Episode Transcript
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Speaker 1 (00:00):
Good morning, and welcome to the Capital District's Money and
Investment Program. You're listening to the Fagan Financial Report on
Dennis Fagan. Sitting here with my son Aaron, as we
do every Sunday. Actually it's Friday morning right now. We've
got most of the week behind us, we got most
of the news behind us. We're recording this. As I
said just mentioned Friday morning. We got a lot to
talk about. You have the inauguration, you have stargame, you
(00:20):
have certain comments from President Trump. Not before the Worldwide
Economic Forum, but he was in Washington. The Worldwide and
Economic Form was in Davo, Switzerland. Talk a little bit
about that Netflix earnings, GE earnings, you know, and a
couple things I want to start with though before we
get to that, and they are usually we do a
broader type of a look at the market in the
(00:41):
second half and planning in the second half, but I'm
going to flip that a little bit and look at
that in the first half. We're definitely going to get
to g in Netflix, because I think that's kind of
an indication of where we are in the economy. But
there's a couple of things that I wanted to really
kind of get into initially air and one of the
things that I did not even show you you right, well, yeah, exactly,
(01:03):
you know, and I spoke with one of our clients
and you know, you know him, well now he's seventy four,
seventy three whatever, and you know I just talked about
you know, I think the further the higher the market goes,
the more and more input we get from clients.
Speaker 2 (01:23):
Right yeah, the more trades you see. You know, we
can see all of our clients trade. So the more
you see them trading, you know, their risk appetite increases.
And it's kind of irrelevant at what age people are.
Speaker 1 (01:36):
Why does the risk appetite increase after the market's going
up sixty percent over the past two years. I mean,
don't we know.
Speaker 2 (01:43):
I don't think a lot of people know the market's
been up sixty percent over the past four years, you know,
a two years, two years, you know, the past two years,
and you know, under Biden's presidency was up fifteen percent
year over year. You know what I think Trump did
a very very good job at to help he studied
for generations is convincing everyone that the act of me
was doing very poorly when in fact, it really wasn't
you know, that's just a fact.
Speaker 3 (02:04):
Uh.
Speaker 2 (02:05):
You know, unemployment was low. Uh, you know, prices had stabilized. Yeah,
they were up since COVID because of COVID. But you know,
the economy was doing was doing well.
Speaker 1 (02:21):
The Democrats were out of tune with the general populace
general populace once and you've seen it through other periods
in history, and we're seeing it really around the globe.
And I don't blame them, to be can there's there's
things that I don't blame the population for. I mean, uh,
and you say it all the time. Middle income the
middle America has been stagnant. Uh, they've actually lost real
(02:43):
purchasing power of the past three decades and and well
and Trump's looking to change that kind of boost the
middle America.
Speaker 2 (02:50):
On November sixth, Bernie Sanders Bernie Sanders treat it should
come as no surprise that a Democratic party which has
abandoned the working class people would find that the working
class people have a band have abandoned them. And I
think that was I think that was the well put
this election. I think it was really well put. You know,
how long have we been calling for uh, you know,
Nancy Pelosi and you know, all of these uh, all
(03:13):
of these congressmen and women to to ban uh you know,
stock train.
Speaker 3 (03:17):
And then then on Biden's way out, he says, you
know what.
Speaker 2 (03:19):
And I don't think people, I don't think senators should
be able to ban stock. It's like, you know, when
you stop listening, to stop listening to the people and
what they want, Yeah, they will abandon you.
Speaker 1 (03:28):
And so so, I mean President Trump is going to
there's a there's a wide He's casting a very wide net.
We have said for the past three or four months,
you know, pre election, post election that you know, obviously
we all know President Trump is not your traditional politician.
So the range of possible outcomes broadens out.
Speaker 3 (03:48):
Yeah.
Speaker 1 (03:48):
I mean, you know, I saw something from University of
Michigan consumer sentiment. Now, Democrats think inflation is going to
be high. Republicans think inflation is going to be low.
Before the election, Democrats sought inflation was going to be lower.
Republicans so did higher. We basically have you know, back
door sell We've taken corners, taken sides in the ring,
(04:11):
and that's what we have now as a country, and
that's probably how we're going to be for the foreseeable future.
So so here we go. What's good about President Trump.
What's good for the stock market is you're going to
see a lot less regulation. We'll see how that plays
out over the intermediate longer term, but there's a lot
(04:31):
more risk appetite for investors right now.
Speaker 2 (04:34):
He's kind of partnered up with these technology billionaires that
were kind of in the front row of his inauguration.
We saw we're going to see a lower tax rate
for people making over three hundred and sixty thousand dollars,
so you know, that should be good for the stock
market as well. So you know, I think that, you know,
the stock market is in good shape right now. I
think we're seeing a lot of AI infrastructure spending. I
(04:57):
think we're going to continue to see that. We're not
seeing crazy evaluations for technology, larger cap technology, which is
you know, a good percentage of the S and P
five hundred, So I think it. Yeah, the stock market
is is is prime to do fairly well.
Speaker 1 (05:14):
It's on firm footing. Yeah, that's what I think. And
I think as an investment person who manages together we
are company manages over eight hundred million dollars it's a
it's a man. It's a question of what's the downside.
And I think the downside at this point in time
is somewhat limited. You know. I think that because of
the risk appetite, because of positive investors sentiment, because of
(05:36):
the policies that President Trump is putting in place, the
market should do well. How well you know, that remains
to be seen. But if the downside is limited, the
upside will take care of itself. And we've always said that.
A couple of things though, before I before we get
get into the we do want to circle back to
that seventy four year old in the conversation that we
(06:00):
who do you like today? Which is which is Friday?
Speaker 3 (06:03):
But I want the Commanders.
Speaker 2 (06:04):
You know who I'm talking to somebody that was in
uh oh Todd uh and you know Todd father, Todd father,
a fellow Giant fan. I'm like, you know, I kind
of want the Commanders to win the Super Bowl. I
know they're in the NFC East, But like I like
Jaden Jade and Daniels, I like, I like Terry McLaren.
Speaker 3 (06:25):
He's like one of my favorite players. He's on my
fantasy team. And you know, they got a likable group
of guys. Uh, what do you mean?
Speaker 1 (06:32):
They gotta like them? They're tolerable. The Giants are likable.
Everybody else is tolerable, and they.
Speaker 2 (06:37):
I don't like the Bills. Like there's something about the
Bills I just don't like. I know they're a New
York team, but their fans are annoying to me.
Speaker 1 (06:44):
Who do you want to win?
Speaker 3 (06:45):
I can't Bills or the Chiefs. The Bills. I wouldn't
mind seeing the Bills win, all right, So.
Speaker 1 (06:50):
Let's play this out. You both want the Commanders over
the Eagles.
Speaker 3 (06:53):
You want the okay?
Speaker 1 (06:53):
Yeah? Absolutely, yeah, The Eagles are my fourth. If they win,
I don't know. And then I'd like to see the
Bills beat the Chiefs. You know, but there's something about
the Chiefs that kind of it's impressed. It's impressive exactly,
So you hate to see that come to an end.
But nonetheless, I still like the Bills. Bills have never
(07:14):
won a Super Bowl, you know. I remember in the
eighties they were good with Jim Kelly. You know, I
think they went the four consecutive Super Bowls and lost
every one of them.
Speaker 2 (07:22):
Was your least favorite sports team in everything.
Speaker 3 (07:28):
High?
Speaker 1 (07:28):
Right, now the probably right now, the Eagles, I mean
just because the front of mine. You know, I would
say the Sixers too.
Speaker 2 (07:35):
I hate the Sixers, six or seven against the Sixers
every night. Philly fans are just a tough bunch. Is
going to the game today. I know Zach Harrison now
he's the producer here.
Speaker 1 (07:48):
So so we both want the Commanders. We both want
the Bills. If if the Eagles beat the Commanders and
the Chiefs beat the Bills, want you want the Chiefs
to beat the Eagles too. If the Bills beat the
Chiefs in the the Eagles beat the Commanders, who do
you want the Bills? Are the Eagles the Bills? Yeah?
Me too? Me too? So the Eagles are well yeah,
you know.
Speaker 2 (08:07):
I don't know, it goes Commander's Bills in the same tier. Yeah,
and then and then it goes Chiefs than Eagles. Okay,
you like, I wouldn't mind if the Chiefs won.
Speaker 1 (08:18):
But but you're like, if the if the Bills are
playing the Commanders, you want you want the Commander.
Speaker 3 (08:22):
I don't know.
Speaker 2 (08:23):
I'll know how you know nine times like how you
feel when you're watching a game.
Speaker 3 (08:27):
I don't know.
Speaker 1 (08:28):
All right, let's get back to this right, So, speaking
with so, speaking with this individual, and maybe it was
thirty or forty percent in the stock market, and he's
he gotten in and out of the market a little bit.
He had gotten in and out of the market a
little bit, and uh two or three times. And I
said to him, I said, you know, you just got
(08:50):
to be careful that. You know, you're not on some
sort of a yo yo up and down with with
your feelings being being basically dictated by where the market is.
At this point, you cannot change your allocation, uh, after
the market's been up sixty percent and expect to really
(09:10):
benefit from that. The time to change your allocation. You know,
you buy when there's blood in the streets, so to speak.
That's an old Wall Street adage. Buy when the fear
is greatest. And I think what we're seeing now to
was a certain extent. You know, we got some uh
bitcoins up tenfold. You know, we couldn't have given it away.
We held on to a lot of it for our clients.
But when bitcoin was low, we had we had calls, Hey,
(09:31):
get me out of bedcoin. This is garbage, you know,
Warren Buffet says this. Jamie Dimon says that, So, you know,
I just question investors to be careful that they are
now getting impatient. And we were talking a little bit.
Speaker 3 (09:46):
You know, I like with you.
Speaker 2 (09:47):
You know, I think I agree when you buy companies
like we're getting uh trade orders for from clients, you
want to buy them when you think that they won't
be around anymore. You don't want to buy them when
they've already been up from like you know, Palenteer from
twenty to eighty. Do I think Palenteer will be a
trillion dollar company one day?
Speaker 1 (10:04):
You've always said yeah?
Speaker 2 (10:05):
But I also think that you know, it's gone up
two hundred plus percent, so you know, yeah, even bitcoin,
you know now it passes one hundred thousand dollars. You know,
still I do still think it has room to run.
But you know, I think when when you're when you buy,
when you try to buy speculation, when you know, when
you when you're mixing speculation with investing, you take shots
when the market's.
Speaker 3 (10:26):
Down really not when the markets up really big.
Speaker 2 (10:28):
Because you know, as you said, I think a few
shows ago, you know, bitcoin yearly, you know, has averaged
like a seventy percent downturn. You know, so the probability
of that downturn goes up when this when you know
the stock or bitcoin is up so tremendously. You know, again,
we talk a lot about this too with with clients
in that you know, we're getting a lot of these
(10:50):
calls from sixty seventy seventy years old. When you know,
let's say you put two percent of your allocation in
bitcoin and and it doubles, you still only have four
percent of it. It's not going to change your life.
It's going to increase if the rest of your money
is in the S and P five hundred, it'll you'll
have outperformance of two percent, right.
Speaker 1 (11:10):
And right, and it increases your anxiety level. And that's
what I said to him as well. I said, look,
you know at this and look you know, I said.
He asked me what I thought, and I said, well,
what I always thought was like a sixty to forty
ratio between stocks and bonds. And to kind of sixty
percent stocks forty percent bonds, our growth and income portfolio
(11:30):
is fifty to seventy five percent in the market. We
stay there now. So the fact that when this individual
was thirty or forty percent in the market, that was
his call and we will certainly adhere to that because
of your money and we know it. But you know,
we stay within a range because nobody knows what the
market is going to do over the short term. So
don't get too frightened and get out when when when
things look bad. Don't get to you fork and get
(11:52):
in when when things look when things look good, because
there's also the fact of the matter is what you're
going to get into is probably the things that are moving.
