Mr. Money Talk

None

Episode Transcript

(00:10):
Good afternoon. 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
to give us a call at ninefive two nine two five five six o
eight. That's nine five two ninetwo five five six oh eight. You

(00:34):
always get straight talk, not sugarcoded advice. Before we begin, usual
disclaimer pass performance and no guarantee offuture results. Markets are volatile. Opinions
that we share are hours and hoursalone. Any stocks that we discuss may

(00:58):
not be suitable for or you.Nothing should be considered investment advice. Please
consult with the financial advisor before makingany investment decisions. What a week.
Wow, I am exhausted today,Judd. I'm energized. I am exhausted
now you could be energized. I'ma little a little exhausted just from all

(01:19):
that has transpired. That this weekand next week is going to be more
more of the same. We'll seethe big shiny headline, the shiny headline.
You're going to talk talk about theshiny headline and all the success you've

(01:42):
had with one of your don't talkabout the financial that's not the shiny headline.
That's individual stock stuff. The shinyheadline is what the heck is going
on at the tail end of theUS government bond curve. Oh, the
tail end of the US bond curvesthat it is ten year yields and thirty
yield year yields are screaming higher.Well that that that would mean that the

(02:08):
yield curve might be flattening or evengoing positive, And wouldn't that be good
for the economy. Is what's calleda bear steepener, because the back end
is going up to meet the frontend. As the bond vigilantes are now
debating, if the FED doesn't mightnot go far enough. The Fed might

(02:30):
not go the economy is too strong. Bond yields off is brutal for long
duration assets. So of course,semiconductors at the Estimation Deck had a tough
week this week, down seven points. And the ARC Fund, the longest
duration of anything, has just gottensmoked too. It was up fifty percent

(02:50):
at the highs. I think it'sonly a thirty six percent year to date.
Now, that's that's really that's reallyreally tough. For the ARC fund,
but and also with with the longduration assets, particularly the Semiconductor index
and or TEX stocks coming down,they too have lost long during the Nasdaq

(03:12):
one hundred. The QQQ ETF isdown for the quarters white blowout earnings with
the long duration assets, particularly asthe semiconductors, which if interest rates are
going up, the semiconductors and someother tech stocks tend to sell off.
They tend to sell off, andthey are selling off now. It is
also August. Once you get intothe second week in August, it's the

(03:37):
dog days of summer. Well,markets are usually weak. People are in
the Hamptons. Well, we'll callit the varsity is in the Hamptons.
The junior varsity is in the inthe office handling the trading, and usually
they're not able to make a majorbuyer cell decision until until after Labor Day.

(03:59):
Were they comes back. September theycome back, not just the varsity
quote unquote comes back. September isa big conference month. It's when you
typically get all the companies meeting withinvestors and you get your first soundbites on
how Q three is looking well.And typically Q three is one of the

(04:20):
weaker quarters during the course of theyear for most most companies, and September
September October the two worst months ofthe stock market typically not not the whole
whole month of October, just partof the month of October. But I've
always looked at September as a veryshort months because you have the last last

(04:43):
week of the summer, which tendsto be a long weekend with Labor Day.
Then you have the Jewish holidays,and there is an old saying,
old market saying, uh, sellon Russia Shanna and by on yon kipour,
and that does happen during during themonth of September. September historically as
negative returns is one of the onlymonth that is a negative return if you

(05:08):
go back hundreds of years. NowI'm going to ask ask this question,
Uh, wouldn't it make sense thento sell everything right now and then come
back in Oh, here we go. You know, nobody's a smart you
stay invested. Look we are.There's a lot of people who trade short
term our edges that were longer term. If you buy good companies, you

(05:30):
hold them for a long period oftime, you do great. We do
like to trade around the margins,but you're just over you're just over complicating
things. There's also the tax leakageissue of what you're talking about, less
is more. Well, that's whywe do like to keep cash. Cash
on the sideline is part of ourasset allocation of keeping up up to thirty

