March 21, 2025 • 38 mins
Chuck Zodda and Mike Armstrong wonder what spooked the S&P 500, because it wasn't the trade war. DoorDash partners with Klarna to bring buy-now-pay-later to food delivery. Is Nvidia addicted to being in the spotlight? A local pizza place is taking a stand against disrespectful families. Paul LaMonica, Barron's, joins the show to chat about leveraged ETFs focused on Tesla.
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Transcript
Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Kicking off hour two of the Financial Exchange is Chuck,
Mike and Tucker and stocks with again kind of a
modest sell off today, nothing big, nothing crazy. The dows
off a couple hundred points, about half a percent. The
S and P five hundred is off twenty five points,
are about half a percent. The nas necks down fifty
four points are about a third of a percent. So
(01:32):
just not much movement on that side of things. Tenure
Treasury is down four tenths of a basis point. Big
move really teeny move to four point two three seven percent. Uh,
and so just not too much going on.
Speaker 3 (01:50):
Again.
Speaker 2 (01:51):
He had kind of a sharper sell off to start
the day, but it's moderated as the day has gone on.
Speaker 4 (01:56):
Yeah, we were off what a full percentage point on
the S and P five hundred at the open, I believe,
so it has moderated a fair bit as some hope
to rally into the weekend.
Speaker 2 (02:04):
Perhaps you got oil up eighteen cents a barrel to
sixty eight twenty five on West Texas Intermediate Nationally where
continuing to see gas prices moving up as we move
over to the summer blend of gasoline now at three
twelve and nine tenths of a cent nationally, the price
of gold is down twenty three dollars and ten cents
nouns to threeenty twenty dollars and seventy cents, and so overall,
(02:30):
nothing too exciting at this point, but it's a Friday,
and all kinds of things can change. Especially, Hey, we
got March madness going on, and does the madness spill
over to the markets.
Speaker 3 (02:40):
Maybe it's market madness.
Speaker 4 (02:43):
That's probably why markets are so boring today. Right, all
of the gamblers, all of the games mail traders who
typically spend all time day day trading, are instead spending
their day gambling.
Speaker 3 (02:54):
Tip off in one hour. Who's the first game today?
Speaker 5 (02:57):
Oh?
Speaker 3 (02:57):
I forget, I don't know.
Speaker 2 (03:01):
I gotta say, first day of the tournament this year
underwhelm kind of mah. Yeah, they were like one and
a half good games there, Baylor.
Speaker 6 (03:08):
In Mississippi at twelve fifteen.
Speaker 2 (03:09):
Oh okay, fine, you know, not bad? Okay, eight nine
seats acceptable? Yeah, first day of the tournament this year
nothing great. I mean you had a couple of games
that were okay ish, you know that Missouri Drake game
was fine the end of the Clemson loss.
Speaker 3 (03:28):
To whoever it was McNeice.
Speaker 2 (03:31):
McNeice, Yeah, I guess I watched the first half of
that game where Clemson scored thirteen points in the entire half.
Speaker 6 (03:37):
Yeah, not great, And I'm sitting there going.
Speaker 3 (03:38):
What happened here?
Speaker 2 (03:39):
And then they scored forty nine in the second half,
or it might have been forty nine with like a
minute to play, even but yeah, just not a great
game overall. But it's neither here nor there. We're here
to talk about what spooked the S and P five
hundred and why it wasn't the trade war, because that's
the title of the piece from Bloomberg Opinion, and it
makes the point that, look, if this was really you know,
(04:00):
trade related, you'd be seeing things like, you know, automakers
and consumer discretionary companies getting hit harder, and instead you
saw big tech really struggling the most. And I always
get nervous when we try to, like after the fact,
assign blame is to, well, here's what really happened, And
(04:22):
most of the time you don't really know, like it's here,
it's not even you don't really know the idea that, hey,
the trade war would only, not only, but predominantly affect
you know, consumer stocks. It's it's missing the fact that
trading is not just about what's going on in the world,
(04:42):
but it's about how investors are positioned beforehand. And so
if they're positioned heavily in all the mag seven stuff
and this and that, yeah, the trade war could still
be the proximate cause for the selloff, even if it's
not selling off the stocks you think are supposed.
Speaker 4 (04:56):
To Ye, So an example here, I can think of
companies that would be more susceptible to the current talk
of trade war than general motors. Fair to say, yes,
stock's only down three percent this year. Yeah, so I
get what Near? Is the point that Near is making here?
The counterpoint that I would make is how do most
(05:17):
people invest these days, Chuck, in terms of tools that
they use within their investment portfolios. Say that again, the
tools that people use their investment portfolios, my argument would
be mainly mutual funds and exchange traded funds. I think
that's how predominantly a lot of people are investing these days.
Speaker 3 (05:36):
I thought you were going in a different place with this,
got it.
Speaker 4 (05:39):
So the point that I think I would make is
that when people get spooked about a trade war or
a recession or a cut to jobs or whatever might
play out. I don't think they're thinking it through so
logically to sell, Oh, say, well, I'd better go look
at my General Motors stock, or my auto maker or
(06:00):
my consumer discretionary brand stock. I think generally they're saying, hmm,
what's my biggest holding, what's done the best over the
last few years.
Speaker 5 (06:07):
Let me go dump some of that in order to
insulate myself a bit.
Speaker 2 (06:11):
Maybe yes, maybe, Like the other way is, oh, no,
this has done well, I'm not going to sell it.
So like you could come up with all these justifications
for whatever. Oh, Ultimately, sometimes you have to just look
at the random number generator and be like, this is
what it did today. And I don't know why. I
(06:31):
it bothers me that we have to have so much
certainty in today's world. I feel like people were more
embarrassed now than before to say that they don't know
why something happened.
Speaker 3 (06:40):
And I don't know if it's because we have like.
Speaker 2 (06:42):
Phones in our hand all the time, and so we
think that we should have access to all the information.
Speaker 4 (06:46):
And I don't think that's by the way, markets and
economic story goes across social politics, across media, like everywhere.
The idea has to be that I know everything, and.
Speaker 2 (06:58):
And like sometimes you can just look at the market
and be like, I have no idea why it did
what it did.
Speaker 4 (07:04):
I'm only like ninety nine percent sure that I'm not
living in the Truman Show right now.
Speaker 5 (07:09):
Well, what does that make me then? Paid actor?
Speaker 4 (07:13):
So yeah, that's I think we could all use a
higher dose of skepticism when it comes to our own
knowledge about the world. Sometimes you just don't know what's
going to happen next, and that's okay.
Speaker 2 (07:26):
Yeah, it's like we're kind of in a little bit
of an uncertain place, and in terms of you know
where this market and economy is going to go, there's
a lot of uncertainty about what policies you may or
may not see implemented in the next couple of weeks
as it relates to trade and how that could affect
all of this. And so I don't know, Like it's
(07:47):
okay to be like, yeah, we're just gonna have to
see what happens.
Speaker 4 (07:50):
We also shouldn't minimize that because while it is true
that there's always uncertainty, right I mean, that's kind of
the premise of this program is that, hey, you know,
these are all the things that are out there that
we're not sure about and what's going to happen next.
I think it is fair to qualify this period of
time as dealing with a lot more uncertainty than is typical.
Usually we have a better sense of what trade policy
(08:12):
is going to look like with our closest allies. Usually
we have a better sense of what tax rates might
look like over the next couple of years, and what
employment and spending at the government level is going to
look like. So I'll say domestically, I think we're facing
a higher degree of uncertainty, and you're seeing that echoed
by most surveys that are out there, and that's important
to acknowledge and could be contributing to this market selloff.
(08:36):
But again, we always face some degree of uncertainty when
it comes to what happens next.
Speaker 3 (08:42):
Take a quick break here when we come back. We
had a little bit of trivia right after this.
