00:04.049 --> 00:12.776 [SPEAKER_05]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk.

00:13.416 --> 00:15.798 [SPEAKER_05]: Independent Thinking, shared success.

00:17.819 --> 00:26.526 [SPEAKER_05]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

00:27.206 --> 00:31.910 [SPEAKER_05]: Here is KPP Financial Portfolio Manager, Luke Guerrero,

00:34.938 --> 00:38.501 [SPEAKER_00]: Good afternoon everybody and welcome back to Invest Talk.

00:39.302 --> 00:45.427 [SPEAKER_00]: I'm Lou Guerrero and I will be your host here over this next hour where we will dive into what is going on in the market.

00:46.027 --> 00:52.492 [SPEAKER_00]: What is happening in the economy brings some stories to you and as always answer your questions.

00:53.615 --> 00:57.257 [SPEAKER_00]: Now I can't believe it, but July is pretty much over at this point.

00:57.277 --> 01:00.599 [SPEAKER_00]: We only have two trading days left in this month.

01:01.199 --> 01:04.441 [SPEAKER_00]: And before you know it, it's going to be Christmas and we're going to say it's twenty twenty six.

01:05.201 --> 01:08.623 [SPEAKER_00]: And as time moves, it's easy to get lost.

01:09.690 --> 01:14.672 [SPEAKER_00]: It's easy to not see what is going on around us as we all have distractions in our lives.

01:15.092 --> 01:16.852 [SPEAKER_00]: And I don't mean distractions in a negative sense.

01:16.932 --> 01:21.374 [SPEAKER_00]: I mean things other than markets that we should be paying attention to.

01:22.034 --> 01:23.975 [SPEAKER_00]: Our friends, our family, our loved ones.

01:25.070 --> 01:39.787 [SPEAKER_00]: And because of that, we hope that you take this hour every day with Invest Talk to catch yourself up on the activity of the day and to educate yourself a little bit to make your journey to financial freedom a little bit easier.

01:42.330 --> 01:49.333 [SPEAKER_00]: Now in order to do that, in order to accomplish that mission, we will bring to you some stories, some educational items, some actionable material.

01:49.833 --> 01:58.197 [SPEAKER_00]: But most importantly, we will be answering your finance and investment questions that you submitted via our any time listener line over on our YouTube channel.

01:58.397 --> 02:03.580 [SPEAKER_00]: Or hopefully, if you want to talk to me live at any time during the rest of the show.

02:04.858 --> 02:11.346 [SPEAKER_00]: Before we talk about market performance and run down those show topics that I have for you today, let's tackle this color question now.

02:11.987 --> 02:12.407 [SPEAKER_01]: Hi, guys.

02:12.548 --> 02:13.068 [SPEAKER_01]: Great show.

02:13.509 --> 02:18.896 [SPEAKER_01]: I just wondered what you thought of a pimple dynamic income fund as just as a dividend way.

02:19.616 --> 02:19.877 [SPEAKER_01]: Thank you.

02:21.132 --> 02:29.278 [SPEAKER_00]: The PIMCO dynamic income fund, I think this is the third question or so in the past six weeks that at least I have answered.

02:30.119 --> 02:40.406 [SPEAKER_00]: And the reason why we keep getting this question is because of the last twelve month distribution yield here, fifteen point six four percent on the PIMCO dynamic income fund.

02:41.307 --> 02:47.792 [SPEAKER_00]: Just as a refresher, the fund seeks current income as a primary objective and capital appreciation as a secondary objective.

02:48.573 --> 02:56.559 [SPEAKER_00]: They looked to do that by doing a dynamic asset allocation across fixed income and global credit sectors.

02:56.919 --> 03:07.587 [SPEAKER_00]: The six billion dollar fund to turn has been pretty solid over the past year or so, especially relative to its index, which is the Bank of America global fixed income markets benchmark.

03:08.748 --> 03:10.650 [SPEAKER_00]: But if you recall,

03:11.906 --> 03:13.948 [SPEAKER_00]: This is a closed-end fund, not an open-end fund.

03:14.008 --> 03:20.053 [SPEAKER_00]: An open-end fund is what you're used to with your spies, your typical, you know, ETA, your cues.

03:20.773 --> 03:25.837 [SPEAKER_00]: And essentially the way that works is when you want to buy or sell something, that shares either created or destroyed.

03:25.857 --> 03:31.142 [SPEAKER_00]: And you're buying directly from the fund itself through authorized purchase, but that's a little bit too complex.

03:31.382 --> 03:31.962 [SPEAKER_00]: So just think about it.

03:32.363 --> 03:35.145 [SPEAKER_00]: The share is being created for you and destroyed when you sell.

03:35.786 --> 03:38.328 [SPEAKER_00]: Now a closed-end fund is kind of like trading a company stock.

03:38.368 --> 03:39.389 [SPEAKER_00]: There is a certain amount.

03:40.830 --> 03:53.175 [SPEAKER_00]: and you're buying it from somebody else, not directly from the fund, meeting that unlike open end funds that typically trade at their net asset value, the value of everything that they hold, closed end funds can trade at a premium or a discount.

03:54.056 --> 04:02.399 [SPEAKER_00]: This fund trains at a pretty decent premium, usually between seven and twelve percent is what I've seen over the past couple months.

04:02.980 --> 04:10.063 [SPEAKER_00]: The reason why is because it is managed by Pimco because there is such high demand, because there's such high yield, again, in yield can change,

04:11.427 --> 04:13.268 [SPEAKER_00]: You pay a premium to hold this fund.

04:14.529 --> 04:20.171 [SPEAKER_00]: And so would I pay the premium just for the higher yield?

04:20.271 --> 04:20.992 [SPEAKER_00]: Probably not.

04:21.985 --> 04:30.947 [SPEAKER_00]: It's pretty steep premium, meaning that if there's a lot of self-pressure, you could find yourself losing a lot without the net asset value of the fund itself even going down.

04:31.067 --> 04:37.469 [SPEAKER_00]: So understand the dynamics of this fund, understand what a closed-end fund is, maybe it makes sense for you.

04:37.809 --> 04:44.911 [SPEAKER_00]: For most people, probably not looking to pay the premiums that exist right here, for the PIMCO dynamic income fund, to your PDI.

04:45.871 --> 04:50.793 [SPEAKER_00]: All right, we got to a lot to talk about today over the next forty-five minutes or so.

04:50.853 --> 04:53.434 [SPEAKER_00]: The first of which is our main focus point.

04:53.454 --> 04:55.075 [SPEAKER_00]: We're concerned this headline.

04:55.435 --> 04:59.797 [SPEAKER_00]: Seven things you may not know about reinvesting dividends.

05:00.498 --> 05:12.303 [SPEAKER_00]: It would be wise to take the time to learn about dividend reinvestment, including tax considerations, how the strategy fits various financial goals, and how it fits various market conditions.

05:13.510 --> 05:22.796 [SPEAKER_00]: Also touch on a story that we briefly spoke about the other day, and Justin and I certainly mentioned yesterday, and that is the resurgence of the meme stocks.

05:24.117 --> 05:26.378 [SPEAKER_00]: What does it say about the markets as a whole?

05:26.999 --> 05:30.181 [SPEAKER_00]: What does it say about the idea of efficient pricing?

05:31.282 --> 05:40.287 [SPEAKER_00]: And as crypto has started to become more prolific with the Genius Act with stablecoin legislation, crypto lending is back.

05:41.535 --> 05:45.417 [SPEAKER_00]: But is it as risky as it was three years ago, spoiler alert?

05:46.137 --> 05:46.437 [SPEAKER_00]: Yes.

