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[SPEAKER_03]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.

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[SPEAKER_03]: Here's your host, Justin Klein.

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[SPEAKER_01]: Good afternoon fellow investors and welcome back to invest talk.

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[SPEAKER_01]: This is our, what do we Wednesday, Wednesday, June 6th.

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[SPEAKER_01]: June 6th, I'm looking at a six.

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[SPEAKER_01]: So it's not June 6th, it's June 3rd, June 3rd, 2026 edition of Invest Talk.

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[SPEAKER_01]: Preach at you all tuning in so much to talk about on today's show.

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[SPEAKER_01]: Very interesting markets that we, we're just starting to see in a little weakness today.

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[SPEAKER_01]: One day doesn't make a trend, but, you know,

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[SPEAKER_01]: Certainly a lot to unpack why that might have happened.

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[SPEAKER_01]: We had big earnings after hours from names like Broadcom.

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[SPEAKER_01]: There was some other big one as well.

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[SPEAKER_01]: I came out of the top of my head, but both were down pretty big.

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[SPEAKER_01]: I think it was a software name.

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[SPEAKER_01]: our member later in the show.

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[SPEAKER_01]: But my point here is a lot to unpack a lot of economic news that we'll get to.

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[SPEAKER_01]: Most importantly, we'll be your calls.

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[SPEAKER_01]: Whatever is on your mind, don't hesitate to pick up the phone, give us a call eight to eight, 99 chart.

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[SPEAKER_01]: It is the number.

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[SPEAKER_01]: As always, whatever money question came to mind, maybe you thought about it last night.

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[SPEAKER_01]: Well, you're laying in bed, maybe it's something that sparked your interest today at work.

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[SPEAKER_01]: Or

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[SPEAKER_01]: You should take that seriously or not.

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[SPEAKER_01]: Whatever it is, we are here for all of it.

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[SPEAKER_01]: I encourage you to give us a call, 24 hours a day, seven days a week, aided at 99 chart.

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[SPEAKER_01]: Now, as you like you know, we wrapped up our best talk with webinar on May 6th about inflation and we now have recording over on our YouTube channel.

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[SPEAKER_01]: So go check that out.

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[SPEAKER_01]: But most importantly, we'll be our next one, which is about income.

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[SPEAKER_01]: And our next wealth webinar is coming up on June 30th.

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[SPEAKER_01]: So, less than a month away, Tuesday, 12 to 1 p.m. of the time, Tuesday, June 30th, 12 to 1 p.m. civic time beyond the yield how to invest for your income needs.

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[SPEAKER_01]: Very important one.

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[SPEAKER_01]: And today's world where more and more people are retiring.

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[SPEAKER_01]: They're looking for that income generation without

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[SPEAKER_01]: The large potential loss, which can happen if you overstep your risk boundaries.

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[SPEAKER_01]: And we're going to look at that.

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[SPEAKER_01]: Where does it make sense to take a little risk?

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[SPEAKER_01]: Where do you want to completely avoid?

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[SPEAKER_01]: All of that, when it comes to income, we're going to look at it.

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[SPEAKER_01]: So head over to investor.com and register.

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[SPEAKER_01]: Now, just a bit.

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[SPEAKER_01]: We'll talk about today's Mark performance.

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[SPEAKER_01]: We'll run down the show topics that we'll touch on the hour.

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[SPEAKER_01]: But as usual, we'll tackle this first-collect question now.

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[SPEAKER_01]: Oh, we're doing a live call.

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[SPEAKER_01]: I thought it was, okay, we talked to Richard and Santa Clarita once talked about treasury bills.

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[SPEAKER_07]: Yes, thanks, Justin, for once again taking my call.

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[SPEAKER_07]: I've been a listener of this show for a long time, like over 10 years, and I try to catch every episode.

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[SPEAKER_07]: But one of the things I have a question going back to what Steve Peasley used to say,

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[SPEAKER_07]: And maybe emphasized it because it were the conditions back then.

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[SPEAKER_07]: But he always said that whenever the tenure treasury is lower than the two year when you have the inverted rate there, he said historically always it follows with a recession.

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[SPEAKER_07]: And he said that they're recession.

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[SPEAKER_07]: It may not be next month or in five months or maybe even 18 months.

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[SPEAKER_07]: But we did have a period of time a while back where the was a an inversion that took was a long time lasting and then finally it's you know switch back to more you know the normal.

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[SPEAKER_01]: Will that how does that hold I mean taking that into consideration I don't think we've had a recession since the last inversion yeah that's that's definitely true that we didn't have an official recession because it did invert back in 20 was that 20 where are we Trying to bring up the chart here because I have it I know I have it in here somewhere

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[SPEAKER_03]: to your 10 year.

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[SPEAKER_01]: There it is, yield spread.

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[SPEAKER_01]: I've all this data.

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[SPEAKER_01]: So that was back in 2023, early, yeah, into early 2024, where it was inverted.

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[SPEAKER_01]: So I think that we're in a new era.

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[SPEAKER_01]: That was post World War II when things were a bit different now.

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[SPEAKER_01]: What we have is what I call what we call

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[SPEAKER_01]: where yes, there can, and there's a lot of manipulation of the yields curve by treasury, the Fed, they can do it based on issuance of issuing the long end to a short end, all of that.

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[SPEAKER_01]: And then,

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[SPEAKER_01]: the powers that be they don't they don't want a recession they don't want to preside a recession so they'll put through some sort of spending packages whether that's an emergency through some sort of a war things like that whatever it is they're they're they're they're manufacturing and that's why i say the the the risk to most for most people or they're they're just the markets excuse me is really a crash up that's kind of what you're seeing now everyone's worrying about oh wait type of deflationary bust crash and that's certainly could happen for

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[SPEAKER_01]: you've seen the short stints are hit with some sort of stimulus and in the background now you have such a large deficit and that large deficit means huge interest payments.

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[SPEAKER_01]: We know it's now over a trillion dollars a year higher than the military spending, least for now.

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[SPEAKER_01]: And what that is is that is basically government spending, right?

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[SPEAKER_01]: That's government spending because they're spending on interest and that's going into people's pockets.

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[SPEAKER_01]: That's dollars being created.

