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[SPEAKER_05]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk, independent thinking, shared success.

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[SPEAKER_05]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

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[SPEAKER_05]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

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[SPEAKER_04]: Good afternoon fellow investors and welcome back to Invest Talk.

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[SPEAKER_04]: This is our Wednesday, Wednesday, December 17th, 2025 edition.

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[SPEAKER_04]: And we are hurling toward the end of the year.

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[SPEAKER_04]: A little over a week left in Christmas.

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[SPEAKER_04]: Hope everyone has done their holiday shopping.

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[SPEAKER_04]: I have a little more to do, but I've done most of it, which is.

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[SPEAKER_04]: Feels pretty good.

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[SPEAKER_04]: But.

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[SPEAKER_04]: Ultimately, this show isn't about me, this show is about you, this hour is about is dedicated to helping become a better investor and we do that mainly by answering your finance and investment questions, bringing you data perspective with over 25 years of investment experience.

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[SPEAKER_04]: And that's our job here.

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[SPEAKER_04]: I'm Justin Klein and this is what Luke and I do each and every week day here on Invest Talk.

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[SPEAKER_04]: So we are ready for you.

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[SPEAKER_04]: Whatever you have, throw it at us.

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[SPEAKER_04]: And just a quick reminder before we move on, we do have the

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[SPEAKER_04]: Investing at Quality Special, dropping tomorrow, and it will be exclusively on our YouTube channel.

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[SPEAKER_04]: So, can be a fun end of the episode where we look back at the biggest market themes of 2025.

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[SPEAKER_04]: Highlight a few lessons, we'll carry in to next year, and choose the caller question of the year, as well, plus a couple of other surprises that you won't get in our regular format as well.

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[SPEAKER_04]: So, watch the Investing at Quality Special by heading over to YouTube,

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[SPEAKER_04]: is your search in best talk with two T's.

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[SPEAKER_04]: And you'll get that sometime tomorrow.

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[SPEAKER_04]: Now, just a bit, we'll talk about today's market performance and run down the show topics for the hour.

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[SPEAKER_04]: But first, let's tackle this call a question now.

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[SPEAKER_07]: Hey, it's Andrew from Atlanta.

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[SPEAKER_07]: Got a question for Justin or Luke.

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[SPEAKER_07]: I'll call in about CF industries brought up my position to 3%.

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[SPEAKER_07]: How's it looking going forward?

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[SPEAKER_07]: Hope you have a good day.

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[SPEAKER_07]: I appreciate you.

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[SPEAKER_07]: Bye.

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[SPEAKER_04]: All right, looking at C, F, Industries, and this name we used to own for clients, not anymore, but if you are looking for exposure in the ag space in the fertilizer space, this is the name for you.

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[SPEAKER_04]: Why?

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[SPEAKER_04]: Because they make nitrogen fertilizer and they produce it domestically here in the

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[SPEAKER_04]: world and so in some ways it is a arbitrage between what natural gas prices are broad versus what it is domestically.

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[SPEAKER_04]: Now one of the reasons why this has come down recently is because natural gas prices have gone up.

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[SPEAKER_04]: So that's my biggest problem with the space right now is that the input costs are being pressured by the demand for AI.

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[SPEAKER_04]: So you can see how this is impacting other industries.

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[SPEAKER_04]: And that's why CF is falling from 104, just back in June, and now it's at $79 per share.

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[SPEAKER_04]: So it's in a downtrend that,

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[SPEAKER_04]: is clear earnings are expected to be up 30% this year once full year earnings are announced in Q4, but next year earnings are expected to drop down 19%, though that's the broader issue

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[SPEAKER_04]: This is seeing at the client earnings next year once again the impact costs as I said this is that's really how this is played and and when we got bullish on actual gas That's what we said, you know what see if it isn't really the name for us any more and we've done remember you have to be choosing with your capital So we did that so not a bad company still profitable.

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[SPEAKER_04]: It looks cheap

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[SPEAKER_04]: because you're looking at a multiple around 10 times earnings, you go based on four looking earnings, it's closer to 11.

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[SPEAKER_04]: Still looks cheap on its surface, but remember, all commodity producers, almost all commodity producers, trade at a pretty steep discount to the overall market, why because they are price takers, they are price takers.

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[SPEAKER_04]: They don't typically have an economic model.

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[SPEAKER_04]: This one has a little bit of one, once again, because if it's low cow,

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[SPEAKER_04]: close to and it produces, that's again, it can produce that fertilizer and export it, and it's kind of an hour arbitrage.

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[SPEAKER_04]: So of the nitrogen fertilizer companies, in general, I like it, but because of, because of Bullish on Natural Gas, I would stay away from it.

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[SPEAKER_04]: And it's in a downtrend.

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[SPEAKER_04]: So you don't want to be trying to catch that falling knife.

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[SPEAKER_04]: Now I've a lot of ground to cover over the next 45 minutes or so and time permitting.

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[SPEAKER_04]: We'll focus on as much as we possibly can.

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[SPEAKER_04]: Number one is the CR-E industry commercial real estate.

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[SPEAKER_04]: After a number of years post-COVID struggling,

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[SPEAKER_04]: You had a decent year in commercial real estate.

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[SPEAKER_04]: Now is that because suddenly prices got cheap enough or is in, and you had a little bounce, but it's not really gonna gain traction or can you have a true strong recovery in the space and what does that mean for the reach that you own, for example, or maybe your own companies that own a lot of commercial real estate in some way shape or form.

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[SPEAKER_04]: how will that likely evolve?

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[SPEAKER_04]: An industry likely evolved in 2026.

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[SPEAKER_04]: So we'll dig into that topic.

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[SPEAKER_04]: In addition, we're gonna look at cash levels, average cash holdings, in portfolios, dropped in December from November.

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[SPEAKER_04]: This is according to the Bank of America.

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[SPEAKER_04]: And how does this stack up historically?

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[SPEAKER_04]: And what might that mean for markets going forward?

