Will the Markets Lose Its Steam?

WEBVTT 1 00:00:00.960 --> 00:00:04.919 Good morning everybody. It's that time once again, it's Money Matter Show right 2 00:00:04.960 --> 00:00:09.240 here at eight o'clock A and S T seven ninety am. The markets, 3 00:00:09.320 --> 00:00:12.800 we're going to talk about that. Obviously, the big move to this week 4 00:00:12.960 --> 00:00:19.399 was all about the Federal Reserve not raising interest rates, but basically also saying 5 00:00:19.879 --> 00:00:24.039 we're done right now, things are working in our direction, and the markets 6 00:00:24.559 --> 00:00:28.800 took off. That made the whole time new high. Actually, how cool 7 00:00:28.879 --> 00:00:32.159 is that? And it's only up twelve percent this year? Can you imagine 8 00:00:32.200 --> 00:00:37.000 that they did what S ANDP and and NAZDAC did. Those those indexes are 9 00:00:37.079 --> 00:00:40.679 flying. They were up twenty two on the S and P and NAZDAK forty 10 00:00:40.679 --> 00:00:44.759 one all because of about seven of stocks or so. They just keep sowing 11 00:00:45.759 --> 00:00:50.759 and getting extended and extended. There. The equal weighted had a good week 12 00:00:50.799 --> 00:00:55.640 also, almost four percent, and they were up ten point eight percent now 13 00:00:56.280 --> 00:01:00.679 for the for the year. So where do we go from here? Do 14 00:01:00.759 --> 00:01:06.879 you believe Powell? What else is going on? These are things that we're 15 00:01:06.879 --> 00:01:10.959 going to discuss today right here on the Money Matter Show. Well, let's 16 00:01:10.959 --> 00:01:15.439 start off with this. The show is brought to you by Greenberg Financial Group. 17 00:01:15.840 --> 00:01:21.120 Greenberg Financial group is both a residented investment advisory and a brokadale well they're 18 00:01:21.120 --> 00:01:23.959 registered with the SEC, members of FENUA and members of SEPIK. On the 19 00:01:25.000 --> 00:01:29.120 show, we talk about different products, different strategies, definitely different ideas. 20 00:01:29.599 --> 00:01:34.719 Everything we discussed talk about has some type of risk. Please understand your risk 21 00:01:34.760 --> 00:01:42.079 tolerance. Please understand the risks that are involved in things. We cannot over 22 00:01:42.280 --> 00:01:52.480 emphasize enough risk reward strategies, especially as we get older and you know the 23 00:01:52.560 --> 00:01:57.200 losses are that need to have time to take back. You kind of get 24 00:01:57.239 --> 00:02:01.599 more stressed out about it then when you're sixty seventy years old than when you're 25 00:02:01.879 --> 00:02:06.599 thirty or forty or fifty years old. Even so, make sure there's quality, 26 00:02:06.920 --> 00:02:10.319 make sure you understand where your risk tolerance is and understand the balance of 27 00:02:10.319 --> 00:02:15.560 what's going on right now. Obviously you know would be in a balanced account 28 00:02:15.599 --> 00:02:20.759 fifty to fifty right now. The part of the the growth is moving higher, 29 00:02:21.120 --> 00:02:23.120 the part with the bonds is just giving you the income which is not 30 00:02:23.199 --> 00:02:28.479 bad now four or five percent, which is good over time. But you 31 00:02:28.479 --> 00:02:30.159 don't see the big moves when the markets move, but you do see it 32 00:02:30.199 --> 00:02:36.520 on half. So hopefully you know, most accounts are up more than half 33 00:02:36.560 --> 00:02:39.280 of what the S and P is and and that's a that's a good moves. 34 00:02:39.800 --> 00:02:45.759 So let's see here. Powell comes out and talks about interest rates and 35 00:02:45.840 --> 00:02:51.960 basically says, we're not done raising. We're not We're not going to raise 36 00:02:52.479 --> 00:02:57.240 anytime soon. What the caveat is he knows he would if he had to. 37 00:02:58.240 --> 00:03:01.439 The markets took that as if sometime in the next three to six months 38 00:03:02.280 --> 00:03:09.159 they're going to lower interest rates. There's no way they're going to lower interest 39 00:03:09.240 --> 00:03:15.800 rates if everything's working the way it is unless there's a real problem, a 40 00:03:15.879 --> 00:03:22.759 severe recession, something that hurts our economic growth that we don't know, a 41 00:03:22.800 --> 00:03:28.479 black Swan event. Those things come out of nowhere, and I don't believe 42 00:03:28.599 --> 00:03:32.680 or see that happening. But when they do happen, do we have enough 43 00:03:34.479 --> 00:03:37.520 what I call some men's stairs and out a house of cars that we keep 44 00:03:37.520 --> 00:03:39.560 falling down? And the answer is no. I mean, we're kind of 45 00:03:39.560 --> 00:03:45.240 blowing up here pretty good. Evaluations are getting high again. You know, 46 00:03:45.280 --> 00:03:49.479 we're in this December. Nobody wants to sell this tax selling. Nobody really 47 00:03:49.759 --> 00:03:53.400 wants to sell any of those big companies that would create a bigger move down 48 00:03:53.639 --> 00:03:58.479 because everyone's got gains in them. The dal Jones is not making all time 49 00:03:58.520 --> 00:04:04.919 new highs. You know, it's it's it's not even environment for the next 50 00:04:04.919 --> 00:04:11.719 few weeks that I see anything really taking us down maybe than two or three 51 00:04:11.759 --> 00:04:15.479 percent, and then rally back up, maybe into the end of the year. 52 00:04:16.319 --> 00:04:19.800 My gut is telling me forty seven. You know, we had little 53 00:04:19.800 --> 00:04:24.720 resistance right now. This forty seven to twenty five we get through there. 54 00:04:24.720 --> 00:04:29.279 We got forty seven fifty to forty eight hundred if we stop moving towards that, 55 00:04:29.399 --> 00:04:34.000 I can easily see with no selling coming in, manipulating of the markets, 56 00:04:34.040 --> 00:04:39.480 moving us to all time new highs, which would shock everybody. I 57 00:04:39.600 --> 00:04:43.120 did not believe that this year we get to all time new highs, even 58 00:04:43.120 --> 00:04:46.639 though the thirty of the presidency's usually good. But we had Powell out there 59 00:04:46.680 --> 00:04:53.040 pounding the table that he's leaving rates higher for longer. That's not an environment 60 00:04:53.079 --> 00:04:56.560 you want to go ahead and get all excited about jumping in with both feet. 61 00:04:58.879 --> 00:05:02.279 So absolutely on a risk reward strategy. I never saw the reward to 62 00:05:02.319 --> 00:05:05.720 where we're so over sold, so down that you have to jump in with 63 00:05:05.759 --> 00:05:11.560 both feet. We got down on the risk reward barometer, maybe down to 64 00:05:11.759 --> 00:05:14.680 three. When we got down to thirty five hundred thirty six hundred, and 65 00:05:14.759 --> 00:05:17.680 we bought there. But as we got over four thousand a couple times forty 66 00:05:17.680 --> 00:05:20.680 two forty three hundred, I thought we got a little bit high, but 67 00:05:20.800 --> 00:05:25.160 that's why you never sell, and then we got back in again. I 68 00:05:25.240 --> 00:05:30.360 would say we'll probably about getting close to a seven seven and a half right 69 00:05:30.399 --> 00:05:36.720 now on the risk parometers, where you maybe have ten as the highest. 70 00:05:38.639 --> 00:05:41.879 Seven seven seven and a half, we're getting to we go over and make 71 00:05:41.959 --> 00:05:45.959 new highs. I think we'll be at about a nine all right, because 72 00:05:45.959 --> 00:05:47.879 I don't see new money coming in and just saying, oh, buy the 73 00:05:47.920 --> 00:05:53.279 market, especially when you can sit there right now and wait and go get 74 00:05:53.319 --> 00:05:59.279 yourself four four and a half five percent in corporate paper money markets things like 75 00:05:59.319 --> 00:06:03.079 that, and wait. There is support coming in because of money from the 76 00:06:03.120 --> 00:06:09.600 fore one case that that start up again, from bonus money, from pension 77 00:06:09.639 --> 00:06:12.959 money. There's a lot of money that comes into the market in the first 78 00:06:13.040 --> 00:06:15.160 three months of the year, which is why you usually see a rally. 79 00:06:15.480 --> 00:06:18.800 I would not be surprised to see profit take it after the first of the 80 00:06:18.879 --> 00:06:24.800 year people trimming back their positions and bringing the markets down a little bit. 81 00:06:25.399 --> 00:06:29.279 It is an election year, so don't expect anything to happen that's going to 82 00:06:29.399 --> 00:06:34.279 be that bad. Coming out from a political standpoint, you know that the 83 00:06:34.319 --> 00:06:38.600 Democrats want to be pounding the table. Now that the markets have made new 84 00:06:38.680 --> 00:06:43.519 highs, let's ride it. We know that what he's doing is not helping 85 00:06:43.560 --> 00:06:47.920 the under the underlying the economy. People struggling. We all know that. 86 00:06:48.720 --> 00:06:54.199 We know that, and that's what's happening right now. We know that there 87 00:06:54.240 --> 00:06:59.920 are problems. We know that there's situations that can hurt us at any time. 88 00:07:00.839 --> 00:07:02.879 Can inflation come back, of easy money comes in, it could. 89 00:07:03.480 --> 00:07:08.199 Then the markets are gonna get scared because, let's face it, guys, 90 00:07:08.439 --> 00:07:12.360 unemployments are three point seven percent. People don't want to work, they don't 91 00:07:12.600 --> 00:07:17.120 want to work. There's too many people that can work that won't work, 92 00:07:17.319 --> 00:07:24.759 and which is inflating wages and that's inflationary. My feeling is you're going to 93 00:07:24.800 --> 00:07:28.639 see a pretty good holiday season. I think credit cards are getting up. 94 00:07:28.680 --> 00:07:31.800 We know that, we know that the money in savings is going down. 95 00:07:32.680 --> 00:07:36.199 We also know that people say, heck, I'm gonna have a good Christmas. 96 00:07:36.360 --> 00:07:41.319 It's a couple of years removed from the pandemic. This is gonna be 97 00:07:41.319 --> 00:07:43.600 a good one, and then we'll slow down. So I think it's true 98 00:07:43.639 --> 00:07:47.279 a consumer discretionary could be a little bit difficult going into next year, especially 99 00:07:47.279 --> 00:07:51.199 at the beginning. I think retail sales will be soft a little bit in 100 00:07:51.240 --> 00:07:55.000 the first part of the year because people want to pay off those credit cards 101 00:07:55.439 --> 00:07:59.240 that they're going to raise now, because let's face it, interest is so 102 00:07:59.800 --> 00:08:03.600 high on cards when you do not pay them off. I mean, you 103 00:08:03.680 --> 00:08:09.839 got anywhere from fifteen to probably twenty eight percent on the average that people pay, 104 00:08:09.160 --> 00:08:13.199 and that just doesn't allow you to get ahead of the game and get 105 00:08:13.199 --> 00:08:16.279 that paid off. So I see that. What I do see is the 106 00:08:16.319 --> 00:08:20.839 industry in defense stocks. I don't think defense stocks have any reason to be 107 00:08:20.959 --> 00:08:28.040 really not doing well, all right. I know Raytheon Obviously RTX industries got 108 00:08:28.079 --> 00:08:33.919 hit a while, and we'll see what happens with that. But you gotta 109 00:08:33.000 --> 00:08:37.240 believe, just like Boeing and all these other stocks that get beat up because 110 00:08:37.240 --> 00:08:43.440 of certain situations, in rtx's was the Pratt and Whitney engines. Guess what 111 00:08:43.559 --> 00:08:46.080 ends up happening. Eventually that all gets fixed, the earnings come back, 112 00:08:46.279 --> 00:08:50.519 and the stock goes back up to where it was and makes new highs. 113 00:08:50.559 --> 00:08:54.559 I'm not saying that's gonna happen. Don't know if it's gonna happen, but 114 00:08:54.679 --> 00:09:00.080 I don't believe that we're gonna stop building bombs and weaponry. And you know, 115 00:09:00.200 --> 00:09:03.240 Raytheon is right there with it. I mean, think about the in 116 00:09:03.360 --> 00:09:07.559 Israel, the whole uh, the whole dome to protect them, it's come 117 00:09:07.600 --> 00:09:11.559 out of you and the missiles, it's coming out of Raytheon. They're going 118 00:09:11.639 --> 00:09:15.399 to continue to make money, lots of money, and it's not gonna stop. 119 00:09:16.159 --> 00:09:22.799 Protection of countries is going to be at an all time high, especially 120 00:09:22.840 --> 00:09:28.000 with the threat of of of of China going into Taiwan, Russia moving it 121 00:09:28.039 --> 00:09:35.200 with into into uh Ukraine, and obviously we see the Middle East crisis that's 122 00:09:35.240 --> 00:09:37.360 going on over there too. We'll see where that goes. All right, 123 00:09:37.440 --> 00:09:41.960 is there gonna be anything else that's happening? I don't know how can we 124 00:09:41.039 --> 00:09:45.320 defend everything if this is If you don't think this isn't making us weak, 125 00:09:46.320 --> 00:09:50.320 I think you have another another idea that I don't because I do think all 126 00:09:50.399 --> 00:09:56.720 this money that we're pouring into all these other countries helping them is important, 127 00:09:56.240 --> 00:10:01.120 except that we have to worry about ourselves too. We can not keep having 128 00:10:01.200 --> 00:10:07.000 debt and growing our debt. There's got to be a balance here, and 129 00:10:07.080 --> 00:10:11.639 I don't see Congress doing anything to balance it out. And the biggest fear 130 00:10:11.720 --> 00:10:16.480 I have is when we start getting hit in the United States with all the 131 00:10:16.519 --> 00:10:22.000 people coming across the border that all, let's put it this way, not 132 00:10:22.120 --> 00:10:26.799 the best citizens in the world. Okay. I know that we've all seen 133 00:10:26.879 --> 00:10:31.879 how many people are coming in from all those bad countries, bad actors. 134 00:10:33.440 --> 00:10:37.080 Why are twenty four thousand Chinese coming across the border? What have they got 135 00:10:37.120 --> 00:10:43.440 to come across the border? All the illegal people coming in, we're catching 136 00:10:43.480 --> 00:10:48.120 some a lot of them or not the bad actors. I know a lot 137 00:10:48.120 --> 00:10:52.759 of immigrants that come here are great people. I'm worried about the bad ones. 138 00:10:52.799 --> 00:10:58.320 I'm worried about the infiltration of the bad actors, just like nine to 139 00:10:58.360 --> 00:11:07.279 eleven. Whoever thought that we would have terrorists infiltrating our airline industry and being 140 00:11:07.320 --> 00:11:11.320 able to fly seven forty sevens. Nobody in the imagination thought that would be 141 00:11:11.360 --> 00:11:16.919 the key case. So what are we planning now? We have an electric 142 00:11:16.960 --> 00:11:22.120 grid, we have a water water supply, we have so much that can 143 00:11:22.159 --> 00:11:28.759 cripple us. But yet we're not allowed to say anything, do anything until 144 00:11:28.799 --> 00:11:33.799 something happens. And then everyone gets angry and everyone worries. Why is everyone 145 00:11:33.840 --> 00:11:37.960 angry? Except of course when it comes to Israel. Then it's okay for 146 00:11:37.240 --> 00:11:43.240 people to be angry with Israel and be pro hamas and protests. That's okay 147 00:11:43.279 --> 00:11:48.399 with this administration. Okay, well, schools, maybe not the administration. 148 00:11:48.440 --> 00:11:50.559 I know there's people there that don't agree with it, but shut it down. 149 00:11:52.559 --> 00:11:56.759 Call it what it is. It's terrorist talk. When you want to 150 00:11:56.759 --> 00:12:01.840 genocide a group of people, that's terrorist talk. When parents are fighting for 151 00:12:01.919 --> 00:12:07.240 the kids for education, they're not domestic terrorists. Sorry, they're fighting for 152 00:12:07.320 --> 00:12:11.600 their kids' education not to be what they don't want it to be, and 153 00:12:11.639 --> 00:12:15.960 they have that right. But this administration called them domestic terrorists, but will 154 00:12:15.960 --> 00:12:20.600 not call the people calling for the genocide of Jews domestic terrorists. Think about 155 00:12:20.639 --> 00:12:24.639 that. So we start going through all this, where are we going to 156 00:12:24.679 --> 00:12:28.759 be and when it's something going to happen? I don't want to live in 157 00:12:28.879 --> 00:12:33.200 fear that something's going to happen. But every time you hear from Homeland Security 158 00:12:33.200 --> 00:12:39.240 and everything they tell you they can't catch everything, they don't know everything something, 159 00:12:39.679 --> 00:12:45.679 the ability for something to happen gets greater and greater. So why are 160 00:12:45.720 --> 00:12:50.480 we waiting for that? So you have this, you have Congress, and 161 00:12:50.519 --> 00:12:54.360 the Republicans are getting beat up for this, which I think is ridiculous, 162 00:12:54.639 --> 00:13:00.720 that say we don't have a problem giving money to Ukraine as long as we 163 00:13:01.279 --> 00:13:07.639 include more border security for US, and Biden almost started going with it a 164 00:13:07.679 --> 00:13:11.759 little bit, and then it's gone away to the point, first of all, 165 00:13:11.840 --> 00:13:15.679 we should have the border secure before we're starting to give money away, 166 00:13:16.039 --> 00:13:18.799 and that's why we should be selling your creat and everybody else. We'll give 167 00:13:18.840 --> 00:13:22.679 you money, and we don't have a problem giving you money, but we 168 00:13:22.759 --> 00:13:26.519 have to come up with some money for us too to secure our borders, 169 00:13:26.759 --> 00:13:31.320 because otherwise it doesn't make sense. And they continue to look at it that 170 00:13:31.360 --> 00:13:39.279 way, because you know what, our economy will absolutely get hurt if anything 171 00:13:39.360 --> 00:13:46.000 happens from a terrorist attack inside our own borders, because nobody's gonna believe that 172 00:13:46.000 --> 00:13:50.879 there's not more to come. That will hurt the economy. That will hurt 173 00:13:50.879 --> 00:13:52.600 everything we're doing. And the next thing, you know, guess what, 174 00:13:54.399 --> 00:13:58.120 he's going to have to lower interest rates to stimulate the economy again. And 175 00:13:58.159 --> 00:14:03.200 if he's force shadow