December 5, 2025 • 39 mins
Chuck Zodda and Mike Armstrong discuss Meta changing course and now targeting areas dominated by Apple. Do we have another ridiculous name for the current state of the economy? Americans’ affordability crisis isn’t tariffs’ fault — it’s something much, much deeper. Should Walmart really be trading like a tech company? Paul LaMonica (Barron's) joins the show to chat about Waste Management.
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Episode Transcript
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Speaker 1 (00:00):
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(00:20):
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(00:43):
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(01:06):
and Mike armstrawa.
Speaker 2 (01:09):
Chuck Mike Tucker with you here on a Friday, and
as we sit here right now, all three major ingencies
in the green. The S and P's up twenty three points,
Dow Jones is up one hundred and forty six points,
and ASDA can Posite up eighty eight points, So we
got some green on the board. Tenure. US Treasury is
up one point nine basis points to four point one
(01:29):
two seven percent. Dollar index flat today at ninety eight
point nine to five five. Gold is up twenty eight
to twenty an ounce to forty two to seventy one
and twenty cents. And we've got crude oil up sixty
cents a barrel on West Text Intermediate to sixty dollars
and twenty seven cents UH. When we take a look
at gas prices though continuing to slide, and that should
(01:51):
be expected for the next five to seven days, even
with crude oil tacking up just a little bit. Main
reason refinery capacity has come back online and the last
week or so in the US, and that is getting
cheaper gas out to people. So we're at two ninety
seven and eight tenths of ascent right now, compared to
a year ago. We're at three h three and two cents,
so down about five cents a couple percentage points since
(02:15):
that time. This morning, two major pieces of news. First one,
well it's it's a semi major piece news. We got
September PCE price index data. Yes, it's two months delayed,
but hey, who you know who's counting. Will take what
we can get from a data perspective. Came in as expected.
Point two percent on the headline, I'm sorry in the court.
(02:37):
Point three percent month over month on the headline. No
major surprises. There. Also big news overnight, Netflix and Warner
Brothers Discovery trying to get together in a seventy two
billion dollar acquisition of Warner Brothers by Netflix that obviously
is pending regulatory approval and a whole bunch of other things,
but would close in twelve to eighteen months if approved
(03:01):
at this point. So those have been some of the
major stories that we have been covering. Mike Pece from Barons,
Meta opens a new frontier in AI race. Why it's
a warning for Apple?
Speaker 3 (03:15):
What's the warning, Michael, I'm not buying it. So both
Apple and Meta have been working on wearables. Apple kind
of moved away from theirs, they moved along from the
wearable glasses. I think they might revisit it at some point.
But Meta has been pushing it with their you know,
their their product that who's been advertising. Is it like
Channing Tatum or something like that has been advertising what
(03:38):
their ray ban glasses?
Speaker 2 (03:40):
Yeah.
Speaker 4 (03:40):
I think you're right, Mike.
Speaker 3 (03:41):
I've seen the ads for them. I don't think anybody's
buying them, but they seem to be.
Speaker 2 (03:47):
Pushing normally like Channing Tatum.
Speaker 3 (03:50):
Second, he affiliates with Meta, He's done in your mind.
Speaker 4 (03:53):
Chris Pratt was.
Speaker 2 (03:54):
In one of them. He's not. He's not done, but
just you know, like again like he's not, you know again,
like I don't know a guy. Sure, I'm a Channing
Tatum fan. I think he's the Jump Street Movies, by
the way, better than people would have expected going in
with that ip.
Speaker 3 (04:10):
So they are trying to jump in there and push
on that front. I really don't think that it's any
threat to Apple. Quite honestly, I just don't see it.
Investors did applaud Meta a little bit when they announced
just this week that they were abandoning some of their
investment in the metaverse, which begs the question are they
going to have to rename themselves again? Which would be
(04:33):
just hilarious because what are they going to rename themselves?
Speaker 2 (04:36):
Real MEDAI AI verse? I don't know.
Speaker 3 (04:40):
I don't know which direction they go with the naming
piece of it, but they're clearly trying to push more
onto the artificial intelligence side, and they want to create
AI powered wearables, and I'm sure Apple's thinking about that too,
But I don't know if I had to bet on
one company's overall success by being late to the game
(05:03):
on AI. Not that Apple's further late to the game
than Meta is, but I have to bet on Apple
on this one.
Speaker 2 (05:11):
Yeah. I mean, here, here's the thing about Meta. Meta
is really good at building social networks. They know what
makes them tick obviously. Look they built Facebook and then
people forget Like when they acquired Instagram. Instagram was a
tiny little gnat of a company. I mean, there's a
reason why Meta got it for what was it a
(05:32):
billion dollars? I think was the sale. I don't remember
the dollar map, but it was. I think it was
a billion dollars. It was It was a tiny little
company and Meta like figured out exactly made that platform
tick and they want billion. Yeah, billion dollars.
Speaker 3 (05:46):
They grew it exponentially, so really still because they really
pushed the metaverse as the next frontier for social media.
Speaker 2 (05:54):
Right, but it's not a social network. It was attempted
to be.
Speaker 3 (05:58):
Like all of their advertising, remember all the advertising for
their garbage metaverse was, hey, you can go metaverse fishing
with your father who lives across the world.
Speaker 2 (06:08):
And they tried to make it that. But it's not.
That's the thing. It's it's not. It's a crappy virtual
reality world that no one likes, and like that's the deal.
I'm sorry, Mark, but that's the deal. No one likes
your metaverse, like you just if you spent eighty billion
dollars trying to make it happen, and it's not happening.
(06:30):
It's never going to it only seventy seven, Chuck, I
was actually, no, those are the losses. So you're right.
Speaker 3 (06:36):
There was some revenue attached to it, so the spending
was probably well above that.
Speaker 2 (06:40):
So like, it's just not going to happen. And this
is the piece that I've come back to with meta
over and over. I don't think they have any understanding
of what people actually want outside of social media addiction.
They've tried to make devices. Remember they had the cameras
that they were making for your home, the ones where
(07:02):
you could like face It was like whatever the meta
version of face time is.
Speaker 4 (07:05):
The Amazon Echo version for Meta.
Speaker 2 (07:08):
Whatever those are. No one wanted them, No, no one
had any desire for that. Like they've tried to make
all kinds of things they've had. They bought up Oculus,
you remember that, Like that was part of the whole
Meta even before they got into trying to make it
like the metaverse. Remember, they were trying to sell it
as like oh, you can do like video games. No
one wanted the stuff. So I just I look at
(07:32):
Meta and I admit, like, they're really good at getting
you addicted to social media. I'm not sure that they've
proven they can do anything else. Yeah, none of it. Well,
is there is there any other product that they've developed
where you're like, yes, this is like this is the
one they No. I mean, they've acquired a few.
Speaker 3 (07:55):
They do own what I would describe as kind of
the premiere encrypted messaging.
Speaker 2 (08:00):
Service across the globe, WhatsApp yep. But again that was
another acquisition. I do think they make any money from it,
doubt it.
Speaker 3 (08:10):
Maybe you could say they've had some success on Facebook Marketplace,
but that's more of a tie in. So I am
very suspicious that they're going to have some giant success
on rolling out a new piece of hardware powered by
artificial intelligence. Instead, I think what they'll continue to do
is allow all sorts of AI development tools to spread
(08:32):
massive misinformation on their social media platforms. So that will
certainly continue for anybody that uses Facebook. You can probably
attest that like one in three videos is very clearly
generated by garbage AI.
Speaker 2 (08:48):
But this other stuff, I don't know. It looks too
pie in This guy for me. Do you ever watch
The Dark Knight? Yeah? Yeah, so Morgan Freeman at one point,
the guy who's trying to blackmail Bruce Wayne. Yeah, he
goes to him. He goes, so, let me get this straight.
