Mr. Money Talk

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Episode Transcript

(00:09):
Said Josh Arnold miss your Money talkwith jud Arnold here to answer your questions
on stocks, bonds, mutual funds. You should position your investment dollars including
your IRA in four oh one k, but you do have to give us
a call nine five two nine fivefive six oh eight. That's two nine

(00:31):
two five five six eight. Beforewe jumped in. We have to note
our disclaimer. As per usual,everything on the show is for discussion purposes
only. Nothing should be construed asinvestment advice. Some are All of the
securities we discussed in the show mayor may not be suitable for you.
Investing contains risk, including risk ofloss. Do not make an investment decision

(00:54):
without consulting and investment advisor. Juta very very interesting week with concerns concerns
about expanded war in the Middle East, concerns about the price of oil we'll
say skyrocketing due to concerns about awar or expanded war in the Middle East.

(01:23):
The Federal Reserve back, I'll sayback, while I've been continued in
the forefront all year with a higherthan expected producer price index and consumer price
index. That not to mention thereading of their minutes and then the start

(01:45):
of earning season with Pepsicola surprising alittle bit, Delta Airlines having mixed results
and cutting guidance, United United Healthcarecrushing it with their stock up a lot

(02:08):
and probably providing the bulk of theupday on Friday for the doll And then
we have up to me some surprising, surprisingly good results from the few banks
that reported to begin the season,with more banks to go next week.

(02:30):
And when I say surprise to me, the surprise is how the market reacted
to the bank's numbers with and saying, oh, well, they had better
than expected interest rate results, butnobody bothered to mention what was happening to

(02:51):
the value of their underlying bond portfolios. I'm not sure I would agree with
that characterization so big. There's fourbig banks that are too big to fail,
which is City Group, Bank ofAmerica, WELLS Fargo, and JP
Morgan respectively. They were, youknow, Wells Fargo's a three percent today,
JP Morgan up one point five percent, and City and Bank of America

(03:13):
were down very very small. Theregional bank index was down two percent today.
And what you are seeing in bankingand the regional bank index is approaching
its lows from the Silicon Valley bankcrisis in March. And so what you're
seeing is a flight to quality inbanks, no different than you see in
the Nasdaq, which is for activemanagers. They're not allowed to not own

(03:37):
one of them, so they allown the four that are too big to
fail, and everything else is justbeing absolutely torched. And we can add
the next three, which is USBank, Court, Truist, and PNC.
Those three together, if they allmerged, would be the fifth biggest
bank. As it is, thoseare banks five, six, and seven

(03:59):
in the country. But that's justto give you an idea of the scale
of the difference. Those are allabout five hundred million dollar banks. The
smallest of the big four is aboutone point six trillion. But you know,
the next three did fine too,but every other bank just getting taken
to the woodshed along with I wouldpoint out the emerging story it's not really

(04:21):
emerging. Is there is just nobid for anything that isn't big caps.
So the Russell two thousand, whichis the two thousand of the top three
thousand stocks, it's the smallest twothousand, is back below its pre COVID
level. And I would point outon a five year basis, if you

(04:41):
go back the total return, ifyou held the Russell two thousand for the
last five years, your total returnis under two percent a year. Going
back for how long five years?Wow? You know, so essentially you're
taking far more risk. I meanthe Russell two thousand, we are taking
a line of risk with mid capsand small caps, and you made a

(05:03):
poaltry two percent a year. Soit is, you know, outside the
Magnificent seven, things are just reallygetting taken out to the woodshed. And
I think, what's going on.We're still in a seasonally week period of
the period of the year. Youjust have too much. I think the

(05:23):
events in the Middle East that putus to a level of uncertainty that is
just simply unbearable, and there's justnothing. We're gonna need some resolution.
I think the fear with the MiddleEast, and I'm leaving politics aside here,
I'm just saying the market fear isthat this spreads, not that it

(05:46):
isn't horrific. What is going onin Israel, in the Middle and in
the West Bank and the Gaza Strip, certainly in an emerging humanitarian crisis in
the Gadsa Strip and obviously a brutal, horrific war crime and program in Israel
a week ago. The Middle Eastis a very tough place, but the

