[SPEAKER_00]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is invest talk, independent thinking, shared success.

[SPEAKER_00]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

[SPEAKER_00]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

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

[SPEAKER_02]: This is our Friday September 26, 2025 edition, and guess what?

[SPEAKER_02]: Only two more trading days left in this quarter, and we will soon embark on the final quarter of the year, which

[SPEAKER_02]: Usually the first part of the fourth quarter is interesting the second half usually not so much, but you know, we're in interesting time.

[SPEAKER_02]: So anything can happen and we are here to unpack it all for you.

[SPEAKER_02]: I'm Justin Klein, my objective as always to help you become a better investor.

[SPEAKER_02]: So, what help you understand the market dynamics and how they might affect your portfolio.

[SPEAKER_02]: with the opportunities are in the marketplace, as well as the potential pitfalls.

[SPEAKER_02]: And that's what this hour is about, and it's about answering your finance and investment questions, as well as giving you data and perspective, that you can take those back with you and apply them to your own personal situation.

[SPEAKER_02]: So just to be able to talk about today's market activity and performance, but as usual, rundown the show topics in, we'll tackle this call a question.

[SPEAKER_08]: Hey, Jason Luke, I was just wondering what you guys thought about Everest Group, Tickerssemble EG.

[SPEAKER_08]: How was it for the answer on the show?

[SPEAKER_08]: Thank you.

[SPEAKER_02]: Alright, looking at Everest Group, EG is the symbol and for most of you, this is probably too boring for you.

[SPEAKER_02]: It is an insurance company offering reinsurance and insurance products in the United States and worldwide about a $14 billion market cap.

[SPEAKER_02]: And once again, isn't exciting, but it's a consistent business, consistent solid business, and you've done it like this.

[SPEAKER_02]: You've done it like those businesses that are good for cash flow, about $5 billion on a $18 billion enterprise value.

[SPEAKER_02]: That's pretty good.

[SPEAKER_02]: And it's in a consistent uptrend.

[SPEAKER_02]: Once again, not exciting, but and then not, not going to blow the doors off of

[SPEAKER_02]: the market in any given year.

[SPEAKER_02]: So this is probably not the worst stock performance for the year or the best.

[SPEAKER_02]: It will never be one or the other, but it will have kind of consistency.

[SPEAKER_02]: So for example, the five year total return is about 13.8% annualized.

[SPEAKER_02]: That's pretty good.

[SPEAKER_02]: 13.8% annualized.

[SPEAKER_02]: Now the index is about 16, but obviously that's very top heavy and very tech heavy.

[SPEAKER_02]: This is going to have a lot less volatility than most other companies, right?

[SPEAKER_02]: So that's what I like about it earnings are supposed to be a 57% this year to $46.93.

[SPEAKER_02]: It's a $349 stock and next year it's going to earn $60 and 38 cents.

[SPEAKER_02]: So it's a pretty reasonable forward looking multiple to be honest with you.

[SPEAKER_02]: because they're in $66 in 2023, then only $30 last year, about 55%.

[SPEAKER_02]: So it can be all over the board, but once again, if you zoom out to a weekly or monthly chart, it's just in an uptrend.

[SPEAKER_02]: Because it's a consistent business with good cash flows.

[SPEAKER_02]: So I'm going to give Everos Group a thumbs up based on its current valuation, its broader trends, profitability, cash flow, etc., and boring business, but usually those have some of the best returns long term.

[SPEAKER_02]: Now, we've got a lot of ground to cover over the next 45 minutes, and this is what we have, plan, or at least some of it.

[SPEAKER_02]: Our main focus point is about...

[SPEAKER_02]: a comfortable retirement is $2 million enough to retire comfortably.

[SPEAKER_02]: We'll look at some of the factors to consider.

[SPEAKER_02]: In addition, we'll have other topics on the docket.

[SPEAKER_02]: One is regards to safe havens.

[SPEAKER_02]: They are becoming increasingly more rare.

[SPEAKER_02]: So how to think about safety in an environment where government bonds are no longer a sure bet.

[SPEAKER_02]: look at that.

[SPEAKER_02]: Also, there's a new report coming out of Harvard around AI, the quality of AI output.

[SPEAKER_02]: Okay, so we'll look at that story as well.

[SPEAKER_02]: We'll also have voice bank calls, one is on data vault, DVLT, and the others diamond back.

[SPEAKER_02]: Energy, F-A, and G. And of course, we have some questions that came in from the Invest Talk YouTube channel as well.

[SPEAKER_02]: And most importantly, we'll be here live calls.

[SPEAKER_02]: I know it's Friday.

[SPEAKER_02]: Everyone wants to get to the weekend, but it's never too late to pick up the phone, give us a call, and get an answer to something that might be in your mind.

[SPEAKER_02]: probably on someone else's mind that's listening as well.

[SPEAKER_02]: So not only are you helping yourself, you're helping others as well.

[SPEAKER_02]: But we're going to head to a quick break.

[SPEAKER_02]: I'm ready for your calls right now at 8.899 chart.

