December 29, 2025 • 38 mins
Chuck Zodda and Marc Fandetti recap the year that was for 2025 and discuss a Bloomberg opinion piece regarding reasons for optimism for the 2026 economy. Plus, more on Michael Burry and his ongoing bets against big AI names. James Cameron has really dominated the box office. Which tech will potentially change your life? And, stack roulette.
Mark as Played
Transcript
Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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(01:06):
and Mark Vandetti.
Speaker 2 (01:10):
Chuck Mark Tucker with you here and as we are
winding down the final days of twenty twenty five markets
for the very modest pullback today, the SMP is off
twenty nine points about point four percent. The Dow was
off two hundred and seventeen points about point four percent.
Nas deak can pauses off one hundred and fifty five
(01:31):
points about three quarters I'm sorry, two thirds of a percent.
So again, you've got a little bit of a modest
downward move here, but nothing huge, especially in the context
of the fact that O G. I don't know, like
we were at all time highs last week, So you know,
let's not get too excited about this tenure. US Treasury
down one basis point to four point one two four percent,
(01:51):
the Dollar Index up point zero three percent to ninety
seven seven to two five gold here's where you got
some excitement today. Precious medals are I think the technical
word is imploding this after going parabolic up last week.
A good friend of mine who used to work in
the trading business, one said to me, things that go
(02:14):
parabolic up seldom correct by going sideways. That's kind of
what we're seeing here in precious metals just going down
the list. Gold's down four point six percent, silver's down
eight percent, palladiums down sixteen percent, platinums down twelve. So yeah,
like that, that whole bucket is just getting you know,
bopped on the head repeatedly right now, and it's just
(02:36):
kind of not great there. Crude oil West Text Intermediate
up a dollar forty eight a barrel to fifty eight
to twenty two triple A national average for gas prices
continuing to slide though good news on that front, down
another three tenths of ascent to two eighty two and
five tenths. So after spending all year just like bumping
between like three oh five and three twenty a gallon,
(02:57):
we've had some real movement down in the last couple
of weeks as refinery outages have eased in the Midwest,
and so you're at two eighty two and five tenths
of ascent at the moment on the trip A national
average four gas prices. A year ago, we were three
to zero two and half a cent, and so you're down,
you know, about six six and a half percent on
gas prices relative to this time last year. It's always
(03:21):
fun I filled up yesterday. I was like, I was
a little giddy. I was like, ooh, like that that
was nice. I got in and out of here and
under you know, forty uh, I think forty two dollars.
My man, this is this is kind of fun, you know,
not as fun as paying nothing for gas, but uh, hey,
you'll take what you can get. Peace in the bloomy
Berg today. Five reasons to be optimistic about the twenty
(03:43):
twenty six economy. So let's talk about what the reasons
are that are outlined in here first, and I think
that these are ones that we've talked about generally. Uh,
Consumers going to have more money this in the form
of larger tax rebates that are expected kicking off in
you know, February through May foremost filers. So that is
(04:06):
something that is again not in the works, but going
to happen based on the tax code changes that were
made earlier this year. So I think that is you
know a big piece. Businesses also going to have more
money to spend through some additional depreciation that they can
go through and that'll you know, hopefully boost capex as
(04:29):
we get into next year. The other ones in here
I think are not ones that I would classify as
certain by any means. The first one here, interest rates
will be lower. I don't know how you can say
that with any kind of confidence. The Fed may decide
(04:51):
to move short term interest rates lower. There is no
guarantee that moves longer term interest rates lower, as we've
seen the last two years. By the way, the FED
is embarked in cutting cycles each of the last two falls,
and you have not seen long term rates move down.
So I don't think those facts are in evidence. Next one,
energy could be cheaper, well, couldn't. I mean it could be.
(05:14):
It was this year, and like that's a big boost
for all of us who don't work in the oil industry.
But I don't know if energy is going to be
cheaper next year, do you. I do not. No, So
like it's it's a maybe, But I don't know how
you can say that one definitively. And there will be
more certainty on tariffs maybe, But again I don't know
(05:36):
how you can say that definitively, given how the tariffs
have evolved over the entirety of the course of this
calendar year.
Speaker 3 (05:42):
Yeah, I mean, all these facts could be true. There
are facts, all of these two of them are yeah, Okay,
all these things could be true. The economy could still
dip into recession. You just don't know. At the safest bet,
Like with respect to stocks that we talked about in
the last hour, most of the time the economy grew,
and it's not a coincidence that most of the time.
When I say most of the time, I mean most
(06:03):
calendar years, not coincidentally. Stocks go up most of the
time because they're tied to economic growth. So safe bet
would be, yeah, the economy is going to grow at about
its trend rate next year.
Speaker 2 (06:12):
If you want to look for other areas where you
can be optimistic, like are the things that again may happen,
but are are not certain to the two that I
would look at are housing and the labor market. Housing,
what do you want to see? You want to see
a higher volume of transactions happening, because even if you
are seeing builders being pressured by lower pricing throughout the
(06:36):
southern and western part of the country, transaction volume can
help degenerate more activity even in the absence of constructions.
Not quite the same. Again, there's a lot more activity
that happens building a four hundred thousand dollars house than
selling one. But even when you sell a four hundred
thousand dollars house, think of what happens in terms of
the equity that's unlocked there, assuming that you pay regular
(06:56):
broker commissions, you know, call it five percent, twenty thousand
dollars of that equity goes out to the brokers to
go and spend in their local communities. Then you might
be hiring movers. Maybe that costs, you know, whether it's
you know, small movement's you know, eight hundred bucks, whether
it's a big move and it's five thousand bucks. Hey,
that's money that's going out to support, you know, businesses
(07:17):
in the local community. You might be doing remodeling. That
helps contractors that aren't building new homes, but they can
still you know, do the remodeling work. You might be
doing landscaping, You might be buying new furniture, all that stuff.
So higher volumes can make up for some of the
dip in activity related to construction. And so I think
(07:37):
that's somewhere that you can potentially be optimistic because higher inventories,
which we have now relative to a year ago, tend
to lead to hire transaction volumes. Inventory leads sales other things.
Consumer spending has not fallen off a cliff. In fact,
it's been remarkably consistent this year, generally running about four
to six percent growth year over year. The labor market
(08:00):
doesn't fall apart unless demand does, and so as long
as consumers keep spending four to six percent more than
the prior year, it makes it harder for that labor
market to fall off a cliff. That's optimistic, right, like
taking the bad things off the table is optimistic? Am
I wrong?
Speaker 1 (08:19):
No?
Speaker 3 (08:20):
I think again. A safe assumption is that the economy
will do next year more or less what it did
this year. Big discontinuities going from reasonably strong growth, which
we've had the past couple of quarters, to negative growth
those absent big shocks, which are of course unpredictable, so
that's not a very helpful qualifier. Absent big shocks, the
(08:41):
economy tends to continue to do what it's been doing.
A good predictor of next quarters, say GDP growth, which
is the most widely cited measure of this state of
the economy. Best predictor is the past quarters growth. You
could put the term spread in there and maybe improve
your model a little bit. If you're into that type
of thing, but for most of us us just look
at what the economy has been doing. Assume it'll continue
(09:02):
to do that unless something hits it and throws it
off track. That's not a very helpful guideline, but it
is a reasonably good forecasting rule.
Speaker 2 (09:14):
Just take a quick break here. When we return, we're
going to do a little bit of trivia and then
we're talking Michael Burray after this.
Speaker 1 (09:22):
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dot Boston. Time for trivia here on the Financial Exchange
and on this day. In eighteen forty five, Texas was
(11:09):
admitted as the twenty eighth state of the United States.
One year later, the twenty ninth state was admitted to
the country. So trivia question today, what was the twenty
ninth state admitted to the US? Hint, it's in the Midwest.
