Episode Transcript
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Speaker 1 (00:00):
Good morning, and welcome to the Capitol District's Money an
Investment Program. You're listening to the Fagan financial Report on
Dennis Fagan. Sitting here with my son Aaron, as we
do every Sunday. We're right here in News Talk A
ten one O three one WGY. We're actually not sitting
here on Sunday. It's ten thirty eight, Friday, September fifth.
Happy birthday to Uncle Mike.
Speaker 2 (00:17):
Happy birthday, Uncle Mike.
Speaker 1 (00:19):
It's Friday, so sixty two years old. Hard working guy,
great guy, good guy does a lot.
Speaker 2 (00:25):
To fit there for you, no matter where, no matter
where you were, no matter what you needed, he'd be there.
Speaker 3 (00:31):
Yep. He rescued Aunt Mary and Uncle Bill from.
Speaker 1 (00:34):
A spot in the Adironics down a dirt road and
they got two flat tires on the dirt road when
probably twenty years ago.
Speaker 2 (00:42):
He brought my bus up from Florida that he.
Speaker 1 (00:45):
Brought your bus up from Feu did too, So I rode.
He was like there and he got sick a little
bit from the diesel fuel. We caught fire on nine
ninety five. There was there was We didn't really know it.
It wasn't really a fire. It could have been.
Speaker 3 (00:59):
It was a diesel truck.
Speaker 1 (01:00):
So we're driving up by ninety five and I know
you know the story, but on this bus nineteen eighty
six International.
Speaker 3 (01:07):
School bus, a short bus. Yeah, and it was for
sale down there.
Speaker 1 (01:11):
And I remember, I, you know, tell you all the
time no, no, no no when you ask for things,
and you're like, hey, why do I get this bus?
And I can take friends of mine at the concerts
and ball games and things like that and make make
a few bucks. I'm like, all right, it's entrepreneurial, thank you.
So I said, yeah, So we got the bus. We
had three flat tires, broken fuel line, and getting back
to the fire. When the fuel line broke, it was smoking, smoking, smoking,
(01:35):
and Uncle Mike kind of saw the smoke out the back.
So we got off by ninety five in South Carolina
and came to a stop and that smoke that was
trailing us just came billowing into the bus right and
then and then we're like starting.
Speaker 3 (01:53):
To throw all all the good stuff we had out.
Speaker 1 (01:55):
None of your stuff we went down because we got
stuff out of your apartment, kay, but it was all
junk more or less, you know, college stuff, So we
throw that out. We just throw like our stuff out
of the bus, his tools, you know, my clothing that
we had brought for the trip, and that thrown out
of the bus. And I was about to open the
hood and he's like, don't whatever you do, don't open
the hood because it allows air in.
Speaker 3 (02:17):
So I never really caught fire. But we drove over.
I'll make this we two minutes into the show.
Speaker 2 (02:22):
We drove over to it's a great story.
Speaker 1 (02:24):
Drove off the exit and over to a small a
small service area. It wasn't even a service there was
like you know, it wasn't anyn Love's or certain there
was no BUCkies back then. It was just small mom
and pop type service station. And we called Big Daddy
was a guy's name who they gave to us who
(02:44):
would come and take over the bus. And he was
and he came was packing heat. He had a pistol
on each side of his of his way. Yes, So
then we had to take a car a taxi into
into Savannah and then we looked around and we got
another fuel pump.
Speaker 3 (03:03):
But it was it was a mess getting up to
uh to Albany from there. But anyways, that's.
Speaker 2 (03:08):
Just thank you for that. Yeah, thank you too. And
the bus is still here.
Speaker 1 (03:11):
Bus is still But you also said something, and again
we're three minutes in the show. You said something about
the number one.
Speaker 2 (03:18):
Yeah, the number one key to happiness, as told by
someone I don't know, is resilience. Anyway, you know, I
just told you that before. I thought it was interesting
and it makes a lot of sense, you know. I
think you're happiest with yourself when you do hard things
and and uh, and you achieve even if they're small goals,
small goals, you know, right when you work hard. And
(03:39):
I just thought it was interesting.
Speaker 1 (03:41):
Swing the bat, Swing the bat, Swing the bat. Even
if you miss, just swing it. Like I don't think
you have to achieve something, but if you try it,
try it something. You know, you fall down, get up,
full down, get up, full down, get up, and even
if you fall short of your goal, so what so on? Hey,
and and that is falling short of the goal is
really what the labor.
Speaker 3 (04:00):
Market did this past week.
Speaker 1 (04:03):
Non foreign pay rights for the month of August of
twenty two thousand about fifty some thousand less than expected.
Anticipator of the consensus was about seventy five thousand. Unemployment
rate ticked up to four point three from four point
two percent June was revised down to show actually losses
and jobs, and it really was a service sector that
(04:24):
led the way, with healthcare and public service, you know,
manufacturing down.
Speaker 3 (04:29):
Twelve thousand, and it really puts the FED in a pickle.
Speaker 1 (04:34):
Now we have the PPI and CPI inflation numbers coming
out next week. The FED meets on September the sixteenth
and seventeenth. I believe it's a Tuesday and Wednesday, two
weeks from now ninth, so the sixteenth and seventeenth, and you.
Speaker 3 (04:47):
Know, they've got to cut it.
Speaker 1 (04:50):
They've got to recognize the labor market is usually the
last one to turn, both positively and negatively, because who
really wants to.
Speaker 3 (04:57):
Lay off workers? So that's the last that you do.
Speaker 1 (05:00):
You cut your cut advertising, you cut technology spending, you
cut infrastructure, you do this, you do that, and then
finally I go, we gotta right, we got to cut
some labor so or not higher. So I think you
saw that in these numbers. You also saw the kind
of kind of the beginning of the impact of AI
and you also probably saw the the lack of really
uh new immigration immigration coming in, you know, impacting those numbers.
Speaker 3 (05:25):
Ready ready, and I.
Speaker 2 (05:26):
Think that, you know, Cramer was talking about it a
little bit on c NBC after the numbers came out,
and it's true. I think there's so many what is oh,
there's tariffs, no, wait, the court world that the tariffs
are legal, there's this, there's that. It's like, you know,
it's it's hard for these companies to uh do anything
really when there's so much uncertainty. You know, if you work,
if you own a business, if if you work in
(05:48):
the stock market, you know you uh you have like
for us, like, yeah, we compare everything to the you know,
to the risk free rate, which is a treasury right,
so we know that you know, if are this percentage,
if they're lower, we think a company is valued at
this uh so, and so you know there's more they
go into it that that's kind of just I guess
the point I'm getting at is, you know, if if
(06:10):
these companies don't know what our landscape looks like for business,
they're not going to do anything. So I think we
need to get over this. What this this this this
back and forth game. So companies know where to invest,
what to invest in in, what to uh you know,
what return on investment they can realistically, yeah, expect if
(06:33):
they have to produce, if the labor oversees here, and so,
you know, I think that's that's uh, I think one
of the bigger fears, you know, I think stagfation a
little bit, but also you know, the fear that we
have a slowing economy because everyone's in wait and see.
Speaker 1 (06:50):
I think President Trump talked about that three or four
months ago, probably you know, either in March or April
or May that you know, there was going to be
a transition period and maybe that's what we're in now,
you know, and then that could go could last for
a while. And I think you were just kind of
alluding to it that you know, this could this transition
period if it's a tactic by the president, these tariffs,
(07:13):
and so if that tactic or strategy that he uses
is going to be deployed for the next two or
three years, you know, it could this could go on
for this uncertainty.
Speaker 3 (07:24):
Now.
Speaker 1 (07:25):
The other thing, too, is that the Fed meets in
a couple of weeks. You know, by all, by all measures,
they are going to cut you know, by a quarter
point at least, and then and then we'll see where
they go from there. We mentioned we do have the
producer and consumer price indexes that come up next week,
and we also had other economic data that came out
(07:46):
earlier in the week that suggests that the economy is
doing okay.
Speaker 3 (07:50):
You know, it's okay. It's not great, it's not bad,
it's okay.
Speaker 1 (07:53):
You know, you have Institute for Supply Managements their manufacturing
sector and that's actually improved to forty eight point eight
during August compared to in July, still below kind of
the line in the sane economy.
Speaker 2 (08:04):
Right.
Speaker 1 (08:05):
We also had this so but that that's about thirty
percent of the economy. The service sector is about seventy
percent of the economy, and that's at fifty two. And
if you use that same kind of line in the
sand or of fifty, then we haven't expanding economy there.
So so things are doing okay. U Employment initial claims
on employment benefits for the weekend in August THIRTI at
the two thirty seven, still below the two fifty or so.
(08:28):
But yeah, factory orders fell, construction spannings down, private construction
spanning down four percent.
Speaker 3 (08:33):
Year over year, So there's an oil.
Speaker 2 (08:35):
Continues to fall. You know, this wa sixty sixty three
dollars a Barreland. I thought that was interesting. And I
don't know if it's a sign of a slowing economy,
but you know, if it seemed like it could, it
could be.
Speaker 3 (08:49):
I think it's more. I think it's more, Yeah, I do.
Speaker 1 (08:51):
I think it's more demand than supply, right, yeah, you
know the demand by demand.
Speaker 3 (08:57):
No, I think it's more demand lack of.
Speaker 1 (08:59):
Demand than real And really, you know, a glut of supply,
you know, and I also think you know, you have
more and more people have have worked from home, our issues.
You have a Sudie input going up or output going up,
excuse me. So you've got a few things going on
there that is impacting this supply. You also, you know,
(09:21):
the market keeps chugging along. As of the close of Thursday,
the S and P five hundred closed at a record high,
back over sixty five hundred. You know, there was a
good article that that that that that I was looking
at air and it's and it's it's not not in
the in order in the pack that I gave you.
But let's but if if you look at the one
why does this crazy stock market keep ignoring Jack Bogel's
(09:44):
iron rule, and I just mentioned that.
Speaker 3 (09:47):
Yes, it's about five or six articles deep.
Speaker 1 (09:50):
Uh and in the pack that I gave you, why
does the stock market, this crazy stock marke keep ignoring
Jack Bogels iron And.
Speaker 3 (09:55):
The iron rule is reversion to the mean.
Speaker 1 (10:00):
You know that at some point in time the market
is going to revert back to the mean, and that
we are going to have a correction that is going
to be substantial.
Speaker 2 (10:12):
But from where you know what I mean? So I
think that's the question. Yes, you know what, we see
a ten percent pullback probably, but will it be from
ten to twenty percent from now?
Speaker 3 (10:22):
You know?
Speaker 2 (10:22):
So you know, I think stocks are fairly valued here.
You know, I think I guess a fear of mine
is that we believe the impact of AI will be
sooner than it actually will. So yeah, I think I think.
But you know, we just got through earning season. Google
(10:42):
just got over there what anti trust litigation I guess
with with the US government. They just had good earnings.
Microsoft just had good earnings. Amazon had good earnings, so
Meta had good earning. So you know, these large cap
you know, you can say, hey, you know, the there's
a little bit of fear that the largest companies in
(11:05):
the world represent so much of the S and P
five hundred and it's starting to look you know, bubbly there.
But at the same time, these companies aren't like you know, Cisco,
of the two thousands of I don't know, you would
know more names than me. These companies are a lot
of money. They have tons of cash, right, you know,
they have great margins, and they have some of the
smartest people in the world working for them. So I
(11:28):
don't know, I just don't think it's I think it's
too early to say, hey, these are you know, grossly overvalued.
You know, we're in for a twenty percent pullback.
Speaker 1 (11:36):
Well, that article goes on to say, and he's h
Adam Cecil Cecil of Gravity Gravity Capital Management. He wrote
a book where the money is value investing in the
digital age. He basically says, but our coal's target, another
brick and mortar retailer is going to come back. And
on the flip side, is Amazon dot Com going to
(11:58):
revert to the mean? On the side the e commerce is
fifteen to twenty percent of retail sales in the US.
