Mr. Money Talk

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Episode Transcript

(00:10):
Good afternoon. This is Josh Arnold, mister money Talk with Jut Arnold here
to answer your questions on stocks,bonds, mutual funds, how you should
position your investment dollars including your IRAand four oh one K. But you
do have to give us a callat nine five two nine five five six

(00:31):
oh eight. That's nine five twonine two five five six eight. You
always get straight talk, not sugarcoded advice, Paul, so we get
five two nine two five five sixoh eight before we hear that a disclaimer
up front. Nothing on the showcan be should be considered investment advice.

(00:51):
Everything that we discuss in the showis for discussion purposes only if youse expressing
the show are ours and ours aloneand do not reflect the network. Investment
contains risk, including risk of loss. Some or all of the carriers we
discussed on the show may not besuitable for every investor. Please consult investment
advisor before making any investment decision.That is wise counsel. Well, people

(01:19):
need a lot of wise counsel afterthis week, which is who we are
in what they call a no bidscenario no bid. As we recording this,
I can say that all all weeka lot of there's a lot of
good stocks out there, and nobodywants to buy them. They want to
sell them, they want to puttheir money, and they keep talking they

(01:41):
want to put money in government bonds, and I keep saying why, why,
Well, let's dissect this a littlea little bit. You know,
this was I think the second worstweek of the year. From an S
and P five hundred performance perspective,we have given back about fifty percent of
the game for the S and Pfive one hundred for the year. At
peak, we are almost up nineteenand a half percent. We are now

(02:05):
up ten. The equal weighted Sand P five hundred index, which peaked
at almost eight and a half percent, is now down three percent for the
year. That's the average stock inthe S and P five hundred. Most
industries are down. Banks in particularare now the bank Kri Regional Bank ETF
is now lower than it was atthe depths of the Silicon Valley bank crisis.

(02:30):
As that gets a lot worse.I think we also have war in
the often, which means nobody wantsto hold any quote unquote risk into the
weekend, So you should expect atrading dynamic until the situation resolves, you
should expect this dynamic to be thatby Wednesday, Thursday, Friday, people
sell a bunch of stuff and thenMonday morning they buy it back. But

(02:54):
it is a tough world out there. I think the bank stuff is most
troubling. And I will just goso far and to frame this for people,
I think we are at the phaseof the market sell off where the
market is going to sell off everythinguntil the Fed stops officially raising rates.

(03:16):
And we'll go back to the Augustmeeting where Powell, the Chairman of the
Federal Reserve, made a deliberate pointhigher for longer he prompted. Those comments
and subsequent comments from other Fed governorshave gotten the back end of the treasury
yield curve so sevens, tens,twenties, and thirties to rise by almost

(03:38):
one hundred and fifty basis points onepoint five percent from their lows. We
now have the ten year just underfive percent. At one point this year
was three point twenty five percent.That is a heckup a lot different than
when front end rates are five anda half percent and you can borrow long.
And I think what the Fed did, as they always do, they

(04:00):
have now pushed things to a pointthat they are going to break. And
that's how these things always go.And where are they going to break?
They're going to break In the banks. We've said all year we are not
bank people. You've said that forforty years. I have said that for
a long long time. I donot want to invest in banks, And
had just look at some of thebank earnings that have been coming out.

(04:23):
I don't care whether that's from youknow, an investment bank with like Goldman
Sachs and Morgan Stanley. I don'tcare whether it's from a big, a
big bank that's too big to faillike Bank of America, JP, Morgan
Wells Fargo, or City Bank.I definitely do not want to invest in
any of the small regional banks likeRegions Financial kid that came out today,

(04:46):
and see if you read their report, you not only don't want to invest
in that bank, you might wantto take your money out of out of
the bank entirely and go put itthe you know, something like PayPal or
or square square cash account. Theproblem is there's let's digest this for people,

(05:14):
and this is Matt that we've beenrunning through all year. We've got
about one point five to two trillionof excess deposits in the banking system that
have to normalize. They've already beenreducing two trillions, a big number because
book equity in the banking system isonly two point four trillion. As these
banks shed assets or stop growing theirbounties, which is what they're all doing,

