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

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

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

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[SPEAKER_00]: Good afternoon fellow investors and welcome back to invest talk.

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[SPEAKER_00]: This is our Monday, March 30th, 2026 edition of Invest Talk.

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[SPEAKER_00]: I'm Justin Klein and I am here.

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[SPEAKER_00]: Tell a B become a better investor, a lot going on in markets.

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[SPEAKER_00]: We're having this pullback on the inflationary spike that is that we're in the midst of.

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[SPEAKER_00]: I don't think most of you will felt it quite yet, but we are going to feel it very, very soon.

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[SPEAKER_00]: And the market is starting to price that in and that means certain areas of the markets are struggling more than others and we're going to dig into that and much, much more during this hour.

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[SPEAKER_00]: It's going to be really about the current market environment, the current trends that we're seeing and how they will impact you, your portfolio and the broader economy.

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[SPEAKER_00]: So that's what this hour is about.

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[SPEAKER_00]: We're going to bring you data and perspective.

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[SPEAKER_00]: I have over 25 years of investment experience.

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[SPEAKER_00]: And we're also going to answer your financial investment questions.

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[SPEAKER_00]: Whatever is on your mind, we are here for it.

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[SPEAKER_00]: So in just a bit, we'll talk about today's mark performance and run down the show topics that we'll hit on for the hour.

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[SPEAKER_00]: But as usual, we'll tackle this first-collar question now.

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[SPEAKER_07]: Hi, I was hoping that you would talk about evolves

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[SPEAKER_07]: I just wonder if you think it might be a good long-term, it has any good long-term potential.

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[SPEAKER_00]: Thank you.

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[SPEAKER_00]: Vault technologies about a billion dollar market cap, and what do they do?

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[SPEAKER_00]: They provide AI based touch-less security screening systems.

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[SPEAKER_00]: So if you're looking for a name to capitalize on potentially dystopian future, this is probably the type of name that you want to.

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[SPEAKER_00]: So from a longer perspective, you think that's the world

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[SPEAKER_00]: it will this be the winner?

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[SPEAKER_00]: That's another question.

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[SPEAKER_00]: Revenue's last quarter up 32 percent that is slowing a year goes up 44 percent and earnings were getting better and last quarter they were flat year over year.

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[SPEAKER_00]: And when I say earnings, I mean negative earnings because they have never made money.

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[SPEAKER_00]: Free cash flow has reduced, however, which I like.

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[SPEAKER_00]: It's, it was deeply negative at about 100 million in the middle of 2024, now it's only about 18 million.

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[SPEAKER_00]: And last quarter, that's, that's true in 12 months.

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[SPEAKER_00]: And actually last quarter, it turned positive for the first time at about 12 million dollars.

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[SPEAKER_00]: That is the positive.

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[SPEAKER_00]: It's moving in the right direction from a cash flow perspective.

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[SPEAKER_00]: Now it's still issuing a ton of shares, which I don't like, I would like them to stop that.

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[SPEAKER_00]: Now that their cash flow positive, maybe they can get there, no dividend, pretty much no debt like that.

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[SPEAKER_00]: And then if you look at the chart, it has pulled back along with a lot of the other growth names in the market,

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[SPEAKER_00]: So it makes sense why it's pulled back.

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[SPEAKER_00]: Over the long, over the medium term show we say, because we're about to a weekly charted it is and been in a consistent uptrend really since 2019.

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[SPEAKER_00]: So I like the growth here.

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[SPEAKER_00]: I like the trajectory of the cash flows.

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[SPEAKER_00]: I like the balance sheet.

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[SPEAKER_00]: And once again, if you were going to bed on this

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[SPEAKER_00]: Basically, AI just scanning all of our faces that everywhere and giving us access, then this might be the name for you, but that's really what you are betting on here and it's digging itself out of this negative earnings hole.

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[SPEAKER_00]: I just don't like gross stocks right now and so I would keep in the back burner until things improve from a technical perspective.

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[SPEAKER_00]: Now, we'll be a lot of ground to cover over the next 45 minutes or so in time permitting,

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[SPEAKER_00]: And our main focus point is, the rate cuts still coming despite geopolitical inflation.

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[SPEAKER_00]: But it reserve officials are grappling and central banks are on the world grappling with conflicting signals as you see a re-ignition of inflation worldwide.

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[SPEAKER_00]: Should they reconsider rate cuts?

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[SPEAKER_00]: Should they consider rate hikes?

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[SPEAKER_00]: We're gonna dig into all of this and much, much more for this hour, much more is a few other topics on the docket.

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[SPEAKER_00]: What is consumer staple stocks?

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[SPEAKER_00]: They're actually down more than the S&P since the start of the war and most people, most lay people, shall we say,

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[SPEAKER_00]: consumer stables are a flight to safety and that's where you'd want to invest, but the opposite's been true so far.

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[SPEAKER_00]: And I'll tell you why, and we'll explain.

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[SPEAKER_00]: In addition, we're going to look at what percentage of fun types outperform in particular time periods.

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[SPEAKER_00]: Intent.

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[SPEAKER_00]: Once you move outside of the large cap growth names, it gets a large cap name, large cap funds, it gets a lot lower, sort of digging into those.

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[SPEAKER_00]: That data is well, and then also the supply chains beyond just oil and gas, we're gonna look fertilizer, aluminum, helium, et cetera, and what type of impact that might have on the broader economy.

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[SPEAKER_00]: We also have questions about Luxodica, as well as Synchrony Financial.

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[SPEAKER_00]: And we have some questions that came in via the best talk YouTube channel as well.

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[SPEAKER_00]: And most importantly, we'll be your live calls.

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[SPEAKER_00]: A to date 99 chart is the number to how you get through and ask your question on today's show.

