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[SPEAKER_04]: 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_04]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

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[SPEAKER_04]: Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

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[SPEAKER_00]: Good afternoon fellow investors, and welcome back to Invest Talk.

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[SPEAKER_00]: This is our January 2nd, 2026 edition, and I wish everyone a happy new year out there.

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[SPEAKER_00]: Grazie, very interesting year of 2025, it is in the books, overall, good year for asset prices.

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[SPEAKER_00]: But we all know that

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[SPEAKER_00]: each year tends to bring new surprises, new trends, and usually is different than the previous year.

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[SPEAKER_00]: That's simply a fact.

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[SPEAKER_00]: Go back.

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[SPEAKER_00]: Number of years.

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[SPEAKER_00]: How many of those years looked very, very similar back to back?

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[SPEAKER_00]: None of them.

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[SPEAKER_00]: They're all different in their leadership, in their performance, when the volatility hit in the giving year, because there's always some part of the year that there's there's a little bit of volatility.

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[SPEAKER_00]: And that means that you, in some ways, you

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[SPEAKER_00]: You crankle up the last year and you throw in the trash.

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[SPEAKER_00]: Now you take some lessons from it, but you don't say, hey, this work, or this has been working, that that's automatically going to work going forward.

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[SPEAKER_00]: recess and adjust your portfolios.

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[SPEAKER_00]: That's why rebalancing is typically good.

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[SPEAKER_00]: This time of year, especially if some gainers, maybe you didn't want to take them in 2025, now you can, those type of decisions that you make earlier in the year, and set your portfolio up for success.

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[SPEAKER_00]: And that's what we are here to help you with, is to help you become a more successful investor.

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[SPEAKER_00]: Bye,

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[SPEAKER_00]: not using fear and greed, not chasing performance, not freaking out on headlines and things like that, but really focusing on the task of hand and the data that is real, not what, not the way the world

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[SPEAKER_00]: You hope will be it's how the world is and that's what we are here to unpack and give you data and perspective so that you can take it back to your own personal situation.

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[SPEAKER_00]: And we will do that throughout the year.

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[SPEAKER_00]: So tune in regularly and catch what updates we have for you.

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[SPEAKER_00]: Now I'm Justin Klein and my objective is to answer your findings and investment.

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[SPEAKER_00]: questions bring you perspective so that you can make better decisions with your money.

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[SPEAKER_00]: That's of this hour.

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[SPEAKER_00]: Each and every weekday on a best talk is about.

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[SPEAKER_00]: Now in just a bit, we'll talk about today's Mark performance.

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[SPEAKER_00]: To start the year and run down the show topics that we'll hit on throughout the hour.

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[SPEAKER_00]: But as usual, tackle this first call a question now.

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[SPEAKER_06]: Hi, guys.

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[SPEAKER_06]: I was calling it your thoughts on Celsius.

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[SPEAKER_06]: You stuck to your CELH.

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[SPEAKER_06]: And this is the fact that I was in a couple of years ago, a year ago, but wrote it all the way up, started selling around the 50s and then eventually got out on 60s just before it fell.

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[SPEAKER_06]: It's now dropped quite a bit since there.

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[SPEAKER_06]: It's found some support.

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[SPEAKER_06]: I recently opened up another small position in the company just before Christmas.

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[SPEAKER_06]: And I was thinking about adding some more.

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[SPEAKER_06]: Just curious to hear you guys thoughts and if you think that's a good play, thanks, Steph going.

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[SPEAKER_00]: All right, looking at Celsius and this is actually a name that bought for my PA back earlier last year when it was trading down around in the 20s and definitely got out of to early, but you know, it's it still looks I got out of it because it got expensive and it still expensive, even though that it's falling from a 52 week high right around 60 $6 per share now it's at 47 down 28% from that high still based on

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[SPEAKER_00]: Now this year's expected earnings, 2026 earnings of $1.49, you're talking still about a 30 times multiple.

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[SPEAKER_00]: It's still a little rich for my blood.

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[SPEAKER_00]: I wouldn't be aggressive picking it up at these levels, especially because analysts estimates are coming down for earnings.

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[SPEAKER_00]: And if you look at things like enterprise value the EBITDA, it's at 34 times,

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[SPEAKER_00]: And, you know, I think that still is not as cheap as it was earlier, kind of late last year, earlier, sorry, late 2024, I'm going to use this now and earlier last year when it was closer to the mid 20s.

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[SPEAKER_00]: And so, I think there's still some more downside to go, especially with the trends in earnings.

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[SPEAKER_00]: I like that they don't have much debt, that's a positive, they have good cash flow, I like that.

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[SPEAKER_00]: But I would want to get this back closer to the mid to low 30s, that's where I would pick up Celsius, CELH is the symbol.

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[SPEAKER_00]: Thanks for the call.

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[SPEAKER_00]: Then we have a lot of ground to cover over the next 45 minutes or so and here is what we have planned time of permitting.

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[SPEAKER_00]: Our main focus point is about passive investing and it's easy when everything goes up and we explain why 2026 might require a more hands-on approach to your portfolio and why

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[SPEAKER_00]: paying active fees for passive performance.

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[SPEAKER_00]: We teach you how to really dig into, well, you own, know what you own and make sure that you aren't owning a closet indexer as well.

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[SPEAKER_00]: So we're gonna dig into the active versus passive debate and unpack that a little bit more.

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[SPEAKER_00]: In addition, we have other topics on the docket.

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[SPEAKER_00]: One is software stocks.

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[SPEAKER_00]: There's a lot of scrutiny now that AI is disrupting the software space.

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[SPEAKER_00]: And you, you know, it was all about cloud computing.

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[SPEAKER_00]: Remember, that was kind of the early 2010s when cloud computing really took off and all these cloud software SaaS names were crushing it.

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[SPEAKER_00]: Now with AI,

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[SPEAKER_00]: Programmers are company that know we've done ourselves.

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[SPEAKER_00]: We are actively internally at KPP building our own tools that we used to pay for a subscription.

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[SPEAKER_00]: Now, it's only a bit of a couple of tools that we're doing, but over time, that's going to build, and I think a lot of companies are going to be able to do that.

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[SPEAKER_00]: And so what does that mean for SaaS software companies?

