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[SPEAKER_02]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk.

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[SPEAKER_02]: Independent Thinking, shared success.

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[SPEAKER_02]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.

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[SPEAKER_02]: Here is KPP Financial Portfolio Manager, Luke Guerrero,

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[SPEAKER_01]: Good afternoon, fellow investors, and welcome back to another episode of Invest Talk.

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[SPEAKER_01]: I'm your host, LucGuerre, today's Tuesday, January 6th, 2020, 6th, now the Justin was already with you yesterday.

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[SPEAKER_01]: And last week to ring in the new year, but this is my first show of 2026.

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[SPEAKER_01]: And boys, the year already off, well, to a start, let's say.

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[SPEAKER_01]: But, as the year turns as January begins, I want to, for all of us rededicate ourselves to seeking to achieve that goal we have each and every program.

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[SPEAKER_01]: Because our objective for this podcast, for this radio program, for all of our YouTube content, our Instagram content, our webinars, for everything that we put out.

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[SPEAKER_01]: is you help make you become a better and more informed investor.

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[SPEAKER_01]: We want to help you understand what is happening around and how that affects markets, how that affects your portfolios.

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[SPEAKER_01]: To that end, as always, we have a mixture of educational and actionable material to go over today.

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[SPEAKER_01]: And then just a bit, we'll talk about today's market performance, as well as running down those show topics.

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[SPEAKER_01]: But because the most important part of this show is your finance and investment questions, let's answer this color question now.

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[SPEAKER_05]: Hi, you've been Justin, both from Philadelphia here.

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[SPEAKER_05]: Calling about ticker symbol, INVZ, in of his technologies.

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[SPEAKER_05]: I feel like that is something that is coming up strong in the future, especially with Waymo, and the one that you get your thoughts on this company.

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[SPEAKER_05]: It's a really basic company.

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[SPEAKER_05]: And I can see a potential in this for something's down the road.

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[SPEAKER_05]: We love to get your thoughts, and we look forward to hearing your answer on the show.

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[SPEAKER_05]: Thank you.

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[SPEAKER_01]: INVZ is in Israeli tech company with a develop and they sell automotive, grey, the lidar.

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[SPEAKER_01]: What the heck is lidar?

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[SPEAKER_01]: Well, lidar is light detection and ranging their special sensor, sensors and perceptions software that effectively help autonomous driving vehicles figure out depth.

02:52.628 --> 02:57.874
[SPEAKER_01]: Right, when you're talking about a picture, effectively what you're just seeing is something that is too dimensional.

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[SPEAKER_01]: Light or helps you see that depth.

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[SPEAKER_01]: It is how autonomous vehicle can be able to tell the difference between a white car on a white background.

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[SPEAKER_01]: And so understandably, when you have a race from Waymo to now, Rivian and all these companies that are trying to integrate light are within their systems, Tesla notably, not doing that.

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[SPEAKER_01]: Companies that are producing this stuff, well they do stand to benefit.

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[SPEAKER_01]: Now this is a very small company, 274 million dollar market cap with quite a bit of debt in the range of 25 billion as a 2024.

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[SPEAKER_01]: Looking at it's chart, it has been heading steadily downward since 2020, in spite of this change in trends.

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[SPEAKER_01]: One of the reasons being is lighter has become what's become a bit cheaper.

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[SPEAKER_01]: And so you're seeing with this company, yes, revenue is exploding.

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[SPEAKER_01]: But you're also seeing no income is still negative.

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[SPEAKER_01]: It's slightly less negative.

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[SPEAKER_01]: But negative, none, the less even at margin, negative 61, 0.7% is worth projected to be in 2026.

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[SPEAKER_01]: 907.9, if it was projected to be in 2025, we haven't gotten earnings yet because through the fiscal year end for them is December.

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[SPEAKER_01]: But it's certainly an improvement from negative 2,000, 800 and 11 a few years ago.

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[SPEAKER_01]: So we're seeing improvement.

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[SPEAKER_01]: This is,

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[SPEAKER_01]: Because it is pre-profit, going to be a highly speculative company.

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[SPEAKER_01]: Shares will have big swings, off technical news and sentiment.

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[SPEAKER_01]: It'll also be even more volatile because of its size.

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[SPEAKER_01]: So, I think, more than anything, this company that's trading at $1.18 right now, is a bit of a gamble.

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[SPEAKER_01]: It's up to 38% year to date, but the year is certainly young.

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[SPEAKER_01]: If you want to invest in light art, if you want to invest in autonomous driving,

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[SPEAKER_01]: I find it far better to look for a more established company within the supply chain that will be less volatile over time.

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[SPEAKER_01]: That is, in of these technologies, ticker, INVZ.

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[SPEAKER_01]: We got a lot of ground to cover in the next 45 to 50 minutes or so, and here's a little bit of what we got planned.

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[SPEAKER_01]: My main focus point concerns this topic, the January barometer.

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[SPEAKER_01]: Wall Street Law says, as goes the first week, so goes the year.

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[SPEAKER_01]: So we'll talk about the markets for performances in these first five days, and it's historical accuracy as a predictor of future returns.

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[SPEAKER_01]: We'll also touch on how America's economy is looking pretty good, especially relative to how many people thought it would be just a few years ago.

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[SPEAKER_01]: And now,

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[SPEAKER_01]: because of tax legislation because of fiscal spending, it may continue to accelerate.

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[SPEAKER_01]: Also, touch on a fight brewing between data centers and the cities in which they are occupying,

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[SPEAKER_01]: and because of the amount of energy that they're drawing, this is a big fight brewing about shutting down during certain periods.

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[SPEAKER_01]: Now, I'll have you heard this, but a big story out of Venezuela.

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[SPEAKER_01]: So how might Venezuela and oil boost US refiner's or hurt external producers?

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[SPEAKER_01]: We also got some voice-mate calls ready to play, including one on four or one K contributions.

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[SPEAKER_01]: And another of the Vanguard International High-Dividend-Hield Index Fund ETF to your VYM eye.

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[SPEAKER_01]: As well as some questions that came in from the comment section of the Invest dog at YouTube channel, and hopefully some live calls throughout this show.

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[SPEAKER_01]: We're going into Break.

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[SPEAKER_01]: Please remember, you can call anytime and leave your questions on the Invest Talk of Voice Bank.

