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[SPEAKER_06]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.

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[SPEAKER_06]: Here's your host, Justin Klein.

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[SPEAKER_02]: Good afternoon, fellow investors and welcome back to invest talk.

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[SPEAKER_02]: This is our Wednesday, May 20th, 2026 edition of Invest Talk.

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[SPEAKER_02]: I'm excited for this hour with you to unpack what's going down in the market.

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[SPEAKER_02]: There's a lot to unpack a lot to discuss.

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[SPEAKER_02]: Our main focus point is very interesting today because the war in Iran and the closure of the

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[SPEAKER_02]: of what's happening and supply chains around the world.

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[SPEAKER_02]: The question is, what's the ultimate impact?

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[SPEAKER_02]: We're starting to reveal that.

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[SPEAKER_02]: or these companies are, and we'll dig into that in much, much more on this hour.

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[SPEAKER_02]: And this hour will be dedicated to that and answering your findings in the best of questions.

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[SPEAKER_02]: So that's what we are here to do.

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[SPEAKER_02]: We're here to give you data and context that you can bring up back to your own personal situation and make better decisions with your money.

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[SPEAKER_02]: That's what this hour is always about.

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[SPEAKER_02]: So when you're ready, don't be afraid to pick up the phone.

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[SPEAKER_02]: Now as you know, we wrapped up our latest and best talk world webinar on May 6th, Topicals Inflation, we think you all are participating and you can check it for free over on the Best Talk YouTube channel right now.

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[SPEAKER_02]: Now just a bit.

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[SPEAKER_02]: We'll talk about today's Mark performance and right now the show topics.

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[SPEAKER_02]: But first, let's tackle this call a question now.

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[SPEAKER_01]: I just did a look.

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[SPEAKER_01]: I'm calling today about to proceed the E code they're mining.

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[SPEAKER_01]: I think there might be a silver rally coming up and I was wondering if you think this is a good position to hold on to.

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[SPEAKER_01]: Appreciate your time.

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[SPEAKER_01]: Thank you.

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[SPEAKER_02]: Looking at CDE code year mining?

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[SPEAKER_02]: We are.

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[SPEAKER_02]: No, I'm just a DMA.

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[SPEAKER_02]: So this is out of the United States set of Illinois.

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[SPEAKER_02]: producing about, let me look at their, yeah, 57% is here in, you know, it states, 43% of the revenue comes from Mexico.

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[SPEAKER_02]: So North American producer, some silver, some gold.

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[SPEAKER_02]: So you're getting a little bit, you're getting some diversity there.

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[SPEAKER_02]: I like that.

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[SPEAKER_02]: I like, I like silver.

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[SPEAKER_02]: as well as goal, but silver has some industrial applications that I think is making it a little more scarce at the moment.

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[SPEAKER_02]: So I do like that.

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[SPEAKER_02]: Earnings for this year, $1.04, after making 80 cents last year, then $2.05 expected next year.

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[SPEAKER_02]: And it's a $17.73 stock.

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[SPEAKER_02]: So you're talking about less than 10 times forward looking earnings.

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[SPEAKER_02]: Well, it's again like that.

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[SPEAKER_02]: Now, the precious metal place, a space has, excuse me, space has pulled back as of late.

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[SPEAKER_02]: But to me, it's, I think, reset sentiment.

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[SPEAKER_02]: It's gotten people a little buried up.

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[SPEAKER_02]: And when the structural factors behind the multi-year move and precious metals have a remaining tact, and everyone else is bearish.

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[SPEAKER_02]: Well, that's a time that I get a little more bullish.

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[SPEAKER_02]: And you had a nice move in the space off of a higher low from March's low.

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[SPEAKER_02]: And so I like that.

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[SPEAKER_02]: I like the move on volume today.

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[SPEAKER_02]: Coer has net cash and it's balanced.

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[SPEAKER_02]: You've got a billion dollars in net cash on a market cap of 18 billion.

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[SPEAKER_02]: Free cash flow of 900 and million in change.

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[SPEAKER_02]: And that's before earnings are expected to more than double this year.

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[SPEAKER_02]: So, I'm a big fan of this name.

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[SPEAKER_02]: CDE career mining is the name.

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[SPEAKER_02]: And we'll add a ground to cover over the next 45 minutes.

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[SPEAKER_02]: But let me remind you about yesterday's show.

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[SPEAKER_02]: We looked into the question, is 5% of the new normal for long-term interest rates?

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[SPEAKER_02]: And talk about what the bond market reprising means for investors.

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[SPEAKER_02]: It's a great show.

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[SPEAKER_02]: We also answer questions that came in via our YouTube channel when it's on Amphanol, a very popular name with an AI infrastructure space.

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[SPEAKER_02]: If you happen to miss it, go check it out.

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[SPEAKER_02]: That's where you get every show's to follow and best talk wherever you get your podcast.

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[SPEAKER_02]: Now, let's set the ground for today's show over the next 45 minutes or so on our main focus point is about the wars, 25 billion dollar tab.

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[SPEAKER_02]: How the Iran conflict is hitting corporate earnings, globally.

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[SPEAKER_02]: The media keeps running, not just on U.S. government expenses, but the lost profit from higher input costs, that companies are absorbing around the world, companies and consumers and other businesses.

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[SPEAKER_02]: So we look at what industries are absorbing the bigger losses, what forward-looking investors need to watch and upcoming in the upcoming earnings reports.

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[SPEAKER_02]: So we look at that data.

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[SPEAKER_02]: In addition, we'll look at productivity.

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[SPEAKER_02]: In the age of AI, it's productivity improving.

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[SPEAKER_02]: Here in the United States, we'll look into that data.

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[SPEAKER_02]: And then how are companies looking at their workforce in age of AI?

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[SPEAKER_02]: Are they reducing headcount?

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[SPEAKER_02]: Or are they making their existing employees do more?

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[SPEAKER_02]: Or expecting them to do more?

