Mr. Money Talk

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Episode Transcript

(00:09):
Good afternoon. This is Josh Arnold, Miss your Money Talk with jud Arnolds
here to answer your questions on stops, fun ons, mutual funds, how
you should position your investment dollars includingyour IRA in four oh one K do
give us a call nine five twonine two five five six oh eight.
That's nine five two nine two fivefive six o eight to always get straight

(00:35):
talk, not sugarcoated advice. Beforewe begin, do have to remind you
of the usual caveats, pass performances, no guarantee of future results. Markets
are always changing. Any anything thatwe do share with you on this program

(00:57):
is for informational Russian purposes only.Nothing should be viewed as an investment recommendation.
Please consult the financial advisor before makingany investment decision. All investments contain
risk in concluding risk of loss,Some or all investments we discussed may or
may not be suitable for you.Please talk to an investment professional with that.

(01:18):
Wow, yeah, you do asmuch better, much cleaner than I
do. When you and I haveto have you pre recorded this, so
we just plugged this plug this disclaim. When you were in javeat in when
you work at a big investment bankin three large hedge funds and a large
asset manager. Believe me, yousit through enough continuing education and whatnot.
But with that said, speaking ofour continuing education, because that's what the

(01:42):
markets are. It's the greatest gameever invented, well, certainly in my
lifetime. It's the greatest game everinvented. That's why we like to play.
It's not golf. Golf is notthe greatest game game ever invented.
Golf is a long walk spoiled oran easy way for people with difficult marriages
to avoid each other. That beingsaid, thank you very much, John
Firestone. That that being said,we had a huge week this week.

(02:06):
The market came off from highs.Going into the week, we were up
nineteen and a half percent on theSMP five hundred. We closed the week
only up sixteen point eight percent,still up very nicely for the year,
but I would point out we arebarely up for Q two right now,
and Big Tech struggled a little bitthis week. We did have a catch

(02:28):
up. This is as much assell off as it is what I would
call a rotation, and by rotation, I would point out the big laggards
of the year, which are banksand energy Banks and energy respects respectively entered
Q three down thirty point five percentand down seven point two percent for the
year. Those two hold one stopstopped there. Did you just say that

(02:49):
banks were down thirty percent for theyear into Q two into Q two,
So well, yeah, we losta few big banks. There was a
crisis with Silicon Valley Bank that wasthis year. This year, Well,
now we've caught, We've rallied abunch with earnings. We're only down seventeen
point four percent in the KRI BankingETF, the energy ETF that's the XL

(03:09):
was down seven point two it isonly down point seven percent now, and
many other laggards have slowly but surelypicked up the pace as the big stuff
that's outperformed like QQQ is barely upfor the quarters, still very nicely though.
So with that you had too big. I had had a very very

(03:31):
very big, big week in termsterms of earnings, and particularly on Thursday
has three of the companies that Iand my client clients own reported reported their
earnings all at the same time Thursdaynight, had Apple, Amazon, and

(03:53):
Draft Kings all reported at the sametime. Judd, Apple, Beats,
beat the estimates on the top line. In the bottom line, I had
much much, much better than expectedservices revenue, and that services revenue was
growing apace. That was good.Macintosh computer sales surprised on the upside.

(04:19):
Margins again surprised on the upside fortyfour and a half percent. Even iPhone
margins were at thirty thirty four anda half percent. But I think there
was some disappointment, and not onlyiPad sales, which were underwhelming after a
very strong while. They suffered froma very strong comparison from a year ago,

(04:45):
as as as Do and Will Macintoshsales, but phone sales disappointed many
analysts. We got a I gottaI gotta poke it. Of course you're
gonna poke poke at me. Butphone you've got. Revenue was down slightly.

