Mr. Money Talk

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Episode Transcript

(00:00):
An afternoon. This is Josh Arnold, mister money Talk normally with Judd Arnold,
but not this week. Judd isaway visiting his daughter in Florida.

(00:24):
But I am here to answer yourquestions on stocks, bonds, mutual funds.
Now, you should position your investmentdollars including your IRA in four oh
one K. But you do,yes, you do have to give us
a call at nine five two ninetwo five five six o eight. That's

(00:44):
nine five two at nine two fivefive six o eight. You always get
at straight talk, not sugarcoated advice. As we begin, I do want
to apologize for any coughing, sneeze, etc. Or even my hoarse voice

(01:07):
having to do with some allergies thatI'll put it. Put them as unknown
allergies that I've never had before.So please bear bear with me as we
go through through this show. Butagain, any questions you might have nine

(01:30):
two nine two five five six zeroeight, you always get straight talk,
not sure coded advice. Another upand down week in the in the Marketplace,
with both the Dala and the Sand P five hundred finishing in the
in the negative for the second secondweek in a row. The NAS deck

(01:53):
while it finished negative on Friday,completed another up week with some of my
favorites doing pretty well this week.And an addition, a company that will

(02:14):
say has been around for a whileand as the leading search company had on
had this week had their not onlyanalysts update, but they're app developers update,
and Google really made a big catchuptrade and caught up in terms of

(02:42):
its year to date game to Microsoft, which has been doing very well on
the backs not only is their earnings, but on the back of Microsoft for
a into artificial intelligence and Microsoft spendingup to thirty billion dollars for an investment

(03:12):
into private company open Ai, whichhas a product called chat GPT. Microsoft
has taken an early lead we'll say, into regenerative artificial intelligence with this particular
product, the chat GPT, whichthey plan on adding to all of all

(03:40):
of their products and their offerings.Now. Microsoft is doing that initially so
they can get we'll call it aleg up in search, to which they
do not have a large share ofthe search market with their being Search search

(04:05):
Engine. The larger share of searchstill goes to Google, and Google has
been working diligently on their artificial intelligenceoffer and they too will be incorporating,

(04:26):
incorporating their artificial intelligence offer into moreof their more of their products. Now
right now, there are some analystswho are saying that artificial intelligence right now
is where we'll say the Internet wasin the late nineties, and a number

(04:53):
of companies are trying to we'll saytake advantage of the i'll say excitement around
artificial intelligence. And numerous companies arestarting up with as was true with the

(05:14):
Internet and companies trying to develop productsor services that's come through the Internet in
the late nineties. Those companies donot generate a lot of profits yet.
They might have some revenues, butnot a lot of profits. Not all

(05:39):
of these companies are going to bearound anytime in the future. But again
there is a lot of hype.Whereas one analyst I saw said, there's
a lot of whiz bang related toartificial intelligence. Now, in my i'll

(06:01):
say limited experience, we've already seenartificial intelligence already working. Even it fits
small through every company from Amazon.Hey, if you've got the Alexa device

(06:24):
at home, I would say thatthat is the use of artificial intelligence.
If you have Apple Siri, similartype of concept. If you've got or
you know, download Pandora or Spotify. They will also use some measure of

(06:51):
artificial intelligence to feed you certain typesof music. Google has been using UH
that to help in in search alsofor a long time. But as we
go on the uses of this artificialintelligence, and particularly the regenerative artificial intelligence,

(07:17):
the users will increase and that couldhelp companies with their productivity going you
know, going forward. One developerwith with Google, Wendy's, is going

(07:38):
to be starting in the next montha trial in Columbus, Ohio at their
at numerous outlets to install the chatbox at you before you get to the
drive in Windows. So you say, when you place your order, you'll

(08:00):
be talking to a chatbot or arobot that will take your order and then
you'll pick pick that up. UM. Wendy's wants to see how not only
cost effect of it is, butalso what the productivity game they'll get from

(08:22):
from using this. So there's areal life example. And in this case,
you know they're they're using Google uh, Google's product for that UH and
they're not not as much interested.And we'll call the pick and shovel or

(08:43):
pick and shovels of artificial intelligence.That being the the chips that that could
be used, chips coming from thelikes of Navidia, which would be the
leader in this, or Advanced microDevices, which is coming on strong in
artificial intelligence. But it was veryi'll say very interesting, quite frankly to

