The Fagan Financial Report

February 16th, 2025

Episode Transcript

Speaker 1 (00:00):
Good morning, and welcome to the Capital District Money and
Investment Program. You were listening to the Fagan financial report.
Dennis Fagan's sitting here with my son Aaron, as we
do every Sunday right here, even on these snowy, wet, dreary. Yeah,
we're go get a little a little bit of everything today.

Speaker 2 (00:17):
It's disgusting out. So me and my friends are talking,
you know, with shoveling right when when you know as
storms coming.

Speaker 1 (00:25):
You know you're getting older.

Speaker 2 (00:27):
When you know a storm's coming, do you put salt
down before you shovel?

Speaker 1 (00:35):
Put salt down? Period?

Speaker 2 (00:36):
You don't put What about the postal workers? You're gonna
kill the delivery drivers?

Speaker 1 (00:40):
I was uh, I guess said micro spikes.

Speaker 2 (00:43):
On because that's because so many people are inconsiderate. That's
not true.

Speaker 1 (00:48):
It is killow your grass washes into the road, you
put salt down? Yeah, you're really You don't never not
in my driveway.

Speaker 2 (00:59):
Most people must work at work. We do on my
French fries, you know.

Speaker 1 (01:06):
Anyways, did you ever see the Saturday fifty to fiftieth
anniversary of Saturday and Live.

Speaker 2 (01:13):
Yeah, Doug's been talking about it all week, So.

Speaker 1 (01:14):
You're talking nineteen seventy five. I remember that Mom and
I used to watch Saturday Live together when we weren't
even dating. We were friends in high school and then
we started being in college and I'd go to her house,
she'd go to my house, and I think she missed
one time, so I kicked her out of the Saturday
Live Club. Really just fooling around, yeah, but there was
a skit on there that reminded me of like today.

(01:37):
You know, you're drinking coffee. I'm drinking coffee, but there's
the two women, and I forget this. This isn't live
or else. I asked people to call in that are
my age, are a little bit younger, older that they
sit there. They're really soft and peaceful, and I think
they talk about those types of things too, like contemplation
and meditation, like what they said. They always start off

(01:58):
with here, I am sitting here looking out my window
at the birds, drinking hot coco. So but this is
that type of day. It is outside or probably not.

Speaker 2 (02:12):
You know, he doesn't love the cold. He doesn't, but
I want to get him used to it, like, you know,
we try to go outside, but I don't know, it's pretty,
it's it's not good snow in that like you don't
go into it, you kind of sit on top of
it then you then, So I think that's what we'll
probably do. You got him that great snow suit. You
got him two snowsuits. Yeah, one fits in. It fits

(02:34):
in him. Really went up to graft and in it,
uh a few weeks ago. So yeah, we'll probably just
to get outside and do something too. But yeah, you
know it's speaking of coffee. You haven't been at work,
you know, in a little vacation since we signed Peter Alonzo.
I've met Peed Alonzo cup on the Chris Game. Me.
It's a polar bear, uh, you know, in a in

(02:54):
a Mets uniform, very very much. So he brings good vibes,
you know, good club house guy. I think I'll step up,
you know, reduce the strikeouts.

Speaker 1 (03:05):
You know.

Speaker 2 (03:05):
I think it'll be a little bit easier for him
to hit because they won't have to pitch around him. So,
you know, we need someone like that, We.

Speaker 1 (03:12):
Do it more. You know, he's he's on a he
can he can opt out after this year though its
some like a free agent again. Though, doesn't that put
stress on him again? But but maybe not because if
he doesn't opt out, it's two years.

Speaker 2 (03:24):
So I think he wants to stay in New York.
I mean, I think what we saw too is he's yeah,
it's a it's a pretty unique market that will actually
take him. You know, he wants a lot and people
aren't really going to go more than two or three
years with someone like him just from a you know,
he's a bigger guy, you know, who knows with fitness

(03:45):
issues things like that. But he plays a lot of games.

Speaker 1 (03:48):
And he's a decent fielder.

Speaker 2 (03:49):
He's gotten better. I mean from two years ago, he's
gotten ten times better.

Speaker 1 (03:53):
So he's and he had thirty four homers granted, his
powers going down, power numbers going No, we'll see this year.

Speaker 2 (03:59):
Look, you know, what do you say when is pictures
and Catchers? Our first game.

Speaker 1 (04:06):
First, the first spring season game is is Saturday down
to Saint Lucy. Yeah, So anyways, Uh, the market just
defies odds. And I think it's hard, like if everything
is political nowadays, So I think when we come to

(04:26):
this show, it's almost like, oh, we can we say this?
Can we say that? You know what's going on here?
You know? And I think, and that's a sad state
of affairs, I will say it is. But why am
I saying that the market defies odds Because whether right
or left, President Trump's policies are or or or are
ones that the potential range of outcomes are much broader.

(04:51):
And we've been saying this forever than a traditional politician.
It's almost like with the opening of the show good morning,
welcome to Cava. You know, the potential range of outcomes
are much broader traditional balty. I've been saying that forever,
probably four or five months. We have UH and the
market likes they look over, oh, they look past I
think some of the shorter term issues and look towards

(05:12):
the benefits. You know that that perhaps evening the playing
field will promote And I think if you if you
look at tariffs, and I think that I think the
tariffs between Mexico and Canada and the US are a
huge mistake. But all the other countries, you know, and
we don't have a lot of tariffs with the developed
countries in general, some of the emerging markets in China. Yeah,

(05:34):
you have at it. I do think that the one
between US and Canada it's going to be a big mistake,
just because you.