(05:40):
they're realizing they can't sell their treasurybonds without accepting a lot of losses.
A lot of these guys bought treasuriesat the peak. So there's Bank
of America, for example, thathas marked to market losses if they sold
their treasury portfolio equal to about sixtypercent of their book equity, Meaning they
just have to hold on to thesethings and so mature ten years out.
So you have a rapidly slowing levelof monetary velocity, you have depressed earnings,

(06:08):
and then you look at the valuationand you just scratch your head.
Despite the Kira, the regional bankin that's selling off thirty three percent this
year, we are still trading atpoint eight times price to book and eight
times earnings. And why those numbersare significant, I'll give you a greef
DTA point. When Warren Bofe boughton a Bank of America in twenty eleven,

(06:30):
so well after the financial crisis.It was resolved, but Bank of
America, like many banks, stillhoppled. He paid point four times book
and they'd already written everything down.You felt good about that book. That
book equity number today the indexus trainingat point eight times book. And most
people, if you ask them,how could they feel about book? Meaning

(06:50):
do they feel that the banks haveadequately written down the assets on their balance
sheets and taking enough reserves against losses? They would say no. And when
you think about the earnings potential whichis likely to be limited, reduced in
paired. I'm not gonna use theR word like I used to because there's
negative connotations. Not not that itis good English. But anyway you look

(07:15):
at you say, why why wouldI want to buy something at point a
times book? So book is whatthey paid for the stuff they own.
It's not worth that because yields havegone up, so bond and loan prices
go down. You've got limited earningsgoing forward, you have no earnings growth.
A lot of banks are going toneed a lot of capital meeting.
They're going to dilute you, andyou're sitting at point a Times book which
might turn out to be one Timesbook and an eight percent seven percent r

(07:41):
o E and needing to issue alot of equity to fund losses. Boy,
that's not a good a good story. And now plus plus you have
the government and they're saying that theseguys will have to have more capital capital
work, Well, they're gonna they'regonna crush them on the on, making
them miss bonds instead of So eightypercent of funding for regional banks comes from

(08:03):
deposits, and the regulars you're saying, after silkon Valley Bank, we don't
want you so depositive from it.So we saw on Friday the bank ETF
down four percent. Or let's justlet's just say the obvious. Beyond the
volatility in the stock market, whichhas been incredibly elevated of late, when
the financial sector i e. Banksis trading up and down two to three

(08:26):
percent a day, that does notmake a market that people want to invest
into. And the way the bottomsare formed is prices either hit a level
that people say, I accept allthe bad stuff and I think this stuff's
cheap enough. And I just outlinedwhy we don't think banks have hit that
level or the FED intervenes, AndI think that's the most likely thing,

(08:48):
because we are not to fear monger, but to be I think appropriately scared
of what's going on. Boy,I just think capital is going to keep
flowing out of the banking system andthat's going to be the trigger to get
the FED to back off. Butwe'll see the the money that's going out

(09:09):
of the out of the banking system. Are they going to alternative banks?
And I'll say alternative banks like alike a square a PayPal, we'll call
it a sofis as examples. Well, I think that's for later. And
I mean, look, I've beenpretty big in Peguya pg Y. I

(09:30):
think it's great. You know,we got in at a dollar eate and
ran up to two sixty and it'scome all the way back down to one
twenty on three beaten raises in arow. And I think what that tells
you is it's really hard. Andthis is a this is an investing lesson
that we we harp with people.You'd rather be a bad house in a
good neighborhood than the best house ina bad neighborhood. If your sector is

(09:56):
not doing well, I just money. Money is leaving the financial system,
and I'm talking about equity capital,not just the deposit flight. I'm just
talking about the stocks. People aredifferentiating, and eventually they do differentiate,
and some business models play out andsome don't. But it don't look good
out there when we come When wecome back, we'll have to go over

(10:20):
some of the other concerns that themarket has an addition to the Fed that
are reserved and interest rates, andstart looking for some green shoots in this
particular market environment. This is JoshArnold, mister money Talk with jud Arnold

(10:41):
Hollis. We're here to help you. Nine five two nine two five five
six oh eight. This is JoshArnold, mister money Talk with jud Arnold
here to answer your questions on stocks, bonds, mutual funds. You should
position your just dollars, including yourIRA and four one K. Don't hesitate

(11:03):
to give us a call at ninefive two five six eight. You always
get straight talk, not sure codedadvice. In addition to the Federal Reserve
and interest rates being a concern ofthe market, other concerns the price of
oil, which has been moving upand by extension, the impact on the

(11:28):
price of oil, price of energy, should we'll say, fighting breakout in
Israel and by extension into Gaza,Lebanon, or into the West Bank or
even into Jordan, and how Opekmight respond to that. Then have the

(11:54):
concerns still about the UAW strike againstthe automakers, though it seems that General
Motors is on the verge of settlingtheir portion of the strike, but there
are other companies that are also lookingto strike for higher wages and benefits.