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[SPEAKER_00]: And if you're listening via our live stream or possibly an aim 1220 in the Bay Area, you can call right now at A to date 99 chart.

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[SPEAKER_04]: When you tell your friends about Investork and they ask you why you listen, let them know there are many reasons and one is Parallel Investing from KPP Financial and Investorkos Justin Klein.

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[SPEAKER_04]: Parallel investing means Justin invests right alongside KPP financial clients.

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[SPEAKER_04]: He makes the same trade for KPP financial on the same day at the same price and the same percentages as KPP clients.

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[SPEAKER_04]: There's no front running and no special treatment.

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[SPEAKER_04]: In this way, Justin and KPP financial share the same risks and the same potential for success.

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[SPEAKER_04]: Parallel Investing aligns the interests of Justin and KPP Financial with those of his clients.

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[SPEAKER_04]: Justin, Klein and Luke Guerrero are ready to answer your questions about Parallel Investing.

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[SPEAKER_04]: And you can learn more anytime at InvestTalk.com.

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[SPEAKER_04]: Justin Klein is here, and he's ready with answers to your finance and investment questions.

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[SPEAKER_04]: Call in Vest Talk.

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[SPEAKER_04]: 888-99 chart.

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[SPEAKER_00]: Let's go check on the market today, and it was a very interesting day overall.

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[SPEAKER_00]: You had the broader markets down deep in negative territory, but it was really dragged down by tech, everything AI related.

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[SPEAKER_00]: And is this the market starting to figure out that higher energy prices and disrupted supply chains will impact that sector broadly?

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[SPEAKER_00]: And there will be a, they'll have a difficult time with the build out and sourcing products.

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[SPEAKER_00]: I think that's kind of what the market said today.

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[SPEAKER_00]: You had Nvidia and Apple down about one, one and a half percent.

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[SPEAKER_00]: But that was not the worst of it at all.

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[SPEAKER_00]: You had the chip manufacturers down your chip equipment manufacturers down.

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[SPEAKER_00]: You had some of the industrial names linked to the AI data center supply chains down.

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[SPEAKER_00]: You had named like Sandisk and Micron down big, what's in digital down big.

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[SPEAKER_00]: But if you look elsewhere, there's a lot of green.

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[SPEAKER_00]: Staples were strong, health care was strong, even the financials did fairly well.

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[SPEAKER_00]: So if you look at the NASDAQ down about three quarters of one percent, the Dow, say the S&P down four tens of one percent.

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[SPEAKER_00]: You would say that's a rough day, but once again, drag down by big tech and even medium tech.

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[SPEAKER_00]: In fact, mid cap growth was down the most today, about 1.8% versus large cap value actually was up a quarter percent.

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[SPEAKER_00]: The Dow overall was up about 50 points, about 0.11% to some very interesting trends underneath the surface.

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[SPEAKER_00]: and how that's doesn't look like it's ending anytime soon.

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[SPEAKER_00]: Trump said he wants to take Iranian oil.

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[SPEAKER_00]: It's hard to understand heads or tails.

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[SPEAKER_00]: So what's really going on over there?

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[SPEAKER_00]: That's why I'm actually watching the market.

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[SPEAKER_00]: So far, it's not really dramatic escalation, but I think the market is starting to realize that this is not ending.

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[SPEAKER_00]: anytime soon and that $100 oil probably here to stay for a little while even if you ended the war today the damage if two infrastructure within the Middle East would keep oil at $7580 the barrel or higher most likely so very interesting trends underneath the surface you had yields down so bonds actually rallied or as before it was really about stocks and bonds selling off

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[SPEAKER_00]: So I thought that was of note.

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[SPEAKER_00]: You actually had a bit of movement from the Treasury Market, which we'll talk about later that the market's now pricing in a little bit of a chance of a rate cut by your end and a rate hike is going into the weekend, the odds of a rate hike were actually higher than a rate cut by your end.

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[SPEAKER_00]: So kind of bouncing around the either side of neutral between now and your end.

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[SPEAKER_00]: Once again, I'll tell you again in deeper on that, but that's what brought the interest rates down a little bit.

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[SPEAKER_00]: Dollar at 0.4% on the day.

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[SPEAKER_00]: Mainly this is about a stronger yen, looking at more forceful intervention overnight.

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[SPEAKER_00]: That's a little bit of a potential carry trade unwind, shall we say?

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[SPEAKER_00]: It's only minor, but that could be a factor in today's cell-off.

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[SPEAKER_00]: Goal finished up one and a half percent.

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[SPEAKER_00]: and silver up 1.1% Bitcoin up 0.6% WTI crude finished over $100 a barrel for the first time since July of 2022 it up 3.3% on the day, Brent crude finished about flat.

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[SPEAKER_00]: So a lot of moving pieces in the markets, I think we're getting close to good support.

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[SPEAKER_00]: I think we still have another one to two percent down in the major indexes before you get

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[SPEAKER_00]: In markets, I've said this for a little while.

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[SPEAKER_00]: Once the uptrend breaks in the S&P, the first major major support is at 6175.

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[SPEAKER_00]: Today we're at 6343 on the close.

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[SPEAKER_00]: So that's about 175 points from here.

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[SPEAKER_00]: It was close to the 3%.

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[SPEAKER_00]: The 2.5 or so, 3%.

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[SPEAKER_00]: I think that's where we'll find major support in markets.

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[SPEAKER_00]: Now, you probably know your question submitted via our comment section on a YouTube channel.

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[SPEAKER_00]: So here's one that came in earlier, CK52 says I'm sorry to get intrigued by VNT after this pullback.

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[SPEAKER_00]: My grabbing a falling knife, click a look at VNT volunteer.