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[SPEAKER_01]: And so that is kind of underlying everything and really pun intended, no pun intended, trumps everything to a degree, not entirely, but definitely has this veneer of just stimulus under the surface that's coming from

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[SPEAKER_01]: government spending and government large S government effectively stimulus that's happening every single year with our deficits so large right we're at what five six percent deficit the GP ratio which those are levels that you see during a recession and so it's very hard to have a true recession when the government's spending that much the real worry is that eventually if the either

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[SPEAKER_01]: bond market takes away the printing press, basically saying we're no longer willing to finance you.

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[SPEAKER_01]: I think that's a more farther off than people understand, mainly because the treasury issue and schedule, are they issuing the long and the short end right now and even under Trump, under the Biden administration, they were all kind of pushing on the low end, or the short end, which is issuing short dated treasury bonds, which I think is what you kind of asked about originally, and that is stimulative to the overall economy.

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[SPEAKER_01]: And so they're easy to find, financing in the short term.

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[SPEAKER_01]: What that ultimate release valve will be is the dollar.

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[SPEAKER_01]: And that's the, whether dollar has been structurally weak for a couple of years now.

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[SPEAKER_01]: And even when the, the expectation of Fed rate hikes increases, you're not seeing a big rally in the dollar.

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[SPEAKER_01]: I see structural downside in the dollar.

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[SPEAKER_01]: And that is the release valve of all of this money printing, all of this fiscal dominance, all of this fiscal largest.

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[SPEAKER_01]: So I know, I know I, I talked a lot there.

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[SPEAKER_01]: Uh, kind of one of the tangent, but hopefully it gave you some perspective on what's going on with that with the underlying economy and why we're not seeing recession, even though we had that invertible curve.

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[SPEAKER_07]: Okay.

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[SPEAKER_01]: All right.

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[SPEAKER_01]: Well, thank you very much.

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[SPEAKER_01]: No problem.

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[SPEAKER_01]: Thanks for the call Richard.

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[SPEAKER_01]: Yeah, very interesting environment.

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[SPEAKER_01]: We're operating in here.

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[SPEAKER_01]: Very new one.

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[SPEAKER_01]: You have to get used to it, but we're heading into a quick break.

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[SPEAKER_01]: And I welcome your calls now.

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[SPEAKER_01]: Whatever's on your mind.

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[SPEAKER_01]: Maybe that's part to question that you want to ask me right now.

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[SPEAKER_01]: So, give me a call.

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[SPEAKER_01]: Either way, 8-8-99 chart.

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[SPEAKER_01]: Now we had a great show yesterday we looked at the story about how 10 year treasure yields are about to break out and what that means for bond and equity investors.

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[SPEAKER_01]: We also answered a listener question on Mueller Industries, those submitted via the Art and Best Talk YouTube channel.

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[SPEAKER_01]: If you have any miss it, go check it out.

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[SPEAKER_01]: And as always, the best way to follow Invest Talk is by checking us out and wherever you get to your podcast.

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[SPEAKER_01]: Now,

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[SPEAKER_01]: We have a lot of ground to cover over the next 45 minutes or so in time remaining.

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[SPEAKER_01]: We'll get to all of it, which is our main focus point about gold.

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[SPEAKER_01]: It's usually safe haven.

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[SPEAKER_01]: It isn't really playing out as expected despite the war, but we'll talk about why.

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[SPEAKER_01]: And there's actually a direct link in my mind of why gold is pulled back from its early February highs and the war in Iran, which you'd expect higher entire inflation because of the war.

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[SPEAKER_01]: Well, that's not really manifesting in higher gold prices.

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[SPEAKER_01]: Once again, I'll tell you my perspective on why, as well as what's going on with central banks globally and why still there remains a longer term up trend in place.

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[SPEAKER_01]: So we'll look at that story.

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[SPEAKER_01]: We'll also look at the Chinese solar industry.

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[SPEAKER_01]: What's going on with that?

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[SPEAKER_01]: You think you get a boost from what's going on in the Middle East, but so far, not so much.

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[SPEAKER_01]: We'll talk about that.

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[SPEAKER_01]: And then, oil stocks, not stocks, not the companies talking about the inventory of oil, the lowest level in two decades, two decades.

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[SPEAKER_01]: So when will we finally see that super spike in oil prices?

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[SPEAKER_01]: Look at that story as well.

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[SPEAKER_01]: We also have voice bank calls.

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[SPEAKER_01]: One is on the EUAD,

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[SPEAKER_01]: That holds European Aerospace and Defense companies, and then UROA, Uranium, or Royal T-Corp. You are, oh, why is there a question on those two, and of course questions that came in via the comment section over on our Invest Talk YouTube channel, but most importantly, as always, are your live calls.

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[SPEAKER_01]: So whatever's on your mind, don't hesitate to reach out,

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[SPEAKER_01]: is how you get through and ask your question.

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[SPEAKER_01]: 24 hours a day, seven days a week.

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[SPEAKER_01]: Let's take a quick look at the markets today.

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[SPEAKER_01]: It was a pretty broad-based sell-off.

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[SPEAKER_01]: Pretty broad-based sell-off.

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[SPEAKER_01]: First one in a wild, large-cap growth certainly struggled the most after had been the leader.

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[SPEAKER_01]: And this is kind of how it works.

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[SPEAKER_01]: You have a lot of money.

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[SPEAKER_01]: You have, when markets are not correlated, it's a very low correlation right now between the different sectors.

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[SPEAKER_01]: And right now, you would today, you got was those that had been strong, names like Nvidia, names like Oracle Pounds here.

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[SPEAKER_01]: So many even the financial names, they were had been strong, but recently, at least today, they were weak.

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[SPEAKER_01]: So I'm videoed down 3.3 Microsoft down 2.7 Oracle down 5% IBM down 6, and then in the finance space, Morgan Stanley down 2, Goldman Sachs down 2, Visa down 2, Mastercard down almost 2, Bank of America down 2%, so a lot of weakness there, but strength at a pocket such as Intel AMD's chip names continue to do well, although you're probably seeing them down tomorrow because after hours, broad come is down, I think.

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[SPEAKER_01]: six percent or something like that as of the current time.

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[SPEAKER_01]: But then you had some strength out of product manufacturing companies like caterpillar, land research, applied materials, and health care.

