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Is Meta targeting Apple with its latest moves? · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike armstrawa.
1:09
Speaker 2: Chuck Mike Tucker with you here on a Friday, and
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Speaker 2: as we sit here right now, all three major ingencies
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Speaker 2: in the green. The S and P's up twenty three points,
1:19
Speaker 2: Dow Jones is up one hundred and forty six points,
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Speaker 2: and ASDA can Posite up eighty eight points, So we
1:24
Speaker 2: got some green on the board. Tenure. US Treasury is
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Speaker 2: up one point nine basis points to four point one
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Speaker 2: two seven percent. Dollar index flat today at ninety eight
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Speaker 2: point nine to five five. Gold is up twenty eight
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Speaker 2: to twenty an ounce to forty two to seventy one
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Speaker 2: and twenty cents. And we've got crude oil up sixty
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Speaker 2: cents a barrel on West Text Intermediate to sixty dollars
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Speaker 2: and twenty seven cents UH. When we take a look
1:47
Speaker 2: at gas prices though continuing to slide, and that should
1:51
Speaker 2: be expected for the next five to seven days, even
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Speaker 2: with crude oil tacking up just a little bit. Main
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Speaker 2: reason refinery capacity has come back online and the last
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Speaker 2: week or so in the US, and that is getting
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Speaker 2: cheaper gas out to people. So we're at two ninety
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Speaker 2: seven and eight tenths of ascent right now, compared to
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Speaker 2: a year ago. We're at three h three and two cents,
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Speaker 2: so down about five cents a couple percentage points since
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Speaker 2: that time. This morning, two major pieces of news. First one,
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Speaker 2: well it's it's a semi major piece news. We got
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Speaker 2: September PCE price index data. Yes, it's two months delayed,
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Speaker 2: but hey, who you know who's counting. Will take what
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Speaker 2: we can get from a data perspective. Came in as expected.
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Speaker 2: Point two percent on the headline, I'm sorry in the court.
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Speaker 2: Point three percent month over month on the headline. No
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Speaker 2: major surprises. There. Also big news overnight, Netflix and Warner
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Speaker 2: Brothers Discovery trying to get together in a seventy two
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Speaker 2: billion dollar acquisition of Warner Brothers by Netflix that obviously
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Speaker 2: is pending regulatory approval and a whole bunch of other things,
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Speaker 2: but would close in twelve to eighteen months if approved
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Speaker 2: at this point. So those have been some of the
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Speaker 2: major stories that we have been covering. Mike Pece from Barons,
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Speaker 2: Meta opens a new frontier in AI race. Why it's
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Speaker 2: a warning for Apple?
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Speaker 3: What's the warning, Michael, I'm not buying it. So both
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Speaker 3: Apple and Meta have been working on wearables. Apple kind
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Speaker 3: of moved away from theirs, they moved along from the
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Speaker 3: wearable glasses. I think they might revisit it at some point.
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Speaker 3: But Meta has been pushing it with their you know,
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Speaker 3: their their product that who's been advertising. Is it like
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Speaker 3: Channing Tatum or something like that has been advertising what
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Speaker 3: their ray ban glasses?
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Speaker 2: Yeah.
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Speaker 4: I think you're right, Mike.
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Speaker 3: I've seen the ads for them. I don't think anybody's
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Speaker 3: buying them, but they seem to be.
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Speaker 2: Pushing normally like Channing Tatum.
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Speaker 3: Second, he affiliates with Meta, He's done in your mind.
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Speaker 4: Chris Pratt was.
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Speaker 2: In one of them. He's not. He's not done, but
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Speaker 2: just you know, like again like he's not, you know again,
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Speaker 2: like I don't know a guy. Sure, I'm a Channing
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Speaker 2: Tatum fan. I think he's the Jump Street Movies, by
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Speaker 2: the way, better than people would have expected going in
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Speaker 2: with that ip.
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Speaker 3: So they are trying to jump in there and push
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Speaker 3: on that front. I really don't think that it's any
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Speaker 3: threat to Apple. Quite honestly, I just don't see it.
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Speaker 3: Investors did applaud Meta a little bit when they announced
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Speaker 3: just this week that they were abandoning some of their
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Speaker 3: investment in the metaverse, which begs the question are they
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Speaker 3: going to have to rename themselves again? Which would be
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Speaker 3: just hilarious because what are they going to rename themselves?
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Speaker 2: Real MEDAI AI verse? I don't know.
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Speaker 3: I don't know which direction they go with the naming
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Speaker 3: piece of it, but they're clearly trying to push more
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Speaker 3: onto the artificial intelligence side, and they want to create
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Speaker 3: AI powered wearables, and I'm sure Apple's thinking about that too,
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Speaker 3: But I don't know if I had to bet on
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Speaker 3: one company's overall success by being late to the game
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Speaker 3: on AI. Not that Apple's further late to the game
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Speaker 3: than Meta is, but I have to bet on Apple
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Speaker 3: on this one.
