[SPEAKER_01]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.

[SPEAKER_01]: Here's your host, Justin Klein.

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

[SPEAKER_00]: This is our, what do we Wednesday?

[SPEAKER_00]: Wednesday, August 5th, 2026,

[SPEAKER_00]: lot of moving parts in markets.

[SPEAKER_00]: We had the big SpaceX earnings last night.

[SPEAKER_00]: We had more chip stock earnings after the belt today.

[SPEAKER_00]: We have SpaceX stock.

[SPEAKER_00]: Unlock tomorrow.

[SPEAKER_00]: And then we have the economy moving in a lot of different directions.

[SPEAKER_00]: You could

[SPEAKER_00]: You can kind of color with the economy in many ways, depending on which area you want to focus, but our job here is to kind of just fill it all down to a general direction of the economy, how what sectors are performing well and not.

[SPEAKER_00]: And most importantly, is just about the fundamentals of investing.

[SPEAKER_00]: not using your emotions to chase returns or sell when it's down and you panic sell at the bottom.

[SPEAKER_00]: A lot of people do that, right?

[SPEAKER_00]: They buy high and they sell low because they use emotions.

[SPEAKER_00]: And our job here is to keep your eye on the price and focus on what matters.

[SPEAKER_00]: to good, successful decision making.

[SPEAKER_00]: And we do that by answering your financial investment questions.

[SPEAKER_00]: So I encourage you to pick up the phone, give us a call.

[SPEAKER_00]: A to date, 99 chart is the number as usual, and we will also bring you some topics.

[SPEAKER_00]: I think we'll further your education.

[SPEAKER_00]: Maybe about a particular sector or an asset class or just a way to frame your mind so that you can

[SPEAKER_00]: capitalize on an opportunity or maybe avoid pitfalls.

[SPEAKER_00]: So we're going to do all of that in this hour.

[SPEAKER_00]: And 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 question now.

[SPEAKER_04]: Yeah, Mark, who's saying, just curious about this, me, D.I.S.

[SPEAKER_04]: earnings came out, look pretty good.

[SPEAKER_04]: Maybe they're coming back from the dead.

[SPEAKER_04]: Anyway, just your thoughts, we appreciate it, thanks.

[SPEAKER_00]: looking at Disney, D-I-S is the symbol.

[SPEAKER_00]: I'll just kind of pull this up on a separate chart.

[SPEAKER_00]: The earnings will be up 15% this year, it's $6.82, then the 7.45 next year.

[SPEAKER_00]: So it's certainly trending in the right direction.

[SPEAKER_00]: That's the good news for the look here.

[SPEAKER_00]: We're all the strength is 31 though.

[SPEAKER_00]: So over the last year, it hasn't done so well from a chart perspective.

[SPEAKER_00]: It has been in a solid downturn.

[SPEAKER_00]: $124 per share.

[SPEAKER_00]: Now we're down to 101.

[SPEAKER_00]: Even after the good earnings announcement.

[SPEAKER_00]: Now do you think it's a pretty good value trading at mid the low team for looking multiple?

[SPEAKER_00]: That's good.

[SPEAKER_00]: However, I think there are some long-term structural challenges with Disney.

[SPEAKER_00]: And that really has to do with the way that kids are consuming content.

[SPEAKER_00]: They used to be all about the movies and not to sit at Disney is not part of the landscape of childhood entertainment.

[SPEAKER_00]: But it's getting increasingly crowded out by other avenues in the YouTube, for example, a gaming is big and they're not that big in the gaming.

[SPEAKER_00]: That's why they have been trying to acquire things like Star Wars in order to grow their IP in an era where it's becoming more difficult.

[SPEAKER_00]: And so it's harder to get their characters, their stories, and find them more people, and more kids, excuse me.

[SPEAKER_00]: So ultimately, that is, I think, an issue.

[SPEAKER_00]: And so I think there's some long-term headwinds there that you have to certainly consider when you're looking at Disney.

[SPEAKER_00]: But like I said, from an earnings standpoint, from a valuation standpoint, it is starting to look relatively cheap.

[SPEAKER_00]: $7 billion in free cash flow on a Mark Kappa 177 billion

[SPEAKER_00]: It's not amazing, it's only about a 3% free cashable yield, so certainly not a bargain or anything like that.

[SPEAKER_00]: But enterprise value, the EBITDA around 9.8, let's see what it historically trades at.

[SPEAKER_00]: Yeah, this isn't a low end of its enterprise value, the EBITDA range, that's a good thing.

[SPEAKER_00]: Return equity though, it's under 11%.

[SPEAKER_00]: That's kind of the issue that I was talking to you about.

[SPEAKER_00]: It's just

[SPEAKER_00]: You know, pre-COVID 2018, the return equity was 26% trending higher, really through from the recession, no from 01 when it was in the single digits through all the way, like I said, a high around 26%.

[SPEAKER_00]: So it's profitability was increasing, but really post-COVID and beyond, it's been pretty meager.

