Let's Talk Money

June 20th, 2026.

Episode Transcript

Speaker 1 (00:00):
And good morning. Thank you for joining Let's Talk Money
on news radio WGY. I'm going to be your host
for today's show. My name is Paulo La Pietro. I'm
one of the wealth advisors along with the director of
Portfolio Strategy. I'm sitting in for Stephen Bouchet, who is
taking a very well deserved break, and Folks, usually I

(00:21):
have a colleague with me, and usually that's Edward Wilhelm, our.

Speaker 2 (00:25):
Senior portfolio trader.

Speaker 1 (00:27):
Him and I go back and forth on the markets,
giving you insights and thoughts on you know, what's.

Speaker 2 (00:32):
Going on now and what lies ahead.

Speaker 1 (00:34):
But unfortunately ed couldn't make it on today's show, so
I'm writing solo first time. So, folks, I'm going to
have to ask for a little bit of help on
today's show. The phone lines are going to be open
all throughout today's show. You know, a full hour of
just me talking. Nobody wants that. We got to hear
some of your questions. I got to answer some things

(00:56):
that are top of mind, whether you're thinking about the markets,
you're thinking about your portfolio, you're thinking about your financial plan,
your tax plan, your estate plan. I know I'm the
investment guy. But remember I'm still a certified financial planner.
I can answer any of those tax or estate questions
that you may have. So phone lines are going to
be open all throughout today's show. That number one eight

(01:16):
hundred top WGY. That number is one eight hundred, eight two, five, five, nine,
four nine.

Speaker 2 (01:25):
Folks.

Speaker 1 (01:26):
It's been a great long weekend so far. I know
we're only in on Saturday, and again I appreciate you
spending your Saturday morning with me, and I just want
to say, you know, a happy early Father's Day for
all the fathers out there. Tomorrow it's looking like it
should be a good weather day, so hopefully all the
fathers listening, you're going to do the things that you
want to do, whether that's golf, for grilling, or fishing,

(01:48):
or whatever the.

Speaker 2 (01:49):
Case may be.

Speaker 1 (01:50):
I hope that your day is filled with doing the
things that you love and surrounded by your loved ones. Folks.
It's also been a great sports weekend as well. We
had the USA play yesterday.

Speaker 2 (02:03):
That was a very big game.

Speaker 1 (02:04):
We'd beat Australia to nothing.

Speaker 2 (02:07):
Uh. You know, if I thought.

Speaker 1 (02:09):
I wouldn't get in trouble, in trouble by saying the
USA chant on the radio.

Speaker 2 (02:13):
I would I don't know how.

Speaker 1 (02:14):
Much our producers or Steve would love that. So I'm
gonna I'm gonna reframe myself here.

Speaker 2 (02:19):
But that was a big win against.

Speaker 1 (02:21):
Australia, and I just I think I fell asleep before
I saw the Turkey game, who was also in our group.

Speaker 2 (02:27):
But it looks like.

Speaker 1 (02:28):
With the Turkey loss last night, we've officially won our group.
Now I'm not the biggest soccer fan, so I can't
be in a historian for you, but I gotta say
it feels like this year we're just playing really, really well.
It's they're fun to watch, you know. There's just a
lot of excitement around the USA team, and again, you know,

(02:50):
it just really been a blessing to watch. Now with
my name Paulo Lafiaci, it shouldn't come too much as
a surprise. And I'm also come from Italian heritage, and
the USA team is the episode of the Italian team.
And since that USA is playing well in the US
in Italy hasn't qualified for the World Cup in three
consecutive World Cups. Come on, that's that's just not Italy.

(03:13):
But again we are rooting for USA, so go USA.
That was a big win yesterday. And then of course
we also have the US Open going on over at
Shinnecock Hills not too far away Long Island, and that's
been really fun to watch.

Speaker 2 (03:26):
They've been dealing with some.

Speaker 1 (03:27):
Weather and some really tough greens to playwood, but it
looks like Wyndham Clark is the leader.

Speaker 2 (03:34):
As of now.

Speaker 1 (03:35):
I think last time I checked he was seven under.
Not sure when they're teeing off today, but very fitting
for a Father's Day weekend to have, you know, a
big major like that like the US Open nets So
that's certainly been fun to watch, and I'm sure the
next two days are gonna, you know, involve a lot
more better golf as well. And then last but certainly
not least, they just want to give a happy birthday

(03:57):
to our colleague Scott Strohacker. Scott is a pivotal part
of our tax team and he's also one of the
wealth advisors is CFP and also an EA, so we
just want to give a quick shout out to Scott
and say happy birthday. So, folks, great week within the
markets this week, definitely want to digest on that. Let's

(04:19):
talk about some performance, you know, not only on the
major indices, but what's going on in bonds and gold and oil.
Obviously there's been some sort of resolution within the Middle East,
so I want to kind of dive into that and
see how that's affecting markets. You know, we had some
economic data that came out earlier this month. You know,
we had some inflation numbers and jobs numbers, so definitely

(04:41):
want to dive into that. And also first time Wednesday
FED meeting, our local native Kevin Warsh graduated from Shaker,
he led his first FED meeting, so definitely want to
dive into that as well. But again, just want to
say this, fault Nines are going to be open love
for your help on today's show answering any questions that

(05:03):
I can, uh, you know, regarding anything within your financial picture.
Those phone lines are going to be open one a
hundred talk WGY again. That's one a hundred, eight two, five, five, nine,
four nine. So this week we had the SMP five
hundred up one point four one percent on the short week. Remember,
markets were only open from Monday to Thursday, with Friday

(05:25):
being closed for Juneteenth, So the SMP five hundred was
positive at one point four to one percent, and then
we had the tech heavy Nasdaq Cup three point one
four percent, certainly leading the charge, which has really been
within the theme this year this is this certainly has
been a tech heavy focus market and obviously an AI

(05:47):
driven market, and obviously going to get into that around
our portfolio positioning and how we've been thinking about that.