05:47.298 --> 05:48.578 [SPEAKER_00]: And should we have time at the end of the show?

05:48.638 --> 05:59.563 [SPEAKER_00]: We'll touch on how US companies are using hot markets to roll over loans, getting lower interest rates and slashing overall borrowing costs.

06:01.362 --> 06:14.251 [SPEAKER_00]: On the question side, we also have some voice banks ready to play, and voice bank questions that is ready to play, including one on VTGN, which is the Vista Gen Therapy Dix Inc, and another on compounding rates over time.

06:15.092 --> 06:20.175 [SPEAKER_00]: We also have some questions that came into the comment section of the Invest talk at YouTube channel, which we will get to.

06:20.656 --> 06:24.759 [SPEAKER_00]: And of course, I hope to hear from many of you live throughout the show.

06:25.539 --> 06:29.064 [SPEAKER_00]: We're headed to New Break, and on the other side, we'll talk about today's market activity.

06:29.084 --> 06:34.011 [SPEAKER_00]: We'll get to all those show topics and answer more of your questions here on Invest Talk.

06:42.009 --> 06:46.971 [SPEAKER_04]: Serious investors are certain to have finance and investment questions.

06:47.191 --> 06:51.053 [SPEAKER_04]: Wanted to get your take on WW Granger.

06:51.253 --> 06:55.574 [SPEAKER_04]: And the best person to ask your question in the right way is you.

06:55.594 --> 07:01.096 [SPEAKER_02]: I was wondering from your standpoint, they're at downside in buying fractional shares versus whole shares.

07:01.396 --> 07:10.260 [SPEAKER_04]: And twenty four seven rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

07:10.640 --> 07:13.942 [SPEAKER_03]: The issue, though, is really over the last decade or so.

07:14.282 --> 07:17.764 [SPEAKER_03]: It's never maintained this level of profitability for a long period of time.

07:17.924 --> 07:21.947 [SPEAKER_00]: The modities are incredibly volatile, so when the going is good, take some profit.

07:22.107 --> 07:25.009 [SPEAKER_04]: Your participation makes an investor talk better.

07:25.269 --> 07:25.829 [SPEAKER_04]: My name is Mike.

07:25.849 --> 07:27.750 [SPEAKER_04]: I'm calling in from Orange County, California.

07:27.770 --> 07:30.052 [SPEAKER_04]: This is Lewis calling from Bolivia.

07:30.152 --> 07:32.013 [SPEAKER_04]: Let's go talk to Chris and me.

07:32.253 --> 07:34.995 [SPEAKER_04]: So don't forget to call, investor talk.

07:35.215 --> 07:36.356 [SPEAKER_04]: First off, great show.

07:36.536 --> 07:37.116 [SPEAKER_04]: I went left.

07:37.136 --> 07:37.536 [SPEAKER_04]: Me too.

07:37.817 --> 07:40.038 [SPEAKER_04]: Eight, eight, eight, ninety nine chart.

07:46.840 --> 07:52.204 [SPEAKER_04]: Luke Guerrero is here, and he's ready with answers to your financial investment questions.

07:58.319 --> 08:06.966 [SPEAKER_00]: Let's talk a little bit about the market today, overall reversing recent trends, finishing lower on the day near worst levels.

08:07.006 --> 08:16.454 [SPEAKER_00]: The Dow down, forty six basis points, S&P five hundred down, thirty basis points, NASDAQ down, thirty eight, Russell two thousand down, sixty one.

08:18.015 --> 08:19.636 [SPEAKER_00]: Who were the worst performers of the day?

08:19.656 --> 08:32.142 [SPEAKER_00]: Well, shipping and logistics names, rails, managed care, oil services, and pharma, some of the worst performers, big tech as well, moving lower with Tesla and meta, the worst out of that group.

08:33.363 --> 08:40.567 [SPEAKER_00]: Outperformers included food and beverage, biotech, HPCs, semis, and networking communications names.

08:42.211 --> 08:46.954 [SPEAKER_00]: On the bond side, Treasury yields rallied a little bit curve starting to flatten.

08:47.454 --> 08:51.636 [SPEAKER_00]: You saw about nine to ten basis point retreat on the longer end.

08:52.537 --> 09:01.262 [SPEAKER_00]: At the same time, the dollar index was up thirty basis points after rallying one percent on Monday and gold finished up a forty basis points as well.

09:02.262 --> 09:02.723 [SPEAKER_00]: What about oil?

09:02.863 --> 09:08.666 [SPEAKER_00]: It looks like settled up three point seven percent reversing some reset trends in that commodity.

09:09.306 --> 09:09.827 [SPEAKER_00]: But overall,

09:10.962 --> 09:13.985 [SPEAKER_00]: Market is in a weight and seamote.

09:14.025 --> 09:22.455 [SPEAKER_00]: We have the FOMC meeting on Wednesday, but I would say more importantly, because we all know what the rate decision is likely to be, is earnings.

09:22.475 --> 09:24.057 [SPEAKER_00]: I mentioned it last Friday.

09:24.177 --> 09:30.944 [SPEAKER_00]: This week is a week where forty percent of the S&P-five hundred is set to announce earnings.

09:31.825 --> 09:35.067 [SPEAKER_00]: And the next wave includes some big Mac seven names.

09:35.187 --> 09:42.690 [SPEAKER_00]: Microsoft meta are on the thirtieth of July after the close, which is tomorrow, Apple and Amazon follow them the next day on the thirtieth.

09:42.830 --> 09:44.111 [SPEAKER_00]: First after the close.

09:45.952 --> 09:59.358 [SPEAKER_00]: And we've seen, despite some pretty high profile earnings disappointments, fairly limited downside, particularly in the industrial and healthcare sector where earnings have looked relatively poor.

10:00.855 --> 10:13.703 [SPEAKER_00]: On the macro side, we did get a mix of economic data today, pretty solid consumer confidence number, lower job openings, and soft housing prices all point into that hopeful narrative that inflation is cooling.

10:14.264 --> 10:22.910 [SPEAKER_00]: Thiving a little bit deeper, July consumer confidence printed at ninety seven point two, the consensus of which was ninety five point five, so a little bit of a beat there.

10:23.730 --> 10:31.822 [SPEAKER_00]: June Joltz job openings largely in line with consensus, though dropping from a downwardly revised number in May.

10:31.842 --> 10:39.353 [SPEAKER_00]: And on the housing side, you had May FH, FAA and Case Shiller home price indicators, both declining month over month.

10:40.812 --> 10:44.095 [SPEAKER_00]: Moving over to trade, not much there, right?

10:44.135 --> 10:58.688 [SPEAKER_00]: We talked a little bit about the trade deal, quote unquote deal with Europe yesterday, and today we got news that well on agreement has yet to be reached between the US and China, though a are likely to extend talks once again.

10:59.748 --> 11:03.812 [SPEAKER_00]: Looking ahead to next week, we have a rather looking ahead to the rest of the week.

11:03.832 --> 11:05.414 [SPEAKER_00]: We have ADP private payrolls.

11:06.254 --> 11:12.881 [SPEAKER_00]: First, look at Q to GDP and pending home sales, which will be out on Wednesday morning, along with the quarterly refunding announcement.

11:13.642 --> 11:14.603 [SPEAKER_00]: Wednesday afternoon.

11:15.003 --> 11:18.365 [SPEAKER_00]: Tomorrow afternoon, we will see the July FOMC meeting again.

11:18.446 --> 11:22.589 [SPEAKER_00]: The rates are likely to stay steady.

11:22.629 --> 11:30.414 [SPEAKER_00]: So the market is really just looking to see what Jerome Pal has to say about the possibility for a September rate cut.

