[SPEAKER_09]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is invest talk, independent thinking, shared success.

[SPEAKER_09]: Invest talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

[SPEAKER_09]: Here is KPP Financial Chief Executive Officer, Financial Advisor Justin Klein.

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

[SPEAKER_00]: This is our Wednesday, May 6, 2026 edition of Invest Talk,

[SPEAKER_00]: not only to today's show but if you showed up for our best talk well webinar today there are a lot of questions a great Q&A session we will get to let's go we thank you all for showing up we will have the recording posted in the coming days so be in the lookout for that as well but on to this hour and on to your questions and on to the things that I want to talk about.

[SPEAKER_00]: I've topics that will help you become a better investor, more informed investor, and then I will answer your finance and investment questions.

[SPEAKER_00]: So I encourage you to call.

[SPEAKER_00]: Right now, hey, today at 99 chart with whatever is on your mind, money related are webinar today's folks on inflation, the impact on asset markets, sectors, style factors, all of that.

[SPEAKER_00]: Hopefully everyone got a lot out of it and we'll talk about that in much, much more on today's show.

[SPEAKER_07]: Now, in just a bit, we'll talk about today's Mark performance and run down the show topics, but as usual, we'll tackle our first call of question right now.

[SPEAKER_00]: Okay, looking at diamond back energy, F-A-N-G. Well, here's my expectation for oil prices, because that's really what you're looking for.

[SPEAKER_00]: It's what is the entry point here?

[SPEAKER_00]: Now, Fang is a name that we own for clients beyond it for some time, it's a shale producer.

[SPEAKER_00]: One of the better ones focus on the Permian Basin.

[SPEAKER_00]: And it said a good long-term growth earnings in 2020 or $3.00 and $4.00 and last year earnings with $13.03, $7.00, supposed to be $18.00 and $68.00 this year.

[SPEAKER_00]: So, clearly how it all prices is good for them, the stock is rally, wealth is $38.83.

[SPEAKER_00]: It's had a significant since the start of the array in crisis, well, let's just call it from the beginning of the year when, let's see, what it'll close at.

[SPEAKER_00]: Pulled back today, pretty big drop as oil prices pulled back.

[SPEAKER_00]: What I'm expecting, as I was trying to get to, but what I'm expecting in the oil markets is a lot of volatility in the short term, shopping sideways, the longer this gets played out and you have this back and forth and saying we have a deal with it, not having a deal and then there's a ceasefire and there's not a ceasefire, the more you're going to,

[SPEAKER_00]: see these names grind higher in a volatile fashion, right?

[SPEAKER_00]: With drown days like today, then you'll have big rallies, et cetera.

[SPEAKER_00]: Ultimately, I do think there are some sort of resolutions, some sort of sustained ceasefire.

[SPEAKER_00]: And the streets of almost reopen to some degree relative to what we were we had in the past, though that may be months from now or it may be days from now.

[SPEAKER_00]: Obviously, this is a very difficult.

[SPEAKER_00]: administration to read because it's hard to really know what to believe.

[SPEAKER_00]: But when there is that final resolution, oil will drop considerably.

[SPEAKER_00]: Probably back down my guess into the 70s on WTI.

[SPEAKER_00]: But I actually think that will be a bottom for a while.

[SPEAKER_00]: Why?

[SPEAKER_00]: Because there's so much oil infrastructure that has been destroyed in the Middle East.

[SPEAKER_00]: Companies, large shell plays, they're not really expanding production dramatically.

[SPEAKER_00]: So near term, you have to be mildly bearish, because it all depends on your review of the war, medium term, I would be bullish, and the longer term kind of depends on how well, OPEC stays together, will kind of additional growth capacity America has, you know,

[SPEAKER_00]: So, paying I like it as the horse, a horse within the oil and gas patch, but I would be patient on a resolution to buy into this space.

[SPEAKER_00]: Now we have a lot of ground to cover over the next 45 minutes or so.

[SPEAKER_00]: We have a lot of topics on the docket.

[SPEAKER_00]: Our main one is about a recession.

[SPEAKER_00]: Is there a recession coming this year?

[SPEAKER_00]: Our market's sleepwalking into an economic downturn.

[SPEAKER_00]: You'll see this, you'll see these headlines, this is coming from CMBC.

[SPEAKER_00]: And I'm going to unpack it.

[SPEAKER_00]: This is one of the interesting ones that we have this title, but in many ways I disagree with it.

[SPEAKER_00]: But I'll tell you, why and why, overall, I don't think we're using or such in the show.

[SPEAKER_00]: We have other topics.

[SPEAKER_00]: So what the meet industry, the meet industry.

[SPEAKER_00]: Not doing very well.

[SPEAKER_00]: Sorry, not to be in the street.

[SPEAKER_00]: The fake media industry, I think, beyond meat, but a terrible business for a long time, but what is some underlying trends within that space?

[SPEAKER_00]: Also, inflation, we just talked about inflation on our webinar today, we've seen two and a half, three, three, and half of the inflation for a while, but are we headed much, much higher once we get these readings in this one of the reasons why we are seeing

[SPEAKER_00]: the markets, how are it to new highs?

[SPEAKER_00]: We'll dig into that and I'll tell you my kind of sense of how this is all going to play out.

[SPEAKER_00]: And when the ultimate inflection point happens because that is key here.

[SPEAKER_00]: When will the inflection point in markets hit?

[SPEAKER_00]: I'll talk about that a little bit later.

