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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_04]: Good afternoon fellow investors and welcome back to Invest Talk.

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[SPEAKER_04]: This is our... What are we?

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[SPEAKER_04]: Thursday, Thursday.

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[SPEAKER_04]: June 11th, 2026 edition of the best thought, and excited for this hour to be with you and answer, whatever's on your mind.

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[SPEAKER_04]: So don't hesitate to reach out and give us a call.

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[SPEAKER_04]: That's the main way we touch base with you is really trying to gather your thoughts, your worries, your considerations for investments, all of that.

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[SPEAKER_04]: I always say when you bring those forward, you're helping the rest of the investor communities.

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[SPEAKER_04]: Well, because I guarantee someone else out there is thinking, that's the same question or something similar.

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[SPEAKER_04]: And I try to broaden out all my questions, all the answers you've used me to.

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[SPEAKER_04]: apply to the most amount of investment listeners as well.

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[SPEAKER_04]: So even if it's one particular stock, I try to talk about the sector as a whole and analyze companies and general all of that and you can take something away.

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[SPEAKER_04]: So that's why when you make a phone call, you're helping yourself and everybody else.

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[SPEAKER_04]: So that's what's this hour is about.

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[SPEAKER_04]: Whatever is on your mind, don't hesitate to reach out.

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[SPEAKER_04]: Once again, 888-99 chart is the number.

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[SPEAKER_04]: Now we're ditching times, very interesting times, with what's going on in the Middle East, obviously politically in America and abroad.

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[SPEAKER_04]: And then AI, AI certainly is a driving force of what's going on in the markets as well as the economy.

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[SPEAKER_04]: So how is that evolving?

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[SPEAKER_04]: We're always keeping you abreast of that as well.

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[SPEAKER_04]: But it's some news today, which will get to you in a little bit and how much I really buy it, that cause the market to rally.

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[SPEAKER_04]: So we'll unpack that and much, much more.

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[SPEAKER_04]: So once again, this show is about you and whatever is on your mind.

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[SPEAKER_04]: So don't hesitate to give us a call.

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[SPEAKER_04]: Your heads up, our next World Webinar is set for Tuesday, June 30th, 12th, 1PM.

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[SPEAKER_04]: So the time that it was beyond the yield, how to invest for your income.

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[SPEAKER_04]: It needs, and you can register over at Invest Talk.

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[SPEAKER_04]: dot com now just to be able to talk about today's mark performance and run down the show topics but as usual, we'll tackle this first call question now.

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[SPEAKER_07]: I invest talk to this as well from Chicago.

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[SPEAKER_07]: I was calling about Alexandria real estate equities.

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[SPEAKER_07]: Picker ARE.

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[SPEAKER_07]: I bought it a while back.

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[SPEAKER_07]: I've been losing on it.

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[SPEAKER_07]: I was just wondering what you guys have thought about it.

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[SPEAKER_07]: Should I cut my losses or hang on?

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[SPEAKER_07]: I'll be listening on a show.

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[SPEAKER_07]: Thank you.

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[SPEAKER_04]: Looking at Alexander real estate, read Alexandria real estate equities, excuse me, the read, they rent to life science companies, agriculture, ag tech companies, and technology tenants.

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[SPEAKER_04]: But it's a, it's a read that's been struggling.

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[SPEAKER_04]: Funds for operation, peaked at $9.47 in 2024, fell five percent last year to $9.00 in a penny,

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[SPEAKER_04]: this year, funds for operations, so it's going to be down to $6.38, then $5.72 next year.

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[SPEAKER_04]: Clearly, the trend is not positive.

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[SPEAKER_04]: The profitability, return equity, and turning out of the capital, turn asset, they're all negative.

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[SPEAKER_04]: And the dividend has already been cut from $1.32 down to 72 cents.

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[SPEAKER_04]: That happens.

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[SPEAKER_04]: late last year.

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[SPEAKER_04]: This is a perfect example of a value trap or more importantly, something we'll talk about later on this month and our with webinar, it's

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[SPEAKER_04]: an income trap there are a lot of those out there at any given time a lot of you might look at this and still say well it's a new this five and a half percent it was much higher was close to eight percent turning 12 months but you don't want to just focus on the yield you want to focus on the quality of the assets quality the business the cash flows all of that and clearly

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[SPEAKER_04]: Everything in that department has been headed into the wrong direction.

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[SPEAKER_04]: And they have a lot of debt about $16 billion in that debt.

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[SPEAKER_04]: No, it's a real estate company to read.

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[SPEAKER_04]: So it's going to have some leverage there.

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[SPEAKER_04]: But one of the biggest issues with REITs is that because they require to pay up to 80 plus percent of their

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[SPEAKER_04]: cash flow to shareholders, because it's the past through entity, they have little left over to repair their balance sheet when maybe they make a mistake.

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[SPEAKER_04]: And that's what you're seeing here.

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[SPEAKER_04]: So you might be down, but you can be down a lot more.

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[SPEAKER_04]: Now we'll say near term, it is relatively bullish.

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[SPEAKER_04]: I think it has more upside in the short term, but I would be looking for an exit.

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[SPEAKER_04]: I would be looking for an exit for this name.

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[SPEAKER_04]: You can

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[SPEAKER_04]: because of the leverage because of the trajectory of the funds from our operation.

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[SPEAKER_04]: I'm not quick to do it, but like I said, I'd be looking for an exit.

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[SPEAKER_04]: This is not a long term hold for me.

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[SPEAKER_04]: No way to grow a show yesterday.

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[SPEAKER_04]: We looked into this story.

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[SPEAKER_04]: Is the feds next move a rate hike?

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[SPEAKER_04]: What a strong job.

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[SPEAKER_04]: Report means for your portfolio.

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[SPEAKER_04]: We also answer questions on PayPal.

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[SPEAKER_04]: Holdings as well as, yeah, PayPal.

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[SPEAKER_04]: And if you happen to miss it, go check it out.

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[SPEAKER_04]: Best way to get every show is to follow

05:33.838 --> 05:38.022
[SPEAKER_04]: Now we have a lot of ground to cover over the next 45 minutes or so in time permitting we'll get to all of it.