11:31.255 --> 11:34.257 [SPEAKER_00]: And how many descents there will be.

11:34.277 --> 11:39.861 [SPEAKER_00]: There's a couple of people joking for the next job when Jerome Pal's term is over.

11:39.921 --> 11:42.203 [SPEAKER_00]: So what are Waller and Bowman going to say?

11:43.512 --> 11:58.800 [SPEAKER_00]: June personal income spending and PC inflation initial claims in Chicago PMI is set for Thursday and July employment report, ISM manufacturing, construction spending, and University of Michigan sentiment will cap off the week on Friday.

12:00.601 --> 12:03.583 [SPEAKER_00]: Looks like we got our first live call Lucy from New York.

12:03.963 --> 12:04.523 [SPEAKER_00]: How can we help you?

12:04.543 --> 12:10.427 [SPEAKER_07]: Hi, I just wanted to ask you about the stock ticker AMD.

12:11.716 --> 12:15.799 [SPEAKER_07]: It's I've seen it go to about this price twice in the last eight months.

12:16.220 --> 12:21.584 [SPEAKER_07]: And both times it's down again, afterwards I'll be trying to think, is there something different the company right now?

12:21.984 --> 12:24.606 [SPEAKER_07]: And what would be a good entry point for such a big stock?

12:25.487 --> 12:28.869 [SPEAKER_00]: Sure, AMD is advanced micro devices.

12:28.949 --> 12:31.211 [SPEAKER_00]: They are a semi-conductor company.

12:31.671 --> 12:40.058 [SPEAKER_00]: They may GPUs, AI Accelerators, GPUs, all sorts of products that have really fit in with the secular growth theme over the past two and a half years.

12:41.015 --> 13:00.254 [SPEAKER_00]: Now with the past fifty two weeks up twenty six point nine seven percent with the past three months up eighty four point seven two percent and sales have been growing pretty quickly although leveling off after twenty twenty three but still thirty point eight percent annually over the past five years

13:01.397 --> 13:07.004 [SPEAKER_00]: Now this stock can oscillate between pretty expensive and very expensive, right?

13:07.064 --> 13:10.709 [SPEAKER_00]: Right now it's sitting about thirty four point four times forward looking earnings.

13:10.749 --> 13:14.934 [SPEAKER_00]: The high is sixty four point five times forward looking earnings.

13:15.895 --> 13:19.179 [SPEAKER_00]: But I think what you're seeing with this price action right now is just some

13:20.060 --> 13:32.887 [SPEAKER_00]: Tailwinds from that secular growth theme, and some pretty positive earnings out of other areas of the market you saw AMKR, and who released earnings up,eteen percent today.

13:32.907 --> 13:38.791 [SPEAKER_00]: A lot of the semi-space is still seeing records spending, and so that is an anticipation, therefore,

13:39.331 --> 13:45.235 [SPEAKER_00]: of what hopefully investors would like to see out of earnings on August fifth year, right?

13:45.255 --> 13:52.419 [SPEAKER_00]: There's not really much to the movement in price to point one eight percent today other than anticipation of elevated earnings.

13:52.979 --> 13:57.222 [SPEAKER_00]: Now, this is a situation where these names are priced such that

13:59.058 --> 14:02.662 [SPEAKER_00]: Disappointment in earnings can be pretty catastrophic to pricing, right?

14:02.682 --> 14:06.225 [SPEAKER_00]: You've seen historic levels of capex across the board.

14:06.245 --> 14:08.708 [SPEAKER_00]: Historic levels of spending that have really benefited these names.

14:08.748 --> 14:11.250 [SPEAKER_00]: It's why you're seeing revenue climb like this.

14:11.671 --> 14:14.854 [SPEAKER_00]: That same person really have the margins in video has, right?

14:14.874 --> 14:22.302 [SPEAKER_00]: We're sitting about six point four percent in net margin projected to be about twenty percent this year, but still nowhere close what the leader in the space has.

14:23.487 --> 14:39.362 [SPEAKER_00]: I think for me, this name is a little bit too expensive with slowing growth relative to what you're seeing across the industry and that's probably because it has had such a ridiculous run up over the past three months and put itself in a position that any

14:40.623 --> 14:45.507 [SPEAKER_00]: Meeting of expectations or miss on expectations again leaves a lot of downward pressure here.

14:45.987 --> 14:57.076 [SPEAKER_00]: So I would say for this particular name, not the space in general, but for this particular name, a lot of risks to the downside heading into next week where we will be seeing earnings on August fifth.

14:57.617 --> 15:01.099 [SPEAKER_00]: Certainly if I were looking to open a position, I would not do it before then.

15:01.119 --> 15:05.363 [SPEAKER_00]: That's not to say that the stock price might not climb if they do beat, but this is a risk

15:05.823 --> 15:07.385 [SPEAKER_00]: reward situation here.

15:07.665 --> 15:14.211 [SPEAKER_00]: And for me, with this type of valuation, this close to earnings, the risk of getting in now a little bit too high.

15:14.711 --> 15:15.552 [SPEAKER_00]: Thanks for the call.

15:16.193 --> 15:20.156 [SPEAKER_00]: All righty, we already got one live call from our friend Lucy in New York.

15:20.757 --> 15:30.426 [SPEAKER_00]: Hoping to get more live calls from all of you anytime over the next forty minutes or so, you know the number, eight, eight, ninety nine chart.

15:44.609 --> 15:48.673 [SPEAKER_04]: Your questions are free, the answers are unbiased.

15:49.114 --> 15:53.438 [SPEAKER_04]: Luke Guerrero is here now, ready to take your calls live.

15:53.958 --> 15:57.622 [SPEAKER_04]: Invest talk, eight, eight, nine, nine, chart.

15:59.444 --> 16:10.497 [SPEAKER_00]: eighty eight ninety nine chart is the number if you want to get through alive over the next thirty minutes or so but until we get our next caller let's dive right into my main focus point today

16:11.615 --> 16:15.597 [SPEAKER_00]: And it's an important one because oftentimes investors focus on dividends.

16:15.657 --> 16:22.101 [SPEAKER_00]: So let's talk about the three things you may not know about reinvesting those dividends.

16:22.961 --> 16:29.245 [SPEAKER_00]: Now first and foremost, you may not know how dividend reinvestment works with wash sales.

16:29.965 --> 16:33.808 [SPEAKER_00]: Reinvesting creates new share purchases.

16:34.835 --> 16:43.218 [SPEAKER_00]: Warsoul rules disallow tax loss harvesting if similar if like shares are bought thirty days before or after a sale.

16:44.059 --> 16:49.241 [SPEAKER_00]: And so timing dividend reinvestment around tax moves can be a little tricky.

16:49.801 --> 16:56.764 [SPEAKER_00]: Now a lot of these are going to focus on taxation because it is an important part but usually a secondary part about what people think about.

16:57.564 --> 16:59.685 [SPEAKER_00]: Now another thing you might not understand is well

17:00.920 --> 17:05.862 [SPEAKER_00]: Oftentimes numbers don't perfectly round to whole numbers when we're talking about dividends.

17:05.882 --> 17:08.383 [SPEAKER_00]: So will I get fractional shares?

17:09.164 --> 17:09.984 [SPEAKER_00]: The answer is you could.

17:10.144 --> 17:12.665 [SPEAKER_00]: You certainly could get fractional shares.

17:13.165 --> 17:18.788 [SPEAKER_00]: Sometimes companies when they do dividend reinvestment will just do a whole number and then give you the difference in cash.

17:19.148 --> 17:23.750 [SPEAKER_00]: But rest assured that if you do get fractional shares, there's nothing to worry about.