[SPEAKER_00]: Then lastly, if we have time,

[SPEAKER_00]: And it's AI, JetChipD, how does it, how does it done if you, how, how, how, how, ran a study and a lot of it to manage more portfolio, how did it do?

[SPEAKER_00]: Let's talk about that.

[SPEAKER_00]: We also have voice bank calls, one on value stock.

[SPEAKER_00]: The other is on the investsco small cap energy ETF, PSCE, and of course questions that came in via the invests talking YouTube channels.

[SPEAKER_00]: Well,

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

[SPEAKER_00]: At 80, 99 chart, anything, finance or investment related, I encourage you to reach out with whatever is on your mind.

[SPEAKER_00]: We're gonna head to a quick break and please remember you can call any time, like I said, 24 hours a day, seven days a week.

[SPEAKER_00]: If you're listening via the live stream on our website or possibly an aim to 1220 in the day area, you can call right now at 80, 99 chart.

[SPEAKER_00]: Up next, I will comment on today's market activity.

[SPEAKER_05]: 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 Investorkose Justin Klein.

[SPEAKER_05]: Parallel investing means Justin invests right alongside KPP financial clients.

[SPEAKER_05]: He makes the same trade for KPP financial on the same day at the same price and the same percentages as KPP clients.

[SPEAKER_05]: There's no front running and no special treatment.

[SPEAKER_05]: In this way Justin and KPP financial share the same risks and the same potential for success.

[SPEAKER_05]: Parallel Investing aligns the interests of Justin and KPP Financial with those of his clients.

[SPEAKER_05]: Justin, Klein and Luke Guerrero are ready to answer your questions about Parallel Investing.

[SPEAKER_05]: And you can learn more anytime at InvestTalk.com.

[SPEAKER_05]: Justin blindness here and he's ready with answers to your finance and investment questions call in vest talk eight eight eight ninety nine chart eight and ninety nine chart eight nine nine two four two seven eight take a through and ask your question on today's show

[SPEAKER_00]: Another interesting day of markets, markets were in the green mainly on news this morning that President Trump announced through pausing project freedom where he was going to the U.S. military is going to guide ships through the streets for a moose in order to sit down and discuss an agreement with Iran that can be potentially finalized.

[SPEAKER_00]: He said the blockade would still remain in place, but the is a 14 point memorandum understanding that would end the war in established a 30 date, 30 day negotiation period for nuclear talks.

[SPEAKER_00]: That's what's so interesting about this.

[SPEAKER_00]: It's like there's already a tentative ceasefire.

[SPEAKER_00]: This is basically saying we're going to extend the ceasefire so we can talk more for 30 days.

[SPEAKER_00]: once again.

[SPEAKER_00]: It's hard to really know how this plays out.

[SPEAKER_00]: Yeah, I mean, that's what value the market and as they come over 2% SNP up one and a half percent on the day.

[SPEAKER_00]: So very interesting job you had ADP numbers come in as well up 109,000 jobs because that's this was 99,000 jobs.

[SPEAKER_00]: You had a year of year increase for per pay per jobs there's at 4.4% down from 4.5% previous month job changers held city at 6.6% year over year.

[SPEAKER_00]: What sectors gained jobs healthcare education we know healthcare continues to to be strong trade and transportation utilities up 25,000 construction up 10 French services up 9 information

[SPEAKER_00]: Services up for leisure hospitality up for as well.

[SPEAKER_00]: What sectors lost jobs?

[SPEAKER_00]: You had professional business services.

[SPEAKER_00]: Think AI.

[SPEAKER_00]: I think that's clearly clear there.

[SPEAKER_00]: So that's really the weakest part of the labor market continues to kind of hang in there over all job gains were led by small businesses up 65,000 large businesses up 42,000.

[SPEAKER_00]: So pretty interesting job support before we get into the real non-farm payrolls report that comes out on Friday.

[SPEAKER_00]: What else happened?

[SPEAKER_00]: You had treasuries were down.

[SPEAKER_00]: Excuse me, treasury deals were up, treasury deals were up, yields were down, five day basis points, really on the heels of the big news that potentially right lower, oil prices with you into lower inflation, which means less pressure to raise rates, all of that.

[SPEAKER_00]: That's why you saw rates drop.

[SPEAKER_00]: dollar index down point four percent.

[SPEAKER_00]: Yen, strength was a bit of a story.

[SPEAKER_00]: On the latest intervention, we'll see if that gains traction that could precipitate a Yen carry trend-wined, like we saw a couple of years ago, that caused a lot of volatility within markets.

[SPEAKER_00]: We'll see, but that's something to watch.

[SPEAKER_00]: We'll finish up 2.8% silver of 5.1% so you're getting a little bit of a mojo back within the precious metal space that have been going through a consolidation pullback period but looks to be gaining its footing once again.

[SPEAKER_00]: Bitcoin features down 0.2% WTI down 7% but well-off its session low so continued volatility within that space.

[SPEAKER_00]: So that was the market today continuing to make new highs mainly because if you talk about the later, you have negative real yields with inflation and re-excelerating.

[SPEAKER_00]: We'll talk about that later.

[SPEAKER_00]: It's because I got to take a live call a gene from Concord.

[SPEAKER_00]: We'll talk about trading.

[SPEAKER_00]: Hi there.

[SPEAKER_02]: Thanks for taking the call.

[SPEAKER_02]: Of course this may be a

[SPEAKER_02]: But is it possible that, let me explain, I do a lot of day trading, I've done fairly well, but it seems to me this year at least it doesn't at a 15 times, I will buy a stock at a fair price.