Once again, what was the twenty ninth state admitted to
(11:29):
the US? Be the second person today? It texts us
at six one seven three six to two thirteen eighty
five with the correct answer along with the keyword trivia,
and you win a Financial Exchange Show T shirt. Once again,
the second correct response to text us to the number
six one seven three six two thirteen eighty five with
(11:50):
the correct answer along with the keyword trivia, will win
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (11:58):
Here's to Wall Street journal Michael Burry bets that he
isn't too early to go against the AI juggernaut. Should
other humans care? Look here, here's the thing, Burry. Smart
dude made more money in a single year than Olliver
making my lifetime at one point. Uh. I just I
don't know why we have to document his every move.
(12:23):
It's not like he's always right. Uh, It's not like
he is, you know, consistently someone who accurately predicts market movements.
He had one monster bet that paid out in his favor,
by the way, after like three or four years leading
up to that, where his hedge fund was hemorrhaging investors
(12:44):
because his bets weren't paying off. And so I don't
know why he really gets lionized as you know, some
kind of you know, read on exactly what's gonna happen
in the market other than people know the name. But
because you know his character is used in the big short.
Speaker 3 (13:03):
Yeah, I don't none of this is helpful to an
individual investor. I don't think he's not really an investory
speculating and investor puts their capital in a long and
a generative asset for the long term. It's what we
do in our day jobs. It's what pension funds do.
It's what you do if you have a four oh
one K and you're in a target date fund that
reallocates automatically as you age and rebalances automatically to keep
(13:25):
your mix in line with your goals. That's how most
people should approach investing. Are stock's expensive, Well, objectively, yes,
they are. By expensive, we mean is their price high
relative to past twelve months earnings or a longer period
of earnings? If you like one of those smooth measures.
Stocks are undeniably very expensive, and historically that's portended low returns.
(13:48):
Just like when any asset gets too expensive, your yield
goes down because it's the reciprocal of that you flip it.
So stocks are objectively expensive. Does that mean they're going
to crash?
Speaker 2 (13:58):
No?
Speaker 3 (13:59):
Could earn a growth speed up because of all of
this artificial intelligence investment that should make its way into productivity.
Maybe it did last quarter when unemployment went up and
growth went up, very unusual coincidence there. We don't know.
Should we be betting against individual companies the way he is?
It's alluring because these companies seem to be pricing in
(14:23):
ridiculously high levels of growth, But who knows?
Speaker 2 (14:26):
Yeah, And so again I just I don't. I don't
get needing to follow like famous investors every moves. I
just it doesn't do it for me.
Speaker 3 (14:40):
But the stock market would be boring without that, is it?
I mean? The target date? I mean for most of
us as investors, though, who use a target date fund
or something like it. You're supposed to set it, forget it,
and then you know, thirty years you start to cash out.
And historically that's work. That That's what I mean.
Speaker 2 (14:57):
That's pretty exciting to me.
Speaker 3 (14:58):
Yeah it is. But it's like wh watching paint dry,
which after I like that too. You just like the smell,
you just like the no.
Speaker 2 (15:06):
No, I enjoy watching it. There actually is something cool
about watching it dry, like if you ever actually watched paint.
Speaker 3 (15:13):
Dry, no, like a time lapse film or no.
Speaker 2 (15:16):
So honestly, like I've painted like a decent number of
rooms like it at one point or another in my life.
And the cool thing about it is like, quite honestly,
it dries a different color than when you done, and
I don't know, I find the whole pro.
Speaker 3 (15:30):
The only reason I'm interested is because I want to
know when I could put the second coat on and
get on with my.
Speaker 2 (15:34):
I do that too. Yeah, I love painting personally, Like
there's just something very zen about it. It's just like
as long as you have time, it's just okay.
Speaker 3 (15:42):
I'm just it's like most people would consider that to
be after a while sort of boring, and investing should
be boring too. You put in your you make your deferral.
Every couple of weeks, stocks do hopefully what they've done
historically going forward and I don't mean the same percentage return.
I just mean grow with the economy. That could be
five percent going forward, it could be six seven eight,
it'll probably be more than bonds. The whole industry of
(16:04):
financial services kind of founded on that proposition. If that
doesn't work out over a very long period of time,
we're in trouble. But the Burry infatuation, like the Peter
Lynchin infatuation, the Warren Buffett infatuation, they make what would
otherwise be watching paint dry a little sexier. Maybe that's
sort of my theory. Otherwise most of us can't.
Speaker 2 (16:24):
You don't think the market's like exciting without not pets.
Speaker 3 (16:27):
I just see numbers move, I see rates, and no,
I don't.
Speaker 2 (16:31):
I don't. It doesn't interesting.
Speaker 3 (16:32):
Well like exciting. It's good to make it's good to
be a successful long term, to be a discipline, not
successful because we're all just along for the ride. But
I know I don't think that day. I don't find
the day to day movements. I find them interesting sometimes,
like oh wow, that that's an anomaly, that's the frequency
of that is small historically.
Speaker 2 (16:48):
That's the stuff I mean Like, I mean, okay, then
how can you get this year in markets and say
like it hasn't been exciting. We've seen some stuff this year,
you know. No, I don't need like Michael Burry saying
like a eyes a bubble to feel like we've seen
some stuff this year. I mean, we had like one
of the fastest twenty percent draw downs in history in
(17:09):
March and April. Yeah, and then we had an unprecedented
run of a lack of volatility in the six months
after that, like one of the calmest six month market
periods in history. After that, even just in the last
couple of weeks, you saw precious metals go parabolic up
and now they're you know, kind of going parabolic down. Yeah,
(17:29):
Like there's some wild stuff that's happening.
Speaker 3 (17:31):
I never know what to make of that, which is
why I I get a little less excited maybe than
I should, given that, you know, my job depends on it.
Speaker 2 (17:40):
Maybe it's better that you don't get excited. Possibly, you know,
it's like you don't want the surgeon get it being like, oh,
look at this, like you just want to do that's
a big tummer.
Speaker 3 (17:49):
You just wanted to be like, sorry, that's a tasteless.
Speaker 2 (17:52):
You just wanted to be like, oh, like, let me
go do my job.
Speaker 3 (17:55):
Although probably does think that. They just they just don't
convey it like, wow, that's that's that that's in really
bad shape.
Speaker 2 (18:02):
Well, right, even as I talk about like, hey, this
market's exciting, ultimately I look at it and I say, okay,
this is what you want to do in conditions X,
Y and Z, Like there's a job to do.
Speaker 3 (18:15):
Yeah, I just want eight to ten percent real returns
and call it a day. But that's, as you point
it out, you get instead go away for forty years,
and you know that's my ideal sort of state of existence. Yeah, yeah,
set it forget.
Speaker 2 (18:28):
It sitting on a beach somewhere while the compounding happens
for you.
Speaker 3 (18:32):
Yeah, let it work for you, which is what we
all really do, which is what you do in your
four oh one K. You put your money in every
two week. You don't really think about it.
Speaker 2 (18:39):
Yeah. So that's uh, what we've got going on there.
Be prepared to keep paying more for electricity that sucks.
Speaker 3 (18:49):
Schrigger didn't hit that in her column. She no, this
I know, but yeah, this is an example of.
Speaker 2 (18:56):
So yeah, you've got her average residential electricity rates risen
four point nine percent this year according to the EU.
The data from the CPI I think is a touch
hotter than that. I think it's closer to like six
percent year over year. And doo. We expects that electricity
rates are gonna rise another four percent next year, but
no one has any idea because you unless you know
(19:19):
how much of the input commodities are gonna cost, you
don't know how much electricity rates are gonna go up. Yeah.
Speaker 3 (19:26):
The demand component is another variable, maybe a little less
harder to forecast.
Speaker 2 (19:30):
Yeah, I mean again, aside from the data centerpiece, everything
else moves pretty predictably because we only build out so
much capacity each year. We only have the population grow
so much each year. There's only so many homes built
each year. You can predict the demand I think pretty easily,
just because it doesn't wiggle too much. The supply thing
is where I think the questions are, and unfortunately that's
(19:52):
gonna be where they continue to be. Just take a
quick break. When we come back, we get the trivia
answer and Wall Street Watch.
Speaker 1 (19:57):
Next, bringing the latest financial news straight.
Speaker 2 (20:10):
To your radio.