Speaker 1 (08:47):
Text US six one, seven, three, six, two thirteen eighty
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(09:09):
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Speaker 6 (09:34):
All right, Still a little trivia here on the Financial
Exchange And on this day, several years ago, Twitter founder
Jack Dorsey, excuse me sent out the first ever tweet.
Dorsey was at the helm of Twitter during its early stages,
and later returned to lead the company from twenty fifteen
(09:54):
until his departure in twenty twenty one. Trivia question today,
what year was Twitter launched? Once again? What year was
Twitter launched? Be the third person today to text us
at six one seven three six two thirteen eighty five
with the correct answer, and you win a brand new
Financial Exchange Show T shirt.
Speaker 3 (10:14):
Once again.
Speaker 6 (10:14):
The third correct response to text us at six one
seven three six two thirteen eighty five will get that
T shirt. See complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (10:25):
Okay, I just came across this and we need to
cover this story here because you know, every now and
then you see something and you're like, this is bad.
Speaker 3 (10:38):
This is bad. UH.
Speaker 2 (10:39):
So door Dash, the company that delivers food to your
house or wherever it is that you happen to be
uh has apparently as of yesterday, partnered with Karna, who
is a buy now, pay later service, a bumple if
you will.
Speaker 4 (10:55):
There's a lot of people that are probably not familiar
with buy now, pay later.
Speaker 3 (10:58):
So, well, you buy now and then you pay later.
Speaker 4 (10:59):
Yeah, I know it's right in the name, but it's
it's a it's a basically non tell me what that is.
Speaker 5 (11:05):
But they don't check your credit what a breakfast diner is.
Speaker 4 (11:09):
They don't check your credit and they do not report
to major credit agencies either. And it's typically used on
you'll see a firm or a Klarno or many of
these agencies. If you're on like an Amazon or a Walmart,
you can buy over installment periods.
Speaker 2 (11:25):
And and basically the way that they do a bunch
of like alternative underwriting using technology and this and that
that supposedly they're good at.
Speaker 3 (11:33):
Who knows if they actually are.
Speaker 2 (11:35):
And so they partnered yesterday to allow people to pay
for door dash food deliveries using interest free installment plans. Now,
I have a few different problems with this. The first
is if you have to pay for takeout using an
(11:56):
installment plan, you shouldn't be ordering takeout. I think that
is safe to say, especially given like the fees associated
with DoorDash, like the as an example, if you wanted
an eight dollars meal from McDonald's, which is not outrageous
these days, like that's probably like middle of the road,
like a number one with you know, prize and a
(12:17):
large soda. Okay, you're probably in that range. It's probably
gonna cost you double to triple that on DoorDash. Now,
if you want something that's you know, more expensive, Let's
say you're ordering I don't know some what's a restaurant
that would be on DoorDash. If Applebee's, let's say they're
on DoorDash. Okay, you're you know, forty dollars meal for
(12:39):
the family is probably sixty five something in that range.
So if you have to do it on an installment plan,
either like go there and eat it, or like make
like say, if you're ordering fees on an installment plan,
it's a problem. Yeah, I'm sorry, it just is. But
here's the other piece that I'm trying to figure out.
(13:00):
So normally, Mike, when you hear like interest free financing,
what are the things that that's normally happening on.
Speaker 4 (13:10):
Maybe a special promo for a vehicle that they want
to offload, a couch. If I go to you know,
Jordan's Furniture, maybe I can get an interest free there
furniture set things like that.
Speaker 2 (13:21):
There's some kind of collateral. It might not be the
most valuable, but hey, if you default on the loan, great,
they can take your FOURD escape. You might not like it,
but they can take it. What do they do after
you've digested the burrito from Chipotle that you ordered, Like, okay,
we've got a collateralized burrito obligation here. Well okay, Like,
(13:44):
so Karna, like, is lending you money for something that
no longer exists because you've eaten it.
Speaker 5 (13:51):
Yeah, that's an end pretty rapidly depreciating asset pretty.
Speaker 2 (13:55):
Quickly, within about forty eight hours, there's no value left.
And so I'm just trying to walk through the level
of underwriting you have to be comfortable doing, because if
I have to put my burrito on layaway. How in
the world can I be a good enough credit risk
for you to let me do this and you follow
(14:17):
on effects here?
Speaker 4 (14:18):
Just you know, speaking to the general credit market. If
I'm a credit card issuer or a mortgage issuer, I
would really, really really like to know if any of
those who I'm considering an application from have borrowed money
to order food in the last few years.
Speaker 5 (14:36):
And I can't get that information right now.
Speaker 2 (14:39):
And look, this is not like to pooh pooh the
idea that like everyone has I'm not trying to say
like everyone has enough money. There are plenty of families
that are living hand to mouth right now and have
to buy grosceries and stuff on credit.
Speaker 3 (14:51):
Cards with you.
Speaker 5 (14:53):
They they shouldn't be using door dash, Like.
Speaker 2 (14:56):
When you talk about the overall cost too, said family,
it is much higher borrowing money through like trying to
do door dash than needing to buy groceries and so like.
There are so many different potential problems that I see
with this, the biggest one just being again, how how
(15:19):
as an underwriter like you have someone who cannot pay
for their DoorDash delivery all at once, and you say,
I'm just going to lend you money at no interest,
which also then raises one other interesting question, which is, Okay,
what they say, like there's no interest, what kind of money?
(15:42):
What kind of cut is Karna taking from door dash
because they they have to make money somewhere. This isn't
just like a get it you don't do getting the
door deals on Chipotle, Like that's that's just not how
it works. So then it's like, so, how much is
DoorDash raising their fees in order to pay for this
zero interest loan? Because car again, I would not want
(16:06):
to be in the business of giving away free money
for burritos. No, that just doesn't seem like the best
business model. So I've got a lot of questions on this,
and I don't think I have any answers that point
to this actually being a good thing for consumers.
Speaker 5 (16:25):
Agree, it's rare that.
Speaker 3 (16:26):
You find something that I can just like universally be
like this is bad.
Speaker 5 (16:30):
Yeah, bad and stupid. Yes, it's hard, And I don't
really see who it's a good deal for.
Speaker 2 (16:37):
No, it's like all the parties you look at it,
you're like, okay, no, here's what it's a good deal
for the restaurant, And even there like they're still probably
paying that they're still paying the door dash fees, so
you can even be like, yeah, there's a problem there
and that their margins are getting eaten away. But most
of the restaurants on door dash now raise their prices
by twenty to thirty percent to compensate for that anyways,
(17:00):
so you can make a case that this is okay
for the restaurant.
Speaker 5 (17:03):
But man, food on layaway is just a crazy concept.
Speaker 2 (17:09):
Mike, I'm gonna put this burrito here for you. You're gonna
be able to see it and smell it, and when
you can finally pay for it, you can have it again.
Speaker 4 (17:16):
It's not quite lay away because you get the product
right front. But this is the closest thing we have
to you know, for those of you that used to
put something on lay away, this is the closest.
Speaker 2 (17:26):
Here's the thing layaway made sense. Yeah, the premise of
it was, yeah, I can't afford this. Now they're gonna
put it in the stock room until I can actually
afford to buy it, and then they're gonna give it
to me. And if I can't afford to buy it, it
goes back into the regular circulation, and that's it. Like layaway,
made a ton of sense, right, This is the this
(17:49):
is reverse layaway, this is this is I don't even
know what you would call it.
Speaker 3 (17:53):
It's it's just throwing food at people and saying, pay
me later for it.
Speaker 5 (18:01):
Yeah, that's a tremendously bad idea.
Speaker 4 (18:03):
It's kind of wild, the the you know, the stuff
that I worry about. Again, there are only two tricks
in the finance world. It's how can I leverage something?
And how can I securitize it? And they just get
bundled up different ways. And this is basically, look, how
can I, you know, generate leverage on food?
Speaker 7 (18:27):
It just.
Speaker 2 (18:29):
And this is before you even get into just like
the grossness like societally. Again, I feel like I've been
harping on this stuff lately. So if someone can't afford food,
you're gonna charge them interest.