(05:06):
It's a consumer staple. You gota thirty plus times earnings multiple revenue.
It was down slightly. Now,Operating income and net income were up
because operatingcome was up because of themixshift to services. Earnings per share was
up because the number of shares keepsgoing down. But it's a well,
I want to just just point pointsomething else at that, you know,

(05:28):
free cash flow was up a lotcontinues to be up. I mean Apple
will return to shareholders last quarter twentyfour billion dollars in UH in share buybacks
and dividends, which is a bignumber. Still sitting on one hundred and
sixty six billion dollars in cash.Yeah, but the company is really expensive

(05:51):
and it's a great company. That'swhy it's got a high multiple. Well,
it's a tremendous company. And whatmany overlook is there installed base at
over two billion people around around theworld. Uh, I mean that big
continue to buy. Let's point outsome other stuff. The big cash now
you just cited that is less thanfive percent of the market. Cab uh

(06:14):
still big. I thought it wasa fine quarter. I know it's disappointing
a loop. Apples had a hugerun this year. Now, I think
what disappointed a number of analysts inaddition to you know, the phone sales
being down down a bit, isthe fact that uh their guidance into the

(06:35):
next quarter. It will say itwas not a beaten raised quarter. It
was a beat and more of aninline quarter, and concerns. Concerns come
come about how good is the nextphone going to be? And will it
be delivered on time? So Ithink more analysts are still looking at Apple
as a hardware company. And Icomplete, when you make that statement,

(07:00):
when the multiples over thirty times,this is yet I disagree. I don't
hear anybody, uh you know,saying boo about Chlorox and you know,
with Chlorox having a multiple, youknow at thirty times. I'm not I'm
not saying that. What I'm sayingis the multiple is thirty. It's it's

(07:24):
valued like a consumer staple. Youhad a big run, and I mean
Apple is up on a one monthbasis, all right, one month you're
flat. On a six month basis, you're up from one fifty to one
eighty. Oh I'm sorry, okay, sorry, sorry for crying in my

(07:45):
milk. I mean, socks doun'tgoes go up in a straight line.
We just endured two and a halfyears of Amazon doing nothing, so all
of a sudden we'll get to Amazonand just in just a second. But
I still like Apple. I stillhave maintained my two hundred and fifty dollars
price price target. And I willalso point out that prior to the earnings,

(08:07):
I did mention on this program.I have mentioned to my clients,
do be prepared for earnings, bothfor Apple, Amazon and other companies that
we deal with. For a pullbackon the numbers, is going to be
somebody that doesn't like some some number, and or there's going to be some

(08:28):
profit taking. Let's let's talk aboutbut hold on, let's wrap up on
Apple. Let's talk about where pullbackshad end up. Okay, at the
end of twenty twenty, we hadto pull back to one hundred a share.
Recently this year we had to pullback to about one thirty. Okay,
that was the beginning of the year, the year and the year.

(08:50):
Well, we are saying, andwhat we say consistently with Apple is there's
always going to be pullbacks, butit's going to keep making higher lows as
well as higher highs. Okay,we'll stop there, there you go.
We'll stop there and come very quicklyto Amazon and then maybe have to go
go a little bit more into Amazon. But Amazon surprised on the top line,

(09:11):
surprised on the bottom bottom line,and surprised especially with AWS to Amazon
Web Services, which grew twelve percent, which was above what analysts had had
expected, and that gave a verynice boost to boost to the company.
Additionally, the CEO. Andy Jazzy, who had run Amazon Web Services prior

(09:39):
to being elevated to CEO, talkedabout the growth in Amazon Web Services continuing
and talked about the uses of artificialintelligence and generative artificial intelligence within there.
Amazon North American core in this retaildidn't make money for I think eight quarters

(10:03):
in a row. They just printeda huge number. And Amazon has gone
through this multiple times where they invest, they invest, they investing, you
don't see the profit, and theystop investing briefly and you see big profits.
We just saw big profits and we'regonna see big profits. And at
the bottom Amazon always people say theretails were zero and when the stock works,
people say AWS is worth a lotin retail could be worth a lot.

