Mr. Money Talk

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Episode Transcript

(00:10):
The afternoon. This is Josh Arnold, mister money Talk with Judd Arnold here
to answer your questions on stocks,bonds, mutual funds. You should position
your investment dollars including your IRA infour oh one k. But you do
have to give us a call ninefive two nine two five five six o
eight. That's nine five two ninetwo five five six o eight. You'll

(00:36):
always get straight talk, not sugarcoatedadvice. Well, Friday, Friday to
concluded a pretty good good week overall, and actually a pretty good several several
weeks, though the market did closeon the down as market watchers can continue

(01:00):
to be concerned not only with theFederal Reserve and the direction of interest rates,
but also with a debt ceiling debatethat's going on in Washington and the
concern that we will reach and gobeyond the debt ceiling limit. On or

(01:25):
about June first. Republicans in Congresshave passed a debt ceiling increased bill which
includes some spending caps are basically capsspending to twenty twenty two levels, and

(01:45):
the Democrats want a bill passed withoutspending caps, as they see the spending
caps least according to Secretary of TreasuryJanet Yellen is Drakconian cuts that will hurt
numerous people. Well, debates aregoing to continue into the next week and

(02:12):
probably just beyond the Memorial Day holiday, and we'll see the market reacting to
the ongoing debt sealing debate. Notto mention continued concerns about the direction of
interest rates and the FED dealing withinflation. Now on the plus side of

(02:42):
the ledger In terms of the FED, the FED Chief Jay Powell, in
comments today with a former FED FEDChief Ben Bernanke, indicated that not that
the FIT was done raising interest rates, but there was reason to slow down

(03:10):
and or pause with raising interest ratesand provide almost a weight and see and
become even more data dependent given thelag effect of what the FIT has done
already raising interest rates eleven times overthe past past year. Ja Pale also

(03:42):
mentioned the impact of banks credit tightening, which could also act as a damper
on the economy and also help bringdown in FLA. We have to give
a little more context to these statements, Okay, then we'll leave that to

(04:04):
you. I'm speaking very very I'mgonna give a little I'm gonna give a
little context. Okay, over thelast month, just one month, the
one year treasury yield is up twentyfive basis points from four seventy five to
five. So part of the commentsthat Powell was making today, because the

(04:27):
curve is now pricing in more increaserate increases. You can see it across
the curse I talked about. Theone year went from four seventy five to
five points. The six month overthe last month has gone from five to
five thirty four, so another thirtyyou know, Well, I want to
just just back back up there.It's not only the last month. I

(04:49):
would say, as we've gotten moreinformation or more concerned about the debt ceiling
debate, the very short end ofthe yield curve has spiked up now.
Um. On Friday, we sawthe two year, you know, creep

(05:11):
up back back above four. Wesaw the ten year go actually just the
whole curt the whole curve isld havemoved moved up. But we also saw
as the yields moved up, wesaw the value of UH bonds drop.
So bond investors, which had beenmaking up a little ground this year,

(05:32):
lost a tremendous amount amount of ground. Uh We'll say in the last week,
we go back to this death ceilingthe rate, the rate curve is
now work. We've I rated multipletimes over the last year, and now
we're back to rates are going tostay high for a while. Well,

(05:53):
I would we could have We couldhave said that just listening to FED governors
over the past past months who havein Yeah, but where the conversations they
have fire for longer. They've beensaying that the whole time, and they
don't The bond market hasn't hasn't metlike agreed. And now you're back to

(06:14):
a point where the curve in totalityis saying that for the first time in
a while. Well, is thecurve saying that because they're concerned with the
Fed? Or are they more oris the bond bond curve more concerned with
the dead ceiling? The short endof it was concerned about the dead ceiling
gets less. So now okay,I think the bond curve is also saying