[SPEAKER_01]: It's happening in less than a week.

[SPEAKER_01]: Get ready for an all new Invest talk, wealth webinar.

[SPEAKER_01]: Beyond the Mag7, how to identify AI opportunities across sectors.

[SPEAKER_01]: 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.

[SPEAKER_01]: They'll be talking about the energy grid, data center infrastructure, and how AI is boosting profits in a wide range of industries.

[SPEAKER_01]: The All-New Invest Talk Wealth webinar, happening online, September 30th from 1 to 2 p.m.

[SPEAKER_01]: Pacific Time.

[SPEAKER_01]: Seats are limited, so register now

[SPEAKER_01]: There's value in every Invest Talk podcast.

[SPEAKER_01]: So call in Vestalk, 888-99, chart.

[SPEAKER_01]: The Invest Talk phone lines never close.

[SPEAKER_01]: And now, Justin Klein is here, call in Vestalk, 888-99, chart.

[SPEAKER_02]: $8899 chart $889924278 so I could do an ask your question on today's show.

[SPEAKER_02]: Let's take a quick look at the markets overall and it was a bounceback day after a sell-off.

[SPEAKER_02]: Yesterday you did get the S&P up about.

[SPEAKER_02]: six tenths of one percent and the Nasdaq was about four tenths of one percent.

[SPEAKER_02]: That was also about six tenths of one percent.

[SPEAKER_02]: So suddenly the values had the market out performed a bit.

[SPEAKER_02]: On the day you did have names like Apple down half percent meta down 0.7 percent video was roughly flat.

[SPEAKER_02]: So really the the only red in the market today was in the tech space.

[SPEAKER_02]: Oracle, Palantir, Meta, Apple, Cisco, MD, Broadcom, GE, those are the names that were down, Costco, also down about 2.9% after earnings.

[SPEAKER_02]: But outside of that, almost everything was flat to higher, especially in the finance space as well.

[SPEAKER_02]: So pretty solid day or bounce back day in markets overall.

[SPEAKER_02]: When it comes to the economic friends, you did have Core PCE, Core PCE came at 0.2% 0.2% month over month, which frankly is it was in line with the market expectations.

[SPEAKER_02]: So, really wasn't a huge surprise.

[SPEAKER_02]: You did see year of year accelerated from 2.85, the 2.91, and that's on the Core PCE, the traditional PCE was at 2.74, that's from 2.6.

[SPEAKER_02]: We remain in an environment, I said to this early in the year, I said we're going to start to see inflation accelerate in the back half of the year, probably closer to the one percent.

[SPEAKER_02]: Why we were threatening to get down to the 2% earlier in the year, kind of that Fed target, but now we're starting to re-excelerate in the back half of the year.

[SPEAKER_02]: So it's not a surprise here.

[SPEAKER_02]: Not runaway inflation, nothing crazy like you saw in 2021 and 2022, but it's certainly still there, right?

[SPEAKER_02]: The inflation is not going away and we don't expect it to any time soon.

[SPEAKER_02]: So personally income, that was a 0.4% month over month.

[SPEAKER_02]: That was higher than the consensus, which is 0.3%.

[SPEAKER_02]: personal spending group point six percent slightly higher than the point five percent as expected so little worrying come a little more spending overall that's positive for the economy and not a shock to see that pc e number come in at or slightly above consensus with the market kind of shock it should shook it off excuse me shook it off overall you did see a some social

[SPEAKER_02]: furniture products, et cetera.

[SPEAKER_02]: So that did jot down some within those areas.

[SPEAKER_02]: You had September, US consumer sentiment came at 55.1 consensus 55.9 August with a 58.2.

[SPEAKER_02]: So you're seeing consumer sentiment start to proceed just a bit as of late as well.

[SPEAKER_02]: And that's kind of how we closed the week remain over bought in markets, but

[SPEAKER_02]: Nothing, there's no real catalyst, especially in the liquidity front that's gonna tell us, say the market's going to pull back in the short short term.

[SPEAKER_02]: Anything could happen, but as of now, but you're now in your end, as long as the trend is in place, the trend is your friend, until the end of the end is not here.

[SPEAKER_02]: Let's go take a live call, John, from Santa Cruz looking at N-N-G-G, which is national grid, you own it or looking to buy it.

[SPEAKER_02]: Hi Justin, I'm looking to buy it.

[SPEAKER_02]: Okay, maybe.

[SPEAKER_02]: I know this, there's a lot of debt.

[SPEAKER_02]: Yeah, they do have a lot of debt.

[SPEAKER_02]: That's a feature of most utility companies.

[SPEAKER_02]: Just FYI, this is how it is.

[SPEAKER_02]: And our national grid is what you get with national grid is you get US production, US exposure, but you also get some foreign exposure as well.

[SPEAKER_02]: They do have a lot of, they'd be operations in the UK.

[SPEAKER_02]: If you look at their geographic revenue breakdown,

[SPEAKER_02]: 63% of the revenue comes in the United States.

