Mr. Money Talk

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Episode Transcript

(00:10):
Josh Arnold, mister money talk withJudd Arnold here to answer your questions on
stocks, bonds, mutual funds.You should position your investment dollars, including
your IRA and four oh one K. Don't hesitate to give us a call
nine five two at nine two fivefive six o eight. That's nine five

(00:33):
two nine two five five six eight. I will say it is just me
today as Judd is jud is withhis daughter, my granddaughter for the weekend,

(00:55):
and he is unable to be withus in person. But he did
send his regards and we did discussa few of his ideas and we will
cover them and more during this show. But you do have to give us

(01:21):
a call. Nine five two ninetwo five five six oh eight. That's
nine five two nine two five fivesix eight. You always get straight talk,
not sugarcoated advice. This past weekhas been a week of earnings,
and earnings have been on the forefrontthis week. They'll be on the forefront

(01:46):
next week. Well, not completelyon the forefront next week, but at
least for the next several several weeks. I think the biggest thing that'll be
on the forefront and on the mindsof many traders next week is the Federal
Reserve meeting that takes place on Wednesdayand Thursday. At a focus being next

(02:13):
next Thursday on what FED Chair Palwill cover during during the conference call.
After the FED raises interest rates anothertwenty five basis points YEP and all an
all likelihood, FED Chair Pal willcomment on the need to continue to be

(02:45):
vigilant in the face of inflation.It will continue to comment that the FED
is on the case and there's stillmuch work to be done, but the
market is will say, anticipating thatafter the FED and j Pal say all

(03:14):
of that, that the FED willbe on pause and start waiting to see
the effects of what they have donewith interest rates and their quantitative tightening policy.

(03:36):
Over the next several months, inflationstatistics have been coming down and coming
down, I'm not going to saynecessarily fast, but they've continued to come
down. Yes, there is somepart of inflation that is still considered sticky,

(03:57):
that being food prices are still somewhatelevated and wages are still also somewhat
elevated. But housing prices have beencoming down, Apartment rents have been coming
down. The gross domestic product forthe last quarter came in at one point

(04:26):
one percent, which was below thetwo percent. Gross domestic product moved positively,
and that definitely, in my estimation, signals and economic slowdown and shows

(04:47):
that there is definitely disinflation happening,if not deflation in certain segments of the
of the economy. It's the GDPnumber is definitely not showing outside economic growth

(05:10):
anymore, and that could become problematicand it could be indicative of a we'll
call it a stagnant economy and alsoindicative that at some point later this year,

(05:31):
the FED might have to reverse course. The biggest issue that the FED
definitely faces is what is happening withbanks, and in particular certain banks that
the FED has been forced to closeand may even before to take into receivership,

(06:01):
that being First Republic Bank sometime nextweek. And as the banks balance
sheets will say, are under fire, and jud and I have covered this
previously with their balance sheets under fire, with interest rates still up and their

(06:30):
portfolios primarily of bonds if they wereput in a mark to market basis underwater,
meaning that with interest rates up,bond values have declined, and if

(06:54):
bond if the banks were forced tomark to market those bonds and not hold
them to maturity, at which pointthey'd get face value, that those those
bonds would be sitting in lost positions. I will reiterate that last year the

(07:15):
Long Term Treasury Index marketed by TLTwas down a third, the same as
the nasdeck index was down a third. This year, TLT has has come
up in value, but not tothe same degree as nasdeck has has come

(07:42):
up in value. Loans loan valuesat banks have also come down. Not
to mention, there still is anissue with loans tied to commercial real estate
that you can see some of thevalues of commercial real estate coming down here

(08:03):
in the Twin Cities alone. Thereis if not now, there will be
a a lot of office space that'llbe coming on the market if it hasn't
already. Companies, whether it beWells Fargo Mortgage, whether it be Blue

(08:28):
Cross, Blue Shield, whether itbe United Health, whether it be Target,
have been reducing their office footprint.That's here in the Twin Cities.
If I take a look at NewYork City, sl Green, the largest
commercial real estate owner in New YorkCity, is seeing a lot of vacancies

(08:54):
that brings down the price of realestate Vernado Real Estate has cut their dividend
distribution till the end of the year. They're probably the second largest owner of
commercial real estate in the New Yorkmetropolitan area. In I'll say, Blackstone

(09:16):
has had some issues with their commercialreal estate and their real estate investment trust.
Now these are private, private realestate investment trusts, not publicly traded
real estate trust. The private stuffvery difficult to get out of or liquidate

(09:39):
early. The publicly traded real estatetrust some of which I do like,
but they're not necessarily tied to commercialreal estate. Those are very easy to
get into and out of. Andthat's a different for a different story point.