[SPEAKER_02]: Only to watch it go down, I get a little nervous on it, it goes up a few dollars or whatever, and I sell it at a loss,

[SPEAKER_02]: And then immediately after I see the stock go up, is it possible that it got my number?

[SPEAKER_02]: That's how crazy it seems like it is at this point.

[SPEAKER_00]: Well, there's definitely market makers that see, are you putting in, like, stops and things like that?

[SPEAKER_02]: Where it triggers that circuit, right?

[SPEAKER_00]: No, I understand that, but are you putting in orders in?

[SPEAKER_02]: Yes, I'll put it in a cell order at eight, you know, a couple of points larger than what I bought it for and it sits there and then it gets taken out right.

[SPEAKER_02]: It sits there, it goes down and then it may come up a bit and I get out and then as soon as I get out, it just goes up and this is happening, it doesn't times in the last month.

[SPEAKER_00]: Well, I mean, generally you're in a market that's advancing, especially since the lows in late March.

[SPEAKER_00]: So yeah, I mean, if you are selling to early, odds are pretty good that you're going to see that name.

[SPEAKER_00]: Continue higher, because most names are continuing higher.

[SPEAKER_00]: Now, I don't know what exactly you're trading, what sectors you're focusing on, et cetera.

[SPEAKER_00]: But yeah, in a bull market, in a market that's now up, what are we high single digits for the year on the S&P?

[SPEAKER_00]: You are going to,

[SPEAKER_00]: If you're selling, you're buying something you're selling it and not holding it, well, you're probably missing out on some upside and that's the nature of day trading within a bull market.

[SPEAKER_00]: That won't always be the case, right?

[SPEAKER_00]: There'll be more choppy or markets, there'll be bear markets, and maybe getting out made sense.

[SPEAKER_00]: But really, it's about sell discipline and having a strategy that works for you.

[SPEAKER_02]: I think you hit the word discipline.

[SPEAKER_02]: I started to take it personal.

[SPEAKER_02]: That was my point here.

[SPEAKER_00]: I thought maybe these guys know the market doesn't care you are.

[SPEAKER_00]: I, everyone wants to think that it's, they're more important than they really are.

[SPEAKER_00]: I guarantee the market does not care who you are.

[SPEAKER_00]: It doesn't care who I am.

[SPEAKER_00]: It doesn't care about my opinion.

[SPEAKER_00]: New European Union.

[SPEAKER_00]: The market's going to trade based on how, you know, flows are being handled.

[SPEAKER_00]: How the economy is evolving earnings.

[SPEAKER_00]: All of that.

[SPEAKER_00]: That's what matters more and more.

[SPEAKER_00]: and guess what you or I, we don't have any say in that.

[SPEAKER_00]: It's our job to call balls and strikes, do the proper analysis, and make good smart risk versus reward decisions, whether you're more of a longer-term holder, an investor like myself or a day trader, either way, does not matter.

[SPEAKER_00]: The market doesn't care about you, me, or any other investor talk listener out there.

[SPEAKER_00]: It will do what it's going to do.

[SPEAKER_00]: It's your job to make the smart decisions.

[SPEAKER_00]: That's where we're here to help you with.

[SPEAKER_00]: So thanks for the call and continue to good luck.

[SPEAKER_00]: We're heading into a break.

[SPEAKER_00]: We thank you for helping us achieve more than 62 million downloads of our history.

[SPEAKER_00]: I encourage you to give us a call right now.

[SPEAKER_00]: I ate it at 99 chart.

[SPEAKER_05]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

[SPEAKER_05]: Now the torch has been passed and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.

[SPEAKER_05]: So when you've got finance and investment questions, don't forget to call in Vestock.

[SPEAKER_00]: We are going to be head down to San Diego and talk to Will looking at Aquilo, OK, L-O, a small modular reactor company.

[SPEAKER_00]: You're underlooking a buy it.

[SPEAKER_03]: I'm looking to buy it.

[SPEAKER_03]: I've been watching it for a while, and but I'm not sure what's a good entry point.

[SPEAKER_00]: Well, here's a question.

[SPEAKER_00]: Are you buying it just for a trade or a long-term home?

[SPEAKER_03]: Long-term hold.

[SPEAKER_00]: Okay, that's where I have an issue with it.

[SPEAKER_00]: I am not a fan of these small modular actor companies because they're just an idea.

[SPEAKER_00]: They haven't passed regulation, they're not really producing, they're not producing any revenue.

[SPEAKER_00]: They're just losing money, it's a story stock.

[SPEAKER_00]: Now, technically it's rallying and I think you press a trade near term, I'm fine with it, because

[SPEAKER_00]: you're, you're getting a risk off environment, a risk on environment, excuse me.

[SPEAKER_00]: And this is kind of going out the risk curve in these type of names tend to do well of the short term.

[SPEAKER_00]: I'm much rather own, and I'm not as saying you've a by the stock as it is pretty expensive right now, but, and I said this on air a few months ago,

[SPEAKER_00]: wish I bought it, you know, hand over fist then, but it was blue energy, right?

[SPEAKER_00]: Similar type of energy demand solution, that's quick and easy, but they're actually producing

[SPEAKER_00]: the end product are ready.

[SPEAKER_00]: All these small ones of their actor companies are, they're not, they're just ideas.

[SPEAKER_00]: That's all they are.

[SPEAKER_00]: And they're, they're, they're, they're your biotech stocks within the, the nuclear world.