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[SPEAKER_02]: We'll look at that as well.

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[SPEAKER_02]: We also have voice bank calls on the video's economy as well as JP Morgan Chase, JPM, and then as usual the questions that came in via the comment section over on the Vestock YouTube channel.

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[SPEAKER_02]: And of course I welcome your finance and investment questions right now.

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[SPEAKER_02]: But we're going to head into a quick break.

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[SPEAKER_02]: Please remember, you call any time, leave a question on the Vestock voice bank.

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[SPEAKER_02]: If you listen to your live stream or post-banym 1220 in the Bay Area, you can call right now at 8-899 and chart up next, or comment on today's market activity.

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[SPEAKER_06]: The Vestark phone lines never closed and now Justin Klein is here taking your calls live.

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[SPEAKER_06]: In Vestark, 888-99 chart.

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[SPEAKER_02]: Well, it was a nice bounce back day after some decent selling to close last week and into the early part of this week in markets.

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[SPEAKER_02]: It was really driven by new optimism around the final stages, potential final stages of talks between the United States and Tehran to end this in this war.

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[SPEAKER_02]: Frankly, I don't buy it.

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[SPEAKER_02]: I just think this is more job-owning.

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[SPEAKER_02]: But the market reacted to it.

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[SPEAKER_02]: It reacted to bad optimism and also reacted to it, which I think is a little more real or is more real, which is Asia bound super tankers carrying about six million barrels of crude past the streets of our moves.

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[SPEAKER_02]: Today, that would be the biggest volume to exit the Gulf in a single day since the war began.

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[SPEAKER_02]: So is that a sign that even if there's a continued stalemate

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[SPEAKER_02]: isn't as guaranteed as everyone is expecting, that's a possibility, maybe that's what the market reacted the most because WTI did fall back below $100 per barrel despite a record draw on inventories.

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[SPEAKER_02]: That's what we saw.

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[SPEAKER_02]: Massive amounts of inventory is being drawn 17.1 million barrels, drawn last week of U.S. crude, driven by record exports to warp, or sell a lot of oil in the world.

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[SPEAKER_02]: But it's drawn down inventory dramatically, which is obviously pushing up costs domestically, and you're going to do this for so long, right?

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[SPEAKER_02]: Going to do this for so long because we have a finite amount of inventory.

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[SPEAKER_02]: how much can we continue to supply the world while the streets are closed, mainly.

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[SPEAKER_02]: And keep oil prices contained so that doesn't break the economy.

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[SPEAKER_02]: That's the balancing after the current administration is dealing with.

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[SPEAKER_02]: Right now, there's a tentative balance.

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[SPEAKER_02]: Doesn't mean that's always going to be the case.

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[SPEAKER_02]: So once again, we'll see how this goes.

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[SPEAKER_02]: But that was the market reaction today.

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[SPEAKER_02]: That push yields down as expectations of maybe lower inflation in the medium term because of lower oil prices.

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[SPEAKER_02]: So that makes sense.

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[SPEAKER_02]: Dollar index is 0.2% gold finished up 0.5% silver up 1.4.

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[SPEAKER_02]: Bitcoin up 1% WTI was down, like I said, 5.7% down below $100 per barrel.

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[SPEAKER_02]: After I was with the Nvidia earnings, which was a, or is a, a big market mover potentially.

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[SPEAKER_02]: So far, let's take a look here.

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[SPEAKER_02]: I know after the initial report, it was down, modestly, you're talking half a percent or so.

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[SPEAKER_02]: Last time I looked, let's see where I now.

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[SPEAKER_02]: After I was, yeah, down less than 1%.

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[SPEAKER_02]: So really not a whole lot of reaction so far.

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[SPEAKER_02]: We'll see

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[SPEAKER_02]: the fall through one way or the other tomorrow.

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[SPEAKER_02]: And that should be a major market.

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[SPEAKER_02]: Move it because number of it is the largest company in the world right now by market cap.

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[SPEAKER_02]: So that was the market to day.

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[SPEAKER_02]: That's time.

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[SPEAKER_02]: We see questions via web form from vestock.

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[SPEAKER_02]: Dot com.

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[SPEAKER_02]: And here's when the came really says I made your part.

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[SPEAKER_02]: I made a part of my portfolio is GPC as they ran a store for them for many years.

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[SPEAKER_02]: Doc is down 26% year to date.

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[SPEAKER_02]: I was sorry, one year.

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[SPEAKER_02]: 26.74% for five years.

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[SPEAKER_02]: Every 1275 in 2023, 150 want to share most recently.

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[SPEAKER_02]: Close today at 94, 88.

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[SPEAKER_02]: P is 208.

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[SPEAKER_02]: Sorry, I don't know why this is 28.

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[SPEAKER_02]: P is not 28.

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[SPEAKER_02]: Currently, today at 94 earnings, eight, 37.

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[SPEAKER_02]: 11, 12 times earnings, debt to assets of 78.6, let me pull that up.

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[SPEAKER_02]: As I'm worried about this company as old and as long as it has been business, we'll suddenly announce it's going bankrupt, stock withdrawing to zero.

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[SPEAKER_02]: Well, that is always a potential for companies with some debt, but you're talking about $6 billion in net debt on a $13 billion market cap.

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[SPEAKER_02]: That's terrible to be honest with you.

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[SPEAKER_02]: Still good free cash flow, 550 million.

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[SPEAKER_02]: That is down from it's all time high back in 2021 around $2 billion, but that was kind of an anomaly.

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[SPEAKER_02]: Right, typically they're free cash flow over the last decade is average, kind of around a billion dollars.

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[SPEAKER_02]: So at 500, that is lower than it has been.

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[SPEAKER_02]: Margins do look that they are shrinking operating margins are down to about five percent Versus close to the six or seven percent of the last ten years So there's a little bit of worry there.

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[SPEAKER_02]: He says GPC says they are going to divide into two companies industrial out of parts I don't see this as a major jolt stock price.

