[SPEAKER_03]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is invest talk, independent thinking, shared success.

[SPEAKER_03]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

[SPEAKER_03]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

[SPEAKER_00]: Good afternoon fellow investors and welcome back to invest stock.

[SPEAKER_00]: This is our Thursday December 4th, 2025 edition.

[SPEAKER_00]: This is a can't believe it's already Thursday.

[SPEAKER_00]: It's been such a crazy start to the final month of this year.

[SPEAKER_00]: And you know, already started thinking about our MDs and

[SPEAKER_00]: you know, what to do to kind of button up 20 25.

[SPEAKER_00]: I mean, you know, where we're heading into the new year very, very soon and usually with new year comes new trends, new realities on the ground both in markets as well as in business.

[SPEAKER_00]: So our job here is to unpack it all for you each and every day.

[SPEAKER_00]: And we mainly do that by answering your finance and investment questions, bringing you data, perspective, you've all put over 25 years of investment experience.

[SPEAKER_00]: Now, in addition to our daily show, we also host webinars.

[SPEAKER_00]: In time of time, we do have one coming up on Tuesday, December 9th, 11 am to 12 pm.

[SPEAKER_00]: Pacific time, so it's one hour.

[SPEAKER_00]: The first half hour is to be dedicated to

[SPEAKER_00]: You're in tax toolkit talking about aren't that R&D planning not just about today.

[SPEAKER_00]: This isn't just, oh, what should you do between now and the end of the year?

[SPEAKER_00]: No, this is really holistic understanding how taxes impact your investment strategy as well as your long-term plan and things you can do to mitigate taxes, they'll be like staying with paying the tax man, but also do it in a way that also accomplishes

[SPEAKER_00]: saving on taxes, but it's also, how do you do that while achieving other ends as well?

[SPEAKER_00]: So I really like this presentation, Luke and I have been working on this week and coming up after that, we'll do that for about a half hour and then we'll have a half hour Q&A session.

[SPEAKER_00]: I encourage you to tune in and you do have to register by heading over to invest talk.com now and just to be able to talk about today's mark performance and run down the show topics but as usual we'll tackle this call a question first thank you for taking my fall I want to know

[SPEAKER_02]: It looks like a value player, and I just want to find out what two people think.

[SPEAKER_02]: Thank you so much and appreciate your show, it's a great show.

[SPEAKER_00]: Thank you.

[SPEAKER_00]: Well, thank you for the kind words.

[SPEAKER_00]: Looking at Nova Nordisk, and this is an interesting one, considering we were actually looking at this as we were recently as we were looking at the healthcare space.

[SPEAKER_00]: You know, what names do you want to get into, et cetera, but what was our intake away was that simply it's a decent business, but the trends in earnings expectations continue to come down earnings for this year.

[SPEAKER_00]: And then next year earnings are expected to fall to percent.

[SPEAKER_00]: Now, this is something that's still less than for all of you out there.

[SPEAKER_00]: It's not, is that, if something looks cheap, you have to understand whether that makes sense or not.

[SPEAKER_00]: It because just because there's a low P ratio or something like that doesn't mean it's cheap.

[SPEAKER_00]: It could have a below market P ratio and be expensive because it's business is either extremely slow or potentially dying or reversing in a big, big way after years of growth and this started a dollar 22 and 2018 and then $3.48 last year so pretty consistent growth increasing

[SPEAKER_00]: Since 2018, but once again, next year we'll be the first year where earnings are expected to fall to percent and any business that has low to negative growth, it's going to trade at a low multiple.

[SPEAKER_00]: Bottom line, it's typically why you see companies like commodity companies struggle, struggle to trade high multiples because they tend to be very cyclical businesses.

[SPEAKER_00]: and markets don't pay up for cyclical businesses, businesses that are growing slow, et cetera.

[SPEAKER_00]: So that's what you want to look at, it gets its peers and what's going on.

[SPEAKER_00]: So it's main peer in Fremon, else, out there in Nobunortis, gets had a Denmark, their developer of insulin products, mainly, and there's pressure on that side of the business, but also they do have some GLP1 products, and there's pressure there as well.

[SPEAKER_00]: They're not the leader, and I think that Vili has those epic,

[SPEAKER_00]: Novan artist has something similar with this also pressure on those prices as well And that's really what you're seeing here is that revenue growth last quarter was still pretty solid 11% But earnings growth was negative 23% Okay, so a year ago revenue growth was in the mid 20s and now it's in the right around 10% and earnings growth is negative

[SPEAKER_00]: So this is the problem here.

[SPEAKER_00]: And ultimately, why we passed on it is because, yeah, look cheap on the surface once we did, Doug Deeper, it really didn't excited us.

[SPEAKER_00]: We didn't like the trends and earnings.

[SPEAKER_00]: And then you couple that with the momentum, the price chart is terrible.

[SPEAKER_00]: It's in a consistent downtrend and it's not getting above any major moving averages.

[SPEAKER_00]: And these are the type of names that you stay away from.

[SPEAKER_00]: You can keep it in your watch as you can watch, but you ultimately pass until there's progress, progress in the chart, progress in earnings growth trends, et cetera.

[SPEAKER_00]: Thanks for the call.

