September 25, 2025 • 35 mins
In today’s episode of The Jon Sanchez Show, we review an important change that will impact retirement planning for workers age 50 and older. One of the most valuable retirement saving opportunities—catch-up contributions—is set to face new restrictions beginning next year. Jon outlines what these rules mean, how they may affect your retirement savings strategy, and what steps you should consider as part of your long-term financial plan. We also explore broader retirement planning considerations for individuals approaching their peak earning years.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Good Wednesday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven to eighty k which it's
a pleasure to be with you on a pleasure to
be with my partner, mister Jason Gunt Sanchez got countable Management,
knows his names in the name, in the business name.
Speaker 2 (00:15):
Yes, yeah, it makes it all.
Speaker 1 (00:16):
All makes perfect sense, makes perfect sense. How you doing, my.
Speaker 3 (00:19):
Friend, I'm doing okay. It's uh, market feels a little weird,
don't you think.
Speaker 1 (00:24):
Yeah, yeah, yeah, I'm glad you started the show off
that way, because that's that is definitely something that we
are going to discuss. We Uh. Jason and I have
this little little term that we call each other, and
he started it and I've kind of picked up on it.
His spidy senses, right, So I sent him. I sent
him a message this morning. I said, my spidy senses
(00:45):
are starting to raise up a little bit about the
way this market is acting at this point. He goes, Yep,
me too. And so you know, Chris, with our clients,
we are always moving things around, et cetera. But we
want to kind of just share with you. It's not
gonna be our main topic today, but we're going to
kind of share with you what we see going on.
You see, this market has kind of been doing something
(01:05):
strange these last couple of days. We start off very
strong and then we roll over. And there's two primary
issues that we're going to discuss with you that we
think are starting to impact this market. Number one, and
again we're going to go in a great detail about this.
Number one is the comments by Jerome Powell yesterday basically saying,
(01:26):
you know what, We're overvalued in the equity markets, but
I'm not concerned about it. Right, I'll share with you
kind of exactly what he said. So we want to
talk about that because Jason and I have been around
this game a long time and we remember, like it
was yesterday, the comments of irrational exuberance, right, Jason, that
Alan Greenspan said back in two thousand and that started
a major market sell off. Not saying this is going
(01:46):
to happen by any means, but it you know, again,
we have to share these things with you. The second
issue that we see going on is, I know, I'm
stall like a broken record because every day we're talking
about this deal that was announced on Monday, this hundred
billion dollars deal between open Ai and Navidia and the accounting,
the circular accounting as it's called, where Navidia sold these chips.
(02:08):
But at the same time, you know, for for basically
every ten billion dollars of GPUs that open Ai bought,
they have to turn around and buy three and a
half times that many from Navidia. So again, it's kind
of a just a strange feeling. And it's not just us,
because we saw a lot of comments today coming out
(02:28):
from various people going, man, this almost feels like and
I saw this today, Jay said in ninety nine two thousand,
where we saw a lot of companies kind of quote
buying their earnings. Right, they're buying it by hey, we're
gonna we're gonna give you these products or sell you
these products, but you're gonna, you know, buy from us
and other things. And it's a very complicated issue.
Speaker 3 (02:47):
We're telling some of those companies back in the day. Yeah,
the optical equipment and such.
Speaker 1 (02:52):
That's right. The third thing that we're going to talk
about is this company called Lithium American. Uh. This is
a company right in our back right in Humboldt County,
and this is that massive lithium mine that is out there.
And remember, if you're not familiar with the story, we're
kind of bringing up to date. This was a joint project.
This is a Canadian company that owns this mine, General Motors,
(03:14):
has come in. I forget what their equity steak is.
I think twenty thirty percent somewhere around there, to produce
the lithium for their batteries. Okay, so everything was going fine. Well,
what we didn't know, or at least I didn't until
this morning the US government, that Apartment of Energy lent
lithium about three and a half billion dollars. Well, Jason,
what ends up happening when the government, now that we're
(03:35):
finding out, when the government quote lends a company money,
what does President Trump kind of end up doing?
Speaker 3 (03:43):
Kind of like the Godfather, where youyoe me a favor
at some point, right, you've become a a We're.
Speaker 2 (03:51):
Gonna, you know, get something from you, or get a
steak from you.
Speaker 1 (03:54):
It's okay, Yeah, And somehow this magical ten percent arose
this morning that the US government is potentially nothing is
formal yet potentially again to take a ten percent stake
in lithium. LAC is the symbol and guess what happened
to that stock today when that news broke, it just
started moving higher and higher in regular session and including
(04:17):
little after hours. Right now, the stock is up ninety
three point five to one percent today. A two dollars
and eighty seven cent gain, two five dollars and ninety
five dollars ninety four cents is where it's trading right
now in the after hours. So we're gonna mention that.
Then bottom of the hour, we're gonna get down to
our main topic. Some of you may not be aware
of this, but let me tell you it's a very
important topic. We just got the final IRS rulings. I
(04:39):
believe it was on Monday, So today's the first day
we've had to really talk to you about this, and
that is, if you are age fifty and you participate
in a four oh one K, you probably contribute what
we call a catch up contribution, the tune of seventy
five hundred dollars, right we all love to do that.
For those of us over age fifteen. Again, as we've
(04:59):
discuss before, when you're sixty to sixty three right now,
there's even a little bit more that you can contribute,
a little over eleven grand which includes this seventy five hundred.
But here's the issue with the irisis ruled on this week.
They said, starting next year, those of you that want
to do a catchup contribution in your four to one K,
guess what. It's no longer going to be pretax. It's
got to be a wroth contribution, meaning after tax sor
(05:23):
Ry Jason, we're going to talk about why the government
is doing this issue.
Speaker 3 (05:27):
And again, you know the it's not necessarily bad. It
doesn't help you on the income lowering your taxable income side,
but it does allow you to stuff more money into
your four oh one K that's tax deferred.
Speaker 2 (05:39):
So it's it's good and bad. It depends on But I'm.
Speaker 1 (05:42):
Not getting the pre tax contributions. Yeah, and as an employer,
I'm paying payroll taxes on that money and so on.
So far, I guess the issue that I have that
you'll you'll hear from me is I don't like the
idea of the government telling me how I can invest
my money, right, I mean, there's enough rules and limitation.
Now they're saying, hey, this great benefit that's been around,
(06:02):
this ketchup provision. Remember we have a thousand dollars ketchup
provision in Iras seventy five hundred. As I said in
the four to one case. But now the government's going no, no, no, no,
We're going to tell you how you're going to you know,
put this money. It's got to be after tax. Well right,
you know for some of us that are in a
higher tax Brket, I don't care about that. If I
wanted to do WROTH, I would, I would, I would
put my WROTH contribution in my four oh one K.
(06:24):
But I need the pre tax contributions and so on
and so forth. So this is just another sign that
the government again kind of telling us what to do
and our retirement monies.
Speaker 2 (06:32):
And we were talking a little bit earlier.
Speaker 3 (06:34):
You want to touch on some of the you know,
the recent rules around four to one k's for small
businesses California, Nevada. You know, for folks who aren't aware
like this is this is very important information.
Speaker 1 (06:44):
It is indeed it is Indeed you have some very
very significant rules are coming down at the end of
this year. All right, my friends, So we have a
lot of things to hit. Let's get going. Wrap us
up on the stock market side of things today.
Speaker 3 (06:55):
Yeah, well, I mean stock market wise, Like you said,
it felt like a lot earlier and then it of
gave up the ghost in the afternoon.
Speaker 2 (07:01):
You're seeing the likes of some of the momentum names.
Speaker 3 (07:04):
The you know, the oracles of the world. Intel got
a little bit of a bump today after some chatter
of Apple sniffing around for a tactical ad to their
otherwise government balance sheet. That now we own a stake
in Intel and Video as well, so there's a bit
of that more mutual handholding. But you saw a decent
(07:26):
amount of weakness on some of the momentum stuff. The
gold miners were weaker today. Google was weaker today. Material
so some of that chase that you've seen has run
out of steam.
Speaker 2 (07:38):
Still parts of the market that are holding up pretty well.
Energy has done quite well.
Speaker 3 (07:43):
We're clearly going after the areas that Hey, if this
AI is in fact bubbly in stock valuation, doesn't mean
it's bubbly in the sense that it's not going to
continue for a long time into the future. It's just
that how we're going to feed these things, and energy
is that lagger that people are starting to sniff at
(08:03):
as well. Utilities, right, you know, they sort of meld
together at this point because someone needs to.
Speaker 2 (08:09):
Provide the energy for these.
