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[SPEAKER_02]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.

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[SPEAKER_02]: Here's your host, Justin Klein.

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[SPEAKER_00]: Good afternoon, fellow investors.

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[SPEAKER_00]: Welcome back to another edition of the best talk.

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[SPEAKER_00]: This is our Friday, June 26th, 2026 edition.

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[SPEAKER_00]: Happy Friday, everyone out there and is an interesting day in markets to close the week.

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[SPEAKER_00]: So a lot to unpack, I am ready for all of it.

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[SPEAKER_00]: Whatever is on your mind, reach out with your questions.

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[SPEAKER_00]: During our four to five live hour or after hours, it does not matter.

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[SPEAKER_00]: we want to hear from you while we want to know what's on your mind and that's the best way we can help you.

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[SPEAKER_00]: Hope you become a better investor.

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[SPEAKER_00]: That's what each episode of Invest Talk is about, bringing your

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[SPEAKER_00]: feet back on the ground, keeping your head out of the clouds, focusing on what matters, focusing on the reality as opposed to the height.

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[SPEAKER_00]: We're not your height machine.

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[SPEAKER_00]: I'm not crammer.

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[SPEAKER_00]: I'm not going to bang any bells and whistles.

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[SPEAKER_00]: It's not what this show is about.

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[SPEAKER_00]: The show is about the hard realities of the economy of certain sectors of what it takes to be

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[SPEAKER_00]: That's what this show is about.

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[SPEAKER_00]: Thought of having stuck to some sort of preconceived notion of how the world is.

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[SPEAKER_00]: It's very important to be open-minded, be flexible, be grounded in what is easily observable in markets,

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[SPEAKER_00]: can drive you in the wrong direction.

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[SPEAKER_00]: When you got caught up in that hype, and you aren't focusing on what matters, you make big mistakes.

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[SPEAKER_00]: So the VES investing consistently over time is about capitalizing opportunities, but also avoiding major pitfalls.

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[SPEAKER_00]: And it's very easy to fall into that.

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[SPEAKER_00]: So we're here to guide you, to go up over 25 years in investment experience of attendance for a long time now.

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[SPEAKER_00]: I am here to

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[SPEAKER_00]: give you the both sides of the coin.

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[SPEAKER_00]: Help you understand the risk and reward that are facing you risk and rewards that are facing you in markets right now.

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[SPEAKER_00]: It just heads up in less than a week, actually it's coming a, coming week, Tuesday, June 30th, we'll be hosting our next wealth webinar from 12 to 1 p.m. Pacific time.

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[SPEAKER_00]: Side of beyond the yield how to invest for your income means just four days away, but it is free to register, but you must head over to investtalk.com.

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[SPEAKER_00]: Now, in just a bit, we'll talk about today's Mark performance and run down the show topics for the hour, but as usual, we'll tackle this first call a question now.

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[SPEAKER_06]: Hey, Justin, look, I have a question on Apple.

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[SPEAKER_06]: It just had a recent drop today, and I was just wondering where you guys thought about it.

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[SPEAKER_06]: I know it's not a big AA player right now.

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[SPEAKER_06]: and I don't know if that's a good or a bad thing for them, you know, we'll see how that can play out.

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[SPEAKER_06]: So I just wanted to know what you guys thought about the price right now.

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[SPEAKER_00]: Thank you.

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[SPEAKER_00]: I actually like that it's not a big AI player because there's a huge risk in what a lot of these hyperscales are doing.

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[SPEAKER_00]: History says that most of them will probably miss the

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[SPEAKER_00]: overspend in the wrong direction, maybe they'll like behind in there in their end products.

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[SPEAKER_00]: Whatever it is, history says there's some trouble ahead for many of them.

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[SPEAKER_00]: Maybe not all of them, but many of them.

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[SPEAKER_00]: Apple historically has taken the other route.

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[SPEAKER_00]: And as much as about AI, it's about a lot of different areas of technology and their

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[SPEAKER_00]: A tend to be slow to the game.

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[SPEAKER_00]: Why?

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[SPEAKER_00]: Because they want to get it right.

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[SPEAKER_00]: They rather be launching something later that makes sense that has been vetted, then rush to put something out that, you know, their user base becomes disenchanted with.

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[SPEAKER_00]: It's really all about their brand and the iOS and iPhone ecosystem.

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[SPEAKER_00]: So historically, we like Apple's good business.

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[SPEAKER_00]: Right now, though, and you saw that yesterday was Tim Cook announced that they're raising prices on MacBooks, iPads, all different types of products, which will hurt the man.

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[SPEAKER_00]: And that's because of the higher input costs of memory and chips and everything that is now moving, that capacity tends to move towards being put into AI data centers.

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[SPEAKER_00]: I think long term, a lot of AI compute will happen on the edge, me on device, and less where it has to go out to the data center for this compute, and Apple's well-suited with their M series chips to, I think, be a big player there.

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[SPEAKER_00]: So we're looking for a place to gain entry into Apple.

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[SPEAKER_00]: We like Apple.

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[SPEAKER_00]: and I would continue to buy it on Market Pullbacks.

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[SPEAKER_00]: Thanks for the call.

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[SPEAKER_00]: So yesterday we had a great show.

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[SPEAKER_00]: We looked into the third about minimum wage and inflation.

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[SPEAKER_00]: And what's higher labor costs really mean for your portfolio?

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[SPEAKER_00]: We also answer questions.

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[SPEAKER_00]: It was an question on Stone X, SNEX.

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[SPEAKER_00]: Those submitted via the YouTube channel.

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[SPEAKER_00]: And if you happen to miss it, go check it out.

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[SPEAKER_00]: Best way to get every show is to follow and best talk wherever you get your podcast.

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[SPEAKER_00]: Now, we have a lot of ground to cover over the next 45 minutes or so, and time permitting will get to all of it.

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[SPEAKER_00]: Our main focus point is about hedging currency risk.

