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[SPEAKER_07]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk.

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[SPEAKER_07]: Independent Thinking, shared success.

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[SPEAKER_07]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.

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[SPEAKER_07]: Here is KPP Financial Portfolio Manager, Luke Guerrero,

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[SPEAKER_00]: Good afternoon fellow investors and welcome back to another episode of Invest Talk.

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[SPEAKER_00]: I'm your host Luke Guerrero and today is Thursday, September 25th, 25, which means we only have three trading days left.

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[SPEAKER_00]: in the month of September.

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[SPEAKER_00]: And before you know it, October is going to be around the corner, Halloween, Thanksgiving, all of the holidays no matter what you celebrate around the corner.

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[SPEAKER_00]: And then, 2026 is quickly upon us.

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[SPEAKER_00]: And that's why we say that each and every day, it is critical to not lose focus.

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[SPEAKER_00]: Our job as I see it,

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[SPEAKER_00]: is to help you understand what is going on in the world around you, so that you can become a better and more informed investor.

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[SPEAKER_00]: Now in order to do that, we meet here at Invest Talk each and every day, five days a week, and we go through various topics, various stories, some warnings, some advice.

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[SPEAKER_00]: And the most important part of this show are the finance and investment questions that you submit via voicemail over on our YouTube or live throughout the show.

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[SPEAKER_00]: Now before we run down today's show topics before we talk about today's market performance, let's tackle this color question now.

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[SPEAKER_05]: Hey, I'm the stock.

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[SPEAKER_05]: Just had a question about a stock Tilleray brands.

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[SPEAKER_05]: TLRY wanted to know your thoughts on it.

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[SPEAKER_05]: I noticed that its revenue was gone up a little bit.

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[SPEAKER_05]: their profits coming in on October 9th.

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[SPEAKER_05]: So I just wanted to see what you guys thought about it.

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[SPEAKER_05]: Appreciate the show.

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[UNKNOWN]: Bye.

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[SPEAKER_00]: Till Ray Brands to your T.L.R.Y.

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[SPEAKER_00]: is a global cannabis consumer goods company.

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[SPEAKER_00]: They operate within the traditional cannabis space, the wellness space, the beverages, and they do various consumer products.

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[SPEAKER_00]: So they cultivate, they process, they distribute,

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[SPEAKER_00]: medical and recreational marijuana, and they've been pushing these differentiated premium segments.

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[SPEAKER_00]: They're small batch, they're craft cannabis.

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[SPEAKER_00]: To try and distinguish themselves outside of the crowd of many of these cannabis companies.

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[SPEAKER_00]: Now, I guess they have a beverage and spirit segment, the Breckenridge Distillery, that has made a bit of moves and led to some growth

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[SPEAKER_00]: And recently, they weren't trading, or rather, they weren't trading on the NASDAQ.

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[SPEAKER_00]: They were trading over the counter.

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[SPEAKER_00]: The reason being is that there is actually pricing requirements to be on exchange.

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[SPEAKER_00]: And they were below that threshold.

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[SPEAKER_00]: They were below $1 for so many times.

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[SPEAKER_00]: They were trading OTC.

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[SPEAKER_00]: Now, it looks like they might be back on the NASDAQ as of August.

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[SPEAKER_00]: And the companies expanding, they're expanding in the United States, they're expanding in Europe, geographically speaking, 25.9% of their businesses in Canada, 39% is in Europe, Middle East, and Asia, or other Africa, and

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[SPEAKER_00]: 33.3% in the United States.

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[SPEAKER_00]: They have been growing from a revenue perspective as well up from 1.67 billion, or say 1.67.

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[SPEAKER_00]: 167 million, sometimes it's hard to speak.

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[SPEAKER_00]: In May 2020, about 821 million in May 2025, growth has been slowing.

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[SPEAKER_00]: Over the past year, they aren't keeping up that 37.5% annualized growth rate, interestingly enough, pandemic is when they really have that explosive growth from May of 2020 to 2021 from 167 million to 513 million.

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[SPEAKER_00]: But this is only made in money.

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[SPEAKER_00]: Their net margins are negative.

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[SPEAKER_00]: Their EBITDA margin is projected to be positive.

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[SPEAKER_00]: But

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[SPEAKER_00]: Uh, or rather has been positives since 2024 and been expanding, they're moving closer to the territory of being a company that makes money, but this is still a highly regulated space.

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[SPEAKER_00]: One that is open to a lot of legislative changes, a lot of regulatory risk.

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[SPEAKER_00]: And, you know, typically you see diversification as being a benefit to a lot of companies, but given that they now touch and they have touched many different governments, it becomes a little bit complex there.

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[SPEAKER_00]: This is the name that has fallen off dramatically since that IPO in July of 2018.

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[SPEAKER_00]: It was trading it over $100 a share back in 2019.

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[SPEAKER_00]: Now it's trading

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[SPEAKER_00]: Good for them that they are back trading on exchange, but frankly this company doesn't make much money, there's a lot of risks out there, and so as a long-term investment, I don't think this is the way to go.

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[SPEAKER_00]: That is till Ray Brands to Gratiel RY.

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[SPEAKER_00]: You're got a lot of ground to cover in the next 45 minutes or so, so here's a little bit of what we have planned.

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[SPEAKER_00]: My main focus point concerns

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[SPEAKER_00]: What is a blue chip stock?

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[SPEAKER_00]: A blue chip stock is a share in a large financially stable company with a long track record of reliable performance and often consistent dividends so we'll dive into how to identify these names and how they can potentially benefit your portfolios.

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[SPEAKER_00]: We also have a couple of other things we're going to talk about, including how the auto industry is showing a bit of a warning sign on overall US economic activity, also touch on electricity prices and why higher prices might not necessarily be good for utility returns and should we have time at the end of the show, we will touch on a story about life cycle investing.

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[SPEAKER_00]: Now, are you a touch on how different generations think about investing?

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[SPEAKER_00]: We'll see some voice bank questions, ready to play, including one on Franklin, Bitcoin ETF, ticker, EZ, BC, and another on every group.

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[SPEAKER_00]: There's also some questions that came in from the comment section of the Investor.

