Mr. Money Talk

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Episode Transcript

(00:10):
But the afternoon. This is JoshArnold, mister money Talk with Judd Arnold,
well not Judge. This week heis with his daughter in Florida.
Judd decided to escape some of themore difficult weather. He wanted to see
some spring. Didn't look like therewas spring here as we record record this

(00:36):
on Thursday night after the market closed. But this is Josh Arnold, mister
money Talk here to answer your questionson stocks, bonds, mutual funds,
how you should position your investment dollarsincluding your IRA and four to one k

(00:57):
do give us a call nine twonine two five five six oh eight.
That's nine to five two nine twofive five six o eight. Now the
market has been pretty pretty strong,though the concentration seems to have been just
in a few companies, but inmany different industries across the board. Market

(01:27):
continues. I'll say the broad marketcontinues to be concerned about an imminent recession
given the FEDS moves in the lastyear on interest rates. And the FEDS
move interest rates short term interest rateshigher. Long term interest rates have also

(01:49):
moved up, and the concern hasbeen of an inverted yield curve, which
has typically been a sign that arecession is about to happen or at some
point could happen. Well, thisrecession, should it happen, when it

(02:17):
happens, will be one of themost telegraphed recessions probably in history, because
the talk of recession has been ongoingfor for a year. And of course,
my friend Christophorek of the Technical Researchwho I use as a market technician,

(02:43):
has said, economics is something thatyou get what you expect. Well,
if you're expecting a recession, andthere's so much talk about one,
well that might in fact happen today, just being Thursday, there are more

(03:06):
signs of a recession coming from comingfrom the likes of the Philly Fed,
which the Philly Fed manufacturing indecks camein again on the net negative side,
and the weekly jobless claims also camein above estimates, and that those two

(03:32):
items would be indicative of a slowingdefinitely a slowing economy. Higher unemployment,
which is something the something the Fedis has said they want, they want
higher unemployment, they want lower wagesor maybe as one commentator Jim Kramer has

(04:00):
said, the Fed is looking forpeople not to continue job hopping because the
job hopping has resulted in people makingmore money. And I kind of scratch
my head when somebody, somebody says, well, job hopping results in people

(04:24):
making more money, and the FEDsays, we don't want people making more
money. We want higher unemployment sothat people don't job op to make more
money. Yep, we want tosee people making less money. We want
higher unemployment because that will help stabilizeprices or bring down prices, and that

(04:48):
will get rid of or reduce theinflation number from currently we'll say just under
four percent, back to the Fed'starget of two percent. And again I
scratch my head and say, that'sabout the stupidest thinking that I have ever

(05:12):
heard. Because should unemployment move upor move up substantially, what is the
next thing you're going to hear fromthe Fed? Oh, my goodness,
unemployment is too high. We haveto cut interest rates. We have to
get the economy going to get peopleback to work. And to me,

(05:33):
it's why don't you leave people alone? Having more people working and having them
making more money, to me,is good for the economy. You want
the economy to grow and not toshrink. And I've gone over, jud

(05:53):
and I have gone over with you. Many of the causes of inflation,
and to us, they started withthe rising price of oil, the rising
price of energy. That the priceof oil in the last two years going

(06:14):
from fifty five dollars a barrel,reached the peak last last June of one
hundred and eighty and now now theprice of oil is in the high seventies
and probably will trade maybe a littlebit down, a little bit up as

(06:40):
demand still is pretty strong. I'llsay demand is still pretty strong around the
world, and you still need oilfor just about everything related to moving,
moving and manufacturing goods. And unlessyou really stall the economy, well,

(07:06):
that price of oil is going toremain high, especially when some of the
major producers have cut back on production. And here in the United States we
can have production or short on pipelinesto move a lot of that production.

