February 5, 2026 • 38 mins
Chuck Zodda and Mike Armstrong dissect a violent tech-led selloff as the Nasdaq slides toward correction territory, commodities swing wildly, and investors confront the fallout from leverage and AI-era speculation. The hour also covers skepticism around Fed nominee Kevin Warsh, how workers should realistically adapt to AI disruption, retirement portfolio risk management in volatile markets, and why Peloton’s collapse is a warning about hype-driven business models.
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Episode Transcript
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Speaker 1 (00:01):
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(00:43):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike and Tuckle with you here on a Thursday
busy one UH tech sector is in the process of
melting down at the moment and dragging the rest of
the market with it. We've got the S and P
five hundred down about one point three percent, same with
the Dow NASDAK composite down about one point seventy five percent.
(01:33):
And by the way, the NASDAK composite, if we take
a look at it now, actually I will get the
Nasdaq one hundred just because it's more concentrated with like
your your big tech names. NASDAKA one hundred is now
at twenty four four forty nine UH and reached a
peak previously of about twenty six two hundred. That means
(01:54):
that the NASDAKA one hundred is now almost seven percent
off UH. It's it's high. So you're getting close to
correction territory on the Nasdaq. Which if you're like a
lot of you know, small investors who have gotten into
the markets in the last couple of years, you might
be particularly concentrated in some of these companies, and so
you might be sitting there being like Chuck, it's way
worse than that, And yes, I get it if you're
(02:17):
you know, in a lot of these tech names that
have been leading markets to the upside for the last
couple of years, the last month or two, they've been
kind of leading to the downside. And so it's it's tough.
It's never fun going through these types of pullbacks here.
And this is obviously, you know, a challenging situation to
try to navigate the S and P as a whole,
(02:38):
which is more broadly diversified a little bit more than
three percent off. It's all time high, so not too
much damage there yet, but tech is is in a
pretty nasty spot. I mean, you look at some of
these names, and you know, Microsoft is trading around four
hundred bucks a share right now. It was at five
point fifty two, so you're talking, you know, more than
twenty five percent off. It's high. If you're an in
(03:00):
vidio person in video goup to two twelve, it's at
one seventy two now it's almost you know, twenty percent off,
it's high. Uh. If you're more of a metaperson, hey,
I love the zuck you know, that's kind of your thing.
It was at seven ninety five it's at six sixty
six right now, almost twenty percent off. It's high. So
there's a lot of pain out there in big names.
And if you're looking at your portfolio that happens to
(03:23):
be concentrated in these and you're not feeling too good
about yourselves, just know that every investor in history, whether
it is you, Warren Buffett and me, the person sitting
next to you, whoever it might be, they've all gone
through times when things didn't work. And it doesn't mean
that they'll never work again, but it does mean if
you're uncomfortable with the amount of draw down in your portfolio,
(03:43):
think about how you might want to, you know, manage
the level of risk in the future. You don't need
to do anything drastic today, but you know, think about Hey,
if you if you're if you're thinking about selling when
everything's going down, it probably means that you shouldn't have
been buying as much when everything was going up. Good take.
That's it where I tend to land on that. Uh,
talking about other things moving in markets, tenure, Treasury catching
(04:06):
a bid on a little bit of weaker jobs data
that I'm still not sure that I completely buy. The
Joltz Report job openings report came out this morning with
a big drop in the number of job openings. It
doesn't mesh with what indeed is telling us as far
as their job openings numbers, and normally there's pretty coose
alignment on those, so I'm taking it with a grain
of salt. But the tenure Treasury down six point eight
(04:28):
basis points to four point two one percent, Dollar Index
is up zero point two three percent to ninety seven
seven one five, and we've got gold off about one
hundred and seventeen bucks ounce to forty eight thirty three.
Crude oil down two fifteen barrel to sixty two ninety nine,
triple a national average. For gas prices though up another
(04:49):
four tenths per gallon to two eighty nine and one tenth.
Speaker 3 (04:55):
I just want to point out, Jack, you quoted a
bunch of these numbers already, but there is no area
of the market that is not pretty volatile right now.
Oil price is down three percent today, silver price is
down thirteen gold down two and a quarter percent. I
know we've become used to those types of moves in
those commodities, but they are abnormal. Crypto markets bitcoins down
nine percent, crashing through the sixty seven thousand dollars per
(05:16):
coin threshold. Remember it is where were we at the
peak hundred and twenty twenty five. You've got obviously US
stocks selling off even in the bond market, treasury market
yield and tenure treasury moving down seven basis points. Those
are all fairly big, substantial swings in pretty much every
area of the market that we are seeing right now.
Speaker 4 (05:36):
So it feels volatile.
Speaker 2 (05:37):
It should, and quite honestly, here's here's the problem in
markets that I think is going to take some time
to resolve. Like I'm not sure that Humpty Dumpty is
just like put back together in the next week. I
know that having said that, he will be. But here's
the issue is there was so much mania building in
(05:58):
some of these areas of the market. You know, you
take a look at you know, places like precious metals
and what was going on there. You take a look
at memory chip companies and what was going on there.
There was a lot of nutty stuff. And when that
started to unwind, if people were leveraged again you buy
all this stuff in brokerage accounts, then you're forced to,
(06:19):
you know, make margin calls. You start selling other stuff,
and that triggers a whole other wave of selling from
you know, institutional investors that might be you know, running
quant strategies and things like that. There's some pretty nasty
cross currents in this market, and it's gonna take a
little time to sort out. So I know that, having
said that, we'll be sitting here a week from now
and it'll be like, oh, chuck, like, you know, look,
(06:40):
everything's back like S Andp's back to seven thousand. Sure, maybe,
but I'm just saying when things get so violent under
the surface, even though the indices as a whole have
looked calm, it tends to result in some nasty things.
And by the way, again, we'll see where this goes
over the next you know, read to six weeks. But
(07:02):
I've been saying for the last you know, month or
so hey, the last couple of times that anything but
tech has tried to lead this market. We've gone splat,
and we haven't splatted yet because again, three percent on
the S and P is a nothing burger. The dazdac's
getting a little bit dodgy. But let's see how this develops,
because I'm still not convinced see a market moving up
(07:26):
consistently with Verizon, you know, leading with Johnson and Johnson leading.
Those are big, boring companies that don't do anything that
excites markets. And so when I see Verizon report earnings
and now is up nineteen percent since them, I kind
of look at it and I'm like, Okay, like the
jig is up fair, you know, like that doesn't fill
(07:49):
me with like future confidence for markets necessarily.
Speaker 3 (07:53):
Uh.
Speaker 2 (07:53):
Piece in the Financial Times, Kevin Warsh channels Alan Greenspan
and AI productivity bets. So Worsh if you've been living
under a rock is the new FED chair nominee. Uh?
And he's basically talking about, Hey, I think that the
US economy is going to be able to go through
a productivity boom because of AI and other factors that
(08:16):
will make all of the problems that we're seeing today
not really a big deal.
Speaker 3 (08:21):
Actually, does that seem consistent with his viewpoints that he
has thrown out there since two thousand and nine, Chuck, No, okay,
I'm not gonna stand here and say that you can't
change your mind, right, right, we can all change our minds.
But pretty consistently since two thousand and seven or eight,
(08:44):
Kevin Worsh has been talking about how inflation is going
to be a problem and a result of the Fed
expansion that they have used and the bias towards lower
interest rates. And he's been wrong pretty consistently since then,
and never once had a Maya Kolpa like, hey, yeah,
I missed this one, and my vision of this has
all changed. And now all of the sudden, when he's
(09:07):
you know, running for a chair person, he is looking
for or fine, I shouldn't say he's looking for he
has found a sound economic theory to justify lower interest rates.
And I just I'm just suspicious. I'm just a little
bit suspicious. I guess is where I live.