(10:01):
Commercial real estate, commercial real estateloans are under fire. Banks are
having or owning that. Banks creditstandards are going to increase, so credit
is going to get tighter, andthat that is going to again also slow

(10:26):
we'll say slow the economy and actuallybe deflationary. That also could help the
FED. But we'll see what theFed says on Thursday. But in the
meantime, we've got some other companiesto talk about in terms of some positive

(10:50):
earnings that happened and how you canyou can benefit. This is Josh Arnold
mister money Talk with Judd Arnold hereto help you with your investments both inside
and outside your retirement account. Callus nine five two nine two five five
six oh eight. You'll always getstraight talk, not your coded advice.

(11:18):
This is Josh Arnold's miss your moneyTalk with Judd Arnold, although not this
week. This week you just haveme, mister money Talk Josh Arnold here
to answer your questions on stocks,bonds, mutual funds, how you should
position your investment dollars including your IRAin four oh one K, don't hesitate

(11:39):
to give us a call nine fivetwo nine two five five six oh eight.
That's nine five two nine two fivefive six o eight. You'll always
get straight talk, not sugarcoated advice. Wow. This this past week,
plenty of earnings to talk about,and it's definitely we'll say it's definitely about

(12:07):
the money, it's about the shoes, and it could be about focus on
sports. This past week we've hadplenty of sports, and I do like
talking about sports. I do liketalking about leisure related companies. As part
of the focus that I have hadfor a lot of years has been on

(12:30):
companies involved in the Internet, companiesinvolved in leisure companies that are related to
China, companies involved in real assetssuch as real estate, or we can
throw in energy and doing some shortterm trading. The asset allocation model that

(12:52):
I have used, and I'll saywe have used jud and I is keeping
up to thirty percent in cash,both for safety and to take advantage of
the inevitable market pullbacks. And typicallyin any year you might have three to

(13:13):
four five to ten percent pullbacks inthe market marketplace, and the balance of
the money invested in what we believeis undervalued growth growth companies or mispriced merchandise,

(13:35):
and then also faster, faster growingcompanies. I've put my focus on
larger companies. Judd has focused onsmaller to mid size companies, but this
past week, leisure companies have beenin the focus. I've been a focus

(13:58):
some what we want to talk alittle bit about some of these, so
we'll talk about it's about the money, it's about shoes, and definitely there's
a focus of this past week.In sports. This week we've had hockey
and hoops playoffs. We've had somegood baseball Go Twins, Go Twins,

(14:22):
and the nf and the NFL Draft. How do we put some of this
in terms of stocks. Well,I'm not going to say this is easy,
but it is is still somewhat easyif you wanted to. With the

(14:46):
playoffs coming, we'll say both.We'll say both hockey and yeah, hockey
and basketball. Back we've had.You can't do any I'm not going to
say any better, but you can'tdo much better than look at looking at

(15:09):
Madison Square Garden Sports and Entertainment marketsymbol MSGS, this company has um done
reasonably well and over a period oftime. I'm not going to necessarily say
you want to be associated with theUM with the large owners of this the

(15:30):
Dolan, the Dolan family, butMadison Madison Square Gardens Sports UH Sports gives
you the ownership stake in in twovery hot teams UH this this year the
Knicks, the Knicks and the andthe Rangers. UM. I would say

(15:52):
that's that's not too bad, toobad a deal. UM. Since the
beginning of this this year, thestock has had a had a very nice
climb from one hundred and eighty sixdollars to two hundred dollars. Earnings are
starting to go up, and theseare two premier properties, the Rangers and

(16:18):
the Knicks and particularly if they winor I'll say especially if they win.
If they lose, well they stillget you know, pretty pretty good good
crowds and having New York moving movingpositively in both basketball and hockey playoffs.

