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

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[SPEAKER_01]: Independent Thinking, shared success.

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

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[SPEAKER_01]: Here is KPP Financial Chief Executive Officer,

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[SPEAKER_00]: Good afternoon fellow investors and welcome back to invest talk this is our Monday November 25th, 2025 edition and thanksgiving is just a couple days away and Was it a Tuesday it's Tuesday is Tuesday.

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[SPEAKER_00]: Wow time flies

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[SPEAKER_00]: This Tuesday, November 25th, and I was a couple of days away from Thanksgiving and then holiday season will be in full swing.

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[SPEAKER_00]: I'm the host of the Best Talk Justin Klein and our job here each every day is how we become a better investor, navigate you through these challenging times, uncover and reveal exactly why markets are moving in certain ways, not just what the headline say, but what's going on underneath the surface and really

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[SPEAKER_00]: help you grasp how you should react in this market, based on your goals, your risk tolerance level, the opportunities that are out there and the pitfalls.

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[SPEAKER_00]: The risks that are in the market as well, because they're always both.

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[SPEAKER_00]: They're always opportunities.

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[SPEAKER_00]: They're always risks.

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[SPEAKER_00]: And you need to correctly identify them as sometimes taking a certain amount of risk is important.

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[SPEAKER_00]: Almost always is.

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[SPEAKER_00]: But you want to do that in a smart way.

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[SPEAKER_00]: You want to do that in a way that puts the odds in your favor

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[SPEAKER_00]: just taking wild risks and so many in today's market are doing that.

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[SPEAKER_00]: Through options, leverage, and crazy investment strategies and gamma squeezes, all these things that are not really investing.

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[SPEAKER_00]: It's more gambling, manipulation, et cetera.

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[SPEAKER_00]: Our job is to bring you back to the basics and the fundamentals of real investing that can stand the test of time, not just a week, a quarter, a year, or even a handful of years.

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[SPEAKER_00]: This is about the next decade and beyond.

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[SPEAKER_00]: So that's what our mission is every single day on a desktop.

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[SPEAKER_00]: We also bring you other valuable tools, such as our wealth webinars, and we do have one coming up in two weeks, two weeks from today, December 9th.

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[SPEAKER_00]: Luke and I will be hosting a new and best talk wealth webinar.

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[SPEAKER_00]: And the title is, year-end tax toolkit, R&D planning, tax loss harvesting, deferral strategies.

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[SPEAKER_00]: If you are one of this, I don't like to pay taxes, but I have,

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[SPEAKER_00]: these games that I've been built up over time in some stock I've been holding or some ETF or mutual fun I've been holding or maybe I own some rental properties that don't really want to be a landlord anymore and you know how do I sell these without taking major tax hits?

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[SPEAKER_00]: Or maybe just at the end of the year, you want to do some tax loss harvesting playing this is all these are all the things that we're going to talk about and much more Roth conversion strategies etc to really make sure that you know you are

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[SPEAKER_00]: addressing the areas that make sense for you so that you're not being too much, you know, every minute completely avoid the IRS, but you know, you want to limit that in legal ways.

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[SPEAKER_00]: And so we'll talk about that in much more once again, coming up on December 9th, it's free webinar, but you do have to re-register at investtalk.com.

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[SPEAKER_00]: Now, just a bit, I'm going to talk about today's Mark performance and run down the show topics, but as usual, we'll tackle this

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[SPEAKER_06]: I just didn't look, who just love your take on Albertson's ticker ACI.

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[SPEAKER_06]: It's been on my watch list for quite a few years, and I know it has fallen off ever since the acquisition didn't materialize.

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[SPEAKER_06]: but fundamentally looks pretty sound to me with the exception of the debt load they carry.

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[SPEAKER_06]: So it's just curious if this is an opportunity to enter this position for a long term in a diversified portfolio.

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[SPEAKER_06]: Thanks again, all listen on the podcast.

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[SPEAKER_00]: Well, I think you kind of highlighted it there.

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[SPEAKER_00]: It does have a lot of debt about $14 billion in long-term debt on a $10 billion market cap.

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[SPEAKER_00]: That's hefty.

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[SPEAKER_00]: And there, let's see, time's interesting, is about four, so they are earning enough to pay that interest but it's going down.

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[SPEAKER_00]: So over the past, let's see since 20, 22 times interest earn, peak that at six meaning how much do they pay interest and how many times that are they earning in profits, okay?

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[SPEAKER_00]: So it was six times fairly healthy, decent.

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[SPEAKER_00]: Now it's down to four times, not nearly as healthy.

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[SPEAKER_00]: So that means for every $1 earnings,

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[SPEAKER_00]: They pay out one if, sorry, for every $4 earnings, they pay out one dollar in interest to that holders.

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[SPEAKER_00]: And that is one of the big issues with companies that carry a lot of debt.

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[SPEAKER_00]: It's not just that there's risk of bankruptcy.

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[SPEAKER_00]: It's that all this profit, it goes towards the bond holders, not the shareholders.

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[SPEAKER_00]: And you as an equity holder, that's what you're talking about.

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[SPEAKER_00]: You're buying equity, that is not ideal, okay?

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[SPEAKER_00]: And I don't love that.

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[SPEAKER_00]: I don't love seeing so much money go to debt.

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[SPEAKER_00]: And their debt is starting to rise once again.

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[SPEAKER_00]: It was declining.

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[SPEAKER_00]: And this most recent quarter is started to tick back up the bottom round 13 and a half billion.

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[SPEAKER_00]: Now we're approaching back up about 14 billion.

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[SPEAKER_00]: Now earnings are supposed to be down 9% this year, they're down 19% last year.

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[SPEAKER_00]: Just bounce back a little next year.

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[SPEAKER_00]: But, you know, I, it looks cheap, right?

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[SPEAKER_00]: It's an 18 dollar stock.

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[SPEAKER_00]: And so it looks cheap and on that basis, earnings basis, it is fairly cheap.

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[SPEAKER_00]: But the problem is that cash flow flowing to debt holders and not you, the shareholders.

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[SPEAKER_00]: So until that changes, until they can right size their balance sheet, I just don't find a lot of reason to own the name.