Speaker 1 (20:12):
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street Watch a complete
look at what's moving markets so far today right here
on the Financial Exchange Radio Network.
Speaker 5 (20:26):
Well, the final trading week of twenty twenty five is
upon US, and markets are pulling back slightly. Is investors
away to small batch of economic data points do out
this shortened week, including FED meeting minutes and jobless claims.
We saw pending home sales posted earlier this morning. Right now,
the Dow is down about a half a percent or
(20:48):
two hundred and twenty seven points, s and P five
hundred down nearly half a percent or thirty points lowered,
Nasdaq down by six tenths of a percent or one
hundred and forty six points. Russell one thousand is down
two thirds of a percent, Tenure Treasury yield down one
basis point at four point one one six percent, and
crude oil up about two and a half percent, trading
(21:10):
just above fifty eight dollars a barrel. Japan SoftBank agreed
to buy data center investment firm digital Bridge for four
billion dollars as part of its artificial intelligence push. Shares
in digital Bridge are up over nine percent. Meanwhile, in
video shares it down almost two percent. On the heels
of news from last week that the Chip and AI
(21:32):
Giant agreed to buy assets from Groc for twenty billion
dollars in cash. Grock is a nine year old chip
startup that designs high performance AI chips. The deal marks
and Vidia's largest purchase ever. Elsewhere, the Wall Street Journal
is reporting that Lululemon founder Chip Wilson is launching a
proxy fight at the athletic apparel retailer in an effort
(21:53):
to remake the company's board as the company searches for
a new CEO. Lulu stock is up nearly one percent,
and Disney's Avatar Fire and Ash retain the number one
spot in the domestic box office for a second straight weekend.
Avatar in Disney's Zootopia two were the two top performing
movies by worldwide ticket sales. Disney shares edging higher so
(22:16):
far today. I'm Tucker Silva and that is Wall Street Watching.
On the previous segment, we asked you the trivia question,
what was the twenty ninth state admitted to the US.
That would be Iowa. Chris from Melrose, Mass is our
winner today, taking home a Financial Exchange Show T shirt.
Congrats to Chris. We played trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
(22:40):
show dot com.
Speaker 2 (22:41):
Can we just talk about that Avatar movie briefly?
Speaker 5 (22:45):
Are you an Avatar guy?
Speaker 2 (22:47):
No, No, I'm not either. I'm not. I saw the
first one, and quite honestly, I saw the first one
I think twice in theaters just because at the time
I was like, like, just like the visuals were mind blowing.
I was like, this is just like really cool.
Speaker 5 (23:00):
And yeah, I haven't seen one second of any of that.
Speaker 2 (23:02):
Frit Like, I haven't seen either of the next two.
And I think that that's how basically most people are
in the United States. Because here's the really interesting thing
is when you look at the data on these three movies. Uh,
the first one came out in two thousand and nine.
The gross that it brought in worldwide was like two
(23:24):
point nine billion dollars, which is just an insane amount
of money, especially in two thousand and nine dollars. Remember,
like that's you know, quite a bit of inflation to go.
The second one brought in two point three billion, and
about seven hundred of that was domestic. The first one
about eight hundred of that was domestic. This one right
now has not yet been you know, fully released internationally,
(23:46):
but it's tracking about the same, about twenty eight percent
domestic two hundred million so far, five hundred and forty
million international, So the thing's done seven hundred and sixty
million dollars worldwide at this point. And this is why, Like,
despite people in the US kind of being like James Cameron,
like what are you doing? Like why do you keep
releasing these movies? Like we're just not like as interested
(24:10):
as we used to be, The fact is the international
box office is what it's all about for these you know,
even even if this movie costs, you know, several hundred
million dollars to make, when it ends up grossing one
point six to two billion dollars worldwide, okay, Like yeah,
(24:30):
they're going to be perfectly fine letting James Cameron do
whatever he wants to do as long as he keeps
printing two billion dollars for them. So I know that.
Like I look at this and I'm like, man, it's
a three hour and seventeen minute movie that I just
like am not interested in seeing. And I get it,
Like that's kind of what the data is showing domestically,
(24:53):
but worldwide it's still going to turn out you know,
one and a half billion dollars in international revenue, and
they'll be perfectly high to keep, you know, underrating whatever
James Cameron wants to do for you know, the remainder
of his career.
Speaker 3 (25:05):
It's a little bit of a paradox. It's like this
movie nobody's ever seen it, and people that nobody's nobody's
seen it, and those that have seen it, you know,
some rave but most.
Speaker 2 (25:15):
I have a couple of friends who have like they
got dragged, like a friend or family member, and they're
kind of like, yeah, yeah, so that's what I mean.
Speaker 3 (25:21):
But it's it's both something nobody's seen and those who
have seen. I'm contradicting myself a little bit there, but
those who have seen were not particularly moved by it.
Also wildly successful. It's like some of these podcasts.
Speaker 2 (25:32):
Put on and nobody goes there anymore.
Speaker 3 (25:34):
There you go exactly. So it's it's one of those
types of paradoxes. It's like these wildly successful podcasters Joe
Rogan or whomever, nobody listens to him or very few do,
proportionally speaking, wildly successful, paid hundreds of millions of dollars
a year. It shows the power of digital media and
(25:55):
modern distribution channels. For I'll just say art, it's expanded
the audience by billions in the case of movies and
podcasters too of people.
Speaker 2 (26:04):
The wild thing about James Cameron is like, just if
you look at his career and what he's done, he
basically almost never releases anything, but when he does, it's
usually something pretty important. Like you gotta like go through
the list, and like, his first couple things were again
(26:24):
I've never seen them, so I don't know anything about them.
But his first thing was a film called Xenogenesis back
in nineteen seventy eight. Have either of you heard of it? No,
I haven't. Then he finally got big and eighty fourth Terminator,
like revolutionary movie that like changed basically like along with Diehard,
(26:45):
basically changed how action movies are made. Comes out you
know the next year again for actually, no, he didn't
direct Rambo First Blood that was I think he was
just a producer on it and maybe a writer. Then
he comes out two years later with Aliens, the sequel
to Alien like wasn't even his own original ip, but
gets pulled in for the second one. There takes a
(27:08):
few years off, does the ABYSS, spends a bunch of
time like working on the technology to be able to
make it. The reason Adobe Photoshop exists today is because
James Cameron had to literally make the technology in order
to be able to get like the visual effects he
wanted in the ABYSS into the ABYSS.
Speaker 3 (27:27):
I guess it was worth it, you know.
Speaker 2 (27:29):
Then Terminator two, Judgment Day True Lies, and then comes
out with Titanic, So he basically is like six seven
movies over like twenty five years, like doesn't produce a
ton then goes and takes I think twelve years off
between Titanic and Avatar, not off, but like he's working
on it. He's working on it, and then just has
done three Avatar movies in the last sixteen years. So, like,
(27:52):
the thing about James Cameron is, aside from a couple
of these movies that like completely changed the game, you like,
the rest of his career kind of like like it's
kind of forgettable, but like every ten years or so
he does something that completely pushes the technology and the
genre forward, which I think is just kind of interesting, folks.
The Armstrong Advisory Group has a guide available this month.
(28:16):
It's titled Retirement Planning for Spouses And this gets at
some of the plan and considerations. If you happen to
be married and there's only a couple days left in
the month, and there's only a couple days left for
you to request this guide, but it goes through questions
about Social Security claiming and coordination of those benefits. How
(28:38):
do you address healthcare for both spouses, especially if there's
an age difference at retirement. How do you make sure
that you're getting the most out of a healthcare plan
at the lowest possible cost. Long term care planning, when
do you address those strategies? And how are the best
ways for you to think about those topics. All that
and more is in this guide titled Retirement Planning for
(28:59):
Spouse And again it's December twenty ninth right now, so
you know you're basically at the end of the month.
They know, to be honest, no one does anything on
the thirty first, So if you're going to request the guide,
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request it? Two ways? Number one, you can call eight
hundred three nine three for zero zero one. Number two,
(29:20):
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The guide is titled Retirement Planning for Spouses basically get
into you know the last couple of days. You can
request it and it's available at Armstrong Advisory dot com
or by calling eight hundred three nine three for zero
zero one.