Speaker 2 (05:53):
We actually just made a trade.

Speaker 1 (05:54):
Recently that I could dive into a little bit and
give you some some inside inside on that as well.
And then the last major indicy I want to cover,
we had the Dow Jones Industrial Average was up eighty
six basis points, so positive week within the markets, certainly
with a nice risk appetite, with the tech heavy NASDAC

(06:16):
leading the way at three point one four percent. But look,
I was saying earlier, we've also had some resolution.

Speaker 2 (06:24):
Within the Middle East.

Speaker 1 (06:26):
It's been a long conflict so far, and it seems
like this time around, and I know we've talked about
this and it seems like a little bit of a
broken record how many times we've got into the one
yard line and haven't gotten this push through. But this
time seems like there's certainly some more traction around this resolution.
So it's something you know, we signed a six seed
day ceasefire in France. There were supposed to be some

(06:48):
more extended talks.

Speaker 2 (06:50):
In Geneva coming up.

Speaker 1 (06:51):
Now those have been postponed due to some more conflict
within Lebanon with Israel. But so far, you know, sixty
day ceasefire with the US Iran seems like it's holding,
and that's been reflected within oil prices. I was just
listening to the news break before we started today's show.

Speaker 2 (07:09):
We're talking a.

Speaker 1 (07:11):
Little bit about those oil prices coming down, and that
certainly has been the case, and you could probably see that.

Speaker 2 (07:17):
A little bit at the gas poon.

Speaker 1 (07:18):
So we had Brett crude, which is what we look
at for overall oil prices, at its high back in April,
I was trading at about one hundred and twenty dollars
a barrel. If I'm going to be specific, it was
about one hundred and eighteen dollars dollars a barrel, and
now it's trading down to seventy seven dollars and eighty
nine cent. So obviously seeing that retraction in oil prices

(07:41):
to show that there has been some sort of resolution,
not saying that we're fully done yet, but we are
seeing the oil markets react to that positive news from
those trade talks and this sixty day truce within the
Middle East, So that has certainly been a positive for folks,
not only you know, just seeing at the oil markets,

(08:03):
but certainly feeling that at the gas pumps as well. So, folks,
since I am doing this show solo today, I'm going
to be taking a few breaks, and we're coming up
to the first break at the fifteen minute mark, so
we're just going to do a quick news break. I
hope you stick with us quickly through that break. But
you are listening to Let's Talk Money, brought to you
by the Bouchet Financial Group, where we help our clients

(08:25):
prioritize their health while we manage their.

Speaker 2 (08:28):
Wealth for life.

Speaker 1 (08:28):
Stick with us through the break and I'll be right back. Wow,
that's a quick break, you know. Like I said earlier, folks,
I usually do the show with another colleagues that we
usually skip the fifteen minute breaks, but wanted to check
in and see how that was. And that was a
quick thirty second break, So I love that, just like
I was discussing earlier, through the resolution that we've seen
with the sixty day truth, we've seen the oil prices

(08:50):
come down, so that's certainly been a positive and that's
really been reflected within the bond market as well. So
usually when we want to see, you know, how the
bond market isn't reacting to inflationary events such as oil
coming down, which is deflationary, we usually see the ten
year treasury come down, and that's certainly been the case.

(09:10):
Checking out the ten year treasury right now, we're sitting
at four point four or five percent, and that's certainly
off of the highs that we saw back in late
April early May, where the ten year hit four point
six six percent. So, you know, bond market is certainly
reflecting some of the deflationary events that we've seen within
oil markets. So, folks, we do have a caller, We

(09:33):
have David from Clifton Park. Certainly appreciate you calling in
this morning.

Speaker 2 (09:37):
How are we doing.

Speaker 3 (09:39):
I'm doing great. How about you?

Speaker 1 (09:41):
I'm doing very well, no complaints?

Speaker 2 (09:43):
What's on your mind?

Speaker 3 (09:46):
Well, I'm an investor, a retail investor, mostly at tech
I have done for the last four or five years,
and as I'm looking at this market that exists right
now with the unbelievable growth of the chip area and
all areas is related to AI. Uh do you think
in general we're still early going? I mean some of
these hyperbolic moves by like Micron Uh. I think there's

(10:11):
one called SGA Western Digital, these ones that are really
at the top of the rung. Do you see this
this momentum still carrying on? Is there is this growing
into a bubble or are we still in the early
stages of the this AI boom that's going on?

Speaker 1 (10:27):
Yeah, David, that's a great question. I mean what you
just referenced to too is specifically the memory trade, right
you said, you know Mike Ron and c G. You
know some other big players out of that is sk
Heynez and Samsung and then also sand.

Speaker 2 (10:40):
Disk as well. Yeah, that that's that, that's.

Speaker 1 (10:43):
All been derived from a big bottleneck within memory, within
this AI trade, but none of that.

Speaker 2 (10:48):
Nonetheless, you're one hundred percent right.