You know, you think that your boss is this you know,
billionaire and mass vigilanthews, you know, beating criminals up all night,
(09:10):
and your plan is to blackmail them. He goes, good luck.
It's kind of where I'm at with Meta on this.
It's like, so you're saying that your competitor is the
premier designer, producer, marketer, and seller of hardware devices in
the world, who makes more money than anyone else in
(09:34):
businesses that no one else can make money in. And
your plan is to compete with them? Good luck, good luck.
That's that's kind of where we are. Like, it's that's
just not their bag. They can continue to do what
they want. I get why they want to do this
because Meta is all salty, rightly so, by the way,
(09:56):
it's not like Apple's like some angel out there. Apple
Chain the rules regarding data sharing on Apple products five
or six years ago, and it completely disrupted how Meta
had to operate and run their business. Meda doesn't want
to have that happen again, So they want to own
the hardware in order to be able to set the
rules that are beneficial to them. I get it. I
(10:21):
just I don't think they're good at that, and I
think they're wasting investors' money trying to make it work,
you know. And and look, here's what I think Meta
could do if they really wanted to the problem with
like and why I say they're not good at it.
They just spent eighty billion dollars trying to make metal work,
(10:41):
and it doesn't instead of trying to dig one well,
you know, to the center of the earth, just pop
four hundred different ones out there and see what comes up.
It's what Amazon does, it's what Google does, It's not
really what Apple does. But look, if you if you're
not sure how you going to make it work, don't
put all your eggs in that basket, right and we'll
(11:03):
see if I can come up with one more, you know,
metaphor to you know, bring in people who aren't you
happy with the ones I've done so far. Great, make
sure they're all Batman related. I mean, yeah, look when
you can be yourself, but at all other times be Batman. Yeah,
let's take a quick break. When we return, we got trivia.
Speaker 1 (11:24):
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(11:44):
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Speaker 4 (11:55):
This segment of the Financial Exchange is brought to you
by the US Virgin Islands to Armina Tourism. There's still
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Time for trivia here in the Financial Exchange, And in
(12:40):
case you missed it, Netflix has agreed to purchase Warner
Brothers film and streaming assets for seventy two billion dollars.
Netflix is the largest streaming service with over three hundred
million subscribers. So our trivia question today is simply what
year was Netflix launch? Once again, what year was Netflix
(13:03):
launched Uh be the fifth person today to text us
at six one seven three six two thirteen eighty five
with the correct answer along with the keyword trivia, and
you'll win a Financial Exchange Show T shirt.
Speaker 2 (13:18):
Once again, the.
Speaker 4 (13:19):
Fifth correct response to textus to the number six one
seven three six two thirteen eighty five along with the
keyword trivia will win that T shirt. See complete contest
rules at Financial Exchange Show dot com.
Speaker 2 (13:33):
From Barons Michael, the inequality story isn't what you've heard
meet the Pacman economy guys, thank you.
Speaker 3 (13:53):
This has become ooh with Cherry the dumbest financial debate
of twenty twenty five.
Speaker 2 (14:01):
It has. It's become the dumbest financial debate of tick.
Have you got the ghost power up? Uh? Okay, yeah,
that's the one. Wow.
Speaker 3 (14:09):
So I enjoy reliving the pac Man days as much
as anybody else. Some of my favorite bars of those
that have the flat the pac Man bar that you
can sit at and play. This is just the silliest
debate that we continue to have. Is it k shaped?
Is it more shaped like a pac Man? What about
(14:29):
misspac Man?
Speaker 2 (14:31):
Like? What what are we talking about here?
Speaker 3 (14:34):
Chuck?
Speaker 2 (14:34):
What is the purpose of this debate. I think the
economy is shaped like a toilet in the all the
poop just goes downhill, all right, So to describe what
we're talking about.
Speaker 3 (14:47):
The issue that the author takes with the K shaped
economy is that the the lines are too severely pointing
downward on the bottom of the K. So they think
it needs to be a little bit more. I can't
do it. I can't do and they think it looks
more like a pac Man? Does this not to assemble
(15:08):
some of the dumb debates you remember having, like with
your friends when you had no responsibilities, sitting on a
couch at like twenty two years old, not about I
wasn't discussing the shape of the recovery of the economy.
But this is such a dumb debate.
Speaker 2 (15:25):
Yeah, these are the conversations that you had at two
am after having a couple two men, and you're like, hey,
does that does that cloud look like miss pac Man?
A real pac Man? Like no, Like, this is not
something that matters the shape of the h Thank you,
(15:46):
thank you. Let's let's put this one to bed here,
and I guess we'll move on to this piece from
market one. What was that one Chappelle, Sa, Mike, I'm
gonna workshop this over the weekend just so that you know,
(16:08):
we can do it on Monday, and we'll give Tucker
a little time to get some new stuff ready. But
I'm ready to christen the Frogger economy. Okay, I'm gonna
work shop it over the weekend. Yeah. Let me know.
It's an interesting shape. Okay, it's not the shape, it's
the movement. Ah.
Speaker 4 (16:27):
You can also do Crossy Road, which is a complete
ripoff of Froger, it.
Speaker 2 (16:31):
Is, which is why we're gonna start with the original.
You know. But remember in Frogger sometimes you just take
one step forward, but then you gotta take two steps back,
do you, Americans? Affordability crisis isn't Terrrif's fault. It's something
much much deeper. Yeah, of course it is. We didn't
just suddenly like wake up this year and be like, hey,
(16:51):
things are unaffordable.
Speaker 3 (16:54):
Inflation's a problem in twenty twenty five.
Speaker 2 (16:56):
That's new. Thanks. I appreciate knowing that we've gotten here through. Okay,
So actually, there there was a really interesting paper that
I read a couple of days ago, and and it
gets at this topic as to like kind of how
we got here, and I think it does so in
(17:17):
a way that is more informative than than trying to
figure out like is this a pac manner a case
shaped economy, because that's just kind of useless and his
fault it is, yes, because like it's it's kind of
it kind of gets to the idea that, look, this
isn't necessarily anyone's fault. It's everyone making rational decisions based
(17:37):
on what the economy has like turned into over time.
And and pretty much what it argues that this paper
you divide the economy into like who receives a certain
share of economic benefits And basically what we've seen is
that the labor share of you know, GDP has been
(18:01):
declining over time, and the paper asks the question, look,
why is this? You know that it's happened. And basically
what you get to is, as societies get more complicated,
you have to spend more of your time fixing the
stuff that makes it work. Like, as an example, if
you were to go back to like seventeen sixty three
(18:22):
New England, you didn't have to worry about maintaining power
lines because there weren't any. You didn't have to worry
about maintaining sewers there weren't any today. You have to
spend a lot of time and money doing those things,
and so it's a much more capital intensive society than
it used to be. And so as a result of
(18:42):
all of the additional stuff that we have to maintain capital,
then said, look, in order for us to get the
return that we need, what's the you know, what are
the ways that we can manage this? And immediately you
go to, let's figure out ways that we can have
less labor, because labor is the biggest input for any business,
and so that's how you get through you know, productivity
increases and things like that. Businesses maxed out those easy
(19:05):
to find the levers, you know, kind of over the
course of the twentieth century what they do, Hey, let's
move the labor somewhere elsewhere it's cheaper. And in doing so,
like so you can see, these are like rational decisions
for why this happened that ended up leading us to
this place where there's now this you know, kind of
big problem both from an inequality and an affordability standpoint.
(19:28):
We discussed more and we come back, but we will
do the trivia answer, and we've got wall Street Watch.
Speaker 1 (19:33):
Next, bringing the latest financial news straight to your radio.
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street Watch. A complete
(19:54):
look at what's moving market so far today right here
on the Financial Exchange Radio Network.
Speaker 4 (20:01):
Markets trading modestly hire at the moment as traders react
to a core PCE index for the month of September
that came in line with estimates Outside of the inflation reading.