Speaker 3 (18:42):
It doesn't seem right now. I again, I get it.
Speaker 2 (18:45):
That is takeout, So it's yeah, it's pretty discretionary food,
it is. But it's still kind of like, I know you,
I know you can't pay for this now. Yeah, I'm
not gonna charge you interest, but it's got to show
up somewhere.
Speaker 5 (18:58):
Yeah, you're gonna pay for it.
Speaker 2 (18:59):
So You're gonna pay for it somehow because there's no
free launch, is the saying, I just I don't know this.
Speaker 3 (19:06):
This feels goofy to me.
Speaker 4 (19:09):
Yeah, it's just bad business all around. And yeah, just
a dystopian, a dystopian feeling saying that I'm going to
buy a thirty dollars meal and pay for it over
a number of installments.
Speaker 3 (19:22):
Are there, like credit default swaps on burritos?
Speaker 7 (19:25):
Now?
Speaker 3 (19:26):
Yeah, is that where we're going? So you're gonna take
a quick break here.
Speaker 2 (19:31):
When we come back, we get the trivia answer and
then we're talking in video.
Speaker 8 (19:41):
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Speaker 3 (20:17):
All right.
Speaker 6 (20:17):
Trivia question today was what year was Twitter launched? That
would be two thousand and six. Gail from West Boils
to Masses our winner today taking home a brand new
Financial Exchange Show to you. Sure, congrats to Gail, and
we play trivia every day here on the Financial Exchange
se Complete contest rules at Financial Exchange Show dot com.
Speaker 2 (20:40):
Mike, do you do you have your Fermians in order? No, Tucker,
what about you?
Speaker 6 (20:47):
Oh yeah, absolutely yeah. We's got to stay on top
of those Fermions.
Speaker 3 (20:51):
Yeah, the Fermians were.
Speaker 2 (20:53):
If you're not familiar with the term, Microsoft earlier this week,
earlier this month unveiled some kind of quantum computing chip
that has something to do with Fermians.
Speaker 3 (21:05):
I don't know what they are.
Speaker 2 (21:06):
They little sub atomic you know, quantum particles and something
so that preachers that's what the term stems from. It's
not you know, a star trek alien or something like that,
but that's what I always think you mean, like ferbies.
Speaker 3 (21:20):
Now, the Fermians.
Speaker 2 (21:21):
These guys, the Fermians had a big war with the
Klingons for interstellar domination.
Speaker 4 (21:26):
Things with the U with the mohawks, big eyes. Yeah,
got it.
Speaker 3 (21:30):
Yeah, they're they're tougher than they look. Actually.
Speaker 2 (21:33):
Anyways, in Vidio CEO Jensen Huang during the they they
were having some big in Vidia conference in the last
couple of days, and he invited a bunch of quantum
computing CEOs to it in order to apologize to them
for saying that quantum computing was a reality that's fifteen
to thirty years away, and he had them all there
(21:56):
to say no, like it's actually going to be much sooner. Okay,
I guess that's fine, But for the average person, this
still doesn't mean anything, and we still don't know anything
about when quantum computers are actually going to have any
kind of legitimate impact in our lives.
Speaker 5 (22:14):
I don't either, but this is I have a question.
Speaker 4 (22:17):
I guess does this fall into the same category as
these recent announcements of partnerships with General Motors and Taco
Bell and and Nvidia just generally going out there on
a PR campaign, because it.
Speaker 2 (22:32):
Feels a little different, doesn't it than like what they've
done previously, Because for the last two years it was Hey,
AI's great, AI is awesome, our sales are way up,
We're good, and there's definitely something different.
Speaker 3 (22:47):
In the air now. I don't know exactly what it is, but.
Speaker 2 (22:54):
Again, it's just kind of odd to see this kind
of thing, and this is not This is not a
you know, the sky is falling, you know type of thing.
Speaker 3 (23:03):
It's much more.
Speaker 2 (23:05):
For the last couple of years, and all in Vidia
had to do was show up every not in Vidia,
but all in video and WOG needed to do for
the last couple of years was show up every three months,
say hey, we expected four billion in profit. Instead it
came in at seven billion, and investors went wow, yeah.
And now you're trying to announce this stuff every day,
(23:27):
it seems like and it's I don't know, it doesn't
feel It's not a great sign to me when a
company that previously didn't really have to do any marketing
is now feeling like they have to market.
Speaker 4 (23:43):
It's AI washing and I don't know if it's a
threat that they feel from. Look, we had the big
deep Seek innovation earlier this year. I'm not entirely sure
what the where the pressure is coming from, or if
it is actually a response to pressure. But it is
just again interesting to announce partnerships that I think seem
to me anyway to be designed to get in front
(24:08):
of the average person instead of the one who. Let's
be honest, a few years ago, very few people had
actually heard of Nvidia, and no individuals out there are
buying in Vidia chips. They only became famous when their
stock price was one of the best performing companies in history.
And so maybe this is an attempt to just get
the name out there, because when you announce a partnership
(24:29):
with Taco Bell, you certainly get a little bit more
pressed for the average person layperson than you do when
you're announcing a partnership with Microsoft.
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Speaker 2 (25:50):
So there's a pizza place in Summerville by the name
of Dragon Pizza, and apparently sometime on Sunday they put
up a social media post reporting that they had to
throw out a group of quote entitled lazy parents for
quote disrespecting the restaurant by allowing their unsupervised children to play.
(26:13):
They didn't give any further details on it, but they
did put in like some directives for you know, dining
at Dragon Pizza with kids. They said, you know, we
welcome all children dining. We do not welcome parents who
do not want to share a dining experience with the children.
Speaker 3 (26:32):
Quote.
Speaker 2 (26:32):
We loathe parents who use our games as babysitters while
they ignore their children and let them damage and abuse
our games, and quote we do not appreciate parents who
treat our pizza as a cheap, simple option to feed
their children until they can have their own dinner. And
basically it seems like everyone's decided to weigh in on
(26:53):
this either by saying that like, the pizza shop is
awful or that the parents must be awful, when really
we have no idea what actually happened here, and I
will be the first to like, I don't know. I'm
not going to be like this person's right, that person's wrong,
But I'm getting back to something we've touched on, which
is there seems to be more of this happening lately
(27:16):
in public, where there are disagreements that are going beyond
what I think we previously thought was acceptable, and it
indicates something broken about us in some way that we're
getting to this point.
Speaker 3 (27:32):
I think, yeah.
Speaker 4 (27:34):
And I see businesses do this pretty frequently, of making
a big social media post and making a big deal
of it, and I think a lot of it probably
comes from fear because they don't want a negative review
on their website impacting their business. I've seen it from
local restaurants right here in need them. There was a
big kerfuffle about a local restaurant who is hosting I
(27:56):
think what turned out to be a pretty controversial group
at their restaurant and faced a bunch of backline ah
yahdy yah ya, and they had to go on social
media and post about all of this. I don't know.
I don't know what to make of it. If it's
a problem with the way that we just can't deal
with each other, or it very well may be how
we consume things these things these days, because quite honestly,
(28:16):
if you are a business that gets a few really
garbage online reviews, it can lead to very significant downturn
in your eventual business.
Speaker 5 (28:26):
I don't I don't know what to make of it. Yeah,
I have no idea if the parents were being totally
there's no.
Speaker 2 (28:30):
Idea who's right or wrong on this, Like, I really
don't know, And I'm not going to try to pass
judgment because it seems like there's enough people passing judgment
on you know, who's in the right or who's in
the wrong. But it just feels like, again, whether you're
talking about restaurants, we've gone through all of the different
stuff on airplanes of people getting kicked off and this
(28:52):
and that, and people yelling at each other.
Speaker 3 (28:54):
It gets We're just not very patient with each other
right now, and it's not great.
