[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 30th, 2025 edition and yeah, that means we're going to have one more trading day in the month of October then and I want to see it once you get past.

[SPEAKER_01]: Halloween.

[SPEAKER_01]: It's kind of holiday season, right?

[SPEAKER_01]: So we're pretty much there.

[SPEAKER_01]: And that means 2026 will be fast approaching.

[SPEAKER_01]: So this hour is dedicated to you and preparing you for the final stretch of the year and next year and beyond helping to become a better investor by bringing you data and perspective.

[SPEAKER_01]: developed over 25 years of investment experience on that almost version 30 now crazy for 30 years.

[SPEAKER_01]: So I'm Justin Klein and this is my mission today to help make the most of this hour and give you some lessons that you can take home to your own first situation and make better decisions with your money.

[SPEAKER_01]: Now, it just we'll talk about today's Mark performance and run down this with topics, but first let's tackle

[SPEAKER_04]: Hi, I was listening to your podcast yesterday, and I was listening to Justin's comments on general mills in the food package companies in general, and I was just wondering if Campbell

[SPEAKER_04]: be is in the same situation as General Mills.

[SPEAKER_04]: Thanks a lot guys.

[SPEAKER_01]: Alright, looking at Campbell's soup and if you didn't listen to the show for everyone else out there, uh, somebody called about General Mills and I said, I'm seeing this consistently throughout the market is these package food companies.

[SPEAKER_01]: off the top of the head, I'm thinking of General Mills Heinz and Campbell's is in this category.

[SPEAKER_01]: And these are companies that have brands that everybody knows, but guess what, the demand for their products is winning because the younger generation not only is it a smaller cohort, right, think of all the boomers that know these brands very well and that's the outside of

[SPEAKER_01]: the Lionel generation that's the largest cohort and a lot of those people are passing away and there's not a lot of younger people to fill the void that knows these brands that likes these brands and frankly even the millennial generation they're pivoting to more organic brands and brands that you know their parents and grandparents didn't didn't consume.

[SPEAKER_01]: Now that doesn't mean that those brands are going the way tomorrow but it's just that their

[SPEAKER_01]: a slow decline.

[SPEAKER_01]: And in many ways, they are a value trap.

[SPEAKER_01]: And yeah, profits aren't really going down dramatically, but they're certainly not keeping up with inflation.

[SPEAKER_01]: It's actually negative for you to think that as inflation goes up, profits should go up.

[SPEAKER_01]: and I'll give you a good example, Campbell Soup, net income, total net income.

[SPEAKER_01]: This doesn't have to do with how many was there dividend rate or how many shares that standing or whatever.

[SPEAKER_01]: It's how much profits are, is there business actually producing?

[SPEAKER_01]: So in 2007, April, you had $854 million in net income.

[SPEAKER_01]: That you're talking nearly 20 years ago now.

[UNKNOWN]: Okay.

[SPEAKER_01]: And currently, the trailing 12 month profit is 600 million.

[SPEAKER_01]: So think of all the inflation of the last 18 years.

[SPEAKER_01]: And this has negative net income growth.

[SPEAKER_01]: It's been on a steady decline.

[SPEAKER_01]: And that is the problem.

[SPEAKER_01]: And when you look at the dividends, 5% dividend yield, everyone say, Oh, it's 5% dividend yield.

[SPEAKER_01]: Getting 5% it's candles.

[SPEAKER_01]: It's not going anywhere.

[SPEAKER_01]: Well, guess what?

[SPEAKER_01]: it can go somewhere, it can go bankrupt because they have a sizable level of debt.

[SPEAKER_01]: And a decent tell of this is that they were buying back shares consistently.

[SPEAKER_01]: And in the middle of 2023, they stopped.

[SPEAKER_01]: So for over two years now, they haven't been buying back shares.

[SPEAKER_01]: They've just been paying out that dividend.

[SPEAKER_01]: And they have, the free cash flow is dropped from,

[SPEAKER_01]: 1.15 billion in 2016 to now 715 million.

[SPEAKER_01]: So it's not like it's still producing profits, it's producing cash flow, but it's just a slow bleed.

[SPEAKER_01]: And that is the problem.

[SPEAKER_01]: And there need to take that cash flow, it's not gonna go to you to shareholders, it's gonna go to debt holders to maintain the debt or try to pay down the debt, but it's not really doing that either.

[SPEAKER_01]: And that's why the stock is in a steady decline.

[SPEAKER_01]: And once again, this is across the packaged food industry.

[SPEAKER_01]: These legacy businesses, they're just dying.

[SPEAKER_01]: A very slow death, but it's, they're dying.

[SPEAKER_01]: Eventually, probably get bought out by, you know, maybe they roll up into, you know, big, gommer it and they try to take on the debtor or deal with the debt.

[SPEAKER_01]: It's just not a business that you want to be allocating capital towards.

