[SPEAKER_05]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.

[SPEAKER_05]: And now, here are Justin Klein and Luke Guerrero.

[SPEAKER_04]: Good afternoon fellow investors and welcome back to Invest Talk.

[SPEAKER_04]: This is our Monday.

[SPEAKER_04]: August 10th, 2026 edition of Invest Talk, and we have a special show.

[SPEAKER_04]: We have Luke with me.

[SPEAKER_04]: I know you guys like when we build two together, we have a double trouble, like I said you can call it.

[SPEAKER_04]: I don't want to call us that.

[SPEAKER_04]: We don't come up with something better.

[SPEAKER_04]: It's too cliched.

[SPEAKER_04]: I agree.

[SPEAKER_04]: That is very cliché.

[SPEAKER_04]: Well, let's throw in the robot to think of us.

[SPEAKER_04]: could do that.

[SPEAKER_04]: We'll figure it out, but nonetheless, we are here to help you become better investors, give you some perspectives, some data, answer your investment questions, do that whole thing that we do each and every week day.

[SPEAKER_04]: And 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 color question right now.

[SPEAKER_08]: I just an elucid this is Melissa from Oregon.

[SPEAKER_08]: I love your show.

[SPEAKER_08]: Thank you so much.

[SPEAKER_08]: My question today is if you can give your assessment of the company, medtronic, pick or symbol, mdp, thank you so much and I'll listen on the show.

[SPEAKER_08]: Take care.

[SPEAKER_04]: Looking at MedTronic, MDT is the symbol, and name that we actually own for clients, earnings are expected to be a 8% this year, 7% next year.

[SPEAKER_04]: It had a rough kind of start to the air of bouncing back as of late, it's pretty nicely.

[SPEAKER_04]: And it's a consistent business, a very good business, 115, roughly, billion dollar market cap, returning equity right around 10%, good free cash to about five and a half billion dollars, overall a good balance sheet, and the difference is about three point three percent.

[SPEAKER_04]: I think it just raised it correctly, raised that dividend.

[SPEAKER_04]: So there's a lot of, a lot to like about the business.

[SPEAKER_04]: Do you have anything to add, Luke?

[SPEAKER_03]: Yeah, I mean, from a earnings perspective, it looks like they had their highest annual revenue growth in 10 years.

[SPEAKER_03]: You know, you mentioned that it has really had a rough start to the year and it certainly did.

[SPEAKER_03]: It's up 17% of the past three months though.

[SPEAKER_03]: I think something that's important to note here is that healthcare broadly had had a rough start to the year.

[SPEAKER_03]: Yeah.

[SPEAKER_03]: It, you know, when you think about this AI trade money has to come from somewhere.

[SPEAKER_03]: and there was a bit of a rotation out of health care into some of those tech and tech focus names.

[SPEAKER_03]: And so when you're looking at metronic and how it performs, you kind of look at it within the context of the industry.

[SPEAKER_03]: And with it's still being down 7% this year, it's still outperforming its industry by 1.6% this year, 14% last year.

[SPEAKER_03]: So that to me kind of signals it's more of a broader trend within the sector, rather than something that is systematic or

[SPEAKER_04]: Yeah, that's underappreciated is that capital is finite.

[SPEAKER_04]: And when investors are chasing a hot sector, that money either comes from off-cylinds, or oftentimes it also comes from other sectors that get hurt in the process.

[SPEAKER_04]: And I think healthcare was certainly one of those, because there's a lot of uncertainty with what's going on with RFK and the,

[SPEAKER_04]: health and human services, and whether or not that's going to change everything that goes on within the healthcare space.

[SPEAKER_04]: So it certainly was an overhang.

[SPEAKER_04]: I think that's a bit behind us in a way and also money is rotating in this market.

[SPEAKER_04]: towards safer names and back out of some of those bigger AI plays.

[SPEAKER_04]: So I think that's a recent trend and you're seeing that in the electronic stock.

[SPEAKER_04]: With the recent rally right now, I still think it's very, very undervalued one of the largest medical device companies in the world.

[SPEAKER_04]: I don't think that's changing anytime soon.

[SPEAKER_04]: And certainly there's a lot of boomers getting older, retiring, and they're going to

[SPEAKER_04]: Naturally, as you'd older, demand more, more of the devices.

[SPEAKER_03]: So we like electronics.

[SPEAKER_04]: Now let's pivot, and actually let's talk about what we're gonna discuss today.

[SPEAKER_04]: Actually, it's like about Friday.

[SPEAKER_04]: Friday we had a great show.

[SPEAKER_04]: I talked about workers dropping out of the labor force and what was that reason?

[SPEAKER_04]: Kind of what I just said, which was about the boomer generation and the fact that they are getting more and more into retirement.

[SPEAKER_04]: So I talked about that in much more on Friday's show.

[SPEAKER_04]: We looked also at HubSpot.

[SPEAKER_04]: We had a answer to a question about that.

[SPEAKER_04]: HubSpot.

[SPEAKER_04]: The miss it.

[SPEAKER_04]: Go check it out.

[SPEAKER_04]: Yeah.

[SPEAKER_04]: We did answer a question about HubSpot.

[SPEAKER_04]: No spoilers.

[SPEAKER_04]: If you want to know what I said, best way to get every show is to follow and best talk wherever you get your podcast.

[SPEAKER_04]: That includes you, Luke.

[SPEAKER_04]: You have to go tune in yourself.

[SPEAKER_03]: I already did listen.

[SPEAKER_03]: Are you dead?

