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

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

[SPEAKER_01]: Good afternoon, fellow investors.

[SPEAKER_01]: Welcome back to another edition of Invest Talk.

[SPEAKER_01]: This is our Monday, August 24th, 2026 edition.

[SPEAKER_01]: I'm excited for this week with you.

[SPEAKER_01]: There's a lot to discuss in this market with the opx week behind us and mostly earnings behind us.

[SPEAKER_01]: But we do have one big thing this week.

[SPEAKER_01]: bell weather now of the tech space and the AI trade and whether or not the market will react positively or not will probably send a broader signal.

[SPEAKER_01]: So that's going to be big and then we have Jackson Hole from the Fed coming up here later in the week.

[SPEAKER_01]: What potential changes are coming out of the Fed that can move asap prices, the dollar, interest rates,

[SPEAKER_01]: And then, of course, the geopolitical volatility that we are just getting used to do now in the straight-of-home uses been closed for six months, roughly, now.

[SPEAKER_01]: And there's no real signs that's going to change the meaningful way.

[SPEAKER_01]: So what does that mean for energy, energy costs, food costs, inflation metrics, all of that.

[SPEAKER_01]: So we're going to talk about all this and much, much more for the next hour.

[SPEAKER_01]: And most importantly, we'll be your live calls.

[SPEAKER_01]: 88899 chart is how to get through and ask your question on today's show.

[SPEAKER_01]: And then I'll bring some data and perspective to help over 25 years and thus some experience so that you can make better decisions with your money.

[SPEAKER_01]: That's what this show is about.

[SPEAKER_01]: And just a bit, we'll talk about today's mark performance and run down the show topics, but first, let's tackle this call a question now.

[SPEAKER_06]: Hi guys, Gratio.

[SPEAKER_06]: I was calling about Robin, but I just wanted to see if you guys thought of it, if it's time to get out of it, take some profits, or you think it's going to go a little higher.

[SPEAKER_06]: I'll be listening on the show.

[SPEAKER_06]: Thank you.

[SPEAKER_01]: Looking at Robin Hood, Hood is the symbol, H-O-O-D, a name that's been up and down throughout the years, but as of late hours, been on a nice little rally

[SPEAKER_01]: Crypto kind of meandering, Robinhood is done.

[SPEAKER_01]: Okay, it's rally from below around 65 in what was that?

[SPEAKER_01]: April, now we're at 103, but it's still way down from its high back in the fall when it was at 150 in change.

[SPEAKER_01]: This year, it ain't supposed to be $1.9 to 80 next year, but still $103 stock.

[SPEAKER_01]: The problem here to me is,

[SPEAKER_01]: It's very reliant on the average investor.

[SPEAKER_01]: It's very going to be very exposed to the tech trade.

[SPEAKER_01]: And the tech trade has been, especially since June has been kind of struggling.

[SPEAKER_01]: Not coincidentally, so has Robinhood.

[SPEAKER_01]: So I don't love that.

[SPEAKER_01]: I don't love that correlation.

[SPEAKER_01]: I don't love their the thickness of their user base.

[SPEAKER_01]: retail investors.

[SPEAKER_01]: Those that use the app and take it's a big game, because they throw confetti every time you buy a stock, for example.

[SPEAKER_01]: The fee cash flow still remains negative, very negative, about 7.8 billion, 93 billion dollar market cap.

[SPEAKER_01]: So they continue to burn more and more capital, and that's to me the biggest issue.

[SPEAKER_01]: It's just that negative free cash flow

[SPEAKER_01]: The valuation is not exactly cheap either.

[SPEAKER_01]: Enterprise value, you've been looking forward as 43.

[SPEAKER_01]: So yes, I would take profits on Robinhood if you're up on it.

[SPEAKER_01]: I think this is this little rally recently is a good exit point.

[SPEAKER_01]: Now, we had a wonderful show on Friday.

[SPEAKER_01]: I looked into story about financial innovation.

[SPEAKER_01]: and how it's now a fed problem broke down what tokenized money and instant payments could mean for the plumbing of the financial system.

[SPEAKER_01]: How it impacts banks businesses and much, much more and we answered quite a listener question on sandists.

[SPEAKER_01]: And if you happen to miss a go check it out, the best way to get every show is to follow the stock wherever you get your podcasts.

[SPEAKER_01]: Now we have a lot of ground to cover over the next 45 minutes or so in time permitting it will get to all of it.

[SPEAKER_01]: Our main focus point is about regulations catching up to the digital asset world, the Senate has delayed, work on the Clarity Act, but what is it trying to do in the end and if it gets passed, what real impact will it have on the sector as a whole?

[SPEAKER_01]: We have other topics on the docket as well.

[SPEAKER_01]: One is in regards to private credit and there's a way to look into the private credit

[SPEAKER_01]: and it is through public companies.

[SPEAKER_01]: They invest in the same type of businesses, these private equity and private credit.

[SPEAKER_01]: companies do.

[SPEAKER_01]: And those are the BDC.

[SPEAKER_01]: So we're going to look at the in aggregate.