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[SPEAKER_00]: It was dividend, had been going up, and it's just been sitting sideways for a number of years now.

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[SPEAKER_00]: So I just am not a fan.

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[SPEAKER_00]: I think the technicals are starting to get a little bit better near term after it looks like earnings report in October, but overall, I don't see this as a good long-term hold.

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[SPEAKER_00]: Now we've got a lot of ground to cover over the next 45 minutes or so and time permitting, we'll cover it all.

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[SPEAKER_00]: And our main focus point is about a dovish, fed, pivot.

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[SPEAKER_00]: And the December rate odds are increasing.

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[SPEAKER_00]: Great cut odds are increasing.

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[SPEAKER_00]: And we'll talk about what all these Fed presidents are saying.

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[SPEAKER_00]: And I'll give you my sense of what I'm expecting from the next Fed meeting and how the market might react to it.

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[SPEAKER_00]: We also have the topics on the docket as well.

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[SPEAKER_00]: One is in regards to Black Friday.

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[SPEAKER_00]: Black Friday's coming up on Friday.

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[SPEAKER_00]: like Friday and Thursday.

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[SPEAKER_00]: Like Friday is on Thursday on Friday, excuse me.

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[SPEAKER_00]: And you know, will you find arguments and the National Retail Federation has some projections and we'll dig into those.

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[SPEAKER_00]: And then a big short fame, Michael Burrie, put out a big blog post.

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[SPEAKER_00]: He closed up his shop and he can say he was retired, but he's focusing more on his newsletter, cost $3 million a month

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[SPEAKER_00]: He answered at what he thinks was going on in AI.

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[SPEAKER_00]: So we'll look at that story as well.

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[SPEAKER_00]: So that's what's on the docket for me.

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[SPEAKER_00]: But ultimately, this is about you.

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[SPEAKER_00]: What's on your mind?

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[SPEAKER_00]: That's what's most important.

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[SPEAKER_00]: We also have voice bank calls.

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[SPEAKER_00]: One is on nice, limited, and I see E is the symbol as you would expect.

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[SPEAKER_00]: And then question on buying options.

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[SPEAKER_00]: And of course,

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[SPEAKER_00]: We have questions that came in via the comment section over on an invest talk, the invest talk YouTube channel.

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[SPEAKER_00]: And of course, most importantly, a number one will always be your live calls.

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[SPEAKER_00]: Don't hesitate to give us a call right now at eight and eight ninety nine chart.

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[SPEAKER_02]: Serious investors are certain to have, finance and investment questions.

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[SPEAKER_02]: What do you think is a good price?

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[SPEAKER_02]: And the best person to ask your question in the right way is you.

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[SPEAKER_05]: I was wondering, from your standpoint, if they're at downside in buying fractional shares, or is this whole shares?

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[SPEAKER_02]: And 24, 7 rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

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[SPEAKER_00]: But technically, right now,

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[SPEAKER_00]: I like it.

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[SPEAKER_00]: I like the moments, but what's going to don't like those fundamentals?

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

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[SPEAKER_02]: Your participation makes an invest talk better.

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[SPEAKER_03]: I'm calling to ask about core and main.

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[SPEAKER_03]: This is Josh and North Carolina.

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[SPEAKER_03]: This is Marlow from York City area.

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

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[SPEAKER_02]: So don't forget to call

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[SPEAKER_02]: Great and fine.

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[SPEAKER_02]: Thank you.

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[SPEAKER_02]: 888 99 chart.

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[SPEAKER_02]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

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[SPEAKER_02]: Now the torch has been passed and a new generation of hosts is on the job.

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[SPEAKER_02]: Justin Klein and Luke Guerrero.

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[SPEAKER_02]: So when you've got finance and investment questions, don't forget to call in Vestock.

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[SPEAKER_02]: 888-99, chart.

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[SPEAKER_00]: Now, I just mentioned the upcoming wealth webinar in December 9th before this happens.

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[SPEAKER_00]: I recommend that you look at our new comprehensive Q4 economic market outlook report.

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[SPEAKER_00]: It's a free read, but you do need to download it over at investtalk.com.

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[SPEAKER_00]: And my phone lines are open waiting for you right now, 8 at 899 chart.

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[SPEAKER_00]: Now, let's take a quick look at the market today.

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[SPEAKER_00]: And you had another strong day on the back of continued Dovish comments out of Fed members, which will get to in a little bit.

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[SPEAKER_00]: And you really had some strength at it.

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[SPEAKER_00]: It names like Google and Microsoft and Meta.

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[SPEAKER_00]: As it looks like Google is looking to open up.

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[SPEAKER_00]: It's proprietary chips that they produce themselves for other companies like Meta.

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[SPEAKER_00]: uh Nvidia was down because of that same with AMD AMD now is 4% Nvidia that's 2.5% on the day Netflix down 2.4 but the rest of the market was mostly green outside of oil oil oil names were down slightly uh but you had the finance sector was strong health care remains a a very strong part of the market as well you have industrials uh holding in there on top of that so

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[SPEAKER_00]: And then retail, Walmart up 2.8% Costco 1% Amazon up 1.5, Home Depot up 4.3.

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[SPEAKER_00]: And I think this is on the back of once again, a potentially more dovish fed pivot.

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[SPEAKER_00]: And that would sort of really drove the markets higher overall.

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[SPEAKER_00]: You have the NASDAQ up to 2 thirds of 1%.

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[SPEAKER_00]: But the S&P up nearly 1% of the NASDAQ continues to lag, especially as there's,

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[SPEAKER_00]: more consideration of changing landscape within the AI space.

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[SPEAKER_00]: The DAO is up nearly one and a half percent on the day and small caps with a big winners up about two percent.

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[SPEAKER_00]: So that was the market for today.

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[SPEAKER_00]: Let's see.

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[SPEAKER_00]: Do we have any economic news?

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[SPEAKER_00]: You had September retail sales.

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[SPEAKER_00]: That was up 0.2 percent month over month.

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[SPEAKER_00]: The expectation was

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[SPEAKER_00]: Okay, so a little bit disappointment on that front.

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[SPEAKER_00]: September, the late PPI increased point three percent, month over month, that was in line with consensus.

