Money Matters: Market Mayhem, Geopolitical Tensions, and Structured-Protected ETFs

In this episode of Money Matters, brought to you by Greenberg Financial Group, we break down the latest market turmoil as fears of stubborn inflation and slowing economic growth spark concerns of stagflation. Risk assets took a hit, with Bitcoin sliding below $80,000 for the first time in three months.
We also dive into Nvidia—arguably the most important company in the world right now—as they posted strong earnings, yet their stock still moved lower. What’s behind the sell-off?
On the geopolitical front, Friday’s high-stakes meeting between Zelenskyy and Trump at the Oval Office raised more questions than answers about the future of the Ukraine war. We analyze what this means for global markets and stability moving forward.
As always, we wrap up with our expert financial planning insights, discussing key tax efficiency strategies to help you navigate tax season.
Lastly, in this episode we have a special guest, Matt Kaufman, who works for Calamos Investments. He heads the team who created the first of its kind structured protected ETFs last year which aim to provide 100% downside protection (net expense ratio) with participation in the underlying index up to a cap. Similar to FIA crediting strategies we dive into these revolutionary products on how they can be used to help mitigate risk in your portfolio.
If you would like to contact us to learn more about our firm and our process call us at 520.544.4909 or go to our website at www.Greenbergfinancial.com or email us at [e-mail]

Episode Transcript

Speaker 1 (00:04):
Good morning.

Speaker 2 (00:04):
Like Dean said, it's that time again, Sunday morning. This
is the Money Matters Show, brought to you by Greenberg Financial.
We've got a very special show today. I've got Sebastian,
got Todd, got Dyling. Dean will be on the second hour,
and don't you want to tell him what second hour
is gonna be.

Speaker 3 (00:21):
Yeah.

Speaker 4 (00:21):
The second hour covers a interview with Matt Kaufman from
Calamos Investments talking structure ttfs. They come out with these
new products and he heads them over there at Calamos.
He's been there for a couple of years. Very smart guy,
very articulate, and he knows what he's doing. He knows
what he was creating over there. And they're great products.
There changed trade of funds that offer a in the
sense of liquid annuity. It's how you can think about it,

(00:45):
and he'll go into details about it. We'll all go
into detail about it later on in the next hour.
So be sure to tune into the second hour the
Money Matter Show, And obviously if you can't, we always
have it on podcasts. Right after the show airs on Sunday,
we will have it on the podcast.

Speaker 2 (00:58):
So you and your dad, you and your dad and
Todd talked to this guy called in from Chicago, yep,
and is really a very unique product. How long they've
been out guys, pretty months? Four months, nine months, that's right,
you said, that's right, that's right. So they've been around
for eight nine months, and it's it's a totally new concept.
You have a defined downside and a unlimited one now

(01:22):
not unlimited, a cap on the up side.

Speaker 1 (01:25):
It's not necessarily a new concept. It's just a new
concept to be in an ETF. We know it's in annuities.
It's been in annuities for decades, the fixed index annuity
where they're saying downside protection, but you can participate up
to a cap. The problem with the nuity is the
surrender schedule. You're locked in these products and that they
can change the caps on you during the term and

(01:47):
all all this the games that they that they can play.
This product is a one year product. You're not locked
into it. You know what the defined caps are going
to be. They're not going to change on you. So
it is a little bit of a different concept, but
it's pretty much just a twist or a spin on
what's been in the industry for years. But now it's
available to the retail good point.

Speaker 2 (02:08):
And but it's really kind of unique. You can actually
day trade it. I mean you don't. You don't have
to hold it for a year, and you can watch it.
For instance, it came out with one that's a bitcoin ETF,
and the idea with this bitcoin etf is twenty percent
maximum downside right down't correct and then upside fifty percent.

Speaker 5 (02:25):
Well, they have that one. They also have zero I
don't want I don't.

Speaker 2 (02:28):
Want to hear about now they have zero protection on
bitcoin or what correct? So well, you cannot lose and
the upside.

Speaker 5 (02:36):
Is what thirteen thirteen thirteen percent depending on when you
get in.

Speaker 2 (02:39):
You can't lose a pen. But you make the cool
part about the one that I was kind that we're
talking about this, the one that has twenty percent maximum
downside in theory, I will say, in theory, yes, all right,
because they haven't gone a year.

Speaker 1 (02:51):
Yet, we haven't seen it for believe that this is
that's what they're doing.

Speaker 2 (02:54):
They're saying that that's what they're gonna do, so you
know it'll be But interestingly this came out at twenty
five dollars. Well, bitcoins had a kind of a rough goal.
And it's now trading at twenty three and a half.
So your downside now is fifteen percent and your upside
is sixty percent, are fifty five percent, So that's okay.

Speaker 6 (03:15):
It's enough.

Speaker 2 (03:16):
Fifteen percent downside, fifty five percent upside. This pretty good
risk reward trade.

Speaker 1 (03:20):
There's a lot of interesting risk reward trading ideas that
come about with these products that you wouldn't have ever
thought about before.

Speaker 2 (03:28):
It's clever and anyway, it's a brand new concept to
the ETF world. Todd's absolutely right. It's been an annuities forever.
But innuities you're locked in. There isn't anything you can
do about it. If it's working your way, working against you,
you're you're kind of stuck with it. Isn't much you
could do.

Speaker 1 (03:42):
And I believe they've had buffer ETFs for quite a while.
I mean, those are just ETFs that have made will
protect twenty percent type of buffer, right and those just
like use option, But there hasn't been one that's been
able to one hundred percent downside the mimic like the
fix index annuities. And so this is a very interesting
conversation we'll.

Speaker 5 (03:58):
Have later on no guarantee in our world. It's gonna
lead us into the disclaimer. This show is sponsored by
the green Brik Financial Group and you can listen on
seven ninety KNSD or iHeartRadio. The show discusses different investment
products and strategies. Every product and strategy have some type
of inherent risks, and we strongly encourage our listeners to
properly understand the risk to determine whether to buy, sell,
or hold. Show has been on air for over thirty years.

(04:19):
The Greenbriok Financial Group is registered with the SEC. Visit
our website at Greenbrik Financial dot com for some more information.

Speaker 2 (04:25):
Great job, but great joy.

Speaker 3 (04:27):
Yeah, great job. We had an interesting week.

Speaker 4 (04:28):
I mean it was a lot of volatility in it,
and we had the Dow up point nine percent, the
SMP was down one the Nasdaq was down three and
a half percent, the Wrestle two thousand was down one
point four percent, and the RSP was up point two percent.

Speaker 3 (04:41):
It was all over the place.

Speaker 4 (04:42):
I mean Friday, especially Friday morning. It was up because
of good PCE numbers and that's inflation. That the Fed's
favorite inflation number. That was solid because it was in
line with expectations. And then which was first for me.
I don't know if this has been a thing before.
Dave with that Oval Office interview with that seemed like
a behind the door meeting. That the that I mean,

(05:03):
like presidents always had that. We never get a viewing.
That was just on live TV.

Speaker 2 (05:07):
I don't think any of us have ever seen anything
like that.

Speaker 3 (05:09):
Yeah, I don't think so either. I've never seen it.

Speaker 2 (05:11):
It was both I'm saying exactly what they thought.

Speaker 4 (05:13):
Yeah, usually that all three of them, all that goes
on behind closed doors and then they come out and
they say, we have not reached the resolution yet.

Speaker 2 (05:19):
Yeah, not for public consumption, right.

Speaker 3 (05:21):
Yeah, exactly.

Speaker 4 (05:21):
But so that was there, so that the immediate yeah,
reaction to that was Marcus dropped, yep. But then they
just finished the day up on one and a half percent.

Speaker 1 (05:31):
They screamed higher.

Speaker 2 (05:33):
At the end of the day.

Speaker 1 (05:34):
I read, yeah, I ran the report about fifteen minutes
before the end of the bell, thinking that's it, that's
about it. Every index was about down, and then I
mean every index finished about one percent higher in that
last fifteen minutes of trading. I mean just screened and
even na Vidio came up about two and a half
percent in about fifteen minutes.

Speaker 2 (05:49):
It did. It started to last a week ago Thursday,
when Walmart gave cautious comments about the consumer and about
what they're looking for, and that kind of was the
catalyst to get a pretty overbought market to start some
profit taking. That continued on into Friday, which turned out
to be the worst day this year, and on Monday
it continued and on Thursday we had dropped the S

(06:13):
and P had dropped five percent. Of six days, it's
pretty heavy. And Friday we opened kind of quietly, not
sure what direction we're going, Like tow I said, the
last fifteen to twenty minutes on Friday it just exploded higher.

Speaker 1 (06:23):
Yeah, And I think coming off of last week with
Walmart's comments, some of the fears became of stagflation. For
those who don't remember what stagflation is, that's where you
have inflation but you don't have economic growth. And so
with Walmart saying well, if the consumer's not doing well
and some of these economic figures that have come out
recently haven't been as strong as they have been previous quarters,
you start to think, okay, it's economic growth slowing. And

(06:45):
on the other side of the coin inflation. We've seen
the reports being still pretty sticky. It hasn't really come
down the way we thought it might, or the FED
thought it might. Has a better way to put it,
and so the idea now is what we did. We
had risk off investing theme this week because of that
kind of fear of potential.

Speaker 2 (07:04):
I think that was the headline for this week, risk off. Right.

Speaker 5 (07:07):
I was going to say, another contributor to stagflation's high
unemployment numbers. And I've been seeing reports that a lot
of companies out there are starting to do layoffs, right,
and that's not going to be Starbucks.

Speaker 2 (07:19):
Starbucks rallied two percent on Monday. They're going to lay
off eleven hundred corporate employees and they're not going to
fill a number of open corporate positions. Have no impact
on the stores, but they like that. Stock went to
a new fifty two week high. It's closing in on
an all time high, which I predicted about three weeks ago.
If we go back just real quick to just half

(07:40):
way hi.

Speaker 1 (07:42):
The geopolitical ramifications off of that meeting, though me and
Dylan were talking about it could be quite significant because
of the potential where you have a Ukraine Russia cease
fire that maybe only the United States and Russia agreed
to in Ukraine never does and so how does that
re write the allied playing book. We already know that

(08:03):
European is not too fond of Trump, and so a
lot of those European countries probably have no problem, you know,
saying something against him in that regard. So it's very
interesting to see how this resolution is gonna play out
because of that blow up. You don't think that there's
there'll probably will be more talks with Vladimir Putin and Trump,
Well you think they actually find a resolution. There will
be with Zeleski.

Speaker 5 (08:23):
You think we're going to switch sides.

Speaker 1 (08:25):
No, I don't think we'll switch sides. But I think
when you have a decision that only two countries come
to a and then you go against your allies here NATO,
and if NATO disagrees with the agreement that the United
States science, that is the first step to realigning.

Speaker 2 (08:40):
That may be what's going on with Raytheon which had
had fallen due to concerns about decreased defense stending stock
had had given up some of the games, and it
just kind of quietly has gone up seven percent over
the last week or so to a new all time high.
And like I said to Sebasti earlier, maybe world peace

(09:01):
is not imminent. Yeah, you know, and I think that
was kind of the theory when they were selling off
Raytheon as well. We get Piece in the Middle East,
and Piece and China and Town want to start getting
long and we'll get Putin and Zelensky to talk. You know,
maybe it won't be so much demand for Raytheon, but
it's all time high.

Speaker 1 (09:19):
Big report this week. Most important company in the world
right now. Navidia came out after the bell on Wednesday,
reported really stellar earnings. Almost every metric they beat. It's
quite impressive that you have a seventy eight percent year
over year growth on your profits.

Speaker 2 (09:34):
And the stock rallied two percent and then tanked ten percent,
and you wonder why. And there was some comments in
the conference call about margins. Margins are a little soft
right now, and they expect them to get back to
seventy percent.

Speaker 1 (09:50):
I heard potentially some of the teriffs that Trump might
put on, or maybe the increasing of the chip sacked
potentially might squeeze those profits. But I mean, you look
at the those numbers and they're just so impressive. And
with what he was saying, the CEO was there is
a lot of scaling yet to be done, and with
the reasoning AI because right now chat GBT is more

(10:11):
of a logic model and there's reasoning models that use
he says, one hundred x times the amount of computing
power than the logic models that they're used for like
chat GBT, and so there's just so much more capability
that can still be built out in the world in
his opinion that there's still a lot of need for
those those chips. So I I you know, you saw

(10:34):
vrt rally on the back of Blackwell, and Blackwell did
better than they expected, and so with they probably have
already high expectations. The fact that Blackwell exceeded those expectations
shows that it probably is working and the whole deep seek thing.
Then it seemed to sway anyone's order on Blackwell.