[SPEAKER_00]: Then we'll have a lot of ground to cover over the next 45 minutes, and I made focus point and it's about American supply chains, and are we seeing a renaissance, so we're going to dig into some details there and figure out whether or not the $1.7 billion that companies are planning to spend to bring manufacturing back is something that is sustainable.

[SPEAKER_00]: Okay, so we'll dig into that story.

[SPEAKER_00]: Also, BlackRock, they are seeing a lot of bad loans in the private credit markets, and there was an unprecedented maneuver or change from some of the advisors that sold these products, they're actually giving up their fees because things were that bad.

[SPEAKER_00]: So we'll dig into that story as well.

[SPEAKER_00]: In addition, mega mergers, you're starting to see some bigger ones recently, and some

[SPEAKER_00]: some rumors of some large mergers, but we're gonna look at history and show whether or not big mergers into large corporations typically makes sense or not.

[SPEAKER_00]: So we'll dig into that.

[SPEAKER_00]: And then if we have time, what's there about?

[SPEAKER_00]: What energy traders are thinking when it comes to the AI data center demand build out.

[SPEAKER_00]: guys because they have an inside view of that industry and ultimately you want to stand up and listen when they speak so we'll dig into that story as well.

[SPEAKER_00]: Those are the things that are on the docket for me.

[SPEAKER_00]: We have voice bank questions, one is on safe haven investments, and as well as Rio Tinto.

[SPEAKER_00]: Then you have some questions that came in via the comment section over on the invest talk YouTube channels.

[SPEAKER_00]: Well, of course, most importantly, we're going to be your live call.

[SPEAKER_00]: So don't hesitate to reach out to me right now, eight a day, nine, nine, and chart.

[SPEAKER_00]: Now, let's move to a break.

[SPEAKER_00]: Let me tell you about a special opportunity for you.

[SPEAKER_00]: I'm being in by.

[SPEAKER_00]: Posing an important question for all you investors, what's the one gift that truly gives peace of mind and the simple answer is security for your family.

[SPEAKER_00]: That's why I want to highlight the KPP financial holiday state bundle you come a client by year end you will get a real interest.

[SPEAKER_00]: Created for you by trustandwill.com so it's our special gift to you for joining by your hand.

[SPEAKER_00]: The phone lines are open, for you right now.

[SPEAKER_00]: So give me a call at 88899 chart.

[SPEAKER_01]: Are you worried about what your tax bill will look like this year?

[SPEAKER_01]: As we head into the final weeks of 2025, now is a good time to get proactive.

[SPEAKER_01]: And you can do that by joining Justin Klein and Luke Guerrero for the upcoming Invest Talk.

[SPEAKER_01]: Wealth Webinar

[SPEAKER_01]: Year-end tax toolkit, RMD planning, tax laws harvesting, and deferral strategies.

[SPEAKER_01]: This hour-long session is your chance to get their expert insights on navigating the complexities of year-end tax planning.

[SPEAKER_01]: Just an in-loop will cover everything, from managing those mandatory RMDs to using tax laws harvesting to offset gains to effective income deferral techniques.

[SPEAKER_01]: Mark your calendar for Tuesday, December 9th from 11am to 12pm Pacific Time.

[SPEAKER_01]: The wealth webinar is free, but you must pre-register at investalk.com.

[SPEAKER_01]: Hurry, December 9th is coming up fast.

[SPEAKER_01]: The official numbers are in now with 62 million downloads in Vestark.

[SPEAKER_01]: Listen live or download the free podcast.

[SPEAKER_01]: Call anytime 88899 chart.

[SPEAKER_00]: Let's go take a look at the market today.

[SPEAKER_00]: It was a modest down day, overall.

[SPEAKER_00]: Here, let me get the full data.

[SPEAKER_00]: We had some jobless claims that came in lower than expected.

[SPEAKER_00]: I'll be interested to see if that holds.

[SPEAKER_00]: They were much lower than expected could be just kind of year-end.

[SPEAKER_00]: Maybe people don't want to lay off.

[SPEAKER_00]: people in the holidays or whatever, but ultimately that was the lowest level of the year, which kind of conflicts with other data that says layoffs are accelerating, especially when you look at things like US employers, not 71,000 job cuts in November.

[SPEAKER_00]: That's up 24% year every year, but down 53% from October.

[SPEAKER_00]: So a bit of a

[SPEAKER_00]: Improvement, year to date cuts a 1.1 million the highest since 2020.

[SPEAKER_00]: And so when you see initial claims coming in at 191,000 versus kind of average run 1,220,000 recently, it's a bit odd.

[SPEAKER_00]: But continuing claims barely ticked down as well, so you didn't really see.

[SPEAKER_00]: many people getting off the unemployment lines either, so not a lot of hiring going on as well.

[SPEAKER_00]: So kind of a mix bag in the labor market, but overall, I still remain steadfast.

[SPEAKER_00]: The labor market is modestly weak.

[SPEAKER_00]: What else happened on the day?

[SPEAKER_00]: If you look at the broader indices, it was relatively flat S&P up 11 basis points, NASDAQ up 22, the Dow down a little bit, down about seven basis points.