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[SPEAKER_04]: So look at that.

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[SPEAKER_04]: Are we, are we in it now in many ways the answer is simply yes and what does that mean for portfolios and then lastly, if we have time

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[SPEAKER_04]: The demand for electricity is meeting the AI ambitions of companies and how are they solving that can they solve that energy demand issue?

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[SPEAKER_04]: So we'll dig into that story as well if we have time, we also have voice bank calls, one is on say for turns to say for routes to invest, excuse me, as well as excelous technologies ACLS.

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[SPEAKER_04]: We also have a couple of questions that were submitted over on it.

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[SPEAKER_04]: the invest stock YouTube channels.

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[SPEAKER_04]: Well, of course, I welcome your finance and investment questions right now.

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[SPEAKER_04]: But we're heading to a break and please remember you can call any time and leave your question on the invest stock voice bank and if you're listening via our live stream or possibly an aim to 20 in the Bay Area, you can call right now at 8 to 8 99 chart.

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[SPEAKER_04]: Hang on, because up next, I'll be talking about the day's market activity.

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[SPEAKER_06]: For the holiday's KPP Financial is excited to introduce a high-value limited time offer, the holiday estate bundle.

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[SPEAKER_06]: It's specifically designed to help new households quickly establish a solid foundation for their financial and personal legacies before the year ends.

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[SPEAKER_06]: 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 and it's all powered by our trusted partner, Truston Will.

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[SPEAKER_06]: Learn more about the holiday estate bundle now at investtalk.com and while you're there, fill out a portfolio review to get started.

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[SPEAKER_06]: And now the phone lines are open and waiting for your finance and investment questions 888-99 chart.

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[SPEAKER_06]: Here's a quick heads up and an invitation.

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[SPEAKER_06]: This year KPP Financial is doing something new.

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[SPEAKER_06]: The first ever in Vestalk holiday special.

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[SPEAKER_06]: The Investalk holiday special is free to watch and it drops tomorrow on YouTube.

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[SPEAKER_04]: Let's go take a look at a very interesting market today and it was a follow through and and this is started a couple months ago really October to be honest with you kind of end of October where the market really peaked out especially the NASDAQ and

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[SPEAKER_04]: The growth trade, the AI trade, started to lose its theme.

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[SPEAKER_04]: And I've talked about this, both on the show, on my weekend video, et cetera, that this is,

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[SPEAKER_04]: not changing.

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[SPEAKER_04]: Even though we got a bounce in the market from the lows in November, we are starting to see that roll over once again, and now we made a lower high, clearly on the ass that on the S&P, all the major indices, and it was really driven today in earnest by the big tech names, large crap, cap growth,

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[SPEAKER_04]: large crap, let's say, for audience slip there, large cab growth down 2% on the day, and really driven by invaded down 3.8% broad-con down 4.4 Tesla down about 4.5, you had pounds here down 5.5% Google down over three Microsoft was the only one that really hung in their flat Amazon down about a half

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[SPEAKER_04]: took a hit, names like GEver Nova, down 10, 10 and a half percent on the day.

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[SPEAKER_04]: So anything related to the AI infrastructure, I think that is, this is the message now.

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[SPEAKER_04]: These companies are going to pull back and really was driven by what was the news that that blue

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[SPEAKER_04]: they pull back on a data center project with Oracle in Michigan after kind of blocking at the economics of it, which once again is kind of the talk of the industry right now, and it's showing you that as these deals are scrutinized more and more, just the economics of AI currently do not work at these levels of investment.

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[SPEAKER_04]: It's blatantly obvious, it's patently absurd to say that they can spend hundreds of billions of dollars in continue to do this year after a year when they're only getting tens of billions of dollars in incremental revenue.

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[SPEAKER_04]: The numbers just do not pencil out, especially when the life of most of

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[SPEAKER_04]: what goes into these data centers is last three, four years, maybe five years, and they're still not a clear picture of how these AI companies are going to charge customers and actually get them to pony up, especially when, you know, it's easy to pop to a new one, and you know, right now, I think,

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[SPEAKER_04]: Google Gemini is clearly taking the lead out of all of them for the most part if you I use all of them and chat to you, but he's still pretty good, but Gemini, almost everything I throw at it, it handles much, much better.

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[SPEAKER_04]: And so, you know, and that's just today, who knows, you know, maybe open an eye can can bounce back, but clearly there's just going to be a lot of competition.

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[SPEAKER_04]: It's going to be very capital-intensive, and that change the dynamics of these businesses.

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[SPEAKER_04]: Even if they're profitable, even if they think you're out, you know, how this is all going to work in a profitable manner, are they going to be as profitable as they were before?

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[SPEAKER_04]: Almost not a chance, because these are turning into

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[SPEAKER_04]: very capital intensive businesses.

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[SPEAKER_04]: When currently they're very low capital intensive nature to their businesses, you know, servicing Microsoft 365 cloud subscriptions are not that hard.

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[SPEAKER_04]: You're storing bits in the skies.

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[SPEAKER_04]: There's not a lot of compute there.

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[SPEAKER_04]: And so this is what's happening in this industry and this

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[SPEAKER_04]: whole back in markets is I think now cemented after today big volume big news uh... and i think there's more more to come and and other names start hanging there if the finance sector overall hung in there

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[SPEAKER_04]: outside of kind of the riskier parts of the industry you had oil was up obviously then has wailing issues in bargo there is a problem and yeah so just in general it's

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[SPEAKER_04]: The market is turned.

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[SPEAKER_04]: Now, once again, this is not everything going to hell in a hand basket.

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[SPEAKER_04]: I think this is a normal pullback in the markets to get everybody who's off side back on side, but that's kind of where we are at.

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[SPEAKER_04]: As we close the year, and I did a YouTube video just a few weeks ago, and I said, is the Santa Claus rally, maybe not coming this year?

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[SPEAKER_04]: And my kind of answer was probably not.

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[SPEAKER_04]: Based on how things were evolving, and that's kind of where we're at.