Speaker 2 (10:50):
No, no, that it's a very important stock, and the
market tanked on a Thursday because of it. Video, I
mean the collapsed in in video that was kind of
the final straw. Then today and the vidiot had a
little better tone into it was actually it opened down
about two points on Friday, and then it rallied back
to the green and the market said, okay, we're gonna

(11:13):
be okay now, and the market had a nice rally.
Then the Trump Zelenski thing was on TV, and down
it went again, and then within minutes it just it
had reversed. And like you said, the last fifteen or
twenty minutes on Friday was explosive.

Speaker 1 (11:27):
Another thing that was interested I was reading about was
with that profit margin squeeze potential because of the inflation.
Sure that the chips act. Taiwan Semiconductor, who makes the
video's chips, which is why they would be impacted, is
moving to the United States. We know this, right. They
had the big factory in Phoenix, and they actually said
that facility is going to go live at some point

(11:49):
early twenty twenty five, so it could be any day.

Speaker 5 (11:51):
Yeah, so really, yes, a major benefits.

Speaker 1 (11:54):
They started that one back in twenty two.

Speaker 2 (11:55):
Right, and it was delayed. It was delayed because they
couldn't find skilled workers.

Speaker 1 (12:00):
Yeah, but they've been training we were talking about that
for about year and a half.

Speaker 4 (12:02):
They've been bringing people right the coming to fruition. I
mean they had to send them to Taiwan to train
to bring them back here.

Speaker 2 (12:08):
Right, and then they brought some of the Taiwanese people
here to train how to do it.

Speaker 1 (12:12):
And then I look deeper into the plans of Taiwan
and they actually have another Stage two facility planning to
be built in twenty seven twenty eight, and they even
have plans for a Stage three in twenty thirty that
would bring the total investment to sixty five billion dollars.

Speaker 2 (12:27):
Now, is that plan in North Phoenix? I've never seen it.

Speaker 1 (12:29):
Yeah, it's like Black Canyon going to.

Speaker 2 (12:31):
Okay, I've seen the Intel. You can't go to Phoenix.
What I've seeing the Intel?

Speaker 4 (12:34):
You think they have any interest in buying Intel? And
then just using those factors that are already half built, It'd.

Speaker 2 (12:39):
Be interesting to see what they do with Intel.

Speaker 3 (12:41):
Yeah, ticking away a factory.

Speaker 1 (12:43):
But I think right now Qualcomm and Broadcom are the
only ones that really seem to have some interest in
buying Intel.

Speaker 2 (12:49):
Before we get too far away from the European thing,
you said, Europeans, don't that create a lot of Europeans
aren't that crazy about Trump.

Speaker 1 (12:55):
It definitely seems like the European country leaders aren't that
crazy about Trump. I don't know Europeans well citizens, but you.

Speaker 2 (13:02):
Know, look at Tesla. Tesla a thirty two percent office December.
Tesla doubled after Trump got elected because of all the
wonderful things Trump was going to do for a musk. Right,
it's almost back to where it was the day of
the election.

Speaker 3 (13:14):
Oh is it?

Speaker 2 (13:15):
Yeah, it's I think it was two sixty to eighty.

Speaker 5 (13:18):
Well, it wasn't warranted. I mean, I think it's going
to go over.

Speaker 2 (13:21):
No, we couldn't understand it. We couldn't understand how it
went up. But here's been interesting. Their European sales in
January were down fifty percent. Well, electric vehicle sales in
Europe were up thirty four percent. Is that a little
musk backlash there?

Speaker 3 (13:38):
Yeah, definitely has to be things like that. What else
could it be if that's the case.

Speaker 2 (13:42):
Yeah, Earl Trump backlash, musk backlash, whatever. But Tesla sales
down fifty percent while the rest of Europe's up thirty
four percent.

Speaker 5 (13:49):
And there's more choices around now too.

Speaker 2 (13:52):
That would account for some of that.

Speaker 4 (13:54):
Yeah, but a fifty percent to climb that quick, you'd
think it has to do something with bang stick it
to the news. Yeah, musk and Europeans mainly get left
wing news.

Speaker 2 (14:03):
We often wonder what you know, what's going to happen
in the market, and we always say, look to the
bond market is three times the size of the stock market.
Industry is coming down todd uh ten years down nineteen
basis points, which is pretty significant move.

Speaker 1 (14:16):
The thirty year Freddy Mack went down to six point
seventy nine. It probably is going to go down to
the mid sixes at some point.

Speaker 2 (14:22):
Sodaters buying a daughters buying a house, getting a mortgage conforming.
Conforming means it's within the Fanning May loan limits, which
in Arizona now just went to eight oh seven. So
I think eight o seven under eight hundred thousand uh
and twenty percent down, that's a conforming loan gets you
the best rate, assuming you have good credit. And they're

(14:44):
six and a half and the lenders rebating them seven
thousand dollars are closing.

Speaker 1 (14:49):
And I think what's really helping the market is the
fact that the sticky inflation doesn't really seem that sticky,
because if you dive into it, the biggest component of
inflation is housing. We know there's a lag effect to housing. Yes,
last year was fine, but it wasn't really a growth year,
so it shouldn't have been contributing to inflation. The big

(15:12):
contributors to inflation is probably the food. We know eggs
are going crazy, we know some of those. It's not
fuel either, though we know fuel hasn't really done anything.
It's probably gone down year over year. So the housing
and fuel should not be contributing to inflation as much.
And I think the bond markets seeing that the fact
that we're coming in in line with expectations, we're probably
going to see some rolling off of the inflation numbers

(15:32):
over the next four or five months. It's going to
help allow the FED to keep cutting those rates lower.

Speaker 2 (15:37):
That's someone who is addicted to large blueberries. I don't
pay close attention to egg but I did notice when
I was in the grocery store last night that the
egg display was full. There was plenty of eggs, lots
of eggs, and a couple of weeks ago was it
almost empty.

Speaker 1 (15:56):
When I went to I keep going to restaurants and
it's like fifty cents year, this has eggs on it.

Speaker 2 (16:02):
Dennis Denny's what I text you that you didn't see it.
Dennis has added a surcharge to eggs. Eggs, Yeah, Denny's.

Speaker 5 (16:10):
You know what else is through the roof right now?

Speaker 4 (16:11):
You know what?

Speaker 2 (16:12):
That search charge won't go away. Watch it won't go away.
It's like this city voting on this half cent temporary
property sales tax.

Speaker 5 (16:21):
Yeah right, I paid like twenty dollars a pound for
a steak the other day.

Speaker 3 (16:24):
Horrible.

Speaker 2 (16:25):
He paid what.

Speaker 5 (16:26):
Twenty dollars a pound for a steak the other day?

Speaker 2 (16:28):
What a stak's supposed to cost?

Speaker 5 (16:29):
I don't know, not twenty dollars a pounds.

Speaker 6 (16:31):
That's crazy.

Speaker 2 (16:31):
I just keep blueberries. I don't know.

Speaker 5 (16:33):
I think I would say maybe like reasonable twelve okay,
you know I've seen them on sale for as low
as six dollars a pound.

Speaker 2 (16:40):
Okay.

Speaker 7 (16:41):
Uh.

Speaker 2 (16:41):
The China down three percent last week. They got involved
in the selling as well, after what five weeks I
think consecutive weeks up.

Speaker 1 (16:49):
Well, they were the best performed. We saw a little
chart is like, what's the best country since Trump got in?
It was China?

Speaker 2 (16:55):
Oh, no question, yeah, no question. And that they're wanting
to do retality Tory terrists, I mean, do we sell
them anything?

Speaker 1 (17:03):
Are you kidding me that ships we sell them ships, right,
we sell them chips, but we don't even allow anymore.

Speaker 2 (17:10):
Yeah, they don't even get the good chips. They get
the use shifts. But I think I think that's just
a joke that they that they can put a right.

Speaker 1 (17:17):
I think the only think we would sell them. I
don't know if we sell it, then it might just
steal it as our intellectual property. I mean, they take
a lot of our ideas.

Speaker 2 (17:23):
Yeah, they don't. They don't buy those, They just steal those. Yeah.
I just thought that was hilarious that they're going to
retaliate and they're going, yeah, I don't think so. Yeah.
You know, if I buy ninety percent of your stuff
and you buy ten percent of my stuff, you really
can't threaten me. You're not that scary. Oil down sixty
cents on a week to sixty nine eighty gold finally,
finally gold, Yeah, a little profit, taking down ninety two dollars.

Speaker 1 (17:45):
I thought it was kind of interesting that it was
the same week that bitcoin had such a bad week.
Maybe correlated, maybe not, but it did seem like there
was some inflation. I've heard reports that the FED isn't
increasing money anymore into the system. They're reducing their balance sheet,
which when they reduce their balance sheet for people who'll know,
that's a one way for them to take money out

(18:06):
of the system, which helps bring inflation down. It's not
necessarily the only way to bring inflation down is not
just cutting it in raising interest rates. They also have
other tools in their tool belt to help lower You know,
it's a lot of monetary thing won't bore people, but
for the most part, liquidity is not increasing in the
system right now. It's drying up, and that's why we've

(18:28):
seen some of these risk assets sell off. Bitcoin was
down big, but if you look at the rest of
the crypto world, it's down a lot more.

Speaker 2 (18:37):
Sad last on last week's show that if fifth coin
could not hold ninety two thousand, there would be a
cascade to the downside, and that's exactly what happened.

Speaker 5 (18:44):
Yeah, what to finished the week up.

Speaker 1 (18:46):
The finished around eighty four, but they've got down all
the way to seventy eight during the week.

Speaker 2 (18:50):
Yes, it was down twenty percent in a week, down
twenty percent a week, So there's that. We go back
to that point nine beta and I'm thinking, okay.

Speaker 1 (18:58):
Well, it's funny. So it was a one year is
a run. Obviously it's only been out for a year.
At BTC it was point nine and I checked back
and then it was like one point one after this week.
It's obviously the volatility of this and it just happened
to be that bitcoin didn't really have a crazy twenty
four because like for six months out of the year,
it didn't really do anything, just range trade.

Speaker 2 (19:17):
For those of you that are new to the show,
beta as a measure of volatility. A beta of one
means it moves the same as the market. If the
market's up five percent, your security should be from five percent.
Beta of two means to move twice as much as
the market. We were joke laughing because the Bitcoin ETF
had a beta of point nine, meaning it's less volatile

(19:38):
than the market. We all know better than that. And
what Todd's just explaining is is because it's been relatively
quiet since it came out.

Speaker 1 (19:44):
Yeah right, yeah, And as you see, the beta can
increase if it does become more volatile.

Speaker 5 (19:50):
Relatively quiet. And at the same time, these products have
only been on for a year.

Speaker 1 (19:53):
I mean, if you want to take a ten year
beta of Bitcoin, it's going to be much different, you.

Speaker 2 (19:58):
Know Trump Trump often mentions President McKinley. I don't know
if you've ever noticed it.

Speaker 1 (20:05):
That's what he does.

Speaker 2 (20:06):
That's his favorite president.

Speaker 1 (20:07):
It's like his Trump. Well was Tariff comparison and McKinley.

Speaker 2 (20:11):
So I got a little I had to do a
little research on McKinley because they're going to named Mount
McKinley and they're putting it back to Mount McKinley again. Now,
McKinley was as a Republican and he was the twenty
fifth president, served eighteen ninety seven to nineteen oh one.
He was assassinated, I suppose, reportedly one of the nicest
guys ever. He was stabbed. As how, he was assassinated

(20:34):
the guy who stabbed him multiple times. And as he's
laying on the ground dying, they're roughing up the guy
who stabbed him, and he's telling them go easy on him.
I'm thinking, really, wow, Jesus would like that, you know,
not me. Anyway, he was for you, thank you, oh
one good job. He was a Napoleon of protection. Todd

(20:56):
a napoleon a protection, big fan of Tariff's, big fan
of Carros.

Speaker 7 (21:01):
Uh.

Speaker 2 (21:02):
You know, What I took away from that is is, Okay,
I get that why Trump likes him, you know, because
of the way he was. The thing that I thought
was the most significant about it, though, is is do
you realize we've had assassination attempts against ten presidents? Twenty
two percent of the presidents have had assassin assassination.

