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Microsoft Rewards AI Discipline as Meta Gets Punished · The Financial Exchange Show

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Speaker 1: making a donation today. This is the Financial Exchange with
1:05
Speaker 1: Chuck Zada and Mike Armstrong.
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Speaker 2: It's Chuck, it's Mike, it's Tucker, and that's no, it's
1:13
Speaker 2: actually Ben. I'm sorry. Your eyes look the same over
1:17
Speaker 2: the computer. You can't see Tucker's eyes over the computer.
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Speaker 2: That's the that's the bit. Ah, got it, Thanks Roethlisberger.
1:26
Speaker 2: I want to talk a little bit about what's going
1:28
Speaker 2: on in markets today, because it's better than yesterday, in
1:31
Speaker 2: some markets it's worse than yesterday, and others. We'll leave
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Speaker 2: it at that. Uh No, what's actually happening. So the
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Speaker 2: Dow is up a quarter percent, one hundred and twenty
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Speaker 2: five points, not much movement there s and P's up
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Speaker 2: one percent about seventy points. Was previously up ninety ish,
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Speaker 2: so a little bit of a pullback from the highs,
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Speaker 2: but still good, good start to the day. And the
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Speaker 2: nasdak can posits up to and a quarter percent, about
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Speaker 2: five hundred and fifty five points. This on the back
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Speaker 2: of what's driving the NASDAK. Two bigger reports yesterday, the
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Speaker 2: bad one Meta They reported that their revenue for the
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Speaker 2: next quarter is going to be a little bit lower
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Speaker 2: than anticipated and their expenses a little bit higher. That's
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Speaker 2: a bad combination. It typically makes you less profitable, and so,
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Speaker 2: as one would expect, MetaStock down about eight percent on
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Speaker 2: that news. On the other side of things, Microsoft came
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Speaker 2: out with a really nice quarter and so their stock
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Speaker 2: is up fourteen percent, and somehow Microsoft driving the entire
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Speaker 2: chip making sector higher, even though it's gotten blown up
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Speaker 2: over the last I don't know, four or five weeks
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Speaker 2: to the tune of, you know, thirty percent draw down
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Speaker 2: in semiconductors. Some of this is also just hey, after
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Speaker 2: a big draw down, you know, maybe you see a
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Speaker 2: little bit of a bounce. And a big AI related
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Speaker 2: hedge fund got carted off yesterday. The fund, completely truthfully
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Speaker 2: and entirely ironically named Situational Awareness. They reportedly this morning,
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Speaker 2: according to CNBC, had to liquidate all of their positions
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Speaker 2: after their prime broker was on it able to secure
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Speaker 2: a sufficient collateral to meet margin calls. And so this
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Speaker 2: hedge fund, run by a twenty five year old open
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Speaker 2: AI and FTX veteran, is now basically, you know, we
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Speaker 2: don't know exactly how big the losses were, if it
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Speaker 2: was all of the twenty billion they were managing or
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Speaker 2: just a good chunk of it, but it wasn't nothing
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Speaker 2: and so after you have you know, you know, kind
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Speaker 2: of the site of that happening. You know, you get
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Speaker 2: people picking through the wreckage and they try to be
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Speaker 2: opportunistic because hey, maybe some of the selling the last
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Speaker 2: couple of days was them liquidating, and now that that
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Speaker 2: selling pressure is gone, okay, you can get a little
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Speaker 2: bit of a short term bounce. Other breaking news this morning, Wow,
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Speaker 2: this is a this is gonna be a wild one. UEFA,
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Speaker 2: the European Soccer Federation, just announced that they are going
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Speaker 2: to boycott the twenty thirty World Cup if FIFA attempts
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Speaker 2: to try to sell the World Cup to private investors.
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Speaker 2: What this would mean is that the twenty thirty World Cup,
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Speaker 2: if this were to follow through, if FIFA f the
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Speaker 2: UEPHA does, would not have any of the fifty five
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Speaker 2: members of UEFA in it, including the reigning World Cup
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Speaker 2: champion Spain. So we'll see what ends up happening.
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Speaker 3: Here is England in there too, So yeah, so let's
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Speaker 3: see who're the final four England, Michael, Spain and Argentina
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Speaker 3: three quarters.
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Speaker 2: It's not just like three of like the final four.
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Speaker 2: Like when when you talk about like the teams here
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Speaker 2: you're talking Belgium, you're talking Croatia, you're talking Denmark, England, France, Germany,
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Speaker 2: like Italy. To be fair, to be fair, the Italians
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Speaker 2: haven't made a World Cup in three cycles now a
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Speaker 2: little painful to me, but hey, it's what us Italians do.
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Speaker 2: We have, you know, periods of you know, brief excellence
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Speaker 2: sustained by you know, they've been focusing on the baseball,
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Speaker 2: world whatever. We're very good at the baseball these days. Yes,
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Speaker 2: we're very good at the baseball. But like, these would
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Speaker 2: be the teams that aren't in the twenty thirty World
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Speaker 2: Cup if this were to come to fruition. So a
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Speaker 2: little bit of drama related to FIFA maybe trying to
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Speaker 2: wring a few too many bucks out of this thing.
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Speaker 2: But we'll see what happens there. Other things moving in market. Sorry,
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Speaker 2: I had to get to that headline because I saw
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Speaker 2: it go across and was like, wow, this is exciting.