in that and knows that's happening, then I have a 176 00:14:03.240 --> 00:14:07.039 real problem. Our market should not feel that we're gonna have to lower interest 177 00:14:07.080 --> 00:14:11.759 rates because there's gonna be a problem. We should just be in a normal 178 00:14:11.840 --> 00:14:18.679 economy up and down. Okay, we have we have uh we uh recessions, 179 00:14:18.679 --> 00:14:22.720 and we have acceleration of the economy up and down. That's what always 180 00:14:22.720 --> 00:14:30.360 happens. Let it be natural. Let it be natural. And if we 181 00:14:30.399 --> 00:14:37.440 don't give away so much money, and if so many people can't keep going 182 00:14:37.480 --> 00:14:41.799 to the government and asking for money, we'll be much better off. If 183 00:14:41.799 --> 00:14:46.440 you're able bodied, you need to work. The more workers that are out 184 00:14:46.440 --> 00:14:50.840 there, the better it is for economy because more people have more money to 185 00:14:50.000 --> 00:14:56.919 spend. It's better for the corporations because then they wouldn't have to keep raising 186 00:14:56.960 --> 00:15:01.080 wages after wages after wages, because they'll have more people working. It'd be 187 00:15:01.120 --> 00:15:07.679 better for our car companies that where the unions just can't go on strike and 188 00:15:07.720 --> 00:15:11.120 then the car prices don't go up so much, which is good for us, 189 00:15:11.440 --> 00:15:16.080 the people that live here. You can't have it both ways. You 190 00:15:16.120 --> 00:15:22.039 can't keep giving more money to people higher wages. Forget the minimum wage when 191 00:15:22.039 --> 00:15:26.960 it was so far past minimum wages not even funny, and expect to have 192 00:15:28.080 --> 00:15:33.919 dollar meals for people that can't afford other food, or to have car prices 193 00:15:33.000 --> 00:15:37.360 not go up, have food prices that can't go up at the grocery store, 194 00:15:39.080 --> 00:15:41.639 have every pricing going up. It's impossible to have it both ways. 195 00:15:45.519 --> 00:15:50.200 Even with inflation down, prices are gonna stay up. It won't be inflation 196 00:15:50.320 --> 00:15:52.919 more than where we are now, but we've already gone up so much. 197 00:15:54.279 --> 00:15:58.480 That's what the administration isn't telling. You say, something that used to cost 198 00:15:58.480 --> 00:16:03.080 one thousand dollars maybe cost fifteen hundred now, okay, from a few years 199 00:16:03.080 --> 00:16:07.600 ago. With inflation coming down, that's great. It's not going to go 200 00:16:07.679 --> 00:16:11.559 up from fifteen hundred then to seventeen to two thousand. It'll stay between fourteen 201 00:16:11.600 --> 00:16:15.360 and fifteen hundred, which is still so much higher than where it was previous 202 00:16:15.480 --> 00:16:22.360 years ago. And that's where everyone's having a tough time living. Grocery prices 203 00:16:22.440 --> 00:16:26.799 aren't going to come back down to where they were five years ago. They 204 00:16:26.879 --> 00:16:30.960 might not keep going up because inflation's coming down. But we still have inflation 205 00:16:32.080 --> 00:16:36.480 in the three and a half percent range, and in some cases, depending 206 00:16:36.480 --> 00:16:40.440 on what it is, it could be even higher than that. So that 207 00:16:40.559 --> 00:16:45.759 means guess what things go higher. We've had so much inflation, Social Security 208 00:16:45.759 --> 00:16:49.840 payments, I've all gone up. Great. I like that. That's good 209 00:16:49.840 --> 00:16:57.679 for people, but they're not coming back down when inflation comes down. They'll 210 00:16:57.720 --> 00:17:03.360 go up if we have inflation, but they won't go back down, so 211 00:17:03.399 --> 00:17:07.279 they don't go back down. We still, as tax payers have to pay 212 00:17:07.319 --> 00:17:12.000 more. The biggest infliction everything is that people don't realize is how much more 213 00:17:12.039 --> 00:17:17.960 we pay on our debt when we play maybe an average of two or three 214 00:17:18.000 --> 00:17:21.839 percent before because all interest rates were down. Now we're going to be paying 215 00:17:21.880 --> 00:17:30.279 five and a half six percent, which is an incredible difference because it's the 216 00:17:30.319 --> 00:17:34.640 same money that pays for expenses, pays for all these congress people that need 217 00:17:34.680 --> 00:17:40.160 money, and all the states that want money and for protection, and every 218 00:17:40.279 --> 00:17:42.640 dollar just think about this, every dollar that we had that we give to 219 00:17:42.799 --> 00:17:48.599 Ukraine, how much more that's costing us in raising bonds to do that. 220 00:17:52.839 --> 00:18:00.960 It's amazing to me that people don't realize how much more it costs us in 221 00:18:02.359 --> 00:18:07.319 just interest. Look at your own credit cards. If you just pay the 222 00:18:07.359 --> 00:18:11.480 minimum, it'll take you twelve to twenty years to pay off your credit card 223 00:18:11.759 --> 00:18:17.119 if you're in the twenty five to twenty eight percent range. And that's not 224 00:18:17.279 --> 00:18:22.119 usual, not spending on it anymore, just paying the minimum. And so 225 00:18:22.200 --> 00:18:26.880 many people pay the minimum until they max out their cards and don't pay them 226 00:18:26.880 --> 00:18:30.079 from there. I don't want to see your economy go to that extent. 227 00:18:32.000 --> 00:18:37.640 I don't want to see the difference between the people that both ends of the 228 00:18:37.680 --> 00:18:42.759 spectrum. You know this whole Democrats believe that we need the middle class. 229 00:18:42.799 --> 00:18:48.200 I do too, but all they're doing is separating it. We'll becoming more 230 00:18:48.200 --> 00:18:53.319 of a two class system, rich and poor because the people the lower part 231 00:18:53.480 --> 00:18:59.880 of this, of the middle class, are moving into the lower class part 232 00:19:00.119 --> 00:19:03.400 of being able to afford things, and the people at the at the upper 233 00:19:03.440 --> 00:19:10.319 part are not moving higher, they're moving down. The people in the upper 234 00:19:10.319 --> 00:19:12.000 class, yeah, they're still able to make some money and they're the ones 235 00:19:12.160 --> 00:19:17.119 able to invest and do things. And then there's this jealousy factor that comes 236 00:19:17.160 --> 00:19:22.720 about. But it's gonna be funny about it that everyone's gonna tout these immigrants 237 00:19:22.720 --> 00:19:29.640 are gonna tout on how much money everyone's making because of the market making New 238 00:19:29.720 --> 00:19:32.240 High. Well, that was only the you know, that's the dow. 239 00:19:32.359 --> 00:19:34.359 The S and P hasn't the nw zachly has it. But they're close. 240 00:19:37.400 --> 00:19:42.720 They're close. And when you think about that, that's great for pension plans. 241 00:19:45.400 --> 00:19:52.000 What's that great for is also your falling K plans. That's good stuff 242 00:19:52.000 --> 00:19:56.960 for people. I want a wealthy economy. I want to see the markets 243 00:19:57.039 --> 00:20:00.640 higher. I want to see your economy strong. A strong economy is a 244 00:20:00.640 --> 00:20:07.640 strong nation. I like it when people feel good about going to work and 245 00:20:07.680 --> 00:20:12.920 earning what they get. Not given this mentality of what we just do and 246 00:20:14.000 --> 00:20:22.799 give is not the way you build a strong economy. God forbid. If 247 00:20:22.799 --> 00:20:26.880 we have to go do things, so many people in this country are so 248 00:20:26.880 --> 00:20:30.839 soft they wouldn't even know how to fight. They'd be fighting against us, 249 00:20:30.920 --> 00:20:34.480 fighting even though the people that are there going out to defend us and all 250 00:20:34.519 --> 00:20:38.240 and actually die for this country. They'll have people going against so, oh, 251 00:20:38.279 --> 00:20:41.680 we shouldn't be here. We shouldn't be doing that. They're okay being 252 00:20:41.759 --> 00:20:48.240 mediocre, but America doesn't need to be mediocre. America needs to be strong. 253 00:20:48.559 --> 00:20:52.599 Our congress people need to fight. They need to get our borders resolved 254 00:20:53.519 --> 00:20:57.400 before we move on and start going to other places. We do all this, 255 00:20:57.480 --> 00:21:03.759 guess what's gonna happen. Change the immigration system, Change the social security 256 00:21:03.759 --> 00:21:07.480 system. So in thirty forty years from now, people aren't dependent on people 257 00:21:07.519 --> 00:21:11.480 paying taxes for them to get paid. They can be putting their own money 258 00:21:11.480 --> 00:21:15.160 away. There's a concept called the four to one K plan retirement plans, 259 00:21:15.240 --> 00:21:19.240 right, they brought that up in the seventies for us to put money away. 260 00:21:19.799 --> 00:21:23.039 But why are we dependent on the government to pay us? Why are 261 00:21:23.079 --> 00:21:26.079 we dependent on people working being able to put money away? And the only 262 00:21:26.119 --> 00:21:30.440 people that the government would have to help are those those that need help that 263 00:21:30.519 --> 00:21:38.279 are disabled mentally physically, that's okay, But why are we dependent on able 264 00:21:38.279 --> 00:21:42.119 bodied people for the government to pay them so they can have a retirement. 265 00:21:45.720 --> 00:21:51.839 And the and the hypocrisy and the and the you know, the the falsehoods 266 00:21:51.839 --> 00:21:57.799 of people getting Social Security disability and some of them you came and claim, 267 00:21:59.359 --> 00:22:00.640 but you know, the mental stuff and all this stuff. It's like, 268 00:22:02.359 --> 00:22:03.799 you can still find some stuff to work. Oh, I'm stressed out. 269 00:22:03.839 --> 00:22:08.200 The one that bothers me the most is the ones that tell me they can't 270 00:22:08.240 --> 00:22:15.559 work because of anxiety or stress. We all have anxiety, we all have 271 00:22:15.599 --> 00:22:22.000 stress to some extent. And unless a doctor or somebody says you are mentally 272 00:22:22.079 --> 00:22:26.519 ill, that's a crotch, it's an excuse. It's soft go to work. 273 00:22:29.319 --> 00:22:36.359 But somehow we pay these people, and that costs our country too much 274 00:22:36.359 --> 00:22:41.480 money. And if that's the case, then let's change your immigration system and 275 00:22:41.599 --> 00:22:45.640 let's get people in here on a merit based system so we can replace the 276 00:22:45.680 --> 00:22:52.480 people that don't want to work and have the people that need to work. 277 00:22:52.519 --> 00:22:57.680 You can't grow an economy with three point seven percent unemployment when you have so 278 00:22:57.720 --> 00:23:03.799 many people not participate. Three point seven percent is because people are not participating. 279 00:23:03.279 --> 00:23:07.519 Every place they go, it's the same thing I talk to so many 280 00:23:07.559 --> 00:23:11.759 people. They can't find people that, when they do get them to work, 281 00:23:12.519 --> 00:23:18.000 that are good, good employees. The mentality of it is switched to 282 00:23:18.039 --> 00:23:22.400 where the employee thinks they are the ones that decide when they should come to 283 00:23:22.400 --> 00:23:26.160 work. The employee is the one that decides what time they should be here 284 00:23:26.200 --> 00:23:29.640 and how much work they should do, and if they're going to get it 285 00:23:29.680 --> 00:23:37.279 done on time, that's not good. But if you're a good employee, 286 00:23:37.559 --> 00:23:40.680 if you understand what it means to be on time, if you understand what 287 00:23:40.720 --> 00:23:42.279 it means to work hard, if you understand, you will move up so 288 00:23:42.440 --> 00:23:45.039 fast. If the corporate word is what you want to do, you'll move 289 00:23:45.079 --> 00:23:48.839 up. If it's independent you want to be, you'll move up and you'll 290 00:23:48.880 --> 00:23:51.960 do great. If you're an entrepreneur, you'll do great because you'll know what 291 00:23:52.039 --> 00:23:56.960 it takes. There's so many people that buy these franchises, and all them 292 00:23:56.000 --> 00:24:00.400 they think they can work forty hours a week in these franchises. They're gonna 293 00:24:00.440 --> 00:24:03.039 make money. They forget that these franchises, you're gonna have to work sixty 294 00:24:03.039 --> 00:24:08.240 seventy eighty hours a week because you are the franchise. Can't expect other people 295 00:24:08.240 --> 00:24:11.960 that don't own it to go ahead and do what you're gonna do. But 296 00:24:11.000 --> 00:24:14.359 that's what they expect, and they don't want to work it. They don't 297 00:24:14.400 --> 00:24:17.880 want to put the time and effort in. So for these markets that go 298 00:24:18.000 --> 00:24:22.200 higher, we need to have a great economy. Interest rates aren't gonna keep 299 00:24:22.240 --> 00:24:25.240 coming down unless there's a real problem, and I don't want to see that 300 00:24:25.279 --> 00:24:27.000 problem. We'll be right back. This is the Money Matter Show, and 301 00:24:27.039 --> 00:24:41.240 I do appreciate everybody listening. Welcome back, everybody. It's the Money Matter 302 00:24:41.319 --> 00:24:45.400 Show. We got Dave, Dylan, Todd, and myself Dean here to 303 00:24:45.440 --> 00:24:48.759 bring you as much information as we possibly can rocket ship. You know, 304 00:24:48.799 --> 00:24:52.880 it's the most amazing thing to me and Todd you pointed this out to me 305 00:24:52.440 --> 00:24:59.880 Friday afternoon. The S and P five hundred has exploded higher best rally and 306 00:25:00.039 --> 00:25:03.720 two years, all the way back to where it was in November of twenty 307 00:25:03.960 --> 00:25:10.039 twenty one. Yeah. So if you had started an account in November of 308 00:25:10.079 --> 00:25:14.279 twenty twenty one that was let's say, a sixty forty sixty percent S and 309 00:25:14.359 --> 00:25:18.920 P five hundred forty percent long term bonds, you're down. Yeah, you're 310 00:25:18.960 --> 00:25:22.960 down. Even after this massive rally, you're down. Well, you have 311 00:25:22.039 --> 00:25:26.279 to be, because their bonds are definitely still down from November twenty one, 312 00:25:26.400 --> 00:25:29.279 and the equal weight to S and P five hundred even worse. Oh yeah, 313 00:25:29.400 --> 00:25:32.279 that's definitely back to where it was in August of twenty one. Yeah, 314 00:25:32.759 --> 00:25:36.079 so this is really exciting, and if you look at your portfolio, 315 00:25:36.200 --> 00:25:38.000 you're going to be excited. If you look back over the last couple of 316 00:25:38.039 --> 00:25:41.839 years, you're gonna say, boy, that we've just done absolutely nothing. 317 00:25:41.319 --> 00:25:45.559 And that'll happen from time to time in the market, and this, this 318 00:25:45.880 --> 00:25:49.559 last six weeks is the reason we say you don't ever get out. Well, 319 00:25:49.559 --> 00:25:52.880 how many times do you have back to back losses in the market. 320 00:25:52.960 --> 00:25:56.599 I think we've counted it as four times. It's happened in history in seven 321 00:25:56.640 --> 00:26:00.920 to the last eighty years, I think, right years in a row. 322 00:26:00.000 --> 00:26:04.279 Last year, write down what Yeah, so you expect this year is going 323 00:26:04.319 --> 00:26:07.599 to be up or at least not going to be down. Well, like 324 00:26:07.599 --> 00:26:11.079 you're saying, too, just you don't get out, you don't fully get 325 00:26:11.079 --> 00:26:14.680 out and rebounce some things. But it's idea that like August and September just 326 00:26:14.680 --> 00:26:17.160 felt like they took forever. You got a lot of calls starting, people 327 00:26:17.160 --> 00:26:19.440 starting to get nervous and everything like that. All of a sudden, we're 328 00:26:19.519 --> 00:26:22.279 up for two months in a row, and it feels like it's it speeds 329 00:26:22.279 --> 00:26:25.200 by, you know, more calls like that, So you can hold it 330 00:26:25.200 --> 00:26:26.920 out and wait it out. That's why we always talk about building portfolio that 331 00:26:26.920 --> 00:26:30.759 you're comfortable with and you can sleep at night with, because then you can 332 00:26:30.759 --> 00:26:32.960 write out those a couple of bad months so they don't feel like just the 333 00:26:33.000 --> 00:26:34.720 end of the world to you. That's the key. I mean, we 334 00:26:34.839 --> 00:26:40.319 know that stocks over time will outperform most other assets, if not all other 335 00:26:40.400 --> 00:26:44.160 assets. The reason that you have any fixed income at all is so like, 336 00:26:44.240 --> 00:26:47.160 don'tes so you can sleep at night. I mean to give you some 337 00:26:47.240 --> 00:26:51.880 peace of mind because the market can be volatile, and it can be volatile 338 00:26:52.000 --> 00:26:53.480 down, and it can also be volatile lot. But you know, we 339 00:26:53.519 --> 00:26:59.240 came into this week with this goldielock scenario and we were thinking, boy, 340 00:26:59.240 --> 00:27:02.039 we're going to get the sea, We're gonna get the PPI, We're gonna 341 00:27:02.039 --> 00:27:06.599 get fed Chief Powell statement on interest rates. You know, if nothing else, 342 00:27:06.680 --> 00:27:10.720 goldilocks got more golden. Yeah, And it really stemmed off of what 343 00:27:10.759 --> 00:27:15.000 fed PAL was saying on this press conference. That was really the only worry 344 00:27:15.079 --> 00:27:18.839 you had from sustaining this rally was a fed PAL coming out and saying, 345 00:27:18.880 --> 00:27:22.000 you guys have gone up too fast. Inflation really hasn't been one yet. 346 00:27:22.160 --> 00:27:23.559 But it didn't really sound like that was his tone. I mean, he 347 00:27:23.640 --> 00:27:27.759 really said, there's still the signs of inflation coming down are welcome. We 348 00:27:27.839 --> 00:27:32.240 know we have more work to do, but the signs are showing. He 349 00:27:32.279 --> 00:27:34.599 doesn't normally say things like well on, and he actually said we expect three 350 00:27:34.680 --> 00:27:38.000 rate cuts next year. Yeah said it actually said that, which is half 351 00:27:38.039 --> 00:27:41.079 of what the markets were expecting. There was all those pundits on the media 352 00:27:41.079 --> 00:27:45.119 and stuff saying six rate cuts coming next year, and then the wheelchairs around 353 00:27:45.160 --> 00:27:48.319 time to off with that, and they're talking about three rate cuts. What 354 00:27:48.400 --> 00:27:51.680 we've had in the open market with the ten years, we've already had four 355 00:27:51.759 --> 00:27:53.400 rate cuts. Yeah, and that's that's the biggest thing. You know, 356 00:27:53.440 --> 00:27:57.720 it's already accounted for four rate cuts, and the market's always forward thinking about 357 00:27:57.720 --> 00:28:02.880 six months, soquates for that. And it's interesting nowadave I saw an article 358 00:28:02.880 --> 00:28:06.440 where they're talking about the fact that the short term curve, so the one, 359 00:28:06.559 --> 00:28:08.799 two, s, the five treasuries, could be moving more than what 360 00:28:08.960 --> 00:28:14.480 actually a ten would be moving because the short term is what's going to be 361 00:28:14.480 --> 00:28:18.720 fluctuating based on rate cuts, whereas some of the eventually when you talked about 362 00:28:18.720 --> 00:28:22.400 it too, with the TLT exploding. There's a limit to where long term 363 00:28:22.480 --> 00:28:25.839 rates are going to have to stay pinned, where short term rates might be 364 00:28:25.839 --> 00:28:29.920 more volatile. We want that point to be after you've closed down your house. 