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[SPEAKER_14]: Let's go talk to Sammy in SAMHSA Skull wants to know my view on AI stocks in general?

[SPEAKER_01]: Yeah, thanks just for taking my call.

[SPEAKER_01]: Yeah, that's my question to you.

[SPEAKER_01]: I mean, I'm seeing all these stocks because, you know, I'm a skyrocket, right?

[SPEAKER_01]: Almost every day now, but from what I've read so far, I think most of the money is being made by these infrastructure companies, which are trying to sell each other, these ships and whatnot, right?

[SPEAKER_01]: The more infrastructure, then the real business use cases,

[SPEAKER_01]: progress are going to come from right in the long run.

[SPEAKER_01]: So, what would you take on the overall AI sector and most specifically, the business use cases, I have not seen any company monetized those in any meaningful way so far, but these stocks like you know keep going up and up every day now.

[SPEAKER_01]: What would you take?

[SPEAKER_14]: I think it's absolutely a bubble that I can keep going.

[SPEAKER_14]: And to say, it hasn't been monetized in any reasonable way.

[SPEAKER_14]: I think that's not sure that it has.

[SPEAKER_14]: They are pulling in billions of dollars of extra revenue.

[SPEAKER_14]: The problem is that they're spending hundreds of billions of dollars.

[SPEAKER_14]: Now, every year to support this, these products.

[SPEAKER_14]: and you're going to need hundreds of billions of dollars in income to counter.

[SPEAKER_14]: This is all coming from their own regular straightforward businesses.

[SPEAKER_14]: Microsoft and their subscription 365 business.

[SPEAKER_14]: meta and they're advertising on Instagram.

[SPEAKER_14]: Amazon and their AWS and ecommerce business.

[SPEAKER_14]: This money is not coming from AI.

[SPEAKER_14]: Now, it will continue to grow.

[SPEAKER_14]: I think that's absolutely true.

[SPEAKER_14]: The revenue from AI will continue to grow.

[SPEAKER_14]: But it's going to take hundreds of billions of dollars in capex every single year.

[SPEAKER_14]: the support these businesses?

[SPEAKER_14]: If that's the case, then very few of these companies are going to have positive RLS.

[SPEAKER_14]: And it's going to turn very asset light high profit margin businesses into very asset intensive and low margin businesses and maybe in some instances is negative.

[SPEAKER_14]: So I'm bullish on the technology and in the fact that it will have a lot of applications that will continue to grow and over the next decade or two.

[SPEAKER_14]: You'll see some, you know, some pretty amazing advances, but it's so new just like the internet was in the 90s that understanding the business model of it is going to be a challenge and there are going to be many companies that

[SPEAKER_14]: overspend and overinvest and get themselves into major trouble.

[SPEAKER_14]: And it's already happening.

[SPEAKER_14]: It's just a matter of when will the market recognize it.

[SPEAKER_14]: As long as the liquidity is flowing in general and earnings for these companies are still solid, I think it'll be fine.

[SPEAKER_14]: But you're already seeing a flattening out of things like free cash flow.

[SPEAKER_14]: Even though earnings per share and net income continue to go higher, but history says incomes, net incomes and earnings follow free cash flow.

[SPEAKER_14]: Because eventually, the spend, you'll have to capitalize it, you'll have to depreciate it, and that is a hit earnings.

[SPEAKER_14]: And then the circular nature is very similar to what we saw in the 90s, from nerds on networks, to world com, etc.

[SPEAKER_14]: So that's my general take is, I can keep going in the short term, but we all know where this leads to a much much lower prices for a lot of these names.

[SPEAKER_14]: It's just a matter of who's in the wrong here.

[SPEAKER_14]: I think probably in videos the one that's in the biggest crosshairs, because it's been $50,000 per each one of these processors.

[SPEAKER_14]: It's due it, but not the volume that they're doing now.

[SPEAKER_14]: But there are many other names from Corewee, etc.

[SPEAKER_14]: that are just misallicating capital in a griegeous ways.

[SPEAKER_14]: And it's just a matter of the tide going out, and then we'll see who's familiar, and sure a lot of them in the space are.

[SPEAKER_15]: All right, let's drop it another listener question now.

[SPEAKER_02]: Recently, full of the house and what I'm doing with the proceeds of the house is a effect to buy corporate bonds and hold them to maturity.

[SPEAKER_02]: Merrill Lynch has a secondary bond market where I buy bonds from people who already owe them and my question is, when I look at the bonds available on the secondary markets, can I trust basically that

[SPEAKER_02]: whether I'm paying above power or below power, and after I pay a crude interest, can I trust that if I just hold that bond to maturity?

[SPEAKER_02]: And it's not.

[SPEAKER_02]: Can you tell me what's a look for when I'm shopping on this secondary market?

[SPEAKER_02]: Okay, thanks very much.

[SPEAKER_15]: So you can never fully quote unquote trust that a bond is going to pay back the part value of maturity, right?

[SPEAKER_15]: That is an inherent nature of the risk, the credit risk of owning a bond.

[SPEAKER_15]: Now how do we mitigate those types of things?

[SPEAKER_15]: Well, one way to do it is to look for one with a shorter maturity.

[SPEAKER_15]: Now, you're going to get less of a return, but that's because you're only getting compensated for the risk that you're taking on.

[SPEAKER_15]: And so a shorter time to maturity bond means there is less time for issues to happen where the company can't pay you back.

[SPEAKER_15]: You look at the credit rating.

[SPEAKER_15]: You are going to be compensated more for taking on a less credit worthy entities bond.

[SPEAKER_15]: Now, right now, credits by their very tight, meaning that you shouldn't want to take on that additional risk because you're not getting compensated enough.

[SPEAKER_15]: And so,

[SPEAKER_15]: If you, in summary, are looking for a way to get bond exposure.

[SPEAKER_15]: You want to buy individual bonds, but you're worried about.

