The Fagan Financial Report

August 31st, 2025. 

Episode Transcript

Speaker 1 (00:01):
Good morning, and welcome to the Capital District's Money and
Investment program. You're listening to Fagan Financial Report on Dennis
Fagan sitting here with my son Aaron, as we do
every Sunday right here in News Talk G ten on
one O three one WGY. We're recording this at around
eleven o'clock on a Friday afternoon. The personal retail or
spending an income has already come out. The personal consumption

(00:23):
expenditures which I fed watch as closely came in in line.
Sets us up for perhaps a rake cut in September. Yeah,
two point nine percent year over year. I had Armageddon.
I call it armor Garden armor Geddon in the garden.

Speaker 2 (00:37):
You had a really good analogy this morning. Was it
an analogy or what did you say?

Speaker 3 (00:43):
Perception is nine tenths of the law? Yeah, people said possession.

Speaker 2 (00:46):
Is perception is nine tenths of the law. Yeah, that
was That was a good one. Yeah.

Speaker 3 (00:52):
Yeah, yeah.

Speaker 1 (00:52):
Well, we had a client who moved moved out of state,
and we've done a lot of work with them over
the past decade. His account has done wonderfully and I
don't want to get into numbers, but yeah, he has
done and we do deal in a business of numbers,
so I don't like to talk in you know, subjective terms.

Speaker 3 (01:11):
But he's done.

Speaker 1 (01:12):
He's done very very well relative to the market, you know,
relative to the relative to the underlying indices. And he,
you know, he and he said he was looking for
you know, something, something down there. And and I and
you know, rather than blame him, I thought to myself, well,
his his perception that this you know, performance is like
shooting fish in a barrel, and and and anyone can

(01:32):
do it, and you know, and that's what matters is
that maybe we didn't show him enough how well he's done.
And maybe maybe in general, are we don't get out
to people enough, our clients enough, you know, how how
they're doing, how whether we send we send a quarterly
report that details their performance over the past decade.

Speaker 3 (01:51):
Uh.

Speaker 1 (01:52):
For those accounts that are larger, the smaller accounts, we
you know, Schwab sends them stuff. So and Schwab also
sends our larger accounts information as well. But yeah, perception
is nine tenths of the laws. So it's what could
we do better really to to make sure that that client.
And then and if any of our clients is listening,
let me let us know what you want, you.

Speaker 2 (02:11):
Know, and you know, you know, if we can do
better or yeah, you know, it's a tough you know,
it's a tough you know, I guess business because you know,
I was saying that to Doug after we were kind
of talking about this account.

Speaker 4 (02:24):
Is you know, if you.

Speaker 2 (02:27):
I think I think one of the things that that
we do well is if someone's if someone comes and
comes to us for a second opinion, we actually tell
them if they're if if the person that's managing their
account and managing their finances is doing a good job.

Speaker 3 (02:40):
Right.

Speaker 2 (02:40):
So, but at the same time, I was telling the Doug,
you know, you someone could walk in here with any
portfolio in the world and we could you could pick
it apart, right, Yeah, you know, just because you know
more than than than you know your clients, and you know,
I don't think that's the right thing to do. And
you know, I think we did do a good a
good job for this person. But yeah, you know, I

(03:01):
think that I think that was that was a good
saying that that that you said earlier, is that you know,
I think, you know, the perception that we have with
with our clients and.

Speaker 1 (03:15):
And we lose very few clients, you know, less than
less than two percent of our value of our accounts
leaves every year, you know, other than you know, your
systematic distribution. So our retention ratio is very high. And
then I think our retention ratio is highest because we're
you know, we we try to do a good job.
We respond to our clients calls for service, We communicate

(03:37):
with them twice a week, try to.

Speaker 2 (03:39):
Do some atistic planning for them, you know, yeah, just
not just be investment managers. But yeah, you know, I
guess like financial financial managers.

Speaker 3 (03:48):
Well, you know, and sometimes sometimes it's.

Speaker 1 (03:50):
Like, what do you mean all they got to do
is eat, write an Exercise's got to be more to
it than that. There's got to be more to it.
So I think, you know, someone who's worth six seven,
eight hundred thousand dollars a million dollars thinks I need
a state planning, I need tax planning, I need long
term care planning, I need all these types of planning.
And that is all true. But a lot of that,
a lot of that is static. You know, Once you

(04:10):
do some tax planning, it's done. Once you do some
mistate planning, it's pretty much done for you know, years,
long term care planning.

Speaker 3 (04:18):
It's kind of.

Speaker 1 (04:18):
Whether it's a trust or long term care insurance or
leave it to chance or whatever. Once you've made that decision,
you put it to bed. The only thing that you
know requires ongoing management. And you know, you know, I'm
gonna say, generally speaking, the tax planning does. Yeah, it's
other things do. And I'm not to suggest that, but
I guess what I'm saying. We deal in something that's

(04:39):
more considered like a motion picture rather than a photograph.

Speaker 3 (04:42):
You can't take your account out every day and say, oh,
look at it, this is and take out you know,
Tuesday's numbers and say, oh, and they'll be the same today.
It changes every day.

Speaker 1 (04:51):
And sometimes that change in the inn the market, or
in the underg in the securities in your portfolio warrant
a change, and it's actionable and sometimes it's not. And
I think that's what I think a lot of people
don't understand, investors don't understand, is that some things aren't actionable.
Some things are are for diversification, you know. And I
didn't want to start off with this, but let's go
right to that article from from Ben Carlson that blog.

(05:13):
You know, there are no iron laws in markets, and
nothing works forever as an indicator. Perhaps studying the market
is useless. A podcast or to hymn ass and and
there and and you know, he basically says, you know,
there there are some iron laws in the stock market.

Speaker 3 (05:28):
There are some things that you can do.

Speaker 1 (05:30):
And you know, one of the one of the issues
I think that you that you come across is that diversification.
And he mentions, this is your is your best hedge
against extreme events?

Speaker 4 (05:42):
Uh? Yeah.

Speaker 3 (05:43):
He starts out that most most stocks Do you see that?
Do you see the article? Or no you haven't?

Speaker 4 (05:48):
Actually, well, why don't you?

Speaker 3 (05:49):
Why don't you take it?

Speaker 4 (05:49):
Why don't you Why don't you lead the I said,
I don't have it in front of it.

Speaker 3 (05:52):
I know it's going to give you this one and
you can lead the conversation there.