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[SPEAKER_04]: Our main focus point is about the Florida home insurance market reformic we could reshape the entire insurance market.

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[SPEAKER_04]: It's pretty dramatic.

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[SPEAKER_04]: It's called torque reform and it's having a large impact and that could spread across the industry.

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[SPEAKER_04]: So we'll take a look at that.

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[SPEAKER_04]: We also have other topics on the docket.

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[SPEAKER_04]: One is in regards to SpaceX and the IPO tomorrow, but what companies are set to lose the most with this listing?

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[SPEAKER_04]: Also, the treasury is issuing about a half a trillion dollars a week in T-Bills, but what problems could that be building within the system when they're doing that?

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[SPEAKER_04]: Then, lastly, if we have time, factory gate prices in China are at their fastest or growing at their fastest rate in almost four years, what will that ultimately mean for our inflation?

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[SPEAKER_04]: Picture.

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[SPEAKER_04]: We also have voice bank calls for answer.

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[SPEAKER_04]: One is on VBR, the Vanguard Smallcat Value Index, and the other is Berkshire Halfway Berkshire B.

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[SPEAKER_04]: We have some questions that came in via the comment section over on the in Best Talk YouTube channel.

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[SPEAKER_04]: Of course, so we'll be answering some of those.

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[SPEAKER_04]: But we're going to a quick break.

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[SPEAKER_04]: So please remember you can call any time and leave your question on the investor's talk voice bank or if you listen via our live stream or possibly an name told 20 to be an area you can call right now at 88899 chart.

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[SPEAKER_04]: Up next, they'll comment on today's market activity.

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[SPEAKER_03]: This is Invest Talk, now closing in on 63 million downloads, and Justin Klein is here taking your questions live.

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[SPEAKER_03]: 88899 chart.

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[SPEAKER_04]: As always, let's go take a look at today's market.

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[SPEAKER_04]: It was a bounce back day after

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[SPEAKER_04]: While we can some Friday, pause day and Monday, sell off on Tuesday, continued weakness yesterday, especially late in the day.

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[SPEAKER_04]: And then today, we had a little bit of strength early.

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[SPEAKER_04]: Then the market rolled over and turned briefly negative of the negative five member correctly on the S&P.

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[SPEAKER_04]: But then late in the day, we had, President Trump say, there's an arrandial.

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[SPEAKER_04]: Excuse me, if you've heard that one before.

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[SPEAKER_04]: I personally am not really buying it.

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[SPEAKER_04]: To me, the announcement was,

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[SPEAKER_04]: All one sided, it said all the countries that were on board, conspicuously left off one and that was Iran.

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[SPEAKER_04]: So we'll see if this actually comes a fruition, how many times is this now, that they say as a video, all that.

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[SPEAKER_04]: I'm calling me skeptical, let's just say that.

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[SPEAKER_04]: But nonetheless, you had a bounce back in the major indices, S&P was up about one and three quarters percent and as that was up about two and a half percent.

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[SPEAKER_04]: on the day.

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[SPEAKER_04]: You had oil as you would expect down to oil finished at, where were we?

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[SPEAKER_04]: Who down to 0.6%?

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[SPEAKER_04]: Think we're below 80s?

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[SPEAKER_04]: So over down 1.1, dollar index was down 0.3, gold finished down 0.5.

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[SPEAKER_04]: If you're looking at, I think those commodity markets close a little early, and then later in the day when you have the deal announced, both of them rallied considerably.

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[SPEAKER_04]: Bitcoin futures were up to 0.8% on the day WTI, like I said down 2.5, you had yields down eight to 10 basis points across the curve.

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[SPEAKER_04]: So pairing expectations for Fed tightening, that's the situation we're in right now.

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[SPEAKER_04]: There's going to be a lot of volatility.

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[SPEAKER_05]: Until this is truly resolved, truly resolved.

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[SPEAKER_04]: After the battle, we had some big earnings announcement from the likes of Adobe.

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[SPEAKER_04]: So we'll get some some more news there.

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[SPEAKER_04]: And tomorrow is SpaceX, SpaceX's debut.

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[SPEAKER_04]: That will garden your most of the headlines overall.

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[SPEAKER_04]: But...

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[SPEAKER_04]: Well, we watching, do we truly get a resolution of what's gone in Middle East through the weekend?

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[SPEAKER_04]: I'm not holding my breath.

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[SPEAKER_04]: Let's roll into another fresh listen a question from eight to eight, 99 chart.

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[SPEAKER_09]: Hi, Justin and Luke.

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[SPEAKER_09]: I would just love your opinion on ticker Burke B.

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[SPEAKER_09]: In a taxable brokerage account, I've been looking at it for quite a while now.

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[SPEAKER_09]: And it seems tax efficient that it doesn't have a dividend.

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[SPEAKER_09]: good news there.

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[SPEAKER_09]: And then also just curious about your valuation of it at the current levels.

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[SPEAKER_09]: It seems like it's at a decent discount, especially with the cash that they have on hand.

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[SPEAKER_09]: But would love your insight there.

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[SPEAKER_09]: And for percentage of portfolio, do you view this more as an ETF where you could

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[SPEAKER_09]: You know, potentially go to 10, 15 plus percent of your portfolio.

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[SPEAKER_09]: Or do you truly view this as a standalone company and recommend not going above kind of that three to five percent threshold that I know is typical?

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[SPEAKER_09]: All right, I'll look forward to the answer on the podcast.

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[SPEAKER_09]: Thanks again.

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[SPEAKER_09]: Bye bye.

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[SPEAKER_04]: These are a lot of great questions, a lot of great questions.

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[SPEAKER_04]: I'll answer that last one.

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[SPEAKER_04]: First, which is, do you view it as an individual company or more like a fund?

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[SPEAKER_04]: a little more grace as a fund because it does have a diversity of businesses from industrial names to railroads to the insurance side of the business with GICO.

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[SPEAKER_04]: and then the portfolio of mega cap stocks or blue chip stocks that they own as well.