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[SPEAKER_02]: I really like to come any but a nervous Please give me your thoughts listen to your show every night.

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[SPEAKER_02]: Thank you very much

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[SPEAKER_02]: So they're dividing up, it makes some sense because the industrial business is probably doing much better than the parts business, auto parts business, because the industrial man is so growing.

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[SPEAKER_02]: A lot does depend on how do they split up this debt?

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[SPEAKER_02]: they saddle one with more debt than the other.

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[SPEAKER_02]: That's a big question.

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[SPEAKER_02]: In and of itself, I don't think it's going bankrupt.

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[SPEAKER_02]: It's right, they're still profitable.

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[SPEAKER_02]: The cash will still get, they still can carry this level of debt.

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[SPEAKER_02]: There are times it's just starting to six point two.

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[SPEAKER_02]: I don't really worry, it's not super high number, but it's not in distress or anything like that.

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[SPEAKER_02]: So I think your concerns are overblown.

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[SPEAKER_02]: I think it's more to do with the stock price that has been on a recent decline from 150 back in, just in February now down to around 95.

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[SPEAKER_02]: So I think this is a sentiment play.

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[SPEAKER_02]: Back that you're asking this, actually tells me this is probably a good time to pick it up, pretty cheap, good balance sheet.

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[SPEAKER_02]: I would actually buying it here, not selling it.

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[SPEAKER_02]: This is Investor.

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[SPEAKER_02]: Now closing on 63 million downloads thanks to you, so hang on, our work continues.

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[SPEAKER_02]: After this breaks, give me a call at 8.99.

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[SPEAKER_06]: Every investor is working to build a secure financial future.

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[SPEAKER_06]: How they get there and when they get there, that depends on many factors.

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[SPEAKER_06]: The more you learn about how the market works, the better your chances for success.

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[SPEAKER_06]: So don't forget to call, invest talk, 888-99 chart.

13:59.234 --> 14:03.297
[SPEAKER_07]: Hi there, I just had a general question kind of an overall question about the

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[SPEAKER_07]: state of the American economy in the next two, three, four, five years.

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[SPEAKER_07]: The market seems to be a bit overvalued, correct me if I'm wrong.

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[SPEAKER_07]: And from a government standpoint, it seems to be a lot of international entanglements, a lot of spending.

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[SPEAKER_07]: Just wanted to see in broad strokes, not what's going to happen in the next six months or what you what you foresee happening, but kind of a little bit

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[SPEAKER_07]: I guess midterm longterm and how that's going to affect or could affect the market.

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[SPEAKER_07]: Obviously the Fed is I guess in play with that as well with rates and the change.

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[SPEAKER_07]: Appreciate the show and I'll listen.

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[SPEAKER_07]: Thanks.

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[SPEAKER_02]: Well, let's say the first, I want to correct the first part, which was saying the market is a little bit overvalued.

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[SPEAKER_02]: I would take a bit issue with that.

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[SPEAKER_02]: Everyone's been saying the market overvalued for a number of years.

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[SPEAKER_02]: And the only way that really matters is if if liquidity suddenly turns the other way, like in 2022, when the Fed type policy, tighten financial conditions,

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[SPEAKER_02]: So that's the only thing you have to, when you're looking at valuation, remember, valuation is the worst, the worst market's hanger.

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[SPEAKER_02]: You never want to look at valuation to say, okay, what's the market gonna do over the next six months, year, 18, 20 months, et cetera.

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[SPEAKER_02]: Over decade, 15 years sure, but that's usually the time frame of most people are operating in.

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[SPEAKER_02]: So that's number one.

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[SPEAKER_02]: Now what's gonna happen with the medium to long term?

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[SPEAKER_02]: I think AI is certainly the biggest swing factor here.

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[SPEAKER_02]: In the short term, it's helping the economy because basically what you're seeing in this can have a longer runway, I think the most people realize,

15:54.007 --> 16:03.036
[SPEAKER_02]: You're seeing these large hyperscalers open up their cash flows and their balance sheets to the economy.

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[SPEAKER_02]: Before this cap expend, what did they do with all the money that they were making?

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[SPEAKER_02]: I'm talking the Google's and the Amazon's and the Microsoft's of the world.

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[SPEAKER_02]: Well, they

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[SPEAKER_02]: They may be up to divin in a little bit.

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[SPEAKER_02]: Mainly they just held onto the cash.

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[SPEAKER_02]: And it wasn't very stimulative.

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[SPEAKER_02]: That's not very stimulative to the overall economy because it's sitting there.

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[SPEAKER_02]: It's capital that's not being used in the broader economy.

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[SPEAKER_02]: Yeah, it's boosting the stock price, which helps the wealthier cohort to own shares of equities.

16:49.581 --> 16:54.085
[SPEAKER_02]: But what these companies are doing now is spending hundreds of billions of dollars a year each.

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[SPEAKER_02]: From their cash flow, on actual products, servers and chips and electrical infrastructure.

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[SPEAKER_02]: Some workers, this all has a trickled down effect to different parts of the economy.

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[SPEAKER_02]: And some of them are even dipping into their balance sheets that are very clean and saying, we're gonna take on debt to do so.

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[SPEAKER_02]: This is very similar to what you've seen out of the government, which is their spending money.

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[SPEAKER_02]: That is stimulative to the overall economy.

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[SPEAKER_02]: Would you care whether you like the idea of us adding more debt to our already bloated government debt

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[SPEAKER_02]: That's another question, long term, that's an issue.

17:37.269 --> 17:49.677
[SPEAKER_02]: It's an issue when they can't finance that debt and they have to monetize it and then the release valve is the dollar and then you have the climbing dollar and higher inflation and all of that and that's something, you know, kind of a playbook up your pan.

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[SPEAKER_02]: And that's more of once kind of long term trend that it is likely in place, but in the near term, all this spending, both government and these mega corporations,

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[SPEAKER_02]: is stimulated to the economy.