Speaker 2 (05:57):
So volatility is mean reverse. Oh so I have read this,
you know, but you know I don't have it up
in front of me. Volatility is mean reverting. Periods of
high volatility are inevitable followed by periods of low volatility,
and vice versa.

Speaker 3 (06:13):
And I think I'll go ahead.

Speaker 4 (06:14):
No, I think that we say that all the time,
you know.

Speaker 2 (06:16):
I think in retirement, I met with someone on Wednesday
that you know, it's scary working for however many years
in your life and then all of a sudden just
living off of your income.

Speaker 3 (06:26):
You know.

Speaker 2 (06:27):
I think what's value, very valuable in retirement is getting on,
getting comfort with being uncomfortable, you know, and uh, working
with someone that that that you trust in, uh, you know,
making sure that you know they can distribute your assets accordingly.
But you know, I do you know volatility is mean,

(06:49):
reverting is.

Speaker 1 (06:54):
Well, you gotta find the mean, you gotta find see,
I think volatility is down the the VIX is down
seventy percent since it's high in early April, all right,
And and I and I think if you want to
protect your portfolio, and we don't use these that often,
which you can use options or atfs that that use

(07:15):
options to protect your portfolio, I guess, my, my, my, my,
I guess comments on that would be you want to
buy volatility when it's down seventy percent because it's a
contryer and indicator. You don't want to buy volatility, you know,
after it's already spiked. I think you know, a lot

(07:37):
of people look for protection or look for insurance with
their portfolio with anything, you know, after the flood has come.
And you know, I think right now with the nastag
you know, yesterday Thursday's close of the Dow, the S
and P five put in US total market index all.

Speaker 3 (07:52):
Closed that record highs.

Speaker 1 (07:53):
The Russell two thousand, which is the second third thousand
largest American stocks, which we'll talk about later in the show,
is within three or four percent of it all time high,
and it hasn't been there in you know, many many months,
if not years, you know, you know, and going into September,
the next August was supposed to is historically a crappy
month as well, but you know, September follows August as

(08:14):
as pretty you know, sour month, and then in October
the market usually turns around, but the market continues to
confound investors. But I would say that, you know, this
is the time really if you want to, you know,
look at volatility as some protection in volatility, now would
be the time to do. But my point with that
article was more the diversification bullet that.

Speaker 2 (08:34):
Yeah, diversification is the best hedge against extreme events. And
you know, we we you know, I'm seeing a little
bit now is when clients go into their own portfolio
and start selling and buying things, you know, they start
selling things that aren't doing well and buying things that
are doing well.

Speaker 4 (08:48):
Then all of a sudden, you know, you.

Speaker 2 (08:50):
Have a portfolio that's just filled with you know, in
videos and Palenteers of the world. And I think having
a diversified portfolio does mean that you always have a
few stocks that uh aren't aren't doing as well as
the others right now, and I think you need those
in your portfolio to hedge against the bad times.

Speaker 1 (09:09):
But what would you say, like, what would like I'm
looking at the x l E it's up month to
date or over the trailing month is up two percent?

Speaker 3 (09:18):
All right? Then you take you know, like a Palenteer
over the Paleteer is one of our biggest holdings. And
we also learned the xl over over a Palenteer over
the past month is.

Speaker 4 (09:30):
High down.

Speaker 3 (09:32):
No, it's pretty much flat. I guess month of August
has been with the really things kicked in.

Speaker 1 (09:37):
My question too, is what to you is adequate diversification?
Like what to you is that if I'm let me ask,
let me let me quantify the question. Okay, I'm dealing like,
do we have a lot of different listeners out there?

Speaker 3 (09:54):
We have?

Speaker 1 (09:54):
I have a portfolio of just ETFs. What number of ETFs?

Speaker 2 (09:59):
You know?

Speaker 3 (10:00):
Instruct the portfolio.

Speaker 1 (10:01):
From cash and an ETF for like a like a growth,
a growth didn't come investor like it depends on the ETF,
you know, just during cash. Here's my money, Aaron, here's
five retire Yes, do you have?

Speaker 3 (10:13):
Yeah?

Speaker 4 (10:13):
How many you need more than five?

Speaker 1 (10:15):
Five ETFs on on the equity side, yeah, on on
the on the on the equity side.

Speaker 4 (10:20):
On the bond side. Three.

Speaker 3 (10:21):
Well, what do you usually put in a portfolio to
start off with?

Speaker 2 (10:23):
You know, if you have fifty percent in like SCHB,
which is the broad market ETF, but at the same
time SCHB is probably north of thirty percent tech. So
you know what we try to do even if you
have individual stocks or or or ETFs.

Speaker 4 (10:41):
You know SDHB. I'm just I'm just.

Speaker 2 (10:43):
Popping it up right now, has uh, you know, thirty
three percent technology. So if you have fifty percent of
your money and uh you know sdhdh B, then you
know I would put like fifteen percent in a in
a tech fund.

Speaker 4 (10:57):
I still do believe in technology.

Speaker 2 (10:59):
I had a meading with someone on Tuesday and just
you know, says, what is your investment approach? And you
know you can say that, you know, we have about
forty percent of technology.

Speaker 4 (11:09):
As a as a firm, I guess.

Speaker 2 (11:11):
Technology I would persent overweight you know, technology and.

Speaker 1 (11:15):
Communication services community. Yeah, imun to consumer discretionary.

Speaker 2 (11:18):
But you know, I think if you look at you know,
the value, I find a lot of value in technology
if you just look at things beside their you know,
price earnings ratio, if you look at their you know,
price earnings overgrowth, you look at their margins and they're just.

Speaker 3 (11:32):
You know, their addressable market.

Speaker 4 (11:34):
Yeah, so that I would have.

Speaker 2 (11:37):
You know, we usually have about five to ten percent
in international and global as well.

Speaker 4 (11:42):
And then you know we do use ETFs on the
value side.

Speaker 2 (11:47):
So if we do skew towards technology on the individual
stock side, we I do try to and you know,
I know we do try to use ETFs, you know,
to to counterbalance or balance that you know, overweight and technology.
So JAVA is a JP Morgan active value fund that
I do love. I do find a lot of value

(12:08):
in active value. I think people that can value value are.

Speaker 4 (12:15):
Are very I think, you know, I don't valuable valuable value.
And I think the same thing.