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[SPEAKER_04]: So I would be willing to go above the 5% threshold.

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[SPEAKER_04]: What I go all the way to 15 to 20 probably not, probably around the 10% mark is where I'd keep it.

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[SPEAKER_04]: The reason is because they're still risk from the new management team that they will not perform up to Warren's expectations.

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[SPEAKER_04]: That could happen.

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[SPEAKER_04]: There's little track record there that this

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[SPEAKER_04]: group of new leaders within Berkshire will be as good as stewards of capital as Warren had been.

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[SPEAKER_04]: Therefore, there's that key man risk that still does matter even if their businesses are a bit more diversified.

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[SPEAKER_04]: So I like that.

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[SPEAKER_04]: Try to really do the other questions.

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[SPEAKER_04]: Oh, valuation.

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[SPEAKER_04]: Well, if you go look at something like enterprise value either you're right around 10, which is on the low end.

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[SPEAKER_04]: frankly.

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[SPEAKER_04]: So I kind of like it here.

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[SPEAKER_04]: It's been underperforming.

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[SPEAKER_04]: I think mainly because people are chasing sexier names, but what's interesting is as of late it's starting to outperform.

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[SPEAKER_04]: So these are the type of actually names you would want to own in a more risk-off environment.

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[SPEAKER_04]: But I understand that it's going to lag when things are in the market, the market are very good and people are chasing growth stocks.

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[SPEAKER_04]: We could have seen a reflection on a Friday.

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[SPEAKER_04]: And therefore this is the type of name that you would want to rotate into and out of some of those bigger techniques.

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[SPEAKER_04]: Those in best stock, now closing on 63 million downloads, thanks to you.

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[SPEAKER_04]: I'm ready for your call now.

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[SPEAKER_04]: Aided it.

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[SPEAKER_04]: Thank you.

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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, Justin Klein 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]: Good luck to George in San Mateo, looking at SCHD, one of the most popular Schwab funds, mainly because of its name, the Schwab US dividend equity ETF.

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[SPEAKER_04]: Do you own it?

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[SPEAKER_04]: Or are you thinking about buying it?

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[SPEAKER_11]: I'm thinking about buying it.

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[SPEAKER_11]: I like the idea of long term.

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[SPEAKER_11]: passive income.

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[SPEAKER_11]: And I was just wondering if that's the way to go.

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[SPEAKER_04]: Well, what I always say about any dividend ETF is that it's just a closet value ETF.

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[SPEAKER_04]: That's all it is.

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[SPEAKER_04]: If you look at it, that's what it is.

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[SPEAKER_04]: It's a large cap value ETF.

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[SPEAKER_04]: That's the way that it leads.

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[SPEAKER_04]: And that can be fine.

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[SPEAKER_04]: You're a long-term.

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[SPEAKER_04]: value tends to do very well.

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[SPEAKER_04]: Last 10 years hasn't really as outperforms, growth is normally does.

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[SPEAKER_04]: But if you go back decades and decades, value does tend to outperform, and I think we'll get back to that point in markets at some point.

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[SPEAKER_04]: But I always then say, how does it stack up against its peers?

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[SPEAKER_04]: Because people conceptualize dividend income in their mind, and they think that is

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[SPEAKER_04]: then I'll be all, but the reality is is that dividends are only a part of the total return picture.

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[SPEAKER_04]: And at the end of the day, that's really what you should care about is the total return.

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[SPEAKER_04]: And if you get a 3% dividend and it total return is 8%.

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[SPEAKER_04]: But you, in your alternatives to invest in something that has no dividend, but it's total return over the same period is 15%.

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[SPEAKER_04]: You're going to take the 15%.

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[SPEAKER_04]: Right?

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[SPEAKER_04]: So, you don't want to get to my topic and saying, oh, I only want income.

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[SPEAKER_04]: I only want dividends.

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[SPEAKER_04]: It's really about what is the overall strategy, how does it lean from style perspective, and what is the long term return?

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[SPEAKER_04]: Now this year it has done great.

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[SPEAKER_04]: It's had a great year, but mainly because if you look at the portfolio, some of the biggest holdings are the ones that have done very well.

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[SPEAKER_04]: The names like Qualcomm, it's five percent of the portfolio, Texas Instruments, et cetera.

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[SPEAKER_04]: So it's had a very good year, but if you look at its performance,

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[SPEAKER_04]: It's five-year total return is 8.4% versus the index, which is that 11.3%.

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[SPEAKER_04]: And it's in the 70-night percentile, which means that 79% of funds, over that five-year period, have done better despite the great start to this year.

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[SPEAKER_04]: So five months is just five months, and any fun can do really well over a short period,

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[SPEAKER_04]: is only at 4.3% a year, or most funds are up mid-teens, maybe even 20% range.

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[SPEAKER_11]: Yeah.

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[SPEAKER_04]: So, you know, you put them together, and it's still probably underperforming, or maybe a very middleing performance picture.

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[SPEAKER_04]: So I'm not totally against it, but it's, don't just buy it because it has the word dividend in it.

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[SPEAKER_04]: You want to be focused on, was that total return picture look like, and that can be part of it, what I, here's what I, I don't love, is that your pigeon hold into just dividend pairs.

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[SPEAKER_04]: Whereas if you're, just dividend pairs, right?

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[SPEAKER_04]: Cause it's a dividend, equity ETF.

16:42.232 --> 16:43.853
[SPEAKER_04]: It's only gonna buy names that pay dividends.

16:44.193 --> 16:45.874
[SPEAKER_04]: And we have strategies that do that as well.

16:46.654 --> 16:51.898
[SPEAKER_11]: What I was going to do was put a half SCHD and a half VTI.

16:52.258 --> 16:54.659
[SPEAKER_04]: I mean, those are just very basic funds.

16:54.700 --> 17:00.443
[SPEAKER_04]: I don't like, I don't, I I much rather own SCHD because if you look at it, it's set up.

17:00.523 --> 17:04.146
[SPEAKER_04]: It's less tied to big tech, which is overvalue.