[SPEAKER_02]: 36% comes from the UK.

[SPEAKER_02]: So it's more or not internationally diversified.

[SPEAKER_02]: versus a lot of other utility companies you might buy.

[SPEAKER_02]: 60% of the revenue comes from North East Electric Utility.

[SPEAKER_02]: Operations 33% comes from Europe, Middle East, and Africa.

[SPEAKER_02]: Utility operations, and then they have some private equity and venture capital exposure as well, which is pretty interesting.

[SPEAKER_02]: So.

[SPEAKER_02]: That is how you breaks down here.

[SPEAKER_02]: Once again, 4% of quarter percent dividend yields, their earnings are expected to be at an all-time high next year of $5.88.

[SPEAKER_02]: Since the technicals are fine, it's just been consolidating here in the low 70s for a little while and we look at the other chart here.

[SPEAKER_02]: Yeah, it's just been consolidating right here on 71, 72, 73 in that range.

[SPEAKER_02]: and overall that's positive, it's above most of the major moving averages.

[SPEAKER_02]: It's not a word of value, especially if you look on based on forward-looking earnings.

[SPEAKER_02]: And I do like the diversity a bit.

[SPEAKER_02]: So,

[SPEAKER_02]: I, I had nothing wrong with buying NGG if you're trying to gain some exposure to the utility space.

[SPEAKER_05]: I'm okay, great.

[SPEAKER_05]: Thank you.

[SPEAKER_02]: No problem.

[SPEAKER_02]: Thanks for the call.

[SPEAKER_02]: Appreciate it, John.

[SPEAKER_02]: 8899 chart.

[SPEAKER_02]: 889924278 is how you get through an asker question.

[SPEAKER_02]: Let's pivot over and answer a new voice mail call.

[SPEAKER_02]: Okay, and that's talk.

[SPEAKER_04]: Just had a question about a stock ticker DVLT, it's the out of all AI ink.

[SPEAKER_04]: up like 160% over the last week.

[SPEAKER_04]: I was just curious why that was and I noticed that they've been losing money for about a year.

[SPEAKER_04]: I just thought I would ask why it's involved.

[SPEAKER_04]: I'll listen for my answer on the show.

[SPEAKER_04]: Thank you.

[SPEAKER_02]: All right, this is interesting.

[SPEAKER_02]: I've developed AI and it's up as you would imagine because of some sort of AI hype and engaging AI driven data experiences and valuation and monetization of assets in the web 3.0 environment.

[SPEAKER_02]: Let's see, acoustic data science and data science divisions around spatial and multichannel wireless HD sound transmission.

[SPEAKER_02]: Yeah, I don't know much about the technology.

[SPEAKER_02]: Obviously, a very small company is a penny stock dollar 10 price right now.

[SPEAKER_02]: It's a $100 billion market cap, but like you said, they should lose money.

[SPEAKER_02]: The free cash flow negative to $211.5 million, okay?

[SPEAKER_02]: They are

[SPEAKER_02]: serial issuers of stock, especially since the latter part of last year, it's 7.7 million shares outstanding.

[SPEAKER_02]: Now they're at 97 million shares outstanding.

[SPEAKER_02]: In basically, less than a year, less than a year.

[SPEAKER_02]: They're never shares outstanding.

[SPEAKER_02]: We've gone up 10x.

[SPEAKER_02]: So, that's why the stock price has gone since 2021, it peaked around split adjusted, 76,000 dollars, now it's at $1.00, 9.

[SPEAKER_02]: So, it's a penny stock, it's bouncing along the bottom, and obviously this is a very, very poorly ran company, revenues are rising, but last quarter, revenues were $1.7 million.

[SPEAKER_02]: That $1.7 billion, but $1.7 million,

[SPEAKER_02]: obviously that is pretty extreme and you know this is all around you have to be a very big fan of their technology.

[SPEAKER_02]: I don't know particularly much about their technology and I would need to do a deep dive and really understand it before I'd say okay by this for potential buyout but clearly based on the trends in profitability and the number

[SPEAKER_02]: Now we're moving into a break still to come, my focus point, and we're answers to your questions, so I encourage you to call now on the best talk at 8.98.

[SPEAKER_01]: The weekend is here or almost here, but you've got financial investment questions, so step up and call in, in Vestalk, 88899 chart.

[SPEAKER_02]: Our main focus point today on a best talk is about or answering the question, is $2 million enough to retire comfortably?

[SPEAKER_02]: That used to be one million dollars off, a million air.

[SPEAKER_02]: I just have a million dollars.

[SPEAKER_02]: I have enough.

[SPEAKER_02]: Well, obviously with inflation, that's probably no longer the case.

[SPEAKER_02]: So, the standard answer now is, okay, any $2 million.

[SPEAKER_02]: And the simple, well, I'm going to say the simple.

[SPEAKER_02]: The answer to what the $2 million is enough is

[SPEAKER_02]: And this is where financial planning comes in.

[SPEAKER_02]: This is what I do with clients all the time.

