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Money Monday with Brian James · Brian Thomas

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Speaker 1: Cincinnati and iHeartRadio station guaranteed Human fifty five krc D
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Speaker 1: talk station.
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Speaker 2: I heard radio.
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Speaker 1: It's eight o five, a fifty five KRCD talk station.
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Speaker 1: Brian Thomas wishing everyone a very happy Monday. It being
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Speaker 1: eight oh five on a Monday, it's time to talk
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Speaker 1: about another Brian Brian James. Monday Monday's Brian James. Thanks
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Speaker 1: to you all. We're finance for loading them out for
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Speaker 1: a little while. Get a few segments with them talking
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Speaker 1: about money matters. Welcome back, Brian, and happy Monday to you, sir.
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Speaker 1: Right back at you.
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Speaker 2: Too many Mondays, too many Brian's this morning.
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Speaker 1: I think that's okay. We have some interesting developments. Talk
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Speaker 1: about you know the market. Hey, the market's all fired up.
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Speaker 1: Looks like got a deal. We're gonna sign it on Friday.
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Speaker 1: I don't know what the deal says. I've scoured the
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Speaker 1: internet far and wide for every news site, from conservative
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Speaker 1: to ultraliberal Brian and I can't find any details of
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Speaker 1: the agreement we're allegedly entering into the Iranians and everywhere
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Speaker 1: it's posted talking about this deal, it says neither side
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Speaker 1: provided a specific big list of agreed upon details, and
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Speaker 1: I think what we do know is we will have
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Speaker 1: to negotiate over the next sixty days, what it will
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Speaker 1: mean for the nuclear dust or nuclear fuel there, whether
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Speaker 1: or not Iran's can negotiate a well, gonna be able
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Speaker 1: to acquire a weapon at some point, the opening of
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Speaker 1: the Straight of Horror moves and the release of the
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Speaker 1: ports so the Iranians can get chips in and out,
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Speaker 1: whether or not we'll be paying money, and what we're
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Speaker 1: gonna do with Israel and Lebanon, because that seems to
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Speaker 1: be part of the agreement in so far as the
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Speaker 1: Iranians are reporting, but I'm not sure the Israelis and
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Speaker 1: Hasbala have any interest in what the hell anybody does anyway,
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Speaker 1: Market's happy about it, right.
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Speaker 3: Well, you know, as Nancy Pelosi famously once said, we
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Speaker 3: got to sign it so that we can see what's
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Speaker 3: in it.
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Speaker 2: That's it. So that yeah, exactly right. What could go
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Speaker 2: wrong now? And we've been we've been through this before.
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Speaker 3: This is of course a new headlines by tweet, and
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Speaker 3: that's what the market's reacting to.
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Speaker 2: This has not been signed. Let's start with that point.
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Speaker 3: There is there is apparently some kind of tentative agreement,
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Speaker 3: but as you just said, nobody really knows what the
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Speaker 3: agreement is. Those are unimportant details. We don't need to
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Speaker 3: get to that yet. The signing ceremony is supposed to
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Speaker 3: be this Friday of the nineteenth. There are some things
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Speaker 3: out there that have yet to be ironed out, and
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Speaker 3: now a lot of that to to for the for
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Speaker 3: you and I and the rest of the listening public.
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Speaker 2: We're not going to be privy to the bullets for
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Speaker 2: probably quite a while yet.
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Speaker 3: There are some details supposedly that aren't out there yet,
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Speaker 3: and so that's going to be ironed out this week.
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Speaker 2: Hopefully this holds what we've been through this before.
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Speaker 3: You know, President Trump does tend to like to move
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Speaker 3: the market and there's no consequences apparently when he does.
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Speaker 3: And so that's the announcement that was made on Friday,
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Speaker 3: And of course, as you might suspect, everything's through the roof.
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Speaker 2: Oil futures are down five percent.
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Speaker 1: We like that.
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Speaker 3: Yeah, The markets are up one to two percent, depending
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Speaker 3: on the flavor you're looking at. So, you know, so
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Speaker 3: far a positive reaction, which is fairly predictable.
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Speaker 2: Right.
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Speaker 3: The market absolutely hates uncertainty. It can take conflict, It
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Speaker 3: can handle chaos, but it's when we don't know what's
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Speaker 3: going to happen and when it's going to happen. That's
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Speaker 3: what the market hates and that's why it drifts sometimes.