[SPEAKER_03]: Because I do subscribe to Invest Talk wherever I get my podcast.

[SPEAKER_04]: There you go.

[SPEAKER_03]: I was, yeah, coasted by coastal coast to coast.

[SPEAKER_03]: It seems like every other weekend now.

[SPEAKER_03]: I'm going for a wedding.

[SPEAKER_03]: At some point, everyone I know is going to be married and we'll be moving on to a second marriage as soon.

[SPEAKER_03]: There you go.

[SPEAKER_04]: And you met your idol.

[SPEAKER_03]: Not my idol.

[SPEAKER_03]: Somebody's idol.

[SPEAKER_03]: The great Sandy co-fax, the left arm of God did they call him one of a 24-perfect games, a great Brooklyn and Los Angeles Dodger through and through.

[SPEAKER_04]: There we go, yeah, fun, fun weekend you had back east, but we have about 45 minutes left in the show.

[SPEAKER_04]: So let's get to it, Luke, our main focus point today is about data centers, housing and hidden real estate play in the AI boom.

[SPEAKER_04]: So we're going to look at kind of the second and third order effects of the AI infrastructure buildouts.

[SPEAKER_04]: and mainly around real estate.

[SPEAKER_04]: So we'll discuss that.

[SPEAKER_04]: We also have other topics.

[SPEAKER_04]: What is in regards to the credit markets surrounding the AI?

[SPEAKER_04]: What is that telling us something about the future path of maybe that industry as a whole?

[SPEAKER_04]: Look at that.

[SPEAKER_04]: Also gold.

[SPEAKER_04]: Gold has broken out.

[SPEAKER_04]: And one of the reasons is actually more foreign buying.

[SPEAKER_04]: It's not just from Central Banks right now.

[SPEAKER_04]: It's coming from retail investors in one particular country.

[SPEAKER_04]: And we'll talk about that in much, much more.

[SPEAKER_04]: We also have voice bank calls.

[SPEAKER_04]: One is on retirement accounts.

[SPEAKER_04]: kind of a broad topic, but we'll hear it, that color has to say, we also have a question on double verify holdings, DV is a symbol, and of course questions that came in via the comment section of the Investock YouTube channel.

[SPEAKER_04]: But most importantly, we'll be your live causes we head into a quick break, please whatever you call any time, leave your questions on the Investock voice bank.

[SPEAKER_04]: If you happen to be listening during our live stream on our website at besttalk.com, we're possibly on AM-1220 in the Bay Area.

[SPEAKER_04]: You can call it right now at A to A tonight chart.

[SPEAKER_04]: Up next, I'll comment on today's market act.

[SPEAKER_05]: Total lifetime downloads for the Invest Talk podcast are now more than 63 million.

[SPEAKER_05]: So tell your friends, when they have financial investment questions, don't forget to call Invest Talk 888-99 chart.

[SPEAKER_04]: Look, we had an interesting day in markets to start the week.

[SPEAKER_04]: Overall, though, it was.

[SPEAKER_04]: Relatively flat.

[SPEAKER_04]: Intel did announce a $15 billion equity offer bond yields continue to have upward pressure.

[SPEAKER_04]: You saw the dollar index of 0.1% on the day, gold finished up half a percent, ended above 4,400 hours at the first time since early June, silver up 2.8 percent, Bitcoin continues to lag the debasement trade by being down 1.8 percent on the day.

[SPEAKER_04]: But the real story was WCI crew to a 5.1 percent as

[SPEAKER_04]: What looks to be a giant stalemate in the Middle East, the straight-over-mouse looks no closer to being open than it has been for the past.

[SPEAKER_04]: I don't know what are we going on six months of this war.

[SPEAKER_04]: So, what did you make of the marketers?

[SPEAKER_04]: We started the week, even though the indices didn't move very much.

[SPEAKER_03]: Yeah, honestly, it was a surprise that there wasn't much movement there.

[SPEAKER_03]: I think the big story, the big overhang for a while, right?

[SPEAKER_03]: It has been continually hawkish updates around the U.S. and Iran War.

[SPEAKER_03]: You have Iran saying that even if they reached a deal with Oman,

[SPEAKER_03]: with regards to the street of her moves, it would not lead to full reopening.

[SPEAKER_03]: I saw some chatter about Iran saying they don't want to fully resolve the situation until 2029 now when Trump is out of office, and then for the other side you have the president now demanding compensation for the war.

[SPEAKER_03]: And so, you know, I think that from my perspective, I would expect the market to be down a bit more than it has been, right?

[SPEAKER_03]: It's just off of these highs, but you're still seeing this continued essentially ignoring of geopolitical issues for the mouth part.

[SPEAKER_04]: Yeah, that's something I think it's because the while oil was up today, it's still at a reasonable number.

[SPEAKER_04]: We're still sub $100 a barrel.

[SPEAKER_04]: And the supply chains are still broadly working, even though there are, there are issues that is creating inflation.

[SPEAKER_04]: I talk to people in the, in the goods, let's say the goods industry that are trying to produce products in Asia and their supply chains are throughout Asia and they are seeing higher cost of resin, higher transportation costs, because the diesel, all this that's

[SPEAKER_04]: their costs, which will eventually have to feed into the costs at the consumer level.

[SPEAKER_04]: So there is a lag effect here, but I think I am a little bit surprised that this is being ignored by the market as much as it has so far.

[SPEAKER_04]: The main reason though is because of the earnings

[SPEAKER_04]: It looks like the Q2 earnings for the Russell 3,000, so the 3,000 largest names, is that 15% the strongest is 2021, revenue growth of 8% the highest is 2023.