We're talking about off the air, you know, off the
air before doing the show. It's hard to have. It's
hard to have adequate diversification means you're gonna have some
investments that aren't moving. You know, You've got some tactical
investments that you know are moving a lot, it seems like.
(12:13):
And you have like fundamental investments and I name them here,
like a turnaround like Boeing, Johnson and Johnson. We have
some end phase. You know, we have some schwab that's
really starting to hit on our still as you're on vacate.
Thanks for coming into I know you're on vacation. Make
the you said you just came in to make the
show a lot more interested.
Speaker 3 (12:30):
Than me doing it.
Speaker 1 (12:30):
Alone, right, so so so so you have you have
some things that aren't moving, and that's just the way
it goes. Uh, you know, otherwise you're gonna pick once
one stock or one fund that's a sector type of
an investment and let it go and and you don't
do that. So you need diversification. Diversification to me on
(12:51):
an individual security basis, especially on the stock size says,
you know, three or four industries, three or four companies
in each industry, and then and you want to go
down a little bit and make sure you have an
ETF in that industry as well, and then a broad
based ETF.
Speaker 2 (13:05):
You know, and then you know even in uh, you know,
it's uh like the like the correlation, the correlation core
efficient of how strongly two sectors are are are related
as you know, you know, you need to have some
sectors that aren't as don't have as a strong connection
to others because if you're wrong, you're kind of always
investing too if you are wrong, you know, you always
(13:27):
have to have that in the back of your head.
If you're an investor, you don't want to get too cocky.
You always have to think, hey, you know what if
I'm wrong about this, and you have to build a
portfolio for that as well, which means that you're gonna
have some some laggards in your portfolio, especially the older
you get, the more uh, you know, the closer yard
to retirement or you know, the distribution phase of your retirement.
Speaker 1 (13:46):
It's hard even to hold bonds now. You've got you've
got fixed income yielding four to half five percent right now,
and yet when the market's going up, Man, it's difficult
for the average investor, regardless of the rage, because people
tend to shun the thoughts of risk when the market's
doing well. And also, I think you know, people, you know,
(14:07):
this is our experience. I've been doing this forty years.
I've been doing this since nineteen eighty three, so this
is my forty second year in this business. Okay, you've
been in here since twenty eleven directly with us, so
this is your fourteenth year in this business. You have
your MBA, you know, so we know what we're talking about,
and we have loads of experience as to certainly the
mechanics of the market and the fundamentals of the market,
(14:30):
but also the emotions of the market. You don't get
away from this business and the emotions that I'm feeling
right now is President Trump is going to make everything
great for the market. And I think you said before,
you know, as we went on the air, right after
went on the air, that the market did find under
President Biden, it did find.
Speaker 2 (14:49):
Under person ye prior to that, and then you know,
get trumped at about you know, around the same Trevor thirteen.
Speaker 3 (14:54):
So very good, all.
Speaker 1 (14:55):
Right, so maybe things will get up better. Yeah, please
don't email us or don't call us at the office saying, well,
what about inflation. We realize that I will also say,
inflation has come down a lot. You know, maybe it'll
and it should continue to come down about from President Trump.
But one of my fears for the market over the
intermediate and longer term, because you know, we just said
we think the market's got limited downside. The upside will
(15:16):
take care of itself. One of my fears for the
market is like a stagflationaryan environment where tariffs do raise
the cost of things in addition to so some would say,
you know, tariffs are a one time increase in cost
and then costs should come down with the Department of
Government officials like that may very well be true. But
(15:37):
I think that the underlying under underlying all of that,
I think is inflation. Prices are rising at a faster
pace than they were six or seven years ago. Six
or seven years ago, the Fed at a very difficult
time getting inflation up to two percent. Now that I
think they're gonna have a difficult time getting inflation down
to two percent. So you have underlying you know.
Speaker 2 (15:58):
And you know, you know, on top of that, you
have the optimism from half of America now of wanting
to get more into the market. You're not really seeing
you know, people.
Speaker 3 (16:07):
Wanting to get out of the market right now.
Speaker 2 (16:09):
Just from a you know, personal experience, You're you're seeing
more people wanted to get into the market and than
I think yesterday, you know, Trump called for demanding interest
rates go down, which is also inflation.
Speaker 1 (16:17):
Are well right, Fed meets next week. Yeah, there's definitely inflation.
They the FED meets next week. And you know, I
think maybe President Trump is just jaw boning Jerome Pile
and the rest of the Fed. You know, we don't know,
and I think it was you know, you if you're
listening out there, you might say, well, he should inflation
should go down. President Trump knows more of that. We're
not debating that, okay, whether he does or doesn't just
historically or we're debating is the fact that you know,
(16:39):
you know, what's the ultimate impact of the market if
if Jerome pile does you know, cave to President Trump,
what's going to happen to to you just said it?
Inflation's more likely if interest rates go down, because the
demand for goods and services will go up, you know.
So you know, and I haven't heard anything about the
housing market nothing now houses are five five hundred and
(17:02):
some one thousand dollars.
Speaker 2 (17:03):
Anything about the price of food as well. You know,
we're talking about oil. You know, gas is about two
eighty a barrel, and I'm not positive. I'm not sure
why it needs you know, that's pretty cheap, right so
I'm not sure why you know, OPEC needs to lower
their prices right now? That these aren't these just aren't
things that you know, I would focus on if I
was President Trump with you know, bringing back middle of
(17:23):
the middle class.
Speaker 1 (17:24):
And President Trump is transactional. I mean, that's that's the
bottom line, you know. And uh, I think we'll see,
we'll see how it plays out, you know, Like I said,
we we are, we are always guarded regardless regardless of
who's president. I don't think you know some of it.
And I think about that myself. I'm very critical of
myself and my thought processes. I watch a lot of stuff.
I read a lot of information that's broad and also
(17:46):
a lot of information pertaining to the market. I know
you do as well. And no, we didn't talk this
animated this in this in such an animated fashion about
President Biden, but for good reason, right you know, he
was kind of there. You know, President Trump is not there.
He's front and center. Yeah, and things are going to change,
so we gotta be we gotta we we we we
we're fiduciary responsible for our clients money and well being.
(18:09):
And we and we and we take that very serious.
Speaker 2 (18:11):
And you know, I think as we were saying, you know,
with with with with Trump in the stock market, the
stock market hates when there's unknown variables out there, and
Trump brings a lot of unknown variables to the table.
So that's kind of the overriding theme is you know,
some policies could be good, Some policies could be good,
we just don't know yet.
Speaker 1 (18:32):
Right right now, it's lower regulations vibe in the in
the whole stargate things right now.
Speaker 2 (18:36):
Yeah, you know, saying, you know, gonna have a five
hundred million million dollar investments, but that doesn't bring revenue
to the table for these companies. This is still you know,
the the these projects are still you know, kind of
in school. They haven't graduated to the workforce yet where
they have to you know, start earning money for people.
So I'm a little yeah, I guess I'm just a
little bit skeptical of of uh, I.
Speaker 3 (18:56):
Guess a melt up here and too, uh you're you're afraid. Yeah,
I'm afraid that.
Speaker 2 (19:02):
You know, although it could be good temporarily, a meltop,
you know, could not be good for the long term,
you know, for the stock market.
Speaker 1 (19:10):
You know. The other thing too, is I just to
get into the tariffs a little bit. You know, we
get I think about four million barrels a day of
oil from Canada. Well, just drill, baby, drill here. We
haven't built a refiner in fifty years. Yeah, so you know,
we may have we may be able to drill more,
we just can't refine it. And the refineries that we
have can't can't satisfy all our needs as a nation
(19:33):
in the different capacities. You know, jet fuel, diesel fuel, light,
oil for automobiles, oil for your home. So we don't
have the refining we need Canadian oil. So what you're
doing there, you're just you know, so I think we
just got to take take a chill pill and be careful, you.
Speaker 2 (19:50):
Know that said you know, you know Trump did say,
you know, if China was gonna have fifty percent tariffs,
sixty percent tariffs, and you know his his current plan
was ten percent. So I think that is better for
you know, I guess for the relationship with with with China.
You know, it's not something that he ran on, but
you know, at ten percent tariff would be better for
(20:11):
you know, the economy and uh, you know, the consumer.
So I think a lot of this, as you were saying,
could be job owning. But you know, we're kind of
in the yes, let's see what happens.
Speaker 1 (20:20):
There's a lot of good things going on really economically.
President Trump has mentioned a lot of good things, uh,
you know, namely hoping to you know, get interest rates down,
hoping to get inflation down, certainly, securing the border. Securing
the border, Uh, may may be somewhat inflationary, you know,
because if you think of lots of the jobs that
are that illegal immigrants are doing, our jobs that are
(20:44):
going to be difficult to replace at that at that
paid level. So so so there's there's a lot going
on now, and you could tell we're like, oh, this
has been a very very the market's been good. I
mean since you know, I can't really.
Speaker 2 (20:55):
You know, that's you know, and I know it's just
the beginning of Trump's presidency, but you know, I think
you know, if you if you if we have fifty
minutes to talk every every week, we could just be
talking about what Trump has said and how it could
impact the economy. Right, So maybe we're just front loading
this a little bit with you know kind of point
you know, his you know, multiple multiple, you know, executive
(21:17):
orders that we're just kind of trying to play, Hey,
you know, let's see what happens if these things do
come to fruition. But you know, I think it's too
early to to tell on you know, what he's going.
Speaker 1 (21:28):
To But the enthusiasm from the business community is there,
and that's the raising of animal spirits is there. The
potential the lower regulation will will allow for more consolidation.
It will allow for more innovation. So I think, I
think those are all good things, but I did want
to so I started this out with and it kind
(21:48):
of you had you talked about somebody buying bitcoin in
a doubling and the influence on someone's portfolio being two
percent if they if they start out with two percent,
and by all means you know, when you deal in
a speculative asset, you want to go with two three
percent of your your account. We often say, you know
ten securities of speculative do you you have one hundred
(22:09):
percent of Let's say, do you take one hundred percent
of your your equity exposure? You know, you know, get
twelve stocks at five percent, ten stocks at three percent,
and five stocks at two percent something like that, where
you have one hundred percent of your account in the
stock market, so you know, ten stocks at six percent,
you know, all the stalwarts of the market, the Amazons,
(22:30):
the Walmarts, the you know Merks, those of the world
or Bristol Myers, regeneron. You go down to that next
level of ten stocks at three percent, so you got
sixty percent in the in the in the blue chest,
ten stocks at three percent, would be you know, and
then then five to two you would say, what, No,
I thought.
Speaker 3 (22:47):
You were going to talk about healthcare and those stocks.
Speaker 2 (22:49):
You know, I think there's a lot of speculation that
you're still speculation going on with with what RFK is
going to prioritize.
Speaker 1 (22:55):
Yeah, so anyways, we got about a minute to go
out of the break. You know, if you if you ratchet,
and this is what this is kind of referring back
we will to I'll actually we'll do it right now,
referring back to the bitcoin exposure. If you if you're
lay for an appointment and you you're going sixty miles
and I say, oh my gosh, it's gonna be five
minutes late, and you drive eighty miles an hour for
(23:18):
eight minutes, you're gonna get one minute early. And I
don't think people realize that from from driving eighty miles
an hour or going seventy where the speed limit is
in the South quite often too, eighty over the course
of an hour, you're gonna save you know, basically, you know,
ten minutes of time. Is that is that really going
to be worth it?