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Speaker 1: Well you don't have to make an observation, but you know,
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Speaker 1: the market, I guess loves to manipulate the market, and
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Speaker 1: the market listens to what he says. I guess, considering
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Speaker 1: the collective of many, not all intellectual at least so
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Speaker 1: far as financial markets are concerned. Giants people who are
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Speaker 1: in the know. Are they that stupid that they would
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Speaker 1: listen to something he says and just act on it
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Speaker 1: or not act on it, or is there something really
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Speaker 1: behind the markets actually following those positive comments? I guess
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Speaker 1: you know, if somebody told me something I didn't believe it,
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Speaker 1: I certainly wouldn't listen to it. So how is it
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Speaker 1: that Donald Trump has any sway on the markets or
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Speaker 1: are the markets actually believing what he has to say?
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Speaker 1: Because I mean, this is four months We've been at this,
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Speaker 1: Brian James, and I've heard these types of comments before.
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Speaker 1: You know, it's going to be settled this week. We'll
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Speaker 1: have it done in a couple of weeks, right, you
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Speaker 1: were sitting down at the table with him. Theolrodians really
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Speaker 1: want to negotiate. Then we find out the hardliners and
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Speaker 1: around I'm like, what the hell you talking about? Bomb here,
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Speaker 1: bomb there? I can't make heads or tails out of it, Brian,
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Speaker 1: So that the markets, all of them, all spoke at
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Speaker 1: these big brokerage houses, and it could equate that to
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Speaker 1: a real positive influence on a market that so many
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Speaker 1: people trade in. That just says something, doesn't it.
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Speaker 3: Well, I think what it says is that everything is
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Speaker 3: treated speculatively anymore.
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Speaker 2: Right, That's all we care about is what's the market
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Speaker 2: going to do? Right now?
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Speaker 3: Gone are the days of Peter Lynch buy what you know?
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Speaker 3: Remember that book he wrote that said with the big
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Speaker 3: story in that Well, my wife was buying yeah, pe ratios,
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Speaker 3: my wife was buying pantyhose in these plastic eggs, and
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Speaker 3: therefore I decided that was a good investment. Well, we
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Speaker 3: don't think that way anymore. We simply look for what
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Speaker 3: the initial what's the immediate reaction going to be. I
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Speaker 3: only really want to benefit from that immediate reaction because
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Speaker 3: I want to make a bazillion dollars. Look at SpaceX,
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Speaker 3: right you're not going to talk about a little later
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Speaker 3: this morning. But SpaceX, of course came out and in
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Speaker 3: made Eland Musk a trillionaire. It didn't make any of
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Speaker 3: the initial buyers a trillionaire because it only really went
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Speaker 3: up ten percent from about the time that you could
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Speaker 3: officially buy it as an individual online. But that's enough
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Speaker 3: for that many people to go throw money at it
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Speaker 3: because that's what we want.
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Speaker 1: We want that instant hit ten percent year over year
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Speaker 1: over that's better than you normally get in a long
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Speaker 1: term you know, financial planning kind of eight percent on
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Speaker 1: average historical record. So I'd say a ten percent HiT's
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Speaker 1: pretty damn good. And if you had enough money to
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Speaker 1: throw at it and you got ten percent return, I
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Speaker 1: can imagine you could at least accumulate millions of dollars.
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Speaker 1: Who among us has that kind of jack to throw
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Speaker 1: it a stock?
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Speaker 2: Though?
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Speaker 3: And the point I would make to that is that
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Speaker 3: if that's how you run your money, then you probably
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Speaker 3: don't have that much money. If you're trying to swing
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Speaker 3: for the fences with every last move, you know, I
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Speaker 3: look at you even the the right now, the place
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Speaker 3: to have been all year long, you could have gotten
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Speaker 3: to your point you could have gotten double that plus
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Speaker 3: more since the beginning of the year just investing in
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Speaker 3: emerging markets indexes. Right, I'm not poopooing SpaceX. That's and
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Speaker 3: I'm dragging us into that segment before we're there. But
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Speaker 3: my only point is that that the reason the market
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Speaker 3: reacts so quickly to this is because that's what we're after.
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Speaker 3: Everything is speculative. What's it going to do before breakfast?
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Speaker 3: What's it going to do right around lunch? What's it
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Speaker 3: going to do by the end of the day. Not
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Speaker 3: are these goods and products and services that they sell?
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Speaker 3: Is this something that can be productive over the long haul?
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Speaker 3: That's what the market looks for now. So everything speculation.
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Speaker 1: So am I to understand after all this and my
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Speaker 1: sort of comedic reference of price earnings ratios, which apparently
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Speaker 1: nobody looks at it anymore. It used to be a
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Speaker 1: guiding principle investing in suck. We now evaluation, right, I know.