Speaker 5 (09:27):
A little watchistitious.
Speaker 2 (09:29):
Yeah, I'm kind of. I'm more substitious than superstitious personally.
You know, it's just how I roll. Just take a
quick break here. When we return, we'll do a little
bit of trivia and then we'll talk about This is
actually a really good piece in the Wall Street Journal.
It's titled how to Say How to Stay Sane in
(09:49):
the AI Skills Race, and basically talking about, look, what
can the average person do to figure out how to
make AI work for them? I think that's a great question.
And one we'll discuss after this.
Speaker 1 (10:02):
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The Financial Exchange streams live every day on YouTube. Subscribe
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hit that subscribe button. Time for trivia here on the
Financial Exchange, and tomorrow.
Speaker 2 (10:51):
Snuck up on us.
Speaker 5 (10:52):
The twenty fifth Winter Olympics Games kicks off in Milan, Italy.
One hundred and two years ago, the first Winter Olympics
two took place with only nine competition nine. So our
trivia question today which country hosted the first Winter Olympics?
Speaker 2 (11:10):
Once again?
Speaker 5 (11:11):
Which country hosted the first Winter Olympics? Be the third
person today to text us at six, one, seven, three,
six to two thirteen eighty five with correct answer along
with keyword trivia, and you win a Financial Exchange Show
T shirt once again. The third correct response to Texas
to the number six one seven three six two thirteen
(11:31):
eighty five with the correct answer along with the keyword
trivia will win that T shirt. See complete contest rules
at Financial Exchangshow dot com.
Speaker 2 (11:41):
Mike, there's a great piece in the Wall Street Journal today.
It's titled how to Stay Sane in the AI Skills Race,
and it's all about figuring out, Hey, if you are
someone who works in a business that is likely to
be impacted in the next couple of years by artificial intelligence,
how do you make AI tools work for you instead
of becoming a casualty of them. What kind of advice
(12:05):
does it give here?
Speaker 3 (12:05):
Well, the author advises going directly to the tools themselves
and saying, look, this is what I do for a living.
Speaker 4 (12:12):
Help me build a customized training.
Speaker 3 (12:15):
Course to this specific skill set that I'm trying to
adapt to, and then you know, using the tools to
customize it better. Hey, you know, limit it to this
specific subset of type of career path, and you know,
limit to this number of hours. I do have some
questions about I think that's as good a plan as any,
(12:36):
and he points out that, look, when recruiters are going
out there and hiring managers are out there, they really
don't know how much stock to put into an online
certificate from some you know, online education school on AI
tools that may or may not be specific to your
job role. Personally, If I'm thinking about how I think
(12:56):
this goes, I do think ultimately we're not We're probably
not there yet, but I do think ultimately there are
going to be some best in class training tools that
are developed out there, and the course work is going
to be recognized and respected by hiring managers. But we
don't seem to be there right now, and so I
don't have many other tips other than that. I guess
(13:17):
the big one that's important here that he points out
is don't just sit there panic and try and learn
everything about every AI tool that's out there, because don't
need to.
Speaker 2 (13:26):
You have no need to do that.
Speaker 3 (13:28):
You learning how to code using AI is going to
be absolutely worthless if you work in corporate finance.
Speaker 2 (13:35):
I would agree it's something where and look, Mike, you
and I we grew up with the internet, so like
we were seeing it from its first days, and so
our knowledge evolved as it did. This is my opinion,
is the first time that I've seen a technology where
(13:57):
I've looked at it and gone, gee, I don't really
feel native to this. I'm not one hundred percent sure
that I'm using it the best way. And the example
that I'll give is Mike, when you go to search
for something on Google, you don't type in where you know,
show me where I can find this data about blah
(14:17):
blah blah. Now you just say I Apple earnings Q one,
and you know like what to look for there, because like,
you built that skill over time and you kind of
grew with it. Someone who's new to the Internet of
any age doesn't have that, and they looked at it
They're like, how do you know what to type in there?
Speaker 1 (14:35):
Right?
Speaker 2 (14:36):
I kind of feel that way sometimes when talking about
how artificial intelligence programs work. It's like, am I asking
it the right question in order to get the answer
that I want? And so it's a fundamentally different proposition
than search engines. Where search engines it's all keyword sensitive.
Oh you're looking for pictures of chickens, great, here they are, Hey,
(14:56):
you want you know, tips on skiing faster. Here here
are the five websites you don't just type into, you know,
chat GPT tips on skiing. You give it some context. Hey,
I'm a skier that likes to ski on these types
of runs. I like long, you know, cruising turns, and
(15:18):
here's my height and my weight and I'd like to
ski faster. What are some tips for me? And that
you know, you provide it with the context and detail,
and that's how it can be more helpful. But it
takes time to understand, you know, for specific job purposes, Hey,
how do I need to you know, prompt it in
order to get the information that I want? And I
(15:39):
think just spending a little time there can be a
huge help in being able to make it more functional
if you need it to be part of your workday
and skill set.
Speaker 3 (15:50):
Here's what doesn't exist for AI, which again I would
think we eventually get to. But when I was applying
to my first jobs out there and I had my resume.
On that resume, I had under the skill set a
Microsoft Excel certification course that I took sure, meaning I
had to pass an actual course where they teach you
how to write formulas and do all these things, and
(16:10):
I did it in college and it was voluntary, and
I put it on my resume and it applying to
jobs in corporate finance. People asked about it, they said,
what went into the course? I didn't even know they
offered that, And it was an immediate Now, were my
excel skills as good as the people that had been
working at my first job for ten years now laughably behind?
But the mere fact that they were there was an
(16:32):
independent authority that was certifying my skill set went a
long way. And that does not from what I can tell,
There's plenty of places that will offer that certification, but
there isn't one that I think hiring managers can identify
right now and say, oh, that means something. Yeah, And
I would imagine that there's a business model there, and
I would imagine, but right now it doesn't exist, And
(16:53):
so I would be very hesitant. I see advertised all
the time, you know, pay one hundred and fifty dollars
for this online course, you know, this masterclass, and I
would personally be very very skeptical about spending and or
wasting my money on a course that nobody is going
to be able to identify as useful.
Speaker 2 (17:12):
And part of it is just because the technology is
evolving so quickly. When you took that Excel course, you
walked into any white collar job in America and they'd say, great,
I know what Microsoft Excel is. Yeah, but if you
take a course today on you know, prompting, you know
caud code, Well, what if calud code doesn't exist two
years from now, right like or what if it's completely different?
(17:36):
Like how do you know you don't even know what
it's gonna look like by the time you're ready to
use it. Uh So, I thought that was again just
a good piece just to talk about these things. Piece
of the Financial times. The treasury market is trading treading
in dangerous waters, which which waters Michael.
Speaker 3 (17:53):
That we if Kevin wortsh is going to kind of
change up some of the things in the Fed specifically
he's talked in the past about the size of the
Treasury balance sheet at the Federal Reserve and all of
those pieces that it might cause some alarm bells, but
not alarm bells that we haven't dealt with in the like.
(18:14):
These wouldn't be things that we haven't had to deal
with in the past. When was the kind of mini
blow up that the Treasury that the FED had to
deal with it. I want to say it was was
that pre COVID when they had to backstop some of
the very short term lending markets.
Speaker 2 (18:31):
Which one are we talking like what I mean? There's
been a few of these times. I mean remember QI
was like that for a decade.
Speaker 3 (18:37):
Yeah, So I guess the point is, Hey, they're trying
to make a point that if things slow down and
they try to run off a balance sheet, you could
create a bunch of problems, which is always the case,
and we know the solution to that, which is why
I don't think there's going to be a massive reduction
of what the FED does.