[SPEAKER_15]: Not getting that money.

[SPEAKER_15]: When it comes in maturity, you really want to focus on looking to credit where the nest is the credit rating of the company and the amount of time left until that bond matures.

[SPEAKER_14]: Thanks for the call.

[SPEAKER_14]: Now the first thing you have to understand about every real estate market is that it's it's localized.

[SPEAKER_14]: Now there are general trends and generally the real estate market is slowing.

[SPEAKER_14]: Other pockets of like in Denver for example, Austin Texas.

[SPEAKER_14]: These are markets that are very weak.

[SPEAKER_14]: Other markets, not quite as bad.

[SPEAKER_14]: Now it comes to short-term rental market, I'm very weary of that market.

[SPEAKER_14]: Mainly because it hasn't really seen a true recession.

[SPEAKER_14]: The Airbnb VRBL market, it was really in its infancy in 2008, right?

[SPEAKER_14]: I don't even know if it really existed at that point.

[SPEAKER_14]: Then really start taking off until the 2010s, mid-2010s.

[SPEAKER_14]: And if you buy at the rate price and you buy the right low cow, there's not a lot of competition, you can make very good returns, but it's also kind of headache, clients have talked to it.

[SPEAKER_14]: Friends family that have these type of properties, and it's a lot of work, it's own little business.

[SPEAKER_14]: It's basically a bed and breakfast, so that's what Airbnb stands for, right?

[SPEAKER_14]: It's air, bed, and breakfast.

[SPEAKER_14]: It's a lot of work, and you can get good returns, but you need to have the time and the discipline and the know-how to manage these properties.

[SPEAKER_14]: And then there are regulatory issues, locally, and then they change the laws, the rules, and that can hurt the value you're seeing that if you can, in Palm Springs area right now.

[SPEAKER_14]: So, are there opportunities sure, but you have to do your deep research and make sure you buy right, both on price and the right low capital?

[SPEAKER_19]: You are listening to an invest talk best of call or questions compilation program.

[SPEAKER_19]: Your comments and questions are always welcome.

[SPEAKER_19]: Call anytime 888-99 chart.

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[SPEAKER_19]: Serious investors are certain to have, finance and investment questions.

[SPEAKER_12]: Hello, and best talk.

[SPEAKER_12]: This is Jose from New York.

[SPEAKER_12]: I'm looking into buying a small position in Dollar Tree or Dollar General.

[SPEAKER_19]: And the best person to ask your question in the right way is you.

[SPEAKER_18]: Hi, I'm Bestop.

[SPEAKER_19]: I was calling in with a question on the stop Nike and 24 seven rain or shine Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

[SPEAKER_14]: That is up into a little bit of resistance so you probably want a little bit of consolidation here.

[SPEAKER_14]: So this company does not capitalize itself with equity.

[SPEAKER_15]: It does not capitalize itself with debt.

[SPEAKER_19]: Your participation makes it in Vestock better.

[SPEAKER_19]: Let's play a call a question from 8-899 chart.

[SPEAKER_19]: This is James from Georgia.

[SPEAKER_19]: I was trying to call about ticker symbol SCCO.

[SPEAKER_19]: So don't forget to call in Vestock.

[SPEAKER_19]: I appreciate the show guys.

[SPEAKER_19]: Thank you.

[SPEAKER_19]: 8-8-899 chart.

[SPEAKER_16]: This is a special Invest Talk, Best of Caller Questions compilation program.

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[SPEAKER_18]: Hey Justin and Luke, this is Josh and North Carolina.

[SPEAKER_18]: I had a question, I'm going back through a Steve's book on investing in round page 13.

[SPEAKER_18]: He talks about the VIX.

[SPEAKER_18]: And I track the VIX along with other stocks.

[SPEAKER_18]: He was talking about how the VIX can be used to signal, might be time to purchase or sell a stock.

[SPEAKER_18]: I'm a little confused on that.

[SPEAKER_18]: Did you guys go back over that at some point on your show and just discuss the purpose of the VIX and maybe a few examples of what those numbers might trigger?

[SPEAKER_18]: I know they're relative of values, but I've been listed some other podcast here in a one or two folks mention the VIX these days just as a signal that's.

[SPEAKER_18]: the market may be getting ready to change, may be getting ready to slow down or something not sure, but if you would, enjoyed reading about it in Steve's book, but just need a little bit more clarification on how to use the VIX.

[SPEAKER_18]: Thanks a lot.

[SPEAKER_14]: Great question, and certainly there needs more context since Steve wrote that book a long time ago.

[SPEAKER_14]: But the institution of volatility, the small selling funds, shall we say.

[SPEAKER_14]: It's kind of changed the dynamics of the VIX a little bit.

[SPEAKER_14]: I'll take into that after I give you the broad overview.

[SPEAKER_14]: The volatility is simply a put call ratio.

[SPEAKER_14]: How many puts versus calls are being treated?

[SPEAKER_14]: And when it's elevated, it means that a lot of puts are being bought on the market.

[SPEAKER_14]: And that means there's a lot of fear.

[SPEAKER_14]: There's a lot of people trying to buy protection.

[SPEAKER_14]: Usually when that happens, well, the market is set to bottom, right?

[SPEAKER_14]: It means that when you get a spike in the vix, there's a lot of fear in, you know, you buy fear.

[SPEAKER_14]: You typically sell greed.

[SPEAKER_14]: And that's what the vix index is helping with.

[SPEAKER_14]: Whereas we in the fear and greed type of spectrum, that's why when the vix elevated, you know,

[SPEAKER_14]: So I got some cash from your portfolio and buy some positions, especially those that have been in your watch list.