Speaker 3 (08:13):
Massive data center buildouts, and you're getting that rotation, that
natural rotation in the market. But what we want to
watch for is for the leaders to lose steam, right,
And this is what's very symptomatic of when bull markets
run out of gas, is you know, before you know it,
you're like, oh, we're down two percent or and then
these leaders just continue to lag and lag and lag,
(08:35):
and they pull everything else down. And again, we're both
still in the opinion that the market's higher than here
at the end of the year, just given the lower
interest rates and favorable business environment. But near term, you're
starting to hear more from the skeptics than you are
from the bulls, and that's when you get a little
bit of change of momentum. And I think that's part
of what we're seeing.
Speaker 1 (08:56):
Yeah, that's exactly right. Let's hit some of it with
some of these stocks actually how they actually performed today
to Jason's point, So let's go back to the gold area.
One of the big losers today Freeport mac Moran. Big news,
but it was kind of company specific. They cut their
third quarter sales guidance first of all, following a fatal
mud rush incident at an Indonesian mind, so that stock
(09:17):
came under pressure, almost a seventeen percent loss on FCX,
down sixteen point ninety five percent seven dollars and sixty
nine per cent loss to a price of thirty seven
sixty seven. Now let's go to the space you're just mentioning, Jason.
We had fairly decent numbers out of Micron this morning.
But to your point, this is one of the signs
that the tech slash AI area is starting to get
(09:38):
a little bit tired when the company gives a really
good earnings report and the stock ends the day down right,
and so Micron is an example of this. Again, a
very important, very impressive beat was announced this morning. They
raised their earnings outlook, et cetera. But we finished down
four dollars and seventy cents on MU two point eight
two percent loss to one sixty one seventy one. Back
to the oracle that you mentioned, five dollars thirty nine
(10:00):
cent loss, down one point seventy two percent to three
oho eight forty four. Then you move over to Intel
kind of the opposite six point four to one percent
gain today one dollars eighty eight cent gain. The thirty
one twenty two apples down about two dollars and twelve
cents to two fifty two to thirty one. But man,
the stud of the day it was Tesla. Yeah, sixteen
dollars ninety five cent gain, three point ninety eight percent
(10:23):
to four forty two eighty Again, this consumer's discretionary area
was was pretty strong there. But you know, it was
pretty good numbers. And then let's throw this out there.
You know, this was interesting also, Jason, in regards to
our only report of the day, the new home sales data.
So this was the month of August surging twenty point
two percent from July to the month of August, and
(10:46):
that was a obviously a very very significant move there.
They did revise up the prior report to six hundred
and sixty four thousand units sold from six hundred and
fifty two thousand, so a little bit of revision there. Uh.
But again, this this game, this twenty percent gain I
just mentioned, Jason, you know, this game before the mortgage
rates really began to fall, you know, in the month
(11:06):
of September. The other thing that was interesting, and I
mentioned this on my stock update this morning is we
saw a big uptick in the percentage of new homes
sold over eight hundred thousand, and so that helps explain
the large jump and the average selling price. We were
a little bit weak here on the West, but other
parts of the country were very strong. But I thought
the biggest takeaway that I had at this was again
that strong jump in the eight hundred thousand range. You
(11:29):
know that is that falls right under the Toll brother
model of course. Yeah, and that stock only finished up
sixty one cents today, so that should would have had
a bigger moves in that group in my opinion.
Speaker 3 (11:39):
Yeah, I think four something percent. Right As far as
the prices on uper month, that's pretty crazy.
Speaker 1 (11:44):
Yeah.
Speaker 3 (11:45):
Yeah, you wonder what was going on, whether there was
some deal of some kind somewhere to yeah folks.
Speaker 1 (11:51):
Some incentives or something that you know, Dwight and Corey
talking about. Yeah, I don't know, I don't know, but yeah,
So that was our only report of the day to day.
So it was interesting. All right, when we come back,
let's uh, let's see what topic we want to go
into first, Jason, Let's go into this is kind of
a fun one. The lithium situation. And story. Since that's
right here in our backyard. First, let's turn it over
to Kristen. Snow sheet, of course, is in the right
(12:13):
now traffics in our Hello, Kristen, welcome back to the
John Sanchez Show on News Talk seven eighty k O
waits what Jason gott All right, here's how we finished up. Again.
We had good strength this morning, up about seventy five
eighty points, if I remember, at our high level, thenished
(12:34):
down about one hundred points north of that high point,
down one seventy two point three seven percent, lost to
a close of forty six thousand one. And now as
I lost seventy five points point three to three percent,
SMP gave up nineteen points or about point two eight percent.
So yeah, so a little a little bit of a
roll over there. That again, uh, not impressive. And again
(12:55):
market did the same thing yesterday. Remember we lost about
eighty eight on the dial yesterday and down about two
sixteen a Nasdaq. So now we've got two days of
the same type of market behavior and we're going to
get to that again some of the concerns that we have.
But first let's talk about a huge winter today. Mister
Gaunt a huge winter today. So if you haven't heard
about this company, folks, it's right in our backyard. It's
in Humboldt County, and it is a big piece of
(13:19):
the Nevada Desert right now. But they're obviously they're starting
to work on it. And it is a place that
is called Lithium Americans. America's excuse me, Lithium Americas. Once again,
we are not touting the stock. We're just sharing with
you because this was a huge mover today. Best level
I saw today, Jason, about you. I sought up over
a little like one hundred percent in some decimals, but
(13:41):
once again finished up with after hours. Right now it's
straightened up about ninety one point eighty six percent two
dollars eighty two cent gain to five dollars and eighty
nine cents. So, folks, what we want you to kind
of think about is this we are now starting to
embark on a new trend here in America where the
government quote lends a company money, I eat intel, I
(14:04):
e now lithium and then turns around and goes, wait
a minute here, we want a steak for that loan. Okay,
is this the right thing? Do you want to see
the government. Do you want to see the government owning
publicly traded companies. Their argument, of course, Jason, is what, hey,
it's a national or natural resource and for national security reasons.
(14:24):
I don't know how you can say that about Intel,
but they do, and you definitely can make a case
for that when we're talking about a lithium mine, right, Yeah.
Speaker 3 (14:32):
I mean they're backing into their you know, sovereign wealth
fund by printing dollars to borrow to lend them and
then having a steak.
Speaker 2 (14:42):
Yeah.
Speaker 3 (14:42):
I learned two things today. One where that there's a
Humboldt County in Nevada. As soon as you said Humboldt County,
I thought of weed and redwood trees, but there's also
one here in this state. I'm not a not a local.
And then just whereth Acker passes, it's pretty cool. It's
yeah out there and so neat how they find these
(15:02):
things in the middle of you know, that is what
looks like nothing just from shapes of mountains, And yeah,
it's a ginormous lithium.
Speaker 1 (15:11):
Mind what I think, if not the largest in the
world right up there. So it's it is. It is massive,
and like you said, right in the middle of the
of the desert. But let's talk about this government interest
in this company. So again, stock you know more than
like I said, roughly one hundred percent gain today. So
little history on this company. They're based out of Vancouver.
(15:32):
They actually trade on two exchanges. They trade here in
the US and then they trade on the Toronto Stock Exchange.
But let's talk about the government side of things. So
today we woke up to the White House proposing an
equity stake in the company. And they're doing this because
the company wants to renegotiate the terms of a two
point two billion dollar loan that the company took from
(15:53):
the Department of Energy for Again this thatcker past mine. Okay,
Reuters first reported thequity stake proposals, so no one really
knew about this. And if you notice, this is the trend, folks,
we're finding out of these loans that the government has made,
whether it's you know, Secure Act or whatever it may be,
these things just keep surfacing. Oh yeah, the government lent
this companies this money and so on so forth. So
(16:18):
the move by the White House is this, they want
to take direct ownership in the mineral supply chain that
they feel again is critical to US interest. Right, we
know we need lithium for the batteries and so on
and so forth. But this is the first time that
the government has proposed a stake in a Canadian company. Now,
the Department of the Defense took a fifteen percent equity
stake in Jason, and I brought this story to you
(16:41):
back in July INP Materials, right, Jason, Now that's a
Las Vegas based INP Materials and that stock has more
than doubled since that story came out again in July.
And what did you say it did today's Magnetics.
Speaker 3 (16:56):
Yeah, they're magnetics, the pure play in magnets in the US,
and Apple did a big joint venture with them. Even
Tim Cook even mentioned MP Materials specifically in a call.
So yeah, that's things been a moonshot.