Speaker 2 (18:54):
Yeah, I think that's fair. Uh. Taking a look at
markets as we head towards the bottom of the hour,
trying to stage a bit of a rally here, the
down S and p A is still down one percent, respectively,
but not down one and a half percent anymore. The
Nasdaq also now down about one percent instead of one
and three quarters percent, So you've had a little bit
(19:15):
of a bounce in the last half hour. Don't know
if it has legs or if it doesn't, but you
do have a little bit of a bounce that is
happening here, and we'll see if it turns into a
bigger bounce. First, we're going to take a quick break.
When we come back, we've got the trivia answer, We've
got Wall Street Watch, and then we're talking about retirement
portfolios in this market.
Speaker 6 (19:40):
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.
Speaker 1 (19:53):
A complete look at what's moving market so far today
right here on the Financial Exchange Radio Network.
Speaker 5 (20:00):
Continuing for third straight session as investors continue to show
concern around tech stocks. Wall Street's also reacting to slightly
higher than expected jobless claims data and software than expected
job openings data for the month of December. Right now,
the Dow is down exactly one percent, or four hundred
and ninety four points, SMP five hundred down eight tenths
(20:22):
of a percent of fifty six points, Nasdaq down eight
tenths of a percent or one hundred and eighty five
points lower, so some dip buying out there was worse
about an hour ago. Russell two thousand is down just
over one percent. Tenure Treasure reeled is down six basis
points at four point two one eight percent, and crude
oil down three percent today trading just above sixty three
(20:45):
dollars at barrel. Google Paya company Alphabet reported a jump
in quarterly profit where sales rose eighteen percent in the
fourth quarter of The tech giant also set it plans
to roughly double capital spending this year to develop AI
models and bill data centers. Alphabet stock is down by
three percent. Meanwhile, Qualcom shares are down by seven percent
(21:07):
after the semiconductor company posted disappointing earnings guidance, where blamed
an industry wide shortage of memory supply and price increases Elsewhere,
s day Lauder lifted its adjusted earnings outlook for the year. However,
the beauty company said it still expects a roughly one
hundred billion dollar hit from tariffs as day Laughter shares
(21:27):
are tanking twenty two percent. Rio Tinto said it is
no longer considering a potential merger with glen Core that
would have created the world's largest mining company with a
market value of more than two hundred billion dollars. Rio
shares are flat, while glen Core stock is down by
six percent, and after today's close, all eyes will turn
too Amazon for more big tech earnings. I'm Tucker Silva
(21:51):
and that is Wall Street Watch. On the previous segment,
we asked you the trivia question which country hosted the
first Winter Olympics. Well, that would be France. Norman from Portland,
Maine is our winner today taking on the Financial Exchange
Show t shirt. Congrats to Norman, and we play trivia
every day here in the Financial Exchange See complete contest
rules at Financial Exchange Show dot com.
Speaker 2 (22:14):
I think I would have guessed France. Actually I probably
would have guessed Switzerland. But then again, the guest that
you should make is France because I believe the official
language of the Olympics is French. Like they at least
like give like a lot of the A lot of
the speeches are in French as well, even when the
(22:35):
games aren't there. So I don't know. Isn't it wild
that Lake Pass has hosted them twice?
Speaker 3 (22:42):
It is a pretty uh right, small place, look like
lake plast like it's crete and everything.
Speaker 2 (22:47):
The population is two thousand people.
Speaker 3 (22:50):
Yes, true, but like how many locations across the globe
actually can handle the Winter Olympics reliably? Like I guess
everything over that parallel, I think'd.
Speaker 5 (23:00):
Be great in Boston the Winter Olympics. You know that's awesome. No, everywhere,
no one can drive at all.
Speaker 2 (23:06):
I mean, look if if they held the Winter Olympics
in Beijing, they can hold them anywhere. Yeah, that's fair,
that's true. You know, not no, not here, No, sorry,
I do actually enjoy the twenty thirty ones. There's no
specific location. It's just French Alps. Yeah, so they go,
sir like, yeah, you'll say it, why not? But uh
(23:27):
in any case? Uh, piece in Barns it's a time
of rapid change? How to protect your retirement portfolio. So
let's let's talk about this, Michael, because there's two pieces here. First,
is it a time of rapid change?
Speaker 3 (23:43):
I guess it depends like society. Technologically, I think it
is a time of rapid change, whether or not is
a time of rapid change in the stock market. I
mean it's been a week of rapid change. I'm not
sure that that indicates anything.
Speaker 2 (23:54):
No.
Speaker 4 (23:55):
Technologically, yes, I think it's a time of rapid change.
Speaker 2 (23:58):
How to protect your portfolio? What there's this piece talk
about when it comes to portfolio protection.
Speaker 3 (24:05):
For ties extremely specific and nuanced things that I don't
personally find very useful. I mean one just general thing
she does. The author does address that, Yeah, diversification across
asset classes and global assets can help you avoid specific
(24:27):
market downturns related to specific countries or industries. If you
didn't if you didn't know that in your investing for
retirement in the first place, then you've got a bigger
problem here, and I'm not sure you're going to gain
anything from that. Then she she goes on to speak
about how you know specific dividend ETFs that she has selected,
or international focus funds or different individual companies can really
(24:53):
protect in a downturn. And that's where I get a
little bit lost and hesitant, because I think if the
author had a real track record of picking these things
during downturns, then she wouldn't be writing no offense. I
don't know if you were that good at that, I'm
not sure you would be writing it as an author
for barons. I'm not good enough to do it, and
(25:14):
so I'm not sure that that is going to really
dramatically be a useful thing. What I would say instead,
if you're attempting to protect your retirement portfolio, and that
type of advice overwhelms you like it? Did me start
with something more basic, right, Like, if I'm trying to
think about how it is my retirement portfolio in a
(25:37):
good state of quote protection, I would look at it
personally to me and I would say, okay, here's where
I am today, and let me map out the next
decade if all goes according to plan, how much money
might I need to take out of my retirement portfolio? Sure,
there's my starting point. How much money might need to
come out of the next decade. Obviously, if you're fifty
(25:58):
two versus seventy, those are very different figures. But map
it out and say, okay, this is the number. Okay,
how many Like how much of that ten year expected
withdrawal is invested in something that you consider to be
reliably predictable? And again this is everybody's personal opinion, but
(26:21):
you know, cash CDs loans to the United States government?
Speaker 2 (26:25):
How much of that.
Speaker 3 (26:26):
Ten years that I'm going to need is invested in
something that doesn't deal with the types of swings that
we're dealing with right now, And that to me is
a kind of good starting point. If it's very little
of it, then okay, that might indicate something to you.
If it's that time, you know, it's forty years of
all that stuff is in something that you deem to
(26:47):
be really conservative, then maybe you're going too far in
the other direction. But I think rather than trying to
figure out which author of a news publication is going
to be best at recommending securities to you, which is
not what they do because they can't, then I think
that's a better starting point if I'm trying to assess
just hey, is my portfolio prepared for whatever it.
Speaker 4 (27:10):
Could come next? Is there anything else that you would
look at there?
Speaker 3 (27:13):
Because I found this to not be very helpful for
the average person. In fact, the average person I don't
think would have any idea what to do with this
or how to implement it.
Speaker 2 (27:21):
No, I think kind of looking at it in that
that broader categorization of look financial planning at its core
is about one thing, matching the assets that you have
with the liabilities and when they're due. And so that's
what this looks at is how much money do you
need at specific intervals and do you have a plan
such that the assets that you need sooner aren't exposed
(27:44):
to you know, a five percent draw down in markets
that you know the assets that you need later can
stomach that because you're not touching them until later. So
that's that's what it's all about, is do you have
a plan for I need money X at time y,
and I've put it in Z to accomplish that.
Speaker 3 (28:01):
My worry is that it sure has been tempting to
take that money that we just described, that money that
needs to be allocated towards cash flow in year one
or two, and it's sure been easy and tempting to
grow that a lot faster than what you can get
from a CD.