(16:41):
I'll say overall is good, goodfor the sport. You've got an opportunity.
And we've talked about this to ifyou're a baseball fan, as i
am, most baseball fans say,geez, I'd like to be an owner
of a team. Well, throughLiberty Media's ownership stake in the Atlanta Braves,

(17:11):
you can be an owner of theAtlanta Atlanta Braves. Same same deal
applies to the to the Braves asit does to the Knicks and the Rangers.
One of the few publicly traded companiesthat allow you to and to get

(17:34):
an ownership position UH in a professionalsports franchise. What you're getting, really
or where the money is going tocome is from UH advertising and we'll call
it the media media rights for forthese these teams. That's where the money

(17:57):
is going to come. The Uthese are I'll say the float is small
on the on the Braves, UM, but it would say we'll call this
a slow, slow moving operation thattypically will do reasonably well during the the

(18:27):
baseball season, and we're there.We're there right right now with the with
the NFL draft. Well, nowwe start looking at some of my favorite
companies that have definitely been under fireUM over the last last year, concerns

(18:52):
about too much competition UH in whati'll call the gambling space, and particular
in inside sports betting and online gambling. There is, yes, definitely a

(19:15):
lot of a lot of competition.There's a lot of concern about marketing expense
in order to get UM to getand maintain h custom customers, and there

(19:36):
aren't particularly in the online space,there's not any any big moat as there
would be for actually owning owning theproperties. But here the focus would be
on companies like fan Duel, whichis owned by a British company called Flutter

(20:00):
and and Draft Kings would be thetwo primary online online betting betting and we'll
call it draft draft pot draft potential. Both of both of these should do

(20:22):
well in any UM we'll say anyeconomic slowdown UM just because of the ease
of ease of operation and the abilityto UH make your bets, either make
bets online and do that both mobileor on a on a regular U p

(20:51):
PC. Both both companies offer alot of deals in order to entice gamblers,
and their operating costs are high.In the case of Draft Kings,
they're looking to start generating some profitslater later this year and into next.

(21:12):
Fan Duel again part of Flutter couldbe an interesting potential, but you do
get Flutter, which is gets alot of the English and European betting operation.

(21:32):
Though sometime later this year Flutter isgoing to spin off fan Duel in
an IPO. That's kind of interestingbecause just a few years ago Flutter bought
Handuel as a front as a separateoperation. The other will say online opportunities

(21:53):
would be through Pen Gaming and definitelytheir Barstool Sports operation. Penn Stock has
kind of been stuck in a verynarrow trading range between we'll say twenty eight
dollars a share and about thirty fivedollars a share. Penn is going to

(22:14):
report their earnings as his Draft Kingsnext Thursday, same time as Favorite A
Favorite Apple, and I am expectingPen which has said that if they're generating
some profits, I do expect Pento finally finally break out to the upside

(22:37):
at some point in time. Andthen we have Caesars with their sports betting
properties as well as their big sportsbook, so that's another area took to
look at. And then lastly,I've got to talk about another sports related

(23:03):
company, and that's because next weekit's the run for the Roses and Churchill
Downs came out with their their numbersthis week and they beat the street top
top line, bottom line. Theyraised their guidance. But again this is
a fairly narrow company, just focusingin on a few areas. But Churchill

(23:33):
down Stock has done very, verywell. So there we've got it opportunity
to participate in sports and leisure,and even in any economic slowdown, these
companies will continue to be around andshould do should do reasonally well. When

(23:57):
we come back, talk about afew other places that have held up well
in any economics slowdown. This saysJosh Arnold. Call me nine five two
nine two five five six oh eight. This says Josh Arnold. Missed money

(24:23):
talk. Usually I'm here with Sunnumber two, Judd Arnold, but this
week Judd is with his daughter andI'm here to answer your questions on stocks,
bonds, mutual funds. You shouldposition your dollars both inside or outside
your retirement account, including your IRAin four oh one, K give me

(24:47):
a call nine five two nine twofive five six oh eight. That's nine
five two nine two five five sixo eight. You always get straight talk,
not your coded advice. Well,my fiance Annie, well she doesn't
like to calling her fiance. Shemuch prefers to be calling her partner.

(25:07):
But my partner Annie gave a big, big boost, a big boost to
Hershey's chocolate. She is a big, big buyer of Hershey's chocolate. Likes

(25:30):
the bars, likes the likes thekisses, likes the little blocks. Well,
I'm not going to say that Idon't like Hershey's chocolate. Who doesn't
like Hershey's chocolate. Heck, I'veeven been been to the Hershey's chocolate plant
numerous times, both in my youthand adulthood. Used to watch when I

(25:59):
was in college many years ago,would go from Lancaster, Pennsylvania, where
I was in college at Franklin andMarshall College, over to Hershey to watch
the Hershey Bears play hockey in thein the American Hockey League. Always a
lot of fun. But Hershey's beatand I'll say beat and guided up.

