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

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[SPEAKER_05]: Independent Thinking, shared success.

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

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[SPEAKER_05]: Here is KPP Financial Chief Executive Officer,

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[SPEAKER_01]: Good afternoon fellow investors and welcome back to in Vestalk.

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[SPEAKER_01]: This is our Wednesday, January 28th, 20, 26th edition of Vestalk.

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[SPEAKER_01]: We had the Fed Day, happy Fed Day to everyone out there.

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[SPEAKER_01]: I'd love to hear your thoughts on the action or inaction of the Fed today, so give us a call, tell us whatever's on your mind, money related, whether like I said headline news or something else, we are here for it, we're here to help you know better investor and bring topics throughout the hour.

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[SPEAKER_01]: that I think are relevant to you and that you can take home to make better decisions with your money.

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[SPEAKER_01]: That's simple.

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[SPEAKER_01]: That's what this show is really about.

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[SPEAKER_01]: So as usual, we'll tackle what to our first caller question now.

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[SPEAKER_02]: Hello, Investor.

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[SPEAKER_02]: I would like to know your opinion about revolution medicines.

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[SPEAKER_02]: Decor symbol R sin Romeo V as in Victor M as in medicine and D as in delta.

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[SPEAKER_02]: Let me know what you think.

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[SPEAKER_02]: Thank you, by the way, living a voice message and hearing the answer is a great idea of yours.

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[SPEAKER_02]: very nice feature.

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[SPEAKER_02]: Thank you.

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[SPEAKER_01]: Well, thank you for the kind of words we've been doing that for these nearly 30 years now.

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[SPEAKER_01]: So it's been a long time that the best talk has been around.

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[SPEAKER_01]: So this is our format and we're not, we're not, we're not jumping ship.

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[SPEAKER_01]: So we, we appreciate that.

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[SPEAKER_01]: Now revolution medicine, RVMD is a symbol.

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[SPEAKER_01]: Now this is your classic biotech stock that has

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[SPEAKER_01]: burn capital lost money and they're trying to hear cancer basically talking about clinical stage precision oncology drugs and novel targeted therapies.

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[SPEAKER_01]: Now it did go up dramatically because what it looked like was Merck was going to buy them.

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[SPEAKER_01]: But on Sunday, the Wall Street Journal wrote that Merck was no longer in discussions to buy them.

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[SPEAKER_01]: So that kind of crushed the stock because it had moved pretty considerably from about $35 per share back in just August of last year, all the way to a recent high around $125 per share.

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[SPEAKER_01]: So big move because of that potential buyouts.

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[SPEAKER_01]: This is all about that rumor.

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[SPEAKER_01]: Now it's down 98, but that's still, it's me at this price.

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[SPEAKER_01]: The market's still assuming

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[SPEAKER_01]: It's going to get bought out, maybe not 420 plus dollars per share, but that's somebody's going to go and buy them.

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[SPEAKER_01]: What's interesting to me though is why's Mark no longer thinking about buying them?

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[SPEAKER_01]: Okay.

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[SPEAKER_01]: Now.

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[SPEAKER_01]: There are other companies that look like Abby and other pharmaceutical names are also talking about it.

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[SPEAKER_01]: So, you know, your hope here, if you wanted to buy it, is that somebody else does come along and bids for it.

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[SPEAKER_01]: And the market is kind of pricing that in.

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[SPEAKER_01]: So,

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[SPEAKER_01]: You know, this is kind of that weird game of cat mouse and also it's hard to really know how these farm names are going to view their their business and their products and their pipeline.

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[SPEAKER_01]: Obviously a lot of these farm names need new drugs.

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[SPEAKER_01]: There's a lot of patent glyphs and they need a good pipelines.

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[SPEAKER_01]: And that's really the dream of biotech investors is hey.

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[SPEAKER_01]: We're going to go through, we're going to burn a lot of capital, we're going to lose money, but we're going to get further further down the road in getting drugs approved.

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[SPEAKER_01]: And then ultimately either we keep the drug, we start marketing it, or probably even better, you get a bigger name to buy you.

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[SPEAKER_01]: And that's kind of the game you're playing here.

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[SPEAKER_01]: Overall, it's on a game I like to play.

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[SPEAKER_01]: I don't think it's an investment, I think it's pure speculation and there's not really an edge there.

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[SPEAKER_01]: And so I wouldn't buy it, but it doesn't mean it can't work, doesn't mean it won't get bought out if you have some special edge there, then I think it makes sense, but otherwise it's not really an investment that I would make.

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[SPEAKER_01]: Now I've got a lot of ground to cover over the next 45 minutes or so, and time permitting, we will get to all of it.

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[SPEAKER_01]: among companies that only survive on near zero interest rates.

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[SPEAKER_01]: So let's go ahead and spot a zombie company on a balance sheet before the company collapses.

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[SPEAKER_01]: So we'll dig into that story.

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[SPEAKER_01]: In addition, European investors, they're starting to think about diversifying away from the United States and the United States assets.

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[SPEAKER_01]: So what are they saying and what are they doing?

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[SPEAKER_01]: so far.

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[SPEAKER_01]: We'll take into that story.

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[SPEAKER_01]: Also Wall Street is no longer in love with a lot of the software names, sales force to Adobe to service now and many others.

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[SPEAKER_01]: They're struggling.

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[SPEAKER_01]: Why is that?

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[SPEAKER_01]: Is that justifiable?

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[SPEAKER_01]: It's setter.

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[SPEAKER_01]: We'll take into that.

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[SPEAKER_01]: And then lastly, if we have time, big format.

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[SPEAKER_01]: And the promise of the Trump administration was to bring down drug prices that we pay more here than the rest of the world.

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[SPEAKER_01]: And that's certainly true.

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[SPEAKER_01]: But how is he addressed to this industry?

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[SPEAKER_01]: And is it good or bad for the industry as a whole and profits?

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[SPEAKER_01]: So we'll talk about that.

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[SPEAKER_01]: We also have voice main calls, one is on, or fully review, as well as UNIM group UNM is the symbol.