[SPEAKER_14]: Now, with the volatility funds, you know, there's a lot of people going out there, but selling zero DTE date, they sell expiration options and really trying to bring in income into the into their portfolios and the strategies and there's a lot of

[SPEAKER_14]: What you see now is that every dip that's not just being bought by average investor, but that volatility is being sold, and that actually suppresses volatility over time, and it's actually kind of skewed the signal of the fix, because it's becoming more suppressed than it probably should be because of those vaults.

[SPEAKER_14]: selling funds.

[SPEAKER_14]: That's why you see the VIX now paying around the midteens, you know, usually the low 20s was where it was trading at many years ago before these fall selling funds.

[SPEAKER_14]: And now we're once getting hanging in the midteens, you know, it's really about when is it spike?

[SPEAKER_14]: And that's really the best signal, right?

[SPEAKER_14]: The recent spike in April went up to 50th, about 60th, right?

[SPEAKER_14]: And so a signal that, you know, want to be buying a bit into the market.

[SPEAKER_14]: So that's the way you want to be.

[SPEAKER_16]: It's

[SPEAKER_16]: Invest Talk is ready 24-7 for your finance and investment questions.

[SPEAKER_00]: I'm hoping you'll give me your cake on or Matt Technologies ORA.

[SPEAKER_17]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest in the better stock?

[SPEAKER_16]: Don't forget to call, Invest Talk, 888-99, chart.

[SPEAKER_07]: Just a quick question on crypto, what the recent drop is there a point where you would add a position to your portfolio.

[SPEAKER_07]: I have no crypto exposure.

[SPEAKER_07]: So something small in the, you know, three to potentially 5% range.

[SPEAKER_07]: Is there a point where you would start adding that.

[SPEAKER_07]: And then would you go with something like the Isher's Bitcoin ETF I bet or would you lean more towards Ethereum with Isher's ETHA?

[SPEAKER_07]: We'd just love your input and recommendations.

[SPEAKER_07]: I look forward to listening on the podcast.

[SPEAKER_07]: Thanks.

[SPEAKER_15]: I could go on for an entire show about cryptocurrency, Bitcoin specifically.

[SPEAKER_15]: what has been happening with it, volumes over the past five years.

[SPEAKER_15]: And we actually have this discussion in the office with one of my colleagues.

[SPEAKER_15]: And, you know, I was saying that, holding Bitcoin at a small way, you're three to five percent way.

[SPEAKER_15]: Of your total portfolio?

[SPEAKER_15]: is a good or not necessarily good but a reasonable risk return decision but you have to understand that crypto just like anything else but more so crypto is driven by flows right you saw what happened when okay we have it on defy meaning that people are holding it in decentralized wallets right and so you had the highest conviction buyers.

[SPEAKER_15]: As time went on, you got that exposure to more lower conviction buyers that weren't the original Bitcoin Maxis, but still pushing prices higher.

[SPEAKER_15]: And then ETFs come in, now you have a lot more retail money pushing prices higher than institutions started buying a bit, pushing prices higher.

[SPEAKER_15]: And the whole point of the little crypto lobby was trying to do was to get governments buying it because that is such a big pile of money.

[SPEAKER_15]: And so it's predicated upon more and more money coming into this system.

[SPEAKER_15]: Now, Bitcoin crypto has never gone through some sort of financial shock like we saw in 2008, right?

[SPEAKER_15]: And even post-pandemic, you still haven't seen volumes recover, which is my way of saying, it's difficult to say, what is a good price for Bitcoin?

[SPEAKER_15]: I don't know.

[SPEAKER_15]: It is a purely speculative asset.

[SPEAKER_15]: There's no cash flows that are coming.

[SPEAKER_15]: There's no return to investors.

[SPEAKER_15]: The price is purely what somebody's willing to pay for it, and nothing else is coming your way.

[SPEAKER_15]: So, I struggle to say now's a good time.

[SPEAKER_15]: Here's a good time because it could head meaningfully lower.

[SPEAKER_15]: It could head meaningfully higher.

[SPEAKER_15]: In a way that it is kind of

[SPEAKER_15]: long duration asset there are no fundamentals here which is why i say having a three to five percent allocation is reasonable given the risk of a tradeoff but trying to understand what price action is going to be in any given time period very full hearty and dim thanks to the call

[SPEAKER_19]: You are listening to an invest talk best of caller questions compilation program.

[SPEAKER_19]: Your comments and questions are always welcome call anytime 88899 chart that's 88899 CHART.

[SPEAKER_19]: You are listening to an invest talk best of call or questions compilation program.

[SPEAKER_19]: Your comments and questions are always welcome.

[SPEAKER_19]: Call anytime 88899 chart that's 88899 CHART.

[SPEAKER_03]: Hey guys, I love the show.

[SPEAKER_03]: I got a quick question about 401K investing.

[SPEAKER_03]: My company offers a pre-tax allocation

[SPEAKER_03]: I know what the difference is between a Roth IRA and a traditional IRA, but could you tell me what the difference is between a pre-tax contribution versus a Roth IRA?

[SPEAKER_03]: Thanks.

[SPEAKER_14]: Pre-tax is just simply a traditional, a contribution to a traditional 401k or IRA.

[SPEAKER_14]: That's what it means is you didn't pay tax on that money, pre-tax, because you're writing off that contribution on your taxes.

[SPEAKER_14]: that is a traditional IRA or 401K contribution.

[SPEAKER_14]: A post tax is a Roth contribution, whether that's a Roth IRA or a Roth 401K.

[SPEAKER_14]: Now remember, the only thing that matters,

[SPEAKER_14]: mostly what matters is what your tax rate today versus in the future.

[SPEAKER_14]: If in the future you're going to have the ability to do rough conversions, or maybe you'll make less money for whatever reason, then you want to wait, you want to put it into pre-tax and then do conversions later.

[SPEAKER_14]: If you're going to be in the lower tax bracket.

[SPEAKER_14]: But if you're in a relatively low rent tax bracket today, you think you're going to build wealth over time, you're going to have huge, I don't know, maybe you're in a business or you have a bunch of real estate that you're going to get income from in retirement.