(10:24):
But we're gonna have to come back, Yes we will. This is
Josh Arnold Mister Money Talk with JuddArnold here to answer your questions on stock
spawns, mutual funds, what youshould do with your retirement dollars including your
IRA in four to one k dogive us a call nine to five two
nine two five five six o eight. We're here to help. But did

(10:50):
John Arnold, Minister Money Talk withJudd Arnold here to answer your questions on
stock, spawnds, mutual pundsail.You should position your investment dollars including your
IRA in four oh one K.Don't hesitate to give us a call at
nine to five two nine, two, five, five six or eight.
That's nine to five two nine,two five five six h eight. You'll
always get straight talk. Not truewith goded advice. All discussions on this

(11:13):
show are in our for discussion purposesonly. None of it should be considered
investment advice. Do not make afinancial decision without consulting a financial professional.
Some are all of the investments wediscussed on the show may or may not
be suitable for or you. Investmentscontain risk in including risk of loss.
Please consult the financial advisor before makingany decisions. The opinions of the show

(11:35):
are ours and hours alone. Aswe concluded the last segment, Amazon some
really surprise on the upside both topline, bottom bottom line, and up
their guidance into the end of thenext quarter. Very very impressive, and
I do believe there was some we'llsay some short short coverings. As the

(11:58):
stock you know jumped jumped up eighteight percent. I don't think this was
short covering. I think this wasmoney coming in. Well, it definitely
adds adds to my perception of thisis a tremendous, tremendous company despite all
the disappointment hardy that it gave me. In twenty twenty two, they started

(12:20):
showing how they can make money inretail. Again, that's all that really
matters. The guide was really good, the earnings were really good, and
AWS was better than feared. Sothere's one analyst that talked this week about
how Amazon is the best mixshift storyin tech. Now let's talk about what
the heck that means. Well,I'm a little confused. You can help

(12:41):
me. Apple has gone through afive to six year mixshift from being a
product company to a services company.Okay, product companies are tough. Apple,
I don't think it was six sevenyears ago. Apple would get forty
percent of its sales in Q fourand it was what's the iPhone gonna sell?
With services? Which is that monthlybilly you get that just keeps going

(13:03):
up. You get monthly revenue forall the stuff, all the services they
sell you, all the apps andall the other stuff. And that's a
recurring revenue stream. And that shockinglyor unshockingly if you don't get my Sarcanism
is a revenue stream in a businesswhere the heck of a lot more services
has a gross margin profile of twotimes products. And that's why Apple's multiple

(13:26):
has gone from I don't know tentimes earnings to thirty plus Amazon as AWUS
gets bigger and bigger and bigger.The retail piece, which nobody has been
able to figure out, how theheck to value gets smaller and smaller as
a percentage of the company. That'sit. We are getting to a point.
And with Apple, we sat therewhen services was twenty percent of revenue

(13:48):
and said, how the heck isthis not getting a services multiple? Well,
it had to go to about thirtyfive. Okay, Amazon is getting
to that point. Now AWS isall ready over one hundred percent of operating
income. That's because everything else plusthe corporate overhend is negative. Um,

(14:09):
that's not a T T tralelinge calledmonth basis, but on a quarterly basis,
I think it was about seventy.But that's that's the big thing,
which is retail doesn't matter. Sothat is the mixed shift story. We're
getting to that zone where people aregoing to be able to disregard the retail

(14:31):
business, which has its ups anddowns. That's the mixt shift story,
and the evy to revenue multiple isactually very very well and that's what people
talk about, the mixed shift story. That's really what people are getting at,
which is you have a very verylow optical valuation. I know,
earnings. It's very expensive on earnings. They invest a lot in operating um
expense opex and that's what's student netincome. And every once in a while

(14:52):
they show you what this thing canearn. But if you just strip it
all, you'll get evy to revenuethings. What's it's not even it's a
little over two times two times sales, which for Amazon is inexpensive. Yeah,
definitely inexpensive for Amazon, and particularlyif I were to compare Amazon to

(15:18):
any of the other large large capitalizationtech companies, Amazon is inexpensive on a
price to sales basis. Well,there you go a lot of money coming
into Amazon. We'll see. Wetalked about it at the starting segment.
A little bit of a pullback asmarkets come back only up sixteen point eight
percent from nineteen point five percent ofthe year. We're really seeing under the

(15:41):
surface is a rotation where banks,which are down thirty percent for the year
at the end of Q two nowonly down seventeen. Energy was down seven
and a half. Now it's downless than one percent, and you got
a bunch of the laggards are nowsort of catching up. You still only
have of think about this. Thisis a great stat Fifty five percent of

