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

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

[SPEAKER_02]: Here is KPP Financial Chief Executive Officer,

[SPEAKER_01]: Good afternoon fellow investors and welcome back to invest stock.

[SPEAKER_01]: This is our Thursday, October 23rd, 2025 edition of the best stock appreciate you all tuning in for this hour and my goal here is to make the most of your time and help you become a better investor in any way I can and that's mainly driven by your calls.

[SPEAKER_01]: whatever it is, money related, investment related, finance related, I encourage you to let them fly.

[SPEAKER_01]: Let me know what is on your mind.

[SPEAKER_01]: I will bring you data and perspective about what's going on in the days market and where we're likely headed, but ultimately, I need to know where you're headed, where your mind is headed so that I can at least give you some some insights that will point you in the right direction.

[SPEAKER_01]: to find that right answer.

[SPEAKER_01]: And remember, when you call, you're not just helping yourself, you're helping others that are listening as well because like guarantee whatever's on your mind, someone else is thinking the exact same thing.

[SPEAKER_01]: So don't hesitate to reach out at 8.899 chart.

[SPEAKER_01]: Now, just to be able to talk about today's market performance and run down the show topics, but as usual, we'll tackle this call a question first.

[SPEAKER_07]: Hi, don't know from New York.

[SPEAKER_07]: Thank you for all that you do.

[SPEAKER_07]: I actually have a question about a 529 plan.

[SPEAKER_07]: I am preparing for the future single, but I already have one 529 plan available.

[SPEAKER_07]: I'm thinking about opening up another one because what I would like in my life is two kids, so I'm trying to think it advanced.

[SPEAKER_07]: But my question is, with this 529 plan that I already have, I see that I'm having very low growth about 4.4% year over year, and obviously compared to the stock market, the S&B 500 index seems like it's over like 10%.

[SPEAKER_07]: I might be suffering from phomo right now, so I will admit that.

[SPEAKER_07]: But in that individual 529 plan, it seems like it's mostly bonds that I have, and a little bit of a domestic and international stocks.

[SPEAKER_07]: If I want to have a second kid, I'm thinking about setting up a 529 plan for that kid.

[SPEAKER_07]: Should I just open up a regular brokerage account and then just invest in a Vanguard ETS rather than an individual 529 plan, because it doesn't seem like that much promise in growth?

[SPEAKER_07]: And then the last question is, okay, let's say I don't have it, it gets at all.

[SPEAKER_07]: What is another way to kind of use this money to?

[SPEAKER_07]: Because I know this is really for education-wise.

[SPEAKER_07]: So looking forward to some help and have a great day.

[SPEAKER_07]: Bye.

[SPEAKER_01]: Well, first off, you just may be in a bad 529 plan.

[SPEAKER_01]: There's 50 in the country.

[SPEAKER_01]: And you can move it from one state to another.

[SPEAKER_01]: And

[SPEAKER_01]: You first probably wanted to look at the options within your 529.

[SPEAKER_01]: So what it's in now doesn't mean that that's all you can invest in.

[SPEAKER_01]: I can almost guarantee that you have options that are just investing in the S&P or the broader market.

[SPEAKER_01]: So that's what you look at first.

[SPEAKER_01]: If that if you're looking to get Mark performance, well, I could almost guarantee you, you can get that.

[SPEAKER_01]: You just have to go

[SPEAKER_01]: and change the investments within your 529.

[SPEAKER_01]: I'm not saying that's the best option, but it sounds like that was what you are looking for.

[SPEAKER_01]: So I would start there and then maybe think about opening another 529.

[SPEAKER_01]: Now, if you don't have another kid, I don't think you want to do that.

[SPEAKER_01]: You want to bank on that, life changes the mysterious ways sometimes.

[SPEAKER_01]: So I would go about it that way.

[SPEAKER_01]: A GDP patient and change your investment allocation within your current five, 20 minutes of the call.

[SPEAKER_01]: Now, a lot of ground to cover over the next 45 minutes.

[SPEAKER_01]: Sorry, my focus point is the coding of the market for strategies to anticipate stock trends.

[SPEAKER_01]: What are some ways that you can maybe not see what's gonna happen next week or next month, but over the medium to long term.

[SPEAKER_01]: We'll look at,

[SPEAKER_01]: different ways to analyze the markets, different sectors, different companies, et cetera.

[SPEAKER_01]: In addition, we have other topics on the docket.

[SPEAKER_01]: I want to get to the American exceptionalism story about how over the past 15 years or so, the US markets have drastically outperformed foreign markets.

[SPEAKER_01]: Now, what is the source of that outperformance?

[SPEAKER_01]: strength of the dollar, valuation expansion, and then fundamental improvements, meaning earnings growth.