[SPEAKER_01]: What kind of trends are happening underneath the surface within that part of the credit markets?

[SPEAKER_01]: Because ultimately, that is extremely important these days.

[SPEAKER_01]: It's not just what the big banks are doing.

[SPEAKER_01]: They're not really taking the the the the risk, even the corporate bond market is much safer than it had been the past because most of these companies just finding capital.

[SPEAKER_01]: in private markets with through BDC.

[SPEAKER_01]: So it's going to be interesting to see what they're saying about that slice of large slice now of the credit markets.

[SPEAKER_01]: And then brands, we're talking about brands, everybody knows like Heinz Ketchup, like Praga, like

[SPEAKER_01]: smuckers, general mills, etc.

[SPEAKER_01]: There are milling in brands that were big and in the era where if you just did some TV commercials you could get a lot of brand recognition.

[SPEAKER_01]: Now the media environment is so dispersed and people care less about brands they care more about, you know, is it organic?

[SPEAKER_01]: Or what is the price?

[SPEAKER_01]: Is it, you know, have a certain flavor that I want?

[SPEAKER_01]: But these major brands are losing their shine and what does that mean for the package food market in general long-term.

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

[SPEAKER_01]: We also have voice bank questions on investment loss and then a rubric incorporated RBRK and of course questions that came in if you have a comment section on the investor best talk YouTube channel.

[SPEAKER_01]: But we're gonna head to a quick break.

[SPEAKER_01]: You can call me anytime, 24, 7, 365, on the investor like voice bank.

[SPEAKER_01]: Or, if you're listening live on our website, on our live stream there, or possibly on the aim of 1220 in the Bay Area, you can call right now at 88899 chart.

[SPEAKER_01]: Paying on it, cause I plan to cycle today's market activity in the next segment.

[SPEAKER_03]: Every investor who's working to build a secure financial future.

[SPEAKER_03]: The more you learn about how the market works, the better your chances for success.

[SPEAKER_03]: In Vestark, 888-99 chart.

[SPEAKER_01]: It ain't 99 chart, it ain't 99, 2, 4, 2, 7, 8.

[SPEAKER_01]: So I could do an answer question on today's show.

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

[SPEAKER_01]: It was overall a negative day, but not in a major way.

[SPEAKER_01]: The S&B was down about a quarter percent.

[SPEAKER_01]: Nasdaq really was the loser down about three quarters of one percent.

[SPEAKER_01]: Dow was up about a quarter of a percent.

[SPEAKER_01]: The total stock market.

[SPEAKER_01]: was down about a third of one or a cent of my market cap weighted.

[SPEAKER_01]: And the big news is really about Treasury Secretary Bessent considering using the Treasury General Count to fund bond buybacks, which to me wasn't really big news because where do you think the Treasury General Count money comes from?

[SPEAKER_01]: It comes from borrowing.

[SPEAKER_01]: money.

[SPEAKER_01]: So yeah, I might help in the short term, but ultimately the twist that they announced last week, because last week, week before, last couple weeks, where they would buy back longer-day securities and sell short-day securities, that's going to have to happen.

[SPEAKER_01]: That's how you get money into the Treasury General Count in the first place.

[SPEAKER_01]: is you go out and you sell debt, or obviously taxes, right?

[SPEAKER_01]: But we need more money coming in from from debt each month.

[SPEAKER_01]: So I don't really think this is big news.

[SPEAKER_01]: It's just, I think what he's trying

[SPEAKER_01]: with the European Union back in the day when it was going through its crisis, almost at 2012, ish timeframe.

[SPEAKER_01]: He said, whatever it takes, and it signals to the market that, hey, we're here.

[SPEAKER_01]: We're going to step up, we're going to solve the issues that the market is worried about.

[SPEAKER_01]: And I think that's what the Treasury Secretary best in the trying to do is basically say, we are here, whatever tools we have, we are going to use, and that would be a signal for the market to flood into bonds.

[SPEAKER_01]: and lower rates.

[SPEAKER_01]: Now, it did help a little bit.

[SPEAKER_01]: The long end was down about three to four basis points.

[SPEAKER_01]: Still, right around where we were during this announcement.

[SPEAKER_01]: So I don't think it's really done a whole lot so far.

[SPEAKER_01]: Rates continue to say steady, consolidate here, and most likely will move higher in time.

[SPEAKER_01]: Dollar next is up.

[SPEAKER_01]: Point two percent of the day, gold up point four percent, silver down one point four, Bitcoin up to point four crude oil down to point four percent on the days.

[SPEAKER_01]: You know, the, there's rumors, rumors that the, our, our blockade is more selective.

[SPEAKER_01]: We're still allowing some oil through the, the straightaway moves that nearly as much as they were before, but.

[SPEAKER_01]: more based on who we like.

[SPEAKER_01]: They're wrong still controls part of it, but they're other corridors that can't.

[SPEAKER_01]: So there's some complications out of the Middle East, but overall, there's still some oil getting out, and that's been helpful to keep kind of a lid on prices for oil, though.

[SPEAKER_01]: Our strategic oil reserve is winding down, so the big question is, will it last in time for the midterms?