(06:11):
market fear is that it spreads ifit is contained. From a market perspective,
I think the markets will see pastthis. But you add that plus
Ukraine, plus the Republicans can't picka speaker, which you again we leave
that is unbelievable. Well, it'snot really Unbelievable's a six seed majority and
it's not even a party, nodifferent than the Democrats. It's hard to

(06:32):
form a caucus, and the mostlikely caucus for the Republicans is the center.
And what you historically saw was moderateDemocrats or modern Republicans being the filler
and controlling a lot. This ison the Democratic side. This is where
the blue dog Democrats historically had alot of power. And the push to
polarize everyone is really making this hard. Now from a market that's a political

(06:56):
commentary. From a market perspective,the immediate and upfront issue is, hey,
we only have a forty five daycontinuing resolution. We're gonna have a
government shutdown, and I mean,they can't pick a spe If they can't
pick a speaker, they're not gonnabe able to, you know, to
avert a government shutdown. And infact, McCarthy I quite obviously lost the

(07:16):
speakership because he made a deal toavert the last shutdown. So correct.
You add all this stuff up,and then you mentioned the really good healthcare
earnings for United Healthcare. It's aninteresting way to start. I would point
out that healthcare is specifically Medtech hasgotten it's clock cleaned, as they say

(07:42):
this week on the unbelievably positive resultsfrom Nova Nordis and there get skinny pill
or reduced fat pill. And thereason why that's terrible for Medtech is diabetes
is the fastest growing type two diabetes, which is if you're obese, you
get it, is the fastest growingcomponent of health care costs in this country.

(08:05):
And the highly effective skinny pill,if you will, means that far
less people are going to be obese, which means far less people are going
to have type two diabetes. Andyou can add in all the other health
care impacts for a health insuran likeUnited Healthcare, this is amazing, this
is great. It means medical lossratios get better. Hospitals which require people

(08:30):
to go and they make money onsurgeries are getting destroyed. So it has
been an earthquake in healthcare, whichis really messing up a lot of people.
And that's, you know, notan insignificance. Fifteen percent of the
economy about the same part of theS and P five hundred. So you
add in all this stuff in thecontext, you add in the fight with

(08:54):
inflation and what's interest rates, andI think people are just simply throwing up
their hands and saying, I don'tknow, I don't want any of this.
And that's why this market is listless. Small caps and midcaps have been,
you know, utterly obliterated. Imean you are. If you bought

(09:16):
the absolute low for the S andP five hundred last October, you have
not made no money in small capsand midcaps. That's a pretty terrible indictment.
Oh so you're What you're saying then, is if you bought the app

(09:39):
the low of the equal weighted SMPindex last October thirteenth, that this October
thirteenth you went nowhere. You wentnowhere. And if you bought the the
market weight S and P index thespy, how does the spy then,

(10:07):
and you bought that at at theabsolute low last October thirteen, you're up
about eight you're up thirteen percent forthe year, and you're up about eighteen
percent from the low. So it'sa dicey market. It's just there's no
two ways to shake it. It'sa very dicey market. So well,
I would throw throw in if youwant, you know, some at dicey

(10:30):
market. I look at some ofthe quote unquote defensive names, Well,
what we're gonna so, et cetera, and they're all on that discussion.
That's another piece, and we comeback. This is Josh Arnold, Mister
Money Talk with Judd Arnold here toanswer your questions on stocks, bonds,

(10:50):
mutual funds. You should position yourinvestment dollars including your IRA and four oh
one K, don't hesitate to giveus a call nine five two at nine
two five five six oh eight.That's nine five two nine two five five
six oh eight. We're here tohelp you. This is Josh Arnold,

(11:15):
miss her Money Talk with Judd Arnoldhere to answer your questions on stocks,
bonds, mutual funds. Now,you should position your investment dollars, including
your IRA in four oh one K. Don't hesitate to give us a call.
At nine five two nine two fivefive six oh eight. That's nine

(11:35):
five two nine two five five sixoh eight. You always get straight talk,
not sugarcoated advice. Well, here'ssomething interesting, Jed that I just
saw come across the tape. Werecord this on Friday after the market closes.
But Pfizer, when we're talking abouthealthcare and healthcare related stocks pharmaceuticals,