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[SPEAKER_01]: And of course we have some questions that came in via the comment section

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[SPEAKER_01]: most importantly, will be your live call.

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[SPEAKER_01]: So give a question about the Fed, a particular sector, interest rates, housing, etc.

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[SPEAKER_01]: All of this and more we can talk about whatever it is money related we are here to help guide you, help give you some perspective and data so that you once again can make better decisions.

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[SPEAKER_01]: So we're heading to a break and we thank you for helping us achieve more than 62 million downloads in our history.

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[SPEAKER_01]: So,

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[SPEAKER_01]: With that said, give me a call now, with your question at 80-89-U.N.T.R.

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[SPEAKER_04]: If you're ready to get serious with your investment portfolio, Justin Klein and Luke Guerrero of KPP Financial are ready to help.

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[SPEAKER_04]: Have you heard about Parallel investing?

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[SPEAKER_04]: That's where the firm's principles invest their own money in the exact same investment programs at the same price and percentages as their clients.

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[SPEAKER_04]: Parallel investing differentiates KPP financial, because it aligns the interests of KPP principles with those of their clients as they each share the same risks and potential for success.

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[SPEAKER_04]: Learn more anytime at investtalk.com, just click on portfolio review.

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[SPEAKER_04]: The Invest Talk phone lines are open waiting for your finance and investment questions.

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[SPEAKER_04]: 88899 chart.

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[SPEAKER_04]: 247 Rainer Shine There's Always Value in the Invest Talk podcast.

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[SPEAKER_04]: 88899 chart.

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[SPEAKER_01]: It didn't 99 chart, it did 99, 2, 4, 2, 7, 8 is how you get through and ask your question on today's show and it was Fed Day, fun, fun day for everyone out there, everyone talks about it, but how much impact does it really have, at least in the short term, and I continue to argue that it's less and less of an impact throughout the years mainly because

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[SPEAKER_01]: Or excuse me, tie to the changes in both government spending and taxes.

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[SPEAKER_01]: So really net spending, you know, there's a budget deficit increase or decrease.

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[SPEAKER_01]: And that is certainly a very large factor.

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[SPEAKER_01]: So not to say that the Fed day is an important, but it's just less important than it used to be.

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[SPEAKER_01]: And let's talk about what they did.

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[SPEAKER_01]: They really didn't do anything.

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[SPEAKER_01]: There were a couple of the centers in favor of a 25 basis point cut.

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[SPEAKER_01]: But ultimately, they did nothing.

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[SPEAKER_01]: It's still kind of a wait and see mode.

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[SPEAKER_01]: And there really wasn't a whole lot of indication of what future policy will bring.

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[SPEAKER_01]: Marks are still broadly expecting the next rate reduction won't be until June at the earliest.

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[SPEAKER_01]: And the odds of a March rate cut remained at around just 15%.

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[SPEAKER_01]: So, once again, not really much difference from before and after the Fed announcement.

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[SPEAKER_01]: So it really wasn't a really a market mover.

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[SPEAKER_01]: Treasuries were a bit weaker across the curve, yields up about one to two basis points.

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[SPEAKER_01]: So once again, not even a big move in the treasury market, dollar was a bit stronger, but that's after two, three days of big losses on the dollar.

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[SPEAKER_01]: So really more of just a bounce day, didn't close above yesterday's highs.

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[SPEAKER_01]: So I still think the dollar remains in a downtrend.

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[SPEAKER_01]: Gold finished up again.

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[SPEAKER_01]: 4.4% silver up 7.1% I mean precious metals you're just moaning moaning there is in in the in crypto terms right moaning and speaking of crypto Bitcoin down 0.2% not going anyway so it's really interesting to see this everyone was touting crypto is the next great investment and it's pretty clear that

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[SPEAKER_01]: The underallocation to precious metals is the area that most people missed.

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[SPEAKER_01]: We've been talking about it for a number of years.

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[SPEAKER_01]: I frankly had never thought I didn't think it would go.

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[SPEAKER_01]: This high this fast, I thought it would be more of a longer-term grind higher, but obviously geopolitical changes are Earthlet.

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[SPEAKER_01]: And that pushes people to make

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[SPEAKER_01]: changes to the portfolio, both domestically and abroad, and that's really what's driving this precious metal push.

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[SPEAKER_01]: WTI crude ended down 1, sorry, up 1.3% so some strength in oil and I'm actually getting a bit more bullish on oil east in the short term, especially as those geopolitical tensions continue to accelerate.

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[SPEAKER_01]: The S&P closed basically flat down 0.01% one basis point.

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[SPEAKER_01]: So the Nasdaq was the strongest of 40 points up 0.17% so 17 basis points there, really a ho-hum day to be honest.

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[SPEAKER_01]: And the real news was after hours.

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[SPEAKER_01]: We had three big earnings announcements from

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[SPEAKER_01]: Uh, the mag seven you have Microsoft, which was down a bit on earnings meta was a bit stronger.

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[SPEAKER_01]: Let me take a look here.

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[SPEAKER_01]: Yeah, that's been the strongest of the three and Tesla.

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[SPEAKER_01]: to this one.

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[SPEAKER_01]: It's the pull-up for me, of course that one doesn't.

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[SPEAKER_01]: We pull up Microsoft.

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[SPEAKER_01]: Microsoft is still down about, that's decently down about seven or eight percent after hours.

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[SPEAKER_01]: So pretty interesting.

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[SPEAKER_01]: Mix reaction here from Big Tech and we'll see why that closes tomorrow because that's ultimately the most important.

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[SPEAKER_01]: You certainly can get

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[SPEAKER_01]: After hours, low liquidity moves, but ultimately, how does it close?

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[SPEAKER_01]: Not just even tomorrow, but as we close the week.

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[SPEAKER_01]: I think this would be a very interesting weekly close.

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[SPEAKER_01]: Let's see, are we closing it new highs?

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[SPEAKER_01]: Because we're still knocking on that door of new highs for the broader market.

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[SPEAKER_01]: above 7,000 in the S&P, we're at 69, 78.