(09:13):
read about Google's App Developer Conference andwhat they're doing to expand artificial intelligence,
in particular regenerative artificial intelligence going forward, you know. More to the point

(09:33):
when we talk about Google doing wellor Microsoft coming up one artificial intelligence,
we'll also see Facebook now known asMeta. They have talked about artificial intelligence
being applied to their products, andMeta has cut about a third of their

(10:00):
employees as they both to get productivitygains, both to cut some of their
costs and also to concentrate on areasthat they do the best in. And
Meta this year has seen pretty bigincrease in their stock price just off their

(10:28):
focus on generating profit as opposed tojust trying all kinds of things that might
happen. So, if I wereto look right now at the what was

(10:48):
known as the Fang and that's notDiamond Energy, that's their market symbol f
Anng. Diamond Energy blue stock isunderperformed, but fan as in Facebook,
now Meta, Amazon, Netflix,Google, we can add an apt Apple

(11:15):
favorite Apple and then even Microsoft tothat. Or instead of using Netflix,
I could use Na Video. Thesestocks, which are heavily weighted in both
the SMP and in nas DEC interms of market capitalization, could well continue

(11:39):
to outperform going forward. Now that'snot to say they're going to go straight
up, because we've got could havean inevitable pullback coming due to concerns with
the debt limit being breached. Butwe'll talk about that and more when we

(12:03):
come back. I am Josh Arnold, mister money Talk. Give me a
call nine five two nine two,five, five six or eight here to
help you. This is Josh Arnold, borister Money Talk with Judd Arnold.
Well usually Judd is Judd is here, but this week he is down in

(12:26):
Florida with his daughter. So you'vegot me. You've got me with my
allergies working. So please forgive thehoarseness, the squeaky voice, and even

(12:48):
the sneezing that might might come along. Wow. There is another concern with
the in the in the market placeand both a stock market and the bond
market. And usually when I talkedabout concerns in the marketplace, at least
on a macro sense, I've typicallybeen talking about the Federal Reserve and the

(13:11):
direction of interest rates. You know. FED speak has continued to be on
the hawkish side, with concerns aboutthe stickiness of inflation, particularly stickiness of
wage inflation being up, the stickinessof housing prices continue to we'll say,

(13:37):
move up or not moved down significantly, and also the stickiness of food prices
continuing to stay stay up. Othercommodity prices currently have continued to come down,

(13:58):
whether it be or aluminum, oil, natural gas, fertilizer, sugar,
steel, those prices have continued tocome down. But those the prices
coming down one have not necessarily beenincluded right now in pricing of finished goods.

(14:24):
But at some point we'll see pricesright now level off. I don't
think prices of goods that we're goingto have to buy, I don't see
them coming down significantly unless we havesome type of recession and or we'll say

(14:46):
there's too much merchandise that's left onthe floor of any retail stores. Well,
this week we'll find out how muchmerchandise is still sitting on shelves,
how much merchandise is we'll say,in inventory, what the turnover is in

(15:09):
in UH in retail stores, andwhat the retail stores see um see with
consumers and spending. Now, we'vegot some of the major retailers reporting next
week, including Walmart on there.The focus of course is going to be

(15:31):
on food, as Walmart generates mostof their dollars from from grocery. You've
got Home Depot, TJ Max,Target, and foot Locker and Lows all
reporting and all going to you know, focus on a slightly different sector of

(15:56):
fun of retail. So do haveto pay pay attention to what the retailers
are are saying and how they're dealingwith we'll say, with pricing coming from
there their supplier supplier companies. Butthe Fed coming back. The FED is

(16:29):
still talking about interest rates being higherfor longer, although at some point they
might pause in terms of raising rates, as they just raised another twenty five
basis points just a few weeks ago. Their next meeting is the middle of

(16:52):
June, and depending on what happenswith i'll say Congress, the Senate,
and the President dealing with the deaththe debt ceiling, the Fed may leave
interest rates untouched or may continue tomove up twenty five basis points depending on

(17:19):
what their quote unquote data says.I have been I'll say, we'll say
I've been angry, put it mildlyat the FED for the will say the

(17:41):
speed and that they have raised interestrates over the course of last year from
zero percent to five percent without waitingto see the impact that they've had,
that their moves of had on theeconomy. And they keep saying, well,