[SPEAKER_02]: We do it with clients today.

[SPEAKER_02]: And it depends on a lot of factors.

[SPEAKER_02]: So things like cost of living your spending habits and how long you think you'll live.

[SPEAKER_02]: These all play a role.

[SPEAKER_02]: As well as what other income you might have.

[SPEAKER_02]: So things like social security, pensions, hard time work, et cetera.

[SPEAKER_02]: So let's go over the various factors and really dig into each one.

[SPEAKER_02]: Now the first is when you choose to retire, are you trying a 62 or 67 or 70 or maybe 55?

[SPEAKER_02]: All of these create a varying, all of these create varying complexity when it comes to the planning process.

[SPEAKER_02]: Social Security, when to take Social Security, as well as Medicare, when that kicks in at 65.

[SPEAKER_02]: So, if you're trying a 62, well, then you got to pay for your own health care for three years before you get to Medicare.

[SPEAKER_02]: You're tiring 55, well now you've got to pay for your medical insurance for a decade.

[SPEAKER_02]: And then also, you're not paying into Social Security as long.

[SPEAKER_02]: So your overall benefit is going to be less.

[SPEAKER_02]: So all of this plays into the planning process.

[SPEAKER_02]: Once again, so choose your retirement age carefully.

[SPEAKER_02]: So, retiring before additional age typically requires more savings and Social Security, the longer you can wait to take Social Security, that creates a reliable source of income that can supplement a $2 million dollar mistake, for example.

[SPEAKER_02]: So, this is what we do.

[SPEAKER_02]: You can coordinate Social Security timing with needs for income, as well as optimizing tax efficiency.

[SPEAKER_02]: For example, pushing Social Security off the 70 allows for a gap between retirement age, whether it's 62, 63, 65, 67, whatever that is.

[SPEAKER_02]: And, and so it takes Social Security and you can do Roth conversions in that time and do some tax planning and create some tax efficiency.

[SPEAKER_02]: So that's why the timing of your retirement is vital.

[SPEAKER_02]: then it comes down to your spending habits in retirement.

[SPEAKER_02]: So your lifestyle habits.

[SPEAKER_02]: Now, things like housing groceries, transportation, healthcare costs, those can vary by region.

[SPEAKER_02]: You don't have a lot of say besides where you live, right?

[SPEAKER_02]: It's just what the cost living is.

[SPEAKER_02]: around there and usually you're doing your living in an area that you're close to friends or relatives, right?

[SPEAKER_02]: So, like you don't have control over them, which you do have is your lifestyle expectations, things like, often you're traveling, eating out, supporting family, buying luxury items of any kind.

[SPEAKER_02]: And then there's inflation.

[SPEAKER_02]: So inflation right now is nearly nearing 3% we talked about that earlier.

[SPEAKER_02]: And historically, with the past 30 years, the natural inflation rate that everyone was Pennsylvania was 2%.

[SPEAKER_02]: It's pretty clear right now that it's going to be probably closer to 3, maybe even 4% for going forward.

[SPEAKER_02]: Our base case for our client, financial plans are 3%.

[SPEAKER_02]: That doesn't sound like a lot, but a 1% difference year after year after year, to mean a lot over a 30 to 40 year period.

[SPEAKER_02]: So don't think that that 2 to 3% difference is minor.

[SPEAKER_02]: It can be very major, depending on when you retire and your full life expectancy.

[SPEAKER_02]: And then that's the next variable, life expectancy.

[SPEAKER_02]: By 2050, it's expected that all sexes will live until 80 and a half, roughly.

[SPEAKER_02]: That's going to be the average age or the median age.

[SPEAKER_02]: So make sure you plan to live longer.

[SPEAKER_02]: And maybe even work longer.

[SPEAKER_02]: And then I'd be, remember that, I'd not be full time working longer, but maybe part time, as well, and we do encourage our clients our retirees to say, okay, if you're going to retire, think about your day to day, think about you getting up every day and doing something.

[SPEAKER_02]: and a lot of times that can be supplementing your income from your portfolios.

[SPEAKER_02]: And then being strategic about your withdrawals, taking out too much too soon, can zap your growth potential and earn income potential of your assets.

[SPEAKER_02]: So putting buckets, so think of the first bucket would be expenses in between the next one to two years.

[SPEAKER_02]: That's in cash or high yield money market accounts.

[SPEAKER_02]: or how you'll save these accounts.

[SPEAKER_02]: Then there's Bucket 2, which is kind of medium term three to 10 years.

[SPEAKER_02]: Those are lower risk investments, so maybe moderate to low risk.

[SPEAKER_02]: And then you're longer 10 plus years, that's where you could take a little bit higher risk, as well.

[SPEAKER_02]: And don't think that life events are not going to throw you for a loop, so make sure you're planning for that.

[SPEAKER_02]: And remember that this is nothing is a one-size-fits-all solution.

[SPEAKER_02]: The 4% rule or whatever, you know, you want to sit down and develop a plan, model this out to what we do for clients, so you should have an advisor that's going to do this.

