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[SPEAKER_01]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk.

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[SPEAKER_01]: Independent Thinking, shared success.

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[SPEAKER_01]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.

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[SPEAKER_01]: Here is KPP Financial Portfolio Manager, Luke Guerrero.

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[SPEAKER_00]: Good afternoon, fellow investors and welcome back to Invest Talk.

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[SPEAKER_00]: I'm at Guerrero and today's Tuesday, September 9th, 2025.

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[SPEAKER_00]: We are well into the month of September now, almost a third of the way through, which means we're almost at the end of the third quarter of 2025, and as we approach the end of the year, the time went a lot of us take our foot off the gas.

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[SPEAKER_00]: Get ready for the holidays, the start of a new year.

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[SPEAKER_00]: It becomes incredibly important that we remain focused.

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[SPEAKER_00]: And so, each and every day, Justin and I come here to host this program.

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[SPEAKER_00]: A program that has one objective and that is to help make you a better and more informed.

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[SPEAKER_00]: Investor, we would help you understand market dynamics, but more importantly, how those dynamics can affect your portfolios.

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[SPEAKER_00]: Now in order to do that, we bring a mixture of educational and actionable material to the table, and we are doing that yet again today.

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[SPEAKER_00]: But the most important part of this mission, most helpful part of this mission, is your contributions in the form of your finance and investment questions.

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[SPEAKER_00]: Now, just a bit, before we talk about today's market performance and run down those show topics that we have today, let's tackle this color question.

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[SPEAKER_03]: Hey guys, I'm looking at Argan incorporated its AGX.

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[SPEAKER_03]: I bought this a couple of years ago in the high 40s.

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[SPEAKER_03]: And now it's around low over 200.

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[SPEAKER_03]: It looks like it's starting to roll off a bit.

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[SPEAKER_03]: I'm just wondering if I should take my profits and run or if you think this thing has got some more room to grow.

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[SPEAKER_03]: And it's

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[SPEAKER_03]: Appreciate everything.

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[SPEAKER_00]: To your AGX is our gang ink, it's a holding company that has essentially three primary uses.

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[SPEAKER_00]: One of their divisions, SMC delivers telecommunications infrastructure, another TRC specializes in industrial construction and maintenance and then their other division does engineering procurement and consulting services for the power grid, not just electricity but also renewable energy.

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[SPEAKER_00]: Revenue does come from that power services segment.

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[SPEAKER_00]: And so the reason why this company is up so much, 132.8% in the past 52 weeks, 58.65% year to date.

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[SPEAKER_00]: Because of blowout quarterly performance, they 400% jump in earnings per share, from Q3 of 2024 into Q3 of 2025.

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[SPEAKER_00]: Now,

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[SPEAKER_00]: The reason why this happening is along the lines of the bullish, thematic tailwind that has been corporate spending on.

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[SPEAKER_00]: artificial intelligence and the necessity to build databases and the infrastructure that goes along with that.

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[SPEAKER_00]: So through their consulting, through their engineering, through their industrial construction, they've had a huge boom, a huge boom in revenue, which is translated pretty well down to earnings.

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[SPEAKER_00]: They had a 57% increase in quarterly sales in their most recent quarterly report.

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[SPEAKER_00]: On top of that,

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[SPEAKER_00]: You know, this is a $2.9 billion market cap company.

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[SPEAKER_00]: We're going to have a $2.6 million.

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[SPEAKER_00]: If 525 million in cash, so there they have net debt of negative $523 million.

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[SPEAKER_00]: So it's got a very clean balance sheet.

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[SPEAKER_00]: Their revenue growth, over the past five years is really bolstered by the past two, where revenue has nearly doubled from 2024 into what would be fiscal year 26 for them, which would end in January 2022.

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[SPEAKER_00]: So they're on a different fiscal calendar, but still, crazy growth, incredible growth.

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[SPEAKER_00]: And with that, they're priced to forward looking

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[SPEAKER_00]: Pretty well above their average.

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[SPEAKER_00]: Not near their high of 35.8 price to book sitting at 7.2 pretty well above their average.

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[SPEAKER_00]: It does seem to be a bit expensive of a name, but rather strength hasn't really dropped off that much cash flows continues to improve.

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[SPEAKER_00]: Their margins continue to improve as well.

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[SPEAKER_00]: Projective B11.5% net margin this year, in fiscal 2026.

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[SPEAKER_00]: And so because it really doesn't seem like structurally, it's slowing down that would drop off a little bit from 235 down to where it's sitting now at 217.

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[SPEAKER_00]: If you've been home-longed since 40 and you haven't taken any profit, I would certainly start to do so here.

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[SPEAKER_00]: Although it is expensive, it doesn't look crazy expensive to me, but there it does seem to be a slight break in the trend here from July and given

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[SPEAKER_00]: The amount of spending may be reduced in terms of the breadth of spending, given that we're not seeing a lot of monetization.

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[SPEAKER_00]: Well, you could start to see growth slow down here as well.

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[SPEAKER_00]: So, safe to say, take a little bit of profit.

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[SPEAKER_00]: I do think, though, given the dynamics, this company still has a lot of upward potential.

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[SPEAKER_00]: That is, argon ink, ticker, A, G, X.

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[SPEAKER_00]: Alrighty, we got a lot of going to cover in the next 40 minutes or so.

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[SPEAKER_00]: So here's a little bit of what we have planned.

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[SPEAKER_00]: My main focus point concerns this question.

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[SPEAKER_00]: The crypto retirement debate is a small bet.

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[SPEAKER_00]: The key to future wealth.

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[SPEAKER_00]: We'll take a look at weighing the potential for a small cryptocurrency allocation.

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[SPEAKER_00]: In order to join hands, your retirement returns against the significant risks, the extreme volatility, and unpredictable regulatory landscape.

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[SPEAKER_00]: Also, we have a couple other stories that are important.

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[SPEAKER_00]: One of them is going to look at the lumber prices and what that means for the US economy.

