[SPEAKER_08]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.

[SPEAKER_08]: Here's your host, Luke Guerrero.

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

[SPEAKER_00]: I'm your host, Luke Guerrero, and it's Tuesday, September 8th, 2026.

[SPEAKER_00]: Now, I hope each and every one of you listening out there had a restful and relaxing weekend.

[SPEAKER_00]: I know over here in southern California, it has been particularly hot in humid in a shocking turn of events Wednesday.

[SPEAKER_00]: I read the real field supposed to be one 17 due to humidity.

[SPEAKER_00]: So, not looking forward to that, but I digress because today's show is

[SPEAKER_00]: In the same way, every other show is about you, about your finance and investigative questions, about your education.

[SPEAKER_00]: And because that's the case, before we talk about the market today, before we run down our show topics, why don't we tackle this color question now?

[SPEAKER_04]: I was just wondering what do you think of Pimko dynamic income fund BDI as just as a dividend play?

[SPEAKER_04]: Isn't for your,

[SPEAKER_04]: answer on the podcast.

[SPEAKER_04]: Thank you.

[SPEAKER_00]: The pinco dynamic income fund is a fund that we actually get pretty decent amount of questions on, although it has been quite some time since I have at least received them, maybe Justin has.

[SPEAKER_00]: But it's a bond fund.

[SPEAKER_00]: It is actively managed by PIMCO.

[SPEAKER_00]: It is 1.1% in terms of its expense ratio.

[SPEAKER_00]: And people like it because of the income component.

[SPEAKER_00]: Now it's 30 day SEC yield.

[SPEAKER_00]: some reason this number is not on here right now.

[SPEAKER_00]: Interesting.

[SPEAKER_00]: Either way.

[SPEAKER_00]: Okay, so it is a, yeah, about 14 to 15 percent is what it's forward yield is.

[SPEAKER_00]: So that is definitely one of the highest in the market right now uses a bit of leverage to amplify returns at holds high yield bonds at holds emerging market debt at holds mortgage back security.

[SPEAKER_00]: So there's a little bit of credit risk there as well.

[SPEAKER_00]: But the most important thing to know about this fund is that it is a closed and bond fund.

[SPEAKER_00]: And so the difference between a closed and open end fund is, a closed end fund is a fixed amount of shares, meaning you are buying shares from another investor.

[SPEAKER_00]: Meaning, as opposed to an open end fund where you're buying directly from the mutual fund, and a share is created at net asset value for you.

[SPEAKER_00]: Meaning, you can actually get this thing at a premium or at a discount.

[SPEAKER_00]: Now, this particular fund typically trades at a premium.

[SPEAKER_00]: It's currently at about seven to eight percent.

[SPEAKER_00]: It looks like is it's premium to now that is definitely below its five year average, but because of the manager being Pimco, this fund typically does trade at a premium.

[SPEAKER_00]: Another important thing.

[SPEAKER_00]: to note which we always mentioned as well as that net investment income only covers about 45% of the distribution.

[SPEAKER_00]: What that means is that in effect more than half of the payout comes from a turn of capital or unrealized gains.

[SPEAKER_00]: And now has been in a long-term downtrend.

[SPEAKER_00]: The high yield looks great.

[SPEAKER_00]: but your principle is slowly shrinking so that 14% yield, it's not a 14% return, it is a meaningful portion of it, is your money being handed back to you.

[SPEAKER_00]: Now if you're income focused if you understand what Nav erosion is and the trade-off of Nav erosion, maybe this might make sense for you.

[SPEAKER_00]: But if somebody's seeing this thing and sees 14% yield, that's while the 40% yield and thinks it's risk free, it's not.

[SPEAKER_00]: If you're worried about a downtrend in the economy, this is a heavily leveraged high yield fund.

[SPEAKER_00]: It is one of the riskier places.

[SPEAKER_00]: to be.

[SPEAKER_00]: So understand what you own is always the number one rule.

[SPEAKER_00]: In this case, understand the dynamics of closed-end fund.

[SPEAKER_00]: And what that means for your share of its net asset value over time.

[SPEAKER_00]: For most people, I don't think PDI makes sense.

[SPEAKER_00]: That is the PIMCO dynamic income fund.

[SPEAKER_00]: Thanks for the call.

[SPEAKER_00]: We had a great show for you last Friday.

[SPEAKER_00]: And of course yesterday, we brought you a best of episode.

[SPEAKER_00]: But last Friday, we talked about something that is thorn in the side of a lot of Gen Z people and they don't realize it yet.

[SPEAKER_00]: And that's because sports betting and investing have

[SPEAKER_00]: started to compete for a lot of Gen Z people for their finite capital.

[SPEAKER_00]: We also answered a listener question on, uh, to your SPY.

[SPEAKER_00]: So if you have a miss it, go check it out the best way to get every show.