[SPEAKER_14]: Whatever that is, if you're going to be in a higher tax bracket well into the future, well, a Roth contribution might make sense.

[SPEAKER_14]: So it's about being strategic.

[SPEAKER_14]: You don't want to look for ways to get money into a Roth IRA, but you want to do that at an advantageous tax rate.

[SPEAKER_14]: Here comes a YouTube comment, Richard Mortensen says, Core Documents reveal first brand's group had 1-10 billion assets and 10-50 billion in liabilities.

[SPEAKER_14]: Paris may have tipped this company into bankruptcy, but my opinion is that it was a poorly managed company.

[SPEAKER_14]: You're a thoughts.

[SPEAKER_14]: Yeah, there are plenty of poorly managed companies out there.

[SPEAKER_14]: And when you get into a situation of policy volatility, you are going to uncover businesses that took on too much debt, too much leverage.

[SPEAKER_14]: And in the private equity space,

[SPEAKER_14]: There is a ton of that, an absolute metric ton of poor lending businesses that were overlavered that are tied to physical products, to business models that rely on importing from a broad and those businesses are having a horrible time.

[SPEAKER_14]: in many instances.

[SPEAKER_14]: And first brands was just bigger.

[SPEAKER_14]: And therefore it had more tentacles.

[SPEAKER_14]: It had a lot of banks that were exposed, not just UBS, but many others.

[SPEAKER_14]: And so was it poorly managed?

[SPEAKER_14]: Yeah.

[SPEAKER_14]: That doesn't mean that terms weren't a big factor in what happened with their business.

[SPEAKER_14]: Now, you could look at Tri-Color as another example, poorly managed.

[SPEAKER_14]: It took too much risk with the whole industry.

[SPEAKER_14]: It took too much risk.

[SPEAKER_14]: And they were just trying to compete.

[SPEAKER_14]: But once again, that's what happens when you get an economic situation that is...

[SPEAKER_14]: deteriorating.

[SPEAKER_14]: The tide is going out.

[SPEAKER_14]: That doesn't look like it for massive races, but underneath the surface, the broader economy is weakening.

[SPEAKER_14]: Like I said, we're in the 8th or 9th inning of this.

[SPEAKER_14]: Can't keep going.

[SPEAKER_14]: Does mean that you have to tip in the recession tomorrow and next week or even next month.

[SPEAKER_14]: But it's probably next year.

[SPEAKER_14]: And these are signs of that.

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[SPEAKER_19]: 888-99 chart.

[SPEAKER_05]: I have looked and jumped them, this is a gap in one of the features.

[SPEAKER_05]: on the podcast, we're so involved in about purchasing stock for the Atlanta Breaks.

[SPEAKER_05]: And I know being made a pack is also a publicly traded and it's probably other sports teams as well.

[SPEAKER_05]: I thought it'd be kind of cool to give this stuff to like this to my boys, it's kind of like you said a novelty type thing.

[SPEAKER_05]: But I like giving something physical like a certificate showing how many shares of the stock that they'd be receiving but I'm not too sure.

[SPEAKER_05]: that's possible.

[SPEAKER_05]: Can you assure your knowledge on this, please?

[SPEAKER_05]: Thanks very much, Greg.

[SPEAKER_14]: This is a great question.

[SPEAKER_14]: Yes, you can get physical stocks certificates, but you do have to pay a fee.

[SPEAKER_14]: So, you need to talk to your broker, depends on the broker.

[SPEAKER_14]: The fee can range anywhere from 50 to as much as $500 and not all stocks are eligible.

[SPEAKER_14]: So,

[SPEAKER_14]: Yeah, it's a process, you know, back in the day, used to buy a stock, they automatically made it to you.

[SPEAKER_14]: There, you automatically got it, now it's no longer the case.

[SPEAKER_14]: So it is possible.

[SPEAKER_14]: And to be frank, I do think it's still a novelty, unfortunately.

[SPEAKER_14]: And when I say a novelty, I'm not talking, there's typically it's obviously a novelty, but the publicly traded sports teams, you know, they're going to add in flow.

[SPEAKER_14]: Most of them, they're not paying dividends, and unfortunately there's probably a lot of

[SPEAKER_14]: want to buy it for the novelty and say, hey, I own shares in the Atlanta Braves, so the Green Bay Packers or whatever.

[SPEAKER_14]: And I don't expect them to be, well, that's it.

[SPEAKER_14]: I expect a long term for them to be generally good investments.

[SPEAKER_14]: But they are going to be very volatile.

[SPEAKER_14]: Those are the type of names that a questionable near-term profitability that don't pay dividends.

[SPEAKER_14]: Those are names that get sold when times are

[SPEAKER_14]: in a drawer on a maybe on the wall?

[SPEAKER_14]: That's perfect setup for not having to worry about that volatility.

[SPEAKER_14]: So that's something to consider as well.

[SPEAKER_14]: So keep it a novelty.

[SPEAKER_14]: Don't get too overexposed to it no matter how much you love the team.

[SPEAKER_14]: Maybe you love the Atlanta Braves or the Green Packers or whatever.

[SPEAKER_14]: It's just not an asset that's going to enhance a portfolio in any major.

[SPEAKER_19]: This is an invest talk best of caller questions compilation program.

[SPEAKER_19]: Your comments and questions are always welcome call anytime 88899 chart that's 88899 CHART

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[SPEAKER_16]: Please call with questions, 888-99 chart.

[SPEAKER_16]: Let's go take a live call.

[SPEAKER_14]: Malcolm from Los Angeles wants to talk about the market.

[SPEAKER_13]: Hey, thanks for taking my call here.

[SPEAKER_13]: Yeah, I had a question about PE ratios.

[SPEAKER_13]: Yeah.