Speaker 2 (05:40):
Know, what's going to be a mess the twenty twenty
six World Cup. It's Mexico, United States, and Canada like
a joint joint venture.

Speaker 1 (05:51):
Yeah, I think the I think the biggest issue is,
you know, just just all the times, like just an
automobile goes back and cross back and forth across the
But now that you know President Trump, we renegotiated NAFTA.

Speaker 2 (06:06):
He renegotiated, and you can't just back out him an
agreement and use like a fentanyl as as the.

Speaker 1 (06:14):
Reason for it. So I'm concerned about that. You know,
we were riding into the show today, we're talking a
little bit about what do you think about the market?
I asked you, and what did you say.

Speaker 2 (06:26):
I think it's pretty fairly valued. You know, I'm surprised
it's here with all the things that have taken place
so far, you know, since Trump's presidencies, all his tweets
and everything. So I'm surprised it is. It is holding up.
Even this past week's CPI came in a little bit
hotter than expected. Inflation was up a little bit. Uh
So in the market just keeps on chugging along. It

(06:48):
was up for the week. Uh So, you know, I'm
surprised it is where it is. I think that it's
I think that it's hanging on artificial intelligence. I think
these are these companies are still having pretty good earnings actually,
and I think large cap tech, although overvalued, it's not
astronomically overvalued like we've seen in the past. I think
the growth, the growth prospects of artificial intelligence and technology

(07:11):
in general are I'm kind of putting a floor on
a lot of these large cap technology companies are broadening, right, Yeah,
you're seeing some broadening and market returns, yeah, quite a bit.

Speaker 1 (07:24):
You know.

Speaker 2 (07:25):
You know, commodities are doing well, like gold and silver,
so you know, Ray Dally has the classic all weather portfolio.
We don't really invest in commodities, but I think it's
a pretty good time for that. You know, you have,
you know, you just have a diverse set of of
asset classes, you know, international. I mean you have some domestic,
maybe some commodities, some treasury bonds, some foreign bonds. And

(07:47):
I think that that's a good mix for this, uh,
for this you know time.

Speaker 1 (07:51):
It is let's let's stick let's stick down a little bit.
So first half hour will dig down into the particulars
of the market this week, and then the second half hour,
there's a couple of things going on to talk about the
growing number of retirees, research done by Apollo Jamie diamond
five things a retireing. What is it? Jamie Diamonds brilliant
advice for anyone nearing retirement. He's the CEO of JP

(08:11):
Morgan and ten Peter Lynch quotes anyone hoping to retire
when day needs to hear. So we'll touch on those
in the second half, but for now, let's let's get
into the details of the stock market for the week.
First with the economic data that came out and you
mentioned a couple of minutes ago about the producer and

(08:32):
consumer price in next to two major gauges of inflation
that came out this past week, and we have on
Wednesday the CPI retail measure measure of retail inflation up
five tenths of a percent during January, three percent year
of a year. The market sold off on that after
rising four tenths of percent during December. CPI has fallen
from a year of year high of nine point one

(08:53):
percent during June of twenty two, but has risen from
a low of two point four percent as of September
of twenty four. So I think we've been talking about that.
We've been talking about a stubborn, not transitory, secular and
part nature of the CPI. It's going to be difficult
to get the inflation down to the two percent mark.

(09:16):
I think one of the things that the market is
excited about is deregulation also, you know, like a bull
in a china shop. But nonetheless, the market's happy about,
you know, raining and government expenses. I think both sides
of the aisle at least, you know, should be happy
that we we there's something's being done about government expenses. No,

(09:36):
we're not happy about the methodology of it right at
this instant, or I'm not, but I am happy that
we're doing something about it, you know. So, so we
have a little bit of a leveling off of the CPI.
Energy prices up one point one percent DUR in January
of one percent year over year, Food and beverage prices
rose four potenti per percent DUR in January two and

(09:57):
a half percent year of year shelter of four ten.
So if you look at an overall CPI up five
ten percent, energy prices up one point one beverage up
point four.

Speaker 2 (10:06):
Yeah, and you know, I think what you get nervous
about with CPI is that, you know, if you look
at economic measures of you know, just households, houses are
still in really good shape. And sometimes things like these
are a self fulfilling prophecy. You know, if people think
prices are going to rise, companies could rise raise prices
until their bottom line is that or their top line

(10:26):
growth is actually starts to get affected. Then then they'll
then they'll pull in the reins a little bit. So
as long as people will pay for something, I do
think that, you know, companies and manufacturers will continue to
have prices at least remain where they are. So I
don't see prices going down substantially anytime soon until they
start to see some cracks in the in the consumer

(10:47):
and you're just not seeing it yet. You're seeing a
household debt or credit card debt high. But you know,
just for inflation, it's it's not as it's not as
dire as as it may look on a chart.

Speaker 1 (10:58):
Also as a percentage of disposable You know, households are
in good shape. And I hear what you're saying that
if you have relatively strong consumer, then you're not gonna
have certainly, I don't think we'll have a cutting of prices. Yeah,
and pockets, you'll have a cutting of prices. Hopefully egg

(11:18):
will come down and so the clue is taken care
of and this and that. But I think in general
we have disinflation, which we had when the CPI hit
a low of two point four percent year of heere
in September. Now I think you just have inflation right
now at two or three percent, and the FED holding
rates firm, waiting to see really if Department of Government

(11:42):
efficiency or other President Trump's policies does rein in inflation
even more. But right now I think you're looking at
a one rate cut perhaps in the second half of
the year, and I think even that's going to be
going to be more data driven. We also got the
same type of results on Thursday. Prices at the wholesale level,

(12:03):
so you look at the wholesale level. Wholesale, you buy
things and then you sell them with retail, so it's
kind of like a pipeline price.