(12:18):
Then, of course I have tothrow this in some of the dysfunction that's
going on in the House of Representatives, which could lead to another potential government
shutdown, as I say, withouttalking politics, but stupidity amongst the Republicans
in choosing a Speaker of the House. And then the concern the direction of

(12:46):
earnings and guidances. This week we'recoming up with what is it about?
Forty percent of the S and Pfive hundred reports earnings this week, including
four members of the Magnificent seven reportingthis week. Microsoft and Google report on

(13:09):
Tuesday, Meta Facebook reports on Wednesday, Favorite Amazon reports on Thursday. And
then we have some other major namesincluding Coca Cola, three M, and
IBM among others reporting this week andit could be very interesting. Indeed,

(13:33):
so on a technical basis, mymarket technician, Chris Devorak of Devorak Technical
Research has said, yes, there'ssome issues. The market seems to be
market as he measures it by theS and P five hundred has been trading

(13:56):
between we'll say forty two hundred andforty four hundred. We're now at the
bottom of that that range. Andyou know, stocks have been holding up
in general, and now we're we'rein a technically strong period and we're entering
a seasonally good good period of time. My response to that is there are

(14:20):
an awful lot of people who areof the belief that the fourth quarter is
going to be very strong. Andwhen you have a lot of people thinking
the same thing, that may ormay not may not happen. But I
have been more a lot more bullishthan Judd has, at least on a

(14:43):
longer term basis. And for thoseof you who are like several of my
clients calling up and saying, shouldwe in our four oh one k increase
our cash position and or change howwe're in investing at this time given the
market being down, I've said,no, you're putting money in on a

(15:05):
monthly basis. Your choice is toinvest are typically in mutual funds, and
you're able to buy more shares ofthe mutual fund as the market comes down.
I do advise, and have advicefor a long time for listeners who've

(15:26):
been paying attention, to avoid investingin any of the target date funds,
and avoid investing in any of thebond funds, and focus primarily on the
more aggressive, either growth funds orif the S and P index is the
most aggressive, choice to put moneyin that and continue doing that because the

(15:50):
four to one K is a verylonger term investment, and buying shares when
things are down is only going tohelp you because at some point the markets
we'll recover, particularly if I lookbroadly again broadly speaking for companies that continue

(16:12):
to print out positive sales numbers andthose sales go up and they keep expenses
down, which means they are makingprofits on earnings that should over time produce
higher higher stock prices. Not astock market's never going up again. It's
all over. Oh, thank youvery much, and I'm glad to hear

(16:36):
that. I'll say, your facetiousnesscomes right through the radio. It's almost
as good as the joke you toldabout the about the the accountant, the
economists and the mathematician being interviewed forthe same job. I like that.

(16:59):
Well, se we just have tostart removing negatives, and I think there's
a lot of uncertainty. There's alwaysa lot of uncertainty in the world,
but there's a particularly large amount.The banking thing is systemic, and I
think that's going to be the triggerto get the Fed to accept their policy
mistake. But I think we arein the what i'll call the terminal phase

(17:19):
where the market is going to godown until the Fed reversus course, and
it's really about long term interest ratesat this point, and we're likely to
see a few bank Like the bankpressure this week is just accelerating for those
leads to the show bank. Thebanking in next to Krie is now below

(17:41):
the level it was at the heightof the Silicon Valley bank crisis earlier this
year. We've been negative on banksall year. There's still a point eight
times book. We think they haveto go to a point four times book,
which is obviously down a lot fromwhere they are, and that's it.
I think it's pretty straightforward We're ina pretty ugly period right now,