The big news comes from the media world, where Netflix
has agreed to buy Warner Brothers. Right now, the Dow
is up about two tents of a percent or ninety
one points higher. SMP five hundred is up nearly two
(20:23):
tenths of a percent, Nasdaq up just over a tenth
of a percent higher, RUSS two thousand is down about
two tenths of one percent, Tenure treasure Field is up
two basis points at four point one three five percent,
and crude oil up seven tenths of one percent, trading
right around sixty dollars barrel. Netflix struck a seventy two
billion dollars deal for Warner Brothers, beating out bids from
(20:46):
Comcast in paramount. With the deal, Netflix will add Warner's
TV and movie libraries, as well as HBO and HBO
Max shows. The deal is expected to close in twelve
to eighteen months, pending regulatory approval. Netflix has been volatile today.
The stock is now down almost three percent, while Warner
Brothers shares are up three percent. Meanwhile, digital document signing
(21:09):
company DocuSign lifted its annual sales outlook after quarterly results
beat expectations driven by subscription growth. However, the stock is
dropping six percent as some analysts believe the company's guidance
may be conservative. Elsewhere, shares in Victoria's Secret are rallying
eleven percent after the lingerie and apparel company posted a
narrower than expected quarterly loss and a nine percent increase
(21:32):
in net sales. The company also raised its full year outlook,
saying it's well positioned for a successful holiday season, and
Ulti Beauty raised its full year sales outlooks sending shares
in the personal care retailer up by fourteen percent. I'm
Tucker Silva and that is Wall Street Watch. And in
the previous segment, we asked you the trivia question, what
(21:53):
year was Netflix launched?
Speaker 2 (21:55):
Launched?
Speaker 4 (21:55):
That would be nineteen ninety seven. David from Reading Masses
our winner today taking home a Financial Exchange Show t shirt.
Congrats to David, and we play trivia every day here
on the Financial Exchange. See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:11):
Before we go further, I'd like to talk about the Moon. Sure,
are we going to it? Maybe? I don't know. Did
you know that? In nineteen sixty seven, one hundred and
seventeen countries signed onto the Outer Space Treaty. Wait, we're
literally talking about the Moon. I thought it was like
(22:34):
to the moon type? No, what did you think I
was gonna Yeah, okay, No, I did not know that.
Please go on, Tucker. Did you know about this?
Speaker 4 (22:41):
No?
Speaker 2 (22:41):
One, I don't care. So the Outer Space Treaty, this
was back in the sixties, when you know, we thought,
you know that we were actually gonna be like living
on the Moon in the next you know, ten years
or whatever. But basically the provisions in this the use
of any of outer space has to be carried out
for the benefit and interest of all countries in the
province of mankind. Outer Space has to be free for
(23:03):
the exploration and use for all space all states. Outer
Space is not subject to national appropriation by claim of sovereignty,
by means or use of occupation, or any other means.
And States will not place nuclear weapons or other weapons
of mass destruction orbit or on celestial bodies, or stationed
them in outer space in any manner. The Moon shall
(23:24):
be used exclusively for peaceful purposes. No weapons, testing, military maneuvers,
establishing bases, installations of fortifications. H And I had no
idea this actually existed. Good. I was. I was listening
to a podcast about the Moon economy. Uh huh, and
this came up as as part of it, and I
was like, oh, I didn't know that, like that was
(23:46):
a thing. But basically what the podcast was talking about is, yes,
like no nation can technically claim part of the Moon,
but the Outer Space Treaty makes no reference to activities
such as mining and things like that on the Moon,
and so you might be able to own and operate,
you know, things that remove minerals from the Moon. To
(24:08):
also the question of like, let's say that you were
trying to own the Moon, Who's going to enforce it
if you like decide to do that. The Space Police? Yeah,
you know, like what's what's what's exactly the jurisdiction there
like how many? Uh? Like, what who's going to come
after you? If you decide, Yeah, we own the moon.
(24:32):
It's the next frontier, Chuck, I thought it was interesting. Uh,
should Walmart really be trading like a tech company.
Speaker 3 (24:37):
Mike, based on their sales growth? Maybe talk to me.
So it is a very expensive company. What's that pee
on this thing? Over thirty five?
Speaker 2 (24:46):
Now?
Speaker 3 (24:46):
I think it is. It is a very very expensive company.
Their same story.
Speaker 2 (24:51):
Forty times forty times earnings and forty three times forward earnings.
Speaker 3 (24:55):
So to start, I don't know that tech companies should
be trading at the levels that they they are, So
I'm not I'm not sure that you know this is
a reasonable comparison. But they are attracting new customers, crushing
their competition, and generally expanding their business at a pretty
(25:15):
rapid pace. So I think the whole market has some
potential reckoning, giving where price to earnings ratios are across
the whole thing. But I'm not sure I would exclude
Walmart from the party for any reason.
Speaker 2 (25:28):
They're growing revenue five percent year over year, They're growing
earnings almost seven percent year over year. This is over
the last five years, so like this is you know,
not just a short time thing that you're seeing. If
we look in the last five years, Walmart stock is
up one hundred and forty eight percent. It's pretty wild, Okay.
Now that is you know, from the end of twenty twenty,
(25:49):
where like things were still kind of you know, dodgy
from the pandemic and everything. But you know, if if
you look at this, you can certainly see I mean, look,
here's the thing. You take a look at it from
a you know, I prefer you know, forward pe ratios,
you will get where it stands right now. Again, it's
(26:10):
a company that you know, three four years ago even
was trading you know, twenty times forward earnings. Now it's
forty three. There's a lot of margin expansion that's happening there. Yeah,
there's been earnings growth, but it's it's been margin expansion,
not margin a multiple expansion, not margin expansion.
Speaker 3 (26:25):
Margin Stentich would be, they're making a whole lot more profit,
They're not making twice as much profit.
Speaker 2 (26:29):
No, So there's been you know, a ton of multiple
expansion that that's been going on there. The question that
I ask with Walmart is the same one that I
ask of Apple or Amazon or any of these other
companies like it. And this is like purely just a
theoretical thing. If you own Walmart today, what would ever
be the reason that you sell it? Like if you
(26:52):
make the decision to buy Walmart now, Like, are they
gonna go out of business in your lifetime? Yes, they do.
There's bigger problems with the American economy than your portfolio.
Speaker 3 (27:05):
Yeah, so I'm not worried about them going out of business.
But could you have said the same thing about Target
a decade ago? Right, No, you can make big missteps
as one of these businesses.
Speaker 2 (27:14):
Not Target's different. Target's not Walmart. No, like now where
Walmart Walmart today is as close to you a utility
as you can get in retail. They are pretty necessary. Yeah,
you know, like Walmart goes out of business, you got
two and a half million people unemployed.
Speaker 3 (27:32):
I don't know, Chuck, I am not sure that there's
a huge difference between this company today and Sears thirty
years ago.
Speaker 2 (27:40):
You don't see the level of entrenchment just being different, man,
I don't know. I mean, look, I I was a
wee little lad back when you know, Sears was dominant.
Maybe maybe it is the same, but it sure feels
like there's a whole different level of you know, combination
of things like a like regulatory capture. The basically you know,
(28:00):
keeps like we have the question like is Walmart? We
asked the question about a lot of these big companies,
like are they too big to fail? Didn't we kind
of get to a yes on Walmart?
Speaker 3 (28:11):
I'm not there? Interesting, Yeah, I'm not there. I mean,
if they weren't out of business tomorrow, yeah, but I
don't see any reason they couldn't die a slow death
of the next two decades, you think even two decades,
Like I I feel like it would take one hundred
and forty six years for it to happen to Walmart.
Speaker 2 (28:30):
But I don't know. It's uh again, like for for
something bad to happen to Walmart means that something good
has to be happening to a whole bunch of other retailers,
And I don't know how those two things can happen
at the same time. Yeah, just given how important Walmart
is to the US economy, I'm not saying this is good.
