Mr. Money Talk

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Episode Transcript

(00:10):
This is Josh Arnold, mister moneyTalk with Judd Arnold here to answer your
questions on stocks, bonds, mutualfunds, how you should position your investment
dollars, including your IRA in fouroh one k give us a call nine
five two nine two five five sixo eight. That's nine five two nine
two five five six o eight,particularly given the kind of volatility that has

(00:35):
been happening recently and could well continuefor the balance of the year with concerns
about the FED and earnings. Notto mention a little bit of politics thrown
in, give us a call ninefive two nine two five five six o

(00:59):
eight. Always remember what jud Whatdo you mean? What what we've got
to give our our What do wehave to remember? Not all all right,
Oh we gotta do this thing.Okay, Yes, we've got it,
We've got it. None of thisis investment advice. Please consult the
financial advisor before making any investment decisions. Some or all investments that we discussed

(01:19):
on this show may or may notbe suitable for you. Investing contains risk
and including risk of loss. Youknow you can tell that I've worked at
a lot of big firms. Ican definitely tell you've been trained. I
sat through more compliance meetings than Icare to, but you know what,
it's all for you. The mostimportant meetings aren't are figuring out how to
make money. But none of thisis investment advice. Of course, who

(01:42):
the heck watches TV? Listens toradio World School. We're gonna put this
out on Ham radio too. WhoaHam Radio Telegraph as well? And I
still call AT and C American Telephoneand Telegraph, didn't I didn't know that.
I'm not so sure that I'd bewanting to invest in American Telephone and
Telegraph. I know a lot ofpeople do, because it still pays a

(02:06):
pretty good dividend, not as muchas it used to, but there is
like zero growth at eight T andT. The satur thing isn't actually a
T and T Tickers Tea because that'sbeen a truvel company for about twenty years.
Are you going to say the saturdthing is Verizon? Yeah, I'm
gonna say the satur Verizal, whichhad the best market. It's hard to

(02:28):
screw up this bad when you're winning, and they found a way. They
found defeat in the jaws of victory. But that's the story. Of American
business. When you get two,three, four, or five generations away
from the founder of a company andyou get the professional managers in there.
I'll never forget the guy who ruinedApple, Steve Jobs, committed the cardinal

(02:52):
sin in the late eighties and broughtin an idiot. Oh he brought in
a professional manager, Scully. OhGod, the guy was so smart.
Blew up at I mean, look, good, God, well whatever,
you know, talent, talents arare thing. Business is hard. The
half life of American business is tenyears. Never forget that. Wow,

(03:13):
I would I would say, youknow, well, you know, Jim
John Scully might have created a messat Apple, first kicking Steve Jobs out
and then then bringing him back.We need you back. Well, that
was the smart thing he did.He brought brought Steve Jobs back. Steve
Jobs, we'll say, turned aroundthe company that he started. Now,

(03:37):
to be fair to Scully and theboard of Apple, I will point out,
I don't think Steve Jobs without doinghis ten years in the desert or
thirty years in the desert. Sowell, I'm not I'm not afraid.
A lot of I thought that youwere a biblical scholar too. Well,
I was thinking he was away forten years. I'm sorry, I'm not
talking about Moses. Moses and theJews wandering around for forty years in the

(03:59):
desk. Well, you know theold jew joke about that Jew was wandering
the desert forty years. It takesthat long to find a place in the
Middle East without oil. Oh,I thought it was forty years looking for
a good delicatessen. No, no, I mean there's a good ax White
joke in there too, But we'rejust going to leave that right there.
You should go see Oppenheimer. Thatis a story about the victory of the

(04:21):
Jewish people. Brilliant, brilliant,unbelievable. Now did you see did you
see that movie in imax? Ithought in seventy millimeter, Wow, I'm
act devenue. You know, itjust looks good. Whatever, it's a
great movie. It's one of thebetter movies. I think. I see
Chris nol Wan at the top ofhis game. But we digrets. We