(05:54):
percent in cash and the balance investedin we'll call it high quality world companies.
Uh, and my focus happens tobe in companies involved in the Internet,
leisure related to industries, China relatedindustries, real assets such as energy
and real estate, and then doinga small bit of short term trading looking

(06:17):
for some trading opportunities as they presentthemselves. Absolutely, well, it's been
a good year. It's been agood three five, seven year. It's
been it's been nice. We weconcentrate, we buy a few stocks and
we u you gotta got some nicereturns. Happy to talk to any of
about them. You and I arethe two largest investors in our strategy,

(06:40):
so we are aligned with clients,as they say. But back back back
back to the fund, to theto the exciting week. Not only did
you have a lot of earnings comecoming in and many companies actually have beat
and raised just this past past week, but you also had the CPI report.

(07:05):
CPI was better than expected. That'sconsumer price in next that was better
than expect Its inflation was lower PPI. The producer price in the next was
a little bit hot, a littlebit hot. Well, of course,
of course it was a little bithot. The price of energy has gone
up all that as we talk macrosthough rates at the back end of the

(07:27):
curve, the ten year and thirtyyear bond trending higher at highs for the
highs for the year. Oil alsoyou know, bottom just below seventy.
Now we're mid eighties and it's lookinglooking a little high. And I do
have some energy exposure, and well, one of one of the things I'm
talking about about energy that I haveread is that for US production is actually

(07:56):
up, US Produssians all a littleThe biggest thing is non US productions up
a lot more, and OPEC isreally cut back to sort of absorb that.
Now demands a little bit higher too. But we have what's brewing here,
and this is part of my energythesis that we we've talked about,
which is we just have an investin oil and gas right nine years and

(08:20):
we're at that point with demand withshale p game that, Yeah, oil
can really run away. The righttail risk is to the upside. So
that is something that's good for thesector, bacity economy. Right now,
we're sort of in the goldilocks zone. I'm not going to say happen.
You know, how do you hownecessarily do you say that oil is or

(08:43):
energy assets are bad bad for theeconomy? Well, oil goes through one
hundred then acts as a regressive tackon consumers. Suppose and I hedge for
that. If you're an inventors oldown a little bit of oil. It's
also inflationary obviously, well, bothinflationary and deflationary. It's inflationary and that

(09:03):
the cost of goods goes up,it's deflationary and events that man, that
really shows the consumer. Fifty percentof the bottom point tile of income,
fifty percent goes to the energy costs. If you're a poor person in this
country, which is just you know, tuk to be a poor person anywhere,
fifty percent of your money feel intoyour heating, electric and gasville.

(09:24):
Oh well, I'd like to talksome more, some more about energy,
some ways to invest in energy,as well as dealing with this pullback in
the market and Also, one ofthe things that I had read is one
major hitge fund player. I dobelieve that was Bill Ackman of Persian Square

(09:50):
is short the long bond. Yeah, he's betting a higher interest rate.
Quack, can we come back.We'll talk about that and more. This
is Josh Arnold Money Talk with JuddArnold. Give us a call nine to
five two nine two five five sixo eight. You'll always get straight talk,
not sugarcoaded advice. Josh Arnold,mister money Talk with Judd arn experienswing

(10:18):
your questions on stocks, bonds,mutual farms, how you should position your
investment dollars including your IRA in fouroh one K do give us a call
nine five two nine two five fivesix o eight. That's nine five two
nine two five five six oh eight. We ended the last segment talking about
one of the major hedge fund investors, Bill Ackman of Pershing Square, going

(10:41):
short, or betting that the longbond would decrease in value and interest rates
would go up, and so farhis bet is paying off. The long
bond measured by the TLT has goneeven in this past week, from ninety
eight dollars a share to ninety sevendollars and thirty seven sets. That's a

(11:03):
significant sell off for a bond yielderat a high, and the ten year
in third year, I think they'reat a twelve month high. And what
the bond market is saying, wedefeated inflations, but the economy is accelerating,
which will inevitably lead to inflation.And they're worried that the Fed will