17:04.166 --> 17:06.467
[SPEAKER_04]: There's more industrial exposure.

17:07.108 --> 17:11.391
[SPEAKER_04]: I think it just has a better mix of assets, but it's still not enough.

17:11.971 --> 17:12.472
[SPEAKER_04]: It still has

17:13.212 --> 17:16.294
[SPEAKER_04]: both are underweight materials, underweight harder assets.

17:16.694 --> 17:28.202
[SPEAKER_04]: With any of these big large cap ETFs, whether it's a VTI, SHD, S&P fund, whatever it is, what everybody needs a supplement with is some sort of hard asset.

17:28.962 --> 17:30.883
[SPEAKER_04]: Like, okay, what about REITs?

17:31.364 --> 17:34.906
[SPEAKER_04]: What about maybe precious metals, gold and silver materials?

17:35.406 --> 17:39.129
[SPEAKER_04]: Harder assets that are starting to outperform in a world that

17:40.198 --> 17:40.919
[SPEAKER_04]: is more volatile.

17:41.560 --> 17:44.163
[SPEAKER_04]: So that's the way you need to think about supplementing a CHD.

17:44.324 --> 17:48.489
[SPEAKER_04]: I would be adding those types of exposure at CHD then VTI.

17:49.351 --> 17:49.811
[SPEAKER_11]: okay.

17:50.431 --> 17:50.932
[SPEAKER_04]: Thanks for the call.

17:51.092 --> 17:52.452
[SPEAKER_11]: Okay, thank you so much.

17:52.712 --> 17:53.633
[SPEAKER_04]: Yeah, no problem.

17:53.833 --> 17:54.873
[SPEAKER_04]: Thanks for the call.

17:54.893 --> 18:03.897
[SPEAKER_04]: If you want to do a portfolio view and look at kind of the whole thing and tell you, you know, which direction you should head and what type of exposure you might be missing.

18:04.197 --> 18:05.697
[SPEAKER_04]: Now the next and best talk we'll look into the story.

18:05.897 --> 18:10.619
[SPEAKER_04]: The wealth effect paradox, why rich consumers are spending big while markets wobble.

18:11.219 --> 18:16.541
[SPEAKER_04]: Even as geopolitical tensions, royal financial markets, wealthy consumers are identifying the gluten-private jet demand

18:18.362 --> 18:24.168
[SPEAKER_04]: Monaco and Khan, and Broadway, just recorded a record $1.9 billion season.

18:24.369 --> 18:32.217
[SPEAKER_04]: This divergence between financial anxiety and high-end consumer spending raises important questions about where the real economy actually stands.

18:32.698 --> 18:35.501
[SPEAKER_04]: But for now I'm Justin Klein and ready to take your calls on 8-899 chart.

18:41.100 --> 18:46.008
[SPEAKER_02]: Invest talk is ready 24-7 for your finance and investment questions.

18:46.328 --> 18:50.915
[SPEAKER_02]: My five year old son and I listened to your podcast every night, so thank you very much for putting it on.

18:51.136 --> 18:55.022
[SPEAKER_02]: Justin Klein is here and ready to tackle your questions.

18:55.467 --> 19:02.134
[SPEAKER_07]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvestance a better stock?

19:02.394 --> 19:08.400
[SPEAKER_00]: Wondering, what you thought about this read is that would be a good time to get in.

19:08.700 --> 19:10.502
[SPEAKER_01]: I wanted to pick your reign about apples.

19:10.742 --> 19:12.324
[SPEAKER_01]: What did you think about their earnings call?

19:12.604 --> 19:14.406
[SPEAKER_01]: To this at the time of ad to my position.

19:14.546 --> 19:15.707
[SPEAKER_02]: Don't forget to call.

19:16.028 --> 19:17.529
[SPEAKER_02]: In Best Talk, 888-99 chart.

19:21.995 --> 19:23.376
[SPEAKER_04]: at KPP Financial.

19:23.917 --> 19:26.099
[SPEAKER_04]: Accountability means more than advice.

19:26.799 --> 19:31.544
[SPEAKER_04]: It means we invest alongside you through our parallel investing approach.

19:32.184 --> 19:39.971
[SPEAKER_04]: When we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.

19:40.752 --> 19:43.676
[SPEAKER_04]: same day, same price, same percentage.

19:44.337 --> 19:47.541
[SPEAKER_04]: If your portfolio moves, ours does too.

19:48.201 --> 19:50.865
[SPEAKER_04]: That is alignment, that is transparency.

19:51.365 --> 19:53.388
[SPEAKER_04]: That is the KPP difference.

19:54.289 --> 19:58.915
[SPEAKER_04]: Visit investtalk.com to get your free portfolio review.

20:02.013 --> 20:05.958
[SPEAKER_03]: Get ready for an all-new Invest Talk WELP webinar.

20:06.399 --> 20:11.245
[SPEAKER_03]: Beyond the yield, how to invest for your income needs.

20:11.726 --> 20:15.611
[SPEAKER_03]: Tuesday, June 30th, noon to one Pacific time.

20:16.131 --> 20:20.337
[SPEAKER_03]: Learn more and register now at investtalk.com.

20:23.857 --> 20:33.440
[SPEAKER_04]: We're going to head up to or out to Kansas and talk to James looking at steel dynamics STLD as you would imagine.

20:33.480 --> 20:34.280
[SPEAKER_04]: It's a steel company.

20:34.300 --> 20:38.342
[SPEAKER_10]: The owner looking to buy it.

20:38.482 --> 20:47.665
[SPEAKER_10]: I'm I'm thinking about letting go of it because it's it's really had a good run lately and I'm feeling pretty good about it.

20:48.460 --> 20:55.582
[SPEAKER_04]: Well, I like that you're thinking about that, but I wouldn't be super quick to be selling it for a couple of reasons.

20:56.202 --> 21:03.324
[SPEAKER_04]: Number one is the chart is perfectly fine, the trend is higher, it's a little overbought right now, but nothing too worrisome.

21:04.704 --> 21:08.485
[SPEAKER_04]: And then you look at the earnings expectations for this year up to $16.5, up to $101.