365 00:28:30.759 --> 00:28:34.839 Yeah, we talk in my rate. They keep plunging until such time 366 00:28:34.880 --> 00:28:38.079 as you've closed on your house, and then they can do whatever the other 367 00:28:38.160 --> 00:28:41.039 thing. You know, it struck me number one time that what you pointed 368 00:28:41.039 --> 00:28:45.920 out, the market rally simply brought us back to where we were two years 369 00:28:45.960 --> 00:28:48.200 ago. Yeah, which is crazy. Uh. The other thing that was 370 00:28:48.279 --> 00:28:52.880 so noticeable was that rotation taking place. We started to see that within the 371 00:28:52.920 --> 00:28:57.200 last couple of weeks, where the Magnificent seven were kind of just hanging out, 372 00:28:57.599 --> 00:29:03.200 and away went the Dow. Away went Procter and Gambles and Colgate and 373 00:29:03.279 --> 00:29:07.000 Uniliver and all these blue chip stocks. I was for the last week, 374 00:29:07.079 --> 00:29:12.160 just give you an example. For last week, the Magnificent seven ETF was 375 00:29:12.240 --> 00:29:18.079 up zero point eight point eight last week, the DVY, which is one 376 00:29:18.119 --> 00:29:23.160 of our favorite value indexes, was up three more than three times what the 377 00:29:23.200 --> 00:29:27.519 Magnificent seven were up. How about this The RSP, the equal weight to 378 00:29:27.720 --> 00:29:33.400 S and P five hundred up four percent up more than four times the Magnificent 379 00:29:33.480 --> 00:29:37.799 Seven. So that's what's happening right now, and I think that's probably going 380 00:29:37.839 --> 00:29:41.839 to spill into next year where the Magnificent Seven have had such an incredible run 381 00:29:42.160 --> 00:29:45.319 and if your portfolio is loaded up with them, you are just a happy 382 00:29:45.359 --> 00:29:49.039 camper. But over the last couple of weeks you're saying, my goodness, 383 00:29:49.079 --> 00:29:52.039 what's going on here. If you're a citizen in America, you may be 384 00:29:52.160 --> 00:29:55.680 like, well, that should be. This type of stuff is happening everywhere 385 00:29:55.680 --> 00:29:57.640 in the world. No, we are a very unique market because of our 386 00:29:57.680 --> 00:30:03.119 tech. A lot of other countries have as much tech, like Silicon Valley, 387 00:30:03.160 --> 00:30:06.440 makes it really different for us. So with that being said, what 388 00:30:06.559 --> 00:30:11.799 we have is value divergence. So internationally values really doing well, whereas United 389 00:30:11.839 --> 00:30:17.359 States value was lagging considerably. And so when you see that, you start 390 00:30:17.400 --> 00:30:19.240 to realize the only reason that is is because all the money is going chasing 391 00:30:19.319 --> 00:30:23.599 the Big seven, chasing those tech heavy stocks instead of you know, going 392 00:30:23.759 --> 00:30:27.799 very attractive valuable stocks. And that's that rotation. I mean, equal Weight 393 00:30:27.880 --> 00:30:32.119 to this week up three point nine percent s and P's only up two point 394 00:30:32.119 --> 00:30:36.240 five. So I mean you see that rotation forming because there is real value 395 00:30:36.279 --> 00:30:38.359 there. I also, we just went to, you know, a conference. 396 00:30:38.400 --> 00:30:41.960 We'll talk more about what we learned at the conference, but they talked 397 00:30:41.960 --> 00:30:45.039 a little bit about the Russell two thousand and why they're lagging, and when 398 00:30:45.079 --> 00:30:48.480 you start to you know, even though they are lagging, when you start 399 00:30:48.519 --> 00:30:52.480 to put into the fact that they're not as quality companies, a lot of 400 00:30:52.480 --> 00:30:55.599 them are still not profitable and a lot of them have just been propped up 401 00:30:55.599 --> 00:30:59.759 because of all the government spending that happened through the pandemic. The Russell two 402 00:30:59.759 --> 00:31:04.400 thousands might not have that same divergence rotation that we would see in valuable companies 403 00:31:04.440 --> 00:31:08.559 because the value stocks those are proven quality companies. They're also two thousand they're 404 00:31:08.599 --> 00:31:12.559 not necessarily proven yet, right, they're just small cap stocks. So there's 405 00:31:12.599 --> 00:31:18.079 a difference there, and I think that's important highlight difference to we did. 406 00:31:18.599 --> 00:31:22.440 I need to mention that we did see the Dow Jones industrial levias hit an 407 00:31:22.480 --> 00:31:26.759 all time high last week, same with the Nasdaq one hundred hit an all 408 00:31:26.799 --> 00:31:33.000 time the NASDAK one hundred as opposed to the Nasdaq composite. Again, the 409 00:31:33.039 --> 00:31:37.359 S and P five hundred is five hundred stocks. We're not following the thirty 410 00:31:37.680 --> 00:31:41.160 Dow stocks. It tends to move with the S and P five hundred, 411 00:31:41.400 --> 00:31:45.000 It tends to move with the equal weight to S and P five hundred. 412 00:31:45.119 --> 00:31:48.119 All three of them tend to move together. This year has been a real 413 00:31:48.200 --> 00:31:52.039 one off with that, but a new all time high for the Dow. 414 00:31:52.640 --> 00:31:57.200 But again, probably the best benchmark to compare yourself to when you're trying to 415 00:31:57.240 --> 00:32:01.799 see how you've done is equal weighted SMP five hundred. That takes away the 416 00:32:02.759 --> 00:32:07.960 few stocks that are moving the Dow, That takes away the magnificence seven and 417 00:32:07.119 --> 00:32:12.279 actually gets you a look at the core of what's actually going on in the 418 00:32:12.279 --> 00:32:17.319 portfolio. And it was down for the year six weeks ago. It is 419 00:32:17.359 --> 00:32:22.680 now up ten point eight percent for the year, but again back to where 420 00:32:22.720 --> 00:32:27.440 it was in September of twenty twenty one. Yeah, I mean talking about 421 00:32:27.480 --> 00:32:30.079 the S and P five hundred, the regular weighted from March twenty twenty to 422 00:32:30.160 --> 00:32:35.240 December twenty twenty one, it was up one hundred and twenty percent. Wow. 423 00:32:35.599 --> 00:32:39.440 Then from December twenty twenty one to November twenty twenty three, basically now 424 00:32:39.640 --> 00:32:42.880 before the you know, the huge run up in December, we had as 425 00:32:42.920 --> 00:32:45.599 well, down negative six percent. Right then, I will say that that 426 00:32:45.599 --> 00:32:50.200 that that first comparison up one hundred and twenty percent, was it? They 427 00:32:50.240 --> 00:32:53.240 picked the absolute prodom entry point time. Yeah, the bottom of the pandemic 428 00:32:53.279 --> 00:32:57.319 because not you know, oh it was not a one hundred percent. Well 429 00:32:57.640 --> 00:33:00.599 that's after it dropped fifty percent. Right then it rallied one hundred and twenty 430 00:33:00.599 --> 00:33:06.839 percent. So that's kind of a full disclosure deal there. We had. 431 00:33:06.880 --> 00:33:10.640 The the CPI was up one tenth of one percent, which was in line 432 00:33:10.680 --> 00:33:15.680 the one point two annual rate. Yeah, yeah, yeah, three point 433 00:33:15.720 --> 00:33:19.319 one is the year over year, which is the lowest in two years. 434 00:33:19.759 --> 00:33:25.400 PPI also cooler than expected. We talked about the PCEE last month at an 435 00:33:25.200 --> 00:33:30.200 annual rate of what was one point two percent? No, I'm sorry, 436 00:33:30.240 --> 00:33:32.720 it was up. It was two tenths of a percent, so two point 437 00:33:32.799 --> 00:33:37.200 four, which is which is pretty close to the Fed's target of two. 438 00:33:37.480 --> 00:33:42.279 Next week we get up pce again, and the retail sales right next Friday, 439 00:33:42.319 --> 00:33:45.440 retail sales were good, shockingly good. They come on Tuesday. They 440 00:33:45.440 --> 00:33:51.440 came out last week retail on Friday. Friday, Yeah, Friday was it 441 00:33:51.440 --> 00:33:53.400 Friday? They were shockingly good. They were shockingly good. Yeah, they 442 00:33:53.400 --> 00:33:57.559 expected them to be down a smidgeon and they were actually up a half a 443 00:33:57.559 --> 00:34:00.720 percent or whatever. Well, I was, I was very surprised expected it 444 00:34:00.759 --> 00:34:02.400 to be honest, mission when you have Black Friday in November. Yeah, 445 00:34:02.480 --> 00:34:06.559 you know, well it's compared to how about Black Friday November? And it's 446 00:34:06.559 --> 00:34:10.159 also just in general spending, holiday spending because honeko was the first week of 447 00:34:10.199 --> 00:34:13.400 December, so you're gonna get a Jewish, you gotta get all your gets 448 00:34:13.440 --> 00:34:15.159 there in November. Yeah, I go, that's a good point. I 449 00:34:15.199 --> 00:34:17.679 was surprised that the expectations was for it to be down. You know, 450 00:34:17.800 --> 00:34:23.000 it would have been the retail sales for November, right, so comparing to 451 00:34:23.119 --> 00:34:27.880 October. No, it's no doubta in November, I guess it would have 452 00:34:27.880 --> 00:34:30.000 Black Friday in it. Yeah, it would have Black Friday in it. 453 00:34:30.880 --> 00:34:35.119 Speaking of retail, Macy's, did you see that the shares last week, 454 00:34:35.159 --> 00:34:38.000 the shares with the same price they were in two thousand and eight? Really 455 00:34:38.079 --> 00:34:42.880 yeah, but they offered to buy them out seventeen percent jump. On Monday, 456 00:34:43.440 --> 00:34:45.840 the Wall Street General reported the two investment firms that offered to buy the 457 00:34:45.840 --> 00:34:51.440 company, and of course Nordtrims and Cole's rallied on that as well. But 458 00:34:51.840 --> 00:34:55.400 yeah, Macy's struggling, struggling, and now we got a couple of people 459 00:34:55.440 --> 00:35:00.519 may be interested in buying them. Ten year in straight our benchmark interest rate. 460 00:35:00.559 --> 00:35:02.119 Did you want to say something about that time, Well, I just 461 00:35:02.119 --> 00:35:05.400 wanted you to bring it up. Yeah, yeah, talk a little about 462 00:35:05.440 --> 00:35:07.679 that all four percent for the first time. You know, it's interesting we 463 00:35:07.679 --> 00:35:12.199 were talking about this week time. Boy, how long has it been since 464 00:35:12.239 --> 00:35:15.440 the ten years been below four percent? And we were guessing, and we're 465 00:35:15.480 --> 00:35:20.639 guessing like early this year, I think one of us guests, twenty twenty 466 00:35:20.639 --> 00:35:27.519 one, how about August August of this year, the ten years. That's 467 00:35:27.519 --> 00:35:29.599 how fast it went on. It moved up quick, and then it also 468 00:35:29.719 --> 00:35:34.039 hits lowest level since July. Talk about a mountain peak, you know, 469 00:35:34.400 --> 00:35:38.199 from four to five and back to four in a period of four months, 470 00:35:38.519 --> 00:35:42.840 Right, in a period of four months, that's incredib that's incredible. I 471 00:35:42.880 --> 00:35:45.119 would have never guessed that it had been four percent of did you wait, 472 00:35:45.159 --> 00:35:49.559 we get we're coming on a break here. I'd saved that thought we'll be 473 00:35:49.639 --> 00:35:52.119 back after this break. We thank you again for listening to us. Like 474 00:35:52.119 --> 00:35:57.400 I said last week, you're not listening. This whole thing is plentless. 475 00:35:57.519 --> 00:36:01.920 Say it's only then Welcome back to the Money Matter Show. My name is 476 00:36:01.920 --> 00:36:07.880 Todd Lick. I'm here with Dylan Greenberg Dean Greenberg and sure what so before 477 00:36:07.880 --> 00:36:10.719 you ended the last three we're talking about the ten year falling below. The 478 00:36:10.800 --> 00:36:14.559 four level now has a three handle on it. The two year is that 479 00:36:14.800 --> 00:36:17.400 four point four to five. So the inversion now is around you know, 480 00:36:19.199 --> 00:36:23.960 zero point five around there, so it widened a little bit. It's so 481 00:36:24.079 --> 00:36:28.159 crazy that we can still have an inversion for over I mean at this point 482 00:36:28.199 --> 00:36:30.920 it's two years or eighteen months, I mean pushing two years. It does 483 00:36:31.000 --> 00:36:37.320 seem like the economic blocks are all lining up the way you would like to 484 00:36:37.360 --> 00:36:39.360 see him line up. Except for that, except for the inversion, you'll 485 00:36:39.400 --> 00:36:43.840 have the inverted yield curve, which is pointing to a recession. Yeah, 486 00:36:43.920 --> 00:36:45.800 like we always say too, that's just one indication of a recession. It's 487 00:36:45.840 --> 00:36:50.039 not the only indication. So maybe this time it's not, but it is 488 00:36:50.119 --> 00:36:52.320 just something to keep in mind that it has been inverted for almost two years. 489 00:36:52.400 --> 00:36:57.400 I'd just say the inverted yield curve has predicted twelve of the last six 490 00:36:57.480 --> 00:37:02.840 recessions. Twelve the last one six recessions. Oh yeah, so it is. 491 00:37:05.000 --> 00:37:07.480 Yeah, it's a very good one. I'm just saying it is one 492 00:37:07.639 --> 00:37:10.360 indication. It is absolutely that, and you know, again, I continue 493 00:37:10.400 --> 00:37:14.880 to say this. I think Europe is going to be a really interesting test 494 00:37:14.920 --> 00:37:19.840 case for what America is going to go through because Europe's already having slowed economic 495 00:37:19.920 --> 00:37:22.760 numbers. They're going to cut probably four times in twenty four at least, 496 00:37:22.920 --> 00:37:28.000 I would say, And that's what they've already communicated. So that's really going 497 00:37:28.039 --> 00:37:30.880 to be interesting. How bad their economic numbers get. Do they really fall 498 00:37:30.920 --> 00:37:35.119 into recession? If it's only a mild recession, I think the Fed did 499 00:37:35.159 --> 00:37:37.559 their job. But if Europe falls into a deep recession for some reason, 500 00:37:37.719 --> 00:37:42.119 that could have spillover effects and then lead to us having more of us severe 501 00:37:42.119 --> 00:37:45.360 instead of a mild recession, and you would expect a recession of some form. 502 00:37:45.719 --> 00:37:49.239 Yes. Yeah, And our discussions as money managers, which is pretty 503 00:37:49.280 --> 00:37:55.920 do we are thinking that twenty twenty four is going to be value oriented and 504 00:37:57.039 --> 00:38:02.880 less growth, less tech, more value we're moving in that direction. I 505 00:38:02.920 --> 00:38:07.480 think we'll probably tweak some of our models internationally. Dave, I'm interested. 506 00:38:07.679 --> 00:38:10.519 Are your thoughts there were you? Are you thinking for twenty four there are 507 00:38:10.559 --> 00:38:14.400 pockets you want to stay away from pockets you're interested in. Well, boy, 508 00:38:14.440 --> 00:38:16.440 that's that's too wide of a question to answer. Well, I know, 509 00:38:16.800 --> 00:38:20.320 I know you don't like in the Ukraine. No, you don't like 510 00:38:20.320 --> 00:38:28.119 to stay away from Gaza. You have to go all all in the US. 511 00:38:28.280 --> 00:38:32.639 Right. We do international, We do have some international exposure from time 512 00:38:32.679 --> 00:38:37.719 to time, but we are predominantly a domestic money manager. And the primary 513 00:38:37.760 --> 00:38:44.599 reason we are is because of the transparency. United States companies, because of 514 00:38:44.679 --> 00:38:49.639 regulations, have transparency requirements that you don't see in many parts of the world, 515 00:38:50.039 --> 00:38:54.159 and you can get in and it's it's also somewhat awkward to invest in 516 00:38:54.280 --> 00:38:58.719 different parts of the world unless you use an ETF or mutual fund something like 517 00:38:58.760 --> 00:39:04.360 that. So we're dominantly domestic money managers, and I continue to focus most 518 00:39:04.360 --> 00:39:07.920 of my attention on the US. So we had Gold over the last week. 519 00:39:08.199 --> 00:39:10.519 How that perform It went up a little bit, right, Yeah, 520 00:39:10.599 --> 00:39:15.719 Gold was up thirty three dollars to twenty thirty one. Oil finished a week 521 00:39:15.800 --> 00:39:19.400 unchanged a seventy one fifty, spent a good bit of the week under seventy. 