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[SPEAKER_04]: Okay, um, what else happened in the markets today?

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[SPEAKER_04]: Treasuries were a bit weaker, you had interest rates up a little bit, especially in the long and slightly short and dropped a little bit, so

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[SPEAKER_04]: Clearly, the market's not feeling the Fed being too hawkish.

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[SPEAKER_04]: There's starting to become an expecting a bit more dovishness, so for the last next few meetings, at least dollar index was up 0.2%, the goal of finished up 1%, just continued bastion of strength in today's market, Bitcoin down 1.8%.

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[SPEAKER_04]: Let's get it, it's going to be very correlated to your tech.

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[SPEAKER_04]: So as long as tech is under pressure, you're going to see Bitcoin under pressure as well, WTI up 1.2%.

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[SPEAKER_04]: after President Trump ordered a blockade of all sanctioned Venezuelan tankers.

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[SPEAKER_04]: So that was the market today.

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[SPEAKER_04]: Big, big day in markets overall.

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[SPEAKER_04]: Now I think we are, are we going to head to a break?

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[SPEAKER_04]: Yeah, I think we are.

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[SPEAKER_04]: And my focus point is coming up next on commercial real estate distress and where are the opportunities and then of course more answers to your finance and investment question.

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[SPEAKER_04]: So give me a call now at 8.89 chart.

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[SPEAKER_06]: The new year is almost here, and it's a safe bet to assume you might have finance and investment questions for Justin Klein and Luke Guerrero, especially if you are wondering about potential tax implications.

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[SPEAKER_06]: So what are you waiting for?

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[SPEAKER_06]: Call in Vestock, 888-99, chart.

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[SPEAKER_08]: I just did a look.

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[SPEAKER_08]: This is Matt from Minneapolis long long time listener to your show.

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[SPEAKER_08]: Thank you once again, gentlemen, for everything you educate us in.

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[SPEAKER_08]: Say, I am early 50s here.

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[SPEAKER_08]: It took your advice somewhat here.

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[SPEAKER_08]: Cash truly out of Netflix and Costco completely.

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[SPEAKER_08]: I have about $70,000.

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[SPEAKER_08]: Instead of doing the ETF road and sectors, I'm not quite in depth with

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[SPEAKER_08]: I've considered some stocks you've set on the show here in the past.

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[SPEAKER_08]: Mercado Libre, M-E-L-I, and ticker symbol, L-E-U along with Cisco and Medtronic.

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[SPEAKER_08]: I'm wondering would you advise getting any of these stocks or should I take the safe road and find some ETFs and funds in these sectors?

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[SPEAKER_08]: while we're getting a new fed share and stuff like that, so maybe some volatility coming up in the next year or two, which would be the safe route for my new year and my life in general.

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[SPEAKER_08]: Thank you very much.

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[SPEAKER_08]: Happy holidays to you both.

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[SPEAKER_04]: Thank you so much for the kind words.

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[SPEAKER_04]: A lot's on pack there.

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[SPEAKER_04]: I think you list off a few names, McAuto, Libre, L.U.

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[SPEAKER_04]: Both of those are in a downturn currently.

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[SPEAKER_04]: So I'm not sure when I talked about them, but both are not candidates for purchase right now.

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[SPEAKER_04]: Of the other ones, I think Cisco's the main one that we own for clients.

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[SPEAKER_04]: So that remains in an uptrend, although obviously pulling back over the past couple of days.

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[SPEAKER_04]: Yeah, but remember to back up and this is the advice for all of you is I have to look at your whole portfolio.

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[SPEAKER_04]: And understand what this looks like in context, right, you sold Costco, you sold Netflix, okay, but what do you own and what waiting is to you have what risk are you taking or you looking for income or you're looking for longer term growth are.

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[SPEAKER_04]: is it just a trade, et cetera.

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[SPEAKER_04]: So, of the names you listed once again, I think Cisco would be the strongest and most applicable to purchase, but what if you already have a lot of exposure to tech or AI infrastructure et cetera?

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[SPEAKER_04]: This is where portfolio construction and starting at a high level is so, so important.

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[SPEAKER_04]: It's very easy to caught up in the sexiness of one particular name or one industry or whatever, but unless you have the acid allocation goal figured out, then you don't really know which way to go, because

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[SPEAKER_04]: maybe you need, maybe you're underweight industrial, so maybe you're underweight health care.

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[SPEAKER_04]: I don't know until you analyze the portfolio and that's what you should be doing or you should have it being having a professional do that yourself.

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[SPEAKER_04]: So as much as we get caught up in the individual names and I have no problem answering about individual names for all of you.

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[SPEAKER_04]: always step back, always know what you own and know how much exposure you have to various themes, various sectors, various style factors in the market, growth for value, large versus small, and then you have to set goals for them.

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[SPEAKER_04]: This is what we do for our clients.

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[SPEAKER_04]: That's what professionals do.

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[SPEAKER_04]: You say, okay, based on the macro backdrop, do I want to be overweight, a particular sector or underweighted particular sector?

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[SPEAKER_04]: Do I want to be overweight a style factor, underweight a style factor?

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[SPEAKER_04]: All of that, and then you create its target, and then you say, okay, here's the universe of names.

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[SPEAKER_04]: Here's let's filter them out from, get rid of the bad companies.

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[SPEAKER_04]: Let's find ones that have good momentum.

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[SPEAKER_04]: which once, you know, analyze the business, what's the best in the breed?

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[SPEAKER_04]: And then you find the names that fit what you are looking for.

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[SPEAKER_04]: And that's what professional management is.

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[SPEAKER_04]: And so hopefully this is a lesson once again for all of you and we've had it in the 2026.

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[SPEAKER_04]: We talked about creating a plan.

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[SPEAKER_04]: Everybody needs to have a plan.

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[SPEAKER_04]: And a lot of people think they have a plan but either A, they don't update it.

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[SPEAKER_04]: And they don't know how to really try to true plan that works.