[SPEAKER_00]: It's to follow in Vestalk wherever you get your podcasts.

[SPEAKER_00]: Now on to today, where our main focus point is about something close to home, diesel prices because they hit yet another record and in a lot of ways fuel inflation, specifically diesel pricing, is a bit of a wild card that Wall Street is underestimated.

[SPEAKER_00]: This is as a result of both the conflicts in the Ukraine and Iran.

[SPEAKER_00]: And because they're knocking critical refineries offline, and that pain ripples far beyond the gas station from trucking costs to grocery store shelves.

[SPEAKER_00]: Diesel is in a lot of ways the hidden inflation driver that could complicate the federal reserves next move.

[SPEAKER_00]: Also, we'll touch on the profit recession, taking a little bit of a dive into the NFIB survey that was released last week.

[SPEAKER_00]: But if a discussion on the 8.6 billion that Americans lost in investment fraud last year and should we have time at the end of the show we'll touch on the feds at plumbing problem.

[SPEAKER_00]: We also have some voice bank calls ready to play, including one on how we manage our watchlists and another on intuitive search surgical to your ISRG.

[SPEAKER_00]: There's also some questions that came in from the comment section of the Invest Talk YouTube channel.

[SPEAKER_00]: And hopefully we hear from some of you live throughout the show.

[SPEAKER_00]: We're headed into a quick break.

[SPEAKER_00]: Please remember, you can call anytime and leave your questions on the Investock Voice Bank.

[SPEAKER_00]: If you're listening via our live stream or on AM 1220 in the Bay Area, I encourage you to call now at 888-99 chart.

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

[SPEAKER_08]: Luke Guerrero is here, and he's ready with answers to your financial investment questions.

[SPEAKER_08]: Call in Vestock, 888-99, chart.

[SPEAKER_00]: start a little bit about the market today, of course, the market processing, all that happened over the long holiday weekend, and the net result was everything a bit lower.

[SPEAKER_00]: We saw the Dow down, one, 17, the S&P, down 50, the Nasdech, down 32, and the Russell 2000, down 52, basis points.

[SPEAKER_00]: Amongst the sectors healthcare was probably the weakest amidst some broad-based

[SPEAKER_00]: or trial data, poor results.

[SPEAKER_00]: You saw housing and autos and software as well, being some of the worst.

[SPEAKER_00]: So those names that are particularly hit by rising rates and inflation, interestingly enough though, momentum, semis, memory names, AI infrastructure, companies that generally are reliant upon debt financing,

[SPEAKER_00]: Did particularly well, energy, of course, doing well on oils, strength, and then industrial commodities like copper, some of the best performers on the deck.

[SPEAKER_00]: On the one side, we did see Treasury's a bit weaker.

[SPEAKER_00]: Yields were up one to three basis points in the curve generally flattened across the board.

[SPEAKER_00]: Dollar index was down 30 Bips, gold, finished down 80, silver up 40, and crude oil up 1.7%.

[SPEAKER_00]: what caused this?

[SPEAKER_00]: I mean, it was a bit of a defensive tilt.

[SPEAKER_00]: You know, you saw some more hawkish moves with respect to the situation in Iran.

[SPEAKER_00]: You saw a ramp up in kinetic activity.

[SPEAKER_00]: Earlier you saw that the Houthis attacked Saudi oil facilities, the US struck Iranian tankers in your cargu island, and then of course there was a previously undisclosed report that said Iran attacked attacked US Navy ships on Monday, and so understandably Brent is now not far from its earlier highs, holding just below $100 a barrel, while diesel prices which we're going to talk a little bit about later on in the show,

[SPEAKER_00]: continue to be flagged as concerns for global growth.

[SPEAKER_00]: That being said, I think a lot of what the market is waiting for is CPI on Friday.

[SPEAKER_00]: It's probably the most important that it has been in some time given its implications for next week's FOMC decision.

[SPEAKER_00]: On the date of front, NFIB small business optimism fell the 98.7 in August from 99.8 in July.

[SPEAKER_00]: We saw weeks sales, we saw supply disruptions, and we saw inflation weighing on sentiment as well.

[SPEAKER_00]: New York Fed's latest SE showed unchanged one year inflation expectations at 3.6, though the three year horizon was down 10 basis points at 3.2.

[SPEAKER_00]: Well, the 12 month unemployment rate expectations, it's highest level since April of 2020.

[SPEAKER_00]: Looking ahead for the rest of the week, we get ADP private payrolls is the loan release tomorrow.

[SPEAKER_00]: While we have PPI in claims, the highlights on Thursday, and of course as I already mentioned, CPI, as well as the preliminary University of Michigan Consumer Sentiment, caps off the week on Friday.

