Episode Transcript
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Speaker 1 (00:00):
Good morning, and welcome to the Capital District's Money and
Investment program. You're listening to the Fagan Financial Report. I'm
Dennis Fagan, sitting here with my son Aaron, as we
do every Sunday, and have been doing that for I
think thirty five years now, every Sunday for thirty five years.
Speaker 2 (00:14):
It's amazing how crazy time goes by.
Speaker 3 (00:16):
I remember when we used to be on vacation, used
to like run to the pay phone. We wait to
do the report at four o'clock to do the report.
Speaker 1 (00:23):
Yeah, Mom and I were in Ocean City last weekend.
I took we took both Friday the market was closed
and on our you know, in observance of Good Friday.
And we went out of town for a couple of
days before Easter and we were in Atlantic City and
that came up.
Speaker 3 (00:40):
I remember, and sure a lot camp. Didn't you drive
like two thousand miles?
Speaker 1 (00:44):
Yeah, yeah, yeah, a couple thousand miles over four or
five days. Just what we or just what I enjoy,
you know. And it was a bad therapy. It was therapy,
but so there there was And for the newer listeners,
we to do a radio spot at four fifteen or
so every day after the market closed for probably a
(01:06):
decade and a half.
Speaker 4 (01:07):
It's crazy, and.
Speaker 1 (01:08):
You would recaptive, you know, the market. I think it
was about yeah, a few few minutes spot recap the market.
And then where would you get I would you initially
have to schwab you for the internet. I would call
Schwab and Schwab would tell me the data and and
probably fifteen or twenty years ago, uh, the actual Just
as a point of interest, I guess I found interesting.
(01:30):
I find it interesting is that prices used to be
in eights, and then they they changed them to cents,
because what eight's the spread was an eighth to what
point one?
Speaker 2 (01:42):
Five cents? Twelve and a half cents.
Speaker 4 (01:45):
It's a lot.
Speaker 1 (01:46):
It is a lot for the spread, but now now
it's now then they converted that to cents. Uh. For
purchasing and selling stocks, probably fifteen or twenty years ago,
but it was at least nineteen ninety or so. We
began the annual report, and then or the daily report,
and then the radio show on the weekend. But the
daily report, uh, you know, it was a few minutes
(02:09):
every every day, and I had I had a cell phone.
I think at the time, but there wasn't a lot
of coverage.
Speaker 2 (02:18):
You know what I mean.
Speaker 3 (02:19):
I remember this cell phone because then we would play
with that, right the big block.
Speaker 1 (02:24):
Yeah, would play with it, but we said, we'd say,
and I don't know, I mean you you you would
be hard pressed to find a phone booth, now, yeah,
I think you know. For in my mind there was
there's one over in Cape cod that my mom and
I go over there sometimes I think, I see, But
you'd be hard pressed to find a cell phone or
a phone booth anywhere.
Speaker 2 (02:44):
Why do you need a phone booth?
Speaker 1 (02:46):
And if it's a phone booth, it's not there's nothing
in it. It's just an empty phone booth. That's like
some of the phone's not there anymore. But I.
Speaker 2 (02:55):
Race around.
Speaker 1 (02:56):
I would call call Schwab, get all the numbers and
then call on to w.
Speaker 2 (03:02):
G Y and so would they ask you questions? No, no,
they would.
Speaker 4 (03:07):
Just that's kind of nice.
Speaker 1 (03:09):
Yeah, but sometimes it got hairy because well, first of all,
you have to find a phone booth, and if you're away,
you don't know where it is that works, and you know,
you don't know you're stuck in traffic, or you get
to the phone booth and it's four o'clock and you
got twenty minutes to wait.
Speaker 4 (03:25):
Yeah, you know what I mean.
Speaker 2 (03:26):
So stuff like that.
Speaker 1 (03:26):
And then about fifteen years ago they just discontinued it
because of the internet everybody, and eventually I just picked
up the numbers from the internet. And then a few
years back, probably fifteen years back to gu, I said,
you know what, let's just discontinue this because people pick
up this information on the Internet. It's just so readily
available now, which was and then that was good by mate.
Speaker 3 (03:44):
Yeah someone what No, No, I don't know what I
was going to say there, but yeah, you know, I
do have many memories of find yeah, finding a phone
or going to the show with you when I was
a kid.
Speaker 2 (03:55):
Yeah, you would have it.
Speaker 3 (03:56):
There's to be a TV so you can if the
game was didn't used to do it at like four
or five.
Speaker 2 (04:00):
This show.
Speaker 1 (04:00):
Yeah, we've changed the times, Uncle Chris and I changed
the times from time to time. We used to do
on a Saturday morning and a Sunday morning, and then
we would go by where the g Why's biggest you know,
signal extended the most? Uh.
Speaker 2 (04:12):
Once it got to be the.
Speaker 1 (04:13):
Winter and and and this and that, and and then
h a lot of other people started to there there.
I think we were the only show, maybe ourself in
this one. Other Sandy family and Bob Agel on another station,
and then uh, there was Bob Brinker was on a
couple of I.
Speaker 3 (04:29):
Like Bob Brinker. He I think he just retired his newsletter.
He has like a monthly newsletter.
Speaker 2 (04:33):
He got it for years and years. Yeah, so is
he local? Non? So you were international Internet? Where are now?
It's on it.
Speaker 1 (04:43):
But I think what's interesting about that the whole evolution
and this kind of goes back to the market and
the volatility of it. And I think this stuff is
important putting putting this market into perspective is much more
important than to tell you, hey, the marking up and
mark them down, or do this or do that. There's
there's only incremental moves you can make. But I like
(05:04):
in this market and to that Geico commercial where you
know the people, the guys there with the chainsaw and
they're in the garage and and they the kids are
all there and it's a horror movie, like what should
we do?
Speaker 2 (05:20):
What should we do? Let's go to the cemetery, Let's
go to.
Speaker 1 (05:23):
The cemetery, you know, and and uh, one person says, well,
it's just why don't we go to the car it's running.
Speaker 2 (05:30):
They're like, Nahna, that'd be stupid. Let's go to the cemetery.
Speaker 1 (05:32):
So then they run to the cemetery and the and
the guy with the chainsaw, I think it's a guy
commercial just rolls his eyes. He's like, you know what,
I really got to do this. But I think it's
like the stock market, you know, you get so engrossed
in the fear of it or your worst your worst fears.
And I we sit right next to each other, you
myself and Doug that we hear conversations on the phone,
(05:56):
you know, with yourself specifically, and it's like, you know,
over and over again. It's like and I understand that,
you know, it's it's you know, this is what we have.
You know this, this is your asset allocation. Your portfolio
was designed for this. You know, we expect these types
of markets, you.
Speaker 3 (06:15):
Know, And and just just for reference, you know, I,
you know, two phone calls this week, and you know,
I think whatever whatever news stations some people listen to,
you know, they're listening to it.
Speaker 4 (06:27):
All day every day, you know, So from.
Speaker 3 (06:29):
One hand, you have you know a lot of people
that you know, I've heard the word sale in garage
sale and bargains like I've never had before in my career.
Speaker 2 (06:39):
Like it.
Speaker 4 (06:40):
It would be absolutely you know.
Speaker 3 (06:42):
Idiotic to think that that there's any substance to the
impact of what's going on geopolitically. And you're like, okay,
you know, and I'm not saying that, you know, I'm
not saying that the market is going to go down
or up. I'm saying, hey, these things are things worth uh,
you know, talking about considering it came out and considering,
you know, what these tears have on the economy.
Speaker 4 (07:04):
Then I had another.
Speaker 3 (07:05):
Person call me this week and who's in all treasuries,
and uh was asking me if her portfolio will go
to zero and she'll go and they'll go bankrupt in
quotations for whatever's going on in the world. So uh
with with basically saying, hey, you know, I don't have
(07:27):
faith in the US government anymore from a treasury standpoint.
Speaker 2 (07:30):
So crazy it is.
Speaker 4 (07:31):
And so you know, I.
Speaker 3 (07:33):
Think you have to take a step back, and we
do too. You know, We've been talking about it a
lot at work, you know, just with everything that's going on,
and you know, the ease of Donald Trump to uh
tweet out whatever he wants that will get a market
reaction and should because he's the president of the most
powerful country. So I think sometimes you have to take
a step back, you know, put the mets on.
Speaker 2 (07:55):
And uh especially issue and and.
Speaker 3 (07:57):
And really yeah right, and relieve yourself the situation to
and to you know, just take a step back mentally,
because I know the rabbit holes some people go down,
you know, just aren't healthy for for.
Speaker 2 (08:09):
Hearing they're not healthy.
Speaker 1 (08:10):
And we you know, there's there's a good article that
I forget where we yes, it's by Quentin Fotrell or
Fotrell and uh, how do I know if my financial
advisor's political biases influenced his advice? His or her advice
is his is uh on his gender neutral, And it's
(08:32):
difficult sometimes you guard against that. And you know, we
have our our advice to our clients is UH funded,
founded in and set set hard in in you know,
economic advice and and and you know, and I think
that we stay within parameters of the client's objective so
that any political biases that that might infiltrate our advice
(08:56):
is checked with your growth and income. You have fifty
to seventy five per cent in the market. Your income,
you're fifty zero to fifty or a growth fund, growth investor,
and the people sign up for that, you're you're over
seventy five percent in the market. So so that's that's
one of the reasons how we check it. And we
have other other other situations as well. But I will
say though that and you talk about the volatility in
(09:19):
the market. You know, Monday, the market was down pretty big. Tuesday, Wednesday,
and Thursday was up pretty big, and we've kind of
gotten off and economic data has been good, corporate data
has been good. I do think the second quarter you're
going to get some data that's going to suggest that
the economy is slowing, you know, to recessionary pace. You know,
I would think. But I do think you can't deny.
(09:42):
It's impossible to deny in my opinion, And this is
not a political statement. You can't say you can't be
tweeting things. On opposite side of that, we're talking to China.
We're not talking to China. We're not talking right bess ins, Bessins,
or excuse me, Powell's a loser, he would behind the
eight ball.
Speaker 2 (10:01):
Oh no, I'm not going to fire them.
Speaker 3 (10:02):
You know.
Speaker 1 (10:03):
It's like saying you have cancer, you don't have cancer.
You have cancer, you don't have cancer. You know, it
just weighs on the psyche over time. So that's what
we're trying to wrestle with right now, is what is
the impact of uh these trade negotiations on the market
and on specifically on the economy over the shorter term
and on the market but also on the economy potentially
(10:25):
over intermediate long term.
Speaker 2 (10:26):
How does this play out? You know? How do how
do our.
Speaker 1 (10:30):
Trading partners, both friendly and at somewhat adversario, respond to
all this? So that's what we're trying to But so,
so that's what we're dealing with there. I got a
couple other emails that I received there, and I don't know,
you got something want to add to that before we.
Speaker 2 (10:44):
Move on to the No, just no, we can talk
about it later, all right.
Speaker 1 (10:48):
So a couple of things before we get one is
volatility on both sides is not healthy, all right. So
if the market goes up a thousand points or down
a thousand points, in my mind, yeah, the thousand points
up feel good, But unless they unless it's a long
lasting type of of Uh, it's unless it's gonna have
an economic impact that's long lasting. And like I said,
(11:10):
I think if if President Trump, even even if this
comes out smelling like a rose, I think that we
probably still have backwards, you know, back and forth between
the president and the media and other other lead countries
leaders in the media.
Speaker 2 (11:25):
That's gonna kind of make the.