(11:24):
make a policy mistake and neither cutrates or not hike rates more to slow
the economy. That's what the bondmarket is saying. Well, that almost
sounds sounds conflicting or two conflicting thoughtsin one, what do you want from

(11:50):
me? You got a strong economy, interest rate, the back end rates
go up, strong economy, theygo up. The US economy is looking
pretty good. We did have aslightly weak jobless claim number. But the
no landing scenario, you know,we debated whether it's hard landing soft landing.
Looks like no landing session is atleast three months out. The reason

(12:11):
we can say that is nobody seesanything right now. Well, how is
it? How are you going tohave a recession when the federal government is
deficits spending one point five trillion ayear, twenty trillion dollar economy. It's
difficult, it's very difficult, andunemployment is very low. I'll be at
the jobs participation rate, to meis is also at a low number.

(12:39):
Well, let's throw in a fewother things too. China remains in the
doldrums. Forget dultrums. China isin a deflationary period, and Zijing paying
the dictator of China. I cancall him a dictator, the autocratic leader
of China. Okay, don't callhim a dictators. He gets voted in
by somebody where, some group.I'm rolling my eyes right. Anyway,

(13:03):
he's gonna have to He is thesame problem that the Middle East had with
the Arab Spring, which is thevast majority of the people. I mean,
it's less in the Arab Spring.So I think in the Middle East
about forty five percent of the peoplealive today in the Middle East are under
the age of thirty. He's gota real problem. Youth unemployment in China.
It's very high. It's very high. They're gonna have to stimulate and

(13:24):
they're gonna have to devalue. Sowe'll see, we'll see, And I
mean in China that's That's typically whathappens when you cut off all your entrepreneurial
spirit and say nope, we're notgoing to We don't want any more entrepreneurs,

(13:45):
we don't want any businesses growing.Well they don't. They's the power
game over there. They have therearrested Jack Ma ahead of Alley Baba.
Are they that pained him for awhile? Now he's on the sideline's back
if he d Yeah, he's backedthe way. Olili ben Talala is back
in Saudi Arabia after being okay okay, he got taken to the room with

(14:07):
no windows and padded walls and hegot read the Riot Act. But either
way, well, Ali Baba's stockis up. They reported better than expected
earnings and their sales are actually increasing. Look, I think China is a
nice story for next year for theUS where we sort of started with rising

(14:28):
raids, which is people are concernedwith either the economy the strength of the
economy coupled with where the interest ratesare. And I know it's sort of
crazy to think about given that we'vehad the quickest fed interest rate increase or

(14:48):
the most substantial interest rate increase ina short in a period of time over
the last eighteen months that we've everhad that interest rates may still not be
high enough for the bond market.So who knows, but we do.
We talk about the first segment.It is the coupling of a very strong
run for the market, particularly inlongduration assets which attached semiconductors and the ARC

(15:11):
funds, and runaway interest rates inthe ten and thirty year bond has pressured
this equity market recently. Now thereis this underlying rotation, which is energy,
which was down as much as elevenpercent years to debt, the XL
the S and P five hundred Energyand it S is now up two percent
for the year. And banks,which were down thirty I think thirty three

(15:35):
percent at the lows are only downsixteen percent. Those have been rounding.
So value stocks are coming Oh,I say banks, banks have been rouning.
I'm not sure that that's all banks. It might be just the larger
banks are not the smaller. Someof the regional ones are coming back to
and then need it at the Mand a deal. We are not bank
investors. We watch banks. Wedon't like owning things that can just go

(15:58):
to zero tomorrow on sentiment, andthat is what banks are If you want
to buy a bank, I'll justsay that by JP Morgan. If the
if that thing ever actually has aproblem, you've got bigger problems because it's
the global economy and starns. Butwe're not bank people. You want dividends
by Coca Cola. We talked aboutit all the time. Anyway, back

(16:19):
to the economy, we're gonna afterthe CPI and PPI. It was very
interesting seeing the Fed fund futures basicallysaying there will not be a rate increase
in September, and I think theprobability of a rate increase in October is
less than ten percent. The nextmacro thing that we have is Jackson Hole.