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[SPEAKER_01]: If you're listening via our live stream or possibly on AM 1220 in the Bay Area, pick up that phone and give me a call now at 80-899 chart.

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[SPEAKER_01]: Hang on, cause when we get back, we'll talk about today's market activity.

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[SPEAKER_04]: Serious investors are certain to have finance and investment questions.

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[SPEAKER_04]: What do you think is a good price?

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[SPEAKER_04]: And the best person to ask your question in the right way is you.

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[SPEAKER_03]: I was wondering from your standpoint, if they're at downside, in buying fractional shares versus whole shares.

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[SPEAKER_04]: and 24-7 rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased answers.

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[SPEAKER_03]: 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_01]: 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_04]: Your participation makes an investment talk better.

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

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[SPEAKER_03]: This is Josh and North Carolina.

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

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[SPEAKER_03]: Let's take a live call.

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[SPEAKER_03]: Sam from San Jose.

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[SPEAKER_04]: So don't forget to call.

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[SPEAKER_04]: Invest talk.

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[SPEAKER_04]: Great advice.

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[SPEAKER_04]: Thank you.

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[SPEAKER_04]: 888.

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[SPEAKER_04]: 99 chart.

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[SPEAKER_04]: It's a new year.

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[SPEAKER_04]: 2026 is here and so is Luke Guerrero.

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[SPEAKER_04]: He's taking your finance and investment questions anytime.

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[SPEAKER_04]: Call in Vestock 88899 chart.

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[SPEAKER_01]: 88899 chart is the number.

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[SPEAKER_01]: It will continue to be the number if you have pressing finance and investment questions.

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[SPEAKER_01]: I can be a call really any time of day.

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[SPEAKER_01]: That being said, let's talk a little bit about the market today.

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[SPEAKER_01]: The Dow is up 99 basis points S&P 5602 Nasdaq up 65 Russell 2000 up 137 overall the market higher.

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[SPEAKER_01]: ending near their best levels, does setting a new all-time high in the S&P locking its first fresh record close since Christmas Eve.

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[SPEAKER_01]: Well, drove that while memory and storage, semi-cap equipment with a big outperformers on the day, metals and chemicals, also stood out and what was a strong material sector.

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[SPEAKER_01]: You saw a machinery transports, regional banks, retail, restaurants, auto parts,

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[SPEAKER_01]: all having a bit of outperformance that fit with this recent pro cyclical rotation theme.

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[SPEAKER_01]: Healthcare bounced from Monday's pullback in defense.

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[SPEAKER_01]: It's with Medtech, Farma, and Managecare, all seeing some pretty solid gains.

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[SPEAKER_01]: Big tech though, mix Amazon, a big outperformer, while Tesla and Apple some of the underperformers amongst that group.

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[SPEAKER_01]: Energy though was the worst performing sector, especially with the integrates in the EMP's showing a bit of weakness.

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[SPEAKER_01]: On top of that, data centers, home builders, food and beverage, some telecom names, some of the other underperformers for the day.

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[SPEAKER_01]: On the bond side treasuries, we're a bit weaker, but came off of their worst levels, the yields were up, about one basis point across the curve.

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[SPEAKER_01]: Dollar index was up 30 basis points, gold settled up 1% silver, and it up 5.7% setting a fresh record close, above the $80 an ounce level, and crude oil settled down 2% on the deck.

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[SPEAKER_01]: Overall, I mean, a few dynamics were in focus.

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[SPEAKER_01]: You had that memory in storage and select semis being the big beneficiary of the AI trade.

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[SPEAKER_01]: Semis, of course, being helped out from some specific guidance raises amongst companies.

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[SPEAKER_01]: And you also have the Pro-Sickle rotation, which was the big story on Monday, Metals.

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[SPEAKER_01]: continuing to be another big winner from this move with additional support from technical positioning from the fiscal spending and from geopolitical factors.

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[SPEAKER_01]: You had a bit of a cyclical tailwind as well with the looming fiscal impulse from the one big beautiful bill act you have tariff relief possible in the widely discussed expectations for broadening earnings growth as we get

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[SPEAKER_01]: Market also has a number of high-profile potential catalysts over the near-term.

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[SPEAKER_01]: You have NFP on Friday.

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[SPEAKER_01]: You have an upcoming Fed Chair pick.

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[SPEAKER_01]: You have the potential ruling on whether or not the tariffs are even legal.

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[SPEAKER_01]: And of course, you have Q4 earnings season set to get underway in the near-term.

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[SPEAKER_01]: On the data side, final SMP global services PMI's for December came in a slightly below consensus and its prelim reading, employment was down, but negligibly while prices rose sharply.

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[SPEAKER_01]: Looking ahead to the rest of the week, Wednesday will see the ADP private payrolls for December,

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[SPEAKER_01]: Semberias and services, Jolts, Job Opening, Serenov Ember and October, Factory Orders, Q39 Farm Productivity and Unit Labor Costs, Initial Claims for the weekend third of January and the October Trade Balance we out on Thursday and Friday will bring us the DeSembert Employment Report, the Proliminary University of Michigan Consumer Sentiment for January and October Housing Starts.

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[SPEAKER_01]: All right.

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[SPEAKER_01]: Take a look at our Invest Talk YouTube comment section, question, bank, just a reminder.

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[SPEAKER_01]: We do post videos over there on our YouTube channel, search Invest Talk with two T's and while you're over there.

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[SPEAKER_01]: If you have a question that is pressing that you just cannot pick up the phone and dial, well, you can leave it right there in the comment section because we'd like to tackle those as soon as we get them.

12:56.888 --> 13:01.195
[SPEAKER_01]: This one from our friend Payel, or maybe Pavel Pavel, is what it is.

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[SPEAKER_01]: I can't read sometimes.

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[SPEAKER_01]: It's a Tiger MDLZ, which is Mondalez.

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[SPEAKER_01]: International, the question says Mondalez is approaching its 52-week low.

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[SPEAKER_01]: What do you think about the company at these levels?

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[SPEAKER_01]: Mondales is one of the largest snack and beverage companies on planet earth.

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[SPEAKER_01]: They're behind some well-known brands, Oreos, Cadbury, Ritz, Sour Patch Kids, my personal favorite.

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[SPEAKER_01]: So they sell cookies, chocolates, crackers, gum, and other snacks across the globe.

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[SPEAKER_01]: It is a large company, 70.

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[SPEAKER_01]: plus billion, 69.64 billion dollar market cap is where they stand right now.