Speaker 2 (12:22):
On the bond side, I think people, I think you
can use like a flexible link flexible bond fund like
f l XR is tc w's, which is a great
firm that has a I think it's up like six
point five percent this year, and the A g G
is up five five and change or so, so you know,
I do think you can. I do. We do try to,
you know, invest in technology, but use sectors. We aren't

(12:45):
as good at valuing. I guess and and and find
good managers. So like JP Morgan Active Value is a
good one. D g T is a global ETF that's
done really well this year. I think it's up twenty
percent this year. A I r R is having a
really good year. It's a the American Renaisce Fund. It's
up about I think twenty percent as well. So you know,
but but like uh, I guess back to your question

(13:06):
is if if you had five funds, you know, I
think you could pick SHB JA V A J T
E k R T, JP Morgan Funds, DGT, which is
a good global fund.

Speaker 1 (13:20):
And then I think you go with three or four
funds on fixed income, so maybe eight to ten funds. Yeah,
but you want to make sure that you cover the
broad market, like if you use a broad market.

Speaker 2 (13:30):
Correlation to the S and P, because it's market cap weighted,
so that better companies do better, right, And I think
that's important. You know, you don't want to you don't
want the market to be up twenty and you'd be
up seven, right, you know?

Speaker 3 (13:40):
Well, and I think you protect yourself to a certain extent.

Speaker 1 (13:44):
By for forty percent weighted and technology, communications services consumer discretionary.
You know, if you if you look at the xl Y,
which is consumer discretionary, and you say, well, that's not technology,
why would you why would you call it that? And
then the number one holding and there is Amazon, and
then there's Tesla, and then you go down to bookings
Booking holdings that's five, but Home deepots three, McDonald's four,

(14:07):
So it's not certainly not all tech.

Speaker 4 (14:09):
And I mean Amazon and Tesla are thirty eight percent
of the fund.

Speaker 3 (14:14):
Right right, right?

Speaker 1 (14:15):
And then people say, well, you communication services, you count
as TechEd as well.

Speaker 3 (14:21):
The number one holding in there is Meta Platforms.

Speaker 1 (14:23):
Yeah, eighteen percent of the fund, Alphabet another twenty percent
of the fund, Netflix, another eight percent of the fund, electronic.

Speaker 3 (14:30):
Car it's T mobile.

Speaker 1 (14:31):
So right there, you're looking at it twenty nine and
fifteen is forty four, So you're looking at half the
fund literally in technology. So if you look at communication services,
can consumer discretionary, and technology, and you come up with
forty or forty five percent or so of your accounts,
that would be in those three sectors, I would think.
And then after that you're saying, that's when you kind

(14:52):
of because you said half an SCCHB, which is thirty
three percent in technology, so and then you said fifteen
percent of technology, so that that kicks you right up
to thirty three or thirty four percent just technology. So
what you're what we're saying, is like you had another
ten percent of communication services or consumer discretionary, and then
you work against that with the Javas of the world,

(15:13):
the dgts of the world, and then fill out your
fixed income with once you hit your your your cap
with the with the equity side. Okay, all right, and
you know another another kind of you know fund that
we've had for a while and it's and has done
a good job is jef by J. E. Pay p
I the JP Morgan Equity Premium Income. When it's up

(15:33):
about four and a half percent this year, it carries
a dividend of about eight percent, So you get some
income you paid.

Speaker 3 (15:40):
Why you wait, h you know, so I think that's
what that's what you can.

Speaker 2 (15:44):
Yeah, you can for growth and income or income accounts.
I think, you know, JEFFY is a great fund. You know,
a lot of our clients, you know, rely on their
portfolios for their you know, living expenses and and and
to have a comfortable retirement. And so I think jefpi's
a great fund that allows you to you know, stay
in the market, participate in the market, and you know,

(16:05):
have that you know, downside protection both in your portfolio
but also mentally right that when the market's down, you know,
fifteen percent maybe you know if you have ten percent
in JETPY that you know it does a you know,
it helps you sleep at night, and you.

Speaker 3 (16:20):
Know, no one needs help to sleep at night.

Speaker 1 (16:24):
Let me let me rephrase that a lot of our
clients don't need help to sleep at night.

Speaker 3 (16:30):
Right now.

Speaker 1 (16:31):
There are some clients who always need help to sleep
at night because they're.

Speaker 3 (16:34):
Worried about the market. They realized, they realize the gravity.

Speaker 1 (16:38):
Of investing, in the importance of investing. I think, you know,
and there's some clients who aren't going to realize the
gravity of things.

Speaker 3 (16:47):
Until they get punched in the face.

Speaker 4 (16:49):
Yeah, you know, I had someone coming.

Speaker 2 (16:51):
There were seventy one on on Tuesday or Wednesday, I
forget the exact day, but they were and you know,
it kind of like hit home, not hit home a
little bit, but it was. He was saying, how, you know,
all I want to do is not have to go
back to work like I've had some of my friends
have to do. Like that was like, you know, you know,
eye opening a little bit from like a scary you

(17:12):
know standpoint that now that is what you know that
that could happen to you. You know it shouldn't if you,
if you if you plan accordingly. But that's what you
don't want to do. You know, be in your mid
seventies and you know, have to go back to work.

Speaker 1 (17:25):
You've crossed the That's why I tell people my age,
I'm sixty three, sixty four. In a month or so,
you've crossed that threshold to financial independence. You just won't
don't want to go back out that if you consider
a threshold part of a door, you just don't want
to go back out that threshold.

Speaker 3 (17:38):
Yeah, you know, and wherever your lot is in life,
if you think about that too, air you think about me,
that's at you know, you know, thirty years older than
you or so, I'm not going to change, you know,
it's not if I had a million, five million, ten
million more dollars, what would I do differently? Probably not much.
You know, you're you're, You're kind of you're you're, you're,

(17:58):
you're You're.

Speaker 1 (17:59):
A lot in life is cast financially, but also your
habits in life were cast financially. Yes, there are a
lot of people who, you know, if they had a
few more bucks, would do things differently. And you know,
I'm probably the same way if I had a few
more bucks that do things differently. But generally speaking, you know,
I kind of go out.

Speaker 4 (18:15):
Your day to day life is the same.

Speaker 3 (18:17):
You know, my clothing's not going to change.

Speaker 1 (18:19):
Yeah, maybe they'd be a little better, but I'm not
going to all of a sudden being the Queen Mary,
you know what I mean.