5:21
Speaker 2: Yesterday the tenure Treasury sold off today, still selling off
5:26
Speaker 2: at four point sixty seven five percent, So you've got
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Speaker 2: a decent move that has happened there. And looking at
5:37
Speaker 2: the dollar dollar index not moving in the direction that
5:40
Speaker 2: you want. But there's a couple things happening today. So
5:42
Speaker 2: yesterday we did see yields up, dollar down, which is
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Speaker 2: not great. Now what you want to see today you've
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Speaker 2: got yields up, dollar down. But part of this is
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Speaker 2: because the Japanese Ministry of Finance staved, a staged a
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Speaker 2: massive intervention in the end today to keep it from
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Speaker 2: weakening further, and so that is depressing the dollar. I
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Speaker 2: wouldn't read too much into the dollar move today because
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Speaker 2: it is a noted intervention from a central bank that's
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Speaker 2: happening there.
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Speaker 3: So likewise, then don't read too much into gold moving
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Speaker 3: up because the dollar's falling.
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Speaker 2: Gold you can read into gold, you can read into
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Speaker 2: and that is notable that you now have back to
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Speaker 2: back days where gold's moving in that fashion, because again
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Speaker 2: you don't have central bank interventions in gold in the
6:28
Speaker 2: same way, and that's not what's happening today there. Crude
6:32
Speaker 2: oil basically flat down twelve cents a barrel, eighty four
6:35
Speaker 2: to thirty four on West Texas Intermediate. It's no major
6:38
Speaker 2: movement on that front. I think big takeaways from yesterday
6:42
Speaker 2: Kevin Warsh's second FED meeting, his first one. We said, look,
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Speaker 2: you're saying all the right things like this. You know,
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Speaker 2: his first one went pretty well. Second one you're grading it.
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Speaker 2: I think if you averaged, like the grades from most
6:56
Speaker 2: economists and people who study monetary policy, somewhere in the
7:00
Speaker 2: d range is probably what I think they would give him.
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Speaker 2: I share that view that I think yesterday was basically
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Speaker 2: about as bad as you can get from a FED
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Speaker 2: chair at a press conference. It's one meeting. He has
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Speaker 2: a chance to rebound and kind of reset, but this
7:15
Speaker 2: market is going to test him where Hey, if you
7:18
Speaker 2: say you're serious about inflation but you're not hiking, well
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Speaker 2: then you're not serious about inflation, and the bond market's
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Speaker 2: going to sell off to make you prove it.
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Speaker 3: Yeah, I can't call it an unmitigated disaster. He sounded
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Speaker 3: confident it was a mitigated disaster. Yeah, he confidently was
7:34
Speaker 3: He confidently said words that made no sense.
7:38
Speaker 2: He said a lot of things that made no sense,
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Speaker 2: and he did it with a dismissive, smarmy demeanor that
7:42
Speaker 2: made it sound like he was the smartest person in
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Speaker 2: the room and everyone else should just shut up and
7:45
Speaker 2: listen to him. Yeah, that's kind of how I take away, Like,
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Speaker 2: it's kind of how it came off. So We'll see
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Speaker 2: how he bounces back again. It's one meeting. I'm not
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Speaker 2: ready to say like, Okay, he's gonna be you know,
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Speaker 2: awful forever. There's plenty of FED chairs who have you know,
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Speaker 2: bad stuff to their tenure and you know, bounce back. Look,
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Speaker 2: worsh after his first meeting, we were saying, okay, like
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Speaker 2: this is this all the right stuff that you want
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Speaker 2: to say, Like this is all the right stuff that
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Speaker 2: you want to do. If you average the two meetings
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Speaker 2: you have, like you're right in the middle of the road,
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Speaker 2: like he's been fine. Unfortunately that's not how this but
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Speaker 2: the trend is down. Yesterday was not good, whereas his
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Speaker 2: first meeting I thought he was very good.
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Speaker 4: Bond yield's moving up.
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Speaker 3: The thirty year treasury now up over five percent, highest
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Speaker 3: level that you have seen, by the way, since two
8:29
Speaker 3: thousand and seven on that thirty year treasury that is
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Speaker 3: one of the UH one of the series. The cur
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Speaker 3: along the curve that moved up and yield yesterday as
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Speaker 3: investors sold it off, short term interest rates came down,
8:43
Speaker 3: long term interest rates went up.
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Speaker 4: What are markets telling you there effectively.
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Speaker 3: That they don't believe worsh is going to follow through
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Speaker 3: on fighting inflation. That that was the message from markets yesterday.
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Speaker 2: Let's take a quick break. When we return, we'll talk
8:57
Speaker 2: about a couple of geopolitical issues, including the Middle East
9:00
Speaker 2: and China.
9:01
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9:45
Speaker 2: All right, so let's move away from the Fed and
9:48
Speaker 2: tech earnings and do a little bit of good old
9:52
Speaker 2: fashioned geopolitics. You know, that's what we're really looking for here.
9:56
Speaker 2: So here's the thing. Every day you get a piece
10:00
Speaker 2: buy I don't know, someone talking about hey, like straight
10:08
Speaker 2: at fore Moose traffic fell today, or straight at fore
10:10
Speaker 2: moos traffic went up today, And honestly, the pieces are
10:13
Speaker 2: useless because it doesn't matter what it did on any
10:16
Speaker 2: one particular day, because the next day isn't correlating to
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Speaker 2: what happened the day before. You have days where oh,
10:21
Speaker 2: traffic fell to zero, and then the next day it
10:23
Speaker 2: goes up to like ten ships, and then it goes
10:25
Speaker 2: back down to two. And ultimately here's the deal, Like,
10:28
Speaker 2: there's still is not free flowing traffic through hor Moves,
10:31
Speaker 2: and there's not going to be anytime soon. That's what
10:36
Speaker 2: it is.
10:37
Speaker 1: Like.
10:37
Speaker 2: Until you can actually get a conclusive stop to all
10:44
Speaker 2: of the drones, missiles, drones, missiles, airstrikes everything in the region,
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Speaker 2: you are not going to have a consistent flow of traffic.
10:53
Speaker 4: There.