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Speaker 2: Yeah. I mean, here, here's the thing about Meta. Meta
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Speaker 2: is really good at building social networks. They know what
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Speaker 2: makes them tick obviously. Look they built Facebook and then
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Speaker 2: people forget Like when they acquired Instagram. Instagram was a
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Speaker 2: tiny little gnat of a company. I mean, there's a
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Speaker 2: reason why Meta got it for what was it a
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Speaker 2: billion dollars? I think was the sale. I don't remember
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Speaker 2: the dollar map, but it was. I think it was
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Speaker 2: a billion dollars. It was It was a tiny little
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Speaker 2: company and Meta like figured out exactly made that platform
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Speaker 2: tick and they want billion. Yeah, billion dollars.
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Speaker 3: They grew it exponentially, so really still because they really
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Speaker 3: pushed the metaverse as the next frontier for social media.
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Speaker 2: Right, but it's not a social network. It was attempted
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Speaker 2: to be.
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Speaker 3: Like all of their advertising, remember all the advertising for
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Speaker 3: their garbage metaverse was, hey, you can go metaverse fishing
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Speaker 3: with your father who lives across the world.
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Speaker 2: And they tried to make it that. But it's not.
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Speaker 2: That's the thing. It's it's not. It's a crappy virtual
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Speaker 2: reality world that no one likes, and like that's the deal.
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Speaker 2: I'm sorry, Mark, but that's the deal. No one likes
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Speaker 2: your metaverse, like you just if you spent eighty billion
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Speaker 2: dollars trying to make it happen, and it's not happening.
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Speaker 2: It's never going to it only seventy seven, Chuck, I
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Speaker 2: was actually, no, those are the losses. So you're right.
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Speaker 3: There was some revenue attached to it, so the spending
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Speaker 3: was probably well above that.
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Speaker 2: So like, it's just not going to happen. And this
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Speaker 2: is the piece that I've come back to with meta
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Speaker 2: over and over. I don't think they have any understanding
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Speaker 2: of what people actually want outside of social media addiction.
6:55
Speaker 2: They've tried to make devices. Remember they had the cameras
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Speaker 2: that they were making for your home, the ones where
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Speaker 2: you could like face It was like whatever the meta
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Speaker 2: version of face time is.
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Speaker 4: The Amazon Echo version for Meta.
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Speaker 2: Whatever those are. No one wanted them, No, no one
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Speaker 2: had any desire for that. Like they've tried to make
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Speaker 2: all kinds of things they've had. They bought up Oculus,
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Speaker 2: you remember that, Like that was part of the whole
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Speaker 2: Meta even before they got into trying to make it
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Speaker 2: like the metaverse. Remember, they were trying to sell it
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Speaker 2: as like oh, you can do like video games. No
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Speaker 2: one wanted the stuff. So I just I look at
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Speaker 2: Meta and I admit, like, they're really good at getting
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Speaker 2: you addicted to social media. I'm not sure that they've
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Speaker 2: proven they can do anything else. Yeah, none of it. Well,
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Speaker 2: is there is there any other product that they've developed
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Speaker 2: where you're like, yes, this is like this is the
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Speaker 2: one they No. I mean, they've acquired a few.
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Speaker 3: They do own what I would describe as kind of
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Speaker 3: the premiere encrypted messaging.
8:00
Speaker 2: Service across the globe, WhatsApp yep. But again that was
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Speaker 2: another acquisition. I do think they make any money from it,
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Speaker 2: doubt it.
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Speaker 3: Maybe you could say they've had some success on Facebook Marketplace,
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Speaker 3: but that's more of a tie in. So I am
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Speaker 3: very suspicious that they're going to have some giant success
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Speaker 3: on rolling out a new piece of hardware powered by
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Speaker 3: artificial intelligence. Instead, I think what they'll continue to do
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Speaker 3: is allow all sorts of AI development tools to spread
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Speaker 3: massive misinformation on their social media platforms. So that will
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Speaker 3: certainly continue for anybody that uses Facebook. You can probably
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Speaker 3: attest that like one in three videos is very clearly
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Speaker 3: generated by garbage AI.
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Speaker 2: But this other stuff, I don't know. It looks too
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Speaker 2: pie in This guy for me. Do you ever watch
8:51
Speaker 2: The Dark Knight? Yeah? Yeah, so Morgan Freeman at one point,
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Speaker 2: the guy who's trying to blackmail Bruce Wayne. Yeah, he
9:02
Speaker 2: goes to him. He goes, so, let me get this straight.
9:04
Speaker 2: You know, you think that your boss is this you know,
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Speaker 2: billionaire and mass vigilanthews, you know, beating criminals up all night,
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Speaker 2: and your plan is to blackmail them. He goes, good luck.
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Speaker 2: It's kind of where I'm at with Meta on this.
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Speaker 2: It's like, so you're saying that your competitor is the
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Speaker 2: premier designer, producer, marketer, and seller of hardware devices in
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Speaker 2: the world, who makes more money than anyone else in
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Speaker 2: businesses that no one else can make money in. And
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Speaker 2: your plan is to compete with them? Good luck, good luck.
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Speaker 2: That's that's kind of where we are. Like, it's that's
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Speaker 2: just not their bag. They can continue to do what
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Speaker 2: they want. I get why they want to do this
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Speaker 2: because Meta is all salty, rightly so, by the way,
9:56
Speaker 2: it's not like Apple's like some angel out there. Apple
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Speaker 2: Chain the rules regarding data sharing on Apple products five
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Speaker 2: or six years ago, and it completely disrupted how Meta
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Speaker 2: had to operate and run their business. Meda doesn't want
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Speaker 2: to have that happen again, So they want to own
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Speaker 2: the hardware in order to be able to set the
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Speaker 2: rules that are beneficial to them. I get it. I
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Speaker 2: just I don't think they're good at that, and I
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Speaker 2: think they're wasting investors' money trying to make it work,
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Speaker 2: you know. And and look, here's what I think Meta
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Speaker 2: could do if they really wanted to the problem with
10:37
Speaker 2: like and why I say they're not good at it.
