Latest / The Financial Exchange Show / What matters more to the stock market? The Fed or Nvidia?

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What matters more to the stock market? The Fed or Nvidia? · The Financial Exchange Show

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Speaker 1: a donation today. This is the Financial Exchange with Chuck
1:05
Speaker 1: Zada and Paul Lane.
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Speaker 2: Chuck, Paul and Tucker with you and taking a look
1:11
Speaker 2: around markets. We've got a very small sell off taking
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Speaker 2: place today thus far. The Dow Jones Industrial Average down
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Speaker 2: one hundred and eight points about a quarter percent, the
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Speaker 2: S and P five hundred down fourteen points, about a
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Speaker 2: quarter percent, the Nasdaq Composite down thirty eight points about
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Speaker 2: a quarter percent. So just again some continued down downward
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Speaker 2: drift here, but nothing exciting in either direction. When it
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Speaker 2: comes to equities. When we take a look at the
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Speaker 2: bond market, we got again kind of a modest sell
1:43
Speaker 2: off taking place here the ten year treasury of four
1:45
Speaker 2: basis points to four point three three seven percent. Mortgage
1:51
Speaker 2: News Daily currently has the national average for thirty year
1:54
Speaker 2: fixed rate mortgages at six point sixty one. That'll probably
1:57
Speaker 2: tick up to six sixty five or somewhere in that
2:00
Speaker 2: range in response once we get the afternoon update there.
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Speaker 2: But mortgage rates continuing to hold in the mid sixes.
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Speaker 2: I you know, once you get above six and two thirds,
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Speaker 2: I guess that gets you to high sixes, but just
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Speaker 2: kind of hanging out where they've been for quite a
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Speaker 2: while at this point. When we take a look at oil,
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Speaker 2: We've got West Text Intermediate up twenty nine cents, barrel
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Speaker 2: to sixty three dollars right on the nose, and Gold
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Speaker 2: today is down a dollar seventy and ounce to thirty three,
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Speaker 2: eighty six and eighty cents. We are now going to
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Speaker 2: try to answer one of the age old questions about investing.
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Speaker 2: What matters more to the stock market? The FED or Nvidia?
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Speaker 2: And the answer is the Fed. Quite honestly, this is
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Speaker 2: not a real question. It is because this is a
2:55
Speaker 2: real piece that The New York Times published, But ultimately
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Speaker 2: it's the Fed because of J. Powell pushed the wrong
3:01
Speaker 2: button when he, you know, wakes up every six weeks.
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Speaker 2: The FED could move markets far more than in Vidia
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Speaker 2: does on a daily basis.
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Speaker 3: Could but I don't think will have as much impact
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Speaker 3: his speech on Friday versus in Video's earnings next Thursday.
3:19
Speaker 3: My view is that in Videa's earnings will be more
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Speaker 3: impactful to shifting the market because I feel that he's
3:24
Speaker 3: gonna play it down the middle.
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Speaker 2: How are we gonna measure this? Are you gonna measure
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Speaker 2: it based on performance the next day, the next week?
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Speaker 2: How do you want to approach it? So?
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Speaker 3: In Video are they a morning report.
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Speaker 2: Are they closed?
3:37
Speaker 3: Okay? So it's next Thursday, right, next Thursday. So Friday's
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Speaker 3: market moves, why.
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Speaker 2: Don't we do the three trading days after?
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Speaker 3: Oh, I was just gonna go day after immediate reaction.
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Speaker 3: First move is always wrong, but it's implying action one
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Speaker 3: way or another.
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Speaker 2: It is. But if that action subsequently gets reversed, did
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Speaker 2: anything really happen.
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Speaker 3: At the close of the day? You know what I'm saying?
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Speaker 2: Yeah, you know how many times have we seen? Like
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Speaker 2: even just go back to the jobs report a few
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Speaker 2: weeks ago that Friday SMP's down one hundred, Monday up ninety.
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Speaker 2: Why do we put two different shirts on? Why didn't
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Speaker 2: we just stay home and call it a day?
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Speaker 3: So here we're gonna go prediction here. So you're gonna
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Speaker 3: say that the Fed speech tomorrow will have more impact
4:23
Speaker 3: on I will say that an afternoon speech tour. That's
4:25
Speaker 3: a morning.
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Speaker 2: It's morning, but I'll include tomorrow if you want you
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Speaker 2: tell me, do you want me to do Friday Monday
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Speaker 2: Tuesday or Monday Tuesday, Wednesday, Friday Monday Tuesday? Okay, So
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Speaker 2: I think there will be a greater magnitude market move.
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Speaker 2: Looking at are we doing S and P five hundred
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Speaker 2: nasdak because if it's Nasdak in video is a bigger.
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Speaker 3: Chunk more fair.
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Speaker 2: Okay, I think there will be a bigger move in
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Speaker 2: either direction the three days post Powell versus three days
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Speaker 2: post and video. Let's do it, Okay, look it in
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Speaker 2: there we go, Tucker, you got that up on the board.
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Speaker 1: Yep.
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Speaker 3: Okay, it's a nice short payoff. It is.