10:54
Speaker 2: The more troubling patterns that things are expanding and that
10:57
Speaker 2: you know, drones targeted ships that were at port in
11:00
Speaker 2: Egypt recently, You've got all kinds of problems happening in
11:06
Speaker 2: the Black Sea as well related to the Ukraine conflict.
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Speaker 2: So this is not just one conflict that's causing problems
11:11
Speaker 2: with shipping of energy at this point, it's multiple conflicts
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Speaker 2: in multiple parts of the world, and it's tough to
11:18
Speaker 2: see either of those resolving in the near future. So like, yeah,
11:23
Speaker 2: like you might get optimistic one day, you might get
11:25
Speaker 2: pessimistic the next. The big thing is, hey, like you're
11:28
Speaker 2: not getting back to normal operations anytime soon.
11:31
Speaker 3: Right, and remember that the further it expands, it's not
11:34
Speaker 3: merely a price issue. It's also a supply constraint issue, right,
11:40
Speaker 3: you know, one feeds the other. We don't know when
11:42
Speaker 3: we're talking about shortages. Hopefully it's a long way out.
11:45
Speaker 3: But if you see this conflict expand, yeah, the danger
11:51
Speaker 3: of China running out of reserves, the US running too
11:54
Speaker 3: low on reserves. And well, you won't see shortages in
11:57
Speaker 3: the US, no, yeah, that's not what I'm saying. But
11:59
Speaker 3: globally you may see shortages should it continue.
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Speaker 2: If this continues, you will in the next two months.
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Speaker 2: It is unavoidable. I mean, look, you already if you
12:09
Speaker 2: talk about poorer parts of the world, sure you already
12:12
Speaker 2: do have that. Take a look at you know, parts
12:16
Speaker 2: of Africa and Southeast Asia, and they do not have
12:19
Speaker 2: the fuel supplies that they needed for this summer, like
12:22
Speaker 2: the They simply don't. It hasn't affected US because you know,
12:27
Speaker 2: we're not you know, big trade partners with those areas,
12:30
Speaker 2: and they don't provide vital inputs to the US economy.
12:33
Speaker 2: But you know, you talk to you know people in
12:36
Speaker 2: you know, the poorest third of countries in the world,
12:39
Speaker 2: and they will tell you, yeah, we have not been
12:41
Speaker 2: able to get the fuel that we need because of
12:45
Speaker 2: you know, these conflicts that have been going on turning
12:48
Speaker 2: out of China. So earlier this week there was a
12:52
Speaker 2: proposal from the f c C. I don't know why
12:57
Speaker 2: the FCC is the agent that's involved here, but they
13:01
Speaker 2: issued it. I'm sure that there's a reason that I'm
13:03
Speaker 2: just missing on it. But the FCC said that it
13:06
Speaker 2: intends to restrict the imports of humanoid and animal like
13:10
Speaker 2: robots from China on national security grounds, which I think
13:14
Speaker 2: is good.
13:15
Speaker 5: Great.
13:16
Speaker 2: I like, yes, I think there are all kinds of
13:19
Speaker 2: concerns that I have about Chinese made robots being used
13:23
Speaker 2: in the United States. So I don't really care. Every
13:25
Speaker 2: sci fi about robots I've ever seen tells me this. Yes,
13:28
Speaker 2: So I don't really care which agency is responsible for
13:30
Speaker 2: this other than that it holds up and there aren't
13:33
Speaker 2: you know, broad exceptions that end up being carved out. Sure,
13:36
Speaker 2: so China is saying, well, look like this is going
13:40
Speaker 2: to undermine the stability of the US China, you know,
13:42
Speaker 2: trade relationship, and disrupt the stability of global industrial and
13:45
Speaker 2: supply chains. Well, okay, but it's still the right thing,
13:51
Speaker 2: And I don't think it's really going to disrupt supply
13:54
Speaker 2: chains unless you start, you know, restricting exports of rare
13:56
Speaker 2: earth to get the US to try to turn around
13:59
Speaker 2: on this.
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Speaker 3: So yeah, I mean, raise your hand if if you
14:04
Speaker 3: think this is the wrong move for the United States
14:06
Speaker 3: to go down.
14:06
Speaker 4: But yeah, certainly.
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Speaker 3: Not one of those areas that I hope anyone's willing
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Speaker 3: to negotiate on is Chinese manufactured humanoid robots on our streets.
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Speaker 4: Like I'm not comfortable with cars, definitely not comfortable with
14:20
Speaker 4: humanoid robots.
14:22
Speaker 3: No, No, I'm barely comfortable with humanoid robots as a
14:26
Speaker 3: general proposition, let alone ones that are manufactured in our
14:34
Speaker 3: biggest economic competitor.
14:36
Speaker 2: I've come up with what I think is a solution for.
14:40
Speaker 4: How I could be comfortable with them humanoid robots.
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Speaker 2: Yeah, just you ever play video games? Yeah, you know
14:48
Speaker 2: how when you're playing like the Big Boss at the
14:51
Speaker 2: end of a level, they've got a weak spot that
14:54
Speaker 2: you got to target. It's like their necker, like under
14:56
Speaker 2: the arm pit, or like I think every every humanoid
15:01
Speaker 2: robots should be manufactured with a weak spot that is
15:05
Speaker 2: susceptible to like a human punch that will like turn
15:09
Speaker 2: them off.
15:11
Speaker 4: Yeah, we're gonna need to go a little further than
15:12
Speaker 4: that for me.
15:13
Speaker 3: What do you mean, like I need a five year
15:17
Speaker 3: old to be able to turn this thing off a
15:19
Speaker 3: five year old's punch?
15:20
Speaker 4: Yeah yeah, you know, like so like.
15:22
Speaker 2: Put it like the knee cap, you know, like if
15:24
Speaker 2: you if you punch it in the knee, it it
15:26
Speaker 2: falls over and can't get up. Like something like that
15:30
Speaker 2: would make me more.