17:23.830 --> 17:28.152 [SPEAKER_00]: Most brokers will let you sell them usually via market orders.

17:28.912 --> 17:37.197 [SPEAKER_00]: But keep in mind, settlement may take longer, not necessarily, but it might take longer than selling a whole number of shares might.

17:38.777 --> 17:41.459 [SPEAKER_00]: Now, the one is associated with dividend taxation.

17:41.999 --> 17:48.463 [SPEAKER_00]: Now, my last job is spent a lot of time working on our ETFs, non-qualified versus qualified dividend distribution.

17:49.083 --> 17:57.728 [SPEAKER_00]: And the reason why is because investors who were invested in ETFs and really investors in general should care about the tax treatment of the income that they are seeing.

17:58.308 --> 18:07.190 [SPEAKER_00]: And so US companies companies that trade in the United States with the exception of real estate investment trusts or passive foreign investment companies are a whole other host of exceptions.

18:07.670 --> 18:13.552 [SPEAKER_00]: Generally give you qualified dividend income, which gives you the lower rate of long-term capital gains.

18:14.152 --> 18:20.713 [SPEAKER_00]: What you want to be careful of is that non-qualified dividend and bond income, which is taxes or an area income.

18:21.193 --> 18:27.735 [SPEAKER_00]: Meaning that the tax liability you have for it will be whatever your personal income tax level is.

18:28.936 --> 18:42.955 [SPEAKER_00]: If you have if you exist in the highest tax bracket and you really want to be conscious of your tax tax hits, well then maybe treasuries and municipal bonds are right for you because they can be tax exempt at certain levels.

18:44.911 --> 18:50.132 [SPEAKER_00]: Now, when you do reinvest these dividends, right, you're not actually seeing the cash that is coming to you.

18:50.272 --> 18:56.494 [SPEAKER_00]: So the question is, are you, you have to pay taxes on that, right?

18:56.534 --> 18:58.694 [SPEAKER_00]: You're getting this cash, but it's immediately reinvested.

18:59.835 --> 19:07.096 [SPEAKER_00]: Well, if it's in a taxable account, yes, you will be liable for those taxes at the time that the dividend reinvestment happens.

19:07.136 --> 19:11.937 [SPEAKER_00]: You must track them as part of your cost basis, creating multiple tax lots again.

19:11.977 --> 19:13.618 [SPEAKER_00]: This is essentially a share purchase.

19:14.898 --> 19:22.905 [SPEAKER_00]: And this can make future sales and tax reporting complex, but luckily most brokers make it a little bit easier for you.

19:23.746 --> 19:26.689 [SPEAKER_00]: Another one is, okay, Luke, well, this company pays a dividend.

19:27.269 --> 19:32.554 [SPEAKER_00]: And if a company pays a dividend, that means it certainly must have some sort of profits that it has to pass on to me.

19:33.475 --> 19:35.117 [SPEAKER_00]: Does that mean that it's a better company?

19:35.887 --> 19:39.410 [SPEAKER_00]: Well, academically speaking, empirically speaking, not necessarily, right?

19:39.630 --> 19:42.152 [SPEAKER_00]: Divinans don't increase company value.

19:42.212 --> 19:46.616 [SPEAKER_00]: There's a model called the modically-onny Miller model, and it essentially shows that.

19:46.816 --> 19:53.261 [SPEAKER_00]: And that's something that anybody who studied economics and finance has looked at, but the key here is, when a dividend is paid out, right?

19:53.761 --> 19:59.486 [SPEAKER_00]: Understanding that a company is worth the present value of its future cash flows and its assets and all of these things.

20:00.247 --> 20:02.909 [SPEAKER_00]: Well, if a company is paying out a dividend, how do they pay it out?

20:03.998 --> 20:05.899 [SPEAKER_00]: They're paid out cash or they paid out with shares.

20:05.919 --> 20:11.401 [SPEAKER_00]: They're paying out cash, cash is leaving their balance sheet, meaning there are less assets of the company.

20:11.901 --> 20:21.205 [SPEAKER_00]: And therefore, hypothetically speaking, right, in a frictionless environment, you should see the stock price of a company fall by the value of the dividend.

20:21.245 --> 20:23.486 [SPEAKER_00]: Now in practice, it doesn't fall by the exact amount.

20:23.806 --> 20:26.467 [SPEAKER_00]: But the key here is that nothing is being created here.

20:26.947 --> 20:33.697 [SPEAKER_00]: Now, for some investors, they do prefer dividends for the perceived stability and predictability, but we talk about all the time on this show.

20:33.877 --> 20:37.462 [SPEAKER_00]: Dividends are not set in stout, just because they are stable now.

20:37.742 --> 20:41.488 [SPEAKER_00]: Does not mean they will be stable into the future.

20:43.539 --> 20:52.423 [SPEAKER_00]: Another question given me, you know, we have a little bit of deteriorating economic condition relative to last year is how do they perform in a recession?

20:53.084 --> 21:02.849 [SPEAKER_00]: Well, dividend stocks often hold up better end downturns, not because they're paying a dividend per se, but because dividend stocks tend to be companies that are more mature.

21:03.349 --> 21:06.991 [SPEAKER_00]: They aren't in the crazy growth phase in the life cycle of their business.

21:07.411 --> 21:09.072 [SPEAKER_00]: They are value oriented securities.

21:10.812 --> 21:13.633 [SPEAKER_00]: Now that doesn't mean the highest dividends are going to do the best, right?

21:13.893 --> 21:23.397 [SPEAKER_00]: Getting high yield funds without quality screens can lead to poor outcomes for investors and sector exposure matters as well.

21:23.817 --> 21:29.880 [SPEAKER_00]: It doesn't matter if it's an established dividend paying company if it is a cyclical name.

21:30.640 --> 21:32.742 [SPEAKER_00]: Then in a recession, it might not do well.

21:33.323 --> 21:40.249 [SPEAKER_00]: And I think the last thing people really concerned about because dividends are for income is can I live off of dividends in retirement?

21:40.910 --> 21:51.701 [SPEAKER_00]: Income only strategy, certainly, appeal to those who are trying to avoid that principle, draw down, but it's tends to be hard to generate enough yield on a sustainable basis.

21:51.741 --> 21:54.724 [SPEAKER_00]: You can see names that are five, six, seven percent yields.

21:55.284 --> 21:57.547 [SPEAKER_00]: But we know that those can be value-trapped.

21:57.587 --> 22:04.895 [SPEAKER_00]: So understanding the size you might have to have, in order for these dividend portfolios to pay all of your needs, can be unrealistic.

22:05.336 --> 22:12.144 [SPEAKER_00]: The benefit is, being able to draw down from your assets, not just supporting those dividends, means that you can decide.

22:12.424 --> 22:14.947 [SPEAKER_00]: The timing of the cash flows, nobody else has to.

22:17.013 --> 22:22.644 [SPEAKER_00]: All right, we're moving into our next break, our Invest Talk phone lines, never close.

22:23.446 --> 22:26.352 [SPEAKER_00]: You know the number, eight, eight, nine, nine chart.

22:40.118 --> 22:42.879 [SPEAKER_04]: Have you heard about the new Invest Talk store?

22:43.439 --> 22:47.101 [SPEAKER_04]: That's right, you'll find great merch for the savvy investor.

22:47.601 --> 22:52.123 [SPEAKER_04]: It's all there for you now at InvestTalkStore.com.

22:52.803 --> 22:58.046 [SPEAKER_04]: Luke Guerrero is here now, taking your finance and investment questions live.

22:58.646 --> 23:02.647 [SPEAKER_04]: Call Invest Talk, eight, eight, eight, ninety-nine chart.