(06:36):
I don't know if it's concerned.I think it's saying the economy remains incredibly
resilient, and the FED would likeall outs equal to hep rates high for
as long as possible, and theFed's gonna take whatever the bond market gives
it, okay, but you've broughtsomething else there out there, Judd,

(06:59):
which is the economy is very resilient. And that's probably surprising the Fed as
well as other will say market strategistsand pronosticators only because for the last year
we've got seven recessions predicted already withoutactually experiencing one correct, and we keep
pushing it out. And now lookthe market. Well, I hate saying

(07:23):
the market's up this year because it'sa little bit disingenuous. This is what
I mean by disingenuous. The SMPfive hundred's up nine point four percent this
year. People say the market's up, they equal weated SMP five hundred.
It's not gonna be pretty close toflat or one percent. It's up,
Okay, huge spread. And wetalked about this all year and this is

(07:44):
not a new phenomenon this year.This has gone on since the financial crisis,
where the largest stocks tend to movethe market. This year, it's
accentuated, and you can look atit multiple ways. You can look at
the NAS deck verse the Russell onethousand growths, so the nasdeck is you
know, I would argue super concentratedgrowth and the Russell one thousands the growth

(08:07):
element of the top one thousand stocks, that spread is pretty darned big two.
That's at the UM. The nasdecksup twenty six point three percent the
IWF, so the Russell one thousandgrowth is only up eighteen point eight percent.
So you have that is you knowwhat you're what you're talking about.

(08:28):
You have a quote unquote bifurcated marketwhere the the S and P U S
and P five hundred and the nazdick is being boosted by just a smaller,
smaller group of stocks. And youknow, we could go back those
are those have been the fang namesplus plus Microsoft as well as several um

(08:56):
we'll say several chip names. Soif we want to throw in Fang,
you know that's it was Facebook,now met up Apple, Apple, Amazon.
We could have another A for advancedmicro devices in there you have the
N which had been net Netflix,but also Nvidia, the G for Google,

(09:22):
also Alphabet and then Microsoft as asthe leaders. Yeah, and then
energies down nine and a half percent. Bank the Bank index is down twenties.
No, it's down thirty three percent. It's not it's fun just getting
slaughtered. You know, well,we are not not bank. Bank investors
have not been backed. I don'tknow anybody who is a bank investor at

(09:43):
this point. Certainly they're not gettinga lot of adherents. The bank index
still trades at one time's book.Oh that's that's sorry. I had it
run thirty three percent for the bankindex. The SP five hundred financial sectors
only down four point seven percent.That's out. Now you were you had
on Friday, Secretary of the Treasuryyellot And was talking about more consolidation in

(10:09):
the banking industry, but got alot of pushback from Senator Warren, saying
that she was troubled by the pushtowards more concentration in the banks. But
when we come back, we cantalk some more about banks, banking alternatives

(10:31):
or bank alternative companies in this particularenvironment, and and some more. Definitely
have to talk about retail and evenmentioned we'll say shrinkage. Say this is
Josh Arnold, mister money talk withJudd Arnold here to answer your questions on
stocks, bonds, mutual funds,how you should position your investment dollars.

(10:54):
Don't hesitate to give us a call. Nine five two nine two five five
six eight. This is Josh Arnold, mister money Talk with Judd 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

(11:20):
to give us a call at nineto five two nine two five five six
oh eight. That's nine to fivetwo nine two five five six oh eight.
You always get straight talk, notsure coded advice. As I I
have mentioned and Jutt has mentioned fora long time, we are not bank
investors. Do not like banks foryou know, because a lot of reasons.

(11:46):
You can lose all your money becauseit's a ten times lever institution and
shockingly when the deposits go, youknow, they all go under. We've
lost a lot of banks. We'regonna lose more banks. That's less of
an issue the market issue, andI guess it's not a should say it's
less of an issue. It's lessof an issue for us or most normal
people because you're not going to beinvested or have your money at a bank.