15:31
Speaker 4: Comfortable with them. Yeah.
15:32
Speaker 3: From what what's the lab in Boston that General Dynamics,
15:37
Speaker 3: Boston Dynamics, Boston Dynamics. From from the robots that I
15:40
Speaker 3: keep seeing from there, they look pretty durable well, and they.
15:44
Speaker 2: Look like they'd be able to move fast enough that
15:46
Speaker 2: you can't punch them in the knee.
15:47
Speaker 4: Yeah yeah, but.
15:49
Speaker 2: Like that would be by like robots whole selling point
15:52
Speaker 2: and be like you know how you have like the tagline,
15:55
Speaker 2: it'd be like Chuck Dynamics, the one with the knee punch,
16:00
Speaker 2: you know something like that.
16:01
Speaker 4: Uh huh.
16:01
Speaker 2: Sure, I understand why they won't commit to that, because
16:05
Speaker 2: you know.
16:06
Speaker 5: Can we just install them all with the clapper? No
16:10
Speaker 5: save a business, no business.
16:12
Speaker 2: No, because that's too easy to reverse, Like it's clap on,
16:14
Speaker 2: clap off, Like you don't want to accidentally clap it
16:18
Speaker 2: back on when you're trying to turn it off. Yeah,
16:25
Speaker 2: here's the thing robotics I am eagerly anticipating in the
16:29
Speaker 2: next few years. You know how chad GPT was the
16:32
Speaker 2: wake up call for generative AI and how everyone took
16:36
Speaker 2: note after that, There's going to be something robotics focus
16:39
Speaker 2: that has like pardon the expression, like the killer app
16:43
Speaker 2: for robotics where it's all of a sudden, everyone goes, oh,
16:48
Speaker 2: this isn't just science fiction, and this is ready to
16:51
Speaker 2: take the next leap, and we're getting there behind the scenes,
16:55
Speaker 2: like I see what's going on in terms of the
16:57
Speaker 2: cost of like actuators and motors and things like that.
17:01
Speaker 2: I see what's happening with sensor technology, not just for
17:04
Speaker 2: like eyes and ears, but for you know, robots sense
17:06
Speaker 2: of touch, which matters for more practical you know, uses
17:10
Speaker 2: and things like that. And we're close. I just wonder
17:16
Speaker 2: if the one thing that we may struggle to get
17:18
Speaker 2: over is just the weird factor and if that's too
17:23
Speaker 2: much but for business purposes, like companies won't have the
17:27
Speaker 2: weird factor they'll look at and be like, here's how
17:29
Speaker 2: it can help my bottom line. And I think, by
17:32
Speaker 2: the way, robots don't have to be perfect. The way
17:35
Speaker 2: that I look at this is, let's say that you
17:37
Speaker 2: have to intervene on a robot twenty percent of the
17:40
Speaker 2: time if one person, even if there's overlap there, if
17:45
Speaker 2: one person can manage a fleet of three or four robots, sure,
17:49
Speaker 2: how much more productivity can you get from that?
17:51
Speaker 3: Yeah, Amazon feels like they might be the first to
17:55
Speaker 3: break through on I mean, they already use quite a
17:58
Speaker 3: bit of robotics in there, Yeah, in their business as
18:01
Speaker 3: it is, and I would seem to be a decent
18:04
Speaker 3: bed in terms of where that goes first.
18:06
Speaker 2: But I'm more comfortable with robots than drones.
18:09
Speaker 4: That's I don't agree.
18:12
Speaker 2: I don't like seeding the high ground to machines is
18:18
Speaker 2: kind of what it is. Maybe that could be the
18:22
Speaker 2: robotic thing, like there's a height limit that would make
18:26
Speaker 2: them far less intimidating. It would be you know, people
18:29
Speaker 2: have asked, although then we're gonna end up with a
18:30
Speaker 2: bunch of like spider looking robots and that's not gonna
18:33
Speaker 2: be comfortable either. People ask the question like why are
18:35
Speaker 2: we building like humanoid robots, why not more specific ones?
18:38
Speaker 2: And it's true like in certain instances like task specific
18:42
Speaker 2: ones are more useful, which is why like Amazon in
18:45
Speaker 2: their warehouses has a whole bunch of non humanoid robots.
18:50
Speaker 2: The reason why humanoid robots are getting so much interest
18:53
Speaker 2: is because the world is functionally built around the human
18:56
Speaker 2: like the humanoid figure, and so it's a more flexible
19:00
Speaker 2: approach where you don't have to specialize, and so you
19:03
Speaker 2: can get the cost down by mass producing to be
19:05
Speaker 2: able to do many different things. That's why it's not
19:09
Speaker 2: that that figure is inherently like the best way to
19:12
Speaker 2: do it. It's just that the world has already built
19:14
Speaker 2: for people around six feet tall to be able to
19:16
Speaker 2: do things.
19:16
Speaker 4: Can't reach the counter, you can't do a whole lot
19:18
Speaker 4: of stuff.
19:18
Speaker 2: Except like flying an airplane, so you don't if you
19:20
Speaker 2: want the safe spot from robots, it's probably on like
19:24
Speaker 2: a Ryan Air flight where they won't be able to fit.
19:28
Speaker 2: Let's take a quick break. Wall Street Watches next.
19:38
Speaker 1: Bringing the latest financial news straight to your radio. Every day.
19:43
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:48
Speaker 1: Tell you out full Wall Street Watch treking, the stocks,
19:52
Speaker 1: the data, and the headlines driving markets so far today
19:55
Speaker 1: right here on the Financial Exchange Radio Network.