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[SPEAKER_00]: Also, touch on the American worker that feels far less confident about finding a job than it did this time last year.

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[SPEAKER_00]: Should we have time at the end of the show?

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[SPEAKER_00]: We'll touch on the US consumer finances and how they continue to be a bit robust despite the jobs data that we are seeing.

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[SPEAKER_00]: We also have some voice bank questions ready to play, including one on Zoom communications ink that's ticker, ZM, and another on digital reality trust ticker ticker ticker, DLR.

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[SPEAKER_00]: What's up, some questions?

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[SPEAKER_00]: It came in from the comment section of the University of YouTube channel and of course, I welcome your finance and investment questions now or any time throughout the show.

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[SPEAKER_00]: Go into Quick Break, please remember you can call any time, and leave your questions on the Investor voice bank.

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[SPEAKER_00]: If you're listening via our live streamer, possibly on AM-1220 in the area, call now at 888-99 chart.

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[SPEAKER_00]: Up next, we'll talk about the market today.

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[SPEAKER_02]: [♪ INTRO MUSIC PLAYING

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[SPEAKER_02]: how to identify AI opportunities across sectors.

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[SPEAKER_02]: Just in Klein and Luke Guerrero are going to help you move past the familiar names to identify the key opportunities for investment in the real AI revolution.

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[SPEAKER_02]: They'll be talking about the energy grid, data center infrastructure, and how AI is boosting profits in a wide range of industries.

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[SPEAKER_02]: The All-New Investalk Wealth webinar, happening online, September 30th from 1 to 2pm Pacific Time.

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[SPEAKER_02]: Seats are limited, so register now at Investalk.com.

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[SPEAKER_02]: There's value in every Invest Talk podcast.

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[SPEAKER_02]: So call Invest Talk 888-99 chart.

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[SPEAKER_02]: Invest talk downloads have now surpassed 61 million, Justin Klein and Luke Guerrero provide unbiased answers to your finance and investment questions.

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[SPEAKER_02]: Invest talk, 888-99, chart.

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[SPEAKER_00]: Let's talk a little bit about the market today, a positive day, overall though, Brett looked a little narrow.

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[SPEAKER_00]: The Dow is up 43 basis points, S&P 500, up 27 basis points.

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[SPEAKER_00]: Now, as deck up 37, Russell 2000, small caps, down 55.

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[SPEAKER_00]: Overall, mostly higher across the board major indices near their best levels.

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[SPEAKER_00]: You'd see a notable surge.

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[SPEAKER_00]: in the last half hour of trading.

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[SPEAKER_00]: Dallas Pnazzette closed at fresh record highs.

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[SPEAKER_00]: But as I mentioned, right, breath was a bit negative.

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[SPEAKER_00]: The Equal Weight S&P 500 was lower.

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[SPEAKER_00]: From a sector basis, big tech mostly higher Google and Meta, the Mag7 standouts on the day.

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[SPEAKER_00]: Other performers included managed care, healthcare services, money center banks, investment banks, and telecom names.

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[SPEAKER_00]: Underperformers, some of the worst performers on the day, media, building products, home builders, chemicals, and industrial metals.

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[SPEAKER_00]: On the bond side, Treasuries, a bit weaker.

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[SPEAKER_00]: You didn't see the curve flattened following a notable move.

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[SPEAKER_00]: Lowering yields over the last few sessions, yields were up six basis points at the short end.

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[SPEAKER_00]: Dollar index was up 40 basis points, gold finished up 10 basis points in crude oil, settled up 70, ending well off of the best levels we saw earlier in the day, given the Israeli strike on cutter.

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[SPEAKER_00]: A lot of moving pieces benchmark revisions do as payroll spun is more negative than expected, the labor market softening, really the big driver of the recent pickup and what we're seeing from the market in terms of the Fed easing expectations, but despite all the attention on the softening, the labor market softening, you don't really see a real shift in recessionary expectations.

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[SPEAKER_00]: Elsewhere take away from me busy sell side conference updates largely positive.

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[SPEAKER_00]: Focus has been both on AI not just the names whether rallying again today, but also be stable consumer.

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[SPEAKER_00]: We saw, as I mentioned, a big ramp up in Middle East tensions, as Israel struck a building in Delhan and attempt to, as they say, as they reported, an attempt to kill leadership of Hamas.

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[SPEAKER_00]: But that did have a little bit of a boost on crude oil that did taper off towards the end of the day.

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[SPEAKER_00]: Inflation the focus for Wednesday and Thursday though, you know, given what we've seen in the labor market, given the the turn in discussion from pal, just a couple of weeks ago, probably a bit de-risked in terms of what those numbers mean for the fed cutting path looking forward.

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[SPEAKER_00]: Looking ahead, August PPI will be out on Wednesday.

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[SPEAKER_00]: August CPI and initial claims will be out on Thursday, preliminary, University of Michigan Consumer Sentiment and Inflation Expectations for September will cap off the week on Friday.

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[SPEAKER_00]: As a reminder, there is no fed speak at all this week that Central Bank is in a blackout period ahead of next week's FOMC meeting.

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[SPEAKER_00]: Alright, let's get to our first question from the Invest talk YouTube comment section.

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[SPEAKER_00]: I mentioned it from time to time, but over on our YouTube channel, we don't just provide the same information that we provide here on the podcast.

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[SPEAKER_00]: We do cut up the show, put it in an easily digestible form, because maybe some days you just want to listen to, call it questions, or maybe you just want to get to the focus point immediately.

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[SPEAKER_00]: It's kind of like goose bumps.

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[SPEAKER_00]: You can choose your own adventure in that respect, but we also do.

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[SPEAKER_00]: other types of content that is specific to our YouTube, learning sessions, also host all for webinar.

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[SPEAKER_00]: So that sounds interesting.

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[SPEAKER_00]: Head over there to invest talk with two T's on YouTube and check that out.