Speaker 1 (10:50):
We've been seeing some astronomical performance figures out of that,
and we've seen it in our portfolios as well because
we hold on to an e t F called d
R a M that captures the memory trade. I think
there's a lot of momentum left in this market for
a multitude of reasons. I think what makes this market
the most unique is just being on the cusp of

(11:11):
this new technological revolution within AI. There's so much money
that is being spent. These are real dollars coming from
real companies, which is dramatically different from what we saw
back in the dot com bubble, and I'd love to
get into that a little bit. But to answer your question,
the reason why I think that there's still more legs
simply goes down to the CAPEX number, right, the capital expenditures,

(11:31):
how much these companies are reinvesting within their own companies
and in markets to make sure that they can have
a dominant share with it within this AI trade. So
five of the largest hyperscalers for twenty twenty six are
spending over seven hundred and thirty billion dollars of capital
expenditures this year, David, And that alone, aside from some
of the positives that we're seeing with oils coming down still,

(11:54):
you know, somewhat resilient labor market, hopefully inflation coming in
the check, and overall just consumer spending still being solid.
This is going to perpetuate markets going forward. So I
think there's still a lot of cheops left.

Speaker 3 (12:06):
David, Can I ask you one last quick question please. Yeah,
I've held in Vidia for a number of years and
it's been a great investment, but in the last year
and a half. And I always keep in mind that
this thing split ten to one about two and a
half years ago, which is one of the reasons I
bought it. I said, this is a great opportunity and

(12:27):
it's been good. But unfortunately I'm a little bit of
a market timer and a retails I have to admit
I'm not the greatest I would say, I hate to
say it investor slash trader, but do you see in
Nvidia as something that still has legs to go higher?
Because it's always it's like stuck in the mud around
two hundred to two twenty, it'll drop back a little bit.

(12:48):
And if you don't see it moving as for a
particular reason, even though it's the largest, you know, company
by market cap, what's going to happen with that stock?
Is that going to continue to a movie you just
think it's it's kind of where it's going to be
or what are your thoughts on that? And now I'm
going to hang up and listen. Thanks a lot for
your help.

Speaker 2 (13:08):
Yeah again, thank you.

Speaker 1 (13:09):
So much for the call. And that's that's a great,
great question, right because in the video has been the
darling since we came out of twenty twenty two. If
you didn't own the video, you felt like you were
left out. Uh, you know, after twenty twenty two, and certainly,
as David pointed out, in the last twelve months or so,
not necessarily that Nvidia has been you know, underwater or
really dragging the overall index, but certainly has been left

(13:31):
behind compared to some of the bigger names that have
been more in the news, Like David pointed out Microun
certainly being one of them. You know, Seagay, you know
sand Disk, you know what's a lot of the bigger
memory chips. I still love Navidio. I think Navidia this
is one of the cheapest it's been in a long time,
especially when we look at it from a valuation standpoint.

Speaker 2 (13:51):
I think over the long.

Speaker 1 (13:52):
Term, uh, you know that that's going to pay off
holding the video at these values. But David has more
specific questions, So why is this happening? It's a great
question as well, and a lot of that has to
do with just competition. When we came out of twenty
twenty two, and we understood. I think chat GBT launched

(14:13):
November thirtieth to twenty twenty two, and we saw how
much compute was needed to power these large language models.
The video was at the forefront. The video was essentially
on an island. We had AMD a little bit on
the fringes, but Navidia was on an island as far
as providing the AI trade the power that was needed
to compute these large language models. And since that time's

(14:37):
gone on, we've seen other competitors, you know, enter and
gain market share.

Speaker 2 (14:43):
Within the space.

Speaker 1 (14:43):
And that is why I feel like Navidia has been
trading a little bit more sideways than normal. We're not
you know, we're obviously used to those parabolic numbers that
we've seen over the last few years. But David again,
I think over the long term, with the valuations that
we're seeing right now, the video is a good hold.
It still makes up a large piece of some of
our AI holdings, you know. So right now we hold

(15:07):
pretty much three main ets to just I would say
complete or AI trade. But my door is always open
to see, you know, if there are other areas and
I'll get into kind of some of these other areas
that we're looking at within the AI trade, but where
we looked at originally, and it goes back to November
of last year when we saw that pullback, you know,

(15:28):
right around November twenty first, not to be too specific here,
but we saw you know, about a ten percent pullback
in the S and P five hundred more than that
on the Nasdaq, and about a twenty percent pullback within
the AI trade. And it was like I talked to
David about, you know, we saw these cap X numbers
last year, we were just around six hundred billion. This year,

(15:49):
we're going to be seven hundred and twenty five billion
with the major hyperscalers, and we said, wow, I mean
that's real money being spent in this economy. Who's going
to be the direct benefactor from that? We knew all
this CAPAX money was going to go into data centers.
And if we understood that these were going into data centers,
how do we have the compute for them?

Speaker 2 (16:07):
Will we need chips?

Speaker 1 (16:09):
So we added SMH back in the portfolio, which is
a Venac Semiconductor ETF. The video is still one of
the largest holdings, if not the largest holding, within.

Speaker 2 (16:17):
The ETF that's by design.

Speaker 1 (16:19):
I know, it hasn't been the one hundred percent to
two hundred percent one thousand percent that we've seen on
some of these smaller uh, you know, semiconductor names. But
it is still going to continue to be a market leader,
There's no question about it. And then this year, back
in April, well, when we just looked at so you know,
my job is the director of portfolio strategy is uh,

(16:40):
you know, look at earnings after earnings, not just to
see where you know, the earnings are and the profitability
and the revenue. More importantly, to see where ford guidances,
how companies are projecting the next six months, what are
some of the strengths that they're seeing, where's their demand,
but more importantly, where the issue that they're running into.