19:59
Speaker 5: Busy day on Wall Street as investors react to the
20:01
Speaker 5: FED leaving interest rates unchanged and remarks from FRED chairman
20:05
Speaker 5: Kevin Warsh that left some uncertainty about the path of
20:07
Speaker 5: rates moving forward. We also saw a tale of two
20:10
Speaker 5: earnings reports from two tech giants. Microsoft stock is rallying
20:14
Speaker 5: fourteen percent after it beats second quarter earnings and revenue expectations,
20:18
Speaker 5: driven by robust cloud growth. The company's Azure service topped
20:22
Speaker 5: one hundred billion dollars in revenue for the first time. Meanwhile,
20:26
Speaker 5: MetaStock is sinking nine percent after reported earnings that missed
20:29
Speaker 5: estimates and posted revenue guidance that disappointed. Investors are also
20:33
Speaker 5: showing worries over the companies spending on AI. We'll see
20:37
Speaker 5: more big tech earnings after today's close, where Apple and
20:40
Speaker 5: Amazon will report. Elsewhere, Young Brands reported mixed second quarter
20:44
Speaker 5: results and said the cyclospora outbreak link to Taco Bell
20:47
Speaker 5: impacted its sales in July. However, the stock is up
20:50
Speaker 5: four percent. Teledoc shares are tumbling twenty seven percent after
20:54
Speaker 5: the healthcare services company posted revenue that came up short
20:57
Speaker 5: and also lowered its full year revenue guidance in five. Finally,
21:00
Speaker 5: Starbucks is climbing one point five percent after the coffee
21:03
Speaker 5: chain raised its full year outlook and reported growth in
21:06
Speaker 5: same store sales of seven point nine percent. I'm Ben
21:10
Speaker 5: Kitchen and that was Wall Street Watch, Mike.
21:13
Speaker 2: We got a couple pieces here from one from CNBC,
21:17
Speaker 2: one from Barons, both talking about the kind of long
21:21
Speaker 2: sighted idea of the four percent rule in retirement.
21:26
Speaker 4: So let's start off with what it is.
21:28
Speaker 2: Yeah, what do they outline about what it is and
21:30
Speaker 2: whether it's still accurate? Yeah.
21:32
Speaker 3: So the four percent rule created, I believe in the
21:35
Speaker 3: seventies or eighties by a financial manager described somebody who
21:42
Speaker 3: retired at sixty five with a portfolio that was fifty
21:46
Speaker 3: percent allocated stocks, fifty percent allocated to bonds. And he
21:50
Speaker 3: looked through every market up until that point in time
21:52
Speaker 3: and found that if the owners of those accounts take
21:56
Speaker 3: four percent, no more than four percent of their investments
22:00
Speaker 3: every year to live off of, then there was not
22:02
Speaker 3: a single market scenario for their expected longevity where you
22:06
Speaker 3: would have run out of money, even through markets like
22:10
Speaker 3: the Great depression, So it's.
22:11
Speaker 4: Kind of looked at like a hey, holy grail rule.
22:13
Speaker 3: Hey, if you if you've got enough money where you
22:15
Speaker 3: can live off of four percent, then you're in a
22:18
Speaker 3: pretty good spot. What is being written about now are
22:24
Speaker 3: some you know, holes being punched in that, as well
22:26
Speaker 3: as some people trying to stretch the four percent rule,
22:29
Speaker 3: like well, what if I adjust it for inflation?
22:31
Speaker 4: What if I can do five percent?
22:33
Speaker 3: And then you know, the mere fact that you know,
22:37
Speaker 3: an average sixty five year old couple today, at least
22:40
Speaker 3: one of them making it to ninety or ninety five
22:43
Speaker 3: years old is a heck of a lot higher the
22:45
Speaker 3: probability than it was back in nineteen eighty. And so
22:49
Speaker 3: there's two sides to all this. But I think while
22:53
Speaker 3: the four percent rule can be a good starting point,
22:56
Speaker 3: it's definitely not an end all, be all. And furthermore,
23:01
Speaker 3: it can, depending on the situation, sometimes lead people down
23:03
Speaker 3: the wrong path of either working longer than they have
23:06
Speaker 3: to or spending less than they otherwise could, depending on
23:09
Speaker 3: the circumstances. Right, and this is where some more detailed
23:13
Speaker 3: planning comes in. You know, let's say that you can't
23:17
Speaker 3: pull off four percent that you need to be spending
23:19
Speaker 3: five or six percent. So long as you've done the
23:22
Speaker 3: work to understand how much you're spending might drop in
23:24
Speaker 3: the future, then that might be acceptable, right Like, Hey, yeah,
23:28
Speaker 3: we're spending a lot of money now because we're traveling
23:30
Speaker 3: a lot and we own two homes, but we're going
23:32
Speaker 3: to sell one fifteen years from now. Or hey, you know,
23:36
Speaker 3: I run a real risk of running out of money
23:39
Speaker 3: if I have a long term care scenario. Well, okay,
23:43
Speaker 3: but are you still going to own your home if
23:45
Speaker 3: that happens? And so this is where a lot of
23:47
Speaker 3: the give and take comes from in terms of what
23:50
Speaker 3: is actually affordable in retirement. The four percent real quite honestly,
23:53
Speaker 3: a really good starting point to judge yourself in terms
23:56
Speaker 3: of how am I doing and accumulating assets for retirement.
24:00
Speaker 3: And if you're under that four percent, it's a really
24:02
Speaker 3: good indicator that you're off to a fantastic start and
24:05
Speaker 3: you can perfinitely pull things off. If you're not there,
24:09
Speaker 3: it does not necessarily mean that you're screwed. No, it
24:12
Speaker 3: does mean that you need to do more work. If
24:14
Speaker 3: you have questions and you're trying to evaluate your own
24:17
Speaker 3: scenario as you head into those retirement crucial savings yours.