Speaker 1 (11:27):
Stock market volatile for you know, at least until this
ninety day period of negotiations is over.
Speaker 2 (11:34):
Yeah, you know, so I don't feel good that.
Speaker 1 (11:36):
I feel good that the market was up a thousand
points on Tuesday and you know, file that through Wednesday
and Thursday. But it's now it's bumping up against fifty
five hundred or so on the S and P. Where's
the SMP and that right now?
Speaker 4 (11:46):
Where is it exactly?
Speaker 2 (11:48):
Yeah, it looks like or spy or whatever.
Speaker 1 (11:56):
Yeah, so's yeah, So it's basically fifty's bumping up against
fifty five, which is where it got hit.
Speaker 2 (12:02):
Uh was resistance last time.
Speaker 1 (12:04):
So you know, I just think you gotta be careful,
don't get too giddy, don't get too depressed, keep within
your objectives.
Speaker 2 (12:10):
And go from there. So so that's one thing.
Speaker 1 (12:13):
The other thing is, you know, oh you were saying
that at the beginning, and I wanted further comments from
you on that. Uh, you got a call from somebody
this is when the market went down, this is a
good opportunity, and they're like, you know, what did you
tell them? You know, you know, what were you saying
to them? When then when they you know, the markets
is you know, is the market is the market down?
Speaker 3 (12:34):
You know, I think that historically it should be a
good opportunity, but you know, there's a lot of things
going on in the world, especially macroeconomically that I think
you have to take a step back and could have ramifications. Uh,
you know, and tourists and stock came out with something
this week called the depreciating the dollar to grow the
manufacturing sector, and it's basically, you know, to summarize it,
(12:55):
you know, the manufacturing sector only makes up about eight
percent of total employment. So we're working so hard, you know,
on this and you can could say it's a great thing,
but you know, if the dollar falls in value, exports
become cheaper, which encourages foreign buyers to buy more manufacturer
and good that's great, But you know, at the at
the other end of the spectrum, by depreciating the dollar
(13:16):
and starting a trade warabout goods which make up less
than ten percent of our GDP, the US is risking
that the rest of the world will slow their imports
of the eighty percent of the US economy that is
services iPhones, windows, Facebook, Instagram, YouTube. So you know, yes,
I think it's important to build up the middle class
in this country. I just have a hard time believing
(13:39):
it's through the manufacturing sector. I think that it's through
the service sector that we have done through the past,
you know, ten twenty thirty years. I think it's through
innovation to create new jobs. You know, I don't think
it's bringing back old businesses that in old old business
sectors that we just don't do here anymore. And it's
hard to believe that there's going to be a major
(14:01):
change into US having being a manufacturing country.
Speaker 2 (14:06):
Again.
Speaker 1 (14:06):
There are pockets there, There are pockets where like for
national security, there's certainly rare minerals with that type of mining.
Speaker 2 (14:15):
Uh.
Speaker 1 (14:16):
But but we've also just think of the auto industry.
It's such an intricate measure. Excuse me, since it intricate
uh web of the supply chain and production between the US,
(14:40):
Canada and Mexico that's taken decades to really weave together,
that it's going to take a long time to really
break apart again. And that I find that I don't
find it applausible excuse that the supply chain when it
includes Mexico. In Canada, we can say national security, you know.
(15:03):
I think if you know, pharmaceuticals from like a China, yes,
certainly where you have distance and the relationship is not
you know, as solid as.
Speaker 3 (15:13):
Even chips and chips all that chip manufacturing back home important.
Speaker 1 (15:18):
But services, when you look at you look at some
of the some of the areas you mentioned, most people
don't realize. Also technology you mentioned YouTube, biotechnology, R and D.
You know, people think of services as flipping burgers, and
that's not true. And I think and they get, you know, yeah,
all the things that America gets well paid for. But
(15:40):
I think when you look at the larger percentage of
total production that labor represents, the harder it is, and
the more of a commoditized product that that that is
the result of that production, I think it's very difficult
to bring production back to the United States, and we
also have to recogniz as although we're twenty five percent
(16:02):
or so of global GDP, we're also only five percent
of the world's population. The other thing I think people
don't realize, and I think America's gotten.
Speaker 2 (16:12):
I don't know.
Speaker 1 (16:13):
This is what produces some anger is that it's not
a zero sum game. You know, the pie can expand
we want an expanding economy, global economy, want expanding pie,
so that the United States is getting twenty five percent
of a bigger and bigger pie and maybe twenty six
or twenty seven percent of whatever. But it's not it's
(16:36):
people think it's okay if we you know, if you
know there's a winner and there's a loser, there can
be more than one winner here. I mean, an ultimate
goal would be for all the economies to be first
world economies. Could think of all the purchasing power that
could buy all the all the US goods and services,
you know, So I think we've got to think of that.
(16:57):
Anything else, As far as emails that you've gotten lately.
Speaker 4 (16:59):
Air received, what else is?
Speaker 1 (17:02):
Yeah, the one I got the you know, talked about volatility.
You know, I got one you know from the client
he similar to you. He said, hey, you know, can
you buy me Adobe, A M D and I think
maybe a couple other tech stocks. I think you've got
to be careful here to continue to continue to maintain
a diversified portfolio. I think you get could get hit
(17:24):
on any front. Chipotle came out and said, hey, the
consumer slowing down a bit on the flip side. Alphabet
uh you know, AKA formerly known as Google came out
and said things were pretty good this morning, about five
or six percent. We're you know, taping this show on
Friday morning, and then and then Tesla and we could
(17:48):
talk a little bit about that tests the report of
twenty percent drop in auto revenue, but their stock rose.
So it's the actual information, it's how that data is received.
But I think all in all, during times like this,
she wanted diversified portfolio, right. And I think the last thing,
I got an email from one of our clients. He's
(18:08):
working on a new job. He wanted to roll over
his four three B to his IrH schwab and should
he wait for the market to settle down Since my
brother did this a few weeks ago and missed the
Wednesday spike, you.
Speaker 2 (18:20):
Know, so what do I do here. I don't want to.
I don't want to roll over my four O three B.
Speaker 4 (18:25):
You know, and that's tough.
Speaker 3 (18:26):
Like, you know, we we have clients that call, let's say,
you know, I think that.
Speaker 2 (18:30):
When you know, we we we.
Speaker 3 (18:32):
Do everything in our power to have clients not go
to all cash. You know, it's the worst thing to do. Hell,
you know, we'll get back and when the dust settles,
we'll get back in. When the you know, the market
goes down ten percent, well what if it goes down
eight what's your plan then? Right, So there's a lot
of different things that you know can come up, you know,
and we put out an article this week just you
know about that is you know, we try to work
(18:54):
at the peripheries. We never go to all cash. And
now I think in investing, you always have to invest
of what if you're wrong? You know, you never never
be too confident and stay diversified. And that's really what
we try to do with clients. And you know, I
know we talked a little bit earlier about you know,
not letting your political biases influence your portfolio. And I
(19:15):
think that's important really on both sides. You know, don't
get too confident and don't get get pessimistic. Work within
those ranges that you see appropriate for your risk tolerance.
Uh and in your age.
Speaker 2 (19:29):
Yeah.
Speaker 1 (19:29):
And and also you know you just said both comes
holds from both sides.
Speaker 2 (19:35):
Yeah.
Speaker 1 (19:35):
President Trump is not infallible. President Biden was not totally fallible.
If you're if if you uh, you know, uh, are
are a supporter of the president and not and having
opinions is not necessarily a political bias.
Speaker 2 (19:50):
You know, we deal with that all the time. Made
it may.
Speaker 1 (19:53):
We have a there was a committee that in a
financial committee of been not for profit that we manage
the money for And at the end, I said, you know,
I'm apologize if to because there were there were let's
say ten people on that committee and after you know,
reviewing their account and giving a presentation, you know, I said,
you know, if if roughly fifty percent of the people
(20:14):
voted for Kamala Harrison fifty percent for President Trump, you
know roughly Okay, I know it was different, but you know,
you know, then there's probably five people here who voted
for President Trump, will assume okay. And I said, you know,
I apologize, I'm not I'm not you know, down on
President Trump. I'm basically taking the market's response to the
(20:36):
to the what's transpired since inauguration, and said, they're the
market's concerned here, and these were my concerns. And I said,
on the flip side, you know this, you know, assuming
this negotiations go well, this could turn out to be good.
But I guess my point is more that having it,
we have, you know, managing you know, seven hundred million bucks.
You know, we have to have an economic opinions on
(20:58):
what these what this means to the stock market over
the short, intermediate, and long term, and also the bond
and treasury market.
Speaker 2 (21:05):
You also talked about the dollar a little bit, yeah,
you know.
Speaker 3 (21:08):
And also you know, as we were talking about, you know,
imports from China, intermediate goods you used in US production.
So you know, it's not taking a political stance. It's
just stating. You know, if you put slab a two
hundred and forty five percent tariff on goods coming in
from you know, China, and forty percent of those imports
are using intermediary goods, think prices will rise. It's it's
(21:30):
not brain surgery here. They have to know what I mean,
They have to rise, So you know, and I think
that's if that's what people signed up for, is hey,
you know, we're gonna produce things in in in America again,
and if that comes with some inflation in the short
term because of tariffs, you know, we're willing to do that.
Speaker 1 (21:49):
And we have clients that say, yes, I am, you know,
and that may very and it may very well work
out well.
Speaker 2 (21:54):
You know, we'll see, we'll see. It's just you know
what we say, it's an experiment.
Speaker 3 (21:58):
This is an experiment. Has never happened before. So when
you're when you can't really back test any of the
policies Trump's putting in place, I think it just warrants
a little bit of caution.
Speaker 4 (22:10):
It's the right thing to do.
Speaker 1 (22:11):
Right, right, And I couldn't say that better really, you know,
So this week and I know we're running up against
it in about another minute and thirty, uh. Just to
just to close out kind of the economic discussion for
the first half, Secretary Treasury Besson Scott Bessen basically said
(22:32):
expects there's gonna be de escalation in the trade negotiations
or the tenor of the trade negotiations with China in
the very near future. I think that that provides support
for the market. And also, you know President Trump, you know,
although he spoke in harsh terms in describing the job
(22:54):
that Jerome pal fed Chair has done, he basically said,
you know, no, you know, he's not firing, not going anywhere.
Speaker 2 (23:00):
I think those at least on the on the on
the And then.
Speaker 3 (23:03):
I think he's listening to the backlash of the things
that he's happening. You know, you saw the tech you
saw the ten year rows. Uh. He he made some concessions.
You saw some backlash about him going after Powell. He
made some concessions. So I think it means he's listening.
He's listening to the market, uh, and he's listening to,
you know, what people are comfortable with.
Speaker 1 (23:22):
And I think that I think I think that's a
good side. And and God, thank God for Scot Besson
because I think he is the uh one, one of
the people in the room that President Trump has listening to.
I think there's some uh uh corporate leaders that he's
listening to as well, and I think I think that's
softening the tone. I think he's been out of the
news a little bit this week, which is good. And
let's hope these uh these negotiations are moving in the
(23:44):
positive director right, we got our newsletter written. Uh, we're
going to talk about what is contained within there, uh
for out look for the market for the second quarter,
and then maybe touch on some other corporate earnings as well.
But it's ten thirty on the station depend Upon for News,
weather and information, News to ten and one to three
one g y, good morning, and welcome back to the
second half hour of the Capitol District's Money and Investment program.