(04:41):
have to talk about the real showthis week is Jackson Hole the entire world.
I was asked on another podcast thatI do why Jackson Hole? Why
not you got the world central bankers? These people control more money than anybody
can fathom. Okay, you gotto go somewhere in the in August that

(05:06):
isn't sold out, that you canhave a bunch of academics, right,
And part of the reason I broughtup in my wayward way wandering in the
desert. Now, Oppenheimer, oh, Oppenheimer. Okay, they needed a
secluded place where these people could workand interact, that the rich people weren't

(05:27):
vacationing and partying. So so theygo to New Mexico. It's a beautiful
place. It is a beautiful place. Jason Hall Jackson Hole is really hard
and it's beautiful, but it's reallyhard to get to. You gotta fly
in I think the Salt Lake firstand then you connect. It's a pretty
long journey, but beautiful place too. It's well, I'll take my kid

(05:48):
there one day. That's it sounds. It sounds like trying to go to
Penn State University in Happy Valley.Pennsylvania a little bit freer than Penn State
in Happy Valley. You know,Pennsylvania is the state. It's really two
states divided by a wilderness in themiddle, and in that wilderness is Penn
State. But we digress. Let'sgo back to Jackson Hole. It is

(06:12):
a tale of two cities. Muchdifferent year this year than last year.
Okay, and in what sense whichLast year Powell came out and the rest
of the Fed before the Governor's leakinginto the press, he came out on
a mission to destroy the market.And over the next two months post Jackson
Hole last year, the market wasstill out twenty percent. Do you think

(06:33):
that he had a mission to destroythe stock market and also the bond market,
or maybe it was a mission towake people up last year to in
the bond market more so than thestock market. You're splitting hairs. Okay,
I guess I did put here.Well, the FED has got no

(06:55):
control whatsoever the stock market. Correct, But if I shop off both your
arms, should I be surprised?If you you know, I'd have trouble
eating. Yeah, all markets areultimately correlated. So this year much different.
There. They sound like they're firstof all, i'd say the number

(07:15):
one thing, they are done.And if they're not done, there's maybe
a twenty five basis point rate hipslast. But they are for all attention
purposes. They are done raising interestrates. I think Harker, who's one
of the figure hawks on the Fedwho spoke Thursday, pile it spoke Friday

(07:35):
really made a point of saying,community bank managers are telling the Fed,
hey, let this let the marketdigest all these rate hikes. This hurts.
And we've already had the Look andValley Bank go under. We already
had signature banking New York and afew smaller ones. But man, the

(07:58):
banking industry is not loving these ratings. And particularly in treasuries we've talked about
long treasury bonds have gotten obliterated thisyear, but also mortgage backed securities have
gotten absolutely incinerated. And those aremost of their holdings. So well,
they're not only most most of thewill say the small banks holdings, but

(08:18):
the Federal Reserve is sitting on anawful lot of mortgage. But they can
print money. You're really when youmake this point about the losses at central
banks, you're really more concerned withlike the Swiss National Bank, okay,
which you know they can't print dollars. So when the Swiss National Bank,
which owns a bunch of thirty yeartreasuries and market back secuies, when they

(08:39):
take mark to mark, they're holdingthe maturity which they can do right,
and they're going to but yeah,that mark to market loss is pretty darn
big. So if if in factall these banks are telling the Fed that
there's a problem with continuing raising interestries, I know that the Fed brought that
up that in at least in histask. I want to get how talked

(09:03):
about the tighter banking standards, youknow, are are slowing the economy.
Yeah, I want to get someof this discussion to be forward looking as
opposed to backward looking. So ofcourse the message is we're done raising rates
and we're gonna hold them here fora while. And you saw one year,
two year, three year, fiveyear, seven year, ten year

(09:26):
treasury well more one to seven yeartreaser. I didn't see the longer term
after really that's what they call thebelly of the belly of the curve was
higher. Yeah, I didn't.I didn't really see much much, not
get talked about seven years. Sohigher for longer is the message, but
they're not going to do more.I think you also tellingly saw the vics

(09:46):
collapse a little bit on Friday,and as the market is now pricing in
whether you like it or not,they told you as explicitly as they could
between Harker on Thursday, Powell onFriday, and then you also had Meester
from Cleveland, Cleveland and the otherFED governors speak after Powell on Friday.