[SPEAKER_01]: So yes, Campbell Soup Soup is in this realm, along with general mills, along with crafttimes, and frankly a lot of these packaged food names.

[SPEAKER_01]: Thanks for the call.

[SPEAKER_01]: 899 chart, 89924278, it's how you get through and ask your question on today's show.

[SPEAKER_01]: Now we've a lot of ground to cover over the next 45 minutes and I mean focus point concerns this topic.

[SPEAKER_01]: Babies capitalism and demographic crossroads and speaking to this, which are one of our main focus points about falling birth rates.

[SPEAKER_01]: and how this is intertwined with the economic systems and normal assumptions about how economy is work.

[SPEAKER_01]: So we'll dig into that story.

[SPEAKER_01]: We also have other topics on the docket.

[SPEAKER_01]: One is in regards to how

[SPEAKER_01]: AI might replace junior bankers, junior bankers, and this can be, this is a micro lesson to the broader economy and how junior workers in general across various verticals are just being replaced with AI.

[SPEAKER_01]: So we'll look at that story.

[SPEAKER_01]: And then if we have time,

[SPEAKER_01]: will dig into the actual data on that.

[SPEAKER_01]: I think this is a big story that we really need to flesh out.

[SPEAKER_01]: Most of voice bank calls on Alexandria real estate and then gold in your reading sector.

[SPEAKER_01]: And of course, we have questions that came in to be the comment section over on the imbest.utube channel as well.

[SPEAKER_01]: Another thing that's probably safe to say that you will be making several very important decisions as we head into the holiday season.

[SPEAKER_01]: But before you do recommend that you

[SPEAKER_01]: Take a look at our brand new comprehensive 2025 Q4 economic and market outlook report.

[SPEAKER_01]: It is free and is posted right now.

[SPEAKER_01]: Over at bestdoc.com so head over there and download it.

[SPEAKER_01]: We're moving to a break but my phone lines are open waiting for you at 8.899 chart.

[SPEAKER_03]: Serious investors are certain to have finance and investment questions.

[SPEAKER_03]: What do you think is a good price?

[SPEAKER_03]: And the best person to ask your question in the right way is you.

[SPEAKER_01]: I was wondering from your standpoint, if they're at downside in buying fractional shares or is this whole shares?

[SPEAKER_03]: and 24-7 rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

[SPEAKER_01]: But technically, right now, I like it, I like the momentum, but what's going to don't like those fundamentals?

[SPEAKER_01]: Now, while gold is hitting these record highs, it's driven by these safe haven demand by central bank buying across the board.

[SPEAKER_03]: Your participation makes an invest talk better.

[SPEAKER_05]: Colin asked about core in Maine.

[SPEAKER_05]: This is Josh in North Carolina.

[SPEAKER_01]: This is Marlow from George City area.

[SPEAKER_03]: Let's take a live call, Sam from San Jose.

[SPEAKER_03]: So don't forget to call Invest talk.

[SPEAKER_03]: Great advice.

[SPEAKER_03]: Thank you.

[SPEAKER_03]: 888-99 chart.

[SPEAKER_03]: The Best Dark phone lines never closed, and now Justin Klein is here taking your calls live.

[SPEAKER_03]: In Best Talk, 888-99 chart.

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

[SPEAKER_01]: It was a decidedly negative day, and it was on the back of some big,

[SPEAKER_01]: earnings announcements from the Mac 7.

[SPEAKER_01]: You had Nvidia down at 2% on the day, Microsoft down to three that had earnings.

[SPEAKER_01]: Meta was down 11, then also had earnings.

[SPEAKER_01]: And you had Google up about 2.5% but that faded throughout the day.

[SPEAKER_01]: It was up much more after I was yesterday and this morning, but definitely had a nice fade throughout the day.

[SPEAKER_01]: Now, you had other names taken on the chin, AMD down 3.5%

[SPEAKER_01]: you had Oracle down 6.6% Boeing down 6.3% Tesla down 4.6 Amazon down 3 now did bounce after hours, you had Amazon earnings after hours, a nice rally, Apple small rally after hours, then only about 2% bullish there.

[SPEAKER_01]: Certainly the healthcare sector was struggling a bit and industrials, but really this was a day that was driven by some of the names that were on an uptrend and definitely had some nice weakness, NASDAQ down over one and a half percent SMB down one percent.

[SPEAKER_01]: and the question is will we have a fall through tomorrow?

[SPEAKER_01]: You know what I think we haven't had is a real come-to-Jesus moment in regards to the Fed announcement yesterday.

[SPEAKER_01]: And the Fed

[SPEAKER_01]: Basically how to, sorry, a hawkish cut, meaning, yeah, they said we're going to cut 25 basis points, but Jerome House said, you know, the cut in December is not a foregone conclusion.