[SPEAKER_00]: So that is ultimately, I think, the issue.

[SPEAKER_00]: I think it's a decent value, but it's not the same business as it was.

[SPEAKER_00]: Especially when you think of ESPN, the only ESPN, and as more people are cutting chords, they are losing subscribers.

[SPEAKER_00]: They're having their over top options from Disney Plus to ESPN Plus.

[SPEAKER_00]: And I think that's a more fractured media landscape that I was speaking about.

[SPEAKER_00]: So,

[SPEAKER_00]: While I like Disney, I don't like it as much as I used to like it.

[SPEAKER_00]: Let's say that the business just isn't quite as good.

[SPEAKER_00]: So I think it should trade closer to the high teens.

[SPEAKER_00]: So from a multiple perspective, and it's in the low teens.

[SPEAKER_00]: So I would say, is there some upside?

[SPEAKER_00]: Sure, but I don't think it's the juggernaut of a business that it used to be.

[SPEAKER_00]: Now, with a great show yesterday, we look into this question, our prediction markets, legal.

[SPEAKER_00]: Talk to about how she's lawsuit and what it means for investors.

[SPEAKER_00]: We answered questions about metadata resources, MTDR, and if you happen to miss it, go check it out, the best way to get every show is to follow the best talk wherever you get your podcast.

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

[SPEAKER_00]: My main focus point today concerns a story, Iran peace signals, and more market volatility.

[SPEAKER_00]: How do investment headlines are moving markets up and down?

[SPEAKER_00]: You're getting websites of Iran strikes, call-offs, and kind of misinformation around whether or not there is actually a deal in place or not.

[SPEAKER_00]: But ultimately, there's a lot of noise.

[SPEAKER_00]: What does that mean for you?

[SPEAKER_00]: How do you navigate this type of environment?

[SPEAKER_00]: We'll take a look at that.

[SPEAKER_00]: Also, I want to unpack airlines, airline business.

[SPEAKER_00]: It's changed dramatically over the years.

[SPEAKER_00]: Very heavily focused now on the miles business.

[SPEAKER_00]: So we'll look at that as a sector.

[SPEAKER_00]: So if you're ever looking at an airline stock, you have some contexts as no longer just a transportation company.

[SPEAKER_00]: We'll take a look at that.

[SPEAKER_00]: And then, how companies are shifting their use of AI now that they're getting the bill, getting the bill.

[SPEAKER_00]: So we'll look at that as well.

[SPEAKER_00]: We also have voice bank questions on Palo Alto networks and then taking profits.

[SPEAKER_00]: And of course, questions that came in via the comments section on the Best Talk YouTube channel.

[SPEAKER_00]: But we're going to head into a quick break.

[SPEAKER_00]: Please remember you can call any time and leave your question on the Best Talk Voice Bank.

[SPEAKER_00]: If you're looking to be our live stream, or possibly an AMT-20 in the Bay Area, you can call me right now at 8 a.m. at 9 a.m. at chart.

[SPEAKER_00]: Up next, I'll talk about today's market activity.

[SPEAKER_01]: Invest talk phone lines never closed and now just in client The Invest talk phone lines never closed and now just in client is here taking your calls live Invest talk 88899 chart Let's go take a look at the market today.

[SPEAKER_00]: It was white v

[SPEAKER_00]: Oh, quite the volatile day.

[SPEAKER_00]: Let's say that you had SpaceX after hours yesterday, down, what were we down today, a lot?

[SPEAKER_00]: 13% on the day, continued pressure, more unlock.

[SPEAKER_00]: One more shares unlock.

[SPEAKER_00]: I think there's around 5% float right now.

[SPEAKER_00]: It's going to go to 11, almost 12% float.

[SPEAKER_00]: So there's a lot of shares to unlock that are can now be sold tomorrow.

[SPEAKER_00]: So I think there's going to be some more pressure to the downside there.

[SPEAKER_00]: You had AMD had earnings that were not as impressive.

[SPEAKER_00]: AMD down 7% Google down 4% on the day.

[SPEAKER_00]: Amazon down 1.7 after their recent jump.

[SPEAKER_00]: Tesla continues to be weighed down as well.

[SPEAKER_00]: And then you have the names like Nvidia up 3.5% on the day.

[SPEAKER_00]: So that was wasn't really impacted by the poor.

[SPEAKER_00]: earnings report from AMD, but certainly a mixed bag across the board.

[SPEAKER_00]: You had to dial up about a half a percent.

[SPEAKER_00]: Nasdaq though was down, nearly one percent.

[SPEAKER_00]: The S&P was down slightly only 17 basis points.

[SPEAKER_00]: So kind of a mixed bag.

[SPEAKER_00]: You've got a nice little rally, but I'm not really buying it over the last couple of days.

[SPEAKER_00]: It looks very weak, looks like a, to me, a bit of a false breakout.

[SPEAKER_00]: I still think we're going to go through a corrective period here, probably on the same fill around election time.

[SPEAKER_00]: So I'm not really buying this rally aggressively being patient on it.