23:03.868 --> 23:04.848 [SPEAKER_09]: Hey, good morning.

23:05.329 --> 23:08.730 [SPEAKER_09]: I'm looking forward to buy some VISTA gym therapeutics.

23:09.233 --> 23:20.835 [SPEAKER_09]: as a speculative play, ticker symbol V, P, G, N. The company specializes in an intranetial products for psychiatric and neurological disorders.

23:21.395 --> 23:23.376 [SPEAKER_09]: It has five drugs in the pipeline.

23:24.156 --> 23:28.157 [SPEAKER_09]: One in phase thirty with positive data and the remainder in phase two.

23:28.817 --> 23:32.197 [SPEAKER_09]: It seems promising is a newer concept for us if it works.

23:32.837 --> 23:35.518 [SPEAKER_09]: And inside there's been purchasing more share recently.

23:36.353 --> 23:44.303 [SPEAKER_09]: I acknowledge it's like buying a lottery ticket, basically, but just looking for your thoughts on the current state of the company and anything else you can add.

23:44.944 --> 23:46.566 [SPEAKER_09]: Thanks for all you do have a good day.

23:47.647 --> 24:02.498 [SPEAKER_00]: Vistagent Therapeutics is a late stage biotech company and that they have one drug in phase three and a couple drugs in phase two focusing on CNS disorder, suffering, anxiety disorders, depression, and a puzzle symptoms and cognition.

24:03.179 --> 24:13.527 [SPEAKER_00]: And their lead drug candidate, phas DNL, is in phase three trials with results expected in Q four of this year.

24:14.842 --> 24:18.126 [SPEAKER_00]: Then they have had some positive data come through about this drug.

24:18.146 --> 24:21.851 [SPEAKER_00]: That's why it's up thirty three point six two percent over the past three months.

24:21.871 --> 24:26.837 [SPEAKER_00]: There's some optimism around clinical trials, which is really led to this insider purchasing.

24:26.857 --> 24:29.781 [SPEAKER_00]: And you see some pretty strong momentum, right?

24:29.801 --> 24:32.544 [SPEAKER_00]: You see some strong momentum in this name over the past.

24:33.305 --> 24:40.388 [SPEAKER_00]: three months, but at the same time, it is still a pre-profit company, right?

24:40.408 --> 24:46.571 [SPEAKER_00]: So revenue is very low, net margins are in the negative seven thousand range where it's projected to be this year.

24:47.451 --> 24:52.053 [SPEAKER_00]: And so it is exactly what you said it was when you called in, it is a lottery ticket.

24:53.100 --> 24:56.322 [SPEAKER_00]: Now I don't know if this drug is gonna be successful.

24:56.402 --> 25:02.805 [SPEAKER_00]: There are plenty of drugs that get through phase two, get to phase three, don't do well, and then we move on.

25:04.585 --> 25:10.891 [SPEAKER_00]: And so, if you wanted to put a little bit in here as a lottery ticket, I wouldn't call it investing, I would call it gambling.

25:11.271 --> 25:18.218 [SPEAKER_00]: And we as an investing show, don't usually recommend throwing money into these pie of the sky.

25:18.258 --> 25:23.543 [SPEAKER_00]: Biotech names, one of them will hit, but it doesn't necessarily mean this one will be the one.

25:24.104 --> 25:27.927 [SPEAKER_00]: That is, vestigent therapeutics, ticker VT, GN.

25:28.708 --> 25:37.873 [SPEAKER_00]: Every day now, we receive questions from the comment section of the Invest Talk YouTube channel for our growing audience of viewers.

25:38.793 --> 25:42.055 [SPEAKER_00]: And when you leave one, we'd like to get to those as quickly as we can.

25:42.555 --> 25:44.836 [SPEAKER_00]: This question is from our friend Peter in New York.

25:44.876 --> 25:49.318 [SPEAKER_00]: It's his longtime listener and truly value your opinions and philosophy on investing.

25:49.338 --> 25:56.202 [SPEAKER_00]: I would like to invest in the nuclear market, but trying to pick one potential winner seems so risky.

25:56.982 --> 26:03.831 [SPEAKER_00]: I looked at the ETF and LR, which has holdings all across the nuclear power chain, including miners to utilities, operating power plants.

26:04.431 --> 26:07.475 [SPEAKER_00]: What are your opinions on some of the core holdings in this ETF?

26:07.936 --> 26:09.357 [SPEAKER_00]: Thank you for your insight.

26:10.205 --> 26:14.147 [SPEAKER_00]: Well, NLR is the event at Uranium and nuclear ETF.

26:14.187 --> 26:21.691 [SPEAKER_00]: It holds a pretty narrow portfolio of companies involved in the nuclear energy industry, ranging from big industrial conglomerates to Uranium.

26:21.951 --> 26:29.835 [SPEAKER_00]: Miners, eligible firms have to have at least fifty percent of the revenue from the Uranium and nuclear segment.

26:31.296 --> 26:36.239 [SPEAKER_00]: The heavily overweight utilities and carries a little bit of weight in energy giving it a large cap tilt.

26:37.503 --> 26:41.685 [SPEAKER_00]: It's about two billion dollars with a fifty six basis point expense ratio.

26:42.505 --> 27:03.173 [SPEAKER_00]: You today did some pretty well up forty five point six eight percent relative to a benchmark about forty four ninety two the reason why uranium and nuclear have done so well is because the anticipated high energy demand going forward and the necessity to diversify our grid and not just in the United States but globally as well.

27:04.334 --> 27:15.738 [SPEAKER_00]: Now, as I mentioned, there's a little bit of large cap bias here, about forty-two, point five, six percent in large caps, about twenty-nine in mid-caps, about twenty-six in small caps.

27:16.158 --> 27:22.560 [SPEAKER_00]: And as promised, a lot of energy and industrial weight, I'm sorry, utility and industrial weight in this fund.

27:23.060 --> 27:29.522 [SPEAKER_00]: Now, the big names are exactly the ones you would expect, constellation energy, commico, which we hold for our clients, uranium energy.

27:29.922 --> 27:32.343 [SPEAKER_00]: It's pretty broadly diversified across these.

27:33.223 --> 27:34.505 [SPEAKER_00]: Interestingly enough, right?

27:34.525 --> 27:49.923 [SPEAKER_00]: I'm looking at about the top ten makes about fifty five point one percent of the benchmark which leaves me to believe that there's got to be some sort of capping in here because I'd imagine the constellation energy and commica would be a higher weight here if it was uncapped.

27:49.943 --> 27:51.284 [SPEAKER_00]: Let's take a look.

27:52.640 --> 27:56.242 [SPEAKER_00]: Index selects and weights holdings by market cap with individual weights, capital E percent.

27:56.342 --> 27:56.662 [SPEAKER_00]: There it is.

27:56.762 --> 28:02.045 [SPEAKER_00]: So there's market cap weighted fund, capital E percent, meaning you're going to get more small cap exposure.

28:02.065 --> 28:11.550 [SPEAKER_00]: So this is essentially a nuclear uranium ETF that is tilting towards those smaller names because of the effective cap here.

28:12.690 --> 28:15.032 [SPEAKER_00]: I think this is a pretty solid way to approach the sector.

28:15.052 --> 28:21.016 [SPEAKER_00]: It gives you broad diversity, focusing not just on utilities, but also on energy, also industrials.

28:21.176 --> 28:23.497 [SPEAKER_00]: Again, broad way to go with the theme here.

28:23.517 --> 28:30.742 [SPEAKER_00]: And I think generally speaking, the broader you can get on these themes, the more net you can catch here, the more beneficial it can be for you as an investor.