(16:45):
Which is it next week or theweek after? I think it's the
week after, it's the it's theend of the end of the month.
That is the big Fed policy confabin Jackson Hole, Wyoming. You bring
in the European central bankers. Theyhave a nice party. I'm sure they're
raven at nice. And I saythis very tongue. And she obviously last

(17:06):
year that interest rates, that orthe inflation situation had really gotten bad,
and Power used the opportunity to reallycome out and sound hawkish. We don't
think there's going to be as impactfulas a speech this year, but we
shall see. That is another I'mstill still going on on the fact that
the that the FED is going tocontinue to jawbone on interest rates. I

(17:33):
think the Fed, as much asthey might say we're in a data dependent
mode, is still going to bein the indicate if it's at Jackson Hole
they do that, I still thinkthey're going to be talking tough higher for
longer and one or two more interestrate increases depending on the data. Either

(18:00):
that happens or not, I don'tknow. I think the bigger thing to
watch is just, you know,when we watch it light to hawk this
ten year and thirty year bond yieldmove, I'm a year about ten to
twenty five bases points away from theequity market just having a throw up day,
which we would probably buy because wethink they'll get it under control.

(18:21):
But I'm just noting that's more ofa short term trade thing. I don't
know which way it breaks that.I do know if we keep running away,
it's I mean, it's already hadan impact on the SMH that that's
the fund semi conductor Index and theArk Index, which just got brutalized this
week effectively on this and a lotof this is the computers. The Aldose
rates up. Wow. I thinkalso I saw, at least with the

(18:45):
semiconductors, Biden's executive order this thisweek relating to China investments again, So
that's that seemed to coincide with sooften and at least with semiconductors and other
other tech fair enough. Now nextweek we do have a big tech earnings

(19:11):
report coming from the VideA, somore talk on their sales and or potential
sales, particularly after their last reportset the stock up very quickly from three
hundred dollars a share to four hundreddollars a share on their forward guidance and

(19:36):
forward sales. And that stock hasreally come back in and it popped out
about four seventy and we're back tofour oh eight. Seemingly everybody on Wall
three nuns then video now in theMagnificent seven. There's no more fang stocks.
It's the Magnificent seven. And thatwas a good movie, by the
way, it's a good movie.But earnings is all crack creeping in.

(20:02):
We've got a great year. Now, I'm still of the camp, and
I just don't see with the creditmarkets where they are. I just I
think we're in a bull market andI think good stock can work. So
still perilous out there. I thinkM and A is really going to pick

(20:22):
up after labor Day. But wegot to take a break and we'll come
back after the After the break,this is Josh Arnold Mister money Talk with
John Arnold. Do give us acall nine to five two nine, two
five, five, six oh eight. This is John Arnold Mister money Talk.
John Arnold experienswered your questions on stocks, bonds, mutual funds, how

(20:48):
you should position your invest of dollarsincluding your IRA in four oh one K.
Don't hesitate to give us a callnine five two nine, two five,
five six or eight. That's ninetwo, five six eight. You
always get a straight talk, notsugar coded advice. Just a reminder that

(21:08):
everything we talked about in the show'sfor discussion purposes only and should not be
considering investment advice. Please consult thefinancial advisor before making any investment decision.
Some are all as the investments wediscussed on the show may or may not
be suitable for you or for anybodyfor that matter, please talk to a
financial advisor. Investing engage risk,including risk of laws. Next week next

(21:30):
week, and I, as wesaid it at the top of the show,
next week should be as exciting inthe marketplaces as this past week.
With a lot of retail earnings ondeck. You have Target Walmart Home Depot,
you have that new issue Kabba Groupto report, you have Ross Ross

(21:55):
stores, probably TJ Max reporting.So it's a big, big, big
week for for retail. UH Andthen this past week you talked about mergers.
UH to pre Holdings is going tobe met merging with Tapestry. So