(07:30):
That said, I know Judd iswe'll say, bullish on energy on a
long term, long term basis,and in particular he is bullish on some
of the energy or oil service companies, notably trans Ocean market symbol RIG and

(07:54):
Tide Water Market symbol TDW. Ifyou look at some of the other UH
service companies, notably Haliburton and SlumbergeS, Haliburton h A L, and
Slumberge u S LB. Uh.These these stocks have done reasonably well uh

(08:20):
over over the last last year,though um you know, though they seem
to have stalled out. The uhdrillers meantime, uh those those stocks have
hit a high and have have comeback down. Though a few right now

(08:46):
look like I'm not going to sayoutright bargains, but the energy companies are
trading at very low price to earningsmultiples UM and they still have, in
my estimation, you know, plentyof opportunity, but they're going to tend

(09:07):
to move with the price of energyup or down. Now. One energy
source, natural gas, has comedown from ten dollars down to a little
over two dollars, although today um, that has a move back up a

(09:31):
little bit. Now if you dobelieve of the need for natural gas and
even turning natural gas to we'll saya solid state liquid or liquefied natural gas.
There are a few other companies toto explore. One happens to be

(09:58):
a new Fortress Energy and Fee whichis currently trading for half of where it
was at a high point, andtheir production and capacity just seems to be
or have the potential to to expand, so that I know that's another company

(10:20):
that Judd likes on a long,long term basis, not so much for
short term trading. I'll say forshort term trading, you might want to
look at c r K, whichis again trading for half of its half

(10:43):
of its high. That's Comstock Resources, that is a driller here in the
United States, focusing primarily on naturalgas. Brands of natural gas moves up.
Comstock should move up as well.Another company to look at in that
area it's local Northern Oil and Gas, which tends to move very slowly.

(11:09):
Not a lot of trading there.When we come back, we're going to
move from talking about energy, whichis down but a big component or has
been a big component in inflation.And if the economy slows down, Leaf
is not going to need as muchenergy, well that I beg to differ

(11:31):
on and Judd Wood two. Whenwe come back, got to talk some
more earnings. And do remember it'sthe shoes. This says Josh Arnold,
mister money talk here to answer yourquestions. Call nine to five two nine
two five five six eight. Thissays Josh Arnold, mister money talk here.

(11:58):
To answer your questions on stocks,bonds, mutual funds, how you
should position your investment dollars, includingyour IRA and four oh one K.
And I do hope that you wereable to fund your IRA or SEP prior
to sending in your taxes last week, and you were able to take advantage

(12:20):
of that tax deduction. And definitelymaybe you should get a jump on two
thousand and twenty three and start puttingmoney into that IRA or SEP. Now

(12:41):
that's just to your to your benefit, get that put that money aside,
get the tax deduction. And Imight add when we're talking about an IRA
and an IRA or SEP for selfself employed individuals, make sure if you
are eligible for a four or oneK fund that to the max it is

(13:05):
to your benefit to get not onlythat we'll say that tax deduction, but
to be able to accumulate money ona tax preferred basis. And my suggestion,
our suggestion is to invest those dollarsin stocks or stock related mutual funds

(13:31):
rather than than in bonds. Ido like and do favor, will say,
growth oriented assets rather than lending lendingassets. That stead got to talk
about, the shoes got to talkabout the shoes. Um as the old

(14:00):
Spike Lee commercial said, it's theshoes. It's the shoes that make Michael
Jordan go. It's not Michael Jordan, it's the shoes. Well, that's
a very old Nike Nike commercial froma lot of years ago, and I
bring this up one. I dolike shoes and shoe companies. People always

(14:22):
need new shoes and there are alwayssome new shoes styles. Now, my
preference happens to be investing in orone of the focuses that I've had is
in leisure, along of course withInternet China related businesses and real assets and

(14:45):
doing some short term trading and keepingsome dollars in cash as part of the
total asset allocation mix. But inform of leisure or leisure related companies had
a big focus will say on shoesand athletic athletic shoes and apparel. This