522 00:39:19.559 --> 00:39:22.360 Yeah, I think it developed a nice base though it looks like it 523 00:39:22.360 --> 00:39:25.480 seems like there's some buying interest in the sixty eight sixty nine rall. You 524 00:39:25.519 --> 00:39:29.320 have the SBI. Every time it goes under seventies, you can see the 525 00:39:29.400 --> 00:39:31.559 volumes just spiking, so you can tell something's happening at that level. Yeah, 526 00:39:31.599 --> 00:39:36.239 Exon hit a new fifty two week low. That's rare to see Exon 527 00:39:36.320 --> 00:39:39.519 at a fifty two week low. I think it's a combination of oil prices 528 00:39:39.559 --> 00:39:46.079 being down and there's there's a lot of chatter about this premium base and purchase 529 00:39:46.119 --> 00:39:51.400 they made a Pine or natural Resources I believe agolled be extended. Yeah, 530 00:39:51.880 --> 00:39:54.960 yeah, that they've agreed to acquire, you know, and we had another 531 00:39:55.000 --> 00:40:00.800 one of those acquisitions this past week. And it really is telling you Occidental 532 00:40:00.800 --> 00:40:06.320 Petroleum, which is one of Warren Buffett's largest holdings. You know, it's 533 00:40:06.320 --> 00:40:10.400 funny, Warren is a value guy, right, this is pretty much value. 534 00:40:10.599 --> 00:40:14.920 Occidental Petroleum is trading at the same price it was in two thousand and 535 00:40:14.960 --> 00:40:16.840 seven. And he Kee's buying. He keeps buying a lot of it, 536 00:40:16.920 --> 00:40:21.280 and it doesn't seem nobody seems to care that he's buying it. Usually, 537 00:40:21.559 --> 00:40:24.119 if you hear that Warren Buffett is buying shares of a company, up, 538 00:40:24.159 --> 00:40:27.800 it goes. See, this is just making me more bullish on Oxy. 539 00:40:28.599 --> 00:40:31.840 Everything you're saying, right is what you want to hear. Morgan Stanley upgraded 540 00:40:32.519 --> 00:40:38.480 the company because they're going to acquire a privately owned Crown Rock, which is 541 00:40:38.480 --> 00:40:45.239 a premium basing company. And again this follows the Exon's Pioneer Natural Resources purchase, 542 00:40:45.440 --> 00:40:47.280 and it made me think, if you're an oil company and you want 543 00:40:47.280 --> 00:40:52.679 to grow and you can't drill anywhere, buying somebody as a way to do 544 00:40:52.719 --> 00:41:00.119 it, and if Exxon is somehow prohibited from buying Pioneer Natural Resources, then 545 00:41:00.159 --> 00:41:04.280 there's a good chance Oxy's prohibited from buying Crown Rock, and there goes your 546 00:41:04.280 --> 00:41:07.800 growth. The dollar plummeted right this week. I was down. I didn't 547 00:41:08.400 --> 00:41:12.480 I didn't look at it right now, I'm pretty sure it had a really 548 00:41:12.480 --> 00:41:15.800 tough week obviously because rates are plumbting. That's kind of how that's correlated. 549 00:41:15.880 --> 00:41:19.079 Absolutely, absolutely, dollar tends to move with a sense that gold had a 550 00:41:19.079 --> 00:41:22.840 little bit of a bid this week because there really wasn't any geopolitical tensions that 551 00:41:22.880 --> 00:41:25.719 would cause it to move up. That's the thing that's so silly about gold 552 00:41:25.800 --> 00:41:30.719 being inflation hedge, right, because as interest rates move up, the dollar 553 00:41:30.800 --> 00:41:34.039 moves up, which caused gold to move down. If you have inflation, 554 00:41:34.159 --> 00:41:36.719 you're going to have interest rates moving up, which is going to have gold 555 00:41:36.800 --> 00:41:39.079 moving down. Its just it's never been a good inflation hedge. It is 556 00:41:39.280 --> 00:41:44.679 now, you know, I think bitcoin's better inflation. Now. Bitcoin was 557 00:41:44.719 --> 00:41:50.400 down three percent on the week sound It depends if you use weekends or not. 558 00:41:50.599 --> 00:41:52.199 That's true because it takes twenty four to seven. Yeah, it's it 559 00:41:52.280 --> 00:41:54.480 just depends on where you was. I was looking at the five day right 560 00:41:54.519 --> 00:41:59.199 now. You're probably right, Dave, what I'm I used the ETF simply 561 00:41:59.280 --> 00:42:01.840 because, like you said, the bitcoin trades over the weekend. So where 562 00:42:01.840 --> 00:42:05.400 where do you pick your point? Well, even the ETF, you got 563 00:42:05.440 --> 00:42:07.840 to make sure that's not at a discount or something, you know, because 564 00:42:07.840 --> 00:42:10.280 it may not be well. Ef ets don't go to discounts and premiums because 565 00:42:10.280 --> 00:42:15.559 they're ETFs closing. I mean, I have an ETF that I have my 566 00:42:15.599 --> 00:42:17.599 own account. It's at forty one when bitcoin was at forty four thousand, 567 00:42:17.639 --> 00:42:21.599 and it should be at forty four, So it lacks it, doesn't I 568 00:42:21.880 --> 00:42:24.519 have. It's a forty one dollars. No, I have seen performance of 569 00:42:24.639 --> 00:42:30.199 ETF's lag the actual bitcoin price, and it's because the cost of futures. 570 00:42:30.760 --> 00:42:35.960 They can't I understand. That's how the et because ETFs don't have actual bitcoin. 571 00:42:36.000 --> 00:42:38.000 That's the whole thing about black Rock having the spot ETF. You could 572 00:42:38.039 --> 00:42:42.760 actually track it, but you can't track it with futures perfectly. I get 573 00:42:42.760 --> 00:42:46.239 that. Roll the options and there you will never have the actual true performance 574 00:42:46.639 --> 00:42:51.719 using an ETF. Right, Because the term they use is contagion. There's 575 00:42:52.280 --> 00:42:54.800 when you have to roll futures contracts month to month, especially when there's a 576 00:42:54.800 --> 00:42:59.320 big move. Yes, it creates contagion, which is which is essentially an 577 00:42:59.360 --> 00:43:04.960 erosion. Erosion would be another word for contasion. I guess contasion is a 578 00:43:05.000 --> 00:43:08.280 cooler word than erosion. I think both cool words. Yeah, they're both 579 00:43:08.280 --> 00:43:13.679 cool, cool words, cool words. There you go, do shame any 580 00:43:13.719 --> 00:43:20.039 Christmas. Wow. Wow. One of the interesting things is the the election 581 00:43:20.199 --> 00:43:24.920 cycle, though twelve months preceding the election, the average ratio turn historically has 582 00:43:24.960 --> 00:43:29.599 been four percent. Well, let's see, we're up what twelve in the 583 00:43:29.679 --> 00:43:32.880 last sense the first week in November. Yep, so we got to give 584 00:43:32.880 --> 00:43:37.119 eight back. Is that how it's going to work to get to our four 585 00:43:37.760 --> 00:43:42.119 it's an average day. Well, this is a one off. We'll hope 586 00:43:42.119 --> 00:43:45.960 after after the next twelve months, that the average will now be five instead 587 00:43:45.960 --> 00:43:47.320 of four before we talked about it last year. The third year in the 588 00:43:47.360 --> 00:43:52.159 presidency is normally the best year for the mark yes on average, and turns 589 00:43:52.199 --> 00:43:57.360 out it is, you know yes for whatever reason, that China is considering 590 00:43:57.400 --> 00:44:01.400 one hundred and thirty seven billion dollar package to boost housing. The Moodies downgraded 591 00:44:01.400 --> 00:44:05.880 the outlook a couple of weeks ago from stable to negative. May recall that 592 00:44:07.199 --> 00:44:13.079 they have a tremendous housing bubble in China. They have entire cities that are 593 00:44:13.079 --> 00:44:16.719 empty that they built that no one came. Well, yeah, I mean 594 00:44:16.760 --> 00:44:20.519 we found out a while ago that these like part of the culture is do 595 00:44:20.519 --> 00:44:24.119 you have to have two houses in order to be like, yeah, a 596 00:44:24.119 --> 00:44:29.679 good suitor. Okay, so these guys were just buying lake houses. They 597 00:44:29.719 --> 00:44:31.320 never saw them, never went to them, just saw the picture online and 598 00:44:31.360 --> 00:44:34.480 bottom, but never went to them. But then they go to the girls 599 00:44:34.559 --> 00:44:36.760 parents and be like, hey, look I got a vacation home. This 600 00:44:36.840 --> 00:44:38.519 is what I got. Never go to don't even know if it's built. 601 00:44:38.960 --> 00:44:40.960 And that's been a It's a common thing that was going on, and that's 602 00:44:42.000 --> 00:44:44.480 part of the reason this bubble's there because it can't afford it either. It 603 00:44:44.519 --> 00:44:46.960 was interesting too. I saw a report over the week saying US and Chinese 604 00:44:46.960 --> 00:44:52.119 manufacturing. Obviously we've talked a little bit about how Chinese manufacturing has been moving 605 00:44:52.159 --> 00:44:55.639 near shore to Mexico and some has it also been moved to Vietnam and places 606 00:44:55.719 --> 00:44:59.719 like that around their area. They say, though, that because of the 607 00:44:59.760 --> 00:45:04.719 fact that China's manufacturing really rely is product, we rely on Chinese manufacturing for 608 00:45:04.800 --> 00:45:10.960 inputs, not manufacturing, and that by saying that you would have to move 609 00:45:12.000 --> 00:45:14.599 a lot of the inputs away from China, what does that mean? So, 610 00:45:14.800 --> 00:45:19.440 I mean if I'm creating a toy the inputs of the toy versus actually 611 00:45:19.480 --> 00:45:25.119 creating the toy with the inputs, okay. So yeah, like you're building 612 00:45:25.159 --> 00:45:30.840 like a Barbie doll, okay, and just his hypothetic. The plastics. 613 00:45:30.039 --> 00:45:34.440 The plastics and like the arms are made at this warehouse, the head is 614 00:45:34.480 --> 00:45:36.880 made at this warehouse. You bring it to a different warehouse to put it 615 00:45:36.920 --> 00:45:38.440 all together and sell it and ship it out. That's one. That's how 616 00:45:38.440 --> 00:45:40.960 those companies do it. So like if they're creating a chip and they need 617 00:45:42.000 --> 00:45:44.320 silicon and they need you know, motherboards, and they need all this, 618 00:45:44.679 --> 00:45:47.559 they're sourcing all those materials to one place to then put all those materials together 619 00:45:47.639 --> 00:45:52.519 to create the end product. So most of the input manufacturings in China, 620 00:45:52.840 --> 00:45:58.440 a lot of the actual manufacturing is done elsewhere. So doing that near shoring, 621 00:45:58.840 --> 00:46:00.639 they say in this report, we wouldn't make much of a difference in 622 00:46:00.719 --> 00:46:06.320 terms of having supply shocks in the future because they still control all the inputs. 623 00:46:06.519 --> 00:46:10.039 An awful lot of manufacturing moved away from China. I just hope it 624 00:46:10.079 --> 00:46:14.599 actually makes a difference, because if they do continuously just control the inputs, 625 00:46:15.559 --> 00:46:17.519 you would think, yeah, it doesn't really make a difference. That's interesting 626 00:46:17.519 --> 00:46:22.199 if that's it. The obesity drug thing continues to be all the rage. 627 00:46:22.719 --> 00:46:28.320 Swiss pharmaceutical giant Roache entered the arena with a takeover of us Karmot, who 628 00:46:28.360 --> 00:46:34.119 is in late stage development of an oral obesity treatment, but Faizer abandoned their 629 00:46:34.119 --> 00:46:37.559 attempt to develop an oral treatment. I think that's probably more appealing than that 630 00:46:37.599 --> 00:46:43.840 weekly injectable that people are doing. This is interesting. Eli Lilly sold off 631 00:46:43.920 --> 00:46:51.000 last week on a report that people who stopped taking the medication would regain fifty 632 00:46:51.039 --> 00:46:53.159 percent of the weight that they'd lost. Now, that was seen as a 633 00:46:53.199 --> 00:47:00.599 negative, but I think it probably was a positive because up until now we 634 00:47:00.599 --> 00:47:02.679 were believing that if you were on these drugs, you were on these drugs 635 00:47:02.679 --> 00:47:06.760 for life. And what they're saying is, hey, take the drug. 636 00:47:06.760 --> 00:47:09.360 If you're one hundred pounds overweight, and you lose one hundred pounds and you 637 00:47:09.400 --> 00:47:12.639 quit taking it, now you're fifty pounds overweight, that's the heck of a 638 00:47:12.639 --> 00:47:15.599 lot better than one hundred pounds overweight. So it was perceived by the market 639 00:47:15.639 --> 00:47:21.039 to be bad news, which caused Lily to sell off. And it's got 640 00:47:21.039 --> 00:47:23.800 such a high pee that it's easy to it doesn't take much when you have 641 00:47:23.840 --> 00:47:29.159 a pe as high as Lily. It's price for perfection, and you know 642 00:47:29.239 --> 00:47:32.599 perfection is hard to achieve, but they're working hard at it. And their 643 00:47:32.679 --> 00:47:38.159 new drug Major No majarro, I think it is Mojarrow got a lot of 644 00:47:38.159 --> 00:47:42.280 promise. Anyway, We'll be back with the second half of the Money Matter 645 00:47:42.320 --> 00:47:52.599 Show right after this break. Say it's only a name. Welcome back you 646 00:47:52.719 --> 00:47:55.760 listen to the second hour of the Money Matter Show. I'm Dylan Greenberg. 647 00:47:55.800 --> 00:48:00.599 I'm here with Dave Sherwood, Todd Glick, and Dean Greenberg. For those 648 00:48:00.639 --> 00:48:02.480 of you just tuning in, The Dow was up three percent for the week. 649 00:48:02.559 --> 00:48:05.599 The S and P five hundred was up two and a half percent, 650 00:48:05.920 --> 00:48:08.599 the NASDAK composite was up two point eight percent, and the Russell two thousand, 651 00:48:08.599 --> 00:48:10.639 which is a small cap, was up five and a half percent. 652 00:48:10.719 --> 00:48:14.719 That was up the most. The RSP, which is the equal weighted SMP 653 00:48:14.840 --> 00:48:17.480 five hundred, was up three point nine percent, and for the year, 654 00:48:17.840 --> 00:48:22.039 the Nazak is now at forty two percent for the year. That's crazy, 655 00:48:22.199 --> 00:48:24.360 Yep, that's high being driven by those seven stocks. It is even though 656 00:48:24.400 --> 00:48:28.159 I mean, yeah, and videos pushing five hundred again, so those are 657 00:48:28.239 --> 00:48:30.719 up for the week. Yeah, then I mean the S and P five 658 00:48:30.800 --> 00:48:34.159 hundred as a whole was up twenty three percent for the year. Dolls up 659 00:48:34.239 --> 00:48:37.840 thirteen percent for the year, Russell two thousand is now thirteen percent, and 660 00:48:37.920 --> 00:48:40.480 even the equal weighted SMP five hundred is up eleven percent for the year. 661 00:48:40.719 --> 00:48:44.800 Right, so you would expect your account to be up. You would expect 662 00:48:44.840 --> 00:48:46.639 it to be up. Obviously, if you're only in SMP five hundred, 663 00:48:46.639 --> 00:48:50.599 do you expected to be a twenty three percent? But most people with retirement 664 00:48:50.719 --> 00:48:53.840 counts are roughly a sixty forty. You're not gonna get all of that game. 665 00:48:53.920 --> 00:48:58.400 You're gonna be up about sixty percent. Well, I think if you 666 00:48:58.559 --> 00:49:01.159 if if you take the equal weighted s and P five hundred as being your 667 00:49:01.159 --> 00:49:07.159 stock exposure, and you're sixty forty, well that would be six percent would 668 00:49:07.159 --> 00:49:09.280 come from the stocks. And then you have to look at the bond component 669 00:49:09.639 --> 00:49:14.239 and the bond components. Because we've had higher interest rates, it's probably not 670 00:49:14.360 --> 00:49:19.400 too far from from unchanged on the year. Even though we've seen a race 671 00:49:19.519 --> 00:49:23.039 spike and then come back down, bonds net on the year are probably down. 672 00:49:23.239 --> 00:49:27.039 If you put the interest in there, you probably could make a case 673 00:49:27.119 --> 00:49:30.280 that their flat, So that would make you up six percent less whatever management 674 00:49:30.320 --> 00:49:34.480 for your pain. And that's where you are for the year. So with 675 00:49:34.639 --> 00:49:38.360 the Nasdaq got forty one percent, your accounts up five six seven percent. 676 00:49:38.519 --> 00:49:43.679 That's actually pretty good. That's about where you should be. And this is 677 00:49:43.719 --> 00:49:47.679 a segment we always have our friends Sebastian Borscini come in and people have been 678 00:49:47.760 --> 00:49:52.800 emailing questions to contact at Greenberg Financial dot com. You got it. We 679 00:49:52.840 --> 00:49:58.440 only got one this week, so please infiltrates our inbox with them. We'd 680 00:49:58.519 --> 00:50:01.079 love to We'd love to have more questions. We enjoy answering them. This 681 00:50:01.159 --> 00:50:05.320 one comes in from Mark good question for the end of the year. What 682 00:50:05.360 --> 00:50:08.880 happens if I don't take my rm D required minimum distribution? Wow, you 683 00:50:08.880 --> 00:50:14.719 get a penalty. What's the penalty now? It used to be fifty changed 684 00:50:14.719 --> 00:50:19.639 the twenty five changed to make it a little nicer, but still a penalty. 685 00:50:19.679 --> 00:50:22.400 And it's just really it's just because you're not taking the money, and 686 00:50:22.440 --> 00:50:23.360 I don't know why people put it off to the end of the year. 687 00:50:23.440 --> 00:50:27.440 It's something you have to take otherwise you're gonna get penalized. You have to 688 00:50:27.440 --> 00:50:30.159 take more out of your account. Can you find yourself in this position? 689 00:50:30.400 --> 00:50:34.320 You should take the distribution as soon as you can, and at the same 690 00:50:34.360 --> 00:50:37.920 time. I think that you were able to file a Form fifty three twenty 691 00:50:37.000 --> 00:50:43.480 nine with IRS if you have any if you want to get the penalty waved, 692 00:50:43.480 --> 00:50:45.039 if you had a reasonable cause, you are able to get a waived. 693 00:50:45.079 --> 00:50:49.199 But you have twelve months to take it. You should just take it. 694 00:50:49.199 --> 00:50:51.280 In that sense, I mean it's always pushed off because a lot of 695 00:50:51.320 --> 00:50:52.920 people don't need the rm D so they forget about it. That too, 696 00:50:53.039 --> 00:50:57.079 that happens too, but it's something you have to take, and it's something 697 00:50:57.079 --> 00:51:00.880 the IRS will make you take otherwise you get penalized. And those are listening 698 00:51:00.960 --> 00:51:04.920 who don't know what and rm D is. It's a required minimum distribution. 699 00:51:05.039 --> 00:51:08.280 If you have a traditional IRA account and you have money in that after seventy 700 00:51:08.320 --> 00:51:13.480 three, currently you have to take money out each year. You don't get 701 00:51:13.480 --> 00:51:15.039 a choice whether you get to or not. You have to and you have 702 00:51:15.119 --> 00:51:19.199 to pay. And it's a factor based on your age roughly four percent of 703 00:51:19.239 --> 00:51:22.239 the account total. But that also goes for your four oh one K if 704 00:51:22.239 --> 00:51:27.119 you're retired. Say you're retired and you're seventy three, but you left your 705 00:51:27.119 --> 00:51:30.960 money and your old your old company's four oh one k planning you're just leaving 706 00:51:30.000 --> 00:51:34.079 it there. You will have to take the R and D from there. 