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Speaker 1: So we now essentially lived in an immediate gratification meme
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Speaker 1: stock thing where you take a quick hit and then
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Speaker 1: dump real quick and move on with our lives.
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Speaker 3: Yeah, I mean, I really think over the long haul,
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Speaker 3: these are real companies behind this, But Elon Musk is
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Speaker 3: obviously not stupid. He knows how the market's going to react.
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Speaker 3: He knew very well that he could push it to
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Speaker 3: do what it did and push him over that trillionaire mark.
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Speaker 3: So now he gets to have that notch in his
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Speaker 3: in his belt. But yeah, I mean this is we
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Speaker 3: are a We don't deal well with delayed gratification anymore.
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Speaker 3: We want our bazilions and we want them right now.
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Speaker 3: And again that's why the IPO went on off the
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Speaker 3: way it did, because we just have this endless drive
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Speaker 3: to make a bazillion dollars tomorrow. So I didn't hear
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Speaker 3: a whole lot of buzz, you know it did, truthfully,
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Speaker 3: I mean my phone was not ringing off the hook
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Speaker 3: with people finding out that they really it's not that
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Speaker 3: easy to get into these IPOs and you're going to
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Speaker 3: have to jump through some hoops and you might not
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Speaker 3: get exactly what you what you wanted to and that
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Speaker 3: kind of thing.
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Speaker 2: So it does it seems a little different this time around.
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Speaker 3: Then it was when the first Internet boom about twenty
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Speaker 3: five thirty years ago, when I started in this industry,
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Speaker 3: that was everybody learned what an IPO was and how
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Speaker 3: it worked, and that it's not something that you just
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Speaker 3: walk to your corner store and get a hold of.
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Speaker 3: This one was a little bit more available than those
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Speaker 3: in the past, but well, I didn't hear the same
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Speaker 3: buzz about them clients.
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Speaker 1: As you mentioned. We can bring that down a little
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Speaker 1: bit more in the next segment. I guess the bright
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Speaker 1: spot and this has been happening in advance of the
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Speaker 1: announcement over the weekend that they had reached this tentative,
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Speaker 1: you know, memorandum of agreement. Let's assume all that goes
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Speaker 1: forward and they will sit down at the table for
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Speaker 1: the next couple of months and try to hammer everything out. Great,
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Speaker 1: but the price of oils you pointed out the out
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Speaker 1: sis drop five percent, traded about what eighty two bucks
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Speaker 1: a barrel for Brent, And that's good, but we have
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Speaker 1: already been enjoying a lowering of gas prices. I mean this,
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Speaker 1: the drip and the dropping gas has preceded this announcement
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Speaker 1: by some weeks. Not dramatic drops, but at least we've
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Speaker 1: got the advantage of a cheaper gasoline. Is there something
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Speaker 1: behind that independent of whatever progress we're making with the Iranians?
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Speaker 3: Again, pure speculation. The market felt like, and give you're right.
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Speaker 3: The market has been pricing this in for a while
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Speaker 3: and it kind of makes logical sense. Right, We're not
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Speaker 3: going to stay in this war forever. There is a
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Speaker 3: midterm election, so there's just no reason that any administration
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Speaker 3: is going to continue dragging a country through an unpopular
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Speaker 3: war within a while facing an election. So at some
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Speaker 3: point the market knows that this was going to unwind,
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Speaker 3: and so it began to speculate. Now we've had some
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Speaker 3: bounces and oil prices over the past several months since
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Speaker 3: the war began. That's the market giving as headfakes. It
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Speaker 3: always wants to try to anticipate what's coming next. It's
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Speaker 3: not always right. Eventually it will be now, just because
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Speaker 3: we're talking about this here here on Monday the fifteenth,
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Speaker 3: four days before this thing supposedly gets signed, who knows, Brian,
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Speaker 3: we can see that same bounce again if something goes
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Speaker 3: sideways and we decide we're going to back away.
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Speaker 2: From the table. This is not done yet, but right
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Speaker 2: now we're in a good mood of that.
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Speaker 1: And if I was a betting man, Brian James, I'm
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Speaker 1: sorry to be a little jaded and cynical about this
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Speaker 1: actually hammer it working out. But I feel like we've
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Speaker 1: been down this road many many times over the last
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Speaker 1: four months. I'm praying that it does. That's not me
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Speaker 1: thinking I want a war to continue, but we just
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Speaker 1: seem to have been miles and miles and miles apart
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Speaker 1: up until now, and I just don't see it going now.