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[SPEAKER_00]: In a time where there's a lot of geopolitical volatility, a lot of economic volatility, volatility, and the commodity markets that can help some countries, can hurt other countries, all of that,

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[SPEAKER_00]: The currency risk is higher than it normally is.

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[SPEAKER_00]: So we're going to talk about what's going on overseas, especially in Japan, the end is near the 40 year low.

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[SPEAKER_00]: Is that a good thing or a bad thing for global markets?

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[SPEAKER_00]: So we'll talk about those currency moves.

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[SPEAKER_00]: We also want to discuss, I do want to discuss kind of the real relation to that Apple,

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[SPEAKER_00]: question, which is, how much inflation is the data center boom sparking in the broader economy?

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[SPEAKER_00]: Not just some chips, but things like electricity, worker wages that work in those industries to build out AI data centers, and much, much more, so we'll talk about that.

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[SPEAKER_00]: And then if we have time, how good are these AI traders?

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[SPEAKER_00]: There's some recent studies there.

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[SPEAKER_00]: It's got the crystal ball challenge and we'll dig into the data coming out of that study as well.

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[SPEAKER_00]: We also have voice bank questions, one is on selling cover calls, the other is on new scale, power corporation SMR.

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[SPEAKER_00]: We also have some questions that came in via the comment section on the Invest Talk YouTube channel as well.

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[SPEAKER_00]: But we're going to head into a quick break, as you remember you can call us any time and leave your question on the invest stock voice bank, but if you're listening via our live stream, or possibly an aim 1220 in the Bay Area, you can call right now 88899 chart up next.com on today's market activity.

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[SPEAKER_02]: This is Invest Talk, now closing in on 63 million downloads.

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[SPEAKER_02]: And Justin Klein is here taking your questions live.

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[SPEAKER_02]: 888-99 chart.

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[SPEAKER_00]: Let's take a look at the market today, a very interesting game.

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[SPEAKER_00]: You might look at the headlines, the broader indices.

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[SPEAKER_00]: And you'll say, not a whole lot of doing here.

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[SPEAKER_00]: The S&P is only down 3.5 basis points, basically flat.

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[SPEAKER_00]: Dow, same thing down 44 points down 9 basis points.

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[SPEAKER_00]: Nasdaq, a little

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[SPEAKER_00]: little worse down about a quarter percent, 61 points there, but underneath the surface, a lot of dispersion made in large cap growth down over 1% you have a big pullback pullbacks in a lot of these hardware names that had been strong, micron with that big move higher yesterday faded in a material way today down 6.7% but then you look at sandists down 10

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[SPEAKER_00]: Western digital down 13 cent, sorry, yeah, what's this one?

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[SPEAKER_00]: Well, C gate, there we go.

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[SPEAKER_00]: C gate down 12% is looking at the symbols here.

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[SPEAKER_00]: Qualcomm down seven and a half.

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[SPEAKER_00]: So a lot of the chip names they did in video down one and a half per cent or so, broad come down 3.7 per cent.

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[SPEAKER_00]: some big down moves there, then Morgan Stanley and Goldman Sachdown over 4% as well.

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[SPEAKER_00]: Certainly, that's not good.

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[SPEAKER_00]: Is that something to do with maybe the fact that it looks like open AI is going to postpone their IPO, worrying about maybe the market conditions that could hurt the IPO schedule in the the balance of the year that I think that's why you saw those investment banks struggle.

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[SPEAKER_00]: And you had a lot of green, especially in health care.

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[SPEAKER_00]: It seems like a V of 4% Johnson Johnson at 4% Italy up to 7% on the day.

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[SPEAKER_00]: So a lot of strength out of the health care space, which had been lagging for some time, and software started to do well.

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[SPEAKER_00]: Microsoft certainly the strongest of the Mag 7 names up 5.7% on the day, and you look at things like Salesforce up 5.5% on the day, up 11% up 7% into it up about 5% service now up 10% on the day, I think we had a call a couple of days ago on service now and said, you know, I kind of like it, especially compared to like a Salesforce and while both

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[SPEAKER_00]: So certainly some relative strength on that side.

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[SPEAKER_00]: So very interesting day in Marcus to close the week.

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[SPEAKER_00]: And we continue to see that rotation.

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[SPEAKER_00]: That's what you're seeing here is this SpaceX IPO has started to drain a lot of liquidity out of these higher-flying tech names that had been doing well.

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[SPEAKER_00]: And then you also have the double whammy of what looks to be tighter fed policy as we go through the balance of the year.

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[SPEAKER_00]: likely continues throughout this summer, maybe the market's not me not do a whole lot, they might go down, but probably not dramatically, but you could see a real shift here in the AI trade, and that's what you're actually seeing.

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[SPEAKER_00]: Then you look at some inflation data, you had, let's see, I'm sorry, you had the

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[SPEAKER_00]: was the PMI's, that's what it was.

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[SPEAKER_00]: The PMI's came in better than expected.

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[SPEAKER_00]: That's another kind of shot across the bow to the Fed saying, hey, inflation is elevated.

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[SPEAKER_00]: We're still three and a half, four percent.

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[SPEAKER_00]: And the PMI numbers are coming in better than expected, both on the manufacturing and the service aside.

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[SPEAKER_00]: So where's the beefer?

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[SPEAKER_00]: Why would you want to cut rates?

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[SPEAKER_00]: In fact, you should be raising rates.

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[SPEAKER_00]: That's what this is saying.

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[SPEAKER_00]: Of note though, you did get even though the dollar was about flat on the day, gold finished up 1.2% silver up 1.5 Bitcoin up 1.2, WTI crew down 3.7, below $70 a barrel, the lowest close in the late February, and then you had yields down a little bit for basis points on the front end of the curve.

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[SPEAKER_00]: So you once again, you continue to see that rotation, the equal weighted part of the market

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[SPEAKER_00]: So breadth in the market is actually widening out it's getting healthier.