Speaker 3 (18:24):
It's just it's not it's not.

Speaker 1 (18:25):
Who you are anymore. You become who you are through
the years of habits and it's not going to change.
So I think the most important thing is to make
sure that you don't go back out through that threshold.

Speaker 3 (18:36):
I think some and for the for ninety I don't know.
Would you say nine percent of our clients they never
touch their account now, like.

Speaker 2 (18:45):
Even if you think nine, yeah, I would say probably
ninety nine percent. Let's say you have five hundred thousand
dollars or a million dollars, and you know you are
someone to trade your own account, and you know you
have to take a step back and be like, all right,
if I have a million dollars, if I had three,
would my life change? Then it's not worth the risk
if your life wouldn't change to do something risky, to.

Speaker 3 (19:03):
Wake right, to wake up on that and you know,
to wake up on that the side of oh my gosh,
I never thought this could happen.

Speaker 1 (19:11):
Yeah, And that's you know, and I get into it
a little bit. I don't know if you have time now,
but that is my concern. And I was listening to
Rick Santelli and he was saying with the market, and
I know Andrew rous Sarkin on these are people on
CNBC was interviewing somebody. It was kind of interviewing somebody
about the whole Lisa Cook thing with with with President

(19:33):
Trump trying to fire her and what if Powell doesn't
abide by that, well then he have caused a fire
Jerome Powell. And also with the government taking a stake
in Intel the ten percent steak and then Kevin Hasset
getting on and say that this is kind of going
to be the way it is. Howard Lutnik, Commerce Secretary
is saying, you know, a Lackey Martin derives ninety seven

(19:53):
percent of its business from from the federal government. You know,
we should, you know, consider taking a stake in them.
And this is not this you know, you know, no
matter what you say, it's like, you know, I think
it's a bad idea. I think it's a bad idea
to have influence in companies because what what we're and
this was not a this was not a can or

(20:15):
we did not you did not say hey, that was
a good saying earlier because we wanted to circle back
to this. But if perception is nine tenths of the law,
then if the perception the only the only time it's
going to matter that the Fed is compromised in their
in their objectivity of the economy is in a crisis situation,

(20:36):
you know what I'm saying.

Speaker 4 (20:37):
Yeah, right, and the kind is going good? This is right?

Speaker 1 (20:41):
Or if everyone thinks the Fed should cut a little
bit and they cut, even if they even if investors
think they're compromised, well they should cut, you know. So
what it's going to count is when there is a crisis,
when it's up in the air, ask to really what
they should do. And then let's say they did cut.

Speaker 3 (20:57):
Let's say it was up in the air whether they
should cut, and then obviously the FED thinks it is,
but you know, let's say the.

Speaker 1 (21:02):
Vast majority of people thought it was and then they
cut by a point. Or if they do something that
is definitely out of out of the norm, that's what
you know, that's what that's cause the problem.

Speaker 3 (21:11):
You know.

Speaker 2 (21:12):
I read that book Sapiens, and it talks a lot
about norms, and I think, what, you know, what is
I guess a little bit dangerous is we break down
these norms and have no historical context with how this
works out. You know, So I think that, yeah, I
think that's kind of what's dangerous. What's going on right
now is you know, once we break down and once
we find ways to you know, fire Lisa Cook or

(21:33):
fire even with Powell with you know, oh they're spending
too much. It's like, I mean, I guess anyone can
do do anything if if they I guess if they,
if they find a way to.

Speaker 1 (21:43):
Uh, they'll find a way around the law. Yeah, And
I think that's the Everyone knows the President wants interest
rates lower. And I'm not saying it's not a good idea.
I'm just saying the method that he's going to perhaps
get interest rates going going lowing lower are not in
the best interests of the country over the longer haul.

(22:04):
And nobody knows when that's gonna matter. And just because
it doesn't matter now doesn't mean it's not gonna matter
in the future. And why why are we talking about
it if it doesn't matter now, Because our job is
to skate where the puck is going, And not that
we're making any changes now, but it's certainly for our clients.
The market's humming along, and the markets thinks out six

(22:24):
to twelve months, and at at some point in time
it's gonna matter. Now it's mattering on the long end,
if you think the interest rate curve is steepened, shorter
term interest rates are coming down, longer term interest rates
are not coming down the third years.

Speaker 2 (22:37):
Yeah, because why would we have confidence in the US
dollar and you know, in our economies. Really, if we're
firing the Bureau of Labor Statistics, you know, you're breeding
I guess, an economy that you really can't.

Speaker 3 (22:49):
Trust, right, And that's and that's the issue.

Speaker 1 (22:52):
And now I would say to President Trump's defense, I like,
you know, you know, on the surface, yes, you know,
why should we just give Intel money and not take
a stake in them?

Speaker 3 (23:03):
It's non voting, you know, so, and they can't sit
on the board. And so there are some.

Speaker 1 (23:10):
Some remnants or snippets of things that you know makes sense.
I mean, his negotiation tactics, they seem to be working out.

Speaker 4 (23:17):
In I think it makes sense.

Speaker 3 (23:18):
I don't.

Speaker 2 (23:18):
I don't know how much time we have left. I
mean it makes sense on a one instance basis. But
if you take another steak, then take another steak and
take another stake.

Speaker 3 (23:26):
You that's the problem.

Speaker 2 (23:27):
You you restrain innovation, right, Like now we're gonna what
are we going to force people to buy Intel?

Speaker 3 (23:32):
Chips that stay that are inferior to others.

Speaker 1 (23:34):
Right, So it's yeah, and those just things that will
come up along the way that you know that as
of now the market is is ignoring them. And I'm
not saying I'm balanced. It won't be good and I'm
saying I'm balanced. It's not smart for interest rates to glories.
We just got to be careful that we don't mess
around too much with the foundation of the of the

(23:56):
US economy. It's ten thirty on the station depend upon
for news, weather, and information, News Talk one three one.

Speaker 2 (24:01):
W g Y.

Speaker 1 (24:03):
Good morning, and welcome back to the second half hour
of the Capitol District's Money and Investment Programmer.

Speaker 3 (24:07):
You're listening to the Fagan Financial Report.

Speaker 1 (24:10):
I'm Dennis Fagan, sitting here with my son Aaron, as
we do every Sunday, and you know, we we get emails,
we get calls at the office whenever we bring up
something like this.