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[SPEAKER_00]: I know that because we used to own this name, wow back.

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[SPEAKER_00]: It's been choppy for a number of years, because earnings have really been flat.

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[SPEAKER_00]: Realizing 20 cents earnings last year, so it's been $3.45 this year, $3.70 in extra.

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[SPEAKER_00]: Okay, so it's a decent growth.

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[SPEAKER_00]: But they're in 308 and 2022.

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[SPEAKER_00]: When I wanted to do, they provide equipment, components, software and services for the transportation industry.

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[SPEAKER_00]: Very strong business.

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[SPEAKER_00]: We owned it, so you kind of know about that.

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[SPEAKER_00]: You have a return equity at, let's see what it's at.

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[SPEAKER_00]: To dev and look at this since we hold sold.

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[SPEAKER_00]: They have 34% return equity.

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[SPEAKER_00]: So very high there.

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[SPEAKER_00]: Free cash flow at about 400 million.

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[SPEAKER_00]: Let me look at this pullback.

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[SPEAKER_00]: I haven't looked at the chart.

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[SPEAKER_00]: I think we sold it a well over a year ago.

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[SPEAKER_00]: Okay, so this had a big reversal back on February 11.

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[SPEAKER_00]: And it is at support now, give it that.

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[SPEAKER_00]: They don't like that reversal candle.

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[SPEAKER_00]: I mean, you are kind of catching a fallen knife, at least in the short term because you're getting that strong downtrend, and you have not seen any signs of a real reversal.

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[SPEAKER_00]: Either a capitulation, meaning a spike in volume, that usually will tell you, okay, the selling period has reached a crescendo and has a good chance of reversing.

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[SPEAKER_00]: So I'd be waiting on that.

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[SPEAKER_00]: I like what you're looking at.

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[SPEAKER_00]: We obviously like the company, good profitability,

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[SPEAKER_00]: returning to growth and like that.

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[SPEAKER_00]: Good balance sheet.

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[SPEAKER_00]: It's taking that cashflow, right, buying back shares, we like that.

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[SPEAKER_00]: But I think this is probably headed in the high 20s from 35 now.

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[SPEAKER_00]: So I would be very patient on it.

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[SPEAKER_00]: I'd be waiting for some compared to the Tory volume for the rehearsal.

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[SPEAKER_00]: Now let's invest stock and I work to use after this break, so if you have any questions, don't hesitate to give us a call now or any time, 24, 7, 8, 8, 8, 9, 9 chart.

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[SPEAKER_04]: Millions of downloads have proved there's value in every invest talk podcast.

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[SPEAKER_04]: Call any time 24-7, invest talk 888-99 chart.

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[SPEAKER_06]: Hi, good day, Justin and Luke.

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[SPEAKER_06]: Long time listener here from the Midwest.

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[SPEAKER_06]: I have a question for you.

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[SPEAKER_06]: own MU had a good run on it and now I've had a fall on it, you could say.

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[SPEAKER_06]: I heard, I believe it was just in last week, I mentioned that it might be a good time to pull out of MU because it's run might be over.

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[SPEAKER_06]: I was wondering if I should pull out completely or what on that matter.

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[SPEAKER_06]: Take my profits that I have remaining.

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[SPEAKER_06]: and put them into AMAT.

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[SPEAKER_06]: AMAT, which I heard you gentlemen say the other day was a good stock that you guys own and a fund.

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[SPEAKER_06]: Do you feel in the future AMAT might be going up as MU is going down?

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[SPEAKER_06]: Thank you.

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[SPEAKER_06]: Look forward to hearing your answers on the show.

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[SPEAKER_06]: Have a great day.

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[SPEAKER_00]: Alright, thanks for the call and your correct.

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[SPEAKER_00]: I did call it top and M at U and today it was down 10%, 9.88%.

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[SPEAKER_00]: 10% on the day.

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[SPEAKER_00]: It was a very obvious topping pattern, and then you layer on top of it the simple understanding that the memory business is extremely cyclical, and these profit margins are not going to last.

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[SPEAKER_00]: So if you look at it based on current earnings, it's gonna look really cheap, but those are not gonna stay there.

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[SPEAKER_00]: That's just,

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[SPEAKER_00]: That's me having 25 years plus of experience, and that's why it has reversed.

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[SPEAKER_00]: So yes, and I think it's going to drop much, much more.

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[SPEAKER_00]: Now, should you roll it into A-MAT?

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[SPEAKER_00]: Well, if you're saying, should I own micron or A-MAT, I'm absolutely 100% could say A-MAT, but A-MAT was also down 4% on the day.

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[SPEAKER_00]: We do on it for clients.

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[SPEAKER_00]: We're going to for a while.

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[SPEAKER_00]: We bought it back in the low 100s and now

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[SPEAKER_00]: It probably needs a pullback, like the whole chip industry, and remember micron and aim at their in the chip industry.

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[SPEAKER_00]: Micron pie is a lot of equipment from applied materials.

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[SPEAKER_00]: It's aim at.

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[SPEAKER_00]: So there's gonna be some correlation there.

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[SPEAKER_00]: So micron stopped, well, aim at's gonna have a pullback as well.

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[SPEAKER_00]: So from a timing perspective, no, it's not a good time to own either of them.

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[SPEAKER_00]: So I wouldn't just go and throw it in aim at.

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[SPEAKER_00]: I would probably be allocating it somewhere else for the time being.

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[SPEAKER_00]: until the follow-through correction in semiconductor stocks in general comes to a comes to a head right now you're not seeing it media the time to buy my uh... the semiconductor stocks or related companies like materials aim at will be when you see the media i'd not seen it yet a lot of these names are going to drop thirty forty sixty

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[SPEAKER_00]: Maybe 70% putting out speculative there.