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[SPEAKER_00]: If you go look at what drove the market from those March lows until the highs just a few weeks ago, it was all tech related and that's kind of unwinding, but it's becoming a healthier market, like I said, Farm is outperforming, software, payments, insurance, casinos, airlines, home builders,

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[SPEAKER_00]: These are all cyclical areas of the market.

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[SPEAKER_00]: And so if expectations for growth start to the start to temper within AI and the economy's re-excelerating, well, that's why you're getting this rotation.

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[SPEAKER_00]: Let's look at the newsletter today.

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[SPEAKER_00]: Real quick, brief, briefly mentioned it.

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[SPEAKER_00]: This week's KP Insights section, we discuss what the recent tech rotation may be signaling for investors.

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[SPEAKER_00]: And the stock idea section we mentioned in Industrial Equipment Company and a diversified aerospace and defense company in the portfolio management section we touch on the AI infrastructure spending cycle.

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[SPEAKER_00]: And if you're interested in learning more and subscribing, heading ahead over to investtalk.com.

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[SPEAKER_00]: to subscribe and the news that will come to your inbox every Saturday.

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[SPEAKER_00]: Now I'm here ready for your question, so give me a call now at 8.899 chart.

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[SPEAKER_01]: Got a question for Justin or Luke, you're the best person to ask it.

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[SPEAKER_03]: I wanted to pick your ring about apples.

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[SPEAKER_03]: What did you think about their earnings call?

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[SPEAKER_03]: They're just a good time to add to my position.

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[SPEAKER_01]: Call in Vestock, 8.8899 chart.

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[SPEAKER_02]: It's coming up fast and all new in Vestalk, wealth webinar beyond the yield, how to invest for your income needs.

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[SPEAKER_02]: This Tuesday, June 30th, noon to 1 Pacific Time, online and free of charge, but you must

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[SPEAKER_02]: And now, the Invest Talk phone lines are open 88899 chart.

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[SPEAKER_00]: Let's talk about everyone's favorite subjects, basically since COVID, and that is inflation.

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[SPEAKER_00]: We've been living in this inflationary environment for a number of years now.

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[SPEAKER_00]: Different catalysts.

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[SPEAKER_00]: Obviously in 2020, 2021, 2022, that was a lot of stimulus.

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[SPEAKER_00]: a lot of economic stimulus from both the Biden and the Trump administration that pushed inflation to the highest levels we see since the seventies.

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[SPEAKER_00]: But there's a new catalyst and it's not just about government spending which is certainly as part of it, but it's all of the balance sheets of these hyperscalers being unleashed out into the world

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[SPEAKER_00]: AlphaBent Amazon Meta Microsoft and Oracle are spending about $741 billion this year.

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[SPEAKER_00]: On-capital, copy-capax, that's up 75% from last year, 75% in last year was massive.

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[SPEAKER_00]: Now what are they spending it on?

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[SPEAKER_00]: Sophisticated computer equipment, cooling systems, electricity, fiber optic, cables, backup generators.

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[SPEAKER_00]: And the estimate is that between now and 2032, they'll spend about $8 trillion, which is nearly five times the market value of the entire New York City property market.

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[SPEAKER_00]: That's the estimate.

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[SPEAKER_00]: No, I will say this.

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[SPEAKER_00]: I don't believe that estimate.

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[SPEAKER_00]: I don't think that estimate will be hit.

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[SPEAKER_00]: I think there will be a, and cooler heads will prevail at some point.

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[SPEAKER_00]: It'll still be large.

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[SPEAKER_00]: There'll be much bigger.

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[SPEAKER_00]: There still be spending on,

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[SPEAKER_00]: AI infrastructure, but I think it's going to be far less than the current trajectory.

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[SPEAKER_00]: This is very common.

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[SPEAKER_00]: You look back in history, it's saying, there's a new technology or a new exciting thing companies are spending money on to grow their business and they get all jazzed up and they just throw money everywhere, especially because investors are excited about it.

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[SPEAKER_00]: And then, eventually, reality hits and they realize, you know what?

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[SPEAKER_00]: Probably spend a little too much money here.

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[SPEAKER_00]: Maybe not quite as much enough there, and we reallocate some capital.

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[SPEAKER_00]: Balance sheets get stretched.

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[SPEAKER_00]: Investor, apetite, and capital availability becomes a tighter.

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[SPEAKER_00]: That's extremely likely to happen over the coming years.

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[SPEAKER_00]: Does me, let's get can't.

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[SPEAKER_00]: be a lot, but it's not going to be as much as the expectations.

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[SPEAKER_00]: But then the less that doesn't matter right now.

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[SPEAKER_00]: What matters is what companies are spending because they are spending in a big way.

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[SPEAKER_00]: And these end, or these components, don't just go into, yeah, I got it.

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[SPEAKER_00]: So there's the go into things like smartphones, video game consoles, cars.

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[SPEAKER_00]: Remember the chip shortage we had during COVID?

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[SPEAKER_00]: that impacted the auto market.

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[SPEAKER_00]: Same thing's happening now.

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[SPEAKER_00]: And you see that with yesterday's announcement, that Tim Cook said that he hasn't seen this in over 40 years that the jump in their underlying costs for their products.

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[SPEAKER_00]: So there's some interesting data points here.

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[SPEAKER_00]: Demand for AI is leading to higher prices, according to the National Association of Business Economics, they released on Monday, 81% of respondents said AI build out will add to inflation over the next year.

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[SPEAKER_00]: And you're seeing it already in the inflation numbers, since the computer is software and accessories or 15% year of year in May, wholesale electronic components and accessories up 20% from a year earlier.

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[SPEAKER_00]: And this isn't just about tariffs.

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[SPEAKER_00]: Tariffs and oil, these are one-time events.

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[SPEAKER_00]: AI, this demand shock is going to persist for a number of years.

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[SPEAKER_00]: And the big question is, when can these companies really catch up to the demand and build out the capacity to bring this inflation down?

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[SPEAKER_00]: And then there's the electricity.

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[SPEAKER_00]: Electricity prices up 6% annually this year, and next, most likely.