(26:30):
Wow. Who would have Who wouldhave thought a little chocolate heer would do
so well? But Hershey's continues toout outperform hershey stock year to year to
date, you know, just slowlybut surely climbing. Even last year,

(26:55):
with interest rates moving up, Hershey'salso moved up. We can we can
say that Hershey's is a safety stock. UM has steady growth. Who who
in any economic environment is not goingto be UM buying buying a little,

(27:18):
a little sweetness. Hershey's fits fitsthe bill. Is it a fast growing
company? No, definitely, definitelynot um. Is it a product that
somebody wants? Yes? Is therea lot of competition for for Hershey's and

(27:41):
not not? Not so much,not so much. Um. Do they
have a lot of chocolate products?Yes, yes they do. There's a
stock pay a dividend, Yes itdoes. Is the stock expensive, Yes,
you do pay a premium for Hershey'swith a price earnings multiple of thirty

(28:07):
one? Uh, yes it's It'sa little more expensive than an old favorite
Coca Cola. Yes, it's alittle more expensive than than pepsicola on a
price to earnings multiple. But thereyou have it, Hershey's is going to

(28:33):
be around, and we would putthat as a recession stop. Now.
Hershey's numbers did follow positive numbers thatcame out earlier this week from Coca Cola
and also from Pepsicola. UH.Coke saw a nice increase not only in

(28:53):
in UH, in revenue and inearnings. But they're their move up came
on on the backs of more peoplegoing out UH and buying Coke products when
they were out and about whether itwas at a an arena, whether it

(29:15):
was at a restaurant, whether itwas at a movie theater. But Coke's
business, um, you know,from outside of a retail environment was pretty
pretty strong. UH. Coke's retailsales numbers and case sales also up and
customers did show that they were willingto pay up for you know, for

(29:41):
Coke's products. So Coke's Coke's priceincreases stuck. Pepsicola, well, they
didn't have the um we'll say,the case volume increases, but they were
able to have their price increases UHstick. So they also had a pretty

(30:06):
good report that was well received byby the market. Pepsi also the owner
of Friedo Lay, which is thelargest worldwide seller of corn based and salted

(30:26):
snacks. So we put those thosecompanies in the area of safety safety stocks,
or some people might, uh likemy friend Chris Divorc of Divore Technical
Research, might look at Coke,PEPs and even Hershey as stupid stocks,

(30:48):
as in m boy, I'm sostupid. I should have put my money
in these companies, particularly in anin an economy that might be slowing down
and could even be tilting towards towardsa recession. Another we'll call it safety

(31:18):
stock, would be McDonald's. McDonald'shit a hit a big high this past
week as they too beat beat thestreet in terms of top top line revenues
and bottom line earnings. There wasone comment that was made by the McDonald's

(31:44):
CEO during the conference call that Idid find very interesting, and that was
that McDonald's starting to see the impactseeing the impact of inflation on their their
customers. As customers might be orderinga big Big Mac or chicken fingers um,

(32:07):
but they're cutting back on the extraso they might not order French fries.
They'd order the big Mac, buthold the French fries. They made
order the big Mac and the Frenchfries but hold on on the coke,
so that that says to folks atMcDonald's they might have topped out or reach

(32:35):
the maximum what they can do interms of of price in increases, and
that quite frankly, would be agood sign in terms of the Federal Reserve
U getting the economy to slow downor bring down inflation. But here we

(32:58):
go coke, Pepsi, Hershey's Kisses, McDonald's safety stocks. I'll bet a
little expensive on a price to earningsmultiple, but they've always been traded at
the premium numbers based on their premiumproducts. This is Josh Arnold, mister

(33:24):
money talk usually with Judd Arnold hereto help you with your investments. Nine
five two nine two five five sixo eight. You always get straight talk,
not your coded advice with is JoshArnold, mister honey talk with Judd

(33:46):
Arnold here to answer your questions onstocks, bonds, mutual funds. You
shouldn't position your investment dollars including yourIRA in four one K. Don't hesitate
to give us a call at ninefive two two five five six oh eight.
That's nine five two nine two fivefive six o eight. You always
get strength talk, not sure codeof device nine five two at nine two

(34:10):
five five six O eight. Wecan't let this week go without talking about
big tech because four of five bigtech companies reported their earnings that this past

(34:35):
past week. Not to mention,of course, an old, an old
big tech company reported as well.It's past week. Huge, Microsoft,
Google, Meta also formally known asthe Facebook Favorite, Amazon and Intel all

(34:58):
reported numbers this past week. Themarket rewarded UM, Microsoft, and Meta
on their numbers, UH, Googleand Amazon definitely not rewarded on their numbers.