[SPEAKER_13]: I was talking to a friend of mine who works in finance.

[SPEAKER_13]: And he was showing me the latest trend in my PE ratios.

[SPEAKER_13]: If you follow the volatility, the PE ratio, you can kind of predict when the market's going to go up and down.

[SPEAKER_13]: And that seems like over-simplification.

[SPEAKER_13]: And I just want to get your guys take.

[SPEAKER_13]: Because I feel like you're predicting what the market's going to do in the future, there's more to it than that.

[SPEAKER_14]: Yes, absolutely.

[SPEAKER_14]: So, what you're talking about is a valuation measure.

[SPEAKER_14]: It's one valuation measure.

[SPEAKER_14]: It is a flawed valuation measurement, the P ratio, because the P is the market cap.

[SPEAKER_14]: It doesn't include the debt that these companies are holding.

[SPEAKER_14]: And then the E is,

[SPEAKER_14]: earnings per share, which can be manipulated by accounting gimmicks and things like that.

[SPEAKER_14]: So it is flawed in his own way.

[SPEAKER_14]: And frankly, key ratios are an apps you should never look at a key ratio to tell you where stock is going to go in the next three, six, nine, 12 months.

[SPEAKER_14]: It is almost completely irrelevant.

[SPEAKER_14]: far more about the market.

[SPEAKER_14]: Even the market is a whole because it's all about liquidity.

[SPEAKER_14]: If banks are lending, if there's more money in the system, money will flow into risk assets.

[SPEAKER_14]: If the opposite happening, money flows out of risk assets to plug the holes in the rest of the system, lack of liquidity in the rest of the system.

[SPEAKER_14]: Simple as that.

[SPEAKER_14]: That's over some location, but that's way, way, way, way, way more impact than what's happening going to happen in the market in the next three, six, nine, twelve months than the P ratio.

[SPEAKER_14]: The P ratio is almost completely irrelevant.

[SPEAKER_14]: Now, over a 10 year period, yes, it does have predictive power.

[SPEAKER_14]: But over a short to medium term time frame, it has almost no predictive power whatsoever.

[SPEAKER_14]: It should be completely ignored, especially on a market level.

[SPEAKER_14]: Do you understand that?

[SPEAKER_13]: Yeah, because what he was telling me is, like, I'm moving my clients into a defensive sort of position because, you know, the P ratio's up, and you can see that the

[SPEAKER_13]: S&P tracks the P ratio pretty closely if you look at like a 30 or 40 year time period.

[SPEAKER_14]: The P ratio has been elevated now for a while.

[SPEAKER_14]: So if he's using that, he should be put his clients in cash a couple years ago.

[SPEAKER_14]: And he would miss that on a huge rally.

[SPEAKER_14]: Why?

[SPEAKER_14]: Because look,

[SPEAKER_14]: Now, once it's getting less abundant, it's starting to turn, but it's not quite there yet.

[SPEAKER_14]: And we're getting a Fed that's going to embark on an easing cycle that's going to, even if liquidity is becoming an issue near-term, they already talk about ending QTE and lowering interest rates and creating that next bout of liquidity entering the market.

[SPEAKER_14]: and the yield curve steepening.

[SPEAKER_14]: So it's going to incentivize banks to lend more.

[SPEAKER_14]: And so these are aspects that at least in the near term are probably more tailwinds to liquidity and thus asset prices.

[SPEAKER_14]: Now, when that turns and if P ratios are high, then there can be a bigger drop because usually what happens is when markets are going up, everyone ignores the evaluation.

[SPEAKER_14]: Because, hey, make a money.

[SPEAKER_14]: Keep it going.

[SPEAKER_14]: When things turn and now the markets are trending down because liquidity's drying up, then they start to become valuation.

[SPEAKER_14]: stops.

[SPEAKER_14]: And then they care, oh, well, I ain't now.

[SPEAKER_14]: That's trading at 40 times earnings.

[SPEAKER_14]: It was at 50, 40, 40 still expensive.

[SPEAKER_14]: This could get out of 20.

[SPEAKER_14]: I'm going to sell.

[SPEAKER_14]: So, it does create more gravity when the market does turn, but the market could go up into the 2030% before it actually turns.

[SPEAKER_14]: So, do not use P ratios to time the market.

[SPEAKER_14]: It's a horrible, horrible, horrible way to time the market.

[SPEAKER_14]: Now, can the market turn and the art, can we start going through a topping process right now?

[SPEAKER_14]: Absolutely, that's possible.

[SPEAKER_14]: But that's not because of key ratios.

[SPEAKER_14]: That's because liquidity dynamics shift.

[SPEAKER_14]: And I've said this before.

[SPEAKER_14]: We're in the kind of the eighth inning.

[SPEAKER_14]: I think we're now in the bottom of the eighth in this growth cycle.

[SPEAKER_14]: And we're probably going through a little bit of battle volatility near term.

[SPEAKER_14]: Could it be the ninth inning soon?

[SPEAKER_14]: Maybe.

[SPEAKER_14]: But we're not there yet.

[SPEAKER_15]: Looks like we have a live call, Jared from Halifax in Canada.

[SPEAKER_09]: You got a question about oil?

[SPEAKER_09]: I'm looking at the oil just wondering if now would be a good time to get in.

[SPEAKER_09]: I hear people like Rick Rool and stuff like that saying it's a good contrary in play and good to get in some of these stocks and some of these names when everyone else hates them.

[SPEAKER_09]: I just wonder what your take is on.

[SPEAKER_09]: Maybe some like the big oil players like Exxon or Shell, what the headwinds and tailwinds for those would be at this time.

[SPEAKER_15]: Yeah, I think it depends on your investment horizon here.

[SPEAKER_15]: So we own some of the big guys in some of our strategies and a couple growth plays within the oil space.

[SPEAKER_15]: And you know, you still have global oil demand as growing.

