Tariffs, Taxes and the B-B-B with Tom Plumb

Episode Transcript

Speaker 1 (00:03):
Thirteen ten Wi b A and Ask the Experts with
Wisconsin Capital Management, Joined this morning by Tom Plumb with
Wisconsin Capital Management.

Speaker 2 (00:11):
He is a CFA.

Speaker 1 (00:13):
You learn more online their website whiz cap dot com.
That's wi scap dot com.

Speaker 2 (00:19):
Tom. How are you doing this week?

Speaker 3 (00:21):
Oh, I've done good, Seawan. I enjoyed the fourth of
July and back to work.

Speaker 1 (00:26):
Yeah, I got to guess and correct me if I'm wrong,
returning from like a long holiday week.

Speaker 2 (00:31):
For folks that.

Speaker 1 (00:32):
Don't know in the financial world, they're pretty busy days,
aren't they.

Speaker 3 (00:36):
Oh? Yeah, definitely. And this one, of course gets compounded
because we had the quote big beautiful bill signed on Friday,
but also right after the holidays and fourth of July,
we already get into earning season. By the end of
this week, we'll have the major banks report what happened

(00:56):
to them in the second quarter, what's happening to their
interests far, and what their projections are for the rest
of the year. So we really start getting right back
into it right after the holiday.

Speaker 2 (01:10):
So we'll have plenty to talk about her this week
for sure. Tom.

Speaker 1 (01:13):
Before we get to this week's conversation, let's actually just
get a quick review for folks that are are new
to the program. Of course, welcome you all to the show.
Thomas is our second show that we've done together. Let's
talk a little bit about you, a little bit about
your background, and of course a little bit about Wisconsin
Capital Management.

Speaker 3 (01:30):
You bet so. It's Kind Capital Management basically a company
started in the nineteen eighties by myself and a couple partners,
and they have gone their separate ways. We've had a
few different changes over that time, including we started a
balanced mutual fund way back at the end of the

(01:52):
nineteen eighties and then sold that fund to a company
called Dretus, And we started a trust company in two
thousand and we sold that company in twenty nineteen. And
now Nathan and Plumb and I are spending our time
devoted to managing our proprietary neutral firms, managing portfolios for

(02:17):
our high network clients, and doing the research and analysis
that would love doing every day.

Speaker 1 (02:24):
And Tom, as we talk this week, I think sometimes
people will hear, you know, hear all the great benefits
of working with you and working with Nathan. Sometimes think
that that you must be global, or you must be national,
you must be a big outfit You guys are based
right here in southern Wisconsin, right here in Madison, aren't you.

Speaker 3 (02:39):
Oh yeah, we've been here again almost forty years.

Speaker 2 (02:43):
That is amazing.

Speaker 1 (02:44):
We're going to talk, as we talked this morning with
Tom Plumb with Wisconsin Capital Management, We're going to talk
about a little bit about the environment and the investment environment.

Speaker 2 (02:52):
Get those details just a moment.

Speaker 1 (02:54):
I hope you've had a chance though, to check out
the website whizcap dot com. That's wiscap dot com. You
can learn more about Tom. You can learn more about
Wisconsin Capital Management and what makes them so special and
unique again, all on their website, wiz cap dot com.
So before we kind of get into that investment environment,
let's actually talk a little bit about the decision making process,

(03:15):
how it affects your asset allocation, and of course the
big thing is potential returns.

Speaker 3 (03:19):
Tom right, John, we talked last week about how the
pounding rate, the rate of your return, and time are
the wonder of the world. And you know, today I
thought we could talk a little bit about time, because
time can be your friend or it can be your

(03:39):
enemy when you're making investment decisions.

Speaker 1 (03:43):
Let's talk then, is we kind of break down how
that how that time can can work for you and
against you. Let's start off obviously, I think we're as
we anyway. Last week's pro program, we did talk a
little bit about some of the benefits. Time is on
your side if you've got it when it comes to investing.

Speaker 2 (03:57):
Isn't it.

Speaker 3 (03:59):
If you are invest in good companies or good investments
over the long term, that compounding can really create wealth.
But sometimes investment strategies are short term, and sometimes time
can work against you. Certainly time can work against you
if your borrowing money, for example, because that compounding goes

(04:20):
against you. But also the types of investments. Some people
have asked us about day trading or using options, for example,
to quote benefit their returns or to increase their potential returns,
and we'd like to warn them that time in those
situations can really work against you. You need to make

(04:43):
sure the timing of your investments is important, but the
time spent in that investment is also incredibly important, and
you have to match it up with the type of investment.
Here at golf Play, Tom, let's take it.