[SPEAKER_01]: You know, they're a bit flying blind with government shutdown and the now odds of a rate cut in December, it was a week ago, 91% that we'd be at 350 basis points, call it,

[SPEAKER_01]: My year end, which is right now, we're at 375 basis points at 3.75.

[SPEAKER_01]: Now that's down to about 74%.

[SPEAKER_01]: So not a huge move, but material, the dollar has strengthened.

[SPEAKER_01]: Institutes have gone up.

[SPEAKER_01]: So I said in my weekly or weekend commentary, if you go on a YouTube channel and watch my, what I said was, I think there's a lot of optimism priced in here in many instances.

[SPEAKER_01]: The negative bar to the government shutdown, that is usually to overblown, but at this point it's almost underappreciated, and the economic impact it could have.

[SPEAKER_01]: because no one's really talking about it.

[SPEAKER_01]: So that's number one.

[SPEAKER_01]: But then the market is very optimistic about a rate cut and a very diverse, fed going forward.

[SPEAKER_01]: But it's pretty clear now that, you know, at least between now and April, a drum pal has four more meetings before he is replaced.

[SPEAKER_01]: The obviously will be replaced at end of his term in May and then there's a meeting in June.

[SPEAKER_01]: So basically that April meeting will be his last

[SPEAKER_01]: Now the model outcome is between 1 and 2 cuts.

[SPEAKER_01]: Maybe 3, but most likely 1 or 2 cuts between now and April as opposed to you're talking a week ago, the model outcome was more like 3 or 4 cuts.

[SPEAKER_01]: OK, and that is the issue here is a more hawkish fat.

[SPEAKER_01]: And then you have the earnings announcements.

[SPEAKER_01]: It's been a bit of a mix bag, like I said, meta-down, Google faded, Microsoft down.

[SPEAKER_01]: And those are the mag seven names that are the most important to the market as a whole.

[SPEAKER_01]: So and we're over bot.

[SPEAKER_01]: So there's a lot of optimism around the trade war as well.

[SPEAKER_01]: We just have the trade war.

[SPEAKER_01]: announcement obviously it's going to be colored in this very optimistic tone which is kind of everything Trump does and you know he's good at kind of spinning it that way but it didn't really have any material

[SPEAKER_01]: changes.

[SPEAKER_01]: It was just kind of kicking the can down the road.

[SPEAKER_01]: There wasn't a broader trade deal.

[SPEAKER_01]: It was just pushing this off a little farther, which frankly creates more uncertainty.

[SPEAKER_01]: I know business owners and they just don't know really what to do because they don't have clarity on what.

[SPEAKER_01]: tariffs will be.

[SPEAKER_01]: And so I think overall you we are set up for a potential pullback in markets kind of into the Thanksgiving holiday.

[SPEAKER_01]: So that's kind of what that's my base case, at least based on where we enter the week.

[SPEAKER_01]: But we'll see what kind of follow through we get on this negative day to day.

[SPEAKER_01]: You had other names, let's take a look here.

[SPEAKER_01]: You had treasuries, were a bit weaker.

[SPEAKER_01]: Once again, yields up again, 1 to 4 basis points across the curve.

[SPEAKER_01]: Dollar Knicks is up 0.3% after a 0.6% gain yesterday.

[SPEAKER_01]: It doesn't sound like a lot, but a 1% moving in dollar in one day is sizable move.

[SPEAKER_01]: Gold finished up, sorry, in two days.

[SPEAKER_01]: Gold finished up 0.4% on the day, despite the stronger dollars of gold remains very, very strong.

[SPEAKER_01]: Bitcoin down 3.3%.

[SPEAKER_01]: background 107K.

[SPEAKER_01]: So this is another kind of leading indicator.

[SPEAKER_01]: The fact that Bitcoin can't get up off the mat.

[SPEAKER_01]: And if this breaks 100,000, I think that could spell a larger pullback for tech in general.

[SPEAKER_01]: Debbie Tech crew, that was up 0.1% on the day.

[SPEAKER_01]: So that was the market for today, nicely in the red.

[SPEAKER_01]: There are moving into a break still to come.

[SPEAKER_01]: My focus point.

[SPEAKER_01]: and more answers to your questions.

[SPEAKER_01]: So, I encourage you to call right now on a best talk at it today.

[SPEAKER_01]: Now, you make sure.

[SPEAKER_02]: Justin Klein is here and ready to tackle your questions.

[SPEAKER_00]: Curious if you think it'd be better for me to let it go and spend money elsewhere.

[SPEAKER_01]: Well, first off, never take one man's opinion as gospel, including my own.

[SPEAKER_01]: Invest talk is ready 24-7.

[SPEAKER_02]: When you give a recommendation on your show for a buy-in, like an entry point to buy a stock, if I already own it, should I go ahead and be looking to sell it?

[SPEAKER_02]: Don't forget to call.

[SPEAKER_02]: Invest talk.

[SPEAKER_02]: 888-99 chart.