[SPEAKER_00]: I met your own, if I'm going to bet on nuclear, bet on companies that may that actually have revenue that actually have profits, that's what you want to invest in.

[SPEAKER_03]: You go, look at, you know, we've a ticker symbol that you

[SPEAKER_00]: Oh, blue energy, but I mean, I'm saying, that's very expensive right now.

[SPEAKER_00]: It's probably a bit overbought, probably wouldn't buy it right here.

[SPEAKER_00]: I'm not saying I don't think that's, you know, but if I'm going to say, would I want to own one or the other over a long time frame, I would my father own a blue energy, even if right now on a trade, a trade short-term off-low.

[SPEAKER_00]: Right?

[SPEAKER_00]: Because Bloom's already made a move.

[SPEAKER_00]: It looks like a little topy.

[SPEAKER_00]: Probably just a consolidate.

[SPEAKER_00]: Probably needs to pull back.

[SPEAKER_00]: It's a bit expensive.

[SPEAKER_00]: All of that.

[SPEAKER_00]: A aqua, it's already pulled back.

[SPEAKER_00]: It's rallying a little bit in the near term.

[SPEAKER_00]: It has some near term upside.

[SPEAKER_00]: But that's that's not what you're talking about.

[SPEAKER_00]: You're talking about a long-term hold.

[SPEAKER_00]: And I'm at your other now.

[SPEAKER_00]: Bloom Energy is supposed to earn $2 this year and $4 next year.

[SPEAKER_00]: Once again, I'm not saying you buy either of these names.

[SPEAKER_00]: But if I'm saying I want a long-term hold, Bloom is clearly a much better business.

[SPEAKER_00]: Actually has the business.

[SPEAKER_00]: In the last quarter, it had revenue of $750 million.

[SPEAKER_00]: Aqualo had zero, zilch, nothing, and the last money that is not a business, that is a story, okay?

[SPEAKER_00]: So if you want to bet a nuclear, bet on a uranium, copy, we've owned.

[SPEAKER_00]: chemical for years and extremely well why because they actually have a business with revenue and profits and cash flow.

[SPEAKER_00]: There are other names within the Uranium space as well that aren't just Uranium management, they have special, they have expertise around nuclear technology all of that.

[SPEAKER_00]: Those are, we've owned some of those names as well.

[SPEAKER_00]: Those are the ways to pay nuclear energy.

[SPEAKER_00]: over the long term, not Aquilo, not SMR, not these story stocks, focus on revenues, focus on profits.

[SPEAKER_00]: Those are the long-term holds.

[SPEAKER_00]: Yes, I got you.

[SPEAKER_00]: Thanks.

[SPEAKER_00]: Thanks.

[SPEAKER_00]: Thanks, Will.

[SPEAKER_00]: Let's go answer a YouTube comment question says great, uh, Estenco says great show guys.

[SPEAKER_00]: Can you give me your analysis on zoom, zm?

[SPEAKER_00]: Can you also touching your thoughts on their investment in and frappic and how that plays into the current and future evaluation?

[SPEAKER_00]: Yeah, we actually own zoom.

[SPEAKER_00]: We've done pretty well with it.

[SPEAKER_00]: It's now at a 52 week high or around a 52 week high, like, high, it was down today, but.

[SPEAKER_00]: Yeah, yeah, but it's at a 105 in change with the two-week high is, well, this is yesterday around 108 in change.

[SPEAKER_00]: Certainly, they do have an investment anthropic, anthropics values been going up.

[SPEAKER_00]: That's part of it, but their business is pretty solid.

[SPEAKER_00]: As well, you had revenues up 4% this year.

[SPEAKER_00]: earnings are supposed to be roughly flat on the year, but they have very, very good cash flow.

[SPEAKER_00]: So, part of it is the investment in anthropic one of the reason

[SPEAKER_00]: I don't think it's the main reason.

[SPEAKER_00]: I think the main reason is they have a good balance sheet, good revenue, good cash flow, and it's great value, very profitable company for an equity around 21%.

[SPEAKER_00]: about six and a half billion dollars in net cash and it's balance sheet enterprise value to even a going forwards only on a leavened.

[SPEAKER_00]: So it's very cheap at these levels, even at these levels.

[SPEAKER_00]: But I still think, it's over bot.

[SPEAKER_00]: I would say in the near term, there's probably a little too much excitement around anthropic.

[SPEAKER_00]: I will say that.

[SPEAKER_00]: But overall, it's a very good business.

[SPEAKER_00]: They're taking that cash flow about nearly $2 billion

[SPEAKER_00]: free cash flow yield up around 8% or 9% that's very good and they don't need to service it so what are they doing they're just buying back shares back in 2024 April of 2024 so you're talking about two years ago they had about three hundred and ten million shares that standing that's done about two hundred and ninety five million shares outstanding consistently buying back shares certainly like that so we like zoom communications even though it's

[SPEAKER_00]: Probably it's a consolidate, but it's a good business, and obviously, having the best amount of profits are in the hopes.

[SPEAKER_00]: Now, the next of the next stock, we'll look into this story.

[SPEAKER_00]: China's Iran oil sanctions and the escalating US China economic Cold War.

[SPEAKER_00]: China invoked its anti-Sinctions law this week to block US blacklisting of oil refineries, marking a significant escalation economic conflict, running parallel to the Middle East.

[SPEAKER_00]: Military one.

[SPEAKER_00]: For global investors, this move signals the U.S. China economic cold war is intensifying in ways that could reshape supply chains, commodities, and emerging market exposure.