Speaker 2 (28:20):
It just has.
Speaker 3 (28:21):
Right, it's been a tremendous three years for stock market growth.
It's been a tremendous fifteen years, but in particular the
last three. If you are trying to assess this yourself
and nervous about this market downturn that we've seen, which
again just been the last week or so. I don't
want to overstate what we are seeing right now, but
if you're uncertain about where your portfolio lies and whether
(28:42):
or not it is achieving what you think is your
real objective, please call us an armstrong advisory group. We
have a well thought out set of theories as to
how to apply this to each individual's situation, and it's
not just cookie cutter advice that gets thrown out there.
Give us a ring eight hundred three nine three four
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book a time for us to call you back at
(29:03):
Armstrong Advisory dot com. But that phone number once again,
eight hundred three nine three for zero zero one.
Speaker 1 (29:10):
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Speaker 2 (29:26):
Mike, do we want to talk about executives buying their
stock and whether it's a signal for how the company
will do? Do we want to talk about how hard
it is to retire early when you have kids? Or
do we want to talk about Peloton sales?
Speaker 4 (29:43):
Isn't Peloton the most fun one there?
Speaker 2 (29:45):
It is? Yeah, So here's the deal. Peloton stock has
not been doing very well for sometime now, several years.
It's doing worse today. It's down another twenty five percent,
and this puts it ninety eight percent off its all
time high from early January of twenty one. I see
(30:09):
the way a stock loses ninety nine percent is it
loses ninety eight and then another fifty. So just remember
it can always get worse. And Sam, kids, I'm not
saying it will. I'm just saying that can.
Speaker 3 (30:25):
That's the message that Chuck delivers every Christmas to his family.
Speaker 2 (30:29):
Not happy with this? It could be worse next year.
Here's the deal. Revenue for their Q one they're estimating
to be at six hundred to six hundred and twenty
five million dollars. That's a one percent decline and about
a two percent miss on consensus estimates. The rains for
the fiscal year that ends in June is about a
three percent drop in revenue. And the reason why this
(30:53):
is an issue is they've spent a bunch of money
trying to roll out new like AI powered products and
new devices and this and that, and it clearly isn't
working yet. And the problem that Peloton has is that
it's a business that is, you know, struggling to be
consistently cash flow positive. And if this turnaround doesn't work,
(31:18):
they only have about a billion dollars in cash on hand,
and so it puts them in a dodgy position going forward.
Then so I think, again, this is one that, in
my opinion, someone maybe Apple would be a great fit
to buy them when they get cheap enough. Because if
(31:38):
you're Tim cooksont there, you're like, Okay, the market cap
on Peloton's a couple billion dollars now five years ago
was forty five billion. We're glad we didn't spend that.
But hey, we've got this fitness program that we're trying
to roll out with the Apple Watch and all that.
Wouldn't it be great to take a a premium product,
or at least a premiumly priced product, put it into
(31:59):
that sweet and have it integrate with all that stuff.
Of course it would. But if it's a billion dollars,
if it's two billion dollars today, we'd have to pay
you know, three billion to take it out. Yeah, let's
just wait another year and see if it gets cheaper.
Speaker 3 (32:12):
In the meantime, I'm really hoping that I didn't buy
my wife a really expensive clothes hangar instead of a treadmill,
because I'm starting to get that feeling.
Speaker 2 (32:22):
You never know. I mean, look, here's the thing, It's
not like these devices won't work if the company does
end up going out of business, they just won't have
the programming.
Speaker 4 (32:31):
Right, That's that's my point.
Speaker 3 (32:32):
Yeah, you know, still have a treadmill, but you won't
have any of the other features that you are paying for,
which is the whole reason. But you wouldn't be paying
for them anymore. True, but you paid a pretty big
upfront price.
Speaker 2 (32:44):
That is true. Let's take a quick break here. When
we come back, we'll do a little bit of stack roulette.
Speaker 1 (32:49):
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Speaker 5 (33:27):
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Speaker 2 (34:01):
Mike, what do you got for stack roulette?
Speaker 3 (34:03):
You know. Our conversation about housing, as it usually does,
sparked some interest from listeners. We received three texts, two
of which agreed with us, in one of which disagreed
with us, which honestly, sixty six percent, not about per
perf of the course. I'm pretty happy with that ratio,
But I wanted to talk about one of them that
brought up the idea of corporate ownership of homes. So
(34:26):
the first texture let us know, everything you guys are
saying is obviously incorrect. The only thing that's changed lately
is that corporations are buying private homes at a phenomenal
rate that must come to a grinding halt to fix
this problem. So first things first, corporate ownerships of single
family homes has always been a presence in the market,
and I will acknowledge that, you know, it has grown
(34:47):
as a percentage in the most recent data that we have.
There's some data from Batch Data indicating that the third
quarter of twenty twenty five, investors purchased thirty four percent
of homes. So in that quarter of twenty twenty five. Now,
one piece that I want to draw attention to though
and debate is that these are by and large not
(35:09):
the giant investors out there. The same data broke out
the percentage of ownership in the corporate space by how
many owned homes they own. Ninety two percent of corporate
ownership of single family residences came from those who own
between one and five homes.
Speaker 2 (35:26):
Which also then matches up with the data that's out there.
And this is data that I've seen from a bunch
of different sources. Real Estate News has this. John Byrn's
Research and Consulting has this that generally gets to around
three percent of all homes in the United States are
owned by large corporate landlords basically that then end up
(35:48):
renting those homes out.
Speaker 3 (35:49):
So if you want to ban mom and pop investors
from buying homes, I agree, it may impact prices to
the downside. You may be able to make homes more
afforded by by doing that, But you cannot just go
after the thousand plus homeowner one thousand plus ownership bucket
because it's it's just not big enough. Furthermore, I just
(36:10):
don't know that this is actually today's problem because while
the percentage grew in twenty twenty five, the actual number
of homes purchased by corporate owners was down year over year,
and so the big corporate investors were net sellers of
homes in the most recent quarter.
Speaker 2 (36:26):
Yes, so yeah, I don't think corporate ownership is the
biggest issue here.
Speaker 3 (36:32):
It's it's supply not demand. Let me put it that way.
It's supply not demand.
Speaker 2 (36:37):
Yes, let's see what do I want to talk about here.
I want to talk about this piece from the Wall
Street Journal. It's the Wall Street Journal exclusive SpaceX seeks
early index entry as it prepares massive IPO. I'll quote here,
companies must typically wait several months or a year after
their public debut before gaining inclusion in a major index,
such as the S and P five hundred and Nasdaq
(36:59):
one hundred. Inclusion unlocks access to retail and institutional capital
from funds, particularly those mimicking the performance of indexes, that
have to hold the companies in the index. SpaceX hopes
to skirt traditional rules in an effort to bring liquidity
to which shareholders sooner is part of its planned IPO.
And I gotta tell you, like, that's what it feels like.
(37:20):
It feels like they're trying to get this thing out
the door and move on from it. Yeah.
Speaker 3 (37:24):
And also, there's nothing about SpaceX or Elon Musk's companies
generally that would indicate to me that they don't need
to demonstrate that they are stable and liquid enough.
Speaker 2 (37:35):
No, Like, I'm not saying that like SpaceX is a
bad company or anything, but yeah, why would you waive
your normal rules in order to include this in the index?
Speaker 4 (37:47):
I would not.
Speaker 2 (37:48):
There's no reason to. You see how it performs. You see,
it's you know, fully audited, you know, full year financials
as a publicly traded company. And then you say yep,
this can get in and we're gonna boot out XYZ. This.
This really makes it feel like and again, I hate
to go back to the AI thing. I think all
these AI model companies are just in a race to
(38:08):
unload their bags right now. It's what it feels like.