Speaker 3 (23:38):
You know?
Speaker 1 (23:39):
So that's that's the thing that you really want to
focus on that is the risk worth the reward right.
Speaker 2 (23:43):
Now, The longer you do it, the better chance you
could get a ticket right right, right, right.
Speaker 1 (23:47):
Right right now. It's ten thirty on the station depend
upon for news, weather and information. News took a ten
and one to three to one. W g Y, Good morning,
and welcome back to the second half hour of the
Capital District's Money and Investment program. You're listening to the
fague and financial reporting. You know, money and investing can
be a little bit broader than we'd like sometime, you
know what I mean. And I think that that's kind
of you know, just Kim and we were talking a
(24:07):
little bit about you know during the break that she said,
you know, I hope we're coming across right. You know,
we just see it as just it's it's more encompassing now,
you know. You you you know, you pull in uh
Sunder Pachai from Google. You're pulling Tim Cook from Apple,
You're pulling Jeff Bezos from Amazon, You're pulling the individual
from TikTok and I don't know his name. You take
(24:29):
Elon Muskin there, and that's the news that we're getting
now is delivered from these platforms that are really not regulated.
So we just got to be you know, you know,
how does how is this going to impact the market? Now?
Are the tariffs going to impact the market? How are
you know President Trump's you know, pushing on you know,
our allies and foes alike, going to impact the market.
(24:51):
You know what does that mean for the economy? What
does you know? So so these are all things that
you really don't have and and those listeners to our show,
I have no We've been saying that for for certainly,
like I said three or four months now, that this
is not your traditional president because so things are going
to be just a little more. It's gonna be a
little bit broader, It's you know, it's gonna be you know,
a little bit different, you know that said Aaron I.
(25:13):
You know, we are looking at the returns. Uh, you
know coming into Friday. You know, over the past week
or so, the S and P five hundred closed Thursday
up at an all time record US total market. The
next closed at an all time record NASDAC Russell to
or not Russell, the Dow Jones and Dustry average with
an earshot of an all time record. Year to date,
(25:34):
you have the S and P five hundred up four percent,
and Nazuk up just a shy of four percent to
DOWBT four point seventy five percent. The US total market
ended up a four point twenty six percent, and then
Russell two thousand up three point seven nine percent. So
you've had pretty much a broad rally that that is
helping the market. Now, let's dive into some of the
news that was released this this uh this past week,
(25:56):
President Trump along with Masa Yoshi's son from SoftBank, Sam Altman,
CEO of open Ai, and Oracle co founder Larry Ellison,
we own some Oracle, not enough about seventeen thousand shares
for a clinch. You never own enough of it when
it's going up. Announced the joint venture that's going to
(26:18):
get it, you know, up to five hundred billion dollars
over the next four years of project that's basically going
to build data centers to hasten the development of artificial
intelligent infrastructure in the United States and make the United
States a hub.
Speaker 2 (26:36):
I think that's I think this is you know great.
I think it's it's important, you know. I think Trump
set of AI that you know, what we want to
do is we want to keep it in this country.
You know, I think with Taiwan semi producing so many
of the nation's chips, I want to say ninety percent
of the world's chips. I think that moving on to
this next phase of technology and artificial intelligence, I think
(26:57):
data center and AI infrastructure is key to you know,
national security as well as you know, hopefully building up
more jobs in this country, if you know, if we
can start producing chips here anymore. We didn't really see
anything with uh, you know, with the production of chips
just uh, just you know, just data centers. You know,
(27:20):
I think Virginia counts for about twenty nine the Virginia's
energy is about twenty nine percent from data center, So
you know, this could be I think this should be
a good thing for the country.
Speaker 1 (27:33):
You know.
Speaker 2 (27:33):
Yeah, what what I get worried about is, you know,
a meltop in artificial intelligence names, which you know kind
of trickles over to you know, the Googles and the larger.
Speaker 3 (27:42):
Cap tech.
Speaker 2 (27:44):
And you see, you know, sky high valuation. So I
think that's the biggest issue that we could face. But
you know, you'd argue it's a good issue.
Speaker 1 (27:54):
It is a good issue. You know, it's a good
it's a good problem to have if that would occur, uh,
you know, And I was listening to an interview with
Mark Benioff, the CEO of Salesforce, and you know, if
you look at population and I forget who said this,
but it was in the past week or so, one
of the world's biggest problems is a lack of population
(28:14):
growth in the developed nations, you know, in Western Europe
and China and the Uyes. And that we do have
some population growth in that, you know, that could be
an issue for I think towards and slack. Something he
put out and he's from Apollo, said that the US
has a and I don't think people realize that when
they talk about immigration, and I think everybody's you know, everybody,
but I think most people are in favor of regulated
(28:36):
immigration as I am, you know, and I assume you
are as well.
Speaker 2 (28:40):
There hasn't been any immigration or form since the nineteen eighties.
So you know, we need a plan, like I mean,
like anything in life, you need to plan. And I
think that's you know, that's exactly what we need. You know.
I guess that said about in about fifteen years, we're
going to have about thirteen percent less people turning eight
team than we do today. So if we see a
(29:03):
declining population, like like, look what South Korea is going
through right now. You know you don't want to this.
It's not a problem that's fixed overnight. You know, South
Korea can't just fix this problem. You know, we need
people to work to keep you know, prices down. Well,
you also need your costs down, which is sad to say,
(29:24):
but we also need spenders here, and.
Speaker 1 (29:26):
You also need innovation. Innovation comes from the twenties and
thirty years old. Yeah, but I think what's the way.
What Mark Benioff was saying is that this this, these
today CEOs are more than likely the last who will
manage a workforce of only human beings. And I think
that's very interesting. I was, I listened. I was listening
to him, and he was talking about mixing up and
(29:49):
then you know, we all complain about it and so
hopefully it's better. But you know, when you're when you're
looking for service, you're going to get agents quote unquote,
and he refers to them as ai AI artificial intelligence
agents coupled with human beings. Yeah, and I think that.
Speaker 2 (30:05):
You'll see that, right, I mean, I think you'll see
that in a lot of fields. I think if you
start seeing driverless vehicles, you know, that doesn't mean that
you know, someone won't be behind the wheel making sure
everything's going okay from a computer perspective. And uh, so
you know, I know when when when you're facing things
like autonomy, I think we'll see industries that haven't even
(30:26):
been created yet, with which will then in turn create jobs.
Speaker 1 (30:33):
I agree. So so this this AI, and I think
it's coming quicker than most would anticipate. This AI infrastructure,
Uh back by Oracle open as Elon Musk.
Speaker 2 (30:44):
Was not already used to crappy service from like large
cors anyway.
Speaker 1 (30:49):
That's true. Uh, people are always surprised when they can
get a human being when they call us.
Speaker 3 (30:53):
Yeah, I know, Yeah, that's what I know.
Speaker 2 (30:55):
I said, you know, I don't even want to It's
hard to say this on the radio, but man, you know,
the how happy people get when you return their call
and pick up when they call is sad with how
you know when thinking about how customer service has gone
true lately.
Speaker 1 (31:12):
So the so Stargate project uh looks to you know,
accumulate up to five hundred billion dollars investments over the
next few years from several different companies, not the least
of which would be soft Bank, Open Ai and Oracle.
There was some discussion must kind of pooh pooh the
fact that this this money could be gathered together. He
(31:33):
was not at the at the press release. Uh so,
so we'll see how that goes down there.
Speaker 2 (31:39):
Uh.
Speaker 1 (31:39):
I know that who's the CEO of I can't believe
his name is escaping me? Of Microsoft. He was saying, hey,
we got eighty billion dollars. It's right. Uh, you know
that's available. So I think I think these are really
good things. I also think, you know, if you look
(32:00):
at the performance that we've seen year to date, if
you look at select sector spiders on a year to
day basis, you have industrials picking up quite a bit
of seven percent, in fact, seven point five two percent
through Thursday, trailing just energy. Energy has lost a couple
percent this past week. You know, you saw great earnings
(32:21):
from Caterpillar, great earnings from Deer, uh these companies. And
you also look at small scale nuclear facilities that are
probably going to be going up. Those all have to
be built. So industrials, if you look at just if
you in the etfc X l I I think merits
a serious look here.
Speaker 2 (32:38):
People have been talking about infrastructure spending for a decade,
so you know it would be nice to see, uh,
you know, some infrastructure spending which you know, in turn
would you know, help help the middle class and build
up some jobs there.
Speaker 1 (32:49):
So so I think you got to continue to pay
attention that Ge had earnings this past week. They were
they were, they were baffo. They raised their dividends, it
raised their divice fet What do you think bafo me.
Speaker 2 (33:00):
Baff I've never you know, I shared an office. I've
never heard baffo before. Well, you know, go on.
Speaker 1 (33:05):
Do you think their earnings were bad? No?
Speaker 3 (33:07):
So they were baff they were baffo, they were where's
that from? Did you make it up?
Speaker 1 (33:13):
No? No, everybody says it bo it's everyone says it
more impressive, make up a word deep and unrestrained. It's
more of a laugh. M. Maybe maybe that's not. The
finale is a genuine baffle. It's just blowout, that's what.
So they had very goarnings or stock surge. I think
so the caterplayers they mentioned, look at Deer, look at
(33:34):
GEMM right now, No, no, three high three year in
the baffle mode. GM had good earnings uh GM or
g CEO Larry Cope said, Gero Space delivered a strong
finish the twenty twenty four given robust demand for services
and products, with fourth quote orders of forty six percent,
EPs more than doubling, and free cash flow increasing over
(33:56):
twenty percent of performance. Capped off a monumental first year
as a standalone company, and they spun off Healthcare and
they spun off for Nova with one point seven billion
of profit growth and one point three billion of free
cash growth. Looking to twenty twenty five, we expect double
digital revenue and EPs growth with greater than one hundred
percent free cash flow conversion. So that's that's that's a
huge plus four ge And I think it's just kind
(34:18):
of emphasizes or puts in, you know, puts the underlines
the strong kind of performance that I think we're going
to continue to see from from industrial companies, you know too.
So then I guess what I would do. The second
next thing is, you know News of the week. We
touched on Stargate, touched on g is Netflix there.
Speaker 2 (34:37):
Baffo Baffo again. You know, stock was up ten plus percent.
Sure Pass three hundred million subs paid subscribers three hundred
and one three oh one point sixty three paid subscribers,
Revenue ten point two five billion verse ten point one one.
You know, earnings for share for twenty seven verse four
twenty just really monster earnings all around, you know stop uh,
(35:01):
you know, revenue in the fourth quarter jump sixteen percent
year over year. You know, they obviously they you know,
they have first mover advantage. They have, you know, really
the best in the business when it comes to content.
Right now, you could you know, you could argue Apple TV,
but you know, the amount of content and the quality
of content is there. They've introduced you know that Jake
Paul fight. I think there was a football game on Netflix.
(35:24):
So they've done a good job, you know, expanding their
you know, catalog. What always makes me nervous about a
company like Netflix. We do own Netflix for some class,
you know, it for yourself. I think we own it
for maybe a family member or two. But you know
what makes me nervous about Netflix is, you know, what's
the end game there is? Yeah, So like you know,
(35:46):
you're you're what's the end game for anything? I know,
I know, but it's like it's just almost like one
of those. So you just keep raising, raising prices, raising prices,
raising prices raising. You know, eventually, you know, eventually the
means will stop with a company like this, because right now,
how do you innovate outside of.
Speaker 1 (36:07):
A couple of things.
Speaker 3 (36:07):
Wonder what they're doing.