[SPEAKER_00]: We'll take you to that story tomorrow, but for now I'm Justin Klein and ready to take your calls.

[SPEAKER_00]: Any time, I'm at 80 to 99 chart.

[SPEAKER_05]: There are a few things that make KPP financial special.

[SPEAKER_05]: One of them is parallel investing.

[SPEAKER_05]: This means they invest right alongside their clients.

[SPEAKER_05]: Here's how it works.

[SPEAKER_05]: When KPP financial makes a trade for their clients, Justin Klein makes the same trade for himself and KPP.

[SPEAKER_05]: On the same day, at the same price, and same percentage.

[SPEAKER_05]: No front running, no special treatment.

[SPEAKER_05]: Learn more about parallel investing at investtalk.com.

[SPEAKER_00]: Let's go to Dr. Sammy from San Francisco, here is Sammy.

[SPEAKER_06]: Hey Justin, thanks for taking my call.

[SPEAKER_06]: I appreciate it.

[SPEAKER_06]: So I have been tracking stock market for the last several weeks, and it looks like it has gone down a few days, but it's been sort of...

[SPEAKER_06]: you know, hitting all time high pretty much every that day and I'm honestly confused why things look so rosy and Wall Street when but when I look like, you know, look at some of the businesses and what's going on with the economy with the higher oil prices and everything else.

[SPEAKER_06]: There seems to be a disconnect.

[SPEAKER_06]: So I'm not sure what I'm missing here because impression numbers,

[SPEAKER_06]: they show pretty modest numbers right and the employment figure looks like there's a looking okay but these layoffs are yes I'm going on left and right every other day so I'm just confused what's going on I mean it feels like stock market is kind of disconnected but I just wanted to validate my view with you because I just want to understand what's

[SPEAKER_00]: Mainly because the spending in this economy isn't coming from the consumer.

[SPEAKER_00]: It's coming from cap-expending.

[SPEAKER_00]: It's coming from businesses.

[SPEAKER_00]: Mainly the hyperscalers that are building out AI infrastructure.

[SPEAKER_00]: Will that be a smart use of their capital?

[SPEAKER_00]: We'll see in time.

[SPEAKER_00]: But either way in the near term, that is creating economic growth.

[SPEAKER_00]: It's creating profits.

[SPEAKER_00]: And it's keeping people employed.

[SPEAKER_00]: to some degree or another certain textures doing better, all of that, that's a huge factor here.

[SPEAKER_00]: And what oil is important, it's less important than it has been pretty much since us beginning to use oil.

[SPEAKER_00]: Why?

[SPEAKER_00]: Because we have a lot of alternative sources of energy like solar and wind, like natural gas that usually powers most power plant these days.

[SPEAKER_00]: And that's domestic, most of the cost of natural gas-estate relatively low.

[SPEAKER_00]: I mean, you have nuclear, right, which continues to be ramped up as wealth.

[SPEAKER_00]: And our cars are more energy efficient.

[SPEAKER_00]: There are oil efficient and gasoline efficient that have been in a long time, either their hybrids or their electric or they're just efficient, you know, four cylinders for the most part.

[SPEAKER_00]: So what it looks bad on the surface and the average consumer, their connection to inflation and the economy is, I'll be driving the gas station and you see the gas prices and nobody likes that.

[SPEAKER_00]: But the reality is, and the key compared to the,

[SPEAKER_00]: Disposable income in the average consumer.

[SPEAKER_00]: It hurts, but it's not the end of the world.

[SPEAKER_00]: Also, a lot of consumers have, they have enough Balance sheet capacity, whether that's by charging their credit cards a little bit more, taking you out of heat lock, because they're equity in their homes, whatever that is They're relatively resilient.

[SPEAKER_00]: And guess what?

[SPEAKER_00]: They still have jobs.

[SPEAKER_00]: Yeah, they're a lay at some large scale layoffs, but those people are finding Work elsewhere for the most part.

[SPEAKER_00]: You'll look at the jobs numbers.

[SPEAKER_00]: And most importantly, most importantly, credit.

[SPEAKER_00]: When credit is being created in the system, when banks are lending, it is very hard for things to go down.

[SPEAKER_00]: This is an inflationary crack-up boom.

[SPEAKER_00]: I've been saying this for a number of years is that generals fight the last war.

[SPEAKER_00]: The last war for most people is the O8 financial crisis.

[SPEAKER_00]: Deflationary bust.

[SPEAKER_00]: What that means is, the odds of the next crisis, the next issue, the next big thing in economies is not going to be that, because everyone has their eye on it.

[SPEAKER_00]: And so it's likely going the other way.

[SPEAKER_00]: That's what's happening right now.

[SPEAKER_00]: You have a what is called a crack up boom, and it's mainly B to B, not B to C. Meaning, business is doing business with each other.

[SPEAKER_00]: And if you're in those that narrow set of businesses that are part of the AI infrastructure build out, you're doing well.

[SPEAKER_00]: Now, the rest of the economy might not be doing well, but guess what the market doesn't care, but take cares about and aggregate what's happening.

[SPEAKER_00]: Now, some of it is a little fake because some of the valuations around a lot of some of the earnings from the Q1 were re- valuations of like zoom.

[SPEAKER_00]: We talked about call, call, uh, about zoom, zoom's up.

[SPEAKER_00]: And if you do we guys, some of that has to do with their ownership in, uh, philanthropic and that valuation is now higher because I think we've got going public.

[SPEAKER_00]: It crazy valuations, same with SpaceX, et cetera.