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[SPEAKER_00]: The good news, it's only two and a half percent of consumer spending, but for lowering can consumers, it can be very big.

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[SPEAKER_00]: Let's pay the back to the Invest Talk Voice Bank for a quite fresh question now.

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[SPEAKER_06]: Hey, Invest Talk.

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[SPEAKER_06]: I have a question on ticker symbol, DLSK.

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[SPEAKER_06]: They do Bitcoin mining, but it looks like they're transitioning into the data sense around.

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[SPEAKER_06]: what you think about them.

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[SPEAKER_06]: Thank you.

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[SPEAKER_00]: The financials are horrible.

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[SPEAKER_00]: This is the story I see this all the time.

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[SPEAKER_00]: This is probably one of the dumbest shell games you find out there is when a company pivots to the hot thing, right now it's the idea of that infrastructure.

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[SPEAKER_00]: Next time it'll be something else and sure before it was, they pivots to Bitcoin mining from something else.

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[SPEAKER_00]: Another very volatile, and you can make a lot of money on a trade in the short term.

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[SPEAKER_00]: But it comes to creating value for shareholders.

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[SPEAKER_00]: That's not, this is not what you want to own.

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[SPEAKER_00]: Just go look at a chart, go look at a monthly chart.

19:57.092 --> 20:00.395
[SPEAKER_00]: It's down into the right, basically.

20:01.295 --> 20:03.377
[SPEAKER_00]: Speak down in 2021, back around $41 per share.

20:03.397 --> 20:04.738
[SPEAKER_00]: It bottoms in 2022 around $3 per share.

20:09.766 --> 20:14.988
[SPEAKER_00]: But it rallied again to 23 and then back down to 8 or 7, now it's back up again.

20:16.289 --> 20:21.131
[SPEAKER_00]: As is choppy, this is not an investment, this is a trade only, stay far away.

20:21.731 --> 20:23.792
[SPEAKER_00]: Now we're heading to a break, right, if you're calls now at 8.99 sharp.

20:26.173 --> 20:30.256
[SPEAKER_00]: At KPP Financial, Accountability means more than advice.

20:30.976 --> 20:35.700
[SPEAKER_00]: It means we invest alongside you through our parallel investing approach.

20:36.340 --> 20:44.165
[SPEAKER_00]: When we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.

20:44.946 --> 20:47.848
[SPEAKER_00]: Same day, same price, same percentage.

20:48.508 --> 20:51.731
[SPEAKER_00]: If your portfolio moves, ours does too.

20:52.371 --> 20:53.292
[SPEAKER_00]: That is alignment.

20:53.752 --> 20:55.013
[SPEAKER_00]: That is transparency.

20:55.513 --> 20:57.554
[SPEAKER_00]: That is the KPP difference.

20:58.434 --> 21:03.137
[SPEAKER_00]: Visit investtalk.com to get your free portfolio review.

21:12.463 --> 21:24.451
[SPEAKER_02]: The weekend is here or almost here, but you've got financial investment questions, so step up and call in, in Vestalk, 88899 chart.

21:28.093 --> 21:37.319
[SPEAKER_00]: Our main focus point today is about hedging currency risk with dollar and rising recently

21:41.710 --> 21:53.792
[SPEAKER_00]: more, most particularly against British pound, the Japanese, yen, mainly countries that have a worse economic and fiscal picture than we do.

21:53.812 --> 22:05.254
[SPEAKER_00]: I know that's hard to believe, but there are countries out there that are doing worse than us, from a balance sheet perspective, from a debt perspective.

22:05.874 --> 22:10.115
[SPEAKER_00]: And this can have a large impact when you are investing in international

22:11.292 --> 22:12.212
[SPEAKER_00]: investments of any kind.

22:12.672 --> 22:16.673
[SPEAKER_00]: The first one you always want to pay attention to, though, is the Japanese Yen.

22:17.793 --> 22:18.013
[SPEAKER_00]: Why?

22:18.033 --> 22:21.074
[SPEAKER_00]: Because it's all about the Yend Harry trade.

22:21.094 --> 22:22.514
[SPEAKER_00]: This came into focus.

22:22.934 --> 22:24.554
[SPEAKER_00]: It was a summer of 2024.

22:25.454 --> 22:27.515
[SPEAKER_00]: When we had the big Yend carry trade online.

22:28.475 --> 22:34.056
[SPEAKER_00]: So what happens here is that the Yend being weak keeps the carry trade going.

22:35.156 --> 22:37.776
[SPEAKER_00]: It makes the carry trade makes sense.

22:38.697 --> 22:39.897
[SPEAKER_00]: It's when the Yend starts to

22:41.735 --> 22:49.471
[SPEAKER_00]: that position or investors have to position, readjust their positioning and close out some position.

22:49.552 --> 22:52.137
[SPEAKER_00]: And that also closes out borrowing.

22:53.136 --> 22:59.682
[SPEAKER_00]: When investors are executing a territory, they're effectively borrowing money in yen.

23:00.362 --> 23:02.664
[SPEAKER_00]: Remember, money is fungible.

23:03.085 --> 23:03.725
[SPEAKER_00]: What does that mean?

23:04.446 --> 23:12.072
[SPEAKER_00]: Is that you can borrow, it almost any currency, and then you take that currency and you translate into another currency.

23:12.893 --> 23:17.137
[SPEAKER_00]: So a lot of people think that it's just about how much lending is going on here in the United States.

23:17.978 --> 23:18.818
[SPEAKER_00]: That's not always true.

23:18.838 --> 23:20.300
[SPEAKER_00]: Practice not true.

23:21.317 --> 23:27.158
[SPEAKER_00]: It's what's happening globally is global liquidity and lending expanding or is it contracting.

23:27.578 --> 23:36.360
[SPEAKER_00]: And Japanese banks, they produce a lot of global liquidity by lending out into the marketplace through the Yan Kary Trade.