[SPEAKER_00]: There's an economic news, really on the ice and services front, a 0.1 point, to 54.1 in July.

[SPEAKER_00]: That was below the 54.5 consensus.

[SPEAKER_00]: New orders with the standout.

[SPEAKER_00]: rising from 55.1 to 57.2, but employment started contracting, one from 51.2, I think about 50 in the I7 reporters going to be growth, then the 47.4.

[SPEAKER_00]: So, you know, is this a sign, the labor market is maybe struggling.

[SPEAKER_00]: Remember, services are roughly three quarters of the economy.

[SPEAKER_00]: This is a big factor here now.

[SPEAKER_00]: It's one month.

[SPEAKER_00]: but certainly a mix bag overall.

[SPEAKER_00]: ADP private payroll increased 44,000 in July, falling revised 95,000 in June.

[SPEAKER_00]: That's below consensus as well.

[SPEAKER_00]: So a couple of weaker data points and was that the catalyst for the precious metal rally when you had weaker economic numbers that made it seem like that maybe the Fed won't be raising rates.

[SPEAKER_00]: In the back half of the year, something that's really pushed gold prices up dramatically of 3.7% on the day.

[SPEAKER_00]: It's best day since February.

[SPEAKER_00]: Silver was up 3.4% on the day, Bitcoin up 1% on the day, WTI down 0.7% on the day, third straight decline on more optimism around some sort of deal on the straightive removes.

[SPEAKER_00]: I'm not really buying it if you look at what we're on saying they're saying there's there's there's no deal that we're talking about the American talking about a deal, but they're not really engaging So I'm not very optimistic on that treasuries were

[SPEAKER_00]: a bit stronger with yield to down, one that you base is points across.

[SPEAKER_00]: The curve, you had Disney, like you talked about earlier with earnings, there were a bit better than expected, one of there.

[SPEAKER_00]: And that was about it.

[SPEAKER_00]: If you look at S&P five-learning earnings as a whole, that's 75% have now reported.

[SPEAKER_00]: So we're...

[SPEAKER_00]: vast majority of the way through earning season without a 20% year over year growth in earnings 86% beat which the five you have is just 78% so overall it's been a good earnings season the questions can that continue can the momentum continue in the back half of the year.

[SPEAKER_00]: So that was the market today but let's go pivot over to a question that came in via our YouTube channel.

[SPEAKER_00]: SSJ baller says, you mentioned goal consolidation.

[SPEAKER_00]: Thoughts on a y a a y a.

[SPEAKER_00]: Seems like it's breaking out of resistance.

[SPEAKER_00]: Spores and helps gold and silver mineral.

[SPEAKER_00]: Pause, it's okay.

[SPEAKER_00]: So this would be what we call a junior minor, junior minor.

[SPEAKER_00]: A y a.

[SPEAKER_00]: This is Ia gold and silver.

[SPEAKER_00]: are supposed to make four cents this year with them lose two cents next year they have very little revenue talking about last quarter was 117 million so very small or they located here it looks like is this an Africa headquarters is in Canada look here 3.5

[SPEAKER_00]: look at their chart real quick.

[SPEAKER_00]: Yeah, this is breaking out.

[SPEAKER_00]: The momentum here is good.

[SPEAKER_00]: I I like this free cash flow 55 million on a 3.5 billion dollar market cap turn equity is 22%.

[SPEAKER_00]: So they're just getting to good profitability and this is now at a 52 week high definitely outperforming the broader golden silver space.

[SPEAKER_00]: So I like it.

[SPEAKER_00]: I'm going to say a y a is a thumbs up.

[SPEAKER_00]: Those are the best talk I'll work to use after this break so that you can have questions in now or any time, 8-8-99 chart.

[SPEAKER_05]: Justin Klein is here and ready to tackle your questions.

[SPEAKER_05]: I heard you say multiple times that you prefer shorter duration price rebounds.

[SPEAKER_05]: Can you explain to me why it is more advisable?

[SPEAKER_05]: Call in Vestock 8-8-99 chart.

[SPEAKER_01]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

[SPEAKER_01]: Now the torch has been passed, and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.

[SPEAKER_01]: So when you've got finance and investment questions, don't forget to call in Vestock,

[SPEAKER_00]: Let's talk a little bit about airlines, airlines.

[SPEAKER_00]: Now, historically, they've been pretty poor businesses.

[SPEAKER_00]: They're retight margins, made to low single digits.

[SPEAKER_00]: It's very cyclical, highly capital intensive, all of that, which makes them poor businesses.

[SPEAKER_00]: Most people don't care that much about the airline that they fly as long as it's decent.

[SPEAKER_00]: You know, they're looking for the best price.

[SPEAKER_00]: and a reasonable experience.

[SPEAKER_00]: Now, maybe not bottom in the barrel, maybe avoid that, but for most people, it's about competing on price and for airlines, that's difficult.

[SPEAKER_00]: Now, a lot of them are pushing for more first class, business class tickets, all of that, and that's certainly helping their profitability.