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[SPEAKER_00]: And then you'll see it on CNBC, and you're going to see it articles about it written on Wall Street Journal, and that's the time they pick up these names.

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[SPEAKER_00]: So it's sell micron, I'd put in cash for now, and it'd be patient and wait for the proper buying opportunity, for applied materials.

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[SPEAKER_00]: Here's the question that came in from our website.

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[SPEAKER_00]: Says, Gen Digital, GEN has some of the most recognizable, consumer-focused, security-identified production products, is it a good investment at today's levels?

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[SPEAKER_00]: Well, this is dropped, this, oh, yeah.

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[SPEAKER_00]: So this is Norton, Lifeloc,

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[SPEAKER_00]: all of these services.

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[SPEAKER_00]: Here's the issue with a lot of these services that I think they are getting disrupted by or going to get disrupted by AI.

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[SPEAKER_00]: And Jen Digital has a lot of debt.

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[SPEAKER_00]: This is going to be an issue for a lot of these companies.

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[SPEAKER_00]: in the software space, the subscription software space, especially if you go into a session that's triggered by $150 oil, you're going to cancel their subscriptions, and that's an interest you're going to go up, and that makes the debt service go up.

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[SPEAKER_00]: That service costs go up.

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[SPEAKER_00]: That eats into profit margins.

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[SPEAKER_00]: That's why this is down so considerably.

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[SPEAKER_00]: I think I'll look here.

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[SPEAKER_00]: They're buying back shares, but not in a dramatic way.

19:41.604 --> 19:43.466
[SPEAKER_00]: Dividends okay.

19:43.687 --> 19:45.949
[SPEAKER_00]: Let me give you a support level at least.

19:47.632 --> 19:55.101
[SPEAKER_00]: I just don't, I just think that these type of services are going to be easily replicated by AI.

19:55.121 --> 19:58.966
[SPEAKER_00]: I mean, it is at support.

19:59.847 --> 20:00.628
[SPEAKER_00]: I'll give you that.

20:02.170 --> 20:06.495
[SPEAKER_00]: I just, it's so weak though.

20:07.876 --> 20:08.898
[SPEAKER_00]: are pretty atrocious.

20:10.019 --> 20:15.228
[SPEAKER_00]: And I'm not seeing that spike in volume that's getting me excited about it yet.

20:17.151 --> 20:24.904
[SPEAKER_00]: So yes, the names are recognizable, but are they services that are sorely needed in the marketplace?

20:25.785 --> 20:27.388
[SPEAKER_00]: I think for most people, not really.

20:27.408 --> 20:34.980
[SPEAKER_00]: And there's gonna be a flood of them because it's gonna be easy to use AI to develop these type of softwares

20:35.382 --> 20:35.903
[SPEAKER_00]: do what they do.

20:36.725 --> 20:50.353
[SPEAKER_00]: So I, I just don't, I don't know the technicals, I don't like the debt, and I don't like this area, software, I think they're, they're going to have difficulty defending their, these businesses from AI.

20:51.700 --> 20:53.602
[SPEAKER_00]: The next investor talk will look into this question.

20:54.043 --> 20:57.106
[SPEAKER_00]: Are growth in value stocks ready for a major reversal?

20:57.847 --> 21:08.838
[SPEAKER_00]: Technology stocks are suffering their worst week in nearly a year, as investors realize that even the most innovative companies can escape the gravitational pull of rising interest rates and economic uncertainty.

21:09.339 --> 21:15.586
[SPEAKER_00]: The cellophys forcing a reassessment of sky high valuations and growth assumptions that dominated markets for years.

21:16.246 --> 21:19.750
[SPEAKER_00]: That story is tomorrow, but for now I'm Justin Colline and ready to take your calls

21:19.730 --> 21:22.213
[SPEAKER_00]: Any time on 8-8-99-Shirt.

21:27.762 --> 21:31.328
[SPEAKER_04]: There are a few things that make KPP financial special.

21:31.888 --> 21:34.172
[SPEAKER_04]: One of them is parallel investing.

21:34.212 --> 21:37.898
[SPEAKER_04]: This means they invest right alongside their clients.

21:38.358 --> 21:39.340
[SPEAKER_04]: Here's how it works.

21:39.861 --> 21:47.933
[SPEAKER_04]: When KPP financial makes a trade for their clients, just in client makes the same trade for himself and KPP.

21:48.454 --> 21:53.061
[SPEAKER_04]: On the same day, at the same price, and same percentage.

21:53.041 --> 21:55.725
[SPEAKER_04]: No front running, no special treatment.

21:56.286 --> 22:01.013
[SPEAKER_04]: Learn more about parallel investing at investtalk.com.

22:07.061 --> 22:09.825
[SPEAKER_00]: Our main focus point today concerns this question.

22:09.846 --> 22:15.193
[SPEAKER_00]: Is the Fed rate cuts still coming despite geopolitical inflation?

22:16.215 --> 22:19.099
[SPEAKER_00]: That's what the market is kind of grasping with right now.

22:20.547 --> 22:23.351
[SPEAKER_00]: as well as the Fed itself, they're conflicted.

22:24.553 --> 22:37.412
[SPEAKER_00]: They're trying to create a delicate balance or navigate a delicate balancing act between economic growth and now price stability that has its biggest test since 2021.

22:38.774 --> 22:43.922
[SPEAKER_00]: And going into the weekend, the odds of a rate hike by year end.

22:44.054 --> 22:49.399
[SPEAKER_00]: was at 22%, and no cut at all, or no move at all was at 72%.

22:49.419 --> 22:53.403
[SPEAKER_00]: So those are the overwhelming odds.

22:53.623 --> 22:55.464
[SPEAKER_00]: Now today, that's moved a little bit.