Speaker 3 (24:18):
I'm not.

Speaker 1 (24:20):
Something like what like you know, with with President Trump,
people think it's a political statement, you know. You know,
sometimes I think, you know, he's just he's different than
all of a lot of the past presidents. Certainly during
my lifetime and I've got to be careful that I
don't give him the leeway to think that, well, this
could be good. And I do think I do think
a lot of the things that he's doing are good.

(24:41):
I am just concerned about the role of Congress in
this whole process and making sure that it's well right.
But if we don't go through due process, then let's
assume President Trump has all good intentions. Then if we
get someone with bad intentions, we don't have those guardrails
there anymore, you know what I mean. The guardrails are

(25:01):
gone because President Trump quote unquote, you know, and let's
say he ends up being a great president, that they
won't be there for somebody who comes.

Speaker 3 (25:09):
Along who is not a great president, right, the roles
of the others in there.

Speaker 2 (25:14):
And you know, it's hard, you know, if you if
you look at finance and we try to back test
a lot, there's a lot of things happening right now
that you can't back test, right. So I think the
more things that you have going on that you can't
back test bring can lead to something happening that's unforeseen.
And I think that's kind of what we're just on
a little cautious about. Is you know, not knowing how

(25:36):
this is gonna work out because it's never been done before, right.
And you know, even if you take Intel for example,
I mean, look what happened to and the things that
you can, I guess back test a little.

Speaker 4 (25:46):
Bit or like taking a stake in Intel. Usually when
you protect a sector like this, it doesn't work out.

Speaker 3 (25:55):
Not on cutting edge, you know what I mean. You
think you think we talked about it last week.

Speaker 1 (25:58):
Can think about automobiles, you know, and back in the fifties,
you know, American car manufacturers were they were they were
putting out poor cars. Now we had some competition and
they started putting out, you know, good cars because we
had foreign cars come in. Kevin O'Leary warns of hyper
inflation of Trump sense interest rates, and you know, and
Kevin O'Leary is uh Canadian. I think, I don't know
if he's an American, you know, has a dual citizenship

(26:21):
or it's just an American citizen now, but he was
you know, he's considered right of center for sure, and
I would agree with that. I think that even if
the FED is wrong, right, even if even if a
year from now we go back and say, man, the
FED should have cut.

Speaker 3 (26:36):
President Trump was right, and I think the Fed should cut, right,
I don't.

Speaker 2 (26:41):
I mean we had PC coming at two point nine percent,
I mean is in line? Yeah, but since when is
this two percent target subjective?

Speaker 1 (26:49):
Right? Right?

Speaker 4 (26:50):
Aren't we aiming for two percent inflation? So now two
point nine is good enough?

Speaker 3 (26:54):
Well, you know, but you gotta, you gotta, you gotta.

Speaker 1 (26:56):
But labor markets weakening, and you know, and I'm not this,
you know, we all have our opinions. But as I'm saying,
is a quarter point wouldn't hurt, wouldn't hurt? You know,
I think it gives a nod to the weak labor market.
But my point is to help if we're seeing the
long rate.

Speaker 2 (27:11):
You know, we're not really seeing much movement on the
on the long end. You know, I got a he
locked the other day and they're like, you know, rate
should you know? The kid he was in there was like,
you know this is your he lock. But you know
we're expecting two rate cuts, which should help out your
your your helock.

Speaker 4 (27:27):
I'm like, why right? You know it?

Speaker 2 (27:30):
You know the we talk about this on the on
the show once in a while is you know, mortgage
rates really aren't it's more supply and demand.

Speaker 3 (27:36):
They're not that well that much tied.

Speaker 1 (27:38):
They're tied more to the longer dated treasuries, and right
now they're tied more to inflation expectations. And if the
dollar weekends, inflation expectations, you know, historically rise a little bit.
But my I guess and I was riding with mom
in the car is today I took a day off,
and we were saying that, and I asked her to, uh,

(27:59):
you knowe me something on her phone because mine was
plugged into the ways and that, you know, And I
was saying that, you know, even if and I didn't
want to forget this, that even if the FED is
proved wrong on whether or not they should have cut rates,
let's say it's let's say, in hindsight, they should have
cut rates six months ago. The method that we're getting
there and if we, if we, if the FED can't

(28:21):
maintain its objectivity, that's more important than whether this FED.

Speaker 3 (28:25):
Is right or wrong. Right now. You know, the Fed's
going to be wrong. Future Feds are going to be wrong,
you know, but their objectivity is more important. Now.

Speaker 1 (28:34):
I've heard people on the on the air say, and
I kind of agree that nobody is completely objective. Everybody
has a political bias, and that's kind of that's kind
of the difference. But the FED does try to set
that aside. I assume, and you know, I think it's
you know, kind of I assume that there's you know,
different political biases on with all the twelve FED governors.

Speaker 3 (28:55):
So so we'll see.

Speaker 1 (28:56):
But I I do you know that that's that's and
it's more worry, it's it's it's a worry for competitiveness
of US business. But I think that's second to the
worry that that the lack of FED objectivity has as
it pertains to the to the to the dollar and
interest rates. I think that's where President Trump could be
making a mistake, you know.

Speaker 3 (29:17):
And again someone would even know relative to President Trump,
and I agree, you know, President Trump's the president. Okay,
So so that's all.

Speaker 1 (29:24):
So, you know, I mean, you take it for what
my comments are worth. But I haven't even gotten to
armor garden.

Speaker 4 (29:32):
What's army garden?

Speaker 1 (29:33):
Armor garden? Not in the garden armor garden. So I
go away Wednesday, come back yesterday. Oh jeez, yeah, I
have two I mean, Cale, I'm not I like cal right,
I'm not a like like a health not but I
like cale and I mean, you know, I've been cutting
them back and saving.

Speaker 4 (29:50):
I'm easy to grow too.

Speaker 1 (29:52):
Kelly is easy to grow. But you can cut it
back and it's not like lettuce. You cut it back
once and it kind of bolts. It gets crumbing and
it gets like gooey.

Speaker 3 (30:00):
Yeah, it's such. It's a firm. You grow it, you
cut the bottom.

Speaker 1 (30:03):
Leaves off, it continues to grow, grows more leaves. It
was kind of all right, you know, we'll do what
Carolyn makes from your.

Speaker 3 (30:09):
Mom makes a you know, Brussels sprout and cal salad
with with good dressing.