10:38
Speaker 2: They just spent eighty billion dollars trying to make metal work,
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Speaker 2: and it doesn't instead of trying to dig one well,
10:46
Speaker 2: you know, to the center of the earth, just pop
10:49
Speaker 2: four hundred different ones out there and see what comes up.
10:52
Speaker 2: It's what Amazon does, it's what Google does, It's not
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Speaker 2: really what Apple does. But look, if you if you're
10:59
Speaker 2: not sure how you going to make it work, don't
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Speaker 2: put all your eggs in that basket, right and we'll
11:03
Speaker 2: see if I can come up with one more, you know,
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Speaker 2: metaphor to you know, bring in people who aren't you
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Speaker 2: happy with the ones I've done so far. Great, make
11:11
Speaker 2: sure they're all Batman related. I mean, yeah, look when
11:16
Speaker 2: you can be yourself, but at all other times be Batman. Yeah,
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Speaker 2: let's take a quick break. When we return, we got trivia.
11:24
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Speaker 4: Time for trivia here in the Financial Exchange, And in
12:40
Speaker 4: case you missed it, Netflix has agreed to purchase Warner
12:43
Speaker 4: Brothers film and streaming assets for seventy two billion dollars.
12:48
Speaker 4: Netflix is the largest streaming service with over three hundred
12:54
Speaker 4: million subscribers. So our trivia question today is simply what
12:58
Speaker 4: year was Netflix launch? Once again, what year was Netflix
13:03
Speaker 4: launched Uh be the fifth person today to text us
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Speaker 4: at six one seven three six two thirteen eighty five
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Speaker 2: Once again, the.
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Speaker 4: Fifth correct response to textus to the number six one
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Speaker 4: seven three six two thirteen eighty five along with the
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13:33
Speaker 2: From Barons Michael, the inequality story isn't what you've heard
13:39
Speaker 2: meet the Pacman economy guys, thank you.
13:53
Speaker 3: This has become ooh with Cherry the dumbest financial debate
13:57
Speaker 3: of twenty twenty five.
14:01
Speaker 2: It has. It's become the dumbest financial debate of tick.
14:03
Speaker 2: Have you got the ghost power up? Uh? Okay, yeah,
14:07
Speaker 2: that's the one. Wow.
14:09
Speaker 3: So I enjoy reliving the pac Man days as much
14:13
Speaker 3: as anybody else. Some of my favorite bars of those
14:15
Speaker 3: that have the flat the pac Man bar that you
14:20
Speaker 3: can sit at and play. This is just the silliest
14:24
Speaker 3: debate that we continue to have. Is it k shaped?
14:27
Speaker 3: Is it more shaped like a pac Man? What about
14:29
Speaker 3: misspac Man?
14:31
Speaker 2: Like? What what are we talking about here?
14:34
Speaker 3: Chuck?
14:34
Speaker 2: What is the purpose of this debate. I think the
14:37
Speaker 2: economy is shaped like a toilet in the all the
14:40
Speaker 2: poop just goes downhill, all right, So to describe what
14:46
Speaker 2: we're talking about.
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Speaker 3: The issue that the author takes with the K shaped
14:50
Speaker 3: economy is that the the lines are too severely pointing
14:57
Speaker 3: downward on the bottom of the K. So they think
14:59
Speaker 3: it needs to be a little bit more. I can't
15:00
Speaker 3: do it. I can't do and they think it looks
15:02
Speaker 3: more like a pac Man? Does this not to assemble
15:08
Speaker 3: some of the dumb debates you remember having, like with
15:11
Speaker 3: your friends when you had no responsibilities, sitting on a
15:16
Speaker 3: couch at like twenty two years old, not about I
15:19
Speaker 3: wasn't discussing the shape of the recovery of the economy.
15:22
Speaker 3: But this is such a dumb debate.
15:25
Speaker 2: Yeah, these are the conversations that you had at two
15:27
Speaker 2: am after having a couple two men, and you're like, hey,
15:30
Speaker 2: does that does that cloud look like miss pac Man?
15:34
Speaker 2: A real pac Man? Like no, Like, this is not
15:39
Speaker 2: something that matters the shape of the h Thank you,
15:46
Speaker 2: thank you. Let's let's put this one to bed here,
15:50
Speaker 2: and I guess we'll move on to this piece from
15:54
Speaker 2: market one. What was that one Chappelle, Sa, Mike, I'm
16:06
Speaker 2: gonna workshop this over the weekend just so that you know,
16:08
Speaker 2: we can do it on Monday, and we'll give Tucker
16:10
Speaker 2: a little time to get some new stuff ready. But
16:12
Speaker 2: I'm ready to christen the Frogger economy. Okay, I'm gonna
16:18
Speaker 2: work shop it over the weekend. Yeah. Let me know.