Speaker 1 (36:08):
There are four hundred billion dollar company, you know, Apple's
you know, eight nine times that at three point six
trillion probably revenue, right, I'm not saying that, but I'm
saying they've got room to grow. They've got one off
sports like the Jake Paul Tyson fake. They've got one
of sports all across you know. Obviously they have great programming.
Speaker 3 (36:27):
Yes, you could introduce gaming.
Speaker 2 (36:28):
Who knows what TV is going to be like in
five or ten years.
Speaker 1 (36:31):
Three hundred million paid memberships, it's an eight billion membership world,
or maybe maybe it's a quarter of that when you
think of you know, families alike. So they've got they've
got a lot of room to grow. Now you look
at that, but you also look at valuation. I think
they're up ten percent on Wednesday or so when they
announced starting they followed up with a slight game on Thursday.
(36:53):
So look a little retrenchment here would be good. But
if they pulled back, you know, I think with those
baffo earnings, I think that uh, you know, they certainly their.
Speaker 3 (37:04):
Content quality is.
Speaker 2 (37:09):
Even their their app is so much more easily navigating, navigatable.
Speaker 3 (37:15):
Is that where so you know.
Speaker 2 (37:20):
It's the best of the best.
Speaker 3 (37:24):
Yeah, I guess that's all I can say.
Speaker 1 (37:26):
So. And then the final piece of information from A
from A I guess current events is that the Bank
of Japan, the b O J.
Speaker 3 (37:35):
You know, you saw them hike rates again.
Speaker 2 (37:36):
It looks like that carryover trade is gone because the
market kind of just did nothing when you know when
they raised raids. So you know, it should be a
good sign, you know, for Japan and the Japanese economy.
There you know, they're a pretty large percentage of the
VT which the which is the Vanguard World Index. It's
(37:59):
more than what people but would think, you know, being
in being an island.
Speaker 3 (38:04):
What is it.
Speaker 2 (38:05):
It's five point five to nine percent, you know, I'm sorry,
that's that's a little bit higher than I think what
people would think with with with the with the world
total market, is it more than it's more than China,
you know, so it's five point nine five nine percent.
China is two point nine one percent, so you know,
it's a very important economy. A lot of innovation happens
(38:25):
in Japan, robotics technology, you know, Toyota is there obviously,
so and I think what we're seeing a little bit
now is uh you know, you know Masiyoshi Sun I
think is the richest, uh richest person in Japan, right, Yeah,
So you know, I think maybe we'll see some you know,
closer relationships with with with Japan.
Speaker 1 (38:46):
And I think some of the some of the move
is just to stem the strength of the dollar. The
dollar has been strengthening, and you know when that happens,
you know, the US is going to attract more investment.
Uh the still, I think they think they just when
it's strengthening, so you have more money, Yeah, get a dollar.
So now you've got there, their equivalent of the federal
(39:07):
funds rate at point five percent, it's their highest in
sixteen or seventeen years since October of O eight.
Speaker 3 (39:13):
Increase their buying power.
Speaker 1 (39:15):
Well, we'll see, we'll see, we'll see how that goes.
What else do you have there from a from a
topical perspective, ed, you know, I just think you've you've
got a market really on on on on the loose,
so to speak.
Speaker 2 (39:27):
You know, and you know, we don't talk a lot
on this show about fixed income, you know, no, no,
I wouldn't. But you know, right now you're seeing the
tenure at four point six four I think a top
that around around four point eight, four point eight, almost
four point nine or so. So you're seeing some stabilization
in the tenure, which means that you know, in my opinion,
(39:47):
you're seeing a little bit uh less skepticism out there,
uh so, which I think is a good sign. You know,
it's it's a good sign for where people think in
FLA is going, I guess would be the best way
to put it. But you know, a note from Ben
Carson is it time to lack in five percent yields?
(40:08):
And I think so, you know, I think that I
think this is a very very fair.
Speaker 3 (40:15):
Fair rate.
Speaker 2 (40:15):
I think it's it'll it'll help your portfolio, It'll make
your portfolio work, It'll be great for distributions. I think
the you know, what you still got out there is
the you know idea that you know, if Trump just
starts lowering rates, if he if he's pressures people into
lowering rates that you know, it could make inflation go
up again, which would put the FED in a precarious
(40:37):
situation a little bit, which would then kind of in
turn make the ten year rise if if, if inflation
expectations are start to seep into the you know people's
you know minds again.
Speaker 3 (40:50):
So, but you know, I think this is a fair rate.
Speaker 2 (40:54):
I think we're going to hover. You know, we've been
talking in the like four point three to five area
for the foreseeable future, and you know, I think that
that is a you know, great for let's say seventy five,
twenty five or sixty forty portfolio.
Speaker 1 (41:09):
You know, So I think, you know, what do you
do as an investor with that? You know? Uh? And
I when when you saw that article? Is it time
to lock in five percent yields? Yes? Okay, yes it's
time to lock in five percent yields. But it's time
to kind of wade into locking in five percent yields.
I think it's it's whether you're talking about the equity
(41:30):
side or fixed income side. It's arrogant to fill in
an entire position all at once, you know.
Speaker 2 (41:36):
Yeah, just like on the stock side, you know, you
never want to be too, that's what is that what
you said?
Speaker 1 (41:41):
Well, yeah, no, no, no.
Speaker 2 (41:43):
And I think that's important. I don't think you want
to get too confident in any investment decision that you make.
Speaker 3 (41:48):
And yeah, yeah, you know, yeah, yeah, I think a
good way to do that.
Speaker 2 (41:52):
And I don't know if this is where you were
going to be, you know, laddering bonds, laddering bond ETFs
in your portfolio. And that's usually the best way to
go about these things.
Speaker 1 (42:01):
So what, uh we've been using uh different forms of
fixed incomes SERI.
Speaker 3 (42:08):
Treasuries you've been using.
Speaker 2 (42:10):
You know, there's said E T S with that maturity
dates in specific years ib T it's like I b
T J I T T H I b T O
I b T L you know.
Speaker 3 (42:21):
So yeah, so the H specific years. Yeah, I don't
know the.
Speaker 1 (42:25):
Yeah, I just looked it up while you were talking.
The H comes due, the H comes do. So they
buy treasuries that come doing twenty seven. Ib T J
buys treasuries that come doing twenty in twenty twenty nine,
ib t L buys treasuries that come do in two
thousand and thirty one. Okay, and then I B T
O buys treasuries that come do in two thousand and
thirty three. So you've got treasure that come doing two years,
(42:47):
four years, six years, and eight years, and so that
there's an e t F and they're comprised of those treasuries.
Uh so we like those at this point. I think
also on the fixed income CIBE, we we've been using
the S like Aaron you said, there's some treasury notes.
We've been using simple BIL, which is one to three
(43:07):
month t BUIL.
Speaker 2 (43:08):
For which I think deserves a five ten percent allocation
in people's portfolios. Five ten percent. You know, let's say
you have fifty percent in the market, I would put
ten percent fifty percent fixed income. You know, just to
make matters easy, I would put ten percent of my
money in b I L. Nothing overnight is going to
be like, hey, I need to get my money.
Speaker 3 (43:26):
Out of there.
Speaker 2 (43:28):
You know, if inflation does start to come down in
that bi L and the Fed Fed starts cutting rates,
then you can, you know, transition to maybe more intermediate
data assets. But you know, with the BIL, you know,
net of it's expense ratio, it's it's expens ratio is
only zero point one four percent, and it's thirty day ses.
Speaker 3 (43:48):
You know, it's distribution.
Speaker 2 (43:49):
You know, this five point one percent thirty day se
sealed is four point two four percent.
Speaker 1 (43:54):
So kind of a parking space, Yeah, kind of a
parking space for money. And that's not a bad idea again,
hearkening back to and I think that's where that's where
you are going to kind of see if there's any
issues with with President Trump's tariffs. Yeah, I agree, yields
(44:17):
will go up.
Speaker 2 (44:19):
And I think that ten year is the key signal
for how investors actually think. So I think we're going
to continue to keep.
Speaker 3 (44:26):
An eye on that.
Speaker 2 (44:27):
And you know, although you know, Trump has a lot
of rhetoric about getting rates down, which would be inflationary.
You know, the tenure hasn't moved much. You know, it's
actually moved down since since he was elected. I believe,
well it's at least moved down since it's high. So,
you know, I think it's a good sign with you know,
maybe a lot of you know, Trump speak has just
(44:47):
been rhetoric.
Speaker 1 (44:48):
A ten year right now is sitting at four sixty
five if you look at from the day of his
election on November fifth. That's a good question. Actually, I'm
actually answered, and what has the what has the tenure
done since the day since November fifth? I am going
to look it up and give our audience who's waiting,
(45:09):
you know, people are probably pulling over in the side
of the road to waiting for this information.
Speaker 3 (45:13):
I'm curious though too.
Speaker 1 (45:16):
It is from twenty six, twenty six to four six,
so it's up. Why would it go out?
Speaker 3 (45:22):
Because yeah, because.
Speaker 1 (45:23):
Tariffs, I think would be a question. And also President
Trump uh did not really campaign on he campaign on
the dose thing, but not really reigning in government spending
on other front. So so we'll see in the eighty
years trading days, in the eighty trading days fining the
Federal Open Market Committee's first rate cut on nine seventeen
(45:44):
through one thirteen, the yield on the tenure has gone up.
And since nineteen sixty twenty four their periods saw such
a high frequency of daily increases in the same span
that was sixty nine, eighty four, six and twenty twenty one.
Not just some things to pay attention to other other
fixed income products that we're using now. So we gave
you for U.
Speaker 2 (46:05):
C O N is an unconstrained I think the economy
is still in good shape, so you can go out
a little bit on the risk spectrum. U C O
N is first trust unconstrained bond fund, So that's a
little bit where we're going. JP Morgan has a core
bond fund, which I think is great at base for
someone's portfolio.
Speaker 1 (46:22):
They have a they have a I'm sorry interrupt, they
have a mutual fund, and they have a JP LS
I think is their symbol for their JP Morgan O
n I A and they have j cp B has
two good UH bond funds core bond funds for for
your portfolio. Also, Loomis Sales bond has done pretty well,
(46:44):
has a good yield. LSB d X or l s
b r x I think are two good areas to play.
LSB yeah b d x. Did the yield on that
or the Yeah, the yield on that is five point
four eight percent. They moved down the credit quality a
little bit. UH. They've had very consistent management, so I
think that's something that if you're looking for fixed them
(47:07):
coming you want to take a look at. Certainly, he
can ladder treasuries. As we mentioned individual securities, the CDs
difference between a CD and his treasuries treasuries are non
taxible the state level, and a CD is not, so
CD is taxible to the state level. So just some
things that you want to look for there. So I
thinks as we move into the president the presidency of
(47:29):
the administration of President Trump, let's kind of keep our
eyes and ears out for more more clarification on these policies.
I think right now he's kind of setting setting the
stage for generally speaking, what he wants to accomplish, you know,
how he wants to go about it. I think he's
kind of you know, let's say he's broadcasting to all
(47:49):
the all countries. This is kind of what we're going
to do. You know, get yourself ready. We'll becoming you
at some point in time, and we want to have
some dialogue there, you know. So, so I think you're
going to see more and more of that, initially with
Canada and Mexico and then moving there probably to the
China and the West and the Middle East. You know.
(48:11):
So a lot of things going on, a lot of
exciting It's an exciting time for the market, and we
are going to be there. If you have any questions,
feel free to give us a call during the week.
If you want some input, if you want our opinion,
if you want. We have been in business since nineteen
eighty nine, so we are fiduciary, so we work one
hundred percent on a feed basis. So we'd like the
opportunity to help with you with your money. Give us.