Is that number going down? And he basically saying, look,
you know, things are different. A reversion to the mean
is Amazon, excuse me, our Coals and Target who are down,
is their stock price also going to revert back up
(12:19):
to the mean?
Speaker 3 (12:21):
You know? It doesn't. It's not logical that that the
reversion to the mean.
Speaker 1 (12:28):
Implies everything for this, for this, everything for the same company,
meaning that Amazon is a stronger company than Coals and Target.
So it doesn't necessarily mean it has. I think that
the big risk right now, I think is is at
some point in time you need you need an exit
(12:51):
strategy for some of these high flyers. And I think
some of what we've seen come into the market late.
I don't know how you feel, but some some like
the core weaves of the world, uh, you know, they
just they've got they've they've got to pull back a bit,
and retail investor has to get burnt a little bit
on some of I think they retail investor and even
people like US professionals who are just over their skis
(13:14):
and and I'm not talking about the Amazons and the
Microsofts of the world, but but some of the higher flyers,
I think I think they're gonna get their come up
and and and just and and we've.
Speaker 3 (13:24):
Got to move towards a higher level of quality.
Speaker 1 (13:28):
Uh yeah, you know, then then we then we have
you know that that that and and I think in
September is usually a good time frame for that for
that to common. And who knows what percentage it's gonna be,
and who knows if I'm even going.
Speaker 3 (13:43):
To be right.
Speaker 1 (13:43):
August is also typically a pretty pretty bad month for
the market, and the and the market moved up in August,
Like I said, the S and P five hundred was
trading at a record high so through yesterday. So I
think that, but I do think that that what reminds
me of the late nineties, and they have been in
this business since nineteen eighty three, excuse me, is more
(14:08):
that it's not tech in general, tech is forty percent
of the market. It's more components of tech that are
a little bit you know, a little old valued, you know.
Speaker 2 (14:18):
And I think, you know, we say it all the time,
but we see all the trades that come through that
we do. Then we see all the trades that other
people do. Clients do so they can go into their
own accounts and trade their own accounts, and you're seeing
a lot more sound hounds. You know a lot of
artific AI names that really don't have any earnings yet.
So those are the things that I would always be
cautious with, especially if you're in retirement or nearing retirement,
(14:40):
Like it's just not worth it, you know, in my opinion,
to have a substantial amount of your money and a
lot of names like that. I do think that you know,
if you do want to buy some take five percent
of your portfolio and allocated towards those names. But you
don't have rules, and I think, you know, with investing,
I think the key thing to do really is always
have rules for yourself in a by those be too confident.
(15:03):
But yeah, I think a lot of those names are
looking a little for our things. Well.
Speaker 3 (15:06):
You know.
Speaker 1 (15:06):
The other thing too, is like I think if you
when you talk about in retirement, I mean we talked
about this last week. I think, you know, you cross
over into that threshold of financial independence. And if you
think of the threshold and it is like a door,
you know, you just don't want to go back out that. Yeah,
you know, the chase. The chase is over, so to speak,
and now you've got to you know, lock down some
(15:28):
of the some of the gains that you've made over
the years. I was reading one of the reports we
got the average sixty old has fifty five percent of
their accounts and then the target dated funds in formal
case in the stock market. You know, I think, I think,
you know, fifty sixty five percent, seventy percent in around
there up to seventy percent is appropriate, but not not.
Speaker 3 (15:51):
All seventy percents are alike.
Speaker 1 (15:53):
Yeah, you know, and I could think of a few
people and you know, the clients that and we have
a handful of people who go into their account traded and.
Speaker 2 (16:01):
You know, it's not many, it's not many.
Speaker 3 (16:03):
And nor should it be, and that's not what we're
here for.
Speaker 1 (16:05):
We just kind of, like to be honest with you, tolerated,
you know, we just tolerated so and we put them
down as you know, unsupervised trade. But the thing, you know,
as far as compliance goes. But the thing, I guess
my issue is that those those put the the the
(16:26):
that that's sixty five or seventy percent of those types
of stocks are much different than when you construct a
portfolio intelligently. There's gonna be a come uppance for some
of the more aggressive companies out there but.
Speaker 3 (16:41):
There's gonna be something that that'll do real well.
Speaker 1 (16:42):
I don't think the average person can differentiate between the two,
and so I do think there's going to be some
issues along the way with some of those companies. Anyways,
what else we got on our on our on our
plate here the market? You know, there's no the you know,
I don't know you've seen any any topics that you know,
(17:03):
kind of uh appeal to you within that uh within
the pile that I gave you just about I was
late giving you the pile today.
Speaker 2 (17:10):
No, I thought it was interesting that you know, it's
his mark your rotation picks up steam in the latest
reminder of a key investing rule. And that's kind of
what we were just talking about. If you look at
the RSP for the week, that's the wrong ch RSP
for the month, let's do the month is up two
point four.
Speaker 3 (17:28):
Two RSP is an equal weighted et S and.
Speaker 2 (17:34):
P five hundred is up two point eight four percent.
So you know, you haven't really seen it yet. And
I think you know, we're always going to hear about
that rotation. You know, should you rotate, should you rotate?
Should you rotate? You know, I don't necessarily agree with it,
because I think by the time you have rotated into him,
everyone else has already rotated into him, and it's it's
(17:57):
it's kind.
Speaker 1 (17:57):
Of over well, you know, And I think that I
think when you when you talk about a rotat you know,
I do. I do think the market is broadening out.
I think I do, you know, I do think that
we are beginning to see you just look at the
the IWM, which is the S and P U second third,
the Russell two thousand, second third thousand largest American stocks.
(18:19):
It's up four or five percent over the trailing month
as opposed to the S and P five hundred.
Speaker 2 (18:25):
It's up seven point six percent trailing months seven point
six seven percent. So you know, I think you are
And I think what it goes on to say, you know,
when I think about the RSP is I think if
you're in retirement or nearing retimement, you should have a
diverse portfolio anyway. You know, I think you do have
obviously some of the you know, Googles and Amazons of
the world, but you know, you really should have a
(18:46):
diverse portfolio anyway that should really do well when there
is a market rotation. But it does say, you know
how multiple stocks are called high flowers for a reason,
and moves like this highlight why we constantly look to
lock in gains after parabolic moves. And I think that's,
you know, just a smart thing to do. You know,
if you have Palenteer that when from twenty two to
(19:08):
one hundred and two hundred, almost one ninety, you know,
it's just the right thing to do to pair that
back to not be too much of a percentage of
your portfolio where if let's say about two percent of it,
it went up to ten just based on capital gains.
That you know, it's just a prudent thing to do
to trim that down. And I think that's you always
have to be on the lookout for things like that
if you have your own portfolio, you know, not get
(19:28):
too greedy. What did what did the you know we
were talking about that the other day. Pigs, Uh, pigs
get deadlaugh Wader. And I think, you know, you have
to stick to your rules because if not, you know,
when you when are you going to get out? When
are you going to get in? You know, it's just
it's just too much, too uh to deal with mentally,
(19:49):
I think.
Speaker 1 (19:50):
And you know, so I think, you know, I think
some of those rules would be diversification, diversify your portfolio, trim,
trim your winners, trim your winners. You also want to
take into consideration taxes go to help your tax structure
if it's a non qualified account. I think, you know,
(20:13):
stay within your your asset allocation model. So if you're
a growth and income investor and you want sixty to
seventy percent of your money in the stock market, periodically
review that to make sure you're within those parameters. You know,
I think that you you know, you diversify across market capitalization,
you diversify across geographically, You diversify across industry, and then
(20:36):
that's on the equity side. On fixed income, you diversify
according to duration, their maturity. You diversify credit quality, and
you know, sometimes you diversify geographically some international bonds. It
all depends upon your level of sophistication. But those are
some things that really I think the gamification we talked
about that earlier off the air, the gamification of Wall Street,
(20:58):
you know, is is going to come back at some
point in time, you know, to hurt people at least temporarily.
You know, you know, but right now, you know, and
the other thing too is and I do agree with you.
I think the market, the market is fairly valued. I
like our portfolio, like.
Speaker 3 (21:12):
What we own.
Speaker 1 (21:13):
We've made some changes, We've got it. We have to
continue to make some changes. But I think that the
the other thing, there are pockets. The market is not
one entity. You know, there are pockets within the market
that you know, there there is, there's there's opportunity. You know,
there's there's there's real opportunity. Like you look at Lily Eli.
(21:34):
Lilly is down sixteen points today, it's probably down from
maybe nine hundred change to seven twenty six. Bristol Myers
is going from uh and these are just examples. I'm
not saying we're buying these today, but Bristol Myers is
going from sixty to forty forty seven or so.
Speaker 3 (21:48):
You know, you have to begin to look at these areas.
I mean, you've.
Speaker 1 (21:51):
Gotten you've gotten resets in like a ge Vernova. You know,
GeV Vanova is down twenty seven points today. And again
I'm not saying to those, I'm just saying you you
there are opportunities to prevent present itself when things get
too hot. And then cool off a little bit. That's
where you want to look to pick up some of
the winners that the companies that are sound investments but
(22:13):
are just out of favor right now, because like you
look at Gievenova, it's down ten percent over the past
a month. The S and P five hundred is up
three percent, so you've got a divergence of around thirteen percent,
you know, and now that that gie Ivanova is still
up forty to eighty two percent year to date, So
I would continue to wait for that to come in.
But you know, there's there's things just to look at
(22:36):
within your portfolio. And one of our favorite, I think
one of my favorite funds.
Speaker 3 (22:40):
There is that that the the DGT the Global Cow.
Speaker 2 (22:43):
It's about forty fifty fifty two forty eight US to
to to International Great Fund. It's about twenty percent for
the year. It's kind of lagged the past few months, though,
I think most of it's gain was in the first
you know, four months, essentially seven percent.
Speaker 1 (22:57):
Over the trailing three months, you know month it's up
four percent, So it's kind of yeah, happily wrong right.
Speaker 2 (23:05):
The other way around three six percent for the year.
It was down at one point this year, you know,
in April seventh, so it's had quite the rally of
about twenty seven percent.
Speaker 1 (23:12):
Sent then it has so conclude the first that we
talked about diversification. Uh the second half, I think we'll
pick up on uh boring beats fancy Warren Buffett turned
ninety five the other day, ten of his biggest investment lessons.
Speaker 3 (23:27):
I think we can all learn a little bit about that.
Speaker 2 (23:29):
Good one.
Speaker 1 (23:29):
Yes, and uh so we'll open up the second half
with that. But right now it is just let me
see what else?
Speaker 3 (23:36):
What else?
Speaker 1 (23:37):
What else can we talk about in the second half
before we let the before we go to the news. Yeah,
looten lemon shares, plunch, Retail is tough. We'll talk a
little bit about retail. Right now, it's ten thirty on
the station depend Upon for News, Weather and Information News
Talk A ten and one oh three one w GI.
Speaker 3 (23:56):
Good morning, and welcome.
Speaker 1 (23:57):
Back to the second half out of the Capitol Tricks,
Money and an Investment program. You're listening to the Fagan
Financial Report on Dennis Fagan, Denna Dannis, Dennis Fagan sitting
here with my son Aaron, as we do every Sunday,
every Sunday right here in news to K ten and
one oh three one WG. I've been doing it since
nineteen ninety one or ninety two and around there for
so well, and then I would like to like to
(24:18):
think the time went by that fast, but uh, it's even't.
Speaker 2 (24:21):
Being a kid watching the Giants games. And uh because
it used to be on four right, Yeah, so want Giants.
There's a little TV on. Just go and hang out
in the studio.