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[SPEAKER_01]: Health care is bouncing back.

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[SPEAKER_01]: Metronics had pretty good earnings after and in a good reaction there, the beat.

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[SPEAKER_01]: So that was good industrial sector did well.

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[SPEAKER_01]: Process manufacturing did well.

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[SPEAKER_01]: Energy did well as once again, what's going on in the middle

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[SPEAKER_01]: There's no resolution, not a lot of headlines here, but clearly it's not moving really in any direction.

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[SPEAKER_01]: The straight-to-remuse remains closed.

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[SPEAKER_01]: And once again, it's very clear that Iran holds the cards and the current administration is going to have to give in at some point, probably, frankly, you're probably going to have to see oil prices re-accelerate to the upside, probably past 125, maybe in the 150 level, that's where you'll probably get some sort of resolution.

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[SPEAKER_01]: I am some services came in for May 54.5 up from 53.6% in April and ahead of consensus.

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[SPEAKER_01]: So that was overall a positive ADP private payrolls, 122,000 in May ahead of consensus in the highest in 16 months and this goes back to what I've been saying is despite all the headlines and all of that, what you have to look at is under the hood.

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[SPEAKER_01]: This is what we look at all the time as our bank's lending.

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[SPEAKER_01]: is the credit market seizing up.

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[SPEAKER_01]: Is there anything that's preventing from more economic activity from happening besides just a little bit higher prices for underlying commodities?

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[SPEAKER_01]: The answer is not really, and that is why the markets continue to remain strong.

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[SPEAKER_01]: That could change, but as of now, things are doing okay.

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[SPEAKER_01]: Well, we're heading into a break.

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[SPEAKER_01]: I'm ready for your calls now.

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[SPEAKER_01]: or any time, 24-7-8899 chart.

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[SPEAKER_03]: There are a few things that make KPP financial special.

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[SPEAKER_03]: One of them is parallel investing.

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[SPEAKER_03]: This means they invest right alongside their clients.

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[SPEAKER_03]: Here's how it works.

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[SPEAKER_03]: When KPP financial makes a trade for their clients, just in client makes the same trade for himself and KPP.

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[SPEAKER_03]: On the same day, at the same price, and same percentage.

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[SPEAKER_03]: No front running, no special treatment.

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[SPEAKER_03]: Learn more about Parallel Investing at Investalk.com.

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[SPEAKER_04]: Hi, Justin and Luke.

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[SPEAKER_04]: I would like to get a broad index fund to diversify my portfolio.

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[SPEAKER_04]: I like the idea of dividends for income for retirement.

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[SPEAKER_04]: What do you think of ticker symbol SCHD, Schwab, US dividend equity ETA?

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[SPEAKER_04]: I look forward to hearing your feedback on the show.

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[SPEAKER_04]: Thank you.

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[SPEAKER_01]: Looking at SCHD, a very popular dividend fund, low expense ratio, the SCC yield 3.2% so solid, not amazing, but for a dividend fund, it's pretty good.

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[SPEAKER_01]: What I always say with any of these dividend ETFs or dividend funds is, most of them are just closet large cap value ETFs.

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[SPEAKER_01]: That's bottom line.

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[SPEAKER_01]: just how they're tilted the type of companies that pay dividends.

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[SPEAKER_01]: It leans towards value type of names.

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[SPEAKER_01]: And that's why if you look at it's exposure to things like technology 19% roughly half of what the overall S&P is.

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[SPEAKER_01]: And then 18% is consumer defensive, which is, is what called consumer staples, 18% there.

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[SPEAKER_01]: Healthcare also, 18%

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[SPEAKER_01]: And then everything else is in the single digits, less than 0.04% in utilities, which is interesting because utilities usually pay nice dividends.

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[SPEAKER_01]: Industrial's only seven, cyclical's only six, financial services nine, real estate zero.

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[SPEAKER_01]: I think there'll be that as well.

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[SPEAKER_01]: So, you know, my issue here is that if you look at, it's three top holdings, that's actually energy's 15%.

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[SPEAKER_01]: Sorry, so that's, that is kind of inflationary asset.

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[SPEAKER_01]: When you're in a inflationary environment, there are three sectors that don't tend to do very well.

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[SPEAKER_01]: Number one is technology typically, now right now that's not happening.

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[SPEAKER_01]: So, you know, there's always kind of anomalies and you're seeing that, you know, the chip cycle right now, it's really driving tech.

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[SPEAKER_01]: forward, but usually multiples come down for technology needs, but one's getting not happening currently.

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[SPEAKER_01]: But we'll happen once one of the reasons why it's usually bad is because the Fed titans into higher inflation and that brings multiples down think 2022 timeframe.

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[SPEAKER_01]: The Fed's not doing that right now.

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[SPEAKER_01]: The Fed's actually mildly stimulative.

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[SPEAKER_01]: And until they start to tighten, you know, tech will probably do relatively well.

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[SPEAKER_01]: But I digress.

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[SPEAKER_01]: Then you get into consumer, defensive, and health care.

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[SPEAKER_01]: And these are two sectors that in many ways are negatively impacted by higher inflation because of higher input costs.

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[SPEAKER_01]: They feel higher energy input costs.

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[SPEAKER_01]: They feel the higher cost of labor because both of those industries have are very labor intensive.

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[SPEAKER_01]: And in public costs, so think of your defensive company, think of consumer staple, think of package food companies, think of cleaning products, things like that.

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[SPEAKER_01]: The input cost of those products go up as well.

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[SPEAKER_01]: So those are sectors that tend to not do very well.

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[SPEAKER_01]: Also, so, and if you look right now, what's been down at the lock over the past few months, healthcare and consumer staples.

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[SPEAKER_01]: So if you look at the overall exposure here, I don't love it.

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[SPEAKER_01]: I really don't.

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[SPEAKER_01]: And you can see that in the performance of this particular fun.

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[SPEAKER_01]: What are we doing this year?

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[SPEAKER_01]: It's up.

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[SPEAKER_01]: I guess it is.

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[SPEAKER_01]: It's up very nice this year.

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[SPEAKER_01]: It's surprising.

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[SPEAKER_01]: Up now I need to emphasize.

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[SPEAKER_01]: I think that's because of what's going on with its largest holding which is Qualcomm.