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[SPEAKER_01]: We get above 7,000 and close there on the week or do we get a reversal on these earnings announcements and potentially disappointment.

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[SPEAKER_01]: So very interesting and excuse me, I'm very, very telling how we close the week after the Fed meeting and in the midst of earnings season.

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[SPEAKER_01]: Now, you probably know by now, received listener questions from the comment section of the Vestock YouTube channel.

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[SPEAKER_01]: And here's one that came nearly, Hitchuston.

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[SPEAKER_01]: I know you're trying to consolidate some gold companies.

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[SPEAKER_01]: I own to, I said, I am trying to consolidate some gold companies.

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[SPEAKER_01]: I own too many thoughts on AEM, Barric, Prank and Nevada, Kim Ross Gold, let's see DE.

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[SPEAKER_01]: I know it's another gold name.

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[SPEAKER_01]: Career mining, there we go.

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[SPEAKER_01]: And NGD, haven't heard.

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[SPEAKER_01]: new gold, okay, new gold.

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[SPEAKER_01]: Well, I said any of these stick out to you.

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[SPEAKER_01]: First off, I think it's good to have a diversification.

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[SPEAKER_01]: I think having, you have six different names.

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[SPEAKER_01]: There's nothing wrong with that.

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[SPEAKER_01]: We own a Niko Eagle, we own Barrick, we own Frick and Nevada.

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[SPEAKER_01]: We don't

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[SPEAKER_01]: be attractive as well.

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[SPEAKER_01]: And there's certainly diversification benefits.

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[SPEAKER_01]: I think of the other three courier is probably my favorite.

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[SPEAKER_01]: And then when you're looking at the KGC and NGD, KGC probably my second favorite of those three can rouse and then NGD probably my least favorite.

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[SPEAKER_01]: But still it's fine.

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[SPEAKER_01]: Or maybe there's just a $29 next year or this year, excuse me, that's

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[SPEAKER_01]: I honestly, I don't see a reason to get rid of any wholesale.

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[SPEAKER_01]: I think this is more of a re-balanced story.

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[SPEAKER_01]: That's what I'd be doing.

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[SPEAKER_01]: What is my target allocation?

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[SPEAKER_01]: This is for everyone out there.

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[SPEAKER_01]: If you own gold, silver, things are going really well.

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[SPEAKER_01]: As I said at the top of the show, better than most people in mixed spec, expecting what we did recently this week is, you know, we're trimming at the margins, right?

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[SPEAKER_01]: The sum of them,

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[SPEAKER_01]: Some accounts, you get overweight, might have had a 4% target, goes to 5, 5 and a half, let's bring that back down to 5 and a quarter, 5%, 4.75, whatever that is.

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[SPEAKER_01]: Trim that down, maybe not all the way to your target, but get closer to it.

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[SPEAKER_01]: And if it goes up again, maybe a little bit more.

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[SPEAKER_01]: And that's what you do in these environments.

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[SPEAKER_01]: When my favorite close to my grandfather is buy when they're sellers and sell when they're buyers, guess what?

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[SPEAKER_01]: There are a lot of buyers for these names.

15:43.225 --> 15:50.915
[SPEAKER_04]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

15:51.396 --> 16:00.048
[SPEAKER_04]: 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_04]: So when you've got finance and investment questions, don't forget to call in Vestock,

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[SPEAKER_03]: I look in Justin, it's Alex here from the UK.

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[SPEAKER_03]: I have decided after listening to you guys and you're advice to review my pension and self-employed, so invest my pension myself with a pension provider in the UK, but realized that the fees were 1% for the platform and then another 1% for any fund I was in.

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[SPEAKER_03]: And this can do you guys, that's gonna take a big hit into the compound over the years on investing.

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[SPEAKER_03]: I was looking at moving into a self-invested pension and just wanted your view on the split and proportions that I'm thinking.

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[SPEAKER_03]: I was thinking of doing about 60% of the pension into a Vanguard world or cap fund, so covers a bit of everything as for core holding, then to wait a slightly more mid-cap.

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[SPEAKER_03]: for the benefits over the long term, 15% in mid-coups, 10% into a mid-coup fund X USA and 5% into a US mid-coup just to move slightly away with the devaluation of the dollar at the moment.

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[SPEAKER_03]: I was then thinking about 11.5% into a emerging market fund so a fund X

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[SPEAKER_03]: then into a two and a half percent position in a golden silver minus fund a two and a half percent position in a copper minus fund just for the long term growth there two and a half percent into a physical gold ETF and potentially a percent in Bitcoin.

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[SPEAKER_03]: What are your thoughts on this

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[SPEAKER_01]: I think this is a great call, a great question, and for everyone out there, this is a good way to think about building an index type of portfolio where you're not just tied to one particular index you're diversifying amongst different size, talking about large caps, you know, the Vanguard total world index, these that all caps that helps kind of spread that out as well, which I really like.

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[SPEAKER_01]: And then a lot of foreign exposure around the world, not being too tight to the US, especially being in the UK, he has currency risk of the dollar to dollar declines.

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[SPEAKER_01]: You don't want too much exposure there.

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[SPEAKER_01]: And really the rest of the world is thinking about doing this is putting more money in immersion markets in these foreign names.

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[SPEAKER_01]: And I like that he's moving more into mid cap, maybe a little small cap as well.

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[SPEAKER_01]: And some satellite positions around precious metals, copper,

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[SPEAKER_01]: maybe even a little bit of, you know, 1% Bitcoin.

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[SPEAKER_01]: I think these are, this is a great kind of mix overall.

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[SPEAKER_01]: Now, what I would say is I'd probably try to up that exposure to precious metals a little bit more maybe not today, but over over time, because I do think that is more in a secular bull market.

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[SPEAKER_01]: So I'd want to bring that up to

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[SPEAKER_01]: probably 10% of the portfolio minimum, maybe even up to 15.

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[SPEAKER_01]: And I would probably trim it from that total world index as well.

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[SPEAKER_01]: So I like this year focusing on mid caps.

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[SPEAKER_01]: That's a good kind of risk versus reward, play a long term where you typically get higher returns, but not quite as much volatility higher returns than large caps typically.