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[SPEAKER_02]: So as long as they continue to spend, that's going to elistimulate this part of the economy.

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[SPEAKER_02]: And that's why the economy continues to grow.

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[SPEAKER_02]: Now will they maintain that, is the question?

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[SPEAKER_02]: There's certainly able to, I think, for a long period of time, because once again, most of this is coming out of just cashflow that they're earning on other businesses.

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[SPEAKER_02]: For example, meta is making a lot of money still for Instagram and their Facebook platform.

18:33.470 --> 18:37.053
[SPEAKER_02]: Microsoft's still making a lot of money from the 365 subscriptions.

18:38.214 --> 18:42.297
[SPEAKER_02]: Amazon's still making a lot of money from AWS and us shopping.

18:43.238 --> 18:50.744
[SPEAKER_02]: And so this money can still continue until I think the market says, you know what, you're spending too much.

18:51.404 --> 18:54.086
[SPEAKER_02]: Kind of have them with Oracle and then everyone up a bunch and then it reversed.

18:54.847 --> 18:58.150
[SPEAKER_02]: It's come back a little bit, but still the market is a little weary of

18:59.100 --> 19:01.262
[SPEAKER_02]: kind of the debt they're putting on.

19:01.783 --> 19:04.765
[SPEAKER_02]: It may work out, it may not, but it's still kind of up in the air.

19:04.825 --> 19:15.095
[SPEAKER_02]: So as long, I think that's when the economy will truly break is when saying, yeah, I will stick around, but this level of CapExpend is not tenable for these names.

19:15.776 --> 19:23.523
[SPEAKER_02]: And in that, it to me is when you'll see probably that next recession, but right now, that doesn't look like it's us.

19:26.980 --> 19:27.882
[SPEAKER_02]: Now we're heading to a break.

19:28.463 --> 19:30.368
[SPEAKER_02]: I'm Justin Klein and ready for your calls now.

19:31.109 --> 19:31.851
[SPEAKER_02]: Anytime the 8.899 chart.

19:35.852 --> 19:39.954
[SPEAKER_02]: At KPP Financial, Accountability means more than advice.

19:40.655 --> 19:45.397
[SPEAKER_02]: It means we invest alongside you through our parallel investing approach.

19:46.018 --> 19:57.524
[SPEAKER_02]: When we recommend an investment for clients, one or more KPP principles invest their own capital at the same time, same day, same price, same percentage.

19:58.204 --> 20:01.406
[SPEAKER_02]: If your portfolio moves, ours does too.

20:02.066 --> 20:02.967
[SPEAKER_02]: That is alignment.

20:03.427 --> 20:04.710
[SPEAKER_02]: That is transparency.

20:05.191 --> 20:07.235
[SPEAKER_02]: That is the KPP difference.

20:08.136 --> 20:12.826
[SPEAKER_02]: Visit investtalk.com to get your free portfolio review.

20:16.263 --> 20:19.564
[SPEAKER_06]: are a few things that make KPP financial special.

20:20.104 --> 20:22.425
[SPEAKER_06]: One of them is parallel investing.

20:22.785 --> 20:26.107
[SPEAKER_06]: This means they invest right alongside their clients.

20:26.547 --> 20:27.547
[SPEAKER_06]: Here's how it works.

20:28.067 --> 20:36.130
[SPEAKER_06]: When KPP financial makes a trade for their clients, Justin Klein makes the same trade for himself and KPP.

20:36.650 --> 20:40.792
[SPEAKER_06]: On the same day, at the same price and same percentage.

20:41.412 --> 20:43.933
[SPEAKER_06]: No front running, no special treatment.

20:44.533 --> 20:49.235
[SPEAKER_06]: Learn more about Parallel Investing at Investalk.com.

20:52.897 --> 20:57.439
[SPEAKER_02]: Our main focus point today is about the $25 billion tab.

20:58.679 --> 21:02.201
[SPEAKER_02]: Corporations are paying for the Iran War.

21:03.161 --> 21:10.064
[SPEAKER_02]: And the meter keeps running and the impact on supply chains and rising energy costs and shipping routes remains intact.

21:10.958 --> 21:15.220
[SPEAKER_02]: So let's take a look at what industries are saying.

21:16.261 --> 21:23.205
[SPEAKER_02]: And mainly with their saying is that they're grappling with soaring energy prices, fractures to play chains and trade routes that are blocked by what's going on in the streets.

21:24.107 --> 21:33.976
[SPEAKER_02]: At least 20079 companies have cited the war as a trigger for a defensive action, including increasing prices and production cuts.

21:34.776 --> 21:43.404
[SPEAKER_02]: Others have suspended dividends or stock buybacks, they furled staff, added fuel surcharges, and some of you haven't sought emergency government assistance.

21:44.425 --> 21:51.491
[SPEAKER_02]: And many are threatening that profit margins in the second quarter and further out will be severely affected.

21:52.467 --> 21:54.329
[SPEAKER_02]: And they're already seeing it in the consumer.

21:54.349 --> 21:59.814
[SPEAKER_02]: They're saying that consumers are replacing, are holding back on replacing products.

22:00.790 --> 22:03.792
[SPEAKER_02]: And instead, trying to repair that, for example.

22:04.432 --> 22:07.795
[SPEAKER_02]: And mostly impact has to do with higher input costs.

22:07.815 --> 22:12.238
[SPEAKER_02]: You're talking about fertilizer, helium, aluminum, polyethylene that goes into plastics.

22:12.958 --> 22:25.467
[SPEAKER_02]: And about one fifth of companies in this review and they're looking at corporate expectations from around the world, from all types of industries you're talking about from cosmetics to tires, to detergents, to cruise operators and airlines.

22:26.427 --> 22:29.129
[SPEAKER_02]: But one fifth said that there will be a financial hit

22:31.131 --> 22:35.414
[SPEAKER_02]: Now, most of these were based in Europe and the UK and Asia.