[SPEAKER_02]: Now, the next and best stock will look into this story.

[SPEAKER_02]: The sunk cost fallacy, while you can't walk away.

[SPEAKER_02]: We'll dig into that story on Monday, but give me a call now at 8-899 chart.

[SPEAKER_01]: It's happening in less than a week.

[SPEAKER_01]: The all new Invest talk will webinar beyond the Mag7.

[SPEAKER_01]: How to identify AI opportunities across sectors.

[SPEAKER_01]: Happening online, September 30th from one to two PM Pacific Time.

[SPEAKER_01]: Seats are limited, so register now at InvestTalk.com.

[SPEAKER_02]: Let's take a live call, Sam from San Jose,

[SPEAKER_02]: Hello.

[SPEAKER_02]: How's it going?

[SPEAKER_02]: You're a new trader experience trader.

[SPEAKER_02]: How are we how we classify?

[SPEAKER_05]: I'm individual investor thanks have been listening to your show for quite a few months.

[SPEAKER_05]: Great insights.

[SPEAKER_05]: Thank you.

[SPEAKER_05]: Have a simple question.

[SPEAKER_05]: I'm trying to get into momentum trading roughly with a week or two week of window by and sell within those weeks.

[SPEAKER_05]: How should I be picking my stocks?

[SPEAKER_05]: What will be a good stock that I can look at right now?

[SPEAKER_05]: For example.

[SPEAKER_02]: What I'll have a one particular, but the way that when you're looking, what you're trying to do is we call that swing trading in this business, okay?

[SPEAKER_02]: It's not day trading.

[SPEAKER_02]: It's not, when that buying today and also selling today, I'm buying today and I'm selling within, called two to four weeks.

[SPEAKER_02]: Okay, that's what we call swing trading.

[SPEAKER_02]: I'm not in it for a long time.

[SPEAKER_02]: I'm just in it for that next move.

[SPEAKER_02]: Okay.

[SPEAKER_02]: Now, what it comes to that, there's almost no fundamental work.

[SPEAKER_02]: It doesn't matter what the company does, what earnings are going to be.

[SPEAKER_02]: We call this price pattern in time.

[SPEAKER_02]: What is price doing?

[SPEAKER_02]: Is it trending higher?

[SPEAKER_02]: Is it trending lower?

[SPEAKER_02]: What is the pattern?

[SPEAKER_02]: Is it pulling back into major support?

[SPEAKER_02]: Is it just been consolidating in particular area?

[SPEAKER_02]: And how long has been doing these things?

[SPEAKER_02]: And that is all you're considering.

[SPEAKER_02]: That's all that matters.

[SPEAKER_02]: It's a technical analysis game.

[SPEAKER_02]: And I'll be honest, there are plenty of people that are good at this game.

[SPEAKER_02]: that understand the rhythms and flows of the markets, y'all patterns, like consolidation patterns, wedge patterns, pullback patterns, flags, et cetera, that if you have the right tools, you can go identify them and capitalize on that consistently.

[SPEAKER_02]: Now, if you can talk about sectors and you think sector and try to identify sectors that are trending well and kind of jump on the bad and wagon of those sectors as well.

[SPEAKER_02]: For example, AI, anything AI related right now tends to be doing fairly well, although you are getting a bit of weakness in some pockets.

[SPEAKER_02]: And understand that that this is not a hundred percent game.

[SPEAKER_02]: You are going to have losses.

[SPEAKER_02]: You have to have good risk management.

[SPEAKER_02]: Meaning you're going to buy something for a potential move.

[SPEAKER_02]: Know your outs.

[SPEAKER_02]: No where if it gets below this, I'm out.

[SPEAKER_02]: It's no longer has that pattern.

[SPEAKER_02]: It's in hold the pattern that I expected to.

[SPEAKER_02]: It didn't hold the support I expected it to.

[SPEAKER_02]: et cetera, and I'm out, that will happen.

[SPEAKER_02]: Chart reading isn't art, it's not a science.

[SPEAKER_02]: And anything can happen from, you know, broader market movements that suddenly impact every company that's out there, you can have particular companies with in a sector that's not the company you're playing, that it gets bought out or comes out of the bad earnings announcement, or has a fraud claim or whatever, that can kind of start to spread to others within the industry.

[SPEAKER_02]: and all of these are variables that make it so it's not it's not it's not easy it's not perfect but if that's what you're trying to do you're trying to be a swing trader that's all you care about you just care about the price pattern and time learning how to read a chart have a good charting tool don't be using online free chart or anything like that thanks for the call

[SPEAKER_03]: Yeah, hi, Justin.

[SPEAKER_03]: Let me give you a take on my call.

[SPEAKER_03]: I have a question about this fund specifically, but also just how value funds work in long-term practice.

[SPEAKER_03]: It seems like to me if you own a value stock in an ETF, and let's say you own it for 30 years, and as time goes on, that is that fund.