Speaker 1 (21:23):
Do you want to know Mexico's.

Speaker 2 (21:27):
I can't imagine. But McKinley was one of four that
were assassinated and named the other three.

Speaker 1 (21:36):
The actually assassinated.

Speaker 2 (21:37):
Ok who got assassinated but Kenley, JFK JFK, Lincoln Lincoln,
and no one will get the other one. I guess
I was, but I wouldn't have Garfield Garfield. I knew
it's from Garfield the cat.

Speaker 5 (21:54):
What are they changing? What do they changing the mountain
mountains name from? What do they change too?

Speaker 2 (22:00):
I don't know what they changed it.

Speaker 1 (22:02):
I don't even know where mountin McKinley is in Alaska.

Speaker 2 (22:04):
Alaska, Yeah, in Alaska, and they can't I should know this.

Speaker 1 (22:08):
This is that's where the aliens are.

Speaker 2 (22:10):
One of our listeners will say, you guys are so stupid. Yeah,
but anyway, it's gonna be my it was Mount McKinley,
and they changed it to some other mountain name. I
think it starts with Mountain Mount.

Speaker 3 (22:23):
Yeah, I don't know.

Speaker 4 (22:24):
Don't talk anything about Warren Harding, No, he doesn't talk.
Gu's funny because he had a lot of terrors too,
and he was part of the reason that the Roaring
twenties happened. Todd and I were talking about this earlier
last week with they put on tariffs on duties coming
in because they wanted to help increase domestic productions and
like the manufacturing and the farmers protect them from foreign

(22:45):
competition after World War One, So they put on all
these terrorists up to thirty eight and a half percent,
and it helped build the infrastructure in the manufacturing explode
in the US. And that's what was part of the
Roaring twenty That's what kind of kick started in Okay.

Speaker 3 (23:02):
So terror's helped there.

Speaker 4 (23:03):
Yeah, and it helped bring back jobs to the US
and get jobs building in the US and taking away
competition that was coming through because the European stuff was
cheaper and stuff like that. So they had the they
went to the US farmersteries and like you have I
mean you have like the Ford Model two who started
at eight fifty a car, and by like the late twenties,

(23:24):
it was two hundred ninety dollars a car because they
were able to increase manufacturing streamline that more make it cheaper.
So terrors have a good place in trying to.

Speaker 2 (23:32):
Get a great I got a great model T shirt.

Speaker 5 (23:34):
We'll be back by the first one.

Speaker 2 (23:39):
Mount Ganali they changed to Gnale. Now going back to McKinley,
I can't believe who changed it.

Speaker 5 (23:44):
I don't know. It is McKinley racist or something like that.

Speaker 2 (23:46):
Probably probably the one of the presidents, Probably probably Obama
be my guess. I don't know if I had to guess.
But going back to McKinley, now, oh wow, And then
it makes sense if you look at McKinley, look at
his track work, and look at his think any as
a protectionist, he liked taroffs. He thinks a lot like
like Trump thinks.

Speaker 1 (24:07):
My favorite Andrew Jackson.

Speaker 2 (24:09):
Andrew Jackson was a wild man. I like him too.
I like him too.

Speaker 1 (24:13):
That's that's why I like you. You know, he got
he had an assassination with two guns and both of them misfired.

Speaker 2 (24:20):
How about that?

Speaker 1 (24:21):
That's like, you know, God's on your side after.

Speaker 2 (24:24):
This message, thanks again for joining us. We appreciate it.

Speaker 1 (24:28):
Welcome back to the Money Matter Show. My name is
Todd Glick. I'm here with Sebastian Borsini, Dylan Greenberg, and
David Sherwood. This week we came in with fears around
stickier than expected inflation slower economic growth. We then turned
to Navidio and ended the week with a clash in
the White House and it was a fun one though
we've never seen anything quite like the Trump and Zelenski
vance show that we saw on Friday. But what it's

(24:51):
gonna come out of it, what it means for markets.
We saw raytheon go up a little bit because we
might not have as much piece as we thought. But
there's still a lot a question then a lot more
questions that were formed after today on Friday than there
is answers. But there's gonna be a lot of speculations.
So you're gonna see it on the news left side,
right side. Watch the whole ten minute video. Don't don't

(25:13):
just take clips from your little silos to tell you
what they want you to hear.

Speaker 4 (25:18):
If you watch the whole thing, it's not really as
explosive as these headlines have been making it. Right, we
watched the whole ten minutes of it because we were
just fascinated that it was happening.

Speaker 3 (25:27):
Live like that. And they're like, they weren't yelling.

Speaker 4 (25:30):
They were just they were having an argument, that's for sure,
but they weren't yelling at each other and all that.
And then you get done and you see CNBC and
all or just saying.

Speaker 3 (25:37):
The yelling match. They were getting mad at each other.

Speaker 4 (25:39):
It's like they were having a conversation, a heated conversation,
but it wasn't yelling and screaming and all this yelling.

Speaker 2 (25:45):
Mans said the vance don't raise your voice in Trump,
He's not raising your.

Speaker 3 (25:48):
Voice exactly like Jady Vans has a loud voice.

Speaker 2 (25:51):
Yes.

Speaker 4 (25:52):
Is that like they weren't yelling at each other, and
it like not one of the three works Zelensky Wasn't
Trump Wasn't danced one.

Speaker 1 (25:59):
Definitely, the least diplomatic diplomacy conversation we've ever seen.

Speaker 2 (26:03):
I think is the back office dealings right out in
front of it.

Speaker 4 (26:07):
That's what I'm thinking, because like you see the aftermath
of something like that, and they always come out and
say there was not a resolution, so we will keep
talking very diplomacy and all that stuff. You don't see
the actual conversation that happened behind the doors.

Speaker 2 (26:21):
I think it's a it's it's kind of refreshing actually
to see it like that, and it makes you a
little uncomfortable because we're not used to seeing that. Yeah,
but that they were both. There were good points made,
and I have noticed the first couple of minutes of
it were pretty pretty calm, and it kind of started
to heat up with Hey, I got it. I told

(26:42):
you a little teaser in the first segment that I
have a Ford story. Henry Ford was obviously a genius
and he the first Model T dealing brought up. First
Model T had a lot of wood. A lot of
the parts were made out of wood, and so they
generated an awfully a lot of sawdust. And Henry Ford

(27:02):
was an efficiency guy, and he said, we need to
do something with all of the sawdust. Now, he was
a hunter and he was a fisherman, and he did
a lot of outdoor stuff, and they would build a
fire and cook over the fire, right, and he said,
what if I could come up with something that would
keep the fire going longer? So he comes up with
this concept of the charcoal briquette. So they develop a

(27:24):
way to make this sawdust into charcoal briquettes. And here's
the part that was really cool. First of all, that
a guy like that would do that. So they make
it into charcoal briquettes. Now, in order to do that,
they need a factory. So who does Henry Ford call
his best friend Thomas Henderson? Right, hey, Jah, I need
to mail here. Yeah. So Tom comes over and designs

(27:46):
the factory, which was beyond anyone's imagination. Ford was concerned
about if it didn't take off, if it was kind
of a flop because people weren't grilling out back, then
if it didn't take off, it could tarnish the Ford name.

Speaker 5 (28:00):
I don't know why. I'm sure stakes weren't twenty dollars.

Speaker 2 (28:02):
Then, yeah, but no, No, he was concerned with tarnish
to Ford's name, so he named it after his assistant,
mister Kingston or Kingford, mister Kingford. So there you go.

Speaker 1 (28:15):
This is another interesting Ford story that learned it. There's
something called ford Landia. You ever heard of this?

Speaker 2 (28:21):
I know?

Speaker 1 (28:22):
Ford Landia is some place in Brazil that Henry Ford
bought a plot of land in and he wanted to
make a essentially a rubber producing utopia because they needed
so much rubber for the cars and all that. So
he went over to Brazil and tried to put Western
values on everyone, and they had his schools and dentists

(28:44):
and all that. But it ended up not working and
he sold the land back to Brazil. But it's a
ghost town now. But yeah, there's an actual placed in
Brazil in the Amazon Forest.

Speaker 2 (28:54):
Speaking of ghast, speaking of ghost towns Walgrange, that's a
good segue. First cent this year, but lower on Friday
doing your bank comes out, they downgraded the stock to
a sell. They said that there is an unusually high
degree of uncertainty around the take private deal from Sycamore Partners,
and I suggested that it might be a take under

(29:16):
rather than a takeover. And you say, well, why would
they sell it for nine dollars if it's trading at
eleven dollars. Well, in order to sell all of the stock,
it's difficult. If you were to sell all of the
publicly traded stock in Walgreens at once, it would drive
the stock down to six dollars, five dollars whatever. So
if someone's willing to come in and give you nine

(29:36):
dollars for all of it, you might be willing to
look at that. Another name we've talked about a lot
on the show is First Solar. You guys got a
think you say about First Solar.

Speaker 1 (29:45):
Yeah, I mean it's is going up and down. I
mean there's not much to say on the fundamental front.

Speaker 6 (29:49):
I think not much up.

Speaker 1 (29:50):
I think it was really in technical but there's not
much up going on.

Speaker 4 (29:54):
Not recently, but I mean over the last year's had
a great It had a great last twelve months, right,
And I think if.

Speaker 1 (30:00):
You look at the price to Ernie's Race Show, it's
pretty attractive.

Speaker 2 (30:03):
Oh, it's eleven times journeys. Super's ridiculous.

Speaker 5 (30:05):
Super cheap.

Speaker 2 (30:06):
Yeah, super cheap. All the products made the United States
sheriffs don't mean anything to them in theory, right, that's back.

Speaker 4 (30:12):
Probably we own it as a firm. We have a
lot of clients that own It's just full disclosure, small
small parts, yeah, but like multiple clients ow yeah, and yeah,
that's why we bought into it because we looked at
the solar etf we noticed that First Solar was one
of the better companies that was helping the Solar ETF
be positive. A lot of the other companies weren't looked
into why we believed in it and thought that, Okay, yeah,

(30:35):
it's a domestic We made company all the parts and
everything vertically integrated and all that, which is why we
built a position in it.

Speaker 1 (30:44):
This is just a good example of what we really did.
We've had this position for over a year because when
we first initiated it was around the same one thirty
sixth level, and then we went all the way up
to two eighty, you know, And a lot of that
was because of Harris becoming a candidate and the potential
of her winning and the solar and it ran up
way too much. And that's where we took profits. And

(31:06):
whenever you see a stock run up like crazy, you
should be taking profits because there's the likelihood it's going
to hold that is not high. And and and since
then it's come down all the way back to the
one thirty five.

Speaker 2 (31:16):
Yeah, down fifty five percent. And I think the thing
that struck me about Todd not only is it cheap
eleven times earnings, but it's a it's an interest rate play.
It is, and if you think interest rates are going
to be coming down in the bond market for as
I think. So I was buying treasuries for clients at
five percent eight months ago. Now I'm lucky if I
can get four. Interest rates are coming down. I mentioned

(31:39):
the mortgage race, you todd you they were I think
you said the conforming was above seven just a couple
of months ago, a couple of weeks ago. Yeah, it's
now six and a half in dropping.

Speaker 5 (31:50):
So six and a half.

Speaker 1 (31:51):
No, it's six point seventy nine for the thirty year
Freddie Mack. And that's the you have the standard. There's
a whole criteria.

Speaker 2 (31:58):
Yeah. And again I'm not sure who who's getting six
point seven nine. My daughter got six point five. No specials, okay.
But again you have different lenders. They'll offer different rates.
The Freddie Mac mortgage rate and this is Freddy Mack
conforming loan.

Speaker 1 (32:12):
You can still have a Freddie Mac mortgage is this
is what Freddie Mac comes out with.

Speaker 2 (32:17):
I don't know whether they're on metric, okay and whatever.
I know that I've talked to two different leenders six
and a half.

Speaker 1 (32:23):
Yeah, I mean you can literally just pull up the chart.
It's called the thirty year US mortgage rate INDUX and
it tells you.

Speaker 2 (32:29):
I was the lender that I'm buddies with. He said,
I not likely can get her six and a half,
but I'll get two points on that and I'll kick
her back one of them.

Speaker 6 (32:36):
Nice.

Speaker 1 (32:36):
Yeah, because lenders can do different things.