Speaker 2 (12:10):
It's it's just an interesting, you know time just with inflation.
You know, you you know, you can take any data
and skew it however however you want. But you know,
sixty percent of people over sixty five don't have mortgages.
We have ten thousand people turning sixty five every day,
fifty over fifty six percent of retirees have pensions. Fifty

(12:32):
six percent of you know, retires have pensions, sixty percent
don't have don't have mortgages. So it's a lot of
people that are older that don't have the fixed expenses
that younger people have. So they're just going to keep
on spending their money as disposable income essentially.

Speaker 1 (12:47):
But they're not the spenders really, you know what I'm saying.

Speaker 2 (12:49):
You know, I just thirty seven percent of GDP is
people over sixty five.

Speaker 1 (12:54):
Yeah, that's surprising, I know.

Speaker 2 (12:56):
So you know that made up about seven teen percent
of the population, so you know, it's just a.

Speaker 1 (13:03):
Little again, seventeen what do you just say, seventeen percent
of the population.

Speaker 2 (13:06):
And people over This is in twenty twenty, people aged
sixty five and only made about seventeen percent of the population,
and thirty seven percent of all spending the United States
was for people aged sixty five and older.

Speaker 1 (13:19):
I'm surprised that that.

Speaker 2 (13:20):
Yeah, me too. So you know, it's it's a lot
of people with a lot of disposable income spending in
the economy. So if you have ten thousand people turned
sixty five every single day in the United States, that
that's a lot of disposable income that could keep prices
inflated for you know, until you see some you see

(13:42):
some cracks there.

Speaker 1 (13:43):
Hey, you think about that in general, you think about
the economic impact of that, and you think about just
our clients. Yeah, I could think about three or four.
I would think, like my generation, if you look at
my self sixty three, I would think of all my

(14:03):
friends the average let's say there were two and a
half kids per household or something like that. You know
what I mean, I think of all my friends. I'm
not gonna say them out loud, but yeah, two or three,
you know, I.

Speaker 2 (14:16):
Mean, it takes a few seconds.

Speaker 1 (14:18):
Exact a good point. I know you missed me when
I was going. So, so whereas the generation above me
might have had five or six kids, they typically they
had more kids. And I think it's statistically that comment
would be born out. What does that mean? That means
Mom and I and all of our clients, all of

(14:39):
our clients who are my age when we die will
be passing wealth down to two or three kids rather
than five or six kids. Yeah, so this is just
I mean, I don't even know how pertaining to this
show it is, but I'm wondering if the whole retirement
picture for people your age might be a little bit
overblown because of the wealth that you know, your generation

(15:01):
will ultimately.

Speaker 2 (15:02):
Inherit trillions of dollars they're set to inherit, right, I.

Speaker 1 (15:07):
Don't know the fact you want to spend your last
dollar on the day you die, which never really happens.
But it's just an interesting it's very interesting. Maybe live
in interesting times. But Chris should alway say be careful
what you wish for, you know.

Speaker 2 (15:18):
But yeah, and you know, retirement is just you know,
it's really kind of a new concept, and you know,
we talk about it on the show a lot. You know,
the economy, in economics and in the stock market, although
it's pretty it's old, right, you know, you could talk
about economics back to you know, wherever when people start
you know, one hundred thousands of years ago, when people
started trading. It's just an ever evolving I guess science

(15:41):
that it's really you know, you can they you know,
they always say that, you know, history rhymes, it doesn't repeat,
and I think that is so that is that is
way more accurate in economics, in stock marketing when people
are retiring, because you know, it's really hard to back
test this many you know this many people retiring, just

(16:02):
retirement in general, how they'll spend their money. So you know,
everything's just kind of evolving that you try to you
try to see, I guess where you think, you know
the you know, the economics of retirement and how that
transcends to the stock market. But you know, everyone's just
kind of taking their best gas, right.

Speaker 1 (16:20):
And I think what's interesting about that is is that
when you you know, I often call these things like
bar fights. You know, you throw their first punch and
who the hell knows where things are going. I think
a lot of things in life are like that, and
I think this is one of those things we'll look
back and say, this is what happened, and this is
why it happened. But yeah, you know, as of now,
it's everybody anybody's best guess. But price at the whole
set level, the PP have four tens a percent during January,

(16:42):
five tens of percent during December. So here we have
the CPI of five and four January and December PPI
have four and five January December. Over the past year,
the PPI is up three and a half percent. Energy
prices up one point seven percent, food prices up one
point one percent. Food price is still up five point
five percent you over year. Course core PPI, which excludes
food and energy, of three tens of percent during January,

(17:05):
So we still got inflation hanging around. It's not rampant.
I think real wage growth is above the pace of inflation,
but it is there. We also see it in US
export prices up one point three percent during the month
of January. Impro prices up point two percent. Industrial production
relatively strong five tens of a percent. Capacity utilization, which

(17:25):
measures the percentage at which our nation's minds and factories
and utilities operate at seventy seven point eight percent higher
than where it was a year ago. Manufacturing capacity about
where it was a year ago. The only really blemish
on the data this week was retail sales down nine
tens percent during January, still four point two percent year

(17:46):
over year. I'm not surprised at retail sales down, just
given the factory. It's January. It's typically a slow period.
We've had some weather. And finally for the economic data,
initial claims from employment benefits fell seven thousand. And for
listeners to our show, you know you get above two
hundred fifty thousand or so initial claims from employment benefits,
a yellow light goes off two hundred thirteen thousan they've

(18:08):
been hanging around in there. The four rolling average is
still two sixteen, So you've got you've got a good economy.
That would the Fed would be hard press really to
cut into. Jerome Powell appearance before the House Financial Services
Committee said they made great progress on inflation, but we're
not quite there yet. President Trump is calling for interest
rate cuts. I don't see it.

