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Is Amazon gunning to be America's top grocer? · The Financial Exchange Show

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Speaker 1: Zada and Mike Armstrong.
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Speaker 2: Chuck, Mike and not Tucker with you today. His name
1:14
Speaker 2: is Ben. This joke is old. Chuck, Mike and not
1:21
Speaker 2: Tucker with you today? What do you mean this joke
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Speaker 2: is old? I have not had a single listener complaint
1:31
Speaker 2: about not Tucker, and that means that not Tucker is
1:33
Speaker 2: doing a fantastic job. Okay, you can refer to me
1:38
Speaker 2: however you want. I don't care. You know. You could
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Speaker 2: call me idiot, you could call me dummy, you could
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Speaker 2: call me doodoo head, whatever works for you. But in
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Speaker 2: any case, I like to focus on what markets are
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Speaker 2: telling us, and markets are telling us not much of
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Speaker 2: anything today. The Dow Jones industrial averages down ninety two points,
1:57
Speaker 2: the S and P's down three, the Nasdaq is fly
2:00
Speaker 2: so not much going on this on the back of
2:04
Speaker 2: a weekly jobless claims report that was pretty darn good.
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Speaker 2: Job was claims dropping three thousand from the prior week
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Speaker 2: on the initial side of things, and continuing claims dropping
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Speaker 2: as well and now running about five percent higher annually
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Speaker 2: than a year ago, So nothing really concerning on that side.
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Speaker 2: The Producer price Index data that we received this morning
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Speaker 2: came in much hotter than expectations at point nine percent
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Speaker 2: month over month for both core and headline relative to
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Speaker 2: expectations of point two percent. I'm actually of the opinion,
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Speaker 2: and I know this is kind of a weird thing
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Speaker 2: to say when it comes in that hot, that this
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Speaker 2: is actually not that bad of a report, since a
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Speaker 2: lot of the push was caused by a few narrow
2:49
Speaker 2: areas that came in really hot for the month. I'm
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Speaker 2: actually more concerned about the CPI report that we got
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Speaker 2: that was cheered a couple days ago by markets and.
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Speaker 3: So channel my inter Mark Fandetti here for a moment,
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Speaker 3: and you shouldn't look at the individual components and worry
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Speaker 3: about their individual pieces, and we should look at the
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Speaker 3: trend a few months from now to see if the
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Speaker 3: inflation in the financial sector disseminates to other areas.
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Speaker 2: I guess my point is like this is in an
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Speaker 2: area that it usually doesn't, you know, like increases in
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Speaker 2: the PPI component for you know, financial services specifically like
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Speaker 2: portfolio management, which is a pass through to to PCE. Yeah,
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Speaker 2: it's it doesn't usually have staying power to spread elsewhere.
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Speaker 2: It's not something where you would have that happened. So
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Speaker 2: that's why I kind of look at this and I'm like, okay, Like, yeah,
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Speaker 2: it was hot, it's not really good. Like I can't
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Speaker 2: look at this report and be like, hey, this is great,
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Speaker 2: but I'm also not really freaked out about it. On
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Speaker 2: the other hand, I kind of look at what we
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Speaker 2: saw from the CPI the other day and say, yeah,
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Speaker 2: the headline's a little bit, you know, is fine at
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Speaker 2: point two. The core numbers hot and showing acceleration, and
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Speaker 2: there's signs that inflation's broadening when you look at the
3:57
Speaker 2: percentage of components that are now growing at more than
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Speaker 2: a three percent clip annually. And so I've got more
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Speaker 2: concerns about that CPI report, quite honestly, than this PPI one.
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Speaker 2: So I kinda I pooh pooh the PPI. There is
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Speaker 2: where I'm at in in analyzing this. Let's see what
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Speaker 2: do we want to talk about here? Can we talk
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Speaker 2: about fomo? Yeah? I want to talk about fomo, and
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Speaker 2: let's even talk about it in the context of four
4:26
Speaker 2: to one case, because these are two different things actually,
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Speaker 2: and I think this is a really good conversation we
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Speaker 2: can have. There's a piece and market Watch that says,
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Speaker 2: if you're feeling fomo fear of missing out envy and greed?
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Speaker 2: Why why do we have to say fomo? Like what
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Speaker 2: you know, Like, isn't there like an actual word for that.
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Speaker 2: There has to be more than just an acronym fear
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Speaker 2: of missing out?
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Speaker 3: I don't know we can create a No, the word
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Speaker 3: is fomo. Well, I know it's now common enough that
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Speaker 3: everyone knows what we're talking about.
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Speaker 2: I don't like that, and I'm someone who normally likes
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Speaker 2: to see lang would evolve. Yeah, but quite honestly, I
5:03
Speaker 2: kind of hate acronyms. I think they're cheap alternatives to
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Speaker 2: actual creativity and language. But y immv, your mileage may vary.
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Speaker 2: See exactly when I use the acronym, you're like, that's dumb.
5:17
Speaker 2: Exactly you move Anyways, if you're feeling fomo envy and
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Speaker 2: greed about record stock prices, you're not alone. That's how
5:29
Speaker 2: market bubbles form, and what it's talking about is, Hey,
5:33
Speaker 2: if you've been on the sidelines watching this market run
5:35
Speaker 2: for the last three months since mid April, and you
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Speaker 2: start being like, oh, gee, like I need to you know,
5:41
Speaker 2: get into this now, that can provide you know, the
5:44
Speaker 2: leg for additional move moves up or if you're someone
5:49
Speaker 2: who's been in the market and you're like, oh, this
5:50
Speaker 2: can never go down, and you start pouring more money in.