(17:02):
And so when we're keeping our ear to the ground
listening to this AI trade, what we saw was there
was a massive need for memory. All the biggest players,
including Jensen waan over in the video said yeah, we
would love to continue to build the next iteration of chess,
so we can't. We're running into a roadblock, and that
roadblock was in the form of memory. So we've looked,

(17:25):
you know, to see exactly how we wanted to get
exposure to some of the largest memory players within the world,
and those names are Micron, like David pointed out, s
k Heinez out of sol Korea, Samsung out of sol Korea,
sand Disc, which used to be a digital you know,
photo company Memory that transitioned into the memory trade within AI.

(17:47):
We wanted to find out exactly what was the most
strategic way to get a concentrated trade, and there just
really wasn't an ETF until we, you know, worked with
a company called Roundhill to get exposure within an ETF
called d AM and that gave us our exact specific
concentration that we wanted. And that trade has also been
great for us, you know, really doing extremely well since.

Speaker 2 (18:09):
We added it back in April.

Speaker 1 (18:11):
And as I said earlier, we had a three part trades.
We really kind of closed out our AI trade, even
though like I said earlier, the door is always open
for our last AI trade that we added last week,
and that position was more of an infrastructure energy play.
I've talked about this time and time again. Within these markets,

(18:33):
we've obviously needed a lot of chips to power these
large language models, but the other area is how much
energy that is needed for these data centers, and it's
not just the energy alone, it's just the infrastructure that
needs to be built on building these data centers and
then building the connectivity between the data centers and then
the US power grid. It's a very niche market. So

(18:56):
we wanted to do our due diligence and see exactly
how we wanted to get exposure sure to that trade,
and we did. We ended up adding a position called
a I PO, which gave us a diversi you know,
a diversified play towards infrastructure, so kind of you know,
the diggers of building the you know, data centers and

(19:17):
then actual construction of the data centers, and then also
the power trade, so the companies that you know a
lot of utility companies that specialize within power distribution into
data centers, and then more importantly the niche companies that
sit between the US power grid and the data centers.
There's a lot of technology that needs to go into that,
the connectivity, the power breakers, all of that which is

(19:41):
a really niche market for UCE. And again that trade
has really paid off for US so far since we
added it about a week and a half ago. So
I think there's a lot of layers to this AI trade,
and I think that's important to think about because if
you start looking at this trade and painting it with
a broad brush and saying I just want AI exposures,
so there's going to be a lot of losers, There's

(20:04):
no question about it. And I think it's really important
as we continue to sit between interest rates between you know,
FED funds rate is between three fifty to three seventy five,
I mean, this can still be a constrictive market. And
I think that's important to think about because if you
want AI exposure, you're adding positions into the portfolio that
don't have durable earnings, that haven't seen profitability growth quarter

(20:26):
over quarter, that don't have strong forward guidance going forward,
you're going to be punished.

Speaker 2 (20:33):
We've seen that.

Speaker 1 (20:34):
Sure, there's been some very very good return figures across
this market so far this year and last year. There's
also been some big losers. And again it goes down
to durable earnings. Are you actually a profitable company? And
if you're not profitable now, how are you going to
give us the forecast going forward to make us comfortable
with where interest rates lie and where valuations are and

(20:58):
where we are at the you know, kind of the
top of the market, So I really you know, I know,
we're coming up pretty soon to the half of the show,
which actually flew by, so I don't want to get
into that too much, but we'll talk a little bit
more about, you know, how we should be thinking about
portfolio positioning within these markets. I also want to get
through the economic data that I talked about. We have

(21:20):
the you know, the May jobs report and the May
inflation report, and then also the FED meeting as well,
so we want to happen to that. Then also, folks,
we haven't talked about it yet. What about SpaceX really important?
So folks, we're coming up to the first break, half
hour break, so I hope you stay with us through
the news you listen into Let's Talk Money brought to
you the Bouchet Financial Group, or where we prioritize your

(21:43):
health while we manage your wealth for life. Hello, folks,
and welcome back. My name is Paulo La Pietro. I'm
one of the wealth advisors along with the director of
Portfolio Strategy here at the Bouchet Financial Group. Thank you
for sticking with us through the news I'm going to
be your host for today's show, and I'm doing it
so low today, so love for any callers to call

(22:03):
in again. That number is going to be one one
hundred Talk WGY again. That number is one eight hundred
eighty two five five nine four nine. We talked about,
you know, a lot of investment uh situations at the
beginning of today's show, talking about the AI trade. But
more importantly, we got a caller right now. We have
Mike from Mike.

Speaker 2 (22:23):
How we doing this morning?

Speaker 4 (22:25):
All right?

Speaker 2 (22:25):
Mike, can you hear me?

Speaker 3 (22:28):
Yeah?

Speaker 2 (22:28):
Mike, how we doing.

Speaker 4 (22:31):
Good? I'm doing well. I'm doing well. Thanks for taking
my call. I'm a long time caller here and I
really enjoy your show.

Speaker 2 (22:38):
I'm hacky, thanks for listening.

Speaker 4 (22:39):
Regarding space X, I've heard a lot of hype around
it and I really want to get into it, but
I just can't justify the valuation right now. I keep
reading about, you know, how it's worth more than Amazon
and it's approaching Microsoft's cap. I mean, what are your
thoughts around that? You know, I want to get in,
but I also don't want to chase it.

Speaker 2 (23:01):
What do you think? Yeah?