Speaker 2 (29:04):
And I know we don't really say this often. It's
kind of a loserious thing to say. But let's just
be a little nicer when we're like seeing people. Man,
you know, yeah, i've seen all on Ted once said
be excellent to each other, and maybe that's what.
Speaker 3 (29:18):
We should be.
Speaker 5 (29:19):
Yeah, just common decency. Just could use a little more
of that.
Speaker 3 (29:22):
Be a human.
Speaker 2 (29:23):
The AI is going to come for all of us
and get us at some point, so just be nice
to the humans, you see. Yeah, you know, let the
AI be uh be the one to you know, get
all up in our face.
Speaker 3 (29:34):
Let's take a quick break.
Speaker 2 (29:35):
When we come back, we are going to be joined
by paul A Monica right after this, and we're gonna
be very very nice to him.
Speaker 1 (29:43):
There's only one show that follows Wall Street's continued volatility.
Keep it here all morning long on the Financial Exchange
Radio Network. Find daily interviews and full shows of the
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(30:04):
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Speaker 2 (30:41):
Paul Monica from Barons joins us now here to talk
a little bit about well leverage single stock ETFs.
Speaker 3 (30:51):
Paul, how are you today?
Speaker 7 (30:53):
I am good. Yes, it's a wacky world we live in, Paul.
Speaker 2 (30:56):
For someone who's not familiar with the concept, what is
a single stock EF either leveraged or unleveraged and why
would one use that rather than actually owning or shorting
the stock.
Speaker 7 (31:08):
Owning the common stock? Exactly? Yeah, I mean this is
I think something that a lot of traders you know,
might use for hedging or you know, to to kind
of magnify a gain or loss and a stock as
opposed to something that a buy and hold long term
investor would want. So you know, typically these types of
(31:30):
ETFs use derivatives to amplify the exposure of what would
happen in an individual stock. So the Tesla short leveraged
funds are designed to go up even more than what
the stock price is going down at. So if you
know Tesla's going down five percent, you have a two
(31:54):
x leverage fund in theory be about nine to ten
percent that the stock should that they CTFs should go up.
And it's you know, the inverse of that for the
long ETFs, which go up even more when Tesla stock
is going up. But these are incredibly risky. Even though
these short leverage Tesla ETFs have done well this year
(32:18):
as Tesla stock has lunged for various reasons, you know,
over the long haul, if you buy and hold these things,
you're losing a lot of money because Tesla has still
been a pretty good stock over the past year. So
in for the past few years.
Speaker 2 (32:31):
How popular are these now, I mean, they've increased in popularity.
Speaker 7 (32:37):
Used to see decent volume and retail traders buying them
as well, But the fund providers themselves do caution that
you know, a lot of times these are really something
that only more sophisticated investors, particularly short term traders, should
be using as opposed to a long term investor. Like
if you like the case for Tesla and Elon Musk,
(33:00):
it's probably not a great idea to own one of
these leverage gtfs. They're going to go up and down
very wildly. Just just buy the stock.
Speaker 2 (33:09):
When you look at the potential downside of especially if
you look at some of these you know, leveraged short ETFs,
can you explain to any of our listeners, like where
how does the potential downside materialize? And how big is
the potential downside?
Speaker 7 (33:25):
Well, I mean when you think about you know, say,
if you are shorting a stock, it's it's always talked
about that one of the reasons why heavily shorted stocks
can somewhat conversely go up a lot when there's good
news is that if you're borrowing shares and selling them
and you have to eventually buy them back, I mean,
(33:46):
your losses are magnified the more that that stock goes up.
So think about that and add leverage to it as well.
It's just incredibly risky to be short a stock that
can be volatile and might have the potential to go
higher on good news. So it's why these leveraged inverse
(34:10):
Tesla atfs have even though they are a great short
term trade this year, because Tesla stock is down what
so forty percent or so, partly due to all the
concerns about Musk and Doge. You know, I think it's
just dangerous to be short of stock like Tesla for long.
I mean, Tesla's back up today in a little bit.
I think partly because of the news he had that
(34:31):
all hands meeting yesterday, and I think maybe there are
some hopes that you know, Musk realizes that he can't
pay exclusive attention to Washington, d C. And what he's
doing there in the Trump administration. You know, he has
a duty to his employees and shareholders to you know,
run Tesla as well.
Speaker 2 (34:52):
Very good, Paul, We appreciate you joining us today. I
hope you have a great weekend of watching a little
bit of college basketball and we'll catch up with you soon.
Speaker 7 (35:02):
Yep, thank you very much. Looking forward to more March madness.
Definitely not just the stock market.
Speaker 3 (35:06):
There you go.
Speaker 2 (35:07):
That is Paul la Monica from Baron's talking about these
single stock leveraged and short leveraged just a p.
Speaker 5 (35:17):
S A on all that stuff.
Speaker 4 (35:18):
There's a lot of new types of ETF products out
there that did not exist in any way, shape or form,
whether it's the single stock leverage things or a bunch
of ones that try and limit downside and cap upside.
I guess the the point that I'm making about all
these is they are all very, very new, and if
you don't fully understand them, beware. Yeah, that's just a
(35:43):
my statement for the day. Staying on Tesla for a moment,
Edmonds the the what do we call them? Shopping site?
Speaker 3 (35:50):
Are they or like they do car reviews and the
car experts.
Speaker 4 (35:54):
Yeah, they are reporting, but not car gurus, No, that's
a different company. Yes, they are reporting that March represented
the highest ever share that it had seen for Tesla
trade ins towards new or used cars from dealerships selling
other brands. So that story that we had alluded to
of hey, you know, musks roll within the administration sparking
(36:17):
some or just musks general behavior sparking some backlash, seems
to be playing out in a I guess somewhat expected
way and helps to explain some of the volatility they're
seeing in the share price.
Speaker 2 (36:29):
A Southwest plane aborted a takeoff after they tried to
take off on a taxiway rather than a runway. Now
we again, I'm it's probably more complicated than we think
it is. Oh, certainly, you know, I can understand how
this happens because you go through any airport and you
(36:50):
have taxiways that are parallel to every runway.
Speaker 3 (36:53):
Some of them might be wide.
Speaker 2 (36:55):
You might think you've turned onto the road, Like I can,
I can understand this. I know that the easy thing
to do is just to be like, oh, like, how
could they ever do that?
Speaker 3 (37:02):
But I wouldn't.
Speaker 2 (37:05):
This is the kind of thing that does normally happen
a few times a year, just because there's so many
planes and these airports are busy and complex, and.
Speaker 4 (37:13):
I'm always curious about where the line is on this stuff.
You know, I know we probably have a few pilots
listening right now. But like the message that my uncle
always gave when he had a job as a pilot
for a number of years is just don't scratch the paint.
Speaker 5 (37:28):
It's not as though you get graded on a scale
when you're a pilot. It's it's kind of pass fail.
Speaker 4 (37:34):
And I don't know if driving down the wrong runway
thinking that it's a runway is a fail grade on
that one and you actually lose your job on it.
Speaker 2 (37:41):
I don't know that you lose your job because of this,
but I suspect that you're put on some kind of
heightened supervision and training program and if anything happens during,
you know, a probationary period afterwards. It's kind of like Bill,
we talked about this. You don't try to take off
on the taxiway.
Speaker 5 (37:56):
Yeah.
Speaker 3 (37:57):
So it's yeah, it's not great.
Speaker 5 (38:02):
High pressure job. Interesting, it is really interesting.
Speaker 3 (38:05):
I would not be good at it, Like I would
not be good at it.