Speaker 1 (30:13):
And I was looking forward to it. And I had
these two boxes literally right next to our back windows.
You know where they are, right the boxes along the
back of the house. Yeah, yeah, you do, right. So
so I have two you know, kale there. And I
came going one night and I came home to literally
to to just stalks, stalks with no kill on them.

(30:36):
And then then they had two Brussels sprouts right next
to them gone, and I.

Speaker 3 (30:40):
Had to be a deer.

Speaker 2 (30:41):
You know, it's funny, you said, Farma Gedt in farm
farm a garden farmer garden.

Speaker 3 (30:47):
I like, I like them. I write that down.

Speaker 4 (30:49):
But no, it's a show on the sheep showing the
sheep and the sheep.

Speaker 3 (30:53):
I don't have a three year old.

Speaker 4 (30:55):
It's uh, I would no, it's the guys library.

Speaker 2 (31:00):
What is it?

Speaker 4 (31:00):
Whilston Gramet.

Speaker 2 (31:02):
Oh wow, show on the sheep, but farm again and
it's like an alien comes to the farm.

Speaker 4 (31:06):
Jude loves it. Oh really, farm gets Show on the
Sheep and Farm again.

Speaker 3 (31:10):
I have to watch that. But yeah, yeah, on a farm.

Speaker 1 (31:12):
So I'm a little disappointed in that. Still got twelve
butternuts squash? I got none? You got you gotta you
gotta harden them off. And it's more of a fall.

Speaker 4 (31:21):
Food anyways, you just can't eat in summer.

Speaker 3 (31:24):
I maybe I won't grow your pumpkin next year if
you if you can.

Speaker 2 (31:27):
My pumpkins look great. You know I should put them
up on our fagan Assisi's Instagram.

Speaker 3 (31:31):
Yeah could you do that?

Speaker 4 (31:32):
Yeah, it says Jude and.

Speaker 3 (31:33):
Esmee you know, and and do the same.

Speaker 4 (31:36):
Yeah, I mean Chloe to your neighbor's granddaughters.

Speaker 3 (31:40):
So I made.

Speaker 4 (31:40):
Yeah, it's pretty cool. Jude loves it. He's like, there's
my pumpkins.

Speaker 2 (31:44):
But he had a little bit of a hissy fit
yesterday when I couldn't bring him inside.

Speaker 4 (31:47):
Can I bring my pumpkin inside?

Speaker 2 (31:49):
Like?

Speaker 3 (31:49):
No, your pumpkin inside? Why?

Speaker 1 (31:51):
Because I'm the bust, I said, So, maybe one for
Oliver too. Sarah's due soon, Sarah's do soon. Anyways, let's
get back to business up and yeah, I like you
to like to lead on the hall in Vidia.

Speaker 2 (32:04):
Yeah, I mean, I think what when in Vidio comes
out with earnings, what you don't want is them to
talk about a slow down in spending for their clients, right,
And I think that's what you didn't see. So I
think you're going to see, you know, I mean it's
it's the NAZAC down about one percent on on Friday
as of right now at eleven forty two.

Speaker 4 (32:24):
So I don't think in.

Speaker 2 (32:27):
The near future you're going to see ever see in
Vidia with you know, ten twenty percent like you see
in other companies in blow off earnings, because I think
it's kind of expected right now. But I think you know,
you saw their revenue go fifty six percent year over
year for a four and a half trillion dollar market
cap company. Margins north of fifty percent. It's hard to

(32:52):
sell in Vidia, but I also think it's hard to
buy in Vidia here, you know. I think that what
you want to see with Nvidia is, you know, the
continued spending of large cap technology into artificial intelligence, data centers, infrastructure.
So I think that's what you saw. I think that
does put a floor in the market, you know, whether
it be you know, three four five percent, I do
think there is a floor in the market. As long

(33:13):
as we continue to see these companies spending.

Speaker 1 (33:15):
I think there's a floor in the market. I agree
as long as you know the AI trade or not
even the trade, as long as you know strength and
spending as you said, remains intact, you know. And I
think as long as you know the labor market stays
relatively strong, you know, the guidances, you know. I think

(33:36):
margins are well over seventy percent, as you said, revenue
was up, you know.

Speaker 3 (33:41):
I think it is as a concern with with we
in videos.

Speaker 1 (33:44):
And videos probably our fourth largest holding or so as
far as on the individual stock side, is access to
to China. There's been certain talk about Huawei and Bali Baba,
you know, developing their own chips and were when we
were in the car this morning. We're talking about you know,
some some parts of AI will be commoditized, which means

(34:07):
some parts of processing in AI will be commoditized, and
some of those chips will be commoditized.

Speaker 3 (34:13):
And I think.

Speaker 1 (34:16):
In Nvidia produces high end chips, and what could hurt them,
you know, over you know, three four five year period,
is that the need for those high end chips may be.

Speaker 3 (34:25):
Diluted, or if their markets are closed.

Speaker 1 (34:29):
Closed like in China by the Chinese or by the
US government, or if we don't if they don't, aren't,
aren't if you know, in Nvidia doesn't take advantage of
emerging markets like you know, Africa and South America and
by certain uh you know whatever trade restrictions, you know,

(34:50):
China gets into these areas. So I think, you know,
in Nvidia, yeah, I think to grant the license to China,
I think the government is getting fifteen percent of revenue
in China and and that's that's not a done deal yet,
but but it's those are some things that this so yeah,
it's hard, not it's hard. It's certainly not hard to

(35:11):
hold on onto.

Speaker 4 (35:13):
China has over half.

Speaker 2 (35:14):
Of artificial intelligence researchers in the entire world, you know,
And I think that's you know, we talked about Intel
in the first half of this show. Is that's I
guess my you know, biggest fear to you, like the
United States and capitalism in the United States in general,
is you know, we're propping up failing businesses. We're not
just propping up you know. And you could say, oh, it's, uh,

(35:35):
it's for national security, but you know, Intel has proved
over the past decade that it's just an inferior company
to a m D to into UH, to Nvidia. So
you know, if we're going to start forcing people to
buy Intel chips.

Speaker 4 (35:49):
That are inferior, what does that mean? Right?