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Speaker 2: It's it's not you know, hyperloop in ten years, which
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Speaker 2: I think we still have three more years to wait
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Speaker 2: until we can pay that off. But it's not looking
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Speaker 2: good for me.
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Speaker 3: And I'll just never come back to the show if
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Speaker 3: I'm wrong.
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Speaker 2: The uh no, we have to have you back on
5:18
Speaker 2: so we can tell you you're wrong. Nope, nope, no.
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Speaker 2: So the big thing is in Vidia obviously is the
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Speaker 2: biggest company or second biggest company in the S and
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Speaker 2: P five hundred by market cap on any given day.
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Speaker 2: Right now, it currently makes up about just under eight
5:39
Speaker 2: percent of the S and P five hundred, So it's
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Speaker 2: not uncommon for in Vidio. I still have you know,
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Speaker 2: five to six percent moves in a single day, and
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Speaker 2: it can drag along, you know, the Microsoft and Amazons
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Speaker 2: and medicine googles of the world as well. But ultimately,
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Speaker 2: all of this, in my opinion, comes back to one thing,
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Speaker 2: which is, look, what's the price of money? And that's
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Speaker 2: what Jay Powell and the gang set on a regular basis.
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Speaker 2: They tell you how expensive it is to borrow, lend
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Speaker 2: whatever you want to be doing, at least as you know,
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Speaker 2: benchmark rates and things like that. So I think, look,
6:17
Speaker 2: in the two things are true actually in the last
6:23
Speaker 2: three years, because it's really been twenty three, twenty four,
6:25
Speaker 2: and twenty five that AI has been the thing. It
6:28
Speaker 2: was late twenty two when when Chad GBRT was unveiled
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Speaker 2: to us. The first is that obviously in Nvidia has
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Speaker 2: just been on an absolute tear during that time, and it,
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Speaker 2: along with the other tech companies, has been the dominant
6:41
Speaker 2: market force out there. It's also true that if Powell
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Speaker 2: and crew screwed up now, things could have gone very differently,
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Speaker 2: you know, depending on how the economy would have moved.
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Speaker 2: So I think I continue to think there is no
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Speaker 2: force in the financial universe that has the gravity that
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Speaker 2: the FED does. In Vidia is far and away the
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Speaker 2: most powerful equity mover out there, but it still can't
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Speaker 2: move the whole market like the FED does.
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Speaker 3: My whole The reason for my prediction is that not
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Speaker 3: that the FED doesn't have the power to influence the
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Speaker 3: market more. They certainly do, but the path that they're
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Speaker 3: trending on, which is sort of this weight and see approach,
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Speaker 3: I just think in the near term they're not going
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Speaker 3: to say much that it's going to move the markets
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Speaker 3: as much as in Vidia could potentially move the markets
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Speaker 3: because all the earnings power has accreeded to in Vidia
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Speaker 3: during this AI boom period. Valuations, don't get me wrong,
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Speaker 3: have increased for other companies as a result of this,
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Speaker 3: but in Vidia is the one that's captured the majority
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Speaker 3: of the earnings PI and if there's any dent to
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Speaker 3: that story for some reason that they're not seeing as
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Speaker 3: much in terms of demand for their chips, I think
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Speaker 3: that could substantially leave a lot of AI companies in
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Speaker 3: a really bad spot from evaluations sandpoint, I don't necessarily
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Speaker 3: anticipate that next week, or conversely, if there is still
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Speaker 3: tremendous momentum there perhaps moves in the other direction, but
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Speaker 3: we shall see.
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Speaker 2: Yeah, the uh, look, if you talk about other if
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Speaker 2: you talk about the companies that actually sell the AI products,
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Speaker 2: they're not making much revenue from them right now. And
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Speaker 2: the problem with look that, the problem is not just
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Speaker 2: making much revenue, it's how do you turn that revenue
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Speaker 2: into actual profit because you're spending a ton on data
8:34
Speaker 2: center construction and at some point that's gonna end up
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Speaker 2: being untenable. It's not yet because everyone still is just
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Speaker 2: you know, filing it and saying, Okay, they're they're building it,
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Speaker 2: and you know the users will come. But there's a uh,
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Speaker 2: there's a hedge fun guy that I like to follow.
8:54
Speaker 2: He goes by his name's Kuppy. I think his full
8:56
Speaker 2: name is like Harrison Cooperman or something like that. I
8:58
Speaker 2: can't remember his, uh, his full name, but he wrote
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Speaker 2: a piece on this very topic yesterday, which is why
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Speaker 2: I think that this is kind of interesting. And here's
9:07
Speaker 2: the basic premise of it. If you look at the math,
9:09
Speaker 2: So all of the big tech companies have committed to
9:14
Speaker 2: about four hundred billion dollars in data center construction for
9:17
Speaker 2: next year. And ultimately, what you have to do with
9:23
Speaker 2: that is that that construction has a useful life to it.
9:26
Speaker 2: It's what we call depreciation. How much of it, you know,
9:28
Speaker 2: gets depreciated each year based on the estimated useful life,
9:32
Speaker 2: and it's different for the facility versus the chips versus
9:37
Speaker 2: you know, everything. And so basically he came to, okay,
9:40
Speaker 2: it's it's probably like a ten year depreciation cycle on average.