Speaker 2 (32:39):
Well, they'd be flexible obviously, because it's like a bank.

Speaker 1 (32:43):
The bank's not going to give you the one year rate.
I'm gonna give you something different. It's always spreads involved.

Speaker 2 (32:50):
The uh, this is an interesting one. Ali Baba dropped
eight percent on Monday, reversing some of that fifteen percent
rally from last week. To stop hit you like this, Sepastian.
You know how much I love stuff like this. The
stock has nearly doubled in the last five weeks, and
this is where Morgan Stanley decides to raise it from
hold to buy. Makes sense, it makes sense. It's double
till you know, I don't think so.

Speaker 5 (33:11):
You said that they dropped nine percent on Monday. Yeah,
I'm pretty sure they came back, went up ten percent
like the following day.

Speaker 2 (33:18):
No, it's all over the place. Morgan Stanley decides after
a double that this is a good, good place.

Speaker 1 (33:23):
What do you got Salesforce reporting this week.

Speaker 2 (33:26):
That Salesforce did not do well? Did they Well, they.

Speaker 1 (33:28):
Didn't do too bad, but they definitely didn't do well.

Speaker 7 (33:30):
Uh.

Speaker 1 (33:30):
The stock kind of overshadowed by Navidia's earnings on Wednesday.
They reported on Wednesday as well, but yeah, they had
just about two point about the three percent lower after
that Ernie's report.

Speaker 2 (33:41):
Yeah, good memory. It was down eight percent for the year.
Dropped another three percent after the earnings report, posted a
fourth quarter revenue mess and gave we guidance. And it's
all about guidance right now. There's so many companies that
are coming in with good quarterly reports.

Speaker 1 (33:56):
That's the thing about Navidia is like they literally came
out and raised their forward guy items.

Speaker 2 (34:00):
They did, and there's again it was all about the margins.
It's all about the margins and and the sack is
price for Perfection.

Speaker 1 (34:07):
Company. It did really well with Snowflake. Oh, they report
on Wednesday too, but they've been killing it the last
couple and they missed like not the last quarter, but
the three quarters before that they were just terrible, terrible, terrible,
and then they really starting to get their way the
last two quarters. It seems like, what is that?

Speaker 5 (34:24):
What does that company do?

Speaker 2 (34:25):
Sales? Salesforce software, No, no analytics, snowflakes, cloud analytics, gotcha. Yeah,
they down thirty percent over the last twelve months. Like
that's the top twelve percent higher on Thursday, better than
expected quarterly results. So there are companies out there, and
I think that that strong corporate earnings the last two
weeks have kept this market from rolling over because it

(34:48):
felt like it wanted to. Ten Corrections are very very normal,
and you don't even get into correction territory until you've
gone down ten percent. At the close on Friday, we
were down three and a half half percent. We're not
even anywhere near correction. Terry, try let alone bear market here.

Speaker 1 (35:06):
And if you're really talking about the market, I mean
the equal weight to SMP was up point two on
the week right.

Speaker 2 (35:14):
And that is the market that's all five hundred stocks
given an equal weight. And we've talked before about that.
If you want to see what's really going on with
quote unquote the market, you need to look at our
sp Robert Sam Paul because that gives you a true picture.
It takes the influence of the high flying and the

(35:35):
magnificent seven out and gives you a smooth curve as
to what the overall market is doing. We're coming up
to the end of the second segment, looking forward to
the second half of the show and you guys' interview.
We'll be back with the next segment after this brief
commercial break.

Speaker 4 (35:53):
Welcome back. You're listening to the Money Matter Show. I'm
here with Dave Sherwood, Sebastian Borsini, and Todd Glick. I
got some SMP five hundred trivia for you. Dave talked
to Todd and Sebastian about this earlier.

Speaker 1 (36:04):
This we can't answer.

Speaker 2 (36:06):
This is a test.

Speaker 3 (36:07):
It's a test which an idea. Yeah, it's for the
listeners out there too.

Speaker 4 (36:10):
Over the last eighty eight years, the S and P
five hundred has averaged ten point six eight percent. How
many times has the index finished the calendar year within
plus or minus two percent of that average over the
last eighty eight years.

Speaker 2 (36:22):
Two percent of the within t of that average ten
to fourteen roughly pretty much. How many times within ten
to fourteen probably out since when out of eighty eight years,
eighty eight years, I would say twelve five times five?

Speaker 4 (36:39):
Okay, what percentage of the last eighty eight years, has
the sm P five hundred finished in the positive territory?

Speaker 2 (36:48):
Sixty eight?

Speaker 3 (36:49):
That's good, guess, seventy six percent.

Speaker 4 (36:52):
And then, out of the last eight years, how many
times has the S and P five hundred finished above
eighteen percent of.

Speaker 2 (36:58):
The last eight years?

Speaker 1 (37:00):
Eighty eight years, right.

Speaker 3 (37:03):
Now, that's about twenty percent.

Speaker 1 (37:04):
It's not the last eight years.

Speaker 3 (37:05):
Oh sorry, got this one mixed up.

Speaker 4 (37:08):
The SMP has been up six out of last eight
years it's been positive. Out of the last eighty eight years,
how many times has SP five hundred finished twenty percent
or higher?

Speaker 2 (37:19):
More times than it's been within four percent? Well, I
can't remember that what that number was, but let's say
eighteen times thirty three? Wow, that's more than I would
have expected. But see that's the problem with getting out
and getting back in.

Speaker 3 (37:34):
Well, then listen to this one. This is the last one.

Speaker 4 (37:36):
Out of the last eighty eight years, how many times
has the SMP five hundred finished down twenty percent or more?

Speaker 2 (37:41):
Five?

Speaker 3 (37:42):
That was good?

Speaker 6 (37:43):
Guess?

Speaker 2 (37:43):
Four?

Speaker 4 (37:44):
Okay, Like we always say, the S and P five
hundred the markets are up more often than not, and
these stats are just telling you that's true. And it's
like you're saying that getting out, getting in, getting out,
getting in because you're nervous. That's why you gotta know
your risk tallants and know your level that you can
invest in with how aggressive you can be so then
you can weather a storm of a ten percent down movement,
which are healthy corrections.

Speaker 2 (38:05):
That's why what you guys do with the risk analysis
tools is so so important, because you've got to find
that level where you can ride through these times because
every single market decline has been followed by a new
all time high. And I've been doing this for a
while and I have never in my forty three years
in this business seen someone get out and get back

(38:29):
in cheaper. Never. The reason for that is you get
out because you're scared. You don't stop being scared until
things are much better. When things are much better, the
stock market is much higher. You never get in below
where you got out. You don't. I've never seen that
one time. It's like Steve Winn when CBS was interviewing

(38:51):
about Las Vegas, how many people have you seen walk
away a net winner in your decades in this business?
He didn't hesitate none, none.

Speaker 1 (39:00):
Well, yeah, it's like, how many people. Have you seen
retire on gambling?

Speaker 2 (39:03):
Yeah? You all if you listen, What do you do
for work?

Speaker 1 (39:06):
I gambled.

Speaker 2 (39:07):
I can't tell you the number of people that I
talked to. Oh yeah, my brother he uh he makes
his living day trading. No he doesn't, No, he doesn't.
I'm a day trader. I never make any money ever.

Speaker 1 (39:18):
Seems like if I can't do it.

Speaker 2 (39:19):
Knowing I was talking, I was talking today. I got
a fifty to fifty chance, right. I didn't even going
to go a long or short.

Speaker 1 (39:26):
The opposite you, you'd be successful.

Speaker 2 (39:28):
To the Georgetown, the Georgia Costanza.

Speaker 1 (39:30):
Things we're talking about.

Speaker 2 (39:31):
Do whatever you're thinking. Whatever you're thinking, the exact opposite.
Had some reports from a Home Depot and the Loew's
both reported last week. Home Loves seems to be doing
a little better at Home Deepo in terms their their
attitude is a little better. Their UH forecast was a
little more optimistic than Home Deepo and and maybe unrealistic.

(39:55):
Who knows. But if you listen to the conference call
for both of them, Home d people was a little
bit more negative, and they said that that they expect
earnings in the next twelve months will decline by about
two percent. It's home Depot. They expect earnings to decline
by two percent in the next twelve months. Now, what
price earnings ratio should it? Should a stock that's declining

(40:19):
in earnings have That's always a trucussion the answer of eight.
That's the consensus over decades of this. So a stock
with a with a declining earnings probably should not have
a price earnings ratio in excess of eight. Home depos
price earning racial is twenty five. So I don't know

(40:39):
how you price the stock at twenty five times earnings
when you have declining earnings. It just seems excessive to me.

Speaker 1 (40:46):
Yeah, I mean there, you shouldn't have any pe if
you have decline.

Speaker 2 (40:49):
I hearing I hear a lot of optimistic comments about
the housing market about how it's turning around, how it's
going to be great now you.

Speaker 1 (40:56):
Have huh, I don't see it. You know, you have
a lot of analysts have not the people I'm talking.

Speaker 2 (41:01):
So nouse, you're talking to people with boots on the ground.
You're telling that people that are actually out there doing
it and seeing that that is not happening.

Speaker 1 (41:08):
He say it's hard, yes, and the profit margins aren't there.
And if you look at some of the permit the
new permit applications over the last month, they came in
lower than expectations. New home starts came in lower than expectations.
So there definitely seems to be a slowing in that housing.
I don't think it's a huge slowdown, but it's a
little bit of slowdown. And again that's why eventually we're

(41:31):
gonna see inflation come down, because housing's the biggest component
of that inflation.

Speaker 2 (41:35):
Friend of mine told me last week that a local
lender whose name is familiar to pretty much everyone. I
won't see who it is, but a year ago had
eighteen loan officers, or a real estate lender had eighteen
loan officers. Now there's two. So there's not a lot
going on out there. And if you're thinking there's gonna
be a big boom in the housing market, yeah, it

(41:55):
may be off on the horizon somewhere. Oh. In fact,
it definitely is off on the horizons, but it doesn't
doesn't appear to be im Did you see where hyms
and herbs continued there? They're we got hammered last week
after the FDA said they have to stop selling the
weight loss drugs ozempic specifically Ozempica and wogovi ends up

(42:16):
bound right, Yeah, I don't know. I guess they did
sells that bound because on their commercials you'll actually see
the little Lily label at the bottom of the screen.
I'm like, how do you get away with that? The
stock drop twenty percent on Tuesday. They did report a
better than expected quarter, but they said they announced that

(42:36):
they will no longer be selling the weight loss drugs. Instead,
they're going to do specialty compounds for weight loss.

Speaker 5 (42:43):
Drug eli Lily came out this week or they're talking
about a self paid pharmacy direct to consumer.

Speaker 2 (42:50):
Website they have that it will is right, yeah.

Speaker 5 (42:52):
And I don't know why I didn't think about this
earlier because hymns and herbs that's the same thing. But
do you have to have a script for that it
or I just go buy it right now?

Speaker 2 (43:01):
You know? What they'll have is probably the same thing
as SIMS and hers where they have doctors, right tele dooct, Yeah,
tele dooct type thing speaking of wish and go ahead,
finish your story on Lily.

Speaker 5 (43:10):
That was really it?

Speaker 2 (43:11):
That was it? Yeah. They the big thing about this
online dealers. They're going to be selling the we'll go vi.
Uh not, we'll go VI. The zep bound, a weight
loss drug for half price. We should try. And what
they're saying is they're trying to get it in the
hands of more consumers.

Speaker 5 (43:28):
I'm thinking, yeah, maybe get them hooked on it.

Speaker 2 (43:30):
I'm thinking, yeah, maybe the demand is waning a little bit.
But the stock has done really well. After it dropped
down to eight hundred and its century, bounded into the nines.
Done pretty darn, pretty darn good. But that was a
good segue to Teledoct. It's a virtual healthcare company that
got during the pandemic. The stock got to three hundred

(43:51):
dollars three hundred SEBASTIONI. On Thursday it fell twelve percent
to nine dollars and fifty cents.

Speaker 5 (44:00):
Reminds me of Zoom three hundred.

Speaker 2 (44:02):
Dollars to nine dollars and fifty cents. Reported a wider
than expected fourth quarter loss, weaker than expected revenue for
the current corner. You know, during the pandemic, I did
a teledoc thing with a cardiologist and it was pretty unrewarding,
to be honest with.

Speaker 5 (44:16):
You, I would imagine pretty unrewarding.