[SPEAKER_00]: Really, I think the market's still waiting for those PCE numbers tomorrow to really get a good gauge of,

[SPEAKER_00]: inflation and how the Fed is going to view it as they head into their decision next week on Wednesday.

[SPEAKER_00]: So we are less than a week now from the Fed decision on Wednesday.

[SPEAKER_00]: 80% chance the market is pricing in that they will cut rates one at a time.

[SPEAKER_00]: Or some big losers, or some gaining videos up 2% Apple down 1% and Google down a little bit.

[SPEAKER_00]: Microsoft that ate that again, meta up 3% on news that they were likely cutting some of their investment in the metaverse, so maybe they're going to change their name back to Facebook, or maybe Instagram, who knows, but ultimately that's clearly not a big focus for them, and I don't think the consumer is wanting that product either.

[SPEAKER_00]: virtual reality or the metaverse is cool for a short period of time, but how many people really want to live in the metaverse over any extended period of time?

[SPEAKER_00]: So clearly the market liked that misallocation of capital, and that shows you the market will reward you when you allocate capital correctly.

[SPEAKER_00]: And they will punish you when you don't.

[SPEAKER_00]: And I, you know, I remember meta had that big drop after they changed my name and they invested a bunch.

[SPEAKER_00]: $380 per share back in 2021 to a low of $91 per share.

[SPEAKER_00]: So pretty drastic drop.

[SPEAKER_00]: And then they kind of pivoted back to traditional business AI and things got better from there.

[SPEAKER_00]: So they continue to pivot away from it and the market certainly liked that.

[SPEAKER_00]: But once again, it's really going to be about the economic news that comes out tomorrow and how that feeds into

[SPEAKER_00]: the expectations for Fed policy, not just in this upcoming meeting, but beyond, okay?

[SPEAKER_00]: So look for that as well.

[SPEAKER_00]: 8899 chart, 8892, 4278.

[SPEAKER_00]: So I get to ask your question on today's show, and we were two questions that came in view.

[SPEAKER_00]: comment section over the YouTube are in best talk YouTube channel.

[SPEAKER_00]: So S.S. J. Ballers has congrats on 10,000 subs.

[SPEAKER_00]: Thank you so much.

[SPEAKER_00]: And I get your thoughts on STRL sterling infrastructure on this pullback.

[SPEAKER_00]: Okay, sterling infrastructure.

[SPEAKER_00]: S-T-L-R is the symbol, and I definitely had a call or ask a question about this recently.

[SPEAKER_00]: They provide E infrastructure, building construction, transportation solutions, and related services.

[SPEAKER_00]: Obviously, booming because of AI data infrastructure, build out.

[SPEAKER_00]: Uh, I'm still, I, I still hasn't to pay high multiples for these type of names because I do think ultimately you're going to see a slow down in this space.

[SPEAKER_00]: I still think there's a lot of opportunity, but I think this recent weakness is, uh, it could be the start of something bigger.

[SPEAKER_00]: I do think we're going to broader, I'll say, and I bust, but a,

[SPEAKER_00]: re-rating of okay what is this AI investment really get us as an investor is this something that makes sense is there positive economic value being created that is something that I think the market's going to in the new year start to come to some realization about and you're going to see I think a broader correction these type of names so I would keep it on watchlist but I would certainly pass on it for now.

[SPEAKER_00]: Then we're heading to a break.

[SPEAKER_00]: I'm ready for your calls now.

[SPEAKER_00]: It did it.

[SPEAKER_00]: I knew that.

[SPEAKER_01]: For the holiday's KPP Financial is excited to introduce the holiday estate bundle.

[SPEAKER_01]: When you begin a financial relationship with KPP Financial, and complete your onboarding by December 31, 2025, you'll receive essential estate planning documents as an added benefit.

[SPEAKER_01]: Learn more about the holiday estate bundle now at investtalk.com, and while you're there,

[SPEAKER_04]: Hi, my name is Joe from Greenhill, South Carolina.

[SPEAKER_04]: I have a question that's a little bit more macro, just as our currency as a country has gotten into this beyond currency with no real backing, it seems like the Fed and the government when they don't feel like they can raise taxes, just print the money, which is ultimately devaluing our currency over time, and there doesn't seem to be any indication that they're

[SPEAKER_04]: they're like, like, going to do that more and more into the future, what do you think a good safe havens for that would be in the long term?

[SPEAKER_04]: I'm in my 30s and just, I guess, somewhat worried about somewhat bigger collapse of the system, just the value of the dollar in general.

[SPEAKER_04]: Is stocks a good place to be in the event of something like that happening?

[SPEAKER_04]: Is gold and silver a good place to be in

[SPEAKER_04]: like that happening is land a good thing to be in in the event of something like that happening I'm just trying to wonder trying to figure out a plan I guess for something like that were to happen because it seems like our currency is just too valued year after year and I just don't see any.

[SPEAKER_04]: change in that coming.

[SPEAKER_00]: Thanks so much for your answer on the podcast.

[SPEAKER_00]: This is this is the winner of Best Question of 2025 because if this is the framing every single investor out there should be thinking about.

[SPEAKER_00]: Not, oh, I'm just going to index, right?