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[SPEAKER_00]: So obviously these are stale numbers, but still something the market is paying attention to.

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[SPEAKER_00]: You had the dollar down point three percent, goal of finish up one point one percent on the day, Bitcoin futures were down to percent.

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[SPEAKER_00]: And that continues to be an area I am watching is what type of traction do we get to the upside for Bitcoin?

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[SPEAKER_00]: It found support right around 81,000 back in on the 21st and

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[SPEAKER_00]: Now it's at 87, but it didn't really make a new high to day overnight high was kind of around 89,000 right now we're seeing at 87 and change.

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[SPEAKER_00]: So you're not getting that kind of confirmation of Bitcoin really rallying in earnest, which is a message that is being sent to the markets that liquidity dynamics and rate changes and inflation expectation changes are not

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[SPEAKER_00]: are not tailwinds to risk assets right now they aren't bit of headwinds.

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[SPEAKER_00]: You had WTI crew down 1.5% on what looks like the Ukraine piece of deal volatility as well as what might happen in Venezuela and us having some military action unlocking some oil supply so that what's what weighed on WTI crewed on the day.

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[SPEAKER_00]: Mills Pivot, and go to a question that came in via the Invest Talk YouTube channel, Randy 23 says, hey guys, would love your take on service now as a long term pilot hold in my Roth.

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[SPEAKER_00]: Now, this is has been a darling of the of the SaaS software space for a number of years, 2018, they earned $2.49, and this year is just earned $17.37.

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[SPEAKER_00]: and next year up to $20 and 41 cents.

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[SPEAKER_00]: Think about that.

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[SPEAKER_00]: If they hit their expected targets for next year in earnings, in under a decade, earnings have gone up tenfold.

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[SPEAKER_00]: So clearly it's a big winner in that sense.

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[SPEAKER_00]: The worry, though, is that will AI suddenly you serve a lot of these SaaS software models.

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[SPEAKER_00]: That is a huge question and why it's kind of in selling off.

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[SPEAKER_00]: I fade that a bit to be honest with you, but certainly could weigh on the stock in the long term.

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[SPEAKER_00]: So it's not one of those things that I just put in my Roth and forget it because of the technological landscape just changes so fast you're seeing that right now.

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[SPEAKER_00]: So I do think it's a pretty decent value at these levels, but it wouldn't be a clear cut by and hold, because of that risk from AI, I really upending their business model.

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[SPEAKER_00]: They are moving to a break, still the comment.

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[SPEAKER_00]: My focus point and more answers to your questions.

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[SPEAKER_00]: So I encourage you to call and that's talk right now at 8-8-99 sharp.

15:51.140 --> 15:56.405
[SPEAKER_02]: Get ready for an all-new Invest Talk, Wealth webinar.

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[SPEAKER_02]: Year-end tax tool kit, RMD planning, tax laws harvesting, and deferral strategies.

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[SPEAKER_02]: It's all happening online and free of charge.

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[SPEAKER_02]: The new Wealth webinar Tuesday, December 9th from 11am to 12 noon Pacific Time.

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[SPEAKER_02]: Pre-register now at InvestTalk.com.

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[SPEAKER_00]: Now I'm going to focus point today on the best talk is about the Devish bed, give it, you know, we have a fed meeting coming up in December and by every account or most accounts, it's been pretty divided on who the what the members think should happen going forward.

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[SPEAKER_00]: And you have all types of opinions.

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[SPEAKER_00]: And

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[SPEAKER_00]: New York Fed president John Williams, he's a permanent voter because he's the vice chair of the Open Market Committee.

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[SPEAKER_00]: He said at a conference at the Central Bank of Chile recently that US employees could fall without putting the Fed's inflation goal at risk.

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[SPEAKER_00]: He said, quote, I view monetary policy is being modest and restrictive.

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[SPEAKER_00]: Therefore, I still see room for further adjustment in the return to the target range for the federal funds rate to move to the

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[SPEAKER_00]: basically saying, I'm okay with cutting, but he says that job market appears to be softening and compared to September, jobless rate to pre-plan pandemic years.

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[SPEAKER_00]: Okay, so he said he expects price pressures to ease after a tariffs pass to the economy.

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[SPEAKER_00]: And that's kind of one argument here is that yes inflation is re-accelerating, but this is kind of a one-time adjustment.

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[SPEAKER_00]: the tariffs roll through the economy, they eventually get taken up by a goods producers and importers and passive along whatever they can to the end consumer, and that ultimately flows through to inflation, and that's what you're seeing right now.

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[SPEAKER_00]: But once that's in, it's done.

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[SPEAKER_00]: And there's not much more adjustment from there than it's more about broader supply demand than Amazon in the economy.

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[SPEAKER_00]: And I certainly understand that.

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[SPEAKER_00]: That makes some sense.

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[SPEAKER_00]: And so that's why even though the Fed runs rate is or the inflation rate is above the 2% target, they still

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[SPEAKER_00]: are airing on the side of cutting, because they're more worried about the labor market.

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[SPEAKER_00]: And you had Susan Collins, she is the Federal Reserve Bank of Boston, President.

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[SPEAKER_00]: So in a CBC interview, last Friday, the she thinks monetary policy isn't right.

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[SPEAKER_00]: Place given the economy economies for resilience,

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[SPEAKER_00]: and she is a voting member this year so she could descend.

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[SPEAKER_00]: You also have the Dallas Fed President Lori Logan.

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[SPEAKER_00]: She is not a voter this year, but she will be a voter next year and she expects she wants to hold rates steady.

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[SPEAKER_00]: So those are just a few and then more recently you had Fed President Waller and a governor Waller and he said he advocates for cut in December.

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[SPEAKER_00]: and then a meeting by meeting approach.

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[SPEAKER_00]: So those are kind of a smattering of opinions.

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[SPEAKER_00]: Once again, kind of mix, but ultimate, the ultimate decision will be with drone power.

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[SPEAKER_00]: Now, if you look at the odds right now, the market is pricing in 84 chance on December 10th, basically two weeks from tomorrow, that there will be a rate cut.

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[SPEAKER_00]: That's basically pricing in a rate cut.