[SPEAKER_00]: But what's helping them the most is actually the credit card businesses.

[SPEAKER_00]: And credit cards are now a competitive weapon in the air lane industry, fighting for more and more travelers.

[SPEAKER_00]: And currently, travelers have about $38 billion worth of airline miles racked up saved.

[SPEAKER_00]: And it's not just about racking up miles now to get free flights.

[SPEAKER_00]: It's also perks.

[SPEAKER_00]: Things like check bags, upgrades, the business class, lounge access.

[SPEAKER_00]: These are all very, very important to these loyalty programs.

[SPEAKER_00]: But most importantly, it's the money that they are raking in from the bank.

[SPEAKER_00]: So how this works is, the banks actually pay the airlines money for their customers.

[SPEAKER_00]: Banks could access to high value customers who haven't, they may have not signed up for a credit card without these travel perks.

[SPEAKER_00]: American Expresses on track to pay Delta $9 billion this year up 10% from last year for its biggest card program.

[SPEAKER_00]: because they're biggest card, that's card, is the Delta American Express.

[SPEAKER_00]: And what happens every time a, somebody swipes at one of these cards, there's interchange fees that,

[SPEAKER_00]: be Sir MasterCard or make Express will get and part of that goes to the bank, and part in the bank has to buy miles and pays the airline, so that's where they're getting the money from.

[SPEAKER_00]: So, money flows to the airlines every time one of the affiliate cards are swept.

[SPEAKER_00]: And these companies are now basing their entire decision-making process around the credit cards.

[SPEAKER_00]: new route station launch, maybe what route station actually take away because it's not as profitable.

[SPEAKER_00]: There's not as many card holders in those cities that would be more loyal to that credit card.

[SPEAKER_00]: It's swipe that card more because they have routes that they can take.

[SPEAKER_00]: For example,

[SPEAKER_00]: The profit margins on selling miles to a bank can be 50% to 70%.

[SPEAKER_00]: And customers are now being drawn to these things, because they're spending more on travel.

[SPEAKER_00]: And these loyalty programs are becoming

[SPEAKER_00]: very important to a lot of people.

[SPEAKER_00]: Years ago, American Airlines lost ground in the big cities like New York where there's a lot of wealthy people because they cut certain routes and that hurt them.

[SPEAKER_00]: And now they're trying to prevent that by keeping space at O'Hare Airport, which another big community.

[SPEAKER_00]: So it's a very interesting change in what's happening with the airline industries and why you have to think of them more as many ways they're kind of like a bank of their own bank.

[SPEAKER_00]: and drop it another invest talk list and a question now.

[SPEAKER_06]: Hi, this is Isaiah from G8 Texas.

[SPEAKER_06]: I'm calling about the stock ticker, EX, EI, Expedia, just looking for your thoughts on the stock in an entry point.

[SPEAKER_06]: Thank you.

[SPEAKER_00]: Well, speaking of travel, I'm this, I think he's, I thought he said EX PI, which is a different company.

[SPEAKER_00]: Yeah, that's XP on, yeah.

[SPEAKER_00]: EXPE is the symbol of Expedia.

[SPEAKER_00]: Erning's associate 25% this year, 16% next year.

[SPEAKER_00]: I think this is a solid business.

[SPEAKER_00]: This is actually a name that's on our watch list, potentially by it's had a nice little run notes, a little bit over bot, but

[SPEAKER_00]: When you're talking about travel, they are also linked up with, if you go, for example, I know this cause our business counts a were chased and so we have chase points and going by and travel, you actually book through Expedia through chase travel.

[SPEAKER_00]: For example, and that's why their cash flow is very strong, which turn equity is 65% very high and very, very solid balance sheet.

[SPEAKER_00]: A lot of this because they get paid up front,

[SPEAKER_00]: And so if you go book something through Expedia, they charge your credit card today with that flight map be for a number of

[SPEAKER_00]: months and they actually can invest that, they can use that capital to earn interest on and that's part of the reason that they do this and then they pay the airline down the line once they actual flight is taken.

[SPEAKER_00]: So there's a lot of, that's just part of their business and nothing that's the only way they make money, but that's certainly a big part of it.

[SPEAKER_00]: So I like the

[SPEAKER_00]: It's a bit overpriced at these levels though, I think it's a bit over-extended, so I would not really be buying right now, but it gets back down to, let's see, and give you a number here, in the mid-200s, I would love to pick up Expedia, but not right now at 320, it's a bit over-body.

[SPEAKER_00]: The next and best talk we'll look into this story.

[SPEAKER_00]: The AI Arms Race is the U.S. lead over China already gone, a pro-euro app, provocative new app and argues the United States has all but lost its advantage over China just as hyper-scalers are posting massive earnings from AI infrastructure spending.

[SPEAKER_00]: We'll examine what this competitive shift means for technology.

[SPEAKER_00]: Technology investors and long-term economic leadership, that story is for tomorrow, but for now, I'm Justin Klein, ready to take your calls any time on 8 and 899 chart.