Speaker 2 (38:09):
Yeah, but uh yeah. So that's what we have the
Southwest today. We're done for the entire weekend. I hope
you all have a great weekend, enjoy a little bit
of basketball. Markets down modestly today. We'll see how they
do next week when we return
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
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(00:20):
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(00:42):
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heroes by visiting dav five K DOC Boston and making
a donation today. This is the Financial Exchange with Chuck
(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Kicking off hour two of the Financial Exchange is Chuck,
Mike and Tucker and stocks with again kind of a
modest sell off today, nothing big, nothing crazy. The dows
off a couple hundred points, about half a percent. The
S and P five hundred is off twenty five points,
are about half a percent. The nas necks down fifty
four points are about a third of a percent. So
(01:32):
just not much movement on that side of things. Tenure
Treasury is down four tenths of a basis point. Big
move really teeny move to four point two three seven percent. Uh,
and so just not too much going on.
Speaker 3 (01:50):
Again.
Speaker 2 (01:51):
He had kind of a sharper sell off to start
the day, but it's moderated as the day has gone on.
Speaker 4 (01:56):
Yeah, we were off what a full percentage point on
the S and P five hundred at the open, I believe,
so it has moderated a fair bit as some hope
to rally into the weekend.
Speaker 2 (02:04):
Perhaps you got oil up eighteen cents a barrel to
sixty eight twenty five on West Texas Intermediate Nationally where
continuing to see gas prices moving up as we move
over to the summer blend of gasoline now at three
twelve and nine tenths of a cent nationally, the price
of gold is down twenty three dollars and ten cents
nouns to threeenty twenty dollars and seventy cents, and so overall,
(02:30):
nothing too exciting at this point, but it's a Friday,
and all kinds of things can change. Especially, Hey, we
got March madness going on, and does the madness spill
over to the markets.
Speaker 3 (02:40):
Maybe it's market madness.
Speaker 4 (02:43):
That's probably why markets are so boring today. Right, all
of the gamblers, all of the games mail traders who
typically spend all time day day trading, are instead spending
their day gambling.
Speaker 3 (02:54):
Tip off in one hour. Who's the first game today?
Speaker 5 (02:57):
Oh?
Speaker 3 (02:57):
I forget, I don't know.
Speaker 2 (03:01):
I gotta say, first day of the tournament this year
underwhelm kind of mah. Yeah, they were like one and
a half good games there, Baylor.
Speaker 6 (03:08):
In Mississippi at twelve fifteen.
Speaker 2 (03:09):
Oh okay, fine, you know, not bad? Okay, eight nine
seats acceptable? Yeah, first day of the tournament this year
nothing great. I mean you had a couple of games
that were okay ish, you know that Missouri Drake game
was fine the end of the Clemson loss.
Speaker 3 (03:28):
To whoever it was McNeice.
Speaker 2 (03:31):
McNeice, Yeah, I guess I watched the first half of
that game where Clemson scored thirteen points in the entire half.
Speaker 6 (03:37):
Yeah, not great, And I'm sitting there going.
Speaker 3 (03:38):
What happened here?
Speaker 2 (03:39):
And then they scored forty nine in the second half,
or it might have been forty nine with like a
minute to play, even but yeah, just not a great
game overall. But it's neither here nor there. We're here
to talk about what spooked the S and P five
hundred and why it wasn't the trade war, because that's
the title of the piece from Bloomberg Opinion, and it
makes the point that, look, if this was really you know,
(04:00):
trade related, you'd be seeing things like, you know, automakers
and consumer discretionary companies getting hit harder, and instead you
saw big tech really struggling the most. And I always
get nervous when we try to, like after the fact,
assign blame is to, well, here's what really happened, And
(04:22):
most of the time you don't really know, like it's here,
it's not even you don't really know the idea that, hey,
the trade war would only, not only, but predominantly affect
you know, consumer stocks. It's it's missing the fact that
trading is not just about what's going on in the world,
(04:42):
but it's about how investors are positioned beforehand. And so
if they're positioned heavily in all the mag seven stuff
and this and that, yeah, the trade war could still
be the proximate cause for the selloff, even if it's
not selling off the stocks you think are supposed.
Speaker 4 (04:56):
To Ye, So an example here, I can think of
companies that would be more susceptible to the current talk
of trade war than general motors. Fair to say, yes,
stock's only down three percent this year. Yeah, so I
get what Near? Is the point that Near is making here?
The counterpoint that I would make is how do most
(05:17):
people invest these days, Chuck, in terms of tools that
they use within their investment portfolios. Say that again, the
tools that people use their investment portfolios, my argument would
be mainly mutual funds and exchange traded funds. I think
that's how predominantly a lot of people are investing these days.
Speaker 3 (05:36):
I thought you were going in a different place with this,
got it.
Speaker 4 (05:39):
So the point that I think I would make is
that when people get spooked about a trade war or
a recession or a cut to jobs or whatever might
play out. I don't think they're thinking it through so
logically to sell, Oh, say, well, I'd better go look
at my General Motors stock, or my auto maker or
(06:00):
my consumer discretionary brand stock. I think generally they're saying, hmm,
what's my biggest holding, what's done the best over the
last few years.
Speaker 5 (06:07):
Let me go dump some of that in order to
insulate myself a bit.
Speaker 2 (06:11):
Maybe yes, maybe, Like the other way is, oh, no,
this has done well, I'm not going to sell it.
So like you could come up with all these justifications
for whatever. Oh, Ultimately, sometimes you have to just look
at the random number generator and be like, this is
what it did today. And I don't know why. I
(06:31):
it bothers me that we have to have so much
certainty in today's world. I feel like people were more
embarrassed now than before to say that they don't know
why something happened.
Speaker 3 (06:40):
And I don't know if it's because we have like.
Speaker 2 (06:42):
Phones in our hand all the time, and so we
think that we should have access to all the information.
Speaker 4 (06:46):
And I don't think that's by the way, markets and
economic story goes across social politics, across media, like everywhere.
The idea has to be that I know everything, and.
Speaker 2 (06:58):
And like sometimes you can just look at the market
and be like, I have no idea why it did
what it did.
Speaker 4 (07:04):
I'm only like ninety nine percent sure that I'm not
living in the Truman Show right now.
Speaker 5 (07:09):
Well, what does that make me then? Paid actor?
Speaker 4 (07:13):
So yeah, that's I think we could all use a
higher dose of skepticism when it comes to our own
knowledge about the world. Sometimes you just don't know what's
going to happen next, and that's okay.
Speaker 2 (07:26):
Yeah, it's like we're kind of in a little bit
of an uncertain place, and in terms of you know
where this market and economy is going to go, there's
a lot of uncertainty about what policies you may or
may not see implemented in the next couple of weeks
as it relates to trade and how that could affect
all of this. And so I don't know, Like it's
(07:47):
okay to be like, yeah, we're just gonna have to
see what happens.
Speaker 4 (07:50):
We also shouldn't minimize that because while it is true
that there's always uncertainty, right I mean, that's kind of
the premise of this program is that, hey, you know,
these are all the things that are out there that
we're not sure about and what's going to happen next.
I think it is fair to qualify this period of
time as dealing with a lot more uncertainty than is typical.
Usually we have a better sense of what trade policy
(08:12):
is going to look like with our closest allies. Usually
we have a better sense of what tax rates might
look like over the next couple of years, and what
employment and spending at the government level is going to
look like. So I'll say domestically, I think we're facing
a higher degree of uncertainty, and you're seeing that echoed
by most surveys that are out there, and that's important
to acknowledge and could be contributing to this market selloff.
(08:36):
But again, we always face some degree of uncertainty when
it comes to what happens next.
Speaker 3 (08:42):
Take a quick break here when we come back. We
had a little bit of trivia right after this.
Speaker 1 (08:47):
Text US six one, seven, three, six, two thirteen eighty
five with your comments and questions about today's show, and
let us know what you think about the stories we
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(09:09):
full showers. This is your home for the latest business
and financial news in New England and around the country.
This is the Financial Exchange Radio Network.
Speaker 6 (09:34):
All right, Still a little trivia here on the Financial
Exchange And on this day, several years ago, Twitter founder
Jack Dorsey, excuse me sent out the first ever tweet.