(35:21):
Intel, well, they did UMdespite having a big loss UM and
probably the largest loss that Intel hashad almost ever. Intel got got a
nice reward in the form of ashare UH increase because they seemed to indicate,

(35:47):
and I say seemed to indicate thata bottom had been reached in PC
sales and that would be a thatwould be a nice boost quite frankly,

(36:07):
to UM. To other semiconductor manufacturers, notably Advanced micro Devices, which reports
their their numbers next next week,Taiwan Semiconductor, which had already reported UM,

(36:29):
Applied Materials, Serious, Logicum,Skywork Solutions, UM and Micron,
and definitely Navidia. As as wego forward and get to their their earnings
coming coming up. Um. Butbut the big news is still with Microsoft,

(36:59):
Google, uh, Meta and Amazon. Each one did uh we'll say
beat on beat on the top line, definitely beat on beat and did better
than expected on the On the bottomline, Microsoft got a very nice,
um, very nice move up intheir stock and the stock is you know,

(37:27):
moving to it definitely an annual high. Microsoft emphasized their um their generative
artificial intelligence UM we'll say buy ofor not, I'll say contribution with open

(37:52):
ai, a privately held company,and the the chat pot Chat GPT,
and how that product is being integratedinto all of Microsoft's other products and in
particular being integrated into the Azure aswell as being integrated into the Being Search.

(38:19):
Microsoft is definitely pushing on the artificialintelligence to further or be further integrated
into some of their their other products. Microsoft saw a nice boost also in
gaming and a little bit into theirtheir legacy business businesses. Microsoft did guide

(38:45):
up Google's reports well, not asgood as as Microsoft, but they were.
They also mentioned the importance and thedevelopment that they're doing of artificial intelligence
product and how that's going to beintegrated more in some of their UM other

(39:07):
other businesses, including YouTube, buttheir growth in terms of advertising business,
which is where Google makes the bulkof their money, has has not been
increasing to the rate that people hadhad expected. So Google stock did not

(39:29):
get that boost. One thing thatdid come out of Microsoft and Google's earnings
call was the name the Vidia andn Vidia Navidia chips being a backbone for
UM, a backbone definitely for UMfor artificial intelligence. Nvidia it's not going

(40:00):
to report their earnings for a fewweeks, but that is a stock that
is we'll say, come way backfrom from last year after being knocked down
on fears that online gaming was slowingdown the youth. It got knocked down

(40:20):
also on cryptocurrency mining because some ofthe Navidio's chips have been used for cryptocurrency
mining, and we saw what happenedlast year with the value of cryptocurrency being
cut significantly and half I had justa quick aside, we are not investors
in cryptocurrency. We do not believein the in the concept of cryptocurrency.

(40:47):
But that's a separate topic that wecan talk about at another time. But
Navidia's chips have really gotten a niceboost just on the backs of artificial intelligence.
So they're probably considered the leader inthat. A close second to that
is going to be Advanced micro DevicesUM, and we're going to see,

(41:10):
UM see how that what they're whatthey are doing, and what they're saying
when Advanced micro Devices reports their earningsnext next Tuesday. And I'm looking for
some you know, some positives there, uh META, Well, they're more

(41:32):
on the will say, the costcutting, cost cutting kick. They've cut
just about thirty percent of their theirworkforce. They are focusing more on efficiencies
and more on UM what they're goingto do or need to do to drive

(41:52):
and increase customers or daily market users, which have continued at least not to
ramp up, but they've have atleast maintaining maintaining them and having a little
bit of growth coming coming forward.Does look interesting, and they are they

(42:13):
too are talking about artificial intelligence.Favorite Amazon, Well, they beat U
and have probably had a surprise beatall all around. But their stock got
after i'll say, after initial runup on the numbers during the conference call,
their stock got knocked as the cfall mentioned a slowdown in Amazon Web

(42:39):
services and traders have focused more onAmazon Web Services than on any other part
of Amazon's business. Amazon too talkedabout in their internal AI, but not
to the extent that would create alot of buzz. Next week, more

(43:04):
earnings from the likes of AMD,Caesar's Palace, Pen Gaming, Draft Kings,
Oil Company, Northern Oil and Gas, and next Thursday, abb you
on pins and needles. Not becausethe FED is going to come out with
their announcement, but Apple will bereporting their earnings. Will cover that and

(43:27):
more. Meantime, any questions callme Josh Arnold, mister Money talkin two
nine two five five six o eight. Josh Arnold Investment Consultant is a registered
investment advisor located in a state ofMinnesota. All securities discussed are for informational
purposes only. Investing contains risk,including risk of loss. Consult your investment
professional before making any decisions about yourinvestment portfolio.