Speaker 3 (24:32):
Yeah, she would you go with me? Yes? You would.
You used to have to drive over.
Speaker 2 (24:36):
The market after I remember Boston Market I do had
some great sides.
Speaker 1 (24:40):
Yes, I wonder if it's still around well up there
now and we used to go to Latham. It's uh Popeyes.
Speaker 2 (24:46):
I love Popeyes.
Speaker 3 (24:46):
I like, I don't I don't need to fried chicken.
Speaker 2 (24:48):
But no, you know you're you're kind of a health nut.
You know you've turned into a health nott.
Speaker 1 (24:53):
I wish I were anyways, at the break this second
half hour, good second half hour. Warren Buffett turns ninety
five today as.
Speaker 3 (25:00):
Of August thirtieth. This is a week ago.
Speaker 1 (25:04):
Ten of his biggest investment lessons. What money gurus wish
they'd known in College by Charlie Wells. Interesting little article there,
and then we'll close out the show. Or let's close
out the show with Lululemon shares plunges earnings guidance. Well,
let's start out with lululemonair. Let's do it, because that's
(25:24):
going to take the shortest.
Speaker 3 (25:25):
Amount of time.
Speaker 1 (25:27):
Retail is tough, and you know that more than anybody,
I think because of your age.
Speaker 2 (25:34):
What is tough, I'm sorry.
Speaker 3 (25:35):
Retail.
Speaker 2 (25:36):
Yeah, retail is tough.
Speaker 3 (25:37):
Traditional retail is tough.
Speaker 2 (25:39):
There was a lot of innovation in the past ten
years in retail in general that made it not as
that made the barriers to entry much lower. Right, I
mean even shopify. Shopify has my credit card and address.
I can buy something off Instagram in thirty seconds.
Speaker 3 (25:55):
Right.
Speaker 2 (25:56):
Marketing on Instagram, marketing on all social media platforms. You
can get your brand out there a little bit easier.
I mean, look at the evolution of on cloud, Like
I'm a huge on cloud fan, and the stocks started
to do well. You know, it's your dates down fifteen percent,
but you know three years it's up one hundred and
thirty seven percent. And more of what I'm saying is
you're seeing like like a like a brand like on
(26:18):
cloud and let me just look it up. In general
was found in twenty ten, so I guess a little
bit older than I thought. It was a senior company
in a fifteen billion dollar company. So you're just seeing
the lot. You're just seeing way more brands. Like when
(26:41):
I was growing up, I probably shot that foot locker, Dix,
Abercrombie and Fitch and that was kind of you know,
American Eagle and that was kind of it. You know.
Now I have a lot of different attire from a
lot of different places that just fit me with when
you're not a.
Speaker 1 (26:57):
Big closed person or a you know, really a shoe person.
No no, not really, but you know, and I think
and I'm not. I'm not either. I have I have
gotten likes as I get older, and my feet are
more important to me because they're not as they hearn.
Speaker 3 (27:14):
More, you know. But if you look at Hokah, which
is decker.
Speaker 1 (27:18):
Z owns them, you look at a lot of you know,
a lot of different brands.
Speaker 3 (27:24):
I try to have a couple of brands that I
had never heard of.
Speaker 1 (27:27):
But when you're online, shirts are the same way, and
I think that's you know, it's going to constantly provide
competition to the to the Nikes of the world, to
the Lululemons of the world, and and and because the.
Speaker 3 (27:40):
Methods of shopping. You can see that just just from coal.
Speaker 1 (27:42):
Stock, the way that people shop today is a lot different,
a lot more online, but also the way that even
small companies present themselves.
Speaker 3 (27:52):
There's really no differentiation.
Speaker 1 (27:53):
Between what you see online with the company you've never
heard of and what you see with lul Lemon. If
they can deliver a good product in a timely fashion,
it's going to eat into the to the to the.
Speaker 3 (28:04):
Margins of Lululemon.
Speaker 1 (28:06):
You know, Lululemen came in a little bit light in
expected revenue earnings per share. We're higher than expected, but
they projected full year fiscal full fiscal year earnings of
twelve dollars and seventy seven cents to twelve ninety seven,
which is below the estimate of fourteen dollars and forty
five cents to share. So Lululemons down thirty eight points
(28:26):
to one sixty eight sixteen. Thankfully we don't own it.
We do own Nike, and Nike is in the turnaround
phase of pretty much of there.
Speaker 2 (28:33):
And I love Nike. I'm a big Nike guy. You
are a big Nike but you know you finish what
you're saying.
Speaker 3 (28:40):
Just no, I'm just saying. You know, retail is fickle.
Speaker 1 (28:45):
Retail is fickle, and its it's a difficult industry to
to to really do well.
Speaker 3 (28:51):
In over a long period of time.
Speaker 1 (28:52):
As an investor, I think it's not much different than airlines.
You know, you know, the fashion is fickle, and if
you look at airlines, there's a lot of things that
our challenges to the airline companies that are out of
their control. So generally speaking, we stay away from those
two areas. Like I said, we do own, we do
(29:14):
owe uh n Nike, and I would not consider I
would not consider Home Depot and Low's. Yes, their retail,
but there's such a category killer really it's tough to Yeah,
it's stuff to you know, kind of cut into their margins.
Speaker 2 (29:28):
So anyway, you know, I do think you know, uh,
there was this book Ronchuer. Now he wrote the Hamilton,
the Hamilton book that the play was founded on, and
he wrote a lot of great books. Actually, he's an
amazing writer. He wrote a book on Ah JP Morgan,
JP Morgan, Rockefeller. Yeah, I mean the Mark Twain, but
(29:52):
he also wrote like essays and he wrote one about
it was called the Death of the Death of a Banker,
and it talks about how, you know, when the Gilded
Age was this guy George Baker who was a banker
JP Morgan. You know, their their relationships are really built
on trust, uh, personal relationships and how basically you know,
(30:12):
as we evolve in the banking industry evolves. You know,
then you had the introduction of mutual funds. You know
what I'm getting at is, you know, my generation and
even younger than me, doesn't have the brand loyalty, uh
that your generation has even with banking people will people
bank at ally bank or so fine now because it's easy,
(30:34):
you know, so it's not you don't have like the
you know, even the community bank that people go to
and see the people that they know. It's you know,
and I think that that's what's you know, hard for
for retail, but all companies really right now is you
don't have that that easy recurring customer just because of
your brand like you used to. You know, it's all
about what's quickest and what's easiest, right Because I think
(30:56):
that I think Loul Lemon. I think that'll be a
struggle for Lemon because there's just so many other brands
out there now, right and they and no one has
that Yeah, that that brand loyalty, but.
Speaker 1 (31:08):
That reverberates through many different industries, you know, and I
think AI is only going to exacerbate that problem as
you have you know, uh, communication with you know, non
humans so to speak. A you're on the internet shopping
and b when it's when it's there's a chatbot there
(31:30):
that you have that.
Speaker 3 (31:31):
And I think the other thing too.
Speaker 1 (31:32):
Is like you know, I think when when you mentioned
that your generation does not have the loyalty to let's
call it a bank or a fashion or this or
that banks, and you know, there's a lot of companies
that don't have loyalties to trust themers either, you know,
and shareholder driven. I think, you know, and that's a
really that's a really good point. And I think, yeah,
(31:54):
you're seeing that now even with you know, some.
Speaker 2 (31:56):
Companies that we work with the downsizing of their customer service, right,
you know, they're trying to increase their marksource. They're they're
you know, outsourcing it to you know, India or or
received somewhere. But also, you know, we have less you know,
customer service representatives than we used to. We don't have
that one person to go to like we used to
(32:17):
for some things. That it's a chatbob, you know.
Speaker 1 (32:19):
It's a chatbot that you you you you answer questions A, B,
C D.
Speaker 3 (32:22):
They bring it down, you know.
Speaker 2 (32:25):
Then you submit a ticket and it pops out like
an AI answer that it thinks it's closer. It's like,
that's not what I was asking at all. So, you know,
I think that was a good point that you just said.
Really is you know, it's it's it can get a
little bit dangerous when you know the the duty of
these of of of the main goal for a bunch
(32:47):
of these companies is the shareholder. You know, historically the
shareholders should be.
Speaker 1 (32:53):
I don't know, and a lot of people really and
maybe it's people my age, would you know, you know,
I think that we are we have the gay people
who work here.
Speaker 3 (33:02):
You know, we're live.
Speaker 1 (33:03):
You know, you you will get myself for yourself or Doug,
if you want to talk about your portfolio, if you
need money or change the beneficiary, you'll talk to other people,
but you will take care of it.
Speaker 2 (33:15):
Yeah, And there was a big thing, you know, back
when I was in school. It's like, you know, I
know Compani's main goal is to fulfill its due to
the shareholder, but it really should be the stakeholder. And
that's the change. Yeah, and that's people that are affected
by it, even if you're in a community, if you're
not necessarily a shareholder, but you're affected by the company. So,
you know, I think right now, you know, with with
(33:37):
the market, it's it's all about margins and.
Speaker 1 (33:40):
So you know, you know, so Warren Buffett, you know,
do you know with with AI, there was I forget
who I think it was, Microsoft said that, you know,
investment advisors are going to be replaced by AI, and
I think it's it's I think there's a lot of
tools that we use now to help investors, but emotions
(34:01):
ultimately drive lots of decisions from the retail investors. So
I think it's gonna be difficult for that to happen. So,
but my point was more when bringing that up, is
that you know, ten of his biggest investment lessons, it'd
be interesting to get your input as to whether they're
(34:21):
still you know, you know, viable or appropriate today. Number one,
the one of his biggest investment lessons is don't pay
up for stocks. Buffett generally doesn't pay more than fifteen
times forward earnings for a stock, even when buying at
growth companies like Apple nearly a decade ago, Coca Cola
late in the nineteen eighties, Buffett bought them for under
(34:42):
fifteen times earning. On the flip side, Buffett says don't
second ten lessons, don't be afraid to take profits. You know,
Apple Computer, you know, he has taken some profits, but
you know it's still trading at probably thirty times earning.
So I I think I think one of his I
(35:03):
think he's pretty malleable as far as are flexible on
some of these. But in general, what do you think
of those two statements?
Speaker 2 (35:13):
Yeah, when I saw don't pay up for stocks, you know,
I what I thought was, you know, don't go chasing
a lot of these companies that are already up one
hundred two hundred percent over the past few months.
Speaker 3 (35:23):
You know. So it's like a bigger fool theory.
Speaker 2 (35:26):
Yeah, But you know, I think we have every investor
is different, you know, like you have you have fifteen
times earnings is pretty low right now, right now, right, No,
I think it's a whole different. You know, if the
S and P trades at historically sixteen seventeen percent, I
think it's probably trading at what twenty two right now?
So you know, so what you're not, I mean to
(35:46):
buy a passive ETF and the S and P right now,
you know, according to his rules.
Speaker 1 (35:50):
So I would say that that that And I can't
speak for Warren Buffett, but my guess would be that
rule or lesson would be amended to. You know, have
discipline when buying a security, yeah, and you know, have
parameters as to what you're willing to pay for that security.
Speaker 2 (36:09):
And another one, don't be afraid to take profits, even
if it means paying a lot of in tax I
go back and forth with this all the time. And
I think it's at a situation by situation basis. Really,
you know, I think sometimes you have to take profit
when things do go parabolic. On the other hand, you know,
if you have someone who's eighty five and not in
great health, you know that'll get a you know, step
(36:32):
up in basis in a non qualified account. Do you
really you know, want to So I think it's at
a situation by situation basis as well.
Speaker 1 (36:39):
You know, a client by client like we manage money
professionally obviously, but a client by client basis, and also
a stock security by security basis. You know, you know
there's i mean, Lulu Lemon's down twenty percent today. So
you can get collaborated in even the most blue chip
of companies, so to speak.