(12:09):
If you're questioning what your bank solvency, get your money out now.
But the macro issue, you've gottwenty three point one twenty three point two
trillion dollars of bank assets financed byseventeen point two trillion of deposits two point
two trillion of book equity and youknow foreign change of debt those deposits.

(12:31):
Really that's seventeen point two really shouldbe fifteen point two on trendline. So
if you're gonna lose funding out ofthe banking system equal to roughly one hundred
percent of book equity into a worldwhere the banks aren't really able to shed
the assets side through anything other thanmaturity of loans, and so it means
that on average that the generic bankisn't going to roll eight out of you

(12:54):
know, twenty percent of their balancesheet. As it comes to which the
credit contractions gonna be pretty bad,usually takes you know, six to nine
months. I like the way yousaid that the credit credit contraction is going
to be bad. Well, thatdefinitely is going to slow slow the economy.
Uh, and that credit contraction isgoing to make it difficult for people

(13:16):
to get um home loans, autoloans, everything, as well as businesses
businesses to get en Schwartzman that hada Blackstone, the big private equity firm
says, the golden age of privatecredit. What's he? Also? What's
he? He's a great he said. The banks aren't going to show up,
and probably it's time for private creditto step in and that comes more

(13:37):
expensive. So I it's very notdoesn't feel great, and the market's reflecting
that. When the biggest stocks areout performing the smallest ones, that's bearish.
It's not bullish now, it's bullishif you're on the biggest stocks typically
okay, and they've done okay,it's been a it's been a nice year
for for the firm and the Amazonafter being a problem child for what two

(14:01):
years? Now? Correct is Amazonhas gotten the night nice boost. All
of a sudden, people are saying, oh my goodness, Amazon retail is
doing doing well, and oh mygoodness, Amazon is part of the generative

(14:22):
artificial intelligence boom. Why Amazon hasbeen doing artificial intelligence for a long time,
and maybe they're they're going to bea leader in this in this arena,
so we should go buy Amazon alongwith Meta, Microsoft, alphabet slash,

(14:45):
Google and NA Video. You know, look, Apple's almost back to
its all time high pretty darn close. It's bounced around this one you know,
he gets to one eighty. Oof, but you know, we'll see
that's what the answer is. We'recoming or entering the summer. Usually it's
selling make go away. I feelwith the credits stuff that's probably going to
be true this year or though younever know, we're still pretty defensive.

(15:09):
Well, you know, our ourasset allocation model you know, has included
or is suggested, of keeping upto up to thirty percent in cash and
the balance invested primarily in growth orientedcompanies, some of which we consider more
value oriented than not, and thenalso doing a small, small bit of

(15:31):
trading. My concentration happens to includecompanies involved in the Internet, leisure related
businesses, China related businesses, andreal real assets UM, as well as
doing some smaller term you know,small term trading. Judge concentration is on

(15:52):
small and medium sized companies, butfitting some of the same same will say
value you plus growth growth characteristics.Uh so, yes, we've had a
will say, a very good yearyear to date relative to the to the
indusices, which makes up for uhnot a real stellar two thousand and twelve.

(16:18):
Nobody getting a good year last year. You know, our multi year
returns are pretty darn good. They'veoutperformed the market by a heck of a
lot. But but I want toI do want to come back when you
talked about Steve schwartzman of Golden Ageof private credit. There you go,
you would, you would you wrotea little missive on your Twitter feed from

(16:44):
your research company Lake Cornelia. Yeah, research on business development company. Oh
boy, business development? Well,how terrible. I mean the meta point.
Let's just this should be a greattime for private equity going forward.
This should be a great time forbusiness development companies, which typically lend money
to small and medium sized businesses.This should be going forward a good time

(17:07):
for banks. But for all threeof those have one giant issue. Why
the stocks won't work. It's becauseof all the stuff they did before and
leading up to this very moment.Okay, and that's the real problem.
And these guys are just saddled guysand girls we were gender neutral, that
these guys and girls are stocks tobe able to just just say gender neutral.
You can just say guys. Nowyou can't say got to be inclusive,