(15:05):
past weekend saw the movie with mypartner Annie. Saw the movie Air story
about Nikes signing of Michael Jordan andhow that signing would eventually lead to some

(15:28):
big, big changes in Nikes directionand the Nikes longer term growth. It's
it's the shoes. Well, seeingthis movie just reminded of my own history
of dealing with shoes, which datesback to high school, and we'll say

(15:52):
selling shoes out of the selling runningshoes out of the trunk of my car
for the predecessor company, the NikeBlue Ribbon Sports. I got involved with
that because some teammate teammates of minefound a way to get cheaper running shoes

(16:17):
that to us were just as goodas Adidas and Adidas running shoes at the
time, where they primo primo,but they cost a lot of money.
Well, several of my running runningfriends and teammates were able to get shoes

(16:38):
through this company called Blue Ribbons Sports, and I started first buying through one
of their affiliates, a former olympiannamed Browning Ross, and I was buying
so many he just gave me thegave me the catalog and said, Hey,
call this guy up in Boston withBlue Ribbon Sports and he can get

(17:03):
you stuff that you want. Andthat's how it started. Blue Ribbon Sports
was a company that Phil Knight foundedreally as a running shoe distributor for Anatsuka
Tiger shoes. Anatsuka became known asa six because of we'll say some dealings

(17:30):
with Anatsuka Tiger and some issues.Phil Knight and his cohorts started the company
Nike. Well, that company grew, eventually went public I believe in nineteen
eighty two, and the company continuedto grow and a few years later they

(17:52):
signed Michael Jordan, they moved addedbasketball and i'll say an urban an urban
audience, and sold a lot ofshoes. Well, Nike as a stock
has continued to do pretty well,although it's stalled out a little bit.

(18:15):
But this this quarter with Nike reportstheir numbers, I do believe with China's
reopening that Nike could come back tosome pretty pretty significant growth. But in
looking not only at Nike, butlooking at some of the other shoe companies
out there in this market environment,Uh, these shoe companies have really outperformed,

(18:40):
and I'm not going to I'll sayI overlook some of them. One,
I just don't understand the desire toown us, but we're Teva Sandals,
but that that company, Decker's OutdoorSports, also owns one of the

(19:00):
faster growing shoe brands, that beingHoka. And you see a lot of
those those on people's feet, lightweight, lot of cushion runners like them,
Walkers like them, casual wear likesthem. That stock has done unbelievably well.

(19:23):
Sketchers, known for their knockoff shoes. Sketchers also recently hit hit a
new high. They've been moving,of course into not only into running,
but definitely into casual wear and otherother sports. Company continues to grow,

(19:49):
not only buying shoes online through ecommerce, but also in the athletic apparel
area. Then you've got a companythat jud Judd brought up, but there
are some local athletes who who representthem on on shoes. Swiss based company

(20:15):
UM. They have their cloud basedshoes, these shoes you can see,
and a lot of different UM i'dsay Primate primarily higher end apparel shops as
well as UM the athletic and runningstores. Uh. This stock UM has

(20:41):
been up, got cut in halfand is now now back just under well
not that far, but still stillhas a waiting is to go to its
high. Crocs I'm not aware ofCroc. Crocs has continued to do well.
Wolverine Worldwide US. That's the hushpuppies that sock any shoes. Very

(21:06):
slow moving growth, but they havedone reasonably well. And then I can
look at the actual stores. FootLocker, which is more of a turnaround,
pays a very nice dividend at fourpercent yield. You have Dick Sports
and then Academy Sports doing well.And if you want some of these shoes,

(21:27):
you can always run over to TCrunning at any one of their local
stores. But if you go toeither Saint Paul's store or Eaton Prairie store,
you can mention mister money Talk's nameand get my discount. Say this
is Josh Arnold, this or moneyTalk usually with Judd Arnold here to answer