Speaker 1 (17:11):
Okay, yep, it really has. And I apologize I see
this in the story next, I didn't get a chance
to read this. The mine is the largest source of
lithium in North America, not the world. The first phase
of the project's schedule to start operation in late twenty
twenty seven. Now, remember this is a joint venture between
Lithium and General motors and today, yeah, exactly, exactly. Now,
(17:35):
Lithium America's has a sixty percent sixty two excuse me
percent steak and operates the mine. GM, as I said earlier,
has a thirty eight percent steak, and they've agreed to
buy off take from the mine when it's operational. Lithium
of course very critical and electric vehicle batteries. As I said, Now,
Lithium Americas and GM had to renegotiate the terms of
(17:56):
the loan for the Thacker pass mind, because they did
not meet the conditions for the first disbursement. So what
does that mean? In English? GM said, Okay, we're gonna
give you some money. We're gonna lend you some money,
but like in construction, we're gonna give this to you,
but you've got certain goals you have to meet. Well,
evidently they didn't meet some of the conditions for the
first disbursement of the money. So that's according to the
(18:18):
Trump administration. Now, during the negotiations with the Department of Energy,
they're requested to push out part of the loan payment
into later years. So there's another issue. They owe the
government for this quote loan and they can't pay it.
You know probably you know soon, and so they want
to push that out. So now you go, oh, we
got a cash strap company, just exactly what the Trump
(18:38):
administration loves. So the official from the company said, if
we're going to push out part of the repayment into
later years, then the administration would like a very small
stake of equity to create essentially a cash buffer and
eliminate some risk on behalf of taxpayer. I love that.
Now a deal has not been finalized, but the Trump
administration supports the project and the discussions are positive. The
(18:59):
official said. The investment could need Canadian approval. That's going
to be a fun one as well as given because
again the company's jurisdiction now. Lithium America is today confirmed
that they are in talks with the Energy Department and
General Motors on the loan. GM declined any interviews at
this point. Interior Secretary Doug Bergman revealed in April that
(19:19):
the Trump administration was considering taking equity stakes in minors
to back them against state sponsored competition in China. So,
mister Gott, what do you feel about the government getting
involved in ownership of publicly traded companies.
Speaker 3 (19:36):
I don't mind it. In the sense that they have
a minority stake. They clearly we need these minerals to
you know, be left in the right hands. And ironically,
you know, in the case of like a Tyson with
selling off parts of their business or cargo, you know,
selling off o there's US steel, certain things US steel, Right,
(19:57):
there's certain things that maybe the government have ten percent stake,
and it will make it much more difficult for them
to theoretically be sold to other countries, other buyers, almost
like a poison pill.
Speaker 2 (20:09):
So yeah, I don't hate it.
Speaker 3 (20:11):
I don't like, you know, a Venezuela, we're going to
take it over and you know, make everything that your
company is now owned by the government because we've deemed
it strategically important.
Speaker 2 (20:21):
But in this case, they're just.
Speaker 3 (20:22):
A minority shareholder, probably with a really loud voice. So
I don't hate it. For these types of things. I
wouldn't want them in every company, but it doesn't bother me.
Speaker 1 (20:33):
Yeah, see, I don't like it. They're no part of it,
even the national defense side of things. I think that's
a cop out excuse, I really do. Yeah, because I
can make that argument for any stock that's out there, right,
it's it's vital to the US economy, it's vital to
US defense. I mean, my god, So why don't you
take a stake in Lockeed.
Speaker 2 (20:53):
Martin or right?
Speaker 3 (20:54):
I mean right, but they kind of do. Right, if
they were not going to buy anything from you anymore.
Speaker 2 (20:58):
And they go to zero, it's still.
Speaker 3 (21:01):
But I definitely see what you're saying. I definitely see
what you're saying. But this specifically for metals or mining
or water or sort of key materials, I can get
my head around and you know, not freak too much about.
But yeah, if they were gonna get heavy handed in
other parts of our you know, I'm the US government's
buying a forty percent stake in ABC. You're like, right,
(21:25):
So those types of things is probably where I would
get a little more concerned of, you know.
Speaker 1 (21:29):
So you're okay if it's a national issue, but not right.
Speaker 3 (21:34):
Yeah, this one seems less political than it does domestic.
Speaker 2 (21:41):
Protection.
Speaker 3 (21:41):
You know, I think both sides can blue or red
can be happy with US having key materials versus you.
Speaker 1 (21:48):
Know, they'll like it. I want the government out of
publicly traded companies pockets. Stay out of corporate America as
much as you can there to control enough.
Speaker 2 (21:55):
All right, all right, I'm with you. Then fine, screw it, right, we.
Speaker 1 (21:58):
Finally came to an agreement, negotiated with you. All Right,
we come back. Let's talk about some of the things
this market is worried about right now. Two major factors
once again. Number one one of the comments that dron
Pal made yesterday about the valuation of the of the
stock market. And then secondly, this whole situation with AI
and the massive spin that's going on. Can this continue?
Are we in a bubble, which therefore we could be
(22:20):
in a lot of trouble because this market right now,
what would you say, Jason, I'm gonna I'm gonna thrown estimate.
See if you agree. I'm gonna say this rally that
we've experienced, and I'll say year to date instead of
picking a time period. I would say it's probably at
least sixty percent driven by the AI. Oh yeah, catalysts.
Speaker 2 (22:35):
Yeah, we'll take the over. But yes, I agree with you.
Speaker 1 (22:37):
Okay, perfect. So again, if that comes to a little
slow down, little halt for a bit, whatever the case
may be, market could succumb to that selling pressure. So
we'll discuss that when we come back. Let's turn it
over to Jack Saban. He's got news trafficking with our Hello, Jack,
Welcome back to the John Sanchez Show on News Talk
seven to eighty KO, which with Jason Gott wants to
(22:57):
get a little bit of a tough session today, and
we're gonna explain why finished down when seventy two on
the daw NASDUC last seventy six SMP down nineteen. All right,
we need to take you back to yesterday to someone
explain what happened today. So yesterday, Jerome Powell was given
a speech and he, for the most part, the takeaway
was the same what we heard at last Wednesday's Fed
(23:22):
Interest Rate Decisions Slash press conference, Right, but he said
something yesterday that caught a little bit of attension throughout
the day and started to pick up some traction. But
what I noticed today, Jason, it picked up a lot
more traction today and hence what I think is one
of the reasons the market was down today. And what
did the sherman say? He said, by many measures, For example,
(23:45):
equity prices are fairly highly valued, fairly highly And I
joked about this with Corey yesterday. I'm like, hmm, there's
a kind of two different words, fairly highly but trying
to make sense. So today, who's one of the major
(24:06):
market pundits. I keep on to say, I forget who
was a very well respected guy. But he came out
and he did an article and his takeaway was was
this is this the same thing that Jerome or that
Alan Greenspan said when he mentioned the words a rational
exuberance in two thousand, which then started the whole cascade
(24:27):
of the market selling off. So I'm glad I wasn't
the only one, because, like I said, I spent a
lot of time talking about this yesterday. What's your take
on it?
Speaker 2 (24:34):
The interesting part was right, So Greenspan's comment was in
nineteen ninety six, right, so he gets dubbed. Yeah, so
here's the interesting part.
Speaker 3 (24:43):
He said it in ninety six, but he gets credited
with announcing the top of the market. Again, he was
right in that, but he was You had a lot
of rally after he made those comments, and so I
think that's part of the takeaway as well today as
that you know they.
Speaker 2 (25:02):
He may be right, but he may be wrong on timing.
Speaker 3 (25:05):
And that's why you and I were going back a
little bit earlier around is it two thousand and eight,
two thousand and nine like I've been thinking it's ninety seven, right,
So more in line with this, right that not to
say that this isn't a bubble, because it will be one, like.
Speaker 2 (25:20):
I fullheartedly feel.
Speaker 3 (25:22):
It will be because of you know, this type of
transformational technology, be an AI, be a data Ultimately you're
going to overbuild, right, It's just inevitable with all of
the hype and all the money behind it and all
the you know trillions that Open AI talks about just
haphazardly at this point, which could be right long term,
(25:44):
but we will overbuild, especially just from an efficiency standpoint,
you know, like anything what we need now doesn't necessarily
mean we're going to use that same thing later, right
Moore's law of data and storage. Things will get easier, cheaper, faster,
so on and so forth. So it will be a bubble.
But you could jump out of the market right now
(26:06):
and miss a double from here, right, like any markets
can go down forty percent, and the next question should
always be but from where?
Speaker 2 (26:14):
Right?
Speaker 3 (26:14):
And that's that's the hard part is an investor, and
you know, getting caught up with this type of a statement.
But it's it it it definitely cuts the market off,
you know, people very much to your point sort of said,
you know, and I think that's why he didn't say
as a you know, like Janet Yellen members, she talked
about biotechs specifically, so he didn't go about doing that.
