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

[SPEAKER_05]: Independent Thinking, shared success.

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

[SPEAKER_05]: Here is KPP Financial Portfolio Manager, Luke Guerrero.

[SPEAKER_02]: Good afternoon, fellow investors, and welcome back to Invest Talk.

[SPEAKER_02]: I'm your host, Lou Guerrero, and today is Tuesday, September, second, twenty, twenty, five, and I know this is crazy.

[SPEAKER_02]: The month of August, it's already gone.

[SPEAKER_02]: We are already in December, well into the second half of twenty, twenty, five, and almost just around the corner, a new year.

[SPEAKER_02]: Therefore, especially given historically what has happened in this month, now is not the time to lose focus.

[SPEAKER_02]: And so we here at invest.gov, one goal, one mission, one objective for this podcast for all of the content we put out on YouTube and on Instagram, that is to help you become a better investor.

[SPEAKER_02]: We want to help you understand market dynamics, especially how they might affect your portfolios and therefore affect your lives.

[SPEAKER_02]: As always, we bring to the table and make sure of educational and actionable items.

[SPEAKER_02]: But you also bring something to you are a very important part of this show by supplying us with your finance and investment questions.

[SPEAKER_02]: Through that, we start to understand better what you care about.

[SPEAKER_02]: Now, just a bit, I'm going to talk about today's market performance and run down those show topics that I have for you today.

[SPEAKER_02]: But let's tackle this color question now.

[SPEAKER_00]: Anyway, I wanted to see what you thought about a stock by the name of some, I believe it's an previous technology.

[SPEAKER_00]: The tip of symbol is an mpx.

[SPEAKER_00]: I already own a little bit of this right now, but the luck that I should be doing more, just want to get your opinion on the company.

[SPEAKER_00]: Thank you so much.

[SPEAKER_02]: Ampreus Technologies is ticker AMPX, the developed manufacturer and market high, ultra high energy lithium ion batteries using a bunch of technology for various industries, aerospace drones, electric vehicles, other mobility applications as well.

[SPEAKER_02]: Oh, excuse me, a little bit of allergy issues.

[SPEAKER_02]: Now over the past six months, this company has done particularly well.

[SPEAKER_02]: With as year, there are at five, hundred and eighty four percent up, one hundred and sixty one percent year to date sales growing tremendously from about four point six billion back in

[SPEAKER_02]: twenty twenty up to about sixty five billion words projected to be this year though still not making any money net margin tremendously negative over the past five years continuing projected to be negative into twenty twenty five even though the stock is done really well right the IPO back in the end of honestly just about three years ago right September sixeenth of twenty twenty two

[SPEAKER_02]: Big jump on their IPO still have not made it back to that price split adjusted thirteen dollars share currently trading at seven dollars and thirty two cents the share now what is driven this price higher of the past three months well they did power a sixty seven day continuous flight

[SPEAKER_02]: using their ultra high energy batteries, right?

[SPEAKER_02]: That is one of the most difficult parts of a green energy transition of electric vehicles of autonomous drones.

[SPEAKER_02]: It's the efficiency of the batteries.

[SPEAKER_02]: They've had pretty strong traction and deliveries.

[SPEAKER_02]: They've been expanding their manufacturing base as well.

[SPEAKER_02]: And then on a more broad scale, right?

[SPEAKER_02]: They're shifting towards

[SPEAKER_02]: A rather away from the development phase of their business more towards the commercialization part of their business.

[SPEAKER_02]: They also have integrated and have some contracts with big companies like Amazon through their Amazon devices climate tech.

[SPEAKER_02]: Accelerate.

[SPEAKER_02]: Now, over the next couple of months, right?

[SPEAKER_02]: What do you want to look for?

[SPEAKER_02]: You want to look for more visibility.

[SPEAKER_02]: You want to look for increasing technical scale.

[SPEAKER_02]: You want to look for upcoming earnings set to be reported in middle of November.

[SPEAKER_02]: But for me, right?

[SPEAKER_02]: This is a company that has issued a bunch of shares.

[SPEAKER_02]: Even since the IPO, up from eighty million to a hundred and twenty million.

[SPEAKER_02]: It's company that has almost eleven percent short interest out there.

[SPEAKER_02]: It's not making any profits.

[SPEAKER_02]: It is, it's a small guy, one billion dollar market cap company.

[SPEAKER_02]: Those tend to do poorly in inflationary environments and from a manufacturing inflationary standpoint, that could be where we are more likely to be headed.

[SPEAKER_02]: Steve used to say, and I tend to agree, don't invest in companies that are losing money.

[SPEAKER_02]: This is one of those companies.

[SPEAKER_02]: I know it looks super juicy, five hundred and eighty-four percent of the past year.

[SPEAKER_02]: A lot of risk out there, a lot of risk.

[SPEAKER_02]: That is Ampereous Technologies, Take Your AMPX.

[SPEAKER_02]: Got a lot of ground to cover it in the next forty-five minutes or so and here's a little bit of what we have planned.

[SPEAKER_02]: My main focus point concerns this topic how a Fed interest rate cut could impact your finances soon.

[SPEAKER_02]: An anticipated Fed rate cut this month could lower borrowing costs reduce savings yields and influence mortgage rates.

[SPEAKER_02]: Also, we'll touch on consumer spending, came in a bit strong, but correlation, a bit warm, especially on services.

[SPEAKER_02]: We'll also touch on the end of the de minimus exemption, what that means for businesses, what that means for you.

