Smart Investing with Brent & Chase Wilsey

Smart Investing with Brent & Chase Wilsey

Smart Investing is the radio show where Brent and Chase try to make investing easier to understand. They demonstrate long-term investment strategies to help you find good value investments.

Episodes

December 5, 2022 59 min

Jobs

Job gains showed a nice increase of 263,000 in November which easily topped the estimate of 200,000. Leisure and hospitality remained a major leader with job gains totaling 88,000 in the month as the sector continues to battle back from Covid. This sector still remains 5.8% or 980,000 jobs below February 2020. Retail trade and transportation and warehousing were the standout losers in the report as both sectors saw a decline i...

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Consumer Price Index Even with all the fear, the consumer is still shopping. In October, retail sales were up 1.3% compared to September and up 8.3% compared to October 2021. This outpaced the inflation rate in the October CPI report which saw prices grow 0.4% month-over-month and 7.7% year-over-year. There were definitely areas in the retail sales report that benefited from higher prices as sales at gasoline stations were up 17.8%...

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CPI Report The market rallied this morning on news inflation was not as bad as feared. The headline CPI number for October came in at 7.7% compared to last year, which was lower than the estimate of 7.9% and below last month's reading of 8.2%. Back in June the CPI hit 9.1%. I believe some investors believe this number could help lead to a Fed pivot, but I'm still not optimistic given their stance of being strong to fight in...

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Payroll Employment

Another good report for the labor market as payroll employment climbed by 261,000 in the month of October. This topped the estimate of 205,000 but was the slowest pace of gains we have seen since December 2020. Although this may sound concerning, after recouping the losses that were generated from Covid we have anticipated the labor market to slow. There is a big difference between slowing and declining. For a go...

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Portfolio Splits I have been investing money for clients for over 40 years and it was not long into my career that I questioned rules of thumb like the best portfolio is a 60/40 split of stocks and bonds. I’ve always felt it was better to research deeply investments that were undervalued and would do well going forward. My fear has proven to come true over the years, especially now as according to Bank of America the 60/40 split po...

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Dollar Strength I see comparisons to the 70s and people say yes with the current inflation we’re going to have a major recession or depression just around the corner. One important area that people are not looking at is the strength of the US dollar. Back in October 1978 the dollar hit an all-time low of 80.52. The weakness in the dollar was very difficult for the United States. I’m sure you’re wondering where it stands today. Roug...

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Inflation

Inflation numbers were released today rising 8.2% over the past year. Initially the markets were down about 2% but by the end of the day markets rallied up over 2%. Perhaps inflation is not as bad going forward as we think. One reason for that is the lapping of year over year. September 2021 inflation began increasing rising 5.4%, October 2021 at 6.2%, November 2021 up 6.8% and December 2021 inflation increased by 7%. Wha...

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Global Economy 

The global economy is dropping dramatically, but the US is the bright spot. I always tell people we do not depend on the world to buy our products we buy products from the world. Some bright news that might help you hold on during these difficult times is according to the Wall Street Journal, some US manufacturers are bringing production from overseas back to the US and are boosting investment. It should also be not...

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Market Increase The Fed continued to spook markets yesterday with the outlook for monetary policy. The 0.75% rate hike to a range of 3% - 3.25% came as no surprise, but the concern came when the outlook for rate hikes going forward was released. The current estimate is a terminal rate or an endpoint of 4.6% next year. Six of the 19 “dots” were in favor of taking rates to a 4.75%-5% range next year, but the central tendency was to 4...
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Inflation

The market is not liking the CPI report today as the inflation rate of 8.3% topped the expectation of 8.0%. It was down from July's 8.5% rate, but it remains stubbornly high and likely cements a Fed Funds Rate increase of 0.75% at next week's meeting. Energy was down 5.0% in the month and gasoline was down 10.6% in the month, but year over year energy is still up 23.8% and gasoline is 25.6% higher. Food remains on...

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Streaming Services 

We knew the day was coming when streaming would have bigger viewership than cable TV. It officially happened this past July. Streaming services accounted for 34.8% of total US TV viewing compared with cable at 34.4%. The 34.8% streaming services viewing climbed dramatically from 23% one year earlier. We may see similar numbers in August but in September we may see a switch back to cable as major networks launch ...

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Apple There are a few fund managers that I follow and respect their opinions. One of them is Dan Niles who is a Stanford University graduate in electrical engineering. He has focused on tech stocks for over 30 years, and I always enjoy his commentaries and analysis. I have continued to warn that I still believe Apple stock is too pricey. Dan runs a hedge fund so unlike my portfolio he can short stocks and take a bet on the downside...

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Unemployment / Job Openings

The jobs report today showed the labor market strength is slowing, but overall, it still remains in a very healthy spot. The headline number saw payrolls increase 315,000, which was essentially in line with the estimate of 318,000. While this was the slowest growth since April 2021, it is still a good growth rate and people need to realize the blockbuster job gains we saw from job recoupment are now in t...

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Apple Products In the past we have posted about where will Apple find the next area of growth for their business. One area of growth for them could be the $452 billion mobile ad market which could grow to $680 billion in 2026. They also may take advantage of trying to get into the online advertising market which is about $600 billion. There are many different ways that Apple may end up putting advertising on your phone and through ...

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High Prices The highly anticipated inflation numbers for July came out today and were better than expected. July inflation was 8.5% a decline from June‘s inflation numbers of 9.1% and also below the forecast of 8.7%. One month does not make a trend however I believe this could be the start of the decline to December 31, couple reasons I think that. We have continued to post about different commodities and how their prices have come...

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Jobs Report Friday’s job report was a good surprise showing non-farm payroll increased by 528,000 jobs, this caused the unemployment rate to fall to 3.5%. We have now recovered all the jobs lost during the pandemic returning to levels not seen since February 2020. Average hourly earnings were up 5.2% over last year but it appears that wage growth could be slowing. In a separate survey from Greenhouse a recruitment software company ...

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Stock Analysis In a search for value at Wilsey Asset Management we’re always looking for companies that have gone on sale with strong fundamentals. What follows are four companies from last week that were down substantially from their 52-week highs. We have not done the research to see if they’re fundamentally strong, but they are definitely on sale. Snap which trades under the symbol SNAP fell to $9.96 last week and back in the fa...

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Chip Manufacturing I for one am glad to see positive news from the Senate regarding a bill designed to boost US semiconductor competition. After a key procedural vote that passed 64-34, the stage is now set for final passage in the chamber either late this week or early next week. It would then head to the house for passage and finally to Joe Biden to sign the bill into law. The bill would provide about $50 B in subsidies to aid ch...

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Inflation Another month, another extremely high inflation rate. The CPI came in today for the month of June at 9.1% which topped the estimate of 8.8% and was the highest level since November 1981. Energy inflation was top of mind yet again as gasoline prices climbed close to 60% compared to one year ago, electricity prices grew 13.7% over the same time frame, and natural gas was up 38.4%. Food prices also remained hot as they rose ...

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Labor Market Friday's job report will be a very important indicator for how the job market is holding up with inflation concerns and rising interest rates, but today we got the data for the JOLTs report. In May the labor market remained strong as there were still 11.25 million job openings. This far outweighed those counted as unemployed as it stood at 5.95 million people. This means there are still about 1.9 openings per avail...

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