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[SPEAKER_00]: Now, there are two options for Jerome Powell, which is basically number one is to cut rates in December.

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[SPEAKER_00]: But signal to the market that there's a higher bar for further cuts going forward.

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[SPEAKER_00]: Now, he only has four more meetings, after this one will be three more, where he's in charge.

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[SPEAKER_00]: there will be a new Fed president at the June meeting.

20:04.437 --> 20:11.310
[SPEAKER_00]: So he could signal that, yeah, I'll cut, but you know, the next three are up in the air.

20:11.370 --> 20:12.492
[SPEAKER_00]: Don't bank on it.

20:13.253 --> 20:16.920
[SPEAKER_00]: And frankly, I think that's what he will go with.

20:16.940 --> 20:21.008
[SPEAKER_00]: And it will be what I call a hawkish cut.

20:21.241 --> 20:26.491
[SPEAKER_00]: a hawkish pivot, which he did do back in 2019, okay.

20:26.772 --> 20:35.689
[SPEAKER_00]: So in 2019 he did the the cut and then hold the approach and I think that makes sense.

20:36.344 --> 20:46.681
[SPEAKER_00]: Because the data shows that they have so far does show more of a weakening labor market, a bit more than accelerating inflation.

20:46.841 --> 20:52.610
[SPEAKER_00]: You know, there is some signs of that as well, but you're gonna need a lot more data here coming up after this Fed meeting.

20:52.651 --> 21:01.705
[SPEAKER_00]: Let's get it on the 10th, but you're going to get a bunch of data later this month, believe the 16th, if I remember correctly, where is this?

21:02.046 --> 21:02.807
[SPEAKER_00]: I have it somewhere.

21:04.137 --> 21:04.498
[SPEAKER_00]: There it is.

21:05.519 --> 21:10.887
[SPEAKER_00]: Employment statistics for October and November will be released on December 16th.

21:10.987 --> 21:16.295
[SPEAKER_00]: And on November that on consumer prices will be due on December 18th.

21:16.315 --> 21:25.369
[SPEAKER_00]: So you're going to go a lot more about a week or so after this fed meeting and that will color really exactly how they're going to feel going into that January meeting.

21:25.349 --> 21:32.837
[SPEAKER_00]: So all the way to the end of January so you'll get a lot more economic data between now and then and they could say it's a high bar.

21:32.857 --> 21:47.151
[SPEAKER_00]: We're kind of doing this with an expectation that this data will come in weaker and that inflation won't be continued to accelerate and signal that and that's a big question is how will the market react?

21:47.572 --> 21:48.813
[SPEAKER_00]: How will the market react to that?

21:48.833 --> 21:53.618
[SPEAKER_00]: Because right now there is a 65% chance that they will

21:53.598 --> 21:55.983
[SPEAKER_00]: cut next month and then not January.

21:56.063 --> 21:59.510
[SPEAKER_00]: Only a 23% chance they will cut in both months.

22:00.192 --> 22:07.948
[SPEAKER_00]: So if they take that off the table of they were probably not going to cut in January, that could be another catalyst for a market sell off.

22:07.968 --> 22:10.654
[SPEAKER_00]: So that's what I'm expecting going forward.

22:10.994 --> 22:14.121
[SPEAKER_00]: We shall see things can obviously change but we'll be

22:14.101 --> 22:24.878
[SPEAKER_00]: wondering how those Fed Presidents continue to job on the market one way or the other, and that's one of the reasons why the market has rallied recently, because you've had a lot more garbage commentary from many of them.

22:25.499 --> 22:27.502
[SPEAKER_00]: Now the next investor we'll look at this topic.

22:28.203 --> 22:31.087
[SPEAKER_00]: For you, Buffett's $320 billion cash pile.

22:31.768 --> 22:36.075
[SPEAKER_00]: That's story tomorrow, but for now I'm just inclined and ready to take your calls and edit it and you need a chart.

22:43.193 --> 22:47.157
[SPEAKER_02]: The cause are free, the unbiased answers are free.

22:47.778 --> 22:49.860
[SPEAKER_02]: So what are you waiting for?

22:50.420 --> 22:54.945
[SPEAKER_02]: Call in Vestock, 888-99, chart.

22:54.965 --> 22:57.047
[SPEAKER_03]: Hi there, Luke and Justin.

22:57.407 --> 22:59.049
[SPEAKER_03]: This is Matt from Minneapolis.

22:59.449 --> 23:00.991
[SPEAKER_03]: Long time was there to the show.

23:01.371 --> 23:04.975
[SPEAKER_03]: I have a situation here like your assistance with please.

23:05.976 --> 23:07.197
[SPEAKER_03]: I have a couple stocks.

23:07.217 --> 23:10.821
[SPEAKER_03]: I would like to sell and take tax losses on the share.

23:11.273 --> 23:16.500
[SPEAKER_03]: and I'll swim my portfolio here with the video right now.

23:16.540 --> 23:22.888
[SPEAKER_03]: It's about 15% of my portfolio was even higher but it's dropped down from the $200 mark.

23:23.549 --> 23:27.554
[SPEAKER_03]: I know I should take some of that off as profit from what you guys have said.

23:28.475 --> 23:36.285
[SPEAKER_03]: I have nothing in Europe and I also have nothing in midcap

23:36.704 --> 23:43.681
[SPEAKER_03]: What do you think of moving some of those monies to either VOT or VGK?

23:44.282 --> 23:50.598
[SPEAKER_03]: Would those be smart moves for my future to hang on to for three, five or more years?

23:51.119 --> 23:51.540
[SPEAKER_03]: Thank you.

23:51.941 --> 23:53.765
[SPEAKER_03]: I will listen to you on the show.

23:53.906 --> 23:54.848
[SPEAKER_03]: Have a great day.

23:55.840 --> 24:08.609
[SPEAKER_00]: Well, I definitely think you should be trimming your position in video 15% into one name is way too much, and especially a NM like in video, which is a lot of expectations built into that price.

24:08.729 --> 24:14.743
[SPEAKER_00]: And they can meet it, but there's a sizable chance that they do not meet it, and you have a,

24:14.723 --> 24:19.211
[SPEAKER_00]: large drop in that name at some point, and you're already starting to see a bit of weakness.