[SPEAKER_00]: All right, let's shift gears and go over to the YouTube comment section question bank for a ticker for a ticker for a question about ticker A, C, W, I it's as high Justin and Luke Kenny from Philly go birds.

[SPEAKER_00]: Can you tell me your thoughts on ticker ACWI I heard your thoughts about international emerging markets?

[SPEAKER_00]: Does this fund help you track any larger trends and is it a good fund to have in your portfolio?

[SPEAKER_00]: Thank you and love this show.

[SPEAKER_00]: Alright ACWI, which we in the industry also call AQUI stands for all country world index.

[SPEAKER_00]: What does that mean?

[SPEAKER_00]: Well, you guessed it.

[SPEAKER_00]: It means it's tracking every single stock in the world, every country, developed markets, emerging markets, frontier markets.

[SPEAKER_00]: It's based on MSCI global equity classifications, meaning it's subject to

[SPEAKER_00]: It is subject to the MSCI breakpoints, IEV, the limits that it is willing to include the portfolio from a size perspective, and this particular ETF is managed by I shares, of course, reputable large manager.

[SPEAKER_00]: How it attacks global markets is

[SPEAKER_00]: really through market cap waiting.

[SPEAKER_00]: So it takes each individual country and weight stocks based on the waiting within those individual countries and then gives each country its weight based on the overall global marketplace.

[SPEAKER_00]: And so there are no active bets being made here.

[SPEAKER_00]: Really, you know, it's expense ratio.

[SPEAKER_00]: Although you would be saying is a bit expensive at 32 bips.

[SPEAKER_00]: It's

[SPEAKER_00]: do that in order to rather typically funds that do that cost more than just U.S. funds.

[SPEAKER_00]: In certain areas,

[SPEAKER_00]: It is going to exclude small caps.

[SPEAKER_00]: It may do some sampling.

[SPEAKER_00]: Actually, you think this particular fund might exclude front to your markets as well.

[SPEAKER_00]: So generally what you're going to get is a ETF that is slightly larger than the benchmark.

[SPEAKER_00]: But is it doing anything crazy for you?

[SPEAKER_00]: So if you're tracking the global stock market, this is the type of fund you want to be in.

[SPEAKER_00]: But it's not going to make any bets here.

[SPEAKER_00]: It's not going to make any plays on emerging versus international.

[SPEAKER_00]: It's just going to give you what the market gives you on a market cap weighted basis.

[SPEAKER_00]: But either way, certainly a cheap way to go about investing globally.

[SPEAKER_00]: That is ACWI, the I shares MSEI, AquaEGF.

[SPEAKER_00]: Thanks for watching.

[SPEAKER_00]: Alright, 24-7 voice bank, never closes, so you can leave your finance and investment questions anytime on 888-99 chart.

[SPEAKER_00]: Our work continues after the break.

[SPEAKER_07]: A smart financial strategy isn't just about what your portfolio earned this year.

[SPEAKER_07]: It's about whether your money is supporting the lifestyle you actually want to live.

[SPEAKER_07]: KPP Financial provides professional investment management with comprehensive financial planning to help clients make better informed financial decisions.

[SPEAKER_07]: Learn more at investtalk.com

[SPEAKER_00]: The August and F.I.B.

[SPEAKER_00]: Small Business Optimism Index came out this morning at 98.7 down about 1.1 points from July and just above the 52 year average of 98 which sounds fine.

[SPEAKER_00]: It's mediocre, it's not alarming.

[SPEAKER_00]: But we always say this, don't just read a headline, dive in.

[SPEAKER_00]: And when you do dive in, it tells a bit of a story that really matters for people that invest in small caps or own a business.

[SPEAKER_00]: There was a net negative 19% of small businesses reporting positive profit trends.

[SPEAKER_00]: negative 19, that is down three points from July.

[SPEAKER_00]: That's the measure that tells you whether small firms are making money.

[SPEAKER_00]: And according to it, they're not.

[SPEAKER_00]: A net 6% expected a higher real sales, only in that 10 expected conditions to improve in six months, and that's down five points from the previous report.

[SPEAKER_00]: The most interesting number though, a net 28% plan to raise prices in the coming months.

[SPEAKER_00]: That is unchanged from July.

[SPEAKER_00]: Small businesses,

[SPEAKER_00]: are losing money in order to deal with that, they are going to charge you more anyway.

[SPEAKER_00]: That doesn't really make much economic sense.

[SPEAKER_00]: I think a lot of it comes from an area of desperation, right?

[SPEAKER_00]: They're not raising prices because demand is strong, which typically allows one to raise prices.

[SPEAKER_00]: The raising prices because their input costs are getting higher, paying more to employ people, more for insurance, more for fuel, more for materials, and it's rising faster than their revenue, and they can't really seem to get out of that.

[SPEAKER_00]: And the credit picture is a bit of a twist as well.