22:56.185 --> 23:06.074
[SPEAKER_00]: It's now an 80% chance of no move, and a 13% chance of a rate cut one rate, cut only a 4% chance of one rate increase.

23:06.915 --> 23:13.521
[SPEAKER_00]: So you can see, day to day, just depending on the news,

23:15.222 --> 23:21.773
[SPEAKER_00]: how supply chains are evolving, the market is trying to figure this out in the Fed as well, like I said.

23:24.238 --> 23:35.357
[SPEAKER_00]: Fed governor Waller said just a couple weeks ago that he was looking to vote for a rate cut, but instead opted for pause at the meeting.

23:36.502 --> 23:39.686
[SPEAKER_00]: He said, quote, this inflation problem may be worse than I think it is.

23:40.267 --> 23:41.048
[SPEAKER_00]: We'll wait and see.

23:41.569 --> 23:49.179
[SPEAKER_00]: We have to sort of think, mate, we have to sort of think maybe caution is warranted and quote.

23:49.199 --> 23:53.906
[SPEAKER_00]: So this is something that all of them are grappling with.

23:54.687 --> 24:03.859
[SPEAKER_00]: And the simple answer here is probably they do nothing for a number of meetings.

24:05.324 --> 24:06.586
[SPEAKER_00]: really resolved in some way.

24:06.606 --> 24:10.311
[SPEAKER_00]: We're now less than a month between before the April, meeting April 29th.

24:10.331 --> 24:17.781
[SPEAKER_00]: The odds there are 97% chance of no cut and there's actually a 2.6% chance of a rate hike.

24:20.024 --> 24:24.430
[SPEAKER_00]: I'm guessing that's if a inflation data comes in, even hotter than it already has.

24:26.833 --> 24:32.040
[SPEAKER_00]: So I think the simple answer to this is, depends how this all goes.

24:33.657 --> 25:02.061
[SPEAKER_00]: all major central banks are now in a cost of stance, so this isn't just a fed thing and your own pal said, said, said as much, you said whether this is a problem or not is how high and how long prices are elevated, a one month spike in oil prices and supply chains getting clogged up, not that big of an issue, but you saw during COVID, if that drags out

25:02.767 --> 25:15.520
[SPEAKER_00]: And then you throw stimulus and spending on top on the fire, which we're obviously doing with the war, spending billions and billions of dollars a day, that pushes prices across the board up.

25:17.623 --> 25:27.373
[SPEAKER_00]: You're already seeing him trucking industry, decil up over six dollars a gallon, airlines are raising prices because of jet fuel, all that.

25:29.345 --> 25:35.391
[SPEAKER_00]: So as a rate cut still coming, I'm gonna say, no, I don't see a rate cut coming at all.

25:35.411 --> 25:38.454
[SPEAKER_00]: And this is what is driving the market down.

25:39.655 --> 25:41.317
[SPEAKER_00]: It's a more hawkish fed.

25:41.437 --> 25:45.040
[SPEAKER_00]: And frankly, hawkish to me is just, they're gonna be handcuffed.

25:45.060 --> 25:47.763
[SPEAKER_00]: They're going to sit here for, I think, a long while.

25:49.645 --> 25:51.987
[SPEAKER_00]: So that's kind of the true answer to this question.

25:53.509 --> 25:59.014
[SPEAKER_00]: Let's go take a live call, James from New York, looking at PayPal.

25:59.230 --> 26:10.849
[SPEAKER_03]: I know like hurting her a little bit off and the growth is flowing, but do you think this ever becomes cheap enough to be interesting again and that's fallen?

26:11.189 --> 26:13.393
[SPEAKER_00]: What do you mean, is it does it come cheap enough?

26:13.593 --> 26:15.516
[SPEAKER_00]: It is cheap enough to be going to be interesting.

26:15.536 --> 26:16.638
[SPEAKER_00]: It's that's already there.

26:17.279 --> 26:17.960
[SPEAKER_03]: I thought it was.

26:18.221 --> 26:19.042
[SPEAKER_03]: I thought so.

26:19.162 --> 26:19.703
[SPEAKER_03]: I thought it was.

26:20.384 --> 26:22.047
[SPEAKER_00]: Yeah, yeah, it's absolutely there.

26:22.087 --> 26:25.272
[SPEAKER_00]: Now to be frank, it's really there for a little while.

26:25.825 --> 26:33.775
[SPEAKER_00]: But trading at high single digit multiple is with no debt and the business that is still growing.

26:34.356 --> 26:37.520
[SPEAKER_00]: Running is supposed to be up 9% next year.

26:38.481 --> 26:39.402
[SPEAKER_00]: Now, flat this year.

26:40.484 --> 26:46.932
[SPEAKER_00]: But still, they're taking this cash flow and they're plowing it back into Jeremiah Bax.

26:47.973 --> 26:48.714
[SPEAKER_00]: They're accelerating.

26:49.355 --> 26:53.520
[SPEAKER_00]: Free cash flow at $5.5 billion that has come down.

26:53.973 --> 27:04.140
[SPEAKER_00]: So that's a bit of a worry, but the profitability is still high, as I said, no debt, and trading it enterprise value to even a writer on six, that's cheap.

27:05.283 --> 27:09.855
[SPEAKER_00]: It is very cheap, so I think this is

27:11.337 --> 27:31.708
[SPEAKER_00]: cheap already and if you look at the chart you have that spike down on high volume after the latest earnings announcement it's held it had a recent spike on rumors that there's going to be some sort of a acquisition a buyout we haven't heard much since then but it's just been consolidating right around this forty five dollars a level for the last call it month

27:32.279 --> 27:33.060
[SPEAKER_00]: And that's bullish.