Let's take a quick break. When we return tomorrow, we'll
finish up the week 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
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
(00:21):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike and Tuckle with you here on a Thursday
busy one UH tech sector is in the process of
melting down at the moment and dragging the rest of
the market with it. We've got the S and P
five hundred down about one point three percent, same with
the Dow NASDAK composite down about one point seventy five percent.
(01:33):
And by the way, the NASDAK composite, if we take
a look at it now, actually I will get the
Nasdaq one hundred just because it's more concentrated with like
your your big tech names. NASDAKA one hundred is now
at twenty four four forty nine UH and reached a
peak previously of about twenty six two hundred. That means
(01:54):
that the NASDAKA one hundred is now almost seven percent
off UH. It's it's high. So you're getting close to
correction territory on the Nasdaq. Which if you're like a
lot of you know, small investors who have gotten into
the markets in the last couple of years, you might
be particularly concentrated in some of these companies, and so
you might be sitting there being like Chuck, it's way
worse than that, And yes, I get it if you're
(02:17):
you know, in a lot of these tech names that
have been leading markets to the upside for the last
couple of years, the last month or two, they've been
kind of leading to the downside. And so it's it's tough.
It's never fun going through these types of pullbacks here.
And this is obviously, you know, a challenging situation to
try to navigate the S and P as a whole,
(02:38):
which is more broadly diversified a little bit more than
three percent off. It's all time high, so not too
much damage there yet, but tech is is in a
pretty nasty spot. I mean, you look at some of
these names, and you know, Microsoft is trading around four
hundred bucks a share right now. It was at five
point fifty two, so you're talking, you know, more than
twenty five percent off. It's high. If you're an in
(03:00):
vidio person in video goup to two twelve, it's at
one seventy two now it's almost you know, twenty percent off,
it's high. Uh. If you're more of a metaperson, hey,
I love the zuck you know, that's kind of your thing.
It was at seven ninety five it's at six sixty
six right now, almost twenty percent off. It's high. So
there's a lot of pain out there in big names.
And if you're looking at your portfolio that happens to
(03:23):
be concentrated in these and you're not feeling too good
about yourselves, just know that every investor in history, whether
it is you, Warren Buffett and me, the person sitting
next to you, whoever it might be, they've all gone
through times when things didn't work. And it doesn't mean
that they'll never work again, but it does mean if
you're uncomfortable with the amount of draw down in your portfolio,
(03:43):
think about how you might want to, you know, manage
the level of risk in the future. You don't need
to do anything drastic today, but you know, think about Hey,
if you if you're if you're thinking about selling when
everything's going down, it probably means that you shouldn't have
been buying as much when everything was going up. Good take.
That's it where I tend to land on that. Uh,
talking about other things moving in markets, tenure, Treasury catching
(04:06):
a bid on a little bit of weaker jobs data
that I'm still not sure that I completely buy. The
Joltz Report job openings report came out this morning with
a big drop in the number of job openings. It
doesn't mesh with what indeed is telling us as far
as their job openings numbers, and normally there's pretty coose
alignment on those, so I'm taking it with a grain
of salt. But the tenure Treasury down six point eight
(04:28):
basis points to four point two one percent, Dollar Index
is up zero point two three percent to ninety seven
seven one five, and we've got gold off about one
hundred and seventeen bucks ounce to forty eight thirty three.
Crude oil down two fifteen barrel to sixty two ninety nine,
triple a national average. For gas prices though up another
(04:49):
four tenths per gallon to two eighty nine and one tenth.
Speaker 3 (04:55):
I just want to point out, Jack, you quoted a
bunch of these numbers already, but there is no area
of the market that is not pretty volatile right now.
Oil price is down three percent today, silver price is
down thirteen gold down two and a quarter percent. I
know we've become used to those types of moves in
those commodities, but they are abnormal. Crypto markets bitcoins down
nine percent, crashing through the sixty seven thousand dollars per
(05:16):
coin threshold. Remember it is where were we at the
peak hundred and twenty twenty five. You've got obviously US
stocks selling off even in the bond market, treasury market
yield and tenure treasury moving down seven basis points. Those
are all fairly big, substantial swings in pretty much every
area of the market that we are seeing right now.
Speaker 4 (05:36):
So it feels volatile.
Speaker 2 (05:37):
It should, and quite honestly, here's here's the problem in
markets that I think is going to take some time
to resolve. Like I'm not sure that Humpty Dumpty is
just like put back together in the next week. I
know that having said that, he will be. But here's
the issue is there was so much mania building in
(05:58):
some of these areas of the market. You know, you
take a look at you know, places like precious metals
and what was going on there. You take a look
at memory chip companies and what was going on there.
There was a lot of nutty stuff. And when that
started to unwind, if people were leveraged again you buy
all this stuff in brokerage accounts, then you're forced to,
(06:19):
you know, make margin calls. You start selling other stuff,
and that triggers a whole other wave of selling from
you know, institutional investors that might be you know, running
quant strategies and things like that. There's some pretty nasty
cross currents in this market, and it's gonna take a
little time to sort out. So I know that, having
said that, we'll be sitting here a week from now
and it'll be like, oh, chuck, like, you know, look,
(06:40):
everything's back like S Andp's back to seven thousand. Sure, maybe,
but I'm just saying when things get so violent under
the surface, even though the indices as a whole have
looked calm, it tends to result in some nasty things.
And by the way, again, we'll see where this goes
over the next you know, read to six weeks. But
(07:02):
I've been saying for the last you know, month or
so hey, the last couple of times that anything but
tech has tried to lead this market. We've gone splat,
and we haven't splatted yet because again, three percent on
the S and P is a nothing burger. The dazdac's
getting a little bit dodgy. But let's see how this develops,
because I'm still not convinced see a market moving up
(07:26):
consistently with Verizon, you know, leading with Johnson and Johnson leading.
Those are big, boring companies that don't do anything that
excites markets. And so when I see Verizon report earnings
and now is up nineteen percent since them, I kind
of look at it and I'm like, Okay, like the
jig is up fair, you know, like that doesn't fill
(07:49):
me with like future confidence for markets necessarily.
Speaker 3 (07:53):
Uh.
Speaker 2 (07:53):
Piece in the Financial Times, Kevin Warsh channels Alan Greenspan
and AI productivity bets. So Worsh if you've been living
under a rock is the new FED chair nominee. Uh?
And he's basically talking about, Hey, I think that the
US economy is going to be able to go through
a productivity boom because of AI and other factors that
(08:16):
will make all of the problems that we're seeing today
not really a big deal.
Speaker 3 (08:21):
Actually, does that seem consistent with his viewpoints that he
has thrown out there since two thousand and nine, Chuck, No, okay,
I'm not gonna stand here and say that you can't
change your mind, right, right, we can all change our minds.
But pretty consistently since two thousand and seven or eight,
(08:44):
Kevin Worsh has been talking about how inflation is going
to be a problem and a result of the Fed
expansion that they have used and the bias towards lower
interest rates. And he's been wrong pretty consistently since then,
and never once had a Maya Kolpa like, hey, yeah,
I missed this one, and my vision of this has
all changed. And now all of the sudden, when he's
(09:07):
you know, running for a chair person, he is looking
for or fine, I shouldn't say he's looking for he
has found a sound economic theory to justify lower interest rates.
And I just I'm just suspicious. I'm just a little
bit suspicious. I guess is where I live.
Speaker 5 (09:27):
A little watchistitious.
Speaker 2 (09:29):
Yeah, I'm kind of. I'm more substitious than superstitious personally.
You know, it's just how I roll. Just take a
quick break here. When we return, we'll do a little
bit of trivia and then we'll talk about This is
actually a really good piece in the Wall Street Journal.
It's titled how to Say How to Stay Sane in
(09:49):
the AI Skills Race, and basically talking about, look, what
can the average person do to figure out how to
make AI work for them? I think that's a great question.
And one we'll discuss after this.