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[SPEAKER_04]: Or they get distracted, and then they don't stick to that plane.

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[SPEAKER_04]: Because they heard something on TV, or they read an article about it, or they're cousin or brother told them about it.

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[SPEAKER_04]: And they didn't go back to the plan to see where does this fit in my plane.

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[SPEAKER_04]: So I hope that helped to give you some context of how to think about that decision.

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[SPEAKER_04]: Let's answer another YouTube comment question.

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[SPEAKER_04]: Selena Maria Marie says, what are your thoughts on C-A-R-R?

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[SPEAKER_04]: I see you could grow potential and growing, dividend and they are buying back shares.

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[SPEAKER_04]: All right, C-A-R-R, I like that overall picture here returning capital to shareholders, meaning.

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[SPEAKER_04]: That's going to buy back shares, paying a dividend.

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[SPEAKER_04]: That's great.

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[SPEAKER_04]: However, this is in the heating and air condition business.

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[SPEAKER_04]: And this has fallen off in a big way.

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[SPEAKER_04]: Maybe this was the first tell that names like this have pulled back considerably.

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[SPEAKER_04]: Remember, they are in the business of partially.

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[SPEAKER_04]: Cooling these data centers and their business was doing very well, but it's certainly rolled over as of late.

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[SPEAKER_04]: Now, are they losing market share to some of their competitors?

20:59.852 --> 21:04.878
[SPEAKER_04]: I think that's a question that I worry about and I don't like the trends in the stock.

21:04.918 --> 21:09.624
[SPEAKER_04]: The trends are clearly down and it's not exactly cheap currently.

21:10.085 --> 21:13.769
[SPEAKER_04]: earnings are expected to be up 3% this year, 12% next year.

21:13.809 --> 21:17.033
[SPEAKER_04]: But once again, those estimates are being downgraded.

21:17.013 --> 21:25.286
[SPEAKER_04]: So until it turns the corner and you're starting to see, you start to see, and else upgrade their earnings, I would certainly pass on it because it's still not cheap enough.

21:25.306 --> 21:26.888
[SPEAKER_04]: I think there's more downside to come here.

21:27.329 --> 21:33.498
[SPEAKER_04]: Keep on the watchlist because it's a good company and that'd a great one, but I would be buying area.

21:33.518 --> 21:35.201
[SPEAKER_04]: Now the next and best stock will dig into this topic.

21:35.381 --> 21:40.088
[SPEAKER_04]: Water scarcity, the 3.4 trillion dollar infrastructure gap.

21:40.248 --> 21:41.470
[SPEAKER_04]: We'll talk about that story tomorrow.

21:41.791 --> 21:45.957
[SPEAKER_04]: But for now, I'm Justin Klein and

21:50.459 --> 21:57.425
[SPEAKER_06]: For the holiday's KPP Financial is excited to introduce the holiday estate bundle.

21:57.846 --> 22:10.397
[SPEAKER_06]: 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.

22:10.757 --> 22:19.605
[SPEAKER_06]: Learn more about the holiday estate bundle now at investtalk.com and while you're there

22:21.627 --> 22:25.555
[SPEAKER_04]: Now the biggest crisis in commercial real estate isn't over.

22:26.035 --> 22:32.708
[SPEAKER_04]: And we'll show you the signs that smart money is using to buy discounted debt in today's market.

22:32.728 --> 22:36.135
[SPEAKER_04]: And that's what this focus point is really about.

22:36.315 --> 22:41.425
[SPEAKER_04]: It's whether or not the commercial real estate market is returning.

22:41.405 --> 22:45.630
[SPEAKER_04]: and to be frank, it's improving.

22:46.010 --> 22:57.323
[SPEAKER_04]: You are seeing some improvements throughout this year and maybe even into next year and there's some surveys that I think will shed some light in how commercial real estate will evolve.

22:57.383 --> 23:09.977
[SPEAKER_04]: This is really going to impact portfolios, especially those that hold REITs, especially diversified REITs because there's a lot of

23:09.957 --> 23:26.194
[SPEAKER_04]: Readsector to focus on and one of the big takeaways here was that trade and regulatory uncertainties are complicating how these companies are making decisions, but it does depend on what region you're talking about.

23:26.613 --> 23:54.088
[SPEAKER_04]: Okay, so this is the survey from eight or 50 global chief executives and they directly report as major real estate owners and investors across 13 different countries, okay, so very wide ranging here now there was a bit less optimism from last year survey overall a 3% expect their revenues to improve by the end of next year compared to 88% last year.

23:55.300 --> 24:13.866
[SPEAKER_04]: So once again, a bit less excited, spending is expected to rise overall about 68% expect higher expenses this year, coming up versus only 5% believe it's gonna go down by 8% expected to be flat.

24:14.858 --> 24:29.987
[SPEAKER_04]: Now, in the all-conditions survey, things like rental rates, leasing activity, et cetera, the respondents thought those were going to improve, about 65%, just general conditions.

24:31.089 --> 24:34.456
[SPEAKER_04]: And that's down from 68% last year.

24:34.476 --> 24:36.580
[SPEAKER_04]: So what's kind of a little bit less optimism.

24:36.695 --> 24:47.569
[SPEAKER_04]: And this year, the outlook sentiment scored 65, that's well off the low of 2023, which was 44, but below last year is of 68.

24:48.610 --> 25:02.668
[SPEAKER_04]: So what's is telling you is that last year, the improvement in sentiment was kind of right because things didn't prove for most of the year broadly across most categories.

25:03.138 --> 25:13.916
[SPEAKER_04]: Now, the top three respondents, when it comes to issues within the industry, have to do with capital availability, elevated in the streets, and the cost of capital.

25:14.557 --> 25:17.322
[SPEAKER_04]: And then tax policy was next.

25:17.903 --> 25:23.272
[SPEAKER_04]: Those are the main reasons why people were a bit worried more than they were last year.