(48:33):
Check us down the web at fagan asaid dot com,
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Enjoy the game today. Take care,
Good morning, and welcome to the Capital District's Money and
Investment Program. You're listening to the Fagan Financial Report on
Dennis Fagan. Sitting here with my son Aaron, as we
do every Sunday. Actually it's Friday morning right now. We've
got most of the week behind us, we got most
of the news behind us. We're recording this. As I
said just mentioned Friday morning. We got a lot to
talk about. You have the inauguration, you have stargame, you
(00:20):
have certain comments from President Trump. Not before the Worldwide
Economic Forum, but he was in Washington. The Worldwide and
Economic Form was in Davo, Switzerland. Talk a little bit
about that Netflix earnings, GE earnings, you know, and a
couple things I want to start with though before we
get to that, and they are usually we do a
broader type of a look at the market in the
(00:41):
second half and planning in the second half, but I'm
going to flip that a little bit and look at
that in the first half. We're definitely going to get
to g in Netflix, because I think that's kind of
an indication of where we are in the economy. But
there's a couple of things that I wanted to really
kind of get into initially air and one of the
things that I did not even show you you right, well, yeah, exactly,
(01:03):
you know, and I spoke with one of our clients
and you know, you know him, well now he's seventy four,
seventy three whatever, and you know I just talked about
you know, I think the further the higher the market goes,
the more and more input we get from clients.
Speaker 2 (01:23):
Right yeah, the more trades you see. You know, we
can see all of our clients trade. So the more
you see them trading, you know, their risk appetite increases.
And it's kind of irrelevant at what age people are.
Speaker 1 (01:36):
Why does the risk appetite increase after the market's going
up sixty percent over the past two years. I mean,
don't we know.
Speaker 2 (01:43):
I don't think a lot of people know the market's
been up sixty percent over the past four years, you know,
a two years, two years, you know, the past two years,
and you know, under Biden's presidency was up fifteen percent
year over year. You know what I think Trump did
a very very good job at to help he studied
for generations is convincing everyone that the act of me
was doing very poorly when in fact, it really wasn't
you know, that's just a fact.
Speaker 3 (02:04):
Uh.
Speaker 2 (02:05):
You know, unemployment was low. Uh, you know, prices had stabilized. Yeah,
they were up since COVID because of COVID. But you know,
the economy was doing was doing well.
Speaker 1 (02:21):
The Democrats were out of tune with the general populace
general populace once and you've seen it through other periods
in history, and we're seeing it really around the globe.
And I don't blame them, to be can there's there's
things that I don't blame the population for. I mean, uh,
and you say it all the time. Middle income the
middle America has been stagnant. Uh, they've actually lost real
(02:43):
purchasing power of the past three decades and and well
and Trump's looking to change that kind of boost the
middle America.
Speaker 2 (02:50):
On November sixth, Bernie Sanders Bernie Sanders treat it should
come as no surprise that a Democratic party which has
abandoned the working class people would find that the working
class people have a band have abandoned them. And I
think that was I think that was the well put
this election. I think it was really well put. You know,
how long have we been calling for uh, you know,
Nancy Pelosi and you know, all of these uh, all
(03:13):
of these congressmen and women to to ban uh you know,
stock train.
Speaker 3 (03:17):
And then then on Biden's way out, he says, you
know what.
Speaker 2 (03:19):
And I don't think people, I don't think senators should
be able to ban stock. It's like, you know, when
you stop listening, to stop listening to the people and
what they want, Yeah, they will abandon you.
Speaker 1 (03:28):
And so so, I mean President Trump is going to
there's a there's a wide He's casting a very wide net.
We have said for the past three or four months,
you know, pre election, post election that you know, obviously
we all know President Trump is not your traditional politician.
So the range of possible outcomes broadens out.
Speaker 3 (03:48):
Yeah.
Speaker 1 (03:48):
I mean, you know, I saw something from University of
Michigan consumer sentiment. Now, Democrats think inflation is going to
be high. Republicans think inflation is going to be low.
Before the election, Democrats sought inflation was going to be lower.
Republicans so did higher. We basically have you know, back
door sell We've taken corners, taken sides in the ring,
(04:11):
and that's what we have now as a country, and
that's probably how we're going to be for the foreseeable future.
So so here we go. What's good about President Trump.
What's good for the stock market is you're going to
see a lot less regulation. We'll see how that plays
out over the intermediate longer term, but there's a lot
(04:31):
more risk appetite for investors right now.
Speaker 2 (04:34):
He's kind of partnered up with these technology billionaires that
were kind of in the front row of his inauguration.
We saw we're going to see a lower tax rate
for people making over three hundred and sixty thousand dollars,
so you know, that should be good for the stock
market as well. So you know, I think that, you know,
the stock market is in good shape right now. I
think we're seeing a lot of AI infrastructure spending. I
(04:57):
think we're going to continue to see that. We're not
seeing crazy evaluations for technology, larger cap technology, which is
you know, a good percentage of the S and P
five hundred, So I think it. Yeah, the stock market
is is is prime to do fairly well.
Speaker 1 (05:14):
It's on firm footing. Yeah, that's what I think. And
I think as an investment person who manages together we
are company manages over eight hundred million dollars it's a
it's a man. It's a question of what's the downside.
And I think the downside at this point in time
is somewhat limited. You know. I think that because of
the risk appetite, because of positive investors sentiment, because of
(05:36):
the policies that President Trump is putting in place, the
market should do well. How well you know, that remains
to be seen. But if the downside is limited, the
upside will take care of itself. And we've always said that.
A couple of things though, before I before we get
get into the we do want to circle back to
that seventy four year old in the conversation that we
(06:00):
who do you like today? Which is which is Friday?
Speaker 3 (06:03):
But I want the Commanders.
Speaker 2 (06:04):
You know who I'm talking to somebody that was in
uh oh Todd uh and you know Todd father, Todd father,
a fellow Giant fan. I'm like, you know, I kind
of want the Commanders to win the Super Bowl. I
know they're in the NFC East, But like I like
Jaden Jade and Daniels, I like, I like Terry McLaren.
Speaker 3 (06:25):
He's like one of my favorite players. He's on my
fantasy team. And you know, they got a likable group
of guys. Uh, what do you mean?
Speaker 1 (06:32):
They gotta like them? They're tolerable. The Giants are likable.
Everybody else is tolerable, and they.
Speaker 2 (06:37):
I don't like the Bills. Like there's something about the
Bills I just don't like. I know they're a New
York team, but their fans are annoying to me.
Speaker 1 (06:44):
Who do you want to win?
Speaker 3 (06:45):
I can't Bills or the Chiefs. The Bills. I wouldn't
mind seeing the Bills win, all right, So.
Speaker 1 (06:50):
Let's play this out. You both want the Commanders over
the Eagles.
Speaker 3 (06:53):
You want the okay?
Speaker 1 (06:53):
Yeah? Absolutely, yeah, The Eagles are my fourth. If they win,
I don't know. And then I'd like to see the
Bills beat the Chiefs. You know, but there's something about
the Chiefs that kind of it's impressed. It's impressive exactly,
So you hate to see that come to an end.
But nonetheless, I still like the Bills. Bills have never
(07:14):
won a Super Bowl, you know. I remember in the
eighties they were good with Jim Kelly. You know, I
think they went the four consecutive Super Bowls and lost
every one of them.
Speaker 2 (07:22):
Was your least favorite sports team in everything.
Speaker 3 (07:28):
High?
Speaker 1 (07:28):
Right, now the probably right now, the Eagles, I mean
just because the front of mine. You know, I would
say the Sixers too.
Speaker 2 (07:35):
I hate the Sixers, six or seven against the Sixers
every night. Philly fans are just a tough bunch. Is
going to the game today. I know Zach Harrison now
he's the producer here.
Speaker 1 (07:48):
So so we both want the Commanders. We both want
the Bills. If if the Eagles beat the Commanders and
the Chiefs beat the Bills, want you want the Chiefs
to beat the Eagles too. If the Bills beat the
Chiefs in the the Eagles beat the Commanders, who do
you want the Bills? Are the Eagles the Bills? Yeah?
Me too? Me too? So the Eagles are well yeah,
you know.
Speaker 2 (08:07):
I don't know, it goes Commander's Bills in the same tier. Yeah,
and then and then it goes Chiefs than Eagles. Okay,
you like, I wouldn't mind if the Chiefs won.
Speaker 1 (08:18):
But but you're like, if the if the Bills are
playing the Commanders, you want you want the Commander.
Speaker 3 (08:22):
I don't know.
Speaker 2 (08:23):
I'll know how you know nine times like how you
feel when you're watching a game.
Speaker 3 (08:27):
I don't know.
Speaker 1 (08:28):
All right, let's get back to this right, So, speaking
with so, speaking with this individual, and maybe it was
thirty or forty percent in the stock market, and he's
he gotten in and out of the market a little bit.
He had gotten in and out of the market a
little bit, and uh two or three times. And I
said to him, I said, you know, you just got
(08:50):
to be careful that. You know, you're not on some
sort of a yo yo up and down with with
your feelings being being basically dictated by where the market is.
At this point, you cannot change your allocation, uh, after
the market's been up sixty percent and expect to really
(09:10):
benefit from that. The time to change your allocation. You know,
you buy when there's blood in the streets, so to speak.
That's an old Wall Street adage. Buy when the fear
is greatest. And I think what we're seeing now to
was a certain extent. You know, we got some uh
bitcoins up tenfold. You know, we couldn't have given it away.
We held on to a lot of it for our clients.
But when bitcoin was low, we had we had calls, Hey,
(09:31):
get me out of bedcoin. This is garbage, you know,
Warren Buffet says this. Jamie Dimon says that, So, you know,
I just question investors to be careful that they are
now getting impatient. And we were talking a little bit.
Speaker 3 (09:46):
You know, I like with you.
Speaker 2 (09:47):
You know, I think I agree when you buy companies
like we're getting uh trade orders for from clients, you
want to buy them when you think that they won't
be around anymore. You don't want to buy them when
they've already been up from like you know, Palenteer from
twenty to eighty. Do I think Palenteer will be a
trillion dollar company one day?
Speaker 1 (10:04):
You've always said yeah?
Speaker 2 (10:05):
But I also think that you know, it's gone up
two hundred plus percent, so you know, yeah, even bitcoin,
you know now it passes one hundred thousand dollars. You know,
still I do still think it has room to run.
But you know, I think when when you're when you buy,
when you try to buy speculation, when you know, when
you when you're mixing speculation with investing, you take shots
when the market's.
Speaker 3 (10:26):
Down really not when the markets up really big.
Speaker 2 (10:28):
Because you know, as you said, I think a few
shows ago, you know, bitcoin yearly, you know, has averaged
like a seventy percent downturn. You know, so the probability
of that downturn goes up when this when you know
the stock or bitcoin is up so tremendously. You know, again,
we talk a lot about this too with with clients
in that you know, we're getting a lot of these
(10:50):
calls from sixty seventy seventy years old. When you know,
let's say you put two percent of your allocation in
bitcoin and and it doubles, you still only have four
percent of it. It's not going to change your life.
It's going to increase if the rest of your money
is in the S and P five hundred, it'll you'll
have outperformance of two percent, right.
Speaker 1 (11:10):
And right, and it increases your anxiety level. And that's
what I said to him as well. I said, look,
you know at this and look you know, I said.
He asked me what I thought, and I said, well,
what I always thought was like a sixty to forty
ratio between stocks and bonds. And to kind of sixty
percent stocks forty percent bonds, our growth and income portfolio
(11:30):
is fifty to seventy five percent in the market. We
stay there now. So the fact that when this individual
was thirty or forty percent in the market, that was
his call and we will certainly adhere to that because
of your money and we know it. But you know,
we stay within a range because nobody knows what the
market is going to do over the short term. So
don't get too frightened and get out when when when
things look bad. Don't get to you fork and get
(11:52):
in when when things look when things look good, because
there's also the fact of the matter is what you're
going to get into is probably the things that are moving.