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

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[SPEAKER_00]: Also, the condo market, the condo market is struggling and that usually is the first place where we can listen to housing market shows up so we'll dig into that story.

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[SPEAKER_00]: And then lastly, capital rules around treasuries, those are changing, so we'll get into that topic as well if we have time what that means for the treasurer market and the banking industry.

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[SPEAKER_00]: Now we log around to cover over the next 45 minutes and we will be talking about innovative technologies and your voice bank calls on that as well as water investment opportunities and of course

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[SPEAKER_00]: Your questions that came in via the Invest Talk YouTube channel as well, and most importantly, it will be your live calls at 888-989 chart.

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[SPEAKER_00]: But we're going to a break, please remember, call any time and leave your question on the Invest Talk Voice Bank, and if you're listening on our live stream or an aim 1220 in the Bay Area, you can call it right now at 888-989 chart.

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[SPEAKER_00]: Hang on because I'm going to today's market activity coming up next.

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[SPEAKER_01]: Serious investors are certain to have, finance, and investment questions.

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[SPEAKER_01]: What do you think is the good price?

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[SPEAKER_01]: And the best person to ask your question in the right way is you.

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[SPEAKER_00]: I was wondering from your standpoint, if they're at downside, in buying fractional shares versus whole shares.

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[SPEAKER_01]: and 24-7 rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased dancers.

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[SPEAKER_00]: But technically, right now, I like it, I like the momentum, but what's going to don't like those fundamentals?

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[SPEAKER_02]: Now, while gold is hitting these record highs, it's driven by the safe haven to manned by central bank buying across the board.

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[SPEAKER_01]: Your participation makes an invest talk better.

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[SPEAKER_02]: I'm calling to ask about core in Maine.

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[SPEAKER_02]: This is Josh and North Carolina.

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[SPEAKER_02]: This is Marlow from George City area.

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[SPEAKER_01]: Let's take a live call, Sam from San Jose.

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[SPEAKER_01]: So don't forget to call, Invest talk.

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[SPEAKER_01]: Great advice.

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[SPEAKER_01]: Thank you.

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[SPEAKER_01]: 888-99 chart.

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[SPEAKER_01]: It's a new year.

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[SPEAKER_01]: 2026 is here and so is Justin Klein.

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[SPEAKER_01]: He's taking your finance and investment questions any time.

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[SPEAKER_01]: Call in Vestock 88899 chart.

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[SPEAKER_01]: 899 chart, 899 to 427.

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[SPEAKER_00]: He's how you get through and ask your question on today's show per show of the new year.

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[SPEAKER_00]: So maybe we'll be the first caller for the new year.

09:40.160 --> 09:40.962
[SPEAKER_00]: Let's take a look at the market.

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[SPEAKER_00]: It was a very interesting day overall positive S&P up up 13 points, up 0.19% down to the best up two thirds of 1% and the NASDAQ actually was down slightly a large cap growth to start the year, very interesting here.

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[SPEAKER_00]: uh it is just the set up for the rest of the year we shall see but it underperforms actually down every other style factor large value small cap blend mid caps all of that they were actually up on the day actually small cap growth of 1.5% large cap value up 0.61% on the day so very interesting the foreign markets did well also so continued kind of trend that we saw at the end

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[SPEAKER_00]: The tech sector was starting to struggle, and you started to see harder assets do better.

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[SPEAKER_00]: You saw that to start 2026 as well.

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[SPEAKER_00]: It names like Tesla down 2.6% after really, really bad delivery numbers with their cars for Q4.

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[SPEAKER_00]: Microsoft down 2.2% Amazon down a little less than 2% as well.

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[SPEAKER_00]: And met it down one and a half percent.

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[SPEAKER_00]: Google and Vita, those EqDoutgames, Apple,

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[SPEAKER_00]: And then you dig into things like Netflix down 3% on the day.

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[SPEAKER_00]: Palins here down 5.5% on the day sales for them for sales 4.6, excuse me, down 4.

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[SPEAKER_00]: App loving down 8.

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[SPEAKER_00]: So a lot of the high flying retail names certainly took it on the chin in the tech space.

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[SPEAKER_00]: Now what was strong on the day?

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[SPEAKER_00]: The manufacturing space.

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[SPEAKER_00]: You had some of the conductors in general were strong.

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[SPEAKER_00]: You had the video of 1.6%.

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[SPEAKER_00]: But you had some other anything around AI and AI spending.

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[SPEAKER_00]: It did well.

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[SPEAKER_00]: And that's what's interesting here is,

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[SPEAKER_00]: Is this saying that these hyperscalers are spending too much and, yeah, they're going to continue to spend.

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[SPEAKER_00]: It's going to hurt their overall returns.

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[SPEAKER_00]: It's the benefit of the picks and shovels within the AI space, think of the caterpillar was that 4% today.

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[SPEAKER_00]: A lot of the industrial names up nicely on the day, energy, you had uranium, up strong, et cetera.

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[SPEAKER_00]: All those did fairly well.

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[SPEAKER_00]: Consumer services, consumer non-dervils, that was red, financials broadly were strong, so that was good.

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[SPEAKER_00]: So definitely a mixed picture here, but a lot of green to be honest with you.

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[SPEAKER_00]: It just was more in the chipspace and the industrial space, harder assets, those did well on the day.

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[SPEAKER_00]: not so much now when it came to other assets you had treasuries were about flat yields up about three bases points at the long end of the curve but on the short end kind of flat dollar index up point one percent golden is down point three percent on the day and about a 4.9 percent

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[SPEAKER_00]: weekly decline, the worst since June of 2021.

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[SPEAKER_00]: So definitely a pullback in gold on the week.

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[SPEAKER_00]: Bitcoin features up two and a half percent.

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[SPEAKER_00]: Still hanging around that 90,000 mark, feeling the downtrend as long as it's below 100,000, but kind of hanging in there right around 90,000.

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[SPEAKER_00]: So still kind of neutral to slightly bearish on Bitcoin.

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[SPEAKER_00]: That would be that crude down point two percent, but up nearly 1%.

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[SPEAKER_00]: for the week.

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[SPEAKER_00]: Petting home sales increased 3.3% in November, beating consensus for a 1.8% increase.

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[SPEAKER_00]: October is at 1.9.

