01]: When answering that question on ELS, they've been one of the worst performing sectors over the past five years for a lot of reasons.

24:02.869 --> 24:10.115 [SPEAKER_01]: Higher rates, structural changes like remote work and e-commerce and many other factors, right?

24:10.535 --> 24:21.064 [SPEAKER_01]: But what you've seen recently is potentially a telltale sign for contrarian investors, which is massive outflows, suggesting some possible

24:21.604 --> 24:25.767 [SPEAKER_01]: capitulation and maybe some of the value oriented buying opportunities.

24:27.228 --> 24:28.709 [SPEAKER_01]: So really, what is the core of a REAT?

24:28.849 --> 24:29.869 [SPEAKER_01]: Why would you want to own a REAT?

24:30.750 --> 24:33.792 [SPEAKER_01]: REATs are similar to bonds and that they give you income.

24:33.812 --> 24:36.754 [SPEAKER_01]: They're for high-income focused investors.

24:36.794 --> 24:41.217 [SPEAKER_01]: In the US, REATs can yield on average three point eight percent internationally.

24:41.257 --> 24:44.579 [SPEAKER_01]: That number can be as much as a five point three percent.

24:44.619 --> 24:51.083 [SPEAKER_01]: So certainly a good way for those who are concerned about income to achieve that investing goal.

24:52.746 --> 24:55.869 [SPEAKER_01]: But it's your treat to been a big problem here for multiple reasons.

24:56.709 --> 25:00.453 [SPEAKER_01]: One, if you're looking for income from REITS, right, you're getting that three point eight percent.

25:01.614 --> 25:09.020 [SPEAKER_01]: If you can get ten, you know, five close to four percent on a ten year treasury bond, far safer, that's a lot of competition there.

25:10.603 --> 25:16.129 [SPEAKER_01]: And so as interest rates have been higher, less demand has existed for reeds.

25:16.189 --> 25:21.395 [SPEAKER_01]: And at the same time, reeds fund most of their operations through debt.

25:22.056 --> 25:29.063 [SPEAKER_01]: And so if servicing debt becomes more expensive, it becomes a more expensive enterprise to run a real estate investment.

25:29.704 --> 25:30.064 [SPEAKER_01]: Trust.

25:30.665 --> 25:49.801 [SPEAKER_01]: Now recently, you've started to see REITs move a little bit more lock step with the market correlations reaching about point eight three, which is good because as equity markets have risen so have REITs, but that may mean that its diversification benefit has been eroded away a little bit as well.

25:50.839 --> 26:01.388 [SPEAKER_01]: Right, as people are trying to diversify against asset classes, hedge against inflation, that hasn't really been the case at a time of high systematic inflation.

26:03.029 --> 26:04.030 [SPEAKER_01]: And that's the rate part, right?

26:04.050 --> 26:08.794 [SPEAKER_01]: There's the other part as well, which makes it so you have to really discriminate between what kind of rate you want to invest in.

26:09.554 --> 26:10.355 [SPEAKER_01]: Because there are many rates.

26:10.375 --> 26:11.156 [SPEAKER_01]: There's office rates.

26:11.176 --> 26:11.976 [SPEAKER_01]: There's tower rates.

26:11.997 --> 26:13.778 [SPEAKER_01]: There's a lifestyle rate we talked about.

26:14.338 --> 26:15.900 [SPEAKER_01]: There's commercial property rates.

26:17.107 --> 26:30.597 [SPEAKER_01]: And so when thinking about that, you have to think about the underlying trends, one of which post-pandemic has been a shift to remote work, meaning that office, rates, and retail rates due to e-commerce have been hit particularly hard.

26:31.673 --> 26:37.280 [SPEAKER_01]: Now with all that being said, this could mean that real estate investment trusts are at historic discount.

26:37.561 --> 26:43.909 [SPEAKER_01]: Many of them are priced and a decent clip below intrinsic value.

26:43.969 --> 26:46.632 [SPEAKER_01]: And so if you're at the time of investor who wants to

26:48.248 --> 27:04.854 [SPEAKER_01]: diversify a bit away from just being an equities who is seeking income and is looking for value opportunities like my cat who's yelling out there that's the type of investor he is an income-focused investor that right now may be a great time to look at REITs or REIT ETFs.