(24:05):
You're listening to the Fagan Financial Report. I'm Dennis Fagan,
sitting here with my son Aaron, and as we do
every Sunday morning. There there is a couple of things.
One is happy second birthday to Oliver Lota Oliver Motto
Moato Motto. Happy second birthday who works with us. Daughter
(24:26):
Sarah has a two year old Oliver.
Speaker 3 (24:28):
Yes, and we're going going went to his party Satday.
We're filming this on Friday and the party is tomorrow
on Saturday. And you know, I do love when we
get our entire family together. Yes, it's just great to
see everybody and I'm really looking forward to it.
Speaker 2 (24:47):
Yeah, me too. It should be nice.
Speaker 1 (24:48):
But second birthday was on April eighteenth, and Sarah's birthday
was two days later on April twentieth. Yeah, so a
couple of good birthdays going out. You know, people say
the word out out. I don't use the word shout out,
just the normal you know, would like to say congratulations
on say I want to give a shout out to
(25:09):
younger hip, more hip, more hip than than I like
to consider myself.
Speaker 2 (25:13):
Maybe I should start saying shooting.
Speaker 1 (25:14):
Maybe it raise my my standing in the front of people.
Speaker 2 (25:19):
Like you do you say shout out?
Speaker 4 (25:21):
I don't know what I say. I don't say it
enough to know what I say.
Speaker 2 (25:24):
Right, Well, go ahead and say, say happy birthday. I
want to give a shout out, So you do say
shout out. I knew it. I knew it.
Speaker 1 (25:32):
I can't do it now. I can't do it now
you're thirty five. So a couple of things we did
not touch on in the first half. And Boeing Boeing
to seek FA approval this year to increase seven thirty
seven max production as losses narrow. They just hired Kelly
Ortberg later last year as the new CEO. He's turning,
(25:57):
turning the ship around the airship or round, so to speak,
reported a first quarter net loss of negligible loss revenue
up eighteen percent to nineteen point five billion. Here's and
here's my couple of things I have. China came out
and said they were halting, you know, purchases of Boeing airlines.
(26:20):
They can only do that temporarily. I mean they need
airlines in the worst possible way.
Speaker 3 (26:26):
And between you did see some I think what that
China returned a Boeing though as well, right, so, I
think that drove the stock down five or seven percent.
Speaker 1 (26:35):
So but that that earning has really supported it. We'rest
Boeing trading now. Are one one sixty two, one seventy
two and around there yep, on a stock price.
Speaker 2 (26:44):
You have the computer over there. I thought it was
seventy six.
Speaker 1 (26:49):
And that's above in general our purchase price. We bought
Boeing because indeed it is the Theyian Airbus are the
only commercial commercial manufacturers wide bardy wide body jets. But
that you know, so so that that that that is
what the US economy is experiencing right now. Manufacturing company
(27:11):
like Boeing high end. Certainly, that's what we need more
of in the United States, is manufacturers like that. So
that that's what Aaron and I were kind of like
talking about in the first half. The second thing I'll
say about that is is that that that's who's caught
really between the crosshairs in this trade spat slash war.
(27:34):
Is the momentum of companies like Boeing. Well, first, we're
Boeing to turn turn their business around after you know,
a couple of issues with their with their their seven
thirty seven Max and and and that's what we're That's
what is kind of like Wall Street is dealing with
right now. Uh. I also will say that those are
(27:56):
also companies that have taken it on the chain in
and present pretty good opportunity in through here.
Speaker 4 (28:05):
I agree.
Speaker 3 (28:05):
You know, I think Boeing, as we said, you know,
you'd like to buy businesses that are duopolies. I think
what they did really well was higher I think Kelly
Oulbert or Berg and he said I think a day
or two ago that these trade uncertainties really won't affect Boeing,
And I think he has a background in mechanical engineering.
(28:26):
So I think what Boeing did poorly was they really
worked way more on their business than their product. And
I think they're getting back to their product point. And
you know, I do like Boeing.
Speaker 2 (28:38):
I think it.
Speaker 3 (28:39):
You know, it's when we first bought Boeing, and you know,
it's been an I don't I wouldn't say it's been
a good purchase or bad purchase. I think I still
think it will be a good purchase in the future.
But it's it's a turnaround story. You know, you buy stocks,
you buy companies when they're beat down, when you look
at their intrinsic value and uh, you know.
Speaker 4 (28:57):
A lot of other.
Speaker 3 (29:00):
Metrics, especially from a you know, a manufacturing company like Boeing,
and I think you just have to give it some time.
And again, you know, there's two has one competitor and
that's out of Europe. So you know, I think Boeing
will will will be okay in the long run. And
you know, the CEO has only been the CEO for
a year, so I think you have to give them
a little bit of time as well. They spent fifty
(29:22):
four billion dollars in cash in the first quarter of
last year. It's down to two billion dollars this quarter,
so it's a turnaround story. They like those wide body jets.
They don't turn fast, so good point in Titanic. You know,
I think you have to give it some time and
it'll work out.
Speaker 1 (29:38):
And I also think that we also owned three M
for that same reason. I think it's somewhat of a
turnaround story as well.
Speaker 3 (29:45):
You know, And in so far, we haven't really seen
much negativity in you know, forward outlook candidly since since
earnings began, you see some guidance that like that that
a little bit of uncertainty. But Boeing has said this,
you saw a little bit with Chipotle. But I I'm
not saying I don't trust Chipotle seeing a slow down
(30:08):
in the consumer. I just have issues sometimes when you
see like a home depot or lows blame the weather
for their poor performance. Yeah, it might have a little
bit to do with it, but you know, maybe people
are shifting away from your product as well.
Speaker 4 (30:24):
So uh yeah, you know, I.
Speaker 2 (30:27):
Think Chipotle is probably fairly by.
Speaker 1 (30:29):
We own probably five or six thousand shares for our clients.
I you know, I do think that you know, earning,
like we were seeing, earnings came in, you know, a
little bit above. Revenue came in a little bit of below,
although it did rise six point four percent. They expected
same same store sales were down a piece. Uh, they
(30:51):
expect a year over year same store sales to rise
in the in the low single digits. And I think
they're concerned about as are their customers, because they they're
not the they're they're they're you know, fast food, but
they're you know, a little bit above the McDonald's and
Burger Kings of the world obviously, and and probably in cost.
(31:13):
And you know, I think that they they are going
to be hit a little bit. Valuation is a little high,
and we do own some I think it's something we
have to review. Although I will say though that you know,
after having reported their earnings on Wednesday. See, it's also
about how how does how does the company stock perform?
Speaker 2 (31:33):
Or if you look at even in e t F, how.
Speaker 1 (31:35):
Does c I, b R the cybersecurity e TF perform
perform amidst good or bad news within the industry that
it deals with. And it's it's it's the news, but
it's the response to the news that's as important, because
it tells you whether or not the news is priced
in and whether or not investors are looking past that
(31:56):
news or not. And Chipotle was up a little bit
after that again and in a strong market.
Speaker 2 (32:01):
So I do give it some credence. But if you
don't know, to be a little very five or six
thousand years a.
Speaker 3 (32:07):
Year to day, see what cib or CIBR is up
one point ninety percent.
Speaker 2 (32:12):
Yeah, CIBR has been been very good to us.
Speaker 1 (32:14):
We traded something else for that, and that's something I
think that's a secular story.
Speaker 2 (32:18):
We also in Fortinet.
Speaker 4 (32:20):
To pull it down seventeen percent year.
Speaker 1 (32:22):
I think we bought it that fifty five. It was
probably with forty eight or forty nine.
Speaker 3 (32:25):
Yeah, six percent year over your revenue growth, sixty six
billion dollar market cap, you know. So it's an expensive
company trading at forty three times earning. So I think
it's a it's a tough one to you know, continue
to buy in my opinion, Yeah, me too, because of
the volatility that's associated with something like you know, a
fast food restaurant. Really test the reported earnings twenty percent
(32:47):
drop an auto revenue as first quarter results miss Wall
Street estimates. Testa miss on the top and bottom lines.
In the first quarter, automated revenue plunge twenty percent from
a year earlier. Stock is down forty one percent, so
far this year as Moesday's close, earnings for share twenty
seven cents versus thirty nine cents estimated revenue two billion
dollar mess nineteen point three four verse twenty one point
(33:08):
one one, so a little less than one billion dollars
total revenue is the nine percent from twenty one point
three billion dollars a year earlier.
Speaker 4 (33:16):
What else?
Speaker 3 (33:17):
Income plunged seventy one percent, yet the stock was up.
Speaker 1 (33:20):
Energy generation in storage revenue up sixty seven percent. I
think that's what the two point seven three billion that's
not it's still that fats but eleven or twelve percent
of total revenue up from one point sixty four billion
a year ago.
Speaker 2 (33:32):
You know, I know they.
Speaker 3 (33:34):
Talk about their artificial intelligence, they talk about a cheaper vehicle,
they talk about a ROBOTAXI. I think what Elon Musk
is very good at is talking about things that you
know will hopefully come to fruition. I think that has
put somewhat of a bottom on their stock, and it's
given the valuation that it has given itself. You know,
if you look at Tesla, it's a two trillion dollar company,
(34:00):
which is obviously really expensive, looks like you know, revenue
growth is eleven percent year over year.
Speaker 4 (34:07):
Oh that's Google.
Speaker 1 (34:08):
I'm depends what you depends what you compare it to.
If you compare it to an automobile manufacturer, yeah, it's
very expensive. If you compare it to a technology company,
you know, it's within reasons.
Speaker 3 (34:19):
Yeah, and is it somewhere in between and forty five
billion dollar market cap revenue growth you know, negative nine
percent year over year, that's just because you know what
we've seen. But a nine percent return on equity, price
to earnings ratio of one forty four, price of sales
of nine, so you know, see, obviously it's an expensive company.
Speaker 4 (34:36):
Yeah, I see that. What is it?
Speaker 2 (34:37):
Paper? Tesla? I am putting this into the two hard pile.
Speaker 4 (34:41):
Testa's in the two hard pile.
Speaker 3 (34:43):
Tesla's been in the two hard pile from a fundamental
investment for its existence. Yeah, you know, and you know
it's again, you know, the uncertainty that looms with what
Elon Musk did to you know, the European buyers as
well as you know, let's say half the population, who
I think would be a little bit hard pressed to
(35:03):
buy a Tesla.
Speaker 4 (35:05):
So yeah, I agree, it's in the too hard pile.
Speaker 2 (35:10):
I agree. On the other hand, I don't think Alphabet
is in the two hard pile.
Speaker 3 (35:14):
Alphabet is one of our two largest holdings depending on
the day, and it's it's crazy to me. For the
past two years, we've consistently been talking about chat, GPT, Google,
Google's losing its foothold. Google's losing this, you know. Google
is has a sixteen point five forward pe, nineteen point
(35:39):
five trailing peak, thirteen percent revenue growth in forty percent margins.
You know, it's it's just insane. How we how do
we forget in every three months that Google can can
consistently put out these numbers and has have the revenue
streams they have.
Speaker 2 (35:58):
Their cloud going.
Speaker 1 (35:59):
Cloud margins came in at seventeen point eight percent, you know,
versus nine point four percent a year ago. Cloud revenue
is about fourteen or fifteen percent of overall revenue. YouTube
Tube down a little weak relative to cloud, so it's
a traffic acquisition, cast up a little bit. Earnings per
(36:19):
share of two eighty one versus to one expected revenue
above expectations. I think the I think the whole search
is a concern. I think search is you know, I
will say I will say too with with people with
your generation. You know that the people who are still
on Google Search are not the UH and then the
(36:40):
transition to AI, they're gonna be you know, they're not
going to be using Google Search.