[SPEAKER_00]: That's not the new world, the new world is this with this college just asked about.

[SPEAKER_00]: Yes, absolutely.

[SPEAKER_00]: The politicians, on both sides of the aisle, and you can see it right now, right?

[SPEAKER_00]: The Trump ran on Doge and cutting spending.

[SPEAKER_00]: He cut like $7 billion, $9 billion, nothing.

[SPEAKER_00]: So there's nothing stops this train, okay?

[SPEAKER_00]: Nothing stops this train.

[SPEAKER_00]: So Lynn Alden saying, and I love, and you're right.

[SPEAKER_00]: So you have to think about it differently.

[SPEAKER_00]: Now is Golden Silver part of it?

[SPEAKER_00]: Yes, absolutely.

[SPEAKER_00]: Everybody, everybody have been saying this for years now, because

[SPEAKER_00]: I've seen this, you know, you, you can talk about, oh, how you want the world to be.

[SPEAKER_00]: And I talk about this all the time, you, you never invest how you want the world to be.

[SPEAKER_00]: You have to invest based on how the world is.

[SPEAKER_00]: And you're identifying it that this is a train that does not stop and will not stop.

[SPEAKER_00]: And so you have to adjust your portfolio accordingly.

[SPEAKER_00]: So number one, yes, go and silver.

[SPEAKER_00]: Number two, harder assets are our stocks a good place.

[SPEAKER_00]: They tend to be a good place to

[SPEAKER_00]: harder assets tend to do better in inflationary environments and those are can be companies that hold an own harder assets.

[SPEAKER_00]: Okay, they tend to not be growthier type of businesses either.

[SPEAKER_00]: They tend to be more valuable.

[SPEAKER_00]: That's how tends to work.

[SPEAKER_00]: You know, depends on the year and it's not a straight line, but this is the new era that you are operating in.

[SPEAKER_00]: I typically don't want to be in

[SPEAKER_00]: super low risk investments, you know, most people are still scarred by O.A.

[SPEAKER_00]: and everyone fights the last war.

[SPEAKER_00]: Remember the generals fight the last war?

[SPEAKER_00]: Most people are fighting O.A.

[SPEAKER_00]: because that's the real big war.

[SPEAKER_00]: Yeah, we had COVID and all that.

[SPEAKER_00]: But still, that's fresh and a lot of people's might, even though it's nearly two decades ago.

[SPEAKER_00]: Now, and that it shows you that the risk in this market is not deflation.

[SPEAKER_00]: That's what OA was.

[SPEAKER_00]: The deflationary impulse, we are seeing that the risk to the, as to the upside, they're just inflation and inflationary impulse.

[SPEAKER_00]: And remember, markets are not priced in real terms, meaning subtracting out inflation.

[SPEAKER_00]: They're priced nominally.

[SPEAKER_00]: So, I think it was worth from 1962 to 1982.

[SPEAKER_00]: Equity markers are up, but in real terms, your return was zero, because you checked out inflation and you kept up with person power.

[SPEAKER_00]: And so I think there's probably a period of the next 20, 30 years, an extended period where you're going to see that, where if you just bet investing the S&P, your real return is going to be zero, maybe even negative.

[SPEAKER_00]: Okay, so, yes, you have to rethink your portfolio strategy.

[SPEAKER_00]: That's what we do for our clients at KDP.

[SPEAKER_00]: And that's what we really, really speak about and adjust our portfolios accordingly.

[SPEAKER_00]: So, hope that helps.

[SPEAKER_00]: There's a lot more I can go in debt probably hours for this, but I want to move on to our next caller, Dave and Ohio.

[SPEAKER_00]: I want to talk about Dow, DOW.

[SPEAKER_06]: Hi, thanks for taking my call.

[SPEAKER_06]: Yeah, I'm here.

[SPEAKER_06]: Hello.

[SPEAKER_06]: Yeah.

[SPEAKER_06]: Oh, your thoughts on dial chemical.

[SPEAKER_06]: I know the technicals are horrible, but you see a possible turn around in the next year or two for dial chemical.

[SPEAKER_00]: What's making you right.

[SPEAKER_00]: What.

[SPEAKER_00]: Okay.

[SPEAKER_00]: So you said the technicals are horrible.

[SPEAKER_00]: What is it about doubt that making you think that this would potentially be a buy.

[SPEAKER_06]: It's about almost at the 52 week low.

[SPEAKER_00]: I think the thing or a bad thing.

[SPEAKER_06]: I did a tax loss harvest on it.

[SPEAKER_06]: Yeah.

[SPEAKER_06]: And after the 30 days, I'll think about the fight back for the dividend.

[SPEAKER_00]: Okay, so you lost money on it and you want to, so you want to, you want to buy it for the dividend.

[SPEAKER_00]: Oh, okay, this is the perfect example of something.

[SPEAKER_00]: The way you're thinking about this is completely wrong.

[SPEAKER_00]: You need to take whatever, whatever you did to get to this, focusing on Dow Chemical, take it out and throw it in the garbage.

[SPEAKER_00]: Because this is whatever thought process you had,

[SPEAKER_00]: needs to go away because this is the exact opposite of what you want to do.