23:36.580 --> 23:48.603
[SPEAKER_00]: So when you're investing in what's happening is if you look at the non-currency hedged, or say that, yeah, the currency hedged version of Japanese stocks that are going up, but the currency's going down.

23:49.623 --> 23:52.784
[SPEAKER_00]: So for domestic Japanese investors, they're doing very well.

23:53.264 --> 23:54.404
[SPEAKER_00]: They like the end going down.

23:54.444 --> 23:58.506
[SPEAKER_00]: It makes their products and their businesses more competitive for export.

23:59.086 --> 24:02.787
[SPEAKER_00]: But if you're a US investor, you earn 10% in Japanese stocks.

24:03.607 --> 24:07.128
[SPEAKER_00]: But when the end depreciates 10% you're net effective zero.

24:07.348 --> 24:09.249
[SPEAKER_00]: So this is why currencies matter.

24:09.289 --> 24:12.330
[SPEAKER_00]: This is why global growth matters.

24:13.430 --> 24:18.732
[SPEAKER_00]: So when you're investing in foreign stocks, you're implicitly speculating on the country's currency.

24:20.262 --> 24:22.563
[SPEAKER_00]: know what about other countries around the world.

24:23.703 --> 24:40.170
[SPEAKER_00]: There's certainly China, China's trying to depreciate their currency for one of the reasons why gold's going up because they're actually moving a lot, they're actually trying to devalue that you on against gold, they have a difficult debt situation as well.

24:40.190 --> 24:43.451
[SPEAKER_00]: It's not necessarily on the national level, but it's a lot of times on the local level.

24:44.251 --> 24:47.873
[SPEAKER_00]: So aggregate debt in China is actually larger than us.

24:48.834 --> 24:52.239
[SPEAKER_00]: So that currency move matters as well, especially to their exports.

24:52.940 --> 25:01.813
[SPEAKER_00]: And when the dollar goes up, that tightens financial conditions, not just here domestically, but abroad as well, because their currencies are appreciating a lot of their debt is dominated.

25:01.853 --> 25:04.076
[SPEAKER_00]: And dollars, it makes harder to repay that debt.

25:04.837 --> 25:11.662
[SPEAKER_00]: and a lot of them are importing raw materials, being commodities that are priced in dollars, like oil.

25:12.182 --> 25:16.866
[SPEAKER_00]: So countries like China and India, they are big importers of oil.

25:17.446 --> 25:18.106
[SPEAKER_00]: What do they have to do?

25:18.167 --> 25:21.969
[SPEAKER_00]: They have to raise rates to defend their currency, prevent capital flight.

25:22.610 --> 25:23.070
[SPEAKER_00]: What does that do?

25:23.130 --> 25:27.273
[SPEAKER_00]: It slows their local economy and it reduces their equity valuations.

25:27.693 --> 25:33.858
[SPEAKER_00]: This is how our policy eventually impacts the policies of countries around the world.

25:34.751 --> 25:43.875
[SPEAKER_00]: So while I like getting foreign exposure, you have to understand the risks that you are exposing yourself, too, which is currency and it can cut both ways.

25:44.355 --> 25:54.620
[SPEAKER_00]: When the dollar eventually goes into a longer downturn, which I think will eventually get there, you're probably going to see, you will see those foreign stocks start to outperform.

25:55.220 --> 26:01.663
[SPEAKER_00]: They've been outperforming since the beginning of last year, and I do think that does continue over the long term.

26:01.703 --> 26:08.606
[SPEAKER_00]: So while there are risks, I think there are risks that are well, that are smart to be taken in this market.

26:09.106 --> 26:10.366
[SPEAKER_00]: Let's go with a YouTube comment question.

26:10.987 --> 26:18.510
[SPEAKER_00]: Routy says, all right, Investock, hope you buckled up for this one because I wasn't, I wasn't when I initiated this position aim at.

26:18.690 --> 26:21.151
[SPEAKER_00]: I bought this in the 150s and let's see what it at.

26:21.512 --> 26:28.102
[SPEAKER_00]: Now, AMHT, I bought it as a value play, and that had some good growth, and they were buying back a lot of shares.

26:28.443 --> 26:31.648
[SPEAKER_00]: Now this one is one of the major AI Fab companies, and it's moaning.

26:32.209 --> 26:34.052
[SPEAKER_00]: It's actually a company we own for clients, so.

26:35.450 --> 26:36.110
[SPEAKER_00]: Yeah, it is.

26:36.290 --> 26:36.590
[SPEAKER_00]: Mooting.

26:37.951 --> 26:44.693
[SPEAKER_00]: I got cute side of selling calls when it topped 300, because the earnings name made me think it was fairly valued.

26:44.753 --> 26:47.454
[SPEAKER_00]: Now it seems earnings increase are getting forecast every week.

26:47.994 --> 26:49.815
[SPEAKER_00]: It's one of the doubles since my initial call.

26:50.255 --> 26:52.076
[SPEAKER_00]: I've gotten burns on cover calls before.

26:52.116 --> 26:55.897
[SPEAKER_00]: However, this one is so dramatic, rolling it up and out, does it seem possible.

26:56.557 --> 26:59.318
[SPEAKER_00]: I went ahead and bought the contract back and still owned the shares.

26:59.458 --> 27:01.299
[SPEAKER_00]: However, I feel like they're fairly valued.

27:01.319 --> 27:02.359
[SPEAKER_00]: A surprise emotional side.

27:05.232 --> 27:12.455
[SPEAKER_00]: Would you keep selling new calls, five to ten percent of the money or sell them in the money calls at a lower price assuming at some point we will get a pullback?

27:13.096 --> 27:15.997
[SPEAKER_00]: I would probably sell them a little bit in the money.

27:17.798 --> 27:28.903
[SPEAKER_00]: That's something a lot of love investors failed to realize is that you actually make more money in the long run.

27:29.504 --> 27:32.005
[SPEAKER_00]: by selling calls closer to the money.