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[SPEAKER_00]: So housing market, at least on the sales, so getting a bit better, but obviously from very, very low levels.

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[SPEAKER_00]: What else do we have?

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[SPEAKER_00]: You had a, you had,

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[SPEAKER_00]: Let's see anything else yeah global manufacturing PMA came at 51.8 that was about in line with consensus but down from 52.2 in November.

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[SPEAKER_00]: So still growth in global manufacturing but definitely slowing new orders decline for the first time in a year.

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[SPEAKER_00]: So that was the market today mixed bag as we start the year but definitely some weakness over on the tech side.

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[SPEAKER_00]: What I'm said, I can't say his username.

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[SPEAKER_00]: It's complicated, but it says, I have been under contributing to my retirement accounts.

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[SPEAKER_00]: Instead, choosing to invest more in my standard brokerage account.

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[SPEAKER_00]: So, we'd have unpenalized access to my money.

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[SPEAKER_00]: I have been doing this because I've been in have very high hopes of a retirement early however I recently stumbled across rules 172T is rule as simple as sounds can you please discuss this rule as little as I've never really heard of it addressed anywhere also where does the standard tax will brokish account fit in with a retirement strategy.

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[SPEAKER_00]: I'll address the last part.

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[SPEAKER_00]: I do think a standard taxable brokerage account is under-appreciated in a retirement session.

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[SPEAKER_00]: All your money does not have to go into an IRA or 401k.

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[SPEAKER_00]: There is flexibility with when you take the gains in a retirement account, you long-term, so excuse me, when you take gains in a taxable account, you can do long-term capital gains, you get locked in enough of a gains that you hold it for a year or more.

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[SPEAKER_00]: and so you get a lot for a lot of people lower tax rate, especially if you are in a high tax bracket, when you take them on the IRA or a 401k.

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[SPEAKER_00]: So I think it's good to have a bit of diversity.

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[SPEAKER_00]: Now what is the rules 72T?

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[SPEAKER_00]: It allows penalty free withdrawals by taking

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[SPEAKER_00]: Consistent amount of money out over at least five years or until age 59.5, whichever is longer, whichever is longer, avoiding the standard 10% penalty.

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[SPEAKER_00]: Now you have to do that consistently over time, but this is complex.

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[SPEAKER_00]: It is not simple.

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[SPEAKER_00]: You need to talk to a CPA to make sure you are within the rule.

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[SPEAKER_00]: So there are ways to take money out penalty free, but has to be consistent.

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[SPEAKER_00]: and needs to hear to the IRS rule.

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[SPEAKER_00]: So I like that you brought it up, but make sure you consult an account before doing it.

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[SPEAKER_00]: Now I'm moving you to a break.

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[SPEAKER_00]: I'm ready for your calls now at eight and a day nine and a short one.

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

16:07.061 --> 16:15.693
[SPEAKER_01]: Now the torch has been passed and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.

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

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[SPEAKER_01]: 888-99-Chart

16:29.125 --> 16:39.406
[SPEAKER_00]: Now, passive investing is easy when everything goes up, but let's explain why 2026 might require a more hands-on approach to your portfolio.

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[SPEAKER_00]: Now, the Magnificent 7 has carried the market for years, and the question is, if they stumble, stock picking, maybe they'll only game in town.

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[SPEAKER_00]: Okay.

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[SPEAKER_00]: Now, the passive and active debate continues to go on, and people ask things like why pay higher fees for an active manager or what I can just buy the S&P.

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[SPEAKER_00]: We also say, do active managers actually outperform during market downturns.

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[SPEAKER_00]: Another question might be, how do I tell a clause the indexer apart from a truly active fund manager?

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[SPEAKER_00]: So we'll answer all those questions.

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[SPEAKER_00]: I'll answer the last one first.

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[SPEAKER_00]: And that is, clause indexer from a sector perspective, typically looks a lot like the indexes.

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[SPEAKER_00]: The only way to truly, I'll say the only way.

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[SPEAKER_00]: The best way to truly outperform is to pick the sectors that are underrepresented in the index and that are going to offer for.

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[SPEAKER_00]: Okay, so if your mutual fund or ETF looks a lot like the indexes from a sector perspective, your paying higher fees really for most likely not much gain.

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[SPEAKER_00]: Okay, so make sure if you're buying active, it's truly active, number one.

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[SPEAKER_00]: They'll talk a little bit about the cyclical nature and the big picture around the performance moves of active versus passive.

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[SPEAKER_00]: And why, you know, it may not be dead, okay, might not be dead, active, it may not be dead.

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[SPEAKER_00]: Why is that?

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[SPEAKER_00]: It's because over time, there are extended periods and we're looking at about the last 35 years.

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[SPEAKER_00]: And what you can see if you can't see the chart.

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[SPEAKER_00]: But the history shows is that there are various periods where passive algorithms and active outperforms.

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[SPEAKER_00]: So despite the fact that let's see, looking at the last 10 and the last 11 years, passive has outperform active.

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[SPEAKER_00]: Only in 2022, that's when active actually beat passive.

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[SPEAKER_00]: But that was 12 years and 12 years sounds like a lot, but if you go back in history, you'll see that through like the 19, there early 2010s from 2020, sorry, that's much of it.

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[SPEAKER_00]: From 2000 to 2009, passive underperformed in a big, big way, nine out of those 10 years.

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[SPEAKER_00]: From 2000 to 2009, active outperformed.

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[SPEAKER_00]: Think about that.

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[SPEAKER_00]: active outperforms, five out of the 10 times.

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[SPEAKER_00]: And of course, the past 35 years, active outperforms 17 times, while passive outperforms 18 times.

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[SPEAKER_00]: Think about that.

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[SPEAKER_00]: So it's roughly a 50 50 shot.

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[SPEAKER_00]: And the same holds true.

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[SPEAKER_00]: And what this is, what this looking at is large cap blend.

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[SPEAKER_00]: That's, you're buying the S&P.

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[SPEAKER_00]: That's a large cap blend fund.

19:41.056 --> 19:45.941
[SPEAKER_00]: So what that's what they're looking at is OK. Large cap blend versus other large cap blend.

19:47.343 --> 19:49.345
[SPEAKER_00]: Mutual funds, ETFs, et cetera.