I'm just saying that it is so seven hundred and
(28:51):
three billion dollars in goods in the last twelve months.
That's two billion dollars a day that Walmart does in revenue.
It's insane. Let's take a quick break. When we come back.
Paul Omnica joins us to return us to sanity right
after this.
Speaker 1 (29:05):
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Speaker 2 (30:19):
As promised, we are now joined by the one and
only Paul Hamonica here to talk a little bit about
Waste Management. Paul, how you doing today?
Speaker 6 (30:29):
I'm good? Thanks?
Speaker 2 (30:30):
How you doing doing well here? So when we take
a look at Waste Management, had a nice little run
over the last month or so here, and you know,
obviously long term company has been fantastic, but you're to
date stock's only up about seven percent. What's been challenging
them for them this year and what may have changed
in the last month or so.
Speaker 6 (30:50):
Yeah, it's a great question, man. I think that there were,
you know, some concerns obviously about the broader economy, and
you know, just whether or not, you know, investors really
wanted to be in a stodgier, more defensive oriented name
at a time where there's still all this optimism about
(31:12):
AI and enthusiasm about tech. But with some of the
concerns about an AI bubble really picking up steam in November,
you started to see some more defensive names like Waste Management.
Their peers Republic Services and Waste Connections also did well,
and I think investors recognized that, you know, this is
(31:32):
a relatively stable business because of government local government contracts,
and you know, they are adding some growth with acquisitions.
Stereo Cycle as a company that they bought last year
that really helped them with medical waste, which you know,
(31:52):
as we're all getting older and getting more drugs at home,
there's a lot more you know, injectable pens, especially with
GLP ones, and you know, lots of pills that we're
all taking. So medical waste is a big issue and
I think that's something that Waste Management is hoping to
capitalize on as well.
Speaker 2 (32:12):
You mentioned it's kind of, you know, a boring, stodgy company.
It still is one that's worth almost one hundred billion dollars,
So is it We're still looking at this in terms of, hey,
this is always a service that's going to be needed,
and yes, it's not necessarily knocking the cover off the
ball in twenty twenty five. But unlike you know, other
(32:33):
types of businesses that we might have questions about, hey,
you know, what will they look like in ten or
fifteen years. I think we have a pretty good idea
of what the trash business is going to look like
in ten or fifteen years, which is pretty similar to today.
Is that fair?
Speaker 6 (32:45):
Yeah, I think that is fair, and that is one
of the reasons why, you know, analysts have that kind
of steady eight to ten percent ish sort of earnings
growth expectations over the next few years, which you know,
again that's not in video or meta type levels, but
it's stable.
Speaker 2 (33:03):
It's steady.
Speaker 6 (33:04):
There's a small dividend that the company pays, you know,
so you are getting a dependable business. And that's why
they taroted Waste Management at a premium to the broader market.
Speaker 2 (33:16):
You know, the stock's at about I.
Speaker 6 (33:17):
Think twenty seven twenty eight times earning, so about three
times its growth rate, which may sound like it's really expensive,
but the stock has historically traded a premium to the
SP five hundred. It's not as big of a premium now,
you know, because of the underperformance this year, and I
think more importantly, even though they're the category leader, because
(33:38):
of some of the questions about the Stereocycle acquisition and
whether or not it might hurt profits in the short term.
Waste Management's now trading in a discount to its two
small arrivals. You'd have to think that that gap might
narrow as the company's Earnington prove.
Speaker 2 (33:55):
Has Waste Management announced any plans for the use of
generative as to improve my garbage?
Speaker 6 (34:03):
I have not seen anything along those lines just yet.
But you know what stock isn't an AI play at
this point.
Speaker 2 (34:13):
Very good, Paul. Appreciate you joining us today. I hope
you have a fantastic weekend and we'll talk to you soon.
Speaker 6 (34:19):
The giants are on a bye so it's a great
weekend for me.
Speaker 2 (34:23):
It's a tough one on Monday night, I know, but
we appreciate you joining us anyways. Thank you very much.
Speaker 6 (34:29):
Yes, May the force be with you.
Speaker 2 (34:32):
I appreciate that. Thank you, Paul. That's Paul Monica from
Baron's talking about waste management.
Speaker 4 (34:38):
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Speaker 2 (35:52):
Mike, what else you got for me? Have you?
Speaker 3 (35:54):
And Tucker noticed a lack of fifteen foot high inflatable
Santa cla year because The Wall Street Journal is reporting that.
Speaker 2 (36:03):
They are tough to come by. Shortage. Yeah, fifteen Santa shortage.
Speaker 4 (36:09):
Big displays near me. I've only seen one house that
goes all out. But no, I haven't seen a shortage.
Speaker 2 (36:14):
Yeah I don't.
Speaker 3 (36:14):
I haven't just because of my own business. I'm embarrassed
that I haven't put out yet my giant inflatable grinch
that we do in front of our home every year.
But apparently Home Depot is not stocked with the biggest
they They also did not have a lot of the
what is it like the twelve foot tall skeletons at
(36:35):
home Depot, and they haven't really answered as to why,
other than saying that they were focusing on other items.
Speaker 2 (36:42):
But Wall Street Journal.
Speaker 3 (36:43):
Reporting that one of the big manufacturers of this stuff,
Seasonal Visions International, which pretty much guess what, imports all
of it from China, warned earlier this year that they
didn't want anything about supply of goods. They did alert
customers that the terraces had prompted them to shut down
their phone and email support. So perhaps it's tariff related,
(37:06):
but I don't know.
Speaker 2 (37:07):
I'm just about anyone would tariffs have them shut down
their phone and email support.
Speaker 3 (37:10):
I mean plenty of companies have basically said, hey, we're
trying to find ways to cut money here or cut
expenses so that we don't have to raise prices all
that much, and so.
Speaker 2 (37:20):
So you get rid of all your customer service. Yeah,
I guess. So it's an aggressive move, Cotton. We'll see
if it pans out.
Speaker 3 (37:26):
It was, but yeah, beware that if you are doing
some last minute inflatable or other loud, obnoxious yard holiday decorations.
Speaker 2 (37:38):
They may be tougher to come by this.
Speaker 4 (37:40):
How big is your Grinch?
Speaker 3 (37:43):
You know, I'm probably envisioning it bigger than it is,
but it's definitely at least eight feet long.
Speaker 2 (37:50):
He's on a sled.
Speaker 4 (37:52):
Oh is Max next to him?
Speaker 2 (37:53):
I'm just looking at it. Okay, Max is next to him.
Speaker 3 (37:56):
It seems pretty tall to me, but you know, it's
been a year since I've hooked it up.
Speaker 2 (38:00):
I'm kind of over the giant skeletons, to be honest. Yeah,
you've seen one. You've seen them all frightens my children,
you know, Like it's okay, that is the stated gold Tucker. Yes,
let's buy something to frightening small. I don't want to
enter the premises. Yes, it is wild just like my
five year old this year was like for the entire
(38:20):
month of October was like, I want to make things
as spooky as possible, and then got to Halloween and
just spooked yourself out to the point where she like
couldn't go out. Yeah, she's just like I can't do it,
like I'm too scared. I'm like, okay, like you spooked
yourself out. I got it, but uh it was a
good run. We had fun with it anyways. That was
up ninety nine points, SMP's up eighteen, Nasdaq up seventy four,
(38:41):
so about a quarter percent up on all major indices.
SMP within a whisker of potentially notching an all time
high close day if you can get above sixty eight ninety.
We're gonna take a break for the whole weekend. Hope
you all have a great weekend. We'll see you back
here Monday four
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
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(01:06):
and Mike armstrawa.