16:20
Speaker 2: It's an interesting shape. Okay, it's not the shape, it's
16:25
Speaker 2: the movement. Ah.
16:27
Speaker 4: You can also do Crossy Road, which is a complete
16:29
Speaker 4: ripoff of Froger, it.
16:31
Speaker 2: Is, which is why we're gonna start with the original.
16:33
Speaker 2: You know. But remember in Frogger sometimes you just take
16:37
Speaker 2: one step forward, but then you gotta take two steps back,
16:40
Speaker 2: do you, Americans? Affordability crisis isn't Terrrif's fault. It's something
16:47
Speaker 2: much much deeper. Yeah, of course it is. We didn't
16:49
Speaker 2: just suddenly like wake up this year and be like, hey,
16:51
Speaker 2: things are unaffordable.
16:54
Speaker 3: Inflation's a problem in twenty twenty five.
16:56
Speaker 2: That's new. Thanks. I appreciate knowing that we've gotten here through. Okay,
17:03
Speaker 2: So actually, there there was a really interesting paper that
17:06
Speaker 2: I read a couple of days ago, and and it
17:10
Speaker 2: gets at this topic as to like kind of how
17:13
Speaker 2: we got here, and I think it does so in
17:17
Speaker 2: a way that is more informative than than trying to
17:21
Speaker 2: figure out like is this a pac manner a case
17:23
Speaker 2: shaped economy, because that's just kind of useless and his
17:26
Speaker 2: fault it is, yes, because like it's it's kind of
17:31
Speaker 2: it kind of gets to the idea that, look, this
17:33
Speaker 2: isn't necessarily anyone's fault. It's everyone making rational decisions based
17:37
Speaker 2: on what the economy has like turned into over time.
17:43
Speaker 2: And and pretty much what it argues that this paper
17:47
Speaker 2: you divide the economy into like who receives a certain
17:51
Speaker 2: share of economic benefits And basically what we've seen is
17:57
Speaker 2: that the labor share of you know, GDP has been
18:01
Speaker 2: declining over time, and the paper asks the question, look,
18:05
Speaker 2: why is this? You know that it's happened. And basically
18:09
Speaker 2: what you get to is, as societies get more complicated,
18:14
Speaker 2: you have to spend more of your time fixing the
18:16
Speaker 2: stuff that makes it work. Like, as an example, if
18:18
Speaker 2: you were to go back to like seventeen sixty three
18:22
Speaker 2: New England, you didn't have to worry about maintaining power
18:26
Speaker 2: lines because there weren't any. You didn't have to worry
18:29
Speaker 2: about maintaining sewers there weren't any today. You have to
18:34
Speaker 2: spend a lot of time and money doing those things,
18:37
Speaker 2: and so it's a much more capital intensive society than
18:40
Speaker 2: it used to be. And so as a result of
18:42
Speaker 2: all of the additional stuff that we have to maintain capital,
18:45
Speaker 2: then said, look, in order for us to get the
18:47
Speaker 2: return that we need, what's the you know, what are
18:50
Speaker 2: the ways that we can manage this? And immediately you
18:53
Speaker 2: go to, let's figure out ways that we can have
18:55
Speaker 2: less labor, because labor is the biggest input for any business,
18:59
Speaker 2: and so that's how you get through you know, productivity
19:01
Speaker 2: increases and things like that. Businesses maxed out those easy
19:05
Speaker 2: to find the levers, you know, kind of over the
19:07
Speaker 2: course of the twentieth century what they do, Hey, let's
19:10
Speaker 2: move the labor somewhere elsewhere it's cheaper. And in doing so,
19:14
Speaker 2: like so you can see, these are like rational decisions
19:17
Speaker 2: for why this happened that ended up leading us to
19:21
Speaker 2: this place where there's now this you know, kind of
19:24
Speaker 2: big problem both from an inequality and an affordability standpoint.
19:28
Speaker 2: We discussed more and we come back, but we will
19:30
Speaker 2: do the trivia answer, and we've got wall Street Watch.
19:33
Speaker 1: Next, bringing the latest financial news straight to your radio.
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Speaker 1: Radio Network. Time now for Wall Street Watch. A complete
19:54
Speaker 1: look at what's moving market so far today right here
19:57
Speaker 1: on the Financial Exchange Radio Network.
20:01
Speaker 4: Markets trading modestly hire at the moment as traders react
20:04
Speaker 4: to a core PCE index for the month of September
20:07
Speaker 4: that came in line with estimates Outside of the inflation reading.
20:11
Speaker 4: The big news comes from the media world, where Netflix
20:13
Speaker 4: has agreed to buy Warner Brothers. Right now, the Dow
20:17
Speaker 4: is up about two tents of a percent or ninety
20:20
Speaker 4: one points higher. SMP five hundred is up nearly two
20:23
Speaker 4: tenths of a percent, Nasdaq up just over a tenth
20:26
Speaker 4: of a percent higher, RUSS two thousand is down about
20:29
Speaker 4: two tenths of one percent, Tenure treasure Field is up
20:32
Speaker 4: two basis points at four point one three five percent,
20:36
Speaker 4: and crude oil up seven tenths of one percent, trading
20:39
Speaker 4: right around sixty dollars barrel. Netflix struck a seventy two
20:43
Speaker 4: billion dollars deal for Warner Brothers, beating out bids from
20:46
Speaker 4: Comcast in paramount. With the deal, Netflix will add Warner's
20:50
Speaker 4: TV and movie libraries, as well as HBO and HBO
20:54
Speaker 4: Max shows. The deal is expected to close in twelve
20:57
Speaker 4: to eighteen months, pending regulatory approval. Netflix has been volatile today.