[SPEAKER_00]: You tax our server for a reason you lost money for a reason because they have a ton of debt that's just to lose money this year and next year just because it's a big name and it pays a big dividend does not mean it's a good investment.

[SPEAKER_00]: This is a horrible investment.

[SPEAKER_00]: Do not touch this move on to another name.

[SPEAKER_00]: We're heading to a break.

[SPEAKER_00]: You may call it out like eight a day and you're not sure.

[SPEAKER_01]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

[SPEAKER_01]: Now the torch has been passed, and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.

[SPEAKER_01]: So when you've got finance and investment questions, don't forget to call in Vestock.

[SPEAKER_01]: 888-99-Chart.

[SPEAKER_00]: $1.7 trillion.

[SPEAKER_00]: That's how much American companies have committed to bringing manufacturing back to US soil.

[SPEAKER_00]: This isn't about politics either.

[SPEAKER_00]: Something fundamental has changed in the math of the global supply chains.

[SPEAKER_00]: Today, we're breaking down why speed and proximity are suddenly beating cheap overseas labor.

[SPEAKER_00]: Just not a lot of people were talking about.

[SPEAKER_00]: Maybe it's a political divide now.

[SPEAKER_00]: I'm the first to say, when I make investment decisions, I throw out any politics.

[SPEAKER_00]: I'm personally politically personally.

[SPEAKER_00]: I'm very much in the middle.

[SPEAKER_00]: But the Trump administration has made the revival of US manufacturing a strategic objective.

[SPEAKER_00]: And to be fair, it started.

[SPEAKER_00]: This administration started many years ago, kind of post-COVID, and it was really about the pandemic that exposed the fragility of the global supply chains.

[SPEAKER_00]: And the old model, which was let's just go find the cheapest labor we can throughout the world and we'll just ship it back to America.

[SPEAKER_00]: It's no longer viable.

[SPEAKER_00]: because customers don't want delays.

[SPEAKER_00]: And it exposed the fragility of most companies' supply chains, that were very rigid.

[SPEAKER_00]: And they were enable to be flexible in times of geopolitical chaos.

[SPEAKER_00]: and that resulted in loss sales, lost market share, and ultimately lower profits.

[SPEAKER_00]: So right now, manufacturing and construction are at historic levels.

[SPEAKER_00]: Spending on US factory construction has searched, reaching $223 billion, seasonally adjusted, as of July of this year.

[SPEAKER_00]: It's clear that businesses,

[SPEAKER_00]: are seeing this and they're making investments in the United States.

[SPEAKER_00]: But the one question is, in what ways is it just, we're just setting up factories and the answer is, no, not really.

[SPEAKER_00]: And now it is bringing in jobs.

[SPEAKER_00]: The nonprofit reshoring initiative, they were part of the 244,000 jobs were announced last year tied to some sort of reshoring or foreign direct investment.

[SPEAKER_00]: So that's a good thing.

[SPEAKER_00]: And you've had big announcements from companies like

[SPEAKER_00]: TSMC, Nvidia, etc.

[SPEAKER_00]: Now, some of that's been this year, some of it's been last year, but it's clear that many companies are thinking about adding capabilities here in the United States.

[SPEAKER_00]: Now, 10 years ago, domestic production was about too much cost.

[SPEAKER_00]: Okay, but in the world of AI and technology, suddenly it can become an advantage if you do it right.

[SPEAKER_00]: And so number one, the number one way that companies are bringing manufacturing back automation and robotics.

[SPEAKER_00]: So this is a secular theme.

[SPEAKER_00]: This is another theme that we have in our portfolios, the KP financial, which is,

[SPEAKER_00]: Robotics, what are the companies that will benefit the most from this?

[SPEAKER_00]: So think about that when you're building your portfolio.

[SPEAKER_00]: And then visibility, think of RFID chips another area that we've leaned into as well to make sure that inventories are tracked more efficiently, the leaner, and you're not sacrificing any controls.

[SPEAKER_00]: Okay.

[SPEAKER_00]: Now, Deloitte's 2025 Smart Manufacturing Research

[SPEAKER_00]: really leaning into the technology side to mitigate operational risks and obviously labor scarcity because labor costs here are high.

[SPEAKER_00]: So what is that overall new playbook for those that are building out a supply chain that is US based?

[SPEAKER_00]: Well, number one is having flexibility, be regional demand to meet regional demand.

[SPEAKER_00]: So you don't just have your inventory in one place, it's spread out, and it can be moved easily.

[SPEAKER_00]: And you all layer on software, once again, that's using AI that can be configured when disruptions occur.

[SPEAKER_00]: which naturally they do, right?

[SPEAKER_00]: And that's what COVID kind of showed.

[SPEAKER_00]: Because customers no matter what happens, they still want quick delivery.

[SPEAKER_00]: They want inventory to turn over and come in fast.

[SPEAKER_00]: So this is another aspect of the inflationary environment that we are in that most people are underappreciating that this is a trend that is raising costs.

[SPEAKER_00]: You know, trying to go into the world trade organization in the, what yours that is in the late 90s if I'm right correctly.

[SPEAKER_00]: And ever since then, you have that deflationary environment.