[SPEAKER_04]: So the earnings picture looks fine for now.

[SPEAKER_04]: To me, it is all about what's going to happen with AI.

[SPEAKER_04]: Are we still spending at these levels?

[SPEAKER_04]: Can they continue to finance this?

[SPEAKER_04]: And we'll talk a little bit later about

[SPEAKER_04]: their ability to do so.

[SPEAKER_04]: But I think that is a swing factor that the market isn't really disgusting quite yet.

[SPEAKER_04]: So we'll see how that price is.

[SPEAKER_04]: If they price that in.

[SPEAKER_04]: Now let's pivot over and what we're going to answer a YouTube comment question.

[SPEAKER_04]: Actually no, a question that came via web form says UWM holdings is currently facing financial difficulties and recently cut its dividend considering these circumstances is this a good company.

[SPEAKER_04]: wording.

[SPEAKER_03]: I was going to say this is a fascinating way to phrase that bad things are happening.

[SPEAKER_03]: They can no longer sustain their dividend.

[SPEAKER_03]: Is it good?

[SPEAKER_04]: It's like you're tying the diet.

[SPEAKER_04]: Well, I mean, you could be a contrarian here and say all the bad news is priced in and therefore you want to pick it up.

[SPEAKER_03]: but the question wasn't is now a good time to buy the question is is this a good company that's fair and I would say for UWMC and objectively speaking it's down 67.81% you're today it's trading now at $1.41 it's volatile enough that it's up 10% today you know from a return on assets perspective they're barely positive

[SPEAKER_03]: revenue has fallen year over year so so I think that that fully separates the two questions of is it a good company versus is now a good time but one is saying is this thing successful the other is more of trying to predict whether or not this could be a bottom.

[SPEAKER_04]: Yeah this is actually united wholesale mortgages.

[SPEAKER_04]: I definitely seen some commercials from them.

[SPEAKER_04]: They probably want to stop spending on commercials because it's not working for them.

[SPEAKER_04]: Clearly, this is a company that is on the verge of bankruptcy.

[SPEAKER_04]: And you might look at it and say, oh, the dividend yield, Luke, it's 31 percent.

[SPEAKER_04]: Geez.

[SPEAKER_04]: But like the question said, or the question was phrase, recently cut its dividend.

[SPEAKER_04]: Yeah.

[SPEAKER_04]: Take a limited note.

[SPEAKER_04]: Don't think so.

[SPEAKER_04]: Not yet.

[SPEAKER_04]: Not yet.

[SPEAKER_04]: The point here is that whenever you see,

[SPEAKER_04]: a company whose debt levels, net debt levels, dwarf the market cap, that is the market saying this is on the verge of bankruptcy and it's especially when it's trading for a dollar and change.

[SPEAKER_04]: And that dividend yield is not going to get paid.

[SPEAKER_04]: So this is almost certainly going to bankruptcy.

[SPEAKER_04]: You could be a contrarian, you'd have to really dig into the details here and figure out what got them into this trouble and how they're going to pull themselves out of it.

[SPEAKER_04]: But 99 times out of 100, when the company gets themselves into this situation, bankruptcy is in the offing, and this equity is worth zero.

[SPEAKER_04]: That's what does it for our first segment?

[SPEAKER_04]: Our 24-7 Invest Talk VoicePink never closes, so you can leave your finance and invest in

[SPEAKER_05]: 24-7, Rainer Shine, there's always value in the Invest Talk podcast, 888-99, chart.

[SPEAKER_04]: Let's go talk to Dave in Fresno, California, looking at Volero Energy VLO, do you

[SPEAKER_00]: and I'm thinking about buying some more.

[SPEAKER_04]: Okay, well, first thing you have to understand about all these oil refineries is that the business is very up and down.

[SPEAKER_04]: If you look at the history of L'Aro, it lost money in 2020, which makes a lot of sense.

[SPEAKER_04]: It made $29 and 16 cents in 2022.

[SPEAKER_04]: Then that fell to $8.48 and 2024.

[SPEAKER_04]: Then back up to Swiss make $40 per share this year, but then fall back to $27 and change.

[SPEAKER_04]: next year.

[SPEAKER_04]: So you can see it's kind of all over the place.

[SPEAKER_04]: You almost have to smooth the earnings over time.

[SPEAKER_04]: It is up into the right.

[SPEAKER_04]: That's the positive here.

[SPEAKER_04]: And I've said this before with what's going in Middle East.

[SPEAKER_04]: It's pretty clear that these, that the better parts to invest in, I think, over the long term.

[SPEAKER_04]: And this bears down the numbers is within the energy space, which is midstream companies as well as

[SPEAKER_04]: The technicals are good, relative strength is 96, so it's doing well, so I like it long-term, but is this good time to buy lip, or do you think you should be patient on it?

[SPEAKER_03]: Yeah, I mean, you know, you're coming off of one of the best quarters for refiner's broadly and specifically this name in a really long time.

[SPEAKER_03]: I mean, they had in the 3.7 billion in net income.

[SPEAKER_03]: They had 5.58 billion in operating cash flow.

[SPEAKER_03]: How much cash do they want to end?

[SPEAKER_03]: It's like a crazy amount, isn't it?

[SPEAKER_04]: No, they're, they're, they're net debts to billion.

[SPEAKER_03]: Yeah, they're net debts to billion, but they still 4.7 billion in cash on hand.