27:32.425 --> 27:50.532
[SPEAKER_00]: That sounds kind of intuitive because you're really limiting your upside, but most of the time you're selling it with implied volatility, that is higher than what is called realized volatility, especially when you're selling those close to the money, or in this case, in the money.

27:51.352 --> 27:57.114
[SPEAKER_00]: Because there's a lot of speculators here, and you want to give as much premium and frankly,

27:59.052 --> 27:59.652
[SPEAKER_00]: at these levels.

27:59.713 --> 28:06.637
[SPEAKER_00]: So I would be selling them in the money because I do think you get a material pull back in the short term.

28:06.677 --> 28:11.541
[SPEAKER_00]: So that's applied materials, and that's how it handle your position here.

28:11.881 --> 28:16.044
[SPEAKER_00]: Now in front of us, we generally make time to fit a quick rundown of some key benchmark numbers.

28:16.084 --> 28:17.125
[SPEAKER_00]: Let's hit on that right.

28:17.145 --> 28:22.749
[SPEAKER_00]: Now the two are yield was at 4.09%, a couple of these back, it was at 4.079%, so up a little bit,

28:26.518 --> 28:32.106
[SPEAKER_00]: In the past couple weeks, it shows that the Fed is likely to tighten a little bit more, going forward.

28:32.126 --> 28:39.115
[SPEAKER_00]: So we'll have the two-year yield usually is closely tied to Fed funds rate or expectations of where the Fed funds rate are going.

28:40.193 --> 28:59.547
[SPEAKER_00]: 10 year treasury three so I 4.37 by percent two weeks goes at 4.47 nine so that's gone down a little bit which you're seeing actually in the bond market is a flattening of the yield curve higher on the short end a little bit lower on the on the back end that is actually negative.

29:00.527 --> 29:01.669
[SPEAKER_00]: For global liquidity.

29:02.710 --> 29:05.434
[SPEAKER_00]: So just had to heads up there when you get that flattening.

29:05.774 --> 29:06.335
[SPEAKER_00]: What does that mean?

29:06.555 --> 29:17.689
[SPEAKER_00]: That means that banks are incentivized a little less because they're cost the capitals on the short end Then they go a lend-long rate you borrow short you lend-long and when that that curve flattens that means that

29:18.763 --> 29:24.987
[SPEAKER_00]: the spread that they're getting is smaller, which means they tend to lend a little bit less.

29:25.407 --> 29:30.491
[SPEAKER_00]: So that continues, that could be a broader issue as we head into the back half of the year.

29:31.071 --> 29:32.092
[SPEAKER_00]: Gold, 4,075 announced?

29:34.193 --> 29:36.234
[SPEAKER_00]: That's down about $150 from a week ago.

29:36.254 --> 29:42.638
[SPEAKER_00]: I do think we're getting a sentiment washout in the golden silver market over the past week or so, getting a lot of signs.

29:42.698 --> 29:50.602
[SPEAKER_00]: Their gold was at 58-75 announced, that's down at $9.40 from a couple of weeks ago, so a pretty big move on that front.

29:50.622 --> 29:56.306
[SPEAKER_00]: But once again, I think you're getting that sentiment washouts and the inverse of what we saw back in January.

29:56.986 --> 30:04.109
[SPEAKER_00]: Oil was selling at $69.84, about $15.11, $15.11 decreased from a couple weeks back.

30:04.609 --> 30:10.251
[SPEAKER_00]: Obviously on the Iran resolution, gasoline prices, $3.90 a gallon.

30:10.271 --> 30:16.134
[SPEAKER_00]: And here in California, we're at $5.48 per gallon, 30 cents decreased from just a couple weeks ago.

30:21.211 --> 30:29.675
[SPEAKER_00]: For comparison, Iowa, guess prices are $3.53 per gallon, nearly $2 less than more paying here.

30:29.835 --> 30:39.440
[SPEAKER_05]: I have a question, I recently sold some covered calls and now the price for stock is over my strike price.

30:39.881 --> 30:44.703
[SPEAKER_05]: I was wondering if you recommend if I just wait until the shares get called away.

30:46.065 --> 30:49.946
[SPEAKER_05]: or sell the option and lose out on the intrinsic value of the option.

30:50.346 --> 30:51.947
[SPEAKER_05]: I appreciate your answer.

30:52.127 --> 30:52.467
[SPEAKER_05]: Thank you.

30:54.107 --> 30:55.328
[SPEAKER_00]: Oh, this is this is great.

30:56.768 --> 30:58.608
[SPEAKER_00]: It's always reminds me of questions like this.

30:58.628 --> 31:11.472
[SPEAKER_00]: It reminds me how quickly people get into positions, whether that's just owning the underlying position or selling a cover call or whatever selling a put, especially in the option markets because it can be a bit complex.

31:12.602 --> 31:24.265
[SPEAKER_00]: people go in with not really a plan, not really understanding of why they're doing it's and what would happen if the stock goes down, stays flat, goes up, et cetera.

31:25.346 --> 31:29.567
[SPEAKER_00]: It's very important for you to go into these trades with your eyes wide open.

31:29.607 --> 31:33.408
[SPEAKER_00]: We run a cover call strategy, it's called equity plus if you don't check it out so we're on the website, but

31:34.810 --> 31:37.351
[SPEAKER_00]: So I'm very familiar with selling calls.

31:37.391 --> 31:41.673
[SPEAKER_00]: And sometimes you sell a call and it goes in the money, meaning your upside was limited.

31:42.133 --> 31:43.093
[SPEAKER_00]: And you have a couple of options.

31:44.454 --> 31:46.755
[SPEAKER_00]: Number one is you can just let it get called away.

31:47.315 --> 31:52.417
[SPEAKER_00]: Still made money if you're selling it at a higher strike price, you know, out of the money call that actually goes in the money.

31:53.058 --> 31:54.098
[SPEAKER_00]: That's actually a good thing.

31:54.118 --> 31:57.159
[SPEAKER_00]: A lot of people would get upset about it, but the reality is it's a good thing.