Speaker 2 (18:31):
I don't see the need for it.

Speaker 1 (18:33):
Ye see the need for it at this point in time.
I want you dig into the market for the week
air and maybe we'll close out the show with the
close off to the first half of the show with that.

Speaker 2 (18:43):
Yeah, all major indices were up this week, Dad Jones
Industrial average up to forty two sixty eight to close
that forty four thousand, five forty six, up point five
to five percent for the week, up four point seventy
one percent for the year, smp F eighty eight sixty
four to close that six one hundred and fourteen, up
one point four seven for the week, up three point
nine six percent for the year, and as that composite

(19:04):
up five oh three thirty seven to close at twenty
than twenty six seventy seven, up two point five eight
percent for the week, up three point seven one percent
for the year. Total market up seven ninety three thirty
nine to close at sixty thousand, seven ninety thirty six,
up one point three two percent for the week, up
four point zero nine percent.

Speaker 1 (19:23):
For the year.

Speaker 2 (19:24):
Russell two thousand lagging a little bit, up point twenty
seven percent for the week, up two thousand and two
seventy nine ninety eight, up point zero one percent for
the week, up two point two three percent for the year,
Utilities up nine point two two to close that one
thousand and six twenty eight up point nine two percent
for the week, up two point four nine percent for

(19:44):
the year, and transports up four four fifty nine thirty
four to close at sixteen thousand and six oh six
fifty three, up two point eight four percent for the week.
For the year, up four point four seven percent, So
I'm all major indices within one per percent of their
all time highser than the Dow Jones Industrial average about
one point four percent from their highs since COVID, UH

(20:08):
Dow Jones up fifty one point seven nine percent, S
and PP eighty NAS that go up one hundred and four.
Total market up seventy five. So you know, the market's
obviously still in good shape.

Speaker 1 (20:19):
It's above I mean, right, but that's a that's above
the pre COVID high, which was set UH February nineteenth
of twenty twenty, which what's today today's sixteenth, so five
years ago Wednesday. Then nasduc is doubled since that period
of time, and that was that was pre going down
like thirty or forty percent. Yep. Yeah, in that month.
That was a brutal month.

Speaker 2 (20:40):
It was a brutal month.

Speaker 1 (20:41):
It was a brutal month.

Speaker 2 (20:44):
All the halts, yes, the market just kept halting for
volatility trading by y.

Speaker 1 (20:50):
Yeah, and then it caught, you know, and then we
lost a couple of clients. They went to cash and
then you know, we tried to talk them out of it,
and but you know, you look bad. And and then
that the vaccine, and and and how it was discovered
and and the time when during which its discovered, and
the pace and the passage through And you got to

(21:11):
get President Trump credit for his warps warp program. Uh
got warp speed program. And I forget what it was
called by. There was something warp and UH got things approved,
We got it rolling and uh and and here we are. Yes,
it stirred up a little inflation. Fed was too easy.
We threw treasury threw too much money to the economy.
And here we are kind of dealing with a bit

(21:32):
of inflation.

Speaker 2 (21:33):
Inflation almost a double digits.

Speaker 1 (21:35):
Yes, yeah, yes, back in years ago. You know. But
as I look at the stock mark, here's here's on
a broad basis, And look, one week does not trigger,
you know, a change in policy. But look, I think
you gotta be careful of the mid caps in general,
not be careful, but you underweight the mid caps. I
think transports really look decent. We own some Boeing. Maybe

(21:56):
we want to continue to look at the spreading out there.
I think I think the Max seven will be fine
in general. If you have a basket of those, I
think you could pick out a couple. Meda is on
a twenty day wind streak, which is unheard of. It
is you know, it was you know, and uh, you know,
just just how they've monetized really AI and also they

(22:19):
don't have to spend the money that some of the
other companies do. They don't really have a search so
I think they've just benefited from that their reels, their threads,
their Instagram as well, you know, hitting on all cylinders.
I think if the total US stock market in next
up four percent, which exceeds the NASAK, it's exceeded you see. Yeah,
I think international merits. You know, we talked a little

(22:41):
bit about that when I was away, uh, you know,
kind of building continue to build positions there. I also
think the transports. I think utilities. Ah, I'm not you know,
I'm not either hot nor cold on utilities, and we
look at things along those levels. What else and anything
any other comments on now?

Speaker 2 (23:01):
I think I think mid caps. Maybe we keep on
thinking that Madcaps are going to perform, make Caps are
going to perform, make Caps are going to unperform, and
it's like eventually they will. But we've been calling for
it since you know, rates started to be cut really large,
that they have it.

Speaker 1 (23:16):
Yeah, buy and large. You know. So you know, about
a half a minute left, ten year treasure note at
four forty seven down two basis points where it was
four forty nine last week. Two year notes at four
to twenty six. It was four to twenty nine. We're
kind of in a range. Share also on treasuries, you know,
we had the Japanese ten year government note at one
thirty five. You know, that's up from one nine at

(23:37):
the end of the year. Why is that important because
they're dead. As a percentage of GDP is very high.
We'll see if where larger or higher rates take take
the countries like that, and we will go from there.
All right, So it's ten thirty. We're gonna take a
break for the news and then come back for the
second half five of the Capitol District's Money and Investment Program,
the fig and Financial Report. Good morning, and welcome back

(24:00):
to the second half hour of the Capitol District's Money
and Investment Program. You were listening to the Fage and
Financial but I found I was talking too fast.

Speaker 2 (24:07):
Your your introduction on the first half and the second
half were very different than they usually are.