24:20
Speaker 4: Give the folks at.
24:21
Speaker 3: Armstrong a call, let us guide you through our process
24:24
Speaker 3: eight hundred three nine three for zero zero one. Will
24:27
Speaker 3: work one on one with you to assess your process,
24:30
Speaker 3: make sure it's working in the way that you think
24:32
Speaker 3: it is. Go through all sorts of things like tax planning,
24:35
Speaker 3: medicare planning, how all of these different systems are going
24:38
Speaker 3: to affect that plan. But you have to start off
24:40
Speaker 3: with the call eight hundred three nine three for zero
24:43
Speaker 3: zero one.
24:44
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
24:46
Speaker 1: registered investment advisor. Nothing in the ad or in any
24:49
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
24:52
Speaker 1: your own financial tax into state planning advisors before making
24:55
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
24:58
Speaker 1: advisory services.
25:00
Speaker 2: I'e screwed Korean investors stress out after AI bubble bursts.
25:04
Speaker 2: That is the headline from the Financial Times. And you know,
25:09
Speaker 2: unlike large institutional investors where look, you bought the ticket,
25:12
Speaker 2: you got to take the ride, like that's the deals.
25:14
Speaker 2: Sometimes you know, that's just how it works out. I
25:17
Speaker 2: have a whole lot more sympathy for people who are
25:21
Speaker 2: you know traders who have things go against them, because
25:23
Speaker 2: I've been in that place with my own money, you
25:27
Speaker 2: know plenty of times as well, where hey, you learn
25:30
Speaker 2: some really hard lessons about gee, like this is why
25:33
Speaker 2: you don't invest in a market you don't understand, or oh,
25:36
Speaker 2: here's why this security was priced the way that it was.
25:40
Speaker 6: And you know, with.
25:41
Speaker 2: South Korea, the estimates that we've seen are that somewhere
25:44
Speaker 2: around three to four percent of the population got margin
25:46
Speaker 2: called in the last several weeks. And I feel for
25:51
Speaker 2: these people because they're hard lessons to learn, and that, hey,
25:55
Speaker 2: the stocks that were going up, you know, five or
25:56
Speaker 2: ten percent a day, they're not going to go five
25:59
Speaker 2: or ten percent day forever. We all understand that. And
26:04
Speaker 2: it's easy to look down on people who like made
26:06
Speaker 2: those mistakes and be like, oh, like you should have
26:08
Speaker 2: known better, and look like, if you've invested and never
26:11
Speaker 2: lost money, congratulations, you're the first person alive who's ever
26:15
Speaker 2: gotten through investing in stocks without losing money. Because I've
26:19
Speaker 2: had plenty of times where I've done something stupid, uh,
26:22
Speaker 2: and you try to learn from it and do better
26:24
Speaker 2: next time. With you know, this situation in particular, given
26:29
Speaker 2: the amount of leverage employed and the volatility of these positions.
26:32
Speaker 2: There are some people that the one that I've seen
26:35
Speaker 2: that I can't verify that it's real, but I think
26:37
Speaker 2: that it is. There's someone I don't know where they're from,
26:41
Speaker 2: but they had made like twenty seven million dollars over
26:45
Speaker 2: a six month period and are now back down.
26:46
Speaker 1: To four.
26:49
Speaker 4: Million dollars.
26:50
Speaker 2: But you still have four but not twenty seven, And
26:52
Speaker 2: the question is, like, they're just always going to be
26:54
Speaker 2: chasing that, you know, that that number that they had
26:57
Speaker 2: gotten to, And I don't know.
26:58
Speaker 3: That story to me so very much like the dot
27:03
Speaker 3: com era bubble. I just know so many people who
27:06
Speaker 3: today are in their fifties, ye, who either made million.
27:11
Speaker 4: Yeah.
27:12
Speaker 3: The ones that I feel really bad for are the
27:14
Speaker 3: ones who made millions based on working for a company
27:18
Speaker 3: whose stock price was in their PORTFOLI where stock was
27:21
Speaker 3: in their portfolio, but they literally weren't allowed to sell it. Yeah,
27:24
Speaker 3: Like those are the worst ones I hear about. Like
27:26
Speaker 3: I was literally weeks away from being able to sell
27:28
Speaker 3: all my stock and take the cash, and then the
27:31
Speaker 3: dot com bubble burst and I was back to stock
27:34
Speaker 3: options that were literally worthless. But a lot of this
27:38
Speaker 3: happened back then too, and I gotta be honest, it's
27:41
Speaker 3: nothing new under the sun, like nothing new. And it's
27:44
Speaker 3: also I don't think you can look at the AI
27:49
Speaker 3: market right now and say, oh, yeah, there was a
27:51
Speaker 3: bubble and now it's popped.
27:53
Speaker 4: No, maybe in some Korean stocks, but yeah, what.
27:56
Speaker 2: I think you can say is in memory stocks and
27:58
Speaker 2: chip stocks, some of the froth has come off, and
28:02
Speaker 2: now what happens after the next couple months is going
28:05
Speaker 2: to be determined by, hey, what do we actually see
28:08
Speaker 2: from those companies going forward and the earnings that they're
28:12
Speaker 2: able to present. Because there's a path where, okay, like
28:16
Speaker 2: this is not just a temporary thing, and you see
28:19
Speaker 2: these companies continuing to grow and okay, you can you know,
28:23
Speaker 2: start to regain your footing, probably not doubling in a month,
28:26
Speaker 2: which is not healthy for anyone. There's also a path where, okay,
28:30
Speaker 2: maybe it becomes apparent three six, nine months from now
28:33
Speaker 2: that yeah, the AI you know trade has peaked and
28:37
Speaker 2: that that industry is seeing, you know, sharply decelerating growth
28:41
Speaker 2: and there's another leg down. You know, it's it could
28:44
Speaker 2: very easily be both of those.