27:33.781 --> 27:35.903
[SPEAKER_00]: So it has a bullish flag pattern.

27:36.003 --> 27:36.604
[SPEAKER_00]: It's cheap.

27:36.804 --> 27:39.787
[SPEAKER_00]: I think this is could be ready to go in the next month or two.

27:39.888 --> 27:42.090
[SPEAKER_00]: So I think it's absolutely attractive right now.

27:43.231 --> 27:44.653
[SPEAKER_03]: All right, that's good, thank you.

27:44.673 --> 27:45.474
[SPEAKER_00]: Thanks for the call.

27:47.977 --> 27:58.168
[SPEAKER_00]: Let's go answer another YouTube question, SSJBoller says, I wanted to use this catalyst consolidate my oil and gas between X on and Chevron.

28:00.292 --> 28:07.461
[SPEAKER_00]: Canadian natural resources in Devon, and National, and thing, U.S. Driller, which would you say will do the best long term?

28:07.561 --> 28:11.025
[SPEAKER_00]: I would like to set trailing stops for the others.

28:11.085 --> 28:12.687
[SPEAKER_00]: Can you further break down the differences?

28:12.827 --> 28:16.372
[SPEAKER_00]: Love this pod segment, very informative.

28:16.552 --> 28:17.453
[SPEAKER_00]: Okay, appreciate that.

28:17.873 --> 28:22.099
[SPEAKER_00]: I believe that was a comment on my weekend update.

28:23.460 --> 28:24.181
[SPEAKER_00]: Let's take a look here.

28:25.723 --> 28:29.067
[SPEAKER_00]: Exxon in Chevron, which one's versus international names?

28:29.975 --> 28:32.058
[SPEAKER_00]: Huh, this one's tough, this one's tough.

28:32.078 --> 28:49.519
[SPEAKER_00]: So what I would say is I'm gonna put one near the bottom of the list, it probably would be, probably would be fame because it's a shale producer historically has been one of the best growers.

28:50.160 --> 28:52.924
[SPEAKER_00]: And I'm not saying any of these are bad.

28:52.964 --> 28:58.851
[SPEAKER_00]: What he's trying to say is which ones should maybe a prefer over another.

28:59.658 --> 29:11.155
[SPEAKER_00]: OK, so I'm going to go from, I guess, worse, or at least attractive to the most, OK?

29:11.175 --> 29:13.759
[SPEAKER_00]: So a thing to be number one, because it's just an MP company.

29:15.021 --> 29:16.083
[SPEAKER_00]: It's a good company.

29:16.964 --> 29:25.497
[SPEAKER_00]: But I rather have more international exposure, especially maybe Brent exposure.

29:25.882 --> 29:29.507
[SPEAKER_00]: Now I wouldn't want a lot of assets in the Middle East, let's say that.

29:30.969 --> 29:45.810
[SPEAKER_00]: And so that's why I would actually in the middle of the pack here, I would put Chevron and Exxon because they do have a lot of resources, a lot of projects in the Middle East that are being damaged right now.

29:45.830 --> 29:54.623
[SPEAKER_00]: And yes, they have some exposure and some brand exposure, but I don't want these assets in the Middle East that I'm dependent on.

29:55.514 --> 30:02.022
[SPEAKER_00]: Now, Devon, I'm not sure, do you're looking at Devon and convenient after resources?

30:02.563 --> 30:08.671
[SPEAKER_00]: Now, these are a bit different, because Devon is based in Oklahoma, let's say, developed, yes, see, this is a shale name.

30:08.791 --> 30:12.096
[SPEAKER_00]: So, I don't know why you lump this in with the international names.

30:12.476 --> 30:15.480
[SPEAKER_00]: So, it would be lumped in more with thing.

30:15.730 --> 30:25.062
[SPEAKER_00]: So I'm going to pick out of these five names from X on Chevron, Canadian natural resources, Devon and Fang.

30:25.122 --> 30:29.287
[SPEAKER_00]: I'm going to rank it as Canadian natural resources number one.

30:29.788 --> 30:30.128
[SPEAKER_00]: Why?

30:30.168 --> 30:37.317
[SPEAKER_00]: Because there's a new pipeline that's going to the west coast that they're going to be able to export oil.

30:40.098 --> 30:50.932
[SPEAKER_00]: out of and get more money for their oil out of Canada, I like that, I like that long term expansion of margins, so we say.

30:51.312 --> 31:09.295
[SPEAKER_00]: So that would number one, then I would put x on and Chevron probably x on to Chevron 3 and then I put

31:10.321 --> 31:12.064
[SPEAKER_00]: I might as you gotta talk those things out.

31:12.925 --> 31:18.554
[SPEAKER_00]: I hadn't seen that question to really look at the numbers, understand what their exposures are.

31:18.574 --> 31:24.864
[SPEAKER_00]: Unfortunately, I don't have to stop my head, but I do understand and come to the end of these industries.

31:26.347 --> 31:30.533
[SPEAKER_00]: So let's pivot over and discuss consumer staple stocks.

31:32.156 --> 31:33.879
[SPEAKER_00]: Consumer staple stocks.

31:35.201 --> 31:36.463
[SPEAKER_00]: As I said at the top of the show,

31:39.160 --> 31:39.921
[SPEAKER_00]: They're not doing very well.

31:40.202 --> 31:45.693
[SPEAKER_00]: They're not doing, they're actually underperforming the S&P since the market or since the start of the war.

31:46.975 --> 31:47.236
[SPEAKER_00]: Why?

31:47.316 --> 31:49.861
[SPEAKER_00]: Because they are now raising prices.

31:52.125 --> 31:57.416
[SPEAKER_00]: They're bracing themselves for the second inflationary surge in less than five years.