[SPEAKER_00]: at KPP Financial.

[SPEAKER_00]: Accountability means more than advice.

[SPEAKER_00]: It means we invest alongside you.

[SPEAKER_00]: Through our parallel investing approach, when we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.

[SPEAKER_00]: same day, same price, same percentage.

[SPEAKER_00]: If your portfolio moves, ours does too.

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[SPEAKER_01]: Justin Klein is here now, taking your calls live.

[SPEAKER_01]: Invest Talk, 888-99 chart.

[SPEAKER_00]: around piece signals and market volatility.

[SPEAKER_00]: If you had a really invest when headlines are all over the place, you've seen that constantly you have going to the weekend, there's a ramp up and potential wall hostilities, could create volatility on Fridays, and then just often not because usually it's wait and so after the market close,

[SPEAKER_00]: then you get some sort of big market movements over the weekend and then hostilities drop down or maybe something happens middle of the week.

[SPEAKER_00]: It's all over the place over the past few months, but the bottom line is that this is not a type of scenario that should spark a big change in your portfolio.

[SPEAKER_00]: It's

[SPEAKER_00]: current electorate right now, right here on the one side of the other, it seems, and we know with most things, especially in markets, the answer usually lies somewhere in the middle.

[SPEAKER_00]: But when it comes to your decision making process, headlines shouldn't play a very big role in it.

[SPEAKER_00]: Now, you can step back and you can think of long term ramifications.

[SPEAKER_00]: of this.

[SPEAKER_00]: One example is what I talked about before, which is, you know, if this isn't really pushing oil up dramatically, what are the type of energy companies you want to be in, probably more around logistics, maybe oil and gas, servicing companies, maybe midstream companies that move oil from the wellhead to wherever it's being consumed.

[SPEAKER_00]: and make money based on volume, not price, maybe refining companies, things like that.

[SPEAKER_00]: That's how you wanna look at these headlines.

[SPEAKER_00]: It what does this mean in the bigger picture for different sectors, broader economies over the medium to long term?

[SPEAKER_00]: Headlines are very short term.

[SPEAKER_00]: And those first order effects are often built into the price is very quickly.

[SPEAKER_00]: But it's the long term impact.

[SPEAKER_00]: that is usually underpriced or underappreciated and it's those second and third order effects.

[SPEAKER_00]: So number one, we always say it's diversification.

[SPEAKER_00]: Now there's a typical stock and bond, but there's other asset classes, harder assets, like Golden Silver, for example, maybe I'll turn to the assets.

[SPEAKER_00]: These are all going to be more resilient and less tied to the new cycle.

[SPEAKER_00]: And then within the different sectors or asset classes, how do you gain access to those longer-term prints like?

[SPEAKER_00]: Globalization is now reversing it in some way, shape or form.

[SPEAKER_00]: We're supply chains are more localized.

[SPEAKER_00]: They're being built to be more resilient and secure.

[SPEAKER_00]: Critical resources are now being stockpiled

[SPEAKER_00]: So governments are starting to reshape their thinking.

[SPEAKER_00]: But that doesn't happen overnight, but it does, these events do shift, these headlines do shift the way they think in aggregate.

[SPEAKER_00]: And once again, what are those second and third order consequences of that shift in thinking?

[SPEAKER_00]: You know, you used to be all that just in time inventory and efficiency of inventory.

[SPEAKER_00]: That's different now.

[SPEAKER_00]: So trying to make a short-term buyer sell decision, that's just trading oftentimes the news is priced in very quickly.

[SPEAKER_00]: And at stock market corrections, due to war and doze pullbacks, usually go back up within months.

[SPEAKER_00]: You've seen that as a blade.

[SPEAKER_00]: It could happen, you know, it sold off into end of first quarter, late March, early April, then the market took off.

[SPEAKER_00]: Now, part of that's, I have a part of it.

[SPEAKER_00]: The war didn't really have a broad-based impact on the economy.

[SPEAKER_00]: Yes, in pockets, there's tailwinds to inflation, and that has impacts.

[SPEAKER_00]: But in general, the world tends to keep going, despite pockets of conflict around the world.

[SPEAKER_00]: Remember, these war-torn regions,

[SPEAKER_00]: of the human population, less than 1%.

[SPEAKER_00]: And the tentacles do reach into other areas, but it's usually fairly limited.

[SPEAKER_00]: So extreme spikes in assets or declines in assets over a short period of time due to some sort of headline.

[SPEAKER_00]: What does that mean?

[SPEAKER_00]: It's usually priced in.

[SPEAKER_00]: You missed it.

[SPEAKER_00]: But the second order impacts often aren't.

[SPEAKER_00]: So you must stay anchored to corporate fundamentals, which usually are not impacted too much.

[SPEAKER_00]: Just look at, look at Q2.

[SPEAKER_00]: You think, hey, we're going on.

[SPEAKER_00]: So you're having her moves closed.