Speaker 2 (01:09):
Chuck Mike Tucker with you here on a Friday, and
as we sit here right now, all three major ingencies
in the green. The S and P's up twenty three points,
Dow Jones is up one hundred and forty six points,
and ASDA can Posite up eighty eight points, So we
got some green on the board. Tenure. US Treasury is
up one point nine basis points to four point one
(01:29):
two seven percent. Dollar index flat today at ninety eight
point nine to five five. Gold is up twenty eight
to twenty an ounce to forty two to seventy one
and twenty cents. And we've got crude oil up sixty
cents a barrel on West Text Intermediate to sixty dollars
and twenty seven cents UH. When we take a look
at gas prices though continuing to slide, and that should
(01:51):
be expected for the next five to seven days, even
with crude oil tacking up just a little bit. Main
reason refinery capacity has come back online and the last
week or so in the US, and that is getting
cheaper gas out to people. So we're at two ninety
seven and eight tenths of ascent right now, compared to
a year ago. We're at three h three and two cents,
so down about five cents a couple percentage points since
(02:15):
that time. This morning, two major pieces of news. First one,
well it's it's a semi major piece news. We got
September PCE price index data. Yes, it's two months delayed,
but hey, who you know who's counting. Will take what
we can get from a data perspective. Came in as expected.
Point two percent on the headline, I'm sorry in the court.
(02:37):
Point three percent month over month on the headline. No
major surprises. There. Also big news overnight, Netflix and Warner
Brothers Discovery trying to get together in a seventy two
billion dollar acquisition of Warner Brothers by Netflix that obviously
is pending regulatory approval and a whole bunch of other things,
but would close in twelve to eighteen months if approved
(03:01):
at this point. So those have been some of the
major stories that we have been covering. Mike Pece from Barons,
Meta opens a new frontier in AI race. Why it's
a warning for Apple?
Speaker 3 (03:15):
What's the warning, Michael, I'm not buying it. So both
Apple and Meta have been working on wearables. Apple kind
of moved away from theirs, they moved along from the
wearable glasses. I think they might revisit it at some point.
But Meta has been pushing it with their you know,
their their product that who's been advertising. Is it like
Channing Tatum or something like that has been advertising what
(03:38):
their ray ban glasses?
Speaker 2 (03:40):
Yeah.
Speaker 4 (03:40):
I think you're right, Mike.
Speaker 3 (03:41):
I've seen the ads for them. I don't think anybody's
buying them, but they seem to be.
Speaker 2 (03:47):
Pushing normally like Channing Tatum.
Speaker 3 (03:50):
Second, he affiliates with Meta, He's done in your mind.
Speaker 4 (03:53):
Chris Pratt was.
Speaker 2 (03:54):
In one of them. He's not. He's not done, but
just you know, like again like he's not, you know again,
like I don't know a guy. Sure, I'm a Channing
Tatum fan. I think he's the Jump Street Movies, by
the way, better than people would have expected going in
with that ip.
Speaker 3 (04:10):
So they are trying to jump in there and push
on that front. I really don't think that it's any
threat to Apple. Quite honestly, I just don't see it.
Investors did applaud Meta a little bit when they announced
just this week that they were abandoning some of their
investment in the metaverse, which begs the question are they
going to have to rename themselves again? Which would be
(04:33):
just hilarious because what are they going to rename themselves?
Speaker 2 (04:36):
Real MEDAI AI verse? I don't know.
Speaker 3 (04:40):
I don't know which direction they go with the naming
piece of it, but they're clearly trying to push more
onto the artificial intelligence side, and they want to create
AI powered wearables, and I'm sure Apple's thinking about that too,
But I don't know if I had to bet on
one company's overall success by being late to the game
(05:03):
on AI. Not that Apple's further late to the game
than Meta is, but I have to bet on Apple
on this one.
Speaker 2 (05:11):
Yeah. I mean, here, here's the thing about Meta. Meta
is really good at building social networks. They know what
makes them tick obviously. Look they built Facebook and then
people forget Like when they acquired Instagram. Instagram was a
tiny little gnat of a company. I mean, there's a
reason why Meta got it for what was it a
(05:32):
billion dollars? I think was the sale. I don't remember
the dollar map, but it was. I think it was
a billion dollars. It was It was a tiny little
company and Meta like figured out exactly made that platform
tick and they want billion. Yeah, billion dollars.
Speaker 3 (05:46):
They grew it exponentially, so really still because they really
pushed the metaverse as the next frontier for social media.
Speaker 2 (05:54):
Right, but it's not a social network. It was attempted
to be.
Speaker 3 (05:58):
Like all of their advertising, remember all the advertising for
their garbage metaverse was, hey, you can go metaverse fishing
with your father who lives across the world.
Speaker 2 (06:08):
And they tried to make it that. But it's not.
That's the thing. It's it's not. It's a crappy virtual
reality world that no one likes, and like that's the deal.
I'm sorry, Mark, but that's the deal. No one likes
your metaverse, like you just if you spent eighty billion
dollars trying to make it happen, and it's not happening.
(06:30):
It's never going to it only seventy seven, Chuck, I
was actually, no, those are the losses. So you're right.
Speaker 3 (06:36):
There was some revenue attached to it, so the spending
was probably well above that.
Speaker 2 (06:40):
So like, it's just not going to happen. And this
is the piece that I've come back to with meta
over and over. I don't think they have any understanding
of what people actually want outside of social media addiction.
They've tried to make devices. Remember they had the cameras
that they were making for your home, the ones where
(07:02):
you could like face It was like whatever the meta
version of face time is.
Speaker 4 (07:05):
The Amazon Echo version for Meta.
Speaker 2 (07:08):
Whatever those are. No one wanted them, No, no one
had any desire for that. Like they've tried to make
all kinds of things they've had. They bought up Oculus,
you remember that, Like that was part of the whole
Meta even before they got into trying to make it
like the metaverse. Remember, they were trying to sell it
as like oh, you can do like video games. No
one wanted the stuff. So I just I look at
(07:32):
Meta and I admit, like, they're really good at getting
you addicted to social media. I'm not sure that they've
proven they can do anything else. Yeah, none of it. Well,
is there is there any other product that they've developed
where you're like, yes, this is like this is the
one they No. I mean, they've acquired a few.
Speaker 3 (07:55):
They do own what I would describe as kind of
the premiere encrypted messaging.
Speaker 2 (08:00):
Service across the globe, WhatsApp yep. But again that was
another acquisition. I do think they make any money from it,
doubt it.
Speaker 3 (08:10):
Maybe you could say they've had some success on Facebook Marketplace,
but that's more of a tie in. So I am
very suspicious that they're going to have some giant success
on rolling out a new piece of hardware powered by
artificial intelligence. Instead, I think what they'll continue to do
is allow all sorts of AI development tools to spread
(08:32):
massive misinformation on their social media platforms. So that will
certainly continue for anybody that uses Facebook. You can probably
attest that like one in three videos is very clearly
generated by garbage AI.
Speaker 2 (08:48):
But this other stuff, I don't know. It looks too
pie in This guy for me. Do you ever watch
The Dark Knight? Yeah? Yeah, so Morgan Freeman at one point,
the guy who's trying to blackmail Bruce Wayne. Yeah, he
goes to him. He goes, so, let me get this straight.
You know, you think that your boss is this you know,
billionaire and mass vigilanthews, you know, beating criminals up all night,
(09:10):
and your plan is to blackmail them. He goes, good luck.
It's kind of where I'm at with Meta on this.
It's like, so you're saying that your competitor is the
premier designer, producer, marketer, and seller of hardware devices in
the world, who makes more money than anyone else in
(09:34):
businesses that no one else can make money in. And
your plan is to compete with them? Good luck, good luck.