(18:03):
you know, the data shows this, this, this, and this,
and therefore we're going to have tocontinue to raise interest rates to slow
the economy down and to bleed outinflation. Well, I have been talking,
you know, in the past,that the FED will keep doing this
until they break something. All theFed, as we have talked for the

(18:26):
past month and a half, definitelybroke something and that was we'll say several
banks. First it was Silicon ValleyBank and Signature Bank, and since then

(18:47):
we've had First Republic Bank. Thisweekend, we might have and I do
emphasize the might. I have noidea. We might have Pacific West Bank,
and there could be others that theFDIC might have to engineer a bailout

(19:11):
on all because of the Feds we'llsay, raising interest rates so high and
so fast, and recently with i'llsay depositors withdrawing funds from the bank at

(19:33):
low interest rates on savings to moveto higher interest bearing money market accounts or
shorter or long term treasuries. Sothis has definitely put a crimp into banks,

(19:56):
in particular the regional banks, whichstill are definitely a linchpin of the
economy. More regional banks, youknow, are lending money out to local
businesses for business expansion, for realestate, real estate development, and when

(20:22):
they're unable to do that or toomany, too much deposit money is moving
out. That puts a crimp oncredit. And if you have a crimp
on credit and all, that toowill contribute to an economic slowdown. Now,
in terms of bank stocks, we'veyou know, I've gone over before.

(20:48):
I am not a bank stock investor. I've only invested, you know,
for a brief period of time,very very brief period of time,
like a week back in two thousandand eight, a trade I did in
JP. Morgan might have done thattrade twice during the last we'll say the

(21:15):
mortgage banking meltdown. But other thanthat, I've stayed stayed away from banks
and several other businesses, but banksin particularly the regional banks have continued to
suffer. As you know, somepeople say, well, it's the short
sellers that are going after these thesebanks. Maybe, but I would also

(21:41):
look at the number of these banks, regional banks that are in exchange traded
funds both broadly speaking or in thespecific funds that will focus or on regional
banks or in banks in general.And the ETFs are very very liquid,

(22:11):
but they hold a lot of illliquid assets. That being the regional banks.
There typically is not a lot oftrading in them. But as the
selling goes on in the ETF,the ETF has got to sell assets and
usually to meet the redemptions. Andusually that ETF could be the one that's

(22:38):
selling down the regional bank bank stocksjust because the amount of dollars that come
into them and come in on theon the downside. So that is to
me a negative, We'll say withthe ETF. And if I am using

(23:00):
ETFs other than abroad NAS dec IndexQQQ or the Spider Spy or the Diamond
d IA, make sure that youknow what's what that is invested in and

(23:21):
how they are are weighted point ofall this, the fed's interest rate moves
have had an adverse effect on banks. I think that the banks definitely are
not a place to be. Ifyou want to be in financials, I

(23:45):
would take take a look at possiblywill say Visa, American Express or even
favorite Apple. This is Josh Arnold, mister money talk here to answer your
questions on investing. Give me acall ninety five two nine two five five
six o eight. This is JoshArnold, missed or money buck here to

(24:11):
answer your question on stocks, funds, mutual funds. How you should position
your investment dollars including your IRA infour oh one K, don't hesitate to
give us a call at nine fivetwo nine two five five six o eight.
That's nine five two nine two fivefive six oh eight. You always
get straight talk, not sure codedadvice. It's ninety five two nine two

(24:37):
five five six o eight. Anotherinteresting week on on the doubt in the
marketplace. Stocks did finish down forthe second consecutive week. Continued to concerns

(25:00):
not only about the FED. MacDown'd speaking mac mcreley so continued concerns about
the FED and now concerns about thedebt feeling and whether Congress, the Senate,
and the President can reach a negotiatedsettlement. I do think until that

(25:22):
happens, we could have some continuedto volatility. I do believe that at
some point that this will be resolved. I think that als we say,
cooler heads will prevail. But inlistening to some of the talk coming from

(25:49):
both Congress, congressmen and women andsenators, looks like it's going to be
a tough, tough sled And ifI really want to hear a doomsday speech,
I can listen to Secretary of TreasuryJanet yelling you know who who has

(26:12):
talked this week. Unless something happensto raise the debt ceiling, Unless Congress
drops their demands for spending spending cutsor spending restraints, and Congress comes up

