[SPEAKER_02]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk.

[SPEAKER_02]: Independent Thinking, shared success.

[SPEAKER_02]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

[SPEAKER_02]: Here is KPP Financial Portfolio Manager, Luke Guerrero,

[SPEAKER_00]: Good afternoon fellow investors and welcome back to the Friday August, twenty second, twenty twenty five edition of Invest Talk.

[SPEAKER_00]: I'm your host Luke Guerrero and as we are hurling towards the end of summer.

[SPEAKER_00]: It's crazy.

[SPEAKER_00]: It's only five trading days left in this month.

[SPEAKER_00]: I feel as though.

[SPEAKER_00]: Twenty five going really quick.

[SPEAKER_00]: And so if you don't pay attention.

[SPEAKER_00]: You can be bogged down and all the changes that are happening around us.

[SPEAKER_00]: Therefore, we hear at Invest Talk think that we serve a tiny part of your financial journey because our mission is to help you become a better and more educated investor.

[SPEAKER_00]: We do that through, let's say a couple, a couple of ways.

[SPEAKER_00]: One, we bring stories to the table, items to the table, educational and actual material to the table.

[SPEAKER_00]: We tell you about what is happening throughout the market, what is happening throughout the economy, what is happening throughout the world, and how that might affect your portfolios.

[SPEAKER_00]: But we also do more importantly, answer your finance investment questions via voicemail over on our YouTube or live throughout the show.

[SPEAKER_00]: And I'll give you a hint.

[SPEAKER_00]: I prefer live.

[SPEAKER_00]: Number four, we talk about today's market performance and run down those show topics.

[SPEAKER_00]: Let's tackle our first caller question now.

[SPEAKER_01]: Hey guys, love the show.

[SPEAKER_01]: I was pulling up about a PayPal.

[SPEAKER_01]: I actually own a couple shares of it and has really done much.

[SPEAKER_01]: Just wonder if I should just take my losses and move on or if I just stick with it a little longer.

[SPEAKER_01]: Thanks, I'll be listening on the show.

[SPEAKER_00]: PayPal PayPal Holdings is a fin tech company payment processing company primarily processing those digital payments as well as having PayPal credit, right, which extends credit lines, earning money through interest.

[SPEAKER_00]: It's fairly large company, sixty-six billion dollar market cap with a little bit of a debt about twelve point one seven billion as of the most recent quarter in decent coverage right fourteen point eight two times on that interest coverage ratio meaning there are things are doing a good job covering the interest that they have to pay for evaluation perspective sitting well near the low of the past five years twelve times forward looking earnings price to look value said about three point two times

[SPEAKER_00]: Revenue.

[SPEAKER_00]: Pretty solid growth there, you know, over the past five years, annualized growth about twelve point six percent, twenty twenty four, though, into twenty twenty five.

[SPEAKER_00]: Revenue projections, growth projections slipping off, about five percent, just under five percent growth year over year.

[SPEAKER_00]: Now, they recently recorded Q two earnings, and although they beat estimates, right?

[SPEAKER_00]: They had earnings per share of one forty versus one thirty revenue, eight point three versus about ten percent below that, about eight percent.

[SPEAKER_00]: There's our eight billion.

[SPEAKER_00]: We'll despite that,

[SPEAKER_00]: the stock fell, right, at the end of July.

[SPEAKER_00]: The reason why is because softer than expected growth.

[SPEAKER_00]: And the potential knock on effective tariffs, rising consumer costs, fewer payments to process.

[SPEAKER_00]: Now, on the wake of that, PayPal announced, what was it called?

[SPEAKER_00]: It's called PayPal World.

[SPEAKER_00]: They cross border digital wallet, integrating PayPal and expanding PYUSD their stable coin.

[SPEAKER_00]: So it certainly as, there starts to be new competition within payment processing.

[SPEAKER_00]: PayPal is very aware of that and they are stepping in trying to innovate as well.

[SPEAKER_00]: margins still looking pretty solid higher than twenty-two or z-point nine percent net margin predict to be about fifteen point four percent net margin right now now we hold PayPal for our clients in one of our strategies and you know this is one of those situations where

[SPEAKER_00]: You have a company that is innovating at the forefront, a company that, in spite of revenue growth slowing, their payment volume was up to sixteen percent year over year, right?

[SPEAKER_00]: A bit slower, projected growth than people may want.

[SPEAKER_00]: But when you're getting sixteen percent payment volume growth as a digital payment processing company,

[SPEAKER_00]: And you're trading at twelve times forward looking earnings seems like a pretty good value by there.

[SPEAKER_00]: They have a form they're industry dramatically in twenty twenty four up thirty nine percent that year up twenty two point one percent over the industry under performing pretty much just as much down nineteen point nine percent uh... more than the industry is

[SPEAKER_00]: Overall, we hold PayPal because we think, well, to solid company in an important aspect of the financial economy, and it's trading in a pretty decent price in the fundamentals that's balance sheet, it's income, look pretty solid.

[SPEAKER_00]: A lot of this probably due to some of the risks on the horizon.

[SPEAKER_00]: So we're going to continue to hold PayPal.

[SPEAKER_00]: I think it's a good value trade here.

[SPEAKER_00]: Thanks for the call.

[SPEAKER_00]: Got a lot of ground cover in the next forty five minutes or so and here's a little bit of what we have planned for you all today.

[SPEAKER_00]: My main focus point concerns this topic wages are falling behind inflation leaving many workers struggling.

[SPEAKER_00]: Despite some wage growth, the typical American worker pay has not kept up with the pace of inflation.

[SPEAKER_00]: And so with rising inflation continuing, as it has over the past four years, especially in professions like education, while job growth favors sectors like healthcare and hospitality.

[SPEAKER_00]: We will also touch on other important topics including news out of Jackson Hole with Fed officials said to erase some old policy that tolerated higher inflation.

[SPEAKER_00]: Also talk about the energy sector as there are threats of rising electricity costs at the same time we are cutting renewable subsidies.