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[SPEAKER_01]: It's got very little debt relatively speaking only about $16 billion in debt.

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[SPEAKER_01]: For evaluation perspective, I mean, it's sitting near the average just slightly below the average at 17.1 times price to forward looking earnings.

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[SPEAKER_01]: It's range from about 16 to 24 over the past five years, but you know, there's a bit of things that are pushing this company in a reason why

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[SPEAKER_01]: Revenue has revenue growth, that is, has slowed a bit, right?

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[SPEAKER_01]: They're projected to have had 38 billion in revenue in 2025, with guidance showing 39 and 2026, certainly less than that 7.1% growth they've had.

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[SPEAKER_01]: With the past 52 weeks, they're down 9.43% and so what's driving this?

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[SPEAKER_01]: Well, earnings and profit uncertainty, rising commodity and cost pressures.

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[SPEAKER_01]: Kiko, sugar.

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[SPEAKER_01]: and transportation of these things, a bit more expensive than they anticipated.

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[SPEAKER_01]: You also have a shift in institutional positioning at a broader market and sector trend of trying to be, more healthy, which plays probably a smaller part than some people would think, but still a part nonetheless in a company that primarily sells snacks, cookies, and crackers.

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[SPEAKER_01]: So, what I'm seeing here is a company that is certainly struggling from a growth perspective.

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[SPEAKER_01]: Again, I'll highlight it once more.

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[SPEAKER_01]: What 1.5 billion in revenue growth year over year is certainly slower than the 5-year trend and most of that growth was really from 2022 into 2023, same-time margins are compressing because of cost pressures and from a technical perspective doesn't look great.

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[SPEAKER_01]: So, not sure what catalysts on the horizon could turn things around for this company.

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[SPEAKER_01]: I think it could still become a bit cheaper.

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[SPEAKER_01]: So for now, from on to less international, we're going to have to pass.

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[SPEAKER_01]: Going into a break, still to come, my main focus point, and more answers to your questions, including one from James from New York, hang on, you will be next.

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[SPEAKER_04]: For investors, the goal of achieving financial freedom requires unbiased information, strategic planning, and determination.

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[SPEAKER_04]: Congratulations!

16:05.042 --> 16:10.028
[SPEAKER_04]: You've found the podcast that is dedicated to helping you succeed in Vestock.

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[SPEAKER_01]: It's good to James from New York, who's a question about TTI.

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[SPEAKER_01]: How can we help you James?

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[SPEAKER_06]: So I know this company, and I like it, and say these, you've been getting a lot of questions about water companies.

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[SPEAKER_06]: And this one is, you know, well, this is the first time, but it also has, she's involved with the treatment of water and they can groundwater up hold of water.

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[SPEAKER_06]: And I just like to see what your thoughts are on this company.

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[SPEAKER_06]: It's been strong.

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[SPEAKER_06]: I've done very well with it, but do you see that there's still strength?

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[SPEAKER_01]: Sure, let's take a look at Tetra Technologies Inc. That is ticker, TTI.

16:52.537 --> 17:07.519
[SPEAKER_01]: It is a US energy services and solutions company that provides products and services to the oil and gas industries, mainly in completion, fluid and added as James mentioned in water management.

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[SPEAKER_01]: Now, over the past 52 weeks, it's up 154.7% up 69.9% over the past three months, and already up 3.84% year to date.

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[SPEAKER_01]: Really, it had weak relative strength until 2021, but since then, it's been pretty strong.

17:26.128 --> 17:36.578
[SPEAKER_01]: And the reason being is, while you're seeing a bit of revenue growth from 2020, when revenue was 377 billion dollars.

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[SPEAKER_01]: million dollars.

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[SPEAKER_01]: In terms of debt, they don't have much on their balance.

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[SPEAKER_01]: She only two hundred and seven million in debt on a 1.3 billion dollar market cap company.

17:47.501 --> 18:00.523
[SPEAKER_01]: One concern I have is in spite of this theme of increased spending on water resources, certainly on energy efficiency for all the demand out of AI and data centers.

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[SPEAKER_01]: Growth has slowed quite a bit right most of their growth was from 2021 to 2022.

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[SPEAKER_01]: So it's projected from 625 million in 2025 because their fiscal year end was in December so we don't know whether earnings were yet.

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[SPEAKER_01]: 251 million the next year the same time though margins are expanding EBITDA margin 17.9% return on equity was 56.4% in 2024.

18:30.372 --> 18:32.055
[SPEAKER_01]: Now, it's run up quite a bit.

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[SPEAKER_01]: The reason is being as well, strong revenue and earnings signal.

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[SPEAKER_01]: Some bullish fundamentals, especially from the energy service sector.

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[SPEAKER_01]: General strength and oil and gas drilling activity in services demand tends to lift stocks like TTI, so it's certainly been a big beneficiary there.

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[SPEAKER_01]: And also, they're participation in

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[SPEAKER_01]: Strategic initiatives for water reuse technology for critical minerals projects.

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[SPEAKER_01]: And so that's all been a boon to the stock price over the past couple months, but it's put itself in a position where it is a bit expensive.

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[SPEAKER_01]: Price to Ford looking earnings, now sitting at 37.3 times well above the average of 23.5.

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[SPEAKER_01]: Price to book value well above that average as well.

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[SPEAKER_01]: Now,

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[SPEAKER_01]: I tend to not like to sell things that are positive momentum because over shorter periods of time positive momentum tends to hold, but I would be very cognizant when we get around to middle of end of February when you start to have earnings come in again to see what the overall momentum and technical picture is for this stock.

19:33.824 --> 19:36.970
[SPEAKER_01]: So for now, I don't think there's anything wrong with Githinium to hold onto this guy.

19:36.990 --> 19:39.394
[SPEAKER_01]: It's been very, very strong.

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[SPEAKER_01]: And certainly has done very well for you.

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[SPEAKER_01]: That is TDI Tetra Technologies Inc.

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[SPEAKER_01]: Thanks to the call.

19:46.973 --> 19:49.395
[SPEAKER_01]: Got another live call, Jared from Canada.

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[SPEAKER_01]: How can we help you?

19:50.656 --> 19:59.245
[SPEAKER_00]: I'm trying to look into some picks and shovels ways for data center build-outs.