Speaker 3 (36:58):
But I'm going to give a company.
Speaker 1 (37:01):
Like Apple a much longer leash or or Goldman Sachs
or JP Morgan than I am in in a in
a sizzling tech company for a number of reasons.
Speaker 3 (37:12):
You know, JP Morgan's They're.
Speaker 1 (37:16):
The foundations of their business are much more sound than
a high flying tech company. Their shareholders have much more
stronger hands as shareholders. They're not they're not going to
trade the stock like they will like a momentum player.
So it all depends upon the company. It depends upon
the tax situation and a qualified plan you don't have
(37:36):
to worry about that like an I A four three
B a pension plan. And it depends upon the age
of the client, the risk level of the client, the
income of the client, and and and you know, throw
all these those uh that criteria into into that that
decision and at the bottom comes Hey, you know, do
I want to peel some of these profits off?
Speaker 3 (37:57):
And if so, how much the thing too? Is there?
Speaker 1 (38:00):
You got I think that the fifteen percent capital gains
tax rate goes up to about five hundred.
Speaker 3 (38:08):
Thousand dollars in income.
Speaker 1 (38:09):
So so if you sell something and you have fifty
thousand dollars in capital gains, you're gonna lose seventy five
hundred to the government. But it's it's if you sell
one hundred thousand're gonna lose fifteen thousand dollars to the government,
you know, assuming that's your entire capital, that's your capital gain.
But still the fifteen percent, So I think it's not
a graduated tax bracket for a zero up to ninety
(38:33):
somethings and.
Speaker 2 (38:34):
Jointly, you know, there's probably a lot of people in
retirement that you know, maybe you're only drawn a little
bit from their four to one k or ira and
have you know some social security that fall below that.
So I think you'll you just have to be aware of,
you know, where you stand from a tax perspective.
Speaker 1 (38:48):
And so married married filing jointly ninety six seven. Yeah,
so you've got to get above ninety six seven before
you're gonna pay any capital gains taxes. Single, it's forty
eight three fifty fifteen percent tax bracket. Married fileing, joining
goes up to six hundred thousand dollars. Now in New
York State, your tax is ordinary income, so that's you
(39:09):
know that could that could be a chunk, and you
also have to be careful that it might affect your
Medicare premium. So those are some considerations that you have
for sure. But just on the surface, that fifteen percent
bracket goes a long way. Married, finally joining, and even
single it goes up to five thirty three five hundred
and thirty three thousand. So when Buffett says, hey, don't
(39:29):
be afraid to pay taxes, even in don't be afraid
to take profits, even if means paying a lot in taxes,
the dollar amount is going to go up, but the
bracket is not going to go up for a long
period of time. I think you just have to have
to be aware of that as you move forward, stick
with what you know. I think he's uh, he's drifted
away a little bit from that with his purchase of Apple,
(39:51):
but in general you're seeing their their larger holdings considered
to be like you know, Coke, American Express, Apple, and
I know they. I believe they own Bank of America
in the Lake. Even though he's trimmed some of that
started early. Buffett was filed filed in the markets as
a boy and reading investment periodicals in the olmhoa of
Public Library from Omaha, Nebraska.
Speaker 3 (40:12):
Seek out great teachers.
Speaker 1 (40:15):
Don't be afraid of concentrated investments. Don't be afraid of
concentrated investments. Give me your take. What is what is
a concentrated investment and what is an.
Speaker 3 (40:29):
Appropriate level five stocks? America?
Speaker 1 (40:31):
This is as of this ready, American Express, Apple, Bank
of America, Coca Cola, and Chevron make up almost seventy
percent of Bucksheers Berkshire's equity portfolio of roughly three hundred
billion dollars at the end of the second quarter.
Speaker 3 (40:41):
Mm hmm.
Speaker 2 (40:42):
You know what is a concentrated portfolio?
Speaker 3 (40:45):
Well, seventy percent of his is. Yeah, I mean that's
a lot, right. How about for a client, what.
Speaker 2 (40:53):
Is a content trade for? What do we aim for?
I think fifteen to twenty five holdings is okay, right?
I think fifteen about anyone stock, ten percent or so yeah,
at the max I would I would max out of
ten percent.
Speaker 3 (41:04):
I agree with that. Yeah.
Speaker 1 (41:06):
And then then so the first thing you would do
is keep an eye on it, right, That's what I
think you keep an eye on a few things. Let's
say this stock gets to eleven or twelve percent, and
then Google right now is about ten or eleven percent
of our common stockholdings, not of our over a portfolio,
but just of the stocks we own. Alphabet Google is
about eleven twelve percent. So aren't we gonna trin that?
Are we gonna turm that? We will at the at
(41:29):
the what we think will be the right time. But
it's certainly on our radar screen. This litigation was on
our radar screen. Their earnings are on our radar screen.
There the relationship with the with the Trump administrations on
our radar screen. Looking for for reasons to cut that back,
but especially going into almost the fourth quarter now the
close of September, you know you've got to take taxes
(41:51):
in the consideration as well. So and if you have
you know, Google Alphabet in a client in two let's
say the same client. A client has three accounts, you know,
two iras and a joint account you know, looked maybe
to take that capital pair back an individual security out
of the IRA rather than the joint account.
Speaker 3 (42:11):
So think of things like that. Hire great managers and
let them do their thing.
Speaker 2 (42:17):
It's a good one.
Speaker 1 (42:18):
Yeah, don't retire too soon, be stingy with share issuance.
And that's why this is the Berkshire stock price sells
at you know, astronomical prices. Do and do something you like.
So those are his ten of his biggest investment lessons.
The other thing too, is that and there's a there
(42:38):
was a is did you did you see it?
Speaker 3 (42:41):
Did you give me that? Uh? The uh talking about
Warren Buffett and being ninety five? Did you give me.
Speaker 1 (42:47):
The article on the fact that the total average annual
expenditures ages sixty five to seventy four is sixty.
Speaker 3 (42:57):
Nine dollars.
Speaker 1 (42:58):
Once you hit seventy five, it's fifty three thirty one dollars.
So people talk about and we've we've always separated, uh,
the active from the passive years in retirement, and we
usually say, you know, seventy eight seventy nine. But if
you look at that number, I think it's very interesting
(43:20):
and it's thought provoking.
Speaker 2 (43:22):
And one of the things I was right. You talk
about this all the time.
Speaker 3 (43:25):
I do.
Speaker 2 (43:26):
I do all the time, passive versus active retirement. You know,
if you just yet, housing goes down eight percent from
sixty five to seventy four to seventy five, plus apparel, entertainment,
food and alcohol, all that all down twenty five plus percent.
So a personal insurance down fifty six percent, transportation down
forty one percent. So you know, are there things that
(43:46):
go up? Yes, but one of them is donations, you know.
The other one is healthcare up through so it's discretion.
So yeah, healthcare three percent. But that's not astronomical, you
know so well, and you know, I think it always had.
I have to remember this when you're in retirement too,
is that you want to take advantage of that active
(44:08):
period phase because you know it's that passive phase just
won't be as much fun, really, you know, and maybe not,
maybe it'll it could be just as fun, but you don't, Yeah,
you don't. Is an entertainment that that you once did?
Speaker 3 (44:20):
Right?
Speaker 2 (44:21):
Well.
Speaker 1 (44:21):
The other thing too, is like I'm sixty three, I'll
be sixty four shortly in the month or so, uh,
you know, and and uh and we you know I've
been doing this a long time and obviously haven't reached
this stage. And here's my here's my two cents of
food for thought. And you're you're the usually receiver of
this all the time, but it bothers me, like, and
I don't know the numbers. I could look it up,
and I didn't look it up, aficial, But you know,
(44:41):
what's the what's the chance of and I'm married, what's
the chance of Mom and I both getting to age
eighty in good health and being able to do the
things we want to do?
Speaker 3 (44:48):
Both? You hope high? But they're not. Really, they're not
high high.
Speaker 1 (44:52):
Yeah, you know your grandparents didn't on either side, right,
you know me. I mean mom's dad, Mom's mom's dad
got sick in these early seventies. My mom, your grandmother
got sick in her early seventies. So what happens is
is that, you know, and everybody worries about and I
am on this soapbox now of what I'm about to say,
(45:13):
Everyone worries about financial armageddon. Oh my gosh, President Trump,
Oh my gosh, President Biden, Oh my gosh, Iraq, oh
my gosh, whatever China.
Speaker 3 (45:22):
But we don't.
Speaker 1 (45:23):
So they're always worried about Okay, I can't invest it,
I can't invest appropriately, or I can't go on this trip,
or I can't do this, or I can't do that.
That that that the likelihood of something happening along those
lines in the market not recovering is is historically really
without precedence. So if you allocate your assets appropriately, you'll
survive those. The armageddon that we're not going to survive
(45:47):
is your health. Right, So the armageddon that's coming for you,
that we know is coming for you, Yeah, you worry
about it, but you don't You don't worry about it
to the extent that it's gonna that's gonna prop to
you or push you to do some things. From sixty
five to seventy four, you know, hope, I hope our
clients tend to die with a lot more money than
(46:09):
they really wanted to and then it's passed down. That's
why this money is one hundred trillion dollars going to
move down from my generation to your generation over the
next twenty years.
Speaker 2 (46:19):
Yeah, you have thirteen thousand people turning sixty five every
day for the next decade, you know, But if you
think that the age of that person is like seventy
one too.
Speaker 1 (46:27):
So yeah, but if you think of that, the reason
for that too, I think is because a lot of
my parents both at both at pensions. Yeah now now
they have pays, so they didn't need to accumulate the
wealth that we need to accumulate because they were taken
care of through defined benefit pension plans, whereas I'm not
and you're not. So that's why you have that accumulation
(46:49):
of wealth. I hope, you know, I hope investors and
people listeners enjoy the show. We try to make it,
like you know, interesting, but also informative.
Speaker 2 (46:59):
Yeah, provoking, in introspective, you know. We hope people listen
to this and think of their own situation. Touch a
lot of bases. Try to touch financial planning. You know,
we do a state planning, we do you know, a
holistic financial planning, we do investment planning. So try to
cover all those bases really.
Speaker 1 (47:17):
And for the clients listening over next month or so,
we're putting together a package that you know, in in
a methodical fashion, will be reaching out to a lot
of them that are, you know, approaching the age of retirement.
With Doug, he's going to be Keynolts who comes with
hes about a year into he's going to be reaching
out to those you know, maybe ten ten away to
kind of do a retirement plan for them and then
(47:39):
make sure we update that on a fairly regular basis.
Speaker 2 (47:43):
Now we have just email me top twenty, in the
top twenty all any business review, which is nice. Always
look for that, you know, Yeah, you want to look
at You're still growing, you know what I mean.
Speaker 1 (47:53):
And yeah, so that's that's about it.
Speaker 3 (47:59):
We got the Giants today. Yeah, I know, are you nervous?
Speaker 2 (48:02):
No, I'm excited.
Speaker 3 (48:04):
I know you don't want to be excited.
Speaker 2 (48:06):
I'm nervous about I'm already I'm already knowing that Jude's
gonna want to put on like this show tumble lyef
for Lucas the Spider while I have the Giants game on.
It's gonna be a big thing. It's gonna be a
gonna side with him.
Speaker 3 (48:17):
Oh my god.
Speaker 2 (48:17):
So I'm gonna be, you know, watching it on my
phone while we have Lucas the Spider on on the TV.
Speaker 3 (48:22):
A Spider Thomas the Tank Engine.
Speaker 1 (48:26):
If you want to get a hold of us, please
feel free to do so and check us out on
the web with Faganasset dot com. Like us on Facebook.