21:08.505 --> 21:10.786
[SPEAKER_04]: And then another 14% increase next year to $18 in change.

21:15.129 --> 21:23.116
[SPEAKER_04]: Historically, the still industry is pretty cyclical, so that is a worry, but what you're seeing right now isn't the economy rolling over.

21:24.120 --> 21:26.282
[SPEAKER_04]: You're actually seeing the economy re-accelerating.

21:26.302 --> 21:31.085
[SPEAKER_04]: That's what actually the catalyst for the sell-off and equities over the past week.

21:31.105 --> 21:34.708
[SPEAKER_04]: A lot of people think the equity sell-off is just because there's a recession on the horizon.

21:34.728 --> 21:35.368
[SPEAKER_04]: There's something like that.

21:35.408 --> 21:41.753
[SPEAKER_04]: No, it's just a re-adjustment of potentially tighter fed policy going forward.

21:42.093 --> 21:43.014
[SPEAKER_04]: And that's what you've seen.

21:43.074 --> 21:46.437
[SPEAKER_04]: But still, dynamics really didn't feel much in that volatility.

21:46.457 --> 21:47.617
[SPEAKER_04]: It just kind of chops sideways.

21:48.678 --> 21:50.500
[SPEAKER_04]: Rally today and it closed at a 52-week high.

21:51.262 --> 21:52.103
[SPEAKER_04]: So what's the issue here?

21:52.163 --> 21:58.907
[SPEAKER_04]: And frankly, if I'm going to buy, if I go into buy a steel name, this is easily one of the best names out there.

21:59.448 --> 22:09.074
[SPEAKER_04]: Them a new core are, you know, kind of go neck and neck, in which one is operating best, in which one the current dynamics in the market are supporting more than the other.

22:09.114 --> 22:12.317
[SPEAKER_04]: But generally long-term, still dynamic is a very good,

22:13.303 --> 22:23.111
[SPEAKER_04]: And profitable still producer now I would be my only exposure in the material space probably not but overall like I said you're getting good profitability of trends are saw the balance sheet is clean.

22:23.131 --> 22:33.659
[SPEAKER_04]: I would be finding a place to trim it maybe rebalance it that may be more prudent, but I definitely wouldn't be selling it outright right now.

22:34.640 --> 22:35.661
[SPEAKER_10]: All right, thank you very much.

22:36.021 --> 22:36.362
[SPEAKER_10]: No problem.

22:36.462 --> 22:37.082
[SPEAKER_04]: Thanks for the call.

22:38.003 --> 22:39.004
[SPEAKER_04]: Their main focus point.

22:40.047 --> 22:43.129
[SPEAKER_04]: Today is about Florida's insurance reform.

22:43.510 --> 22:46.432
[SPEAKER_04]: This is a very interesting new development.

22:48.073 --> 22:59.943
[SPEAKER_04]: The CEO of USAA recently announced a billion dollars returning nearly a billion dollars to Florida policy makers through dividends and premium reductions.

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[SPEAKER_04]: $500 million in dividends to approximately 830,000 Florida members.

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[SPEAKER_04]: That's on top of the already 160 million they've announced.

23:09.879 --> 23:13.939
[SPEAKER_04]: And then reducing premiums as well by about 14%.

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[SPEAKER_04]: So the total amount they are returning, like I said, nearing a billion dollars.

23:22.481 --> 23:24.802
[SPEAKER_04]: And this is all because of tort reform.

23:27.915 --> 23:31.117
[SPEAKER_04]: And this could be a blueprint for the rest of the country.

23:32.138 --> 23:39.344
[SPEAKER_04]: For years, the Florida legal system allowed for a lot of abuse and to our firm has gotten rid of a lot of that.

23:40.485 --> 23:44.147
[SPEAKER_04]: Florida accounted for just 9% of the nation's property insurance claims.

23:45.749 --> 23:50.152
[SPEAKER_04]: We're at previously generated nearly 80% of all related litigation.

23:51.729 --> 23:58.092
[SPEAKER_04]: And legal defense costs fell from three and a half billion in 2023, only a hundred million today.

23:59.013 --> 24:07.877
[SPEAKER_04]: So states like Georgia, Louisiana, New York, they're all looking at doing the same type of tort reforms, same with here in California in Texas.

24:09.758 --> 24:12.859
[SPEAKER_04]: It just shows you the overall impact this

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[SPEAKER_04]: to only 2,600 in the same period in 2024.

24:25.951 --> 24:32.376
[SPEAKER_04]: Florida's personal auto liability loss ratio was at its lowest in 15 years, 52.5.

24:33.157 --> 24:36.820
[SPEAKER_04]: Physical damage lost losses from auto, fell from 112% to 49.5% last year.

24:36.840 --> 24:38.561
[SPEAKER_04]: All because of this reform.

24:38.721 --> 24:40.202
[SPEAKER_04]: No, it's great here, it's not just

24:46.748 --> 24:51.729
[SPEAKER_04]: USA, it's other insurance as well from progressive birch or half the way state farm all state.

24:52.349 --> 24:59.450
[SPEAKER_04]: You add USA together at 78.6% of the market and they're on average dropping premiums by 8%.

25:00.430 --> 25:06.971
[SPEAKER_04]: And I highlight this because not only are some of these companies public, so they're saving money in.

25:07.892 --> 25:10.852
[SPEAKER_04]: Once again, passing that along to their customers,

25:17.113 --> 25:25.736
[SPEAKER_04]: walletate of analysis can be just important as quantitative everyone focuses on the numbers and the numbers are important we talk about that all the time.

25:26.516 --> 25:36.640
[SPEAKER_04]: But it's very often that underneath the surface there can be regulatory changes both on a state level in this case potentially on a national level as well.

25:37.480 --> 25:41.022
[SPEAKER_04]: Good example of this is the one big beautiful bill

25:45.487 --> 25:49.888
[SPEAKER_04]: is one of the big reasons for the growth in corporate earnings expectations.

