January 2, 2026 • 38 mins
Chuck Zodda and Mike Armstrong discuss everyday traders going from fringe players to the dominant market force. Will the next class of Senators do anything about the Social Security crunch? Buffett says Berkshire Hathaway has the best odds of any company for lasting 100 more years. Paul LaMonica (Barron's) joins the show to chat about the Dogs of the Dow.
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Episode Transcript
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Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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Exchange with Chuck Zada and Mike Armstrong, Your exclusive look
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(00:42):
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(01:06):
and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike, and talker with you here on the first
trading day of twenty twenty six. I hope you all
are off to a great start this year. But I
got to tell you markets, they h no Santa Claus rally, No,
They're going off flip floppy big.
Speaker 3 (01:27):
One on Monday. If you're gonna get anything out of
this one.
Speaker 2 (01:29):
Yeah, which again, who knows, Like what's gonna happen on Monday,
because quite honestly, today pretty low volume day. I gotta
be honest, I'm a little messed up today, like more
than normal. You know, it's it's not Friday.
Speaker 4 (01:45):
Yeah, I thought yesterday was Saturday.
Speaker 2 (01:47):
My alarm went off this morning.
Speaker 4 (01:49):
I work tomorrow.
Speaker 2 (01:49):
What Yeah, my alarm went off this morning. I'm like,
oh good, it's Monday. And then I'm driving in I'm like,
wait a minute, I don't have to work tomorrow. That yeah.
Speaker 4 (01:57):
Not a fan of this holiday schedule, I.
Speaker 2 (01:59):
Kind of I am, actually, I know, I enjoy having
weeks split up by back to back holidays makes it
rather quiet.
Speaker 5 (02:08):
Yeah, I'm a fan as well, But yeah, I mean, look,
consuming your body weight and alcohol and sugar over the
course of the last week and a half will do.
Speaker 2 (02:15):
That to you.
Speaker 4 (02:16):
How's that different from any other weeks?
Speaker 2 (02:18):
Yeah? Question what your body weight in alcohol? That would
be a lot because you're not sugar the sugar. Well,
I mean that's a lot of sugar too. What do
you think is worse for you your body weight and
alcohol or body weight in sugar?
Speaker 4 (02:33):
Sugar?
Speaker 2 (02:36):
Alcohol is technically a kind of sugar, I believe. Trick
question in any case, the markets right now that we're good. Well,
here's the thing. If you have your body weight and alcohol,
you're not alive. So it's probably that Gemini, I'll tell us.
Oh yeah, doctor Gemini, what do you have to say
on this? Uh? Okay, while we're on the tangent, did
you know that in Utah most states it's ab alcohol
(03:00):
by volume. Utah is ABW. If you bring it's alcohol
by weight, and because alcohol weighs less than water, you
actually get a They limit the alcohol concentration, but it's
by weight, not by volume, and so you actually get
more than the equivalent ABV.
Speaker 5 (03:19):
Gemini is telling me that consuming your body weight and
alcohol over the course of a week is almost certainly fatal.
Speaker 2 (03:24):
Yes, I believe that, but like likewise, if i'd like
one hundred and seventy pounds of sugar, I can't imagine
that being good for me either.
Speaker 3 (03:34):
Yeah, yeah, Well, don't know until you're.
Speaker 2 (03:39):
Dry, and don't Neither one's great. The sp five hundred
down eight points, about a tenth of a percent. The
Dow is up forty seven points, about a tenth of
a percent. The Nasdaq Composite down seventy two points a
third of a percent. Big reversal in mag seven names
over the last twenty thirty minutes. Haven't seen any news
driving it, but this is, you know, kind of what
(04:00):
we're seeing here as of this point ten. Your Treasury
up two point six basis points to four point one
seventy nine percent, So just continuing to flutter in that
four to one to four two range. Dollar index down
point one two percent to ninety seven ninety two. We've
got gold up another seven eighty and ounce to forty
three forty eight and sixty cents, and we've got crude
(04:22):
oil down sixty five cents a barrel to fifty six
seventy seven, and the TRIPA national avatur gas price is
down another three tenths of ascent. We're at two point
eighty three, so continuing to see falling gas prices nationwide,
which if we happen to be listening to us on
the road and you don't work in the energy industry,
you're very appreciative of those who work in the energy
industry are kind of like, yeah, yeah, just a good brunt.
Speaker 5 (04:48):
I'll just throw out there that if we don't get
a reversal on Monday with stocks up, be prepared for
all the articles that are going to be written on
Tuesday and over the course of the following few weeks
about what happens when you don't get a Santa Claus
rally historically and what you should do with your portfolio now,
And I urge you with the strongest sense to ignore.
Speaker 3 (05:08):
All of them.
Speaker 4 (05:09):
It'll be the lead of the show on Tuesday.
Speaker 2 (05:11):
Yeah, So if that happened, will stocks we will money again?
And ignore it?
Speaker 3 (05:18):
Yeah?
Speaker 2 (05:19):
What to do when your portfolio is down for four days?
Speaker 3 (05:22):
Right?
Speaker 2 (05:22):
Remember?
Speaker 5 (05:22):
I mean this is precisely what happened last year, wasn't
it saying it was two years ago? I think it
was twenty twenty four, I don't remember, But the first
like five days of the year were bad, is right?
What about how when the markets go down for the
first like two days of the year, everything terrible happens,
and then we got double digit returns.
Speaker 2 (05:41):
Of course, gotta say, like, let's I'm glad that you
brought this up to a certain extent if you look
at S and P performance, uh, just on an annual basis,
here in terms of what we've seen recently, like we
got to like, be honest, twenty twenty three up twenty
four percent, YEP, twenty twenty four up twenty three percent,
(06:04):
twenty twenty five up sixteen percent. That's like back to
back to back, pretty darn good performance. The only string
in recent history that is continued, you know, kind of
beyond a three year stretch of anything like this. I
know you don't want me to say it. It's the
(06:25):
tech bubble. Aside from that, the next closest one that
we have was twenty nineteen twenty and twenty one, and
I think we can all admit that twenty twenty and
twenty one might have been caused by a fiscal stimulus
that isn't coming back anytime soon. But like you look,
(06:48):
aside from this, it's pretty much tech bubble or bust
in terms of three year stretches that you have, you know,
in this kind of company. The only other thing that's
maybe comparable, and again I say maybe just because you
really got to cram most of the performance into two
years is nineteen fifty four and nineteen fifty five, where
(07:10):
you went forty five percent and then twenty six percent
back to back years. Other than that, we're in pretty
rarefied air. And that's why I really wanted to cover
the piece talking about how retail traders or this new
you know, so that's okay, let me let me go
get it because I put it somewhere. Do you have it?
Speaker 5 (07:31):
Yeah, there is a Wall Street Journal piece that everyday
traders have gone from the fringe players to dominant market force.
They drove major returns and reversals in markets this year
or sorry, it's last year. For instance, during the tariff
related fiasco in markets in April.
Speaker 3 (07:50):
They are being.
Speaker 5 (07:51):
Held responsible for some of the big rallies in commodity prices.
And you know, certainly you can point to them over
the last few years during the twenty twenty one meme craze.
And so are they some now permanent fixture or are
they just waiting to be washed out?
Speaker 3 (08:07):
With the next crisis.
Speaker 2 (08:08):
Yes, And what I mean by that is, I do
think so you saw these pieces published during the tech
bubble as well about you know, all these people that
you know started making more and more money trading and
you know, blah blah blah, and uh, it's you know,
it's a new paradigm and it's a new world. And
you know this was back when each trade was you know,
kicking down the doors and giving average people access to
(08:30):
markets that they didn't have before. And I do think
it's true that this is going to be a group
of people that does continue to grow and you know,
trade more and become more of a force. But here's
the other thing. This is also happening against the backdrop
(08:54):
of one of the best three year returns in markets
that we have ever seen. And they don't ring a
bell at the top, but they do write articles. And
this is the kind of stuff that you start to
read when people start getting a little too exuberant and
a little too confident that they are doing something as
(09:15):
opposed to conditions have existed that have enabled them to
do something that might not exist permanently. So if you're
out there and you believe that the market is going
to return twenty percent annualized going forward. You're a little
bit more optimistic than me. You just are, because ultimately,
(09:36):
there are two ways for markets to return twenty percent
in a year. Earnings have to go up by that much,
or multiples have to expand, and eventually you run out
of ways for earnings to go up that much while
actual humans can still have money to spend, and likewise,
(09:57):
you get to a point where multiples expand to the
point where people say, Nope, that's good, I finally had enough.