[SPEAKER_03]: Have you heard about Invest Talk Innovators?

[SPEAKER_03]: It's available now free on the Invest Talk YouTube channel, Justin Klein and Luke Guerrero, interview company leaders, founders, and visionaries.

[SPEAKER_03]: So head over to the Invest Talk YouTube channel and look for Invest Talk Innovators.

[SPEAKER_01]: Now our main focus point today is about babies capitalism and a demographic shift in crossroads that not just we are at here in the United States, but globally and you could argue very easily that is the bigger problem around the world, but it's still a problem here.

[SPEAKER_01]: And the problem is that increasingly women and families are having one or zero kids

[SPEAKER_01]: Most of this is driven by economics that people can't afford to have a family, a such opting out of it, and worldwide the number of children born for the average family has dropped by more than half since the 1970s, according to the UN, and it's leading to populations that are getting older and beginning to shrink in many of the world's largest economies,

[SPEAKER_01]: And this is going to cause many downstream ramifications.

[SPEAKER_01]: One is people will likely work longer because it, which won't have anybody to replace them.

[SPEAKER_01]: And so it will make more sense for companies to keep those people on.

[SPEAKER_01]: used to be paid, they wanted the older people to retire so that they could go pay the younger worker a lot lower wage in order to do that same job.

[SPEAKER_01]: But now there's just in many instances there's not that younger worker.

[SPEAKER_01]: So businesses are finding it harder to find good employees, it's destabiling things like elder care where you have a shift in the number of older people,

[SPEAKER_01]: and increasingly straining health insurance programs.

[SPEAKER_01]: Now women in 15 countries that account for 75% of global GDP.

[SPEAKER_01]: Think about that, 75% of global GDP in just 15 countries that includes the US are having two few children to maintain a stable population.

[SPEAKER_01]: Now what is that number?

[SPEAKER_01]: It's about 2.1 is what is needed to maintain a population without an immigration, without any immigration.

[SPEAKER_01]: Now for countries below the 1.4 births per woman, there's a much faster population decline.

[SPEAKER_01]: And they're right here in the United States, 1.6 births per woman in 2024, the lowest ever.

[SPEAKER_01]: Now in some countries, it's much worse.

[SPEAKER_01]: China, Japan, Italy, South Korea, deaths are already outpacing births.

[SPEAKER_01]: And so the counter to this is how do you solve this?

[SPEAKER_01]: Is eight number one, it's incentivized, more births.

[SPEAKER_01]: And we'll talk about that in a second or it's immigration.

[SPEAKER_01]: Now, here in the United States, it's been mainly immigration that's kind of plugged that hole for us.

[SPEAKER_01]: But now with the current administration and their policies, obviously, that's not really an option.

[SPEAKER_01]: So what should we do?

[SPEAKER_01]: what the effects are in the economy.

[SPEAKER_01]: Number one, worker shortages.

[SPEAKER_01]: This is part of the inflation picture that we're dealing with.

[SPEAKER_01]: You have an older generation that still has the vast majority of the wealth.

[SPEAKER_01]: It's still a large population.

[SPEAKER_01]: And they want services.

[SPEAKER_01]: Our economy is mostly services.

[SPEAKER_01]: 70 plus percent of our economy is services.

[SPEAKER_01]: Well, until the robots take over,

[SPEAKER_01]: Services are done by people for the most part, and there's a shrinking number of younger consumers because the numbers and the fact that they just don't have the money.

[SPEAKER_01]: And so growing number of older people are relying on pension systems like social security, there are others throughout the world, health care systems like Medicare and Medicaid.

[SPEAKER_01]: And it challenges the basic assumption of how capital is supposed to work, which is growth of GDP.

[SPEAKER_01]: Now, the global population, age 80, or older will triple between 2020 and 2050.

[SPEAKER_01]: This is according to the World Health Organization.

[SPEAKER_01]: You're seeing how rapidly the world is aging.

[SPEAKER_01]: Now, family started to shrink in the 1960s.

[SPEAKER_01]: When the average woman then had three to four children.

[SPEAKER_01]: And you know, my grandfather, grandmother,

[SPEAKER_01]: that was back in the 60s.

[SPEAKER_01]: Now, according to the US Census Bureau, the typical woman will have one or two children in her lifetime.

[SPEAKER_01]: And many opting for none.

[SPEAKER_01]: Now, the population is expected to be in shrinking later this century here in the US.

[SPEAKER_01]: Americans are significantly older.

[SPEAKER_01]: The median age has risen from 28.1 years in 1970 to record high last year of 39.1.

[SPEAKER_01]: and you're already seeing population declines in certain areas.

[SPEAKER_01]: So this will destabilize a lot of, and I think this is part of the reason goal to be going up and is a realization that without immigration our budget situation will only continue to spiral and will make it much worse because you don't have young co-workers paying into the system.