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[SPEAKER_01]: but not quite as much volatility as some of the smaller caps.

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[SPEAKER_01]: And so this is a great start some some tweaks at the margins, but overall with your goals, I think this is a good start.

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[SPEAKER_01]: Those roll into one more question.

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[SPEAKER_07]: Mike here from Florida, and welcome for your take on Unum Group that is ticker symbol U and M. I actually purchased it back in 2021,

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[SPEAKER_07]: Currently, it's about 2.5% of my portfolio.

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[SPEAKER_07]: To me, it looks like a good solid company.

20:18.582 --> 20:22.470
[SPEAKER_07]: I know you guys have access to way more information than I do.

20:22.670 --> 20:29.985
[SPEAKER_07]: So could you let me know if I'm missing something, which would indicate a reversal, at which point I would maybe decide to sell a little bit.

20:30.125 --> 20:32.770
[SPEAKER_07]: Thank you, and I will be listening on the podcast.

20:33.003 --> 20:39.713
[SPEAKER_01]: All right, looking at U and M, Union Group named that we own actually for clients and we have for a while.

20:39.813 --> 20:41.856
[SPEAKER_01]: So, you know, you kind of get on board with that.

20:42.597 --> 20:53.453
[SPEAKER_01]: Irning's are slowing down a little bit, and so the stock has chopped sideways recently, so kind of in the consolidation period, but Irning's was supposed to re-accelerate this year up 10%, which we really like.

20:54.094 --> 20:56.698
[SPEAKER_01]: And it trades at a reasonable multiple,

20:56.999 --> 20:59.303
[SPEAKER_01]: sub 10 times forward looking earnings.

20:59.664 --> 21:14.232
[SPEAKER_01]: And then if you look at some of the other multiples, it's enterprise value to free cash flow is fairly low, it's using, it's going to buy back a billion dollars and shares, which is nearly 10% of the float.

21:14.347 --> 21:30.735
[SPEAKER_01]: So there's that aspect of smart reallocation of capital and so I really we really like the name good solid return equity so I would continue to own you never grow thanks for

21:30.715 --> 21:31.236
[SPEAKER_01]: The call.

21:31.256 --> 21:35.769
[SPEAKER_01]: Now we're heading into a quick break, which means you can call any time and leave your question on the investment.

21:35.789 --> 21:36.290
[SPEAKER_01]: Voice bank.

21:36.872 --> 21:42.086
[SPEAKER_01]: And if you're listening via the live stream or possibly an ambulance while it's running the day area, you can call right now.

21:42.687 --> 21:44.472
[SPEAKER_01]: As always, it's a day, now you need to check.

21:48.856 --> 21:53.869
[SPEAKER_05]: Invest talk is ready 24-7 for your finance and investment questions.

21:54.170 --> 21:58.783
[SPEAKER_05]: My five-year-old son and I listened to your podcast every night, so thank you very much for putting it on.

21:58.983 --> 22:03.034
[SPEAKER_05]: Justin Klein is here and ready to tackle your questions.

22:03.166 --> 22:09.996
[SPEAKER_06]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest into better stock?

22:10.216 --> 22:16.204
[SPEAKER_11]: I'm wondering, what you thought about this read is it would be a good time to get in?

22:16.545 --> 22:18.327
[SPEAKER_00]: I wanted to pick your brain about apples.

22:18.588 --> 22:20.190
[SPEAKER_00]: What did you think about their earnings call?

22:20.571 --> 22:22.253
[SPEAKER_00]: It's just a good time to add to my position.

22:22.393 --> 22:27.300
[SPEAKER_05]: Don't forget to call, in best talk, 888-99 chart.

22:36.258 --> 22:43.087
[SPEAKER_04]: If you heard about Parallel Investing, Parallel Investing differentiates KPP financial.

22:43.447 --> 22:53.180
[SPEAKER_04]: Because it aligns the interests of KPP principles with those of their clients as they each share the same risks and potential for success.

22:53.801 --> 22:59.548
[SPEAKER_04]: Learn more anytime at InvestTalk.com, just click on portfolio review.

23:02.313 --> 23:05.217
[SPEAKER_01]: The herd is being thinned.

23:05.237 --> 23:11.447
[SPEAKER_01]: We discuss why a spike in bankruptcies that actually healthy with a long-term market cycle.

23:11.988 --> 23:14.652
[SPEAKER_01]: We're talking about here are zombie firms.

23:15.273 --> 23:30.075
[SPEAKER_01]: Zombie companies typically generate enough revenue to cover operating costs and service debt without reducing the principle, which means that over time they just are stuck

23:30.629 --> 23:48.345
[SPEAKER_01]: between this balance of not being able to invest in growth, so they don't grow, and they're subject to big changes in borrowing costs, especially when it trades have, when trades go up, and so over time, they often will fail.

23:51.027 --> 23:59.455
[SPEAKER_01]: And these are also typically your value traps in the market, we see this a lot,

23:59.738 --> 24:13.739
[SPEAKER_01]: It looks like it's cheap, it's trading at maybe a single digit P ratio, or it might be a company that has a good brand name that around for a long time and people think that it's safe because of that.

24:14.600 --> 24:22.311
[SPEAKER_01]: But what they're not looking at is the balance sheet and the business is the business sustaining the balance sheet.

24:22.331 --> 24:27.619
[SPEAKER_01]: And in most cases zombie companies, they're really reliant on low interest rates.

24:28.375 --> 24:45.743
[SPEAKER_01]: The rely on not much of their revenue going towards interest, but as we go through this refinancing cycle that is really picking up steam this year and into next year, more and more of these companies, these zombie companies are going to become impaired.

24:46.364 --> 24:58.401
[SPEAKER_01]: unable to meet their financial obligations, and so they'll go into some form of bankruptcy, or even potentially you could just see their share price slowly dwindle lower.

24:59.222 --> 25:02.467
[SPEAKER_01]: So a big tell here is relative strength.

25:02.487 --> 25:07.654
[SPEAKER_01]: Why are these companies that maybe seem like their cheap or seem like they have good brand names?