(12:00):
eyes are just warned sighted delayed packsworld voide commercialization and also lower COVID demand.
So that happened after the market closed, and that also brought down the
stock of Moderna and maybe that thatwould also have an adverse effect on Merk

(12:24):
and possibly Johnson and Johnson as wellcoming up next week. Yeah, you
would you had brought up, youknow, and uh the Novo norsk uh
weight well diabetes drug that's also usedfor weight loss control. Uh. Eli,

(12:46):
Lilly has a drug that does worksin a similar fashion. Uh.
And I know that when you're talkingabout i'll say weight loss and weight loss
drugs. Walmart mentioned the adverse impactto their food sales due to those drugs.

(13:13):
The bookman of the weight lass lostdrug is gone haywire. This week,
we even had pet stocks down onthe theory that people will be better
looking, hence less lonely, hencewe'll have fewer pets because more we'll get
married. It's out of contunt Well, how come then that the match dot

(13:35):
com did not go up? Youknow? These are these are the deep
questions. I think, fewer peopleon it and what have you. But
I will just say, I meanyou can start as locally and concentrat as
you can, which is de Vida, which is a kidney dialysis clinic,
big holding of Warren, buff andBerkshire. Hathaway down thirty percent this week,

(14:01):
wows so and you can expand youknow HCA, the biggest you know
hospital in the country this week downabout twelve percent. So this has been
an earthquake in a healthcare sector earthquake, and it's going to take a while

(14:22):
to sort out. So I thinksome of it's an overreaction. But we
we shall as they say, weshall see. Well, I have not
been a I have not been investorin pharmaceutical stocks or you know, medical

(14:43):
technology stocks. That's but I knowyou've been, you know, pretty big
on some of the we'll say healthcare, well for the value based care say
and I don't know any right now. Like the value based care stocks.
It's the same thing with the insurers, which is medical lass rates are going

(15:07):
to go down, which it meansis good for them. For the healthcare
stocks, it's really bad my pointfor people who aren't even invested in healthcare.
And that's really what I'm saying isthis is fifteen percent of the S
and P five hundred and people wokeup at the start of this week,
and you have moves in these stocks. This is typically a defensive sector,
and you have stocks moving ten tofifteen to twenty percent outside of an earning

(15:28):
sprint that typically move one percent ina week. And it is one more
of the wet blankets on this market, and just the wall of uncertainty that
people just don't know what to doand they are being besieged across their portfolios
and that is generally bad. Well, you know, that's that all those

(15:54):
things add to putting the market intoa we'll say extreme oversold the position.
Then the market is completely oversold.And you know, but for we start,
we had a nice rally last Friday, and you know, because of
the Mid East conflict, we that'sbeen completely upended. You had oil stocks

(16:21):
start to rally a bunch on Fridayof this week because of they're going to
start enforcing the Russian price cap,so oil was up four percent. This
is not conducive to risk. It'sjust really and this is this is what

(16:45):
a bottom feels like. And youdon't need to feel pressure to call a
bottom or do anything. If youhave stocks, I'm not really selling them.
I'm just sort of sitting there.I'm accepting the fact that I'm probably
going to keep losing money for awhile. And that's just the nature of
the game. Because you can't calledwhen it's this terrible, you can't call
bottoms. The market's completely over sold. Relative Strength index is under thirty,

(17:07):
well, it's about it's about thirtyfor the mid cap indecks, which is
incredibly low. Eighties overboad the Sand P five hundred. We are,
you know, generally over slightly belowover sold, although only about forty about
thirty five percent of stocks are inan uptrend. It is there's just too

(17:30):
much and one by one these thingsget resolved and we move forward, and
that's what happens. But for rightnow, you should wake up in the
morning and you should expect to losemoney. It just is what it is.
Well, at the end of thelast segment, I was talking about
the number of you know, defensivenames. Well there is another This is

(17:52):
another issue, which is all thedefensive names which typically trade on diving and
yield I have now gotten slaughtered overthe last two months as they've repriced higher
for longer. And that the tenyear treasury is somewhere between four and a
half and five percent, And soall these things that we bid bid up
to a two percent yield, wenow have to move to a four percent