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[SPEAKER_00]: While you're over there, if you have a question, we'd like to get to those as quickly as we can.

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[SPEAKER_00]: And this one is about ticker L, R, and it says, would love to hear your thoughts on stride, ticker symbol L, R, and does it still have a lot of room to run this cycle?

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[SPEAKER_00]: Is it a good long-term hold in your opinion?

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[SPEAKER_00]: Stride is a technology driven education company, they specialize in offering K through 12, so kindergarten through the end of high school, virtual schools, supplemental learning, and professional career training services across the U.S.

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[SPEAKER_00]: and internationally.

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[SPEAKER_00]: Now, the company has done pretty well over the past three months, really pretty well over the past 52 weeks, about 112.42 percent.

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[SPEAKER_00]: In the past year up 60-ish percent,

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[SPEAKER_00]: year to date they had some pretty breakout moment on the back of some very solid earnings stock rally 15% reaching all-time highs after the most recent earnings report over the past six months stock has really been driven by that financial strength not just from uh... not just from the profitability of it

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[SPEAKER_00]: But also from the balance sheet, right?

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[SPEAKER_00]: It's a $7.1 billion market cap company.

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[SPEAKER_00]: It's only got a $550 million in debt.

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[SPEAKER_00]: Very, very clean balance sheet.

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[SPEAKER_00]: It's profitability's improving.

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[SPEAKER_00]: Its cash flow is improving.

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[SPEAKER_00]: They do not pay a dividend.

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[SPEAKER_00]: They have been issuing a little bit of shares.

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[SPEAKER_00]: But given this run up, right?

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[SPEAKER_00]: Given what we've seen in terms of the growth, your 18.2% is the five year annualized growth rate.

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[SPEAKER_00]: Well, that's trending towards being a bit expensive by its own standards.

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[SPEAKER_00]: It's sitting at 20 times for looking at earnings.

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[SPEAKER_00]: The average about 16, so not crazy expensive, high about 32.

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[SPEAKER_00]: First of all, about 4.8, still a little bit below that five year average.

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[SPEAKER_00]: But the key here is growth just continues to manifest itself, even from 2024 to 2025, their fiscal year ended in June.

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[SPEAKER_00]: You saw about 20% growth.

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[SPEAKER_00]: That's pretty remarkable at the same time, net income.

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[SPEAKER_00]: Group pretty significantly.

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[SPEAKER_00]: Net margins expanded from 10 to 12%.

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[SPEAKER_00]: And so the fact that you have this continued growth, there really doesn't seem to be any type of slowdown from a momentum basis.

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[SPEAKER_00]: And the valuations are a little elevated, but nothing crazy high.

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[SPEAKER_00]: I think the demand is still there.

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[SPEAKER_00]: I think that means that this name still has a little room to run.

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[SPEAKER_00]: That is stride, thicker at L, R, N.

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[SPEAKER_00]: We are moving into a break, still to come.

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[SPEAKER_00]: My main focus point, a few talking points about some important stories that I think you should know about.

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[SPEAKER_00]: And of course, more answers to your finance and investment questions.

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[SPEAKER_00]: The answer to voice mail, we answered a YouTube question would love to hear from you live any time throughout the show.

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[SPEAKER_00]: I encourage you to call now.

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[SPEAKER_00]: You know the number, eight, eight, eight, 99 chart.

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[SPEAKER_02]: Millions of downloads have proved there's value in every invest talk podcast.

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[SPEAKER_02]: Call any time 24-7, invest talk, 888-99 chart.

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[SPEAKER_00]: While I have your attention, I want to tell you about a new series that has debuted on our Invest Talk YouTube channel, Invest Talk, Innovators.

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

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

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[SPEAKER_00]: He highlights how his philosophy of investing in founder-led businesses can offer real advantage and passes on some practical tips that you don't want to miss.

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[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.

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[SPEAKER_00]: Let's talk some crypto.

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[SPEAKER_00]: My main focus point concerns this question the crypto retirement debate is a small bet, the key to future wealth.

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[SPEAKER_00]: One of the time we're considering putting any type of axet at an asset in any of our investor in accounts is how you can tell it's a live show, because sometimes it can't speak.

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[SPEAKER_00]: You have to consider what are the characteristics of that asset.

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[SPEAKER_00]: Well, crypto, it's highly volatile.

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[SPEAKER_00]: And because it's highly volatile, that means the risk profile, because volatility is a measure of risk, is very risky, which means it's not suited for everyone.

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[SPEAKER_00]: Retirement investors specifically, if you're thinking about putting this in your eye, all right.

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[SPEAKER_00]: You have to weigh risk, you have to weigh tolerance, you have to weigh timeline, you have to weigh what your financial goals are all carefully.

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[SPEAKER_00]: Now, there can be some benefits, cryptocurrency, and what I'm saying that I primarily mean Bitcoin, has over time had extraordinary returns, extraordinary returns.

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[SPEAKER_00]: And so I understand the inclination to say, okay, do I want some sort of allocation to this?

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[SPEAKER_00]: Most self-directed IRAs do offer access to crypto, right?

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[SPEAKER_00]: If you're looking to put cryptocurrency within your retirement allocation, this is probably where you want to go.

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[SPEAKER_00]: Most employee sponsor for home and case where they still restrict it due to some regulatory concerns.

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[SPEAKER_00]: And this all comes on a backdrop of this surge we've seen in early 2025 and through most of 2025 that's tapered off a little bit, when Bitcoin hit all time highs and drew the

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[SPEAKER_00]: Growth potential.

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[SPEAKER_00]: Despite that short term volatility, but it is a different type of asset, right?

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[SPEAKER_00]: It's not similar to stocks.

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[SPEAKER_00]: There is no future cash flows that are expected from that company that are returned to shareholders.

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[SPEAKER_00]: It's different from bonds.

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[SPEAKER_00]: You don't have a set, payment, structure, and timeline over which you can expect some income.

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[SPEAKER_00]: There's speculative risk.