27:06.614 --> 27:10.796 [SPEAKER_01]: All right, let's keep things moving and get to a caller question now.

27:11.896 --> 27:15.237 [SPEAKER_04]: Hey Justin and Luke, this is Josh Mayfield in North Carolina.

27:15.437 --> 27:17.498 [SPEAKER_04]: I've been enjoying your show for over a year and

27:18.437 --> 27:25.158 [SPEAKER_04]: And wanted to call them out of particular stock that I've owned for about a year on the recommendation of somewhat else.

27:25.258 --> 27:36.740 [SPEAKER_04]: And I'm just having a hard time making heads or tails of the E-racio and where this fits in or where it should fit into the portfolio I've already made.

27:37.520 --> 27:40.861 [SPEAKER_04]: It's Myers Industries, Y-E.

27:41.821 --> 27:45.862 [SPEAKER_04]: I invested in this about a year ago and it was on a downturn.

27:45.922 --> 27:47.282 [SPEAKER_04]: It wouldn't even further down.

27:48.233 --> 28:03.840 [SPEAKER_04]: I think it's safe to hold it and maybe wait for it to continue to start making some profits again, but I just wanted your idea on it as far as a long-term hold, or if there may be a point to exit this, I'd love to hear your answer.

28:03.880 --> 28:06.662 [SPEAKER_04]: Again, have been enjoying the show for about a year now.

28:06.762 --> 28:07.122 [SPEAKER_04]: Thank you.

28:10.200 --> 28:15.303 [SPEAKER_01]: Well, we certainly do love it when our avid listeners become avid colors.

28:15.383 --> 28:18.946 [SPEAKER_01]: So thank you when you have a question for calling in to the show.

28:19.646 --> 28:25.450 [SPEAKER_01]: Now, Myers Industries is a diversified manufacturing industrial company.

28:26.531 --> 28:33.896 [SPEAKER_01]: It has many metal products and plastic products like storage bins, fuel containers, composite mats, and

28:35.074 --> 28:46.602 [SPEAKER_01]: does distribution as well through its distribution segment, through Myers' tire supply, which is the largest distributive tools equipment and supplies for tire and under vehicle service applications.

28:47.598 --> 28:51.461 [SPEAKER_01]: Now, it's performance year to day, looks pretty solid, right?

28:51.501 --> 29:12.076 [SPEAKER_01]: At twenty or thirty four point six nine percent up fifty eight point seven zero percent in the past fifty two weeks or I'm sorry in the past three months, but in the past fifty two weeks and you said you bought it a year ago pretty flat up about ninety five basis points and that's on the back of a very poor twenty twenty three and a very poor twenty twenty four.

29:13.187 --> 29:38.137 [SPEAKER_01]: earnings though has looked a lot better gross margin was up to point four percent year over your operating income up fifty three percent year over year lower costs from as gna looked good they started to share repurchase program in twenty twenty five they bought back you know a bunch of shares which is something we like to see as well but there's a market demand issue here

29:39.145 --> 29:45.601 [SPEAKER_01]: There's a sluggish market demand issue and you can't escape poor cyclical conditions.

29:48.138 --> 29:50.620 [SPEAKER_01]: It is a, you know, pretty small company, too.

29:50.660 --> 29:57.847 [SPEAKER_01]: About five hundred and fifty million dollar market cap that's quite a bit of debt, four hundred and twenty three million dollar market cap as well.

29:58.788 --> 30:09.078 [SPEAKER_01]: And so if rates go higher, if rates move higher, the cost of debt financing becomes greater, it weighs down in particular on companies such as this one.

30:14.713 --> 30:21.516 [SPEAKER_01]: We are seeing, or I am seeing, decent improvement in terms of where margins are moving, in terms of where cash flow is moving.

30:23.117 --> 30:26.899 [SPEAKER_01]: But I think the risks out there are still pretty large.