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[SPEAKER_00]: 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]: We're going to in New Break, please remember that you can call any time and leave your questions on the Investor like voice bank.

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[SPEAKER_00]: If you're listening via our live stream or possibly on AM-1220 in the Bay Area, call now at 80-80-99-char.

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[SPEAKER_06]: Get ready for an all-new Invest Talk with Webinar, beyond the Mag7.

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[SPEAKER_06]: How to Identify AI Opportunities across sectors.

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[SPEAKER_06]: 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_06]: 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_06]: The All-New Invest Talk Wealth webinar happening online September 30th from one to two PM Pacific Time.

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[SPEAKER_06]: Seats are limited, so register now at

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[SPEAKER_06]: There's value in every Invest Talk podcast.

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[SPEAKER_06]: So call in Vestalk, 888-99 chart.

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[SPEAKER_06]: Luke Carrero is here and he's ready with answers to your financial investment questions.

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[SPEAKER_06]: Call in Vestalk, 888-99 chart.

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[SPEAKER_00]: Let's talk a little bit about the markets.

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[SPEAKER_00]: Today, US stocks finishing lower yet again, though ending off of their worst levels.

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[SPEAKER_00]: S&P 500 and NASDAQ now down for three consecutive sessions, the Dow down 38 basis points on the day.

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[SPEAKER_00]: It's B-500 down 50, NASDAQ down 50, Russell 2000 down 98.

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[SPEAKER_00]: One of the big drivers downward, big tech mostly lower across the board, Tesla, the notable decliner out of that group.

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[SPEAKER_00]: Other underperformers included, looks like a pair-on-lames, chemicals, airlines, food, biotech, homebuilders, and software.

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[SPEAKER_00]: Not a lot of green.

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[SPEAKER_00]: In the market today, but relative outperformers included integrated energy, EMP's refiner's rails, and custody banks.

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[SPEAKER_00]: On the bond side treasuries were a bit weaker, the curve flattening a little yields up five to six basis points, the short end being the most area of most movement, dollar index up 60 basis points after jumping 70, the day before gold finished up 10 basis points, and crude oil after all the activity in the day, pretty little change by the time settlement came through.

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[SPEAKER_00]: Now, the Pavley's resistance did seem to be a bit lower today, until we've seen over the past couple sessions, rates still in overhang on sentiment.

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[SPEAKER_00]: As the market is dialing back, some of its near-term easing expectation, something we've been talking about for a while, something that should not surprise you.

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[SPEAKER_00]: Thursday's macro data, the latest driver, particularly with another notable decline in initial claims,

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[SPEAKER_00]: and also Fetsby, right outside of Moran, the newest addition to the newest Fed governor.

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[SPEAKER_00]: Generally speaking, Fed governors have highlighted a preference for a more cautious approach to easing.

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[SPEAKER_00]: On the data side, headline, August durable good orders were up to 2.9% to month versus the consensus for down 50 basis points.

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[SPEAKER_00]: Core orders up 60 basis points versus the forecast of being down 30.

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[SPEAKER_00]: Weekly initial jobless claims printed at 218,000 better than the consensus and down from a prior 232,000 continuing claims also lower than feared.

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[SPEAKER_00]: In addition, we got a red hot final Q2 GDP number revised up to 3.8% versus the expectation which was a hold steady at 3.3, the release noting lower imports of course a lot of front loading in Q1 and stronger consumer spending.

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[SPEAKER_00]: August existing home sales, stronger than consensus, as well follows yesterday's very strong new home response reading.

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[SPEAKER_00]: August also in return.

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[SPEAKER_00]: Down at 20 basis points, month over month versus the expectation for a 10 basis point increase, we're going to head to personal in

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[SPEAKER_00]: come and spending report the highlight on Friday with the focus on PC inflation, core PC inflation seen up to 20 basis points month over month in August leaving the year of a year rate of growth unchanged at 2.9% so it's going to be interesting to see what the data says versus the consensus.

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[SPEAKER_00]: We'll also get the final university of Michigan Consumer Sentiment Report for September and that will round out our week tomorrow.

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[SPEAKER_00]: Let's get back to the questions at hand.

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[SPEAKER_00]: This one from our YouTube comment section from Randy Ramos.

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[SPEAKER_00]: And it's a question on, to your CNEQ, it says, love the episode regarding how sometimes diversification may lead to deluding returns.

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[SPEAKER_00]: Would like to hear your opinion on the ETF CNEQ, it's an ETF that only holds 30 positions, so it seems like a great way to concentrate into high quality names.

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[SPEAKER_00]: Well, CNEQ is an actively managed funded invest in large-cap companies in the US that have promising growth potential at least 20% of the total assets go into related industries like software technology hardware, semiconductors like T-Services, may invest more than 25% of total assets in that single industry if it chooses to do so.

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[SPEAKER_00]: So a pretty actively managed fund

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[SPEAKER_00]: $145 million is its asset, so it's a pretty small fund.

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[SPEAKER_00]: Looks like it hasn't been around for that long at launch in April of 2024, but in the one year, Ish, that it's been around, one year, it's returned 51.3% from a price perspective, relative to the MSCI USA large cap growth index, 27.27 is the return there since inception 45.35 versus 27.90.

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[SPEAKER_00]: It holds 31 names.

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[SPEAKER_00]: Why has it done so well?

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[SPEAKER_00]: Well, it's two biggest holdings are in video and Microsoft.

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[SPEAKER_00]: Top 10 ran it out by Amazon meta app 11 talent, GFL, constellation, nevius, and Tesla.

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[SPEAKER_00]: So 26% of this portfolio's in video Microsoft.

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[SPEAKER_00]: That's pretty big grouping for the top holdings and have been really the primary drivers of performance.

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[SPEAKER_00]: So what we talked about yesterday is how the dangers of over diversify.

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[SPEAKER_00]: That sometimes it can be costly and it can lead to lower expected returns, especially if you're investing in companies that have similar correlations.

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[SPEAKER_00]: You don't get the diversification benefit.

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[SPEAKER_00]: If you're buying two stocks that will perform the same way in different market environments.

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[SPEAKER_00]: Now, this here seems to be a fund that tilts towards some of the most popular names, specifically in tech.