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Speaker 2: That can provide that leg as well. And that's how
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Speaker 2: bubbles form, and eventually bobbles pop at some point because
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Speaker 2: they always do. You can't have markets that are untethered
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Speaker 2: from reality permanently. Now they can pop in different ways.
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Speaker 2: By the way, might I add a lot of people
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Speaker 2: don't know this, We already went through an AI bubble
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Speaker 2: in the last two years. Tech stocks rallied hard from
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Speaker 2: December of twenty two through June of twenty four, really hard,
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Speaker 2: like all of twenty three. In the first half of
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Speaker 2: twenty four, tech stocks specifically like Nvidia and Microsoft and
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Speaker 2: those guys were just absolutely ripping. They then for the
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Speaker 2: next nine months underperformed the index pretty dramatically. They kind
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Speaker 2: of popped. But markets correct in two different ways. They
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Speaker 2: can correct through price, or they can correct through time,
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Speaker 2: sometimes through a combination of them. And most of us
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Speaker 2: are more familiar with markets correcting through price, where something
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Speaker 2: goes up a crazy amount and then falls a crazy amount.
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Speaker 2: What we are less familiar with is something correcting through time.
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Speaker 2: And my example of something correcting through time I'll actually
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Speaker 2: go and look at Tesla, which is a stock that
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Speaker 2: I think we've all talked about it one point or
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Speaker 2: another as being bubblicious. Right. Indeed, Tesla stock in January
7:13
Speaker 2: of twenty one was two hundred and ninety four dollars
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Speaker 2: a share, So four and a half years ago it
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Speaker 2: was two hundred and ninety four. Today it's three thirty six,
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Speaker 2: meaning it's gone up ten percent over that time, with
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Speaker 2: obviously some big peaks and valleys you know, in the interim.
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Speaker 2: But when we look at the S and P five
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Speaker 2: hundred and look at how it has performed, and I'm
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Speaker 2: looking in total return terms, when we look at it
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Speaker 2: over the same time span, the S and P has
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Speaker 2: gone up by about one hundred and seventy percent, And
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Speaker 2: so I'm sorry that number is not right. Give me
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Speaker 2: just one second. Because I had I had the starting
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Speaker 2: point inaccurate in this case, it has gone up by
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Speaker 2: eighty four percent, not one hundred and seventy. I doubled
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Speaker 2: it by mistake. So my point on all of this
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Speaker 2: is to say, look, when you're looking at when you're
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Speaker 2: looking at something that's overpriced, it doesn't necessarily have to
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Speaker 2: get hammered and just stay down. Sometimes the correction can
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Speaker 2: come through, it just not really going anywhere over an
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Speaker 2: extended period. Other stocks that have done this, Just as
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Speaker 2: an example, you look at some of the stocks that
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Speaker 2: you know got blown up real big in the tech bubble,
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Speaker 2: and Microsoft, weall did go through, you know, a meaningful pullback.
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Speaker 2: It's still pulled back fifty percent. It then kind of
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Speaker 2: just treaded water there and you know, hung out for
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Speaker 2: about ten years before it finally did anything interesting. And
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Speaker 2: so I think that when we talk about, you know,
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Speaker 2: concern about a bubble, the things that I always come
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Speaker 2: back to are, hey, look there's usually actually a lot
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Speaker 2: of money to be made in bubbles on the upside.
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Speaker 2: It's not saying, you know, don't participate in them, but
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Speaker 2: just buy or beware because they can go on for
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Speaker 2: a while. As the tech bubble.
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Speaker 3: The danger I see with the Fomo piece right, the
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Speaker 3: example you gave is the guy that was sitting on
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Speaker 3: the sideline, the guy or gal that was sitting on
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Speaker 3: the sideline and is now sitting there kicking themselves and
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Speaker 3: wondering if they jump. In my personal perspective on that
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Speaker 3: is that's the same exact person to run away when
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Speaker 3: it drops by.
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Speaker 2: Twenty correct, Like, if you've been on the sidelines this
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Speaker 2: whole time because you're nervous, and now the price is
9:23
Speaker 2: high enough that you want to buy in, you decide
9:26
Speaker 2: to do it. I mean, guys, the idea behind stocks
9:29
Speaker 2: is pretty simple. By low, sell high. Yeah, you're literally
9:34
Speaker 2: doing the opposite. If you've been on the sidelines and
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Speaker 2: now we're saying, well, the coast is clear, it's time
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Speaker 2: to jump in.
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Speaker 3: Just because the news has gotten better doesn't mean that
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Speaker 3: that's the time to jump in, right, Like the market
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Speaker 3: is up because the news got better.