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[SPEAKER_00]: Given that, it is the ultimate long duration asset.

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[SPEAKER_00]: There is no future flows towards you.

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[SPEAKER_00]: There is a lot of speculation there.

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[SPEAKER_00]: A lot of you don't understand what is going on with it.

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[SPEAKER_00]: They know that Bitcoin is something that exists in some abstract form, but the principles behind why some people believe it has value, whether or not it does, they don't understand those.

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[SPEAKER_00]: And there's also evolving regulation.

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[SPEAKER_00]: And these can cause pretty sharp fluctuations, but more importantly, for you, sharp investor losses.

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[SPEAKER_00]: Now, if you're considering putting crypto within your portfolio,

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[SPEAKER_00]: We don't want to have some sort of yellow approach, where you take all your money, you throw it in Bitcoin and you hope that 10, 20, 30 years down the road, you have a lot of money.

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[SPEAKER_00]: especially if you're nearing retirement because we talk about this all the time.

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[SPEAKER_00]: It doesn't matter what the asset is.

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[SPEAKER_00]: You can take on less risk if you need the money sooner.

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[SPEAKER_00]: If you're a year out from retirement, you probably want to take a smaller allocation.

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[SPEAKER_00]: Especially given year to year volatility of cryptocurrency.

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[SPEAKER_00]: If you're further out, you can maybe stomach the risks even more.

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[SPEAKER_00]: Small allocations are typically what are recommended between 1 and 5% of your portfolio.

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[SPEAKER_00]: Now, the correlations between Bitcoin and some equities, specifically Q's, have increased over time.

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[SPEAKER_00]: But that doesn't mean that it doesn't offer some sort of diversification, but if it because there are little correlations with traditional assets, and historically they have delivered, again, those strong returns over longer periods of time, but a risk mitigation is where you want to consider

20:10.113 --> 20:16.836
[SPEAKER_00]: is what you want to consider if you want to enter these positions dollar cost average, periodic re-bouncing, and a long-gur holding periods.

20:16.876 --> 20:22.980
[SPEAKER_00]: It's essential for holders of cryptocurrency to what you have a positive investment experience.

20:23.740 --> 20:27.102
[SPEAKER_00]: One of the big benefits of putting it in your self-directed IRA.

20:27.902 --> 20:31.144
[SPEAKER_00]: Tax deferral means taxes only apply upon the withdrawal.

20:31.704 --> 20:39.088
[SPEAKER_00]: And if you have a large escalatory path of return, deferring those taxes can be very, very beneficiality.

20:39.816 --> 20:53.307
[SPEAKER_00]: Now, in the wake of the Trump administration passing new regulations, with regards to stablecoin, the Genius Act, some barriers are starting to come down, but barriers still do exist, even with the financial freedom act reintroduction in 2025.

20:54.988 --> 21:03.773
[SPEAKER_00]: It may expand access over time, we aren't quite there yet, and so it is an evolving landscape that can greatly affect your return profile and the value of the asset.

21:04.313 --> 21:08.415
[SPEAKER_00]: Last but not least, it is not like other assets, right?

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[SPEAKER_00]: Understanding the risks of not self-cust convening, adding needing to use qualified custodians, and avoiding speculative behavior,

21:22.048 --> 21:24.411
[SPEAKER_00]: is an allocation you want in your portfolios.

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[SPEAKER_00]: On the next investment talk, we will look into this question, the 2026, I can't believe I just said that.

21:30.200 --> 21:34.766
[SPEAKER_00]: 2026, social security, cola, cost of living adjustment.

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[SPEAKER_00]: Will a 2.7% increase be enough to outrun inflation?

21:39.800 --> 21:52.071
[SPEAKER_00]: In this segment, we break down the estimated 2.7 cost of living adjustment for 2026 and explore why experts are concerned, this moderate boost may not be enough to cover rising expenses for retirees.

21:53.392 --> 21:57.856
[SPEAKER_00]: Next, tomorrow, for now, I'm Lou Guerrero ready to take your calls on 888-99.

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[SPEAKER_02]: The calls are free, the unbiased answers are free.

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[SPEAKER_02]: So what are you waiting for?

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[SPEAKER_02]: Call in Vestock, 888-99, chart.

22:22.455 --> 22:26.277
[SPEAKER_02]: Hello, Justin and Luke.

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[SPEAKER_06]: Thank you for taking my calls.

22:28.699 --> 22:38.525
[SPEAKER_06]: My question is that I had bought Zoom in during the COVID time when the prices were quite high.

22:39.626 --> 22:41.487
[SPEAKER_06]: And ever since COVID,

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[SPEAKER_06]: the prices have really dropped and I am about 50% down on it.

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[SPEAKER_06]: What kind of strategies should I take from here or what actions do I take from here so I average it down.

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[SPEAKER_06]: Should I just let it go like the bullet or should I just wait and maybe invest some more and I reach it down and maybe sell any information would be great.

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[SPEAKER_06]: Thank you so much for your

23:12.143 --> 23:16.788
[SPEAKER_00]: So Zoom Communications is a communications company.

23:17.188 --> 23:19.150
[SPEAKER_00]: It got really popular in the pandemic.

23:19.170 --> 23:26.598
[SPEAKER_00]: When a lot of work moved to work from home, think of Skype, think of Microsoft Teams, video conferencing, webinars.

23:26.658 --> 23:27.499
[SPEAKER_00]: This is what Zoom does.

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[SPEAKER_00]: We use Zoom internally and for the webinars that we do every quarter for all of you guys who wanna watch.

23:33.965 --> 23:47.296
[SPEAKER_00]: And it is a name that we do currently hold for our clients that we did not, fortunately, did not buy it up at here at the 500 level when it was surging during the pandemic and it really has not recovered at all whatsoever to those levels since then.

23:48.847 --> 23:59.032
[SPEAKER_00]: Now here to date, it's about 5% over the past three months of 6.68% up 50, I'm sorry, 28% 20.58% to be specific, over the past 52 weeks.