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[SPEAKER_00]: Looks like they do have a couple energy names in their top 10 as well.

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[SPEAKER_00]: but this is kind of going the opposite way.

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[SPEAKER_00]: If you want to have a small allocation towards this, I think that's perfectly reasonable.

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[SPEAKER_00]: I mean, it invests in US large caps and it's charging you 55 basis points.

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[SPEAKER_00]: And it's expense ratio, which to me is pretty expensive for a large cap fund.

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[SPEAKER_00]: But I think

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[SPEAKER_00]: that if you put a large portion of your asset base in this, you run the risk of being too heavily concentrated in names that are primarily being driven right now by the same growth theme.

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[SPEAKER_00]: Even the energy name in the top 10 has benefited greatly from the demand for energy associated with AI.

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[SPEAKER_00]: So yes, listen to the show yesterday if you didn't already, we talked about all the reasons why it can be

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[SPEAKER_00]: This advantageous to over-diversify, but that doesn't mean that you should throw all your money in a bag with names that are very, very similar.

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[SPEAKER_00]: That is CNEQ USA, the Alger concentrated, they say it right there, concentrated, equity ETF.

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[SPEAKER_00]: Now, it's coming up before you know it.

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[SPEAKER_00]: It will be September 30th and on September 30th.

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[SPEAKER_00]: Not only is it my mom's birthday, but is also the day that we will be doing our latest invest talk wealth webinar.

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[SPEAKER_00]: This webinar will be about AI as a growth theme, not just the names.

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[SPEAKER_00]: that you've heard of, not the NVIDIAs, the Microsofts, not the tech names that we're going to be focusing on, but the other names that stand to benefit, the picks and shovels, the energy base, the industrial base, the companies that will benefit from the implementation of what these tech names are building.

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[SPEAKER_00]: So if you join us, our goal is for you to see through the headline, see, through what has been spoken about, far too much, dive deeper and see where investors can benefit

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[SPEAKER_00]: If that's interesting, that goes off on September 30th, but you do have to sign up, space is limited, head over to investalk.com, scroll down to UCD Wellve Webinar Signup, Justin I can't wait to see you there.

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[SPEAKER_00]: Moving into break, so to come, I main focus point, more answers to your questions.

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[SPEAKER_00]: I encourage you to give me a call now at 888-99 chart.

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[SPEAKER_06]: Invest talk, tell your friends they can listen live, download the free podcast, or watch Invest talk on our YouTube channel.

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[SPEAKER_00]: My main focus point today concerns this topic.

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[SPEAKER_00]: What is a blue chip stock?

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[SPEAKER_00]: Now, blue chip stocks come from a large, financially strong companies with long track records of performance and household recognition.

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[SPEAKER_00]: names like IBM and Microsoft, America Express, McDonald's Boeing, all of these are classic examples of blue chips stocks.

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[SPEAKER_00]: What these companies have in common is they tend to be prized for reliability, for consistent earnings, for investor cash flows in the form of share, buybacks, and dividends, and they become anchor holdings in many portfolios

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[SPEAKER_00]: Most are components of major indices, like the Dow, the S&P 500, Russell indices as well.

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[SPEAKER_00]: And that helps to reinforce their stability, but also their reputation.

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[SPEAKER_00]: When people talk about the market moving for better or for worse, they tend to be talking about the S&P 500.

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[SPEAKER_00]: And so, of your company that we're talking about is in there, that means that it is valued with respect to the U.S.

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[SPEAKER_00]: economy.

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[SPEAKER_00]: A common benchmark for, quote, blue chip status is usually something that trades above 10 billion in market cap, though true sector leaders of smaller size can qualify as well.

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[SPEAKER_00]: Now, dividends are not mandatory to be a blue chip stock, but most blue chips boast long histories of stable or growing paths.

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[SPEAKER_00]: Coca-Cola has paid dividends since 1893.

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[SPEAKER_00]: Now the name, blue chip, comes from, you guessed it, poker, where blue chips hold the highest value at the table.

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[SPEAKER_00]: Investors see them as safe, though history shows they can still stumble.

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[SPEAKER_00]: GM and Lehman, where once considered, blue chip stocks GM is considered a blue chip stock now, but Lehman Brothers certainly is not around anymore after the collapse in 2008.

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[SPEAKER_00]: Blue chips help provide balance in portfolios.

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[SPEAKER_00]: They blend growth and stability to offset some of the market volatility over time.

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[SPEAKER_00]: Their solid core holdings, but shouldn't really be your entire portfolio position, diversification with mid caps, with small caps.

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[SPEAKER_00]: with bonds with cash.

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[SPEAKER_00]: We know historically mid and small caps tend to outperform their large cap peers over longer periods of time.

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[SPEAKER_00]: Why is that?

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[SPEAKER_00]: Because investors demand higher expected returns for taking on that excess level of risk.

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[SPEAKER_00]: So having them as part of your portfolio along these anchor points, these blue chip stocks can certainly be a benefit to you.

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[SPEAKER_00]: Access is easy.

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[SPEAKER_00]: Investors can buy individual shares and mutual funds ETFs that track indices like the Dow and the S&P 500 to provide this type of exposure, and certainly it should be a part of any investor's portfolio.

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[SPEAKER_00]: Bottom line, blue chips are industry titans, with enviable stability, but they're not invincible.

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[SPEAKER_00]: So investors should treat them as foundational, but not the only part of their portfolio.

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[SPEAKER_00]: Let's keep things moving and answer another caller question.

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[SPEAKER_00]: Oh, just kidding.

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[SPEAKER_00]: We got a live call.

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[SPEAKER_00]: It's good to Thomas and Santa Cruz get a question about silver and gold.

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[SPEAKER_01]: Yes, silver and gold.

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[SPEAKER_01]: I'm sure you're eventually going to get tired of answering questions about silver and gold, but I'll try to say this as straightforward as possible.

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[SPEAKER_01]: Basically, I've heard a lot of people talking about the relationship between silver and gold and then it's been getting

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[SPEAKER_01]: more out of whack being that the silver ratio to the price of gold is historically lower than the average.

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[SPEAKER_01]: Basically, I'm asking what you guys think about that in terms of like a medium hold on or buy and hold on silver compared to gold.