[SPEAKER_02]: It should be of time with the end of the show, an interesting story on, uh, interesting is a good word, a little creepy, meta creating flirty chat bots of Taylor Swift and other celebrities, and surprise the price.

[SPEAKER_02]: They did not ask for permission.

[SPEAKER_02]: We also have some voice bank questions ready to play, including one on D-listed stocks, and another on the Yield Max Ultra option income strategy, ETF, ticker UL, T-Y.

[SPEAKER_02]: We also will have some questions that came in from the comments section of the Invest Talk YouTube channel.

[SPEAKER_02]: And of course, I welcome your Finance and Investment Questions now or any time throughout the show.

[SPEAKER_02]: Or head it into a break.

[SPEAKER_02]: It's a quick one.

[SPEAKER_02]: It's our first one.

[SPEAKER_02]: And when we come back, we'll answer more of your questions.

[SPEAKER_02]: Talk about that main focus point and hopefully get a live called directly from you.

[SPEAKER_02]: If you're listening to our live stream or possibly on AM-Twelve-Twenty in the Bay Area, give me a call now at eight eight eight and ninety nine chart.

[SPEAKER_06]: The Invest Talk phone lines never close and now Luke Guerrero is here taking your calls live.

[SPEAKER_06]: Invest Talk.

[SPEAKER_02]: Sock a little bit about the market today, the first trading day of the month of September.

[SPEAKER_02]: How to do?

[SPEAKER_02]: Pretty negative, open big down, down big rather early on.

[SPEAKER_02]: Claude, it's way back a bit.

[SPEAKER_02]: The Dow finished down, fifty five basis points, S&P, five hundred down, sixty nine basis points, Nasdaq down, eighty two, Russell two thousand down, sixty.

[SPEAKER_02]: Big Tech, among the worst performers of the day, though towards the end of the day right, as with most stocks, finishing well off of the lows that we saw early on in the trading session.

[SPEAKER_02]: Semis, another under performer on the day, chemicals, credit cards, banks, private equity home builders, some of the worst performers, energy staples, precious metal miners, managed care, biotech, managed care retail, all doing pretty well today relative to the rest of the market.

[SPEAKER_02]: On the bond side, treasury is under pressure yet again yields up four to five basis points yields.

[SPEAKER_02]: On the third of your bond actually briefly went above that five percent level.

[SPEAKER_02]: Some of it we haven't seen maybe in a couple months.

[SPEAKER_02]: I don't know time to kind of flows together these days.

[SPEAKER_02]: Dollar decks up sixty basis points gold finished up two point two percent putting it at a fresh record close above thirty five hundred dollars an ounce and crude oil settled up about two point five percent.

[SPEAKER_02]: as well.

[SPEAKER_02]: The theme of the day seemed to me probably to be risk off, right?

[SPEAKER_02]: We see that in September, it is a month that typically does not do well for stocks.

[SPEAKER_02]: You had fiscal pressures, you had political instability, remaining front and center, not just in the US, but globally.

[SPEAKER_02]: Well, analysts are also citing other factors, right?

[SPEAKER_02]: You've got Fed and Appendence Risk, give upward pressure on inflation and inflation expectations.

[SPEAKER_02]: You have a resilient enough economy that isn't quite beleaguered by anything, but certainly doesn't appear to be as robust as it was.

[SPEAKER_02]: tariffs also, big focus today.

[SPEAKER_02]: The IEPA ruled either Friday, I think it was Friday night, that the tariffs implemented by the President are illegal and breaches the authority that he is calling the illegal authority he said he's using to implement them, but they will remain in effect for now as the case is likely set to go to the United States Supreme Court.

[SPEAKER_02]: Now, what that being said, right?

[SPEAKER_02]: Wall Street is expecting the administration to just use other strategies to offset tariffs that have been deemed illegal.

[SPEAKER_02]: There are also some published hair for Marx from the Trump administration.

[SPEAKER_02]: The US holding back imposing secondary sanctions on China despite saying that those countries that would provide support to Russia may be hit with those sanctions.

[SPEAKER_02]: You also, as I mentioned, had the focus on seasonal headwinds, right?

[SPEAKER_02]: September is by far the worst month of the year for stocks.

[SPEAKER_02]: Now, in the economic calendar, we have ISM manufacturing index of forty-eight point seven, slightly below the consensus of forty-nine point two.

[SPEAKER_02]: New orders, back in expansion territory, will prices paid index, little bit improved to the lowest since February, the employment index.

[SPEAKER_02]: Also slightly improved, but remain near last month level that was tied for the lowest since June of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of

[SPEAKER_02]: Looking ahead to the rest of the week on Wednesday, we get Jolts job openings, factory orders, and the Fed beige book, those are the highlights.

[SPEAKER_02]: ADP private payrolls, final queue to non-farm productivity and unit labor costs, as well as initial claims, trade balance and ice and services, all set for a busy, busy Thursday, and rounding out the week on Friday will be the August Employment Report.

[SPEAKER_02]: Okay, let's take a look at our next question.

[SPEAKER_02]: This one hot off the presses from our YouTube comment section.

[SPEAKER_02]: As a reminder, not only do we post the question answers, or you can see the charts, the focus points, all these things on YouTube.

[SPEAKER_02]: We also have YouTube specific content, various series, the classroom series, is something that was popular that we're starting up again.

[SPEAKER_02]: The aim to continue the education outside of our traditional podcast format.

[SPEAKER_02]: And so when you're over there, if you have a question, you can leave it in the comment section of our YouTube channel.