[SPEAKER_01]: So we'll look at all of these and figure out, what is the source of it and how much is repeatable?

[SPEAKER_01]: Now the good of sense, give us a sense of how much

[SPEAKER_01]: can the U.S. exceptionalism story be maintained over the next 10 to 15 years.

[SPEAKER_01]: Also, JP Morgan has come out and said that they're applying about 1.5 trillion dollars into the security industry.

[SPEAKER_01]: What I mean, that's securities, but economic security and resilience around things like rare earths, pharmaceutical precursors, robotics, et cetera.

[SPEAKER_01]: You know, they say, follow the money and we're going to try to follow the money there.

[SPEAKER_01]: And then lastly, if we have time, leveraged funds.

[SPEAKER_01]: These are very common in the average retail investor portfolio.

[SPEAKER_01]: But it's been a rough ride as of late and we'll talk about why that is.

[SPEAKER_01]: We also have voice bank calls, one is on Micron Technologies, and the other is on Croger KR, and of course we have some questions that came in to be the comment section of the Invest.

[SPEAKER_01]: YouTube channel as well.

[SPEAKER_01]: But of course I welcome your finance and investment questions right now, and I think it's safe to say several important, you'll be making several important investment decisions here in this fourth quarter, petting into 2026.

[SPEAKER_01]: Before you do I recommend that you look at our new Comprehensive 2025 Q4 Economic and Market Outlook report.

[SPEAKER_01]: It is a free read, and it's posted over on abestalk.com.

[SPEAKER_01]: Remember to do a break, but my phone lines are open for you at 8-899 chart.

[SPEAKER_03]: The prosperous future you envision for yourself and your family will not happen without strategic planning and definitive action.

[SPEAKER_01]: It's got a bright-end San Mateo looking at Roku.

[SPEAKER_03]: And I wanted you to take on the technical picture.

[SPEAKER_03]: For the unprepared investor, market volatility around the world demonstrates risk.

[SPEAKER_03]: but opportunities wait for no one and now maybe the best time in years to invest wisely to invest strategically.

[SPEAKER_03]: What I would do is keep saving and look for other opportunities.

[SPEAKER_03]: But how can you decide what sectors to avoid?

[SPEAKER_03]: Which stocks to buy and what might be the best price point?

[SPEAKER_03]: I'm new to investing in my friend Wesley recommend your podcast a year ago.

[SPEAKER_03]: The next decisive step on your path to financial freedom begins with a Spotify search for Invest Talk.

[SPEAKER_03]: Listen live or download the free podcast.

[SPEAKER_04]: Invest Talk, your questions are free.

[SPEAKER_04]: The answers are unbiased.

[SPEAKER_04]: Justin Klein is here now.

[SPEAKER_04]: 888-99 chart.

[SPEAKER_01]: Let's go take a quick look at the markets today.

[SPEAKER_01]: Overall, it was a nice bounce back day.

[SPEAKER_01]: And you had the NASDAQ up about almost 1%, 0.89% S&P of 58 basis points down about one third of one percent.

[SPEAKER_01]: Large cap growth definitely did the best.

[SPEAKER_01]: You look at the heat map for the markets.

[SPEAKER_01]: You had a nice,

[SPEAKER_01]: One percent rallying in video Google Tesla was up 2% after the sell off yesterday, which had growth out of micron, technologies, GE or coal pounds here, paleoed 10 core, etc.

[SPEAKER_01]: So some pretty nice moves, especially in tech mixed bag and finance and health care.

[SPEAKER_01]: oil did fairly well on the back of sanctions on Russia that looks to be benefit going to benefit oil prices at least in the near term.

[SPEAKER_01]: You had the industrial space, do well, also, and apply materials and land research, bounced back, and we're entering into Fed meeting on Wednesday, as well as the Trump and G meeting, which will be Thursday, I think it was supposed to be on Wednesday, but White House press secretary,

[SPEAKER_01]: Levitt confirmed that it will be on 30th in South Korea.

[SPEAKER_01]: So that is probably the source of most of the optimism around the markets overall and more hope that there will be some sort of a deal when it comes to tariffs.

[SPEAKER_01]: When it comes to the other assets, you had treasuries where a bit weaker yields were up about 45 basis points across the curve.

[SPEAKER_01]: The dollar was flat, gold finished up 2%.

[SPEAKER_01]: It's a little bounce back here on gold.

[SPEAKER_01]: Bitcoin futures up 2.6% and WTI career, like I said, a 5.6% above the $60 per barrel mark on those Russian sanctions.

[SPEAKER_01]: So that was the market today on October 23rd, 2025.