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Speaker 1: That being said, real quick, before we take the break,
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Speaker 1: if it does get resolved, considering you said, this has
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Speaker 1: been baked into the cake, people expect it to end
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Speaker 1: at some point. We shouldn't see a dramatic drop post resolution, then,
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Speaker 1: should we. If they've already factored a resolution and an
9:49
Speaker 1: opening of a straight up horror moves into the into
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Speaker 1: into the equation. But I mean that won't be a
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Speaker 1: result in another dramatic drop, and we've got pent on paper.
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Speaker 3: I wouldn't say dramatic, but I could see a slight
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Speaker 3: pullback off of it news because remember, remember how this
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Speaker 3: stuff works, We buy on the rumor and sell on
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Speaker 3: the news.
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Speaker 2: That doesn't affect a.
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Speaker 3: Long term financial plan because you shouldn't be behaving that
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Speaker 3: way anyway. But like I said, everything is about speculation,
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Speaker 3: so it wouldn't surprise me at all to see things
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Speaker 3: pull back just a bit, not enough to get your attention,
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Speaker 3: just an exhale, which will be the short term trades
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Speaker 3: from those super short term speculators unwinding their positions. That
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Speaker 3: wouldn't shock me in the least, but it doesn't change
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Speaker 3: what somebody should be doing with their long term plans.
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Speaker 1: Fair enough, we'll dive into the SpaceX IPO one. Maybe
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Speaker 1: Brian can better explain a little from IPOs and why
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Speaker 1: they're happy to be challenging to get involved in. But
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Speaker 1: I'm I'm really kind of curious what SpaceX does and
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Speaker 1: going back to a price earnings ratio, they sell profitable product.
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Speaker 1: Is this going to be a long term good investment?
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Speaker 1: Who knows? Brian James can maybe shed some light on that.
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Speaker 1: Plus also coming ahead, one hundred tariffs on French wine.
10:49
Speaker 1: M Where did that come from? Eight sixteen? Right now,
10:51
Speaker 1: don't go away and be right back fifty five krc
10:54
Speaker 1: our Iheartrated talk station, Hey, nineteen fifty about pir CD
10:59
Speaker 1: talk station. Brian T Come us with Brian James. Well,
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Speaker 1: we're financial joins us to talk about money matters and
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Speaker 1: investing long term is really the ultimate goal here and
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Speaker 1: doing the right thing with your money is so very important.
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Speaker 1: If you stick to a strategy and you continue to
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Speaker 1: sock some away, you are going to get a return
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Speaker 1: on your investment in the markets and pivoting over back
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Speaker 1: to SpaceX, I guess I seem to be a bit
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Speaker 1: of a traditionalist. I know there's meme stocks and markets
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Speaker 1: and things like that. We were just talking about it.
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Speaker 1: But if I was interested in participating in an independent
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Speaker 1: public offering which you can mention down the road here,
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Speaker 1: I would look and see what does SpaceX do? What
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Speaker 1: are the products, where's the demand coming from? Is this
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Speaker 1: something that's going to generate profit and income long term?
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Speaker 1: And apparently if Elon Musk is behind it, probably is.
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Speaker 1: He's got a pretty damn good track record for making money.
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Speaker 1: So evil trillionaire are is this a good company if
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Speaker 1: you'd looked at it from a traditional standpoint. Brian James
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Speaker 1: and I seem to have lost Joe Strecker as well.
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Speaker 1: It's a part of the room. While I'm supposed to
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Speaker 1: be talking with Brian James. I apologize, folks. We'll see
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Speaker 1: when Joe comes back. We might be able to get
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Speaker 1: him back on the horn, because it's very interested in
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Speaker 1: knowing about that. So anyhow, apologies. Now I've got to
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Speaker 1: regroup here and figure out what the hell I'm gonna talk. Oh,
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Speaker 1: I can talk about this, Yeah, something I wanted to
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Speaker 1: bring up with Brian James. I saw this article authored
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Speaker 1: by Peter Daisy Me no idea, but it was an
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Speaker 1: interesting thing. And this is where I think long term
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Speaker 1: investment strategy can really work for you, as long as
12:27
Speaker 1: you just say no to maybe the frivolous, and notably,
12:33
Speaker 1: Peter starts out with, you know, I know a person
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Speaker 1: that drives a twenty eighteen camera that happens to be
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Speaker 1: the wealthiest person I know. You know it three properties,
12:41
Speaker 1: has two million dollars in investment accounts, and could buy
12:44
Speaker 1: any car on any lot without even blinking. He chooses
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Speaker 1: not to, and his explanation is both simple and profound.
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Speaker 2: Quote.
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Speaker 1: A car is a tool that takes you from one
12:56
Speaker 1: place to another. Everything beyond that is a payment for
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Speaker 1: other people perception of you now being a car guy.