24:19.291 --> 24:34.116
[SPEAKER_00]: And, you know, today's news of Google allowing metadata to use some of their internal

24:34.096 --> 24:39.105
[SPEAKER_00]: certainly hurt in video and could be a shot across the bow for that name.

24:39.565 --> 24:41.268
[SPEAKER_00]: So definitely time to trim there.

24:41.609 --> 24:42.470
[SPEAKER_00]: Now what should you put it in?

24:42.510 --> 24:47.419
[SPEAKER_00]: Well, the VOT is the Vanguard Midcap Growth ETF and I do like midcaps.

24:47.619 --> 24:49.803
[SPEAKER_00]: I like that you're trying to target midcaps.

24:50.003 --> 24:54.251
[SPEAKER_00]: I wouldn't target midcap growth though specifically.

24:54.691 --> 24:57.977
[SPEAKER_00]: I would want something that's a bit more balanced.

24:57.957 --> 25:01.882
[SPEAKER_00]: You know, the standard one that I followed in the midcap is MDY.

25:02.282 --> 25:07.989
[SPEAKER_00]: It's going to give you more of a blend, you know, large and there's a growth and value.

25:08.009 --> 25:11.994
[SPEAKER_00]: I would like that one a bit better or something just a bit more balanced.

25:12.074 --> 25:20.043
[SPEAKER_00]: So not necessarily just that one, but look for a midcap fund that has both value, blend and and in growth names.

25:20.063 --> 25:27.492
[SPEAKER_00]: And then VGK is the Vanguard puts the Europe ETF and I like this one.

25:28.163 --> 25:43.578
[SPEAKER_00]: Because, like you said, you don't have that European exposure, and there are certainly many very solid European names, and most of them are trading at more reasonable valuations than what you find over over here.

25:44.300 --> 25:47.387
[SPEAKER_00]: And so the performance of,

25:47.367 --> 25:51.412
[SPEAKER_00]: these names have done much better than the domestic market this year.

25:51.512 --> 25:57.199
[SPEAKER_00]: For example, this fund itself, VGK is up 27% on the year.

25:57.239 --> 26:03.166
[SPEAKER_00]: The S&P is somewhere around, this is bounce backs, or closer to 14 or 15% on the year.

26:03.286 --> 26:08.912
[SPEAKER_00]: So this is outperforming the S&P by over 10% this year alone.

26:08.992 --> 26:11.215
[SPEAKER_00]: And it's coming off a very, very,

26:11.650 --> 26:19.482
[SPEAKER_00]: reasonable valuations and so I think there's a lot more room to run and you dug in a big fan of getting more foreign exposure.

26:19.562 --> 26:28.956
[SPEAKER_00]: So I'd be leaning on VGK more than VOT and if I'm investing in midcap, I want something that's more balanced.

26:28.976 --> 26:31.320
[SPEAKER_00]: Let's go play two in a row from the best talk.

26:31.340 --> 26:33.523
[SPEAKER_00]: You voice bank it, eight, eight, nine, nine chart.

26:33.790 --> 26:36.452
[SPEAKER_04]: Hey, you can Justin, go from Philadelphia here.

26:36.793 --> 26:50.225
[SPEAKER_04]: Calling about nice systems, ticker, simple, and I've seen these, they are, identify software solutions, service, I've been looking at it for a bit, and it seems to be quite undervalued.

26:50.785 --> 26:57.431
[SPEAKER_04]: One of the get your thoughts, if it would be a good time to get some shares up and hold it for two to five years.

26:58.052 --> 27:01.274
[SPEAKER_04]: Thanks for what you guys do, and looking forward to hearing your response on the show.

27:01.575 --> 27:01.975
[SPEAKER_04]: Take care.

27:03.035 --> 27:14.666
[SPEAKER_00]: Or this is nice, it's an ADR, and it's headquartered in Israel, and it'll software to manage analyze multimedia content and transactional data.

27:15.727 --> 27:26.217
[SPEAKER_00]: And earnings have been growing, but now they're expected to drop next year down 10% from $12.27 cents expected this year to $11.8 cents next year.

27:27.058 --> 27:29.380
[SPEAKER_00]: And so I think the question is,

27:30.592 --> 27:33.377
[SPEAKER_00]: Is there are they really at the forefront, okay?

27:33.397 --> 27:44.976
[SPEAKER_00]: So they have financial crime and compliance solution, but it has solutions that identify risks and help prevent money laundering and fraud, as well as help ensure financial markets compliance in real times.

27:45.076 --> 27:50.525
[SPEAKER_00]: The question is, is are your traditional AI models you're serving their value?

27:50.585 --> 27:53.410
[SPEAKER_00]: And I think that's what the market is telling you.

27:53.592 --> 28:02.004
[SPEAKER_00]: So this is a lesson for everybody, that you don't want to just look at, you have to be multi-disciplinary.

28:02.024 --> 28:02.544
[SPEAKER_00]: That's what we are.

28:02.945 --> 28:10.175
[SPEAKER_00]: We look at what's going on at the broader economy is the broader economy growing or shrinking, is inflation rising or falling.

28:10.956 --> 28:19.007
[SPEAKER_00]: And then you want to look at the fundamentals, you want to look at the how strong a company is long-term, but you also want to then look at the chart, the technicals.

28:19.788 --> 28:22.452
[SPEAKER_00]: And what I see very often is that,

28:23.545 --> 28:26.168
[SPEAKER_00]: Everyone just looks at earnings and they say, oh, it looks cheap.

28:26.668 --> 28:28.510
[SPEAKER_00]: And number one, they're not looking at forward-looking earnings.

28:28.530 --> 28:30.252
[SPEAKER_00]: They're looking at backwards earnings.

28:30.292 --> 28:34.337
[SPEAKER_00]: The market does not care what's happening going forward from in the review mirror.

28:34.777 --> 28:36.959
[SPEAKER_00]: It cares what's happening through the windshield.

28:37.260 --> 28:38.361
[SPEAKER_00]: And that's how you must invest.

28:39.122 --> 28:43.166
[SPEAKER_00]: And so this is the name whose earnings are already expected to decline going forward.