(21:49):
your questions on stocks, bonds,mutual funds. You should position your investment
dollars. Don't hesitate to give usa call nine five two at nine two
five five six eight. You getstraight talk, not sugarcoated advice. We're
here to help you your earnings.It's earnings, it's earnings, it's more

(22:12):
earning. Yes, this is JoshArnold, mister money Talk. You're to
answer your questions on stocks, bonds, mutual funds. You should position your
investment dollars. You do have togive us a call nine five two nine
two five five six oh eight.That's nine to five two nine two five

(22:34):
five six oh eight. You alwaysget straight talk, not sugarcoated advice.
Now, earnings have started to becomehave been coming on fast and furious.
So far, we'll say about twentypercent of the SMP five hundred have reported

(23:00):
their earnings, and I think,um, we've had more surprises on the
upside than surprises on the down downside. About sixty of those companies who
have reported earnings have beaten on theon the upside. UH concern continues about

(23:29):
guidance going forward to the to thebalance of the year. Analysts have been
busily cutting their estimates. Market strategists, which we've brought up last week,
have been cutting their estimates of theentire S and P five hundred down down

(23:51):
to about two hundred dollars a share, which would indicate that the S and
P five hundred, currently trading attyone twenty nine is significantly over I'm not
going to say, yeah, itis expensive or overvalued to some of these

(24:18):
estimates. That said, many ofthese strategists and others are predicting that the
S and P five hundred will retestthe October lows October twenty two lows before
the market goes higher. Well,I'm not sure that as retest is going

(24:45):
to happen based on where earnings havebeen been coming in so far, and
even with guidance as conservative as companiesare right now. But I think any
sell off in the market could becaused by the one the Federal Reserve going

(25:07):
a little bit overboard and breaking thingsas they have done with banks. And
we saw what has happened happened withbanks and bank stocks in the month of
March when Silicon Valley Bank got shutdown, when Silverado Bank, which happened

(25:36):
to focus more on cryptocurrencies, liquidateditself, and then the regulators also closed
silver Gate or to me banks SignatureBanking in New York. So all the

(25:56):
banking stocks went down as a group, and down significantly, even though uh
you know, currently the bank stockshave been bouncing off their lows as banks
have been reporting their their earnings numbersstarting um last week with JP Morgan,

(26:26):
uh Wells Fargo, and City Bank, all of which beat the estimates.
This week, we had a Bankof America report Goldman Sacks Morgan Stanley,
which is more of a investment banksthan a regular commercial bank. Goldman Sacks

(26:48):
reported very mixed mixed numbers. Somefeel that they're moving more trying to be
a bank for everybody instead of moreof a specialty bank. Favorite Apple has
a relationship with Golden Sacks through theirApple credit card, and now with a

(27:10):
savings account that's available to we'll saythat to Apple Pay customers, you can
get a four point one five percentsavings account through Golden Sacks that we'll say
with Apple has with Golden Colman Sacks. PNC Bank reported, some of the

(27:34):
other regionals like Zions Bank, WesternAlliance Bank reported all showed reasons will say
not to be so fearful as depositshave at least stabilized and aren't running away.

(28:00):
And there was Charles Charles Schwab,which again didn't do Gangbusters, but
wasn't wasn't falling apart either. Analystsand looking at Schwab or very will say
mixed on the company. Again,there is fears of interest rates continue to
move up that deposits from Charles Schwabwill leave. I did see one value.

(28:26):
Orian investor Bill Nigrant of the OakmarkFunds he is still a buyer of
Schwab. He said it's probably oneof the better better picks in the financials.
They've got a lot of sticky assetsgiven the number of advisors who use

(28:49):
Schwab as a custodian. He alsoindicated that his interest rates are going up.
Money doesn't necessarily sit just in thebank, move either to money market
accounts. Again, that's something thatChuob would would offer and probably make some
fees on. So if it's notin the bank, it'll go into the

(29:10):
one of their money market accounts,or money goes into treasuries, or could
be invested a little bit longer termin some of the credit markets. So
I've got as an example of threeor six months treasuries yielding better than four
percent, and that's annualized, ofcourse, not just for three months,