[SPEAKER_00]: All of this supply chain issues, while what it earnings do, they're up to 1% in your career.

[SPEAKER_00]: To show you the headlines, usually over estimate the impact.

[SPEAKER_00]: on the broader economy, on different asset classes.

[SPEAKER_00]: So, doesn't mean you ignore them, but you step back, don't get emotional, and focus on the long-term trends.

[SPEAKER_00]: There are 24-7 in Best Talk, voice bank never closes, so you can leave your finance and investment question anytime on 8-899 chart.

[SPEAKER_00]: Here comes a question that came in earlier.

[SPEAKER_02]: just an or Luke and Joe from South Carolina here.

[SPEAKER_02]: Just a question whenever you have investments in like the S&P, EPS, B-O-O or VOT or those types of indexes.

[SPEAKER_02]: I hear you guys talk about taking profit.

[SPEAKER_02]: I'm invested mostly in IRA or Roth IRAs, so they're all retirement accounts.

[SPEAKER_02]: Does it make sense to take profits?

[SPEAKER_02]: I know the thing is kind of when times are good and you're feeling really good

[SPEAKER_02]: You should look to take profits and when everything looks terrible you should look to buy some more and it's kind of been doing really well lately so I'm wondering if it's time to maybe sell from a that take advantage of the gains that I've gotten or if that's more of an individual stock strategy and when you're in these indexes that's just makes sense to leave it in there and then just let it go.

[SPEAKER_02]: I'm 30, so I have plenty of time for it to go down and come right back up again before retirement.

[SPEAKER_02]: Thanks so much, and I will listen to your answer on the podcast.

[SPEAKER_00]: Well, a first comment on one of your comments that I think rings very true, and that's usually when you feel the best, when you feel the most confident everything's going, just that's usually when the market smacks you in the face.

[SPEAKER_00]: Then when you're trading a particular sector or a

[SPEAKER_00]: everything feels great like everything is just doing so well that your feeling is probably similar to everybody else.

[SPEAKER_00]: It means that all the money is in and usually that can that often is an inflection point.

[SPEAKER_00]: They can happen in the other side too.

[SPEAKER_00]: I remember in the fall of 2022, how's getting calls and people were like, you know, every every person that

[SPEAKER_00]: You know, had cash in the sideline and do a portfolio review, they were just bearish on the market and it was just constant.

[SPEAKER_00]: I was just like, why is everyone so bearish and maybe actually more bullish and is able to kind of call.

[SPEAKER_00]: Maybe not the bottom tick or anything like that, but I was saying this is starting to get pretty attractive after the broad market correction.

[SPEAKER_00]: So that is true.

[SPEAKER_00]: Now when it comes to,

[SPEAKER_00]: when you should take profits or should you take profits.

[SPEAKER_00]: The way that you think about this more is acid allocation.

[SPEAKER_00]: Now, first off, for pretty much everybody out there, just only S&P is not good enough anymore.

[SPEAKER_00]: Funds are shifting.

[SPEAKER_00]: Other asset classes are doing better.

[SPEAKER_00]: See, that with hard assets, both going silver, gold versus the S&P, notoriously, is actually, you know, it's out performed since 2000.

[SPEAKER_00]: They hasn't been the goal that's actually.

[SPEAKER_00]: Now, over the past few months, the market's at the S&P's outperformed, but in general since the special sense of the bottom in 2022, goes outperform the S&P.

[SPEAKER_00]: So if you don't own any, well, you're not being exposed to an asset class that is outperforming just the broad S&P.

[SPEAKER_00]: And we'll likely continue as more and more central banks.

[SPEAKER_00]: Bye.

[SPEAKER_00]: saw yesterday there's news that South Korea, the first time in 13 years, is buying gold.

[SPEAKER_00]: Then there's foreign stocks since the bottom market bottom last year or the beginning of last year.

[SPEAKER_00]: So we say so now going on what over year and a half.

[SPEAKER_00]: Foreign stocks have started to outperform domestic stocks.

[SPEAKER_00]: So having exposure to foreign stocks is going to be probably a smart thing to do over

[SPEAKER_00]: Maybe even a one year that can change periods of underperformance.

[SPEAKER_00]: That's how these things work.

[SPEAKER_00]: But it's about having a broad asset allocation that will work.

[SPEAKER_00]: Not just for one quarter, but for most likely going forward year after year after year.

[SPEAKER_00]: Now that to change what we just went through a long period where foreign stocks underperform, that's now changing.

[SPEAKER_00]: Where gold was underperforming for number of years now over the past what now four years, that's changed.

[SPEAKER_00]: So it's about setting that broad asset location.

[SPEAKER_00]: As me, you sell all of your S&P.

[SPEAKER_00]: It's saying, OK, this is a good time after the recent run, especially the past few days, OK?

[SPEAKER_00]: What are these other areas that I want exposure to?

[SPEAKER_00]: And start to rebalance your portfolio, your luckiest is in a tax deferred account, like an IRA, where you don't have to deal with the tax consequences.