(18:14):
yield, And so they're just gonnaall go down for a while. And
what happens when the safe part ofyour portfolio gets annihilated allow you sell more
of the risky stuff too. It'sjust a lot, you know, there's
just so many things coming at you. If you are running a large portfolio

(18:34):
right now, it's just really hard. And prices typically need to go lower
to account for all those risks oruncertainties need to be removed to allow people
to be comfortable holding their existing risk. Okay, well I think they slow,

(19:00):
but sure some of these uncertainties shouldbe The world always the world always
gets better and this is one.This is part of the reason we hold
a lot of cash. Two,you gotta be patient. That's it.
You gotta be patient. A fewpeople have called and asking and they say,
well, do we have the highsfor the year in July. I

(19:21):
gotta tell you, we got twoand a half months of the year,
and those are two and a half, you know, especially November December or
usually two of the best months ofthe year. We could we could take
out the high for the year.It wouldn't surprise me. We could also
go negative for the year. Withthe S and P five hundred, the
equal wave is negative for the year. We could go negative. And I
think what I'm getting at is therange of outcomes is incredibly wide, and

(19:48):
that's what's difficult, and that's whatthe market's reacting, and that's why it
feels like nobody wants to buy astock. So that's just where we are.
We got more earnings coming up.He's got starting having more bank earnings
next week coming up, and probablystart starting with some technology related We'll also

(20:11):
say related technology companies related being likeNetflix will report the next next week,
and I'm not so sure how howgood Netflix is going to be given.
You had a writers and an actorsstrike going going on for a good chunk

(20:32):
of the last quarter. You havean actors strike that's still going on.
But isn't that Isn't that awesome forNetflix? It means viewerships up because there's
no new content and they have abig library. See, these are the
hard things to figure out, anda lot of the time we just try
not to figure them out because they'retoo hard. I'll tell you right now,
Warren Buffett isn't doing much. He'sjust sitting there waiting, and that

(20:56):
isn't a bad thing to do.No is nothing is is bad like that.
We have more earnings to discuss,or more potential companies that are reporting
next week, and more to talkabout in the world of investing. When
we come back. This is JoshArnold, mister money Talk with jud Arnold,

(21:18):
always here to help you. Ninefive two nine two five five.
This is Josh Arnold, miss ormoney Talk with jud Arnold, here to
answer your questions on stocks, bonds, mutual funds. Now you should position
your investment dollars, including your IRAin four oh one K. Don't hesitate

(21:41):
to give us a call at ninefive two nine two five five six oh
eight. That's nine five two ninetwo five five six eight. You always
get straight talk, not your codedadvice. Well, Netflix might have a
big, a big library, andmaybe that does does provide it a boost

(22:07):
boost for them when they report theirearnings. But I'm really really not so
sure because people are also going tobe looking at Netflix for what else do
they have in their upcoming events thatwould be attractive for me to continue paying
you know, their their subscription cost. I don't. I think Netflix seems

(22:37):
to me like more of a winnerthan a loser. We've been Media is
just really hard, and you broughtthat up before. Now, speaking of
media, Disney just got an activist. Nelson Pills is back involved with Disney.

(23:02):
Looking for three board seats doesn't matter. And this is the scary thing.
First off, Nelson Pelse was there. He once I hear, came
back and announced the restructuring plan.He withdrew his nominees. Now he's saying
he's going to re engage because thestocks eighty four from one to ten.

(23:22):
Okay, the problem with Disney isan activist can't solve this problem. They
have a terminal value question with therest of media. They disaggregated the bundle,
the cable bundle. They all wentdirect to consumer, and none of
them are making money a direct toconsumer, and that's the problem. They

(23:47):
don't know how to monetize content.They all have to because it's everybody's direct
to consumer. Now you've got toadvertise, and you got to spend money
on customer acquisition, and that's theproblem. When you had the cable bundle,
you didn't have to do any ofthe cromer acquisition, so you can
make money on the carriage fees.And so when you have direct to consumer,
and this is the hard concept forpeople to get, if you keep

(24:08):
your subscribers exactly the same, youhave a three times worse business direct to
consumer because you still have to marketto those people, and you need to
handle your customers and have all theback office stuff. When you were just
a cable company, you need todo any of that. Oh, Comcast
is running great. I don't haveto end up billing, I don't have

(24:29):
to handle any of that stuff.I don't have to recruit customers. And
so that's the problem, and theconsumer experience is terrible because we disaggregated the
cable bundle, and now you addup all the darn apps that you got,
and you're paying the same or more. It's completely inconvenient to dance between
these apps. It's gonna take avery long time to solve this problem.