[SPEAKER_02]: This one comes from John from Oregon.

[SPEAKER_02]: It says, what are your thoughts on OKE near a fifty-two week low?

[SPEAKER_02]: What do you thought's in the next couple of years is this a good buy point?

[SPEAKER_02]: Okay, he is one oak ink.

[SPEAKER_02]: It engages in gathering processing and facilitating the transportation storage and marketing of natural gas.

[SPEAKER_02]: It is a forty billion dollar market cap company has about thirty one billion in debt.

[SPEAKER_02]: So there is a lot of leverage for this company.

[SPEAKER_02]: But it's at a rough year.

[SPEAKER_02]: As have a lot of natural gas names, right?

[SPEAKER_02]: It's down, twenty five point six eight percent a year to date.

[SPEAKER_02]: So one of those midstream energy infrastructure names.

[SPEAKER_02]: It's headquartered in Oklahoma.

[SPEAKER_02]: Again, fairly large name, a lot of broad exposure to the US region.

[SPEAKER_02]: And some of the things that really affected it over the past three months is the earnings in acquisition gains, right?

[SPEAKER_02]: They reported profit, they lifted gains from recent acquisitions.

[SPEAKER_02]: But at the same time you have, and again, that's why it's only down ten percent of the past three months compared to twenty five percent year to date, you do still have some weaker structural issues within the natural gas space that has made it problematic for companies such as these, a lot of natural gas names are not doing well.

[SPEAKER_02]: Now, compared to its industry, down even works down, twenty three point five percent relative to its industry that's after outperforming by six point four percent last year.

[SPEAKER_02]: And so, you know, what should we be looking for for this type of name?

[SPEAKER_02]: Well, you want to be looking at capacity utilization.

[SPEAKER_02]: There are a lot of projects in the pipeline, no pun intended.

[SPEAKER_02]: What does that debt financing look like?

[SPEAKER_02]: I know that might have a lot of debt that's refinancing in this period of time.

[SPEAKER_02]: But it does look pretty cheap, right?

[SPEAKER_02]: It's trading at twelve point nine times for looking earnings, price to book two point two times.

[SPEAKER_02]: I need solid company.

[SPEAKER_02]: It's a name that we have owned on and off for clients.

[SPEAKER_02]: We do continue to own it for clients.

[SPEAKER_02]: I'll be at a smaller weight just because of how we're distributing our energy weight across our various strategies.

[SPEAKER_02]: But it is more than anything, a victim of its leverage.

[SPEAKER_02]: Meaning that in times or strictly things aren't going as well for the natural gas space, it's going to do worse, but really just the cyclical nature of the industry and the dynamics of the natural gas market as well.

[SPEAKER_02]: And so from a long-term perspective, given the energy demands from a cat-backs from all these different companies, and generally just growing energy demands, broadly having a mid-stream name like this over the long-term can certainly be beneficial.

[SPEAKER_02]: That is, one oak ticker, okay.

[SPEAKER_02]: Move it into a break, still to come.

[SPEAKER_02]: I made focus point.

[SPEAKER_02]: A lot of stocking points and more answers to your questions.

[SPEAKER_02]: I encourage you to call now.

[SPEAKER_02]: The Invest Talk Any time Listener line is eight, eight, ninety nine chart.

[SPEAKER_06]: Twenty twenty five rolls on and you've got financial investment questions for Justin Klein and Luke Guerrero call in Vestock eight eight eight ninety nine chart eight eight ninety nine chart is the number if you want to get through some time before five p.m.

[SPEAKER_02]: and talk to me live

[SPEAKER_02]: Alright, let's move to our main focus point today.

[SPEAKER_02]: And that is about the Federal Reserve and about interest rates.

[SPEAKER_02]: Namely, how we fed interest rate cut can impact your finances.

[SPEAKER_02]: The reason why this is relevant is coming out of the meeting in Jackson Hole and with subsequent conversations with various Fed governors and based upon what the market is pricing, there is a high likelihood that we are going to see a Fed rate cut this.

[SPEAKER_02]: September.

[SPEAKER_02]: Now, it still does depend on incoming economic data, but again, the market has pretty much made up its mind here.

[SPEAKER_02]: And when this initially was priced in this optimism, this devish turn, well, the DASER J-HATE hundred points, right?

[SPEAKER_02]: They hit a record high, investors cheered what hopefully was, but, in my opinion, is unlikely to be a quarter-turned, fine.

[SPEAKER_02]: Now, what happens when the Fed cuts rates?

[SPEAKER_02]: Because the Fed is focused on the short end of the curve, right?

[SPEAKER_02]: The overnight lending rate.

[SPEAKER_02]: It's one of the instruments they have for controlling growth within the market.

[SPEAKER_02]: Well, savings rates CD rates, those are likely to drop, especially for new deposits.

[SPEAKER_02]: If you already have a CD, a certificate of deposit with a bank, if you already have a fixed rate instrument, well, that's going to remain unchanged, right?

[SPEAKER_02]: It's going to be whatever the rate is in the covenant for that specific instrument.

[SPEAKER_02]: We're just worried about new issuances here.

[SPEAKER_02]: Now online banks, online banks may still continue to offer better yields.

[SPEAKER_02]: And they might be slightly lower, but given what they're trying to, rather what they're up against, right?

[SPEAKER_02]: Trying to pull competitively, aggressively from traditional bank deposits, you could see online bank yields falling by less than your traditional banks.

[SPEAKER_02]: Now on the opposite side, right?

[SPEAKER_02]: What if you are borrowing money?