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Speaker 2: So in year one, then you've got forty billion dollars
9:47
Speaker 2: in depreciation and in order to actually generate enough profit
9:53
Speaker 2: to overcome that, okay, let's say that you do one
9:55
Speaker 2: hundred and sixty billion dollars in revenue at a twenty
9:59
Speaker 2: five percent growth margin. So now you've got forty billion
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Speaker 2: of gross margin against your depreciation. Great, okay, so you
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Speaker 2: can you know, kind of get back to break even
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Speaker 2: at that point. But ultimately that's just for one year
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Speaker 2: of construction. If you're talking about doing that over and
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Speaker 2: over and over, where are the hundreds of billions of
10:19
Speaker 2: dollars in revenue going to come from in order to
10:22
Speaker 2: get you the tens of billions of dollars in gross
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Speaker 2: profit that you need in order to cover that depreciation cost.
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Speaker 2: And he basically said, look, it's not that AI isn't
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Speaker 2: going to be used or it isn't going to be
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Speaker 2: hugely transformative, but back in the nineteen nineties and early
10:38
Speaker 2: two thousands, companies spent billions of dollars laying fiber optic
10:42
Speaker 2: networks and all this stuff. They went out of business.
10:45
Speaker 2: We still use the networks, but the companies that did
10:48
Speaker 2: all of the groundwork for that aren't there anymore. The
10:51
Speaker 2: company that he mentions is one called Global Crossing, who
10:53
Speaker 2: I'm sure some of our listeners are familiar with. And
10:56
Speaker 2: ultimately they went belly up simply because they were spending
10:59
Speaker 2: billillions of dollars and the revenue just never came again.
11:03
Speaker 2: We still no one looks at the Internet as a failure.
11:07
Speaker 2: It's a huge success, but the companies that built it
11:09
Speaker 2: weren't the ones that actually benefited from it.
11:12
Speaker 3: Yeah, just ask the web browsers out there, Alta, Vista
11:15
Speaker 3: or Yahoo like other ones out there. Not sure, not sorry,
11:18
Speaker 3: not the browsers, but the search engines of yesteryear, even
11:21
Speaker 3: some of the browsers browsers too. That was Mosaic Netscape.
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Speaker 3: They didn't ultimately accrete all the value. And I'm sure
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Speaker 3: a very similar thing will happen here with AI and
11:32
Speaker 3: it's I read a similar piece which was all these
11:35
Speaker 3: big hyperscalers, the Googles the Amazons, the Microsoft's almost a
11:40
Speaker 3: fomo effect. The fear of missing it has caused this
11:43
Speaker 3: four hundred billion dollar of spending. But that doesn't mean
11:46
Speaker 3: necessarily that all of them are going to get the
11:48
Speaker 3: return on investment from all that money, because it's a big,
11:52
Speaker 3: big hurdle to cross.
11:54
Speaker 2: So two things can be true. AI can be completely transformative,
11:58
Speaker 2: and the people that are building it right now now
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Speaker 2: might not actually be the ones who end up benefiting
12:02
Speaker 2: from it. Let's take a quick break. When we return,
12:06
Speaker 2: we'll do a little bit of trivia after this.
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Speaker 4: Another day of World War two trivia here on the
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Speaker 4: Financial Exchange. On July twenty sixth, nineteen forty five, a
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Speaker 4: US warship delivered the atomic bombs to a small island
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Speaker 4: was sunk by a Japanese submarine. So trivia question today
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Speaker 4: is what was the name of the US warship that
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Speaker 4: of the US warship that delivered the atomic bombs? And
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13:21
Speaker 4: in the movie Jaws.
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Speaker 3: Uh.
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13:45
Speaker 2: All right, Paul, we got a piece from Bloomberg. It
13:48
Speaker 2: is in their opinion section. It's from their editorial board.
13:50
Speaker 2: So the whole board got together and said, ah, we
13:52
Speaker 2: think this is a good idea to write. Uh. It's
13:55
Speaker 2: titled Americans America's Housing crisis is a job for Congress,
14:02
Speaker 2: And pretty much what it's talking about is that it's
14:04
Speaker 2: too expensive to buy homes right now. The prices are
14:06
Speaker 2: too darn high and golly g Wilkers, how do we
14:10
Speaker 2: fix this? I'll quote here. Bigger issue is the persistent
14:13
Speaker 2: lack of supply. A slow down in construction after two
14:16
Speaker 2: thousand and eight produced a short fall of nearly four
14:18
Speaker 2: million homes, and rent regulations and not in my backyard,
14:22
Speaker 2: zoning limits in cities such as San Francisco and New
14:24
Speaker 2: York have retarded needed development for years. Okay, god it,
14:27
Speaker 2: we don't have enough supply. Everyone in America understands this.