25:08.215 --> 25:10.839
[SPEAKER_01]: Why do they continue just grind lower?

25:10.859 --> 25:13.062
[SPEAKER_01]: Usually it's because their zombie companies.

25:13.102 --> 25:15.325
[SPEAKER_01]: Their business is no longer great.

25:17.144 --> 25:19.167
[SPEAKER_01]: and neither is their balance sheet.

25:19.187 --> 25:23.572
[SPEAKER_01]: The first time zombie companies were typically talked about was in Japan after the lost decade.

25:24.273 --> 25:35.908
[SPEAKER_01]: What they did, what Japan did, and it caused them to, their equity markets to really meander for a couple of decades, was they forced multiple companies to merge.

25:35.928 --> 25:43.658
[SPEAKER_01]: And usually, many of those companies had stressed balance sheets, so you turned one company

25:44.583 --> 25:50.881
[SPEAKER_01]: and you merge it with one that had a bad balance sheet, and then you got, you know, a not so good balance sheet.

25:52.606 --> 25:58.643
[SPEAKER_01]: And it forced these companies to focus more on debt service than investing in their business.

25:59.551 --> 26:08.123
[SPEAKER_01]: and it relied on, you know, bake the bank backing, the operations, they became bloated, inefficient, and ultimately a lot of them failed.

26:08.143 --> 26:19.519
[SPEAKER_01]: Now, one of the reasons why Japan's stock market has done well lately is because it took him 20, 30 years to kind of burn off the debt of those bad companies or those bad balance sheets, so we said.

26:20.941 --> 26:28.832
[SPEAKER_01]: And this is overall bad for the economy to allow these companies to exist still.

26:30.905 --> 26:34.630
[SPEAKER_01]: Ideally, you get let these companies go bankrupt.

26:35.912 --> 26:37.494
[SPEAKER_01]: They have some sort of reorganization.

26:37.934 --> 26:41.659
[SPEAKER_01]: So there's less burden on their balance sheet.

26:41.899 --> 26:51.332
[SPEAKER_01]: They're able to reinvest and innovate and overall build back their business in something substantial.

26:54.316 --> 27:00.844
[SPEAKER_01]: And this creates better job growth

27:01.972 --> 27:07.340
[SPEAKER_01]: they're the ones that take the pain, but ultimately that's good for the overall economy.

27:10.244 --> 27:19.779
[SPEAKER_01]: Because as they stay in business, the inefficiencies that got them there remain, which you need is new management.

27:19.859 --> 27:31.236
[SPEAKER_01]: Usually when there's a reorganization, there's new management that comes in, a rethink of the business, recapillization of the business, and therefore innovation

27:32.195 --> 27:35.239
[SPEAKER_01]: Now, and should it's go up, you know, that's the big worry here.

27:35.379 --> 27:45.351
[SPEAKER_01]: Is, and trades are starting to go back up again, especially in the long end, that really is tied to lending in the corporate space and for these zombie type companies, right?

27:46.292 --> 27:50.918
[SPEAKER_01]: And so, this is going to be a very interesting new era.

27:52.039 --> 27:56.785
[SPEAKER_01]: Because the last time we went through a corporate bond refinancing cycle was in 2020.

27:56.805 --> 27:59.248
[SPEAKER_01]: In 2021,

28:00.882 --> 28:05.428
[SPEAKER_01]: When a lot of these companies that had hefty amounts of debt, they refinance.

28:05.468 --> 28:11.876
[SPEAKER_01]: Now, one thing here is they refinance a lot in the private credit, private equity space.

28:11.896 --> 28:17.503
[SPEAKER_01]: And so all that debt is coming to do again, usually they borrow four, five, six years.

28:18.284 --> 28:19.606
[SPEAKER_01]: And then you refinance.

28:20.687 --> 28:24.151
[SPEAKER_01]: But now it's no longer borrowing at two, three, four percent.

28:24.752 --> 28:27.936
[SPEAKER_01]: It's borrowing at six, seven, eight, nine percent.

28:28.203 --> 28:30.987
[SPEAKER_01]: depending on how well your business is evolved.

28:31.007 --> 28:49.415
[SPEAKER_01]: And so this is what I would say watch out for, but yeah, I mean, I think that a long term would be good for these names to go under, but also if you're an investor, you need to watch out for the value traps, because the lot of these are still in business, they're still public companies, but their balance sheet remains impaired.

28:50.316 --> 28:56.185
[SPEAKER_01]: And they have not turned out their debt further than a handful of years.

28:56.350 --> 29:08.563
[SPEAKER_01]: So, be on the lookout for them, avoid these value traps, avoid these zombie companies, don't rely simply on low PE's or brand names you know, you really have to dig into the business.

29:09.724 --> 29:17.032
[SPEAKER_01]: Let's go take a call from Jerick from Halifax, Canada, asking about Melie, Melie, M-E-L-I.

29:19.414 --> 29:25.581
[SPEAKER_10]: Justin, thanks for taking my call.

29:25.898 --> 29:34.373
[SPEAKER_10]: for international names and I'm wondering what you think of Mercado Libre after this pullback and what you think of the fundamentals.

29:35.787 --> 29:58.358
[SPEAKER_01]: Yeah, Mercado Libre is a coming out of Uruguay and it's been growing pretty considerably lost money up until really COVID and then $21,000, $21,000, $67 and earnings have really exploded since all the way up to $40 and $42 since last year, once they report forth earnings, that's what the estimate will be.

29:58.879 --> 30:02.044
[SPEAKER_01]: And then for this year, nearly $59 per share.

30:02.104 --> 30:03.786
[SPEAKER_01]: Now,

30:04.357 --> 30:12.635
[SPEAKER_01]: estimate trends are lower, so that worries me a bit, especially with the multiple that it is trading at.

30:12.655 --> 30:13.757
[SPEAKER_01]: Cool chart here.

30:14.599 --> 30:19.750
[SPEAKER_01]: Because if you look at it's forward, where are we forward PE?