[SPEAKER_00]: But since COVID, we're now in inflationary environments.

[SPEAKER_00]: Why?

[SPEAKER_00]: Because companies don't know longer just relying on their China resources and manufacturing.

[SPEAKER_00]: So let's get the using automation to offset labor costs.

[SPEAKER_00]: That's part of the playbook.

[SPEAKER_00]: Their designing optionality into their systems.

[SPEAKER_00]: Flexibility is now far more important.

[SPEAKER_00]: And partners that they're working with need to be adaptable.

[SPEAKER_00]: So it's not just about who can provide the cheapest service as part of the particular supply chain.

[SPEAKER_00]: It's about which ones can offer the most adaptability.

[SPEAKER_00]: And then also, future proofing against changes in policy.

[SPEAKER_00]: Why?

[SPEAKER_00]: Because you've seen that with tariffs.

[SPEAKER_00]: 100% tariffs one day, next week is 30%, then it's 60, it's all over the place.

[SPEAKER_00]: And so you need to be flexible and reroute production.

[SPEAKER_00]: So it's not about just I'm going to have all my manufacturing in China.

[SPEAKER_00]: I'm going to have some other parts of Asia, maybe you're in Eastern Europe, maybe even back here in America.

[SPEAKER_00]: So it's not just about US manufacturing or US logistics.

[SPEAKER_00]: It's still global, but it's about diversification and creating that flexibility within its system.

[SPEAKER_00]: So that is the huge factor that people are under appreciating and what the changes, and the changes that are happening underneath the surface in the business community.

[SPEAKER_00]: And so when you look at your portfolios, these are things that you need to adjust for.

[SPEAKER_00]: You need to consider these secular changes and how that impacts the portfolio.

[SPEAKER_00]: So that inflation is not just

[SPEAKER_00]: that inflationary environment, longer duration assets tend to not do so well when inflation is rising when insurance are rising, etc.

[SPEAKER_00]: So in a world where speed winds, not just about the lowest cost anymore, you need to step back and think about your portfolio, how that impacts the entire economy, a different sectors,

[SPEAKER_00]: There's new math behind all of this, right?

[SPEAKER_00]: AI is just a bunch of math behind the scenes.

[SPEAKER_00]: And ultimately, that starts to apply on the real world on the ground in supply chains, but also does reflect back on markets as well.

[SPEAKER_00]: Those are the back to the investment I've always been for a question that came in earlier.

[SPEAKER_00]: I ate it at 99 chart.

[SPEAKER_05]: Good day, Justin.

[SPEAKER_05]: Luke, Chuck, I'm Clayton.

[SPEAKER_05]: Hey, was listening to the 123 show and Luke was getting into the copper.

[SPEAKER_05]: And I found a big interested in starting some research.

[SPEAKER_05]: My portfolio has a Google mix of silver and gold, but I really don't have copper.

[SPEAKER_05]: So I was looking for something a little bit diversified, but stronghold in copper.

[SPEAKER_05]: And I ran across Rio Tento Group, R-I-O.

[SPEAKER_05]: Not on it, entry point.

[SPEAKER_05]: What do you guys think?

[SPEAKER_05]: Love to hear your analysis.

[SPEAKER_05]: And thank you again for all you do.

[SPEAKER_00]: Excuse me.

[SPEAKER_00]: Okay, so looking at Rio Tinto, let's take a look at their business.

[SPEAKER_00]: Now, here is the issue.

[SPEAKER_00]: And this is the issue with a lot of commodity names, not just Rio Tinto, especially the large commodity names, is that they don't just have one.

[SPEAKER_00]: Remember, these commodity names that have been around for decades, they've gone through different cycles.

[SPEAKER_00]: And oftentimes they realize, you know, up to the whims of what's going

[SPEAKER_00]: There's not a lot of, you know, they can not let they can do to increase their margins, you know, it's whatever the price of that underlying commodity goes for in the marketplace.

[SPEAKER_00]: And that's why throughout the years, oftentimes they'll take profits a time.

[SPEAKER_00]: So good and they'll reinvest in other types of commodities.

[SPEAKER_00]: Now Rio Tinto right now, 51% of the revenue is iron ore. 24% of the revenue is aluminum.

[SPEAKER_00]: Now, this is going up because not iron ore, clearly, it's actually aluminum copper.

[SPEAKER_00]: So that's what you're getting here.

[SPEAKER_00]: So this isn't really a copper plate.

[SPEAKER_00]: This is a iron ore plate with some aluminum copper.

[SPEAKER_00]: Now, I like those, the second two, like iron ore, because historically, there's been a huge capacity expansion for iron ore and fragment out there.

[SPEAKER_00]: Iron ore is used.

[SPEAKER_00]: excuse me, to make steel.

[SPEAKER_00]: And over the past 20 30 years, these companies or these, the demand for, for iron ore has been China.

[SPEAKER_00]: And China is no longer building real estate like they used to.

[SPEAKER_00]: They kind of started.

[SPEAKER_00]: Everyone told them to stop building bridges to nowhere and apartments people people didn't need.

[SPEAKER_00]: And they kind of have, which kind of good for China.

[SPEAKER_00]: But bad for iron ore demand.