Our number is five one forty four. Thanks for listening,
really appreciate it and have a great day. It's enjoy
the fall. Take care, see you
Good morning, and welcome to the Capitol District's Money an
Investment Program. You're listening to the Fagan financial Report on
Dennis Fagan. Sitting here with my son Aaron, as we
do every Sunday. We're right here in News Talk A
ten one O three one WGY. We're actually not sitting
here on Sunday. It's ten thirty eight, Friday, September fifth.
Happy birthday to Uncle Mike.
Speaker 2 (00:17):
Happy birthday, Uncle Mike.
Speaker 1 (00:19):
It's Friday, so sixty two years old. Hard working guy,
great guy, good guy does a lot.
Speaker 2 (00:25):
To fit there for you, no matter where, no matter
where you were, no matter what you needed, he'd be there.
Speaker 3 (00:31):
Yep. He rescued Aunt Mary and Uncle Bill from.
Speaker 1 (00:34):
A spot in the Adironics down a dirt road and
they got two flat tires on the dirt road when
probably twenty years ago.
Speaker 2 (00:42):
He brought my bus up from Florida that he.
Speaker 1 (00:45):
Brought your bus up from Feu did too, So I rode.
He was like there and he got sick a little
bit from the diesel fuel. We caught fire on nine
ninety five. There was there was We didn't really know it.
It wasn't really a fire. It could have been.
Speaker 3 (00:59):
It was a diesel truck.
Speaker 1 (01:00):
So we're driving up by ninety five and I know
you know the story, but on this bus nineteen eighty
six International.
Speaker 3 (01:07):
School bus, a short bus. Yeah, and it was for
sale down there.
Speaker 1 (01:11):
And I remember, I, you know, tell you all the
time no, no, no no when you ask for things,
and you're like, hey, why do I get this bus?
And I can take friends of mine at the concerts
and ball games and things like that and make make
a few bucks. I'm like, all right, it's entrepreneurial, thank you.
So I said, yeah, So we got the bus. We
had three flat tires, broken fuel line, and getting back
to the fire. When the fuel line broke, it was smoking, smoking, smoking,
(01:35):
and Uncle Mike kind of saw the smoke out the back.
So we got off by ninety five in South Carolina
and came to a stop and that smoke that was
trailing us just came billowing into the bus right and
then and then we're like starting.
Speaker 3 (01:53):
To throw all all the good stuff we had out.
Speaker 1 (01:55):
None of your stuff we went down because we got
stuff out of your apartment, kay, but it was all
junk more or less, you know, college stuff, So we
throw that out. We just throw like our stuff out
of the bus, his tools, you know, my clothing that
we had brought for the trip, and that thrown out
of the bus. And I was about to open the
hood and he's like, don't whatever you do, don't open
the hood because it allows air in.
Speaker 3 (02:17):
So I never really caught fire. But we drove over.
I'll make this we two minutes into the show.
Speaker 2 (02:22):
We drove over to it's a great story.
Speaker 1 (02:24):
Drove off the exit and over to a small a
small service area. It wasn't even a service there was
like you know, it wasn't anyn Love's or certain there
was no BUCkies back then. It was just small mom
and pop type service station. And we called Big Daddy
was a guy's name who they gave to us who
(02:44):
would come and take over the bus. And he was
and he came was packing heat. He had a pistol
on each side of his of his way. Yes, So
then we had to take a car a taxi into
into Savannah and then we looked around and we got
another fuel pump.
Speaker 3 (03:03):
But it was it was a mess getting up to
uh to Albany from there. But anyways, that's.
Speaker 2 (03:08):
Just thank you for that. Yeah, thank you too. And
the bus is still here.
Speaker 1 (03:11):
Bus is still But you also said something, and again
we're three minutes in the show. You said something about
the number one.
Speaker 2 (03:18):
Yeah, the number one key to happiness, as told by
someone I don't know, is resilience. Anyway, you know, I
just told you that before. I thought it was interesting
and it makes a lot of sense, you know. I
think you're happiest with yourself when you do hard things
and and uh, and you achieve even if they're small goals,
small goals, you know, right when you work hard. And
(03:39):
I just thought it was interesting.
Speaker 1 (03:41):
Swing the bat, Swing the bat, Swing the bat. Even
if you miss, just swing it. Like I don't think
you have to achieve something, but if you try it,
try it something. You know, you fall down, get up,
full down, get up, full down, get up, and even
if you fall short of your goal, so what so on? Hey,
and and that is falling short of the goal is
really what the labor.
Speaker 3 (04:00):
Market did this past week.
Speaker 1 (04:03):
Non foreign pay rights for the month of August of
twenty two thousand about fifty some thousand less than expected.
Anticipator of the consensus was about seventy five thousand. Unemployment
rate ticked up to four point three from four point
two percent June was revised down to show actually losses
and jobs, and it really was a service sector that
(04:24):
led the way, with healthcare and public service, you know,
manufacturing down.
Speaker 3 (04:29):
Twelve thousand, and it really puts the FED in a pickle.
Speaker 1 (04:34):
Now we have the PPI and CPI inflation numbers coming
out next week. The FED meets on September the sixteenth
and seventeenth. I believe it's a Tuesday and Wednesday, two
weeks from now ninth, so the sixteenth and seventeenth, and you.
Speaker 3 (04:47):
Know, they've got to cut it.
Speaker 1 (04:50):
They've got to recognize the labor market is usually the
last one to turn, both positively and negatively, because who
really wants to.
Speaker 3 (04:57):
Lay off workers? So that's the last that you do.
Speaker 1 (05:00):
You cut your cut advertising, you cut technology spending, you
cut infrastructure, you do this, you do that, and then
finally I go, we gotta right, we got to cut
some labor so or not higher. So I think you
saw that in these numbers. You also saw the kind
of kind of the beginning of the impact of AI
and you also probably saw the the lack of really
uh new immigration immigration coming in, you know, impacting those numbers.
Speaker 3 (05:25):
Ready ready, and I.
Speaker 2 (05:26):
Think that, you know, Cramer was talking about it a
little bit on c NBC after the numbers came out,
and it's true. I think there's so many what is oh,
there's tariffs, no, wait, the court world that the tariffs
are legal, there's this, there's that. It's like, you know,
it's it's hard for these companies to uh do anything
really when there's so much uncertainty. You know, if you work,
if you own a business, if if you work in
(05:48):
the stock market, you know you uh you have like
for us, like, yeah, we compare everything to the you know,
to the risk free rate, which is a treasury right,
so we know that you know, if are this percentage,
if they're lower, we think a company is valued at
this uh so, and so you know there's more they
go into it that that's kind of just I guess
the point I'm getting at is, you know, if if
(06:10):
these companies don't know what our landscape looks like for business,
they're not going to do anything. So I think we
need to get over this. What this this this this
back and forth game. So companies know where to invest,
what to invest in in, what to uh you know,
what return on investment they can realistically, yeah, expect if
(06:33):
they have to produce, if the labor oversees here, and so,
you know, I think that's that's uh, I think one
of the bigger fears, you know, I think stagfation a
little bit, but also you know, the fear that we
have a slowing economy because everyone's in wait and see.
Speaker 1 (06:50):
I think President Trump talked about that three or four
months ago, probably you know, either in March or April
or May that you know, there was going to be
a transition period and maybe that's what we're in now,
you know, and then that could go could last for
a while. And I think you were just kind of
alluding to it that you know, this could this transition
period if it's a tactic by the president, these tariffs,
(07:13):
and so if that tactic or strategy that he uses
is going to be deployed for the next two or
three years, you know, it could this could go on
for this uncertainty.
Speaker 3 (07:24):
Now.
Speaker 1 (07:25):
The other thing, too, is that the Fed meets in
a couple of weeks. You know, by all, by all measures,
they are going to cut you know, by a quarter
point at least, and then and then we'll see where
they go from there. We mentioned we do have the
producer and consumer price indexes that come up next week,
and we also had other economic data that came out
(07:46):
earlier in the week that suggests that the economy is
doing okay.
Speaker 3 (07:50):
You know, it's okay. It's not great, it's not bad,
it's okay.
Speaker 1 (07:53):
You know, you have Institute for Supply Managements their manufacturing
sector and that's actually improved to forty eight point eight
during August compared to in July, still below kind of
the line in the sane economy.
Speaker 2 (08:04):
Right.
Speaker 1 (08:05):
We also had this so but that that's about thirty
percent of the economy. The service sector is about seventy
percent of the economy, and that's at fifty two. And
if you use that same kind of line in the
sand or of fifty, then we haven't expanding economy there.
So so things are doing okay. U Employment initial claims
on employment benefits for the weekend in August THIRTI at
the two thirty seven, still below the two fifty or so.
(08:28):
But yeah, factory orders fell, construction spannings down, private construction
spanning down four percent.
Speaker 3 (08:33):
Year over year, So there's an oil.
Speaker 2 (08:35):
Continues to fall. You know, this wa sixty sixty three
dollars a Barreland. I thought that was interesting. And I
don't know if it's a sign of a slowing economy,
but you know, if it seemed like it could, it
could be.
Speaker 3 (08:49):
I think it's more. I think it's more, Yeah, I do.
Speaker 1 (08:51):
I think it's more demand than supply, right, yeah, you
know the demand by demand.
Speaker 3 (08:57):
No, I think it's more demand lack of.
Speaker 1 (08:59):
Demand than real And really, you know, a glut of supply,
you know, and I also think you know, you have
more and more people have have worked from home, our issues.
You have a Sudie input going up or output going up,
excuse me. So you've got a few things going on
there that is impacting this supply. You also, you know,
(09:21):
the market keeps chugging along. As of the close of Thursday,
the S and P five hundred closed at a record high,
back over sixty five hundred. You know, there was a
good article that that that that that I was looking
at air and it's and it's it's not not in
the in order in the pack that I gave you.
But let's but if if you look at the one
why does this crazy stock market keep ignoring Jack Bogel's
(09:44):
iron rule, and I just mentioned that.
Speaker 3 (09:47):
Yes, it's about five or six articles deep.
Speaker 1 (09:50):
Uh and in the pack that I gave you, why
does the stock market, this crazy stock marke keep ignoring
Jack Bogels iron And.
Speaker 3 (09:55):
The iron rule is reversion to the mean.
Speaker 1 (10:00):
You know that at some point in time the market
is going to revert back to the mean, and that
we are going to have a correction that is going
to be substantial.
Speaker 2 (10:12):
But from where you know what I mean? So I
think that's the question. Yes, you know what, we see
a ten percent pullback probably, but will it be from
ten to twenty percent from now?
Speaker 3 (10:22):
You know?
Speaker 2 (10:22):
So you know, I think stocks are fairly valued here.
You know, I think I guess a fear of mine
is that we believe the impact of AI will be
sooner than it actually will. So yeah, I think I think.
But you know, we just got through earning season. Google
(10:42):
just got over there what anti trust litigation I guess
with with the US government. They just had good earnings.
Microsoft just had good earnings. Amazon had good earnings, so
Meta had good earning. So you know, these large cap
you know, you can say, hey, you know, the there's
a little bit of fear that the largest companies in
(11:05):
the world represent so much of the S and P
five hundred and it's starting to look you know, bubbly there.
But at the same time, these companies aren't like you know, Cisco,
of the two thousands of I don't know, you would
know more names than me. These companies are a lot
of money. They have tons of cash, right, you know,
they have great margins, and they have some of the
smartest people in the world working for them. So I
(11:28):
don't know, I just don't think it's I think it's
too early to say, hey, these are you know, grossly overvalued.
You know, we're in for a twenty percent pullback.
Speaker 1 (11:36):
Well, that article goes on to say, and he's h
Adam Cecil Cecil of Gravity Gravity Capital Management. He wrote
a book where the money is value investing in the
digital age. He basically says, but our coal's target, another
brick and mortar retailer is going to come back. And
on the flip side, is Amazon dot Com going to
(11:58):
revert to the mean? On the side the e commerce is
fifteen to twenty percent of retail sales in the US.