[SPEAKER_00]: The average rate paid on short-term loans actually fell the seven and a half percent.

[SPEAKER_00]: Credit availability is net negative two percent.

[SPEAKER_00]: So borrowing cost went down even as we started to price in more rate hikes.

[SPEAKER_00]: The reason being banks may be cutting rates to attract small business borrowers because loan demand is weak.

[SPEAKER_00]: So when a borrower has leverage over the lender, understandably, it usually means the borrower doesn't want to borrow.

[SPEAKER_00]: It's not bullish.

[SPEAKER_00]: So just seeing rates falling isn't necessarily good.

[SPEAKER_00]: And the number one problem, according to small businesses, labor quality, 35% can't fill open positions, 62% have supply chain disruptions.

[SPEAKER_00]: There's some structural constraints here that rate policy can't fix.

[SPEAKER_00]: So essentially, the Fed can high grades forever, and it won't solve the fact that a small business owner can't find help.

[SPEAKER_00]: So if you don't run a small business and you instead own small caps or small cap fund and these are names that we have been pretty bullish on and you've seen a bit of a rotation this year, the data is not what you want to see, right?

[SPEAKER_00]: The Russell 2000 is up over 22% this year, but roughly 40% of its constituents face a 360 billion dollar maturity wall of debt that needs free financing and rates for them removing higher while this survey tells you the underlying businesses,

[SPEAKER_00]: are in a profit squeeze.

[SPEAKER_00]: So this this valuation gap maybe it keeps the rally going but the fundamental foundation underneath is a bit softer than what we've been seeing.

[SPEAKER_00]: This all feeds into which we should be looking at this week ahead of the Federal Reserve meeting next week because all of this goes into not only the path of inflation, the strength of the economy, but really what the Federal Reserve has available to it as an option.

[SPEAKER_02]: One kind of listener, first time color.

[SPEAKER_02]: I wanted to know when you mentioned a watch list.

[SPEAKER_02]: If you have a way of automating that as to get price changes and news for those companies you might put on the list, listen to the podcast, enjoy what you all do.

[SPEAKER_02]: Take care.

[SPEAKER_00]: So the short answer to your question is yes.

[SPEAKER_00]: It is,

[SPEAKER_00]: very difficult without using automations generally to track all of the information you need to track about your watch list, especially as that list expands and you start to scale that to various sectors and various markets and what have you.

[SPEAKER_00]: Now for us personally we use a mixture of external tools and services like faxet,

[SPEAKER_00]: Sometimes we use internally created tools to maintain our watch list, to pull data, various data providers through API.

[SPEAKER_00]: So that's all to say, yes, we do do that.

[SPEAKER_00]: Now for a investor such as yourself or a listener, there are tools available to you.

[SPEAKER_00]: the Y charts is a good option that tends to be cheap.

[SPEAKER_00]: There's a bunch of things that you can look at online.

[SPEAKER_00]: I would say to help you maintain that.

[SPEAKER_00]: Now that being said, is it necessary to see pricing every single day?

[SPEAKER_00]: Probably not.

[SPEAKER_00]: You really care more about trends, about profitability, but valuations, all those things.

[SPEAKER_00]: And looking at that each and every day becomes a bit of noise.

[SPEAKER_00]: So even though we do have these things, I'm not checking the name on a watch list each and every day to see what the price is because there's not much explain a toy pattern there.

[SPEAKER_00]: But tracking those things certainly is a critical part of deciding when you want to kick them off the list or maybe include them in your portfolio.

[SPEAKER_00]: Thanks for the call.

[SPEAKER_00]: On the next invest stock, we'll look into this story.

[SPEAKER_00]: World food prices hit for your highs.

[SPEAKER_00]: Is food inflation already baked in to the next CPI report?

[SPEAKER_00]: That's tomorrow, but for now I'm Luke Guerrero, and we are ready to take your calls any time at 888-99 chart.

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[SPEAKER_07]: Accountability means more than advice.

[SPEAKER_07]: It means we invest alongside you.

[SPEAKER_07]: 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_07]: same day, same price, same percentage.

[SPEAKER_07]: If your portfolio moves, ours does too.

[SPEAKER_07]: That is alignment, that is transparency.

[SPEAKER_07]: That is the KPP difference.

[SPEAKER_07]: Visit investtalk.com to get your free portfolio review.

[SPEAKER_08]: In the early days, in Vestock was Jerry Klein and Steve Peasley.

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[SPEAKER_00]: On Friday, the average price of diesel fuel in America hit 5.85 a gallon.

[SPEAKER_00]: That was an all-time record.

[SPEAKER_00]: It was up 7 cents from the previous day, up 60% from a year ago, and in California, where I used to have to commute in a diesel car, 770 a gallon.