30:26.919 --> 30:34.582 [SPEAKER_01]: Let's pay our ratio, two hundred and eighty, two hundred and eighty for that three point six seven percent dividend yield.

30:35.083 --> 30:36.423 [SPEAKER_01]: That dividend is not safe.

30:36.583 --> 30:42.826 [SPEAKER_01]: And so given the prevailing conditions and what's affected the industrial sector, I might start to trim out of this.

30:45.116 --> 30:50.563 [SPEAKER_01]: The great performance over the past three months that is at least brought you back to being flat.

30:51.123 --> 30:52.084 [SPEAKER_01]: Thanks for the call.

30:54.988 --> 31:03.258 [SPEAKER_01]: All right, let's talk a little bit about US producer prices.

31:04.812 --> 31:13.943 [SPEAKER_01]: As I mentioned, PPI was a flat in June with a thirty basis point rise in goods prices offset by a ten basis point drop in service prices.

31:13.983 --> 31:16.166 [SPEAKER_01]: And if you looked at the headline, everyone thought, oh, great.

31:16.627 --> 31:17.908 [SPEAKER_01]: Terrorists aren't having an impact.

31:17.988 --> 31:19.050 [SPEAKER_01]: PPI is flat.

31:19.130 --> 31:20.231 [SPEAKER_01]: We've tamed inflation.

31:21.092 --> 31:25.075 [SPEAKER_01]: Problem there is, well, there are some tariff related cost increases.

31:25.435 --> 31:38.243 [SPEAKER_01]: Communications equipment, home furnishings are beginning to show in wholesale prices, and PPI is about as pure a non-tariff related wholesale domestic measure as you can have.

31:39.003 --> 31:48.169 [SPEAKER_01]: And so just because the headline PPI number is flat, which judges domestic production does not mean that tariffs are not having an effect.

31:50.388 --> 32:14.098 [SPEAKER_01]: Core Goods prices jumped eighty basis points driven by what I mentioned that communications gear the furniture gasoline also drive being driven upward one point eight percent you also saw service weakness from travel hotel prices fell four point one percent air fairs drop two point seven percent why not because fuel is cheaper but because demand is lower

32:17.692 --> 32:22.336 [SPEAKER_01]: The reality is, as tariffs are, if you look in the report, raising business input costs.

32:23.277 --> 32:32.426 [SPEAKER_01]: But week demand and limited pricing power are keeping broader inflation in check.

32:33.607 --> 32:38.932 [SPEAKER_01]: And so when you look at this report from a Fed standpoint, what do you do?

32:40.150 --> 32:40.750 [SPEAKER_01]: What do you see?

32:41.511 --> 32:44.734 [SPEAKER_01]: You see, there still is an inflate inflationary impulse here.

32:45.534 --> 32:48.737 [SPEAKER_01]: And at the same time, you see a weakening consumer spending base.

32:49.738 --> 32:53.160 [SPEAKER_01]: Now you have your inflation and growth issues at odds.

32:58.344 --> 33:00.366 [SPEAKER_01]: The market reacted pretty cautiously, right?

33:00.406 --> 33:06.391 [SPEAKER_01]: I think a lot of it was subsumed by what we saw related to the news that the president might try and fire your own pound.

33:07.875 --> 33:15.181 [SPEAKER_01]: But one of the things I want you all to understand, and one of the things I hope to teach you is you can't just read that article title.

33:16.302 --> 33:34.817 [SPEAKER_01]: You can't just read the headline, just like with the jobs reports, just like with CPI inflation, PPI inflation, PCE data, wholesale inventory data, retail sales data, diving in gives you a clear picture to truly understand what the data is trying to tell you.

33:36.907 --> 33:41.570 [SPEAKER_01]: All right, we already answered some voicemails, we answered some live calls, we did a YouTube question.

33:42.031 --> 33:45.053 [SPEAKER_01]: So let's tackle another YouTube question.

33:45.213 --> 33:48.735 [SPEAKER_01]: Now, this one is on a stock TPL.

33:49.436 --> 33:52.478 [SPEAKER_01]: And it says, hi, can I have your thought on this stock?