[SPEAKER_00]: And a lot of these big tech names have exposure there.

[SPEAKER_00]: So a lot of that is some of that is flash in the pan.

[SPEAKER_00]: But if you go look at the Elanifed GDP now, we're running this Q2 at 3.7%.

[SPEAKER_00]: 3.7% for Q2.

[SPEAKER_00]: It's real GDP now.

[SPEAKER_00]: Probably won't come in that strong,

[SPEAKER_00]: Still, it's growing.

[SPEAKER_00]: We aren't in a recession to blows that.

[SPEAKER_00]: It's hard to understand.

[SPEAKER_00]: People don't understand this because their eyes are on the last war, which was a deflationary bust.

[SPEAKER_00]: We have an inflationary spiral that we're heading towards, not just because of geological problems, but also because of the demand for AI data infrastructure.

[SPEAKER_06]: Yeah, so what you're saying is that because we are seeing higher inflation, things will develop continue to kind of, you know, print up.

[SPEAKER_00]: Yeah, but you know, remember, the market is priced nominally.

[SPEAKER_00]: It does not take out inflation.

[SPEAKER_00]: Okay.

[SPEAKER_00]: So if you have, for example, if real GDP is at 3.7%, that's the current, current estimate from

[SPEAKER_00]: And inflation is that three and a half, well that's a six and a half percent nominal GDP increase six and a half percent.

[SPEAKER_00]: And earnings tend to correlate with nominal GDP.

[SPEAKER_00]: Therefore, you have higher prices in the market.

[SPEAKER_00]: You duplicate large drawdowns when you get declines in earnings.

[SPEAKER_00]: You're not kidding that now.

[SPEAKER_00]: We've got it.

[SPEAKER_00]: Okay.

[SPEAKER_06]: That's pretty helpful.

[SPEAKER_06]: Thank you.

[SPEAKER_00]: Here is the biggest issue that most people have is that they think their experience around them is exactly how the rest of the world is.

[SPEAKER_00]: In the reality is we have a diverse country with different states, with different sectors that dominate

[SPEAKER_00]: Some sectors are growing much faster than others, and you may not feel that, especially in this environment where, like I said, most of the business is B to B, not B to C. And I'll think of this a little bit more later, but you know, inflation going up, it feels bad.

[SPEAKER_00]: But when it comes to asset prices, generally, that's a good thing.

[SPEAKER_00]: Until, once again, I'll get that function point, until the Fed starts to react.

[SPEAKER_00]: We'll see when that will be.

[SPEAKER_00]: Let's talk about this.

[SPEAKER_00]: I guess I've just kind of talking about this.

[SPEAKER_00]: It's kind of segway's well into our focus point, which is, are we heading to a recession?

[SPEAKER_00]: There are a lot of analysts, I saw this is coming from CNBC, saying, we're sleepwalking into a big recession.

[SPEAKER_00]: What did I just say?

[SPEAKER_00]: GV now of 3.7% and what are we 2% the first quarter?

[SPEAKER_00]: That is not a recession.

[SPEAKER_00]: So, a lot of you are focusing on the oil prices.

[SPEAKER_00]: And they're saying, this is what is going to cause a recession.

[SPEAKER_00]: No, our economy is not very oil intensive like it used to be.

[SPEAKER_00]: Now, at some point, it creates a problem.

[SPEAKER_00]: Now, you probably need $150 oil price, maybe $200.

[SPEAKER_00]: You know, once you get 150, then I'll talk about it being a real drain on liquidity in the system.

[SPEAKER_00]: But it's a minor blip.

[SPEAKER_00]: And then you got the countered by a major expansion in CapEx spending from the hyper scalars.

[SPEAKER_00]: You look at their Q1 earnings reports and they didn't really pull back.

[SPEAKER_00]: Only open AI is talking about, you know, maybe we shouldn't be spending as much as it's going to be worthwhile, etc.

[SPEAKER_00]: That's the only name that's really pulling back the reins on this cap X-bent.

[SPEAKER_00]: Everyone else is going full bore head and summons doesn't even increase the cap X, spending planes.

[SPEAKER_00]: But the longer this does get drug out, the more impact it will have.

[SPEAKER_00]: talking about on chemical markets and fertiliser markets, et cetera.

[SPEAKER_00]: And at some point, you could get, oh, we're just not just a price thing.

[SPEAKER_00]: We just can't get any of this, for example.

[SPEAKER_00]: That's a lot harder in today's world because you're talking about just Middle East.

[SPEAKER_00]: It's important, but you know, we got a big world with a lot of oil, a lot of chemicals,

[SPEAKER_00]: And the rest of the world tries to spin up new supply and it in summons as it can, summons as they can't, prices go up, attends to solve supply issues typically, higher prices are usually in time a recipe for lower prices because supply increases.

[SPEAKER_00]: So that could happen.

[SPEAKER_00]: But overall, like I said, that day of reckoning is probably a number of weeks, if not months away.

[SPEAKER_00]: So for now, you know, price isn't $90, $100 a barrel, maybe $10, $120.

[SPEAKER_00]: It hurts when you go to the gas station.

[SPEAKER_00]: But compared to, like I said, $20, 30 years ago, you're probably going to the gas station less.

[SPEAKER_00]: I'd be working from home, so they don't have to commute nearly as much.

[SPEAKER_00]: Even if I thought I'm more hybrid, so they may be only going in a couple days a week.