(22:18):
I was that acting fact, that'scoach, find Jimmy chud whatever. I
hate all that. These are terriblestocks. They're very hard to predict,
retail stocks and move twenty percent onearnings. They got to constantly reinvent themselves.
That's not all righty, Like it'sthe same problem with media, the
same problem with media. They alwaysgot to reinvent. Now we're gonna have

(22:41):
to go back and talk about Disney'sor earnings this past Oh god, those
were inspiring. And by inspiring,I mean how all my goodness you you
keep rolling your eyes. We needa television screen on you. When we
start talking about we'll say media stocks, among other others, just awful.
And then just all these guys arestruggling with the director consumer. It stinks

(23:04):
as it I'll say that it's Imissed the cable bundle where you pay a
one hundred bucks or one hundred andtwenty five bucks and you get a lot
of channels. Now you got topay twenty bucks a month for one channel.
We'll see, I'm back with acable. I like, I like
my cable's right, right, I'man old guy. They don't make DC
They just like money on fire.We finally had some good movies in the

(23:26):
box office without butteiver and barbing.But box office is a tough business.
It's just it's really hard to puta big multiple on it. So these
are stocks to talk about, notreally stocks to invest in. But Disney's
got a lot of problems. ESPNthey're doing the deal now with Pen Gaming.
They got Penn to They got Pento Pen to Pony up one hundred

(23:48):
and fifty million dollars a year forthe next ten years for Pen's right to
use ESPN for their online sports.Best turns out Pen does not have the
technology right now to make it,to make it all work, and or
to capitalize on this particular deal.Meantime, Pen, which had spent h

(24:12):
five four hundred million dollars to buybar Stool Sports, sold it back,
gave it back well for a dollar, gave it, gave it back all
Buck just had to sells gave itback to Portnoy. It's really interesting too,
So let's just frame this. You'vegot draftings and then you've got fan

(24:33):
Duel. Fan Duel was owned byflutter Food. Those two are clearly the
leaders in terms of worrow. Ithink they have like seventy eighty percent market
share. A lot of people havetried to pierce this. When the big
casino giant and shut down, justshut down. They gave up because brand
value doesn't mean anything, and there'sno loyalty with online betting. And then

(24:56):
you have Pen out here, Imean, and then billions. I think
they just spend one point five billionup front of this over ten you paid
out over ten years, plus giveESPN warrants to purchase five hundred million dollars
worth of stock at twenty six dollarsa share. It's just when are these

(25:19):
guys, this deal looks like it'sfrom twenty twenty or twenty twenty one.
Draftings sold off initially, now it'sback. I think this is going to
end up the same way when Bettdid. I think it's a silly deal,
but we shall see. Online gamingis it's a tough It's a much
tougher business than you would think.You got to spend a lot on advertising,

(25:41):
a lot for customer attention, highlycompetitive. So well, the interesting
thing is, you know, draftDraftings is turn turned profitable. Caesar's Palace
on their online game gambling was profitableMGM, MGM. Betts was also profitible,

(26:06):
but those after their earnings reports,which I thought were pretty good,
all of them have sold off.Just remember the most profitable online gaming company
in the world, it's called betthree sixty. It's not public, it's
owned by a quantitative research person.She's brilliant. She's one of the richest
women in the world. Not thatthere's a difference within women and men,
but it's highlighting, you like thehighlight success and diversity and all that fun

(26:30):
stuff. Okay, how is theirscale bigger? And why do they win?
Because they have the lowest take greatmeaning the bidass spread on their site.
They keep the least amount on betbecause they realize lower prices is a
moat and you win with scale.And that is the problem with online gaming,
which is the economics are great ifyou get massive scale, and when

(26:53):
you're not at massive scale, thecosts are the same as everybody else and
you just don't make as much money. And so it's a business where long
term you would expect winners to takemost. The UK has had online betting
for a lot longer than the UnitedStates has, and you look to that
analog and that's what we would expect, which is really good for draft kings