(24:55):
And I don't know if Disney ityou're still paying I think seventeen eighteen times
earnings for Disney. Oh and I'lltell you expensive stock. And you look
at the local broadcasters, or youlook at Viacom where it trades, and
those are you know, seven eighttimes earnings multiples. So what you're really

(25:17):
doing is if you mark the Disneycontent assets to where paramount is or where
the local broadcasters are, what you'rereally saying is I'm paying forty times earnings
for the theme parks. Well,theme parks are probably not worth forty times
earnings. It's just really hard tosee a pat You got a lot of
debt on this thing. This isgoing to take a long time to sort

(25:41):
itself out. And they're selling assets, so they're locking in the losses.
I just I see no point intouching media. It is too hard.
The industry blew itself up. Idon't know what's investible, and I would
stay away. Well, I certainly. Uh. I'll say my media exposure

(26:11):
right now is is through Apple andAmazon just through because they have media exposure,
you know, for what they forwhat they offer, uh in a
in a streaming streaming vein with AmazonPrime and Apple and Apple Plus. Well

(26:36):
but that's but that's it. ButI'm not investing in Apple or Amazon with
That's the other problem. Do youthink Amazon or Apple have any pressure to
make money? And they're they're they'restill building. This is a disaster.
You don't need to touch this stuff. It's just awful. Well we will,

(27:03):
we will stay stay away from stayaway from that. Well with all
that going on is the I knowyou you like energy, So energy is
was up this week. Energy wasup. Everybody's got to own a little
energy. I've been talking about theoff shoorge drillers for two years and it

(27:26):
was nice to see those guys breakingout this week. Obviously Midi's conflict.
And the nice thing about owning alittle bit of energy is it it doesn't
correlate with the rest of your portfolio. We also saw a huge deal announced
this week with Exon buying Pioneer.Biggest deal I think going back since Mobile.

(27:47):
All the way back in the latenineties. Huge deal. That's a
six sixty billion dollar deal. You'regonna see a lot more energy M and
A. The reason you're going tosee a lot more energy M and A
is Exon and Chevron trade a seveneight times earnings and the rest of the
EMP companies traded three to four times. And what the market's saying is,

(28:08):
I hate energy. It's burned mefor a decade. I'm only going to
invest in the top two and oranyone who can show me scale and so
that the industrial logic and the mathof guys saying, if we all just
keep merging, maybe we can capturethis multiple. I think that's a big
deal. Well, if you werelooking at, you know, potential candidates,

(28:34):
is there any any of these Eand P companies that you would like?
I like, I hate the Eand P. The only one I
kind of own is Northern Oil andGas ticker NG. At the same time,
I'll just tell you offshore drilling isway better. My daughter's portfolio,
she's five years old. Her biggestposition by a country mile is Tidewater Tickers

(28:55):
TDW stock seventy bucks. I thinkit's three times forward earn it people debate
what the forward rings are going tobe. I think it's three times.
The thing can trade north of tentimes twenty five dollars to share a free
cash flow seventy eight dollars stock.You know, I don't know what to
tell people. I think we gotfive six more years at least in the

(29:15):
offshore cycle. We may never buildanother offshore drilling rig. You may just
use the existing fleet that we have. Offshore drilling is massively increasing as shield
tops out. I think that whatare some of the risks? What are
some of the risks then to drillingoffshore, Well, the risk is offshore
versus energy specifically offshore. Yeah,I'll say offshore drilling versus drilling or having

(29:47):
been in an E and P company, just do all right, these are
radically different businesses. And let's justfor the sake of simplicity, let's just
say this. If you buy anyenergy stock onshore, offshore, wherever the
heck it is, the market goesdown, you're gonna lose a lot of
money. Most of the time inthe recession, go down, you're gonna
lose a lot of money. Energystocks should be treated incredibly voluatarily for most

(30:08):
people earning more than five percent ofyour portfolio and energy and energy is wrong.
It is not for the faint ofheart. These stocks are twenty times
more volerable than every other stock,so be careful. But as part of
a broader portfolio, I would pointout that most people can benefit from having
some energy exposure, and I thinkthe officer drillers are the place to be.