14:30
Speaker 2: I think traditionally, the help Congress is offered buyers, including
14:33
Speaker 2: subsidies and low cost loans, is spurred demand, exacerbating these
14:36
Speaker 2: supply pressures. Also true, we don't think that just giving
14:39
Speaker 2: more money to people to buy homes helps, because if
14:43
Speaker 2: you just give everyone fifty thousand dollars to buy homes, well,
14:47
Speaker 2: the sellers are just going to raise their prices by
14:49
Speaker 2: fifty thousand dollars. You haven't solved the problem.
14:52
Speaker 3: Not to mention, five to ten years from now, you're
14:53
Speaker 3: going to need to do the same thing all over.
14:55
Speaker 2: Correct, So you're not really helping anyone. Okay, great, Like
14:58
Speaker 2: we understand this with a three hundred and fifteen page
15:01
Speaker 2: renewing opportunity in the American Dream. The Road Act aims
15:06
Speaker 2: to address okay, what tell me more the Sprawling Bill,
15:10
Speaker 2: which recently received unanimous backing from the Senate Banking Committee,
15:12
Speaker 2: which slash more of the regulations that impede home building
15:15
Speaker 2: in the US, such as environmental reviews for some federally
15:18
Speaker 2: funded housing construction. It would also eliminate the absurd requirement
15:22
Speaker 2: that manufactured homes be mounted permanently on a fixed chassis,
15:25
Speaker 2: which adds unnecessary costs and limits design flexibility. Okay, I
15:33
Speaker 2: don't know that that's, you know, a huge thing, given
15:35
Speaker 2: that most you know, housing is not federally funded and
15:39
Speaker 2: most homes that are. You know, I don't know that
15:43
Speaker 2: there's this huge demand for manufactured homes. But it's neither
15:46
Speaker 2: here nor there. Let's let's keep going. It also rewards
15:48
Speaker 2: communities for taking risks to build. Those that demonstrate a
15:52
Speaker 2: track record of accelerating housing development would receive larger federal
15:56
Speaker 2: block grants, such as a two hundred million dollars innovation fund.
15:59
Speaker 2: Directly did it local governments. So here's the thing is,
16:08
Speaker 2: are shows based out of the Northeast probably one of
16:11
Speaker 2: the worst markets for buyers in terms of affordability in
16:15
Speaker 2: the country, if not the world fair. And I'm convinced
16:21
Speaker 2: at this point that if Americans actually wanted to build
16:27
Speaker 2: more houses in their communities, they would build more houses
16:31
Speaker 2: in their communities. I've seen in Massachusetts things like the
16:34
Speaker 2: NBTA Communities Act, which forces communities to build certain levels
16:40
Speaker 2: of housing in and around areas that are close to
16:45
Speaker 2: mass transit, and the local communities have almost unanimously pushed
16:49
Speaker 2: back on this and said, no, we don't want more building.
16:52
Speaker 2: And so I don't think simply throwing more money at
16:56
Speaker 2: the problem in terms of, well, if you, you know,
16:58
Speaker 2: build more rapidly, you'll get more federal funding. I'm just
17:02
Speaker 2: not sure that that gets there, because it's not about money.
17:06
Speaker 2: It's about people saying they don't want more development. And
17:11
Speaker 2: I don't know how to change that other than convincing
17:14
Speaker 2: people that more development is, you know, in the in
17:19
Speaker 2: the aggregate, good for the economy and good for them too.
17:23
Speaker 3: Not to mention, the local zoning laws in different communities
17:28
Speaker 3: all across the country are so they differ so greatly
17:32
Speaker 3: that any change on the federal level isn't going to
17:34
Speaker 3: negate the voting down of the NBTA communities acts as
17:38
Speaker 3: an example, or whatever provision may be out there in
17:41
Speaker 3: other states across the country. It's valiant to be at
17:45
Speaker 3: least thinking about trying to solve this problem. But to me,
17:49
Speaker 3: it's it's I disagree with the title of the article
17:52
Speaker 3: that it is a job for Congress. Unfortunately it's not.
17:55
Speaker 3: I mean, the levers that they can can control loosely,
17:58
Speaker 3: are some of the interest rates side of things, not
18:01
Speaker 3: on the longer end of the curve. Obviously that to me,
18:04
Speaker 3: maybe that makes the economics a little bit better, But
18:06
Speaker 3: ultimately it comes down to local communities approving zoning or
18:11
Speaker 3: deregulating some of the zoning requirements to allow for more
18:14
Speaker 3: building to curve. But many communities take the NIMBI approach
18:17
Speaker 3: of not in my backyard.
18:19
Speaker 2: And again, this doesn't have to be a one size
18:23
Speaker 2: fits all approach. There are plenty of communities that say, look,
18:26
Speaker 2: we don't want any big, you know, high rises or
18:29
Speaker 2: even you know, mid rises. We don't want you know,
18:31
Speaker 2: the five story condo building. It's fine, but can we
18:35
Speaker 2: make it easier to allow for duplexes or triplexes? So
18:39
Speaker 2: that on each parcel of land you're getting two units
18:41
Speaker 2: of housing or three instead of just one. Like, those
18:44
Speaker 2: are things that don't change the overall feel of a community,
18:48
Speaker 2: but can still add additional housing. Can you change local
18:51
Speaker 2: regulations to make it so these ad us the accessory
18:56
Speaker 2: dwelling units, is that what it is?