33:53.138 --> 33:56.300 [SPEAKER_01]: Take her TPL, sometimes it's hard to spell.

33:57.081 --> 34:00.063 [SPEAKER_01]: And that is a Texas Pacific Land Corporation.

34:03.667 --> 34:06.509 [SPEAKER_01]: So what does Texas specific land corporation do?

34:07.170 --> 34:11.153 [SPEAKER_01]: Well, TPL is a landowner in the state of Texas.

34:11.633 --> 34:28.067 [SPEAKER_01]: It has surface and royalty ownership, so it allows revenue generation through the entire value chain of oil and gas development, including through fixed feed payments for use of the firm's land, revenue from the materials being sold from the land and selling the construction infrastructure as well.

34:29.740 --> 34:32.522 [SPEAKER_01]: as oil and gas or oil specifically hasn't been doing well.

34:33.063 --> 34:53.958 [SPEAKER_01]: This company's been struggling also down ten point seven percent year to date down twenty two point seven seven percent over the past three months of the past twelve months though they're about twenty percent because in spite of what's going on in the oil sector they had record royalty and water services revenue

34:58.660 --> 35:09.431 [SPEAKER_01]: Water segment sales had a record sixty nine million dollars for cash flow stood at a hundred twenty seven million dollars in that you're seeing this for cash flow growth.

35:09.951 --> 35:15.817 [SPEAKER_01]: You're seeing these ridiculous margins but just given the overhead of the business right given the cost of goods in the business.

35:16.397 --> 35:20.702 [SPEAKER_01]: That's to be expected in the fifties in the sixty percent range here.

35:23.665 --> 35:29.988 [SPEAKER_01]: That being said, it's training about thirty one point one times forward looking at price to sales.

35:31.289 --> 35:37.912 [SPEAKER_01]: It is a high bar margin capital light model, the royalty model, right?

35:37.952 --> 35:45.756 [SPEAKER_01]: You're getting exposure to the permeability and energy without getting the asset heavy debt heavy types of businesses

35:47.458 --> 36:15.093 [SPEAKER_01]: and that has driven some impressive free cash flow growth from about two hundred million to five hundred million just about four years they've been buying back shares that being said though I think this name's a little expensive the market tends to agree with me here but six point eight percent short interest out there so all those companies done while it's had a good run in the past fifty two weeks and spite of it being down year to date and down over the past three months given its price pressure

36:16.265 --> 36:19.348 [SPEAKER_01]: I'm going to have to pass for now on a Texas specific land corporation.

36:19.748 --> 36:20.429 [SPEAKER_01]: Take your TPO.

36:20.509 --> 36:26.955 [SPEAKER_01]: All right, let's keep things moving and play another question now.

36:26.975 --> 36:31.119 [SPEAKER_07]: I was just curious what you thought of the home building sector.

36:31.279 --> 36:32.160 [SPEAKER_07]: I'm in particular.

36:32.200 --> 36:36.524 [SPEAKER_07]: I'm looking at NBR homes all the forward to hearing your answers later on.

36:36.584 --> 36:36.864 [SPEAKER_07]: Thank you.

36:40.211 --> 36:52.933 [SPEAKER_01]: NVR homes within the home building sector, ninety eight percent of its revenue, derive, derived is derived from home building itself, and then an eighty bit of mortgage banking.

36:54.267 --> 36:57.368 [SPEAKER_01]: It's about twenty-three billion dollar market cap company.

36:57.949 --> 37:03.571 [SPEAKER_01]: It operates through various segments in the United States, a hundred percent of its revenue generation comes to the United States.

37:03.631 --> 37:08.833 [SPEAKER_01]: It operates the Mid-Atlantic, Northeast, Mid-East, and Southeast segments of the country.

37:09.394 --> 37:10.294 [SPEAKER_01]: So it's revenue growth.

37:10.794 --> 37:15.756 [SPEAKER_01]: Kind of up and down as the housing sector has tended to be in the recent past.

37:16.957 --> 37:21.099 [SPEAKER_01]: Get ten point three billion in revenue in twenty-twenty-two, then down to nine point two, then up to ten point three.