[SPEAKER_01]: I think there's about 41 days left of reserves.

[SPEAKER_01]: We'll see.

[SPEAKER_01]: Clearly, this administration is trying to keep things afloat for the midterms, which is what every administration does.

[SPEAKER_01]: In our environment right now, you just have to do more, because of our debt situation.

[SPEAKER_01]: So it's going to be very interesting to see how this evolves.

[SPEAKER_01]: What else do we get this today to start the week?

[SPEAKER_01]: Yeah, not a whole lot of headlines.

[SPEAKER_01]: Still kind of waiting on the Nvidia news, like I said on Wednesday, that will probably be the next big market moving event.

[SPEAKER_01]: Let's go answer a question that came in via our website.

[SPEAKER_01]: Kim S, I bought Cracker Barrel Stock in December of 2025 for 2840, symbol is CBRL.

[SPEAKER_01]: She says because it collapsed and investors didn't like the idea of changing the brand logo.

[SPEAKER_01]: hindsight that's smart move, now it's at 58.

[SPEAKER_01]: P, those 50, they bought it as a long-term hold, but at this price, I think I should take my profit and run what would K, PV, financial do, thanks for your advice.

[SPEAKER_01]: Interesting, okay?

[SPEAKER_01]: So this is, a lot of you will have these issues, where they buy something cheap, they're right, they go into it saying I like the company, I like the long-term vision,

[SPEAKER_01]: And then it goes up and they're looking at valuation and they're saying it's too expensive.

[SPEAKER_01]: That may be correct, but what was the original thesis as a long-term hold?

[SPEAKER_01]: Is that still intact?

[SPEAKER_01]: That's what you have to ask yourself.

[SPEAKER_01]: If that's still intact, then

[SPEAKER_01]: This is more of a time to trim, potentially.

[SPEAKER_01]: You trim based on valuation.

[SPEAKER_01]: You don't sell the entire position.

[SPEAKER_01]: So that's what you have to ask yourself.

[SPEAKER_01]: Is your long-term thesis still intact?

[SPEAKER_01]: To me, the biggest issue is that earnings are expected to go negative this year, and then only $10.

[SPEAKER_01]: But next year, that's down from 609 and 2022.

[SPEAKER_01]: So huge drop in earnings.

[SPEAKER_01]: What's going on here is my question.

[SPEAKER_01]: I would have to be comfortable with this being a flash in the pan as opposed to a longer term trend.

[SPEAKER_01]: But once again, don't use valuation as a reason to get out of a long term, hold but it can be a reason to reduce your exposure and that's what I would at least do right now.

[SPEAKER_01]: There are 24-7 investment advice bank never closes so you can leave your finance and investment question anytime and I'm an 8-899 chart and I work continues after this break.

[SPEAKER_03]: It's official, total lifetime downloads for the Invest Talk podcast are now more than 63 million.

[SPEAKER_03]: Justin Klein is here now taking your calls live, Invest Talk, 888-99 chart.

[SPEAKER_03]: Let's talk about.

[SPEAKER_01]: private Reddit.

[SPEAKER_01]: This is a very under-appreciated slice of the credit market these days as more and more money has gone to these entities, these non-baked entities, swear the risk is very opaque.

[SPEAKER_01]: So I'd to know exactly what's in these private funds because they are private.

[SPEAKER_01]: But there are public versions of them, another reason why I think.

[SPEAKER_01]: buying private credits, usually a very bad idea.

[SPEAKER_01]: Because you can get the same type of investment with a lot more liquidity in what are called BDC companies.

[SPEAKER_01]: Now, there are 10 largest ones of now-report earnings, names like Aries Capital, Blackston Secured Lending, KKR Capital, Golog Capital, Goldman Sachs, BDC, they have one, Main Street Capital,

[SPEAKER_01]: mid-cap financial investment, mortgaged family direct lending, blue owl capital, and six street specialty lending.

[SPEAKER_01]: Those are the top 10.

[SPEAKER_01]: As a looking at their results in aggregate, I'm gonna tell you what's going on in that slice of the financial industry that nobody really talks about.

[SPEAKER_01]: So what did it say?

[SPEAKER_01]: Well, there's something in the industry called non-acrual status.

[SPEAKER_01]: What does that mean?

[SPEAKER_01]: Basically means they're not paying anymore interest.

[SPEAKER_01]: So when, or when the company is not assuming they're going to get interest, it basically is when a company is 90 days or more past due on payment, and they see enough credit deterioration that they don't expect to be made whole.

[SPEAKER_01]: That's a default when you're lending money, you don't get your interest, you don't get your original principal back because that's a default.

[SPEAKER_01]: And this will feed into the dividend, eventually, if it continues to grow.

[SPEAKER_01]: So let's look at the numbers.

[SPEAKER_01]: With all of these names, the number of borrowers, at least one debt instrument in non-acruinal status, went from 4.26 to 4.69.

[SPEAKER_01]: So about one in 20 nearly.

[SPEAKER_01]: That's way up from 2023 was at 3.69.

[SPEAKER_01]: So it's got from 3.69 to 4.69 in two years.