Speaker 3 (36:45):
For their AI to maybe not maybe though right now
Google is a verb or whatever, Google something I don't
know with the correct band aid so you know band
aid Uber is another one today Clean they have clear.
Speaker 1 (37:00):
X Yeah, q tip Q tip as a going yeah.
Q tip is actually who says cotton swab? Nobody says
cotton anymore.
Speaker 3 (37:08):
But even Weimo had two hundred and fifty thousand rides
per week. So I think we forget about uh, Google's
autonomous driving division two, which at two hundred and fifty
thousand paid.
Speaker 4 (37:20):
Weekly rides, which is uh.
Speaker 3 (37:23):
You know, everyone talks about Tesla and Uber for automative drive,
and I think we're really forgetting about one of the
I think the oldest of the three, which would be
Weaimo that was acquired by Google many of your many
years ago. I think we're underestimating Google and it's undervalued
compared to like the you know, let's say Google's trading
at nineteen times forward earnings. You know, the triple qs
(37:49):
are trading at you know, weighted p of thirty. So
you know, with the margins that they they have, and
you know, the consistently that they have, and you might say, hey,
you know chat GPT, the eight you know, could could
eat away. You know, you have Tesla with with theirs.
But at the end of the day, you know, Google
does have eighty three percent of search.
Speaker 4 (38:14):
Of the entire I guess search.
Speaker 3 (38:16):
Category, and that's recurring revenue. So you know, until you
see a major shift, I think, uh, you know, Google
will continue to you know, do well and is very
fairly value compared to its peers.
Speaker 1 (38:31):
The other thing, too, is I think you've got to
be careful of is a company like IBM. IBM stock
was down probably seven or eight percent. We do own
some IBM. You know, it had you know, earnings that
surpassed estimates, it had revenue that surpassed estimates. But they
gave like a lukewarm forward look. And they also said
some of their IBM okay. And also they said and
(38:53):
we don't we don't have it in front of us.
And they also said some because it was a few
days ago. They also said some of their government contracts
were canceled by Doge. I think you've got to be
careful about projecting forward any type of environment.
Speaker 2 (39:08):
You know.
Speaker 1 (39:09):
I think if I'm a if I'm a CEO of
a company, I am being cautious in the tenor of
my outlook that I'm passing along to investors going forward.
I'm just I can't be too optimistic because of the
legal ramifications of that optimism not be not being realized.
(39:29):
And so you're better off downplaying the future and outperforming
then you are, you know, kind of being optimistic and
coming in short of expectations. So I think a company
like IBM, I you know, with its dividend, I think
it's dividends pushing five percent. You know, it's probably a
(39:50):
buy three percent. It's probably a buy down in here
again let the dust settle. But but you look at IBM,
you look at Alphabet. Those are companies, very reasonable earnings,
some make someone would call them a value trap.
Speaker 2 (40:05):
But I think you've got to put.
Speaker 1 (40:06):
These types of Boeing three M into your portfolio to
go along with what we think is a goodbye down
in these levels is like an Amazon and companies.
Speaker 2 (40:16):
That are a little more highly valued.
Speaker 1 (40:18):
So the other thing I am going to right now,
I am going to.
Speaker 2 (40:25):
Give you.
Speaker 1 (40:27):
At April twenty fifth, which is today, at nine to
fifteen am, I'm gonna I'm gonna do a breaking news on.
Speaker 2 (40:33):
You, right, Josh. It's not Josh Hartnett, is it.
Speaker 1 (40:40):
Michael Hartnett, Bank of America Analysts says, sell US stock
rallies and buy the dip on everything else. This was
this was about twenty minutes ago. We remain first half
buyers of dips in bonds international and gold sellers of
the XPX. You know us, you know, some P five hundred.
Speaker 2 (41:03):
I agree with that.
Speaker 1 (41:04):
I think we're gonna I think we're gonna chop through
this first half, if not through the first three quarters
of this year, and then and then go from there.
Speaker 2 (41:12):
Would you be agree with that?
Speaker 1 (41:14):
Yeah, it's tactically speaking, it's not like we're going to
be sell the rally by the Depp, sell the rally
by the Depp. I don't think this person's job as
a strategist is to, you know, think everything is a
tradable event. You know, we can't move four or five percent.
You know, we're long term investors, so you know, but
I guess my point is that you know, I would
(41:35):
not be buying the market really unless unless people have way, way,
way too much cash, and in specific pieces after after
a rally like this, I would wait when when fear
when the fear gage starts to spike up a little
bit again, and you know, when when news comes out
that it's not too good.
Speaker 3 (41:51):
You know, and anything that was put in place by
Trump would not affect these past quarters. So you know,
it's great that we've had some great earnings so far,
but a kind of irrelevant if you if next quarter
or two quarters from now, you see tariffs on Europe.
You see tariffs everywhere, ten percent tariffs everywhere, right, Yeah,
and I think you could start seeing a slow slowing
(42:12):
down in just in the economy in general.
Speaker 4 (42:15):
So I would I would agree with that.
Speaker 2 (42:18):
So I would think, you know, sell the rally. I like, again,
this person's a strategies.
Speaker 1 (42:23):
I would say, you know, just be I would be
very cautious about buying into it now. Again, if you're
sitting in fifty percent cash and you see like an IBM,
you watch it for a few days and it looks
like it's bottoming out, that would be good.
Speaker 2 (42:36):
I would say, just don't chase the rally through here. Yeah,
anything else.
Speaker 1 (42:40):
That you want to touch on Aaron Fagan before we
get into our quarterly newsletter.
Speaker 4 (42:45):
Let me look through.
Speaker 3 (42:47):
You know, we usually touched beyond the news, which I
really do like it's mfs, go for it. You know,
we goth broke record highs. You know, I think we've
been talking about that a little bit lately. I think
that you're going to see bitcoin a little bit like gold.
I think you're going to see during two thousand and two,
we really saw bitcoin twenty two really trade like a
(43:10):
risk on asset. I'm really curious to see if we
see another downturn, if bitcoin strays away a little bit
from risk on assets and becomes a place of security,
if we see another pullback. So I think this is
kind of a big time for bitcoin to do what.
Speaker 2 (43:34):
It's supposed to do.
Speaker 3 (43:35):
It's supposed to do, it was meant to do when
it was meant to do. So I'm interested to see
that gold at all time highs.
Speaker 1 (43:43):
You know.
Speaker 3 (43:44):
That makes sense with obviously all the uncertainty in the
economy in the world, in the global economy as well
as the dollar can continuing to lose value.
Speaker 2 (43:55):
So hedge again it's gold.
Speaker 1 (43:57):
Gold is a hedge against inflation, hedge against the valatilion dollar,
a hedge against you know, America's you know kind of dominance,
you know, fading a little bit ahead against the you know,
a dispersion of US as a currency reserve. And and
I think that's what bitcoin was meant to do as well.
(44:19):
It certainly has not broken records got to about one
hundred and ten thousand. I think it's in about ninety four,
ninety five thousand. It had gotten down to seventy five thousand.
I think things are changing for that. Again, it's a
speculative asset if you're if you're an investor on your own,
maybe two or three percent of your assets, I think
from a not from a fiduciary standpoint, but I think,
(44:41):
you know, from an investing standpoint, it comes with a
lot of question marks in our clients'.
Speaker 2 (44:46):
Heads if you add that to their portfolio.
Speaker 1 (44:48):
Because just like I don't say shout out, a lot
of our clients are are people of my generation, get
bitcoins foreign.
Speaker 4 (45:00):
Right type of thing.
Speaker 3 (45:02):
And the last thing I would say is CEO sentiment plunges.
Sixty two percent of US CEOs forecast a slowdown or
a recession in the next six months versus forty eight
percent in March.
Speaker 2 (45:12):
And like, you know, again, I'm not.
Speaker 3 (45:16):
A lot of times these things, Like we were in
a chart of the week about bearers sentiment. The more
the more bearish sentiment, the more you really should be positive.
You know. The more people that are negative, the more
cash there is in people's pockets and on the sidelines,
the more positive you should really be. And also I
was a Cerio'd be like, yeah, it's the economy. It's
not me right right right, you know, So fourteen percent
(45:36):
anticipates severe recessions for the US economy compared with three
percent in March. So what I what I'm a bit
nervous about from an from an economy standpoint is, you know,
self fulfilling prophecy of everyone. If Trump continues to play
these games of yes no, yes, no, yes, no, people
will just wait on the sidelines or find I don't
(45:57):
think you find a safer investment elsewhere, even if it's
a little bit more costly from a tax perspective or
you know, a building perspective. So I'm a little bit
nervous about the you know, self fulfilling prophecy that the
uncertainty branks with this administrative and if.
Speaker 1 (46:13):
You were going to buy like a washing machine or
a bigger ticket item, you're going to buy it now.
I mean, you're gonna buy it before the tariffs hit
because you're nervous about it. So I think maybe maybe
it'll pull forward with economic activity.
Speaker 3 (46:26):
So I wouldn't get too confident with this earning season
being a reflection on the rest of the year.
Speaker 2 (46:34):
I wouldn't either. I wouldn't either.
Speaker 1 (46:37):
And yet I think you've just got to take it
one day at a time and pick through the rubble
on down days or with a company like IBM, where
there just might be a disconnect between the company's fundamentals
and maybe the CEO is is a little cautious on
the outlook, but you just got you know, I don't
(47:00):
think you. I don't think you deploy all your dry powder,
either on an individual security and individual ETF which is
a security as well, or the market in general. Don't say,
oh my gosh, I missed the boat. If President Trump
comes out and says something that hey, this is going
to be over in two days, or don't think you're
you know, you're going to go broke. If President Trump
(47:20):
comes out and says this is going to go on forever,
we're gonna apply a five five thousand dollars tarify in China.
So so just kind of hanging there with your longer
term objectives.
Speaker 2 (47:30):
I know it's boring. I know that's what you're hearing
probably from everybody. But make make some moves within within
your portfolio.
Speaker 1 (47:36):
But keep your asset class, asset allocation intact. And and
that's what we're doing for our client.
Speaker 2 (47:43):
Yeah, you know, a minute left, We got about a minute.
Speaker 1 (47:47):
Left, CEO Gold. We talked about Gold. The vic's up
and down. So it's the title. Maybe we'll talk about that.
We won't be able to talk about it now, but.
Speaker 3 (47:55):
Talk about our weekly article. We got our our quarterly
newsletter out. Yea, what did you title it? We don't
Need Another Hero? Yes, so we'll talk about that next week.
Speaker 2 (48:05):
We will, but I will I will tease that.
Speaker 1 (48:07):
So if you're one of the millions of listeners out there,
you want to listen next week. Now, We Don't Need
Another Hero was from the movie Thunderdome back in the
nine nineteen eighties. It's sung by Tina Turner, you know,
and that.
Speaker 2 (48:23):
Is, that is what we would say, Mad Max Thunderdome.
Speaker 1 (48:26):
No need to be a hero right now, so just
kind of be patient in here. We don't need another hero.
Sung by Tina Turner.
Speaker 3 (48:33):
Great movie. The Mad Max movies are very fun too. Yes,
a lot of movie references.
Speaker 2 (48:40):
That'll just do us.
Speaker 1 (48:40):
Give us a call during the week five one forty four,
check us out on the webit, fagan asset dot com,
or like us on Facebook.