22:36.174 --> 22:46.561
[SPEAKER_02]: So, less are impacted here in the United States, which is why you're seeing a bit of a setback in foreign stocks over the past couple of months compared to domestic stocks.

22:47.082 --> 22:58.589
[SPEAKER_02]: But overall, the put this in context, the $25 billion dollar tally is actually less than the tally that was flagged from the tariff war last year, which is about $35 billion in cost.

23:00.010 --> 23:02.112
[SPEAKER_02]: But what industries were impacted the most?

23:02.732 --> 23:04.414
[SPEAKER_02]: Number one were airlines.

23:04.854 --> 23:09.478
[SPEAKER_02]: They represent about $15 billion of the cost because of jet fuel prices doubling.

23:09.798 --> 23:19.125
[SPEAKER_02]: But then you had companies like Japan's Toyota, or a $4.3 billion head proctor in Gamble a $1 billion post tax profit hit.

23:19.526 --> 23:22.928
[SPEAKER_02]: And then nearly 40 companies across industrials, chemicals, materials.

23:23.809 --> 23:28.334
[SPEAKER_02]: So they're going to raise prices due to their exposure to the Middle East.

23:29.015 --> 23:41.227
[SPEAKER_02]: And margins have been cut by about 0.38% of points for the S&P 500 industrial sector, 0.14% for consumer discretionary companies and 0.08% for consumer staples.

23:42.068 --> 23:48.474
[SPEAKER_02]: Autos, telecoms, household products, they were seeing the most negative revisions of more than 5% over the next 12 months.

23:49.135 --> 23:54.980
[SPEAKER_02]: So a lot of the impacts have not yet materialized in earnings reports.

23:56.081 --> 24:00.245
[SPEAKER_02]: Remember, the latest earnings season was about Q1, which was

24:01.280 --> 24:18.168
[SPEAKER_02]: didn't feel much at this very tail end of Q1 when the war started and so the impact was very minor for most of these companies because supply chains were still moving or stuff still waiting to be delivered.

24:18.788 --> 24:21.969
[SPEAKER_02]: The return impact isn't is just really starting to be felt.

24:22.550 --> 24:26.431
[SPEAKER_02]: Now what sectors have seen there often margins increase because of this?

24:26.471 --> 24:27.632
[SPEAKER_02]: Well, energy is the most

24:30.253 --> 24:35.417
[SPEAKER_02]: Real Estate 39, information technology 34, and materials up 22%.

24:35.777 --> 24:49.486
[SPEAKER_02]: It's been industrials, down 38%, 38 basis point of contraction financial 17, the gratitude with defaults for companies within the industrial space, consumer discretionary space, that's down 14 basis points.

24:50.547 --> 24:52.829
[SPEAKER_02]: When we're talking about margins here, profit margins.

24:53.674 --> 24:57.356
[SPEAKER_02]: been consumer staples down eight, like I said, a healthcare down two.

24:57.416 --> 25:00.078
[SPEAKER_02]: So those are the main sectors that are being hit the most.

25:00.138 --> 25:08.543
[SPEAKER_02]: But clearly, this is something where the impact isn't fully understood, we won't know exactly these are all estimates.

25:08.944 --> 25:16.929
[SPEAKER_02]: But clearly, it's not just the cost of military action for the U.S. government, but the cost on these companies.

25:17.689 --> 25:20.051
[SPEAKER_02]: Let's keep things moving and drop in another list of questions now.

25:20.671 --> 25:21.952
[SPEAKER_04]: Hi, Justin Luke.

25:22.486 --> 25:26.629
[SPEAKER_04]: This is math for Minneapolis, long, long-time whistle-earth year show.

25:26.930 --> 25:29.812
[SPEAKER_04]: Thank you for having it and everything you guys do.

25:30.273 --> 25:35.076
[SPEAKER_04]: I have a quick question here about the buying JPM JP Morgan.

25:35.597 --> 25:37.238
[SPEAKER_04]: I've had it for quite some time.

25:37.278 --> 25:40.161
[SPEAKER_04]: I've made a good profit on an actually over all the years.

25:40.221 --> 25:44.464
[SPEAKER_04]: I've had it, but recently for the last, I don't know, two, three months.

25:45.005 --> 25:46.266
[SPEAKER_04]: It's been in a rut here.

25:51.784 --> 25:57.288
[SPEAKER_04]: And I'm wondering, are we just stuck there for temporary or is it going to be long-term?

25:57.669 --> 26:02.292
[SPEAKER_04]: I know we have a new Fed chair in there now and we don't know what he's going to do with reads.

26:02.392 --> 26:10.939
[SPEAKER_04]: Now, I hear reads are going to maybe go up by the end of the year instead of down and interest rates might be going up for investment bank like this one.

26:11.339 --> 26:15.963
[SPEAKER_04]: Does wondering, would you take your profits and maybe look for someplace else to make money?

26:15.983 --> 26:19.066
[SPEAKER_04]: Or would you just stay in this sector and stay in this bank?

26:19.126 --> 26:20.707
[SPEAKER_04]: I know it's supposed to be one of the better ones.

26:21.231 --> 26:26.113
[SPEAKER_04]: So I didn't know if it would be a thumbs up in your book or if you would just jump out and look elsewhere.

26:26.133 --> 26:28.454
[SPEAKER_04]: I look forward to hearing your words of wisdom.

26:28.474 --> 26:29.754
[SPEAKER_04]: Thank you, have a good day.

26:31.215 --> 26:33.356
[SPEAKER_02]: Well, JP Morgan is not just an investment make.

26:33.376 --> 26:36.417
[SPEAKER_02]: They do have an investment making arm, but it also is a commercial bank.

26:36.557 --> 26:44.901
[SPEAKER_02]: So it has both sides here that gives some diversity because there are some quarters where your traditional commercial banks do well.

26:45.001 --> 26:50.263
[SPEAKER_02]: And vice versa, they can do poorly and the investment make side does much better.