Speaker 1 (23:04):
I mean, Mike, that's a loaded question, but I certainly
appreciate it. SpaceX's has been the biggest retail IPO, there's
no question about. I've fielded so many phone calls and
emails regarding it.

Speaker 2 (23:16):
You know, Mike, do I think.

Speaker 1 (23:17):
The company is going to be great over the long term.

Speaker 2 (23:19):
It certainly can be.

Speaker 1 (23:21):
I think Elon and where they sit is in a
very unique spot of being the pioneers within space exploration
and being able to provide utility within space, not only
for space travel, but you know they talk about putting
data centers on the Moon and what that means from
power distribution and cooling and costs. I think, you know,

(23:42):
the possibilities are endless. The fact of the matter is, though,
what you kind of just said a little bit earlier, Mike,
is where valuations sit. I mean, we ipoed on Friday,
I think it was the twelfth, and you know, we
opened up at one hundred and thirty five dollars share
and I think it peaked around two twenty. Now it's
back down, you know, about one to eighty five. But

(24:03):
you said something more important, like it's surpassed Amazon in
market cap, and I think that's really important because so
I was talking about earlier on today's show. This market
is really focused on revenue and profitability on where we sit,
and I want to put that into perspective for you, Mike,

(24:23):
is SpaceX's revenue is only eighteen point seven billion and
they have a net loss of four point nine billion.
Now Amazon has seven hundred and seventeen billion in revenue
and they have seventy seven point seven billion in profit,
So they have more profit within that company than SpaceX

(24:47):
is deriving within revenue, and I think that can be
a challenge early on, Mike. I think over the long term,
SpaceX can certainly be a good investment. But right now, one,
here at Bouchet Financial Group, we're not an IPO investor, right,
we think the too much volatility and unpredictability around IPOs.
But two, I want to wait a little bit until

(25:07):
the revenue and the profitability story is lining up with
our investment thesis before getting any sort of meaningful exposure.

Speaker 4 (25:14):
Yeah, that makes sense. So maybe maybe if I want
a little exposure, look for an et ASP and it
has SpaceX in it.

Speaker 1 (25:23):
Yeah, Or I mean again, you know, I think SpaceX
can also make sense to just take on as individual exposure.
But you know, some of the times that I'm hearing
other people talk about this, they want to, you know,
gobble up as much SpaceX as possible, making their portfolios
twenty thirty forty percent of a single stock. I think
that is an absolute risk, especially early on in IPO.

(25:45):
But if you're looking for a five percent allocation and
you want to take on uh, you know, SpaceX, you
know directly, I don't think that's a problem. Like I said,
I mean, we're certainly down from that two twenty peak.
I think it's like fifteen twenty percent off of all
time hyhes, it's much That should be a good opportunity
to add some exposure. I just would be very careful
on how much exposure you have to an individual stock,

(26:05):
let alone an the individual stock that just iPod.

Speaker 4 (26:08):
Great, that makes a lot of sense. Thank you. You
guys are always helpful. I appreciate it.

Speaker 1 (26:13):
Yeah, Mike, thank you so much for calling in. I
hope you have a great rest of your weekend. Hi, guys,
So we had Mike from Latham that called in with
a great question.

Speaker 2 (26:22):
You know, I don't know if you heard me.

Speaker 1 (26:24):
Right before the break, I was like, Hey, we haven't
even talked about space exit. Yeah, and obviously that's been
a very large news headline. It is the largest retail
IPO that has ever happened in US market history, and
I would say so far has been obviously a success.
Ipoda won thirty five a share and skyrocketed no pun
intended to about two twenty a share, and we've been

(26:46):
given back a little bit, but still sit up. I
think around like thirty five percent from its IPO start.
So it's been you know, some great performance so far.
But we just always want to practice some caution around IPOs,
just because there's just a lot of uncertainty around it.
But I think what Elon and that company is doing,
I think they sit in a very niche spot and

(27:06):
could provide a lot of utility not only to multiple
factors within the markets, but more specifically within this AI trade.
As I was talking about earlier. You know, power consumption
is a big problem with them within this AI trade,
and SpaceX is aiming to have data centers on the
Moon by twenty twenty seven and twenty twenty eight, and
that is supposed to bring you know, a lot lower

(27:28):
cost and power utility to AI compute. So the profitability
there could be endless. But I just think right now
it's a little too.

Speaker 2 (27:39):
Rich for my taste to put it simply.

Speaker 1 (27:42):
And honestly, that kind of goes back, you know, I
was talking about we made the memory trade back, you know,
in April, where we added d R a M and
that gave us concentrated exposure to all the biggest memory players.
And what we actually sold out of to fund that
trade was our nuclear position. So when we first made
our AI you know, our first leg of the AI

(28:04):
trade back in November of last year, November twenty first
we added SMH.

Speaker 2 (28:08):
We also added.

Speaker 1 (28:09):
Nl R, which was a nuclear ETF and our thesis
during that time was there needs to be so much
more power generation within the US to make sure that
we can you know, fulfill all the power needs out
of these data centers, and really nuclears is the emergion
of the ability to create all that power. So we thought,

(28:32):
you know, that was a great trade we added it.
It ended up outperforming the markets greatly, and as we
sat on the position, even though we were doing so well,
we saw that, you know, the earnings weren't really adding
up to our thesis story, and so we ended up
you know, exiting out of our nuclear position and getting
into the memory trade. For that reason, we want to

(28:52):
follow the money in this AI cap spending cycle. So, folks,
we got another caller calling in.