21:02
Speaker 4: The stock is now down almost three percent, while Warner
21:05
Speaker 4: Brothers shares are up three percent. Meanwhile, digital document signing
21:09
Speaker 4: company DocuSign lifted its annual sales outlook after quarterly results
21:13
Speaker 4: beat expectations driven by subscription growth. However, the stock is
21:17
Speaker 4: dropping six percent as some analysts believe the company's guidance
21:21
Speaker 4: may be conservative. Elsewhere, shares in Victoria's Secret are rallying
21:25
Speaker 4: eleven percent after the lingerie and apparel company posted a
21:29
Speaker 4: narrower than expected quarterly loss and a nine percent increase
21:32
Speaker 4: in net sales. The company also raised its full year outlook,
21:35
Speaker 4: saying it's well positioned for a successful holiday season, and
21:40
Speaker 4: Ulti Beauty raised its full year sales outlooks sending shares
21:43
Speaker 4: in the personal care retailer up by fourteen percent. I'm
21:47
Speaker 4: Tucker Silva and that is Wall Street Watch. And in
21:49
Speaker 4: the previous segment, we asked you the trivia question, what
21:53
Speaker 4: year was Netflix launched?
21:55
Speaker 2: Launched?
21:55
Speaker 4: That would be nineteen ninety seven. David from Reading Masses
21:59
Speaker 4: our winner today taking home a Financial Exchange Show t shirt.
22:02
Speaker 4: Congrats to David, and we play trivia every day here
22:05
Speaker 4: on the Financial Exchange. See complete contest rules at Financial
22:09
Speaker 4: Exchange Show dot com.
22:11
Speaker 2: Before we go further, I'd like to talk about the Moon. Sure,
22:19
Speaker 2: are we going to it? Maybe? I don't know. Did
22:23
Speaker 2: you know that? In nineteen sixty seven, one hundred and
22:27
Speaker 2: seventeen countries signed onto the Outer Space Treaty. Wait, we're
22:31
Speaker 2: literally talking about the Moon. I thought it was like
22:34
Speaker 2: to the moon type? No, what did you think I
22:36
Speaker 2: was gonna Yeah, okay, No, I did not know that.
22:38
Speaker 2: Please go on, Tucker. Did you know about this?
22:41
Speaker 4: No?
22:41
Speaker 2: One, I don't care. So the Outer Space Treaty, this
22:44
Speaker 2: was back in the sixties, when you know, we thought,
22:46
Speaker 2: you know that we were actually gonna be like living
22:48
Speaker 2: on the Moon in the next you know, ten years
22:50
Speaker 2: or whatever. But basically the provisions in this the use
22:56
Speaker 2: of any of outer space has to be carried out
22:58
Speaker 2: for the benefit and interest of all countries in the
23:00
Speaker 2: province of mankind. Outer Space has to be free for
23:03
Speaker 2: the exploration and use for all space all states. Outer
23:08
Speaker 2: Space is not subject to national appropriation by claim of sovereignty,
23:12
Speaker 2: by means or use of occupation, or any other means.
23:14
Speaker 2: And States will not place nuclear weapons or other weapons
23:17
Speaker 2: of mass destruction orbit or on celestial bodies, or stationed
23:20
Speaker 2: them in outer space in any manner. The Moon shall
23:24
Speaker 2: be used exclusively for peaceful purposes. No weapons, testing, military maneuvers,
23:28
Speaker 2: establishing bases, installations of fortifications. H And I had no
23:32
Speaker 2: idea this actually existed. Good. I was. I was listening
23:39
Speaker 2: to a podcast about the Moon economy. Uh huh, and
23:42
Speaker 2: this came up as as part of it, and I
23:44
Speaker 2: was like, oh, I didn't know that, like that was
23:46
Speaker 2: a thing. But basically what the podcast was talking about is, yes,
23:49
Speaker 2: like no nation can technically claim part of the Moon,
23:55
Speaker 2: but the Outer Space Treaty makes no reference to activities
23:58
Speaker 2: such as mining and things like that on the Moon,
24:00
Speaker 2: and so you might be able to own and operate,
24:03
Speaker 2: you know, things that remove minerals from the Moon. To
24:08
Speaker 2: also the question of like, let's say that you were
24:11
Speaker 2: trying to own the Moon, Who's going to enforce it
24:15
Speaker 2: if you like decide to do that. The Space Police? Yeah,
24:20
Speaker 2: you know, like what's what's what's exactly the jurisdiction there
24:24
Speaker 2: like how many? Uh? Like, what who's going to come
24:27
Speaker 2: after you? If you decide, Yeah, we own the moon.
24:32
Speaker 2: It's the next frontier, Chuck, I thought it was interesting. Uh,
24:35
Speaker 2: should Walmart really be trading like a tech company.
24:37
Speaker 3: Mike, based on their sales growth? Maybe talk to me.