30:20.219 --> 30:22.123
[SPEAKER_01]: Yeah, I mean, it's, it's, it's pretty expensive.

30:22.664 --> 30:25.669
[SPEAKER_01]: Yeah, next 12 months, PE is $129.

30:25.849 --> 30:25.950
[SPEAKER_01]: Okay.

30:27.352 --> 30:29.115
[SPEAKER_01]: So it's, it's pretty expensive.

30:29.135 --> 30:29.977
[SPEAKER_01]: And that's what worries me.

30:30.097 --> 30:36.449
[SPEAKER_01]: And the, the chart has certainly slowed it peak back in July at $2600.

30:36.489 --> 30:37.972
[SPEAKER_01]: Now we're at $2200.

30:38.733 --> 30:41.739
[SPEAKER_01]: So it's not dramatically down, but it's certainly been in a bit of a downtrend.

30:42.220 --> 30:44.083
[SPEAKER_01]: And if, if you get,

30:45.430 --> 30:51.462
[SPEAKER_01]: that growth continue to slow, then you're gonna see a correction in the multiples.

30:52.243 --> 30:59.457
[SPEAKER_01]: So until it can start making higher lows and higher highs, technically I would stay away from it.

30:59.656 --> 31:05.663
[SPEAKER_01]: even though long-term it's still in kind of an uptrend, but the momentum is certainly waiting and I don't like those multiples.

31:05.763 --> 31:08.647
[SPEAKER_01]: So it's a name I'd probably keep on my watch list.

31:08.747 --> 31:14.253
[SPEAKER_01]: I do like foreign stocks, but I typically like the names that are value.

31:14.273 --> 31:18.999
[SPEAKER_01]: There's a lot of value out there in the foreign market, and this just simply isn't that.

31:19.880 --> 31:21.782
[SPEAKER_01]: Okay, it's still pretty expensive.

31:22.538 --> 31:29.690
[SPEAKER_01]: So I would stay away from it for now and watch for a reversal in trend because right now it's in a modest downturn.

31:30.451 --> 31:31.132
[SPEAKER_10]: Okay, great.

31:31.212 --> 31:31.994
[SPEAKER_10]: Thanks for taking my call.

31:32.334 --> 31:32.615
[SPEAKER_01]: No, bro.

31:33.196 --> 31:39.145
[SPEAKER_01]: Those are the back to the best stock voice bank for question that came in earlier on the 24 seven line at eight and eight ninety nine chart.

31:39.806 --> 31:40.588
[SPEAKER_09]: Hi, Justin and Luke.

31:40.608 --> 31:41.589
[SPEAKER_09]: Matt and soft Florida.

31:41.790 --> 31:48.040
[SPEAKER_09]: Interesting to get your thoughts on ticker symbol A, C, I, W, which is ACI worldwide.

31:48.560 --> 32:07.709
[SPEAKER_09]: was looking to expand some of the payment equities in my taxable portfolio, looking to order for maybe something like five to seven year time horizon, wanted to get your thoughts on the outlook on this stock in an effort to sort of broaden beyond the usual suspects of Visa, MX and PayPal.

32:07.950 --> 32:08.290
[SPEAKER_09]: Thank you.

32:09.670 --> 32:34.530
[SPEAKER_01]: Looking at ACI world wide and they're engaged with development, marketing, and installation of supportive software products, and solutions, primarily focused on facilitating real-time electronic payments, as you said it's in the payments world, talking about working with banks, merchants, billers, consumer finance, insurance health care, so kind of well diversified in that sense.

32:34.747 --> 32:40.153
[SPEAKER_01]: $2.53, 54 cents, a 8% from last year, when it dropped 10%, the $2.34 cents.

32:40.633 --> 32:44.277
[SPEAKER_01]: So we're still not back to all-time highs of 2024, which is $2.61.

32:45.098 --> 32:54.148
[SPEAKER_01]: And this is the name that rallied pretty considerably off the lows back in 2023, down around $20 for share, and rallied to a 52-week high, right around 58.

32:55.389 --> 32:59.433
[SPEAKER_01]: And it's been a downtrend really ever since, when was that?

32:59.473 --> 33:03.758
[SPEAKER_01]: This was back in December of 2024.

33:03.822 --> 33:11.734
[SPEAKER_01]: So it's been in a solid downtrend for over a year and I don't like that relative strength.

33:12.535 --> 33:14.337
[SPEAKER_01]: It does have a little bit of that in its balance sheet.

33:14.518 --> 33:20.647
[SPEAKER_01]: It is relatively cheap, but if you look at the growth numbers, they're pretty meager.

33:20.987 --> 33:23.411
[SPEAKER_01]: Turn equity is good, 18%, that's solid.

33:25.033 --> 33:29.400
[SPEAKER_01]: But it's quite now and I just can't buy into this chart.

33:30.081 --> 33:31.703
[SPEAKER_01]: It is in a downtrend.

33:32.088 --> 33:34.892
[SPEAKER_01]: Mark, it was flat today, it was down 2.6%.

33:35.613 --> 33:38.477
[SPEAKER_01]: The relative strength here is just poor.

33:39.618 --> 33:40.680
[SPEAKER_01]: Relative strength is 19.

33:41.481 --> 33:42.422
[SPEAKER_01]: And I just can't buy that.

33:42.943 --> 33:44.705
[SPEAKER_01]: And it's the competitive space.

33:45.206 --> 33:48.750
[SPEAKER_01]: Crypto is encroaching on payments in many ways.

33:48.810 --> 33:55.620
[SPEAKER_01]: It's going to easier to transfer money through other means than this.

33:55.780 --> 33:59.665
[SPEAKER_01]: And to me, it looks like their business is not really growing.

34:00.708 --> 34:07.818
[SPEAKER_01]: And so I'm not gonna pay a meeting's multiple for a business that isn't really growing and has a little bit that in its balance.

34:07.859 --> 34:10.603
[SPEAKER_01]: I just think this gives me, I give this a seat.

34:11.444 --> 34:12.065
[SPEAKER_01]: I don't want seats.