Speaker 1 (29:40):
The proceeding was paid for by Armstrong Advisory Group, a
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Speaker 2 (29:55):
Piece in the Wall Street Journal Tech that will change
your life in twenty twenty six. What sounds exciting to you?
And here Mark robots.
Speaker 3 (30:04):
I'm thrilled with the idea because I'm in my fifties
thinking about how will i live. A lot of people,
I suppose, as they reach middle age and realize you
can't do what you used to do. Wonder when I'm
interested in robots. Not so that I could play chess
with them, or so they can fold shirts, but just
carry something heavy up the stairs, help me shovel the drive.
(30:24):
This doesn't have to be particularly bright robot, just capable
of doing grunt work, sure, and I wonder dis Yeah,
screw doing the dishes. I mean, any even a frail,
feeble person can.
Speaker 2 (30:35):
God did so many dishes yesterday.
Speaker 3 (30:38):
Yeah, but wouldn't you agree that doing the dishes is
probably not top five things I need to do to
continue to live independently. But taking the shopping up the
stairs or out of the car, this is gruntwork. I
don't need a sophisticated robot that can quote Hamlet Act two,
Scene three while playing Connect four and walking my dog
and all this stuff that engineers think is on there.
Speaker 2 (30:57):
You don't want a companion through the road.
Speaker 3 (31:00):
Buy me a companion a robot, Yes, but I do
need something to front me. I want I want to
carry a ninety pound bag of cement?
Speaker 2 (31:08):
Why ninety Why stop there?
Speaker 3 (31:09):
That's the quantity. I think that's a standard quint at.
Speaker 2 (31:11):
What about three ninety pound bags.
Speaker 3 (31:13):
I don't want a robot quite that strong, because you
don't want to hurt you. But I think well, and
it will eventually get annoyed with me and try to
break my neck.
Speaker 2 (31:21):
So, Mark, you have asked me that for the last time.
I'm stop asking me how fast GDP is growing? Mark,
I'm not interested.
Speaker 3 (31:31):
I don't even need it to talk, but I needed
to carry stuff, including you know, me, up the stairs
at some point. I sure imagine if your back goes
and you can't make it up the stairs. So related issue,
are we aiming too high with AI infused robots?
Speaker 2 (31:49):
Do I think we are?
Speaker 3 (31:50):
Yeah? No, you've heard about what they are apparently struggling with,
Like this robot can't gift wrap a package. Well the
hell I can gift wrap a package, and hopefully I'll
be able to do that even if I only have
a couple of working fingers. But I can't carry the
laundry basket or the package up the stairs.
Speaker 2 (32:05):
I think that we are. I think the average person
is dramatically underestimating what robots are going to be able
to do in the next three to five years. Not overestimating,
I think most because I think most people like hear
the stuff about like, oh, like you can't even do this.
It can't even this is like for generation stuff, you know,
like the Ford Model T couldn't do a lot of
things either.
Speaker 3 (32:26):
Yeah, right, and you know, where's the sunroof?
Speaker 1 (32:29):
You know?
Speaker 3 (32:29):
And actually they did have a great sunroof.
Speaker 2 (32:31):
It did roof, you know, but like there were some
real problems. You were the first cars, and then you
give it though, so were the first robots.
Speaker 3 (32:39):
Yeah right, you know it's are we asking too much
of of of so called humanoid personal assistant type robots?
Speaker 2 (32:45):
No, if you want my prediction, I think we are over.
Here's where I'll land. Actually, I think we're overestimating what
large language models are going to be able to do
five years from now relative to robots. I think we're
going to actually find that five years from now there's
more progression on robots that can do physical things than
ones that can do ver rates advocating.
Speaker 3 (33:09):
That's what I'm hoping for.
Speaker 2 (33:10):
Because I think we're getting towards the commoditization and the
limits of the transformer based large language model, and I
don't think we're anywhere near that on robots that can
actually pick things up.
Speaker 3 (33:23):
That's all I needed to hear.
Speaker 2 (33:24):
That's where I think we're going. Quick break here, when
we come up, we got come back, We got stack Roulette.
Speaker 1 (33:29):
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Speaker 2 (34:43):
What you got for me?
Speaker 3 (34:44):
Mark Financial Times makes a good argument for diversification, not
just domestically, but considering the global opportunity set. The headline
from The Times, US stocks eclipsed by rest of world
in twenty twenty five, a little bit jarring at first.
Stocks are up nearly twenty percent, is measured by the
S and P five hundred index, but not as much
as international stock indices. The Financial Times points out that
(35:08):
the All Country World Index, maintained by Morgan Stanley Capital,
the MSCI All Country World Index, you may have this
option in your four one K plant, so that might
kind of ring a bell, is up about thirty percent.
Speaker 2 (35:19):
Not the index because investors cannot invest in the end.
Speaker 3 (35:22):
Yeah, an index tracking mutual fund or exchange traded fund right.
Induices are designed to be investable, but you can't actually
buy them from MSCI or SNP, Rustle or whomever. A
lot of the so the global market xus now is
up about thirty percent, and a lot of that comes
from the decline of the dollar relative to not all
(35:43):
of it, but a lot of it comes from the
decline of the dollar relative to foreign currencies. So it's
a nice little reminder that a long term investor who's
comfortable with equity risk should look abroad a little bit too.
In most target date funds, which invest in a wide
variety of assets. On your behalf do that for you.
Speaker 2 (36:00):
I got a piece from CNBC thirty one year old
scoops ice cream on the side for sixteen fifteen hour
to make ends meet in this job market. There's zero
shame in it. I guess my question on this is
why is this news? You know? And I look at
it and I think about it, and I remember when
I was a kid growing up, and again, when you're
like seven eight years old, you don't understand how this
(36:20):
stuff works. But I remember that my dad took a
job at a toy retailer one year. And I don't
know exactly how long he was there. My recollection is
it was maybe like six to eighteen months, like something
along those lines. But you know, you get older and like,
you you know, talk to him as you get older,
and like after the fact, it's like, oh, like, yeah,
(36:41):
dadd had lost his job and needed to figure out
how to you know, keep food on the table, and
so he went to work, you know, at a toy
retailer for you know, somewhere in the ballpark of a
year in order to make ends meet, and like my
assumption I guess has been embedded me in me since then,
was yes, like you have to do what you have
to do in order to make ends meat. I don't
I really think that someone, you know, a thirty one
(37:04):
year old scooping ice cream is newsworthy because I guess
I always just viewed it as Okay, if you lose
your job and need to figure out how to pay
the rent, then you go and get another job and
figure out how to pay the rent. And that's kind
of just been an assumption for me. I guess, did you.
Speaker 3 (37:19):
See the story or And I want to bring up
the context because it's not important here. But there's a
story in our stack today about a grown man who's
on food assistance. I don't want to bring up the context.
I don't want to besmirch him. Sure, it's not really
about that, But my first reaction was, Oh, that's too bad.
He's highly educated, can't find a good fit. But why
aren't you working at Target for the holiday season?
Speaker 1 (37:39):
Right?
Speaker 3 (37:39):
Why are you taking food stamps that are intended for
single moms and elderly impoverished and others who can't go
to work who probably want to this is kind of related,
Chuck to the do what you gotta do rutality that
you clearly got from your dad.
Speaker 2 (37:53):
You just kind of have to figure it out. So
I don't think it should be newsworthy that someone's pick
up shifts on the side in order to make ends meet.
Like that's I don't know, Like I still remember when
I graduated from college, Like again, it was like the
middle of the financial crisis, like there weren't really great jobs.
I was like, Okay, what am I gonna do. I've
worked a bunch of sports camps and stuff that summer
(38:14):
in order to make ends meet. And I was fortunate
enough that shortly after the end of the summer, you know,
I started, you know work at you know, a more permanent,
you know job and everything. But yeah, for you know,
six seven months, it was kind of like, all right,
you got to figure it out, Like it's you know,
it is what it is. Let's take a quick break
here for the rest of the day, but we're gonna
(38:35):
be back here to uh continue finishing up the year tomorrow.