19:59.405 --> 20:09.094
[SPEAKER_00]: So the first one was Bell Fuse, ticker B-E-L-F-B, and the second one was Amphanol,

20:09.479 --> 20:10.421
[SPEAKER_00]: bigger APH.

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[SPEAKER_01]: Sure, let's take a look at these two companies.

20:14.771 --> 20:20.704
[SPEAKER_01]: B-E-L-F-B and A-P-H-R, these stickers, the ticker's rather.

20:21.165 --> 20:28.180
[SPEAKER_01]: So B-L-F-B is a bell-fused ink, what they do is they design and manufacture and sell electronic components that power

20:28.160 --> 20:35.108
[SPEAKER_01]: and connect circuits, fuses, and power supplies, obviously a clear picks and shovel name here.

20:35.608 --> 20:37.210
[SPEAKER_01]: Now it's a bit smaller of a business.

20:37.290 --> 20:44.978
[SPEAKER_01]: It's more focused and has less breadth than the other name that you asked about, which is a PH, and for all corporation.

20:45.039 --> 20:52.767
[SPEAKER_01]: It's one of the largest global producers of connectors of interconnected systems and fiber-rock to optics and sensors.

20:52.747 --> 21:08.798
[SPEAKER_01]: So, Belf use about $2 to $3 billion market cap company, APH 150 billion, the former Belf use narrower product mix and markets while the other has a bit broader product portfolio across industries.

21:08.778 --> 21:19.609
[SPEAKER_01]: Because Belf uses smaller, it's going to be a bit more subject to the cyclical nature of its specific niches, meaning there's a potential for higher growth certainly.

21:20.150 --> 21:27.217
[SPEAKER_01]: But if cycles turn, there is a potential for a lot of downside risk there, especially compared to APH.

21:27.758 --> 21:38.329
[SPEAKER_01]: Now in terms of profitability, higher profitability from APH scale is certainly reflected here in the margins and in the return and equity as a comparison.

21:39.642 --> 21:53.601
[SPEAKER_01]: Overall, because of these things, right, because of the relative safety, again, relative safety of APH compared to B-E-L-F-B, due to its broader portfolio, because of its higher profitability, it's trading at a bit of a higher valuation.

21:53.781 --> 22:09.042
[SPEAKER_01]: But between these two companies, I think the higher valuation for APH is certainly justified, you get a broader portfolio, you get a larger company, you get a potentially broader growth profile and certainly for now, at least, better profitability.

22:09.106 --> 22:09.707
[SPEAKER_01]: Thanks for the call.

22:12.471 --> 22:15.395
[SPEAKER_01]: On the next invest talk, we will dig into this story.

22:15.575 --> 22:19.380
[SPEAKER_01]: The 2026 great rotation tech versus the old economy.

22:19.901 --> 22:26.330
[SPEAKER_01]: The 2026 begins Wall Street consensus is shifting away from the magnificent seven and towards old economy cycles.

22:26.850 --> 22:30.395
[SPEAKER_01]: So we'll analyze whether the rotation is real or just another head fake.

22:30.896 --> 22:33.780
[SPEAKER_01]: That's tomorrow, but for now I'm Lou Guerrero ready to take your calls.

22:39.025 --> 23:02.637
[SPEAKER_04]: millions of downloads have proved there's value in every invest talk podcast call anytime 24 seven invest talk 88899 chart the January barometer as January is well underway 2026

23:02.701 --> 23:03.643
[SPEAKER_01]: is getting underway.

23:03.723 --> 23:08.031
[SPEAKER_01]: Wall Street is already falling back into, well, the familiar habit.

23:08.071 --> 23:11.397
[SPEAKER_01]: And really, it's a habit that we all fall into in some way in our lives.

23:11.958 --> 23:17.067
[SPEAKER_01]: You try to read the entire year from how January goes.

23:17.127 --> 23:21.655
[SPEAKER_01]: In this case, from the markets first few trading days.

23:22.192 --> 23:24.656
[SPEAKER_01]: Every January narratives, they pop up.

23:24.696 --> 23:31.887
[SPEAKER_01]: They suggest that early gains or early losses, somehow reveal where socks are headed for the next 12 months.

23:32.008 --> 23:36.475
[SPEAKER_01]: Now, it's understandable that people want to have this perspective.

23:36.495 --> 23:39.339
[SPEAKER_01]: It's comforting, it's clean, it feels actionable.

23:39.960 --> 23:42.965
[SPEAKER_01]: Just see something and then extrapolate beyond what it really means.

23:43.025 --> 23:47.372
[SPEAKER_01]: But history says it's mostly just noise.

23:47.723 --> 23:53.490
[SPEAKER_01]: Seasonal indicators like the January barometer, the first trading day effect, or the first week's signal.

23:54.011 --> 24:02.242
[SPEAKER_01]: They've been around for decades, some of these ideas day back to the 1970s, when market observers tried to connect early year momentum with full year outcomes.

24:02.862 --> 24:05.926
[SPEAKER_01]: And the logic sounds intuitive, strong starts reflect confidence.

24:06.387 --> 24:08.770
[SPEAKER_01]: Week starts, they signal caution.

24:08.969 --> 24:16.664
[SPEAKER_01]: The problem is that intuition doesn't survive contact with the data when researchers look across more than a century of market history.

24:17.225 --> 24:23.618
[SPEAKER_01]: The results are remarkably consistent whether the market rises or whether the market falls in early January.

24:24.400 --> 24:26.083
[SPEAKER_01]: The odds of finishing the year higher?

24:27.093 --> 24:29.540
[SPEAKER_01]: Unsurprisingly, they barely change at all.

24:30.302 --> 24:40.191
[SPEAKER_01]: Statistically, the market rises in roughly two out of every three years, and that probability holds regardless of January's opening performance.

24:40.778 --> 24:47.204
[SPEAKER_01]: That finding cuts directly against the idea that early year trading contains any predicted power at all.

24:47.224 --> 24:53.370
[SPEAKER_01]: Even when analysts slice the data different ways, the first day, the first two days, the first week, the first full month, the outcomes the same.

24:54.091 --> 25:01.558
[SPEAKER_01]: None of these patterns meets the standard test of statistical significance used to separate signal from just what is absolute randomness.

25:01.578 --> 25:06.803
[SPEAKER_01]: So in other words, the difference people point to are well within the range of chance.

25:07.120 --> 25:12.909
[SPEAKER_01]: This matters because seasonal indicators often influence investor behavior far more than you realize.