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[SPEAKER_01]: Gold has become a huge part of my portfolio.

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[SPEAKER_01]: I'm 28 years old.

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[SPEAKER_01]: I bought a bunch of GDX and I don't really want to sell it even though I'm

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[SPEAKER_01]: handedly, but I'm still very interested in this relationship between silver and gold and I wanted to just see where your guys' heads are at with even in addition to the gold play adding silver for a more like a medium term for that price relationship to go back to averages.

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[SPEAKER_00]: Yeah, I mean, it's a great question, right?

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[SPEAKER_00]: In the recent past, we've seen the gold to silver ratio being at a historically high level.

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[SPEAKER_00]: And that means that the price of gold has grown pretty significantly relative to the price of silver.

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[SPEAKER_00]: Earlier in the year, I think it was about 101 at some point.

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[SPEAKER_00]: It might be getting close to that, again, giving the recent trends in gold.

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[SPEAKER_00]: More recently, I think it's closer to maybe 85 to 90.

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[SPEAKER_00]: But, you know, historically what you've seen is it being in about the 50 to 60 range.

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[SPEAKER_00]: Now, while gold is hitting these record highs, it's driven by the safe haven demand by central bank buying across the board, as demand for dollars, falls the dollar is weakening.

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[SPEAKER_00]: Well, the same time silver is rising a bit, but its upside has lagged gold, because you've to realize what silver's primary use is for, right?

20:58.187 --> 21:00.847
[SPEAKER_00]: Silver has far more of an industrial

21:04.288 --> 21:19.553
[SPEAKER_00]: And so when you're talking about what's been driving the market price of these two things, there is market structure in effect here as well, not just because the demand is associated with the fear going on in the market, the safe haven status or wanting to get away from the dollar.

21:19.953 --> 21:27.115
[SPEAKER_00]: But because if you have to choose between these two metals, which he has silver tends to move, it tends to lag behind gold, but move in the same direction as well.

21:27.675 --> 21:29.276
[SPEAKER_00]: Well, in the market that we live in today,

21:30.056 --> 21:36.858
[SPEAKER_00]: Gold ETFs, gold funds, they're far more of them, they're far more liquid, they can handle those large flows.

21:37.238 --> 21:45.441
[SPEAKER_00]: Industrial demand has been down a bit over the past year or so with respect to its comparison to the demand for gold.

21:45.721 --> 21:58.066
[SPEAKER_00]: So there's really just a lot going on here from both a macro perspective, what's driving the demand, and a market structure perspective, what investors can buy into that has made this ratio expand even more.

21:58.286 --> 21:58.826
[SPEAKER_00]: That being said,

21:59.659 --> 22:03.285
[SPEAKER_00]: When the industrial activity does pick up, silver can be a great thing to buy.

22:04.046 --> 22:04.587
[SPEAKER_00]: Thanks to the call.

22:05.208 --> 22:06.510
[SPEAKER_00]: Head it in New Brakes, still to come.

22:07.151 --> 22:10.917
[SPEAKER_00]: More talking points and more answers to your questions here on Invest Talk.

22:18.314 --> 22:22.675
[SPEAKER_06]: Every investor is working to build a secure financial future.

22:23.256 --> 22:28.537
[SPEAKER_06]: How they get there and when they get there, that depends on many variables.

22:29.057 --> 22:33.379
[SPEAKER_06]: The more you learn about how the market works, the better your chances.

22:33.999 --> 22:38.580
[SPEAKER_06]: So don't forget to call, in Vestock.

22:38.600 --> 22:39.220
[SPEAKER_06]: 888-99, chart.

22:40.341 --> 22:43.662
[SPEAKER_02]: Hey guys, this is Duncan from New York and just skipping a quick phone call.

22:43.682 --> 22:46.663
[SPEAKER_02]: Because I have a question about a cryptocurrency idea

22:48.342 --> 22:59.010
[SPEAKER_02]: I have a fidelity brokerage right now, and I am investing in E, Z, B, C, because in the past, that was the only way for me to invest in Bitcoin.

22:59.551 --> 23:05.736
[SPEAKER_02]: But now, fidelity just recently just gave the ability to invest purely in Bitcoin through the Roth.

23:06.316 --> 23:14.763
[SPEAKER_02]: So, I'm now just investing in Bitcoin, but what should I do with this, E, Z, B, C, should I still keep it, or should I just sell it, and just invest solely on Bitcoin, because I

23:18.103 --> 23:20.548
[SPEAKER_02]: charges or something like that, like every other ETF, right?

23:20.568 --> 23:21.551
[SPEAKER_02]: So I'm just kind of curious.

23:21.731 --> 23:24.096
[SPEAKER_02]: I just want to consolidate and I really appreciate the help.

23:24.397 --> 23:24.958
[SPEAKER_02]: Thank you very much.

23:25.198 --> 23:25.359
[SPEAKER_02]: Bye.

23:27.228 --> 23:31.512
[SPEAKER_00]: Easy, BC is the Franklin Bitcoin ETF.

23:31.552 --> 23:34.574
[SPEAKER_00]: It was launched by Franklin Templeton Digital Holdings Trust.

23:35.435 --> 23:44.582
[SPEAKER_00]: And what it tries to do is track the performance of Bitcoin versus the CME CF Bitcoin reference rate before expenses.

23:45.723 --> 23:50.567
[SPEAKER_00]: And so if you have the ability to hold Bitcoin itself within your,

23:51.508 --> 24:01.880
[SPEAKER_00]: Roth, as I think what you said, then certainly it makes absolutely no sense to pay this company 29 basis points to hold it for you.

24:02.020 --> 24:08.608
[SPEAKER_00]: Now, that being said, I don't know much about what you are talking about with the fidelity's new ability to do this.

24:09.629 --> 24:20.366
[SPEAKER_00]: So I would check to see that it is actually not more expensive than 29 basis points, but the goal of any of these funds is to mimic the return of Bitcoin before fees.

24:20.706 --> 24:23.490
[SPEAKER_00]: So if you have a way to do it without fees, that's the way to go.

24:24.345 --> 24:24.906
[SPEAKER_00]: Thanks to the call.