I'm not saying that like we're done. Like, maybe you
do have another twenty percent year this year. It's it's possible. Sure,
the tech bubble had a five year stretch where it
averaged more than twenty percent for the S and P
five hundred, so like this could continue, but it won't
(10:18):
be forever.
Speaker 3 (10:20):
Nothing's forever.
Speaker 2 (10:21):
Check And that's my point is the success that these
retail traders have had the last couple of years is
not going to be a permanent fixture because markets just
aren't going to do this forever. They can't. I wish
that they could. It would make all of our lives
a lot easier and better, but I just don't believe that.
(10:41):
You know, that's gonna be what we see quick break here.
When we come back, we've got trivia, and then we're
gonna be talking about social security and midterm elections. Why
does this matter? We'll tell you right after this.
Speaker 1 (10:56):
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(11:17):
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Speaker 4 (11:35):
All right, Sam for trivia.
Speaker 6 (11:36):
You're on a Financial exchange and Warren Buffett has officially
left his position as CEO of Berkshire Hathaway. The ninety
five year old has famously survived and even thrived with
his preferred childlike diet. He drinks five twelve ounce cokes
every day. So trivia question today, where does Warren Buffett
get his breakfast from? Every work day once again, where
(11:59):
does this Warren Buffe get his breakfast from every workday?
Be the third person today to text us at six
one seven three six two thirteen eighty five with the
correct answer along with the keyword trivia, and you'll win
a Financial Exchange Show T shirt.
Speaker 2 (12:16):
Once again.
Speaker 6 (12:17):
The third correct response to text us to the number
six one seven three six to two thirteen eighty five
with 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 (12:31):
Uh This fall, in November, Americans will head to the
polls for midterm elections and the is it thirty three
or thirty four senators? This one? I can't remember which
class this is? Oh no, In any case, the thirty
three or thirty four senators who are elected this year
will serve six year terms just so like every other
senator does. The difference is that Social Security the trust
(12:56):
Fund is expected to become insolvent late twenty thirty two,
at which point the senators that are elected this fall
will still have to deal with it. So what's interesting
to me is you look at all of the chatter
and all of the you know, things that people are
talking about from a political perspective, right now, does social
(13:20):
Security get mentioned once?
Speaker 3 (13:22):
Not on the list?
Speaker 2 (13:23):
And this group of senators will actually have to be
have to be instrumental in determining what the program looks
like beyond twenty thirty two. Now you might say, oh, chuck,
they're not going to do anything, they're lazy, and they're
not even going to hold a vote at That's fine,
that's still a decision. That's still a decision that they're
(13:43):
going to make. But ultimately, there's no one else who
is occupying office at the moment that you can guarantee
will still be occupying office at that time, aside from
these thirty three senators.
Speaker 5 (13:58):
I suppose something weird could happen where the trust fund
doesn't run up by twenty thirty two.
Speaker 3 (14:02):
So no way to guarantee that.
Speaker 5 (14:04):
You'd have to see probably a big economic boom over
the course of the next.
Speaker 2 (14:08):
Generally, fiscally we've been on a twenty five year path
of worsening, and so it'd be very surprising if it refuses.
Speaker 5 (14:15):
For I just I just want to acknowledge that it's
not technically a guarantee. It's an estimate of when it
will run out. I'd be willing to bet it runs
out sooner.
Speaker 2 (14:22):
But like when I started this job, I think it
was twenty thirty four thirty five that was projected to
run out, and now we're at twenty thirty two.
Speaker 3 (14:30):
Kept getting worse.
Speaker 5 (14:31):
Yeah, quote from Senator Mark Warner, it's been disappointing that
we have kicked this can this long. That's from you know,
one of the senators who co sponsored the Social Security
Fairness Act, which worsened, not bettered, the situation for the
Social Security Trust Fund plenty to blame to go around there.
By the way, that was very heavily supported bipartisan vote.
(14:52):
I think seventy plus votes for a YA on that one.
But yeah, it is a looming issue, and this will
be the first group of elected senators that will actually
need to address it during their during their tenure. Trying
to see and my guest, by the way, is it's
tackled in you know, forty five days prior to the
(15:14):
actual runout of money. Trying to see what the Social
Security Fairness Act actually passed by. Yeah, I was three
twenty seven to seventy five in the House in seventy
six twenty in the Senate yeap.
Speaker 2 (15:27):
Again and again.
Speaker 5 (15:28):
We can talk about the fairness of it and why
that should have been done, but the clear mathematical result
was that the trust fund will you know, run out
of money a little bit sooner than it otherwise would
have because all you did was increased benefits for a
group of beneficiaries.
Speaker 2 (15:44):
Which interestingly, the reason why the Social Security Act had
the stuff that they removed in it was in order
to try to make it more sustainable back in nineteen
eighty three. So look, this is why we're screwed. Okay,
(16:04):
here's the thing, Like, you can't just have all the
fun stuff, and all we want to do is have
the fun stuff. And I don't blame anyone who's you know,
getting more money because of this, now, Like that's it's
(16:25):
not your fault. This is all of our faults. Like
we've all kind of screwed up on this because.
Speaker 5 (16:35):
We consistently we elect people who over promise us things.
Speaker 2 (16:39):
It's not even that I don't think they do over
promise us things. I don't think like anyone really believes
that anyone elected to Congress is going to do anything
at this point, you know, Like I don't think there's
high expectations there. I think the problem is that we're
just unwilling to deal with anything getting worse in the
(17:04):
short term in order to make it better in the
long term. Right now, and we're just really impatient to
the point where it's like if we feel the slightest
bit uncomfortable for a couple of months, we lose our minds.
Speaker 5 (17:20):
Yeah, the famous quote ask not what my country can
do for me, but what I can do for my care.
Speaker 3 (17:27):
It seems almost unread.
Speaker 2 (17:28):
I thought you were gonna go Churchill on me.
Speaker 3 (17:29):
Yeah, it seems almost unrecognizable.
Speaker 2 (17:31):
And Churchill was you can always count on Americans to
do the right thing after all other options have been exhausted. Like,
it's kind of where we are politically, Like we're just
like social Security is going to run out of money
in six years and benefits will have to be reduced
unless we change course. And no one's talking about it
(17:53):
for midterm elections. Correct, no one's talking about it. Have
you heard the word social security once? Aside from no
tax on social Security? No.
Speaker 5 (18:05):
To be fair, I do my very best to not
pay attention to political ads. Well I don't either, but
I don't hear it anywhere. But Mike, think about like
what we.
Speaker 2 (18:12):
Read like, not even from a political sense, think about
it just from the the problems that we hear about. Economically,
we hear about affordability, which is, you know, a real problem.
We hear about k shaped economy. We hear about a
slowing job market, and we hear about a sluggish housing market.
Those are like the bad things. The good things that
we hear about are you know, AI is booming and
(18:36):
he is booming. But does anyone look at Social Security
be like, hey, guys, in six years, we're gonna have
a real problem here. No, Like, this is the first
time we've talked about this, chuck in politics. Six years
may as well be a century. The problem is that
it's just it's I recognize it's not Mike. If if
(18:57):
if we had fixed this when I was born, it
would have been so easy. It would have been like,
raise Social Security taxes by a tenth of a percent,
And now it's gonna be like, donate a vegetable farm
each in order to figure out how to make the
program solvent.
Speaker 3 (19:14):
Nope, just blow out the deficit, that's what they'll do.
Speaker 2 (19:17):
Even more, it's just a little discouraging to me as
someone who would like to see a little bit of
fiscal responsibility. The fact that you have senators who voted
to worsen this saying oh, this could be a problem,
really disappointing. It could be quick break here and uh
Wall Street watching the Trip Answer.