[SPEAKER_01]: So, very interesting topic, and it's definitely some trends that you have to keep an eye on for the next 10-15 years.

[SPEAKER_01]: Now, the next and best stock will look into this topic.

[SPEAKER_01]: The go, live your life, rule, rethinking, retirement, spending.

[SPEAKER_01]: We'll talk about tomorrow, but for now, give me a call at 8-8-99-sharp.

[SPEAKER_03]: Tell your friends they can listen live, download the free podcast, or watch Invest Talk on our YouTube channel.

[SPEAKER_03]: And they can leave their finance and investment questions anytime on 888-99 chart.

[SPEAKER_01]: Now before we move on, I do want to finish our main focus points and kind of talk about what the downstream impacts will depend on the region that you're speaking of, but China's definitely going to see the rule.

[SPEAKER_01]: The biggest impact, they're the second largest economy, but according to research, China's working-age population will crash by 2030 over the next 25 years, losing more than 211 million workers.

[SPEAKER_01]: That's roughly over half of our population, total population in the United States.

[SPEAKER_01]: So for them housing prices will certainly fall.

[SPEAKER_01]: And I think eventually that will happen here in the United States, we're housing demand will fall.

[SPEAKER_01]: And especially as the younger cohort, what a gender gen Alpha is they get into prime buying agent of that will probably be more like in the 20 years of now, but something to keep an eye on

[SPEAKER_01]: And the real way to counter this are incentive.

[SPEAKER_01]: The demonstration has proved temporary hot.

[SPEAKER_01]: Expansion of the Child Tax Credit and a thousand dollar investment account to babies born during the current term.

[SPEAKER_01]: So, you know, that may help pass programs to show them they don't really work those incentive programs, but ultimately this does have an impact on the end of man for companies like that that produce baby products, for example.

[SPEAKER_01]: formula, all of that.

[SPEAKER_01]: So keep an eye on this because and think of this in the back of your mind when you're looking at socially product companies and companies that rely on your workers that have older workers or older customers in the boomer generation etc.

[SPEAKER_01]: This has to be part of your process of thinking.

[SPEAKER_01]: Those keep things moving and play a fresh listener question from

[SPEAKER_07]: We can just go people's office here, calling about Alexandria Real Estate, Tickr-A-R-E, they have their earnings yesterday, and stock is around 20% of them.

[SPEAKER_07]: I'm only going to be revenue with, I think, missed on earnings from share and the best earnings brought them down a lot lower as well.

[SPEAKER_07]: What do you see, if you guys thought this would be a good time,

[SPEAKER_07]: So maybe you can sum up with interest rates, even in coming down a bit, think of the reef space that we get in plenty of coffee tips to pick some of it in that space.

[SPEAKER_07]: We love it, get your thoughts.

[SPEAKER_07]: Thank you.

[SPEAKER_01]: All right, looking at A, R, E, Alexandria real estate, I've talked about this in the recent past before, and it didn't like it for a couple of reasons.

[SPEAKER_01]: Everyone is profitability has always been pretty meager.

[SPEAKER_01]: And now it's negative, which are an equity is negative, which really bad.

[SPEAKER_01]: And now what do they do?

[SPEAKER_01]: It's a real estate investment trust.

[SPEAKER_01]: And the reason that people call it about it is because the yield 9.3% dividend yield.

[SPEAKER_01]: Okay.

[SPEAKER_01]: And if you've been listening for anything for the time, you should know that if something in the market is paying 9% or more, it is high risk.

[SPEAKER_01]: There's something wrong that could turn right and could be a good bet, but more often than not, it's a value trap, it's a dividend trap.

[SPEAKER_01]: Let me start calling it that.

[SPEAKER_01]: I think that's a good thing.

[SPEAKER_01]: I'm a dividend trap because so many people are caught in the dividend trap.

[SPEAKER_01]: They see this high dividend rate and they're chasing after it but they don't understand the underlying business that's actually supporting and paying that dividend.

[SPEAKER_01]: And if you do not understand that, you will get burned.

[SPEAKER_01]: And so a lot of people that owned Alexander, your real estate have been burned because of this.

[SPEAKER_01]: And now it's a REIT,

[SPEAKER_01]: in the life science, agricultural technology and technology space.

[SPEAKER_01]: So those are the tenants, and this is what I said, as well, back then, which is anything biotech related, I'm not a huge fan of, because higher cost of capital, now you have a with with RFK for better for worse, however, you want to view it.

[SPEAKER_01]: He's more critical on getting drugs approved, and

[SPEAKER_01]: that manifests in the quality of these tenets, their tenets, and their ability to monetize their research.

[SPEAKER_01]: And so this has been a downturn now well before the recent Trump administration is peaked in 2022.

[SPEAKER_01]: So that's just kind of icing on the cake.

[SPEAKER_01]: This has structural problems

[SPEAKER_01]: And so this peaked out well over $200 per share.