(16:04):
the of the SMP five hundred istrading of it's two hundred day moving average.
Of nasdeck stocks, only fifty sevenpercent are above their two hundred day
moving average. Now I point upthe nas deck fifty seven percent because the
nas DEC one hundred index is upforty percent for the year. That would
mean that an awful lot of thestocks within that naz DEC one hundred index

(16:26):
are not up that much, butnot only not up that much, but
are still in negative territory. Correct, And that this is the dynamic that
we've seen all year, which isthe art we've seen it for twelve years,
which is the marketcap weighted SMP fivehundred. So the bigger the marketcap,
the bigger the weight which is whatthat is the SMP five hundred,

(16:48):
It is marketcap weighted. I shouldsay it's up sixteen point eight percent the
equal weighted SMP five hundred, sothat they are all weighted equally is only
up seven point one. Now that'sa little bit better. It's it's about
a nine point gap now, butwas ten. Well, that that brings
up something very interesting when we talkabout an equal weight index. And you

(17:11):
know, I've listened to i'll say, talking heads on fin TV, financial
TV and even looked at you knowa large number of open end mutual funds
or actually manage mutual funds, andmost of them, JUDD are not performing
as well as the SMP five hundred. They're closer in line to the equal

(17:34):
weight index in terms of return.Well, that makes sense because first of
all, from an industry concentration standpointhacking, communication services, I think it's
forty five percent of the SMP fivehundred. Now, most mutual funds have
industry concentration limits to twenty percent ofany one industry. Well, I'll start
there, and then they have positionlimits at five. You've got my Apple

(17:57):
and Microsoft are over five. Well, I think I think between the two
of them, they they're probably closeto fifteen percent. Yeah, market cap
weighted on the SMP. And sowhen you have sectors that are larger percentages
of the SMP high hundred. Themutual funds are allowed to concentrate in one
sector, or individual stocks are sobig versus the index that they can't be

(18:18):
owned. That's what you get,and you have most mutual funds. Most
active managers don't like to own highvaluation growth stocks. They have a quality
and a value bias. So thisis what we've seen with active management since
the global financial crisis, since theagent quantitative easing, which is big tech

(18:38):
is outperformed, and active management haschronically under under owned them. And by
the way, they've owned a lotof banks instead, which that's what I'm
going to say, is that mostmost would seem to own are very heavily
weighted to Tom Bank and some ofthe industrial companies that have or i'll say
and defensive names that have underperformed.Yeah, so it's very very interesting.

(19:04):
We are not bank and bank investors, uh, but you know this.
This past earning season, the banksof particularly the big banks did report better
than better better numbers or beaten RAIraised numbers, and I think some of
the regional banks surprised on the upsidethat they're that they're still still around.

(19:27):
And then you had some mergers andAcquisition Act. We talked about it last
week. The bank in California,PacWest merger I think was unbelievably good for
the market. It took out aleft tail risk. Left tail risks are
bad ones, right tail risks aregood risks. Took out a left tail
risk bank that continued to trade reallywell. This week, you're going to
see more troubled banks that can besaved. Get this and that PacWest bank

(19:49):
Bank California, you know, whichis really a rescue of pac West,
did not require any government funding,so that's pretty I think the other macro
collum very comfortable, making as comfortableas you can with macro calls because nobody
knows macro. And the more peopletalk and the more they pontificate, the
more I'll just tell you they're wrong. I think we're gonna have a big

(20:11):
M and A wave. We've seenthe high bond market comeback, We're seeing
the ipo market comeback. Every timeI've seen those two things happen, you've
seen an increase in M and AM and A it's been dormant for two
years, and a big surgeon Mand A is gonna be really good for
the equal way to SMP five hundred. Well, if I were looking at

(20:32):
a big wave in mergers and acquisitions, would it make sense to look at
some of the what'll call private equityfirms that you always bring this. Well,
first off, the biggest value driverfor the private equity firms is an
M and A. It's the dealsthey've already done. So when the market
sells off, they all get hitbecause people assume they're not gonna have performance

(20:53):
feeds. Market starts rallying and thenpeople start pricing in those performance fees.
So Blackstone is already back up Ithink to one ten bottomed in the seventies.
We've already we've already priced in thefull. They're going to get nothing.
And now it's back. And Apollohad great earrings this week, and
Apollo that's thicker. Apo is goingin the SMP five hundred. It's gonna
be the next thing added. Theynow qualify, which is which is big?