[SPEAKER_01]: two and a half years.

[SPEAKER_01]: And this is when the size of these BDC companies have basically doubled over the past three years.

[SPEAKER_01]: It's about $560 billion a total debt.

[SPEAKER_01]: That's as of the first quarter of the year.

[SPEAKER_01]: In dollar terms, non-approved debt rose 39% to 2.8 billion.

[SPEAKER_01]: That brings the total,

[SPEAKER_01]: to roughly $10 billion.

[SPEAKER_01]: But $10 billion of the $516 billion in debt.

[SPEAKER_01]: So this sounds wonky, it sounds kind of boring, but at the end of the day, this is where the bad lending in this market was, or in this cycle, for we say.

[SPEAKER_01]: I always say, the last crisis, the mortgage crisis, right?

[SPEAKER_01]: If you go look throughout history, the next crisis is never the same as the last crisis.

[SPEAKER_01]: It's always different.

[SPEAKER_01]: Now I'm not saying there's going to be a crisis, but this is certainly the area where the most risk is building in our financial system, both the BDCs as well as those private credit companies, private credit investments.

[SPEAKER_01]: Let's go to Lisa and Alamida looking at D-O-D-Y.

[SPEAKER_01]: Do you honor looking to buy it?

[SPEAKER_00]: I own it.

[SPEAKER_01]: OK. Can you clarify that symbol again?

[SPEAKER_01]: J-O-B-Y-J-O-B-H-O-B-H-O-B-H-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B-O-B

[SPEAKER_01]: Yeah, I mean, this is a company that's it's one of those growth names that is just selling the dream that they're going to be the go to manufacture of Basically drones for humans, right vertical takeoff and landing commercial passenger vehicles Now their revenue is growing, but it's still extremely low and they're burning an extreme amount of capital

[SPEAKER_01]: $7 billion market cap and their free cash flow is negative $743 million, and it just gets worse each and every year.

[SPEAKER_01]: So, I would sell it yesterday, other markets closed yesterday, but I would have sold it today, but I would sell it immediately tomorrow.

[SPEAKER_01]: This is not a good investment.

[SPEAKER_01]: This is the end to the system.

[SPEAKER_01]: This is very important lesson here is make sure that when you're looking at a company, it's not just about the story, it's not just about what they do, it's about the quality and trajectory of that business.

[SPEAKER_01]: And this is a bad business that is getting worse and worse and worse.

[SPEAKER_01]: Each and a year, they lose more and more and more money, and they just issue more and more and more shares.

[SPEAKER_01]: This is the exact opposite of a good investment.

[SPEAKER_01]: This is actually a fantastic short, so I would run very fast.

[SPEAKER_01]: Now, the Vestock Voice Bank never closes, or ready for your finance and investment questions whenever you wanna give us a call.

[SPEAKER_01]: Maybe do that right now.

[SPEAKER_01]: Coming up while I answer more, so hang on.

[SPEAKER_01]: at KPP Financial.

[SPEAKER_01]: Accountability means more than advice.

[SPEAKER_01]: It means we invest alongside you.

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

[SPEAKER_01]: same day, same price, same percentage.

[SPEAKER_01]: If your portfolio moves, ours does too.

[SPEAKER_01]: That is alignment, that is transparency.

[SPEAKER_01]: That is the KPP difference.

[SPEAKER_01]: Visit investtalk.com to get your free portfolio review.

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

[SPEAKER_03]: One of them is parallel investing.

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

[SPEAKER_03]: Here's how it works.

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

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

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

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

[SPEAKER_01]: Our main focus point today is about the Clarity Act, where regulators are trying to build a broad framework for digital assets.

[SPEAKER_01]: The White House is certainly pushing this along with the ICC and the CFTC, but it's still the suck stuck in the Senate, it's past the house, but it's been stuck in the Senate mainly over concerns of safeguards preventing public officials.

[SPEAKER_01]: from those in Congress, the White House, etc.

[SPEAKER_01]: from profiting from their own cryptocurrency ventures obviously, President Trump has his own family cryptocurrency endeavors.

[SPEAKER_01]: And so that, as raised a lot of red flags, I'm both sides of the aisle.

[SPEAKER_01]: And that's why it really hasn't been pushed through.

[SPEAKER_01]: But let's talk about if a version of it ever does get passed, what is it trying to do?

[SPEAKER_01]: And doesn't make the industry as a whole safer.

[SPEAKER_01]: Now, for years, the crypto industry has been operating in kind of a gray area, legally.

[SPEAKER_01]: And the SEC has been regulating by enforcement is basically bringing up issues with certain tokens and certain coins or whatever, and a lot of times, prosecuting.

[SPEAKER_01]: But the core of the new legislation is about defining exactly what digital asset is.

[SPEAKER_01]: And even more importantly, who police is it?

[SPEAKER_01]: So as the SEC, that security security is a change commission, then the CFTC, they cover commodities.

[SPEAKER_01]: That's the commodity future is trading commission.

[SPEAKER_01]: Now, the definition within this framework of an asset is that it's tied to a contract or the essential

[SPEAKER_01]: So this goes back to, if a team is launching a coin and they have control over it, that is an investment.