23:59.652 --> 24:04.094
[SPEAKER_00]: There isn't lies because there's a bit of a turnaround story here, you see this massive growth here, right?

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[SPEAKER_00]: Most of that centered in the pandemic, though.

24:06.335 --> 24:08.957
[SPEAKER_00]: But growth is starting to do turnaround yet again.

24:09.097 --> 24:11.678
[SPEAKER_00]: Here, after having a really rough 2024 into 2025, they had solid.

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[SPEAKER_00]: Q2, earnings and guidance.

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[SPEAKER_00]: earnings per share of 153 being 1.38 and 11% surprise revenue of about 1.22 billion accelerating revenue growth out of the previous quarter, which is always something you like to see.

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[SPEAKER_00]: A lot of that has to do with some of their focus on embracing AI within the offerings of Zoom the AI.

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[SPEAKER_00]: Note taking companion, the meeting notes are a great feature that they have, and trying to monetize in a way that I think a lot of other companies are not putting it as in tune

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[SPEAKER_00]: user.

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[SPEAKER_00]: Now we hold Zoom, like I said, for clients, we think Zoom is a solid company.

24:55.790 --> 25:00.735
[SPEAKER_00]: We think the key drivers that have really turned this around or something that can sustain the company ever forward.

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[SPEAKER_00]: But I think I want to answer this question within the context of you.

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[SPEAKER_00]: And so you said, should you hold on to?

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[SPEAKER_00]: We think Zoom has the potential for some pretty solid returns, so that could be an option.

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[SPEAKER_00]: But if you intend to sell it, you wouldn't want to lower your cost basis, because if you intend to sell it, you have a pretty juicy, if you will, capital loss here.

25:18.330 --> 25:22.914
[SPEAKER_00]: So if your intention is to sell, no, you wouldn't just want to buy into lower your cost basis.

25:22.934 --> 25:23.694
[SPEAKER_00]: That doesn't make any sense.

25:23.734 --> 25:26.256
[SPEAKER_00]: But we think, you know, we hold it for clients for a reason.

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[SPEAKER_00]: And that Zoom does have some potential.

25:28.318 --> 25:31.640
[SPEAKER_00]: It's at a pretty strong 52 weeks, pretty strong three months, actually.

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[SPEAKER_00]: Hopefully this growth trend continues.

25:34.802 --> 25:38.025
[SPEAKER_00]: That is Zoom Communications, Ticker, Z, M.

25:38.967 --> 25:45.455
[SPEAKER_00]: Why don't we try and fit in another question we love going back to back, and this one says, what is your recommended proportion of gold?

25:46.397 --> 25:47.438
[SPEAKER_00]: Thank you very insightful.

25:47.578 --> 25:56.229
[SPEAKER_00]: I have a DC on GLDMETF and been doing that for some years now that is my only exposure to gold and it only forms 1% of my portfolio.

25:58.227 --> 25:59.648
[SPEAKER_00]: I'm going to work on building my retirement fund.

25:59.728 --> 26:02.929
[SPEAKER_00]: What is the recommended proportion of gold that I should have in my portfolio?

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[SPEAKER_00]: Thanks, great show, and look forward to hearing your response on YouTube or on the podcast.

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[SPEAKER_00]: By the way, I like the short clips on YouTube as it allows me to zoom in on the topic I'm interested in and save time when I'm really busy at work.

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[SPEAKER_00]: I'm glad that somebody likes it.

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[SPEAKER_00]: That's why we do it.

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[SPEAKER_00]: We want to give you the content that you want, the way you want it, when you want it.

26:20.555 --> 26:25.137
[SPEAKER_00]: Now, let's take a look at GLDM, which is the ETF we are talking

26:29.318 --> 26:30.499
[SPEAKER_00]: caused for dramatic effect.

26:31.060 --> 26:36.647
[SPEAKER_00]: Gold mini shares trust of beneficial interest to pretty much just tracks the price of gold here.

26:37.508 --> 26:40.752
[SPEAKER_00]: If you've been paying attention, you know gold has been on a historic run.

26:41.213 --> 26:42.875
[SPEAKER_00]: And so this ETF is a 38.51% year to date, 45.27% on the one year.

26:48.862 --> 26:54.384
[SPEAKER_00]: And frankly, you know, gold tends to be a commodity that does really well and there's a lot of uncertainty.

26:54.704 --> 26:58.125
[SPEAKER_00]: And then when there's certainty about things being bad, that's when gold starts to fall.

26:58.665 --> 27:01.987
[SPEAKER_00]: You, if you're worried about the future, you, by gold.

27:02.307 --> 27:05.408
[SPEAKER_00]: If you're worried about today, you sell gold because you can't pay your phone bill in gold.

27:05.888 --> 27:19.574
[SPEAKER_00]: We're in the phase of dollar strength falling, a lot of uncertainty, and so there's been a lot of purchasing of gold on a retail level, on a institutional level with countries that are trying to move away from U.S.

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[SPEAKER_00]: dollar, given the priorities of this current administration.

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[SPEAKER_00]: And so we don't think that they're

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[SPEAKER_00]: is likely to be, you know, anything that really stops this train for quite some time.

27:35.223 --> 27:43.831
[SPEAKER_00]: If there continues to be a little chipping away at the optics of Fed independence or faith in the dollar, certainly gold can benefit there.

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[SPEAKER_00]: And so gold can be a great part of your portfolio, not just for the returns, but for the diversification as well.

27:49.035 --> 27:57.417
[SPEAKER_00]: Now, historically speaking, people said, okay, 60, 40 equity bonds, maybe throw in, you know, a little bit of weight there, get rid of some equities, get rid of some bonds, maybe 10% goal.

27:57.897 --> 27:59.297
[SPEAKER_00]: I think 5% to 10% goal.

27:59.678 --> 28:02.938
[SPEAKER_00]: For your overall portfolio, it was a great place to start.