[SPEAKER_00]: Doesn't matter.

[SPEAKER_00]: So that's what you need to do.

[SPEAKER_00]: Step back.

[SPEAKER_00]: How much do I want the S&P?

[SPEAKER_00]: Maybe if you're younger, you probably want more mid and small cut that's another area, not just for Instaq, not just hard assets like Golden Silver, but what about small mid caps, which have been outperforming since the fall of last year?

[SPEAKER_00]: So almost a year now.

[SPEAKER_00]: Why?

[SPEAKER_00]: Because money is flowing from the hyperscaler so it's large cap names.

[SPEAKER_00]: These have huge amounts of free cash for their buying back shares.

[SPEAKER_00]: Now they're suddenly spending a ton on cap X, to build out these data centers and guess who's supplying

[SPEAKER_00]: The picks and shovels of that entire industry now, it's those mid and small cap names.

[SPEAKER_00]: And so those are businesses that are now proving their earnings dramatically, and if you have more exposure to mid and small caps, you're going to do better, has been doing better and once again, the secular dynamics are at their back.

[SPEAKER_00]: So that's how you need to everybody.

[SPEAKER_00]: Not just this color, everybody needs to have a viewpoint of what should my asset allocation be, might my base allocation.

[SPEAKER_00]: At all times, everyone should have some gold silver, some foreign equities, some small and midcaps, just whether you should have the overweight, those areas, or underweight, markets shifting.

[SPEAKER_00]: And these shifts usually last seven, 10 to nine, 15, 20 years.

[SPEAKER_00]: We're gonna new era post COVID, and you have to follow the trends, and these are the trends that I'm highlighting.

[SPEAKER_00]: Let's go answer another voicemail question now.

[SPEAKER_03]: Okay, I'm bestock.

[SPEAKER_03]: I have a question on NW, follow also networks.

[SPEAKER_03]: I haven't told it in my Roth IRA account for the past.

[SPEAKER_03]: year and a half and it's done pretty well.

[SPEAKER_03]: I'm at 100% profit with it.

[SPEAKER_03]: So I was just wondering what you guys thought about it.

[SPEAKER_03]: I have been selling some shares as the price has gone up, but I was wondering if it's a good long-term mold or just take my profits and move up some wells.

[SPEAKER_03]: Thank you.

[SPEAKER_00]: are looking at Palo Alto networks, they provide network security solutions for enterprises, so it's a cyber security business, earnings are good, $4 in the 11 cents, but the price is pretty expensive.

[SPEAKER_00]: 360 dollars, you're talking about a forward-looking AED times multiple.

[SPEAKER_00]: That's pretty expensive for return equity of 7%, pretty cash flow, $4 billion on the

[SPEAKER_00]: Now is the thing, it's expensive.

[SPEAKER_00]: It's been expensive though for a long time, and it's state expensive.

[SPEAKER_00]: But this just had a recent run from a low back in March around 150, now we're at 362, 362.

[SPEAKER_00]: This is definitely a time that you, whenever you get these pairbolic moves, these doubling in a short period of time, it's prudent risk management to sell part of it.

[SPEAKER_00]: Simple as that, that's what I would be doing.

[SPEAKER_00]: Trimming back down to a target.

[SPEAKER_00]: This goes back to what I said before about asset allocation is how much should you have in particular sectors, or particular asset classes, then sub-sectors, and that's the case here with Palo to networks.

[SPEAKER_00]: How much tech do you have, how much AI exposure do you have?

[SPEAKER_00]: This is certainly aligned with that.

[SPEAKER_00]: Good business, just very, very overpriced.

[SPEAKER_00]: So,

[SPEAKER_00]: I would be trimming considerably on Palo, outso networks.

[SPEAKER_00]: PA and W is the symbol.

[SPEAKER_00]: Let's go answer it.

[SPEAKER_00]: One more voicemail question.

[SPEAKER_07]: Hi, I think for your show, want to get your opinion on buying A, M, D, to your A, M, D. Thank you about this one for a more medium, long-term investment.

[SPEAKER_07]: Look forward to hearing your thoughts.

[SPEAKER_07]: Thanks so much for your show.

[SPEAKER_00]: All right, looking at AMD kind of the sister to Nvidia business that has been doing very well earnings up 82% this year 97% expect the next year they just had earnings for Q2 earnings were up 246% revenues were up 50% but that is so looks like it's actually accelerating a little bit.

[SPEAKER_00]: But the market reaction was negative and based on forward-looking earnings, it's fitting about 30 times earnings.

[SPEAKER_00]: I just think you missed it.

[SPEAKER_00]: I still am looking at compute costs, compute costs are coming down companies are starting, which we'll talk about in a little bit, starting to move away from

[SPEAKER_00]: or basically trying to token max, right?

[SPEAKER_00]: They're trying to not spend so much on these tokens when it comes to their AI needs.

[SPEAKER_00]: And ultimately I think it's going to hit there these data centers ability to build and grow the same pace that they're projecting right now.