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[SPEAKER_01]: But last year, go look at last year.

18:26.384 --> 18:29.544
[SPEAKER_01]: I spews up, was it 17% in that range?

18:30.065 --> 18:30.605
[SPEAKER_01]: This is only at 4%.

18:31.874 --> 18:35.476
[SPEAKER_01]: And if you look longer term, 2024 is up 11%, the broader next is up 17.

18:35.496 --> 18:37.858
[SPEAKER_01]: 2023, this is up four and a half, the broader next is up 14.3.

18:37.898 --> 18:40.620
[SPEAKER_01]: 2022, when the market was down big,

18:48.924 --> 18:50.285
[SPEAKER_01]: This is down about 3%.

18:50.345 --> 18:52.507
[SPEAKER_01]: So it definitely held water as lower risk.

18:53.147 --> 18:56.150
[SPEAKER_01]: But I just think you can do better.

18:57.010 --> 18:58.692
[SPEAKER_01]: I would want some utility exposure.

18:58.752 --> 19:00.193
[SPEAKER_01]: I would want some read exposure.

19:00.213 --> 19:02.014
[SPEAKER_01]: I'd want more industrial exposure.

19:03.175 --> 19:04.756
[SPEAKER_01]: So that is my issue.

19:04.816 --> 19:05.437
[SPEAKER_01]: I don't hate it.

19:06.017 --> 19:09.019
[SPEAKER_01]: It gets a three out of five stars for morning star.

19:09.040 --> 19:09.540
[SPEAKER_01]: Three out of five.

19:09.620 --> 19:11.782
[SPEAKER_01]: So not bad, not great.

19:12.422 --> 19:13.503
[SPEAKER_01]: It's just very popular.

19:13.523 --> 19:16.605
[SPEAKER_01]: I just think you can find much better out there.

19:19.971 --> 19:26.696
[SPEAKER_01]: Now from time to time, we get questions via the best talk of best talk podcast review on iTunes.

19:26.737 --> 19:29.999
[SPEAKER_01]: We love those because we get to them quickly.

19:30.440 --> 19:40.628
[SPEAKER_01]: JDC group, give us five stars and say, would you buy now or continue watching MLM, MLM, so remember correctly, this is yeah, Martin.

19:41.918 --> 19:43.499
[SPEAKER_01]: Maritime materials.

19:43.720 --> 19:44.300
[SPEAKER_01]: Okay.

19:44.420 --> 19:50.725
[SPEAKER_01]: If I remember correctly, they make highway salts.

19:52.087 --> 19:52.227
[SPEAKER_01]: No.

19:52.807 --> 19:53.047
[SPEAKER_01]: Oh, no.

19:53.067 --> 19:53.848
[SPEAKER_01]: That's what it's doing.

20:01.858 --> 20:07.222
[SPEAKER_01]: that is distributed, focus on aggregate cement, downstream products, paving services.

20:07.282 --> 20:09.904
[SPEAKER_01]: Okay, so we're in the zone of what I thought it was.

20:09.984 --> 20:10.525
[SPEAKER_01]: Remember what it was?

20:11.065 --> 20:16.669
[SPEAKER_01]: Be cashflow, a billion dollars, $35 billion market cap, decent balance, she return equity is 10%.

20:16.789 --> 20:20.532
[SPEAKER_01]: Eh, not great, not terrible.

20:21.233 --> 20:29.059
[SPEAKER_01]: Long term, this is kind of where it's at, kind of around the 10% return equity level, which once again, not a whole lot to write home about,

20:30.030 --> 20:35.193
[SPEAKER_01]: The chart is just so, so we're able to strengthen 332, certainly not great.

20:36.133 --> 20:38.994
[SPEAKER_01]: He eeg based on forward-looking earnings of $20.81 a 580 $3 stock.

20:39.115 --> 20:54.482
[SPEAKER_01]: Ah, you know, I'm just giving this, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh, eh,

20:55.568 --> 20:57.070
[SPEAKER_01]: The next and best talk will look into the story.

20:57.210 --> 20:58.652
[SPEAKER_01]: Net Worth milestones by age.

20:58.732 --> 21:02.397
[SPEAKER_01]: Why net worth matters more than income from your financial security?

21:02.417 --> 21:05.341
[SPEAKER_01]: We'll get to that story tomorrow, but from, I'm ready for your calls now at 8-8-9-9-sharp.

21:08.091 --> 21:09.472
[SPEAKER_01]: at KPP Financial.

21:10.013 --> 21:12.194
[SPEAKER_01]: Accountability means more than advice.

21:12.895 --> 21:15.076
[SPEAKER_01]: It means we invest alongside you.

21:15.657 --> 21:26.065
[SPEAKER_01]: Through our parallel investing approach, when we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.

21:26.845 --> 21:29.747
[SPEAKER_01]: same day, same price, same percentage.

21:30.428 --> 21:33.631
[SPEAKER_01]: If your portfolio moves, ours does too.

21:34.291 --> 21:36.933
[SPEAKER_01]: That is alignment, that is transparency.

21:37.434 --> 21:39.455
[SPEAKER_01]: That is the KPP difference.

21:40.376 --> 21:45.060
[SPEAKER_01]: Visit investtalk.com to get your free portfolio review.

21:47.937 --> 21:53.982
[SPEAKER_03]: Get ready for an all-new Invest Talk Wealth webinar beyond the yield.

21:54.382 --> 21:57.184
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21:57.665 --> 22:01.528
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22:02.068 --> 22:06.292
[SPEAKER_03]: Learn more and register now at Invest Talk.com.

22:15.066 --> 22:37.140
[SPEAKER_01]: A lot of confused by it, especially since it's peak in early February, when there was just a lot of, forver, a lot of positive and sentiment after a very good year, not to ship, not not, not shocking to see it pull back, it's pull back a little bit more, I think, than most of expected.

22:37.920 --> 22:41.242
[SPEAKER_01]: And it's correlated with what's happening in the Middle East.

22:41.262 --> 22:42.043
[SPEAKER_01]: Now a lot of

22:44.783 --> 22:50.245
[SPEAKER_01]: Well, higher inflation should be a tailwind for gold prices.

22:51.045 --> 22:57.947
[SPEAKER_01]: Now that's usually the case when central banks are also neutral to devilish.