Right here on the Financial Exchange
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
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(01:06):
and Mark Vandetti.
Speaker 2 (01:10):
Chuck Mark Tucker with you here and as we are
winding down the final days of twenty twenty five markets
for the very modest pullback today, the SMP is off
twenty nine points about point four percent. The Dow was
off two hundred and seventeen points about point four percent.
Nas deak can pauses off one hundred and fifty five
(01:31):
points about three quarters I'm sorry, two thirds of a percent.
So again, you've got a little bit of a modest
downward move here, but nothing huge, especially in the context
of the fact that O G. I don't know, like
we were at all time highs last week, So you know,
let's not get too excited about this tenure. US Treasury
down one basis point to four point one two four percent,
(01:51):
the Dollar Index up point zero three percent to ninety
seven seven to two five gold here's where you got
some excitement today. Precious medals are I think the technical
word is imploding this after going parabolic up last week.
A good friend of mine who used to work in
the trading business, one said to me, things that go
(02:14):
parabolic up seldom correct by going sideways. That's kind of
what we're seeing here in precious metals just going down
the list. Gold's down four point six percent, silver's down
eight percent, palladiums down sixteen percent, platinums down twelve. So yeah,
like that, that whole bucket is just getting you know,
bopped on the head repeatedly right now, and it's just
(02:36):
kind of not great there. Crude oil West Text Intermediate
up a dollar forty eight a barrel to fifty eight
to twenty two triple A national average for gas prices
continuing to slide though good news on that front, down
another three tenths of ascent to two eighty two and
five tenths. So after spending all year just like bumping
between like three oh five and three twenty a gallon,
(02:57):
we've had some real movement down in the last couple
of weeks as refinery outages have eased in the Midwest,
and so you're at two eighty two and five tenths
of ascent at the moment on the trip A national
average four gas prices. A year ago, we were three
to zero two and half a cent, and so you're down,
you know, about six six and a half percent on
gas prices relative to this time last year. It's always
(03:21):
fun I filled up yesterday. I was like, I was
a little giddy. I was like, ooh, like that that
was nice. I got in and out of here and
under you know, forty uh, I think forty two dollars.
My man, this is this is kind of fun, you know,
not as fun as paying nothing for gas, but uh, hey,
you'll take what you can get. Peace in the bloomy
Berg today. Five reasons to be optimistic about the twenty
(03:43):
twenty six economy. So let's talk about what the reasons
are that are outlined in here first, and I think
that these are ones that we've talked about generally. Uh,
Consumers going to have more money this in the form
of larger tax rebates that are expected kicking off in
you know, February through May foremost filers. So that is
(04:06):
something that is again not in the works, but going
to happen based on the tax code changes that were
made earlier this year. So I think that is you
know a big piece. Businesses also going to have more
money to spend through some additional depreciation that they can
go through and that'll you know, hopefully boost capex as
(04:29):
we get into next year. The other ones in here
I think are not ones that I would classify as
certain by any means. The first one here, interest rates
will be lower. I don't know how you can say
that with any kind of confidence. The Fed may decide
(04:51):
to move short term interest rates lower. There is no
guarantee that moves longer term interest rates lower, as we've
seen the last two years. By the way, the FED
is embarked in cutting cycles each of the last two falls,
and you have not seen long term rates move down.
So I don't think those facts are in evidence. Next one,
energy could be cheaper, well, couldn't. I mean it could be.
(05:14):
It was this year, and like that's a big boost
for all of us who don't work in the oil industry.
But I don't know if energy is going to be
cheaper next year, do you. I do not. No, So
like it's it's a maybe, But I don't know how
you can say that one definitively. And there will be
more certainty on tariffs maybe, But again I don't know
(05:36):
how you can say that definitively, given how the tariffs
have evolved over the entirety of the course of this
calendar year.
Speaker 3 (05:42):
Yeah, I mean, all these facts could be true. There
are facts, all of these two of them are yeah, Okay,
all these things could be true. The economy could still
dip into recession. You just don't know. At the safest bet,
Like with respect to stocks that we talked about in
the last hour, most of the time the economy grew,
and it's not a coincidence that most of the time.
When I say most of the time, I mean most
(06:03):
calendar years, not coincidentally. Stocks go up most of the
time because they're tied to economic growth. So safe bet
would be, yeah, the economy is going to grow at about
its trend rate next year.
Speaker 2 (06:12):
If you want to look for other areas where you
can be optimistic, like are the things that again may happen,
but are are not certain to the two that I
would look at are housing and the labor market. Housing,
what do you want to see? You want to see
a higher volume of transactions happening, because even if you
are seeing builders being pressured by lower pricing throughout the
(06:36):
southern and western part of the country, transaction volume can
help degenerate more activity even in the absence of constructions.
Not quite the same. Again, there's a lot more activity
that happens building a four hundred thousand dollars house than
selling one. But even when you sell a four hundred
thousand dollars house, think of what happens in terms of
the equity that's unlocked there, assuming that you pay regular
(06:56):
broker commissions, you know, call it five percent, twenty thousand
dollars of that equity goes out to the brokers to
go and spend in their local communities. Then you might
be hiring movers. Maybe that costs, you know, whether it's
you know, small movement's you know, eight hundred bucks, whether
it's a big move and it's five thousand bucks. Hey,
that's money that's going out to support, you know, businesses
(07:17):
in the local community. You might be doing remodeling. That
helps contractors that aren't building new homes, but they can
still you know, do the remodeling work. You might be
doing landscaping, You might be buying new furniture, all that stuff.
So higher volumes can make up for some of the
dip in activity related to construction. And so I think
(07:37):
that's somewhere that you can potentially be optimistic because higher inventories,
which we have now relative to a year ago, tend
to lead to hire transaction volumes. Inventory leads sales other things.
Consumer spending has not fallen off a cliff. In fact,
it's been remarkably consistent this year, generally running about four
to six percent growth year over year. The labor market
(08:00):
doesn't fall apart unless demand does, and so as long
as consumers keep spending four to six percent more than
the prior year, it makes it harder for that labor
market to fall off a cliff. That's optimistic, right, like
taking the bad things off the table is optimistic? Am
I wrong?
Speaker 1 (08:19):
No?
Speaker 3 (08:20):
I think again. A safe assumption is that the economy
will do next year more or less what it did
this year. Big discontinuities going from reasonably strong growth, which
we've had the past couple of quarters, to negative growth
those absent big shocks, which are of course unpredictable, so
that's not a very helpful qualifier. Absent big shocks, the
(08:41):
economy tends to continue to do what it's been doing.
A good predictor of next quarters, say GDP growth, which
is the most widely cited measure of this state of
the economy. Best predictor is the past quarters growth. You
could put the term spread in there and maybe improve
your model a little bit. If you're into that type
of thing, but for most of us us just look
at what the economy has been doing. Assume it'll continue
(09:02):
to do that unless something hits it and throws it
off track. That's not a very helpful guideline, but it
is a reasonably good forecasting rule.
Speaker 2 (09:14):
Just take a quick break here. When we return, we're
going to do a little bit of trivia and then
we're talking Michael Burray after this.
Speaker 1 (09:22):
Tekst us six one seven, three six two thirteen eighty
five with your comments and questions about today's show, and
let us know what you think about the stories we
are covering. This is the Financial Exchange Radio Network.
Speaker 4 (09:35):
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dot Boston. Time for trivia here on the Financial Exchange
and on this day. In eighteen forty five, Texas was
(11:09):
admitted as the twenty eighth state of the United States.
One year later, the twenty ninth state was admitted to
the country. So trivia question today, what was the twenty
ninth state admitted to the US? Hint, it's in the Midwest.
Once again, what was the twenty ninth state admitted to
(11:29):
the US? Be the second person today? It texts us
at six one seven three six to two thirteen eighty
five with the correct answer along with the keyword trivia,
and you win a Financial Exchange Show T shirt. Once again,
the second correct response to text us to the number
six one seven three six two thirteen eighty five with
(11:50):
the correct answer along with the keyword trivia, will win
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (11:58):
Here's to Wall Street journal Michael Burry bets that he
isn't too early to go against the AI juggernaut. Should
other humans care? Look here, here's the thing, Burry. Smart
dude made more money in a single year than Olliver
making my lifetime at one point. Uh. I just I
don't know why we have to document his every move.