[SPEAKER_00]: So, in spite of that, why might wind and solar still do well?

[SPEAKER_00]: Despite subsidies going down, and should we have time at the end of the show?

[SPEAKER_00]: We will touch on how some foreign importers or for other foreign exporters are using free trade zones to get around the end of the de minimise exemption.

[SPEAKER_00]: We have time, uh, rather we also will be answering voice bank calls.

[SPEAKER_00]: We already play one on the pros and cons of a three fifty one exchange and another on broad com.

[SPEAKER_00]: As well as some questions that came in from the comment section of the investor on YouTube channel and hopefully some live calls throughout the show.

[SPEAKER_00]: Go to a new quick break.

[SPEAKER_00]: Please remember you can call any time and leave your questions on the investor talk of voice bank.

[SPEAKER_00]: And if you're listening to your live stream or possibly at a time of twelve twenty in the Bay Area, give me a call now at eighty ninety nine chart.

[SPEAKER_03]: Serious investors are certain to have finance and investment questions.

[SPEAKER_03]: Wanted to get your take on WW Granger.

[SPEAKER_03]: And the best person to ask your question in the right way is you.

[SPEAKER_05]: I was wondering from your standpoint, they're downside in buying fractional shares versus whole shares.

[SPEAKER_03]: And twenty four seven rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

[SPEAKER_04]: The issue, though, is really over the last decade or so.

[SPEAKER_04]: It's never maintained this level of profitability for a long period of time.

[SPEAKER_00]: Modernies are incredibly volatile, so when the going is good, take some profit.

[SPEAKER_03]: Your participation makes an invest talk better.

[SPEAKER_03]: My name is Mike.

[SPEAKER_03]: I'm calling in from Orange County, California.

[SPEAKER_03]: This is Lewis calling from Bolivia.

[SPEAKER_03]: Let's go talk to Chris and me.

[SPEAKER_03]: So don't forget to call, invest talk.

[SPEAKER_03]: First off, great show.

[SPEAKER_03]: I went left with you, too.

[SPEAKER_03]: Hey, date eight, ninety nine chart.

[SPEAKER_03]: If you've heard about the new Invest Talk store, that's right.

[SPEAKER_03]: You'll find great merch for the savvy investor.

[SPEAKER_03]: It's all there for you now at InvestTalkStore.com.

[SPEAKER_03]: Luke Guerrero is here now, taking your finance and investment questions live.

[SPEAKER_03]: Call Invest Talk, eight, eight, nine, nine, chart.

[SPEAKER_00]: Market in the green very green today with a dial up one point eight nine percent S&P five hundred up one point five two percent NASDAQ up one eighty eight and Russell two thousand up three point eight six percent

[SPEAKER_00]: Equitiesh ending sharply higher, broadly snapping a five-day losing streak, and overall, mostly stronger on the week, small caps, with the big beneficiary of a more dovish pal speech and expected over Jackson Hole, which will certainly dive into later in the show.

[SPEAKER_00]: Builders, semi's, retailers, apparel and accessories, among the best performers of the day while consumer staples was the only sector that was lower.

[SPEAKER_00]: The bond side treasuries rallied a bit with the curve steepening yields at the front end of the curve.

[SPEAKER_00]: Down ten basis points in the dollar index was down about one percent.

[SPEAKER_00]: Gold settled up one point one percent on the day crude oil finishing a touch higher up twenty basis points.

[SPEAKER_00]: Overall, big driving force here, the Fed easing expectations, big tail win for resentment on the day.

[SPEAKER_00]: Some type of rate cut probability.

[SPEAKER_00]: Now back over eighty percent versus the seventy percent prior to Chairman Jerome Powell starting his speech.

[SPEAKER_00]: Pretty widely anticipated speech, right?

[SPEAKER_00]: I believe a bit more dovish than was expected and that really explains what you saw in the market.

[SPEAKER_00]: Surging.

[SPEAKER_00]: More AI scrutiny, another theme we saw today with a report that Nvidia has told components and buyers to stop production related to the age of twenty chips.

[SPEAKER_00]: Why?

[SPEAKER_00]: Because China is now pushing for greater use of home grown technology.

[SPEAKER_00]: On the earnings front, overall pretty mixed takeaways still a fairly company specific.

[SPEAKER_00]: In a retail earnings, this is really the dominant force on the calendar with this week.

[SPEAKER_00]: With consumer resilience still being largely intact from a backward-looking basis, though guidance bit mixed across the board.

[SPEAKER_00]: Droom pal was the only one to speak today.

[SPEAKER_00]: Boston's Colin said the Fed can't really wait for all uncertainty to be resolved before making decisions, playing down fears a bit over rising inflation expectations.

[SPEAKER_00]: Now look at the head to next week, new home sales and Dallas Fed Manufacturing will be out on Monday, Tuesday brings durable good orders, FHA housing price index, Richmond Fed Manufacturing and the conference board index of consumer confidence, nothing really coming out on Wednesday doesn't look like, Q to GDP revisions, initial claims and pending home sales will be out on Thursday.

[SPEAKER_00]: And round and out the week on Friday, we'll get July personal income and spending report.

[SPEAKER_00]: The highlight of which will be core PCE inflation.

[SPEAKER_00]: A lot of financial university of Michigan consumer sentiment and inflation expectations for the month of August.

[SPEAKER_00]: Alrighty, let's keep things a pump at a long.

[SPEAKER_00]: Take a look at a question from the comment section of our investment.

[SPEAKER_00]: YouTube channel.

[SPEAKER_00]: This one coming in from our friend Luka.

[SPEAKER_00]: And it's about ticker.

[SPEAKER_00]: Oh, K. E. Just pull this up on my screen over here.

[SPEAKER_00]: Okay, which is one oak is a name that we hold for our clients.

[SPEAKER_00]: It had pretty solid, twenty, twenty, four, a forty, three percent on the calendar year.

[SPEAKER_00]: Great, twenty, twenty, two when a lot of the market was negative up, eleven, twenty, percent, thirty, one percent better than the S&P, five hundred.