Speaker 2 (04:58):
Excuse me, I mean interrouble.

Speaker 3 (04:59):
Were going to say, well, so I was going to
talk about options. You know, many years ago, I saw
a company that I thought was going to break out.
It was trading I think around fifteen dollars a share,
and I bought some options to acquire that stock at
the fifteen dollars a share, and within four months it

(05:23):
went up to twenty five dollars. Since that option would
have qu druppled had not happened four months after I
had acquired a three month option us all that return
and all that money period, because in options was one
hundred percent of your money. But that's just one example.

(05:45):
You also have the ability or people are talking about
day trading and how they didn't convert short term beings
into significant assets, and I can tell you that's a
game that very few people went had.

Speaker 1 (06:00):
I talked this morning with Tom Plumb of Wisconsin Capital Management. Tom,
it's just as you mentioned the day trading thing. I remember,
you know, I've always been kind of a computer nerd,
and when the Internet was really getting hot, when it
was still kind of that new thing, I remember a
lot of people I knew started trying some of the
different platforms and things, and it was interesting because you

(06:20):
never hear about losses, and I feel like there's a
lot of the stuff. Oh you heard when they when
they picked a winner. You always were sure to hear
about it, weren't you.

Speaker 3 (06:28):
Oh, that was definitely true, and it was really common.
Of course, you know, just ten years ago or so,
I think, right before the financial crisis, actually about fifteen
years ago, people thought they were going to make a
ton of money about day trading, and you know, then
you lose it all in one day and it's all
of a sudden they find other things.

Speaker 1 (06:48):
You and Tom with that too, as we talk about,
you know, the world we're in these days. Knowledge is
out there, and there's information out there, and you know,
having the right eye in the mind to interpret and
understand that. I think sometimes with every I think with
every profession. Sometimes as lay people, we see things we think,
I've got this figured out.

Speaker 2 (07:09):
There's a lot to this stuff, isn't there.

Speaker 3 (07:10):
Tom, Well, yes, it can be. I mean, you can
cut it down to the significant items that are really important.
But there's a lot of noise out there, and there's
a lot of information, and you have to be able
to call through that and make sure that you have
specific knowledge, not general knowledge. So you know, when you

(07:31):
talk about, for example, of making any type of investment,
one of the key things is what do you really
know about that investment? How does it act in different
types of investment climates which as we know, can change
day to day. And do you really have something that
tells you that you have an edage you're going to

(07:53):
be able to uncover something that's valuable that nobody else
is uncovered. Very difficult today with all the information that's
at people's fingerstips, and especially with this fast computers that
allow some professional people to act very very quickly and

(08:14):
execute their transactions.

Speaker 1 (08:16):
Talking this morning with Tom Plumb, He is a CFA
with Wisconsin Capital Management. You can learn more about Tom
as well as Wisconsin Capital Management all on their website
wizcap dot com. That's wyscap dot com, wiz cap dot
com and Tom. The word expectations is an important one
when it comes to this stuff. Let's talk about expectations

(08:37):
and a lot of times kind of cooked in baked
into those prices, aren't they?

Speaker 3 (08:41):
Oh definitely should you know when you think about it.
When people ask me often how come this good news
and the stock market went down? Or are there some
bad news out there and the stock market went up?
And it's really based on the rational expectations they were
going into that take. And sometimes you'll see an event like,

(09:04):
for example, Friday, the tense clarification, and it may not
be a catalyst for the market to immediately go up.
It may already be baked in, and certainly with some
of the individual companies, it may already be baked in.
So we'll see. But what we do know is that

(09:27):
expectations are key very full in the short run of
any stock or any investment.

Speaker 1 (09:32):
That you mean is it's sometimes difficult for folks to
identify the difference between a fad or like a true
true opportunity to something that's hot, something that's trendy. Is
that sometimes hard for folks to identify.

Speaker 3 (09:46):
I think it's Sean. It's very hard, and it can
sometimes be It can take a lot longer for a
fad to faith than you will think, and sometimes it
takes a lot longer for a true trend to develop
and get legs. So I think it's very important to
try to understand what the variables are that have made

(10:10):
this investment go up or down, or that you're getting
in the crafts, for example, and how much of it
is already baked into investment prices that are out there.
We like to think that you have to go back
to the fundamentals of why something is happening and see
if that holds water for what will be happening in

(10:34):
the next six months, next year.