34:12.445 --> 34:14.709
[SPEAKER_01]: In my portfolio, I want A's, okay?

34:16.351 --> 34:21.999
[SPEAKER_01]: I don't really want B, so I want A's, A plus is A minus, is A, I want, I want a four point out.

34:22.741 --> 34:26.105
[SPEAKER_01]: This is a met with a, with a poor chart.

34:26.326 --> 34:29.871
[SPEAKER_01]: So I'm passing on A, C, I, W.

34:30.138 --> 34:33.241
[SPEAKER_01]: Don't say on one more call like question now.

34:33.261 --> 34:35.283
[SPEAKER_08]: Hey guys, Shane from Clark.

34:35.843 --> 34:36.784
[SPEAKER_08]: Love what you got to do.

34:37.244 --> 34:38.726
[SPEAKER_08]: I'll listen to her the show.

34:38.746 --> 34:40.407
[SPEAKER_08]: My question is about Iris.

34:40.427 --> 34:41.528
[SPEAKER_08]: This recently created one.

34:41.649 --> 34:44.371
[SPEAKER_08]: It was wondering how I should allocate my funds.

34:44.391 --> 34:47.434
[SPEAKER_08]: Should I use visual funds to base my portfolio?

34:47.454 --> 34:48.034
[SPEAKER_08]: Thanks guys.

34:48.054 --> 34:49.596
[SPEAKER_08]: Well, you do appreciate the work.

34:49.996 --> 34:51.217
[SPEAKER_08]: I'll be listening in for the answer.

34:51.518 --> 34:52.619
[SPEAKER_08]: Thank you.

34:52.639 --> 34:54.680
[SPEAKER_01]: Well, sounds like you're just getting started.

34:55.121 --> 34:57.563
[SPEAKER_01]: And meet funds are fine.

34:57.897 --> 35:27.853
[SPEAKER_01]: ETFs are probably better because no trading costs there unless you're a platform you're on and there's a lot of options nowadays and so Somebody you might be new to this that brought diversification is the best way to go and you learn from there You know you can augment ETF holdings with individual names if you want but I would go with ETFs and build an allocation

35:27.833 --> 35:31.137
[SPEAKER_01]: somewhat different at least from a US investor.

35:31.757 --> 35:33.459
[SPEAKER_01]: But think about that.

35:33.499 --> 35:38.125
[SPEAKER_01]: Think about how we had a few core big exposures and then some satellite holdings as well.

35:39.907 --> 35:56.946
[SPEAKER_01]: Now speaking of foreign investors, let's talk a little bit about Europe and the risk here that they could be diversifying away from

35:57.601 --> 36:00.365
[SPEAKER_01]: And there's obviously a lot of, there's some chill in the air.

36:00.705 --> 36:24.098
[SPEAKER_01]: So we say with with Davos, not just because of the weather, but leaders around the world are wondering, how this next three, seven years are going to evolve and even beyond is at the end of the reliance on the United States and foreign investors have been big buyers of US stocks of recent years.

36:24.213 --> 36:31.121
[SPEAKER_01]: And there are big reason why the indices have continue to go up, particularly European investors.

36:31.141 --> 36:34.985
[SPEAKER_01]: They've been really the biggest buyers for the past few years.

36:35.446 --> 36:38.610
[SPEAKER_01]: But there's signs that that is waning.

36:39.250 --> 36:49.182
[SPEAKER_01]: Now they're not selling in masks, but at the very least, they are looking at other areas of the world, to invest in.

36:49.642 --> 36:51.064
[SPEAKER_01]: And this is coming from,

36:51.618 --> 36:56.524
[SPEAKER_01]: Europe's largest asset manager, there's $2.7 trillion in assets and management.

36:57.726 --> 37:06.396
[SPEAKER_01]: And it's one of those things where they're not gonna do it all at once, but the disentanglement could happen over a number of years.

37:07.798 --> 37:13.525
[SPEAKER_01]: A lot of them in our major benchmarks, right, the S&P, Russell 3000, et cetera.

37:15.007 --> 37:17.592
[SPEAKER_01]: And so number one is hedging against the fall in the U.S. dollar.

37:17.772 --> 37:18.734
[SPEAKER_01]: You're already seeing that.

37:19.035 --> 37:23.263
[SPEAKER_01]: Europe, the euro's strengthening, Swiss francis, through strengthening, et cetera.

37:24.725 --> 37:32.841
[SPEAKER_01]: So number one, they need to hedge that risk, which it makes it less tentable to hold U.S. assets.

37:34.023 --> 37:38.331
[SPEAKER_01]: And Europeans own roughly $10.4 trillion in U.S. stocks.

37:38.598 --> 37:44.828
[SPEAKER_01]: And more than half of that total is borne by investors in the eight countries present Trump is threatening tariffs.

37:46.831 --> 37:57.548
[SPEAKER_01]: An overall European's own 49% of all US stocks held by foreigners, so it's really about diversification, both in equities, bonds, and the dollar over time.

37:58.169 --> 38:03.998
[SPEAKER_01]: And so they're not going to ditch US assets overnight, but it's probably going to be a slow

38:04.265 --> 38:09.851
[SPEAKER_01]: Now, U.S. equities that outperformed, but not last year, the stock six hundred was up 32 percent in dollar terms.

38:09.871 --> 38:26.068
[SPEAKER_01]: The Japan topics with gain 23 percent, South Korea, cost views up 80 percent, the S&P was up 16 percent, so that performance was the widest margin in 20 years compared to Ford stocks, or compared to domestic stocks.

38:26.609 --> 38:29.412
[SPEAKER_01]: So this is a trend that I don't think is shifting.

38:31.113 --> 38:33.015
[SPEAKER_01]: Those are the best thought I'm just in line with one goal.

38:33.536 --> 38:35.358
[SPEAKER_01]: That's up to you, your own version of financial freedom.

38:35.398 --> 38:36.839
[SPEAKER_01]: We're going to work continues after this final break.

38:36.859 --> 38:42.646
[SPEAKER_01]: Let's get questions in right now at 88899 chart.