Dorsey was at the helm of Twitter during its early stages,
and later returned to lead the company from twenty fifteen
(09:54):
until his departure in twenty twenty one. Trivia question today,
what year was Twitter launched? Once again? What year was
Twitter launched? Be the third person today to text us
at six one seven three six two thirteen eighty five
with the correct answer, and you win a brand new
Financial Exchange Show T shirt.
Speaker 3 (10:14):
Once again.
Speaker 6 (10:14):
The third correct response to text us at six one
seven three six two thirteen eighty five will get that
T shirt. See complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (10:25):
Okay, I just came across this and we need to
cover this story here because you know, every now and
then you see something and you're like, this is bad.
Speaker 3 (10:38):
This is bad. UH.
Speaker 2 (10:39):
So door Dash, the company that delivers food to your
house or wherever it is that you happen to be
uh has apparently as of yesterday, partnered with Karna, who
is a buy now, pay later service, a bumple if
you will.
Speaker 4 (10:55):
There's a lot of people that are probably not familiar
with buy now, pay later.
Speaker 3 (10:58):
So, well, you buy now and then you pay later.
Speaker 4 (10:59):
Yeah, I know it's right in the name, but it's
it's a it's a basically non tell me what that is.
Speaker 5 (11:05):
But they don't check your credit what a breakfast diner is.
Speaker 4 (11:09):
They don't check your credit and they do not report
to major credit agencies either. And it's typically used on
you'll see a firm or a Klarno or many of
these agencies. If you're on like an Amazon or a Walmart,
you can buy over installment periods.
Speaker 2 (11:25):
And and basically the way that they do a bunch
of like alternative underwriting using technology and this and that
that supposedly they're good at.
Speaker 3 (11:33):
Who knows if they actually are.
Speaker 2 (11:35):
And so they partnered yesterday to allow people to pay
for door dash food deliveries using interest free installment plans. Now,
I have a few different problems with this. The first
is if you have to pay for takeout using an
(11:56):
installment plan, you shouldn't be ordering takeout. I think that
is safe to say, especially given like the fees associated
with DoorDash, like the as an example, if you wanted
an eight dollars meal from McDonald's, which is not outrageous
these days, like that's probably like middle of the road,
like a number one with you know, prize and a
(12:17):
large soda. Okay, you're probably in that range. It's probably
gonna cost you double to triple that on DoorDash. Now,
if you want something that's you know, more expensive, Let's
say you're ordering I don't know some what's a restaurant
that would be on DoorDash. If Applebee's, let's say they're
on DoorDash. Okay, you're you know, forty dollars meal for
(12:39):
the family is probably sixty five something in that range.
So if you have to do it on an installment plan,
either like go there and eat it, or like make
like say, if you're ordering fees on an installment plan,
it's a problem. Yeah, I'm sorry, it just is. But
here's the other piece that I'm trying to figure out.
(13:00):
So normally, Mike, when you hear like interest free financing,
what are the things that that's normally happening on.
Speaker 4 (13:10):
Maybe a special promo for a vehicle that they want
to offload, a couch. If I go to you know,
Jordan's Furniture, maybe I can get an interest free there
furniture set things like that.
Speaker 2 (13:21):
There's some kind of collateral. It might not be the
most valuable, but hey, if you default on the loan, great,
they can take your FOURD escape. You might not like it,
but they can take it. What do they do after
you've digested the burrito from Chipotle that you ordered, Like, okay,
we've got a collateralized burrito obligation here. Well okay, Like,
(13:44):
so Karna, like, is lending you money for something that
no longer exists because you've eaten it.
Speaker 5 (13:51):
Yeah, that's an end pretty rapidly depreciating asset pretty.
Speaker 2 (13:55):
Quickly, within about forty eight hours, there's no value left.
And so I'm just trying to walk through the level
of underwriting you have to be comfortable doing, because if
I have to put my burrito on layaway. How in
the world can I be a good enough credit risk
for you to let me do this and you follow
(14:17):
on effects here?
Speaker 4 (14:18):
Just you know, speaking to the general credit market. If
I'm a credit card issuer or a mortgage issuer, I
would really, really really like to know if any of
those who I'm considering an application from have borrowed money
to order food in the last few years.
Speaker 5 (14:36):
And I can't get that information right now.
Speaker 2 (14:39):
And look, this is not like to pooh pooh the
idea that like everyone has I'm not trying to say
like everyone has enough money. There are plenty of families
that are living hand to mouth right now and have
to buy grosceries and stuff on credit.
Speaker 3 (14:51):
Cards with you.
Speaker 5 (14:53):
They they shouldn't be using door dash, Like.
Speaker 2 (14:56):
When you talk about the overall cost too, said family,
it is much higher borrowing money through like trying to
do door dash than needing to buy groceries and so like.
There are so many different potential problems that I see
with this, the biggest one just being again, how how
(15:19):
as an underwriter like you have someone who cannot pay
for their DoorDash delivery all at once, and you say,
I'm just going to lend you money at no interest,
which also then raises one other interesting question, which is, Okay,
what they say, like there's no interest, what kind of money?
(15:42):
What kind of cut is Karna taking from door dash
because they they have to make money somewhere. This isn't
just like a get it you don't do getting the
door deals on Chipotle, Like that's that's just not how
it works. So then it's like, so, how much is
DoorDash raising their fees in order to pay for this
zero interest loan? Because car again, I would not want
(16:06):
to be in the business of giving away free money
for burritos. No, that just doesn't seem like the best
business model. So I've got a lot of questions on this,
and I don't think I have any answers that point
to this actually being a good thing for consumers.
Speaker 5 (16:25):
Agree, it's rare that.
Speaker 3 (16:26):
You find something that I can just like universally be
like this is bad.
Speaker 5 (16:30):
Yeah, bad and stupid. Yes, it's hard, And I don't
really see who it's a good deal for.
Speaker 2 (16:37):
No, it's like all the parties you look at it,
you're like, okay, no, here's what it's a good deal
for the restaurant, And even there like they're still probably
paying that they're still paying the door dash fees, so
you can even be like, yeah, there's a problem there
and that their margins are getting eaten away. But most
of the restaurants on door dash now raise their prices
by twenty to thirty percent to compensate for that anyways,
(17:00):
so you can make a case that this is okay
for the restaurant.
Speaker 5 (17:03):
But man, food on layaway is just a crazy concept.
Speaker 2 (17:09):
Mike, I'm gonna put this burrito here for you. You're gonna
be able to see it and smell it, and when
you can finally pay for it, you can have it again.
Speaker 4 (17:16):
It's not quite lay away because you get the product
right front. But this is the closest thing we have
to you know, for those of you that used to
put something on lay away, this is the closest.
Speaker 2 (17:26):
Here's the thing layaway made sense. Yeah, the premise of
it was, yeah, I can't afford this. Now they're gonna
put it in the stock room until I can actually
afford to buy it, and then they're gonna give it
to me. And if I can't afford to buy it, it
goes back into the regular circulation, and that's it. Like layaway,
made a ton of sense, right, This is the this
(17:49):
is reverse layaway, this is this is I don't even
know what you would call it.
Speaker 3 (17:53):
It's it's just throwing food at people and saying, pay
me later for it.
Speaker 5 (18:01):
Yeah, that's a tremendously bad idea.
Speaker 4 (18:03):
It's kind of wild, the the you know, the stuff
that I worry about. Again, there are only two tricks
in the finance world. It's how can I leverage something?
And how can I securitize it? And they just get
bundled up different ways. And this is basically, look, how
can I, you know, generate leverage on food?
Speaker 7 (18:27):
It just.
Speaker 2 (18:29):
And this is before you even get into just like
the grossness like societally. Again, I feel like I've been
harping on this stuff lately. So if someone can't afford food,
you're gonna charge them interest.
Speaker 3 (18:42):
It doesn't seem right now. I again, I get it.