22:58.747 --> 23:02.148
[SPEAKER_01]: But over the past couple of months, they become a little more hawkish.

23:02.168 --> 23:08.350
[SPEAKER_01]: That's part of it here where expectations for one red fed rate a year end is at 41%.

23:11.255 --> 23:15.397
[SPEAKER_01]: 14% chance they'll be two rate hikes and a two percent chance they'll be three rate hikes.

23:16.177 --> 23:23.220
[SPEAKER_01]: The big move from just a couple of months ago one month ago there's a 12% chance of a cut and only a 9% chance of a rate hike.

23:24.200 --> 23:25.600
[SPEAKER_01]: That's first the dollar up a little bit.

23:26.801 --> 23:30.462
[SPEAKER_01]: Once again, those are short term, head widths.

23:31.863 --> 23:37.145
[SPEAKER_01]: But to me the bigger headwind does actually have to do directly with what's happening in the Middle East because

23:41.199 --> 23:43.360
[SPEAKER_01]: Middle East countries that are big oil exporters.

23:44.501 --> 23:45.301
[SPEAKER_01]: Oh, back show we say.

23:46.621 --> 23:51.444
[SPEAKER_01]: They are not getting the revenue that they normally do from their exports.

23:51.944 --> 23:57.346
[SPEAKER_01]: So what are they doing instead to keep themselves afloat with their selling assets?

23:58.787 --> 24:00.108
[SPEAKER_01]: What assets do they typically hold?

24:00.188 --> 24:02.449
[SPEAKER_01]: Well, a lot of gold.

24:02.469 --> 24:04.490
[SPEAKER_01]: A lot of treasuries.

24:05.250 --> 24:05.810
[SPEAKER_01]: Things like that.

24:11.287 --> 24:14.268
[SPEAKER_01]: So that's very underappreciated in this market.

24:16.068 --> 24:21.690
[SPEAKER_01]: Those more catalysts, potentially, for gold going forward, you have big jobs that are coming up next week.

24:23.030 --> 24:38.455
[SPEAKER_01]: But overall once this geopolitical situation stabilizes at some point, because it will come to a head and there'll be probably some resolution, that to me will be the catalyst for an unpinning of gold prices.

24:39.516 --> 24:43.078
[SPEAKER_01]: that really keeps the structural theme intact.

24:43.178 --> 24:43.518
[SPEAKER_01]: Why?

24:44.119 --> 24:47.140
[SPEAKER_01]: Because central banks continue to be net buyers.

24:47.180 --> 25:03.469
[SPEAKER_01]: And this is the underappreciated or often forgotten aspect of what's going on, what has gone on really since the start of the Ukraine war in 2022 when Washington, under the Biden administration confiscated

25:08.598 --> 25:09.218
[SPEAKER_01]: in the treasuries.

25:10.399 --> 25:12.279
[SPEAKER_01]: So Central Bank started to diversify.

25:14.640 --> 25:19.642
[SPEAKER_01]: And as of now, gold is overtaken US government bonds as the world's top reserve asset.

25:20.803 --> 25:24.364
[SPEAKER_01]: Counts were 27% of all global central bank reserve assets.

25:24.824 --> 25:28.566
[SPEAKER_01]: That was the end of last year, it's up 20% year over year.

25:29.686 --> 25:33.728
[SPEAKER_01]: While treasuries fell from 25% of global central bank assets to 22%.

25:35.573 --> 25:38.935
[SPEAKER_01]: Euro-denominated assets unchanged at 15%.

25:38.975 --> 25:40.716
[SPEAKER_01]: So that's clearly what's happening here.

25:40.736 --> 25:44.398
[SPEAKER_01]: It's not like they're selling all these other paper assets to buy gold.

25:44.418 --> 25:52.762
[SPEAKER_01]: They're just selling dollar-domin assets and mainly treasury's to buy this gold.

25:53.902 --> 25:57.284
[SPEAKER_01]: Now the world's central banks now hold 36,000 tons of gold.

26:00.363 --> 26:08.468
[SPEAKER_01]: Almost as much as during the peak of the Bretton Woods, era when the U.S. dollar was pegged to bullion.

26:08.488 --> 26:12.470
[SPEAKER_01]: And foreign exchange rates to other countries were fixed to gold.

26:13.311 --> 26:16.993
[SPEAKER_01]: Back then, central banks helped 38,000 tons of gold.

26:17.013 --> 26:20.575
[SPEAKER_01]: So we're approaching those levels, probably pass it, this year.

26:21.656 --> 26:27.500
[SPEAKER_01]: Now even with the big run-up in gold prices last year, central banks,

26:28.558 --> 26:30.458
[SPEAKER_01]: actually reduce their purchases.

26:31.259 --> 26:39.420
[SPEAKER_01]: Still buying a lot, 8 or 50 tons last year, but it's after three years in a row of net purchases of more than 1,000 tons per year.

26:40.601 --> 26:43.921
[SPEAKER_01]: Who are the biggest buyers since the Ukraine War?

26:45.242 --> 26:47.182
[SPEAKER_01]: China, Poland, Turkey, and India?

26:48.302 --> 26:50.803
[SPEAKER_01]: Who's the single biggest buyer last year?

26:50.823 --> 26:52.623
[SPEAKER_01]: You're surprised to hear this.

26:53.103 --> 26:55.404
[SPEAKER_01]: It was actually the stable coin to Heather.

26:56.153 --> 26:59.097
[SPEAKER_01]: They purchase more than 100 tons of gold.

27:00.638 --> 27:15.936
[SPEAKER_01]: Now, despite Turkey being one of the biggest accumulators last year, they actually were net sellers, well, say not so, they loaned or sold 130 tons of gold after the Ukraine war, and that goes to show you.

27:16.958 --> 27:20.860
[SPEAKER_01]: Why gold is under pressure over the past few months?

27:21.460 --> 27:23.261
[SPEAKER_01]: It's just because of the Ukrainian war.

27:23.601 --> 27:32.164
[SPEAKER_01]: Countries like Turkey that need liquidity, need access to capital and a lot of them are selling their gold.

27:32.184 --> 27:39.607
[SPEAKER_01]: So to me, this is more of a short-term blip but the long-term structural tailwinds remain in play.