[SPEAKER_03]: I mean, I mean,

[SPEAKER_03]: It has reached a point where, you know, you do worry about the counter cyclical nature of these types of names.

[SPEAKER_03]: It's not trading at a particularly expensive multiple either.

[SPEAKER_04]: I mean, it's nine.

[SPEAKER_03]: Yeah, but that's price to forward looking earnings.

[SPEAKER_03]: But again, are the extrapolated earnings consistent here.

[SPEAKER_03]: When you have the cyclicality of these types of names, you have to realize when you're at a forward looking multiple, that's a forward looking.

[SPEAKER_03]: earnings estimate, right?

[SPEAKER_03]: And so in that diverges, then a diverge is pretty quickly, and you can find yourself in a position where you bought this thing, and it was a bit overvalued.

[SPEAKER_03]: That's my concern.

[SPEAKER_04]: Yeah, I mean, I think from a long-term perspective, it's usually not best to buy something efforts up.

[SPEAKER_04]: You know, it's doubled in.

[SPEAKER_04]: What a year, but doesn't mean that there isn't a long-term signal here that is a good buy because it probably is a good buy at some point, it's just a matter of what your time frame.

[SPEAKER_04]: Now short-term, momentum's good.

[SPEAKER_04]: We just talked about the straight-and-most doesn't look like it's opening any time soon.

[SPEAKER_04]: There's a stalemate in the middle east that's probably not ending.

[SPEAKER_04]: In the near term, which is a tailwind to diesel prices.

[SPEAKER_04]: And it's tailwind to crack spreads.

[SPEAKER_04]: That's what they make their money.

[SPEAKER_04]: It's the price they get at the pump, versus the price they're paying for oil.

[SPEAKER_04]: And you see oil prices are not really going up that much, but diesel prices and gasoline prices are.

[SPEAKER_04]: And so that's why Valero and their financial making so much money.

[SPEAKER_04]: So near term, I think it goes higher.

[SPEAKER_04]: But once they say there is a resolution at some point in the middle east, this will probably roll over and roll over pretty hard.

[SPEAKER_04]: But we are in a time where geopolitics will probably not smooth out any time soon.

[SPEAKER_04]: And therefore, it would probably be a better buying option need long term.

[SPEAKER_04]: So to me, it depends on your time frame.

[SPEAKER_04]: I like what you're looking at.

[SPEAKER_04]: I would try to find time to add more.

[SPEAKER_04]: But I'd wait for a broader pullback.

[SPEAKER_04]: Unless you're just going for a trade and therefore, for the next three months, and I think it could still be up to the next three months.

[SPEAKER_04]: Let's keep things moving and pick that pivot back to the best stock voice bank for another listener question now.

[SPEAKER_10]: Hi, I was calling about target.

[SPEAKER_10]: I ordered a month on it.

[SPEAKER_10]: I just wanted to know if it's worth holding on to or it's time to take profits.

[SPEAKER_10]: And my second question with the where would I go?

[SPEAKER_10]: Where would you recommend to learn how to read the charts?

[SPEAKER_10]: Thank you for your help.

[SPEAKER_10]: I'll be listening to the shot.

[SPEAKER_04]: Uh, we're going to go to learn how to read the charts.

[SPEAKER_04]: That is, that's a tough one.

[SPEAKER_04]: Um, there's, there's a lot of books.

[SPEAKER_04]: There's our website.

[SPEAKER_04]: Do we sell the book section or our website?

[SPEAKER_04]: I think we do.

[SPEAKER_04]: We used to have it.

[SPEAKER_04]: Try remember we took that offer now keep talking all look.

[SPEAKER_04]: Okay.

[SPEAKER_04]: Um, but speaking of target is this is actually a great conversation because Luke and I have been talking about this for a while Um, I don't think the book sections on our website anymore.

[SPEAKER_05]: Interesting email me.

[SPEAKER_04]: I'll all email you some recommendations.

[SPEAKER_04]: Let's get the target So this is a name that we at Boffer clients.

[SPEAKER_04]: Let me buy that loop back here.

[SPEAKER_04]: That is your girl.

[SPEAKER_04]: That is your girl.

[SPEAKER_03]: Roughly your girl.

[SPEAKER_04]: and you were arguing for Walmart.

[SPEAKER_04]: I was.

[SPEAKER_04]: You were arguing for Walmart.

[SPEAKER_03]: I was arguing for Walmart.

[SPEAKER_04]: And for the first two, three months, you're right.

[SPEAKER_04]: But pretty much, since the fall, November.

[SPEAKER_04]: Target's been on its hair.

[SPEAKER_04]: Bottoms around 80 mid-80s, now it's at 152.

[SPEAKER_04]: So it's almost doubled in a year.

[SPEAKER_04]: And I said back then, it was trading, I think nine times earnings, something like that, cause earnings this year, since the eight 50, it was trading on eight facts.

[SPEAKER_04]: It was around nine times earnings.

[SPEAKER_04]: I said, not a lot has to go right for this name, just,

[SPEAKER_04]: do really really well.

[SPEAKER_04]: And not basically what happened because now we're returning to growth, 4% revenue growth expected this year, 12% earnings, then 3% revenue growth next year, 7% earnings.

[SPEAKER_04]: But the question is now that it's trading at roughly 15 times, 16 times, for looking earnings, is it too expensive now, fairly valued?

[SPEAKER_04]: What do you think, Luke?

[SPEAKER_03]: Yeah, I mean, you know, it is one of those situations where you had a company that was beaten down, beaten down, beaten down.