Speaker 2 (18:45):
That is takeout, So it's yeah, it's pretty discretionary food,
it is. But it's still kind of like, I know you,
I know you can't pay for this now. Yeah, I'm
not gonna charge you interest, but it's got to show
up somewhere.
Speaker 5 (18:58):
Yeah, you're gonna pay for it.
Speaker 2 (18:59):
So You're gonna pay for it somehow because there's no
free launch, is the saying, I just I don't know this.
Speaker 3 (19:06):
This feels goofy to me.
Speaker 4 (19:09):
Yeah, it's just bad business all around. And yeah, just
a dystopian, a dystopian feeling saying that I'm going to
buy a thirty dollars meal and pay for it over
a number of installments.
Speaker 3 (19:22):
Are there, like credit default swaps on burritos?
Speaker 7 (19:25):
Now?
Speaker 3 (19:26):
Yeah, is that where we're going? So you're gonna take
a quick break here.
Speaker 2 (19:31):
When we come back, we get the trivia answer and
then we're talking in video.
Speaker 8 (19:41):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
The Financial Exchange Show podcast drops every day on Apple, Spotify,
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Speaker 3 (20:17):
All right.
Speaker 6 (20:17):
Trivia question today was what year was Twitter launched? That
would be two thousand and six. Gail from West Boils
to Masses our winner today taking home a brand new
Financial Exchange Show to you. Sure, congrats to Gail, and
we play trivia every day here on the Financial Exchange
se Complete contest rules at Financial Exchange Show dot com.
Speaker 2 (20:40):
Mike, do you do you have your Fermians in order? No, Tucker,
what about you?
Speaker 6 (20:47):
Oh yeah, absolutely yeah. We's got to stay on top
of those Fermions.
Speaker 3 (20:51):
Yeah, the Fermians were.
Speaker 2 (20:53):
If you're not familiar with the term, Microsoft earlier this week,
earlier this month unveiled some kind of quantum computing chip
that has something to do with Fermians.
Speaker 3 (21:05):
I don't know what they are.
Speaker 2 (21:06):
They little sub atomic you know, quantum particles and something
so that preachers that's what the term stems from. It's
not you know, a star trek alien or something like that,
but that's what I always think you mean, like ferbies.
Speaker 3 (21:20):
Now, the Fermians.
Speaker 2 (21:21):
These guys, the Fermians had a big war with the
Klingons for interstellar domination.
Speaker 4 (21:26):
Things with the U with the mohawks, big eyes. Yeah,
got it.
Speaker 3 (21:30):
Yeah, they're they're tougher than they look. Actually.
Speaker 2 (21:33):
Anyways, in Vidio CEO Jensen Huang during the they they
were having some big in Vidia conference in the last
couple of days, and he invited a bunch of quantum
computing CEOs to it in order to apologize to them
for saying that quantum computing was a reality that's fifteen
to thirty years away, and he had them all there
(21:56):
to say no, like it's actually going to be much sooner. Okay,
I guess that's fine, But for the average person, this
still doesn't mean anything, and we still don't know anything
about when quantum computers are actually going to have any
kind of legitimate impact in our lives.
Speaker 5 (22:14):
I don't either, but this is I have a question.
Speaker 4 (22:17):
I guess does this fall into the same category as
these recent announcements of partnerships with General Motors and Taco
Bell and and Nvidia just generally going out there on
a PR campaign, because it.
Speaker 2 (22:32):
Feels a little different, doesn't it than like what they've
done previously, Because for the last two years it was Hey,
AI's great, AI is awesome, our sales are way up,
We're good, and there's definitely something different.
Speaker 3 (22:47):
In the air now. I don't know exactly what it is, but.
Speaker 2 (22:54):
Again, it's just kind of odd to see this kind
of thing, and this is not This is not a
you know, the sky is falling, you know type of thing.
Speaker 3 (23:03):
It's much more.
Speaker 2 (23:05):
For the last couple of years, and all in Vidia
had to do was show up every not in Vidia,
but all in video and WOG needed to do for
the last couple of years was show up every three months,
say hey, we expected four billion in profit. Instead it
came in at seven billion, and investors went wow, yeah.
And now you're trying to announce this stuff every day,
(23:27):
it seems like and it's I don't know, it doesn't
feel It's not a great sign to me when a
company that previously didn't really have to do any marketing
is now feeling like they have to market.
Speaker 4 (23:43):
It's AI washing and I don't know if it's a
threat that they feel from. Look, we had the big
deep Seek innovation earlier this year. I'm not entirely sure
what the where the pressure is coming from, or if
it is actually a response to pressure. But it is
just again interesting to announce partnerships that I think seem
to me anyway to be designed to get in front
(24:08):
of the average person instead of the one who. Let's
be honest, a few years ago, very few people had
actually heard of Nvidia, and no individuals out there are
buying in Vidia chips. They only became famous when their
stock price was one of the best performing companies in history.
And so maybe this is an attempt to just get
the name out there, because when you announce a partnership
(24:29):
with Taco Bell, you certainly get a little bit more
pressed for the average person layperson than you do when
you're announcing a partnership with Microsoft.
Speaker 6 (24:37):
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Speaker 1 (25:40):
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (25:50):
So there's a pizza place in Summerville by the name
of Dragon Pizza, and apparently sometime on Sunday they put
up a social media post reporting that they had to
throw out a group of quote entitled lazy parents for
quote disrespecting the restaurant by allowing their unsupervised children to play.
(26:13):
They didn't give any further details on it, but they
did put in like some directives for you know, dining
at Dragon Pizza with kids. They said, you know, we
welcome all children dining. We do not welcome parents who
do not want to share a dining experience with the children.
Speaker 3 (26:32):
Quote.
Speaker 2 (26:32):
We loathe parents who use our games as babysitters while
they ignore their children and let them damage and abuse
our games, and quote we do not appreciate parents who
treat our pizza as a cheap, simple option to feed
their children until they can have their own dinner. And
basically it seems like everyone's decided to weigh in on
(26:53):
this either by saying that like, the pizza shop is
awful or that the parents must be awful, when really
we have no idea what actually happened here, and I
will be the first to like, I don't know. I'm
not going to be like this person's right, that person's wrong,
But I'm getting back to something we've touched on, which
is there seems to be more of this happening lately
(27:16):
in public, where there are disagreements that are going beyond
what I think we previously thought was acceptable, and it
indicates something broken about us in some way that we're
getting to this point.
Speaker 3 (27:32):
I think, yeah.
Speaker 4 (27:34):
And I see businesses do this pretty frequently, of making
a big social media post and making a big deal
of it, and I think a lot of it probably
comes from fear because they don't want a negative review
on their website impacting their business. I've seen it from
local restaurants right here in need them. There was a
big kerfuffle about a local restaurant who is hosting I
(27:56):
think what turned out to be a pretty controversial group
at their restaurant and faced a bunch of backline ah
yahdy yah ya, and they had to go on social
media and post about all of this. I don't know.
I don't know what to make of it. If it's
a problem with the way that we just can't deal
with each other, or it very well may be how
we consume things these things these days, because quite honestly,
(28:16):
if you are a business that gets a few really
garbage online reviews, it can lead to very significant downturn
in your eventual business.
Speaker 5 (28:26):
I don't I don't know what to make of it. Yeah,
I have no idea if the parents were being totally
there's no.
Speaker 2 (28:30):
Idea who's right or wrong on this, Like, I really
don't know, And I'm not going to try to pass
judgment because it seems like there's enough people passing judgment
on you know, who's in the right or who's in
the wrong. But it just feels like, again, whether you're
talking about restaurants, we've gone through all of the different
stuff on airplanes of people getting kicked off and this
(28:52):
and that, and people yelling at each other.
Speaker 3 (28:54):
It gets We're just not very patient with each other
right now, and it's not great.
Speaker 2 (29:04):
And I know we don't really say this often. It's
kind of a loserious thing to say. But let's just
be a little nicer when we're like seeing people. Man,
you know, yeah, i've seen all on Ted once said
be excellent to each other, and maybe that's what.