24:42
Speaker 3: So it is a very expensive company. What's that pee
24:44
Speaker 3: on this thing? Over thirty five?
24:46
Speaker 2: Now?
24:46
Speaker 3: I think it is. It is a very very expensive company.
24:50
Speaker 3: Their same story.
24:51
Speaker 2: Forty times forty times earnings and forty three times forward earnings.
24:55
Speaker 3: So to start, I don't know that tech companies should
24:58
Speaker 3: be trading at the levels that they they are, So
25:00
Speaker 3: I'm not I'm not sure that you know this is
25:03
Speaker 3: a reasonable comparison. But they are attracting new customers, crushing
25:09
Speaker 3: their competition, and generally expanding their business at a pretty
25:15
Speaker 3: rapid pace. So I think the whole market has some
25:19
Speaker 3: potential reckoning, giving where price to earnings ratios are across
25:23
Speaker 3: the whole thing. But I'm not sure I would exclude
25:25
Speaker 3: Walmart from the party for any reason.
25:28
Speaker 2: They're growing revenue five percent year over year, They're growing
25:31
Speaker 2: earnings almost seven percent year over year. This is over
25:33
Speaker 2: the last five years, so like this is you know,
25:36
Speaker 2: not just a short time thing that you're seeing. If
25:39
Speaker 2: we look in the last five years, Walmart stock is
25:42
Speaker 2: up one hundred and forty eight percent. It's pretty wild, Okay.
25:47
Speaker 2: Now that is you know, from the end of twenty twenty,
25:49
Speaker 2: where like things were still kind of you know, dodgy
25:53
Speaker 2: from the pandemic and everything. But you know, if if
25:58
Speaker 2: you look at this, you can certainly see I mean, look,
26:01
Speaker 2: here's the thing. You take a look at it from
26:04
Speaker 2: a you know, I prefer you know, forward pe ratios,
26:07
Speaker 2: you will get where it stands right now. Again, it's
26:10
Speaker 2: a company that you know, three four years ago even
26:14
Speaker 2: was trading you know, twenty times forward earnings. Now it's
26:16
Speaker 2: forty three. There's a lot of margin expansion that's happening there. Yeah,
26:20
Speaker 2: there's been earnings growth, but it's it's been margin expansion,
26:23
Speaker 2: not margin a multiple expansion, not margin expansion.
26:25
Speaker 3: Margin Stentich would be, they're making a whole lot more profit,
26:28
Speaker 3: They're not making twice as much profit.
26:29
Speaker 2: No, So there's been you know, a ton of multiple
26:31
Speaker 2: expansion that that's been going on there. The question that
26:35
Speaker 2: I ask with Walmart is the same one that I
26:36
Speaker 2: ask of Apple or Amazon or any of these other
26:39
Speaker 2: companies like it. And this is like purely just a
26:43
Speaker 2: theoretical thing. If you own Walmart today, what would ever
26:49
Speaker 2: be the reason that you sell it? Like if you
26:52
Speaker 2: make the decision to buy Walmart now, Like, are they
26:58
Speaker 2: gonna go out of business in your lifetime? Yes, they do.
27:02
Speaker 2: There's bigger problems with the American economy than your portfolio.
27:05
Speaker 3: Yeah, so I'm not worried about them going out of business.
27:07
Speaker 3: But could you have said the same thing about Target
27:10
Speaker 3: a decade ago? Right, No, you can make big missteps
27:13
Speaker 3: as one of these businesses.
27:14
Speaker 2: Not Target's different. Target's not Walmart. No, like now where
27:19
Speaker 2: Walmart Walmart today is as close to you a utility
27:23
Speaker 2: as you can get in retail. They are pretty necessary. Yeah,
27:28
Speaker 2: you know, like Walmart goes out of business, you got
27:30
Speaker 2: two and a half million people unemployed.
27:32
Speaker 3: I don't know, Chuck, I am not sure that there's
27:35
Speaker 3: a huge difference between this company today and Sears thirty
27:38
Speaker 3: years ago.
27:40
Speaker 2: You don't see the level of entrenchment just being different, man,
27:43
Speaker 2: I don't know. I mean, look, I I was a
27:45
Speaker 2: wee little lad back when you know, Sears was dominant.
27:50
Speaker 2: Maybe maybe it is the same, but it sure feels
27:55
Speaker 2: like there's a whole different level of you know, combination
27:58
Speaker 2: of things like a like regulatory capture. The basically you know,
28:00
Speaker 2: keeps like we have the question like is Walmart? We
28:03
Speaker 2: asked the question about a lot of these big companies,
28:05
Speaker 2: like are they too big to fail? Didn't we kind
28:08
Speaker 2: of get to a yes on Walmart?
28:11
Speaker 3: I'm not there? Interesting, Yeah, I'm not there. I mean,
28:15
Speaker 3: if they weren't out of business tomorrow, yeah, but I
28:18
Speaker 3: don't see any reason they couldn't die a slow death
28:21
Speaker 3: of the next two decades, you think even two decades,
28:24
Speaker 3: Like I I feel like it would take one hundred
28:27
Speaker 3: and forty six years for it to happen to Walmart.