707 00:51:34.199 --> 00:51:39.480 There are weird provisions while you're still working. There's certain they are. That's 708 00:51:39.480 --> 00:51:42.599 what I'm saying. If you are retired but you left it in there, 709 00:51:42.679 --> 00:51:45.000 you're seventy three, you have to take it. Yeah, I did talk 710 00:51:45.000 --> 00:51:47.440 to your account. If you're still working and still funding your four after seventy 711 00:51:47.440 --> 00:51:51.639 three, yeah, that's a rare scenario, but you can. You don't 712 00:51:51.639 --> 00:51:53.320 have to take it. But then say you retired at age seventy four, 713 00:51:53.440 --> 00:51:55.719 you got to take it immediately. It's not like you get to wait. 714 00:51:57.039 --> 00:52:00.480 And also with that, you cannot use that requirement and distribution money as a 715 00:52:00.559 --> 00:52:05.519 rough conversion. Not allowed to do that IRS. But you can do something 716 00:52:05.559 --> 00:52:10.239 called a qualified charitable distribution that can that takes care of your R and D, 717 00:52:10.320 --> 00:52:15.239 and so people will call them qcds. There's a lot of acronyms out 718 00:52:15.280 --> 00:52:20.079 there. Add that to your alphabet soup. Qcds can be something that can 719 00:52:20.119 --> 00:52:22.800 cover your rm ds and you can send that money to an organization that you 720 00:52:22.800 --> 00:52:27.480 you care about and instead of them have instead of you having to pay a 721 00:52:27.559 --> 00:52:30.039 tax and given to Uncle Sam, they don't have to pay any of the 722 00:52:30.079 --> 00:52:32.199 taxes and they get to keep the money, but you do not get the 723 00:52:32.280 --> 00:52:37.079 deduction for the deductions. The other side of that, your deduction is not 724 00:52:37.119 --> 00:52:39.079 having to pay the taxes. That's right. You can't get you can't get 725 00:52:39.119 --> 00:52:45.719 both sides. And I think most of our clients not only don't need the 726 00:52:45.920 --> 00:52:49.599 for the R and D. By Dylan said, they don't want it, 727 00:52:49.960 --> 00:52:52.320 they'll love not to have to take the R and D. So a way 728 00:52:52.360 --> 00:52:55.199 to do that. If you've got money that you've got to have come out, 729 00:52:55.199 --> 00:52:58.679 and you've got a favorite charity that you want to donate to, you 730 00:52:58.719 --> 00:53:00.360 certainly can do that if you do you need the rm D, though you 731 00:53:00.400 --> 00:53:04.599 can also do it in the sense of a monthly distribution to you and I'll 732 00:53:04.599 --> 00:53:07.960 be taken out and given to you as income throughout the year. That's another 733 00:53:07.000 --> 00:53:08.599 way to do it. Yeah, if you know, if you don't know 734 00:53:08.599 --> 00:53:12.639 any good charities, call us up. We know a lot that could use 735 00:53:12.679 --> 00:53:15.719 them. Now, this this, this, this segment is one that I'm 736 00:53:15.760 --> 00:53:21.239 going to preface by saying it could be a little boring because it's economic. 737 00:53:21.599 --> 00:53:25.199 It's economic terms. Ev garage is never born. I get comments on that 738 00:53:25.239 --> 00:53:28.719 all the time. All right, let's go this is this is So. 739 00:53:29.119 --> 00:53:32.039 It struck me that we use a lot of terms on this show, and 740 00:53:32.159 --> 00:53:37.079 you hear a lot of terms on CNBC or the New what is that? 741 00:53:37.599 --> 00:53:42.880 And many of you may know what these terms are. Now, I just 742 00:53:42.960 --> 00:53:46.599 as a as kind of a primer. I went through I googled economic terms 743 00:53:46.639 --> 00:53:50.199 just to see if there was something I was not. I only have a 744 00:53:50.239 --> 00:53:52.719 couple of them. You're telling me you didn't use chat to do this. 745 00:53:52.840 --> 00:53:54.679 I did not use Chat BDC, but I googled and and there were one 746 00:53:54.760 --> 00:54:00.679 hundred and seven pages of economic terms, so you could spend some time. 747 00:54:00.800 --> 00:54:04.639 But a couple of things we talk about on the show quite often, what's 748 00:54:04.679 --> 00:54:07.960 a basis point? You know, we mentioned basis points and a basis point 749 00:54:08.320 --> 00:54:12.000 which is also called a bip. You say, well, you know, 750 00:54:12.079 --> 00:54:15.800 interest rates went up ten basis points, interest rates went up twenty basis points. 751 00:54:15.880 --> 00:54:20.639 When the heck is a basis point one hundred basis points is one percent. 752 00:54:21.239 --> 00:54:25.400 So a basis point is one one hundredth of one percent point zero one 753 00:54:25.559 --> 00:54:29.679 yep. So that's that's a basis point. And when you hear you hear 754 00:54:29.719 --> 00:54:34.039 people on the CNBC and on radio shows and different talk shows talking about basis 755 00:54:34.079 --> 00:54:37.159 points all the time, like everybody knows what the basis point is. So 756 00:54:37.360 --> 00:54:39.760 again, one hundred basis points is one percent. If it goes up ten 757 00:54:39.800 --> 00:54:45.199 basis points, it's one tenth to one percent. Uh. Another term you 758 00:54:45.199 --> 00:54:49.679 hear a lot about is beta. Beta is the volatility of a stock. 759 00:54:50.199 --> 00:54:52.400 A beta of one means that the stock moves with the market. If a 760 00:54:52.400 --> 00:54:57.000 stock has a beta of one, and this is good when you're looking at 761 00:54:57.239 --> 00:55:01.079 stocks you may want to purchase and you want volatility stocks, so you want 762 00:55:01.119 --> 00:55:06.639 to stock with a number with a beta number under one. Again, just 763 00:55:06.719 --> 00:55:09.400 keep in mind one is the same volatility as the market, and you can 764 00:55:09.480 --> 00:55:13.239 use that same idea with your portfolio as a whole. If you have a 765 00:55:13.280 --> 00:55:16.000 more conservative portfolio, your beta will be less than one. It won't move 766 00:55:16.039 --> 00:55:20.199 with the market like it would with the S and P five hundred if it 767 00:55:20.239 --> 00:55:23.760 was at one. Absolutely absolutely. Another word you hear bantered about a lot 768 00:55:23.840 --> 00:55:29.400 is coupon coupon. This is another word for interest rate on a bond. 769 00:55:29.679 --> 00:55:34.119 The coupon is the interest rate. If you buy a five percent US Treasury, 770 00:55:34.559 --> 00:55:37.239 you might buy it at a discount. You might buy it at a 771 00:55:37.840 --> 00:55:43.639 premium, but the coupon is always five percent. David, It's like I'm 772 00:55:43.679 --> 00:55:46.880 studying for my series sixty five. That's what I'm thinking. That's that's the 773 00:55:46.920 --> 00:55:50.639 whole chapter. There's a couple of things here that you hear a lot on 774 00:55:50.719 --> 00:55:53.400 TV, and that I think that there are people out there that don't know 775 00:55:53.400 --> 00:55:59.599 what these are. Where do they get the term coupon? Mister smarty pants, 776 00:56:00.079 --> 00:56:02.679 you just passed your sixty five? What is it? Yeah, I 777 00:56:02.760 --> 00:56:07.320 couldn't tell you. You know, Todd, where's the term coupon? Bonds 778 00:56:07.400 --> 00:56:09.280 used to actually be where you ripped off the coupils, isn't that something? 779 00:56:09.599 --> 00:56:12.639 Yeah? You and I used to see these. I mean I've been in 780 00:56:12.679 --> 00:56:15.679 the business for a while and I used people actually used to come in with 781 00:56:15.760 --> 00:56:20.920 these and they would actually have little coupons like green stamps at the bottom of 782 00:56:20.960 --> 00:56:24.280 the attached to the bond, and you would when it was interest payment dat 783 00:56:24.280 --> 00:56:27.280 it was up to you to remember. Yeah, it was like a stock 784 00:56:27.280 --> 00:56:30.800 certificate. Is like to tear off certificate toa with that little coupon and take 785 00:56:30.840 --> 00:56:34.599 it to the bank and get your money. That's why it's a coupon, 786 00:56:34.639 --> 00:56:37.719 because they actually did have a coupon, and one of the last one. 787 00:56:37.800 --> 00:56:42.000 The PE ratio. Uh, you hear that a lot. It's very common 788 00:56:42.079 --> 00:56:45.719 measure of value simply takes the price of stock and divides it by the earnings 789 00:56:45.719 --> 00:56:50.760 for share. All right, So, uh, money managers typically look at 790 00:56:51.039 --> 00:56:54.719 forward pe. In other words, we'd like to kind of guess what the 791 00:56:54.760 --> 00:56:58.280 growth rate is going to be, and then that would be times the year 792 00:56:58.360 --> 00:57:00.760 we'll talking about PE. I mean, that's really the next issue for the 793 00:57:00.800 --> 00:57:06.519 market is valuations, because now we're getting to the point where how can you 794 00:57:06.679 --> 00:57:10.440 justify certain valuations with the environment that seems to be kind of what we're going 795 00:57:10.480 --> 00:57:15.039 to be going into next year, So that you know, again we're very 796 00:57:15.360 --> 00:57:20.119 overvalued in terms of history. I would say it's aid, I would I 797 00:57:20.119 --> 00:57:24.760 would counter that with it. It is extended, but not ridiculous if you 798 00:57:24.880 --> 00:57:29.239 take away the magnificence exactly. That's the thing. We have to do that 799 00:57:29.320 --> 00:57:32.000 though, and find that core pe. What is the pe of the other 800 00:57:32.199 --> 00:57:36.599 four hundred and ninety three socks? Much different? You know, it's much 801 00:57:36.639 --> 00:57:39.079 different, yeah, than if you have those magnificence seven in there. So 802 00:57:39.320 --> 00:57:45.599 yes, we are at rich levels. We are just tough valuations. Magnificent 803 00:57:45.639 --> 00:57:47.800 seven is, you know, a third of the economy at this point in 804 00:57:49.000 --> 00:57:51.400 an S and P. Five hundred, it is. But to take them 805 00:57:51.400 --> 00:57:55.039 out is just it's a tough thing to really be able to do and justify 806 00:57:55.079 --> 00:57:59.039 it. It is. But I think if you're trying to determine whether the 807 00:57:59.079 --> 00:58:04.599 market is fairly valued or overvalued from a pe point of view, you kind 808 00:58:04.599 --> 00:58:08.119 of have to Yeah, because those stocks have such excessive valuations. Yeah, 809 00:58:08.159 --> 00:58:12.599 well, I guess what we're saying is those seven stocks will have a hard 810 00:58:12.639 --> 00:58:15.440 time in twenty four because of their current valuations, where the rest of the 811 00:58:15.440 --> 00:58:20.480 stocks, the value stocks, they are still kind of undervalued. So that's 812 00:58:20.519 --> 00:58:23.599 why it's just really attractive for them in going into twenty twenty four because they 813 00:58:23.639 --> 00:58:28.880 still have room to get the growth that they haven't gotten in twenty three. 814 00:58:28.920 --> 00:58:31.199 Because all the attention has been on the Big seven, it feels like we 815 00:58:31.599 --> 00:58:36.679 are believers, are starting to believe in our discussions, and you know, 816 00:58:36.719 --> 00:58:39.320 again we're trying to We try to do the impossible here, right, We 817 00:58:39.360 --> 00:58:42.880 try to predict the future, and every now and then we get it right. 818 00:58:43.800 --> 00:58:46.599 Hopefully, more often than not. But in trying to look at twenty 819 00:58:46.639 --> 00:58:51.800 twenty four, what we've seen over the last three or four weeks, where 820 00:58:51.920 --> 00:58:55.880 the Magnificent seven have stalled out and the rest of the market is starting to 821 00:58:55.920 --> 00:59:00.480 catch up, we think that probably is going to be a fairly decent theme 822 00:59:01.239 --> 00:59:05.800 for twenty twenty four, especially if we get into a recessionary environment, because 823 00:59:05.840 --> 00:59:09.119 those guys have very high pee ratios, they'll be very vulnerable. Well, 824 00:59:09.119 --> 00:59:12.840 it's also the idea. I mean, these socks are just hyper growth, 825 00:59:13.159 --> 00:59:15.639 and right now it feels like they'll never stop going up. But remember Tesla, 826 00:59:16.360 --> 00:59:19.880 it felt like that a few years ago, just never stopped going up. 827 00:59:19.920 --> 00:59:24.400 They even had to do a stock cut. The stock d a blank 828 00:59:24.480 --> 00:59:28.280 Yeah, jeez, I think a brain part too. They had to do 829 00:59:28.480 --> 00:59:30.320 stock splits because it was just going so high, and everybody's like, Okay, 830 00:59:30.320 --> 00:59:34.039 we'll never stop going up, up, up, it doesn't matter about 831 00:59:34.079 --> 00:59:37.559 us PE being way over valued. And then it came back down the earth 832 00:59:37.800 --> 00:59:40.000 and now it's pee and then it started mattering. And this could easily happen 833 00:59:40.039 --> 00:59:45.199 with an Nvidia type of stock. Speaking of Tesla, it's a good segue 834 00:59:45.239 --> 00:59:47.159 here. The company's recalling. You probably saw it was in all the papers, 835 00:59:47.159 --> 00:59:52.280 the companies recalling every single vehicle they've ever stole in the United States, 836 00:59:52.360 --> 00:59:55.679 right, more than two million to fix a defective system that's supposed to ensure 837 00:59:55.760 --> 01:00:00.360 drivers pay attention when you using an autopilot, if you're stupid enough to out 838 01:00:00.320 --> 01:00:02.599 a pile. And I would never do that. Their recalls are just software 839 01:00:02.639 --> 01:00:06.960 updates, so they don't actually bring the car into the shop. I want 840 01:00:07.000 --> 01:00:09.199 to give you my experience. The stock went down three percent and a camera 841 01:00:09.239 --> 01:00:14.679 right back. So on Tuesday afternoon, I got on my phone the Tesla 842 01:00:14.760 --> 01:00:19.719 app and put in that I needed service for the for the recall. Right 843 01:00:20.199 --> 01:00:22.880 on Thursday morning at eight thirty, the guy walks into my office, he 844 01:00:22.920 --> 01:00:25.840 takes my key, he goes down, he does the software update, he 845 01:00:25.880 --> 01:00:29.679 brings the key back up, and he leaves. Thirty minutes. That's pretty 846 01:00:29.679 --> 01:00:31.480 cool. Thirty minutes, Maxelin that come to you too, that service. 847 01:00:31.519 --> 01:00:36.199 They came right to my office and I didn't go anywhere. Imagine if you 848 01:00:36.239 --> 01:00:39.159 had a recall for any other car, you're going to be taking it. 849 01:00:39.320 --> 01:00:42.920 You're making an appointment, taking it down to the deal or trying to get 850 01:00:42.920 --> 01:00:49.039 a ride home Mayway. It was a nice experience and I'll seguey that right 851 01:00:49.079 --> 01:00:54.079 into the TV garage. Eighty three Get this, guys, eighty three percent 852 01:00:54.119 --> 01:01:00.199 of people buy their internal combustion vehicle rather than lease them because they I know 853 01:01:00.239 --> 01:01:05.199 what to expect. But we're seeing a very different story with electric vehicles. 854 01:01:05.480 --> 01:01:09.039 Currently about forty percent of people buying evs are leasing, which is interesting because 855 01:01:09.079 --> 01:01:13.880 with a lease you do not get the rebate. The rebate goes to the 856 01:01:13.920 --> 01:01:19.559 dealer. Various reports expect leation of evs to grow to maybe as high as 857 01:01:19.599 --> 01:01:22.480 fifty percent within the next few months. I saw a report from Ford saying 858 01:01:22.480 --> 01:01:27.199 they're running at sixty percent. So you have to ask yourself, why are 859 01:01:27.280 --> 01:01:30.360 EV buyers willing to give up that rebate. They don't know if they like 860 01:01:30.400 --> 01:01:34.880 it yet. When I was a young band on Sebastian about your age, 861 01:01:35.400 --> 01:01:39.039 someone told me, if it appreciates, buy it, if it depreciates, 862 01:01:39.440 --> 01:01:45.519 rented. I leased my Tesla because I was concerned the rapidly changing technology could 863 01:01:45.599 --> 01:01:52.519 dramatically reduce the value of the car. And apparently I'm not alone. Ford 864 01:01:52.559 --> 01:01:55.280 struggling in general. They're cutting their plant production of its F one fifty electric 865 01:01:55.719 --> 01:01:59.119 whatever it's called. Cut in half, cut in half, right. Yeah, 866 01:01:59.159 --> 01:02:00.880 and the new production, I mean it's good. Are planning on producing 867 01:02:01.000 --> 01:02:07.119 sixteen hundred trucks per week, and it's refocusing its strategy around hybrids because the 868 01:02:07.159 --> 01:02:12.199 hybrids are profitable. Hybrids are number one. They're a better seller than the 869 01:02:12.199 --> 01:02:15.920 electric vehicles because you have seventy five percent year over year. Yeah, I 870 01:02:15.920 --> 01:02:17.960 mean it's kind of a its kind of a half step, right if you 871 01:02:19.039 --> 01:02:22.400 want to do something different than internal combustion, but you're not all in on 872 01:02:22.440 --> 01:02:28.159 the electric hybrids are nice, you know, baby Stap. More than anything, 873 01:02:28.199 --> 01:02:30.000 it's it's affordable. And not only is it affordable, it gives you 874 01:02:30.079 --> 01:02:35.199 getter gas mileage, which no one likes paying for gas prices when they skyrock, 875 01:02:35.280 --> 01:02:39.280 and hybrids make it very efficient on gas mileage. I've never quite understood 876 01:02:39.320 --> 01:02:45.079 the electric pickup thing. I don't think number one, that the pickup crowd 877 01:02:45.239 --> 01:02:50.039 is necessarily esg you will if you will, or definitely a woke they're not. 878 01:02:51.119 --> 01:02:54.280 I don't know that the the pickup crowds looking for electric vehicles. That's 879 01:02:54.360 --> 01:02:58.400 number one, and number two, if I've got to if I've got to 880 01:02:58.440 --> 01:03:00.199 pick up. I'm going to be doing work with hard, work with it 881 01:03:00.280 --> 01:03:04.679 right. I want something I know how it's going to perform. I want 882 01:03:04.719 --> 01:03:07.159 something that will give me mileage. You give me power, I don't. 883 01:03:07.400 --> 01:03:10.280 I've just never understood the whole electric pick up. Well, the number one 884 01:03:10.280 --> 01:03:15.400 selling hybrid in the US is a four F one fifty's number two everything it 885 01:03:15.480 --> 01:03:22.039 is the Maverick. So both are pickup trucks. Hybrid hybrid cybertruck though, 886 01:03:22.239 --> 01:03:24.000 same thing as ESG. It'll be interesting to see what happens. I don't 887 01:03:24.039 --> 01:03:29.079 think they care about ESG. I saw video of the cyber truck racing a 888 01:03:29.199 --> 01:03:34.840 Porsche, and the cyber truck had a Porsche. It was pulling a porch 889 01:03:35.159 --> 01:03:37.280 at the same Porsche was racing and it beat it. It was racing a 890 01:03:37.360 --> 01:03:40.719 Porsche, well, pulling a portche and oneone ye same, yeah that. 891 01:03:42.119 --> 01:03:45.280 You know, you just can't get away from the speed of the electric cars. 892 01:03:45.280 --> 01:03:49.960 It's all these it's all these traditional car companies that are trying to keep 893 01:03:50.079 --> 01:03:52.440 up with the growth of the new industry, of the ev of the autonomous 894 01:03:52.519 --> 01:03:57.480 driving, but they're starting to run in some issues. GM owns a subsidiary. 