[SPEAKER_00]: The reason I wanted to spend some time talking about this is that most people watch unleaded gasoline prices, most of the financial media talks about gasoline, most consumers use gasoline, but diesels the fuel that actually drives inflation.

[SPEAKER_00]: And that matters right now more than it has in years.

[SPEAKER_00]: Even if you never leave the house and work from home and only order things on Amazon or Walmart or however you would have buy things online It still comes to your house in a truck things move around in trucks.

[SPEAKER_00]: There's absolutely no way

[SPEAKER_00]: in a modern economy that you cannot be exposed to diesel prices, everything you buy that is not grown in your own backyard, and that you don't make for yourself moved because of diesel.

[SPEAKER_00]: It's not just trucks.

[SPEAKER_00]: farm equipment, construction equipment, all of it is diesel.

[SPEAKER_00]: So when diesel prices surge every single link in the supply chain gets more expensive in those costs flow through to consumer prices, but albeit with a bit of a lack, anywhere between three and six months.

[SPEAKER_00]: Now back when I bought my diesel car in 2020, diesel was actually cheaper than gas.

[SPEAKER_00]: The reason why it's more expensive than gas right now, well, there are wars on two continents that are simultaneously destroying refinery capacity.

[SPEAKER_00]: In Russia, Ukrainian drone strikes have knocked more than a quarter of the countries you're finding capacity offline, Russia, the world's second largest diesel exporter after the United States extended an export ban through the end of September because it's facing a domestic shortage.

[SPEAKER_00]: Now, in the Middle East, you have Iranian strikes on tankers and infrastructure near the straight before moves, and that's shut down refineries, and also cut off raw material

[SPEAKER_00]: earnings call that Valero COO did on January 30th, saying that refining fundamentals are tight and they're getting tighter.

[SPEAKER_00]: They have idle refineries representing about 5 million barrels per day of capacity.

[SPEAKER_00]: It's roughly 8% of global diesel demand being disrupted.

[SPEAKER_00]: Now the previous record for diesel prices, $5.81 with set in June of 2022, and that fell in an entirely different environment.

[SPEAKER_00]: In 2020, crude oil was spiking, and diesel was moving with it.

[SPEAKER_00]: This time, crude is elevated, but not at records.

[SPEAKER_00]: There's a huge premium above crude for diesel, it's called the Crack Spread, and

[SPEAKER_00]: It's at historic levels.

[SPEAKER_00]: It's clear it's not just an oil problem, it's a refining problem.

[SPEAKER_00]: And the issue is primarily that oil problems it'll be at not easy to fix are far easier to fix.

[SPEAKER_00]: Then refining problems, because you can't build a refinery overnight.

[SPEAKER_00]: You can't restart one that was bombed in a week

[SPEAKER_00]: Now this inflation transmission, it's already visible.

[SPEAKER_00]: We saw last month CPI should energy prices up over 18% you over year.

[SPEAKER_00]: We have diesel specific costs flowing into transportation which is embedded in the price of food and building materials and retail goods.

[SPEAKER_00]: And for rural and suburban households, predominantly those in the Northeast, I mean, you feel it all too well because households that keep with oil.

[SPEAKER_00]: I mean, diesel's record means heating season is going to get very expensive.

[SPEAKER_00]: For the Fed, diesel is maybe the spoiler that could force their hand.

[SPEAKER_00]: And I saw a piece in Reuters that essentially put this case to the test because if diesel keeps driving transportation costs higher, those costs flow into core goods prices, the category that Fed watches most closely.

[SPEAKER_00]: So I hate becomes harder to avoid, not because wages are surging or consumer demand is overheating, but because the cost of moving everything from point A to point B becomes more expensive.

[SPEAKER_00]: Now, from an investment perspective, what does this mean?

[SPEAKER_00]: It means energy stocks, midstream operators, refinery operators specifically.

[SPEAKER_00]: doing well.

[SPEAKER_00]: You know, these companies earn the cracks bread, so when the spread is at record, their margins are at records.

[SPEAKER_00]: It also supports the case for commodities as inflation hedges, reinforces that staying short in terms of duration.

[SPEAKER_00]: With respect to fixed income positioning, something we've been recommending for multiple years at this point.

[SPEAKER_00]: But for the real economy for consumers, this is a tax.

[SPEAKER_00]: It's a tax on consumption, on business investment, on farming, on construction, on everybody who needs something delivered anywhere.

[SPEAKER_00]: And unlike a government tax, there's no vote, there's no exemption, there's nothing you can do about it.

[SPEAKER_00]: The numbers of the pump are just going to, at least for the foreseeable future, continue to go up.

[SPEAKER_00]: All right, what do we tackle a fresh color question now?

[SPEAKER_01]: Bye, don't forget from New York.

[SPEAKER_01]: Thank you for all that you do.