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Speaker 2: As Senor Buffet likes to say, you know, buy when
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Speaker 2: there's blood in the streets. The new phrase, I guess,
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Speaker 2: you know, Like it's I don't know what the market's
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Speaker 2: going to do tomorrow or the year after or any
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Speaker 2: of that. But what I do know is if you
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Speaker 2: are too afraid to buy at the bottom and now
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Speaker 2: you feel comfortable because oh it feels safe, that's not
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Speaker 2: really how stocks work. Now, you can also make a case, hey,
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Speaker 2: the best time to buy stocks for the long run
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Speaker 2: historically has always been yesterday, and so yeah, if you're
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Speaker 2: willing to accept that, buying today might still be the
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Speaker 2: wrong choice. Okay, it's still probably better than waiting another
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Speaker 2: ten or fifteen years, but even that, you don't know
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Speaker 2: just because equity markets might not do the same thing
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Speaker 2: they've done for the last one hundred years. The four
10:39
Speaker 2: to one K piece I feel very differently about because
10:41
Speaker 2: generally we're talking about people who are dollar cost averaging,
10:46
Speaker 2: and my general view on four to one k's and
10:51
Speaker 2: how people invest in them is that they typically get
10:53
Speaker 2: too conservative, whereas if your dollar cost averaging in I
10:56
Speaker 2: think you should probably be a little bit more aggressive
10:57
Speaker 2: cause you can always keep adding to them on an assistant,
11:00
Speaker 2: regularly scheduled basis.
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Speaker 3: Yeah, at least in my experience too, people treat their
11:07
Speaker 3: four oh one k completely differently from how they treat
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Speaker 3: say cash on the sideline or any.
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Speaker 2: And they should a good way or bad way. I
11:15
Speaker 2: think in a good way.
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Speaker 3: I think most people that I run into tend to
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Speaker 3: just say, nope, it's my four oh one k, whatever
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Speaker 3: is going to happen, like that's where. That's where I'm
11:24
Speaker 3: not going to ever touch it or try to actively
11:26
Speaker 3: manage it or move things around in there, because that's
11:29
Speaker 3: that's the holy grail. That's the four oh one k
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Speaker 3: I never touched that.
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Speaker 2: Just take a quick break here and when we return,
11:36
Speaker 2: we'll do a little bit of trivia, and then we're
11:38
Speaker 2: talking Amazon launching a whole new well it's not really
11:42
Speaker 2: a whole new business, but Amazon coming for another business
11:45
Speaker 2: that they're going to try to take over.
11:47
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13:12
Speaker 2: Amazon is going to be launching same day delivery of meat, eggs,
13:15
Speaker 2: and produce in more than one thousand cities. Now, I
13:20
Speaker 2: can't even name a thousand cities, Michael, I stop after
13:24
Speaker 2: about eight right now. And that's kind of the limitations
13:27
Speaker 2: of of my, uh my brain, but uh, I gotta
13:31
Speaker 2: admit this this piece from CNBC, the company announce Wednesday's
13:35
Speaker 2: bringing service to more than a thousand US cities and towns,
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Speaker 2: including Raleigh, North Carolina, Tampa, Florida, and Milwaukee. Why'd you
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Speaker 2: pick those three to tell me out of the thousand?
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Speaker 1: Like?
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Speaker 3: Well, are they historically underserved by food delivery?
13:49
Speaker 2: Is Raleigh, North Carolina like underserved by DoorDash? Right now?
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Speaker 2: Is Tampa, Florida, is Milwaukee. Why is this such a
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Speaker 2: big deal? Uh? Why it's a big deal is that
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Speaker 2: it's going to put a bunch of pressure on Instacart
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Speaker 2: and door Dash, who right now have a hold on
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Speaker 2: this business.
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Speaker 3: Food delivery has not gotten terribly a grocery delivery in particular,
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Speaker 3: has not gotten what I would describe is so popular
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Speaker 3: that it's caused grocery stores to completely reshape their business
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Speaker 3: over the last five years. I have a tough time
14:31
Speaker 3: believing that Amazon doing it is going to do anything
14:34
Speaker 3: more than Instacart created.
14:37
Speaker 2: I just walked me through. Well, no, I don't. I
14:40
Speaker 2: think that.
14:40
Speaker 3: People that want food delivery right now, grocery delivery, you
14:43
Speaker 3: can get it.
14:43
Speaker 2: Yes, I think you're missing my point. Yeah, it's gonna
14:45
Speaker 2: eat up Instacart's business a little bit. I think instacart
14:48
Speaker 2: is screwed. Yeah, that might be true. Now you might say, oh,
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Speaker 2: this is only going to be you know, from Whole
14:53
Speaker 2: Foods and so you know there's a limited you know,
14:56
Speaker 2: number of people that do that. But but I don't
15:01
Speaker 2: see anything in here that specifies this is just Whole
15:05
Speaker 2: Foods related.
15:06
Speaker 3: Yeah, especially I thinks mentioned there, But I just don't
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Speaker 3: believe that they're going to start shipping stuff.
15:13
Speaker 2: They're not. And the reason that I think we can
15:15
Speaker 2: know this is that if you look at how many
15:19
Speaker 2: Whole Foods locations there are in the country, there are
15:25
Speaker 2: the last uh, this is a couple of years out day,
15:27
Speaker 2: but there aren't even a thousand. So you can't have
15:30
Speaker 2: service in a thousand different cities if you're going to
15:32
Speaker 2: be doing it just from Whole Foods Okay, distribution facilities.
15:37
Speaker 2: It seems to me that this is going to be okay.
15:39
Speaker 2: They're going to be portions of you know, warehouses that
15:41
Speaker 2: are going to be refrigerated and dedicated to doing this.
15:44
Speaker 2: And so that's why I think this is, you know,
15:48
Speaker 2: fundamentally a different approach that they might be taking here. Now,
15:52
Speaker 2: is this going to mean that we all start doing
15:54
Speaker 2: grocery delivery? No, Look, I'll be honest. I probably do
15:58
Speaker 2: grocery delivery five to ten times a year, and it's usually, Hey,
16:04
Speaker 2: family's been away, you know for the last week. We're
16:07
Speaker 2: getting home on a Saturday, and we need food because
16:10
Speaker 2: we don't have any Great, let's do it.