[SPEAKER_01]: Now, our $56 per share, and they have a ton of debt.

[SPEAKER_01]: And that's one of the issues too with REITs is not only, it is intended to have low profitability, but they also have a lot of debt.

[SPEAKER_01]: That's natural for a real estate, linked company, however, because they are passed through entity, they have limited ability to repair their balance sheet.

[SPEAKER_01]: through retaining capital and paying down debt.

[SPEAKER_01]: And so typically, they just pay out a big dividend, and eventually it's going to get cut.

[SPEAKER_01]: And that's what's happening here.

[SPEAKER_01]: This divin's been flat since the end of last year.

[SPEAKER_01]: This dividend almost guaranteed will be cut.

[SPEAKER_01]: Got to dig into the details, but I don't love the debt over nearly $20 billion

[SPEAKER_01]: on its balance sheet on the markup of the 9.7 billion.

[SPEAKER_01]: It's down and it's been in a downtrend for a very good reason.

[SPEAKER_01]: So this is your classic dividend trap.

[SPEAKER_01]: Thanks for calling.

[SPEAKER_01]: But you probably know that we get questions from the Invest Talk YouTube section, comment section.

[SPEAKER_01]: So let's talk.

[SPEAKER_01]: Let's go take one now.

[SPEAKER_01]: Uh, what him says, can you share your thoughts on Panasonic, P, at PC, R, H, Y, P, C, R, H, Y.

[SPEAKER_01]: Pull that up here.

[SPEAKER_01]: says it looks like a decent company with these and balance sheet, but I became interested in one there, subsidiary blue yonder purchased optoro, which makes them a leader in reverse logistics, whoever's logistics, Tam is two point.

[SPEAKER_01]: They're sorry, in 2023 it was 731 billion expected to grow to 1.2 trillion in 2033, and nobody has thus far figured out how to handle on this huge problem, interesting.

[SPEAKER_01]: Tam is total adjustable market,

[SPEAKER_01]: the demand for reverse logistics is on the rise.

[SPEAKER_01]: And I think that's the question here, is this the best, obviously it's not gonna be a pure play.

[SPEAKER_01]: So that's one issue I have here is, guess they bought a company, but remember, Panasonic is huge.

[SPEAKER_01]: It's a $27 billion market cap that it comes $2.5 billion.

[SPEAKER_01]: earnings yield but their cash flow is negative.

[SPEAKER_01]: I don't like that.

[SPEAKER_01]: No dividend here.

[SPEAKER_01]: Return equity is about 8%.

[SPEAKER_01]: So I like what you're saying and that reverse logistics idea, I just wouldn't buy this because it's not a peer play.

[SPEAKER_01]: Okay, it's lumped in with kind of a middleing to poor business, a very competitive business.

[SPEAKER_01]: And I just don't want to tie myself to that.

[SPEAKER_01]: It just doesn't make sense.

[SPEAKER_01]: I would do a deeper research, maybe some small caps that are aligned with this.

[SPEAKER_01]: I wouldn't buy it just because it made this little acquisition and you like that position because you take to go with the bad with these large companies and for right now, at least it looks more bad than good.

[SPEAKER_01]: Thanks for the question.

[SPEAKER_01]: Let's talk about AI replacing junior workers, how much of a problem is this?

[SPEAKER_01]: The job market here in the United States is not great.

[SPEAKER_01]: In August, job creation was down to negative 22,000 jobs.

[SPEAKER_01]: Down from 158,000 created jobs in April.

[SPEAKER_01]: Sorry, we still added 20,000.

[SPEAKER_01]: Excuse me, 80p numbers were negative, but the official jobs number was 22,000.

[SPEAKER_01]: But that's still down from 158,000.

[SPEAKER_01]: And a lot of you were asking is that because of AI's

[SPEAKER_01]: encroaching on human work.

[SPEAKER_01]: Number of the past year, the share of white-collar jobs in total employment, most exposed to animation, has remained stable, flattened up.

[SPEAKER_01]: But the growth has stalled, it had been on a solid uptrend since the 80s, and even if you go back to 2015, it was still on the rise, it's been stalling the rise.

[SPEAKER_01]: but it's starting to weaken and roll over.

[SPEAKER_01]: But it's not in the downtrend yet, at least on an aggregate scale.

[SPEAKER_01]: But when you look at the company level, you are starting to see subtle changes.

[SPEAKER_01]: So Harvard University looked at companies that hired quote unquote, generative AI integrators, whose job entirely was to embed AI into daily operations.

[SPEAKER_01]: Now, if AI had no bearing unemployment, hiring at these adopter firms might be expected to, be the same as non-adopter firms.

[SPEAKER_01]: But the research shows, that's not the great, not the case.

[SPEAKER_01]: If I'm at junior roles, fell across the board after 2023.

[SPEAKER_01]: And to decline, over the next six quarters, so all of last year, and the first half of this year, was 7.7%.