[SPEAKER_00]: But you're today, down about twenty, five, four, six percent, in spite of revenue being pretty stellar, right?

[SPEAKER_00]: You've seen revenue growth.

[SPEAKER_00]: At seventeen billion and twenty three up to twenty one point six and twenty four projected we up to thirty two point seven in twenty twenty five.

[SPEAKER_00]: The margin staying pretty solid will be a compressing a little bit projected be ten point four percent this year net margin down from about fourteen percent.

[SPEAKER_00]: One of the big reasons that has driven the three month decline around eight percent well earnings reactions.

[SPEAKER_00]: You did see a bit of acquisitions and operational efficiency, but, you know, you did see near-term rate sensitivity, high capital spending, being a big part of this name.

[SPEAKER_00]: So many six, oh, politics, forty six billion dollar mark in the cabinet, I've got quite a bit of debt, thirty two billion dollars in debt.

[SPEAKER_00]: And so when debt financing becomes a bit more expensive, well, that eats away at your after interest payment.

[SPEAKER_00]: Revenue.

[SPEAKER_00]: And this has really been a structural issue too.

[SPEAKER_00]: Some headwinds in the midstream space because of that capital intensity and pressure on valuations, right?

[SPEAKER_00]: It was training a bit higher.

[SPEAKER_00]: Now it's down to twelve point five percent net margin projected to be about fourteen or rather lower than the four five year average of a fourteen point seven percent.

[SPEAKER_00]: Now, you know, I would say one thing about one oak that we like is it's prevalence within the natural gas space, right?

[SPEAKER_00]: It has huge natural gas revenues processing, natural gas liquids and natural gas pipelines, big presence within the midstream space.

[SPEAKER_00]: It's profitability remains high.

[SPEAKER_00]: It's cash flow incredibly solid.

[SPEAKER_00]: I mean, look at this free cash flow here.

[SPEAKER_00]: three point one four eight billion dollars in free cash flow about one point one one percent this year.

[SPEAKER_00]: Now the reason or rather today.

[SPEAKER_00]: Now the reason why we continue to hold on to one oak for some of our strategies is because of that solid performance.

[SPEAKER_00]: In spite of the debt, which is very well covered by the amount of cash they're bringing in, the amount of revenue they're bringing in, the growth they're seeing, seems to us to just be a bit of a cyclical issue for them here.

[SPEAKER_00]: If natural gas market becomes a bit more compliant, certainly could be a good move, because it is more of a leverage move when you're investing in one oak.

[SPEAKER_00]: That is one oak ticker, okay.

[SPEAKER_00]: All right, because it is Friday, I want to briefly mention the newest KPP premium newsletter, which will be distributed tomorrow.

[SPEAKER_00]: The KPP in the site section, we discussed what we should think about that came out of the Jackson Hole Conference this week.

[SPEAKER_00]: Big, big, big, big, big inflection point always is for markets.

[SPEAKER_00]: As we saw today, so we'll dive into that.

[SPEAKER_00]: Stock idea section, we mentioned a US-based multi-national medical technology company and a multi-national financial services company that is based in Spain.

[SPEAKER_00]: In the portfolio management section, we touched on the philosophy of portfolio management and the importance of rebalancing.

[SPEAKER_00]: If you're interested in learning more, visit us at investalk.com and subscribe.

[SPEAKER_00]: The newsletter will come to your inbox, Saturday afternoon.

[SPEAKER_00]: All right, we're headed into a break first longer break of the day when we come back and we'll answer more of your finance and investment questions and get to the ever important main focus point on wages.

[SPEAKER_00]: Stay with me and give me a call at eight eight ninety nine chart.

[SPEAKER_03]: The calls are free, the unbiased answers are free.

[SPEAKER_03]: So what are you waiting for?

[SPEAKER_03]: Call in Vestag, eight, eight, nine, chart.

[SPEAKER_00]: Now while I have your attention, as you are my captive audience at the moment, I want to tell you a bit of a new series debuting on our Invest talking YouTube channel in Vestag innovators.

[SPEAKER_00]: Justin and I will bring you insightful interviews with company leaders with founders and with visionaries.

[SPEAKER_00]: For our first episode, I spoke with Aaron Bokta, the mind behind Inside Ownership.

[SPEAKER_00]: He highlights how his philosophy of investing in founder-led businesses can offer a real advantage and passes on some of its pretty good practical tips that you do not want to miss.

[SPEAKER_00]: To watch our full interview, visit our Invest Talk YouTube channel today and stay tuned for more conversations with more Invest Talk innovators.

[SPEAKER_00]: Alright, time to talk about the topic at hand, wages.

[SPEAKER_00]: That's because wages are falling behind inflation, leaving many workers struggling.

[SPEAKER_00]: Average pay has risen about one point two percentage points less than the cost of living over the past four years.

[SPEAKER_00]: And understandably, I mean, I know you all feel that as well.

[SPEAKER_00]: Public sentiment's pretty weak, fifty five percent of Americans say the economy is bad, seventy five percent say the income just has not kept up with the pace of inflation.

[SPEAKER_00]: And this affects different types of jobs.

[SPEAKER_00]: differently.

[SPEAKER_00]: Educators are hit the hardest.

[SPEAKER_00]: Teachers face the biggest wage to inflation gap, continuing their longstanding pay disadvantages.

[SPEAKER_00]: Now wage growth is not because of the kindness of your boss's heart, it's because it's dependent on labor market power.

[SPEAKER_00]: If you have more job openings, wages are pushing up.

[SPEAKER_00]: Why?

[SPEAKER_00]: Because there is more demand for workers, labor is a market and less supply human beings doing the job.

[SPEAKER_00]: and so if workers or rather employers are competing for these scarce employees, well wages are going to increase.

[SPEAKER_00]: And this hasn't really been the case, right?

[SPEAKER_00]: Fewer openings, fewer openings, suppress wages.

[SPEAKER_00]: And this persistent gap translates into lost purchasing power.

[SPEAKER_00]: It limits retirement savings, limit toe buying, emergency funds, investing.