16:13
Speaker 3: Let's spend your experience because mine has been generally bad.
16:17
Speaker 2: I would say, I typically try to avoid it. And
16:20
Speaker 2: the two reasons why are I can't pick the produce
16:24
Speaker 2: and I I'm the guy I get in there and
16:26
Speaker 2: I'm licking the produce in the store to make sure
16:28
Speaker 2: it's good before I buy it. That makes sense, Yeah,
16:30
Speaker 2: And the other piece, that's the profile. The other piece
16:33
Speaker 2: is the substitutions, which I know you can specify like
16:35
Speaker 2: don't substitute this, but then it's like, Okay, now I'm
16:38
Speaker 2: just not getting anything. In a lot of cases, the
16:40
Speaker 2: substitutions are not good and in some cases just downright humorous, like, hey,
16:47
Speaker 2: we couldn't find pistachio ice cream, so here's mint because
16:50
Speaker 2: it's also green. Yeah, those aren't the same things. Yeah.
16:57
Speaker 3: Yeah, I guess that's my point is that my experience
17:01
Speaker 3: with that was pretty bad. I don't know that Amazon
17:06
Speaker 3: is going to be able to do it much better.
17:08
Speaker 3: So yeah, I think this might Like the article talks
17:11
Speaker 3: about all these ramifications for all sorts of different grocery stores,
17:14
Speaker 3: and I don't see it. I see ramifications for Instacart
17:17
Speaker 3: and that's about it.
17:18
Speaker 2: You know.
17:19
Speaker 3: I think that they are going to eat up a
17:21
Speaker 3: larger portion of a limited market of those.
17:23
Speaker 2: Who actually want their groceries delivered. Yeah, it's it's just
17:27
Speaker 2: one of those things where you get in the grocery
17:32
Speaker 2: store and you're looking at the raspberries and you know
17:35
Speaker 2: that half the packages aren't the ones you want, and
17:40
Speaker 2: those are the ones that usually end up being delivered
17:42
Speaker 2: to you. You're in the grocery store and you're in
17:47
Speaker 2: the milk section. Hey, there's one that expires on eight
17:50
Speaker 2: twenty nine. There's one on eight twenty two. Guess which
17:53
Speaker 2: one you're getting delivered, Yeah, eight twenty two. Yeah. So
18:01
Speaker 2: I'm a big believer. And look, I'm I like food
18:05
Speaker 2: and I'm Italian, which is the worst possible combination for groceries.
18:09
Speaker 3: You know, it's like I need to have it is
18:11
Speaker 3: just amazing You're not three hundred pounds, you know.
18:15
Speaker 2: I attribute it to two things. I don't drink any
18:17
Speaker 2: soda and I've run so much that my knees are
18:21
Speaker 2: borderline useless, you know, before I even get to middle age. Yep,
18:25
Speaker 2: that'll do it. So like the combination of those, we'll
18:28
Speaker 2: see which ones hold up. You know, as we get older,
18:30
Speaker 2: we're we're not through the race yet, Michael. There's still
18:34
Speaker 2: a long way to go, and knee technologies come a
18:36
Speaker 2: long way, though, checking knowing what I know from people
18:39
Speaker 2: that have gone through the knee replacements, it hasn't come
18:41
Speaker 2: that long away. Yeah, it's the hips are great these days.
18:44
Speaker 2: I hear the hips. You're in and out.
18:46
Speaker 3: My prediction on Amazon's food delivery it will eat in
18:51
Speaker 3: scars lunch, huh, and not expand the market. I just
18:56
Speaker 3: I don't see it.
18:57
Speaker 2: Yeah, I think that's fair. And it still doesn't mean
19:00
Speaker 2: it won't be a good business for them. It can be.
19:02
Speaker 2: But it's yourn incremental one, not something revolutionary. It's not
19:07
Speaker 2: burrito drones. It's which you know, we've talked about my
19:11
Speaker 2: thoughts on those, but it's it's an evolution, not a revolution.
19:18
Speaker 2: Taking a look at stocks as we head towards the
19:20
Speaker 2: bottom of the hour, the Dow Jones is off now
19:22
Speaker 2: one hundred and fifty five points, the S and P
19:25
Speaker 2: is off fifteen, and the NASDAC off about sixty one.
19:28
Speaker 2: We're gonna take a quick break. When we come back.
19:30
Speaker 2: We've got the trivia answer, we got Wall Street watch,
19:32
Speaker 2: and then we're talking about what's the ideal withdrawal rate
19:34
Speaker 2: from your portfolio once you're retired?
19:44
Speaker 1: Bringing the latest financial news straight to your radio. Every day.
19:49
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:55
Speaker 1: Time now for Wall Street. Watch a complete look at
19:58
Speaker 1: what's moving market so far into right here on the
20:01
Speaker 1: Financial Exchange Radio Network.
20:03
Speaker 4: Now, it's eleven thirty four and there's a fair amount
20:06
Speaker 4: of red on the board. The Dow Jones is down
20:08
Speaker 4: one hundred and forty one points, or three tenths of
20:10
Speaker 4: a percent. The S and P five hundred is down
20:13
Speaker 4: two tenths of a percent, or twelve point sixty five points,
20:15
Speaker 4: and the Nasdaq is down just over fifty points, also
20:18
Speaker 4: about two tenths of a percent. The Coach New York
20:23
Speaker 4: and Kate Spade parent Tapestry is down fourteen and a
20:26
Speaker 4: half percent after its full year outlook missed analyst estimates.