(12:23):
It's not like he's always right. Uh, It's not like
he is, you know, consistently someone who accurately predicts market movements.
He had one monster bet that paid out in his favor,
by the way, after like three or four years leading
up to that, where his hedge fund was hemorrhaging investors
(12:44):
because his bets weren't paying off. And so I don't
know why he really gets lionized as you know, some
kind of you know, read on exactly what's gonna happen
in the market other than people know the name. But
because you know his character is used in the big short.
Speaker 3 (13:03):
Yeah, I don't none of this is helpful to an
individual investor. I don't think he's not really an investory
speculating and investor puts their capital in a long and
a generative asset for the long term. It's what we
do in our day jobs. It's what pension funds do.
It's what you do if you have a four oh
one K and you're in a target date fund that
reallocates automatically as you age and rebalances automatically to keep
(13:25):
your mix in line with your goals. That's how most
people should approach investing. Are stock's expensive, Well, objectively, yes,
they are. By expensive, we mean is their price high
relative to past twelve months earnings or a longer period
of earnings? If you like one of those smooth measures.
Stocks are undeniably very expensive, and historically that's portended low returns.
(13:48):
Just like when any asset gets too expensive, your yield
goes down because it's the reciprocal of that you flip it.
So stocks are objectively expensive. Does that mean they're going
to crash?
Speaker 2 (13:58):
No?
Speaker 3 (13:59):
Could earn a growth speed up because of all of
this artificial intelligence investment that should make its way into productivity.
Maybe it did last quarter when unemployment went up and
growth went up, very unusual coincidence there. We don't know.
Should we be betting against individual companies the way he is?
It's alluring because these companies seem to be pricing in
(14:23):
ridiculously high levels of growth, But who knows?
Speaker 2 (14:26):
Yeah, And so again I just I don't. I don't
get needing to follow like famous investors every moves. I
just it doesn't do it for me.
Speaker 3 (14:40):
But the stock market would be boring without that, is it?
I mean? The target date? I mean for most of
us as investors, though, who use a target date fund
or something like it. You're supposed to set it, forget it,
and then you know, thirty years you start to cash out.
And historically that's work. That That's what I mean.
Speaker 2 (14:57):
That's pretty exciting to me.
Speaker 3 (14:58):
Yeah it is. But it's like wh watching paint dry,
which after I like that too. You just like the smell,
you just like the no.
Speaker 2 (15:06):
No, I enjoy watching it. There actually is something cool
about watching it dry, like if you ever actually watched paint.
Speaker 3 (15:13):
Dry, no, like a time lapse film or no.
Speaker 2 (15:16):
So honestly, like I've painted like a decent number of
rooms like it at one point or another in my life.
And the cool thing about it is like, quite honestly,
it dries a different color than when you done, and
I don't know, I find the whole pro.
Speaker 3 (15:30):
The only reason I'm interested is because I want to
know when I could put the second coat on and
get on with my.
Speaker 2 (15:34):
I do that too. Yeah, I love painting personally, Like
there's just something very zen about it. It's just like
as long as you have time, it's just okay.
Speaker 3 (15:42):
I'm just it's like most people would consider that to
be after a while sort of boring, and investing should
be boring too. You put in your you make your deferral.
Every couple of weeks, stocks do hopefully what they've done
historically going forward and I don't mean the same percentage return.
I just mean grow with the economy. That could be
five percent going forward, it could be six seven eight,
it'll probably be more than bonds. The whole industry of
(16:04):
financial services kind of founded on that proposition. If that
doesn't work out over a very long period of time,
we're in trouble. But the Burry infatuation, like the Peter
Lynchin infatuation, the Warren Buffett infatuation, they make what would
otherwise be watching paint dry a little sexier. Maybe that's
sort of my theory. Otherwise most of us can't.
Speaker 2 (16:24):
You don't think the market's like exciting without not pets.
Speaker 3 (16:27):
I just see numbers move, I see rates, and no,
I don't.
Speaker 2 (16:31):
I don't. It doesn't interesting.
Speaker 3 (16:32):
Well like exciting. It's good to make it's good to
be a successful long term, to be a discipline, not
successful because we're all just along for the ride. But
I know I don't think that day. I don't find
the day to day movements. I find them interesting sometimes,
like oh wow, that that's an anomaly, that's the frequency
of that is small historically.
Speaker 2 (16:48):
That's the stuff I mean Like, I mean, okay, then
how can you get this year in markets and say
like it hasn't been exciting. We've seen some stuff this year,
you know. No, I don't need like Michael Burry saying
like a eyes a bubble to feel like we've seen
some stuff this year. I mean, we had like one
of the fastest twenty percent draw downs in history in
(17:09):
March and April. Yeah, and then we had an unprecedented
run of a lack of volatility in the six months
after that, like one of the calmest six month market
periods in history. After that, even just in the last
couple of weeks, you saw precious metals go parabolic up
and now they're you know, kind of going parabolic down. Yeah,
(17:29):
Like there's some wild stuff that's happening.
Speaker 3 (17:31):
I never know what to make of that, which is
why I I get a little less excited maybe than
I should, given that, you know, my job depends on it.
Speaker 2 (17:40):
Maybe it's better that you don't get excited. Possibly, you know,
it's like you don't want the surgeon get it being like, oh,
look at this, like you just want to do that's
a big tummer.
Speaker 3 (17:49):
You just wanted to be like, sorry, that's a tasteless.
Speaker 2 (17:52):
You just wanted to be like, oh, like, let me
go do my job.
Speaker 3 (17:55):
Although probably does think that. They just they just don't
convey it like, wow, that's that's that that's in really
bad shape.
Speaker 2 (18:02):
Well, right, even as I talk about like, hey, this
market's exciting, ultimately I look at it and I say, okay,
this is what you want to do in conditions X,
Y and Z, Like there's a job to do.
Speaker 3 (18:15):
Yeah, I just want eight to ten percent real returns
and call it a day. But that's, as you point
it out, you get instead go away for forty years,
and you know that's my ideal sort of state of existence. Yeah, yeah,
set it forget.
Speaker 2 (18:28):
It sitting on a beach somewhere while the compounding happens
for you.
Speaker 3 (18:32):
Yeah, let it work for you, which is what we
all really do, which is what you do in your
four oh one K. You put your money in every
two week. You don't really think about it.
Speaker 2 (18:39):
Yeah. So that's uh, what we've got going on there.
Be prepared to keep paying more for electricity that sucks.
Speaker 3 (18:49):
Schrigger didn't hit that in her column. She no, this
I know, but yeah, this is an example of.
Speaker 2 (18:56):
So yeah, you've got her average residential electricity rates risen
four point nine percent this year according to the EU.
The data from the CPI I think is a touch
hotter than that. I think it's closer to like six
percent year over year. And doo. We expects that electricity
rates are gonna rise another four percent next year, but
no one has any idea because you unless you know
(19:19):
how much of the input commodities are gonna cost, you
don't know how much electricity rates are gonna go up. Yeah.
Speaker 3 (19:26):
The demand component is another variable, maybe a little less
harder to forecast.
Speaker 2 (19:30):
Yeah, I mean again, aside from the data centerpiece, everything
else moves pretty predictably because we only build out so
much capacity each year. We only have the population grow
so much each year. There's only so many homes built
each year. You can predict the demand I think pretty easily,
just because it doesn't wiggle too much. The supply thing
is where I think the questions are, and unfortunately that's
(19:52):
gonna be where they continue to be. Just take a
quick break. When we come back, we get the trivia
answer and Wall Street Watch.
Speaker 1 (19:57):
Next, bringing the latest financial news straight.
Speaker 2 (20:10):
To your radio.
Speaker 1 (20:12):
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street Watch a complete
look at what's moving markets so far today right here
on the Financial Exchange Radio Network.