[SPEAKER_15]: I'll be at a bit slower, geopolitical risks, could push prices up a bit.

[SPEAKER_15]: We're starting to see upstream investment following as well, which could limit long-term supply growth.

[SPEAKER_15]: All things that are in the long-term,

[SPEAKER_15]: good for oil prices.

[SPEAKER_15]: But as a short-term trade, certainly would not advise it.

[SPEAKER_15]: Risk is pretty elevated.

[SPEAKER_15]: Supply growth is still outpacing demand.

[SPEAKER_15]: You know, many forecasts are showing oil prices could fall within the next one to two years.

[SPEAKER_15]: There's some economic headwinds you're getting deteriorating, macroeconomic conditions.

[SPEAKER_15]: And all these things, the biggest one being that over supply, they're really boat well for the short-term for oil markets.

[SPEAKER_15]: So,

[SPEAKER_15]: You know, in the long term, oil is the lifeblood of an industrial economy for some time.

[SPEAKER_15]: It certainly will be a big part of that, and if your investment horizon is long enough, I think at these prices where oil's really had a rough time, and a lot of factors, a lot of headwinds, for the long-term it can be a good investment, but in the short term, I think it still has some issues that's facing.

[SPEAKER_15]: Thanks to the call.

[SPEAKER_09]: Okay, great.

[SPEAKER_09]: Thank Luke.

[SPEAKER_09]: We'll talk to you.

[SPEAKER_09]: But sounds good.

[SPEAKER_09]: Have a good one.

[SPEAKER_19]: On radio, on YouTube, streaming live on at vestalk.com.

[SPEAKER_19]: My question today is about the HME Equipment Services Inc. And for our podcast subscribers, if you're willing to take the risk in vestalk, if you're okay with that risk, with host and financial advisor, Justin Klein, and that volatility, go for it.

[SPEAKER_19]: And co-host and portfolio manager, Luke Guerrero.

[SPEAKER_19]: Is this company's fall like a rocket's down 52% in vestalk?

[SPEAKER_19]: Every body wants a secure, financial future.

[SPEAKER_19]: Richard, you have a question about TOL, but getting there takes strategy, discipline, and the right information.

[SPEAKER_14]: What are what you think of the price of it?

[SPEAKER_14]: Go to Chris in Maine, looking at IEX.

[SPEAKER_10]: Hey Justin, I own it, just seeing what you thought of it.

[SPEAKER_19]: Invest talk is made better by listener contributions.

[SPEAKER_19]: So don't forget to call 888-99 chart.

[SPEAKER_10]: I had a question about my portfolio.

[SPEAKER_10]: So I'm 31 years old and a few years ago, I read a book by J.L.

[SPEAKER_10]: Collins that advised people to just stick with D.T.

[SPEAKER_10]: Sacks, mutual fund with Vanguard, that is comprised of over 300 stocks.

[SPEAKER_10]: It is currently about 60% of my portfolio and I'm a little concerned because after reviewing it more and more,

[SPEAKER_10]: dollar cost average into it but it's about 38% tech and right now it's doing great up at least like 50 to 60% but obviously we're at a high point in the market.

[SPEAKER_10]: I don't want to push myself into a higher tax bracket by selling off because I don't have some losses to offset the gains, but I'm just curious what you would do here as a young investor.

[SPEAKER_10]: You kind of just hold it for like the long term or would you still take profit in this case even if it means possibly raising your tax bracket.

[SPEAKER_10]: Thank you very much.

[SPEAKER_10]: I hope you have a great day.

[SPEAKER_14]: Great question, a lot of people are in this situation.

[SPEAKER_14]: It's one of the reasons why we now have what's called direct indexing, which helps clients like you kind of diversify without taking the tax it.

[SPEAKER_14]: But if you're not doing that, I do think this is a time to start diversifying.

[SPEAKER_14]: Your goals are good example, right?

[SPEAKER_14]: Gold's been doing very well.

[SPEAKER_14]: And you're not going to be able to do that.

[SPEAKER_14]: these vanguard funds, they don't have any exposure there.

[SPEAKER_14]: I think diversity definitely helps in diversity amongst asset types is very important, because right now gold's crushing equities.

[SPEAKER_14]: And there are long periods of time where gold absolutely does much better in an

[SPEAKER_14]: I think that's one of the big reasons why gold is is going up, it's signaling to the market that there are problems not just economically but politically worldwide as well.

[SPEAKER_14]: Now, should you take a huge tax it to do that?

[SPEAKER_14]: It wouldn't necessarily say that.

[SPEAKER_14]: I would do it prudently.

[SPEAKER_14]: You know, I think it's one of the big mistakes most people make is by avoiding taxes.

[SPEAKER_14]: They don't prudently allocate.

[SPEAKER_14]: This guy, I want to take the tax it.

[SPEAKER_14]: But usually what happens is they hold on too long and then bad times happen.

[SPEAKER_14]: The market turned and now those gains are drastically reduced or sometimes they disappear completely.

[SPEAKER_14]: So paying taxes, Steve always said this, they're good problems, they're bad problems.

[SPEAKER_14]: Paying taxes is a good problem.

[SPEAKER_14]: It's telling you that you made money, it's a good problem to have.

[SPEAKER_14]: So you don't need to go overboard, I want to push your whole income into a new tax bracket, but maybe staying within your current tax bracket and take that level of gains right now.

[SPEAKER_14]: And then do it again next year, because we're approaching 2026 now.

[SPEAKER_14]: and start to diversify strategically.

[SPEAKER_14]: Slowly, you don't have to do all at once, and that's one of the issues most people have is I think everything's black and white.

[SPEAKER_14]: Well, the reality of the world is, there's shades of gray.

[SPEAKER_14]: The world is shades of gray.

[SPEAKER_14]: Anybody who views everything is left in and right or black and white or yes or no or up or down, you're missing the real world.