[SPEAKER_00]: It affects a lot more than just the individual.

[SPEAKER_00]: It affects the economy more broadly.

[SPEAKER_00]: Now, some jobs had been outpacing.

[SPEAKER_00]: Inflation, leisure and hospitality, health care, eighty-eight percent of recent private sector job growth, being from health care and leisure and hospitality.

[SPEAKER_00]: And so that's benefited from a big post pandemic demand.

[SPEAKER_00]: I don't have to tell anybody during the pandemic, you won't really go in places.

[SPEAKER_00]: They weren't experiencing and utilizing hospitality, leisure and so with that demand, more jobs, competing employers, higher wages.

[SPEAKER_00]: Another thing I don't have to tell you is that Wade satisfaction is a record loss.

[SPEAKER_00]: Only fifty four percent of workers are satisfied with their pay, which honestly probably sounds high to me.

[SPEAKER_00]: And that's the lowest level since twenty fourteen.

[SPEAKER_00]: And this doesn't just affect people on the lower end of the income spectrum, even high income households are facing pressures.

[SPEAKER_00]: You see that with rising credit card delinquencies.

[SPEAKER_00]: You see that with rising auto loan delinquencies.

[SPEAKER_00]: Quality jobs are scarce only seven percent of new jobs pay average wages in twenty twenty five only seven percent Not even double digits what was that number pre twenty thirty thirty eight percent That is a massive gap

[SPEAKER_00]: White-collar fields like finance and business services, they're stuck.

[SPEAKER_00]: They're in a frozen job market.

[SPEAKER_00]: Employee workers can't really move up.

[SPEAKER_00]: The unemployed are struggling to find openings.

[SPEAKER_00]: New graduates are having issues.

[SPEAKER_00]: New MBAs are having issues.

[SPEAKER_00]: And so when you hear OKD economies doing well, this is how I like to explain it.

[SPEAKER_00]: And I explain this to somebody the other day.

[SPEAKER_00]: I think I explained it to a client the other day actually.

[SPEAKER_00]: When people say the economy's doing well, that just means that money is moving around.

[SPEAKER_00]: It doesn't mean that money is moving to you.

[SPEAKER_00]: But the problem is, is when the economy becomes stretched, when it becomes asymmetric, it has effects broadly.

[SPEAKER_00]: Because as consumers that spend don't see their purchasing power maintained, businesses suffer, stock suffer, and so this is a ever-evolving problem.

[SPEAKER_00]: I know I've said it twice and I'll say it again, I don't have to tell you that wages have not kept up with pace of inflation.

[SPEAKER_00]: And with what we're seeing in the labor market, with what we're seeing with fewer job openings, fewer employers being in demand of labor.

[SPEAKER_00]: In the short term, not seeing much of anything that would correct this trend.

[SPEAKER_00]: All right, it is a Friday and on Fridays we'd like to hit you with a list of key benchmark numbers.

[SPEAKER_00]: So let me hit you with that list right now.

[SPEAKER_00]: Two your yields at three point six eight six percent today last week that number was three point seven five seven hundred and a week ago that number was at point six four percent.

[SPEAKER_00]: Ten your treasure yields at four point two five eight percent today compared to last week is at four point three two six and fifty five weeks goes at three point nine two one.

[SPEAKER_00]: Gold was priced at thirty three hundred and seventy one dollars per ounce today thirty five percent increased compared to last week.

[SPEAKER_00]: Well three weeks ago that number was thirty three forty eight and a hundred eighty two weeks ago that number was eighteen oh six silver today thirty eight ninety nine per ounce one set air one dollar increase compared to the last week eighty weeks ago that number was twenty two eighty looking back hundred seventy four weeks silver was twenty three ninety four

[SPEAKER_00]: Oil was selling for sixty-three seventy-seven per barrel today and eighty-four cent increased compared to last week.

[SPEAKER_00]: Forty-eight weeks ago that number was sixty-seven seventy-nine and a hundred and ninety weeks back that number was sixty-six sixty-two.

[SPEAKER_00]: National average for a gallon of regular gasoline is three-fourteen.

[SPEAKER_00]: It is a one-cented decrease compared to last week.

[SPEAKER_00]: One hundred and sixteen weeks ago that number was three fifty-six.

[SPEAKER_00]: One hundred and sixty-four weeks back it was four twenty-five in California.

[SPEAKER_00]: Big number four fifty-one a two-cent increase.

[SPEAKER_00]: For comparison in Kansas, gas is averaging two eighty-two.

[SPEAKER_00]: That is one dollar and sixty-nine cents less than gas in California.

[SPEAKER_00]: already we're heading into yet another break but that doesn't mean that we will not take your calls so if you want to speak to me live before the weekend give me a call at eight eight eight ninety nine chart

[SPEAKER_03]: So weekend is here or almost here, but you've got finance and investment questions, so step up and haul in.

[SPEAKER_03]: Invest talk, eight, eight, nine, chart.

[SPEAKER_00]: On the next investor, we will look into this topic, twelve totally free ways to save money fast and boost your passive income.

[SPEAKER_00]: We will discuss

[SPEAKER_00]: simple and practical strategies to quickly build savings, including cutting unnecessary subscriptions, automated savings, maximizing rewards and other smart money moves.

[SPEAKER_00]: That's Monday, but for now, let's play another fresh-collar question.

[SPEAKER_07]: and the benefits of that process.

[SPEAKER_07]: Thank you very much.

[SPEAKER_07]: Bye.

[SPEAKER_00]: So a three, fifty one exchange is you're essentially taking property, appreciated stock, concentrated position.

[SPEAKER_00]: You are shifting it.

[SPEAKER_00]: You're transferring it to a corporation that you create for an exchange for shares in that corporation.

[SPEAKER_00]: Corp.

[SPEAKER_00]: takes your carryover basis in the property.

[SPEAKER_00]: You take the stock with that same basis.

[SPEAKER_00]: Now, there are some benefits to it, right?

[SPEAKER_00]: You're deferring immediate capital gains taxes.