25:13.650 --> 25:16.875
[SPEAKER_01]: When markets dip early in January, fear can creep in unnecessarily.

25:17.275 --> 25:20.601
[SPEAKER_01]: When markets surge complacency can set in just as quickly.

25:21.442 --> 25:26.850
[SPEAKER_01]: Both reactions are rooted in the belief that January is telling us something profound.

25:27.168 --> 25:32.595
[SPEAKER_01]: In reality, it's just another month shaped by liquidity by positioning by short-term sentiment.

25:33.456 --> 25:40.766
[SPEAKER_01]: Early year moves are often driven by portfolio rebalancing, tax-related, flows, institutional position resetting.

25:41.707 --> 25:48.336
[SPEAKER_01]: Those forces can push prices around temporarily without changing the underlying economic or earnings outlook.

25:48.897 --> 25:56.567
[SPEAKER_01]: That's why markets can reverse pretty sharply later in the quarter, making early narratives

25:56.817 --> 26:09.169
[SPEAKER_01]: The bigger drivers of full-year returns are far more mundane, far more boring, earnings growth, interest rates, inflation, economic resilience.

26:10.330 --> 26:17.377
[SPEAKER_01]: These forces evolve over months, over quarters, not over a handful of hours or a handful of days.

26:17.737 --> 26:25.204
[SPEAKER_01]: History shows that strong January's do not guarantee strong years, but at the same

26:26.551 --> 26:35.424
[SPEAKER_01]: investors who anchor too heavily on early season signals risk making emotional decisions disconnected from fundamentals.

26:36.386 --> 26:45.320
[SPEAKER_01]: This is especially important in a year like 2026 where macro uncertainty or policy shifts for valuation questions, they're in pretty large larger than any calendar effect.

26:46.221 --> 26:49.246
[SPEAKER_01]: The temptation, and I get it, it's understandable.

26:49.326 --> 26:55.495
[SPEAKER_01]: The temptation to treat January as some sort of crystal ball, I get it.

26:55.897 --> 26:56.778
[SPEAKER_01]: But it's really helpful.

26:57.279 --> 27:05.189
[SPEAKER_01]: Markets don't reveal their intentions through first, impressions they reveal them through sustained trends, and through changes in fundamentals.

27:06.010 --> 27:09.455
[SPEAKER_01]: The real takeaway then is simple.

27:09.475 --> 27:16.504
[SPEAKER_01]: The odds of stocks rising in 2026 are not improved or impaired by how January begins.

27:17.480 --> 27:22.226
[SPEAKER_01]: So, for all of you out there, discipline beats folklore.

27:22.246 --> 27:27.333
[SPEAKER_01]: And long-term outcomes are shaped by patience, not seasonal superstition.

27:28.094 --> 27:28.815
[SPEAKER_01]: Let's keep things moving.

27:28.995 --> 27:31.318
[SPEAKER_01]: Play another listener question now.

27:32.099 --> 27:33.060
[SPEAKER_08]: I have a quick question.

27:33.100 --> 27:39.128
[SPEAKER_08]: I am 26, and I'm wondering how much I should be contributing to my 401k.

27:39.849 --> 27:47.419
[SPEAKER_08]: I make $80,000 a year that I can contribute up to $20,000 a year

27:47.686 --> 27:56.737
[SPEAKER_08]: That's just six percent, but I'm not sure if that's like way too much the $20,000 to contribute versus having that in other appropriate accounts.

27:57.037 --> 27:58.339
[SPEAKER_01]: Thanks a lot, guys.

27:58.359 --> 28:02.163
[SPEAKER_01]: That's a great question, and certainly you are on the right track here.

28:02.744 --> 28:07.089
[SPEAKER_01]: I think one of the biggest mistakes everybody makes or not everybody but a lot of people make.

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[SPEAKER_01]: They'll lock up all their money in their 401k.

28:10.233 --> 28:11.875
[SPEAKER_01]: They'll lock up all their money in their eye, right?

28:11.915 --> 28:13.316
[SPEAKER_01]: They'll lock up all their money in their Roth.

28:14.898 --> 28:15.499
[SPEAKER_01]: And

28:16.137 --> 28:17.919
[SPEAKER_01]: Frankly, there's an opportunity to cost to that.

28:18.719 --> 28:23.484
[SPEAKER_01]: Taxable brokerage accounts can have a benefit as well.

28:23.504 --> 28:24.545
[SPEAKER_01]: Now, 401k is your great.

28:24.645 --> 28:26.146
[SPEAKER_01]: They are great investment vehicles.

28:26.186 --> 28:31.291
[SPEAKER_01]: They are people's primary savings vehicle especially early on in their careers.

28:31.932 --> 28:32.833
[SPEAKER_01]: And the best part about them?

28:33.654 --> 28:38.698
[SPEAKER_01]: Sure, they can be tax-advanced or rather they are tax-advanced in some way.

28:38.718 --> 28:39.859
[SPEAKER_01]: But the best part about them is the match.

28:39.919 --> 28:43.663
[SPEAKER_01]: It is free money from your employer.

28:44.386 --> 28:45.908
[SPEAKER_01]: But there's an outside.

28:46.929 --> 28:48.391
[SPEAKER_01]: For most people, they're 401k.

28:48.972 --> 28:50.073
[SPEAKER_01]: They have limited fund options.

28:50.133 --> 28:51.115
[SPEAKER_01]: For many reasons.

28:51.355 --> 28:55.260
[SPEAKER_01]: One, primarily being because of liability of the employer, but we won't really get into that.

28:56.742 --> 29:01.848
[SPEAKER_01]: So you are giving up freedom of choice of your investment options for a match.

29:02.629 --> 29:08.757
[SPEAKER_01]: Meaning, in my opinion, once you've hit that match,

29:08.905 --> 29:10.367
[SPEAKER_01]: You should be putting your money elsewhere.

29:11.008 --> 29:13.210
[SPEAKER_01]: Either a traditional IRA or Roth if you qualify.

29:13.631 --> 29:16.775
[SPEAKER_01]: And once you've maxed those out, a traditional brokerage account.

29:17.816 --> 29:25.665
[SPEAKER_01]: Saving is good, but what also matters is where you save and what options you have for investing in those various accounts.

29:26.526 --> 29:27.067
[SPEAKER_01]: Thanks for the call.