(18:03):
and the war certainly makes things moredifficult because people want to sell the market
Wednesday, Thursday, Friday and don'twant to hold risk over the weekend when
they can't sell. Or we're goingto tend to rally Monday Tuesday of most
weeks until we get out of thiscycle. Obviously, the work has spread

(18:25):
and in the Middle East that makesit a little to go higher, and
that's pretty bad. So it's it'spretty ugly out there, and we're through
bank earnings, and largely through bankearnings, and those came out about as
bad as we thought they could comeout. People are realizing how toast most
of these banks are, and that'spretty bad for the market, and there's
a lot of negative but now herewe are, it feels it feels way

(18:48):
worse than it is, which isthe S and P five hundreds up ten
percent for the year, the equalWeights down three, and the Nasdaq the
index is up thirty three. Itwas up over forty at one point,
so that's where you are. Stopmarketing. I tried to as well as

(19:10):
possible when it's this art because everytthat does fit into our asset allocation market
model of keeping up to thirty percentin cash with a balance invested. You
know, my focus has been incompanies involved in the Internet, leisure related
businesses, China related businesses, realassets which could include energy or real estate,

(19:37):
and then having a small portion foryou know, short term trading opportunities.
Your focus has been more on someof the small to mid cap companies,
but you too like to keep alot of cash on hand, both
for safety and for and for opportunity. Look the outside of big tech,

(20:03):
you know, the S and Pfive small cap and MidCap value indussees are
trading at lower P multiples than duringthe global financial crisis two thousand and eight,
two thousand and nine, So it'snot like prices are already pretty darn
attractive on a multi year hold.And I think we saw a resurgence of
activism this week, which is guysbuying stakes and companies and adjutating for change
and or sale. I think you'regoing to see a lot more of that.

(20:26):
I think it's really hard though,for the market with bents and the
war in the Middle East, towork, So I that's it. It's
just really harm and you just haveto accept your faith. I wake up
and I just say I'm going tolose money today tomorrow. I'm being a
little paseagious. I'm not this negative, but well I'm I'm glad you're not

(20:48):
this negative. I mean, mygoodness, I mean, you know some
of the things you've talked about,it's like you just go into it.
Sounds like you want to go intoa room, close the blinds and hunt
on to the up under the coversor hide behind the gosh, what are
you fighting? It is useless.I'm not selling the stuff that I still
want. And you know, wecome into this thing in a great position.

(21:11):
We're up nicely for the year,and we've got plenty of cash and
I don't have to call the bomb. I'll wait, but we'll come back
and we'll talk more. Yes wewill, because I do want to talk
about two companies and reported earnings thisweek, two technology related companies, Netflix

(21:33):
and Tesla. When we come back. This is Josh Arnold, Mister money
Talk with jut Arnold, always hereto help you. Five six eight.
This is Josh Arnold, Mister moneyTalk with jut Arnold. Here answer your
questions on stocks, funds, mutualfunds, how you should position your investment

(21:55):
dollars, including your IRA and fourO one K. Give us a call
two nine, five six eight.We're here to help you. Jud If
you missed the start of the show, we have to make that standard disclaimer.
Nothing on the show is should beconsidered an investment advice. Everything is
for discussion purposes only. Some ahere. All the securities we discussed in the

(22:15):
show may not be suitable for someare all investors. Please consult an investment
advisor before making any investment decision.Investing in the stock market contains risk,
including risk of loss. Well,so there is a lot of short term
there's a lot of short term lossesout there, or there's a lot of

(22:38):
things that are down at least onthe short term. And I know that
there's always a recency bias. Allif this is the way the market is
going, then it'll continue to gogo here better, better to sell out,
And it seems like some days there'saccelerated at different points during the day.