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[SPEAKER_00]: We know how gold moves historically.

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[SPEAKER_00]: In terms of how it's correlations relate to other assets, we know we've seen in recent terms.

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[SPEAKER_00]: I think both of those offer benefits to keeping

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[SPEAKER_00]: All right, let's talk a little bit about lumber prices because lumber prices have fallen nearly 24% since early August and what that does is it signals a weakness in housing, but also a weakness in the economy more broadly.

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[SPEAKER_00]: Producers like Interfore and Domitar are controlling output or curtailing output rather to slow the decline and essentially taking some of these mills off line.

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[SPEAKER_00]: Now, that can be, they can have an effect in multiple fronts.

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[SPEAKER_00]: Why?

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[SPEAKER_00]: Because now we are seeing a slowdown in investment, which can become a reinforcing issue.

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[SPEAKER_00]: But it's difficult to time anything, right?

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[SPEAKER_00]: And so if you're cutting your future supply and then you have a mismatch against demand later on, it kind of takes a while to work things up again.

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[SPEAKER_00]: You can't just say, okay, we're gonna output a lot of lumber today.

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[SPEAKER_00]: It takes time, things take time.

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[SPEAKER_00]: Now another added layer here is trade uncertainty, especially around Canadian lumber tariffs, and that's driven volatility with buyers, stockpiling and anticipation of duties.

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[SPEAKER_00]: And so even with some of the demand side issues for construction, for new housing, some of the supply side issues, with the prices falling, now you have hoarding.

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[SPEAKER_00]: And you have a situation where the supply demand dynamics of the market becomes even more complicated.

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[SPEAKER_00]: So when President Trump's hair threat really spurred

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[SPEAKER_00]: And all this demand was there.

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[SPEAKER_00]: Well, when he backed off, what happened?

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[SPEAKER_00]: Price is started to collapse.

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[SPEAKER_00]: And now supply exceeds demand.

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[SPEAKER_00]: All of these inventories have nowhere to go.

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[SPEAKER_00]: U.S.

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[SPEAKER_00]: warehouses are full.

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[SPEAKER_00]: Due to these Canadian exporters front loading, a lot of this inventory ahead of what were anticipated, duty hikes.

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[SPEAKER_00]: Then you add on top of that, housing market, date is weak, residential building permits fell to 1.4 million units in July, the lowest level since mid 2020, again, the demand just is not there for the supply that was artificially put into the system.

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[SPEAKER_00]: US construction spending fell 3.4% for May to July, another sign of cooling demand.

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[SPEAKER_00]: Canadian Lebanese jump to 35% from 15%, which pushed the break even price even higher.

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[SPEAKER_00]: Think about it with oil.

30:36.988 --> 30:40.110
[SPEAKER_00]: We talked about this when oil is trading really, really, really low.

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[SPEAKER_00]: Down near $60 a barrel is there is a price at which you don't make any money by drilling oil.

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[SPEAKER_00]: There's the same thing here.

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[SPEAKER_00]: There's a price at which you do not make any money from these mills.

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[SPEAKER_00]: And because the duties jump, that price becomes a bit higher.

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[SPEAKER_00]: Now, Wall Street expects Fed rate cuts this month, which could revive housing activity if more people can afford homes.

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[SPEAKER_00]: If more people can, more companies can afford to build homes more quickly, because as we talk about all the time, the Fed interest rate control doesn't really extend to the residential buyer side, right?

31:13.112 --> 31:17.172
[SPEAKER_00]: It loosely affects what happens with mortgage rates, but that's more focused on the 10 to the 30 year.

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[SPEAKER_00]: That's further out.

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[SPEAKER_00]: What this could affect is these building companies saying, hey, it is a lot cheaper to start making new inventory.

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[SPEAKER_00]: It's obviously if new inventory comes on the market, general housing levels fall, people can afford homes, that's for a new inventory, it's a cycle.

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[SPEAKER_00]: But nothing's certain there, right?

31:34.599 --> 31:43.541
[SPEAKER_00]: Analysts are expecting more closures, more output cuts, as excess supply and sluggish housing pressure in the industry is likely to remain for some time to come.

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[SPEAKER_00]: All righty, let's go with another caller question now.

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[SPEAKER_05]: I would actually call on about some briefs that I own.

31:52.522 --> 31:57.230
[SPEAKER_05]: Wanted to get your take on how you felt about wireless tower company reach.

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[SPEAKER_05]: I do own digital reality trust ticker symbol DLR.

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[SPEAKER_05]: And I'm actually up, but I'm looking to consolidate.

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[SPEAKER_05]: This one, just so I'm going to know your thoughts on the reach in general, and if you have only used for the next year or two, or if that's just, get out of this completely and put it somewhere else.

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[SPEAKER_05]: Thank you for your time.

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[SPEAKER_05]: Appreciate it.

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[SPEAKER_00]: So before we get into DLR specifically, which is a digital reality trust,

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[SPEAKER_00]: Talk about what generally drives read prices.

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[SPEAKER_00]: People tend to get into reads for their certification because real estate tends to have different correlations than equities, rather two equities, lower correlations.

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[SPEAKER_00]: But also, as a proxy for bonds, right?

32:41.914 --> 32:42.635
[SPEAKER_00]: They want income.

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[SPEAKER_00]: And so as bond yields are high, it's less attractive to move into these reads.

32:51.824 --> 33:03.731
[SPEAKER_00]: but if interest rates are coming down, well then it becomes a bit more attractive to move into rates and so that's why you see, all right, weaker labor market, digital reality, trust up 1.72% today.

33:03.791 --> 33:08.074
[SPEAKER_00]: Over the past year, it's about 9.8% still negative on the year, year to date down 5, 7.53, year to date down 7.19 in the past three months,

33:19.772 --> 33:29.777
[SPEAKER_00]: Now, it has been outperforming its peers and one of the reasons why is because within the REIT space, there's a lot of, it's a specialty REITs, like, some of the ones that we really like here, storage REITs are ones that we really like.