(21:17):
You know, we gotta come back. Well, I'm just gonna cut
it right there. We gotta comeback. We got we got say true
to the show. We'll be rightback. This is Josh Arnold, mister
money talk with Judd Arnold's here toanswer your questions on stocks, bonds,
mutual funds, how you should positionyour investment dollars. Do give us a
call nine five two nine two fivefive six oh eight. That's nine to
five two nine two five five sixoh eight. You always get a straight

(21:40):
talk. Not sure to coded advice. This is Josh Arnold missed your money
Talk with Judd Arnold here to answeryour questions on stocks, bonds, mutual
funds, how you should position yourinvestment dollars including your IRA in four oh
one K. Don't hesitate to giveus a call at nine to five two

(22:02):
nine two five five six oh eight. That's nine five two nine two five
five six h eight. All stocksdiscussed are for discussion purposes only. None
of this is investment advice. Pleaseconsult a financial advisor before making any investment
decision. Some are all stocks discussedon the show may or may not be
suitable for you. Investing contains risk, including risk of loss. Welcome back,

(22:27):
welcome back. So in terms ofyou were talking, but when we
when we have an anyway from aboutthe coming merger acquisition wave, and I
brought up investing in some of theprivate equity firms is a way to invest
in that that move. But maybemaybe not, Maybe it's maybe it's just

(22:52):
I think they've already to invest theway that I have been focusing in on
on growth companies in particular areas,and anything with merger acquisition just happens.
Yeah, you don't have to playevery macro trend and try to express it.
And my point in saying we hadthe high opon market clothes and then

(23:15):
come back the IPO market clothes andthen come back we saw Cava, the
Mediterranean Chapulte and then another one oddjust go up one hundred percent. Those
are big enough deals. We're goingto see a lot more IPOs come post
labor day, okay, and MNA. It is the last of those three
markets, so the first of thosethree markets to close, and it's the
last of the three to open becauseyou have bid ass spreads. Bid ass

(23:37):
spreads are the people buying the companiessay they'll pay a lower price, to
people selling the companies say they wantto higher price. We have been at
an eighteen month to two years standoffbetween bid ask and that is now going
to get resolved in favor of theask. The bidders all thought they were
going to get generationally low prices.That is not happening. And you're gonna

(23:59):
see appital in the m and Amarket be deployed rather aggressively. Where do
you see more of the consolidation everythingthat is in tech? Okay, So
one of the ways that the RSPthat's the equal weighted SMP five hundred SPY,
that's the the SMP five hundred that'smarketcap weighted. And just for context
for people, the top ten stocksin the SMP five hundred are thirty percent

(24:23):
of the index. Okay. Theother four ninety are not all you know,
and if you went to the topfifteen names, I think they are
about thirty six percent of the index. It's really really it's it's contrary.
And what you've seen is with techreally outperforming. You have tech at i'll

(24:44):
say normal, the elevated elevations.Historically, you've got MidCap value. Now
a lot of that's banks, soi'll caveat, but even X banks at
very very low historic valuations. Okay. What kind of companies would you see
in the energy industrials, Energy andindustrials and some healthcare stuff. Healthcare is

(25:08):
harder because of regulation. But you'regoing to see a lot of the you
know, industrials is down. Nope, I take up at I apologized.
Industrial is up eleven percent year todate. But let me just give you
a little context for that. Industrialsis up only twenty one percent in twenty
twenty one, it's down five intwenty twenty two, and ends up eleven

(25:30):
percent year to date. So we'reup since the end of twenty twenty,
we're only up about twenty twenty threetwenty four percent, text up a lot
more, and we've now priced andinflation. It's not like industrials is really
killing it into twenty twenty one either. In twenty twenty two, the covids,
you're gonna see just a lot ofconsolidation. Private equity, which has

(25:53):
been really at bay, I'll say, since the global financial crisis, because
triple B rated corporates Triple B isthe lowest rating before you go nine investment
grade. For the first time ina very long time, triple be rated
corporates, who will only lever acompany up two and a half times,
had a lower cost of capital thanprivate equity firms that typically use six to