[SPEAKER_00]: You're allowing diversification within the business.

[SPEAKER_00]: So let's say you take your concentrated shares and whatever your company is and you sell those shares in order to diversify.

[SPEAKER_00]: You're getting that deferred taxes and it gives you control and liability protection, right?

[SPEAKER_00]: You can integrate it with your estate and wealth transfer planning.

[SPEAKER_00]: But they're costs, right?

[SPEAKER_00]: You're getting double taxation because it's a corporate structure.

[SPEAKER_00]: So you're getting a corporate tax rate.

[SPEAKER_00]: You're getting a dividend tax rate.

[SPEAKER_00]: The most important one, I think, for me is you lose your step up and cost basis at death.

[SPEAKER_00]: So your inheritors will not get that step up and cost basis on those assets.

[SPEAKER_00]: And you have ongoing corporate compliance and administrative costs.

[SPEAKER_00]: You have to meet IRS control rules.

[SPEAKER_00]: And so who's it for, right?

[SPEAKER_00]: It's for people that are families, you know, families are closely held groups that are setting up a family investment company.

[SPEAKER_00]: It works well for those.

[SPEAKER_00]: situations where you wouldn't get a step up in cost basis at all is a good situation for there.

[SPEAKER_00]: But you know, for us, we help out clients all the time who are in a situation where they wanted to for taxes, that's the point of the deferred sales trusts that we use the DSTs.

[SPEAKER_00]: And so I think they're just other tools as well.

[SPEAKER_00]: where you can greatly benefit from that deferral without, again, some of those costs, the loss and step of the cost basis, and also the cost of just maintaining compliance and administration.

[SPEAKER_00]: Thanks for the call.

[SPEAKER_00]: All right, let's go with another YouTube comment section question.

[SPEAKER_00]: And this one is a very long one, but you know what, when you take the time to type it out, I am going to take the time to read each and every word of it, and it's from our friend Jimmy Gustafson.

[SPEAKER_00]: It says I don't have any biotechnology in my portfolio since I'm pretty allergic to many of those names.

[SPEAKER_00]: But I thought that there has to be some names that are okay.

[SPEAKER_00]: Good even.

[SPEAKER_00]: I found a name I don't think I've heard of before actually the name of the company is Excellixes.

[SPEAKER_00]: A lot of X's in there.

[SPEAKER_00]: Tell you that.

[SPEAKER_00]: And then it's ticker EX EL for those of you who want to take a look with me.

[SPEAKER_00]: It says the balance sheet, profitability, and growth prospects look very good, I think.

[SPEAKER_00]: For example, I get a peg number of under one, which is very good, R-O-A and R-O-E around thirty, price to sales of four point eight, and a price valued even around twelve.

[SPEAKER_00]: It has very little debt in the average earnings estimate per share this year's two-seventy-one, and next year's three-twenty-one, eighteen point five percent higher.

[SPEAKER_00]: The company is developing and commercializing cancer therapies, and is the producer of Cometrick,

[SPEAKER_00]: which seems to be a medication for a medallory thyroid cancer.

[SPEAKER_00]: Stuff we're gonna say.

[SPEAKER_00]: What can you tell me about this company?

[SPEAKER_00]: Have I missed anything?

[SPEAKER_00]: All right.

[SPEAKER_00]: Let's take a look at this company up.

[SPEAKER_00]: Sixteen point zero.

[SPEAKER_00]: One percent over the past eight months or so.

[SPEAKER_00]: That's a year to date.

[SPEAKER_00]: Number up.

[SPEAKER_00]: Fifty percent ish over the past fifty two weeks.

[SPEAKER_00]: Decent size company not small caps in the mid cap space about eleven billion dollar market cap.

[SPEAKER_00]: Very little debt.

[SPEAKER_00]: We've got a hundred and eighty million dollars in debt.

[SPEAKER_00]: And they've actually been buying back shares since the better part of twenty twenty three.

[SPEAKER_00]: Cashflow, pretty stagnant for a while, improved into twenty twenty five profitability, started to improve a bit as well.

[SPEAKER_00]: Net margin growing from eleven percent to about twenty nine point five percent projected to be about this year.

[SPEAKER_00]: It's an oncology focused biotech, right?

[SPEAKER_00]: They're committed to advancing cancer care through innovative small molecules and emerging biotherapeutics.

[SPEAKER_00]: price earnings for looking price earnings, or rather trailing price earnings, about eighteen times, eighteen point six times for looking price earnings, about twelve point eight.

[SPEAKER_00]: That's near its love over the past five years.

[SPEAKER_00]: And what's really driven the price appreciation that we've seen right up forty, almost fifty percent of the past fifty two weeks.

[SPEAKER_00]: It's bite it at being down about ten percent of the past three months is breakthrough clinical trials.

[SPEAKER_00]: They did have some positive top line numbers.

[SPEAKER_00]: You did see some survival benefits.

[SPEAKER_00]: Relative strength started to grow a little bit of momentum as well.

[SPEAKER_00]: Strong return from a price appreciation perspective from the lows.

[SPEAKER_00]: You see this relative strength really reaching back towards the S&P five hundred a place where it hasn't been since twenty twenty and it's outperforms industry each of the past couple years.

[SPEAKER_00]: Down twenty one basis points though today.

[SPEAKER_00]: Interestingly enough, but I guess if it doesn't finance much of its business with debt, it's not going to benefit from a reduction in interest rates on the short end.

[SPEAKER_00]: As you saw, a lot of small capital intensive companies attended to do.

[SPEAKER_00]: So what do you want to watch next for?

[SPEAKER_00]: Castle Trends.

[SPEAKER_00]: This is a bit of a legal overhang, because there's an ongoing securities class action inquiry that may be a bit of a headwind.

[SPEAKER_00]: And from what you've seen in strength, from a technical basis, a big drop-off at the end of July.

[SPEAKER_00]: Generally, I don't like biotech names, because a lot of them tend to not be very profitable.