[SPEAKER_01]: But if it's decentralized, like Bitcoin, we're no single entity controls the network that is a bit, that is a commodity.

[SPEAKER_01]: So that's why you've seen Bitcoin ETFs being pushed through and not dogecoin ETFs.

[SPEAKER_01]: How does this impact companies, if it's past, well, the SEC recently proposed regulation crypto assets to give startups a legally compliant four-year exemption to raise capital via tokens, which is pretty interesting.

[SPEAKER_01]: Four-year exemption, wonder why?

[SPEAKER_01]: But also, it's kind of giving them car blanche to not really crack down on what are shady characters.

[SPEAKER_01]: We know there's a lot of shady characters

[SPEAKER_01]: We're the CFTC, they oversee the commodity exchanges where you're trading crypto to restrict it.

[SPEAKER_01]: Fraud, anti-money laundering, and other types of compliance.

[SPEAKER_01]: There's also an argument there.

[SPEAKER_01]: Are they doing a good job with that?

[SPEAKER_01]: There's still a lot of fraud within the industry.

[SPEAKER_01]: That has this impact investors.

[SPEAKER_01]: Well, the SEC will say there's more disclosures, but we know these people, the investors in crypto, they don't really read the disclosures.

[SPEAKER_01]: Most importantly, I think it would make it so exchanges could not easily co-mingle customer funds.

[SPEAKER_01]: You've seen that with like FDX style collapse, where they invested customer funds in certain tokens, and then they lost, and then the collapse.

[SPEAKER_01]: So clear regulation would be good for the industry, but it doesn't just make the asset safe as a whole.

[SPEAKER_01]: But what it does is it allows

[SPEAKER_01]: more seasoned investors, shall we say, to actually invest in the industry and have more permanent capital, which would lower the volatility and be good for the asset class as a whole.

[SPEAKER_01]: That's what the goal, I think of the industry is.

[SPEAKER_01]: Because they've kind of played all the games, especially with the ETFs.

[SPEAKER_01]: is how do you get more money flowing into the asset class?

[SPEAKER_01]: That's one of the things that continues to drive equity's higher over years is because there are 401k's now.

[SPEAKER_01]: There are real-bodvisors.

[SPEAKER_01]: There are a million ways where money just continues to flow into equities.

[SPEAKER_01]: And what the crypto industry wants to do is set up the same type of framework where entities from around the economy,

[SPEAKER_01]: especially ones with the bigger box, they are comfortable putting money in consistently.

[SPEAKER_01]: Day after day, week after week, month after month.

[SPEAKER_01]: Now it's very fickle, depending on, you know, your average retail investor, that's where most of the money going to crypto is coming from, and especially in the time like this, where liquidity is being, is becoming more, is becoming tighter, you have

[SPEAKER_01]: In a comic, it continues to be more case-shaped and people are pulling money out of crypto, and that's why despite the recent rally in Bitcoin, it's still in a longer-term downtrend.

[SPEAKER_01]: What's the next game here?

[SPEAKER_01]: What's the next catalyst for money going into crypto space as a whole?

[SPEAKER_01]: And this is, at least be with the industry things that they think it's it.

[SPEAKER_01]: That would, is it mean if you're a portfolio, should you put money into crypto?

[SPEAKER_01]: Well, maybe as a satellite position, now I'll tell you how we deal with crypto and ours and our portfolios.

[SPEAKER_01]: We are open.

[SPEAKER_01]: We do have some small exposure to companies that make money on the trading, but it's not their core business to say that.

[SPEAKER_01]: It's part of their offering is crypto wallets or some sort of making money off crypto transactions, that type of thing.

[SPEAKER_01]: And to me, that's a better business.

[SPEAKER_01]: You can see that within the equity market as well if you go look at the exchanges historically, that's where the money is, being the middleman.

[SPEAKER_01]: And despite the promise of decentralization, it's not really the quite there yet.

[SPEAKER_01]: And so having a little bit, okay, but we like the companies that play within the space and are more than middleman.

[SPEAKER_01]: Let's keep things moving rolling in another fresh list of the question now from eight to eight, nine year and chart.

[SPEAKER_07]: Hey, do you think it's just a building built up here?

[SPEAKER_07]: Calling about rubric or BRK, it's a cybersecurity cloud based business that has grown up quite nicely.

[SPEAKER_07]: I'm roughly around over 100% on it.

[SPEAKER_07]: And what do they get your thoughts?

[SPEAKER_07]: on if it's not necessary value now, I know I should probably be trimming a little, but at the same time, I think it could run up a little more.

[SPEAKER_07]: I wanted to see what you guys thought about holding for a little longer and maybe taking profits as a client's a little more.

[SPEAKER_07]: Love what you guys do as always.

[SPEAKER_07]: Look before you get your answer on the show.

[SPEAKER_01]: We're looking at Rue Brick, they provide cloud-based data security

[SPEAKER_01]: was losing money consistently year after year after year until really this year.

[SPEAKER_01]: They lost the penny last year, so basically, break even.