24:25.226 --> 24:27.868
[SPEAKER_00]: Let's keep things moving and play two in a row at 888-99 chart.

24:27.989 --> 24:30.411
[SPEAKER_08]: Hey, this is Andrew from Atlanta.

24:30.491 --> 24:32.793
[SPEAKER_08]: Trying to reach Justin or Luke.

24:33.114 --> 24:36.297
[SPEAKER_08]: Kind of look for your analysis on the ticker symbol APA.

24:36.317 --> 24:38.179
[SPEAKER_08]: That's APA corporation.

24:38.779 --> 24:46.807
[SPEAKER_08]: It is, uh, it's subsidiaries, explorers for develops and produces natural gas, crude oil, and natural gas liquid.

24:47.433 --> 24:55.600
[SPEAKER_08]: where you think the stock is going I've been holding the price second and if I wanted to try and purchase more of it, what do you think's a good price?

24:56.061 --> 24:57.782
[SPEAKER_08]: Listen for your answer on the show.

24:58.023 --> 24:58.303
[SPEAKER_08]: Thank you.

24:59.217 --> 25:09.203
[SPEAKER_00]: AAPA corporation took her AAPA as an independent energy company and they're focusing like the color set on crude oil and natural gas and natural gas liquids.

25:09.863 --> 25:27.173
[SPEAKER_00]: They do a bit of exploration and appraisal as well, but they shift it towards more of a lean, focused portfolio, divesting from their non-corassets, which is something that I always like to see, reducing costs, and overall just trying to spend a bit less money.

25:28.013 --> 25:36.319
[SPEAKER_00]: Now, in terms of size, it's just $8.7 billion market cap company and it's got about about $6.2 billion in debt as of the end of 2024.

25:37.740 --> 25:49.089
[SPEAKER_00]: Its revenue growth has been tied to the price of the underlying products here because they peak down 2022 and it slipped down to $8.2 billion from $11 billion and 2023 back up to $9.7 billion in 2024, back down to $9.2 this year.

25:54.453 --> 25:58.563
[SPEAKER_00]: Same time margins really fell off of the cliff from 34% net margin in 2023 to 13.9% net margin in 2025.

26:04.919 --> 26:12.604
[SPEAKER_00]: Now, you know, over the past six months or so, Red of Strength has upgraded a little bit.

26:12.704 --> 26:16.606
[SPEAKER_00]: It was really weak for quite some time, especially after 2023.

26:17.386 --> 26:21.028
[SPEAKER_00]: They had a couple acquisitions, the layoffs, and restructuring.

26:21.809 --> 26:26.472
[SPEAKER_00]: And the comparative performance versus their peers has actually gotten a bit better

26:27.292 --> 26:29.774
[SPEAKER_00]: I would say since about May, right?

26:30.115 --> 26:35.899
[SPEAKER_00]: Now, you're today, they're about flat compared to the industry down five basis points relative to the industry.

26:35.920 --> 26:38.762
[SPEAKER_00]: But in the past three months, up 36.7% percent.

26:39.362 --> 26:48.270
[SPEAKER_00]: Now what do you really want to look here is something that concerns me still, which is the level of debt they have on their balance sheet, 6.2 billion dollars.

26:50.692 --> 26:57.656
[SPEAKER_00]: on a $8.7 billion market cap company doesn't seem to be a very overall healthy balance sheet to me.

26:58.337 --> 27:05.901
[SPEAKER_00]: Their dividend also is sitting around 4% nothing too crazy but definitely higher than it was in those years.

27:05.921 --> 27:06.782
[SPEAKER_00]: It was very profitable.

27:06.822 --> 27:11.685
[SPEAKER_00]: Meaning that they're probably not adjusting their dividend that much from time to time.

27:12.413 --> 27:15.897
[SPEAKER_00]: Now, from a technical perspective, like I said, it is getting a bit better.

27:15.917 --> 27:26.168
[SPEAKER_00]: I don't, wouldn't say that necessarily it's in a breakout right now, but given out far, it felt it makes sense that it might be outperforming a little bit relative to its industry overall.

27:26.489 --> 27:29.412
[SPEAKER_00]: I'm not going to pull up one other thing here, so I can take a look at its

27:29.552 --> 27:30.492
[SPEAKER_00]: Hey, out Ratio.

27:30.852 --> 27:31.372
[SPEAKER_00]: Well, that's loading.

27:31.392 --> 27:32.273
[SPEAKER_00]: Let's look at the valuation.

27:32.353 --> 27:39.654
[SPEAKER_00]: For looking price earning 7.5 times, a little bit below its average price to book 1.5 times price to cash to 1.9 times.

27:39.674 --> 27:42.534
[SPEAKER_00]: It's all sitting near or below its five year average.

27:42.895 --> 27:45.675
[SPEAKER_00]: Yet a pet Ratio is 43, so it doesn't really have.

27:45.735 --> 27:48.616
[SPEAKER_00]: It doesn't really stand in a spot where it might be cutting back its dividend.

27:49.056 --> 27:50.676
[SPEAKER_00]: Just yet, I don't know.

27:50.936 --> 27:55.037
[SPEAKER_00]: It's been in a breakout a bit since April, but still hasn't.

27:55.717 --> 27:57.324
[SPEAKER_00]: breached its early 2025 highs.

28:00.453 --> 28:11.159
[SPEAKER_00]: I think all oil and natural gas companies stand to benefit a little bit from what is going on currently in the Middle East, what is going on in Europe, rising tensions.

28:12.100 --> 28:15.602
[SPEAKER_00]: And as we head into next year, a resurgence of demand.

28:15.702 --> 28:24.427
[SPEAKER_00]: So I think that generally speaking, the prices that we saw in energy were bargains for APA though I'm a bit worried about their balance sheet.

28:24.727 --> 28:27.149
[SPEAKER_00]: That is APA Corporation, Tiger A, PA.

28:27.729 --> 28:32.493
[SPEAKER_00]: Now, warning lights are flashing a bit across the U.S.

28:32.654 --> 28:36.317
[SPEAKER_00]: auto sector, signaling some broader economic stress.

28:37.178 --> 28:43.564
[SPEAKER_00]: That's because automakers, profits are being squeezed a bit by tariffs while consumers, especially those with solid credit.