[SPEAKER_00]: But if you're comparing forward looking price earnings, I mean, it's a bit on the higher end.

[SPEAKER_00]: Its peg is a bit high, actually on the next twelve month basis.

[SPEAKER_00]: Overall, this is kind of a difficult one.

[SPEAKER_00]: I think that one thing that is giving me a red flag here is the fact that there's about six point four one percent short interest.

[SPEAKER_00]: So, in spite of it being at the low end of its five-year price range, a lot of people still betting against this stock.

[SPEAKER_00]: As always though, these things tend to shoot up pretty quickly.

[SPEAKER_00]: Should clinical trials go well.

[SPEAKER_00]: Like the early stage ones have done, fundamentals of it mixed, optimism of it mixed.

[SPEAKER_00]: Overall, I think it's not a bad company from a fundamental balance sheet perspective, but I was still waiting to see what's going on here, especially with this break in the technical momentum trend.

[SPEAKER_00]: Still a lot of short interest, still a lot of betters against it.

[SPEAKER_00]: That is Excel, Excel, Excel, Excel, Excel, Excel.

[SPEAKER_00]: All right, you have to have a butcher that name three or four times.

[SPEAKER_00]: Let's move over to something that I can pronounce, which is the Fed.

[SPEAKER_00]: which is scrapping its inflation overshoot policy.

[SPEAKER_00]: It's no longer intentionally allowing inflation above its two percent target after a period of low growth.

[SPEAKER_00]: What am I talking about?

[SPEAKER_00]: Well, if you go back to the twenty-twenty, right?

[SPEAKER_00]: When the Fed said those terrible words, which will haunt Jerome Powell for the rest of his life, the inflation was transitory, one of the reasons why they weren't so worried about it is because inflation was historically low in the twenty-tens, and so if you're a long run, target is two percent,

[SPEAKER_00]: and the tens had a one percent inflation.

[SPEAKER_00]: The policy was, the twenty twenty framework was that, you know, we are going to allow inflation to be moderately higher and in a way it's okay because we've had a period of low inflation.

[SPEAKER_00]: That is no longer the rationale here.

[SPEAKER_00]: Right, a decade of sluggish growth and persistently low inflation doesn't make up for a lot or shouldn't be made up for by allowing it to run.

[SPEAKER_00]: While the framework itself that existed before really delayed the Fed's response, and was it the primary driver of inflation?

[SPEAKER_00]: No, of course not.

[SPEAKER_00]: Fed policy wasn't the driver of inflation.

[SPEAKER_00]: Fiscal policy wasn't the driver of inflation.

[SPEAKER_00]: What drove inflation was a once in a century pandemic that crunch supply chains.

[SPEAKER_00]: It was going to happen.

[SPEAKER_00]: Did a slow answer to it?

[SPEAKER_00]: Make it a bit worse?

[SPEAKER_00]: Yeah, probably the tune of one, two percent.

[SPEAKER_00]: But when you're talking about getting up to nine percent inflation at one point,

[SPEAKER_00]: Seven to nine, we're really not going to feel any different there.

[SPEAKER_00]: So, in spite of that, I'd rather be because of that, though, because of the contribution, that's a big change here.

[SPEAKER_00]: And that was formally approved by everybody on the FOMC.

[SPEAKER_00]: Economics is a learn and get better discipline if nothing else.

[SPEAKER_00]: But within his framework, what else do the Fed do?

[SPEAKER_00]: Well, the Fed said, we're still keeping our two percent target here.

[SPEAKER_00]: We are not going to move up our target, but we are emphasizing that our

[SPEAKER_00]: New approach is a straightforward balance between stable prices and maximum employment, putting more emphasis I would say on the labor market than what we've seen in the past couple years.

[SPEAKER_00]: It also provides their employment language.

[SPEAKER_00]: The twenty twenty phrasing of avoiding short falls in employment has been a bit removed.

[SPEAKER_00]: And the reason why is because

[SPEAKER_00]: The general public was saying, OK, we're looking at shortfalls.

[SPEAKER_00]: This is mean the Fed is going to be unwilling to cool an overheated labor market.

[SPEAKER_00]: That's not really the case, right?

[SPEAKER_00]: And so they wanted to move that language, make it far more clear.

[SPEAKER_00]: Interestingly enough, right?

[SPEAKER_00]: The context of this timing, very important, as the Fed is starting to shift away from inflation, more towards the labor market.

[SPEAKER_00]: The update coming is the labor market starting to soften tariffs or threatening renewed inflation.

[SPEAKER_00]: Overall, clearly the market liked big up move on the day.

[SPEAKER_00]: excuse me how to sneeze, and so this is a welcome change.

[SPEAKER_00]: A welcome change that gives more specific guidance for a fed in a time of transition.

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

[SPEAKER_00]: This one came in earlier from San Francisco.

[SPEAKER_08]: This is John from Census field.

[SPEAKER_08]: Thanks for taking my call.

[SPEAKER_08]: I have a question about A, B, G, O. This is Broadcom.

[SPEAKER_08]: I thought this stock back when chip makers were getting kind of destroyed.

[SPEAKER_08]: I'm up a few thousand percent on the stock.

[SPEAKER_08]: I'm just wondering if you think this continues to grow or if we're looking at maybe the sell-off coming up here.

[SPEAKER_08]: Thank you so much.

[SPEAKER_08]: Looking forward to hearing the answer.

[SPEAKER_00]: Broad come had a good couple years here of ninety nine point six percent and twenty three up one hundred and seven point seven percent and twenty twenty four up twenty six point eight percent this year.

[SPEAKER_00]: Great day up one point five two percent.

[SPEAKER_00]: I've eighty one point one percent in the past fifty two weeks.

[SPEAKER_00]: Now, Browncome is a chip company global technology company.

[SPEAKER_00]: They work on semi-conductors and infrastructure software solutions, massive, massive guy, one point three, trillion dollar market cap, cash flow through the roof.

[SPEAKER_00]: They do pay a dividend, which you don't see in a lot of these types of companies.