Speaker 1 (19:35):
Next, bringing the latest financial news straight to your radio.
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street. Watch a complete
look at what's moving markets so far today right here
(19:56):
on the Financial Exchange Radio Network.
Speaker 6 (20:00):
Also Choppy training to begin twenty twenty six after an
early rally was a race, leading to a mixed and
mostly flat market.
Speaker 4 (20:07):
At the moment, UH.
Speaker 6 (20:09):
The Dow is up three tenths of one percent, or
one hundred and fifty one points. SMP five hundred is
edging four points higher, Nasdaq dipping by nine points. It
was up over one percent in early trading. Russell two
thousand is up over half a percent. Ten Your Treasure
realed up three basis points at four point one eighty
three percent, and crude oil down about one percent lower
(20:33):
trading fifty six dollars and seventy six cents a barrel.
Tesla down over one percent after the ev maker reported
just over four hundred and eighteen thousand vehicle deliveries in
the fourth quarter, down sixteen percent from a year ago.
Well Street analysts were expecting about four hundred and twenty
six thousand deliveries. Sticking with auto where Chinese carmaker BYD
(20:55):
saw its sales growth slow significantly in twenty twenty five,
but is still to top Tesla as the world's biggest
ev maker. BID stock climbed over three percent on that news. Meanwhile,
several furniture stocks are garnering attention after prisident Trump delayed
a thirty percent Terrified on upholstered furniture, Kitchen Cabinets and
(21:16):
Vanity's Wayfair and Williams Sonoma are now up over five percent,
while RIH shares are now rallying ten percent. War By
Parker stock is up three percent after Loop Capital named
the eyeglasses maker one of its top picks for twenty
twenty six, citing the firms expanding Ebita margins. I'm Tucker Silva,
and that is Wall Street Watching. In the previous segment,
(21:38):
we asked you the trivia question, where does Warren Buffett
get his breakfast from work?
Speaker 2 (21:43):
Every day.
Speaker 6 (21:44):
That would be McDonald's. Mike from Barnstable, mass is our
winner today taking them a Financial Exchange Show t shirt.
Congrats to Mike and we play trivia every day here
in the Financial Exchange See complete contest rules at Financial
Exchange Show dot com.
Speaker 5 (21:58):
It's a new year, which means a brand new guide
from the Armstrong Advisory Group. And when we were thinking
about guides to create for this for this month, we
really were asking ourselves, like, what are some of the
most common questions that we get from listeners, clients, et cetera.
Speaker 3 (22:14):
And by far one of the most common ones has.
Speaker 5 (22:16):
To do with Social Security and Medicare, And so we
put together a brand new guide for January how to
apply for Social Security and Medicare. It doesn't only go
through you know what required documents you're going to need,
like you know your previous marriage history, work history, which
you do need, but it also gives you some context
for when should you apply. What are the different returns
(22:39):
that you will see on your Social Security benefit by
delaying those overall benefits?
Speaker 2 (22:43):
What do you actually have to do to apply?
Speaker 3 (22:45):
Yeah, like what is needed to file your application?
Speaker 5 (22:48):
What are the tax consequences of receiving Social Security income
depending on where you live, and same goes from medicare.
What exactly does this stuff cover? What is the difference ABCD?
How does all of this stuff work for a lot
of folks that are you know already there you've been
through this. For anyone under the age of sixty five,
(23:09):
you're likely getting your first introduction to it just as
you get closer to that date. If you want to
feel prepared in the new year and get ready for
that next stage of life, please call the Armstrong Advisor
Group and request your free copy of how to Apply
for Social Security and Medicacre. Again it's our free guide
for January how to Apply for Social Security and Medicare.
(23:30):
You can get it by calling us at eight hundred
three nine three for zero zero one. You can also
request it online at Armstrong Advisory dot com, but that
phone number once again for our free guide on Social
Security and Medicare is eight hundred three nine three for
zero zero one.
Speaker 1 (23:45):
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
advice services.
Speaker 2 (24:02):
We want to talk a little bit about Warren Buffett.
Speaker 3 (24:04):
So as five years old and retired yesterday two days ago.
Speaker 2 (24:08):
Two days ago. So as of today, you know, Warren
Buffett is officially retired. And I want to dig in
on this quote that he had because he's going to
be doing He recorded a series of interviews with Becky
Quick from CNBC Sure and this quote I think is interesting.
He says, I think Berkshire Hathaway has a better chance
(24:32):
of being here one hundred years from now than any
company I can think of. So the question that I
would love to ask Buffett, and again like I don't
think the full interview is available right now.
Speaker 3 (24:44):
Who else is on the list?
Speaker 2 (24:45):
Well, I have a few questions I'd like to ask.
The first is what do you think the chance is
that Berkshire Hathaway is here one hundred Because he's not
saying I'm one hundred percent sure will be.
Speaker 3 (24:58):
There, saying it's got the best chance of all the
ones that are like.
Speaker 2 (25:01):
Does he think it's a seventy percent chance? Does he
think it's a twenty percent chance. I don't know. The
next one is who do you think is your closest
competition in that respect, not in terms of you know
your competitors in business, but who do you think has
you know, the right mix to be able to say, yeah,
(25:22):
we think we've got a good chance of being here
one hundred years from now. And the other piece on
this that I think is interesting is when we look
at companies that have been dominated by one individual historically,
(25:44):
there's not really the best track record of what happens
when they're gone. There's a handful that I think you
can point to and you're like, yep, they've been able
to do well. Apple's one of them for the last
you know, fourteen years, now, fifteen years, it'll be this fall.
But you know, you think about some of these other ones,
and you know ge Post, Jack Welch and frankly.
Speaker 3 (26:06):
That environment any of them you can think of.
Speaker 5 (26:09):
I don't know the tenure of any of those CEOs
off the top of my head, but they have to
be less than half of what the period of time
that Buffet's headed Berkshire Hathway.
Speaker 2 (26:20):
Now, the question on this Buffett historically and again this
is all anecdotal. So like I, I've never talked to
Warren Buffett. I've never worked at any of his businesses.
You know, I bought a couch and some furniture from
Jordan's Furniture once, but that's as close as I've ever
gotten to Warren Buffett.
Speaker 3 (26:37):
Yeah, I got an ice cream from DQ, so we're
basically the best bud there.
Speaker 2 (26:40):
You go, you spilled it on my couch and they
don't own a cleaning service, so we couldn't help. But
I think that when you look at the way they've
built the company, my understanding is that Buffett has generally said,
I don't want us to be involved in running all
of these separate businesses, since he lets them kind of
(27:02):
run themselves, and so in theory, maybe that is what
makes it so that he believes that him leaving isn't
as important, is because these businesses have run themselves and
all they did was invest in them.
Speaker 1 (27:15):
Right.
Speaker 2 (27:15):
But I just one hundred years is an eternity for
a business. I mean ten years is a long time
for a business. One hundred years yeah, I mean one
hundred years barely been invented, what had barely been band aids.
They've invented in nineteen twenty. So I don't know. I
(27:41):
wonder what what Buffett would handicap as the likelihood that
Berkshire's around one hundred years might be it might be
one in ten. My guess is he would say like
twenty to twenty five percent.
Speaker 3 (27:52):
Yeah, I'll give it to him.
Speaker 5 (27:54):
Like if diversification is the winning attribute there, then yeah,
few companies have it better than that.
Speaker 3 (28:03):
One.
Speaker 2 (28:04):
To take a quick break. When we come back, we're
going to be joined by Paul Lamonica from Barons right
after this.
Speaker 1 (28:10):
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(28:33):
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Ladies and Gentlemen.
Speaker 6 (28:49):
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Speaker 2 (29:24):
As promised. We're joined now by Paul Lamonica from Barons
here to chat with us on the first Friday of
twenty twenty six. Paul, how you doing today.
Speaker 7 (29:35):
I'm good. Thanks, Happy new year everyone.
Speaker 2 (29:37):
And same to you. We're talking today about the dogs
of the Doo. What are the dogs of the dow? Paul, Yeah.
Speaker 7 (29:46):
The dogs in the Dow are the companies in the
Dow thirty that had the highest dividend yields the previous year.