Speaker 1 (10:02):
If you missed any of today's show, catch up whenever
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(10:23):
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The Financial Exchange streams live every day on YouTube. Subscribe
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search the Financial Exchange on YouTube and be sure to
hit that subscribe button. Time for trivia here on the
Financial Exchange, and tomorrow.
Speaker 2 (10:51):
Snuck up on us.
Speaker 5 (10:52):
The twenty fifth Winter Olympics Games kicks off in Milan, Italy.
One hundred and two years ago, the first Winter Olympics
two took place with only nine competition nine. So our
trivia question today which country hosted the first Winter Olympics?
Speaker 2 (11:10):
Once again?
Speaker 5 (11:11):
Which country hosted the first Winter Olympics? Be the third
person today to text us at six, one, seven, three,
six to two thirteen eighty five with correct answer along
with keyword trivia, and you win a Financial Exchange Show
T shirt once again. The third correct response to Texas
to the number six one seven three six two thirteen
(11:31):
eighty five with the correct answer along with the keyword
trivia will win that T shirt. See complete contest rules
at Financial Exchangshow dot com.
Speaker 2 (11:41):
Mike, there's a great piece in the Wall Street Journal today.
It's titled how to Stay Sane in the AI Skills Race,
and it's all about figuring out, Hey, if you are
someone who works in a business that is likely to
be impacted in the next couple of years by artificial intelligence,
how do you make AI tools work for you instead
of becoming a casualty of them. What kind of advice
(12:05):
does it give here?
Speaker 3 (12:05):
Well, the author advises going directly to the tools themselves
and saying, look, this is what I do for a living.
Speaker 4 (12:12):
Help me build a customized training.
Speaker 3 (12:15):
Course to this specific skill set that I'm trying to
adapt to, and then you know, using the tools to
customize it better. Hey, you know, limit it to this
specific subset of type of career path, and you know,
limit to this number of hours. I do have some
questions about I think that's as good a plan as any,
(12:36):
and he points out that, look, when recruiters are going
out there and hiring managers are out there, they really
don't know how much stock to put into an online
certificate from some you know, online education school on AI
tools that may or may not be specific to your
job role. Personally, If I'm thinking about how I think
(12:56):
this goes, I do think ultimately we're not We're probably
not there yet, but I do think ultimately there are
going to be some best in class training tools that
are developed out there, and the course work is going
to be recognized and respected by hiring managers. But we
don't seem to be there right now, and so I
don't have many other tips other than that. I guess
(13:17):
the big one that's important here that he points out
is don't just sit there panic and try and learn
everything about every AI tool that's out there, because don't
need to.
Speaker 2 (13:26):
You have no need to do that.
Speaker 3 (13:28):
You learning how to code using AI is going to
be absolutely worthless if you work in corporate finance.
Speaker 2 (13:35):
I would agree it's something where and look, Mike, you
and I we grew up with the internet, so like
we were seeing it from its first days, and so
our knowledge evolved as it did. This is my opinion,
is the first time that I've seen a technology where
(13:57):
I've looked at it and gone, gee, I don't really
feel native to this. I'm not one hundred percent sure
that I'm using it the best way. And the example
that I'll give is Mike, when you go to search
for something on Google, you don't type in where you know,
show me where I can find this data about blah
(14:17):
blah blah. Now you just say I Apple earnings Q one,
and you know like what to look for there, because like,
you built that skill over time and you kind of
grew with it. Someone who's new to the Internet of
any age doesn't have that, and they looked at it
They're like, how do you know what to type in there?
Speaker 1 (14:35):
Right?
Speaker 2 (14:36):
I kind of feel that way sometimes when talking about
how artificial intelligence programs work. It's like, am I asking
it the right question in order to get the answer
that I want? And so it's a fundamentally different proposition
than search engines. Where search engines it's all keyword sensitive.
Oh you're looking for pictures of chickens, great, here they are, Hey,
(14:56):
you want you know, tips on skiing faster. Here here
are the five websites you don't just type into, you know,
chat GPT tips on skiing. You give it some context. Hey,
I'm a skier that likes to ski on these types
of runs. I like long, you know, cruising turns, and
(15:18):
here's my height and my weight and I'd like to
ski faster. What are some tips for me? And that
you know, you provide it with the context and detail,
and that's how it can be more helpful. But it
takes time to understand, you know, for specific job purposes, Hey,
how do I need to you know, prompt it in
order to get the information that I want? And I
(15:39):
think just spending a little time there can be a
huge help in being able to make it more functional
if you need it to be part of your workday
and skill set.
Speaker 3 (15:50):
Here's what doesn't exist for AI, which again I would
think we eventually get to. But when I was applying
to my first jobs out there and I had my resume.
On that resume, I had under the skill set a
Microsoft Excel certification course that I took sure, meaning I
had to pass an actual course where they teach you
how to write formulas and do all these things, and
(16:10):
I did it in college and it was voluntary, and
I put it on my resume and it applying to
jobs in corporate finance. People asked about it, they said,
what went into the course? I didn't even know they
offered that, And it was an immediate Now, were my
excel skills as good as the people that had been
working at my first job for ten years now laughably behind?
But the mere fact that they were there was an
(16:32):
independent authority that was certifying my skill set went a
long way. And that does not from what I can tell,
There's plenty of places that will offer that certification, but
there isn't one that I think hiring managers can identify
right now and say, oh, that means something. Yeah, And
I would imagine that there's a business model there, and
I would imagine, but right now it doesn't exist, And
(16:53):
so I would be very hesitant. I see advertised all
the time, you know, pay one hundred and fifty dollars
for this online course, you know, this masterclass, and I
would personally be very very skeptical about spending and or
wasting my money on a course that nobody is going
to be able to identify as useful.
Speaker 2 (17:12):
And part of it is just because the technology is
evolving so quickly. When you took that Excel course, you
walked into any white collar job in America and they'd say, great,
I know what Microsoft Excel is. Yeah, but if you
take a course today on you know, prompting, you know
caud code, Well, what if calud code doesn't exist two
years from now, right like or what if it's completely different?
(17:36):
Like how do you know you don't even know what
it's gonna look like by the time you're ready to
use it. Uh So, I thought that was again just
a good piece just to talk about these things. Piece
of the Financial times. The treasury market is trading treading
in dangerous waters, which which waters Michael.
Speaker 3 (17:53):
That we if Kevin wortsh is going to kind of
change up some of the things in the Fed specifically
he's talked in the past about the size of the
Treasury balance sheet at the Federal Reserve and all of
those pieces that it might cause some alarm bells, but
not alarm bells that we haven't dealt with in the like.
(18:14):
These wouldn't be things that we haven't had to deal
with in the past. When was the kind of mini
blow up that the Treasury that the FED had to
deal with it. I want to say it was was
that pre COVID when they had to backstop some of
the very short term lending markets.
Speaker 2 (18:31):
Which one are we talking like what I mean? There's
been a few of these times. I mean remember QI
was like that for a decade.
Speaker 3 (18:37):
Yeah, So I guess the point is, Hey, they're trying
to make a point that if things slow down and
they try to run off a balance sheet, you could
create a bunch of problems, which is always the case,
and we know the solution to that, which is why
I don't think there's going to be a massive reduction
of what the FED does.
Speaker 2 (18:54):
Yeah, I think that's fair. Uh. Taking a look at
markets as we head towards the bottom of the hour,
trying to stage a bit of a rally here, the
down S and p A is still down one percent, respectively,
but not down one and a half percent anymore. The
Nasdaq also now down about one percent instead of one
and three quarters percent, So you've had a little bit
(19:15):
of a bounce in the last half hour. Don't know
if it has legs or if it doesn't, but you
do have a little bit of a bounce that is
happening here, and we'll see if it turns into a
bigger bounce. First, we're going to take a quick break.