[SPEAKER_03]: My issue with Target had always been that they hadn't invested as much and had as much realization and online revenue.

[SPEAKER_03]: That's something that they have been working on in the past couple quarters and has been an area of growth for them.

[SPEAKER_03]: You know, they're training at 17 times price for looking earnings, but we still hold it for clients.

[SPEAKER_03]: So clearly we like it.

[SPEAKER_04]: Yeah, we still like it.

[SPEAKER_04]: Nice team as it was though.

[SPEAKER_04]: I was sitting around 90 when we bought it, but still a great company.

[SPEAKER_04]: one of five fair whatever we bought it pretty love anyway our twenty four seven voice bank never closes we're ready for your questions now it hated it ninety nine chart

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[SPEAKER_05]: 3.

[SPEAKER_05]: That depends on many factors.

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[SPEAKER_05]: So don't forget to call, in Vestalk, 888-99 chart.

[SPEAKER_04]: Luke data centers are all the rage.

[SPEAKER_04]: So let's talk a little bit more about the investment opportunities surrounding the data center infrastructure, build out everyone's talking about chips and the AI companies and memory and everything that sounds cool.

[SPEAKER_04]: But there's investment opportunities adjacent to all

[SPEAKER_04]: In areas that oftentimes are boring but more durable and probably not prices expensive is the chip makers are right now, right?

[SPEAKER_04]: So let's talk a little bit about what those might be, but first let's talk also about the

[SPEAKER_04]: the development, because this is something that happens not just in one year, it happens over many, many years and it will have ramifications for the areas that these data centers are built on, you know, for many years to come decades, even to come.

[SPEAKER_04]: So maybe if you want to start off the conversation a little bit, how are you thinking about the other opportunities in the space?

[SPEAKER_03]: Yeah, you know, I think that when most people think about the AI theme, their idea of going towards something that touches it, that isn't one of the chipmakers or hyperscalers, is data centers.

[SPEAKER_03]: And that makes sense to me.

[SPEAKER_03]: But I think that there are third order effects you need to consider as well.

[SPEAKER_03]: For example, you know, we have data centers don't have many employees.

[SPEAKER_03]: There needs to be infrastructure for workers in those areas who are constructing those data centers, but are then also perhaps going to be in the power plants, power generation that are near these data centers.

[SPEAKER_03]: And so that means you can't really just stop at database data center reads, right?

[SPEAKER_03]: There are other areas you should focus on as well, residential builders, non-residential commercial builders.

[SPEAKER_04]: For every one dollar that's invested in a data center, roughly 74 cents, flows into adjacent construction activity.

[SPEAKER_04]: Think about that.

[SPEAKER_04]: There's the spending, what, approaching a trillion dollars a year.

[SPEAKER_03]: Yeah.

[SPEAKER_04]: So that's still 740 billion going elsewhere, right?

[SPEAKER_04]: Roughly.

[SPEAKER_04]: So let's talk about the process and the phases here.

[SPEAKER_04]: So phase one.

[SPEAKER_04]: Before they ever break ground, you have to secure power, fiber, water, utilities, and expand capacity, power infrastructure, grew 30% in February, year over year.

[SPEAKER_04]: So that industry is booming.

[SPEAKER_04]: Okay, so how do you capitalize on that?

[SPEAKER_04]: those within the electrical industry will be beneficiaries and our beneficiaries then there's the broader construction companies site development you're talking about mechanical engineering electrical engineering cooling systems that need to be put in shell construction of the buildings overall before you ever put in a server right so if you look at non think about

[SPEAKER_04]: non-residential building from offices and data centers was up 10.3 billion dollars year over year.

[SPEAKER_04]: It's a 1300% increase and 90% of that total comes from just the data centers.

[SPEAKER_04]: So massive amount of non-residential just straight building.

[SPEAKER_04]: Okay.

[SPEAKER_04]: And then around that, about warehouses, distribution centers, assembly facilities, logistics and supply chains and infrastructure to get all those products to the end market.

[SPEAKER_04]: Those have to be beefed up and built out.

[SPEAKER_04]: Then you have the mixed use housing.

[SPEAKER_04]: You talked about workforce, multifamily retail center.

[SPEAKER_04]: So what if you, what if it's a read that owns a lot of.

[SPEAKER_04]: Strip holes in that particular area.

[SPEAKER_04]: That's going to get a boost in business, higher rents, etc.

[SPEAKER_04]: Office space, potentially as well, supporting all this new business activity.

[SPEAKER_04]: And those things have happened 12 to 36 months after they even break ground on the data center.

[SPEAKER_04]: So that's a big, that's a big push as well.

[SPEAKER_04]: Then you get into the three to seven years after you're talking about health care facility, schools, universities, hospitals, civic centers.

[SPEAKER_04]: All of that also is a creates growth, feels growth because of more jobs being created in the area, more capital spending from these companies that think about what we're Microsoft

[SPEAKER_04]: and Google usually spent all their money.

[SPEAKER_04]: It was usually in Silicon Valley, right?

[SPEAKER_04]: On new, a bigger headquarters, a more employees, et cetera, and it benefited Silicon Valley.

[SPEAKER_04]: But now that money is flowing, not just two other industries, but different parts of the country as well.

[SPEAKER_03]: Yeah, I think one thing we have to consider as well, though, is, you know, when you're talking about these types of investments and going for data centers specifically versus the infrastructure is from a community perspective, one of those is far more popular than the other, right?