[SPEAKER_01]: Now, so to make 31 cents this year and 64 cents.

[SPEAKER_01]: And actually, the problem is it's a $98.

[SPEAKER_01]: Stock, now, these cybersecurity names in general traded a pretty high premium.

[SPEAKER_01]: So with that in mind, it's not that dramatically overvalued compared to most in the industry.

[SPEAKER_01]: My question really more is how is this better than the others?

[SPEAKER_01]: There are a lot of different cybersecurity companies out there that are trading at more reasonable valuations.

[SPEAKER_01]: It says good growth, but mainly on the top line because you're coming off of low base.

[SPEAKER_01]: Sorry, bottom line because you're coming off of low base.

[SPEAKER_01]: The top line, growing 25% this year, 22% next year,

[SPEAKER_01]: For a small name, that's good, but that's not amazing.

[SPEAKER_01]: From being honest with you.

[SPEAKER_01]: I mean, we use Sentinel 1, for example, for a KPP.

[SPEAKER_01]: They're also trading at a pretty hefty premium, but not as high as Rubric.

[SPEAKER_01]: So that's my question.

[SPEAKER_01]: I would have to be very confident that Rubric has something special that's different than these other types of security names.

[SPEAKER_01]: It's going to keep their growth above average, compared to the rest of the industry.

[SPEAKER_01]: I haven't seen it done research in the space.

[SPEAKER_01]: I haven't seen Rubik come out on top for any of those reasons.

[SPEAKER_01]: Maybe your cybersecurity expert, you have something, you know, we don't know a KPP, but unless that's the case, I would rather own some of the bigger names that have just better profitability, better cash flow, and aren't trading at quite the premium.

[SPEAKER_01]: Let's go answer a YouTube comment question.

[SPEAKER_01]: It says, Corey Durbin says, what are your thoughts on?

[SPEAKER_01]: Enter a C, E, N, S is the symbol.

[SPEAKER_01]: I'm looking for another way to invest in the increased power demand in the coming years, side from investing in the utility provider, Uranium, that's your gas.

[SPEAKER_01]: Index has experienced stellar earnings growth and appears to still be trading at a reasonable valuation.

[SPEAKER_01]: Do you think this is a company that has more upside or is it worth investing at this price?

[SPEAKER_01]: Looking at Enter Assist, this is a $7 billion market cap.

[SPEAKER_01]: Pull it up in a couple of systems here.

[SPEAKER_01]: One of my main red flags is it's kind of an end downtrend, right?

[SPEAKER_01]: The last color rubric, that was a nice uptrend, technicals are fine, there's more evaluation thing.

[SPEAKER_01]: But now, the NS is topped back in, what was this?

[SPEAKER_01]: May, about two, 45.

[SPEAKER_01]: Now we're at 187, already on 23% from its 52-week-high.

[SPEAKER_01]: So it's starting 1437 next year.

[SPEAKER_01]: What do they do?

[SPEAKER_01]: A manufacturer of markets, industrial batteries.

[SPEAKER_01]: So they're doing well because these data centers, some of them might run on,

[SPEAKER_01]: Solar, they need backup, so they need battery systems, et cetera.

[SPEAKER_01]: And earnings have gone from $4.47 in 2021, all the way to $13.37 this year, then $14.37.

[SPEAKER_01]: Next year, else are upgrading those earnings, I like that.

[SPEAKER_01]: It isn't the 20 minute garbage shows at decent support.

[SPEAKER_01]: Let me give you even better support numbers.

[SPEAKER_01]: look at the valuation here.

[SPEAKER_01]: So good balance sheet, that's good, enterprise value beta rounds 10.

[SPEAKER_01]: I like that.

[SPEAKER_01]: Here's my issue.

[SPEAKER_01]: Why like it?

[SPEAKER_01]: I like the valuations decent.

[SPEAKER_01]: The return equity, a solid 18 and a half percent, the cash flows good.

[SPEAKER_01]: The balance sheet's good.

[SPEAKER_01]: I like all those things.

[SPEAKER_01]: My problem is the whole sector is getting a bit of, you know, it's going through a down cycle.

[SPEAKER_01]: Now that my only last one of the month or two who knows, but

[SPEAKER_01]: You don't near-term, I have issues with it.

[SPEAKER_01]: But I do think that this is one of those names that you want to probably be buying on DIPPS because if the demand for this type of product continues,

[SPEAKER_01]: with AI data center buildouts.

[SPEAKER_01]: This will be consistent, right?

[SPEAKER_01]: They'll be servicing on these power systems.

[SPEAKER_01]: They'll be new ones that need to be installed, et cetera.

[SPEAKER_01]: So I like this.

[SPEAKER_01]: I like the valuation, like the profitability.

[SPEAKER_01]: I just don't love the chart near term.

[SPEAKER_01]: I would love it down around 140 that would be screaming by down there, but that 187 now.

[SPEAKER_01]: Let's go answer it one more call a question.

[UNKNOWN]: Now.

[SPEAKER_05]: John here from Lakeland, Florida.