[SPEAKER_01]: I'm looking at stock ticker, I, S, R, G into a surgical.

[SPEAKER_01]: Looks like it's been going down for a little bit.

[SPEAKER_01]: And I know that the PE ratio is so high, but their fundamental still look good.

[SPEAKER_01]: Their return on equity is almost 28% their return on assets is 10%.

[SPEAKER_01]: I'm looking to for an entry point here and I guess what I'm also looking for is I want to put this in two accounts one in my Roth IRA I think this is a good long-term hold, but two I'm thinking about putting this in just a brokerage account taxable account Just think about like considering my value player something like that But yeah, just looking to see what you guys would say and thank you very much.

[SPEAKER_01]: Have a great night.

[SPEAKER_00]: Let's take a look at intuitive surgical that is I, SRG, it is a robotic assisted surgery company, so they have that flagship DaVinci surgical system, which, I don't even know when they create that thing, it's on its fifth generation now, my sister's a surgeon, she is familiar with and operates with them, she likes them for what it's worth.

[SPEAKER_00]: But as companies had a rough year, it is down 38% year to date, it's down 25% over the past 52 weeks.

[SPEAKER_00]: It was down another four and a half percent today.

[SPEAKER_00]: So it's now sitting at $129 billion in terms of its market cap with about 132 million in debt.

[SPEAKER_00]: So in terms of debt, really not much there.

[SPEAKER_00]: I'm seeing a lot that I like.

[SPEAKER_00]: I mean, revenue has exploded.

[SPEAKER_00]: I'll be at slow down.

[SPEAKER_00]: The annual growth rate in revenue is about 18%, but 25 to 26.

[SPEAKER_00]: That's fallen sharply to about 10.

[SPEAKER_00]: Free cash flows grown from 1.1 billion to 4.3 billion.

[SPEAKER_00]: From 2020 to this upcoming year, that's certainly good margins.

[SPEAKER_00]: Have expanded, gross margins have stayed relatively the same.

[SPEAKER_00]: And return on equity looks pretty solid.

[SPEAKER_00]: Now with respect to its competitors, I mean it's PDE is pretty high, it's price to book is pretty high, it's trading at 7.1 times price to forward looking earnings.

[SPEAKER_00]: So is it a value play necessarily, probably not?

[SPEAKER_00]: But as tends to be the case, I mean this is a name that has had good earnings, good revenue in the most recent quarter, beats on both fronts,

[SPEAKER_00]: But it's it's it's it's falling you know it's it's I think a lot of that is slow slowed down growth You had guidance at the end of last year that that had twenty twenty six as being slower the expectation that twenty twenty seven is likely to be the same as well

[SPEAKER_00]: I think you can't over extrapolate what one's strong quarter means, even though they did beat on revenue and earnings and by pretty wide margins.

[SPEAKER_00]: I think the question is, is there a newest iteration going to be adopted?

[SPEAKER_00]: Is there going to be procedure growth that reinforces the idea that's been questioned earlier in the year?

[SPEAKER_00]: uh... that kind of spearheaded this four-year guidance it's still trading at a premium this is not this is not even though it's been falling uh... really a value play just because it used to trade at seventy seven times price before looking earnings in fourteen times price to book value and it's no half of that on both fronts doesn't make it a value play

[SPEAKER_00]: Now, where should you house this thing?

[SPEAKER_00]: I mean, you could keep it in your brokerage account and your Roth, they doesn't pay a dividend.

[SPEAKER_00]: So you don't get the tax hit, you know, with respect to keeping it in your brokerage account if I'm gonna pay income taxes on dividend yields.

[SPEAKER_00]: Um, so, you know, I think wherever you want to custody this thing is, or rather, we're going to put this thing, it's fine if you think it's going to be a big grower that's certainly a reason to put it in a Roth, but, but again, I want to reorient yourself because just because something has fallen down doesn't necessarily mean it's a value play.

[SPEAKER_00]: For me, falling revenue, just one good quarter after poor projections, still a bit too expensive.

[SPEAKER_00]: So I'd probably keep it on my watch list.

[SPEAKER_00]: That is, forgot the ticker, ISRG Intuitive Sergical Ink.

[SPEAKER_00]: Thanks for the call.

[SPEAKER_00]: Let's make it to an arrow from 888-99 Church.

[SPEAKER_05]: Hey, there's a look.

[SPEAKER_05]: I am trying to get some more information upon Nike NKG.

[SPEAKER_05]: I know the retail market is Bluetooth Aztecs, and especially with shoes and...

[SPEAKER_05]: there's so much competition, but Nike has been down, has been going down for a very long time, coming all the way from 165-167-31.

[SPEAKER_05]: Do you think now is a good long term buying opportunity looking at a TPE ratio in somewhere

[SPEAKER_00]: interesting that you ask about Nike because this is kind of an ongoing debate between me and colleague in the office.