Is that number going down? And he basically saying, look,
you know, things are different. A reversion to the mean
is Amazon, excuse me, our Coals and Target who are down,
is their stock price also going to revert back up
(12:19):
to the mean?
Speaker 3 (12:21):
You know? It doesn't. It's not logical that that the
reversion to the mean.
Speaker 1 (12:28):
Implies everything for this, for this, everything for the same company,
meaning that Amazon is a stronger company than Coals and Target.
So it doesn't necessarily mean it has. I think that
the big risk right now, I think is is at
some point in time you need you need an exit
(12:51):
strategy for some of these high flyers. And I think
some of what we've seen come into the market late.
I don't know how you feel, but some some like
the core weaves of the world, uh, you know, they
just they've got they've they've got to pull back a bit,
and retail investor has to get burnt a little bit
on some of I think they retail investor and even
people like US professionals who are just over their skis
(13:14):
and and I'm not talking about the Amazons and the
Microsofts of the world, but but some of the higher flyers,
I think I think they're gonna get their come up
and and and just and and we've.
Speaker 3 (13:24):
Got to move towards a higher level of quality.
Speaker 1 (13:28):
Uh yeah, you know, then then we then we have
you know that that that and and I think in
September is usually a good time frame for that for
that to common. And who knows what percentage it's gonna be,
and who knows if I'm even going.
Speaker 3 (13:43):
To be right.
Speaker 1 (13:43):
August is also typically a pretty pretty bad month for
the market, and the and the market moved up in August,
Like I said, the S and P five hundred was
trading at a record high so through yesterday. So I
think that, but I do think that that what reminds
me of the late nineties, and they have been in
this business since nineteen eighty three, excuse me, is more
(14:08):
that it's not tech in general, tech is forty percent
of the market. It's more components of tech that are
a little bit you know, a little old valued, you know.
Speaker 2 (14:18):
And I think, you know, we say it all the time,
but we see all the trades that come through that
we do. Then we see all the trades that other
people do. Clients do so they can go into their
own accounts and trade their own accounts, and you're seeing
a lot more sound hounds. You know a lot of
artific AI names that really don't have any earnings yet.
So those are the things that I would always be
cautious with, especially if you're in retirement or nearing retirement,
(14:40):
Like it's just not worth it, you know, in my opinion,
to have a substantial amount of your money and a
lot of names like that. I do think that you know,
if you do want to buy some take five percent
of your portfolio and allocated towards those names. But you
don't have rules, and I think, you know, with investing,
I think the key thing to do really is always
have rules for yourself in a by those be too confident.
(15:03):
But yeah, I think a lot of those names are
looking a little for our things. Well.
Speaker 3 (15:06):
You know.
Speaker 1 (15:06):
The other thing too, is like I think if you
when you talk about in retirement, I mean we talked
about this last week. I think, you know, you cross
over into that threshold of financial independence. And if you
think of the threshold and it is like a door,
you know, you just don't want to go back out that. Yeah,
you know, the chase. The chase is over, so to speak,
and now you've got to you know, lock down some
(15:28):
of the some of the gains that you've made over
the years. I was reading one of the reports we
got the average sixty old has fifty five percent of
their accounts and then the target dated funds in formal
case in the stock market. You know, I think, I think,
you know, fifty sixty five percent, seventy percent in around
there up to seventy percent is appropriate, but not not.
Speaker 3 (15:51):
All seventy percents are alike.
Speaker 1 (15:53):
Yeah, you know, and I could think of a few
people and you know, the clients that and we have
a handful of people who go into their account traded and.
Speaker 2 (16:01):
You know, it's not many, it's not many.
Speaker 3 (16:03):
And nor should it be, and that's not what we're
here for.
Speaker 1 (16:05):
We just kind of, like to be honest with you, tolerated,
you know, we just tolerated so and we put them
down as you know, unsupervised trade. But the thing, you know,
as far as compliance goes. But the thing, I guess
my issue is that those those put the the the
(16:26):
that that's sixty five or seventy percent of those types
of stocks are much different than when you construct a
portfolio intelligently. There's gonna be a come uppance for some
of the more aggressive companies out there but.
Speaker 3 (16:41):
There's gonna be something that that'll do real well.
Speaker 1 (16:42):
I don't think the average person can differentiate between the two,
and so I do think there's going to be some
issues along the way with some of those companies. Anyways,
what else we got on our on our on our
plate here the market? You know, there's no the you know,
I don't know you've seen any any topics that you know,
(17:03):
kind of uh appeal to you within that uh within
the pile that I gave you just about I was
late giving you the pile today.
Speaker 2 (17:10):
No, I thought it was interesting that you know, it's
his mark your rotation picks up steam in the latest
reminder of a key investing rule. And that's kind of
what we were just talking about. If you look at
the RSP for the week, that's the wrong ch RSP
for the month, let's do the month is up two
point four.
Speaker 3 (17:28):
Two RSP is an equal weighted et S and.
Speaker 2 (17:34):
P five hundred is up two point eight four percent.
So you know, you haven't really seen it yet. And
I think you know, we're always going to hear about
that rotation. You know, should you rotate, should you rotate?
Should you rotate? You know, I don't necessarily agree with it,
because I think by the time you have rotated into him,
everyone else has already rotated into him, and it's it's
(17:57):
it's kind.
Speaker 1 (17:57):
Of over well, you know, And I think that I
think when you when you talk about a rotat you know,
I do. I do think the market is broadening out.
I think I do, you know, I do think that
we are beginning to see you just look at the
the IWM, which is the S and P U second third,
the Russell two thousand, second third thousand largest American stocks.
(18:19):
It's up four or five percent over the trailing month
as opposed to the S and P five hundred.
Speaker 2 (18:25):
It's up seven point six percent trailing months seven point
six seven percent. So you know, I think you are
And I think what it goes on to say, you know,
when I think about the RSP is I think if
you're in retirement or nearing retimement, you should have a
diverse portfolio anyway. You know, I think you do have
obviously some of the you know, Googles and Amazons of
the world, but you know, you really should have a
(18:46):
diverse portfolio anyway that should really do well when there
is a market rotation. But it does say, you know
how multiple stocks are called high flowers for a reason,
and moves like this highlight why we constantly look to
lock in gains after parabolic moves. And I think that's,
you know, just a smart thing to do. You know,
if you have Palenteer that when from twenty two to
(19:08):
one hundred and two hundred, almost one ninety, you know,
it's just the right thing to do to pair that
back to not be too much of a percentage of
your portfolio where if let's say about two percent of it,
it went up to ten just based on capital gains.
That you know, it's just a prudent thing to do
to trim that down. And I think that's you always
have to be on the lookout for things like that
if you have your own portfolio, you know, not get
(19:28):
too greedy. What did what did the you know we
were talking about that the other day. Pigs, Uh, pigs
get deadlaugh Wader. And I think, you know, you have
to stick to your rules because if not, you know,
when you when are you going to get out? When
are you going to get in? You know, it's just
it's just too much, too uh to deal with mentally,
(19:49):
I think.
Speaker 1 (19:50):
And you know, so I think, you know, I think
some of those rules would be diversification, diversify your portfolio, trim,
trim your winners, trim your winners. You also want to
take into consideration taxes go to help your tax structure
if it's a non qualified account. I think, you know,
(20:13):
stay within your your asset allocation model. So if you're
a growth and income investor and you want sixty to
seventy percent of your money in the stock market, periodically
review that to make sure you're within those parameters. You know,
I think that you you know, you diversify across market capitalization,
you diversify across geographically, You diversify across industry, and then
(20:36):
that's on the equity side. On fixed income, you diversify
according to duration, their maturity. You diversify credit quality, and
you know, sometimes you diversify geographically some international bonds. It
all depends upon your level of sophistication. But those are
some things that really I think the gamification we talked
about that earlier off the air, the gamification of Wall Street,
(20:58):
you know, is is going to come back at some
point in time, you know, to hurt people at least temporarily.
You know, you know, but right now, you know, and
the other thing too is and I do agree with you.
I think the market, the market is fairly valued. I
like our portfolio, like.
Speaker 3 (21:12):
What we own.
Speaker 1 (21:13):
We've made some changes, We've got it. We have to
continue to make some changes. But I think that the
the other thing, there are pockets. The market is not
one entity. You know, there are pockets within the market
that you know, there there is, there's there's opportunity. You know,
there's there's there's real opportunity. Like you look at Lily Eli.
(21:34):
Lilly is down sixteen points today, it's probably down from
maybe nine hundred change to seven twenty six. Bristol Myers
is going from uh and these are just examples. I'm
not saying we're buying these today, but Bristol Myers is
going from sixty to forty forty seven or so.
Speaker 3 (21:48):
You know, you have to begin to look at these areas.
I mean, you've.
Speaker 1 (21:51):
Gotten you've gotten resets in like a ge Vernova. You know,
GeV Vanova is down twenty seven points today. And again
I'm not saying to those, I'm just saying you you
there are opportunities to prevent present itself when things get
too hot. And then cool off a little bit. That's
where you want to look to pick up some of
the winners that the companies that are sound investments but
(22:13):
are just out of favor right now, because like you
look at Gievenova, it's down ten percent over the past
a month. The S and P five hundred is up
three percent, so you've got a divergence of around thirteen percent,
you know, and now that that gie Ivanova is still
up forty to eighty two percent year to date, So
I would continue to wait for that to come in.
But you know, there's there's things just to look at
(22:36):
within your portfolio. And one of our favorite, I think
one of my favorite funds.
Speaker 3 (22:40):
There is that that the the DGT the Global Cow.
Speaker 2 (22:43):
It's about forty fifty fifty two forty eight US to
to to International Great Fund. It's about twenty percent for
the year. It's kind of lagged the past few months, though,
I think most of it's gain was in the first
you know, four months, essentially seven percent.
Speaker 1 (22:57):
Over the trailing three months, you know month it's up
four percent, So it's kind of yeah, happily wrong right.
Speaker 2 (23:05):
The other way around three six percent for the year.
It was down at one point this year, you know,
in April seventh, so it's had quite the rally of
about twenty seven percent.
Speaker 1 (23:12):
Sent then it has so conclude the first that we
talked about diversification. Uh the second half, I think we'll
pick up on uh boring beats fancy Warren Buffett turned
ninety five the other day, ten of his biggest investment lessons.
Speaker 3 (23:27):
I think we can all learn a little bit about that.
Speaker 2 (23:29):
Good one.
Speaker 1 (23:29):
Yes, and uh so we'll open up the second half
with that. But right now it is just let me
see what else?
Speaker 3 (23:36):
What else?
Speaker 1 (23:37):
What else can we talk about in the second half
before we let the before we go to the news. Yeah,
looten lemon shares, plunch, Retail is tough. We'll talk a
little bit about retail. Right now, it's ten thirty on
the station depend Upon for News, Weather and Information News
Talk A ten and one oh three one w GI.
Speaker 3 (23:56):
Good morning, and welcome.
Speaker 1 (23:57):
Back to the second half out of the Capitol Tricks,
Money and an Investment program. You're listening to the Fagan
Financial Report on Dennis Fagan, Denna Dannis, Dennis Fagan sitting
here with my son Aaron, as we do every Sunday,
every Sunday right here in news to K ten and
one oh three one WG. I've been doing it since
nineteen ninety one or ninety two and around there for
so well, and then I would like to like to
(24:18):
think the time went by that fast, but uh, it's even't.
Speaker 2 (24:21):
Being a kid watching the Giants games. And uh because
it used to be on four right, Yeah, so want Giants.
There's a little TV on. Just go and hang out
in the studio.
Speaker 3 (24:32):
Yeah, she would you go with me? Yes? You would.