29:27.628 --> 29:30.291
[SPEAKER_01]: This is Invest Talk and we are all about answering questions.

29:30.611 --> 29:31.993
[SPEAKER_01]: So let's do two in a row.

29:32.227 --> 29:33.469
[SPEAKER_09]: Hey, Dunkin from New York.

29:33.509 --> 29:34.570
[SPEAKER_09]: Thank you for all that you do.

29:34.831 --> 29:39.278
[SPEAKER_09]: I am now doing some New Year's Cleetanyne right now with one of my portfolios.

29:39.798 --> 29:48.992
[SPEAKER_09]: I am looking to sell two stocks, top, stock ticker, HPE, and stock ticker, PYPL PayPal.

29:49.733 --> 29:53.298
[SPEAKER_09]: It is about 5% total in my portfolio.

29:53.399 --> 29:57.745
[SPEAKER_09]: Looking to utilize it for some extra cash and for some tax loss harvesting.

29:57.961 --> 30:02.909
[SPEAKER_09]: I'm looking to just get rid of it because I think there have been the lowest performer ones.

30:03.190 --> 30:05.453
[SPEAKER_09]: I know that PayPal is losing market share.

30:05.854 --> 30:13.226
[SPEAKER_09]: I believe to Google and Apple because of Google and Apple Pay and HP, I really just got it for the dividend.

30:13.667 --> 30:19.016
[SPEAKER_09]: But I feel like I can use that cash for something else, kind of like robotics or nuclear energy.

30:19.336 --> 30:22.561
[SPEAKER_09]: So looking forward to your advice and have a great day.

30:22.581 --> 30:22.922
[SPEAKER_09]: Bye.

30:23.915 --> 30:24.997
[SPEAKER_01]: Lot to unpack there.

30:25.077 --> 30:32.630
[SPEAKER_01]: First and foremost, I would argue, time to do tax loss harvesting, is actually before the start of the new year.

30:32.810 --> 30:33.011
[SPEAKER_01]: Why?

30:33.832 --> 30:35.856
[SPEAKER_01]: Because there's uncertainty about tax rates in the future.

30:36.196 --> 30:39.161
[SPEAKER_01]: Money today is worth more than money next year.

30:39.241 --> 30:43.088
[SPEAKER_01]: And so whenever you can, especially if you want to divest from a name,

30:43.068 --> 30:47.240
[SPEAKER_01]: You want to realize those losses as soon as possible.

30:47.260 --> 30:48.263
[SPEAKER_01]: That being said, you know what?

30:48.805 --> 30:50.510
[SPEAKER_01]: Better late than never.

30:50.550 --> 30:52.175
[SPEAKER_01]: Now for PayPal, you are correct.

30:52.436 --> 30:57.330
[SPEAKER_01]: PayPal's a name we held a while back for our clients, but it has over

30:57.985 --> 31:14.020
[SPEAKER_01]: Along period of time now, started to, or rather continue to lose market share to Apple Pay to Google Pay or whatever they call it over their own Google phones to crypto transactions, digital transactions.

31:14.000 --> 31:14.961
[SPEAKER_01]: and it's struggled.

31:15.121 --> 31:16.663
[SPEAKER_01]: It's revenue has struggled.

31:16.703 --> 31:21.247
[SPEAKER_01]: It's growth has struggled in the company has struggled because of a down 33% over the past 52 weeks.

31:21.307 --> 31:25.872
[SPEAKER_01]: So I think PayPal is a great candidate for selling out of.

31:25.952 --> 31:32.699
[SPEAKER_01]: Your other one, HPE has struggled a bit as well.

31:32.719 --> 31:39.045
[SPEAKER_01]: My issue and one thing I want to highlight for you is you said you invested it for the dividend.

31:39.802 --> 31:44.332
[SPEAKER_01]: I generally don't like investing in something for a dividend.

31:44.913 --> 31:50.003
[SPEAKER_01]: The dividend should not be the only reason that you are investing in a company.

31:50.504 --> 31:53.511
[SPEAKER_01]: Now, let's take a look at HPE's dividend history here.

31:54.252 --> 31:59.363
[SPEAKER_01]: So HPE, at about 2.4% dividend yield, 2.2% dividend yields,

31:59.798 --> 32:08.387
[SPEAKER_01]: But going back to 2020, it's been pretty weak relative to the rest of the market at underperform to the market by 41.5% in 2020.

32:08.447 --> 32:11.270
[SPEAKER_01]: Number four by 17.8 in 2023.

32:12.471 --> 32:18.017
[SPEAKER_01]: And so, you know, you're investing in that dividend, but it also matters what you're holding on to as well.

32:18.077 --> 32:29.029
[SPEAKER_01]: Dividends can be great signals of a healthy company that can return capital to shareholders that has profitability, all these things, but it should not be the only reason you invest in something.

32:29.009 --> 32:38.122
[SPEAKER_01]: As the new year begins, I think selling out of these things, investing in better opportunities, is a good way to start.

32:38.142 --> 32:40.525
[SPEAKER_01]: Thanks to the call.

32:40.545 --> 32:43.990
[SPEAKER_01]: So we got another live call, Steve from Atlanta.

32:44.050 --> 32:44.631
[SPEAKER_01]: How can we help you?

32:46.473 --> 32:55.106
[SPEAKER_05]: Hello, just for one to ask you about IIT, let on H for long term hold.

32:55.606 --> 32:56.147
[SPEAKER_01]: Sure.

32:56.988 --> 33:02.934
[SPEAKER_01]: Let's take a look at high at high at, of course, is high at hotels, corporation.

33:03.374 --> 33:10.301
[SPEAKER_01]: Big hotel chain, so they operate in franchise, a global portfolio of hotels, resorts, and vacation.

33:10.901 --> 33:11.482
[SPEAKER_01]: Properties.

33:11.502 --> 33:20.290
[SPEAKER_01]: It is a mid-cap to kind of larger mid-cap company, 15 to 16 billion dollar market cap with a decent yield as well.

33:20.310 --> 33:26.556
[SPEAKER_01]: And it's not big, but it's pretty consistent at around 40 basis points, the exception being,

33:26.536 --> 33:39.280
[SPEAKER_01]: hotels we're not making a lot of money now revenue growth has been pretty pretty solid 5.7% on an annualized basis is the revenue growth over the past five or six years.