Speaker 2 (44:19):
It isn't it's arguably worthless.

Speaker 5 (44:23):
It's very it really is impersonable.

Speaker 2 (44:25):
Yeah, I mean he asked me how you feeling, you know,
what are your numbers from my last blood draw? And
I gave him to him and he goes, oh, okay,
it sounds like you, well.

Speaker 5 (44:34):
You're supposed to believe that he cares about you.

Speaker 2 (44:35):
You're good, you know you're good. Yeah, okay, Building insurance
company five hundred bucks whatever.

Speaker 1 (44:40):
It's kind of like why the robo advisors was a
fad in the financial advising space, because at the end
of the day, you want that personal relationship with someone
you trust when it matters about your health or your finance.
Is something that actually matters at the end of the day.
You don't want to just feel like you're just another
number to someone.

Speaker 2 (44:57):
No, it's a people business. It really is. Relationship with
your doctor, with your lawyer, with your account with your
investment advisor really important. They know what you're they really
know you, know who you are, and we go to
great links to make that happen. Hey, you know, I've
watched Warner Brothers Discovery with interest since they were spun
off from AT and T. They've done almost nothing. They've

(45:20):
gained twenty percent over the last twelve months, very quietly
jumped to eleven percent on Thursday after reporting a gain
and subscribers in a solid quarter. Kramer said the stock
is valued as a cable company, but there people are wrong.
Should be valued as a streaming company. They also do
a lot of Apple streaming content. It's gonna be interesting
to watch that stock over the next twelve to eighteen

(45:42):
months and see if you can get some.

Speaker 5 (45:43):
Mobile It's just a production company, right.

Speaker 2 (45:45):
Yeah, it's eleven I think it's eleven eleven and a
half dollars something like that, but up twenty percent in
the last twelve months.

Speaker 1 (45:51):
And Optimistice well, you know, I'll just we're coming up
about a minute and a half left. We'll talk more
after the Matt Kaufman interview. But we're really excited to
have the calum Most creator the structured protection ETFs on
the revolutionary product. We've been using them in some capacity
in ways that makes sense. If you have questions about

(46:13):
what this interview goes into, or you want any clarity
around the products, feel free to give us a call
at five two zero five four to four forty nine
zero nine. We're still doing financial plans all the time,
so it give us a call. We just had one
today where went through rough conversions someone who was retiring
early before fifty nine. So there's a lot of different rules.
Here's a really interesting one that most people don't know.

(46:34):
If you do retire before fifty nine and a half
and he misses for all employees from fifty five to
fifty nine and a half, you're actually allowed to take
money out of your qualified account as long as it's
in a ployer sponsored plan without penalties. The minute you
move it into an IRA. That's where you have the
fifty nine and a half rule. So if you are
someone who's retiring early, you have special rules. Then there's

(46:56):
public safety officials who are allowed to do this after
fifty So there's these unique exceptions that you know, most
people won't know unless you come in and actually do
the financial plan. So when it comes to cash flow,
where's money going to come from to supplement your income,
that type of stuff we actually go into analyze in
your financial plan. We'll do it completely free. Just come
in with your information and at the very least, if

(47:18):
you don't do business with us, you'll have a financial
plan you can take home with you, but at the
very most, you'll have someone that you can trust, knowing
that they'll look at for you at the very end
of the day.

Speaker 2 (47:26):
Stay tuned. We'll be back after this break with a
really interesting interview. I think you're all going to enjoy
it with I know that the guy who enjoyed putting
it together, and we'll be back right after this especiage.

Speaker 8 (47:38):
Welcome back everybody to the second Now with the Money
Matter Show. We have a special guest, Todd, and he's
going to be talking to you about the Calumos Structured Protection.

Speaker 6 (47:48):
Yes, I get what it is, Todd, Thank you very much. Okay,
is not.

Speaker 8 (47:53):
His name is Matt Kaufman, and he's he's on the
line with us from Chicago and he's obviously the portfolio
managing all of Klamos.

Speaker 6 (48:02):
And there's a lot of questions we have.

Speaker 8 (48:06):
We've been dealing with them a long time, but they
have a new product out that they've been having out
I don't know for what six months or so now
maybe a little longer longer okay, about a year. But
it's really cool because you know it kind of does
what all these annuities say they do.

Speaker 6 (48:23):
You know, hey, don't worry about the downside.

Speaker 8 (48:25):
We'll give you the upside these for you know, these
fixed indorex annuities, and you know you're capped on the upside,
but you don't de lose any on the downside. But
you gotta lock in for five years, seven years, nine years,
whatever it is to give the advisors a real big commission.
But the idea is, as we said, great idea, no downside, upside. Yes,

(48:47):
you gotta have some type of cap, but isn't it
better if it's liquid. That's what Klamos came out with.
They came out with them. You can trade them almost
every day if you wanted to buy and sell them
every day.

Speaker 6 (48:58):
They they're on your statement.

Speaker 8 (49:00):
And the cool thing is if you hold it one year,
not five years, not three years, not ten years, they
claim that you would. The worst case scenario is you
break even. And that's why we got mat on today
to talk to us how to heck you can do that.
We have an idea, Matt, well, we want to hear
it from you.

Speaker 7 (49:18):
I appreciate it. Yeah it is. It is acclaim, but
it's also true and so we can spend the next
several minutes walking through how we can deliver equity upside
to a cap Like you said, there's no free lunch
and downside risk management to the tune of one hundred
percent before our sixty nine basis point management fee that
is the cost of each of these ETFs.

Speaker 8 (49:40):
Okay, so let me ask you this. Who are you
and what are your credentials and what's your position at Klamos.

Speaker 6 (49:46):
Let everybody know.

Speaker 7 (49:48):
I appreciate that opportunity. My name is Matt Kaufman. I'm
the head of ETF at Calamos. I've been at Calamos
for two years. Prior to that, I've been in the
ETF space for about I grew up in the Chicago
land area. I started at a shop called power Shares
if you're familiar with the ETF landscape. We got our

(50:10):
exemptive relief, which is a fancy word for the permission
slip that the SEC the Securities Exchange Commission gives you
to build ETFs. We got that permission slip from another
Chicago based firm in the early two thousands who basically
said all of the good ETFs are taken. They you know,
the SMP was taken in spy, the QQQ was taken.

(50:32):
They said, we don't think there's much room for growth
in the ETF landscape, which is a funny story to tell.
You know, some twenty five years later now that there's
ten trillion dollars with a growth in the ETF space.
So we built out this smart beta type ETF world
ultimately sold to Investco. I took a bit of a

(50:52):
right turn and went over to an institutional insurance consultant
called Milliman, and we were building funds based off of
hedging strategies that we were running for large life insurance companies.
The head of the group called, He said, I want
to build funds. I have all the actuaries I need.
I need people who understand the fund business. And I

(51:14):
had just come off of building about one hundred ETFs.
So we took all of the intellectual property and the
risk management that was making the insurance world work and
we moved it. Build funds, built funds out of it,
and it worked very well. If you're a student of
the interest rate environment, and I'm going to tell you
a quick story and it'll lead us into our ETF discussion.

(51:37):
So interest rates were remarkably low back then, This was
about two thousand and nine twenty ten, right after the
financial crisis, and it was a real struggle for insurance
companies and banks to provide anything of value. You know,
at the beginning you talked about giving somebody the upside
of the SMP to a cap rate. Well, if you're
an insurance company and you want to provide one hundred

(51:58):
percent protection, up rate would have been remarkably low. The
guarantees on your variable annuities would have been remarkably low
because it was all tied to rates, and so it
really moved that space the insurance world. The banks were
having the same issues. It moved them into a risk
sharing model where rather than principal protection, they would give

(52:20):
you something less, give you a ten percent protection level,
twenty percent protection. Well, what I saw as the head
of product development at Noleman at the time is that
you could deliver that type of protection very efficiently with options.
We did not need a bank or an insurance company
in order to deliver that model. So we built that
intellectual property out. That space grew to about sixty billion dollars.

(52:43):
It's a very large space and ETF world today. When
I came over to Klamos. To conclude the story, interest
rates are much higher. You know, people are buying CDs again,
they're buying money market funds, they're looking at fixed indexed annuities,
those that come out of the grade. So we took
everything that made those types of products work, lifted the hood,
took everything we liked about it, left the chassis on

(53:05):
the curb, and built an ETF line that now delivers
capital protection over a one year outcome period and you
get the upside to the S and P to about
eight percent, maybe seven and a half eight percent, and
you'll know exactly what that cap rate is before you
buy in. And then we have Nadjak one hundred exposure,
we have Russell two thousand exposure, which is a little

(53:27):
higher cap because it's a little higher volatility. And then
we have Bitcoin. We have a product line that delivers
protection on bitcoin as well, and you get pretty good
cap rate because of the volatility of that asset. All right,
so that's what we've done.

Speaker 6 (53:39):
All right, let's go let's talk a couple of things.

Speaker 8 (53:42):
So the difference is people are used to on the
hearing annuities and obviously cap rates okay, how much you
can make on the upside. What people don't realize on
the annuity pot is that capwright can change over the
three five, seven ninety period and they're not locked in
with it.

Speaker 6 (54:02):
So if interist rates move, the cap weight was moving.

Speaker 8 (54:07):
And I thought that was a very very tough part
to pill the swallow in this industry when you try
to predict what's going to happen, and you're right, and
and and the rates come down and the markets come down,
but yet now you can't make as much when it
turns and goes the other way.

Speaker 6 (54:23):
And I had a real problem with that.

Speaker 8 (54:25):
And that's why you know, there's a space for annuities,
but it's a small space in my opinion, do it
managing money for over forty years because the and I
know they make billions of dollars, Okay, don't get me wrong,
and I know that insurance injuriousy doesn't. But the reason
they're able to sell it, as we both know, Matt

(54:45):
is real simple downside protection.

Speaker 6 (54:49):
And you can make a little bit to the upside.

Speaker 8 (54:51):
And they try to tell me to make about four
or six percent, which half the time they don't even
make that. All right, We have people in some of
those fixed indexinuities on these wonderful uh index is what
people don't even realize and really not attached to the index,
you know, and then and there's so much more involved.
That's what I loved about you guys coming and I've

(55:12):
talked to people about coming out with the product that
you've come out with.

Speaker 6 (55:16):
I didn't talk to you. I took talked to the
insurance company and said, why.

Speaker 8 (55:19):
Can't you come out with something like this that actually
works for people, and we don't have all these other
expenses involved, which you know everybody else does. So with
that said, does the cap change the capwright change on these.

Speaker 7 (55:34):
I'll answer with one word, no, the cap rate does
not change. Once you're locked in for that year, the
cap rate will change your tier, but you'll know what
that cap rate is before you buy in.

Speaker 6 (55:44):
I understand.

Speaker 2 (55:45):
Yeah.

Speaker 8 (55:45):
The other and so people understand what he's saying is
he's a one year, one point in a year to
one point in the next year and nothing changes. Okay,
but if you do another one a new role, it
obviously there's a new cap right.

Speaker 6 (55:58):
We know what they are each time.

Speaker 8 (55:59):
And the other thing you said that's important, the more
volatility like NAE seconds more volatility, say be instead of
the S and P, those capoys could be higher.

Speaker 7 (56:10):
That's right, And you know there's a reason that the
insurers would never do this. That was part of this
group called the Alliance for Lifetime Income. It was a
what I would call the got Milk campaign for annuities.
It was about, you know, twelve of the largest life
insurance companies in America and they would throw throw money
into a pool to enhance and improve the perception of

(56:31):
annuities around America. Well, they did a bunch of survey work,
and what they found is that, like you said, investors
love the idea of protected growth. They like protected income,
protected growth, but they did not like the features that
you just described as the annuities. They didn't want to
be locked in for seven years, they didn't want early
exit fees. Well, the insurance companies is never going to

(56:53):
not build an annuity. And so you know, they spent
a bunch of money to try to improve the perception
of annuities around America. Reality, what people were asking for
was a better mouse trap. They were looking for protected
growth in an etf rapper. And so you know that's
what I took away from that process and being part
of that group, and so it was able to come
to calendos and deliver exactly on what people were looking for.

(57:15):
So that's largely why we built these.

Speaker 6 (57:17):
So let me ask you this, Matt, how long you've
been in the business.

Speaker 7 (57:20):
Yeah, I've been in the in the ETF business about
twenty five years.

Speaker 8 (57:22):
Okay, good. So why do you think advisors broke is
whatever sell a notities to clients over the over a
product like this.