28:43.446 --> 28:45.368
[SPEAKER_00]: So it should be trading at a low multiple.

28:45.428 --> 28:51.595
[SPEAKER_00]: So the trading at nine, 10 times earnings right now,

28:52.739 --> 29:03.863
[SPEAKER_00]: That's probably what it should be trading at, to be honest with you, because of shrinking profits going forward, and then obviously technology looks to be potentially usurping.

29:05.007 --> 29:06.249
[SPEAKER_00]: They're product, they're value.

29:06.910 --> 29:11.717
[SPEAKER_00]: Now, their free cash flow is still very good, about 700 million, chilling 12 months.

29:12.658 --> 29:17.966
[SPEAKER_00]: But that's already peaked, was 770 million in the first quarter of this year, chilling 12 months.

29:18.427 --> 29:20.129
[SPEAKER_00]: So it's already started to fall.

29:21.010 --> 29:22.252
[SPEAKER_00]: And so that is the signal.

29:22.272 --> 29:27.099
[SPEAKER_00]: And that's the client in the stock is the market saying that we're worried about this.

29:27.560 --> 29:34.390
[SPEAKER_00]: We think that the new paradigm AI is going to make

29:35.534 --> 29:40.280
[SPEAKER_00]: And if that's the case, then this is much further to fall because earnings have much, much further to fall.

29:40.661 --> 29:44.385
[SPEAKER_00]: So you want to listen to the chart in this case.

29:45.046 --> 29:46.147
[SPEAKER_00]: And the relative strength is 10.

29:46.848 --> 29:48.851
[SPEAKER_00]: It's below all major moving averages.

29:49.191 --> 29:50.453
[SPEAKER_00]: It's in a clear downtrend.

29:50.773 --> 29:56.040
[SPEAKER_00]: And there's nothing telling me this is turning around any time soon.

29:56.020 --> 30:03.194
[SPEAKER_00]: So something to watch, potentially, but I would not own it because of what the chart is telling you.

30:03.815 --> 30:06.340
[SPEAKER_00]: And you need to listen.

30:06.360 --> 30:12.713
[SPEAKER_00]: 8.99 chart, 8.9924278, so I get through an extra question on today's show.

30:13.958 --> 30:42.295
[SPEAKER_00]: Two days we have Thanksgiving and then black Friday and you have a new report coming from the national retail federation and they're estimating that there's going to be more shoppers out during black Friday or at least online during the five day stretch you pretty much between Thanksgiving and cyber Monday going to go from 183 million last year to about nearly 187 million this year.

30:44.182 --> 30:46.256
[SPEAKER_00]: is likely to continue to decelerate.

30:47.464 --> 30:50.344
[SPEAKER_00]: A decelerate last year and is likely to decelerate once again.

30:52.062 --> 31:00.731
[SPEAKER_00]: Even though retailers are launching early promotions, you're already seeing companies like Walmart and Amazon, their BlackDit Friday deals are already running.

31:01.271 --> 31:05.555
[SPEAKER_00]: Maces that open the dedicated Black Friday portal on their website.

31:06.096 --> 31:20.230
[SPEAKER_00]: And so sales in November and December in the physical stores and online are forecasted to top $1 trillion for the first time rising 3.7% in store in 4.2% online.

31:20.210 --> 31:22.594
[SPEAKER_00]: but that it's slow with last year's game of about 4.8%.

31:23.756 --> 31:28.644
[SPEAKER_00]: So, once again, it is slowing, growth is slowing.

31:29.866 --> 31:39.602
[SPEAKER_00]: Now, one of the reasons why you are seeing, it's still a relatively healthy retail outlook.

31:40.662 --> 31:46.148
[SPEAKER_00]: Yes, those last year, but a lot of things are, and we know the deals aren't as good because of tariffs and all of that.

31:46.849 --> 31:50.813
[SPEAKER_00]: But according to Bank of America, shoppers have plenty of the bank.

31:50.833 --> 31:54.156
[SPEAKER_00]: They still hold across all income levels.

31:54.176 --> 31:56.258
[SPEAKER_00]: They hold more deposits than they did in 2019.

31:57.320 --> 32:01.023
[SPEAKER_00]: So there's still a lot of money out there sloshing in the system.

32:01.044 --> 32:07.210
[SPEAKER_00]: That's one of the reasons why inflation still remains elevate, yes, it's tariffs, but it's also the fact that

32:08.523 --> 32:18.715
[SPEAKER_00]: Consumers, they pulled back from their crazy spending in 2021 and parts 2022, but it's still, they still elevated cash levels.

32:18.856 --> 32:27.326
[SPEAKER_00]: And so when they really want something, most of them have the money to go out and get it, they're just choosier than they have been over the past few years.

32:28.427 --> 32:33.113
[SPEAKER_00]: So Consumers sentiment, yeah, it's bad and it's near multi-decade lows.

32:34.358 --> 32:45.812
[SPEAKER_00]: But household balance sheets are still pretty strong, not just the cash in the bank, but obviously the equity in their homes and the equity values in their portfolios.

32:46.693 --> 32:55.624
[SPEAKER_00]: So all those things add up to a consumer backdrop that continues to slow, but remains fairly healthy.

32:57.562 --> 33:05.272
[SPEAKER_00]: Now they pulled about 8,427 consumers and two thirds that they will wait for things to be weakened deals.

33:05.692 --> 33:08.836
[SPEAKER_00]: That's up from 59% last year.

33:09.137 --> 33:12.501
[SPEAKER_00]: So from 59% to about 6667%.

33:12.561 --> 33:20.211
[SPEAKER_00]: So people are searching for more promos but when they get something they like,

33:20.461 --> 33:22.809
[SPEAKER_00]: they are likely to continue to spend.

33:23.631 --> 33:27.604
[SPEAKER_00]: Those are the best stock, now with 160 million, 62 million downloads.

33:28.166 --> 33:30.874
[SPEAKER_00]: And we'll tackle more of your questions in 30 seconds.

33:30.914 --> 33:31.737
[SPEAKER_00]: So, hang on.

33:32.611 --> 33:43.096
[SPEAKER_02]: The Thanksgiving holiday is here, and while you're enjoying family friends and great food, you might want to think about attending the new free, wealth webinar.