[SPEAKER_00]: And then the base model that they bought as a twin turbo, four cylinders,

[SPEAKER_00]: efficient, or they have an electric car.

[SPEAKER_00]: If you have a big VA, you probably are wealthy, and it doesn't really matter.

[SPEAKER_00]: That you get 14 miles of the gallon, or 12 miles of the gallon.

[SPEAKER_00]: And you have to spend an extra $50 when you fill up the tank tank.

[SPEAKER_00]: It's not impacting you, because you're wealthy.

[SPEAKER_00]: You have plenty of money.

[SPEAKER_00]: So when you see these big talking heads, such as the NCNBC, that's really what this article comes from, and I just, you're just not paying attention.

[SPEAKER_00]: Banks are still lending.

[SPEAKER_00]: Businesses are still investing.

[SPEAKER_00]: And the economy is, because the spending is mainly driven by the wealthy and stocks are at new highs.

[SPEAKER_00]: Equity in their homes are still very healthy.

[SPEAKER_00]: They don't have a really lot of incentives to pull back spending as it is.

[SPEAKER_00]: So now, probably now the recession, at least this year.

[SPEAKER_00]: Next year, eventually.

[SPEAKER_00]: Good luck to James in Rio de Janeiro.

[SPEAKER_00]: Wow, from Brazil looking at BDX.

[SPEAKER_08]: Yeah, I hate you talking how you doing.

[SPEAKER_08]: I like Abbott Labs, I'm like electronic and I saw this and it looks a little bit beat up.

[SPEAKER_08]: Is this an opportunity or is this something to avoid?

[SPEAKER_00]: Well, well, first off, think I think is our first ever call from Brazil.

[SPEAKER_00]: Great, there we go.

[SPEAKER_00]: There we go.

[SPEAKER_00]: Let's see, back in Dickinson, this is a pretty large medical device company.

[SPEAKER_00]: I tend to like medical device companies.

[SPEAKER_00]: If I remember correctly, they make implants, right?

[SPEAKER_00]: You're talking hip, correct.

[SPEAKER_00]: Yep, hip and knee and all of those type of devices.

[SPEAKER_00]: And 41 billion dollar mark gap earnings this year, $11.

[SPEAKER_00]: And there are 12 dollars and 49 cents out from 11.32 last year, up 10% and then up another 8% next year to 13.45.

[SPEAKER_00]: A little Oscar space has been hit.

[SPEAKER_00]: I actually like this.

[SPEAKER_00]: I like the valuation 13 times earnings, like for looking earnings closer to 11 times.

[SPEAKER_00]: I really like that.

[SPEAKER_00]: If you go look at their balance sheet, I know 18 billion dollars in debt.

[SPEAKER_00]: So I would like that to be a little bit lower, but consistent cash flows, 2.6 billion dollars in free cash flow, trailing 12 months on a market cap of 41 billion.

[SPEAKER_00]: So you're talking about a 6% percent free cash flow yield.

[SPEAKER_00]: Solid dividend, I think I'll look at the chart of my seeing any divergences here.

[SPEAKER_00]: Yeah, that's that's the big worries.

[SPEAKER_00]: Okay, health

[SPEAKER_00]: Is this a it could just go down more I think it could maybe deck down into one 30ish level.

[SPEAKER_00]: That's where major support would be So I would worry about that.

[SPEAKER_00]: This would be kind of name.

[SPEAKER_00]: I'd probably sell like puts down at that level.

[SPEAKER_00]: That would be nice.

[SPEAKER_00]: But starting to edge in here at these levels.

[SPEAKER_00]: I kind of like that idea.

[SPEAKER_00]: I think there's good valuation.

[SPEAKER_00]: Good good opportunity over the long term.

[SPEAKER_00]: Even though in the medium term, there I guess short term.

[SPEAKER_00]: there is potentially more downside.

[SPEAKER_00]: So I like back in, back in, back in, there you go, back in, Dickinson.

[SPEAKER_00]: Please say it, right?

[SPEAKER_08]: Great.

[SPEAKER_00]: Yep.

[SPEAKER_00]: Thank you.

[SPEAKER_00]: Thanks for the call.

[SPEAKER_00]: Let's go tackle one caller question.

[SPEAKER_01]: Hi guys, love to show.

[SPEAKER_01]: I was just calling up about Union Pacific Corps, UNP, trying to find out if it's worth buying

[SPEAKER_00]: All right, looking at you and the Union Pacific, this is been a nice little uptrend recently after breaking a downtrend that really ended the end of last year is now been in an uptrend since near 52 week high consolidating earnings supposed to be up apes of this year 9% next year.

[SPEAKER_00]: mainly on the Western part of the United States, the tend to benefit from invoiting from China, because that's where most of the products are coming from, being shipped via train into the inner parts of the United States.

[SPEAKER_00]: Historically, it's been a very, very good company.

[SPEAKER_00]: Very good business.

[SPEAKER_00]: Returned actually 41% good balance sheet.

[SPEAKER_00]: Now it's in an uptrend.

[SPEAKER_00]: I'm gonna give you a specific a thumbs up, that's you.

[SPEAKER_00]: They're heading to a break, our final break for the hours.

[SPEAKER_00]: So if you have any questions, don't hesitate to reach out right now.

[SPEAKER_00]: I'd love to hear from you.

[SPEAKER_00]: And I work continues after, like I said, this final break.

[SPEAKER_00]: It's questions in now at eight and eight.

[SPEAKER_00]: 99 chart.

[SPEAKER_05]: For investors, the goal of achieving financial freedom requires unbiased information, strategic planning, and determination.