Speaker 1 (24:13):
Trying to trying to slow down, Yeah, slow down, a bit,
you know.

Speaker 2 (24:17):
In life in general, or just with the show.

Speaker 1 (24:19):
With the show. Okay, don't tell mom, But I was
thinking that when welcome back to the Capitol District's Money
and Investment program. Here we are in two thousand and
six or two thousand and seven, and I'm thinking, what
do I mean by that? I think that, you know,
this interest rate environment. We were talking about interest rates
a little bit before the break, and I know I
want to get into Peter Lynch and Jamie Dimond Diamond's advice,

(24:43):
but I think interest rates are where they are going
to be. I do I do you know, absent like
President Trump could force them down and this and that.
I think that that's like a water balloon. I think
that that would that would promote other issues of eventual inflation.
Now unless there's a reduction in government government spending and

(25:03):
this and that and whatever. But at this point in time,
given the economic situation that we're in, which is positive,
given the fact that inflation has come down a bit,
and I think interest rates are where they should be
and this is like a pre Great recession environment.

Speaker 2 (25:17):
That that is that good or bad?

Speaker 1 (25:20):
It's okay, like it's fine. I mean, I think the
biggest issue right now, in my opinion, is the housing market.

Speaker 2 (25:26):
Yeah, you know, I think the housing market, and I
do also think that a lot of the things that
are going on in the government, you know, you could
say they're good, you could say they're bad, but what
they do bring a lot is unknown. So you know,
my biggest fear is that, you know, mass deregulation could

(25:48):
lead to a black Swan event. I'm not saying I
know what it is. I'm saying that, you know, we're
doing We're experimenting a lot here, and all it takes
is one little thing to fall through the cracks that
no one thought of, like oh, let's let let's let's
bundle up all these mortgages. You know, the chance of
them them not getting paid are really low, and then hey, small,

(26:09):
you know, small percentage chances add up. I guess.

Speaker 1 (26:15):
So a range of outcomes with the Trump administration is
basically much broader than traditional politician you know, And I
think you look at yes, and I.

Speaker 2 (26:23):
Think it'd be a little bit till something like that
had came to fruition and have to go through the economy,
go through everything, but.

Speaker 1 (26:30):
An economic passes one event. Yeah, for sure, but so
so we have an environment that we're going to probably
you know, live in for a while. The market likes it.
They like a modestly growing economy with relatively tame inflation.
Some of the kind of data that came up this
past week that's a little bit beyond the economy that

(26:52):
we publish a snapshot. This will be on the first
page of that. One of the things we say is
sign us up, Cordon Oppenheimer and Company. And as reported
by CNBC, when the S and P five hundred is
three percent or higher on Valentine's Day, the indist historically
continue to rise for the rest of the year ninety
three point eight percent of the time. So when the
SMP is three percent higher or higher on Valentine's Day,

(27:16):
there's a ninety three point eight percent of the chance
and this goes back to.

Speaker 2 (27:20):
The markets for the year or higher that's higher.

Speaker 1 (27:23):
That is higher from that point continue to rise for
the rest of the year ninety three point eight percent
of the time, with an average gain of thirteen point
seven percent. Wow, So the S and P five hundred
is up three point nine six percent through Friday, So
there's a there's a ninety three point eight percent chance.
If you go back seventy five years, then we're going

(27:44):
to get almost another ten percent moved to the upside
in the market. Excuse me, bless, you can't. I don't
have a mute button over here, so I apologize.

Speaker 2 (27:55):
I could have muted you.

Speaker 1 (27:58):
Okay, maybe we will because you know, he's like a
million times. Earnings have been strong. Guidance not so much
as according to be Spoken investments. Pretty much every sector
has seen fewer companies raised guidance and more lower guidance
this season as compared compared to the last ten years.
We're not surprised as despite the significant strength of the economy,
given the change in administration, most companies are they're most

(28:19):
likely taking a wait and see attitude, you know, rather
than banging the drums say hey, things are great, we
expect them to be great. They're like, things are great,
but but but I don't think that's a negative on
on the economy and negative on the direction they feel
the direction of the kindom. I think they're just saying, hey,
let's be careful here. And also Warren Buffett hangs on

(28:40):
hung on to his.

Speaker 2 (28:40):
Apple or in the yeah, you know, in the last
quarter he did get rid of some last year. But
it looks like after pairing his shares of Apple to
three hundred million at the end of Q three last
year from nine hundred and fifteen millions.

Speaker 1 (28:52):
So fifteen million shares, uhifty million shares that is yes. Yeah,
so now Typo Typo, now he's got three hundred million
and he has the same so he's hanging out to Apple. Uh.
Apple just set up a deal with.

Speaker 2 (29:10):
Apple is a commodity, you know, I think, which is
you know, important with its iPhone sales, and you know,
it's done a really good job branching out into wearables,
into you know, cloud services, into services in general, into
their app store. So you know, I think everyone should
at least be you know, equal weight of Apple gives

(29:30):
just seven percent of the total s and P five
hundred so portfolio ten.

Speaker 1 (29:36):
Yeah, you know, announced that the partnership.

Speaker 2 (29:40):
And you've seen you've seen services.

Speaker 1 (29:42):
For iPhones in China. That was the big fear I
think is the iPhone kind of sales were lagging, so
that could be a big plus.

Speaker 2 (29:47):
And you're seeing some strength in China in general. You're
to date k Web, which is the China Internet ETF
is a twenty two percent. You know you're seeing you know,
you're seeing a lot of Yeah, you're seeing a lot
of strength.

Speaker 1 (30:00):
What about ok web.