(30:33):
Okay, that's it. But onething you should never do, if
you did not notice it, Theone thing you do not want to do
with energy or any other risky sectoris find the quote unquote safe stock in
a risky sector. That is therecie. A safe stock would be a
pipeline company that we've learned that lessonthe hard way. There is no such

(30:57):
thing as a say stock in arisk risky sector. You want to buy
medium to high risk stocks and riskysectors that are going to pay you for
the risk that you're taking, becauseyou're going to lose money on all of
them. Safe included on the waydown. Okay, because you know a
lot of the pipeline companies, peoplemight get attracted to touch the h one

(31:23):
pole. There is no such thingas a safe energy stock. If you
want safety, don't get it fromenergy. Will sind When we come back,
we'll look at a few other areasof investment and we have a big
week next week with earnings. Staytuned. This is Josh Arnold, mister

(31:47):
money Talk with Jutt Arnold always hereto help you. Two nine two five
five six oh eight. This isJosh Arnold. Missed your money Talk with
Judd Arnold here to answer your questionson stocks, bonds, mutual funds,

(32:10):
how you should position your investment dollarsincluding your IRA in four oh one,
K, don't hesitate to give usa call. Nine five two nine two
five five six oh eight. That'snine five two nine two five five six
oh eight. So if you missthe start. If you missed the start
of the show, friendly reminder thateverything on the show is for discussion purposes

(32:32):
only. Nothing shall be construed asinvestment advice. Some are All of the
securities we discussed in the show mayor may not be suitable for somewhere.
All investors speak to an investment representativebefore making any investment decision. Investing in
the stock Marke contains risk, includingrisk of loss. There you go.
Well, when you start talking aboutabout risk jud interest rates at the end

(33:00):
end of the week came down alittle little bit. But when any worry
about the FED and what the FEDis going to do with short term interest
rates, you know, as thoserates have moved up. And I brought
this up earlier on bank earnings thatnobody bothered to or I didn't hear too
much mention of the bank's bond portfolios, which on a mark to market basis

(33:27):
have got to be underwater. Andthat's one, well, you know I'm
not You're not a bonding You framedit this way at the start of the
show, and I'm going to politelypush back. Which is, while the
top four banks were off the fourtwo big to fail banks, the banking

(33:47):
index, the KRI which is theregional banks, got absolutely torched. This
is Friday of this week. Orcour got torched down two percent, and
they are the bank. The regionalbank index is at the what the Sulkon
Valley bank one loads. So whatyou're seeing in banks is a flight to
quality, to the bigot, tothe two big defoul banks, and then

(34:09):
the acknowledgement that the banking sector isreally in a bad spot. And we
would expect the k R e togo a heck of a lot lower.
And we've been talking about it allyear. Well that you know the bond
You know, I keep seeing andreading and I know we've covered this before,
but I just continue to want tohammer hammer this home. You know

(34:30):
that your yields are going to fall, Yields are gonna or the feed is
done. Yields are gonna uh,yields are going to come down. Lock
in these high yields. Now,buy bonds, buy bond funds. And
I just shake my head and wonderit's I know, that's just a straight

(34:50):
up buying a bond or a bondfund. Yes, you're going to get
the income I'll say you're making,you're making an interest rate back, and
we just our eyes roll. Let'sjust give you some stats. It's been
a horrific year for the markets.Guess what the S and P five hundreds
of twelve and a half percent thisyear, the TLT the twenty year at

(35:12):
the United States Treasury, the quoteunquote thing you're supposed to be buying is
down twelve percent, twenty four pointdifference in performance. That includes the coupons,
Okay, twenty year bonds. Ifyou try to call the low.
You have lost money three years ina row. If you owned investment grade