(26:37):
But you would think that FED members would just do
their best to just stay out of it. But maybe
it was a shot at Trump just intentionally at this point,
just right, you know, that's something that Trump specifically would
talk about. Is you know that it's not so him
saying the opposite is maybe a maybe a shot of
some kind that I didn't hear a lot of people
talk about.
Speaker 2 (26:57):
But you never know, So.
Speaker 1 (26:59):
I just brought this up. You're you're, you're right, nineteen
ninety six. There had to have been another time because
it wasn't you know, the Japanese market plunged again in
two thousand and it started the whole thing. But he said,
I know he said that, Yeah, he said it ninety six.
I know he said it. Maybe he was repeating in
(27:22):
our I mean, we didn't go four years that that
market is continuing to run after he said that. Sometimes
I don't know.
Speaker 2 (27:30):
It's interesting, Yeah, I know.
Speaker 3 (27:32):
Uh, and he wrote about it in his book too,
But yeah, he gets credited with it, right, but oftentimes
he's just you know, early, right. But as we talked
about before, a difference between early and wrong, So that
one was.
Speaker 1 (27:47):
The catalyst of the dot com bubble burst because I
always based it on that.
Speaker 2 (27:52):
I mean, it wasn't his comment. He didn't Yeah, he
didn't make it go. So the top was sort of
April May.
Speaker 3 (27:59):
I'm looking at chart June of two thousand, right, but
I mean from his comments back if I'm looking at
a chart from December of ninety eight.
Speaker 2 (28:11):
Sort of time frame, I'm just kind of quickly looking here.
Speaker 1 (28:14):
Ye, S and P.
Speaker 3 (28:18):
Was in the thousand range, legit, you know, and then
we got all the way up to fourteen hundred, so
another forty some odd percent from where he made those comments,
you know. But again we went all the way down
to you know, the eight hundred level when the S
(28:39):
and P finally bottomed years later.
Speaker 1 (28:42):
Look up at the break what caused the dot com
Because I have always in my heart of hearts and
I've always said it was when he made those comments
in two thousand, So yeah, yeah, something's there. But the
bottom line regardless of this, you know, chatmus friends. But
the bottom line is, what does that mean when we
hear irrational exuberance? We think of, you know, the fundamentals.
People aren't paying attention to the fundamentals, the market is
(29:02):
heating up, et cetera. And the takeaway again of what
Jerome Pale said the other day is being taken in
context that that's essentially what he was saying. If you
read between the lines, that it's you know, fairly highly
you know, yeah, I mean it's it's.
Speaker 3 (29:16):
So another add on too. I'm just looking in in
uh Wikipedia. Robert Schiller, right, who's the cape index? He
wrote a book titled Irrational Exuberance and it was published
in two thousand, so he clearly was using it, reiterating
Greenspan's comments, pressing it. And that's when I mean cape
(29:40):
ratio is what you follow if you're evaluation person. And
that was the one of the high points that the
cape ratio has ever been at. So that's probably part of.
Speaker 1 (29:50):
A lot of reading the book and going oh wait
a minute.
Speaker 3 (29:54):
Here, thank you, and remember the cape ratio is now
at similar levels, actually higher than where it was.
Speaker 1 (30:00):
I didn't have to add that point in Well, thank
you for making me realize I didn't lose my mind
at this. I was like, I know, I know, all right,
good jobuddy, thank you appreciate that. All Right, let's wrap
it up a Christmas no right now, Traffic Center christ
Welcome back to the John Sanchez Show on News Talk
seven eighty ko H, all right. We've talked about again
the concerns of Rman Powell's comments yesterday or shoot me
(30:22):
on Monday. So we got that. Now, what's the other
thing the market's worried about? At this point? We start
looking at this AI spin Jason, right, and it is
kind of a rational exuberance, and this is what worries me. Okay, again,
I'm not saying that this is going to create a
market downturn. I think it's going to create a little
bit of choppiness, as you, well, you and I both
think this. So we talked about the circular accounting as
(30:47):
just one of the ideas and if we dig deeper,
which I think a lot of I'm seeing a lot
of analysts. I sent you some comments today by another
analyst who thinks it's no problem, meaning circular accounting. Again,
what Navidia is doing just in a brief example is
they quote invested one hundred billion dollars into open ai,
the parent of chat GPT. But but then open ai
(31:09):
has to take that hundred billion, yeah, and buy Navidia
chips with it. So the other thing I mentioned on
the show yesterday, which you know you and I were
together yesterday, that I thought was interesting is financing these
data centers. It is very expensive even for some of
these very very large companies Jason. They're quoting six nine
(31:31):
twelve percent interest they are paying to to to build
these centers, right, and not to mention now they're getting
into leasing the GPUs, meaning the chips. So there's a
lot of Again I'm almost like saying, my heart is
telling me or is this phantom money? That's that's that's
(31:52):
that's propelling this growth in AI. We know the growth
is there, but it's the profitability issue. Even open Ai said,
look at it's gonna be you know, another five, six,
seven years until we were profitable.
Speaker 2 (32:04):
Right, that's what we have to watch completely agree. And
you know we've talked about private credit.
Speaker 1 (32:09):
Right.
Speaker 2 (32:09):
Private credit is a big buyer of data centers.
Speaker 1 (32:12):
Right.
Speaker 3 (32:13):
They're funding these things at very good interest rates, right,
and not good in as far as the buyer, but
very favorable to investors. Right where you're getting six seven
eight potential percent interest rates because of the view that
long term this is going to be such a swell deal,
people are willing to pay those But if the water
(32:33):
goes out and you're a private credit holder of an
asset that now doesn't produce the a can't pay the interest,
and or doesn't produce the cash flow that you expected
it was going to, you're now trapped in these assets.
And that's why I've talked about a concern about private
credit in general.
Speaker 2 (32:48):
But I agree with you. These are promises.
Speaker 3 (32:53):
They aren't necessarily deliveries, right, Like they're not writing a
check for five hundred billion dollars today, they're promising to give.
Speaker 1 (32:59):
It Friday in a check. Right, someone's right in a check.
That's just not inn video and this is terrible. Yes,
but someone is paying for those construction and you know,
even Microsoft needs and comments today we're having problems cooling
these centers, right, they're looking.
Speaker 2 (33:13):
At an archology.
Speaker 1 (33:14):
It's just a lot.
Speaker 2 (33:15):
Just keep the windows open.
Speaker 1 (33:16):
I put a fan up in the window. These are
you know, again, these are very capital intensive and I
think the other thing that that, as I've studied the
circular accounting, the other thing that has me, you know,
scratching my head a little bit is we still don't know,
and you've brought this up many times, we still don't
know where is the likes of a of a of
a of a open AI or anybody else where are
(33:37):
they going to make the money. We still don't have
any company coming out and going. When we hit quite
you know, a trillion users, we're gonna charge them five bucks. Okay,
I can wrap my head around that. Where's the money
going to be made? No one's saying anything.
Speaker 3 (33:49):
It's all spec I mean again, we're you know, we're
looking speculative, right, we're looking at AI spends internally, right,
we've never seen and.
Speaker 1 (33:57):
For a product that we don't know how anyone's going
to pay for.
Speaker 2 (34:00):
Agreed, Agreed, it is, It is very agreed. It's tough.
Speaker 3 (34:04):
As we talked about quickly too, is the cost of
a chip? And then what's the effective life of the chip?
All right, well it decays in three to five years.
Think of an iPhone as long, right, but it's not
a thousand bus for one of these GPUs it's one
hundred thousand dollars, right, and so how much money are
you making to offset the fact that in five years
you need to go redo the.
Speaker 2 (34:22):
Whole you get to go right?
Speaker 1 (34:23):
Interesting though, I know, I know, it's it's fascinating. We're
going to obviously continue to talk about We're gonna continue
to watch it. But once again, our point of bringing
all this up once again, and we're not saying there's
any you know, major downturn coming or something. These are
the things you as an investor need to be thinking about.
And it's our job again to bring you these ideas.
We already doing it for our clients. We're going to
bring it to you, So take it for what it's worth.
Great job, my friend. That was a lot of fun.
(34:44):
We'll do it again tomorrow on The John Sanchez Show.
God blow us, have a great afternoon. John Sanchez is
a registered investment advisor, and the opinions expressed by Sanchez
Gone Capital Management, LLC on the show or their own
and do not reflect the opinions of News Talks seven
eighty or its pairing company, Q Media. All statements and
opinions expressed are based upon information considered reliable, Although it
(35:05):
should not be relied upon. As such, any statements or
opinions are subject to change without notice. Information presented is
for educational purposes only and does not intend to make
an offer or solicitation for the sale or purchase of
any specific securities, investments, or investment strategies. Investments involve risk, and,
unless otherwise stated orre not guaranteed. Information expressed does not
(35:28):
take into account your specific situation or objectives, and is
not intended as recommendations appropriate for any individual. Listeners are
encouraged to seek advice from a qualified tax, legal, or
investment advisor to determine whether any information presented may be
suitable for their specific situation. Past performance is not indicative
of future performance.