(17:32):
inclusive language, okay, don't bean intimidator, all right, language
they nah whatever, But anyway,yeah, Anyway, the problem with all
these stocks and is the Blackstones ofthe world, the kkrs of the world,
the business developed companies. I'm notgoing to give you the stock tickers
because you shouldn't buy any of them, and they're all terrible. Okay,
So I should not be buying Blackstone, BX or KKR or they can't or

(17:56):
even Apollo all Apollo's got a wholeset, separate issue. Apollo, I
would run aggressively the other way.You know, Apolo owns that life insurance
company a theme, and good luckowning a fifty times or a hundred times
levered life insurance company where people cansurrender the annuities with no charge. WHOA,
yeah, what are you gonna do? You gotta fixed, you gotta

(18:18):
ten year fixed annuity at four anda half percent. You're not going to
surrender at no charge and restrike higher. Of course, you're going to surrender
right and you're gonna get a higherinterest right now. And that's a real
problem for Apolo. But out allthese guys, the legacy assets, there
might not be a private equity fundwith a vintage of twenty seventeen, eighteen,

(18:40):
nineteen twenty that has that earns profits, we'll probably be for a significant
amount of time. Then, Sowhen you talk about some of these companies,
and I know that a lot ofbusiness development companies, some of which
are included in the closed end fundindex, are showing yields, you know,

(19:03):
twelve thirteen, fourteen, fifteen percent, and there are a lot of
people running out just looking for foryield. And yeah, you're if you're
if you buy a fourteen percent yieldanything, guess what you're not getting yield,
You're getting a capital loss. Andif you can't follow what I'm saying
right now, talk to your financialadvisor. You don't buy fourteen percent yields?

(19:26):
Oh you're kidding. Well there,so there's a second order impact that
you can see. Second order it'sa fancy word for one thing happens,
and then that opens up a wholehost of issues. Really when you dig
into the BDCs, that's really pervasiveand a scary thing across the economy,
which is most BDC's business development companieslend money floating. Okay, well you've

(19:49):
got a problem there. So they'reall raw rod hearing that, oh my
weight at all in average interest ratethat I'm earning on my loans is up
three to five percent, and thatis at a point where you want to
look back at those lenders, thoseBDCs, and this is also for businesses
and whatnot and the levered part ofthe economy. I'll tell you what,

(20:12):
you're a corporate, you're four timeslever and as most mid sized companies are.
That's four terms of that's four timesas much dead as your cash flow.
And your interest cost goes up byfour hundred basis points or four percent.
You have some real issues. Youdon't have any free cash flow anymore,
and lenders don't want to take allthe free cash and they want to

(20:33):
margin a safety and we've leaned intothat, and that's a real issue for
the economy where a lot of theseloans aren't going to be par because they're
choking these companies to death. Andit's you see it in the CLO market,
which is the kind of literalized thatloan opplication market, which one of
the things that blew up in laO nine where man the stress on all

(20:53):
of these midsized companies. They thoughtthey were borrowing at six seven percent,
they now are paying twelve thirteen becauseof the move in the benchmark interest rate.
That's not a good place to be. So that's you add that with
the banking stuff that I laid out, and it's just it's not It doesn't
feel good, and that's why themarket is where it is. We're big

(21:15):
cap growth, which has no debt, and it's the only thing with growth
is really outperforming. But we're outwe're out performing too well. We are
because we aren't all that stuff anyway. So we're gonna have to get the
end of the story is stay awayfrom banks, stay away from business development
companies, and stay away from privateequity stops for the time being. Yeah,
this is Josh Arnold missed or MoneyTalk with Judd Arnold here to answer

(21:40):
your questions bond, stocks, bonds, mutual funds, how you should invest
your retirement dollars. Give us acall nine two nine two five. Wait
there you go and drink. Haven'tdrinking water till we'll be right back.