Speaker 2 (30:06):
One year so I know a lot of k web
is you know it's Alibab at tencent, Pinduo duo and
you know it's I'm surprised how well it's doing with
all this tariff talk. Still you know, Trump targeted like Sheian,
which is a closed manufacturer, Timu same thing. But yeah,

(30:27):
it's it's still strong.

Speaker 1 (30:29):
What's a c w X up here to date the
Ice Shares Mortganey Compositi Index all world except the US.

Speaker 2 (30:36):
You're to date seven percent. You know, it's largest holdings.

Speaker 1 (30:41):
I think that's that's that's something that we've been under
underweight international for quite some time.

Speaker 2 (30:47):
You'll be on d g T, which is the Global
one hundred. But again, you know the Global one hundred
is still quite a bit in the United States. If
it's the Global one hundred, Dow Global one hundred, so
it's uh, it's a little it's performance.

Speaker 1 (31:04):
Check that out.

Speaker 2 (31:05):
It's up you know, eight point five three percent year
to date.

Speaker 1 (31:09):
The largest companies in the world is the IOO. Yeah, TF,
what's that up that's probably up around six percent. Yeah,
I don't.

Speaker 2 (31:17):
You don't have your You don't have your so you
just boss me around. You didn't bring your computer.

Speaker 1 (31:23):
DGT.

Speaker 2 (31:24):
I'm on d GT IOL. D GT is fifty seven
percent America. So IOO is you know global one hundred
et F it's eighty one percent America.

Speaker 1 (31:39):
And what's that up to date?

Speaker 2 (31:46):
Three point eight two percent? I think so d GT
is up quite a bit more. It's more diversified though.
Dgt's largest holding is less than a percent point ninety
six percent Tesla. And you're talking about transports, which is interesting.
What do you think? What do you think the largest
holding in the in the transports is.

Speaker 1 (32:07):
Uber? Is it really transport average? Yeah, that's up, but
that's a good room. It's one of our largest holdings.

Speaker 2 (32:13):
What is that ticker? Is it an XCEL? Does it
have an XL? What does it have a spider.

Speaker 1 (32:20):
Um? No? Yeah, no, it does not have a it.

Speaker 2 (32:27):
Does x t N. You know it's largest holdings are Uber,
then Alaska Air UMP. You know Uber's Uber had relatively
poor earnings but came back extremely strong thirty one percent
year to date. That's why transports are strong.

Speaker 1 (32:42):
Uber is our twentieth largest holding. Yeah. As far as
individual security individual stocks, Boweing is our twenty second. Our
largest holdings as of the end of January. Alphabet, Apple, Microsoft, Amazon,
Pallanteer heavily weighted in tech, The second block not so much,
lows in video, JP, Morgan, Visa, and MasterCard. The third

(33:03):
block vertex A, m D, Chevron, Berkshire, Regeneron. Yeah.

Speaker 2 (33:08):
And you know, I, I, you know, have an email
from someone just reading this right and I'm just reading
this right now, and it was a it was a
oh no, you know, basically, you know, I get an
email saying, hey, you know, I had the best one day,
you know, pop in my portfolio ever after Palenteer's earnings

(33:30):
and I didn't and I didn't get a chance for
spond that night, and that night we sold off twenty
percent of our Palenteer holding. And he said, you know,
I was just thinking. I was thinking you were, you know,
just trimming off some profits. And I saw it and
I was like, darn, you know, because it's been so good.
But I think that's what you have to do, is
you know, if you're managing your own money and in

(33:52):
their investments, you have to have disciplines right and disciplin
Some disciplines are you know, when you buy something at
twenty two and it's at you know, one point fifteen,
you have to sell some you know, and you have
to hope that it's not the right move, but you
just have to do it, you know, you know, Poluneers
at one nineteen, it's up fifty seven percent year to date,

(34:12):
it's up three hundred and sixty eight percent one year.
Our cost basis is in the low twenties, and and
it just became you know, do you although it's a
great thing. You know, when we started buying it, you know,
you buy it for you know, two percent of people's portfolios.
And you know, we didn't buy it as much on
the way up. We bought in the twenties and thirties
and forties. And then you know, when you have a portfolio,

(34:37):
let's say you buy something when it and you know,
you have a two percent or like Palenteer, and it
goes from you know, twenty to one one twenty. Now
it's seven eight nine percent of someone's portfolio. That's not
that's not what you want, especially if you're if you're
in retirement, you don't want to want one of your
largest holdings to be such a in my opinion, volatile
technology company that you know has great prospects for the future.

(34:58):
But you know, if you just looked at these fine
financial statements and fundamentals, you'd be like, wow, that thing
is overvalued tremendously.

Speaker 1 (35:04):
In our chart talk this past week, that's existing. And
again for I just kind of like preface what I'm
about to say with what our chart talk is is
every Wednesday, we send out a chart to our clients
with a little bit of a description around it. And
this was the four Horsemen of the NASDAC. And you
know you probably maybe you do remember. You know, you

(35:25):
were born in eighty nine, so you're probably eleven or
twelve at the time, so you probably don't remember, but
there were the back in the mid nineties. The four
horsemen were the equivalent of today's mag seven. The four
horsemen were you know, Intel, Microsoft, Dellystem Systems. Now Dell
took itself private, so our chart talk I replaced, We

(35:48):
replaced Oracle Dell with Oracle. And what you saw is that,
you know, if you put ten thousand dollars into each
of those, they went up by ten times from the
in a four year period, but then they went down
by an average of about thirty percent over the next
ten years. And I think you're in And I'm not
saying you're in that same position. I'm just saying what

(36:08):
we try to do is introduce the concepts to our
clients that you know, buying high and selling buying very
high and trying to sell much higher is a fool's
game to a certain extent. With a large percentage of
your portfolio, you might want to be tactical a little bit.
And I'd use that something lawyer. Let's hope that it

(36:30):
was the wrong decision to trim a little bit of
palaleer from a from a dollar perspective, but I think
from a from a portfolio management perspective, there was no option. Really. Yeah,
And we did look at if let's say, if portfolio
had two iras and a joint account with them, and
each of the each of the accounts had two hundred shares.