[SPEAKER_05]: My question is that is it better to take a loss and sell the stock before it goes to zero or is it better to allow the stock to go to zero or doesn't really matter either way.

[SPEAKER_05]: It's trying to figure out the best way to recoup as much of my losses only stocks as possible.

[SPEAKER_05]: I hope it makes some sense here.

[SPEAKER_05]: Look forward to hearing your insight.

[SPEAKER_05]: Appreciate you guys.

[SPEAKER_01]: Well, you know the best way to make up a loss is to take that capital and put it elsewhere.

[SPEAKER_01]: This is one of the, one of the biggest flaws the average investor has in their psyche.

[SPEAKER_01]: The psychological thing, we all want to get even.

[SPEAKER_01]: We never want to crystallize a loss.

[SPEAKER_01]: There's always that hope that it will turn around.

[SPEAKER_01]: But that's not how good investing works.

[SPEAKER_01]: You need to make sure your capital is being deployed effectively, consistently, not sitting there,

[SPEAKER_01]: Wasting away in a stock that's just not performing in a company that's not performing.

[SPEAKER_01]: So if you're down, you don't wait to go to zero, you say, okay, it's down.

[SPEAKER_01]: Something change is the business.

[SPEAKER_01]: Maybe maybe the market is telling you something that my thesis was wrong or something changed about the business.

[SPEAKER_01]: And I need to move on.

[SPEAKER_01]: Because there's something called opportunity cost.

[SPEAKER_01]: This is the case for everything in your life.

[SPEAKER_01]: Every second of your life, you're experiencing opportunity costs.

[SPEAKER_01]: You're doing one thing, you could be doing something else, and that's the same with capital.

[SPEAKER_01]: You have money stuck in something that's not doing well, they're opportunity costs of that.

[SPEAKER_01]: You can go take that money and put it elsewhere.

[SPEAKER_01]: So that's how you make it back.

[SPEAKER_01]: You know, just sit there, hoping and praying, hope is not a strategy.

[SPEAKER_01]: Taking that money of redeploying into something that's actually working is,

[SPEAKER_01]: And that's what you need to do.

[SPEAKER_01]: Take the loss.

[SPEAKER_01]: Hopefully it's in a taxable account.

[SPEAKER_01]: You can take the loss.

[SPEAKER_01]: So you can offset that against gains elsewhere.

[SPEAKER_01]: You can maybe carry $43,000 a year to offset your income.

[SPEAKER_01]: For example, however ends up for you.

[SPEAKER_01]: But the bottom line is no, you don't just wait.

[SPEAKER_01]: You don't just let it waste away.

[SPEAKER_01]: Because you're

[SPEAKER_01]: Wasting the opportunity elsewhere.

[SPEAKER_01]: Sell it, move on, it's okay.

[SPEAKER_01]: It doesn't mean you're a bad person.

[SPEAKER_01]: It doesn't mean that you suck the best investors in the world.

[SPEAKER_01]: Make mistakes.

[SPEAKER_01]: They lose money on certain investments.

[SPEAKER_01]: That's how this works.

[SPEAKER_01]: And until you realize that you won't be able to maximize the capital that you have.

[SPEAKER_01]: Those are the best thought I'm just in climbing.

[SPEAKER_01]: We have one goal here each every week.

[SPEAKER_01]: They help you achieve your own version of financial freedom.

[SPEAKER_01]: And they're working to use after this final break.

[SPEAKER_01]: Which questions in right now,

[UNKNOWN]: Thank you.

[SPEAKER_03]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

[SPEAKER_03]: Now the torch has been passed, and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.

[SPEAKER_03]: So when you've got fanatts and investment questions, don't forget to call in Vestock.

[SPEAKER_03]: 888-99-Chart.

[SPEAKER_01]: We're going to go up to Fremont and talk to Frank looking at A-A-O-N, which is an HVAC company.

[SPEAKER_01]: Do you want to look at it?

[SPEAKER_04]: I was looking to buy, but it keeps going down.

[SPEAKER_04]: Thank you for taking my call, great show, really appreciate it.

[SPEAKER_04]: But I don't know why it's going down.

[SPEAKER_04]: I thought due to that center and everything you're conditioning will be in high demand.

[SPEAKER_01]: Yeah, this one's interesting.

[SPEAKER_01]: And is it signaling something broader for the AI space?

[SPEAKER_01]: You know, one of the things about the big hyperscalers and the tech names is that they're in the major indices, the NASDAQ, the S&P, et cetera, whereas you smaller names, they don't have the consistent bid as those others.

[SPEAKER_01]: And so, is once again, is this telling us something?

[SPEAKER_01]: I think that's,

[SPEAKER_01]: could be the case here because you're right it's business had been doing well it's supposed to do much better this year up 75% earnings at $2.36 than 357 next year and it's a $76 stock but it has declined pretty rapidly down 50% from its high just what early late June it's a pretty rapid decline like you said it keeps going down what I do in these instances is I let the market speak to me.

[SPEAKER_01]: The market is speaking to you.

[SPEAKER_01]: Maybe this is a market.

[SPEAKER_01]: Maybe the market's speaking to everybody that this is declined so rapidly from his earnings.