You used to have to drive over.
Speaker 2 (24:36):
The market after I remember Boston Market I do had
some great sides.
Speaker 1 (24:40):
Yes, I wonder if it's still around well up there
now and we used to go to Latham. It's uh Popeyes.
Speaker 2 (24:46):
I love Popeyes.
Speaker 3 (24:46):
I like, I don't I don't need to fried chicken.
Speaker 2 (24:48):
But no, you know you're you're kind of a health nut.
You know you've turned into a health nott.
Speaker 1 (24:53):
I wish I were anyways, at the break this second
half hour, good second half hour. Warren Buffett turns ninety
five today as.
Speaker 3 (25:00):
Of August thirtieth. This is a week ago.
Speaker 1 (25:04):
Ten of his biggest investment lessons. What money gurus wish
they'd known in College by Charlie Wells. Interesting little article there,
and then we'll close out the show. Or let's close
out the show with Lululemon shares plunges earnings guidance. Well,
let's start out with lululemonair. Let's do it, because that's
(25:24):
going to take the shortest.
Speaker 3 (25:25):
Amount of time.
Speaker 1 (25:27):
Retail is tough, and you know that more than anybody,
I think because of your age.
Speaker 2 (25:34):
What is tough, I'm sorry.
Speaker 3 (25:35):
Retail.
Speaker 2 (25:36):
Yeah, retail is tough.
Speaker 3 (25:37):
Traditional retail is tough.
Speaker 2 (25:39):
There was a lot of innovation in the past ten
years in retail in general that made it not as
that made the barriers to entry much lower. Right, I
mean even shopify. Shopify has my credit card and address.
I can buy something off Instagram in thirty seconds.
Speaker 3 (25:55):
Right.
Speaker 2 (25:56):
Marketing on Instagram, marketing on all social media platforms. You
can get your brand out there a little bit easier.
I mean, look at the evolution of on cloud, Like
I'm a huge on cloud fan, and the stocks started
to do well. You know, it's your dates down fifteen percent,
but you know three years it's up one hundred and
thirty seven percent. And more of what I'm saying is
you're seeing like like a like a brand like on
(26:18):
cloud and let me just look it up. In general
was found in twenty ten, so I guess a little
bit older than I thought. It was a senior company
in a fifteen billion dollar company. So you're just seeing
the lot. You're just seeing way more brands. Like when
(26:41):
I was growing up, I probably shot that foot locker, Dix,
Abercrombie and Fitch and that was kind of you know,
American Eagle and that was kind of it. You know.
Now I have a lot of different attire from a
lot of different places that just fit me with when
you're not a.
Speaker 1 (26:57):
Big closed person or a you know, really a shoe person.
No no, not really, but you know, and I think
and I'm not. I'm not either. I have I have
gotten likes as I get older, and my feet are
more important to me because they're not as they hearn.
Speaker 3 (27:14):
More, you know. But if you look at Hokah, which
is decker.
Speaker 1 (27:18):
Z owns them, you look at a lot of you know,
a lot of different brands.
Speaker 3 (27:24):
I try to have a couple of brands that I
had never heard of.
Speaker 1 (27:27):
But when you're online, shirts are the same way, and
I think that's you know, it's going to constantly provide
competition to the to the Nikes of the world, to
the Lululemons of the world, and and and because the.
Speaker 3 (27:40):
Methods of shopping. You can see that just just from coal.
Speaker 1 (27:42):
Stock, the way that people shop today is a lot different,
a lot more online, but also the way that even
small companies present themselves.
Speaker 3 (27:52):
There's really no differentiation.
Speaker 1 (27:53):
Between what you see online with the company you've never
heard of and what you see with lul Lemon. If
they can deliver a good product in a timely fashion,
it's going to eat into the to the to the.
Speaker 3 (28:04):
Margins of Lululemon.
Speaker 1 (28:06):
You know, Lululemen came in a little bit light in
expected revenue earnings per share. We're higher than expected, but
they projected full year fiscal full fiscal year earnings of
twelve dollars and seventy seven cents to twelve ninety seven,
which is below the estimate of fourteen dollars and forty
five cents to share. So Lululemons down thirty eight points
(28:26):
to one sixty eight sixteen. Thankfully we don't own it.
We do own Nike, and Nike is in the turnaround
phase of pretty much of there.
Speaker 2 (28:33):
And I love Nike. I'm a big Nike guy. You
are a big Nike but you know you finish what
you're saying.
Speaker 3 (28:40):
Just no, I'm just saying. You know, retail is fickle.
Speaker 1 (28:45):
Retail is fickle, and its it's a difficult industry to
to to really do well.
Speaker 3 (28:51):
In over a long period of time.
Speaker 1 (28:52):
As an investor, I think it's not much different than airlines.
You know, you know, the fashion is fickle, and if
you look at airlines, there's a lot of things that
our challenges to the airline companies that are out of
their control. So generally speaking, we stay away from those
two areas. Like I said, we do own, we do
(29:14):
owe uh n Nike, and I would not consider I
would not consider Home Depot and Low's. Yes, their retail,
but there's such a category killer really it's tough to Yeah,
it's stuff to you know, kind of cut into their margins.
Speaker 2 (29:28):
So anyway, you know, I do think you know, uh,
there was this book Ronchuer. Now he wrote the Hamilton,
the Hamilton book that the play was founded on, and
he wrote a lot of great books. Actually, he's an
amazing writer. He wrote a book on Ah JP Morgan,
JP Morgan, Rockefeller. Yeah, I mean the Mark Twain, but
(29:52):
he also wrote like essays and he wrote one about
it was called the Death of the Death of a Banker,
and it talks about how, you know, when the Gilded
Age was this guy George Baker who was a banker
JP Morgan. You know, their their relationships are really built
on trust, uh, personal relationships and how basically you know,
(30:12):
as we evolve in the banking industry evolves. You know,
then you had the introduction of mutual funds. You know
what I'm getting at is, you know, my generation and
even younger than me, doesn't have the brand loyalty, uh
that your generation has even with banking people will people
bank at ally bank or so fine now because it's easy,
(30:34):
you know, so it's not you don't have like the
you know, even the community bank that people go to
and see the people that they know. It's you know,
and I think that that's what's you know, hard for
for retail, but all companies really right now is you
don't have that that easy recurring customer just because of
your brand like you used to. You know, it's all
about what's quickest and what's easiest, right Because I think
(30:56):
that I think Loul Lemon. I think that'll be a
struggle for Lemon because there's just so many other brands
out there now, right and they and no one has
that Yeah, that that brand loyalty, but.
Speaker 1 (31:08):
That reverberates through many different industries, you know, and I
think AI is only going to exacerbate that problem as
you have you know, uh, communication with you know, non
humans so to speak. A you're on the internet shopping
and b when it's when it's there's a chatbot there
(31:30):
that you have that.
Speaker 3 (31:31):
And I think the other thing too.
Speaker 1 (31:32):
Is like you know, I think when when you mentioned
that your generation does not have the loyalty to let's
call it a bank or a fashion or this or
that banks, and you know, there's a lot of companies
that don't have loyalties to trust themers either, you know,
and shareholder driven. I think, you know, and that's a
really that's a really good point. And I think, yeah,
(31:54):
you're seeing that now even with you know, some.
Speaker 2 (31:56):
Companies that we work with the downsizing of their customer service, right,
you know, they're trying to increase their marksource. They're they're
you know, outsourcing it to you know, India or or
received somewhere. But also, you know, we have less you know,
customer service representatives than we used to. We don't have
that one person to go to like we used to
(32:17):
for some things. That it's a chatbob, you know.
Speaker 1 (32:19):
It's a chatbot that you you you you answer questions A, B,
C D.
Speaker 3 (32:22):
They bring it down, you know.
Speaker 2 (32:25):
Then you submit a ticket and it pops out like
an AI answer that it thinks it's closer. It's like,
that's not what I was asking at all. So, you know,
I think that was a good point that you just said.
Really is you know, it's it's it can get a
little bit dangerous when you know the the duty of
these of of of the main goal for a bunch
(32:47):
of these companies is the shareholder. You know, historically the
shareholders should be.
Speaker 1 (32:53):
I don't know, and a lot of people really and
maybe it's people my age, would you know, you know,
I think that we are we have the gay people
who work here.
Speaker 3 (33:02):
You know, we're live.
Speaker 1 (33:03):
You know, you you will get myself for yourself or Doug,
if you want to talk about your portfolio, if you
need money or change the beneficiary, you'll talk to other people,
but you will take care of it.
Speaker 2 (33:15):
Yeah, And there was a big thing, you know, back
when I was in school. It's like, you know, I
know Compani's main goal is to fulfill its due to
the shareholder, but it really should be the stakeholder. And
that's the change. Yeah, and that's people that are affected
by it, even if you're in a community, if you're
not necessarily a shareholder, but you're affected by the company. So,
you know, I think right now, you know, with with
(33:37):
the market, it's it's all about margins and.
Speaker 1 (33:40):
So you know, you know, so Warren Buffett, you know,
do you know with with AI, there was I forget
who I think it was, Microsoft said that, you know,
investment advisors are going to be replaced by AI, and
I think it's it's I think there's a lot of
tools that we use now to help investors, but emotions
(34:01):
ultimately drive lots of decisions from the retail investors. So
I think it's gonna be difficult for that to happen. So,
but my point was more when bringing that up, is
that you know, ten of his biggest investment lessons, it'd
be interesting to get your input as to whether they're
(34:21):
still you know, you know, viable or appropriate today. Number one,
the one of his biggest investment lessons is don't pay
up for stocks. Buffett generally doesn't pay more than fifteen
times forward earnings for a stock, even when buying at
growth companies like Apple nearly a decade ago, Coca Cola
late in the nineteen eighties, Buffett bought them for under
(34:42):
fifteen times earning. On the flip side, Buffett says don't
second ten lessons, don't be afraid to take profits. You know,
Apple Computer, you know, he has taken some profits, but
you know it's still trading at probably thirty times earning.
So I I think I think one of his I
(35:03):
think he's pretty malleable as far as are flexible on
some of these. But in general, what do you think
of those two statements?
Speaker 2 (35:13):
Yeah, when I saw don't pay up for stocks, you know,
I what I thought was, you know, don't go chasing
a lot of these companies that are already up one
hundred two hundred percent over the past few months.
Speaker 3 (35:23):
You know. So it's like a bigger fool theory.
Speaker 2 (35:26):
Yeah, But you know, I think we have every investor
is different, you know, like you have you have fifteen
times earnings is pretty low right now, right now, right, No,
I think it's a whole different. You know, if the
S and P trades at historically sixteen seventeen percent, I
think it's probably trading at what twenty two right now?
So you know, so what you're not, I mean to
(35:46):
buy a passive ETF and the S and P right now,
you know, according to his rules.
Speaker 1 (35:50):
So I would say that that that And I can't
speak for Warren Buffett, but my guess would be that
rule or lesson would be amended to. You know, have
discipline when buying a security, yeah, and you know, have
parameters as to what you're willing to pay for that security.
Speaker 2 (36:09):
And another one, don't be afraid to take profits, even
if it means paying a lot of in tax I
go back and forth with this all the time. And
I think it's at a situation by situation basis. Really,
you know, I think sometimes you have to take profit
when things do go parabolic. On the other hand, you know,
if you have someone who's eighty five and not in
great health, you know that'll get a you know, step
(36:32):
up in basis in a non qualified account. Do you
really you know, want to So I think it's at
a situation by situation basis as well.
Speaker 1 (36:39):
You know, a client by client like we manage money
professionally obviously, but a client by client basis, and also
a stock security by security basis. You know, you know
there's i mean, Lulu Lemon's down twenty percent today. So
you can get collaborated in even the most blue chip
of companies, so to speak.