We're talking about off the air, you know, off the
air before doing the show. It's hard to have. It's
hard to have adequate diversification means you're gonna have some
investments that aren't moving. You know, You've got some tactical
investments that you know are moving a lot, it seems like.
(12:13):
And you have like fundamental investments and I name them here,
like a turnaround like Boeing, Johnson and Johnson. We have
some end phase. You know, we have some schwab that's
really starting to hit on our still as you're on vacate.
Thanks for coming into I know you're on vacation. Make
the you said you just came in to make the
show a lot more interested.
Speaker 3 (12:30):
Than me doing it.
Speaker 1 (12:30):
Alone, right, so so so so you have you have
some things that aren't moving, and that's just the way
it goes. Uh, you know, otherwise you're gonna pick once
one stock or one fund that's a sector type of
an investment and let it go and and you don't
do that. So you need diversification. Diversification to me on
(12:51):
an individual security basis, especially on the stock size says,
you know, three or four industries, three or four companies
in each industry, and then and you want to go
down a little bit and make sure you have an
ETF in that industry as well, and then a broad
based ETF.
Speaker 2 (13:05):
You know, and then you know even in uh, you know,
it's uh like the like the correlation, the correlation core
efficient of how strongly two sectors are are are related
as you know, you know, you need to have some
sectors that aren't as don't have as a strong connection
to others because if you're wrong, you're kind of always
investing too if you are wrong, you know, you always
(13:27):
have to have that in the back of your head.
If you're an investor, you don't want to get too cocky.
You always have to think, hey, you know what if
I'm wrong about this, and you have to build a
portfolio for that as well, which means that you're gonna
have some some laggards in your portfolio, especially the older
you get, the more uh, you know, the closer yard
to retirement or you know, the distribution phase of your retirement.
Speaker 1 (13:46):
It's hard even to hold bonds now. You've got you've
got fixed income yielding four to half five percent right now,
and yet when the market's going up, Man, it's difficult
for the average investor, regardless of the rage, because people
tend to shun the thoughts of risk when the market's
doing well. And also, I think you know, people, you know,
(14:07):
this is our experience. I've been doing this forty years.
I've been doing this since nineteen eighty three, so this
is my forty second year in this business. Okay, you've
been in here since twenty eleven directly with us, so
this is your fourteenth year in this business. You have
your MBA, you know, so we know what we're talking about,
and we have loads of experience as to certainly the
mechanics of the market and the fundamentals of the market,
(14:30):
but also the emotions of the market. You don't get
away from this business and the emotions that I'm feeling
right now is President Trump is going to make everything
great for the market. And I think you said before,
you know, as we went on the air, right after
went on the air, that the market did find under
President Biden, it did find.
Speaker 2 (14:49):
Under person ye prior to that, and then you know,
get trumped at about you know, around the same Trevor thirteen.
Speaker 3 (14:54):
So very good, all.
Speaker 1 (14:55):
Right, so maybe things will get up better. Yeah, please
don't email us or don't call us at the office saying, well,
what about inflation. We realize that I will also say,
inflation has come down a lot. You know, maybe it'll
and it should continue to come down about from President Trump.
But one of my fears for the market over the
intermediate and longer term, because you know, we just said
we think the market's got limited downside. The upside will
(15:16):
take care of itself. One of my fears for the
market is like a stagflationaryan environment where tariffs do raise
the cost of things in addition to so some would say,
you know, tariffs are a one time increase in cost
and then costs should come down with the Department of
Government officials like that may very well be true. But
(15:37):
I think that the underlying under underlying all of that,
I think is inflation. Prices are rising at a faster
pace than they were six or seven years ago. Six
or seven years ago, the Fed at a very difficult
time getting inflation up to two percent. Now that I
think they're gonna have a difficult time getting inflation down
to two percent. So you have underlying you know.
Speaker 2 (15:58):
And you know, you know, on top of that, you
have the optimism from half of America now of wanting
to get more into the market. You're not really seeing
you know, people.
Speaker 3 (16:07):
Wanting to get out of the market right now.
Speaker 2 (16:09):
Just from a you know, personal experience, You're you're seeing
more people wanted to get into the market and than
I think yesterday, you know, Trump called for demanding interest
rates go down, which is also inflation.
Speaker 1 (16:17):
Are well right, Fed meets next week. Yeah, there's definitely inflation.
They the FED meets next week. And you know, I
think maybe President Trump is just jaw boning Jerome Pile
and the rest of the Fed. You know, we don't know,
and I think it was you know, you if you're
listening out there, you might say, well, he should inflation
should go down. President Trump knows more of that. We're
not debating that, okay, whether he does or doesn't just
historically or we're debating is the fact that you know,
(16:39):
you know, what's the ultimate impact of the market if
if Jerome pile does you know, cave to President Trump,
what's going to happen to to you just said it?
Inflation's more likely if interest rates go down, because the
demand for goods and services will go up, you know.
So you know, and I haven't heard anything about the
housing market nothing now houses are five five hundred and
(17:02):
some one thousand dollars.
Speaker 2 (17:03):
Anything about the price of food as well. You know,
we're talking about oil. You know, gas is about two
eighty a barrel, and I'm not positive. I'm not sure
why it needs you know, that's pretty cheap, right so
I'm not sure why you know, OPEC needs to lower
their prices right now? That these aren't these just aren't
things that you know, I would focus on if I
was President Trump with you know, bringing back middle of
(17:23):
the middle class.
Speaker 1 (17:24):
And President Trump is transactional. I mean, that's that's the
bottom line, you know. And uh, I think we'll see,
we'll see how it plays out, you know, Like I said,
we we are, we are always guarded regardless regardless of
who's president. I don't think you know some of it.
And I think about that myself. I'm very critical of
myself and my thought processes. I watch a lot of stuff.
I read a lot of information that's broad and also
(17:46):
a lot of information pertaining to the market. I know
you do as well. And no, we didn't talk this
animated this in this in such an animated fashion about
President Biden, but for good reason, right you know, he
was kind of there. You know, President Trump is not there.
He's front and center. Yeah, and things are going to change,
so we gotta be we gotta we we we we
we're fiduciary responsible for our clients money and well being.
(18:09):
And we and we and we take that very serious.
Speaker 2 (18:11):
And you know, I think as we were saying, you know,
with with with with Trump in the stock market, the
stock market hates when there's unknown variables out there, and
Trump brings a lot of unknown variables to the table.
So that's kind of the overriding theme is you know,
some policies could be good, Some policies could be good,
we just don't know yet.
Speaker 1 (18:32):
Right right now, it's lower regulations vibe in the in
the whole stargate things right now.
Speaker 2 (18:36):
Yeah, you know, saying, you know, gonna have a five
hundred million million dollar investments, but that doesn't bring revenue
to the table for these companies. This is still you know,
the the these projects are still you know, kind of
in school. They haven't graduated to the workforce yet where
they have to you know, start earning money for people.
So I'm a little yeah, I guess I'm just a
little bit skeptical of of uh, I.
Speaker 3 (18:56):
Guess a melt up here and too, uh you're you're afraid. Yeah,
I'm afraid that.
Speaker 2 (19:02):
You know, although it could be good temporarily, a meltop,
you know, could not be good for the long term,
you know, for the stock market.
Speaker 1 (19:10):
You know. The other thing too, is I just to
get into the tariffs a little bit. You know, we
get I think about four million barrels a day of
oil from Canada. Well, just drill, baby, drill here. We
haven't built a refiner in fifty years. Yeah, so you know,
we may have we may be able to drill more,
we just can't refine it. And the refineries that we
have can't can't satisfy all our needs as a nation
(19:33):
in the different capacities. You know, jet fuel, diesel fuel, light,
oil for automobiles, oil for your home. So we don't
have the refining we need Canadian oil. So what you're
doing there, you're just you know, so I think we
just got to take take a chill pill and be careful, you.
Speaker 2 (19:50):
Know that said you know, you know Trump did say,
you know, if China was gonna have fifty percent tariffs,
sixty percent tariffs, and you know his his current plan
was ten percent. So I think that is better for
you know, I guess for the relationship with with with China.
You know, it's not something that he ran on, but
you know, at ten percent tariff would be better for
(20:11):
you know, the economy and uh, you know, the consumer.
So I think a lot of this, as you were saying,
could be job owning. But you know, we're kind of
in the yes, let's see what happens.
Speaker 1 (20:20):
There's a lot of good things going on really economically.
President Trump has mentioned a lot of good things, uh,
you know, namely hoping to you know, get interest rates down,
hoping to get inflation down, certainly, securing the border. Securing
the border, Uh, may may be somewhat inflationary, you know,
because if you think of lots of the jobs that
are that illegal immigrants are doing, our jobs that are
(20:44):
going to be difficult to replace at that at that
paid level. So so so there's there's a lot going
on now, and you could tell we're like, oh, this
has been a very very the market's been good. I
mean since you know, I can't really.
Speaker 2 (20:55):
You know, that's you know, and I know it's just
the beginning of Trump's presidency, but you know, I think
you know, if you if you if we have fifty
minutes to talk every every week, we could just be
talking about what Trump has said and how it could
impact the economy. Right, So maybe we're just front loading
this a little bit with you know kind of point
you know, his you know, multiple multiple, you know, executive
(21:17):
orders that we're just kind of trying to play, Hey,
you know, let's see what happens if these things do
come to fruition. But you know, I think it's too
early to to tell on you know, what he's going.
Speaker 1 (21:28):
To But the enthusiasm from the business community is there,
and that's the raising of animal spirits is there. The
potential the lower regulation will will allow for more consolidation.
It will allow for more innovation. So I think, I
think those are all good things, but I did want
to so I started this out with and it kind
(21:48):
of you had you talked about somebody buying bitcoin in
a doubling and the influence on someone's portfolio being two
percent if they if they start out with two percent,
and by all means you know, when you deal in
a speculative asset, you want to go with two three
percent of your your account. We often say, you know
ten securities of speculative do you you have one hundred
(22:09):
percent of Let's say, do you take one hundred percent
of your your equity exposure? You know, you know, get
twelve stocks at five percent, ten stocks at three percent,
and five stocks at two percent something like that, where
you have one hundred percent of your account in the
stock market, so you know, ten stocks at six percent,
you know, all the stalwarts of the market, the Amazons,
(22:30):
the Walmarts, the you know Merks, those of the world
or Bristol Myers, regeneron. You go down to that next
level of ten stocks at three percent, so you got
sixty percent in the in the in the blue chest,
ten stocks at three percent, would be you know, and
then then five to two you would say, what, No,
I thought.
Speaker 3 (22:47):
You were going to talk about healthcare and those stocks.
Speaker 2 (22:49):
You know, I think there's a lot of speculation that
you're still speculation going on with with what RFK is
going to prioritize.
Speaker 1 (22:55):
Yeah, so anyways, we got about a minute to go
out of the break. You know, if you if you ratchet,
and this is what this is kind of referring back
we will to I'll actually we'll do it right now,
referring back to the bitcoin exposure. If you if you're
lay for an appointment and you you're going sixty miles
and I say, oh my gosh, it's gonna be five
minutes late, and you drive eighty miles an hour for
(23:18):
eight minutes, you're gonna get one minute early. And I
don't think people realize that from from driving eighty miles
an hour or going seventy where the speed limit is
in the South quite often too, eighty over the course
of an hour, you're gonna save you know, basically, you know,
ten minutes of time. Is that is that really going
to be worth it?
Speaker 3 (23:38):
You know?