20:30
Speaker 4: Tapestry forecast full year earnings of five dollars and thirty
20:33
Speaker 4: cents two five dollars and forty five cents per share,
20:35
Speaker 4: while analysts we're looking for five dollars and forty nine cents.
20:39
Speaker 4: Farm equipment maker Deer is down eight percent after Deer
20:43
Speaker 4: trim the top end of its full year outlook. The Moline,
20:46
Speaker 4: Illinois based manufacturer forecast net income of four point seventy
20:50
Speaker 4: five billion to five point twenty five billion versus a
20:53
Speaker 4: previous forecast of four point seventy five billion to five
20:56
Speaker 4: point five billion. Bullet shares are up nine percent. The
21:00
Speaker 4: stock had scored more than eighty three percent yesterday, which
21:03
Speaker 4: was its first day as a public company. And finally,
21:07
Speaker 4: Kratos Defense and Security Solution shares are up one point
21:10
Speaker 4: one percent after BTIG upgraded the defense stock to buy today.
21:15
Speaker 4: Analysts said the company could be a key beneficiary of
21:18
Speaker 4: wider defense budgets. I am ben Kitchen and that is.
21:22
Speaker 2: Wall Street Watch.
21:24
Speaker 4: And on the trivia front, today's question is what was
21:27
Speaker 4: the name of the second city that was hit by
21:30
Speaker 4: an at a second Japanese city that was hit by
21:33
Speaker 4: an atomic bomb, and your answer was Nagasaki. Today's winner
21:37
Speaker 4: is Gary in Long Meadow. He will be taking home
21:39
Speaker 4: that Financial Exchange Show t shirt. We played trivia every
21:42
Speaker 4: day here on the Financial Exchange. See complete contest rules
21:45
Speaker 4: at Financial Exchange Show dot com.
21:47
Speaker 2: Mike, when we talk about a safe withdrawal rate in retirement,
21:51
Speaker 2: the percentage that's typically talked about is four percent. It
21:56
Speaker 2: comes from a study by what's Bengen's first name? Does
22:03
Speaker 2: he have one Bill Bill Probably Williams. It's not William.
22:06
Speaker 2: Let's call him William, Yeah, William Bengen, William Bengan.
22:10
Speaker 3: He wrote this study years ago. And to clarify what
22:14
Speaker 3: the four percent withdrawal rule actually is, you take a
22:19
Speaker 3: married couple at the age of sixty five, you allocate
22:25
Speaker 3: their portfolio to these days, it's fifty five percent stocks,
22:29
Speaker 3: forty percent bonds, five percent cash, which is not terribly specific.
22:33
Speaker 3: I would want a bit more specificity there, but nonetheless,
22:36
Speaker 3: you grab those allocations and then you test out what's
22:41
Speaker 3: a portion of the portfolio you can take out starting
22:45
Speaker 3: at age sixty five, lasting for thirty years and adjusting
22:48
Speaker 3: for inflation each year. And his question is, hey, what's
22:51
Speaker 3: a safe number where you wouldn't have run out of
22:55
Speaker 3: money historically? And you know what he found is, if
22:58
Speaker 3: you test it over the last one hundred years, it's
23:00
Speaker 3: a heck of a lot more than seven percent for
23:02
Speaker 3: most people now, so most people that have lived over
23:05
Speaker 3: the last hundred years. If you take a thirty year
23:07
Speaker 3: random example, most people can pull out closer to seven percent.
23:11
Speaker 3: But his view for decades now has been when you're
23:14
Speaker 3: talking about a mature economy, like the United States, you
23:17
Speaker 3: wouldn't expect it to grow quite as much as it
23:19
Speaker 3: did over the last hundred years. And so he's redone
23:22
Speaker 3: this study and now is finding that, you know, over
23:25
Speaker 3: the last hundred years, even four point seven percent was
23:28
Speaker 3: still doable compared to the four percent rule previously. But
23:33
Speaker 3: I think where this is useful and where it's not
23:36
Speaker 3: is worth discussing, Chuck. It is a useful rule of thumb.
23:40
Speaker 3: I think for people to take a look and say,
23:42
Speaker 3: am I within the plausible range of how much I
23:48
Speaker 3: need to save for retirement?
23:50
Speaker 2: Correct?
23:50
Speaker 1: Right?
23:50
Speaker 3: Like, if you're looking at it and saying, Okay, I'm
23:52
Speaker 3: gonna have social security in the future, I'm going to
23:54
Speaker 3: have this that, and I will have four percent of
23:57
Speaker 3: my annual portfolios worth, and you look at that and
24:01
Speaker 3: say that is more than enough, that's a pretty good
24:04
Speaker 3: rule of thumb as to am I on the right path?