28:44.572 --> 28:45.192
[SPEAKER_00]: They're pulling back.

28:45.553 --> 28:52.698
[SPEAKER_00]: Now, car maxinations are largest to use car retailer reported a steep drop in sales and profit, and that's at the stock down about 20%.

28:52.758 --> 29:10.893
[SPEAKER_00]: They're CEO said even higher credit buyers are sitting on the sidelines, highlighting growing consumer angst or possibly even just the thoughts that down the road rates will be a bit lower, either way, both of those things can stop consumer spending just a bit.

29:11.593 --> 29:23.257
[SPEAKER_00]: Ford is offering lower interest rates to some prime buyers to move unsold F-150 pickups, while Honda scrapped an electric Accura SUV after just one year.

29:23.918 --> 29:31.420
[SPEAKER_00]: Automakers, they're piling on the discounts for EVs, ahead of a federal tax credit expiration, distorting short-term demand.

29:31.841 --> 29:37.403
[SPEAKER_00]: Now, one of the best ways to look at the auto industry is to look at auto lenders.

29:38.363 --> 29:48.074
[SPEAKER_00]: Tri-color, a sub-prime auto-lender with 65 dealerships, filed for bankruptcy liquidation amid fraud allegations and overall deepening sector turmoil.

29:48.114 --> 29:54.201
[SPEAKER_00]: First Prince, a major auto-part supplier with 6 billion in debt, is preparing for bankruptcy protection.

29:54.962 --> 29:56.023
[SPEAKER_00]: Carmax is lending arm.

29:56.423 --> 29:57.244
[SPEAKER_00]: They've also taken hit.

29:57.804 --> 30:05.309
[SPEAKER_00]: Loans from 2022 and 2023 sourd and provisions for losses climbed, prompting about $150 million in cost cuts.

30:06.010 --> 30:12.354
[SPEAKER_00]: The same time EV sales, although they're projected to jump 28% year over year in September, that may not last.

30:13.055 --> 30:15.857
[SPEAKER_00]: Given, as I mentioned, tax credits going away.

30:16.377 --> 30:19.839
[SPEAKER_00]: Gas and hybrid sales, at the same time, forecast a fall 2.5%.

30:20.940 --> 30:23.142
[SPEAKER_00]: Showing the uneven demand across the board.

30:24.559 --> 30:26.660
[SPEAKER_00]: Here's what's really hurting the auto industry.

30:27.901 --> 30:28.681
[SPEAKER_00]: High vehicle prices.

30:29.502 --> 30:31.302
[SPEAKER_00]: Elevated rates every day inflation.

30:31.322 --> 30:36.045
[SPEAKER_00]: They're all straining shoppers despite modest care for leaf from trade deals.

30:37.218 --> 30:43.603
[SPEAKER_00]: industry giants across the border cutting, citing geopolitical uncertainty and tariffs, underscoring how global pressures are weighing on autos.

30:43.644 --> 30:50.569
[SPEAKER_00]: And when you start to see consumers cracking a bit in this space, it's a warning sign that you should not ignore.

30:51.170 --> 30:53.212
[SPEAKER_00]: This is in Vestock, our phone lines.

30:53.592 --> 30:54.393
[SPEAKER_00]: Well, they never close.

30:55.093 --> 30:56.975
[SPEAKER_00]: So, let's get to a question now.

31:00.002 --> 31:02.603
[SPEAKER_04]: I want to get your analysis on MasterCard and Visa.

31:02.883 --> 31:07.125
[SPEAKER_04]: I currently own both of them in my portfolio, roughly a two percent position of each.

31:07.865 --> 31:09.326
[SPEAKER_04]: I was looking to add to them.

31:09.646 --> 31:12.247
[SPEAKER_04]: Looks like they've been going horizontal for the past few months.

31:12.667 --> 31:16.068
[SPEAKER_04]: I know they've always kind of traded fairly high compared to the market in the 30s.

31:16.088 --> 31:17.969
[SPEAKER_04]: Want to get your thoughts on that?

31:17.989 --> 31:22.130
[SPEAKER_04]: It's a good time to add now or there's a better price target.

31:22.470 --> 31:23.891
[SPEAKER_04]: You would look to be adding.

31:24.311 --> 31:26.412
[SPEAKER_04]: Thank you again, and I'll be listening to your answer on the podcast.

31:27.458 --> 31:39.668
[SPEAKER_00]: Mastercard and Visa to blue chip stocks are household names certainly and dominant players in the global payment processing space.

31:40.449 --> 31:42.951
[SPEAKER_00]: They're both fairly large companies.

31:44.134 --> 31:45.194
[SPEAKER_00]: MasterCard is a $661,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,

32:13.277 --> 32:17.480
[SPEAKER_00]: Now, both of these names trade at relatively high multiples.

32:17.900 --> 32:21.302
[SPEAKER_00]: Visa 26.4 times forward looking earnings.

32:21.963 --> 32:23.944
[SPEAKER_00]: Mastercard as soon as it's loads.

32:24.645 --> 32:25.966
[SPEAKER_00]: I'll be able to tell you.

32:25.986 --> 32:32.750
[SPEAKER_00]: 31.1 times forward looking earnings revenue growing though pretty significantly 10% for mastercard in an annualized basis, 9.4% for Visa on an annualized basis.

32:37.358 --> 32:44.875
[SPEAKER_00]: Now, here's the thing, they have had a strangle hold on the industry for quite some time, but it doesn't mean that they always will.

32:45.755 --> 32:48.917
[SPEAKER_00]: The brand and network has a pretty strong mode.

32:48.977 --> 32:57.844
[SPEAKER_00]: I don't see other types of payment processors, payment processing companies coming in and stealing much market share here.

32:58.424 --> 33:00.906
[SPEAKER_00]: But there are margin pressures from fee regulation.

33:00.946 --> 33:04.048
[SPEAKER_00]: There is cyber security fraud and data risk across the board.

33:04.088 --> 33:06.690
[SPEAKER_00]: There are macro and consumer spending cycles.

33:07.030 --> 33:09.051
[SPEAKER_00]: There's regulatory risk, legal risk.

33:09.092 --> 33:13.174
[SPEAKER_00]: The DOJ suit is suing Visa.