(36:52):
We tried to take the twenty percent that we trimmed
out of the iras to kind of limit tax exposure
and this and that. So we did look all through
that stuff. But if if you received you know, if
you that that comment that that uh, that you received
from during an email. You know that that is typical

(37:12):
of the the comments you're going to get, which is,
why would you ever sell it's doing so well well?
If you buy low and sell high, isn't that what
you want to do? Yes? Then then they then you
realize that that's why, that's why we did what we did,
you know, so, so, so then we're sitting here, let's
let's get what do you want to get into now

(37:33):
a couple? One thing? You know, another thing too, or
unless you want to get into the Peter Lynch stuff. No, yeah,
what the other thing was h Susie Ormon? And you
know I'm not a huge Susie Ormon fan. Uh, but
she did say something called cash hoarding due to recession
fear is a huge mistake. But she's wrong. And this
was an article by Joey Furnett and you know so

(38:01):
so again you know it says that, and I this
article by Joy bed says she is wrong, and I
think she she is wrong. I don't think you want
to cash hoard. How do you feel about? To put
it that way? Like, how do you feel about holding
cash in your portfolio? For whatever reason?

Speaker 2 (38:23):
You know, our Shop, money Markets, our Vanguard, our Fidelity
is getting four percent. If you're if you're retiring, you know,
I don't I don't know why you wouldn't have some
short term treasuries or cash in your portfolio, right, I mean, like,
what does what? What do you think? I don't think
holding anything is the right call. But you know, I

(38:47):
also think that you know, if you're in retirement, if
you're you know, if you see you got there, you know,
the risk of of of you know, of the market
pulling back, it is always there. So yeah, I think
having a percentage of your account in cash or your
overall assets and cash is a good thing. I try
to you know, if you're in retirement, I think, you know,

(39:08):
keeping two years of distributions in short term secure, short
term treasuries and fixed income is smart.

Speaker 1 (39:16):
Right, So let's say you say that. Let's say you
say two years at four percent, that's eight percent, and
then you hold another ten percent. I don't see a
come of that. Yeah, no, neither the markets of sixty
percent over the past two years, You've gone through the
door of financial independence. If if being too aggressive is
going to send you out, that will back out that
or if if things work against you, then yeah, you've

(39:37):
got to look for alternatives. Now, maybe that maybe the
short term bonds and cash, maybe some ladders of bonds.
I would I would lump that all into a process
of more conservative investings. So yeah, necessarily cash.

Speaker 2 (39:51):
Alan, So you you love saying a lot with clients like, hey,
you know, wherever you think you are, chap twenty percent
off because of twenty percent downturn happens what once every
three years, essentially once right, three or five years, let's say,
you know, and so we use money guide Pro, a
great financial planning software and portfolio visualizer, and you know,

(40:13):
you can you can put in a portfolio, you can
put in a portfolio allocation and see what would happen
during different periods of of history, right, so you could
actually see what your exact portfolio would look like during
twenty twenty, you know, twenty twenty, two thousand and nine,

(40:34):
nineteen eighty seven. So you can really say, hey, you know,
would I be comfortable if this happened again? And I
think you have to build a portfolio. You're like, okay,
you know, yeah I lost X amount of dollars, but
you know we got it back, and you know I
can live with that.

Speaker 1 (40:50):
So my money last, yeah, you know what I mean,
through my life, and I think.

Speaker 2 (40:54):
Work play worst case scenario with your portfolio and if
you're not happy with the outcome, adjust the allocation to
where you're like, okay, you know I can live with that.

Speaker 1 (41:03):
Well, you know, so I don't like the word hoarding
in general, because that, in my mind, that is connotes
you know, kind of mental mental right right, like we're
hoarding things just for the emotional aspect of right there
you go, you're yeah, so right back in back in
the pandemic. But so I you know, no, I think

(41:23):
if you're holding after after the games, we've had twenty
percent cash.

Speaker 2 (41:28):
You know, of your overall assets as well. Overall assets,
I think you have an emergency fund with twenty thirty
thousand dollars in it. You know, I think that's always prudent,
and I.

Speaker 1 (41:37):
Think you want to be tactical with it. Like we
sold Pollenteer. We haven't reinvested that yet. No, Yeah, you
know that's probably about five or six million bucks, So
you know it's sitting in cash. We're not expecting to
do that forever, but you know, we'll hold it for
a little while so so so I think. And the
other thing too we were talking a little bit about
before or on the way in, is that that if
if if holding twenty five percent cash is going to

(41:58):
allow you to sleep at night and have your other
all your other assets invested appropriately, and if that is
going to enable you to maintain your standard of living,
then have at it. Because if let's say you, let's
say someone told you you're holding too much cash, you
should not hold this cash, it should be here, and
then the market goes down and you get out at

(42:19):
the wrong time because you were never comfortable with that,
then then that that and then that's a mistake. Anyways,
let's move on to uh, Jamie Diamond's brilliant advice for
anyone nearing retirement, because.

Speaker 2 (42:31):
We got about was that sarcastic?

Speaker 1 (42:33):
Why? I don't know, never sarcastic with Jamie Diamond one
of my favorite individuals. Uh, one of my favorite individuals.
Looked at him for inspiration, candor you know, and leadership
with JP Morgan. JP Morgan is one of our one
of our larger holdings.