Speaker 3 (36:58):
But I'm going to give a company.
Speaker 1 (37:01):
Like Apple a much longer leash or or Goldman Sachs
or JP Morgan than I am in in a in
a sizzling tech company for a number of reasons.
Speaker 3 (37:12):
You know, JP Morgan's They're.
Speaker 1 (37:16):
The foundations of their business are much more sound than
a high flying tech company. Their shareholders have much more
stronger hands as shareholders. They're not they're not going to
trade the stock like they will like a momentum player.
So it all depends upon the company. It depends upon
the tax situation and a qualified plan you don't have
(37:36):
to worry about that like an I A four three
B a pension plan. And it depends upon the age
of the client, the risk level of the client, the
income of the client, and and and you know, throw
all these those uh that criteria into into that that
decision and at the bottom comes Hey, you know, do
I want to peel some of these profits off?
Speaker 3 (37:57):
And if so, how much the thing too? Is there?
Speaker 1 (38:00):
You got I think that the fifteen percent capital gains
tax rate goes up to about five hundred.
Speaker 3 (38:08):
Thousand dollars in income.
Speaker 1 (38:09):
So so if you sell something and you have fifty
thousand dollars in capital gains, you're gonna lose seventy five
hundred to the government. But it's it's if you sell
one hundred thousand're gonna lose fifteen thousand dollars to the government,
you know, assuming that's your entire capital, that's your capital gain.
But still the fifteen percent, So I think it's not
a graduated tax bracket for a zero up to ninety
(38:33):
somethings and.
Speaker 2 (38:34):
Jointly, you know, there's probably a lot of people in
retirement that you know, maybe you're only drawn a little
bit from their four to one k or ira and
have you know some social security that fall below that.
So I think you'll you just have to be aware of,
you know, where you stand from a tax perspective.
Speaker 1 (38:48):
And so married married filing jointly ninety six seven. Yeah,
so you've got to get above ninety six seven before
you're gonna pay any capital gains taxes. Single, it's forty
eight three fifty fifteen percent tax bracket. Married fileing, joining
goes up to six hundred thousand dollars. Now in New
York State, your tax is ordinary income, so that's you
(39:09):
know that could that could be a chunk, and you
also have to be careful that it might affect your
Medicare premium. So those are some considerations that you have
for sure. But just on the surface, that fifteen percent
bracket goes a long way. Married, finally joining, and even
single it goes up to five thirty three five hundred
and thirty three thousand. So when Buffett says, hey, don't
(39:29):
be afraid to pay taxes, even in don't be afraid
to take profits, even if means paying a lot in taxes,
the dollar amount is going to go up, but the
bracket is not going to go up for a long
period of time. I think you just have to have
to be aware of that as you move forward, stick
with what you know. I think he's uh, he's drifted
away a little bit from that with his purchase of Apple,
(39:51):
but in general you're seeing their their larger holdings considered
to be like you know, Coke, American Express, Apple, and
I know they. I believe they own Bank of America
in the Lake. Even though he's trimmed some of that
started early. Buffett was filed filed in the markets as
a boy and reading investment periodicals in the olmhoa of
Public Library from Omaha, Nebraska.
Speaker 3 (40:12):
Seek out great teachers.
Speaker 1 (40:15):
Don't be afraid of concentrated investments. Don't be afraid of
concentrated investments. Give me your take. What is what is
a concentrated investment and what is an.
Speaker 3 (40:29):
Appropriate level five stocks? America?
Speaker 1 (40:31):
This is as of this ready, American Express, Apple, Bank
of America, Coca Cola, and Chevron make up almost seventy
percent of Bucksheers Berkshire's equity portfolio of roughly three hundred
billion dollars at the end of the second quarter.
Speaker 3 (40:41):
Mm hmm.
Speaker 2 (40:42):
You know what is a concentrated portfolio?
Speaker 3 (40:45):
Well, seventy percent of his is. Yeah, I mean that's
a lot, right. How about for a client, what.
Speaker 2 (40:53):
Is a content trade for? What do we aim for?
I think fifteen to twenty five holdings is okay, right?
I think fifteen about anyone stock, ten percent or so yeah,
at the max I would I would max out of
ten percent.
Speaker 3 (41:04):
I agree with that. Yeah.
Speaker 1 (41:06):
And then then so the first thing you would do
is keep an eye on it, right, That's what I
think you keep an eye on a few things. Let's
say this stock gets to eleven or twelve percent, and
then Google right now is about ten or eleven percent
of our common stockholdings, not of our over a portfolio,
but just of the stocks we own. Alphabet Google is
about eleven twelve percent. So aren't we gonna trin that?
Are we gonna turm that? We will at the at
(41:29):
the what we think will be the right time. But
it's certainly on our radar screen. This litigation was on
our radar screen. Their earnings are on our radar screen.
There the relationship with the with the Trump administrations on
our radar screen. Looking for for reasons to cut that back,
but especially going into almost the fourth quarter now the
close of September, you know you've got to take taxes
(41:51):
in the consideration as well. So and if you have
you know, Google Alphabet in a client in two let's
say the same client. A client has three accounts, you know,
two iras and a joint account you know, looked maybe
to take that capital pair back an individual security out
of the IRA rather than the joint account.
Speaker 3 (42:11):
So think of things like that. Hire great managers and
let them do their thing.
Speaker 2 (42:17):
It's a good one.
Speaker 1 (42:18):
Yeah, don't retire too soon, be stingy with share issuance.
And that's why this is the Berkshire stock price sells
at you know, astronomical prices. Do and do something you like.
So those are his ten of his biggest investment lessons.
The other thing too, is that and there's a there
(42:38):
was a is did you did you see it?
Speaker 3 (42:41):
Did you give me that? Uh? The uh talking about
Warren Buffett and being ninety five? Did you give me.
Speaker 1 (42:47):
The article on the fact that the total average annual
expenditures ages sixty five to seventy four is sixty.
Speaker 3 (42:57):
Nine dollars.
Speaker 1 (42:58):
Once you hit seventy five, it's fifty three thirty one dollars.
So people talk about and we've we've always separated, uh,
the active from the passive years in retirement, and we
usually say, you know, seventy eight seventy nine. But if
you look at that number, I think it's very interesting
(43:20):
and it's thought provoking.
Speaker 2 (43:22):
And one of the things I was right. You talk
about this all the time.
Speaker 3 (43:25):
I do.
Speaker 2 (43:26):
I do all the time, passive versus active retirement. You know,
if you just yet, housing goes down eight percent from
sixty five to seventy four to seventy five, plus apparel, entertainment,
food and alcohol, all that all down twenty five plus percent.
So a personal insurance down fifty six percent, transportation down
forty one percent. So you know, are there things that
(43:46):
go up? Yes, but one of them is donations, you know.
The other one is healthcare up through so it's discretion.
So yeah, healthcare three percent. But that's not astronomical, you
know so well, and you know, I think it always had.
I have to remember this when you're in retirement too,
is that you want to take advantage of that active
(44:08):
period phase because you know it's that passive phase just
won't be as much fun, really, you know, and maybe not,
maybe it'll it could be just as fun, but you don't, Yeah,
you don't. Is an entertainment that that you once did?
Speaker 3 (44:20):
Right?
Speaker 2 (44:21):
Well.
Speaker 1 (44:21):
The other thing too, is like I'm sixty three, I'll
be sixty four shortly in the month or so, uh,
you know, and and uh and we you know I've
been doing this a long time and obviously haven't reached
this stage. And here's my here's my two cents of
food for thought. And you're you're the usually receiver of
this all the time, but it bothers me, like, and
I don't know the numbers. I could look it up,
and I didn't look it up, aficial, But you know,
(44:41):
what's the what's the chance of and I'm married, what's
the chance of Mom and I both getting to age
eighty in good health and being able to do the
things we want to do?
Speaker 3 (44:48):
Both? You hope high? But they're not. Really, they're not
high high.
Speaker 1 (44:52):
Yeah, you know your grandparents didn't on either side, right,
you know me. I mean mom's dad, Mom's mom's dad
got sick in these early seventies. My mom, your grandmother
got sick in her early seventies. So what happens is
is that, you know, and everybody worries about and I
am on this soapbox now of what I'm about to say,
(45:13):
Everyone worries about financial armageddon. Oh my gosh, President Trump,
Oh my gosh, President Biden, Oh my gosh, Iraq, oh
my gosh, whatever China.
Speaker 3 (45:22):
But we don't.
Speaker 1 (45:23):
So they're always worried about Okay, I can't invest it,
I can't invest appropriately, or I can't go on this trip,
or I can't do this, or I can't do that.
That that that the likelihood of something happening along those
lines in the market not recovering is is historically really
without precedence. So if you allocate your assets appropriately, you'll
survive those. The armageddon that we're not going to survive
(45:47):
is your health. Right, So the armageddon that's coming for you,
that we know is coming for you, Yeah, you worry
about it, but you don't You don't worry about it
to the extent that it's gonna that's gonna prop to
you or push you to do some things. From sixty
five to seventy four, you know, hope, I hope our
clients tend to die with a lot more money than
(46:09):
they really wanted to and then it's passed down. That's
why this money is one hundred trillion dollars going to
move down from my generation to your generation over the
next twenty years.
Speaker 2 (46:19):
Yeah, you have thirteen thousand people turning sixty five every
day for the next decade, you know, But if you
think that the age of that person is like seventy
one too.
Speaker 1 (46:27):
So yeah, but if you think of that, the reason
for that too, I think is because a lot of
my parents both at both at pensions. Yeah now now
they have pays, so they didn't need to accumulate the
wealth that we need to accumulate because they were taken
care of through defined benefit pension plans, whereas I'm not
and you're not. So that's why you have that accumulation
(46:49):
of wealth. I hope, you know, I hope investors and
people listeners enjoy the show. We try to make it,
like you know, interesting, but also informative.
Speaker 2 (46:59):
Yeah, provoking, in introspective, you know. We hope people listen
to this and think of their own situation. Touch a
lot of bases. Try to touch financial planning. You know,
we do a state planning, we do you know, a
holistic financial planning, we do investment planning. So try to
cover all those bases really.
Speaker 1 (47:17):
And for the clients listening over next month or so,
we're putting together a package that you know, in in
a methodical fashion, will be reaching out to a lot
of them that are, you know, approaching the age of retirement.
With Doug, he's going to be Keynolts who comes with
hes about a year into he's going to be reaching
out to those you know, maybe ten ten away to
kind of do a retirement plan for them and then
(47:39):
make sure we update that on a fairly regular basis.
Speaker 2 (47:43):
Now we have just email me top twenty, in the
top twenty all any business review, which is nice. Always
look for that, you know, Yeah, you want to look
at You're still growing, you know what I mean.
Speaker 1 (47:53):
And yeah, so that's that's about it.
Speaker 3 (47:59):
We got the Giants today. Yeah, I know, are you nervous?
Speaker 2 (48:02):
No, I'm excited.
Speaker 3 (48:04):
I know you don't want to be excited.
Speaker 2 (48:06):
I'm nervous about I'm already I'm already knowing that Jude's
gonna want to put on like this show tumble lyef
for Lucas the Spider while I have the Giants game on.
It's gonna be a big thing. It's gonna be a
gonna side with him.
Speaker 3 (48:17):
Oh my god.
Speaker 2 (48:17):
So I'm gonna be, you know, watching it on my
phone while we have Lucas the Spider on on the TV.
Speaker 3 (48:22):
A Spider Thomas the Tank Engine.
Speaker 1 (48:26):
If you want to get a hold of us, please
feel free to do so and check us out on
the web with Faganasset dot com. Like us on Facebook.
Our number is five one forty four. Thanks for listening,
really appreciate it and have a great day. It's enjoy
the fall. Take care, see you
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