25:50.768 --> 25:58.589
[SPEAKER_04]: And so, it's a one-time thing, one-time step change, and ultimately, that probably won't be sustained next year.

25:58.609 --> 25:59.269
[SPEAKER_04]: It won't be sustained.

25:59.289 --> 26:01.590
[SPEAKER_04]: There'll be another, need to be another driver for that.

26:02.850 --> 26:04.770
[SPEAKER_04]: So a very interesting development there.

26:04.870 --> 26:08.111
[SPEAKER_04]: I think this could very well spread to the rest of the country.

26:10.871 --> 26:12.412
[SPEAKER_04]: Beltsing back to the New York Voice Bank.

26:12.572 --> 26:13.452
[SPEAKER_04]: You know the number it's 88, 99 sure.

26:14.933 --> 26:18.116
[SPEAKER_05]: Hey guys, this is Jeff from Louisville, Kentucky.

26:18.636 --> 26:27.524
[SPEAKER_05]: This is similar to a college question yesterday about VTIVO, I've got V-O-O, but also, Steve Peasley told me this about 10 years ago.

26:27.804 --> 26:42.357
[SPEAKER_05]: My own big patient, because I understand what Justin's talking about adding other things, but I've actually got, and this is off, Steve Peasley, who told me this, and he had a book as a PDF that he sent me, which was awesome.

26:43.300 --> 26:49.124
[SPEAKER_05]: But I did 75% VOO because I'm in my 30s, so this is 10 years ago.

26:49.544 --> 26:57.530
[SPEAKER_05]: And 25% V is in Victor, B is in Bravo, ours in Romeo, the small cap value ETF with Vanguard.

26:57.850 --> 27:01.853
[SPEAKER_05]: I think that's the allegedly the best small cap ETF out there.

27:01.873 --> 27:05.876
[SPEAKER_05]: I know VGT's done great, of course, that's tech.

27:05.956 --> 27:08.838
[SPEAKER_05]: But I think this is probably the best set up on some

27:09.524 --> 27:16.187
[SPEAKER_05]: wanting to do something overseas with like BXUS, but honestly, I think US is unstoppable.

27:16.868 --> 27:19.849
[SPEAKER_05]: Sorry, innovation was, I think it's going to continue.

27:20.809 --> 27:25.412
[SPEAKER_05]: There's been many sayers about things, all things are going to drop in 2018 and never did.

27:25.612 --> 27:26.292
[SPEAKER_05]: Kept on going.

27:26.892 --> 27:31.294
[SPEAKER_05]: I think with innovation, they just going to make everything a lot more efficient.

27:32.235 --> 27:36.517
[SPEAKER_05]: A lot of VOO VTS has international exposure already.

27:37.013 --> 27:40.295
[SPEAKER_05]: So making money from international business.

27:41.196 --> 27:47.461
[SPEAKER_05]: So I just want to get your thoughts on that 25 or 7525 split with the OVBR.

27:47.661 --> 28:01.171
[SPEAKER_05]: And if you, just and if we're looking at any foreign investments, are we looking at Southeast Asia strictly or Europe, but I think Southeast Asia's doing a lot more with their GDP.

28:02.346 --> 28:10.754
[SPEAKER_05]: So I'm assuming that's the best route and I can't really trust China because you know how they do things with the they have no SEC over oversight.

28:10.774 --> 28:15.118
[SPEAKER_05]: So if you don't let us know what type of foreign investments that might be of interest if you can.

28:15.138 --> 28:15.699
[SPEAKER_05]: I appreciate it.

28:15.719 --> 28:15.959
[SPEAKER_05]: Thank you.

28:17.015 --> 28:19.956
[SPEAKER_04]: Well, thank you for the call back to Steve and VPR.

28:20.336 --> 28:24.858
[SPEAKER_04]: Excuse me, it's a very solid smoke at value ETF exposure.

28:25.219 --> 28:32.302
[SPEAKER_04]: But I would push back and say, yes, for having some foreign exposure in this market is probably crudent.

28:35.143 --> 28:42.926
[SPEAKER_04]: And the way I would think about it is more around countries that have scarce assets.

28:45.867 --> 28:51.892
[SPEAKER_04]: rock commodities, precious metals, industrial capacity, prime real estate, etc.

28:53.333 --> 29:06.903
[SPEAKER_04]: Yes, Southeast Asia, Asia, Asia, Southeast Asia has some tailwinds there, but there are a lot of countries that are very dependent on, for example, importing raw materials, Japan is good example.

29:08.264 --> 29:09.225
[SPEAKER_04]: They have balance sheet issues.

29:10.714 --> 29:14.959
[SPEAKER_04]: Then there's Europe, which, yes, they have their demographic issues.

29:15.019 --> 29:17.402
[SPEAKER_04]: They have some structural reform issues.

29:19.123 --> 29:29.015
[SPEAKER_04]: But I would argue that the war in Ukraine and existential issues that maybe threatens the European system.

29:30.238 --> 29:37.980
[SPEAKER_04]: could push them or actually is pushing them to other pocketbook books to stimulate their economy or form some things as well.

29:38.000 --> 29:39.361
[SPEAKER_04]: So I think so there's some upside there.

29:40.081 --> 29:42.301
[SPEAKER_04]: But big picture it's about flows.

29:42.801 --> 29:44.262
[SPEAKER_04]: Where is money flowing?

29:45.242 --> 29:55.445
[SPEAKER_04]: As long as we are, I guess, for better lack of a better term, we're pissing off the world with our actions kind of in the least.

29:57.602 --> 30:03.791
[SPEAKER_04]: And money is flowing out of the United States, in general.

30:05.273 --> 30:13.706
[SPEAKER_04]: And you see that with, yes, the dollar is rallying as of late, but it's not making you highs you would think with a Fed-Tiny policy, the dollar would be a lot stronger, but it is not.

30:14.687 --> 30:29.871
[SPEAKER_04]: So that relative strength there is telling you a lot that the dollar is likely headed for a structural period of weakness which pushes flows into this foreign markets and into currencies that are generally stronger.