So the top ten income producing, high yielding stocks, and
you know, there's this notion that if you buy them,
that that group could outperform the market in the coming year.
(30:11):
It's had a mixed track record in the past few years,
but you know, the Dow dogs did outperform the broader
market in twenty twenty five, and it's going to be
interesting to see what happens this year because seven of
the ten companies that were Dogs of the Dow in
twenty twenty five are once again still high yielding enough
(30:33):
to be Dogs of the Dow this year. There are
three stocks, you know, Cisco, IBM, and McDonald's that are
leaving this group, and they're being replaced by three that
were under performers last year that maybe could turn around
Home Depot, you know, if the housing market bounces back
with interest rates coming down. United Health, you know, we
all know about their high profile problems, you know, and
(30:57):
then also Nike, which you know, I think is bit
of a turnaround story, hopes that their Newish CEO can
bring back you know, the former glory for that athletic
apparel giant. Paul.
Speaker 2 (31:08):
What's that like? The historical relevance and development of this
Dogs of the Dow strategy, like, can you tell our
listeners just a little bit about like what you know,
why this matters or does this matter historically?
Speaker 7 (31:20):
Yeah, historically, you know, the Dogs of the Dow have
done reasonably well, you know. And the premise is that
you are buying companies that are obviously already blue chips.
They're among the thirty of you know, exclusive members of
the Dow Jones Industrial Average. But in addition to that,
you also have the income that you get from the
(31:45):
high dividend yields that these companies offer. So even if
you're getting a little bit of appreciation from earnings growth,
you can also get some pretty spectacular dividend you know,
kickers as well. You look at the top two two
stocks in the Dogs of the Dow, for Verizon with
a yield you know, well over six percent and Chevron
(32:08):
you know, as a yield I think north of four
percent as well. So you take that if you just
get a little bit of appreciation from steady earnings growth,
and you you could be looking at you know, double
digit appreciation for those two stocks in particular, how high
their dividend yields are. The rest of the Dogs of
the Dow the yields aren't that high. They range around
(32:30):
two and a half to three percent, which is still,
you know, pretty solid, especially if you think bond yields
are going to fall further as the Fed cuts rates.
Speaker 2 (32:39):
Paul, you mentioned that in recent years these strategy has
had mixed results. Can you give some examples and talk
about why that might have been the case?
Speaker 7 (32:49):
Yeah, I think that in some respects, the companies in
the Magnificent seven that have been darlings of the market,
a lot of them do pay dividends, and some of
them are in the down now in Video, Microsoft, Apple,
obviously Amazon, but you know, Amazon not paying a dividend yet.
(33:10):
But the other three do pay dividends. They're dividends while
steady and solid and are growing, they're not as high
as what you'll get from say, Merk, Jay and Jay
some of the healthcare names of you know, an addition
to Verizon and Chevron in the Dow. So, you know,
I think investors who have been really enamored with the
(33:33):
AI trade and these earnings momentum plays, they don't particularly
care as much about the dividends. It's nice that, you know,
a company like Nvidia pays a small dividend, but no
one in there is really buying in video as an
income play the way they are with Verizon and some
of these stodgier Dow Dog stocks.
Speaker 2 (33:52):
Very good, Paul, appreciate you joining us. So you have
a great start to twenty twenty six and we're looking
forward to chatting with you over the course of the year.
Speaker 7 (34:02):
Thank you very much. Guys, look forward to doing this
again next Friday.
Speaker 2 (34:05):
That is Paul Monica from Barons talking about the dogs
of the Dow Sure was over to you, Michael, What
do you have for me?
Speaker 5 (34:14):
Wall Street Journal reports that parents are going broke from
their kids sushi obsession.
Speaker 3 (34:19):
Can confirm, can confirm? I will? It surprises me.
Speaker 5 (34:24):
I don't think I had sushi as a kid until
I don't know, maybe maybe I was like eighteen or
high school. College wasn't readily available in most towns today.
Most certainly is I can attest that if you go
to any grocery store today everywhere, I can attest that
(34:45):
if I ever asked my kids what they want to
do for dinner, because we're doing takeout on the time,
the answer is sushi.
Speaker 3 (34:52):
Interesting one undred percent of the time, the answer is sushi.
Speaker 4 (34:54):
So they're opting for what what like Tuna's.
Speaker 5 (34:57):
Samon, avocado roll and California roll. Those are their orders.
They will then pick at all the stuff that I
order for myself, but they one hundred percent that is
what they order, and it is expensive, but you know what,
it's also a lot healthier than the other things that
they would like to eat, like a you know, a
(35:18):
chicken patty sandwich or pizza, and so.
Speaker 2 (35:21):
Wrong with the chicken patty sandwich or pizza.
Speaker 5 (35:23):
Again, wrong with either of them, but you know, compared
to sushi, I would consider them to be a little
bit less healthy. And so yeah, I guess I'm willing
to pay the price within reason. We try not to
do it more than like once every other week, but yeah,
it is it is a change, what I mean because
of this, I'm expecting I already see a lot more
sushi restaurants. But what's probably coming is like faster food
(35:47):
sushi change would be my guest.
Speaker 2 (35:49):
Oh yeah, how's that gonna end badly?
Speaker 5 (35:51):
That's that's like the chipotles of sushi I think are
coming for twenty twenty six.
Speaker 6 (35:55):
Let me get your thoughts on this, Mike. There's an
establishment by me very nice establishment. On Sundays they offer
half off sushi. Thoughts, there's a reason it's half off.
What happened to the half of what happened to the
half on? Yeah, because they get a new shipment on
I know, Monday or Tuesday. I've done it three times
(36:18):
and I was fine.
Speaker 5 (36:18):
Yeah, I'll mainly stick to the California and Philadelphia roles,
but yeah, I'll go for it.
Speaker 4 (36:23):
Okay, Yeah, just curious.
Speaker 5 (36:25):
Yeah, good question. So I mean you go to Japan
like you get sushi had a seven eleven. Yeah, I
think that's more what's coming for the United States.
Speaker 2 (36:32):
I gotta be honest, Like, I have eaten a decent
amount of sushi in my life, have never had a
problem from it, No, I haven't. On the other hand,
I've eaten a decent amount of oysters in my life.
Have had several problems from the euro problems from oysters,
have had several problems with them, one to the point
at a wedding where I was so violently I had
to leave the wedding, thankfully not my own. That was quick. Yeah,
(36:55):
it was not good.
Speaker 5 (36:57):
The article describes these kids saying they are like savages
and also can confirm The quantity of sushi they eat
in such a short period of time is stunning. And
these kids are My kids are seven and nine years old.
Yeah so yeah, I mean, look, it's they're savages in
every other way too, those of that part's not right here.
Speaker 2 (37:18):
Here's the problem is you take a kid being able
to eat a pint of blueberries in a sitting, and
now you picture a pint of sushi and you're like, yep,
they can do that. Yeah, so I understand that. I
don't know. We're still big, you know, pizza fans in
our house.
Speaker 3 (37:35):
We had pizza last night, but if I asked my
kids what they want, it's sushi.
Speaker 2 (37:40):
Interesting. Interesting. We mine are younger. We haven't quite gotten
there yet. You know. My two year old would look
up and be like, oh fishy ha ha, Like you know, yeah,
but uh yeah, we're not quite there yet. And I
guess we'll wait. I don't think you're supposed to feed
a two.
Speaker 5 (37:55):
Year old raw fish, not three times a day. That'll
give you mercury poisoning.
Speaker 2 (38:00):
Oh yeah, got it.
Speaker 3 (38:01):
Gotta be careful, that.
Speaker 2 (38:02):
Got it. Let's take a quick break for uh, it's
actually the weekend. It keeps feeling like a Monday, but
it's Friday, so we're gonna take a weekend.
Speaker 3 (38:09):
Everybody.
Speaker 2 (38:10):
Yeah, we'll take a break for the weekend. We'll see
you on Monday.
Speaker 4 (38:12):
Happy New Year. It see the only time you can
head that too.