Speaker 2 (35:53):
And if we start doing that and I think you know,
we we either talk about you know, Sovereign Wealth Fund
that they're over ninety she's a sovereign wealth son. So
you know, if we start buying, uh, the United States
starts buying and taking a stake in in companies that
are just inferior that I think that's that's a problem, right,
you know, for the for the you know, the innovation

(36:16):
that the United States and the United States capitalism has
kind of built their themselves on right. I, you know,
and I think that we've exported that type of mantra
to to other countries, you know.

Speaker 1 (36:28):
I you know, I think the President and people would
counter that that is better than just giving them the
money if if, if we're going to get paid back.
I think the Again, the issue with that is is
that you know, two weeks ago, Tim Cook was at
the White House with to talk to the President and
brought a gift gold gifts with you know, so you

(36:49):
just got to be careful that you know, the and
you know the government does it all the time though.
That's that's the thing that's you know, it's kind of
it's hard to kind of balance uh this with with
with the President Biden's you know support for you know,
you know, wind and solar in the like and and
and also just the Chips Act in general.

Speaker 3 (37:10):
So but but it's it's a fine line that you've
got to that you have to walk between intervention, you
know and just promotion of you know, national security and
AI and domestic domestic production and reshoring.

Speaker 2 (37:26):
And the like.

Speaker 1 (37:26):
So so you know, but anyways, another thing is going
on right now. I think you know, what do we
got left here? We got about another ten minutes or so.

Speaker 3 (37:36):
We did talk a little bit.

Speaker 1 (37:37):
Well, we talked about corinflation at one point nine percent,
the S and P five hundred at an all time high,
the NAS that composite within one percent of it's all
the time high.

Speaker 3 (37:46):
That says the close of Thursday, the Dow closed at
an all time high.

Speaker 1 (37:50):
You also had the Russell two thousand, the second third thousand,
largest American stocks, you know, within spitting distance, you know,
five percent or so off it's all time high. Suit,
You've got a lot going on in the market right
now as we as we do enter a relatively uncertain
period of time with the market. And I think as

(38:11):
you do enter this period of.

Speaker 3 (38:13):
Time, you basically want and I think you know, with
the with the market of thirty some percent, you want
to rebalance your portfolio. I think you want to make
sure you're diversified. I think you want to move away
from cash a little bit. There's record amounts of cash
on the side. I think that's kind of indicator provides
support for the market.

Speaker 1 (38:35):
I think you want to, you know, make sure that uh,
that diversification is across market cap it's across different industries,
you know.

Speaker 3 (38:46):
I think. Yeah. I also think, and this might sound.

Speaker 1 (38:48):
Like I'm just moving on to something else, ping pong
and a little bit as I heard somebody say, ping pong.

Speaker 3 (38:53):
I also like what some calls. I think financials look
good in through here.

Speaker 2 (38:57):
Yeah, me too, especially if you have some deregulation by
the US govern What I thought was interesting, we own
a little bit of SOFI Bank of America. You consider
MasterCard and Visa Morgan, so you know, I think we
are over y Schwab. We are Robin Hood, I guess
would be a financial So I think, yeah, if if,
if we continue to see some deregulation by this administration,

(39:20):
I think, you know, financials.

Speaker 4 (39:22):
Are are in good shape.

Speaker 2 (39:24):
I've found it interesting that Bloomberg came out with an
article this week and it kind of you know, we
were talking about how many ETFs do you want in
your portfolio or funds? But there are now more ETFs
in the United States than there are individual stocks, which
I found really interesting.

Speaker 4 (39:41):
I mean, I guess if you take a step back,
it does make sense.

Speaker 2 (39:44):
Right because you know, you can, you know, creating ETF
for anything like even there's like you know, one point
five times volatility and vidio ETF so you can create
more ets. But I thought it was interesting in that,
you know, even with you know, if if you have
a choice is for your form one case, sometimes like
too many choices can really confuse you and you know,

(40:05):
hamper performance a little bit.

Speaker 3 (40:06):
Right.

Speaker 1 (40:07):
Well, I think the other thing too is that yes
it can you can. You can find an ETF that
serves almost any desire that you might have.

Speaker 3 (40:16):
You know, I think that so you've got to be
careful of that.

Speaker 1 (40:21):
You know, you said probably thirty thirty minutes ago that
you know you want to be correlated to the S
and P five.

Speaker 2 (40:27):
Hundred, you know, because it's market cap weighted, because it's
market right, the better things do better, they rise to
the top of market cap, the market avization goes up.

Speaker 3 (40:36):
Yeah, you know, so I think that makes all the
sense in the world.

Speaker 1 (40:42):
I think, when when when there's you you also when
when there's ETFs that kind of address every little nook
and cranny of the market, they all are selling something
that sounds good. I think you've got to be careful
that you don't confuse what something you know, something something
you know the hook on something you know as like

(41:04):
like cannabis sounds good. Yeah, you know everyone, you know,
we've seen them all over the place. But is there
money in it? What's the regulations to you? You know,
what's the total addressable marketing?

Speaker 2 (41:13):
Like?

Speaker 1 (41:13):
So you know, for us, I think generally speaking, we
stick to broad based ETFs that correlate you to the
underlying index and leave individual stock picking to us. Now,
I also say that the number of stocks is going
down for a variety of reasons. Companies stay stay private now,

(41:34):
fortunity in the private, in the private work, there's less
regulatory costs, Uh, it's easy to raise capital, much easier
to raise capital. You have you have mergers and acquisitions
in there too, so you don't have like the the
ongoing you know, what was the last quarter like. So
there's a lot of different reasons that companies stay private

(41:57):
a lot more than they used to. But so and
there's companies that just never go public. And so I
think you've seen a lot of because of those five
or six issues that I just talked about. You know,
there's less companies now than there were three, four or
five ten years ago. So I think those are some
some some issues. But I did find that interesting as well.
You know, if there's if there's a dollar to be gotten,

(42:21):
you're going to really have an ETF to to.

Speaker 4 (42:24):
Try like a reverse Kramer ETF, you know.

Speaker 3 (42:26):
So yeah, right right now.

Speaker 4 (42:27):
So there's you know, tons of options out there to.

Speaker 3 (42:30):
Try to try to to try to serve service service
that market.

Speaker 1 (42:34):
Let me see here what we got here. Healthcare is
beginning to you know, feel a little better get it.

Speaker 2 (42:43):
You know. I think, you know, I think it's just
got it's gotten bludgeon this year so far between you
and H you know, Regeneron.

Speaker 4 (42:50):
It's actually flat year to date though.