18:57
Speaker 3: Yep?
18:57
Speaker 2: So that you can have those more easily, you know, built,
19:00
Speaker 2: because hey, it's on your own land, and if you
19:02
Speaker 2: want to put something in your backyard, why should your
19:07
Speaker 2: neighbor have to say it's cool with them? Like, I
19:11
Speaker 2: think that we need to figure out ways to make
19:13
Speaker 2: it easier to build, But I'm not convinced this is
19:18
Speaker 2: the answer, because it has to happen at a local level.
19:21
Speaker 2: We've even seen again in Massachusetts state laws you know
19:25
Speaker 2: about this stuff get pushed back, and that's coming from
19:26
Speaker 2: a much closer place than you know, a big federal
19:29
Speaker 2: overarching legislation. Let's take a quick break here. When we
19:32
Speaker 2: come back, Trivia answer in Wall Street.
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Speaker 4: Seeing a small pullback on Wall Street as traders digest
20:03
Speaker 4: significant retailer earnings from Walmart in a way fed Chairman
20:07
Speaker 4: Jerome Poll's speech in Jackson Hole tomorrow morning. Right now,
20:12
Speaker 4: the Dow is off by two tenths of one percent
20:15
Speaker 4: or one hundred and three points. SMP five hundred is
20:18
Speaker 4: down by only nine points, about a tenth of a percent.
20:22
Speaker 4: NASDAK down a tenth of a percent as well, or
20:24
Speaker 4: twenty four points lower. Russell two thousands off by a
20:27
Speaker 4: tenth of a percent as well. Ten year Treasure reeled
20:29
Speaker 4: up four basis points, is now at four point three
20:33
Speaker 4: three nine percent, and crude oil up about half a
20:37
Speaker 4: percent higher, trading at sixty three dollars a barrel. Walmart
20:41
Speaker 4: reported rapid sales growth in the second quarter and raised
20:44
Speaker 4: its outlook, saying it is winning over shoppers with grocery
20:48
Speaker 4: discounts in fast shipping. However, the retail giant missed earnings
20:52
Speaker 4: expectations on an adjusted basis, sending shares four percent lower
20:57
Speaker 4: on the day. Meanwhile, according to the Wallstree Journal, Meta
21:00
Speaker 4: has frozen hiring in its Ai division after spending months
21:04
Speaker 4: scooping up researchers and engineers. Shares in the Facebook parent
21:08
Speaker 4: company are down about one percent. Speaking of hiring freezes,
21:12
Speaker 4: Nova nor Disk announced to hiring freeze and non critical
21:15
Speaker 4: areas as it looks to fend off competition and control costs.
21:20
Speaker 4: Shares in the Ozepic and we Govie Maker up over
21:23
Speaker 4: two percent now. Meanwhile, beauty and sense company Cody seeing
21:27
Speaker 4: its stock plunge twenty percent after it posted an unexpected
21:31
Speaker 4: quarterly net loss. Cracker Barrel sinking over twelve percent after
21:35
Speaker 4: the restaurant and gift shop chain unveiled to update logo earlier.
21:39
Speaker 4: That's week this week that's drawing criticism on social media,
21:43
Speaker 4: and beginning today in four hundred stores, Starbucks will expand
21:47
Speaker 4: its test of coconut water beverages to hundreds of more
21:50
Speaker 4: stores as it leans further into health and wellness with
21:55
Speaker 4: its Coco Macha and Coco Cold Brew drinks. Our Buck
22:00
Speaker 4: shares they are down by one percent on that news.
22:04
Speaker 4: I'm Tucker Silva and that is Wall Street Watch. And
22:07
Speaker 4: in the previous segment, we asked you the trivia question,
22:11
Speaker 4: what was the name of the US warship that delivered
22:13
Speaker 4: the atomic bombs. That would be the USS Indianapolis. David
22:18
Speaker 4: and Edgar Towners our winner today taking home the Financial
22:21
Speaker 4: Exchange Show T shirt. Congrats to David and we played
22:24
Speaker 4: trivia every day here in the Financial Exchange. See complete
22:26
Speaker 4: contest rules at Financial Exchange Show dot com.
22:30
Speaker 2: Peace here from Barons that I think is just a
22:36
Speaker 2: fantastic one. Quite honestly, some retirees are too frugal. Tips
22:41
Speaker 2: to help them loosen their purse strings and enjoy life.
22:43
Speaker 2: And this, I think is something that I see quite often.
22:46
Speaker 2: Which is the biggest concern that you hear from retirees
22:51
Speaker 2: is I don't want to outlive my money. I don't
22:54
Speaker 2: think we hear nearly enough. I don't want my money
22:56
Speaker 2: to outlive me. And I don't mean that you want
22:59
Speaker 2: the last check to because none of us know exactly
23:02
Speaker 2: when we're gonna die. And if you know, you live
23:04
Speaker 2: one more day and then hey, I needed one more check,
23:06
Speaker 2: but the second to last check bounce. Now you're kind
23:09
Speaker 2: of in a pretty dodgy spot. But I think ultimately
23:14
Speaker 2: that the things that I come back to are twofold.