When we come back, we've got the trivia answer, We've
got Wall Street Watch, and then we're talking about retirement
portfolios in this market.
Speaker 6 (19:40):
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.
Speaker 1 (19:53):
A complete look at what's moving market so far today
right here on the Financial Exchange Radio Network.
Speaker 5 (20:00):
Continuing for third straight session as investors continue to show
concern around tech stocks. Wall Street's also reacting to slightly
higher than expected jobless claims data and software than expected
job openings data for the month of December. Right now,
the Dow is down exactly one percent, or four hundred
and ninety four points, SMP five hundred down eight tenths
(20:22):
of a percent of fifty six points, Nasdaq down eight
tenths of a percent or one hundred and eighty five
points lower, so some dip buying out there was worse
about an hour ago. Russell two thousand is down just
over one percent. Tenure Treasure reeled is down six basis
points at four point two one eight percent, and crude
oil down three percent today trading just above sixty three
(20:45):
dollars at barrel. Google Paya company Alphabet reported a jump
in quarterly profit where sales rose eighteen percent in the
fourth quarter of The tech giant also set it plans
to roughly double capital spending this year to develop AI
models and bill data centers. Alphabet stock is down by
three percent. Meanwhile, Qualcom shares are down by seven percent
(21:07):
after the semiconductor company posted disappointing earnings guidance, where blamed
an industry wide shortage of memory supply and price increases Elsewhere,
s day Lauder lifted its adjusted earnings outlook for the year. However,
the beauty company said it still expects a roughly one
hundred billion dollar hit from tariffs as day Laughter shares
(21:27):
are tanking twenty two percent. Rio Tinto said it is
no longer considering a potential merger with glen Core that
would have created the world's largest mining company with a
market value of more than two hundred billion dollars. Rio
shares are flat, while glen Core stock is down by
six percent, and after today's close, all eyes will turn
too Amazon for more big tech earnings. I'm Tucker Silva
(21:51):
and that is Wall Street Watch. On the previous segment,
we asked you the trivia question which country hosted the
first Winter Olympics. Well, that would be France. Norman from Portland,
Maine is our winner today taking on the Financial Exchange
Show t shirt. Congrats to Norman, and we play trivia
every day here in the Financial Exchange See complete contest
rules at Financial Exchange Show dot com.
Speaker 2 (22:14):
I think I would have guessed France. Actually I probably
would have guessed Switzerland. But then again, the guest that
you should make is France because I believe the official
language of the Olympics is French. Like they at least
like give like a lot of the A lot of
the speeches are in French as well, even when the
(22:35):
games aren't there. So I don't know. Isn't it wild
that Lake Pass has hosted them twice?
Speaker 3 (22:42):
It is a pretty uh right, small place, look like
lake plast like it's crete and everything.
Speaker 2 (22:47):
The population is two thousand people.
Speaker 3 (22:50):
Yes, true, but like how many locations across the globe
actually can handle the Winter Olympics reliably? Like I guess
everything over that parallel, I think'd.
Speaker 5 (23:00):
Be great in Boston the Winter Olympics. You know that's awesome. No, everywhere,
no one can drive at all.
Speaker 2 (23:06):
I mean, look if if they held the Winter Olympics
in Beijing, they can hold them anywhere. Yeah, that's fair,
that's true. You know, not no, not here, No, sorry,
I do actually enjoy the twenty thirty ones. There's no
specific location. It's just French Alps. Yeah, so they go,
sir like, yeah, you'll say it, why not? But uh
(23:27):
in any case? Uh, piece in Barns it's a time
of rapid change? How to protect your retirement portfolio. So
let's let's talk about this, Michael, because there's two pieces here. First,
is it a time of rapid change?
Speaker 3 (23:43):
I guess it depends like society. Technologically, I think it
is a time of rapid change, whether or not is
a time of rapid change in the stock market. I
mean it's been a week of rapid change. I'm not
sure that that indicates anything.
Speaker 2 (23:54):
No.
Speaker 4 (23:55):
Technologically, yes, I think it's a time of rapid change.
Speaker 2 (23:58):
How to protect your portfolio? What there's this piece talk
about when it comes to portfolio protection.
Speaker 3 (24:05):
For ties extremely specific and nuanced things that I don't
personally find very useful. I mean one just general thing
she does. The author does address that, Yeah, diversification across
asset classes and global assets can help you avoid specific
(24:27):
market downturns related to specific countries or industries. If you
didn't if you didn't know that in your investing for
retirement in the first place, then you've got a bigger
problem here, and I'm not sure you're going to gain
anything from that. Then she she goes on to speak
about how you know specific dividend ETFs that she has selected,
or international focus funds or different individual companies can really
(24:53):
protect in a downturn. And that's where I get a
little bit lost and hesitant, because I think if the
author had a real track record of picking these things
during downturns, then she wouldn't be writing no offense. I
don't know if you were that good at that, I'm
not sure you would be writing it as an author
for barons. I'm not good enough to do it, and
(25:14):
so I'm not sure that that is going to really
dramatically be a useful thing. What I would say instead,
if you're attempting to protect your retirement portfolio, and that
type of advice overwhelms you like it? Did me start
with something more basic, right, Like, if I'm trying to
think about how it is my retirement portfolio in a
(25:37):
good state of quote protection, I would look at it
personally to me and I would say, okay, here's where
I am today, and let me map out the next
decade if all goes according to plan, how much money
might I need to take out of my retirement portfolio? Sure,
there's my starting point. How much money might need to
come out of the next decade. Obviously, if you're fifty
(25:58):
two versus seventy, those are very different figures. But map
it out and say, okay, this is the number. Okay,
how many Like how much of that ten year expected
withdrawal is invested in something that you consider to be
reliably predictable? And again this is everybody's personal opinion, but
(26:21):
you know, cash CDs loans to the United States government?
Speaker 2 (26:25):
How much of that.
Speaker 3 (26:26):
Ten years that I'm going to need is invested in
something that doesn't deal with the types of swings that
we're dealing with right now, And that to me is
a kind of good starting point. If it's very little
of it, then okay, that might indicate something to you.
If it's that time, you know, it's forty years of
all that stuff is in something that you deem to
(26:47):
be really conservative, then maybe you're going too far in
the other direction. But I think rather than trying to
figure out which author of a news publication is going
to be best at recommending securities to you, which is
not what they do because they can't, then I think
that's a better starting point if I'm trying to assess
just hey, is my portfolio prepared for whatever it.
Speaker 4 (27:10):
Could come next? Is there anything else that you would
look at there?
Speaker 3 (27:13):
Because I found this to not be very helpful for
the average person. In fact, the average person I don't
think would have any idea what to do with this
or how to implement it.
Speaker 2 (27:21):
No, I think kind of looking at it in that
that broader categorization of look financial planning at its core
is about one thing, matching the assets that you have
with the liabilities and when they're due. And so that's
what this looks at is how much money do you
need at specific intervals and do you have a plan
such that the assets that you need sooner aren't exposed
(27:44):
to you know, a five percent draw down in markets
that you know the assets that you need later can
stomach that because you're not touching them until later. So
that's that's what it's all about, is do you have
a plan for I need money X at time y,
and I've put it in Z to accomplish that.
Speaker 3 (28:01):
My worry is that it sure has been tempting to
take that money that we just described, that money that
needs to be allocated towards cash flow in year one
or two, and it's sure been easy and tempting to
grow that a lot faster than what you can get
from a CD.
Speaker 2 (28:20):
It just has.
Speaker 3 (28:21):
Right, it's been a tremendous three years for stock market growth.
It's been a tremendous fifteen years, but in particular the
last three. If you are trying to assess this yourself
and nervous about this market downturn that we've seen, which
again just been the last week or so. I don't
want to overstate what we are seeing right now, but
if you're uncertain about where your portfolio lies and whether
(28:42):
or not it is achieving what you think is your
real objective, please call us an armstrong advisory group. We
have a well thought out set of theories as to
how to apply this to each individual's situation, and it's
not just cookie cutter advice that gets thrown out there.