895 01:03:57.840 --> 01:04:00.760 It was the main owner of it called Cruise, and they're the ones 896 01:04:00.800 --> 01:04:05.320 that had that issue over in San Francisco back in October where it's autonomous car 897 01:04:05.400 --> 01:04:10.079 drag somebody twenty feet because it obviously doesn't know what it's a robot. That 898 01:04:10.119 --> 01:04:13.159 costs nine people their job, nine people their job. The co founders quit 899 01:04:13.239 --> 01:04:16.599 and now GM is saying there are now Cruises laying off twenty four percent of 900 01:04:16.639 --> 01:04:19.920 its workforce. As a Friday, GM says it still sees light at the 901 01:04:20.000 --> 01:04:24.840 end of the tunnel, but they're slowing down on all this growth initiative where 902 01:04:24.840 --> 01:04:29.000 they put in eighty billion dollars in new businesses by the twenty thirty because they're 903 01:04:29.039 --> 01:04:31.480 just kind of falling on their face and we're finding that everywhere. And these 904 01:04:31.599 --> 01:04:35.119 autonomous driving cars, which I think are crazy. We saw one up in 905 01:04:35.159 --> 01:04:39.679 Phoenix last week when we were up there. Yeah. Uh, they do 906 01:04:39.760 --> 01:04:42.920 have those issues because they aren't They're not a person. They can't just stop. 907 01:04:43.000 --> 01:04:45.760 If you see somebody right now, this is the ones in Phoenix are 908 01:04:45.840 --> 01:04:48.639 waymoo, that's what you saw. I'm just saying, I just saw it. 909 01:04:48.880 --> 01:04:51.760 Yeah, Wemo hasn't any issues and I have seen it. I think 910 01:04:53.719 --> 01:04:56.480 I don't know that I have seen the cruise up there. Would you get 911 01:04:56.480 --> 01:05:00.159 in one? I don't have seen the cruises up there? Created one? 912 01:05:00.000 --> 01:05:04.320 I would get in Aeimo. Yeah, I'm not afraid of technology. I'm 913 01:05:04.320 --> 01:05:10.199 not afraid of technology. I'm afraid of dying. That is contract day if 914 01:05:10.199 --> 01:05:14.800 you're afraid of technology, because the cars controlled by technology. So when you 915 01:05:14.800 --> 01:05:17.840 produce lithium ion batteries, will wrap up your EV section with this because I 916 01:05:17.960 --> 01:05:21.280 found this report and it's an MIT study, which we all know what MIT 917 01:05:21.480 --> 01:05:26.280 is on the spectrum, but when they did this report, they found that 918 01:05:26.320 --> 01:05:30.519 for every ton of mind lithium, it produces fifteen tons of CO two emitted 919 01:05:30.559 --> 01:05:36.800 in the air. That causes a EV production vehicle to produce eighty percent more 920 01:05:36.960 --> 01:05:42.760 CO two than what is comparable to a regular combustion car. So when you 921 01:05:42.800 --> 01:05:45.639 get that car to market, it's eighty percent more CO two emissions than a 922 01:05:45.679 --> 01:05:49.760 regular combustion car. Now we know once the car is alive, the EV 923 01:05:49.920 --> 01:05:55.159 is gonna not do as much CO two than the combustionable car because it's sixty 924 01:05:55.199 --> 01:05:58.199 six percent of it is only on fossil fuels compared to one hundred percent. 925 01:05:58.800 --> 01:06:02.360 Now that's the big thing, because it's your energy grid that supplies the EV 926 01:06:02.480 --> 01:06:05.679 over the life of the EV's vehicle. That will depend on whether it helps 927 01:06:05.719 --> 01:06:10.519 the world's emissions problems. And that's why when you say, for the fact 928 01:06:10.519 --> 01:06:14.440 that even this report, this professor from MIT, he said, if we 929 01:06:14.480 --> 01:06:18.079 don't change how we make materials, how we make chemicals, how we manufacture, 930 01:06:18.519 --> 01:06:23.800 everything will essentially stay the same. And I think that's a very true 931 01:06:23.800 --> 01:06:25.920 thing to say. No, I get that. I mean, in a 932 01:06:25.960 --> 01:06:29.119 perfect world, you'd be Norway, right. Would we find out about Norway 933 01:06:29.239 --> 01:06:33.880 last week? Norway is predominantly used by hydro power their energy grid eight which 934 01:06:33.880 --> 01:06:39.079 percent of the sales are EV. Yes, But I'm not looking at it 935 01:06:39.119 --> 01:06:41.760 from why people are buying EV's, Dave. I'm looking at it will it 936 01:06:41.800 --> 01:06:44.599 help the world? Or what you're saying from I think you pointed out that 937 01:06:44.679 --> 01:06:47.280 Norway. Yeah, eighty percent of the power is generated by from hydro power. 938 01:06:47.320 --> 01:06:50.920 So if you've got eighty percent hydro power and everybody driving electory vehicles, 939 01:06:50.920 --> 01:06:54.199 their emissions are going to be great. You've got to be really good. 940 01:06:54.400 --> 01:06:59.039 And but again, we could get all of China on the EV's tomorrow and 941 01:06:59.079 --> 01:07:02.599 it would be a net deficit in terms of our CO two penalty because China's 942 01:07:02.639 --> 01:07:06.599 predominant energy sources what coal, coal? Yeah, so you use coal, 943 01:07:08.199 --> 01:07:12.280 use coal to power EV, you're actually making it worse because coal takes two 944 01:07:12.320 --> 01:07:15.239 times the amount of energy to heat it up and produce into energy than it 945 01:07:15.239 --> 01:07:18.360 does fossil fuels. So you're literally creating a bigger problem by if you got 946 01:07:18.400 --> 01:07:23.199 all of China onto EV tomorrow. That's why it's so crucial for things like 947 01:07:23.239 --> 01:07:28.400 to Toyota's solid state battery to come on the line for EV's production and manufacturing 948 01:07:28.559 --> 01:07:31.599 become more efficient in terms of creating the CO two. The vast majority of 949 01:07:31.639 --> 01:07:36.719 lithium is mine from places like the Midic, the Congo, and they have 950 01:07:36.840 --> 01:07:41.159 huge human rights issues. I mean, there's so much problems with the actual 951 01:07:41.199 --> 01:07:44.199 inputs of our these ee right, some of the biggest lithium minds. Of 952 01:07:44.199 --> 01:07:46.320 course, one of the biggest lethium veins in the in the world on the 953 01:07:46.320 --> 01:07:48.760 planet is in Nevada, Nevada, and that's going to be a fun that 954 01:07:48.880 --> 01:07:51.960 up and run and that would be really nice. But you're right, and 955 01:07:53.000 --> 01:07:57.039 the EV do not come without problems. But it's It's funny though, because 956 01:07:57.320 --> 01:08:00.199 if you do it in coal heavy West Virginia, the EV actually created more 957 01:08:00.199 --> 01:08:05.000 carbon emissions than the hybrid did. But if you if you ran that hybrid 958 01:08:05.760 --> 01:08:10.800 in the Washington state, which is hydro power heavy, they found that the 959 01:08:10.840 --> 01:08:15.960 EV would admit sixty one percent less carbon than the hybrid. So it's so 960 01:08:15.159 --> 01:08:18.600 crucial on the energy grid on whether it actually is a net benefit or cost 961 01:08:18.640 --> 01:08:21.199 to the world. I agree. It seems like we spend a lot of 962 01:08:21.319 --> 01:08:26.520 time talking about electric vehicles, and if you're a I don't give a darn 963 01:08:26.560 --> 01:08:29.279 about electric vehicles out there, I'm sorry, but it is. There's a 964 01:08:29.319 --> 01:08:32.359 lot of electric vehicle news. There's a lot of things going on in that 965 01:08:32.439 --> 01:08:35.560 space. So we try to bring you what we're hearing, what we know. 966 01:08:35.640 --> 01:08:40.199 As far from an investment point of view. C Ford got back above 967 01:08:40.239 --> 01:08:44.439 twelve dollars last week. That's a good move, and that is because they 968 01:08:44.439 --> 01:08:48.039 cut back on this their electric footprint YEP and went to the hybrid because they've 969 01:08:48.079 --> 01:08:51.039 been struggling with it. So we talked about twenty twenty four possibly in the 970 01:08:51.079 --> 01:08:55.760 Year of value. Do you know who the father of value investing is or 971 01:08:55.760 --> 01:09:01.960 who they say Bernard Baruch No Benjamin so Benjamin Graham is the author of The 972 01:09:02.000 --> 01:09:05.760 Intelligent Investor Holly's, a highly solid after value investing book, as well as 973 01:09:05.800 --> 01:09:10.439 Security Analysis, the original security analysis book that you wrote with David Dodd. 974 01:09:11.560 --> 01:09:14.359 He had this really good quote that I ran across this last week, and 975 01:09:14.439 --> 01:09:16.479 it's going to segue into why financial planning is so important. He says, 976 01:09:16.840 --> 01:09:20.920 the best way to measure your investing success is not by whether you are beating 977 01:09:20.960 --> 01:09:25.880 the market, but by whether you've put in place a financial plan and a 978 01:09:25.920 --> 01:09:30.479 behavioral discipline that are likely to get you where you want to go in the 979 01:09:30.600 --> 01:09:33.640 end. What matters isn't crossing the finish line before anybody else, but just 980 01:09:33.680 --> 01:09:38.840 making sure that you do cross it. And I think it's so important when 981 01:09:38.880 --> 01:09:43.159 people look at the s and p. Five hundred and saying am I keeping 982 01:09:43.239 --> 01:09:46.680 up with everyone else? That's not what is important. The important is do 983 01:09:46.760 --> 01:09:51.239 you have a financial plan and do you have the behavioral discipline, the emotional 984 01:09:51.239 --> 01:09:56.760 discipline to stick with that plan that will cause you across the finish line. 985 01:09:56.800 --> 01:10:00.079 I was having a discussion with a young friend of mine last weekend in that 986 01:10:00.720 --> 01:10:04.399 we were talking about He was talking about the amount of time it took him 987 01:10:04.439 --> 01:10:09.600 to climb to Moulmak Hill, and I said, at my age, I'm 988 01:10:09.640 --> 01:10:13.439 not concerned about the amount of time. I'm concerned about getting to the top 989 01:10:13.479 --> 01:10:17.680 of the hill. Sounds like it's pretty similar. Again, I'm beyond the 990 01:10:17.720 --> 01:10:21.760 point in my life when I work for time. I simply want to finish 991 01:10:23.319 --> 01:10:28.319 the task unharmed, unhurt. Walking for your life, yeah, by walking 992 01:10:28.319 --> 01:10:30.039 from my life. But you know, it is funny as you get older. 993 01:10:30.399 --> 01:10:33.159 I had a eighty five year old guy that was in the office last 994 01:10:33.199 --> 01:10:36.279 week and he said, yeah, he said, and he's pretty healthy guy. 995 01:10:36.960 --> 01:10:40.319 He said, yeah, I'm I'm doing fine. He said. I 996 01:10:40.319 --> 01:10:42.920 did fall in the shower last week for the first time. And he said, 997 01:10:43.159 --> 01:10:47.560 I find myself using handrails when I go upstairs. Absolutely. You know, 998 01:10:47.680 --> 01:10:50.800 we'd like to thank everyone who came up to our Federal Employee seminar this 999 01:10:50.920 --> 01:10:55.279 last weekend. Last week on Wednesday was a great seminar. A lot of 1000 01:10:55.279 --> 01:10:59.159 people got a lot of questions answered and a lot of great information. So 1001 01:10:59.600 --> 01:11:02.039 we'll probably be having one of those seminars again going into next year, probably 1002 01:11:02.079 --> 01:11:04.720 around Aprilarrey. Yeah, that's what we're thinking. Yeah, that's all. 1003 01:11:04.720 --> 01:11:09.079 The feedback we received during that day was just how beneficial it was and how 1004 01:11:09.239 --> 01:11:12.800 educated it was, all the stuff that goes into the federal benefit. Yeah, 1005 01:11:13.279 --> 01:11:15.319 we had a lot of people that were a couple of years out from 1006 01:11:15.359 --> 01:11:17.399 retirement. If it's not an event that's you know, I need to be 1007 01:11:17.479 --> 01:11:21.159 retiring in the next year or two, it's yeah, you could be five, 1008 01:11:21.159 --> 01:11:24.520 ten years out. It's just something to start thinking about it. That's 1009 01:11:24.520 --> 01:11:27.399 why we do it right. Yeah, the financial plan I think is so 1010 01:11:27.439 --> 01:11:30.119 important for anyone listening that hasn't. I mean, when markets run up like 1011 01:11:30.159 --> 01:11:34.119 this, that's when you need to look at your plan because it's likely that 1012 01:11:34.199 --> 01:11:36.640 they could come down. After you see a huge run up. If it 1013 01:11:36.680 --> 01:11:41.840 can come down, revisit risk tolerances, revisit the plan, make sure everything 1014 01:11:41.920 --> 01:11:44.760 is looking like how you want it to be. If you haven't made as 1015 01:11:44.840 --> 01:11:46.600 much money in this last two months, do you need to be more risky, 1016 01:11:46.640 --> 01:11:48.960 Well, we'll talk about it, but that doesn't necessarily mean you should 1017 01:11:48.960 --> 01:11:51.640 be. Right. A lot of things should be talked about when you see 1018 01:11:51.640 --> 01:11:57.920 big moves, and there's a real desire to be really aggressive when you see 1019 01:11:57.920 --> 01:12:00.640 this, right, and there's a real desire to go to cash when it's 1020 01:12:00.680 --> 01:12:03.520 going the other way. Neither one of those things are the right thing to 1021 01:12:03.560 --> 01:12:08.159 do. And if you come see es, we can help you decide what's 1022 01:12:08.199 --> 01:12:11.560 the right thing to do for you. Coming to the end of this segment, 1023 01:12:11.760 --> 01:12:14.800 we'll be back with two more segments. Thank you again for joining us. 1024 01:12:15.119 --> 01:12:29.560 Say it's only a name, Welcome back to the Money Matters Show. 1025 01:12:29.560 --> 01:12:31.359 My name is Sebastian Bors. Set him here with Dave Sherwood, Todd Glick 1026 01:12:31.520 --> 01:12:35.960 and still in Greenberg. I want in the house, but that was in 1027 01:12:36.039 --> 01:12:39.920 the house. I wanted to bring up the fact that we're talking about rates 1028 01:12:39.960 --> 01:12:42.840 dropping, and that's a really crucial thing because a lot of people have taken 1029 01:12:42.880 --> 01:12:45.239 advantage of money market funds, which are all good in all when rates are 1030 01:12:45.239 --> 01:12:47.520 staying where they are, but when they're dropping, it's not where you want 1031 01:12:47.520 --> 01:12:51.399 to be. Here's why those money market rates will drop very quickly as well. 1032 01:12:51.800 --> 01:12:55.760 What you want to do is try to look at extending your long duration. 1033 01:12:55.920 --> 01:12:59.159 What that means is looking out looking at five year products, ten year 1034 01:12:59.159 --> 01:13:01.760 products like a treasure or a corporate bond. An annuity is something that can 1035 01:13:01.880 --> 01:13:06.319 give you guaranteed interest for a fixed time. That's where that coupon payment that 1036 01:13:06.359 --> 01:13:10.880 you just kind of talked about, Right, myga rates we talked about on 1037 01:13:10.920 --> 01:13:14.119 the show a lot. The highest I saw them was at six point four 1038 01:13:14.159 --> 01:13:17.960 percent. They have dropped now to five point four percent. That is something 1039 01:13:17.960 --> 01:13:24.159 that will continuously drop if rates continuously drop. Five point four percent locked in 1040 01:13:24.199 --> 01:13:27.000 for five years is still a really good rate. I just bring that up 1041 01:13:27.039 --> 01:13:30.000 because people who still haven't moved money out of their checkings, that haven't talked 1042 01:13:30.560 --> 01:13:34.119 took an advantage of this interest. For people who think that they're taking advantage 1043 01:13:34.119 --> 01:13:36.319 of the interest, but it's really just in money market funds. It's not 1044 01:13:36.359 --> 01:13:40.640 a locked in rate, and that could change any day. Those type of 1045 01:13:40.680 --> 01:13:44.359 people need to really be considering looking at longer duration and getting that locked in 1046 01:13:44.359 --> 01:13:47.960 interest because it will not be here forever. Right. We've been saying for 1047 01:13:48.039 --> 01:13:51.840 the last three weeks, you've got to the rates were at a sixteen year 1048 01:13:51.960 --> 01:13:57.119 high. You've got to lock some of that in. And I think I 1049 01:13:57.439 --> 01:14:00.239 mentioned that. Clients said said, oh, yeah, I'll go, I 1050 01:14:00.399 --> 01:14:01.560 can go longer term. I got it. One year. I went to 1051 01:14:01.600 --> 01:14:04.319 one year. No no no, no, no, no, I mean, 1052 01:14:04.399 --> 01:14:09.720 if you're at the you go back to the early eighties. I remember 1053 01:14:10.479 --> 01:14:14.479 interest rates peaked at that point at seventeen and a half percent, and you 1054 01:14:14.600 --> 01:14:17.640 could are seventeen I think it was, you could get seventeen percent for a 1055 01:14:17.680 --> 01:14:21.439 minimum of two and a half years up to ten years. You could have 1056 01:14:21.520 --> 01:14:28.319 locked in a ten year CD federally insured for seventeen percent. And what did 1057 01:14:28.359 --> 01:14:30.960 everybody take two and a half years because they knew in two and a half 1058 01:14:31.039 --> 01:14:34.960 years races were going to be even higher. Little common sense would help here, 1059 01:14:35.319 --> 01:14:39.239 and we got raced back to a sixteen And if you're one of these 1060 01:14:39.279 --> 01:14:41.960 to say, well, well what if we go back to sixteen seventeen percent? 