(10:09):
They told you as clear as daythey are not raising rates pretty much for
well, if you've you've got theLouis Meester from Cleveland, big hawk in
terms of interest rates. Yeah,so you have the two of the biggest
hawks saying we're done. We're done, but we're gonna have to be done
for this segment right now. We'regonna have to come back after the break.

(10:31):
We'll talk more about the FED andhow that fit is going to impact
you when we come back. Thisis Josh Arnold, mister money Talk with
Judd Arnold, always here to helpyou do. Give us a call nine
five two nine two five five sixoh eight. This is Josh Arnold,

(10:56):
mister money Talk with Judd Arnold hereto answer your questions on stocks, bonds,
mutual funds, how you should positionyour investment dollars including your IRA in
four oh one K, don't hesitateto give us a call nine five two
at nine two five five six oheight. That's nine five two nine two,
five, five, six oh eight. You always get straight talk,
not sugarcoated advice. Following on orcontinuing talking about the FED and the Jackson

(11:24):
Hole meeting, it was a veryinteresting judge that you brought up that the
volatility index the VIX, came downand came down significantly on both Pal's talk
and then Luis Meister's talk. AfterPal relating to lead guys, as clear

(11:48):
a FED guidance as we have gottenin two and a half years, they
couldn't have said it any planner.They are done raising rings now we can
go back and than the talking headsworld now they're going to keep rates higher
for too long. Before they weregoing to raise rates too long, but

(12:09):
you got, hey, we're basicallydone and we're gonna leave rates here.
We want duration to be you knowthat we think number one, they all
said rate we're restricted right now.Well they haven't said anything different or in
terms of being being restricted, norhave any of the FED governors that have

(12:33):
come out to speak, uh said, said anything different than higher for longer,
and that that has been a mantranow for from I think from an
equity market standpoint, there's another thingthat really dawned on me sort of writing
this up for clients today was theyieldcurred for the first time in several years.

(12:58):
Is out of place where it andbe bullish. And this is what
I mean. We now have seenthe back end of the curve, which
is ten through thirties, right,those, the yields on those have been
rising, rising a bunch. Andthat means that prices on longer term bonds
have come down. Yes, ratesoff bond prices down. Okay. The

(13:20):
front end of the curve, whichis one to two years, at zero
to two years has been elevated atabout five and a half percent for a
while. Okay, now those rateshave been coming down. That the shorter
end of the curve, those aboutthose same at five and a half.
What you saw post the comments thisweek was the belly, the soake about

(13:41):
belly of the curve. The oneto seven year rates really moved higher.
And so you've got this. Youdon't have a curve. You've got three
lines. You've got a line fromzero to one year at five and a
half percent, You've got a linefrom one to seven years at out let's
call it blended four, seven,five, and then you got the back

(14:03):
end of the curve ten years onout is about four point four it's not
even a curve, it's just threeline. We got three levels. But
my point on rallying from here,what's gonna happen if you play the tape
forward several years is eventually they're gonnalower front end rates. And if the
economy that's one of the things theFIT has control of, is the front

(14:26):
end rates. Correct, They're gonnalower front end rates if the economy stays
strong, which we have no signsof weakness today. And that's the other
thing. All the BED governors said, it's just unbelievable, this economy just
keeps flying along. Well, that'sthat definitely, at least Palace comments that
has that has so high frustrated them. Right, a strong economy is highly

(14:48):
correlated to higher long term rate.So ten to thirty years okay, So
what's gonna happen is the next move. We've just had what's called the bear
deepener, which is the back endof the curve the tens of the thirties
have risen to be more flat tothe front end. That's called the bear
steepener. We're going to have abull steepeners. The next move. Now,

(15:11):
I'm not saying this is overnight,and this is sort of I think
why the market sort of released middayFriday, which is Okay. The next
move in rates, whether it's sixmonths or now, a year from now,
two years from now, is mostlikely a lowering of the front end,
which puts the curve upward sloping,which allows financial firms to make money