(26:15):
seven times leverage. And so yousaw the number of leverage buyout transactions to
client every year starting in two thousandand nine, and you're going to see
a resurgence of that as sort ofevaluation put. But I think the bigger
point, the meta point, ifyou will not meta the stock, the
meta point is, and I broughtup Bank of California pack West, is

(26:37):
you still have all these late bearsI'll call that that are calling for a
generational selloff. We have to blowup the market's got to really go down.
And look in every year you havethree to four at least five percent
pullbacks. My point, and partiallyyour point as well, is what's going
to blow up this market? Canyou have a five percent pullback? Sure?

(26:57):
Can you have a ten percent bullback, sure? But to get
a twenty percent pullback, like alot of people are still calling for,
you need a lot of bad stuffto happen. And when you see M
and A start to accelerate, notdecelerate, you see the IPO market start
to accelerate, That to me saysthis market can hang on a lot while
longer. Now the market again,we have very big sector dispersion this year

(27:22):
text and you know, the theNASTAC one hundred names we may have seen
up forty percent. They may donothing for the next six months. That
could happen. I mean that's happenedin the past. Typically NAZAC runs first
and then everything else stills in behindit. And you know that that could
be could be very very My pointwas less the positive and less the avoidance

(27:45):
of the negative. With the mand A picking up and ideos I should
say, which is I just don'tsee like you know, we've got a
little bit of a healthy rotation thisweek. I just don't see the seeds
right now, barring in existential events. Well, if you talk about an
existential event this this this past week, and we'll we'll we'll talk a little

(28:07):
bit about it now and then talkabout it in the next segment. One
of the bond rating agencies Fitch.There are three bond rating agencies standard in
poor Moodies, and Fitch rate bondsand credit and they downgraded US credit and

(28:29):
US bonds from triple A to doubleA plush, saying there there are some
major issues, well, too muchfending on the part of the current administration.
They felt the fit is overboard withtheir interest rate policy, and the

(28:52):
Congress is being in transigent on theon the depth ceiling. But I just
say, we are very deep intosegment number three, and I was hoping
to get through the show without dignifyingthis Fitch down grade of the United States
with even a second of commentary,because this is this is lunacy, idiocy
and whatnot. First of all,how can the United States sovereign credit rating

(29:17):
be anything other than super trip alasince we are the global reserve currency.
Good point, You cannot the faultas a country unless you are Russia in
nineteen ninety eight, which shows todefault. If you issue that in your
currency, what do you always havethe option to do to avoid default?

(29:37):
Print more money. That's why thefinancial historians will go back to nineteen ninety
eight and Russia and the default whichtriggered the end of launch from capital management.
They chose to they affirmatively chose todefault on ruble deeds, which anyway,
most countries don't have that option.Argentina, while the Latin American countries,
the Mexican you know, all thesecountry had to issue debt in dollars

(30:02):
because otherwise people won't lend to them. So that's number one. Number two,
how do you have the US sovereignBrendit rating not triple A and states
like Minnesota be TRIPLEA. That makesno sense that I'm not going to disagree
with you, jos So. Iwas saying this was an outside event that
wasn't talk so ridiculous. And Fitch. Look, I have almost zero respect

(30:26):
for the credit quality and analysts ofMoody's and SMP. It's a rig game.
They have to put up good ratings. Fitch isn't even the rc cola
of rating agencies. Who it is, Edith. If you are a Wall
Street person and you end up atFitch, believe me, don't end up
there. Get another career. Wow. Yeah, they don't know the do

(30:52):
you know how make triple A closand CEOs? There are right now structure
credit that blew blew the world upin OA. I hope they're the thousands
thousands, And you're going to saythe US government that can the global reserve
current? I mean, these arethese people downgraded the Roman credit at the
height of pox Romana like this.This is ridiculous. It's trying to get

(31:14):
a headline and you're you're making melittle little. I can see that you're
jumping here. Here's the other thingwe started saying. It's on the show
a few months ago, and I'mgoing to repeat it right now. Higher
interest rates are good for stocks now, not not always, not usually,
but right now, higher interest ratesare good for stocks because what does it