27:40.448 --> 27:45.390
[SPEAKER_01]: Let's pivot back to another listener question right now from 80 and you mentioned.

27:46.028 --> 27:48.469
[SPEAKER_06]: Hi, Johnson from New York, thank you for all that you do.

27:48.489 --> 27:57.974
[SPEAKER_06]: I just would like to go over the ETFE, U-A-D, it's an aerospace ETF, mostly focused on Europe.

27:58.154 --> 28:03.417
[SPEAKER_06]: I got it when the war started out in Iran going back to

28:04.233 --> 28:10.161
[SPEAKER_06]: Paul going to AI and think about what you want to be a good ETF to invest in and AI gave me this and I know it's too late.

28:10.842 --> 28:19.453
[SPEAKER_06]: I think I learned my lesson that but I'm looking to free up some positions and I was thinking about selling this one with the current environment right now.

28:19.553 --> 28:21.176
[SPEAKER_06]: I know it's important to be diversified.

28:21.316 --> 28:22.217
[SPEAKER_06]: I already have.

28:22.754 --> 28:28.300
[SPEAKER_06]: some ETFs and other foreign equities such as South Korea and Brazil.

28:28.801 --> 28:37.550
[SPEAKER_06]: Should I keep this ETF in my portfolio or should I be able to unload this and use this capital for somewhere else?

28:37.751 --> 28:38.812
[SPEAKER_06]: Thank you for all that you do.

28:38.992 --> 28:39.613
[SPEAKER_06]: Have a great day.

28:39.733 --> 28:39.993
[SPEAKER_06]: Bye.

28:40.914 --> 28:41.655
[SPEAKER_01]: Oh, this is great.

28:41.755 --> 28:44.178
[SPEAKER_01]: I love this call because then we've said it before.

28:45.531 --> 28:50.154
[SPEAKER_01]: AI is not good at picking what's telling you what to invest in.

28:50.234 --> 28:57.398
[SPEAKER_01]: It's not, it's historically, it just go, I've seen every study of this, and it's timing is horrible.

28:58.118 --> 29:08.844
[SPEAKER_01]: Because it thinks, okay, so what you have to understand about AI is that it's gonna give you a middle of the road answer.

29:09.565 --> 29:10.846
[SPEAKER_01]: It's gonna say it confidently

29:16.111 --> 29:19.513
[SPEAKER_01]: It's a balance between two extremes, potentially.

29:20.034 --> 29:25.838
[SPEAKER_01]: It's giving you the generally accepted answer for a bunch of different things.

29:26.458 --> 29:36.025
[SPEAKER_01]: It's giving you the base answer for how to do X, Y, and Z, or whatever you're querying it for.

29:36.845 --> 29:43.770
[SPEAKER_01]: But what that means is it's not gonna give you anything that interesting or really good when it wants to give you investment advice.

29:44.917 --> 29:48.239
[SPEAKER_01]: You do not take AI's advice because look at this EAUD.

29:49.360 --> 29:52.262
[SPEAKER_01]: When did the Iran War start end of February?

29:52.722 --> 29:55.144
[SPEAKER_01]: This was trading at what $46 per share.

29:56.384 --> 30:03.249
[SPEAKER_01]: And basically since the beginning of the Iran War, this has been trending a lower and lower at the close today around 36, 39 in change.

30:04.189 --> 30:08.792
[SPEAKER_01]: So it's down, what are 12, 15% and what's the market name?

30:08.812 --> 30:09.453
[SPEAKER_01]: It's obviously up.

30:10.218 --> 30:13.146
[SPEAKER_01]: So, yes, this, you should sell this, this is in the downtrend.

30:13.567 --> 30:16.836
[SPEAKER_01]: This clearly peaked out back in September of

30:17.822 --> 30:19.182
[SPEAKER_01]: was actually a October last year.

30:19.523 --> 30:21.663
[SPEAKER_01]: And it's just been losing momentum ever since.

30:21.723 --> 30:24.744
[SPEAKER_01]: It tried to break out again in January, failed.

30:25.204 --> 30:26.585
[SPEAKER_01]: And then had a little bump up again.

30:26.605 --> 30:27.825
[SPEAKER_01]: It started the Iran war.

30:28.365 --> 30:29.205
[SPEAKER_01]: But didn't make a new high.

30:29.225 --> 30:29.986
[SPEAKER_01]: And that was another tell.

30:30.846 --> 30:33.927
[SPEAKER_01]: And this is, this is where it goes back to hiring a professional.

30:33.947 --> 30:34.967
[SPEAKER_01]: I could have told you this.

30:35.067 --> 30:39.368
[SPEAKER_01]: If you called me on the day of Iran war and said, should I buy this?

30:40.129 --> 30:41.329
[SPEAKER_01]: And I looked at this chart.

30:42.638 --> 30:44.979
[SPEAKER_01]: I would be like, why isn't this breaking up?

30:45.619 --> 30:56.064
[SPEAKER_01]: You would think that what's going on in the Middle East, and in Ukraine would drive more investment in European defense stocks.

30:58.285 --> 30:59.565
[SPEAKER_01]: So it should be breaking out.

31:00.345 --> 31:02.766
[SPEAKER_01]: But this already had a move in 2020.

31:02.846 --> 31:06.688
[SPEAKER_01]: Let's see, it came out in fall of 2004.

31:08.189 --> 31:09.389
[SPEAKER_01]: Had a good move last year.

31:10.229 --> 31:11.370
[SPEAKER_01]: And once again, peaked out in the fall.

31:13.446 --> 31:15.788
[SPEAKER_01]: So to me, the story is Wayne, the momentum's waning.

31:15.828 --> 31:21.271
[SPEAKER_01]: The clothes are waning into this sub-sector.

31:22.212 --> 31:36.401
[SPEAKER_01]: And it's a lesson, and this is a lesson I've learned from 25 years of doing this, which is, when there is good news, logically, right, you look at a headline, you say, well, that should be good for this particular sector or this company or whatever.

31:37.102 --> 31:41.905
[SPEAKER_01]: And the stock is near highs, it moves up, but it doesn't really break out.

31:42.893 --> 31:44.754
[SPEAKER_01]: That is telling you, all the money is in.