Speaker 1 (10:36):
Tom Is it sometimes hard for it, and obviously as
a professional, there's there for you. You know, you're viewing
this information through a different eye. I think we all
have biases, we all have beliefs, we all tend to
maybe overestimate our own personal abilities. And we were talking
earlier about about folks that try the day trading stuff
and kind of what went on with them. I think

(10:57):
about fads as being one of those areas where sometimes
I think is as just if we're trying to do
this on our own, we tend to be quite susceptible
of those things because again going back to hearing from
our friends that I, you know this this stock has
been hot, or this this has been this opportunity has
been huge for me. That we're not always good with
our head, we're good with our heart, and of course

(11:18):
a lot of us financial these motivations, we don't always
see that kind of the the underlying fundamentals, and we
talk about you know what your role is. That's really
what you're watching there isn't it is paying attention to
those fundamentals.

Speaker 3 (11:31):
Yes, Sean, you're headed right on the bend. When you
think about anytime in the short line, the price is
determined by whether or not there's more demand than there
is supply. So stops can go up or down, bonds
can go up or down, any type of real estates
go up or down. It's all based on at the margin,

(11:54):
whether or not there's more demand than there's supply at
those for that particular type of thing. Us. So when
you start to see the demand pick up, then you
really want to gauge whether or not there's something that
six months from now there still would have a fundamental
reason for that demand to be stronger than the supply.

(12:17):
And that can come when you have companies where you
can see some significant trends that are feeding into each
other and then making it happen. We talked last week
about data and how data is being used. Certainly the
last six months nine months, people talked a lot about
artificial intelligence, but that's only the last leg that we've

(12:40):
been talking about. As we've seen the need for data
and processing time speeds continue to grow and grow and grow,
and we'll see that trend will continue. Now, the thing
that you want to watch is to see whether or
not just over supply of data centers, for example, because

(13:03):
there at some stage there's everything that's grows dramatically like
this has. If you get a little bit of a
disruption and supplying demand as people start anticipating growth rates
faster than what they actually can be sustainable.

Speaker 1 (13:20):
With, it fascinating stuff. As always, we talked this morning
with Tom Plumb. He is a chartered financial analyst with,
of course, Wisconsin Capital Management. You can learn more about Tom.
You can learn more about Wisconsin Capital Management all on
their website. It's a fantastic website. Learn a little bit
about their mission, a little bit about the team as well,
and how they can help you. Just head on over
to that website whizcap dot com. That's wiscap dot com.

(13:44):
Of course, get to know a little bit more about
Tom and Nathan everyone at Wisconsin Capital Management on the website.
I started this week's program talking about what's going on
this past week. It's been a busy one. We're going
to break down some of those numbers and some of
those pretty significant things that happened this past week with
We will do that next as ask the Experts with
Wisconsin Capital Management.

Speaker 2 (14:03):
Continues right here on thirteen ten wui b.

Speaker 4 (14:06):
A thirteen ten wui b A and asked the Experts
Hanging out this morning with Tom Plumb with Wisconsin Capital Management.

Speaker 1 (14:18):
Tom is a chartered financial analyst. You can learn more
about what a CFA is a little bit more also
about Wisconsin Capital Management on their website whizcap dot com.
That's wiscap dot com and Tom. We started this conversation
off saying a lot can happen in the week, and
of course with the holiday and some big news this
past week, a lot has gone on. So let's take

(14:40):
a look at kind of what's all happened specific We'll
start out with talking tax and tax structure. What's going
on there?

Speaker 3 (14:46):
Tom Well Friday joined forth. President Trump signed the Tax
Act that extended the lower tax rates that the twenty
seventeen Act, but also added some other changes and modified
or changed some of the text provisions that have been

(15:08):
in the twenty twenty two AD. So right now, what
we're starting to see is a lot of dissection, because,
as people may recall, was about a nine hundred page bill.
It was voted on very late that night, and there's
continuous debate about all the implications that we're going to
see there, and some of those implications, you know, are

(15:30):
going to be pretty severe for different sectors of economy,
and some of them should be positive. But disseminating which
ones and at what time these things will actually affect you,
it's going to be quite a challenge. The text structure now,
by being set for the next few years, does give