19:50.326 --> 20:00.977
[SPEAKER_00]: And this trend holds true the cyclicality of outperformance holds true for mid-cap funds, mall cap funds, international funds, et cetera.

20:01.700 --> 20:02.181
[SPEAKER_00]: Why is that?

20:02.381 --> 20:12.796
[SPEAKER_00]: Well, because investors naturally, they tend to lean too far in one direction after an extended period of outperformance.

20:12.816 --> 20:14.158
[SPEAKER_00]: They chase that performance.

20:14.619 --> 20:21.029
[SPEAKER_00]: No, as that do, it makes that particular side of the market overpriced.

20:21.049 --> 20:28.279
[SPEAKER_00]: And we know that almost all assets have their day in the sun and then they river it to their meat.

20:28.299 --> 20:30.863
[SPEAKER_00]: And that's what happens in active versus passive as well.

20:31.130 --> 20:35.475
[SPEAKER_00]: And so there's no clear winner over the past 35 years.

20:36.036 --> 20:40.842
[SPEAKER_00]: Yes, over the past 12 or 13, but not over the past 35.

20:42.464 --> 20:58.183
[SPEAKER_00]: Now, this cyclicality is something that you have to really embody in your strategy and know that while 12 of your seems like a long time, it really isn't in the history of markets.

20:58.231 --> 21:04.036
[SPEAKER_00]: So you should consider the current market conditions and what the future is likely to hold.

21:05.238 --> 21:06.178
[SPEAKER_00]: No doubt, valuations.

21:06.999 --> 21:13.405
[SPEAKER_00]: Right now, almost all sectors in the S&P are trading in the premiums of the historical average.

21:15.327 --> 21:19.070
[SPEAKER_00]: The only one that isn't actually is communication services, pretty interesting.

21:19.371 --> 21:22.954
[SPEAKER_00]: Now, why is that because a lot of those names have a lot of debt, think you're AT&T and Verizon's of the world?

21:23.454 --> 21:25.116
[SPEAKER_00]: So sometimes that's adjustable.

21:27.087 --> 21:29.430
[SPEAKER_00]: And then it comes back to corrections as well.

21:30.932 --> 21:40.204
[SPEAKER_00]: There been 28 market corrections over the last 35 years and active outperform passive in 22 of those 28 corrections.

21:42.206 --> 21:50.517
[SPEAKER_00]: And they drastically outperformed in the 2000 crash by about 8 percentage ones.

21:51.418 --> 21:51.879
[SPEAKER_00]: Why is that?

21:52.319 --> 21:55.103
[SPEAKER_00]: Because they were way more underweight tech in tech.

21:55.285 --> 22:02.395
[SPEAKER_00]: obviously dropped considerably during that time is that is that repeating right now is the big question.

22:03.757 --> 22:05.399
[SPEAKER_00]: And that's something you definitely have to consider.

22:06.400 --> 22:13.050
[SPEAKER_00]: So understand that 12, 13 years is not a long period of time in the history of markets.

22:13.470 --> 22:19.699
[SPEAKER_00]: And if you study that history, you'll know that, you know, we're probably answering your period or active, we'll have performance again.

22:20.420 --> 22:21.261
[SPEAKER_00]: Now we're heading to a break.

22:21.341 --> 22:23.284
[SPEAKER_00]: Give me a call now like 80, 90, and chart.

22:27.618 --> 22:35.591
[SPEAKER_01]: The official numbers are in now with 62 million downloads in Vestark.

22:35.611 --> 22:38.836
[SPEAKER_01]: Listen live or download the free podcast.

22:39.316 --> 22:43.483
[SPEAKER_01]: Call anytime 88899 chart.

22:45.151 --> 22:51.199
[SPEAKER_00]: On the next invest stock, we will dig into this story, the cash trap of 2026.

22:51.399 --> 23:02.514
[SPEAKER_00]: Now, for years, money, market funds, a paid 5% but as the Fed shifts policy, we will explain why sitting in cash might be the biggest risk to your income in 2026.

23:03.135 --> 23:07.300
[SPEAKER_00]: That story is for money, but now let's roll into a new color question.

23:08.362 --> 23:09.043
[SPEAKER_02]: Hi, Investog.

23:09.383 --> 23:14.550
[SPEAKER_02]: I was hoping you guys could give me your thoughts

23:14.783 --> 23:17.366
[SPEAKER_02]: might be a better choice given today.

23:17.526 --> 23:24.454
[SPEAKER_02]: Looks like there's going to be a significant pull back and silver despite the small prices silver looks like it's actually hired today.

23:24.474 --> 23:29.500
[SPEAKER_02]: And to keep telling myself, I'm going to add some silver in my portfolio on these pullbacks.

23:29.520 --> 23:34.626
[SPEAKER_02]: And I'm looking at AG, first majestic, and then we're two not mining.

23:34.987 --> 23:37.810
[SPEAKER_02]: I think that one's FSM for the ticker.

23:38.211 --> 23:41.454
[SPEAKER_02]: I mean, would you guys like either one of these or maybe a little bit of both?

23:42.135 --> 23:43.036
[SPEAKER_02]: And I'll listen to show.

23:43.297 --> 23:43.677
[SPEAKER_02]: Thank you.

23:43.960 --> 23:53.641
[SPEAKER_00]: Looking at first majestic silver and or tuna, FSM, and this one's pretty simple, we own for tuna for our clients.

23:53.662 --> 23:56.147
[SPEAKER_00]: We do not own first majestic.

23:56.667 --> 24:01.534
[SPEAKER_00]: So we've owned it for a while in buying and down around $23 per share.

24:01.594 --> 24:03.136
[SPEAKER_00]: That's the last few years.

24:03.316 --> 24:10.606
[SPEAKER_00]: Really took off, middle of 2024, hung around the $45 range for a while and now it's up to $9.54.

24:10.946 --> 24:16.494
[SPEAKER_00]: Since, but earnings are expected to be a dollar, 18 this year.

24:16.594 --> 24:26.067
[SPEAKER_00]: So you're still looking at a single digit earnings multiple versus AG earnings are expected to continue to go up next to this year.

24:26.047 --> 24:30.093
[SPEAKER_00]: use that now, 52 cents, but it's still $16 stock.