33:14.215 --> 33:21.180
[SPEAKER_00]: and international regulatory industries, sorry, institutions are suing them as well, and that could lead to penalties and forced structural changes.

33:21.460 --> 33:26.603
[SPEAKER_00]: There's also the threat of new technologies, digital currency.

33:27.064 --> 33:37.731
[SPEAKER_00]: Now, that being said, I think one of the biggest issues is visa, mastercard, all of these credit card companies, they provide rewards to consumers.

33:38.543 --> 33:46.788
[SPEAKER_00]: And so although businesses would like to use digital payment processing because they don't want to pay the fees to the sendmaster card, you also have to get a benefit for the consumers there as well.

33:47.348 --> 33:58.874
[SPEAKER_00]: Because of that, I don't think things are going to change dramatically in a way that these lose a lot of market share in payment processing broadly, but still it seems a bit expensive to me.

33:58.934 --> 34:02.817
[SPEAKER_00]: And in fact, above the five-year average on both accounts that is Visa

34:07.143 --> 34:07.683
[SPEAKER_00]: Thanks for the call.

34:07.963 --> 34:08.644
[SPEAKER_00]: We have plenty of time.

34:08.684 --> 34:09.984
[SPEAKER_00]: So let's drop another question now.

34:10.585 --> 34:13.426
[SPEAKER_09]: Thank you so much for all of the help you guys do for us.

34:13.706 --> 34:14.706
[SPEAKER_09]: I had a quick question.

34:14.806 --> 34:17.027
[SPEAKER_09]: I've been looking at this talk for quite some time.

34:17.387 --> 34:21.129
[SPEAKER_09]: It's Jason James, XS and X3 and XMZ.

34:21.529 --> 34:27.692
[SPEAKER_09]: I would like to know and then rewind quickly like your analysis on TXN.

34:29.383 --> 34:44.070
[SPEAKER_00]: JXN is Jackson financial, it is a firm that primarily operates in the annuities, the insurance, the retirement, the income space through Jackson National Life.

34:44.110 --> 34:53.655
[SPEAKER_00]: So it offers fixed index variable nudies and related retirement products, and also maintains a huge legacy block of insurance and annuity businesses.

34:55.105 --> 34:59.447
[SPEAKER_00]: Over the past 52 weeks, it's up 13.97% year to date up 17.33% over the past three months up 18.0 to percent net interest earned.

34:59.467 --> 35:02.188
[SPEAKER_00]: Growing a decent clip, 2023, grew at 11.4% though, it did dip a little bit.

35:15.128 --> 35:24.600
[SPEAKER_00]: After last year, net income, though, hasn't been as strong as it was in 2021 and 2022, but headed back in the right direction yet again.

35:25.541 --> 35:33.651
[SPEAKER_00]: For looking price to earnings, does look cheap, but relative to where it's been over the past five years, it is well above its five year average.

35:34.492 --> 35:43.215
[SPEAKER_00]: They did have a $1 billion increase in share repurchases in September, certainly that should continue to float the stock at least a little bit.

35:43.635 --> 35:51.698
[SPEAKER_00]: But they have to have a bit of weakness from their recent quarterly report and from a technical momentum standpoint relative strength compared to the S&P 500 dipping off.

35:53.499 --> 35:55.583
[SPEAKER_00]: a little bit over the past couple months.

35:55.763 --> 36:05.419
[SPEAKER_00]: As you've seen, many people start to reassess the value this company, but also a target price such that it has a consensus hold rating at the moment.

36:06.419 --> 36:13.007
[SPEAKER_00]: Now, what's really going to affect this is how well executed are these buybacks, how does capital allocation work going forward?

36:13.087 --> 36:16.551
[SPEAKER_00]: Is earnings going to recover, will revenue start to grow like it was before?

36:17.151 --> 36:24.019
[SPEAKER_00]: Could you have a bit of a technical breakout if it can break out above the 115 level, which does stand yet to be seen?

36:24.960 --> 36:28.984
[SPEAKER_00]: And there's just a bit of a valuation gap as well between it and its peers.

36:29.124 --> 36:31.586
[SPEAKER_00]: And then there's also the macro side of this, right?

36:31.606 --> 36:33.608
[SPEAKER_00]: You have the annuity market dynamics.

36:33.628 --> 36:34.569
[SPEAKER_00]: You have interest rates.

36:35.250 --> 36:45.719
[SPEAKER_00]: As a company that is in the annuity fixed income insurance space, how will shifts in interest rates and a regulatory environment, mortality and longevity assumptions within their books?

36:46.140 --> 36:48.041
[SPEAKER_00]: How's that all going to affect returns of this company?

36:48.822 --> 37:10.942
[SPEAKER_00]: And so, given where its valuation stand, given where a lot of its reports have been, it's quarterly reports, past two quarterly reports, given that growth hasn't really picked back up to where it was coming out of the pandemic, and where its valuation is, I think that for this $7.2 billion market cap company seems a little bit overpriced to me at the moment.

37:11.482 --> 37:13.764
[SPEAKER_00]: That is Jackson Financial Incorporation.

37:14.726 --> 37:15.967
[SPEAKER_00]: ticker JXN.

37:16.707 --> 37:22.331
[SPEAKER_00]: Now we do always talk about various topics and we do hope to inform you as the listener.

37:22.891 --> 37:29.675
[SPEAKER_00]: But if you feel as though you need a little bit of personal advice, a little bit of personal touch, Justin and I would love to speak with you.

37:30.747 --> 37:41.663
[SPEAKER_00]: Each and every day we talk to listeners just like yourself who are worried that they're not properly taking it to account, all the things they need to in order to build for their financial future.

37:42.324 --> 37:45.229
[SPEAKER_00]: So if you'd like to have a free consultation, no.

37:46.788 --> 37:47.188
[SPEAKER_00]: Commitment.

37:47.909 --> 37:48.289
[SPEAKER_00]: It's free.

37:48.630 --> 37:49.370
[SPEAKER_00]: It's confidential.

37:49.951 --> 37:55.556
[SPEAKER_00]: Head over to investsock.com, click on the portfolio review button, Justin and I can't wait to speak with you.