33:39.732 --> 33:44.619
[SPEAKER_01]: Revenue projected to be 7 billion at the end of 2025, their fiscal year ended in December.

33:45.080 --> 33:51.910
[SPEAKER_01]: Director of the year going to 7.2 billion at the same time margins expanding even to margin 16.4 up from 12 percent.

33:52.311 --> 33:56.998
[SPEAKER_01]: The year before projected to grow even more to 17.5, this upcoming

33:56.978 --> 33:57.478
[SPEAKER_01]: year.

33:57.919 --> 34:03.604
[SPEAKER_01]: Now, looks a little expensive relative to the industry, but not relative to where it's been.

34:04.044 --> 34:09.830
[SPEAKER_01]: Price before looking earnings at 44.1 times is still well below the average of 66 times.

34:09.910 --> 34:15.535
[SPEAKER_01]: Price to book value on the higher end of its range, price to cash flow 62.4 times.

34:15.575 --> 34:17.496
[SPEAKER_01]: Now, why is this company doing well?

34:17.577 --> 34:22.161
[SPEAKER_01]: Because of the past few months, it's up 13.61 percent.

34:22.181 --> 34:26.985
[SPEAKER_01]: It's relative strength gap between it and the S&P 500 is certainly even closing

34:26.965 --> 34:51.471
[SPEAKER_01]: in the near term and one of the reasons why is well in expansion of brands and growth of the world of high-it loyalty program globally has boosted repeat bookings real estate and asset sales that they did help to optimize their portfolio travel has not gone anywhere global travel demand is going to dictate how companies like high it do.

34:52.227 --> 35:00.664
[SPEAKER_01]: Recently, quarterly results didn't include revenue growth, but we're mixed or modest on earnings, but things are looking up in terms of guidance going forward.

35:00.685 --> 35:04.192
[SPEAKER_01]: And so this is going to be entirely tied to the economic cycle.

35:04.232 --> 35:08.160
[SPEAKER_01]: Right, hospitality demand is cyclical.

35:08.140 --> 35:21.009
[SPEAKER_01]: profitability looks solid but operating margins and earnings can be a bit thin when cost rise or cyclical when occupancy softens and there's been a valuation sensitivity here relative to other companies.

35:21.029 --> 35:26.301
[SPEAKER_01]: So I like the idea because I think that demand for travel is still very robust.

35:26.281 --> 35:29.571
[SPEAKER_01]: My concern here, though, is a bit about the valuation.

35:29.671 --> 35:31.678
[SPEAKER_01]: So it's trying to break out of a trend here.

35:31.698 --> 35:32.721
[SPEAKER_01]: I don't know.

35:32.841 --> 35:33.804
[SPEAKER_01]: I think I like the idea.

35:33.824 --> 35:40.324
[SPEAKER_01]: I might look elsewhere within the travel space that is high-note-tells corporation to Gerh H. Thanks to the call.

35:40.608 --> 35:58.549
[SPEAKER_01]: Well, the Treasury Secretary, Scott Besson, is striking an unusually upbeat tone arguing that 2026 could deliver faster US economic growth just as tax refunds and lower with holding from the one big beautiful bill act begin to hit household cash flow.

35:58.529 --> 36:12.784
[SPEAKER_01]: The tax law effectively delivers two years of tax cuts in one, injecting roughly $191 billion into the economy, and potentially adding 30 basis points to GDP, and a time would growth in 2025 likely slowed to around 1.9%.

36:13.065 --> 36:28.401
[SPEAKER_01]: That fiscal boost could be amplified by the end of last year's prolonged government shut down with pen-up federal spending returning to in 2026 and adding another estimated

36:29.140 --> 36:41.314
[SPEAKER_01]: We can tax enforcement following deep IRS cuts, may quietly add further stimulus, as well as lost collections could amount to another 25 basis points, or more if historical patterns hold.

36:41.915 --> 36:43.456
[SPEAKER_01]: Now, there's a bit of a counterweight here, right?

36:43.516 --> 36:45.479
[SPEAKER_01]: Terriffs of the main counterweight in the near.

36:45.879 --> 36:58.033
[SPEAKER_01]: Terms, since existing duties are set to rise, far more race, far more revenue in 2026, and gradually erode consumer purchasing power through higher prices, but drag may prove temporary.

36:58.013 --> 37:12.686
[SPEAKER_01]: You have to remember the Supreme Court may strike down roughly half of the tariffs imposed under emergency powers, a decision that could arrive, and he mode, and I know I read recently, that the Supreme Court has set to announce some decisions on Friday at 10 a.m. Easter.

37:13.326 --> 37:26.738
[SPEAKER_01]: Such a ruling would likely trigger large refunds to companies that paid unlawful tariffs in 2025, potentially worth around 50 basis points of GDP.

37:26.870 --> 37:38.331
[SPEAKER_01]: With fewer workable alternatives to replace that revenue quickly, the overall federal budget stance could turn unexpectedly even more stimulative rather than contractionary.

37:38.716 --> 37:46.391
[SPEAKER_01]: These are all the things that we have to think about as we move into 2026 for reasons why growth in the U.S. economy may pick up.

37:46.952 --> 37:47.773
[SPEAKER_01]: And nothing's stopped there.

37:47.833 --> 37:50.719
[SPEAKER_01]: Monterey policy is also likely to ease in 2026.

37:50.999 --> 38:01.399
[SPEAKER_01]: So the rates already down sharply from their 2024 peak and more cuts possible as the president prepares to appoint a more dovish fed leadership.

38:02.138 --> 38:12.834
[SPEAKER_01]: That tilt towards loser policy would reduce the risk of a sharp market downturn, helping sustain equity prices, household wealth and capital spending tie to AI investment boom.

38:13.035 --> 38:23.110
[SPEAKER_01]: Now some economists see this upside extend globally with fiscal expansion in Germany, policy support in China and Japan, and lower oil prices reinforcing demand outside the US.

38:23.551 --> 38:26.615
[SPEAKER_01]: Now this all sounds good, but you have to understand there are some risks.

38:27.036 --> 38:30.441
[SPEAKER_01]: As well, and you should keep this in your mind when you're framing your outlook.

38:30.421 --> 38:39.739
[SPEAKER_01]: The main risk is that simultaneous fiscal and monetary stimulus could reignite inflation or inflation fears and push long-term interest rates higher.