(23:02):
I've always wondered whether that has somethingto do with some of the quantitative
quantitative funds that are out there thatmight might be caught in advice with their
leverage as well as all the peoplethat have been dealing with these zero dated

(23:25):
options, which I think add tosome of the shorter term. I'm going
to add one more thing to thisdiscussion right now because it came up with
a few clients for me this week, which is, when there's this much
uncertainty, the fundamental non computer peopledon't have the heart, the courage,

(23:47):
whatever where you want to override thecomputers. And what makes the market is
the computers are They run on algorithmsthat are typically backward tested regressions over nine
months. And I'm very much simplifyingthat. I know they're more fancy than
that, but essentially they're backward lookingregressions and they see, Okay, if
this commodity price moves here, thenI should do this with stocks. And

(24:10):
they're making these types of relationships andan inflection points. When those relationships break
down, fundamental investors come in andthe computer figures out and needs to shut
off and recalibrate. When you havethis much volatility and this much uncertainty,
the number of non computers who arewilling to enter the market and overrule stock

(24:30):
price action goes down. And that'sanother thing that's impacting sort of prices,
which is, you know, thestandard relationships that we're seeing as oil goes
up, stocks go down, bondyields off, stocks down, and some
of that. Some of the timeit makes sense, sometimes it doesn't.
But we're just in a liquidation rightnow. Nobody's stepping up because prices.

(24:53):
There's too much uncertainty in relation tothe price of assets, so valuations have
to get more attract don't forget everythingin the world at a low price is
a buy, and a higher priceas a whole, and a still higher
price is a sell. You cantake your family home that's been there for
one hundred years that you want tolive in for another one hundred years.

(25:15):
I would still venture to say formost people that there is a price that
they would sell it, and thereis a price that they wouldn't re buy
it. And when you see thevelocity of transactions slow down, a lot
of that is a lot of peopleare just saying, well, I don't
need to play this game yet.It's just really uncertain. It's really hard.

(25:37):
This is why we carry thirty percentcash and we just wait and you
to just be pacing. Now.It's easier for us to sit here and
do nothing, as they say,because we're from a position of strength,
which is the best piece of riskmanagement. But we make no bones.
This is a brutal market. Theydon't last forever. But right now I
know that you expect to make moneysome of the days. I just wake

(26:00):
up right now and saying we're goingto lose money every day. And so
things get better and on the outsideas I sort of think through how we
make this end. The ending ofthis I think is going to be that
the FED is going to have toease financial conditions. I think they've overdone
it with They're higher for longer andyou're about to see the implosion of the

(26:22):
regional bank system. Now some ofthat is related to FED policy, and
but a lot of that is selfdecrypted. But I think that's where we're
going. And me maybe one totwo weeks away from that. Well,
you've got the FED. FED meetingis in the beginning of November, and
I think the FED meeting takes place, yeah, the couple days right before

(26:45):
Apple reports on November. Well,you don't need a FED meeting to slow
down quantitative typing, which they're stilldoing. You don't need a FED meeting
for that and they will if youare entering a stage where, look,
if the regional bank index goes downanother fifteen percent next week, I'll just

(27:07):
say this, there is a pointwhere that decline transitions from linear to nonlinear.
And what I mean is banks areninety percent of capital is debt,
and so when the stock goes downtwenty percent, that's only on ten percent
of the value of the business.You're only changing the value of the company

(27:30):
that you're paying for by two percent. And at a certain point, the
reflexivity, which is a fancy wordfor the second and third order of impacts
of what's happening, kick in,meaning if a bank goes down, if
a bank stock price goes down fiftypercent, people in a day, on
an unexplained basis, people will doa bank run because you're being rational your

(27:55):
bank stocks down at bunch, theseare ninety percent. You don't want your
money, Steff. And then therationale ality of people withdrawing their money were
reflexively creates the outcome that the stockwas predicted. And with levered companies and
with banks, you just can't.I've seen it a million times. At

(28:15):
a certain point, you don't godown five percent, you go down twenty
and when you go down twenty,it's over. So not to be dooming
gloom. But look, this isbanks we're talking about, So I think
the federal step in. But thiswas about a batty outcome. And we'll

(28:36):
see over the weekend what the headlinesare. But I was feeling a lot
of regional bankers. Are me screamingat the FED this weekend. You're going
to see or hear some type ofa response. Well, I'm happy that
they can start screaming at the screamingat the FED because Fed governors came in
right behind Jay Pal's speech to theEconomic Club of New York and sounded a

(29:04):
lot more hawkish than he did.Yeah, stop pretending these people know what
they're doing. They have no clue. It's really hard. I don't I
don't pretend that they know. Wellyou've heard me, you know my feeling
on the on the federal Federal Reservethat uh, they're really at at a