(22:00):
This is Josh Arnold Master Money Talkwith Judd Arnold here to answer your questions
on stocks, bonds, mutual funds, how you should position your investment dollars
including your IRA at four oh onek. Don't hesitate to give us a
call nine to five two nine twofive five six o eight. That's nine

(22:21):
to five two nine two five fivesix eight. You always get straight talk,
not sugar coded advice. Big weekfor retail earnings and more retail numbers
coming out next week including Dick,Sporting Goods and Best Buy among others next

(22:45):
week. And then we also havea big tech firm, the video reporting
reporting some earnings next week, notto mention some i'll say, more fed
speak and hopefully some deal on thedebt ceiling. But this past week,
while we had a lot of retailearnings coming out, and the response to

(23:11):
the retail earnings was Walmart reported,Target reported, foot Locker reported this this
this week, and the response Iwas not the real, not real positive

(23:32):
good I think. Um, youknow, wal Walmart got got a nice
nice boost initially on the on theback of on the back of their gross
grocery sales, uh and their theirability to we'll say to add on to

(23:53):
U on the grocery. But theyum so we could almost say they had
a they had a beat a beatquarter. But it was all about their
all about their their grocery. Eventhough Walmart raised raised their guidance, it

(24:14):
was definitely not about UH soft goodsor UH will say any discretionary purchases.
But Walmart has typically been very verystrong in in grocery. In grocery.
Target, on the other hand,now they beat on the EPs EPs number.

(24:37):
They did warn that sales were slowing, but at the same time they
kept their full year guidance um anddid also say that consumers or watching their
their spending. I did find somethingvery interesting which which did get repeated and

(25:03):
asked by analysts later in the weekafter Target reported, and that was the
fact that Target lost a half ofbillion dollars or five hundred million dollars to
shrinkage, and they said that couldlead to them closing more stores in certain

(25:26):
areas due to the high we'll sayhigh crime crime rate. When foot Locker
reported on Friday morning, foot Lockerbrought up the same issue. Well,
can we put I don't like usingnumbers out of context, so okay,
well you can prepare it. Solet's give a little context to five hundred

(25:48):
million. All right. Target hasrevenue of one hundred and ten billion dollars,
so five hundred million of shrinkage oftheft is point five per It's not
even one percent, it's half apercent. Okay, well, I'm not
saying it's good. Okay, well, but clearly the retail shrinkage issue,
which is a fancy word for theft, is bad. We've seen Walmart pull

(26:10):
out of places like Portland. DowntownSan Francisco is not a place where you
can really buy anything because all thestores up left it. So be it.
But I the consumer debt levels,consumers are largely through their pandemic savings,
they're increasing. You're seeing consumer debtincrease. We're in a tough spot.

(26:33):
I don't think that matters or isas leading an indicator. I think
it's more of a trailing indicator.I think what's more inside baseball or where
the puck's going. And the WayneGretzky yes thing is sort of what we
covered in the last segment, whichis credit is contracting and that leads to
economic slow down, and whether wehave a debt ceiling breach or not.

(26:59):
I think that's a side show.I think that's like who in almost two
cares Because if the government actually doesdefault, I think we can make a
few first principles about government default inthe United States, which is given this
weird thing with the dead ceiling.At some point, certainly in my lifetime,
I would expect for sure in mydaughter's lifetime, somebody's going to miscalculate

(27:22):
and we're going to have a technicaldefault. I don't think that's that big
of a lead. Secondarily, unlikesay Argentina, when the US government actually
does if and when they do eventuallytechnically default, they'll resolve it in a
week and everybody's going to get ahundred cents on the dollar. Doesn't mean
that somebody isn't going to blow up. And in the financial sense, when
the risk free asset has a problem, that's probably going to blow up some