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[SPEAKER_00]: Answer YouTube Comic Questions.

[SPEAKER_00]: SSJ Baller says, what are your thoughts on Valera?

[SPEAKER_00]: Looks like there's expected growth is going to last.

[SPEAKER_00]: Well, Valera is a refiner here in the United States.

[SPEAKER_00]: One of the largest.

[SPEAKER_00]: refining mainly fuels and petrochemicals and you have a lot of capacity offline because of the war in the Middle East that's helped them considerably earnings are up to 645% this year to the 26 dollars per share, which we second highest levels in except for 2022.

[SPEAKER_00]: if that's the case, but I'm just just a fallback, 27% to make you know, it's for sharing next year.

[SPEAKER_00]: But even at $2.39 to $36 for sharing now, that's still relatively cheap.

[SPEAKER_00]: Overall, this is one of those names that I would probably buy once again on a pullback on the resolution of fear on conflict.

[SPEAKER_00]: Because what's again, global capacity for refining of fuels and petrochemicals is as shrunk.

[SPEAKER_00]: And so if you have capacity, means a production, which Florida does, then they're going to be able to increase their profits.

[SPEAKER_00]: So I like the Lera, but I'd wait for a larger pullback.

[SPEAKER_00]: Aside by inflation, the Fed's target of inflation of 2% is kind of a joke now, right?

[SPEAKER_00]: CPI and PC have been above the Fed's target every single month for five years in counting.

[SPEAKER_00]: And that includes core measures as well, stripping out food and energy.

[SPEAKER_00]: So it was two really their target, especially when what did they do last year.

[SPEAKER_00]: They lowered rates, the E's policy a few times, when inflation was above their target.

[SPEAKER_00]: And now, inflation's headed higher, it's already started.

[SPEAKER_00]: Core PC E rose to 3.2%, but that was better than the regular PC, which is at 3.5% in March.

[SPEAKER_00]: The point-seven percent jump from month to month was the biggest in five years from February to March.

[SPEAKER_00]: That's in the core piece.

[SPEAKER_00]: That's the Fed's preferred inflation measure.

[SPEAKER_00]: The Cleveland Flood Fed has an inflation now casting model, they have core PCE currently at 3.7% headline PCE at 5.4% and headline CPI at 6.1%.

[SPEAKER_00]: is likely to reach eight and a half percent by May.

[SPEAKER_00]: So remember that during 2021, we had all that inflation, massive government stimulus that caused huge inflation.

[SPEAKER_00]: Well, we're likely headed back to those type of numbers.

[SPEAKER_00]: And not quite that high, but in that vicinity, if the current trajectory holds.

[SPEAKER_00]: Gasoline prices are 50% jet fuel prices up 90% and fuel oil prices up 70% since the start of the war.

[SPEAKER_00]: And this will ultimately feed into the cost of doing business, already is.

[SPEAKER_00]: Not just getting gas, but every part of the means of production, whether that's a physical product, physical good or a service.

[SPEAKER_00]: Services take energy as well.

[SPEAKER_00]: If you're going to deliver DoorDash, well, that takes, that's a service and that takes what?

[SPEAKER_00]: Then we have a new fed share.

[SPEAKER_00]: He suggested that we use a different measure for fed inflation, or inflation called trimmed mean from the Dallas and Cleveland feds, but still in March, the Cleveland fed was at 3.2, sorry, 2.3, and the Dallas one was at 2.9, still above the fed's target.

[SPEAKER_00]: This month, we're in May.

[SPEAKER_00]: CPI is going to be at 4.3%.

[SPEAKER_00]: Over 2 percentage points, almost 2 percentage points higher than the 2.4 we saw in February before the conflict started.

[SPEAKER_00]: And it will be the one of the largest three-month changes in Henlite CPI in decades.

[SPEAKER_00]: So this is no longer a two-and-a-half to 3% inflationary environment that we've been at for a number of months now.

[SPEAKER_00]: We're going to quickly head to a 4% to 5% inflationary environment as we head into the summer.

[SPEAKER_00]: And this is why the market is going up.

[SPEAKER_00]: It sounds counterintuitive, but when the Fed is not doing anything, they're keeping rates steady.

[SPEAKER_00]: And itchets are going, sorry, inflation's going up.

[SPEAKER_00]: Real reels are going down, which pushes people out the risk curve and people take more risk.

[SPEAKER_00]: That's what's happening right now.

[SPEAKER_00]: So the inflection point is, when the Fed wakes up and they start to tighten policy, with Kevin Worst that may not be any time soon.

[SPEAKER_00]: But that's what you want to watch for, and that's when there will be an inflection in markets.

[SPEAKER_00]: Well, I'm Justin Klein reminding you about KB Financial's parallel investing.

[SPEAKER_00]: When make a trade for clients, make the same trade for ourselves, same day, same price, same percentage, no front running, no special treatments.

[SPEAKER_00]: We invest right alongside our clients and we show the same risk and potential for success and you can learn more by heading over to invest.com.

[SPEAKER_00]: And please tell your friends and family about a free podcast down those week at any time at iTunes, Spotify, or our content over on.

[SPEAKER_00]: YouTube, be sure to rate in review on iTunes as well.

[SPEAKER_00]: And once again, thank you all for joining today's wealth webinar.

[SPEAKER_00]: Independent thinking, sure it's success.

[SPEAKER_00]: It's the best talk.

[SPEAKER_00]: Good night.

[SPEAKER_09]: Invest talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.

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