Speaker 2 (28:59):
We have Ken we're doing this morning.

Speaker 5 (29:03):
Hey, I'm doing well. Good morning, Thanks for taking my call.
I I apologize I'm in a car, so I'm going
to ask my question to hang up. I'm fairly heavily
concentrated in Microsoft. They are participating kind of the broad
tech market as well as I got to play in
the AI side of this as well. I'd love to
know what your thoughts are long term. Obviously it's been

(29:24):
great for the last decade, but a lot of.

Speaker 2 (29:26):
Degree of volatility over the last year or so.

Speaker 1 (29:30):
Yeah, yeah, Ken, you know, certainly be safe while you're driving.
To appreciate you calling in with that question. Yeah, I
mean Microsoft that that has been one of the biggest
you know, kind of thought processes within this market this year.
I think it unjustifiably so gets caught up in the
software trade. So what we've seen so far this year
is again a lot of software being punished. As we

(29:51):
talk about this agentic AI that's coming out, So you know,
we're evolving from basic large language models and now to
a gentic AI where it could kind of predict pass
that that are needed, and you know, are starting to
evolve a lot more in eventually thought processes that it
can actually replace a lot of the software companies that

(30:12):
are out within the space. I think Microsoft is a
great company, absolutely beautiful company. I mean, we talk about
revenue and profitability, growth, amazing, balance sheets amazing. You know,
obviously they've been caught up a little bit in this
CAPEX trade as well. They've been spending a lot to
make sure that they continue to be one of the
forefront leaders within the AI space. But I think everybody

(30:34):
focuses on the software trade and Microsoft gets caught up
and sold off. But you know what a lot of
people don't talk about, and it's really just been kind
of in the undercurrent of these markets. But we've seen
a lot of momentum behind it as quantum computing that
is really going to be the next leg Eventually, I
would say in the next three to five years, can
quantum computing is going to be huge, and Microsoft really

(30:57):
is going to be one of the largest leaders in
that space. I think Microsoft is heavily dynamic and you know,
divested across multiple business you know, spaces. So at these
levels that we're seeing Microsoft and I think right now
Microsoft's probably down almost twenty percent. I don't I don't
have my ticker feed in front of me. I would

(31:17):
be a buyer on this side. I really like that
that company, so Ken, that was a great company. Great question,
and I really appreciate you calling in. And I think
folks like that's exactly what I'm talking about. On these markets,
they're so unique that you know, we just see some
of the headlines and you see some of the big
names that are doing well, but you know, you have

(31:38):
companies like Microsoft that are so dynamic and such in
such great shape, and when we look at the fundamentals,
they couldn't be better, and they're selling off. So there's
even though the markets are rich and valuations are high
in certain areas, there's still a lot of opportunity depending
on where where you're looking. So Ken, again, appreciate the call,

(31:59):
and folks, if you have any questions, they don't need
to just be markets or investments, although I love those
questions the most.

Speaker 2 (32:04):
I'm not going to lie to.

Speaker 1 (32:05):
You, but phone lines are going to be open for
the rest of today's show. We got about fifteen minutes left,
and I'd love to hear from another caller to that
number is one eight hundred WGY Again, that number is
one eight hundred eighty two five five nine four nine.
So one last thing I want to just quickly touch
base upon, since we've been talking so much about investments,
and then we'll get into some economic data because I

(32:26):
think that's important as well. And what I want to
touch base upon is how well.

Speaker 2 (32:31):
These markets are doing.

Speaker 1 (32:33):
And so many times I'll feel the question from a client,
family member, friend, whatever the case, Memba, you fill it in,
and they'll say, you know, this market, it can't last.
It's just like the tech bubble and it's going to burst.

Speaker 2 (32:47):
This is a bubble.

Speaker 1 (32:48):
So oh okay, yeah, no, So let's do some research
between the tech bubble and what's going on right now.
So if we hop back to the tech bubble, we've
got to start back in nineteen ninety and in nineteen
ninety five, the SMP five hundred was up thirty seven
point six percent. In ninety six it was up twenty
three percent. Ninety seven, it was up thirty three point

(33:10):
four percent. Ninety eight it was up twenty eight point
six percent, and ninety nine it was up twenty one
percent before we finally hit two thousand, when we're down
nine point one percent. So that was five years of
consecutive double digit returns. And these aren't eighteen double digits, right,
These are north of twenty percent with two years being

(33:31):
pushed into the thirty percent range. That is extremely strong
market performance, much more concentrated than what we've seen. Right,
So we go back five years. So let's go back
to twenty twenty two, SMP five hundred was down eighteen percent,
twenty twenty three were only up twenty six percent, twenty
twenty four we're up twenty five percent. Last year we're

(33:51):
up just about eighteen percent, seventeen point nine percent, don't
call me a numbers guy. And then so far this
year we're up about ten percent in the SMP five hundred.
So one, these numbers aren't even close to what we
were seeing during the tech bubble. But more importantly, what
I always need to always bring people back to, and
I'm going to keep on beating the drum until you
listen to me, is that this market comes down to

(34:12):
profitability and revenue. We have established companies that have real earnings,
that are investing within these markets, compared to what we
saw back in you know, the dot com bubble, which
was not the case. You know, the Internet was real,
but many of these dot com stocks were not. You know,
AI is real, you know, but unlike you know what

(34:33):
we saw back in two thousand, we finally saw you know,
the pullback. All the companies today that are the leaders
have massive revenue, real earnings, and the financial firepower to
build the infrastructure themselves. This isn't beholden on the back
of all the you know, telecom companies laying billions upon
billions of fiber optics just to try to you know,

(34:54):
bolster up their books to make themselves look good.