Speaker 5 (20:26):
Well, the final trading week of twenty twenty five is
upon US, and markets are pulling back slightly. Is investors
away to small batch of economic data points do out
this shortened week, including FED meeting minutes and jobless claims.
We saw pending home sales posted earlier this morning. Right now,
the Dow is down about a half a percent or
(20:48):
two hundred and twenty seven points, s and P five
hundred down nearly half a percent or thirty points lowered,
Nasdaq down by six tenths of a percent or one
hundred and forty six points. Russell one thousand is down
two thirds of a percent, Tenure Treasury yield down one
basis point at four point one one six percent, and
crude oil up about two and a half percent, trading
(21:10):
just above fifty eight dollars a barrel. Japan SoftBank agreed
to buy data center investment firm digital Bridge for four
billion dollars as part of its artificial intelligence push. Shares
in digital Bridge are up over nine percent. Meanwhile, in
video shares it down almost two percent. On the heels
of news from last week that the Chip and AI
(21:32):
Giant agreed to buy assets from Groc for twenty billion
dollars in cash. Grock is a nine year old chip
startup that designs high performance AI chips. The deal marks
and Vidia's largest purchase ever. Elsewhere, the Wall Street Journal
is reporting that Lululemon founder Chip Wilson is launching a
proxy fight at the athletic apparel retailer in an effort
(21:53):
to remake the company's board as the company searches for
a new CEO. Lulu stock is up nearly one percent,
and Disney's Avatar Fire and Ash retain the number one
spot in the domestic box office for a second straight weekend.
Avatar in Disney's Zootopia two were the two top performing
movies by worldwide ticket sales. Disney shares edging higher so
(22:16):
far today. I'm Tucker Silva and that is Wall Street Watching.
On the previous segment, we asked you the trivia question,
what was the twenty ninth state admitted to the US.
That would be Iowa. Chris from Melrose, Mass is our
winner today, taking home a Financial Exchange Show T shirt.
Congrats to Chris. We played trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
(22:40):
show dot com.
Speaker 2 (22:41):
Can we just talk about that Avatar movie briefly?
Speaker 5 (22:45):
Are you an Avatar guy?
Speaker 2 (22:47):
No, No, I'm not either. I'm not. I saw the
first one, and quite honestly, I saw the first one
I think twice in theaters just because at the time
I was like, like, just like the visuals were mind blowing.
I was like, this is just like really cool.
Speaker 5 (23:00):
And yeah, I haven't seen one second of any of that.
Speaker 2 (23:02):
Frit Like, I haven't seen either of the next two.
And I think that that's how basically most people are
in the United States. Because here's the really interesting thing
is when you look at the data on these three movies. Uh,
the first one came out in two thousand and nine.
The gross that it brought in worldwide was like two
(23:24):
point nine billion dollars, which is just an insane amount
of money, especially in two thousand and nine dollars. Remember,
like that's you know, quite a bit of inflation to go.
The second one brought in two point three billion, and
about seven hundred of that was domestic. The first one
about eight hundred of that was domestic. This one right
now has not yet been you know, fully released internationally,
(23:46):
but it's tracking about the same, about twenty eight percent
domestic two hundred million so far, five hundred and forty
million international, So the thing's done seven hundred and sixty
million dollars worldwide at this point. And this is why, Like,
despite people in the US kind of being like James Cameron,
like what are you doing? Like why do you keep
releasing these movies? Like we're just not like as interested
(24:10):
as we used to be, The fact is the international
box office is what it's all about for these you know,
even even if this movie costs, you know, several hundred
million dollars to make, when it ends up grossing one
point six to two billion dollars worldwide, okay, Like yeah,
(24:30):
they're going to be perfectly fine letting James Cameron do
whatever he wants to do as long as he keeps
printing two billion dollars for them. So I know that.
Like I look at this and I'm like, man, it's
a three hour and seventeen minute movie that I just
like am not interested in seeing. And I get it,
Like that's kind of what the data is showing domestically,
(24:53):
but worldwide it's still going to turn out you know,
one and a half billion dollars in international revenue, and
they'll be perfectly high to keep, you know, underrating whatever
James Cameron wants to do for you know, the remainder
of his career.
Speaker 3 (25:05):
It's a little bit of a paradox. It's like this
movie nobody's ever seen it, and people that nobody's nobody's
seen it, and those that have seen it, you know,
some rave but most.
Speaker 2 (25:15):
I have a couple of friends who have like they
got dragged, like a friend or family member, and they're
kind of like, yeah, yeah, so that's what I mean.
Speaker 3 (25:21):
But it's it's both something nobody's seen and those who
have seen. I'm contradicting myself a little bit there, but
those who have seen were not particularly moved by it.
Also wildly successful. It's like some of these podcasts.
Speaker 2 (25:32):
Put on and nobody goes there anymore.
Speaker 3 (25:34):
There you go exactly. So it's it's one of those
types of paradoxes. It's like these wildly successful podcasters Joe
Rogan or whomever, nobody listens to him or very few do,
proportionally speaking, wildly successful, paid hundreds of millions of dollars
a year. It shows the power of digital media and
(25:55):
modern distribution channels. For I'll just say art, it's expanded
the audience by billions in the case of movies and
podcasters too of people.
Speaker 2 (26:04):
The wild thing about James Cameron is like, just if
you look at his career and what he's done, he
basically almost never releases anything, but when he does, it's
usually something pretty important. Like you gotta like go through
the list, and like, his first couple things were again
(26:24):
I've never seen them, so I don't know anything about them.
But his first thing was a film called Xenogenesis back
in nineteen seventy eight. Have either of you heard of it? No,
I haven't. Then he finally got big and eighty fourth Terminator,
like revolutionary movie that like changed basically like along with Diehard,
(26:45):
basically changed how action movies are made. Comes out you
know the next year again for actually, no, he didn't
direct Rambo First Blood that was I think he was
just a producer on it and maybe a writer. Then
he comes out two years later with Aliens, the sequel
to Alien like wasn't even his own original ip, but
gets pulled in for the second one. There takes a
(27:08):
few years off, does the ABYSS, spends a bunch of
time like working on the technology to be able to
make it. The reason Adobe Photoshop exists today is because
James Cameron had to literally make the technology in order
to be able to get like the visual effects he
wanted in the ABYSS into the ABYSS.
Speaker 3 (27:27):
I guess it was worth it, you know.
Speaker 2 (27:29):
Then Terminator two, Judgment Day True Lies, and then comes
out with Titanic, So he basically is like six seven
movies over like twenty five years, like doesn't produce a
ton then goes and takes I think twelve years off
between Titanic and Avatar, not off, but like he's working
on it. He's working on it, and then just has
done three Avatar movies in the last sixteen years. So, like,
(27:52):
the thing about James Cameron is, aside from a couple
of these movies that like completely changed the game, you like,
the rest of his career kind of like like it's
kind of forgettable, but like every ten years or so
he does something that completely pushes the technology and the
genre forward, which I think is just kind of interesting, folks.
The Armstrong Advisory Group has a guide available this month.
(28:16):
It's titled Retirement Planning for Spouses And this gets at
some of the plan and considerations. If you happen to
be married and there's only a couple days left in
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you to request this guide, but it goes through questions
about Social Security claiming and coordination of those benefits. How
(28:38):
do you address healthcare for both spouses, especially if there's
an age difference at retirement. How do you make sure
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and more is in this guide titled Retirement Planning for
(28:59):
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They know, to be honest, no one does anything on
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(29:20):
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or by calling eight hundred three nine three for zero
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Speaker 1 (29:40):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (29:55):
Piece in the Wall Street Journal Tech that will change
your life in twenty twenty six. What sounds exciting to you?
And here Mark robots.
Speaker 3 (30:04):
I'm thrilled with the idea because I'm in my fifties
thinking about how will i live. A lot of people,
I suppose, as they reach middle age and realize you
can't do what you used to do. Wonder when I'm
interested in robots. Not so that I could play chess
with them, or so they can fold shirts, but just
carry something heavy up the stairs, help me shovel the drive.