[SPEAKER_01]: Now let's tackle a YouTube question and a hern 351 says looking to get your take on pensky automotive, pensky automotive, P-A-G is the symbol and is it a long term hold currently sitting at 170 from what I can tell there's the consistent their consistent earner with a solid balance sheet and they're buying back shares earnings are forecasted to get you to grow although these forecasts seem to be revising down that's true.

[SPEAKER_01]: earnings this year so it'll be up 2% and then 1% next year, but those estimates have been coming down.

[SPEAKER_01]: That's true.

[SPEAKER_01]: Says does this business face some potential economic headwinds?

[SPEAKER_01]: What I'm better at missing would be a good entry point or do you think there are better opportunities elsewhere?

[SPEAKER_01]: Thanks so much.

[SPEAKER_01]: I'll listen in on the podcast.

[SPEAKER_01]: He, A, G, is the symbol, interesting here.

[SPEAKER_01]: Now, is A, as I said, it's a slow grower.

[SPEAKER_01]: One, the 2% earnings growth, not that gray, last quarter revenue growth was flat.

[SPEAKER_01]: This upcoming quarter or revenue growth supposed to be 2% earnings, flat, nice 3% dividend yield.

[SPEAKER_01]: What do they do?

[SPEAKER_01]: It's, is in the,

[SPEAKER_01]: It engaged in the distribution of commercial vehicle, diesel engines, gas engines, power systems, and related parts and services.

[SPEAKER_01]: So really, it's all about retail automotive, retail commercial trucking, et cetera.

[SPEAKER_01]: So it looks like an auto dealer for the most part.

[SPEAKER_01]: And that business has struggled.

[SPEAKER_01]: The good thing is they have some commercial.

[SPEAKER_01]: business and that's, I think, holding up the space overall.

[SPEAKER_01]: So it's definitely outperforming the car maxes of the world.

[SPEAKER_01]: Nice 18% return equity that is solid.

[SPEAKER_01]: Are they buying back shares?

[SPEAKER_01]: They are, but that has certainly slowed down as of the last year, year and a half.

[SPEAKER_01]: So I don't get excited about that.

[SPEAKER_01]: They do have a good amount of data in their balance sheet and that's probably a biggest issue here is that it's about $8.5 billion in it.

[SPEAKER_01]: Data in the $10 by the $11.1 billion market cap.

[SPEAKER_01]: Three cash flows, $656 million, but

[SPEAKER_01]: That's well off it's 2021.

[SPEAKER_01]: Hi, and I don't like the recent trend.

[SPEAKER_01]: It peaked back here in September around the 190 level.

[SPEAKER_01]: Now we're down to 165 down pretty decent today about two and a half percent and their debt continues to rise.

[SPEAKER_01]: You know, I just don't see it being a bargain with that slow growth.

[SPEAKER_01]: It's trading at the high end of its longer term.

[SPEAKER_01]: range of price of sales and a price value, EBITDA, price to free cash flow, all of these are kind of near the high end of the range.

[SPEAKER_01]: And then you add on the chart, which is now in a near-term downtrend, I just don't, I don't get excited about it.

[SPEAKER_01]: It's okay, but it's not amazing.

[SPEAKER_01]: It's not a

[SPEAKER_01]: It's not a clear cut winner.

[SPEAKER_01]: So it's a name I'll continue to watch, but I'd have to see some improvements in the overall trend of earnings estimates and right now it's negative.

[SPEAKER_01]: Now let's tackle another listener question now.

[SPEAKER_05]: Hi there, Luke and Justin.

[SPEAKER_05]: This is the Antimona Creek, and I had a question on Lycron technology incorporated, stop symbol MU.

[SPEAKER_05]: And I just wanted to get your thoughts on it.

[SPEAKER_05]: Thanks very much, Clay.

[SPEAKER_01]: Looking at micron, technologies, name that historically is all over the board when it comes to profitability, but it is going gangbusters right now.

[SPEAKER_01]: About $17,000 earnings expected this year, about 19 and change, next year, it's a $200 stock.

[SPEAKER_01]: So if we're looking earnings, we're gonna about 10 times.

[SPEAKER_01]: And this is a memory producer.

[SPEAKER_01]: And overall, I like the business, I like the trends,

[SPEAKER_01]: You know, think of AI in big data?

[SPEAKER_01]: Well, the demand for energy storage is just sky-high.

[SPEAKER_01]: Now, is that going to probably retrench in the next few years to a level where they're not going to be earning $19 per share?

[SPEAKER_01]: Probably.

[SPEAKER_01]: But the good news is they don't have any net debt on their balance sheet.

[SPEAKER_01]: And they have solid cash flows, return equity around 17%.

[SPEAKER_01]: They are not buying back shares that worries me a little bit, but I like the trends in the business, but it's a bit over-bought right now.

[SPEAKER_01]: So I think you missed this move.