26:52.180 --> 26:57.104
[SPEAKER_02]: I like the diversity there, J.B. Morgan, just one of the best run banks in the world.

26:58.225 --> 27:14.177
[SPEAKER_02]: earnings supposed to be up to $23.60 next year, it's only at 301, so you're talking about a low to mid-teens multiple, which I think is pretty good for a bank of this quality and with as much diversity.

27:15.973 --> 27:20.717
[SPEAKER_02]: It's been pulling back lately because just the broad sector as a whole has.

27:20.737 --> 27:22.278
[SPEAKER_02]: So you always have to look at that.

27:23.859 --> 27:27.382
[SPEAKER_02]: You don't look at a name just in a vacuum.

27:28.003 --> 27:31.606
[SPEAKER_02]: You have to look at it in context to its broader sector.

27:32.847 --> 27:38.892
[SPEAKER_02]: If the sector is going through a choppy sideways correction,

27:40.301 --> 27:40.701
[SPEAKER_02]: Guess what?

27:41.201 --> 27:46.904
[SPEAKER_02]: But one of the largest names within that sector are likely to do something similar and frankly, it just has.

27:47.964 --> 27:50.645
[SPEAKER_02]: Well, the underlying fundamentals of the bank are fine.

27:52.586 --> 28:07.012
[SPEAKER_02]: I don't love banks right now because the mid to lower consumers is starting to struggle, but JP Morgan, it does focus a lot on the business community.

28:08.665 --> 28:11.346
[SPEAKER_02]: That's where, you know, we bank, we bank a JP Morgan.

28:12.826 --> 28:21.088
[SPEAKER_02]: So it's great for businesses in her and a billion dollar market cap, return equity is 16% which for a bank is very good.

28:23.628 --> 28:27.629
[SPEAKER_02]: And it's pretty much been consistent at that profitability level since 2021.

28:28.789 --> 28:29.830
[SPEAKER_02]: Good free cash flow.

28:29.850 --> 28:31.590
[SPEAKER_02]: What are they doing with shares?

28:31.890 --> 28:32.750
[SPEAKER_02]: I'm actually gonna see it.

28:33.010 --> 28:34.671
[SPEAKER_02]: They continue to take their cash flow.

28:35.331 --> 28:36.351
[SPEAKER_02]: Bye-bye shares.

28:38.007 --> 28:38.908
[SPEAKER_05]: Are they raising their dividend?

28:41.469 --> 28:46.993
[SPEAKER_02]: Yeah, they're raising their dividend as well back in 2017 is paying 48 cents a share now, it's a $1.50.

28:49.794 --> 29:01.802
[SPEAKER_02]: So it's kind of the safest, easiest decision if you're just going to own, if you want to own a large bank, there really isn't a better choice.

29:03.043 --> 29:04.924
[SPEAKER_02]: So don't get shaken out over,

29:05.722 --> 29:08.284
[SPEAKER_02]: little consolidation period, that's how these things work.

29:08.964 --> 29:17.670
[SPEAKER_02]: They stare step higher, they go through, you know, a rally, a choppy sideways pattern, which has been in since basically late summer of last year.

29:18.191 --> 29:27.597
[SPEAKER_02]: So I understand, maybe your frustration of lack of advancement over the past six months or so, but it goes through these periods.

29:27.977 --> 29:31.339
[SPEAKER_02]: And I would continue to hold it as long as you're okay with holding.

29:32.260 --> 29:34.902
[SPEAKER_02]: Let's go take another voicemail question now.

29:35.709 --> 29:38.111
[SPEAKER_08]: My name is Sam, I'm calling from West LA.

29:38.591 --> 29:40.392
[SPEAKER_08]: I love the program and I love listening to it.

29:40.513 --> 29:48.038
[SPEAKER_08]: Two stocks, I have my Ion, poet, P-O-E-T, and PolymT or P-L-P-L-P-R.

29:48.458 --> 29:49.379
[SPEAKER_08]: I wanted to know your thoughts.

29:50.060 --> 29:56.144
[SPEAKER_08]: I am holding both, so I'm just curious if you know if I should unload or buy more or hold onto them.

29:56.584 --> 29:57.185
[SPEAKER_08]: Thank you so much.

29:57.545 --> 29:58.266
[SPEAKER_08]: Take care, bye.

29:58.866 --> 30:03.389
[SPEAKER_02]: Well, I'll start with Talon's here because that's the most popular, it's pretty easy.

30:04.254 --> 30:06.556
[SPEAKER_02]: It's also the extremely overvalued.

30:07.737 --> 30:10.138
[SPEAKER_02]: And to me, this is just a political decision.

30:11.700 --> 30:13.321
[SPEAKER_02]: Political analysis, shall we say.

30:13.341 --> 30:17.144
[SPEAKER_02]: It has nothing to do with the fundamentals of the business, because it's just a greed just the overvalued.

30:18.485 --> 30:29.153
[SPEAKER_02]: But if you think that their technology will continue to be deployed throughout our military by this and future administrations, or will there be some sort of

30:31.107 --> 30:55.036
[SPEAKER_02]: pushback from the constituents that they don't want to police data and any status a state what is looking at our every move and studying it and and creates a system that's ripe for abuse that's what pounds here is bottom line if you think that we don't have a say that this will continue to

30:56.952 --> 31:01.013
[SPEAKER_02]: encroach even more on on our on our privacy is as citizens.

31:02.954 --> 31:18.137
[SPEAKER_02]: Then it's probably going to continue to do it because it will become the all seeing all knowing I and and the powers that be will will want to have that and and keep that in the in the tool chest that we should always say that's the only decision here.

31:18.177 --> 31:19.358
[SPEAKER_02]: It's not a fundamental thing.

31:19.778 --> 31:20.518
[SPEAKER_02]: It's all about that.

31:21.418 --> 31:22.398
[SPEAKER_02]: So that's your up to you.