(31:36):
mean? Means the economy is doingwell? When the economy is doing better,
better than many people expect. Andyou know, when you're you talked
about the number of people who areexpecting a major sell off would probably be
equal to the number of people analystswho are talking about having a serious or

(32:01):
significant recession and have been talking abouthaving a significant recession for the last year
and a half on the yield curve. The genius of these recessions for people
that have held fast to that callfor eighteen months without reversing it. Myopically,
I would point out, is eventuallythey will be right. But guess

(32:22):
what. The difference between being earlyand being wrong on Wall Street is indistinguishable.
We'll be back. This is JoshArnold, Mister Money Talk with John
Arnold here to answer your questions onstocks, bonds, mutual funds, how
you should position your investment dollars includingyour IRA in four oh one K.

(32:43):
Don't hesitate to give us a callnine five two nine two five five six
oh eight. You'll always get streettalk. Not sure your coded advice.
This is Josh Arnold, Mister MoneyTalk with John Arnold to answer your question
fun stock funds, utual funds.How you should position your investment dollars including

(33:05):
your IRA in four oh one K, call us nine to five two nine
two five five six oh eight.That's nine to five two nine two five
five six oh eight. You alwaysget straight talk, not sugarcoated advice.
Well, earnings continue of pace.And it's not just my two large companies,

(33:30):
Apple and Amazon that reported this week. Apple finished on the downside,
Amazon finished on the upside. Alsohad my casino stocks reporting this week.
Caesar's Draft Kings and MGM Draft KingsI thought did very very well and it

(33:52):
looks like they're going to be makingmoney either before the end of this year
or early next year. Uh,and that could be very very interesting as
we start into a heavy betting season. MGM and Caesar's to me did very
very well with their Las Vegas casinos. Regional casinos not as as well,

(34:19):
but but their sports books are definitelyshowing showing profits and that is a plus.
And if I look at Las Vegas, we've not only have football season
happening, you've got Formula one andFormula one as a company, they reported
this this week and there they didbetter, better than expected. And then

(34:43):
we have the Super Bowl in LasVegas later this year, so we'll say
sports gambling and Las Vegas should bepretty strong in my estimation over the next
several months. And maybe they're uh, maybe they're After next week. We
do have some of the media companiesreporting numbers, including Paramount, which I've

(35:07):
just assumed snooze through and Disney that'llthat cannot be. That cannot be real,
real good or promising, particularly witha number of Disney Plus subscribers going
down and not up. But maybethey'll have something exciting to talk about on

(35:30):
about ESPN if somebody were to becometheir their partner. But that's that's coming
up, uh in the next week. And Judd, you have some interesting
companies that are going to be reportingnext week. Oh that's a big week,
big week for my name. We'vegot up Start, which I don't

(35:51):
own, but it is a comparablecompany. To one eye you own,
which is Pagaya. That is Thursday, after the quotes for up start Pagaya.
At Thursday morning, a guy avery important We got ti the Oncology
Institute Thursday afternoon. I did.It is true. I wrote a letter
to the company told them you doa lot of other things differently, but
also said I would buy the companyat a dollar twenty five a share if

(36:14):
they gave me a little bit oftime. People that it's funny. I
I, oh, I'm not.I'm not the CEO. I have a
call with the board and the CEOafter they said we'll talk to you after
earnings. I've actually had a fewgood calls with people, and people are
asking, are you serious? Isaid, yeah, that price? Are
you kidding me? They said,I'd love to invest in the deal.
Okay, Well, all of asudden, my son the corporate activist,

(36:40):
and well, I'm not even goingto call you, maybe even a corporate
breater. I did put a lotof other things in the letter other than
I will buy you that. Iwill point out the following sense and you
can read this on Twitter. Mymy handle handles I think is the right
way. Well, it's for yourresearch company Lake Cornelia your research the hand
was at Cornelia Lake. I gotfourteen thousand followers. I just I just

(37:04):
crossed over. I'm a big deal, A big deal, Minnesota, modest,
big little deal. Um. Sowe got them Tuesday afternoon, so
that'll be that'll be interesting as well. We also have some healthcare companies that
I follow, Canal Health, whichhas been a corporate saga that deserves two
books, five soap operas, anda reality or a Hallmark movie or a