Speaker 2 (48:47):
Have a great day.
Good morning, and welcome to the Capital District's Money and
Investment program. You're listening to the Fagan Financial Report. I'm
Dennis Fagan, sitting here with my son Aaron, as we
do every Sunday, and have been doing that for I
think thirty five years now, every Sunday for thirty five years.
Speaker 2 (00:14):
It's amazing how crazy time goes by.
Speaker 3 (00:16):
I remember when we used to be on vacation, used
to like run to the pay phone. We wait to
do the report at four o'clock to do the report.
Speaker 1 (00:23):
Yeah, Mom and I were in Ocean City last weekend.
I took we took both Friday the market was closed
and on our you know, in observance of Good Friday.
And we went out of town for a couple of
days before Easter and we were in Atlantic City and
that came up.
Speaker 3 (00:40):
I remember, and sure a lot camp. Didn't you drive
like two thousand miles?
Speaker 1 (00:44):
Yeah, yeah, yeah, a couple thousand miles over four or
five days. Just what we or just what I enjoy,
you know. And it was a bad therapy. It was therapy,
but so there there was And for the newer listeners,
we to do a radio spot at four fifteen or
so every day after the market closed for probably a
(01:06):
decade and a half.
Speaker 4 (01:07):
It's crazy, and.
Speaker 1 (01:08):
You would recaptive, you know, the market. I think it
was about yeah, a few few minutes spot recap the market.
And then where would you get I would you initially
have to schwab you for the internet. I would call
Schwab and Schwab would tell me the data and and
probably fifteen or twenty years ago, uh, the actual Just
as a point of interest, I guess I found interesting.
(01:30):
I find it interesting is that prices used to be
in eights, and then they they changed them to cents,
because what eight's the spread was an eighth to what
point one?
Speaker 2 (01:42):
Five cents? Twelve and a half cents.
Speaker 4 (01:45):
It's a lot.
Speaker 1 (01:46):
It is a lot for the spread, but now now
it's now then they converted that to cents. Uh. For
purchasing and selling stocks, probably fifteen or twenty years ago,
but it was at least nineteen ninety or so. We
began the annual report, and then or the daily report,
and then the radio show on the weekend. But the
daily report, uh, you know, it was a few minutes
(02:09):
every every day, and I had I had a cell phone.
I think at the time, but there wasn't a lot
of coverage.
Speaker 2 (02:18):
You know what I mean.
Speaker 3 (02:19):
I remember this cell phone because then we would play
with that, right the big block.
Speaker 1 (02:24):
Yeah, would play with it, but we said, we'd say,
and I don't know, I mean you you you would
be hard pressed to find a phone booth, now, yeah,
I think you know. For in my mind there was
there's one over in Cape cod that my mom and
I go over there sometimes I think, I see, But
you'd be hard pressed to find a cell phone or
a phone booth anywhere.
Speaker 2 (02:44):
Why do you need a phone booth?
Speaker 1 (02:46):
And if it's a phone booth, it's not there's nothing
in it. It's just an empty phone booth. That's like
some of the phone's not there anymore. But I.
Speaker 2 (02:55):
Race around.
Speaker 1 (02:56):
I would call call Schwab, get all the numbers and
then call on to w.
Speaker 2 (03:02):
G Y and so would they ask you questions? No, no,
they would.
Speaker 4 (03:07):
Just that's kind of nice.
Speaker 1 (03:09):
Yeah, but sometimes it got hairy because well, first of all,
you have to find a phone booth, and if you're away,
you don't know where it is that works, and you know,
you don't know you're stuck in traffic, or you get
to the phone booth and it's four o'clock and you
got twenty minutes to wait.
Speaker 4 (03:25):
Yeah, you know what I mean.
Speaker 2 (03:26):
So stuff like that.
Speaker 1 (03:26):
And then about fifteen years ago they just discontinued it
because of the internet everybody, and eventually I just picked
up the numbers from the internet. And then a few
years back, probably fifteen years back to gu, I said,
you know what, let's just discontinue this because people pick
up this information on the Internet. It's just so readily
available now, which was and then that was good by mate.
Speaker 3 (03:44):
Yeah someone what No, No, I don't know what I
was going to say there, but yeah, you know, I
do have many memories of find yeah, finding a phone
or going to the show with you when I was
a kid.
Speaker 2 (03:55):
Yeah, you would have it.
Speaker 3 (03:56):
There's to be a TV so you can if the
game was didn't used to do it at like four
or five.
Speaker 2 (04:00):
This show.
Speaker 1 (04:00):
Yeah, we've changed the times, Uncle Chris and I changed
the times from time to time. We used to do
on a Saturday morning and a Sunday morning, and then
we would go by where the g Why's biggest you know,
signal extended the most? Uh.
Speaker 2 (04:12):
Once it got to be the.
Speaker 1 (04:13):
Winter and and and this and that, and and then
h a lot of other people started to there there.
I think we were the only show, maybe ourself in
this one. Other Sandy family and Bob Agel on another station,
and then uh, there was Bob Brinker was on a
couple of I.
Speaker 3 (04:29):
Like Bob Brinker. He I think he just retired his newsletter.
He has like a monthly newsletter.
Speaker 2 (04:33):
He got it for years and years. Yeah, so is
he local? Non? So you were international Internet? Where are now?
It's on it.
Speaker 1 (04:43):
But I think what's interesting about that the whole evolution
and this kind of goes back to the market and
the volatility of it. And I think this stuff is
important putting putting this market into perspective is much more
important than to tell you, hey, the marking up and
mark them down, or do this or do that. There's
there's only incremental moves you can make. But I like
(05:04):
in this market and to that Geico commercial where you
know the people, the guys there with the chainsaw and
they're in the garage and and they the kids are
all there and it's a horror movie, like what should
we do?
Speaker 2 (05:20):
What should we do? Let's go to the cemetery, Let's
go to.
Speaker 1 (05:23):
The cemetery, you know, and and uh, one person says, well,
it's just why don't we go to the car it's running.
Speaker 2 (05:30):
They're like, Nahna, that'd be stupid. Let's go to the cemetery.
Speaker 1 (05:32):
So then they run to the cemetery and the and
the guy with the chainsaw, I think it's a guy
commercial just rolls his eyes. He's like, you know what,
I really got to do this. But I think it's
like the stock market, you know, you get so engrossed
in the fear of it or your worst your worst fears.
And I we sit right next to each other, you
myself and Doug that we hear conversations on the phone,
(05:56):
you know, with yourself specifically, and it's like, you know,
over and over again. It's like and I understand that,
you know, it's it's you know, this is what we have.
You know this, this is your asset allocation. Your portfolio
was designed for this. You know, we expect these types
of markets, you.
Speaker 3 (06:15):
Know, And and just just for reference, you know, I,
you know, two phone calls this week, and you know,
I think whatever whatever news stations some people listen to,
you know, they're listening to it.
Speaker 4 (06:27):
All day every day, you know, So from.
Speaker 3 (06:29):
One hand, you have you know a lot of people
that you know, I've heard the word sale in garage
sale and bargains like I've never had before in my career.
Speaker 2 (06:39):
Like it.
Speaker 4 (06:40):
It would be absolutely you know.
Speaker 3 (06:42):
Idiotic to think that that there's any substance to the
impact of what's going on geopolitically. And you're like, okay,
you know, and I'm not saying that, you know, I'm
not saying that the market is going to go down
or up. I'm saying, hey, these things are things worth uh,
you know, talking about considering it came out and considering,
you know, what these tears have on the economy.
Speaker 4 (07:04):
Then I had another.
Speaker 3 (07:05):
Person call me this week and who's in all treasuries,
and uh was asking me if her portfolio will go
to zero and she'll go and they'll go bankrupt in
quotations for whatever's going on in the world. So uh
with with basically saying, hey, you know, I don't have
(07:27):
faith in the US government anymore from a treasury standpoint.
Speaker 2 (07:30):
So crazy it is.
Speaker 4 (07:31):
And so you know, I.
Speaker 3 (07:33):
Think you have to take a step back, and we
do too. You know, We've been talking about it a
lot at work, you know, just with everything that's going on,
and you know, the ease of Donald Trump to uh
tweet out whatever he wants that will get a market
reaction and should because he's the president of the most
powerful country. So I think sometimes you have to take
a step back, you know, put the mets on.
Speaker 2 (07:55):
And uh especially issue and and.
Speaker 3 (07:57):
And really yeah right, and relieve yourself the situation to
and to you know, just take a step back mentally,
because I know the rabbit holes some people go down,
you know, just aren't healthy for for.
Speaker 2 (08:09):
Hearing they're not healthy.
Speaker 1 (08:10):
And we you know, there's there's a good article that
I forget where we yes, it's by Quentin Fotrell or
Fotrell and uh, how do I know if my financial
advisor's political biases influenced his advice? His or her advice
is his is uh on his gender neutral, And it's
(08:32):
difficult sometimes you guard against that. And you know, we
have our our advice to our clients is UH funded,
founded in and set set hard in in you know,
economic advice and and and you know, and I think
that we stay within parameters of the client's objective so
that any political biases that that might infiltrate our advice
(08:56):
is checked with your growth and income. You have fifty
to seventy five per cent in the market. Your income,
you're fifty zero to fifty or a growth fund, growth investor,
and the people sign up for that, you're you're over
seventy five percent in the market. So so that's that's
one of the reasons how we check it. And we
have other other other situations as well. But I will
say though that and you talk about the volatility in
(09:19):
the market. You know, Monday, the market was down pretty big. Tuesday, Wednesday,
and Thursday was up pretty big, and we've kind of
gotten off and economic data has been good, corporate data
has been good. I do think the second quarter you're
going to get some data that's going to suggest that
the economy is slowing, you know, to recessionary pace. You know,
I would think. But I do think you can't deny.
(09:42):
It's impossible to deny in my opinion, And this is
not a political statement. You can't say you can't be
tweeting things. On opposite side of that, we're talking to China.
We're not talking to China. We're not talking right bess ins, Bessins,
or excuse me, Powell's a loser, he would behind the
eight ball.
Speaker 2 (10:01):
Oh no, I'm not going to fire them.
Speaker 3 (10:02):
You know.
Speaker 1 (10:03):
It's like saying you have cancer, you don't have cancer.
You have cancer, you don't have cancer. You know, it
just weighs on the psyche over time. So that's what
we're trying to wrestle with right now, is what is
the impact of uh these trade negotiations on the market
and on specifically on the economy over the shorter term
and on the market but also on the economy potentially
(10:25):
over intermediate long term.
Speaker 2 (10:26):
How does this play out? You know? How do how
do our.
Speaker 1 (10:30):
Trading partners, both friendly and at somewhat adversario, respond to
all this? So that's what we're trying to But so,
so that's what we're dealing with there. I got a
couple other emails that I received there, and I don't know,
you got something want to add to that before we.
Speaker 2 (10:44):
Move on to the No, just no, we can talk
about it later, all right.
Speaker 1 (10:48):
So a couple of things before we get one is
volatility on both sides is not healthy, all right. So
if the market goes up a thousand points or down
a thousand points, in my mind, yeah, the thousand points
up feel good, But unless they unless it's a long
lasting type of of Uh, it's unless it's gonna have
an economic impact that's long lasting. And like I said,
(11:10):
I think if if President Trump, even even if this
comes out smelling like a rose, I think that we
probably still have backwards, you know, back and forth between
the president and the media and other other lead countries
leaders in the media.
Speaker 2 (11:25):
That's gonna kind of make the.