37:22.492 --> 37:29.298 [SPEAKER_01]: Back down to nine point eight, and in that time, it's been a slow march of margins downward.

37:30.279 --> 37:39.887 [SPEAKER_01]: From a high of about seventeen point one percent net margin, twenty twenty three down to about twelve percent is where it's projected to be twelve point nine percent that is.

37:41.368 --> 37:43.049 [SPEAKER_01]: It's where it's projected to be this year.

37:44.504 --> 37:53.071 [SPEAKER_01]: It's also training at the upper end of its five year range, seventeen point, one times forward looking at price to earnings.

37:54.332 --> 38:04.540 [SPEAKER_01]: And what's really driven this ten percent loss in shares here today, margin compression, rising lot costs, waning, housing demand.

38:05.380 --> 38:09.684 [SPEAKER_01]: Do you think any of those problems are going to be solved in the next twelve months?

38:11.325 --> 38:21.234 [SPEAKER_01]: Do you think rates are going to be substantially lower such that the overwhelming majority of people that have those golden handcuffs are going to want to leave their home and move elsewhere?

38:22.155 --> 38:27.100 [SPEAKER_01]: Do you think rates are going to be meaningfully moved down to four percent making forms more homes more affordable?

38:28.264 --> 38:44.017 [SPEAKER_01]: Do you think that supply demand, demand for housing, aside from rates, is going to pick up such that revenue is going to grow and margins are going to expand here to time when input costs are becoming a little bit more expensive as well?

38:44.717 --> 38:50.082 [SPEAKER_01]: And so given that, they do do a good job in minimize their land-owning inventory.

38:50.122 --> 38:53.064 [SPEAKER_01]: It does lower risk for me business operations perspective.

38:53.545 --> 38:56.987 [SPEAKER_01]: They're doing a pretty decent job in spite of everything that's happening around us.

38:58.035 --> 39:01.276 [SPEAKER_01]: They only have about a billion dollars in debt on that twenty one billion dollar company.

39:01.296 --> 39:02.936 [SPEAKER_01]: They're consistently buying back shares.

39:02.956 --> 39:03.756 [SPEAKER_01]: They're cash flow.

39:04.556 --> 39:06.857 [SPEAKER_01]: Headed downward but moderately.

39:08.297 --> 39:10.497 [SPEAKER_01]: I just don't think in the short to medium term.

39:12.098 --> 39:18.019 [SPEAKER_01]: It is likely that housing cost stabilized and margins rebound enough to drive this.

39:19.419 --> 39:24.160 [SPEAKER_01]: And justify where it's trading relative to where it's traded over the past five years.

39:24.200 --> 39:24.560 [SPEAKER_01]: So for now.

39:25.946 --> 39:28.947 [SPEAKER_01]: Given what's going on in the housing sector, I'm going to pass on NVR.

39:30.848 --> 39:31.488 [SPEAKER_01]: This is Vestock.

39:31.588 --> 39:32.108 [SPEAKER_01]: I'm Luke Greer.

39:32.128 --> 39:35.069 [SPEAKER_01]: We have one goal here to help you achieve your financial freedom.

39:35.629 --> 39:36.790 [SPEAKER_01]: Or we're continues after this break.

39:36.810 --> 39:39.571 [SPEAKER_01]: So get your questions in now at eight, eight, eight, nine, and nine chart.

39:39.631 --> 39:42.452 [SPEAKER_01]: And don't forget, cruise over the new in Vestock store.

39:43.012 --> 39:45.373 [SPEAKER_01]: It's open and it is waiting for you to visit.

40:06.500 --> 40:12.002 [SPEAKER_06]: The more you learn about how the market works, the better your chances for success.

40:12.702 --> 40:18.223 [SPEAKER_06]: So don't forget to call, in Vestark, eight, eight, eight, nine, chart.

40:19.084 --> 40:22.344 [SPEAKER_05]: I'm curious about, oh, the Realty Investment Group.

40:22.665 --> 40:25.325 [SPEAKER_05]: Just curious what you guys think about that stock?