Speaker 3 (38:15):
I'll be saying it for the next three weeks to
anger Tucker
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(01:06):
and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike, and talker with you here on the first
trading day of twenty twenty six. I hope you all
are off to a great start this year. But I
got to tell you markets, they h no Santa Claus rally, No,
They're going off flip floppy big.
Speaker 3 (01:27):
One on Monday. If you're gonna get anything out of
this one.
Speaker 2 (01:29):
Yeah, which again, who knows, Like what's gonna happen on Monday,
because quite honestly, today pretty low volume day. I gotta
be honest, I'm a little messed up today, like more
than normal. You know, it's it's not Friday.
Speaker 4 (01:45):
Yeah, I thought yesterday was Saturday.
Speaker 2 (01:47):
My alarm went off this morning.
Speaker 4 (01:49):
I work tomorrow.
Speaker 2 (01:49):
What Yeah, my alarm went off this morning. I'm like,
oh good, it's Monday. And then I'm driving in I'm like,
wait a minute, I don't have to work tomorrow. That yeah.
Speaker 4 (01:57):
Not a fan of this holiday schedule, I.
Speaker 2 (01:59):
Kind of I am, actually, I know, I enjoy having
weeks split up by back to back holidays makes it
rather quiet.
Speaker 5 (02:08):
Yeah, I'm a fan as well, But yeah, I mean, look,
consuming your body weight and alcohol and sugar over the
course of the last week and a half will do.
Speaker 2 (02:15):
That to you.
Speaker 4 (02:16):
How's that different from any other weeks?
Speaker 2 (02:18):
Yeah? Question what your body weight in alcohol? That would
be a lot because you're not sugar the sugar. Well,
I mean that's a lot of sugar too. What do
you think is worse for you your body weight and
alcohol or body weight in sugar?
Speaker 4 (02:33):
Sugar?
Speaker 2 (02:36):
Alcohol is technically a kind of sugar, I believe. Trick
question in any case, the markets right now that we're good. Well,
here's the thing. If you have your body weight and alcohol,
you're not alive. So it's probably that Gemini, I'll tell us.
Oh yeah, doctor Gemini, what do you have to say
on this? Uh? Okay, while we're on the tangent, did
you know that in Utah most states it's ab alcohol
(03:00):
by volume. Utah is ABW. If you bring it's alcohol
by weight, and because alcohol weighs less than water, you
actually get a They limit the alcohol concentration, but it's
by weight, not by volume, and so you actually get
more than the equivalent ABV.
Speaker 5 (03:19):
Gemini is telling me that consuming your body weight and
alcohol over the course of a week is almost certainly fatal.
Speaker 2 (03:24):
Yes, I believe that, but like likewise, if i'd like
one hundred and seventy pounds of sugar, I can't imagine
that being good for me either.
Speaker 3 (03:34):
Yeah, yeah, Well, don't know until you're.
Speaker 2 (03:39):
Dry, and don't Neither one's great. The sp five hundred
down eight points, about a tenth of a percent. The
Dow is up forty seven points, about a tenth of
a percent. The Nasdaq Composite down seventy two points a
third of a percent. Big reversal in mag seven names
over the last twenty thirty minutes. Haven't seen any news
driving it, but this is, you know, kind of what
(04:00):
we're seeing here as of this point ten. Your Treasury
up two point six basis points to four point one
seventy nine percent, So just continuing to flutter in that
four to one to four two range. Dollar index down
point one two percent to ninety seven ninety two. We've
got gold up another seven eighty and ounce to forty
three forty eight and sixty cents, and we've got crude
(04:22):
oil down sixty five cents a barrel to fifty six
seventy seven, and the TRIPA national avatur gas price is
down another three tenths of ascent. We're at two point
eighty three, so continuing to see falling gas prices nationwide,
which if we happen to be listening to us on
the road and you don't work in the energy industry,
you're very appreciative of those who work in the energy
industry are kind of like, yeah, yeah, just a good brunt.
Speaker 5 (04:48):
I'll just throw out there that if we don't get
a reversal on Monday with stocks up, be prepared for
all the articles that are going to be written on
Tuesday and over the course of the following few weeks
about what happens when you don't get a Santa Claus
rally historically and what you should do with your portfolio now,
And I urge you with the strongest sense to ignore.
Speaker 3 (05:08):
All of them.
Speaker 4 (05:09):
It'll be the lead of the show on Tuesday.
Speaker 2 (05:11):
Yeah, So if that happened, will stocks we will money again?
And ignore it?
Speaker 3 (05:18):
Yeah?
Speaker 2 (05:19):
What to do when your portfolio is down for four days?
Speaker 3 (05:22):
Right?
Speaker 2 (05:22):
Remember?
Speaker 5 (05:22):
I mean this is precisely what happened last year, wasn't
it saying it was two years ago? I think it
was twenty twenty four, I don't remember, But the first
like five days of the year were bad, is right?
What about how when the markets go down for the
first like two days of the year, everything terrible happens,
and then we got double digit returns.
Speaker 2 (05:41):
Of course, gotta say, like, let's I'm glad that you
brought this up to a certain extent if you look
at S and P performance, uh, just on an annual basis,
here in terms of what we've seen recently, like we
got to like, be honest, twenty twenty three up twenty
four percent, YEP, twenty twenty four up twenty three percent,
(06:04):
twenty twenty five up sixteen percent. That's like back to
back to back, pretty darn good performance. The only string
in recent history that is continued, you know, kind of
beyond a three year stretch of anything like this. I
know you don't want me to say it. It's the
(06:25):
tech bubble. Aside from that, the next closest one that
we have was twenty nineteen twenty and twenty one, and
I think we can all admit that twenty twenty and
twenty one might have been caused by a fiscal stimulus
that isn't coming back anytime soon. But like you look,
(06:48):
aside from this, it's pretty much tech bubble or bust
in terms of three year stretches that you have, you know,
in this kind of company. The only other thing that's
maybe comparable, and again I say maybe just because you
really got to cram most of the performance into two
years is nineteen fifty four and nineteen fifty five, where
(07:10):
you went forty five percent and then twenty six percent
back to back years. Other than that, we're in pretty
rarefied air. And that's why I really wanted to cover
the piece talking about how retail traders or this new
you know, so that's okay, let me let me go
get it because I put it somewhere. Do you have it?
Speaker 5 (07:31):
Yeah, there is a Wall Street Journal piece that everyday
traders have gone from the fringe players to dominant market force.
They drove major returns and reversals in markets this year
or sorry, it's last year. For instance, during the tariff
related fiasco in markets in April.
Speaker 3 (07:50):
They are being.
Speaker 5 (07:51):
Held responsible for some of the big rallies in commodity prices.
And you know, certainly you can point to them over
the last few years during the twenty twenty one meme craze.
And so are they some now permanent fixture or are
they just waiting to be washed out?
Speaker 3 (08:07):
With the next crisis.
Speaker 2 (08:08):
Yes, And what I mean by that is, I do
think so you saw these pieces published during the tech
bubble as well about you know, all these people that
you know started making more and more money trading and
you know, blah blah blah, and uh, it's you know,
it's a new paradigm and it's a new world. And
you know this was back when each trade was you know,
kicking down the doors and giving average people access to
(08:30):
markets that they didn't have before. And I do think
it's true that this is going to be a group
of people that does continue to grow and you know,
trade more and become more of a force. But here's
the other thing. This is also happening against the backdrop
(08:54):
of one of the best three year returns in markets
that we have ever seen. And they don't ring a
bell at the top, but they do write articles. And
this is the kind of stuff that you start to
read when people start getting a little too exuberant and
a little too confident that they are doing something as
(09:15):
opposed to conditions have existed that have enabled them to
do something that might not exist permanently. So if you're
out there and you believe that the market is going
to return twenty percent annualized going forward. You're a little
bit more optimistic than me. You just are, because ultimately,
(09:36):
there are two ways for markets to return twenty percent
in a year. Earnings have to go up by that much,
or multiples have to expand, and eventually you run out
of ways for earnings to go up that much while
actual humans can still have money to spend, and likewise,
(09:57):
you get to a point where multiples expand to the
point where people say, Nope, that's good, I finally had enough.