13:03
Speaker 1: I may take some issue with that, but that's because
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Speaker 1: I happen to be a car guy, one little category
13:07
Speaker 1: in my life that I'm willing to spend more on
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Speaker 1: because of what I get out of it. Driving performance
13:13
Speaker 1: and cornering and handling an acceleration are all really important
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Speaker 1: things to me because I really don't have any other hobbies.
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Speaker 1: So we'll call that my little extravagance in my life.
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Speaker 1: But for the most part, you're gonna find me buying,
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Speaker 1: you know, designer label clothes. And I've used this illustration
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Speaker 1: so many times. I'm as sick that I do it.
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Speaker 1: Like women who's paid, maybe even men who buy ten
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Speaker 1: thousand dollars five thousand dollars purses, it has no more
13:37
Speaker 1: functionality than a plastic bag from Kroger. And I know
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Speaker 1: you don't what to hear me, now I can, Brian James,
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Speaker 1: sorry about that.
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Speaker 2: You didn't I didn't go anywhere.
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Speaker 3: All of a sudden I was talking and just just
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Speaker 3: unleashing some fascinating nuggets about space action.
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Speaker 2: Suddenly you weren't there, dead air I did. Sure.
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Speaker 1: None of my listening audience didn't hear a word you said, Brian.
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Speaker 1: I apologize for that. I don't know where Joe is,
13:57
Speaker 1: but we got you back on there. You can just
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Speaker 1: real quick here. I was talking about people's priorities and
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Speaker 1: where they spend money, because this is like a financial
14:06
Speaker 1: planner's dream. This article I read and I wanted to
14:09
Speaker 1: bring it up to you since I already started about it.
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Speaker 1: We can clump everything else in the next segment. But
14:12
Speaker 1: you know why spend heap loads of money on things
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Speaker 1: that don't do anything but impress other people? Bringing up
14:21
Speaker 1: you a person leasing a seventy thousand dollars suv.
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Speaker 2: You might have a.
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Speaker 1: Negative net worth, you know. Meanwhile, there's a person with
14:26
Speaker 1: one point five million in the bank, wearing jeans he
14:28
Speaker 1: bought from Target, driving a paid off Honda, and eating
14:30
Speaker 1: dinner at home. These day to day choices. Expensive coffee
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Speaker 1: came up, and I've used that illustration a million times.
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Speaker 1: I've done the math. My two pound bag of costco
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Speaker 1: I've calculated out. I know how many pots of coffee
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Speaker 1: I can make. I know how many cups make in
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Speaker 1: each pot, and I know that I multiply that times
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Speaker 1: the five bucks I'd pay at Starbucks if I went there.
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Speaker 1: I'm getting a hell of a deal with the twenty
14:51
Speaker 1: bucks I spend for two pounds of coffee. And I
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Speaker 1: don't feel that I'm suffering at all. There's so many
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Speaker 1: areas of our lives where we will overspend almost with
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Speaker 1: the idea we're just doing it to impress someone else,
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Speaker 1: and that apparently is a major major pitfall and hurdle
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Speaker 1: for people to be on the right financial path for retirement. Brian,
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Speaker 1: I hate to put you on the spot on that,
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Speaker 1: but I did want to bring it up.
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Speaker 2: Oh no, that's not the spot at all. That's my job, right.
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Speaker 2: You just described to my day to day.
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Speaker 3: So yeah, I would say there's a lot of people
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Speaker 3: out there who you know, just as much as there
15:22
Speaker 3: are people who can't lift the hood of a car
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Speaker 3: and name a single component, there are people who cannot
15:26
Speaker 3: do that with money. Those people have extraordinary strong skills
15:30
Speaker 3: in other areas, but they simply don't put two and
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Speaker 3: two together when it comes. I'll give you an example.
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Speaker 3: So sometimes people will come in, we'll do a financial plan,
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Speaker 3: and they'll say, we'll go through what are all your expenses?
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Speaker 3: And they'll say, well, here, the mortgage is this, or
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Speaker 3: the rent is that, but that's covered by this income
15:44
Speaker 3: over there, so I don't count that as an expense.
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Speaker 3: And my answer to that, and this might be like
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Speaker 3: a three four thousand dollars payment, Sometimes my answer to
15:50
Speaker 3: that is, why are we not counting it?
15:51
Speaker 2: It's an expense.