33:29.897 --> 33:45.545
[SPEAKER_00]: Property REITs that are specific to niche areas, coastal property is one that tends to weather a lot of economic issues just because of how coastal property tends to not be correlated with the overall property market.

33:46.921 --> 33:53.303
[SPEAKER_00]: But this business has a 300 data centers across 25 countries and 50 metro areas.

33:53.343 --> 33:57.205
[SPEAKER_00]: It is a very large, very scalable business that has a lot of broad diversity.

33:57.245 --> 34:03.267
[SPEAKER_00]: And so over the past six months, you'd expect it with the exception of the past three months, right?

34:03.287 --> 34:07.469
[SPEAKER_00]: Because you did see the price back in, and December of last year was on a consistent uptrends and through 2023.

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[SPEAKER_00]: It would turn 31.8% in 2024, 34.2% in 2023.

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[SPEAKER_00]: Why is that data center demand?

34:17.143 --> 34:27.288
[SPEAKER_00]: A rebound and data center demand, particularly around AI workload, the massive amount of building rents, and because of their scalable, sustainable infrastructure investments.

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[SPEAKER_00]: Digital reality trust has really benefited from that.

34:32.010 --> 34:35.852
[SPEAKER_00]: Now, their margins, operational margins, have been pretty stable.

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[SPEAKER_00]: Pretext margins sitting about where it was on average with the exception of 21, which is crazy.

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[SPEAKER_00]: Net margin, sitting at a pretty decent clip-rejected 21.5% at this upcoming year.

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[SPEAKER_00]: For looking price-durning 71, but that's not really something you want to look at for a real estate investment trust.

34:54.427 --> 34:58.910
[SPEAKER_00]: What you're mostly concerned of is price to funds from operations with the looks pretty reasonable.

34:59.710 --> 35:01.311
[SPEAKER_00]: Return on assets decent.

35:02.882 --> 35:04.885
[SPEAKER_00]: Not operating cash, though, 2.6 billion.

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[SPEAKER_00]: I think that over the past three and six months, right?

35:08.010 --> 35:14.060
[SPEAKER_00]: It did, over the past couple of years, it did beat its peers because of the secular driver here.

35:14.421 --> 35:15.783
[SPEAKER_00]: Now with rates extending,

35:16.652 --> 35:19.515
[SPEAKER_00]: They are prolonged state of pause.

35:20.096 --> 35:22.579
[SPEAKER_00]: Well, most real estate investment trends didn't do well.

35:23.140 --> 35:27.305
[SPEAKER_00]: That being said, here to date, this thing is still underperforming by that 8.4%.

35:27.785 --> 35:35.895
[SPEAKER_00]: I think in the medium term, this is a pretty solid company leasing dynamics, or solid earnings upgrades have been good, green infrastructure progress, a lot of that has been locked in.

35:36.756 --> 35:42.460
[SPEAKER_00]: It also has a lot of potential for margin and funds from operation expansion just because of where it sits in the AI space.

35:42.520 --> 35:51.827
[SPEAKER_00]: So, I tend to say if you're going to invest in a read, investing one that fits the theme, the macro theme of what is driving markets, I think digital reality trust does adjust that.

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[SPEAKER_00]: Thanks for the call.

35:54.409 --> 35:57.692
[SPEAKER_00]: Alright, let's keep things going and answer one more question before the break.

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[SPEAKER_04]: This is France from New York, and today I'm calling for MSC Industrial Direct Co.

36:03.299 --> 36:04.700
[SPEAKER_04]: Take your symbol, MSM.

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[SPEAKER_04]: I own this company and open this small position in the low 80s, and I've been looking to increase my position after exiting my meta and goal positions.

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[SPEAKER_04]: I believe it's a great business based on your opinion, will you recommend increasing my position at these levels or wait for the potential volatility for their opportunities.

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[SPEAKER_04]: Thank you and I'll be listening on a podcast.

36:23.644 --> 36:31.432
[SPEAKER_00]: MSM or MSC industrial direct ticker MSM is a metalwork maintenance repair distribution company.

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[SPEAKER_00]: They operate primarily in the United States with a little bit of international exposure to about 2% from Canada, 2% from Mexico 95% from the United States.

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[SPEAKER_00]: And, you know, over all in the past three months, it's been a pretty solid, performer 12.49% over the past three months, 23.02%, year to date, 18.73% over the past 52 weeks.

36:48.107 --> 36:53.750
[SPEAKER_00]: That route of strength, a lot of that was lost during the pandemic, and really not gain back, I'm ever sensitive.

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[SPEAKER_00]: Revenue.

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[SPEAKER_00]: A bit slow, but growth, you know, tended to, a bit slow in the last couple of years.

37:09.761 --> 37:13.043
[SPEAKER_00]: Growth from 2019 to 2023 was strong, but Revenue growth has since fallen from about 4 billion to 3.73 billion.

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[SPEAKER_00]: At the same time net income has fallen from 259 million to about 190,9 million.

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[SPEAKER_00]: Net sales dipped 80 basis points.

37:27.113 --> 37:39.422
[SPEAKER_00]: in fiscal year 2025, quarter three, and a bit of leadership change as the CEO resigned in late July and in terms CEO took over.

37:40.243 --> 37:47.168
[SPEAKER_00]: Now, we'll dive into more details about this company when we come back, but we have to go into one final break here.

37:47.849 --> 37:49.150
[SPEAKER_00]: It is our last break of the day.

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[SPEAKER_00]: I think we've accomplished a lot and we can't wait to take full advantage of all the time we have left.

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[SPEAKER_00]: This is Invest Talk.

37:55.032 --> 37:55.712
[SPEAKER_00]: I'm Luke Guerrero.

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

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[SPEAKER_00]: Our work continues after this break.

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[SPEAKER_00]: So get your questions in now at 888-99-Chair.

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[SPEAKER_02]: The Invest Talk phone lines never closed.