23:18
Speaker 2: The first is a lot of people stick to this
23:21
Speaker 2: idea of the four percent rule and The four percent rule,
23:24
Speaker 2: you have to remember, is built for a thirty year retirement,
23:28
Speaker 2: and as you get older, the odds of you having
23:31
Speaker 2: another thirty year retirement go down. We don't have many
23:34
Speaker 2: hundred and twenty year olds out there these days, So
23:37
Speaker 2: if you're sticking to a four percent withdrawal rated age ninety,
23:39
Speaker 2: you're probably doing yourself a disservice. Now you might say, hey,
23:44
Speaker 2: that's great, but I don't need to spend more than this,
23:46
Speaker 2: in which case I start to, you know, talk about
23:48
Speaker 2: ideas such as, Okay, have you considered gifting either to
23:51
Speaker 2: family or friends? Have you considered increasing charitable gifting so
23:56
Speaker 2: that you can see, you know, improvements in the causes
23:58
Speaker 2: that you believe in during the course of your life.
24:01
Speaker 2: Because ultimately, if you're going to have more money left
24:04
Speaker 2: when you die than you would like to see at
24:07
Speaker 2: that time, then you haven't really maximized the value of
24:11
Speaker 2: the money that you've earned. You've just kind of transferred
24:13
Speaker 2: that to someone later. Which I'm not saying don't do that,
24:17
Speaker 2: but if that's not your intention, then don't do that.
24:20
Speaker 3: This is by far the best article that covers what
24:24
Speaker 3: we do on a day to day basis Chuck. It
24:26
Speaker 3: really hits home well because so much time that you
24:30
Speaker 3: and I spend on a day to day basis is
24:33
Speaker 3: right around the same subject that many clients that we
24:36
Speaker 3: work with just don't feel comfortable given the green light
24:40
Speaker 3: to spend. And that's why we continually get together with
24:42
Speaker 3: them every six months or every year to plan so
24:47
Speaker 3: that they can understand, here's what you can spend up
24:49
Speaker 3: to define the ceiling. There are so many of us
24:51
Speaker 3: who's ingrained in them save it's very hard psychologically for
24:56
Speaker 3: people to turn on the spigot and go from savings
24:59
Speaker 3: mo which was a thirty to thirty five year horizon,
25:03
Speaker 3: into the distribution phase of life. And so that's a
25:06
Speaker 3: lot of the work that we do and enjoy doing
25:08
Speaker 3: with the clients is appropriately finding the level to spend
25:11
Speaker 3: on stuff that they're going to enjoy. It's not my
25:14
Speaker 3: job to sit there and tell you what provides you fulfillment.
25:17
Speaker 3: That's for the client to figure out. But ultimately that
25:20
Speaker 3: planning aspect is huge.
25:21
Speaker 2: And I think you know, again, every person has their
25:28
Speaker 2: own relationship with money and their own thoughts about, you know,
25:31
Speaker 2: how they think it needs to work. There's no right
25:34
Speaker 2: or wrong way to do it. But I do think
25:37
Speaker 2: you have to come at it with, you know, some
25:38
Speaker 2: kind of intention in terms of this is what I'm
25:41
Speaker 2: trying to do, and not just stick with a general
25:45
Speaker 2: rule because that might end up with you drifting further
25:47
Speaker 2: from your goal than you think. If you've got five
25:50
Speaker 2: hundred thousand dollars and you're like, Okay, I'm cool, you
25:54
Speaker 2: know leaving you know this much to my kids, but
25:56
Speaker 2: I don't want to leave more. And ten years later
25:58
Speaker 2: you're sitting there going, gee, a million dollars. What do
26:01
Speaker 2: I do now? The answer is, Okay, you've got to
26:03
Speaker 2: change your plan. Don't just keep doing what you're doing,
26:06
Speaker 2: because you're gonna have a bigger chunk that you're leaving.
26:09
Speaker 2: Then you think, now, I'm not saying that's a bad thing,
26:13
Speaker 2: but hey, again, could you be giving that to your
26:15
Speaker 2: kids during your lifetime so they can see improvements, you know,
26:19
Speaker 2: during you know, while you're actually able there to you know,
26:22
Speaker 2: help them enjoy it. Is it something where there's been
26:25
Speaker 2: stuff that you've been putting off that you want to
26:28
Speaker 2: do that you say, oh, well, I don't know if
26:29
Speaker 2: I have the money to Hey, maybe you do then,
26:32
Speaker 2: And so if these are questions that you have. You know, hey,
26:36
Speaker 2: how much can I actually spend in retirement in order
26:39
Speaker 2: to get the retirement that I want and enjoy it
26:42
Speaker 2: the way that I want to. These are questions that
26:44
Speaker 2: the Armstrong Advisory Group can help you with because again,
26:49
Speaker 2: retiring too early. I know that that's a lot of
26:51
Speaker 2: people's fears. But what if you retire too late and
26:53
Speaker 2: you don't get to enjoy as much time as you'd
26:56
Speaker 2: like to. The Armstrong Advisory Group has offices all throughout
27:00
Speaker 2: New England and to call and set up an appointment
27:02
Speaker 2: with one of our advisors, call eight hundred three nine
27:05
Speaker 2: three four zero zero one. That number again is eight
27:10
Speaker 2: hundred three nine three for zero zero one.