Speaker 1 (11:27):
Stock market volatile for you know, at least until this
ninety day period of negotiations is over.
Speaker 2 (11:34):
Yeah, you know, so I don't feel good that.
Speaker 1 (11:36):
I feel good that the market was up a thousand
points on Tuesday and you know, file that through Wednesday
and Thursday. But it's now it's bumping up against fifty
five hundred or so on the S and P. Where's
the SMP and that right now?
Speaker 4 (11:46):
Where is it exactly?
Speaker 2 (11:48):
Yeah, it looks like or spy or whatever.
Speaker 1 (11:56):
Yeah, so's yeah, So it's basically fifty's bumping up against
fifty five, which is where it got hit.
Speaker 2 (12:02):
Uh was resistance last time.
Speaker 1 (12:04):
So you know, I just think you gotta be careful,
don't get too giddy, don't get too depressed, keep within
your objectives.
Speaker 2 (12:10):
And go from there. So so that's one thing.
Speaker 1 (12:13):
The other thing is, you know, oh you were saying
that at the beginning, and I wanted further comments from
you on that. Uh, you got a call from somebody
this is when the market went down, this is a
good opportunity, and they're like, you know, what did you
tell them? You know, you know, what were you saying
to them? When then when they you know, the markets
is you know, is the market is the market down?
Speaker 3 (12:34):
You know, I think that historically it should be a
good opportunity, but you know, there's a lot of things
going on in the world, especially macroeconomically that I think
you have to take a step back and could have ramifications. Uh,
you know, and tourists and stock came out with something
this week called the depreciating the dollar to grow the
manufacturing sector, and it's basically, you know, to summarize it,
(12:55):
you know, the manufacturing sector only makes up about eight
percent of total employment. So we're working so hard, you know,
on this and you can could say it's a great thing,
but you know, if the dollar falls in value, exports
become cheaper, which encourages foreign buyers to buy more manufacturer
and good that's great, But you know, at the at
the other end of the spectrum, by depreciating the dollar
(13:16):
and starting a trade warabout goods which make up less
than ten percent of our GDP, the US is risking
that the rest of the world will slow their imports
of the eighty percent of the US economy that is
services iPhones, windows, Facebook, Instagram, YouTube. So you know, yes,
I think it's important to build up the middle class
in this country. I just have a hard time believing
(13:39):
it's through the manufacturing sector. I think that it's through
the service sector that we have done through the past,
you know, ten twenty thirty years. I think it's through
innovation to create new jobs. You know, I don't think
it's bringing back old businesses that in old old business
sectors that we just don't do here anymore. And it's
hard to believe that there's going to be a major
(14:01):
change into US having being a manufacturing country.
Speaker 2 (14:06):
Again.
Speaker 1 (14:06):
There are pockets there, There are pockets where like for
national security, there's certainly rare minerals with that type of mining.
Speaker 2 (14:15):
Uh.
Speaker 1 (14:16):
But but we've also just think of the auto industry.
It's such an intricate measure. Excuse me, since it intricate
uh web of the supply chain and production between the US,
(14:40):
Canada and Mexico that's taken decades to really weave together,
that it's going to take a long time to really
break apart again. And that I find that I don't
find it applausible excuse that the supply chain when it
includes Mexico. In Canada, we can say national security, you know.
(15:03):
I think if you know, pharmaceuticals from like a China, yes,
certainly where you have distance and the relationship is not
you know, as solid as.
Speaker 3 (15:13):
Even chips and chips all that chip manufacturing back home important.
Speaker 1 (15:18):
But services, when you look at you look at some
of the some of the areas you mentioned, most people
don't realize. Also technology you mentioned YouTube, biotechnology, R and D.
You know, people think of services as flipping burgers, and
that's not true. And I think and they get, you know, yeah,
all the things that America gets well paid for. But
(15:40):
I think when you look at the larger percentage of
total production that labor represents, the harder it is, and
the more of a commoditized product that that that is
the result of that production, I think it's very difficult
to bring production back to the United States, and we
also have to recogniz as although we're twenty five percent
(16:02):
or so of global GDP, we're also only five percent
of the world's population. The other thing I think people
don't realize, and I think America's gotten.
Speaker 2 (16:12):
I don't know.
Speaker 1 (16:13):
This is what produces some anger is that it's not
a zero sum game. You know, the pie can expand
we want an expanding economy, global economy, want expanding pie,
so that the United States is getting twenty five percent
of a bigger and bigger pie and maybe twenty six
or twenty seven percent of whatever. But it's not it's
(16:36):
people think it's okay if we you know, if you
know there's a winner and there's a loser, there can
be more than one winner here. I mean, an ultimate
goal would be for all the economies to be first
world economies. Could think of all the purchasing power that
could buy all the all the US goods and services,
you know, So I think we've got to think of that.
(16:57):
Anything else, As far as emails that you've gotten lately.
Speaker 4 (16:59):
Air received, what else is?
Speaker 1 (17:02):
Yeah, the one I got the you know, talked about volatility.
You know, I got one you know from the client
he similar to you. He said, hey, you know, can
you buy me Adobe, A M D and I think
maybe a couple other tech stocks. I think you've got
to be careful here to continue to continue to maintain
a diversified portfolio. I think you get could get hit
(17:24):
on any front. Chipotle came out and said, hey, the
consumer slowing down a bit on the flip side. Alphabet
uh you know, AKA formerly known as Google came out
and said things were pretty good this morning, about five
or six percent. We're you know, taping this show on
Friday morning, and then and then Tesla and we could
(17:48):
talk a little bit about that tests the report of
twenty percent drop in auto revenue, but their stock rose.
So it's the actual information, it's how that data is received.
But I think all in all, during times like this,
she wanted diversified portfolio, right. And I think the last thing,
I got an email from one of our clients. He's
(18:08):
working on a new job. He wanted to roll over
his four three B to his IrH schwab and should
he wait for the market to settle down Since my
brother did this a few weeks ago and missed the
Wednesday spike, you.
Speaker 2 (18:20):
Know, so what do I do here. I don't want to.
I don't want to roll over my four O three B.
Speaker 4 (18:25):
You know, and that's tough.
Speaker 3 (18:26):
Like, you know, we we have clients that call, let's say,
you know, I think that.
Speaker 2 (18:30):
When you know, we we we.
Speaker 3 (18:32):
Do everything in our power to have clients not go
to all cash. You know, it's the worst thing to do. Hell,
you know, we'll get back and when the dust settles,
we'll get back in. When the you know, the market
goes down ten percent, well what if it goes down
eight what's your plan then? Right, So there's a lot
of different things that you know can come up, you know,
and we put out an article this week just you
know about that is you know, we try to work
(18:54):
at the peripheries. We never go to all cash. And
now I think in investing, you always have to invest
of what if you're wrong? You know, you never never
be too confident and stay diversified. And that's really what
we try to do with clients. And you know, I
know we talked a little bit earlier about you know,
not letting your political biases influence your portfolio. And I
(19:15):
think that's important really on both sides. You know, don't
get too confident and don't get get pessimistic. Work within
those ranges that you see appropriate for your risk tolerance.
Uh and in your age.
Speaker 2 (19:29):
Yeah.
Speaker 1 (19:29):
And and also you know you just said both comes
holds from both sides.
Speaker 2 (19:35):
Yeah.
Speaker 1 (19:35):
President Trump is not infallible. President Biden was not totally fallible.
If you're if if you uh, you know, uh, are
are a supporter of the president and not and having
opinions is not necessarily a political bias.
Speaker 2 (19:50):
You know, we deal with that all the time. Made
it may.
Speaker 1 (19:53):
We have a there was a committee that in a
financial committee of been not for profit that we manage
the money for And at the end, I said, you know,
I'm apologize if to because there were there were let's
say ten people on that committee and after you know,
reviewing their account and giving a presentation, you know, I said,
you know, if if roughly fifty percent of the people
(20:14):
voted for Kamala Harrison fifty percent for President Trump, you
know roughly Okay, I know it was different, but you know,
you know, then there's probably five people here who voted
for President Trump, will assume okay. And I said, you know,
I apologize, I'm not I'm not you know, down on
President Trump. I'm basically taking the market's response to the
(20:36):
to the what's transpired since inauguration, and said, they're the
market's concerned here, and these were my concerns. And I said,
on the flip side, you know this, you know, assuming
this negotiations go well, this could turn out to be good.
But I guess my point is more that having it,
we have, you know, managing you know, seven hundred million bucks.
You know, we have to have an economic opinions on
(20:58):
what these what this means to the stock market over
the short, intermediate, and long term, and also the bond
and treasury market.
Speaker 2 (21:05):
You also talked about the dollar a little bit, yeah,
you know.
Speaker 3 (21:08):
And also you know, as we were talking about, you know,
imports from China, intermediate goods you used in US production.
So you know, it's not taking a political stance. It's
just stating. You know, if you put slab a two
hundred and forty five percent tariff on goods coming in
from you know, China, and forty percent of those imports
are using intermediary goods, think prices will rise. It's it's
(21:30):
not brain surgery here. They have to know what I mean,
They have to rise, So you know, and I think
that's if that's what people signed up for, is hey,
you know, we're gonna produce things in in in America again,
and if that comes with some inflation in the short
term because of tariffs, you know, we're willing to do that.
Speaker 1 (21:49):
And we have clients that say, yes, I am, you know,
and that may very and it may very well work
out well.
Speaker 2 (21:54):
You know, we'll see, we'll see. It's just you know
what we say, it's an experiment.
Speaker 3 (21:58):
This is an experiment. Has never happened before. So when
you're when you can't really back test any of the
policies Trump's putting in place, I think it just warrants
a little bit of caution.
Speaker 4 (22:10):
It's the right thing to do.
Speaker 1 (22:11):
Right, right, And I couldn't say that better really, you know,
So this week and I know we're running up against
it in about another minute and thirty, uh. Just to
just to close out kind of the economic discussion for
the first half, Secretary Treasury Besson Scott Bessen basically said
(22:32):
expects there's gonna be de escalation in the trade negotiations
or the tenor of the trade negotiations with China in
the very near future. I think that that provides support
for the market. And also, you know President Trump, you know,
although he spoke in harsh terms in describing the job
(22:54):
that Jerome pal fed Chair has done, he basically said,
you know, no, you know, he's not firing, not going anywhere.
Speaker 2 (23:00):
I think those at least on the on the on
the And then.
Speaker 3 (23:03):
I think he's listening to the backlash of the things
that he's happening. You know, you saw the tech you
saw the ten year rows. Uh. He he made some concessions.
You saw some backlash about him going after Powell. He
made some concessions. So I think it means he's listening.
He's listening to the market, uh, and he's listening to,
you know, what people are comfortable with.
Speaker 1 (23:22):
And I think that I think I think that's a
good side. And and God, thank God for Scot Besson
because I think he is the uh one, one of
the people in the room that President Trump has listening to.
I think there's some uh uh corporate leaders that he's
listening to as well, and I think I think that's
softening the tone. I think he's been out of the
news a little bit this week, which is good. And
let's hope these uh these negotiations are moving in the
(23:44):
positive director right, we got our newsletter written. Uh, we're
going to talk about what is contained within there, uh
for out look for the market for the second quarter,
and then maybe touch on some other corporate earnings as well.
But it's ten thirty on the station depend Upon for News,
weather and information, News to ten and one to three
one g y, good morning, and welcome back to the
second half hour of the Capitol District's Money and Investment program.