(35:35):
bonds for the last five years,the LQD index on a five year well,
first off this year, you're downfour percent. Let's start there.
Great bonds this year and we areat thelows for the year. So everybody
who bought them is down all right. Secondarily on a five year total return

(35:55):
basis, they've returned one percent annualized. It is really hard to call bonds.
It's really hard. You're never compensatedfor the rate. Equity is always
outperformed. If you have a multiyear horizon, equities always outperformed. And
when you look at the market andyou say, wow, the market's been
decimated. I want safety. Iwant to buy bonds, buy and large

(36:19):
the people over time. As longas you have a multi year horizon,
you typically are leaving a heck ofa lot of money on the table when
you buy bonds instead of stocks.And that is the empirical evan there's tons
of empirical data on that. Now, the flip side is you do take
more volatility with stocks. Typically thepeak the trough drought on in stocks is
typically bigger than bonds. That beingsaid, bonds are coming off historically low

(36:44):
interest rates. Right now they arevery high risk. So before worn,
well it's been well, thank you, was it forewarned and forearmed with that?
Well, now I've got it.Just another before we move on.

(37:07):
Look, we got to the pointyou're really hammering is people sold the sixty
forty portfolio for the last forty years, and any idiot could have could have
bought the thing and felt great aboutthemselves. As interest rates which peaked at
eighteen percent under Paul Volker in theearly eighties when I was born, and
bottomed at one percent or less thanone percent, Okay, guess what now

(37:29):
we're back to four and a halfto five. You don't have the tailwind.
And all these people who were countingon the bond portfolio offsetse stock fall
flatility have woken up and said,oh my goodness, oh my god,
it was a one in a millionshot. Doc. It wasn't supposed to
happen where I lost money on bondsand stocks in the same year. It's
only happened twice since the nineteen twenties. Yep in twenty twenty two, and

(37:51):
I believe a period of time innineteen twenty well it's gonna happen again this
year. For most of these people, bonds are already down and stocks maybe
me down. So just remember,folks, like just because something's happened thirty
years in a row, you haveto dissect the reason those things are happening
and take an educative view on whatwill happen prospectively. Well, I think

(38:17):
that's that's always made a lot ofsense to me, and that's one of
the reasons, you know, Iinvest and recommend investing the way I do,
primarily in individual stocks. And ifyou want safety, keep the money
in in in cash or a moneymarket interest instrument. So it's dollars in,
dollars out plus plus interest. Yes, the you'ld might be a little

(38:39):
bit lower, but you've got allthat all the safety there, yep,
yeah, you have liquidity. Aswe look to next week to wrap up
number one, front and center,we're gonna wake up Monday to warn them
at least and again, if youmissed the start of the show, please

(39:00):
go back and listen to the webcast. The War in the Middle East from
a market perspective, nochumanitarian, whichis actually horrific. The market what it
is looking for is Does this workspread to Lebanon, Syria and potentially Iran
and Jordan? I will throw thisout. Jordan looks incredibly unstable, as
it has looked unstable for the lastfifty years. Does that fall apart?

(39:22):
Two? Does the Middle East becomea powder keg? That's front and center,
number one, two and three.Number four, What happens in Ukraine?
Number four? What happens the Chineseinspect the press into Taiwan during this
period of global unster. Beyond that, we have a looming government shutdown.
I mean, we could just showthe risks. We got banks that are

(39:45):
blowing up. We have no cluewhich way interest rates are going. All
this stuff's really bad. The marketfeels really hard. Do be careful.
You don't need to do anything.Just sit there. Know the better times
are coming. If you own goodstocks, it'll all be okay. If
you don't know how good stocks isalways is not going to be okay.
Take a deep breath. We're allgoing to get through this. Happy to

(40:08):
help give us a call. Thankyou, stay tuned. Any questions.
We're here two nine, two,five, five, six eight. Do
have to thank the twins for agood season and a lot of fun and

(40:29):
we're looking forward to spring training intwenty twenty four. Josh Arnold Investment Consultant
is a registered investment advisor located inthe state of Minnesota. All securities discussed
are for informational purposes only. Investmentcontains risk, including risk of loss.
Consult your investment professional before making anydecisions about your investment portfolio.