28:30
Speaker 2: But I don't know. It's uh again, like for for
28:35
Speaker 2: something bad to happen to Walmart means that something good
28:38
Speaker 2: has to be happening to a whole bunch of other retailers,
28:41
Speaker 2: And I don't know how those two things can happen
28:42
Speaker 2: at the same time. Yeah, just given how important Walmart
28:46
Speaker 2: is to the US economy, I'm not saying this is good.
28:48
Speaker 2: I'm just saying that it is so seven hundred and
28:51
Speaker 2: three billion dollars in goods in the last twelve months.
28:53
Speaker 2: That's two billion dollars a day that Walmart does in revenue.
28:57
Speaker 2: It's insane. Let's take a quick break. When we come back.
29:01
Speaker 2: Paul Omnica joins us to return us to sanity right
29:04
Speaker 2: after this.
29:05
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30:02
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30:19
Speaker 2: As promised, we are now joined by the one and
30:22
Speaker 2: only Paul Hamonica here to talk a little bit about
30:26
Speaker 2: Waste Management. Paul, how you doing today?
30:29
Speaker 6: I'm good? Thanks?
30:30
Speaker 2: How you doing doing well here? So when we take
30:32
Speaker 2: a look at Waste Management, had a nice little run
30:36
Speaker 2: over the last month or so here, and you know,
30:38
Speaker 2: obviously long term company has been fantastic, but you're to
30:42
Speaker 2: date stock's only up about seven percent. What's been challenging
30:46
Speaker 2: them for them this year and what may have changed
30:48
Speaker 2: in the last month or so.
30:50
Speaker 6: Yeah, it's a great question, man. I think that there were,
30:53
Speaker 6: you know, some concerns obviously about the broader economy, and
30:59
Speaker 6: you know, just whether or not, you know, investors really
31:02
Speaker 6: wanted to be in a stodgier, more defensive oriented name
31:08
Speaker 6: at a time where there's still all this optimism about
31:12
Speaker 6: AI and enthusiasm about tech. But with some of the
31:17
Speaker 6: concerns about an AI bubble really picking up steam in November,
31:21
Speaker 6: you started to see some more defensive names like Waste Management.
31:25
Speaker 6: Their peers Republic Services and Waste Connections also did well,
31:29
Speaker 6: and I think investors recognized that, you know, this is
31:32
Speaker 6: a relatively stable business because of government local government contracts,
31:38
Speaker 6: and you know, they are adding some growth with acquisitions.
31:46
Speaker 6: Stereo Cycle as a company that they bought last year
31:49
Speaker 6: that really helped them with medical waste, which you know,
31:52
Speaker 6: as we're all getting older and getting more drugs at home,
31:56
Speaker 6: there's a lot more you know, injectable pens, especially with
32:01
Speaker 6: GLP ones, and you know, lots of pills that we're
32:03
Speaker 6: all taking. So medical waste is a big issue and
32:07
Speaker 6: I think that's something that Waste Management is hoping to
32:10
Speaker 6: capitalize on as well.
32:12
Speaker 2: You mentioned it's kind of, you know, a boring, stodgy company.
32:17
Speaker 2: It still is one that's worth almost one hundred billion dollars,
32:20
Speaker 2: So is it We're still looking at this in terms of, hey,
32:23
Speaker 2: this is always a service that's going to be needed,
32:25
Speaker 2: and yes, it's not necessarily knocking the cover off the
32:27
Speaker 2: ball in twenty twenty five. But unlike you know, other
32:33
Speaker 2: types of businesses that we might have questions about, hey,
32:36
Speaker 2: you know, what will they look like in ten or
32:37
Speaker 2: fifteen years. I think we have a pretty good idea
32:40
Speaker 2: of what the trash business is going to look like
32:41
Speaker 2: in ten or fifteen years, which is pretty similar to today.
32:44
Speaker 2: Is that fair?
32:45
Speaker 6: Yeah, I think that is fair, and that is one
32:48
Speaker 6: of the reasons why, you know, analysts have that kind
32:50
Speaker 6: of steady eight to ten percent ish sort of earnings
32:54
Speaker 6: growth expectations over the next few years, which you know,
32:58
Speaker 6: again that's not in video or meta type levels, but
33:02
Speaker 6: it's stable.
33:03
Speaker 2: It's steady.
33:04
Speaker 6: There's a small dividend that the company pays, you know,
33:08
Speaker 6: so you are getting a dependable business. And that's why
33:11
Speaker 6: they taroted Waste Management at a premium to the broader market.
33:16
Speaker 2: You know, the stock's at about I.
33:17
Speaker 6: Think twenty seven twenty eight times earning, so about three
33:20
Speaker 6: times its growth rate, which may sound like it's really expensive,
33:24
Speaker 6: but the stock has historically traded a premium to the
33:28
Speaker 6: SP five hundred. It's not as big of a premium now,
33:32
Speaker 6: you know, because of the underperformance this year, and I
33:34
Speaker 6: think more importantly, even though they're the category leader, because
33:38
Speaker 6: of some of the questions about the Stereocycle acquisition and
33:42
Speaker 6: whether or not it might hurt profits in the short term.
33:46
Speaker 6: Waste Management's now trading in a discount to its two
33:48
Speaker 6: small arrivals. You'd have to think that that gap might
33:52
Speaker 6: narrow as the company's Earnington prove.
33:55
Speaker 2: Has Waste Management announced any plans for the use of
33:59
Speaker 2: generative as to improve my garbage?