(30:24):
This doesn't have to be particularly bright robot, just capable
of doing grunt work, sure, and I wonder dis Yeah,
screw doing the dishes. I mean, any even a frail,
feeble person can.
Speaker 2 (30:35):
God did so many dishes yesterday.
Speaker 3 (30:38):
Yeah, but wouldn't you agree that doing the dishes is
probably not top five things I need to do to
continue to live independently. But taking the shopping up the
stairs or out of the car, this is gruntwork. I
don't need a sophisticated robot that can quote Hamlet Act two,
Scene three while playing Connect four and walking my dog
and all this stuff that engineers think is on there.
Speaker 2 (30:57):
You don't want a companion through the road.
Speaker 3 (31:00):
Buy me a companion a robot, Yes, but I do
need something to front me. I want I want to
carry a ninety pound bag of cement?
Speaker 2 (31:08):
Why ninety Why stop there?
Speaker 3 (31:09):
That's the quantity. I think that's a standard quint at.
Speaker 2 (31:11):
What about three ninety pound bags.
Speaker 3 (31:13):
I don't want a robot quite that strong, because you
don't want to hurt you. But I think well, and
it will eventually get annoyed with me and try to
break my neck.
Speaker 2 (31:21):
So, Mark, you have asked me that for the last time.
I'm stop asking me how fast GDP is growing? Mark,
I'm not interested.
Speaker 3 (31:31):
I don't even need it to talk, but I needed
to carry stuff, including you know, me, up the stairs
at some point. I sure imagine if your back goes
and you can't make it up the stairs. So related issue,
are we aiming too high with AI infused robots?
Speaker 2 (31:49):
Do I think we are?
Speaker 3 (31:50):
Yeah? No, you've heard about what they are apparently struggling with,
Like this robot can't gift wrap a package. Well the
hell I can gift wrap a package, and hopefully I'll
be able to do that even if I only have
a couple of working fingers. But I can't carry the
laundry basket or the package up the stairs.
Speaker 2 (32:05):
I think that we are. I think the average person
is dramatically underestimating what robots are going to be able
to do in the next three to five years. Not overestimating,
I think most because I think most people like hear
the stuff about like, oh, like you can't even do this.
It can't even this is like for generation stuff, you know,
like the Ford Model T couldn't do a lot of
things either.
Speaker 3 (32:26):
Yeah, right, and you know, where's the sunroof?
Speaker 1 (32:29):
You know?
Speaker 3 (32:29):
And actually they did have a great sunroof.
Speaker 2 (32:31):
It did roof, you know, but like there were some
real problems. You were the first cars, and then you
give it though, so were the first robots.
Speaker 3 (32:39):
Yeah right, you know it's are we asking too much
of of of so called humanoid personal assistant type robots?
Speaker 2 (32:45):
No, if you want my prediction, I think we are over.
Here's where I'll land. Actually, I think we're overestimating what
large language models are going to be able to do
five years from now relative to robots. I think we're
going to actually find that five years from now there's
more progression on robots that can do physical things than
ones that can do ver rates advocating.
Speaker 3 (33:09):
That's what I'm hoping for.
Speaker 2 (33:10):
Because I think we're getting towards the commoditization and the
limits of the transformer based large language model, and I
don't think we're anywhere near that on robots that can
actually pick things up.
Speaker 3 (33:23):
That's all I needed to hear.
Speaker 2 (33:24):
That's where I think we're going. Quick break here, when
we come up, we got come back, We got stack Roulette.
Speaker 1 (33:29):
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.
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(33:51):
streams live on YouTube. Subscribe to our page and stay
up to date on breaking business news all morning long
Face is the Financial Exchange Radio at work.
Speaker 5 (34:05):
This segment of The Financial Exchange is brought to you
by the US Virgin Islands to permit of tourism. There's
still time to book your holiday vacation to Saint Croix,
Saint Thomas or Saint John. Enjoy one or all three.
N f you act fast, you could be in Saint
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(34:26):
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Speaker 2 (34:37):
Playing your winter.
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Escape now at visit USVII dot com. That's visit USVII
dot com.
Speaker 2 (34:43):
What you got for me?
Speaker 3 (34:44):
Mark Financial Times makes a good argument for diversification, not
just domestically, but considering the global opportunity set. The headline
from The Times, US stocks eclipsed by rest of world
in twenty twenty five, a little bit jarring at first.
Stocks are up nearly twenty percent, is measured by the
S and P five hundred index, but not as much
as international stock indices. The Financial Times points out that
(35:08):
the All Country World Index, maintained by Morgan Stanley Capital,
the MSCI All Country World Index, you may have this
option in your four one K plant, so that might
kind of ring a bell, is up about thirty percent.
Speaker 2 (35:19):
Not the index because investors cannot invest in the end.
Speaker 3 (35:22):
Yeah, an index tracking mutual fund or exchange traded fund right.
Induices are designed to be investable, but you can't actually
buy them from MSCI or SNP, Rustle or whomever. A
lot of the so the global market xus now is
up about thirty percent, and a lot of that comes
from the decline of the dollar relative to not all
(35:43):
of it, but a lot of it comes from the
decline of the dollar relative to foreign currencies. So it's
a nice little reminder that a long term investor who's
comfortable with equity risk should look abroad a little bit too.
In most target date funds, which invest in a wide
variety of assets. On your behalf do that for you.
Speaker 2 (36:00):
I got a piece from CNBC thirty one year old
scoops ice cream on the side for sixteen fifteen hour
to make ends meet in this job market. There's zero
shame in it. I guess my question on this is
why is this news? You know? And I look at
it and I think about it, and I remember when
I was a kid growing up, and again, when you're
like seven eight years old, you don't understand how this
(36:20):
stuff works. But I remember that my dad took a
job at a toy retailer one year. And I don't
know exactly how long he was there. My recollection is
it was maybe like six to eighteen months, like something
along those lines. But you know, you get older and like,
you you know, talk to him as you get older,
and like after the fact, it's like, oh, like, yeah,
(36:41):
dadd had lost his job and needed to figure out
how to you know, keep food on the table, and
so he went to work, you know, at a toy
retailer for you know, somewhere in the ballpark of a
year in order to make ends meet, and like my
assumption I guess has been embedded me in me since then,
was yes, like you have to do what you have
to do in order to make ends meat. I don't
I really think that someone, you know, a thirty one
(37:04):
year old scooping ice cream is newsworthy because I guess
I always just viewed it as Okay, if you lose
your job and need to figure out how to pay
the rent, then you go and get another job and
figure out how to pay the rent. And that's kind
of just been an assumption for me. I guess, did you.
Speaker 3 (37:19):
See the story or And I want to bring up
the context because it's not important here. But there's a
story in our stack today about a grown man who's
on food assistance. I don't want to bring up the context.
I don't want to besmirch him. Sure, it's not really
about that, But my first reaction was, Oh, that's too bad.
He's highly educated, can't find a good fit. But why
aren't you working at Target for the holiday season?
Speaker 1 (37:39):
Right?
Speaker 3 (37:39):
Why are you taking food stamps that are intended for
single moms and elderly impoverished and others who can't go
to work who probably want to this is kind of related,
Chuck to the do what you gotta do rutality that
you clearly got from your dad.
Speaker 2 (37:53):
You just kind of have to figure it out. So
I don't think it should be newsworthy that someone's pick
up shifts on the side in order to make ends meet.
Like that's I don't know, Like I still remember when
I graduated from college, Like again, it was like the
middle of the financial crisis, like there weren't really great jobs.
I was like, Okay, what am I gonna do. I've
worked a bunch of sports camps and stuff that summer
(38:14):
in order to make ends meet. And I was fortunate
enough that shortly after the end of the summer, you know,
I started, you know work at you know, a more permanent,
you know job and everything. But yeah, for you know,
six seven months, it was kind of like, all right,
you got to figure it out, Like it's you know,
it is what it is. Let's take a quick break
here for the rest of the day, but we're gonna
(38:35):
be back here to uh continue finishing up the year tomorrow.
Right here on the Financial Exchange
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