15:52
Speaker 3: I know it's covered by some kind of income, but
15:54
Speaker 3: we're talking about all of your spending. People have a
15:56
Speaker 3: way of compartmentalizing. This expense doesn't count because there's because
16:00
Speaker 3: it's nothing I can do about it. I can't adjust
16:01
Speaker 3: it anyway, and it's covered by this ex payment that
16:04
Speaker 3: I get, So therefore we're going to ignore that. And
16:06
Speaker 3: so yeah, you kind of have to tear the band
16:08
Speaker 3: aid off and pull it back. And I would also
16:09
Speaker 3: say this goes back a little bit too. You know
16:11
Speaker 3: what we like to refer to as the American dream.
16:13
Speaker 3: Everybody you know the American dream, of course is having
16:15
Speaker 3: a house and a stable life and all that kind
16:17
Speaker 3: of stuff. Well what if your neighbor moves in and
16:19
Speaker 3: all of a sudden they have a nicer house, right
16:22
Speaker 3: then am I living the same American dreamers?
16:24
Speaker 2: It a different American dream. It's just a human reaction.
16:26
Speaker 3: And we live in a country where it is possible,
16:29
Speaker 3: it's easier to better your standing in this country than
16:32
Speaker 3: anywhere else, and that that sounds great, but it does
16:36
Speaker 3: have its negatives, which is keeping up with the joneses.
16:38
Speaker 2: That's what you're really referring to. But see they really
16:40
Speaker 2: really don't like when we're behind.
16:42
Speaker 1: We let someone else's perception defind what our dream should be.
16:46
Speaker 1: You know, the the greatest dream I ever had in
16:49
Speaker 1: my life was just to be content and comfortable and
16:52
Speaker 1: not have to worry about my retirement, you know, and
16:55
Speaker 1: running around chasing after things that are you know, out
16:58
Speaker 1: of your reach. Or we always bought, you know how
17:00
Speaker 1: that were affordable, maybe a little bit smaller, maybe not
17:03
Speaker 1: as nice a neighborhood, but it was fine enough for
17:05
Speaker 1: my wife and me. This seemed like logical choices to me,
17:08
Speaker 1: And I think, I don't live my life for someone else,
17:10
Speaker 1: And I guess I struggled with the concept that that's
17:13
Speaker 1: what a lot of us do. And I know this
17:15
Speaker 1: is a criticism of capitalism sort of kind of, but
17:18
Speaker 1: capitalism is designed to build the best products for the
17:21
Speaker 1: best price. There's competition out in the world. That way,
17:23
Speaker 1: you can acquire what you actually might need, what might
17:26
Speaker 1: fulfill your version of the dream. But if you're buying
17:30
Speaker 1: it just because somebody else is going to be envious
17:32
Speaker 1: of you, at least believe that, then you're making a
17:34
Speaker 1: bad decision. You're living their life for them and probably
17:37
Speaker 1: suffering from it mightily.
17:39
Speaker 3: Now, Yeah, I read a book about this a long
17:41
Speaker 3: time ago that that actually this goes back to the
17:44
Speaker 3: wh when human beings learned how to farm stuff, because
17:48
Speaker 3: before that we were hunter gatherers, and if you ran
17:50
Speaker 3: across a nasty bunch, you just wandered somewhere else. But
17:52
Speaker 3: once we've learned how to farm stuff, we had to
17:55
Speaker 3: have land. You can't move off that land, and if
17:56
Speaker 3: somebody else comes in and wants a chunk of that land,
17:58
Speaker 3: well now you have to fight them for it. I
18:00
Speaker 3: think that was the very very beginning of making sure
18:02
Speaker 3: I have carved out my place and making sure I'm
18:04
Speaker 3: keeping up with, you know, the joneses of whatever band
18:07
Speaker 3: is about to wander on to my farmland. Because that
18:10
Speaker 3: also gave us the ability to have free time. Right
18:12
Speaker 3: when you're doing nothing but wandering around the woods looking
18:15
Speaker 3: for food, you don't have a lot of free time.
18:16
Speaker 3: But when you build a system to provide food in
18:19
Speaker 3: an ongoing manner, then all of a sudden, you have
18:21
Speaker 3: free time. And that's where we get arked and all
18:22
Speaker 3: these other things. But over thousands of years, I think
18:25
Speaker 3: that has morphed into the idea that I have to
18:28
Speaker 3: have something better than somebody else, or I can't be comfortable.
18:31
Speaker 3: That's not everybody, that's not you, that's not a lot
18:33
Speaker 3: of the people listening out here. But oh my gosh,
18:35
Speaker 3: does capitalism want to take advantage.
18:37
Speaker 2: Of KRC the talk station?