[SPEAKER_02]: Well, if you're borrowing money and you had a fixed rate loan, you are at a luck.

[SPEAKER_02]: Your interest rate is not going to go down.

[SPEAKER_02]: However, if you're on a variable rate loan, meaning that it moves up and down as the prevailing markets interest rate does, well, you could see a little bit of a decrease as the Fed starts to cut

[SPEAKER_02]: rates, but it's also important to note, right?

[SPEAKER_02]: Things don't always just happen right at once, just because the Fed is moving their target range doesn't mean that okay the next day all rates will fall.

[SPEAKER_02]: Personal loan rate rates can lag.

[SPEAKER_02]: They tend to drop more slowly and depend more heavily on what bucket you're already in with respect to credit worthiness.

[SPEAKER_02]: Now, most people's form of debt that they take on is credit card debt.

[SPEAKER_02]: Always, the best idea to pay off every month.

[SPEAKER_02]: But if you're the type of person that maybe got away from them, you have interest bearing revolving credit card debt.

[SPEAKER_02]: Well, that's likely to fall as well.

[SPEAKER_02]: But again, only slightly, probably still going to average over twenty percent

[SPEAKER_02]: even after the rate cut making it critical for you if you're trying to plan for your financial future to first work on getting rid of this high yield revolving credit card debt.

[SPEAKER_02]: Interestingly enough one of the strategies for this going to the credit card company and asking for a lower rate.

[SPEAKER_02]: Let's put it this way.

[SPEAKER_02]: If you're lending somebody money and now they could go out and get a new loan for cheaper than what you have given them in terms of the rate.

[SPEAKER_02]: Would you just lower it without them asking no and that's why sometimes you go to these companies, you go to these companies directly, it's more effective, many customers succeed with this approach.

[SPEAKER_02]: Now the one that you're probably the most interested in is the one that unfortunately I don't have the best news about and that is mortgage rates, right?

[SPEAKER_02]: We talk about this all the time.

[SPEAKER_02]: What is locking people in to their homes, people who want to downsize, people who want to upgrade, people who can't purchase a new home in the first place.

[SPEAKER_02]: And a lot of the times that is the mortgage rate.

[SPEAKER_02]: We have seen a historic level of new homes being sold relative to existing homes.

[SPEAKER_02]: And the reason for that is people in existing homes generally don't have seven percent mortgages right now.

[SPEAKER_02]: They don't have six and a half seven percent mortgages.

[SPEAKER_02]: A lot of most mortgages are down four percent and lower.

[SPEAKER_02]: And so a lot of those people would love for interest rates to come down so they can refinance or perhaps even move.

[SPEAKER_02]: They're currently locked in.

[SPEAKER_02]: Well, the reality is you're probably not going to see mortgage rates.

[SPEAKER_02]: fall much.

[SPEAKER_02]: Why?

[SPEAKER_02]: Talked about it at the top.

[SPEAKER_02]: The Fed is focused on the shorter end of the curve.

[SPEAKER_02]: That's not where mortgage rates are.

[SPEAKER_02]: Think about the mismatch there.

[SPEAKER_02]: Most people are taking ten, fifteen, mostly thirty year fixed mortgages.

[SPEAKER_02]: So, you know, zero to three months, not really going to affect that overnight, not really going to affect that.

[SPEAKER_02]: And so, that's predominantly tied to the ten year treasure yield, to the thirty year yield.

[SPEAKER_02]: And that's just something that the Fed does not control.

[SPEAKER_02]: Here's the most key part here, right?

[SPEAKER_02]: As we've seen historically empirically over decades, just because the Fed may be cutting rates now, doesn't mean it'll continue cutting rates in the future.

[SPEAKER_02]: because it is acting in a way that again is data dependent.

[SPEAKER_02]: And should inflation be persistent?

[SPEAKER_02]: Should fiscal pressures start to weigh really heavily on the long end of the curve as we're taking on more and more debt with record deficits?

[SPEAKER_02]: Well, this could keep a lot of these things at bay as well.

[SPEAKER_02]: It could lessen the effect that you could see with your finances, specifically on the one that we all are looking for the most, those darn mortgage rates.

[SPEAKER_02]: All right, well, one thing that I do want to talk about is what we are going to be discussing on the next invest talk.

[SPEAKER_02]: That topic will be a general how generation X faces a unique retirement calendar challenges.

[SPEAKER_02]: So the question is, can they catch up?

[SPEAKER_02]: Research agent planning, Gen X still has a path to financial security, but they have to overcome significant retirement hurdles, including limited savings and rising debt levels.

[SPEAKER_02]: That's tomorrow, but for now, we still have way more to talk about and I'm glad the one who will be talking to you about it.

[SPEAKER_02]: We are ready to take your calls anytime at eight, eight, nine, nine chart.

[SPEAKER_06]: The calls are free, the unbiased answers are free.

[SPEAKER_06]: So what are you waiting for?

[SPEAKER_06]: Call in Vestock, a-day, ninety-nine, chart.

[SPEAKER_01]: Hey, good morning and Vestock.

[SPEAKER_01]: Love the show.

[SPEAKER_01]: Steven here from Orange County, California.

[SPEAKER_01]: Wanted to ask your opinion on yield max ETFs.

[SPEAKER_01]: For those of us without a lot of knowledge or capital to invest in options, what do you think of symbol ULTI?

[SPEAKER_01]: Why?

[SPEAKER_01]: This is a

[SPEAKER_01]: ETF that pays weekly dividends and it's been around ten cents for the last couple months.