[SPEAKER_00]: Nike is of course one of the most well-known athletic apparently apparel companies on planet earth and it has had a rough rough five years.

[SPEAKER_00]: It has been down significantly from its highs in 2021, where it was trading at roughly $175 a share.

[SPEAKER_00]: A little bit over that actually.

[SPEAKER_00]: Now it's trading at $38.10.

[SPEAKER_00]: It's down 48% in the past 52 weeks.

[SPEAKER_00]: It's down 40% year to date.

[SPEAKER_00]: Margins have compressed return on equity, has fallen.

[SPEAKER_00]: Revenue growth has absolutely flatlined.

[SPEAKER_00]: uh to the point where it's actually fallen off of peak revenue that it saw back in 2023 and and just started to potentially correct that issue this upcoming year now it did be on earnings and it's most recent quarter by about 50% so it extended its beat streak uh it's

[SPEAKER_00]: had revenue essentially in line with estimates.

[SPEAKER_00]: There's a little bit of a revenue surprise there.

[SPEAKER_00]: But it's an issue.

[SPEAKER_00]: It's had a lot of issues.

[SPEAKER_00]: It's had issues within the Chinese market, right?

[SPEAKER_00]: That was a huge source of revenue for them.

[SPEAKER_00]: And it's now come to the point where it is.

[SPEAKER_00]: trading at the lowest it's been in five years from a valuation perspective now when you look at valuations like a price earnings that number moves for one of two reasons because earnings expectations change or because prices change

[SPEAKER_00]: So something is at a bottom line PD of its five year range and earnings expectation goes down.

[SPEAKER_00]: What happens?

[SPEAKER_00]: PDE goes up and then prices may fall as well to meet those earnings expectations changes.

[SPEAKER_00]: So just because something's at the bottom end here, it doesn't mean the price can't fall because there's both a numerator and denominator in that equation.

[SPEAKER_00]: I can't get past revenue declining over the trailing two years.

[SPEAKER_00]: on a nominal basis, and a lot of the EPS beats have just been at least in the most recent quarters, certainly inflated by one time Terra for a later benefit rather than core operating strength, they might have a lot longer to recover, it is what I'm trying to say here, because

[SPEAKER_00]: There's just so much competition.

[SPEAKER_00]: You have different segments that have popped up now.

[SPEAKER_00]: You have Athelysia.

[SPEAKER_00]: You have wider, better.

[SPEAKER_00]: technology amongst competitors, in terms of the actual sports shoes.

[SPEAKER_00]: And so even if it does, well, does it ever go back to the behemoth that was, my thinking is probably not.

[SPEAKER_00]: It is a name that we used to hold for clients, but at a certain point we had to sell it because the writing kind of seemed to be on the wall here.

[SPEAKER_00]: Now, that doesn't necessarily mean that the stock doesn't price doesn't move up from here.

[SPEAKER_00]: But I think a lot of people are hoping it goes back to 177 a share and I just think we live in a fundamentally different world than 2021 and a lot has to go right for a long time for a Nike even begin to claw its way back.

[SPEAKER_00]: So what I think is one thing what the market has been telling you over the past couple years with this persistent downtrend that has never broken is that they don't quite believe it either.

[SPEAKER_00]: So

[SPEAKER_00]: For me, it's still a falling knife.

[SPEAKER_00]: I would still stay away from Nike, take her N, K, E, thanks to the call.

[SPEAKER_00]: This is Investock.

[SPEAKER_00]: I'm Guerrero, and we have one goal here.

[SPEAKER_00]: That's to help you achieve your financial freedom.

[SPEAKER_00]: Our work continues after this break.

[SPEAKER_00]: It is our final break.

[SPEAKER_00]: So get your questions in now at 888-99 chart.

[SPEAKER_06]: Luke Guerrero is here and ready to tackle your questions.

[SPEAKER_08]: There are a few things that make KPP financial special.

[SPEAKER_08]: One of them is parallel investing.

[SPEAKER_08]: This means they invest right alongside their clients.

[SPEAKER_08]: Here's how it works.

[SPEAKER_08]: When KPP financial makes a trade for their clients, just in client makes the same trade for himself and KPP.

[SPEAKER_08]: On the same day, at the same price and same percentage.

[SPEAKER_08]: No front running, no special treatment.

[SPEAKER_08]: Learn more about parallel investing at investtalk.com.

[SPEAKER_00]: In July, the SEC formed a retail fraud working group.

[SPEAKER_00]: Why they do this?

[SPEAKER_00]: Well, Americans reported losing more than $8.6 billion to online investment fraud last year and cryptocurrency scams accounted for $7.2 billion of that total.

[SPEAKER_00]: So the working groups mandate, it's pretty broad.