31:23.359 --> 31:24.099
[SPEAKER_02]: Now it comes to poet.

31:25.545 --> 31:31.170
[SPEAKER_02]: This is a very different name, much smaller, only about $2 billion market cap.

31:32.371 --> 31:40.397
[SPEAKER_02]: They designed to build a manufacturer, off-to-electronics solutions for sensing data communication and telecommunication markets.

31:41.218 --> 31:47.003
[SPEAKER_02]: I'd imagine this is doing well, due to AI data infrastructure buildouts and semiconductor demand, all of that.

31:48.124 --> 31:53.208
[SPEAKER_02]: They don't make money, but they are expected to finally break even next year.

31:55.632 --> 31:58.294
[SPEAKER_02]: 14 dollar stock, the momentum is good.

31:59.215 --> 32:01.076
[SPEAKER_02]: And that's what your, this is all that is.

32:01.096 --> 32:03.218
[SPEAKER_02]: This is a pure momentum play.

32:03.258 --> 32:03.999
[SPEAKER_02]: It's breaking out.

32:04.039 --> 32:05.160
[SPEAKER_02]: It's going to be very volatile.

32:05.200 --> 32:06.301
[SPEAKER_02]: It, I mean, just look recently.

32:06.901 --> 32:14.547
[SPEAKER_02]: Went all the way up to close to 21, pulled back yesterday, hit a low of 12, or so, now we're up to about $15 per share at the close today.

32:16.469 --> 32:17.269
[SPEAKER_02]: It's all over the board.

32:18.250 --> 32:19.391
[SPEAKER_02]: Extremely high risk.

32:20.572 --> 32:21.913
[SPEAKER_02]: Once again, doesn't make money.

32:26.433 --> 32:26.873
[SPEAKER_02]: great even.

32:28.574 --> 32:32.076
[SPEAKER_02]: But where does this ultimately end up from a profitability perspective?

32:33.017 --> 32:34.538
[SPEAKER_02]: I don't have a lot of perspective there.

32:36.899 --> 32:38.700
[SPEAKER_02]: It's not a name that I would bet on.

32:38.740 --> 32:40.221
[SPEAKER_02]: It's purely speculative.

32:41.422 --> 32:45.084
[SPEAKER_02]: Kind of just like Palantir's and that seems to be the investor that you are.

32:45.565 --> 32:51.268
[SPEAKER_02]: If I were to bet on one, it'd probably be poet just because I'm not a huge fan of Palantir and what they're doing.

32:52.890 --> 32:53.550
[SPEAKER_02]: But maybe you are.

32:53.590 --> 32:59.653
[SPEAKER_02]: Maybe you think that will continue and be used by the powers that be.

33:02.394 --> 33:06.435
[SPEAKER_02]: Let's go pivot and answer a YouTube comment question.

33:07.796 --> 33:10.097
[SPEAKER_02]: Now it says, I listen often to your podcast.

33:10.137 --> 33:14.298
[SPEAKER_02]: Episodes, not sure if this comment will be read, but I have a question regarding the ticker symbol.

33:15.018 --> 33:19.020
[SPEAKER_02]: Grab, G-A-R-B, let's take a look at this one.

33:20.360 --> 33:23.124
[SPEAKER_02]: Grab holdings at IPO to little over five to six years ago.

33:23.144 --> 33:27.992
[SPEAKER_02]: I've had it on my watch list recently, and started a small position by profiling on three or three dollars in 70 cents.

33:28.753 --> 33:30.977
[SPEAKER_02]: This is a good long term investment in your opinion.

33:32.175 --> 33:48.523
[SPEAKER_02]: The franchise seems solid, plenty of cash on hand and no huge debt, if I'm not mistaken, the reason earnings seems to be better than expected and now there is news there consolidating super bank as a subsidiary company if you do the liquor Justin can look at grab or respond to my YouTube comment question on the podcast that would be awesome.

33:48.684 --> 33:48.964
[SPEAKER_02]: All right.

33:49.644 --> 33:50.745
[SPEAKER_02]: Let's take a look at grab.

33:50.765 --> 33:51.465
[SPEAKER_02]: I haven't heard of this.

33:51.565 --> 33:54.366
[SPEAKER_02]: It would be considered a penny stock anything below $5 is considered

34:01.251 --> 34:06.875
[SPEAKER_02]: Turn to profit last year of six cents, it was to make 11 cents this year, then 16 cents next year.

34:08.296 --> 34:12.739
[SPEAKER_02]: So on a $3.51 stock, you're talking about a 20 multiple.

34:16.582 --> 34:16.802
[SPEAKER_02]: See.

34:20.425 --> 34:26.449
[SPEAKER_02]: The allow merchant partners to order food of groceries and packages, hail ride, taxis, panline purchases, interesting.

34:27.970 --> 34:30.032
[SPEAKER_02]: It operates in food delivery and mobility,

34:31.497 --> 34:32.677
[SPEAKER_02]: interesting grab holdings.

34:34.638 --> 34:38.439
[SPEAKER_02]: I've heard of this.

34:38.459 --> 34:39.099
[SPEAKER_02]: That is Singapore.

34:39.119 --> 34:40.780
[SPEAKER_02]: That's why.

34:40.840 --> 34:42.501
[SPEAKER_02]: So you're getting Singapore okay.

34:43.421 --> 34:44.801
[SPEAKER_02]: I like Singapore.

34:45.522 --> 34:46.702
[SPEAKER_02]: I like that exposure.

34:47.882 --> 34:51.283
[SPEAKER_02]: The free cash flow is about neutral right on flat.

34:52.364 --> 34:55.085
[SPEAKER_02]: A lot of cash in the balance sheet that you said about $4 billion in

34:59.220 --> 35:08.966
[SPEAKER_02]: enterprise valued even around 14, I like that, it is around support, it's been in a downtrend though since the fall, that worries me a bit.

35:10.146 --> 35:13.728
[SPEAKER_02]: But if I zoom out to a weekly chart, this is pretty good support.