Good Wednesday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven to eighty k which it's
a pleasure to be with you on a pleasure to
be with my partner, mister Jason Gunt Sanchez got countable Management,
knows his names in the name, in the business name.
Speaker 2 (00:15):
Yes, yeah, it makes it all.
Speaker 1 (00:16):
All makes perfect sense, makes perfect sense. How you doing, my.
Speaker 3 (00:19):
Friend, I'm doing okay. It's uh, market feels a little weird,
don't you think.
Speaker 1 (00:24):
Yeah, yeah, yeah, I'm glad you started the show off
that way, because that's that is definitely something that we
are going to discuss. We Uh. Jason and I have
this little little term that we call each other, and
he started it and I've kind of picked up on it.
His spidy senses, right, So I sent him. I sent
him a message this morning. I said, my spidy senses
(00:45):
are starting to raise up a little bit about the
way this market is acting at this point. He goes, Yep,
me too. And so you know, Chris, with our clients,
we are always moving things around, et cetera. But we
want to kind of just share with you. It's not
gonna be our main topic today, but we're going to
kind of share with you what we see going on.
You see, this market has kind of been doing something
(01:05):
strange these last couple of days. We start off very
strong and then we roll over. And there's two primary
issues that we're going to discuss with you that we
think are starting to impact this market. Number one, and
again we're going to go in a great detail about this.
Number one is the comments by Jerome Powell yesterday basically saying,
(01:26):
you know what, We're overvalued in the equity markets, but
I'm not concerned about it. Right, I'll share with you
kind of exactly what he said. So we want to
talk about that because Jason and I have been around
this game a long time and we remember, like it
was yesterday, the comments of irrational exuberance, right, Jason, that
Alan Greenspan said back in two thousand and that started
a major market sell off. Not saying this is going
(01:46):
to happen by any means, but it you know, again,
we have to share these things with you. The second
issue that we see going on is, I know, I'm
stall like a broken record because every day we're talking
about this deal that was announced on Monday, this hundred
billion dollars deal between open Ai and Navidia and the accounting,
the circular accounting as it's called, where Navidia sold these chips.
(02:08):
But at the same time, you know, for for basically
every ten billion dollars of GPUs that open Ai bought,
they have to turn around and buy three and a
half times that many from Navidia. So again, it's kind
of a just a strange feeling. And it's not just us,
because we saw a lot of comments today coming out
(02:28):
from various people going, man, this almost feels like and
I saw this today, Jay said in ninety nine two thousand,
where we saw a lot of companies kind of quote
buying their earnings. Right, they're buying it by hey, we're
gonna we're gonna give you these products or sell you
these products, but you're gonna, you know, buy from us
and other things. And it's a very complicated issue.
Speaker 3 (02:47):
We're telling some of those companies back in the day. Yeah,
the optical equipment and such.
Speaker 1 (02:52):
That's right. The third thing that we're going to talk
about is this company called Lithium American. Uh. This is
a company right in our back right in Humboldt County,
and this is that massive lithium mine that is out there.
And remember, if you're not familiar with the story, we're
kind of bringing up to date. This was a joint project.
This is a Canadian company that owns this mine, General Motors,
(03:14):
has come in. I forget what their equity steak is.
I think twenty thirty percent somewhere around there, to produce
the lithium for their batteries. Okay, so everything was going fine. Well,
what we didn't know, or at least I didn't until
this morning the US government, that Apartment of Energy lent
lithium about three and a half billion dollars. Well, Jason,
what ends up happening when the government, now that we're
(03:35):
finding out, when the government quote lends a company money,
what does President Trump kind of end up doing?
Speaker 3 (03:43):
Kind of like the Godfather, where youyoe me a favor
at some point, right, you've become a a We're.
Speaker 2 (03:51):
Gonna, you know, get something from you, or get a
steak from you.
Speaker 1 (03:54):
It's okay, Yeah, And somehow this magical ten percent arose
this morning that the US government is potentially nothing is
formal yet potentially again to take a ten percent stake
in lithium. LAC is the symbol and guess what happened
to that stock today when that news broke, it just
started moving higher and higher in regular session and including
(04:17):
little after hours. Right now, the stock is up ninety
three point five to one percent today. A two dollars
and eighty seven cent gain, two five dollars and ninety
five dollars ninety four cents is where it's trading right
now in the after hours. So we're gonna mention that.
Then bottom of the hour, we're gonna get down to
our main topic. Some of you may not be aware
of this, but let me tell you it's a very
important topic. We just got the final IRS rulings. I
(04:39):
believe it was on Monday, So today's the first day
we've had to really talk to you about this, and
that is, if you are age fifty and you participate
in a four oh one K, you probably contribute what
we call a catch up contribution, the tune of seventy
five hundred dollars, right we all love to do that.
For those of us over age fifteen. Again, as we've
(04:59):
discuss before, when you're sixty to sixty three right now,
there's even a little bit more that you can contribute,
a little over eleven grand which includes this seventy five hundred.
But here's the issue with the irisis ruled on this week.
They said, starting next year, those of you that want
to do a catchup contribution in your four to one K,
guess what. It's no longer going to be pretax. It's
got to be a wroth contribution, meaning after tax sor
(05:23):
Ry Jason, we're going to talk about why the government
is doing this issue.
Speaker 3 (05:27):
And again, you know the it's not necessarily bad. It
doesn't help you on the income lowering your taxable income side,
but it does allow you to stuff more money into
your four oh one K that's tax deferred.
Speaker 2 (05:39):
So it's it's good and bad. It depends on But I'm.
Speaker 1 (05:42):
Not getting the pre tax contributions. Yeah, and as an employer,
I'm paying payroll taxes on that money and so on.
So far, I guess the issue that I have that
you'll you'll hear from me is I don't like the
idea of the government telling me how I can invest
my money, right, I mean, there's enough rules and limitation.
Now they're saying, hey, this great benefit that's been around,
(06:02):
this ketchup provision. Remember we have a thousand dollars ketchup
provision in Iras seventy five hundred. As I said in
the four to one case. But now the government's going no, no, no, no,
We're going to tell you how you're going to you know,
put this money. It's got to be after tax. Well right,
you know for some of us that are in a
higher tax Brket, I don't care about that. If I
wanted to do WROTH, I would, I would, I would
put my WROTH contribution in my four oh one K.
(06:24):
But I need the pre tax contributions and so on
and so forth. So this is just another sign that
the government again kind of telling us what to do
and our retirement monies.
Speaker 2 (06:32):
And we were talking a little bit earlier.
Speaker 3 (06:34):
You want to touch on some of the you know,
the recent rules around four to one k's for small
businesses California, Nevada. You know, for folks who aren't aware
like this is this is very important information.
Speaker 1 (06:44):
It is indeed it is Indeed you have some very
very significant rules are coming down at the end of
this year. All right, my friends, So we have a
lot of things to hit. Let's get going. Wrap us
up on the stock market side of things today.
Speaker 3 (06:55):
Yeah, well, I mean stock market wise, Like you said,
it felt like a lot earlier and then it of
gave up the ghost in the afternoon.
Speaker 2 (07:01):
You're seeing the likes of some of the momentum names.
Speaker 3 (07:04):
The you know, the oracles of the world. Intel got
a little bit of a bump today after some chatter
of Apple sniffing around for a tactical ad to their
otherwise government balance sheet. That now we own a stake
in Intel and Video as well, so there's a bit
of that more mutual handholding. But you saw a decent
(07:26):
amount of weakness on some of the momentum stuff. The
gold miners were weaker today. Google was weaker today. Material
so some of that chase that you've seen has run
out of steam.
Speaker 2 (07:38):
Still parts of the market that are holding up pretty well.
Energy has done quite well.
Speaker 3 (07:43):
We're clearly going after the areas that Hey, if this
AI is in fact bubbly in stock valuation, doesn't mean
it's bubbly in the sense that it's not going to
continue for a long time into the future. It's just
that how we're going to feed these things, and energy
is that lagger that people are starting to sniff at
(08:03):
as well. Utilities, right, you know, they sort of meld
together at this point because someone needs to.
Speaker 2 (08:09):
Provide the energy for these.
Speaker 3 (08:13):
Massive data center buildouts, and you're getting that rotation, that
natural rotation in the market. But what we want to
watch for is for the leaders to lose steam, right,
And this is what's very symptomatic of when bull markets
run out of gas, is you know, before you know it,
you're like, oh, we're down two percent or and then
these leaders just continue to lag and lag and lag,
(08:35):
and they pull everything else down. And again, we're both
still in the opinion that the market's higher than here
at the end of the year, just given the lower
interest rates and favorable business environment. But near term, you're
starting to hear more from the skeptics than you are
from the bulls, and that's when you get a little
bit of change of momentum. And I think that's part
of what we're seeing.