(27:45):
highly levered vehicle, maybe a bankor two, I don't know, but
everyone's going to lean in and buy. If the market was out five percent
time the US government default, youwould buy everything. Everybody would buy everything.
You know, So that this isI know at some point is going
to be and you're getting intolved.You're right, and you're getting a one
hundreds US of the dollars. Sonot to minimize whatever the heck they're doing

(28:08):
in DC, but from an investmentstandpoint, this is a side show.
The real issue is we're not ina great economic thing. And so what
we talked about earlier in the showas well, which is interest for the
interest rate curve, which is pricingin some cuts, is and pricing in
cuts anymore. Jay Powell on Fridaysort of walked back an interest rate increase,

(28:32):
but also walked forward the rates aregoing to stay high for a long
time. This is not a superconducentmarket and it hasn't been for a while,
and we just have to accept itand so be it. And we're
entering a seasonally a week part ofthe diamond. It is typically you know,

(28:53):
summer, summertime is typically very veryit's it's slower, and then particularly
as we get to August, thingsslow down a little bit more. I'll
say it was the We'll say theEuropeans go on vacation in August and all
the We'll say the first the varsityon Wall Street also goes on vacation.

(29:15):
Yeah, as well, it's gonnabe the summer of discontent, slowness,
Lecointity'll slow down. You just takea deep breath. Whatever it's gonna work
out. When it works out,well, I continue to take take a
deep I continue to take a deepbreath and I'm just very happy with you

(29:36):
know, the stocks that I've gottenin my port I'll say, in my
portfolio. Yeah, and well,we're outperforming this year. Last year we
underperformed a little bit on a fiveyear on every rolling five year basis,
we're killing it by like what fiftypercent. I mean, it's crazy.
So come in and talk to usif you're struggling. We got a lot

(29:57):
to say. You've been around along time. Well, I've been through
a few of these down down marketsor continue down markets. We're still still
here and still doing we'll say reasonably. Well, still planned to be here
for a very very long period oftime. And if I look at my
invest investment heroes, they continue towork into their late eighties and into their

(30:23):
nineties. And the owner of aof a firm that you were associated with
when you were running a hedge fund, Newburger Berman m Roy Newburger, was
working up until the day he diedat one hundred and four. Well,

(30:44):
let's not work. If you're doingwhat you want to do, well,
I am doing what I what Iwant to do and plan to continue doing
it for for a lot longer.While you're you know, you're gonna do
it until you see a US governmentdefault. That's what you're gonna do,
right, and you'll do it beyondbeyond that, hopefully. Look, hopefully
I'm not interpreted as cavalier. It'sreal stakes here, real people might not

(31:07):
get paid and all that other stuff. But from a market perspective, my
ultimate test is if something happens inthe market, sales up five percent on
a bad thing, and you're andyou you're pretty confident that not only you
but everybody else is gonna buy allday, it's market probably not hanging on
five on that. So no,I mean, my my, Michael,
you know, if I was workingfor the government, may not get paid

(31:29):
on time. My Social Security checkmay not show up on time. And
if I will, if my bondscan do a week, you're gonna have
to wait a week. I haveto wait wait a week to get the
principal back. But quite frankly,that's not different than some other other situations

(31:52):
that have that have happened. Butwhen we come back, I do want
to talk a little bit more aboutabout retail and some areas that are moving
in the market. This is JoshArnold missed her money talk with Judd Arnold.

(32:12):
Call us nine five two nine twofive five six o eight. This
is Josh Arnold missed her money talkwith Judd Arnold here to answer your questions
on stocks, bonds, mutual funds, how you should position your investment dollars
including your IRA at four oh oneK. Don't hesitate to give us a

(32:36):
call. Nine five two nine twofive five six eight. That's nine five
two nine two five five six oeight. You'll always get straight talk,
not sugar coded advice. I usedto say that it's the shoes. It's
the shoes, and during any economicslowdown, you typically it's the shoe companies