40:25.845 --> 40:27.286 [SPEAKER_05]: What would be a good buy-in price?

40:27.846 --> 40:29.506 [SPEAKER_05]: Or if it's something to stay away from?

40:29.526 --> 40:30.987 [SPEAKER_05]: Is it too volatile right now?

40:31.047 --> 40:32.227 [SPEAKER_05]: What the way the economy is?

40:32.767 --> 40:33.388 [SPEAKER_05]: Just curious.

40:33.728 --> 40:34.228 [SPEAKER_05]: Thanks a lot.

40:34.588 --> 40:34.768 [SPEAKER_05]: Bye.

40:36.352 --> 40:47.161 [SPEAKER_01]: Sinclair O Realty Income Corporation, one of the largest reads about fifty one point four two three billion dollar market cap.

40:48.803 --> 40:59.332 [SPEAKER_01]: It is a monthly dividend rate that acquires and manages a free standing single tenant commercial properties under long-term net leases in the U.S.

40:59.892 --> 41:02.935 [SPEAKER_01]: the UK and Europe as well.

41:05.123 --> 41:07.045 [SPEAKER_01]: It has done better than a lot of its industry.

41:07.625 --> 41:23.298 [SPEAKER_01]: It's about six point three three percent year to day versus the industry's up five point seven percent revenue growing price to funds from operation thirteen which is near its low of ten point seven is average of fifteen point four.

41:24.739 --> 41:31.705 [SPEAKER_01]: And so this growth in this company is kind of surprising given what you've seen within the industry broadly.

41:33.690 --> 41:37.452 [SPEAKER_01]: Now, it has seen some cap rate pressure, like a lot of companies, right?

41:37.472 --> 41:45.897 [SPEAKER_01]: A lot of rates, a lot of debt pressure, but in spite of that, it's delivering reliable revenue and what it's known for, dividend growth.

41:47.018 --> 41:59.986 [SPEAKER_01]: I think some of the issues, excuse me, if you ever had a sign of these categories crazy, and if you're watching on YouTube, you'll see him walk by the camera, but this company is known for delivering a dividend

42:01.429 --> 42:11.419 [SPEAKER_01]: But like many other REITs, I'm not so sure that it can outpace some of these cyclical issues, especially with yield so high, especially with opportunities for income out there.

42:12.220 --> 42:13.801 [SPEAKER_01]: That is it, Realtian Incorporation.

42:14.242 --> 42:14.562 [SPEAKER_01]: Tigger.

42:15.243 --> 42:15.323 [SPEAKER_01]: Oh.

42:16.721 --> 42:33.067 [SPEAKER_01]: Before we head off, I wanted to briefly mention something that after the past of the big, beautiful bill, not just payments, will surpass one trillion dollars in twenty twenty five driven by the continuous high deficits, but also elevated bond yield.

42:33.087 --> 42:38.249 [SPEAKER_01]: Some of you have the Treasury Secretary and the President of the Administration have been talking about, right?

42:38.289 --> 42:41.791 [SPEAKER_01]: And so one of the solutions they've been talking about is potentially using stable coins.

42:42.431 --> 42:46.432 [SPEAKER_01]: as a tool to boost demand for short-term treasuries and lower borrowing costs.

42:46.552 --> 42:47.312 [SPEAKER_01]: How does that happen?

42:47.412 --> 42:50.593 [SPEAKER_01]: Well, somebody issues a stable coin tag to the dollar.

42:51.153 --> 42:53.133 [SPEAKER_01]: How do they have to invest the assets that come in?

42:53.253 --> 43:07.376 [SPEAKER_01]: Well, typically in US treasuries, that the whole point of some of the clarifications of the genius bill to clarify that regulation, allowing stable coins to hold treasuries bills, meaning the stable coin market could grow significantly.

43:08.276 --> 43:14.621 [SPEAKER_01]: Fork has ranging from one point six to two trillion dollars by twenty thirty.

43:16.422 --> 43:31.492 [SPEAKER_01]: Now, research suggests stablecoin inflows may already reduce trade yields with small but measurable effects on the shorter term, shorter term and of the curve, but high short term insurance issuance.