31:57.179 --> 31:58.620
[SPEAKER_00]: Yeah, you wish you didn't sell the call, but

31:59.410 --> 32:06.195
[SPEAKER_00]: They're probably a dozen others where you sold the call and you actually kept all the premium and it was better off that you didn't.

32:06.215 --> 32:11.198
[SPEAKER_00]: So you have to look at selling calls and aggregate, but you could just let it get called the way.

32:11.218 --> 32:15.802
[SPEAKER_00]: Or you could roll it, you could roll it either, you roll it out.

32:16.342 --> 32:19.524
[SPEAKER_00]: So in further date, I would probably go 30 to 60 days out.

32:20.862 --> 32:45.018
[SPEAKER_00]: then you can either roll it at the same strike or up or even down potentially probably same strike or up a lot depends on what premium you're getting also a bullish you are in the name is it over bought do you think it needs a pullback if so well you probably don't want to roll it up you just want to roll it maybe out another month you get some premium for that you get a credit more income etc.

32:50.872 --> 32:52.973
[SPEAKER_00]: It pays a dividend and you're holding it in the money.

32:53.954 --> 33:04.360
[SPEAKER_00]: If the intrinsic value left in the stock or the time value, excuse me, the time value left in the stock is lower than the dividend that you would be receiving, that's going to be exercised.

33:04.420 --> 33:08.363
[SPEAKER_00]: It's going to be called away from you, most likely before it pays you that dividend.

33:08.423 --> 33:09.564
[SPEAKER_00]: So just heads up on that side.

33:09.904 --> 33:12.425
[SPEAKER_00]: Let's make it to an arrow from eight to eight, 90 men chart.

33:20.355 --> 33:21.936
[SPEAKER_07]: It's a nuclear energy.

33:22.296 --> 33:26.939
[SPEAKER_07]: Actually, it's just in the space, especially because of all the data centers popping up.

33:27.680 --> 33:35.325
[SPEAKER_07]: And I know a lot of Mac 7 have signed 20 year plus contracts with some new repositories already.

33:36.202 --> 33:41.167
[SPEAKER_07]: And I think it will be what these data says we'll be using in the future.

33:41.587 --> 33:51.857
[SPEAKER_07]: I like the SMR ticker at where it's sat right now and thinking it's been a good five years so hold until hopefully it takes off.

33:52.297 --> 33:59.124
[SPEAKER_07]: One of the kind of get your thoughts and see if you guys have similar opinions on it or if you guys are against it.

33:59.504 --> 34:01.106
[SPEAKER_07]: Thank you so much and I'll go to yours too.

34:01.858 --> 34:02.478
[SPEAKER_00]: Here's the issue.

34:03.199 --> 34:06.000
[SPEAKER_00]: You just said, I think that's what they're going to be using in the future.

34:06.940 --> 34:22.426
[SPEAKER_00]: Based on what, what besides the narrative and the idea, the pie in the sky narrative, they will actually be rolling their technology out in a material way over the coming five to ten years.

34:22.907 --> 34:27.769
[SPEAKER_00]: What about that has had that's currently happened, actually makes you believe that.

34:32.098 --> 34:34.900
[SPEAKER_00]: This is in a strong downtrend, relative strength is 8.

34:35.741 --> 34:36.782
[SPEAKER_00]: As always, lost money.

34:37.762 --> 34:39.824
[SPEAKER_00]: And the idea of this is great.

34:40.605 --> 34:45.569
[SPEAKER_00]: Yeah, small modular actors, but the problem is, what about the regulatory framework?

34:46.109 --> 34:47.250
[SPEAKER_00]: Set it up for success.

34:48.030 --> 34:49.051
[SPEAKER_00]: I'm not seeing anything.

34:49.912 --> 34:52.374
[SPEAKER_00]: Yes, they're exploring nuclear power.

34:52.434 --> 34:54.275
[SPEAKER_00]: These are existing nuclear facilities.

34:55.136 --> 34:57.058
[SPEAKER_00]: If I'm gonna bet on something, I wanna say,

34:57.933 --> 35:03.978
[SPEAKER_00]: It can produce energy today, within current government regulations.

35:05.119 --> 35:08.041
[SPEAKER_00]: That's why blue energy has been booming because they actually have that.

35:09.022 --> 35:16.989
[SPEAKER_00]: I said this a while ago, I said, I rather bet on Bloom than a small modular reactor company.

35:17.429 --> 35:24.675
[SPEAKER_00]: Now, I think Bloom's low value now, it's probably, you know, topping, but over the long term, I much rather own a blue manager.

35:25.238 --> 35:26.419
[SPEAKER_00]: So I'm passing on SMR.

35:26.900 --> 35:29.382
[SPEAKER_00]: They were heading to our final break, because the questions are now at 8.899 chart.

35:34.775 --> 35:38.376
[SPEAKER_02]: There are a few things that make KPP financial special.

35:38.917 --> 35:41.198
[SPEAKER_02]: One of them is parallel investing.

35:41.578 --> 35:44.899
[SPEAKER_02]: This means they invest right alongside their clients.

35:45.359 --> 35:46.360
[SPEAKER_02]: Here's how it works.

35:46.860 --> 35:54.923
[SPEAKER_02]: When KPP financial makes a trade for their clients, just in client makes the same trade for himself and KPP.

35:55.443 --> 35:59.585
[SPEAKER_02]: On the same day, at the same price, and same percentage.

36:00.205 --> 36:02.748
[SPEAKER_02]: No front running, no special treatment.

36:03.308 --> 36:08.073
[SPEAKER_02]: Learn more about parallel investing at investtalk.com.

36:08.734 --> 36:09.174
[SPEAKER_04]: Hi there.

36:09.374 --> 36:14.039
[SPEAKER_04]: I just had a quick question about a couple of semi-conductor companies.

36:14.460 --> 36:22.548
[SPEAKER_04]: One is Skywater Technology, SKYT, and the other was Aluma Inc. ALMU.