(33:01):
that would hold up and hold upthe best. On Friday, one shoe
company reported reported their earnings. Nowthis company, Footlockers, in the midst
of a turnaround, but if theydid not have a stellar quarter at all,

(33:21):
obviously small base retails tough spot.I mean, it's it's been hard.
Footlocker has been in a tough spotfor a long time. Well DTC,
everybody's going DTC. Well, evenFootlocker was going DTC, and they
did have they direct to consumer division, East Bay based Sports, but they

(33:44):
since closed that close that down andthey're trying to turn their business around.
The the CEO has had a realgood history of turning businesses around, including
all the Beauty. Has said thisis just part of the part of the

(34:08):
process. But foot Locker stock droppeda little over ten dollars a share on
the miss and and lower guidance.Say, the only thing that foot Locker
has going for that now because atthis point they have not cut the dividend.

(34:31):
But I'm sure that at some pointthat that could be up. You
know, they might have a lotof show. I don't know a locker
for sale. All based retails reallystruggle, do you look at I mean,
it's just across the shoot. ChicoFoss can't work. They should keep
putting up awesome numbers. This istake your hs literally. They they can't

(34:52):
buy a stock movement. You gotVictoria's Secret which got spun out I think
three years ago at fifty five,got spun out of limited and well,
um, I'd love to say Bathand body Works. Bath and body Works
seem to be doing okay, Victoria'sSecrets not so much. I mean,

(35:14):
that's stock peaked. I think ateighty five ninety it's back down to twenty
five and going lower. It is, but some of the retailers that had
been doing well just in terms ofterms of the shoes just off footlockers numbers
have have come down and come downpretty pretty hard. I just I just
don't know the footlockers actually representative ofanything more than all based retail. And

(35:39):
you look at all the news.You know we've talked about oln uh,
they're how onn reported unbelievable numbers thisweek, beat on the top line,
beat on the evaluations so stretched.That's why their stock, their stock evaluations
so stretched. They also have achannel issue too, they a little I
think that stocks just a little bitahead of itself and maybe it comes back

(36:00):
to earth. I don't know.It's a hard market. Yeah, there's
five stocks working, and there's moremore than five stocks. Feels like five,
maybe six, And there's more morethan that. There is more than
What are you upset about? I'mnot upset. I'm not upset. That's
pretty good. I mean, ifif you weren't, you want to push

(36:20):
me to be upset, I canbe. I can be be upset.
My casino stocks way underperformed, andI've I've got that's a perfect cutback.
That's a perfect example of what's notworking in the market, which the casino
stocks are putting up fine numbers andeverybody says, nope, you got a
lot of debt and your consumer andI'm not there's nobody to take you out

(36:42):
of the trade. So and thisis the same thing impacting energy, where
all the people who own it reallylike it. But for stocks go higher,
you need you know, supply anddemand, right, you need more
buyers and sellers right there just isn'tthe next wave of people despite the numbers
being really good. And I thinkgoing to one of the other things that
we talked about in the show,where the market's kind of in this waiting
for Godot moment. We keep waitingfor a recession that hasn't come. And

(37:05):
at some point, all these thingsthat are underperforming because of this will they
or won't they recession fear. Atsome point, cheap is just going to
get too cheap. And so Idon't know when these things work, but
I can say the casino stocks,the energy stuff, some of the good
retail that isn't working, you consumerfocused stuff, they just keep getting cheaper
and cheaper because there's nobody incrementally.But to buy them because of the recession

(37:28):
fears and because of the fears ofthe FED overdoing it. At some point,
once this thing turns, it's goingto work. Now it might not.
It might be two years before weturn. We've seen worse. We've
always seen seen worse. I don'tI'm not going to say it's going to
be two years before you see someof the work. I mean, I
don't believe that investing in banks isgoing to work to work at all.