18:41
Speaker 1: Hey thirty one, if you have kercd talk station, Brian James, Monday,
18:43
Speaker 1: Monday doing that day and real quick, since we had
18:46
Speaker 1: that communication breakdown, I was asking, you know, what does
18:49
Speaker 1: SpaceX do like? If I was looking at it from
18:51
Speaker 1: an old school practical do I really want to invest
18:54
Speaker 1: in it as opposed to a mean perception? The products?
18:57
Speaker 1: Are they generally in demand kind of thing? Is it
19:00
Speaker 1: going to be a very profitable company? Because usually what
19:03
Speaker 1: Elon Musk touches it turns to gold.
19:05
Speaker 3: Brian, my old school profitability, I don't even know what
19:08
Speaker 3: those words mean anymore, Brian Thommas. So yes, SpaceX is
19:12
Speaker 3: a real company, of course. And what I mean by that,
19:14
Speaker 3: I'm I'm juxtaposing it with the the the AMC Theater
19:17
Speaker 3: and game Stop and all those kinds of things also
19:20
Speaker 3: real companies doing real things.
19:22
Speaker 2: But this is a little bit different.
19:24
Speaker 3: The herd is still chasing SpaceX as much as you
19:26
Speaker 3: chase those meme stocks for sure, and that's going to
19:28
Speaker 3: run for a while. But let's look at some details
19:30
Speaker 3: behind it. So before the IPO, remember IPO stands for
19:33
Speaker 3: initial public offering, before it's publicly offered, it is of
19:36
Speaker 3: course private, which means you don't get to know a
19:38
Speaker 3: ton about it. But the espates where revenues were about
19:41
Speaker 3: thirty five to forty billion dollars annually IBADAB about fifteen
19:45
Speaker 3: to eighteen billion, net income eight to twelve, these are
19:47
Speaker 3: all good things starlink, right, those things that you see
19:50
Speaker 3: running across the sky in a line that look really
19:52
Speaker 3: cool and people think they're alien invasions because they haven't
19:54
Speaker 3: seen one yet. That is believed to account for more
19:56
Speaker 3: than half their total profits. Launch services, that's what they're
20:00
Speaker 3: most famous for. That's what we think of. Launch services
20:03
Speaker 3: are high growth, but Starlink has become the primary profit
20:06
Speaker 3: engine there. So that makes SpaceX kind of unusual because
20:09
Speaker 3: it came public as the company was already generating significant
20:13
Speaker 3: cash flow. Cash Flow does not equal profitability, of course,
20:17
Speaker 3: So where we are right now, so at a two
20:19
Speaker 3: point one trillion dollar valuation, investors are paying roughly fifty
20:23
Speaker 3: to sixty times earnings or twelve to fifteen times revenue.
20:27
Speaker 3: Those are extremely aggressive multiples, you know, even for a
20:30
Speaker 3: mature company.
20:31
Speaker 2: So that's what we're getting at.
20:33
Speaker 1: Well fair enough, Brian, We'll see how it goes. And
20:35
Speaker 1: you know, why is it so hard to get your
20:37
Speaker 1: foot in the door on an ipo? Generally speaking? Anyway,
20:40
Speaker 1: the commonclave are never invited or rarely.
20:43
Speaker 3: Invited supplying demand and men it's literally just what is
20:46
Speaker 3: the availability and the fact that people could get to
20:48
Speaker 3: this one at all. I saw the online quotes from
20:53
Speaker 3: people talking about how they went through say Fidelity, and
20:56
Speaker 3: they asked for you know, whatever they asked for, you know,
20:58
Speaker 3: one hundred percent of their shares, they maybe got eight percent.
21:01
Speaker 3: It was a small fraction of what they truly wanted
21:04
Speaker 3: to buy. And it's just got to do with everybody
21:06
Speaker 3: once in therefore, that drives the price up, which you know,
21:09
Speaker 3: that's why we're talking about it today, that's why it's
21:11
Speaker 3: such a big headline. But because so many people want it,
21:13
Speaker 3: not everybody can get it. And this is we've seen this,
21:17
Speaker 3: of course with a lot of these other big IPOs.
21:20
Speaker 3: That's not a new part of all of this. That
21:22
Speaker 3: has always happened. It's tough to.
21:23
Speaker 2: Get in on these things.
21:24
Speaker 3: Who was really in it, of course, it's the institutional companies,
21:27
Speaker 3: and frankly the biggest of the big were in it before, right.