36:23.394 --> 36:32.740
[SPEAKER_04]: and I just kind of wanted to get some exposure into the semi-conductor industry and wanted to see which one of these might be a better pick.

36:32.981 --> 36:33.381
[SPEAKER_04]: Thank you.

36:33.781 --> 36:48.951
[SPEAKER_00]: Looking at Skywater technology, small cabinet, 1.7 billion dollar market cap, and it produces silicon wafers provision of semiconductor development, manufacturing services, packaging services, high-return equity, 87%

36:53.362 --> 37:02.007
[SPEAKER_00]: Though our turning negative for next year, historically it hasn't had a very high return equity, so this is a very new thing.

37:02.948 --> 37:06.250
[SPEAKER_00]: Once again, historically it's not been very profitable.

37:06.390 --> 37:11.333
[SPEAKER_00]: I really don't like those companies that are just kind of newly profitable.

37:12.673 --> 37:13.454
[SPEAKER_00]: Let's see,

37:21.436 --> 37:23.898
[SPEAKER_00]: We're going to $62 million mark a cab.

37:23.938 --> 37:25.619
[SPEAKER_00]: Actually, negative return and equity.

37:26.580 --> 37:29.062
[SPEAKER_00]: Be cash flow remains negative.

37:30.002 --> 37:34.065
[SPEAKER_00]: Yes, revenue growth is starting to explode.

37:34.205 --> 37:42.772
[SPEAKER_00]: But yeah, I mean, it's really R&D around looks like optical sensors, bumping.

37:43.369 --> 37:46.391
[SPEAKER_00]: some of my characters for sensing, communication, and computer application.

37:46.791 --> 37:50.294
[SPEAKER_00]: I'd really have to know about technology, can they get to some level of profitability?

37:50.734 --> 38:01.201
[SPEAKER_00]: Well, that's again, their business is just exploded as of late, but how sustainable is that in markets are at least analyst, or not expecting it to earn money this year next year?

38:02.121 --> 38:07.545
[SPEAKER_00]: So, if I'm making one of the other, it'd be SkyT, but neither of them give me really excited to be able to make the call.

38:07.963 --> 38:11.785
[SPEAKER_00]: Let's talk a little bit about the crystal ball challenge.

38:11.866 --> 38:13.106
[SPEAKER_00]: This is a really interesting one.

38:13.767 --> 38:17.769
[SPEAKER_00]: It was launched by Elm Wealth a couple of years ago.

38:18.750 --> 38:35.541
[SPEAKER_00]: What they did was they gave people and you can actually still take the test and their website or take the challenge, which is they'll give you the front page of the newspaper, the following day, and allow you to make a bet on what the market did,

38:36.820 --> 38:39.302
[SPEAKER_00]: The previous day, just give you the headlines.

38:39.942 --> 38:43.945
[SPEAKER_00]: It's it, you know, CPI went up or the Fed did this or whatever, right?

38:44.725 --> 38:54.352
[SPEAKER_00]: What's interesting is that if you, for most investors, if you got that news, you didn't actually do a good job of making money.

38:55.686 --> 39:02.848
[SPEAKER_00]: You go long or short the S&P, you can go long and short the 30 year bond, you can use leverage, and this is from 2008 to 2022.

39:02.888 --> 39:06.989
[SPEAKER_00]: So you get one page per year from 2002 to 2022.

39:07.429 --> 39:09.549
[SPEAKER_00]: Once again, that longer short from the previous day.

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[SPEAKER_00]: On average, people broke even.

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[SPEAKER_00]: About a sixth of the people, what broke?

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[SPEAKER_00]: This is over 60,000 people.

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[SPEAKER_00]: So what they did was they said, okay, let's do the same thing with AI.

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[SPEAKER_00]: And overall, two of them didn't do very well.

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[SPEAKER_00]: Gemini and Grok actually lost money that took a million dollars.

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[SPEAKER_00]: And Gemini lost over half of it.

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[SPEAKER_00]: Grock lost a little bit, not a lot, but still, not smart.

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[SPEAKER_00]: Chatchy BT and Claude did much better.

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[SPEAKER_00]: Claude was by far the best, turned a million into 2.6 million.

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[SPEAKER_00]: Chatchy BT for 10 million to little less than 1.5 million.

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[SPEAKER_00]: But what was their biggest flaw, especially Grock and Gemini?

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[SPEAKER_00]: I had to do with position sizing.

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[SPEAKER_00]: So they did, as they just took huge bets.

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[SPEAKER_00]: Bigger bets and they should have.

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[SPEAKER_00]: You know, they were right most of the time, almost all of these, especially if you went into the reasoning models with more sophisticated models, they were right over half the time.

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[SPEAKER_00]: The problem was once again, position sizing.

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[SPEAKER_00]: And so that's the lesson here, is that it's not just about being right or wrong, it's about actually how

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[SPEAKER_00]: much risk you're taking and sometimes you have to take more risks sometimes less but it's about making sure your position sizing is aligned with your wrist tolerance level.

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[SPEAKER_00]: Now I'm Justin Klein, reminding you about KP Financial's parallel investing will make a trade for our clients or the same trade for ourselves, same day same price same percentage, no front running, no special treatment, we invest right alongside our clients.

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[SPEAKER_00]: Please tell your friends and family about a free podcast downloads.

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[SPEAKER_00]: Do you find any time at iTunes or Spotify?

40:55.161 --> 40:57.263
[SPEAKER_00]: Check out our videos over on our YouTube channels.

40:57.323 --> 41:01.506
[SPEAKER_00]: Well, and just remind you, our next wealth webinar is coming up on June 30th.

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[SPEAKER_00]: This coming up, this coming Tuesday.

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[SPEAKER_00]: Titles beyond the yield, how to invest for your income needs, and you can register for free over at invest.com.

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[SPEAKER_00]: Independent thinking, should success.

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[SPEAKER_00]: It's the best talk.

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[SPEAKER_00]: Enjoy your weekend.

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