(29:30):
but having money even for a shortterm rather than close to a zero interest
just cash account that that might be, whether it's your checking or a low
interest savings account, so money typicallyis going to be moving to get a

(29:55):
better rate, at least on theshort term. Um Me, I don't
mind having the cash that I havein my accounts that is on the sidelines,
maybe earning a little bit of money, but I like having that both
for safety and to have that availableto take advantage of some of the inevitable

(30:21):
pullbacks in the market that present alot of of opportunities. And some of
the companies that I like as theymove up and down, well continuing on
with some earnings, you know,on the upside, and I'll come back

(30:45):
to this later. On the upside, we've had companies that I happen to
like, like you know, casinonames that have been on the upside.
Las Vegas Sands led the list.On the down side. Um, well,
I'll go back to the upside here. We'll give another upside Taiwan Semiconductor

(31:07):
on the upside that did very goodthat you know, that's a good harbinger
for you know, for semiconductors,and semiconductors which were beaten up last year
have been inching their way inching theirway back back up. Yes, there's
still some issues. Yes, they'reprobably uh, you know, might be

(31:32):
a slow down and demand for someparts or some parts of the economy that
will, um, you know,that'll be a little little slower. As
an example, um, purchases ofcomputers will probably slow down. Uh,

(31:53):
purchases even of smartphones might might slowdown a little bit. So companies manufacturing
trips for their you know, that'sgoing to be a little difficult for them,
maybe for a little bit longer.Though Taiwan Semiconductor and their report said

(32:14):
we've seen seen the bottom and thingsare going to get going to get a
little better. That that company isdefinitely a leader. When we come back,
I want to talk about, youknow, some of the positives and
a few of the negatives in termsof earnings, and we've got more earnings
to come next week. Say thisis Josh Arnold, mister money Talk,

(32:38):
here to answer your questions. Dogive me a call nine five two nine
two five five six oh eight.I can't say just me. You can
call Jut as well. Nine fivetwo nine two five five six oh eight.
You always get straight talk, notsure coded advice, says Gosh Arnold,

(33:01):
mister money talk with Judd Arnold,though Judd is not here today,
Judd is visiting his daughter down inFlorida. But I'm here to answer your
question on stock spawns, mutual funds, how you should position your investment dollars
including your IRA in four O oneK. Don't hesitate to give us a
call nine five two nine two fivefive six oh eight. That's nine to

(33:24):
five two nine two five five sixoh eight. You'll always get straight talk,
not your coded advice. You've beentalking about some earnings and talking about
them, we'll say talking about energy. Definitely have mentioned the FED and FED
speak. Now FED speaks going togoing to continue maybe a few more days

(33:50):
before the FED goes into a quietperiod prior to their the FED meeting which
will take place on May third andfourth, with their announcement on the direction
of interest rates May fourth, midmid day, followed by the conference call.
Many market participants and strategists are lookingfor the FED to raise at least

(34:12):
once more twenty five baseless points.Indeed, one FED governor, Bostick of
Atlanta, indicated that he'd he wouldbe a voter for one and done at
least a twenty five bass point movein May, and then nothing going forward

(34:36):
and more of a wait and see, but still keeping interest rates high.
James Bullard, who was one ofthe more hawks on the FED, is
still indicating that he'd vote for moreraises and wants to see a higher terminal
rate for short term short term intereststraits up above five percent. With that

(35:07):
higher rate um or and a tightermoney supply slowing the economy or slowing in
slowing inflation a little bit more.Um Me. I think the FED has
gone way overboard with their interest ratemoves and need and they need to,

(35:29):
uh will say, go on apause because anymore they are really going to
stall the economy uh more more thanthey expect and they won't be able to
turn things around on a dime likethey think they think they can. That