Speaker 1 (08:56):
Yeah, that's exactly right. Let's hit some of it with
some of these stocks actually how they actually performed today
to Jason's point, So let's go back to the gold area.
One of the big losers today Freeport mac Moran. Big news,
but it was kind of company specific. They cut their
third quarter sales guidance first of all, following a fatal
mud rush incident at an Indonesian mind, so that stock
(09:17):
came under pressure, almost a seventeen percent loss on FCX,
down sixteen point ninety five percent seven dollars and sixty
nine per cent loss to a price of thirty seven
sixty seven. Now let's go to the space you're just mentioning, Jason.
We had fairly decent numbers out of Micron this morning.
But to your point, this is one of the signs
that the tech slash AI area is starting to get
(09:38):
a little bit tired when the company gives a really
good earnings report and the stock ends the day down right,
and so Micron is an example of this. Again, a
very important, very impressive beat was announced this morning. They
raised their earnings outlook, et cetera. But we finished down
four dollars and seventy cents on MU two point eight
two percent loss to one sixty one seventy one. Back
to the oracle that you mentioned, five dollars thirty nine
(10:00):
cent loss, down one point seventy two percent to three
oho eight forty four. Then you move over to Intel
kind of the opposite six point four to one percent
gain today one dollars eighty eight cent gain. The thirty
one twenty two apples down about two dollars and twelve
cents to two fifty two to thirty one. But man,
the stud of the day it was Tesla. Yeah, sixteen
dollars ninety five cent gain, three point ninety eight percent
(10:23):
to four forty two eighty Again, this consumer's discretionary area
was was pretty strong there. But you know, it was
pretty good numbers. And then let's throw this out there.
You know, this was interesting also, Jason, in regards to
our only report of the day, the new home sales data.
So this was the month of August surging twenty point
two percent from July to the month of August, and
(10:46):
that was a obviously a very very significant move there.
They did revise up the prior report to six hundred
and sixty four thousand units sold from six hundred and
fifty two thousand, so a little bit of revision there. Uh.
But again, this this game, this twenty percent gain I
just mentioned, Jason, you know, this game before the mortgage
rates really began to fall, you know, in the month
(11:06):
of September. The other thing that was interesting, and I
mentioned this on my stock update this morning is we
saw a big uptick in the percentage of new homes
sold over eight hundred thousand, and so that helps explain
the large jump and the average selling price. We were
a little bit weak here on the West, but other
parts of the country were very strong. But I thought
the biggest takeaway that I had at this was again
that strong jump in the eight hundred thousand range. You
(11:29):
know that is that falls right under the Toll brother
model of course. Yeah, and that stock only finished up
sixty one cents today, so that should would have had
a bigger moves in that group in my opinion.
Speaker 3 (11:39):
Yeah, I think four something percent. Right As far as
the prices on uper month, that's pretty crazy.
Speaker 1 (11:44):
Yeah.
Speaker 3 (11:45):
Yeah, you wonder what was going on, whether there was
some deal of some kind somewhere to yeah folks.
Speaker 1 (11:51):
Some incentives or something that you know, Dwight and Corey
talking about. Yeah, I don't know, I don't know, but yeah,
So that was our only report of the day to day.
So it was interesting. All right, when we come back,
let's uh, let's see what topic we want to go
into first, Jason, Let's go into this is kind of
a fun one. The lithium situation. And story. Since that's
right here in our backyard. First, let's turn it over
to Kristen. Snow sheet, of course, is in the right
(12:13):
now traffics in our Hello, Kristen, welcome back to the
John Sanchez Show on News Talk seven eighty k O
waits what Jason gott All right, here's how we finished up. Again.
We had good strength this morning, up about seventy five
eighty points, if I remember, at our high level, thenished
(12:34):
down about one hundred points north of that high point,
down one seventy two point three seven percent, lost to
a close of forty six thousand one. And now as
I lost seventy five points point three to three percent,
SMP gave up nineteen points or about point two eight percent.
So yeah, so a little a little bit of a
roll over there. That again, uh, not impressive. And again
(12:55):
market did the same thing yesterday. Remember we lost about
eighty eight on the dial yesterday and down about two
sixteen a Nasdaq. So now we've got two days of
the same type of market behavior and we're going to
get to that again some of the concerns that we have.
But first let's talk about a huge winter today. Mister
Gaunt a huge winter today. So if you haven't heard
about this company, folks, it's right in our backyard. It's
in Humboldt County, and it is a big piece of
(13:19):
the Nevada Desert right now. But they're obviously they're starting
to work on it. And it is a place that
is called Lithium Americans. America's excuse me, Lithium Americas. Once again,
we are not touting the stock. We're just sharing with
you because this was a huge mover today. Best level
I saw today, Jason, about you. I sought up over
a little like one hundred percent in some decimals, but
(13:41):
once again finished up with after hours. Right now it's
straightened up about ninety one point eighty six percent two
dollars eighty two cent gain to five dollars and eighty
nine cents. So, folks, what we want you to kind
of think about is this we are now starting to
embark on a new trend here in America where the
government quote lends a company money, I eat intel, I
(14:04):
e now lithium and then turns around and goes, wait
a minute here, we want a steak for that loan. Okay,
is this the right thing? Do you want to see
the government. Do you want to see the government owning
publicly traded companies. Their argument, of course, Jason, is what, hey,
it's a national or natural resource and for national security reasons.
(14:24):
I don't know how you can say that about Intel,
but they do, and you definitely can make a case
for that when we're talking about a lithium mine, right, Yeah.
Speaker 3 (14:32):
I mean they're backing into their you know, sovereign wealth
fund by printing dollars to borrow to lend them and
then having a steak.
Speaker 2 (14:42):
Yeah.
Speaker 3 (14:42):
I learned two things today. One where that there's a
Humboldt County in Nevada. As soon as you said Humboldt County,
I thought of weed and redwood trees, but there's also
one here in this state. I'm not a not a local.
And then just whereth Acker passes, it's pretty cool. It's
yeah out there and so neat how they find these
(15:02):
things in the middle of you know, that is what
looks like nothing just from shapes of mountains, And yeah,
it's a ginormous lithium.
Speaker 1 (15:11):
Mind what I think, if not the largest in the
world right up there. So it's it is. It is massive,
and like you said, right in the middle of the
of the desert. But let's talk about this government interest
in this company. So again, stock you know more than
like I said, roughly one hundred percent gain today. So
little history on this company. They're based out of Vancouver.
(15:32):
They actually trade on two exchanges. They trade here in
the US and then they trade on the Toronto Stock Exchange.
But let's talk about the government side of things. So
today we woke up to the White House proposing an
equity stake in the company. And they're doing this because
the company wants to renegotiate the terms of a two
point two billion dollar loan that the company took from
(15:53):
the Department of Energy for Again this thatcker past mine. Okay,
Reuters first reported thequity stake proposals, so no one really
knew about this. And if you notice, this is the trend, folks,
we're finding out of these loans that the government has made,
whether it's you know, Secure Act or whatever it may be,
these things just keep surfacing. Oh yeah, the government lent
this companies this money and so on so forth. So
(16:18):
the move by the White House is this, they want
to take direct ownership in the mineral supply chain that
they feel again is critical to US interest. Right, we
know we need lithium for the batteries and so on
and so forth. But this is the first time that
the government has proposed a stake in a Canadian company. Now,
the Department of the Defense took a fifteen percent equity
stake in Jason, and I brought this story to you
(16:41):
back in July INP Materials, right, Jason, Now that's a
Las Vegas based INP Materials and that stock has more
than doubled since that story came out again in July.
And what did you say it did today's Magnetics.
Speaker 3 (16:56):
Yeah, they're magnetics, the pure play in magnets in the US,
and Apple did a big joint venture with them. Even
Tim Cook even mentioned MP Materials specifically in a call.
So yeah, that's things been a moonshot.