I'm not saying that like we're done. Like, maybe you
do have another twenty percent year this year. It's it's possible. Sure,
the tech bubble had a five year stretch where it
averaged more than twenty percent for the S and P
five hundred, so like this could continue, but it won't
(10:18):
be forever.
Speaker 3 (10:20):
Nothing's forever.
Speaker 2 (10:21):
Check And that's my point is the success that these
retail traders have had the last couple of years is
not going to be a permanent fixture because markets just
aren't going to do this forever. They can't. I wish
that they could. It would make all of our lives
a lot easier and better, but I just don't believe that.
(10:41):
You know, that's gonna be what we see quick break here.
When we come back, we've got trivia, and then we're
gonna be talking about social security and midterm elections. Why
does this matter? We'll tell you right after this.
Speaker 1 (10:56):
Here the Financial Exchange every day from eleven to now
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(11:17):
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Subscribe to our page and get caught up on anything
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Exchange Radio Network.
Speaker 4 (11:35):
All right, Sam for trivia.
Speaker 6 (11:36):
You're on a Financial exchange and Warren Buffett has officially
left his position as CEO of Berkshire Hathaway. The ninety
five year old has famously survived and even thrived with
his preferred childlike diet. He drinks five twelve ounce cokes
every day. So trivia question today, where does Warren Buffett
get his breakfast from? Every work day once again, where
(11:59):
does this Warren Buffe get his breakfast from every workday?
Be the third person today to text us at six
one seven three six two thirteen eighty five with the
correct answer along with the keyword trivia, and you'll win
a Financial Exchange Show T shirt.
Speaker 2 (12:16):
Once again.
Speaker 6 (12:17):
The third correct response to text us to the number
six one seven three six to two thirteen eighty five
with 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 (12:31):
Uh This fall, in November, Americans will head to the
polls for midterm elections and the is it thirty three
or thirty four senators? This one? I can't remember which
class this is? Oh no, In any case, the thirty
three or thirty four senators who are elected this year
will serve six year terms just so like every other
senator does. The difference is that Social Security the trust
(12:56):
Fund is expected to become insolvent late twenty thirty two,
at which point the senators that are elected this fall
will still have to deal with it. So what's interesting
to me is you look at all of the chatter
and all of the you know, things that people are
talking about from a political perspective, right now, does social
(13:20):
Security get mentioned once?
Speaker 3 (13:22):
Not on the list?
Speaker 2 (13:23):
And this group of senators will actually have to be
have to be instrumental in determining what the program looks
like beyond twenty thirty two. Now you might say, oh, chuck,
they're not going to do anything, they're lazy, and they're
not even going to hold a vote at That's fine,
that's still a decision. That's still a decision that they're
(13:43):
going to make. But ultimately, there's no one else who
is occupying office at the moment that you can guarantee
will still be occupying office at that time, aside from
these thirty three senators.
Speaker 5 (13:58):
I suppose something weird could happen where the trust fund
doesn't run up by twenty thirty two.
Speaker 3 (14:02):
So no way to guarantee that.
Speaker 5 (14:04):
You'd have to see probably a big economic boom over
the course of the next.
Speaker 2 (14:08):
Generally, fiscally we've been on a twenty five year path
of worsening, and so it'd be very surprising if it refuses.
Speaker 5 (14:15):
For I just I just want to acknowledge that it's
not technically a guarantee. It's an estimate of when it
will run out. I'd be willing to bet it runs
out sooner.
Speaker 2 (14:22):
But like when I started this job, I think it
was twenty thirty four thirty five that was projected to
run out, and now we're at twenty thirty two.
Speaker 3 (14:30):
Kept getting worse.
Speaker 5 (14:31):
Yeah, quote from Senator Mark Warner, it's been disappointing that
we have kicked this can this long. That's from you know,
one of the senators who co sponsored the Social Security
Fairness Act, which worsened, not bettered, the situation for the
Social Security Trust Fund plenty to blame to go around there.
By the way, that was very heavily supported bipartisan vote.
(14:52):
I think seventy plus votes for a YA on that one.
But yeah, it is a looming issue, and this will
be the first group of elected senators that will actually
need to address it during their during their tenure. Trying
to see and my guest, by the way, is it's
tackled in you know, forty five days prior to the
(15:14):
actual runout of money. Trying to see what the Social
Security Fairness Act actually passed by. Yeah, I was three
twenty seven to seventy five in the House in seventy
six twenty in the Senate yeap.
Speaker 2 (15:27):
Again and again.
Speaker 5 (15:28):
We can talk about the fairness of it and why
that should have been done, but the clear mathematical result
was that the trust fund will you know, run out
of money a little bit sooner than it otherwise would
have because all you did was increased benefits for a
group of beneficiaries.
Speaker 2 (15:44):
Which interestingly, the reason why the Social Security Act had
the stuff that they removed in it was in order
to try to make it more sustainable back in nineteen
eighty three. So look, this is why we're screwed. Okay,
(16:04):
here's the thing, Like, you can't just have all the
fun stuff, and all we want to do is have
the fun stuff. And I don't blame anyone who's you know,
getting more money because of this, now, Like that's it's
(16:25):
not your fault. This is all of our faults. Like
we've all kind of screwed up on this because.
Speaker 5 (16:35):
We consistently we elect people who over promise us things.
Speaker 2 (16:39):
It's not even that I don't think they do over
promise us things. I don't think like anyone really believes
that anyone elected to Congress is going to do anything
at this point, you know, Like I don't think there's
high expectations there. I think the problem is that we're
just unwilling to deal with anything getting worse in the
(17:04):
short term in order to make it better in the
long term. Right now, and we're just really impatient to
the point where it's like if we feel the slightest
bit uncomfortable for a couple of months, we lose our minds.
Speaker 5 (17:20):
Yeah, the famous quote ask not what my country can
do for me, but what I can do for my care.
Speaker 3 (17:27):
It seems almost unread.
Speaker 2 (17:28):
I thought you were gonna go Churchill on me.
Speaker 3 (17:29):
Yeah, it seems almost unrecognizable.
Speaker 2 (17:31):
And Churchill was you can always count on Americans to
do the right thing after all other options have been exhausted. Like,
it's kind of where we are politically, Like we're just
like social Security is going to run out of money
in six years and benefits will have to be reduced
unless we change course. And no one's talking about it
(17:53):
for midterm elections. Correct, no one's talking about it. Have
you heard the word social security once? Aside from no
tax on social Security? No.
Speaker 5 (18:05):
To be fair, I do my very best to not
pay attention to political ads. Well I don't either, but
I don't hear it anywhere. But Mike, think about like
what we.
Speaker 2 (18:12):
Read like, not even from a political sense, think about
it just from the the problems that we hear about. Economically,
we hear about affordability, which is, you know, a real problem.
We hear about k shaped economy. We hear about a
slowing job market, and we hear about a sluggish housing market.
Those are like the bad things. The good things that
we hear about are you know, AI is booming and
(18:36):
he is booming. But does anyone look at Social Security
be like, hey, guys, in six years, we're gonna have
a real problem here. No, Like, this is the first
time we've talked about this, chuck in politics. Six years
may as well be a century. The problem is that
it's just it's I recognize it's not Mike. If if
(18:57):
if we had fixed this when I was born, it
would have been so easy. It would have been like,
raise Social Security taxes by a tenth of a percent,
And now it's gonna be like, donate a vegetable farm
each in order to figure out how to make the
program solvent.
Speaker 3 (19:14):
Nope, just blow out the deficit, that's what they'll do.
Speaker 2 (19:17):
Even more, it's just a little discouraging to me as
someone who would like to see a little bit of
fiscal responsibility. The fact that you have senators who voted
to worsen this saying oh, this could be a problem,
really disappointing. It could be quick break here and uh
Wall Street watching the Trip Answer.
Speaker 1 (19:35):
Next, bringing the latest financial news straight to your radio.
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street. Watch a complete
look at what's moving markets so far today right here
(19:56):
on the Financial Exchange Radio Network.
Speaker 6 (20:00):
Also Choppy training to begin twenty twenty six after an
early rally was a race, leading to a mixed and
mostly flat market.
Speaker 4 (20:07):
At the moment, UH.