(29:27):
loss right here. They created asituation that they don't know how to get
out of. You you blame them, and I think the answer is somewhere
in between, which is they havean impossible job that the best person that
Warren Buffet would screw up being aFED governor. Well, I'm not a

(29:47):
I'm not a Fed governor. It'sjust to say it's harder. You should
expect it to be screwed up.And that's what's happening. It happens every
cycle. They go too far,knee and we're about to go too far.
Oh, I think we've I thinkwe've gone way too far. Let
me rephrase that we're about this foralmost a year. We're about to see

(30:11):
the impact of them going too far. There you go, Okay. Well,
on a positive note, we hadearnings coming in from Netflix this week,
and I know there are an awfullot of people who listen who are
Netflix subscribers. I am a Netflixsubscriber. I am not the Netflix share

(30:37):
owner, but I am a Netflixsubscriber. And there were almost nine million
new Netflix subscribers that joined Netflix inthe last quarter, and that helped to
really boost Netflix stock this past thispast week. When Netflix reported their earnings,

(31:00):
they beat on the bottom line.Inline reports on their uh top line.
They did talk about increasing prices forsubscribers, but I think that's more
a way to drive people to thelower tier advertising tier, so that Netflix

(31:22):
starts making you're getting it into thespecifics of Netflix. And I think that
the story of Netflix is actually quitesimple, which is, you would a
bunch of non economic competition come in. Everybody decaid they wanted to compete with
them in their own directed sewer product. All of these companies Disney, Comcast,
WBD, Warner Brotlake, you name, and all these streamers have lit.

(31:45):
I mean there might be one hundredbillion dollars of cumulative losses from attempts
to compete with Netflix and everybody tocome with their own and those people are
pulling back now in Netflix's pricing palent. But we got to come back for
our For our last segment, we'llcome up with a little positivity. Good
good nine five two five five sixoh eight. You can always call me

(32:09):
mister money Talk, Josh Arnold orJut Arnold. We're always here to help
you. Nine five two nine twofive five six oh eight. This is
Josh Arnold, mister money Talk withjud Arnold here to answer your questions on

(32:30):
stocks, bond's mutual funds, howyou should position your investment dollars including your
IRA in four O one K.Don't hesitate to give us a call it
nine five two nine two five fivesix oh eight, always here to help
you. Positivity, positivity, judlet's have it, have a little bit

(32:52):
of that. Coca Cola reports reportsduring this coming week. The son always
rises and this will get through thistoo. And I think that that's the
story. You've been in business forhow long? Well, since nineteen seventy
eight, We've I've been through.I've been through a few of these ups
and downs, and the downs seemto always come with some kind of government

(33:22):
policy mistake. I mean, that'sbeyond the beyond the usual five to ten
percent corrections, but the kind ofcorrection or pullback that we have seems to
come from some type of government actionor in action. So that's more on
a macro level than on a wholeseries of companies reporting, you know,

(33:50):
bad, bad numbers. Now,of course, somebody could say, well,
the Fed's policy action is going tobe bringing us a recess. Well,
we've heard that since the FED startedraising interest rates back in twenty twenty
two. But on a purely statisticalbasis, the first six months or first

(34:15):
two quarters of twenty twenty two,we had two quarters in a row of
negative GDP growth, which defines arecession. Since then, we've had positive
GDP growth, and estimates are forseveral more quarters of positive GDP growth,
which I know is frustrating to theFED, but to individual companies that could

(34:40):
be pretty big positive. I thinkthe FED is also frustrated that the economy
is reasonably resilient. Consumers are stillspending money. They're spending more money on
experiences, more than more than onindividual goods. You still have the price

(35:06):
of housing. While it has leveledoff a little bit, the monthly cost
or the mortgage rent equivalent cost continuesto go up. And that is direct
result of the fed's interest rate policyand mortgage rates going up. So of

(35:28):
course mortgage rates go up. Peopleare paying more for that monthly bill.
And the FED says, oh,look at that housing prices or house mortgage
rent equivalency is still going up.We've got to raise interest rates and that'll
that'll come down. Like what,you're not realizing this is what's going on.