That's that's kind of where we are. Like, it's that's
just not their bag. They can continue to do what
they want. I get why they want to do this
because Meta is all salty, rightly so, by the way,
(09:56):
it's not like Apple's like some angel out there. Apple
Chain the rules regarding data sharing on Apple products five
or six years ago, and it completely disrupted how Meta
had to operate and run their business. Meda doesn't want
to have that happen again, So they want to own
the hardware in order to be able to set the
rules that are beneficial to them. I get it. I
(10:21):
just I don't think they're good at that, and I
think they're wasting investors' money trying to make it work,
you know. And and look, here's what I think Meta
could do if they really wanted to the problem with
like and why I say they're not good at it.
They just spent eighty billion dollars trying to make metal work,
(10:41):
and it doesn't instead of trying to dig one well,
you know, to the center of the earth, just pop
four hundred different ones out there and see what comes up.
It's what Amazon does, it's what Google does, It's not
really what Apple does. But look, if you if you're
not sure how you going to make it work, don't
put all your eggs in that basket, right and we'll
(11:03):
see if I can come up with one more, you know,
metaphor to you know, bring in people who aren't you
happy with the ones I've done so far. Great, make
sure they're all Batman related. I mean, yeah, look when
you can be yourself, but at all other times be Batman. Yeah,
let's take a quick break. When we return, we got trivia.
Speaker 1 (11:24):
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This segment of the Financial Exchange is brought to you
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Time for trivia here in the Financial Exchange, And in
(12:40):
case you missed it, Netflix has agreed to purchase Warner
Brothers film and streaming assets for seventy two billion dollars.
Netflix is the largest streaming service with over three hundred
million subscribers. So our trivia question today is simply what
year was Netflix launch? Once again, what year was Netflix
(13:03):
launched Uh be the fifth person today to text us
at six one seven three six two thirteen eighty five
with the correct answer along with the keyword trivia, and
you'll win a Financial Exchange Show T shirt.
Speaker 2 (13:18):
Once again, the.
Speaker 4 (13:19):
Fifth correct response to textus to the number six one
seven three six two thirteen eighty five along with the
keyword trivia will win that T shirt. See complete contest
rules at Financial Exchange Show dot com.
Speaker 2 (13:33):
From Barons Michael, the inequality story isn't what you've heard
meet the Pacman economy guys, thank you.
Speaker 3 (13:53):
This has become ooh with Cherry the dumbest financial debate
of twenty twenty five.
Speaker 2 (14:01):
It has. It's become the dumbest financial debate of tick.
Have you got the ghost power up? Uh? Okay, yeah,
that's the one. Wow.
Speaker 3 (14:09):
So I enjoy reliving the pac Man days as much
as anybody else. Some of my favorite bars of those
that have the flat the pac Man bar that you
can sit at and play. This is just the silliest
debate that we continue to have. Is it k shaped?
Is it more shaped like a pac Man? What about
(14:29):
misspac Man?
Speaker 2 (14:31):
Like? What what are we talking about here?
Speaker 3 (14:34):
Chuck?
Speaker 2 (14:34):
What is the purpose of this debate. I think the
economy is shaped like a toilet in the all the
poop just goes downhill, all right, So to describe what
we're talking about.
Speaker 3 (14:47):
The issue that the author takes with the K shaped
economy is that the the lines are too severely pointing
downward on the bottom of the K. So they think
it needs to be a little bit more. I can't
do it. I can't do and they think it looks
more like a pac Man? Does this not to assemble
(15:08):
some of the dumb debates you remember having, like with
your friends when you had no responsibilities, sitting on a
couch at like twenty two years old, not about I
wasn't discussing the shape of the recovery of the economy.
But this is such a dumb debate.
Speaker 2 (15:25):
Yeah, these are the conversations that you had at two
am after having a couple two men, and you're like, hey,
does that does that cloud look like miss pac Man?
A real pac Man? Like no, Like, this is not
something that matters the shape of the h Thank you,
(15:46):
thank you. Let's let's put this one to bed here,
and I guess we'll move on to this piece from
market one. What was that one Chappelle, Sa, Mike, I'm
gonna workshop this over the weekend just so that you know,
(16:08):
we can do it on Monday, and we'll give Tucker
a little time to get some new stuff ready. But
I'm ready to christen the Frogger economy. Okay, I'm gonna
work shop it over the weekend. Yeah. Let me know.
It's an interesting shape. Okay, it's not the shape, it's
the movement. Ah.
Speaker 4 (16:27):
You can also do Crossy Road, which is a complete
ripoff of Froger, it.
Speaker 2 (16:31):
Is, which is why we're gonna start with the original.
You know. But remember in Frogger sometimes you just take
one step forward, but then you gotta take two steps back,
do you, Americans? Affordability crisis isn't Terrrif's fault. It's something
much much deeper. Yeah, of course it is. We didn't
just suddenly like wake up this year and be like, hey,
(16:51):
things are unaffordable.
Speaker 3 (16:54):
Inflation's a problem in twenty twenty five.
Speaker 2 (16:56):
That's new. Thanks. I appreciate knowing that we've gotten here through. Okay,
So actually, there there was a really interesting paper that
I read a couple of days ago, and and it
gets at this topic as to like kind of how
we got here, and I think it does so in
(17:17):
a way that is more informative than than trying to
figure out like is this a pac manner a case
shaped economy, because that's just kind of useless and his
fault it is, yes, because like it's it's kind of
it kind of gets to the idea that, look, this
isn't necessarily anyone's fault. It's everyone making rational decisions based
(17:37):
on what the economy has like turned into over time.
And and pretty much what it argues that this paper
you divide the economy into like who receives a certain
share of economic benefits And basically what we've seen is
that the labor share of you know, GDP has been
(18:01):
declining over time, and the paper asks the question, look,
why is this? You know that it's happened. And basically
what you get to is, as societies get more complicated,
you have to spend more of your time fixing the
stuff that makes it work. Like, as an example, if
you were to go back to like seventeen sixty three
(18:22):
New England, you didn't have to worry about maintaining power
lines because there weren't any. You didn't have to worry
about maintaining sewers there weren't any today. You have to
spend a lot of time and money doing those things,
and so it's a much more capital intensive society than
it used to be. And so as a result of
(18:42):
all of the additional stuff that we have to maintain capital,
then said, look, in order for us to get the
return that we need, what's the you know, what are
the ways that we can manage this? And immediately you
go to, let's figure out ways that we can have
less labor, because labor is the biggest input for any business,
and so that's how you get through you know, productivity
increases and things like that. Businesses maxed out those easy
(19:05):
to find the levers, you know, kind of over the
course of the twentieth century what they do, Hey, let's
move the labor somewhere elsewhere it's cheaper. And in doing so,
like so you can see, these are like rational decisions
for why this happened that ended up leading us to
this place where there's now this you know, kind of
big problem both from an inequality and an affordability standpoint.
(19:28):
We discussed more and we come back, but we will
do the trivia answer, and we've got wall Street Watch.
Speaker 1 (19:33):
Next, bringing the latest financial news straight to your radio.
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street Watch. A complete
(19:54):
look at what's moving market so far today right here
on the Financial Exchange Radio Network.
Speaker 4 (20:01):
Markets trading modestly hire at the moment as traders react
to a core PCE index for the month of September
that came in line with estimates Outside of the inflation reading.
The big news comes from the media world, where Netflix
has agreed to buy Warner Brothers. Right now, the Dow
is up about two tents of a percent or ninety
one points higher. SMP five hundred is up nearly two
(20:23):
tenths of a percent, Nasdaq up just over a tenth
of a percent higher, RUSS two thousand is down about
two tenths of one percent, Tenure treasure Field is up
two basis points at four point one three five percent,
and crude oil up seven tenths of one percent, trading
right around sixty dollars barrel. Netflix struck a seventy two
billion dollars deal for Warner Brothers, beating out bids from
(20:46):
Comcast in paramount. With the deal, Netflix will add Warner's
TV and movie libraries, as well as HBO and HBO
Max shows. The deal is expected to close in twelve
to eighteen months, pending regulatory approval. Netflix has been volatile today.