[SPEAKER_00]: Now, what I will say is that earnings is still relatively cheap, earnings is here, so it'll be 629, 674 next year.

[SPEAKER_00]: It's a $73 stock.

[SPEAKER_00]: It's already ran, it's 81 relative strength, so it's had a nice little run.

[SPEAKER_00]: And I like broader exposure to commodities.

[SPEAKER_00]: If I'm trying to get exposure to copper, this isn't the name I want to own.

[SPEAKER_00]: It's only what I say, 14%.

[SPEAKER_00]: Over the overall revenue, 16%.

[SPEAKER_00]: Sorry.

[SPEAKER_00]: Not much.

[SPEAKER_00]: I want to hear play a company.

[SPEAKER_00]: So that's kind of the long and short here.

[SPEAKER_00]: It's a fine business.

[SPEAKER_00]: Do I hate it?

[SPEAKER_00]: No, I like kind of the rest of the business.

[SPEAKER_00]: I like a aluminum.

[SPEAKER_00]: I like copper, but I don't like, I don't know.

[SPEAKER_00]: So I'd be looking for a different name to gain that exposure.

[SPEAKER_00]: That was in best stock.

[SPEAKER_00]: Our work continues.

[SPEAKER_00]: So hang on.

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[SPEAKER_01]: And now the phone lines are open and waiting for your finance and investment questions 888-99 chart

[SPEAKER_00]: It hit 99 chart, it hit 99 to four to seven days.

[SPEAKER_00]: I get through and ask your question on today's show.

[SPEAKER_00]: Now, let's talk a little bit about the troubled loan market or the private credit market.

[SPEAKER_00]: And this is coming from BlackRock.

[SPEAKER_00]: This is the second time.

[SPEAKER_00]: You've had a major issue with some of their private funds.

[SPEAKER_00]: Remember, I believe it was last year.

[SPEAKER_00]: Remember, the B-Read for their private,

[SPEAKER_00]: money, gate redemptions and it basically say you can have your money back.

[SPEAKER_00]: Well, some of the private loans also known as collateralized loan obligations are falling in value and to the level where some of their riskier

[SPEAKER_00]: And if you, if you ever watched the, what was it, um, the big, was the big short, yeah, the big short.

[SPEAKER_00]: And they talked about that was, uh, CDOs, quadrised data obligations.

[SPEAKER_00]: These are very similar, where you take a bunch of loans, you chop them up.

[SPEAKER_00]: They've done the exact same thing.

[SPEAKER_00]: They said, okay, these, these ones are triple A, because these ones are getting all of the money.

[SPEAKER_00]: They're going to, uh, yield the least, but then you can invest in the lowest tranches or different tranches that are going to

[SPEAKER_00]: increasing the higher yields, but if there are losses, those lower chances start to take some of the brunt, and that's what you are starting to see here, that's what happened in October and BlackRock has declined to comment.

[SPEAKER_00]: So this is, I think, kind of the start.

[SPEAKER_00]: Okay, and there's many, there's a slew of companies that are in trouble.

[SPEAKER_00]: One of those is called Renovah home partners.

[SPEAKER_00]: They fell for bankruptcy earlier in November.

[SPEAKER_00]: And they revised the value of the of the debt to zero.

[SPEAKER_00]: And this is a home improvement company.

[SPEAKER_00]: And they deemed it worth 100 cents on the dollar just weeks before.

[SPEAKER_00]: And now it's worth zero.

[SPEAKER_00]: Another name, educational software provider, plurals, plural site.

[SPEAKER_00]: They took ownership just last year.

[SPEAKER_00]: Now they're filed for bankruptcy.

[SPEAKER_00]: They also have a comical astra acquisition.

[SPEAKER_00]: They filed for bankruptcy in September.

[SPEAKER_00]: So you're starting to see the slew of bankruptcies.

[SPEAKER_00]: And this is why I say, if anyone owns these type of investments, you need to be finding ways out before you're gated.

[SPEAKER_00]: And why what's interesting here is, this is where the bad lending happened over this cycle.

[SPEAKER_00]: It isn't in the public credit markets.

[SPEAKER_00]: Talking about, you know, you're high yield debt markets.

[SPEAKER_00]: Not to say that there aren't going to be bankruptcies there.

[SPEAKER_00]: I'm saying is that the size of that market, your public credit markets, that have dead outstanding, right bonds outstanding in the corporate market that you might own in some sort of an ETF or some sort of high yield credit fund.

[SPEAKER_00]: The bad landing there wasn't nearly that bad because it all moved to this private credit space and you're starting to see some of these blow up.

[SPEAKER_00]: And I do think there can be contagion especially as we head into next year.

[SPEAKER_00]: Now we're heading to a break, so give me a call now and I'll edit it and you'll answer it.

[SPEAKER_01]: 24-7, Rainer Shine, there's always value in the Invest Talk podcast.

[SPEAKER_01]: 888-99, chart.

[SPEAKER_08]: Hey, Justin, I'm Luke.

[SPEAKER_08]: This is Miami, I and DC.

[SPEAKER_08]: And I wanted to see if you all could go into just a sort of take on the crowd funding investment platforms, like start engine.

[SPEAKER_08]: Those are mothers.