[SPEAKER_01]: It's spiked up on attorneys back in May from about 105 all the way to high rent or a close-wall 130.

[SPEAKER_01]: Then it went all the way up to one

[SPEAKER_01]: I don't want to step in front of this.

[SPEAKER_01]: I want to watch it now.

[SPEAKER_01]: If it can stop, it can find some stability, it can start to reverse, it can show me signs that this deterioration, this rapid deterioration, is ending, then yeah, maybe I could say, okay, the market is speaking that it's found, support, it's found.

[SPEAKER_01]: a floor here, and it can work off of that until then, I'm staying away from it.

[SPEAKER_01]: And this is where these are our three-pronged approach to KPP.

[SPEAKER_01]: We're looking at the macro side, what sector should we be in?

[SPEAKER_01]: Based on the economy accelerating, decelerating, inflation rising, or falling, then we look at what's the best within the industry.

[SPEAKER_01]: So that's a question you have to ask you, of is A on the best.

[SPEAKER_01]: within this industry.

[SPEAKER_01]: We own an adjacent name that's doing much better than this, so I don't think it's the best one in the industry, but it's still doing well.

[SPEAKER_01]: So I'm not gonna poo poo, it's not a bad business.

[SPEAKER_01]: It's just not the best in the industry.

[SPEAKER_01]: And then the technicals have to line up as well.

[SPEAKER_01]: And the technicals are not lining up at all here, and you need to recognize that and stand the sidelines.

[SPEAKER_04]: Okay, thank you so much, really appreciate it.

[SPEAKER_01]: Thanks for the call.

[SPEAKER_01]: Lastly, let's talk about packaged food companies.

[SPEAKER_01]: We're talking about the big names from Conagro, General Mills, Smuckers, Pepsi, et cetera.

[SPEAKER_01]: North American, or US volumes, were flat to falling at all of these food companies.

[SPEAKER_01]: And even in household products, like Colgate, Colgate, Palm Olive, why these consumers are trading down?

[SPEAKER_01]: And it's showing in the consumer staple index,

[SPEAKER_01]: Since early 2023, the that index is up 14% where the S&P is nearly doubled, and so the old marketing playbook of having commercials does not work anymore in the middle class and Gen Z, especially are trading down.

[SPEAKER_01]: And the newer generation that grew up on Heinz Catchup, they have a lot of money, but they're not spending more at the grocery store.

[SPEAKER_01]: And we know

[SPEAKER_01]: You'd older, some of them are passing away.

[SPEAKER_01]: At US brick and mortar retailers, they sold 9.3 billion fewer units of food and consumer package food in the past 12 months than five years ago.

[SPEAKER_01]: And there's a health aspect of this as well.

[SPEAKER_01]: People are shopping, not in the middle of the store, on the outside of the store, either in the fresh food section or the freezer section.

[SPEAKER_01]: Not in the package food section.

[SPEAKER_01]: And then the brands that are taking share are the up and coming ones.

[SPEAKER_01]: So that's really what's happening.

[SPEAKER_01]: organic, or just more interesting than, you know, your pregos of the world.

[SPEAKER_01]: And the volume decline continues to accelerate, so people are trading down to store-bought brands, there's a health food aspect to this, and then there's just a marketing aspect that they can't, they don't, they don't, the mac and cheese commercials aren't working anymore.

[SPEAKER_01]: And so when you go look at these companies on the market, understand why their stocks are struggling.

[SPEAKER_01]: The great value it's a value trap.

[SPEAKER_01]: So be aware.

[SPEAKER_01]: While I'm just inclined to remind you that K-P Financial's parallel investing will make a trade for our clients, make the same trade for our self-same day, same price, same percentage, no front running.

[SPEAKER_01]: no special treatment.

[SPEAKER_01]: We've got to write alongside our clients.

[SPEAKER_01]: We show the same risk and potential for success and you can learn more at investor.com.

[SPEAKER_01]: Please tell your friends and family about a free podcast downloads.

[SPEAKER_01]: We can find any time at iTunes, Spotify or wherever you get your podcast.

[SPEAKER_01]: Be sure to rate and review on iTunes as well.

[SPEAKER_01]: Independent thinking shows success.

[SPEAKER_01]: This is the best talk.

[SPEAKER_01]: Good name.

[SPEAKER_02]: Invest talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.

[SPEAKER_02]: It's important for the listener to understand that not all comments made will apply to that.

[SPEAKER_02]: Specifically, nothing said she'll be taken to be investment advice.

[SPEAKER_02]: or shell statements on this program be considered and offered to buy or sell security.

[SPEAKER_02]: Because such advice is rendered solely on an individual basis, and at times will require that the investor review a prospectus before investing.

[SPEAKER_02]: Invest talk is a copyrighted program of Plyne, Pavless, and Peasley Financial, a registered investment advisor firm, which retains all rights.

[SPEAKER_02]: For more information regarding KPP's investment advisors, call 1-800-557-5461.

[SPEAKER_02]: Thank you for listening, and your comments and questions are welcome on our 24-hour listener line at 888-99 chart.