Speaker 3 (29:18):
We should be.
Speaker 5 (29:19):
Yeah, just common decency. Just could use a little more
of that.
Speaker 3 (29:22):
Be a human.
Speaker 2 (29:23):
The AI is going to come for all of us
and get us at some point, so just be nice
to the humans, you see. Yeah, you know, let the
AI be uh be the one to you know, get
all up in our face.
Speaker 3 (29:34):
Let's take a quick break.
Speaker 2 (29:35):
When we come back, we are going to be joined
by paul A Monica right after this, and we're gonna
be very very nice to him.
Speaker 1 (29:43):
There's only one show that follows Wall Street's continued volatility.
Keep it here all morning long on the Financial Exchange
Radio Network. Find daily interviews and full shows of the
Financial Exchange on our YouTube page. Like us on YouTube
and get caught up on anything and everything you might
have missed. This is the Financial Exchange Radio Network. Ladies
(30:04):
and gentlemen, the weekend.
Speaker 6 (30:10):
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That's DAV five k dot Boston.
Speaker 2 (30:41):
Paul Monica from Barons joins us now here to talk
a little bit about well leverage single stock ETFs.
Speaker 3 (30:51):
Paul, how are you today?
Speaker 7 (30:53):
I am good. Yes, it's a wacky world we live in, Paul.
Speaker 2 (30:56):
For someone who's not familiar with the concept, what is
a single stock EF either leveraged or unleveraged and why
would one use that rather than actually owning or shorting
the stock.
Speaker 7 (31:08):
Owning the common stock? Exactly? Yeah, I mean this is
I think something that a lot of traders you know,
might use for hedging or you know, to to kind
of magnify a gain or loss and a stock as
opposed to something that a buy and hold long term
investor would want. So you know, typically these types of
(31:30):
ETFs use derivatives to amplify the exposure of what would
happen in an individual stock. So the Tesla short leveraged
funds are designed to go up even more than what
the stock price is going down at. So if you
know Tesla's going down five percent, you have a two
(31:54):
x leverage fund in theory be about nine to ten
percent that the stock should that they CTFs should go up.
And it's you know, the inverse of that for the
long ETFs, which go up even more when Tesla stock
is going up. But these are incredibly risky. Even though
these short leverage Tesla ETFs have done well this year
(32:18):
as Tesla stock has lunged for various reasons, you know,
over the long haul, if you buy and hold these things,
you're losing a lot of money because Tesla has still
been a pretty good stock over the past year. So
in for the past few years.
Speaker 2 (32:31):
How popular are these now, I mean, they've increased in popularity.
Speaker 7 (32:37):
Used to see decent volume and retail traders buying them
as well, But the fund providers themselves do caution that
you know, a lot of times these are really something
that only more sophisticated investors, particularly short term traders, should
be using as opposed to a long term investor. Like
if you like the case for Tesla and Elon Musk,
(33:00):
it's probably not a great idea to own one of
these leverage gtfs. They're going to go up and down
very wildly. Just just buy the stock.
Speaker 2 (33:09):
When you look at the potential downside of especially if
you look at some of these you know, leveraged short ETFs,
can you explain to any of our listeners, like where
how does the potential downside materialize? And how big is
the potential downside?
Speaker 7 (33:25):
Well, I mean when you think about you know, say,
if you are shorting a stock, it's it's always talked
about that one of the reasons why heavily shorted stocks
can somewhat conversely go up a lot when there's good
news is that if you're borrowing shares and selling them
and you have to eventually buy them back, I mean,
(33:46):
your losses are magnified the more that that stock goes up.
So think about that and add leverage to it as well.
It's just incredibly risky to be short a stock that
can be volatile and might have the potential to go
higher on good news. So it's why these leveraged inverse
(34:10):
Tesla atfs have even though they are a great short
term trade this year, because Tesla stock is down what
so forty percent or so, partly due to all the
concerns about Musk and Doge. You know, I think it's
just dangerous to be short of stock like Tesla for long.
I mean, Tesla's back up today in a little bit.
I think partly because of the news he had that
(34:31):
all hands meeting yesterday, and I think maybe there are
some hopes that you know, Musk realizes that he can't
pay exclusive attention to Washington, d C. And what he's
doing there in the Trump administration. You know, he has
a duty to his employees and shareholders to you know,
run Tesla as well.
Speaker 2 (34:52):
Very good, Paul, We appreciate you joining us today. I
hope you have a great weekend of watching a little
bit of college basketball and we'll catch up with you soon.
Speaker 7 (35:02):
Yep, thank you very much. Looking forward to more March madness.
Definitely not just the stock market.
Speaker 3 (35:06):
There you go.
Speaker 2 (35:07):
That is Paul la Monica from Baron's talking about these
single stock leveraged and short leveraged just a p.
Speaker 5 (35:17):
S A on all that stuff.
Speaker 4 (35:18):
There's a lot of new types of ETF products out
there that did not exist in any way, shape or form,
whether it's the single stock leverage things or a bunch
of ones that try and limit downside and cap upside.
I guess the the point that I'm making about all
these is they are all very, very new, and if
you don't fully understand them, beware. Yeah, that's just a
(35:43):
my statement for the day. Staying on Tesla for a moment,
Edmonds the the what do we call them? Shopping site?
Speaker 3 (35:50):
Are they or like they do car reviews and the
car experts.
Speaker 4 (35:54):
Yeah, they are reporting, but not car gurus, No, that's
a different company. Yes, they are reporting that March represented
the highest ever share that it had seen for Tesla
trade ins towards new or used cars from dealerships selling
other brands. So that story that we had alluded to
of hey, you know, musks roll within the administration sparking
(36:17):
some or just musks general behavior sparking some backlash, seems
to be playing out in a I guess somewhat expected
way and helps to explain some of the volatility they're
seeing in the share price.
Speaker 2 (36:29):
A Southwest plane aborted a takeoff after they tried to
take off on a taxiway rather than a runway. Now
we again, I'm it's probably more complicated than we think
it is. Oh, certainly, you know, I can understand how
this happens because you go through any airport and you
(36:50):
have taxiways that are parallel to every runway.
Speaker 3 (36:53):
Some of them might be wide.
Speaker 2 (36:55):
You might think you've turned onto the road, Like I can,
I can understand this. I know that the easy thing
to do is just to be like, oh, like, how
could they ever do that?
Speaker 3 (37:02):
But I wouldn't.
Speaker 2 (37:05):
This is the kind of thing that does normally happen
a few times a year, just because there's so many
planes and these airports are busy and complex, and.
Speaker 4 (37:13):
I'm always curious about where the line is on this stuff.
You know, I know we probably have a few pilots
listening right now. But like the message that my uncle
always gave when he had a job as a pilot
for a number of years is just don't scratch the paint.
Speaker 5 (37:28):
It's not as though you get graded on a scale
when you're a pilot. It's it's kind of pass fail.
Speaker 4 (37:34):
And I don't know if driving down the wrong runway
thinking that it's a runway is a fail grade on
that one and you actually lose your job on it.
Speaker 2 (37:41):
I don't know that you lose your job because of this,
but I suspect that you're put on some kind of
heightened supervision and training program and if anything happens during,
you know, a probationary period afterwards. It's kind of like Bill,
we talked about this. You don't try to take off
on the taxiway.
Speaker 5 (37:56):
Yeah.
Speaker 3 (37:57):
So it's yeah, it's not great.
Speaker 5 (38:02):
High pressure job. Interesting, it is really interesting.
Speaker 3 (38:05):
I would not be good at it, Like I would
not be good at it.
Speaker 2 (38:09):
Yeah, but uh yeah. So that's what we have the
Southwest today. We're done for the entire weekend. I hope
you all have a great weekend, enjoy a little bit
of basketball. Markets down modestly today. We'll see how they
do next week when we return
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