28:46
Speaker 3: Yeah, remember that the tech bubble is not defined by
28:49
Speaker 3: a straight line up and a straight line down. Nope,
28:52
Speaker 3: it was defined by a number of sharp draw downs
28:57
Speaker 3: followed by sharp rallies, some of which took you back
29:00
Speaker 3: past where you were on the business high and a
29:03
Speaker 3: lot of headfakes that were really, really tough to identify.
29:07
Speaker 3: And again, not that we are going to repeat ourselves,
29:10
Speaker 3: but I would sure be surprised if it turns out
29:14
Speaker 3: that we are in an asset bubble in the US
29:16
Speaker 3: stock market, or in tech stocks in particular, if it
29:19
Speaker 3: ends up just popping to a straight line downward at
29:22
Speaker 3: some point, that would be extraordinarily irregular.
29:25
Speaker 2: Risk management diversification. Understand what they are, how they work,
29:29
Speaker 2: and how they prevent you from running into these situations.
29:32
Speaker 2: Let's take a quick break. When we return, We've got
29:34
Speaker 2: Paul Monica from Baron's joining us.
29:36
Speaker 4: Next.
29:37
Speaker 1: Here The Financial Exchange every day from eleven to noon
29:40
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29:44
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29:53
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30:01
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30:08
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30:11
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30:20
Speaker 2: As promised, We're now joined by the one and only
30:22
Speaker 2: Paul Monica from Barons and Yeah. Sometimes we talk about
30:26
Speaker 2: companies with Paul that none of us have heard of.
30:28
Speaker 2: Sometimes we talk about companies that none of us can understand.
30:32
Speaker 2: Today we're talking about a sandwich shop that's going public
30:38
Speaker 2: and its name is Jersey Mike's.
30:39
Speaker 4: Paul.
30:40
Speaker 6: How you doing, I'm good, Thanks, How you doing?
30:43
Speaker 2: I'm great. I didn't even know that Jersey Mikes was
30:45
Speaker 2: going public until earlier this week, and then, like you,
30:47
Speaker 2: started getting some buzzfloating up. What's the deal?
30:51
Speaker 6: Yeah, it's fascinating.
30:53
Speaker 7: Jersey Mike's, you know, incredibly popular subway.
30:58
Speaker 6: Shop, sam with shop.
31:00
Speaker 7: You've all seen the ads with Danny DeVito and two
31:03
Speaker 7: time Super Bowl champion Eli Manning.
31:05
Speaker 6: Sorry I had to do that.
31:07
Speaker 7: He never heard of that guy exactly waiting for Tom
31:11
Speaker 7: Brady to be in the next commercial. Amusing, but no,
31:15
Speaker 7: Jersey Mikes is a popular branchise that has recently in
31:21
Speaker 7: a customer satisfaction survey, supplanted Chick fil A as the
31:28
Speaker 7: most popular fast casual restaurant chain in America based on
31:34
Speaker 7: customer satisfaction. And you know, Jersey Mikes is able to
31:40
Speaker 7: keep its own costs down because they are mainly a franchiser.
31:44
Speaker 7: They don't operate many of the stores that have the
31:48
Speaker 7: branding on it. But you know, revenue same store sales
31:52
Speaker 7: growth has been, you know, growing pretty rapidly over the
31:56
Speaker 7: past couple of years because of the popularity of these sandwiches,
31:59
Speaker 7: which I think a lot of people like the fact
32:01
Speaker 7: that they are legit legitimately good Italian cold cuts and
32:06
Speaker 7: other types of sandwiches hot and cold that are made
32:12
Speaker 7: right in front of you, and you know, not to
32:15
Speaker 7: sound like a company shill, they taste pretty good too.
32:18
Speaker 7: My family loves them. The question now is should you
32:21
Speaker 7: buy the stock. The valuation is very steep. It looks
32:25
Speaker 7: like it's going to be going out trading it ten
32:28
Speaker 7: times sales.
32:29
Speaker 6: From last year. That's like double the evaluation for many other.
32:34
Speaker 7: Popular fast casual restaurants like Wingstop and the Ocava.
32:40
Speaker 2: Yeah, it's a question of you know, anytime you're talking
32:44
Speaker 2: about this business. It's also one in my opinion, of look,
32:47
Speaker 2: we've seen kind of how fads have moved in that industry,
32:51
Speaker 2: even just within subs. I mean, I remember when Quizno's was,
32:54
Speaker 2: you know, the big up and comer, and then they
32:55
Speaker 2: tried to go head to head with Subway on price
32:57
Speaker 2: and got bludgeoned. So it's kind of like, Okay, how
33:01
Speaker 2: do you know that you have staying power? I think
33:02
Speaker 2: is a real question in a business that depends that
33:06
Speaker 2: depends on staying power in order to justify those prices.
33:10
Speaker 7: Exactly, And I think that's going to be a challenge
33:12
Speaker 7: for investors going forward. We all know that there are
33:17
Speaker 7: many food fads, and who's to say that over the
33:20
Speaker 7: next couple of years Jersey Mikes is going to remain
33:23
Speaker 7: as popular.
33:24
Speaker 6: Obviously a lot of.
33:26
Speaker 7: Investors have to worry as well about health and food safety.
33:33
Speaker 7: We've seen that with the recent concerns about Taylor Farms.
33:37
Speaker 6: You know, it doesn't take much.
33:40
Speaker 7: Just ask Chipotle for sure, a stock to get hit
33:44
Speaker 7: if you have any public health concerns. Again, not suggesting
33:47
Speaker 7: that there's anything going on at Jersey Mikes that's going
33:50
Speaker 7: to lead to that, but it's a risk for I
33:53
Speaker 7: think any restaurant company and investors.