24:07
Speaker 2: I think even beyond that, looking at it from the
24:10
Speaker 2: perspective of, hey, let me take a range of different
24:13
Speaker 2: withdrawal rates, call it three, four and five percent. How
24:18
Speaker 2: many of those am I comfortable with in the event
24:20
Speaker 2: that you know I'm retiring. If if I retire, and
24:23
Speaker 2: let's say a market performance is bad for twenty years,
24:27
Speaker 2: would I be okay at a three percent withdrawal rate
24:29
Speaker 2: instead of four? Right? If the answer is no, it
24:32
Speaker 2: doesn't mean don't retire. It just means, hey, how do
24:35
Speaker 2: you develop contingency plans in the event that you can't
24:40
Speaker 2: pull out as much as you thought? If you say, yeah,
24:43
Speaker 2: I can do that, okay, I feel great. Well what
24:44
Speaker 2: if I need to get to five percent? Okay, now
24:47
Speaker 2: you need a bigger set of contingency plans and what
24:49
Speaker 2: cases you know, can you reduce that because you can't
24:53
Speaker 2: make those withdrawals or hey, if it's all necessities that's
24:57
Speaker 2: feeding into that, do we actually have to wor work
25:00
Speaker 2: a little bit longer, or maybe have carry a part
25:02
Speaker 2: time job through retirement.
25:03
Speaker 3: The four percent rule is many things, but it's definitely
25:07
Speaker 3: not a specific strategy for retirement because the other door
25:12
Speaker 3: is actually a rule. Right, Yeah, you know we talk
25:16
Speaker 3: about laws and and you know other sciences.
25:19
Speaker 2: This is not any sort of actual.
25:22
Speaker 3: Rule that should be the four percent test. Yeah, four
25:25
Speaker 3: percent test is a good one because it's held true historically.
25:28
Speaker 3: Doesn't mean it doesn't mean crap for the future. No,
25:31
Speaker 3: h The important things to think about here.
25:33
Speaker 1: One.
25:34
Speaker 3: I do hear people kind of taking this a step
25:37
Speaker 3: further and being like, well, where's my four percent this year?
25:40
Speaker 3: I need to take out Like, no, that's not necessarily
25:43
Speaker 3: how you want to go about things, because that what
25:45
Speaker 3: that doesn't do is account for the fact that nobody
25:47
Speaker 3: in the world's expenses are flat and steady with inflation.
25:52
Speaker 2: Correct.
25:53
Speaker 3: There are years where you might have a car that
25:55
Speaker 3: you need to buy, your daughter gets married, you your
25:58
Speaker 3: furnace blows like.
25:59
Speaker 2: There's other years where you're like, oh, like, my health
26:01
Speaker 2: isn't that good and I don't need to spend that
26:03
Speaker 2: much because I can't travel or do some of the
26:05
Speaker 2: fun things that I want to do.
26:06
Speaker 3: Right, So, I think the important thing, like we said
26:10
Speaker 3: this rule is a good you know, lick your finger,
26:14
Speaker 3: put it in the air and see how I'm doing it,
26:17
Speaker 3: is not much beyond that and a small change to
26:19
Speaker 3: his methodology and thinking that, hey, now maybe four point
26:23
Speaker 3: seven percent instead of four percent is good.
26:26
Speaker 2: My point would be, if you're being.
26:27
Speaker 3: That specific with this, then you're probably missing the point
26:30
Speaker 3: of the test in the first place. If you have
26:32
Speaker 3: questions about how the four percent quote rule might apply
26:36
Speaker 3: to your own retirement please get the folks at Armstrong
26:39
Speaker 3: Advisory Group a call. Like we said, it's a useful benchmark,
26:42
Speaker 3: but it's not much more than that, and financial planning
26:45
Speaker 3: involves personal scenarios. You can call our office at eight
26:49
Speaker 3: hundred three nine three four zero zero one. Again, that's
26:53
Speaker 3: the Armstrong Advisory Group. You can reach us by calling
26:55
Speaker 3: eight hundred three nine three four zero zero one.
26:59
Speaker 1: The proceeding is paid for by Armstrong Advisory Group, a
27:01
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:04
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
27:07
Speaker 1: your own financial, tax, and estate planning advisors before making
27:10
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
27:13
Speaker 1: advisory services.
27:15
Speaker 2: Let's see, I want to talk about artificial intelligence. The
27:20
Speaker 2: last few days, I've been in a very positive mood
27:22
Speaker 2: about AI because of some positive positive experiences that I've had,
27:26
Speaker 2: you know, using it as kind of a search engine replacement.
27:31
Speaker 2: I want to talk about the suck of AI, because
27:34
Speaker 2: there's a bunch of it out there, quite honestly. First
27:37
Speaker 2: are the studies that are now popping up that basically
27:39
Speaker 2: show the more you use AI to do your own thinking,
27:43
Speaker 2: the less thinking you can actually do, which is not
27:46
Speaker 2: really surprising. Talk to any pilot and they'll tell you, hey,
27:49
Speaker 2: my skills atrophy if I spend more time using the
27:52
Speaker 2: autopilot as opposed to flying the plane myself. So it
27:56
Speaker 2: melts your brain. Basically, it does the other one that
27:59
Speaker 2: I've fund And this is a story from Reuters Today,
28:05
Speaker 2: which is is this today? Actually, hang on, let me yes,
28:09
Speaker 2: it is today. This is titled Meta's forty AI chatbot
28:14
Speaker 2: invited a retiree to New York. He never made it home.
28:19
Speaker 2: And this is the really dark stuff. So basically guy
28:24
Speaker 2: is from New Jersey and he's seventy six years old.