[SPEAKER_01]: This we need to pull back to about the 130 level for me to get excited about it, which it means about a 30% drop from here.

[SPEAKER_01]: And that's where I'd be picking up my microphone.

[SPEAKER_01]: They're moving to a break, so the comment I focus point and decoding the market.

[SPEAKER_01]: The more answers to your question.

[SPEAKER_01]: So I encourage you to call it right now.

[SPEAKER_01]: On the best stock, at eight, eight, nine, nine chart.

[SPEAKER_04]: Have you heard about Invest Talk Innovators?

[SPEAKER_04]: It's available now free on the Invest Talk YouTube channel, Justin Klein and Luke Guerrero, Interview Company Leaders, Founders, and Visionaries.

[SPEAKER_04]: So head over to the Invest Talk YouTube channel and look for Invest Talk Innovators.

[SPEAKER_01]: I made a focus point on and best talk today is about four strategies to help predict or anticipate stock trends and I love this article because there's different ways to skin a cat as they say.

[SPEAKER_01]: And now we use pretty much all of these to some degree in our process for managing client portfolios.

[SPEAKER_01]: which means that you should probably understand the basics at least of how each one of them speak to the future trends in markets or companies or sectors.

[SPEAKER_01]: The first one is momentum.

[SPEAKER_01]: And put simply, it's about the tendency of any asset.

[SPEAKER_01]: It's priced to continue moving in the current direction that it's been training it over the past number of months.

[SPEAKER_01]: The old adages, the trend is your friend until the end, and then you have to be quick to move.

[SPEAKER_01]: How do you know what the market momentum is?

[SPEAKER_01]: Well, obviously, you can see that over the past, usually six months is a good guide.

[SPEAKER_01]: Years also pretty good.

[SPEAKER_01]: Three months is probably the minimum that you want to look at.

[SPEAKER_01]: And you usually want to look at it and compare it to the product market and even most importantly, to the sector.

[SPEAKER_01]: If, for example, gold's been doing well, gold miners, almost all of them are doing really well.

[SPEAKER_01]: But, and almost all of them are probably going to beat the market for the year.

[SPEAKER_01]: But does that mean you just buy any gold miner?

[SPEAKER_01]: No, you want to buy the one that is doing as good, if not better than the broader sector.

[SPEAKER_01]: So identifying the momentum and the trends and overlaying that with other factors, I think is an under-appreciated tool.

[SPEAKER_01]: Something that we utilize consistently when we're looking at our positions.

[SPEAKER_01]: Then we're buying for clients or continue to hold.

[SPEAKER_01]: If they're lagging, try to figure out why and maybe that needs to be switched out.

[SPEAKER_01]: And there's fundamental analysis.

[SPEAKER_01]: And that is typical value investing, something that we talked about on the show, we're looking at earnings, and profitability, and balance sheets, things like that.

[SPEAKER_01]: And that is the basis of valueing a company.

[SPEAKER_01]: And once again, that's a big part of our analysis, but also broader macro factors.

[SPEAKER_01]: So it's happening with GDP growth, interest rates,

[SPEAKER_01]: Inflation, all of these are part of that overall fundamental analysis of the economy.

[SPEAKER_01]: And so based on those factors, certain sectors will be doing better.

[SPEAKER_01]: For example, if the economy is accelerating well, consumer cyclicals and industrials tend to do well.

[SPEAKER_01]: If the economy is rolling over, well, utilities and health care stocks tend to outperform.

[SPEAKER_01]: Then there's technical analysis, so this is kind of like momentum, but it's more about price pattern in time.

[SPEAKER_01]: So consolidation patterns, getting ready to build momentum for a breakout, for example, support and resistance levels based on moving averages, bribonacci, et cetera, relative

[SPEAKER_01]: Bulinger bands, these are all parts of technical analysis once again, another tool in our tool kit, and you shouldn't know the basics.

[SPEAKER_01]: Then there's mean reversion, I think this is underappreciated.

[SPEAKER_01]: But it's a theory that basically says asset prices.

[SPEAKER_01]: Return to their means, it's kind of like a pendulum.

[SPEAKER_01]: And in any given time, any enterprise or a or a sector as a class or company is usually swinging from one side of the pendulum to the other.

[SPEAKER_01]: It's sitting, it's not right in the middle, not rightly, right exactly at fair value.

[SPEAKER_01]: It's one side of the other.

[SPEAKER_01]: And over time, it will mean reverts.

[SPEAKER_01]: So go back to momentum.

[SPEAKER_01]: Usually, momentum is really strong.

[SPEAKER_01]: It might be overvalued.

[SPEAKER_01]: It might be on the other side of that pendulum.