[SPEAKER_03]: Wouldn't those companies, if they did appreciate and their cap got bigger, wouldn't they nationally rotate out of that fund?

[SPEAKER_03]: It seems like long-term either wouldn't own same companies or the fund if it did own the same companies that would nationally turn into a mid-cap fund.

[SPEAKER_03]: I'm just trying to understand the concept of how it outperforms and how it rotates.

[SPEAKER_03]: owning individual small cap companies, and what would be the benefit version of the ETF.

[SPEAKER_03]: Thank you so much.

[SPEAKER_02]: There are some drifts here you're talking about in different styles.

[SPEAKER_02]: So there's this is the event is U.S.

[SPEAKER_02]: market value ETF AVU V. Now, it can drift into ways.

[SPEAKER_02]: Now, one is correct that it can drift and will naturally drift, if it does well, if the companies with in this fun do well, they start to drift into large cap.

[SPEAKER_02]: And then you sell another idea is that there's more upside potential.

[SPEAKER_02]: So once they, uh, more upset potential for the fun to rotate it back into smaller cap names, right, so if it goes from, you know, a couple of billion dollar market cap to 20 billion now it's a mid cap stock, it's gone up 10 times the odds of it going from 20 billion to 200 billion is now a lot less than, you know, the move from 2 billion to 20 billion, right?

[SPEAKER_02]: So you have, uh, it can make more sense to say, okay, it's a mid cap,

[SPEAKER_02]: Rotate it back into a $2 billion name that has the higher potential to go to a mid-cap, then a mid-cap going to a large cap, like a $200 million.

[SPEAKER_02]: So that is true.

[SPEAKER_02]: There's that aspect that it can naturally rotate out of the successful names.

[SPEAKER_02]: But then there's the value side.

[SPEAKER_02]: And you say, well, no longer become value.

[SPEAKER_02]: And that's not necessarily true, because value is an a size thing.

[SPEAKER_02]: Value is a value thing, a multiple, a reasonable price that it's trading for.

[SPEAKER_02]: Usually growth your names, tend to trade at high multiples, high multiples to sales, to EBITDA.

[SPEAKER_02]: Et cetera, because the market is pricing in a certain level of growth going forward,

[SPEAKER_02]: more often than not, they dot that growth is overestimated.

[SPEAKER_02]: But those, the handful of names that, when they do very well, they will naturally grow out of the value side if they, their earnings are accelerating very fast, and now it's no longer a value name, and it will get trimmed.

[SPEAKER_02]: But it can continue to do well, maybe you've had a dividend, for example, and remain a small cat value name, even though it does very well.

[SPEAKER_02]: It might just pay out a 45% dividend plus little appreciation each year, and it remains a small cat that remains a value name, and it stays in this fund.

[SPEAKER_02]: So it can go a million different ways when it comes to performance and style factor drift.

[SPEAKER_02]: That makes sense?

[SPEAKER_03]: Yeah, I'm excited.

[SPEAKER_03]: And referring to this fund compared to other funds,

[SPEAKER_03]: for a small cap value fund?

[SPEAKER_02]: It's a solid fund.

[SPEAKER_02]: It's the advantage, U.S.

[SPEAKER_02]: small cap value ETF.

[SPEAKER_02]: I would say my biggest issue is there's no foreign exposure here.

[SPEAKER_02]: I'm at two and a half percent of the portfolio is foreign exposure.

[SPEAKER_02]: It is a small cap value.

[SPEAKER_02]: It does tend to have better performance than other small cap value funds, for example.

[SPEAKER_02]: In a year to date, it's kind of middleing 48% tile.

[SPEAKER_02]: So it's about right where the index is.

[SPEAKER_02]: last year was kind of the same.

[SPEAKER_02]: 2023 did much better.

[SPEAKER_02]: It was in the 15% tiles up 23% versus the category was only up about 17%.

[SPEAKER_02]: 2022, the category was down 10%.

[SPEAKER_02]: It was only down 5%.

[SPEAKER_02]: So that was the 17% tile.

[SPEAKER_02]: 2021, it was in the 8th% tile up 42% versus the categories up 31.

[SPEAKER_02]: So,

[SPEAKER_02]: You're getting over the past couple of years kind of middleing fears before that.

[SPEAKER_02]: It was really good hasn't been around a ton of time to say, OK, this has been doing.

[SPEAKER_02]: This is going to gain busters compared to its category for the last two decades.

[SPEAKER_02]: It doesn't have that track record.

[SPEAKER_02]: But so far, since it came about in 2020, it's done fairly well.

[SPEAKER_02]: I think there's a lot worse funds that you can invest in.

[SPEAKER_02]: So if you're looking for small cat value, UETF, this would be a pretty solid one despite it's lack of track records.

[SPEAKER_03]: Thank you so much.

[SPEAKER_02]: No problem, thanks for the call.

[SPEAKER_02]: Now, we generally make time as we close the week for a quick rundown of some key benchmark numbers.

[SPEAKER_02]: So let's do that right now.