27:14
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:17
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:19
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
27:22
Speaker 1: your own financial tax into state planning advisors before making
27:25
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
27:28
Speaker 1: advisory services.
27:31
Speaker 2: This next one is uh honestly a whole bunch of
27:36
Speaker 2: suck CME teams with Fan Duel to launch betting on
27:39
Speaker 2: financial markets, and we talked about this yesterday that look,
27:42
Speaker 2: you know, all of us do you know, dumb investing
27:44
Speaker 2: things in our twenties. And I understand that, but ultimately
27:47
Speaker 2: there's a reason why you probably don't want to be
27:50
Speaker 2: able to do a parlay of how many homers is
27:53
Speaker 2: Aaron Judge going to hit today? With how much is
27:56
Speaker 2: Nvidia's stock going to move today? And and you know,
28:00
Speaker 2: will the result of the Diddy trial be released today?
28:05
Speaker 2: Like you don't want to have all of these things
28:07
Speaker 2: in one place because they're fundamentally different things. And there's
28:12
Speaker 2: a reason why we've generally regulated betting markets and financial markets,
28:17
Speaker 2: and it's because when we don't, people lose all of
28:20
Speaker 2: their money with leverage. I mean, let's call a spade
28:24
Speaker 2: a spade, that's what it is. The reason why we
28:26
Speaker 2: have regulation in financial markets is because people borrow too
28:31
Speaker 2: much and blow themselves up. And when you start mixing
28:35
Speaker 2: gambling and investing, you can really, you know, get into
28:40
Speaker 2: some pretty dodgy places pretty quickly. And I think that
28:44
Speaker 2: this is just a whole bunch of suck quite honestly.
28:48
Speaker 3: It it is incredible how prevalent this is becoming. We
28:52
Speaker 3: talked about what was it, Robin Hood offering the predictions
28:55
Speaker 3: markets earlier this week and on sports, Yeah, basically pivoting away,
29:03
Speaker 3: not pivoting, but also in addition to the financial markets
29:05
Speaker 3: exposure that they have adding in sports gambling and the
29:08
Speaker 3: same thing here on the other end of things. And
29:11
Speaker 3: what I was coming back to is, you know, predictions
29:14
Speaker 3: are something that are fun that you and I might
29:16
Speaker 3: do to throw up on the board, but there's no
29:18
Speaker 3: monetary value behind it. Yeah, I might get made fun
29:21
Speaker 3: of if Nvidia doesn't move the markets next week or
29:24
Speaker 3: vice versa, but there's no monetary commitment, and they're just
29:28
Speaker 3: blurring the lines a lot on that. I just find
29:31
Speaker 3: it hard to believe that a prediction is int a
29:33
Speaker 3: prediction if you're in robinhood and giving a certain amount
29:36
Speaker 3: of money towards it. And similarly here, it does seem
29:41
Speaker 3: like these two entities should be separate. Nothing against legalized gambling.
29:46
Speaker 3: That's fine for people who want to do it as entertainment,
29:49
Speaker 3: but when you get into some of these other markets
29:51
Speaker 3: out there, I just don't know if that is necessarily
29:54
Speaker 3: the way to go.
29:56
Speaker 2: Look, there's a reason why if you are trying to
30:01
Speaker 2: trade stock options, your broker requires you to sign a
30:04
Speaker 2: completely separate form in order to do so. It's because
30:07
Speaker 2: it's a huge high level of risk that you're taking on.
30:10
Speaker 2: And this is basically it's basically the equivalent of being
30:14
Speaker 2: able to trade options on FanDuel. It's pretty darn close.
30:19
Speaker 2: And given what I'm already seeing from men in their
30:23
Speaker 2: twenties in the amount of gambling debt that I'm seeing
30:26
Speaker 2: them taking on, I think this is a horrible thing
30:29
Speaker 2: that is going to result in no good at the
30:32
Speaker 2: societal level. Now you can say, okay, like everyone should
30:35
Speaker 2: be free to do whatever they want. Okay, why don't
30:38
Speaker 2: I drive on the left side of the road? You know,
30:40
Speaker 2: Like there's reasons why we still have some rules. Is
30:42
Speaker 2: because it gets dangerous to do certain things. When you know,
30:46
Speaker 2: people start just saying, ah, screw it, you know, like
30:49
Speaker 2: why can't I drive with my feet on the steering wheel?
30:51
Speaker 2: Like okay, Like no, we're gonna take your license. Likewise,
30:56
Speaker 2: when we start talking about mixing sports gambling with effectively
31:02
Speaker 2: futures contracts slash options contracts on financial markets, yeah, I
31:07
Speaker 2: don't see this be Like here's the positive. Fandel's gonna
31:12
Speaker 2: get a bunch of extra commissions come in their way.