[SPEAKER_01]: I've been in it for just over a month.

[SPEAKER_01]: I'm actually down as far as the purchase price, but I'm starting to see the dividends roll on here every week.

[SPEAKER_01]: I have it at a Roth IRA.

[SPEAKER_01]: I just wanted your opinion on it.

[SPEAKER_01]: I've got about a two percent allocation to this fund.

[SPEAKER_01]: And I'm thinking of increasing it maybe two out three to four percent.

[SPEAKER_01]: Thanks so much.

[SPEAKER_01]: Bye.

[SPEAKER_02]: ULT-Y is the yield max ultra option income strategy ETF.

[SPEAKER_02]: It is a strategy that became pretty popular in the past couple years.

[SPEAKER_02]: We actually have a strategy similar to this at KPPP, but one too many peas in there.

[SPEAKER_02]: And it is a covered call strategy.

[SPEAKER_02]: So for those of you who do not know what a covered call strategy is, you own an asset.

[SPEAKER_02]: And then you write a call option, you sell a call option on that asset.

[SPEAKER_02]: Now, the benefit to you is you get that premium income, right?

[SPEAKER_02]: The downside is, as well, if the price goes above that call price that you wrote there, well, then the investors are going to want to buy those shares from you.

[SPEAKER_02]: And so you are therefore capped

[SPEAKER_02]: on the upside, but with that premium income, you get some sort of hedge to the downside.

[SPEAKER_02]: So in years like this year, the year before, you know, twenty, twenty, twenty, twenty, four, not going to do as well as the market because you are capped on that upside.

[SPEAKER_02]: In years like twenty, twenty, two, market down broadly, you can do pretty well from a relative perspective.

[SPEAKER_02]: And so when you're thinking about different covered call strategies, it's about

[SPEAKER_02]: Are you trying to minimize risk by still good but still get some equity exposure?

[SPEAKER_02]: And are you looking for income?

[SPEAKER_02]: Because the real benefit here is the premium income that you can get.

[SPEAKER_02]: Now this particular strategy is a bit on the expensive side.

[SPEAKER_02]: One point three percent is the net expense ratio.

[SPEAKER_02]: which is kind of expensive.

[SPEAKER_02]: But then again, if you're riding a weekly monthly, I don't know how frequently they write, the call option on here.

[SPEAKER_02]: But if you're riding calls, it can be pretty expensive to maintain fun.

[SPEAKER_02]: Now, it has a lot of assets in our management, about three billion, three point two billion under management.

[SPEAKER_02]: It's been around for

[SPEAKER_02]: quite some time actually.

[SPEAKER_02]: No, it's only been around for about a year and a half at this point.

[SPEAKER_02]: But again, this was launched after the big craze when covered call funds were doing particularly well.

[SPEAKER_02]: Now from a market cap perspective, actually pretty well balanced, right?

[SPEAKER_02]: You're still getting sixty percent exposure to large caps, but you're getting twenty eight percent exposure to the mid cap space.

[SPEAKER_02]: A lot of these names though, interestingly enough,

[SPEAKER_02]: aren't names that I would generally expect to see as the top holdings here.

[SPEAKER_02]: Apple I've in Corb Rocket Lab Corporation upstart holdings.

[SPEAKER_02]: These are names that are more likely to have a lot of volatility.

[SPEAKER_02]: So you know, you probably are going to be capped on the upside pretty significantly.

[SPEAKER_02]: That's why it looks like they write their calls about fifteen to thirty percent, fifteen percent above

[SPEAKER_02]: above the price of the stock.

[SPEAKER_02]: Now, here's the thing, right?

[SPEAKER_02]: You're looking for income, cover call fund, good way to go about it.

[SPEAKER_02]: But it's also important what you own within that fund as well because you're not completely protected to the downside, certainly not, right?

[SPEAKER_02]: And so you want to have a fund that is well diversified across sectors and maintains a lot of, you know,

[SPEAKER_02]: Rather, takes into consideration with constructing a lot of the factors of risk here.

[SPEAKER_02]: What I'm seeing is a highly concentrated portfolio.

[SPEAKER_02]: Nearly fifty percent tech, which is inherently not a sector that usually has a lot of yields.

[SPEAKER_02]: So for an income fund, it seems a little weird.

[SPEAKER_02]: Twenty-three point four, six percent finance.

[SPEAKER_02]: I think they're better covered call strategies, better income focused strategies out there that give you broader diversification.

[SPEAKER_02]: Don't lump you into high growth areas and therefore expose you to a lot of risk without really seeking a lot of income on the dividend side.

[SPEAKER_02]: So I would probably look elsewhere.

[SPEAKER_02]: It's guys a little expensive too at one point three percent.

[SPEAKER_02]: That is ULTY, the yield max, ultra option income strategy, ETF.

[SPEAKER_02]: Thanks for the call.

[SPEAKER_02]: We're going to go with two in a row.

[SPEAKER_02]: This one again from the comment section of the invest talk at YouTube channel.

[SPEAKER_02]: And it's on ticker.

[SPEAKER_02]: E. V. R. From our good friend, Jim Lehi, our loyal viewer, Jim Lehi.

[SPEAKER_02]: Evercore says I've been desaying into Evercore since April and it's up around a hundred percent since then.

[SPEAKER_02]: I do plan on holding long term, but do you think it's overvalued at the moment?

[SPEAKER_02]: And if so, what would your reentry price be?

[SPEAKER_02]: Well, Evercore is a leading global independent investment bank and advisory firm.