Speaker 1 (17:11):
Okay, yep, it really has. And I apologize I see
this in the story next, I didn't get a chance
to read this. The mine is the largest source of
lithium in North America, not the world. The first phase
of the project's schedule to start operation in late twenty
twenty seven. Now, remember this is a joint venture between
Lithium and General motors and today, yeah, exactly, exactly. Now,
(17:35):
Lithium America's has a sixty percent sixty two excuse me
percent steak and operates the mine. GM, as I said earlier,
has a thirty eight percent steak, and they've agreed to
buy off take from the mine when it's operational. Lithium
of course very critical and electric vehicle batteries. As I said, Now,
Lithium Americas and GM had to renegotiate the terms of
(17:56):
the loan for the Thacker pass mind, because they did
not meet the conditions for the first disbursement. So what
does that mean? In English? GM said, Okay, we're gonna
give you some money. We're gonna lend you some money,
but like in construction, we're gonna give this to you,
but you've got certain goals you have to meet. Well,
evidently they didn't meet some of the conditions for the
first disbursement of the money. So that's according to the
(18:18):
Trump administration. Now, during the negotiations with the Department of Energy,
they're requested to push out part of the loan payment
into later years. So there's another issue. They owe the
government for this quote loan and they can't pay it.
You know probably you know soon, and so they want
to push that out. So now you go, oh, we
got a cash strap company, just exactly what the Trump
(18:38):
administration loves. So the official from the company said, if
we're going to push out part of the repayment into
later years, then the administration would like a very small
stake of equity to create essentially a cash buffer and
eliminate some risk on behalf of taxpayer. I love that.
Now a deal has not been finalized, but the Trump
administration supports the project and the discussions are positive. The
(18:59):
official said. The investment could need Canadian approval. That's going
to be a fun one as well as given because
again the company's jurisdiction now. Lithium America is today confirmed
that they are in talks with the Energy Department and
General Motors on the loan. GM declined any interviews at
this point. Interior Secretary Doug Bergman revealed in April that
(19:19):
the Trump administration was considering taking equity stakes in minors
to back them against state sponsored competition in China. So,
mister Gott, what do you feel about the government getting
involved in ownership of publicly traded companies.
Speaker 3 (19:36):
I don't mind it. In the sense that they have
a minority stake. They clearly we need these minerals to
you know, be left in the right hands. And ironically,
you know, in the case of like a Tyson with
selling off parts of their business or cargo, you know,
selling off o there's US steel, certain things US steel, Right,
(19:57):
there's certain things that maybe the government have ten percent stake,
and it will make it much more difficult for them
to theoretically be sold to other countries, other buyers, almost
like a poison pill.
Speaker 2 (20:09):
So yeah, I don't hate it.
Speaker 3 (20:11):
I don't like, you know, a Venezuela, we're going to
take it over and you know, make everything that your
company is now owned by the government because we've deemed
it strategically important.
Speaker 2 (20:21):
But in this case, they're just.
Speaker 3 (20:22):
A minority shareholder, probably with a really loud voice. So
I don't hate it. For these types of things. I
wouldn't want them in every company, but it doesn't bother me.
Speaker 1 (20:33):
Yeah, see, I don't like it. They're no part of it,
even the national defense side of things. I think that's
a cop out excuse, I really do. Yeah, because I
can make that argument for any stock that's out there, right,
it's it's vital to the US economy, it's vital to
US defense. I mean, my god, So why don't you
take a stake in Lockeed.
Speaker 2 (20:53):
Martin or right?
Speaker 3 (20:54):
I mean right, but they kind of do. Right, if
they were not going to buy anything from you anymore.
Speaker 2 (20:58):
And they go to zero, it's still.
Speaker 3 (21:01):
But I definitely see what you're saying. I definitely see
what you're saying. But this specifically for metals or mining
or water or sort of key materials, I can get
my head around and you know, not freak too much about.
But yeah, if they were gonna get heavy handed in
other parts of our you know, I'm the US government's
buying a forty percent stake in ABC. You're like, right,
(21:25):
So those types of things is probably where I would
get a little more concerned of, you know.
Speaker 1 (21:29):
So you're okay if it's a national issue, but not right.
Speaker 3 (21:34):
Yeah, this one seems less political than it does domestic.
Speaker 2 (21:41):
Protection.
Speaker 3 (21:41):
You know, I think both sides can blue or red
can be happy with US having key materials versus you.
Speaker 1 (21:48):
Know, they'll like it. I want the government out of
publicly traded companies pockets. Stay out of corporate America as
much as you can there to control enough.
Speaker 2 (21:55):
All right, all right, I'm with you. Then fine, screw it, right, we.
Speaker 1 (21:58):
Finally came to an agreement, negotiated with you. All Right,
we come back. Let's talk about some of the things
this market is worried about right now. Two major factors
once again. Number one one of the comments that dron
Pal made yesterday about the valuation of the of the
stock market. And then secondly, this whole situation with AI
and the massive spin that's going on. Can this continue?
Are we in a bubble, which therefore we could be
(22:20):
in a lot of trouble because this market right now,
what would you say, Jason, I'm gonna I'm gonna thrown estimate.
See if you agree. I'm gonna say this rally that
we've experienced, and I'll say year to date instead of
picking a time period. I would say it's probably at
least sixty percent driven by the AI. Oh yeah, catalysts.
Speaker 2 (22:35):
Yeah, we'll take the over. But yes, I agree with you.
Speaker 1 (22:37):
Okay, perfect. So again, if that comes to a little
slow down, little halt for a bit, whatever the case
may be, market could succumb to that selling pressure. So
we'll discuss that when we come back. Let's turn it
over to Jack Saban. He's got news trafficking with our Hello, Jack,
Welcome back to the John Sanchez Show on News Talk
seven to eighty KO, which with Jason Gott wants to
(22:57):
get a little bit of a tough session today, and
we're gonna explain why finished down when seventy two on
the daw NASDUC last seventy six SMP down nineteen. All right,
we need to take you back to yesterday to someone
explain what happened today. So yesterday, Jerome Powell was given
a speech and he, for the most part, the takeaway
was the same what we heard at last Wednesday's Fed
(23:22):
Interest Rate Decisions Slash press conference, Right, but he said
something yesterday that caught a little bit of attension throughout
the day and started to pick up some traction. But
what I noticed today, Jason, it picked up a lot
more traction today and hence what I think is one
of the reasons the market was down today. And what
did the sherman say? He said, by many measures, For example,
(23:45):
equity prices are fairly highly valued, fairly highly And I
joked about this with Corey yesterday. I'm like, hmm, there's
a kind of two different words, fairly highly but trying
to make sense. So today, who's one of the major
(24:06):
market pundits. I keep on to say, I forget who
was a very well respected guy. But he came out
and he did an article and his takeaway was was
this is this the same thing that Jerome or that
Alan Greenspan said when he mentioned the words a rational
exuberance in two thousand, which then started the whole cascade
(24:27):
of the market selling off. So I'm glad I wasn't
the only one, because, like I said, I spent a
lot of time talking about this yesterday. What's your take
on it?
Speaker 2 (24:34):
The interesting part was right, So Greenspan's comment was in
nineteen ninety six, right, so he gets dubbed. Yeah, so
here's the interesting part.
Speaker 3 (24:43):
He said it in ninety six, but he gets credited
with announcing the top of the market. Again, he was
right in that, but he was You had a lot
of rally after he made those comments, and so I
think that's part of the takeaway as well today as
that you know they.
Speaker 2 (25:02):
He may be right, but he may be wrong on timing.
Speaker 3 (25:05):
And that's why you and I were going back a
little bit earlier around is it two thousand and eight,
two thousand and nine like I've been thinking it's ninety seven, right,
So more in line with this, right that not to
say that this isn't a bubble, because it will be one, like.
Speaker 2 (25:20):
I fullheartedly feel.
Speaker 3 (25:22):
It will be because of you know, this type of
transformational technology, be an AI, be a data Ultimately you're
going to overbuild, right, It's just inevitable with all of
the hype and all the money behind it and all
the you know trillions that Open AI talks about just
haphazardly at this point, which could be right long term,
(25:44):
but we will overbuild, especially just from an efficiency standpoint,
you know, like anything what we need now doesn't necessarily
mean we're going to use that same thing later, right
Moore's law of data and storage. Things will get easier, cheaper, faster,
so on and so forth. So it will be a bubble.
But you could jump out of the market right now
(26:06):
and miss a double from here, right, like any markets
can go down forty percent, and the next question should
always be but from where?
Speaker 2 (26:14):
Right?
Speaker 3 (26:14):
And that's that's the hard part is an investor, and
you know, getting caught up with this type of a statement.
But it's it it it definitely cuts the market off,
you know, people very much to your point sort of said,
you know, and I think that's why he didn't say
as a you know, like Janet Yellen members, she talked
about biotechs specifically, so he didn't go about doing that.
(26:37):
But you would think that FED members would just do
their best to just stay out of it. But maybe
it was a shot at Trump just intentionally at this point,
just right, you know, that's something that Trump specifically would
talk about. Is you know that it's not so him
saying the opposite is maybe a maybe a shot of
some kind that I didn't hear a lot of people
talk about.
Speaker 2 (26:57):
But you never know, So.