31:59.079 --> 32:01.624
[SPEAKER_00]: And when I talk to clients, I do these portfolio reviews.

32:01.672 --> 32:03.996
[SPEAKER_00]: I've been saying this for really since the start of COVID.

32:04.657 --> 32:07.783
[SPEAKER_00]: Did you have to prepare your portfolio for an inflationary environment?

32:08.224 --> 32:12.512
[SPEAKER_00]: What type of companies do well in an inflationary environment, which ones do not?

32:15.317 --> 32:16.058
[SPEAKER_00]: What tends to do well?

32:17.661 --> 32:24.253
[SPEAKER_00]: Materials, energy, industrials, financials, those tend to do well.

32:27.490 --> 32:32.799
[SPEAKER_00]: Stables tend to not do very well, and this is the perfect example of why.

32:32.819 --> 32:36.926
[SPEAKER_00]: Tech also, and as we grow for your names, why growth?

32:37.327 --> 32:38.509
[SPEAKER_00]: Those tend to not do so well.

32:39.130 --> 32:40.652
[SPEAKER_00]: Utilities tend to not do as well.

32:42.275 --> 32:47.244
[SPEAKER_00]: But stables are the ones that most of you don't understand why, it's because the input costs.

32:47.264 --> 32:49.768
[SPEAKER_00]: They feel it more than most industries.

32:52.364 --> 32:54.546
[SPEAKER_00]: It's like about fertilizer prices going into package food.

32:54.566 --> 32:56.528
[SPEAKER_00]: You have to stuff to grow the underlying food.

32:57.229 --> 32:59.831
[SPEAKER_00]: And then, the cost of plastics, that's going up.

33:00.111 --> 33:03.495
[SPEAKER_00]: There's a lot of packaging that goes into these products.

33:04.856 --> 33:06.838
[SPEAKER_00]: And then shipping, a lot of them are very heavy.

33:09.941 --> 33:15.947
[SPEAKER_00]: They give hooking Pepsi, shipping bottles of product all around the country.

33:17.348 --> 33:21.392
[SPEAKER_00]: It's mostly water, very heavy.

33:21.777 --> 33:27.702
[SPEAKER_00]: Before this whole war, Pepsi and Kraft were about to cut their prices.

33:28.343 --> 33:37.250
[SPEAKER_00]: Pepsi said they would reduce price about to 15% on certain snacks, citing stretch budgets for low and middle consumers, but only consumers.

33:37.270 --> 33:44.176
[SPEAKER_00]: And Kraft had volumes declined for five consecutive years, and they realized they needed to cut prices.

33:45.557 --> 33:51.362
[SPEAKER_00]: So, so, analysts have been downgrading earnings forecast for a range

33:51.663 --> 33:54.569
[SPEAKER_00]: over the last couple of weeks due to these higher input costs.

33:56.213 --> 33:58.457
[SPEAKER_00]: And some of them could even see a cut to their dividend.

34:02.466 --> 34:07.917
[SPEAKER_00]: Talking about higher transport costs, higher production costs, higher packaging costs.

34:11.018 --> 34:16.264
[SPEAKER_00]: Freight itself typically makes up seven to eight percent of food companies in put costs.

34:16.284 --> 34:25.774
[SPEAKER_00]: So when diesel is above five and some places above six dollars a gallon up one to 40 fifty percent over the last month, that increases their prices.

34:27.996 --> 34:39.709
[SPEAKER_00]: And then the spot price for a polypropylene, sorry, polyethylene, that's the plastic

34:41.579 --> 34:46.985
[SPEAKER_00]: Colgate palm olive, they're raising prices for toothpaste and shampoo.

34:48.247 --> 34:50.269
[SPEAKER_00]: Claw ox is going to raise their prices over time.

34:52.171 --> 34:54.314
[SPEAKER_00]: And adjust their packaging sizes they said.

34:57.217 --> 34:59.339
[SPEAKER_00]: And volumes are declining already.

35:00.761 --> 35:05.106
[SPEAKER_00]: In groceries or in supermarkets, general merchandise is down 4%.

35:06.520 --> 35:07.782
[SPEAKER_00]: volume year over year.

35:08.243 --> 35:19.739
[SPEAKER_00]: Me down about 2.5% household consumer products down about 2% baby care down about 1.5% health and beauty down about 1%.

35:21.402 --> 35:21.983
[SPEAKER_00]: What's up?

35:22.003 --> 35:24.506
[SPEAKER_00]: Only produce, deli, and dairy, and bakery.

35:24.546 --> 35:25.928
[SPEAKER_00]: Those are the only four that are up.

35:26.008 --> 35:27.551
[SPEAKER_00]: Those are obviously needed.

35:27.811 --> 35:28.512
[SPEAKER_00]: You need food.

35:29.875 --> 35:43.660
[SPEAKER_00]: And this a lot of these package food companies are heavily indebted as well to hire interest rates cause problems for their businesses and a lot of them they dividends and people buy them for dividends which makes them bond proxies in many ways.

35:44.101 --> 35:50.753
[SPEAKER_00]: There's a lot of factors here weighing on consumer staples stocks and that's why they continue to struggle.

35:52.167 --> 35:53.251
[SPEAKER_00]: No, that's some best talk.

35:53.271 --> 35:56.082
[SPEAKER_00]: I'm Justin Klein with one goal here each every week.

35:56.102 --> 36:02.768
[SPEAKER_00]: They help you achieve your own version of French for freedom, and I'll work continues after this final break to get your questions in right now at 8 a.m., 9 a.m., short.

36:21.142 --> 36:31.136
[SPEAKER_04]: The Vestock phone lines never closed, and now, Justin Klein is here, call in Vestock 888-99 chart.