(15:31):
again by borrowing short and lending long, which is the natural state of things
in the way the curve's supposed tobe outside of a recession. So you
know, equity markets are forward lookingsix to nine months, right, So
I this is a long winded wayof saying, we showed up here with
not inflation defeated, but inflation comingin enough that the Fed has met it

(15:56):
and said, you know, Ithink we're about where we need to be.
Okay, right, so look nowthis can still you know, we
can still have a bet inflation print. We've bet two in a row.
But I think the big thing ismarkets like certainty, and you kind of
got a lot of certainty. Sothere you go. That's macro. So

(16:21):
it means everything I just said's probablywrong. Okay, Well, let me
just throw throw this this in Youknow, if the FED does seems not
to take into account some of thedeflationary forces that are happening in China,
Okay, how might that impact anyof the fence fence thinking and or interest

(16:44):
rates? So I think on thispoint, i'll make the big point that
I'll make the little one that you'regetting at. Okay, So you have
all these talking heads talking about,well, the Fed. You know,
a few Opolos comments are wrong aboutsource of inflation. He was talking about
auto loans this morning, and afew of the commentators after a few that
I really like, like Coldman Saxon, chief economist, will think and the
point it's like follows kind of gotthat one wrong. The source of end

(17:07):
is some other whatever, It doesn'treally matter. But I would say back
something much stronger that I think ismore important. The FED screwed up.
It screwed up bad in twenty twentyone. They thought it was transitory and
they didn't raise rates quick enough andinflation got out of control. Okay,
Okay, if they are holding rateshere today, they are not going to

(17:33):
screw up today. So we're like, all these prognosticators, all the talking
again, well do we think they'regoing to lower quick enough. When do
we need to lower? Well,you don't need to lower today where they
are today is kind of right.So the mistake of staying too high too
long, so long as the economyremains robust and again it like it's not

(17:57):
falling apart for the next three months. And if you can see on three
months while then you're already a multitrillionaire, you're not listening to this show.
So I think the penalty this isthe recency bias of probability of mistake
times impact of mistake. Right,probability and mistake is likely constant. Okay,

(18:22):
all right? Meaning today, youknow, like the FEDS problem,
what is a good Fed governor battingaverage supposed to be? I don't know.
It's like it's economics. They're gonnabe wrong more than they're right.
They're probably gonna at four hundred.That's pretty good. You're betting you're batting
four hundred. That's that's tremendous.That's pretty good for an economist, Okay,
for anybody. I mean that putthat puts you in the Hall of
fame. When was the last timea baseball player batted four hundred? I

(18:48):
don't know. With there without steroids. All right, let's let's go.
But let's talk about impact of mistake. We're in it. We just went
through. When inflation is running away, impact of mistake eight is maximized for
the central banker. Right, we'reback to normal. Okay, Are they
going to mess it up? Ofcourse they are, like that's that's a

(19:11):
given. But the impact of themistake it's just far less. And this
is the classic recency bias of market. Everybody fights the last war. If
you're a World War two historian,you look up the Magino Line, which
is the super fortified French trench againstthe German border. That was like a
response to World War One that theGermans simply went around. Okay, So

(19:33):
anyway, this is a bit ofa digression. I think we have certainty.
If they're wrong, it's not gonnamatter for a little while and longer
term, you know, I'm sayingsix months out, if they're wrong,
whatever, it's easy to correct.Fine, I think we're the Fed continues
to go into the background. Well, that that would be. Now watch

(19:57):
the market fall apart because it's Septemberseasonally, well in the seasonal seasonal bet
you know, you the next thenext earnings or major earnings calls. We'll
start the middle of September looking backwardsinto the summer months, and typically the

(20:17):
summer months are a lot slower economicallythan the next quarter of the quarter that
ends the year, which is typicallya lot stronger. Uh you know.
So the and for the for thenext few weeks earning, the number of
companies reporting earnings is is a lotsmaller, and there'll be more focused,