(37:30):
Lifetime I don't know what what Imean. Anyway, I've got a nine
part podcast series you can find onmy on my Twitter page. But that
is I believe Tuesday and then Wednesdayfor CarMax. We still have a few
energy names left too, but Itraditionally next week it's the last week of

(37:50):
real learnings. Then after that everybodyreports as a fake company. Oh so
you're you're talking like Nike is afake company? Well retails last the earning
season has lived up to what theexpectations were, which is we had a
lot of positive pre announcements and earningshave generally been better. I think that
the earnings and have been earnings andguidance for the most part have been much

(38:15):
better than most animals had had expected. And I think that's that's surprised people
you talked about, the people whoare expecting recession and or a market pullback,
they've been They've been caught off guard. I think things to watch.
We had a really good inflation numberFriday, and Goldman came out and said

(38:36):
it's unlikely the FED raises in Septemberand may not raise in October. Again,
there is no August meeting the bankers. They take them under the August
off. They go to Jackson Holeand they give some speeches. But plation
number looked pretty good. Oil hasbeen sneaking higher mid eighties. The administration
came out and said they're not goingto fill up the spr the strategic patroling

(38:59):
receive, they fill up something orput something. Yeah, I have five
hundred million barrel capacity. They've refilledI think three million barrels. And everybody
was Joe Biden's taken and Amos hasteand the Energy advisor taking victory laps on
selling oil at one hundred and twentydollars a barrel in the middle of the
Grand Well, guess what, guys, you didn't complete the trade until you

(39:20):
cover your short Well, it's stillit's still out there. And my understanding
is they put put some of thatback and then have been taking it out
that a pretty significant rates. Theyhave not refilled anything, okay, because
they keep selling a little bit andjust presume none of that's going to get
refilled before the election, and thatmay never be refilled. And it's unfortunate,

(39:43):
especially if we ever have a war, because we give up half our
strategic patroleum reserved, the whole reasonthe darn thing exists anyway. Anyway,
I digress, but I think forattends, I can go bad for the
market. Certainly, oil in theeighties is going to is kind of goldilocks
where the producers do really well inconsumers and afford it. He started getting
up to ninety ninety five, youstart having our aggrest attacks impact on consumers.

(40:06):
That's one too. We did seeThursday, now Friday, it was
fine on the good inflation number,but Thursday you saw that ten year bond
creeping up to about four point twopercent, and typically over four on the
ten year is a bad thing forstocks. And on Friday the ten year
finished just about four percent, justabout four it came back, so,

(40:28):
um, that is another thing towatch. I'd say the ten year moved
Thursday really was a negative for themarket, and the market failed to rally
on Friday, and I just I'llthrow this out just in terms of the
bond market, one of the bighinge hinge fund managers, Bill Ackman of
Pershing Square Capital, came out andwith a pronouncement that he was shorting the

(40:55):
long treasury. Long treasury could alsobe symbolized by the market to TL two
right, he's betting on higher longterm interest rates. So short term rates
are five to five point five percent. The peak of the rate curve is
the six month pock Okay, it'sabout five point five percent. The curve

(41:16):
is inverted because front front end ratesare higher than long term rates typically a
refreshon resessionary single because if you thinkabout it, long term rates should be
higher than short term rates normally becauseyou're taking more credit risk because time equals
risk. Correct how the curve wasgoing to resolve itself is a question.

(41:38):
Typically people say a bullish reversion iswhen short rates fall, and people say
a bearish reversion is when long ratesrise. I think this is awkward and
dated thinking. Given the scenario,I think I would argue, and we
have been arguing, that it isbullish for long rates to rise because it

(41:58):
means the economy is getting better,not worse. But we got a lot
more to talk about. Give usall think the economy is getting a little
better. This is Josh Arnold,Mister Money Talk with Judd Arnold, always
here to help you. Nine tofive two nine two five five six.
Josh Arnold Investment Consultant is a registeredinvestment advisor located in a state of Minnesota.

(42:21):
All securities discussed are for informational purposesonly. Investing contains risks, including
risk of loss. Consult your investmentprofessional before making any decisions about your investment portfolio.