[SPEAKER_01]: for those adopter firms, so 7.7% lower.

[SPEAKER_01]: And it makes sense, basic tasks that we're usually done by low-level graduates, reviewing documents and debugging code, things like that, easy to hand over to machines.

[SPEAKER_01]: I think of the legal profession, will you have a paralegal anymore?

[SPEAKER_01]: And this is having a downstream impact on graduate.

[SPEAKER_01]: So who are squeezed?

[SPEAKER_01]: What young workers?

[SPEAKER_01]: What cohort is feeling the pinch the most?

[SPEAKER_01]: And they looked at five years.

[SPEAKER_01]: From those that graduated from the top schools, the Harvard's and Yale's of the world.

[SPEAKER_01]: To the lower tier.

[SPEAKER_01]: Make your community college.

[SPEAKER_01]: And what's interesting here is that the top and the bottom schools, they weren't impacted much.

[SPEAKER_01]: It was the middle tier schools that were impacted the most.

[SPEAKER_01]: Because firms, those top schools, they're still a lot of talent, natural talent, there's a reason they went to those top schools and they were able to get in because they have

[SPEAKER_01]: And the lower tier ones, they cost less, right?

[SPEAKER_01]: The high ones, you have to really pay, but you're probably paying what you get, or what you get.

[SPEAKER_01]: And the lower tier ones, well, those are just people maybe, they're smart enough.

[SPEAKER_01]: They're fine.

[SPEAKER_01]: You pay them a little bit less, and you augment their role with AI.

[SPEAKER_01]: It's the middle tier graduates that are feeling the pinch the most.

[SPEAKER_01]: because, you know, the middle tier schools kind of mix bags.

[SPEAKER_01]: Some have some great graduates and some, you know, they just got lucky that they didn't get stuck with them at one of the lower tier schools.

[SPEAKER_01]: So it's harder to justify and take that risk.

[SPEAKER_01]: Now, it isn't all bad, isn't all bad for younger workers.

[SPEAKER_01]: If you look at the total cohort of the sample size of the companies they looked at, those AI doctors, it was only 17% of the workforce.

[SPEAKER_01]: So it's still not clear that that's going to expand to all the sectors, right?

[SPEAKER_01]: There's certain verticals that AI will have large impacts.

[SPEAKER_01]: Like I said, a lot of white color work, a lot of lawyers and programmers and things like that.

[SPEAKER_01]: But the opportunities for automation and application of AI will narrow as

[SPEAKER_01]: the adoption increases and so it's going to have an impact for sure, but it's still going to build over time and it's going to be very slow.

[SPEAKER_01]: I think it was squeezing one more question now.

[SPEAKER_06]: Yeah, good show guys.

[SPEAKER_06]: Mark from San Diego, just looking at the gold and the rain sectors up the course along with everybody else pretty big, but I see it's been pulling back some as

[SPEAKER_06]: I think you mentioned in the past about a 15% of the gold, I don't know what you would get to your anium or just sit on it for the long term.

[SPEAKER_06]: Anyway, just like to know your thoughts on the gold in your anium sector.

[SPEAKER_06]: Thank you.

[SPEAKER_06]: Bye bye.

[SPEAKER_01]: Are they looking at you are your random in general or your gold mining stocks and they both did have a decent pull back recently, but your rating's taken off again, and because the deal with Camico and Westinghouse and the US government.

[SPEAKER_01]: And so Camico is at a new high-dust the name we've held for clients for a long time.

[SPEAKER_01]: Some of the other year, you're any minor still are kind of in the midst of a

[SPEAKER_01]: a consolidation period.

[SPEAKER_01]: I'm still bullish on both of these spaces over the medium to long term.

[SPEAKER_01]: So no, but as you kind of hint at that, I spoke about this.

[SPEAKER_01]: I said this pretty much at the top, at least in gold, back on, with the 14th or 15th of, 15th or 16th of this month, I said, gold's over bot.

[SPEAKER_01]: Everyone's talking about it.

[SPEAKER_01]: This happened back in April.

[SPEAKER_01]: You went through a consolidation period.

[SPEAKER_01]: And the miners, a 15 to 20% pullback in these names, will happen to you like that.

[SPEAKER_01]: And it'll shake out a lot of weekends.

[SPEAKER_01]: They do not understand the industry and just can handle that level of volatility.

[SPEAKER_01]: And you have to be comfortable with that.

[SPEAKER_01]: And GDX decided to go from 85 to 68 in a very short period of time.

[SPEAKER_01]: Okay, so there's that quick 20% full back, but it's holding support and so you just have to be comfortable with that volatility and I think the uptrend will continue.

[SPEAKER_01]: It was the best thought I'm just inclined we have one goal here each every week day so help you achieve your own version of financial freedom and work continues after this final break.