[SPEAKER_00]: The profitability is starting to fall off at the end of twenty twenty three here.

[SPEAKER_00]: Taking away, you know, interest in taxes, right?

[SPEAKER_00]: You're seeing margins a bit to compress, twenty, twenty, four, that margin was about twelve percent, projected to grow in though back to five, fifty, two, point one percent, and revenue growth.

[SPEAKER_00]: You're seeing it across the industry.

[SPEAKER_00]: Massive, massive, massive demand.

[SPEAKER_00]: But you're up a lot.

[SPEAKER_00]: You're up a lot.

[SPEAKER_00]: And this is sitting at thirty six point six times forward looking earnings, nineteen point six times price to book value.

[SPEAKER_00]: This is pretty much as high as it's been over the past five years.

[SPEAKER_00]: And so, although you could write it out, the risk is still to the downside.

[SPEAKER_00]: You did see a bit of a tech rotation in the past couple of days, obviously everything, but consumer staples was up today.

[SPEAKER_00]: But at a certain point, right, you are priced to a situation such that revenue has to continue to grow the pace.

[SPEAKER_00]: It has given that downside risk, given how much you're up.

[SPEAKER_00]: I think it's a great idea to start to trim a little bit, start to diversify.

[SPEAKER_00]: It doesn't mean you should sell it all.

[SPEAKER_00]: It doesn't mean it's a bad company, but this is for your specific situation.

[SPEAKER_00]: I think you should start your trip.

[SPEAKER_00]: There's a Broadcom Inc.

[SPEAKER_00]: ticker AVGO.

[SPEAKER_00]: No, what?

[SPEAKER_00]: It's making two in a row.

[SPEAKER_05]: Hey Justin, this is Mike from Philly.

[SPEAKER_05]: I was calling to get your guys thoughts on TT train technologies that I just wanted to see if you could take a look at the fundamentals of this company.

[SPEAKER_05]: You know, it's one I've had on my watchers to get a thumbs up.

[SPEAKER_05]: I would be interested in what a good entry point would look like.

[SPEAKER_05]: Thanks for all you guys do.

[SPEAKER_05]: I'll listen on the podcast.

[SPEAKER_00]: You guys are going to ticker on that one.

[SPEAKER_00]: TT, train technologies.

[SPEAKER_00]: There we go.

[SPEAKER_00]: Thank you, gentlemen.

[SPEAKER_00]: Alright, TT is train technologies and I will be remiss if I do not say go birds as that man is from Philadelphia.

[SPEAKER_00]: Let's take a look at this company.

[SPEAKER_00]: So train technologies is a building's home and transportation solutions company.

[SPEAKER_00]: It is headquartered in Ireland.

[SPEAKER_00]: It is not a US company.

[SPEAKER_00]: And a lot of it's revenue though still does come from the United States, seventy four percent of it's revenue from the United States.

[SPEAKER_00]: Been on a tear over the past six years compared to the S&P five hundred.

[SPEAKER_00]: Not a good comparison because obviously it's an Irish company, but still goes a good price appreciation perspective there for us.

[SPEAKER_00]: Also really well compared to its industry over that same time period.

[SPEAKER_00]: And one of the reasons why I pretty stable growth, right?

[SPEAKER_00]: Not blow you out of the part growth, but it's pretty stable growing on the last pretty solid margins as well.

[SPEAKER_00]: Take a look at its name competitors here though.

[SPEAKER_00]: for looking price earnings very expensive return on equity all on higher thirty eight point nine percent return on equity earnings for share growth year over year twenty eight point two percent is a reason why this company is trading so high at twenty nine point nine times for looking at its twelve times price to look value twenty nine point four times price to cash flow but

[SPEAKER_00]: Always a butt.

[SPEAKER_00]: You can't ignore the fact that it is incredibly expensive.

[SPEAKER_00]: It has run up a lot to the point where its valuation is a bit stretched and with a potential slowdown and construction air conditioning systems, transport refrigeration, all of these things should demand for cooling databases.

[SPEAKER_00]: Hey, I slow down.

[SPEAKER_00]: This stands to slow down a bit as well.

[SPEAKER_00]: Q three earnings looks like it's only out in October.

[SPEAKER_00]: So interesting to see how momentum continues there.

[SPEAKER_00]: But, you know, one of the big benefits is it's a bit insulated from the tariff situation.

[SPEAKER_00]: And that's also why you're going to pay a premium here.

[SPEAKER_00]: Overall, I like the company, maybe a little bit stretched, a bit certainly a solid performer, they solid balance sheet.

[SPEAKER_00]: And you know what they buy back a bunch of shares, they got a bunch of cash flow, little expensive, but I tend to like it.

[SPEAKER_00]: That is train technologies, ticker, TT.

[SPEAKER_00]: This is Invest Talk.

[SPEAKER_00]: I'm Luke Guerrero.

[SPEAKER_00]: We have one goal here to help you achieve your financial freedom.

[SPEAKER_00]: Our work continues after this break.

[SPEAKER_00]: So get your questions in now at eight, eight, eight, and ninety-nine chart.

[SPEAKER_00]: And don't forget to head over to InvestTalk.com if you're interested in our newsletter.

[SPEAKER_00]: That will hit your inbox on Saturday afternoon.

[SPEAKER_03]: in Vestag.

[SPEAKER_03]: Tell your friends they can listen live, download the free podcast, or watch in Vestag on our YouTube channel.

[SPEAKER_03]: And they can leave their finance and investment questions any time on eight, eight, nine, chart.

[SPEAKER_06]: Hello, this is Mike from Cincinnati.

[SPEAKER_06]: Thanks for everything you do for us on the show.

[SPEAKER_06]: If you appreciate it, do you have a question about tickets, symbols, C, O, S, T, that C, O, S, C, C, Costco.

[SPEAKER_06]: I really like this company.

[SPEAKER_06]: I have a small position already.

[SPEAKER_06]: I'm just wondering what you would think of a good support level for the next time to buy M would be.

[SPEAKER_06]: Thank you for everything you do, have a good day.