The stock is now down almost three percent, while Warner
Brothers shares are up three percent. Meanwhile, digital document signing
(21:09):
company DocuSign lifted its annual sales outlook after quarterly results
beat expectations driven by subscription growth. However, the stock is
dropping six percent as some analysts believe the company's guidance
may be conservative. Elsewhere, shares in Victoria's Secret are rallying
eleven percent after the lingerie and apparel company posted a
narrower than expected quarterly loss and a nine percent increase
(21:32):
in net sales. The company also raised its full year outlook,
saying it's well positioned for a successful holiday season, and
Ulti Beauty raised its full year sales outlooks sending shares
in the personal care retailer up by fourteen percent. I'm
Tucker Silva and that is Wall Street Watch. And in
the previous segment, we asked you the trivia question, what
(21:53):
year was Netflix launched?
Speaker 2 (21:55):
Launched?
Speaker 4 (21:55):
That would be nineteen ninety seven. David from Reading Masses
our winner today taking home a Financial Exchange Show t shirt.
Congrats to David, and we play trivia every day here
on the Financial Exchange. See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:11):
Before we go further, I'd like to talk about the Moon. Sure,
are we going to it? Maybe? I don't know. Did
you know that? In nineteen sixty seven, one hundred and
seventeen countries signed onto the Outer Space Treaty. Wait, we're
literally talking about the Moon. I thought it was like
(22:34):
to the moon type? No, what did you think I
was gonna Yeah, okay, No, I did not know that.
Please go on, Tucker. Did you know about this?
Speaker 4 (22:41):
No?
Speaker 2 (22:41):
One, I don't care. So the Outer Space Treaty, this
was back in the sixties, when you know, we thought,
you know that we were actually gonna be like living
on the Moon in the next you know, ten years
or whatever. But basically the provisions in this the use
of any of outer space has to be carried out
for the benefit and interest of all countries in the
province of mankind. Outer Space has to be free for
(23:03):
the exploration and use for all space all states. Outer
Space is not subject to national appropriation by claim of sovereignty,
by means or use of occupation, or any other means.
And States will not place nuclear weapons or other weapons
of mass destruction orbit or on celestial bodies, or stationed
them in outer space in any manner. The Moon shall
(23:24):
be used exclusively for peaceful purposes. No weapons, testing, military maneuvers,
establishing bases, installations of fortifications. H And I had no
idea this actually existed. Good. I was. I was listening
to a podcast about the Moon economy. Uh huh, and
this came up as as part of it, and I
was like, oh, I didn't know that, like that was
(23:46):
a thing. But basically what the podcast was talking about is, yes,
like no nation can technically claim part of the Moon,
but the Outer Space Treaty makes no reference to activities
such as mining and things like that on the Moon,
and so you might be able to own and operate,
you know, things that remove minerals from the Moon. To
(24:08):
also the question of like, let's say that you were
trying to own the Moon, Who's going to enforce it
if you like decide to do that. The Space Police? Yeah,
you know, like what's what's what's exactly the jurisdiction there
like how many? Uh? Like, what who's going to come
after you? If you decide, Yeah, we own the moon.
(24:32):
It's the next frontier, Chuck, I thought it was interesting. Uh,
should Walmart really be trading like a tech company.
Speaker 3 (24:37):
Mike, based on their sales growth? Maybe talk to me.
So it is a very expensive company. What's that pee
on this thing? Over thirty five?
Speaker 2 (24:46):
Now?
Speaker 3 (24:46):
I think it is. It is a very very expensive company.
Their same story.
Speaker 2 (24:51):
Forty times forty times earnings and forty three times forward earnings.
Speaker 3 (24:55):
So to start, I don't know that tech companies should
be trading at the levels that they they are, So
I'm not I'm not sure that you know this is
a reasonable comparison. But they are attracting new customers, crushing
their competition, and generally expanding their business at a pretty
(25:15):
rapid pace. So I think the whole market has some
potential reckoning, giving where price to earnings ratios are across
the whole thing. But I'm not sure I would exclude
Walmart from the party for any reason.
Speaker 2 (25:28):
They're growing revenue five percent year over year, They're growing
earnings almost seven percent year over year. This is over
the last five years, so like this is you know,
not just a short time thing that you're seeing. If
we look in the last five years, Walmart stock is
up one hundred and forty eight percent. It's pretty wild, Okay.
Now that is you know, from the end of twenty twenty,
(25:49):
where like things were still kind of you know, dodgy
from the pandemic and everything. But you know, if if
you look at this, you can certainly see I mean, look,
here's the thing. You take a look at it from
a you know, I prefer you know, forward pe ratios,
you will get where it stands right now. Again, it's
(26:10):
a company that you know, three four years ago even
was trading you know, twenty times forward earnings. Now it's
forty three. There's a lot of margin expansion that's happening there. Yeah,
there's been earnings growth, but it's it's been margin expansion,
not margin a multiple expansion, not margin expansion.
Speaker 3 (26:25):
Margin Stentich would be, they're making a whole lot more profit,
They're not making twice as much profit.
Speaker 2 (26:29):
No, So there's been you know, a ton of multiple
expansion that that's been going on there. The question that
I ask with Walmart is the same one that I
ask of Apple or Amazon or any of these other
companies like it. And this is like purely just a
theoretical thing. If you own Walmart today, what would ever
be the reason that you sell it? Like if you
(26:52):
make the decision to buy Walmart now, Like, are they
gonna go out of business in your lifetime? Yes, they do.
There's bigger problems with the American economy than your portfolio.
Speaker 3 (27:05):
Yeah, so I'm not worried about them going out of business.
But could you have said the same thing about Target
a decade ago? Right, No, you can make big missteps
as one of these businesses.
Speaker 2 (27:14):
Not Target's different. Target's not Walmart. No, like now where
Walmart Walmart today is as close to you a utility
as you can get in retail. They are pretty necessary. Yeah,
you know, like Walmart goes out of business, you got
two and a half million people unemployed.
Speaker 3 (27:32):
I don't know, Chuck, I am not sure that there's
a huge difference between this company today and Sears thirty
years ago.
Speaker 2 (27:40):
You don't see the level of entrenchment just being different, man,
I don't know. I mean, look, I I was a
wee little lad back when you know, Sears was dominant.
Maybe maybe it is the same, but it sure feels
like there's a whole different level of you know, combination
of things like a like regulatory capture. The basically you know,
(28:00):
keeps like we have the question like is Walmart? We
asked the question about a lot of these big companies,
like are they too big to fail? Didn't we kind
of get to a yes on Walmart?
Speaker 3 (28:11):
I'm not there? Interesting, Yeah, I'm not there. I mean,
if they weren't out of business tomorrow, yeah, but I
don't see any reason they couldn't die a slow death
of the next two decades, you think even two decades,
Like I I feel like it would take one hundred
and forty six years for it to happen to Walmart.
Speaker 2 (28:30):
But I don't know. It's uh again, like for for
something bad to happen to Walmart means that something good
has to be happening to a whole bunch of other retailers,
And I don't know how those two things can happen
at the same time. Yeah, just given how important Walmart
is to the US economy, I'm not saying this is good.
I'm just saying that it is so seven hundred and
(28:51):
three billion dollars in goods in the last twelve months.
That's two billion dollars a day that Walmart does in revenue.
It's insane. Let's take a quick break. When we come back.
Paul Omnica joins us to return us to sanity right
after this.
Speaker 1 (29:05):
Here the Financial Exchange every day from eleven to noon
Non Serious XM's business radio channel one thirty two. Keep
it here for the latest business and financial news and
the trends on Wall Street. The Financial Exchange is now
life on Serious XM's business radio channel one thirty two.
Thisace He's the Financial Exchange Radio Network.