1061 01:14:42.119 --> 01:14:45.920 Monetary policy was totally different then than it is now. It was a 1062 01:14:45.960 --> 01:14:48.199 totally different world. That's just you didn't have as much debt in the world. 1063 01:14:48.359 --> 01:14:50.600 But no, they'll and the debt could have sustain it. Yeah, 1064 01:14:50.640 --> 01:14:56.199 and Todd, they'll shut the economy down before they let interest rates get that 1065 01:14:56.279 --> 01:15:00.359 high. And it's just not going to happen again because of the way that 1066 01:15:00.560 --> 01:15:04.359 you already saw what happened. Inflation got to nine percent, interest rates started 1067 01:15:04.399 --> 01:15:09.920 to move higher, you get interest rates up around five percent. Now inflation's 1068 01:15:09.960 --> 01:15:12.800 back down to three. Well, Also, the Fed didn't have half their 1069 01:15:12.800 --> 01:15:16.039 tools back then now where they would today. They can set floors and ceilings 1070 01:15:16.079 --> 01:15:18.960 on rates the way they can never do back in the day. So it's 1071 01:15:19.199 --> 01:15:24.119 so to turn about that. But when we start to talk about longer term 1072 01:15:24.239 --> 01:15:27.159 maturities, and no one knows where interest rates are going to be in a 1073 01:15:27.239 --> 01:15:30.319 year, year and a half, two years, but there is a likelihood 1074 01:15:30.319 --> 01:15:33.399 that sometime in the next one to two years we're going to have an economic 1075 01:15:33.479 --> 01:15:39.000 slowdown, and when we have an economic slowdown, interest rates are going to 1076 01:15:39.079 --> 01:15:45.000 decline, and you're not going to see the rates that are available even today 1077 01:15:44.680 --> 01:15:50.600 at that period. So take a portion of your fixed income portfolio, which 1078 01:15:50.640 --> 01:15:56.039 we've done, and lock in something longer term. It's easy to do, 1079 01:15:56.159 --> 01:16:00.000 Todd. You've got the twenty five year and ETF that mimics the twenty five 1080 01:16:00.079 --> 01:16:03.680 your treasury. Yeah, that's the eDV Ernie dog Victor. There you go, 1081 01:16:03.720 --> 01:16:08.159 it's a vanguard. And then the twenty years is the twenty years of 1082 01:16:08.199 --> 01:16:12.520 TLT. Thanks telling the twenty years of TLT. So there are easy ways 1083 01:16:12.600 --> 01:16:18.239 to get exposure to longer term treasury bonds, and it probably is something that 1084 01:16:18.279 --> 01:16:24.239 would make some sense here. We were so convinced in March up twenty one 1085 01:16:24.279 --> 01:16:27.560 that interest rates were going to rise that we went out of every long term 1086 01:16:27.560 --> 01:16:30.880 bond. But I think now with interest rates probably having peaked, and I 1087 01:16:30.880 --> 01:16:35.640 think Powell intoed last week that they were they have peaked and that they're going 1088 01:16:35.720 --> 01:16:40.359 to be dropping, you can start to look at preferred stocks. Again, 1089 01:16:40.439 --> 01:16:45.920 we were completely away from preferred stocks. There are some exchange traded funds that 1090 01:16:45.359 --> 01:16:49.720 have baskets of preferreds. If that's the way you play. PFF Paul Frank 1091 01:16:49.760 --> 01:16:55.640 Frank is a preferred stock. There's a VRP, which is a floating rate 1092 01:16:55.680 --> 01:17:00.119 preferred. These are things that will benefit by lower interest rates, and I 1093 01:17:00.159 --> 01:17:06.000 think that's where we're going. We also have a fairly significant portion of our 1094 01:17:06.039 --> 01:17:11.319 assets in short term treasuries one, two, three years. When those come 1095 01:17:11.359 --> 01:17:16.279 do, we'll probably renew them to longer term and or it'd be something in 1096 01:17:16.319 --> 01:17:19.159 the internet. We're still talking about it. I shouldn't say what we're going 1097 01:17:19.199 --> 01:17:24.520 to do. As money managers, we talk all the time, and we 1098 01:17:24.600 --> 01:17:29.720 haven't. We started in March of twenty one with short term ETFs and closed 1099 01:17:29.760 --> 01:17:34.119 in funds, and then in early twenty two we decided to go to individual 1100 01:17:34.199 --> 01:17:41.560 bonds, most of them two three four years. So the biggest bunch of 1101 01:17:41.720 --> 01:17:45.840 those really haven't started mature yet, so we'll have to decide what we're going 1102 01:17:45.880 --> 01:17:48.479 to do with those assets once that happens. Yeah, I mean, then 1103 01:17:48.560 --> 01:17:54.079 that was just taking full advantage of the treasuries, paying four for a year 1104 01:17:54.319 --> 01:17:57.319 to got a lot of five percent treasures. I have no risk in the 1105 01:17:57.359 --> 01:18:00.680 bond fund going down something like that. So it did. It helped a 1106 01:18:00.720 --> 01:18:04.920 lot of accounts, and we've got tens of millions of short term Had we 1107 01:18:04.960 --> 01:18:11.079 not done anything, we probably would have lost twenty percent of the fixed income 1108 01:18:11.159 --> 01:18:15.399 portion. And I'm being conservative, probably would have lost twenty percent of our 1109 01:18:15.399 --> 01:18:20.840 fixed income portion of our business. If the average fixed income is let's say 1110 01:18:20.840 --> 01:18:26.000 thirty percent, right, we'd lost a minimum of six percent of our entire 1111 01:18:26.039 --> 01:18:30.159 business. Nobody, Well, that's what the sit and weaight investment approach does 1112 01:18:30.439 --> 01:18:33.199 did last year. You just sit and wait. You just wait out the 1113 01:18:33.199 --> 01:18:36.479 bond funds to come back, because obviously a bond fund you lose the principle 1114 01:18:36.479 --> 01:18:39.920 if you sell it, if you sit there and wait for the bond fund 1115 01:18:39.960 --> 01:18:42.800 to come back, because it's trick. Start lowering, bond funds, start 1116 01:18:42.800 --> 01:18:45.359 gaining, you can go back to even. But that's we just weren't that 1117 01:18:45.439 --> 01:18:47.560 passive and investing. We didn't want to sit and wait because we did think 1118 01:18:47.600 --> 01:18:50.600 that this was going to happen. And that's just comes from your your experience 1119 01:18:50.680 --> 01:18:54.840 of being in the business for thirty forty years of thinking that. I mean, 1120 01:18:54.880 --> 01:18:58.119 we were a little premature. We've are admitted that, yep. But 1121 01:18:58.159 --> 01:19:00.920 it turned out to be a good move. And that's what we try and 1122 01:19:00.920 --> 01:19:04.199 do is just active management. Where can we best serve our clients as their 1123 01:19:04.279 --> 01:19:10.439 better avenues with the upcoming climate of the economy. I think the beautiful part 1124 01:19:10.439 --> 01:19:15.880 about you guys doing their financial plan and then all the sitting down and deciding 1125 01:19:15.920 --> 01:19:21.560 on allocations is you really help people determine a comfortable level for them. And 1126 01:19:21.640 --> 01:19:26.880 each one is different, each one is distinctly, uniquely different, and that's 1127 01:19:26.920 --> 01:19:30.840 the main thing is their comfortability level of investing. Some people are eighty, 1128 01:19:30.119 --> 01:19:33.560 which is very risky. Some people are thirty, which is very conservative. 1129 01:19:33.880 --> 01:19:38.399 But it's all about their risk level and that's how we build their portfolios because 1130 01:19:38.399 --> 01:19:41.920 we're not a cookie cutter builder inunder portfolios. We want to be able to 1131 01:19:41.960 --> 01:19:45.640 build it towards your comfortability level. Yeah, what we hear constantly is people 1132 01:19:45.079 --> 01:19:48.560 really care about our tactical approach. You know, so many people they do 1133 01:19:48.760 --> 01:19:51.880 just kind of put it together a model and just let us sit. We 1134 01:19:51.960 --> 01:19:56.399 take a more tactical approach to things, and so I think people really appreciate 1135 01:19:56.760 --> 01:20:00.760 the flexibility we have as an independent firm and not being part of the big 1136 01:20:00.760 --> 01:20:03.600 wirehouse, so we're not subject to those big corporate policies that we have to 1137 01:20:03.640 --> 01:20:08.960 follow. The the you know a lot of those big companies, the advisors 1138 01:20:09.000 --> 01:20:12.319 don't have a choice about how they can invest certain ways. They have to 1139 01:20:12.359 --> 01:20:16.800 follow a certain you know, paradigm per se. So our flexibility I think 1140 01:20:16.800 --> 01:20:20.640 a lot of clients really see a value in that as well as obviously just 1141 01:20:20.680 --> 01:20:25.760 the customer services on parallel. Absolutely, I feel like there's more attention paid 1142 01:20:25.800 --> 01:20:29.359 to their money when they're doing that because we're customizing the portfolio more for them. 1143 01:20:29.600 --> 01:20:31.319 And the only way we do that is by going through the financial plan, 1144 01:20:31.560 --> 01:20:33.640 figuring out what your goals are, what your long term goals are, 1145 01:20:33.680 --> 01:20:36.840 short term goals are what are your expected expenses? Are you expecting to move 1146 01:20:36.920 --> 01:20:42.359 during retirement? Anything like that takes into account what you're doing with your money 1147 01:20:42.359 --> 01:20:45.279 as a retirement, and that's what we do. Yes, I can't say 1148 01:20:45.760 --> 01:20:47.920 tried to hit it on a good point. I cannot say our customer service 1149 01:20:48.000 --> 01:20:53.960 is better than anybody else in town. What I will say is, if 1150 01:20:54.000 --> 01:20:56.840 it were as good as anybody else in town, we take pride in it. 1151 01:20:57.279 --> 01:21:00.760 We really take pride in our customer service. Often said, if you 1152 01:21:00.800 --> 01:21:03.680 email me and I don't email you back, I've died. The phone rings 1153 01:21:03.680 --> 01:21:06.199 three times, it kind of irks us all in the office. Yeah. 1154 01:21:06.279 --> 01:21:10.359 Yeah, the phone is not supposed to ring three times and off with caller 1155 01:21:10.399 --> 01:21:14.760 idea. Generally the broker that you typically have been dealing with, the money 1156 01:21:14.760 --> 01:21:18.640 manager who typically talk to, will pick it up and that saves the step. 1157 01:21:18.760 --> 01:21:25.000 There's a kind of an old adjugen investing where you should have as much 1158 01:21:25.239 --> 01:21:29.920 fixed income as your age, so as you get older, right as you 1159 01:21:29.960 --> 01:21:32.279 get to fifty, while you should be fifty percent fixed income, sixty at 1160 01:21:32.319 --> 01:21:39.920 sixty blah blah blah. Each one of our clients has a portfolio that is 1161 01:21:40.119 --> 01:21:45.520 individually designed for them. We've sat down, we've had the conversation. They've 1162 01:21:45.520 --> 01:21:48.880 got either gone through the financial planning software with Dean and Dylan, or they've 1163 01:21:48.920 --> 01:21:54.880 gone through a meeting with me and our questionnaires. And I've been asked questions 1164 01:21:54.960 --> 01:21:57.560 like do you have a motorcycle? You know how fast you're drive and you 1165 01:21:57.560 --> 01:22:00.279 go to Phoenix. I mean things that really tell me what your true risk 1166 01:22:00.600 --> 01:22:05.960 profile is, and then the portfolio is built around you. I have people 1167 01:22:06.119 --> 01:22:12.199 in their thirties who would prefer to be one hundred percent in bonds. I 1168 01:22:12.319 --> 01:22:16.239 have people in One guy in particular, ninety seven years old, just thinks 1169 01:22:16.239 --> 01:22:21.119 that we just are not aggressive enough, and he's pushing me constantly to be 1170 01:22:21.239 --> 01:22:25.920 more aggressive with his account. And of course, as a fiduciary, you 1171 01:22:26.039 --> 01:22:30.039 really can't. You take a ninety seven year old person and go go one 1172 01:22:30.119 --> 01:22:32.600 hundred percent pedal to the medal. But he pushes me all the time. 1173 01:22:32.720 --> 01:22:35.159 Ninety seven years old, he goes, I think I'll have some more end 1174 01:22:35.199 --> 01:22:39.960 video, you know, Okay, okay. And a story I'd like to 1175 01:22:40.000 --> 01:22:44.399 share that happened over this week was with a client. It came in and 1176 01:22:44.399 --> 01:22:47.039 we were gonna I was gonna we're gonna do an annuity product. And then 1177 01:22:47.079 --> 01:22:53.560 I explained to him about why the annuity you're really paying for the word guarantee. 1178 01:22:53.720 --> 01:22:56.600 This annuity perfect. I mean, it was given you nine percent, 1179 01:22:56.640 --> 01:22:59.800 which are alrighty, something we could never match as a money manager. But 1180 01:22:59.880 --> 01:23:02.199 it's because the cap on that annuity one percent. You can never make more 1181 01:23:02.239 --> 01:23:04.840 than one percent. And you didn't give a year Dave the writer fee for 1182 01:23:04.920 --> 01:23:09.720 income one point one five percent, so you're guaranteed to lose money and then 1183 01:23:10.359 --> 01:23:14.039 you can't make money. I get to ye, but you're gonna get nine 1184 01:23:14.039 --> 01:23:15.600 percent an income and the money's gonna be zero when you're done, and it's 1185 01:23:15.640 --> 01:23:18.680 going to be zero in ten years for sure. And I said, if 1186 01:23:18.680 --> 01:23:23.000 that's what you want, we can do it. But no, you are 1187 01:23:23.039 --> 01:23:26.840 paying You are going to lose this money. It's not a it's going to 1188 01:23:26.880 --> 01:23:30.119 happen at for ten years. You will if you continue to live, fine, 1189 01:23:30.159 --> 01:23:31.880 you get the money, but is that truly what you want? And 1190 01:23:31.960 --> 01:23:33.760 you started thinking about it, he's like, I don't even think I'll live 1191 01:23:33.760 --> 01:23:39.560 twenty years. He goes through it and he realizes, all I'm paying so 1192 01:23:39.720 --> 01:23:43.920 much for that word guarantee. I would rather have the flexibility and liquidity. 1193 01:23:43.960 --> 01:23:47.039 And I think that's so crucial because so many annuity salesmen they would never make 1194 01:23:47.079 --> 01:23:50.680 the product sound bad. They'd always make it sound good. And I always 1195 01:23:50.720 --> 01:23:53.920 try to make the products sound bad. And if you love it when it 1196 01:23:53.920 --> 01:23:57.199 looks bad, you're gonna love it when it looks great. But if you 1197 01:23:57.359 --> 01:23:59.479 hate it when it looks bad and only love it when it looks great, 1198 01:24:00.039 --> 01:24:01.960 then you have a problem. Right. I want you to know the worst 1199 01:24:01.960 --> 01:24:04.800 case scenario and if you like that, we can go with it. If 1200 01:24:04.800 --> 01:24:08.279 you want the word guarantee and you're okay paying for it, let's fine. 1201 01:24:08.640 --> 01:24:12.079 But just know what those annuities. If you have a word guarantee in there, 1202 01:24:12.479 --> 01:24:15.920 you are paying for it good and it's not cheap. Very good, 1203 01:24:15.000 --> 01:24:17.279 very good point. And we're often asked you, I have enough money to 1204 01:24:17.319 --> 01:24:21.119 live comfortably the rest of my life, and the course of the obvious answer 1205 01:24:21.199 --> 01:24:23.720 is how do you want to live? You know? Do you want to 1206 01:24:23.760 --> 01:24:26.520 live in in a tanta out in the desert? Yeah, absolutely, no 1207 01:24:26.600 --> 01:24:29.479 problem. You want to live in a million dollar house? Maybe not? 1208 01:24:30.159 --> 01:24:33.840 You know, but I've for years and years I've had this. I've told 1209 01:24:33.840 --> 01:24:36.680 clients, and I'm just not getting a lot of cooperation on this. But 1210 01:24:36.680 --> 01:24:40.279 I always tell them, if you'll give us your day to death, we 1211 01:24:40.319 --> 01:24:43.680 can do a heck of a lot better job. We'll be back right after 1212 01:24:43.720 --> 01:24:54.079 this break. Say it's only a man. Welcome back to the Money Matter 1213 01:24:54.119 --> 01:24:56.920 Show. My name is tug Lick. I'm here with Sebastian Boorscini, Dylan 1214 01:24:56.920 --> 01:25:01.079 Greenberg and John Sabilia are state planning that we always love to refer our clients 1215 01:25:01.079 --> 01:25:05.520 too, because you have a great way of explaining complex things into a simple 1216 01:25:05.560 --> 01:25:10.359 matter, which in a state planning is, you know, something people really 1217 01:25:10.439 --> 01:25:13.399 need because first of all, people don't like loss. Second of all, 1218 01:25:13.399 --> 01:25:15.239 they don't like reading. So I mean you do that job for them. 1219 01:25:15.359 --> 01:25:18.960 Yeah, I tried to at least I do my best. So a little 1220 01:25:18.960 --> 01:25:23.840 bit last week we talked about how if you came into a large lump sum 1221 01:25:23.840 --> 01:25:26.880 of inheritance, whether it be a lottery, whether it be a you know, 1222 01:25:26.960 --> 01:25:29.960 a very wealthy family member passing and passing you long money, what do 1223 01:25:30.039 --> 01:25:32.039 you do with that money? And we kind of talked about what we would, 1224 01:25:32.119 --> 01:25:35.760 you know, spend on not always probably the fiduciary thing They did Dylan 1225 01:25:36.319 --> 01:25:41.319 to Vegas, with a little portion of it. Put the majority of it 1226 01:25:41.399 --> 01:25:45.039 in something smart and then and then enjoy a life a little bit not over 1227 01:25:45.079 --> 01:25:48.560 here. Wanted to take two percent and make it four percent of the winning 1228 01:25:48.600 --> 01:25:53.600 of the ten million, he said two two fifty on the I'm black see 1229 01:25:53.680 --> 01:25:56.079 so that yeah, yeah, but that it's a little portion of it. 1230 01:25:56.119 --> 01:25:58.760 You have fun, you got a joy of life, but not with the 1231 01:25:58.800 --> 01:26:01.319 majority of it. And then this week we're going to talk about, you 1232 01:26:01.359 --> 01:26:08.800 know, debts and the important thing to consider with debts. Oh yeah, 1233 01:26:08.880 --> 01:26:11.760 So you know, if you came into money, it doesn't have to necessarily 1234 01:26:11.800 --> 01:26:15.600 be in