(27:17):
there there there we go. Goodtake dat, Take dat. I do
like I do like draft kings.Do do like draft kings. But it
is going to be very very interestingwith all the sports betting, and particularly
with football season starting now so tospeak, football season starting, balls,

(27:41):
coming schools starting. We got itall. It's gonna be a really big
last third of the year. Andyou know, I'll go back over the
macro call. The macro call isother than rates going up and oil going
up a little bit more, wethink M and A is going to accelerate
and that should put a floor inthis market or in the midst of web
all at a healthy pullback, Ican say that, yeah, healthy pull

(28:04):
back at maybe five hundreds up sixteenand a half percent for the year.
The equal weighted S and P fivehundreds up seven Both of those were about
two to three point higher a coupleof weeks ago. So well, I
mean, in any any given year, as we've discussed, you know,
the stock market will have three tofour, five to ten percent pullbacks caused

(28:25):
by any number of events, anynumber. Well, Sam Bankman freed is
in jail tonight. That's the FTXbounder guys, bail revoked biggest. I
really don't care. I don't careabout Sam Sam Bankman Free Freedman. I
don't particularly care about cryptocurrencies. Howye, how you really feel? Okay?

(28:49):
Okay? Well, I do knowI know that you know. I
know that PayPal, when they cameout with their their earnings, made a
big announcement, a big push fora pay Pal stable coin back by the
by the dollar. And I doknow that the regulators are upset because they

(29:11):
don't have any regulation and these cryptocurrencyfirms are pushing for stable coins. I
mean pay Pal e that. Imean that has a stock that will goodness
great no return. Going back totwenty eighteen, stock bounced off what three
hundred now, yeah, about threehundred where it's sixty bucks today. They

(29:34):
got to figure out what the actsgoing on that one's been. That one
is on everybody's activist radar. Ooh, ooh, tough, a lot of
losers out there. I mean,this has been a perilous market the last
three four years. I mean it'salways a paralyous market. I mean the
idea behind paid Pal and I hadI had traded pay Pals, you know

(29:56):
a number of years years ago,seemed to make some sense, and particularly
be given they've got their cash applicationof Venmo, which seems to be pretty
pretty good. Uh you have youhave Square also known as Block, which
lit lit thirty five billion on firewith the afterpay acquisition. But we're still

(30:21):
going to be digesting is this thisCOVID economy For a very long time,
A lot of people did a lotof silly stuff, myself included. But
the corporate overrang is going to gofor a while and hopefully that them in
any way really cleaned up a lotof this stuff. But well, you
do. I'll say you've been aleader in talking about mergers and acquisition,

(30:45):
and there have been. You know, we had a bunch last week,
which for August is nuts and we'llsee what happens Monday. Monday is always
merger Monday if that comes back.But we got to come back for our
final set. This is Josh Arnold, mister money Talk with Judd Arnold,
always here to help you with yourinvestments, whether it's inside or outside of

(31:07):
retirement account. Do give us acall nine to five two nine two five
five six oh eight. You alwaysget straight talk. Not sure. This
is Josh Arnold, mister money Talkwith Judd Arnold, here to answer your

(31:30):
questions on stocks, barns, mutualfunds, how you should position your investment
dollars including your IRA in four ohone K call us nine five two nine
two five five six oh eight.Wait, I've got a little yeah,
well whatever, Well wait, waitfor the winter and you run outside.

(31:51):
You know I'm a swimmer now Iused to be a runner. Well,
I don't know. I'm not sosure which you call. What I've got
is running, but I do keepmoving forward fair enough. While moving is
living, Moving is living. Thatis for sure. That is for sure.
As we've talked about throughout the show, the scary i'll say scary macro

(32:13):
thing going on. These long termbond yields are really starting to get out
of control. The ten year andthe thirty year yields are racing up,
even though the inflation date is prettygood. What the market is saying is
the Fed actually needs to raise ratesmore because the economy is too strong,
which is a call that we havehad for a while. Well, you
would you have said that higher interestrates equal is a positive for the market.