21:31
Speaker 3: So it went public at you know, the price, it
21:33
Speaker 3: went public at one hundred and thirty five, but it
21:36
Speaker 3: was first available right, so as soon as it was
21:38
Speaker 3: available to trade, it was one hundred and fifty. So
21:40
Speaker 3: if you were not on the ends at the one
21:42
Speaker 3: thirty five, then the soonest you could have got it
21:44
Speaker 3: was one hundred and fifty.
21:46
Speaker 1: Fair enough. And I suppose if you are in one
21:48
Speaker 1: of those big mutual funds and traded multi stock traded
21:51
Speaker 1: funds like your investors using, you probably got a chunk
21:53
Speaker 1: of it in your portfolio somewhere, at least I speculate that. Anyhow,
21:57
Speaker 1: Brian James, real quick, maybe going back to the point
22:00
Speaker 1: I made earlier about what do you really need it?
22:02
Speaker 1: Is it worth the extra money? And I got one
22:05
Speaker 1: of my good friends is one of the top tier
22:07
Speaker 1: saumiers in the world, and I'm sure there's a lot
22:09
Speaker 1: of French wines he likes. But you know what, I
22:11
Speaker 1: know a lot of really good California wines that I
22:14
Speaker 1: don't have to worry about if we tax or we
22:16
Speaker 1: tear a French wines at one hundred percent. What's the
22:19
Speaker 1: motivation behind that? And I guess is are we really
22:22
Speaker 1: going to be hurt by this at all?
22:25
Speaker 3: Well, this is less about wine and more about digital businesses.
22:28
Speaker 3: So this is about who gets to tax the profits
22:31
Speaker 3: of digital businesses. So the headline part is wine because
22:34
Speaker 3: that does hit people, you know where they might live
22:36
Speaker 3: and they'll pay attention to that.
22:38
Speaker 2: Yeah, So the threat is one hundred.
22:39
Speaker 3: Percent tariffs on French wine champagne unless France for peals.
22:43
Speaker 3: It's digital services tax that is hitting big companies like Google, Amazon, Apple,
22:47
Speaker 3: Meta and so forth. So you know, the traditionally tax
22:51
Speaker 3: systems were built around factories, stores, physical presence, that kind
22:54
Speaker 3: of thing.
22:54
Speaker 2: Tech companies can.
22:55
Speaker 3: Generate billions in revenue without setting foot in a country,
22:59
Speaker 3: can stuck a lot of money out and not have
23:01
Speaker 3: to pay any taxes. So European governments argue that that
23:04
Speaker 3: tax code has not kept up with.
23:06
Speaker 2: A digital economy and how it all works.
23:08
Speaker 3: The US says, yeah, but no big deal, because it's
23:09
Speaker 3: kind of cool we can make all this money. So
23:11
Speaker 3: there are they're arguing that taxes disproportionately target American firms
23:15
Speaker 3: and amount to a disguised tariff, which, eh, I can
23:18
Speaker 3: kind of see what they're saying, because of course these
23:21
Speaker 3: companies do happen to have been started in the United States.
23:24
Speaker 3: But I can also see if I'm a country who
23:26
Speaker 3: is seeing a lot of revenue and dollars exiting my borders,
23:30
Speaker 3: I might want to react to that.
23:31
Speaker 2: So therefore I guess they've put some new taxes in place.
23:34
Speaker 1: Yeah, Brian, why do you think they started here as
23:36
Speaker 1: opposed to France in the first place. I think we
23:39
Speaker 1: have a better economic environment for businesses generally speaking, anyway,
23:42
Speaker 1: maybe that's the reason.
23:44
Speaker 2: We absolutely do.
23:45
Speaker 3: And you know, again, like we were talking about earlier,
23:47
Speaker 3: there's pros and constant capitalism, but that's one of the
23:49
Speaker 3: big pros.
23:49
Speaker 2: This is the place where you.
23:51
Speaker 3: Can get an awful lot of favors and tax deductions,
23:54
Speaker 3: you get you get rules around how debt works, all
23:57
Speaker 3: that kind of stuff is different whenever you hear you
23:59
Speaker 3: know that, Why why companies want to come to the
24:02
Speaker 3: United States, Why people want to come to the United States.
24:04
Speaker 3: You've got the most leverage, the most ability to take
24:07
Speaker 3: advantage of a system that is built around build something
24:10
Speaker 3: and make it bigger.
24:11
Speaker 1: Well, and you also have an administration that's willing to
24:13
Speaker 1: step up to the plate levy taxes on foreign companies
24:15
Speaker 1: or foreign countries that might levy taxes on your American
24:18
Speaker 1: based business.
24:19
Speaker 2: That helps.
24:20
Speaker 1: That's worth a lot of money in and of itself.
24:21
Speaker 1: Brian James, thank you so much.