[SPEAKER_01]: But it might have further to go before it ultimately turns, creates a downturn, and mean reverts.

[SPEAKER_01]: And so if you understand that mean reversion will happen, you will be more apt to maybe trim positions when valuations get rich.

[SPEAKER_01]: And then sentiment, I really like this as well.

[SPEAKER_01]: It's really about psychology.

[SPEAKER_01]: Now, this is a more difficult thing to really put a thumb on.

[SPEAKER_01]: Who things like the AI, AI, AI, investor sentiment survey, volatility index, but call ratio, field, field, field, field, grid index.

[SPEAKER_01]: All of them have, you know, middleing value in the analysis.

[SPEAKER_01]: I think it's more about the,

[SPEAKER_01]: leverage within the system, the allocation to equities, for example, compared to pulling that worth, those are to me better sentiment indicators, I think these other things can be very short term and don't really give you a good sense of broad position.

[SPEAKER_01]: And so I like to look at sentiment as well, but that can be harder to nail down.

[SPEAKER_01]: I'm the next investor, we'll look into this question.

[SPEAKER_01]: Is a security-based line of credit right for you?

[SPEAKER_01]: That's story tomorrow, but for now I'm Justin Klein.

[SPEAKER_04]: I'm ready to take your calls at 8.98 in any man's chart.

[SPEAKER_00]: Hi, this is Zach calling from Michigan.

[SPEAKER_00]: I was calling to get your opinion on Croger, ticker, KR.

[SPEAKER_00]: I've held this for quite some time now and it's in a long-term holding part of my portfolio.

[SPEAKER_00]: Just seeing how you guys felt about it if I should cut it back or continue to add.

[SPEAKER_00]: Thank you so much.

[SPEAKER_00]: Thank you.

[SPEAKER_01]: All right, looking at Croger, KR is the symbol.

[SPEAKER_01]: And this is not an exciting name, but it's a consistent name.

[SPEAKER_01]: earnings back in 2019, we're $2.11 cents.

[SPEAKER_01]: And this year, we're supposed to earn $4.79.

[SPEAKER_01]: 5.25 next year, 2% dividend yield.

[SPEAKER_01]: And based on forward looking earnings, you're looking at a nice solid 15 multiple.

[SPEAKER_01]: Not bad to be honest with you.

[SPEAKER_01]: And we're sure in equities 26%,

[SPEAKER_01]: with a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a,

[SPEAKER_01]: And it's profitability solid.

[SPEAKER_01]: So it is an uptrend.

[SPEAKER_01]: Relates of strength is 50, but it's still in a long term uptrend.

[SPEAKER_01]: So I like it.

[SPEAKER_01]: I see no reason to sell it.

[SPEAKER_01]: Yeah, I would hold KR is the symbol.

[SPEAKER_01]: eight and ninety nine chart eight and ninety four two seven eight is how you get through an ask your question.

[SPEAKER_01]: On today's show.

[SPEAKER_01]: Let's go to another voice bank call at eight and eight ninety nine chart.

[SPEAKER_08]: I'm Justin this is James from Brooklyn, New York.

[SPEAKER_08]: I had a question about Adobe when I was wondering what you thought about the company and it's a good entry.

[SPEAKER_08]: Thank you for all you do.

[SPEAKER_08]: Have a great day.

[SPEAKER_01]: All right, looking at Adobe ADBE is the symbol.

[SPEAKER_01]: And I am going to give this one a thumbs up.

[SPEAKER_01]: This is a name that's, I've been eyeing as of late and it's starting to improve on a chart.

[SPEAKER_01]: It looks like it's ready to bottom head and I still don't move over the last week or so.

[SPEAKER_01]: It's been consolidating that this could be anticipation of earnings coming up

[SPEAKER_01]: You know, betting that this will will have a strong report earnings estimates are not that great.

[SPEAKER_01]: Only about 9% revenue growth in 12% earnings growth, which that's down from the year ago, and it was closer to the low teens in revenue growth in the high teens and earnings growth.

[SPEAKER_01]: So you're seeing a slow down in growth of the business, but it's still growing.

[SPEAKER_01]: The other worry here is about AI and that

[SPEAKER_01]: AI tools and AI algorithms are going to you serve the Adobe tools and algorithms that have been built up for for so long and you and in relied on by the graphics arts industry and video production industry etc.

[SPEAKER_01]: I think it's a bit overblown.

[SPEAKER_01]: I think, especially that area of AI has a lot of work to do because it's not perfect.

[SPEAKER_01]: It may go a long way and get you most of the way, which is still going to need an Adobe Photoshop, for example, to refine it and fix it up a little bit more.

[SPEAKER_01]: And so I think it's a bit overblown when it comes to AI, the risk of AI,

[SPEAKER_01]: You're looking at forward enterprise value either on 12 and a half, which is pretty much the lowest it's been over the last decade.