[SPEAKER_14]: The real world operates somewhere in the middle, the truth lies somewhere in the middle.

[SPEAKER_14]: And so I don't like that you talk about that book.

[SPEAKER_14]: Just put it in VT or whatever I've heard of what which one it was, you know, I think that can be great for you.

[SPEAKER_14]: But if your eyes white open and you understand history, you know that what equity should be, they'll probably the largest chunk of allocation shouldn't be the only chunk of allocation.

[SPEAKER_15]: Skipping, so having a fresh listener question came in on 80 to 99 chart.

[SPEAKER_20]: Tide, Luke, and Justin, I'm calling in from Orange County, California, and I have a question about converting a traditional hyerah to a Roth, and to start with I'm 60, so I'm not worried about the 59 and a half rule.

[SPEAKER_20]: but I am curious about how the five-year rules work.

[SPEAKER_20]: It's a true that I can take out the original amount at any time, but I cannot touch the earnings.

[SPEAKER_20]: Anyway, any information you could provide will be great.

[SPEAKER_20]: Thank you.

[SPEAKER_15]: That's a great question.

[SPEAKER_15]: So the five-year rule for Roth conversions says that each conversion has its own five-year clock before you can withdraw the converted principle, penalty free, if you are under the age of 59 and a half,

[SPEAKER_15]: Now the clock doesn't start on the date you make the conversion it starts on January 1st of the year you made your conversion not that actual date.

[SPEAKER_15]: The rule only affects the 10% early withdrawal penalty on converted amounts, not taxes because when you're doing this conversion right the whole idea is you take from your traditional Roth, you're paying the taxes and then you convert it.

[SPEAKER_15]: Now, once you hit that age of 59 and a half, the five-year conversion rule stops mattering only the separate five years since your first Roth contribution rule applies for tax for the throws earnings.

[SPEAKER_15]: And it determines when your earnings that your contributions can be withdrawn tax-free from your Roth.

[SPEAKER_15]: So again, if you're over 59 and a half that rule only applies to the first contribution year and similar to that general five year rule, it also starts on January 1st of the year you made that first contribution.

[SPEAKER_15]: So you know, understanding kind of the benefits of converting from a traditional into a Roth and understanding that age requirement there can help navigate your distributions.

[SPEAKER_16]: Thanks to the call.

[SPEAKER_16]: Invest talk is ready 24-7 for your finance and investment questions.

[SPEAKER_16]: My five-year-old son and I listened to your podcast every night, so thank you very much for putting it on.

[SPEAKER_16]: Justin Klein is here and ready to tackle your questions.

[SPEAKER_17]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest in the better stocks?

[SPEAKER_04]: Wondering, what you thought about this read is it would be a good time to get in.

[SPEAKER_12]: I wanted to pick your reign about Apple.

[SPEAKER_12]: What did you think about their earnings call?

[SPEAKER_12]: This is a good time to add to my position.

[SPEAKER_16]: Don't forget to call.

[SPEAKER_16]: In Best Talk, 888-99 chart.

[SPEAKER_04]: Hi, I'm Best Talk.

[SPEAKER_04]: Today my question is about cash management, I'm about 15% cash and I just feel like it's not doing anything for me.

[SPEAKER_04]: So my idea was to increase my position and one of these derivative income ETFs that sell call options and have the high dividend of course.

[SPEAKER_04]: my position in one of these ETFs and then I would buy the indexes and then hopefully write it into the next full market.

[SPEAKER_04]: But now I'm having second thoughts because I listen to which I've been saying to be careful about these derivative income ETFs.

[SPEAKER_04]: So any guidance you could provide would be great.

[SPEAKER_04]: I just want to be prepared for when the markets come down a bit.

[SPEAKER_14]: Great question, and I like that you are embodying our, are warning that these derivative ETFs are not all they're cracked up to be.

[SPEAKER_14]: That, yes, they might, they might make a look like they have these huge yields, but what you need to focus on are the total returns.

[SPEAKER_14]: And sometimes that can be good, sometimes, that's okay.

[SPEAKER_14]: do not when you're looking at these derivative ETFs focus just on the yield because it's not really a yield.

[SPEAKER_14]: It's not.

[SPEAKER_14]: A lot of them you look the prices decline and they're giving your money back.

[SPEAKER_14]: Many instances.

[SPEAKER_14]: So your total growth of your portfolio is not double digits.

[SPEAKER_14]: So if you think the market is going to pull back,

[SPEAKER_14]: passion, you know, you probably want it in something that's yielding something decent, like a short-term treasury fund or a high yield money market fund, something like that.

[SPEAKER_14]: So make sure it's in something like that.

[SPEAKER_14]: But if you think the markets want to pull back, these high yields or these these derivative ETFs are not going to help you, most of them are covered call ETFs.

[SPEAKER_14]: And if the market goes down 20%, you can go down less than the overall market.

[SPEAKER_14]: Yes, but you're still going to go down.

[SPEAKER_14]: Do not think they're a panacea.

[SPEAKER_14]: They are simply wall-dampening.

[SPEAKER_14]: That's what it is designed to do.

[SPEAKER_14]: They're going to use, and this is my issue with the SEC, they're not cracking down on the things they need to.

[SPEAKER_14]: in order to protect and inform the average retail investor they're allowing these funds to quote some big yield when the reality is it's not not real yield.

[SPEAKER_14]: So I would just keep the cash if you were trying to capitalize on a market downturn in the next year or so.

[SPEAKER_19]: You are listening to an invest talk best of call or questions compilation program.

[SPEAKER_19]: Your comments and questions are always welcome.

[SPEAKER_19]: Call anytime 88899 chart.

[SPEAKER_19]: That's 88899 CHART.

[SPEAKER_19]: This is an invest talk best of call or questions compilation program.

[SPEAKER_19]: Your comments and questions are always welcome, call anytime, 888-99 chart, that's 888-99 CH-A-R-T.