33:55
Speaker 6: Have to be aware.
33:57
Speaker 2: Very good, Paul, appreciate you joining us today. I hope
33:59
Speaker 2: you have a great weekend coming up and we'll talk
34:02
Speaker 2: to you soon.
34:04
Speaker 6: Thanks a lot. How are going guys?
34:05
Speaker 2: That is Paul Lamonica from Baron's Mike. You ever hear
34:10
Speaker 2: of LinkedIn?
34:12
Speaker 4: Yeah? You ever go on LinkedIn occasionally?
34:15
Speaker 2: I generally try not to, but once every couple months
34:17
Speaker 2: or so I pop over there just to be like, okay, like,
34:20
Speaker 2: you know, show me, you know whatever corporate people are
34:24
Speaker 2: talking about, uh.
34:25
Speaker 3: Huh so, which is usually some iteration of I had
34:31
Speaker 3: dinner with my nephew and here's what it talked to
34:35
Speaker 3: me about business ethics exactly.
34:38
Speaker 1: Yeah.
34:38
Speaker 2: So LinkedIn, in my opinion, sucks. I just I despise it,
34:45
Speaker 2: like no one's like them. I just find it to
34:49
Speaker 2: be the fakest place on the internet. And that's saying something.
34:55
Speaker 2: So I did like a pop over to LinkedIn this
34:59
Speaker 2: morning and was just you know, poking through and literally
35:02
Speaker 2: it's like, oh, like, you know, here's what my dog
35:04
Speaker 2: taught me about this, or here's you know, this is
35:06
Speaker 2: me having a colonoscopy. Like literally, I'm looking at this
35:09
Speaker 2: right now, and here's what it taught me about the
35:13
Speaker 2: healthcare sector. So what's interesting is, you know, I was like, okay,
35:18
Speaker 2: like maybe I don't want to see posts from this
35:20
Speaker 2: person anymore, and like can I do that?
35:22
Speaker 6: So?
35:22
Speaker 2: You know how they have like the little ellipses, you know,
35:25
Speaker 2: button with you know, the three dots I do, so
35:27
Speaker 2: I click on that on one of them and there's
35:30
Speaker 2: a menu where it's like you can save this post,
35:32
Speaker 2: you can copy the link, you can embed this, you
35:34
Speaker 2: can unfollow, say you're not interested. There's a new option
35:38
Speaker 2: on LinkedIn now, Michael, and I'm not making this up.
35:42
Speaker 2: It's got the uh a big diamond with an exclamation
35:46
Speaker 2: point in the middle, so you know, kind of like
35:47
Speaker 2: that that danger like whoa sign and the text reads
35:52
Speaker 2: as follows seems like AI slop hm. LinkedIn apparently must
35:59
Speaker 2: be getting enough complaint. It's about people just putting AI
36:02
Speaker 2: slop into LinkedIn that they now have a way to
36:06
Speaker 2: flag if you think a post is AI slop.
36:10
Speaker 3: Also LinkedIn you're owned by Microsoft, do you think you
36:13
Speaker 3: might be better at detecting what is AI? If your
36:15
Speaker 3: goal is to decrease AI slop on this site. Don't
36:19
Speaker 3: you think you'd be pretty good at detecting that.
36:21
Speaker 2: I think so probably. But the counter to it is
36:26
Speaker 2: in giving a user agency. It makes the user a
36:29
Speaker 2: feel good about it, like, oh, I'm going to get
36:31
Speaker 2: rid of this. And also then this is my here's
36:37
Speaker 2: my cynical view on this is that by getting users
36:42
Speaker 2: to flag what they think is AI slop, Microsoft can
36:46
Speaker 2: then train its AI to not sound like that.
36:48
Speaker 4: Yeah, that's true.
36:50
Speaker 2: That's that's where I think the real goal of that
36:53
Speaker 2: puppy is.
36:54
Speaker 3: Boston Globe has a piece today the title between prices
36:59
Speaker 3: and a arhea causing parasite. Lettuce is causing hard times
37:03
Speaker 3: at some restaurants.
37:04
Speaker 2: I think it's really the diarrhea.
37:05
Speaker 3: I was gonna say, you're really putting those two on
37:09
Speaker 3: an equal scale here, And I don't think the prices
37:12
Speaker 3: have anything to do with it. I really think that
37:16
Speaker 3: if restaurants are having a tough time selling the lettuce,
37:20
Speaker 3: it is about the diarrhea and not the extra thirty cents.
37:25
Speaker 2: Yeah.
37:26
Speaker 3: I just found that to be the funniest headline. There's
37:30
Speaker 3: two things going on. Prices are up a little bit
37:32
Speaker 3: on lettuce. Also a fair bit of it seems to
37:34
Speaker 3: be causing diarrhea all across the country.
37:37
Speaker 4: I wonder why people aren't buying it.
37:39
Speaker 2: Yeah, when when when forced?
37:42
Speaker 4: Not the price?
37:43
Speaker 2: Is it the price or the poop? It's always the poop,
37:47
Speaker 2: you know. The comparison would be like, hey, like, you know,
37:53
Speaker 2: with gas prices high, people don't want to travel to
37:56
Speaker 2: Canada's national forests this year. Or maybe it's the giant
37:59
Speaker 2: wild fires that are going through them.
38:03
Speaker 4: Yeah, you know, probably one not the other. But you
38:05
Speaker 4: take your guess.
38:06
Speaker 2: You know, ancient Romans loved going to Mount Vesuvius until
38:11
Speaker 2: one fateful day when horse prices went up. No, it
38:15
Speaker 2: was probably the volcano. Let's take a quick break for
38:18
Speaker 2: the rest of the day, and when we return tomorrow
38:21
Speaker 2: we'll have more of us