(24:05):
You're listening to the Fagan Financial Report. I'm Dennis Fagan,
sitting here with my son Aaron, and as we do
every Sunday morning. There there is a couple of things.
One is happy second birthday to Oliver Lota Oliver Motto
Moato Motto. Happy second birthday who works with us. Daughter
(24:26):
Sarah has a two year old Oliver.
Speaker 3 (24:28):
Yes, and we're going going went to his party Satday.
We're filming this on Friday and the party is tomorrow
on Saturday. And you know, I do love when we
get our entire family together. Yes, it's just great to
see everybody and I'm really looking forward to it.
Speaker 2 (24:47):
Yeah, me too. It should be nice.
Speaker 1 (24:48):
But second birthday was on April eighteenth, and Sarah's birthday
was two days later on April twentieth. Yeah, so a
couple of good birthdays going out. You know, people say
the word out out. I don't use the word shout out,
just the normal you know, would like to say congratulations
on say I want to give a shout out to
(25:09):
younger hip, more hip, more hip than than I like
to consider myself.
Speaker 2 (25:13):
Maybe I should start saying shooting.
Speaker 1 (25:14):
Maybe it raise my my standing in the front of people.
Speaker 2 (25:19):
Like you do you say shout out?
Speaker 4 (25:21):
I don't know what I say. I don't say it
enough to know what I say.
Speaker 2 (25:24):
Right, Well, go ahead and say, say happy birthday. I
want to give a shout out, So you do say
shout out. I knew it. I knew it.
Speaker 1 (25:32):
I can't do it now. I can't do it now
you're thirty five. So a couple of things we did
not touch on in the first half. And Boeing Boeing
to seek FA approval this year to increase seven thirty
seven max production as losses narrow. They just hired Kelly
Ortberg later last year as the new CEO. He's turning,
(25:57):
turning the ship around the airship or round, so to speak,
reported a first quarter net loss of negligible loss revenue
up eighteen percent to nineteen point five billion. Here's and
here's my couple of things I have. China came out
and said they were halting, you know, purchases of Boeing airlines.
(26:20):
They can only do that temporarily. I mean they need
airlines in the worst possible way.
Speaker 3 (26:26):
And between you did see some I think what that
China returned a Boeing though as well, right, so, I
think that drove the stock down five or seven percent.
Speaker 1 (26:35):
So but that that earning has really supported it. We'rest
Boeing trading now. Are one one sixty two, one seventy
two and around there yep, on a stock price.
Speaker 2 (26:44):
You have the computer over there. I thought it was
seventy six.
Speaker 1 (26:49):
And that's above in general our purchase price. We bought
Boeing because indeed it is the Theyian Airbus are the
only commercial commercial manufacturers wide bardy wide body jets. But
that you know, so so that that that that is
what the US economy is experiencing right now. Manufacturing company
(27:11):
like Boeing high end. Certainly, that's what we need more
of in the United States, is manufacturers like that. So
that that's what Aaron and I were kind of like
talking about in the first half. The second thing I'll
say about that is is that that that's who's caught
really between the crosshairs in this trade spat slash war.
(27:34):
Is the momentum of companies like Boeing. Well, first, we're
Boeing to turn turn their business around after you know,
a couple of issues with their with their their seven
thirty seven Max and and and that's what we're That's
what is kind of like Wall Street is dealing with
right now. Uh. I also will say that those are
(27:56):
also companies that have taken it on the chain in
and present pretty good opportunity in through here.
Speaker 4 (28:05):
I agree.
Speaker 3 (28:05):
You know, I think Boeing, as we said, you know,
you'd like to buy businesses that are duopolies. I think
what they did really well was higher I think Kelly
Oulbert or Berg and he said I think a day
or two ago that these trade uncertainties really won't affect Boeing,
And I think he has a background in mechanical engineering.
(28:26):
So I think what Boeing did poorly was they really
worked way more on their business than their product. And
I think they're getting back to their product point. And
you know, I do like Boeing.
Speaker 2 (28:38):
I think it.
Speaker 3 (28:39):
You know, it's when we first bought Boeing, and you know,
it's been an I don't I wouldn't say it's been
a good purchase or bad purchase. I think I still
think it will be a good purchase in the future.
But it's it's a turnaround story. You know, you buy stocks,
you buy companies when they're beat down, when you look
at their intrinsic value and uh, you know.
Speaker 4 (28:57):
A lot of other.
Speaker 3 (29:00):
Metrics, especially from a you know, a manufacturing company like Boeing,
and I think you just have to give it some time.
And again, you know, there's two has one competitor and
that's out of Europe. So you know, I think Boeing
will will will be okay in the long run. And
you know, the CEO has only been the CEO for
a year, so I think you have to give them
a little bit of time as well. They spent fifty
(29:22):
four billion dollars in cash in the first quarter of
last year. It's down to two billion dollars this quarter,
so it's a turnaround story. They like those wide body jets.
They don't turn fast, so good point in Titanic. You know,
I think you have to give it some time and
it'll work out.
Speaker 1 (29:38):
And I also think that we also owned three M
for that same reason. I think it's somewhat of a
turnaround story as well.
Speaker 3 (29:45):
You know, And in so far, we haven't really seen
much negativity in you know, forward outlook candidly since since
earnings began, you see some guidance that like that that
a little bit of uncertainty. But Boeing has said this,
you saw a little bit with Chipotle. But I I'm
not saying I don't trust Chipotle seeing a slow down
(30:08):
in the consumer. I just have issues sometimes when you
see like a home depot or lows blame the weather
for their poor performance. Yeah, it might have a little
bit to do with it, but you know, maybe people
are shifting away from your product as well.
Speaker 4 (30:24):
So uh yeah, you know, I.
Speaker 2 (30:27):
Think Chipotle is probably fairly by.
Speaker 1 (30:29):
We own probably five or six thousand shares for our clients.
I you know, I do think that you know, earning,
like we were seeing, earnings came in, you know, a
little bit above. Revenue came in a little bit of below,
although it did rise six point four percent. They expected
same same store sales were down a piece. Uh, they
(30:51):
expect a year over year same store sales to rise
in the in the low single digits. And I think
they're concerned about as are their customers, because they they're
not the they're they're they're you know, fast food, but
they're you know, a little bit above the McDonald's and
Burger Kings of the world obviously, and and probably in cost.
(31:13):
And you know, I think that they they are going
to be hit a little bit. Valuation is a little high,
and we do own some I think it's something we
have to review. Although I will say though that you know,
after having reported their earnings on Wednesday. See, it's also
about how how does how does the company stock perform?
Speaker 2 (31:33):
Or if you look at even in e t F, how.
Speaker 1 (31:35):
Does c I, b R the cybersecurity e TF perform
perform amidst good or bad news within the industry that
it deals with. And it's it's it's the news, but
it's the response to the news that's as important, because
it tells you whether or not the news is priced
in and whether or not investors are looking past that
(31:56):
news or not. And Chipotle was up a little bit
after that again and in a strong market.
Speaker 2 (32:01):
So I do give it some credence. But if you
don't know, to be a little very five or six
thousand years a.
Speaker 3 (32:07):
Year to day, see what cib or CIBR is up
one point ninety percent.
Speaker 2 (32:12):
Yeah, CIBR has been been very good to us.
Speaker 1 (32:14):
We traded something else for that, and that's something I
think that's a secular story.
Speaker 2 (32:18):
We also in Fortinet.
Speaker 4 (32:20):
To pull it down seventeen percent year.
Speaker 1 (32:22):
I think we bought it that fifty five. It was
probably with forty eight or forty nine.
Speaker 3 (32:25):
Yeah, six percent year over your revenue growth, sixty six
billion dollar market cap, you know. So it's an expensive
company trading at forty three times earning. So I think
it's a it's a tough one to you know, continue
to buy in my opinion, Yeah, me too, because of
the volatility that's associated with something like you know, a
fast food restaurant. Really test the reported earnings twenty percent
(32:47):
drop an auto revenue as first quarter results miss Wall
Street estimates. Testa miss on the top and bottom lines.
In the first quarter, automated revenue plunge twenty percent from
a year earlier. Stock is down forty one percent, so
far this year as Moesday's close, earnings for share twenty
seven cents versus thirty nine cents estimated revenue two billion
dollar mess nineteen point three four verse twenty one point
(33:08):
one one, so a little less than one billion dollars
total revenue is the nine percent from twenty one point
three billion dollars a year earlier.
Speaker 4 (33:16):
What else?
Speaker 3 (33:17):
Income plunged seventy one percent, yet the stock was up.
Speaker 1 (33:20):
Energy generation in storage revenue up sixty seven percent. I
think that's what the two point seven three billion that's
not it's still that fats but eleven or twelve percent
of total revenue up from one point sixty four billion
a year ago.
Speaker 2 (33:32):
You know, I know they.
Speaker 3 (33:34):
Talk about their artificial intelligence, they talk about a cheaper vehicle,
they talk about a ROBOTAXI. I think what Elon Musk
is very good at is talking about things that you
know will hopefully come to fruition. I think that has
put somewhat of a bottom on their stock, and it's
given the valuation that it has given itself. You know,
if you look at Tesla, it's a two trillion dollar company,
(34:00):
which is obviously really expensive, looks like you know, revenue
growth is eleven percent year over year.
Speaker 4 (34:07):
Oh that's Google.
Speaker 1 (34:08):
I'm depends what you depends what you compare it to.
If you compare it to an automobile manufacturer, yeah, it's
very expensive. If you compare it to a technology company,
you know, it's within reasons.
Speaker 3 (34:19):
Yeah, and is it somewhere in between and forty five
billion dollar market cap revenue growth you know, negative nine
percent year over year, that's just because you know what
we've seen. But a nine percent return on equity, price
to earnings ratio of one forty four, price of sales
of nine, so you know, see, obviously it's an expensive company.
Speaker 4 (34:36):
Yeah, I see that. What is it?
Speaker 2 (34:37):
Paper? Tesla? I am putting this into the two hard pile.
Speaker 4 (34:41):
Testa's in the two hard pile.
Speaker 3 (34:43):
Tesla's been in the two hard pile from a fundamental
investment for its existence. Yeah, you know, and you know
it's again, you know, the uncertainty that looms with what
Elon Musk did to you know, the European buyers as
well as you know, let's say half the population, who
I think would be a little bit hard pressed to
(35:03):
buy a Tesla.
Speaker 4 (35:05):
So yeah, I agree, it's in the too hard pile.
Speaker 2 (35:10):
I agree. On the other hand, I don't think Alphabet
is in the two hard pile.
Speaker 3 (35:14):
Alphabet is one of our two largest holdings depending on
the day, and it's it's crazy to me. For the
past two years, we've consistently been talking about chat, GPT, Google,
Google's losing its foothold. Google's losing this, you know. Google
is has a sixteen point five forward pe, nineteen point
(35:39):
five trailing peak, thirteen percent revenue growth in forty percent margins.
You know, it's it's just insane. How we how do
we forget in every three months that Google can can
consistently put out these numbers and has have the revenue
streams they have.
Speaker 2 (35:58):
Their cloud going.
Speaker 1 (35:59):
Cloud margins came in at seventeen point eight percent, you know,
versus nine point four percent a year ago. Cloud revenue
is about fourteen or fifteen percent of overall revenue. YouTube
Tube down a little weak relative to cloud, so it's
a traffic acquisition, cast up a little bit. Earnings per
(36:19):
share of two eighty one versus to one expected revenue
above expectations. I think the I think the whole search
is a concern. I think search is you know, I
will say I will say too with with people with
your generation. You know that the people who are still
on Google Search are not the UH and then the
(36:40):
transition to AI, they're gonna be you know, they're not
going to be using Google Search.