30:31.191 --> 30:35.692
[SPEAKER_04]: Only one that really isn't showing good relative strength is that Japan.

30:36.594 --> 30:40.595
[SPEAKER_04]: So I would supplement, I would probably wouldn't take from the VBR.

30:40.775 --> 30:51.098
[SPEAKER_04]: I would actually take them from the VTI because it's so tech heavy and had a harder assets, like I said before, real estate and dust drills, materials, crushed metals, et cetera.

30:51.718 --> 30:59.981
[SPEAKER_04]: And if you're in foreign markets, you want countries that have those type of assets in space.

31:00.701 --> 31:03.282
[SPEAKER_04]: Let's move back to another voice bank question now.

31:04.099 --> 31:14.386
[SPEAKER_08]: Justin Luke calling in regards to two Indonesia stocks, one of broad exposure of EIDO at the

31:23.685 --> 31:45.482
[SPEAKER_08]: investments in a partial position in TLK was thinking about opening a broader exposure to ticker symbol EIDO Indonesia as a long-term investment, pretty beaten down stocks recently with all the news and interpretation.

31:45.943 --> 31:46.603
[SPEAKER_04]: What are your thoughts?

31:46.984 --> 31:47.284
[SPEAKER_04]: Thank you.

31:48.431 --> 31:49.652
[SPEAKER_04]: I think this is pretty simple.

31:49.772 --> 31:55.897
[SPEAKER_04]: If you want to expose it in Indonesia, I would buy EIDO, TLK, this is the name we had owned for a little bit.

31:55.917 --> 32:00.021
[SPEAKER_04]: We sold it, had too much wealth of weakness, some accounting issues.

32:01.502 --> 32:08.488
[SPEAKER_04]: And when you go buy an EIDO, the I shares MSCI in Indonesia fund, you're getting much broader exposure.

32:08.668 --> 32:11.250
[SPEAKER_04]: 60 different holdings, yes, TLKs in there, but

32:11.671 --> 32:14.253
[SPEAKER_04]: It's only one of 60.

32:14.853 --> 32:28.401
[SPEAKER_04]: So I would rather hold something that's getting brought to diversity just so you can gain exposure to all these companies or all 60 companies.

32:28.761 --> 32:32.764
[SPEAKER_04]: And you have much better diversity in shot at winning.

32:34.223 --> 32:35.644
[SPEAKER_04]: Let's talk about SpaceX.

32:35.904 --> 32:39.267
[SPEAKER_04]: SpaceX goes IPO tomorrow, but who will be the winners and losers?

32:39.307 --> 32:43.491
[SPEAKER_04]: And what is the pending on how well this performs?

32:43.511 --> 32:58.304
[SPEAKER_04]: There are currently prices up about 21% from its implied IPO price on Hyperliquid, which is a trading platform, cryptocurrency trading platform that trades perpetual futures.

32:59.323 --> 33:01.244
[SPEAKER_04]: which would be a reasonable success.

33:01.304 --> 33:05.646
[SPEAKER_04]: But obviously, this is a very narrow illiquid market.

33:05.666 --> 33:09.207
[SPEAKER_04]: So it's hard to say exactly how this IPO will perform.

33:09.907 --> 33:11.708
[SPEAKER_04]: But first off, it will benchmark.

33:12.328 --> 33:20.472
[SPEAKER_04]: Be a good benchmark for companies like AST space mobile as well as rocket labs, you know, where does valuation ultimately settle out at?

33:21.132 --> 33:26.534
[SPEAKER_04]: And there will be an adjustment in those stocks as well.

33:29.920 --> 33:39.448
[SPEAKER_04]: A lot of names like Verizon, AT&T, T-Mobile and sold off recently on Fears that SpaceX with their Starlink will disrupt their business.

33:39.748 --> 33:50.317
[SPEAKER_04]: I think that's a little overblown, but wireless products, wireless customers, wireless stocks, excuse me, could bounce if the IPO doesn't go well.

33:50.918 --> 33:54.901
[SPEAKER_04]: And then there's the future IPOs, OpenAI and Thropic.

33:57.615 --> 34:10.961
[SPEAKER_04]: If valuation stays around these levels for a reasonable amount of time, per SpaceX, we're talking months, because that's what it's going to take for open AI to endthropic to actually get to market.

34:12.362 --> 34:18.985
[SPEAKER_04]: If it can hold its value for a period of time, it will allow these other names to go public if this flops.

34:20.206 --> 34:22.747
[SPEAKER_04]: And you get a down 20, 30, 40% in the coming months.

34:25.200 --> 34:30.902
[SPEAKER_04]: Well, then that would call on the question, the valuation and the ability for open AI and throw up to go public.

34:31.562 --> 34:39.325
[SPEAKER_04]: Then there's the AI market in general from names like caterpillars to vertid, the geovernova, and video alphabet, et cetera.

34:39.745 --> 34:43.246
[SPEAKER_04]: It's a risk to them because it's just liquidity from for the entire market.

34:43.706 --> 34:50.148
[SPEAKER_04]: That's kind of the short-term that the capital needed to get SpaceX public will come from a lot of those names.

34:51.929 --> 34:53.289
[SPEAKER_04]: And it could be part of the reason why you saw

34:56.408 --> 35:07.237
[SPEAKER_04]: Longer term though, the risk is, well, they be able to put AI data centers in space, something they're looking to do, will it be as cost-effective, TBD?

35:08.758 --> 35:14.242
[SPEAKER_04]: So the point here is that tomorrow is going to be a very big day, not just for space X, but the broader market.

35:14.843 --> 35:16.824
[SPEAKER_04]: Redding to our final break, it's going to be called now at 80-99 chart.

35:22.513 --> 35:23.354
[SPEAKER_03]: Invest Talk.

35:23.814 --> 35:31.438
[SPEAKER_03]: Tell your friends they can listen live, download the free podcast, or watch Invest Talk on our YouTube channel.

35:31.898 --> 35:38.222
[SPEAKER_03]: And they can leave their finance and investment questions anytime on 88899 chart.

35:38.902 --> 35:39.903
[SPEAKER_06]: Hey, Invest Talk.