[SPEAKER_00]: It's covering offering frauds, pumping up schemes, market manipulation, and misconduct by both brokers, as well as investment advisors.

[SPEAKER_00]: But I think this kind of raises a uncomfortable question and Forbes pointed this out.

[SPEAKER_00]: What exactly was the SEC not already doing?

[SPEAKER_00]: The agency has always been responsible for policing investment fraud.

[SPEAKER_00]: So creating a working group to do the job you're supposed to be doing raises some questions.

[SPEAKER_00]: Now the announcement was five paragraphs long and said the group would use quote data and technology to find wrongdoing.

[SPEAKER_00]: But that was pretty much all it's said.

[SPEAKER_00]: I think a lot of this connects to our focus point on Friday, which I encourage you to check out on Genzi and sports betting.

[SPEAKER_00]: Finra's research has consistently shown the most confident investors are the worst at spotting scams.

[SPEAKER_00]: The people who rate their own financial knowledge as very high are more likely, and not less likely to fall for fraudulent investment pitches.

[SPEAKER_00]: And as because confidence,

[SPEAKER_00]: reduces skepticism if you believe you're savvy enough to evaluate any opportunity then you are less likely to say, hey, what's going on here?

[SPEAKER_00]: Ask the basic questions to catch a scam.

[SPEAKER_00]: Is this registered?

[SPEAKER_00]: Is there a track record?

[SPEAKER_00]: Why is the return so much higher than anything else available?

[SPEAKER_00]: You also got to keep in mind that nearly 9 billion that's only reported losses, meaning the actual figure is definitely higher because many victims don't report it, either because they're embarrassed or they don't realize they've been defrauded until years later.

[SPEAKER_00]: I mean, the FBI noted that investment fraud losses have risen from 3.3 billion in 2022 to 8.6 in 2025, it's that's a not good 160% increase in 3 years.

[SPEAKER_00]: During a bull market, the scam industry is growing faster than the US equity market, and the crypto connection is critical to understanding this, 7.2 of the 8.6, and that came in the form is either a quote unquote investment or just a payment mechanism.

[SPEAKER_00]: I think crypto's combination of regulatory gaps of irreversible transactions, which is the whole point of technical complexity, that makes it the perfect vehicle for fraud.

[SPEAKER_00]: Once you send somebody your crypto is gone, there's no charge back, there's no reversal, there's no middleman, that's how it's designed, you can't just call a bank.

[SPEAKER_00]: As you all know, if you've been listening to the show, I like bringing you these stories because I think this is also an important part of trying to help you keep your money safe.

[SPEAKER_00]: So the advice is pretty simple.

[SPEAKER_00]: If someone asks you, contacts you with an unsolicited investment opportunity by text by social media, cold call, it's almost certainly a scam.

[SPEAKER_00]: If the return sounds too good to be true, it almost certainly is.

[SPEAKER_00]: If you're asked to pay in crypto or wire transferred, don't do that.

[SPEAKER_00]: If you can't verify the investment through SEC's Edgar Database or Finn was broker-check, don't invest.

[SPEAKER_00]: The SEC's working group might improve enforcement of the margins, but the best fraud prevention.

[SPEAKER_00]: It's not somebody else.

[SPEAKER_00]: It's a healthy dose of skepticism, apply to every opportunity that arrives without you looking for it.

[SPEAKER_00]: The scams that work best aren't the ones that look suspicious to the ones that look legitimate.

[SPEAKER_00]: They use professional websites, big testimonials, manufactured urgency, and they target people who think they're too smart to be fooled.

[SPEAKER_00]: If that fits you as a description,

[SPEAKER_00]: Alright folks, that doesn't for another episode of Invest Talk, Justin and I thank you for listening and encourage you to tell your friends and family members about our free podcast downloads and while you're over there, we'd really appreciate it if you left us a rate and review.

[SPEAKER_00]: Additionally, if you have not already I encourage you to check out our YouTube channels, Invest Talk with two teas, or we have YouTube exclusive content, and also our website.

[SPEAKER_00]: where you can learn more about parallel investing, which is our process for investing alongside our clients so that we share the same risks in the same rewards, and you can schedule a free portfolio review.

[SPEAKER_00]: Independent Thinking?

[SPEAKER_00]: Shared Success.

[SPEAKER_00]: This is Invest Talk.

[SPEAKER_06]: Good night.

[SPEAKER_06]: Invest talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.

[SPEAKER_06]: It's important for the listener to understand that not all comments made will apply to them.

[SPEAKER_06]: Specifically, nothing said she'll be taken to be investment advice.

[SPEAKER_06]: or shell statements on this program be considered an offer to buy or sell security.

[SPEAKER_06]: Because such advice is rendered solely on an individual basis, and at times, will require that the investor review a perspective before investing.

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