38:40.500 --> 38:50.539
[SPEAKER_01]: But recent years have shown the economy's ability to outperform gloomy forecasts, leaving a room for the Treasury Secretary's optimism to be tested in 2026.

38:52.358 --> 38:57.375
[SPEAKER_01]: This is in Vestock, I'm with Greer, we have one goal to help you achieve your financial freedom.

38:58.118 --> 39:05.001
[SPEAKER_01]: Or we're continues after this break, our final break, so get your questions in now at 888-99 chart.

39:13.385 --> 39:17.219
[SPEAKER_04]: Calls are free, the unbiased answers are free.

39:17.801 --> 39:19.888
[SPEAKER_04]: So what are you waiting for?

39:20.450 --> 39:24.103
[SPEAKER_04]: Call in Vestock, 888-99, chart.

39:24.691 --> 39:29.197
[SPEAKER_07]: Again, this is Craig from the month, that's how it comes due time before.

39:29.598 --> 39:51.087
[SPEAKER_07]: I wanted to call about VY and I, the Vanguard International High-Eld dividend fund, my Roth IRA and my HSA are pretty much the three largest holdings or ABG, ABG, the DFAW sub-gots of international schools are there, but I have

39:51.370 --> 40:09.987
[SPEAKER_07]: supplemented that with A, B, N, B, and I'm thinking about B, Y, M, I'm making certain the B, Y, M, I, is, it's got a 41% concentration in the financials, and I'm not sure I wanted to get your thoughts on how smart that is in 2026.

40:10.237 --> 40:20.670
[SPEAKER_07]: be in a fully international fund and with that much concentration is financial sector or if I should just stick with AB and the far more value to open that nowhere near the dividend.

40:20.690 --> 40:27.058
[SPEAKER_07]: So several post tax accounts, you know, like the ideas to dividend, but I don't know if the volatility will be worth it.

40:27.078 --> 40:28.380
[SPEAKER_07]: So I want to get your thoughts on that.

40:28.880 --> 40:31.103
[SPEAKER_01]: Again, the Y and I.

40:31.123 --> 40:31.924
[SPEAKER_01]: Thanks a lot.

40:32.866 --> 40:56.567
[SPEAKER_01]: Great question, and certainly, you know, I have a lot of familiarity with the DFA funds, being that I used to work at dimensional and all those guys were often in start of Devontis, and their funds tend to have tilt towards value, tilt towards profitability, but don't explicitly pick things based on high dividend yield, which it looks like the YMI, which is the Vanguard International High Dividend Deal ETF, does they take a conservative approach to international high dividend yield.

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[SPEAKER_01]: So they rank by forecasted yield over the next 12 months,

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[SPEAKER_01]: They combine that with a market cap waiting and effectively get a large basket that doesn't depart from the broad market as radically as some competitors, but still focuses primarily as a sorting mechanism being dividend-yield.

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[SPEAKER_01]: Now, VYMI, from the looks of it, has a fair bit of concentration in the financial sector, which is something that you're just going to see.

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[SPEAKER_01]: Right, if you take a look at its investible universe, it is the MSCI Act, we all country world index, X, US, high dividend yield.

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[SPEAKER_01]: If you're looking for a high dividend yield ETF, the benchmark, the investible universe is 34%.

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[SPEAKER_01]: Financial.

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[SPEAKER_01]: So they're overweight about 9%, nothing that's too crazy.

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[SPEAKER_01]: Certainly if I'm constructing an ETF, that would be well within any sector cap that I would have.

41:51.609 --> 42:03.808
[SPEAKER_01]: I just think that the explicit quote unquote cost of investing in an international high dividend yield ETF is just going to be having a lot of financial names.

42:04.075 --> 42:10.088
[SPEAKER_01]: Let's take a look at the other fun that you you mentioned, uh, I forgot what it was, so we're not going to take away the advantage is fun.

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[SPEAKER_01]: It does not explicitly look for high dividend yielding names within its portfolio construction, so I imagine it has a lower financial weight, but when you take a look at this, I mean it's got 1500 and 4 holdings.

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[SPEAKER_01]: The top 10 holdings have 17.39%.

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[SPEAKER_01]: It is a broadly, broadly, broadly, broadly diversified ETF.

42:33.387 --> 42:36.351
[SPEAKER_01]: You're not going to get very much company-specific risk.

42:36.431 --> 42:41.877
[SPEAKER_01]: Most of your risk is going to be concentrated again by your sector exposure in this case financials.

42:41.937 --> 42:42.939
[SPEAKER_01]: It sounds like you're a bit hesitant.

42:42.959 --> 42:48.766
[SPEAKER_01]: I understand being hesitant, but keep in mind this is also probably smaller portion of your portfolio.

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[SPEAKER_01]: So your effective weight in financials is lower than you'd assume.

42:53.300 --> 43:00.990
[SPEAKER_01]: Either way, you know, from listening to this show, attend to tell people not to chase high dividend yield and have that be an explicit choice.

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[SPEAKER_01]: I think that lesson still rings here.

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[SPEAKER_01]: That is the Vanguard International, high dividend yield ETF.

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[SPEAKER_01]: Thanks to the call.

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[SPEAKER_01]: Now, unfortunately, we do not have much time to go over yet another interesting story about the ramifications of,

43:17.752 --> 43:28.461
[SPEAKER_01]: Data-based buildout on the US Electrical Grid and the fears that demand could outplace supply during these periods of extreme heat and cold, and really what's that's done for tech companies.

43:28.882 --> 43:37.809
[SPEAKER_01]: And how there is more than ever an adversarial relationship between those tech companies and the cities in which they have placed these database centers.

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[SPEAKER_01]: But I promise you, unless Justin has talked about it, at some point before I get back with you on Friday, we will talk all about this story,

43:47.519 --> 43:50.323
[SPEAKER_01]: when I'm back with you all on Friday.

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[SPEAKER_01]: Well, that completes another episode of the Invest Talk podcast, Justin and I thank you for listening, and more than anything we encourage you to tell one friend, one family member about our free podcast downloads, which of course you can get on iTunes, you can get on Spotify, you can get anywhere you listen to your podcasts,

44:12.477 --> 44:16.865
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44:28.365 --> 44:30.469
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44:30.601 --> 44:31.883
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44:45.689 --> 44:46.431
[SPEAKER_01]: That sounds interesting.

44:46.451 --> 44:50.398
[SPEAKER_01]: Head over to investalk.com and click on the portfolio review button.

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