25:24.254 --> 25:25.095
[SPEAKER_04]: Now,

25:25.531 --> 25:34.044
[SPEAKER_04]: Globally investment volumes the client decline for six consecutive quarters up until the first quarter of this year.

25:34.104 --> 25:37.349
[SPEAKER_04]: That's the first year over year every increase since mid 2022.

25:37.830 --> 25:42.878
[SPEAKER_04]: So capital is coming back globally to commercial real estate.

25:43.559 --> 25:49.007
[SPEAKER_04]: And the question is, is this a bottom now you can look at it two ways.

25:50.270 --> 25:55.758
[SPEAKER_04]: You had private credit really coming in and providing some juice here.

25:55.798 --> 26:05.813
[SPEAKER_04]: And with the trade war, it weighed on what was happening in Asia, definitely, and I'll get to that in a little bit.

26:05.893 --> 26:20.074
[SPEAKER_04]: But generally, companies were starting to think about what they were going to do with their properties of it, or their investments that they're going to invest in new manufacturing facilities, either here,

26:20.712 --> 26:26.320
[SPEAKER_04]: 75% of global respondents plan to increase their investment levels in real estate over next 12 to 18 months.

26:27.622 --> 26:38.578
[SPEAKER_04]: Now, over the reasons, number one, hedge against inflation, greater diversification, stability as an asset class, and tax benefits were next, those 14%.

26:39.299 --> 26:47.631
[SPEAKER_04]: So that is the current state of the commercial real estate market,

26:48.455 --> 26:52.780
[SPEAKER_04]: Probably sales here in America are up 12% year over a year.

26:54.282 --> 27:01.130
[SPEAKER_04]: Once again, that's pretty good, but if you look at what's happening in the European markets, you're actually seeing it improve a bit more.

27:01.410 --> 27:07.638
[SPEAKER_04]: And really where you took a big hit was Asia Pacific, dropping 27% compared to last year.

27:08.919 --> 27:10.882
[SPEAKER_04]: Where were companies looking to buy?

27:10.922 --> 27:18.090
[SPEAKER_04]: Interesting enough, India, Germany, the UK and Singapore were in the top four.

27:18.543 --> 27:32.316
[SPEAKER_04]: It's more about specific low cows that were strong, but in general, obviously Asia was weak outside of Singapore, which shows you why the investment in China is certainly being pulled back in a material way.

27:33.578 --> 27:37.203
[SPEAKER_04]: Now, the biggest risk going forward clearly is refinancing.

27:37.743 --> 27:44.532
[SPEAKER_04]: Over 50% of respondents said their companies are facing property loan maturedies in the next year.

27:44.572 --> 27:54.085
[SPEAKER_04]: And here in the United States, 1.7 trillion dollars in commercial mortgages, many of them have already been delayed, but they're coming to do in the next year.

27:54.149 --> 27:57.176
[SPEAKER_04]: And this is after-instrates have moved up considerably.

27:57.216 --> 28:00.925
[SPEAKER_04]: A lot of these commercial mortgages were done when and traits were around 4%.

28:00.965 --> 28:06.218
[SPEAKER_04]: Now, it's right around 6.5%.

28:06.907 --> 28:07.187
[SPEAKER_04]: Okay.

28:07.768 --> 28:19.984
[SPEAKER_04]: So these things are changing rapidly and you have to understand how the commercial real estate industry will evolve when you're looking specifically at those reats.

28:20.425 --> 28:21.326
[SPEAKER_04]: And so know what you want.

28:21.647 --> 28:23.429
[SPEAKER_04]: Only reats in general isn't just enough.

28:23.469 --> 28:25.652
[SPEAKER_04]: You really need to own the right sectors.

28:26.313 --> 28:29.477
[SPEAKER_04]: Nilsing back to the investor like voice bank for a question that came in earlier.

28:30.258 --> 28:36.306
[SPEAKER_02]: Gentlemen, good morning and the happy holidays to both of you and your families

28:36.775 --> 28:39.038
[SPEAKER_02]: Steve was never a fan of IPOs.

28:39.539 --> 28:47.831
[SPEAKER_02]: My question today is, and rightly so, in my opinion, but my question today is how to strategize for a IPL in the future.

28:48.512 --> 28:58.346
[SPEAKER_02]: And I will use a stock seal that doesn't exist yet, which is Wemo, but there's also going to be a competitor in the driverless market, or there is already, which is Tesla.

28:58.366 --> 29:04.875
[SPEAKER_02]: So my question is, if you wanted to get in on a potential

29:05.176 --> 29:09.242
[SPEAKER_02]: been off for a waymo, is it as simple as buying alphabet?

29:09.262 --> 29:11.385
[SPEAKER_02]: Would you, in the second question, I'll let you go.

29:11.525 --> 29:12.526
[SPEAKER_02]: Would you buy waymo?

29:12.807 --> 29:16.332
[SPEAKER_02]: Would you buy Tesla in the driverless market?

29:16.632 --> 29:17.353
[SPEAKER_02]: Thank you so much.

29:17.894 --> 29:28.028
[SPEAKER_04]: To answer your last question, if you're simply trying to bet on the company that will execute on driverless cars,

29:28.210 --> 29:35.173
[SPEAKER_04]: better, and an already is, and will likely do so in the future, it's 1,000 percent way now.

29:35.193 --> 29:36.718
[SPEAKER_04]: It's not even a question.

29:36.817 --> 29:38.439
[SPEAKER_04]: They are far better.

29:38.479 --> 29:39.781
[SPEAKER_04]: Their technology is far better.

29:39.861 --> 29:40.923
[SPEAKER_04]: It's far more advanced.

29:41.343 --> 29:50.376
[SPEAKER_04]: And really, it's just a bad bet by you on by saying that you can do driverless, you can actually run a driverless car on cameras.

29:50.476 --> 29:51.117
[SPEAKER_04]: It's nonsense.

29:51.838 --> 29:52.719
[SPEAKER_04]: You need to have lightar.

29:52.779 --> 29:56.684
[SPEAKER_04]: That's why Waymo's have these huge systems on the roof, et cetera.