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[SPEAKER_05]: Hi, my name is Gabriel and I'm calling from Hanford, California and I'm wanting to get into the health care sector preferably the biotech and I had a question on which company is better as far as long-term earnings per share growth and more revenue growth in the next three or four years, I'm looking at stock ticker at VABV versus vertex VRTX.

[SPEAKER_05]: I'm showing revenue growth and earnings per share growth with my fidelity app, but I'm just wondering what you guys see on your end and what's one do you see is a better company moving forward appreciate all that what you do and have a

[SPEAKER_05]: Happy Thanksgiving and New Year's, appreciate it.

[SPEAKER_01]: Well, thank you so much for the kind words and I hope you have a great holiday as well.

[SPEAKER_01]: Looking at Vertex and Abby both in the Biotech space in Vertex, revenue earnings, let's go about 2% this year, 14% next year and Abby, you're talking about 4% growth this year and 38% growth.

[SPEAKER_01]: next year.

[SPEAKER_01]: So certainly Advise on a better growth trajectory and frankly is trading in a more reasonable valuation based on forward-looking earnings.

[SPEAKER_01]: You're talking a

[SPEAKER_01]: about a high teens multiple.

[SPEAKER_01]: So I certainly like that vertex.

[SPEAKER_01]: It's supposed to earn $20 next year, but about a twist about a 21 times multiple at $420 per share with less earnings growth.

[SPEAKER_01]: Now, vertex certainly has a bit better balance sheet than cash in its balance sheet.

[SPEAKER_01]: That's nice, I like that.

[SPEAKER_01]: But if you look at things like price to free cash flow, it's about 31 times versus 22 times on AdV.

[SPEAKER_01]: And turn on assets.

[SPEAKER_01]: So, start turning actually over 100% on AdV and on Vertex.

[SPEAKER_01]: You're talking about 22% still good, but not amazing.

[SPEAKER_01]: And you don't really dividend with Vertex,

[SPEAKER_01]: Overall, at the would be my bet.

[SPEAKER_01]: Now, not only is the chart much, much better, it's in a solid uptrend versus vertex.

[SPEAKER_01]: It's now in kind of a downtrend.

[SPEAKER_01]: Okay.

[SPEAKER_01]: Now, Abby is not cheap.

[SPEAKER_01]: I will say that.

[SPEAKER_01]: That's not cheap by any means after this run.

[SPEAKER_01]: But overall quality of the business, yes, it has more debt, but it's about 60 billion dollars on debt in a $400 billion company.

[SPEAKER_01]: That's not really crazy, right?

[SPEAKER_01]: That's a, that's a,

[SPEAKER_01]: normal amount of debt for this size of business, especially with its cash flow, 18 billion dollars, chilling 12 months, and it has come down from 2022, but I think it's overall still in a nice solid uptrend.

[SPEAKER_01]: So I see no reason to own vertex, savvy solid name, but not cheap.

[SPEAKER_01]: Thanks for the call.

[SPEAKER_01]: And I once again, it's on everyone's mind, and there's a new report and it's very interesting.

[SPEAKER_01]: And OpenAI is using about 100x investment bankers to train their AI models to build financial models.

[SPEAKER_01]: that will replace a lot of the grunt work by junior bankers across the industry.

[SPEAKER_01]: And you know, what's so interesting about this is I actually have a cousin.

[SPEAKER_01]: She's a successful and best maker.

[SPEAKER_01]: And I remember when she was in her 20s, she was working 80 hours a week.

[SPEAKER_01]: And it was all about building these decks and these models.

[SPEAKER_01]: And it was a lot of work and very stressful.

[SPEAKER_01]: Now she's doesn't do anymore, she has a lot of junior workers that do this, but it's clear that opening an ice trying to replace those younger

[SPEAKER_01]: up and coming investment bankers and they're paying these people, these participants $150 per hour to write prompts and build these financial models that they've done already because they were or are currently junior investment bankers and doing things like restructuring, IPOs, bond offerings, et cetera.

[SPEAKER_01]: And it's a project mainly to draw, if this is part of their drive towards these white

[SPEAKER_01]: consulting, finance, legal, technology, and, you know, they're certainly trying to edge in on these younger workers.

[SPEAKER_01]: And so it's definitely a focus of theirs in something we have to think about from a wider perspective.

[SPEAKER_01]: But if you're looking at your best opportunities, I think this is where a lot of those opportunities are in those consulting businesses, finance companies.

[SPEAKER_01]: law firms and across technology to make those businesses more efficient.

[SPEAKER_01]: I think that's where the big winners will come out when it comes to AI.

[SPEAKER_01]: Well, I'm Justin Klein, and if they show them how to think about your own financial picture in any way, your investments, your taxes, your retirement, whether all is working for you, let's talk about it.

[SPEAKER_01]: To head over to investtalk.com, click on the portfolio review button and schedule a no-cost portfolio review with myself or Luke at our company KTP Financial.

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