36:32.077 --> 36:33.399
[SPEAKER_02]: Hi, Joseph and I'm Luke.

36:33.419 --> 36:39.968
[SPEAKER_02]: I've got a question about Escaloria, LeXatica, E.L.P.A.

36:40.809 --> 36:41.690
[SPEAKER_02]: is the symbol.

36:41.910 --> 36:44.154
[SPEAKER_02]: Just want to know what you think about this company.

36:44.554 --> 36:50.322
[SPEAKER_02]: Their stock is decreased from about $300 a share.

36:50.707 --> 36:57.877
[SPEAKER_02]: or Euro, I guess that is just one or much to think about this giant and the optical space.

36:58.138 --> 36:58.598
[SPEAKER_02]: Thank you.

36:59.760 --> 37:03.766
[SPEAKER_00]: Looking at Lug Zodica, I think most people know what they do.

37:03.846 --> 37:15.162
[SPEAKER_00]: This is a French company and they're the biggest within the sunglasses area they own, believe sunglasses,

37:15.665 --> 37:21.874
[SPEAKER_00]: bunch of other brick and mortar, businesses, online e-commerce channels, etc.

37:23.938 --> 37:29.466
[SPEAKER_00]: It historically has been a very, very good business with high profitability.

37:30.407 --> 37:40.643
[SPEAKER_00]: The issue is that it is down considerably for 374 and under 223 just in the past these four months.

37:42.800 --> 37:50.448
[SPEAKER_00]: Clearly, there's an issue with a consumer with the cost of the inputs to these goods.

37:50.468 --> 37:54.813
[SPEAKER_00]: We just talked about the cost of plastics going up considerably.

37:54.873 --> 37:58.738
[SPEAKER_00]: That's certainly going to hurt them and the P.E.

38:00.259 --> 38:00.720
[SPEAKER_00]: is pretty high.

38:01.400 --> 38:02.221
[SPEAKER_00]: It's in the 50s.

38:03.443 --> 38:11.912
[SPEAKER_00]: Yeah, that's the issue here too is growth stocks have turned over in a dramatic way.

38:15.335 --> 38:16.557
[SPEAKER_00]: And so it's just too expensive.

38:19.781 --> 38:20.442
[SPEAKER_00]: Way to expensive.

38:20.462 --> 38:24.968
[SPEAKER_00]: I think there's way more room for this to go down to the pull up the chart here.

38:28.253 --> 38:33.660
[SPEAKER_00]: ESOLF is the symbol for the United States or US markets.

38:35.182 --> 38:39.688
[SPEAKER_00]: So if everyone wants anyone to look up that ADR.

38:39.871 --> 38:42.215
[SPEAKER_00]: You know, I think there's just more downside to go.

38:42.235 --> 38:45.521
[SPEAKER_00]: That's my main issue is this is not cheap enough.

38:45.941 --> 38:52.152
[SPEAKER_00]: Yes, it's down pretty nicely from its high, but not enough.

38:52.913 --> 38:54.756
[SPEAKER_00]: Let me give you a number here.

38:54.776 --> 38:57.621
[SPEAKER_00]: I don't know where this is going to go.

38:57.641 --> 38:59.043
[SPEAKER_00]: I think this is a lot more.

38:59.805 --> 39:03.651
[SPEAKER_00]: Don't say, yeah, 145, 150 in that range.

39:04.323 --> 39:05.504
[SPEAKER_00]: That's where I think about buying it.

39:05.564 --> 39:06.506
[SPEAKER_00]: It's at 223 now.

39:06.586 --> 39:13.494
[SPEAKER_00]: So I'm passing on lexatica, S.A. lower lexatica, out of France.

39:13.514 --> 39:26.789
[SPEAKER_00]: Now lastly let's tackle a question that came out of your YouTube channel, Corey Durbin says, give an disruption to the energy infrastructure and at least, what do you think of domestic LNG exporter, like shinier, shinier, ticker, simmer, LNG.

39:28.552 --> 39:31.495
[SPEAKER_00]: The stock has already run a lot following attacks on

39:32.048 --> 39:40.459
[SPEAKER_00]: Ross LaFan in Qatar, but the company continues to execute well in their brownfields, growth plans, and have 95% of their production backed by long-term contracts.

39:42.561 --> 39:46.666
[SPEAKER_00]: I think if you're going to buy this, this is probably not the time to be buying it.

39:46.686 --> 39:50.972
[SPEAKER_00]: That's how these things usually work.

39:50.992 --> 39:59.102
[SPEAKER_00]: You get a price spike and it lasts until the headlines die out.

39:59.639 --> 40:00.801
[SPEAKER_00]: And then you get a big reversal.

40:01.261 --> 40:05.888
[SPEAKER_00]: Even today with oil prices up, this was down, a little over 1%.

40:06.649 --> 40:11.695
[SPEAKER_00]: Now, looking for a long term, yeah, I think it's probably good long term.

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[SPEAKER_00]: But this is not the time to be buying.

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[SPEAKER_00]: Why would you buy it after the spike?

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[SPEAKER_00]: The name to put in your watch list when the headlines die down, then you could say,

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[SPEAKER_00]: Now might be a time to get in.

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[SPEAKER_00]: We talked about the infrastructure damage within the Middle East.

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[SPEAKER_00]: It's going to require a lot of LNG and natural gas throughout the world, and new supply and a lot of is going to come from here in North America.

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[SPEAKER_00]: So I like what you're thinking just wait until this reverses on major headlines.

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[SPEAKER_00]: And that's when you'd want to pick up L and G shinier energy.

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[SPEAKER_00]: Now I'm Justin Klein and reminding you about KPP financials parallel investing, when we make a trade for our clients, we make the same trade for itself.

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