28:30.782 --> 28:31.963 [SPEAKER_00]: So, if you see its basis points,

28:32.383 --> 28:38.886 [SPEAKER_00]: It actually sounds pretty reasonable to me here because they're not really just doing a set in, forget it, easy methodology.

28:38.906 --> 28:43.869 [SPEAKER_00]: There's a little bit of active management here, even though I imagine they only rebound periodically.

28:43.929 --> 28:50.973 [SPEAKER_00]: So if you're looking to get some broad exposure to uranium and nuclear, I don't see any problems with the Ivanec uranium and nuclear ETF.

28:52.573 --> 28:55.115 [SPEAKER_00]: All right, it looks like we got another live call from Rob.

28:55.175 --> 29:00.918 [SPEAKER_00]: It's listening on Am, twelve, twenty, and it has a question on L and W, do you want to do you looking to buy it?

29:01.658 --> 29:04.479 [SPEAKER_06]: I do not own it, but I am interested in it.

29:05.860 --> 29:07.200 [SPEAKER_06]: I can know what your thoughts are, Luke.

29:07.760 --> 29:08.641 [SPEAKER_00]: What interests you in there?

29:10.922 --> 29:30.029 [SPEAKER_06]: Well, I know they're big into the old gaming thing, which I know absolutely nothing about, but I know that it's certainly a huge market, and they seem to be capturing some of that market and looking at a three-year chart stock is done pretty well.

29:30.967 --> 29:32.648 [SPEAKER_00]: Yeah, so let's dive into it then.

29:32.768 --> 29:35.309 [SPEAKER_00]: It's pretty good bullet points there for me.

29:35.409 --> 29:36.430 [SPEAKER_00]: Light and wonder.

29:36.910 --> 29:48.356 [SPEAKER_00]: Formally knows as scientific games, they design content and hardware for land-based casinos online gaming and social casino games using their side play and eye gaming segments.

29:49.136 --> 29:53.819 [SPEAKER_00]: Now, with the past three months, it's up about fifteen point zero, three percent.

29:53.839 --> 30:00.062 [SPEAKER_00]: Now, it'll perform its industry each of the past six years, which is actually pretty impressive here.

30:00.882 --> 30:19.841 [SPEAKER_00]: Revenue growth though has fallen from twenty nineteen it did really struggle during the pandemic revenue fell to two point one billion and it since climbed its way out there almost back to that pre-pandemic high of three point four billion projected to be three point four at three billion this year at the same time right at lost money pre-pandemic

30:20.542 --> 30:36.462 [SPEAKER_00]: just positive in twenty twenty one but margins started to expand in twenty twenty three uh... and they keep expanding that margin projected to be thirteen point nine this year never the past three months it's really been driven by the announcement and uh...

30:38.024 --> 30:42.466 [SPEAKER_00]: Implementation of this multi-year cross-platform revenue plan.

30:42.827 --> 30:47.489 [SPEAKER_00]: Something that has actually shown itself it looks like in recent quarterly earnings.

30:48.370 --> 30:56.274 [SPEAKER_00]: Q-one earnings did beat on revenue and earnings per share, and we're approaching Q-two earnings now on August sixth.

30:57.657 --> 31:09.041 [SPEAKER_00]: And so, keeping that in mind, it's trading at a relative valuation that seems pretty reasonable, fifteen point seven times forward looking earnings, only about two point seven times sales at about its averages.

31:09.942 --> 31:13.903 [SPEAKER_00]: From a technical perspective, seems pretty okay.

31:13.923 --> 31:16.584 [SPEAKER_00]: I wouldn't say it's in a general uptrend or a downtrend.

31:16.604 --> 31:22.947 [SPEAKER_00]: It's kind of been arranging for about a month on the back of some, again, good earnings earlier this year.

31:23.587 --> 31:25.228 [SPEAKER_00]: I would give the advice that,

31:27.769 --> 31:38.517 [SPEAKER_00]: In general, which is, as we approach earnings for companies, it's best to stay out because empirically speaking, the historical returns of buying before earnings is negative.

31:38.557 --> 31:51.386 [SPEAKER_00]: Now that doesn't mean that every company's return is going to be negative after earnings, it just means that you're kind of throwing yourself in a pot at a time when people are trying to assess the fundamental value of a company with new information out there.

31:52.247 --> 31:55.609 [SPEAKER_00]: Now, I do like the turnaround program from this name.

31:55.649 --> 31:59.832 [SPEAKER_00]: I do like its emphasis on this clock cross platform content.

32:00.473 --> 32:06.197 [SPEAKER_00]: And I do like that its margins and its cash flow have been consistently expanding for a couple years as they've been buying back shares.

32:06.597 --> 32:08.218 [SPEAKER_00]: So overall, I do like this name.

32:08.258 --> 32:10.700 [SPEAKER_00]: It's at a relative valuation that seems reasonable.

32:11.140 --> 32:14.943 [SPEAKER_00]: But I would still wait to see how earnings shake out in the next week or so.

32:15.343 --> 32:18.726 [SPEAKER_00]: Just so you're not just in there with a bunch of people betting on the direction of earnings.

32:19.386 --> 32:23.030 [SPEAKER_00]: That is, light and wonder, ticker L and W. Thanks to the call, Robert.

32:23.631 --> 32:33.943 [SPEAKER_00]: Now, Justin and I briefly mentioned it yesterday and I talked a little bit about it last week, but I think it's important to put it in the context overall of what is happening in the market.

32:34.504 --> 32:37.547 [SPEAKER_00]: Now, if you were listening to Friday show, you would recall.

32:39.075 --> 32:47.440 [SPEAKER_00]: The acronym that is now being used to describe the new meme stocks, which are crispy cream, open door, rocket, and coal.

32:48.301 --> 32:52.764 [SPEAKER_00]: And do their tickers being donut, open rocket, and KSS.

32:53.324 --> 32:57.406 [SPEAKER_00]: Dork, the new meme stock group driven by retail investors.

32:58.447 --> 33:00.748 [SPEAKER_00]: because they're being targeted by short sellers.

33:00.788 --> 33:02.389 [SPEAKER_00]: You saw massive price movements.

33:02.429 --> 33:07.091 [SPEAKER_00]: You saw open doors, searching five hundred percent in July before falling back, right?

33:07.471 --> 33:10.173 [SPEAKER_00]: Showing the speculative nature of that trade.

33:11.153 --> 33:21.118 [SPEAKER_00]: And it really is once again what we saw during the game stop era of retail investors organized in some fashion on social media sites like Reddit.

33:22.038 --> 33:29.247 [SPEAKER_00]: attacking their hated institutions, hedge funds because of the amount of shorts they have in these names.

33:30.425 --> 33:35.446 [SPEAKER_00]: But this isn't the only thing I want to highlight about the speculative nature of today's markets.

33:35.506 --> 33:37.046 [SPEAKER_00]: It's not just meme stocks.

33:37.887 --> 33:47.969 [SPEAKER_00]: Goldman Sachs has noted speculative activity is approaching the dot com era levels and the stimulus levels of twenty twenty one zero day options are surging.

33:48.409 --> 33:56.811 [SPEAKER_00]: Meaning people are purchasing options that are expiring the same day they hit a record volume of two point one million trades.

33:57.882 --> 34:03.086 [SPEAKER_00]: in Q two of twenty twenty five with retail making up half of those trades.

34:04.647 --> 34:06.309 [SPEAKER_00]: And it's not because of stimulus checks this time.

34:07.710 --> 34:19.880 [SPEAKER_00]: Unlike in twenty twenty one stimulus checks are gone and fed policies tight or at least tighter than it has been for the last decade yet retail speculation is still on the rise.