38:42.666 --> 38:47.751
[SPEAKER_04]: Every investor is working to build a secure financial future.

38:48.272 --> 38:53.758
[SPEAKER_04]: The more you learn about how the market works, the better your chances for success.

38:54.419 --> 38:58.183
[SPEAKER_04]: Invest talk, 88899 chart.

38:58.619 --> 39:06.108
[SPEAKER_11]: Elugin Justin, this is Chris from Florida, had just a question around a strategy that was introduced to me by an analyst.

39:06.428 --> 39:23.428
[SPEAKER_11]: Basically what he does is he looks for stocks that are in stage two uptrends and then puts a position on, puts a stop loss below the 200 day moving average about 15% or so, depending on how much risky wants to take.

39:23.847 --> 39:26.191
[SPEAKER_11]: That's just a process and that's how it picks winners.

39:26.531 --> 39:32.380
[SPEAKER_11]: Just curious what you think about this strategy is a growth investor, obviously very comfortable with risk.

39:32.400 --> 39:35.044
[SPEAKER_01]: We haven't looked at that particular strategy itself.

39:35.144 --> 39:39.631
[SPEAKER_01]: I do like to, I don't know what stage two uptrends are.

39:40.713 --> 39:42.295
[SPEAKER_01]: Obviously some vernacular there.

39:42.528 --> 39:44.591
[SPEAKER_01]: that I'm not particularly familiar with.

39:44.871 --> 39:46.453
[SPEAKER_01]: I like to know what that definition is.

39:47.234 --> 39:54.643
[SPEAKER_01]: But I do like to invest in names that had been down considerably and now they've started an uptrend.

39:55.705 --> 40:05.217
[SPEAKER_01]: And oftentimes that's the start of our version to the mean, maybe investors got overly bearish on the name or the sector for particular reason.

40:05.878 --> 40:11.725
[SPEAKER_01]: And now it's starting to recover and having a stop, but 15%, below the 200,

40:12.143 --> 40:17.712
[SPEAKER_01]: that can be a lot or a little depending on the stock and how volatile it tends to be.

40:18.373 --> 40:23.260
[SPEAKER_01]: So, I don't know enough about this strategy to really judge it.

40:23.421 --> 40:25.003
[SPEAKER_01]: It's obviously very technical nature.

40:25.043 --> 40:28.088
[SPEAKER_01]: There's no fundamental aspects to that and that can be fine.

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[SPEAKER_01]: But, obviously, over the mediums along term,

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[SPEAKER_01]: It's about the business and the quality of the business and in setting it around the business as well.

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[SPEAKER_01]: So I would be more focused.

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[SPEAKER_01]: I'd like to what we need to do at KPP, we'd like to meld both the technicals, which is what you're talking about, with the fundamentals and the macro backdrop.

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[SPEAKER_01]: When you have all three of a three-pronged approach that works, when you just have one, it could work, but every market's different, and you're going to have, I think, a lot of

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[SPEAKER_01]: Now speaking of that, let's talk a little bit about the software industry, and it was industry for years that was the darling of tech and dusting, Marca and Jason once said, software is eating the world.

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[SPEAKER_01]: And it was easy for them to rent space with Amazon, they'd have to own their own data centers, they just built the software and put an army of salespeople out there to get

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[SPEAKER_01]: Companies like Salesforce, the dobi's service now, they're all down at least 30% since the start of last year.

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[SPEAKER_01]: And it's all because of mainly cloud.

41:41.492 --> 41:51.931
[SPEAKER_01]: And Thropic's cloud code, they rolled out a new update recently that really helps dramatically shrink the time to build even complex software.

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[SPEAKER_01]: Now, we've done this internally.

41:53.634 --> 41:57.801
[SPEAKER_01]: We've used cloud to build internal tools that

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[SPEAKER_01]: We're still not, we have canceled our old subscriptions, but we're finding that we think over time that's going to be not needed, right?

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[SPEAKER_01]: Those old subscriptions.

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[SPEAKER_01]: So it's happening in real time for businesses.

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[SPEAKER_01]: And this is a reminder, especially in the tech world that fortunes can change.

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[SPEAKER_01]: I hear this a lot where, oh, and I buy this company, and put it in a drawer and forget about it.

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[SPEAKER_01]: Well, I think for maybe some sectors that can be true,

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[SPEAKER_01]: It's definitely not true for all sectors and it's definitely not true for tech, nobody could have thought, you know, 10 years ago that These SaaS names we're going to be down in their luck in a major way and That the death of software could be be Be near and that's what AI is making investors think

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[SPEAKER_01]: Your software start up with it with all the rage.

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[SPEAKER_01]: You can see every niche, right?

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[SPEAKER_01]: It's software to serve every niche.

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[SPEAKER_01]: It was making the world more efficient.

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[SPEAKER_01]: And that's certainly true.

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[SPEAKER_01]: Anacreded steady returns for investors.

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[SPEAKER_01]: You had SaaS businesses, you knew exactly what that revenue is going to be every year, and you had a sticky business with low-churn rate service now was a good example of extremely low-churn rate.

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[SPEAKER_01]: And it even brought in a lot of credit investors, private credit, private equity that bought out a lot of these smaller software names.

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[SPEAKER_01]: But over the past couple of years, 13 software companies have defaulted on loans within the space.

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[SPEAKER_01]: And that never happened the decade before they were zero.

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[SPEAKER_01]: And so you're starting to see this as a big risk for tech investors and software investors.

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[SPEAKER_01]: Now certainly we mix back, I think some companies are really going to struggle.

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[SPEAKER_01]: Others, I think the threat is overblum.

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[SPEAKER_01]: So you have to be really careful and it's no longer the era where you just buy software names and they're revenue continues to go up and it's definitely going to be a world of landmots.

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[SPEAKER_01]: Now I'm Justin Klein.

43:59.028 --> 44:05.443
[SPEAKER_01]: Please remember that you have any questions about your French situation.

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[SPEAKER_01]: I encourage you to reach out to us at KQ Financial where you practice parallel investing.

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44:15.352 --> 44:23.960
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44:31.968 --> 44:35.513
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