Speaker 1 (23:39):
So that's that's the thing that you really want to
focus on that is the risk worth the reward right.
Speaker 2 (23:43):
Now, The longer you do it, the better chance you
could get a ticket right right, right, right.
Speaker 1 (23:47):
Right right now. It's ten thirty on the station depend
upon for news, weather and information. News took a ten
and one to three to one. W g Y, Good morning,
and welcome back to the second half hour of the
Capital District's Money and Investment program. You're listening to the
fague and financial reporting. You know, money and investing can
be a little bit broader than we'd like sometime, you
know what I mean. And I think that that's kind
of you know, just Kim and we were talking a
(24:07):
little bit about you know during the break that she said,
you know, I hope we're coming across right. You know,
we just see it as just it's it's more encompassing now,
you know. You you you know, you pull in uh
Sunder Pachai from Google. You're pulling Tim Cook from Apple,
You're pulling Jeff Bezos from Amazon, You're pulling the individual
from TikTok and I don't know his name. You take
(24:29):
Elon Muskin there, and that's the news that we're getting
now is delivered from these platforms that are really not regulated.
So we just got to be you know, you know,
how does how is this going to impact the market? Now?
Are the tariffs going to impact the market? How are
you know President Trump's you know, pushing on you know,
our allies and foes alike, going to impact the market.
(24:51):
You know what does that mean for the economy? What
does you know? So so these are all things that
you really don't have and and those listeners to our show,
I have no We've been saying that for for certainly,
like I said three or four months now, that this
is not your traditional president because so things are going
to be just a little more. It's gonna be a
little bit broader, It's you know, it's gonna be you know,
a little bit different, you know that said Aaron I.
(25:13):
You know, we are looking at the returns. Uh, you
know coming into Friday. You know, over the past week
or so, the S and P five hundred closed Thursday
up at an all time record US total market. The
next closed at an all time record NASDAC Russell to
or not Russell, the Dow Jones and Dustry average with
an earshot of an all time record. Year to date,
(25:34):
you have the S and P five hundred up four percent,
and Nazuk up just a shy of four percent to
DOWBT four point seventy five percent. The US total market
ended up a four point twenty six percent, and then
Russell two thousand up three point seven nine percent. So
you've had pretty much a broad rally that that is
helping the market. Now, let's dive into some of the
news that was released this this uh this past week,
(25:56):
President Trump along with Masa Yoshi's son from SoftBank, Sam Altman,
CEO of open Ai, and Oracle co founder Larry Ellison,
we own some Oracle, not enough about seventeen thousand shares
for a clinch. You never own enough of it when
it's going up. Announced the joint venture that's going to
(26:18):
get it, you know, up to five hundred billion dollars
over the next four years of project that's basically going
to build data centers to hasten the development of artificial
intelligent infrastructure in the United States and make the United
States a hub.
Speaker 2 (26:36):
I think that's I think this is you know great.
I think it's it's important, you know. I think Trump
set of AI that you know, what we want to
do is we want to keep it in this country.
You know, I think with Taiwan semi producing so many
of the nation's chips, I want to say ninety percent
of the world's chips. I think that moving on to
this next phase of technology and artificial intelligence, I think
(26:57):
data center and AI infrastructure is key to you know,
national security as well as you know, hopefully building up
more jobs in this country, if you know, if we
can start producing chips here anymore. We didn't really see
anything with uh, you know, with the production of chips
just uh, just you know, just data centers. You know,
(27:20):
I think Virginia counts for about twenty nine the Virginia's
energy is about twenty nine percent from data center, So
you know, this could be I think this should be
a good thing for the country.
Speaker 1 (27:33):
You know.
Speaker 2 (27:33):
Yeah, what what I get worried about is, you know,
a meltop in artificial intelligence names, which you know kind
of trickles over to you know, the Googles and the larger.
Speaker 3 (27:42):
Cap tech.
Speaker 2 (27:44):
And you see, you know, sky high valuation. So I
think that's the biggest issue that we could face. But
you know, you'd argue it's a good issue.
Speaker 1 (27:54):
It is a good issue. You know, it's a good
it's a good problem to have if that would occur, uh,
you know, And I was listening to an interview with
Mark Benioff, the CEO of Salesforce, and you know, if
you look at population and I forget who said this,
but it was in the past week or so, one
of the world's biggest problems is a lack of population
(28:14):
growth in the developed nations, you know, in Western Europe
and China and the Uyes. And that we do have
some population growth in that, you know, that could be
an issue for I think towards and slack. Something he
put out and he's from Apollo, said that the US
has a and I don't think people realize that when
they talk about immigration, and I think everybody's you know, everybody,
but I think most people are in favor of regulated
(28:36):
immigration as I am, you know, and I assume you
are as well.
Speaker 2 (28:40):
There hasn't been any immigration or form since the nineteen eighties.
So you know, we need a plan, like I mean,
like anything in life, you need to plan. And I
think that's you know, that's exactly what we need. You know.
I guess that said about in about fifteen years, we're
going to have about thirteen percent less people turning eight
team than we do today. So if we see a
(29:03):
declining population, like like, look what South Korea is going
through right now. You know you don't want to this.
It's not a problem that's fixed overnight. You know, South
Korea can't just fix this problem. You know, we need
people to work to keep you know, prices down. Well,
you also need your costs down, which is sad to say,
(29:24):
but we also need spenders here, and.
Speaker 1 (29:26):
You also need innovation. Innovation comes from the twenties and
thirty years old. Yeah, but I think what's the way.
What Mark Benioff was saying is that this this, these
today CEOs are more than likely the last who will
manage a workforce of only human beings. And I think
that's very interesting. I was, I listened. I was listening
to him, and he was talking about mixing up and
(29:49):
then you know, we all complain about it and so
hopefully it's better. But you know, when you're when you're
looking for service, you're going to get agents quote unquote,
and he refers to them as ai AI artificial intelligence
agents coupled with human beings. Yeah, and I think that.
Speaker 2 (30:05):
You'll see that, right, I mean, I think you'll see
that in a lot of fields. I think if you
start seeing driverless vehicles, you know, that doesn't mean that
you know, someone won't be behind the wheel making sure
everything's going okay from a computer perspective. And uh, so
you know, I know when when when you're facing things
like autonomy, I think we'll see industries that haven't even
(30:26):
been created yet, with which will then in turn create jobs.
Speaker 1 (30:33):
I agree. So so this this AI, and I think
it's coming quicker than most would anticipate. This AI infrastructure,
Uh back by Oracle open as Elon Musk.
Speaker 2 (30:44):
Was not already used to crappy service from like large
cors anyway.
Speaker 1 (30:49):
That's true. Uh, people are always surprised when they can
get a human being when they call us.
Speaker 3 (30:53):
Yeah, I know, Yeah, that's what I know.
Speaker 2 (30:55):
I said, you know, I don't even want to It's
hard to say this on the radio, but man, you know,
the how happy people get when you return their call
and pick up when they call is sad with how
you know when thinking about how customer service has gone
true lately.
Speaker 1 (31:12):
So the so Stargate project uh looks to you know,
accumulate up to five hundred billion dollars investments over the
next few years from several different companies, not the least
of which would be soft Bank, Open Ai and Oracle.
There was some discussion must kind of pooh pooh the
fact that this this money could be gathered together. He
(31:33):
was not at the at the press release. Uh so,
so we'll see how that goes down there.
Speaker 2 (31:39):
Uh.
Speaker 1 (31:39):
I know that who's the CEO of I can't believe
his name is escaping me? Of Microsoft. He was saying, hey,
we got eighty billion dollars. It's right. Uh, you know
that's available. So I think I think these are really
good things. I also think, you know, if you look
(32:00):
at the performance that we've seen year to date, if
you look at select sector spiders on a year to
day basis, you have industrials picking up quite a bit
of seven percent, in fact, seven point five two percent
through Thursday, trailing just energy. Energy has lost a couple
percent this past week. You know, you saw great earnings
(32:21):
from Caterpillar, great earnings from Deer, uh these companies. And
you also look at small scale nuclear facilities that are
probably going to be going up. Those all have to
be built. So industrials, if you look at just if
you in the etfc X l I I think merits
a serious look here.
Speaker 2 (32:38):
People have been talking about infrastructure spending for a decade,
so you know it would be nice to see, uh,
you know, some infrastructure spending which you know, in turn
would you know, help help the middle class and build
up some jobs there.
Speaker 1 (32:49):
So so I think you got to continue to pay
attention that Ge had earnings this past week. They were
they were, they were baffo. They raised their dividends, it
raised their divice fet What do you think bafo me.
Speaker 2 (33:00):
Baff I've never you know, I shared an office. I've
never heard baffo before. Well, you know, go on.
Speaker 1 (33:05):
Do you think their earnings were bad? No?
Speaker 3 (33:07):
So they were baff they were baffo, they were where's
that from? Did you make it up?
Speaker 1 (33:13):
No? No, everybody says it bo it's everyone says it
more impressive, make up a word deep and unrestrained. It's
more of a laugh. M. Maybe maybe that's not. The
finale is a genuine baffle. It's just blowout, that's what.
So they had very goarnings or stock surge. I think
so the caterplayers they mentioned, look at Deer, look at
(33:34):
GEMM right now, No, no, three high three year in
the baffle mode. GM had good earnings uh GM or
g CEO Larry Cope said, Gero Space delivered a strong
finish the twenty twenty four given robust demand for services
and products, with fourth quote orders of forty six percent,
EPs more than doubling, and free cash flow increasing over
(33:56):
twenty percent of performance. Capped off a monumental first year
as a standalone company, and they spun off Healthcare and
they spun off for Nova with one point seven billion
of profit growth and one point three billion of free
cash growth. Looking to twenty twenty five, we expect double
digital revenue and EPs growth with greater than one hundred
percent free cash flow conversion. So that's that's that's a
huge plus four ge And I think it's just kind
(34:18):
of emphasizes or puts in, you know, puts the underlines
the strong kind of performance that I think we're going
to continue to see from from industrial companies, you know too.
So then I guess what I would do. The second
next thing is, you know News of the week. We
touched on Stargate, touched on g is Netflix there.
Speaker 2 (34:37):
Baffo Baffo again. You know, stock was up ten plus percent.
Sure Pass three hundred million subs paid subscribers three hundred
and one three oh one point sixty three paid subscribers,
Revenue ten point two five billion verse ten point one one.
You know, earnings for share for twenty seven verse four
twenty just really monster earnings all around, you know stop uh,
(35:01):
you know, revenue in the fourth quarter jump sixteen percent
year over year. You know, they obviously they you know,
they have first mover advantage. They have, you know, really
the best in the business when it comes to content.
Right now, you could you know, you could argue Apple TV,
but you know, the amount of content and the quality
of content is there. They've introduced you know that Jake
Paul fight. I think there was a football game on Netflix.
(35:24):
So they've done a good job, you know, expanding their
you know, catalog. What always makes me nervous about a
company like Netflix. We do own Netflix for some class,
you know, it for yourself. I think we own it
for maybe a family member or two. But you know
what makes me nervous about Netflix is, you know, what's
the end game there is? Yeah, So like you know,
(35:46):
you're you're what's the end game for anything? I know,
I know, but it's like it's just almost like one
of those. So you just keep raising, raising prices, raising prices,
raising prices raising. You know, eventually, you know, eventually the
means will stop with a company like this, because right now,
how do you innovate outside of.
Speaker 1 (36:07):
A couple of things.
Speaker 3 (36:07):
Wonder what they're doing.
Speaker 1 (36:08):
There are four hundred billion dollar company, you know, Apple's
you know, eight nine times that at three point six
trillion probably revenue, right, I'm not saying that, but I'm
saying they've got room to grow. They've got one off
sports like the Jake Paul Tyson fake. They've got one
of sports all across you know. Obviously they have great programming.