34:21.241 --> 34:25.905 [SPEAKER_00]: Retail makes up about twenty to twenty five percent of all trades right now.

34:26.833 --> 34:37.739 [SPEAKER_00]: That is down from the twenty twenty one number, but still well above the pre-pandemic norm which range between about ten to sixteen percent of overall traits.

34:37.799 --> 34:38.900 [SPEAKER_00]: So why is this happening?

34:39.000 --> 34:40.520 [SPEAKER_00]: Why is this speculation happening?

34:40.921 --> 34:50.646 [SPEAKER_00]: If it's not that we're just getting through free money flown at us if it thrown at us that is, if it's not because Fed policy is very loose and the money supply is is fluid.

34:50.666 --> 34:53.828 [SPEAKER_00]: A lot of it has to do with tech driven access.

34:54.946 --> 35:02.278 [SPEAKER_00]: at base brokerages like Robin Hood, which is up over a one hundred and fifty percent, year to date what's Robin Hood up.

35:04.562 --> 35:06.345 [SPEAKER_00]: It's up a hundred and seventy seven percent year to date.

35:07.452 --> 35:10.494 [SPEAKER_00]: They've democratized leverage and micro-investing.

35:11.074 --> 35:16.497 [SPEAKER_00]: For the masses, you have everything accessible in your phone anytime you want to make a trade.

35:16.697 --> 35:20.099 [SPEAKER_00]: Now, in some ways, even after normal trading hours.

35:20.759 --> 35:28.923 [SPEAKER_00]: JP Morgan is seeing a shift, even low income households are now investing more with participation quadrupling since twenty-fifteen.

35:29.203 --> 35:31.885 [SPEAKER_00]: But the problem isn't that more people are investing.

35:33.003 --> 35:36.946 [SPEAKER_00]: The problem is that more people are speculating, more people are gambling.

35:37.566 --> 35:41.109 [SPEAKER_00]: Investing is not buying crispy cream and coats.

35:42.330 --> 35:47.714 [SPEAKER_00]: Investing is not trying to take advantage of open interest.

35:48.074 --> 35:57.681 [SPEAKER_00]: Hoping that there's going to be a short squeeze and you are the beneficiary of that because the reality is as most retail investors ask those who invested in game stop are still left holding the back.

35:58.682 --> 36:01.546 [SPEAKER_00]: It makes the market structure all the more fragile.

36:01.967 --> 36:12.540 [SPEAKER_00]: Clifacinous make you are warned that retail speculation is damaging market efficiency and we haven't really even seen yet how it operates in a true downturn.

36:13.582 --> 36:14.002 [SPEAKER_00]: Certainly,

36:15.248 --> 36:20.852 [SPEAKER_00]: The risks out there are greater when more money is flowing to things that don't have as much fundamental value.

36:21.453 --> 36:25.616 [SPEAKER_00]: Just because you can trade from your pocket doesn't mean that you should.

36:26.376 --> 36:27.477 [SPEAKER_00]: Alright, let's keep things moving.

36:27.557 --> 36:29.859 [SPEAKER_00]: Try and tackle this color question before the break.

36:30.279 --> 36:31.200 [SPEAKER_08]: Hey, Luke and Justin.

36:31.220 --> 36:32.961 [SPEAKER_08]: This is Lewis calling from Peru.

36:33.041 --> 36:34.142 [SPEAKER_08]: Hope you guys are doing well.

36:34.202 --> 36:37.345 [SPEAKER_08]: Thanks for all you do to help us with our investing questions.

36:37.945 --> 36:39.006 [SPEAKER_08]: I went online and just

36:39.582 --> 36:43.003 [SPEAKER_08]: looked up a compound interest machine, I guess you would say.

36:43.684 --> 36:57.689 [SPEAKER_08]: And if you put fifty thousand dollars in today and it averages eight percent a year and it's compounded monthly, you'd be looking at like three hundred and sixty seven thousand dollars in twenty five years.

36:58.329 --> 37:02.611 [SPEAKER_08]: And the payout that year would be twenty nine thousand dollars.

37:03.111 --> 37:07.253 [SPEAKER_08]: So is that type of analysis fair or am I missing something?

37:07.968 --> 37:11.229 [SPEAKER_08]: Thanks so much for your time, and I'll be listening on the podcast.

37:11.290 --> 37:11.850 [SPEAKER_08]: Have a great day.

37:12.630 --> 37:18.173 [SPEAKER_00]: So, I think what you're looking at is the power of compounded interest.

37:18.733 --> 37:25.756 [SPEAKER_00]: Meaning if you're getting a return, in this case you're doing it monthly, and it's compounding, meaning that you get returns on your returns.

37:25.836 --> 37:37.101 [SPEAKER_00]: How is your money going to grow over time, you think, eight percent, which is a reasonable, long-term return based on the historical returns of the S&P-five hundred, over longer periods of time?

37:38.050 --> 37:43.573 [SPEAKER_00]: And so it is fair to say that based on that a percent you start with money here you end up with all this money down the road.

37:44.453 --> 37:50.056 [SPEAKER_00]: But that's not necessarily going to bear itself out in reality.

37:51.277 --> 37:54.118 [SPEAKER_00]: You could have invested that money for a long period of time.

37:54.798 --> 37:59.060 [SPEAKER_00]: And the end of the road was in January of two thousand nine.

38:00.761 --> 38:02.162 [SPEAKER_00]: And what happens then?

38:04.575 --> 38:12.523 [SPEAKER_00]: Well, you compound it, but the timing is such that the market crashed and you don't end up with that pile of money.

38:13.303 --> 38:23.854 [SPEAKER_00]: And so over longer periods of time, yes, you can try and make these assumptions that help to understand the power of investing.

38:24.715 --> 38:28.058 [SPEAKER_00]: But so much of investing is something we can't control, which is market timing.

38:29.243 --> 38:37.886 [SPEAKER_00]: Don't think your money will compound at eight percent over time, and that what you save today will exactly be what you expect it to be in the future.

38:40.187 --> 38:46.049 [SPEAKER_00]: All right, we have one more break, which gives you one more opportunity to call in and ask your question.

38:46.990 --> 38:49.571 [SPEAKER_00]: You know the number, eight, eight, and ninety-nine chart.

39:03.232 --> 39:08.455 [SPEAKER_04]: No two portfolios are alike, and every investor has a unique set of circumstances.

39:09.015 --> 39:11.557 [SPEAKER_04]: So don't forget to call the Invest talk.

39:12.097 --> 39:14.118 [SPEAKER_04]: Eight, eight, eight, ninety, nine, chart.

39:17.340 --> 39:18.401 [SPEAKER_02]: Hello, Luca Justin.

39:19.081 --> 39:22.683 [SPEAKER_02]: I like to hear your opinions on the high quality business of Adobe.

39:23.304 --> 39:27.266 [SPEAKER_02]: It seems like the sense of the business is going in opposite direction of financials.

39:28.107 --> 39:30.528 [SPEAKER_02]: And there's growth in the business, there's value,

39:31.127 --> 39:35.649 [SPEAKER_02]: And I feel like at the current price, there's far more reward than there is risk.

39:36.209 --> 39:39.150 [SPEAKER_02]: Unless there's something that some risks that I'm not seeing.

39:39.470 --> 39:47.073 [SPEAKER_02]: Please share with us if you feel like today will be a good day to buy it because I'm really getting close to it and I think that there's a significant misprice in the market today.

39:47.373 --> 39:47.653 [SPEAKER_02]: Thank you.

39:50.798 --> 40:01.790 [SPEAKER_00]: Adobe, Adobe Inc, is a software company, global technology company, mainly for digital marketing and media solutions.