24:30.113 --> 24:40.350
[SPEAKER_00]: So it's still pretty expensive and in our book, it is bigger, but we like Fortuna for that valuation.

24:40.550 --> 24:49.945
[SPEAKER_00]: The momentum is certainly strong.

24:50.701 --> 24:53.724
[SPEAKER_00]: We like where their minds are located as well.

24:53.825 --> 24:58.049
[SPEAKER_00]: So if I'm picking one of the other, well, we've made the decision.

24:58.169 --> 25:02.975
[SPEAKER_00]: We do that a long time ago, and it was for tuna, mining, FSM is the symbol.

25:03.776 --> 25:04.637
[SPEAKER_00]: Thanks for the call.

25:05.237 --> 25:06.839
[SPEAKER_00]: Let's go take a live call.

25:06.859 --> 25:08.261
[SPEAKER_00]: We love these live calls.

25:08.321 --> 25:14.768
[SPEAKER_00]: Our first live call of the year for Nanda for the Bay Area wants to look at closed and mutual funds.

25:15.203 --> 25:17.306
[SPEAKER_05]: Hi, good afternoon, Jackson.

25:17.546 --> 25:19.409
[SPEAKER_00]: Good afternoon, thanks for calling.

25:19.769 --> 25:23.835
[SPEAKER_05]: Yeah, I was thinking about clothes and funds.

25:23.875 --> 25:31.585
[SPEAKER_05]: They're not popular, but I would like to create a portfolio with clothes and funds.

25:31.605 --> 25:36.071
[SPEAKER_05]: Is this a good approach?

25:37.774 --> 25:40.578
[SPEAKER_00]: Why do you want to create a portfolio of clothes and funds?

25:40.718 --> 25:41.599
[SPEAKER_00]: What's your reasoning here?

25:43.385 --> 25:59.468
[SPEAKER_05]: Well, some of these things like they have really long-term track record, for instance, I'm going to give you a ticker, R, V, T, Royce, small cup.

25:59.488 --> 26:05.356
[SPEAKER_05]: And if you look at the past record, this one has been around for 20, 30 years.

26:06.197 --> 26:11.485
[SPEAKER_05]: And seems like they perform

26:12.055 --> 26:22.386
[SPEAKER_05]: I guess they have good performance and I mean, this is just an approach and that's why I'm calling you to see your opinion.

26:23.665 --> 26:28.572
[SPEAKER_00]: Okay, I'm looking at Roy's small cap trust RVT is the symbol.

26:29.594 --> 26:34.040
[SPEAKER_00]: And I'm looking at the price performance.

26:34.340 --> 26:39.728
[SPEAKER_00]: So last year, the index did about 12.2% and it was up 11.5.

26:39.868 --> 26:45.617
[SPEAKER_00]: You before that, definitely I performed up, I think it was 18% and it was up 10.

26:46.017 --> 26:47.519
[SPEAKER_00]: The index was up 10.8.

26:48.100 --> 26:52.947
[SPEAKER_00]: Before that, it was up nearly 19% index was up of 28.5.

26:52.927 --> 27:00.995
[SPEAKER_00]: 22 in the market was down, and the index was down 18 percent, this was down 26 percent.

27:01.276 --> 27:03.137
[SPEAKER_00]: So drastically underperform.

27:03.157 --> 27:05.900
[SPEAKER_00]: So you're getting really a lot of volatility here.

27:05.980 --> 27:07.722
[SPEAKER_00]: And some years it does really well.

27:07.762 --> 27:09.444
[SPEAKER_00]: And some years not so well.

27:09.464 --> 27:12.827
[SPEAKER_00]: 2018 is on 20 percent, the index was down 12.

27:13.448 --> 27:17.432
[SPEAKER_00]: So, you know, it's just a very volatile name.

27:17.902 --> 27:21.554
[SPEAKER_00]: And it does tend to trade at let's see premium discount.

27:21.895 --> 27:23.180
[SPEAKER_00]: It's a discount.

27:23.200 --> 27:29.380
[SPEAKER_00]: Usually discount and that discount varies between looks like on the low end.

27:30.676 --> 27:34.262
[SPEAKER_00]: 15% and as little as 5%.

27:34.542 --> 27:35.564
[SPEAKER_00]: It's kind of in that range.

27:35.604 --> 27:37.146
[SPEAKER_00]: Right now, it's at about 9% discount.

27:37.206 --> 27:38.528
[SPEAKER_00]: So right in the middle of that range.

27:39.309 --> 27:41.252
[SPEAKER_00]: You are getting charged the fee.

27:41.292 --> 27:44.558
[SPEAKER_00]: The total expense ratio here is 1.7%.

27:44.578 --> 27:46.661
[SPEAKER_00]: That is extremely high.

27:47.162 --> 27:48.143
[SPEAKER_00]: Extremely high.

27:48.203 --> 27:51.849
[SPEAKER_00]: We are clients pay less than that and we're full service advisor.

27:52.870 --> 27:59.080
[SPEAKER_00]: And so I don't really see a reason to have this

27:59.363 --> 28:12.116
[SPEAKER_00]: a position near portfolio is with those fees with the performance that's, you know, it's not terrible, but it's, it's not gangbusters, okay, you're not, you're not crushing it.

28:12.176 --> 28:19.804
[SPEAKER_00]: The, the, the, the, the 15 year performance on this is 9.78% and the index is 9.74%.

28:20.004 --> 28:24.449
[SPEAKER_00]: It's pretty much as performing like the index over the last 15 years.

28:25.129 --> 28:27.852
[SPEAKER_00]: And you're getting charged that 1.7%.

28:27.832 --> 28:35.546
[SPEAKER_00]: So basically, any alpha or any additional returns that it's getting for it's shareholders are being eaten up by fees.

28:36.287 --> 28:39.793
[SPEAKER_00]: So yeah, so this this this is just one.

28:39.833 --> 28:42.158
[SPEAKER_00]: There are some good closed-end funds out there.

28:42.178 --> 28:45.644
[SPEAKER_00]: I'm not pooping all closed-end funds by any means.

28:46.004 --> 28:47.427
[SPEAKER_00]: I think certain ones.

28:47.407 --> 28:48.109
[SPEAKER_00]: can work out.