37:55.957 --> 37:57.238
[SPEAKER_00]: This invests stock, I'm Greer.

37:57.278 --> 37:59.920
[SPEAKER_00]: We have one goal here to help you achieve your financial freedom.

38:00.301 --> 38:03.644
[SPEAKER_00]: Our work continues after our final break, so get your questions in now at 80 to 99 chart.

38:15.976 --> 38:25.181
[SPEAKER_06]: The All-New Invest Talk Wealth webinar, beyond the Mag7, how to identify AI opportunities across sectors.

38:25.642 --> 38:35.588
[SPEAKER_06]: Join Justin and Luke as they talk about the energy grid, data center infrastructure, and how AI is boosting profits in a wide range of industries.

38:36.048 --> 38:38.990
[SPEAKER_06]: The Invest Talk Wealth webinar, September 30th,

38:39.910 --> 38:40.891
[SPEAKER_06]: one to two p.m.

38:40.931 --> 38:41.852
[SPEAKER_06]: Pacific time.

38:42.332 --> 38:46.436
[SPEAKER_06]: Online seats are limited, so register now at invest.com.

39:00.040 --> 39:11.128
[SPEAKER_00]: Tigger RGR is a firm, rouger, and company, the design manufacturer, and sell firearms to domestic customers, meaning 100% of the revenue comes from the United States.

39:11.168 --> 39:12.329
[SPEAKER_00]: Now you've held it for two years.

39:12.389 --> 39:13.670
[SPEAKER_00]: It's been a rough two years.

39:14.391 --> 39:15.292
[SPEAKER_00]: Down 10.2% in 2023, down 22.2% in 2024.

39:15.332 --> 39:18.114
[SPEAKER_00]: You're today to set a bit of a resurgence bolstered by the past three months, 17.5.

39:25.939 --> 39:28.381
[SPEAKER_00]: 2% positive in the past couple months.

39:28.821 --> 39:30.201
[SPEAKER_00]: They've had a bit of acquisitions.

39:30.221 --> 39:35.744
[SPEAKER_00]: They've done some restructuring, but the results have overall still been pretty poor.

39:36.184 --> 39:38.625
[SPEAKER_00]: It's a $709 million market cap company.

39:38.645 --> 39:40.626
[SPEAKER_00]: It's very tiny, but it doesn't have much debt, $1.7 million.

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[SPEAKER_00]: It also doesn't have much growth at all.

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[SPEAKER_00]: It peaked out in December of 2021, when people are scared they tend to buy firearms, 737 million in revenue, all the way down to 534.3 this year.

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[SPEAKER_00]: I think one of the issues is relative to its industry.

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[SPEAKER_00]: It's also underperform pretty dramatically with the exception of this year.

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[SPEAKER_00]: Dr. Performed by 22.6% in 2023 and 22.8% in 2024 and oh by the way, it's trading at 26.1 times forward looking earnings with five year average high or five year high of 26.8.

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[SPEAKER_00]: So seems to be a company that's perennially underperforming and is pretty darn expensive.

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[SPEAKER_00]: I probably move on from Stern, Ruger, and Company to CrGR.

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[SPEAKER_00]: Alright, last thing we want to talk about, for we head off for the days about utilities because utility bills have searched, rising 31% over 4 years versus 19% for overall inflation.

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[SPEAKER_00]: And so, naturally, that starts to draw some political scrutiny, rising demand from data centers, costing grid updates, and replacing coal plants are fueling a lot of this increase.

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[SPEAKER_00]: inflation and inputs like steel and labor further add to the burden and that hits customers and it attracts regulators' attention.

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[SPEAKER_00]: Indiana's governor recently appointed a commissioner to review utility profits saying investors should shoulder more of the costs.

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[SPEAKER_00]: Candidates and New Jersey's governor's race are campaigning on high bills while New York and Rhode Island proposed capping utility returns on equities at 4% far below the 10% historical average.

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[SPEAKER_00]: deregulated operators like Vistra and Constellation can really benefit from these higher prices, because of the profit motive that is included in their business, but most utilities are highly regulated.

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[SPEAKER_00]: And so they face a far tighter oversight on spending and therefore also on returns.

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[SPEAKER_00]: Now return it on equity, make up about 15 to 20% of bills, and regulators under

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[SPEAKER_00]: Fix, political focus on utilities, hasn't really been this intense since, I don't know, the late 80s, when inflation and high rates and grid investment really started to collide like it is now.

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[SPEAKER_00]: If you look at the spread of utility returns over treasuries, it's narrowed.

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[SPEAKER_00]: It's near to five percentage points.

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[SPEAKER_00]: It's its lowest level since 1999.

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[SPEAKER_00]: And that's done a lot to tighten profitability margins.

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[SPEAKER_00]: Some analysts argue profit cutting proposals,

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[SPEAKER_00]: Or mostly political feeder, but others warn investors not to dismiss the risk.

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[SPEAKER_00]: Despite the sector's state reputation, AI-driven power demand has fueled a 14% stock values, your 14% in an industry in a sector that is traditionally just used for income as a bond proxy.

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[SPEAKER_00]: These are some crazy returns relative to what you generally see, and that's pushed valuations up far well above the long-term averages.

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[SPEAKER_00]: So here's the paradox.

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[SPEAKER_00]: utilities are facing booming demand and a trillion dollars in planned grid investment.

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[SPEAKER_00]: And you a see that and think to yourself, man, I got to get in here.

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[SPEAKER_00]: But rising bills means that you as a utility investor may have to bear more of the heat.

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[SPEAKER_00]: than the reward.

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[SPEAKER_00]: That concludes another invest talk program, Justin and I thank you for joining us and encourage you to tell your friends and family members about your free podcast download that you can get at iTunes and Spotify.

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[SPEAKER_00]: Also, today's show may do think about your own financial picture, your investments, your taxes, your retirement, and whether it's all really working together, we would love to talk to you.

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[SPEAKER_00]: If that sounds interesting, or if you want to sign up for our webinar on September 30th, head over to invest.com, click on the webinar button or the portfolio review button.

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[SPEAKER_00]: Independent Thinking?

43:43.909 --> 43:44.550
[SPEAKER_00]: Sure, it's success.

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