winning the lottery. It's inheritance. And you know, I think 1235 01:26:15.640 --> 01:26:16.680 to myself, okay, so if I came into some money, what do 1236 01:26:16.720 --> 01:26:19.399 I want to do? And I hate my mortgage? Man, do I 1237 01:26:19.439 --> 01:26:24.079 hate it? You know, especially now it's close to eight percent now it's 1238 01:26:24.119 --> 01:26:29.000 about seven. But irregardless, it's a lot of money going out and it's 1239 01:26:29.039 --> 01:26:30.960 money that I don't want to spend. So if you know, is it 1240 01:26:31.000 --> 01:26:34.640 a good idea to take that money and just pay down that mortgage and have 1241 01:26:34.680 --> 01:26:40.319 all that you know, money that monthly payments that I don't have to make 1242 01:26:40.439 --> 01:26:44.119 in my pocket every month. Yeah, right, But you guys kind of 1243 01:26:44.159 --> 01:26:47.239 like look at good debt and bad debt. Right. So I do own 1244 01:26:47.279 --> 01:26:50.199 another house and I have that at two percent, right, and I could 1245 01:26:50.279 --> 01:26:54.359 sell that house and try to pay off some of this mortgage. But I'm 1246 01:26:54.359 --> 01:26:58.720 getting a ten percent return on that house. So what is good debt? 1247 01:26:58.920 --> 01:27:01.159 You know? Debt is taking money, you know, taking money out, 1248 01:27:01.319 --> 01:27:05.880 investing it and using that money to get a higher rate of return than the 1249 01:27:05.960 --> 01:27:10.159 interest you are paying. And believe it or not, that's you know, 1250 01:27:10.359 --> 01:27:13.359 involved in a state planning, people always put their plans in front of me. 1251 01:27:14.199 --> 01:27:15.640 Here's what we have. I'm coming in inherentance. I want to pay 1252 01:27:15.640 --> 01:27:18.199 it down this mortgage. You know, is that a good idea? Or 1253 01:27:18.239 --> 01:27:21.159 maybe it's a good idea to you know, buy some more real estate, 1254 01:27:21.680 --> 01:27:27.439 have an increase. If that increase is faster and higher than your interest rate, 1255 01:27:27.760 --> 01:27:30.680 then why not? Right? Or they take that inheritance. Let's say 1256 01:27:30.680 --> 01:27:34.840 they have a mortgage of four percent five percent, all right, and they 1257 01:27:34.840 --> 01:27:38.800 come in inherance. Should they pay off that mortgage or should they give it 1258 01:27:38.800 --> 01:27:45.439 to you guys? Five to six range is like the fence like, if 1259 01:27:45.439 --> 01:27:47.880 it's below five, I would personally never pay it off unless it's just a 1260 01:27:47.880 --> 01:27:51.319 behavioral thing. It's an idea that you wanted to one day have your house 1261 01:27:51.359 --> 01:27:56.439 paid off. Some people like really love that idea of being debt free definite, 1262 01:27:56.720 --> 01:27:59.760 psychological and right, and so they just need it. Whether it's the 1263 01:28:00.159 --> 01:28:02.479 best economic decision is regardless, right, they just look at it from a 1264 01:28:02.479 --> 01:28:08.720 behavioral standpoint. If it's above six, I definitely think paying off it makes 1265 01:28:08.760 --> 01:28:13.399 sense. Even though it is a good debt. How certain are you that 1266 01:28:13.439 --> 01:28:16.079 you're gonna make more than six percent in the market. So that's where you 1267 01:28:16.079 --> 01:28:18.199 need to be smart about it, and that's where they come to you guys 1268 01:28:18.279 --> 01:28:20.560 and the chat. But even still, I mean S and P. Right, 1269 01:28:20.600 --> 01:28:24.199 it's average ten percent over a forty year periods, So you would think, 1270 01:28:24.239 --> 01:28:25.720 you know, put it on in the S and P you're gonna be 1271 01:28:25.760 --> 01:28:30.680 fine, But there is never guarantee. It is a lot of emotional things 1272 01:28:30.680 --> 01:28:33.000 that will happen in that thirty year period of that return. Right, that's 1273 01:28:33.039 --> 01:28:36.560 the average return. Can you withstand it? You'll live longer if you paid 1274 01:28:36.600 --> 01:28:41.960 on that debt, for sure, because there is that psychologic dress. There's 1275 01:28:42.000 --> 01:28:45.159 a lot of stress. I paid on mortgage yesterday, Yeah, and seeing 1276 01:28:45.159 --> 01:28:48.119 that money come out of my account bit hard. It's such a hybrid question, 1277 01:28:48.239 --> 01:28:50.680 you know, it's a dynamic question. Well, you got to think 1278 01:28:50.680 --> 01:28:54.079 about like the number way, like John was just talking about. If you 1279 01:28:54.079 --> 01:28:56.760 think about it that way, then it might make sense to do it. 1280 01:28:56.800 --> 01:28:59.359 But also it's the emotional side. But that's like us talking about Sochi. 1281 01:28:59.560 --> 01:29:00.720 I was just gonna say solid security to the same idea. You can look 1282 01:29:00.720 --> 01:29:04.239 at it the economic side. We're waiting until seventy is the most brutent way. 1283 01:29:04.439 --> 01:29:06.640 But also you're like, Okay, I paid it into it my entire 1284 01:29:06.680 --> 01:29:10.760 life, I'm taking it sixty two. Screw the government type of thing. 1285 01:29:10.880 --> 01:29:14.359 So it's all different ideas. But it's just if you look at the numbers 1286 01:29:14.399 --> 01:29:17.600 alone. What we know in this world is people don't just look at the 1287 01:29:17.680 --> 01:29:23.359 numbers. People are behavioral. And that's why this whole behavioral economics branch of 1288 01:29:23.439 --> 01:29:26.600 economics is starting and it's so big in this market today. It's because, 1289 01:29:27.600 --> 01:29:31.880 yeah, the markets are ninety nine percent efficient, but there's still a large 1290 01:29:31.880 --> 01:29:36.399 majority of people that make behavioral decisions that are not rational. They're irrational decisions 1291 01:29:36.399 --> 01:29:41.520 for whatever reason though, you know that's why I it's so hard for us 1292 01:29:41.520 --> 01:29:44.800 where it really comes down to the plan. You know, do you have 1293 01:29:44.880 --> 01:29:47.640 other assets that can make up for that? I mean, there's just I 1294 01:29:47.680 --> 01:29:50.239 try to come up with answer, but yeah, there's too money. That's 1295 01:29:50.279 --> 01:29:53.560 what that's what's all about. And are you willing to take that risk? 1296 01:29:53.640 --> 01:29:58.520 And yeah, I'm not by any stretch advocating ever to do that, But 1297 01:29:58.760 --> 01:30:00.199 it's not even it's like, do you you want to make the behavioral risk 1298 01:30:00.319 --> 01:30:04.079 or the economic risks? Right? Exactly which side hurts you more psychologically? 1299 01:30:05.000 --> 01:30:08.720 If you're wrong, I want to start a little early. You don't want 1300 01:30:08.800 --> 01:30:11.479 to you know, maybe it'll be a couple of years that you do this 1301 01:30:11.520 --> 01:30:14.079 type of investment. Maybe it's going to be a long run type of thing. 1302 01:30:15.319 --> 01:30:16.239 But you know, I had a well, when I was doing taxes, 1303 01:30:16.239 --> 01:30:20.279 I had a guy. He would see a house go in the foreclosure 1304 01:30:20.680 --> 01:30:25.479 and he would be one of a few people that would have the ability to 1305 01:30:25.479 --> 01:30:28.319 buy this house. And he had a friend that would loan call hard money 1306 01:30:28.319 --> 01:30:31.239 guy that would loan him the money and within a day of it going into 1307 01:30:31.279 --> 01:30:39.119 foreclosure or whatever. This mechanism was he would get the hard money guarantee buy 1308 01:30:39.159 --> 01:30:42.560 the house, and he never even took the money from the hard money guy 1309 01:30:42.640 --> 01:30:45.479 because he would turn around to sell that house within thirty days. And so, 1310 01:30:45.640 --> 01:30:49.079 but he was able to use that debt as some sort of collateral and 1311 01:30:49.119 --> 01:30:53.239 he's able to make money on that, and we was doing his tax really 1312 01:30:53.239 --> 01:30:59.199 interesting money money way of generating money. Yeah, but you know, that's 1313 01:30:59.239 --> 01:31:01.159 just a way of using your debt. And like I said, you know 1314 01:31:01.760 --> 01:31:05.680 my spreadsheet that I give the clients and they give it back, first thing 1315 01:31:05.680 --> 01:31:09.359 I look at it is their debt, right, I look at their equity 1316 01:31:09.399 --> 01:31:14.520 in their house, and I look at their risk tolerance, and I'll say, 1317 01:31:14.600 --> 01:31:16.079 okay, you know you're coming in this money or you have this type 1318 01:31:16.119 --> 01:31:19.079 of equity, you know, maybe you should talk to some financial planners. 1319 01:31:19.479 --> 01:31:24.000 I think what's important is you can wait debts. So like say you have 1320 01:31:24.039 --> 01:31:27.960 a ten thousand dollars credit card that's at you know, ten percent, but 1321 01:31:28.079 --> 01:31:30.640 one hundred thousand dollars credit card at five percent. You may say, well 1322 01:31:30.640 --> 01:31:32.640 the five percent is better, I'm gonna do the ten thousand first. But 1323 01:31:32.680 --> 01:31:38.640 if you wait it, you'll find what's really you know, five percent times 1324 01:31:38.680 --> 01:31:42.000 one hundred, you'll see what your interest cost would be compared to the tenenty 1325 01:31:42.279 --> 01:31:45.119 ten. So you can actually start to find a best strategy for paying off 1326 01:31:45.279 --> 01:31:48.439 debt, and you can snowball into the next debts and really start paying them 1327 01:31:48.479 --> 01:31:51.600 off instead of just saying I'm gonna go to the highest coupon, you know, 1328 01:31:51.640 --> 01:31:55.079 highest rate and start paying that one off. Like that's not always the 1329 01:31:55.119 --> 01:32:00.600 best way to go, right, there are more efficient avenues. Talk switch 1330 01:32:00.640 --> 01:32:02.279 gears a little bit about businesses, right, So, I think so many 1331 01:32:02.319 --> 01:32:06.560 businesses, especially here in Arizona because it hasn't been mandated yet, is they 1332 01:32:06.600 --> 01:32:11.119 don't offer retirement benefits. And a lot of times I feel like business owners 1333 01:32:11.159 --> 01:32:15.159 think it's like a benefit for the employee and not really for themselves. But 1334 01:32:15.279 --> 01:32:17.840 I push back on that because there's a lot of benefits for a business owner 1335 01:32:18.119 --> 01:32:21.560 in terms of you know, especially if they're sole proper you know, they're 1336 01:32:21.560 --> 01:32:26.479 not an escorp yet. Not only there are certain tax savings just from that 1337 01:32:26.560 --> 01:32:31.039 classification, but also the tax savings of giving off the employee match and using 1338 01:32:31.039 --> 01:32:36.640 that as a deduction on your businesses, giving yourself an opportunity right to having 1339 01:32:36.640 --> 01:32:41.239 a retirement and have that ability to grow and things like that, and there's 1340 01:32:41.239 --> 01:32:43.840 a lot of good will you build with your employees. They're gonna want to 1341 01:32:43.880 --> 01:32:45.239 stay. Yeah, And that's not talked about. It's hard to tell a 1342 01:32:45.239 --> 01:32:48.199 business owner like you're going to keep your employee based around if you get offer 1343 01:32:48.199 --> 01:32:49.880 an A four one, kay, And all the business owners are like, 1344 01:32:50.119 --> 01:32:53.239 yeah, yeah, I'm sure you know, but it really is you know, 1345 01:32:53.399 --> 01:32:55.239 Yeah, there's a lot. I mean, we talk to people all 1346 01:32:55.239 --> 01:32:56.920 the time. They're like, yeah, my company, guys, is really 1347 01:32:56.920 --> 01:33:00.520 good match six percent or whatever it is. And they just they're happy about 1348 01:33:00.560 --> 01:33:01.960 it. They want to stay at the company because they're paying such a good 1349 01:33:01.960 --> 01:33:06.079 match, right, yeah, And it's uh, and there's a lot. 1350 01:33:06.520 --> 01:33:11.039 It's a tax deferred asset for everybody, right, it's a tax deferred asset 1351 01:33:11.039 --> 01:33:13.880 for the employee. And the more money they put in, the more money 1352 01:33:13.920 --> 01:33:16.720 they can push down the road because eventually, you know, when you're putting 1353 01:33:16.720 --> 01:33:20.199 that money in a way, you're probably making the most money you'll ever make 1354 01:33:20.239 --> 01:33:24.199 in your life because then later on in life, when you're in a lower 1355 01:33:24.239 --> 01:33:26.560 tax bracket, then you can start pulling that money out. Yeah, you 1356 01:33:26.600 --> 01:33:28.880 know, And what's it like, I always, you know, always an 1357 01:33:28.920 --> 01:33:32.000 example, what is fifteen percent or ten percent of a million bucks, that's 1358 01:33:32.039 --> 01:33:34.439 one hundred thousand dollars in tax eavy. Well, now, a lot of 1359 01:33:34.439 --> 01:33:38.640 phone k's have Wroth options where you just say, you know what, I'll 1360 01:33:38.680 --> 01:33:42.119 just pay taxes now, you know, And for certain individuals below fifty, 1361 01:33:42.159 --> 01:33:44.560 I think that's kind of the way to go, you know, yeah, 1362 01:33:44.640 --> 01:33:46.199 you you know, but usually for people with fifty that haven't hit their high 1363 01:33:46.239 --> 01:33:48.800 certain income years yet, right because they're still inflation, they're still going to 1364 01:33:48.960 --> 01:33:51.920 keep getting raises. So, you know, below fifty, I really like 1365 01:33:53.000 --> 01:33:56.359 the Wroth option because you get that tax free growth over a ten to fifteen 1366 01:33:56.399 --> 01:34:00.159 year period. I mean, that's that's really something that you can't match with 1367 01:34:00.239 --> 01:34:02.319 that TAXI you said, I like below fit. It's just a number, 1368 01:34:02.479 --> 01:34:06.319 you know, not necessarily, I think every person's different. But after fifty 1369 01:34:06.399 --> 01:34:10.880 years old, it just it's not as much of a benefit because you don't 1370 01:34:10.880 --> 01:34:15.800 get that tax free long term growth compared to so but I just think so 1371 01:34:15.880 --> 01:34:19.000 many employers aren't taking advantage of that. If you were to roll over, 1372 01:34:19.439 --> 01:34:23.479 if you have a four to one k, you know, and for everybody, 1373 01:34:23.520 --> 01:34:26.279 that for everybody that needs to know. If you have a four toh 1374 01:34:26.319 --> 01:34:30.159 one K. Let's say you're getting ready to retire around fifty nine or sixty 1375 01:34:30.199 --> 01:34:33.439 and you want to roll it into a wroth. How much can you roll 1376 01:34:33.479 --> 01:34:38.680 at one time? Well, back to a roth conversion. There's no limits, 1377 01:34:38.760 --> 01:34:42.000 no limits. No, yeah, you I mean you just paying taxes. 1378 01:34:42.199 --> 01:34:44.960 Do you pay penalties on it? No penalties, You're just paying tax 1379 01:34:45.039 --> 01:34:47.279 into the next tax level. Yeah, it's earned income. It's earned income. 1380 01:34:47.279 --> 01:34:50.439 In the year you convert it, it just keeps raising your tax right, 1381 01:34:50.560 --> 01:34:53.560 and so you work with CPAs to try and get you not to the 1382 01:34:53.600 --> 01:34:56.439 next And here's the other important thing to consider. Say I'm sixty three, 1383 01:34:56.520 --> 01:34:58.079 right, and I'm like, oh, I want to do a big Wroth 1384 01:34:58.119 --> 01:35:00.239 conversion, and then boom, sixty five comes around to turn on Medicare. 1385 01:35:00.600 --> 01:35:03.239 Well they do it two year look back yep. So they're gonna look at 1386 01:35:03.279 --> 01:35:08.079 two years ago what my income was, and then that whole Roth conversion is 1387 01:35:08.079 --> 01:35:10.319 going to show up as earned income. So I'm going to be in the 1388 01:35:10.359 --> 01:35:13.720 highest Medicare bracket paying four to fifteen set of one seventy. So one you 1389 01:35:13.760 --> 01:35:18.319 recommend doing aversion, you know that's dynamic. I'm not going to put an 1390 01:35:18.359 --> 01:35:20.439 age out there. You got to come in and see the financial plan. 1391 01:35:20.960 --> 01:35:24.239 But it's also not just the age, it's the amount. I mean, 1392 01:35:24.239 --> 01:35:26.560 if you could do a rock conversion every year but not put it into the 1393 01:35:26.560 --> 01:35:30.359 next tax bracket, your care premiums won't matten. That's too dynamic. We 1394 01:35:30.399 --> 01:35:32.560 look at and we have a tool on our financial planning software that shows us 1395 01:35:32.600 --> 01:35:36.319 each of the brackets and shows how much they increase each year with inflation and 1396 01:35:36.359 --> 01:35:40.399 so how we can kind of tailor it and create a strategy for it. 1397 01:35:40.800 --> 01:35:45.479 So that's the crucial thing with the financial planning and actually being able to see. 1398 01:35:45.520 --> 01:35:48.239 We also do that with qualified charitable distributions and see instead of doing roth 1399 01:35:48.239 --> 01:35:50.399 conversion, let's say we're just you know, sending it to an organization. 1400 01:35:50.479 --> 01:35:55.239 How much does that save us in lifetime tax savings and things like that. 1401 01:35:55.359 --> 01:35:58.119 So there's a lot of cool things with the financial plan and there's a lot 1402 01:35:58.159 --> 01:36:00.000 of cool things with the estate planning thing that you do. I mean, 1403 01:36:00.039 --> 01:36:03.800 you literally give a free consultation to these people. If they have any questions 1404 01:36:03.800 --> 01:36:08.239 on a will trust, anything on a state planning needs, please give us 1405 01:36:08.279 --> 01:36:11.039 a call. Five two zero five four four four nine zero nine. We'll 1406 01:36:11.079 --> 01:36:15.640 get you in touch with John and again complimentary meeting. There's no obligation to 1407 01:36:15.680 --> 01:36:17.760 do anything that he is here to truly educate and that's really what we're all 1408 01:36:17.800 --> 01:36:20.199 here to do. If you ever want a free financial plan, please give 1409 01:36:20.279 --> 01:36:24.840 us a call as well, and here at green Brook Financial. You know 1410 01:36:24.960 --> 01:36:29.479 we all try to be happy, we all strive to be healthy, but 1411 01:36:29.560 --> 01:36:33.079 at the end of the day, would really try to be is profitable see 1412 01:36:33.119 --> 01:36:38.600 you next week. Say it's only able