33:43.457 --> 33:51.295
[SPEAKER_02]: The title is, Year and Tax Toolkit, RMD planning, tax laws harvesting, and deferral strategies.

33:51.275 --> 33:56.966
[SPEAKER_02]: And it's happening online Tuesday, December 9th from 11 am to 12 noon.

33:57.467 --> 34:03.900
[SPEAKER_02]: That's right, and all new, wealth webinar, pre-register now at investalk.com.

34:05.990 --> 34:18.605
[SPEAKER_05]: invest stock I got a question for you guys looking to see if you could give some feedback on weather when you purchase options the feed that goes into the contract to your brokerage.

34:19.185 --> 34:29.297
[SPEAKER_05]: There's that count towards your capital gains and so essentially like you know if you bought one contract

34:29.665 --> 34:36.694
[SPEAKER_05]: We're moving from the capital gains or you pay in taxes on your full profit with that, not being factored in.

34:37.134 --> 34:54.155
[SPEAKER_05]: It looks like when you do purchase it, it does give you a max profit potential and it looks like it factors in that contract price, but I wish it's curious because if you start trading options and you buy, you know, for example, 80 contracts, then it becomes, you know, kind of expensive and I feel like that would be factored into that trade decision.

34:54.816 --> 34:58.120
[SPEAKER_05]: So, I know it's kind of a tax question, but if you guys have some insight on that, that

34:59.281 --> 35:00.522
[SPEAKER_00]: Yeah, that's your cost basis.

35:00.843 --> 35:09.771
[SPEAKER_00]: So with your buying an option, your buying a stock, and ETF, and mutual fund, what you paid, your capital outlay for that position, that's your cost basis.

35:10.152 --> 35:25.147
[SPEAKER_00]: And whenever you sell that position, then you, or you exercise that position, you, that's part of your cost basis, and your proceeds or whatever you sell it for.

35:25.607 --> 35:28.410
[SPEAKER_00]: And that's simple, no matter what type of,

35:29.318 --> 35:29.779
[SPEAKER_00]: asset.

35:30.220 --> 35:31.843
[SPEAKER_00]: It is me and bonds.

35:31.884 --> 35:36.313
[SPEAKER_00]: You can buy a bond in a discount and it goes up in price and it's redeemed at park.

35:36.854 --> 35:41.264
[SPEAKER_00]: Well, you have capital gains there because it's appreciate it over time as well.

35:41.344 --> 35:45.613
[SPEAKER_00]: So yeah, it certainly part or is your cost basis.

35:45.814 --> 35:47.277
[SPEAKER_00]: Thanks for the call.

35:47.257 --> 36:01.831
[SPEAKER_00]: 80, 99 chart, 99, 2, 4, 2, 7, it's how you ask your question on today's show and from time to time, we get questions submitted via the Invest Talk website and says, LRN says my father and I have been long time listeners appreciate your information.

36:02.252 --> 36:15.525
[SPEAKER_00]: I've owned LRN for several years share value recently dropped 40% of the company reported expected week in week or Q2 and fully route looked at the issues of platform upgrade,

36:15.505 --> 36:23.019
[SPEAKER_00]: Do you recommend selling the stock and taking current profits or holding the stock with the expectations that'll recover over the next couple of years?

36:23.059 --> 36:25.483
[SPEAKER_00]: Let's go take a look at LRN.

36:26.465 --> 36:33.397
[SPEAKER_00]: And this is a provides online curriculum to 89 virtual and blended schools in 31 states.

36:33.958 --> 36:37.024
[SPEAKER_00]: The earnings are expected to drop 11% this year.

36:37.004 --> 37:04.362
[SPEAKER_00]: from an all-time high of $8.10 last year and yeah that was quite the drop now down 63% from its 52 week high and yeah this is an example of why you want to you know the rebalance especially these small cap names 2.7 billion dollar market cap and these are businesses when they're that small

37:05.287 --> 37:07.692
[SPEAKER_00]: They're not ingrained in society.

37:07.872 --> 37:13.504
[SPEAKER_00]: You think of a Coke or Pepsi or a Proctor and Gamble or even a Walmart or Costco.

37:13.544 --> 37:17.772
[SPEAKER_00]: These are ingrained in society and they're just kind of steady consistent businesses.

37:18.273 --> 37:21.540
[SPEAKER_00]: Smaller businesses, they tend to have inflow based on really

37:22.921 --> 37:36.217
[SPEAKER_00]: It's small complexities in what happens with, in this case, student enrollments, or could be student loan availability, et cetera, and so these could be very volatile names.

37:36.237 --> 37:43.967
[SPEAKER_00]: So when you have a big rally, and this has really had quite the rally over the past couple of years, let me take a look at a longer-term chart.

37:43.947 --> 37:48.453
[SPEAKER_00]: Yeah, and this has gone from $20 back in 2021 to recent high of $160.

37:48.593 --> 37:54.561
[SPEAKER_00]: So certainly, a one you'd want to trim after that type of run.

37:55.302 --> 38:04.774
[SPEAKER_00]: Now earnings, or return equity, about 22% free cash flow around $300 million, on a $2.7 billion market cap, I think that

38:04.838 --> 38:09.182
[SPEAKER_00]: is decent value, but like you said, where are things headed?

38:09.282 --> 38:11.625
[SPEAKER_00]: And that is the issue with this small cap name.

38:12.025 --> 38:13.066
[SPEAKER_00]: Now, it is that support.

38:13.607 --> 38:17.811
[SPEAKER_00]: So when things go bad, and these small cap names, they tend to drop pretty considerably.

38:18.552 --> 38:23.937
[SPEAKER_00]: I would, I think this could go all the way down to about 45.

38:23.957 --> 38:29.343
[SPEAKER_00]: I still kind of like it if the reason you bought it is still intact, that's what I would ask.

38:30.043 --> 38:31.605
[SPEAKER_00]: Why did you buy it?

38:31.585 --> 38:37.455
[SPEAKER_00]: It is our software services and educational services, are they still make sense?

38:38.116 --> 38:49.356
[SPEAKER_00]: In today's economy and with AI, you can build your own curriculum, your own online learning platform yourself using AI.