28:48.469 --> 28:51.456
[SPEAKER_00]: The problem is it tends to be fees are very high.

28:51.516 --> 28:55.004
[SPEAKER_00]: The performance tends to be middleing to poor.

28:55.786 --> 29:00.216
[SPEAKER_00]: And this one is the fees are high and the performance is middleing.

29:00.296 --> 29:02.180
[SPEAKER_00]: It's fine, but it's not great.

29:02.220 --> 29:03.142
[SPEAKER_00]: It's not terrible.

29:03.784 --> 29:06.951
[SPEAKER_00]: So I think you can do certainly better with

29:06.931 --> 29:14.444
[SPEAKER_00]: open-ended funds that have lower fees or plenty of better performers out there, especially in the small cap space.

29:14.464 --> 29:23.060
[SPEAKER_00]: So I just see no reason to own this one and don't just create a portfolio of only closed-end funds.

29:23.080 --> 29:24.042
[SPEAKER_00]: Perfect, thank you.

29:24.062 --> 29:24.282
[SPEAKER_00]: No problem.

29:24.886 --> 29:32.515
[SPEAKER_00]: Thanks for the call and for everyone out there that if you want to check that out uh, was on my screen, you might head over to our YouTube channel.

29:33.296 --> 29:37.101
[SPEAKER_00]: Now on Fridays, you're going to make time to fit in a quick rundown as some key benchmark numbers.

29:37.141 --> 29:39.464
[SPEAKER_00]: So let me hit this for you.

29:39.744 --> 29:45.751
[SPEAKER_00]: Now the two years treasure yield 3.47% last week, it was at 3.48%.

29:46.252 --> 29:50.337
[SPEAKER_00]: So slight tick down on the two year treasury.

29:50.317 --> 29:54.824
[SPEAKER_00]: which means the market pricing and it's slightly more doubled than going forward.

29:54.844 --> 30:00.272
[SPEAKER_00]: 10 year treasury was actually up about five basis points on the day.

30:00.332 --> 30:10.047
[SPEAKER_00]: So, sorry, on the week and that's the 4.187% and that shows you that the yield curve is steepening and this is important.

30:10.027 --> 30:21.429
[SPEAKER_00]: With the old curve of steepening that usually incentivizes banks to lend that usually provides liquidity to the market in the economy and you typically get an expansion of the cycle of continuation of the cycle.

30:21.569 --> 30:29.023
[SPEAKER_00]: However, that is usually the last part of the broader cyclical expansion of this cycle.

30:29.123 --> 30:31.528
[SPEAKER_00]: So, while near-term,

30:31.508 --> 30:44.132
[SPEAKER_00]: and should hold relatively together, understand that if that starts to flip, that is going to be your signal that the economy is rolling over in a material way, but we're not quite there yet.

30:44.573 --> 30:50.805
[SPEAKER_00]: Gold, 43, 19, and ounce, that's down $215, compared to last week.

30:50.906 --> 30:51.627
[SPEAKER_00]: So,

30:51.607 --> 31:00.154
[SPEAKER_00]: you obviously saw that rally in silver and gold went sympathy and you had a pretty big reversal and you saw that in silver as well.

31:00.174 --> 31:06.600
[SPEAKER_00]: So over 7174 announced that's down $7.51 since compared to a week ago.

31:07.040 --> 31:21.613
[SPEAKER_00]: So a lot of just it was overbought and needed to come back in and not shocked to see that and I think you'll still get some choppiness for a little while in the precious metal space to work off those overbought conditions from the previous week.

31:21.593 --> 31:31.776
[SPEAKER_00]: Oil, 57.677 cents per barrel, a 33-cent increased compared to one we ago, that's on WCI.

31:32.437 --> 31:39.012
[SPEAKER_00]: The National Average for Gasoline, $2.83, down one cent compared to last.

31:38.992 --> 31:53.383
[SPEAKER_00]: week here in California we're still hanging around $4.26 but down three cents from the previous week down in Florida the average price is only $2.85 cents right around that national average.

31:54.004 --> 31:59.295
[SPEAKER_00]: Thanks for that call previously and hopefully that gave you a little perspective on how major

31:59.478 --> 32:01.163
[SPEAKER_00]: asset classes moved for this week.

32:01.765 --> 32:07.641
[SPEAKER_00]: It looks like into the software stocks because that's really where the weakness was today.

32:07.701 --> 32:11.633
[SPEAKER_00]: And that's quite interesting.

32:12.254 --> 32:14.601
[SPEAKER_00]: Considering the

32:15.543 --> 32:20.110
[SPEAKER_00]: The strength in hardware and industrial names tied to AI.

32:20.651 --> 32:28.162
[SPEAKER_00]: And is that saying, once again, that these AI names are going to accelerate their spending into the new year, it's going to help the picks and shovels.

32:28.183 --> 32:31.007
[SPEAKER_00]: It's probably going to hurt just a software space.

32:31.087 --> 32:42.765
[SPEAKER_00]: In general, whether you're a Piper scalar or not, this is going to provide resources for the industry as a whole or industries

32:42.745 --> 32:46.249
[SPEAKER_00]: go around a lot of these cloud software names.

32:46.970 --> 32:56.021
[SPEAKER_00]: So if I look at IGV, this is the I shares tech software ETF, that was down nearly 3% on the day.

32:56.582 --> 33:01.969
[SPEAKER_00]: CLOU, which is the global X cloud computing ETF.

33:02.049 --> 33:06.094
[SPEAKER_00]: That was down about 2.3% on the day, SKYY.

33:06.554 --> 33:09.478
[SPEAKER_00]: That is the pro or first trust.

33:09.458 --> 33:12.863
[SPEAKER_00]: cloud computing ETF down nearly 2% on the day.

33:12.903 --> 33:18.311
[SPEAKER_00]: So obviously different weightings in these names, but you can see that was where the weakness was on the day.

33:18.331 --> 33:18.952
[SPEAKER_00]: And why is that?

33:19.012 --> 33:26.263
[SPEAKER_00]: It's because investors continue to be worried about AI running over the software industry.

33:26.623 --> 33:33.113
[SPEAKER_00]: That wasn't long ago, 2011, Mark Andreessen, venture capitalist, declared software is eating the world.