(20:41):
we'll say, on macro issues,so we'll probably have more fed speak than
anything else. Plus, you've gota short week next next week, coming
into Labor Day weekend, coming outof Labor Day weekend, it's a short
week. Following week is the startof Jewish Poletish New Year, the old

(21:03):
saying sell Russia, shun up byby yump poor. That'll that'll take us
into the end of September and thenwe start getting into a stronger This is
just a long winded way of saying, you need to make break plans.
That's all I'm airing. Make winterbreak and Thanksgiving plans. We'll be right
back. This is Josh Arnold,mister Money Talk with Judd Arnold. We're

(21:26):
always here to help you and wedo have an opinion. Call us nine
five two nine two five five sixoh eight. This is Josh Arnold,
mister money talk with Judd Arnold hereto answer your questions on stop bonds,
mutual funds, how you should positionyour investment dollars putting your IRA in four

(21:48):
oh one K. Don't hesitate togive us a call at nine five two
nine two five five six oh eight. That's nine five two nine two five
five six zero eight. You'll alwaysget straight talk, not sugarcoated advice.
Okay, my long winded message oftake time now to plan for your for
Thanksgiving and when winter break. Thatis one thing that has affected a lot

(22:11):
of we'll say consumer spending. Thatspending is not necessarily going on in stores.
It's been going on experiences and ontravel, both will say local and
or domestic and international, which hasbenefited companies like Expedia, Bookings dot Com

(22:36):
and several of the hotels and myfavorite favorite casinos in terms of their of
their earnings as opposed to the retailerswhich have reported very very mixed uh you
know this this week and last week, I mean we had Walmart beat uh

(23:03):
and Guided upwards Target did not beatand guided a lot lower. This cold
stores surprised everybody and they did well. But the dollar stores really we'll say,
took it in the in the shorts, which was very very interesting.

(23:25):
Though another value value value retailer,TJ Max did did very very well.
We had some surprises from Abercrombie,Fitch and and guests in terms of of
retail alta you know, beat andthey they raised. But Nordstrom's they might

(23:53):
have beat in terms of their earnings, but they guided guided lower, so
that was not not too well.And an old favorite of mine, Dick's
Sporting Goods, where they shrink iscrushing all these guys plots you add on

(24:14):
the channel and online and whatnot.Shrink is just people stealing, being your
own employees or your non employees onceit gets to the store. It is
a real problem, especially on i'llsay the most part the largest economic state,
which California, it's pretty bad.Well, there were an awful lot
of stores that have closed down incertain cities, whether it's La or San

(24:38):
Francisco. Scores from Yeah, it'seeds, Walgreens and north Stroms have closed
down in the city. It's juststunning. You know, none of this
could have been predicted. And bynone of this, I mean, of
course this could have been predicted.But here we are retails tough. A
lot of the only thing that thatmakes retail stocks look good to me as

(25:00):
media stocks, because media stocks lookso horrific now cord cutting is going on
at seven percent annualized. Wow,I didn't realize it was that hot.
I was joking with somebody that cableis the new newspapers. Well, that
does not bode well for Worldlet's sayComcast, It doesn't bode well at all.

(25:21):
For Comcasts. It doesn't, andComcast is one of the better ones.
But Paramount, which is a mergerof Eye Common CBS. Let me
ask you, what would if youwere a private equity guy, what would
you pay for Nickelodeon today? Almostnothing right right because it's all YouTube.
My kid doesn't know what new Nickelodeonis, right? Why would I be
stuck in a linear world? Sheneeds the ipatch, you know, we're

(25:45):
on the road. She likes cocoamelon. It's there's a lot of things
that have been completely disrupted. Igotten a little debate with somebody about stars
stars being I don't know if wewant to say HBO Showtime start Staring Stars,
I think is part of part ofline skate line. But my point
was just simply HBO is struggling forrelevance and it's sort of morphing in this

(26:11):
way into essentially a mini Netflix.The online experience with HBO. It's really
it's the same business model effectively,this right original content and then we buy
some other stuff and that's why you'regonna pay. I don't know. I
don't know, man, this isthis is why HBO makes money. I
don't even know what I pay amonth. I just know I haven't probably
not getting full value, but somethinglike Stars or Cinema. I don't know