(26:34):
with a clean bill just to raisethe debt ceiling, then chaos is going
to prevail. We could have aconstitutional crisis. And what the Republican Congress

(26:56):
has proposed in their a bill toraise the debt ceiling are draconian cuts to
the budget. Well that's um thatbecomes a little bit overboard. Coming from
the Secretary of Treasury and former UHFederal Reserve chief. Um, that to

(27:25):
me is not helping helping matters.Um, that's woy that that that kind
of we'll say that kind of speech. Um, I'm not going to say
rings of of desperation, but itmakes her sound, Um, we'll say

(27:48):
more like more like a politician thansomebody wanting to solve solve a problem,
and and also like somebody who willnot budge off their position. The draconian

(28:10):
cuts that she is talking about reallycome down to, uh going back to
the budget or the spending pattern froma year ago. That did not seem
all that that draconian to me.But I'm not a I'm not a politician.

(28:32):
I'm just a just an investment guy. And the debt debt ceiling is
something I've got no control over.What I do have control over, and
what you have control over is howto position uh your dollars through this.

(28:52):
Through this period of time, Iwe and Judd and I have kept a
larger percentage of dollars in cash andhave still focused on some of our our

(29:14):
stronger names, which will they couldpull back during this period of time.
I really do not want to tosell and in the case of favorite Apple

(29:36):
having owned it, will say continuallysince two thousand and four, and I've
seen that stock go up or down, you know, fifty percent on several
different periods of time, and eachpullback to me, was an opportunity to

(29:59):
add share at a better, betterprice. Apple is one stock that I
would continue to pound the table onfor a lot of reasons that I have
covered covered before. Company continues togenerate a lot of cash. They have

(30:21):
a product or service that people seemto need and want, and you know,
a tremendous amount of recurring revenue.Not to mention, of course,
their expansion into India, where Applehas a five percent market share of we'll

(30:49):
say smartphones, cell phones, andor computers, so that offers them a
big, big runway going forward.This past week, Apple signed a deal
for another manufacturing partner in India.Tata Industries is going to do some manufacturing

(31:14):
for them. There are other contractmanufacturer, fox Con, also expanding into
India. Now just an aside,fox Coon did report some earnings this week
and their earnings were not as goodas had been expected, so fox Coon

(31:37):
stock went down. But when youlook at the earnings, a good chunk
of that had to do with foxCon taking a write down on an ownership
stake they had in Japanese electronic manufacturerSharp, so they took a very significant

(32:00):
write down on that, which hadan adverse effect on Fox cons UH numbers.
But Apple still i'll say my largestposition, still a company that continues
to surprise UM and still even whereto pull back, a company that I

(32:27):
want to own. And even addadd two I mentioned earlier about Apples,
you know, Apple being a bankso to speak, and rather than investing
in banks, I can invest inApple. Well, Apples recently a few
weeks ago offered a savings account payingfour point one five percent UH two Apple

(32:55):
credit card holders and that's that's anministered through Goldman Sachs. Apple got within
about five days just about a billionover a billion dollars came into that to
that product. So that's another placethat Apple, as we'll call a little

(33:16):
stickiness to their to their sales.So someplace that I want to hold onto
during any pullback. I would almostsay the same would be true of a
Google or a Microsoft, given theirmove into artificial intelligence, and well if

(33:39):
should we have a pullback, thosewould be companies that I would want to
you know, want to own.Amazon well, that has been very frustrating
to me as a shareholder. Butthey've got a lot of earnings power.

(34:00):
Uh, that's that's there potentially,but on any sell off, you know
that that could come down. Soyes, I am concerned about them,
the government and dealing with the debtceiling. This has happened before. It

(34:22):
has created some additional volatility in themarketplace. Do recommend keeping some cash on
the sideline so that when the marketpulls back, there's some money you can
invest in some quality companies that haveretreated a little bit. This is Josh

(34:45):
Arnold, mister money talk. Giveus a calle five, six or eight.
This is Gosh Arnold, mister moneytalk with John Arnold here to answer
your questions on stocks bumm. It'smutual funds. How you should position your

(35:07):
investment dollars including your IRA in fourone k. Don't hesitate to give us
a call nine five two nine twofive five six oh eight. That's nine
five two nine two five five tosix o eight. You'll always get straight
talk, not sure coded advice.It's just me here today, me with
my stuff nose from some allergies.John is on is down and down in