38:49.677 --> 38:51.219
[SPEAKER_00]: And I think that's a big question too.

38:51.780 --> 38:52.682
[SPEAKER_00]: So,

38:52.662 --> 39:07.007
[SPEAKER_00]: That's what kind of would worry me about holding it long-term and makes me think that probably your original reason for buying it is no longer intact and therefore I would probably look for an exit after it bounced.

39:07.027 --> 39:07.648
[SPEAKER_00]: Those are the best talk.

39:07.688 --> 39:09.772
[SPEAKER_00]: I'm Justin Klein with one goal here each every week.

39:09.792 --> 39:14.620
[SPEAKER_00]: They have to help you achieve your own version of financial freedoms to get your questions in right now at 8 o'clock in the morning.

39:21.991 --> 39:30.562
[SPEAKER_02]: Invest Talk Innovators, Justin Klein and Luke Guerrero, Interview Company Leaders, Founders, and Visionaries.

39:31.102 --> 39:36.429
[SPEAKER_02]: So head over to the Invest Talk YouTube channel and look for Invest Talk Innovators.

39:36.930 --> 39:42.436
[SPEAKER_02]: Justin Klein is here now and ready to answer your finance and investment questions.

39:42.717 --> 39:46.902
[SPEAKER_02]: Call Invest Talk 888-99-Chart.

39:49.767 --> 40:07.708
[SPEAKER_00]: Now I'll remember Michael Burie of Big Short fame and there's some recent news and he quit his hedge fund, mainly citing issues around disclosure and regulatory compliance constraints that

40:07.925 --> 40:16.881
[SPEAKER_00]: What he says is, muzzled is ability to communicate, leading to misunderstandings around his SEC filings that often sparked market turmoil.

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[SPEAKER_00]: He debates, he saw this all the time.

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[SPEAKER_00]: Michael Buried at this YouTube post and social media post.

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[SPEAKER_00]: people kind of hung on as every word because say pick predicted the financial crisis.

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[SPEAKER_00]: What's interesting to note though is you kind of predicted a lot of negative things happening over the past 15 years or so since the crisis and most of us didn't come true.

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[SPEAKER_00]: So, you know, it goes back to everyone wants to just follow the gurus, whether that's Warren or Michael Burrie or some other investor and I think a lot of times what they have to say

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[SPEAKER_00]: can be valuable, but mirroring their trays or doing everything they say makes it seem like their gods, makes it seem like they are infallible.

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[SPEAKER_00]: And the reality is we're all humans, we all make mistakes, we're all fallible.

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[SPEAKER_00]: We all put our money at the wrong place, at the wrong times sometimes.

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[SPEAKER_00]: Now, if you're dead too often, obviously you can go, you can ruin

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[SPEAKER_00]: you have to take the good with the bad and that's really how it is.

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[SPEAKER_00]: And so, you know, with the fact that anybody would hang on any human's every word, it just speaks to, hey, you don't have your own process.

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[SPEAKER_00]: You don't have your own way of understanding the markets.

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[SPEAKER_00]: And I think it's good to listen to other experts that might be smarter than you.

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[SPEAKER_00]: But take it all with a grain of salt and bring it into your thought process.

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[SPEAKER_00]: I adopt everything that that one person might think or say.

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[SPEAKER_00]: Now, that being said, he did start a sub-stack subscription.

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[SPEAKER_00]: And he's made a few posts.

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[SPEAKER_00]: One is on about 99,000, but the most recent one was titled, this Cardinal Sign of a Bubble.

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[SPEAKER_00]: Supply-side Glutney.

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[SPEAKER_00]: And he talks about the recent AI boom and compares it to the dot com era of the 1990s.

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[SPEAKER_00]: And he looked the five public horsemen of today's AI boom, Microsoft Google meta Amazon and Oracle.

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[SPEAKER_00]: are joined by several adolescent startups in promising nearly $3 trillion in spending on AI infrastructure over the next three years.

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[SPEAKER_00]: Investors absolutely love it.

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[SPEAKER_00]: That was, that was his, those were his words.

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[SPEAKER_00]: Okay.

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[SPEAKER_00]: But he thinks that this is a full zaryn, really.

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[SPEAKER_00]: And certainly it's a negatively unvidea and pounds here, et cetera.

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[SPEAKER_00]: But what's most important about this, I think is what he really

42:55.848 --> 43:16.054
[SPEAKER_00]: that $3 trillion in spending, and what's not understood is that there's actually an inverse correlation between capex spending and stock market stock performance, basically saying that one company's gorge on spending gobs of money on capital expenditures.

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[SPEAKER_00]: You usually plant plant property in equipment, plant property in equipment.

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[SPEAKER_00]: That's basically what these infrastructure plays on, right?

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[SPEAKER_00]: These these these cap expens are, you know, big warehouses, big data centers, lots of equipment and committee of chips, et cetera.

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[SPEAKER_00]: And the odds that there is a requisite positive return on investment and really the hurdle

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[SPEAKER_00]: of 10, 12, 50%, that's really what return you need and then some on these expenditures for it's a make to make it worthwhile.

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[SPEAKER_00]: And history says that more often than not, it's a bad move.

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[SPEAKER_00]: And that's why when you look at the ad, you look at the dot com bubble one point out, most of those names that went bankrupt and had huge problems with the ones that were laying out huge

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[SPEAKER_00]: And so while the market absolutely loves it, like Michael Berry says, I can believe they agree with them in this in a sense, because it's just history.

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[SPEAKER_00]: It's just statistics.

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[SPEAKER_00]: That is what happens.

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[SPEAKER_00]: More often than not, the spending leads to negative returns.

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[SPEAKER_00]: For shareholders, and potentially bottled.

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[SPEAKER_00]: A lot of that doesn't I'm just inclined, and it should make you think about your own financial picture in any way, your

44:46.902 --> 44:54.296
[SPEAKER_00]: Best strategy, acid allocation, taxes, retirement strategy, whatever it is, I encourage you to head over to investtalk.com.

44:54.857 --> 45:03.173
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45:03.322 --> 45:15.316
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45:15.697 --> 45:24.587
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45:24.837 --> 45:33.580
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