(26:37):
if Cinemax is still around. Well, some of some of these things have
changed their names. I think Cinemaxmight still be around. I had somebody
changed changed their title to max Maxdot com on my on my Comcast.
I've got but I'm just gonna positfor you as we keeper on the way
down. You think about there's alwaysa series of fools, and I will

(27:03):
not use that term, not likeI'm using that term not purposefully right that
look at what the company used todo and think that that has any impact
on what it's going to do.So take the Starts Review. It caught
bought out by private equity on theway down for look at oh man,
you didn't there we go. Itcaught bought out on the way down I

(27:26):
think for four hundred and fifty milliondollars, and they bared a bunch of
money and they went bankrupt, andthen it got sold again and again and
again. I don't know what TheStars Reviewed is worth now. I doubt
it is not worth four hundred andfifty million dollars. I think that,
you know, one point, theywanted to be a not for profit company,
and I think I made the joketo you, well, it's gonna
be a not for profit company soonenough. These people just don't realize it

(27:49):
because you think about the economics ofa newspaper, which is really adds and
the classified page correct, and whatis the what would you pay? What
is the have you like? Whenis the last time anybody looked at classified?
I certainly have not looked at forvery long. So the newspapers today
that are still around and making money, New York Times a sort of a

(28:11):
media enterprise and whatnot. So that'swhere TV's going. We're cutting. We're
talking linear TV, linear TV,A cable companies. Okay, so and
stuff like Nickelodeon, you know,I throw out there, or like USA
Network. What's the value of USANetwork today? Have no idea. I

(28:33):
don't know why I need all thesechannels? What show is USA getting that?
Netflix? Amazon pro? Like?You think about all the people now
that have to pass well, Ithink USA Network, I think had a
lot of soccer and might have hadsome sports that I I don't particularly watch.
But but right it's a zero Nowwe don't like, we don't need

(28:56):
it, and that's what's going tokeep happenings. So this is a long
digression of we get it. Youknow, I always get a little ruffled
up. I get questions on media, you know, Warner Brothers, Stickers,
WBD, Like, people see thesestocks are down a lot and they
think they know a lot about them. Disney is at a new he's at

(29:17):
a new low. I think you'vebought. If you've bought in two thousand
and four, I think you lostmoney or you need the dividend. Well,
you got the dividend, but Imean that that's going way down and
the stock is treating it less thana half of where it was, but
it's still not even four. You'restill expensive. I think it's still sixteen
seventeen times earnings and earnings. Guesswhat they're gonna keep going down now?

(29:37):
Now Disney is trying to either spinoff or sell some of their divisions.
Let me just make my crowning point. I'm media, okay, because you're
gonna get to ESPN, which iswhich used to be the crown jewel with
Disney. I'm going to get theESPN. I would humbly say to you
a boomer Hey, boom, okay, boomer, right, you know what

(30:03):
Sports Illustrated is? Okay, youknow what Sports Illustrated is? Right?
It would be impossible for me toexplain to my child what Sports Illustrated is
and why people used to read itreligiously correct. It's ancient history. If

(30:26):
if that magazine still exists, itis ancient history. When you get it,
it's worthless. Well, I stillI still get it. It doesn't
come out as often in print,is it? What the value of that
is? What five percent of whatit was twenty years ago? I'm sure
the time time In sold it toanother another company that sold it again.

(30:48):
Es no that's online. Guess whatthat's what's going to happen to ESPN.
Now. ESPN still has some content, still has some sports that are shown
up, and talk is that Amazonis going to cut a deal with Disney
on ESPN. Fine, but wecan talk about that and more when we

(31:11):
come back, because we want totalk about something that's near and dear to
you, mergers and acquisitions. Thisis Josh Arnold, nister money Talk.
Do give us a call nine tofive two nine two five five six oho
eight. This is Josh Arnold.Miss your money talk with Judd Arnold.