35:14.649 --> 35:28.277
[SPEAKER_02]: So I kind of like the fundamentals here, I like the trend and earnings of 7% this year, 49% next year, I would give grab thumbs up as the G or AB out of a Singapore.

35:30.070 --> 35:34.320
[SPEAKER_02]: At an annualend chart, we are headed to our final break of the day, so give me a call.

35:34.661 --> 35:36.145
[SPEAKER_02]: Once again, at an annualend chart.

35:39.820 --> 35:45.584
[SPEAKER_06]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

35:46.044 --> 35:51.527
[SPEAKER_06]: Now the torch has been passed and a new generation of hosts is on the job.

35:51.968 --> 35:54.669
[SPEAKER_06]: Justin Klein and Luke Guerrero.

35:55.150 --> 36:03.014
[SPEAKER_06]: So when you've got finance and investment questions, don't forget to call in Vestock.

36:03.074 --> 36:04.035
[SPEAKER_06]: 888-99 chart.

36:04.795 --> 36:06.697
[SPEAKER_05]: Oh gentlemen, and thank you for what you do.

36:09.262 --> 36:19.448
[SPEAKER_05]: regarding CNQ, Canadian natural resources, looking to get into the oil and gas field, and want to know if this is still a good buy or a buy a two-late.

36:19.688 --> 36:21.069
[SPEAKER_05]: Thank you for your answer.

36:22.357 --> 36:29.018
[SPEAKER_02]: Looking at Canadian natural resources, one of the better run Canadian oil companies up there.

36:29.038 --> 36:39.061
[SPEAKER_02]: Return equity around 23% very solid $4.7 billion in free cash flow on a market without a 100 billion dollars good balance sheet.

36:41.261 --> 36:47.682
[SPEAKER_02]: Nice dividend about three and a half percent enterprise value either right around 4 looking 6.6% earnings

36:53.807 --> 37:00.573
[SPEAKER_02]: It's relative to Trank's 88 because oil price isn't going up, and Canadian companies have been a big beneficiary of that.

37:02.935 --> 37:07.078
[SPEAKER_02]: But this is a pure EMP company, meaning that's pretty much all they do.

37:07.699 --> 37:10.241
[SPEAKER_02]: They drill for oil and natural gas.

37:12.383 --> 37:20.390
[SPEAKER_02]: We used to own this name, but we actually switched out for a name that does EMP as well as

37:22.323 --> 37:23.204
[SPEAKER_02]: a lot of refining.

37:23.224 --> 37:31.070
[SPEAKER_02]: Now, they have some midstream and refining operations, but others have much bigger segments.

37:32.751 --> 37:45.200
[SPEAKER_02]: I would we know that that's what we were looking for, something that had a bit more exposure there, because what you've seen in the Middle East is a lot of damage to refiner's finding facilities, et cetera.

37:46.738 --> 37:52.722
[SPEAKER_02]: And only 2% of CNQ's business or revenue comes from refining operations.

37:56.084 --> 38:02.629
[SPEAKER_02]: So that's what I would be looking for, our businesses that have more diversity.

38:04.090 --> 38:09.653
[SPEAKER_02]: But it's CNQ bad, no, it's a very well-run, like I said, just straight up ENP company.

38:10.394 --> 38:12.135
[SPEAKER_02]: Expression production is what ENP stands for.

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[SPEAKER_02]: So I like CNQ.

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[SPEAKER_02]: But I'll be looking elsewhere in Canada.

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[SPEAKER_02]: Lastly, let's talk about productivity.

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[SPEAKER_02]: And post-fantial crisis, productivity around the world have been pretty meager.

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[SPEAKER_02]: But since COVID, productivity has searched.

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[SPEAKER_02]: In 2010s, it was right around 1% per year.

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[SPEAKER_02]: but it has risen to about 2%, so nearly double.

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[SPEAKER_02]: And the question is why, and also why is it important?

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[SPEAKER_02]: Number one, it's important because higher productivity, basically says that companies are getting more out of each worker, which limits inflation and ultimately raises economic growth.

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[SPEAKER_02]: real economic growth.

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[SPEAKER_02]: In fact, the federal reserve raised their median forecast for Americans long run GDP growth, 1.8 to 1.2% recently because of the resurgence in productivity.

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[SPEAKER_02]: Now, a lot of people will say that it's AI, but this really started, once again, post-COVID, but AI hasn't really been a real thing until the past year, year and a half, least widely used in corporate circles.

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[SPEAKER_02]: Now, where is this productivity coming from?

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[SPEAKER_02]: It's mainly in professional services and management.

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[SPEAKER_02]: And to me, this is the clear explanation.

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[SPEAKER_02]: It's work from home, it's Zoom.

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[SPEAKER_02]: It's a world, you know, it's what I work in.

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[SPEAKER_02]: And it's a lot easier to zoom on my clients.

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[SPEAKER_02]: Have video conferences, have phone calls, then it is to hop into plane or drive

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[SPEAKER_02]: For meetings, we work three days than we can office two days a week from home, so that's less time to commute as well and a lot of people are like that.

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[SPEAKER_02]: So this is really, I think, the driver of the innovation and our productivity over the past five years is just leveraging technology to the integrity and wasting less time for everybody getting the same thing if not more done.

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[SPEAKER_02]: So what tells you is that there's even more room for productivity to approve in the near future because of AI and maximizing that technology as well.

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[SPEAKER_02]: Now I'm Justin Client, and around you of KPP Financials Parallel Investing, we make a trade for our clients, we make the same trade for ourselves, same day, same price, same percentage no front running, no special treatments, we invest right alongside our clients, we show the same risk, and potential for success.

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[SPEAKER_02]: You can learn more by visiting Invest Talk.com.

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[SPEAKER_02]: Independent thinking should success.

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[SPEAKER_02]: It's a best talk.

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[SPEAKER_02]: Good night.

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