(35:52):
said, companies have been adapting tothe FEDS FEDS policies, and consumers right
now are I'm not going to saythey're they're still pent up and I'm not

(36:15):
going to say they're spent up,but consumers are still um we'll say,
spending money. They're spending more moneyon experiences. As you can see from
the earnings coming out from the airlines. You can see people still spending money

(36:36):
even with higher interest rates. There'sstill a need uh and still a shortage
of houses and you can see thatright now in the prices of the home
builders, um, which have donedone exceptionally well. But you know that's

(37:00):
not an area that I have havefocused on. Banks, as we said,
have recovered a little bit. TheFETIS said they're interested in and seeing
state stability at banks now I'm nota bank investor, haven't been, but
with higher interest rates. We've talkedabout this before. Banks um investment portfolios,

(37:25):
whether it be through bonds or theirloan portfolios, I think are not
worth their stated stated values. UM. A big concern that is still out
there for the market is what's goingto happen with the debt ceiling. With

(37:52):
UM that ceiling getting close to beingreached, and that could create create some
issue come the end of May andearly early June. We'll touch on that
more in the in the coming comingweeks, but that still is something to

(38:15):
to pay attention to and maybe areason to keep a little bit larger cash
balance in your investment portfolio should therebe a little bit negative with that little
bit more volatility. The debt ceilingyou know, will be solved. It's

(38:37):
just a matter of when and howhow soon. But this is something that's
known and you would hope that ourpeople in government are actively trying to deal
with it now rather than wait tillthe last minute. But most of the

(39:00):
time that gets gets a bunch ofhow do we say, let's just wait
for it until it procrastinated. It'sprocrastinated on until until the deadline is right
there, sort of what you mighthave done with studying for final tests.

(39:24):
Meantime, let's go back to someearnings. We've had positive not numbers coming
from many of the semi semiconductors,in particularly the semiconductor manufacturers like Taiwan Semiconductor.
Had positive news coming from Las VegasLas Vegas Sands that to me is

(39:45):
good for many of the other ourcasino casino companies and with LVS beating for
the first time in a long time, that has helped boost wind resort.
LVS uh did well on the backsof China reopening. Um. On the

(40:07):
down side, they've got American Express, well they they missed um. A
T and T miss missed a littlebit uh as as well. Not something
I'm running out to buy, thatbeing a T and T. But uh

(40:30):
uh they do pay a nice,nice dividend um. But Tesla uh missed
um. But they're they're trying toincrease their their volume and their installed base
and they've continued to cut, youknow, cut prices. Well, they

(40:50):
being down on a miss um.I'm not going to say as necessarily created
a buying opportunity for Tesla, Butif Tesla's going to be selling a lot
more cars, um, and they'recutting prices. That's gonna gonna bleed through
to other car manufacturers are trying tocompete with Tesla on electric vehicles. I'm

(41:15):
still we'll say, I'm still aludite on that. Yes, the electric
cars can go fast. Yes,yes, the electric cars like Tesla and
others are are pretty. But Ilove my internal combustion engine. I like

(41:35):
being able to shift gears in myin my car. I like that.
Yes, it's it's a little onthe older side, but it drives very,
very well. When it comes toTesla, I guess there are numerous

(42:00):
adherents, numerous people that love Tesla, probably as much as I love I
love my Apple. But I thinkthat Apple has got a lot stronger balance
sheet than Tesla does. So that'dbe a company that I'd be wanting to

(42:22):
buy more of, even if theywere to pull back on their earnings report.
Come May fours next week, alot of earnings including Microsoft, Meta,
Amazon and Google and others. We'llbe watching and we're here to help
you. I'm Josh Arnold, mistermoney Talk for Judd Arnold nine five two

(42:45):
nine two five five six week joshArnold Investment Consultant is a registered investment advisor
located in a state of Minnesota.All securities discussed are for informational purposes only.
Investing contains risk, including risk ofloss. Consult your investment essonal before
making any decisions about your investment portfolio.