35:40.403 --> 35:41.524
[SPEAKER_06]: Just a quick question.

35:41.544 --> 35:46.547
[SPEAKER_06]: I know we were just talking about index funds yesterday and the majority of my

35:47.215 --> 35:53.218
[SPEAKER_06]: Portfolio is in an ETF, VT, Total Vanguard, World Stock Fund.

35:53.698 --> 35:54.919
[SPEAKER_06]: I like how diverse it is.

35:54.979 --> 35:56.159
[SPEAKER_06]: I like the international.

35:56.179 --> 36:06.724
[SPEAKER_06]: I like the domestic split, but I was just curious, you know, if anything has changed, particularly which sectors I should be investing in that aren't part of this fund.

36:07.284 --> 36:09.765
[SPEAKER_06]: I will listen for your answer on the show.

36:10.026 --> 36:10.346
[SPEAKER_06]: Thank you.

36:11.026 --> 36:14.788
[SPEAKER_04]: Well, first off, I applaud you for being in an index fund that is

36:15.832 --> 36:16.793
[SPEAKER_04]: far more diversified.

36:16.813 --> 36:22.355
[SPEAKER_04]: And I think this is, if you're going to index, this is probably one of the better ones out there.

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[SPEAKER_04]: Everyone's talking about VLO, SPY, or VTI.

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[SPEAKER_04]: Those are all of just domestic versus this is VT, the Vanguard total world stock index funds.

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[SPEAKER_04]: So it's looking at all of the stocks around the world and giving you 60% exposure domestically and about 40% exposure in the foreign markets.

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[SPEAKER_04]: And there's a lot more.

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[SPEAKER_04]: balance between growth and value, large and mid-cap as well.

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[SPEAKER_04]: You have exposure to 10,000 names, 10,000 names, and you're not just so heavily exposed to NVIDIA and Apple all the next seven names.

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[SPEAKER_04]: It's still the, these are still top holdings, but they're, the top 10 is only 22% of this fun versus believe it's over 40 for BTI or S&P.

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[SPEAKER_04]: So you're getting much better diversification.

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[SPEAKER_04]: Now is it ideal?

37:19.009 --> 37:20.090
[SPEAKER_04]: No, it's an ideal.

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[SPEAKER_04]: How I would supplement is only 4% materials.

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[SPEAKER_04]: I'd probably want to up that a little bit.

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[SPEAKER_04]: Probably, what's going to add those harder assets.

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[SPEAKER_04]: So maybe a re-funded, maybe a precious metal fund.

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[SPEAKER_04]: maybe a broader materials fund of some kind, industrials, uping that a little bit as well.

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[SPEAKER_04]: So I like this as a core.

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[SPEAKER_04]: If you're going to time a core index fund, this is probably the best one out there.

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[SPEAKER_04]: Now, once again, not an end-all bill.

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[SPEAKER_04]: It's not just this and forget it, but as a core, it's much better, much more sophisticated than a VTI

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[SPEAKER_04]: Lastly, let's talk about Treasury issuance.

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[SPEAKER_04]: More than half a trillion dollars of T-bills are issued every single week.

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[SPEAKER_04]: It sounds like a lot, but still, the percentage of short-term issuance is a percentage of all outstanding government debt.

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[SPEAKER_04]: Is about 22%.

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[SPEAKER_04]: That's slightly above the historical average of 22.4, but well above the average of the 15 to 20% range

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[SPEAKER_04]: But this is quickly moving higher and could be headed towards 25% or more in relative short order.

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[SPEAKER_04]: And the main reason this is a problem is that while rates work cut recently, they're likely to go up.

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[SPEAKER_04]: And actually the average interest rate by security of bills, we call these bills.

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[SPEAKER_04]: Anything that's under a year is about 3.7% notes are more intermediate term.

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[SPEAKER_04]: That's 3.2%

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[SPEAKER_04]: and then longer term the bonds are at 3.4%.

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[SPEAKER_04]: So as these notes and bonds get closer to maturity and they mature and they refinance them at in the high threes, maybe pushing towards 4%.

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[SPEAKER_04]: That's gonna push the borrow our borrowing costs up even more.

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[SPEAKER_04]: So while short term borrowing seems attractive right now,

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[SPEAKER_04]: As inflation continues to go up, and the Fed starts to tighten policy, you're going to see the term premium continue to rise, which means that the cost of debt will continue to go up.

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[SPEAKER_04]: Right now, there's a lot of demand for these teabills, why because it's about $8 trillion in money market funds and they're almost all of them are buying massive amounts of teabills.

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[SPEAKER_04]: There's plenty of capacity to soak up this issuance for now, but that won't always be the case.

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[SPEAKER_04]: Demand for the highest quality collateral isn't infinite.

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[SPEAKER_04]: It is finite to some degree.

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[SPEAKER_04]: So continuing to just finance on the short end, sets us up for, remember the repose bike?

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[SPEAKER_04]: Was that 2018, 2018?

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[SPEAKER_04]: And as this,

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[SPEAKER_04]: percentage of our T-Bills as a way of financing us increases.

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[SPEAKER_04]: You are raising the risk of more problems in the Treasury financing market.

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[SPEAKER_04]: And that, my friends, is when you really have to be well, this is worried as long as the Treasury market is being financed.

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[SPEAKER_04]: That means government spending is going, that means fiscal dominance is here, and that means inflation remains with us.

40:54.764 --> 41:06.907
[SPEAKER_04]: I'm Justin Klein, I'm going to remind you about Kate Pupinichel's parallel investing when we make a trade for our clients, make the same trade for ourselves same day, same price, same percentage, no front running, no special treatments we invest right along side are clients.

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[SPEAKER_04]: We should at the same risk and potential for success, and you can learn more banning over to invest.com.

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[SPEAKER_04]: Our next wealth webinar comes up on Tuesday, June 30th, which is a few weeks away from 12 to 1 pm, civic time.

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[SPEAKER_04]: Independent thinking shared success is the best luck.

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[SPEAKER_04]: Good night.

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