[SPEAKER_02]: It is one of the big guys.

[SPEAKER_02]: You know, in terms of the independent investment banks, about fourteen billion dollar market cap, and as expected as a deal flow has picked up, it's done particularly, well, up, thirty six point eight seven percent over the past three months, up fourteen point six percent a year to date.

[SPEAKER_02]: It's revenue growing about eight percent on an annualized basis.

[SPEAKER_02]: Still pretty solid growth from twenty twenty four into what is projected for twenty twenty five.

[SPEAKER_02]: And margins, I'll be at a little lower than what you see with a lot of investment banks.

[SPEAKER_02]: in a advisory company.

[SPEAKER_02]: So pretty solid, project me about fifteen percent net margin this year.

[SPEAKER_02]: So what's really driven the prices?

[SPEAKER_02]: Well I talked about it right you have.

[SPEAKER_02]: earnings being the international expansion beyond just the US and European markets.

[SPEAKER_02]: And you have a lot of upside potential from their growing advisory footprint as well as their banking footprint.

[SPEAKER_02]: So over the next few months, right, you want to look at deal flow.

[SPEAKER_02]: You want to look at M&A activity.

[SPEAKER_02]: How that is going to affect the bottom line, how that's going to affect and continue to affect growth.

[SPEAKER_02]: Now you ask about valuation.

[SPEAKER_02]: Currently it's about nineteen point five times forward looking earnings pretty high relative to where it's been over the past five years price to cash for about seventeen times.

[SPEAKER_02]: Let's look at this.

[SPEAKER_02]: Let's look at this.

[SPEAKER_02]: chart here real quick, you're today.

[SPEAKER_02]: I mean, it's been pretty strong since, really since April, yeah, April of this year.

[SPEAKER_02]: It's been on a persistent uptrend.

[SPEAKER_02]: I don't see anything from a technical momentum perspective.

[SPEAKER_02]: It's telling me it's right for a pullback or anything over the past month or so over the past six months.

[SPEAKER_02]: I mean, I think DCAing is generally a good idea because you never know when you're going to get a good price on something.

[SPEAKER_02]: So long as something is at a fair value, which I think this is probably at a fair value here, and it's continuing to grow, continuing to expand those margins and raise those profits.

[SPEAKER_02]: That is, ever core ink ticker EVR.

[SPEAKER_02]: Let's talk a little bit about consumer spending.

[SPEAKER_02]: Because they were spending rows at fifty basis points in the month of July, the largest increase in four months.

[SPEAKER_02]: Now a lot of that was driven by motor vehicle purchases and overall broad goods demand.

[SPEAKER_02]: Something you may see in the summer generally.

[SPEAKER_02]: At the same time, Core PC inflation increased thirty basis points.

[SPEAKER_02]: Up to point nine percent year over year, the fastest annual pay-sense February, led primarily by those rising savings costs, and notably higher than that two percent fed target.

[SPEAKER_02]: Here's something that the President probably doesn't want to hear.

[SPEAKER_02]: The Goods Trade deficit widened sharply.

[SPEAKER_02]: It jumped twenty two point one percent to one hundred and three point six billion.

[SPEAKER_02]: An eighteen point six billion surge in imports and flat exports is what caused that right one of his main concerns with tariffs expanding trade deficit trade deficit on goods certainly wider in the month than expected a lot wider spending on services climbed to forty basis points what causes that spending on financial services spending on health care spending on housing utilities

[SPEAKER_02]: At the same time, dining and travel declined a little bit.

[SPEAKER_02]: And so the question is, where is this going to go over the next couple months?

[SPEAKER_02]: Because we have still a delayed impact of tariffs.

[SPEAKER_02]: What we see a lot is companies are for now absorbing what is likely to be passed on to consumers.

[SPEAKER_02]: And so these tariffs could continue to pressure inflation, businesses are warning of rising import costs.

[SPEAKER_02]: They're finally being depleted of those inventories that they've bought in the run-up to liberation day.

[SPEAKER_02]: And so households can start feeling the pitch.

[SPEAKER_02]: They will start feeling the pitch.

[SPEAKER_02]: Now, it is a differing dynamic, right?

[SPEAKER_02]: A lot of wealth is concentrated in the upper two thirds, really upper half of this country.

[SPEAKER_02]: And so as costs rise, upper middle class, upper class individuals can stomach that inflationary pressure when lower class individuals are going to have to cut back on spending, right?

[SPEAKER_02]: Bill cut discretionary spending.

[SPEAKER_02]: So you can see restaurants.

[SPEAKER_02]: as are now, right?

[SPEAKER_02]: Seeing a little bit of less spending within the restaurant space, the hotel space, and all these are suggesting that we're already starting to see some sort of budget stress.

[SPEAKER_02]: The labor market is also softening.

[SPEAKER_02]: You have job gains averaging thirty five thousand a month over the past three months versus the same period in twenty twenty four.

[SPEAKER_02]: It was averaging a hundred and twenty three thousand.

[SPEAKER_02]: And then you can see, okay, well, a softening labor market, little bit of deteriorating economy.

[SPEAKER_02]: That's why the Fed is starting to weigh rate cuts a little bit more.

[SPEAKER_02]: On the good side, prices were a big mix.

[SPEAKER_02]: You see gas and recreational goods were down, furniture prices though, still slightly high.

[SPEAKER_02]: Now, one thing that's always important to note from these reports, and always important to look out.