Speaker 7 (57:35):
Well, I think before these ETFs existed, there really was
no other choice. There was no opportunity to deliver protected
growth outside of the insurance wrapper, and so that it
really was the method of choice for the last thirty
or forty years. If you wanted protected growth, you largely
needed to go through a bank or an insurance channel.
You don't have to do that anymore, and so through

(57:57):
the ETF rapper you can get for protected growth. You
can get one hundred percent protection with the upside to
the market, and you don't have those lock up periods,
you don't have the high fees, the ill liquidity. You
can access it through the tax efficient ETF wrapper now
and the benefits are remarkable when you put them inside
the ETF wrapper. So I think it's more of access game.

Speaker 8 (58:19):
It's two reasons that commissions. People look that take up
front commissions on annuities are driven by the commissions.

Speaker 6 (58:29):
Okay, that's number one.

Speaker 7 (58:31):
Yeah, there's that too. I don't disagree with you that.

Speaker 8 (58:33):
Okay, I just tell it the way it is. I've
been doing this way too long. I just tell people
the way it is.

Speaker 6 (58:38):
I appre Okay.

Speaker 8 (58:39):
Number two, simplicity. The story is so much easier to
tell that, all right. That's why we personally we manage
money here. Okay, we've had protection plans using options for
a very long period of time. What you're doing here
makes all life simpler. Okay, I'll put it that way.

(59:02):
We were able to protect the downside about ten to
twelve percent, all right, so with more of a buffer
with unlimited upside, which was nice in the in the
right market. Yeah, but you still lose because of the insurance,
which we know. The nice thing about this is we
don't have to worry about it. And these are one
of the reasons that I like you doing it. So
let's talk about how you know, maybe some people understand

(59:25):
obviously we understand in simple terms, how do these actually work.

Speaker 7 (59:32):
Yeah. One of the easiest ways we can explain this
when we're in meetings is we just say, if I
pretend like I give you one hundred dollars, we can
use one hundred percent of the portfolio value and recreate
the structure. So to recreate one hundred percent protection on
the S and P five hundred over a one year
outcome period, it's three options layers. So the first layer

(59:56):
is a participation layer, and that's going to take up
most of your one hundred dollars. It's going to cost
about ninety eight dollars. This might be as deep as
we get here on the call today, but this is
a zero strike call, or it's an option that replicates
the price movement of the S and P five hundred
at the end of the one year out come period.
So that costs about ninety eight dollars. The next layer

(01:00:19):
is we're going to buy protection. So we're going to
buy an at the money, put at at the money
to give you one hundred percent protection. That's going to
cost about four dollars, or about four percent of the portfolio.
So if you're following along, we've spent ninety eight on
your participation layer. We've spent four on your protection layer,
so we've overspent. We spent one oh two. I only

(01:00:41):
gave you one hundred. So the next layer is to
sell off some upside. We have to sell off enough
upside to collect two dollars worth of income so that
that whole package equals one hundred dollars. So I'm going
to sell an out of the money call to collect
two dollars worth of income from selling that call, and
whatever the strike price is of that sold call is

(01:01:04):
at the time I enter those options, that's going to
determine your cap rate. And so I have a fully financed,
fully protected portfolio. I have three options positions that I'll
expire at the same date, same time, one year from now.
That options layers all works to be the NAV the
net asset value of the ETF, and then that sets

(01:01:28):
over the course of time we trade in the market,
and it ultimately determines the value of the ETF every day.
So if you buy in at the beginning, you can
get that outcome. You buy in on day one, you
get one hundred percent protection, you get the upside to
the cap rate. But then because it's an ETF, any
day the market's open, you can know what your upside is,

(01:01:48):
what your downside protection level is, and how many days
are left in the outcome period. So you can go
to our website. Yeah, I'll stop there.

Speaker 2 (01:01:55):
You're good.

Speaker 8 (01:01:56):
I was gonna okay, So say it comes out of
twenty five dollars, right, and the markets go down and
it goes from twenty five to say twenty four to
twenty Well, let's just say twenty four for simple terms, Okay,
if I buy it at twenty four, am I am
I buying in for a guaranteed profit to twenty five

(01:02:17):
or it's twenty four starting all over in a different day.

Speaker 7 (01:02:20):
If you were if you were able to get in
at twenty four dollars intra period, that would be a
great trade for you because you would appreciate to twenty
five over the rest of the outcome period and you
probably won't fall that much.

Speaker 6 (01:02:32):
No, no, but but I put twenty four. I've seen it.

Speaker 8 (01:02:35):
I mean, obviously he goes up, but the put options
are going to go up and you're gonna lose on
the call options faster, so it's not going to go
down as much. And it depends when it happens too
during the period of time. But yeah, if it went
down to twenty four seventy or something like that and
I bought a twenty five, I would add to it
because now I'm guaranteed even an actual return on my money.

Speaker 1 (01:02:56):
Yeah, for those of the follow if you're buying in
a blow the knob, you're actually in creeeing the protection
level because then there goes from one hundred to higher protection.

Speaker 8 (01:03:03):
Well and simple and simple terms when I'm trying to
get across to our listeners. All right, Calamos has come
out and they've been around a long time, okay, with
a product to compete with annuities.

Speaker 6 (01:03:20):
All Right.

Speaker 8 (01:03:21):
It gives you the guaranteed downside with the upside to
a wherever it's going to be. We know it going
in if you stay one year into it. The beauty
of it, which you cannot do it an annuity. If
it goes down in between, you can buy more. If
it goes up and you want to get out, you

(01:03:42):
can get out. That's the beauty of having an ETF
versus a locked in ill liquid uh annuity.

Speaker 6 (01:03:51):
Okay, And here's the wonderful part.

Speaker 8 (01:03:54):
There's not all those upfront seven percent eight percent commissions.

Speaker 6 (01:03:58):
That you have to pay to somebody to get an annuity.

Speaker 8 (01:04:01):
Now, we try to do odds all the time, just
like we do management on a fee of a fee
based business as an r A. But we know there's
a lot of people that just sell those We understand
the business, guys, we're part of managing money. The reason
I have met on the phone is I wanted to
explain what's going on now. I wanted to explain very simply,

(01:04:25):
what do we saw.

Speaker 7 (01:04:29):
Yeah, that's good, that's a good question. So this is
an ETF. Just like any ETF, there are risks associated
with the investments. We've solved a lot of the risk
that you might be concerned about. You know, you think
of credit risk that might be tied to an annuity
product or structured product from a bank, whereas here there

(01:04:50):
is no counterparty credit risk. These options are all the
underlying investments, and those options are all centrally cleared by
the Options Clear Incorporation. It's a financial market utility deemed
too big to fail, so the federal government is backing
the Options Clearing Corporation. The other consideration would be getting

(01:05:12):
called away on your options. We've solved for that risk.
As well. These are all European style options, so your
package cannot get called away. You own that option package
as long as you own the etfuh. There's tax efficiency there.
If you were to buy capital protection and any other wrapper,
you look at the annuity, you look at capital protected

(01:05:33):
notes or bonds, those all expire and then you pay
ordinary income rates and expiration. Here we use equity options
that can all grow tax deferred, and so if you
sell after holding for one year, you'll pay long term
capital gains rates. So there's a tremendous amount of tax
efficiency there. If there's a risk, it would be you

(01:05:54):
know that if the market runs up and the NAV
you know it's these our twenty five dollars. Example, if
the NAV goes twenty six dollars and you buy it
twenty six, well, now you have some downside risk. You
have some downside risk of AV going down to twenty five.

Speaker 8 (01:06:08):
So they if you buy this at twenty six when
you guys come out with new ones almost every month,
that advisor should be shot periods. Okay, because he's an idiot.

Speaker 7 (01:06:21):
Well, I give you an example. So let's say let's
say you're you're one hundred days left in the outcome
period and the market's up, you know, twenty percent, and
you still have three percent left to go in your
cap rate. That might be a time to buy in
because the market could fall ten percent and you'd still
make three. So you know, we have some some buying

(01:06:41):
opportunities like that. Cp NS is an example of one
right now. That's a NASDAC series that we launched in September,
and you know, right now it's the market's flat. CPNS
is going to return about four percent. So just a
trade idea that we're seeing happen. But yeah, so I
wouldn't I wouldn't be too puck to shoot someone in
that area.

Speaker 8 (01:07:01):
Well, not that yet, but they're still looking at the
situation that becomes more complicated as they buy into twenty
six and watch it to twenty five, depending on how
much money they can put it.

Speaker 1 (01:07:10):
It actually leads us to one of our listener questions
and Dylan, well, I ask it because you have also
a product of the CPSL, which is a ladder product
of all these structured protection ETFs. And that's kind of long.
What the question was.

Speaker 4 (01:07:22):
Yeah, we had a listener coming and ask us if
he buys into CPSM on May first, twenty twenty four
at twenty five dollars a share, and the cap rate
was nine point eight one percent gross. So the max
gross price that he can receive is twenty seven point
forty five. So if during the year before April thirty,
if the twenty five it hits twenty seven forty five,

(01:07:43):
should he just sell? Can it go higher than that
or should he hold it to two the year long
at April thirtieth.

Speaker 7 (01:07:51):
Yeah, that's a great question. That performance and that camp
is going to be delivered over the outcome period. So,
as you said, cpsm's camp is nine point eight one percent,
and right now you would have captured about eight percent
of that, So you still have about one point eight
percent left to go, and you've got about sixty four

(01:08:12):
days left to do it. So the S and P
five hundred is up eighteen percent since May first of
twenty twenty four, CPSM is up eight percent, and so, uh,
some people buy, Some people hold that and they just
collect that, you know, remaining one hundred and eighty basis points,
and the other some folks are actually buying in to
CPSM right now because they think I don't think the

(01:08:34):
SMP is going to fall more than eight percent over
the next sixty days, and I'm going to scrape that
eight hundred and eighty basis points and that's a pretty
good annualized return for me. There's no such thing as
a free lunch, but this is a lunch that's kind
of already been paid for.

Speaker 8 (01:08:48):
Well, going back to what we're talking about, you know,
if you, if you, if you say if you, if
you get into that, you tell people no downside risk,
and you try to get that extra one to two
percent because oh, it's not going to fall ten and
it does. Then you're trying to out explain yourself.

Speaker 2 (01:09:03):
You know.

Speaker 8 (01:09:04):
One of the things that I wanted to bring up
to the people is, you know, everyone hears options and
they all think it's risky.

Speaker 6 (01:09:11):
Right.

Speaker 8 (01:09:12):
I've been doing options, Matt since nineteen eighty five. I
started believing or not. I went to the Chicago options
floor when the S and P one hundred first came out,
and that's how That's how I learned how in the
pits on how to learn it with people I knew,
I said I want to learn this, and I put
programs together on selling options to retail people. In the

(01:09:32):
eighties from the cell side, just like they did on
the and I've been doing it ever since. Now we
use the S and P five hundred to do it.
And yeah, I'm not saying it's not a little bit
aggressive the program I'm doing. But options protect people. And
we talk about it all the time on how to
mitigate risk in portfolios that you don't want to have
to sell off things you've got high, high appreciated stocks.

(01:09:54):
Use options. But most people don't know options. One, A
lot of firms don't let them use it, to Noah
wan to spend the time to learn them. And number three,
even if they do, they're complicated enough that if you're
not using them, you're not going to understand all the benefits.
So to me, I look at it, Hey, we do it,
we understand it. This works nicely. Now I use guys

(01:10:15):
like you that I've taken it to the next level.
Make my life a little bit easier with the products
that I don't have to design individually for everyone. They're
already designed for us. Well, I'm giving them the upside,
but they're giving it the protection and they're only one
year and the liquid that.

Speaker 7 (01:10:31):
People like I agree and you know I was. I
was taught options probably from some of the guys that
you work with in the pits in the in the eighties,
So we probably have a lot to catch up on there.

Speaker 8 (01:10:42):
If you think I remember them, you're out of your mind.
I don't even know if most of them are still alive.
I was like probably twenty five years old at that time.

Speaker 7 (01:10:52):
Yeah, I get it. Well, Yeah, there's two ways to
think of options. There's leverage. There's you know, the risky
part of options, which is what most people think of
the speculators. And then there's guys like us. There's the hedgers,
the risk managers, and we're building things that are a
lot of times safer than your s and P five
hundred exposures.