34:03
Speaker 6: I have not seen anything along those lines just yet.
34:08
Speaker 6: But you know what stock isn't an AI play at
34:12
Speaker 6: this point.
34:13
Speaker 2: Very good, Paul. Appreciate you joining us today. I hope
34:15
Speaker 2: you have a fantastic weekend and we'll talk to you soon.
34:19
Speaker 6: The giants are on a bye so it's a great
34:22
Speaker 6: weekend for me.
34:23
Speaker 2: It's a tough one on Monday night, I know, but
34:25
Speaker 2: we appreciate you joining us anyways. Thank you very much.
34:29
Speaker 6: Yes, May the force be with you.
34:32
Speaker 2: I appreciate that. Thank you, Paul. That's Paul Monica from
34:35
Speaker 2: Baron's talking about waste management.
34:38
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35:52
Speaker 2: Mike, what else you got for me? Have you?
35:54
Speaker 3: And Tucker noticed a lack of fifteen foot high inflatable
35:59
Speaker 3: Santa cla year because The Wall Street Journal is reporting that.
36:03
Speaker 2: They are tough to come by. Shortage. Yeah, fifteen Santa shortage.
36:09
Speaker 4: Big displays near me. I've only seen one house that
36:11
Speaker 4: goes all out. But no, I haven't seen a shortage.
36:14
Speaker 2: Yeah I don't.
36:14
Speaker 3: I haven't just because of my own business. I'm embarrassed
36:18
Speaker 3: that I haven't put out yet my giant inflatable grinch
36:21
Speaker 3: that we do in front of our home every year.
36:23
Speaker 3: But apparently Home Depot is not stocked with the biggest
36:30
Speaker 3: they They also did not have a lot of the
36:33
Speaker 3: what is it like the twelve foot tall skeletons at
36:35
Speaker 3: home Depot, and they haven't really answered as to why,
36:39
Speaker 3: other than saying that they were focusing on other items.
36:42
Speaker 2: But Wall Street Journal.
36:43
Speaker 3: Reporting that one of the big manufacturers of this stuff,
36:47
Speaker 3: Seasonal Visions International, which pretty much guess what, imports all
36:50
Speaker 3: of it from China, warned earlier this year that they
36:54
Speaker 3: didn't want anything about supply of goods. They did alert
36:57
Speaker 3: customers that the terraces had prompted them to shut down
37:00
Speaker 3: their phone and email support. So perhaps it's tariff related,
37:06
Speaker 3: but I don't know.
37:07
Speaker 2: I'm just about anyone would tariffs have them shut down
37:09
Speaker 2: their phone and email support.
37:10
Speaker 3: I mean plenty of companies have basically said, hey, we're
37:14
Speaker 3: trying to find ways to cut money here or cut
37:17
Speaker 3: expenses so that we don't have to raise prices all
37:19
Speaker 3: that much, and so.
37:20
Speaker 2: So you get rid of all your customer service. Yeah,
37:23
Speaker 2: I guess. So it's an aggressive move, Cotton. We'll see
37:25
Speaker 2: if it pans out.
37:26
Speaker 3: It was, but yeah, beware that if you are doing
37:30
Speaker 3: some last minute inflatable or other loud, obnoxious yard holiday decorations.
37:38
Speaker 2: They may be tougher to come by this.
37:40
Speaker 4: How big is your Grinch?
37:43
Speaker 3: You know, I'm probably envisioning it bigger than it is,
37:46
Speaker 3: but it's definitely at least eight feet long.
37:50
Speaker 2: He's on a sled.
37:52
Speaker 4: Oh is Max next to him?
37:53
Speaker 2: I'm just looking at it. Okay, Max is next to him.
37:56
Speaker 3: It seems pretty tall to me, but you know, it's
37:58
Speaker 3: been a year since I've hooked it up.
38:00
Speaker 2: I'm kind of over the giant skeletons, to be honest. Yeah,
38:03
Speaker 2: you've seen one. You've seen them all frightens my children,
38:06
Speaker 2: you know, Like it's okay, that is the stated gold Tucker. Yes,
38:10
Speaker 2: let's buy something to frightening small. I don't want to
38:13
Speaker 2: enter the premises. Yes, it is wild just like my
38:18
Speaker 2: five year old this year was like for the entire
38:20
Speaker 2: month of October was like, I want to make things
38:23
Speaker 2: as spooky as possible, and then got to Halloween and
38:25
Speaker 2: just spooked yourself out to the point where she like
38:27
Speaker 2: couldn't go out. Yeah, she's just like I can't do it,
38:30
Speaker 2: like I'm too scared. I'm like, okay, like you spooked
38:33
Speaker 2: yourself out. I got it, but uh it was a
38:35
Speaker 2: good run. We had fun with it anyways. That was
38:37
Speaker 2: up ninety nine points, SMP's up eighteen, Nasdaq up seventy four,
38:41
Speaker 2: so about a quarter percent up on all major indices.
38:43
Speaker 2: SMP within a whisker of potentially notching an all time
38:47
Speaker 2: high close day if you can get above sixty eight ninety.
38:49
Speaker 2: We're gonna take a break for the whole weekend. Hope
38:51
Speaker 2: you all have a great weekend. We'll see you back
38:54
Speaker 2: here Monday four