Speaker 2 (34:56):
That's not it.

Speaker 1 (34:57):
There is no phantom money, there are no shell companies.
They're can be on the fringes. But when we look
at the concentration, the nucleus of this AI trade, it
is very much real. So I think from a valuation standpoint,
where nowhere close to what we saw during the dot
com bubble, and you know, also from a revenue of
profitability in a Ford forecast, no we're even.

Speaker 2 (35:16):
Close as well. This is this is very much real.

Speaker 1 (35:19):
But I just wanted to touch base on that before
we hopped into some economic data, because again, I've just
been hearing time and time again more of these correlations
between right now and what we saw back in the
late nineties, early two thousands, and I just wanted to
give you that piece of information. So, folks, so let's
let's kind of talk about some of the economic data
that we've had. You know, obviously everybody's been super focused

(35:41):
on the inflationary events that we've been seeing, just because
oil prices have been skyrocketing with the straight of horn
Moose that was shut off due to the conflict with
then I ran, So.

Speaker 2 (35:50):
I definitely want to talk about that.

Speaker 1 (35:52):
But we also got to talk about the jobs report.
Right there's been growing concern over the last I would
say six months or so that we have been seeing
a material weakness within the labor numbers. So on the
fifth of this month, you know, just about two weeks ago,
we did get May's jobs report, and we added one

(36:12):
hundred and seventy two thousand jobs. Now, that might not
mean too much to you, so we always had to
put that in perspective, and then to put it into perspective,
we were only expecting eighty thousand jobs, so we more
than doubled what was expected. Obviously, that is a show
of strength within the labor numbers. And on top of that,

(36:34):
whenever we get a month's job support, we'll also get
revisions for the month before that. So we got revisions
for aprilst Jobs report, and we saw that also get
revised up to one hundred and seventy nine thousand jobs
and unemployment sits at four point three percent. So labor numbers,
they're looking good, they're looking solid. I mean, these are

(36:54):
not you know, COVID growth that we saw where we're
adding you know, nine hundred thousand jobs in a month.
If we don't want that, we want to be more
of an a marathon pace, something that's sustainable over the
long term, and these numbers show exactly that. And that
also is shown within the four point three percent unemployment rate.
That shows stability, That shows something that could be sustainable.

(37:15):
And I think that's really important. And the reason why
that's important is because remember when we look at our GDP,
what makes up seventy percent of our GDP us me
you listening, family members. The US consumer makes up seventy
percent of the US's GDP and if we're not employed

(37:36):
and we're not out there spending, that's not going to
be good for the US economy. So showing that we
still see resilience within the US labor market, that's another
feather in the cap towards hey, we have some sustainability
within these markets.

Speaker 2 (37:50):
And then on June.

Speaker 1 (37:51):
Tenth, so just about ten days ago, we also got
May's headline CPI and this is where the band aid
needs to be ripped off. We did see headline CPI
come in at four point two percent. That is certainly
elevated due to the conflict and I've ran, and also
the highest headline CPI number since we've seen since April

(38:12):
twenty twenty three.

Speaker 2 (38:14):
So that was a little bit of a shock, a
little bit.

Speaker 1 (38:16):
Of throwing some cold water on the face of Waite
your episode. Oh geez, okay, hey, inflation's here.

Speaker 2 (38:21):
Now. What was important when we looked at that CPI.

Speaker 1 (38:23):
Report is looking at core inflation. So what core inflation
means is you strip away the voweltle aspects of the CPI,
most notably is energy and food, and if you strip
those away, core was at two point nine percent. Now
you might say Paula, Why would we ever want to
look at core. The most important things is putting food

(38:44):
on the table for my family and filling up the gas. No,
I get it, that is the most important. The reason
why we want to look at core is food and
energy could be volatile, right, it could go up and down.
But if we look at core, which is mostly shelter,
that's going to be what's important because it's the most
sticky and that's not going to be as volatile.

Speaker 2 (39:02):
It's not going to go up and down as much.

Speaker 1 (39:03):
So if CORE is pointing one way, that means that
headline should follow and suit, and that's exactly what we
saw within core. There's only two point nine percent. So
what that said to us here, especially in Bouchet looking
at our portfolios, is if cores at two point nine percent,
we're fully in the camp that we're eventually going to
see resolution within the Middle East. And if we see

(39:24):
resolution in the Middle East, we'll see a direct indication
of that with oil prices dropping and then to drop
within headline inflation.

Speaker 2 (39:32):
So while May's.

Speaker 1 (39:32):
Headline inflation is at four point two percent, we think
that we're going to see relief on the way I
don't know if that's necessarily going to be junees we're
just starting to see it drop in oil prices, so
we're more than halfway through the month, but certainly should
see some relief with July and in August, as long
as the continued peace talks within Geneva, Switzerland go well again.

Speaker 2 (39:53):
I talked about a little bit earlier.

Speaker 1 (39:54):
Those were postponed through some ongoing conflicts within Lebanon. Again,
all signs points a continued resolution which should be a
huge relief in CPI numbers. And then finally, on Wednesday
of this week, our native man Kevin Walsh his first
FED meeting, when sort of as expected. You know, obviously,

(40:19):
when Trump nominated Walsh, there was a huge thought process
that worsh was going to be very dubvish, which means
he was going to cut rates, right because Trump doesn't
matter if you listen to markets or not. I'm sure
you've heard him or heard a tidbit about how he
feels about where interest rates lie right now. He feels
that interest rates are.