(31:36):
You're to answer your questions on stocks, bonds, mutual funds, how you
should position your investment dollars, includingyour IRA and four oh one t.
Don't hesitate to give us a callat nine five two nine two five five
six oh eight. That's nine fivetwo nine two five five six oh eight.
You'll always get straight talk, Nut, Sue Coded Advice and Judd.

(31:56):
The disclaimer not all none of thisis investment advice. All of this is
for discussion purposes only. Please consultan investment advisor before making any just investment
decisions. Some are all of theinvestments that we discussed on the show may
or may not be suitable for youinvesting in as risk including risk of loss.
There you go, There you go. We finished the last last segment

(32:22):
talking about the possibility of Amazon rumoredto be cutting a deal with ESPN,
either for some of their content,all their content, or maybe even so
let's just go back. We're talkingabout media. Okada is terrible, and
I'm just we get all these disneysat a new twenty year low. Okay,

(32:45):
I get all these questions from people, what about Warner Brothers? What
about Disney? What about Comcast?Let me just tell you right now,
it's only going to get worse.This stuff is newspapers in two thousand and
seven, right where you have alot of people looking at the history and
believing that that has something to dowith the future. Guess what, the

(33:06):
over the top and director consumer offeringsblew up the cable bundle. This industry
is a disaster. They're gonna keeplosing money and you're up against non economic
guys like Amazon and Netflix. Wellhave and also Google your name? How
about Meta? How about Apple?You know I saw Oppenheimer this week.

(33:28):
One of the previews was from AppleFilms. Wow, very interesting. Guess
what, you know it a lotof people can do this stuff because content
is the value and a lot ofthese guys, these media companies or cakekeepers,
no difference than the rate you know, the record companies back in the
fifties where they can control who's topfifty because they own the distribution in a

(33:51):
world where anything, any amount ofcontent, it can get anywhere. Look
at YouTube and mister Beast for example, and you don't know mister Beach.
I have no idea John who misterb is. But then I'm a boomer
and it's got like fifty million peoplea week watch the show Wow, Yes,
crazy and Cocoa Melon, which youknow, it's kids cartoons that come
from New One is it's on.I think it's like every episode gets like

(34:15):
one hundred million views. It's crazy. So so what what you're telling me
is I should be buying Google withYouTube? Then YouTube is one of those
YouTube is very valuable. I'm nottelling you to buy Google, though,
But we digress. Let's we gotto do a quick up. We got
to do a quick recap for peoplewho are late on the FED. We

(34:37):
talked a lot about at the startof the show, if you really want
a deep analysis, you can giveus a call, but I'll give you
the cliff notes. They're done.That's that's that's a that's a pretty good
cliff Not they're done. They're goingto keep rate. Just two words,
they're done. Charlie Munger, WarrenBuffett's longtime partner, notes that the highest

(34:59):
form of intelligence, it's a simplethe ability to simplify things. There you
go, they're done. You've gota lot of intelligence is done. You
heard it here from from Judge.The fet is done. Now. The
stock market has rallied a lot thisyear into that, so some of that's

(35:19):
priced in, but the feed isdone. Well, that's I think.
I think it's just a matter ofcompanies now adjusting for higher for longer.
We still have a very strong economy, and the Fed, I think all
of them are stunned that we didn'thave to lay off that many people to
get to where we are. Butit's not that the information has been defeated,

(35:39):
but they think we're sufficiently restrictive.They're going to leave rates here for
a long time period of time.So for stocks, it's great. We
have certainty or more certain issues thanyou never have perfect certainty. And we're
back to where we were at thestart of the year when we you and
I were saying Macro's hard, butgood stocks can work, and a lot
of good stuffs have work, whichbut the companies that really have not worked

(36:06):
maybe could work in another form.And I know you've been talking about mergers
and acquisitions happening. So the mergersand acquisitions story is super simple. SMP
five hundred, which is a marketcap weighted index, is up fifteen percent
year today. Now at peak itwas up nineteen point six percent. We
have had a little bit of apullback and this is the seasonal time of
the year when that usually happens.Then that goes through September, so just

(36:28):
be aware of that. The equalweighted SMP five hundred, so all five
hundred stocks are weighted equally in theindex, which is not the way the
index is mark cap weighted. Theequal weights only up four point two percent.
There's a significant difference. So ifwe're gonna have the M and A
thesis is really simple. The IPOmarket has come back. Instacrch just filed
after the clothes on Friday. We'regonna have a lot IPOs, big IPOs.