31:45.834 --> 31:50.875
[SPEAKER_01]: When something is rallied, it has good news, but it does not make new highs.

31:51.835 --> 31:52.316
[SPEAKER_01]: It's over.

31:52.936 --> 31:53.536
[SPEAKER_01]: That's the end.

31:53.916 --> 31:56.017
[SPEAKER_01]: And you could say that in the other way.

31:56.657 --> 31:58.717
[SPEAKER_01]: What's up against a long downtrending software?

31:59.518 --> 32:03.699
[SPEAKER_01]: Recently, starting to get a little bit, why, because everyone's sold is gonna sell.

32:04.299 --> 32:05.399
[SPEAKER_01]: The sentiment is that bad.

32:06.159 --> 32:07.720
[SPEAKER_01]: There's not many weekends left.

32:08.560 --> 32:13.706
[SPEAKER_01]: And when you get bad news and doesn't go down more, well, that's, that's, that's what, that, the selling's probably over.

32:14.347 --> 32:16.069
[SPEAKER_01]: No more, we can, they're all gone.

32:16.569 --> 32:18.411
[SPEAKER_01]: So this is a fantastic lesson.

32:18.712 --> 32:22.296
[SPEAKER_01]: Everybody out there should understand.

32:22.996 --> 32:24.818
[SPEAKER_01]: It's why we say don't follow the headlines.

32:25.639 --> 32:26.721
[SPEAKER_01]: Follow price action.

32:27.381 --> 32:28.222
[SPEAKER_01]: Follow fundamentals.

32:29.046 --> 32:32.648
[SPEAKER_01]: The headlines more often than not will lead you astray.

32:33.008 --> 32:35.429
[SPEAKER_01]: They will not lead you to a good investment.

32:35.770 --> 32:39.411
[SPEAKER_01]: And AI certainly will not lead you to a good investment.

32:39.431 --> 32:48.696
[SPEAKER_01]: Now, it can help you with research, just testing ideas and understanding why things may be happening, et cetera, shirt.

32:49.617 --> 32:55.420
[SPEAKER_01]: But it's up to you, the human being, to use your own brain.

32:57.089 --> 32:59.810
[SPEAKER_01]: And not blindly follow the lemming.

32:59.830 --> 33:01.971
[SPEAKER_01]: Remember, that's what's kind of getting the lemmings.

33:02.212 --> 33:03.852
[SPEAKER_01]: It's getting the sentiment of the lemmings.

33:04.253 --> 33:07.494
[SPEAKER_01]: That's what an AI, AI, chatbotter are designed to do.

33:08.274 --> 33:12.897
[SPEAKER_01]: And sometimes the letterings are fine for most things, but not when it comes to investing.

33:13.617 --> 33:17.879
[SPEAKER_01]: Could Dr. Sammy and San Francisco looking at salesforce CRM.

33:18.780 --> 33:20.581
[SPEAKER_00]: Hey, thanks just in part taking my call.

33:22.147 --> 33:34.954
[SPEAKER_00]: would like to get your thoughts on CRM, it hit the low of 163 earlier this year and it has bounced back a little bit and now it looks like it's going back lower.

33:36.215 --> 33:41.078
[SPEAKER_00]: Do you think this is a good time to get in or start with longer to bind for the long term?

33:41.938 --> 33:42.579
[SPEAKER_01]: Here's my thing.

33:43.439 --> 33:43.479
[SPEAKER_01]: In

33:47.463 --> 33:53.346
[SPEAKER_01]: Spectacular losers from AI, companies that will just get destroyed.

33:55.027 --> 33:57.708
[SPEAKER_01]: There's some that will muddle through, maybe it'll integrate to me.

33:59.289 --> 34:04.752
[SPEAKER_01]: Features, there'll be some things that AI can and can't replicate the deal, okay.

34:05.412 --> 34:09.995
[SPEAKER_01]: There's others that I think, especially niche players that need great hardware,

34:11.163 --> 34:20.585
[SPEAKER_01]: That will, those will be, I think, more protected from AI, because it won't be as easy to develop hardware, the integrates with software, et cetera.

34:21.865 --> 34:25.505
[SPEAKER_01]: Those to me, I think, we're going to be the bigger winners long term.

34:27.346 --> 34:38.188
[SPEAKER_01]: But to me, Sierra, this is the reason it's called, the Salesforce is not a SLF, yeah, that's not the symbol.

34:38.208 --> 34:39.228
[SPEAKER_01]: I sell that for something, right?

34:42.122 --> 34:49.806
[SPEAKER_01]: client relationship management software, that's what sales force does and they've been the best in the business for a long time.

34:51.007 --> 34:51.848
[SPEAKER_01]: But here's the issue.

34:52.268 --> 34:54.509
[SPEAKER_01]: There's no hardware connected to it.

34:55.670 --> 34:58.371
[SPEAKER_01]: It's an extremely easy thing to replicate.

34:59.592 --> 35:01.273
[SPEAKER_01]: It's just a database in the back end.

35:02.874 --> 35:04.755
[SPEAKER_01]: Really what CRM's are is the database.

35:06.876 --> 35:08.097
[SPEAKER_01]: Probably one of the easiest

35:10.962 --> 35:17.726
[SPEAKER_01]: And you can create one on your own and bet yourself with the Cloud Code, with a decent programmer.

35:19.407 --> 35:20.047
[SPEAKER_01]: Not difficult.

35:21.949 --> 35:27.532
[SPEAKER_01]: So to me, Salesforce does look relatively cheap on the surface.

35:29.513 --> 35:35.237
[SPEAKER_01]: But I think these and some of the other names, big names in the software patch,

35:38.373 --> 35:42.838
[SPEAKER_01]: And this one screams value trap bigger than all of them to me.

35:45.080 --> 35:46.261
[SPEAKER_01]: So yes, it will get a balance.

35:46.301 --> 35:48.844
[SPEAKER_01]: It got a balance on the recent kind of move and software.

35:50.946 --> 35:51.767
[SPEAKER_01]: But I don't buy this.

35:52.247 --> 35:54.189
[SPEAKER_01]: I just think this will be a melting ice cube.

35:54.349 --> 36:00.796
[SPEAKER_01]: As more and more companies will vibe code their own database their own CRM.