Speaker 1 (26:59):
I just brought this up. You're you're, you're right, nineteen
ninety six. There had to have been another time because
it wasn't you know, the Japanese market plunged again in
two thousand and it started the whole thing. But he said,
I know he said that, Yeah, he said it ninety six.
I know he said it. Maybe he was repeating in
(27:22):
our I mean, we didn't go four years that that
market is continuing to run after he said that. Sometimes
I don't know.
Speaker 2 (27:30):
It's interesting, Yeah, I know.
Speaker 3 (27:32):
Uh, and he wrote about it in his book too,
But yeah, he gets credited with it, right, but oftentimes
he's just you know, early, right. But as we talked
about before, a difference between early and wrong, So that
one was.
Speaker 1 (27:47):
The catalyst of the dot com bubble burst because I
always based it on that.
Speaker 2 (27:52):
I mean, it wasn't his comment. He didn't Yeah, he
didn't make it go. So the top was sort of
April May.
Speaker 3 (27:59):
I'm looking at chart June of two thousand, right, but
I mean from his comments back if I'm looking at
a chart from December of ninety eight.
Speaker 2 (28:11):
Sort of time frame, I'm just kind of quickly looking here.
Speaker 1 (28:14):
Ye, S and P.
Speaker 3 (28:18):
Was in the thousand range, legit, you know, and then
we got all the way up to fourteen hundred, so
another forty some odd percent from where he made those comments,
you know. But again we went all the way down
to you know, the eight hundred level when the S
(28:39):
and P finally bottomed years later.
Speaker 1 (28:42):
Look up at the break what caused the dot com
Because I have always in my heart of hearts and
I've always said it was when he made those comments
in two thousand, So yeah, yeah, something's there. But the
bottom line regardless of this, you know, chatmus friends. But
the bottom line is, what does that mean when we
hear irrational exuberance? We think of, you know, the fundamentals.
People aren't paying attention to the fundamentals, the market is
(29:02):
heating up, et cetera. And the takeaway again of what
Jerome Pale said the other day is being taken in
context that that's essentially what he was saying. If you
read between the lines, that it's you know, fairly highly
you know, yeah, I mean it's it's.
Speaker 3 (29:16):
So another add on too. I'm just looking in in
uh Wikipedia. Robert Schiller, right, who's the cape index? He
wrote a book titled Irrational Exuberance and it was published
in two thousand, so he clearly was using it, reiterating
Greenspan's comments, pressing it. And that's when I mean cape
(29:40):
ratio is what you follow if you're evaluation person. And
that was the one of the high points that the
cape ratio has ever been at. So that's probably part of.
Speaker 1 (29:50):
A lot of reading the book and going oh wait
a minute.
Speaker 3 (29:54):
Here, thank you, and remember the cape ratio is now
at similar levels, actually higher than where it was.
Speaker 1 (30:00):
I didn't have to add that point in Well, thank
you for making me realize I didn't lose my mind
at this. I was like, I know, I know, all right,
good jobuddy, thank you appreciate that. All Right, let's wrap
it up a Christmas no right now, Traffic Center christ
Welcome back to the John Sanchez Show on News Talk
seven eighty ko H, all right. We've talked about again
the concerns of Rman Powell's comments yesterday or shoot me
(30:22):
on Monday. So we got that. Now, what's the other
thing the market's worried about? At this point? We start
looking at this AI spin Jason, right, and it is
kind of a rational exuberance, and this is what worries me. Okay, again,
I'm not saying that this is going to create a
market downturn. I think it's going to create a little
bit of choppiness, as you, well, you and I both
think this. So we talked about the circular accounting as
(30:47):
just one of the ideas and if we dig deeper,
which I think a lot of I'm seeing a lot
of analysts. I sent you some comments today by another
analyst who thinks it's no problem, meaning circular accounting. Again,
what Navidia is doing just in a brief example is
they quote invested one hundred billion dollars into open ai,
the parent of chat GPT. But but then open ai
(31:09):
has to take that hundred billion, yeah, and buy Navidia
chips with it. So the other thing I mentioned on
the show yesterday, which you know you and I were
together yesterday, that I thought was interesting is financing these
data centers. It is very expensive even for some of
these very very large companies Jason. They're quoting six nine
(31:31):
twelve percent interest they are paying to to to build
these centers, right, and not to mention now they're getting
into leasing the GPUs, meaning the chips. So there's a
lot of Again I'm almost like saying, my heart is
telling me or is this phantom money? That's that's that's
(31:52):
that's propelling this growth in AI. We know the growth
is there, but it's the profitability issue. Even open Ai said,
look at it's gonna be you know, another five, six,
seven years until we were profitable.
Speaker 2 (32:04):
Right, that's what we have to watch completely agree. And
you know we've talked about private credit.
Speaker 1 (32:09):
Right.
Speaker 2 (32:09):
Private credit is a big buyer of data centers.
Speaker 1 (32:12):
Right.
Speaker 3 (32:13):
They're funding these things at very good interest rates, right,
and not good in as far as the buyer, but
very favorable to investors. Right where you're getting six seven
eight potential percent interest rates because of the view that
long term this is going to be such a swell deal,
people are willing to pay those But if the water
(32:33):
goes out and you're a private credit holder of an
asset that now doesn't produce the a can't pay the interest,
and or doesn't produce the cash flow that you expected
it was going to, you're now trapped in these assets.
And that's why I've talked about a concern about private
credit in general.
Speaker 2 (32:48):
But I agree with you. These are promises.
Speaker 3 (32:53):
They aren't necessarily deliveries, right, Like they're not writing a
check for five hundred billion dollars today, they're promising to give.
Speaker 1 (32:59):
It Friday in a check. Right, someone's right in a check.
That's just not inn video and this is terrible. Yes,
but someone is paying for those construction and you know,
even Microsoft needs and comments today we're having problems cooling
these centers, right, they're looking.
Speaker 2 (33:13):
At an archology.
Speaker 1 (33:14):
It's just a lot.
Speaker 2 (33:15):
Just keep the windows open.
Speaker 1 (33:16):
I put a fan up in the window. These are
you know, again, these are very capital intensive and I
think the other thing that that, as I've studied the
circular accounting, the other thing that has me, you know,
scratching my head a little bit is we still don't know,
and you've brought this up many times, we still don't
know where is the likes of a of a of
a of a open AI or anybody else where are
(33:37):
they going to make the money. We still don't have
any company coming out and going. When we hit quite
you know, a trillion users, we're gonna charge them five bucks. Okay,
I can wrap my head around that. Where's the money
going to be made? No one's saying anything.
Speaker 3 (33:49):
It's all spec I mean again, we're you know, we're
looking speculative, right, we're looking at AI spends internally, right,
we've never seen and.
Speaker 1 (33:57):
For a product that we don't know how anyone's going
to pay for.
Speaker 2 (34:00):
Agreed, Agreed, it is, It is very agreed. It's tough.
Speaker 3 (34:04):
As we talked about quickly too, is the cost of
a chip? And then what's the effective life of the chip?
All right, well it decays in three to five years.
Think of an iPhone as long, right, but it's not
a thousand bus for one of these GPUs it's one
hundred thousand dollars, right, and so how much money are
you making to offset the fact that in five years
you need to go redo the.
Speaker 2 (34:22):
Whole you get to go right?
Speaker 1 (34:23):
Interesting though, I know, I know, it's it's fascinating. We're
going to obviously continue to talk about We're gonna continue
to watch it. But once again, our point of bringing
all this up once again, and we're not saying there's
any you know, major downturn coming or something. These are
the things you as an investor need to be thinking about.
And it's our job again to bring you these ideas.
We already doing it for our clients. We're going to
bring it to you, So take it for what it's worth.
Great job, my friend. That was a lot of fun.
(34:44):
We'll do it again tomorrow on The John Sanchez Show.
God blow us, have a great afternoon. John Sanchez is
a registered investment advisor, and the opinions expressed by Sanchez
Gone Capital Management, LLC on the show or their own
and do not reflect the opinions of News Talks seven
eighty or its pairing company, Q Media. All statements and
opinions expressed are based upon information considered reliable, Although it
(35:05):
should not be relied upon. As such, any statements or
opinions are subject to change without notice. Information presented is
for educational purposes only and does not intend to make
an offer or solicitation for the sale or purchase of
any specific securities, investments, or investment strategies. Investments involve risk, and,
unless otherwise stated orre not guaranteed. Information expressed does not
(35:28):
take into account your specific situation or objectives, and is
not intended as recommendations appropriate for any individual. Listeners are
encouraged to seek advice from a qualified tax, legal, or
investment advisor to determine whether any information presented may be
suitable for their specific situation. Past performance is not indicative
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