[SPEAKER_02]: The University of Michigan data, which shows consumer inflation expectations, and unsurprisingly,

[SPEAKER_02]: inflation expectations are on the rise.

[SPEAKER_02]: As the economy starts to seem as though it's slowing down a bit, it'll be interesting to see what happens over the next six months.

[SPEAKER_02]: As a result of the anticipated rate cut in the month of September, certainly market participants' eyes will be on the effect of how it can control the softening labor market, but more importantly, it's effect on inflation.

[SPEAKER_02]: It's like we had a live call, Thomas from Santa Cruz who has a question on ELS.

[SPEAKER_02]: Do you own it?

[SPEAKER_02]: You're looking to buy it.

[SPEAKER_03]: This has been on my watch list for a extended period of time.

[SPEAKER_03]: I was kind of just going through my watch list.

[SPEAKER_03]: I didn't have an alert set for this, but this one seems like has set a kind of a long term support.

[SPEAKER_03]: To be honest, I don't know a whole lot about the company, but it's kind of in the sector I'm looking at for in my tax deferred account.

[SPEAKER_03]: I was just wondering if you had an input on this.

[SPEAKER_03]: On fidelity, it says it has a thirty-one PE, which seems pretty high for this kind of a company.

[SPEAKER_03]: I don't know if that's accurate.

[SPEAKER_03]: I don't know if that's forward looking.

[SPEAKER_03]: But I thought I'd reach out to you guys and say what you think about it.

[SPEAKER_02]: Sure.

[SPEAKER_02]: Well, generally for reads, you should really be looking at, and it's not the only thing you should be looking at, but price to funds from operation tends to be a bit more helpful to put in context than price to earnings just because of the structure of how reads and how they operate.

[SPEAKER_02]: So the price to funds from operation is about sitting in the average

[SPEAKER_02]: of its five-year range of about nineteen point one the average being about twenty four point seven so a little bit below on a forward-looking basis.

[SPEAKER_02]: Now ELS is equity lifestyle properties.

[SPEAKER_02]: It is a self-administered, read they specialize in owning and managing manufactured home communities, RV resorts, campgrounds, and marine as they're about four hundred and fifty five properties in thirty five states and British Columbia with

[SPEAKER_02]: under their care, right?

[SPEAKER_02]: They're appealing to demographics like retirees, affordable housing, and families that are looking for low cost, leisure, resort, style living.

[SPEAKER_02]: Now, Allen Bay's a company we have been looking at as well we've owned it on and off.

[SPEAKER_02]: Avalon Bay is a little bit different, right?

[SPEAKER_02]: Avalon Bay is more centered on

[SPEAKER_02]: Let's say real estate within the residential sector that is more focused on the coastlines, right?

[SPEAKER_02]: A very different type of clientele, different type of revenue base that given what we were just talking about in that talking point about consumer spending is less likely to be hit as hard by inflationary pressures as the customer base that would provide revenue to equity lifestyle properties.

[SPEAKER_02]: Now, it's a twelve billion dollar market cap.

[SPEAKER_02]: Read.

[SPEAKER_02]: It's got a solid dividend about three point five percent.

[SPEAKER_02]: It's been down year to date about ten percent down eighteen point one three over the past fifty two weeks.

[SPEAKER_02]: Notably, it's uttered its industry the past two years by six point three and the eleven point nine percent respectively.

[SPEAKER_02]: Now, what's really driven it over the past three months?

[SPEAKER_02]: is the dividend was a little bit lower than what was to be expected.

[SPEAKER_02]: It did beat earnings though slightly on revenue and earnings per share.

[SPEAKER_02]: But over the past six months, you've seen a longer trend downward.

[SPEAKER_02]: Operational growth, a little bit lower funds from operation growth, a little bit lower.

[SPEAKER_02]: And overall, you're seeing a little bit more competition within the affordable alternative space.

[SPEAKER_02]: I think that generally speaking with the trends that we're seeing in the economy where spending is going to be pressured, I'm not necessarily sure that the right place to go is a sub-sector that is going to be disproportionately affected by the lower third, lower forty percent of Americans, being a little bit tighter on their purse.

[SPEAKER_02]: So I'd probably give it a pass on this one for now.

[SPEAKER_02]: You know, it's had a rough year, had a rough couple years actually, as has a lot of the read space, but this name in particular.

[SPEAKER_02]: That's equity lifestyle, properties, ticker, ELS.

[SPEAKER_02]: Thanks for the call.

[SPEAKER_02]: All right, let's see if we can get a quick question in.

[SPEAKER_02]: We might not be able to answer it before the break, but we can at least play it then.

[SPEAKER_04]: I have a question about what happens to a stock that I have in my array that guillus themselves.

[SPEAKER_04]: And I'm just curious what happens, do they just get sold to me?

[SPEAKER_04]: I mean at that point by my IRA holder, or should I sell them before?

[SPEAKER_04]: They give you listed.

[SPEAKER_04]: Thanks a lot.

[SPEAKER_04]: Great show.

[SPEAKER_02]: That's a really good question.

[SPEAKER_02]: So this happens from time to time, right?

[SPEAKER_02]: There are various reasons why company may be delisted.

[SPEAKER_02]: I don't know if you know this, but each exchange has requirements, right?

[SPEAKER_02]: So certain exchanges you have to be trading above two dollars.

[SPEAKER_02]: You have to have a certain amount of trade volume.

[SPEAKER_02]: That's one of the reasons why stocks do reverse stocks, but it's because they're not above that price threshold.