Speaker 2 (40:39):
Elevated and they need to be cut.

Speaker 1 (40:42):
So with that sense in him nominating Kevin Walsh, that
thought process was Kevin was going to come in and
cut rates. That's not really how Wednesday's meeting went. Came in,
decided to keep rates where they are, so we sit
at the federal funds rates between three point five percent
and three point seventy five percent, and had a little
bit of a hawkish tone, meaning that, hey, I'm not

(41:04):
going to forget that the FEDS you know, directive towards
where inflation should be, should be the Fed's target two percent.

Speaker 2 (41:10):
We're going to get there.

Speaker 1 (41:12):
So then multiple times, and obviously that could be digestives
being a little bit hawkish. So the markets kind of
took that as like, oh, geez, okay, maybe we aren't
going to get a dubbish FED governor and FED share
and we you know, saw some volatility over it.

Speaker 2 (41:26):
But then Fed.

Speaker 1 (41:28):
Kevin worsh did his speech after and lightened up a
little bit on his tone and just said that you know, look,
you know, we're going to be focused on our dual mandate,
which is, you know, maximum employment and stable and stabilization
of prices.

Speaker 2 (41:43):
We're going to get down to two.

Speaker 1 (41:44):
Percent, but had his tone more towards like, you know,
not as hawkish as originally the letter read. So markets,
you know, kind of reacted a little bit better after
he spoke. But you know, we always look at the
Federal funds futures market, which is the you know, the
prediction market, to see where the Fed is going to
bring interest rates going forward. And where we you know,

(42:06):
started this year is we're gonna you know, the Fed
Fund's futures market was looking at two twenty five basis
point cuts. Now we're looking at no cuts. With conversations
around is there going to be a rate hike? Now,
I'm personally in the camp that we're not going to
see a rate cut this year, I mean rate hike
this year, just because again we're going to see continued
resolution with it in the Middle East, and if we

(42:26):
see oil prices continue to drop, it's really going to
help bring down headline inflation. So I don't think that
we're going to see a rate hike of twenty five
basis points in the second half this year. But that's
where we you know stand, you know right now in
the Fed Fund's futures market is the you know, the
potential chance of that happening.

Speaker 2 (42:45):
So it was.

Speaker 1 (42:45):
A data filled week and yeah, that's you know, again,
we really wanted to focus on that Kevin Worsh meeting,
and I think, you know, he did a good job
for his first meeting, and he just said that transparency
and forward guidance isn't going to be as much of
a goal as the previous administration with A. J.

Speaker 2 (43:05):
Powell.

Speaker 1 (43:06):
But he also said he's just I'm going to set
up a task force and people are going to own
certain jobs. And I really like that, you know, kind
of diversifying out, having people really focus on certain areas.
I think that brings a lot more you know, utility
and uh successfulness to certain parts. So I wish Kevin
Worsh a tremendous amount of uh, you knows. I give

(43:27):
him a tremendous amount of respect and the hope that
he does very well again, especially being a native man
out of you know, the Capital district, you know, being
a Shaker grad. So, folks, we're coming up in the
last five minutes. I'm going to try to fire off
some more information for the next five minutes. But if
you have a quick question again, feel free to call in.

(43:47):
That number is one eight hundred talk WGY. That's one
one hundred eighty two five five nine, four nine. But
something else I really wanted to quickly talk about, and
I think I could fit this in within five minutes.
It's something I usually talk about a lot when I
when I host these and that's direct indexing. So traditionally speaking,
when we run our models, especially on qualified models, so
that means retirement assets, whether that's an IRA roth IRA

(44:10):
four to one K ROTH four one k set iras,
whatever the case might be your retirement accounts. We usually
run ETF models exchange traded fund, so that's a single investment.
Within that investments, there's hundreds and hundreds of companies that
make up that ETF and it could give us exposure
to anywhere that we want within the markets. And what
we've been transitioning into a lot is within our taxable accounts.

(44:33):
We like to implement something called direct indexing instead of
our ETFs. And what direct indexing is is it's just
like our ETF models, but instead of the ETF model,
we're holding on to the individual.

Speaker 2 (44:46):
Stocks that make up that in that ETF.

Speaker 1 (44:50):
And the reason why we want to do that is
the power of tax loss harvesting. Right by holding all
those individual stocks, we have the opportunity to tax loss
harvest at any given point where if you held on
to an ETF, you don't have as many opportunities in
any positive year. On the S and P five hundred,
about fifteen to twenty percent of the actual stocks that
make up the S and P five hundred are negative.

(45:10):
So by doing direct indexing, it just allows us so
much more flexibility for tax lost harvesting, which is real
tax savings for you and future tax savings are off
setting capital gains for you know, distributions, whatever you may need.
And also gives us so much more flexibility around individual stocks.
You know, obviously, so many you know people have done
so well with individual stocks that now they have you know,

(45:32):
concentrations in those positions, and now we have the ability
to write derivatives around those to cap the amount that
those stocks can go up and buffer the amount that
those stocks go down. So we've just been doing so
much with direct indexing. I really encourage you, if you
have an advisor right now, talk to him about that.
It's really really powerful. In folks, this is it. This

(45:53):
is the end of today's show. I really appreciate everybody listening.
I hope you have a tremendous rest of your weekend.
You're listening to Let's Talk Money, brought to you by
the Bouchet Financial Group, where we help our clients prioritize
our health, where we manage their wealth for life.

Speaker 2 (46:06):
Thank you and have a great weekend.