(36:52):
This fall. The high bond marketis financing stuff. It was closed
for a lot of twenty twenty two. The M and A market really has
been closed for about two years.We're going to see a big acceleration because
if the market's not going to bidup these other non big Tex stocks,
then M and A is just goingto accelerate because growth is somewhat slower.
So we're gonna have a lot ofM and A. Well, we've we've

(37:13):
seen that. We've seen that inone old industrial area Cleveland Cliffs made a
made a bid for us US Steel. You can see it in We'll see
in old some of the older technology. Rumor is that BlackBerry is or is

(37:37):
or could be taken over in thenext week week or so. A lot
of technology, a lot of patentsthere. But I think you're going to
see a lot of industrial consumer type. Well here's Sheen a retailer more on
online retailer talking about buying forever twentyone. So there's that. And then

(37:58):
host this brands which takers Swinky becausethey owned Twinkies. We liked we Love
Twinkies, which was a spack bythe way, as a pre COVID spack.
It's pretty good spack actually because tradingat twenty seven buck. I actually,
actually I like tasty Cake better thanTwinkies. But there you go,
Okay, Boomer, I'm just fromhere. I grew up. There was

(38:19):
no tasty cake here in Minnesota.But I think they're The larger point is
the stock market can handle rates thatinterest rates where they are. That we've
had normally low period of interest ratessince the global financial crisis, but before
we had an entire tech bubble.Happened around two thousand with interest rates at

(38:44):
six and a half percent. That'swhat it's going to say. In the
in the mid nineteen nineties, marketsdid extremely well with interest rates still even
higher higher than that. And Ido remember one of my investment heroes,
John Temple, in nineteen ninety saidthat the Dow was going to double by

(39:05):
two thousand. Well he was wrong. It tripled. It went up a
lot more than that. But mypoint is that when he made that prediction,
he was laughed at off the Nowgoing from five thousand to ten thousand
and ten years, it's impossible.Just look what's happened before. And we
were coming out of the stock marketcrash of nineteen eighty seven, at the

(39:29):
time, interest rates we're climbing,taxes we're going up, and John Templeton's
said the Dow was going to doublefrom five thousand to ten thousand, and
when you get laughed out of theroom. But nobody bothered to think that

(39:50):
that was only a needed return ofseven percent a year, which was below
the average return in the stock marketlonger term. What do he's always win?
And speaking of when it's gonna bea big holiday weekend week, I
should say big holiday week coming up. The markets are pretty quiet, We've

(40:10):
got back to school. September isusually a down month, but we got
a lot left in this year.We think a lot of the downside outcrons
have been removed and certainly nothing isnear term, but markets are volatile.
Be careful out there. We've hada great year, We've got a great
five year. Great Is this yourforty for you? This is probably a

(40:31):
little bit more than forty, butit's been Yeah, it's a little more
than forty. As a as anindependent, how old are you? I'm
forty one, Well, you're fortyone entering in you'll soon be forty two.
So I started as an independent brokerand advisor in nineteen eighty one,

(40:54):
shortly before you were born. Wellas I was also the last time I
ran a marra. There you go. That's the track record. Forty one
years still here and you guys didanother forty years to go, another forty
to go. You guys have agreat weekend. You two enjoy the State
Fair. This is Josh Arnold,mister Money Talk with Judd Arnold call us

(41:15):
nine five two nine two five fivesix o eight. Josh Arnold Investment Consultant
is a registered investment advisor located ina state of Minnesota. All securities discussed
are for informational purposes only. Investingcontains risks, including risk of loss.
Consult your investment professional before making anydecisions about your investment portfolio.