Give us a ring eight hundred three nine three four
Z zero zero one. You can check us out or
book a time for us to call you back at
(29:03):
Armstrong Advisory dot com. But that phone number once again,
eight hundred three nine three for zero zero one.
Speaker 1 (29:10):
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 make contact you to offer investment
advisory services.
Speaker 2 (29:26):
Mike, do we want to talk about executives buying their
stock and whether it's a signal for how the company
will do? Do we want to talk about how hard
it is to retire early when you have kids? Or
do we want to talk about Peloton sales?
Speaker 4 (29:43):
Isn't Peloton the most fun one there?
Speaker 2 (29:45):
It is? Yeah, So here's the deal. Peloton stock has
not been doing very well for sometime now, several years.
It's doing worse today. It's down another twenty five percent,
and this puts it ninety eight percent off its all
time high from early January of twenty one. I see
(30:09):
the way a stock loses ninety nine percent is it
loses ninety eight and then another fifty. So just remember
it can always get worse. And Sam, kids, I'm not
saying it will. I'm just saying that can.
Speaker 3 (30:25):
That's the message that Chuck delivers every Christmas to his family.
Speaker 2 (30:29):
Not happy with this? It could be worse next year.
Here's the deal. Revenue for their Q one they're estimating
to be at six hundred to six hundred and twenty
five million dollars. That's a one percent decline and about
a two percent miss on consensus estimates. The rains for
the fiscal year that ends in June is about a
three percent drop in revenue. And the reason why this
(30:53):
is an issue is they've spent a bunch of money
trying to roll out new like AI powered products and
new devices and this and that, and it clearly isn't
working yet. And the problem that Peloton has is that
it's a business that is, you know, struggling to be
consistently cash flow positive. And if this turnaround doesn't work,
(31:18):
they only have about a billion dollars in cash on hand,
and so it puts them in a dodgy position going forward.
Then so I think, again, this is one that, in
my opinion, someone maybe Apple would be a great fit
to buy them when they get cheap enough. Because if
(31:38):
you're Tim cooksont there, you're like, Okay, the market cap
on Peloton's a couple billion dollars now five years ago
was forty five billion. We're glad we didn't spend that.
But hey, we've got this fitness program that we're trying
to roll out with the Apple Watch and all that.
Wouldn't it be great to take a a premium product,
or at least a premiumly priced product, put it into
(31:59):
that sweet and have it integrate with all that stuff.
Of course it would. But if it's a billion dollars,
if it's two billion dollars today, we'd have to pay
you know, three billion to take it out. Yeah, let's
just wait another year and see if it gets cheaper.
Speaker 3 (32:12):
In the meantime, I'm really hoping that I didn't buy
my wife a really expensive clothes hangar instead of a treadmill,
because I'm starting to get that feeling.
Speaker 2 (32:22):
You never know. I mean, look, here's the thing, It's
not like these devices won't work if the company does
end up going out of business, they just won't have
the programming.
Speaker 4 (32:31):
Right, That's that's my point.
Speaker 3 (32:32):
Yeah, you know, still have a treadmill, but you won't
have any of the other features that you are paying for,
which is the whole reason. But you wouldn't be paying
for them anymore. True, but you paid a pretty big
upfront price.
Speaker 2 (32:44):
That is true. Let's take a quick break here. When
we come back, we'll do a little bit of stack roulette.
Speaker 1 (32:49):
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
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This is the Financial Exchange Change Radio Network. The Financial
Exchange is life on Series XM's Business radio channel one
thirty two weekdays from eleven to noon. Get the latest
(33:09):
business and financial news from across the country and around
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eleven to noon on Series XM's Business Radio Channel one
thirty two. Face He's the Financial Exchange Radio Network.
Speaker 5 (33:27):
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Speaker 2 (34:01):
Mike, what do you got for stack roulette?
Speaker 3 (34:03):
You know. Our conversation about housing, as it usually does,
sparked some interest from listeners. We received three texts, two
of which agreed with us, in one of which disagreed
with us, which honestly, sixty six percent, not about per
perf of the course. I'm pretty happy with that ratio,
But I wanted to talk about one of them that
brought up the idea of corporate ownership of homes. So
(34:26):
the first texture let us know, everything you guys are
saying is obviously incorrect. The only thing that's changed lately
is that corporations are buying private homes at a phenomenal
rate that must come to a grinding halt to fix
this problem. So first things first, corporate ownerships of single
family homes has always been a presence in the market,
and I will acknowledge that, you know, it has grown
(34:47):
as a percentage in the most recent data that we have.
There's some data from Batch Data indicating that the third
quarter of twenty twenty five, investors purchased thirty four percent
of homes. So in that quarter of twenty twenty five. Now,
one piece that I want to draw attention to though
and debate is that these are by and large not
(35:09):
the giant investors out there. The same data broke out
the percentage of ownership in the corporate space by how
many owned homes they own. Ninety two percent of corporate
ownership of single family residences came from those who own
between one and five homes.
Speaker 2 (35:26):
Which also then matches up with the data that's out there.
And this is data that I've seen from a bunch
of different sources. Real Estate News has this. John Byrn's
Research and Consulting has this that generally gets to around
three percent of all homes in the United States are
owned by large corporate landlords basically that then end up
(35:48):
renting those homes out.
Speaker 3 (35:49):
So if you want to ban mom and pop investors
from buying homes, I agree, it may impact prices to
the downside. You may be able to make homes more
afforded by by doing that, But you cannot just go
after the thousand plus homeowner one thousand plus ownership bucket
because it's it's just not big enough. Furthermore, I just
(36:10):
don't know that this is actually today's problem because while
the percentage grew in twenty twenty five, the actual number
of homes purchased by corporate owners was down year over year,
and so the big corporate investors were net sellers of
homes in the most recent quarter.
Speaker 2 (36:26):
Yes, so yeah, I don't think corporate ownership is the
biggest issue here.
Speaker 3 (36:32):
It's it's supply not demand. Let me put it that way.
It's supply not demand.
Speaker 2 (36:37):
Yes, let's see what do I want to talk about here.
I want to talk about this piece from the Wall
Street Journal. It's the Wall Street Journal exclusive SpaceX seeks
early index entry as it prepares massive IPO. I'll quote here,
companies must typically wait several months or a year after
their public debut before gaining inclusion in a major index,
such as the S and P five hundred and Nasdaq
(36:59):
one hundred. Inclusion unlocks access to retail and institutional capital
from funds, particularly those mimicking the performance of indexes, that
have to hold the companies in the index. SpaceX hopes
to skirt traditional rules in an effort to bring liquidity
to which shareholders sooner is part of its planned IPO.
And I gotta tell you, like, that's what it feels like.
(37:20):
It feels like they're trying to get this thing out
the door and move on from it. Yeah.
Speaker 3 (37:24):
And also, there's nothing about SpaceX or Elon Musk's companies
generally that would indicate to me that they don't need
to demonstrate that they are stable and liquid enough.
Speaker 2 (37:35):
No, Like, I'm not saying that like SpaceX is a
bad company or anything, but yeah, why would you waive
your normal rules in order to include this in the index?
Speaker 4 (37:47):
I would not.
Speaker 2 (37:48):
There's no reason to. You see how it performs. You see,
it's you know, fully audited, you know, full year financials
as a publicly traded company. And then you say yep,
this can get in and we're gonna boot out XYZ. This.
This really makes it feel like and again, I hate
to go back to the AI thing. I think all
these AI model companies are just in a race to
(38:08):
unload their bags right now. It's what it feels like.
Let's take a quick break. When we return tomorrow, we'll
finish up the week on the Financial Exchange
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