40:03.012 --> 40:08.298 [SPEAKER_00]: Now you're today to down sixteen point six four percent down thirty point nine two percent of the past fifty two weeks.

40:10.167 --> 40:13.431 [SPEAKER_00]: And the way that it's earnings three months ago, it is a flat.

40:13.491 --> 40:19.459 [SPEAKER_00]: It's underperforming the industry by thirty five point five percent this year underperforming the SP five hundred by twenty five.

40:19.479 --> 40:28.310 [SPEAKER_00]: It's had a rough couple years and the reason why is because it hasn't really done a good job integrating AI into its platforms number one.

40:29.011 --> 40:41.436 [SPEAKER_00]: And that's always been my issue with Adobe over the past couple of years, is that it seems to be the easiest business to enter, given the advancements in large language models.

40:41.476 --> 40:49.740 [SPEAKER_00]: Now, you do have IPOs in the near future, figuring one of them that should maybe

40:50.996 --> 40:59.123 [SPEAKER_00]: But we, the valuation of companies like Adobe, if the market is willing to price new entrance at a higher level, but it could also work in the opposite direction as well.

40:59.843 --> 41:06.128 [SPEAKER_00]: I think yes, they have had positive earnings, but just barely just barely beating consensus.

41:06.188 --> 41:12.013 [SPEAKER_00]: Not enough to offset some of those broader structural concerns within the industry itself.

41:12.093 --> 41:15.376 [SPEAKER_00]: And so I think that right now where it's trading,

41:15.836 --> 41:19.639 [SPEAKER_00]: Which is about sixteen point six times for looking earnings although it's at a low.

41:20.039 --> 41:25.143 [SPEAKER_00]: Really is just incorporating the risks and the threats of new entrants to Adobe's business.

41:25.644 --> 41:28.046 [SPEAKER_00]: That is ADBE Adobe.

41:28.946 --> 41:31.829 [SPEAKER_00]: So a lot of talk about crypto recently in any time.

41:31.989 --> 41:33.090 [SPEAKER_00]: There is talk about crypto.

41:33.110 --> 41:35.191 [SPEAKER_00]: Well, the risks start to rise as well.

41:35.231 --> 41:38.114 [SPEAKER_00]: And in this case, it is in the form of lending.

41:38.334 --> 41:44.459 [SPEAKER_00]: Crypto lending is back in spite of the uncilateralized loan crash.

41:45.975 --> 41:48.116 [SPEAKER_00]: that collapsed the crypto market in twenty-twenty-two.

41:48.136 --> 41:56.322 [SPEAKER_00]: This company divine is issued thirty thousand uncilateralized loans since December mostly under a thousand dollars in U.S.

41:56.342 --> 41:56.642 [SPEAKER_00]: D.C.

41:56.682 --> 41:57.322 [SPEAKER_00]: stablecoins.

41:58.603 --> 41:59.924 [SPEAKER_00]: Barwords are everyday people.

42:00.164 --> 42:02.906 [SPEAKER_00]: They're targeting low-income, underserved populations.

42:03.086 --> 42:06.588 [SPEAKER_00]: People that may not have access to financing.

42:07.289 --> 42:11.672 [SPEAKER_00]: And so it's essentially what they have dubbed microfinancing on steroids.

42:12.663 --> 42:16.526 [SPEAKER_00]: But subprime lending, if you will, comes at a cost.

42:17.087 --> 42:20.069 [SPEAKER_00]: Divine's charging, twenty to thirty percent, and fixed rates.

42:21.070 --> 42:24.593 [SPEAKER_00]: Three Jane and other company offers unsecured lines on Ethereum.

42:24.933 --> 42:29.397 [SPEAKER_00]: They're backed by the same VC firm that also funded FTX.

42:30.218 --> 42:31.779 [SPEAKER_00]: I think one of the big issues here is

42:33.363 --> 42:34.864 [SPEAKER_00]: Yes, there is investor demand for this.

42:35.624 --> 42:38.426 [SPEAKER_00]: Yes, there is barware demand for this.

42:39.106 --> 42:42.088 [SPEAKER_00]: Startups are funding these loans, right?

42:42.128 --> 42:47.572 [SPEAKER_00]: More companies are appearing every day to fill this investor demand.

42:48.912 --> 42:50.253 [SPEAKER_00]: And this consumer demand.

42:51.274 --> 42:52.535 [SPEAKER_00]: But there's some enforcement risk.

42:53.695 --> 42:54.836 [SPEAKER_00]: There's some regulatory risk.

42:54.876 --> 42:58.398 [SPEAKER_00]: There's some real risks here to the financial system.

43:00.450 --> 43:10.694 [SPEAKER_00]: We saw in two thousand eight what happened when under collateralized debt became toxic and proliferated the financial system.

43:12.294 --> 43:19.156 [SPEAKER_00]: But even back then, there's a lot of hoops to jump through in order to get a mortgage that you should not have had in the first place.

43:19.216 --> 43:20.277 [SPEAKER_00]: I'll be at there weren't enough.

43:20.657 --> 43:22.778 [SPEAKER_00]: There was not enough checking of credit quality.

43:25.118 --> 43:29.100 [SPEAKER_00]: But the big problems in financial markets and in economies happen

43:29.995 --> 43:34.738 [SPEAKER_00]: when debt becomes toxic and proliferates.

43:36.159 --> 43:38.100 [SPEAKER_00]: And so I'm watching this cautiously.

43:38.320 --> 43:40.021 [SPEAKER_00]: Wall Street is watching this cautiously.

43:40.061 --> 43:42.863 [SPEAKER_00]: I'll be at JP Morgan in Canterford's jail trying to enter this space.

43:43.983 --> 43:46.305 [SPEAKER_00]: But the risk hungry VCs are surging at.

43:46.925 --> 43:57.952 [SPEAKER_00]: And so understanding the risks that are out there can help you position your portfolio to better make it through unfortunate downturns.

44:01.282 --> 44:03.925 [SPEAKER_00]: I'm Luke Brown, this completes another invest talk program.

44:04.726 --> 44:07.009 [SPEAKER_00]: Today's show made you think about your own financial picture.

44:07.790 --> 44:12.635 [SPEAKER_00]: If you think you might be exposed to more risk than you otherwise should be.

44:12.655 --> 44:16.219 [SPEAKER_00]: If you've been thinking about your taxes, if you've been thinking about a state planning.

44:16.900 --> 44:20.742 [SPEAKER_00]: It can't be financial, we can help you with a no-cost portfolio review.

44:20.762 --> 44:23.844 [SPEAKER_00]: It all starts at investdoc.com.

44:23.864 --> 44:26.545 [SPEAKER_00]: Just click the portfolio review button.

44:27.306 --> 44:36.531 [SPEAKER_00]: And while you're at it, if you want to tell one friend, just one friend or family member about investdoc and have them join the family, we really would appreciate that as well.

44:37.231 --> 44:40.193 [SPEAKER_00]: Get your downloads at Google Play, Spotify, and iTunes.

44:41.508 --> 44:43.370 [SPEAKER_00]: Independent thinking, shared success.

44:43.890 --> 44:44.711 [SPEAKER_00]: This is Invest Talk.

44:45.191 --> 44:45.451 [SPEAKER_00]: Good night.

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45:07.347 --> 45:15.110 [SPEAKER_05]: Because such advice is rendered solely on an individual basis, and at times will require that the investor review a prospectus before investing.

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45:31.394 --> 45:38.470 [SPEAKER_05]: Thank you for listening and your comments and questions are welcome on our twenty four hour listener line at eight eight eight ninety nine chart