[SPEAKER_02]: With the two year treasury yield, last week was at 3.58% the close the week.

[SPEAKER_02]: This week at 3.64% up to

[SPEAKER_02]: about six basis points on the week, pretty decent move to be honest with you, and that's all kind of fading a little bit the expectations of aggressive Fed easing going forward.

[SPEAKER_02]: Some of that were remarks from Fed members, other was economic data that kind of came in fine and is going to put a little less pressure on the Fed to ease over the last two meetings.

[SPEAKER_02]: Also, moved out from 4.14 to 1.17.

[SPEAKER_02]: So about three, three and a half basis points there.

[SPEAKER_02]: Less so that the curve kind of flattened just a little bit.

[SPEAKER_02]: That was interesting and certainly of note.

[SPEAKER_02]: Gold prices 3761 per ounce and $80 increase from last week.

[SPEAKER_02]: So gold remains in a very strong uptrend.

[SPEAKER_02]: Silver today, 4609 per ounce.

[SPEAKER_02]: a $3.11 increase compared to last week's huge move for silver.

[SPEAKER_02]: I think it's destined for that $50 mark and then we'll kind of see where we go from there.

[SPEAKER_02]: But silver doing very, very well and starting to lead in the precious metal space, which also is a very good sign for precious metals in general.

[SPEAKER_02]: Oil, $65, $24, and that's up $2.75 from the prior week.

[SPEAKER_02]: We're still kind of in the range that we've been in for a while now, but a year ago, roughly, it was around $67, so we're kind of flat year over year, and we're in this kind of mid-60s range where it's still profitable for shale oil to produce, but not to really invest in new production.

[SPEAKER_02]: And you're seeing Saudi Arabia increase their production as well, and they've become the swing producer once again, and they're kind of comfortable with this price.

[SPEAKER_02]: And so I do think oil could accelerate from here into the 70s, especially with a weaker dollar, but overall kind of still in a broader consolidation period that we've been in for a year.

[SPEAKER_02]: Gasoline prices, $3 and $14 cents, six cents decrease from last week.

[SPEAKER_02]: So, interesting oil going up a little bit, but national gasoline prices down.

[SPEAKER_02]: Here in California, $4 and 64 cents, we only decreased one cent compared to last week.

[SPEAKER_02]: In comparison, Georgia, averaging $2.88 per gallon today.

[SPEAKER_02]: Now let's pivot over and talk about safe havens, safe havens in markets, and there's a very interesting trend happening, and it's most notable in countries like France.

[SPEAKER_02]: as much if not more than corporate bonds within that country.

[SPEAKER_02]: For example, the insurance carrier access, which is a French company, now has yields that are lower than the yield on French government bonds.

[SPEAKER_02]: Historically, when times are tough, there's economic unrest

[SPEAKER_02]: put government bonds at the top.

[SPEAKER_02]: They are the safe haven.

[SPEAKER_02]: They are what you flock to in times of distress.

[SPEAKER_02]: Because they always pay their debts back.

[SPEAKER_02]: They can increase taxes, they can print their own money, et cetera.

[SPEAKER_02]: But suddenly, that is starting to be put in question and not just the smaller emerging markets, but the developed markets as well, like France.

[SPEAKER_02]: And it's not just France, companies or countries like Germany, and even here in the U.S.

[SPEAKER_02]: while Treasury won't still yield less than almost every corporate bond out there, it's starting to tighten.

[SPEAKER_02]: And a lot of people would say, well, that's because the economy is fine.

[SPEAKER_02]: But the question is,

[SPEAKER_02]: That why that gap remains tight or is there starting to become a premium on those government bonds?

[SPEAKER_02]: And that's staying relatively elevated compared to the corporates which are suddenly feeling a bit safer in the midst of, for example, US institutions becoming maybe politicized think of the Fed being politicized.

[SPEAKER_02]: The main safe haven is diversification because nobody really knows where the next huge problem will arise from.

[SPEAKER_02]: It used to be, it will never be the sovereign bond.

[SPEAKER_02]: But now that's no longer the case, especially after 2022, you're at least long-term bond yields rising, and there's still trillion plus dollars of noxional value of these long-term bonds under water.

[SPEAKER_02]: And so investors don't want to go out there in the risk curve.

[SPEAKER_02]: and take on duration.

[SPEAKER_02]: And so you're starting to see a lack of true institutional ownership of these longer-dated bonds that's raising yields and making the difference between those corporate bonds.

[SPEAKER_02]: And you

[SPEAKER_02]: sovereign debt start to come in and start to converge and immense up like in France.

[SPEAKER_02]: So this is another reason why you are getting a rally in precious metals in a major way.

[SPEAKER_02]: It's not just the India's and China's and Russia's of the world that are trying to diversify out of U.S.

[SPEAKER_02]: treasuries, but it's also investors that are trying to diversify out of sovereign debt.

[SPEAKER_02]: We're in a global sovereign debt bubble that is starting to unravel in a broader sense.

[SPEAKER_02]: You know, it's not.