[SPEAKER_00]: And then there's a long-term on-device risk that a lot of AMLs all run on-device on like Apple's iPhone for example.

[SPEAKER_00]: So I'm passing on AMD at the current time.

[SPEAKER_00]: Now we're heading to a break.

[SPEAKER_00]: You may call it now at 8.99 in chart.

[SPEAKER_01]: There are a few things that make KPP financial special.

[SPEAKER_01]: One of them is parallel investing.

[SPEAKER_01]: This means they invest right alongside their clients.

[SPEAKER_01]: Here's how it works.

[SPEAKER_01]: When KPP financial makes a trade for their clients, just in line makes the same trade for himself and KPP.

[SPEAKER_01]: On the same day, at the same price and same percentage.

[SPEAKER_01]: No front running, no special treatment.

[SPEAKER_01]: Learn more about Parallel Investing at Investalk.com.

[SPEAKER_00]: Now the color just asked about AMD and my answer had a lot to do with the future path of the

[SPEAKER_00]: Some CapEx projections, the market's starting to react to higher CapEx projections is negative.

[SPEAKER_00]: So that's number one.

[SPEAKER_00]: But also companies are starting to scrutinize AI use as a whole by their workers.

[SPEAKER_00]: Trying to rain in their use to some degree.

[SPEAKER_00]: Large companies.

[SPEAKER_00]: And not just standard corporate America, like your Wal-Mart's and your Uvers,

[SPEAKER_00]: AI forward companies like Amazon and Meta, but these early adopters are introducing now caps on AI usage, discouraging wasteful use of AI models and some forms, mainly to keep AI spending under control.

[SPEAKER_00]: Over the past quarter, workers have moved beyond just your normal chatbot, your chat

[SPEAKER_00]: Agentagat, IAI, agents, and when you create an agent, it does a lot of things on its own, and that hits the token use consistently, regularly.

[SPEAKER_00]: And if you're using most advanced models, the cost of that can go up dramatically.

[SPEAKER_00]: Now that's what OpenAI and Anthropica had been wanting to do, or wanting to see as they

[SPEAKER_00]: or token-based billing.

[SPEAKER_00]: But as average consumer, you still use free models, whether that's the AI mode on Google search for example, or maybe choose the free version of chat or Gemini, or maybe in Cloud.

[SPEAKER_00]: But on the corporate side, they're pink.

[SPEAKER_00]: We pay typically for, we just pay for some tokens on the Cloud side where all of our employees

[SPEAKER_00]: And we use the chat feature all the time.

[SPEAKER_00]: Build that projects, we use a lot.

[SPEAKER_00]: But it's fairly limited to that monthly subscription cost.

[SPEAKER_00]: But at the big voice, they're doing bigger things, bigger projects.

[SPEAKER_00]: And so can you use it to continue the grow?

[SPEAKER_00]: But since the start of the year, Chinese AI models have now overtaken the US counterparts in token consumption.

[SPEAKER_00]: So that means that a lot of these companies are shifting to Chinese models.

[SPEAKER_00]: China's access to cheaper energy and more efficient models also means that they charge less than the US companies.

[SPEAKER_00]: So that's one way these companies are going.

[SPEAKER_00]: Then there's just,

[SPEAKER_00]: If you're not doing the most complex task, do you really need the most complex sophisticated model?

[SPEAKER_00]: If you're using this kind of like a beefed-up search engine, you don't need a new model.

[SPEAKER_00]: You need to use a model from a year ago to give you pretty much the same quality of the answer.

[SPEAKER_00]: So now come these are actually changing their incentives internally and they're messaging around AI adoption.

[SPEAKER_00]: Amazon, Warren employees, stop using AI just for the sake of using AI.

[SPEAKER_00]: If you just want to Google something, don't just go to Google.

[SPEAKER_00]: Look it up.

[SPEAKER_00]: You don't need to hit a token for that.

[SPEAKER_00]: So the big question they're asking themselves is, what model should be using for this particular job?

[SPEAKER_00]: Does it make sense to use the most sophisticated model or not?

[SPEAKER_00]: That's one reason why I think for the average person, using something like a proplexity, I think it's a great tool.

[SPEAKER_00]: It gives you access to a bunch of different models, but it'll automatically route your query to different models based on what you're trying to do.

[SPEAKER_00]: I think that's a great platform.

[SPEAKER_00]: So I just think that this is a shift that is not changing.

[SPEAKER_00]: You're already seeing, like I said, token cost drop, and there's a reassessment now of how the AI industry

[SPEAKER_00]: will evolve and that will, that also means a reassessment of market fundamentals.

[SPEAKER_00]: I'm Justin Klein, running of K, PP Financial's Parallel Investing, making trade for our clients, making the same trade for ourselves, same day, same price, same percentage, no front-running, no special treatment we invest right alongside, our clients should have the same risk and potential for success.

[SPEAKER_00]: Learn more, I think, over to Invest Talk.com, please tell your friends and family about a free podcast down most of you, by any time that I change our Spotify and then,

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