Speaker 2 (42:52):
Who would have thought, you know, I mean the first
three months of the year though, was up eight point
five percent, So you know, went from eight up eight
point five percent to down six percent in two months,
you know, and it's kind of caught its way back.
I think you're starting to see you know, more of
a value trade with like healthcare and biotech as well.
You know, you have Johnson Johnson, you have Regeneron, you
have u n H, which got you know, bludgeon this

(43:14):
year so far. You know, I think UNH is xlvy's
largest holding, and it is U n H is down
what it's up seven percent, uh month to date but
it's down forty to thirty nine point five five unh
for sure. Yeah, but I think, yeah, I think you're
starting to see some value in those sectors.

Speaker 3 (43:36):
I had too.

Speaker 1 (43:37):
And you know, I think if I UH and we
do place money, invest money and invest eight hundred and
eighty million dollars, I think, you know, the market has
broadened out a bit, just as an example, and the again,
the AZEK is you know, less than a half a
percentmits all the time, I with the S and P
five hundred madion all the time, Hide US total marketing

(43:59):
Index in the Dow in all the time, hih yesterday
than there is that not And again.

Speaker 3 (44:03):
We're splitting hairs here. But I do think it's broad dialot.

Speaker 1 (44:05):
But I think as we weighed through the year, I
think investors are looking for different opportunities as we move
more towards US.

Speaker 3 (44:15):
And a lower interest rate environment.

Speaker 1 (44:18):
Most likely there's an eighty five percent chance the FED
is going to cut in September and then another.

Speaker 4 (44:24):
They're going to cut again, So you.

Speaker 1 (44:27):
Know, I think investors are looking more towards UH. They're there,
and as the economy slows down, I think they're more
concerned with valuation so, and we have the long term
or excuse me, long dated bonds stay relatively high, and
interest the short if the short term comes down, that
spread between the long and the short end, you know,

(44:49):
is good for financials. Energy has taken on the chin.
Energy has relatively low, low uh PE ratios, solid fundamentals,
and that has begun to perk up. So I think
we have had a market that is that is getting
some help really from from more than just information technology

(45:10):
or communications services. And I think the question that you know,
that you know, you think about is Okay, where are
we in the whole cycle?

Speaker 3 (45:19):
You know, is this?

Speaker 1 (45:20):
And I think we're kind of we're kind of I
think if you look at different industries, I think if
you look at.

Speaker 3 (45:25):
It AI, you know, I think we're in the relative
early innings.

Speaker 1 (45:28):
I think there's going to be a bubbles, There's going
to be some fits and starts, there's going to be
some areas that tank buy and large and you say
it all the time. I think the larger companies are
well positioned.

Speaker 2 (45:39):
Yeah, and I think you see that rotation. Oh, is
the RSP equal weight at SMP gonna you know, going
to do better?

Speaker 4 (45:45):
Is it going to do better?

Speaker 2 (45:46):
And I think sometimes you know, people are just looking
for a storyline, but then all of a sudden, earnings
come around. You see Meta's earnings, you see Googles, and
you see Microsoft, Like, wow, these companies are still doing
extremely well. Right, so it's really hard to rotate out
of them in mass they're still doing good.

Speaker 3 (46:04):
Yeah, right, you take you take a little bit of
money off the table.

Speaker 1 (46:07):
From time to time, you make sure your portfolio is
diversified to make sure that you have the monies that
you need to do the things you want to do without.

Speaker 4 (46:18):
Uh, don't anything putting your portfolio that will.

Speaker 2 (46:23):
Be detrimental to your portfolio, right, don't have an allocation
that could be detrimental to your portfolio.

Speaker 3 (46:29):
There's a lot going on. It's a fast moving environment,
and you know the uh, it is a fast moving environment.
I think you know some of the some of the
work that President Trump is doing. And this is almost
like the same with the FED.

Speaker 1 (46:42):
We shouldn't be talking about the FED all the time,
and we sure certainly shouldn't be talking about President Trump
all the time, but he certain has inserted himself in
the news. I think his comments of the FED being
like you know and I forget what he said, but
you know, we almost have a majority.

Speaker 3 (46:54):
We're going to get lower rates.

Speaker 1 (46:55):
You know, you better be careful what you wish for
as far as rates go, you know, because if rates,
if short termmates come down too fast, and you could
certainly have an inflationary environment.

Speaker 2 (47:05):
We have rates come down and then inflation starts to
pick up. That's a big problem for the market in
my opinion.

Speaker 4 (47:10):
And you rain that back in. That is stagflation, right,
it is.

Speaker 2 (47:14):
It is, you know.

Speaker 3 (47:14):
I well, if you have people, the economy slows down.
So so so we'll see.

Speaker 1 (47:20):
So we'll see where we go from But you know,
and I get I heard some of the other days say,
you know, look, you know, you get complaining the market
is at an all time I agree with that. Yeah,
and uh, and the economy seems sound and we'll see
where we go from there. Labor Day want to you know,
thank all of those people out there working hard, you know,
working hard.

Speaker 4 (47:39):
And tonight yeah, you know Met's have been playing pretty well,
you know claim.

Speaker 1 (47:46):
Yeah, So we'll see, we'll see how we'll see how
that plays out. And you know, we're hoping for for
us a little rain too. We could use some raining
through here. We haven't had any rain, really been in
a drought, you know, for quite some time. Well rained
a week ago Thursday.

Speaker 2 (48:01):
I got a water my ferns. My friends look amazing.
Your first look amazing.

Speaker 3 (48:04):
My friends look good. Yeah, I like them. I like them.
They Friday too.

Speaker 2 (48:08):
They don't have many fun keep them inside. I was
trying to keep them inside for the winter.

Speaker 3 (48:13):
Yeah, you can pay, you know. I don't see why.
Enough sun. I think they do need some sun. But yeah,
you can keep them. Put a little hook in there
for you. Yeah.

Speaker 1 (48:22):
We're off Monday as the market is closed, so give
us a call any other day but Monday. We're open
eight till four Monday through Thursday eight to two Monday
through Friday, fie forty four. Check us out on the
web Faganasset dot com. Like us on Facebook. This Thursday
is football, so.

Speaker 3 (48:41):
Things are good.

Speaker 1 (48:42):
We have some nice weather ahead of us, so happy
Labor Day to everybody and or take care.

Speaker 3 (48:46):
We'll see you over the weekend, hopefully.