29:56.925 --> 29:57.445
[SPEAKER_04]: That's lighter.

29:57.485 --> 30:01.591
[SPEAKER_04]: They're able to at real time map everything that's going on around it.

30:01.952 --> 30:02.993
[SPEAKER_04]: Whereas,

30:02.973 --> 30:05.917
[SPEAKER_04]: for a Tesla, it's using cameras, that's it.

30:06.538 --> 30:17.071
[SPEAKER_04]: And if you've ever driven into the sun and how to put your hand up, put your visor down, the try to see everybody who's driven a car at some point has had to do that.

30:17.451 --> 30:19.834
[SPEAKER_04]: Well, guess what, cameras have the same issue.

30:20.295 --> 30:27.985
[SPEAKER_04]: This is why Tesla's running to emergency vehicles, because they get blinded by the lights on the emergency vehicles.

30:28.005 --> 30:32.170
[SPEAKER_04]: So you've seen many people die from the fact

30:32.150 --> 30:37.195
[SPEAKER_04]: Tesla's running to these cars with quote unquote full self driving on.

30:37.796 --> 30:42.300
[SPEAKER_04]: And so Waymo is, I think they're level four self driving.

30:42.340 --> 30:44.562
[SPEAKER_04]: Tesla hasn't gotten past level of belief too.

30:44.622 --> 30:47.946
[SPEAKER_04]: There are a couple steps, many steps ahead.

30:48.506 --> 30:52.830
[SPEAKER_04]: And frankly, I don't think Tesla ever really get there because they aren't using LIDAR.

30:53.691 --> 31:00.638
[SPEAKER_04]: It's a more expensive technology, but and maybe it's, you know, the best argument here is that

31:01.124 --> 31:10.172
[SPEAKER_04]: just with AI that oak the cost of the lidar systems and the safety systems to make a driverless car work.

31:10.540 --> 31:13.063
[SPEAKER_04]: regularly is just too high.

31:13.684 --> 31:24.877
[SPEAKER_04]: And Waymo won't be cashful positive or profitable because that's honestly the best argument here for test the over Waymo because test the won't get there, right?

31:25.718 --> 31:35.569
[SPEAKER_04]: Now, Waymo never gets to, I think if I remember five is really true driverless and true full self-driving

31:37.473 --> 31:39.055
[SPEAKER_04]: Yeah, I think eventually we do get there.

31:39.616 --> 31:44.121
[SPEAKER_04]: But Waymo's way way way way ahead of Tesla is not even close.

31:44.582 --> 31:54.734
[SPEAKER_04]: So, yeah, I would buy Waymo on an IPO potentially, but I would probably wait for the hype to die off to be honest with you.

31:55.355 --> 31:58.158
[SPEAKER_04]: So, yeah, hit your ride to Waymo.

31:58.178 --> 32:00.561
[SPEAKER_04]: Not Tesla, thanks for the call.

32:01.553 --> 32:07.381
[SPEAKER_04]: Now this is the best talk with more than 62 million downloads, we'll talk more questions in about 30 seconds.

32:07.421 --> 32:10.746
[SPEAKER_04]: So hang on.

32:10.766 --> 32:15.712
[SPEAKER_01]: Hello investors, Lou Guerrero here with a quick heads up and an invite.

32:16.233 --> 32:19.758
[SPEAKER_01]: This year, we're doing something brand new.

32:19.778 --> 32:23.443
[SPEAKER_01]: The first ever, Invest Talk holiday special.

32:26.377 --> 32:30.764
[SPEAKER_01]: And it drops December 18th exclusively on our YouTube channel.

32:31.104 --> 32:35.771
[SPEAKER_01]: It's going to be a fun end of year episode where we look back at the biggest market themes of 2025.

32:36.092 --> 32:41.820
[SPEAKER_01]: Highlight a few lessons were carrying into 2026 and choose the caller question of the year.

32:42.301 --> 32:46.006
[SPEAKER_01]: Plus, a couple surprises you won't get in our regular format.

32:46.026 --> 32:53.177
[SPEAKER_01]: To watch the invest on college special, head over to YouTube and search Invest Talk with two T's, or use the link in today's show notes.

32:53.157 --> 33:15.503
[SPEAKER_03]: And while you're there, subscribe and hit the bell so you don't miss it on December 18.

33:15.635 --> 33:18.944
[SPEAKER_03]: like to know, is it now getting into a by-range?

33:19.365 --> 33:20.107
[SPEAKER_03]: Thank you so much.

33:20.127 --> 33:20.929
[SPEAKER_03]: Really appreciate it.

33:21.130 --> 33:31.517
[SPEAKER_04]: I'm looking at ACLS is the symbol, and this is Excelus Technologies, and

33:32.763 --> 33:37.008
[SPEAKER_04]: They manufacture capital equipment for semiconductor manufacturing.

33:37.048 --> 33:50.302
[SPEAKER_04]: So the chip equipment manufacturing business, let me take a look at the quality of this business, because this smaller namely two and a half billion dollar market cap, return equity is 13% which is pretty good.

33:50.382 --> 33:57.049
[SPEAKER_04]: The problem is that that's coming down from 32% and historically, if I just look at long term,

33:58.160 --> 33:59.342
[SPEAKER_04]: hasn't been that great.

34:00.003 --> 34:04.451
[SPEAKER_04]: So that's what worries me, definitely dip down in 2020 down around 4%.

34:05.452 --> 34:11.783
[SPEAKER_04]: So it's an okay business, but there's definitely more profitable chip manufacturing companies out there.

34:12.203 --> 34:16.691
[SPEAKER_04]: So that would be my biggest worry, it's small, it's free cash flow yield is pretty low.

34:16.731 --> 34:20.337
[SPEAKER_04]: And if I look at the technicals, let me pull this up.

34:20.317 --> 34:22.600
[SPEAKER_04]: here, ACLS.

34:23.642 --> 34:28.849
[SPEAKER_04]: It's losing momentum with kind of the broad tech space overall.