(37:54):
But again, you know, I'mnot a bank, We're not a bank,
we're not bank bank investors in allright. But it's the cychnical stuff
that that looks screens like value that'sgot a little bit of debt that we've
We've talked about a lot of stuff. It just keeps getting cheaper. You
know. There's some of this coalstuff, for example, a lot of
people don't like coal. BTU announcedthis big buyeback. I think it's a

(38:15):
forty percent buyback of the outsting thatthey float over the next year and a
half. I mean that stock can'tmove. Thing's gone, you know,
peaked to thirty three in the wayof Ukraine a year ago since they announced
this big buyback and dividend thing twentysix, we went under twenty this week's
no debt. The things at onetime's cash flow, where does it go

(38:36):
just people don't buy in. Wellthat that just fits into you into the
energy complex and energy is it wasnot not moving. I mean, if
you talk about the entergy, youknow some of the energy names that look
very energy and next down nine percentfor the year. It's down a third
as much as banks. And theseguys are printing money. These guys are

(38:58):
the banks line. If there's alittle local company, a small company that
you've liked and I have traded inthe in the past, Northern oiland Gas
pays a very nice, nice dividend. They've continue to expand they've had some
some decent numbers that Kate came out. They announced the deal this week.
They and that they had a niceare as they annouced the old than they
had to do a secondary to fundthe deal five percent yield their thirty one

(39:21):
dollar stock. That thing should befifty bucks. It's just even announcing the
deal. Uh. And you knowlike UM one night went with with additional
stock, which is dilutive. Youknow, the stock still finished up up
for the week, which I thinkis a that's that to me is a
is a real positive. Um,it's a company that to me looks looks

(39:45):
very interesting. We've talked, talkedabout this thing just keeps creeping down,
is um New Fortress Energy. Ijust my daughter owns a lot. I
need to buy more for her.At some point. New Fortress is gonna
It's gonna pay for my nice house. I mean, I think it.
I keep talking about the stock isgoing to be worth ten x in five

(40:07):
that's a Wold prediction. So sayon half right, it's worth five x.
But that stock is so well positioned. It's natural gas and power downstream
electrification. Electric demand is going well, electric demand that's got to go go
up. It's almost government growing.It's growing four times what oils demands growing
in emerging markets. They're huge inBrazil. They got a power plant in

(40:30):
their waggler. They're big importer read. I like where they are. The
CEO is a little bit crazy.He also owns the Milwaukee Box Rich Guy,
real Globe trotter. But okay,well, so you're talking about crazy
crazy CEOs and what they do.Well. I think it's also quill find
Natural gas keeps coming down, sowe'll see, we'll see. That's one

(40:55):
we'll look to add, you know, when the time's right. So I
don't know, it's all about patienceright now, and definitely with some of
the issues that are around. Plusthe summer, patience is still still the
kick. I mean, it's it'sgonna be a year of patience. So

(41:15):
if we get you know, aswe record this show, it sounds like
they're not negotiating. The White Houseconfirmed debt negotiations are off. After the
Republicans walk down all this political stuff, it just has to happen. We'll
see. So I think it's allnoise. I now, look your whole
life. You can spend it beingupset at the politicians, or you can

(41:37):
go out golfing, drinking and generallyhaving a happy life. Drinking wine,
don't drink, don't drink in excess. Well, the drink that the drink
that I have, my drink ofchoice is Coca Cola. King Oscars,
as the stock saying goes and KingOscar is held up pretty well, I'll

(41:57):
say, through thick and thin andeven check this out for all of people
who want to put their money ingold and silver king Oscar long term has
actually done a lot better than goldand silver. Say this is Josh Arnold,
mister money. Talk with Judd Arnold. We're here to help you.
Give us a call nine to fivetwo nine two five five six oh eight,

(42:22):
See you next week. Josh ArnoldInvestment Consultant is a registered investment advisor
located in a state of Minnesota.All securities discussed are for informational purposes only.
Investing contains risks, including risk ofloss. Consult your investment professional before
making any decisions about your investment portfolio.