36:02.231 --> 36:06.654
[SPEAKER_01]: that fits what they need even more and they don't have to pay thousands of dollars per seat.

36:07.075 --> 36:08.836
[SPEAKER_01]: I have some of that works for Salesforce.

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[SPEAKER_01]: And they're selling more AI software and add-ons to what they're doing, but they're losing seats, they're cutting seats.

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[SPEAKER_01]: And so the net net is actually flat to negative on a lot of their clients.

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[SPEAKER_01]: Cause they're losing seats, they're losing people that are getting replaced by AI.

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[SPEAKER_01]: So to me, this is a value trap, I don't touch it.

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[SPEAKER_01]: Plenty of the software names that I think are attractive.

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[SPEAKER_01]: There it comes our last break.

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[SPEAKER_01]: I can still take your live calls at 8.89 in chart.

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[SPEAKER_03]: You've got finance and investment questions, and the invest dog phone lines never closed.

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[SPEAKER_03]: Call anytime, 88899 chart.

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[SPEAKER_08]: Hi, this is Dennis from East Coast of Iowa.

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[SPEAKER_08]: I'm calling about uranium royalty company.

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[SPEAKER_08]: You are OY.

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[SPEAKER_08]: Either as a volatility trade or a long-term investment.

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[SPEAKER_08]: There's a volatility trade with hope to harvest, maybe 12% to three, four times.

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[SPEAKER_08]: sort of just a fraction of a position in my account, but I'm also interested in it as a possible long-term investment.

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[SPEAKER_08]: I like the space, hopefully that's some room for real.

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[SPEAKER_08]: I'll listen to your answer on the podcast, thank you.

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[SPEAKER_01]: are looking at you are a while uranium royalty corp this is a very small cap name five hundred twenty nine million dollar market cap they operate an expiration company engage in acquiring and assembling a portfolio of royalties and investing companies exposure to uranium and physical uranium so they go and invest in uranium mines a lot of

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[SPEAKER_01]: junior explorers, things like that.

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[SPEAKER_01]: A lot of these type of names in the gold and silver patch, so they're trying to replicate kind of that model where they're not actually doing the exploration themselves, but they are, they're investing.

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[SPEAKER_01]: They're taking equity effectively positions in a bunch of different minds and some work out, some won't.

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[SPEAKER_01]: ever long-term they hope that the ones that will work out counter the ones that don't and net net they have good positive cash flow in returns.

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[SPEAKER_01]: But that's the hope because the reality is they're trying to increase one percent.

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[SPEAKER_01]: Pre-cache flow is pretty good at about 28 million.

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[SPEAKER_01]: That's a all-time high on a enterprise value of 464 million.

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[SPEAKER_01]: So you get dilution, last year they lost three cents.

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[SPEAKER_01]: This year it's supposed to make two cents and next year it's supposed to make a penny.

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[SPEAKER_01]: The $3.61, so it's effectively a penny stock, but it's trading at pretty ridiculous, multiple 300 times.

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[SPEAKER_01]: The charts okay, the sector has been going up, but you're just getting diluted away because they're just issuing more and more shares.

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[SPEAKER_01]: I need to use my issue with the junior miners in general in the yearning space.

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[SPEAKER_01]: Is there's the big gatties?

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[SPEAKER_01]: There's the casada problem from saying it correctly, as well as camico, at the Canada.

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[SPEAKER_01]: Those are the two heavy weights in the industry.

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[SPEAKER_01]: And, especially camico, I know camico well, they have a lot of supply that is just not being produced because it's not economical.

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[SPEAKER_01]: Not these prices, but as prices go up, they can unlock some of that supply

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[SPEAKER_01]: and capitalize on that by selling more pounds of uranium so yes they could they could actually these if the junior miners could start to produce but historically across the mining space whether you're talking about uranium platinum gold silver whatever it is most of them are just money pits unintended

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[SPEAKER_01]: They're just investing, and they're not getting much out.

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[SPEAKER_01]: So I don't see the argument here of buying something like that, except if you want really high kind of pricing leverage within this space.

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[SPEAKER_01]: I've passed on it.

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[SPEAKER_01]: I want the bigger names.

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[SPEAKER_01]: I don't want to mess with this small name.

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[SPEAKER_01]: We have one more call to answer.

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[SPEAKER_05]: But in a couple years back, just looking at the future of the future of the stock, might be a whole door down with more of the hearing of your answer on the podcast, and thank you for all you do.

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[SPEAKER_01]: Looking at AstraZeneca AZN is a symbol, and we actually own this for clients.

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[SPEAKER_01]: So we like it, revenues of 8% expected this year, earnings up 12, earnings up, starts to be at 14% next year to $11.66 on a $176 stock, about a mid-teens multiple,

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[SPEAKER_01]: out of the UK, so get foreign exposure.

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[SPEAKER_01]: They have good pipeline.

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[SPEAKER_01]: It's one of the best farm and names out there.

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[SPEAKER_01]: That's why we own AstraZeneca pulled back a little bit as of late on the stronger dollar on, I think it was a bit overbought and needed to come back in, but

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[SPEAKER_01]: The longer-term uptrend remains intact, so I'd be buying AstraZeneca on this pullback.

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[SPEAKER_01]: That's what we're doing for clients.

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[SPEAKER_01]: Now I'm just inclined reminding you about KAPP Financial's parallel investing when we make a trade for our clients.

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[SPEAKER_01]: make the same trade for a self-same day, same price, same percentage, no front running.

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[SPEAKER_01]: No special treatments, what that means, we invest right alongside our clients.

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[SPEAKER_01]: It's very different than most of the big wirehouses.

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[SPEAKER_01]: We show the same risk and potential for success and you can learn more by heading for

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[SPEAKER_01]: heading to investtalk.com.

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[SPEAKER_01]: Please show your friends a family about a free podcast download if you find any time that iTunes spotify or over on our YouTube channel as well, be sure to rate and review us on iTunes, and heads up our next new, the next wealth webinar is coming up on Tuesday, June 30th, from 12th to 1pm.

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[SPEAKER_01]: Civic time, the title is beyond the yield how to invest for your income meets.

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[SPEAKER_01]: Independent thinking should success.

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[SPEAKER_01]: This is the best stop.

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[SPEAKER_01]: Good night.

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