(35:52):
So that becomes a little bit let'stake a step back here. I
know you're frustrated with the FED.I know most people are. I think
for the first time we have areal window into how this ends in terms
of the FED walks US back onepart of the problem, because you can't
just blame the FED. The fiscalside of the House, the Inflation Reduction

(36:15):
Act and the unbelievable We've been runningsix percent deficits of a percent of GDP
with unemployment at three percent. It'slunacing, and the federal government needs has
really been hurting the Fed's ability tobring down inflation. And I think we're

(36:35):
now at tipping point with Biden's speechthis week. I mean, now we're
funding two wars. It's very froI'll say. On a geopolitical level,
I have always been very frustrated withthe lack of support the European Union gives
to you. You know, theyjust literally free ride on the US taxpayers
spending. It's crazy. But herewe are. Okay, let's wait,

(37:00):
let's switch gears a little bit.You've got some earnings coming out this week
from a good chunk of well,let's this is the positive piece before you
get to the specifics. One ofthe positives that we have the way to
break correlation and on the way down, stocks correlate one hundred percent effectively on
the way down. And then whatyou see is you'll they'll come out either

(37:23):
with earnings or news or whatnot,and that'll break that correlation. And whether
it's Netflix, which we talked aboutin the last segment, which rallied about
twenty percent after earnings, or nightSwift, which oddly is a trucking company,
something that you would expect to beannihilated during a recession, came out
incredibly well this week up I wantto say, about twenty five percent after

(37:44):
earnings that were not nearly as badas fear and as people report, we
just got through the banks, whichis the part of earnings that everyone expected
to be the worst, and theywere. They were atrocious. But the
market is still rewarding print that arepositive. So you have a lot of
things that are going to break down, but you're still going to be a

(38:06):
chance for differentiation. So I don'tknow, if we're close to the bottom,
you don't really need to call thebottoms. I made most of my
money after the bottom has been formedand figuring out the second thing to move.
That's worked for me partially why Iwas able to take a nap Friday
instead of just watching the cartage.Because it's not my job to call the

(38:28):
bottom. It's not your job.Either's no one's job. You don't have
to. But I increasingly think theway out of this is going to be
the banks really are in a placewhere the Fed's gonna have to act and
take the foot off. And ifthey cut seventy five basis points, you
have an upward sloping yield curve,and that's definitely a good thing. But

(38:49):
we got a bunch of earnings thisweek. We got a but we still
we got three more weeks of earnings, three more weeks, so we've got
that. I think there's mhm,you know, there is a likelihood of
you know, of a hotter warin the in the Mid East starting this

(39:09):
weekend. War is war may begood for for some things, but definitely
going to be a very very difficultsituation. Market is going to keep selling

(39:30):
off Thursday and Friday, even Wednesday, and it'll be block Monday and Tuesday
because nobody wants the whole risk ina midist conflict scenario. So over the
weekend, that's just it. Idon't make the rules. I'm just saying
those are the rules. No,you don't. You don't make the rules.
We just try to find companies thatlook good for look good for us.

(39:57):
I am looking forward to to seeingwhat the numbers come out with Microsoft
and Google on Tuesday. I wantto see what Microsoft has to say,
particularly with their azor Azora cloud,and how they're incorporating artificial intelligence into that.

(40:19):
Google's focus is going to be onadvertising and whether that advertising business is
holding up and or accelerating. Ido know that Google is still going through
Department of Justice suit on them beinga monopolist in terms of search, but

(40:40):
Google is now a verb. Wedon't see Yahoo being a verb. Google
is a verb, and people likethe search features of Google. They've got
Neta coming out, and again that'sgoing to be looking at their advertise business

(41:00):
growing. What you know, arethey able to monetize anything from reels and
how the monetization from Instagram and whattheir advertising business is and are, and
what's their strategy for artificial intelligence.And then there's favorite Amazon reporting on Thursday,

(41:23):
and again the focus is going tobe on Amazon Web Services AWS growth,
is that returning and how much profitis Amazon going to be able to
generate from their retail business? Goingto be interesting this week. Any questions
give us a call. Nine fivetwo nine, two five, five six

(41:45):
eight. I am Josh Arnold,Mister Money. Talk with Judd Arnold,
always here to help you. JoshArnold Investment Consultant is a registered investment advisor
located in the state of Minnesota.All securities discussed are for informational purposes only.
Investment contains risk, including risk ofloss. Consult your investment professional before
making any decisions about your investment portfolio.