[SPEAKER_03]: You don't see data centers being built in Silicon Valley where all these,

[SPEAKER_03]: tech companies are creating these large-language models in front-tier models.

[SPEAKER_03]: You see that other parts of the country and right now there's a lot of communities that are pushing back against that.

[SPEAKER_03]: And they're far less likely to push back against those tertiary products that you've been talking about, those grid upgrades and grid infrastructure and things like that.

[SPEAKER_03]: So there's just another consideration you have to keep in mind when you're thinking about how you want to attack this theme outside of the traditional ways.

[SPEAKER_04]: And I think those things will, they've, they've, they've got up in price, but I could easily see that being a more durable consistent path towards growth as opposed to the cost of chips that might explode three, four, five hundred percent in a short period of time.

[SPEAKER_04]: Well, maybe you pull back your, your build until those things become a bit more, um,

[SPEAKER_04]: of it cheaper, but you can still do the grading.

[SPEAKER_04]: You can still build the shell of the facility.

[SPEAKER_04]: You can still put in the electrical infrastructure and partner with the local utility companies.

[SPEAKER_04]: So that's why we like the durability of the growth from those nuts and bolts of the business more than the chip companies that

[SPEAKER_04]: 10 to the margins, 10 to go from 80, 90% to zero overnight, especially if capacity expands.

[SPEAKER_04]: So it's a very interesting kind of second and third order effects that you have to follow.

[SPEAKER_04]: And that's really real opportunities lie.

[SPEAKER_04]: Let's keep things going and drop another fresh listener question now.

[SPEAKER_07]: Hi, Investor.

[SPEAKER_07]: I had a question about how to allocate money

[SPEAKER_07]: My wife and I both have a 401k with a match, a Roth IRA, and a brokerage account.

[SPEAKER_07]: We've always maxed out our 401k's and Roth IRA's, but my parents are now tackling retirement.

[SPEAKER_07]: And it's made me question where I should put most of my money to avoid tax in the future.

[SPEAKER_07]: And also to have more flexibility if I wanted to retire early, I'm sure my wife and I both would.

[SPEAKER_07]: We are hiring income earners.

[SPEAKER_07]: So my question is this.

[SPEAKER_07]: Should we contribute only to our 401K enough to reach the employer match and with that extra money you put it towards a brokerage account or our brokerage accounts in order to have like that bridge account to get us to retirement and also to avoid R&D's putting us into a higher tax bracket, you know, if we had a higher 401K balance, do you see though I with your clients?

[SPEAKER_07]: or about, you know, 30 years old and I just want to put our accounts in the best shape possible.

[SPEAKER_07]: So that way we have a smoother transition and it sounds like my parents are having right now.

[SPEAKER_07]: And I'll listen on the show.

[SPEAKER_07]: I appreciate all your good as a help.

[SPEAKER_07]: Thank you so much.

[SPEAKER_07]: Take care.

[SPEAKER_07]: Bye bye.

[SPEAKER_04]: Thank you for the call and your highlighting a complexity of that retirement planning picture that

[SPEAKER_04]: is difficult to get your head around without the right tool.

[SPEAKER_04]: Something we work with clients on and we have tools for that.

[SPEAKER_04]: But yeah, I do think the taxable brokerage account is underappreciated in the longer term planning from a longer term planning perspective, especially if you're retiring early.

[SPEAKER_04]: Now, one thing you're retiring early will do is allow you to do Roth conversions ideally at a low tax rate.

[SPEAKER_04]: So that's a planning mechanism that you should

[SPEAKER_04]: you should lay out with your advisor, but you're going to need taxable money from the taxable account, for example, to pay for the taxes when you do those conversions.

[SPEAKER_04]: So I like that you're looking to avoid the RMDs, but that can be happened in multiple ways and over a long period of time if you have the right Roth conversion strategy.

[SPEAKER_03]: Yeah, I think it's a great question because oftentimes think people think about investment diversity and not tax diversity, but like you said, it is an incredibly complex topic.

[SPEAKER_03]: I think if you want to get an actual set of eyes on it, I encourage you to head over to investor.com and schedule a free portfolio review.

[SPEAKER_03]: There you go.

[SPEAKER_04]: All right, let's pivot over to another voicemail question now.

[SPEAKER_02]: Hey, looking Justin, go through those earlier.

[SPEAKER_02]: I'm going to talk about typical DV double verify and they share a whole lot of them.

[SPEAKER_02]: And Wilson has just agreed to take them private.

[SPEAKER_02]: at a valuation of $13.60 per share, and it's expected to close first quarter of 2027.

[SPEAKER_02]: This has never happened to me as it regards to shares that I hold.

[SPEAKER_02]: So, I'm unsure, do I hold it until then, and then I get 1360 per share, automatically do I sell it before the entry as the action happens?

[SPEAKER_02]: I'm going to give you a little bit of advice on how this works and if I should hold it until they do go private and then I get that money or do I sell before and thank you very much.

[SPEAKER_02]: Love what you guys do.

[SPEAKER_04]: Well congratulations, hopefully you bought this lower than 1360, but basically it's raining at 1322 now.

[SPEAKER_04]: This is typical for a buyout offer.

[SPEAKER_04]: This is the market saying that's probably going to go through there's going to be some

[SPEAKER_04]: for time-value of money, basically.

[SPEAKER_04]: Because you could go, you could sell it now, take your 13, 22, and now go reinvest that elsewhere.

[SPEAKER_04]: That's probably what I would do.

[SPEAKER_04]: Maybe there's a tax implication as well.