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[SPEAKER_02]: And now Luke Guerrero is here.

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[SPEAKER_02]: Call Invest Talk 888-99-Chair.

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[SPEAKER_00]: Now, for the break, we were talking about MSC industrial direct co-ticker MSM, it is an industrial company.

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[SPEAKER_00]: It's one of North America's largest industrial distributors, so they specialize in metal working tools, maintenance, repair, and operations.

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[SPEAKER_00]: Now, the companies had a bit of a rough time over the past couple years.

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[SPEAKER_00]: We talked about revenue, falling consistently.

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[SPEAKER_00]: We talked about net income, falling.

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[SPEAKER_00]: We talked about margins, contracting.

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[SPEAKER_00]: And had a bit of a week quarterly earnings last quarter as well though guidance was revised upward.

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[SPEAKER_00]: It seems to just be a victim somewhat due of the industrial cycle.

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[SPEAKER_00]: They have a juicy dividend yields in about 3.7% where it consistently has been for the past four five years.

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[SPEAKER_00]: So if you're an income-focused investor this name might be it for you.

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[SPEAKER_00]: That's about a $5 billion market cap company, not much debt, a lot of short interest out there, send about 6%, they do buy back shares, their cash flow stable, I'll be falling a little bit, relative strength really hasn't picked up in quite some time, and the relative valuation pretty high, high end of the range, 22.5 times forward looking earnings.

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[SPEAKER_00]: So, you know, for a company that isn't growing much, then maybe has a turnaround playing with a new CEO,

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[SPEAKER_00]: and sits in a spot where there's a lot of uncertainty and what position we are in the industrial cycle.

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[SPEAKER_00]: I think if you're up on this name, you should probably start to trim a little bit of it.

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[SPEAKER_00]: If not sell out of your position, I would not likely be buying more and exactly this level.

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[SPEAKER_00]: That is MSC industrial direct company, thicker MSM.

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[SPEAKER_00]: Now before we head off for the day, let's talk a little bit about the job market.

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[SPEAKER_00]: We saw the numbers today.

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[SPEAKER_00]: The labor market revised downward in terms of jobs by about 900,000 from March to March.

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[SPEAKER_00]: Now, that sounds crazy, but this does happen every year.

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[SPEAKER_00]: There are a lot of revisions we've talked about on the show.

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[SPEAKER_00]: Why?

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[SPEAKER_00]: But when you go to the individual person, job confidence has hit a record low.

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[SPEAKER_00]: Only 44.9% of Americans believe they could find a new job within the next three months.

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[SPEAKER_00]: Now, I know that sounds like a long time.

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[SPEAKER_00]: And that's because it is that is the lowest level

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[SPEAKER_00]: But this isn't just with one group of people, it spans all groups, but especially, steep among workers with only a high school education.

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[SPEAKER_00]: So, the people who are more impacted by being out of work, the people who suffer more, generally, from the effects of inflation.

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[SPEAKER_00]: And it doesn't help the job growth is slowing sharply.

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[SPEAKER_00]: Healthcare services, in fact, is the only major sector that is still adding jobs at scale.

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[SPEAKER_00]: Even a white collar hiring is tight with a adjuven productivity efforts, leading to workforce reductions that are especially being felt by those who just graduated, calling for looking for ground level employment.

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[SPEAKER_00]: Paywell's felon August, according to the conference boards, employment trends index,

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[SPEAKER_00]: Now, it's low as level since early 2021.

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[SPEAKER_00]: Key signs of the labor market is straining.

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[SPEAKER_00]: Our straining computer, more people are saying jobs are hard to get a drop in job openings, shrinkage, shrinking, temporary employment.

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[SPEAKER_00]: Only 22,000 jobs are added last month.

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[SPEAKER_00]: And June saw a net job loss, the first time we had a net job loss since 2020.

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[SPEAKER_00]: Now a tear-for-lated inflation pressures may further curb consumption and hiring in the coming months if things can get away relatively quickly with respect to the job market.

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[SPEAKER_00]: And that's why the market is starting to price in so many Fedorate cuts now.

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[SPEAKER_00]: The difficulty here being that yes, the Fed is expected to cut rates next week trying to support hiring an economic activity, but there are lingering inflationary pressures.

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[SPEAKER_00]: The old economic adage is that employment affects some people inflation affects everybody.

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[SPEAKER_00]: And so, with the deteriorating labor market, with more inflation on the horizon, it'll be interesting to see the path of rate cuts the Fed decides to take, given the conflicting demand.

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[SPEAKER_00]: No, I don't know if you checked it out yet, but we have just started talking about it.

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[SPEAKER_00]: And that is that Justin and I will be hosting another invest talk, wealth webinar at the end of this month.

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[SPEAKER_00]: And it's going to center on a topic that is being integral to markets over the past two years, artificial intelligence.

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[SPEAKER_00]: Now, we won't be talking about your meds or here in videos or your Microsofts.

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[SPEAKER_00]: We're going to be talking about companies that are instrumental in the energy revolution, the picks and shovels, and other areas that you can attack to benefit from AI.

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[SPEAKER_00]: That all comes at you at the end of September just head over to investtalk.com to register for the webinar.

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[SPEAKER_00]: I'm Lou Guerrero, and if today's show may do think about your own financial picture, your investments, your taxes, your retirement, whether it's all really working together, just in a night would love to have a conversation.

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[SPEAKER_00]: And keep it be financially offered no cost portfolio reviews to help bring clarity and confidence.

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[SPEAKER_00]: Just go to investalk.com and click on the portfolio review button.

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[SPEAKER_00]: Once again, Justin and I thank you for listening and encourage you to tell your friends and family members about our free podcast downloads.

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[SPEAKER_00]: You can get yours anytime, iTunes and Spotify, and don't forget to check out our YouTube channel where we have YouTube exclusive content, including our Invest Talk Innovator Series as well as our Invest Talk Classroom Series.

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[SPEAKER_00]: Shared Success.

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