Speaker 8 (01:11:11):
Hang on, we gott hang on. We're gonna take a
short break that we're gonna come back. Hey, I hope
everyone's listening and understanding. You're gonna have questions. We don't
expect you to understand the whole thing, but we do
appreciate you.

Speaker 6 (01:11:21):
Listen.

Speaker 8 (01:11:22):
We'll be back with Matt. Just hold on, take a
short break. Thanks for listening.

Speaker 6 (01:11:28):
Welcome back, everybody.

Speaker 8 (01:11:29):
We still have Matt Kaufman on the phone and we're
gonna I've been told we got we uh, we didn't
finish question number two, So we're gonna do that, and
then we want to talk about a couple of the
products klum most has also.

Speaker 4 (01:11:39):
Yeah, the other part of that question was, is there
any benefit of owning the lattered ETF as opposed to
owning a blend of the various monthly offerings.

Speaker 7 (01:11:48):
Yes, CPSL is going to be a laddered approach, so
we just own all of the underlying SMP five hundred
protection ETFs. A lot of advisors like that because it
gives them a single ticker solution. It gives you a
highly hedged experience. It's about ninety eight ninety nine percent
protection over time, and what you end up with is

(01:12:11):
diversified exposure. You get diversification of the cap rates. So
we see people who just, you know, say, I don't
really care about the precision of the defined outcome. Just
give me something that's going to protect me over time.
CPSL is the solution there. But for those who want
to know, okay, what's what is my cap rate nine
point eight one percent over the next three hundred and

(01:12:31):
sixty five days, then you'd want to dive into those
individual series and buy one of those.

Speaker 8 (01:12:37):
For you, and I think also Dylan, it's depending on
how much money is in there. You know what we
do with some accounts that don't have as much money
to diversify, so it's better to use.

Speaker 6 (01:12:47):
One instead of going yeah, that makes sense. Yeah, so
we'll go for the whole thing in one part.

Speaker 8 (01:12:53):
All right, So coming back to let's talk about chy
okay Kalamo's High Yield and Income fun which is convertible
bonds and high yield funds. If anyone looks at that fund,
it's been around since two thousand and two. The dividends
of that is paid off is probably averaged somewhere around
ten percent the entire time. And the question is is

(01:13:13):
how does it do it?

Speaker 7 (01:13:16):
That's a great question. So just for clarity, HY is
a closed end fund, so for for listeners and ETF
exchange trade fund can create and redeem shares of the fund.
They can create new shares. A closed end fund, you know,
different from an opening fund where you issue a set
number of shares and then those trade in the market.

(01:13:38):
There's some advantages to closed end funds over exchange traded funds.
You know, if one of those advantages is that a
closed end fund can strategically use leverage you know, typically
around thirty percent or so, and that allows the fund
to enhance the yield potential in a way that a
lot of individual investors might not be able to replicate

(01:13:59):
on their own. Again, and another use of leverage facilities
or options there, but I really like hy. You know,
the fund has a focus on convertible securities, provides what
I would call kind of a best of both worlds approach.
You get bond like income with equity upside potential when
those convertibles perform well. If you're familiar with a convertible

(01:14:21):
price track, it ties a bond, a corporate bond to
a call option. So when the company is doing well,
you look a lot more like the stock value, and
when that stock value is retreating, you fall into the
bond territory and you look a lot more like the
bond of that company. And so you know, as it
closed end funds CHY can maintain a really stable asset

(01:14:44):
base without having forced selling during market downturns, and so
it allows managers to take a long term approach. It's
a great tool for financial advisors for generating meaningful income
spent around since two thousand and three, and cal Most
is the largest convertible bond manager in the US, we'd
be number one globally. Allan has that leg on us

(01:15:07):
by just a little bit, so we're trying to take
back that spot from them.

Speaker 8 (01:15:11):
But I've been one way or the other, been part
of hy since it's come out in the early two thousands.
I've seen it drop from ten cents a month dividend
to eight and a half percent dividend and that was
twice pretty much over the time. That was after two
thousand and eight and I think it was two thoy

(01:15:31):
and eighteen or something. I went, I went, I looked
at every single month. It pays monthly, and I think
out of that time we missed four dividends in two
after two thousand and eight, like the beginning of two
thousand and nine. I think it was one or two
other times. Other than that they have paid dividends every
single month. Now, I've seen the price because of the

(01:15:53):
closed then fun go from premium to discount, and I've
seen a drop from ten to elevenage well bucks all
the way down in two thousand and eight to six
and a half or so five and a half, and
then the next year we rallied all the way back
to thirteen fourteen dollars, and then then in the pandemic
it fell down to eight and a half and then

(01:16:14):
reinstated the dividends again.

Speaker 6 (01:16:16):
So let me ask you this, what is the cause
of that my feeling?

Speaker 8 (01:16:20):
What I look at it is when people are selling
everything and interest rates are going higher, liquidity issue becomes
a problem in the clothes that fund because everybody wants
to come out and there's not enough of them, so
they just let the price drop and it brings it
to a discount.

Speaker 6 (01:16:34):
Is that relatively right, Eve or not?

Speaker 7 (01:16:38):
You know? Unlike an ETF which has an arbitrage mechanism
that keeps the nav really tight, you know, a closing
fund has can trade at a premium or a discount
to its netsset value because again it's that closed block
of shares. But you know, over I think historical average,

(01:16:58):
we've been at about a three three six percent discount.
But over you know, longer periods of time, what you'll
see the fluctuation, Like you said, it's going to be
based off of interest rate environments. So you talk about oh,
wait when interest rates are falling significantly, distribution sustainability perceptions,

(01:17:18):
you know, it can it doesn't even have to be
an issue. It can just be a perception of an
issue that might cause a tendency to trade at a discount.
But largely closed end funds tend to trade at a
little bit of a discount to their net asset value,
and so's that's been a historical attribute of closed end funds.
We have actually an ETF that tries to capitalize on

(01:17:41):
that anomaly. A CCEEF is an ETF that holds other
closed end funds that are trading at discounts that we
think have appreciation potential. So that pays about an eight
percent monthly distribution but then also has capital appreciation potential.
It's been in the market about a year, and I

(01:18:01):
think it's the top performing eat of clothing phones right now.

Speaker 8 (01:18:05):
Well, Matt, it's always easy to do it when you're
in it for a year because you don't have as
much money in there, you know that.

Speaker 1 (01:18:10):
Well, to be fair, they did you know that, Matt, Matt,
you have this as a separately managed account for five
years before that.

Speaker 7 (01:18:17):
Right, I'll let you do my bidding. Former year you
were absolutely right.

Speaker 8 (01:18:23):
Hey, obviously, we we always were pretty straightforward with everybody.
We always want to be transparent with people. Guys, there's
always risk in everything you do. We tell you that
from the beginning of the show. We tell you all
the things. But there's understanding the risk and where it's at.
I mean, the thing is is when you're dealing like

(01:18:44):
with the first product we're talking about, where there's options,
where you got put options and you're selling the stuff,
you have a cap what would cause that to blow up?
You know, like no one thought anyone would go out
of business? Okay, well, well and will come but they did.
What would cause that the blow up?

Speaker 7 (01:19:05):
The things that could cause you know, a closed in
funds to blow up, I would say they are large
systemic issues. You know, maybe there's a corporate default way
that hits investment grade corporate bonds. So it's it's the
things that you would think about that would impact corporate
you know, corporations in general. And so if if their

(01:19:27):
corporate bonds went bad, or if their convertibles went bad,
that would be a disruption event. Credit market freeze, really
sharp interest rates spikes, you know, we saw.

Speaker 6 (01:19:38):
That, but that's temporary. That's temporary. I've seen that temporary, right, right,
You guys do a great job.

Speaker 8 (01:19:45):
I don't even know how you have all of one
hundred something type of bonds companies that are in there,
convertibles and the others which reduced risk, you know, all
the good I.

Speaker 7 (01:19:55):
Think that, Yeah, I think that's what I'm saying. Those
are It has to be a broad systemic problem that
we have a lot of other problems other than you
know hy At that point.

Speaker 8 (01:20:04):
It has to be well, even in eight it dropped
the five six bucks and the next year was back
to twelve bucks.

Speaker 1 (01:20:10):
Or so because they fixed the stuff, and everyone out, well,
that's what.

Speaker 7 (01:20:13):
We're in it, right, And if you're tied to convertibles,
then that's the scenario where you're going to start looking
like the performance of the bond. So all of your
equity exposure is gone. Do you move down the curve
and now you're tied to the bond right exactly?

Speaker 8 (01:20:28):
And I remember buying at the low price it was
fifteen sixteen percent, and they said, you know what, the
only if these things go to zero, it's because they
haven't fixed our country and nothing's going to matter anyway.

Speaker 6 (01:20:40):
You know because if that's.

Speaker 7 (01:20:42):
Why we Yeah, I mean, that's why you have financial
advisors to help you take a long term perspective and
take advantages of fire sales like that. There's a phenomenal opportunity.

Speaker 6 (01:20:53):
And it's happened so much. I mean there was a
lot of them.

Speaker 8 (01:20:56):
I remember Ford convertible too, they got Dot door a
dollar fis.

Speaker 1 (01:21:00):
Where do you see the future of these structured investments
heading and where we see more innovation with Calumbos, anything
different or what do you see on the horizons?

Speaker 7 (01:21:09):
Yeah, absolutely, you're going to see a lot more from us.
One of the we talked about convertibles and structures. One
of my favorite ETFs that we've been seasoning a track
record in is kN QCA and Q that has a
ninety percent bond floor and then we spend ten percent
and buy options on the NASTAC one hundred index and

(01:21:30):
so that has performed very well over the last year
as well. So there's going to be a lot more innovation.
If you look around the world, a lot of families
invest their money in a structured way, largely because they
go through the banks to do it, and the banks
in turn sell them structured products and insurance products kind
of like we talked about at the beginning. In the
United States, people use financial advisors, and those advisors largely

(01:21:53):
didn't have these types of tools available to them over
the last several years, especially in the RA segment, and
so rias that want to do you know, right by
their customers charge of fee for their services. They don't
want to use expensive products and the lock up periods
and high fees, and so we're seeing a massive turn
to structured ETFs for those types of investments. And we're

(01:22:15):
just getting started there. We've just scratched the surface. I
think it's going to be I don't say this lightly,
but I think it's going to be a trillion dollar
industry over the next ten to fifteen years.

Speaker 8 (01:22:25):
And you know what's going to cause it then starting
to look more and more into the annuities, and it's
going to be harder and harder for people to sell
those and and especially with the costs, and people are
going to look elsewhere. And if more people become ri
as registered investment advisors on feed based business, they're going
to look at this and go, why am I even
screwing with that other stuff?

Speaker 2 (01:22:44):
You know?

Speaker 8 (01:22:45):
And then and it's gonna be good. I mean, I
like innovation. I do, and I and I and I've
always liked your company. Uh, and I think that you've
done a great job in coming out with products that
are good for for clients. And uh, you know, I
appreciate you coming on and being part of this and
you know, and letting everybody know a little bit how

(01:23:07):
this all works.

Speaker 6 (01:23:07):
I got one last question. Okay, options.

Speaker 8 (01:23:12):
If anyone's familiar with options, you obviously are just using
the listed options that you find on the on the
screen when you pull it up, and that's you you're
going and you're getting these created for you, right.

Speaker 2 (01:23:27):
Yeah.

Speaker 7 (01:23:27):
So we use what are called flex options, and it's
just a fancy term for customized exchange listed options. So
we can customize the strike prices, the underlying reference assets
that we've talked about, S and P, Russell, NASAC, Bitcoin,
we can we can identify all of that and it's
a little bit in the weeds, but the this is

(01:23:49):
a big point. We make sure that these options are
European style so that you cannot get called away. The
other style is American style. It has nothing to do
with their country of origin. It's just the the term
that they use. American style options can get called away.
And if you were to try to do this yourself,
you can only use American style optionss if you use
spy or cues. So we can use spy and ques

(01:24:11):
options that are European style through the flex markets. Those
all get shopped out to market makers. They give us
their best pricing on those options. Whoever wins the auction
gets that cap rate that sets the course for those
options over the next year, and then they do trade
on CBO and they're centrally cleared by the Options Clearing Corporation.

(01:24:32):
There's no backing of a bank or an insurance company,
there's no counterparty credit risk, and so there's a tremendous
amount of liquidity and safety here in the products that
we've built.