[SPEAKER_02]: happening right now in a major way, but it's slowly, right?

[SPEAKER_02]: How do you go bankrupt?

[SPEAKER_02]: It's slowly then all of a sudden, and I think we started the Accelerate this slowly, right?

[SPEAKER_02]: It was slowly for 30 years, but now it's starting to become It's starting to accelerate faster, and that's what you're seeing and why precious metals continue to rally They're moving into a break, but give me a call now, eight of it, and you guys are

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[SPEAKER_07]: Yeah, it's Mark Holmes from San Diego.

[SPEAKER_07]: It's about the back of companies.

[SPEAKER_07]: I have felt more as a big mo tourer and British tobacco.

[SPEAKER_07]: And of course, there's showing some profit right now.

[SPEAKER_07]: I think they're over a bot, wondering if it's time to trim or sell.

[SPEAKER_07]: They're not a large part of my portfolio, but I figure it now is maybe the time.

[SPEAKER_07]: So your thoughts, thank you.

[SPEAKER_07]: Listen on the air.

[SPEAKER_02]: Well, we own Philip Morris for our clients and have for some time audit in the 1970s, something like that.

[SPEAKER_02]: And it's now $164.89, since a big reason for the recent move since the middle of last year, when it was trading in the 90s, is the growth of Zinn for Philip Morris that is the smokeless tobacco products that are at the higher adoption rates.

[SPEAKER_02]: Now, I believe Philip Morris, sorry, all tricks, excuse me, has a similar type of product and all the kids catching on as fast and you can see that with its revenue growth.

[SPEAKER_02]: It's still down 2% year of year.

[SPEAKER_02]: And that's why it's trading at a more modest multiple, because it's just, it's earnings are growing, but it's only growing because it's buying back shares.

[SPEAKER_02]: It's not growing because they are growing the top line, right?

[SPEAKER_02]: It's just a game of, hey, we're not losing too much sales, we're still producing about $8.7 billion in free cash flow.

[SPEAKER_02]: There is minimal debt so they can take most, if not all that cash that's left over after paying

[SPEAKER_02]: 5% dividend yield and 5x shares and they're able to manufacture higher earnings per share because of that.

[SPEAKER_02]: And their operating margins remain right around 60% which is

[SPEAKER_02]: at or bit higher than they've been for a long, long time.

[SPEAKER_02]: So they're strong operator with strong margins, just not a ton of growth.

[SPEAKER_02]: Whereas you look at Phil Amores, I'm a member, Altria is domestic cigarettes.

[SPEAKER_02]: And there's not a lot of, most people that smoke are,

[SPEAKER_02]: are either passing away from disease or just getting older.

[SPEAKER_02]: And there's not a lot of new smokers that are coming on.

[SPEAKER_02]: And so that's why you see a 2% decline through percent decline in revenue, kind of consistently with Altria as a business.

[SPEAKER_02]: Whereas Philip Morris, they're international only at least on the cigarette side.

[SPEAKER_02]: They do have the Zinn, which is domestic.

[SPEAKER_02]: But

[SPEAKER_02]: they're the cigarettes are in national and that's what you have last quarter revenue growth up seven percent earnings growth 15 percent earnings growth for this year and 11 percent next year and the dividend yield is less but it's still solid three and a half percent so we rather own the name that continue to grow that's not just relying on buying back shares to grow their earnings for share now they are buying back shares but they're able to grow their

[SPEAKER_02]: overall profits and net income as well because of that international growth.

[SPEAKER_02]: So we like to feel more of us, but I have no problem, frankly, owning either.

[SPEAKER_02]: So I would just hold them to be honest with you.

[SPEAKER_06]: Hi there.

[SPEAKER_06]: I have a question about advanced micro device AMD.

[SPEAKER_06]: I have a very small position.

[SPEAKER_06]: So I think that's selling that in a electrical thoughts on that, thanks very much for playing.

[SPEAKER_02]: This is interesting, advanced micro devices.

[SPEAKER_02]: And this is a modest AI play.

[SPEAKER_02]: They do have growth because of AI, revenue growth loss quarter was 32%, but earnings were actually down 30% which is interesting.

[SPEAKER_02]: I remember they took a lot of share from Intel.

[SPEAKER_02]: And if Intel due to the investment from the US government, from the partnership with the video, is going to start to claw back some market share, it's going to be from AMD.

[SPEAKER_02]: So it kind of depends on your view.

[SPEAKER_02]: Do you think that this is a shift change within Intel?

[SPEAKER_02]: kind of think more likely it is than not.

[SPEAKER_02]: And so I would probably sell AMD because I don't think they're going to hold on to that nearly $6 and expected earnings next year from $3.85 this year, I shouldn't see that growth.

[SPEAKER_02]: So I would sell AMD mainly on the new uptick in optimism around Intel.

[SPEAKER_02]: Well, I'm Justin Klein, and that about doesn't.

[SPEAKER_02]: And if today's show made you think about your own financial finances in any way, your investments, your taxes, your retirement planning, that was our main focus point.

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