Speaker 6 (20:09):
The Dow is up three tenths of one percent, or
one hundred and fifty one points. SMP five hundred is
edging four points higher, Nasdaq dipping by nine points. It
was up over one percent in early trading. Russell two
thousand is up over half a percent. Ten Your Treasure
realed up three basis points at four point one eighty
three percent, and crude oil down about one percent lower
(20:33):
trading fifty six dollars and seventy six cents a barrel.
Tesla down over one percent after the ev maker reported
just over four hundred and eighteen thousand vehicle deliveries in
the fourth quarter, down sixteen percent from a year ago.
Well Street analysts were expecting about four hundred and twenty
six thousand deliveries. Sticking with auto where Chinese carmaker BYD
(20:55):
saw its sales growth slow significantly in twenty twenty five,
but is still to top Tesla as the world's biggest
ev maker. BID stock climbed over three percent on that news. Meanwhile,
several furniture stocks are garnering attention after prisident Trump delayed
a thirty percent Terrified on upholstered furniture, Kitchen Cabinets and
(21:16):
Vanity's Wayfair and Williams Sonoma are now up over five percent,
while RIH shares are now rallying ten percent. War By
Parker stock is up three percent after Loop Capital named
the eyeglasses maker one of its top picks for twenty
twenty six, citing the firms expanding Ebita margins. I'm Tucker Silva,
and that is Wall Street Watching. In the previous segment,
(21:38):
we asked you the trivia question, where does Warren Buffett
get his breakfast from work?
Speaker 2 (21:43):
Every day.
Speaker 6 (21:44):
That would be McDonald's. Mike from Barnstable, mass is our
winner today taking them a Financial Exchange Show t shirt.
Congrats to Mike and we play trivia every day here
in the Financial Exchange See complete contest rules at Financial
Exchange Show dot com.
Speaker 5 (21:58):
It's a new year, which means a brand new guide
from the Armstrong Advisory Group. And when we were thinking
about guides to create for this for this month, we
really were asking ourselves, like, what are some of the
most common questions that we get from listeners, clients, et cetera.
Speaker 3 (22:14):
And by far one of the most common ones has.
Speaker 5 (22:16):
To do with Social Security and Medicare, And so we
put together a brand new guide for January how to
apply for Social Security and Medicare. It doesn't only go
through you know what required documents you're going to need,
like you know your previous marriage history, work history, which
you do need, but it also gives you some context
for when should you apply. What are the different returns
(22:39):
that you will see on your Social Security benefit by
delaying those overall benefits?
Speaker 2 (22:43):
What do you actually have to do to apply?
Speaker 3 (22:45):
Yeah, like what is needed to file your application?
Speaker 5 (22:48):
What are the tax consequences of receiving Social Security income
depending on where you live, and same goes from medicare.
What exactly does this stuff cover? What is the difference ABCD?
How does all of this stuff work for a lot
of folks that are you know already there you've been
through this. For anyone under the age of sixty five,
(23:09):
you're likely getting your first introduction to it just as
you get closer to that date. If you want to
feel prepared in the new year and get ready for
that next stage of life, please call the Armstrong Advisor
Group and request your free copy of how to Apply
for Social Security and Medicacre. Again it's our free guide
for January how to Apply for Social Security and Medicare.
(23:30):
You can get it by calling us at eight hundred
three nine three for zero zero one. You can also
request it online at Armstrong Advisory dot com, but that
phone number once again for our free guide on Social
Security and Medicare is eight hundred three nine three for
zero zero one.
Speaker 1 (23:45):
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
advice services.
Speaker 2 (24:02):
We want to talk a little bit about Warren Buffett.
Speaker 3 (24:04):
So as five years old and retired yesterday two days ago.
Speaker 2 (24:08):
Two days ago. So as of today, you know, Warren
Buffett is officially retired. And I want to dig in
on this quote that he had because he's going to
be doing He recorded a series of interviews with Becky
Quick from CNBC Sure and this quote I think is interesting.
He says, I think Berkshire Hathaway has a better chance
(24:32):
of being here one hundred years from now than any
company I can think of. So the question that I
would love to ask Buffett, and again like I don't
think the full interview is available right now.
Speaker 3 (24:44):
Who else is on the list?
Speaker 2 (24:45):
Well, I have a few questions I'd like to ask.
The first is what do you think the chance is
that Berkshire Hathaway is here one hundred Because he's not
saying I'm one hundred percent sure will be.
Speaker 3 (24:58):
There, saying it's got the best chance of all the
ones that are like.
Speaker 2 (25:01):
Does he think it's a seventy percent chance? Does he
think it's a twenty percent chance. I don't know. The
next one is who do you think is your closest
competition in that respect, not in terms of you know
your competitors in business, but who do you think has
you know, the right mix to be able to say, yeah,
(25:22):
we think we've got a good chance of being here
one hundred years from now. And the other piece on
this that I think is interesting is when we look
at companies that have been dominated by one individual historically,
(25:44):
there's not really the best track record of what happens
when they're gone. There's a handful that I think you
can point to and you're like, yep, they've been able
to do well. Apple's one of them for the last
you know, fourteen years, now, fifteen years, it'll be this fall.
But you know, you think about some of these other ones,
and you know ge Post, Jack Welch and frankly.
Speaker 3 (26:06):
That environment any of them you can think of.
Speaker 5 (26:09):
I don't know the tenure of any of those CEOs
off the top of my head, but they have to
be less than half of what the period of time
that Buffet's headed Berkshire Hathway.
Speaker 2 (26:20):
Now, the question on this Buffett historically and again this
is all anecdotal. So like I, I've never talked to
Warren Buffett. I've never worked at any of his businesses.
You know, I bought a couch and some furniture from
Jordan's Furniture once, but that's as close as I've ever
gotten to Warren Buffett.
Speaker 3 (26:37):
Yeah, I got an ice cream from DQ, so we're
basically the best bud there.
Speaker 2 (26:40):
You go, you spilled it on my couch and they
don't own a cleaning service, so we couldn't help. But
I think that when you look at the way they've
built the company, my understanding is that Buffett has generally said,
I don't want us to be involved in running all
of these separate businesses, since he lets them kind of
(27:02):
run themselves, and so in theory, maybe that is what
makes it so that he believes that him leaving isn't
as important, is because these businesses have run themselves and
all they did was invest in them.
Speaker 1 (27:15):
Right.
Speaker 2 (27:15):
But I just one hundred years is an eternity for
a business. I mean ten years is a long time
for a business. One hundred years yeah, I mean one
hundred years barely been invented, what had barely been band aids.
They've invented in nineteen twenty. So I don't know. I
(27:41):
wonder what what Buffett would handicap as the likelihood that
Berkshire's around one hundred years might be it might be
one in ten. My guess is he would say like
twenty to twenty five percent.
Speaker 3 (27:52):
Yeah, I'll give it to him.
Speaker 5 (27:54):
Like if diversification is the winning attribute there, then yeah,
few companies have it better than that.
Speaker 3 (28:03):
One.
Speaker 2 (28:04):
To take a quick break. When we come back, we're
going to be joined by Paul Lamonica from Barons right
after this.
Speaker 1 (28:10):
The Financial Exchange Show podcast drops every day on Apple, Spotify,
and iHeartRadio. Hit that subscribe button and leave us a
five star review. You're listening to the Financial Exchange 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 business and financial news from across the country
(28:33):
and around the world, and keep up to date on
how it might affect your wallet. That's the Financial Exchange
weekdays from eleven to noon on Series XM's Business Radio
Channel one thirty two. Face He's the Financial Exchange Radio Network.
Ladies and Gentlemen.
Speaker 6 (28:49):
The weekend, the segment of the financial exchange is brought
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Speaker 2 (29:24):
As promised. We're joined now by Paul Lamonica from Barons
here to chat with us on the first Friday of
twenty twenty six. Paul, how you doing today.
Speaker 7 (29:35):
I'm good. Thanks, Happy new year everyone.
Speaker 2 (29:37):
And same to you. We're talking today about the dogs
of the Doo. What are the dogs of the dow? Paul, Yeah.
Speaker 7 (29:46):
The dogs in the Dow are the companies in the
Dow thirty that had the highest dividend yields the previous year.