Speaker 5 (29:25):
We're proud to announce that circle K is now the
official convenience store of the DAV Department of Massachusetts at
circle K. Supporting those who bravely served our country isn't
just a commitment, it's a heartfelt mission. Circle K is
honored to stand with the dav Department of Massachusetts to
ensure that veterans receive the care and recognition they deserve.
If you'd like to do your part, please visit DAVMA
(29:46):
dot org. Thank you for standing with circle K and
the dav Department of Massachusetts, and thank you veterans for
all you've done.
Speaker 1 (29:56):
Find daily interviews and full shows of the Financial Exchange
on how are you Page? Get cut up on anything
and everything you might have missed. This is the Financial
Exchange Radio Network, Ladies and gentlemen the weekend.
Speaker 2 (30:19):
As promised, we are now joined by the one and
only Paul Hamonica here to talk a little bit about
Waste Management. Paul, how you doing today?
Speaker 6 (30:29):
I'm good? Thanks?
Speaker 2 (30:30):
How you doing doing well here? So when we take
a look at Waste Management, had a nice little run
over the last month or so here, and you know,
obviously long term company has been fantastic, but you're to
date stock's only up about seven percent. What's been challenging
them for them this year and what may have changed
in the last month or so.
Speaker 6 (30:50):
Yeah, it's a great question, man. I think that there were,
you know, some concerns obviously about the broader economy, and
you know, just whether or not, you know, investors really
wanted to be in a stodgier, more defensive oriented name
at a time where there's still all this optimism about
(31:12):
AI and enthusiasm about tech. But with some of the
concerns about an AI bubble really picking up steam in November,
you started to see some more defensive names like Waste Management.
Their peers Republic Services and Waste Connections also did well,
and I think investors recognized that, you know, this is
(31:32):
a relatively stable business because of government local government contracts,
and you know, they are adding some growth with acquisitions.
Stereo Cycle as a company that they bought last year
that really helped them with medical waste, which you know,
(31:52):
as we're all getting older and getting more drugs at home,
there's a lot more you know, injectable pens, especially with
GLP ones, and you know, lots of pills that we're
all taking. So medical waste is a big issue and
I think that's something that Waste Management is hoping to
capitalize on as well.
Speaker 2 (32:12):
You mentioned it's kind of, you know, a boring, stodgy company.
It still is one that's worth almost one hundred billion dollars,
So is it We're still looking at this in terms of, hey,
this is always a service that's going to be needed,
and yes, it's not necessarily knocking the cover off the
ball in twenty twenty five. But unlike you know, other
(32:33):
types of businesses that we might have questions about, hey,
you know, what will they look like in ten or
fifteen years. I think we have a pretty good idea
of what the trash business is going to look like
in ten or fifteen years, which is pretty similar to today.
Is that fair?
Speaker 6 (32:45):
Yeah, I think that is fair, and that is one
of the reasons why, you know, analysts have that kind
of steady eight to ten percent ish sort of earnings
growth expectations over the next few years, which you know,
again that's not in video or meta type levels, but
it's stable.
Speaker 2 (33:03):
It's steady.
Speaker 6 (33:04):
There's a small dividend that the company pays, you know,
so you are getting a dependable business. And that's why
they taroted Waste Management at a premium to the broader market.
Speaker 2 (33:16):
You know, the stock's at about I.
Speaker 6 (33:17):
Think twenty seven twenty eight times earning, so about three
times its growth rate, which may sound like it's really expensive,
but the stock has historically traded a premium to the
SP five hundred. It's not as big of a premium now,
you know, because of the underperformance this year, and I
think more importantly, even though they're the category leader, because
(33:38):
of some of the questions about the Stereocycle acquisition and
whether or not it might hurt profits in the short term.
Waste Management's now trading in a discount to its two
small arrivals. You'd have to think that that gap might
narrow as the company's Earnington prove.
Speaker 2 (33:55):
Has Waste Management announced any plans for the use of
generative as to improve my garbage?
Speaker 6 (34:03):
I have not seen anything along those lines just yet.
But you know what stock isn't an AI play at
this point.
Speaker 2 (34:13):
Very good, Paul. Appreciate you joining us today. I hope
you have a fantastic weekend and we'll talk to you soon.
Speaker 6 (34:19):
The giants are on a bye so it's a great
weekend for me.
Speaker 2 (34:23):
It's a tough one on Monday night, I know, but
we appreciate you joining us anyways. Thank you very much.
Speaker 6 (34:29):
Yes, May the force be with you.
Speaker 2 (34:32):
I appreciate that. Thank you, Paul. That's Paul Monica from
Baron's talking about waste management.
Speaker 4 (34:38):
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Speaker 2 (35:52):
Mike, what else you got for me? Have you?
Speaker 3 (35:54):
And Tucker noticed a lack of fifteen foot high inflatable
Santa cla year because The Wall Street Journal is reporting that.
Speaker 2 (36:03):
They are tough to come by. Shortage. Yeah, fifteen Santa shortage.
Speaker 4 (36:09):
Big displays near me. I've only seen one house that
goes all out. But no, I haven't seen a shortage.
Speaker 2 (36:14):
Yeah I don't.
Speaker 3 (36:14):
I haven't just because of my own business. I'm embarrassed
that I haven't put out yet my giant inflatable grinch
that we do in front of our home every year.
But apparently Home Depot is not stocked with the biggest
they They also did not have a lot of the
what is it like the twelve foot tall skeletons at
(36:35):
home Depot, and they haven't really answered as to why,
other than saying that they were focusing on other items.
Speaker 2 (36:42):
But Wall Street Journal.
Speaker 3 (36:43):
Reporting that one of the big manufacturers of this stuff,
Seasonal Visions International, which pretty much guess what, imports all
of it from China, warned earlier this year that they
didn't want anything about supply of goods. They did alert
customers that the terraces had prompted them to shut down
their phone and email support. So perhaps it's tariff related,
(37:06):
but I don't know.
Speaker 2 (37:07):
I'm just about anyone would tariffs have them shut down
their phone and email support.
Speaker 3 (37:10):
I mean plenty of companies have basically said, hey, we're
trying to find ways to cut money here or cut
expenses so that we don't have to raise prices all
that much, and so.
Speaker 2 (37:20):
So you get rid of all your customer service. Yeah,
I guess. So it's an aggressive move, Cotton. We'll see
if it pans out.
Speaker 3 (37:26):
It was, but yeah, beware that if you are doing
some last minute inflatable or other loud, obnoxious yard holiday decorations.
Speaker 2 (37:38):
They may be tougher to come by this.
Speaker 4 (37:40):
How big is your Grinch?
Speaker 3 (37:43):
You know, I'm probably envisioning it bigger than it is,
but it's definitely at least eight feet long.
Speaker 2 (37:50):
He's on a sled.
Speaker 4 (37:52):
Oh is Max next to him?
Speaker 2 (37:53):
I'm just looking at it. Okay, Max is next to him.
Speaker 3 (37:56):
It seems pretty tall to me, but you know, it's
been a year since I've hooked it up.
Speaker 2 (38:00):
I'm kind of over the giant skeletons, to be honest. Yeah,
you've seen one. You've seen them all frightens my children,
you know, Like it's okay, that is the stated gold Tucker. Yes,
let's buy something to frightening small. I don't want to
enter the premises. Yes, it is wild just like my
five year old this year was like for the entire
(38:20):
month of October was like, I want to make things
as spooky as possible, and then got to Halloween and
just spooked yourself out to the point where she like
couldn't go out. Yeah, she's just like I can't do it,
like I'm too scared. I'm like, okay, like you spooked
yourself out. I got it, but uh it was a
good run. We had fun with it anyways. That was
up ninety nine points, SMP's up eighteen, Nasdaq up seventy four,
(38:41):
so about a quarter percent up on all major indices.
SMP within a whisker of potentially notching an all time
high close day if you can get above sixty eight ninety.
We're gonna take a break for the whole weekend. Hope
you all have a great weekend. We'll see you back
here Monday four
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