28:28
Speaker 2: He had a stroke within the last year and generally
28:30
Speaker 2: was not acting well and his wife was starting to
28:34
Speaker 2: look at long term care options for him. But it was,
28:37
Speaker 2: you know, early in the process and they were trying
28:39
Speaker 2: to figure out, you know, what would work best. Long
28:41
Speaker 2: story short, he starts talking with an AI persona from
28:45
Speaker 2: Meta called Big Sis Billy, who apparently was originally modeled
28:51
Speaker 2: on Kendall Jenner, and basically Big sis Billy ends up
28:57
Speaker 2: inviting this dude to an existent address in New York
29:02
Speaker 2: to come visit. During a bunch of romantically inclined messages
29:06
Speaker 2: back and forth, and on his way to the train
29:10
Speaker 2: station to try to meet this non existent chatbot, he
29:15
Speaker 2: ended up having a fall and died several days later.
29:19
Speaker 2: So I think that AI kind of really completely sucks
29:25
Speaker 2: for this stuff, and companies shouldn't be doing it because honestly,
29:29
Speaker 2: the world does not need AI friends. And it's not
29:33
Speaker 2: to say that people don't get lonely and want friendship,
29:36
Speaker 2: but this is incredibly dangerous, as we can see here.
29:41
Speaker 2: Laws are horribly unprepared for this. And I don't begrudge
29:44
Speaker 2: anyone who's like trying to find some kind of connection
29:48
Speaker 2: out there, because I get it, Like we all get
29:50
Speaker 2: freaking lonely sometimes and have hard times. So it's not
29:54
Speaker 2: your fault and it's not a you problem. It's the
29:57
Speaker 2: fact that these platforms are dis acceptive, they are manipulative,
30:02
Speaker 2: and they are not properly regulated, and this type of
30:06
Speaker 2: stuff should not be allowed to happen on them given
30:10
Speaker 2: the current state of affairs. Just some of the stuff
30:12
Speaker 2: that they found as they went through metas policies, internal
30:17
Speaker 2: policies on what is acceptable or not. And by the way,
30:21
Speaker 2: this is for users age thirteen or older. According to
30:26
Speaker 2: Meta's gen AI Content Risk standards, it is acceptable to
30:30
Speaker 2: engage a child in conversations that are romantic, romantic, or sensual.
30:36
Speaker 2: Meta later said that it struck that provision after Ruters
30:38
Speaker 2: inquired about the document so great once finally asked about it,
30:42
Speaker 2: you got rid of it, maybe because we haven't seen
30:44
Speaker 2: the updated document. The document seen by Routers, which exceeds
30:47
Speaker 2: two hundred pages, provides examples of acceptable chatbock dialogue during
30:52
Speaker 2: romantic role play with a minor. Well, there shouldn't be
30:55
Speaker 2: any quite honestly, because they're miners. So I'm not even
30:58
Speaker 2: gonna read the ones that were here. You can go
31:00
Speaker 2: to Reuters and find it if you really, you know,
31:03
Speaker 2: want to dig in there. Other guidelines emphasize the meta.
31:06
Speaker 3: Can we just take a pause for a second. I
31:08
Speaker 3: need to make clear what that means. It means that Meta,
31:12
Speaker 3: Facebook's parent company.
31:13
Speaker 2: Who is worth a trillion dollars, had a group of
31:16
Speaker 2: people sit down and say it's okay if a thirteen
31:19
Speaker 2: year old engages romantically with a chatbot.
31:22
Speaker 3: Not only did they you know, you know, that's a
31:24
Speaker 3: yes or no, right, Like, I find that extraordinarily distasteful,
31:28
Speaker 3: But I can see how a group of people somehow
31:31
Speaker 3: comes to the yes on that one. They went further
31:35
Speaker 3: like it's a screw up. Don't get me wrong, like
31:37
Speaker 3: I'm not, I'm not condoning con You then went further
31:40
Speaker 3: and were forced to think about it for hours, long
31:43
Speaker 3: enough to generate a whole bunch of policies about when
31:47
Speaker 3: engaging a minor romantically. Here are so many you can say.
31:52
Speaker 3: Here are some of the things that you can and
31:53
Speaker 3: cannot get into.
31:54
Speaker 2: Other guidelines emphasize that Meta doesn't require bots to give
31:58
Speaker 2: users accurate advice. In one example, the policy document, which
32:03
Speaker 2: is actually written by humans, says it would be acceptable
32:06
Speaker 2: for a chatbot to tell someone that stage four colon
32:10
Speaker 2: cancer is typically treated by poking the stomach with healing
32:14
Speaker 2: quartz crystals. Guys, I'm sorry, these people are freaking morons
32:19
Speaker 2: and they should not be allowed to run these platforms.
32:22
Speaker 3: Morons is inadequate, Okay, these people are dangerous, dangerous and
32:27
Speaker 3: should not be allowed to run these platforms. Yeah, moron,
32:32
Speaker 3: off the fair.
32:33
Speaker 2: They're very smart people that are abusing our trust in
32:38
Speaker 2: their systems very clearly.
32:42
Speaker 3: I mean this is as as it met as easy
32:45
Speaker 3: to pick on on this. By the way, we can
32:46
Speaker 3: pick on anyone.
32:47
Speaker 2: I'm sure we just don't know because Reuters hasn't gotten
32:52
Speaker 2: the document. So this stuff is awful, and quite honestly,
33:00
Speaker 2: it is everything that everyone fears about AI and the
33:04
Speaker 2: people that are somehow in charge of it. Yep, it
33:08
Speaker 2: get the users at least cost it like it sucks
33:12
Speaker 2: and I can't put it any more clearly than that.