[SPEAKER_01]: So this is really going to be made or broken by the advancements in AI and that's your back here.

[SPEAKER_01]: I'll bet that

[SPEAKER_01]: an advancements, especially in the creative space that Adobe is in, takes a bit longer than the market's pricing it.

[SPEAKER_01]: So I'm giving Adobe ADBE, a thumbs up.

[SPEAKER_01]: So guys, talk to Bill in Northern California looking at Rivian.

[SPEAKER_06]: Hey, Joe, I just wanted to come and I, I usually

[SPEAKER_06]: ones that I'm curious about, and yeah, you know, different things, this is a stock that I have interesting for a long time.

[SPEAKER_06]: Not so much as a stock, but just the company, because I really like their vehicles, their product, what they're doing, the potential and the long run.

[SPEAKER_06]: And I realize that, you know, even if they have a good product, there's a difference between that and making

[SPEAKER_06]: I see them in the same kind of light that I saw past light in the, you know, 2010 era when they were ramping up and I saw the potential there as being so much and I, I didn't buy in at that time because the price went above to that my strike price and I thought I'll wait for a pullback and then they just went up and up after that so I just like stayed away from it and I have traded it since then and made some money.

[SPEAKER_06]: but don't hold that.

[SPEAKER_06]: And I've never held Rivian.

[SPEAKER_06]: But I look at it as like, I just really like what they do.

[SPEAKER_06]: I like to space the growing electric thing.

[SPEAKER_06]: I realize this is highly speculative.

[SPEAKER_06]: And I would just, I small position or long-term future potential, not recommending it as any kind of secure.

[SPEAKER_06]: very well my portfolios and good shape all time high so this is just something you just put in there and wait and see what happens but given all that how do you look at that from there you know the bottom line and um have their losses improved over the last few years

[SPEAKER_06]: you have all the good charts so.

[SPEAKER_06]: Yeah.

[SPEAKER_01]: Well, I would say my echo your sentiment around vehicles and I think a lot of them are really nice.

[SPEAKER_01]: Some neighbors that drive Rivians.

[SPEAKER_01]: We, I don't know if you know, but Rivian is located or headquarters in Irvine, California, which is actually where.

[SPEAKER_01]: our company keep be financial.

[SPEAKER_01]: That's what we're located as well.

[SPEAKER_01]: And I live in the going to beach and the theater downtown was actually, it was an old movie theater.

[SPEAKER_01]: And I was actually renovated by Rivian and now it's the Rivian theater.

[SPEAKER_01]: So I'm somewhat familiar with the brand and the company, although I'm not sure if I know anyone that actually works for Rivian.

[SPEAKER_01]: But so I like the brand.

[SPEAKER_01]: I like the companies.

[SPEAKER_01]: I think the big difference here, though, is there's no Elon.

[SPEAKER_01]: And when I say that, not because I think Elon has some magic potion from a product perspective, but he does from a marketing perspective.

[SPEAKER_01]: And Elon has a lot of coal followers.

[SPEAKER_01]: And

[SPEAKER_01]: You know, he can do no wrong in their eyes that he is a visionary and somebody who is going to be part of that revolution, whatever that is.

[SPEAKER_01]: And so, you know, Revean doesn't really have that.

[SPEAKER_01]: They have a cool brand.

[SPEAKER_01]: They have cool cars, but

[SPEAKER_01]: I don't really see that same type of explosion in the stock price.

[SPEAKER_01]: The reason Tesla's stock price is as high as it is is because of a, a, a, called following in that, that I want to just, that they just want to own Tesla and they want to piece of, of Elon.

[SPEAKER_01]: And then there's some trudeness, I will say, from a, how do I say it?

[SPEAKER_01]: From a,

[SPEAKER_01]: an earnings perspective that has made Tesla's earnings a lot roseier than reality.

[SPEAKER_01]: So that's kind of separate.

[SPEAKER_01]: And I don't think Rivian has all of that.

[SPEAKER_01]: And their business is poor.

[SPEAKER_01]: It's been improving.

[SPEAKER_01]: You're right, Brother.

[SPEAKER_01]: Pretty cash flows gone from negative 6.8 billion in the summer of 2023 to negative 1.22 billion

[SPEAKER_01]: Still very negative, sure as outstanding, continue to go up.

[SPEAKER_01]: They have a good balance sheet.

[SPEAKER_01]: because they have very little debt, but it's because they're seeing more and more shares.

[SPEAKER_01]: It looks like they have enough chairs to kind of get through the next maybe years so of cash burn, but beyond that, they're gonna have to issue more shares.

[SPEAKER_01]: So, and then the chart is just going sideways and likely to probably break lower.