31:16
Speaker 2: Other than that, you're gonna lose, right like you being
31:20
Speaker 2: us in the aggregation, the house always wins. The real
31:23
Speaker 2: money is in the flow, not in the price. So yeah,
31:28
Speaker 2: I don't think we should have sports gambling apps to
31:31
Speaker 2: begin with. You should have to walk into a casino
31:33
Speaker 2: and place your bet, and whatever this is shouldn't exist
31:36
Speaker 2: either cause I don't know. Now you're betting on the
31:40
Speaker 2: s and P five hundred on fandel. What are we here.
31:44
Speaker 2: Let's take a quick break and when we return, we're
31:47
Speaker 2: gonna have stack roulette, because that's what we do on
31:50
Speaker 2: the Financial Exchange.
31:51
Speaker 1: The Financial Exchange streams live on YouTube. Like our page
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32:25
Speaker 4: This segment of The Financial Exchange brought to you a
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32:54
Speaker 2: Paul, what you got for stack Robot Chuck.
32:57
Speaker 3: Landlines are making a comeback. Yeah, yes, you heard that right,
33:01
Speaker 3: even though AT and T tried to stop servicing landlines
33:04
Speaker 3: in California last year and they're largely considered obsolete. Do
33:08
Speaker 3: you have a landline in your house?
33:10
Speaker 1: Check?
33:11
Speaker 3: No, I have it just because of the security system.
33:13
Speaker 3: But I couldn't even tell you.
33:15
Speaker 2: That the security system.
33:17
Speaker 3: Yeah yeah, my wife is a paranoid wreck. But I digress.
33:22
Speaker 3: What the company tin Can is trying to do is
33:27
Speaker 3: put together for younger kids out there, the old school
33:31
Speaker 3: nineteen eighties courted phones system that will allow for kids
33:36
Speaker 3: who aren't old enough to have a cell phone yet
33:39
Speaker 3: to be able to call to their other friends using
33:42
Speaker 3: a five digit code. They're going to expand it out
33:44
Speaker 3: to standard phone numbers later, but now they have these
33:48
Speaker 3: tin Can phones which retail for seventy five bucks, that
33:50
Speaker 3: are similar to the nineteen eighties design for a different
33:54
Speaker 3: way for younger kids to communicate. And the reason I
33:57
Speaker 3: cover the story is it is something that I do
33:59
Speaker 3: think about a lot. I've kids that aren't at that
34:01
Speaker 3: age yet, but I absolutely know in talking with clients
34:04
Speaker 3: it's like Pandora's box, giving them a smartphone and trying
34:08
Speaker 3: to find some way to slow down that transition as
34:11
Speaker 3: much as possible, which is probably gonna be tough to
34:13
Speaker 3: fight with all the kids in their class getting them
34:16
Speaker 3: at an early age. It's something that I think about
34:18
Speaker 3: often because there's a lot of stuff you can get
34:22
Speaker 3: into once you give a kid a smartphone.
34:25
Speaker 2: I think this is awesome, yeah, quite honestly, and I
34:28
Speaker 2: think that you're starting to see a lot of positive
34:30
Speaker 2: movement towards Hey, we want to enable kids to communicate
34:36
Speaker 2: and use technology, but not just be stuck on their
34:39
Speaker 2: phone or tablet all day. I know that Massachusetts is
34:43
Speaker 2: in the process of voting on a bill that would
34:46
Speaker 2: ban cell phones in schools beginning in the excess. I
34:49
Speaker 2: believe past one Texas, I think past one. So like
34:52
Speaker 2: I think we're finally like waking up and being like, hey,
34:55
Speaker 2: this stuff is kind of bad for kids. Maybe we
34:57
Speaker 2: shouldn't just allow them to be on it all day
34:59
Speaker 2: every And by the way, I say this is someone
35:01
Speaker 2: who by the time I was in seventh or eighth grade,
35:04
Speaker 2: I was playing a couple hours of video games a day.
35:06
Speaker 2: But there's a difference because it wasn't something. And again
35:11
Speaker 2: I keep coming back to this. I couldn't just reach
35:13
Speaker 2: into my pocket during class and play video games. I
35:17
Speaker 2: had to get home, I had to finish my homework
35:19
Speaker 2: and then I could hang out and play some video
35:21
Speaker 2: games and you know, play a bunch of counter Strike
35:23
Speaker 2: and you know, do whatever I did with my friends
35:25
Speaker 2: for a couple hours. And you know, it was great
35:28
Speaker 2: when you're just on it all day. Especially with how
35:31
Speaker 2: social media is now, it's pretty clearly bad. And I
35:34
Speaker 2: think that anything that's getting people more communication but fewer
35:37
Speaker 2: screens is great.
35:39
Speaker 3: And the ugrooms have got so much more sophisticated that
35:41
Speaker 3: they almost are quite literally addictive. Not to say that
35:44
Speaker 3: we didn't pay play our fair share of video games
35:46
Speaker 3: or I was on instant Messenger a ton as a kid.
35:49
Speaker 3: But now these things are more sophisticated desire to literally
35:52
Speaker 3: have kids hooks, so it's a different ballgame.
35:55
Speaker 2: I want to talk about this piece from Yahoo Tech,
35:57
Speaker 2: Google's new AI powered flight tool,