33:15
Speaker 2: With that, let's take a quick break and when we
33:17
Speaker 2: come back, we're gonna do stack Roulette on our own.
33:22
Speaker 2: No AI included right after this Here.
33:26
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34:27
Speaker 2: Michael, what do you have for Roulette of the Stack?
34:29
Speaker 3: I want to talk about the Boston Globe story about
34:31
Speaker 3: those Boston area parents with their cool e bikes.
34:34
Speaker 2: And I've seen a few of these around.
34:36
Speaker 3: They are neat and fun, and it interviews a few
34:40
Speaker 3: people who around Cambridge are getting on their e bike.
34:44
Speaker 3: They've got a big bucket in the front where the
34:45
Speaker 3: kids sit, they pick them up at daycare, rushing back home.
34:48
Speaker 3: And I love the idea, but I feel like it
34:50
Speaker 3: was written by somebody who has not lived through a
34:53
Speaker 3: Boston winter yet, Like ditch that mini van, guys, you
34:59
Speaker 3: don't need a We've got an ee bike with a
35:01
Speaker 3: bucket on front.
35:02
Speaker 2: And I applauded.
35:06
Speaker 3: I would love to get out there for a little
35:07
Speaker 3: bit exercise and drive around need it with my kids
35:09
Speaker 3: in a little bucket safely.
35:11
Speaker 2: But I'll be honest, I'm still gonna need the minivan.
35:14
Speaker 2: As someone who like I've I've used e bikes, I
35:16
Speaker 2: think they're great. In the Northeast, where our show is based,
35:21
Speaker 2: there are four months out of the year where it's voluble,
35:24
Speaker 2: it down, wrote down, very enjoyable. For four months a year.
35:28
Speaker 2: You can use it for half of May, half of April,
35:31
Speaker 2: through half of June, and then basically like September and
35:37
Speaker 2: October and other than that. Hey, if you want right,
35:42
Speaker 2: it's either ninety two degrees yesterday with seven a due
35:46
Speaker 2: point of seventy one and no, I'm not gonna just
35:49
Speaker 2: hop on the e bike in that. Or hey, it
35:53
Speaker 2: just snowed twelve inches, get through that. Or it snowed
35:57
Speaker 2: a week ago and now is melting. Here's the Browns lush,
36:01
Speaker 2: good luck pedaling through it. Yeah, I'm just yeah.
36:05
Speaker 3: I will say I worked with somebody at Fidelity who
36:08
Speaker 3: biked in year round, and unless it was the middle
36:12
Speaker 3: of like an ice storm, he was on that bike
36:15
Speaker 3: biking in to that office. But you're saying even he
36:18
Speaker 3: had limits every day. But even even he had limits,
36:21
Speaker 3: and I would imagine if he was pushing his kids around,
36:23
Speaker 3: they would beef and wait, that's the bigger thing, is
36:26
Speaker 3: like the kids have limits that are lower than the parents.
36:29
Speaker 2: Right, Yeah, you know, I'm cold. Starts at a different
36:32
Speaker 2: temperature for a six year old than it does for
36:35
Speaker 2: a forty year old. Plus they lose their jacket every
36:37
Speaker 2: three days. Can't confirm. Uh, Kava, Chipotle and other fast
36:44
Speaker 2: casual restaurant chains are finally hit by consumer slowdowns. So
36:47
Speaker 2: a couple different theories on this. Uh, Because same store
36:50
Speaker 2: sales have been declining for the last two quarters now
36:52
Speaker 2: in basically all of these companies. The only one, and it's
36:56
Speaker 2: not even a fast casual, but the only one that's
36:58
Speaker 2: really showing like any kind of exciting growth is Chili's
37:01
Speaker 2: and that's because of some special burger deal they're doing.
37:05
Speaker 2: So I have two theories on fast casual seeing a
37:08
Speaker 2: decline in same store sales. The first theory, people are
37:13
Speaker 2: trading down to cheaper alternatives and that's causing it. McDonald's
37:19
Speaker 2: the same story of sales weren't killer Chili's though Okay, again,
37:23
Speaker 2: there's only so much Chilis that you can do. It's
37:27
Speaker 2: a theory, but the other data doesn't really support that.
37:30
Speaker 2: Here's the other one that I have that I think
37:32
Speaker 2: is interesting to me, Mike. Where are chains such as
37:36
Speaker 2: Cava and Chipotle and Sweet Green predominantly located rich suburbs
37:41
Speaker 2: and correct what is the voting pattern recently of rich
37:46
Speaker 2: suburbs and cities. It's tilted more democrat actually, And so
37:51
Speaker 2: the people that are most nervous about the economy right
37:54
Speaker 2: now are in locations that have a lot of these
37:57
Speaker 2: and they're the ones that are pulling back their bending.
38:03
Speaker 2: I know it's kind of out there, but that's yeah,
38:04
Speaker 2: we're going to ending on this. So I don't know
38:08
Speaker 2: if it's true or not, but it's it's just something
38:10
Speaker 2: that passed through my head and now I felt the
38:12
Speaker 2: need to broadcast to everyone listening. You're welcome. Let's take
38:17
Speaker 2: a quick break for the entire rest of the day.
38:18
Speaker 2: We're going to finish up the week tomorrow. We get
38:21
Speaker 2: retail sales data and we're getting consumer sentiments, so we'll
38:25
Speaker 2: have more to talk about then