Speaker 3 (36:27):
Yes, you could introduce gaming.
Speaker 2 (36:28):
Who knows what TV is going to be like in
five or ten years.
Speaker 1 (36:31):
Three hundred million paid memberships, it's an eight billion membership world,
or maybe maybe it's a quarter of that when you
think of you know, families alike. So they've got they've
got a lot of room to grow. Now you look
at that, but you also look at valuation. I think
they're up ten percent on Wednesday or so when they
announced starting they followed up with a slight game on Thursday.
(36:53):
So look a little retrenchment here would be good. But
if they pulled back, you know, I think with those
baffo earnings, I think that uh, you know, they certainly their.
Speaker 3 (37:04):
Content quality is.
Speaker 2 (37:09):
Even their their app is so much more easily navigating, navigatable.
Speaker 3 (37:15):
Is that where so you know.
Speaker 2 (37:20):
It's the best of the best.
Speaker 3 (37:24):
Yeah, I guess that's all I can say.
Speaker 1 (37:26):
So. And then the final piece of information from A
from A I guess current events is that the Bank
of Japan, the b O J.
Speaker 3 (37:35):
You know, you saw them hike rates again.
Speaker 2 (37:36):
It looks like that carryover trade is gone because the
market kind of just did nothing when you know when
they raised raids. So you know, it should be a
good sign, you know, for Japan and the Japanese economy.
There you know, they're a pretty large percentage of the
VT which the which is the Vanguard World Index. It's
(37:59):
more than what people but would think, you know, being
in being an island.
Speaker 3 (38:04):
What is it.
Speaker 2 (38:05):
It's five point five to nine percent, you know, I'm sorry,
that's that's a little bit higher than I think what
people would think with with with the with the world
total market, is it more than it's more than China,
you know, so it's five point nine five nine percent.
China is two point nine one percent, so you know,
it's a very important economy. A lot of innovation happens
(38:25):
in Japan, robotics technology, you know, Toyota is there obviously,
so and I think what we're seeing a little bit
now is uh you know, you know Masiyoshi Sun I
think is the richest, uh richest person in Japan, right, Yeah,
So you know, I think maybe we'll see some you know,
closer relationships with with with Japan.
Speaker 1 (38:46):
And I think some of the some of the move
is just to stem the strength of the dollar. The
dollar has been strengthening, and you know when that happens,
you know, the US is going to attract more investment.
Uh the still, I think they think they just when
it's strengthening, so you have more money, Yeah, get a dollar.
So now you've got there, their equivalent of the federal
(39:07):
funds rate at point five percent, it's their highest in
sixteen or seventeen years since October of O eight.
Speaker 3 (39:13):
Increase their buying power.
Speaker 1 (39:15):
Well, we'll see, we'll see, we'll see how that goes.
What else do you have there from a from a
topical perspective, ed, you know, I just think you've you've
got a market really on on on on the loose,
so to speak.
Speaker 2 (39:27):
You know, and you know, we don't talk a lot
on this show about fixed income, you know, no, no,
I wouldn't. But you know, right now you're seeing the
tenure at four point six four I think a top
that around around four point eight, four point eight, almost
four point nine or so. So you're seeing some stabilization
in the tenure, which means that you know, in my opinion,
(39:47):
you're seeing a little bit uh less skepticism out there,
uh so, which I think is a good sign. You know,
it's it's a good sign for where people think in
FLA is going, I guess would be the best way
to put it. But you know, a note from Ben
Carson is it time to lack in five percent yields?
(40:08):
And I think so, you know, I think that I
think this is a very very fair.
Speaker 3 (40:15):
Fair rate.
Speaker 2 (40:15):
I think it's it'll it'll help your portfolio, It'll make
your portfolio work, It'll be great for distributions. I think
the you know, what you still got out there is
the you know idea that you know, if Trump just
starts lowering rates, if he if he's pressures people into
lowering rates that you know, it could make inflation go
up again, which would put the FED in a precarious
(40:37):
situation a little bit, which would then kind of in
turn make the ten year rise if if, if inflation
expectations are start to seep into the you know people's
you know minds again.
Speaker 3 (40:50):
So, but you know, I think this is a fair rate.
Speaker 2 (40:54):
I think we're going to hover. You know, we've been
talking in the like four point three to five area
for the foreseeable future, and you know, I think that
that is a you know, great for let's say seventy five,
twenty five or sixty forty portfolio.
Speaker 1 (41:09):
You know, So I think, you know, what do you
do as an investor with that? You know? Uh? And
I when when you saw that article? Is it time
to lock in five percent yields? Yes? Okay, yes it's
time to lock in five percent yields. But it's time
to kind of wade into locking in five percent yields.
I think it's it's whether you're talking about the equity
(41:30):
side or fixed income side. It's arrogant to fill in
an entire position all at once, you know.
Speaker 2 (41:36):
Yeah, just like on the stock side, you know, you
never want to be too, that's what is that what
you said?
Speaker 1 (41:41):
Well, yeah, no, no, no.
Speaker 2 (41:43):
And I think that's important. I don't think you want
to get too confident in any investment decision that you make.
Speaker 3 (41:48):
And yeah, yeah, you know, yeah, yeah, I think a
good way to do that.
Speaker 2 (41:52):
And I don't know if this is where you were
going to be, you know, laddering bonds, laddering bond ETFs
in your portfolio. And that's usually the best way to
go about these things.
Speaker 1 (42:01):
So what, uh we've been using uh different forms of
fixed incomes SERI.
Speaker 3 (42:08):
Treasuries you've been using.
Speaker 2 (42:10):
You know, there's said E T S with that maturity
dates in specific years ib T it's like I b
T J I T T H I b T O
I b T L you know.
Speaker 3 (42:21):
So yeah, so the H specific years. Yeah, I don't
know the.
Speaker 1 (42:25):
Yeah, I just looked it up while you were talking.
The H comes due, the H comes do. So they
buy treasuries that come doing twenty seven. Ib T J
buys treasuries that come doing twenty in twenty twenty nine,
ib t L buys treasuries that come do in two
thousand and thirty one. Okay, and then I B T
O buys treasuries that come do in two thousand and
thirty three. So you've got treasure that come doing two years,
(42:47):
four years, six years, and eight years, and so that
there's an e t F and they're comprised of those treasuries.
Uh so we like those at this point. I think
also on the fixed income CIBE, we we've been using
the S like Aaron you said, there's some treasury notes.
We've been using simple BIL, which is one to three
(43:07):
month t BUIL.
Speaker 2 (43:08):
For which I think deserves a five ten percent allocation
in people's portfolios. Five ten percent. You know, let's say
you have fifty percent in the market, I would put
ten percent fifty percent fixed income. You know, just to
make matters easy, I would put ten percent of my
money in b I L. Nothing overnight is going to
be like, hey, I need to get my money.
Speaker 3 (43:26):
Out of there.
Speaker 2 (43:28):
You know, if inflation does start to come down in
that bi L and the Fed Fed starts cutting rates,
then you can, you know, transition to maybe more intermediate
data assets. But you know, with the BIL, you know,
net of it's expense ratio, it's it's expens ratio is
only zero point one four percent, and it's thirty day ses.
Speaker 3 (43:48):
You know, it's distribution.
Speaker 2 (43:49):
You know, this five point one percent thirty day se
sealed is four point two four percent.
Speaker 1 (43:54):
So kind of a parking space, Yeah, kind of a
parking space for money. And that's not a bad idea again,
hearkening back to and I think that's where that's where
you are going to kind of see if there's any
issues with with President Trump's tariffs. Yeah, I agree, yields
(44:17):
will go up.
Speaker 2 (44:19):
And I think that ten year is the key signal
for how investors actually think. So I think we're going
to continue to keep.
Speaker 3 (44:26):
An eye on that.
Speaker 2 (44:27):
And you know, although you know, Trump has a lot
of rhetoric about getting rates down, which would be inflationary.
You know, the tenure hasn't moved much. You know, it's
actually moved down since since he was elected. I believe,
well it's at least moved down since it's high. So,
you know, I think it's a good sign with you know,
maybe a lot of you know, Trump speak has just
(44:47):
been rhetoric.
Speaker 1 (44:48):
A ten year right now is sitting at four sixty
five if you look at from the day of his
election on November fifth. That's a good question. Actually, I'm
actually answered, and what has the what has the tenure
done since the day since November fifth? I am going
to look it up and give our audience who's waiting,
(45:09):
you know, people are probably pulling over in the side
of the road to waiting for this information.
Speaker 3 (45:13):
I'm curious though too.
Speaker 1 (45:16):
It is from twenty six, twenty six to four six,
so it's up. Why would it go out?
Speaker 3 (45:22):
Because yeah, because.
Speaker 1 (45:23):
Tariffs, I think would be a question. And also President
Trump uh did not really campaign on he campaign on
the dose thing, but not really reigning in government spending
on other front. So so we'll see in the eighty
years trading days, in the eighty trading days fining the
Federal Open Market Committee's first rate cut on nine seventeen
(45:44):
through one thirteen, the yield on the tenure has gone up.
And since nineteen sixty twenty four their periods saw such
a high frequency of daily increases in the same span
that was sixty nine, eighty four, six and twenty twenty one.
Not just some things to pay attention to other other
fixed income products that we're using now. So we gave
you for U.
Speaker 2 (46:05):
C O N is an unconstrained I think the economy
is still in good shape, so you can go out
a little bit on the risk spectrum. U C O
N is first trust unconstrained bond fund, So that's a
little bit where we're going. JP Morgan has a core
bond fund, which I think is great at base for
someone's portfolio.
Speaker 1 (46:22):
They have a they have a I'm sorry interrupt, they
have a mutual fund, and they have a JP LS
I think is their symbol for their JP Morgan O
n I A and they have j cp B has
two good UH bond funds core bond funds for for
your portfolio. Also, Loomis Sales bond has done pretty well,
(46:44):
has a good yield. LSB d X or l s
b r x I think are two good areas to play.
LSB yeah b d x. Did the yield on that
or the Yeah, the yield on that is five point
four eight percent. They moved down the credit quality a
little bit. UH. They've had very consistent management, so I
think that's something that if you're looking for fixed them
(47:07):
coming you want to take a look at. Certainly, he
can ladder treasuries. As we mentioned individual securities, the CDs
difference between a CD and his treasuries treasuries are non
taxible the state level, and a CD is not, so
CD is taxible to the state level. So just some
things that you want to look for there. So I
thinks as we move into the president the presidency of
(47:29):
the administration of President Trump, let's kind of keep our
eyes and ears out for more more clarification on these policies.
I think right now he's kind of setting setting the
stage for generally speaking, what he wants to accomplish, you know,
how he wants to go about it. I think he's
kind of you know, let's say he's broadcasting to all
(47:49):
the all countries. This is kind of what we're going
to do. You know, get yourself ready. We'll becoming you
at some point in time, and we want to have
some dialogue there, you know. So, so I think you're
going to see more and more of that, initially with
Canada and Mexico and then moving there probably to the
China and the West and the Middle East. You know.
(48:11):
So a lot of things going on, a lot of
exciting It's an exciting time for the market, and we
are going to be there. If you have any questions,
feel free to give us a call during the week.
If you want some input, if you want our opinion,
if you want. We have been in business since nineteen
eighty nine, so we are fiduciary, so we work one
hundred percent on a feed basis. So we'd like the
opportunity to help with you with your money. Give us.
(48:33):
Check us down the web at fagan asaid dot com,
like us on Facebook, or give us called five point four.
Enjoy the game today. Take care,
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