Speaker 8 (01:24:42):
Right, And that's important because you know, I mean, not
a lot of people understand the difference between American and European.
I love the European ones because you don't have to
worry about coming in one day and they called you
or put you the stock before exploration. Obviously I need
to and you know, and again I just want to
emphasize to people that it is absolutely imperative to understand

(01:25:06):
that options can be very speculative if that's what you're
use them for. But options can do so much to
mitigate risk, to to put portfolios together by going ahead
and giving you growth and opportunities without having a sea
you go to zero. It's the only way to do it,

(01:25:27):
and I get it. A lot of people don't understand it.
I don't expect my clients to understand it as much,
but advisors should understand this, and most don't understand that
this or this product, and I think they're missing out
because it's not all just pure vanilla out there.

Speaker 6 (01:25:43):
There's ways to mitigate risk. And everyone that's listened to.

Speaker 8 (01:25:46):
Us for the last five ten years understands we're always
about mitigating risk.

Speaker 6 (01:25:52):
Markets go up, but.

Speaker 8 (01:25:53):
Don't forget sometimes they come down, and when they come down,
you want to be in a position that your portfolio,
the whole thing, isn't participating on the downside.

Speaker 6 (01:26:03):
So that I want to thank you very much for
being part of this.

Speaker 8 (01:26:07):
I hope we can UH talking to maybe coming out
with one of our big workshops that we do. Then
we have over one hundred and some more people show
up and UH and we'll put you up and play
some golf with you.

Speaker 7 (01:26:18):
Oh, it'd be my pleasure anything to get out of
Chicago winter.

Speaker 2 (01:26:21):
So I'm in all right.

Speaker 6 (01:26:23):
Last question, thanks, Did you have a bob Mitzvah? Did
you have a bar Mitzvah?

Speaker 7 (01:26:29):
I know I did not.

Speaker 8 (01:26:32):
Everybody I know in Chicago that worked out the exchange
with Jewish and had bar mitzvash.

Speaker 7 (01:26:38):
We we're from. We're from a little little Bible pocket
out and wheat and so we were.

Speaker 2 (01:26:43):
Yeah.

Speaker 7 (01:26:43):
I appreciate the Old Testament, but we didn't do apartments.

Speaker 6 (01:26:45):
But there you go, buddy, you have it. You have
a great day. Thank you for being part of our show,
and uh, we'll speak to you soon.

Speaker 2 (01:26:52):
All right, figure, all right, welcome back to the Money
Matter Show. We're live now. Hope you enjoyed that interview.
A lot of good up there. If you have any questions,
please give us a call five choose zero five four
four four nine oh nine, or you can write to
us Sebastian.

Speaker 5 (01:27:06):
At contact at Greenberg Financial dot com.

Speaker 1 (01:27:09):
Right, good job dad, yep, Well, if you have more information,
we always have our TV shows that air every Sunday
at nine thirty in the morning.

Speaker 5 (01:27:20):
On Saturdays, we have a six thirty I was saying
TV shows.

Speaker 1 (01:27:23):
I'm sorry, yeah, saying TV show Sunday morning and Sunday night,
and then you can go into your Saturday show, Saturday
radio shows six thirty am, eight am, eight thirty am,
eleven AM, and eleven thirty am, eight and eight thirty am.
Sometimes you'll get our estate planner here Jonathan Sabilia.

Speaker 2 (01:27:40):
And the bottom line is, if you go through a
weekend and don't hear from Greenberg Financial, something's wrong.

Speaker 5 (01:27:45):
Something happened.

Speaker 1 (01:27:46):
Probably it probably it's probably because you didn't listen.

Speaker 2 (01:27:49):
That could be.

Speaker 1 (01:27:50):
We have the content. We got the weekly market updates
on Friday, we got the Saturday shows on Saturday, and
then we got the Flagships show Sunday as well as
our TV show. I mean, hire weekend. You can get
a full load of us and then call us on Monday.

Speaker 2 (01:28:03):
Just go for it. We're here for you. Oh absolutely,
and education is our number one thing.

Speaker 1 (01:28:09):
Well, let's run through the markets because we just had
that good interview. The Dow was up point nine percent
on the week, The SMP was down one percent, the
Nasdaq was down three point five percent on the week.
The Russell two thousand was down one point four percent,
and the equal weight to SMP was actually up point
two so we see that divergence where the actual market
it finished the week up and that was largely because
of the last fifteen minutes of trading. We saw a

(01:28:29):
huge search higher almost out of nowhere. But it was
a very volatile session on Friday and probably left more
questions than answers heading into.

Speaker 2 (01:28:37):
Next week and down down month of February finished the
month down one point four percent, gave up about half
of January's game. March historically is a pretty flat month.
Let me rephrase that is a very typical month, average
return point six percent.

Speaker 1 (01:28:53):
You're two for two on seasonality so far this year.

Speaker 2 (01:28:56):
Season now, it's been good.

Speaker 1 (01:28:57):
Two for two.

Speaker 2 (01:28:59):
You gotta pay ten seasonality. Like I always say, I
always learned, Like I always say, it's just a suggestion.
History does not necessarily predict the future, but it as
we've seen. Right.

Speaker 4 (01:29:12):
Yeah, we'll see if investors get skittish next week because
Trump is going to implement the twenty five percent tariffs
on Canada and Mexico. It was that March fourth, Yeah,
March fourth, and increase the duties on Chinese goods. So
we'll see if investors get skittish or nervous, wet already
priced into the markets because I was announced last week, and.

Speaker 2 (01:29:32):
I've had a number of clients this past week ask
me if the weakness in the market was related to
the political uh events in Washington, and it's not. It's
not really what's happened. What's happened over the last week
or so in the market is there's with Walmart's announcement,

(01:29:52):
there's this growing concern, rightfully or wrongfully, that all of
this mathive day I spent, I mean that's been driving
the market might not have been necessary. And then the
market gets in those moods from time to time.

Speaker 4 (01:30:07):
Well, and it's I mean, the markets are hitting all
time highs this whole year, so people are just starting
to get a little nervous of like any news could
just be time to sell and take profits and get
more cash raised. So that's part of the reason you
see these swings out.

Speaker 1 (01:30:19):
I thought it was interesting. My sister is an la
right now, learning about stocks and bonds, and she says
she hates hates stocks and bonds doesn't make no sense,
but she's like, what makes the stock market go up
and down?

Speaker 2 (01:30:28):
Right?

Speaker 1 (01:30:29):
And I you know hear this question a law. As
a financial advisor, we hear from our clients all the time,
why is the stock market going up or down today?
And you can always find a reason, and financial media
makes a business out of it. They will tell you
every single day why it's happening, what's going on.

Speaker 2 (01:30:41):
They have to, But it.

Speaker 1 (01:30:42):
Doesn't actually work like that. And I think if anything, like,
if you look at what makes the market go up
or down, it's look at a pie and maybe twenty
percent will be because of interest rates. The other twenty
percent is because one company reported really good earnings and
it's spreading out for euphoria into the rest of the market.
Maybe another twenty percent is the president and what he
just did. Another twenty percent is the latest economic figures

(01:31:04):
that came out. But how those all interlate to one
another actually is what made the market go up or down.
It's not one thing. It's very easy to say one
thing and it gets the buzz going and it's it's like, okay, yeah,
Trump did this, and that's why I went down. And
it makes you happy at night because it's very simple.
But that's not how the markets work.

Speaker 2 (01:31:21):
No, No, And there's two motions that work here greed
and fear, and the greed makes the market go higher.
You want to get involved, you don't want to miss out.
Fear makes the market go lower. Fear is the strongest
human emotion period. That's why the market goes down faster
than goes up.

Speaker 1 (01:31:38):
It's more than love, Dave, Yeah, it is.

Speaker 2 (01:31:40):
It is. We like to say the market goes up
the stairs, up the stairs, and down the escalator, and
I think that's probably true. But Stock that I've been
talked about before because it just fascinates me as that
kava grill. And if you think of it, if you
think of it kava grill.

Speaker 5 (01:31:53):
If it fascinates you, but you haven't tried it yet.

Speaker 2 (01:31:55):
I tried it. Oh yeah, it over lost age. But
it's like if envision Chapotle with Mediterranean food and pita, right,
Peter's torti is Mediterranean foods to the Mexican food. Okay,
what's Peter Petera's You don't know what Pete is?

Speaker 1 (01:32:10):
What's Peter?

Speaker 2 (01:32:11):
Google it? Anyway. After hitting an all time high of
one hundred and seventy two on December the sixth, Stock
has been going steadily lower. Lost another five percent on Tuesday,
bringing the decline to forty five percent. Stock below one
hundred dollars for the first time in six months. Stock
did open modestly higher on Wednesday, but then quickly went
into the red again. It's got a pe of seventy seven,

(01:32:34):
which is which which means that things need to be
going perfectly, and right now things are not going perfectly.
And I understand the excitement about it. If you can
get the next Chifoli, imagine having the next Chipoli, right
and if this is going to be the next Gufoli,
you want to get on board. But it's not the
next Chipoli, so we'll see. It's a Krispy Kremedoni trying
to go bankrupt again. Yeah, they were already fifty percent

(01:32:59):
off of off of their high. They dropped another twenty
two percent at the open on Tuesday, and nothing sweet
about their quarterly reported like that they.

Speaker 5 (01:33:07):
Weren't they weren't they supposed to start selling donuts at
McDonald's or something, and that never yes, and then I
never have not seen that anither I was waiting for that.

Speaker 2 (01:33:14):
Have you ever heard of CHEG Yeah? Absolutely, yeah, the
education company.

Speaker 5 (01:33:18):
Yeah, So essentially it was like artificial intelligence before, Like
for us in college, that's what we used to get answers.

Speaker 2 (01:33:24):
And the only think intelligent about CHAG is artificial. Yeah.

Speaker 5 (01:33:28):
Sure, but anyways, they dropped thirty one.

Speaker 1 (01:33:30):
That wasn't a good one.

Speaker 2 (01:33:31):
No, no, I thought that's pretty good.

Speaker 5 (01:33:33):
They dropped for the AI crazy, They dropped thirty one percent. Monday,
they go and sue Google, claiming that the latter's artificial
intelligence summaries of search results have hurt cheg's traffic and revenue.
Yeah no crap, Yeah, like that's.

Speaker 3 (01:33:49):
That company is going to struggle.

Speaker 1 (01:33:51):
It's like a candle light company suing Thomas Edison. You
just made lights.

Speaker 5 (01:33:57):
Seriously, imagine being in college right now with Chad GBT.
How amazing that would have been. We were just like,
you know, I were just one year from it.

Speaker 1 (01:34:05):
But yeah, that's what happens with technological revolutions.

Speaker 2 (01:34:08):
You know, I don't know going to police the chat GPT,
although I guess there are story software that can identify
it the.

Speaker 4 (01:34:14):
Way they teach, like well test the way they test,
because you can just get answers from chat GPTs.

Speaker 6 (01:34:21):
Whatever.

Speaker 2 (01:34:22):
If you have to write a current paper or something,
how do you believe.

Speaker 1 (01:34:24):
That well, they have they have AI that can see
if an AI.

Speaker 2 (01:34:29):
There's AI. It's kind of like the drone I got
the drone killers, right, Yeah, you can send up a
drone killer and you'll capture the drone.

Speaker 5 (01:34:37):
Where I see it. And I was like, there's platforms
out there that you could record your class while you're
singing class and it will you know, you could totally
mentally check out during the classroom during the class and
then have this artificial intelligence compile notes for you.

Speaker 4 (01:34:53):
I mean it's gonna be they're gonna have to like
turn in exams on everything is gonna be on a
computer and they're gonna have to it on the computer
where you can't. They can see everything you're doing. So
you can't have another tab open with chat ept or
your phone up there because they're looking at you.

Speaker 3 (01:35:08):
I know something that's gonna have to be.

Speaker 2 (01:35:10):
My nephew works for AT and T and he said,
the smarter the phones gets, the dumber the people get.
We're still doing free financial plans. If you haven't done it,
please get in here and.

Speaker 1 (01:35:18):
Come check out. I'm running a half marathon while just
before this airs, you're gonna do the half marathon I'm
going to be done with the half marathon before the
show starts.

Speaker 2 (01:35:26):
Wow, that's very fast. Anyway, we all want to be happy,
and really important to be healthy because if you're not healthy,
you're probably not happy and a Greenberg financial What we're
really trying to be is see you next week.