33:33.133 --> 33:36.698
[SPEAKER_00]: This is when cloud computing was booming.

33:37.150 --> 33:44.224
[SPEAKER_00]: And there's very high profit margins in cloud community computing why because it's mainly just querying database.

33:44.727 --> 34:00.632
[SPEAKER_00]: better bases in the sky and you throw a little software layer on top of it and you charge high recurring revenue and you crush it, names like Salesforce, Adobe Service now, a sauna, HubSpot, Bill Holdings, etc.

34:00.672 --> 34:07.343
[SPEAKER_00]: These are names that really did well during that boom and have started to lag in a material way.

34:07.475 --> 34:21.992
[SPEAKER_00]: And they're most worried, investors are most worried about businesses that have CRM customer relationship management software, think of Salesforce and back office functions, think of Monday.com for example.

34:23.434 --> 34:28.860
[SPEAKER_00]: And this is a lesson here that tech obsolescence can happen very fast.

34:29.781 --> 34:35.608
[SPEAKER_00]: There's always those people that are like, I want to buy this stock and put it away for 30 years.

34:36.061 --> 34:40.467
[SPEAKER_00]: And what most people get wrong about that is the sector that they're talking about.

34:41.508 --> 34:51.542
[SPEAKER_00]: Remember, companies that do well over a multi-decade period have some sort of competitive advantage that is durable, sticky, and hard to replace.

34:52.303 --> 35:05.140
[SPEAKER_00]: And there are certain, once again, there are certain sectors that that can be the case, especially if you have scale, for example,

35:05.744 --> 35:09.389
[SPEAKER_00]: the spite Amazon and their growth.

35:09.409 --> 35:14.015
[SPEAKER_00]: The scale of Walmart allows them to keep those low prices and have consistent shoppers.

35:14.676 --> 35:18.020
[SPEAKER_00]: That's been difficult to use surplus.

35:18.040 --> 35:22.466
[SPEAKER_00]: Now, it may be used for one day, but it hasn't over many decades.

35:23.127 --> 35:29.015
[SPEAKER_00]: The problem in the tech space is that, as we know throughout history, it moves very fast.

35:29.816 --> 35:33.220
[SPEAKER_00]: And there's always people trying to innovate within the space.

35:33.689 --> 35:48.711
[SPEAKER_00]: And that means that every company of all shapes and sizes is susceptible to some competitor coming in or some new technology emerging that makes them obsolete.

35:49.433 --> 35:54.358
[SPEAKER_00]: And then there's obviously the management side, managing these companies can be very hard.

35:55.119 --> 36:04.648
[SPEAKER_00]: I always say this, especially within tech is if you ever see a CFO become the leader of a tech company, you should sell that stock and move on.

36:06.009 --> 36:16.960
[SPEAKER_00]: Because almost always they focus on just the numbers and margins and inventory management, they don't focus on innovation and some other company goes out there and eats their lunch.

36:17.665 --> 36:23.114
[SPEAKER_00]: And in many ways, AI is looking to be that for the software space.

36:24.356 --> 36:30.166
[SPEAKER_00]: Banks retailers and across many industries are going to look at their software.

36:31.749 --> 36:36.016
[SPEAKER_00]: But they're paying for on a monthly basis and say, do I really need this?

36:36.237 --> 36:37.699
[SPEAKER_00]: Can I...

36:37.915 --> 36:39.437
[SPEAKER_00]: For example, we do this.

36:39.497 --> 36:45.745
[SPEAKER_00]: We have a Claude subscription and Luke, he has some perfect programming skills.

36:45.785 --> 36:52.674
[SPEAKER_00]: And he's built some tools for us internally using Claude and using obviously his programming skills.

36:53.315 --> 37:07.112
[SPEAKER_00]: Every able to have better tools for effectively, I don't say no money, but a lot less.

37:08.122 --> 37:15.854
[SPEAKER_00]: They're convinced that AI is making their, or eroding their vote, their economic advantage.

37:15.894 --> 37:26.189
[SPEAKER_00]: That is allowed them to produce high-profit margins, strong growth, and continue to buy back shares, and really reward shareholders.

37:26.209 --> 37:31.577
[SPEAKER_00]: And so the sell-off to start the year is just another sign of that.

37:33.080 --> 37:35.243
[SPEAKER_00]: And don't think that the big names are,

37:37.012 --> 37:59.222
[SPEAKER_00]: immune to that as well don't think that just because it's max seven name that you know Microsoft for example is Google going to win an A race and then make everyone move to Google docs instead that's another risk out there as well.

38:01.548 --> 38:08.637
[SPEAKER_00]: So, think about that and make sure you adjust your portfolio as we introduce it to you.

38:08.657 --> 38:10.399
[SPEAKER_00]: Then we're heading to a break and ready for your calls.

38:10.640 --> 38:12.562
[SPEAKER_00]: Now, Bill from Northern California, you're next.

38:13.003 --> 38:14.825
[SPEAKER_00]: So hang on.

38:17.648 --> 38:18.970
[SPEAKER_01]: The calls are free.

38:19.511 --> 38:21.633
[SPEAKER_01]: The unbiased answers are free.

38:22.194 --> 38:24.277
[SPEAKER_01]: So what are you waiting for?

38:24.838 --> 38:28.382
[SPEAKER_01]: Call

38:31.197 --> 38:32.799
[SPEAKER_00]: Let's go talk to Belle.

38:32.859 --> 38:36.243
[SPEAKER_00]: He is in Northern California looking at ASNL.

38:36.283 --> 38:36.783
[SPEAKER_00]: How you doing, Belle?

38:39.326 --> 38:40.968
[SPEAKER_07]: Hi, Justin, the healthy new year.

38:41.509 --> 38:41.829
[SPEAKER_00]: You as well?

38:41.849 --> 38:43.131
[SPEAKER_07]: Here you are, you're back in the radio.

38:43.571 --> 38:43.912
[SPEAKER_00]: You as well.

38:43.932 --> 38:45.634
[SPEAKER_07]: Did you see it?

38:45.994 --> 38:46.274
[SPEAKER_07]: Yeah.

38:46.294 --> 38:49.298
[SPEAKER_07]: I helped the, I've helped the, you know, I've held it for the last couple of years.