[SPEAKER_01]: So, I see no reason to invest in it.

[SPEAKER_01]: It's simply just too speculative and I'm gonna pass on Rivian.

[SPEAKER_06]: Thanks for that.

[SPEAKER_01]: Thanks for the call.

[SPEAKER_01]: 8.899 chart.

[SPEAKER_01]: 8.899, 2, 4, 2, 7.

[SPEAKER_01]: It's how you get through and ask your question on today's show.

[SPEAKER_01]: Now, let's talk a little about American exceptionalism and the fact that investors are currently paying a significantly higher multiple for US large caps stocks than they do, pretty much anywhere in the world.

[SPEAKER_01]: Now, better fundamental performance from the mega-cap

[SPEAKER_01]: But if you look at the rest of the S&P, it's been relatively unimpressive when it comes to fundamental growth in the quality of their business.

[SPEAKER_01]: And this is led to people being very overweight U.S. stocks, whether you live in America or either abroad.

[SPEAKER_01]: Over the past 15 years,

[SPEAKER_01]: The S&P is outpaced the rest of the developed market by a cumulative 150%.

[SPEAKER_01]: Another question is, is that justified?

[SPEAKER_01]: And what is the source of that?

[SPEAKER_01]: So there are three components to this.

[SPEAKER_01]: Number one is the dollar.

[SPEAKER_01]: The dollar has rallied.

[SPEAKER_01]: And so comparatively, that's been a tailwind to the performance of dollar-denominated assets.

[SPEAKER_01]: Because the dollar's gone up.

[SPEAKER_01]: Then there's relative valuation expansion, which really picked up steam in 2015.

[SPEAKER_01]: And then there's fundamental art performance.

[SPEAKER_01]: If dividends, spybacks, as well as the fundamental growth, meaning the growth of overall earnings and margins.

[SPEAKER_01]: But 80% of the art performance,

[SPEAKER_01]: sources that are not likely to be repeated, and that is the dollar, strength, and valuation expansion.

[SPEAKER_01]: So let's talk about the dollar strength first.

[SPEAKER_01]: You see with our debt situation, as well as the rising strength of other countries, especially China.

[SPEAKER_01]: The odds that the dollar will repeat this is fairly unlikely.

[SPEAKER_01]: from our connection to the rest of the world and our allies.

[SPEAKER_01]: And so, more and more investors will be looking abroad and are looking abroad and you can see that with performance of equities over the past.

[SPEAKER_01]: Since being here, foreign equities are drastically outperforming domestic equities.

[SPEAKER_01]: And the dollar is expensive.

[SPEAKER_01]: And then there's valuation.

[SPEAKER_01]: Valuations are somewhere between the 90th percentile, simply on P ratios and closer to all time highs, when looking at the opportunity cost of investing in things like treasuries.

[SPEAKER_01]: So that valuation expansion part, is saying you're bumping up against the roof here.

[SPEAKER_01]: Now, can stay that way for an extended period of time.

[SPEAKER_01]: And obviously it has for the last couple of years.

[SPEAKER_01]: But understand that that's not where that source of outperformance is going to come from.

[SPEAKER_01]: So it's really just that last pillar.

[SPEAKER_01]: Fundamental returns, meaning earnings growth.

[SPEAKER_01]: And then plowing those earnings back into share piebacks as well as dividends and not misallocating that capital.

[SPEAKER_01]: So that US business growth compared to international competitors has to continue.

[SPEAKER_01]: Now certainly can for a few reasons.

[SPEAKER_01]: Number one is the US has lower regulatory burden.

[SPEAKER_01]: Weaker anti-trust policies that allows these businesses to maintain higher margins and you're seeing margins near an all-time high.

[SPEAKER_01]: And we have the world's best and brightest think of our universities.

[SPEAKER_01]: And so there are a lot of tailwinds to American business

[SPEAKER_01]: I think remain in place, even though many of them have been weakened to some degree.

[SPEAKER_01]: But then there are potential headlines as well, that are a reason.

[SPEAKER_01]: We know the tariffs are one.

[SPEAKER_01]: Those obvious one, that could be brought back from both the executive standpoint, right Trump pulling back some of those tariffs, or from a legal standpoint,

[SPEAKER_01]: Let's still a bit up in the air, but certainly it's likely more of a headwind than a tailwind.

[SPEAKER_01]: But there's a negative labor supply shock, not only from a demographic perspective, but now with immigration falling and deportations rising, you're going to have a lower supply of labor.

[SPEAKER_01]: And then greater policy uncertainty, it makes it more difficult for long-term corporate investment decisions in the right allocation of capital.