(15:52):
certain amount of planning capability for every business and individuals
on some of their plans, some major purchases. Certainly the
accelerated depreciation on certain types of capital investment are going
to fit in to a lot of the planning that

(16:12):
companies do. But we still have an incredible amount of
uncertainty about the tariff policy, and if you don't know
what your supply chain is going to look like and
what the costs are going to be, that has become
also uncertainty and trying to make some of these big
capital investments. So right now we'll see a tug of

(16:32):
war as we go through some of the positive provisions
as how to affect people. And then again some of
the negative provisions that are going to affect certain segments
have done. Many people are concerned about what might happen,
for example, to our rural health care system because of

(16:52):
some of the cutbacks that we've seen.

Speaker 1 (16:56):
Is talking this morning with Tom Plumb of Wisconsin Capital Management,
getting a break down of some of the news that's
happened in this past week. Of course, the first word
is the big in that in that tax bill, and
of course a lot to get into kind of getting
a breakdown of where things stand right now. And of
course Tom, you mentioned the tariffs, and as we talk
with it's today Tuesday the eighth, you never know what

(17:18):
the what the next next few hours may very well
bring and whether it's strategic or otherwise. I know that
does that does cause folks to to kind of their
ears to perk up and kind of q in on
some of this stuff. I also know some of the
areas things like things like as somebody who drives an
EV vehicle, there've been some there was some questions for
a while there about where that's going. We've got a

(17:40):
little bit more clarity as far as tax incentives for them, haven't.

Speaker 5 (17:43):
We yeah, those text and send them so start to
phase out for certain types of investments, but then they're
going to be offset by the ten thousand dollars credit
for buying something made in America.

Speaker 3 (17:57):
So how that'll all, we're not quite sure. But what
we do think is going to happen is that people
will start to understand these rules, start to make some plans,
and then those plans become on the reality that we'll
all start to see in the economy going for the
next few years.

Speaker 1 (18:18):
Where then for investors, where's their attention going to be
focused in these in these next few weeks and months, Tom.

Speaker 3 (18:25):
Well John the first quarter before the tariffs UH were
announced in April. You know, last year, in the January
earning season, artificial intelligence was mentioned. There's a lot of
Google searches that show you when companies are making these presentations,
how many times do they use certain works. Artificial intelligence

(18:48):
was used dramatically in the December quarter. Tariffs were used
as a significant issue to talk about by all these
nature companies in the first order. The third order now,
which is going to be the July Arnies reports, It's
going to be very interesting to see how some of

(19:08):
these things actually have paid played out because tariffs were
a major concern with consumer products companies and the companies
that are manufacturing plus here in the United States, including
the automobile industry. Now how they've adjusted, how the companies
have adjusted what they're actually seeing and buying patterns that

(19:32):
become pretty significant. We just saw today that a company
called Consolation Brands, which sells Modello and Corona beer and
other things, said that the lower income, especially the Latin Americans,
we're not having as many gatherings. For example, for the

(19:53):
year over year, their beer sales were actually down for
the first time in probably ten years.

Speaker 1 (19:59):
That is fair and obviously as we talk about these
things and all the different implications, it's it's very fascinating
to follow this stuff and it's a great insight as well.
As we talked this morning with Tom Plumb of Wisconsin
Capital Management. If you can learn more about Tom and
the team, I mentioned the website, I hope you get
a chance to head on over there, wiz cap dot com.
That's wis cap dot com. Of course, things are developing

(20:20):
throughout the day. It's always good to keep in touch. Again,
you can learn more online the website Whizcap dot com
speak of getting to know Tom. Something I learned about you, Tom,
you are a bit of a cigar aficionado.

Speaker 2 (20:30):
Am I right on that I do.

Speaker 3 (20:33):
Enjoy a good cigar, and I was able to have
a couple of them over this weekend. I find my
fire pit by the flake Cottach, and I would say
that I enjoy him. I don't think I'm somebody who
smokes one a day, but I do smoke occasionally, and
I really do enjoy it.

Speaker 1 (20:52):
That I say, quality over quantity with those rights for sure,
Tom Plum of Wisconsin Capital Management. Again that website night,
whizcap dot com. It's w I s c a p
dot com. Tom, it's always great talking with you. Thanks
for taking the time this morning. We'll do it all
again real soon. All right, thank you, and again the
website whizcap dot com. That's w I s c a

(21:13):
p dot com. News comes your way next right here
on thirteen ten w I B A