[SPEAKER_00]: Now, if you are a frequent listener of the show specifically, if you listen to episodes where I'm the host, or we're just an anti-aird host, you know I love Costco.

[SPEAKER_00]: I love Costco.

[SPEAKER_00]: It's where I shop.

[SPEAKER_00]: It's where I get my food.

[SPEAKER_00]: I love me some roach history chicken.

[SPEAKER_00]: I've been eating a less of it for sake of my heart.

[SPEAKER_00]: But it's also a company that we own for our clients and of own for quite some time.

[SPEAKER_00]: I think I think we bought it back around the around four eighty ish level.

[SPEAKER_00]: Yeah, and about twenty twenty three and

[SPEAKER_00]: Costco's been a runner.

[SPEAKER_00]: It has consistently beats or performed at its industry.

[SPEAKER_00]: Fast five years, six years.

[SPEAKER_00]: It's performance has been stellar going back to the two nineteen.

[SPEAKER_00]: Now this year it's lagging a bit.

[SPEAKER_00]: Four point six one percent underperforming the S&P five hundred by five point three.

[SPEAKER_00]: It's industry by two point seven.

[SPEAKER_00]: But it's a great company.

[SPEAKER_00]: Costco is a wholesale company.

[SPEAKER_00]: You need a membership for those of you who don't know.

[SPEAKER_00]: They have their food court.

[SPEAKER_00]: They have gasoline, which makes up hundreds of millions of dollars of revenue every year.

[SPEAKER_00]: But the key thing I said first, right?

[SPEAKER_00]: And those memberships.

[SPEAKER_00]: And that's why Costco trades at a premium to a lot of these retailers.

[SPEAKER_00]: Costco is an expensive name.

[SPEAKER_00]: Trading at forty eight point four times for looking at earnings right now.

[SPEAKER_00]: For a wholesale retailer,

[SPEAKER_00]: little bit of it's average over the past five years but over the past five years it's rain just twenty point nine to forty fifty six point now why does it trade this high because a lot of its revenue is locked in membership fees loyal loyal members

[SPEAKER_00]: And that means at a time when consumers are pairing back spending, Costco doesn't get hit as much.

[SPEAKER_00]: Because a lot of their revenue is taken up front.

[SPEAKER_00]: Then on top of that, how prolific their gas stations are.

[SPEAKER_00]: They are building somewhere in Southern California, I can't remember, a pilot gas station that has no store.

[SPEAKER_00]: Because they have realized that they can provide at cost a lot lower than a lot of other gas stations because of their scale.

[SPEAKER_00]: Great gas.

[SPEAKER_00]: And so I like Costco.

[SPEAKER_00]: I like shopping there.

[SPEAKER_00]: I like the company.

[SPEAKER_00]: It is a bit expensive now.

[SPEAKER_00]: We did trim a bit for some of our clients around the, around the thousand level.

[SPEAKER_00]: And it was hit a little bit today, right?

[SPEAKER_00]: There has been mixed signals, mixed issues from retailers that certainly you can't ignore.

[SPEAKER_00]: I don't think it's a name that you want to sell right now, but certainly the trend is a little bit towards the downside since May.

[SPEAKER_00]: So I'd start to see where there'd be a good support level here.

[SPEAKER_00]: Maybe if it gets back down to nine hundred to nine fifteen, that's when I would start to maybe buy a little bit up here.

[SPEAKER_00]: But either way, Costco has been on a tear likely to continue.

[SPEAKER_00]: Great company.

[SPEAKER_00]: Pretty expensive.

[SPEAKER_00]: It's still good company.

[SPEAKER_00]: That's take your COST Costco wholesale corporation.

[SPEAKER_00]: Now the end of the diminimus exemption, a eight hundred dollar diminimus exemption, meaning for goods underneath eight hundred dollars.

[SPEAKER_00]: You don't pay any import taxes.

[SPEAKER_00]: ended on August twenty-night, their rather will end on August twenty-night.

[SPEAKER_00]: And so you've seen as a lot of brands turning to FTC's foreign trade zones.

[SPEAKER_00]: That's something authorized in nineteen thirty-four were companies defer tariff payments until goods leave the zone, meaning you could bring them into the country.

[SPEAKER_00]: Then when you sell them that's when you start to pay the tariffs.

[SPEAKER_00]: A lot of these companies tend to be in the apparel and beauty brands.

[SPEAKER_00]: And you know goods can be stored indefinitely.

[SPEAKER_00]: You could keep them there hoping that maybe later on tariffs will be a lower.

[SPEAKER_00]: Importers though are charged tariffs at the rate when goods enter the FTC not when they are shipped.

[SPEAKER_00]: Shabbat a major e-commerce fulfillment provider has doubled its FTC warehouse space and plans rapid expansion in coming months.

[SPEAKER_00]: And so with the end of an exemption that has been in place for quite some time, you see there are ways that companies are trying to go around immediately paying the costs of importing goods, finding the companies that help sellers save can greatly benefit your portfolios.

[SPEAKER_00]: Alrighty, I'm Luke Guerrero.

[SPEAKER_00]: This completes another invest talk program of today's show.

[SPEAKER_00]: Maybe you think about your financial picture, your investments, your taxes, your retirement.

[SPEAKER_00]: And you know what if it's really all working together?

[SPEAKER_00]: Because it's about having a cohesive plan.

[SPEAKER_00]: The KVP we offer no cost portfolio reviews to help bring clarity and confidence.

[SPEAKER_00]: It's going to invest.gov.com, invest.com, and click the portfolio review button we love talking to you just as much as we love talking to you live on the show.

[SPEAKER_00]: Justin, I thank you for listening and encourage you to tell your friends and family members about our free podcast downloads, which you and they can get at iTunes or Spotify or head over to our YouTube channel to take a look at our shows and our exclusive YouTube content.

[SPEAKER_00]: Independent thinking?

[SPEAKER_00]: Sure, it's success.

[SPEAKER_00]: This is Invest Talk.

[SPEAKER_00]: Enjoy your weekend.

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