[SPEAKER_01]: So for all of these reasons, this is why having more and more foreign market exposure, especially these valuations and with the most recent headwinds to domestic businesses, kind of makes more sense.

[SPEAKER_01]: Most of the best that I'm just inclined, we're heading into our final break.

[SPEAKER_01]: So I'm ready for your questions now at 8-899 chart.

[SPEAKER_04]: Every investor is working to build a secure financial future.

[SPEAKER_04]: The more you learn about how the market works, the better your chances for success.

[SPEAKER_04]: In Vestark, 888-99 chart.

[SPEAKER_01]: Now last week, we had the start of earnings season, and usually one of the first companies to report

[SPEAKER_01]: And what was interesting was not just about the earnings report, which was fine.

[SPEAKER_01]: But about what their CEO, Jamie Diamond, said about where they're going to allocate capital.

[SPEAKER_01]: What they said was they will funnel about $1.5 trillion in the industries that bolster US economic security and resilience over the next 10 years.

[SPEAKER_01]: No, what this means is they're ramping up the amount of capital resources and personnel dedicated to things like rareth minerals, pharmaceutical precursors, robotics, developing defense aerospace and energy technologies, great resilience, battery storage, drones, etc.

[SPEAKER_01]: Things that help with economic and physical security of the country.

[SPEAKER_01]: Does this make sense?

[SPEAKER_01]: Because, shaping more than it's a, the largest US Bank.

[SPEAKER_01]: And if the US succeeds, well, they're going to succeed.

[SPEAKER_01]: So it's in their interest for the United States to succeed.

[SPEAKER_01]: Yes, they're a global brand, a global business.

[SPEAKER_01]: But most of all, they're a US business.

[SPEAKER_01]: So this really goes back to,

[SPEAKER_01]: If the president, current president, future president, succeed or not, they're doing their job or he's doing his job to give them advice and allocate capital towards the right areas that in their minds will benefit the United States long term.

[SPEAKER_01]: Because 78% of the revenue still comes from the United States.

[SPEAKER_01]: Now, Diamond said,

[SPEAKER_01]: In a statement on Monday, he said that, quote, it has become painfully clear that the United States has allowed itself to become to rely on unreliable sources of critical minerals, products, and manufacturing, all of which are essential for our national security.

[SPEAKER_01]: We need to act now and quote.

[SPEAKER_01]: Now, he wrote something similar back in May, specifically calling out China.

[SPEAKER_01]: And in 2023, he wrote that the US supply chains were critical products and materials quote, must be domestic or only open to completely friendly allies or partners and quote.

[SPEAKER_01]: So this isn't just a new stance.

[SPEAKER_01]: This is something he's had for a number of years now.

[SPEAKER_01]: Now, how are they going to do this?

[SPEAKER_01]: No, it's a bank.

[SPEAKER_01]: So you think, well, it's in, yes, that's going to be part of what they do.

[SPEAKER_01]: in certain companies.

[SPEAKER_01]: But more specifically, handling stock and bond sales, so focusing on IPOs to raise capital for these type of ventures, and arranging even third party financing.

[SPEAKER_01]: So the 1.5 trillion target will include funding that the firm specifically facilitates.

[SPEAKER_01]: So it's going to not just the loans that they're making, but raising capital in many forms.

[SPEAKER_01]: They said, he said, quote, we are going to take our resources of research bankers and investors and we're going to scour the United States and maybe the world for new opportunities.

[SPEAKER_01]: And so, as they say, follow the money and they are specifically going to facilitate being the largest bank in the United States, facilitate the raising of capital for these types of businesses.

[SPEAKER_01]: So when you're looking at investing, understand that we are in this new world, only one

[SPEAKER_01]: geopolitical uncertainty is rising, but one where companies, the size and heft of Jake Morgan, are specifically out there helping support the competitiveness of the United States and the industries that are critical to our success.

[SPEAKER_01]: So that was a very interesting takeaway.

[SPEAKER_01]: from overall of fairly benign report from most of the big banks.

[SPEAKER_01]: But it just speaks to how important in today's world.

[SPEAKER_01]: It's not just about that fundamental bottom up analysis, but it's that macro economic analysis and the political analysis that goes into today's decision-making process.

[SPEAKER_01]: Now I'm just inclined if today's made show me do you think it could put your own financial future in any way, encourage you to do.

[SPEAKER_01]: Head over to InvestalkDog.com, click on the portfolio review button and schedule a portfolio review with myself or Luke.

[SPEAKER_01]: Are we thinking of listening to encourage you to tell your friends and family about a free podcast down those which can help?

[SPEAKER_01]: Would you even find any time that iTunes or Spotify and check out our YouTube videos as well?

[SPEAKER_01]: Independent thinking should success.

[SPEAKER_01]: It's Investalk, good night.

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