Speaker 2 (42:51):
Our largest bank. It is our largest financial party. Right, yeah,
maybe let me pull in there. Common stock JP Morgan's
our eighth largest hole. Visas are ninth, master cards are tenth.
So in that block are those three down the list
a little bit Berkshire, Hathaway and then Bank of America.

Speaker 1 (43:09):
And Schwab at twenty one. So those are just our
individual securities, some of our larger individual equity securities. Jamie
diamond says, take accountability for where you are, and he
quotes Abraham Lincoln. Jamie diamond says, Abraham Lincoln never denigrated,
never scapegoated, never finger pointed, and he had reason to

(43:31):
or afflecting on your career thus far, including any hardships
or just and I always say, you're not going to
get out of life for your career without a hardship.
You're just not going to happen, including your any hardships
or disparities you faced. You might be tempted to point
fingers at other people. Whoever, as you get older, you
realize that everyone has been both a victim and a
villain at some point in their lives. Doesn't help to

(43:51):
place the blame on others. Instead, take accountability for your
own life and choices. Learn from your stakes and relation
and your success.

Speaker 2 (43:57):
And this is you know brilliant advice for anyone nearing retirement.

Speaker 1 (44:03):
Dress any issues, address any issues before retirement. Don't put
off your problems problems, don't age well, stay true to yourself.
I've seen people when they get into these bigger and
bigger jobs, it goes to their heads. I've seen it.
Some people in life change who they are and some
don't have basically the same guy I've always been remain

(44:24):
humble and kind and to be open minded. I thought
this would be a little bit more and I didn't
financial financially.

Speaker 2 (44:31):
Or maybe you should read the articles before we start
talking about them. It's kind of nice. It's like, uh,
you know, going going in blind. It's a little bit
more fun because you you say what you actually think
and you don't have time to, you know, reflect on it.
You know, I always, I always have trouble taking advice

(44:52):
from like, you know, I don't know. I think sometimes
a lot of these advice from billionaires is easier said
than done for a lot of people in the world.
So but you know, yeah, and there are all things
that everyone wants to remain humbling, kind, address any issues
before retirement. I think we see that a lot address
any issues before retirement. I think, what are some of
those issues, you know, a will and a state planning

(45:15):
of retirement planning, distribution planning, social security planning. You know,
may mortgage play off your mortgage, maybe were with conversions
in the beginning of retirement. Things like that that I
think are important hit the ground running in retirement because
I think it's really hard for people to you know,
we're just like you know, humans are creatures of nature.
We're creatures of habit. We're in the habit of working

(45:37):
for the past thirty forty years and then you quit
one day or retire, and all of a sudden you
don't have an income. And I think that takes a
lot of getting used to, you know, I think I
think it can be tough on people mentally. So you know,
I hate to give the advice of you know, have
one foot in the door, but if you if you
have a job that you like or there's something that
you like where you can make a thousand bucks a

(45:59):
week or you know, a month, a thousand bucks a month,
I mean, you know, yeah, I think that's that helps people.
I think having an income in retirement helps you protect
yourself against yourself and market downturns as well. So yeah,
things like.

Speaker 1 (46:12):
That last topic. And it's gonna be brief because the
only way about two and a half minutes ago, we
won't be able to get to the Peter ten Peter
Lynch quotes. Will push that off till next week. Article
by tonight, I am t A N A y A
M A c h E L E E l so
mich Shield tonight, I am A Shield says, and this

(46:33):
is according to a research report from b C A
sell crypto as Trump and mean coined fever. I agree,
do you really?

Speaker 2 (46:41):
I do? I don't uh, you know why I do
agree with it. I think you sell a portion of
it for the main reason that it should be doing
better than it is. So something's going on under the
service in my opinion, with oh we'll diregularly, we'll do
all this, we'll do all this that I think you're
seeing some digestion of games. We've had a few clients
call and request it, which I think is always a
sign of a top So yeah, you know, I think

(47:04):
that if you've held on to crypto for a long time,
that you should sell a portion of it, like like
we did with Palenteer. And yeah, go from there.

Speaker 1 (47:15):
No problem with that. I think it's more of a
digestion of gains. You know, I think there's there is
a speculative fervor around and I think as part as
illustrated by those the coin, the calls we've we've gotten.
You're right. Bitcoin is up probably about two or three
percent this year. Some of the other industries, as we mentioned,
is up to four, five six percent. It did have

(47:36):
a huge run last year. I think I would almost
slump gold into that same type of category of just
be careful with these sectors that are pretty pretty small.
Yeah that you're you're not buying near the top. Goal's

(47:56):
up fifty percent, Bitcoin is quinintupled or excuse me, going
up tenfold. Do you really want to get into something
at that point expected to go a lot higher. I
think a period of digestion is warranted. I don't know,
and I do think you're right. I do think I
would sell, you know, a piece of that and move on.
The problem with that we have right there with that
airon we gotta we gotta get out of here, is
that we really have one or two percent of our

(48:17):
coincasses in that. So what are we going to sell
a piece of thirty percent, so probably not. Anyways, Well, anyways,
be safe out there.

Speaker 2 (48:25):
It's nasty out there.

Speaker 1 (48:26):
It is nasty.

Speaker 2 (48:27):
Now, we got your big truck and helped us come in.
Thank you for picking me up.

Speaker 1 (48:31):
Well you have you have a you have a car
with four wheel drive as well. But anyways, give us
a call during the week five, one, four, check us
out on the webit thing and ask that dot com
or let us on Facebook. Have a great take care,