38:50.119 --> 39:00.090
[SPEAKER_07]: And also, Broadcom, bigger position in Broadcom, which I added some too recently on the pullback.

39:00.813 --> 39:29.487
[SPEAKER_07]: You know, I know they do different things, but as far as like profitability and how they're linked to all the AI and just general processing computer growth, but, you know, in the works and going forward, could you juxtaposition those two companies in terms of

39:30.091 --> 39:35.824
[SPEAKER_07]: like better than the other, even though I'm supposed to, like both, just kind of a comparison.

39:37.507 --> 39:39.552
[SPEAKER_00]: Yeah, well, I mean, they're both in the chip space.

39:39.852 --> 39:47.910
[SPEAKER_00]: Broadcom obviously makes chips, ASML is a semiconductor equipment manufacturer.

39:48.552 --> 39:49.213
[SPEAKER_00]: So,

39:50.476 --> 39:53.359
[SPEAKER_00]: It's about ASML is all about capacity.

39:53.919 --> 40:01.707
[SPEAKER_00]: Is our company's growing their capacity to produce chips, especially high quality, very difficult to make chips.

40:02.728 --> 40:08.013
[SPEAKER_00]: And obviously that is why it was upgraded recently.

40:08.033 --> 40:19.504
[SPEAKER_00]: It's because the demand for their machines to up the capacity of DRAM, for example, that's what looks like the upgrade today was about.

40:19.754 --> 40:29.097
[SPEAKER_00]: Whereas Broadcom, they would buy ASML products, and they may not need them.

40:29.157 --> 40:37.257
[SPEAKER_00]: They may be okay with the capacity and they may have specialized chips that others don't have, and that gives them a competitive advantage.

40:37.928 --> 40:45.078
[SPEAKER_00]: Okay, and so there are different, what's again, a different kind of edge, but in general, if demand for chips is going up, that's gonna benefit both of them.

40:45.559 --> 40:52.488
[SPEAKER_00]: And vice versa, if a pullback in demand for data centers happens, well, both of them are going to get hurt as well.

40:53.009 --> 40:54.431
[SPEAKER_00]: Now, which one rather I own?

40:54.972 --> 40:56.494
[SPEAKER_00]: Probably,

40:56.575 --> 40:57.216
[SPEAKER_00]: broadband.

40:57.716 --> 41:06.787
[SPEAKER_00]: Why is that because from my understanding, recently China finally produced their own lithograph machine, something that they've been trying to do for years.

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[SPEAKER_00]: As a male kind of had a hold on this technology.

41:11.493 --> 41:17.300
[SPEAKER_00]: And obviously there's still the leader, but it's China catching up to them in some way, shape or form.

41:17.701 --> 41:26.211
[SPEAKER_00]: That is, I think a fairly big risk in the near term that

41:26.579 --> 41:39.034
[SPEAKER_00]: I would say both have good momentum, both on the chart as well as earnings, but understand that they're going to generally be correlated, and they both are expensive.

41:39.435 --> 41:43.019
[SPEAKER_00]: They're both a lot of this growth is priced in, now that growth can continue.

41:43.099 --> 41:50.949
[SPEAKER_00]: But know that if there is a pullback in AI data center, spending both will get hit.

41:50.969 --> 41:53.592
[SPEAKER_00]: But if I'm going to own one of the other, it's probably brought up.

41:53.612 --> 41:54.173
[SPEAKER_00]: Thanks for the call.

41:55.098 --> 42:10.153
[SPEAKER_00]: Those people mentioned the newest KPP premium newsletter, which will be distributed to Marrow and this week in the KPP Insight section, we discussed the market update for the new year and the stock idea section we mentioned a cable business and an automotive dealer.

42:10.252 --> 42:15.478
[SPEAKER_00]: And the portfolio management section we touched on a beginning of year, check up.

42:15.498 --> 42:20.123
[SPEAKER_00]: And if you're interested in learning more, visit us at at bestalk.com and subscribe.

42:20.623 --> 42:24.768
[SPEAKER_00]: Who's that ever come to your index inbox on Saturdays?

42:25.629 --> 42:28.392
[SPEAKER_00]: Now, see if we can slip into one more quick question down.

42:28.412 --> 42:33.137
[SPEAKER_03]: I had a question on a company called Sun core ticker is FU.

42:33.337 --> 42:41.126
[SPEAKER_03]: I was looking at it, and I want to get to your overall opinion on if you'd like the company, and if you did like it, what a good buy point would be, and I'll look for your answer on the show.

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[SPEAKER_03]: As always, thank you guys.

42:42.348 --> 42:43.349
[SPEAKER_03]: I appreciate all you do.

42:43.910 --> 42:54.122
[SPEAKER_00]: We're looking at SunCore SU, and this is a Canadian oil name, and one reason I like it is because of the refining business.

42:54.162 --> 42:56.745
[SPEAKER_00]: Refining margins are getting much better.

42:56.725 --> 43:02.338
[SPEAKER_00]: part of this is to do with the war in Ukraine and the destruction of refining capacity in that region.

43:03.220 --> 43:07.370
[SPEAKER_00]: But overall, these businesses are doing much better.

43:07.390 --> 43:10.397
[SPEAKER_00]: So if I'm buying, we own a similar

43:10.647 --> 43:24.400
[SPEAKER_00]: Can you do a little name that we think is a bit better than Suncore, but I like Suncore and if you want exposure to Canada and refining, this is a solid name, it's for the call.

43:25.301 --> 43:36.172
[SPEAKER_00]: I'm Justin Klein, this is the days show and if they made you think about your own financial picture as we enter the new year, whether it's all really working for you, let's talk about it.

43:37.233 --> 43:39.355
[SPEAKER_00]: Just get over to besttalk.com.

43:39.436 --> 43:48.531
[SPEAKER_00]: Schedule a call with myself for Luke, no cost, no obligation, we can help bring clarity and confidence to whatever you are doing of the goal of these.

43:49.493 --> 43:57.265
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43:57.966 --> 44:00.591
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44:01.132 --> 44:02.554
[SPEAKER_00]: Independent thinking should success.

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[SPEAKER_00]: It's a best talk.

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[SPEAKER_00]: Enjoy your weekend.

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44:13.232 --> 44:17.799
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44:26.231 --> 44:34.000
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