(32:37):
Negative interest rates or falling interest rateswill be a negative for Let's clarify
that statement. I said that forthis moment. We started talking about this
I think five months ago, whichis we just thought the market had it
wrong and the economy is too strong. And I say that's played out a

(32:57):
lot now. Interestingly, we've hada lot of positive revisions, especially for
the Magnificent seven Apple and Amazon,two biggest positions of our firm. Amazon.
I saw something this week. Sincethe earnings, right, you've had
twenty six percent positive revision to nextyear's earnings. It is the biggest of

(33:19):
the Magnificent seven. It's the biggestwrite up of twenty twenty four earnings of
any of those stocks, which iswhy a lot of people are floating in
Amazon after two very tough years inthat stock. Tell me about being very
tough. And I've expressed this onthis show for a while last year,
especially very very disappointing and frustrating withI'll say it is a shareholder and Amazon

(33:44):
stock on Amazon stocks seems to moveup or down on people's perception of Amazon
Web services, not so much ontheir retail business. And I thought the
retail business is pretty good. Well, you don't even know it's a little
marginal. Yeah, well, Ithink you've got the mix shift going on
at AWS kind of Aws is theirserver business, kind of like Apple with

(34:05):
their services business is reaching that criticalmoment where you get this thing called mixed
shift where all of a sudden,you've got enough of those earnings and the
Wall Street pros will say, well, I can value this now excluding retail.
I'm just gonna put the big multipleon this thing. We saw that
with Apple and it took the EPsmultiple from twelve to thirty. And I'm

(34:25):
not saying that Amazon's gonna have tosay I mean Amazon or trade sixty times
earnings. Well, Amazon has alwayshad an extremely high multiple of earnings.
Now on a price of the salesbasis is actually not that expensive. It's
like two a quarter times. Solook if it trades to three times,
it's great. I think for asa former Wall Street guy, I'll just
tell you positive revision on self sideestimates equals by the stock. You have

(34:51):
a lot of people, that's allthey do. They look for positive inflection.
You get one more quarter and you'reprobably gonna get it. Because Amazon
and when I've been in one oftheir what I call growth phases and not
spending phases. Yes, and it'sa great time down the stocks. So
hopefully we see two hundred. Alot of people are batting around this two
hundred dollar number I had that Ihad that number a few a few years

(35:15):
ago. Well, yea, youmight see it again. You might see
it again. So oh on Applefinally found a level at hundred seventy seven.
You know that I think Apple isoversold, and I think the same
is true with Microsoft. Both boatstocks are off about twelve percent from the
eye. Boats reported to me goodwell, an Aztec was up over forty

(35:40):
percent year to day this is alittle bit of a consolidation. I think
our macro call remains the same,which as we see, we don't see
a recession anytime soon. We seean increasing m and a wave. Markets
still perilous. But yeah, whenis it not perilous? I will say

(36:00):
we both strongly disagree with the barethesis of our recession tomorrow inflation running away.
We actually see economic growth and we'reentering a presidential election year, which
is typically a good year for stocks. Typically typically a good year for stocks.
Well, that's all we have inthe market is typically Now, look,
we talk about a lot of macro. Let me just take a step

(36:22):
back. We're ultimately company investors.We look at companies, we look at
earnings, we put on multiples,and we say, all right, Apple,
what do we feel most strongly about? Apple does about seven bucks a
shareff free cash flow? We feelpretty strongly it's gonna be ten bucks a
shareffree cash flow in a couple ofyears, and that should drive the stock
race higher. Now it's a macro. You gotta be macro aware, and
we're macro aware. Are we whippingwhipping it around all the time we're trading?

(36:45):
No, we're not, but yougotta dig into all the macro stuff
because you never know how the dotsare going to be connected, so to
speak, and you got to beaware because of that's what drives your opportunities.
So anyway, I've said that piece, there you go, there you
go. Now before we before weend, you've got to talk about a

(37:07):
little company that you've like, biggercompany now, Well, it's definitely bigger,
bigger company now because since you firststarted mentioning it do dollar twenty.
Now the stock is it a dollarsixty or two dollars and sixty cents?
I'm sorry, seeing two dollars andsixty cents from from a dollar dollar twenty.