[SPEAKER_04]: Maybe you hold it until it's long-term capital gains.

[SPEAKER_04]: That's a consideration if it's in a taxable account.

[SPEAKER_04]: Anything you would add to look for that?

[SPEAKER_03]: No, you're essentially, you have cash exposure now.

[SPEAKER_03]: So if you want to have more cash exposure, you should hold on to this name.

[SPEAKER_03]: But if you want to invest in equities, obviously taxes matter.

[SPEAKER_03]: But the best thing to do is to cash out and move on.

[SPEAKER_03]: There's an opportunity cost all non-to-use things.

[SPEAKER_04]: Sure.

[SPEAKER_04]: Look, let's talk about gold.

[SPEAKER_04]: Gold recently, the last what week, broke out to the upside from about 4,000 announced to about 4,400 announced today.

[SPEAKER_04]: So a nice 10% rally and relatively short period of time,

[SPEAKER_04]: A six-month pullback will repeat got around 5,400 and so quite the drop from 54 to 4,000 now are back to 4,400, but what's interesting is ETFs, gold back ETFs, in China saw 14 straight days of inflows, through last Monday, which

[SPEAKER_04]: was the longest streak since March, and was a, it's surely part of the catalyst here for that breakout in gold.

[SPEAKER_04]: And I'll part of the reasons why money was moved into gold.

[SPEAKER_04]: We talked about this earlier when money is flowing in or out of particular sector.

[SPEAKER_04]: It typically goes somewhere.

[SPEAKER_04]: And so the sell-off in Chinese equity markets helped boost in flows to gold.

[SPEAKER_04]: So,

[SPEAKER_04]: Earlier in the year, the retail investor in China, not much different than the US retail investor, which is chasing a lot of the AI names that pushed up the CSI-300 index, but now money's flowing out in July, that was down 8%.

[SPEAKER_04]: And so money's moving out of tech and into safer names like gold.

[SPEAKER_04]: So is this the only explanation you think?

[SPEAKER_03]: And I think there's a lot that goes into it, certainly, that's one of them, you know, I think if you consider what really drives flows into gold and really anything, this is one of the reasons why when the, when the pot of money of companies and private investors dried up, all the Bitcoin Macsies we're pushing for governments to buy, because that's what the real money is.

[SPEAKER_03]: And similar with gold, where you have central banks that have for some time been consistently buying gold, diversifying their their balance sheets getting out out of US dollars.

[SPEAKER_03]: And that obviously took a bit of a back seat when you had rising geopolitical tensions.

[SPEAKER_03]: I've said it before on the show that when when you think things are going to be scary you buy gold when they get scary you sell gold because you can't.

[SPEAKER_03]: pay your gym membership and gold.

[SPEAKER_03]: Is this a signifier of Chinese inflation expectations easing a bit?

[SPEAKER_03]: They hit a three-month low.

[SPEAKER_03]: Obviously rates in turn a bit lower opportunity costs a bit different than for them.

[SPEAKER_03]: You know, things have been pretty volatile in the Chinese market as well.

[SPEAKER_03]: They still have real estate issues, investors trying to diversify certainly.

[SPEAKER_03]: Is that what is driving

[SPEAKER_04]: Also a part of it is the Bank of Korea resumed physical gold purchases after a 13-year hiatus.

[SPEAKER_04]: That was announced on August 4th as well.

[SPEAKER_03]: So, well, they said they were going to.

[SPEAKER_03]: I don't think they actually executed any trades and they didn't talk about the sizing of it either.

[SPEAKER_03]: So, I mean, that's a bit speculative.

[SPEAKER_03]: I think it's kind of tough to quantify what these banks actually do until quarterly reports come in where it shows how their balance sheets moved.

[SPEAKER_03]: But again, Mark, it's move on on speculation.

[SPEAKER_04]: Well, and also, prices on the Shanghai Gold Exchange are now at a premium to the global benchmark in London.

[SPEAKER_04]: So it just shows you, in Asia, there's a lot of demand for gold.

[SPEAKER_04]: The good news is, the Senate most pretty washed out just up until a couple weeks ago, and now we're getting back on its high horse.

[SPEAKER_04]: So we're not at panic buying yet.

[SPEAKER_04]: That's when I think you have to be worried, but I think there's still some more room to

[SPEAKER_04]: Asia, get back on their buying spree.

[SPEAKER_04]: Now next to Bestock, our AI stocks are disrupting SAS in a 2026.

[SPEAKER_04]: The great Saskot, SAS Hockelips, excuse me.

[SPEAKER_04]: The SAS Hockelips.

[SPEAKER_04]: There we go.

[SPEAKER_04]: That's the debate we're going to talk about tomorrow.

[SPEAKER_04]: But for now, the phone lines are open in the 80s.

[SPEAKER_04]: Now you need to start.

[SPEAKER_04]: I blame the invisible line.

[SPEAKER_06]: Got a question for Justin or Luke?

[SPEAKER_06]: You're the best person to ask it.

[SPEAKER_01]: I wanted to pick your brain about apples.

[SPEAKER_01]: What did you think about their earnings call?

[SPEAKER_01]: It's just a good time to add to my position.

[SPEAKER_06]: Call in Vestock.

[SPEAKER_06]: 888-99 chart.

[SPEAKER_05]: There are a few things that make KPP financial special.

[SPEAKER_05]: One of them is parallel investing.

[SPEAKER_05]: This means they invest right alongside their clients.

[SPEAKER_05]: Here's how it works.