34:29.230 --> 34:31.093
[SPEAKER_04]: And that worries me.

34:31.633 --> 34:32.234
[SPEAKER_04]: That worries me.

34:32.274 --> 34:41.127
[SPEAKER_04]: If you look at earnings growth, earnings growth is negative this year, expected to be negative 33%, then only up 2% next year.

34:41.107 --> 34:50.262
[SPEAKER_04]: And this has been a downtrend since early, or mid-2023 when it peaked out around 180 dollars per share, now we're at $80 per share.

34:50.843 --> 34:57.274
[SPEAKER_04]: So this rallies since the March lows are the April lows, not that great if you zoom out a little bit.

34:57.935 --> 35:00.019
[SPEAKER_04]: So I certainly don't love that.

35:00.039 --> 35:04.887
[SPEAKER_04]: Let me take a look at some other factors here.

35:05.879 --> 35:07.041
[SPEAKER_04]: They're buying back shares.

35:07.121 --> 35:15.699
[SPEAKER_04]: That's a positive, no dividend yield, but I just don't love the overall trends in this name, both on sales perspective as well as earnings.

35:16.640 --> 35:22.893
[SPEAKER_04]: And the fact that they're so small just doesn't give me a lot of faith in the sustainability of that business.

35:22.953 --> 35:26.520
[SPEAKER_04]: So I would certainly pass on ACLS.

35:27.277 --> 35:32.266
[SPEAKER_04]: Now, for pen to time, we received questions via web form from invest talk.com.

35:32.647 --> 35:34.110
[SPEAKER_04]: So here's one that came in earlier.

35:34.591 --> 35:37.196
[SPEAKER_04]: Peter says trade desk is going downhill.

35:38.117 --> 35:41.323
[SPEAKER_04]: Is this talk a value trap or a buying opportunity?

35:41.804 --> 35:42.966
[SPEAKER_04]: This is an interesting one.

35:43.026 --> 35:45.531
[SPEAKER_04]: This was a darling for a long, long time.

35:46.032 --> 35:46.573
[SPEAKER_04]: You know what?

35:46.593 --> 35:50.280
[SPEAKER_04]: I actually like a lot of, I like the fallen angels, typically.

35:50.682 --> 36:02.970
[SPEAKER_04]: because what happens for a lot of these growth year names is people get jazzed up and and think that near-term growth when they're really small businesses will

36:03.288 --> 36:14.545
[SPEAKER_04]: grow in finitum and they extrapolate that way way far into the future and then suddenly growth stalls out and the stock creators and that's exactly what happened here with trade desk.

36:15.226 --> 36:30.308
[SPEAKER_04]: This IPO back in 2016, it was hanging around the two three four five dollar mark up until about 2018 and then exploded in a high of a hundred and thirty eight dollars back in just last year.

36:30.288 --> 36:34.193
[SPEAKER_04]: And it's now that $37, okay?

36:35.755 --> 36:37.877
[SPEAKER_04]: So down 71% from its high.

36:39.740 --> 36:48.811
[SPEAKER_04]: And it was exploding because earnings were growing consistently 23, 26% in revenue, earnings were up 30, 30, 40, 50% year over year.

36:49.872 --> 36:51.594
[SPEAKER_04]: But this year earnings are now down 48%.

36:51.634 --> 36:53.697
[SPEAKER_04]: And so that's why this stock is greater.

36:54.267 --> 36:58.976
[SPEAKER_04]: So it's still a good business, but the question is, is it cheap enough?

36:59.097 --> 37:03.786
[SPEAKER_04]: Usually these names that 80% down is usually the place where it starts to get attractive.

37:04.447 --> 37:10.960
[SPEAKER_04]: And at a dollar 10 earnings next year, a $37 stock, I still don't think it is cheap enough.

37:10.940 --> 37:16.526
[SPEAKER_04]: So, I'm passing on this probably honestly until about $20 per share.

37:16.626 --> 37:24.074
[SPEAKER_04]: So, uh, name the keep an eye on, but not quite yet, because the trend is terrible still and evaluation is not there.

37:24.734 --> 37:25.415
[SPEAKER_04]: That was the best stock.

37:25.475 --> 37:31.942
[SPEAKER_04]: I'm Justin Klein and we are, we're here for one goal and that's helped you come a better investor, help you achieve your own version effect.

37:31.962 --> 37:34.424
[SPEAKER_04]: Freedom and I'm working to use after this final break.

37:34.484 --> 37:37.167
[SPEAKER_04]: Which questions didn't write now at eight and eight ninety nine chart?

37:51.524 --> 37:54.147
[SPEAKER_06]: Here's a quick heads up and an invitation.

37:54.207 --> 37:57.531
[SPEAKER_06]: This year, KPP Financial is doing something new.

37:58.031 --> 38:01.255
[SPEAKER_06]: The first ever in Vestock, holiday special.

38:01.715 --> 38:07.322
[SPEAKER_06]: The in Vestock holiday special is free to watch and it drops tomorrow on YouTube.

38:09.004 --> 38:10.465
[SPEAKER_00]: Hey guys, thanks for great show.

38:10.485 --> 38:11.707
[SPEAKER_00]: Really appreciate it out here.

38:12.187 --> 38:13.308
[SPEAKER_00]: Got a couple questions for you.

38:13.349 --> 38:16.452
[SPEAKER_00]: My mom is in her early 90s and she's a great girl.

38:16.769 --> 38:19.633
[SPEAKER_00]: I help keep an eye on her finances and whatnot.

38:20.053 --> 38:34.112
[SPEAKER_00]: She has a brokerage account with a large well-known brokerage company and her advisor wants to diminish her holdings in small cap, which kind of came as a surprise based on what I've heard you say about small caps.

38:34.552 --> 38:39.739
[SPEAKER_00]: So question number one, is what do you think about small caps going into next year?

38:40.563 --> 38:47.390
[SPEAKER_00]: Second item she has a pretty good size holding in Motorola and other states had really rough a couple of months.