43:32.293 --> 43:34.134 [SPEAKER_01]: kind of poses as roll over risk, right?

43:34.154 --> 43:40.639 [SPEAKER_01]: Which is the risk that you won't be able to invest it at the same favorable rate when you are rolling over that loan.

43:40.719 --> 43:47.144 [SPEAKER_01]: So if you lock in something for ten years versus doing it year over year over year, there's a risk that the rates move against you.

43:48.405 --> 43:54.509 [SPEAKER_01]: Also a stable coin boom could displace bank deposits.

43:54.529 --> 43:59.493 [SPEAKER_01]: And bank deposits are a critical area for credit growth for project funding.

44:00.846 --> 44:09.169 [SPEAKER_01]: The key here is that when anybody tells you that anything, especially within the finance world, is a hundred percent good or a hundred percent bad, don't listen to them.

44:10.090 --> 44:11.150 [SPEAKER_01]: There are trade-offs here.

44:11.950 --> 44:12.851 [SPEAKER_01]: Flows do matter.

44:13.231 --> 44:14.351 [SPEAKER_01]: It will affect markets.

44:14.451 --> 44:16.032 [SPEAKER_01]: It can affect the financial system.

44:17.613 --> 44:20.574 [SPEAKER_01]: It could lead to more foreign demand, less foreign demand.

44:21.274 --> 44:23.555 [SPEAKER_01]: More use of the dollar, less use of the dollar.

44:25.336 --> 44:26.236 [SPEAKER_01]: The jury still out here.

44:27.457 --> 44:28.377 [SPEAKER_01]: The one thing we do know

44:29.675 --> 44:35.776 [SPEAKER_01]: trillion dollar a year in interest payments not sustainable.

44:39.217 --> 44:43.018 [SPEAKER_01]: Already this completes another Investock program.

44:43.898 --> 44:55.040 [SPEAKER_01]: I thank you Justin thanks you again my special guest cat who was just in the ER for forty-eight hours and if you watch on YouTube, you've been looking great now, Oty joined us and he thanks you for coming as well.

44:56.645 --> 45:01.929 [SPEAKER_01]: If today's show made you think about your financial picture or investments, your taxes, your retirement.

45:02.990 --> 45:06.792 [SPEAKER_01]: Whether or not you can afford to buy a house, or if you should downsize on the house.

45:07.233 --> 45:08.233 [SPEAKER_01]: Save your kid's college.

45:08.293 --> 45:11.556 [SPEAKER_01]: That's why Justin and I are here to talk directly to you.

45:12.436 --> 45:18.841 [SPEAKER_01]: Not just on Invest Talk, but through a portfolio review, which you can sign up for anytime at invest.com.

45:18.861 --> 45:20.502 [SPEAKER_01]: Just click on the portfolio review.

45:22.552 --> 45:39.160 [SPEAKER_01]: Another thing, if you like this show, spread this show, tell one friend who tells another friend who tells another friend that in Vestock is available on YouTube but on iTunes, Google Play and Spotify and while you're over there, please be sure to leave us a rate and review.

45:40.281 --> 45:45.083 [SPEAKER_01]: I really love doing this show and I think we bring valuable insights to all of our listeners.

45:47.189 --> 45:48.069 [SPEAKER_01]: Independent thinking?

45:48.630 --> 45:49.330 [SPEAKER_01]: Shared success.

45:50.070 --> 45:51.010 [SPEAKER_01]: This is Invest Talk.

45:51.691 --> 45:52.031 [SPEAKER_03]: Good night.

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46:00.674 --> 46:04.856 [SPEAKER_03]: It's important for the listener to understand that not all comments may or will apply to that.

46:05.276 --> 46:08.537 [SPEAKER_03]: Specifically, nothing said she'll be taken to be investment advice.

46:08.937 --> 46:13.339 [SPEAKER_03]: or shell statements on this program be considered an offer to buy or sell security.

46:13.699 --> 46:21.463 [SPEAKER_03]: Because such advice is rendered solely on an individual basis and at times will require that the investor review of perspectives before investing.

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