[SPEAKER_05]: When KPP financial makes a trade for their clients, just in line makes the same trade for himself and KPP.

[SPEAKER_05]: On the same day, at the same price, and same percentage.

[SPEAKER_05]: No front running, no special treatment.

[SPEAKER_05]: Learn more about Parallel Investing at Investalk.com.

[SPEAKER_09]: or Dell computers.

[SPEAKER_09]: I really like enjoying Dell computers.

[SPEAKER_09]: So that's why I said that.

[SPEAKER_09]: I have a good rest of your day.

[SPEAKER_04]: This is my favorite call I've ever had, I think.

[SPEAKER_04]: Very refreshing.

[SPEAKER_04]: Very refreshing.

[SPEAKER_04]: Well, thank you for the call and thank you for having such an interest in investing such a young age.

[SPEAKER_04]: That's awesome.

[SPEAKER_04]: You're looking at two companies that a lot of nine-year-olds use.

[SPEAKER_04]: Roblox and Dell computers.

[SPEAKER_04]: So I'm assuming that's why he's looking at these two.

[SPEAKER_04]: So this is all the same time.

[SPEAKER_04]: It's something that I'm very, very often at the same time.

[SPEAKER_04]: But this is a good lesson for him in quality of the business, just because you use both doesn't mean that both are great businesses.

[SPEAKER_04]: Sometimes one is burning capital and poor performer long-term, and the other is the exact opposite.

[SPEAKER_04]: And that's the case here where Roblox,

[SPEAKER_04]: It just doesn't make money, it's never really made money, and it has a lot of interest, but it doesn't have a very good business model.

[SPEAKER_04]: Whereas Dell, it's more expensive.

[SPEAKER_04]: If you look at it from a multiple perspective, but at least it's return of capital, it's 29% and very positive, and has a great balance sheet.

[SPEAKER_04]: So I would much rather own Dell than Roblox, what do I have?

[SPEAKER_03]: Yeah, I would as well.

[SPEAKER_03]: I think Momentum is also telling you a lot for both these things, right?

[SPEAKER_03]: It comes down to one of them is a money maker, one of them is a money loser, and oftentimes,

[SPEAKER_03]: Finding the products you use you like is a great way to start to think about what types of companies you should also be investing in, but it's that second step that you need to take before you realize is it a product that you like, or is it a company that is good?

[SPEAKER_04]: Yeah, it's a great starting place, but it's not where you end.

[SPEAKER_04]: Too many people just start with that.

[SPEAKER_04]: I like this product, you know, like this company, and they end their search and their analysis.

[SPEAKER_04]: They're over the last five years.

[SPEAKER_04]: They return on Roblox shares, negative 15%.

[SPEAKER_04]: That's not good.

[SPEAKER_04]: What was it for now?

[SPEAKER_04]: Let me pull up Del real quick.

[SPEAKER_04]: We're gonna be big.

[SPEAKER_04]: It's gonna be much better.

[SPEAKER_04]: I'll tell you that much You're very good.

[SPEAKER_04]: Trailing five year returns 39.6% here we go.

[SPEAKER_04]: There we go.

[SPEAKER_04]: So definitely go with Del Lastly, let's talk about potential red flag in the Tech industry and that is the credit markets

[SPEAKER_04]: Credit markets are starting to price in more risk for the hyperscalers.

[SPEAKER_04]: Very similar to what happened with the railroads, right for the panic of 1873.

[SPEAKER_04]: So is this telling us something, Luke, that the risk that these hyperscalers are taking to build out such large amount of infrastructure is unlikely to pay off.

[SPEAKER_03]: You know, I think that oftentimes, and I've brought this up on the show before, and explained credit default swaps and all these things and spreads.

[SPEAKER_03]: And more often than not, the bond market gets things right before the equity markets do.

[SPEAKER_03]: Yeah.

[SPEAKER_03]: The reason being is because, you know, you need a company to make revenue now in order to pay your interest today.

[SPEAKER_04]: Well, I had no less liquid, right, if you want to say that.

[SPEAKER_04]: And if I was liquid.

[SPEAKER_04]: Yeah.

[SPEAKER_03]: Um, but.

[SPEAKER_03]: You know, I think more than anything what spreads are showing and what credit of fault swaps are showing is it's becoming a bit more risky.

[SPEAKER_03]: Does that mean that, you know, the risk of default is meaningfully higher.

[SPEAKER_03]: No, what it does me know is that these companies are going to continue to pay or be forced to pay higher yields on their issuances, which means that's another thing that's going to weigh down on margins in the future.

[SPEAKER_04]: And I think it's another reason why long-term bonds, even tragedies, 10-year, 30, are going up because they're competing for that type of capital that wants to commit long-term.

[SPEAKER_04]: So I think they're putting kind of stress on the long end of the curve in general.

[SPEAKER_04]: But Luke, is there an inverse correlation?

[SPEAKER_04]: I remember you talking about this.

[SPEAKER_04]: Inverse correlation between cat-bex spend and equity returns.

[SPEAKER_03]: Uh, huh, we'll have to get into that on another show.

[SPEAKER_04]: I guess so, we've got another time.

[SPEAKER_04]: Clifinger.

[SPEAKER_04]: Got a little bit clifinger.

[SPEAKER_04]: See you, yes or no.

[SPEAKER_04]: It'll tell you another time.

[SPEAKER_04]: What a revolution.

[SPEAKER_04]: I'm Justin Klein with Luke Guerrero, reminding you about KFP Financial's parallel investing.

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[SPEAKER_04]: Good night.

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