So the top ten income producing, high yielding stocks, and
you know, there's this notion that if you buy them,
that that group could outperform the market in the coming year.
(30:11):
It's had a mixed track record in the past few years,
but you know, the Dow dogs did outperform the broader
market in twenty twenty five, and it's going to be
interesting to see what happens this year because seven of
the ten companies that were Dogs of the Dow in
twenty twenty five are once again still high yielding enough
(30:33):
to be Dogs of the Dow this year. There are
three stocks, you know, Cisco, IBM, and McDonald's that are
leaving this group, and they're being replaced by three that
were under performers last year that maybe could turn around
Home Depot, you know, if the housing market bounces back
with interest rates coming down. United Health, you know, we
all know about their high profile problems, you know, and
(30:57):
then also Nike, which you know, I think is bit
of a turnaround story, hopes that their Newish CEO can
bring back you know, the former glory for that athletic
apparel giant. Paul.
Speaker 2 (31:08):
What's that like? The historical relevance and development of this
Dogs of the Dow strategy, like, can you tell our
listeners just a little bit about like what you know,
why this matters or does this matter historically?
Speaker 7 (31:20):
Yeah, historically, you know, the Dogs of the Dow have
done reasonably well, you know. And the premise is that
you are buying companies that are obviously already blue chips.
They're among the thirty of you know, exclusive members of
the Dow Jones Industrial Average. But in addition to that,
you also have the income that you get from the
(31:45):
high dividend yields that these companies offer. So even if
you're getting a little bit of appreciation from earnings growth,
you can also get some pretty spectacular dividend you know,
kickers as well. You look at the top two two
stocks in the Dogs of the Dow, for Verizon with
a yield you know, well over six percent and Chevron
(32:08):
you know, as a yield I think north of four
percent as well. So you take that if you just
get a little bit of appreciation from steady earnings growth,
and you you could be looking at you know, double
digit appreciation for those two stocks in particular, how high
their dividend yields are. The rest of the Dogs of
the Dow the yields aren't that high. They range around
(32:30):
two and a half to three percent, which is still,
you know, pretty solid, especially if you think bond yields
are going to fall further as the Fed cuts rates.
Speaker 2 (32:39):
Paul, you mentioned that in recent years these strategy has
had mixed results. Can you give some examples and talk
about why that might have been the case?
Speaker 7 (32:49):
Yeah, I think that in some respects, the companies in
the Magnificent seven that have been darlings of the market,
a lot of them do pay dividends, and some of
them are in the down now in Video, Microsoft, Apple,
obviously Amazon, but you know, Amazon not paying a dividend yet.
(33:10):
But the other three do pay dividends. They're dividends while
steady and solid and are growing, they're not as high
as what you'll get from say, Merk, Jay and Jay
some of the healthcare names of you know, an addition
to Verizon and Chevron in the Dow. So, you know,
I think investors who have been really enamored with the
(33:33):
AI trade and these earnings momentum plays, they don't particularly
care as much about the dividends. It's nice that, you know,
a company like Nvidia pays a small dividend, but no
one in there is really buying in video as an
income play the way they are with Verizon and some
of these stodgier Dow Dog stocks.
Speaker 2 (33:52):
Very good, Paul, appreciate you joining us. So you have
a great start to twenty twenty six and we're looking
forward to chatting with you over the course of the year.
Speaker 7 (34:02):
Thank you very much. Guys, look forward to doing this
again next Friday.
Speaker 2 (34:05):
That is Paul Monica from Barons talking about the dogs
of the Dow Sure was over to you, Michael, What
do you have for me?
Speaker 5 (34:14):
Wall Street Journal reports that parents are going broke from
their kids sushi obsession.
Speaker 3 (34:19):
Can confirm, can confirm? I will? It surprises me.
Speaker 5 (34:24):
I don't think I had sushi as a kid until
I don't know, maybe maybe I was like eighteen or
high school. College wasn't readily available in most towns today.
Most certainly is I can attest that if you go
to any grocery store today everywhere, I can attest that
(34:45):
if I ever asked my kids what they want to
do for dinner, because we're doing takeout on the time,
the answer is sushi.
Speaker 3 (34:52):
Interesting one undred percent of the time, the answer is sushi.
Speaker 4 (34:54):
So they're opting for what what like Tuna's.
Speaker 5 (34:57):
Samon, avocado roll and California roll. Those are their orders.
They will then pick at all the stuff that I
order for myself, but they one hundred percent that is
what they order, and it is expensive, but you know what,
it's also a lot healthier than the other things that
they would like to eat, like a you know, a
(35:18):
chicken patty sandwich or pizza, and so.
Speaker 2 (35:21):
Wrong with the chicken patty sandwich or pizza.
Speaker 5 (35:23):
Again, wrong with either of them, but you know, compared
to sushi, I would consider them to be a little
bit less healthy. And so yeah, I guess I'm willing
to pay the price within reason. We try not to
do it more than like once every other week, but yeah,
it is it is a change, what I mean because
of this, I'm expecting I already see a lot more
sushi restaurants. But what's probably coming is like faster food
(35:47):
sushi change would be my guest.
Speaker 2 (35:49):
Oh yeah, how's that gonna end badly?
Speaker 5 (35:51):
That's that's like the chipotles of sushi I think are
coming for twenty twenty six.
Speaker 6 (35:55):
Let me get your thoughts on this, Mike. There's an
establishment by me very nice establishment. On Sundays they offer
half off sushi. Thoughts, there's a reason it's half off.
What happened to the half of what happened to the
half on? Yeah, because they get a new shipment on
I know, Monday or Tuesday. I've done it three times
(36:18):
and I was fine.
Speaker 5 (36:18):
Yeah, I'll mainly stick to the California and Philadelphia roles,
but yeah, I'll go for it.
Speaker 4 (36:23):
Okay, Yeah, just curious.
Speaker 5 (36:25):
Yeah, good question. So I mean you go to Japan
like you get sushi had a seven eleven. Yeah, I
think that's more what's coming for the United States.
Speaker 2 (36:32):
I gotta be honest, Like, I have eaten a decent
amount of sushi in my life, have never had a
problem from it, No, I haven't. On the other hand,
I've eaten a decent amount of oysters in my life.
Have had several problems from the euro problems from oysters,
have had several problems with them, one to the point
at a wedding where I was so violently I had
to leave the wedding, thankfully not my own. That was quick. Yeah,
(36:55):
it was not good.
Speaker 5 (36:57):
The article describes these kids saying they are like savages
and also can confirm The quantity of sushi they eat
in such a short period of time is stunning. And
these kids are My kids are seven and nine years old.
Yeah so yeah, I mean, look, it's they're savages in
every other way too, those of that part's not right here.
Speaker 2 (37:18):
Here's the problem is you take a kid being able
to eat a pint of blueberries in a sitting, and
now you picture a pint of sushi and you're like, yep,
they can do that. Yeah, so I understand that. I
don't know. We're still big, you know, pizza fans in
our house.
Speaker 3 (37:35):
We had pizza last night, but if I asked my
kids what they want, it's sushi.
Speaker 2 (37:40):
Interesting. Interesting. We mine are younger. We haven't quite gotten
there yet. You know. My two year old would look
up and be like, oh fishy ha ha, Like you know, yeah,
but uh yeah, we're not quite there yet. And I
guess we'll wait. I don't think you're supposed to feed
a two.
Speaker 5 (37:55):
Year old raw fish, not three times a day. That'll
give you mercury poisoning.
Speaker 2 (38:00):
Oh yeah, got it.
Speaker 3 (38:01):
Gotta be careful, that.
Speaker 2 (38:02):
Got it. Let's take a quick break for uh, it's
actually the weekend. It keeps feeling like a Monday, but
it's Friday, so we're gonna take a weekend.
Speaker 3 (38:09):
Everybody.
Speaker 2 (38:10):
Yeah, we'll take a break for the weekend. We'll see
you on Monday.
Speaker 4 (38:12):
Happy New Year. It see the only time you can
head that too.
Speaker 3 (38:15):
I'll be saying it for the next three weeks to
anger Tucker
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