(35:34):
Florida with his daughter. So I'mhere to help you. Do give a
call nine five two nine two fivefive six o eight. You always get
straight talk, not sure coded advice, well with concerns not only about the
FED continuing and the FED meets againin the middle of June, concerns about

(35:58):
the debt, the debt ceiling,and that could go on for the next
several weeks. Um Volativity in themarket, you know, could could pick
up, and the question becomes ora question becomes, do I sell everything

(36:21):
and wait till till all all isdecided? And then then invest or,
do I hang tight with what Ihave? And how how big is the
market turned down? Going to goingto be well? Depending on what strategists

(36:45):
you listen to, h there havebeen numerous ones throughout this year and last
year, you know, predicting anythingfrom a five to ten percent pullback,
which to me would be in thenormal normal range as during the course of

(37:06):
any year, the stock market typicallyis going to pull back five to ten
percent three to four times during duringa typical year. There are some strategists
that said, hole, it's goingto be ugly. Just take a look
at what happened in two eleven andhow much the market sold off both prior

(37:30):
to the depth ceiling being breached andthen just after as there was one of
the bond or one of the creditranging agencies cut cut the US debt rating

(37:51):
from triple A to double A plus, so a downgrade on the ability for
the fit to repay debts. Well, I do believe that all the debt
is going to be repaid. Shouldthere be a breach of the debt ceiling,

(38:15):
it could mean that the Treasury isgoing to have to pick and choose
what gets paid out and when.It could mean that people on Social Security
might not might not get their checkswhen they usually do. They might be
a few weeks late, but theywill be paid. I did see something

(38:40):
today, which is Friday, sowhen I when we're recording this, that
said that if if the Treasury canget through the first two weeks of June,
there will be enough money that's comingin into the treasury from tax payments

(39:01):
that they'll be able to continue makingthese payments and push out the time that
the depth ceiling is reached into July. Well, wouldn't that be be special?
But in keeping with that, youknow, we I've maintained you know,

(39:24):
an asset allocation through we'll say,we'll say through thickens, and of
keeping up to thirty percent in cash, both for safety and to have cash
available for the inevitable pullback so wecan add to either new positions or existing

(39:45):
positions. We have continued to focus, or I've continued to focus. Judge
focus is a little different than mine, but I've continued to focus when companies
involved in the Internet leisure related businessis China related businesses without necessarily investing in
China real assets such as real estate, and for a small portion doing some

(40:13):
shorter term training. So that isthe focus that I've I've had and probably
will continue to have. As theseareas I have found, uh do have
companies that generate some rising, risingrevenues and then rising earnings over a period

(40:37):
of time, and they also actor I have found that that even in
tough economic times, people are stillspending money on those uh you know,
those those areas. Here are afew, you know, areas that might

(40:58):
be considered well they safe stocks tohold onto during this period of time.
I happen to like, of course, my Apple still have a good position
in Amazon. You could look atthe Google, Facebook, and Microsoft.
They've also they've been leaders sold sofar and have held up pretty pretty well.

(41:22):
Now they could be considered over owned, so maybe money flows out of
them during a market selldown due tothe death ceiling, but they're still generating
a tremendous amount of money. Youtake a look at Pepsicola or Coca Cola,

(41:45):
take a look at a company likeEli Lilly, particularly with their alzheimer
drug and their obesity drug. Andthen I think I have talked about you
know, my partner Annie's proactivity forHershey's, Hershey's kisses. Now Hershey it's

(42:07):
another stock that should do well evenin a market sell off. And some
might say, don't fear the debateon the debt ceiling, but a default
and a downgrade of US debt couldcould hurt and companies that we have talked

(42:28):
about here could help you through throughthat going forward. Say this is Josh
Arnold, mister money talk here tohelp you have a question. Don't hesitate
to give us a call at nineto five two nine two five five six
o eight. That's nine to fivetwo nine two five five six o eight.

(42:52):
You always get straight talk, notsure coded Advice. Josh Arnold Investment
Consultant is a registered investment advisor localin a state of Minnesota. All securities
discussed are for informational purposes only.Investing contains risks, including risk of loss.
Consult your investment professional before making anydecisions about your investment portfolio.