38:47.470 --> 38:50.433
[SPEAKER_00]: I'm wondering if this is a good time to pick up more.

38:50.793 --> 38:51.274
[SPEAKER_00]: Thanks a bunch.

38:51.294 --> 38:51.934
[SPEAKER_00]: We'll be listening.

38:52.255 --> 38:52.415
[SPEAKER_00]: Bye.

38:53.716 --> 38:58.341
[SPEAKER_04]: Well, your monster visor makes a good point.

38:58.381 --> 39:02.045
[SPEAKER_04]: You know, small caps are generally riskier.

39:02.105 --> 39:08.511
[SPEAKER_04]: So it depends on kind of your time horizon here of the short term in a

39:08.812 --> 39:19.388
[SPEAKER_04]: And so, yes, in theory, large caps are safer, but in this environment, especially, she owns some sort of index fund or something that's very tied to those big tech names.

39:20.670 --> 39:24.997
[SPEAKER_04]: That in some ways right now, I think is a bit riskier than most small caps.

39:25.017 --> 39:27.561
[SPEAKER_04]: It depends on what funds you're owning, et cetera.

39:27.921 --> 39:29.183
[SPEAKER_04]: I've talked before about.

39:30.057 --> 39:37.228
[SPEAKER_04]: The Russell 2000 is riskier than the S&P 600, even though they're both small cap indices because of the way they're constructed.

39:37.308 --> 39:40.453
[SPEAKER_04]: So a lot does depend on that context there.

39:41.775 --> 39:48.505
[SPEAKER_04]: But at our age, yeah, maybe she's in own, much small cuts, but I have to see what the total,

39:49.312 --> 39:50.274
[SPEAKER_04]: allocation looks like.

39:50.354 --> 40:00.756
[SPEAKER_04]: So if you want to set up a portfolio review, I can certainly for free take a look at that and give you give her and you some better context, a weather reducing small gaps to make sense or not.

40:01.277 --> 40:07.931
[SPEAKER_04]: Now, it comes to Motorola solutions that certainly had a rough time down 24% from his 52-week-high recently.

40:07.971 --> 40:09.835
[SPEAKER_04]: And

40:11.266 --> 40:16.002
[SPEAKER_04]: You know, I just don't think this is great value quite yet.

40:16.383 --> 40:24.229
[SPEAKER_04]: I think it's a fine company, but it's not at a level that gets me excited to pick it up and

40:25.070 --> 40:39.235
[SPEAKER_04]: You know, down 27% sounds great, but it's that also means it's in a downtrend that I'm not seeing any signs on the chart that this downtrend is going to turn to an uptrend anytime soon.

40:39.355 --> 40:44.664
[SPEAKER_04]: So I don't mind the company, but I wouldn't be adding to it at this level.

40:45.045 --> 40:46.808
[SPEAKER_04]: It's just not screaming by to me.

40:48.475 --> 41:01.751
[SPEAKER_04]: Thanks for the call and speaking of not screaming by to me, there's a recent survey from Bank of America on cash holdings and the average cash holdings in portfolios dropped to 3.3% in December.

41:02.152 --> 41:05.215
[SPEAKER_04]: That's down from 3.7% in November.

41:05.556 --> 41:10.582
[SPEAKER_04]: This is the lowest level of the survey since it began in 1999.

41:10.602 --> 41:14.787
[SPEAKER_04]: 42%.

41:14.767 --> 41:27.221
[SPEAKER_04]: Net 42% of fund managers are overweight equities, the highest level since 2022, the proportion of fund managers overweight technology stocks also read to highest level in more than a year.

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[SPEAKER_04]: This is a giant red flag to me.

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[SPEAKER_04]: The show that fund managers are the most bullish since May 2021.

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[SPEAKER_04]: What happened after May 2021?

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[SPEAKER_04]: You had 2022 without large drawdown.

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[SPEAKER_04]: I am starting to get getting the vibes here.

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[SPEAKER_04]: I don't want to act on vibes, you never want to act on vibes, but you start adding up different pieces here and you're starting to get 22 vibes and data lining up for 26.

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[SPEAKER_04]: Number one, interest rates look

41:59.013 --> 42:01.295
[SPEAKER_04]: to be rising on the long end, at least.

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[SPEAKER_04]: Maybe not the short end, but the long end.

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[SPEAKER_04]: You also are getting expectations of growth that were priced in to markets this year around AI.

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[SPEAKER_04]: Very similar to what was priced around anything worked from home related, members zoom and Peloton and all those companies that boomed in 2020 and 2021.

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[SPEAKER_04]: And then the market realized,

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[SPEAKER_04]: demand pulled forward and you're starting to see that line up here for 2026 with the AI stocks.

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[SPEAKER_04]: And then you line up the cash levels and the optimism from investors and from fund managers.

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[SPEAKER_04]: There's not a lot of dry powder out there and it's more likely that

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[SPEAKER_04]: This is the start of a broader pullback in Marcus.

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[SPEAKER_04]: And next year, we'll be a rocker here.

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[SPEAKER_04]: Now he's going to be a 20% drop in this and P and a 33% drop in the NASDAQ, like in 2022, possibly.

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[SPEAKER_04]: I don't see it as that poor, but it's definitely going to be a more challenging market.

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[SPEAKER_04]: Still a lot of opportunity.

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[SPEAKER_04]: But,

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[SPEAKER_04]: it's not going to be like this year.

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[SPEAKER_04]: With that about doesn't, I'm just in calling it today's show, making it your own thanks to picture anyway, your investments, your taxes, your retirement strategy, but it's all really working together.

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[SPEAKER_04]: Let's talk about it.

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[SPEAKER_04]: Check over to investtalk.com and click on the portfolio review button and schedule a call with myself for Luke, company, clarity, and confidence to whatever you are doing so you can reach your goals.

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43:43.216 --> 43:57.188
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[SPEAKER_04]: This is the best talk, good night.

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