Speaker 3 (36:45):
For their AI to maybe not maybe though right now
Google is a verb or whatever, Google something I don't
know with the correct band aid so you know band
aid Uber is another one today Clean they have clear.
Speaker 1 (37:00):
X Yeah, q tip Q tip as a going yeah.
Q tip is actually who says cotton swab? Nobody says
cotton anymore.
Speaker 3 (37:08):
But even Weimo had two hundred and fifty thousand rides
per week. So I think we forget about uh, Google's
autonomous driving division two, which at two hundred and fifty
thousand paid.
Speaker 4 (37:20):
Weekly rides, which is uh.
Speaker 3 (37:23):
You know, everyone talks about Tesla and Uber for automative drive,
and I think we're really forgetting about one of the
I think the oldest of the three, which would be
Weaimo that was acquired by Google many of your many
years ago. I think we're underestimating Google and it's undervalued
compared to like the you know, let's say Google's trading
at nineteen times forward earnings. You know, the triple qs
(37:49):
are trading at you know, weighted p of thirty. So
you know, with the margins that they they have, and
you know, the consistently that they have, and you might say, hey,
you know chat GPT, the eight you know, could could
eat away. You know, you have Tesla with with theirs.
But at the end of the day, you know, Google
does have eighty three percent of search.
Speaker 4 (38:14):
Of the entire I guess search.
Speaker 3 (38:16):
Category, and that's recurring revenue. So you know, until you
see a major shift, I think, uh, you know, Google
will continue to you know, do well and is very
fairly value compared to its peers.
Speaker 1 (38:31):
The other thing, too, is I think you've got to
be careful of is a company like IBM. IBM stock
was down probably seven or eight percent. We do own
some IBM. You know, it had you know, earnings that
surpassed estimates, it had revenue that surpassed estimates. But they
gave like a lukewarm forward look. And they also said
some of their IBM okay. And also they said and
(38:53):
we don't we don't have it in front of us.
And they also said some because it was a few
days ago. They also said some of their government contracts
were canceled by Doge. I think you've got to be
careful about projecting forward any type of environment.
Speaker 2 (39:08):
You know.
Speaker 1 (39:09):
I think if I'm a if I'm a CEO of
a company, I am being cautious in the tenor of
my outlook that I'm passing along to investors going forward.
I'm just I can't be too optimistic because of the
legal ramifications of that optimism not be not being realized.
(39:29):
And so you're better off downplaying the future and outperforming
then you are, you know, kind of being optimistic and
coming in short of expectations. So I think a company
like IBM, I you know, with its dividend, I think
it's dividends pushing five percent. You know, it's probably a
(39:50):
buy three percent. It's probably a buy down in here
again let the dust settle. But but you look at IBM,
you look at Alphabet. Those are companies, very reasonable earnings,
some make someone would call them a value trap.
Speaker 2 (40:05):
But I think you've got to put.
Speaker 1 (40:06):
These types of Boeing three M into your portfolio to
go along with what we think is a goodbye down
in these levels is like an Amazon and companies.
Speaker 2 (40:16):
That are a little more highly valued.
Speaker 1 (40:18):
So the other thing I am going to right now,
I am going to.
Speaker 2 (40:25):
Give you.
Speaker 1 (40:27):
At April twenty fifth, which is today, at nine to
fifteen am, I'm gonna I'm gonna do a breaking news on.
Speaker 2 (40:33):
You, right, Josh. It's not Josh Hartnett, is it.
Speaker 1 (40:40):
Michael Hartnett, Bank of America Analysts says, sell US stock
rallies and buy the dip on everything else. This was
this was about twenty minutes ago. We remain first half
buyers of dips in bonds international and gold sellers of
the XPX. You know us, you know, some P five hundred.
Speaker 2 (41:03):
I agree with that.
Speaker 1 (41:04):
I think we're gonna I think we're gonna chop through
this first half, if not through the first three quarters
of this year, and then and then go from there.
Speaker 2 (41:12):
Would you be agree with that?
Speaker 1 (41:14):
Yeah, it's tactically speaking, it's not like we're going to
be sell the rally by the Depp, sell the rally
by the Depp. I don't think this person's job as
a strategist is to, you know, think everything is a
tradable event. You know, we can't move four or five percent.
You know, we're long term investors, so you know, but
I guess my point is that you know, I would
(41:35):
not be buying the market really unless unless people have way, way,
way too much cash, and in specific pieces after after
a rally like this, I would wait when when fear
when the fear gage starts to spike up a little
bit again, and you know, when when news comes out
that it's not too good.
Speaker 3 (41:51):
You know, and anything that was put in place by
Trump would not affect these past quarters. So you know,
it's great that we've had some great earnings so far,
but a kind of irrelevant if you if next quarter
or two quarters from now, you see tariffs on Europe.
You see tariffs everywhere, ten percent tariffs everywhere, right, Yeah,
and I think you could start seeing a slow slowing
(42:12):
down in just in the economy in general.
Speaker 4 (42:15):
So I would I would agree with that.
Speaker 2 (42:18):
So I would think, you know, sell the rally. I like, again,
this person's a strategies.
Speaker 1 (42:23):
I would say, you know, just be I would be
very cautious about buying into it now. Again, if you're
sitting in fifty percent cash and you see like an IBM,
you watch it for a few days and it looks
like it's bottoming out, that would be good.
Speaker 2 (42:36):
I would say, just don't chase the rally through here. Yeah,
anything else.
Speaker 1 (42:40):
That you want to touch on Aaron Fagan before we
get into our quarterly newsletter.
Speaker 4 (42:45):
Let me look through.
Speaker 3 (42:47):
You know, we usually touched beyond the news, which I
really do like it's mfs, go for it. You know,
we goth broke record highs. You know, I think we've
been talking about that a little bit lately. I think
that you're going to see bitcoin a little bit like gold.
I think you're going to see during two thousand and two,
we really saw bitcoin twenty two really trade like a
(43:10):
risk on asset. I'm really curious to see if we
see another downturn, if bitcoin strays away a little bit
from risk on assets and becomes a place of security,
if we see another pullback. So I think this is
kind of a big time for bitcoin to do what.
Speaker 2 (43:34):
It's supposed to do.
Speaker 3 (43:35):
It's supposed to do, it was meant to do when
it was meant to do. So I'm interested to see
that gold at all time highs.
Speaker 1 (43:43):
You know.
Speaker 3 (43:44):
That makes sense with obviously all the uncertainty in the
economy in the world, in the global economy as well
as the dollar can continuing to lose value.
Speaker 2 (43:55):
So hedge again it's gold.
Speaker 1 (43:57):
Gold is a hedge against inflation, hedge against the valatilion dollar,
a hedge against you know, America's you know kind of dominance,
you know, fading a little bit ahead against the you know,
a dispersion of US as a currency reserve. And and
I think that's what bitcoin was meant to do as well.
(44:19):
It certainly has not broken records got to about one
hundred and ten thousand. I think it's in about ninety four,
ninety five thousand. It had gotten down to seventy five thousand.
I think things are changing for that. Again, it's a
speculative asset if you're if you're an investor on your own,
maybe two or three percent of your assets, I think
from a not from a fiduciary standpoint, but I think,
(44:41):
you know, from an investing standpoint, it comes with a
lot of question marks in our clients'.
Speaker 2 (44:46):
Heads if you add that to their portfolio.
Speaker 1 (44:48):
Because just like I don't say shout out, a lot
of our clients are are people of my generation, get
bitcoins foreign.
Speaker 4 (45:00):
Right type of thing.
Speaker 3 (45:02):
And the last thing I would say is CEO sentiment plunges.
Sixty two percent of US CEOs forecast a slowdown or
a recession in the next six months versus forty eight
percent in March.
Speaker 2 (45:12):
And like, you know, again, I'm not.
Speaker 3 (45:16):
A lot of times these things, Like we were in
a chart of the week about bearers sentiment. The more
the more bearish sentiment, the more you really should be positive.
You know. The more people that are negative, the more
cash there is in people's pockets and on the sidelines,
the more positive you should really be. And also I
was a Cerio'd be like, yeah, it's the economy. It's
not me right right right, you know, So fourteen percent
(45:36):
anticipates severe recessions for the US economy compared with three
percent in March. So what I what I'm a bit
nervous about from an from an economy standpoint is, you know,
self fulfilling prophecy of everyone. If Trump continues to play
these games of yes no, yes, no, yes, no, people
will just wait on the sidelines or find I don't
(45:57):
think you find a safer investment elsewhere, even if it's
a little bit more costly from a tax perspective or
you know, a building perspective. So I'm a little bit
nervous about the you know, self fulfilling prophecy that the
uncertainty branks with this administrative and if.
Speaker 1 (46:13):
You were going to buy like a washing machine or
a bigger ticket item, you're going to buy it now.
I mean, you're gonna buy it before the tariffs hit
because you're nervous about it. So I think maybe maybe
it'll pull forward with economic activity.
Speaker 3 (46:26):
So I wouldn't get too confident with this earning season
being a reflection on the rest of the year.
Speaker 2 (46:34):
I wouldn't either. I wouldn't either.
Speaker 1 (46:37):
And yet I think you've just got to take it
one day at a time and pick through the rubble
on down days or with a company like IBM, where
there just might be a disconnect between the company's fundamentals
and maybe the CEO is is a little cautious on
the outlook, but you just got you know, I don't
(47:00):
think you. I don't think you deploy all your dry powder,
either on an individual security and individual ETF which is
a security as well, or the market in general. Don't say,
oh my gosh, I missed the boat. If President Trump
comes out and says something that hey, this is going
to be over in two days, or don't think you're
you know, you're going to go broke. If President Trump
(47:20):
comes out and says this is going to go on forever,
we're gonna apply a five five thousand dollars tarify in China.
So so just kind of hanging there with your longer
term objectives.
Speaker 2 (47:30):
I know it's boring. I know that's what you're hearing
probably from everybody. But make make some moves within within
your portfolio.
Speaker 1 (47:36):
But keep your asset class, asset allocation intact. And and
that's what we're doing for our client.
Speaker 2 (47:43):
Yeah, you know, a minute left, We got about a minute.
Speaker 1 (47:47):
Left, CEO Gold. We talked about Gold. The vic's up
and down. So it's the title. Maybe we'll talk about that.
We won't be able to talk about it now, but.
Speaker 3 (47:55):
Talk about our weekly article. We got our our quarterly
newsletter out. Yea, what did you title it? We don't
Need Another Hero? Yes, so we'll talk about that next week.
Speaker 2 (48:05):
We will, but I will I will tease that.
Speaker 1 (48:07):
So if you're one of the millions of listeners out there,
you want to listen next week. Now, We Don't Need
Another Hero was from the movie Thunderdome back in the
nine nineteen eighties. It's sung by Tina Turner, you know,
and that.
Speaker 2 (48:23):
Is, that is what we would say, Mad Max Thunderdome.
Speaker 1 (48:26):
No need to be a hero right now, so just
kind of be patient in here. We don't need another hero.
Sung by Tina Turner.
Speaker 3 (48:33):
Great movie. The Mad Max movies are very fun too. Yes,
a lot of movie references.
Speaker 2 (48:40):
That'll just do us.
Speaker 1 (48:40):
Give us a call during the week five one forty four,
check us out on the webit, fagan asset dot com,
or like us on Facebook.
Speaker 2 (48:47):
Have a great day.
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