[SPEAKER_02]: But regardless, if you found yourself in a situation where companies are about to deal with,

[SPEAKER_02]: And they generally are going to let you know ahead of time when they are going to be list.

[SPEAKER_02]: The problem with not selling, I'm not transacting with them and continue to hold onto them is your liquidity is drying up, right?

[SPEAKER_02]: And so eventually if you do want to sell it,

[SPEAKER_02]: You can find yourself in a disadvantageous position where you have to take a big haircut on the value relative to what it would have been if you were to deal with because the volume is gone, right?

[SPEAKER_02]: You have to trade OTC over the counter in order to give that transaction done.

[SPEAKER_02]: So generally speaking, if a stock is about to deal with, it's probably doing it for a good reason.

[SPEAKER_02]: I would get rid of it before it does.

[SPEAKER_02]: Thanks for the call.

[SPEAKER_02]: This is Invest Talk, I'm LeGreau with one goal here to help you achieve your financial freedom.

[SPEAKER_02]: Our work continues after a final break, so get your questions in now at eight, eight, nine, nine chart.

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[SPEAKER_07]: Good morning.

[SPEAKER_07]: I'm calling with a question pertaining to get a carrier global core.

[SPEAKER_07]: Ticker is C-A-R-R.

[SPEAKER_07]: We're holding some of carrier stock

[SPEAKER_07]: We're hopefully right now and are trying to determine whether we should sell it or continue to hold it.

[SPEAKER_07]: It seems like there's been some pretty wide fluctuations in the stock and want to get your thoughts in terms of the short-term and long-term view in your recommendations.

[SPEAKER_07]: So thank you and look forward to hearing from you on your podcast.

[SPEAKER_07]: Bye.

[SPEAKER_02]: Carrier Global Corporation to your CAAR develops and provides climate and energy solutions, including heating ventilation air conditioning, also known as HVAC.

[SPEAKER_02]: Friduration, building automation, and fire and security technologies, they have a pretty solid global presence it looks like.

[SPEAKER_02]: If you look at the revenue split, fifty percent in the US, thirty percent in Europe, seventeen percent in Asia Pacific.

[SPEAKER_02]: Let's go to geographic revenue really quickly.

[SPEAKER_02]: Okay, so not a lot of exposure to China, about three percent to China, again, fifty percent to the United States, Germany and the UK, being the other names in the top three there.

[SPEAKER_02]: What has really been an interesting start to the year for them, right, down six point nine, seven percent, year to date, down twelve percent, over the past fifty two weeks.

[SPEAKER_02]: But I've been tell about July.

[SPEAKER_02]: They're positive on the year.

[SPEAKER_02]: And then since July, it's been a slow trend downward from about eighty dollars a share to about sixty three cents per share.

[SPEAKER_02]: They've underperform the home builders sector, which sir, you know, by it looks like sixteen percent in that period of time.

[SPEAKER_02]: To me, this seems to be likely structural issues here.

[SPEAKER_02]: Let's take a look at their long-term debt.

[SPEAKER_02]: Eleven billion dollars worth of debt on a fifty-six billion dollar market cap companies.

[SPEAKER_02]: That doesn't seem to be that they're overly levered here.

[SPEAKER_02]: What about growth?

[SPEAKER_02]: We'll grow the stuff, right?

[SPEAKER_02]: In a time where a lot of other HVAC energy companies have been doing really well because of their contracts with databases, data centers, companies are spending a lot of money trying to ramp up their AI-related cap X. That has not been the case here.

[SPEAKER_02]: They're growth is stalled.

[SPEAKER_02]: They were maybe it had twenty two point zero nine billion in revenue two years ago this year the revenues projected to be twenty two point nine.

[SPEAKER_02]: Not great.

[SPEAKER_02]: What about net income net income?

[SPEAKER_02]: Although it's supposed to double more than double from last year.

[SPEAKER_02]: Still not near its peak in twenty twenty two.

[SPEAKER_02]: Margins improving still not near its peak margin in twenty twenty two and with this it's trading in about its average for the price earnings price to book it about three point eight price to sales.

[SPEAKER_02]: It looks like it's sitting in about to point five now going back to its IPO in twenty twenty it's at pretty strong relative strength.

[SPEAKER_02]: It's been pretty strong.

[SPEAKER_02]: But I think that it's interestingly enough for me, right, is at a time when you have massive demand for these types of businesses, for cooling, for ventilation, for affordable energy to power the AI revolution,

[SPEAKER_02]: Revenue has not been growing for this company.

[SPEAKER_02]: It underperformed its industry by seventeen point one percent this year.

[SPEAKER_02]: It was flat in twenty twenty four relative to its industry.

[SPEAKER_02]: So in spite of the demand for solutions like the ones that it markets, it's not doing particularly well.

[SPEAKER_02]: Now looking ahead, what are some of the headwinds?

[SPEAKER_02]: Economic uncertainty could be one of them.

[SPEAKER_02]: There is a lot more scrutiny on the energy growth trend.

[SPEAKER_02]: The trend that has caused growth within this subsector over the past couple months, and that is the fact that with all of these capital expenditures, monetization has been a real problem.

[SPEAKER_02]: So there's a lot of headwinds there with not just that, but the core of its business, the construction cycle, and the industrial cycle broadly.

[SPEAKER_02]: I would say,

[SPEAKER_02]: Given its lack of growth, if you wanted to reach towards an HVAC cooling energy solutions company, I would look elsewhere in the industry that is carrier global corp to your CAAR.

[SPEAKER_02]: That about does it for another episode of Invest Talk.

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