[SPEAKER_06]: My question was how are you guys determined when you say that a company has a lot of debt or does not have much debt.

[SPEAKER_06]: How do you determine that thank you?

[SPEAKER_15]: Yeah, so that's a great question because I think there's no simple answer here.

[SPEAKER_15]: So one thing you can look at is what is a company's long-term debt relative to its equity?

[SPEAKER_15]: How much is a company paying an interest relative to its earnings before interest in taxes?

[SPEAKER_15]: The capitalization definitely matters, but what's servicing that debt costs matters as well.

[SPEAKER_15]: The company that has a loan out for 60 years, at 1%, but it's the same amount of debt due next year, at 10%, those two things are the same.

[SPEAKER_15]: So it's not just the amount of debt, but the maturity of the debt, the interest on the debt, what that cost is actually going to incur to the company.

[SPEAKER_15]: And you can't really just look at it in isolation either.

[SPEAKER_15]: Different industries have different natural, if you will, levels of debt, necessary utilities, water debt, new companies could have debt, energy companies could have a lot of debt, telecommunications companies.

[SPEAKER_15]: So you have to look at it within the context of the industry and the sector as well.

[SPEAKER_15]: But understanding the best way to look at this,

[SPEAKER_15]: Can I be stay away from companies that put you in debted peril?

[SPEAKER_15]: Thanks for the call.

[SPEAKER_11]: Hi, Duncan from New York.

[SPEAKER_11]: Thank you for all that you do.

[SPEAKER_11]: I actually have a question about a 529 plan.

[SPEAKER_11]: I am preparing for the future single, but I already have one, 529 plan available.

[SPEAKER_11]: I'm thinking about opening up another one because what I would like in my life is two kids.

[SPEAKER_11]: So I'm trying to think it advanced.

[SPEAKER_11]: But my question is, with this 529 plan that I already have,

[SPEAKER_11]: growth about 4.4% year over year and obviously compared to the stock market, the S&B 500 index seems like it's over like 10%.

[SPEAKER_11]: I might be suffering from phomo right now so I will admit that, but in that individual 529 plan it seems like it's mostly bonds that I have and a little bit of a domestic and international stocks.

[SPEAKER_11]: If I want to have a second kid, I'm thinking about sitting

[SPEAKER_11]: Should I just open up a regular brokerage account and then just invest in like a Vanguard ETF rather than an individual 529 plan because it doesn't seem like that much promise and growth.

[SPEAKER_11]: And then the last question is, okay, let's say I don't have it.

[SPEAKER_11]: It gets at all.

[SPEAKER_11]: What is another way to kind of use this money to?

[SPEAKER_11]: Because I know this is really for education-wise.

[SPEAKER_11]: So looking forward to some help and have a great day.

[SPEAKER_11]: Bye.

[SPEAKER_14]: Well, first off, you just may be in a bad 529 plan.

[SPEAKER_14]: There's 50 in the country, and you can move it from one state to another.

[SPEAKER_14]: And...

[SPEAKER_14]: First of all, you want to just look at the options within your 529.

[SPEAKER_14]: So what it's in now doesn't mean that that's all you can invest in.

[SPEAKER_14]: And I can almost guarantee that you have options that are just investing in the S&P or the broader market.

[SPEAKER_14]: So that's what you look at first.

[SPEAKER_14]: If that if you're looking to get Mark performance, well, I could almost guarantee you you can get that.

[SPEAKER_14]: You just have to go.

[SPEAKER_14]: and change the investments within your 529.

[SPEAKER_14]: And I'm saying that's the best option, but sounds like that was what you are looking for.

[SPEAKER_14]: So I would start there and then maybe think about opening another 529.

[SPEAKER_14]: Now, if you don't have another kid,

[SPEAKER_14]: I don't think you want to do that.

[SPEAKER_14]: You want to bank on that.

[SPEAKER_14]: Life changes the mysterious ways sometimes.

[SPEAKER_14]: So I would go about it that way.

[SPEAKER_14]: Address to be patient and change your investment allocation within your current five for me.

[SPEAKER_14]: That's a little.

[SPEAKER_08]: This is Daniel and Tennessee.

[SPEAKER_08]: Really enjoy your podcast and that has a general question for you.

[SPEAKER_08]: When you give a recommendation on your show for a buy-in,

[SPEAKER_08]: I was curious if, if, if I already own it, should I go ahead and be looking to sell it?

[SPEAKER_08]: Or should I just hold on to it since I already own it, just kind of curious for your perspective there.

[SPEAKER_08]: Thank you.

[SPEAKER_14]: Well, it depends on your time horizon, you know, when we're looking at a company we should look at F5 for example.

[SPEAKER_14]: uh... cheery owns it you know could it go down to twenty sure but that it just because i have a price started with the biggest work doesn't mean it's actually going to get there it just means that there you know when you're reading a chart or anything like a chart in general this is something that is more of an art in a science it put the odds in your favor but like anything you're not going to

[SPEAKER_14]: It's not going to always be that way.

[SPEAKER_14]: Things can happen, you can have that macroeconomic changes, broader market changes, particular companies can come out new news and suddenly that boosts a stockboard or makes things even worse.

[SPEAKER_14]: You really never know, but it's based on the data that I have now, the chart patterns.

[SPEAKER_14]: Overall, et cetera.

[SPEAKER_14]: So no, I wouldn't go for example that color.

[SPEAKER_14]: I wouldn't go sell it just because I think it's gonna go from 240 to 20 and be You try to get in in 2020.

[SPEAKER_14]: That's why I say I would just hold it know that there's probably some downside potentially to 20 But I wouldn't be jumping ship to get cute and capture that 20 dollars.

[SPEAKER_14]: Thanks for the call

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[SPEAKER_16]: or shell statements on this program be considered an offer to buy or sell security.

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