(37:28):
We'll say this was a we'll callit a busted Bustet's back viewing in
an area that you've had some successin. They are a financial intermediary.
They link lenders with the acted backsecurity market and they take a little piece
of the network business. This iscalled the guy at Takers PG. Why

(37:49):
billion shares outstanding? It is notfor everybody, so please be careful to
stock went from ten to fifty centsand now it's back to two sixty.
Now there's a billion share. Soit's like it's still an it's almost a
three billion dollar company. So like, let's let's let's just think about de
Breath that they had an unbelievable earningsresult this week. Now it is come
to Upstart, which is another highflier from COVID days kicker of that's upst

(38:15):
UPSD had a terrible earnings result Tuesday. Stock was down. Stocks down fifty
five percent in six days. Soit's going from sixty dollars that over seventy
dollars to have the thirty dollars downto thirty. That's that's a well,
that's a that's a huge hurt foranybody who who well, from COVID peak
to COVID trough, it went fromthree ninety to twelve. That's up Start.

(38:37):
We're talking from twelve to seventy nowback to thirty. But guyau so
up Start reported Tuesday, people thoughtthat maybe the guy is gonna miss two.
The guy actually blew numbers out whentheir key partners, so FI also
blew numbers out as well. Thewhole cell side came out Friday morning and
said, look, we got thehigh target of six bucks. The guys

(38:59):
to sixty from an earnings, butmultiple. I think that's been traded twenty
times, even about seven seven hundredmillion in a couple of years. You
do all that math and you getto about ten bucks to share in a
couple of years. That's my target. Ten bucks. There's gonna be many
ups and downs, and maybe I'llchange my target. But we got a
huge beat on earnings, a hugeguidance raise, and I just said with

(39:21):
Amazon street numbers going off street numbersgoing up. With Pagaya, you had
their biggest volume day ever on Fridayon Friday with over sixty million dollars of
volume traded. So that's when Istarted. That's a lot of skin and
out the trading. Or you thoughtI was crazy when I was buying this

(39:42):
thing. I was treating two millionbucks a day and that was only two
months ago. They all care,They all care. Now be careful though.
That was not suitable. We gota lot of stuff coming up this
week, and then we got thenwe're gonna get a little calm in them.
We're about a week and a halfaway from calm, and I'm gonna
take a little but we got alot left. It's the back half of

(40:02):
the year and we got a lotof dollars left in a so and and
there are a lot of a lotof big money players do have to have
a lot of catch up to do, Yes, they do, but it's
it is going to continue. Themarket's going to continue to be volatile,

(40:22):
So do pay attention to your assetallocation mix. We keep up to thirty
percent in cash to take advantage ofsome opportunities. Plus for safety and I
happen to focus in on companies involvedin the Internet leisure related businesses, something

(40:42):
I found in graduate school. People, no matter what the economy is doing,
spend money on leisure pursuits, tryingto related businesses and real assets including
energy and real estate, plus doinga small amount of trading to take advantage
of shorter term opportunities. This isJosh Arnold mister Money talk with Judd Arnold

(41:06):
always here to help you. Youalways get street talk, not sugarcoded advice.
To bear in mind that the opinionsof this program are RS and RS
alone. Investments are volatile, marketsare constantly trading. The investments that we've

(41:28):
shared may not be suitable to you. Please make sure to contact an investment
advisor. Pass performance is no guaranteeof future risk. You have a question,
call us nine to five two ninetwo five five six zero eight.
Josh Arnold Investment Consultant is a registeredinvestment advisor located in a state of Minnesota.
All securities discussed are for informational purposesonly. Investing contains risk, including

(41:52):
risk of loss. Consult your investmentprofessional before making any decisions about your investment portfolio.