[SPEAKER_08]: I think start engine may have consolidated or absorbed mother's sights.

[SPEAKER_08]: But just talk about the opportunities there, potential pitfalls.

[SPEAKER_08]: I wasn't sure if that should be looked at as like a new net type of, you know, a real estate platform.

[SPEAKER_08]: We're some, we're going to see investors say he bad deal with a fine-life, a bad deal with a fine-life, a bad deal with a fine-life.

[SPEAKER_08]: But if you talk a little bit about starting engine and other crowdfunding investing platforms, that would be great just to get you to take on it, see if there's actually any real opportunity or if there's something we should be aware of as investors.

[SPEAKER_08]: appreciate all you got to do in a long time this year if you spoke on this subject before fun jazz for the net catch in episode.

[SPEAKER_00]: Well, let's start off with you know there are a lot of real estate platforms out there that come up throughout the years remember some of the names but those have not done particularly well you know they're just private reads and you talk about be read earlier and

[SPEAKER_00]: you know, if you want to invest in a reach just by public market reach, there's no reason to go in the private markets.

[SPEAKER_00]: Now, start engine is more about investing in small businesses, venture capital money, et cetera.

[SPEAKER_00]: it's on its cover of it.

[SPEAKER_00]: I've never actually heard of it.

[SPEAKER_00]: So I don't have a lot to tell you about it in particular.

[SPEAKER_00]: What I will say is Kevin O'Leary's on the front and that's always a red flag to me.

[SPEAKER_00]: I think he's I would do the opposite of anything Kevin O'Leary pretty much says.

[SPEAKER_00]: Mr. Not Wonderful in my mind.

[SPEAKER_00]: But you know, start engine, it looks like it's the one to get a private investing platform and you know, I've made, I made some private investments in my life and the ones that have worked out were because of not the idea.

[SPEAKER_00]: that the idea was great and you know it was not saying it wasn't great but it's really about the person and the leaders and you know that's my issue with these private investments is how much are you really knowing about the people behind the business.

[SPEAKER_00]: It gave me the greatest idea of the in the world but execution is everything.

[SPEAKER_00]: Any any person in business will tell you that

[SPEAKER_00]: that it's all about execution, everything's about execution.

[SPEAKER_00]: Everybody has million ideas and and they can all be great, but it does not matter unless you can execute.

[SPEAKER_00]: And so how do you vet these people to know that these are people that will execute?

[SPEAKER_00]: I find that very difficult.

[SPEAKER_00]: So, I would never invest my money through something like this because I would want to know who I'm

[SPEAKER_07]: Hey, Justin and Luke, long time first time.

[SPEAKER_07]: This is Clark from San Mateo.

[SPEAKER_07]: I have a question about ticker TTI, Tetra Technologies.

[SPEAKER_07]: What's pretty good to me?

[SPEAKER_07]: I've been holding it for a little while, but when we get some feedback, just because it's had a bit of a run up here.

[SPEAKER_07]: And most of the numbers looked good to me, so it was a little bit of debt, but other than that, I'm seeing most of the good sides curious if maybe I should even add to the position.

[SPEAKER_07]: Thanks for everything.

[SPEAKER_00]: are looking at tetra-technologies there in the oil service business okay they provide completion fluids production testing and well-head compression.

[SPEAKER_00]: This is on a tear, I do like the oil service industry in general, especially anything that is around getting more natural gas out of the ground because I am more bullish on the demand for that and I think that's why you're seeing

[SPEAKER_00]: But it will say is that this is a very cyclical type of business.

[SPEAKER_00]: Okay, oil prices come back down and you see oil companies pull back their development.

[SPEAKER_00]: Well, Tetra is going to field the pain there.

[SPEAKER_00]: But right now, the trends are good.

[SPEAKER_00]: I'd want to know what percentage of the portfolio it is right now, and to tell you as well as your overall exposure to oil and gas and natural gas, or particularly, before I'd say add to it, right now I'd probably just hold it and have a stop on it because, you know, like I said, these businesses are very cyclical.

[SPEAKER_00]: So keep the trend.

[SPEAKER_00]: It's a good business with good.

[SPEAKER_00]: profitability, good balance sheet right now in an industry that is still getting strong investment.

[SPEAKER_00]: So it's a hold for now, but be ready to trim it in time and potentially get out if the trend changes.

[SPEAKER_00]: Well, that does it.

[SPEAKER_00]: I'm Justin Klein.

[SPEAKER_00]: If they showed me to think about your own financial picture in any way your broader financial plan, your investment strategy, considering that earlier color, color of the year, love that.

[SPEAKER_00]: Uh, I encourage you to head over to InvestTalk.com and schedule a portfolio review with myself or Luke, and you can get your podcasts anytime that iTunes Spotify Google Play.

[SPEAKER_00]: Be sure to rate and review on iTunes as well, and our newest InvestTalk wealth webinar is set for Tuesday, December 9th, just five days from today, happening online, and it's free which due to the redster at investtalk.com.

[SPEAKER_00]: Independent thinking.

[SPEAKER_00]: Shit success.

[SPEAKER_00]: It's the best talk.

[SPEAKER_00]: Good night.

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